What is minority interest and why is it included in TEV?
1. If you own more than 50% but less than 100% of another entity,you are required to consolidate its financials on to your companyfinancials. Minority interest represents the portion of equity thatyour company does not own – it is a liability
2. Therefore, in a TEV / Revenue calculation, if your denominatorrepresents a fully consolidated operating figure, it is necessary togross up your numerator (TEV) to keep the equation balanced or“apples to apples”
3. In a leveraged multiple such as P/E, this adjustment is not aconcern because the earnings calculation is net of minorityinterest (i.e. minority interest expense has already been takenout)