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Discounted Cash Flow (DCF) Analysis Unlevered


Marathon Oil Corporation

Marathon Oil Corporation (MRO)

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 11,783.0011,257.484,953.293,787.294,765.546,582.646,318.686,065.305,822.085,588.625,364.51
Revenue (%)
EBITDA 5,992.836,537.2264.891,271.01-2,704.924,093.751,571.461,508.441,447.951,389.891,334.15
EBITDA (%)
EBIT 3,492.483,676.69-2,655.95-885.09-5,076.731,652.90-1,012.25-971.66-932.70-895.30-859.39
EBIT (%)
Depreciation 2,500.352,860.532,720.842,156.102,371.812,440.842,583.712,480.102,380.652,285.192,193.55
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 263.942,397.841,220.992,487.871,311.001,462.001,723.101,654.011,587.681,524.021,462.90
Total Cash (%)
Account Receivables 2,133.901,729.15911.90747.991,081.781,078.901,165.801,119.051,074.171,031.10989.75
Account Receivables (%)
Inventories 364.09356.86313.05135.96125.8196.11213.57205.01196.79188.90181.32
Inventories (%)
Accounts Payable 2,446.152,735.571,445.871,096.041,503.051,473.851,654.861,588.501,524.801,463.661,404.97
Accounts Payable (%)
Capital Expenditure -4,443.37-5,160.43-3,485.14-1,203.98-1,973.89-2,752.86-2,832.03-2,718.47-2,609.46-2,504.82-2,404.37
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 12.43
Diluted Shares Outstanding 846.00
Cost of Debt
Tax Rate 23.20
After-tax Cost of Debt -1.11
Risk-Free Rate
Market Risk Premium
Cost of Equity 20.57
Total Debt 5,499.00
Total Equity 10,515.78
Total Capital 16,014.78
Debt Weighting 34.34
Equity Weighting 65.66
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 11,783.0011,257.484,953.293,787.294,765.546,582.646,318.686,065.305,822.085,588.625,364.51
EBITDA 5,992.836,537.2264.891,271.01-2,704.924,093.751,571.461,508.441,447.951,389.891,334.15
EBIT 3,492.483,676.69-2,655.95-885.09-5,076.731,652.90-1,012.25-971.66-932.70-895.30-859.39
Tax Rate 45.47%11.40%25.08%-75.84%-7.03%23.20%3.71%3.71%3.71%3.71%3.71%
EBIAT 1,904.303,257.48-1,989.71-1,556.36-5,433.731,269.50-974.66-935.58-898.06-862.05-827.48
Depreciation 2,500.352,860.532,720.842,156.102,371.812,440.842,583.712,480.102,380.652,285.192,193.55
Accounts Receivable -404.75817.25163.91-333.792.88-86.9046.7544.8743.0741.35
Inventories -7.2343.81177.0810.1529.70-117.468.568.227.897.57
Accounts Payable -289.42-1,289.70-349.82407.01-29.20181.01-66.36-63.70-61.14-58.69
Capital Expenditure -717.06-1,675.29-2,281.16769.91778.9779.17-113.56-109.01-104.64-100.44
UFCF 4,404.657,536.46-1,372.80-1,690.24-2,208.634,492.711,664.861,419.911,362.971,308.321,255.86
WACC
PV UFCF 1,449.971,077.03900.40752.74629.29
SUM PV UFCF 10,626.13

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 14.82
Free cash flow (t + 1) 1,306.09
Terminal Value 12,071.07
Present Value of Terminal Value 6,048.65

Intrinsic Value

Enterprise Value 16,674.78
Net Debt 4,037.00
Equity Value 12,637.78
Shares Outstanding 846.00
Equity Value Per Share 14.94