Income Tax Expense (Benefit)
Components of Deferred Tax Assets and Liabilities
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Diageo PLC, income tax expense (benefit), continuing operations

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
United Kingdom	166)	109)	50)	146)	(88)	(116)
Overseas	596)	628)	540)	545)	509)	608)
Current tax	762)	737)	590)	691)	422)	492)
United Kingdom	(84)	(3)	26)	(219)	45)	(115)
Overseas	78)	143)	1,072)	61)	268)	95)
Deferred tax	(7)	139)	1,098)	(158)	312)	(19)
Taxation on profit from continuing operations	755)	877)	1,688)	533)	734)	472)

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
Current tax	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Diageo PLC current tax increased from 2012 to 2013 and from 2013 to 2014.
Deferred tax	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Diageo PLC deferred tax decreased from 2012 to 2013 and from 2013 to 2014.
Taxation on profit from continuing operations	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Diageo PLC taxation on profit from continuing operations decreased from 2012 to 2013 and from 2013 to 2014.

Diageo PLC, components of deferred tax assets and liabilities

US$ in millions, translated from GBP £

	Jun 30, 2014	Jun 30, 2013	Jun 30, 2012	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009
Deferred tax assets	415)	403)	535)	802)	814)	1,086)
Deferred tax liabilities	(2,305)	(2,456)	(2,316)	(1,207)	(1,145)	(1,004)
Net deferred tax assets (liabilities)	(1,890)	(2,053)	(1,781)	(406)	(331)	82)

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
Deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Diageo PLC deferred tax assets decreased from 2012 to 2013 but then slightly increased from 2013 to 2014.
Net deferred tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Diageo PLC net deferred tax assets (liabilities) decreased from 2012 to 2013 but then increased from 2013 to 2014 not reaching 2012 level.

Diageo PLC, adjustments to financial statements

US$ in millions, translated from GBP £

	Jun 30, 2014	Jun 30, 2013	Jun 30, 2012	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009
Adjustment to Total Assets
Total assets (as reported)	38,784)	41,559)	36,347)	30,729)	29,943)	29,258)
Less: Noncurrent deferred tax assets, net	415)	403)	535)	802)	814)	1,086)
Total assets (adjusted)	38,369)	41,157)	35,812)	29,927)	29,129)	28,171)
Adjustment to Total Liabilities
Total liabilities (as reported)	25,965)	28,124)	25,271)	21,429)	22,577)	22,894)
Less: Noncurrent deferred tax liabilities, net	2,305)	2,456)	2,316)	1,207)	1,145)	1,004)
Total liabilities (adjusted)	23,660)	25,668)	22,955)	20,222)	21,431)	21,890)
Adjustment to Equity Attributable To Equity Shareholders Of The Parent Company
Equity attributable to equity shareholders of the parent company (as reported)	11,523)	11,661)	9,088)	8,149)	6,167)	5,208)
Less: Net deferred tax assets (liabilities)	(1,890)	(2,053)	(1,781)	(406)	(331)	82)
Equity attributable to equity shareholders of the parent company (adjusted)	13,413)	13,714)	10,868)	8,555)	6,498)	5,125)
Adjustment to Profit For The Year Attributable To Equity Shareholders Of The Parent Company
Profit for the year attributable to equity shareholders of the parent company (as reported)	3,797)	4,118)	3,158)	2,952)	2,507)	2,621)
Add: Deferred income tax expense (benefit)	(7)	139)	1,098)	(158)	312)	(19)
Profit for the year attributable to equity shareholders of the parent company (adjusted)	3,790)	4,258)	4,256)	2,794)	2,820)	2,601)

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).

Diageo PLC, Financial Data: Reported vs. Adjusted

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Diageo PLC, adjusted financial ratios

	Jun 30, 2014	Jun 30, 2013	Jun 30, 2012	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009
Net Profit Margin
Reported net profit margin	16.08%	16.05%	13.31%	14.36%	12.57%	13.20%
Adjusted net profit margin	16.05%	16.59%	17.93%	13.59%	14.14%	13.10%
Total Asset Turnover
Reported total asset turnover	0.61	0.62	0.65	0.67	0.67	0.68
Adjusted total asset turnover	0.62	0.62	0.66	0.69	0.68	0.70
Financial Leverage
Reported financial leverage	3.37	3.56	4.00	3.77	4.86	5.62
Adjusted financial leverage	2.86	3.00	3.30	3.50	4.48	5.50
Return on Equity (ROE)
Reported ROE	32.95%	35.32%	34.75%	36.22%	40.65%	50.33%
Adjusted ROE	28.25%	31.05%	39.16%	32.66%	43.39%	50.76%
Return on Assets (ROA)
Reported ROA	9.79%	9.91%	8.69%	9.61%	8.37%	8.96%
Adjusted ROA	9.88%	10.34%	11.88%	9.33%	9.68%	9.23%

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).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Diageo PLC adjusted net profit margin ratio deteriorated from 2012 to 2013 and from 2013 to 2014.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Diageo PLC adjusted total asset turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Diageo PLC adjusted financial leverage ratio decreased from 2012 to 2013 and from 2013 to 2014.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Diageo PLC adjusted ROE deteriorated from 2012 to 2013 and from 2013 to 2014.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Diageo PLC adjusted ROA deteriorated from 2012 to 2013 and from 2013 to 2014.

Diageo PLC, Financial Ratios: Reported vs. Adjusted

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	Jun 30, 2014	Jun 30, 2013	Jun 30, 2012	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Profit for the year attributable to equity shareholders of the parent company	3,797)	4,118)	3,158)	2,952)	2,507)	2,621)
Sales	23,611)	25,666)	23,734)	20,559)	19,945)	19,859)
Profitability Ratio
Net profit margin¹	16.08%	16.05%	13.31%	14.36%	12.57%	13.20%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted profit for the year attributable to equity shareholders of the parent company	3,790)	4,258)	4,256)	2,794)	2,820)	2,601)
Sales	23,611)	25,666)	23,734)	20,559)	19,945)	19,859)
Profitability Ratio
Adjusted net profit margin²	16.05%	16.59%	17.93%	13.59%	14.14%	13.10%

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).

2014 Calculations

¹ Net profit margin = 100 × Profit for the year attributable to equity shareholders of the parent company ÷ Sales
= 100 × 3,797 ÷ 23,611 = 16.08%

² Adjusted net profit margin = 100 × Adjusted profit for the year attributable to equity shareholders of the parent company ÷ Sales
= 100 × 3,790 ÷ 23,611 = 16.05%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Diageo PLC adjusted net profit margin ratio deteriorated from 2012 to 2013 and from 2013 to 2014.

	Jun 30, 2014	Jun 30, 2013	Jun 30, 2012	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Sales	23,611)	25,666)	23,734)	20,559)	19,945)	19,859)
Total assets	38,784)	41,559)	36,347)	30,729)	29,943)	29,258)
Activity Ratio
Total asset turnover¹	0.61	0.62	0.65	0.67	0.67	0.68
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions, translated from GBP £)
Sales	23,611)	25,666)	23,734)	20,559)	19,945)	19,859)
Adjusted total assets	38,369)	41,157)	35,812)	29,927)	29,129)	28,171)
Activity Ratio
Adjusted total asset turnover²	0.62	0.62	0.66	0.69	0.68	0.70

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).

2014 Calculations

¹ Total asset turnover = Sales ÷ Total assets
= 23,611 ÷ 38,784 = 0.61

² Adjusted total asset turnover = Sales ÷ Adjusted total assets
= 23,611 ÷ 38,369 = 0.62

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Diageo PLC adjusted total asset turnover ratio deteriorated from 2012 to 2013 and from 2013 to 2014.

	Jun 30, 2014	Jun 30, 2013	Jun 30, 2012	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Total assets	38,784)	41,559)	36,347)	30,729)	29,943)	29,258)
Equity attributable to equity shareholders of the parent company	11,523)	11,661)	9,088)	8,149)	6,167)	5,208)
Solvency Ratio
Financial leverage¹	3.37	3.56	4.00	3.77	4.86	5.62
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted total assets	38,369)	41,157)	35,812)	29,927)	29,129)	28,171)
Adjusted equity attributable to equity shareholders of the parent company	13,413)	13,714)	10,868)	8,555)	6,498)	5,125)
Solvency Ratio
Adjusted financial leverage²	2.86	3.00	3.30	3.50	4.48	5.50

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).

2014 Calculations

¹ Financial leverage = Total assets ÷ Equity attributable to equity shareholders of the parent company
= 38,784 ÷ 11,523 = 3.37

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted equity attributable to equity shareholders of the parent company
= 38,369 ÷ 13,413 = 2.86

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Diageo PLC adjusted financial leverage ratio decreased from 2012 to 2013 and from 2013 to 2014.

	Jun 30, 2014	Jun 30, 2013	Jun 30, 2012	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Profit for the year attributable to equity shareholders of the parent company	3,797)	4,118)	3,158)	2,952)	2,507)	2,621)
Equity attributable to equity shareholders of the parent company	11,523)	11,661)	9,088)	8,149)	6,167)	5,208)
Profitability Ratio
ROE¹	32.95%	35.32%	34.75%	36.22%	40.65%	50.33%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted profit for the year attributable to equity shareholders of the parent company	3,790)	4,258)	4,256)	2,794)	2,820)	2,601)
Adjusted equity attributable to equity shareholders of the parent company	13,413)	13,714)	10,868)	8,555)	6,498)	5,125)
Profitability Ratio
Adjusted ROE²	28.25%	31.05%	39.16%	32.66%	43.39%	50.76%

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).

2014 Calculations

¹ ROE = 100 × Profit for the year attributable to equity shareholders of the parent company ÷ Equity attributable to equity shareholders of the parent company
= 100 × 3,797 ÷ 11,523 = 32.95%

² Adjusted ROE = 100 × Adjusted profit for the year attributable to equity shareholders of the parent company ÷ Adjusted equity attributable to equity shareholders of the parent company
= 100 × 3,790 ÷ 13,413 = 28.25%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Diageo PLC adjusted ROE deteriorated from 2012 to 2013 and from 2013 to 2014.

	Jun 30, 2014	Jun 30, 2013	Jun 30, 2012	Jun 30, 2011	Jun 30, 2010	Jun 30, 2009
As Reported
Selected Financial Data (US$ in millions, translated from GBP £)
Profit for the year attributable to equity shareholders of the parent company	3,797)	4,118)	3,158)	2,952)	2,507)	2,621)
Total assets	38,784)	41,559)	36,347)	30,729)	29,943)	29,258)
Profitability Ratio
ROA¹	9.79%	9.91%	8.69%	9.61%	8.37%	8.96%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions, translated from GBP £)
Adjusted profit for the year attributable to equity shareholders of the parent company	3,790)	4,258)	4,256)	2,794)	2,820)	2,601)
Adjusted total assets	38,369)	41,157)	35,812)	29,927)	29,129)	28,171)
Profitability Ratio
Adjusted ROA²	9.88%	10.34%	11.88%	9.33%	9.68%	9.23%

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).

2014 Calculations

¹ ROA = 100 × Profit for the year attributable to equity shareholders of the parent company ÷ Total assets
= 100 × 3,797 ÷ 38,784 = 9.79%

² Adjusted ROA = 100 × Adjusted profit for the year attributable to equity shareholders of the parent company ÷ Adjusted total assets
= 100 × 3,790 ÷ 38,369 = 9.88%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Diageo PLC adjusted ROA deteriorated from 2012 to 2013 and from 2013 to 2014.

Diageo PLC (NYSE:DEO)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Components of Deferred Tax Assets and Liabilities

Adjustments to Financial Statements: Removal of Deferred Taxes

Diageo PLC, Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Diageo PLC, Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)