Pepsi 2011 Annual Report Download - page 50

The table below summarizes our cash activity:
2011 2010 2009
Net cash provided by operating
activities $ 8,944 $ 8,448 $ 6,796
Net cash used for investing activities $ (5,618) $ (7,668) $ (2,401)
Net cash (used for)/provided by
nancing activities $ (5,135) $ 1,386 $ (2,497)
Operating Activities
During 2011, net cash provided by operating activities was $8.9bil-
lion, compared to net cash provided of $8.4billion in the prior year.
The increase over the prior year primarily reects the overlap of
discretionary pension contributions of $1.3billion ($1.0billion after-
tax) in the prior year, partially oset by unfavorable working capital
comparisons to the prior year.
During 2010, net cash provided by operating activities was
$8.4billion, compared to net cash provided of $6.8billion in the
prior year. The increase over the prior year primarily reects the
incremental operating results from our acquisitions of PBG and PAS,
as well as favorable working capital comparisons to the prior year.
Also see “Management Operating Cash Flow” below for certain
other items impacting net cash provided by operating activities.
Investing Activities
During 2011, net cash used for investing activities was $5.6 billion,
primarily reecting $3.3billion for net capital spending and
$2.4 billion of cash paid, net of cash and cash equivalents acquired,
in connection with our acquisition of WBD.
During 2010, net cash used for investing activities was $7.7bil-
lion, primarily reecting $3.2billion for net capital spending,
$2.8billion of net cash paid in connection with our acquisitions of
PBG and PAS, and $0.9billion of cash paid in connection with our
manufacturingand distribution agreement with DPSG. We also paid
$0.5billion to acquire WBD American Depositary Shares (ADS) in
theopen market.
We anticipate capital spending in 2012 of approximately
$3.0billion.
Financing Activities
During 2011, net cash used for nancing activities was $5.1bil-
lion, primarily reecting the return of operating cash ow to our
shareholders through share repurchases and dividend payments of
$5.6billion, our purchase of an additional $1.4billion of WBD ordi-
nary shares (including shares underlying ADSs) and our repurchase
of certain WBD debt obligations of $0.8billion, partially oset by
net proceeds from long- term debt of $1.4billion and stock option
proceeds of $0.9billion.
During 2010, net cash provided by nancing activities was $1.4bil-
lion, primarily reecting proceeds from issuances of long- term debt
of $6.5billion, mostly in connection with our acquisitions of PBG and
PAS, and net proceeds from short- term borrowings of $2.5billion.
These increases were largely oset by the return of operating cash
ow to our shareholders through share repurchases and dividend
payments of $8.0billion.
We annually review our capital structure with our Board, including
our dividend policy and share repurchase activity. In the rst quarter
of 2012, our Board of Directors approved a 4% dividend increase,
raising the dividend payable on our common stock, eective with
the dividend payable in June 2012, to $2.15 per share. We expect to
repurchase approximately $3.0billion of our common stock in 2012.
Management Operating Cash Flow
We focus on management operating cash ow as a key element in
achieving maximum shareholder value, and it is the primary mea-
sure we use to monitor cash ow performance. However, it is not a
measure provided by accounting principles generally accepted in
the U.S. Therefore, this measure is not, and should not be viewed
as, a substitute for U.S. GAAP cash ow measures. Since net capital
spending is essential to our product innovation initiatives and main-
taining our operational capabilities, we believe that it is a recurring
and necessary use of cash. As such, we believe investors should also
consider net capital spending when evaluating our cash from oper-
ating activities. Additionally, we consider certain items (included in
the table below), in evaluating management operating cash ow.
We believe investors should consider these items in evaluating our
management operating cash ow results.
The table below reconciles net cash provided by operating activi-
ties, as reected in our cash ow statement, to our management
operating cash ow excluding the impact of the items below.
2011 2010 2009
Net cash provided by operating activities $ 8,944 $ 8,448 $ 6,796
Capital spending (3,339) (3,253) (2,128)
Sales of property, plant and equipment 84 81 58
Management operating cash ow 5,689 5,276 4,726
Discretionary pension and retiree
medical contributions (after- tax) 44 983 640
Payments related to restructuring
charges (after- tax) 21 20 168
Merger and integration payments
(after- tax) 283 299 49
Foundation contribution (after- tax) – 64 –
Debt repurchase (after- tax) – 112 –
Capital investments related to the
PBG/PAS integration 108 138 –
Management operating cash ow
excluding above items $ 6,145 $ 6,892 $ 5,583
Management’s Discussion and Analysis
PepsiCo, Inc.  Annual Report
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