Académique Documents
Professionnel Documents
Culture Documents
Key Drivers
- Retail Sales
- Sales volume growth (Comparable)
- Acquisitions?
Geographic Divisions
- US
- Canada
- Europe
Business Segments
- Department Store
- Joint Ventures Investments
Revenue Schedule
Total sales = sales per sq. ft x total square footage
Calculate total square footage growth
Assume 2015 sales per sq. ft (every quarter)
Assume sales per sq. ft grow at comparable sales rate
Geographic mix
EQUITY
Stock Price - 09/16/16
Average Stock Price - 2015
Annual Common Dividend Payout
Fully Diluted Shares O/S (MM) - Ja
PRODUCT PRICING
- The product pricing cases used in the model are as follows:
Pricing Case
2016-2020
Terminal Year
OPERATIONS
- Sales per Square Footage
- Gross Leasable Area (000's sq. ft
Base Case
Best Case
Research Forecast
+5%
- Rent (MM)
Worst Case
(5%)
TAXES
- Values are calculated assuming
- Tax rate assumed in the model:
0.6%
4.8%
3.8%
3.9%
4.4%
4.4%
VALUATION
- Cost of Equity
- Low end of the discount rate (WA
9.0%
$658.0
$0.0
$40.0
TERMINAL YEAR
Page 3 of 68
09/17/2016 19:50:38
DEPRECIATION
- Depreciation Methodology Used:
- Years remaining for depreciation
- Years used for depreciation of ne
CIRCUIT BREAKER
Circularity in the Model is Currently
2016
Freehold Land
Buildings
Leasehold Improvements
Fixtures & Fittings
Assets held under Finance Leases
Total
0.0
0.0
0.0
600.0
0.0
$600.0
2017
0.0
0.0
0.0
600.0
0.0
$600.0
2018
0.0
0.0
0.0
600.0
0.0
$600.0
2019
0.0
0.0
0.0
600.0
0.0
$600.0
2020
0.0
0.0
0.0
600.0
0.0
$600.0
2016
2017
2018
2019
2020
Adjustment 1
Adjustment 2
Adjustment 3
Total
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
0.0
0.0
0.0
$0.0
Page 4 of 68
09/17/2016 19:50:38
(Days)
2016
Accounts Receivable
Inventories
Accounts Payable
9.2
158.5
67.1
2017
9.2
158.5
67.1
2018
9.2
158.5
67.1
2019
9.2
158.5
67.1
2020
9.2
158.5
67.1
2016
2017
2018
2019
2020
$0.0
$0.0
$0.0 ($349.0)
$220.0
$0.0
($7.0)
($3.0)
($25.0)
($4.1)
$0.0
$0.0
$0.0
$0.0
($4.5)
$0.0
$0.0
$0.0
$0.0
($4.9)
$0.0
$0.0
$0.0
$0.0
($5.3)
$0.0
0.0
$0.0
0.0
$0.0
0.0
$0.0
3.5
Page 5 of 68
$0.0
0.0
09/17/2016 19:50:39
$285.00
49,133
$756.00
26.5%
20.0%
$1,032.0
$0.0
8.8%
5.7%
3.6%
Page 6 of 68
09/17/2016 19:50:39
Straight Line
11 years
20 years
s and Assumptions
Page 7 of 68
09/17/2016 19:50:39
2021
$0.0
$0.0
$0.0
$0.0
($5.8)
Page 8 of 68
09/17/2016 19:50:39
2016
2017
2018
2019
2020
Term
Cost Inflation
2.0%
2.0%
2.0%
2.0%
2.0%
2.0%
Base Case
Best Case
Worst Case
2.0%
1.0%
2.5%
2.0%
1.0%
2.5%
2.0%
1.0%
2.5%
2.0%
1.0%
2.5%
2.0%
1.0%
2.5%
2.0%
1.0%
2.5%
2.5%
2.5%
2.5%
2.3%
2.3%
2.3%
2.5%
2.5%
2.5%
2.5%
2.5%
2.3%
2.5%
2.5%
2.1%
2.3%
2.5%
1.9%
2.3%
2.5%
1.9%
2.3%
2.5%
1.9%
50533
51502
51684
51917
52186
52311
50533
53060
48007
51502
54077
48927
51684
54268
49100
51917
54513
49321
52186
54795
49577
52311
54926
49695
58.0%
58.0%
57.5%
57.5%
57.5%
57.0%
58.0%
59.5%
60.0%
58.0%
59.5%
60.0%
57.5%
59.5%
60.0%
57.5%
59.5%
60.0%
57.5%
59.5%
60.0%
57.0%
59.5%
60.0%
ECONOMIC SCENARIOS
SALES SCENARIOS
Comparable Sales Growth Rate
Base Case
Best Case
Worst Case
Cost of Sales
Base Case
Best Case
Worst Case
Page 9 of 68
09/17/2016 19:50:39
Hudson's B
Revenue Sc
Pricing
Sales per Square Footage
(CDN$/sq. ft)
Capacity
Total Square Footage
Sales Volume
Comparable Sales Growth
(%)
Revenue
Gross Revenue
Revenue from Acquisitions
Net Revenue
(C$ MM)
(C$ MM)
(C$ MM)
Hudson's Bay
Costs of Product
% of Revenue
% of Revenu
per sq. ft
per sq. ft
per sq. ft
(C$ MM)
(C$ MM)
Fixed Costs
SG&A
Total Fixed Costs
(C$ MM)
(C$ MM)
Total Costs
(C$ MM)
Hudson's B
Income Sta
Sales Volume
(000's units)
Revenue
Gross Revenue
Net Revenue
(C$ MM)
(C$ MM)
Cost of Sales
S,G & A
Total Costs
(C$ MM)
Adjustments
EBITDA
(C$ MM)
(C$ MM)
Interest Expense
EBT
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
Net Income
(C$ MM)
(MM's)
(C$ / share)
Normalization adjustments
Gain on contribution of assets to joint ventures
Gain on sale of investments in joint ventures
Gain on sale of Queen street Sale
Dilution gain from investments in joint ventures
Acquisition and integration related expenses and finance costs
Joint venture transaction costs
Restructuring and other
North Amerciacn realignment initiative
Financing related adjustments
Amortization of inventory purchase price accounting adjustments
Home outfitters onerous lease provision
Rforeign exhange adjustment
Adjustments to sahre of net loss in joint ventures
Loyalty Zellers adjustments
Tax related adjustments
Total normalization adjustments
Normalized Net Income
Earnings per Share Normalized
(C$ / share)
EBITDAR
Rent, net (included in S,G & A Expenses)
(C$ MM)
(C$ MM)
Margins
EBITDAR Margin
EBITDA Margin
EBIT Margin
Return on Equity
Hudson's Bay
Investing Activities
CAPEX
Other
Investing Cash Flow
Financing Activities
Revolver Issuance / (Repayment)
Term Debt Issuance / (Repayment)
Finance Lease Issuance / (Repayment)
Common Shares Issuance/ (Buy-Back)
Common Dividends
Financing Cash Flow
Hudson's Bay
Balance Sheet
(C$ Millions)
ASSETS
Cash
Accounts Receivable
Inventory
Other
Total Current Assets
Net PP&E
Intangible Assets
Investment in Joint Ventures
Deferred Tax Assets
Pension and employee benefits
Other
Total Assets
Hudson's Bay
Depreciation Sche
(C$ Millions)
11 years
20 years
$600.0
$600.0
$600.0
$600.0
$600.0
Total Depreciation
Hudson's Bay
26.5%
20.0%
UCC Beginning
Plus: New Capex
1/2 of New Capex
UCC After New Capex (1/2 Year)
Less: CCA Available and Used
UCC Ending
Hudson's Bay
(days)
(C$ MM)
(C$ MM)
(days)
(days)
(days)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
Hudson's Bay
FINANCING COMPONENT
Cash
Amount Outstanding - Beginning
Change in Cash
Amount Outstanding - Ending
Interest Rate
Annual Interest Income
Interest Rate
Annual Interest Expense
Finance Leases
Amount Outstanding - Beginning
Additions / (Repayments)
Amount Outstanding - Ending
Interest Rate
Annual Interest Expense
US Term Loan B (due Sep 2022)
Amount Outstanding - Beginning
Additions / (Repayments)
Amount Outstanding - Ending
Interest Rate
Annual Interest Expense
Lord & Taylor Mortgage (due Sep 2017)
Amount Outstanding - Beginning
Additions / (Repayments)
Amount Outstanding - Ending
Interest Rate
Annual Interest Expense
Saks Mortgage (due Dec 2034)
Amount Outstanding - Beginning
Additions / (Repayments)
Amount Outstanding - Ending
Interest Rate
Annual Interest Expense
Hudson's Bay
(C$ Millions)
Hudson's Bay
Shareholders' Equity S
(C$ Millions)
Common Shares
Amount Outstanding - Beginning
New Issuance / (Buy-Back)
Amount Outstanding - Ending
Dividend Payout Rate
Net Income
Common Dividend
Retained Earnings
Amount Outstanding - Beginning
Net Income
Common Dividend
Amount Outstanding - Ending
Shares Outstanding
Cost of Equity
Average Stock Price
Fully Diluted Shares O/S (MM) - Beginning
New Issuance / (Buy-Back)
Stock Option Grants
Fully Diluted Shares O/S (MM) - Ending
Average Fully Diluted Shares O/S
Hudson's Bay
Financial Summ
(C$ Millions)
Financial Summary
Gross Profit
EBITDA
EBIT
EBIT adjusted
Capital Expenditures
Total Debt
Net Debt
Total Debt - HBC Retail Operations
Net Debt - HBC Retail Operations
Interest Expense
Total Market Capitalization
Total Book Capitalization
Net Revenue
EBIT
EBT
Net Income
Total Assets
Dupont Analysis
ROE
Leverage
ROA
Asset Turnover
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$ MM)
(C$
(C$
(C$
(C$
(C$
MM)
MM)
MM)
MM)
MM)
2014A
2015A
254.64
227.18
285.00
290.70
296.51
302.44
308.49
32,081.00
49,133.00
50,533.27
51,501.58
51,684.01
51,917.23
52,186.16
2.70%
2.50%
2016F
2.50%
2017F
2.50%
2018F
2.50%
2019F
2.30%
2020F
2.30%
8,169.0
11,162.0
14,762.0
15,345.8
15,708.2
16,063.2
16,469.4
8,169.0
11,162.0
14,762.0
15,345.8
15,708.2
16,063.2
16,469.4
2014A
32,081.0
2015A
49,133.0
2016F
2017F
2018F
2019F
2020F
50,533.3
2.00%
51,501.6
2.00%
51,684.0
2.00%
51,917.2
2.00%
52,186.2
2.00%
59.9%
59.9%
59.5%
59.5%
58.00%
58.0%
58.00%
58.0%
57.50%
57.5%
57.50%
57.5%
57.50%
57.5%
86.0
82.8
108.5
110.7
112.9
115.0
117.3
86.0
82.8
108.5
110.7
112.9
115.0
117.3
$86.6
$83.3
$109.1
$111.3
$113.5
$115.5
$117.8
4,893.0
4,893.0
6,638.0
6,638.0
8,561.98
8,562.0
8,900.56
8,900.6
9,032.19
9,032.2
9,236.35
9,236.3
9,469.88
9,469.9
2,759.0
2,759.0
4,066.0
4,066.0
5,484.94
5,484.9
5,701.84
5,701.8
5,836.48
5,836.5
5,968.40
5,968.4
6,119.30
6,119.3
$7,652.0
$10,704.0
$14,046.9
$14,602.4
$14,868.7
$15,204.8
$15,589.2
2015A
2016F
Projected
2017F
2018F
2019F
2020F
8,169.0
8,169.0
11,162.0
11,162.0
14,762.0
14,762.0
15,345.8
15,345.8
15,708.2
15,708.2
16,063.2
16,063.2
16,469.4
16,469.4
4,893.0
2,759.0
7,652.0
6,638.0
4,066.0
10,704.0
8,562.0
5,484.9
14,046.9
8,900.6
5,701.8
14,602.4
9,032.2
5,836.5
14,868.7
9,236.3
5,968.4
15,204.8
9,469.9
6,119.3
15,589.2
0.0
517.0
0.0
458.0
0.0
715.1
0.0
743.4
0.0
839.5
0.0
858.5
0.0
880.2
0.0
0.0
0.0
0.0
308.0
344.0
481.0
168.0
516.0
(139.0)
164.0
0.0
460.0
707.0
0.0
45.0
(2.0)
4.0
0.0
475.0
287.1
0.0
0.0
25.0
0.0
0.0
505.0
263.4
0.0
0.0
25.5
0.0
0.0
535.0
330.0
0.0
0.0
26.0
0.0
0.0
565.0
319.5
0.0
0.0
26.5
0.0
0.0
580.0
326.7
262.0
219.0
188.0
519.0
173.6
113.6
169.2
94.2
172.4
157.6
175.2
144.3
177.5
149.2
(19.0)
0.0
(19.0)
132.0
0.0
132.0
0.0
30.1
30.1
0.0
25.0
25.0
97.0
(55.2)
41.8
102.2
(64.0)
38.2
92.9
(53.3)
39.5
$238.0
$387.0
$83.5
$69.2
$115.8
$106.0
$109.7
186.0
$1.28
189.5
$2.04
193.0
$0.43
193.0
$0.36
193.0
$0.60
193.0
$0.55
193.0
$0.57
(261)
84
(4)
47
24
10
(12)
(18)
(7)
(137)
(134.00)
(333.00)
(98.00)
73.00
31.00
12.00
23.00
37.00
53.00
1.00
(9.00)
32.00
(20.00)
(332.00)
$101.0
$55.0
$83.5
$69.2
$115.8
$106.0
$109.7
$0.54
$0.29
$0.43
$0.36
$0.60
$0.55
$0.57
774.0
257.0
888.0
430.0
1,471.1
756.0
1,499.4
756.0
1,595.5
756.0
1,614.5
756.0
1,636.2
756.0
9.5%
6.3%
5.9%
9.6%
8.0%
4.1%
6.3%
12.5%
10.0%
4.8%
1.9%
2.7%
9.8%
4.8%
1.7%
2.2%
10.2%
5.3%
2.1%
3.5%
10.1%
5.3%
2.0%
3.1%
9.9%
5.3%
2.0%
3.1%
2015A
2016F
2017F
Projected
2018F
2019F
2020F
18.0
83.5
475.0
30.1
(2.0)
(75.1)
511.5
69.2
505.0
25.0
25.0
(106.3)
517.8
115.8
535.0
(55.2)
25.5
(42.1)
579.1
106.0
565.0
(64.0)
26.0
(60.0)
573.0
109.7
580.0
(53.3)
26.5
(61.1)
601.8
547.0
448.0
(600.0)
45.0
(555.0)
(600.0)
0.0
(600.0)
(600.0)
0.0
(600.0)
(600.0)
0.0
(600.0)
(600.0)
0.0
(600.0)
(848.0)
(138.0)
(444.0)
213.0
(25.0)
0.0
(38.6)
(294.6)
348.0
(352.0)
(4.1)
0.0
(38.6)
(46.7)
64.0
0.0
(4.5)
0.0
(38.6)
20.9
70.5
0.0
(4.9)
0.0
(38.6)
27.0
42.1
0.0
(5.3)
0.0
(38.6)
(1.8)
147.0
21.0
168.0
168.0
339.0
507.0
(338.1)
507.0
168.9
(128.9)
168.9
40.0
(0.0)
40.0
40.0
0.0
40.0
40.0
0.0
40.0
40.0
2016F
2017F
Projected
2018F
441.0
2015A
2019F
2020F
168.0
212.0
2,319.0
100.0
2,799
507.0
512.0
3,415.0
194.0
4,628.0
168.9
369.5
3,707.1
194.0
4,439.5
40.0
385.1
3,864.3
194.0
4,483.4
40.0
394.2
3,921.5
194.0
4,549.7
40.0
403.1
4,010.1
194.0
4,647.2
40.0
412.2
4,100.3
194.0
4,746.4
4,606.0
1,313.0
0.0
240.0
149.0
15.0
$9,122.0
5,154.0
1,774.0
658.0
253.0
166.0
16.0
$12,649.0
5,279.0
1,774.0
613.0
253.0
166.0
16.0
$12,540.5
5,374.0
1,774.0
613.0
253.0
166.0
16.0
$12,679.4
5,439.0
1,774.0
613.0
253.0
166.0
16.0
$12,810.7
5,474.0
1,774.0
613.0
253.0
166.0
16.0
$12,943.2
5,494.0
1,774.0
613.0
253.0
166.0
16.0
$13,062.4
242.0
4.0
19.0
945.0
934.0
444.0
7.0
25.0
1,494.0
1,426.0
0.0
352.0
4.1
1,568.5
1,426.0
348.0
0.0
4.5
1,635.0
1,426.0
412.0
0.0
4.9
1,659.2
1,426.0
482.4
0.0
5.3
1,696.7
1,426.0
524.5
0.0
5.8
1,734.9
1,426.0
2,144.0
3,396.0
3,350.6
3,413.5
3,502.1
3,610.5
3,691.2
2,723.0
136.0
189.0
656.0
0.0
800.0
4,504.0
2,729.0
500.0
681.0
887.0
27.0
1,330.0
6,154.0
2,597.0
495.9
681.0
917.1
20.0
1,330.0
6,041.0
2,597.0
491.4
681.0
942.0
20.0
1,330.0
6,061.5
2,597.0
486.5
681.0
886.8
20.0
1,330.0
6,001.4
2,597.0
481.2
681.0
822.8
20.0
1,330.0
5,932.1
2,597.0
475.4
681.0
769.5
20.0
1,330.0
5,873.0
6,648.0
9,550.0
9,391.6
9,474.9
9,503.4
9,542.5
9,564.1
60.0
316.0
1,420.0
678.0
2,474.0
86.0
564.0
1,420.0
1,029.0
3,099.0
86.0
569.0
1,420.0
1,073.9
3,148.9
86.0
594.0
1,420.0
1,104.5
3,204.5
86.0
619.5
1,420.0
1,181.7
3,307.2
86.0
645.5
1,420.0
1,249.2
3,400.7
86.0
672.0
1,420.0
1,320.3
3,498.3
$9,122.0
$12,649.0
$12,540.5
$12,679.4
$12,810.7
$12,943.2
$13,062.4
0.000
0.000
0.000
0.000
0.000
0.000
0.000
2016F
2017F
2018F
2019F
2020F
2015A
$344.0
$460.0
$344.0
$460.0
$460.0
$460.0
$460.0
$460.0
$460.0
15.0
30.0
15.0
30.0
30.0
15.0
30.0
30.0
30.0
15.0
30.0
30.0
30.0
30.0
$475.0
$505.0
$535.0
$565.0
$580.0
2015A
2016F
2017F
2018F
2019F
2020F
$113.6
$94.2
$157.6
$144.3
$149.2
475.0
60.0
528.6
505.0
168.0
431.2
535.0
254.4
438.2
565.0
323.5
385.8
580.0
378.8
350.4
1,032.0
528.6
0.0
503.4
431.2
0.0
72.3
72.3
365.9
0.0
0.0
385.8
0.0
0.0
350.4
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
503.4
503.4
72.3
72.3
0.0
0.0
0.0
0.0
0.0
0.0
$0.0
$0.0
$365.9
$385.8
$350.4
30.1
25.0
41.8
38.2
39.5
0.0
30.1
30.1
0.0
25.0
25.0
97.0
(55.2)
41.8
102.2
(64.0)
38.2
92.9
(53.3)
39.5
2016
2017
2018
2019
2020
0.0
600.0
300.0
300.0
60.0
$540.0
540.0
600.0
300.0
840.0
168.0
$972.0
972.0
600.0
300.0
1,272.0
254.4
$1,317.6
1,317.6
600.0
300.0
1,617.6
323.5
$1,594.1
1,594.1
600.0
300.0
1,894.1
378.8
$1,815.3
2015A
365
2016F
366
2017F
365
2018F
365
2019F
365
2020F
366
8,169.0
4,893.0
11,162.0
6,638.0
14,762.0
8,562.0
15,345.8
8,900.6
15,708.2
9,032.2
16,063.2
9,236.3
16,469.4
9,469.9
9.5
173.0
70.5
16.7
187.8
82.1
9.2
158.5
67.1
9.2
158.5
67.1
9.2
158.5
67.1
9.2
158.5
67.1
9.2
158.5
67.1
212.0
2,319.0
945.0
1586.0
512.0
3,415.0
1,494.0
2433.0
369.5
3,707.1
1,568.5
2508.1
385.1
3,864.3
1,635.0
2614.4
394.2
3,921.5
1,659.2
2656.5
403.1
4,010.1
1,696.7
2716.5
412.2
4,100.3
1,734.9
2777.6
($847.0)
($75.1)
($106.3)
($42.1)
($60.0)
($61.1)
2016F
2017F
2018F
2019F
2020F
507.0
(338.1)
$168.9
168.9
(128.9)
$40.0
40.0
0.0
$40.0
40.0
0.0
$40.0
40.0
0.0
$40.0
0.6%
$2.0
0.6%
$0.6
0.6%
$0.2
0.6%
$0.2
0.6%
$0.2
40.0
467.0
40.0
128.9
40.0
0.0
40.0
0.0
40.0
0.0
2015A
$507.0
511.5
(555.0)
188.0
(38.6)
$105.9
$444.0
444.0
(444.0)
$0.0
517.8
(600.0)
(356.1)
(38.6)
($476.9)
0.0
348.0
$348.0
579.1
(600.0)
(4.5)
(38.6)
($64.0)
573.0
(600.0)
(4.9)
(38.6)
($70.5)
601.8
(600.0)
(5.3)
(38.6)
($42.1)
348.0
64.0
$412.0
412.0
70.5
$482.4
482.4
42.1
$524.5
4.8%
$10.7
$525.0
$617.0
$349.0
$1,760.0
$10
4.8%
$8.4
4.8%
$18.3
4.8%
$21.6
4.8%
$24.3
525.0
(25.0)
$500.0
500.0
(4.1)
$495.9
495.9
(4.5)
$491.4
491.4
(4.9)
$486.5
486.5
(5.3)
$481.2
9.0%
$45.9
9.0%
$44.6
9.0%
$44.2
9.0%
$43.8
9.0%
$43.4
617.0
0.0
$617.0
617.0
0.0
$617.0
617.0
0.0
$617.0
617.0
0.0
$617.0
617.0
0.0
$617.0
3.8%
$23.1
3.8%
$23.1
3.8%
$23.1
3.8%
$23.1
3.8%
$23.1
349.0
0.0
$349.0
349.0
(349.0)
$0.0
0.0
0.0
$0.0
0.0
0.0
$0.0
0.0
0.0
$0.0
3.9%
$13.4
3.9%
$6.7
3.9%
$0.0
3.9%
$0.0
3.9%
$0.0
1,760.0
220.0
$1,980.0
1,980.0
0.0
$1,980.0
1,980.0
0.0
$1,980.0
1,980.0
0.0
$1,980.0
1,980.0
0.0
$1,980.0
4.4%
$82.1
4.4%
$86.9
4.4%
$86.9
4.4%
$86.9
4.4%
$86.9
0.0
0.0
$0.0
0.0
0.0
$0.0
0.0
0.0
$0.0
10.0
(7.0)
$3.0
3.0
(3.0)
$0.0
4.4%
$0.3
4.4%
$0.1
4.4%
$0.0
4.4%
$0.0
4.4%
$0.0
$173.6
$169.2
$172.4
$175.2
$177.5
2014A
143.0
133.0
123.0
110.0
99.0
1,064.0
1,672.0
11 years
96.7
143.0
133.0
123.0
110.0
99.0
96.7
96.7
96.7
96.7
96.7
96.7
96.7
96.7
96.7
96.7
96.7
1,672.0
8.4%
2015A
968.0
989.0
956.0
916.0
885.0
11,459.0
16,173.0
13 years
881.5
968.0
989.0
956.0
916.0
885.0
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
16,173.0
5.1%
2016F
2017F
2018F
2019F
2020F
989.0
956.0
916.0
885.0
11,459.0
956.0
916.0
885.0
11,459.0
916.0
885.0
11,459.0
885.0
11,459.0
11,459.0
15,205.0
14,216.0
13,260.0
12,344.0
11,459.0
13 years
13 years
13 years
13 years
13 years
881.5
881.5
881.5
881.5
881.5
989.0
956.0
916.0
885.0
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
15,205.0
956.0
916.0
885.0
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
14,216.0
916.0
885.0
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
13,260.0
885.0
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
12,344.0
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
881.5
11,459.0
5.1%
5.1%
5.1%
5.1%
5.1%
940.7
127.9
128.9
256.8
10,519.5
78.9
64.1
143.0
481.0
256.8
(128.9)
608.9
707.0
143.0
(64.1)
785.9
30.0
55.0
437.0
522.0
(367.0)
155.0
64.0
194.0
1,603.0
1,861.0
(1,336.0)
525.0
30.0
13.8
31.8
36.8
14.2
8.7%
64.0
48.5
33.1
38.1
48.9
9.0%
81%
19%
10,085.3
533.8
434.2
968.0
9,608.1
511.8
477.2
989.0
9,139.6
487.5
468.5
956.0
8,687.4
463.8
452.2
916.0
8,243.2
440.8
444.2
885.0
287.1
968.0
(434.2)
820.9
263.4
989.0
(477.2)
775.1
330.0
956.0
(468.5)
817.5
319.5
916.0
(452.2)
783.2
326.7
885.0
(444.2)
767.5
2016F
2017F
2018F
2019F
2020F
3,705.0
10,519.5
14,224.5
3,422.4
17,646.9
2015A
1,420.0
1,420.0
0.0
$1,420.0
1,420.0
0.0
$1,420.0
1,420.0
0.0
$1,420.0
1,420.0
0.0
$1,420.0
1,420.0
0.0
$1,420.0
46.2%
83.5
55.8%
69.2
33.3%
115.8
36.4%
106.0
35.2%
109.7
$38.6
1,029.0
189.50
1,029.0
$83.5
(38.6)
$1,073.9
$38.6
1,073.9
$69.2
(38.6)
$1,104.5
$38.6
1,104.5
$115.8
(38.6)
$1,181.7
$38.6
1,181.7
$106.0
(38.6)
$1,249.2
$38.6
1,249.2
$109.7
(38.6)
$1,320.3
8.8%
$18.13
8.8%
$19.73
8.8%
$21.48
8.8%
$23.37
8.8%
$25.44
189.5
0.0
3.5
193.0
193.0
0.0
0.0
193.0
193.0
0.0
0.0
193.0
193.0
0.0
0.0
193.0
193.0
0.0
0.0
193.0
191.3
193.0
193.0
193.0
193.0
2016F
2017F
2018F
2019F
2020F
262.0
3,422.4
5,430.0
8,169.0
481.0
219.0
$238.0
$9,122.0
2015A
$4,524.0
$458.0
$707.0
$785.9
0.0
3,705.0
3,198.0
1,596.0
1,089.0
188.0
3,422.4
6,297.0
11,162.0
707.0
519.0
$387.0
$12,649.0
$6,200.1
$715.1
$287.1
$820.9
600.0
3,449.0
3,280.1
1,120.0
951.1
173.6
3,422.4
6,429.0
14,762.0
287.1
113.6
$83.5
$12,540.5
$6,445.2
$743.4
$263.4
$775.1
600.0
3,440.9
3,400.9
1,460.9
1,420.9
169.2
3,422.4
6,605.4
15,345.8
263.4
94.2
$69.2
$12,679.4
$6,676.0
$839.5
$330.0
$817.5
600.0
3,500.4
3,460.4
1,520.4
1,480.4
172.4
3,422.4
6,767.6
15,708.2
330.0
157.6
$115.8
$12,810.7
$6,826.9
$858.5
$319.5
$783.2
600.0
3,566.0
3,526.0
1,586.0
1,546.0
175.2
3,422.4
6,926.7
16,063.2
319.5
144.3
$106.0
$12,943.2
$6,999.5
$880.2
$326.7
$767.5
600.0
3,602.7
3,562.7
1,622.7
1,582.7
177.5
3,422.4
7,061.0
16,469.4
326.7
149.2
$109.7
$13,062.4
6.6%
1.9
3.6%
1.0
1.3%
2.0
0.7%
1.2
1.1%
1.9
0.5%
1.2
1.7%
1.9
0.9%
1.2
1.5%
1.9
0.8%
1.2
1.6%
1.9
0.8%
1.3
3.5%
6.3%
0.7
0.7
0.6%
1.9%
0.7
0.4
0.5%
1.7%
0.7
0.4
0.7%
2.1%
0.7
0.5
0.7%
2.0%
0.7
0.5
0.7%
2.0%
0.7
0.5
36.6%
40.5%
4.1%
$2.04
$0.29
6.6%
3.6%
3.8
0.6
32.3%
42.0%
4.8%
$0.43
$0.43
1.3%
0.7%
1.7
0.5
4.0%
42.0%
4.8%
$0.36
$0.36
1.1%
0.5%
1.6
0.5
2.4%
42.5%
5.3%
$0.60
$0.60
1.7%
0.9%
1.9
0.5
2.3%
42.5%
5.3%
$0.55
$0.55
1.5%
0.8%
1.8
0.5
2.5%
42.5%
5.3%
$0.57
$0.57
1.6%
0.8%
1.8
0.5
Term.
308.49
52,186.16
2.30%
16,469.4
16,469.4
Term.
52,186.2
2.00%
57.00%
57.0%
117.3
117.3
$117.8
9,387.53
9,387.5
6,119.30
6,119.3
$15,506.8
Term.
16,469.4
16,469.4
9,387.5
6,119.3
15,506.8
0.0
962.5
0.0
0.0
27.1
0.0
0.0
600.0
389.6
0.0
389.6
103.2
0.0
103.2
$286.3
$286.3
1,718.5
756.0
10.4%
5.8%
481.2
(5.8)
$475.4
617.0
0.0
$617.0
0.0
0.0
$0.0
1,980.0
0.0
$1,980.0
0.0
0.0
$0.0
Cost of Equity
Risk Free Rate
Beta
Market Risk Premium
Cost of Equity (CAPM)
Earnings per Share 2015
Normalized Dividend Payout
Annual Dividend Normalized
Share Price
Dividend Yield
Growth Rate
Cost of Equity (DGM)
Cost of Debt
Risk Premium
Cost of Equity (BYPRP)
WACC
MV of Equity
Cost of Equity (Average)
Weight of Equity
BV of Debt
Cost of Debt @ tax rate=26.5%
Weight of Debt
WACC
1.09%
1.32
6.25%
9.32%
2.13
34%
0.72
$18.06
4.01%
4.60%
8.61%
5.07%
3.50%
8.57%
3,422
8.84%
48.02%
3,705
3.73%
51.98%
6.18%
Risk free rate is the latest Government of Canada 10yr bond yield
Beta is raw beta from Bloomberg
Market Risk Premium from Dr. Aswath Damodran, Stern School of Business at NYU updated
Normalized Dividend Payout ratio based on peer average as HBC has a low payout ratio wh
Growth rate assumed to be LT nominal GDP growth rate (1992-2014 Avg Real GDP growth 2
26.5%
20.0%
UCC Beginning
Plus: New Capex
1/2 of New Capex
UCC After New Capex (1/2 Year)
Less: CCA Available and Used
UCC Ending
Hudson's Bay C
Interest expense
Net Borrowing
FCFE
check
2017F
2018F
2019F
2020F
$287.1
$263.4
$330.0
$319.5
$326.7
475.0
60.0
702.1
505.0
168.0
600.4
535.0
254.4
610.6
565.0
323.5
561.0
580.0
378.8
527.9
1,032.0
702.1
0.0
329.9
329.9
270.5
0.0
0.0
610.6
0.0
0.0
561.0
0.0
0.0
527.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
329.9
329.9
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
$0.0
$270.5
$610.6
$561.0
$527.9
76.1
69.8
87.4
84.7
86.6
0.0
76.1
76.1
71.7
(1.9)
69.8
161.8
(74.4)
87.4
148.7
(64.0)
84.7
139.9
(53.3)
86.6
2017F
2018F
2019F
2020F
2016F
0.0
600.0
300.0
300.0
60.0
$540.0
540.0
600.0
300.0
840.0
168.0
$972.0
972.0
600.0
300.0
1,272.0
254.4
$1,317.6
1,317.6
600.0
300.0
1,617.6
323.5
$1,594.1
1,594.1
600.0
300.0
1,894.1
378.8
$1,815.3
2017F
2018F
2019F
2020F
Term.
83.5
(47.0)
475.0
30.1
(75.1)
(600.0)
(256.0)
(389.5)
69.2
(25.0)
505.0
25.0
(106.3)
(600.0)
(8.1)
(140.3)
115.8
(25.5)
535.0
(55.2)
(42.1)
(600.0)
59.5
(12.4)
106.0
(26.0)
565.0
(64.0)
(60.0)
(600.0)
65.6
(13.4)
109.7
(26.5)
580.0
(53.3)
(61.1)
(600.0)
36.8
(14.5)
286.3
(27.1)
600.0
0.0
0.0
(600.0)
0.0
259.3
173.6
(256.0)
(389.5)
0.0
97.5
(8.1)
(140.3)
0.0
107.5
59.5
(12.4)
(0.0)
128.8
65.6
(13.4)
0.0
130.4
36.8
(14.5)
(0.0)
0.0
0.0
259.3
0.0
Hudson's Bay
PV of Cash Flows
PV of Terminal Year
Enterprise Value
Less Net Debt (1/31/17)
Equity Value
Shares O/S (MM) - (1/31/17)
Equity Value per Share
6.2%
PV of Cash Flows
PV of Terminal Year
Enterprise Value
Less Net Debt (1/31/17)
Equity Value
Shares O/S (MM) - (1/31/17)
Equity Value per Share
6.7%
PV of Cash Flows
PV of Terminal Year
Enterprise Value
Less Net Debt (1/31/17)
Equity Value
Shares O/S (MM) - (1/31/17)
Equity Value per Share
7.2%
PV of Cash Flows
PV of Terminal Year
Enterprise Value
Less Net Debt (1/31/17)
Equity Value
Shares O/S (MM) - (1/31/17)
Equity Value per Share
141
9,715
$9,856
1%
99%
100%
3,280
$6,576
189.50
$34.70
139
7,669
7,808
2%
98%
100%
3,280
$4,527
189.50
$23.89
137
6,290
6,427
2%
98%
100%
3,280
$3,146
189.50
$16.60
134
5,299
5,434
3,280
$2,153
189.50
$11.36
2%
98%
100%
4.1%
141
12,788
12,929
141
18,701
18,842
5.1%
1%
99%
100%
141
34,790
34,931
3,280
$9,648
3,280
$15,562
3,280
$31,651
189.50
$50.92
189.50
$82.12
189.50
$167.02
139
9,511
9,650
1%
99%
100%
139
12,519
12,658
1%
99%
100%
139
18,308
18,447
3,280
$6,370
3,280
$9,378
3,280
$15,167
189.50
$33.61
189.50
$49.49
189.50
$80.04
137
7,508
7,645
2%
98%
100%
137
9,312
9,449
1%
99%
100%
137
12,257
12,394
3,280
$4,365
3,280
$6,169
3,280
$9,114
189.50
$23.03
189.50
$32.55
189.50
$48.09
134
6,159
6,294
2%
98%
100%
134
7,352
7,487
2%
98%
100%
134
9,118
9,253
3,280
$3,013
3,280
$4,206
3,280
$5,973
189.50
$15.90
189.50
$22.20
189.50
$31.52
0%
100%
100%
1%
99%
100%
1%
99%
100%
1%
99%
100%
Hudson's Bay
PV of Cash Flows
PV of Terminal Year
Enterprise Value
Equity Value
Shares O/S (MM) - (1/31/17)
Equity Value per Share
8.8%
PV of Cash Flows
PV of Terminal Year
Enterprise Value
Equity Value
Shares O/S (MM) - (1/31/17)
Equity Value per Share
9.3%
PV of Cash Flows
PV of Terminal Year
Enterprise Value
Equity Value
Shares O/S (MM) - (1/31/17)
Equity Value per Share
9.8%
PV of Cash Flows
PV of Terminal Year
Enterprise Value
Equity Value
Shares O/S (MM) - (1/31/17)
Equity Value per Share
(529)
3,819
$3,290
-16%
116%
100%
$3,290
189.50
$17.36
(527)
3,383
2,857
-18%
118%
100%
$2,857
189.50
$15.07
(525)
3,025
2,501
-21%
121%
100%
$2,501
189.50
$13.20
(522)
2,726
2,204
$2,204
189.50
$11.63
-24%
124%
100%
4.1%
(529)
4,270
$3,741
(529)
4,841
$4,312
5.1%
-12%
112%
100%
(529)
5,590
$5,061
$3,741
$4,312
$5,061
189.50
$19.74
189.50
$22.76
189.50
$26.71
(527)
3,741
3,214
-16%
116%
100%
(527)
4,182
3,656
-14%
114%
100%
(527)
4,742
4,215
$3,214
$3,656
$4,215
189.50
$16.96
189.50
$19.29
189.50
$22.24
(525)
3,314
2,790
-19%
119%
100%
(525)
3,664
3,140
-17%
117%
100%
(525)
4,097
3,572
$2,790
$3,140
$3,572
189.50
$14.72
189.50
$16.57
189.50
$18.85
(522)
2,964
2,441
-21%
121%
100%
(522)
3,247
2,725
-19%
119%
100%
(522)
3,590
3,067
$2,441
$2,725
$3,067
189.50
$12.88
189.50
$14.38
189.50
$16.19
-10%
110%
100%
-12%
112%
100%
-15%
115%
100%
-17%
117%
100%
WACC
6.0%
6.0 x
PV of 5 yr Cash Flows
PV of Terminal Year
Enterprise Value
Less Net Debt (1/31/17)
Equity Value
Shares O/S (MM) - (1/31/17)
Equity Value per Share
Stock Price - 09/16/16
C$MM
$139
$4,192
$4,331
3,280
$1,051
189.50
$5.55
$18.06
Enterpri
W
A
C
C
$4,331
6.0%
6.5%
7.0%
7.5%
8.0%
1.2%
Equity Valu
W
A
C
C
554.6%
6.0%
6.5%
7.0%
7.5%
8.0%
5.5 x
6.0 x
6.5 x
7.0 x
5.5 x
6.0 x
6.5 x
7.0 x
$ million
Retail EBITDA 2016F
Rent income/(expense) - HBC Real Estate
Retail EBITDA 2016F after adjustments
Multiple
Cap rate
Enterprise Value
Less: Net Debt
Equity Value
HBC ownership
HBC equity value
Shares o/s (million)
HBC equity value per share
% of total equity value
Supporting schedules
Net debt calculation
Short-term loans and borrowings
Long-term loans and borrowings
US Term Loan B
Lord & Taylor Mortgage
Saks Mortgage
Other loans
Long-term loans and borrowings
715
(543)
172
7.25
1,247
951
###
296
100.00%
296
190
1.56
4%
617
349
1,980
3
2,949
###
500
3,449
(169)
3,280
1,120
951
Exchange rates
USD/CAD
EUR/CAD
Peer group EV/EBITDA
HBC CN Equity
JCP US Equity
M US Equity
JWN US Equity
DDS US Equity
KSS US Equity
TJX US Equity
MKS LN Equity
MEDIAN EX HBC
1.32
1.5
5.56
11.56
6.20
6.70
4.44
5.41
10.87
7.25
6.70
Assumptions
Rent Income for HBC Real Estate Assets is from Corporate Investor Presentation Spring 2016. HBC had
time of creation of its JVs or while mortgaging these assets.
Rent expense to HBC Real Estate is a proportionate rent based on HBC's ownership of asset estimated
ownership of the property.
Rent expense to 3rd Party Landlords is from Corporate Investor Presentation Spring 2016
Retail EBITDA 2016F Multiple is based on peer group median
Cap rate is from Corporate Investor Presentation Spring 2016. HBC had used these estimates to value
mortgaging these assets.
Net Debt of JVs is based on latest 1Q2016 financial statements
HBC ownership of JVs and properties is based on latest 1Q2016 financial statements
Adjustments to convert HBC Net Income and SHE to HBC standalone retail operation
Subtract from Net Income and SHE:
Rent on stores owned 100% or through JV
Add to Net Income and SHE:
Interest expense on loans related to the property
355
100
183
40
5.90%
6,017
5.08%
1,969
3.75%
4,880
5.00%
800
3,164
2,853
65.00%
1,854
190
9.79
27%
550
1,419
89.30%
1,267
190
6.68
19%
1,980
2,900
100.00%
2,900
190
15.30
43%
349
451
100.00%
451
190
2.38
7%
158
349
1,980
3,081
3,081
3,239
(75)
3,164
543
543
1,980
349
551
(1)
550
1,980
1,980
349
349
Total Real
Estate
678
4.96%
13,665
6,043
7,622
6,472
190
34.15
96%
resentation Spring 2016. HBC had used these estimates to value the assets at the
BC's ownership of asset estimated by us. This is not a cash expense due to JV or full
had used these estimates to value the assets at the time of creation of its JVs or while
ncial statements
(89)
(183)
(40)
155
4.8%
26
4.8%
87
4.4%
13
3.9%
(76)
(63)
(96)
(27)
(20)
26.5%
(17)
26.5%
(25)
26.5%
(7)
26.5%
(56)
(46)
(71)
(20)
Total
14,913
check
6,994
7,919
6,769
190
35.72
100%
check
-
(543)
282
(261)
(69)
(192)
Canada
US
Europe
Sales
Total Square Footgae
2957000000 18556.03 18556026
6336000000 13897.97 13897974
3738000000
16679 16679000
13031000000
49133000
Hudson
Lord & taylor
Saks
OFF 5th
Home Outfiter
HBC Europe
90
50
38
90
62
131
90
50
38
77
67
0
Hudson
Lord & taylor
Saks
OFF 5th
Home Outfiter
HBC Europe
16006
6898
4741
2595
2214
16679
16123
6898
4499
2117
2444
0
90 CAN
49 US
41
71
69 CAN
0 EUR
159.3552
455.8938
2 455.8938
3 455.8938
159.3552
265.2189
16123
6790
4787
1960
2515
0
thousands)
179.1444 179.1444
137.96 138.5714
118.3947 116.7561
27.49351 27.60563
36.47761 36.44928
177844.4
137960
124763.2
28833.33
35709.68
127320.6
179144.4
137960
118394.7
27493.51
36477.61
0
Sales/square footage
159.3552
455.8938
224.1142
265.2189
Hudson
Lord & taylor
Saks
OFF 5th
Home Outfiter
HBC Europe
Hudson
Lord & taylor
Saks
OFF 5th
Home Outfiter
HBC Europe
179144.4
138571.4
116756.1
27605.63
36449.28
0
1300
Hudson
Lord & taylor
Saks
OFF 5th
Home Outfiter
HBC Europe
Total
2015
90
50
38
90
62
131
461
177844.4
137960
124763.2
28833.33
35709.68
127320.6
2016
90
50
40
99
62
138
479
177844.4
137960
124763.2
28833.33
35709.68
127320.6
2017
90
50
41
103
61
144
489
177844.4
137960
124763.2
28833.33
35709.68
127320.6
reasing footage
ssuming "normal" Saks size
2018
90
50
42
105
61
144
492
177844.4
137960
124763.2
28833.33
35709.68
127320.6
2019
90
50
43
110
60
144
497
177844.4
137960
124763.2
28833.33
35709.68
127320.6
2020
90
50
44
115
60
144
503
177844.4
137960
124763.2
28833.33
35709.68
127320.6
2021
90
50
45
115
60
144
504
177844.4
137960
124763.2
28833.33
35709.68
127320.6
16006000
6898000
5240053
3027500
2178290
18334168
51684011
0.35%
51684.01
16006000
6898000
5364816
3171667
2142581
18334168
51917231
0.45%
51917.23
16006000
6898000
5489579
3315833
2142581
18334168
52186161
0.52%
52186.16
16006000
6898000
5614342
3315833
2142581
18334168
52310924
0.24%
52310.92