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Discounted Cash Flow (DCF) Analysis Unlevered


Discovery Communications Inc.

Discovery Communications Inc. (DISCK)

Consumer Cyclical

Operating Data

Year
A/P
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 6,265.006,394.066,497.006,873.1810,553.0812,215.1914,139.0816,365.9918,943.6321,927.25
Revenue (%)
EBITDA 3,960.733,927.874,119.102,578.136,437.387,000.538,103.119,379.3510,856.6012,566.51
EBITDA (%)
EBIT 2,074.971,888.812,023.82338.161,751.812,816.823,260.473,774.004,368.405,056.42
EBIT (%)
Depreciation 1,885.772,039.072,095.282,239.974,685.574,183.704,842.645,605.356,488.197,510.08
Depreciation (%)

Balance Sheet Data

Year
A/P
2014
Projected
2015
Projected
2016
Projected
2017
Projected
2018
Projected
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash ----------
Total Cash (%)
Account Receivables 1,432.811,478.951,494.961,837.892,620.332,946.303,410.353,947.484,569.205,288.85
Account Receivables (%)
Inventories ----------
Inventories (%)
Accounts Payable 224.91281.98241.04276.99325.03459.29531.63615.36712.28824.46
Accounts Payable (%)
Capital Expenditure -120.29-102.94-87.71-134.71-146.69-201.55-233.29-270.04-312.57-361.80
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 26.25
Diluted Shares Outstanding 688.00
Cost of Debt
Tax Rate 39.92
After-tax Cost of Debt -1.95
Risk-Free Rate
Market Risk Premium
Cost of Equity 11.05
Total Debt 15,185.00
Total Equity 18,060.00
Total Capital 33,245.00
Debt Weighting 45.68
Equity Weighting 54.32
Wacc

Build Up Free Cash

Year
A/P
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Actual
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 6,265.006,394.066,497.006,873.1810,553.0812,215.1914,139.0816,365.9918,943.6321,927.25
EBITDA 3,960.733,927.874,119.102,578.136,437.387,000.538,103.119,379.3510,856.6012,566.51
EBIT 2,074.971,888.812,023.82338.161,751.812,816.823,260.473,774.004,368.405,056.42
Tax Rate 35.03%32.84%27.17%-128.47%39.92%1.30%1.30%1.30%1.30%1.30%
EBIAT 1,348.081,268.491,473.96772.591,052.462,780.223,218.113,724.964,311.644,990.72
Depreciation 1,885.772,039.072,095.282,239.974,685.574,183.704,842.645,605.356,488.197,510.08
Accounts Receivable --46.14-16.01-342.93-782.44-325.97-464.04-537.13-621.73-719.65
Inventories ----------
Accounts Payable -57.06-40.9435.9548.05134.2672.3483.7396.92112.18
Capital Expenditure --17.34-15.2347.0011.9754.8631.7436.7442.5349.23
UFCF 3,233.843,301.143,497.052,752.585,015.606,827.077,700.788,913.6510,317.5611,942.57
WACC
PV UFCF 6,827.077,172.197,731.978,335.438,985.99
SUM PV UFCF -

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.37
Free cash flow (t + 1) 12,420.27
Terminal Value 368,554.10
Present Value of Terminal Value 258,277.45

Intrinsic Value

Enterprise Value -
Net Debt 15,185.00
Equity Value -
Shares Outstanding 688.00
Equity Value Per Share -