Ryan D.

Seelke Ocean Carriers Case

Forcasted Operating Cash Flow for New Capesize Vessel (25 Year Life)
Discount Rate

9%

Age of Ship

Event Year
-2
-1
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

Calendar year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027

Expected
Daily Hire
Rate

The number of
Operating days

Expected
Annual
Revenue

Daily
Operating
Costs

Annual
Operating
Costs

Depreciation

Capital
Expenditures
Depreciation

Total
Depreciation

Net Income (F-H-I)

Event Year
-2
-1
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

Calendar Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027

357
357
357
357
357
353
353
353
353
353
349
349
349
349
349
349
349
349
349
349
349
349
349
349
349

Price of Ship
-$3,900,000
-$3,900,000
-$31,200,000
$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

$7,140,000
$7,211,400
$7,282,800
$6,680,898
$6,170,031
$6,170,793
$6,241,746
$6,313,758
$6,386,476
$6,152,084
$6,152,172
$6,223,019
$6,294,564
$6,366,807
$5,151,938
$5,211,268
$5,271,296
$5,332,022
$5,393,446
$5,114,246
$5,173,227
$5,232,557
$5,292,934
$5,354,009
$4,693,352

Capital
PV Outflows
Expenditures
-$3,900,000
-$3,577,982
-$26,260,416
$0
$0
$0
$0
$0
-$300,000
$0
$0
$0
$0
$0
-$350,000
$0
$0
$0
$0
$0
-$750,000
$0
$0
$0
$0
$0
-$850,000
$0
$0
$0
$0
$0

Total Cash Flow for a 25 Year Capesize Carrier

Operating Cash Flow + Investment Cash Flow
Op. Cash Flow

+
$35,174,444.69

Inv. Cash Flow

(34,805,887.40)

Operations
Cash Flow

Discounted
Operating Cash
Flow

Total Op. Cash

Flow

$35,174,444.69
$20,000
$20,200
$20,400
$18,714
$17,283
$17,481
$17,682
$17,886
$18,092
$17,428
$17,628
$17,831
$18,036
$18,243
$14,762
$14,932
$15,104
$15,278
$15,454
$14,654
$14,823
$14,993
$15,166
$15,341
$13,448

$4,000
$4,160
$4,326
$4,499
$4,679
$4,867
$5,061
$5,264
$5,474
$5,693
$5,921
$6,158
$6,404
$6,660
$6,927
$7,204
$7,492
$7,792
$8,103
$8,427
$8,764
$9,115
$9,480
$9,859
$10,253

$1,460,000
$1,518,400
$1,579,136
$1,642,301
$1,707,993
$1,776,313
$1,847,366
$1,921,260
$1,998,111
$2,078,035
$2,161,157
$2,247,603
$2,337,507
$2,431,007
$2,528,248
$2,629,378
$2,734,553
$2,843,935
$2,957,692
$3,076,000
$3,199,040
$3,327,001
$3,460,081
$3,598,485
$3,742,424

$1,560,000
$1,560,000
$1,560,000
$1,560,000
$1,620,000
$1,620,000
$1,620,000
$1,620,000
$1,620,000
$1,630,000
$1,630,000
$1,630,000
$1,630,000
$1,630,000
$1,710,000
$1,710,000
$1,710,000
$1,710,000
$1,710,000
$1,730,000
$1,730,000
$1,730,000
$1,730,000
$1,730,000
$1,560,000

$60,000.00
$60,000.00
$60,000.00
$60,000.00
$60,000.00
$70,000.00
$70,000.00
$70,000.00
$70,000.00
$70,000.00
$150,000.00
$150,000.00
$150,000.00
$150,000.00
$150,000.00
$170,000.00
$170,000.00
$170,000.00
$170,000.00
$170,000.00
$0.00

$1,560,000
$1,560,000
$1,560,000
$1,560,000
$1,680,000
$1,680,000
$1,680,000
$1,680,000
$1,680,000
$1,700,000
$1,700,000
$1,700,000
$1,700,000
$1,700,000
$1,860,000
$1,860,000
$1,860,000
$1,860,000
$1,860,000
$1,900,000
$1,900,000
$1,900,000
$1,900,000
$1,900,000
$1,560,000

$4,120,000
$4,133,000
$4,143,664
$3,478,597
$2,782,038
$2,714,480
$2,714,380
$2,712,498
$2,708,365
$2,374,049
$2,291,015
$2,275,416
$2,257,057
$2,235,800
$763,690
$721,890
$676,743
$628,087
$575,754
$138,246
$74,187
$5,556
-$67,147
-$144,476
-$609,072

Forcasted Investment Cash Flow for Capesize Carrier (25 Year Life)
Age of Ship

Discounted
Net Income

=
=

Net Cash Flow

$368,557

Working
Capital

$500,000
$515,000
$530,450
$546,364
$562,754
$579,637
$597,026
$614,937
$633,385
$652,387
$671,958
$692,117
$712,880
$734,267
$756,295
$778,984
$802,353
$826,424
$851,217
$876,753
$903,056
$930,147
$958,052
$986,793
$1,016,397
$0

Change in
Working
Capital

$500,000
$15,000
$15,450
$15,914
$16,391
$16,883
$17,389
$17,911
$18,448
$19,002
$19,572
$20,159
$20,764
$21,386
$22,028
$22,689
$23,370
$24,071
$24,793
$25,536
$26,303
$27,092
$27,904
$28,742
$29,604
-$1,016,397

WC

-$500,000
-$15,000
-$15,450
-$15,914
-$16,391
-$16,883
-$17,389
-$17,911
-$18,448
-$19,002
-$19,572
-$20,159
-$20,764
-$21,386
-$22,028
-$22,689
-$23,370
-$24,071
-$24,793
-$25,536
-$26,303
-$27,092
-$27,904
-$28,742
-$29,604
$1,016,397

Investment Cash
Flow
-$3,900,000
-$3,900,000
-$31,700,000
-$15,000
-$15,450
-$15,914
-$16,391
-$316,883
-$17,389
-$17,911
-$18,448
-$19,002
-$369,572
-$20,159
-$20,764
-$21,386
-$22,028
-$772,689
-$23,370
-$24,071
-$24,793
-$25,536
-$876,303
-$27,092
-$27,904
-$28,742
-$29,604
$1,016,397

Discounted
Investment
Cash Flow
Total Inv. Cash Flow
-$3,900,000
-$34,805,887
-$3,577,982
-$26,681,256
-$11,583
-$10,945
-$10,343
-$9,773
-$173,346
-$8,727
-$8,247
-$7,793
-$7,364
-$131,396
-$6,575
-$6,213
-$5,871
-$5,548
-$178,548
-$4,954
-$4,681
-$4,424
-$4,180
-$131,605
-$3,733
-$3,527
-$3,333
-$3,150
$99,208

$3,181,396
$2,927,921
$2,693,097
$2,074,173
$1,521,870
$1,362,306
$1,249,776
$1,145,788
$1,049,580
$844,057
$747,280
$680,910
$619,648
$563,130
$176,468
$153,036
$131,620
$112,070
$94,250
$20,762
$10,222
$702
-$7,787
-$15,371
-$59,450

$5,680,000
$5,693,000
$5,703,664
$5,038,597
$4,462,038
$4,394,480
$4,394,380
$4,392,498
$4,388,365
$4,074,049
$3,991,015
$3,975,416
$3,957,057
$3,935,800
$2,623,690
$2,581,890
$2,536,743
$2,488,087
$2,435,754
$2,038,246
$1,974,187
$1,905,556
$1,832,853
$1,755,524
$950,928

$4,386,002.17
$4,033,064.73
$3,706,990.25
$3,004,350.50
$2,440,887.32
$2,205,441.21
$2,023,294.73
$1,855,438.46
$1,700,635.67
$1,448,465.80
$1,301,783.98
$1,189,629.21
$1,086,362.67
$991,308.93
$606,264.47
$547,344.62
$493,370.38
$443,951.63
$398,728.20
$306,107.30
$272,006.25
$240,871.65
$212,551.94
$186,774.64
$92,817.99

Final Results

$39,000,000 Discounted 27 Years

15 Year Option (Net Cash Flow)

25 Year Option (Net Cash Flow)

Forcasted Operating Cash Flow for a Capesize Carrier (15 Year Life)
Discount Rate
9%
Disposal Value
###
PV of Disposal$1,155,366

Age of Ship

Event Year
-2
-1
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

Calendar year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

Expected
Daily Hire
Rate

The number of
Operating days

Expected
Annual
Revenue

Daily Operating
Costs

Annual
Operating
Costs

Depreciatio
n

Depreciatoin of
Capital
Investment

Total
Depreciation

Net Income
(F-H-K)

Discounted
Net Income

Discounted
Operations Cash Operating Cash Total Op. Cash
Flow
Flow
Flow

$31,979,920
$20,000
$20,200
$20,400
$18,714
$17,283
$17,481
$17,682
$17,886
$18,092
$17,428
$17,628
$17,831
$18,036
$18,243
$14,762

357
357
357
357
357
353
353
353
353
353
349
349
349
349
349

$7,140,000
$7,211,400
$7,282,800
$6,680,898
$6,170,031
$6,170,793
$6,241,746
$6,313,758
$6,386,476
$6,152,084
$6,152,172
$6,223,019
$6,294,564
$6,366,807
$5,151,938

$4,000
$4,160
$4,326
$4,499
$4,679
$4,867
$5,061
$5,264
$5,474
$5,693
$5,921
$6,158
$6,404
$6,660
$6,927

$1,460,000
$1,518,400
$1,579,136
$1,642,301
$1,707,993
$1,776,313
$1,847,366
$1,921,260
$1,998,111
$2,078,035
$2,161,157
$2,247,603
$2,337,507
$2,431,007
$2,528,248

$1,560,000
$1,560,000
$1,560,000
$1,560,000
$1,620,000
$1,620,000
$1,620,000
$1,620,000
$1,620,000
$1,630,000
$1,630,000
$1,630,000
$1,630,000
$1,630,000
$1,710,000

$0.00
$0.00
$0.00
$0.00
$60,000.00
$60,000.00
$60,000.00
$60,000.00
$60,000.00
$70,000.00
$70,000.00
$70,000.00
$70,000.00
$70,000.00
$0.00

$1,560,000
$1,560,000
$1,560,000
$1,560,000
$1,680,000
$1,680,000
$1,680,000
$1,680,000
$1,680,000
$1,700,000
$1,700,000
$1,700,000
$1,700,000
$1,700,000
$1,710,000

$4,120,000
$4,133,000
$4,143,664
$3,478,597
$2,782,038
$2,714,480
$2,714,380
$2,712,498
$2,708,365
$2,374,049
$2,291,015
$2,275,416
$2,257,057
$2,235,800
$913,690

Discounted Ship
Scrap Price

Investment
Cash Flow
-$3,900,000
-$3,900,000
-$31,700,000
-$15,000
-$15,450
-$15,914
-$16,391
-$316,883
-$17,389
-$17,911
-$18,448
-$19,002
-$369,572
-$20,159
-$20,764
-$21,386
-$22,028
$756,295

$3,181,396
$2,927,921
$2,693,097
$2,074,173
$1,521,870
$1,362,306
$1,249,776
$1,145,788
$1,049,580
$844,057
$747,280
$680,910
$619,648
$563,130
$211,129

$5,680,000
$5,693,000
$5,703,664
$5,038,597
$4,462,038
$4,394,480
$4,394,380
$4,392,498
$4,388,365
$4,074,049
$3,991,015
$3,975,416
$3,957,057
$3,935,800
$2,623,690

Totals

Forcasted Investment Cash Flow for Capesize Carrier (15 Year Life)
Age of Ship

Event Year
-2
-1
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

PV Cash
Capital
Outflows
Expenditures
-$3,900,000
-$3,577,982
-$26,260,416
$0
$0
$0
$0
$0
-$300,000
$0
$0
$0
$0
$0
-$350,000
$0
$0
$0
$0
$0
-$33,738,397

Calendar Year Price of Ship

2000
-$3,900,000
2001
-$3,900,000
2002
-$31,200,000
2003
$0
2004
$0
2005
$0
2006
$0
2007
$0
2008
$0
2009
$0
2010
$0
2011
$0
2012
$0
2013
$0
2014
$0
2015
$0
2016
$0
2017
$0

Total Cash Flow for a 15 year Capesize Carrier

Operating Cash Flow + Investment Cash Flow
Op. Cash Flow
$31,979,920.10

+
+

Inv. Cash Flow

(33,232,835.62)

=
=

Net Cash Flow

$1,252,916

Working Capital

500,000
515,000
530,450
546,364
562,754
579,637
597,026
614,937
633,385
652,387
671,958
692,117
712,880
734,267
756,295
0

Change in
Working
Capital

$500,000
$15,000
$15,450
$15,914
$16,391
$16,883
$17,389
$17,911
$18,448
$19,002
$19,572
$20,159
$20,764
$21,386
$22,028
-$756,295

W.C.

-$500,000
-$15,000
-$15,450
-$15,914
-$16,391
-$16,883
-$17,389
-$17,911
-$18,448
-$19,002
-$19,572
-$20,159
-$20,764
-$21,386
-$22,028
$756,295

Ship Scrap
Price

$5,000,000

$1,155,366

Discounted
Investment
Total Inv. Cash
Cash Flow
Flow
-$3,900,000
-$33,232,836
-$3,577,982
-$26,681,256
-$11,583
-$10,945
-$10,343
-$9,773
-$173,346
-$8,727
-$8,247
-$7,793
-$7,364
-$131,396
-$6,575
-$6,213
-$5,871
-$5,548
$1,330,125

$4,386,002
$4,033,065
$3,706,990
$3,004,351
$2,440,887
$2,205,441
$2,023,295
$1,855,438
$1,700,636
$1,448,466
$1,301,784
$1,189,629
$1,086,363
$991,309
$606,264