Table 4.
Carbon tax (CTx) DCF.
|
Expected Free Cash Flow to Firm - XOM | |||||
|---|---|---|---|---|---|
| Carbon Tax (CTx) DCF | |||||
| YEAR | 2019 | 2020 | 2021 | 2022 | Terminal Year |
| Rev. growth rate | -6.1% | -6.1% | -6.1% | -6.1% | |
| Revenues | $255,583 | $239,992 | $225,353 | $211,606 | $198,698 |
| Operating Margin | 4.6% | 1.8% | 1.3% | 0.8% | 3.9% |
| Operating Income ("EBIT") | $11,631 | $4,360 | $2,898 | $1,597 | $7,739 |
| Taxes | $3,059 | $1,147 | $762 | $420 | $2,035 |
| After-tax Operating Income | $8,572 | $3,213 | $2,136 | $1,177 | $5,704 |
| -Reinvestment (incl Divestiture proceeds) | $5,463 | $(11,787) | $(22,864) | $(28,823) | $(9,296) |
| Change in Non-Cash WC | $(1,583) | ||||
| FCFF | $4,692 | $15,000 | $25,000 | $30,000 | $15,000 |
| Terminal Value | $113,547.77 | ||||
| Present Value | $14,004 | $21,791 | $116,816 | ||
| Return on Capital | 3.4% | 1.4% | 1.2% | 1.0% | 7.1% |
| Capital Invested | $248,616 | $227,186 | $181,457 | $117,407 | $80,222 |
| Change in BV | $5,463 | $(21,430) | $(45,729) | $(64,050) | $(37,185) |
| Divestiture proceeds/Capital | 55.0% | 50.0% | 45.0% | 25.0% | |
| Divestiture Proceeds ($) | $11,787 | $22,864 | $28,823 | $9,296 | |
| BV Debt | $52,767 | $52,767 | $42,767 | $27,767 | $27,767 |
| BV Debt/ Capital invested | 21.2% | 23.2% | 23.6% | 23.7% | 34.6% |
| Tax rate | 26.3% | 26.3% | 26.3% | 26.3% | 26.3% |
| Cost of Capital (WACC) | 7.1% | 7.1% | 7.1% | 7.1% | 7.1% |
| Value of Operating Assets= | $152,611 | ||||
| + Cash & Other non-operating assets | $3,089 | ||||
| -Debt | $(52,767) | ||||
| -Minority Interest | $(7,288) | ||||
| Value of Equity= |
$95,645 |
||||
| Value per share= | 22.59 | ||||
Note: For CTx, Terminal Year ROC has Terminal Year Capital Invested as the denominator.