NORFOLK

Analyst Listing

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

Broker Analyst Analyst Email
Credit Suisse Allison M. Landry allison.landry@credit-suisse.com
Susquehanna Financial Group Bascome Majors bascome.majors@sig.com
TD Securities Cherilyn Radbourne cherilyn.radbourne@tdsecurities.com
Bernstein Research David Vernon david.vernon@bernstein.com
Avondale Partners Donald Broughton dbroughton@avondalepartnersllc.com
BMO Capital Markets Fadi Chamoun fadi.chamoun@bmo.com
Cowen & Company Jason H. Seidl jason.seidl@cowen.com
Buckingham Research Jeffrey Kauffman jkauffman@buckresearch.com
RBC Capital Markets John Barnes john.barnes@rbccm.com
Stifel Nicolaus John G. Larkin jglarkin@stifel.com
Stephens Inc Justin Long justin.long@stephens.com
BB&T Capital Markets Mark A. Levin mlevin@bbandtcm.com
Nomura Research Matt Troy matt.troy@nomura.com
Raymond James Patrick Tyler Brown tyler.brown@raymondjames.com
Topeka Capital Markets Rick Paterson rp@topekacapitalmarkets.com
Deutsche Bank Research Robert Salmon robert.salmon@db.com
Wolfe Research Scott H. Group sgroup@wolferesearch.com
Scotiabank GBM Turan Quettawala turan.quettawala@scotiabank.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 1,871 1,996 NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)
Free Cash Flow FCF 492 1,147 FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS
Tax Shield TS 200 54 TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income
Invested Capital IC 32,029 32,553 IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital
Return on Invested Capital ROIC 5.84% 6.13% ROIC\,=\,\frac { NOPLAT }{ IC }
Net Investment NetInv 1,627 1,585 NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation
Investment Rate IR 86.94% 79.43% IR\,=\,\frac {NetInv}{NOPLAT}
Weighted Average Cost of Capital
WACCMarket 19.91% 26.54% 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)
 WACCBook  7.45%  7.66%
Enterprise value
EVMarket 34,980  41,299 EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook  33,628  39,991
Long-Run Growth
g = IR x ROIC
 5.08%   4.87% Long-run growth rates of the income variable are used in the Continuing Value portion of the valuation models.
g = % \Delta GDP   2.50%   2.50%
Margin from Operations M  27.39%  31.05% M\,\,=\,\,\frac{EBIT}{SALES}
Depreciation/Amortization Rate D  26.89%  25.68% 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

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)

 3.33  4.18 172.65%  102.53% 32.15%  35.60%

EV/EBITDA

\frac {EV}{EBITDA} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)

8.88 10.00 172.65% 102.53% 32.15% 35.60%

EV/NOPLAT

\frac {EV}{NOPLAT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}

18.69 20.70 172.65% 102.53% 32.15% 35.60%

EV/FCFOPS

\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

71.10 36.01 172.65% 102.53% 32.15% 35.60%

EV/EBIT

\frac {EV}{EBIT} \,= \,\frac{ROIC\,  -\,  g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)

12.15 13.45 172.65% 102.53% 32.15% 35.60%

EV/IC

\frac {EV}{IC} \,= \,\frac{ROIC\,  -\,  g}{WACC\,-\,g}

1.09 1.27  172.65% 102.53% 32.15% 35.60%

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