Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Union Pacific Corp., 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).
- Cash Provided by Operating Activities
- The cash generated from operating activities showed a generally positive trend over the five-year period. Starting at $8,540 million in 2020, the amount increased to $9,032 million in 2021 and further to $9,362 million in 2022. There was a decline in 2023 to $8,379 million, but this was followed by a rebound in 2024, rising again to $9,346 million. The fluctuations indicate some variability in operating cash flow, but the overall level remains robust and relatively stable around the $9 billion mark in recent years.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow to the firm also exhibited a generally upward trend, although with more noticeable fluctuations than operating cash flow. It increased from $6,417 million in 2020 to a peak of $6,932 million in 2021. However, FCFF decreased slightly to $6,633 million in 2022 and further declined to $5,756 million in 2023. The following year, 2024, saw a recovery bringing the FCFF back up to $6,860 million. The decline observed in 2023 may suggest increased capital expenditures or changes in working capital that outpaced operating cash inflows, but the subsequent recovery implies a return to stronger free cash generation.
- Overall Insights
- Both key cash flow metrics demonstrated resilience over the five-year span, despite some year-to-year volatility. The trend in operating cash flow suggests that the core business operations have maintained solid cash generation capacity. Meanwhile, the more variable free cash flow indicates that investments or other financing activities may have fluctuated, impacting the cash available to the firm after necessary expenditures. The recovery in both cash flow figures in the final year suggests potential improvement in operational efficiency or capital management.
Interest Paid, Net of Tax
Union Pacific Corp., interest paid, net of tax calculation
US$ 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 paid during the year for interest, net of amounts capitalized, tax = Cash paid during the year for interest, net of amounts capitalized × EITR
= 1,260 × 23.30% = 294
- Effective Income Tax Rate (EITR)
- The effective income tax rate displayed a gradual decrease from 23.4% in 2020 to 22.5% in 2023, indicating a slight reduction in the effective tax burden over these years. However, in 2024, the rate increased to 23.3%, reversing the prior declining trend. This fluctuation suggests relative stability in tax rates with minor variations that could be influenced by changes in tax laws, profitability, or income composition.
- Cash Paid During the Year for Interest, Net of Amounts Capitalized, Net of Tax
- Cash paid for interest showed a consistent rising trend from 2020 to 2023, increasing from $804 million to $983 million. This steady increase indicates growing interest expenses which may reflect higher debt levels or interest rates. In 2024, there was a slight reduction to $966 million, suggesting a minor decrease in interest obligations or changes in financing structure compared to the previous year.
Enterprise Value to FCFF Ratio, Current
Union Pacific Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 169,573) |
| Free cash flow to the firm (FCFF) | 6,860) |
| Valuation Ratio | |
| EV/FCFF | 24.72 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| FedEx Corp. | 18.61 |
| Uber Technologies Inc. | 27.45 |
| United Airlines Holdings Inc. | 8.94 |
| United Parcel Service Inc. | 14.31 |
| EV/FCFF, Sector | |
| Transportation | 18.86 |
| EV/FCFF, Industry | |
| Industrials | 34.76 |
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
Union Pacific Corp., 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 | 176,462) | 183,633) | 158,093) | 183,147) | 161,709) | |
| Free cash flow to the firm (FCFF)2 | 6,860) | 5,756) | 6,633) | 6,932) | 6,417) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 25.72 | 31.90 | 23.83 | 26.42 | 25.20 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| FedEx Corp. | 23.54 | 23.94 | 19.13 | 18.72 | — | |
| Uber Technologies Inc. | 23.26 | 46.69 | 136.28 | — | — | |
| United Airlines Holdings Inc. | 9.18 | 56.36 | 11.88 | 79.24 | — | |
| United Parcel Service Inc. | 16.29 | 24.78 | 16.63 | 16.95 | 28.23 | |
| EV/FCFF, Sector | ||||||
| Transportation | 19.18 | 32.04 | 21.76 | 24.81 | 184.17 | |
| EV/FCFF, Industry | ||||||
| Industrials | 31.37 | 25.93 | 24.30 | 28.80 | 189.49 | |
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
= 176,462 ÷ 6,860 = 25.72
4 Click competitor name to see calculations.
An analysis of the financial data reveals several noteworthy trends in the enterprise value, free cash flow to the firm, and related valuation multiples over the five-year period.
- Enterprise Value (EV)
- The enterprise value shows fluctuation rather than a consistent directional trend. It increased from approximately 161.7 billion US dollars at the end of 2020 to a peak of about 183.6 billion in 2023. However, there was a decline in 2022 before the rise, and again a slight decrease in 2024 to around 176.5 billion.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm demonstrates relative stability with moderate fluctuations. The value rose from approximately 6.4 billion in 2020 to 6.9 billion in 2021, dipped slightly in 2022 and more notably in 2023, then rebounded to about 6.9 billion in 2024. This indicates some cyclical variation but overall resilience in cash flow generation.
- EV/FCFF Ratio
- The EV/FCFF ratio reveals notable volatility over the years, reflecting changes in valuation relative to cash flow. Starting at 25.2 in 2020, it increased to 26.42 in 2021, then decreased to 23.83 in 2022, followed by a sharp rise to 31.9 in 2023, before falling back to 25.72 in 2024. The spike in 2023 suggests that the enterprise value increased disproportionately relative to free cash flow that year, potentially indicating market optimism or a valuation premium during that period.
Overall, the company's enterprise value and free cash flow demonstrate fluctuations but maintain a general balance, with enterprise value movements somewhat more pronounced. The volatility in the EV/FCFF ratio underscores periods when valuation appeared stretched relative to cash flow, especially in 2023, while the subsequent decline in 2024 may suggest a return to more normalized valuation levels.