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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 469.42634.56797.071,035.001,100.101,064.561,264.061,500.951,782.232,116.212,512.79
Revenue (%)
EBITDA -20.61134.02309.42482.31319.47281.04332.07394.30468.19555.93660.11
EBITDA (%)
EBIT -54.4578.05210.43386.47187.24154.47202.25240.15285.16338.59402.05
EBIT (%)
Depreciation 33.8555.9799.0095.84132.23126.58129.82154.15183.03217.34258.06
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 --445.32665.50968.30346,724.23103,582.97122,994.42146,043.57173,412.14205,909.57
Total Cash (%)
Account Receivables 147.26132.56149.93160.22197.80234.84266.72316.70376.05446.52530.20
Account Receivables (%)
Inventories -----------
Inventories (%)
Accounts Payable 284.00466.02515.39572.04521.67779.26788.90936.741,112.291,320.731,568.23
Accounts Payable (%)
Capital Expenditure -270.06-773.85-577.24-21.63-302.09-625.22-716.72-851.04-1,010.52-1,199.89-1,424.75
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 113.65
Diluted Shares Outstanding 43.03
Cost of Debt
Tax Rate 21.37
After-tax Cost of Debt -1.02
Risk-Free Rate
Market Risk Premium
Cost of Equity 12.63
Total Debt 3,088.00
Total Equity 4,890.38
Total Capital 7,978.38
Debt Weighting 38.70
Equity Weighting 61.30
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 469.42634.56797.071,035.001,100.101,064.561,264.061,500.951,782.232,116.212,512.79
EBITDA -20.61134.02309.42482.31319.47281.04332.07394.30468.19555.93660.11
EBIT -54.4578.05210.43386.47187.24154.47202.25240.15285.16338.59402.05
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 -62.57-46.58176.92243.75257.18121.46141.02167.45198.83236.09280.33
Depreciation 33.8555.9799.0095.84132.23126.58129.82154.15183.03217.34258.06
Accounts Receivable -14.70-17.37-10.29-37.58-37.05-31.87-49.98-59.35-70.47-83.68
Inventories -----------
Accounts Payable -182.0249.3756.66-50.38257.599.64147.84175.55208.44247.50
Capital Expenditure -503.79-196.61-555.61280.46323.1391.51134.31159.48189.37224.86
UFCF -28.72709.90111.30-169.65581.91791.72340.11553.77657.54780.77927.08
WACC
PV UFCF 311.29463.88504.13547.87595.41
SUM PV UFCF 2,797.77

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 9.26
Free cash flow (t + 1) 964.17
Terminal Value 18,330.18
Present Value of Terminal Value 11,772.28

Intrinsic Value

Enterprise Value 14,570.05
Net Debt -343,636.23
Equity Value 358,206.28
Shares Outstanding 43.03
Equity Value Per Share 8,324.53