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Discounted Cash Flow (DCF) Analysis Unlevered


The Howard Hughes Corporation

The Howard Hughes Corporation (HHC)

Real Estate

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 474.61634.55797.061,034.991,100.091,064.551,260.861,493.361,768.742,094.892,481.19
Revenue (%)
EBITDA 148.22227.74223.97427.76355.00244.42402.97477.28565.29669.53792.99
EBITDA (%)
EBIT 111.20166.76118.76326.75218.48106.88264.91313.75371.61440.14521.30
EBIT (%)
Depreciation 37.0260.98105.21101.01136.52137.54138.06163.52193.68229.39271.69
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 894.92560.44445.32665.50861.04499.701,097.451,299.821,539.511,823.392,159.63
Total Cash (%)
Account Receivables 20.5528.621.670.105.834.6821.0624.9429.5434.9841.44
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 284.01466.02515.38572.04521.77779.25785.51930.361,101.921,305.121,545.78
Accounts Payable (%)
Capital Expenditure 31.758.5015.469.636.934.4725.0929.7235.2041.6949.38
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 123.88
Diluted Shares Outstanding -
Cost of Debt
Tax Rate 21.37
After-tax Cost of Debt -1.02
Risk-Free Rate
Market Risk Premium
Cost of Equity 12.57
Total Debt 3,181.21
Total Equity -
Total Capital 3,181.21
Debt Weighting 100.00
Equity Weighting 0.00
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 474.61634.55797.061,034.991,100.091,064.551,260.861,493.361,768.742,094.892,481.19
EBITDA 148.22227.74223.97427.76355.00244.42402.97477.28565.29669.53792.99
EBIT 111.20166.76118.76326.75218.48106.88264.91313.75371.61440.14521.30
Tax Rate -14.90%159.68%15.92%36.93%-37.36%21.37%30.27%30.27%30.27%30.27%30.27%
EBIAT 127.77-99.5299.85206.08300.0984.04184.71218.77259.11306.89363.48
Depreciation 37.0260.98105.21101.01136.52137.54138.06163.52193.68229.39271.69
Accounts Receivable --8.0726.941.57-5.731.15-16.37-3.88-4.60-5.45-6.45
Inventories -----------
Accounts Payable -182.0149.3656.66-50.27257.486.26144.85171.56203.19240.66
Capital Expenditure -23.25-6.965.842.692.46-20.62-4.63-5.48-6.49-7.69
UFCF 164.79158.65274.41371.16383.32482.67292.04518.63614.27727.54861.70
WACC
PV UFCF 292.04499.02568.69648.09738.57
SUM PV UFCF 3,664.04

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 3.93
Free cash flow (t + 1) 896.17
Terminal Value -1,280,237.08
Present Value of Terminal Value -1,055,809.98

Intrinsic Value

Enterprise Value -1,052,145.94
Net Debt 2,681.51
Equity Value -1,054,827.45
Shares Outstanding -
Equity Value Per Share -Infinity