Reynolds American Inc., FCFE calculation

US$ in millions

12 months ended:	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Net income	6,073)	3,253)	1,470)	1,718)	1,272)
Net noncash charges	(4,112)	(3,624)	(99)	571)	237)
Other changes that provided (used) cash	(681)	567)	252)	(981)	59)
Net cash flows from operating activities	1,280)	196)	1,623)	1,308)	1,568)
Capital expenditures	(206)	(174)	(204)	(153)	(88)
Repayments of long-term debt	(500)	(450)	—)	(1,035)	(1,076)
Early extinguishment of debt	(3,650)	—)	—)	—)	—)
Premiums paid for early extinguishment of debt	(207)	—)	—)	(155)	(20)
Issuance of long-term debt	—)	8,975)	—)	1,097)	2,539)
Debt issuance costs and financing fees	(8)	(70)	(79)	(18)	(22)
Borrowings under revolving credit facility	—)	1,400)	1,000)	—)	—)
Repayments of borrowings under revolving credit facility	—)	(1,400)	(1,000)	—)	—)
Principal borrowings under term-loan credit facility	—)	—)	—)	500)	750)
Repayments under term-loan credit facility	—)	—)	—)	(500)	(750)
Free cash flow to equity (FCFE)	(3,291)	8,477)	1,340)	1,044)	2,901)

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

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Item	Description	The company
FCFE	Free cash flow to equity is the cash flow available to Reynolds American Inc. equity holders after all operating expenses, interest, and principal payments have been paid and necessary investments in working and fixed capital have been made.	Reynolds American Inc. FCFE increased from 2014 to 2015 but then decreased significantly from 2015 to 2016.

Reynolds American Inc., current P/FCFE calculation, comparison to benchmarks

No. shares of common stock outstanding	1,426,711,959
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)	(3,291)
FCFE per share	-2.31
Current share price (P)	64.47
Valuation Ratio
P/FCFE	—
Benchmarks
P/FCFE, Competitors¹
Altria Group Inc.	11.13
Coca-Cola Co.	23.24
PepsiCo Inc.	16.89
Philip Morris International Inc.	17.50

Based on: 10-K (reporting date: 2016-12-31).

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.

Reynolds American Inc., historical P/FCFE calculation, comparison to benchmarks

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
No. shares of common stock outstanding¹	1,425,934,305	1,427,341,341	1,062,567,026	1,073,894,304	1,105,896,384
Selected Financial Data (US$)
Free cash flow to equity (FCFE) (in millions)²	(3,291)	8,477)	1,340)	1,044)	2,901)
FCFE per share³	-2.31	5.94	1.26	0.97	2.62
Share price^1, 4	60.54	48.50	35.15	24.04	21.97
Valuation Ratio
P/FCFE⁵	—	8.17	27.87	24.73	8.38
Benchmarks
P/FCFE, Competitors⁶
Altria Group Inc.	—	—	—	—	—
Coca-Cola Co.	—	—	—	—	—
PepsiCo Inc.	—	—	—	—	—
Philip Morris International Inc.	—	—	—	—	—

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

¹ Data adjusted for splits and stock dividends.

² See details »

³ 2016 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= -3,291,000,000 ÷ 1,425,934,305 = -2.31

⁴ Closing price as at the filing date of Reynolds American Inc. Annual Report.

⁵ 2016 Calculation
P/FCFE = Share price ÷ FCFE per share
= 60.54 ÷ -2.31 = —

⁶ Click competitor name to see calculations.

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Reynolds American Inc. (NYSE:RAI)

Price to FCFE (P/FCFE)

Free Cash Flow to Equity (FCFE)

Price to FCFE Ratio, Current

Price to FCFE Ratio, Historical