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United Technologies Corp. (UTX)


Enterprise Value to EBITDA (EV/EBITDA)

Difficulty: Intermediate


Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)

United Technologies Corp., EBITDA calculation

US$ in millions

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12 months ended Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net income attributable to common shareowners 5,269  4,552  5,055  7,608  6,220 
Add: Net income attributable to noncontrolling interest 385  368  371  358  403 
Less: Net income (loss) from discontinued operations —  —  (10) 3,610  — 
Add: Income tax expense 2,626  2,843  1,697  2,111  2,264 
Earnings before tax (EBT) 8,280  7,763  7,133  6,467  8,887 
Add: Interest expense 1,225  1,017  1,161  945  1,100 
Earnings before interest and tax (EBIT) 9,505  8,780  8,294  7,412  9,987 
Add: Depreciation and amortization 2,433  2,140  1,962  1,863  1,907 
Earnings before interest, tax, depreciation and amortization (EBITDA) 11,938  10,920  10,256  9,275  11,894 

Based on: 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-05).

Item Description The company
EBITDA To calculate EBITDA analysts start with net earnings. To that earnings number, interest, taxes, depreciation, and amortization are added. EBITDA as a pre-interest number is a flow to all providers of capital. United Technologies Corp.’s EBITDA increased from 2016 to 2017 and from 2017 to 2018.

Enterprise Value to EBITDA Ratio, Current

United Technologies Corp., current EV/EBITDA calculation, comparison to benchmarks

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Selected Financial Data (US$ in millions)
Enterprise value (EV) 158,825 
Earnings before interest, tax, depreciation and amortization (EBITDA) 11,938 
Valuation Ratio
EV/EBITDA 13.30
Benchmarks
EV/EBITDA, Competitors1
Boeing Co. 15.20
General Dynamics Corp. 12.10
Lockheed Martin Corp. 15.84
Northrop Grumman Corp. 14.66
Raytheon Co. 14.61
EV/EBITDA, Sector
Aerospace & Defense 14.39
EV/EBITDA, Industry
Industrials 15.29

Based on: 10-K (filing date: 2019-02-07).

1 Click competitor name to see calculations.

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


Enterprise Value to EBITDA Ratio, Historical

United Technologies Corp., historical EV/EBITDA calculation, comparison to benchmarks

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Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 145,579  120,307  107,051  85,648  124,869 
Earnings before interest, tax, depreciation and amortization (EBITDA)2 11,938  10,920  10,256  9,275  11,894 
Valuation Ratio
EV/EBITDA3 12.19 11.02 10.44 9.23 10.50
Benchmarks
EV/EBITDA, Competitors4
Boeing Co. 16.52 16.31 12.89 8.11 10.70
General Dynamics Corp. 11.77 13.64 11.91 8.92 10.21
Lockheed Martin Corp. 12.86 15.32 12.94 12.38 9.96
Northrop Grumman Corp. 11.68 16.21 12.12 10.78 9.14
Raytheon Co. 13.47 16.28 12.29 11.45 9.28
EV/EBITDA, Sector
Aerospace & Defense 13.58 14.50 11.96 9.83 10.19
EV/EBITDA, Industry
Industrials 15.02 15.26 13.29 11.89 11.61

Based on: 10-K (filing date: 2019-02-07), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-09), 10-K (filing date: 2016-02-11), 10-K (filing date: 2015-02-05).

1 See details »

2 See details »

3 2018 Calculation
EV/EBITDA = EV ÷ EBITDA
= 145,579 ÷ 11,938 = 12.19

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/EBITDA Enterprise value to earnings before interest, tax, depreciation and amortization is a valuation indicator for the overall company rather than common stock. United Technologies Corp.’s EV/EBITDA ratio increased from 2016 to 2017 and from 2017 to 2018.