National Oilwell Varco Inc., FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Net income (loss) attributable to Company	(769)	2,502)	2,327)	2,491)	1,994)
Net (income) loss attributable to noncontrolling interests	2)	5)	1)	(8)	(9)
Net noncash charges	2,565)	812)	581)	673)	322)
Change in operating assets and liabilities, net of acquisitions	(466)	(794)	488)	(2,536)	(164)
Net cash provided by operating activities	1,332)	2,525)	3,397)	620)	2,143)
Cash payments during the period for interest, net of tax¹	134)	72)	77)	28)	30)
Purchases of property, plant and equipment	(453)	(699)	(669)	(583)	(483)
Free cash flow to the firm (FCFF)	1,013)	1,898)	2,805)	65)	1,690)

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the National Oilwell Varco Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	National Oilwell Varco Inc. FCFF decreased from 2013 to 2014 and from 2014 to 2015.

National Oilwell Varco Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Earnings before tax (EBT)
Net income (loss) attributable to Company	(769)	2,502)	2,327)	2,491)	1,994)
Add: Net income attributable to noncontrolling interest	2)	5)	1)	(8)	(9)
Less: Income from discontinued operations	—)	52)	—)	—)	—)
Add: Income tax expense	178)	1,039)	1,018)	1,022)	937)
EBT	(589)	3,494)	3,346)	3,505)	2,922)
Effective Income Tax Rate (EITR)
EITR¹	-30.22%	29.74%	30.42%	29.16%	32.07%
Interest Paid, Net of Tax
Cash payments during the period for interest, before tax	103)	102)	111)	40)	44)
Less: Cash payments during the period for interest, tax²	(31)	30)	34)	12)	14)
Cash payments during the period for interest, net of tax	134)	72)	77)	28)	30)

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

¹ 2015 Calculation
EITR = 100 × Income tax expense ÷ EBT
= 100 × 178 ÷ -589 = -30.22%

² 2015 Calculation
Cash payments during the period for interest, tax = Cash payments during the period for interest × EITR
= 103 × -30.22% = -31

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National Oilwell Varco Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	14,260)
Free cash flow to the firm (FCFF)	1,013)
Valuation Ratio
EV/FCFF	14.08
Benchmarks
EV/FCFF, Competitors¹
Schlumberger Ltd.	17.38

Based on: 10-K (reporting date: 2015-12-31).

¹ Click competitor name to see calculations.

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

National Oilwell Varco Inc., historical EV/FCFF calculation, comparison to benchmarks

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	12,938)	22,310)	32,562)	29,001)	33,665)
Free cash flow to the firm (FCFF)²	1,013)	1,898)	2,805)	65)	1,690)
Valuation Ratio
EV/FCFF³	12.77	11.76	11.61	443.87	19.92
Benchmarks
EV/FCFF, Competitors⁴
Schlumberger Ltd.	—	—	—	—	—

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

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² See details »

³ 2015 Calculation
EV/FCFF = EV ÷ FCFF
= 12,938 ÷ 1,013 = 12.77

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	National Oilwell Varco Inc. EV/FCFF ratio increased from 2013 to 2014 and from 2014 to 2015.

National Oilwell Varco Inc. (NYSE:NOV)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical