Restructuring and Impairment Charges Restructuring and Impairment Charges (Notes)

3 Months Ended

Mar. 19, 2022

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; and simplify our organization and optimize our manufacturing and supply chain footprint. To build on the successful implementation of the 2019 Productivity Plan, in 2021, we expanded and extended the plan through the end of 2026 to take advantage of additional opportunities within the initiatives described above. As a result, we expect to incur pre-tax charges of approximately $3.15 billion, including cash expenditures of approximately $2.4 billion. These pre-tax charges are expected to consist of approximately 55% of severance and other employee-related costs, 10% for asset impairments (all non-cash) resulting from plant closures and related actions, and 35% for other costs associated with the implementation of our initiatives.

The total expected plan pre-tax charges are expected to be incurred by division approximately as follows:

	FLNA		QFNA		PBNA		LatAm		Europe		AMESA		APAC		Corporate
Expected pre-tax charges	15	%	1	%	25	%	10	%	25	%	5	%	4	%	15	%

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

	12 Weeks Ended
	3/19/2022		3/20/2021
Cost of sales	$	5	$	2
Selling, general and administrative expenses	22		35
Other pension and retiree medical benefits expense	—		6
Total restructuring and impairment charges	$	27	$	43
After-tax amount	$	21	$	35
Impact on net income attributable to PepsiCo per common share	$	(0.02)	$	(0.03)

	12 Weeks Ended				Plan to Date
	3/19/2022		3/20/2021		through 3/19/2022
FLNA	$	3	$	15	$	167
QFNA	—		—		12
PBNA	3		4		161
LatAm	6		2		145
Europe	7		11		241
AMESA	2		1		72
APAC	1		—		62
Corporate	5		4		144
	27		37		1,004
Other pension and retiree medical benefits expense	—		6		67
Total	$	27	$	43	$	1,071

	12 Weeks Ended				Plan to Date
	3/19/2022		3/20/2021		through 3/19/2022
Severance and other employee costs	$	11	$	34	$	575
Asset impairments	—		—		157
Other costs	16		9		339
Total	$	27	$	43	$	1,071

Severance and other employee costs primarily include severance and other termination benefits, as well as voluntary separation arrangements. Other costs primarily include 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 12 weeks ended March 19, 2022 is as follows:

	Severance and Other Employee Costs		Other Costs		Total
Liability as of December 25, 2021	$	64	$	7	$	71
2022 restructuring charges	11		16		27
Cash payments	(16)		(16)		(32)
Liability as of March 19, 2022	$	59	$	7	$	66

Substantially all of the restructuring accrual at March 19, 2022 is expected to be paid by the end of 2022.

Other Productivity Initiatives

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

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

For information on other impairment charges, see Notes 1 and 3 for Brand Portfolio Impairment Charges and Note 1 for Russia-Ukraine Conflict Charges.