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Boeing Co. (BA)

Enterprise Value to FCFF (EV/FCFF)

Difficulty: Intermediate

Boeing Co., FCFF calculation

USD $ in millions

	12 months ended	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Net earnings related to parent
	Net (earnings) losses related to noncontrolling interests
	Net noncash charges
	Changes in assets and liabilities
	Net cash provided by operating activities
	Interest payments, net of tax¹
	Interest capitalized, net of tax²
	Property, plant and equipment additions
	Property, plant and equipment reductions
	Purchase of distribution rights
	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 Boeing Co.’s suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Boeing Co.’s FCFF increased from 2016 to 2017 and from 2017 to 2018.

Boeing Co., interest paid, net of tax calculation

USD $ in millions

	12 months ended	Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	Effective Income Tax Rate (EITR)

	EITR¹
	Interest Paid, Net of Tax
	Interest payments, before tax
	Less: Interest payments, tax²
	Interest payments, net of tax
	Interest Costs Capitalized, Net of Tax
	Interest capitalized, before tax
	Less: Interest capitalized, tax³
	Interest capitalized, net of tax

2018 Calculations

² Interest payments, tax = Interest payments × EITR
= hidden × hidden = hidden

³ Interest capitalized, tax = Interest capitalized × EITR
= hidden × hidden = hidden

Boeing Co., 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
General Dynamics Corp.
Lockheed Martin Corp.
Northrop Grumman Corp.
Raytheon Co.
United Technologies Corp.
EV/FCFF, Sector
Aerospace & Defense
EV/FCFF, Industry
Industrials

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.

Boeing Co., historical EV/FCFF calculation, comparison to benchmarks

		Dec 31, 2018	Dec 31, 2017	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014
	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
	General Dynamics Corp.
	Lockheed Martin Corp.
	Northrop Grumman Corp.
	Raytheon Co.
	United Technologies Corp.
	EV/FCFF, Sector
	Aerospace & Defense
	EV/FCFF, Industry
	Industrials

2018 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.	Boeing Co.’s EV/FCFF ratio increased from 2016 to 2017 but then slightly declined from 2017 to 2018.

	Boeing Co.	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