Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
ConocoPhillips, FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1, 2 See details »
The financial information reveals trends in net cash provided by operating activities and free cash flow to the firm (FCFF) over a five-year period. Operating cash flow exhibited substantial volatility, while FCFF demonstrated a consistent downward trajectory.
- Net Cash from Operations
- Net cash provided by operating activities increased significantly from $16,996 million in 2021 to $28,314 million in 2022. However, this was followed by a considerable decrease to $19,965 million in 2023. The subsequent two years, 2024 and 2025, show relative stability, with values of $20,124 million and $19,796 million respectively. This suggests a period of strong performance in 2022 followed by a return to levels closer to those observed in 2021.
- Free Cash Flow to the Firm (FCFF)
- FCFF followed an overall declining trend throughout the observed period. It rose from $12,299 million in 2021 to $18,771 million in 2022, mirroring the increase in operating cash flow. However, FCFF then decreased substantially to $9,292 million in 2023, and continued to decline to $8,719 million in 2024 and further to $7,963 million in 2025. This consistent reduction in FCFF, despite relatively stable operating cash flow in the later years, indicates potential increases in capital expenditures or other uses of cash that are not directly reflected in operating activities.
The divergence between operating cash flow and FCFF after 2022 warrants further investigation. While operating performance remained relatively strong, the consistent decrease in FCFF suggests a changing capital allocation strategy or increased investment requirements. The observed trends indicate a potential shift in the firm’s financial profile, moving from a period of strong free cash flow generation to one of diminishing returns.
AI Ask an analyst for more
Interest Paid, Net of Tax
ConocoPhillips, interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2 2025 Calculation
Cash payments, interest, tax = Cash payments, interest × EITR
= 757 × 36.90% = 279
3 2025 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= 384 × 36.90% = 142
The period under review demonstrates fluctuations in both cash payments for interest, net of tax, and interest capitalized, net of tax. These movements occur alongside changes in the effective income tax rate. A general observation is that the net of tax impact of interest expense is influenced by both the gross interest expense and the prevailing tax rate.
- Cash Payments, Interest, Net of Tax
- Cash payments for interest, net of tax, decreased from $588 million in 2021 to $578 million in 2022, representing a slight decline. A more substantial decrease was observed in 2023, falling to $472 million. This was followed by an increase to $545 million in 2024, but then decreased again to $478 million in 2025. The overall trend suggests volatility, with no clear directional movement over the five-year period.
- Interest Capitalized, Net of Tax
- Interest capitalized, net of tax, remained relatively stable between 2021 and 2022, at $39 million and $38 million respectively. A significant increase is then noted in 2023, rising to $103 million. This upward trend continued in 2024, reaching $168 million, and further accelerated in 2025 to $242 million. This indicates a growing trend in the capitalization of interest expense, potentially linked to increased investment in projects under construction.
- Effective Income Tax Rate (EITR)
- The effective income tax rate experienced a decrease from 36.40% in 2021 to 33.80% in 2022, and continued to decline to 32.70% in 2023 and 32.40% in 2024. However, the rate increased notably in 2025, reaching 36.90%. These fluctuations in the EITR would directly impact the net of tax amounts for both cash payments and capitalized interest.
The combined effect of these factors suggests that while gross interest payments may have varied, the net impact on the income statement and balance sheet is also heavily influenced by the company’s effective tax rate and its decisions regarding interest capitalization. The increasing trend in interest capitalization suggests a shift in investment strategy or project lifecycle, while the fluctuating EITR introduces variability in the reported net interest expense.
AI Ask an analyst for more
Enterprise Value to FCFF Ratio, Current
ConocoPhillips, current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 166,261) |
| Free cash flow to the firm (FCFF) | 7,963) |
| Valuation Ratio | |
| EV/FCFF | 20.88 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Chevron Corp. | 24.07 |
| Exxon Mobil Corp. | 27.16 |
| EV/FCFF, Sector | |
| Oil, Gas & Consumable Fuels | 25.07 |
| EV/FCFF, Industry | |
| Energy | 24.58 |
Based on: 10-K (reporting date: 2025-12-31).
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
ConocoPhillips, historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 149,429) | 142,203) | 142,912) | 139,467) | 131,808) | |
| Free cash flow to the firm (FCFF)2 | 7,963) | 8,719) | 9,292) | 18,771) | 12,299) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 18.77 | 16.31 | 15.38 | 7.43 | 10.72 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Chevron Corp. | 23.70 | 18.98 | 14.85 | 8.27 | 13.33 | |
| Exxon Mobil Corp. | 26.85 | 15.76 | 12.47 | 7.84 | 10.06 | |
| EV/FCFF, Sector | ||||||
| Oil, Gas & Consumable Fuels | 24.46 | 16.71 | 13.63 | 7.91 | 11.15 | |
| EV/FCFF, Industry | ||||||
| Energy | 23.94 | 16.61 | 13.96 | 8.54 | 11.54 | |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
3 2025 Calculation
EV/FCFF = EV ÷ FCFF
= 149,429 ÷ 7,963 = 18.77
4 Click competitor name to see calculations.
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits considerable fluctuation over the observed period. Enterprise Value demonstrates a generally increasing trend, while Free Cash Flow to the Firm (FCFF) displays more volatility. This interplay results in a dynamic EV/FCFF ratio.
- Enterprise Value
- Enterprise Value increased from US$131,808 million in 2021 to US$149,429 million in 2025. The largest increase occurred between 2021 and 2022, with a rise of US$7,659 million. Growth slowed in subsequent years, with a slight decrease observed between 2023 and 2024 before resuming an upward trajectory in 2025.
- Free Cash Flow to the Firm (FCFF)
- FCFF experienced significant volatility. It rose substantially from US$12,299 million in 2021 to US$18,771 million in 2022. However, it then declined sharply to US$9,292 million in 2023 and continued to decrease, reaching US$7,963 million in 2025. This represents a net decrease of approximately 35% from the 2022 peak.
- EV/FCFF Ratio
- The EV/FCFF ratio began at 10.72 in 2021, decreased to a low of 7.43 in 2022, and then increased significantly, reaching 15.38 in 2023. This upward trend continued, with the ratio reaching 16.31 in 2024 and further increasing to 18.77 in 2025. The increasing ratio suggests that the enterprise value is growing at a faster rate than the free cash flow generated by the firm, or that FCFF is declining relative to EV. The ratio’s movement mirrors the combined effect of the increasing Enterprise Value and the fluctuating FCFF.
The observed trend in the EV/FCFF ratio indicates a growing premium placed on the enterprise value relative to its free cash flow generation capacity over the period. The decline in FCFF, particularly in the later years, contributes significantly to this increasing ratio.
AI Ask an analyst for more