Enterprise Value to FCFF (EV/FCFF)
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Freeport-McMoRan Inc. pages available for free this week:
- Balance Sheet: Assets
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
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Free Cash Flow to The Firm (FCFF)
Freeport-McMoRan Inc., 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).
1, 2 See details »
The financial data reveals notable fluctuations in the company's cash flow metrics over the observed five-year period.
- Net Cash Provided by Operating Activities
- The net cash generated from operating activities exhibited significant growth from 2020 to 2021, increasing from $3,017 million to $7,715 million. This peak was followed by a decline to $5,139 million in 2022. The subsequent years saw a moderate recovery with values of $5,279 million in 2023 and a further increase to $7,160 million in 2024. Overall, the trend suggests strong operating cash flow capacity with variability across the years.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm showed a pronounced rise between 2020 and 2021, moving from $1,347 million to $6,098 million. However, this metric declined sharply in 2022 to $2,044 million, followed by a further decrease to $880 million in 2023. In 2024, the free cash flow rebounded to $2,728 million. Despite the recovery in the last year, FCFF demonstrated more volatility compared to operating cash flow, indicating periods of higher capital expenditures or other cash uses.
Interest Paid, Net of Tax
Freeport-McMoRan Inc., interest paid, net of tax calculation
US$ 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
Third-party interest paid, net of capitalized interest, tax = Third-party interest paid, net of capitalized interest × EITR
= × =
3 2024 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= × =
- Effective Income Tax Rate (EITR)
- The effective income tax rate exhibited notable fluctuations over the five-year period. It started at a high level of 53% in 2020, then decreased substantially to 30% in 2021. Subsequently, it slightly increased to 34% in 2022, followed by a further rise to 38% in 2023. The rate then stabilized with a marginal decline to 37% in 2024. Overall, the trend shows significant volatility, with a major dip in 2021 followed by a moderate upward adjustment in subsequent years.
- Third-party Interest Paid, Net of Capitalized Interest, Net of Tax
- This expense doubled from 222 million USD in 2020 to a peak of 448 million USD in 2021, indicating an increased cost of borrowing or interest obligations in that period. In the following years, this figure trended downward, decreasing to 275 million USD in 2022, 260 million USD in 2023, and reaching a low of 130 million USD in 2024. The downward trajectory after 2021 suggests improved interest expense management or reduced external borrowing costs.
- Capitalized Interest, Net of Tax
- The capitalized interest showed an overall rising trend throughout the timeframe. Starting at 69 million USD in 2020, it decreased to 50 million USD in 2021 but then increased significantly to 99 million USD in 2022. This upward momentum continued more sharply with 166 million USD recorded in 2023 and reached 246 million USD in 2024. The increasing capitalized interest may reflect enhanced investment in capital projects or higher costs being capitalized as assets.
Enterprise Value to FCFF Ratio, Current
Freeport-McMoRan Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | |
| Free cash flow to the firm (FCFF) | |
| Valuation Ratio | |
| EV/FCFF | |
| Benchmarks | |
| EV/FCFF, Industry | |
| Materials | |
Based on: 10-K (reporting date: 2024-12-31).
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
Freeport-McMoRan Inc., historical EV/FCFF calculation, comparison to benchmarks
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).
- Enterprise Value (EV)
- The enterprise value exhibited a fluctuating trend over the five-year period. Starting at $62,532 million in 2020, it increased significantly to $73,951 million in 2021, followed by a slight decline to $72,212 million in 2022. The value further decreased to $69,771 million in 2023 before rising again to $72,055 million in 2024. Overall, the EV demonstrated volatility with peaks in 2021 and 2024.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm showed considerable variability across the years. It grew substantially from $1,347 million in 2020 to a peak of $6,098 million in 2021, indicating a strong improvement in cash generation. However, it fell sharply to $2,044 million in 2022 and continued declining to $880 million in 2023, the lowest point in the period. In 2024, there was a recovery to $2,728 million, suggesting some restoration in operational cash flow.
- EV/FCFF Ratio
- The EV/FCFF ratio displayed high volatility reflective of changes in both enterprise value and free cash flow. The ratio began at a high level of 46.43 in 2020, dropping dramatically to 12.13 in 2021, correlating with the surge in free cash flow. However, it spiked notably to 35.32 in 2022 and jumped further to 79.26 in 2023, driven primarily by the decline in free cash flow despite modest EV fluctuations. By 2024, the ratio corrected downward to 26.41, reflecting the simultaneous increase in cash flow and enterprise value.
- Summary of Patterns and Insights
- Overall, the data reveals a volatile operational and valuation environment over the period. The company experienced strong cash flow generation in 2021, which temporarily improved valuation multiples. Subsequent years saw a marked decline in free cash flow, adversely affecting the EV/FCFF ratio despite relatively stable enterprise values. The partial recovery in free cash flow in 2024 contributed to a more moderate valuation multiple. These trends suggest sensitivity of valuation metrics to fluctuations in cash flow performance, highlighting operational challenges and recovering dynamics within the firm's financials.