Nucor Valuation Analysis

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Nucor Page 1 Nucor Corporation Valuation Analysis of Thin-Slab Caster Mill Change the Red Numbers Only: Key Assumptions in valuation of mill: Operating rate after 1992 85% Price trend per year after 19 -3% Price per ton in 1989 $325 Experience effect on costs 0.9 Production Cost in 1989 250 b= 0.15 Weighted average cost of capita 10% Salvage value of mill in 2000 $0 Valuation Analysis of Mill 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 Tons sold (Thousand 0 0 50 400 650 850 850 850 850 850 850 850 850 850 Cumulative Volume produced 50 450 1100 1950 2800 3650 4500 5350 6200 7050 7900 8750 Price per ton 0 0 325 317 309 301 294 286 279 272 265 259 252 246 Cash cost per ton 0 0 250 250 218 200 189 182 176 172 168 165 162 159 All numbers below are in $Millions Revenues 0 0 16.3 126.8 200.8 256.0 249.6 243.4 237.3 231.4 225.6 220.0 214.5 209.1 Cash costs 0 0 12.5 100.0 141.9 170.0 160.9 154.6 149.7 145.9 142.6 139.9 137.5 135.3 Depreciation 0 0 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 Operating earnings 0 0 -18.8 4.3 36.5 63.5 66.2 66.3 65.1 63.0 60.5 57.6 54.5 51.2 Profit sharing 0 0 -1.9 0.4 3.6 6.4 6.6 6.6 6.5 6.3 6.0 5.8 5.4 5.1 Start-up costs 0 0 15 15 0 0 0 0 0 0 0 0 0 0 Pre-tax income 0 0 -31.9 -11.2 32.8 57.2 59.6 59.7 58.6 56.7 54.4 51.8 49.0 46.1 Tax 0 0 -10.8 -3.8 11.2 19.4 20.3 20.3 19.9 19.3 18.5 17.6 16.7 15.7 EBIAT 0 0 -21.0 -7.4 21.7 37.7 39.3 39.4 38.7 37.4 35.9 34.2 32.4 30.4 Depreciation 0 0 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 22.5 Cash flow ops 0 0 1.5 15.1 44.2 60.2 61.8 61.9 61.2 59.9 58.4 56.7 54.9 52.9 Cash flow ops 0 0 1.5 15.1 44.2 60.2 61.8 61.9 61.2 59.9 58.4 56.7 54.9 52.9 Invest NWC 0 0 -1.6 -11.1 -7.4 -5.5 0.6 0.6 0.6 0.6 0.6 0.6 0.5 21.4 CAPEX -10 -140 -130 0 0 0 0 0 0 0 0 0 0 0 Salvage Value 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Cash flow to Capita -10 -140 -130.2 4.1 36.8 54.7 62.5 62.5 61.8 60.5 59.0 57.3 55.4 74.4 Net Present Value: 19.21 Price Trend Experience 19.21 -0.05 -0.025 0 0.025 0.05 1 ### ### $ (28.4) $ 76.8 $199.3 0.95 ### $(45.7) $ 44.7 $149.9 $272.4 0.9 $(58.4) $ 19.2 $ 109.5 $214.7 $337.3 0.85 $ (1.2) $ 76.5 $ 166.8 $272.0 $394.6 0.8 $ 49.2 $126.8 $ 217.2 $322.3 $444.9

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Transcript of Nucor Valuation Analysis

Nucor Corporation

NucorNucor CorporationValuation Analysis of Thin-Slab Caster MillChange the Red Numbers Only:Key Assumptions in valuation of mill:Operating rate after 199285%Price trend per year after 1989-3%Price per ton in 1989$325Experience effect on costs0.9Production Cost in 1989250b=0.15Weighted average cost of capital10%Salvage value of mill in 2000$0Valuation Analysis of Mill19871988198919901991199219931994199519961997199819992000Tons sold (Thousands)0050400650850850850850850850850850850Cumulative Volume produced504501100195028003650450053506200705079008750Price per ton00325317309301294286279272265259252246Cash cost per ton00250250218200189182176172168165162159All numbers below are in $MillionsRevenues0016.3126.8200.8256.0249.6243.4237.3231.4225.6220.0214.5209.1Cash costs0012.5100.0141.9170.0160.9154.6149.7145.9142.6139.9137.5135.3Depreciation0022.522.522.522.522.522.522.522.522.522.522.522.5Operating earnings00-18.84.336.563.566.266.365.163.060.557.654.551.2Profit sharing00-1.90.43.66.46.66.66.56.36.05.85.45.1Start-up costs0015150000000000Pre-tax income00-31.9-11.232.857.259.659.758.656.754.451.849.046.1Tax00-10.8-3.811.219.420.320.319.919.318.517.616.715.7EBIAT00-21.0-7.421.737.739.339.438.737.435.934.232.430.4Depreciation0022.522.522.522.522.522.522.522.522.522.522.522.5Cash flow ops001.515.144.260.261.861.961.259.958.456.754.952.9Cash flow ops001.515.144.260.261.861.961.259.958.456.754.952.9Invest NWC00-1.6-11.1-7.4-5.50.60.60.60.60.60.60.521.4CAPEX-10-140-13000000000000Salvage Value00000000000000Cash flow to Capital-10-140-130.24.136.854.762.562.561.860.559.057.355.474.4Net Present Value:19.21Price TrendExperience19.21-0.05-0.02500.0250.051$(196.4)$(118.7)$(28.4)$76.8$199.30.95$(123.3)$(45.7)$44.7$149.9$272.40.9$(58.4)$19.2$109.5$214.7$337.30.85$(1.2)$76.5$166.8$272.0$394.60.8$49.2$126.8$217.2$322.3$444.9

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