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	WACC_Market	19.91%	26.54%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	7.45%	7.66%
Enterprise value	EV_Market	34,980	41,299	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	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.
Long-Run Growth	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
Equational Form	12/31/2015	12/31/2016	12/31/2015	12/31/2016	12/31/2015	12/31/2016
EV/SALES $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	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/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	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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