X
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
PepsiCo, Inc.
|
|
|
|
North Carolina
|
|
13-1584302
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
700 Anderson Hill Road, Purchase, New York
|
|
10577
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
914-253-2000
|
||||
(Registrant’s Telephone Number, Including Area Code)
|
N/A
|
Large accelerated filer
x
|
|
Accelerated filer
¨
|
||
Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
¨
|
||
|
Emerging growth company
¨
|
|
|
Page No.
|
Part I Financial Information
|
|
|
Item 1.
|
Condensed Consolidated Financial Statements
|
|
|
|
|
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Report of Independent Registered Public Accounting Firm
|
||
Item 3.
|
||
Item 4.
|
||
Part II Other Information
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
6/16/2018
|
|
|
6/17/2017
|
|
|
6/16/2018
|
|
|
6/17/2017
|
|
||||
Net Revenue
|
$
|
16,090
|
|
|
$
|
15,710
|
|
|
$
|
28,652
|
|
|
$
|
27,759
|
|
Cost of sales
|
7,263
|
|
|
7,059
|
|
|
12,918
|
|
|
12,349
|
|
||||
Gross profit
|
8,827
|
|
|
8,651
|
|
|
15,734
|
|
|
15,410
|
|
||||
Selling, general and administrative expenses
|
5,799
|
|
|
5,732
|
|
|
10,899
|
|
|
10,628
|
|
||||
Operating Profit
|
3,028
|
|
|
2,919
|
|
|
4,835
|
|
|
4,782
|
|
||||
Other pension and retiree medical benefits income
|
82
|
|
|
71
|
|
|
157
|
|
|
141
|
|
||||
Interest expense
|
(308
|
)
|
|
(265
|
)
|
|
(602
|
)
|
|
(517
|
)
|
||||
Interest income and other
|
98
|
|
|
49
|
|
|
167
|
|
|
89
|
|
||||
Income before income taxes
|
2,900
|
|
|
2,774
|
|
|
4,557
|
|
|
4,495
|
|
||||
Provision for income taxes (See Note 5)
|
1,070
|
|
|
656
|
|
|
1,374
|
|
|
1,048
|
|
||||
Net income
|
1,830
|
|
|
2,118
|
|
|
3,183
|
|
|
3,447
|
|
||||
Less: Net income attributable to noncontrolling interests
|
10
|
|
|
13
|
|
|
20
|
|
|
24
|
|
||||
Net Income Attributable to PepsiCo
|
$
|
1,820
|
|
|
$
|
2,105
|
|
|
$
|
3,163
|
|
|
$
|
3,423
|
|
Net Income Attributable to PepsiCo per Common Share
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.28
|
|
|
$
|
1.47
|
|
|
$
|
2.23
|
|
|
$
|
2.40
|
|
Diluted
|
$
|
1.28
|
|
|
$
|
1.46
|
|
|
$
|
2.21
|
|
|
$
|
2.38
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
||||||||
Basic
|
1,417
|
|
|
1,428
|
|
|
1,418
|
|
|
1,428
|
|
||||
Diluted
|
1,426
|
|
|
1,441
|
|
|
1,428
|
|
|
1,441
|
|
||||
Cash dividends declared per common share
|
$
|
0.9275
|
|
|
$
|
0.805
|
|
|
$
|
1.7325
|
|
|
$
|
1.5575
|
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
6/16/2018
|
|
|
6/17/2017
|
|
|
6/16/2018
|
|
|
6/17/2017
|
|
||||
Net income
|
$
|
1,830
|
|
|
$
|
2,118
|
|
|
$
|
3,183
|
|
|
$
|
3,447
|
|
Other comprehensive (loss)/income, net of taxes:
|
|
|
|
|
|
|
|
||||||||
Net currency translation adjustment
|
(971
|
)
|
|
320
|
|
|
(681
|
)
|
|
836
|
|
||||
Net change on cash flow hedges
|
48
|
|
|
(24
|
)
|
|
76
|
|
|
(51
|
)
|
||||
Net pension and retiree medical adjustments
|
56
|
|
|
2
|
|
|
80
|
|
|
11
|
|
||||
Net change on available-for-sale securities
|
4
|
|
|
(70
|
)
|
|
2
|
|
|
(66
|
)
|
||||
Other
|
—
|
|
|
16
|
|
|
—
|
|
|
16
|
|
||||
|
(863
|
)
|
|
244
|
|
|
(523
|
)
|
|
746
|
|
||||
Comprehensive income
|
967
|
|
|
2,362
|
|
|
2,660
|
|
|
4,193
|
|
||||
Comprehensive income attributable to
noncontrolling interests |
(10
|
)
|
|
(15
|
)
|
|
(20
|
)
|
|
(25
|
)
|
||||
Comprehensive Income Attributable to PepsiCo
|
$
|
957
|
|
|
$
|
2,347
|
|
|
$
|
2,640
|
|
|
$
|
4,168
|
|
|
24 Weeks Ended
|
||||||
|
6/16/2018
|
|
|
6/17/2017
|
|
||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
3,183
|
|
|
$
|
3,447
|
|
Depreciation and amortization
|
1,070
|
|
|
1,031
|
|
||
Share-based compensation expense
|
146
|
|
|
143
|
|
||
Restructuring and impairment charges
|
44
|
|
|
61
|
|
||
Cash payments for restructuring charges
|
(126
|
)
|
|
(25
|
)
|
||
Pension and retiree medical plan expenses
|
93
|
|
|
92
|
|
||
Pension and retiree medical plan contributions
|
(1,573
|
)
|
|
(131
|
)
|
||
Deferred income taxes and other tax charges and credits
|
(167
|
)
|
|
130
|
|
||
Provisional net tax expense related to the Tax Cuts and Jobs Act (TCJ Act)
|
778
|
|
|
—
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Accounts and notes receivable
|
(1,019
|
)
|
|
(733
|
)
|
||
Inventories
|
(637
|
)
|
|
(826
|
)
|
||
Prepaid expenses and other current assets
|
(224
|
)
|
|
(250
|
)
|
||
Accounts payable and other current liabilities
|
(560
|
)
|
|
(838
|
)
|
||
Income taxes payable
|
372
|
|
|
310
|
|
||
Other, net
|
(293
|
)
|
|
(160
|
)
|
||
Net Cash Provided by Operating Activities
|
1,087
|
|
|
2,251
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
||||
Capital spending
|
(945
|
)
|
|
(878
|
)
|
||
Sales of property, plant and equipment
|
43
|
|
|
30
|
|
||
Acquisitions and investments in noncontrolled affiliates
|
(188
|
)
|
|
(40
|
)
|
||
Divestitures
|
280
|
|
|
143
|
|
||
Short-term investments, by original maturity:
|
|
|
|
||||
More than three months - purchases
|
(5,544
|
)
|
|
(6,785
|
)
|
||
More than three months - maturities
|
9,416
|
|
|
6,709
|
|
||
More than three months - sales
|
760
|
|
|
242
|
|
||
Three months or less, net
|
5
|
|
|
—
|
|
||
Other investing, net
|
—
|
|
|
8
|
|
||
Net Cash Provided by/(Used for) Investing Activities
|
3,827
|
|
|
(571
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
||||
Proceeds from issuances of long-term debt
|
—
|
|
|
3,525
|
|
||
Payments of long-term debt
|
(2,502
|
)
|
|
(1,003
|
)
|
||
Short-term borrowings, by original maturity:
|
|
|
|
||||
More than three months - proceeds
|
—
|
|
|
51
|
|
||
More than three months - payments
|
(17
|
)
|
|
(57
|
)
|
||
Three months or less, net
|
4,091
|
|
|
(172
|
)
|
||
Cash dividends paid
|
(2,305
|
)
|
|
(2,175
|
)
|
||
Share repurchases - common
|
(984
|
)
|
|
(942
|
)
|
||
Share repurchases - preferred
|
(2
|
)
|
|
(2
|
)
|
||
Proceeds from exercises of stock options
|
145
|
|
|
316
|
|
||
Withholding tax payments on restricted stock units (RSUs), performance stock units (PSUs) and PepsiCo
equity performance units (PEPunits) converted |
(82
|
)
|
|
(122
|
)
|
||
Other financing
|
(2
|
)
|
|
(1
|
)
|
||
Net Cash Used for Financing Activities
|
(1,658
|
)
|
|
(582
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
(19
|
)
|
|
36
|
|
||
Net Increase in Cash and Cash Equivalents and Restricted Cash
|
3,237
|
|
|
1,134
|
|
||
Cash and Cash Equivalents and Restricted Cash, Beginning of Year
|
10,657
|
|
|
9,169
|
|
||
Cash and Cash Equivalents and Restricted Cash, End of Period
|
$
|
13,894
|
|
|
$
|
10,303
|
|
|
(Unaudited)
|
|
|
|
|||
|
6/16/2018
|
|
|
12/30/2017
|
|
||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
13,858
|
|
|
$
|
10,610
|
|
Short-term investments
|
4,271
|
|
|
8,900
|
|
||
Accounts and notes receivable, less allowance: 6/18 - $124 and 12/17 - $129
|
7,841
|
|
|
7,024
|
|
||
Inventories:
|
|
|
|
||||
Raw materials and packaging
|
1,520
|
|
|
1,344
|
|
||
Work-in-process
|
231
|
|
|
167
|
|
||
Finished goods
|
1,740
|
|
|
1,436
|
|
||
|
3,491
|
|
|
2,947
|
|
||
Prepaid expenses and other current assets
|
909
|
|
|
1,546
|
|
||
Total Current Assets
|
30,370
|
|
|
31,027
|
|
||
Property, plant and equipment
|
38,974
|
|
|
39,106
|
|
||
Accumulated depreciation
|
(22,212
|
)
|
|
(21,866
|
)
|
||
|
16,762
|
|
|
17,240
|
|
||
Amortizable Intangible Assets, net
|
1,222
|
|
|
1,268
|
|
||
Goodwill
|
14,540
|
|
|
14,744
|
|
||
Other nonamortizable intangible assets
|
12,459
|
|
|
12,570
|
|
||
Nonamortizable Intangible Assets
|
26,999
|
|
|
27,314
|
|
||
Investments in Noncontrolled Affiliates
|
2,401
|
|
|
2,042
|
|
||
Other Assets
|
977
|
|
|
913
|
|
||
Total Assets
|
$
|
78,731
|
|
|
$
|
79,804
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Short-term debt obligations
|
$
|
9,955
|
|
|
$
|
5,485
|
|
Accounts payable and other current liabilities
|
14,603
|
|
|
15,017
|
|
||
Total Current Liabilities
|
24,558
|
|
|
20,502
|
|
||
Long-Term Debt Obligations
|
30,638
|
|
|
33,796
|
|
||
Other Liabilities
|
9,968
|
|
|
11,283
|
|
||
Deferred Income Taxes
|
3,346
|
|
|
3,242
|
|
||
Total Liabilities
|
68,510
|
|
|
68,823
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
Preferred Stock, no par value
|
—
|
|
|
41
|
|
||
Repurchased Preferred Stock
|
—
|
|
|
(197
|
)
|
||
PepsiCo Common Shareholders’ Equity
|
|
|
|
||||
Common stock, par value 1
2
/
3
¢ per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1,415 and 1,420 shares, respectively)
|
24
|
|
|
24
|
|
||
Capital in excess of par value
|
3,915
|
|
|
3,996
|
|
||
Retained earnings
|
53,223
|
|
|
52,839
|
|
||
Accumulated other comprehensive loss
|
(13,580
|
)
|
|
(13,057
|
)
|
||
Repurchased common stock, in excess of par value (452 and 446 shares, respectively)
|
(33,471
|
)
|
|
(32,757
|
)
|
||
Total PepsiCo Common Shareholders’ Equity
|
10,111
|
|
|
11,045
|
|
||
Noncontrolling interests
|
110
|
|
|
92
|
|
||
Total Equity
|
10,221
|
|
|
10,981
|
|
||
Total Liabilities and Equity
|
$
|
78,731
|
|
|
$
|
79,804
|
|
|
24 Weeks Ended
|
||||||||||||
|
6/16/2018
|
|
6/17/2017
|
||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
||||||
Preferred Stock
|
|
|
|
|
|
|
|
||||||
Balance, beginning of year
|
0.8
|
|
|
$
|
41
|
|
|
0.8
|
|
|
$
|
41
|
|
Conversion to common stock
|
(0.1
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
||
Retirement of preferred stock
|
(0.7
|
)
|
|
(35
|
)
|
|
—
|
|
|
—
|
|
||
Balance, end of period
|
—
|
|
|
—
|
|
|
0.8
|
|
|
41
|
|
||
Repurchased Preferred Stock
|
|
|
|
|
|
|
|
||||||
Balance, beginning of year
|
(0.7
|
)
|
|
(197
|
)
|
|
(0.7
|
)
|
|
(192
|
)
|
||
Redemptions
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||
Retirement of preferred stock
|
0.7
|
|
|
199
|
|
|
—
|
|
|
—
|
|
||
Balance, end of period
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
(194
|
)
|
||
Common Stock
|
|
|
|
|
|
|
|
||||||
Balance, beginning of year
|
1,420
|
|
|
24
|
|
|
1,428
|
|
|
24
|
|
||
Shares issued in connection with preferred stock conversion to common stock
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Change in repurchased common stock
|
(6
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||
Balance, end of period
|
1,415
|
|
|
24
|
|
|
1,426
|
|
|
24
|
|
||
Capital in Excess of Par Value
|
|
|
|
|
|
|
|
||||||
Balance, beginning of year
|
|
|
3,996
|
|
|
|
|
4,091
|
|
||||
Share-based compensation expense
|
|
|
148
|
|
|
|
|
145
|
|
||||
Equity issued in connection with preferred stock conversion to common stock
|
|
|
6
|
|
|
|
|
—
|
|
||||
Stock option exercises, RSUs, PSUs and PEPunits converted
|
|
|
(150
|
)
|
|
|
|
(201
|
)
|
||||
Withholding tax on RSUs, PSUs and PEPunits converted
|
|
|
(82
|
)
|
|
|
|
(122
|
)
|
||||
Other
|
|
|
(3
|
)
|
|
|
|
—
|
|
||||
Balance, end of period
|
|
|
3,915
|
|
|
|
|
3,913
|
|
||||
Retained Earnings
|
|
|
|
|
|
|
|
||||||
Balance, beginning of year
|
|
|
52,839
|
|
|
|
|
52,518
|
|
||||
Cumulative effect of accounting change
|
|
|
(145
|
)
|
|
|
|
—
|
|
||||
Net income attributable to PepsiCo
|
|
|
3,163
|
|
|
|
|
3,423
|
|
||||
Cash dividends declared – common
|
|
|
(2,470
|
)
|
|
|
|
(2,235
|
)
|
||||
Retirement of preferred stock
|
|
|
(164
|
)
|
|
|
|
—
|
|
||||
Balance, end of period
|
|
|
53,223
|
|
|
|
|
53,706
|
|
||||
Accumulated Other Comprehensive Loss
|
|
|
|
|
|
|
|
||||||
Balance, beginning of year
|
|
|
(13,057
|
)
|
|
|
|
(13,919
|
)
|
||||
Other comprehensive (loss)/income attributable to PepsiCo
|
|
|
(523
|
)
|
|
|
|
745
|
|
||||
Balance, end of period
|
|
|
(13,580
|
)
|
|
|
|
(13,174
|
)
|
||||
Repurchased Common Stock
|
|
|
|
|
|
|
|
||||||
Balance, beginning of year
|
(446
|
)
|
|
(32,757
|
)
|
|
(438
|
)
|
|
(31,468
|
)
|
||
Share repurchases
|
(10
|
)
|
|
(1,004
|
)
|
|
(8
|
)
|
|
(967
|
)
|
||
Stock option exercises, RSUs, PSUs and PEPunits converted
|
4
|
|
|
289
|
|
|
6
|
|
|
523
|
|
||
Other
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||
Balance, end of period
|
(452
|
)
|
|
(33,471
|
)
|
|
(440
|
)
|
|
(31,912
|
)
|
||
Total PepsiCo Common Shareholders’ Equity
|
|
|
10,111
|
|
|
|
|
12,557
|
|
||||
Noncontrolling Interests
|
|
|
|
|
|
|
|
||||||
Balance, beginning of year
|
|
|
92
|
|
|
|
|
104
|
|
||||
Net income attributable to noncontrolling interests
|
|
|
20
|
|
|
|
|
24
|
|
||||
Currency translation adjustment
|
|
|
—
|
|
|
|
|
1
|
|
||||
Other, net
|
|
|
(2
|
)
|
|
|
|
(3
|
)
|
||||
Balance, end of period
|
|
|
110
|
|
|
|
|
126
|
|
||||
Total Equity
|
|
|
$
|
10,221
|
|
|
|
|
$
|
12,530
|
|
1)
|
Frito-Lay North America (FLNA), which includes our branded food and snack businesses in the United States and Canada;
|
2)
|
Quaker Foods North America (QFNA), which includes our cereal, rice, pasta and other branded food businesses in the United States and Canada;
|
3)
|
North America Beverages (NAB), which includes our beverage businesses in the United States and Canada;
|
4)
|
Latin America, which includes all of our beverage, food and snack businesses in Latin America;
|
5)
|
Europe Sub-Saharan Africa (ESSA), which includes all of our beverage, food and snack businesses in Europe and Sub-Saharan Africa; and
|
6)
|
Asia, Middle East and North Africa (AMENA), which includes all of our beverage, food and snack businesses in Asia, Middle East and North Africa.
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
Net Revenue
|
6/16/2018
(a)
|
|
|
6/17/2017
|
|
|
6/16/2018
(a)
|
|
|
6/17/2017
|
|
||||
FLNA
|
$
|
3,837
|
|
|
$
|
3,678
|
|
|
$
|
7,454
|
|
|
$
|
7,177
|
|
QFNA
|
527
|
|
|
553
|
|
|
1,128
|
|
|
1,151
|
|
||||
NAB
|
5,193
|
|
|
5,242
|
|
|
9,608
|
|
|
9,702
|
|
||||
Latin America
|
1,843
|
|
|
1,823
|
|
|
3,067
|
|
|
2,900
|
|
||||
ESSA
|
3,116
|
|
|
2,812
|
|
|
4,784
|
|
|
4,257
|
|
||||
AMENA
|
1,574
|
|
|
1,602
|
|
|
2,611
|
|
|
2,572
|
|
||||
Total division
|
$
|
16,090
|
|
|
$
|
15,710
|
|
|
$
|
28,652
|
|
|
$
|
27,759
|
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
Operating Profit
|
6/16/2018
|
|
|
6/17/2017
(b)
|
|
|
6/16/2018
|
|
|
6/17/2017
(b)
|
|
||||
FLNA
|
$
|
1,200
|
|
|
$
|
1,143
|
|
|
$
|
2,250
|
|
|
$
|
2,193
|
|
QFNA
|
145
|
|
|
145
|
|
|
300
|
|
|
308
|
|
||||
NAB
|
747
|
|
|
890
|
|
|
1,135
|
|
|
1,391
|
|
||||
Latin America
|
269
|
|
|
228
|
|
|
458
|
|
|
361
|
|
||||
ESSA
(c)
|
438
|
|
|
492
|
|
|
556
|
|
|
588
|
|
||||
AMENA
(d)
|
496
|
|
|
307
|
|
|
683
|
|
|
478
|
|
||||
Total division
|
$
|
3,295
|
|
|
$
|
3,205
|
|
|
$
|
5,382
|
|
|
$
|
5,319
|
|
Corporate unallocated
|
(267
|
)
|
|
(286
|
)
|
|
(547
|
)
|
|
(537
|
)
|
||||
|
$
|
3,028
|
|
|
$
|
2,919
|
|
|
$
|
4,835
|
|
|
$
|
4,782
|
|
(a)
|
Our primary performance obligation is the distribution and sales of beverage products and food and snack products to our customers, each comprising approximately
50%
of our consolidated net revenue. Internationally, our Latin America segment is predominantly a food and snack business, ESSA’s beverage business and food and snack business are each approximately
50%
of the segment’s net revenue and AMENA’s beverage business and food and snack business are approximately
35%
and
65%
, respectively, of the segment’s net revenue. Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our NAB and ESSA segments, is approximately
40%
of our consolidated net revenue. Generally, our finished goods beverage operations produce higher net revenue, but lower operating margins as compared to concentrate sold to authorized bottling partners for the manufacture of finished goods beverages.
|
(b)
|
Reflects the retrospective adoption of guidance requiring the presentation of non-service cost components of net periodic benefit cost below operating profit.
See Note 2 for additional information.
|
(c)
|
Operating profit for ESSA for the 12 and 24 weeks ended June 17, 2017 includes a gain of
$95 million
associated with the sale of our minority stake in Britvic plc (Britvic).
|
(d)
|
Operating profit for AMENA for the 12 and 24 weeks ended June 16, 2018 includes a gain of
$144 million
associated with refranchising a portion of our beverage business in Thailand.
|
|
6/17/2017
|
||||||
|
12 Weeks Ended
|
|
|
24 Weeks Ended
|
|
||
FLNA
|
$
|
(10
|
)
|
|
$
|
(20
|
)
|
QFNA
|
(1
|
)
|
|
(2
|
)
|
||
NAB
(a)
|
(4
|
)
|
|
(8
|
)
|
||
Latin America
|
—
|
|
|
1
|
|
||
ESSA
|
(9
|
)
|
|
(15
|
)
|
||
AMENA
|
—
|
|
|
—
|
|
||
Corporate unallocated
(b)
|
(47
|
)
|
|
(97
|
)
|
||
Total
|
$
|
(71
|
)
|
|
$
|
(141
|
)
|
(a)
|
Includes restructuring charges of
$1 million
for the 12 and 24 weeks ended
June 17, 2017
.
|
(b)
|
Includes restructuring charges of
$1 million
for the 24 weeks ended June 17, 2017.
|
|
12 Weeks Ended
|
||||||||||||||||||||||||||||||
|
6/16/2018
|
|
6/17/2017
|
||||||||||||||||||||||||||||
|
Severance and Other Employee Costs
(a)
|
|
Asset
Impairments |
|
Other
Costs |
|
Total
|
|
Severance and Other
Employee Costs (a) |
|
Asset Impairments
|
|
Other
Costs
|
|
Total
|
||||||||||||||||
FLNA
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
QFNA
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
NAB
|
3
|
|
|
3
|
|
|
3
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Latin America
|
1
|
|
|
—
|
|
|
2
|
|
|
3
|
|
|
21
|
|
|
2
|
|
|
2
|
|
|
25
|
|
||||||||
ESSA
(b)
|
3
|
|
|
1
|
|
|
—
|
|
|
4
|
|
|
6
|
|
|
—
|
|
|
(3
|
)
|
|
3
|
|
||||||||
AMENA
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||||
Corporate
|
8
|
|
|
—
|
|
|
2
|
|
|
10
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||||
|
$
|
21
|
|
|
$
|
4
|
|
|
$
|
7
|
|
|
$
|
32
|
|
|
$
|
31
|
|
|
$
|
2
|
|
|
$
|
1
|
|
|
$
|
34
|
|
(a)
|
There were no charges related to other pension and retiree medical benefits for the 12 weeks ended June 16, 2018. The
12
weeks ended
June 17, 2017
includes charges related to other pension and retiree medical benefits of
$1 million
.
|
(b)
|
Income amount primarily reflects a gain on the sale of property, plant and equipment.
|
(a)
|
Includes charges related to other pension and retiree medical benefits of
$4 million
and
$2 million
for the
24
weeks ended
June 16, 2018
and
June 17, 2017
, respectively.
|
(b)
|
Income amounts primarily reflect gains on the sales of property, plant and equipment.
|
(c)
|
Income amount represents adjustments for changes in estimates of previously recorded amounts.
|
|
2014 Productivity Plan Costs to Date
|
||||||||||||||
|
Severance and Other Employee Costs
|
|
Asset
Impairments
|
|
Other Costs
|
|
Total
|
||||||||
FLNA
|
$
|
136
|
|
|
$
|
12
|
|
|
$
|
24
|
|
|
$
|
172
|
|
QFNA
|
27
|
|
|
—
|
|
|
6
|
|
|
33
|
|
||||
NAB
|
153
|
|
|
73
|
|
|
87
|
|
|
313
|
|
||||
Latin America
|
117
|
|
|
29
|
|
|
18
|
|
|
164
|
|
||||
ESSA
|
134
|
|
|
42
|
|
|
59
|
|
|
235
|
|
||||
AMENA
|
27
|
|
|
6
|
|
|
15
|
|
|
48
|
|
||||
Corporate
|
57
|
|
|
—
|
|
|
56
|
|
|
113
|
|
||||
|
$
|
651
|
|
|
$
|
162
|
|
|
$
|
265
|
|
|
$
|
1,078
|
|
|
Severance and
Other Employee Costs
|
|
Asset Impairments
|
|
Other Costs
|
|
Total
|
||||||||
Liability as of December 30, 2017
|
$
|
212
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
226
|
|
2018 restructuring charges
|
24
|
|
|
8
|
|
|
12
|
|
|
44
|
|
||||
Cash payments
|
(106
|
)
|
|
—
|
|
|
(20
|
)
|
|
(126
|
)
|
||||
Non-cash charges and translation
|
(12
|
)
|
|
(8
|
)
|
|
1
|
|
|
(19
|
)
|
||||
Liability as of June 16, 2018
|
$
|
118
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
125
|
|
|
|
6/16/2018
|
|
12/30/2017
|
||||||||||||||||||||
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Acquired franchise rights
|
|
$
|
847
|
|
|
$
|
(133
|
)
|
|
$
|
714
|
|
|
$
|
858
|
|
|
$
|
(128
|
)
|
|
$
|
730
|
|
Reacquired franchise rights
|
|
106
|
|
|
(104
|
)
|
|
2
|
|
|
106
|
|
|
(104
|
)
|
|
2
|
|
||||||
Brands
|
|
1,311
|
|
|
(1,031
|
)
|
|
280
|
|
|
1,322
|
|
|
(1,026
|
)
|
|
296
|
|
||||||
Other identifiable intangibles
|
|
509
|
|
|
(283
|
)
|
|
226
|
|
|
521
|
|
|
(281
|
)
|
|
240
|
|
||||||
|
|
$
|
2,773
|
|
|
$
|
(1,551
|
)
|
|
$
|
1,222
|
|
|
$
|
2,807
|
|
|
$
|
(1,539
|
)
|
|
$
|
1,268
|
|
|
Balance
12/30/2017
|
|
Translation
and Other |
|
Balance
6/16/2018
|
||||||
|
|
|
|||||||||
FLNA
(a)
|
|
|
|
|
|
||||||
Goodwill
|
$
|
280
|
|
|
$
|
23
|
|
|
$
|
303
|
|
Brands
|
25
|
|
|
140
|
|
|
165
|
|
|||
|
305
|
|
|
163
|
|
|
468
|
|
|||
QFNA
|
|
|
|
|
|
||||||
Goodwill
|
175
|
|
|
—
|
|
|
175
|
|
|||
|
|
|
|
|
|
||||||
NAB
|
|
|
|
|
|
||||||
Goodwill
|
9,854
|
|
|
(24
|
)
|
|
9,830
|
|
|||
Reacquired franchise rights
|
7,126
|
|
|
(39
|
)
|
|
7,087
|
|
|||
Acquired franchise rights
|
1,525
|
|
|
(9
|
)
|
|
1,516
|
|
|||
Brands
|
353
|
|
|
—
|
|
|
353
|
|
|||
|
18,858
|
|
|
(72
|
)
|
|
18,786
|
|
|||
Latin America
|
|
|
|
|
|
||||||
Goodwill
|
555
|
|
|
(26
|
)
|
|
529
|
|
|||
Brands
|
141
|
|
|
(9
|
)
|
|
132
|
|
|||
|
696
|
|
|
(35
|
)
|
|
661
|
|
|||
ESSA
|
|
|
|
|
|
||||||
Goodwill
|
3,452
|
|
|
(167
|
)
|
|
3,285
|
|
|||
Reacquired franchise rights
|
549
|
|
|
(27
|
)
|
|
522
|
|
|||
Acquired franchise rights
|
195
|
|
|
(30
|
)
|
|
165
|
|
|||
Brands
|
2,545
|
|
|
(134
|
)
|
|
2,411
|
|
|||
|
6,741
|
|
|
(358
|
)
|
|
6,383
|
|
|||
AMENA
|
|
|
|
|
|
||||||
Goodwill
|
428
|
|
|
(10
|
)
|
|
418
|
|
|||
Brands
|
111
|
|
|
(3
|
)
|
|
108
|
|
|||
|
539
|
|
|
(13
|
)
|
|
526
|
|
|||
|
|
|
|
|
|
||||||
Total goodwill
|
14,744
|
|
|
(204
|
)
|
|
14,540
|
|
|||
Total reacquired franchise rights
|
7,675
|
|
|
(66
|
)
|
|
7,609
|
|
|||
Total acquired franchise rights
|
1,720
|
|
|
(39
|
)
|
|
1,681
|
|
|||
Total brands
|
3,175
|
|
|
(6
|
)
|
|
3,169
|
|
|||
|
$
|
27,314
|
|
|
$
|
(315
|
)
|
|
$
|
26,999
|
|
(a)
|
The change in 2018 is primarily related to our acquisition of Bare Foods Co.
|
|
6/16/2018
|
|
|
12/30/2017
|
|
||
Balance, beginning of year
|
$
|
2,212
|
|
|
$
|
1,885
|
|
Additions for tax positions related to the current year
|
134
|
|
|
309
|
|
||
Additions for tax positions from prior years
|
120
|
|
|
86
|
|
||
Reductions for tax positions from prior years
|
(399
|
)
|
|
(51
|
)
|
||
Settlement payments
|
(173
|
)
|
|
(4
|
)
|
||
Statutes of limitations expiration
|
(19
|
)
|
|
(33
|
)
|
||
Translation and other
|
(10
|
)
|
|
20
|
|
||
Balance, end of period
|
$
|
1,865
|
|
|
$
|
2,212
|
|
|
|
12 Weeks Ended
|
|
24 Weeks Ended
|
||||||||||||
|
|
6/16/2018
|
|
|
6/17/2017
|
|
|
6/16/2018
|
|
|
6/17/2017
|
|
||||
Share-based compensation expense - equity awards
|
|
$
|
66
|
|
|
$
|
71
|
|
|
$
|
146
|
|
|
$
|
143
|
|
Share-based compensation expense - liability awards
|
|
(4
|
)
|
|
3
|
|
|
2
|
|
|
7
|
|
||||
Restructuring and impairment charges
|
|
(1
|
)
|
|
1
|
|
|
2
|
|
|
2
|
|
||||
Total
|
|
$
|
61
|
|
|
$
|
75
|
|
|
$
|
150
|
|
|
$
|
152
|
|
|
24 Weeks Ended
|
||||||||||||
|
6/16/2018
|
|
6/17/2017
|
||||||||||
|
Granted
(a)
|
|
Weighted-Average Grant Price
|
|
Granted
(a)
|
|
Weighted-Average Grant Price
|
||||||
Stock options
|
1.2
|
|
|
$
|
108.75
|
|
|
1.3
|
|
|
$
|
109.75
|
|
RSUs and PSUs
|
2.6
|
|
|
$
|
108.70
|
|
|
2.8
|
|
|
$
|
109.76
|
|
(a)
|
In millions. All grant activity is disclosed at target.
|
|
24 Weeks Ended
|
||||
|
6/16/2018
|
|
|
6/17/2017
|
|
Expected life
|
5 years
|
|
|
5 years
|
|
Risk-free interest rate
|
2.6
|
%
|
|
2.0
|
%
|
Expected volatility
|
12
|
%
|
|
11
|
%
|
Expected dividend yield
|
2.7
|
%
|
|
2.7
|
%
|
|
12 Weeks Ended
|
||||||||||||||||||||||
|
Pension
|
|
Retiree Medical
|
||||||||||||||||||||
|
6/16/2018
|
|
|
6/17/2017
|
|
|
6/16/2018
|
|
|
6/17/2017
|
|
|
6/16/2018
|
|
|
6/17/2017
|
|
||||||
|
U.S.
|
|
International
|
|
|
||||||||||||||||||
Service cost
|
$
|
99
|
|
|
$
|
92
|
|
|
$
|
22
|
|
|
$
|
21
|
|
|
$
|
8
|
|
|
$
|
7
|
|
Interest cost
|
111
|
|
|
108
|
|
|
23
|
|
|
21
|
|
|
8
|
|
|
8
|
|
||||||
Expected return on plan assets
|
(217
|
)
|
|
(196
|
)
|
|
(48
|
)
|
|
(40
|
)
|
|
(5
|
)
|
|
(5
|
)
|
||||||
Amortization of prior service cost/(credits)
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(6
|
)
|
||||||
Amortization of net losses/(gains)
|
42
|
|
|
28
|
|
|
11
|
|
|
12
|
|
|
(3
|
)
|
|
(3
|
)
|
||||||
|
35
|
|
|
33
|
|
|
8
|
|
|
14
|
|
|
4
|
|
|
1
|
|
||||||
Special termination benefits
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
35
|
|
|
$
|
34
|
|
|
$
|
8
|
|
|
$
|
14
|
|
|
$
|
4
|
|
|
$
|
1
|
|
|
24 Weeks Ended
|
||||||||||||||||||||||
|
Pension
|
|
Retiree Medical
|
||||||||||||||||||||
|
6/16/2018
|
|
|
6/17/2017
|
|
|
6/16/2018
|
|
|
6/17/2017
|
|
|
6/16/2018
|
|
|
6/17/2017
|
|
||||||
|
U.S.
|
|
International
|
|
|
||||||||||||||||||
Service cost
|
$
|
199
|
|
|
$
|
185
|
|
|
$
|
40
|
|
|
$
|
37
|
|
|
$
|
15
|
|
|
$
|
13
|
|
Interest cost
|
222
|
|
|
216
|
|
|
40
|
|
|
36
|
|
|
16
|
|
|
17
|
|
||||||
Expected return on plan assets
|
(435
|
)
|
|
(392
|
)
|
|
(84
|
)
|
|
(70
|
)
|
|
(9
|
)
|
|
(10
|
)
|
||||||
Amortization of prior service cost/(credits)
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
(12
|
)
|
||||||
Amortization of net losses/(gains)
|
83
|
|
|
56
|
|
|
19
|
|
|
21
|
|
|
(5
|
)
|
|
(6
|
)
|
||||||
|
70
|
|
|
66
|
|
|
15
|
|
|
24
|
|
|
8
|
|
|
2
|
|
||||||
Special termination benefits
|
3
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
73
|
|
|
$
|
68
|
|
|
$
|
16
|
|
|
$
|
24
|
|
|
$
|
8
|
|
|
$
|
2
|
|
•
|
commodity prices, affecting the cost of our raw materials and energy;
|
•
|
foreign exchange rates and currency restrictions; and
|
•
|
interest rates.
|
(a)
|
In billions.
|
|
|
|
6/16/2018
|
|
12/30/2017
|
||||||||||||
|
Fair Value Hierarchy Levels
|
|
Assets
(a)
|
|
Liabilities
(a)
|
|
Assets
(a)
|
|
Liabilities
(a)
|
||||||||
Available-for-sale debt securities
(b)
|
2
|
|
$
|
13,043
|
|
|
$
|
—
|
|
|
$
|
14,510
|
|
|
$
|
—
|
|
Short-term investments
(c)
|
1
|
|
$
|
233
|
|
|
$
|
—
|
|
|
$
|
228
|
|
|
$
|
—
|
|
Prepaid forward contracts
(d)
|
2
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
—
|
|
Deferred compensation
(e)
|
2
|
|
$
|
—
|
|
|
$
|
490
|
|
|
$
|
—
|
|
|