Time Warner Inc.

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker Analyst Analyst Email
Pacific Crest Securities-KBCM Andy Hargreaves ahargreaves@pacific-crest.com
Nomura Anthony DiClemente anthony.diclemente@nomura.com
Stifel Nicolaus Benjamin E. Mogil bmogil@stifel.com
Pivotal Research Group Brian Wieser brian@pvtl.com
Deutsche Bank Research Bryan Kraft bryan.kraft@db.com
Topeka Capital Markets David W. Miller dwm@topekacapitalmarkets.com
Cowen & Company Doug Creutz doug.creutz@cowen.com
Wells Fargo Securities John Janedis jjanedis@jefferies.com
Needham Laura Martin lmartin@needhamco.com
Cowen & Company Marci Ryvicker marci.ryvicker@wellsfargo.com
Guggenheim Securities Michael C. Morris michael.morris@guggenheimpartners.com
RBC Capital Markets Steven Cahall steven.cahall@rbccm.com
Drexel Hamilton Tony Wible twible@drexelhamilton.com
Deutsche Bank Research Bryan Kraft bryan.kraft@db.com
Raymond James Frank G. Louthan IV frank.louthan@raymondjames.com
Barrington Research James C. Goss jcg@brai.com
Scotiabank GBM Jeffrey Fan jeff.fan@scotiabank.com
RBC Capital Markets Jonathan Atkin jonathan.atkin@rbccm.com
Needham Laura Martin lmartin@needhamco.com
Wells Fargo Securities Marci Ryvicker marci.ryvicker@wellsfargo.com
Wunderlich Securities Matthew Harrigan mharrigan@wundernet.com
Jefferies Mike McCormack mmccormack@jefferies.com
Evercore ISI Vijay Jayant vijay.jayant@evercoreisi.com

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Primary Input Data

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Derived Input Data

Derived Input

Label

2015 Value

2016
Value

Equational Form
Net Operating Profit Less Adjusted Taxes NOPLAT  4,447 4,954 NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)
Free Cash Flow FCF 3,428 4,251 FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS
Tax Shield TS 420 343 TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income
Invested Capital IC 55,846 56,263 IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital
Return on Invested Capital ROIC 7.96% 8.81% ROIC\,=\,\frac { NOPLAT }{ IC }
Net Investment NetInv 173 1,086 NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation
Investment Rate IR 3.89% 21.92% IR\,=\,\frac {NetInv}{NOPLAT}
Weighted Average Cost of Capital
 WACCMarket 8.99% 15.68% WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)
 WACCBook  6.95%  6.40%
Enterprise value
 EVMarket 75,846 101,909 EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook  73,468  95,374
Long-Run Growth
 g = IR x ROIC
   0.31%   1.93% Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
g = % \Delta GDP   2.50%   2.50%
Margin from Operations M  24.33%  26.00% M\,\,=\,\,\frac{EBIT}{SALES}
Depreciation/Amortization Rate D  9.05%  8.07% D\,\,=\,\,\frac{D+A}{EBITDA}

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form

Observed Value

Single-stage

multiple g solution

Two-stage valuation

model g solution
12/31/2015 12/31/2016 12/31/2015 12/31/2016 12/31/2015 12/31/2016

EV/SALES 

\frac {EV}{Sales} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)

  2.70  3.48  11.87%  24.16%  10.73%  18.18%

EV/EBITDA

\frac {EV}{EBITDA} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)

 10.08 12.29 11.87% 24.16% 10.73% 18.18%

EV/NOPLAT

\frac {EV}{NOPLAT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}

 17.06 20.57 11.87% 24.16% 10.73% 18.18%

EV/FCFOPS

\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

 22.13 23.97 11.87% 24.16% 10.73% 18.18%

EV/EBIT

\frac {EV}{EBIT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

 11.09 13.37 11.87% 24.16% 10.73% 18.18%

EV/IC

\frac {EV}{IC} \,= \,\frac{ROIC\,  -\,  g}{WACC\,-\,g}

 1.36 1.81 11.87% 24.16% 10.73% 18.18%

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