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 Daily Operating

Annual
Revenue
Costs
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

PV Outflows
-$3,900,000
-$3,577,982
-$26,260,416
$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 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

$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

$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

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
-$3,900,000
-$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

$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

Capital
Expenditures

-$300,000

-$350,000

-$750,000

-$850,000

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

Total Inv. Cash Flow

-$34,805,887

$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
Disposal Value
PV of Disposal

Age of Ship

9%
$5,000,000
$1,155,366

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

Depreciation

Depreciatoin of
Net Income (F-H- Discounted Net
Capital Investment Total Depreciation
K)
Income

Operations Cash
Flow

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

$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

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

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

Price of Ship
PV Cash Outflows
-$3,900,000
-$3,900,000
-$3,900,000
-$3,577,982
-$31,200,000
-$26,260,416
$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
-$33,738,397

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)

Total Op. Cash

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

Totals

Age of Ship

Discounted
Operating Cash
Flow

=
=

Net Cash Flow

$1,252,916

Capital
Expenditures

-$300,000

-$350,000

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

Discounted
Investment Cash Investment Cash
Flow
Flow
-$3,900,000
-$3,900,000
-$3,900,000
-$3,577,982
-$31,700,000
-$26,681,256
-$15,000
-$11,583
-$15,450
-$10,945
-$15,914
-$10,343
-$16,391
-$9,773
-$316,883
-$173,346
-$17,389
-$8,727
-$17,911
-$8,247
-$18,448
-$7,793
-$19,002
-$7,364
-$369,572
-$131,396
-$20,159
-$6,575
-$20,764
-$6,213
-$21,386
-$5,871
-$22,028
-$5,548
$1,155,366
$756,295
$1,330,125

Discounted Ship
Scrap Price

Total Inv. Cash

Flow
-$33,232,836

$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