Echostar - company selling for equivalent to cash & cash equivalents plus good prospects. However, the company has substantial capital lease, satellite lease, and purchase obligations. Curious, how do you guys take capital/operating/misc leases into account when valuing a company. Treat as debt?
Below is my quick liquidation analysis of Echostar:
Echostar - Market Cap = $1,620m
Liquidation Analysis
Cash & equiv $920m
Net Receivables $158m (80%) --total receivables $397m - payables $197m = Net receivables $198m * 80%
Long term cash & equiv (corp and gov't bonds) $17m
Long term investments (securities) $611m
Other current (bonds and securities) $34m
Total cash & equiv value = $1,706m
PPE 1,251,554 - 312m (25%)
Inventory $20m (50%)
Total assets = $2,038m
(Total Liabilities $600m *excludes payables since they are included in the net receivables)
Include Satellite obligations $1,131m
Purchase obligations $372m
Total other obligations $1,503m
Total liabilities include other obligations $2,103m
Liquidation value of assets = $1,438m (compare to market cap = $1,620m)
Business value (Earnings Power) = $100m * PE 10 = $1,000m
Total Value = $2,438m
Total potential liabilities = $2,103m |
