Eaton Corp. plc, FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income attributable to Eaton ordinary shareholders	3,218)	2,462)	2,144)	1,410)	2,211)
Net income for noncontrolling interests	5)	4)	2)	5)	2)
Net noncash charges	550)	755)	326)	894)	1,174)
Changes in working capital	(149)	(688)	(309)	635)	64)
Net cash provided by operating activities	3,624)	2,533)	2,163)	2,944)	3,451)
Interest paid on debt, net of tax¹	269)	212)	153)	175)	238)
Capital expenditures for property, plant and equipment	(757)	(598)	(575)	(389)	(587)
Proceeds from sales of property, plant and equipment	76)	163)	44)	12)	—)
Lease assets obtained in exchange for new lease obligations, including leases acquired, finance leases	(38)	(10)	(14)	(16)	(24)
Free cash flow to the firm (FCFF)	3,174)	2,300)	1,771)	2,726)	3,078)

Based on: 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), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Eaton Corp. plc suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Eaton Corp. plc FCFF increased from 2021 to 2022 and from 2022 to 2023.

Eaton Corp. plc, interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Effective Income Tax Rate (EITR)
EITR¹	15.80%	15.30%	25.90%	19.00%	14.60%
Interest Paid, Net of Tax
Interest paid on debt, before tax	319)	250)	207)	216)	279)
Less: Interest paid on debt, tax²	50)	38)	54)	41)	41)
Interest paid on debt, net of tax	269)	212)	153)	175)	238)

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ See details »

² 2023 Calculation
Interest paid on debt, tax = Interest paid on debt × EITR
= 319 × 15.80% = 50

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Eaton Corp. plc, current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	133,933)
Free cash flow to the firm (FCFF)	3,174)
Valuation Ratio
EV/FCFF	42.20
Benchmarks
EV/FCFF, Competitors¹
Boeing Co.	21.64
Caterpillar Inc.	16.61
Cummins Inc.	15.34
General Electric Co.	35.26
Honeywell International Inc.	28.50
Lockheed Martin Corp.	18.38
RTX Corp.	25.72
EV/FCFF, Sector
Capital Goods	23.59
EV/FCFF, Industry
Industrials	25.15

Based on: 10-K (reporting date: 2023-12-31).

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.

Eaton Corp. plc, historical EV/FCFF calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	122,149)	76,903)	67,594)	59,819)	47,708)
Free cash flow to the firm (FCFF)²	3,174)	2,300)	1,771)	2,726)	3,078)
Valuation Ratio
EV/FCFF³	38.49	33.44	38.16	21.94	15.50
Benchmarks
EV/FCFF, Competitors⁴
Boeing Co.	25.63	37.53	—	—	—
Caterpillar Inc.	16.08	23.54	20.50	23.83	16.84
Cummins Inc.	14.10	35.58	21.11	16.67	10.35
General Electric Co.	29.56	17.29	56.53	32.34	15.85
Honeywell International Inc.	29.13	29.82	25.22	26.49	21.13
Lockheed Martin Corp.	17.62	19.69	13.92	14.64	21.21
RTX Corp.	23.86	28.45	27.29	35.26	21.94
EV/FCFF, Sector
Capital Goods	22.77	26.17	31.55	66.05	23.83
EV/FCFF, Industry
Industrials	25.15	25.09	28.18	65.99	30.06

Based on: 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), 10-K (reporting date: 2019-12-31).

¹ See details »

² See details »

³ 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 122,149 ÷ 3,174 = 38.49

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Eaton Corp. plc EV/FCFF ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

Eaton Corp. plc (NYSE:ETN)

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