Travelers

Analyst Listing

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

Broker	Analyst	Analyst Email
William Blair	Adam Klauber	aklauber@williamblair.com
Raymond James	C. Gregory Peters	greg.peters@raymondjames.com
BMO Capital Markets	Charles J. Sebaski	charles.sebaski@bmo.com
Piper Jaffray	Daniel D. Farrell	daniel.d.farrell@pjc.com
Wells Fargo Securities	Elyse Greenspan	elyse.greenspan@wellsfargo.com
Atlantic Equities	John Heagerty	j.heagerty@atlantic-equities.com
Bernstein Research	Josh Stirling	josh.stirling@bernstein.com
Deutsche Bank Research	Joshua Shanker	joshua.shanker@db.com
Janney Montgomery Scott	Larry Greenberg	lgreenberg@janney.com
RBC Capital Markets	Mark Dwelle	mark.dwelle@rbccm.com
JMP Securities	Matthew J. Carletti	mcarletti@jmpsecurities.com
Keefe Bruyette & Woods	Meyer Shields	mshields@kbw.com
Sandler O’Neill & Partners	Paul Newsome	pnewsome@sandleroneill.com
FBR Capital Markets & Co	Randy Binner	rbinner@fbr.com
Credit Suisse	Ryan Tunis	ryan.tunis@credit-suisse.com
CRT Capital Group	Vinay Misquith	vmisquith@sterneageecrt.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	3,357	2,807	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	3,434	4,202	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	103	94	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	40,949	40,671	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	8.20%	6.90%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	(1,830)	(278)	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	-54.51%	-9.90%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	9.03%	9.69%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	7.41%	7.30%
Enterprise value	EV_Market	40,545	41,602	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	39,422	40,359
Long-Run Growth	g = IR x ROIC	-4.47%	-0.68%	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	19.24%	15.69%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	0.00%	0.00%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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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 $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	1.51	1.51	-75.22%	131.47%	46.12%	21.77%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	7.85	9.63	-75.22%	131.47%	46.12%	21.77%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	12.08	14.82	-75.22%	131.47%	46.12%	21.77%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	11.81	9.90	-75.22%	131.47%	46.12%	21.77%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	7.85	9.63	-75.22%	131.47%	46.12%	21.77%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	0.99	1.02	-75.22%	131.47%	46.12%	21.77%

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