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Module 7: Valuation using Residual Enterprise Income

Module 7: Valuation using Residual Enterprise Income. Andrew Swint Oil and Gas Equipment and Services. agenda. Baker Hughes Valuations using Residual Enterprise Income Discounted Cash Flows Considerations or concerns Questions (including updated eTrade baby picture). Baker Hughes.

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Module 7: Valuation using Residual Enterprise Income

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  1. Module 7:Valuation usingResidual Enterprise Income Andrew Swint Oil and Gas Equipment and Services

  2. agenda • Baker Hughes • Valuations using • Residual Enterprise Income • Discounted Cash Flows • Considerations or concerns • Questions (including updated eTrade baby picture)

  3. Baker Hughes • A leading supplier of oilfield services, products, technology and systems to the worldwide oil and natural gas industry • Revenue breakdown • Sales: $ 7,594 (34%) • Services: 14,770 (66%) • More than 58,000 employees in 9 Regions and 23 Geomarkets • Houston, TX

  4. Residual enterprise income

  5. Discounted cash flow model

  6. Captured valued • Discounted Cash Flow Model • $10,542 / 31,902 = 33% • Residual Enterprise Income Valuation Model • ($21,908 + 4,300) / 31,902 = 82%

  7. Concerns • Revenue generators • Industry concerns • High sensitivity

  8. INDUSTRY

  9. KEY DRIVERS • Oil and natural gas prices • Demand from oil drilling and gas extraction • Regulation

  10. High sensitivity

  11. Questions

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