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BHP Group (NYSE:BHP) Free Cash Flow

: $26,319 Mil (TTM As of Jun. 2022)
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BHP Group's total free cash flow for the months ended in Jun. 2022 was $15,810 Mil. Its total free cash flow for the trailing twelve months (TTM) ended in Jun. 2022 was $26,319 Mil.

BHP Group's Free Cash Flow per Share for the months ended in Jun. 2022 was $6.24. Its free cash flow per share for the trailing twelve months (TTM) ended in Jun. 2022 was $10.38.

During the past 12 months, the average Free Cash Flow per Share Growth Rate of BHP Group was 32.40% per year. During the past 3 years, the average Free Cash Flow per Share Growth Rate was 31.90% per year. During the past 5 years, the average Free Cash Flow per Share Growth Rate was 17.70% per year. Please click Growth Rate Calculation Example (GuruFocus) to see how GuruFocus calculates Wal-Mart Stores Inc (WMT)'s revenue growth rate. You can apply the same method to get the Free Cash Flow Growth Rate using Free Cash Flow per Share data.

During the past 13 years, BHP Group's highest 3-Year average Free Cash Flow per Share Growth Rate was 72.00% per year. The lowest was -35.50% per year. And the median was 18.90% per year.


BHP Group (NYSE:BHP) Free Cash Flow Historical Data

The historical data trend for BHP Group's Free Cash Flow can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

BHP Group Annual Data
Trend Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19 Jun20 Jun21 Jun22
Free Cash Flow Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 13,482.00 11,621.00 9,715.00 21,622.00 26,319.00

BHP Group Semi-Annual Data
Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19 Jun20 Dec20 Jun21 Dec21 Jun22
Free Cash Flow Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5,678.00 6,534.00 15,088.00 10,509.00 15,810.00

BHP Group Free Cash Flow Calculation

Free Cash Flow is considered one of the most important parameters to measure a company's earnings power by value investors because it is not subject to estimates of Depreciation, Depletion and Amortization (DDA). However, when we look at the Free Cash Flow, we should look from a long term perspective, because any year's Free Cash Flow can be drastically affected by the spending on Property, Plant, & Equipment (PPE) of the business in that year. Over the long term, Free Cash Flow should give pretty good picture on the real earnings power of the company.

BHP Group's Free Cash Flow for the fiscal year that ended in Jun. 2022 is calculated as

Free Cash Flow (A: Jun. 2022 )=Cash Flow from Operations+Capital Expenditure
=32174+-5855
=26,319

BHP Group's Free Cash Flow for the quarter that ended in Jun. 2022 is calculated as

Free Cash Flow (Q: Jun. 2022 )=Cash Flow from Operations+Capital Expenditure
=18897+-3087
=15,810

Free Cash Flow for the trailing twelve months (TTM) ended in Jun. 2022 adds up the semi-annually data reported by the company within the most recent 12 months, which was $26,319 Mil.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


BHP Group  (NYSE:BHP) Free Cash Flow Explanation

Free Cash Flow is very close to Warren Buffett's definition of Owner's Earnings, except that in Warren Buffett's Owner's Earnings, the spending for Property, Plant, and Equipment is only for maintenance (replacement), while in the Free Cash Flow calculation, the cost of new Property, Plant, and Equipment due to business expansion is also deducted. There, Free Cash Flow is more conservative than Owner's Earnings.

In Don Yacktman's calculation of forward rate of return, he uses Free Cash Flow for the calculation. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation.

This is what Yacktman said in his March 2012 interview - when the S&P 500 was at 1400:

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over seven years. The reason we use seven years is because research shows that seven years is the length of the typical business cycle.

Therefore, as of Jun22, BHP Group's Forward Rate of Return (Yacktman) % is

Forward Rate of Return (Yacktman) % (Jun22)=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=6.16316667/56.18+0.1424
=25.21 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Be Aware

Free Cash Flow within a report period can be affected by management's decisions of capital spending. Therefore, it is important to look at long term when it comes to Free Cash Flow.


BHP Group Free Cash Flow Related Terms

Thank you for viewing the detailed overview of BHP Group's Free Cash Flow provided by GuruFocus.com. Please click on the following links to see related term pages.


BHP Group (NYSE:BHP) Business Description

BHP Group logo
Address
171 Collins Street, Level 18, Melbourne, VIC, AUS, 3000
BHP is a leading global diversified miner supplying iron ore, copper, oil, gas, and metallurgical. The merger of BHP Limited (now BHP Ltd.) and Billiton PLC (now BHP PLC) created the present-day BHP. Shareholders in each company have equivalent economic and voting rights in BHP as a whole and in 2022 voted to reunify the dual listed structure. Major assets include Pilbara iron ore, Queensland coking coal, Escondida copper and conventional petroleum assets, principally in Australia and the Gulf of Mexico. Onshore U.S. oil and gas assets were sold in 2018 and the remaining Petroleum assets are likely to be spun off and merged with Woodside.

BHP Group (NYSE:BHP) Headlines

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