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Discounted Cash Flow (DCF) Analysis Unlevered


Chesapeake Energy Corporation

Chesapeake Energy Corporation (CHK)

Energy

Operating Data

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 19,080.0023,124.9612,764.987,872.169,496.1910,231.199,544.688,904.238,306.767,749.387,229.39
Revenue (%)
EBITDA 4,401.766,065.68-16,483.42-3,177.202,372.152,495.39-1,792.49-1,672.21-1,560.01-1,455.33-1,357.68
EBITDA (%)
EBIT 1,499.693,149.62-18,712.18-4,284.031,376.951,350.52-3,048.57-2,844.01-2,653.18-2,475.15-2,309.07
EBIT (%)
Depreciation 2,902.072,916.062,228.771,106.83995.201,144.871,256.081,171.801,093.171,019.82951.39
Depreciation (%)

Balance Sheet Data

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
Total Cash 912.024,146.31824.62881.684.754.09681.49635.76593.10553.31516.18
Total Cash (%)
Account Receivables 2,222.822,236.181,128.421,057.231,321.871,247.181,108.141,033.78964.41899.70839.33
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 1,595.092,048.87944.61672.28654.29763.25747.35697.20650.42606.78566.06
Accounts Payable (%)
Capital Expenditure -3,218.80198.87-3,492.50-583.33-1,187.97110.50-865.70-807.61-753.42-702.87-655.71
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 1.38
Diluted Shares Outstanding 909.00
Cost of Debt
Tax Rate -1.16
After-tax Cost of Debt 0.11
Risk-Free Rate
Market Risk Premium
Cost of Equity 22.03
Total Debt 7,341.00
Total Equity 1,254.42
Total Capital 8,595.42
Debt Weighting 85.41
Equity Weighting 14.59
Wacc

Build Up Free Cash

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 19,080.0023,124.9612,764.987,872.169,496.1910,231.199,544.688,904.238,306.767,749.387,229.39
EBITDA 4,401.766,065.68-16,483.42-3,177.202,372.152,495.39-1,792.49-1,672.21-1,560.01-1,455.33-1,357.68
EBIT 1,499.693,149.62-18,712.18-4,284.031,376.951,350.52-3,048.57-2,844.01-2,653.18-2,475.15-2,309.07
Tax Rate 43.08%37.37%23.45%4.15%0.21%-1.16%17.85%17.85%17.85%17.85%17.85%
EBIAT 853.601,972.50-14,323.72-4,106.311,374.051,366.17-2,504.36-2,336.32-2,179.55-2,033.30-1,896.87
Depreciation 2,902.072,916.062,228.771,106.83995.201,144.871,256.081,171.801,093.171,019.82951.39
Accounts Receivable --13.361,107.7671.19-264.6474.69139.0574.3669.3764.7160.37
Inventories -----------
Accounts Payable -453.78-1,104.26-272.33-18.00108.96-15.90-50.15-46.78-43.64-40.71
Capital Expenditure --3,417.673,691.37-2,909.17604.65-1,298.47976.20-58.09-54.19-50.55-47.16
UFCF 3,755.661,911.31-8,400.08-6,109.792,691.261,396.21-148.94-1,198.40-1,117.99-1,042.97-972.99
WACC
PV UFCF -138.49-1,036.25-898.93-779.82-676.48
SUM PV UFCF -5,685.75

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.54
Free cash flow (t + 1) -1,011.91
Terminal Value -28,584.99
Present Value of Terminal Value -19,874.12

Intrinsic Value

Enterprise Value -25,559.86
Net Debt 7,336.91
Equity Value -32,896.77
Shares Outstanding 909.00
Equity Value Per Share -36.19

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
9.54 (%) -22.55 Sell -23.61 Sell -24.95 Sell -26.70 Sell -29.08 Sell -32.51 Sell -37.88 Sell -47.47 Sell -69.53 Sell
9.04 (%) -21.96 Sell -22.89 Sell -24.06 Sell -25.55 Sell -27.54 Sell -30.33 Sell -34.48 Sell -41.38 Sell -55.03 Sell
8.54 (%) -21.43 Sell -22.26 Sell -23.27 Sell -24.57 Sell -26.25 Sell -28.54 Sell -31.85 Sell -37.02 Sell -46.25 Sell
8.04 (%) -20.95 Sell -21.69 Sell -22.58 Sell -23.71 Sell -25.15 Sell -27.06 Sell -29.74 Sell -33.75 Sell -40.39 Sell
7.54 (%) -20.52 Sell -21.18 Sell -21.97 Sell -22.95 Sell -24.20 Sell -25.82 Sell -28.03 Sell -31.21 Sell -36.19 Sell
7.04 (%) -20.12 Sell -20.72 Sell -21.42 Sell -22.29 Sell -23.37 Sell -24.76 Sell -26.61 Sell -29.19 Sell -33.04 Sell
6.54 (%) -19.77 Sell -20.30 Sell -20.93 Sell -21.70 Sell -22.65 Sell -23.84 Sell -25.41 Sell -27.54 Sell -30.60 Sell
6.04 (%) -19.44 Sell -19.92 Sell -20.49 Sell -21.17 Sell -22.01 Sell -23.05 Sell -24.39 Sell -26.17 Sell -28.66 Sell
5.54 (%) -19.14 Sell -19.58 Sell -20.09 Sell -20.70 Sell -21.44 Sell -22.35 Sell -23.51 Sell -25.02 Sell -27.07 Sell