Basis of Presentation

6 Months Ended

Jun. 13, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

Basis of Presentation and Our Divisions

Basis of Presentation

When used in this report, the terms “we,” “us,” “our,” “PepsiCo” and the “Company” mean PepsiCo, Inc. and its consolidated subsidiaries, collectively.

Our Condensed Consolidated Balance Sheet as of June 13, 2015 and Condensed Consolidated Statements of Income and Comprehensive Income for the 12 and 24 weeks ended June 13, 2015 and June 14, 2014, and the Condensed Consolidated Statements of Cash Flows and Equity for the 24 weeks ended June 13, 2015 and June 14, 2014 have not been audited. These statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended December 27, 2014. In our opinion, these financial statements include all normal and recurring adjustments necessary for a fair presentation. The results for the 12 and 24 weeks are not necessarily indicative of the results expected for the full year.

The results of our Venezuelan businesses have been reported under highly inflationary accounting since the beginning of 2010. See further unaudited information in “Our Business Risks” and “Our Liquidity and Capital Resources” in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

While our results in the United States and Canada (North America) are reported on a 12-week basis, most of our international operations report on a monthly calendar basis for which the months of March, April and May are reflected in our second quarter results.

Our significant interim accounting policies include the recognition of a pro rata share of certain estimated annual sales incentives and certain advertising and marketing costs in proportion to revenue or volume, as applicable, and the recognition of income taxes using an estimated annual effective tax rate. Raw materials, direct labor and plant overhead, as well as purchasing and receiving costs, costs directly related to production planning, inspection costs and raw material handling facilities, are included in cost of sales. The costs of moving, storing and delivering finished product are included in selling, general and administrative expenses.

The following information is unaudited. Tabular dollars are in millions, except per share amounts. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. This report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 27, 2014.

Our Divisions

We are organized into six reportable segments (also referred to as divisions), as follows:

1) Frito-Lay North America (FLNA);

2) Quaker Foods North America (QFNA);

3) Latin America Foods (LAF), which includes all of our food and snack businesses in Latin America;

4) PepsiCo Americas Beverages (PAB), which includes all of our North American and Latin American beverage businesses;

5) PepsiCo Europe (Europe), which includes all beverage, food and snack businesses in Europe and South Africa; and

6) PepsiCo Asia, Middle East and Africa (AMEA), which includes all beverage, food and snack businesses in Asia, Middle East and Africa, excluding South Africa.

Net revenue and operating profit of each division are as follows:

	12 Weeks Ended				24 Weeks Ended
	6/13/15		6/14/14		6/13/15		6/14/14
Net Revenue
FLNA	$	3,452	$	3,387	$	6,771	$	6,606
QFNA	546		564		1,185		1,198
LAF	2,000		2,122		3,279		3,460
PAB	5,337		5,281		9,770		9,707
Europe	2,788		3,657		4,265		5,618
AMEA	1,800		1,883		2,870		2,928
Total division	$	15,923	$	16,894	$	28,140	$	29,517

	12 Weeks Ended						24 Weeks Ended
	6/13/15			6/14/14			6/13/15			6/14/14
Operating Profit
FLNA	$	1,007		$	937		$	1,927		$	1,799
QFNA (a)	132			139			231			299
LAF	285			323			489			555
PAB	903			868			1,371			1,297
Europe	334			451			434			603
AMEA (b)	389			381			631			575
Total division	3,050			3,099			5,083			5,128
Corporate Unallocated
Mark-to-market net gains	39			31			38			65
Restructuring and impairment charges	(1		)	(8		)	(7		)	(5		)
Other	(188		)	(226		)	(417		)	(485		)
	$	2,900		$	2,896		$	4,697		$	4,703

(a) Operating profit for QFNA for the 24 weeks ended June 13, 2015 includes a pre-tax impairment charge of $65 million ($50 million after-tax) associated with our Muller Quaker Dairy (MQD) joint venture investment.

(b) Operating profit for AMEA for the 24 weeks ended June 13, 2015 includes a pre-tax gain of $39 million ($28 million after-tax) associated with refranchising a portion of our bottling operations in India.

Total assets of each division are as follows:

	Total Assets
	6/13/15		12/27/14
FLNA	$	5,421	$	5,307
QFNA	932		982
LAF	4,682		4,760
PAB	31,052		30,188
Europe	14,363		13,902
AMEA	5,979		5,887
Total division	62,429		61,026
Corporate (a)	9,833		9,483
	$	72,262	$	70,509

(a) Corporate assets consist principally of certain cash and cash equivalents, short-term investments, derivative instruments, property, plant and equipment and pension and tax assets.

Changes to Organizational Structure

The division amounts and discussions included in this Form 10-Q reflect the reportable segments that existed through the end of our second quarter of 2015. Effective beginning with our third quarter of 2015, we realigned certain of our reportable segments to be consistent with certain changes to our organizational structure and how the Chief Executive Officer will monitor the performance of these segments. As a result, all of our beverage, food and snack businesses in Latin America will be reported together as Latin America and our North American beverage business will be reported separately as North America Beverages. Prior to this change, the PepsiCo Americas Beverages segment included all of our North American and Latin American beverage businesses. In addition, our PepsiCo Europe reportable segment will now also include our businesses in the Sub-Saharan Africa markets that were formerly part of PepsiCo Asia, Middle East and Africa and will be renamed Europe Sub-Saharan Africa (ESSA). PepsiCo Asia, Middle East and Africa will be renamed Asia, Middle East and North Africa (AMENA). These changes do not impact our Frito-Lay North America or Quaker Foods North America reportable segments. Our historical segment reporting will be retrospectively revised during the remainder of 2015 to reflect the new organizational structure. For additional information, see Part II - Other Information.