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Discounted Cash Flow (DCF) Analysis Levered


The Howard Hughes Corporation

The Howard Hughes Corporation (HHC)

Real Estate

Free Cash Flow

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 469.42634.56797.071,035.001,100.101,064.561,264.061,500.951,782.232,116.212,512.79
Revenue (%)
Operating Cash Flow 129.32-58.3223.91239.08165.56210.57167.11198.43235.61279.76332.19
Operating Cash Flow (%)
Capital Expenditure -270.06-773.85-577.24-21.63-302.09-625.22-716.72-851.04-1,010.52-1,199.89-1,424.75
Capital Expenditure (%)
Free Cash Flow -140.73-832.16-553.33217.45-136.52-414.65-549.61-652.61-774.91-920.13-1,092.56

Weighted Average Cost Of Capital

Share price $ 113.65
Diluted Shares Outstanding 43.03
Cost of Debt
Tax Rate 21.37
After-tax Cost of Debt -1.02
Risk-Free Rate
Market Risk Premium
Cost of Equity 12.63
Total Debt 3,088.00
Total Equity 4,890.38
Total Capital 7,978.38
Debt Weighting 38.70
Equity Weighting 61.30
Wacc

Build Up Free Cash Flow

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 469.42634.56797.071,035.001,100.101,064.561,264.061,500.951,782.232,116.212,512.79
Operating Cash Flow 129.32-58.3223.91239.08165.56210.57167.11198.43235.61279.76332.19
Capital Expenditure -270.06-773.85-577.24-21.63-302.09-625.22-716.72-851.04-1,010.52-1,199.89-1,424.75
Free Cash Flow -140.73-832.16-553.33217.45-136.52-414.65-549.61-652.61-774.91-920.13-1,092.56
WACC
PV LFCF -503.03-546.68-594.11-645.66-701.68
SUM PV LFCF -3,187.16

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.26
Free cash flow (t + 1) 964.17
Terminal Value 18,330.18
Present Value of Terminal Value 11,772.28

Intrinsic Value

Enterprise Value 14,570.05
Net Debt -343,636.23
Equity Value 358,206.28
Shares Outstanding 43.03
Equity Value Per Share 7,589.45