Zoetis Inc., FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income attributable to Zoetis Inc.	2,344)	2,114)	2,037)	1,638)	1,500)
Net loss attributable to noncontrolling interests	(4)	(3)	(3)	(2)	—)
Net noncash charges	525)	500)	522)	575)	446)
Other changes in assets and liabilities, net of acquisitions and divestitures	(512)	(699)	(343)	(85)	(151)
Net cash provided by operating activities	2,353)	1,912)	2,213)	2,126)	1,795)
Cash paid during the period for interest, net of capitalized interest, net of tax¹	235)	192)	207)	211)	206)
Capitalized interest expense, net of tax²	22)	17)	16)	14)	11)
Capital expenditures	(732)	(586)	(477)	(453)	(460)
Free cash flow to the firm (FCFF)	1,878)	1,535)	1,959)	1,898)	1,552)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

^{1, 2} See details »

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Zoetis Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Zoetis Inc. FCFF decreased from 2021 to 2022 but then increased from 2022 to 2023 not reaching 2021 level.

Zoetis Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Effective Income Tax Rate (EITR)
EITR¹	20.30%	20.50%	18.20%	18.00%	16.70%
Interest Paid, Net of Tax
Cash paid during the period for interest, net of capitalized interest, before tax	295)	242)	253)	257)	247)
Less: Cash paid during the period for interest, net of capitalized interest, tax²	60)	50)	46)	46)	41)
Cash paid during the period for interest, net of capitalized interest, net of tax	235)	192)	207)	211)	206)
Interest Costs Capitalized, Net of Tax
Capitalized interest expense, before tax	27)	21)	20)	17)	13)
Less: Capitalized interest expense, tax³	5)	4)	4)	3)	2)
Capitalized interest expense, net of tax	22)	17)	16)	14)	11)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ See details »

² 2023 Calculation
Cash paid during the period for interest, net of capitalized interest, tax = Cash paid during the period for interest, net of capitalized interest × EITR
= 295 × 20.30% = 60

³ 2023 Calculation
Capitalized interest expense, tax = Capitalized interest expense × EITR
= 27 × 20.30% = 5

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Zoetis Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	79,781)
Free cash flow to the firm (FCFF)	1,878)
Valuation Ratio
EV/FCFF	42.49
Benchmarks
EV/FCFF, Competitors¹
AbbVie Inc.	13.75
Amgen Inc.	23.22
Bristol-Myers Squibb Co.	8.41
Danaher Corp.	36.24
Eli Lilly & Co.	680.27
Gilead Sciences Inc.	12.09
Johnson & Johnson	18.36
Merck & Co. Inc.	38.04
Pfizer Inc.	32.94
Regeneron Pharmaceuticals Inc.	24.64
Thermo Fisher Scientific Inc.	29.48
EV/FCFF, Sector
Pharmaceuticals, Biotechnology & Life Sciences	27.29
EV/FCFF, Industry
Health Care	23.62

Based on: 10-K (reporting date: 2023-12-31).

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.

Zoetis Inc., historical EV/FCFF calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	88,543)	83,977)	96,445)	82,629)	73,350)
Free cash flow to the firm (FCFF)²	1,878)	1,535)	1,959)	1,898)	1,552)
Valuation Ratio
EV/FCFF³	47.16	54.71	49.22	43.54	47.27
Benchmarks
EV/FCFF, Competitors⁴
AbbVie Inc.	14.89	12.15	13.18	13.95	11.60
Amgen Inc.	22.22	16.01	15.82	14.51	16.05
Bristol-Myers Squibb Co.	9.14	13.87	10.52	11.63	23.39
Danaher Corp.	36.34	25.74	28.25	30.66	37.11
Eli Lilly & Co.	655.33	59.14	38.37	39.01	36.26
Gilead Sciences Inc.	13.41	13.58	8.42	13.60	9.78
Johnson & Johnson	19.30	23.80	21.25	20.75	19.31
Merck & Co. Inc.	37.84	19.09	23.27	34.12	20.46
Pfizer Inc.	32.24	9.15	8.40	21.74	19.44
Regeneron Pharmaceuticals Inc.	23.99	17.96	9.81	25.74	19.54
Thermo Fisher Scientific Inc.	28.85	31.61	33.14	26.14	28.88
EV/FCFF, Sector
Pharmaceuticals, Biotechnology & Life Sciences	27.50	18.37	16.44	20.25	19.59
EV/FCFF, Industry
Health Care	23.96	18.01	17.46	18.09	18.44

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ See details »

² See details »

³ 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 88,543 ÷ 1,878 = 47.16

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.	Zoetis Inc. EV/FCFF ratio increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Zoetis Inc. (NYSE:ZTS)

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