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Nucor Thin-Slab Casting Financial Overview

This document presents pro-forma costs and profits projections for a new thin-slab casting facility from 1987 to 2000. It projects revenues, operating income, depreciation expenses, profit sharing expenses, pre-tax income, net income, capital expenditures, start-up expenses, changes in working capital, cash flows, cumulative investments, book value and net present value of cash flows. Key assumptions include provisions for working capital at 12% of revenues, a tax rate of 34%, depreciation over 15 years with maintenance at half that rate, and a weighted after-tax cost of capital of 11%.

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Andrew Choi
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215 views1 page

Nucor Thin-Slab Casting Financial Overview

This document presents pro-forma costs and profits projections for a new thin-slab casting facility from 1987 to 2000. It projects revenues, operating income, depreciation expenses, profit sharing expenses, pre-tax income, net income, capital expenditures, start-up expenses, changes in working capital, cash flows, cumulative investments, book value and net present value of cash flows. Key assumptions include provisions for working capital at 12% of revenues, a tax rate of 34%, depreciation over 15 years with maintenance at half that rate, and a weighted after-tax cost of capital of 11%.

Uploaded by

Andrew Choi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd

Nucor Thin-Slab Casting Pro-Forma Costs and Profits

$ in Millions
Year 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Good Tons (000) 0.0 0.0 50.0 400.0 650.0 850.0 950.0 1000.0 1000.0 1000.0 1000.0 1000.0 1000.0 1000.0
Revenues 0.0 0.0 17.1 136.4 221.7 289.9 324.0 341.1 341.1 341.1 341.1 341.1 341.1 341.1
Operating Income 0.0 0.0 4.6 36.9 59.9 78.4 87.6 92.2 92.2 92.2 92.2 92.2 92.2 92.2
Depreciation (Note 4) 0.0 0.0 18.7 18.7 18.7 18.7 18.7 18.7 18.7 18.7 18.7 18.7 18.7 18.7
Profit Sharing Expense 0.0 0.0 0.0 0.6 2.9 4.8 5.7 6.2 6.2 6.2 6.2 6.2 6.2 6.2
Pre-tax Income 0.0 0.0 -14.1 17.6 38.3 54.9 63.2 67.3 67.3 67.3 67.3 67.3 67.3 67.3
Net Income after tax (Note 3) 0.0 0.0 -9.3 11.6 25.3 36.2 41.7 44.4 44.4 44.4 44.4 44.4 44.4 44.4
Plant construction costs 10.0 140.0 130.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Start-up Expenses 0.0 0.0 15.0 15.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Add to WC (Note 1) 0.0 0.0 2.1 14.3 10.2 8.2 4.1 2.1 0.0 0.0 0.0 0.0 0.0 0.0

Cash Flow ($10.0) ($140.0) ($145.1) ($6.5) $24.4 $37.4 $47.0 $51.7 $53.8 $53.8 $53.8 $53.8 $53.8 $53.8

Cumulative Investment $10.0 $150.0 $291.4 $315.1 $334.7 $352.2 $365.6 $377.0 $386.4 $395.7 $405.1 $414.4 $423.8 $433.1

Book Value $10.0 $150.0 $272.7 $277.7 $278.6 $277.4 $272.1 $264.8 $255.5 $246.1 $236.8 $227.4 $218.1 $208.7

NPV Cash Flows to 2000 ($54.8)

Cash Flow=NIAT+[Dep-Maint]-CAPEX-ChgWC-StartupExp

1) The company will need to make provisions for working capital, which are expected to
amount to about 12 percent of revenues.
2) The figures above take the project through the year 2000. It is expected that there will be
the need for a major modernization and/or expansion after that time.
3) Provisions for taxes are made here at the company's marginal rate of 34 percent.
4) Depreciation is calcualted based on an asset life of 15 years. It is expected that annual
expenditures on major repairs and improvements will amount to approximately one-half of this figure.
5) The company's weighted after-tax cost of capital is 11%.

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