Unlevered Free Cash Flow Calculation

2015A
EBIT
Plus: Non-deductible Goodwill Amort.
EBITA
Less: Provision for Taxes
Unlevered Net Income
Plus: D&A (excl. non-deductible GW amort.)
Less: Capital Expenditures
Less: Increase in Net Working Capital
Unlevered Free Cash Flow

Calendar Year Ending December 31,

2016P
2017P
2018

$120.0
$120.0
(42.0)
$78.0

$126.2
$126.2
(44.2)
$82.0

$133.2
$133.2
(46.6)
$86.6

$137.7
$137.7
(48.2)
$89.5

15.3
(18.0)
(9.5)
$65.8

15.9
(16.0)
8.3
$90.2

16.7
(14.1)
3.1
$92.3

16.0
(14.6)
3.2
$94.2

DCF Analysis (2008-2012): EBITDA Multiple Method

Discount
Rate
(WACC)

Discount
Rate
(WACC)

10.0%
11.0%
12.0%

Total Enterprise Value

Terminal EBITDA Multiple
7.5x
8.0x
8.5x
$1,042.4
$1,088.1
$1,133.9
1,003.0
1,046.7
1,090.4
965.5
1,007.3
1,049.1

Discount
Rate
(WACC)

10.0%
11.0%
12.0%

10.0%
11.0%
12.0%

Implied Perpetuity Growth Rate

Terminal EBITDA Multiple
7.5x
8.0x
8.5x
1.0%
1.5%
1.9%
1.9%
2.4%
2.9%
2.8%
3.3%
3.8%

Discount
Rate
(WACC)

10.0%
11.0%
12.0%

DCF Analysis (2008-2012): Perpetuity Growth Method

Discount
Rate
(WACC)

Discount
Rate
(WACC)

10.0%
11.0%
12.0%

Total Enterprise Value

Terminal Perpetuity Growth Rate
3.0%
3.5%
4.0%
$1,260.8
$1,335.1
$1,421.7
1,103.6
1,158.0
1,220.1
981.4
1,022.5
1,068.8

Discount
Rate
(WACC)

10.0%
11.0%
12.0%

10.0%
11.0%
12.0%

Implied Terminal EBITDA Multiple

Terminal Perpetuity Growth Rate
3.0%
3.5%
4.0%
9.9x
10.7x
11.6x
8.7x
9.3x
10.0x
7.7x
8.2x
8.7x

Discount
Rate
(WACC)

10.0%
11.0%
12.0%

(1) Assumes net debt of $83.4mm as of 5/16/08.

(2) Assumes outstanding diluted shares of 35.021 million.

on

g December 31,
2019

2020

$142.4
$142.4
(49.9)
$92.6

$147.3
$147.3
(51.6)
$95.8

15.6
(15.1)
3.3
$96.4

15.4
(15.6)
3.4
$99.0

CAGR
2008-2012
3.9%
3.9%
3.9%

2.3%
Tax Rate
Net Debt
Shares

e Method
Total Equity Value
Terminal EBITDA Multiple
7.5x
8.0x
8.5x
$959.0
$1,004.7
$1,050.5
919.6
963.3
1,007.0
882.1
923.9
965.7
Total Price Per Share
Terminal EBITDA Multiple
7.5x
8.0x
8.5x
$27.38
$28.69
$30.00
26.26
27.51
28.75
25.19
26.38
27.58

th Method
Total Equity Value
Terminal Perpetuity Growth Rate
3.0%
3.5%
4.0%
$1,177.4
$1,251.7
$1,338.3
1,020.2
1,074.6
1,136.7
898.0
939.1
985.4
Total Price Per Share
Terminal Perpetuity Growth Rate
3.0%
3.5%
4.0%
$33.62
$35.74
$38.22
29.13
30.68
32.46
25.64
26.82
28.14

35.0%
$83.4
35.021

Cashflow Statement
Net Income
Depreciation and amortization of intangible
assets, property, plant and equipment and
financial assets
Changes in inventories
Changes in receivables
Changes in operating liabilities and other
provisions
changes in pension provisions, defined
benefit assets and other items
gains (-)/losses (+) from disposal of
noncurrent
assets and
securities
Cash
provided
by
operating

activities
Payments for property, plant and
equipment and intangible assets
securities
Payments for acquisitions
Payments from divestures
Payments from the disposal of noncurrent
assets and
securities
Cash
used
in investing

activities
Capital increases/repayments an other
equity transactions
Additions to financial and similar liabilities
liabilities
Dividends paid
To Shareheolders of BASF SE
To minority
shareholders
Cash used
in financing

activities
Net changes in cash and cash
equivalents
Change in cash and cash equivalents
From foreign exchange rates
changes in scope of consolidation

Cash and Cash Equivalents at

the beginning of the year
Cash and Cash Equivalents at
the end of the year

2015

2014

3987

5155

4448
1094
1463

3455
-606
173

-1210

-190

-317

-773

-19

-256

9446

6958

-5812
-920
-215
651

-5296
-1131
-963
1336

1061

1558

-5235

-4496

66
6937
-7870

0
6048
-5760

-2572
-234

-2480
-286

-3673
538

-2478
-16

-19
4

-90
-3

1718

1827

2241

1718

Income Statement
Sales Revenue
Cost of Sales

Gross profit on Sales

Selling Expenses
General and Administrative
Expenses
Research Expenses
Other operating income
Other operating expenses
Income from companies accounted
for using the equity method

Income from Operations

Income from other shareholdings
Expenses from other shareholdings
Interest Income
Interest Expenses
Other financial Income
Other financial Expenses

2015
70,449
-51,372

19,077
-8,062
-1,429
-1,953
2,004
-3,640
251

6,248
80
-71
213
-638
152
-436

Financial Result

-700

Income before taxes and minority

interests
Income
Taxes
Income
before minority

5,548
-1,247

interests
Minority Interests

Net Income

4,301
-314

3,987

BASF DCF Valuation

2015
Revenue
EBITDA
Less Depreciation
EBITDA
Tax Rate

Unlevered Net Income

Plus Depreciation
Less Capital Expenditures
Less Change in Working Capital

Free Cash Flow

2016

2017

2018

2019

2020

CAGR 2016 - 2020

BASF Mutiple Valuation

(Valuation in inefficient markets with Bootstrapping)

BASF before mergShell before merge

Earnings per share
Price per share
Price-earnings ratio
Number of shares
Total earnings
Total market value
Earnings per dollar invested in the stock

4.34

Earnings per share:

https://report.basf.com/2015/en/financial-statements/notes/notes-on-statements-of-income/earn
Price per share
Price-earningsratio
Number of shares
Total earnings
Total market value
Earnings per dollar invested in the stock

BASF & Shell after the merger

es/notes-on-statements-of-income/earnings-per-share.html