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Time Warner Inc. (TWX)

Price to FCFE (P/FCFE)

Intermediate level

Free Cash Flow to Equity (FCFE)

Time Warner Inc., FCFE calculation

US$ in millions

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12 months ended Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
Net income attributable to Time Warner Inc. shareholders 5,247  3,926  3,833  3,827  3,691 
Net loss attributable to noncontrolling interests (3) (1) (1) —  — 
Net noncash charges 10,000  10,739  9,473  9,235  9,319 
Changes in operating assets and liabilities, net of acquisitions (10,150) (9,981) (9,454) (9,381) (9,294)
Cash provided by operations 5,094  4,683  3,851  3,681  3,716 
Capital expenditures (656) (432) (423) (474) (602)
Borrowings 4,270  3,830  3,768  2,409  1,028 
Debt repayments (5,001) (3,304) (2,344) (72) (762)
Principal payments on capital leases (39) (14) (11) (11) (9)
Free cash flow to equity (FCFE) 3,668  4,763  4,841  5,533  3,371 

Based on: 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-26), 10-K (filing date: 2014-02-26).

Item Description The company
FCFE Free cash flow to equity is the cash flow available to Time Warner Inc.’s equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made. Time Warner Inc.’s FCFE decreased from 2015 to 2016 and from 2016 to 2017.

Price to FCFE Ratio, Current

Time Warner Inc., current P/FCFE calculation, comparison to benchmarks

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No. shares of common stock outstanding 782,319,431
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions) 3,668 
FCFE per share 4.69
Current share price (P) 98.77
Valuation Ratio
P/FCFE 21.07
Benchmarks
P/FCFE, Competitors1
Charter Communications Inc. 17.52
Comcast Corp. 4.04
Walt Disney Co. 55.85
P/FCFE, Sector
Media 14.99
P/FCFE, Industry
Consumer Services 23.36

Based on: 10-K (filing date: 2018-02-22).

1 Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

Price to FCFE Ratio, Historical

Time Warner Inc., historical P/FCFE calculation, comparison to benchmarks

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Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014 Dec 31, 2013
No. shares of common stock outstanding1 779,851,623 774,334,281 790,154,346 830,521,982 892,661,216
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)2 3,668  4,763  4,841  5,533  3,371 
FCFE per share3 4.70 6.15 6.13 6.66 3.78
Share price1, 4 94.37 97.06 66.66 82.42 64.69
Valuation Ratio
P/FCFE5 20.06 15.78 10.88 12.37 17.13
Benchmarks
P/FCFE, Competitors6
Charter Communications Inc. 7.75 20.50 1.19 2.86 —
Comcast Corp. 14.85 10.91 14.30 16.94 —
Walt Disney Co. 12.49 13.74 20.98 21.45 —
P/FCFE, Sector
Media 11.82 13.19 10.36 14.07 —
P/FCFE, Industry
Consumer Services 18.58 17.17 14.77 17.50 —

Based on: 10-K (filing date: 2018-02-22), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-25), 10-K (filing date: 2015-02-26), 10-K (filing date: 2014-02-26).

1 Data adjusted for splits and stock dividends.

2 See details »

3 2017 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 3,668,000,000 ÷ 779,851,623 = 4.70

4 Closing price as at the filing date of Time Warner Inc.’s Annual Report.

5 2017 Calculation
P/FCFE = Share price ÷ FCFE per share
= 94.37 ÷ 4.70 = 20.06

6 Click competitor name to see calculations.

Valuation ratio Description The company
P/FCFE Price to free cash flow to equity is cash valuation indicator of stockholders’ equity. Time Warner Inc.’s P/FCFE ratio increased from 2015 to 2016 and from 2016 to 2017.