AmerisourceBergen Corp., FCFF calculation

US$ in thousands

12 months ended:	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Net income (loss) attributable to AmerisourceBergen Corporation	1,698,820)	1,539,932)	(3,408,716)	855,365)	1,658,405)	364,484)
Net (income) loss attributable to noncontrolling interests	(32,280)	4,676)	9,158)	(1,230)	(42,513)	—)
Net noncash charges	1,176,210)	754,656)	(662,430)	1,120,690)	(2,415)	672,502)
Changes in operating assets and liabilities, excluding the effects of acquisitions and divestitures	(139,662)	367,322)	6,269,028)	369,198)	(202,089)	467,152)
Net cash provided by operating activities	2,703,088)	2,666,586)	2,207,040)	2,344,023)	1,411,388)	1,504,138)
Interest paid, net of tax¹	167,707)	118,776)	96,749)	147,814)	122,386)	49,744)
Capital expenditures	(496,318)	(438,217)	(369,677)	(310,222)	(336,411)	(466,397)
Proceeds from sale of property and equipment	6,302)	14,439)	36,364)	1,295)	8,100)	—)
Free cash flow to the firm (FCFF)	2,380,779)	2,361,584)	1,970,476)	2,182,910)	1,205,463)	1,087,485)

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

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Operating Activities Cash Flow: The net cash provided by operating activities demonstrated a general upward trend over the six-year period. Starting at approximately 1.5 billion USD in 2017, there was a slight decrease in 2018 to about 1.41 billion USD. Subsequently, a significant increase was observed in 2019, reaching over 2.3 billion USD. Although the amount slightly decreased in 2020 to about 2.2 billion USD, the figures rebounded in 2021 and 2022, reaching approximately 2.67 billion USD and 2.7 billion USD, respectively. This indicates a strong operational cash-generating capability with some fluctuations.
Free Cash Flow to the Firm (FCFF): The free cash flow to the firm also displayed a positive growth trajectory with minor fluctuations. It increased from roughly 1.09 billion USD in 2017 to approximately 1.21 billion USD in 2018. A substantial rise occurred in 2019, with FCFF nearly doubling to over 2.18 billion USD. The subsequent years exhibited slight decreases and increases, with 2020 at approximately 1.97 billion USD, 2021 at 2.36 billion USD, and 2022 at approximately 2.38 billion USD. This pattern reflects effective capital expenditure management complementing the operating cash flows.
Overall Insights: Both cash flow metrics remain robust and generally aligned, indicating stable operational efficiency and effective capital investment strategies. Despite minor dips, the strong recovery in subsequent years demonstrates resilience and potential growth capability. The increase in FCFF in line with operational cash flow suggests sustainable free cash generation. These trends position the company favorably in terms of liquidity and ability to fund operations and expansion internally.

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AmerisourceBergen Corp., interest paid, net of tax calculation

US$ in thousands

12 months ended:	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Effective Income Tax Rate (EITR)
EITR¹	23.70%	30.50%	35.80%	11.70%	24.50%	60.30%
Interest Paid, Net of Tax
Interest paid, before tax	219,800)	170,900)	150,700)	167,400)	162,100)	125,300)
Less: Interest paid, tax²	52,093)	52,125)	53,951)	19,586)	39,715)	75,556)
Interest paid, net of tax	167,707)	118,776)	96,749)	147,814)	122,386)	49,744)

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

¹ See details »

² 2022 Calculation
Interest paid, tax = Interest paid × EITR
= 219,800 × 23.70% = 52,093

Effective Income Tax Rate (EITR): The effective income tax rate exhibited significant volatility over the observed periods. In the earliest year, it was notably high at 60.3%, indicating an unusually large tax burden relative to income. This rate subsequently dropped sharply to 24.5% in 2018 and further decreased to a low of 11.7% in 2019. However, the rate rebounded in 2020 to 35.8%, before gradually declining again to 30.5% in 2021 and 23.7% in 2022. This pattern suggests fluctuating tax impacts potentially driven by changes in tax regulations, earnings composition, or other one-time tax adjustments during these years.
Interest Paid, Net of Tax: Interest expenses, net of tax, showed an overall upward trend with some variability. Starting from approximately $49.7 million in 2017, there was a sharp increase to $122.4 million in 2018. This was followed by a moderate increase to $147.8 million in 2019. The amount decreased in 2020 to $96.7 million but then rose again in 2021 to $118.8 million, reaching the highest value of $167.7 million in 2022. This fluctuation might reflect changes in debt levels, interest rates, financing activities, or refinancing efforts undertaken by the company during this period.

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AmerisourceBergen Corp., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in thousands)
Enterprise value (EV)	41,299,807)
Free cash flow to the firm (FCFF)	2,380,779)
Valuation Ratio
EV/FCFF	17.35
Benchmarks
EV/FCFF, Competitors¹
Abbott Laboratories	33.55
Elevance Health Inc.	11.24
Intuitive Surgical Inc.	133.61
Medtronic PLC	23.75
UnitedHealth Group Inc.	12.39
EV/FCFF, Sector
Health Care Equipment & Services	17.64
EV/FCFF, Industry
Health Care	19.26

Based on: 10-K (reporting date: 2022-09-30).

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.

AmerisourceBergen Corp., historical EV/FCFF calculation, comparison to benchmarks

	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019	Sep 30, 2018	Sep 30, 2017
Selected Financial Data (US$ in thousands)
Enterprise value (EV)¹	36,473,156)	30,235,610)	20,514,111)	18,995,014)	20,769,340)	18,335,740)
Free cash flow to the firm (FCFF)²	2,380,779)	2,361,584)	1,970,476)	2,182,910)	1,205,463)	1,087,485)
Valuation Ratio
EV/FCFF³	15.32	12.80	10.41	8.70	17.23	16.86
Benchmarks
EV/FCFF, Competitors⁴
Abbott Laboratories	23.24	23.47	36.94	—	—	—
Elevance Health Inc.	13.32	12.74	6.04	—	—	—
Intuitive Surgical Inc.	85.45	56.01	76.70	—	—	—
Medtronic PLC	20.32	33.84	21.43	—	—	—
UnitedHealth Group Inc.	19.30	22.21	15.82	—	—	—
EV/FCFF, Sector
Health Care Equipment & Services	20.44	23.51	18.77	—	—	—
EV/FCFF, Industry
Health Care	18.56	17.80	19.47	—	—	—

Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).

¹ See details »

² See details »

³ 2022 Calculation
EV/FCFF = EV ÷ FCFF
= 36,473,156 ÷ 2,380,779 = 15.32

⁴ Click competitor name to see calculations.

Enterprise Value (EV): The enterprise value displayed a general upward trend from 2017 to 2022. Starting at approximately 18.3 billion USD in 2017, it increased to around 20.8 billion USD by 2018, followed by a slight decline to about 19 billion USD in 2019. Subsequently, the value rose steadily, reaching 20.5 billion USD in 2020, with a significant jump to over 30.2 billion USD in 2021, and further increasing to roughly 36.5 billion USD in 2022. This pattern suggests growth in overall company valuation, particularly strong in the last two years.
Free Cash Flow to the Firm (FCFF): Free cash flow to the firm showed variability but an overall positive trajectory. The values started at approximately 1.09 billion USD in 2017, slightly increasing to 1.21 billion USD in 2018, then rising considerably to around 2.18 billion USD in 2019. There was a modest decline to about 1.97 billion USD in 2020, followed by an increase to approximately 2.36 billion USD in 2021, with a slight further increase to roughly 2.38 billion USD in 2022. This indicates generally improving cash-generating ability, with a dip observed in 2020.
EV to FCFF Ratio: The EV/FCFF ratio exhibited notable fluctuations over the period. It started relatively high at 16.86 in 2017 and maintained a similar level in 2018 at 17.23. A pronounced decrease occurred in 2019, dropping to 8.7, signaling a potentially more attractive valuation relative to cash flow during that time. Following this, the ratio increased again to 10.41 in 2020, then rose more substantially to 12.8 in 2021 and further to 15.32 in 2022. These changes imply varying market valuations relative to free cash flow, with a period of more favorable valuation in 2019 but a trend toward higher valuation multiples in recent years.
Overall Insights: The financial data indicates a company experiencing growth in enterprise value and maintaining a solid free cash flow generation capability. While cash flow fluctuations occurred, the overall increase in free cash flow suggests operational strength. The EV/FCFF ratio trend points to changing investor sentiment or market conditions, with the valuation relative to cash flows becoming more expensive in the later years after a period of relative undervaluation around 2019. This could reflect higher growth expectations or changes in risk perception over the observed period.

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AmerisourceBergen Corp. (NYSE:ABC)

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