Intrinsic value of Time Inc. - TIME

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$18.30

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$18.30

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

 
Value-price divergence* premium content

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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of TIME stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -0.87
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  3,076
  3,138
  3,210
  3,292
  3,385
  3,487
  3,600
  3,723
  3,855
  3,998
  4,152
  4,316
  4,491
  4,678
  4,876
  5,086
  5,309
  5,545
  5,794
  6,058
  6,336
  6,630
  6,940
  7,266
  7,610
  7,973
  8,354
  8,756
  9,178
  9,623
  10,090
Variable operating expenses, $m
 
  3,965
  4,051
  4,150
  4,261
  4,384
  4,519
  4,666
  4,825
  4,996
  5,180
  5,169
  5,379
  5,602
  5,840
  6,092
  6,359
  6,641
  6,940
  7,256
  7,589
  7,941
  8,312
  8,703
  9,115
  9,549
  10,006
  10,487
  10,993
  11,525
  12,085
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,070
  3,965
  4,051
  4,150
  4,261
  4,384
  4,519
  4,666
  4,825
  4,996
  5,180
  5,169
  5,379
  5,602
  5,840
  6,092
  6,359
  6,641
  6,940
  7,256
  7,589
  7,941
  8,312
  8,703
  9,115
  9,549
  10,006
  10,487
  10,993
  11,525
  12,085
Operating income, $m
  6
  -827
  -842
  -858
  -876
  -896
  -919
  -943
  -969
  -998
  -1,028
  -853
  -888
  -925
  -964
  -1,006
  -1,050
  -1,096
  -1,146
  -1,198
  -1,253
  -1,311
  -1,372
  -1,437
  -1,505
  -1,576
  -1,652
  -1,731
  -1,815
  -1,903
  -1,995
EBITDA, $m
  143
  -568
  -581
  -596
  -613
  -631
  -652
  -674
  -698
  -724
  -752
  -781
  -813
  -847
  -883
  -921
  -961
  -1,004
  -1,049
  -1,097
  -1,147
  -1,201
  -1,257
  -1,316
  -1,378
  -1,444
  -1,513
  -1,585
  -1,662
  -1,742
  -1,827
Interest expense (income), $m
  66
  64
  67
  71
  75
  79
  84
  89
  95
  102
  109
  116
  124
  132
  141
  151
  161
  172
  183
  195
  208
  222
  236
  251
  267
  283
  301
  319
  338
  359
  380
Earnings before tax, $m
  -81
  -891
  -909
  -928
  -951
  -976
  -1,003
  -1,032
  -1,065
  -1,099
  -1,137
  -969
  -1,012
  -1,057
  -1,106
  -1,157
  -1,211
  -1,268
  -1,329
  -1,393
  -1,461
  -1,533
  -1,608
  -1,688
  -1,771
  -1,860
  -1,953
  -2,050
  -2,153
  -2,262
  -2,376
Tax expense, $m
  -33
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -48
  -891
  -909
  -928
  -951
  -976
  -1,003
  -1,032
  -1,065
  -1,099
  -1,137
  -969
  -1,012
  -1,057
  -1,106
  -1,157
  -1,211
  -1,268
  -1,329
  -1,393
  -1,461
  -1,533
  -1,608
  -1,688
  -1,771
  -1,860
  -1,953
  -2,050
  -2,153
  -2,262
  -2,376

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  336
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  4,305
  4,048
  4,142
  4,248
  4,367
  4,500
  4,645
  4,803
  4,975
  5,159
  5,357
  5,569
  5,795
  6,036
  6,291
  6,563
  6,850
  7,155
  7,477
  7,817
  8,176
  8,555
  8,955
  9,376
  9,820
  10,287
  10,779
  11,298
  11,843
  12,416
  13,020
Adjusted assets (=assets-cash), $m
  3,969
  4,048
  4,142
  4,248
  4,367
  4,500
  4,645
  4,803
  4,975
  5,159
  5,357
  5,569
  5,795
  6,036
  6,291
  6,563
  6,850
  7,155
  7,477
  7,817
  8,176
  8,555
  8,955
  9,376
  9,820
  10,287
  10,779
  11,298
  11,843
  12,416
  13,020
Revenue / Adjusted assets
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
  0.775
Average production assets, $m
  1,232
  1,255
  1,284
  1,317
  1,354
  1,395
  1,440
  1,489
  1,542
  1,599
  1,661
  1,726
  1,796
  1,871
  1,950
  2,034
  2,124
  2,218
  2,318
  2,423
  2,535
  2,652
  2,776
  2,907
  3,044
  3,189
  3,342
  3,502
  3,671
  3,849
  4,036
Working capital, $m
  12
  -323
  -331
  -339
  -349
  -359
  -371
  -383
  -397
  -412
  -428
  -445
  -463
  -482
  -502
  -524
  -547
  -571
  -597
  -624
  -653
  -683
  -715
  -748
  -784
  -821
  -860
  -902
  -945
  -991
  -1,039
Total debt, $m
  1,240
  1,290
  1,357
  1,434
  1,520
  1,615
  1,720
  1,833
  1,957
  2,090
  2,232
  2,385
  2,547
  2,721
  2,905
  3,100
  3,307
  3,526
  3,758
  4,003
  4,262
  4,535
  4,822
  5,126
  5,445
  5,782
  6,136
  6,509
  6,902
  7,315
  7,749
Total liabilities, $m
  2,865
  2,915
  2,982
  3,059
  3,145
  3,240
  3,345
  3,458
  3,582
  3,715
  3,857
  4,010
  4,172
  4,346
  4,530
  4,725
  4,932
  5,151
  5,383
  5,628
  5,887
  6,160
  6,447
  6,751
  7,070
  7,407
  7,761
  8,134
  8,527
  8,940
  9,374
Total equity, $m
  1,440
  1,134
  1,160
  1,189
  1,223
  1,260
  1,301
  1,345
  1,393
  1,445
  1,500
  1,559
  1,623
  1,690
  1,762
  1,838
  1,918
  2,003
  2,093
  2,189
  2,289
  2,395
  2,507
  2,625
  2,750
  2,880
  3,018
  3,163
  3,316
  3,477
  3,645
Total liabilities and equity, $m
  4,305
  4,049
  4,142
  4,248
  4,368
  4,500
  4,646
  4,803
  4,975
  5,160
  5,357
  5,569
  5,795
  6,036
  6,292
  6,563
  6,850
  7,154
  7,476
  7,817
  8,176
  8,555
  8,954
  9,376
  9,820
  10,287
  10,779
  11,297
  11,843
  12,417
  13,019
Debt-to-equity ratio
  0.861
  1.140
  1.170
  1.210
  1.240
  1.280
  1.320
  1.360
  1.400
  1.450
  1.490
  1.530
  1.570
  1.610
  1.650
  1.690
  1.720
  1.760
  1.800
  1.830
  1.860
  1.890
  1.920
  1.950
  1.980
  2.010
  2.030
  2.060
  2.080
  2.100
  2.130
Adjusted equity ratio
  0.278
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280
  0.280

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -48
  -891
  -909
  -928
  -951
  -976
  -1,003
  -1,032
  -1,065
  -1,099
  -1,137
  -969
  -1,012
  -1,057
  -1,106
  -1,157
  -1,211
  -1,268
  -1,329
  -1,393
  -1,461
  -1,533
  -1,608
  -1,688
  -1,771
  -1,860
  -1,953
  -2,050
  -2,153
  -2,262
  -2,376
Depreciation, amort., depletion, $m
  137
  259
  260
  262
  263
  265
  267
  269
  271
  274
  276
  72
  75
  78
  81
  85
  88
  92
  97
  101
  106
  111
  116
  121
  127
  133
  139
  146
  153
  160
  168
Funds from operations, $m
  117
  -632
  -648
  -667
  -687
  -710
  -736
  -763
  -793
  -826
  -860
  -898
  -937
  -979
  -1,024
  -1,072
  -1,123
  -1,176
  -1,233
  -1,292
  -1,355
  -1,422
  -1,492
  -1,566
  -1,645
  -1,727
  -1,813
  -1,904
  -2,000
  -2,101
  -2,207
Change in working capital, $m
  -78
  -6
  -7
  -8
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -26
  -27
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41
  -44
  -46
  -48
Cash from operations, $m
  195
  -707
  -641
  -658
  -678
  -700
  -724
  -751
  -780
  -811
  -845
  -881
  -919
  -960
  -1,004
  -1,050
  -1,100
  -1,152
  -1,207
  -1,265
  -1,327
  -1,392
  -1,460
  -1,533
  -1,609
  -1,689
  -1,774
  -1,863
  -1,957
  -2,055
  -2,159
Maintenance CAPEX, $m
  0
  -51
  -52
  -53
  -55
  -56
  -58
  -60
  -62
  -64
  -67
  -69
  -72
  -75
  -78
  -81
  -85
  -88
  -92
  -97
  -101
  -106
  -111
  -116
  -121
  -127
  -133
  -139
  -146
  -153
  -160
New CAPEX, $m
  -101
  -24
  -29
  -33
  -37
  -41
  -45
  -49
  -53
  -57
  -61
  -66
  -70
  -75
  -79
  -84
  -89
  -94
  -100
  -105
  -111
  -117
  -124
  -131
  -138
  -145
  -153
  -161
  -169
  -178
  -187
Cash from investing activities, $m
  -282
  -75
  -81
  -86
  -92
  -97
  -103
  -109
  -115
  -121
  -128
  -135
  -142
  -150
  -157
  -165
  -174
  -182
  -192
  -202
  -212
  -223
  -235
  -247
  -259
  -272
  -286
  -300
  -315
  -331
  -347
Free cash flow, $m
  -87
  -782
  -722
  -745
  -770
  -797
  -827
  -860
  -895
  -932
  -973
  -1,015
  -1,061
  -1,110
  -1,161
  -1,216
  -1,273
  -1,335
  -1,399
  -1,467
  -1,539
  -1,615
  -1,695
  -1,779
  -1,868
  -1,961
  -2,060
  -2,163
  -2,272
  -2,386
  -2,507
Issuance/(repayment) of debt, $m
  -52
  57
  67
  77
  86
  95
  105
  114
  123
  133
  143
  153
  163
  173
  184
  195
  207
  219
  232
  245
  259
  273
  288
  303
  320
  337
  354
  373
  393
  413
  434
Issuance/(repurchase) of shares, $m
  -116
  419
  681
  698
  717
  739
  763
  790
  820
  851
  886
  922
  962
  1,004
  1,049
  1,096
  1,147
  1,201
  1,257
  1,318
  1,381
  1,448
  1,519
  1,594
  1,673
  1,756
  1,843
  1,935
  2,032
  2,134
  2,241
Cash from financing (excl. dividends), $m  
  -181
  476
  748
  775
  803
  834
  868
  904
  943
  984
  1,029
  1,075
  1,125
  1,177
  1,233
  1,291
  1,354
  1,420
  1,489
  1,563
  1,640
  1,721
  1,807
  1,897
  1,993
  2,093
  2,197
  2,308
  2,425
  2,547
  2,675
Total cash flow (excl. dividends), $m
  -278
  -725
  -655
  -668
  -684
  -702
  -723
  -746
  -772
  -800
  -830
  -863
  -898
  -936
  -977
  -1,020
  -1,066
  -1,115
  -1,167
  -1,222
  -1,281
  -1,342
  -1,407
  -1,476
  -1,548
  -1,625
  -1,705
  -1,790
  -1,879
  -1,973
  -2,072
Retained Cash Flow (-), $m
  369
  -23
  -26
  -30
  -33
  -37
  -41
  -44
  -48
  -52
  -55
  -59
  -63
  -67
  -72
  -76
  -81
  -85
  -90
  -95
  -101
  -106
  -112
  -118
  -124
  -131
  -138
  -145
  -153
  -161
  -169
Prev. year cash balance distribution, $m
 
  329
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Discount rate, %
 
  6.10
  6.41
  6.73
  7.06
  7.41
  7.79
  8.17
  8.58
  9.01
  9.46
  9.94
  10.43
  10.95
  11.50
  12.08
  12.68
  13.32
  13.98
  14.68
  15.41
  16.19
  16.99
  17.84
  18.74
  19.67
  20.66
  21.69
  22.77
  23.91
  25.11
PV of cash for distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  77.0
  52.1
  35.3
  23.9
  16.1
  10.9
  7.4
  5.0
  3.3
  2.2
  1.5
  1.0
  0.7
  0.5
  0.3
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Time Inc., together with its subsidiaries, operates as a media company that publishes magazines in the United States, the United Kingdom, and internationally. It publishes magazines under People, Sports Illustrated, InStyle, Time, Real Simple, Southern Living, Entertainment Weekly, Travel + Leisure, Cooking Light, Fortune, and Food & Wine names in the United States, as well as approximately 50 diverse titles in the United Kingdom, such as Decanter, Horse & Hound, and Wallpaper. The company also provides content marketing, targeted local print and digital advertising programs, branded book publishing, and marketing and support services, including subscription sales services for magazines and other products, retail distribution and marketing services and customer service, and fulfillment services for third-party clients, including other magazine publishers. In addition, it operates magazine related Websites; markets magazine subscriptions in the United States; and publishes branded books, including soft-cover ‘bookazines’ through magazine-style ‘check-out pockets’ at retail outlets and traditional trade book channels; books on a range of topics aligned with its brands, including special commemorative and biographical books; and books under various licensed third-party brands and original titles. Further, the company publishes various home, cooking, and health books under its lifestyle-oriented brands and under licensed third-party brands; and licenses approximately 50 editions of its magazines to publishers in approximately 30 countries, as well as use of its trademarks, individual articles, photos, and other copyrighted content. Time Inc. has a strategic partnership with JASH to provide a multi-platform comedy content creation engine for advertisers. The company was founded in 1922 and is headquartered in New York, New York.

FINANCIAL RATIOS  of  Time Inc. (TIME)

Valuation Ratios
P/E Ratio -37.7
Price to Sales 0.6
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 9.3
Price to Free Cash Flow 19.3
Growth Rates
Sales Growth Rate -0.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -52.4%
Cap. Spend. - 3 Yr. Gr. Rate 24.3%
Financial Strength
Quick Ratio 48
Current Ratio 0
LT Debt to Equity 85.6%
Total Debt to Equity 86.1%
Interest Coverage 0
Management Effectiveness
Return On Assets -0.2%
Ret/ On Assets - 3 Yr. Avg. -5%
Return On Total Capital -1.7%
Ret/ On T. Cap. - 3 Yr. Avg. -7.9%
Return On Equity -3%
Return On Equity - 3 Yr. Avg. -12.7%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 57.9%
Gross Margin - 3 Yr. Avg. 59.7%
EBITDA Margin 4%
EBITDA Margin - 3 Yr. Avg. -3.5%
Operating Margin 0.2%
Oper. Margin - 3 Yr. Avg. -6.9%
Pre-Tax Margin -2.6%
Pre-Tax Margin - 3 Yr. Avg. -9.3%
Net Profit Margin -1.6%
Net Profit Margin - 3 Yr. Avg. -9.1%
Effective Tax Rate 40.7%
Eff/ Tax Rate - 3 Yr. Avg. 24.1%
Payout Ratio -160.4%

TIME stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TIME stock intrinsic value calculation we used $3076 million for the last fiscal year's total revenue generated by Time Inc.. The default revenue input number comes from 2016 income statement of Time Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TIME stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.1%, whose default value for TIME is calculated based on our internal credit rating of Time Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Time Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TIME stock the variable cost ratio is equal to 126.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for TIME stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.2% for Time Inc..

Corporate tax rate of 27% is the nominal tax rate for Time Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TIME stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TIME are equal to 40%.

Life of production assets of 24 years is the average useful life of capital assets used in Time Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TIME is equal to -10.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1440 million for Time Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 99.225 million for Time Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Time Inc. at the current share price and the inputted number of shares is $1.8 billion.


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COMPANY NEWS

▶ Why Shares of Time Inc. Are Imploding Today   [Apr-28-17 11:45AM  Motley Fool]
▶ Time board: company not for sale; stock plunges   [10:38AM  Associated Press]
▶ Time Inc. opts to focus on strategy instead of pursuing a sale   [10:15AM  American City Business Journals]
▶ Could Verizon Be a Time Inc. Bidder?   [Apr-22-17 09:15AM  24/7 Wall St.]
▶ Is Meredith Buying Time Inc or Not?   [Apr-14-17 06:10AM  24/7 Wall St.]
▶ Expect Time Shares to Drop If No Sale Proceeds   [Apr-13-17 02:22PM  TheStreet.com]
▶ Time Inc.s PeopleStyle and StyleWatch Join Forces   [Mar-29-17 10:03AM  Business Wire]
▶ [$$] Group Including Jahm Najafi, Pamplona Capital Bidding for Time Inc.   [Mar-09-17 07:18PM  at The Wall Street Journal]
▶ Some bidders drop out of auction for Time Inc.   [11:50AM  at bizjournals.com]
▶ [$$] A Top Contender Drops Out of Race for Time Inc.   [12:54AM  at The Wall Street Journal]
▶ [$$] A Top Contender Drops Out of Race for Time Inc.   [Mar-08-17 10:02PM  at The Wall Street Journal]
▶ Time Inc. Could Be Close to a Sale   [Mar-07-17 05:28PM  at TheStreet]
▶ Time Inc. veteran joins Markstein   [Mar-01-17 04:15PM  at bizjournals.com]
▶ [$$] Time Inc looks to sell services to 30m subscribers   [Feb-20-17 09:16AM  at Financial Times]
▶ [$$] Time Revenue Continues to Slide as Print Ad Dollars Dry Up   [Feb-16-17 07:48PM  at The Wall Street Journal]
▶ [$$] Time Revenue Continues to Slide as Print Ad Dollars Dry Up   [10:35AM  at The Wall Street Journal]
Stock chart of TIME Financial statements of TIME
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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