Discounted Cash Flow Analysis Clause Samples
A Discounted Cash Flow Analysis clause defines the method for evaluating the present value of future cash flows associated with a project, investment, or contractual arrangement. This clause typically outlines the discount rate to be used, the time period over which cash flows are projected, and the types of cash flows to include, such as revenues, expenses, or terminal values. By specifying these parameters, the clause ensures that all parties use a consistent and transparent approach to valuing future financial benefits or obligations, thereby reducing disputes and facilitating informed decision-making.
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Discounted Cash Flow Analysis. Centerview performed discounted cash flow analyses of Era and Bristow based upon the Era Forecasts and the Bristow Forecasts, respectively. A discounted cash flow analysis is a traditional valuation methodology used to derive a valuation of an asset by calculating the ‘‘present value’’ of estimated future cash flows of the asset. ‘‘Present value’’ refers to the current value of future cash flows and is obtained by discounting those future cash flows by a discount rate that takes into account macroeconomic assumptions and estimates of risk, the opportunity cost of capital, expected returns and other appropriate factors. Centerview calculated the estimated present value, as of December 31, 2019, of the unlevered, after-tax free cash flows that Era was forecasted to generate during the year ending December 31, 2020 through the year ending December 31, 2024 based upon the Era Forecasts. Era’s unlevered, after-tax free cash flows were calculated as (i) adjusted non-GAAP earnings before interest and taxes, less (ii) taxes, capital expenditures and increase in net working capital, plus (iii) depreciation & amortization and net proceeds from asset sales. The calculation of unlevered, after-tax free cash flows and the assumptions underlying them are described in the section entitled ‘‘Certain Unaudited Prospective Financial Information-Certain Era Unaudited Prospective Financial Information’’. The terminal value of Era at the end of the forecast period was estimated by using a range of exit multiples of 6.5x to 8.0x NTM Adjusted EBITDA. The range of exit multiples was estimated by Centerview utilizing its professional judgment and experience, taking into account, among other things, the Era Forecasts and considerations discussed in the ‘‘Selected Trading Multiples Analysis’’ section. The cash flows and terminal values were then discounted to present value as of December 31, 2019, using a range of discount rates of 11.75% to 13.00% (reflecting Centerview’s analysis of Era’s weighted average cost of capital using the Capital Asset Pricing Model and based on considerations that Centerview deemed relevant in Centerview’s professional judgment and experience, taking into account certain metrics including yields for U.S. treasury notes, market risk and size premia). Based upon this analysis, Centerview calculated an implied equity value range for Era of $237 million to $292 million and a per share value of $11.14 to $13.70 as of December 31, 2019. Centerview calculated t...
Discounted Cash Flow Analysis. Lehm▇▇ ▇▇▇thers performed a discounted cash flow analysis on the projected financial information of the Company for the fiscal years 2000 through 2004, based upon operating and financial assumptions, forecasts and other information provided to Lehm▇▇ ▇▇▇thers by the management of the Company. Using this information, Lehm▇▇ ▇▇▇thers discounted to present value the projected stream of unleveraged net income (earnings before interest and after taxes) for the fiscal years 2000 through 2004 as adjusted for: certain projected non-cash items (such as depreciation and amortization); forecasted capital expenditures (including discretionary capital expenditures); and forecasted changes in non-cash working capital (in aggregate, "Free Cash Flow"). To estimate the residual value of the Company at the end of the forecast (the "Terminal Value"), Lehm▇▇ ▇▇▇thers utilized two approaches, applying a range of 5.5x-6.5x multiples to projected fiscal 2004 EBITDA and applying terminal period growth rates of 4.0%-5.0% to projected fiscal 2004 Free Cash Flow, and discounted these Terminal Values to present value. Lehm▇▇ ▇▇▇thers applied a range of discount rates that varied from 11.5% to 12.5%, based on a weighted average cost of capital analysis of the Comparable Public Companies derived from the Capital Asset Pricing Model. To calculate the aggregate net present value of the equity of the Company, Lehm▇▇ ▇▇▇thers subtracted total debt less cash and cash equivalents of the Company as of December 31, 1999, from the sum of the present value of the projected Free Cash Flow and the present value of the Terminal Value. This analysis resulted in a range of equity values of approximately $10.14 to $14.19 per share. LEVERAGED BUYOUT ANALYSIS. Lehm▇▇ ▇▇▇thers performed a leveraged buyout analysis to determine the potential implied equity value per share of Common Stock that might be achieved in an acquisition of the Company in a leveraged buyout transaction based on current market conditions. In conducting this analysis, Lehm▇▇ ▇▇▇thers utilized projected financial information of the Company, based upon operating and financial assumptions, forecasts and other information provided to Lehm▇▇ ▇▇▇thers by the management of the Company for the fiscal years 2000 through 2004, and based upon Lehm▇▇ ▇▇▇thers' estimates for the fiscal years 2005 through 2009, and assumed that merger financing could be obtained in the high yield market and bank finance markets in an amount not in excess of 4.8x 1...
Discounted Cash Flow Analysis. As part of its analysis, and in order to estimate the present value of ▇▇▇▇▇'s and ▇▇▇▇▇'s ADSs, respectively, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ performed an illustrative discounted cash flow analysis for each company using Management Projections. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ calculated net present values of free cash flows for Tudou and Youku for the years 2012 through 2016 and calculated terminal values in the year 2016 based on a perpetual growth rate range of 4.0% to 6.0%, which range was derived based upon, among other things, the median of perpetual growth rates published by select equity research analysts. These values were discounted at a discount rate ranging from 15.0% to 17.0%, which range was derived taking into account, among other things, a weighted average cost of capital calculation based on factors commonly considered for purposes of calculating an estimated weighted average cost of capital, including the trading volatility of the ADSs of Tudou and Youku relative to the overall market. These analyses resulted in a range of implied present values of US$25.82 to US$36.74 per ADS for Tudou and US$20.75 to US$29.22 per ADS for Youku. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ then calculated an implied ADS exchange ratio range based on the implied present values per ADS of 0.88x to 1.77▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ noted that the ADS Consideration to be paid per Tudou ADS was US$39.89 (based on the ADS Exchange Ratio of 1.595x) as of March 9, 2012.
Discounted Cash Flow Analysis. For purposes of this analysis, “unlevered free cash flow” is calculated as the adjusted EBITDA attributable to HEP as provided by the management of the General Partner in the HEP Base Case (“Adjusted EBITDA”) less maintenance capital expenditures, turnaround expense, MidCon capital expenditures, growth capital expenditures, changes in net working capital and other cash adjustments. Intrepid performed discounted cash flow analyses to calculate the estimated present value of: (i) the unlevered free cash flow that HEP is projected to generate for the five and a half year period beginning with the six months ending December 31, 2023, based on the HEP Base Case prepared by the General Partner’s management, and (ii) an implied terminal enterprise value. Using an estimated weighted average cost of capital ranging from 8.5% to 10.5%, Intrepid discounted: (i) HEP’s estimated unlevered free cash flow, and (ii) a range of illustrative terminal enterprise values, calculated by applying a range of terminal Adjusted EBITDA multiples of 7.0x to 8.5x to terminal year Adjusted EBITDA. Intrepid derived such weighted average cost of capital range by application of the Capital Asset Pricing Model and analysis of recently issued senior unsecured debt of HEP and peers and such terminal multiple range using its professional judgment and experience, taking into account, among other things, an analysis of HEP and the HEP selected comparable companies. Intrepid then subtracted HEP estimated debt and added HEP estimated cash as of June 30, 2023 to arrive at an implied equity value for HEP. Intrepid divided the implied equity value for HEP by the HEP Common Units outstanding, to compute the implied equity value per HEP Common Unit. The analysis resulted in an implied equity value per HEP Common Unit range of $19.81 to $26.13. Intrepid performed discounted cash flow analyses to calculate the estimated present value of: (i) the DPU that HEP is projected to distribute for the five and a half year period beginning with the six months ending December 31, 2023, based on the HEP Base Case prepared by the General Partner’s management, and (ii) an implied terminal value per HEP Common Unit. Using an estimated cost of equity ranging from 9.0% to 13.25%, Intrepid discounted: (i) HEP’s estimated DPU, and (ii) a range of illustrative terminal values per HEP Common Unit, calculated by applying a range of terminal distribution yields of 7.25% to 9.25% to terminal year DPU. Intrepid derived such cos...
Discounted Cash Flow Analysis. Bear ▇▇▇▇▇▇▇ performed a discounted cash flow analysis based on a review of the present value of future cash flows potentially realizable from the continuing operation of the Mainland Commercial segment. This analysis was based on estimates and guidance provided by the Company's management for estimated Mainland Commercial segment operating results through the end of fiscal year 2004. Bear ▇▇▇▇▇▇▇ computed the present value of the free cash flows of the Company's Mainland Commercial segment for the five fiscal years from 2000 through 2004 by applying a range of discount rates of 10% to 12% per year. Such discount rates take into account the quality of the Mainland Commercial segment's underlying properties and the risk associated with attracting tenants to various new properties. Bear ▇▇▇▇▇▇▇ also computed the present value of the terminal value of the Mainland Commercial segment at the end of fiscal year 2004 by applying a range of Adjusted Net Operating Income ("NOI") multiples of 9.5 times to 10.5 times the Mainland Commercial segment's estimated fiscal year 2004 NOI and applying these terminal values to a range of discount rates of 10% to 12% per year. The range of terminal NOI multiples was determined by analyzing the current and historical NOI multiples of the Company and comparable companies and transactions and factoring in the stabilized cash flows prospects of the Company at the end of fiscal 2004.
Discounted Cash Flow Analysis. Bear ▇▇▇▇▇▇▇ performed a discounted cash flow analysis based on an analysis of the present value of future cash flows potentially realizable from the continuing operation of the Hawaii Residential segment. This analysis was based on estimates and guidance provided by the Company's management for estimating the Hawaii Residential segment operating results through the end of fiscal year 2004. Bear ▇▇▇▇▇▇▇ computed the present value of the free cash flows of the Company's Hawaii Residential segment for the five fiscal years from 2000 through 2004 by applying a range of discount rates of 12% to 14% per year. These discount rates were based on the WACC for homebuilders using the CAPM. However, Bear ▇▇▇▇▇▇▇ noted that over the past several years, homebuilders have significantly underperformed the market and have very low betas. Therefore, Bear ▇▇▇▇▇▇▇ calculated the Hawaii Residential segment's WACC, assuming a market beta. Bear ▇▇▇▇▇▇▇ also computed the present value of the terminal value of the Hawaii Residential segment at the end of fiscal year 2004 by applying a range of EBITDA multiples of 5 times to 7 times the Hawaii Residential segment's estimated fiscal year 2004 EBITDA and applying these terminal values to a range of discount rates of 12% to 14% per year. The range of terminal EBITDA multiples was determined by analyzing the current and historical EBITDA multiples of the Company and comparable companies and transactions and factoring in the expected growth prospects of the Company at the end of fiscal 2004. SUMMARY OF ANALYSES REGARDING CURRENT DEVELOPMENT PROJECTS OF HAWAII RESIDENTIAL SEGMENT The table below sets forth the enterprise value ranges for each of the analyses performed on the current development projects of the Hawaii Residential segment: ENTERPRISE VALUE ------------------- LOW HIGH -------- -------- ($ IN MILLIONS) Discounted Cash Flow Analysis............................... $155 $194 Comparable Companies Analysis............................... $ 51 $130 M&A Comparable Transactions Analysis........................ $ 64 $109 In examining each of the comparable company, merger and acquisition transactions and discounted cash flow analyses, Bear ▇▇▇▇▇▇▇ noted the very high level of growth in management's forecasts and therefore weighted the discounted cash flow more heavily. As stated above, the comparable companies and transactions analysis was relied on to determine the terminal value of the Hawaii Residential segment. However, ▇▇▇▇ ▇▇▇...
Discounted Cash Flow Analysis. Bear ▇▇▇▇▇▇▇ performed two discounted cash flow analyses on Indigo: (i) a portfolio run-off scenario and (ii) a going concern scenario. The multiples used in the going concern scenario were based on the current and historical multiples of Indigo and the companies described under AComparable Companies Analysis@ above.
Discounted Cash Flow Analysis. Griffin performed a discounted cash flow analysis to estimate a range of the present value of estimated free cash flows that Metro could generate on a stand-alone basis, assuming certain cost savings and one-time charge. In performing this analysis, Griffin utilized the following assumptions, among others: • earnings assumptions based on forward earnings estimates for Metro and discussions with F.N.B.’s and Metro’s management, with subsequent earnings for Metro developed based upon historical trends and assumptions and inputs that Griffin considered reasonable; • a range of discount rates of 11% to 14% based on a normalized risk free interest rate as recommended by Duff & Phelps, the latest published Duff & Phelps U.S. Equity Risk Premium recommendation, a size premium, also published by Duff & Phelps, and a three-year beta as calculated by SNL Financial; and • a projected terminal values range of 11 to 15 times earnings based on the observable Mid-Atlantic companies identified by Griffin as part of its “Selected Companies Analysis” above who, at June 30, 2015, are comparable to Metro at the end of the terminal period, industry practice, and Griffin’s professional judgment. These calculations resulted in a range of implied per share values of between $37.04 to $53.79 with cost- savings of $37.7 million and a one-time pre-tax transaction charge of $49.5 million estimated by F.N.B.’s management. The discounted cash flow present value analysis is a widely used valuation methodology that relies on numerous assumptions, including asset and earnings growth rates, terminal values and discount rates and is not necessarily indicative of the actual value or expected value of Metro. The summary set forth above is not a complete description of the analyses and procedures performed by Griffin in the course of arriving at its opinion.
Discounted Cash Flow Analysis. ▇▇▇▇▇▇▇▇ Inc. performed a discounted cash flow analysis to estimate a range of present values of after-tax cash flows that FNBB could contribute to TriCo through 2023, standalone as well as including estimated cost savings of 28% of FNBB’s projected noninterest expense. In performing this analysis, ▇▇▇▇▇▇▇▇ Inc. relied on analyst projections to derive TriCo’s projected after-tax cash flows for fiscal years 2018-2019 (7.5% earnings growth thereafter). ▇▇▇▇▇▇▇▇ Inc. used FNBB management projections for 2018 and then TriCo projections (based on 10% balance sheet growth, 5% non-interest expense growth, and a flat rate environment) for 2019-2021 (12.5% earnings growth thereafter). Additionally, the analysis assumes FNBB pays the maximum dividend available while maintaining an 8.0% tangible common equity to tangible asset ratio. Any earnings in excess of what would need to be retained represented dividendable cash flows for FNBB. A valuation was derived by discounting the projected free cash flows for FNBB based on the estimates for the period June 30, 2018 through December 31, 2022 and a terminal value at December 31, 2022 based on the next twelve months earnings ending December 31, 2023 and utilizing a range of discount rates approximating TriCo cost of capital. The analysis assumed discount rates ranging from 10.0% to 11.0% and terminal multiples ranging from 15.0 times to 17.0 times fiscal year 2022 NTM forecasted earnings. On a standalone basis, this analysis resulted in a range of values of FNBB from $302.3 million to $350.8 million. Including estimated cost savings of 28% of FNBB’s projected noninterest expense, this analysis resulted in a range of values of FNBB from $393.6 million to $454.5 million. The discounted cash flow present value analysis is a widely used valuation methodology that relies on numerous assumptions, including asset and earnings growth rates, terminal values and discount rates. The analysis did not purport to be effective to determine the actual current or expected future values of FNBB. ▇▇▇▇▇▇▇▇ Inc. performed pro forma merger analyses that combined projected income statement and balance sheet information of TriCo and FNBB. Analytic assumptions obtained from management of TriCo regarding the accounting treatment, acquisition adjustments and cost savings were used to calculate the financial impact that the merger could be expected to have on certain projected financial results of TriCo. In the course of this analysis, ▇▇▇▇▇▇▇▇ Inc. ...
Discounted Cash Flow Analysis. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ performed a discounted cash flow analysis, which is designed to imply a value of a company by calculating the present value of estimated future cash flows of the company. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ calculated ranges of implied equity values per share for Genesis, based on discounted cash flow analyses utilizing Wall Street analyst estimates compiled by IBES and the Genesis no growth case and growth case projections for cash flows for the calendar years 2009 through 2013. In arriving at the estimated equity values per share of Genesis for each of the Wall Street analyst estimated cash flow and the Genesis growth case projected cash flow, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ utilized a 7.0x EBITDA terminal multiple, reflecting value for a going concern. In arriving at the estimated equity values per share of Genesis for the Genesis no growth case projected cash flow, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ utilized a 4.5x EBITDA terminal multiple, reflecting a portfolio in run-off and degraded asset quality as a result of minimal capital investment. The projected cash flows and the terminal value were then discounted to present values using a range of weighted average cost of capital from 8.0% to 10.0%. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ selected this range using a Weighted Average Cost of Capital ("WACC") analysis. The weighted average cost of capital is a measure of the average expected return on all of a given company's equity securities and debt based on their proportions in such company's capital structure. Based on the calculations set forth above, this analysis implied a value range for Genesis Common Shares of approximately $11 to $14 per share based on Wall Street analyst estimates, approximately $11 to $13 per share based on the Genesis no growth case projections, and approximately $12 to $16 per share based on the Genesis growth case projections. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ also calculated ranges of implied equity values per share for AerCap, based on discounted cash flow analyses using Wall Street analyst estimates compiled by IBES and the AerCap management projections for cash flows for the calendar years 2009 through 2013. In arriving at the estimated equity values per share of AerCap for each of the Wall Street analyst estimated cash flow and the AerCap management projected cash flow, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ utilized a 7.0x EBITDA terminal multiple, reflecting value for a going concern. The projected cash flows and the terminal value were then discounted to present values using a range of weighted average cost of capital from 8...