Free Cash Flow to The Firm (FCFF)

AbbVie 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 earnings 5,309  5,953  5,144  1,774  4,128 
Net noncash charges 4,642  2,777  1,887  2,563  1,481 
Changes in operating assets and liabilities, net of acquisitions (1,689) 504  (788) 658 
Cash flows from operating activities 9,960  7,041  7,535  3,549  6,267 
Interest paid, net of portion capitalized, net of tax1 755  744  415  314  219 
Acquisitions of property and equipment (529) (479) (532) (612) (491)
Free cash flow to the firm (FCFF) 10,186  7,306  7,418  3,251  5,995 
Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the AbbVie Inc.'s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. AbbVie Inc.'s FCFF declined from 2015 to 2016 but then increased from 2016 to 2017 exceeding 2015 level.

Top


Interest Paid, Net of Tax

AbbVie 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 31.30% 24.50% 22.60% 25.10% 22.60%
Interest Paid, Net of Tax
Interest paid, net of portion capitalized, before tax 1,099  986  536  419  283 
Less: Interest paid, net of portion capitalized, tax2 344  242  121  105  64 
Interest paid, net of portion capitalized, net of tax 755  744  415  314  219 

2017 Calculations

2 Interest paid, net of portion capitalized, tax = Interest paid, net of portion capitalized × EITR
= 1,099 × 31.30% = 344

Top


Enterprise Value to FCFF Ratio, Current

AbbVie Inc., current EV/FCFF calculation, comparison to benchmarks

 
Selected Financial Data (USD $ in millions)
Enterprise value (EV) 177,357 
Free cash flow to the firm (FCFF) 10,186 
Ratio
EV/FCFF 17.41
Benchmarks
EV/FCFF, Competitors
Abbott Laboratories 26.74
Allergan PLC 15.63
Amgen Inc. 11.10
Biogen Inc. 20.53
Bristol-Myers Squibb Co. 20.33
Celgene Corp. 13.54
Eli Lilly & Co. 20.39
Gilead Sciences Inc. 9.19
Johnson & Johnson 20.11
Merck & Co. Inc. 36.25
Pfizer Inc. 14.17
Regeneron Pharmaceuticals Inc. 32.44
EV/FCFF, Sector
Pharmaceuticals & Biotechnology 17.30
EV/FCFF, Industry
Health Care 18.00

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.

Top


Enterprise Value to FCFF Ratio, Historical

AbbVie 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)1 215,913  128,875  110,738  104,342  85,906 
Free cash flow to the firm (FCFF)2 10,186  7,306  7,418  3,251  5,995 
Ratio
EV/FCFF3 21.20 17.64 14.93 32.10 14.33
Benchmarks
EV/FCFF, Competitors
Abbott Laboratories 26.99 36.35 30.00 27.54 25.21
Allergan PLC 15.54 69.00 36.43 39.81 40.63
Amgen Inc. 11.16 11.23 11.51 13.76 16.49
Biogen Inc. 26.28 14.61 20.11 34.00 32.88
Bristol-Myers Squibb Co. 24.77 51.76 87.88 35.51 28.83
Celgene Corp. 14.13 23.00 35.79 34.75 30.18
Eli Lilly & Co. 19.87 23.22 43.88 24.69 12.89
Gilead Sciences Inc. 9.72 6.44 6.51 12.63 43.41
Johnson & Johnson 20.44 19.65 16.62 17.44 17.27
Merck & Co. Inc. 33.91 20.51 13.16 24.11 16.28
Pfizer Inc. 13.91 14.94 14.19 12.81 11.91
Regeneron Pharmaceuticals Inc. 32.57 38.99 57.44 97.24 73.58
EV/FCFF, Sector
Pharmaceuticals & Biotechnology 18.02 17.50 16.56 20.04 18.65
EV/FCFF, Industry
Health Care 18.52 18.16 16.97 19.42 17.84

2017 Calculations

3 EV/FCFF = EV ÷ FCFF
= 215,913 ÷ 10,186 = 21.20

Ratio Description The company
EV/FCFF Enterprise value to free cash flow to the firm is whole company valuation indicator. AbbVie Inc.'s EV/FCFF ratio increased from 2015 to 2016 and from 2016 to 2017.

Top