Keurig Dr Pepper Inc., FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income attributable to KDP	2,146)	1,325)	1,254)	586)
Net (income) loss attributable to non-controlling interest	(1)	—)	—)	3)
Net noncash charges	378)	965)	854)	567)
Net change in operating assets and liabilities	351)	166)	366)	457)
Net cash provided by operating activities	2,874)	2,456)	2,474)	1,613)
Cash paid for interest, net of tax¹	366)	389)	386)	172)
Purchases of property, plant and equipment	(423)	(461)	(330)	(180)
Proceeds from sales of property, plant and equipment	122)	203)	247)	3)
Purchases of intangibles	(32)	(56)	(35)	—)
Right-of-use assets obtained in exchange for finance lease obligations	(408)	(90)	(71)	—)
Free cash flow to the firm (FCFF)	2,499)	2,441)	2,671)	1,608)

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).

¹ See details »

Net Cash Provided by Operating Activities: The net cash provided by operating activities shows an overall increasing trend from 2018 to 2021. Starting at 1,613 million US dollars in 2018, it rises significantly to 2,474 million in 2019. In 2020, the value remains relatively stable with a slight decrease to 2,456 million but rebounds in 2021 to reach the highest observed figure of 2,874 million. This pattern suggests improved operational cash generation capacity over the period, with a minor dip in 2020 likely influenced by external or internal factors.
Free Cash Flow to the Firm (FCFF): The free cash flow to the firm mirrors a similar trend to the net cash provided by operating activities. Initial figures start at 1,608 million US dollars in 2018, then increase notably to 2,671 million in 2019. There is a decrease to 2,441 million in 2020, followed by a modest recovery to 2,499 million in 2021. This trend indicates that after a significant rise in 2019, free cash flow experienced some contraction in 2020 but continued to remain relatively strong thereafter. The overall upward trajectory highlights the company’s ability to maintain solid cash flow after accounting for capital expenditures.

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Keurig Dr Pepper Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Effective Income Tax Rate (EITR)
EITR¹	23.30%	24.40%	26.00%	25.50%
Interest Paid, Net of Tax
Cash paid for interest, before tax	477)	515)	521)	231)
Less: Cash paid for interest, tax²	111)	126)	135)	59)
Cash paid for interest, net of tax	366)	389)	386)	172)

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).

¹ See details »

² 2021 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 477 × 23.30% = 111

Effective Income Tax Rate (EITR): The effective income tax rate shows a generally decreasing trend over the four-year period. Starting at 25.5% at the end of 2018, it slightly increased to 26% in 2019, but then consistently declined to 24.4% in 2020 and further to 23.3% in 2021. This decline may indicate improvements in tax strategies, changes in tax legislation, or variations in the company’s taxable income composition.
Cash Paid for Interest, Net of Tax: The cash paid for interest, net of tax, exhibits a rising trend from 2018 through 2020, increasing substantially from $172 million in 2018 to $386 million in 2019 and slightly higher to $389 million in 2020. However, in 2021, there is a modest decrease to $366 million. This pattern suggests that the company increased its interest-bearing liabilities or cost of debt in 2019 and 2020, followed by some reduction in interest payments in 2021, which might reflect refinancing, debt repayments, or changes in interest rates.

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Keurig Dr Pepper Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	66,533)
Free cash flow to the firm (FCFF)	2,499)
Valuation Ratio
EV/FCFF	26.63
Benchmarks
EV/FCFF, Competitors¹
Coca-Cola Co.	54.08
Mondelēz International Inc.	22.74
PepsiCo Inc.	26.31
Philip Morris International Inc.	24.61
EV/FCFF, Sector
Food, Beverage & Tobacco	26.27
EV/FCFF, Industry
Consumer Staples	28.62

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.

Keurig Dr Pepper Inc., historical EV/FCFF calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	63,990)	57,004)	54,362)	51,224)
Free cash flow to the firm (FCFF)²	2,499)	2,441)	2,671)	1,608)
Valuation Ratio
EV/FCFF³	25.61	23.35	20.36	31.85
Benchmarks
EV/FCFF, Competitors⁴
Coca-Cola Co.	25.28	26.04	—	—
Mondelēz International Inc.	31.98	30.11	—	—
PepsiCo Inc.	33.08	30.09	—	—
Philip Morris International Inc.	16.35	16.31	—	—
EV/FCFF, Sector
Food, Beverage & Tobacco	24.71	24.26	—	—
EV/FCFF, Industry
Consumer Staples	20.90	23.26	—	—

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).

¹ See details »

² See details »

³ 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 63,990 ÷ 2,499 = 25.61

⁴ Click competitor name to see calculations.

Enterprise Value (EV): The enterprise value exhibited a consistent upward trend over the observed four-year period. Starting at 51,224 million USD in 2018, it increased to 54,362 million USD in 2019, then to 57,004 million USD in 2020, and finally reached 63,990 million USD by the end of 2021. This progression represents a total growth of approximately 25% over the period, indicating an increasing valuation of the company.
Free Cash Flow to the Firm (FCFF): Free cash flow to the firm showed variability within the timeframe. It rose significantly from 1,608 million USD in 2018 to 2,671 million USD in 2019, marking a substantial increase. Subsequently, FCFF decreased slightly to 2,441 million USD in 2020 and then experienced a marginal increase to 2,499 million USD in 2021. Overall, there is an upward trend from the initial value, but with a dip observed after 2019.
EV/FCFF Ratio: The ratio of enterprise value to free cash flow to the firm declined sharply from 31.85 in 2018 to 20.36 in 2019, indicating that the company's valuation relative to its free cash flow became more favorable for investors. Following 2019, the ratio increased to 23.35 in 2020 and further to 25.61 in 2021, suggesting a trend toward a more conservative valuation or possibly an increase in perceived risk or market conditions affecting valuation multiples. Nonetheless, the ratio remained below the initial 2018 level throughout the period.
Overall Analysis: The data reflects growth in enterprise value accompanied by fluctuations in free cash flow generation. The sharp increase in FCFF in 2019 improved valuation multiples significantly, but subsequent decreases in free cash flow and rising EV contributed to increasing EV/FCFF ratios in 2020 and 2021. This pattern may indicate changes in operational efficiency, investment strategies, or market perceptions impacting the financial metrics over time.

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Keurig Dr Pepper Inc. (NASDAQ:KDP)

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