DISCOUNTED EARNINGS MODEL

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2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028
Earnings 6.47 7.44 8.56 9.84 11.32 13.01 14.31 15.75 17.32 19.05 20.96
PV Earnings 0 6.64 6.82 7.00 7.19 7.38 7.25 7.12 7.00 6.87 6.75
Present Value 160.41

2013 2014 2015 2016 2017 2018

earnings (In $B) 1.49 2.94 3.69 10.22 15.93 20
percent change 0.97 0.26 1.77 0.56 0.26
average 0.76
Terminal Value 1.15 Next 5 years Growth
314.38 1.1 5 to 10 years Growth
90.38 0.12 Required ROR
15 Terminal multiple
 DISCOUNTED CASH FLOW MODEL
1
0.9
Name of stock FB 0.8
Operating cash 0.7
flow ttm $ 27.956
0.6
Total debt
Short + long term $ - 0.5
Cash and short 0.4
term investments $ 42.309 0.3
(in billions) Shares outstanding 2.895
0.2
CF Growth 1-3 yr 0.24
CF Growth 4-6 yr 0.15 0.1
CF Growth 7-10yr 0.15 0
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5
Year 2019 2020 2021 2022 2023
Projected CF $ 34.67 $ 42.99 $ 53.30 $ 48.90 $ 56.23
(in billions) PV Cash Flow $ 33.01 $ 38.99 $ 46.04 $ 40.23 $ 44.06

ttm up to mid 2012 2013 2014 2015 2016

(in billions) 0.569 2.01 3.21 6.23 10.28
2.53251318 0.59701493 0.94080997 0.65008026
-0.7642599 0.5758567 -0.30902065
-0.2594444

cf growth1 0.17336557 0.12838684 0.0950776 0.07041025 0.0521427

Year 2019 2020 2021 2022 2023

Projected CF $ 32.80 $ 37.01 $ 40.53 $ 43.39 $ 45.65
(in billions) PV Cash Flow $ 31.24 $ 33.57 $ 35.01 $ 35.69 $ 35.77
 cf growth1 0.13979718 0.08348177 0.04985227 0.02976995 0.01777753

Year 2019 2020 2021 2022 2023

Projected CF $ 31.86 $ 34.52 $ 36.25 $ 37.32 $ 37.99
(in billions) PV Cash Flow $ 30.35 $ 31.31 $ 31.31 $ 30.71 $ 29.76
H FLOW MODEL

PV of 10 yr
$ 494.14 cash flow (in billions)
Intrinsic value
$ 170.69 before cash & debt
Row 25 0 Less debt per share
14.65 Plus cash per share
Final intrisic value
$ 185.34 per share
2018 Current Year
0.05 Discount rate

.5 4 4.5 5 5.5
2024 2025 2026 2027 2028
$ 64.66 $ 74.36 $ 85.52 $ 98.35 $ 113.10
$ 48.25 $ 52.85 $ 57.88 $ 63.39 $ 69.43

2017 2018
14.31 17.66
0.39202335 0.23410203
-0.39696162 -0.40283652
PV of 20 yr
$ 581.62 cash flow (in billions)
Intrinsic value
$ 200.91 before cash & debt
0 Less debt per share
14.65 Plus cash per share
Final intrisic value
$ 215.56 per share
2018 Current Year
0.05 Discount rate

0.03861457 0.02859624 0.0211771 0.015683 0.011614

2024 2025 2026 2027 2028 2029 2030

$ 47.41 $ 48.77 $ 49.80 $ 50.58 $ 51.17 $ 51.17 $ 51.17
$ 35.38 $ 34.66 $ 33.71 $ 32.61 $ 31.41 $ 29.92 $ 28.49
 PV of 20 yr
$ 469.25 cash flow (in billions)
Intrinsic value
$ 162.09 before cash & debt
0 Less debt per share
14.65 Plus cash per share
Final intrisic value
$ 176.74 per share
2018 Current Year
0.05 Discount rate

0.01061609 0.00633954 0.00378574 0.002261 0.00135001

2024 2025 2026 2027 2028 2029 2030

$ 38.39 $ 38.63 $ 38.78 $ 38.87 $ 38.92 $ 38.92 $ 38.92
$ 28.65 $ 27.46 $ 26.25 $ 25.05 $ 23.89 $ 22.76 $ 21.67
 2031 2032 2033 2034 2035 2036 2037
$ 51.17 $ 51.17 $ 51.17 $ 51.17 $ 51.17 $ 51.17 $ 51.17
$ 27.14 $ 25.84 $ 24.61 $ 23.44 $ 22.32 $ 21.26 $ 20.25
 2031 2032 2033 2034 2035 2036 2037
$ 38.92 $ 38.92 $ 38.92 $ 38.92 $ 38.92 $ 38.92 $ 38.92
$ 20.64 $ 19.66 $ 18.72 $ 17.83 $ 16.98 $ 16.17 $ 15.40
 2038
$ 51.17
$ 19.29
 2038
$ 38.92
$ 14.67