Baxter International Inc.

Analyst Listing

The following analysts provide coverage for the subject firm as of May 2016:

Broker	Analyst	Analyst Email
HC Wainwright	Andrew S. Fein	afein@hwco.com
Jefferies	Brian Abrahams	babrahams@jefferies.com
Piper Jaffray	Brooks E. West	brooks.e.west@pjc.com
Raymond James	Christopher J. Raymond	chris.raymond@raymondjames.com
Leerink Partners	Danielle Antalffy	danielle.antalffy@leerink.com
Cowen & Company	Eric Schmidt	eric.schmidt@cowen.com
Leerink Partners	Geoffrey C. Porges	geoffrey.porges@leerink.com
RBC Capital Markets	Glenn Novarro	glenn.novarro@rbccm.com
BMO Capital Markets	Joanne K. Wuensch	joanne.wuensch@bmo.com
William Blair	John Sonnier	jsonnier@williamblair.com
Cowen & Company	Joshua Jennings	josh.jennings@cowen.com
Piper Jaffray	Joshua Schimmer	joshua.e.schimmer@pjc.com
Raymond James	Lawrence S. Keusch	lawrence.keusch@raymondjames.com
BMO Capital Markets	M. Ian Somaiya	ian.somaiya@bmo.com
William Blair	Margaret Kaczor	mkaczor@williamblair.com
Evercore ISI	Mark Schoenebaum	mark.schoenebaum@evercoreisi.com
Credit Suisse	Matthew Keeler	matthew.keeler@credit-suisse.com
Keefe Bruyette & Woods	Meyer Shields	mshields@kbw.com
RBC Capital Markets	Michael J. Yee	michael.yee@rbccm.com
Stifel Nicolaus	Rick Wise	wiser@stifel.com
Guggenheim Securities	William Tanner	btanner@fbr.com

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Primary Input Data

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Derived Input Data

Derived Input	Label	2015 Value	2016 Value	Equational Form
Net Operating Profit Less Adjusted Taxes	NOPLAT	447	747	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	736	935	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	22	(0)	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	15,225	12,802	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	2.94%	5.83%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	(3,891)	(1,671)	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	-870.08%	-223.74%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	9.58%	10.97%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	6.54%	7.05%
Enterprise value	EV_Market	18,372	23,734	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	17,467	23,904
Long-Run Growth	g = IR x ROIC	-25.56%	-13.05%	Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
Long-Run Growth	g = % $\Delta$ GDP	2.50%	2.50%
Margin from Operations	M	6.90%	11.31%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	52.45%	39.56%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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Valuation Multiple Outcomes

The outcomes presented in this study are the result of original input data, derived data, and synthesized inputs.

Equational Form	Observed Value		Single-stage multiple g solution		Two-stage valuation model g solution
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	1.84	2.34	41.71%	16.98%	20.75%	13.80%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	12.70	12.49	41.71%	16.98%	20.75%	13.80%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	41.08	31.78	41.71%	16.98%	20.75%	13.80%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	24.96	25.38	41.71%	16.98%	20.75%	13.80%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	26.70	20.66	41.71%	16.98%	20.75%	13.80%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	1.21	1.85	41.71%	16.98%	20.75%	13.80%