Biogen Inc., FCFF calculation

US$ in thousands

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income attributable to Biogen Inc.	1,556,100)	4,000,600)	5,888,500)	4,430,700)	2,539,100)
Net income attributable to noncontrolling interests, net of tax	171,500)	59,900)	—)	43,300)	131,000)
Net noncash charges	2,057,800)	356,500)	990,800)	1,313,500)	1,645,500)
Changes in operating assets and liabilities, net	(145,500)	(187,200)	199,300)	400,200)	235,400)
Net cash flow provided by operating activities	3,639,900)	4,229,800)	7,078,600)	6,187,700)	4,551,000)
Cash paid during the year for interest, net of tax¹	272,376)	218,978)	204,395)	189,453)	211,275)
Capitalized interest costs related to construction in progress, net of tax²	35,211)	52,356)	57,586)	42,066)	23,025)
Purchases of property, plant and equipment	(258,100)	(424,800)	(514,500)	(770,600)	(867,400)
Acquisitions of intangible assets	(18,800)	(52,000)	(155,000)	(3,000)	(975,400)
Free cash flow to the firm (FCFF)	3,670,587)	4,024,334)	6,671,081)	5,645,619)	2,942,500)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

^{1, 2} See details »

Net cash flow provided by operating activities: There is a notable upward trend in the net cash flow from operating activities from 2017 through 2019, with values increasing from approximately $4.55 billion in 2017 to about $7.08 billion in 2019. This indicates strengthening operational cash generation during this period. However, starting in 2020, the net cash flow decreases significantly to around $4.23 billion, and further declines to approximately $3.64 billion in 2021. This downward shift suggests a reduction in operating cash inflows in the most recent years under review.
Free cash flow to the firm (FCFF): Free cash flow follows a similar pattern to operating cash flow with an initial rise from around $2.94 billion in 2017 to nearly $6.67 billion in 2019. This growth aligns with improving liquidity and capital generation available for financing and investment activities. However, a decline is observed beginning in 2020, with figures dropping to roughly $4.02 billion, and decreasing slightly more to about $3.67 billion in 2021. This reduction in FCFF may reflect increased capital expenditures, changes in working capital, or reduced cash inflows from operations, impacting the firm's cash available for stakeholders.
Overall insight: The data reveals robust growth in operational cash generation and free cash flow through 2019, suggesting strong financial performance and efficiency in cash management during that timeframe. The subsequent decline in both metrics in 2020 and 2021 indicates a material shift that could be related to external economic conditions or internal factors affecting cash generation and usage. The downward trend in cash flows warrants further investigation to understand the underlying causes and to evaluate potential impacts on liquidity and financial flexibility.

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Biogen Inc., interest paid, net of tax calculation

US$ in thousands

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Effective Income Tax Rate (EITR)
EITR¹	3.00%	19.70%	16.30%	22.10%	25.00%
Interest Paid, Net of Tax
Cash paid during the year for interest, before tax	280,800)	272,700)	244,200)	243,200)	281,700)
Less: Cash paid during the year for interest, tax²	8,424)	53,722)	39,805)	53,747)	70,425)
Cash paid during the year for interest, net of tax	272,376)	218,978)	204,395)	189,453)	211,275)
Interest Costs Capitalized, Net of Tax
Capitalized interest costs related to construction in progress, before tax	36,300)	65,200)	68,800)	54,000)	30,700)
Less: Capitalized interest costs related to construction in progress, tax³	1,089)	12,844)	11,214)	11,934)	7,675)
Capitalized interest costs related to construction in progress, net of tax	35,211)	52,356)	57,586)	42,066)	23,025)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ See details »

² 2021 Calculation
Cash paid during the year for interest, tax = Cash paid during the year for interest × EITR
= 280,800 × 3.00% = 8,424

³ 2021 Calculation
Capitalized interest costs related to construction in progress, tax = Capitalized interest costs related to construction in progress × EITR
= 36,300 × 3.00% = 1,089

Effective Income Tax Rate (EITR): The effective income tax rate showed a declining trend over the analyzed period. Starting at 25% in 2017, it decreased significantly to 3% by 2021. The most notable drops occurred between 2018 and 2019, where it fell from 22.1% to 16.3%, and then from 2020 to 2021, with a substantial reduction from 19.7% to 3%. This persistent decrease in tax rate could indicate changes in tax planning strategies, legislative impacts, or shifts in income sources.
Cash Paid During the Year for Interest, Net of Tax (US$ in thousands): The cash paid for interest, net of tax, experienced some fluctuations but generally an upward trend. Beginning at $211,275 thousand in 2017, it decreased slightly in 2018 to $189,453 thousand before rising steadily each subsequent year to reach $272,376 thousand in 2021. The notable increase in 2021 suggests higher interest expenses or increased debt levels during that period.
Capitalized Interest Costs Related to Construction in Progress, Net of Tax (US$ in thousands): Capitalized interest costs related to construction in progress fluctuated notably across the years. The value increased from $23,025 thousand in 2017 to a peak of $57,586 thousand in 2019, indicating increased capital projects or construction activity during these periods. Subsequently, there was a decline to $35,211 thousand in 2021, after a slight decrease from $52,356 thousand in 2020. This pattern suggests variability in the scale or stage of ongoing construction projects.

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

Selected Financial Data (US$ in thousands)
Enterprise value (EV)	42,927,124)
Free cash flow to the firm (FCFF)	3,670,587)
Valuation Ratio
EV/FCFF	11.69
Benchmarks
EV/FCFF, Competitors¹
AbbVie Inc.	19.40
Amgen Inc.	15.29
Bristol-Myers Squibb Co.	8.74
Danaher Corp.	27.49
Eli Lilly & Co.	177.53
Gilead Sciences Inc.	13.82
Johnson & Johnson	17.31
Merck & Co. Inc.	11.56
Pfizer Inc.	14.40
Regeneron Pharmaceuticals Inc.	13.05
Thermo Fisher Scientific Inc.	20.11
Vertex Pharmaceuticals Inc.	—
EV/FCFF, Sector
Pharmaceuticals, Biotechnology & Life Sciences	18.36
EV/FCFF, Industry
Health Care	17.81

Based on: 10-K (reporting date: 2021-12-31).

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.

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

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in thousands)
Enterprise value (EV)¹	35,890,898)	44,904,281)	60,176,147)	67,941,735)	75,435,189)
Free cash flow to the firm (FCFF)²	3,670,587)	4,024,334)	6,671,081)	5,645,619)	2,942,500)
Valuation Ratio
EV/FCFF³	9.78	11.16	9.02	12.03	25.64
Benchmarks
EV/FCFF, Competitors⁴
AbbVie Inc.	13.18	13.95	—	—	—
Amgen Inc.	15.82	14.51	—	—	—
Bristol-Myers Squibb Co.	10.52	11.63	—	—	—
Danaher Corp.	28.25	30.66	—	—	—
Eli Lilly & Co.	38.37	39.01	—	—	—
Gilead Sciences Inc.	8.42	13.60	—	—	—
Johnson & Johnson	21.25	20.75	—	—	—
Merck & Co. Inc.	23.27	34.12	—	—	—
Pfizer Inc.	8.40	21.74	—	—	—
Regeneron Pharmaceuticals Inc.	9.81	25.74	—	—	—
Thermo Fisher Scientific Inc.	33.14	26.14	—	—	—
Vertex Pharmaceuticals Inc.	22.47	16.00	—	—	—
EV/FCFF, Sector
Pharmaceuticals, Biotechnology & Life Sciences	16.12	19.74	—	—	—
EV/FCFF, Industry
Health Care	17.18	18.55	—	—	—

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ See details »

² See details »

³ 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 35,890,898 ÷ 3,670,587 = 9.78

⁴ Click competitor name to see calculations.

Enterprise Value (EV): The enterprise value shows a consistent decreasing trend over the five-year period. Starting from approximately $75.4 billion at the end of 2017, it declines each year to reach about $35.9 billion by the end of 2021. This represents a reduction of more than 50% in enterprise value, indicating a substantial contraction in market valuation or perceived company worth during the timeframe analyzed.
Free Cash Flow to the Firm (FCFF): The free cash flow to the firm exhibits overall growth in the initial three years, from about $2.94 billion in 2017 to approximately $6.67 billion in 2019. However, following this peak, FCFF declines for two consecutive years, falling to around $3.67 billion by 2021. Despite the drop from the 2019 high, the 2021 FCFF remains above the 2017 level, suggesting some volatility but a relatively improved cash generation capacity compared to the start of the period.
EV to FCFF Ratio: The EV/FCFF valuation ratio demonstrates significant fluctuation. Initially very high at 25.64 in 2017, it declines sharply to 9.02 by 2019. There is a brief increase to 11.16 in 2020, followed by a decrease to 9.78 in 2021. These changes indicate variations in market valuation relative to cash flow generation: the ratio's initial drop suggests either an improving FCFF relative to EV or market revaluation, while the oscillations in the later years imply some instability or reassessment of financial prospects.

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Biogen Inc. (NASDAQ:BIIB)

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