Discounted Cash Flow (DCF) Analysis Unlevered

ONE Gas, Inc. (OGS)

$79.63

-1.31 (-1.62%)

All numbers are in Millions, Currency in USD

Stock DCF: -162.64 | 79.63 | overvalue

Operating Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	1,633.70	1,652.70	1,530.27	1,808.60	2,578	2,929.16	3,328.15	3,781.48	4,296.57	4,881.82
Revenue (%)
EBITDA	437.16	472.68	495.38	514.28	574.25	811.03	921.51	1,047.03	1,189.65	1,351.69
EBITDA (%)
EBIT	277.07	292.28	300.50	307.05	345.77	496.03	563.60	640.37	727.59	826.70
EBIT (%)
Depreciation	160.09	180.39	194.88	207.23	228.48	315	357.91	406.66	462.05	524.99
Depreciation (%)

Balance Sheet Data

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Total Cash	21.32	17.85	7.99	8.85	9.68	22.10	25.11	28.53	32.42	36.84
Total Cash (%)
Account Receivables	295.42	260.01	292.99	341.76	553.83	546.82	621.30	705.93	802.09	911.34
Account Receivables (%)
Inventories	151.63	159.99	146.71	234.54	340.08	320.50	364.16	413.76	470.12	534.16
Inventories (%)
Accounts Payable	174.51	120.49	152.31	258.55	360.49	329.27	374.12	425.08	482.98	548.76
Accounts Payable (%)
Capital Expenditure	-394.45	-417.32	-471.35	-495.25	-609.49	-768.74	-873.45	-992.43	-1,127.61	-1,281.20
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 79.63
Beta	0.681
Diluted Shares Outstanding	53.67
Cost of Debt
Tax Rate	17.34
After-tax Cost of Debt	2.19%
Risk-Free Rate
Market Risk Premium
Cost of Equity	6.820
Total Debt	2,925.12
Total Equity	4,274.06
Total Capital	7,199.18
Debt Weighting	40.63
Equity Weighting	59.37
Wacc

Build Up Free Cash

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	1,633.70	1,652.70	1,530.27	1,808.60	2,578	2,929.16	3,328.15	3,781.48	4,296.57	4,881.82
EBITDA	437.16	472.68	495.38	514.28	574.25	811.03	921.51	1,047.03	1,189.65	1,351.69
EBIT	277.07	292.28	300.50	307.05	345.77	496.03	563.60	640.37	727.59	826.70
Tax Rate	23.71%	18.66%	17.47%	16.34%	17.34%	18.71%	18.71%	18.71%	18.71%	18.71%
EBIAT	211.37	237.73	248	256.88	285.81	403.25	458.17	520.58	591.49	672.06
Depreciation	160.09	180.39	194.88	207.23	228.48	315	357.91	406.66	462.05	524.99
Accounts Receivable	-	35.41	-32.97	-48.77	-212.08	7.01	-74.48	-84.63	-96.16	-109.25
Inventories	-	-8.36	13.28	-87.83	-105.54	19.58	-43.66	-49.60	-56.36	-64.04
Accounts Payable	-	-54.02	31.82	106.24	101.94	-31.23	44.85	50.96	57.90	65.79
Capital Expenditure	-394.45	-417.32	-471.35	-495.25	-609.49	-768.74	-873.45	-992.43	-1,127.61	-1,281.20
UFCF	-22.99	-26.17	-16.34	-61.49	-310.88	-55.12	-130.66	-148.45	-168.67	-191.65
WACC
PV UFCF						-52.53	-118.64	-128.46	-139.09	-150.59
SUM PV UFCF										-589.31

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	4.94
Free cash flow (t + 1)	-195.48
Terminal Value	-6,649.06
Present Value of Terminal Value	-5,224.63

Intrinsic Value

Enterprise Value	-5,813.94
Net Debt	2,915.43
Equity Value	-8,729.37
Shares Outstanding	53.67
Equity Value Per Share	-162.64