Time Warner Cable Inc. (NYSE:TWC)

Net income attributable to TWC shareholders

The net income showed an upward trend from 2011 to 2012, increasing from $1665 million to $2155 million. However, in 2013 a decline occurred to $1954 million, followed by a slight recovery in 2014 to $2031 million. The year 2015 saw another decrease to $1844 million, indicating a general volatility with a peak in 2012 and subsequent fluctuations.

Net operating profit after taxes (NOPAT)

NOPAT increased from $3328 million in 2011 to $3807 million in 2012, mirroring the peak found in net income for the same year. In 2013, NOPAT declined to $3388 million but rose again in 2014 to $3745 million, approaching the 2012 level. By 2015, NOPAT decreased to $3391 million, showing the same fluctuating pattern observed in net income, with 2012 and 2014 as relatively stronger years.

Overall financial performance trends

Both net income and NOPAT exhibited similar cyclical patterns over the five-year period. The highest values were observed in the early part of the timeframe (specifically 2012), followed by periods of decline and partial recovery. This suggests fluctuations in profitability and operating efficiency, potentially reflecting changes in operational effectiveness, market conditions, or other external factors influencing financial outcomes.

The financial data indicates fluctuations in the income tax provision and cash operating taxes of the company over the five-year period ending December 31, 2015.

Income Tax Provision

The income tax provision demonstrates an overall upward trend from 2011 through 2014, increasing from 795 million US dollars in 2011 to a peak of 1,217 million in 2014. However, in 2015, there is a slight decline to 1,144 million US dollars. This suggests rising taxable earnings or adjustments in tax liabilities during the initial years followed by a moderate reduction in the last year.

Cash Operating Taxes

Cash operating taxes present a more variable pattern. Beginning at 705 million US dollars in 2011, the amount rises sharply to 1,194 million in 2012 and continues to increase to 1,281 million in 2013. Subsequently, it decreases to 973 million in 2014 before partially rebounding to 1,057 million in 2015. This fluctuation may reflect changes in the company's actual cash outflows for taxes, potentially influenced by alterations in tax payment timing, tax credits, or tax planning strategies.

Overall, while the income tax provision generally increased over the period with a minor decline at the end, the cash operating taxes followed a less consistent path, showing considerable volatility. The divergence between the income tax provision and cash operating taxes in certain years may indicate differences between accounting for tax expenses and actual cash paid, affecting cash flow management and tax planning effectiveness.

Total reported debt & leases

The reported debt and leases demonstrate a consistent declining trend over the observed period. Starting at 27,138 million USD at the end of 2011, the debt slightly increased to 27,378 million USD in 2012, then steadily decreased each year thereafter, reaching 23,183 million USD by the end of 2015. This indicates a reduction in the company's leverage or obligations related to debt and lease commitments over five years.

Total shareholders’ equity

Shareholders’ equity shows some fluctuations but a general upward trend across the period. Initially, the equity value decreased from 7,530 million USD in 2011 to 6,943 million USD in 2013. Afterward, the equity figures improved significantly, increasing to 8,013 million USD in 2014 and further to 8,995 million USD by the end of 2015. This growth suggests strengthening of the company's net asset position or profitability retention over time.

Invested capital

Invested capital remained relatively stable throughout the period, with minor fluctuations. It started at 44,961 million USD in 2011, peaked at 46,124 million USD in 2012, then decreased to 44,327 million USD in 2013. It showed slight increases in subsequent years, ending at 45,332 million USD in 2015. This stability reflects consistency in the company's overall capital base employed in operations.

Economic Profit Trend

The economic profit values consistently show negative figures throughout the observed periods, indicating a persistent economic loss. The amount of loss improved notably from -653 million in 2011 to -100 million in 2012, suggesting a temporary enhancement in profitability. However, this trend reversed in 2013 with a significant deterioration to -1,139 million and remained substantially negative in the following years, culminating in the largest loss of -1,627 million in 2015.

Invested Capital Trends

Invested capital remained relatively stable over the five-year span, fluctuating moderately without any clear upward or downward trend. Starting at approximately 44,961 million US dollars in 2011, the amount rose slightly in 2012 to 46,124 million, decreased again to 44,327 million in 2013, and then modestly increased in the subsequent years, reaching 45,332 million by the end of 2015.

Economic Spread Ratio Trends

The economic spread ratio exhibited a negative trajectory throughout the analyzed timeframe. Beginning at -1.45% in 2011, the ratio improved to -0.22% in 2012, indicating a marginal narrowing of the negative spread. Nonetheless, subsequent years showed a significant decline, dropping to -2.57% in 2013 and maintaining a worsening trend, hitting -3.59% by 2015. This decline aligns with the patterns seen in economic profit, reflecting increasing inefficiencies or challenges in generating returns above the cost of capital.

Overall Financial Performance Insights

The persistent negative economic profit combined with a worsening economic spread ratio signals ongoing difficulties in creating value above the cost of invested capital. Despite relatively stable invested capital, the company’s return on this investment appears insufficient, indicating either operational challenges or unfavorable market conditions. The temporary improvements in 2012 suggest there were short-lived gains or cost management efforts that ultimately were not sustained in the following years.

The financial data reveals distinct patterns and trends over the five-year period under review. While adjusted revenue demonstrated a consistent upward trajectory each year, there are contrasting movements in economic profit and economic profit margin.

Adjusted Revenue

Adjusted revenue showed steady annual growth, increasing from 19,681 million US dollars in 2011 to 23,723 million US dollars in 2015. This represents a gradual increase, indicating ongoing expansion in the company's revenue-generating activities over the period.

Economic Profit

In stark contrast to revenue growth, economic profit remained negative throughout the period, with considerable fluctuations. Starting at -653 million US dollars in 2011, it improved substantially to -100 million in 2012, but then deteriorated sharply to -1,139 million in 2013. A slight recovery occurred in 2014 with economic profit reaching -771 million, followed by a further decline to -1,627 million in 2015. This volatility suggests challenges in generating returns above the company’s cost of capital despite increasing revenues.

Economic Profit Margin (%)

The economic profit margin mirrored the trend observed in economic profit, remaining negative during the entire timeframe. The margin improved considerably in 2012 to -0.47% from -3.32% in 2011 but worsened significantly in 2013 to -5.15%. It slightly recovered to -3.38% in 2014 but declined again to reach the lowest point at -6.86% in 2015. This pattern indicates that the company’s losses relative to revenue intensified towards the end of the period.

Overall, the data suggests an expansion in revenue accompanied by persistent and increasing economic losses, highlighting potential issues with cost management or capital efficiency that outweigh revenue gains. The negative and volatile economic profit margins further emphasize the firm's struggle to generate economic value consistently.