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Discounted Cash Flow (DCF) Analysis Unlevered


Discovery Communications Inc. Series A Common Stock

Discovery Communications Inc. Series A Common Stock (DISCA)

Consumer Cyclical

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 5,535.006,265.076,394.136,497.076,873.2510,553.1912,161.5014,014.9116,150.7818,612.1621,448.66
Revenue (%)
EBITDA 2,315.842,405.792,204.692,322.05644.023,061.483,828.444,411.895,084.275,859.116,752.04
EBITDA (%)
EBIT 2,039.652,076.871,874.761,999.80314.111,663.183,050.103,514.944,050.624,667.935,379.32
EBIT (%)
Depreciation 276.20328.92329.94322.25329.921,398.30778.34896.951,033.651,191.181,372.71
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 407.93367.13390.04300.167,309.02985.672,829.983,261.273,758.294,331.054,991.10
Total Cash (%)
Account Receivables 1,371.021,432.821,478.961,494.981,837.912,620.362,946.733,395.813,913.334,509.735,197.01
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 141.14224.92281.98241.04276.99325.04432.95498.93574.97662.59763.57
Accounts Payable (%)
Capital Expenditure -115.13-120.29-102.95-87.71-134.72-146.69-209.18-241.06-277.79-320.13-368.92
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 32.39
Diluted Shares Outstanding 498.00
Cost of Debt
Tax Rate 36.47
After-tax Cost of Debt -1.77
Risk-Free Rate
Market Risk Premium
Cost of Equity 11.74
Total Debt 14,974.00
Total Equity 16,130.22
Total Capital 31,104.22
Debt Weighting 48.14
Equity Weighting 51.86
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 5,535.006,265.076,394.136,497.076,873.2510,553.1912,161.5014,014.9116,150.7818,612.1621,448.66
EBITDA 2,315.842,405.792,204.692,322.05644.023,061.483,828.444,411.895,084.275,859.116,752.04
EBIT 2,039.652,076.871,874.761,999.80314.111,663.183,050.103,514.944,050.624,667.935,379.32
Tax Rate 38.00%34.88%33.07%27.50%-109.32%36.47%10.10%10.10%10.10%10.10%10.10%
EBIAT 1,264.491,352.521,254.691,449.76657.481,056.612,741.973,159.853,641.414,196.364,835.88
Depreciation 276.20328.92329.94322.25329.921,398.30778.34896.951,033.651,191.181,372.71
Accounts Receivable --61.80-46.14-16.01-342.93-782.45-326.37-449.08-517.52-596.39-687.28
Inventories -----------
Accounts Payable -83.7757.07-40.9435.9548.05107.9165.9876.0487.63100.98
Capital Expenditure -5.16-17.34-15.2347.0111.9762.4931.8836.7442.3448.79
UFCF 1,540.681,708.571,578.211,699.83727.421,732.483,364.333,705.584,270.314,921.105,671.08
WACC
PV UFCF 3,126.123,199.413,425.943,668.523,928.27
SUM PV UFCF 18,225.07

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.62
Free cash flow (t + 1) 5,897.92
Terminal Value 162,926.06
Present Value of Terminal Value 112,856.25

Intrinsic Value

Enterprise Value 131,081.32
Net Debt 13,988.33
Equity Value 117,092.99
Shares Outstanding 498.00
Equity Value Per Share 235.13