PepsiCo to repatriate up to $7.5 billion

by Staff
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PURCAHSE, N.Y. — PepsiCo Inc. on Friday said it plans to repatriate up to $7.5 billion in international earnings, which will cost about $475 million in third-quarter taxes.

The American Jobs Creation Act passed by Congress this past year allows companies to repatriate retained earnings from their overseas operations at a greatly reduced tax rate.

Including the repatriation charge, the food and beverage company said it expects full-year earnings to range from $2.32 to $2.35 per share. Excluding the repatriation expense, the company backed its forecast for income between $2.56 and $2.59 per share.

Analysts polled by Thomson Financial are looking for higher 2005 earnings, excluding certain charges, of $2.60 per share on sales of $31.41 billion.

PepsiCo also said it plans to contribute up to $800 million to an employee pension plan in the fourth quarter, above a previous estimate. The company attributed the increase to an expected reduction in the discount rate used to calculate pension plan obligations.

The company said it still intends to repurchase $2.5 billion to $3 billion of its common stock in 2005.

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