Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Expand Energy Corp., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Analysis of the cash flow position reveals a volatile trajectory for both operating cash flow and free cash flow to the firm (FCFF) between 2021 and 2024. While 2022 represented a peak in operational cash generation, 2024 is characterized by a significant contraction in the cash available to the firm's capital providers.
- Operating Cash Flow Trends
- Net cash provided by operating activities exhibited a sharp increase from US$ 1,788 million in 2021 to a peak of US$ 4,125 million in 2022. Following this peak, a steady decline is observed, with figures dropping to US$ 2,380 million in 2023 and further receding to US$ 1,565 million in 2024. This represents a substantial reduction in operational liquidity over the final two years of the analyzed period.
- Free Cash Flow to the Firm (FCFF) Performance
- FCFF grew consistently from 2021 to 2023, rising from US$ 1,103 million to a high of US$ 3,175 million. However, 2024 saw a precipitous decline to US$ 108 million. The magnitude of this drop is particularly acute given that FCFF had remained strong in 2023 despite a concurrent decline in operating cash flow.
- Analysis of Cash Flow Divergence
- A significant divergence is noted in 2023, where FCFF surpassed net cash provided by operating activities, suggesting that capital expenditures were either negligible or offset by significant adjustments such as interest add-backs. Conversely, 2024 shows a stark contrast, with a large gap between operating cash flow and FCFF, indicating a surge in capital expenditures or other investment outflows that consumed nearly all operating cash inflows.
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Interest Paid, Net of Tax
Expand Energy Corp., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2 2024 Calculation
Interest paid, net of capitalized interest, tax = Interest paid, net of capitalized interest × EITR
= 93 × 15.10% = 14
The financial trajectory of net interest payments between 2021 and 2024 is characterized by an initial sharp spike followed by a sustained period of decline. This pattern indicates a significant increase in borrowing costs or debt acquisition in 2022, followed by a consistent reduction in net cash outflows related to interest through the end of 2024.
- Net Interest Payment Trends
- Interest paid, net of capitalized interest and tax, experienced a substantial increase from 37 million USD in 2021 to 115 million USD in 2022. Following this peak, a downward trend was established, with payments decreasing to 91 million USD in 2023 and further declining to 79 million USD in 2024. This represents a 31% reduction from the 2022 peak.
- Effective Income Tax Rate (EITR) Impact
- The effective income tax rate remained constant at 21% during 2021 and 2022, followed by a slight increase to 22.4% in 2023. A significant contraction occurred in 2024, where the rate fell to 15.1%. Since interest is reported net of tax, a lower EITR typically reduces the tax shield benefit, which would normally increase the net cost of interest. However, because the net interest paid continued to decrease in 2024 despite the lower tax rate, it is evident that the gross interest expense decreased significantly.
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Enterprise Value to FCFF Ratio, Current
Expand Energy Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 30,861) |
| Free cash flow to the firm (FCFF) | 108) |
| Valuation Ratio | |
| EV/FCFF | 285.86 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Chevron Corp. | 27.10 |
| ConocoPhillips | 22.73 |
| ExxonMobil Holdings Corp. | 29.37 |
| EV/FCFF, Sector | |
| Oil, Gas & Consumable Fuels | 23.90 |
| EV/FCFF, Industry | |
| Energy | 23.57 |
Based on: 10-K (reporting date: 2024-12-31).
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.
Enterprise Value to FCFF Ratio, Historical
Expand Energy Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||
| Enterprise value (EV)1 | 29,120) | 11,842) | 13,638) | 9,771) | |
| Free cash flow to the firm (FCFF)2 | 108) | 3,175) | 2,824) | 1,103) | |
| Valuation Ratio | |||||
| EV/FCFF3 | 269.74 | 3.73 | 4.83 | 8.86 | |
| Benchmarks | |||||
| EV/FCFF, Competitors4 | |||||
| Chevron Corp. | 18.98 | 14.85 | 8.27 | 13.33 | |
| ConocoPhillips | 16.31 | 15.38 | 7.43 | 10.72 | |
| ExxonMobil Holdings Corp. | 15.76 | 12.47 | 7.84 | 10.06 | |
| EV/FCFF, Sector | |||||
| Oil, Gas & Consumable Fuels | 16.71 | 13.63 | 7.91 | 11.15 | |
| EV/FCFF, Industry | |||||
| Energy | 16.61 | 13.96 | 8.54 | 11.54 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 29,120 ÷ 108 = 269.74
4 Click competitor name to see calculations.
The financial trajectory between 2021 and 2024 is characterized by an initial period of improving valuation efficiency followed by a severe divergence in the final fiscal year. While the company experienced growth in both enterprise value and cash flow generation during the first three years, the 2024 period shows a drastic shift in the relationship between these two metrics.
- Enterprise Value Trends
- The enterprise value exhibited a general upward trend, rising from US$ 9,771 million in 2021 to US$ 11,842 million in 2023, before increasing sharply to US$ 29,120 million by the end of 2024. This final increase represents a growth of approximately 145% over the 2023 valuation.
- Free Cash Flow to the Firm (FCFF) Performance
- FCFF demonstrated strong growth from 2021 through 2023, increasing from US$ 1,103 million to US$ 3,175 million. However, this growth trend reversed abruptly in 2024, with FCFF dropping to US$ 108 million, representing a reduction of over 96% compared to the prior year.
- EV/FCFF Ratio Analysis
- The EV/FCFF ratio decreased consistently from 8.86 in 2021 to 3.73 in 2023, indicating that the firm was generating significantly more cash flow relative to its enterprise value over that period. In 2024, the ratio surged to 269.74. This extreme outlier is the result of the simultaneous spike in enterprise value and the collapse of free cash flow, signifying a substantial misalignment between the firm's current cash generation capabilities and its overall valuation.
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