Diageo PLC, FCFE calculation

US$ in millions, translated from GBP £

12 months ended:	Jun 30, 2014	Jun 30, 2013	Jun 30, 2012	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009
Profit for the year attributable to equity shareholders of the parent company	3,797)	4,118)	3,158)	2,952)	2,507)	2,621)
Profit for the year attributable to non-controlling interests	(113)	181)	211)	182)	175)	168)
Net noncash charges	348)	12)	894)	463)	505)	398)
Net (increase) decrease in working capital	(1,008)	(916)	(860)	(174)	514)	(456)
Net cash from operating activities	3,023)	3,394)	3,404)	3,423)	3,702)	2,731)
Disposal of property, plant and equipment and computer software	135)	65)	63)	73)	220)	23)
Purchase of property, plant and equipment and computer software	(1,084)	(1,066)	(787)	(651)	(576)	(529)
Net movements on borrowings	(265)	2,045)	833)	(643)	(650)	414)
Free cash flow to equity (FCFE)	1,809)	4,438)	3,513)	2,202)	2,697)	2,639)

Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).

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Item	Description	The company
FCFE	Free cash flow to equity is the cash flow available to Diageo PLC equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.	Diageo PLC FCFE increased from 2012 to 2013 but then decreased significantly from 2013 to 2014.

Diageo PLC, current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	688,554,634
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)	1,809)
FCFE per share	2.63
Current share price (P)	117.25
Valuation Ratio
P/FCFE	44.63
Benchmarks
P/FCFE, Competitors¹
Altria Group Inc.	8.74
Coca-Cola Co.	22.80
Mondelēz International Inc.	—
PepsiCo Inc.	18.72

Based on: 20-F (reporting date: 2014-06-30).

¹ Click competitor name to see calculations.

If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.

Diageo PLC, historical P/FCFE calculation, comparison to benchmarks

	Jun 30, 2014	Jun 30, 2013	Jun 30, 2012	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009
No. shares of common stock outstanding¹	688,554,634	688,541,645	688,528,996	688,500,274	688,486,701	705,464,315
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)²	1,809)	4,438)	3,513)	2,202)	2,697)	2,639)
FCFE per share³	2.63	6.45	5.10	3.20	3.92	3.74
Share price^1, 4	117.25	129.07	110.85	76.14	67.92	62.88
Valuation Ratio
P/FCFE⁵	44.63	20.02	21.73	23.81	17.34	16.81
Benchmarks
P/FCFE, Competitors⁶
Altria Group Inc.	—	—	—	—	—	—
Coca-Cola Co.	—	—	—	—	—	—
Mondelēz International Inc.	—	—	—	—	—	—
PepsiCo Inc.	—	—	—	—	—	—

Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2014 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,808,816,004 ÷ 688,554,634 = 2.63

⁴ Closing price as at the filing date of Diageo PLC Annual Report.

⁵ 2014 Calculation
P/FCFE = Share price ÷ FCFE per share
= 117.25 ÷ 2.63 = 44.63

⁶ Click competitor name to see calculations.

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Valuation ratio	Description	The company
P/FCFE	Price to free cash flow to equity is cash valuation indicator of stockholders’ equity.	Diageo PLC P/FCFE ratio decreased from 2012 to 2013 but then increased from 2013 to 2014 exceeding 2012 level.

Diageo PLC (NYSE:DEO)

Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)

Price to FCFE Ratio, Current

Price to FCFE Ratio, Historical