EQC Intrinsic Value

EQC

Equity Commonwealth – Other Financial Vehicles

Equity Commonwealth is a Chicago based, internally managed and self-advised real estate investment trust (REIT) with commercial office properties in the United States. EQC’s same property portfolio is comprised of 4 properties and 1.5 million square feet.

Analysis Results

Intrinsic Value	$1.32
Latest Price	$20.43
Relative Value	1452% overvalued

Share results:

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Cash Flow (Millions)

Analysis Parameters

New Ticker

Analysis Details

Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of -27.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 3.4%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -27.4%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year	Future flow (million)	Present value (million)
2023	15.1	14.6
2024	11.0	10.3
2025	7.98	7.22
2026	5.8	5.08
2027	4.21	3.57

Terminal Value

Assuming the company was sold after the projection period at an exit multiple of 30, the terminal value of the company would be 126 million. This corresponds to a present value of 103 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 40.8 million. Adding in the terminal value gives a total present value of 144 million.

There are presently 110.0 million outstanding shares, so the intrinsic value per share is 1.32.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	2,598,231,000
Current Cash	2,582,222,000
Current Liabilities	31,153,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-15,144,000
Change in NCWC	-4,580,000
EBIT	-9,232,000
Tax Provision	453,000
Depreciation and Amortization	17,810,000
Capital Expenditure	-3,577,000
Unlevered Free Cash Flow	531,608

Current Assets	2,816,547,000
Current Cash	2,800,998,000
Current Liabilities	26,113,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-10,564,000
Change in NCWC	9,241,000
EBIT	-23,109,000
Tax Provision	120,000
Depreciation and Amortization	17,774,000
Capital Expenditure	-6,803,000
Unlevered Free Cash Flow	-2,897,000

Current Assets	3,001,927,000
Current Cash	2,987,225,000
Current Liabilities	34,507,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-19,805,000
Change in NCWC	8,455,000
EBIT	-15,142,000
Tax Provision	248,000
Depreciation and Amortization	20,096,000
Capital Expenditure	-12,039,000
Unlevered Free Cash Flow	1,378,301

Current Assets	2,815,196,000
Current Cash	2,795,642,000
Current Liabilities	47,814,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-28,260,000
Change in NCWC	-7,530,000
EBIT	14,868,000
Tax Provision	1,284,000
Depreciation and Amortization	24,676,000
Capital Expenditure	-26,052,000
Unlevered Free Cash Flow	5,923,366

Current Assets	2,451,892,000
Current Cash	2,400,803,000
Current Liabilities	71,819,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-20,730,000
Change in NCWC	-29,135,000
EBIT	23,626,000
Tax Provision	3,156,000
Depreciation and Amortization	48,700,000
Capital Expenditure	-49,930,000
Unlevered Free Cash Flow	-7,009,095

Current Assets	2,445,129,000
Current Cash	2,351,693,000
Current Liabilities	85,031,000
Current Debt	0
Non-Cash Working Capital (NCWC)	8,405,000
Change in NCWC	-21,611,000
EBIT	60,678,000
Tax Provision	500,000
Depreciation and Amortization	92,152,000
Capital Expenditure	-64,813,000
Unlevered Free Cash Flow	65,400,265

Current Assets	2,246,705,000
Current Cash	2,094,674,000
Current Liabilities	122,015,000
Current Debt	0
Non-Cash Working Capital (NCWC)	30,016,000
Change in NCWC	16,605,000
EBIT	117,912,000
Tax Provision	745,000
Depreciation and Amortization	138,337,000
Capital Expenditure	-121,450,000
Unlevered Free Cash Flow	151,028,016

Current Assets	1,977,405,000
Current Cash	1,802,729,000
Current Liabilities	161,265,000
Current Debt	0
Non-Cash Working Capital (NCWC)	13,411,000
Change in NCWC	-27,083,000
EBIT	138,485,000
Tax Provision	2,364,000
Depreciation and Amortization	201,474,000
Capital Expenditure	-70,633,000
Unlevered Free Cash Flow	239,040,345

Current Assets	627,159,000
Current Cash	379,058,000
Current Liabilities	207,607,000
Current Debt	0
Non-Cash Working Capital (NCWC)	40,494,000
Change in NCWC	31,494,000
EBIT	166,638,000
Tax Provision	3,191,000
Depreciation and Amortization	238,147,000
Capital Expenditure	-99,651,000
Unlevered Free Cash Flow	317,080,822

Current Assets	446,218,000
Current Cash	222,449,000
Current Liabilities	214,769,000
Current Debt	0
Non-Cash Working Capital (NCWC)	9,000,000
Change in NCWC	22,308,000
EBIT	261,584,000
Tax Provision	2,634,000
Depreciation and Amortization	256,477,000
Capital Expenditure	-114,451,000
Unlevered Free Cash Flow	425,918,000

Current Assets	355,613,000
Current Cash	102,219,000
Current Liabilities	266,702,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-13,308,000
Change in NCWC	99,000
EBIT	287,365,000
Tax Provision	3,207,000
Depreciation and Amortization	268,254,000
Capital Expenditure	-131,300,000
Unlevered Free Cash Flow	424,418,000

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