© Barry M Frohlinger 1981 - 2012
Cash Flow Profiles
© Barry M Frohlinger, Inc. copyright 1981 - 2017 1
Cash Flow Profiles
• Attach are the cash flows of 20 companies – Pepsi – Tesla – Avon – Manitowic is a Capital Goods Manufacturer – Bunge is a Leading Agribusiness and Food Company – Apple – Nokia – RiteAid is a leading drugstore chain – Flextronics – Disney – Navistar is a manufacturer of trucks, engines and school buses – Freescale was one of the first semiconductor companies, spin off by Motorola in 2003 – Costco – Walmart – JC Penney – P&G – Exxon Mobil – CB&I is a Dutch Engineering and Construction Firm – CVS – Rosneft
© Barry M Frohlinger, Inc. copyright 1981 - 2017 2
Cash Flow Profiles
• Label the Cash Flow Profile of each of these firms as – Mature – Cyclical – Volatile – Growing – Declining/Troubled – Other
• Identify anything noteable about the cash flows for each of these firms
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Pepsi, Revenue
3
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Pepsi, EBITDA
4
© Barry M Frohlinger, Inc. copyright 1981 - 2017 5
Pepsi, CFO, CapX and Div
0
2000
4000
6000
8000
10000
12000
98 99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
© Barry M Frohlinger, Inc. copyright 1981 - 2017 6
Pepsi
0
2000
4000
6000
8000
10000
12000
98 99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
CfopsResidual
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Tesla, Revenue
7
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Tesla, EBITDA
8
© Barry M Frohlinger, Inc. copyright 1981 - 2017 9
Tesla
-1000
-500
0
500
1000
1500
2000
2009 2010 2011 2012 2013 2014 2015 2016
CfopsCapXBorrowing
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Tesla
10
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Tesla
11
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Avon Revenue
12
© Barry M Frohlinger, Inc. copyright 1981 - 2017 13
Avon
© Barry M Frohlinger, Inc. copyright 1981 - 2017 14
Avon
-200
0
200
400
600
800
1000
Cfops 324 449 324 748 565 745 883 896 796 590 748 755 689 656 556 540 360 91Residual -47 60 -48 411 247 381 363 375 303 -15 19 94 -26 -24 -14 236 118 -110
98 99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Manitowic
15
© Barry M Frohlinger, Inc. copyright 1981 - 2017 16
Manitowic
© Barry M Frohlinger, Inc. copyright 1981 - 2017 17
Manitowic
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Balance Sheet Structure
18
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Balance Sheet Structure
19
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Returns
20
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Returns
21
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Manitowic
22
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Towers, with 2015 LT Free Cash Flow
23
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Bunge
24
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Bunge
25
© Barry M Frohlinger, Inc. copyright 1981 - 2017 26
Bunge
-3000
-2000
-1000
0
1000
2000
3000
Cfops 37 -521 205 128 -41 802 382 -289 -411 254 -368 -244 261 -457 222 139 610 190CapX 140 184 226 240 304 437 522 503 658 896 918 107 112 109 104 839 649 784Dividends 0 0 8 37 42 51 63 74 34 81 78 78 140 151 167 187 207 223
99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
© Barry M Frohlinger, Inc. copyright 1981 - 2017 27
Bunge
-4000
-3000
-2000
-1000
0
1000
2000
3000
Cfops 37 -521 205 128 -41 802 382 -289 -411 254 -368 -244 261 -457 222 139 610 190Residual -103 -705 -29 -149 -387 314 -203 -866 -110 156 -136 -359 145 -170 101 373 -246 897
99 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Bunge [Sales 42,679]
28
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Bunge [Sales 42,679, EBITDA 1,671 Op Profit 1,124 ]
29
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Bunge [Avg FCF -90]
0
200
400
600
800
1000
1200
1400
1600
1800
2017 2018 2019 2020 2021 thereafter
30
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Bunge Unused
31
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Apple Revenue
32
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Apple EBITDA
33
© Barry M Frohlinger, Inc. copyright 1981 - 2017 34
Apple
© Barry M Frohlinger, Inc. copyright 1981 - 2017 35
Apple
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Apple, 2016
36
© Barry M Frohlinger, Inc. copyright 1981 - 2017 37
Nokia
-1000
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Cfops 6547 5814 5244 4343 4144 4478 7882 3197 3247 4774 1137 -354 72 1275 507Capital Spending 1041 437 432 548 607 650 715 889 531 679 597 461 407 311 314Dividends 1396 1348 1378 1413 1531 1553 1760 2048 1546 1519 1536 755 71 1392 512
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
© Barry M Frohlinger, Inc. copyright 1981 - 2017 38
Nokia
-4000
-2000
0
2000
4000
6000
8000
10000
Cfops 6547 5814 5244 4343 4144 4478 7882 3197 3247 4774 1137 (354) 72Residual 4110 4029 3434 2382 2006 2275 5407 260 1170 2576 -996 (1,570 -408
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Nokia
39
© Barry M Frohlinger, Inc. copyright 1981 - 2017 40
Rite Aid
-800
-600
-400
-200
0
200
400
600
800
1000
Cfops -701 16 305 228 518 417 309 79 360 -325 396 267 820 702Capital Spending 133 175 105 251 191 288 334 687 461 184 162 215 315 334Dividends 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
© Barry M Frohlinger, Inc. copyright 1981 - 2017 41
Rite Aid
-1,000
-800
-600
-400
-200
0
200
400
600
800
1,000
Cfops -701 16 305 228 518 417 309 79 360 -325 396 267 820 702 Residual -833 -159 201 -23 327 129 -25 -609 -101 -509 234 52 505 468
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
© Barry M Frohlinger, Inc. copyright 1981 - 2017 42
Rite Aid
-1000
-500
0
500
1000
1500
EBITDA 338 396 860 936 980 890 876 911 905 866 966 1033 1214 1209Funds Flow -35 12 190 215 211 201 198 290 217 200 199 255 688 747Cfops -701 16 305 228 518 417 309 79 360 -325 396 267 820 702
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
© Barry M Frohlinger, Inc. copyright 1981 - 2017 43
Flextronics
-600
-400
-200
0
200
400
600
800
1000
1200
1400
1600
Cfops -470 -34 161 859 608 188 724 549 276 1043 1317 799 804 1115 1216CAPX 711 462 322 330 208 181 290 251 569 328 462 176 437 489 609Dividends 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
© Barry M Frohlinger, Inc. copyright 1981 - 2017 44
Flextronics
-1500
-1000
-500
0
500
1000
1500
Cfops -470 -34 161 859 608 188 724 549 276 1043 1317 799 804 1115 1216 Residual -1181 (496) -161 529 400 7 434 298 -293 715 855 623 367 626 606
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
© Barry M Frohlinger, Inc. copyright 1981 - 2017 45
Disney
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Cfops 3,75 3,04 2,28 2,90 4,37 4,26 5,96 5,39 5,44 5,31 6,57 6,99 799 945 978 1E+01E+0Capital Spending 201 179 108 1,04 1,42 1,82 1,29 1,56 1,57 1,75 2,11 3,55 378 279 291 409 472Dividends 434 438 428 429 430 490 519 637 664 648 653 756 107 132 150 306 231
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
© Barry M Frohlinger, Inc. copyright 1981 - 2017 46
Disney
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
Cfops 3,75 3,04 2,28 2,90 4,37 4,26 5,96 5,39 5,44 5,31 6,57 6,99 7966 9452 9780 1E+0 1E+0Residual 1,30 815 772 1,42 2,51 1,95 4,14 3,19 3,20 2,91 3,81 2,67 3136 5332 5356 3747 6172
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Disney Sales 55,632
47
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Disney EBITDA 16,885, Op Profit 14,358
48
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Disney EBITDA 16,885, Op Profit 14,358
49
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Disney Residual Cash Flows
50
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Navistar
51
© Barry M Frohlinger, Inc. copyright 1981 - 2017 52
Navistar
-800
-600
-400
-200
0
200
400
600
800
1000
1200
1400
Cfops 672 203 -74 190 298 275 -287 262 112012381107 880 610 100 -336 46 267CAPX 553 326 242 306 244 295 230 312 176 151 234 429 309 167 88 115 116Dividends 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0Residual 119 -123 -316 -116 54 -20 -517 -50 944 1087 873 451 301 -67 -424 -69 151
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Navistar
53
© Barry M Frohlinger, Inc. copyright 1981 - 2017 54
Freescale EBITDA of 878 and Debt of 6,479
-200
0
200
400
600
800
1000
1200
1400
Cfops 558 1272 1272 1241 426 405 76 394 99 350 321CAPX 310 522 491 624 327 239 85 281 135 123 151Dividends 0 0 0 0 0 0 0 0 0 0 0Residual 248 750 781 617 99 166 9 113 -36 227 170
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Sprint Balance Sheet
55
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Sprint Balance Sheet
56
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Sprint Balance Sheet
57
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Sprint [Debt/EBITDA 3.8X]
58
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Sprint Balance Sheet
59
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Sprint Balance Sheet
60
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Sprint Balance Sheet
61
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Senior Notes with rates 7 – 12%
62
© Barry M Frohlinger, Inc. copyright 1981 - 2017 63
Costco
-1,000
-500
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Cfops 1,070 1,033 1,018 1,507 2,099 1,783 1,831 2,076 2,176 2,092 2,780 3,198 3057 3437Capital Spending 1,228 1,448 1,039 811 706 995 1,217 1,386 1,599 1,250 1,055 1,290 1480 2083Dividends 0 0 0 0 92 205 230 246 265 296 338 389 446 511Residual -158 -415 -21 696 1301 583 384 444 312 546 1387 1519 1131 843
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
© Barry M Frohlinger, Inc. copyright 1981 - 2017 64
Walmart
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16Cfops 9604 10260 13005 15996 15044 18241 19952 20354 23147 26249 23643 24255 25591 23257 28564 27389CAPX 8042 8383 9245 10308 12893 14530 15666 14937 11499 12184 12699 13510 12898 13115 12174 11477Div 1070 1249 1328 1569 2214 2511 2802 3586 3746 4217 4437 5048 5361 6139 6185 6294residual 492 628 2432 4119 -63 1200 1484 1831 7902 9848 6507 5697 7432 4003 10205 9618
-5000
0
5000
10000
15000
20000
25000
30000
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Wal Mart Sales 482,130
65
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Wal Mart Sales 482,130, EBITDA OF 33,559 and Op Profit of 24,105
66
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Wal Mart, unused revolver and 2016 FCF
67
© Barry M Frohlinger, Inc. copyright 1981 - 2017 68
JC Penney
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Sales 18096 18781 18903 19860 18486 17556 17759 17260 12985 11859 12257 12625
0
5000
10000
15000
20000
25000 Sales
© Barry M Frohlinger, Inc. copyright 1981 - 2017 69
JC Penney
© Barry M Frohlinger, Inc. copyright 1981 - 2017
JC Penney
70
© Barry M Frohlinger, Inc. copyright 1981 - 2017
JC Penney
71
© Barry M Frohlinger, Inc. copyright 1981 - 2017
JC Penney
72
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Average Annual FCF [12 yrs] -140 MM
73
© Barry M Frohlinger, Inc. copyright 1981 - 2017
JC Penney
74
© Barry M Frohlinger, Inc. copyright 1981 - 2017 75
P&G [total debt of 30,598]
-4000
-2000
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Cfops 354229224352518661566923868410341207134312841333132814871E+0 1E+0 1543CapX 30182486167914822024218126672945304632383067330639644008384837363314Dividends 17961943209522462539273137034209465550445458576761396519691172877436residual -129 -150 578 14581593201123143186437451544321425731814346319935854685
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16
© Barry M Frohlinger, Inc. copyright 1981 - 2017
Exxon Revenue
76
© Barry M Frohlinger, Inc. copyright 1981 - 2017 77
Exxon Mobil
© Barry M Frohlinger, Inc. copyright 1981 - 2017
CBI
78
Chicago Bridge & Iron carries debt after completing its $3 billion acquisition of Shaw Group in 2012. The industry in general tends to see a lot of volatility in cash flow, so there’s a tendency to keep funded debt balances lo. Shaw had a debt-to-Ebitda ratio of about 2.1, including operating leases and postretirement obligations. However, the combined company will have a debt-to-Ebitda ratio of roughly 3.5-to-one after taking on $1.9 billion of debt to fund the deal. In a conference call to announce the deal, CB&I CEO told analysts that CB&I, which currently had no rating, expected to retain “an investment-grade-type credit profile,” after the deal. Shaw Group was rated BBB- by S&P. Moody’s said that the combined company will see a “substantial decline in the consolidated liquidity at a time when they will be taking on greater financial and business risk and the risks associated with the integration of the two organizations.” Shaw had recently taken steps to reduce its debt. In September 2011, it exercised a right to sell a 20% stake in nuclear energy company Westinghouse Electric to Toshiba. Shaw used the proceeds to pay down the $1.7 billion in yen-denominated bonds it sold to buy the Westinghouse stake in the first place.
© Barry M Frohlinger, Inc. copyright 1981 - 2017
CB&I Revenue
79
© Barry M Frohlinger, Inc. copyright 1981 - 2017
CB&I EBITDA
80
© Barry M Frohlinger, Inc. copyright 1981 - 2017
CBI
81
© Barry M Frohlinger, Inc. copyright 1981 - 2017 82
CB&I
-300
-200
-100
0
100
200
300
400
500
600
700
Cfops 4 106 72 90 133 165 476 446 26 249 288 413 203 -113 264 -56 654CapX 6 9 23 31 17 36 80 88 124 48 24 41 72 90 118 79 52Dividends 2 5 5 7 8 12 12 15 15 0 0 20 19 21 30 30 29residual -4 92 44 52 110 117 384 343 -113 201 264 352 112 -224 106 -165 573
0 1 2 3 4 5 6 7 8 9 0 11 12 13 14 15 16
© Barry M Frohlinger, Inc. copyright 1981 - 2017
CBI [Debt/EBITDA 2.84X]
83
© Barry M Frohlinger, Inc. copyright 1981 - 2017
CBI [Average FCF 132 and best 573]
84
© Barry M Frohlinger, Inc. copyright 1981 - 2017 85
CVS Caremark
-1000
0
1000
2000
3000
4000
5000
6000
7000
8000
Cfops 780 681 1205 907 914 1612 1742 3230 3947 4035 4779 5856 6671 5783CapX 695 714 1109 1122 1348 1495 1769 1805 2180 2548 2005 1872 2030 1984Dividends 105 105 105 105 120 132 141 322 383 439 479 674 829 1097residual -20 -138 -9 -320 -554 -15 -168 1103 1384 1048 2295 3310 3812 2702
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
© Barry M Frohlinger, Inc. copyright 1981 - 2017 86
Rosneft
-5000
0
5000
10000
15000
20000
25000
30000
35000
40000
Cfops 437 529 794 707 2912 2590 1711014393 1145215419 1571014471 33691Capital Spending 397 420 821 853 2085 3462 6240 8732 7581 8516 1261313141 15569Dividends 21 35 49 51 61 424 521 516 613 710 871 1974 2358residual 19 74 -76 -197 766 -1296 10349 5145 3258 6193 2226 -644 15764
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
© Barry M Frohlinger, Inc. copyright 1981 - 2017 87
Pepsi
0
2000
4000
6000
8000
10000
12000
14000
2014 2015 2016 2017 2018 after
LTD
Revolver
© Barry M Frohlinger, Inc. copyright 1981 - 2017 88
Omnicom BBB rated
0
500
1000
1500
2000
2500
3000
3500
year 1 year 2 year 3 year 4 year 5 after
LTD
Revolver
© Barry M Frohlinger, Inc. copyright 1981 - 2017 89
Avaya LBO
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
year 1 year 2 year 3 year 4 year 5 after
LTD
Revolver
© Barry M Frohlinger, Inc. copyright 1981 - 2017 90
Asset Based Office Depot
0
200
400
600
800
1000
1200
1400
1600
1800
2000
year 1 year 2 year 3 year 4 year 5 after
LTD
Revolver
© Barry M Frohlinger, Inc. copyright 1981 - 2017 91
EA Sports High Tech
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
year 1 year 2 year 3 year 4 year 5 after
LTD
Revolver
© Barry M Frohlinger, Inc. copyright 1981 - 2017 92
Bunge
0
100
200
300
400
500
600
700
800
900
1000
2014 2015 2016 2017 2018 after
LTD
Revolver
© Barry M Frohlinger, Inc. copyright 1981 - 2017 93
Navistar
0
200
400
600
800
1000
1200
1400
1600
1800
LTD 1190 711 196 1292 247 15242014 2013 2014 2015 2016 after