North Carolina | 1-1183 | 13-1584302 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
99.1 | Press Release issued by PepsiCo, Inc., dated July 7, 2016. |
PEPSICO, INC. | ||
Date: July 7, 2016 | By: | /s/ Tony West |
Name: | Tony West | |
Title: | Executive Vice President, Government Affairs, General Counsel and Corporate Secretary | |
Exhibit No. | Description | |
99.1 | Press Release issued by PepsiCo, Inc., dated July 7, 2016. |
Second Quarter | Year-to-Date | |
Net revenue change | (3.3)% | (3.1)% |
Foreign exchange impact on net revenue | (4)% | (4)% |
EPS | $1.38 | $2.01 |
EPS change | 4% | (6)% |
Foreign exchange impact on EPS | (3.5)% | (4)% |
Second Quarter | Year-to-Date | |
Organic revenue growth | 3.3% | 3.4% |
Core EPS | $1.35 | $2.24 |
Core constant currency EPS growth | 6% | 8% |
Revenue | Volume | ||||||
GAAP Reported % Change | Percentage Point Impact | Organic % Change | Organic Volume % Growth | ||||
Foreign Exchange Translation | Acquisitions, Divestitures and Structural Changes | Food/Snacks | Beverages | ||||
FLNA | 3 | -- | -- | 4 | 2 | ||
QFNA | 3 | 0.5 | -- | 3 | 3 | ||
NAB | 1 | -- | -- | 1 | (1) | ||
Latin America | (23) | 12 | 19 | 9 | 2 | (2) | |
ESSA | (5) | 9 | -- | 3 | 3 | 4 | |
AMENA | (1.5) | 5 | -- | 4 | 4 | 5 | |
Total | (3) | 4 | 2.5 | 3 | 2.5 | 2 |
GAAP Reported % Change | Percentage Point Impact | Core Constant Currency % Change | ||
Items Affecting Comparability | Foreign Exchange Translation | |||
FLNA | 8 | -- | -- | 8 |
QFNA | 11 | -- | -- | 11 |
NAB | 6 | -- | -- | 6 |
Latin America | (32) | 7 | 13 | (12) |
ESSA | (4) | -- | 6 | 2.5 |
AMENA | 3 | -- | 4 | 7 |
Division Operating Profit | 1 | 3 | 4 | |
Corporate Unallocated | (28) | 38 | -- | 10 |
Total | 2 | (1) | 3 | 4 |
EPS | 4 | (1) | 3.5 | 6 |
• | Reported net revenue declined 3.3 percent. Foreign exchange translation had a 4-percentage-point unfavorable impact and the Venezuela deconsolidation had a 2.5-percentage-point unfavorable impact on reported net revenue. Organic revenue, which excludes the impacts of foreign exchange translation and structural changes, grew 3.3 percent. |
• | Reported gross margin expanded 115 basis points, while reported operating margin expanded 105 basis points. Core gross margin expanded 75 basis points and core operating margin expanded 80 basis points. Reported and core margin expansion reflects the implementation of effective revenue management strategies and productivity gains, partially offset by a 50-basis-point increase in advertising and marketing expense as a percentage of sales. |
• | Reported operating profit increased 2 percent and core constant currency operating profit increased 4 percent. The deconsolidation of our Venezuela operations had a 2.5-percentage-point unfavorable impact on both reported and core operating profit. |
• | The reported and core effective tax rates were approximately 26 percent in 2016 and 2015. |
• | Reported EPS was $1.38, a 4 percent increase from the prior year. Foreign exchange translation negatively impacted reported EPS by 3.5 percentage points. |
• | Core EPS was $1.35, an increase of 2 percent. Excluding the impact of foreign exchange translation, core constant currency EPS increased 6 percent. |
• | The deconsolidation of our Venezuelan operations had an unfavorable 3-percentage-point impact on both reported and core EPS. |
• | Cash flow provided by operating activities was $2.8 billion. |
Revenue | Volume | ||||||
GAAP Reported % Change | Percentage Point Impact | Organic % Change | Organic Volume % Growth | ||||
Foreign Exchange Translation | Acquisitions, Divestitures and Structural Changes | Snacks | Beverages | ||||
FLNA | 3 | 0.5 | -- | 4 | 2 | ||
QFNA | (1) | 1 | -- | -- | 0.5 | ||
NAB | 1 | 0.5 | -- | 1.5 | -- | ||
Latin America | (24) | 15 | 18 | 9 | 2 | -- | |
ESSA | (7) | 9 | -- | 3 | 2 | 3 | |
AMENA | -- | 5 | -- | 5 | 4.5 | 5 | |
Total | (3) | 4 | 2 | 3 | 2 | 2 |
GAAP Reported % Change | Percentage Point Impact | Core Constant Currency % Change | ||
Items Affecting Comparability | Foreign Exchange Translation | |||
FLNA | 9 | (1) | 0.5 | 9 |
QFNA | 35 | (1) | 1 | 35 |
NAB | 6 | -- | -- | 6 |
Latin America | (27) | 4 | 17 | (7) |
ESSA | (13) | 2 | 6 | (5) |
AMENA | (61) | 62 | 3 | 4.5 |
Division Operating Profit | 8 | 3 | 6 | |
Corporate Unallocated | (35) | 29 | -- | (6) |
Total | (2) | 6 | 3 | 7 |
EPS | (6) | 10 | 4 | 8 |
• | Reported net revenue declined 3.1 percent. Foreign exchange translation had a 4-percentage-point unfavorable impact and the Venezuela deconsolidation had a 2-percentage-point unfavorable impact on reported net revenue. Organic revenue, which excludes the impacts of foreign exchange translation and structural changes, grew 3.4 percent. |
• | Reported gross margin expanded 135 basis points, while reported operating margin expanded 10 basis points. Reported operating margin was impacted by an impairment charge associated with our 5 percent indirect equity interest in our Chinese bottler. Core gross margin expanded 100 basis points and core operating margin expanded 115 basis points. Core margin expansion reflects the implementation of effective revenue management strategies and productivity gains, partially offset by a 55 basis point increase in advertising and marketing expense as a percentage of sales. |
• | Reported operating profit declined 2 percent and core constant currency operating profit increased 7 percent. The Venezuela deconsolidation had a 2-percentage-point unfavorable impact on reported and core operating profit. |
• | The reported effective tax rate was 28.2 percent and core effective tax rate was 25.5 percent. For the same period of the prior year, the reported and core effective tax rates were approximately 25 percent. |
• | Reported EPS was $2.01, a 6 percent decline from the prior year. Impairment charges related to the indirect interest in our Chinese bottler had a $0.26 per share impact on reported EPS (12 percentage points). Foreign exchange translation negatively impacted reported EPS by 4 percentage points. |
• | Core EPS was $2.24, an increase of 4 percent. Excluding the impact of foreign exchange translation, core constant currency EPS increased 8 percent. |
• | The Venezuela deconsolidation had an unfavorable 2-percentage-point impact on both reported and core EPS. |
• | Cash flow provided by operating activities was $2.9 billion. |
• | Based on current foreign exchange market consensus rates, foreign exchange translation to negatively impact reported net revenue growth by 4 percentage points; |
• | The 53rd week2 to contribute approximately 1 percentage point to reported net revenue growth; |
• | Approximately 4 percent organic revenue growth, excluding the impact of the 53rd week2 and structural changes, including the deconsolidation of our Venezuelan operations; |
• | 2016 core earnings per share of $4.71, driven by the following expectations and factors: |
2015 core earnings per share | $4.57 |
Expected core constant currency EPS growth (excluding Venezuela deconsolidation) - previously 8% | 9% |
Negative impact of Venezuela deconsolidation | (2)% |
Negative impact of foreign currency translation3 | (4)% |
Expected 2016 core earnings per share | $4.71 |
• | Low-single-digit raw material inflation including the impact of transaction related foreign exchange, and low-single-digit deflation excluding the impact of transaction related foreign exchange; |
• | The benefit of a 53rd week2 will be reinvested in certain productivity and growth initiatives in 2016; |
• | Productivity savings of approximately $1 billion; |
• | Lower corporate unallocated expense, driven primarily by lower pension expense; |
• | Higher net interest expense driven by higher debt balances; |
• | A core effective tax rate approximately even with the 2015 full-year core effective tax rate; |
• | Over $10 billion in cash flow from operating activities and more than $7 billion in free cash flow (excluding certain items); |
• | Net capital spending of approximately $3 billion; and |
• | To return a total of approximately $7 billion to shareholders through dividends of approximately $4 billion and share repurchases of approximately $3 billion. |
Contacts: | Investors | Media | |
Jamie Caulfield | Jay Cooney | ||
Senior Vice President, Investor Relations | Vice President, Communications | ||
914-253-3035 | 914-253-2777 | ||
jamie.caulfield@pepsico.com | jay.cooney@pepsico.com |
12 Weeks Ended | 24 Weeks Ended | ||||||||||||||||||||
6/11/2016 | 6/13/2015 | Change | 6/11/2016 | 6/13/2015 | Change | ||||||||||||||||
Net Revenue | $ | 15,395 | $ | 15,923 | (3 | )% | $ | 27,257 | $ | 28,140 | (3 | )% | |||||||||
Cost of sales (a) | 6,830 | 7,251 | (6 | )% | 11,981 | 12,754 | (6 | )% | |||||||||||||
Gross profit (a) | 8,565 | 8,672 | (1 | )% | 15,276 | 15,386 | (1 | )% | |||||||||||||
Selling, general and administrative expenses (a) | 5,584 | 5,753 | (3 | )% | 10,662 | 10,654 | — | % | |||||||||||||
Amortization of intangible assets | 17 | 19 | (9 | )% | 31 | 35 | (10 | )% | |||||||||||||
Operating Profit | 2,964 | 2,900 | 2 | % | 4,583 | 4,697 | (2 | )% | |||||||||||||
Interest expense | (255 | ) | (217 | ) | 17 | % | (501 | ) | (428 | ) | 17 | % | |||||||||
Interest income and other | 22 | 14 | 51 | % | 36 | 29 | 20 | % | |||||||||||||
Income before income taxes | 2,731 | 2,697 | 1 | % | 4,118 | 4,298 | (4 | )% | |||||||||||||
Provision for income taxes | 718 | 703 | 2 | % | 1,160 | 1,073 | 8 | % | |||||||||||||
Net income | 2,013 | 1,994 | 1 | % | 2,958 | 3,225 | (8 | )% | |||||||||||||
Less: Net income attributable to noncontrolling interests | 8 | 14 | (35 | )% | 22 | 24 | (7 | )% | |||||||||||||
Net Income Attributable to PepsiCo | $ | 2,005 | $ | 1,980 | 1 | % | $ | 2,936 | $ | 3,201 | (8 | )% | |||||||||
Diluted | |||||||||||||||||||||
Net Income Attributable to PepsiCo per Common Share | $ | 1.38 | $ | 1.33 | 4 | % | $ | 2.01 | $ | 2.14 | (6 | )% | |||||||||
Weighted-average common shares outstanding | 1,456 | 1,491 | 1,458 | 1,497 | |||||||||||||||||
Cash dividends declared per common share | $ | 0.7525 | $ | 0.7025 | $ | 1.455 | $ | 1.3575 |
(a) | Reclassifications were made to prior years’ amounts to conform to the current year presentation, including the presentation of certain functional support costs associated with the manufacturing and production of our products within cost of sales. These costs were previously included in selling, general and administrative expenses. These reclassifications resulted in an increase in cost of sales of $347 million and $354 million for the full years 2015 and 2014, respectively, with corresponding reductions to gross profit and selling, general and administrative expenses in the same periods. The quarterly impact of these reclassifications increased cost of sales by $61 million, $84 million, $95 million and $107 million for the quarters ended March 21, 2015, June 13, 2015, September 5, 2015 and December 26, 2015, respectively, with corresponding reductions to gross profit and selling, general and administrative expenses in the same periods. These reclassifications reflect changes in how we are classifying costs of certain support functions as a result of ongoing productivity and efficiency initiatives. These reclassifications had no impact on our consolidated net revenue, operating profit, net interest expense, provision for income taxes, net income or earnings per share. |
12 Weeks Ended | 24 Weeks Ended | ||||||||||||||||||||
6/11/2016 | 6/13/2015 | Change | 6/11/2016 | 6/13/2015 | Change | ||||||||||||||||
Net Revenue | |||||||||||||||||||||
Frito-Lay North America | $ | 3,564 | $ | 3,452 | 3 | % | $ | 6,982 | $ | 6,771 | 3 | % | |||||||||
Quaker Foods North America | 561 | 546 | 3 | % | 1,178 | 1,185 | (1 | )% | |||||||||||||
North America Beverages | 5,145 | 5,113 | 1 | % | 9,506 | 9,411 | 1 | % | |||||||||||||
Latin America | 1,717 | 2,224 | (23 | )% | 2,759 | 3,638 | (24 | )% | |||||||||||||
Europe Sub-Saharan Africa | 2,660 | 2,813 | (5 | )% | 4,019 | 4,309 | (7 | )% | |||||||||||||
Asia, Middle East and North Africa | 1,748 | 1,775 | (1.5 | )% | 2,813 | 2,826 | — | % | |||||||||||||
Total Net Revenue | $ | 15,395 | $ | 15,923 | (3 | )% | $ | 27,257 | $ | 28,140 | (3 | )% | |||||||||
Operating Profit | |||||||||||||||||||||
Frito-Lay North America | $ | 1,083 | $ | 1,007 | 8 | % | $ | 2,101 | $ | 1,927 | 9 | % | |||||||||
Quaker Foods North America | 146 | 132 | 11 | % | 312 | 231 | 35 | % | |||||||||||||
North America Beverages | 881 | 833 | 6 | % | 1,366 | 1,286 | 6 | % | |||||||||||||
Latin America | 242 | 355 | (32 | )% | 417 | 574 | (27 | )% | |||||||||||||
Europe Sub-Saharan Africa | 337 | 350 | (4 | )% | 404 | 462 | (13 | )% | |||||||||||||
Asia, Middle East and North Africa | 383 | 373 | 3 | % | 235 | 603 | (61 | )% | |||||||||||||
Division Operating Profit | 3,072 | 3,050 | 1 | % | 4,835 | 5,083 | (5 | )% | |||||||||||||
Corporate Unallocated | |||||||||||||||||||||
Commodity mark-to-market net impact | 100 | 39 | 146 | 38 | |||||||||||||||||
Restructuring and impairment charges | (1 | ) | (1 | ) | (4 | ) | (7 | ) | |||||||||||||
Other | (207 | ) | (188 | ) | (394 | ) | (417 | ) | |||||||||||||
(108 | ) | (150 | ) | (28 | )% | (252 | ) | (386 | ) | (35 | )% | ||||||||||
Total Operating Profit | $ | 2,964 | $ | 2,900 | 2 | % | $ | 4,583 | $ | 4,697 | (2 | )% |
PepsiCo, Inc. and Subsidiaries Condensed Consolidated Statement of Cash Flows (in millions) | |||||||
24 Weeks Ended | |||||||
6/11/2016 | 6/13/2015 | ||||||
(unaudited) | |||||||
Operating Activities | |||||||
Net income | $ | 2,958 | $ | 3,225 | |||
Depreciation and amortization | 1,044 | 1,075 | |||||
Share-based compensation expense | 123 | 144 | |||||
Restructuring and impairment charges | 79 | 61 | |||||
Cash payments for restructuring charges | (67 | ) | (107 | ) | |||
Charge related to the transaction with Tingyi (Cayman Islands) Holding Corp. (Tingyi) | 373 | — | |||||
Excess tax benefits from share-based payment arrangements | (84 | ) | (78 | ) | |||
Pension and retiree medical plan expenses | 124 | 215 | |||||
Pension and retiree medical plan contributions | (155 | ) | (117 | ) | |||
Deferred income taxes and other tax charges and credits | 119 | 42 | |||||
Change in assets and liabilities: | |||||||
Accounts and notes receivable | (1,049 | ) | (1,309 | ) | |||
Inventories | (755 | ) | (862 | ) | |||
Prepaid expenses and other current assets | (202 | ) | (264 | ) | |||
Accounts payable and other current liabilities | (73 | ) | 197 | ||||
Income taxes payable | 704 | 648 | |||||
Other, net | (218 | ) | (109 | ) | |||
Net Cash Provided by Operating Activities | 2,921 | 2,761 | |||||
Investing Activities | |||||||
Capital spending | (919 | ) | (832 | ) | |||
Sales of property, plant and equipment | 47 | 26 | |||||
Acquisitions and investments in noncontrolled affiliates | (4 | ) | (16 | ) | |||
Divestitures | 75 | 74 | |||||
Short-term investments, net | (808 | ) | 593 | ||||
Other investing, net | 1 | (3 | ) | ||||
Net Cash Used for Investing Activities | (1,608 | ) | (158 | ) | |||
Financing Activities | |||||||
Proceeds from issuances of long-term debt | 2,532 | 2,487 | |||||
Payments of long-term debt | (3,083 | ) | (2,054 | ) | |||
Short-term borrowings, net | 2,819 | 2,247 | |||||
Cash dividends paid | (2,060 | ) | (1,973 | ) | |||
Share repurchases - common | (1,329 | ) | (2,130 | ) | |||
Share repurchases - preferred | (2 | ) | (2 | ) | |||
Proceeds from exercises of stock options | 293 | 250 | |||||
Excess tax benefits from share-based payment arrangements | 84 | 78 | |||||
Other financing | (4 | ) | (2 | ) | |||
Net Cash Used for Financing Activities | (750 | ) | (1,099 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (13 | ) | (76 | ) | |||
Net Increase in Cash and Cash Equivalents | 550 | 1,428 | |||||
Cash and Cash Equivalents, Beginning of Year | 9,096 | 6,134 | |||||
Cash and Cash Equivalents, End of Period | $ | 9,646 | $ | 7,562 |
PepsiCo, Inc. and Subsidiaries Condensed Consolidated Balance Sheet (in millions except per share amounts) | |||||||
6/11/2016 | 12/26/2015 | ||||||
(unaudited) | |||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 9,646 | $ | 9,096 | |||
Short-term investments | 3,733 | 2,913 | |||||
Accounts and notes receivable, net | 7,495 | 6,437 | |||||
Inventories: | |||||||
Raw materials | 1,512 | 1,312 | |||||
Work-in-process | 325 | 161 | |||||
Finished goods | 1,650 | 1,247 | |||||
3,487 | 2,720 | ||||||
Prepaid expenses and other current assets | 1,517 | 1,865 | |||||
Total Current Assets | 25,878 | 23,031 | |||||
Property, Plant and Equipment, net | 16,219 | 16,317 | |||||
Amortizable Intangible Assets, net | 1,274 | 1,270 | |||||
Goodwill | 14,398 | 14,177 | |||||
Other nonamortizable intangible assets | 12,073 | 11,811 | |||||
Nonamortizable Intangible Assets | 26,471 | 25,988 | |||||
Investments in Noncontrolled Affiliates | 2,002 | 2,311 | |||||
Other Assets | 867 | 750 | |||||
Total Assets | $ | 72,711 | $ | 69,667 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Short-term obligations | $ | 4,774 | $ | 4,071 | |||
Accounts payable and other current liabilities | 13,685 | 13,507 | |||||
Total Current Liabilities | 18,459 | 17,578 | |||||
Long-Term Debt Obligations | 30,847 | 29,213 | |||||
Other Liabilities | 5,873 | 5,887 | |||||
Deferred Income Taxes | 5,156 | 4,959 | |||||
Total Liabilities | 60,335 | 57,637 | |||||
Commitments and contingencies | |||||||
Preferred Stock, no par value | 41 | 41 | |||||
Repurchased Preferred Stock | (188 | ) | (186 | ) | |||
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: 1,441 and 1,448 shares, respectively) | 24 | 24 | |||||
Capital in excess of par value | 3,940 | 4,076 | |||||
Retained earnings | 51,295 | 50,472 | |||||
Accumulated other comprehensive loss | (12,813 | ) | (13,319 | ) | |||
Repurchased common stock, in excess of par value (425 and 418 shares, respectively) | (30,051 | ) | (29,185 | ) | |||
Total PepsiCo Common Shareholders’ Equity | 12,395 | 12,068 | |||||
Noncontrolling interests | 128 | 107 | |||||
Total Equity | 12,376 | 12,030 | |||||
Total Liabilities and Equity | $ | 72,711 | $ | 69,667 |
12 Weeks Ended | 24 Weeks Ended | ||||||||||||||
6/11/2016 | 6/13/2015 | 6/11/2016 | 6/13/2015 | ||||||||||||
Beginning net shares outstanding | 1,446 | 1,479 | 1,448 | 1,488 | |||||||||||
Options exercised, Restricted Stock Units (RSUs), Performance Stock Units (PSUs) and PepsiCo Equity Performance Units (PEPunits) converted | 2 | 4 | 7 | 7 | |||||||||||
Shares repurchased | (7 | ) | (11 | ) | (14 | ) | (23 | ) | |||||||
Ending net shares outstanding | 1,441 | 1,472 | 1,441 | 1,472 | |||||||||||
Weighted average basic | 1,443 | 1,476 | 1,445 | 1,480 | |||||||||||
Dilutive securities: | |||||||||||||||
Options | 7 | 9 | 7 | 9 | |||||||||||
RSUs, PSUs, PEPunits and Other | 5 | 5 | 5 | 7 | |||||||||||
ESOP convertible preferred stock | 1 | 1 | 1 | 1 | |||||||||||
Weighted average diluted | 1,456 | 1,491 | 1,458 | 1,497 | |||||||||||
Average share price for the period | $ | 102.90 | $ | 95.82 | $ | 100.73 | $ | 96.32 | |||||||
Growth versus prior year | 7 | % | 12 | % | 5 | % | 16 | % | |||||||
Options outstanding | 28 | 36 | 29 | 37 | |||||||||||
Options in the money | 28 | 34 | 27 | 35 | |||||||||||
Dilutive shares from options | 7 | 9 | 7 | 9 | |||||||||||
Dilutive shares from options as a % of options in the money | 26 | % | 27 | % | 27 | % | 27 | % | |||||||
Average exercise price of options in the money | $ | 69.02 | $ | 64.59 | $ | 67.36 | $ | 64.56 | |||||||
RSUs, PSUs, PEPunits and Other outstanding | 9 | 11 | 9 | 13 | |||||||||||
Dilutive shares from RSUs, PSUs, PEPunits and Other | 5 | 5 | 5 | 7 | |||||||||||
Weighted-average grant-date fair value of RSUs and PSUs outstanding | $ | 91.43 | $ | 83.25 | $ | 91.40 | $ | 81.42 | |||||||
Weighted-average grant-date fair value of PEPunits outstanding | $ | 59.86 | $ | 62.75 | $ | 59.92 | $ | 63.03 |
Percent Impact | GAAP Measure | Non-GAAP Measure | |||||||||||||||||
Reported % Change | Organic % Change (a) | ||||||||||||||||||
Net Revenue Year over Year % Change | Volume | Effective net pricing | Acquisitions, divestitures and other structural changes | Foreign exchange translation | Venezuela deconsolidation (b) | 12 Weeks Ended 6/11/2016 | 12 Weeks Ended 6/11/2016 | ||||||||||||
Frito-Lay North America | 2 | 1 | — | — | — | 3 | 4 | ||||||||||||
Quaker Foods North America | 3 | — | — | (0.5 | ) | — | 3 | 3 | |||||||||||
North America Beverages | (1 | ) | 2 | — | — | — | 1 | 1 | |||||||||||
Latin America | 1 | 7 | (0.5 | ) | (12 | ) | (19 | ) | (23 | ) | 9 | ||||||||
Europe Sub-Saharan Africa | 2.5 | 1 | — | (9 | ) | — | (5 | ) | 3 | ||||||||||
Asia, Middle East and North Africa | 7 | (3 | ) | — | (5 | ) | — | (1.5 | ) | 4 | |||||||||
Total PepsiCo | 2 | 2 | — | (4 | ) | (2.5 | ) | (3 | ) | 3 |
Percent Impact | GAAP Measure | Non-GAAP Measure | ||||||||||||||||
Reported % Change | Organic % Change (a) | |||||||||||||||||
Net Revenue Year over Year % Change | Volume | Effective net pricing | Acquisitions, divestitures and other structural changes | Foreign exchange translation | Venezuela deconsolidation (b) | 24 Weeks Ended 6/11/2016 | 24 Weeks Ended 6/11/2016 | |||||||||||
Frito-Lay North America | 2 | 2 | — | (0.5 | ) | — | 3 | 4 | ||||||||||
Quaker Foods North America | 0.5 | — | — | (1 | ) | — | (1 | ) | — | |||||||||
North America Beverages | — | 1 | — | (0.5 | ) | — | 1 | 1.5 | ||||||||||
Latin America | 2 | 7 | (0.5 | ) | (15 | ) | (18 | ) | (24 | ) | 9 | |||||||
Europe Sub-Saharan Africa | 2 | 1 | — | (9 | ) | — | (7 | ) | 3 | |||||||||
Asia, Middle East and North Africa | 6 | (1 | ) | — | (5 | ) | — | — | 5 | |||||||||
Total PepsiCo | 2 | 2 | — | (4 | ) | (2 | ) | (3 | ) | 3 |
(a) | Organic percent change is a financial measure that is not in accordance with GAAP and is calculated by excluding the impact of foreign exchange translation, acquisitions, divestitures and other structural changes, including the Venezuela deconsolidation, from reported growth. |
(b) | Represents the impact of the exclusion of the 2015 results of our Venezuelan businesses which were deconsolidated effective as of the end of the third quarter of 2015. |
GAAP Measure | Non-GAAP Measure | Non-GAAP Measure | ||||||||||||||
Reported % Change | Percent Impact of Items Affecting Comparability | Core (a) % Change | Percent Impact of | Core Constant Currency (a) % Change | ||||||||||||
Operating Profit Year over Year % Change | 12 Weeks Ended 6/11/2016 | Commodity mark-to- market net impact | Restructuring and impairment charges (b) | 12 Weeks Ended 6/11/2016 | Foreign exchange translation | 12 Weeks Ended 6/11/2016 | ||||||||||
Frito-Lay North America | 8 | — | — | 8 | — | 8 | ||||||||||
Quaker Foods North America | 11 | — | — | 11 | — | 11 | ||||||||||
North America Beverages | 6 | — | — | 6 | — | 6 | ||||||||||
Latin America | (32 | ) | — | 7 | (25 | ) | 13 | (12 | ) | |||||||
Europe Sub-Saharan Africa | (4 | ) | — | — | (4 | ) | 6 | 2.5 | ||||||||
Asia, Middle East and North Africa | 3 | — | — | 3 | 4 | 7 | ||||||||||
Division Operating Profit | 1 | — | 1 | 1.5 | 3 | 4 | ||||||||||
Impact of Corporate Unallocated | (28 | ) | 38 | — | 10 | — | 10 | |||||||||
Total Operating Profit | 2 | (2 | ) | 1 | 1 | 3 | 4 | |||||||||
Net Income Attributable to PepsiCo | 1 | — | 3 | 3 | ||||||||||||
Net Income Attributable to PepsiCo per common share - diluted | 4 | 2 | 3.5 | 6 |
GAAP Measure | Non-GAAP Measure | Non-GAAP Measure | ||||||||||||||||
Reported % Change | Percent Impact of Items Affecting Comparability | Core (a) % Change | Percent Impact of | Core Constant Currency (a) % Change | ||||||||||||||
Operating Profit Year over Year % Change | 24 Weeks Ended 6/11/2016 | Commodity mark-to- market net impact | Restructuring and impairment charges (b) | Charge related to the transaction with Tingyi | 24 Weeks Ended 6/11/2016 | Foreign exchange translation | 24 Weeks Ended 6/11/2016 | |||||||||||
Frito-Lay North America | 9 | — | (1 | ) | — | 9 | 0.5 | 9 | ||||||||||
Quaker Foods North America | 35 | — | (1 | ) | — | 35 | 1 | 35 | ||||||||||
North America Beverages | 6 | — | — | — | 6 | — | 6 | |||||||||||
Latin America | (27 | ) | — | 4 | — | (23 | ) | 17 | (7 | ) | ||||||||
Europe Sub-Saharan Africa | (13 | ) | — | 2 | — | (10 | ) | 6 | (5 | ) | ||||||||
Asia, Middle East and North Africa | (61 | ) | — | 0.5 | 62 | 1 | 3 | 4.5 | ||||||||||
Division Operating Profit | (5 | ) | — | — | 7 | 3 | 3 | 6 | ||||||||||
Impact of Corporate Unallocated | (35 | ) | 28 | 1 | — | (6 | ) | — | (6 | ) | ||||||||
Total Operating Profit | (2 | ) | (2 | ) | — | 8 | 4 | 3 | 7 | |||||||||
Net Income Attributable to PepsiCo | (8 | ) | 1.5 | 4 | 5 | |||||||||||||
Net Income Attributable to PepsiCo per common share - diluted | (6 | ) | 4 | 4 | 8 |
(a) | Core results and core constant currency results are financial measures that are not in accordance with GAAP and exclude the above items affecting comparability. See A-14 through A-15 for a discussion of each of these adjustments. |
(b) | Restructuring and impairment charges for the 12 and 24 weeks ended June 11, 2016 include costs associated with the 2014 Multi-Year Productivity Plan. Restructuring and impairment charges for the 12 and 24 weeks ended June 13, 2015 include costs associated with the 2014 and 2012 Multi-Year Productivity Plans. See A-14 for a discussion of these plans. |
12 Weeks Ended 6/11/2016 | ||||||||||||||||||||||||||||||||||
Cost of sales | Gross profit | Selling, general and administrative expenses | Operating profit | Provision for income taxes | Noncontrolling interests | Net income attributable to PepsiCo | Net income attributable to PepsiCo per common share - diluted | Effective tax rate | ||||||||||||||||||||||||||
Reported, GAAP Measure | $ | 6,830 | $ | 8,565 | $ | 5,584 | $ | 2,964 | $ | 718 | $ | 8 | $ | 2,005 | $ | 1.38 | 26.3 | % | ||||||||||||||||
Items Affecting Comparability | ||||||||||||||||||||||||||||||||||
Commodity mark-to-market net impact | 63 | (63 | ) | 37 | (100 | ) | (35 | ) | — | (65 | ) | (0.04 | ) | |||||||||||||||||||||
Restructuring and impairment charges (a) | — | — | (49 | ) | 49 | 15 | 3 | 31 | 0.02 | |||||||||||||||||||||||||
Core, Non-GAAP Measure (b) | $ | 6,893 | $ | 8,502 | $ | 5,572 | $ | 2,913 | $ | 698 | $ | 11 | $ | 1,971 | $ | 1.35 | 26.0 | % |
12 Weeks Ended 6/13/2015 | ||||||||||||||||||||||||||||||
Cost of sales | Gross profit | Selling, general and administrative expenses | Operating profit | Provision for income taxes | Net income attributable to PepsiCo | Net income attributable to PepsiCo per common share - diluted | Effective tax rate | |||||||||||||||||||||||
Reported, GAAP Measure | $ | 7,251 | $ | 8,672 | $ | 5,753 | $ | 2,900 | $ | 703 | $ | 1,980 | $ | 1.33 | 26.1 | % | ||||||||||||||
Items Affecting Comparability | ||||||||||||||||||||||||||||||
Commodity mark-to-market net impact | 2 | (2 | ) | 37 | (39 | ) | (12 | ) | (27 | ) | (0.02 | ) | ||||||||||||||||||
Restructuring and impairment charges (a) | — | — | (25 | ) | 25 | 6 | 19 | 0.01 | ||||||||||||||||||||||
Core, Non-GAAP Measure (b) | $ | 7,253 | $ | 8,670 | $ | 5,765 | $ | 2,886 | $ | 697 | $ | 1,972 | $ | 1.32 | 26.0 | % |
(a) | Restructuring and impairment charges for the 12 weeks ended June 11, 2016 include costs associated with the 2014 Multi-Year Productivity Plan. Restructuring and impairment charges for the 12 weeks ended June 13, 2015 include costs associated with the 2014 and 2012 Multi-Year Productivity Plans. See A-14 for a discussion of these plans. |
(b) | Core results are financial measures that are not in accordance with GAAP and exclude the above items affecting comparability. See A-14 through A-15 for a discussion of each of these adjustments. |
24 Weeks Ended 6/11/2016 | ||||||||||||||||||||||||||||||||||
Cost of sales | Gross profit | Selling, general and administrative expenses | Operating profit | Provision for income taxes | Noncontrolling interests | Net income attributable to PepsiCo | Net income attributable to PepsiCo per common share - diluted | Effective tax rate | ||||||||||||||||||||||||||
Reported, GAAP Measure | $ | 11,981 | $ | 15,276 | $ | 10,662 | $ | 4,583 | $ | 1,160 | $ | 22 | $ | 2,936 | $ | 2.01 | 28.2 | % | ||||||||||||||||
Items Affecting Comparability | ||||||||||||||||||||||||||||||||||
Commodity mark-to-market net impact | 81 | (81 | ) | 65 | (146 | ) | (52 | ) | — | (94 | ) | (0.06 | ) | |||||||||||||||||||||
Restructuring and impairment charges (a) | — | — | (79 | ) | 79 | 20 | 3 | 56 | 0.04 | |||||||||||||||||||||||||
Charge related to the transaction with Tingyi | — | — | (373 | ) | 373 | — | — | 373 | 0.26 | |||||||||||||||||||||||||
Core, Non-GAAP Measure (b) | $ | 12,062 | $ | 15,195 | $ | 10,275 | $ | 4,889 | $ | 1,128 | $ | 25 | $ | 3,271 | $ | 2.24 | 25.5 | % |
24 Weeks Ended 6/13/2015 | ||||||||||||||||||||||||||||||
Cost of sales | Gross profit | Selling, general and administrative expenses | Operating profit | Provision for income taxes | Net income attributable to PepsiCo | Net income attributable to PepsiCo per common share - diluted | Effective tax rate | |||||||||||||||||||||||
Reported, GAAP Measure | $ | 12,754 | $ | 15,386 | $ | 10,654 | $ | 4,697 | $ | 1,073 | $ | 3,201 | $ | 2.14 | 25.0 | % | ||||||||||||||
Items Affecting Comparability | ||||||||||||||||||||||||||||||
Commodity mark-to-market net impact | (16 | ) | 16 | 54 | (38 | ) | (12 | ) | (26 | ) | (0.02 | ) | ||||||||||||||||||
Restructuring and impairment charges (a) | — | — | (61 | ) | 61 | 13 | 48 | 0.03 | ||||||||||||||||||||||
Core, Non-GAAP Measure (b) | $ | 12,738 | $ | 15,402 | $ | 10,647 | $ | 4,720 | $ | 1,074 | $ | 3,223 | $ | 2.15 | 24.9 | % |
(a) | Restructuring and impairment charges for the 24 weeks ended June 11, 2016 include costs associated with the 2014 Multi-Year Productivity Plan. Restructuring and impairment charges for the 24 weeks ended June 13, 2015 include costs associated with the 2014 and 2012 Multi-Year Productivity Plans. See A-14 for a discussion of these plans. |
(b) | Core results are financial measures that are not in accordance with GAAP and exclude the above items affecting comparability. See A-14 through A-15 for a discussion of each of these adjustments. |
GAAP Measure | Items Affecting Comparability | Non-GAAP Measure | |||||||||||||
Reported | Core (a) | ||||||||||||||
Operating Profit | 12 Weeks Ended 6/11/2016 | Commodity mark-to-market net impact | Restructuring and impairment charges (b) | 12 Weeks Ended 6/11/2016 | |||||||||||
Frito-Lay North America | $ | 1,083 | $ | — | $ | 3 | $ | 1,086 | |||||||
Quaker Foods North America | 146 | — | 1 | 147 | |||||||||||
North America Beverages | 881 | — | 6 | 887 | |||||||||||
Latin America | 242 | — | 28 | 270 | |||||||||||
Europe Sub-Saharan Africa | 337 | — | 8 | 345 | |||||||||||
Asia, Middle East and North Africa | 383 | — | 2 | 385 | |||||||||||
Division Operating Profit | 3,072 | — | 48 | 3,120 | |||||||||||
Corporate Unallocated | (108 | ) | (100 | ) | 1 | (207 | ) | ||||||||
Total Operating Profit | $ | 2,964 | $ | (100 | ) | $ | 49 | $ | 2,913 |
GAAP Measure | Items Affecting Comparability | Non-GAAP Measure | |||||||||||||
Reported | Core (a) | ||||||||||||||
Operating Profit | 12 Weeks Ended 6/13/2015 | Commodity mark-to-market net impact | Restructuring and impairment charges (b) | 12 Weeks Ended 6/13/2015 | |||||||||||
Frito-Lay North America | $ | 1,007 | $ | — | $ | 2 | $ | 1,009 | |||||||
Quaker Foods North America | 132 | — | — | 132 | |||||||||||
North America Beverages | 833 | — | 7 | 840 | |||||||||||
Latin America | 355 | — | 5 | 360 | |||||||||||
Europe Sub-Saharan Africa | 350 | — | 7 | 357 | |||||||||||
Asia, Middle East and North Africa | 373 | — | 3 | 376 | |||||||||||
Division Operating Profit | 3,050 | — | 24 | 3,074 | |||||||||||
Corporate Unallocated | (150 | ) | (39 | ) | 1 | (188 | ) | ||||||||
Total Operating Profit | $ | 2,900 | $ | (39 | ) | $ | 25 | $ | 2,886 |
(a) | Core results are financial measures that are not in accordance with GAAP and exclude the above items affecting comparability. See A-14 through A-15 for a discussion of each of these adjustments. |
(b) | Restructuring and impairment charges for the 12 weeks ended June 11, 2016 include costs associated with the 2014 Multi-Year Productivity Plan. Restructuring and impairment charges for the 12 weeks ended June 13, 2015 include costs associated with the 2014 and 2012 Multi-Year Productivity Plans. See A-14 for a discussion of these plans. |
GAAP Measure | Items Affecting Comparability | Non-GAAP Measure | |||||||||||||||||
Reported | Core (a) | ||||||||||||||||||
Operating Profit | 24 Weeks Ended 6/11/2016 | Commodity mark-to-market net impact | Restructuring and impairment charges (b) | Charge related to the transaction with Tingyi | 24 Weeks Ended 6/11/2016 | ||||||||||||||
Frito-Lay North America | $ | 2,101 | $ | — | $ | (1 | ) | $ | — | $ | 2,100 | ||||||||
Quaker Foods North America | 312 | — | 1 | — | 313 | ||||||||||||||
North America Beverages | 1,366 | — | 13 | — | 1,379 | ||||||||||||||
Latin America | 417 | — | 28 | — | 445 | ||||||||||||||
Europe Sub-Saharan Africa | 404 | — | 27 | — | 431 | ||||||||||||||
Asia, Middle East and North Africa | 235 | — | 7 | 373 | 615 | ||||||||||||||
Division Operating Profit | 4,835 | — | 75 | 373 | 5,283 | ||||||||||||||
Corporate Unallocated | (252 | ) | (146 | ) | 4 | — | (394 | ) | |||||||||||
Total Operating Profit | $ | 4,583 | $ | (146 | ) | $ | 79 | $ | 373 | $ | 4,889 |
GAAP Measure | Items Affecting Comparability | Non-GAAP Measure | |||||||||||||
Reported | Core (a) | ||||||||||||||
Operating Profit | 24 Weeks Ended 6/13/2015 | Commodity mark-to-market net impact | Restructuring and impairment charges (b) | 24 Weeks Ended 6/13/2015 | |||||||||||
Frito-Lay North America | $ | 1,927 | $ | — | $ | 8 | $ | 1,935 | |||||||
Quaker Foods North America | 231 | — | 1 | 232 | |||||||||||
North America Beverages | 1,286 | — | 15 | 1,301 | |||||||||||
Latin America | 574 | — | 6 | 580 | |||||||||||
Europe Sub-Saharan Africa | 462 | — | 19 | 481 | |||||||||||
Asia, Middle East and North Africa | 603 | — | 5 | 608 | |||||||||||
Division Operating Profit | 5,083 | — | 54 | 5,137 | |||||||||||
Corporate Unallocated | (386 | ) | (38 | ) | 7 | (417 | ) | ||||||||
Total Operating Profit | $ | 4,697 | $ | (38 | ) | $ | 61 | $ | 4,720 |
(a) | Core results are financial measures that are not in accordance with GAAP and exclude the above items affecting comparability. See A-14 through A-15 for a discussion of each of these adjustments. |
(b) | Restructuring and impairment charges for the 24 weeks ended June 11, 2016 include costs associated with the 2014 Multi-Year Productivity Plan. Restructuring and impairment charges for the 24 weeks ended June 13, 2015 include costs associated with the 2014 and 2012 Multi-Year Productivity Plans. See A-14 for a discussion of these plans. |
12 Weeks Ended | 24 Weeks Ended | ||||||
6/11/2016 | 6/11/2016 | ||||||
Reported Gross Margin Growth | 117 | bps | 137 | bps | |||
Commodity Mark-to-Market Net Impact | (40 | ) | (36 | ) | |||
Core Gross Margin Growth | 77 | bps | 101 | bps |
12 Weeks Ended | 24 Weeks Ended | ||||||
6/11/2016 | 6/11/2016 | ||||||
Reported Operating Margin Growth | 104 | bps | 12 | bps | |||
Commodity Mark-to-Market Net Impact | (40 | ) | (40 | ) | |||
Restructuring and Impairment Charges | 16 | 8 | |||||
Charge Related to the Transaction with Tingyi | — | 137 | |||||
Core Operating Margin Growth | 80 | bps | 116 | bps |
2016 Guidance | ||||
Net Cash Provided by Operating Activities | $ | ~ | 10 | |
Net Capital Spending | ~ | 3 | ||
Free Cash Flow | ~ | 7 | ||
Discretionary Pension Contributions | ~ | — | ||
Net Cash Tax Benefit Related to Discretionary Pension Contributions | ~ | — | ||
Payments Related to Restructuring Charges | ~ | — | ||
Net Cash Tax Benefit Related to Restructuring Charges | ~ | — | ||
Free Cash Flow Excluding Certain Items | $ | ~ | 7 |
Year Ended | |||
12/26/2015 | |||
Reported Diluted EPS | $ | 3.67 | |
Commodity Mark-to-Market Net Impact | — | ||
Restructuring and Impairment Charges | 0.12 | ||
Pension-Related Settlement Benefits | (0.03 | ) | |
Charge Related to the Transaction with Tingyi | 0.05 | ||
Venezuela Impairment Charges | 0.91 | ||
Tax Benefit | (0.15 | ) | |
Core Diluted EPS | $ | 4.57 |