Suncor Energy Inc. (SU)

Free Cash Flow to The Firm (FCFF)

Suncor Energy Inc., FCFF calculation

USD $ in millions, translated from CAD C$

12 months ended	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Net earnings	2,795	4,233	3,826	1,095	1,746
Net noncash charges	7,043	5,327	3,017	1,580	1,900
(Increase) decrease in non-cash working capital	(954)	264	(1,362)	(214)	(1)
Cash flow provided by operating activities	8,883	9,823	5,481	2,462	3,645
Interest paid, net of tax	356	402	457	494	183
Capital and exploration expenditures	(6,988)	(6,737)	(6,005)	(4,059)	(6,525)
Free cash flow to the firm (FCFF)	2,251	3,489	(67)	(1,104)	(2,697)

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

Suncor Energy Inc., current EV/FCFF

	Suncor Energy Inc.	Oil & Gas
Selected Financial Data (USD $ in millions)
Enterprise value (EV)	55,946
Free cash flow to the firm (FCFF)	2,251
Ratio
EV/FCFF	24.86	48.88

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.

Suncor Energy Inc., EV/FCFF calculation

	Dec 31, 2012	Dec 31, 2011	Dec 31, 2010	Dec 31, 2009	Dec 31, 2008
Selected Financial Data (USD $ in millions, translated from CAD C$)
Enterprise value (EV)¹	52,093	63,564	84,415	60,953	23,117
Free cash flow to the firm (FCFF)²	2,251	3,489	(67)	(1,104)	(2,697)
EV/FCFF, Comparison to Industry
Suncor Energy Inc.³	23.14	18.22	–	–	–
Industry, Oil & Gas	47.30	25.17	32.73	115.30	15.01

2012 Calculations

³ EV/FCFF = EV ÷ FCFF
= 52,093 ÷ 2,251 = 23.14

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