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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:
"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."
Viper Energy's Owner Earnings per Share (TTM) ended in Mar. 2024 was $0.47. It's Price-to-Owner-Earnings ratio for today is 77.06.
The historical rank and industry rank for Viper Energy's Owner Earnings per Share (TTM) or its related term are showing as below:
During the past 11 years, the highest Price-to-Owner-Earnings ratio of Viper Energy was 221.03. The lowest was 15.06. And the median was 77.08.
Viper Energy's Earnings per Share (Diluted) for the three months ended in Mar. 2024 was $0.49. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Mar. 2024 was $2.72. It's PE Ratio ratio for today is 13.32.
Viper Energy's EPS without NRI for the three months ended in Mar. 2024 was $0.57. Its EPS without NRI for the trailing twelve months (TTM) ended in Mar. 2024 was $2.81. It's PE Ratio without NRI ratio for today is 12.91.
The historical data trend for Viper Energy's Owner Earnings per Share (TTM) can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Viper Energy Annual Data | |||||||||||||||||||||
Trend | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | Dec23 | |||||||||||
Owner Earnings per Share (TTM) | Get a 7-Day Free Trial | -3.90 | -2.69 | -1.67 | 0.38 | 0.17 |
Viper Energy Quarterly Data | ||||||||||||||||||||
Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | Jun23 | Sep23 | Dec23 | Mar24 | |
Owner Earnings per Share (TTM) | Get a 7-Day Free Trial | 0.78 | 1.69 | 1.82 | 0.17 | 0.47 |
For the Oil & Gas Midstream subindustry, Viper Energy's Price-to-Owner-Earnings, along with its competitors' market caps and Price-to-Owner-Earnings data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Oil & Gas industry and Energy sector, Viper Energy's Price-to-Owner-Earnings distribution charts can be found below:
* The bar in red indicates where Viper Energy's Price-to-Owner-Earnings falls into.
In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:
"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."
To make it simple, then you will have:
Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)
Viper Energy's Owner Earnings per Share (TTM) Calculation:
TTM / Last Quarter | Average of Last 20 Quarters | |
Net Income | 209.5 | |
Depreciation, Depletion and Amortization | 162.1 | |
Change In Deferred Tax | -8.1 | |
5Y Average of Maintenance Capital Expenditure | 293.4 | |
Change In Working Capital | -28.7 | |
Shares Outstanding (Diluted Average) | 87.6 |
1. Start with "Net Income" from income statement. Viper Energy's Net Income for the trailing twelve months (TTM) ended in Mar. 2024 was $209.5 Mil.
2. "Depreciation, Depletion and Amortization" is from cashflow statement. Viper Energy's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Mar. 2024 was $162.1 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.
3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income.
Viper Energy's Change In Deferred Tax for the trailing twelve months (TTM) ended in Mar. 2024 was $-8.1 Mil.
4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $293.4 Mil
It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.
The following shows how to get maintenance capital expenditure.
First, calculate the revenue change regarding to the previous quarter. If the revenue decreased from the previous quarter, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous quarter, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.
Viper Energy's 5-Year Average Maintenance Capital Expenditure = $293.4 Mil
5. "Change In Working Capital" is from cashflow statement. Viper Energy's Change In Working Capital for the trailing twelve months (TTM) ended in Mar. 2024 was $-28.7 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.
6. Viper Energy's Shares Outstanding (Diluted Average) for the months ended in Mar. 2024 was 87.629 Mil.
Viper Energy's Onwer Earnings Per Share for Mar. 2024 is calculated as:
Owner Earnings per Share (TTM) | |||||
= | ( Net Income | + | Depreciation, Depletion and Amortization | + | Change In Deferred Tax |
= | ( 209.481 | + | 162.064 | + | -8.07 |
- | 5Y Avg of Maintenance CAPEX | + | Change In Working Capital ) | / | Shares Outstanding (Diluted Average) |
- | 293.41218389023 | + | -28.717) | / | 87.629 |
= | 0.47 |
Price-to-Owner-Earnings | = | Current Price | / | Owner Earnings per Share (TTM) |
= | 36.22 | / | 0.47 | |
= | 77.06 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.
Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.
Thank you for viewing the detailed overview of Viper Energy's Owner Earnings per Share (TTM) provided by GuruFocus.com. Please click on the following links to see related term pages.
Bx Swt Ml Holdco Llc | 10 percent owner | 345 PARK AVENUE, NEW YORK NY 10154 |
Blackstone Holdings Iii L.p. | 10 percent owner | C/O BLACKSTONE INC., 345 PARK AVENUE, NEW YORK NY 10154 |
Laurie H Argo | director | 1100 LOUISIANA STREET, SUITE 1000, HOUSTON TX 77002 |
Frank C. Hu | director | 625 LIBERTY AVE., SUITE 1700, PITTSBURGH PA 15222 |
Armour Spencer D Iii | director | 400 W. ILLINOIS, SUITE 800, MIDLAND TX 79701 |
Bx Guidon Topco Llc | 10 percent owner | C/O BLACKSTONE MANAGEMENT PARTNERS L.L.C, 345 PARK AVENUE, 43RD FLOOR, NEW YORK NY 10154 |
Matt Zmigrosky | officer: Exec. VP and General Counsel | 500 WEST TEXAS AVENUE, SUITE 1200, MIDLAND TX 79701 |
Bx Swallowtail Royalties Holding Llc | 10 percent owner | C/O THE BLACKSTONE GROUP INC., NEW YORK NY 10154 |
Swallowtail Royalties Ii Llc | 10 percent owner | 7750 N. MACARTHUR BLVD., STE. 120-370, IRVING TX 75063 |
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Swallowtail Royalties Holdings Llc | 10 percent owner | 545 E. JOHN CARPENTER FWY., STE. 1300, IRVING TX 75062 |
Guidon Energy Holdings Lp | 10 percent owner | C/O BLACKSTONE MANAGEMENT PARTNERS L.L.C, 345 PARK AVENUE, 43RD FLOOR, NEW YORK NY 10154 |
Guidon Energy Holdings Gp Llc | 10 percent owner | C/O BLACKSTONE MANAGEMENT PARTNERS L.L.C, 345 PARK AVENUE, 43RD FLOOR, NEW YORK NY 10154 |
Blackstone Energy Management Associates Ii L.l.c. | 10 percent owner | C/O THE BLACKSTONE GROUP L.P., 345 PARK AVE., NEW YORK NY 10154 |
Blackstone Ema Ii L.l.c. | 10 percent owner | C/O THE BLACKSTONE GROUP L.P., 345 PARK AVE., NEW YORK NY 10154 |
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