Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Newmont Corp., FCFF calculation
US$ in millions
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, 2 See details »
- Net Cash Provided by Operating Activities
- The net cash generated from operating activities showed a significant increase from 2019 to 2020, rising from $2,876 million to $4,890 million. This peak in 2020 was followed by a gradual decline in the subsequent years, with values dropping to $4,266 million in 2021, $3,198 million in 2022, and further declining to $2,754 million in 2023. Overall, the trend indicates a strong surge in cash flow generation in 2020, followed by a consistent decrease over the next three years, ending below the 2019 level.
- Free Cash Flow to the Firm (FCFF)
- The free cash flow to the firm experienced notable volatility over the five-year period. It started at $912 million in 2019 and increased substantially to a peak of $3,794 million in 2020, mirroring the pattern observed in operating cash flows. However, in the years following, FCFF dropped significantly to $2,575 million in 2021, further declined steeply to $1,237 million in 2022, and reached a low of $285 million in 2023. This trajectory reflects a sharp increase in liquidity availability in 2020, but a pronounced downward trend afterwards, suggesting rising capital expenditures, lower operating cash flows, or other factors impacting the free cash flow generation capacity.
- Overall Trends and Insights
- Both key cash flow metrics peaked in 2020, indicating an exceptionally strong operating performance and cash generation capacity during that year. The subsequent successive declines across both measures from 2021 through 2023 point to deteriorating cash conversion ability or increased investment activities reducing free cash flows. The return to near or below pre-2019 levels by 2023 suggests the company faced increasing operational or capital challenges in the most recent years analyzed. The persistence of this trend warrants further investigation into the drivers behind the declining cash flows, including revenue trends, cost structure changes, and capital expenditure policies.
Interest Paid, Net of Tax
Newmont Corp., interest paid, net of tax calculation
US$ in millions
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).
2 2023 Calculation
Interest paid, net of amounts capitalized, tax = Interest paid, net of amounts capitalized × EITR
= 228 × 21.00% = 48
3 2023 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= 89 × 21.00% = 19
- Effective income tax rate (EITR)
- The effective income tax rate remained relatively stable around 21-23% for most years, specifically 23% in 2019, 22% in 2020, and 21% in both 2022 and 2023. However, there is a notable anomaly in 2021, where the rate surged dramatically to 99%. This spike suggests an unusual tax event or adjustment impacting that fiscal year, which is inconsistent with the general trend observed in the other years.
- Interest paid, net of amounts capitalized, net of tax
- The net interest paid exhibited significant variability over the assessed period. Starting at 210 million USD in 2019, it slightly decreased to 204 million USD in 2020. A sharp decline occurred in 2021, dropping to a minimal level of 2 million USD. The figure rose substantially again in 2022 to 136 million USD, followed by a further increase to 180 million USD in 2023. This pattern indicates fluctuating interest expenses or changes in financing costs and debt structure throughout these years.
- Capitalized interest, net of tax
- The capitalized interest showed a general increasing trend from 2019 to 2023. It started at 20 million USD in 2019 and slightly decreased to 19 million USD in 2020. There was no capitalized interest reported in 2021, but this was followed by a notable increase to 55 million USD in 2022 and further growth to 70 million USD in 2023. This pattern suggests an increasing allocation of interest costs being capitalized as part of asset costs or projects, especially in the latest two years reviewed.
Enterprise Value to FCFF Ratio, Current
Newmont Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 55,321) |
| Free cash flow to the firm (FCFF) | 285) |
| Valuation Ratio | |
| EV/FCFF | 193.82 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Freeport-McMoRan Inc. | 30.47 |
| EV/FCFF, Industry | |
| Materials | 42.61 |
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.
Enterprise Value to FCFF Ratio, Historical
Newmont Corp., 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 | 42,606) | 37,687) | 53,895) | 47,615) | 44,149) | |
| Free cash flow to the firm (FCFF)2 | 285) | 1,237) | 2,575) | 3,794) | 912) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | 149.27 | 30.46 | 20.93 | 12.55 | 48.40 | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| Freeport-McMoRan Inc. | 79.26 | 35.32 | 12.13 | 46.43 | — | |
| EV/FCFF, Industry | ||||||
| Materials | 40.02 | 34.36 | 20.85 | 30.81 | — | |
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).
3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 42,606 ÷ 285 = 149.27
4 Click competitor name to see calculations.
- Enterprise Value (EV)
- The enterprise value exhibited an increasing trend from 2019 to 2021, rising from 44,149 million USD in 2019 to 53,895 million USD in 2021. However, this was followed by a substantial decline in 2022, dropping to 37,687 million USD, before slightly recovering to 42,606 million USD in 2023. This pattern indicates initial growth in perceived company valuation, followed by a significant decrease, with a moderate rebound thereafter.
- Free Cash Flow to the Firm (FCFF)
- Free cash flow showed strong fluctuations over the analyzed periods. Starting at 912 million USD in 2019, FCFF increased sharply to a peak of 3,794 million USD in 2020, then declined to 2,575 million USD in 2021. Subsequent years saw further decreases, with FCFF falling to 1,237 million USD in 2022 and down to 285 million USD in 2023. The data reveals a significant erosion in the company’s operational cash generation capacity after 2020.
- EV/FCFF Ratio
- The ratio of enterprise value to free cash flow displayed considerable volatility. In 2019, the ratio was exceptionally high at 48.4, reflecting relatively low free cash flow compared to enterprise value. It substantially decreased in 2020 to 12.55, corresponding with the peak in FCFF. The ratio then climbed to 20.93 in 2021 and escalated markedly to 30.46 in 2022. By 2023, the ratio surged to an extreme level of 149.27, driven by the low free cash flow figure despite a modest enterprise value rebound. This sharp rise suggests potential concerns regarding valuation relative to cash flow generation.