Baxter International Inc., FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Net income attributable to Baxter	968)	2,497)	2,012)	2,326)	2,224)
Net income attributable to noncontrolling interests	—)	—)	—)	—)	32)
Net noncash charges	477)	1,382)	1,432)	1,386)	1,601)
Changes in balance sheet items	(316)	(664)	(246)	(606)	(1,040)
Cash flows from operations	1,129)	3,215)	3,198)	3,106)	2,817)
Interest paid, net of portion capitalized, net of tax¹	163)	166)	158)	108)	49)
Interest costs capitalized, net of tax²	47)	56)	55)	42)	32)
Capital expenditures	(911)	(1,898)	(1,525)	(1,161)	(960)
Free cash flow to the firm (FCFF)	428)	1,539)	1,886)	2,095)	1,938)

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

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Item	Description	The company
FCFF	Free cash flow to the firm is the cash flow available to the Baxter International Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Baxter International Inc. FCFF decreased from 2013 to 2014 and from 2014 to 2015.

Baxter International Inc., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Effective Income Tax Rate (EITR)
EITR¹	8.20%	20.20%	21.00%	20.00%	20.00%
Interest Paid, Net of Tax
Interest paid, net of portion capitalized, before tax	178)	208)	200)	135)	61)
Less: Interest paid, net of portion capitalized, tax²	15)	42)	42)	27)	12)
Interest paid, net of portion capitalized, net of tax	163)	166)	158)	108)	49)
Interest Costs Capitalized, Net of Tax
Interest costs capitalized, before tax	51)	70)	70)	52)	40)
Less: Interest costs capitalized, tax³	4)	14)	15)	10)	8)
Interest costs capitalized, net of tax	47)	56)	55)	42)	32)

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

¹ See details »

² 2015 Calculation
Interest paid, net of portion capitalized, tax = Interest paid, net of portion capitalized × EITR
= 178 × 8.20% = 15

³ 2015 Calculation
Interest costs capitalized, tax = Interest costs capitalized × EITR
= 51 × 8.20% = 4

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Baxter International Inc., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	25,328)
Free cash flow to the firm (FCFF)	428)
Valuation Ratio
EV/FCFF	59.15
Benchmarks
EV/FCFF, Competitors¹
Abbott Laboratories	36.56
Cigna Group	8.60
CVS Health Corp.	8.70
Elevance Health Inc.	9.74
Humana Inc.	5.89
Intuitive Surgical Inc.	242.34
Medtronic PLC	20.77
UnitedHealth Group Inc.	17.62

Based on: 10-K (reporting date: 2015-12-31).

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.

Baxter International Inc., historical EV/FCFF calculation, comparison to benchmarks

	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012	Dec 31, 2011
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	20,781)	43,675)	44,093)	38,961)	34,243)
Free cash flow to the firm (FCFF)²	428)	1,539)	1,886)	2,095)	1,938)
Valuation Ratio
EV/FCFF³	48.53	28.38	23.38	18.60	17.67
Benchmarks
EV/FCFF, Competitors⁴
Abbott Laboratories	—	—	—	—	—
Cigna Group	—	—	—	—	—
CVS Health Corp.	—	—	—	—	—
Elevance Health Inc.	—	—	—	—	—
Humana Inc.	—	—	—	—	—
Intuitive Surgical Inc.	—	—	—	—	—
Medtronic PLC	—	—	—	—	—
UnitedHealth Group Inc.	—	—	—	—	—

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

¹ See details »

² See details »

³ 2015 Calculation
EV/FCFF = EV ÷ FCFF
= 20,781 ÷ 428 = 48.53

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.	Baxter International Inc. EV/FCFF ratio increased from 2013 to 2014 and from 2014 to 2015.

Baxter International Inc. (NYSE:BAX)

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