Strategic value is determined by subtracting our operating value (OV) from our market value (MV), or:
Strategic Value = MV - OV.
Our strategic value represents an expectation on the part of our investors of future NOI. This profitability will presumably arise, at least in part, from our strategic capital, which generates little or no current profit.
Investors may perceive strategic capital as valuable because it supports promising new operations, or because it represents valuable capacity in a cyclical business.
Although we can't know the specific level and timing of future NOI, we can estimate expected NOI given a certain time horizon for achieving it. Justifying this expectation is an integral part of our planning process.
