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Discounted Cash Flow (DCF) Analysis Unlevered


Southwestern Energy Company

Southwestern Energy Company (SWN)

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 3,371.004,038.123,133.182,436.053,203.163,862.054,072.144,293.674,527.244,773.525,033.20
Revenue (%)
EBITDA 2,080.922,504.85-5,208.91-1,996.101,705.041,337.04-248.40-261.91-276.16-291.18-307.03
EBITDA (%)
EBIT 1,293.791,562.75-6,300.82-2,432.151,201.18777.04-1,128.39-1,189.77-1,254.50-1,322.74-1,394.70
EBIT (%)
Depreciation 787.13942.091,091.91436.05503.86560.00879.99927.86978.341,031.561,087.68
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 94.05390.0817.861,474.051,046.15330.98779.00821.38866.06913.17962.85
Total Cash (%)
Account Receivables 463.85529.80327.10362.97427.94580.85547.30577.07608.46641.56676.46
Account Receivables (%)
Inventories 38.0937.15----41.5443.8046.1848.6951.34
Inventories (%)
Accounts Payable 507.00652.96512.90473.08533.01609.04674.75711.46750.16790.97834.00
Accounts Payable (%)
Capital Expenditure -2,138.90-2,000.08-1,069.04-162.97-1,257.88352.99-1,248.11-1,316.01-1,387.60-1,463.08-1,542.68
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 1.97
Diluted Shares Outstanding 574.63
Cost of Debt
Tax Rate 0.19
After-tax Cost of Debt 0.04
Risk-Free Rate
Market Risk Premium
Cost of Equity 12.97
Total Debt 2,318.00
Total Equity 1,132.02
Total Capital 3,450.02
Debt Weighting 67.19
Equity Weighting 32.81
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 3,371.004,038.123,133.182,436.053,203.163,862.054,072.144,293.674,527.244,773.525,033.20
EBITDA 2,080.922,504.85-5,208.91-1,996.101,705.041,337.04-248.40-261.91-276.16-291.18-307.03
EBIT 1,293.791,562.75-6,300.82-2,432.151,201.18777.04-1,128.39-1,189.77-1,254.50-1,322.74-1,394.70
Tax Rate 40.84%36.23%30.56%1.09%-9.76%0.19%16.52%16.52%16.52%16.52%16.52%
EBIAT 765.40996.54-4,375.33-2,405.751,318.40775.60-941.93-993.18-1,047.20-1,104.17-1,164.24
Depreciation 787.13942.091,091.91436.05503.86560.00879.99927.86978.341,031.561,087.68
Accounts Receivable --65.95202.70-35.87-64.97-152.9133.56-29.77-31.39-33.10-34.90
Inventories -0.9437.15-----2.26-2.38-2.51-2.65
Accounts Payable -145.97-140.06-39.8259.9376.0465.7136.7138.7040.8143.03
Capital Expenditure --138.82-931.04-906.071,094.91-1,610.871,601.1067.9071.5975.4979.59
UFCF 1,552.531,880.77-4,114.67-2,951.462,912.12-352.151,638.427.267.658.078.51
WACC
PV UFCF 1,522.566.276.146.025.89
SUM PV UFCF 351.39

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 7.61
Free cash flow (t + 1) 8.85
Terminal Value 245.06
Present Value of Terminal Value 169.83

Intrinsic Value

Enterprise Value 521.22
Net Debt 1,987.02
Equity Value -1,465.81
Shares Outstanding 574.63
Equity Value Per Share -2.55