Intrinsic value of Golar LNG - GLNG

Previous Close

$26.50

  Intrinsic Value

$5.57

stock screener

  Rating & Target

str. sell

-79%

Previous close

$26.50

 
Intrinsic value

$5.57

 
Up/down potential

-79%

 
Rating

str. sell

We calculate the intrinsic value of GLNG stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -22.33
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  80
  128
  198
  296
  429
  605
  832
  1,117
  1,467
  1,888
  2,384
  2,961
  3,620
  4,363
  5,191
  6,104
  7,100
  8,179
  9,338
  10,576
  11,890
  13,280
  14,743
  16,279
  17,886
  19,565
  21,316
  23,139
  25,036
  27,009
  29,059
Variable operating expenses, $m
 
  192
  297
  444
  644
  908
  1,248
  1,676
  2,200
  2,831
  3,576
  4,441
  5,430
  6,544
  7,787
  9,156
  10,650
  12,268
  14,007
  15,864
  17,835
  19,920
  22,115
  24,418
  26,829
  29,348
  31,974
  34,709
  37,554
  40,513
  43,588
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  229
  192
  297
  444
  644
  908
  1,248
  1,676
  2,200
  2,831
  3,576
  4,441
  5,430
  6,544
  7,787
  9,156
  10,650
  12,268
  14,007
  15,864
  17,835
  19,920
  22,115
  24,418
  26,829
  29,348
  31,974
  34,709
  37,554
  40,513
  43,588
Operating income, $m
  -149
  -64
  -99
  -148
  -215
  -303
  -416
  -559
  -733
  -944
  -1,192
  -1,480
  -1,810
  -2,181
  -2,596
  -3,052
  -3,550
  -4,089
  -4,669
  -5,288
  -5,945
  -6,640
  -7,372
  -8,139
  -8,943
  -9,783
  -10,658
  -11,570
  -12,518
  -13,504
  -14,529
EBITDA, $m
  -76
  53
  82
  122
  178
  251
  345
  463
  608
  782
  988
  1,226
  1,499
  1,807
  2,150
  2,528
  2,941
  3,388
  3,868
  4,380
  4,925
  5,500
  6,106
  6,742
  7,408
  8,103
  8,829
  9,584
  10,369
  11,186
  12,036
Interest expense (income), $m
  25
  61
  106
  172
  264
  389
  555
  769
  1,037
  1,367
  1,763
  2,230
  2,773
  3,393
  4,093
  4,873
  5,732
  6,670
  7,686
  8,777
  9,942
  11,180
  12,488
  13,866
  15,312
  16,825
  18,406
  20,054
  21,771
  23,557
  25,414
Earnings before tax, $m
  -209
  -125
  -205
  -319
  -478
  -692
  -972
  -1,328
  -1,771
  -2,310
  -2,955
  -3,711
  -4,583
  -5,575
  -6,689
  -7,925
  -9,282
  -10,760
  -12,355
  -14,065
  -15,888
  -17,820
  -19,860
  -22,005
  -24,255
  -26,608
  -29,064
  -31,624
  -34,289
  -37,061
  -39,943
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -187
  -125
  -205
  -319
  -478
  -692
  -972
  -1,328
  -1,771
  -2,310
  -2,955
  -3,711
  -4,583
  -5,575
  -6,689
  -7,925
  -9,282
  -10,760
  -12,355
  -14,065
  -15,888
  -17,820
  -19,860
  -22,005
  -24,255
  -26,608
  -29,064
  -31,624
  -34,289
  -37,061
  -39,943

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  224
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  4,257
  6,400
  9,888
  14,788
  21,456
  30,271
  41,616
  55,861
  73,349
  94,382
  119,212
  148,034
  180,986
  218,149
  259,555
  305,190
  355,009
  408,941
  466,898
  528,786
  594,512
  663,991
  737,150
  813,934
  894,307
  978,256
  1,065,795
  1,156,959
  1,251,809
  1,350,432
  1,452,937
Adjusted assets (=assets-cash), $m
  4,033
  6,400
  9,888
  14,788
  21,456
  30,271
  41,616
  55,861
  73,349
  94,382
  119,212
  148,034
  180,986
  218,149
  259,555
  305,190
  355,009
  408,941
  466,898
  528,786
  594,512
  663,991
  737,150
  813,934
  894,307
  978,256
  1,065,795
  1,156,959
  1,251,809
  1,350,432
  1,452,937
Revenue / Adjusted assets
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
  0.020
Average production assets, $m
  1,785
  2,855
  4,411
  6,597
  9,572
  13,505
  18,566
  24,921
  32,722
  42,106
  53,183
  66,041
  80,742
  97,321
  115,792
  136,151
  158,377
  182,437
  208,292
  235,902
  265,224
  296,220
  328,858
  363,112
  398,968
  436,420
  475,473
  516,143
  558,457
  602,455
  648,184
Working capital, $m
  -343
  -186
  -287
  -429
  -622
  -878
  -1,207
  -1,620
  -2,127
  -2,737
  -3,457
  -4,293
  -5,249
  -6,326
  -7,527
  -8,851
  -10,295
  -11,859
  -13,540
  -15,335
  -17,241
  -19,256
  -21,377
  -23,604
  -25,935
  -28,369
  -30,908
  -33,552
  -36,302
  -39,163
  -42,135
Total debt, $m
  1,977
  3,026
  4,903
  7,539
  11,126
  15,869
  21,972
  29,636
  39,045
  50,360
  63,719
  79,225
  96,954
  116,947
  139,223
  163,775
  190,578
  219,593
  250,774
  284,070
  319,431
  356,810
  396,170
  437,479
  480,720
  525,885
  572,981
  622,027
  673,056
  726,115
  781,263
Total liabilities, $m
  2,394
  3,443
  5,320
  7,956
  11,543
  16,286
  22,389
  30,053
  39,462
  50,777
  64,136
  79,642
  97,371
  117,364
  139,640
  164,192
  190,995
  220,010
  251,191
  284,487
  319,848
  357,227
  396,587
  437,896
  481,137
  526,302
  573,398
  622,444
  673,473
  726,532
  781,680
Total equity, $m
  1,863
  2,957
  4,568
  6,832
  9,913
  13,985
  19,227
  25,808
  33,887
  43,604
  55,076
  68,392
  83,616
  100,785
  119,914
  140,998
  164,014
  188,931
  215,707
  244,299
  274,665
  306,764
  340,563
  376,037
  413,170
  451,954
  492,397
  534,515
  578,336
  623,900
  671,257
Total liabilities and equity, $m
  4,257
  6,400
  9,888
  14,788
  21,456
  30,271
  41,616
  55,861
  73,349
  94,381
  119,212
  148,034
  180,987
  218,149
  259,554
  305,190
  355,009
  408,941
  466,898
  528,786
  594,513
  663,991
  737,150
  813,933
  894,307
  978,256
  1,065,795
  1,156,959
  1,251,809
  1,350,432
  1,452,937
Debt-to-equity ratio
  1.061
  1.020
  1.070
  1.100
  1.120
  1.130
  1.140
  1.150
  1.150
  1.150
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
Adjusted equity ratio
  0.406
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462
  0.462

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -187
  -125
  -205
  -319
  -478
  -692
  -972
  -1,328
  -1,771
  -2,310
  -2,955
  -3,711
  -4,583
  -5,575
  -6,689
  -7,925
  -9,282
  -10,760
  -12,355
  -14,065
  -15,888
  -17,820
  -19,860
  -22,005
  -24,255
  -26,608
  -29,064
  -31,624
  -34,289
  -37,061
  -39,943
Depreciation, amort., depletion, $m
  73
  117
  181
  270
  392
  553
  761
  1,021
  1,341
  1,726
  2,180
  2,707
  3,309
  3,989
  4,746
  5,580
  6,491
  7,477
  8,537
  9,668
  10,870
  12,140
  13,478
  14,882
  16,351
  17,886
  19,487
  21,153
  22,888
  24,691
  26,565
Funds from operations, $m
  -27
  -8
  -24
  -49
  -86
  -139
  -211
  -306
  -430
  -585
  -775
  -1,004
  -1,274
  -1,586
  -1,943
  -2,345
  -2,791
  -3,283
  -3,818
  -4,397
  -5,018
  -5,680
  -6,382
  -7,124
  -7,904
  -8,722
  -9,577
  -10,471
  -11,401
  -12,371
  -13,378
Change in working capital, $m
  12
  -70
  -101
  -142
  -193
  -256
  -329
  -413
  -507
  -610
  -720
  -836
  -956
  -1,078
  -1,201
  -1,323
  -1,445
  -1,564
  -1,681
  -1,795
  -1,906
  -2,015
  -2,122
  -2,227
  -2,331
  -2,435
  -2,539
  -2,644
  -2,751
  -2,860
  -2,973
Cash from operations, $m
  -39
  61
  77
  93
  107
  117
  118
  107
  77
  25
  -55
  -168
  -318
  -509
  -742
  -1,021
  -1,347
  -1,719
  -2,137
  -2,602
  -3,112
  -3,665
  -4,260
  -4,897
  -5,573
  -6,287
  -7,039
  -7,827
  -8,651
  -9,510
  -10,406
Maintenance CAPEX, $m
  0
  -73
  -117
  -181
  -270
  -392
  -553
  -761
  -1,021
  -1,341
  -1,726
  -2,180
  -2,707
  -3,309
  -3,989
  -4,746
  -5,580
  -6,491
  -7,477
  -8,537
  -9,668
  -10,870
  -12,140
  -13,478
  -14,882
  -16,351
  -17,886
  -19,487
  -21,153
  -22,888
  -24,691
New CAPEX, $m
  -235
  -1,071
  -1,556
  -2,186
  -2,975
  -3,933
  -5,061
  -6,355
  -7,802
  -9,383
  -11,077
  -12,858
  -14,700
  -16,579
  -18,472
  -20,359
  -22,225
  -24,060
  -25,856
  -27,610
  -29,322
  -30,996
  -32,638
  -34,255
  -35,856
  -37,452
  -39,053
  -40,670
  -42,315
  -43,998
  -45,730
Cash from investing activities, $m
  -2
  -1,144
  -1,673
  -2,367
  -3,245
  -4,325
  -5,614
  -7,116
  -8,823
  -10,724
  -12,803
  -15,038
  -17,407
  -19,888
  -22,461
  -25,105
  -27,805
  -30,551
  -33,333
  -36,147
  -38,990
  -41,866
  -44,778
  -47,733
  -50,738
  -53,803
  -56,939
  -60,157
  -63,468
  -66,886
  -70,421
Free cash flow, $m
  -41
  -1,083
  -1,596
  -2,274
  -3,138
  -4,208
  -5,496
  -7,009
  -8,746
  -10,699
  -12,858
  -15,206
  -17,725
  -20,397
  -23,203
  -26,126
  -29,152
  -32,270
  -35,470
  -38,748
  -42,102
  -45,531
  -49,038
  -52,629
  -56,310
  -60,090
  -63,978
  -67,983
  -72,119
  -76,396
  -80,826
Issuance/(repayment) of debt, $m
  134
  1,273
  1,877
  2,636
  3,588
  4,743
  6,103
  7,664
  9,409
  11,316
  13,359
  15,506
  17,728
  19,994
  22,276
  24,552
  26,803
  29,015
  31,181
  33,296
  35,361
  37,380
  39,359
  41,309
  43,241
  45,165
  47,096
  49,046
  51,029
  53,059
  55,148
Issuance/(repurchase) of shares, $m
  163
  1,219
  1,816
  2,583
  3,559
  4,765
  6,213
  7,909
  9,850
  12,028
  14,426
  17,026
  19,806
  22,744
  25,818
  29,008
  32,299
  35,676
  39,131
  42,657
  46,253
  49,919
  53,659
  57,479
  61,387
  65,393
  69,507
  73,742
  78,110
  82,625
  87,301
Cash from financing (excl. dividends), $m  
  214
  2,492
  3,693
  5,219
  7,147
  9,508
  12,316
  15,573
  19,259
  23,344
  27,785
  32,532
  37,534
  42,738
  48,094
  53,560
  59,102
  64,691
  70,312
  75,953
  81,614
  87,299
  93,018
  98,788
  104,628
  110,558
  116,603
  122,788
  129,139
  135,684
  142,449
Total cash flow (excl. dividends), $m
  173
  1,410
  2,097
  2,945
  4,009
  5,299
  6,820
  8,563
  10,513
  12,644
  14,927
  17,327
  19,809
  22,341
  24,891
  27,434
  29,950
  32,422
  34,842
  37,205
  39,512
  41,768
  43,980
  46,159
  48,317
  50,468
  52,625
  54,804
  57,021
  59,288
  61,623
Retained Cash Flow (-), $m
  32
  -1,219
  -1,816
  -2,583
  -3,559
  -4,765
  -6,213
  -7,909
  -9,850
  -12,028
  -14,426
  -17,026
  -19,806
  -22,744
  -25,818
  -29,008
  -32,299
  -35,676
  -39,131
  -42,657
  -46,253
  -49,919
  -53,659
  -57,479
  -61,387
  -65,393
  -69,507
  -73,742
  -78,110
  -82,625
  -87,301
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  191
  281
  362
  450
  535
  607
  655
  663
  617
  501
  301
  3
  -403
  -927
  -1,574
  -2,349
  -3,254
  -4,289
  -5,452
  -6,741
  -8,151
  -9,679
  -11,320
  -13,070
  -14,925
  -16,882
  -18,937
  -21,089
  -23,337
  -25,678
Discount rate, %
 
  9.40
  9.87
  10.36
  10.88
  11.43
  12.00
  12.60
  13.23
  13.89
  14.58
  15.31
  16.08
  16.88
  17.73
  18.61
  19.54
  20.52
  21.54
  22.62
  23.75
  24.94
  26.19
  27.50
  28.87
  30.32
  31.83
  33.42
  35.09
  36.85
  38.69
PV of cash for distribution, $m
 
  174
  232
  270
  297
  311
  308
  285
  245
  191
  128
  63
  0
  -53
  -94
  -122
  -135
  -136
  -128
  -113
  -95
  -76
  -58
  -42
  -30
  -20
  -13
  -8
  -5
  -3
  -1
Current shareholders' claim on cash, %
  100
  68.7
  48.1
  34.5
  25.4
  19.0
  14.5
  11.3
  8.9
  7.1
  5.8
  4.8
  4.0
  3.3
  2.8
  2.4
  2.1
  1.8
  1.6
  1.4
  1.2
  1.1
  1.0
  0.9
  0.8
  0.7
  0.6
  0.6
  0.5
  0.5
  0.4

Golar LNG Limited is a midstream liquefied natural gas (LNG) company engaged primarily in the transportation, regasification, liquefaction and trading of LNG. The Company is engaged in the acquisition, ownership, operation and chartering of LNG carriers and Floating Storage Regasification Unit (FSRUs) through its subsidiaries and affiliates, and the development of LNG projects, such as floating LNGs (FLNGs). The Company's segments include Vessel operations, LNG trading and FLNG. Under the Vessel operations segment, the Company operates and charters out LNG carriers and FSRUs on fixed terms to customers. Through the LNG trading segment, the Company provides physical and financial risk management in LNG and gas markets for customers around the world. The FLNG segment includes the costs associated with the conversion of its LNG carrier, the Hilli, to a FLNG. The Company, along with its affiliate, Golar LNG Partners LP, has a combined fleet of approximately 30 vessels.

FINANCIAL RATIOS  of  Golar LNG (GLNG)

Valuation Ratios
P/E Ratio -14.3
Price to Sales 33.5
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow -68.7
Price to Free Cash Flow -9.8
Growth Rates
Sales Growth Rate -22.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -66.3%
Cap. Spend. - 3 Yr. Gr. Rate -20.4%
Financial Strength
Quick Ratio 0
Current Ratio 0.3
LT Debt to Equity 81.9%
Total Debt to Equity 106.1%
Interest Coverage -7
Management Effectiveness
Return On Assets -3.8%
Ret/ On Assets - 3 Yr. Avg. -2.7%
Return On Total Capital -4.9%
Ret/ On T. Cap. - 3 Yr. Avg. -3.7%
Return On Equity -10%
Return On Equity - 3 Yr. Avg. -6.9%
Asset Turnover 0
Profitability Ratios
Gross Margin -25%
Gross Margin - 3 Yr. Avg. -6.7%
EBITDA Margin -138.8%
EBITDA Margin - 3 Yr. Avg. -87.4%
Operating Margin -186.3%
Oper. Margin - 3 Yr. Avg. -79.2%
Pre-Tax Margin -261.3%
Pre-Tax Margin - 3 Yr. Avg. -183.7%
Net Profit Margin -233.8%
Net Profit Margin - 3 Yr. Avg. -148.4%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0.8%
Payout Ratio -28.9%

GLNG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GLNG stock intrinsic value calculation we used $80 million for the last fiscal year's total revenue generated by Golar LNG. The default revenue input number comes from 2016 income statement of Golar LNG. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our GLNG stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.4%, whose default value for GLNG is calculated based on our internal credit rating of Golar LNG, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Golar LNG.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of GLNG stock the variable cost ratio is equal to 150%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for GLNG stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Golar LNG.

Corporate tax rate of 27% is the nominal tax rate for Golar LNG. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the GLNG stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for GLNG are equal to 2230.6%.

Life of production assets of 24.4 years is the average useful life of capital assets used in Golar LNG operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for GLNG is equal to -145%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1863 million for Golar LNG - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 101.034 million for Golar LNG is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Golar LNG at the current share price and the inputted number of shares is $2.7 billion.

RELATED COMPANIES Price Int.Val. Rating
GMLP Golar LNG Part 21.32 18.08  sell
GLOG GasLog 20.40 2.90  str.sell
DLNG Dynagas LNG Pa 11.75 9.41  sell
TGP Teekay LNG Par 19.45 4.93  str.sell
TK Teekay 8.88 11.06  buy
HMLP Hoegh LNG Part 17.90 100.85  str.buy
FRO Frontline 4.65 2.20  str.sell
TNK Teekay Tankers 1.47 5.16  str.buy

COMPANY NEWS

▶ New Africa Gas Comes at the Right Time for Europe   [Dec-14-17 07:01PM  Bloomberg]
▶ Golar LNG Dividend Information   [Nov-30-17 09:26AM  GlobeNewswire]
▶ Golar LNG reports 3Q loss   [08:36AM  Associated Press]
▶ "Fast Money" final trades: XRT, GLNG and more   [Nov-28-17 05:59PM  CNBC Videos]
▶ Golar LNG Limited - Q3 2017 results presentation   [Nov-10-17 07:02AM  GlobeNewswire]
▶ FLNG Hilli Episeyo departs Singapore   [Oct-12-17 12:21PM  GlobeNewswire]
▶ Where Bunker Fuel Prices Are Headed in Week 40   [Oct-11-17 03:06PM  Market Realist]
▶ Bunker Fuel Prices Rose, Oil Hit a 2-Year High in Week 39   [Oct-03-17 05:06PM  Market Realist]
▶ FLNG Hilli Episeyo departs Keppel Shipyard   [Oct-02-17 05:01AM  GlobeNewswire]
▶ Crude and Bunker Fuel Prices Rose in Week 38   [Sep-28-17 10:39AM  Market Realist]
▶ Golar LNG Limited: 2017 AGM results notification   [Sep-27-17 06:36PM  GlobeNewswire]
▶ "Fast Money" final trades: GM, XOM and more   [Sep-26-17 05:59PM  CNBC Videos]
▶ Organisational Changes at Golar   [03:01AM  GlobeNewswire]
▶ ETFs with exposure to Golar LNG Ltd. : September 13, 2017   [Sep-13-17 06:21PM  Capital Cube]
▶ Golar LNG reports 2Q loss   [Aug-31-17 08:04PM  Associated Press]
▶ Golar LNG dividend information   [Aug-30-17 09:01AM  GlobeNewswire]
▶ Golar LNG Limited: Fortuna FLNG Offtake Awarded to Gunvor   [Aug-21-17 08:02AM  GlobeNewswire]
▶ Crude Oil and Bunker Fuel Prices Went This Way Last Week   [Aug-18-17 02:36PM  Market Realist]
▶ 3 Oil & Gas Stocks for Ambitious Investors   [Aug-06-17 07:05AM  Motley Fool]
▶ Week 30: Bunker Fuel Prices Rose Due to Higher Oil Prices   [Aug-04-17 11:35AM  Market Realist]
▶ ETFs with exposure to Golar LNG Ltd. : July 5, 2017   [Jul-05-17 12:44PM  Capital Cube]
▶ 2017 Annual General Meeting   [08:13AM  GlobeNewswire]
▶ Why Bunker Fuel Prices Are on a Downward Trend   [Jun-28-17 07:38AM  Market Realist]
▶ Today's Bell Ringer, June 20, 2017   [Jun-20-17 09:15AM  CNBC Videos]
▶ ETFs with exposure to Golar LNG Ltd. : June 16, 2017   [Jun-16-17 03:50PM  Capital Cube]
▶ Why LNG Transport Firms' Stock Prices Sank in May   [Jun-09-17 04:21PM  Motley Fool]
▶ Why Did Bunker Fuel Prices Fall in Week 22?   [Jun-07-17 10:37AM  Market Realist]
▶ ETFs with exposure to Golar LNG Ltd. : June 5, 2017   [Jun-05-17 02:19PM  Capital Cube]
▶ How Did Bunker Fuel Prices Trend in Week 21?   [09:08AM  Market Realist]
▶ Golar LNG reports 1Q loss   [May-31-17 05:08PM  Associated Press]
▶ Golar LNG dividend information   [08:37AM  GlobeNewswire]
▶ Four stocks that will float your portfolio's boat   [May-26-17 05:24PM  CNBC Videos]
▶ Golar LNG Limited - Q1 2017 results presentation   [May-23-17 04:31PM  GlobeNewswire]
▶ Bunker Fuel Prices Rose in Week 19   [10:39AM  Market Realist]
▶ 3 Hidden Gems in the Oil Sector   [May-09-17 08:11AM  Motley Fool]
▶ ETFs with exposure to Golar LNG Ltd. : April 7, 2017   [Apr-07-17 04:39PM  Capital Cube]
▶ Why Analysts Expect Exponential Growth for Golar LNG   [Mar-31-17 03:35PM  Market Realist]
▶ Why Tesla, SeaWorld, Netflix, and More Are Trending   [Mar-17-17 08:56AM  Insider Monkey]
▶ Final Trade: WMT, DXJ & more   [Mar-02-17 05:59PM  CNBC Videos]
▶ Bunker Fuel Prices Rose in Week 8   [Mar-01-17 09:06AM  Market Realist]
▶ Golar LNG Dividend Information   [09:32AM  GlobeNewswire]
▶ Golar LNG Dividend Information   [09:31AM  GlobeNewswire]
Financial statements of GLNG
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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