Pepsi 2015 Annual Report Download - page 86

Table of Contents
69
Our Liquidity and Capital Resources
We believe that our cash generating capability and financial condition, together with our revolving credit
facilities and other available methods of debt financing, such as commercial paper borrowings and long-term
debt financing, will be adequate to meet our operating, investing and financing needs. Our primary sources
of cash available to us to fund cash outflows, such as our anticipated share repurchases, dividend payments
and scheduled debt maturities, include cash from operations and proceeds obtained from issuances of
commercial paper and long-term debt. However, there can be no assurance that volatility in the global capital
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 “Item 1A. Risk Factors.”
As of December 26, 2015, we had cash, cash equivalents and short-term investments in our consolidated
subsidiaries of $11.1 billion outside the U.S. 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.
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:
2015 2014 2013
Net cash provided by operating activities $ 10,580 $ 10,506 $ 9,688
Net cash used for investing activities $ (3,569) $ (4,937) $ (2,625)
Net cash used for financing activities $ (3,828) $ (8,264) $ (3,789)
Operating Activities
During 2015, net cash provided by operating activities was $10.6 billion, compared to $10.5 billion in the
prior year. The operating cash flow performance in part reflects lapping the impact of prior-year discretionary
pension and retiree medical contributions, pertaining to the lump sum settlement payments, in the United
States of $388 million ($261 million after-tax). In addition, working capital (comprised of changes in accounts
and notes receivable, inventories, prepaid expenses and other current assets, and accounts payable and other
current liabilities, each adjusted for the effects of currency translation and the Venezuela deconsolidation)
reflects favorable comparisons to the prior year. These increases were partially offset by unfavorable operating
profit performance.
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 2013 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 the discretionary pension and retiree medical contributions
described above.
Also see “Free Cash Flow” below for certain other items impacting net cash provided by operating activities.