Levered and unlevered free cash flow

Levered and unlevered free cash flow are two versions of free cash flow that differ in how they treat the company's debt.

Unlevered free cash flow is the cash the business generates before any interest payments to lenders, as if it had no debt. It is the cash available to everyone who funds the company, lenders and shareholders together, which is why discounted cash flow models that value the whole business usually start from it.

Levered free cash flow is what remains after interest payments. It is the cash available to shareholders alone.

For a company with little debt the two figures are close. The more interest a company pays, the further levered free cash flow falls below unlevered. Data sites calculate both with their own formulas, so their figures can differ from a simple operating cash flow minus capital expenditure, and from another site's version of the same measure.