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Discounted Cash Flow (DCF) Analysis Unlevered


QEP Resources Inc.

QEP Resources Inc. (QEP)

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 2,685.103,293.282,018.781,377.211,623.041,932.721,890.591,849.371,809.051,769.621,731.04
Revenue (%)
EBITDA 1,400.551,761.57793.78-962.53847.88-312.91222.90218.04213.29208.64204.09
EBITDA (%)
EBIT 384.51720.90-87.41-1,833.6293.32-1,170.07-644.31-630.27-616.53-603.09-589.94
EBIT (%)
Depreciation 1,016.041,040.67881.20871.09754.55857.16867.21848.31829.81811.72794.03
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 11.811,160.22376.10443.74--542.41530.58519.02507.70496.64
Total Cash (%)
Account Receivables 330.27441.96278.19155.76140.07104.37198.70194.37190.13185.99181.93
Account Receivables (%)
Inventories 13.4313.8313.3210.47--11.5311.2811.0410.7910.56
Inventories (%)
Accounts Payable 361.95575.34351.67269.66360.15258.02340.31332.89325.63318.53311.59
Accounts Payable (%)
Capital Expenditure -1,602.47-2,726.50-1,239.33-1,208.09-1,974.76-1,299.75-1,591.12-1,556.43-1,522.50-1,489.31-1,456.84
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 3.76
Diluted Shares Outstanding 237.90
Cost of Debt
Tax Rate 23.88
After-tax Cost of Debt -1.14
Risk-Free Rate
Market Risk Premium
Cost of Equity 19.65
Total Debt 2,507.10
Total Equity 894.50
Total Capital 3,401.60
Debt Weighting 73.70
Equity Weighting 26.30
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 2,685.103,293.282,018.781,377.211,623.041,932.721,890.591,849.371,809.051,769.621,731.04
EBITDA 1,400.551,761.57793.78-962.53847.88-312.91222.90218.04213.29208.64204.09
EBIT 384.51720.90-87.41-1,833.6293.32-1,170.07-644.31-630.27-616.53-603.09-589.94
Tax Rate 27.38%-42.13%38.52%36.26%727.74%23.88%135.28%135.28%135.28%135.28%135.28%
EBIAT 279.231,024.59-53.74-1,168.78-585.84-890.62227.28222.33217.48212.74208.10
Depreciation 1,016.041,040.67881.20871.09754.55857.16867.21848.31829.81811.72794.03
Accounts Receivable --111.69163.77122.4315.6935.70-94.334.334.244.144.05
Inventories --0.410.512.8610.47--0.250.250.240.24
Accounts Payable -213.38-223.66-82.0190.50-102.1482.29-7.42-7.26-7.10-6.94
Capital Expenditure -1,124.03-1,487.17-31.24766.67-675.00291.36-34.69-33.93-33.19-32.47
UFCF 1,295.273,290.59-719.11-285.661,052.04-774.901,373.811,033.111,010.59988.56967.01
WACC
PV UFCF 1,272.40886.22802.91727.43659.04
SUM PV UFCF 6,213.26

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.97
Free cash flow (t + 1) 1,005.69
Terminal Value 25,332.23
Present Value of Terminal Value 17,264.65

Intrinsic Value

Enterprise Value 23,477.91
Net Debt 2,507.10
Equity Value 20,970.81
Shares Outstanding 237.90
Equity Value Per Share 88.15

Results Unlevered DCF

Wacc / Long-term Growth -4 (%)-3 (%)-2 (%)-1 (%)0 (%)1 (%)2 (%)3 (%)4 (%)
9.97 (%) 44.87 Buy 48.47 Buy 52.98 Buy 58.78 Buy 66.53 Buy 77.39 Buy 93.73 Buy 121.07 Buy 176.16 Buy
9.47 (%) 42.82 Buy 46.01 Buy 49.95 Buy 54.95 Buy 61.50 Buy 70.44 Buy 83.37 Buy 103.77 Buy 140.67 Buy
8.97 (%) 40.98 Buy 43.81 Buy 47.29 Buy 51.63 Buy 57.22 Buy 64.68 Buy 75.14 Buy 90.87 Buy 117.20 Buy
8.47 (%) 39.31 Buy 41.85 Buy 44.92 Buy 48.72 Buy 53.53 Buy 59.84 Buy 68.45 Buy 80.91 Buy 100.56 Buy
7.97 (%) 37.80 Buy 40.07 Buy 42.81 Buy 46.15 Buy 50.34 Buy 55.72 Buy 62.91 Buy 72.99 Buy 88.15 Buy
7.47 (%) 36.42 Buy 38.47 Buy 40.92 Buy 43.88 Buy 47.54 Buy 52.18 Buy 58.25 Buy 66.55 Buy 78.56 Buy
6.97 (%) 35.16 Buy 37.02 Buy 39.21 Buy 41.85 Buy 45.07 Buy 49.10 Buy 54.29 Buy 61.22 Buy 70.94 Buy
6.47 (%) 34.01 Buy 35.69 Buy 37.67 Buy 40.03 Buy 42.88 Buy 46.41 Buy 50.88 Buy 56.74 Buy 64.74 Buy
5.97 (%) 32.95 Buy 34.48 Buy 36.27 Buy 38.39 Buy 40.93 Buy 44.04 Buy 47.92 Buy 52.93 Buy 59.61 Buy