Enterprise Value to FCFF (EV/FCFF)
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Anadarko Petroleum Corp. pages available for free this week:
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
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Free Cash Flow to The Firm (FCFF)
Anadarko Petroleum Corp., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1, 2 See details »
- Operating Activities Cash Flow
- The net cash provided by operating activities showed a generally positive trend from 2012 to 2014, increasing from 8,339 million USD in 2012 to 8,888 million USD in 2013, before slightly declining to 8,466 million USD in 2014. However, a notable reversal occurred in 2015 when this cash flow turned significantly negative, reaching -1,877 million USD. This negative cash flow in 2015 indicates operational difficulties or increased costs impacting cash generation. The following year, 2016, showed a recovery to positive cash flow levels at 3,000 million USD, though still substantially lower than the early years.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm exhibited high volatility over the analyzed period. Starting at 1,721 million USD in 2012, it slightly decreased to 1,560 million USD in 2013. A decline was observed in 2014 with FCFF turning negative (-477 million USD), which deepened substantially in 2015, reaching -6,416 million USD. This sharp decline suggests significant capital expenditures or operational challenges severely affecting free cash flow. By 2016, FCFF showed signs of improvement, recovering to a positive value of 206 million USD, though still considerably reduced compared to earlier years.
- Overall Trends and Insights
- The data presents a pattern of initial stability and strong cash flow generation from operating activities and free cash flow in the early years, followed by a marked deterioration beginning in 2014 and culminating in a substantial negative impact in 2015. This likely reflects increased operational costs, investment outlays, or external market pressures. The partial recovery observed in 2016 suggests some mitigation of these adverse effects, but cash flows remained below earlier peak levels, indicating ongoing financial challenges impacting cash generation capability.
Interest Paid, Net of Tax
Anadarko Petroleum Corp., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
2 2016 Calculation
Cash paid for interest, net of amounts capitalized, tax = Cash paid for interest, net of amounts capitalized × EITR
= × =
3 2016 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibited significant variability over the five-year period. Starting at 31% in 2012, it increased sharply to 55% in 2013, indicating a considerable rise in tax burden that year. Subsequently, the rate decreased to 35% in 2014, followed by a continued decline to 30% in 2015 and further to 27% in 2016. Overall, the trend suggests a peak in the tax rate in 2013 with a gradual reduction thereafter.
- Cash Paid for Interest, Net of Amounts Capitalized, Net of Tax
- There was notable fluctuation in cash paid for interest across the examined years. The amount decreased from $472 million in 2012 to a low of $282 million in 2013, suggesting reduced interest expenses or changes in capital structure. It then rose to $448 million in 2014, followed by a sharp increase to $1,413 million in 2015, which marks the highest point in the period and could indicate increased borrowing or higher interest rates. In 2016, the amount dropped to $625 million, showing a significant reduction but still higher than the initial years.
- Capitalized Interest, Net of Tax
- Capitalized interest showed a downward trend from 2012 to 2016. Starting at $152 million, it declined moderately to $118 million in 2013 and then slightly increased to $131 million in 2014. Afterward, the capitalized interest decreased to $115 million in 2015 and further to $96 million in 2016. This pattern suggests a gradual reduction in the amount of interest being capitalized over time.
Enterprise Value to FCFF Ratio, Current
Anadarko Petroleum Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Chevron Corp. | |
| ConocoPhillips | |
| Exxon Mobil Corp. | |
| Occidental Petroleum Corp. | |
Based on: 10-K (reporting date: 2016-12-31).
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.
Enterprise Value to FCFF Ratio, Historical
Anadarko Petroleum Corp., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | ||||||
| Free cash flow to the firm (FCFF)2 | ||||||
| Valuation Ratio | ||||||
| EV/FCFF3 | ||||||
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Chevron Corp. | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Occidental Petroleum Corp. | ||||||
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
3 2016 Calculation
EV/FCFF = EV ÷ FCFF
= ÷ =
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value demonstrated relative stability from 2012 through 2014, with figures fluctuating marginally around the mid-53,000s million USD. There was a notable decline in 2015, dropping sharply to approximately 38,042 million USD. The value rebounded in 2016, increasing to 52,747 million USD, though it did not fully recover to the levels observed prior to the 2015 decrease.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm remained positive in 2012 and 2013, although it decreased from 1,721 million USD to 1,560 million USD. A significant downturn occurred beginning in 2014, turning negative at -477 million USD. The negative trend intensified substantially in 2015, reaching -6,416 million USD. In 2016, there was a partial recovery with FCFF improving to 206 million USD, returning to the positive territory but still far below the levels seen before the decline.
- EV/FCFF Ratio
- The valuation multiple based on enterprise value to free cash flow to the firm exhibited a general upward trend, starting at 31.46 in 2012 and increasing slightly to 34.66 in 2013. Data for 2014 and 2015 are unavailable, likely due to negative or zero FCFF values during these years which would render the ratio meaningless or undefined. A dramatic spike is observed in 2016, with a substantial increase in the ratio to 255.76, reflecting the combination of still relatively high enterprise value and a near break-even free cash flow amount.
- General Insights
- The period from 2012 to 2016 was characterized by initial financial stability followed by significant operational and financial challenges, as evidenced by the sharp declines in free cash flow and enterprise value during 2014 and 2015. The recovery in 2016, while positive, suggests the company was still managing the consequences of earlier negative cash flow performance. The extreme increase in the EV/FCFF ratio in 2016 warrants attention, as it may indicate market valuation adjustments or ongoing concerns regarding cash flow sustainability.