Discounted Cash Flow (DCF) Analysis Unlevered

The Howard Hughes Corporation (HHC)

$72.62

+1.84 (+2.60%)

All numbers are in Millions, Currency in USD

Stock DCF: -337.41 | 72.62 | overvalue

Operating Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	1,100.12	1,064.54	1,300.54	699.49	1,427.90	1,702.25	2,029.32	2,419.22	2,884.04	3,438.17
Revenue (%)
EBITDA	318.10	282.78	363.74	335.19	406.44	544.14	648.69	773.33	921.92	1,099.05
EBITDA (%)
EBIT	187.17	154.53	208.57	117.76	201.29	267.25	318.60	379.81	452.79	539.79
EBIT (%)
Depreciation	130.92	128.25	155.17	217.44	205.15	276.89	330.10	393.52	469.13	559.26
Depreciation (%)

Balance Sheet Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Total Cash	861.06	499.68	422.86	1,014.69	843.21	1,231.87	1,468.56	1,750.72	2,087.10	2,488.10
Total Cash (%)
Account Receivables	399.34	271.61	384.54	387.73	574.79	636.87	759.23	905.11	1,079.01	1,286.33
Account Receivables (%)
Inventories	-	198.35	60.73	56.94	58.55	151.26	180.32	214.97	256.27	305.51
Inventories (%)
Accounts Payable	35.89	38.75	37.48	28.59	72.83	64.59	77	91.79	109.43	130.45
Accounts Payable (%)
Capital Expenditure	-302.06	-625.20	-669.61	-1.61	-1.81	-469.93	-560.22	-667.86	-796.17	-949.15
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 72.62
Beta	1.392
Diluted Shares Outstanding	52.31
Cost of Debt
Tax Rate	12.45
After-tax Cost of Debt	2.44%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.354
Total Debt	4,660.52
Total Equity	3,798.61
Total Capital	8,459.13
Debt Weighting	55.09
Equity Weighting	44.91
Wacc

Build Up Free Cash

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	1,100.12	1,064.54	1,300.54	699.49	1,427.90	1,702.25	2,029.32	2,419.22	2,884.04	3,438.17
EBITDA	318.10	282.78	363.74	335.19	406.44	544.14	648.69	773.33	921.92	1,099.05
EBIT	187.17	154.53	208.57	117.76	201.29	267.25	318.60	379.81	452.79	539.79
Tax Rate	-39.38%	22.13%	28.57%	408.42%	12.45%	86.44%	86.44%	86.44%	86.44%	86.44%
EBIAT	260.88	120.33	148.98	-363.18	176.23	36.24	43.21	51.51	61.40	73.20
Depreciation	130.92	128.25	155.17	217.44	205.15	276.89	330.10	393.52	469.13	559.26
Accounts Receivable	-	127.74	-112.93	-3.19	-187.06	-62.08	-122.36	-145.88	-173.90	-207.32
Inventories	-	-	137.62	3.79	-1.60	-92.71	-29.06	-34.65	-41.30	-49.24
Accounts Payable	-	2.86	-1.27	-8.89	44.24	-8.24	12.41	14.79	17.64	21.03
Capital Expenditure	-302.06	-625.20	-669.61	-1.61	-1.81	-469.93	-560.22	-667.86	-796.17	-949.15
UFCF	89.75	-246.03	-342.04	-155.65	235.14	-319.82	-325.93	-388.56	-463.21	-552.21
WACC
PV UFCF						-303	-292.56	-330.43	-373.21	-421.52
SUM PV UFCF										-1,720.71

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	5.55
Free cash flow (t + 1)	-563.26
Terminal Value	-15,866.41
Present Value of Terminal Value	-12,111.21

Intrinsic Value

Enterprise Value	-13,831.92
Net Debt	3,817.31
Equity Value	-17,649.23
Shares Outstanding	52.31
Equity Value Per Share	-337.41