The following table presents selected consolidated financial data for Diageo prepared under International Financial Reporting Standards (IFRS) as
endorsed and adopted for use in the European Union (EU) and IFRS as issued by the International Accounting Standards Board (IASB) for the four years
ended 30 June 2008 and as at the respective year ends. References to IFRS hereafter should be construed as references to both IFRS as adopted by the
EU and IFRS as issued by the IASB, unless otherwise indicated. Consolidated financial data was prepared in accordance with IFRS for the first time for
the year ended 30 June 2006, following the implementation of IFRS by the group, and the data for the year ended 30 June 2005 was adjusted
accordingly to IFRS. The data presented below has been derived from Diageo’s audited consolidated financial statements.
| Year ended 30 June |
| Income statement data(1) |
2008
£ million |
2007
£ million |
2006
£ million |
2005
£ million |
| Sales |
10,643 |
9,917 |
9,704 |
8,968 |
| Operating profit(3) |
2,226 |
2,159 |
2,044 |
1,731 |
| Profit for the year |
| Continuing operations(3) (4) |
1,571 |
1,417 |
1,965 |
1,326 |
| Discontinued operations(2) |
26 |
139 |
– |
73 |
| Total profit for the year(3) (4) |
1,597 |
1,556 |
1,965 |
1,399 |
| Per share data |
pence |
pence |
pence |
pence |
| Dividend per share(5) |
34.35 |
32.70 |
31.10 |
29.55 |
| Earnings per share |
| Basic |
| Continuing operations |
58.3 |
50.2 |
67.2 |
42.8 |
| Discontinued operations(2) |
1.0 |
5.2 |
– |
2.4 |
| Basic earnings per share |
59.3 |
55.4 |
67.2 |
45.2 |
| Diluted |
| Continuing operations |
57.9 |
49.9 |
66.9 |
42.8 |
| Discontinued operations(2) |
1.0 |
5.1 |
– |
2.4 |
| Diluted earnings per share |
58.9 |
55.0 |
66.9 |
45.2 |
| |
million |
million |
million |
million |
| Average shares |
2,566 |
2,688 |
2,841 |
2,972 |
| As at 30 June |
| Balance sheet data(1) |
2008
£ million |
2007
£ million |
2006
£ million |
2005
£ million |
| Total assets |
16,027 |
13,956 |
13,927 |
13,921 |
| Net borrowings(6) |
6,447 |
4,845 |
4,082 |
3,706 |
| Equity attributable to the parent company's equity shareholders |
3,498 |
3,972 |
4,502 |
4,459 |
| Called up share capital(7) |
816 |
848 |
883 |
883 |
NOTES TO THE HISTORICAL INFORMATION
1 Accounting policies The financial statements for the years ended 30 June 2008, 30 June 2007 and 30 June 2006 were prepared in accordance
with IFRS. Extracts from the income statement and balance sheet as of and for the year ended 30 June 2005 presented here have been restated under
IFRS as applied by the group from financial information previously reported in the group’s consolidated financial statements as of and for the year
ended 30 June 2005 prepared in accordance with UK GAAP. The group adopted the provisions of IAS 39 – Financial instruments: recognition and
measurement from 1 July 2005. As permitted under IFRS 1 – First-time adoption of International Financial Reporting Standards, financial instruments
in the year ended 30 June 2005 remain recorded in accordance with previous UK GAAP accounting policies, and the adjustment to IAS 39 was reflected
in the consolidated balance sheet at 1 July 2005. The IFRS accounting policies applied by the group to the financial information in this document
are presented in ‘Accounting policies of the group’ in the financial statements. No reconciliation to US GAAP is included in the financial statements
following the SEC’s adoption of a rule accepting financial statements from foreign private issuers prepared in accordance with IFRS as issued by the
IASB without that reconciliation.
2 Discontinued operations Discontinued operations in the years ended 30 June 2008, 30 June 2007 and 30 June 2005 are adjustments in respect of
the quick service restaurants business (Burger King, sold 13 December 2002) and the packaged food business (Pillsbury, sold 31 October 2001).
3 Exceptional items These are items which, in management’s judgement, need to be disclosed by virtue of their size or incidence in order for the user
to obtain a proper understanding of the financial information. Such items are included within the income statement caption to which they relate. An
analysis of exceptional items before taxation for continuing operations is as follows:
| |
Year ended 30 June |
| |
2008
£ million |
2007
£ million |
2006
£ million |
2005
£ million |
| Exceptional items (charged)/credited to operating profit |
| Restructuring of Irish brewing operations |
(78) |
– |
– |
– |
| Disposal of Park Royal property |
– |
40 |
– |
– |
| Park Royal brewery accelerated depreciation |
– |
– |
– |
(29) |
| Seagram integration costs |
– |
– |
– |
(30) |
| Thalidomide Trust |
– |
– |
– |
(149) |
| Disposal of other property |
– |
– |
– |
7 |
| |
(78) |
40 |
– |
(201) |
| Other exceptional items |
| Gain on disposal of General Mills shares |
– |
– |
151 |
221 |
| Gains/(losses) on disposal and termination of businesses |
9 |
(1) |
6 |
(7) |
| |
9 |
(1) |
157 |
214 |
| Total exceptional items |
(69) |
39 |
157 |
13 |
In the year ended 30 June 2008, there were exceptional tax credits of £8 million (2007 – £nil; 2006 – £315 million; 2005 – £78 million).
4 Taxation The taxation charge deducted from income for the year in determining profit from continuing operations for the year ended 30 June 2008
was £522 million (2007 – £678 million; 2006 – £181 million; 2005 – £599 million). Included in the taxation charge were the following items: in the year
ended 30 June 2008, a tax credit of £8 million on exceptional items; in the year ended 30 June 2007, a net tax charge of £24 million from intra group
reorganisations of brand businesses, a reduction in the carrying value of deferred tax assets primarily following a reduction in tax rates of £74 million,
and a provision for settlement of tax liabilities related to the GrandMet/Guinness merger of £64 million; in the year ended 30 June 2006, an exceptional
tax credit of £315 million arose principally as a consequence of the agreement with fiscal authorities of the carrying values of certain brands, which
resulted in an increase to the group’s deferred tax assets of £313 million; and in the year ended 30 June 2005, there were £58 million of tax credits on
exceptional operating items and £20 million of tax credits on exceptional prior year business disposals.
5 Dividends The board expects that Diageo will pay an interim dividend in April and a final dividend in October of each year. Approximately 40% of
the total dividend in respect of any financial year is expected to be paid as an interim dividend and approximately 60% as a final dividend. The
payment of any future dividends, subject to shareholder approval, will depend upon Diageo’s earnings, financial condition and such other factors as the
board deems relevant. Proposed dividends are not considered to be a liability until they are approved by the board for the interim dividend and by the
shareholders at the annual general meeting for the final dividend. The information provided in the tables above and below represents the amounts
payable in respect of the relevant financial year, and the final dividend amount included in these tables represents the dividend proposed by the
directors but not approved by the shareholders and therefore is not reflected as a deduction from reserves at the balance sheet date.
The table below sets out the amounts of interim, final and total cash dividends paid by the company on each ordinary share. The dividends are
translated into US dollars per ADS (each ADS representing four ordinary shares) at the noon buying rate on each of the respective dividend payment dates.
| |
|
Year ended 30 June |
| |
|
2008
pence |
2007
pence |
2006
pence |
2005
pence |
2004
pence |
| Per ordinary share |
Interim |
13.20 |
12.55 |
11.95 |
11.35 |
10.60 |
| |
Final |
21.15 |
20.15 |
19.15 |
18.20 |
17.00 |
| |
Total |
34.35 |
32.70 |
31.10 |
29.55 |
27.60 |
| |
|
$ |
$ |
$ |
$ |
$ |
| Per ADS |
Interim |
1.05 |
1.01 |
0.88 |
0.81 |
0.77 |
| |
Final |
1.68 |
1.62 |
1.42 |
1.30 |
1.24 |
| |
Total |
2.73 |
2.63 |
2.30 |
2.11 |
2.01 |
Note: Subject to shareholder approval, the final dividend for the year ended 30 June 2008 will be paid on 20 October 2008 and payment to US ADR holders will be made on 24 October 2008. In
the table above, an exchange rate of £1 = $1.99 has been used to calculate this dividend, but the exact amount of the payment to US ADR holders will be determined by the rate of exchange on
20 October 2008.
6 Definitions Net borrowings are defined as total borrowings (short term borrowings and long term borrowings plus finance lease obligations),
interest rate fair value hedging instruments and foreign currency swaps and forwards, less cash and cash equivalents and other liquid resources.
Other liquid resources represent amounts with an original maturity date of greater than three months but less than one year.
7 Share capital The called up share capital represents the par value of ordinary shares of 28101/108 pence in issue. There were 2,822 million ordinary
shares in issue and fully paid up at the balance sheet date (2007 – 2,931 million; 2006 – 3,051 million; 2005 – 3,050 million; 2004 – 3,057 million).
Of these, 26 million are held in employee share trusts (2007 – 33 million; 2006 – 42 million; 2005 – 43 million; 2004 – 43 million) and 279 million are
held as treasury shares (2007 – 281 million; 2006 – 252 million; 2005 – 86 million; 2004 – nil). Shares held in employee share trusts and treasury shares
are deducted in arriving at equity attributable to the parent company’s equity shareholders.
During the year ended 30 June 2008, the company repurchased 97 million ordinary shares for cancellation at a cost including fees and stamp duty
of £1,008 million (2007 – 141 million ordinary shares, cost of £1,405 million; 2006 – 164 million ordinary shares, cost of £1,407 million; 2005 – 94 million
ordinary shares, cost of £710 million; 2004 – 43 million ordinary shares, cost of £306 million) and 11 million ordinary shares to be held as treasury shares
for hedging share scheme grants provided to employees during the year at a cost of £124 million (2007 – 9 million ordinary shares, cost of £82 million;
2006 – 2 million ordinary shares, cost of £21 million; 2005 and 2004 – nil, £nil). In addition the company utilised 1 million ordinary shares held as
treasury shares with an historical purchase cost of £11 million to satisfy options exercised by employees during the year (2007 – 1 million ordinary
shares, cost of £10 million; 2006 and 2005 – nil, £nil).
8 Exchange rates A substantial portion of the group’s assets, liabilities, revenues and expenses are denominated in currencies other than pound
sterling, principally US dollars. For a discussion of the impact of exchange rate fluctuations on the company’s financial condition and results of
operations, see ‘Business review – Risk management’.
The following table shows period end and average US dollar/pound sterling noon buying exchange rates, for the periods indicated, expressed in
US dollars per £1.
| |
Year ended 30 June |
| |
2008
$ |
2007
$ |
2006
$ |
2005
$ |
2004
$ |
| Year end |
1.99 |
2.01 |
1.85 |
1.79 |
1.81 |
| Average rate(a) |
2.01 |
1.93 |
1.78 |
1.86 |
1.75 |
The following table shows period end, high, low and average US dollar/pound sterling noon buying exchange rates by month, for the six month period to
27 August 2008, expressed in US dollars per £1. The information in respect of the month of August is for the period up to and including 27 August 2008.
| |
2008 |
| |
August
$ |
July
$ |
June
$ |
May
$ |
April
$ |
March
$ |
| Month end |
1.83 |
1.98 |
1.99 |
1.98 |
1.98 |
1.99 |
| Month high |
1.97 |
2.00 |
1.99 |
1.98 |
2.00 |
2.03 |
| Month low |
1.83 |
1.97 |
1.95 |
1.95 |
1.96 |
1.98 |
| Average rate(b) |
1.89 |
1.99 |
1.97 |
1.96 |
1.98 |
2.00 |
- (a) The average of the noon buying rates on the last business day of each month during the year ended 30 June.
- (b) The average of the noon buying rates on each business day of the month.
- (c) These rates have been provided for information only. They are not necessarily the rates that have been used in this document for currency translations or in the preparation of the consolidated financial statements. See note 2(i)(d) to the consolidated financial statements for the actual rates used.