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Pernod Ricard Owner Earnings per Share (TTM)

: 8.08 (As of Jun. 2019)
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In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

Pernod Ricard's Owner Earnings per Share (TTM) ended in Jun. 2019 was $8.08. It's Price-to-Owner-Earnings ratio for today is 20.38.


OTCPK:PDRDF' s Price-to-Owner-Earnings Range Over the Past 10 Years
Min: 13.55   Med: 20.66   Max: 39.37
Current: 20.38

13.55
39.37

During the past 13 years, the highest Price-to-Owner-Earnings ratio of Pernod Ricard was 39.37. The lowest was 13.55. And the median was 20.66.


OTCPK:PDRDF's Price-to-Owner-Earnings is ranked lower than
51% of the 129 Companies
in the Beverages - Alcoholic industry.

( Industry Median: 20.81 vs. OTCPK:PDRDF: 20.38 )

Pernod Ricard's Earnings per Share (Diluted) for the six months ended in Dec. 2019 was $4.32. Its Earnings per Share (Diluted) for the trailing twelve months (TTM) ended in Dec. 2019 was $6.16. It's PE Ratio ratio for today is 26.71.

Pernod Ricard's EPS without NRI for the six months ended in Dec. 2019 was $4.33. Its EPS without NRI for the trailing twelve months (TTM) ended in Dec. 2019 was $6.17. It's PE Ratio without NRI ratio for today is 26.71.


Pernod Ricard Owner Earnings per Share (TTM) Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Pernod Ricard Annual Data
Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16 Jun17 Jun18 Jun19
Owner Earnings per Share (TTM) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 3.13 5.54 7.15 7.75 7.82

Pernod Ricard Semi-Annual Data
Jun10 Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Jun17 Dec17 Jun18 Dec18 Jun19 Dec19
Owner Earnings per Share (TTM) 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 0.00 7.75 0.00 7.82 0.00

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Pernod Ricard Owner Earnings per Share (TTM) Distribution

* The bar in red indicates where Pernod Ricard's Owner Earnings per Share (TTM) falls into.



Pernod Ricard Owner Earnings per Share (TTM) Calculation

In 1986 Berkshire Hathaway Shareholder Letter, Warren Buffett defined owner earnings as follows:

"These represent (a) reported earnings plus (b) depreciation, depletion, amortization, and certain other non-cash charges...less (c) the average annual amount of capitalized expenditures for plant and equipment, etc. that the business requires to fully maintain its long-term competitive position and its unit volume. (If the business requires additional working capital to maintain its competitive position and unit volume, the increment also should be included in (c))...Our owner-earnings equation does not yield the deceptively precise figures provided by GAAP, since (c) must be a guess - and one sometimes very difficult to make. Despite this problem, we consider the owner earnings figure, not the GAAP figure, to be the relevant item for valuation purposes - both for investors in buying stocks and for managers in buying entire businesses...All of this points up the absurdity of the 'cash flow' numbers that are often set forth in Wall Street reports. These numbers routinely include (a) plus (b) - but do not subtract (c)."

To make it simple, then you will have:

Owner Earnings per Share (TTM) = (Net Income + Depreciation, Depletion and Amortization + Change In Deferred Tax - 5Y Average of Maintenance Capital Expenditure + Change In Working Capital) / Shares Outstanding (Diluted Average)

Pernod Ricard's Owner Earnings per Share (TTM) Calculation:

Last Year Average of Last 5 Years
Net Income 1,644
Depreciation, Depletion and Amortization 255
Change In Deferred Tax 658
5Y Average of Maintenance Capital Expenditure 364
Change In Working Capital -195
Shares Outstanding (Diluted Average) 265

1. Start with "Net Income" from income statement. Pernod Ricard's Net Income for the trailing twelve months (TTM) ended in Jun. 2019 was $1,644 Mil.

2. "Depreciation, Depletion and Amortization" is from cashflow statement. Pernod Ricard's Depreciation, Depletion and Amortization for the trailing twelve months (TTM) ended in Jun. 2019 was $255 Mil. This needs to be added back because company does not actually need to pay cash for it. It is a non-cash item.

3. Other non-cash charges usually include "Stock Based Compensation" and "Change In Deferred Tax":
However, to be conservative, GuruFocus will not add Stock Based Compensation back to net income. Pernod Ricard's Change In Deferred Tax for the trailing twelve months (TTM) ended in Jun. 2019 was $658 Mil.

4. Average maintenance capital expenditure over a business/industry cycle: 5-Year Average Maintenance Capital Expenditure = $364 Mil

It is usually best to take a long-term average of maintenance capital expenditure. Ideally this would be as long as 10 years and include at least one economic downturn. However, since many companies do not have as long as 10-year history, here GuruFocus uses the latest 5 years data to do the calculation. To smooth out unusual years but reflect recent developments, we take an average of the 5 year maintenance capital expenditure.

The following shows how to get maintenance capital expenditure.

First, calculate the revenue change regarding to the previous year. If the revenue decreased from the previous year, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
Second, if the revenue increased from the previous year, then calculate the percentage of Net PPE as of corresponding Revenue.
Growth Capital Expenditure = Percentage of Property, Plant and Equipment as of corresponding Revenue * Revenue Increase
Third, calculate Capital Expenditure (positive) - Growth Capital Expenditure.
If [Capital Expenditure (positive) - Growth Capital Expenditure] was negative, then the Maintenance Capital Expenditure = Capital Expenditure (positive).
If [Capital Expenditure (positive) - Growth Capital Expenditure] was positive, then the Maintenance Capital Expenditure = Capital Expenditure (positive) - Growth Capital Expenditure.
Fourth, get the average of the 5 years maintenance capital expenditure.

Pernod Ricard's 5-Year Average Maintenance Capital Expenditure = $364 Mil

5. "Change In Working Capital" is from cashflow statement. Pernod Ricard's Change In Working Capital for the trailing twelve months (TTM) ended in Jun. 2019 was $-195 Mil.
Note: GuruFocus' Change in Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And sometimes it includes non-current parts of assets and liabilities.

6. Pernod Ricard's Shares Outstanding (Diluted Average) for the months ended in Jun. 2019 was 265.420 Mil.

Pernod Ricard's Onwer Earnings Per Share for Jun. 2019 is calculated as:

Owner Earnings per Share (TTM)
=( Net Income+Depreciation, Depletion and Amortization+Change In Deferred Tax
=( 1644.0677966102 +255.36723163842+657.62711864407
-5Y Avg of Maintenance CAPEX+Change In Working Capital )/Shares Outstanding (Diluted Average)
-364.07080583614+-195.4802259887)/265.420
=8.08

Price-to-Owner-Earnings=Current Price/Owner Earnings per Share (TTM)
=164.64/8.08
=20.38

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Be Aware

Assumption: Companies usually do not report maintenance capital expenditures and growth capital expenditures separately. Here we use estimated numbers and average them over 5 years. The method to estimate maintenance capital expenditures can be found in above part 4.

Note: GuruFocus' Change In Working Capital is provided by Morningstar. It is calculated by adding the items under "Change in operating assets and liabilities" (may refer to a different name for different company) section in Cash Flow Statement from original financial report. And it includes non-current parts of assets and liabilities.


Pernod Ricard Owner Earnings per Share (TTM) Related Terms


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