Page 14 - BD Playbook

INTRODUCTION ◆ STRATEGY & PROCESS ◆ SOCIAL SELLING ◆ COMPETITIVE ANALYSIS ◆ MARKETING COLLABORATION ◆ WRAP-UP STRATEGY & PROCESS

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2017
Annual
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Annual Report 2016

Nestlé Waters Diageo Procter & Gamble 1
Food & Beverage Beer, Wine & Spirits Consumer Goods

40 The Procter & Gamble Company
2016 PepsiCo Annual Report | 147
Million US dollar 2016 2015 Consolidated Statements of Cash Flows
Core Net ROIC Growth Reconciliation Forward- Looking Statements
Year Ended Growth vs. Operating activities 2 769 9 867 Amounts in millions; Years ended June 30 2017 2016 2015
Profit .....................................................................................................................................
12/31/16 Prior Year Interest, taxes and non-cash items included in profit ................................................................... 13 572 6 859 CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR $ 7,102 $ 6,836 $ 8,548
ROIC Growth 15.2% 210 bps This Annual Report contains statements reflecting our views about Cash flow from operating activities before changes in working capital and use of OPERATING ACTIVITIES
Impact of: our future performance that constitute “ forward- looking state- provisions ............................................................................................................................. 16 341 16 726 Net earnings 15,411 10,604 7,144
ments” within the meaning of the Private Securities Litigation
Average Cash, Cash Equivalents and Change in working capital......................................................................................................... 173 1 786 Depreciation and amortization 2,820 3,078 3,134
Short-Term Investments 6.0 188 Reform Act of 1995 (Reform Act). Statements that constitute Pension contributions and use of provisions ................................................................................ (470) (449) Loss on early extinguishment of debt 543 — —
Interest Income (0.2) (10) forward- looking statements within the meaning of the Reform Interest and taxes (paid)/received ............................................................................................. (5 977) (3 964) Share-based compensation expense 351 335 337
22
Tax on Interest Income 0.1 4 Act are generally identified through the inclusion of words such Dividends received .................................................................................................................. 10 110 43 14 121 Deferred income taxes (601) (815) (803)
Cash flow from operating activities ......................................................................................
Commodity Mark-to-Market Net Impact (0.2) (19) as “aim,” “anticipate,” “believe,” “drive,” “estimate,” “expect,” Gain on sale of assets (5,490) (41) (766)
Restructuring and Impairment Charges 0.1 (10) “expressed confidence,” “forecast,” “future,” “goal,” “guidance,” Investing activities —
(4 768)
Charges Related to the Transaction with “intend,” “may,” “objective,” “outlook,” “plan,” “position,” “poten- Net capex ............................................................................................................................... (65 166) (4 337) - Venezuela deconsolidation charge — 450 — 2,028
2,174
Acquisition of SABMiller, net of cash acquired .............................................................................
Goodwill and intangible asset impairment charges
Tingyi 0.6 50 tial,” “project,” “seek,” “should,” “strategy,” “target,” “will” or Proceeds from SABMiller transaction-related divestitures .............................................................. 16 342 -
Pension-Related Settlement Charge/ similar statements or variations of such words and other simi- Acquisition and sale of other subsidiaries, net of cash acquired/disposed of .................................... (792) (918) Change in accounts receivable (322) 35 349
(Benefits) 0.3 42 lar expressions. All statements addressing our future operating Proceeds from the sale/(acquisition) of investment in short-term debt securities ............................. (5 583) 169 Change in inventories 71 116 313
146
397
Venezuela Impairment Charges (0.5) (316) performance, and statements addressing events and develop- Net of tax proceeds from the sale of assets held for sale .............................................................. (256) (241) Change in accounts payable, accrued and other liabilities (149) 1,285 928
Other .....................................................................................................................................
Tax Benefits 0.1 49 Cash flow from investing activities ....................................................................................... (60 077) (4 930) Change in other operating assets and liabilities (43) 204 (976)
Core Net ROIC 21.5% 190 bps ments that we expect or anticipate will occur in the future, are Other 162 184 746
forward- looking statements within the meaning of the Reform Act. Financing activities
These forward- looking statements are based on currently avail- Dividends paid ........................................................................................................................ (8 450) (7 966) TOTAL OPERATING ACTIVITIES 12,753 15,435 14,608
Net Cash Provided by Operating Activities Reconciliation able information, operating plans and projections about future Net (payments on)/proceeds from borrowings ............................................................................ 62 675 - 457 5 INVESTING ACTIVITIES
Net proceeds from the issue of share capital ...............................................................................
Year Ended events and trends. They inherently involve risks and uncertainties Share buyback ........................................................................................................................ - (1 000) Capital expenditures (3,384) (3,314) (3,736)
12/31/16 12/26/15 Change that could cause actual results to differ materially from those Other (including net finance (cost)/income other than interest) ..................................................... (3 494) (777) Proceeds from asset sales 571 432 4,498
Net Cash Provided by Operating predicted in any such forward- looking statement. These risks and Cash flow from financing activities ....................................................................................... 50 731 (9 281) Cash related to deconsolidated Venezuela operations — — (908)
Activities $ 10,404 $ 10,580 (2)% uncertainties include, but are not limited to, those described in Net increase/(decrease) in cash and cash equivalents ........................................................ 764 (90) Acquisitions, net of cash acquired (16) (186) (137)
Capital Spending (3,040) (2,758) “Item 1A. Risk Factors” on pages 10–27 of our Annual Report on Purchases of short-term investments (4,843) (2,815) (3,647)
Sales of Property, Plant and Equipment 99 86 Form 10-K and “Item 7. Management’s Discussion and Analysis of Proceeds from sales and maturities of short-term investments 1,488 1,354 1,203
Free Cash Flow 7,463 7,908 Financial Condition and Results of Operations — Our Business — Pre-divestiture addition of restricted cash related to the Beauty Brands divestiture (874) (996) —
Payments Related to Restructuring Cash transferred at closing related to the Beauty Brands divestiture (475) — —
Charges 125 163 Our Business Risks” of our Annual Report on Form 10-K included Release of restricted cash upon closing of the Beauty Brands divestiture 1,870 — —
Discretionary Pension Contributions 459 - herewith. Investors are cautioned not to place undue reliance on Cash transferred in Batteries divestiture — (143) —
Pension-Related Settlements - 88 any such forward- looking statements, which speak only as of the
Net Cash Received Related to Interest date they are made. We undertake no obligation to update any Change in other investments (26) 93 (163)
Rate Swaps (5) - forward- looking statement, whether as a result of new informa- TOTAL INVESTING ACTIVITIES (5,689) (5,575) (2,890)
Net Cash Tax Benefit Related to tion, future events or otherwise. FINANCING ACTIVITIES
Discretionary Pension Contributions (151) - Dividends to shareholders (7,236) (7,436) (7,287)
Net Cash Tax Benefit Related to Change in short-term debt 2,727 (418) (2,580)
Restructuring Charges (22) - Additions to long-term debt 3,603 3,916 2,138
Net Cash Tax Benefit Related to Debt Reductions of long-term debt (4,931) (1) (2,213) (3,512)
Redemption Charge (83) -
Net Cash Tax Benefit Related to Pension- Treasury stock purchases (5,204) (4,004) (4,604)
Related Settlements - (31) Treasury stock from cash infused in Batteries divestiture — (1,730) —
Free Cash Flow Excluding Above Items $ 7,786 $ 8,128 (4)% Impact of stock options and other 2,473 2,672 2,826
TOTAL FINANCING ACTIVITIES (8,568) (9,213) (13,019)
Total Operating Profit Reconciliation EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH (29) (381) (411)
EQUIVALENTS
Year Ended CHANGE IN CASH AND CASH EQUIVALENTS (1,533) 266 (1,712)
12/31/16 12/26/15 Growth CASH AND CASH EQUIVALENTS, END OF YEAR $ 5,569 $ 7,102 $ 6,836
Reported Operating Profit $ 9,785 $ 8,353 17% SUPPLEMENTAL DISCLOSURE
Commodity Mark-to-Market Net Impact (167) (11) Cash payments for interest $ 518 $ 569 $ 678
Restructuring and Impairment Charges 160 230 3,714
Charges Related to the Transaction with Cash payment for income taxes — 3,730 4,558 —
4,213
Divestiture of Batteries business in exchange for shares of P&G stock (2)
Tingyi 373 73
Pension-Related Settlement Charge/ Divestiture of Beauty business in exchange for shares of P&G stock and assumption of debt 11,360 — —
(Benefits) 242 (67) Assets acquired through non-cash capital leases are immaterial for all periods.
Venezuela Impairment Charges - 1,359 (1) Includes $543 of costs related to early extinguishment of debt.
Core Operating Profit $ 10,393 $ 9,937 5% (2) Includes $1,730 from cash infused into the Batteries business pursuant to the divestiture agreement (see Note 13).
Note — Certain amounts above may not sum due to rounding.
See accompanying Notes to Consolidated Financial Statements.
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