TRNO Intrinsic Value

TRNO

Terreno Realty Corp – Offices of Real Estate Agents and Brokers

terreno realty corporation and together with its subsidiaries, the âcompanyâ) acquires, owns and operates industrial real estate in six major coastal u.s. markets: los angeles, northern new jersey/new york city, san francisco bay area, seattle, miami, and washington, d.c. all square feet, acres, occupancy and number of properties disclosed in these condensed notes to the consolidated financial statements are unaudited. as of september 30, 2020, the company owned 219 buildings aggregating approximately 13.1 million square feet, 22 improved land parcels consisting of approximately 85.0 acres and one property under redevelopment expected to contain approximately 0.2 million square feet upon completion. the company is an internally managed maryland corporation and elected to be taxed as a real estate investment trust (âreitâ) under sections 856 through 860 of the internal revenue code of 1986, as amended (the âcodeâ), commencing with its taxable year ended december 31, 2010.

Analysis Results

Intrinsic Value	$19.57
Latest Price	$57.91
Relative Value	196% 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 20.0%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 8.3%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 20.0%, 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	61.9	57.1
2024	74.2	63.3
2025	89.1	70.2
2026	107	77.8
2027	128	86.2

Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 2080 million. This corresponds to a present value of 1290 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 355 million. Adding in the terminal value gives a total present value of 1640 million.

There are presently 83.9 million outstanding shares, so the intrinsic value per share is 19.57.

Financial Statements

The following data was to determine the past cash flows.

Current Assets	26,393,000
Current Cash	26,393,000
Current Liabilities	107,899,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-107,899,000
Change in NCWC	-13,342,000
EBIT	108,889,000
Tax Provision	0
Depreciation and Amortization	49,492,000
Capital Expenditure	-92,249,000
Unlevered Free Cash Flow	52,790,000

Current Assets	204,404,000
Current Cash	204,404,000
Current Liabilities	94,557,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-94,557,000
Change in NCWC	-34,129,000
EBIT	87,859,000
Tax Provision	0
Depreciation and Amortization	43,001,000
Capital Expenditure	-62,564,000
Unlevered Free Cash Flow	34,167,000

Current Assets	107,180,000
Current Cash	107,180,000
Current Liabilities	60,428,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-60,428,000
Change in NCWC	-16,280,000
EBIT	68,153,000
Tax Provision	0
Depreciation and Amortization	51,295,000
Capital Expenditure	-40,600,000
Unlevered Free Cash Flow	62,568,000

Current Assets	125,940,000
Current Cash	110,082,000
Current Liabilities	60,006,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-44,148,000
Change in NCWC	-47,171,000
EBIT	58,837,000
Tax Provision	0
Depreciation and Amortization	48,697,000
Capital Expenditure	-59,954,000
Unlevered Free Cash Flow	409,000

Current Assets	85,496,000
Current Cash	31,004,000
Current Liabilities	51,469,000
Current Debt	0
Non-Cash Working Capital (NCWC)	3,023,000
Change in NCWC	47,532,000
EBIT	49,226,000
Tax Provision	0
Depreciation and Amortization	44,510,000
Capital Expenditure	-38,645,000
Unlevered Free Cash Flow	102,623,000

Current Assets	35,710,000
Current Cash	35,710,000
Current Liabilities	44,509,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-44,509,000
Change in NCWC	-6,884,000
EBIT	39,049,000
Tax Provision	0
Depreciation and Amortization	35,709,000
Capital Expenditure	-27,405,000
Unlevered Free Cash Flow	40,469,000

Current Assets	14,208,000
Current Cash	14,208,000
Current Liabilities	37,625,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-37,625,000
Change in NCWC	-3,897,000
EBIT	21,246,000
Tax Provision	0
Depreciation and Amortization	33,061,000
Capital Expenditure	-42,513,000
Unlevered Free Cash Flow	7,897,000

Current Assets	22,450,000
Current Cash	22,450,000
Current Liabilities	33,728,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-33,728,000
Change in NCWC	-12,055,000
EBIT	13,655,000
Tax Provision	0
Depreciation and Amortization	34,101,000
Capital Expenditure	-20,356,000
Unlevered Free Cash Flow	15,345,000

Current Assets	190,601,000
Current Cash	190,601,000
Current Liabilities	21,673,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-21,673,000
Change in NCWC	-8,486,000
EBIT	17,308,000
Tax Provision	0
Depreciation and Amortization	18,071,000
Capital Expenditure	-19,729,000
Unlevered Free Cash Flow	7,164,000

Current Assets	6,989,000
Current Cash	6,989,000
Current Liabilities	13,187,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-13,187,000
Change in NCWC	-4,198,000
EBIT	9,968,000
Tax Provision	0
Depreciation and Amortization	12,582,000
Capital Expenditure	-9,531,000
Unlevered Free Cash Flow	8,821,000

Current Assets	5,930,000
Current Cash	5,930,000
Current Liabilities	8,989,000
Current Debt	0
Non-Cash Working Capital (NCWC)	-8,989,000
Change in NCWC	-1,179,000
EBIT	5,463,000
Tax Provision	0
Depreciation and Amortization	9,636,000
Capital Expenditure	-10,212,000
Unlevered Free Cash Flow	3,708,000

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