Discounted Cash Flow (DCF) Analysis Levered

KNOT Offshore Partners LP (KNOP)

$5.08

-0.31 (-5.75%)

All numbers are in Millions, Currency in USD

Stock DCF: 125.73 | 5.08 | undervalue

Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	279.46	282.56	279.22	281.13	268.58	266	263.44	260.90	258.39	255.91
Revenue (%)
Operating Cash Flow	148.65	165.69	169.24	166.41	100.94	143.22	141.85	140.48	139.13	137.79
Operating Cash Flow (%)
Capital Expenditure	-0.12	-0.12	-0.12	-0.12	-0.11	-0.11	-0.11	-0.11	-0.11	-0.11
Capital Expenditure (%)
Free Cash Flow	148.53	165.57	169.12	166.29	100.83	143.11	141.74	140.37	139.02	137.68

Weighted Average Cost Of Capital

Share price	$ 5.08
Beta	0.776
Diluted Shares Outstanding	33.88
Cost of Debt
Tax Rate	1.47
After-tax Cost of Debt	3.96%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.301
Total Debt	1,058.65
Total Equity	172.12
Total Capital	1,230.77
Debt Weighting	86.02
Equity Weighting	13.98
Wacc

Build Up Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	279.46	282.56	279.22	281.13	268.58	266	263.44	260.90	258.39	255.91
Operating Cash Flow	148.65	165.69	169.24	166.41	100.94	143.22	141.85	140.48	139.13	137.79
Capital Expenditure	-0.12	-0.12	-0.12	-0.12	-0.11	-0.11	-0.11	-0.11	-0.11	-0.11
Free Cash Flow	148.53	165.57	169.12	166.29	100.83	143.11	141.74	140.37	139.02	137.68
WACC
PV LFCF						137.04	129.97	123.25	116.89	110.85
SUM PV LFCF										618.01

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	4.43
Free cash flow (t + 1)	140.44
Terminal Value	5,779.28
Present Value of Terminal Value	4,653.15

Intrinsic Value

Enterprise Value	5,271.16
Net Debt	1,011.07
Equity Value	4,260.09
Shares Outstanding	33.88
Equity Value Per Share	125.73