Restructuring and Impairment Charges Restructuring and Impairment Charges (Notes)

6 Months Ended

Jun. 15, 2019

Restructuring and Related Activities [Abstract]

Restructuring, Impairment, and Other Activities Disclosure [Text Block]

Restructuring and Impairment Charges

2019 Multi-Year Productivity Plan

We publicly announced a multi-year productivity plan on February 15, 2019 (2019 Productivity Plan) that will leverage new technology and business models to further simplify, harmonize and automate processes; re-engineer our go-to-market and information systems, including deploying the right automation for each market; simplify our organization and optimize our manufacturing and supply chain footprint.

A summary of our 2019 Productivity Plan charges is as follows:

	6/15/2019
	12 Weeks Ended		24 Weeks Ended
Cost of sales	$	82	$	90
Selling, general and administrative expenses	76		99
Other pension and retiree medical benefits income (a)	—		(5		)
Total restructuring and impairment charges	$	158	$	184
After-tax amount	$	120	$	143
Net income attributable to PepsiCo per common share	$	0.08	$	0.10

(a) Income amount represents adjustments for changes in estimates of previously recorded amounts.

	6/15/2019
	12 Weeks Ended		24 Weeks Ended			Plan to Date
FLNA	$	6	$	6		$	37
QFNA	—		—			5
PBNA	10		16			56
LatAm	21		21			30
ESSA	53		59			67
AMENA	42		53			56
Corporate	26		34			41
	158		189			292
Other pension and retiree medical benefits (income)/expense (a)	—		(5		)	30
	$	158	$	184		$	322

(a) Income amount represents adjustments for changes in estimates of previously recorded amounts.

	6/15/2019
	12 Weeks Ended		24 Weeks Ended		Plan to Date
Severance and other employee costs	$	43	$	40	$	177
Asset impairments	76		84		84
Other costs (a)	39		60		61
	$	158	$	184	$	322

(a) Includes other costs associated with the implementation of our initiatives, including contract termination costs, consulting and other professional fees.

A summary of our 2019 Productivity Plan activity for the 24 weeks ended June 15, 2019 is as follows:

	Severance and Other Employee Costs			Asset Impairments			Other Costs			Total
Liability as of December 29, 2018	$	105		$	—		$	1		$	106
2019 restructuring charges	40			84			60			184
Cash payments (a)	(44		)	—			(20		)	(64		)
Non-cash charges and translation	5			(84		)	—			(79		)
Liability as of June 15, 2019	$	106		$	—		$	41		$	147

(a) Excludes cash expenditures of $2 million reported in the cash flow statement in pension and retiree medical contributions.

Substantially all of the restructuring accrual at June 15, 2019 is expected to be paid by the end of 2019.

2014 Multi-Year Productivity Plan

We publicly announced a multi-year productivity plan on February 13, 2014 (2014 Productivity Plan) that includes the next generation of productivity initiatives that we believe will strengthen our beverage, food and snack businesses by: accelerating our investment in manufacturing automation; further optimizing our global manufacturing footprint, including closing certain manufacturing facilities; re-engineering our go-to-market systems in developed markets; expanding shared services; and implementing simplified organization structures to drive efficiency. To build on the 2014 Productivity Plan, in the fourth quarter of 2017, we expanded and extended the program through the end of 2019 to take advantage of additional opportunities within the initiatives described above to further strengthen our beverage, food and snack businesses.

We have substantially completed our 2014 Productivity Plan and do not expect to incur material charges in 2019 associated with this program. We expect pre-tax charges and cash expenditures for the program to approximate the total program estimates of $1.3 billion and $960 million, respectively.

For the 12 and 24 weeks ended June 15, 2019, there were no material charges related to this program. Cash payments for the 24 weeks ended June 15, 2019 were $89 million. The accrual related to this program as of June 15, 2019 is immaterial and is expected to be paid by the end of 2019.

For further information, refer to Note 3 to our consolidated financial statements in our 2018 Form 10-K.

A summary of our 2014 Productivity Plan charges is as follows:

	6/16/2018
	12 Weeks Ended		24 Weeks Ended
Selling, general and administrative expenses	$	32	$	40
Other pension and retiree medical benefits expense	—		4
Total restructuring and impairment charges	$	32	$	44
After-tax amount	$	24	$	35
Net income attributable to PepsiCo per common share	$	0.02	$	0.02

	6/16/2018
	12 Weeks Ended		24 Weeks Ended
FLNA	$	4	$	9
QFNA	—		1
PBNA	9		12
LatAm	3		12
ESSA	4		8
AMENA	2		4
Corporate (a)	10		(2		)
	$	32	$	44

(a) Income amount represents adjustments for changes in estimates of previously recorded amounts.

	6/16/2018
	12 Weeks Ended		24 Weeks Ended
Severance and other employee costs	$	21	$	24
Asset impairments	4		8
Other costs	7		12
	$	32	$	44

Other Productivity Initiatives

There were no material charges related to other productivity and efficiency initiatives outside the scope of the 2019 and 2014 Productivity Plans.

We regularly evaluate different productivity initiatives beyond the productivity plans and other initiatives described above.