United Parcel Service Inc., 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	6,708)	11,548)	12,890)	1,343)	4,440)
Net noncash charges	3,902)	2,925)	2,781)	8,035)	4,063)
Changes in assets and liabilities, net of effects of acquisitions	(372)	(369)	(664)	1,081)	136)
Net cash from operating activities	10,238)	14,104)	15,007)	10,459)	8,639)
Cash paid during the period for interest, net of amount capitalized, net of tax¹	596)	562)	542)	503)	494)
Capitalized interest, net of tax²	92)	47)	45)	63)	72)
Capital expenditures	(5,158)	(4,769)	(4,194)	(5,412)	(6,380)
Free cash flow to the firm (FCFF)	5,768)	9,943)	11,400)	5,613)	2,824)

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 United Parcel Service Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	United Parcel Service Inc. FCFF decreased from 2021 to 2022 and from 2022 to 2023.

United Parcel Service Inc., 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	21.80%	22.10%	22.30%	27.20%	21.40%
Interest Paid, Net of Tax
Cash paid during the period for interest, net of amount capitalized, before tax	762)	721)	697)	691)	628)
Less: Cash paid during the period for interest, net of amount capitalized, tax²	166)	159)	155)	188)	134)
Cash paid during the period for interest, net of amount capitalized, net of tax	596)	562)	542)	503)	494)
Interest Costs Capitalized, Net of Tax
Capitalized interest, before tax	118)	60)	58)	87)	91)
Less: Capitalized interest, tax³	26)	13)	13)	24)	19)
Capitalized interest, net of tax	92)	47)	45)	63)	72)

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
Cash paid during the period for interest, net of amount capitalized, tax = Cash paid during the period for interest, net of amount capitalized × EITR
= 762 × 21.80% = 166

³ 2023 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= 118 × 21.80% = 26

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United Parcel Service Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	142,043)
Free cash flow to the firm (FCFF)	5,768)
Valuation Ratio
EV/FCFF	24.63
Benchmarks
EV/FCFF, Competitors¹
FedEx Corp.	24.39
Uber Technologies Inc.	39.79
Union Pacific Corp.	31.21
EV/FCFF, Sector
Transportation	29.74
EV/FCFF, Industry
Industrials	25.42

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.

United Parcel Service Inc., 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	142,938)	165,335)	193,224)	158,463)	110,925)
Free cash flow to the firm (FCFF)²	5,768)	9,943)	11,400)	5,613)	2,824)
Valuation Ratio
EV/FCFF³	24.78	16.63	16.95	28.23	39.28
Benchmarks
EV/FCFF, Competitors⁴
FedEx Corp.	23.94	19.13	18.72	—	97.52
Uber Technologies Inc.	46.69	136.28	—	—	—
Union Pacific Corp.	31.90	23.83	26.42	25.20	25.44
EV/FCFF, Sector
Transportation	31.32	22.96	23.87	65.92	104.98
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
= 142,938 ÷ 5,768 = 24.78

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.	United Parcel Service Inc. EV/FCFF ratio decreased from 2021 to 2022 but then increased from 2022 to 2023 exceeding 2021 level.

United Parcel Service Inc. (NYSE:UPS)

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