A company has a high debt load and is paying off a significant portion of its principal each year. How do you account for this in a DCF?

Trick question. You don’t account for this at all in an Unlevered DCF, because paying off debt principal shows up in Cash Flow from Financing on the Cash Flow Statement – but we only take into account EBIT * (1 – Tax Rate), and then a few items from Cash Flow from Operations, and then subtract Capital Expenditures to get to Unlevered Free Cash Flow.