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Discounted Cash Flow (DCF) Analysis Unlevered


CenturyLink Inc.

CenturyLink Inc. (CTL)

Communication Services

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 18,095.0018,031.6717,900.0417,470.4417,655.6223,443.1324,866.1326,375.5127,976.5029,674.6731,475.93
Revenue (%)
EBITDA 6,063.636,848.436,816.336,254.425,957.015,734.198,437.088,949.219,492.4310,068.6210,679.78
EBITDA (%)
EBIT 1,521.792,419.852,627.732,337.542,021.57614.212,650.732,811.632,982.293,163.323,355.33
EBIT (%)
Depreciation 4,541.854,428.584,188.613,916.873,935.445,119.985,786.356,137.586,510.136,905.307,324.45
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 168.28128.02125.30223.62586.17518.09380.45403.55428.04454.02481.58
Total Cash (%)
Account Receivables 1,977.781,988.891,942.152,017.842,556.532,398.232,862.093,035.823,220.103,415.563,622.88
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 1,111.031,226.15968.391,179.251,555.461,934.061,745.601,851.561,963.952,083.162,209.61
Accounts Payable (%)
Capital Expenditure -2,967.58-2,984.24-2,840.74-2,950.76-1,576.65-3,017.13-3,627.97-3,848.19-4,081.77-4,329.54-4,592.34
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 11.53
Diluted Shares Outstanding 1,065.87
Cost of Debt
Tax Rate -10.88
After-tax Cost of Debt 0.59
Risk-Free Rate
Market Risk Premium
Cost of Equity 8.76
Total Debt 35,409.00
Total Equity 12,289.43
Total Capital 47,698.43
Debt Weighting 74.24
Equity Weighting 25.76
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 18,095.0018,031.6717,900.0417,470.4417,655.6223,443.1324,866.1326,375.5127,976.5029,674.6731,475.93
EBITDA 6,063.636,848.436,816.336,254.425,957.015,734.198,437.088,949.219,492.4310,068.6210,679.78
EBIT 1,521.792,419.852,627.732,337.542,021.57614.212,650.732,811.632,982.293,163.323,355.33
Tax Rate 206.70%30.45%33.28%38.63%-157.22%-10.88%23.49%23.49%23.49%23.49%23.49%
EBIAT -1,623.701,682.991,753.151,434.615,199.92681.012,027.992,151.092,281.662,420.162,567.06
Depreciation 4,541.854,428.584,188.613,916.873,935.445,119.985,786.356,137.586,510.136,905.307,324.45
Accounts Receivable --11.1146.74-75.68-538.70158.30-463.86-173.73-184.27-195.46-207.32
Inventories -----------
Accounts Payable -115.12-257.76210.86376.21378.60-188.46105.96112.39119.21126.45
Capital Expenditure -16.66-143.51110.02-1,374.111,440.48610.84220.22233.58247.76262.80
UFCF 2,918.156,232.245,587.235,596.687,598.767,778.387,772.868,441.128,953.509,496.9710,073.44
WACC
PV UFCF 7,307.387,460.397,439.357,418.377,397.45
SUM PV UFCF 53,775.53

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 6.37
Free cash flow (t + 1) 10,476.38
Terminal Value 442,041.19
Present Value of Terminal Value 324,613.77

Intrinsic Value

Enterprise Value 378,389.30
Net Debt 34,890.91
Equity Value 343,498.39
Shares Outstanding 1,065.87
Equity Value Per Share 322.27

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
8.37 (%) 105.24 Buy 118.16 Buy 135.12 Buy 158.41 Buy 192.35 Buy 246.43 Buy 346.15 Buy 591.46 Buy 2,162.72 Buy
7.87 (%) 98.36 Buy 109.55 Buy 124.01 Buy 143.38 Buy 170.72 Buy 212.18 Buy 282.53 Buy 428.12 Buy 908.42 Buy
7.37 (%) 92.26 Buy 102.04 Buy 114.47 Buy 130.80 Buy 153.21 Buy 185.88 Buy 237.94 Buy 333.93 Buy 570.05 Buy
6.87 (%) 86.83 Buy 95.42 Buy 106.20 Buy 120.12 Buy 138.77 Buy 165.09 Buy 205.00 Buy 272.73 Buy 412.90 Buy
6.37 (%) 81.97 Buy 89.57 Buy 98.98 Buy 110.95 Buy 126.67 Buy 148.25 Buy 179.71 Buy 229.84 Buy 322.27 Buy
5.87 (%) 77.59 Buy 84.34 Buy 92.62 Buy 103.00 Buy 116.40 Buy 134.37 Buy 159.71 Buy 198.15 Buy 263.39 Buy
5.37 (%) 73.64 Buy 79.67 Buy 86.99 Buy 96.06 Buy 107.58 Buy 122.73 Buy 143.52 Buy 173.82 Buy 222.11 Buy
4.87 (%) 70.05 Buy 75.46 Buy 81.97 Buy 89.94 Buy 99.94 Buy 112.85 Buy 130.16 Buy 154.58 Buy 191.62 Buy
4.37 (%) 66.79 Buy 71.66 Buy 77.47 Buy 84.53 Buy 93.26 Buy 104.37 Buy 118.97 Buy 139.00 Buy 168.20 Buy