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Discounted Cash Flow (DCF) Analysis Unlevered


McDermott International Inc.

McDermott International Inc. (MDR)

Energy

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 2,658.932,300.773,070.152,636.032,985.046,705.018,632.0211,112.8714,306.7118,418.4523,711.92
Revenue (%)
EBITDA -376.5098.24202.32238.03411.94-2,045.03-157.97-203.37-261.81-337.06-433.93
EBITDA (%)
EBIT -461.065.0684.12134.96311.04-2,323.95-482.53-621.21-799.74-1,029.59-1,325.50
EBIT (%)
Depreciation 84.5593.18118.20103.07100.89278.93324.56417.84537.93692.53891.57
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 142.25852.90781.66612.35408.06844.831,688.422,173.682,798.393,602.654,638.05
Total Cash (%)
Account Receivables 962.53718.30866.09817.70408.951,168.682,270.222,922.683,762.664,844.056,236.23
Account Receivables (%)
Inventories -----101.25130.34167.80216.03278.12358.05
Inventories (%)
Accounts Payable 398.84219.49279.69173.19279.10594.73840.761,082.391,393.471,793.962,309.54
Accounts Payable (%)
Capital Expenditure -283.97-321.19-102.85-228.02-119.10-85.82-602.52-775.68-998.61-1,285.61-1,655.09
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 4.16
Diluted Shares Outstanding 150.00
Cost of Debt
Tax Rate -4.03
After-tax Cost of Debt 0.25
Risk-Free Rate
Market Risk Premium
Cost of Equity 24.50
Total Debt 3,459.00
Total Equity 624.00
Total Capital 4,083.00
Debt Weighting 84.72
Equity Weighting 15.28
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 2,658.932,300.773,070.152,636.032,985.046,705.018,632.0211,112.8714,306.7118,418.4523,711.92
EBITDA -376.5098.24202.32238.03411.94-2,045.03-157.97-203.37-261.81-337.06-433.93
EBIT -461.065.0684.12134.96311.04-2,323.95-482.53-621.21-799.74-1,029.59-1,325.50
Tax Rate -10.67%-35.90%152.92%55.26%27.82%-4.03%30.90%30.90%30.90%30.90%30.90%
EBIAT -510.246.88-44.5260.38224.50-2,417.52-333.41-429.24-552.60-711.42-915.88
Depreciation 84.5593.18118.20103.07100.89278.93324.56417.84537.93692.53891.57
Accounts Receivable -244.23-147.7948.39408.75-759.73-1,101.54-652.46-839.98-1,081.39-1,392.18
Inventories -------29.10-37.46-48.23-62.09-79.93
Accounts Payable --179.3560.20-106.50105.91315.63246.03241.63311.08400.48515.58
Capital Expenditure -37.21-218.34125.17-108.91-33.28516.69173.16222.93287.00369.48
UFCF -425.69202.16-232.25230.50731.14-2,615.97-376.77-286.52-368.86-474.87-611.35
WACC
PV UFCF -348.38-244.96-291.60-347.11-413.20
SUM PV UFCF -2,404.74

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.15
Free cash flow (t + 1) -635.81
Terminal Value -15,320.65
Present Value of Terminal Value -10,354.87

Intrinsic Value

Enterprise Value -12,759.62
Net Debt 2,614.17
Equity Value -15,373.78
Shares Outstanding 150.00
Equity Value Per Share -102.49

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
10.15 (%) -62.06 Sell -65.52 Sell -69.82 Sell -75.33 Sell -82.63 Sell -92.77 Sell -107.79 Sell -132.34 Sell -179.74 Sell
9.65 (%) -60.09 Sell -63.15 Sell -66.93 Sell -71.69 Sell -77.88 Sell -86.26 Sell -98.25 Sell -116.82 Sell -149.39 Sell
9.15 (%) -58.30 Sell -61.04 Sell -64.37 Sell -68.51 Sell -73.82 Sell -80.85 Sell -90.61 Sell -105.08 Sell -128.73 Sell
8.65 (%) -56.69 Sell -59.14 Sell -62.09 Sell -65.73 Sell -70.31 Sell -76.28 Sell -84.36 Sell -95.91 Sell -113.79 Sell
8.15 (%) -55.22 Sell -57.42 Sell -60.06 Sell -63.26 Sell -67.26 Sell -72.37 Sell -79.15 Sell -88.55 Sell -102.49 Sell
7.65 (%) -53.89 Sell -55.87 Sell -58.23 Sell -61.08 Sell -64.58 Sell -69.00 Sell -74.75 Sell -82.53 Sell -93.66 Sell
7.15 (%) -52.67 Sell -54.46 Sell -56.58 Sell -59.12 Sell -62.21 Sell -66.06 Sell -70.99 Sell -77.52 Sell -86.59 Sell
6.65 (%) -51.54 Sell -53.18 Sell -55.09 Sell -57.36 Sell -60.11 Sell -63.48 Sell -67.74 Sell -73.29 Sell -80.79 Sell
6.15 (%) -50.51 Sell -52.00 Sell -53.73 Sell -55.78 Sell -58.22 Sell -61.20 Sell -64.92 Sell -69.67 Sell -75.96 Sell