BP PLC (BP)

Free Cash Flow to The Firm (FCFF)

BP PLC, FCFF calculation

USD $ in millions

12 months ended	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Net cash provided by operating activities	20,397	22,154	13,616	27,716	38,095
Interest paid, net of tax	720	742	912	604	809
Capital expenditure	(23,078)	(17,845)	(18,421)	(20,650)	(22,658)
Proceeds from disposals of fixed assets	9,991	3,500	7,492	1,715	918
Free cash flow to the firm (FCFF)	8,030	8,551	3,599	9,385	17,164

Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the BP PLC's suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	BP PLC's FCFF increased from 2010 to 2011 but then slightly declined from 2011 to 2012.

BP PLC, current EV/FCFF

	BP PLC	Oil & Gas
Selected Financial Data (USD $ in millions)
Enterprise value (EV)	167,148
Free cash flow to the firm (FCFF)	8,030
Ratio
EV/FCFF	20.82	48.49

If company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.

Otherwise, if company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

BP PLC, EV/FCFF calculation

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in millions)
Enterprise value (EV)¹	159,972	177,084	175,709	201,192	137,633
Free cash flow to the firm (FCFF)²	8,030	8,551	3,599	9,385	17,164
EV/FCFF, Comparison to Industry
BP PLC³	19.92	20.71	48.82	21.44	8.02
Industry, Oil & Gas	47.30	25.17	32.73	115.30	15.01

2012 Calculations

³ EV/FCFF = EV ÷ FCFF
= 159,972 ÷ 8,030 = 19.92

Ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	BP PLC's EV/FCFF ratio declined from 2010 to 2011 and from 2011 to 2012.