Pepsi 2014 Annual Report Download - page 84

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and credit markets will not impair our ability to access these markets on terms commercially acceptable to
us, or at all. See Note 9 to our consolidated financial statements for a description of our credit facilities. See
also “Unfavorable economic conditions may have an adverse impact on our business, financial condition or
results of operations.” in “Risk Factors” in Item 1A.
As of December 27, 2014, we had cash, cash equivalents and short-term investments of $7.4 billion outside
the U.S. In the fourth quarter of 2014, we remitted $6 billion of international cash to the United States through
a return of basis, which was used to repay commercial paper borrowings. As a return of basis, there was no
impact on our international earnings and the impact on our provision for income taxes was insignificant. To
the extent foreign earnings are repatriated, such amounts would be subject to income tax liabilities, both in
the U.S. and in various applicable foreign jurisdictions. In addition, currency restrictions enacted by the
government in Venezuela have impacted our ability to pay dividends outside of the country from our snack
and beverage operations in Venezuela. As of December 27, 2014 and December 28, 2013, our operations in
Venezuela comprised 9% and 5%, respectively, of our cash and cash equivalents balance. For additional
information on the impact of our remeasurement, see “Market Risks – Foreign Exchange” in “Our Business
Risks” and “Items Affecting Comparability.”
Furthermore, our cash provided from operating activities is somewhat impacted by seasonality. Working
capital needs are impacted by weekly sales, which are generally highest in the third quarter due to seasonal
and holiday-related sales patterns, and generally lowest in the first quarter. On a continuing basis, we consider
various transactions to increase shareholder value and enhance our business results, including acquisitions,
divestitures, joint ventures, share repurchases, productivity and other efficiency initiatives, and other
structural changes. These transactions may result in future cash proceeds or payments.
The table below summarizes our cash activity:
2014 2013 2012
Net cash provided by operating activities $ 10,506 $ 9,688 $ 8,479
Net cash used for investing activities $ (4,937) $ (2,625) $ (3,005)
Net cash used for financing activities $ (8,264) $ (3,789) $ (3,306)
Operating Activities
During 2014, net cash provided by operating activities was $10.5 billion, compared to $9.7 billion in the
prior year. The operating cash flow performance primarily reflects lapping the impact of the prior year U.S.
federal net cash tax payments of $758 million, including interest, related to an agreement with the IRS
resolving all open matters related to the audits for taxable years 2003 through 2009 and $226 million of cash
payments for other federal, state and local tax matters related to open tax years. See Note 5 to our consolidated
financial statements. This impact was partially offset by discretionary pension and retiree medical
contributions, pertaining to the lump sum payments, in the United States of $388 million ($261 million after-
tax) in 2014.
During 2013, net cash provided by operating activities was $9.7 billion, compared to $8.5 billion in the prior
year. The operating cash flow performance primarily reflects the overlap of discretionary pension and retiree
medical contributions of $1.5 billion ($1.1 billion after-tax) made in 2012, higher restructuring and cash
payments related to the transaction with Tingyi in 2012 and favorable working capital comparisons to 2012.
These impacts were partially offset by the tax payments described above.
Also see “Free Cash Flow” below for certain other items impacting net cash provided by operating activities.
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