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Discounted Cash Flow (DCF) Analysis Unlevered


Freeport-McMoRan Inc.

Freeport-McMoRan Inc. (FCX)

Basic Materials

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 20,921.0020,000.4814,606.3514,829.8216,403.2718,627.5518,417.0618,208.9518,003.1917,799.7517,598.61
Revenue (%)
EBITDA 7,470.893,590.09-9,952.77-516.085,219.526,292.39440.17435.19430.28425.41420.61
EBITDA (%)
EBIT 4,673.75-272.01-13,449.52-3,126.133,505.384,537.67-2,532.35-2,503.73-2,475.44-2,447.47-2,419.81
EBIT (%)
Depreciation 2,797.143,862.093,496.762,610.051,714.141,754.722,972.512,938.922,905.712,872.882,840.42
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 1,985.40464.01176.744,244.304,525.664,217.283,035.133,000.832,966.932,933.402,900.25
Total Cash (%)
Account Receivables 1,866.151,240.03797.511,125.581,322.10828.931,169.481,156.271,143.201,130.281,117.51
Account Receivables (%)
Inventories 7,403.947,540.185,737.375,274.975,557.436,072.586,595.156,520.626,446.946,374.096,302.06
Inventories (%)
Accounts Payable 3,707.203,652.093,232.382,393.532,496.582,624.623,162.213,126.483,091.153,056.223,021.68
Accounts Payable (%)
Capital Expenditure -5,046.15-2,328.06-2,991.383,425.69-1,161.35-1,847.85-959.53-948.69-937.97-927.37-916.89
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 9.1
Diluted Shares Outstanding 1,458.00
Cost of Debt
Tax Rate 27.58
After-tax Cost of Debt -1.33
Risk-Free Rate
Market Risk Premium
Cost of Equity 20.61
Total Debt 11,124.00
Total Equity 13,267.80
Total Capital 24,391.80
Debt Weighting 45.61
Equity Weighting 54.39
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 20,921.0020,000.4814,606.3514,829.8216,403.2718,627.5518,417.0618,208.9518,003.1917,799.7517,598.61
EBITDA 7,470.893,590.09-9,952.77-516.085,219.526,292.39440.17435.19430.28425.41420.61
EBIT 4,673.75-272.01-13,449.52-3,126.133,505.384,537.67-2,532.35-2,503.73-2,475.44-2,447.47-2,419.81
Tax Rate 35.50%-25.63%13.87%-9.56%32.66%27.58%12.40%12.40%12.40%12.40%12.40%
EBIAT 3,014.60-341.71-11,584.16-3,424.972,360.693,286.12-2,218.25-2,193.19-2,168.40-2,143.90-2,119.67
Depreciation 2,797.143,862.093,496.762,610.051,714.141,754.722,972.512,938.922,905.712,872.882,840.42
Accounts Receivable -626.12442.52-328.08-196.52493.18-340.5613.2213.0712.9212.77
Inventories --136.241,802.81462.40-282.46-515.15-522.5774.5373.6872.8572.03
Accounts Payable --55.11-419.70-838.85103.04128.04537.59-35.73-35.33-34.93-34.54
Capital Expenditure --2,718.09663.32-6,417.074,587.04686.50-888.32-10.84-10.72-10.60-10.48
UFCF 5,811.741,237.06-5,598.45-7,936.518,285.935,833.40-459.60786.90778.01769.22760.53
WACC
PV UFCF -407.23617.79541.21474.12415.35
SUM PV UFCF 5,476.69

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 12.86
Free cash flow (t + 1) 790.95
Terminal Value 8,927.18
Present Value of Terminal Value 4,875.45

Intrinsic Value

Enterprise Value 10,352.14
Net Debt 6,906.72
Equity Value 3,445.41
Shares Outstanding 1,458.00
Equity Value Per Share 2.36

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
14.86 (%) 1.03 Sell 1.20 Sell 1.39 Sell 1.62 Sell 1.89 Sell 2.21 Sell 2.61 Sell 3.10 Sell 3.74 Sell
14.36 (%) 0.92 Sell 1.08 Sell 1.25 Sell 1.46 Sell 1.70 Sell 1.99 Sell 2.34 Sell 2.77 Sell 3.32 Sell
13.86 (%) 0.82 Sell 0.96 Sell 1.13 Sell 1.31 Sell 1.53 Sell 1.79 Sell 2.10 Sell 2.48 Sell 2.96 Sell
13.36 (%) 0.73 Sell 0.86 Sell 1.01 Sell 1.18 Sell 1.38 Sell 1.61 Sell 1.89 Sell 2.22 Sell 2.64 Sell
12.86 (%) 0.64 Sell 0.76 Sell 0.90 Sell 1.05 Sell 1.23 Sell 1.45 Sell 1.69 Sell 2.00 Sell 2.36 Sell
12.36 (%) 0.56 Sell 0.67 Sell 0.80 Sell 0.94 Sell 1.10 Sell 1.30 Sell 1.52 Sell 1.79 Sell 2.12 Sell
11.86 (%) 0.48 Sell 0.59 Sell 0.70 Sell 0.84 Sell 0.99 Sell 1.16 Sell 1.36 Sell 1.60 Sell 1.89 Sell
11.36 (%) 0.41 Sell 0.51 Sell 0.62 Sell 0.74 Sell 0.88 Sell 1.04 Sell 1.22 Sell 1.44 Sell 1.70 Sell
10.86 (%) 0.35 Sell 0.44 Sell 0.54 Sell 0.65 Sell 0.78 Sell 0.92 Sell 1.09 Sell 1.29 Sell 1.52 Sell