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Discounted Cash Flow (DCF) Analysis Unlevered


Time Warner Inc.

Time Warner Inc. (TWX)

Consumer Cyclical

Operating Data

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Projected
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 29,795.0027,357.7728,115.5829,316.1131,268.5731,700.0732,137.5332,581.0333,030.6533,486.4733,948.59
Revenue (%)
EBITDA 14,733.6314,806.0215,539.4815,575.6517,016.3516,889.8017,122.8817,359.1717,598.7317,841.5918,087.81
EBITDA (%)
EBIT 6,584.706,032.396,829.276,581.477,160.507,214.947,314.507,415.447,517.787,621.527,726.70
EBIT (%)
Depreciation 8,148.938,773.648,710.218,994.189,855.859,674.869,808.389,943.7310,080.9510,220.0710,361.11
Depreciation (%)

Balance Sheet Data

Year
A/P
2013
Projected
2014
Projected
2015
Projected
2016
Projected
2017
Projected
2018
Projected
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Total Cash -----------
Total Cash (%)
Account Receivables 7,868.867,720.367,411.278,698.099,402.468,920.409,043.509,168.309,294.839,423.099,553.13
Account Receivables (%)
Inventories 2,029.041,698.921,751.602,060.922,401.432,152.442,182.142,212.252,242.782,273.732,305.11
Inventories (%)
Accounts Payable 694.22574.51652.28527.69775.46700.57710.24720.04729.98740.05750.26
Accounts Payable (%)
Capital Expenditure -601.86-473.29-421.73-430.95-656.64-561.09-568.83-576.68-584.64-592.71-600.89
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price $ 98.91
Diluted Shares Outstanding 791.00
Cost of Debt
Tax Rate 11.74
After-tax Cost of Debt -0.54
Risk-Free Rate
Market Risk Premium
Cost of Equity 9.53
Total Debt 18,294.00
Total Equity 78,237.81
Total Capital 96,531.81
Debt Weighting 18.95
Equity Weighting 81.05
Wacc

Build Up Free Cash

Year
A/P
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Actual
2018
Projected
2019
Projected
2020
Projected
2021
Projected
2022
Projected
2023
Projected
Revenue 29,795.0027,357.7728,115.5829,316.1131,268.5731,700.0732,137.5332,581.0333,030.6533,486.4733,948.59
EBITDA 14,733.6314,806.0215,539.4815,575.6517,016.3516,889.8017,122.8817,359.1717,598.7317,841.5918,087.81
EBIT 6,584.706,032.396,829.276,581.477,160.507,214.947,314.507,415.447,517.787,621.527,726.70
Tax Rate 30.40%18.21%29.62%24.43%11.74%22.88%22.88%22.88%22.88%22.88%22.88%
EBIAT 4,583.094,933.954,806.584,973.796,319.795,564.265,641.045,718.895,797.815,877.825,958.93
Depreciation 8,148.938,773.648,710.218,994.189,855.859,674.869,808.389,943.7310,080.9510,220.0710,361.11
Accounts Receivable -148.50309.10-1,286.82-704.37482.06-123.10-124.80-126.52-128.27-130.04
Inventories -330.12-52.68-309.32-340.50248.99-29.70-30.11-30.53-30.95-31.38
Accounts Payable --119.7177.77-124.59247.77-74.899.679.809.9410.0710.21
Capital Expenditure --128.57-51.569.21225.69-95.557.747.857.968.078.18
UFCF 12,732.0213,937.9313,799.4112,256.4515,604.2415,799.7315,314.0215,525.3615,739.6115,956.8116,177.02
WACC
PV UFCF 15,799.7314,106.5113,173.5212,302.2511,488.5910,728.75
SUM PV UFCF 100,920.33

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%) 8.56
Free cash flow (t + 1) 16,824.10
Terminal Value 368,949.55
Present Value of Terminal Value 244,690.90

Intrinsic Value

Enterprise Value 345,611.23
Net Debt 18,294.00
Equity Value 327,317.23
Shares Outstanding 791.00
Equity Value Per Share 413.80