CHARTER COMMUNICATIONS INC INCOME STATEMENT2014 ($ million)Revenue9 108Cost of revenue4 562Gross profit4 546Operating expensesSales General and administrative529Other operating expenses3 046Total operating expenses3 575Operating income971Other income (expense)918Income before taxes53Provision for income taxes236Net income from continuing operations183Net income183CHARTER COMMUNICATIONS INC BALANCE SHEET2014 ($million)AssetsCurrent AssetsCash and cash equivalents3Total cash3Receivables285Prepaid expenses83Total current assets371Noncurrent assetsProperty plant and equipmentGross property plant and equipment13857Accumulated Depreciation5484Net property plant and equipment8373Goodwill1168Intangible assets7325Other longterm assets7313Total noncurrent assets24179Total assets24550Liabilities and stockholders’ equityCurrent liabilitiesAccounts payable140Accrued liabilities1410Deferred revenues85Total current liabilities1635Noncurrent liabilitiesLongterm debt21023Deferred taxes liabilities1674Other longterm liabilities72Total noncurrent liabilities22769Total liabilities24404Stockholders’ equityAdditional paidin capital1930Retained earnings1762Treasury stockAccumulated other comprehensive income22Total stockholders’ equity146Total liabilities and stockholders’ equity24550TIME WARNER CABLE INC (TWC) INCOME STATEMENT2014 ($ million)Revenue22 812Cost of revenue5 294Gross profit17 518Operating expensesSales General and administrative4 561Restructuring merger and acquisition225Other operating expenses8 100Total operating expenses12 886Operating income4 632Interest Expense1 419Other income (expense)35Income before taxes3 248Provision for income taxes1 217Net income from continuing operations2 031Net income2 031TIME WARNER CABLE INC (TWC) BALANCE SHEET2014 ($million)AssetsCurrent assetsCash and cash equivalents707Receivables949Deferred income taxes269Prepaid expenses365Other current assets26Total current assets2316Noncurrent assetsGross property plant and equipment38552Accumulated Depreciation22562Net property plant and equipment15990Equity and other investments64Goodwill3137Intangible assets26535Other longterm assets459Total noncurrent assets46185Total assets48501Liabilities and stockholders’ equityCurrent liabilitiesShortterm debt1017Accounts payable567Accrued liabilities2715Deferred revenues198Total current liabilities4497Noncurrent liabilitiesLongterm debt22701Deferred taxes liabilities12560Minority interest4Other longterm liabilities726Total noncurrent liabilities35991Total liabilities40488Stockholders’ equityCommon stock3Additional paidin capital7172Retained earnings1162Accumulated other comprehensive income324Total stockholders’ equity8013Total liabilities and stockholders’ equity48501 CHARTER COMMUNICATIONS INC Statement of CASH FLOW(Source: www.morningstar.com)Cash Flows From Operating ActivitiesNet incomeDepreciation & amortizationAmortization of debt discount/premium and issuance costsDeferred income taxesAccounts receivablePrepaid expensesOther working capitalOther noncash itemsNet cash provided by operating activitiesCash Flows From Investing ActivitiesInvestments in property plant and equipmentOther investing activitiesNet cash used for investing activitiesCash Flows From Financing ActivitiesDebt issuedDebt repaymentPreferred stock repaidCommon stock repurchasedOther financing activitiesNet cash provided by (used for) financing activitiesNet change in cashCash at beginning of periodCash at end of periodFree Cash FlowOperating cash flowCapital expenditureFree cash flowANALYSIS2014$million18321022335191581092359222170839304880619801912069271821323592188171($ million)20142015201620172018201920202021202220232024171188.1206.91 227.601 250.3611 275.39721 302.93693 333.23062 366.55369 403.20906 443.52996071 0.8695652 0.7561437 0.6575162 0.5717532 0.4971767 0.4323276 0.375937 0.3269018 0.2842624 0.247184706171 163.56522 156.45369 149.65135 143.14477 136.92109 130.968 125.27373 119.82705 114.61718 109.6338231 521.062 699.75$4 220.80 MillionFree cash flowDiscounting factor @15%PV @ 15%Total present ValueResidual valueNet Present Value (Value of the firm)Assumption:* The free cash flow increases with the constant rate of 10% each year for the next 10 years.* Thegrowth rate in cash flows becomes 5% per year thereafter.* The WACC or discounted rate is 15% for each year© Copyright Morningstar Inc. All rights reserved. Please read our Terms of Useand Privacy Policy.Dow Jones Industrial Average S&P 500 Nasdaq and Morningstar Index (Market Barometer) quotes are realtime. Russell 2000 quote is 10 minutes delayed.end copyright seoend footerwrap TIME WARNER CABLE INC (TWC) Statement of CASH FLOW(Source: www.morningstar.com)Cash Flows From Operating ActivitiesNet incomeDepreciation & amortizationInvestment/asset impairment chargesDeferred income taxesStock based compensationAccounts payableOther working capitalOther noncash itemsNet cash provided by operating activitiesCash Flows From Investing ActivitiesInvestments in property plant and equipmentAcquisitions netPurchases of investmentsSales/Maturities of investmentsPurchases of intangiblesSales of intangiblesOther investing activitiesNet cash used for investing activitiesCash Flows From Financing ActivitiesDebt issuedDebt repaymentPreferred stock repaidCommon stock repurchasedExcess tax benefit from stock based compensationDividend paidOther financing activitiesNet cash provided by (used for) financing activitiesNet change in cashCash at beginning of periodCash at end of periodFree Cash FlowOperating cash flowCapital expenditureFree cash flowANALYSIS2014$million203133717561828282154635041362193966409250717502591418571422076182525707635041362214($ million)2014201520162017201820192020202120222023202422142435.4 2678.94 2946.834 3241.5174 3565.6691 3922.2361 4314.4597 4745.9056 5220.49619 5742.5458071 0.8695652 0.7561437 0.6575162 0.5717532 0.4971767 0.4323276 0.375937 0.3269018 0.28426241 0.2471847062214 2117.7391 2025.6635 1937.5912 1853.3481 1772.7677 1695.6909 1621.9652 1551.445 1483.99084 1419.46949819 693.6734 954.63$54 648.30 Million(That is the amount the Charter Comm will have to pay to acquire the Time Warner Inc.)Free cash flowDiscounting factor @15%PV @ 15%Total present ValueResidual valueNet Present Value (Value of the firm)Assumption:* The free cash flow increases with the constant rate of 10% each year for the next 10 years.* Thegrowth rate in cash flows becomes 5% per year thereafter.* The WACC or discounted rate is 15% for each year8
