Diamondback Energy Inc., FCFE calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income (loss) attributable to Diamondback Energy, Inc.	2,182)	(4,517)	240)	846)	482)
Net (income) loss attributable to non-controlling interest	94)	(155)	75)	99)	34)
Net noncash charges	1,632)	6,693)	2,586)	615)	420)
Changes in operating assets and liabilities	36)	97)	(167)	5)	(48)
Net cash provided by operating activities	3,944)	2,118)	2,734)	1,565)	889)
Drilling, completions and infrastructure additions to oil and natural gas properties	(1,457)	(1,719)	(2,677)	(1,461)	(793)
Additions to midstream assets	(30)	(140)	(244)	(204)	(68)
Proceeds from borrowings under credit facilities	1,313)	1,130)	2,350)	2,652)	754)
Repayments under credit facilities	(1,000)	(1,478)	(3,718)	(1,242)	(384)
Repayment on Energen’s credit facility	—)	—)	—)	(559)	—)
Proceeds from senior notes	2,200)	997)	3,469)	1,062)	—)
Repayment of senior notes	(3,193)	(239)	(1,250)	—)	—)
Premium on extinguishment of debt	(178)	(2)	(44)	—)	—)
Free cash flow to equity (FCFE)	1,599)	667)	620)	1,813)	398)

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).

Net cash provided by operating activities: The net cash from operating activities exhibited a general upward trend over the period from 2017 to 2021. Initially, the value increased significantly from 889 million USD in 2017 to 1565 million USD in 2018 and further surged to 2734 million USD in 2019, indicating improved operational cash generation. However, a decline occurred in 2020, with the net cash decreasing to 2118 million USD. This was followed by a strong recovery in 2021, reaching the highest value of the period at 3944 million USD.
Free cash flow to equity (FCFE): Free cash flow to equity showed considerable volatility across the five years. Starting at 398 million USD in 2017, FCFE sharply increased to 1813 million USD in 2018, reflecting enhanced capacity to generate cash available to equity holders. The following years witnessed a decline to 620 million USD in 2019 and a slight recovery to 667 million USD in 2020, signaling fluctuations possibly due to varying capital expenditures or changes in working capital. In 2021, FCFE improved notably again to 1599 million USD, although it remained below the peak observed in 2018.
Overall analysis: Operating cash flow displayed a clear overall positive trajectory with a temporary setback in 2020, while FCFE experienced more pronounced fluctuations but ended the period on a strong note. The divergence in trends between operating cash flow and FCFE in some years could suggest periods of increased investment or financial policy changes impacting cash available to equity shareholders. The strong rebound in both measures in 2021 highlights improved operational performance and financial flexibility.

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Diamondback Energy Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	175,998,577
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)	1,599)
FCFE per share	9.09
Current share price (P)	163.55
Valuation Ratio
P/FCFE	18.00
Benchmarks
P/FCFE, Competitors¹
Chevron Corp.	14.49
ConocoPhillips	13.34
Exxon Mobil Corp.	18.58
P/FCFE, Sector
Oil, Gas & Consumable Fuels	24.11
P/FCFE, Industry
Energy	24.80

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

¹ Click competitor name to see calculations.

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

Diamondback Energy Inc., historical P/FCFE calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
No. shares of common stock outstanding¹	177,414,969	158,015,647	158,284,486	164,381,522	98,167,289
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)²	1,599)	667)	620)	1,813)	398)
FCFE per share³	9.01	4.22	3.92	11.03	4.05
Share price^1, 4	127.89	69.06	59.48	105.29	125.15
Valuation Ratio
P/FCFE⁵	14.19	16.36	15.19	9.55	30.88
Benchmarks
P/FCFE, Competitors⁶
Chevron Corp.	32.05	21.61	—	—	—
ConocoPhillips	10.61	497.58	—	—	—
Exxon Mobil Corp.	19.82	13.70	—	—	—
P/FCFE, Sector
Oil, Gas & Consumable Fuels	19.75	18.79	—	—	—
P/FCFE, Industry
Energy	20.81	18.38	—	—	—

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 Data adjusted for splits and stock dividends.

² See details »

³ 2021 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,599,000,000 ÷ 177,414,969 = 9.01

⁴ Closing price as at the filing date of Diamondback Energy Inc. Annual Report.

⁵ 2021 Calculation
P/FCFE = Share price ÷ FCFE per share
= 127.89 ÷ 9.01 = 14.19

⁶ Click competitor name to see calculations.

Share Price Trend: The share price experienced a decline from 125.15 US$ at the end of 2017 to 59.48 US$ by the end of 2019, reflecting a significant decrease over two years. In 2020, the price slightly recovered to 69.06 US$, followed by a notable increase reaching 127.89 US$ in 2021, surpassing the initial 2017 level.
FCFE per Share Trend: Free Cash Flow to Equity (FCFE) per share showed considerable volatility. It initially rose sharply from 4.05 US$ in 2017 to a peak of 11.03 US$ in 2018. This was followed by a decline to 3.92 US$ in 2019, then a slight uptick to 4.22 US$ in 2020. In 2021, FCFE per share increased significantly again, reaching 9.01 US$.
P/FCFE Ratio Movement: The price to FCFE ratio decreased substantially from 30.88 in 2017 to 9.55 in 2018, indicating that the market price became more aligned with FCFE despite rising FCFE per share during that period. Afterwards, the ratio increased to 15.19 in 2019 and peaked at 16.36 in 2020, suggesting a relative increase in valuation multiples or reduced FCFE growth. In 2021, the ratio moderately declined to 14.19, indicating a slightly more attractive valuation relative to FCFE than the previous two years.
Overall Analysis: The data shows a period of volatility with an initial share price drop alongside fluctuating FCFE per share. After a low point in 2019, both share price and FCFE per share displayed recovery and growth by 2021, although market valuation multiples (P/FCFE) suggest a correction from the undervaluation seen in 2018. The trends indicate that investor sentiment and cash flow generation improved markedly in 2021, reflecting stronger financial performance and market confidence relative to the earlier years.

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Diamondback Energy Inc. (NASDAQ:FANG)

Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)

Price to FCFE Ratio, Current

Price to FCFE Ratio, Historical