PEPSICO INC [PEP] Filings

10-Q 1 pep-20240615.htm FORM 10-Q pep-20240615

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 15, 2024 (24 weeks)


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-1183


PepsiCo, Inc.

(Exact Name of Registrant as Specified in its Charter)



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 and Zip Code)

(914) 253-2000


Registrant's telephone number, including area code

N/A


(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

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

2.625% Senior Notes Due 2026

PEP26

The Nasdaq Stock Market LLC

0.750% Senior Notes Due 2027

PEP27

The Nasdaq Stock Market LLC

0.875% Senior Notes Due 2028

PEP28

The Nasdaq Stock Market LLC

0.500% Senior Notes Due 2028

PEP28A

The Nasdaq Stock Market LLC

3.200% Senior Notes Due 2029

PEP29

The Nasdaq Stock Market LLC

1.125% Senior Notes Due 2031

PEP31

The Nasdaq Stock Market LLC

0.400% Senior Notes Due 2032

PEP32

The Nasdaq Stock Market LLC

0.750% Senior Notes Due 2033

PEP33

The Nasdaq Stock Market LLC

3.550% Senior Notes Due 2034

PEP34

The Nasdaq Stock Market LLC

0.875% Senior Notes Due 2039

PEP39

The Nasdaq Stock Market LLC

1.050% Senior Notes Due 2050

PEP50

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of Common Stock outstanding as of July 5, 2024 was 1,373,572,400.

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PepsiCo, Inc. and Subsidiaries

Table of Contents


		Page No.
Part I Financial Information
Item 1.	Condensed Consolidated Financial Statements	2
	Condensed Consolidated Statement of Income – 12 and 24 Weeks Ended June 15 , 2024 and June 17 , 2023	2
	Condensed Consolidated Statement of Comprehensive Income – 12 and 24 Weeks Ended June 15 , 2024 and June 17 , 2023	3
	Condensed Consolidated Statement of Cash Flows – 2 4 Weeks Ended June 15 , 2024 and June 17 , 2023	4
	Condensed Consolidated Balance Sheet – June 15 , 2024 and December 30, 2023	6
	Condensed Consolidated Statement of Equity – 12 and 24 Weeks Ended June 15 , 2024 and June 17 , 2023	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Report of Independent Registered Public Accounting Firm		44
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45
Part II Other Information
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 5.	Other Information	47
Item 6.	Exhibits	47

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PART I FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements.

Condensed Consolidated Statement of Income

PepsiCo, Inc. and Subsidiaries

(in millions except per share amounts, unaudited)


	12 Weeks Ended				24 Weeks Ended
	6/15/2024		6/17/2023		6/15/2024		6/17/2023
Net Revenue	$	22,501	$	22,322	$	40,751	$	40,168
Cost of sales	9,919		10,121		18,167		18,109
Gross profit	12,582		12,201		22,584		22,059
Selling, general and administrative expenses	8,534		8,542		15,819		15,771


Operating Profit	4,048		3,659		6,765		6,288
Other pension and retiree medical benefits income	56		60		114		121
Net interest expense and other	(234)		(201)		(436)		(401)
Income before income taxes	3,870		3,518		6,443		6,008
Provision for income taxes	776		747		1,296		1,293
Net income	3,094		2,771		5,147		4,715
Less: Net income attributable to noncontrolling interests	11		23		22		35
Net Income Attributable to PepsiCo	$	3,083	$	2,748	$	5,125	$	4,680
Net Income Attributable to PepsiCo per Common Share
Basic	$	2.24	$	1.99	$	3.73	$	3.40
Diluted	$	2.23	$	1.99	$	3.71	$	3.38
Weighted-average common shares outstanding
Basic	1,375		1,378		1,375		1,378
Diluted	1,379		1,384		1,380		1,384

See accompanying notes to the condensed consolidated financial statements.

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Condensed Consolidated Statement of Comprehensive Income

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	12 Weeks Ended				24 Weeks Ended
	6/15/2024		6/17/2023		6/15/2024		6/17/2023
Net income	$	3,094	$	2,771	$	5,147	$	4,715
Other comprehensive loss, net of taxes:
Net currency translation adjustment	(267)		(198)		(449)		(433)
Net change on cash flow hedges	42		24		45		(35)
Net pension and retiree medical adjustments	9		(6)		20		(10)

Net change on available-for-sale debt securities and other	(391)		1		132		—
	(607)		(179)		(252)		(478)
Comprehensive income	2,487		2,592		4,895		4,237
Less: Comprehensive income attributable to noncontrolling interests	11		23		22		35
Comprehensive Income Attributable to PepsiCo	$	2,476	$	2,569	$	4,873	$	4,202

See accompanying notes to the condensed consolidated financial statements.

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Condensed Consolidated Statement of Cash Flows

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	24 Weeks Ended
	6/15/2024		6/17/2023
Operating Activities
Net income	$	5,147	$	4,715
Depreciation and amortization	1,379		1,268
Impairment and other charges	—		97
Product recall-related impact	182		—
Cash payments for product recall-related impact	(135)		—
Operating lease right-of-use asset amortization	278		248
Share-based compensation expense	183		179
Restructuring and impairment charges	170		204
Cash payments for restructuring charges	(173)		(187)


Pension and retiree medical plan expenses	67		62
Pension and retiree medical plan contributions	(263)		(209)
Deferred income taxes and other tax charges and credits	142		270

Tax payments related to the Tax Cuts and Jobs Act (TCJ Act)	(579)		(309)
Change in assets and liabilities:
Accounts and notes receivable	(1,138)		(1,330)
Inventories	(696)		(851)
Prepaid expenses and other current assets	(365)		(271)
Accounts payable and other current liabilities	(2,968)		(1,960)
Income taxes payable	287		100
Other, net	(203)		(7)
Net Cash Provided by Operating Activities	1,315		2,019

Investing Activities
Capital spending	(1,701)		(1,513)
Sales of property, plant and equipment	127		122
Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets	(30)		(83)
Other divestitures, sales of investments in noncontrolled affiliates and other assets	135		75
Short-term investments, by original maturity:
More than three months - purchases	—		(435)
More than three months - maturities	—		363

Three months or less, net	1		16
Other investing, net	14		32
Net Cash Used for Investing Activities	(1,454)		(1,423)

(Continued on following page)

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Condensed Consolidated Statement of Cash Flows (continued)

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	24 Weeks Ended
	6/15/2024		6/17/2023
Financing Activities
Proceeds from issuances of long-term debt	$	1,765	$	2,986
Payments of long-term debt	(2,882)		(2,252)

Short-term borrowings, by original maturity:
More than three months - proceeds	3,080		1,660
More than three months - payments	(2,138)		(26)
Three months or less, net	1,286		2,023
Cash dividends paid	(3,506)		(3,199)
Share repurchases	(461)		(453)
Proceeds from exercises of stock options	107		86
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted	(131)		(119)
Other financing	(20)		(16)
Net Cash (Used for)/Provided by Financing Activities	(2,900)		690
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(304)		(144)
Net (Decrease)/Increase in Cash and Cash Equivalents and Restricted Cash	(3,343)		1,142
Cash and Cash Equivalents and Restricted Cash, Beginning of Year	9,761		5,100
Cash and Cash Equivalents and Restricted Cash, End of Period	$	6,418	$	6,242

Supplemental Non-Cash Activity
Right-of-use assets obtained in exchange for lease obligations	$	541	$	439
Debt discharged via legal defeasance	$	—	$	94

See accompanying notes to the condensed consolidated financial statements.

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Condensed Consolidated Balance Sheet

PepsiCo, Inc. and Subsidiaries

(in millions except per share amounts)


	(Unaudited)
	6/15/2024		12/30/2023
ASSETS
Current Assets
Cash and cash equivalents	$	6,353	$	9,711
Short-term investments	315		292
Accounts and notes receivable, less allowance ($180 and $175, respectively)	11,942		10,815
Inventories:
Raw materials and packaging	2,635		2,388
Work-in-process	121		104
Finished goods	3,131		2,842
	5,887		5,334
Prepaid expenses and other current assets	1,206		798
Total Current Assets	25,703		26,950
Property, plant and equipment	55,040		54,439
Accumulated depreciation	(27,998)		(27,400)
Property, Plant and Equipment, net	27,042		27,039
Amortizable Intangible Assets, net	1,151		1,199
Goodwill	17,648		17,728
Other Indefinite-Lived Intangible Assets	13,675		13,730

Investments in Noncontrolled Affiliates	2,674		2,714
Deferred Income Taxes	4,465		4,474
Other Assets	7,175		6,661
Total Assets	$	99,533	$	100,495

LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations	$	8,289	$	6,510
Accounts payable and other current liabilities	22,859		25,137
Total Current Liabilities	31,148		31,647
Long-Term Debt Obligations	36,638		37,595
Deferred Income Taxes	3,908		3,895
Other Liabilities	8,259		8,721
Total Liabilities	79,953		81,858
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: 1,374 shares)	23		23
Capital in excess of par value	4,203		4,261
Retained earnings	71,545		70,035
Accumulated other comprehensive loss	(15,786)		(15,534)
Repurchased common stock, in excess of par value (493 shares)	(40,539)		(40,282)
Total PepsiCo Common Shareholders’ Equity	19,446		18,503
Noncontrolling interests	134		134
Total Equity	19,580		18,637
Total Liabilities and Equity	$	99,533	$	100,495

See accompanying notes to the condensed consolidated financial statements.

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Condensed Consolidated Statement of Equity

PepsiCo, Inc. and Subsidiaries

(in millions, except per share amounts, unaudited)


	12 Weeks Ended						24 Weeks Ended
	6/15/2024			6/17/2023			6/15/2024			6/17/2023
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount










Common Stock
Balance, beginning of period	1,375	$	23	1,378	$	23	1,374	$	23	1,377	$	23
Change in repurchased common stock	(1)	—		(1)	—		—	—		—	—
Balance, end of period	1,374	23		1,377	23		1,374	23		1,377	23
Capital in Excess of Par Value
Balance, beginning of period		4,132			3,996			4,261			4,134
Share-based compensation expense		87			85			179			179

Stock option exercises, RSUs and PSUs converted		9			5			(104)			(111)
Withholding tax on RSUs and PSUs converted		(23)			(3)			(131)			(119)
Other		(2)			(1)			(2)			(1)
Balance, end of period		4,203			4,082			4,203			4,082
Retained Earnings
Balance, beginning of period		70,331			68,142			70,035			67,800
Net income attributable to PepsiCo		3,083			2,748			5,125			4,680
Cash dividends declared (a)		(1,869)			(1,755)			(3,615)			(3,345)
Balance, end of period		71,545			69,135			71,545			69,135
Accumulated Other Comprehensive Loss
Balance, beginning of period		(15,179)			(15,601)			(15,534)			(15,302)
Other comprehensive loss attributable to PepsiCo		(607)			(179)			(252)			(478)
Balance, end of period		(15,786)			(15,780)			(15,786)			(15,780)
Repurchased Common Stock
Balance, beginning of period	(492)	(40,260)		(489)	(39,518)		(493)	(40,282)		(490)	(39,506)
Share repurchases	(2)	(310)		(2)	(292)		(3)	(468)		(3)	(466)
Stock option exercises, RSUs and PSUs converted	1	31		1	35		3	210		3	197
Other	—	—		—	—		—	1		—	—
Balance, end of period	(493)	(40,539)		(490)	(39,775)		(493)	(40,539)		(490)	(39,775)
Total PepsiCo Common Shareholders’ Equity		19,446			17,685			19,446			17,685
Noncontrolling Interests
Balance, beginning of period		143			133			134			124
Net income attributable to noncontrolling interest		11			23			22			35
Distributions to noncontrolling interests		(16)			(14)			(17)			(15)


Other, net		(4)			(2)			(5)			(4)
Balance, end of period		134			140			134			140
Total Equity		$	19,580		$	17,825		$	19,580		$	17,825

(a)Cash dividends declared per common share were $1.355 and $1.265 for the 12 weeks ended June 15, 2024 and June 17, 2023, respectively, and $2.62 and $2.415 for the 24 weeks ended June 15, 2024 and June 17, 2023, respectively.

See accompanying notes to the condensed consolidated financial statements.

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Notes to the Condensed Consolidated Financial Statements

Note 1 - 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.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the rules and regulations for reporting the Quarterly Report on Form 10-Q (Form 10-Q). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated balance sheet at December 30, 2023 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. These financial 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 30, 2023 (2023 Form 10-K). This report should be read in conjunction with our 2023 Form 10-K. 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 ended June 15, 2024 are not necessarily indicative of the results expected for any future period or the full year.

Raw materials, direct labor and plant overhead, as well as purchasing and receiving costs, costs directly related to production planning, inspection costs and raw materials handling facilities, are included in cost of sales. The costs of moving, storing and delivering finished product, including merchandising activities, are included in selling, general and administrative expenses.

While our financial results in the United States and Canada (North America) are reported on a 12-week basis, all of our international operations are reported on a monthly calendar basis for which the months of March, April and May are reflected in our results for the 12 weeks ended June 15, 2024 and June 17, 2023, and the months of January through May are reflected in our results for the 24 weeks ended June 15, 2024 and June 17, 2023.

The preparation of our condensed consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and related disclosures. Additionally, the business and economic uncertainty resulting from volatile geopolitical conditions and the high interest rate and inflationary cost environment has made such estimates and assumptions more difficult to calculate. Accordingly, actual results and outcomes could differ from those estimates.

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.

Unless otherwise noted, 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. Certain reclassifications were made to the prior year’s financial statements to conform to the current year presentation.

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Our Divisions

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

1)Frito-Lay North America (FLNA), which includes our branded convenient food businesses in the United States and Canada;

2)Quaker Foods North America (QFNA), which includes our branded convenient food businesses, such as cereal, rice, pasta and other branded food, 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 and convenient food businesses in Latin America;

5)Europe, which includes all of our beverage and convenient food businesses in Europe;

6)Africa, Middle East and South Asia (AMESA), which includes all of our beverage and convenient food 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 and convenient food businesses in Asia Pacific, Australia and New Zealand, and China region.

Net revenue of each division is as follows:


	12 Weeks Ended				24 Weeks Ended
	6/15/2024		6/17/2023		6/15/2024		6/17/2023
FLNA	$	5,874	$	5,904	$	11,550	$	11,487
QFNA	561		684		1,154		1,461
PBNA	6,811		6,755		12,685		12,553
LatAm	3,045		2,856		5,112		4,633
Europe	3,515		3,428		5,451		5,314
AMESA	1,592		1,568		2,632		2,587
APAC	1,103		1,127		2,167		2,133
Total	$	22,501	$	22,322	$	40,751	$	40,168

Our primary performance obligation is the distribution and sales of beverage and convenient food products to our customers. The following tables reflect the percentage of net revenue generated between our beverage business and our convenient food business for each of our international divisions, as well as our consolidated net revenue:


	12 Weeks Ended
	6/15/2024				6/17/2023
	Beverages(a)		Convenient Foods		Beverages(a)		Convenient Foods
LatAm	10	%	90	%	9	%	91	%
Europe	48	%	52	%	49	%	51	%
AMESA	33	%	67	%	31	%	69	%
APAC	28	%	72	%	26	%	74	%
PepsiCo	43	%	57	%	42	%	58	%

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	24 Weeks Ended
	6/15/2024				6/17/2023
	Beverages(a)		Convenient Foods		Beverages(a)		Convenient Foods
LatAm	9	%	91	%	9	%	91	%
Europe	47	%	53	%	48	%	52	%
AMESA	33	%	67	%	31	%	69	%
APAC	21	%	79	%	21	%	79	%
PepsiCo	42	%	58	%	42	%	58	%

(a)Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe divisions, was 36% and 35% of our consolidated net revenue in the 12 and 24 weeks ended June 15, 2024, respectively, and 37% and 36% of our consolidated net revenue in the 12 and 24 weeks ended June 17, 2023, respectively. Generally, our finished goods beverage operations produce higher net revenue but lower operating margin as compared to concentrate sold to authorized bottling partners for the manufacture of finished goods beverages.

Operating profit of each division is as follows:


	12 Weeks Ended				24 Weeks Ended
	6/15/2024		6/17/2023		6/15/2024		6/17/2023
FLNA	$	1,592	$	1,647	$	3,146	$	3,246
QFNA (a)	85		129		36		317
PBNA (b)	987		723		1,497		1,206
LatAm	637		592		1,122		956
Europe	620		476		822		547
AMESA	241		250		393		418
APAC	223		223		456		450
Total divisions	4,385		4,040		7,472		7,140
Corporate unallocated expenses (c)	(337)		(381)		(707)		(852)
Total	$	4,048	$	3,659	$	6,765	$	6,288

(a)In the 12 weeks ended June 15, 2024, we recorded a pre-tax charge of $15 million ($11 million after-tax or $0.01 per share) associated with a previously announced voluntary recall of certain bars and cereals in our QFNA division (Quaker Recall) with $8 million recorded in cost of sales and $7 million recorded in selling, general and administrative expenses. In the 24 weeks ended June 15, 2024, we recorded a pre-tax charge of $182 million ($139 million after-tax or $0.10 per share) associated with the Quaker Recall, with $175 million recorded in cost of sales related to property, plant and equipment write-offs, employee severance costs and other costs and $7 million recorded in selling, general and administrative expenses.

(b)In the 12 and 24 weeks ended June 17, 2023, we recorded our proportionate 39% share of Tropicana Brands Group’s (TBG) impairment of indefinite-lived intangible assets, and recorded an other-than-temporary impairment of our equity method investment, both of which resulted in pre-tax impairment charges of $113 million ($86 million after-tax or $0.06 per share), recorded in selling, general and administrative expenses. See Note 9 for further information.

(c)In both the 12 and 24 weeks ended June 15, 2024 and June 17, 2023, we recorded a pre-tax gain of $76 million ($57 million after-tax or $0.04 per share) and $85 million ($65 million after-tax or $0.05 per share), respectively, in selling, general and administrative expenses as a result of the sale of corporate assets.

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Note 2 - Recently Issued Accounting Pronouncements

Adopted

In September 2022, the Financial Accounting Standards Board (FASB) issued guidance to enhance the transparency of supplier finance programs to allow financial statement users to understand the effect on working capital, liquidity and cash flows. The new guidance requires disclosure of key terms of the program, including a description of the payment terms, payment timing and assets pledged as security or other forms of guarantees provided to the finance provider or intermediary. Other requirements include the disclosure of the amount that remains unpaid as of the end of the reporting period, a description of where these obligations are presented in the balance sheet and a rollforward of the obligation during the annual period. We adopted the guidance in the first quarter of 2023, except for the rollforward, which is effective for the current fiscal year 2024. We will adopt the rollforward guidance when it becomes effective in our 2024 annual reporting, on a prospective basis. See Note 12 for disclosures currently required under this guidance.

Not Yet Adopted

In December 2023, the FASB issued guidance to enhance transparency of income tax disclosures. On an annual basis, the new guidance requires a public entity to disclose: (1) specific categories in the rate reconciliation, (2) additional information for reconciling items that are equal to or greater than 5% of the amount computed by multiplying income (or loss) from continuing operations before income tax expense (or benefit) by the applicable statutory income tax rate, (3) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, with foreign taxes disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than 5% of total income taxes paid, (4) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and (5) income tax expense (or benefit) from continuing operations disaggregated between federal (national), state and foreign. The guidance is effective for fiscal year 2025 annual reporting, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. We will adopt the guidance when it becomes effective, in our 2025 annual reporting, on a prospective basis.

In November 2023, the FASB issued guidance to enhance disclosure of expenses of a public entity’s reportable segments. The new guidance requires a public entity to disclose: (1) on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, (2) on an annual and interim basis, an amount for other segment items (the difference between segment revenue less the significant expenses disclosed under the significant expense principle and each reported measure of segment profit or loss), including a description of its composition, (3) on an annual and interim basis, information about a reportable segment’s profit or loss and assets previously required to be disclosed only on an annual basis, and (4) the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and how to allocate resources. The new guidance also clarifies that if the CODM uses more than one measure of a segment’s profit or loss, one or more of those measures may be reported and requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in this update and all existing segment disclosures. The guidance is effective for the current fiscal year 2024 annual reporting, and in the first quarter of 2025 for interim period reporting, with early adoption permitted. Upon adoption, this guidance should be applied retrospectively to all prior periods presented. We will adopt the guidance when it becomes effective in our 2024 annual reporting.

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Note 3 - 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 leverages new technology and business models to further simplify, harmonize and automate processes; re-engineers our go-to-market and information systems, including deploying the right automation for each market; and simplifies our organization and optimize our manufacturing and supply chain footprint. To build on the successful implementation of the 2019 Productivity Plan, in 2022, we expanded and extended the plan through the end of 2028 to take advantage of additional opportunities within the initiatives described above. As a result, we expect to incur pre-tax charges of approximately $3.65 billion, including cash expenditures of approximately $2.9 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 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	10	%	1	%	30	%	10	%	25	%	5	%	4	%	15	%

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


	12 Weeks Ended				24 Weeks Ended
	6/15/2024		6/17/2023		6/15/2024		6/17/2023
Cost of sales	$	—	$	3	$	6	$	6
Selling, general and administrative expenses	66		89		149		199
Other pension and retiree medical benefits expense/(income) (a)	8		—		15		(1)
Total restructuring and impairment charges	$	74	$	92	$	170	$	204
After-tax amount	$	54	$	63	$	130	$	161
Impact on net income attributable to PepsiCo per common share	$	(0.04)	$	(0.05)	$	(0.09)	$	(0.12)


	12 Weeks Ended				24 Weeks Ended				Plan-to-Date
	6/15/2024		6/17/2023		6/15/2024		6/17/2023		through 6/15/2024
FLNA	$	13	$	6	$	35	$	13	$	287
QFNA	—		—		4		—		23
PBNA	5		5		15		10		282
LatAm	16		6		21		11		221
Europe	19		52		37		141		603
AMESA	3		—		3		5		100
APAC	4		4		4		5		89
Corporate	6		19		36		20		353
	66		92		155		205		1,958
Other pension and retiree medical benefits expense/(income) (a)	8		—		15		(1)		112
Total	$	74	$	92	$	170	$	204	$	2,070

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

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	12 Weeks Ended				24 Weeks Ended				Plan-to-Date
	6/15/2024		6/17/2023		6/15/2024		6/17/2023		through 6/15/2024
Severance and other employee costs	$	10	$	50	$	82	$	142	$	1,132
Asset impairments	3		—		4		—		196
Other costs	61		42		84		62		742
Total	$	74	$	92	$	170	$	204	$	2,070

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 consulting and other professional fees, as well as contract termination costs.

A summary of our 2019 Productivity Plan activity for the 24 weeks ended June 15, 2024 is as follows:


	Severance and Other Employee Costs		Asset Impairments		Other Costs		Total
Liability as of December 30, 2023	$	188	$	—	$	9	$	197
2024 restructuring charges	82		4		84		170
Cash payments	(84)		—		(89)		(173)
Non-cash charges and translation	(11)		(4)		14		(1)
Liability as of June 15, 2024	$	175	$	—	$	18	$	193

The majority of the restructuring accrual at June 15, 2024 is expected to be paid by the end of 2024.

Other Productivity Initiatives

There were no material 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.

Note 4 - Intangible Assets

A summary of our amortizable intangible assets is as follows:


	6/15/2024						12/30/2023
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Acquired franchise rights	$	832	$	(219)	$	613	$	840	$	(214)	$	626
Customer relationships	553		(274)		279		560		(265)		295
Brands	1,081		(986)		95		1,093		(989)		104
Other identifiable intangibles	440		(276)		164		449		(275)		174
Total	$	2,906	$	(1,755)	$	1,151	$	2,942	$	(1,743)	$	1,199

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The change in the book value of indefinite-lived intangible assets is as follows:


	Balance 12/30/2023		Translation and Other		Balance 6/15/2024

FLNA
Goodwill	$	453	$	(5)	$	448
Brands	251		—		251
Total	704		(5)		699
QFNA
Goodwill	189		—		189
Total	189		—		189
PBNA
Goodwill	11,961		(16)		11,945
Reacquired franchise rights	7,114		(29)		7,085
Acquired franchise rights	1,737		(5)		1,732
Brands	2,508		—		2,508
Total	23,320		(50)		23,270
LatAm
Goodwill	460		(11)		449
Brands	82		(2)		80
Total	542		(13)		529
Europe
Goodwill	3,166		(21)		3,145
Reacquired franchise rights	419		(4)		415
Acquired franchise rights	154		(4)		150
Brands	1,124		(5)		1,119
Total	4,863		(34)		4,829
AMESA
Goodwill	991		(16)		975
Brands	137		(2)		135
Total	1,128		(18)		1,110
APAC
Goodwill	508		(11)		497
Brands	204		(4)		200
Total	712		(15)		697

Total goodwill	17,728		(80)		17,648
Total reacquired franchise rights	7,533		(33)		7,500
Total acquired franchise rights	1,891		(9)		1,882
Total brands	4,306		(13)		4,293
Total	$