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: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
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The financial data indicates significant fluctuations in the cash flow metrics over the observed period. Operating cash flow shows a notable upward trend from 2020 to 2022, followed by a decline in the subsequent years.
- Net cash provided by operating activities
- This figure rose dramatically from 4,802 million in 2020 to 16,996 million in 2021, then peaked at 28,314 million in 2022. However, there was a decline to 19,965 million in 2023, with a slight increase to 20,124 million in 2024. This suggests strong operational performance improvement through 2022, followed by a partial contraction in the following two years.
- Free cash flow to the firm (FCFF)
- FCFF exhibited a similar trajectory, increasing from 797 million in 2020 to 12,299 million in 2021, and further to 18,771 million in 2022. Subsequently, it decreased to 9,292 million in 2023 and further to 8,719 million in 2024. This downward trend after 2022 may reflect higher capital expenditures, reduced operational efficiency, or other cash outflows impacting the free cash available to stakeholders.
Overall, the trends show an initial period of strong cash generation and operational improvement up to 2022, followed by a noticeable decline in both operating cash flow and free cash flow in the most recent years. While the free cash flow remains positive, the reduction from peak values indicates potential challenges in sustaining the high cash generating capacity experienced earlier.
Interest Paid, Net of Tax
ConocoPhillips, interest paid, net of tax calculation
US$ in millions
Based on: 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), 10-K (reporting date: 2020-12-31).
2 2024 Calculation
Cash payments, interest, tax = Cash payments, interest × EITR
= 806 × 32.40% = 261
3 2024 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= 248 × 32.40% = 80
- Effective Income Tax Rate (EITR)
- The Effective Income Tax Rate exhibited a significant increase from 15.5% in 2020 to 36.4% in 2021. Following this sharp rise, it demonstrated a moderate decline over the subsequent years, reducing to 33.8% in 2022, 32.7% in 2023, and slightly further to 32.4% in 2024. This suggests that tax expenses relative to taxable income increased markedly in 2021 but have since stabilized at a higher level than in 2020.
- Cash Payments, Interest, Net of Tax
- Cash interest payments, net of tax, showed a consistent downward trend from 663 million USD in 2020 to 472 million USD in 2023. Notably, there was a minor increase to 545 million USD in 2024. This pattern indicates a general reduction in cash interest outflows over the period, potentially reflecting lower debt levels, refinancing at more favorable rates, or improved cash management, with a slight reversal in the final year observed.
- Interest Capitalized, Net of Tax
- Interest capitalized net of tax remained relatively stable at low levels between 38 and 46 million USD in the years 2020 through 2022. However, there was a pronounced increase starting in 2023, reaching 103 million USD, and continuing to escalate to 168 million USD in 2024. This upward trend suggests a growing portion of interest expenses being capitalized, possibly due to increased investment in capital projects or changes in accounting practices related to asset capitalization.
Enterprise Value to FCFF Ratio, Current
ConocoPhillips, current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 136,473) |
| Free cash flow to the firm (FCFF) | 8,719) |
| Valuation Ratio | |
| EV/FCFF | 15.65 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Chevron Corp. | 17.87 |
| Exxon Mobil Corp. | 15.92 |
| Occidental Petroleum Corp. | 13.25 |
| EV/FCFF, Sector | |
| Oil, Gas & Consumable Fuels | 16.11 |
| EV/FCFF, Industry | |
| Energy | 15.91 |
Based on: 10-K (reporting date: 2024-12-31).
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, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Enterprise value (EV)1 | 142,203) | 142,912) | 139,467) | 131,808) | 73,692) | |
| Free cash flow to the firm (FCFF)2 | 8,719) | 9,292) | 18,771) | 12,299) | 797) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 16.31 | 15.38 | 7.43 | 10.72 | 92.48 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Chevron Corp. | 18.98 | 14.85 | 8.27 | 13.33 | 106.63 | |
| Exxon Mobil Corp. | 15.76 | 12.47 | 7.84 | 10.06 | — | |
| Occidental Petroleum Corp. | 13.73 | 11.15 | 5.95 | 8.39 | 25.58 | |
| EV/FCFF, Sector | ||||||
| Oil, Gas & Consumable Fuels | 16.44 | 13.39 | 7.72 | 10.86 | 163.02 | |
| EV/FCFF, Industry | ||||||
| Energy | 16.37 | 13.70 | 8.29 | 11.22 | 117.62 | |
Based on: 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), 10-K (reporting date: 2020-12-31).
3 2024 Calculation
EV/FCFF = EV ÷ FCFF
= 142,203 ÷ 8,719 = 16.31
4 Click competitor name to see calculations.
The enterprise value (EV) demonstrates a significant upward trajectory from 2020 through 2023, increasing from approximately $73.7 billion to about $142.9 billion. This marks nearly a doubling of the company's valuation over the four-year period, indicating a substantial growth in market capitalization and overall company valuation. However, there is a slight decrease observed from 2023 to 2024, where EV declines marginally to approximately $142.2 billion.
In terms of free cash flow to the firm (FCFF), there is a substantial increase from 2020 to 2022, with FCFF rising from $797 million to $18.8 billion, reflecting improved cash generation capabilities and operational efficiency. This positive momentum, however, reverses in 2023 and 2024, with FCFF falling to $9.3 billion and $8.7 billion, respectively. The decline in free cash flow during these latter years could suggest challenges in maintaining cash flow growth or increased capital expenditures or operational costs.
- Enterprise Value to FCFF Ratio (EV/FCFF)
- The EV/FCFF ratio, which indicates valuation relative to free cash flow, exhibits a marked decline from 92.48 in 2020 to 7.43 in 2022. This steep drop reflects that the enterprise value grew at a slower rate than free cash flow or that free cash flow increased substantially relative to enterprise value, potentially signaling improved valuation attractiveness during this period.
- Subsequently, the ratio rises to 15.38 in 2023 and 16.31 in 2024, indicating a relative increase in enterprise value compared to free cash flow. This shift may suggest a moderation of cash flow growth compared to company valuation or a potential overvaluation relative to cash generation in those years.
Overall, the data points to a phase of rapid growth in both enterprise value and free cash flow until 2022, followed by stabilization and some decline in cash flow with relatively stable enterprise value. The dynamics of the EV/FCFF ratio reflect changing market perceptions and operational performance, signaling a need for careful monitoring of cash flow generation relative to valuation in the recent years.