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AT&T Inc. (T)

Enterprise Value to FCFF (EV/FCFF)

Difficulty: Intermediate

AT&T Inc., FCFF calculation

USD $ in millions

	12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Net income attributable to AT&T
	Net income attributable to noncontrolling interest
	Net noncash charges
	Changes in operating assets and liabilities
	Net cash provided by operating activities
	Cash paid during the year for interest, net of tax¹
	Capitalized interest, net of tax²
	Capital expenditures
	Free cash flow to the firm (FCFF)

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 2015 to 2016 and from 2016 to 2017.

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

USD $ in millions

	12 months ended	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Effective Income Tax Rate (EITR)

	EITR¹
	Interest Paid, Net of Tax
	Cash paid during the year for interest, before tax
	Less: Cash paid during the year for interest, tax²
	Cash paid during the year for interest, net of tax
	Interest Costs Capitalized, Net of Tax
	Capitalized interest, before tax
	Less: Capitalized interest, tax³
	Capitalized interest, net of tax

2017 Calculations

² Cash paid during the year for interest, tax = Cash paid during the year for interest × EITR
= hidden × hidden = hidden

³ Capitalized interest, tax = Capitalized interest × EITR
= hidden × hidden = hidden

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

Selected Financial Data (USD $ in millions)
Enterprise value (EV)
Free cash flow to the firm (FCFF)
Ratio
EV/FCFF
Benchmarks
EV/FCFF, Competitors
Verizon Communications Inc.
EV/FCFF, Sector
Fixed Line Telecommunications

If company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.

Otherwise, if company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

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

		Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013
	Selected Financial Data (USD $ in millions)
	Enterprise value (EV)¹
	Free cash flow to the firm (FCFF)²
	Ratio
	EV/FCFF³
	Benchmarks
	EV/FCFF, Competitors
	Verizon Communications Inc.
	EV/FCFF, Sector
	Fixed Line Telecommunications

2017 Calculations

³ EV/FCFF = EV ÷ FCFF
= hidden ÷ hidden = hidden

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 declined from 2015 to 2016 and from 2016 to 2017.

	AT&T Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality