Stock Analysis on Net
Stock Analysis on Net
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AT&T Inc. (NYSE:T)

Enterprise Value to FCFF (EV/FCFF)

Intermediate level

Free Cash Flow to The Firm (FCFF)

AT&T Inc., FCFF calculation

US$ in millions

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12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net income (loss) attributable to AT&T (5,176) 13,903  19,370  29,450  12,976 
Net income attributable to noncontrolling interest 1,355  1,072  583  397  357 
Net noncash charges 60,268  45,619  34,017  11,936  28,123 
Changes in operating assets and liabilities (13,317) (11,926) (10,368) (2,632) (2,112)
Net cash provided by operating activities 43,130  48,668  43,602  39,151  39,344 
Cash paid during the year for interest, net of tax1 6,507  7,050  6,816  4,185  3,833 
Capitalized interest, net of tax2 97  162  381  571  600 
Capital expenditures, including interest during construction (15,675) (19,635) (21,251) (21,550) (22,408)
Free cash flow to the firm (FCFF) 34,059  36,245  29,548  22,357  21,370 

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17).

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Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the AT&T Inc.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. AT&T Inc.’s FCFF increased from 2018 to 2019 but then slightly decreased from 2019 to 2020.

Interest Paid, Net of Tax

AT&T Inc., interest paid, net of tax calculation

US$ in millions

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12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Effective Income Tax Rate (EITR)
EITR1 21.00% 18.90% 22.70% 36.80% 32.70%
Interest Paid, Net of Tax
Cash paid during the year for interest, before tax 8,237  8,693  8,818  6,622  5,696 
Less: Cash paid during the year for interest, tax2 1,730  1,643  2,002  2,437  1,863 
Cash paid during the year for interest, net of tax 6,507  7,050  6,816  4,185  3,833 
Interest Costs Capitalized, Net of Tax
Capitalized interest, before tax 123  200  493  903  892 
Less: Capitalized interest, tax3 26  38  112  332  292 
Capitalized interest, net of tax 97  162  381  571  600 

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17).

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2 2020 Calculation
Cash paid during the year for interest, tax = Cash paid during the year for interest × EITR
= 8,237 × 21.00% = 1,730

3 2020 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= 123 × 21.00% = 26

Enterprise Value to FCFF Ratio, Current

AT&T Inc., current EV/FCFF calculation, comparison to benchmarks

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Selected Financial Data (US$ in millions)
Enterprise value (EV) 369,633 
Free cash flow to the firm (FCFF) 34,059 
Valuation Ratio
EV/FCFF 10.85
Benchmarks
EV/FCFF, Competitors1
T-Mobile US Inc. —
Verizon Communications Inc. 13.44
EV/FCFF, Sector
Telecommunication Services 17.17
EV/FCFF, Industry
Communication Services 29.23

Based on: 10-K (filing date: 2021-02-25).

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

AT&T Inc., historical EV/FCFF calculation, comparison to benchmarks

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 369,254  445,675  405,826  340,818  373,452 
Free cash flow to the firm (FCFF)2 34,059  36,245  29,548  22,357  21,370 
Valuation Ratio
EV/FCFF3 10.84 12.30 13.73 15.24 17.48
Benchmarks
EV/FCFF, Competitors4
T-Mobile US Inc. — — — — —
Verizon Communications Inc. 13.54 16.27 16.61 28.93 37.47
EV/FCFF, Sector
Telecommunication Services 16.63 15.51 16.91 16.02 27.53
EV/FCFF, Industry
Communication Services 25.70 24.67 23.29 24.51 24.84

Based on: 10-K (filing date: 2021-02-25), 10-K (filing date: 2020-02-20), 10-K (filing date: 2019-02-20), 10-K (filing date: 2018-02-20), 10-K (filing date: 2017-02-17).

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2 See details »

3 2020 Calculation
EV/FCFF = EV ÷ FCFF
= 369,254 ÷ 34,059 = 10.84

4 Click competitor name to see calculations.

Valuation ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. AT&T Inc.’s EV/FCFF ratio decreased from 2018 to 2019 and from 2019 to 2020.