Southern Company

Analyst Listing

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

Broker Analyst Analyst Email
SunTrust Robinson Humphrey Ali Agha ali.agha@suntrust.com
Jefferies Anthony C. Crowdell acrowdell@jefferies.com
Mizuho Securities USA James Von Riesemann james.vonriesemann@us.mizuho-sc.com
Wells Fargo Securities Neil Kalton neil.kalton@wellsfargo.com
Guggenheim Securities Shahriar Pourreza shahriar.pourreza@guggenheimpartners.com
SunTrust Robinson Humphrey Ali Agha ali.agha@suntrust.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 3,021 3,311 NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)
Free Cash Flow FCF (1,286) (2,661) FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS
Tax Shield TS 274 355 TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income
Invested Capital IC 75,545 96,780 IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital
Return on Invested Capital ROIC 4.00% 3.42% ROIC\,=\,\frac { NOPLAT }{ IC }
Net Investment NetInv 15,984 24,158 NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation
Investment Rate IR 529.18%  729.61% IR\,=\,\frac {NetInv}{NOPLAT}
Weighted Average Cost of Capital
WACCMarket 4.74% 4.66% 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   4.09%   4.04%
Enterprise value
EVMarket 98,904 118,350 EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash
 EVBook    95,367  118,528
Long-Run Growth
g = IR x ROIC
  21.16%  24.96% 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   26.57%   25.65% M\,\,=\,\,\frac{EBIT}{SALES}
Depreciation/Amortization Rate D  34.01%  36.46% 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)

5.66  5.96  7.15%  10.21%  6.12%  7.31%

EV/EBITDA

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

14.04 14.76 7.15% 10.21% 6.12% 7.31%

EV/NOPLAT

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

32.74 35.74 7.15% 10.21% 6.12% 7.31%

EV/FCFOPS

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

-76.91 -44.48 7.15% 10.21% 6.12% 7.31%

EV/EBIT

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

21.28 23.23 7.15% 10.21% 6.12% 7.31%

EV/IC

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

1.31 1.22 7.15% 10.21% 6.12% 7.31%

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