United Technologies Corporation

Analyst Listing

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

Broker	Analyst	Analyst Email
Morningstar	Barbara Noverini	barbara.noverini@morningstar.com
Langenberg, LLC	Brian K. Langenberg	brian@langenberg-llc.com
Cowen & Company	Cai von Rumohr	cai.von-rumohr@cowen.com
Bernstein Research	Douglas S. Harned	douglas.harned@bernstein.com
Jefferies	Howard A. Rubel	hrubel@jefferies.com
Argus Research	John Eade	jeade@argusresearch.com
Credit Suisse	Julian Mitchell	julian.mitchell@credit-suisse.com
Deutsche Bank Research	Myles Walton	myles.walton@db.com
William Blair	Nicholas P. Heymann	nheymann@williamblair.com
CRT Capital Group	Peter Arment	parment@sterneageecrt.com
Atlantic Equities	Richard Radbourne	r.radbourne@atlantic-equities.com
Stifel Nicolaus	Robert P. McCarthy	mccarthyr@stifel.com
RBC Capital Markets	Robert Stallard	robert.stallard@rbccm.com
Wells Fargo Securities	Sam J. Pearlstein	sam.pearlstein@wellsfargo.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	5,286	5,085	$NOPLAT\, =\, EBIT\, x\, (1 \,-\, Avg \,\,Tax\,\, Rate\,\, on\,\, EBIT)$
Free Cash Flow	FCF	5,046	4,713	$FCF\,=NOPLAT\,+\,Non-Cash\,Expenses-\Delta NWC\,-\,NCS$
Tax Shield	TS	327	291	$TS\,=\,Interest\,\,Paid\,\,x\,\, Avg \,\,Tax\,\,Rate\,\, on\,\, Pre-Tax\,\, Income$
Invested Capital	IC	64,866	67,800	$IC\,=\,Fixed\,\,Operating\,\,Assets\,\,+\,\,Net\,\, Working\,\, Capital$
Return on Invested Capital	ROIC	8.15%	7.50%	$ROIC\,=\,\frac { NOPLAT }{ IC }$
Net Investment	NetInv	(2,460)	4,896	$NetInv\,=\,{ {IC}_{1}}-{{IC}_{0}}+Depreciation$
Investment Rate	IR	-46.54%	96.28%	$IR\,=\,\frac {NetInv}{NOPLAT}$
Weighted Average Cost of Capital	WACC_Market	6.43%	6.66%	$WACC\,=\,\frac { E }{ V } { R }_{ E }\,+\,\frac { P }{ V } { R }_{ P }\,+\,\frac { D }{ V } { R }_{ D }\left( 1- Avg\,\, Tax\,\,Rate\,\,on\,\,Pre-Tax\,\,Income \right)$
Weighted Average Cost of Capital	WACC_Book	8.26%	7.99%
Enterprise value	EV_Market	92,340	105,603	$EV\,=\,Market\,\,Cap\,\,Equity\,+\,\,Long\,\,Term\,\,Debt\,-\,Cash$
Enterprise value	EV_Book	92,703	103,190
Long-Run Growth	g = IR x ROIC	-3.79%	7.22%	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	14.44%	13.63%	$M\,\,=\,\,\frac{EBIT}{SALES}$
Depreciation/Amortization Rate	D	11.61%	20.05%	$D\,\,=\,\,\frac{D+A}{EBITDA}$

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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 $\frac {EV}{Sales} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(M)$	1.64	1.84	2.37%	5.15%	2.27%	2.27%
EV/EBITDA $\frac {EV}{EBITDA} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)\,(1\,-\,D)$	10.04	10.79	2.37%	5.15%	2.27%	2.27%
EV/NOPLAT $\frac {EV}{NOPLAT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}$	17.47	20.77	2.37%	5.15%	2.27%	2.27%
EV/FCF_OPS $\frac {EV}{FCF_{OPS}} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	18.30	22.41	2.37%	5.15%	2.27%	2.27%
EV/EBIT $\frac {EV}{EBIT} \,= \,\frac{ROIC\, -\, g}{ROIC\,(WACC\,-\,g)}\,(1\,-\,T)$	11.36	13.50	2.37%	5.15%	2.27%	2.27%
EV/IC $\frac {EV}{IC} \,= \,\frac{ROIC\, -\, g}{WACC\,-\,g}$	1.42	1.56	2.37%	5.15%	2.27%	2.27%

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