Enterprise Value to FCFF (EV/FCFF)
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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Net Profit Margin since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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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: 2025-12-31), 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).
1, 2 See details »
The financial information reveals a fluctuating pattern in both net cash provided by operating activities and free cash flow to the firm (FCFF) over the five-year period. Operating cash flow demonstrates variability, while FCFF exhibits a more pronounced decline followed by partial recovery.
- Net Cash from Operations
- Net cash provided by operating activities decreased significantly from US$7,715 million in 2021 to US$5,139 million in 2022, representing a substantial reduction. It then showed a modest increase to US$5,279 million in 2023, followed by a more considerable rise to US$7,160 million in 2024. A subsequent decrease to US$5,610 million was observed in 2025.
- Free Cash Flow to the Firm (FCFF)
- FCFF experienced a dramatic decrease from US$6,098 million in 2021 to US$2,044 million in 2022. This downward trend continued into 2023, with FCFF falling to US$880 million. A recovery was noted in 2024, with FCFF increasing to US$2,728 million, but this was followed by a decline to US$1,505 million in 2025. The FCFF values in 2023, 2024, and 2025 are considerably lower than the levels observed in 2021 and 2022.
The relationship between operating cash flow and FCFF suggests that changes in FCFF are largely driven by fluctuations in operating cash flow, although the magnitude of the decrease in FCFF from 2021 to 2023 was greater than the decrease in operating cash flow, indicating potential changes in other factors impacting FCFF calculation, such as capital expenditures or changes in working capital. The partial recovery in both metrics in 2024 was not sustained into 2025.
- Overall Trend
- While operating cash flow demonstrates some recovery, FCFF remains significantly below its 2021 level. The volatility in FCFF suggests potential challenges in generating consistent cash flow available to all investors.
Interest Paid, Net of Tax
Freeport-McMoRan Inc., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 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).
2 2025 Calculation
Third-party interest paid, net of capitalized interest, tax = Third-party interest paid, net of capitalized interest × EITR
= × =
3 2025 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= × =
The period under review demonstrates fluctuating trends in both third-party interest expense, net of tax, and capitalized interest, net of tax. Simultaneously, the effective income tax rate exhibits an initial increase followed by stabilization and a slight decrease.
- Third-Party Interest Expense, Net of Tax
- Third-party interest expense, net of tax, decreased significantly from US$448 million in 2021 to US$275 million in 2022. This decline continued, albeit at a slower pace, to US$260 million in 2023. A more substantial reduction occurred in 2024, falling to US$130 million. A modest increase to US$166 million is observed in 2025. This suggests a decreasing reliance on third-party debt financing or successful debt restructuring efforts, followed by a potential resumption of borrowing or changes in interest rates.
- Capitalized Interest, Net of Tax
- Capitalized interest, net of tax, increased substantially from US$50 million in 2021 to US$99 million in 2022. This upward trend continued through 2023, reaching US$166 million, and peaked in 2024 at US$246 million. A slight decrease to US$222 million is noted in 2025. The consistent increase from 2021 to 2024 indicates a growing level of investment in projects where borrowing costs are being capitalized, potentially reflecting expansionary capital expenditure. The slight decrease in 2025 may suggest project completion or a shift in investment strategy.
- Effective Income Tax Rate
- The effective income tax rate rose from 30.00% in 2021 to 34.00% in 2022 and further to 38.00% in 2023. It then decreased slightly to 37.00% in 2024 and again to 35.00% in 2025. This suggests changes in the mix of taxable income, utilization of tax credits, or alterations in tax regulations impacting the company’s tax obligations.
The combined effect of these trends suggests a dynamic financial landscape. The reduction in net third-party interest expense, coupled with increasing capitalized interest, could indicate a strategic shift towards funding growth through internally generated funds and capital projects, although the recent uptick in net third-party interest expense in 2025 warrants further investigation. The fluctuations in the effective income tax rate should be monitored for potential impacts on net income.
Enterprise Value to FCFF Ratio, Current
Freeport-McMoRan Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ 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: 2025-12-31).
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: 2025-12-31), 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).
The Enterprise Value to Free Cash Flow to the Firm (EV/FCFF) ratio exhibits significant fluctuations over the observed period. Enterprise Value generally decreased from 2021 to 2023, before increasing substantially in 2025. Simultaneously, Free Cash Flow to the Firm experienced a marked decline from 2021 to 2023, followed by a recovery in 2024, and a subsequent decrease in 2025.
- EV/FCFF Ratio Trend
- In 2021, the EV/FCFF ratio stood at 12.13. This increased dramatically to 35.32 in 2022, indicating a substantial decrease in free cash flow relative to enterprise value. The ratio continued to climb to a peak of 79.26 in 2023, suggesting a further deterioration in cash flow generation compared to the company’s valuation. A decrease to 26.41 was observed in 2024, coinciding with an increase in FCFF. However, the ratio rose again to 71.45 in 2025, driven by a significant increase in Enterprise Value and a concurrent decline in FCFF.
The substantial increase in the EV/FCFF ratio from 2021 to 2023 suggests that the market valuation was increasing at a faster rate than the company’s ability to generate free cash flow. The subsequent decrease in 2024 indicates a partial correction, as FCFF improved. The final increase in 2025, however, reverses this trend, suggesting a renewed divergence between valuation and cash flow generation. The volatility in the ratio warrants further investigation into the underlying drivers of both Enterprise Value and Free Cash Flow to the Firm.
- Enterprise Value
- Enterprise Value decreased from US$73,951 million in 2021 to US$69,771 million in 2023, representing a cumulative decline. A moderate increase to US$72,055 million occurred in 2024, followed by a substantial jump to US$107,506 million in 2025.
- Free Cash Flow to the Firm
- Free Cash Flow to the Firm experienced a significant reduction from US$6,098 million in 2021 to US$880 million in 2023. A recovery to US$2,728 million was noted in 2024, but this was followed by a decrease to US$1,505 million in 2025.
The interplay between Enterprise Value and Free Cash Flow to the Firm is critical in understanding the fluctuations in the EV/FCFF ratio. The observed trends suggest a complex relationship, potentially influenced by factors such as market sentiment, commodity price movements, and company-specific operational changes.