Chevron Corp. (CVX)

Free Cash Flow to The Firm (FCFF)

Chevron Corp., FCFF calculation

USD $ in millions

12 months ended	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Net income attributable to Chevron Corporation	26,179	26,895	19,024	10,483	23,931
Net income attributable to noncontrolling interests	157	113	112	80	100
Net noncash charges	12,113	11,772	12,147	11,111	7,274
Net (increase) decrease in operating working capital	363	2,318	76	(2,301)	(1,673)
Net cash provided by operating activities	38,812	41,098	31,359	19,373	29,632
Interest paid on debt, net of capitalized interest, net of tax	–	–	20	–	–
Capital expenditures	(30,938)	(26,500)	(19,612)	(19,843)	(19,666)
Proceeds and deposits related to asset sales	2,777	3,517	1,995	2,564	1,491
Free cash flow to the firm (FCFF)	10,651	18,115	13,762	2,094	11,457

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

Chevron Corp., current EV/FCFF

	Chevron Corp.	Oil & Gas
Selected Financial Data (USD $ in millions)
Enterprise value (EV)	231,355
Free cash flow to the firm (FCFF)	10,651
Ratio
EV/FCFF	21.72	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.

Chevron Corp., 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	216,862	205,084	199,956	147,161	126,438
Free cash flow to the firm (FCFF)²	10,651	18,115	13,762	2,094	11,457
EV/FCFF, Comparison to Industry
Chevron Corp.³	20.36	11.32	14.53	70.28	11.04
Industry, Oil & Gas	47.30	25.17	32.73	115.30	15.01

2012 Calculations

³ EV/FCFF = EV ÷ FCFF
= 216,862 ÷ 10,651 = 20.36

Ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Chevron Corp.'s EV/FCFF ratio declined from 2010 to 2011 but then increased from 2011 to 2012 exceeding 2010 level.