☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
|
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.)
|
(Address of principal executive offices and Zip Code)
|
Registrant's telephone number, including area code
|
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
|
Title of each class
|
|
Trading Symbols
|
|
Name of each exchange on which registered
|
Common Stock, par value 1-2/3 cents per share
|
|
PEP
|
|
The Nasdaq Stock Market LLC
|
2.500% Senior Notes Due 2022
|
|
PEP22a
|
|
The Nasdaq Stock Market LLC
|
1.750% Senior Notes Due 2021
|
|
PEP21a
|
|
The Nasdaq Stock Market LLC
|
2.625% Senior Notes Due 2026
|
|
PEP26
|
|
The Nasdaq Stock Market LLC
|
0.875% Senior Notes Due 2028
|
|
PEP28
|
|
The Nasdaq Stock Market LLC
|
0.750% Senior Notes Due 2027
|
|
PEP27
|
|
The Nasdaq Stock Market LLC
|
1.125% Senior Notes Due 2031
|
|
PEP31
|
|
The Nasdaq Stock Market LLC
|
0.875% Senior Notes Due 2039
|
|
PEP39
|
|
The Nasdaq Stock Market LLC
|
Large accelerated filer
|
x
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
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|
|
Emerging growth company
|
☐
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Page No.
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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
|
||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
||
Net Revenue
|
$
|
13,881
|
|
|
$
|
12,884
|
|
Cost of sales
|
6,127
|
|
|
5,688
|
|
||
Gross profit
|
7,754
|
|
|
7,196
|
|
||
Selling, general and administrative expenses
|
5,830
|
|
|
5,188
|
|
||
Operating Profit
|
1,924
|
|
|
2,008
|
|
||
Other pension and retiree medical benefits income
|
77
|
|
|
64
|
|
||
Net interest expense and other
|
(290
|
)
|
|
(204
|
)
|
||
Income before income taxes
|
1,711
|
|
|
1,868
|
|
||
Provision for income taxes
|
360
|
|
|
446
|
|
||
Net income
|
1,351
|
|
|
1,422
|
|
||
Less: Net income attributable to noncontrolling interests
|
13
|
|
|
9
|
|
||
Net Income Attributable to PepsiCo
|
$
|
1,338
|
|
|
$
|
1,413
|
|
Net Income Attributable to PepsiCo per Common Share
|
|
|
|
||||
Basic
|
$
|
0.96
|
|
|
$
|
1.01
|
|
Diluted
|
$
|
0.96
|
|
|
$
|
1.00
|
|
Weighted-average common shares outstanding
|
|
|
|
||||
Basic
|
1,390
|
|
|
1,406
|
|
||
Diluted
|
1,396
|
|
|
1,413
|
|
|
12 Weeks Ended
|
||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
||
Net income
|
$
|
1,351
|
|
|
$
|
1,422
|
|
Other comprehensive (loss)/income, net of taxes:
|
|
|
|
||||
Net currency translation adjustment
|
(754
|
)
|
|
473
|
|
||
Net change on cash flow hedges
|
(61
|
)
|
|
(27
|
)
|
||
Net pension and retiree medical adjustments
|
57
|
|
|
17
|
|
||
Other
|
1
|
|
|
—
|
|
||
|
(757
|
)
|
|
463
|
|
||
Comprehensive income
|
594
|
|
|
1,885
|
|
||
Comprehensive income attributable to noncontrolling interests
|
(13
|
)
|
|
(9
|
)
|
||
Comprehensive Income Attributable to PepsiCo
|
$
|
581
|
|
|
$
|
1,876
|
|
|
12 Weeks Ended
|
||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
||
Operating Activities
|
|
|
|
||||
Net income
|
$
|
1,351
|
|
|
$
|
1,422
|
|
Depreciation and amortization
|
533
|
|
|
498
|
|
||
Share-based compensation expense
|
61
|
|
|
57
|
|
||
Restructuring and impairment charges
|
38
|
|
|
26
|
|
||
Cash payments for restructuring charges
|
(60
|
)
|
|
(52
|
)
|
||
Pension and retiree medical plan expenses
|
40
|
|
|
47
|
|
||
Pension and retiree medical plan contributions
|
(234
|
)
|
|
(260
|
)
|
||
Deferred income taxes and other tax charges and credits
|
25
|
|
|
216
|
|
||
Net tax related to the Tax Cuts and Jobs Act (TCJ Act)
|
—
|
|
|
(29
|
)
|
||
Change in assets and liabilities:
|
|
|
|
||||
Accounts and notes receivable
|
(784
|
)
|
|
(406
|
)
|
||
Inventories
|
(312
|
)
|
|
(435
|
)
|
||
Prepaid expenses and other current assets
|
(263
|
)
|
|
(382
|
)
|
||
Accounts payable and other current liabilities
|
(1,419
|
)
|
|
(1,207
|
)
|
||
Income taxes payable
|
204
|
|
|
120
|
|
||
Other, net
|
71
|
|
|
40
|
|
||
Net Cash Used for Operating Activities
|
(749
|
)
|
|
(345
|
)
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
||||
Capital spending
|
(484
|
)
|
|
(442
|
)
|
||
Sales of property, plant and equipment
|
5
|
|
|
2
|
|
||
Acquisition of SodaStream International Ltd. (SodaStream)
|
(9
|
)
|
|
(1,807
|
)
|
||
Other acquisitions and investments in noncontrolled affiliates
|
(445
|
)
|
|
(56
|
)
|
||
Short-term investments, by original maturity - three months or less, net
|
7
|
|
|
9
|
|
||
Other investing, net
|
1
|
|
|
(6
|
)
|
||
Net Cash Used for Investing Activities
|
(925
|
)
|
|
(2,300
|
)
|
||
|
|
|
|
||||
Financing Activities
|
|
|
|
||||
Proceeds from issuances of long-term debt
|
6,429
|
|
|
1,122
|
|
||
Payments of long-term debt
|
(1
|
)
|
|
(1,851
|
)
|
||
Short-term borrowings, by original maturity:
|
|
|
|
||||
More than three months - proceeds
|
164
|
|
|
2
|
|
||
More than three months - payments
|
(2
|
)
|
|
—
|
|
||
Three months or less, net
|
2,794
|
|
|
115
|
|
||
Cash dividends paid
|
(1,349
|
)
|
|
(1,332
|
)
|
||
Share repurchases - common
|
(573
|
)
|
|
(940
|
)
|
||
Proceeds from exercises of stock options
|
78
|
|
|
103
|
|
||
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted
|
(76
|
)
|
|
(93
|
)
|
||
Other financing
|
(2
|
)
|
|
(2
|
)
|
||
Net Cash Provided by/(Used for) Financing Activities
|
7,462
|
|
|
(2,876
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents and restricted cash
|
(66
|
)
|
|
57
|
|
||
Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash
|
5,722
|
|
|
(5,464
|
)
|
||
Cash and Cash Equivalents and Restricted Cash, Beginning of Year
|
5,570
|
|
|
10,769
|
|
||
Cash and Cash Equivalents and Restricted Cash, End of Period
|
$
|
11,292
|
|
|
$
|
5,305
|
|
|
|
|
|
||||
Supplemental Non-Cash Activity
|
|
|
|
||||
Right-of-use assets obtained in exchange for lease obligations
|
$
|
148
|
|
|
$
|
59
|
|
|
(Unaudited)
|
|
|
|
|||
|
3/21/2020
|
|
|
12/28/2019
|
|
||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
11,089
|
|
|
$
|
5,509
|
|
Short-term investments
|
158
|
|
|
229
|
|
||
Accounts and notes receivable, less allowance: 3/20 - $228 and 12/19 - $105
|
8,477
|
|
|
7,822
|
|
||
Inventories:
|
|
|
|
||||
Raw materials and packaging
|
1,502
|
|
|
1,395
|
|
||
Work-in-process
|
277
|
|
|
200
|
|
||
Finished goods
|
1,821
|
|
|
1,743
|
|
||
|
3,600
|
|
|
3,338
|
|
||
Prepaid expenses and other current assets
|
944
|
|
|
747
|
|
||
Total Current Assets
|
24,268
|
|
|
17,645
|
|
||
Property, plant and equipment
|
42,696
|
|
|
43,003
|
|
||
Accumulated depreciation
|
(23,716
|
)
|
|
(23,698
|
)
|
||
Property, Plant and Equipment, net
|
18,980
|
|
|
19,305
|
|
||
Amortizable Intangible Assets, net
|
1,443
|
|
|
1,433
|
|
||
Goodwill
|
15,465
|
|
|
15,501
|
|
||
Other indefinite-lived intangible assets
|
14,536
|
|
|
14,610
|
|
||
Indefinite-Lived Intangible Assets
|
30,001
|
|
|
30,111
|
|
||
Investments in Noncontrolled Affiliates
|
2,719
|
|
|
2,683
|
|
||
Deferred Income Taxes
|
4,357
|
|
|
4,359
|
|
||
Other Assets
|
3,294
|
|
|
3,011
|
|
||
Total Assets
|
$
|
85,062
|
|
|
$
|
78,547
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Short-term debt obligations
|
$
|
5,882
|
|
|
$
|
2,920
|
|
Accounts payable and other current liabilities
|
16,196
|
|
|
17,541
|
|
||
Total Current Liabilities
|
22,078
|
|
|
20,461
|
|
||
Long-Term Debt Obligations
|
35,361
|
|
|
29,148
|
|
||
Deferred Income Taxes
|
4,060
|
|
|
4,091
|
|
||
Other Liabilities
|
10,004
|
|
|
9,979
|
|
||
Total Liabilities
|
71,503
|
|
|
63,679
|
|
||
Commitments and contingencies
|
|
|
|
||||
PepsiCo Common Shareholders’ Equity
|
|
|
|
||||
Common stock, par value 12/3¢ per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1,389 and 1,391 shares, respectively)
|
23
|
|
|
23
|
|
||
Capital in excess of par value
|
3,741
|
|
|
3,886
|
|
||
Retained earnings
|
61,920
|
|
|
61,946
|
|
||
Accumulated other comprehensive loss
|
(15,057
|
)
|
|
(14,300
|
)
|
||
Repurchased common stock, in excess of par value (478 and 476 shares, respectively)
|
(37,162
|
)
|
|
(36,769
|
)
|
||
Total PepsiCo Common Shareholders’ Equity
|
13,465
|
|
|
14,786
|
|
||
Noncontrolling interests
|
94
|
|
|
82
|
|
||
Total Equity
|
13,559
|
|
|
14,868
|
|
||
Total Liabilities and Equity
|
$
|
85,062
|
|
|
$
|
78,547
|
|
|
12 Weeks Ended
|
||||||||||||
|
3/21/2020
|
|
3/23/2019
|
||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
||||||
Common Stock
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
1,391
|
|
|
$
|
23
|
|
|
1,409
|
|
|
$
|
23
|
|
Change in repurchased common stock
|
(2
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
||
Balance, end of period
|
1,389
|
|
|
23
|
|
|
1,404
|
|
|
23
|
|
||
Capital in Excess of Par Value
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
|
3,886
|
|
|
|
|
3,953
|
|
||||
Share-based compensation expense
|
|
|
62
|
|
|
|
|
57
|
|
||||
Stock option exercises, RSUs and PSUs converted
|
|
|
(131
|
)
|
|
|
|
(164
|
)
|
||||
Withholding tax on RSUs and PSUs converted
|
|
|
(76
|
)
|
|
|
|
(93
|
)
|
||||
Balance, end of period
|
|
|
3,741
|
|
|
|
|
3,753
|
|
||||
Retained Earnings
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
|
61,946
|
|
|
|
|
59,947
|
|
||||
Cumulative effect of accounting changes
|
|
|
(34
|
)
|
|
|
|
8
|
|
||||
Net income attributable to PepsiCo
|
|
|
1,338
|
|
|
|
|
1,413
|
|
||||
Cash dividends declared – common (a)
|
|
|
(1,330
|
)
|
|
|
|
(1,308
|
)
|
||||
Balance, end of period
|
|
|
61,920
|
|
|
|
|
60,060
|
|
||||
Accumulated Other Comprehensive Loss
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
|
(14,300
|
)
|
|
|
|
(15,119
|
)
|
||||
Other comprehensive (loss)/income attributable to PepsiCo
|
|
|
(757
|
)
|
|
|
|
463
|
|
||||
Balance, end of period
|
|
|
(15,057
|
)
|
|
|
|
(14,656
|
)
|
||||
Repurchased Common Stock
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
(476
|
)
|
|
(36,769
|
)
|
|
(458
|
)
|
|
(34,286
|
)
|
||
Share repurchases
|
(4
|
)
|
|
(602
|
)
|
|
(9
|
)
|
|
(971
|
)
|
||
Stock option exercises, RSUs and PSUs converted
|
2
|
|
|
209
|
|
|
4
|
|
|
279
|
|
||
Balance, end of period
|
(478
|
)
|
|
(37,162
|
)
|
|
(463
|
)
|
|
(34,978
|
)
|
||
Total PepsiCo Common Shareholders’ Equity
|
|
|
13,465
|
|
|
|
|
14,202
|
|
||||
Noncontrolling Interests
|
|
|
|
|
|
|
|
||||||
Balance, beginning of period
|
|
|
82
|
|
|
|
|
84
|
|
||||
Net income attributable to noncontrolling interests
|
|
|
13
|
|
|
|
|
9
|
|
||||
Other, net
|
|
|
(1
|
)
|
|
|
|
1
|
|
||||
Balance, end of period
|
|
|
94
|
|
|
|
|
94
|
|
||||
Total Equity
|
|
|
$
|
13,559
|
|
|
|
|
$
|
14,296
|
|
(a)
|
Cash dividends declared per common share were $0.955 and $0.9275 for the 12 weeks ended March 21, 2020 and March 23, 2019, respectively.
|
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)
|
PepsiCo Beverages North America (PBNA), which includes our beverage businesses in the United States and Canada;
|
4)
|
Latin America (LatAm), which includes all of our beverage, food and snack businesses in Latin America;
|
5)
|
Europe, which includes all of our beverage, food and snack businesses in Europe;
|
6)
|
Africa, Middle East and South Asia (AMESA), which includes all of our beverage, food and snack businesses in Africa, the Middle East and South Asia; and
|
7)
|
Asia Pacific, Australia and New Zealand and China region (APAC), which includes all of our beverage, food and snack businesses in Asia Pacific, Australia and New Zealand, and China region.
|
(a)
|
Our primary performance obligation is the distribution and sales of beverage, food and snack products to our customers. For the 12 weeks ended March 21, 2020 and March 23, 2019, our food and snack business represented approximately 55% of our consolidated net revenue. Internationally, LatAm’s food and snack business represented approximately 90% of the segment’s revenue, Europe’s beverage business and food and snack business represented approximately 55% and 45%, respectively, of the segment’s net revenue, AMESA’s beverage business and food and snack business represented approximately 35% and 65%, respectively, of the segment’s net revenue and APAC’s beverage business and food and snack business represented approximately 20% and 80%, respectively, of the segment’s net revenue. Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe segments, was 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.
|
|
12 Weeks Ended
|
||||||
Operating Profit
|
3/21/2020
|
|
|
3/23/2019
|
|
||
FLNA (a)
|
$
|
1,202
|
|
|
$
|
1,159
|
|
QFNA (a)
|
150
|
|
|
138
|
|
||
PBNA (a)
|
297
|
|
|
389
|
|
||
LatAm
|
231
|
|
|
230
|
|
||
Europe (a)
|
146
|
|
|
115
|
|
||
AMESA
|
134
|
|
|
105
|
|
||
APAC (a)
|
142
|
|
|
106
|
|
||
Total division
|
$
|
2,302
|
|
|
$
|
2,242
|
|
Corporate unallocated expenses
|
(378
|
)
|
|
(234
|
)
|
||
Total
|
$
|
1,924
|
|
|
$
|
2,008
|
|
(a)
|
In the 12 weeks ended March 21, 2020, operating profit includes $143 million of certain charges taken as a result of the novel coronavirus (COVID-19) pandemic, including $68 million of incremental allowances for expected credit losses ($21 million in FLNA, $2 million in QFNA, $41 million in PBNA and $4 million in Europe), $44 million of write-downs against upfront payments to customers in PBNA, $26 million of inventory write-downs and product returns ($3 million in FLNA, $22 million in PBNA and $1 million in APAC) and $5 million of certain other charges ($3 million in FLNA, $1 million in PBNA and $1 million in APAC).
|
|
FLNA
|
|
QFNA
|
|
PBNA
|
|
LatAm
|
|
Europe
|
|
AMESA
|
|
APAC
|
|
Corporate
|
||||||||
Expected pre-tax charges
|
11
|
%
|
|
2
|
%
|
|
30
|
%
|
|
10
|
%
|
|
25
|
%
|
|
8
|
%
|
|
5
|
%
|
|
9
|
%
|
|
12 Weeks Ended
|
||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
||
Cost of sales
|
$
|
2
|
|
|
$
|
8
|
|
Selling, general and administrative expenses
|
30
|
|
|
23
|
|
||
Other pension and retiree medical benefits expense/(income)
|
6
|
|
|
(5
|
)
|
||
Total restructuring and impairment charges
|
$
|
38
|
|
|
$
|
26
|
|
After-tax amount
|
$
|
32
|
|
|
$
|
23
|
|
Net income attributable to PepsiCo per common share
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
12 Weeks Ended
|
|
Plan to Date
|
|
|||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
|
through 3/21/2020
|
|
|||
FLNA
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
58
|
|
QFNA
|
1
|
|
|
—
|
|
|
8
|
|
|||
PBNA
|
3
|
|
|
6
|
|
|
94
|
|
|||
LatAm
|
5
|
|
|
—
|
|
|
76
|
|
|||
Europe
|
8
|
|
|
6
|
|
|
113
|
|
|||
AMESA
|
2
|
|
|
8
|
|
|
43
|
|
|||
APAC
|
—
|
|
|
3
|
|
|
49
|
|
|||
Corporate
|
8
|
|
|
8
|
|
|
62
|
|
|||
|
32
|
|
|
31
|
|
|
503
|
|
|||
Other pension and retiree medical benefits expense/
(income) (a)
|
6
|
|
|
(5
|
)
|
|
43
|
|
|||
Total
|
$
|
38
|
|
|
$
|
26
|
|
|
$
|
546
|
|
(a)
|
Income amount represents adjustments for changes in estimates of previously recorded amounts.
|
|
12 Weeks Ended
|
|
Plan to Date
|
|
|||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
|
through 3/21/2020
|
|
|||
Severance and other employee costs (a)
|
$
|
22
|
|
|
$
|
(3
|
)
|
|
$
|
308
|
|
Asset impairments
|
1
|
|
|
8
|
|
|
93
|
|
|||
Other costs (b)
|
15
|
|
|
21
|
|
|
145
|
|
|||
Total
|
$
|
38
|
|
|
$
|
26
|
|
|
$
|
546
|
|
(a)
|
Income amount represents adjustments for changes in estimates of previously recorded amounts.
|
(b)
|
Includes other costs associated with the implementation of our initiatives, including contract termination costs, consulting and other professional fees.
|
|
Severance and Other Employee Costs
|
|
Asset
Impairments
|
|
Other Costs
|
|
Total
|
||||||||
Liability as of December 28, 2019
|
$
|
128
|
|
|
$
|
—
|
|
|
$
|
21
|
|
|
$
|
149
|
|
2020 restructuring charges
|
22
|
|
|
1
|
|
|
15
|
|
|
38
|
|
||||
Cash payments
|
(31
|
)
|
|
—
|
|
|
(29
|
)
|
|
(60
|
)
|
||||
Non-cash charges and translation
|
(9
|
)
|
|
(1
|
)
|
|
4
|
|
|
(6
|
)
|
||||
Liability as of March 21, 2020
|
$
|
110
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
121
|
|
|
|
3/21/2020
|
|
12/28/2019
|
||||||||||||||||||||
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Acquired franchise rights
|
|
$
|
829
|
|
|
$
|
(157
|
)
|
|
$
|
672
|
|
|
$
|
846
|
|
|
$
|
(158
|
)
|
|
$
|
688
|
|
Reacquired franchise rights
|
|
105
|
|
|
(105
|
)
|
|
—
|
|
|
106
|
|
|
(105
|
)
|
|
1
|
|
||||||
Brands
|
|
1,307
|
|
|
(1,058
|
)
|
|
249
|
|
|
1,326
|
|
|
(1,066
|
)
|
|
260
|
|
||||||
Other identifiable intangibles
|
|
850
|
|
|
(328
|
)
|
|
522
|
|
|
810
|
|
|
(326
|
)
|
|
484
|
|
||||||
Total
|
|
$
|
3,091
|
|
|
$
|
(1,648
|
)
|
|
$
|
1,443
|
|
|
$
|
3,088
|
|
|
$
|
(1,655
|
)
|
|
$
|
1,433
|
|
|
Balance
12/28/2019
|
|
Acquisitions/
(Divestitures) |
|
Translation
and Other |
|
Balance
3/21/2020
|
||||||||
|
|
|
|
||||||||||||
FLNA (a)
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
$
|
299
|
|
|
$
|
162
|
|
|
$
|
(11
|
)
|
|
$
|
450
|
|
Brands
|
162
|
|
|
176
|
|
|
(2
|
)
|
|
336
|
|
||||
Total
|
461
|
|
|
338
|
|
|
(13
|
)
|
|
786
|
|
||||
QFNA
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
189
|
|
|
—
|
|
|
—
|
|
|
189
|
|
||||
Brands
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
||||
Total
|
200
|
|
|
—
|
|
|
—
|
|
|
200
|
|
||||
PBNA (b)
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
9,898
|
|
|
21
|
|
|
(39
|
)
|
|
9,880
|
|
||||
Reacquired franchise rights
|
7,089
|
|
|
—
|
|
|
(66
|
)
|
|
7,023
|
|
||||
Acquired franchise rights
|
1,517
|
|
|
—
|
|
|
(13
|
)
|
|
1,504
|
|
||||
Brands
|
763
|
|
|
—
|
|
|
—
|
|
|
763
|
|
||||
Total
|
19,267
|
|
|
21
|
|
|
(118
|
)
|
|
19,170
|
|
||||
LatAm
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
501
|
|
|
—
|
|
|
(26
|
)
|
|
475
|
|
||||
Brands
|
125
|
|
|
—
|
|
|
(8
|
)
|
|
117
|
|
||||
Total
|
626
|
|
|
—
|
|
|
(34
|
)
|
|
592
|
|
||||
Europe (c)
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
3,961
|
|
|
(3
|
)
|
|
(131
|
)
|
|
3,827
|
|
||||
Reacquired franchise rights
|
505
|
|
|
—
|
|
|
(20
|
)
|
|
485
|
|
||||
Acquired franchise rights
|
157
|
|
|
—
|
|
|
(3
|
)
|
|
154
|
|
||||
Brands
|
4,181
|
|
|
—
|
|
|
(131
|
)
|
|
4,050
|
|
||||
Total
|
8,804
|
|
|
(3
|
)
|
|
(285
|
)
|
|
8,516
|
|
||||
AMESA
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
446
|
|
|
—
|
|
|
1
|
|
|
447
|
|
||||
Total
|
446
|
|
|
—
|
|
|
1
|
|
|
447
|
|
||||
APAC
|
|
|
|
|
|
|
|
||||||||
Goodwill
|
207
|
|
|
—
|
|
|
(10
|
)
|
|
197
|
|
||||
Brands
|
100
|
|
|
—
|
|
|
(7
|
)
|
|
93
|
|
||||
Total
|
307
|
|
|
—
|
|
|
(17
|
)
|
|
290
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total goodwill
|
15,501
|
|
|
180
|
|
|
(216
|
)
|
|
15,465
|
|
||||
Total reacquired franchise rights
|
7,594
|
|
|
—
|
|
|
(86
|
)
|
|
7,508
|
|
||||
Total acquired franchise rights
|
1,674
|
|
|
—
|
|
|
(16
|
)
|
|
1,658
|
|
||||
Total brands
|
5,342
|
|
|
176
|
|
|
(148
|
)
|
|
5,370
|
|
||||
Total
|
$
|
30,111
|
|
|
$
|
356
|
|
|
$
|
(466
|
)
|
|
$
|
30,001
|
|
(a)
|
The change from December 28, 2019 to March 21, 2020 primarily reflects our acquisition of BFY Brands, Inc. (BFY Brands).
|
(b)
|
The change in translation and other primarily reflects the depreciation of the Canadian dollar.
|
(c)
|
The change in translation and other primarily reflects the depreciation of the Russian ruble.
|
|
12 Weeks Ended
|
||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
||
Share-based compensation expense - equity awards
|
$
|
61
|
|
|
$
|
57
|
|
Share-based compensation expense - liability awards
|
3
|
|
|
1
|
|
||
Restructuring charges
|
1
|
|
|
—
|
|
||
Total (a)
|
$
|
65
|
|
|
$
|
58
|
|
(a)
|
Primarily recorded in selling, general and administrative expenses.
|
|
12 Weeks Ended
|
||||||||||||
|
3/21/2020
|
|
3/23/2019
|
||||||||||
|
Granted(a)
|
|
Weighted-Average Grant Price
|
|
Granted(a)
|
|
Weighted-Average Grant Price
|
||||||
Stock options
|
1.6
|
|
|
$
|
131.25
|
|
|
1.1
|
|
|
$
|
116.00
|
|
RSUs and PSUs
|
2.4
|
|
|
$
|
131.28
|
|
|
2.7
|
|
|
$
|
115.98
|
|
(a)
|
In millions. All grant activity is disclosed at target.
|
|
12 Weeks Ended
|
||||
|
3/21/2020
|
|
|
3/23/2019
|
|
Expected life
|
6 years
|
|
|
5 years
|
|
Risk-free interest rate
|
1.0
|
%
|
|
2.6
|
%
|
Expected volatility
|
14
|
%
|
|
14
|
%
|
Expected dividend yield
|
3.5
|
%
|
|
3.1
|
%
|
(a)
|
Income amount represents adjustments for changes in estimates of previously recorded amounts.
|
Interest Rate
|
|
|
Maturity Date
|
|
Amount(a)
|
|
|
2.250
|
%
|
|
March 2025
|
|
$
|
1,500
|
|
2.625
|
%
|
|
March 2027
|
|
$
|
500
|
|
2.750
|
%
|
|
March 2030
|
|
$
|
1,500
|
|
3.500
|
%
|
|
March 2040
|
|
$
|
750
|
|
3.625
|
%
|
|
March 2050
|
|
$
|
1,500
|
|
3.875
|
%
|
|
March 2060
|
|
$
|
750
|
|
(a)
|
Represents gross proceeds from issuances of long-term debt excluding debt issuance costs, discounts and premiums.
|
•
|
commodity prices, affecting the cost of our raw materials and energy;
|
•
|
foreign exchange rates and currency restrictions; and
|
•
|
interest rates.
|
|
Notional Amounts(a)
|
||||||
|
3/21/2020
|
|
|
12/28/2019
|
|
||
Commodity
|
$
|
1.2
|
|
|
$
|
1.1
|
|
Foreign exchange
|
$
|
1.8
|
|
|
$
|
1.9
|
|
Interest rate
|
$
|
5.0
|
|
|
$
|
5.0
|
|
Net investment (b)
|
$
|
2.4
|
|
|
$
|
2.5
|
|
(a)
|
In billions.
|
(b)
|
The total notional of our net investment hedge consists of non-derivative debt instruments.
|
|
|
|
3/21/2020
|
|
12/28/2019
|
||||||||||||
|
Fair Value Hierarchy Levels
|
|
Assets(a)
|
|
Liabilities(a)
|
|
Assets(a)
|
|
Liabilities(a)
|
||||||||
Short-term investments (b)
|
1
|
|
$
|
158
|
|
|
$
|
—
|
|
|
$
|
229
|
|
|
$
|
—
|
|
Prepaid forward contracts (c)
|
2
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
17
|
|
|
$
|
—
|
|
Deferred compensation (d)
|
2
|
|
$
|
—
|
|
|
$
|
379
|
|
|
$
|
—
|
|
|
$
|
468
|
|
Derivatives designated as fair value hedging instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest rate (e)
|
2
|
|
$
|
7
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Derivatives designated as cash flow hedging instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange (f)
|
2
|
|
$
|
53
|
|
|
$
|
13
|
|
|
$
|
5
|
|
|
$
|
32
|
|
Interest rate (f)
|
2
|
|
—
|
|
|
613
|
|
|
—
|
|
|
390
|
|
||||
Commodity (g)
|
1
|
|
—
|
|
|
31
|
|
|
2
|
|
|
5
|
|
||||
Commodity (h)
|
2
|
|
—
|
|
|
30
|
|
|
2
|
|
|
5
|
|
||||
|
|
|
$
|
53
|
|
|
$
|
687
|
|
|
$
|
9
|
|
|
$
|
432
|
|
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange (f)
|
2
|
|
$
|
8
|
|
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
2
|
|
Commodity (g)
|
1
|
|
1
|
|
|
111
|
|
|
23
|
|
|
7
|
|
||||
Commodity (h)
|
2
|
|
5
|
|
|
40
|
|
|
6
|
|
|
24
|
|
||||
|
|
|
$
|
14
|
|
|
$
|
152
|
|
|
$
|
32
|
|
|
$
|
33
|
|
Total derivatives at fair value (i)
|
|
|
$
|
74
|
|
|
$
|
840
|
|
|
$
|
41
|
|
|
$
|
470
|
|
Total
|
|
|
$
|
245
|
|
|
$
|
1,219
|
|
|
$
|
287
|
|
|
$
|
938
|
|
(a)
|
Unless otherwise noted, financial assets are classified on our balance sheet within prepaid expenses and other current assets and other assets. Financial liabilities are classified on our balance sheet within accounts payable and other current liabilities and other liabilities.
|
(b)
|
Based on the price of index funds. These investments are classified as short-term investments and are used to manage a portion of market risk arising from our deferred compensation liability.
|
(c)
|
Based primarily on the price of our common stock.
|
(d)
|
Based on the fair value of investments corresponding to employees’ investment elections.
|
(e)
|
Based on LIBOR forward rates. The carrying amount of hedged fixed-rate debt was $2.2 billion as of March 21, 2020 and December 28, 2019, and classified on our balance sheet within short-term and long-term debt obligations. As of March 21, 2020 and December 28, 2019, the cumulative amount of fair value hedging adjustments to hedged fixed-rate debt was a $6 million gain and a $5 million loss, respectively. As of March 21, 2020 and December 28, 2019, the cumulative amount of fair value hedging adjustments on discontinued hedges was a
|
(f)
|
Based on recently reported market transactions of spot and forward rates.
|
(g)
|
Based on quoted contract prices on futures exchange markets.
|
(h)
|
Based on recently reported market transactions of swap arrangements.
|
(i)
|
Derivative assets and liabilities are presented on a gross basis on our balance sheet. Amounts subject to enforceable master netting arrangements or similar agreements which are not offset on the balance sheet as of March 21, 2020 and December 28, 2019 were not material. Collateral received or posted against our asset or liability positions was not material. Collateral posted of $201 million and $58 million as of March 21, 2020 and December 28, 2019, respectively, is classified as restricted cash.
|
|
12 Weeks Ended
|
||||||||||||||||||||||
|
Fair Value/Non-
designated Hedges |
|
Cash Flow and Net Investment Hedges
|
||||||||||||||||||||
|
Losses/(Gains)
Recognized in Income Statement(a) |
|
Losses/(Gains)
Recognized in Accumulated Other Comprehensive Loss |
|
Losses/(Gains)
Reclassified from Accumulated Other Comprehensive Loss into Income Statement(b) |
||||||||||||||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
|
3/21/2020
|
|
|
3/23/2019
|
|
|
3/21/2020
|
|
|
3/23/2019
|
|
||||||
Foreign exchange
|
$
|
(11
|
)
|
|
$
|
(3
|
)
|
|
$
|
(51
|
)
|
|
$
|
31
|
|
|
$
|
4
|
|
|
$
|
(5
|
)
|
Interest rate
|
(11
|
)
|
|
(28
|
)
|
|
223
|
|
|
(7
|
)
|
|
150
|
|
|
(11
|
)
|
||||||
Commodity
|
166
|
|
|
(42
|
)
|
|
64
|
|
|
(4
|
)
|
|
3
|
|
|
1
|
|
||||||
Net investment
|
—
|
|
|
—
|
|
|
(84
|
)
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
144
|
|
|
$
|
(73
|
)
|
|
$
|
152
|
|
|
$
|
10
|
|
|
$
|
157
|
|
|
$
|
(15
|
)
|
(a)
|
Foreign exchange derivative losses/gains are primarily included in selling, general and administrative expenses. Interest rate derivative losses/gains are primarily from fair value hedges and are included in net interest expense and other. These losses/gains are substantially offset by decreases/increases in the value of the underlying debt, which are also included in net interest expense and other. Commodity derivative losses/gains are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.
|
(b)
|
Foreign exchange derivative losses/gains are included in cost of sales. Interest rate derivative losses/gains are included in net interest expense and other. Commodity derivative losses/gains are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.
|
|
12 Weeks Ended
|
||||||||||||
|
3/21/2020
|
|
3/23/2019
|
||||||||||
|
Income
|
|
Shares(a)
|
|
Income
|
|
Shares(a)
|
||||||
Basic net income attributable to PepsiCo per common share
|
$
|
0.96
|
|
|
|
|
$
|
1.01
|
|
|
|
||
Net income available for PepsiCo common shareholders
|
$
|
1,338
|
|
|
1,390
|
|
|
$
|
1,413
|
|
|
1,406
|
|
Dilutive securities:
|
|
|
|
|
|
|
|
||||||
Stock options, RSUs, PSUs and other (b)
|
—
|
|
|
6
|
|
|
—
|
|
|
7
|
|
||
Diluted
|
$
|
1,338
|
|
|
1,396
|
|
|
$
|
1,413
|
|
|
1,413
|
|
Diluted net income attributable to PepsiCo per common share
|
$
|
0.96
|
|
|
|
|
$
|
1.00
|
|
|
|
(a)
|
Weighted-average common shares outstanding (in millions).
|
(b)
|
The dilutive effect of these securities is calculated using the treasury stock method.
|
|
12 Weeks Ended
|
||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
||
Out-of-the-money options (a)
|
—
|
|
|
1.2
|
|
||
Average exercise price per option
|
$
|
—
|
|
|
$
|
115.98
|
|
(a)
|
In millions.
|
|
Currency Translation Adjustment
|
|
Cash Flow Hedges
|
|
Pension and Retiree Medical
|
|
Other
|
|
Accumulated Other Comprehensive Loss Attributable to PepsiCo
|
||||||||||
Balance as of December 28, 2019 (a)
|
$
|
(11,290
|
)
|
|
$
|
(3
|
)
|
|
$
|
(2,988
|
)
|
|
$
|
(19
|
)
|
|
$
|
(14,300
|
)
|
Other comprehensive (loss)/income before reclassifications (b)
|
(735
|
)
|
|
(236
|
)
|
|
21
|
|
|
1
|
|
|
(949
|
)
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
157
|
|
|
50
|
|
|
—
|
|
|
207
|
|
|||||
Net other comprehensive (loss)/income
|
(735
|
)
|
|
(79
|
)
|
|
71
|
|
|
1
|
|
|
(742
|
)
|
|||||
Tax amounts
|
(19
|
)
|
|
18
|
|
|
(14
|
)
|
|
—
|
|
|
(15
|
)
|
|||||
Balance as of March 21, 2020 (a)
|
$
|
(12,044
|
)
|
|
$
|
(64
|
)
|
|
$
|
(2,931
|
)
|
|
$
|
(18
|
)
|
|
$
|
(15,057
|
)
|
(a)
|
Pension and retiree medical amounts are net of taxes of $1,370 million as of December 28, 2019 and $1,356 million as of March 21, 2020.
|
(b)
|
Currency translation adjustment primarily reflects depreciation of the Russian ruble, Canadian dollar and Mexican peso.
|
|
Currency Translation Adjustment
|
|
Cash Flow Hedges
|
|
Pension and Retiree Medical
|
|
Other
|
|
Accumulated Other Comprehensive Loss Attributable to PepsiCo
|
||||||||||
Balance as of December 29, 2018 (a)
|
$
|
(11,918
|
)
|
|
$
|
87
|
|
|
$
|
(3,271
|
)
|
|
$
|
(17
|
)
|
|
$
|
(15,119
|
)
|
Other comprehensive (loss)/income before reclassifications (b)
|
475
|
|
|
(20
|
)
|
|
(16
|
)
|
|
—
|
|
|
439
|
|
|||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
|
|
(15
|
)
|
|
34
|
|
|
—
|
|
|
19
|
|
|||||
Net other comprehensive (loss)/income
|
475
|
|
|
(35
|
)
|
|
18
|
|
|
—
|
|
|
458
|
|
|||||
Tax amounts
|
(2
|
)
|
|
8
|
|
|
(1
|
)
|
|
—
|
|
|
5
|
|
|||||
Balance as of March 23, 2019 (a)
|
$
|
(11,445
|
)
|
|
$
|
60
|
|
|
$
|
(3,254
|
)
|
|
$
|
(17
|
)
|
|
$
|
(14,656
|
)
|
(a)
|
Pension and retiree medical amounts are net of taxes of $1,466 million as of December 29, 2018 and $1,465 million as of March 23, 2019.
|
(b)
|
Currency translation adjustment primarily reflects appreciation of the Russian ruble, Mexican peso and Pound sterling.
|
|
12 Weeks Ended
|
|
|
||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
|
Affected Line Item in the Income Statement
|
||
Cash flow hedges:
|
|
|
|
|
|
||||
Foreign exchange contracts
|
$
|
4
|
|
|
$
|
(5
|
)
|
|
Cost of sales
|
Interest rate derivatives
|
150
|
|
|
(11
|
)
|
|
Net interest expense and other
|
||
Commodity contracts
|
3
|
|
|
1
|
|
|
Cost of sales
|
||
Net losses/(gains) before tax
|
157
|
|
|
(15
|
)
|
|
|
||
Tax amounts
|
(39
|
)
|
|
4
|
|
|
|
||
Net losses/(gains) after tax
|
$
|
118
|
|
|
$
|
(11
|
)
|
|
|
|
|
|
|
|
|
||||
Pension and retiree medical items:
|
|
|
|
|
|
||||
Amortization of prior service credits
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
Other pension and retiree medical benefits income
|
Amortization of net losses
|
50
|
|
|
36
|
|
|
Other pension and retiree medical benefits income
|
||
Net losses before tax
|
50
|
|
|
34
|
|
|
|
||
Tax amounts
|
(11
|
)
|
|
(7
|
)
|
|
|
||
Net losses after tax
|
$
|
39
|
|
|
$
|
27
|
|
|
|
|
|
|
|
|
|
||||
Total net losses reclassified, net of tax
|
$
|
157
|
|
|
$
|
16
|
|
|
|
|
12 Weeks Ended
|
|||||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
|
Change
|
|||
Net revenue
|
$
|
13,881
|
|
|
$
|
12,884
|
|
|
8
|
%
|
Operating profit
|
$
|
1,924
|
|
|
$
|
2,008
|
|
|
(4
|
)%
|
Operating profit margin
|
13.9
|
%
|
|
15.6
|
%
|
|
(1.7
|
)
|
|
12 Weeks Ended 3/21/2020
|
|||||||||||||||
|
|
|
Impact of
|
|
|
Impact of
|
||||||||||
|
Reported
% Change, GAAP Measure
|
|
Foreign exchange translation
|
|
Acquisitions and divestitures
|
|
Organic
% Change, Non-GAAP Measure(a)
|
|
Volume(b)
|
|
Effective net pricing
|
|||||
FLNA
|
7
|
%
|
|
—
|
|
|
—
|
|
|
7
|
%
|
|
5
|
|
2
|
|
QFNA
|
7
|
%
|
|
—
|
|
|
—
|
|
|
7
|
%
|
|
8
|
|
(2
|
)
|
PBNA
|
7
|
%
|
|
—
|
|
|
(1
|
)
|
|
6
|
%
|
|
7
|
|
(0.5
|
)
|
LatAm
|
6
|
%
|
|
2
|
|
|
—
|
|
|
8
|
%
|
|
3
|
|
5
|
|
Europe
|
14
|
%
|
|
—
|
|
|
—
|
|
|
14
|
%
|
|
10
|
|
3
|
|
AMESA
|
9
|
%
|
|
(1.5
|
)
|
|
6
|
|
|
14
|
%
|
|
10
|
|
3
|
|
APAC
|
6
|
%
|
|
2
|
|
|
—
|
|
|
7
|
%
|
|
1
|
|
7
|
|
Total
|
8
|
%
|
|
—
|
|
|
—
|
|
|
8
|
%
|
|
6
|
|
2
|
|
(a)
|
Amounts may not sum due to rounding.
|
(b)
|
Excludes the impact of acquisitions and divestitures. In certain instances, volume growth varies from the amounts disclosed in the following divisional discussions due to nonconsolidated joint venture volume, and, for our beverage businesses, temporary timing differences between bottler case sales and concentrate shipments and equivalents (CSE), as well as the mix of beverage volume sold by our company-owned and franchise-owned bottlers. Our net revenue excludes nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, is based on CSE.
|
|
12 Weeks Ended 3/21/2020
|
||||||||||||||||||
|
|
|
Items Affecting Comparability(a)
|
|
|
||||||||||||||
|
Reported, GAAP Measure
|
|
Mark-to-market net impact
|
|
Restructuring and impairment charges
|
|
Merger and integration charges
|
|
Core,
Non-GAAP Measure
|
||||||||||
FLNA (b)
|
$
|
1,202
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
23
|
|
|
$
|
1,230
|
|
QFNA (b)
|
150
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
151
|
|
|||||
PBNA (b)
|
297
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
300
|
|
|||||
LatAm
|
231
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
236
|
|
|||||
Europe (b)
|
146
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
154
|
|
|||||
AMESA
|
134
|
|
|
—
|
|
|
2
|
|
|
2
|
|
|
138
|
|
|||||
APAC (b)
|
142
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
142
|
|
|||||
Corporate unallocated expenses
|
(378
|
)
|
|
142
|
|
|
8
|
|
|
—
|
|
|
(228
|
)
|
|||||
Total
|
$
|
1,924
|
|
|
$
|
142
|
|
|
$
|
32
|
|
|
$
|
25
|
|
|
$
|
2,123
|
|
(a)
|
See “Items Affecting Comparability.”
|
(b)
|
In the 12 weeks ended March 21, 2020, reported and core operating profit includes $143 million of certain charges taken as a result of the COVID-19 pandemic, including $68 million of incremental allowances for expected credit losses ($21 million in FLNA, $2 million in QFNA, $41 million in PBNA and $4 million in Europe), $44 million of write-downs against upfront payments to customers in PBNA, $26 million of inventory write-downs and product returns ($3 million in FLNA, $22 million in PBNA and $1 million in APAC) and $5 million of certain other charges ($3 million in FLNA, $1 million in PBNA and $1 million in APAC).
|
|
12 Weeks Ended 3/23/2019
|
||||||||||||||||||
|
|
|
Items Affecting Comparability(a)
|
|
|
||||||||||||||
|
Reported,
GAAP Measure
|
|
Mark-to-market net impact
|
|
Restructuring and impairment charges
|
|
Inventory fair value adjustments and merger and integration charges
|
|
Core,
Non-GAAP Measure
|
||||||||||
FLNA
|
$
|
1,159
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,159
|
|
QFNA
|
138
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
138
|
|
|||||
PBNA
|
389
|
|
|
—
|
|
|
6
|
|
|
—
|
|
|
395
|
|
|||||
LatAm
|
230
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
230
|
|
|||||
Europe
|
115
|
|
|
—
|
|
|
6
|
|
|
15
|
|
|
136
|
|
|||||
AMESA
|
105
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
113
|
|
|||||
APAC
|
106
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
109
|
|
|||||
Corporate unallocated expenses
|
(234
|
)
|
|
(60
|
)
|
|
8
|
|
|
—
|
|
|
(286
|
)
|
|||||
Total
|
$
|
2,008
|
|
|
$
|
(60
|
)
|
|
$
|
31
|
|
|
$
|
15
|
|
|
$
|
1,994
|
|
(a)
|
See “Items Affecting Comparability.”
|
|
12 Weeks Ended 3/21/2020
|
|||||||||||||||||||
|
|
|
Impact of Items Affecting Comparability(a)
|
|
|
|
Impact of
|
|
|
|||||||||||
|
Reported % Change, GAAP Measure
|
|
Mark-to-market net impact
|
|
Restructuring and impairment charges
|
|
Inventory fair value adjustments and merger and integration charges
|
|
Core
% Change, Non-GAAP Measure(b)
|
|
Foreign exchange
translation
|
|
Core Constant Currency
% Change, Non-GAAP Measure(b)
|
|||||||
FLNA
|
4
|
%
|
|
—
|
|
|
—
|
|
|
2
|
|
|
6
|
%
|
|
—
|
|
|
6
|
%
|
QFNA
|
8
|
%
|
|
—
|
|
|
0.5
|
|
|
—
|
|
|
9
|
%
|
|
—
|
|
|
9
|
%
|
PBNA
|
(24
|
)%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(24
|
)%
|
|
—
|
|
|
(24
|
)%
|
LatAm
|
1
|
%
|
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
%
|
|
—
|
|
|
3
|
%
|
Europe
|
28
|
%
|
|
—
|
|
|
1
|
|
|
(15
|
)
|
|
13
|
%
|
|
—
|
|
|
13
|
%
|
AMESA
|
26
|
%
|
|
—
|
|
|
(8
|
)
|
|
3
|
|
|
21
|
%
|
|
(1
|
)
|
|
20
|
%
|
APAC
|
33
|
%
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
31
|
%
|
|
1
|
|
|
32
|
%
|
Corporate unallocated expenses
|
61
|
%
|
|
(82
|
)
|
|
—
|
|
|
—
|
|
|
(20
|
)%
|
|
—
|
|
|
(20
|
)%
|
Total
|
(4
|
)%
|
|
10
|
|
|
—
|
|
|
0.5
|
|
|
6
|
%
|
|
—
|
|
|
6
|
%
|
(a)
|
See “Items Affecting Comparability” for further information.
|
(b)
|
Amounts may not sum due to rounding.
|
|
12 Weeks Ended
|
||||||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
|
Change
|
||||
Other pension and retiree medical benefits income
|
$
|
77
|
|
|
$
|
64
|
|
|
$
|
13
|
|
Net interest expense and other
|
$
|
(290
|
)
|
|
$
|
(204
|
)
|
|
$
|
(86
|
)
|
Tax rate
|
21.0
|
%
|
|
23.9
|
%
|
|
|
||||
Net income attributable to PepsiCo
|
$
|
1,338
|
|
|
$
|
1,413
|
|
|
(5
|
)%
|
|
Net income attributable to PepsiCo per common share – diluted
|
$
|
0.96
|
|
|
$
|
1.00
|
|
|
(4
|
)%
|
|
Mark-to-market net impact
|
0.08
|
|
|
(0.03
|
)
|
|
|
||||
Restructuring and impairment charges
|
0.02
|
|
|
0.02
|
|
|
|
||||
Inventory fair value adjustments and merger and integration charges
|
0.02
|
|
|
0.01
|
|
|
|
||||
Net tax related to the TCJ Act
|
—
|
|
|
(0.02
|
)
|
|
|
||||
Net income attributable to PepsiCo per common share – diluted, excluding above items (a)
|
$
|
1.07
|
|
(b)
|
$
|
0.97
|
|
(b)
|
10
|
%
|
|
Impact of foreign exchange translation
|
|
|
|
|
—
|
|
|||||
Growth in net income attributable to PepsiCo per common share – diluted, excluding above items, on a constant currency basis (a)
|
|
|
|
|
10
|
%
|
(a)
|
See “Non-GAAP Measures.”
|
(b)
|
Does not sum due to rounding.
|
|
12 Weeks Ended 3/21/2020
|
||||||||||||||||||||||||||
|
Cost of sales
|
|
Gross profit
|
|
Selling, general and administrative expenses
|
|
Operating profit
|
|
Other pension and retiree medical benefits income
|
|
Provision for income taxes(a)
|
|
Net income attributable to PepsiCo
|
||||||||||||||
Reported, GAAP Measure
|
$
|
6,127
|
|
|
$
|
7,754
|
|
|
$
|
5,830
|
|
|
$
|
1,924
|
|
|
$
|
77
|
|
|
$
|
360
|
|
|
$
|
1,338
|
|
Items Affecting Comparability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mark-to-market net impact
|
(38
|
)
|
|
38
|
|
|
(104
|
)
|
|
142
|
|
|
—
|
|
|
35
|
|
|
107
|
|
|||||||
Restructuring and impairment charges
|
(2
|
)
|
|
2
|
|
|
(30
|
)
|
|
32
|
|
|
6
|
|
|
6
|
|
|
32
|
|
|||||||
Merger and integration charges
|
—
|
|
|
—
|
|
|
(25
|
)
|
|
25
|
|
|
—
|
|
|
3
|
|
|
22
|
|
|||||||
Core, Non-GAAP Measure
|
$
|
6,087
|
|
|
$
|
7,794
|
|
|
$
|
5,671
|
|
|
$
|
2,123
|
|
|
$
|
83
|
|
|
$
|
404
|
|
|
$
|
1,499
|
|
|
12 Weeks Ended 3/23/2019
|
||||||||||||||||||||||||||
|
Cost of sales
|
|
Gross profit
|
|
Selling, general and administrative expenses
|
|
Operating profit
|
|
Other pension and retiree medical benefits income
|
|
Provision for income taxes(a)
|
|
Net income attributable to PepsiCo
|
||||||||||||||
Reported, GAAP Measure
|
$
|
5,688
|
|
|
$
|
7,196
|
|
|
$
|
5,188
|
|
|
$
|
2,008
|
|
|
$
|
64
|
|
|
$
|
446
|
|
|
$
|
1,413
|
|
Items Affecting Comparability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Mark-to-market net impact
|
19
|
|
|
(19
|
)
|
|
41
|
|
|
(60
|
)
|
|
—
|
|
|
(14
|
)
|
|
(46
|
)
|
|||||||
Restructuring and impairment charges
|
(8
|
)
|
|
8
|
|
|
(23
|
)
|
|
31
|
|
|
(5
|
)
|
|
3
|
|
|
23
|
|
|||||||
Inventory fair value adjustments and merger and integration charges
|
(14
|
)
|
|
14
|
|
|
(1
|
)
|
|
15
|
|
|
—
|
|
|
2
|
|
|
13
|
|
|||||||
Net tax related to the TCJ Act
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|
(29
|
)
|
|||||||
Core, Non-GAAP Measure
|
$
|
5,685
|
|
|
$
|
7,199
|
|
|
$
|
5,205
|
|
|
$
|
1,994
|
|
|
$
|
59
|
|
|
$
|
466
|
|
|
$
|
1,374
|
|
(a)
|
Provision for income taxes is the expected tax charge/benefit on the underlying item based on the tax laws and income tax rates applicable to the underlying item in its corresponding tax jurisdiction.
|
|
12 Weeks Ended
|
||||||
|
3/21/2020
|
|
|
3/23/2019
|
|
||
Net cash used for operating activities, GAAP measure
|
$
|
(749
|
)
|
|
$
|
(345
|
)
|
Capital spending
|
(484
|
)
|
|
(442
|
)
|
||
Sales of property, plant and equipment
|
5
|
|
|
2
|
|
||
Free cash flow, non-GAAP measure
|
$
|
(1,228
|
)
|
|
$
|
(785
|
)
|
Period
|
|
Total
Number of
Shares
Repurchased(a)
|
|
Average Price
Paid Per Share
|
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
|
Maximum
Number (or
Approximate
Dollar Value) of
Shares That May Yet Be
Purchased
Under the Plans
or Programs
|
||||||
12/28/2019
|
|
|
|
|
|
|
|
$
|
11,084
|
|
||||
|
|
|
|
|
|
|
|
|
||||||
12/29/2019 - 1/25/2020
|
|
1.4
|
|
|
$
|
137.58
|
|
|
1.4
|
|
|
(193
|
)
|
|
|
|
|
|
|
|
|
|
10,891
|
|
|||||
1/26/2020 - 2/22/2020
|
|
1.0
|
|
|
$
|
143.47
|
|
|
1.0
|
|
|
(144
|
)
|
|
|
|
|
|
|
|
|
|
10,747
|
|
|||||
2/23/2020 - 3/21/2020
|
|
2.1
|
|
|
$
|
128.00
|
|
|
2.1
|
|
|
(265
|
)
|
|
Total
|
|
4.5
|
|
|
$
|
134.47
|
|
|
4.5
|
|
|
$
|
10,482
|
|
(a)
|
All shares were repurchased in open market transactions pursuant to the $15 billion share repurchase program authorized by our Board of Directors and publicly announced on February 13, 2018, which commenced on July 1, 2018 and will expire on June 30, 2021. Shares repurchased under this program may be repurchased in open market transactions, in privately negotiated transactions, in accelerated stock repurchase transactions or otherwise.
|
EXHIBIT
|
|
|
|
Exhibit 101
|
The following materials from PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 21, 2020 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statement of Income, (ii) the Condensed Consolidated Statement of Comprehensive Income, (iii) the Condensed Consolidated Statement of Cash Flows, (iv) the Condensed Consolidated Balance Sheet, (v) the Condensed Consolidated Statement of Equity, and (vi) Notes to the Condensed Consolidated Financial Statements.
|
Exhibit 104
|
The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 21, 2020, formatted in iXBRL and contained in Exhibit 101.
|
|
|
|
|
|
|
PepsiCo, Inc.
|
|
|
|
(Registrant)
|
|
|
|
|
|
Date:
|
April 28, 2020
|
/s/ Marie T. Gallagher
|
|
|
|
Marie T. Gallagher
|
|
|
|
Senior Vice President and Controller
|
|
|
|
(Principal Accounting Officer)
|
|
|
|
|
|
Date:
|
April 28, 2020
|
/s/ David Yawman
|
|
|
|
David Yawman
|
|
|
|
Executive Vice President, Government Affairs, General Counsel and Corporate Secretary
|
|
|
|
(Duly Authorized Officer)
|
|
•
|
PepsiCo Automatic Shelf Registration Statement, 333-234767
|
•
|
PepsiCo Automatic Shelf Registration Statement, 333-216082
|
•
|
PepsiCo Automatic Shelf Registration Statement, 333-197640
|
•
|
PepsiCo Automatic Shelf Registration Statement, 333-177307
|
•
|
PepsiCo Automatic Shelf Registration Statement, 333-154314
|
•
|
PepsiCo Automatic Shelf Registration Statement, 333-133735
|
•
|
PepsiAmericas, Inc. 2000 Stock Incentive Plan, 333-165176
|
•
|
PBG 2004 Long Term Incentive Plan, PBG 2002 Long Term Incentive Plan, PBG Long Term Incentive Plan, The Pepsi Bottling Group, Inc. 1999 Long Term Incentive Plan and PBG Stock Incentive Plan, 333-165177
|
•
|
The PepsiCo Savings Plan, 333-76204, 333-76196, 333-150867 and 333-150868
|
•
|
PepsiCo, Inc. 2007 Long-Term Incentive Plan, 333-142811 and 333-166740
|
•
|
PepsiCo, Inc. 2003 Long-Term Incentive Plan, 333-109509
|
•
|
PepsiCo SharePower Stock Option Plan, 33-29037, 33-35602, 33-42058, 33-51496, 33-54731, 33-66150 and 333-109513
|
•
|
Director Stock Plan, 33-22970 and 333-110030
|
•
|
1979 Incentive Plan and the 1987 Incentive Plan, 33-19539
|
•
|
1994 Long-Term Incentive Plan, 33-54733
|
•
|
PepsiCo, Inc. 1995 Stock Option Incentive Plan, 33-61731, 333-09363 and 333-109514
|
•
|
1979 Incentive Plan, 2-65410
|
•
|
PepsiCo, Inc. Long Term Savings Program, 2-82645, 33-51514 and 33-60965
|
•
|
PepsiCo 401(k) Plan, 333-89265
|
•
|
Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates (Teamster Local Union #173) and the Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates, 333-65992
|
•
|
The Quaker Long Term Incentive Plan of 1990, The Quaker Long Term Incentive Plan of 1999 and The Quaker Oats Company Stock Option Plan for Outside Directors, 333-66632
|
•
|
The Quaker 401(k) Plan for Salaried Employees and The Quaker 401(k) Plan for Hourly Employees, 333-66634
|
•
|
The PepsiCo Share Award Plan, 333-87526
|
•
|
PBG 401(k) Savings Program, PBG 401(k) Program, PepsiAmericas, Inc. Salaried 401(k) Plan and PepsiAmericas, Inc. Hourly 401(k) Plan, 333-165106
|
•
|
PBG 2004 Long Term Incentive Plan, PBG 2002 Long Term Incentive Plan, PBG Long Term Incentive Plan, The Pepsi Bottling Group, Inc. 1999 Long Term Incentive Plan, PBG Directors’ Stock Plan, PBG Stock Incentive Plan and PepsiAmericas, Inc. 2000 Stock Incentive Plan, 333-165107
|
1.
|
I have reviewed this quarterly report on Form 10-Q of PepsiCo, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 28, 2020
|
/s/ Ramon L. Laguarta
|
|
Ramon L. Laguarta
|
|
Chairman of the Board of Directors and
|
|
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of PepsiCo, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: April 28, 2020
|
/s/ Hugh F. Johnston
|
|
Hugh F. Johnston
|
|
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
|
Date: April 28, 2020
|
/s/ Ramon L. Laguarta
|
|
Ramon L. Laguarta
|
|
Chairman of the Board of Directors and
|
|
Chief Executive Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.
|
Date: April 28, 2020
|
/s/ Hugh F. Johnston
|
|
Hugh F. Johnston
|
|
Chief Financial Officer
|