Caterpillar Inc., FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Profit attributable to common stockholders	6,489)	2,998)	6,093)	6,147)	754)
Profit attributable to noncontrolling interests	4)	5)	1)	1)	5)
Net noncash charges	1,352)	3,741)	3,748)	4,487)	5,137)
Changes in assets and liabilities, net of acquisitions and divestitures	(647)	(417)	(2,930)	(4,077)	(194)
Net cash provided by operating activities	7,198)	6,327)	6,912)	6,558)	5,702)
Interest paid on short-term and long-term borrowings, net of tax¹	725)	815)	820)	830)	371)
Capital expenditures, excluding equipment leased to others	(1,093)	(978)	(1,056)	(1,276)	(898)
Expenditures for equipment leased to others	(1,379)	(1,137)	(1,613)	(1,640)	(1,438)
Proceeds from disposals of leased assets and property, plant and equipment	1,265)	772)	1,153)	936)	1,164)
Free cash flow to the firm (FCFF)	6,716)	5,799)	6,216)	5,408)	4,901)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ See details »

Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Caterpillar Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Caterpillar Inc. FCFF decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Caterpillar Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Effective Income Tax Rate (EITR)
EITR¹	21.20%	25.20%	22.40%	23.70%	67.20%
Interest Paid, Net of Tax
Interest paid on short-term and long-term borrowings, before tax	920)	1,089)	1,057)	1,088)	1,131)
Less: Interest paid on short-term and long-term borrowings, tax²	195)	274)	237)	258)	760)
Interest paid on short-term and long-term borrowings, net of tax	725)	815)	820)	830)	371)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ See details »

² 2021 Calculation
Interest paid on short-term and long-term borrowings, tax = Interest paid on short-term and long-term borrowings × EITR
= 920 × 21.20% = 195

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

Selected Financial Data (US$ in millions)
Enterprise value (EV)	166,236)
Free cash flow to the firm (FCFF)	6,716)
Valuation Ratio
EV/FCFF	24.75
Benchmarks
EV/FCFF, Competitors¹
Boeing Co.	—
General Electric Co.	48.90
Honeywell International Inc.	27.37
Lockheed Martin Corp.	19.68
Northrop Grumman Corp.	41.47
Raytheon Technologies Corp.	27.99
EV/FCFF, Sector
Capital Goods	33.22
EV/FCFF, Industry
Industrials	25.39

Based on: 10-K (reporting date: 2021-12-31).

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.

Caterpillar Inc., historical EV/FCFF calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	137,695)	138,173)	104,698)	105,065)	122,294)
Free cash flow to the firm (FCFF)²	6,716)	5,799)	6,216)	5,408)	4,901)
Valuation Ratio
EV/FCFF³	20.50	23.83	16.84	19.43	24.95
Benchmarks
EV/FCFF, Competitors⁴
Boeing Co.	—	—	—	16.40	16.93
General Electric Co.	56.53	32.34	15.85	40.85	22.13
Honeywell International Inc.	25.22	26.49	21.13	19.22	22.51
Lockheed Martin Corp.	13.92	14.64	21.21	41.00	—
Northrop Grumman Corp.	26.02	17.47	21.80	20.12	—
Raytheon Technologies Corp.	27.29	35.26	21.94	27.92	27.84
EV/FCFF, Sector
Capital Goods	31.18	70.42	25.21	23.82	—
EV/FCFF, Industry
Industrials	26.09	67.69	25.64	23.44	—

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

¹ See details »

² See details »

³ 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 137,695 ÷ 6,716 = 20.50

⁴ Click competitor name to see calculations.

Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Caterpillar Inc. EV/FCFF ratio increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.

Caterpillar Inc. (NYSE:CAT)

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