Document
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 13, 2020
PepsiCo, Inc.
(Exact name of registrant as specified in its charter)
 
North Carolina
 
1-1183
 
13-1584302
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
700 Anderson Hill Road, Purchase, New York 10577
(Address of principal executive offices)
Registrant’s telephone number, including area code: (914253-2000
N/A
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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))

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
2.500% Senior Notes Due 2022
 
PEP22a
 
The Nasdaq Stock Market LLC
1.750% Senior Notes Due 2021
 
PEP21a
 
The Nasdaq Stock Market LLC
2.625% Senior Notes Due 2026
 
PEP26
 
The Nasdaq Stock Market LLC
0.875% Senior Notes Due 2028
 
PEP28
 
The Nasdaq Stock Market LLC
0.750% Senior Notes Due 2027
 
PEP27
 
The Nasdaq Stock Market LLC
1.125% Senior Notes Due 2031
 
PEP31
 
The Nasdaq Stock Market LLC
0.875% Senior Notes Due 2039
 
PEP39
 
The Nasdaq Stock Market LLC







Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ¨






Item 2.02. Results of Operations and Financial Condition.
The information in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that Section and shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.
Attached as Exhibit 99.1 and incorporated by reference into this Item 2.02 is a copy of the press release issued by PepsiCo, Inc. (“PepsiCo”), dated February 13, 2020, reporting PepsiCo’s financial results for the 16 and 52 weeks ended December 28, 2019.
During the fourth quarter of 2019, we realigned our Europe Sub-Saharan Africa (ESSA) and Asia, Middle East and North Africa (AMENA) reportable segments to be consistent with a recent strategic realignment of our organizational structure and how our Chief Executive Officer assesses the performance of, and allocates resources to, our reportable segments. As a result, our beverage, food and snack businesses in North Africa, the Middle East and South Asia that were part of our former AMENA segment and our businesses in Sub-Saharan Africa that were part of our former ESSA segment are now reported together as our Africa, Middle East and South Asia (AMESA) segment. The remaining beverage, food and snack businesses that were part of our former AMENA segment are now reported together as our Asia Pacific, Australia and New Zealand and China region (APAC) segment and our beverage, food and snack businesses in Europe are now reported as our Europe segment.
These changes did not impact our Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), PepsiCo Beverages North America (PBNA), formerly named North America Beverages, or Latin America (LatAm) reportable segments or our consolidated financial results.
Our historical segment reporting presented in this report has been retrospectively revised to reflect the new organizational structure.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No.
 
Description
  
104
 
The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
PEPSICO, INC.
 
 
 
Date: February 13, 2020
By:
/s/ David Yawman
 
Name:
David Yawman
 
Title:
Executive Vice President, Government Affairs, General Counsel and Corporate Secretary
 
 
 



Exhibit



Exhibit 99.1
http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=13368394&doc=8
PepsiCo Reports Fourth-Quarter and Full-Year 2019 Results; Provides 2020 Financial Outlook
Reported (GAAP) Fourth-Quarter and Full-Year 2019 Results
 
Fourth-Quarter
Full-Year
Net revenue growth
5.7%
3.9%
Foreign exchange impact on net revenue
—%
(2)%
Earnings per share (EPS)
$1.26
$5.20
EPS change
(74)%
(41)%
Foreign exchange impact on EPS
—%
(1)%
Organic/Core (non-GAAP)1 Fourth-Quarter and Full-Year 2019 Results
 
Fourth-Quarter
Full-Year
Organic revenue growth
4.3%
4.5%
Core EPS
$1.45
$5.53
Core constant currency EPS change
(2.5)%
(1)%
PURCHASE, N.Y. - February 13, 2020 - PepsiCo, Inc. (NASDAQ: PEP) today reported results for the fourth quarter and full-year 2019.

“We are pleased with our performance for 2019 as we met or exceeded each of the financial goals we outlined at the beginning of the year. Our revenue growth accelerated for the full year as we embarked on our strategy to win with purpose by becoming Faster, Stronger, and Better. We increased brand support to become more locally relevant and consumer-centric, we strengthened our go-to-market execution to enhance our customer relationships, and we embraced a new set of initiatives to help build a more sustainable food system,” said Chairman and CEO Ramon Laguarta.

“For 2020, we expect to deliver 4% organic revenue growth and 7% core constant currency EPS growth. We will continue to invest in our business and strive to develop advantaged capabilities that will fortify our business for the long-term.”

1 Please refer to the Glossary for the definitions of non-GAAP financial measures including “Organic,” “Core” and “Constant Currency” and to “Guidance and Outlook” for additional information regarding PepsiCo’s full-year 2020 growth objectives and financial targets. PepsiCo provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange and mark-to-market adjustments. Please refer to PepsiCo’s Form 10-K filed with the SEC on February 13, 2020 (2019 Form 10-K) for additional information regarding PepsiCo’s financial results for the year ended December 28, 2019. Please refer to the 2019 Form 10-K for information regarding changes to our organizational structure during the fourth quarter 2019, as a result of which our former Europe Sub-Saharan Africa (ESSA) segment has been realigned as Europe and no longer includes Sub-Saharan Africa and our former Asia, Middle East and North Africa (AMENA) segment has been realigned into two segments: Africa, Middle East and South Asia (AMESA) and Asia Pacific, Australia and New Zealand and China region (APAC). Our historical segment reporting presented herein has been retrospectively revised to reflect the new organizational structure.

1




Summary Fourth-Quarter 2019 Performance
      Revenue
 
 Volume
 
GAAP Reported
% Change
Percentage Point Impact
Organic
% Change
 
Organic Volume % Change
 
Foreign Exchange Translation
Acquisitions, Divestitures and Other Structural Changes
 
Food/Snacks
Beverages
FLNA
3
3
 
2
 
QFNA
 
1
 
PBNA
4
(1)
3
 
 
LatAm
5
1
6
 
(1)
3
Europe
15
(9)
6
 
2
2
AMESA
3
(1)
6
8
 
9
6
APAC
8
1
9
 
7
4
Total
6
(1.5)
4
 
2
3
 
Operating Profit and EPS
 
GAAP Reported
% Change
Percentage Point Impact
Core Constant Currency
 % Change
 
 Items Affecting Comparability
Foreign Exchange Translation
FLNA
3
(2)
1
QFNA
(21)
(2)
(24)
PBNA
5
(12)
(7)
LatAm
16
(3)
1
14
Europe
28
(21)
7
AMESA
(11)
9
(2)
APAC
3
(9)
(1)
(7)
Corporate unallocated expenses
(19)
36
17
Total
11
(14)
(3)
 
 
 
 
 
EPS
(74)
71
(2.5)
Note: Rows may not sum due to rounding.
Organic revenue and core constant currency results are non-GAAP financial measures. Please refer to the reconciliation of GAAP and non-GAAP information in the attached exhibits and to the Glossary for definitions of “Organic,” “Core” and “Constant Currency.”

2




Discussion of Fourth-Quarter 2019 Reported Division Results:
In addition to the reported net revenue performance as set out in the tables on pages 2 and A-7, reported operating results were driven by the following:
Frito-Lay North America (FLNA)
Operating profit increased 3%, primarily reflecting productivity savings and net revenue growth, partially offset by certain operating cost increases and higher advertising and marketing expenses. Additionally, a gain on the sale of an asset contributed 2 percentage points to operating profit growth.
Quaker Foods North America (QFNA)
Operating profit decreased 21%, primarily reflecting certain operating cost increases, higher advertising and marketing expenses, unfavorable net pricing and a 4-percentage-point impact of higher commodity costs. These impacts were partially offset by productivity savings, favorable mix and volume growth.
PepsiCo Beverages North America (PBNA)
Operating profit increased 5%, primarily driven by a 12-percentage-point impact of lower restructuring and impairment charges. Net revenue growth and productivity savings contributed to operating profit performance and were partially offset by certain operating cost increases, an 8-percentage-point impact of higher commodity costs and higher advertising and marketing expenses. Additionally, higher current-year gains on asset sales contributed 2.5 percentage points to operating profit performance.
Latin America (LatAm)
Operating profit increased 16%, primarily reflecting productivity savings and net revenue growth, partially offset by certain operating cost increases and a 4-percentage-point impact of a prior-year insurance settlement recovery related to the 2017 earthquake in Mexico. Lower restructuring and impairment charges contributed 3 percentage points to operating profit growth.
Europe
Operating profit increased 28%, primarily reflecting net revenue growth, productivity savings and a 14-percentage-point net impact of our SodaStream International Ltd. (SodaStream) acquisition. These impacts were partially offset by certain operating cost increases, higher advertising and marketing expenses and a 14-percentage-point impact of a prior-year gain on the refranchising of our entire beverage bottling operations and snack distribution operations in Czech Republic, Hungary and Slovakia (CHS).
Africa, Middle East and South Asia (AMESA)
Operating profit decreased 11%, primarily driven by certain operating cost increases, higher advertising and marketing expenses and a 5-percentage-point impact of higher commodity costs. These impacts were partially offset by productivity savings and net revenue growth. Additionally, a prior-year gain on the sale of an asset negatively impacted operating profit performance by 8 percentage points. Merger and integration charges and higher restructuring and impairment charges negatively impacted operating profit performance by 9 percentage points.
Asia Pacific, Australia and New Zealand and China Region (APAC)
Operating profit increased 3%, primarily driven by a 9-percentage-point impact of lower restructuring and impairment charges. Additionally, certain operating cost increases and higher advertising and marketing expenses negatively impacted operating profit performance and were partially offset by volume growth and productivity savings.

3




Summary Full-Year 2019 Performance
 
   Revenue
 
 Volume
 
GAAP Reported
% Change
Percentage Point Impact
Organic
% Change
 
Organic Volume % Change
 
Foreign Exchange Translation
Acquisitions, Divestitures and Other Structural Changes
 
Food/Snacks
Beverages
FLNA
4.5
4.5
 
1
 
QFNA
1
1
 
 
PBNA
3
(1)
3
 
 
(1)
LatAm
3
4
7
 
4
Europe
7
5
(6)
5.5
 
1
AMESA
2
4
6
 
7
4
APAC
4.5
3
2
9
 
6
4
Total
4
2
(1)
4.5
 
2
2
 
Operating Profit and EPS
 
GAAP Reported
% Change
Percentage Point Impact
Core Constant Currency
 % Change
 
 Items Affecting Comparability
Foreign Exchange Translation
FLNA
5
5
QFNA
(15)
(0.5)
(15)
PBNA
(4)
(1)
(6)
LatAm
9
2
2
13
Europe
6
2
5
13
AMESA
1.5
4
2.5
8
APAC
(23)
6
2
(16)
Corporate unallocated expenses
(6)
20
14
Total
2
(2)
1
1
 
 
 
 
 
EPS
(41)
38
1
(1)
Note: Rows may not sum due to rounding.
Organic revenue and core constant currency results are non-GAAP financial measures. Please refer to the reconciliation of GAAP and non-GAAP information in the attached exhibits and to the Glossary for definitions of “Organic,” “Core” and “Constant Currency.”

4




Discussion of Full-Year 2019 Reported Division Results:
In addition to the reported net revenue performance as set out in the tables on pages 4 and A-7, reported operating results were driven by the following:
FLNA
Operating profit grew 5%, primarily reflecting the net revenue growth and productivity savings, partially offset by certain operating cost increases and higher advertising and marketing expenses. Additionally, a prior-year bonus extended to certain U.S. employees in connection with the Tax Cuts and Jobs Act (TCJ Act) contributed 1 percentage point to operating profit growth.
QFNA
Operating profit decreased 15%, reflecting certain operating cost increases, a 5-percentage-point impact of higher commodity costs, and higher advertising and marketing expenses. These impacts were partially offset by productivity savings.
PBNA
Operating profit decreased 4%, reflecting certain operating cost increases, higher advertising and marketing expenses, an 8-percentage-point impact of higher commodity costs and the volume decline. These impacts were partially offset by the effective net pricing and productivity savings. Year-over-year gains on asset sales negatively contributed 1 percentage point to operating profit performance. A gain associated with an insurance recovery positively contributed 1 percentage point to current-year operating profit performance and was offset by less-favorable insurance adjustments compared to the prior year, which negatively impacted the current-year operating profit performance by 1 percentage point. Additionally, a prior-year bonus extended to certain U.S. employees in connection with the TCJ Act positively contributed 2 percentage points to operating profit performance.
LatAm
Operating profit increased 9%, reflecting the effective net pricing and productivity savings, partially offset by certain operating cost increases and a 10-percentage-point impact of higher commodity costs largely due to transaction-related foreign exchange. Unfavorable foreign exchange and higher restructuring and impairment charges each reduced operating profit growth by 2 percentage points.
Europe
Operating profit increased 6%, reflecting the net revenue growth, productivity savings and a 10-percentage-point net impact of our SodaStream acquisition. These impacts were partially offset by certain operating cost increases, a 10-percentage-point impact of higher commodity costs largely due to transaction-related foreign exchange, higher advertising and marketing expenses, and a 4-percentage-point impact of a prior-year gain on the refranchising of our entire beverage bottling operations and snack distribution operations in CHS. Unfavorable foreign exchange reduced operating profit growth by 5 percentage points.
AMESA
Operating profit increased 1.5%, reflecting productivity savings, the volume growth and the effective net pricing. These impacts were partially offset by certain operating cost increases, a 5-percentage-point impact of higher commodity costs and higher advertising and marketing expenses. Higher restructuring and impairment charges and unfavorable foreign exchange reduced operating profit growth by 3 percentage points and 2.5 percentage points, respectively.

5




APAC
Operating profit decreased 23%, primarily reflecting a 23-percentage-point impact of the gain on the prior-year refranchising of a portion of our beverage business in Thailand. Additionally, certain operating cost increases and higher advertising and marketing expenses negatively impacted operating profit performance. These impacts were partially offset by the net revenue growth and productivity savings. Higher restructuring and impairment charges negatively impacted operating profit performance by 6 percentage points.

6




Dividend Increase
The Company today announced a 7 percent increase in its annualized dividend to $4.09 per share from $3.82 per share, effective with the dividend expected to be paid in June 2020. This represents the Company’s 48th consecutive annual dividend per share increase.
Guidance and Outlook
The Company provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange translation and commodity mark-to-market impacts.
For 2020, the Company expects:
Full-year organic revenue growth to be 4 percent.
A core effective tax rate of approximately 21 percent.
An increase in core constant currency EPS of 7 percent.
Approximately $11 billion in cash from operating activities and free cash flow of approximately $6 billion, which assumes net capital spending of approximately $5 billion.
Total cash returns to shareholders of approximately $7.5 billion, comprised of dividends of $5.5 billion and share repurchases of $2 billion.
Applying current market consensus rates implies approximately 1-percentage-point foreign exchange translation headwind to reported net revenue and core EPS growth. This assumption and the guidance above imply 2020 core earnings per share of $5.88, a 6 percent increase compared to 2019 core earnings per share of $5.53.
Conference Call:
At 7:45 a.m. (Eastern time) today, the Company will host a conference call with investors and financial analysts to discuss fourth quarter and full-year 2019 results and the outlook for 2020. Further details will be accessible on the Company’s website at www.pepsico.com/investors.

Contacts:
Investors
 
Media
 
Investor Relations
 
Communications
 
investor@pepsico.com
 
pepsicomediarelations@pepsico.com
 
 
 
 
 
 
 
 

7




PepsiCo, Inc. and Subsidiaries
Consolidated Statement of Income
(in millions except per share amounts)
 
 
(Unaudited)
 
 
 
 
 
Quarter Ended
 
Year Ended
 
12/28/2019

 
12/29/2018

 
12/28/2019

 
12/29/2018

Net Revenue
$
20,640

 
$
19,524

 
$
67,161

 
$
64,661

Cost of sales
9,346

 
8,936

 
30,132

 
29,381

Gross profit
11,294

 
10,588

 
37,029

 
35,280

Selling, general and administrative expenses
8,595

 
8,157

 
26,738

 
25,170

Operating Profit
2,699

 
2,431

 
10,291

 
10,110

Other pension and retiree medical benefits (expense)/income
(207
)
 
67

 
(44
)
 
298

Interest expense
(345
)
 
(621
)
 
(1,135
)
 
(1,525
)
Interest income and other
61

 
58

 
200

 
306

Income before income taxes
2,208

 
1,935

 
9,312

 
9,189

Provision for/(benefit from) income taxes
430

 
(4,932
)
 
1,959

 
(3,370
)
Net income
1,778

 
6,867

 
7,353

 
12,559

Less: Net income attributable to noncontrolling interests
12

 
13

 
39

 
44

Net Income Attributable to PepsiCo
$
1,766

 
$
6,854

 
$
7,314

 
$
12,515

 
 
 
 
 
 
 
 
Diluted
 
 
 
 
 
 
 
Net income attributable to PepsiCo per common share
$
1.26

 
$
4.83

 
$
5.20

 
$
8.78

Weighted-average common shares outstanding
1,401

 
1,420

 
1,407

 
1,425



A - 1




PepsiCo, Inc. and Subsidiaries
Supplemental Financial Information
(in millions)
 
 
(Unaudited)
 
 
 
 
 
Quarter Ended
 
Year Ended
 
12/28/2019

 
12/29/2018

 
12/28/2019

 
12/29/2018

Net Revenue
 
 
 
Frito-Lay North America
$
5,148

 
$
5,001

 
$
17,078

 
$
16,346

Quaker Foods North America
772

 
770

 
2,482

 
2,465

PepsiCo Beverages North America
6,255

 
6,008

 
21,730

 
21,072

Latin America
2,542

 
2,419

 
7,573

 
7,354

Europe
3,886

 
3,388

 
11,728

 
10,973

Africa, Middle East and South Asia
1,118

 
1,090

 
3,651

 
3,657

Asia Pacific, Australia and New Zealand and China Region
919

 
848

 
2,919

 
2,794

Total
$
20,640

 
$
19,524

 
$
67,161

 
$
64,661

 
 
 
 
 
 
 
 
Operating Profit 
 
 
 
 
 
 
 
Frito-Lay North America
$
1,564

 
$
1,517

 
$
5,258

 
$
5,008

Quaker Foods North America
153

 
194

 
544

 
637

PepsiCo Beverages North America
460

 
438

 
2,179

 
2,276

Latin America
356

 
307

 
1,141

 
1,049

Europe
418

 
327

 
1,327

 
1,256

Africa, Middle East and South Asia
120

 
133

 
671

 
661

Asia Pacific, Australia and New Zealand and China Region
89

 
87

 
477

 
619

Corporate unallocated expenses
(461
)
 
(572
)
 
(1,306
)
 
(1,396
)
Total
$
2,699

 
$
2,431

 
$
10,291

 
$
10,110



A - 2




PepsiCo, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
(in millions)

 
Year Ended
 
12/28/2019

 
12/29/2018

Operating Activities
 
 
 
Net income
$
7,353

 
$
12,559

Depreciation and amortization
2,432

 
2,399

Share-based compensation expense
237

 
256

Restructuring and impairment charges
370

 
308

Cash payments for restructuring charges
(350
)
 
(255
)
Pension and retiree medical plan expenses
519

 
221

Pension and retiree medical plan contributions
(716
)
 
(1,708
)
Deferred income taxes and other tax charges and credits
453

 
(531
)
Net tax related to the TCJ Act
(8
)
 
(28
)
Tax payments related to the TCJ Act
(423
)
 
(115
)
Other net tax benefits related to international reorganizations
(2
)
 
(4,347
)
Change in assets and liabilities:
 
 
 
Accounts and notes receivable
(650
)
 
(253
)
Inventories
(190
)
 
(174
)
Prepaid expenses and other current assets
(87
)
 
9

Accounts payable and other current liabilities
735

 
882

Income taxes payable
(287
)
 
448

Other, net
263

 
(256
)
Net Cash Provided by Operating Activities
9,649

 
9,415

 
 
 
 
Investing Activities
 
 
 
Capital spending
(4,232
)
 
(3,282
)
Sales of property, plant and equipment
170

 
134

Acquisition of SodaStream, net of cash and cash equivalents acquired
(1,939
)
 
(1,197
)
Other acquisitions and investments in noncontrolled affiliates
(778
)
 
(299
)
Divestitures
253

 
505

Short-term investments, by original maturity:
 
 
 
More than three months - purchases

 
(5,637
)
More than three months - maturities
16

 
12,824

More than three months - sales
62

 
1,498

Three months or less, net
19

 
16

Other investing, net
(8
)
 
2

Net Cash (Used for)/Provided by Investing Activities
(6,437
)
 
4,564

 
 
 
 
Financing Activities
 
 
 
Proceeds from issuances of long-term debt
4,621

 

Payments of long-term debt
(3,970
)
 
(4,007
)
Debt redemption/cash tender and exchange offers
(1,007
)
 
(1,589
)
Short-term borrowings, by original maturity:
 
 
 
More than three months - proceeds
6

 
3

More than three months - payments
(2
)
 
(17
)
Three months or less, net
(3
)
 
(1,352
)
Cash dividends paid
(5,304
)
 
(4,930
)
Share repurchases - common
(3,000
)
 
(2,000
)
Share repurchases - preferred

 
(2
)
Proceeds from exercises of stock options
329

 
281

Withholding tax payments on restricted stock units, performance stock units and PepsiCo equity performance units converted
(114
)
 
(103
)
Other financing
(45
)
 
(53
)
Net Cash Used for Financing Activities
(8,489
)
 
(13,769
)
Effect of exchange rate changes on cash and cash equivalents and restricted cash
78

 
(98
)
Net (Decrease)/Increase in Cash and Cash Equivalents and Restricted Cash
(5,199
)
 
112

Cash and Cash Equivalents and Restricted Cash, Beginning of Year
10,769

 
10,657

Cash and Cash Equivalents and Restricted Cash, End of Year
$
5,570

 
$
10,769


A - 3




PepsiCo, Inc. and Subsidiaries
Consolidated Balance Sheet
(in millions except per share amounts)

 
12/28/2019

 
12/29/2018

ASSETS
 
 
 
Current Assets
 
 
 
Cash and cash equivalents
$
5,509

 
$
8,721

Short-term investments
229

 
272

Restricted cash

 
1,997

Accounts and notes receivable, net
7,822

 
7,142

Inventories:
 
 
 
Raw materials and packaging
1,395

 
1,312

Work-in-process
200

 
178

Finished goods
1,743

 
1,638

 
3,338

 
3,128

Prepaid expenses and other current assets
747

 
633

Total Current Assets
17,645

 
21,893

Property, Plant and Equipment, net
19,305

 
17,589

Amortizable Intangible Assets, net
1,433

 
1,644

Goodwill
15,501

 
14,808

Other indefinite-lived intangible assets
14,610

 
14,181

Indefinite-Lived Intangible Assets
30,111

 
28,989

Investments in Noncontrolled Affiliates
2,683

 
2,409

Deferred Income Taxes
4,359

 
4,364

Other Assets
3,011

 
760

Total Assets
$
78,547

 
$
77,648

 
 
 
 
LIABILITIES AND EQUITY
 
 
 
Current Liabilities
 
 
 
Short-term debt obligations
$
2,920

 
$
4,026

Accounts payable and other current liabilities
17,541

 
18,112

Total Current Liabilities
20,461

 
22,138

Long-Term Debt Obligations
29,148

 
28,295

Deferred Income Taxes
4,091

 
3,499

Other Liabilities
9,979

 
9,114

Total Liabilities
63,679

 
63,046

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: 1,391 and 1,409 shares, respectively)
23

 
23

Capital in excess of par value
3,886

 
3,953

Retained earnings
61,946

 
59,947

Accumulated other comprehensive loss
(14,300
)
 
(15,119
)
Repurchased common stock, in excess of par value (476 and 458 shares, respectively)
(36,769
)
 
(34,286
)
Total PepsiCo Common Shareholders’ Equity
14,786

 
14,518

Noncontrolling interests
82

 
84

Total Equity
14,868

 
14,602

Total Liabilities and Equity
$
78,547

 
$
77,648


A - 4




Non-GAAP Measures
In discussing financial results and guidance, the Company refers to the following measures which are not in accordance with U.S. Generally Accepted Accounting Principles (GAAP): core results, core constant currency results, free cash flow and organic results. We use these non-GAAP financial measures internally to make operating and strategic decisions, including the preparation of our annual operating plan, evaluation of our overall business performance and as a factor in determining compensation for certain employees. We believe presenting non-GAAP financial measures provides additional information to facilitate comparison of our historical operating results and trends in our underlying operating results, and provides additional transparency on how we evaluate our business. We also believe presenting these measures allows investors to view our performance using the same measures that we use in evaluating our financial and business performance and trends.
We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Examples of items for which we may make adjustments include: amounts related to mark-to-market gains or losses (non-cash); charges related to restructuring plans; amounts associated with mergers, acquisitions, divestitures and other structural changes; pension and retiree medical related items; charges or adjustments related to the enactment of new laws, rules or regulations, such as significant tax law changes; amounts related to the resolution of tax positions; tax benefits related to reorganizations of our operations; debt redemptions, cash tender or exchange offers; asset impairments (non-cash); and remeasurements of net monetary assets. See below for a description of adjustments to our U.S. GAAP financial measures included herein. 
Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with U.S. GAAP. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented by other companies.
Glossary
We use the following definitions when referring to our non-GAAP financial measures, which may not be the same as or comparable to similar measures presented by other companies:
Acquisitions and divestitures: All mergers and acquisitions activity, including the impact of acquisitions, divestitures and changes in ownership or control in consolidated subsidiaries and nonconsolidated equity investees.
Beverage volume: Volume shipped to retailers and independent distributors from both PepsiCo and our independent bottlers.
Bottler case sales (BCS): Measure of physical beverage volume shipped to retailers and independent distributors from both PepsiCo and our independent bottlers.
Concentrate shipments and equivalents (CSE): Measure of our physical beverage volume shipments to independent bottlers, retailers and independent distributors. 
Constant currency: Financial results assuming constant foreign currency exchange rates used for translation based on the rates in effect for the comparable prior-year period. In order to compute our constant currency results, we multiply or divide, as appropriate, our current-year U.S. dollar results by the current-year average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior year average foreign exchange rates.
Core: Core results are non-GAAP financial measures which exclude certain items from our historical results. For further information regarding these excluded items for the periods presented, refer to “Items Affecting Comparability” in “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2019 Form 10-K. For the periods presented, core results exclude the following items:
Mark-to-market net impact
Mark-to-market net gains and losses on commodity derivatives in corporate unallocated expenses. These gains and losses are subsequently reflected in division results when the divisions recognize the cost of the underlying commodity in operating profit.
Restructuring and impairment charges
Expenses related to the multi-year productivity plans publicly announced in 2019 and 2014.
Inventory fair value adjustments and merger and integration charges
Charges primarily related to our acquisition of SodaStream, including incremental costs related to fair value adjustments to the acquired inventory, as well as merger and integration charges.

A - 5




Pension-related settlement charges
Settlement charges related to the purchase of a group annuity contract and settlement charges related to one-time lump sum payments to certain former employees who had vested benefits.
Net tax related to the Tax Cuts and Jobs Act
During the fourth quarter of 2017, the TCJ Act was enacted in the United States. Among its many provisions, the TCJ Act imposed a mandatory one-time transition tax on undistributed international earnings and reduced the U.S. corporate income tax rate from 35% to 21%, effective January 1, 2018. In periods subsequent to the enactment of the TCJ Act, we recognized certain tax benefits and/or expenses associated therewith.
Our provisional measurement period ended in the fourth quarter of 2018 and while our accounting for the recorded impact of the TCJ Act was deemed to be complete, additional guidance issued by the IRS impacted, and may continue to impact, our recorded amounts after December 29, 2018.
Other net tax benefits
In the year ended December 29, 2018, other net tax benefits related to the reorganization of our international operations and non-cash tax benefits associated with both the conclusion of certain international tax audits and our agreement with the IRS resolving all open matters related to the audits of taxable years 2012 and 2013.
Charges related to cash tender and exchange offers
In the year ended December 29, 2018, interest expense in connection with our cash tender and exchange offers, primarily representing the tender price paid over the carrying value of the tendered notes.
Effective net pricing: Reflects the year-over-year impact of discrete pricing actions, sales incentive activities and mix resulting from selling varying products in different package sizes and in different countries.
Free cash flow: Net cash provided by operating activities less capital spending, plus sales of property, plant and equipment. Since net capital spending is essential to our product innovation initiatives and maintaining our operational capabilities, we believe that it is a recurring and necessary use of cash. As such, we believe investors should also consider net capital spending when evaluating our cash from operating activities. We use free cash flow primarily for financing activities, including debt repayments, dividends and share repurchases. Free cash flow is not a measure of cash available for discretionary expenditures since we have certain non-discretionary obligations such as debt service that are not deducted from the measure.
Net capital spending: Capital spending less cash proceeds from sales of property, plant and equipment.
Organic: A measure that adjusts for impacts of acquisitions, divestitures and other structural changes, foreign exchange translation and, when applicable, the impact of the 53rd reporting week.
2020 guidance
Our 2020 organic revenue growth guidance excludes the impact of acquisitions, divestitures and other structural changes and foreign exchange translation. Our 2020 core effective tax rate guidance and 2020 core constant currency EPS growth guidance exclude the mark-to-market net impact included in corporate unallocated expenses and restructuring and impairment charges. Our 2020 core constant currency EPS growth guidance also excludes the impact of foreign exchange translation. We are unable to reconcile our full year projected 2020 organic revenue growth to our full year projected 2020 reported net revenue growth because we are unable to predict the 2020 impact of foreign exchange due to the unpredictability of future changes in foreign exchange rates and because we are unable to predict the occurrence or impact of any acquisitions, divestitures or other structural changes. We are also not able to reconcile our full year projected 2020 core effective tax rate to our full year projected 2020 reported effective tax rate and our full year projected 2020 core constant currency EPS growth to our full year projected 2020 reported EPS growth because we are unable to predict the 2020 impact of foreign exchange or the mark-to-market net impact on commodity derivatives due to the unpredictability of future changes in foreign exchange rates and commodity prices. Therefore, we are unable to provide a reconciliation of these measures.

A - 6




PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information
Organic Revenue Growth Rates
Quarter and Year Ended December 28, 2019
(unaudited)
 
Quarter Ended 12/28/2019
 
 
 
Impact of
 
 
 
Impact of
Net Revenue Year over Year % Change
Reported
% Change, GAAP Measure
 
Foreign exchange translation
 
Acquisitions and divestitures
 
Organic
% Change, Non-GAAP Measure(a)
 
Volume(b)
 
Effective net pricing
Frito-Lay North America
3
%
 

 

 
3
%
 
2

 
1

Quaker Foods North America
%
 

 

 
%
 
1

 
(1
)
PepsiCo Beverages North America
4
%
 

 
(1
)
 
3
%
 

 
3.5

Latin America
5
%
 
1

 

 
6
%
 

 
7

Europe
15
%
 

 
(9
)
 
6
%
 

 
5

Africa, Middle East and South Asia
3
%
 
(1
)
 
6

 
8
%
 
8

 
(0.5
)
Asia Pacific, Australia and New Zealand and China Region
8
%
 
1

 

 
9
%
 
8

 
1

Total
6
%
 

 
(1.5
)
 
4
%
 
1

 
3

 
Year Ended 12/28/2019
 
 
 
Impact of
 
 
 
Impact of
Net Revenue Year over Year % Change
Reported
% Change, GAAP Measure
 
Foreign exchange translation
 
Acquisitions and divestitures
 
Organic
% Change, Non-GAAP Measure(a)
 
Volume(b)
 
Effective net pricing
Frito-Lay North America
4.5
 %
 
 

 
4.5
%
 
2

 
3
Quaker Foods North America
1
 %
 
 

 
1
%
 

 
1
PepsiCo Beverages North America
3
 %
 
 
(1
)
 
3
%
 
(1
)
 
4
Latin America
3
 %
 
4
 

 
7
%
 

 
7
Europe
7
 %
 
5
 
(6
)
 
5.5
%
 
(1
)
 
6
Africa, Middle East and South Asia
 %
 
2
 
4

 
6
%
 
4

 
2.5
Asia Pacific, Australia and New Zealand and China Region
4.5
 %
 
3
 
2

 
9
%
 
7

 
2
Total
4
 %
 
2
 
(1
)
 
4.5
%
 
0.5

 
4
(a)
Organic revenue is a financial measure that is not in accordance with GAAP.
(b)
Excludes the impact of acquisitions and divestitures. In certain instances, volume growth varies from the amounts disclosed in the Summary Fourth-Quarter 2019 Performance and Summary Full-Year 2019 Performance tables on pages 2 and 4, respectively, due to nonconsolidated joint venture volume, and, for our beverage businesses, temporary timing differences between BCS and CSE, as well as the mix of beverage volume sold by our company-owned and franchise-owned bottlers. Our net revenue excludes nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, is based on CSE.

Note – Amounts may not sum due to rounding.

A - 7




PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information (continued)
Year over Year Growth Rates
Quarter and Year Ended December 28, 2019 (unaudited)
 
Quarter Ended 12/28/2019
 
 
 
Impact of Items Affecting Comparability
 
 
 
Impact of
 
 
Year over Year % Change
Reported
% Change, GAAP Measure
 
Mark-to-market net impact
 
Restructuring and impairment charges
 
Inventory fair value adjustments and merger and integration charges
 
Pension-related settlement charges
 
Net tax related to the TCJ Act
 
Other net tax benefits
 
Charges related to cash tender and exchange offers
 
Core
% Change, Non-GAAP Measure(a)
 
Foreign exchange translation
 
Core Constant Currency
% Change, Non-GAAP Measure(a)
Frito-Lay North America
3
 %
 

 
(2
)
 

 
 
 
 

 
1
 %
 

 
1
 %
Quaker Foods North America
(21
)%
 

 
(2
)
 

 
 
 
 

 
(24
)%
 

 
(24
)%
PepsiCo Beverages North America
5
 %
 

 
(12
)
 

 
 
 
 

 
(7
)%
 

 
(7
)%
Latin America
16
 %
 

 
(3
)
 

 
 
 
 

 
13
 %
 
1

 
14
 %
Europe
28
 %
 

 
(3
)
 
(18
)
 
 
 
 

 
7
 %
 

 
7
 %
Africa, Middle East and South Asia
(11
)%
 

 
4

 
4.5

 
 
 
 

 
(2
)%
 

 
(2
)%
Asia Pacific, Australia and New Zealand and China Region
3
 %
 

 
(9
)
 

 
 
 
 

 
(5
)%
 
(1
)
 
(7
)%
Corporate unallocated expenses
(19
)%
 
33

 

 
3

 
 
 
 

 
17
 %
 

 
17
 %
Total Operating Profit
11
 %
 
(7
)
 
(4
)
 
(3
)
 
 
 
 

 
(3
)%
 

 
(3
)%
Net Income Attributable to PepsiCo
(74
)%
 
(2
)
 
(1.5
)
 
(1
)
 
3
 
13
 
62
 
(3
)
 
(4
)%
 

 
(4
)%
Net Income Attributable to PepsiCo per common share – diluted
(74
)%
 
(2
)
 
(1.5
)
 
(1
)
 
3
 
13
 
62
 
(3
)
 
(3
)%
 

 
(2.5
)%
 
Year Ended 12/28/2019
 
 
 
Impact of Items Affecting Comparability
 
 
 
Impact of
 
 
Year over Year % Change
Reported
% Change, GAAP Measure
 
Mark-to-market net impact
 
Restructuring and impairment charges
 
Inventory fair value adjustments and merger and integration charges
 
Pension-related settlement charges
 
Net tax related to the TCJ Act
 
Other net tax benefits
 
Charges related to cash tender and exchange offers
 
Core
% Change, Non-GAAP Measure(a)
 
Foreign exchange translation
 
Core Constant Currency
% Change, Non-GAAP Measure(a)
Frito-Lay North America
5
 %
 

 

 

 
 
 
 

 
5
 %
 
 
5
 %
Quaker Foods North America
(15
)%
 

 
(0.5
)
 

 
 
 
 

 
(15
)%
 
 
(15
)%
PepsiCo Beverages North America
(4
)%
 

 
(1
)
 

 
 
 
 

 
(6
)%
 
 
(6
)%
Latin America
9
 %
 

 
2

 

 
 
 
 

 
10
 %
 
2
 
13
 %
Europe
6
 %
 

 
2

 
(1
)
 
 
 
 

 
7
 %
 
5
 
13
 %
Africa, Middle East and South Asia
1.5
 %
 

 
3

 
1

 
 
 
 

 
5.5
 %
 
2.5
 
8
 %
Asia Pacific, Australia and New Zealand and China Region
(23
)%
 

 
6

 

 
 
 
 

 
(17
)%
 
2
 
(16
)%
Corporate unallocated expenses
(6
)%
 
22

 
(3
)
 
1

 
 
 
 

 
14
 %
 
 
14
 %
Total Operating Profit
2
 %
 
(3
)
 
1

 

 
 
 
 

 
 %
 
1
 
1
 %
Net Income Attributable to PepsiCo
(42
)%
 
(2
)
 

 

 
2
 
 
39
 
(1.5
)
 
(4
)%
 
1
 
(2
)%
Net Income Attributable to PepsiCo per common share – diluted
(41
)%
 
(2
)
 

 

 
2
 
 
40
 
(1.5
)
 
(2
)%
 
1
 
(1
)%
(a)
Core results and core constant currency results are financial measures that are not in accordance with GAAP and exclude the impact of the above items affecting comparability. See A-5 through A-6 for a discussion of each of these adjustments.
Note – Certain amounts may not sum due to rounding.

A - 8




PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information (continued)
Certain Line Items
Quarters Ended December 28, 2019 and December 29, 2018
(in millions except per share amounts, unaudited)
 
Quarter Ended 12/28/2019
 
Cost of sales
 
Gross profit
 
Selling, general and administrative expenses
 
Operating profit
 
Other pension and retiree medical benefits (expense)/income
 
Provision for income
taxes(b)
 
Net income attributable to noncontrolling interests
 
Net income attributable to PepsiCo
 
Net income attributable to PepsiCo per common share - diluted
 
Effective tax rate(c)
Reported, GAAP Measure
$
9,346

 
$
11,294

 
$
8,595

 
$
2,699

 
$
(207
)
 
$
430

 
$
12

 
$
1,766

 
$
1.26

 
19.4
 %
Items Affecting Comparability
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market net impact
38

 
(38
)
 
24

 
(62
)
 

 
(13
)
 

 
(49
)
 
(0.04
)
 
(0.1
)
Restructuring and impairment charges
(15
)
 
15

 
(71
)
 
86

 
2

 
10

 
1

 
77

 
0.05

 
(0.3
)
Inventory fair value adjustments and merger and integration charges

 

 
(9
)
 
9

 

 

 

 
9

 
0.01

 
(0.1
)
Pension-related settlement charges

 

 

 

 
273

 
62

 

 
211

 
0.15

 
0.5

Net tax related to the TCJ Act

 

 

 

 

 
(21
)
 

 
21

 
0.01

 
(0.9
)
Core, Non-GAAP Measure (a)
$
9,369

 
$
11,271

 
$
8,539

 
$
2,732

 
$
68

 
$
468

 
$
13

 
$
2,035

 
$
1.45

 
18.6
 %
 
Quarter Ended 12/29/2018
 
Cost of sales
 
Gross profit
 
Selling, general and administrative expenses
 
Operating profit
 
Other pension and retiree medical benefits income
 
Interest expense
 
(Benefit from)/provision for income
taxes(b)
 
Net income attributable to PepsiCo
 
Net income attributable to PepsiCo per common share - diluted
 
Effective tax rate(c)
Reported, GAAP Measure
$
8,936

 
$
10,588

 
$
8,157

 
$
2,431

 
$
67

 
$
621

 
$
(4,932
)
 
$
6,854

 
$
4.83

 
(254.8
)%
Items Affecting Comparability
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market net impact
(32
)
 
32

 
(74
)
 
106

 

 

 
24

 
82

 
0.06

 
0.3

Restructuring and impairment charges
(3
)
 
3

 
(194
)
 
197

 
32

 

 
44

 
185

 
0.13

 
0.1

Merger and integration charges

 

 
(75
)
 
75

 

 

 

 
75

 
0.05

 
(0.7
)
Net tax related to the TCJ Act

 

 

 

 

 

 
882

 
(882
)
 
(0.62
)
 
45.5

Other net tax benefits

 

 

 

 

 

 
4,386

 
(4,386
)
 
(3.09
)
 
226.6

Charges related to cash tender and exchange offers

 

 

 

 

 
(253
)
 
62

 
191

 
0.13

 
0.9

Core, Non-GAAP Measure (a)
$
8,901

 
$
10,623

 
$
7,814

 
$
2,809

 
$
99

 
$
368

 
$
466

 
$
2,119

 
$
1.49

 
17.9
 %
(a)
Core results are financial measures that are not in accordance with GAAP and exclude the impact of the above items affecting comparability. See A-5 through A-6 for a discussion of each of these adjustments.
(b)
Provision for income taxes is the expected tax charge/benefit on the underlying item based on the tax laws and income tax rates applicable to the underlying item in its corresponding tax jurisdiction.
(c)
The impact of items affecting comparability on our effective tax rate represents the difference in the effective tax rate resulting from a higher or lower tax rate applicable to the items affecting comparability.
Note – Certain amounts may not sum due to rounding.

A - 9




PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information (continued)
Certain Line Items
Years Ended December 28, 2019 and December 29, 2018
(in millions except per share amounts, unaudited)
 
Year Ended 12/28/2019
 
Cost of sales
 
Gross profit
 
Selling, general and administrative expenses
 
Operating profit
 
Other pension and retiree medical benefits (expense)/income
 
Provision for income taxes(b)
 
Net income attributable to noncontrolling interests
 
Net income attributable to PepsiCo
 
Net income attributable to PepsiCo per common share - diluted
 
Effective tax rate(c)
Reported, GAAP Measure
$
30,132

 
$
37,029

 
$
26,738

 
$
10,291

 
$
(44
)
 
$
1,959

 
$
39

 
$
7,314

 
$
5.20

 
21.0
 %
Items Affecting Comparability
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market net impact
57

 
(57
)
 
55

 
(112
)
 

 
(25
)
 

 
(87
)
 
(0.06
)
 

Restructuring and impairment charges
(115
)
 
115

 
(253
)
 
368

 
2

 
67

 
5

 
298

 
0.21

 
(0.1
)
Inventory fair value adjustments and merger and integration charges
(34
)
 
34

 
(21
)
 
55

 

 
8

 

 
47

 
0.03

 

Pension-related settlement charges

 

 

 

 
273

 
62

 

 
211

 
0.15

 

Net tax related to the TCJ Act

 

 

 

 

 
8

 

 
(8
)
 
(0.01
)
 
0.1

Core, Non-GAAP Measure (a)
$
30,040

 
$
37,121

 
$
26,519

 
$
10,602

 
$
231

 
$
2,079

 
$
44

 
$
7,775

 
$
5.53

 
21.0
 %
 
Year Ended 12/29/2018
 
Cost of sales
 
Gross profit
 
Selling, general and administrative expenses
 
Operating profit
 
Other pension and retiree medical benefits income
 
Interest expense
 
(Benefit from)/provision for income taxes(b)
 
Net income attributable to noncontrolling interests
 
Net income attributable to PepsiCo
 
Net income attributable to PepsiCo per common share - diluted
 
Effective tax rate(c)
Reported, GAAP Measure
$
29,381

 
$
35,280

 
$
25,170

 
$
10,110

 
$
298

 
$
1,525

 
$
(3,370
)
 
$
44

 
$
12,515

 
$
8.78

 
(36.7
)%
Items Affecting Comparability
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mark-to-market net impact
(83
)
 
83

 
(80
)
 
163

 

 

 
38

 

 
125

 
0.09

 
0.1

Restructuring and impairment charges
(3
)
 
3

 
(269
)
 
272

 
36

 

 
56

 
1

 
251

 
0.18

 

Merger and integration charges

 

 
(75
)
 
75

 

 

 

 

 
75

 
0.05

 
(0.2
)
Net tax related to the TCJ Act

 

 

 

 

 

 
28

 

 
(28
)
 
(0.02
)
 
0.3

Other net tax benefits

 

 

 

 

 

 
5,064

 

 
(5,064
)
 
(3.55
)
 
55.1

Charges related to cash tender and exchange offers

 

 

 

 

 
(253
)
 
62

 

 
191

 
0.13

 
0.2

Core, Non-GAAP Measure (a)
$
29,295

 
$
35,366

 
$
24,746

 
$
10,620

 
$
334

 
$
1,272

 
$
1,878

 
$
45

 
$
8,065

 
$
5.66

 
18.8
 %
(a)
Core results are financial measures that are not in accordance with GAAP and exclude the impact of the above items affecting comparability. See A-5 through A-6 for a discussion of each of these adjustments.
(b)
Provision for income taxes is the expected tax charge/benefit on the underlying item based on the tax laws and income tax rates applicable to the underlying item in its corresponding tax jurisdiction.
(c)
The impact of items affecting comparability on our effective tax rate represents the difference in the effective tax rate resulting from a higher or lower tax rate applicable to the items affecting comparability.
Note – Certain amounts may not sum due to rounding.

A - 10




PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information (continued)
Operating Profit by Division
Quarters Ended December 28, 2019 and December 29, 2018
(in millions, unaudited)
 
Quarter Ended 12/28/2019
 
 
 
Items Affecting Comparability
 
 
Operating Profit
Reported, GAAP Measure
 
Mark-to-market net impact
 
Restructuring and impairment charges
 
Inventory fair value adjustments and merger and integration charges
 
Core,
Non-GAAP Measure(a)
Frito-Lay North America
$
1,564

 
$

 
$

 
$

 
$
1,564

Quaker Foods North America
153

 

 

 

 
153

PepsiCo Beverages North America
460

 

 
9

 

 
469

Latin America
356

 

 
19

 

 
375

Europe
418

 

 
25