US: PepsiCo repatriates earnings, declares dividend
PepsiCo is to repatriate US$7.5bn of undistributed international earnings. The company has also revealed details of its quarterly dividend.
PepsiCo's board of directors said on Friday (22 July) that it has approved the repatriation of up to US$7.5bn of undistributed international earnings under the provisions of the American Jobs Creation Act (AJCA). Tax expense associated with the repatriation, currently estimated at US$475m, will be recorded in the third quarter of 2005, the company said.
The repatriation provision of the AJCA requires that funds be invested in qualified investments in the US. These US-only investments include: compensation and benefits for employees, hiring and training, capital and infrastructure investments, research and development, and advertising and marketing expenditures.
At the same time, the board said the company will make pension plan cash contributions of up to US$800m in the fourth quarter of this year.
A regular quarterly dividend of 26 cents per share of PepsiCo common stock will be payable on 30 September to shareholders of record on 9 September.
PepsiCo said that it expects 2005 reported earnings per share of between US$2.32 and US$2.35. The US drinks company reaffirmed its 2005 52-week earnings guidance, excluding the impact of the tax expense associated with the approved repatriation, of US$2.56 - US$2.59 per share.
PepsiCo reaffirmed its expectation of 2005 cash from operating activities in excess of US$5.7bn and net capital spending of approximately US$1.6bn. The company also reaffirmed its expectation to repurchase between US$2.5bn and US$3bn of its common stock this year.
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