(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)) |
Title of each class | Trading Symbols | Name of each exchange on which registered | ||
Exhibit No. | Description | |
104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. |
PEPSICO, INC. | |||
Date: | July 13, 2020 | By: | /s/ David Yawman |
Name: | David Yawman | ||
Title: | Executive Vice President, Government Affairs, General Counsel and Corporate Secretary |
Second-Quarter | Year-to-Date | |
Net revenue performance | (3.1)% | 1.7% |
Foreign exchange impact on net revenue | (4)% | (2)% |
Earnings per share (EPS) | $1.18 | $2.14 |
EPS change | (18)% | (12)% |
Foreign exchange impact on EPS | (3)% | (2)% |
Second-Quarter | Year-to-Date | |
Organic revenue performance | (0.3)% | 3.3% |
Core EPS | $1.32 | $2.39 |
Core constant currency EPS change | (11)% | (3)% |
Revenue | Volume | ||||||
GAAP Reported % Change | Percentage Point Impact | Organic % Change | Organic Volume % Change | ||||
Foreign Exchange Translation | Acquisitions, Divestitures, and Other Structural Changes | Food/Snack | Beverage | ||||
Frito-Lay North America | 7 | — | (0.5) | 6 | 3 | ||
Quaker Foods North America | 23 | — | — | 23 | 26 | ||
PepsiCo Beverages North America | (7) | — | (1) | (7) | (10) | ||
Latin America | (17) | 17 | — | — | — | (9) | |
Europe | (9) | 7 | — | (2.5) | 2 | 2 | |
Africa, Middle East and South Asia | (1) | 2 | (7) | (7) | (6) | (26) | |
Asia Pacific, Australia and New Zealand and China Region | 10 | 5 | — | 15 | 14 | (8) | |
Total | (3) | 4 | (1) | — | 4 | (11) |
Operating Profit and EPS | ||||
GAAP Reported % Change | Percentage Point Impact | Core Constant Currency % Change | ||
Items Affecting Comparability | Foreign Exchange Translation | |||
Frito-Lay North America | 2 | — | — | 2 |
Quaker Foods North America | 55 | — | — | 55 |
PepsiCo Beverages North America | (42) | 5 | — | (37) |
Latin America | (22) | (4) | 18 | (8) |
Europe | 3 | (17) | 6 | (7) |
Africa, Middle East and South Asia | (75) | 66 | — | (9) |
Asia Pacific, Australia and New Zealand and China Region | 63 | (35) | 4 | 31 |
Corporate unallocated expenses | 21 | 24 | — | 45 |
Total | (15) | 1 | 3 | (11) |
EPS | (18) | 4 | 3 | (11) |
Revenue | Volume | ||||||
GAAP Reported % Change | Percentage Point Impact | Organic % Change | Organic Volume % Change | ||||
Foreign Exchange Translation | Acquisitions, Divestitures, and Other Structural Changes | Food/Snack | Beverage | ||||
Frito-Lay North America | 7 | — | — | 7 | 4 | ||
Quaker Foods North America | 14 | — | — | 15 | 17 | ||
PepsiCo Beverages North America | — | — | (1) | (1) | (3) | ||
Latin America | (8) | 11 | — | 3 | 1 | (3.5) | |
Europe | (1) | 4 | — | 3 | 3 | 5 | |
Africa, Middle East and South Asia | 2 | 1 | (2) | 1 | 2 | (15) | |
Asia Pacific, Australia and New Zealand and China Region | 8 | 3 | — | 11 | 10 | (5) | |
Total | 2 | 2 | (0.5) | 3 | 5 | (4) |
Operating Profit and EPS | ||||
GAAP Reported % Change | Percentage Point Impact | Core Constant Currency % Change | ||
Items Affecting Comparability | Foreign Exchange Translation | |||
Frito-Lay North America | 3 | 1 | — | 4 |
Quaker Foods North America | 31 | — | — | 31 |
PepsiCo Beverages North America | (36) | 3 | — | (32) |
Latin America | (12) | (2) | 10 | (3) |
Europe | 9 | (16) | 5 | (2) |
Africa, Middle East and South Asia | (43) | 44 | (0.5) | — |
Asia Pacific, Australia and New Zealand and China Region | 49 | (20) | 3 | 31 |
Corporate unallocated expenses | 38 | (27) | — | 12 |
Total | (10) | 5 | 2 | (4) |
EPS | (12) | 8 | 2 | (3) |
• | A core effective tax rate of approximately 21 percent; and |
• | Total cash returns to shareholders of approximately $7.5 billion, comprised of dividends of $5.5 billion and share repurchases of $2 billion. |
Contacts: | Investor Relations | Communications | |
investor@pepsico.com | pepsicomediarelations@pepsico.com |
12 Weeks Ended | 24 Weeks Ended | ||||||||||||||
6/13/2020 | 6/15/2019 | 6/13/2020 | 6/15/2019 | ||||||||||||
Net Revenue | $ | 15,945 | $ | 16,449 | $ | 29,826 | $ | 29,333 | |||||||
Cost of sales | 7,088 | 7,404 | 13,215 | 13,092 | |||||||||||
Gross profit | 8,857 | 9,045 | 16,611 | 16,241 | |||||||||||
Selling, general and administrative expenses (a) | 6,538 | 6,316 | 12,368 | 11,504 | |||||||||||
Operating Profit | 2,319 | 2,729 | 4,243 | 4,737 | |||||||||||
Other pension and retiree medical benefits income | 84 | 61 | 161 | 125 | |||||||||||
Net interest expense and other | (235 | ) | (223 | ) | (525 | ) | (427 | ) | |||||||
Income before income taxes | 2,168 | 2,567 | 3,879 | 4,435 | |||||||||||
Provision for income taxes | 510 | 524 | 870 | 970 | |||||||||||
Net income | 1,658 | 2,043 | 3,009 | 3,465 | |||||||||||
Less: Net income attributable to noncontrolling interests | 12 | 8 | 25 | 17 | |||||||||||
Net Income Attributable to PepsiCo | $ | 1,646 | $ | 2,035 | $ | 2,984 | $ | 3,448 | |||||||
Diluted | |||||||||||||||
Net income attributable to PepsiCo per common share | $ | 1.18 | $ | 1.44 | $ | 2.14 | $ | 2.44 | |||||||
Weighted-average common shares outstanding | 1,393 | 1,409 | 1,395 | 1,411 |
(a) | The increase in selling, general and administrative expenses for the 12 weeks ended June 13, 2020 as compared to the 12 weeks ended June 15, 2019, primarily reflects certain charges taken as a result of the COVID-19 pandemic and higher merger and integration charges. The increase in selling, general and administrative expenses for the 24 weeks ended June 13, 2020 as compared to the 24 weeks ended June 15, 2019, primarily reflects the charges taken as a result of the COVID-19 pandemic and higher merger and integration charges. |
12 Weeks Ended | 24 Weeks Ended | ||||||||||||||
6/13/2020 | 6/15/2019 | 6/13/2020 | 6/15/2019 | ||||||||||||
Net Revenue | |||||||||||||||
Frito-Lay North America | $ | 4,273 | $ | 4,010 | $ | 8,347 | $ | 7,825 | |||||||
Quaker Foods North America | 664 | 540 | 1,298 | 1,134 | |||||||||||
PepsiCo Beverages North America | 4,970 | 5,322 | 9,808 | 9,832 | |||||||||||
Latin America | 1,567 | 1,886 | 2,877 | 3,127 | |||||||||||
Europe | 2,725 | 3,000 | 4,564 | 4,620 | |||||||||||
Africa, Middle East and South Asia | 983 | 997 | 1,614 | 1,576 | |||||||||||
Asia Pacific, Australia and New Zealand and China Region | 763 | 694 | 1,318 | 1,219 | |||||||||||
Total | $ | 15,945 | $ | 16,449 | $ | 29,826 | $ | 29,333 | |||||||
Operating Profit | |||||||||||||||
Frito-Lay North America | $ | 1,278 | $ | 1,249 | $ | 2,480 | $ | 2,408 | |||||||
Quaker Foods North America | 196 | 127 | 346 | 265 | |||||||||||
PepsiCo Beverages North America | 397 | 690 | 694 | 1,079 | |||||||||||
Latin America | 219 | 278 | 450 | 508 | |||||||||||
Europe | 351 | 339 | 497 | 454 | |||||||||||
Africa, Middle East and South Asia | 59 | 236 | 193 | 341 | |||||||||||
Asia Pacific, Australia and New Zealand and China Region | 189 | 116 | 331 | 222 | |||||||||||
Corporate unallocated expenses | (370 | ) | (306 | ) | (748 | ) | (540 | ) | |||||||
Total | $ | 2,319 | $ | 2,729 | $ | 4,243 | $ | 4,737 |
PepsiCo, Inc. and Subsidiaries Condensed Consolidated Statement of Cash Flows (in millions, unaudited) | |||||||
24 Weeks Ended | |||||||
6/13/2020 | 6/15/2019 | ||||||
Operating Activities | |||||||
Net income | $ | 3,009 | $ | 3,465 | |||
Depreciation and amortization | 1,122 | 1,056 | |||||
Share-based compensation expense | 101 | 118 | |||||
Restructuring and impairment charges | 63 | 184 | |||||
Cash payments for restructuring charges | (109 | ) | (153 | ) | |||
Pension and retiree medical plan expenses | 80 | 98 | |||||
Pension and retiree medical plan contributions | (293 | ) | (317 | ) | |||
Deferred income taxes and other tax charges and credits | 109 | 221 | |||||
Net tax related to the Tax Cuts and Jobs Act (TCJ Act) | — | (29 | ) | ||||
Tax payments related to the TCJ Act | — | (393 | ) | ||||
Change in assets and liabilities: | |||||||
Accounts and notes receivable | (1,101 | ) | (1,372 | ) | |||
Inventories | (827 | ) | (872 | ) | |||
Prepaid expenses and other current assets | (251 | ) | (336 | ) | |||
Accounts payable and other current liabilities | (1,336 | ) | (521 | ) | |||
Income taxes payable | 448 | 202 | |||||
Other, net | 447 | 37 | |||||
Net Cash Provided by Operating Activities | 1,462 | 1,388 | |||||
Investing Activities | |||||||
Capital spending | (1,188 | ) | (1,167 | ) | |||
Sales of property, plant and equipment | 18 | 42 | |||||
Acquisitions, net of cash acquired, and investments in noncontrolled affiliates | (5,649 | ) | (2,424 | ) | |||
Divestitures | 4 | 270 | |||||
Short-term investments, by original maturity: | |||||||
More than three months - maturities | — | 4 | |||||
More than three months - sales | — | 2 | |||||
Three months or less, net | 18 | 8 | |||||
Other investing, net | 35 | (6 | ) | ||||
Net Cash Used for Investing Activities | (6,762 | ) | (3,271 | ) | |||
Financing Activities | |||||||
Proceeds from issuances of long-term debt | 10,564 | 1,122 | |||||
Payments of long-term debt | (752 | ) | (2,953 | ) | |||
Short-term borrowings, by original maturity: | |||||||
More than three months - proceeds | 3,663 | 6 | |||||
More than three months - payments | (1,176 | ) | — | ||||
Three months or less, net | 461 | 652 | |||||
Cash dividends paid | (2,677 | ) | (2,635 | ) | |||
Share repurchases - common | (1,137 | ) | (1,726 | ) | |||
Proceeds from exercises of stock options | 120 | 210 | |||||
Withholding tax payments on restricted stock units and performance stock units converted | (79 | ) | (100 | ) | |||
Other financing | (16 | ) | (15 | ) | |||
Net Cash Provided by/(Used for) Financing Activities | 8,971 | (5,439 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash | (252 | ) | 24 | ||||
Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash | 3,419 | (7,298 | ) | ||||
Cash and Cash Equivalents and Restricted Cash, Beginning of Year | 5,570 | 10,769 | |||||
Cash and Cash Equivalents and Restricted Cash, End of Period | $ | 8,989 | $ | 3,471 | |||
Supplemental Non-Cash Activity | |||||||
Right-of-use assets obtained in exchange for lease obligations | $ | 302 | $ | 170 |
PepsiCo, Inc. and Subsidiaries Condensed Consolidated Balance Sheet (in millions except per share amounts) | |||||||
(unaudited) | |||||||
6/13/2020 | 12/28/2019 | ||||||
ASSETS | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 8,927 | $ | 5,509 | |||
Short-term investments | 196 | 229 | |||||
Accounts and notes receivable, net | 8,780 | 7,822 | |||||
Inventories: | |||||||
Raw materials and packaging | 1,869 | 1,395 | |||||
Work-in-process | 344 | 200 | |||||
Finished goods | 2,101 | 1,743 | |||||
4,314 | 3,338 | ||||||
Prepaid expenses and other current assets | 972 | 747 | |||||
Total Current Assets | 23,189 | 17,645 | |||||
Property, Plant and Equipment, net | 19,187 | 19,305 | |||||
Amortizable Intangible Assets, net | 1,465 | 1,433 | |||||
Goodwill | 17,845 | 15,501 | |||||
Other indefinite-lived intangible assets | 17,530 | 14,610 | |||||
Indefinite-Lived Intangible Assets | 35,375 | 30,111 | |||||
Investments in Noncontrolled Affiliates | 2,715 | 2,683 | |||||
Deferred Income Taxes | 4,351 | 4,359 | |||||
Other Assets | 3,243 | 3,011 | |||||
Total Assets | $ | 89,525 | $ | 78,547 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities | |||||||
Short-term debt obligations | $ | 6,607 | $ | 2,920 | |||
Accounts payable and other current liabilities | 17,220 | 17,541 | |||||
Total Current Liabilities | 23,827 | 20,461 | |||||
Long-Term Debt Obligations | 38,371 | 29,148 | |||||
Deferred Income Taxes | 4,203 | 4,091 | |||||
Other Liabilities | 10,537 | 9,979 | |||||
Total Liabilities | 76,938 | 63,679 | |||||
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: 1,385 and 1,391 shares, respectively) | 23 | 23 | |||||
Capital in excess of par value | 3,772 | 3,886 | |||||
Retained earnings | 62,145 | 61,946 | |||||
Accumulated other comprehensive loss | (15,778 | ) | (14,300 | ) | |||
Repurchased common stock, in excess of par value (482 and 476 shares, respectively) | (37,671 | ) | (36,769 | ) | |||
Total PepsiCo Common Shareholders’ Equity | 12,491 | 14,786 | |||||
Noncontrolling interests | 96 | 82 | |||||
Total Equity | 12,587 | 14,868 | |||||
Total Liabilities and Equity | $ | 89,525 | $ | 78,547 |
12 Weeks Ended 6/13/2020 | ||||||||||||||||
Impact of | Impact of | |||||||||||||||
Net Revenue Year over Year % Change | Reported % Change, GAAP Measure | Foreign exchange translation | Acquisitions and divestitures(a) | Organic % Change, Non-GAAP Measure(b) | Volume(c) | Effective net pricing | ||||||||||
Frito-Lay North America | 7 | % | — | (0.5 | ) | 6 | % | 4 | 2 | |||||||
Quaker Foods North America | 23 | % | — | — | 23 | % | 26 | (3 | ) | |||||||
PepsiCo Beverages North America | (7 | )% | — | (1 | ) | (7 | )% | (11 | ) | 3 | ||||||
Latin America | (17 | )% | 17 | — | — | % | (1 | ) | 1 | |||||||
Europe | (9 | )% | 7 | — | (2.5 | )% | (1 | ) | (2 | ) | ||||||
Africa, the Middle East and South Asia | (1 | )% | 2 | (7 | ) | (7 | )% | (8 | ) | 1.5 | ||||||
Asia Pacific, Australia and New Zealand and China Region | 10 | % | 5 | — | 15 | % | 11 | 3 | ||||||||
Total | (3 | )% | 4 | (1 | ) | — | % | (2 | ) | 1.5 |
24 Weeks Ended 6/13/2020 | ||||||||||||||||
Impact of | Impact of | |||||||||||||||
Net Revenue Year over Year % Change | Reported % Change, GAAP Measure | Foreign exchange translation | Acquisitions and divestitures(d) | Organic % Change, Non-GAAP Measure(b) | Volume(c) | Effective net pricing | ||||||||||
Frito-Lay North America | 7 | % | — | — | 7 | % | 4.5 | 2 | ||||||||
Quaker Foods North America | 14 | % | — | — | 15 | % | 17 | (2 | ) | |||||||
PepsiCo Beverages North America | — | % | — | (1 | ) | (1 | )% | (3 | ) | 2 | ||||||
Latin America | (8 | )% | 11 | — | 3 | % | 1 | 2 | ||||||||
Europe | (1 | )% | 4 | — | 3 | % | 3 | — | ||||||||
Africa, Middle East and South Asia | 2 | % | 1 | (2 | ) | 1 | % | (1 | ) | 2 | ||||||
Asia Pacific, Australia and New Zealand and China Region | 8 | % | 3 | — | 11 | % | 7 | 5 | ||||||||
Total | 2 | % | 2 | (0.5 | ) | 3 | % | 2 | 2 |
(a) | Adjustments primarily reflect Pioneer Foods (AMESA), as well as Rockstar (PBNA) and BFY Brands (FLNA). The contribution from the acquisition of Rockstar reflects the incremental consolidated net revenue reported for Rockstar in excess of the net revenue we reported under our previous distribution arrangement. |
(b) | Organic revenue growth is a financial measure that is not in accordance with GAAP. |
(c) | Excludes the impact of acquisitions and divestitures. In certain instances, volume growth varies from the amounts disclosed in the Summary Second-Quarter 2020 Performance and Summary Year-to-Date 2020 Performance tables on pages 3 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. |
(d) | Adjustments primarily reflect Pioneer Foods (AMESA) and Rockstar (PBNA). The contribution from the acquisition of Rockstar reflects the incremental consolidated net revenue reported for Rockstar in excess of the net revenue we reported under our previous distribution arrangement. |
12 Weeks Ended 6/13/2020 | ||||||||||||||||||||
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 | Core % Change, Non-GAAP Measure(a) | Foreign exchange translation | Core Constant Currency % Change, Non-GAAP Measure(a) | |||||||||||||
Frito-Lay North America | 2 | % | — | — | — | 2 | % | — | 2 | % | ||||||||||
Quaker Foods North America | 55 | % | — | — | — | 55 | % | — | 55 | % | ||||||||||
PepsiCo Beverages North America | (42 | )% | — | (1.5 | ) | 7 | (37 | )% | — | (37 | )% | |||||||||
Latin America | (22 | )% | — | (4 | ) | — | (25 | )% | 18 | (8 | )% | |||||||||
Europe | 3 | % | — | (11 | ) | (6 | ) | (14 | )% | 6 | (7 | )% | ||||||||
Africa, Middle East and South Asia | (75 | )% | — | (1 | ) | 67 | (9 | )% | — | (9 | )% | |||||||||
Asia Pacific, Australia and New Zealand and China Region | 63 | % | — | (35 | ) | — | 28 | % | 4 | 31 | % | |||||||||
Corporate unallocated expenses | 21 | % | 20 | 10 | (6 | ) | 45 | % | — | 45 | % | |||||||||
Total Operating Profit | (15 | )% | (6 | ) | (17 | ) | 25 | (14 | )% | 3 | (11 | )% | ||||||||
Net Income Attributable to PepsiCo | (19 | )% | (3 | ) | (7 | ) | 13 | (16 | )% | 3 | (12 | )% | ||||||||
Net Income Attributable to PepsiCo per common share – diluted | (18 | )% | (3 | ) | (6 | ) | 13 | (15 | )% | 3 | (11 | )% |
24 Weeks Ended 6/13/2020 | ||||||||||||||||||||||
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 | Net tax related to the TCJ Act | Core % Change, Non-GAAP Measure(a) | Foreign exchange translation | Core Constant Currency % Change, Non-GAAP Measure(a) | ||||||||||||||
Frito-Lay North America | 3 | % | — | — | 1 | — | 4 | % | — | 4 | % | |||||||||||
Quaker Foods North America | 31 | % | — | — | — | — | 31 | % | — | 31 | % | |||||||||||
PepsiCo Beverages North America | (36 | )% | — | (1 | ) | 5 | — | (32 | )% | — | (32 | )% | ||||||||||
Latin America | (12 | )% | — | (2 | ) | — | — | (13 | )% | 10 | (3 | )% | ||||||||||
Europe | 9 | % | — | (9 | ) | (8 | ) | — | (7 | )% | 5 | (2 | )% | |||||||||
Africa, Middle East and South Asia | (43 | )% | — | (2 | ) | 46 | — | 1 | % | (0.5 | ) | — | % | |||||||||
Asia Pacific, Australia and New Zealand and China Region | 49 | % | — | (20 | ) | — | — | 29 | % | 3 | 31 | % | ||||||||||
Corporate unallocated expenses | 38 | % | (28 | ) | 5 | (3 | ) | — | 12 | % | — | 12 | % | |||||||||
Total Operating Profit | (10 | )% | 3 | (3 | ) | 4.5 | — | (5.5 | )% | 2 | (4 | )% | ||||||||||
Net Income Attributable to PepsiCo | (13 | )% | 3 | (3 | ) | 6 | 1 | (6 | )% | 2 | (4 | )% | ||||||||||
Net Income Attributable to PepsiCo per common share – diluted | (12 | )% | 3 | (2.5 | ) | 6 | 1 | (5 | )% | 2 | (3 | )% |
(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. |
12 Weeks Ended 6/13/2020 | ||||||||||||||||||||||||||||||||||
Cost of sales | Gross profit | Selling, general and administrative expenses | Operating profit | Other pension and retiree medical benefits income | 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 | $ | 7,088 | $ | 8,857 | $ | 6,538 | $ | 2,319 | $ | 84 | $ | 510 | $ | 1,646 | $ | 1.18 | 23.5 | % | ||||||||||||||||
Items Affecting Comparability | ||||||||||||||||||||||||||||||||||
Mark-to-market net impact | 14 | (14 | ) | 31 | (45 | ) | — | (11 | ) | (34 | ) | (0.02 | ) | — | ||||||||||||||||||||
Restructuring and impairment charges | (1 | ) | 1 | (23 | ) | 24 | 1 | 4 | 21 | 0.02 | (0.1 | ) | ||||||||||||||||||||||
Inventory fair value adjustments and merger and integration charges | (19 | ) | 19 | (199 | ) | 218 | — | 13 | 205 | 0.15 | (1.6 | ) | ||||||||||||||||||||||
Core, Non-GAAP Measure (a) | $ | 7,082 | $ | 8,863 | $ | 6,347 | $ | 2,516 | $ | 85 | $ | 516 | $ | 1,838 | $ | 1.32 | 21.8 | % |
12 Weeks Ended 6/15/2019 | ||||||||||||||||||||||||||||||||||
Cost of sales | Gross profit | Selling, general and administrative expenses | Operating profit | 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 | $ | 7,404 | $ | 9,045 | $ | 6,316 | $ | 2,729 | $ | 524 | $ | 8 | $ | 2,035 | $ | 1.44 | 20.4 | % | ||||||||||||||||
Items Affecting Comparability | ||||||||||||||||||||||||||||||||||
Mark-to-market net impact | 13 | (13 | ) | (19 | ) | 6 | 1 | — | 5 | — | — | |||||||||||||||||||||||
Restructuring and impairment charges | (82 | ) | 82 | (76 | ) | 158 | 38 | 4 | 116 | 0.08 | 0.2 | |||||||||||||||||||||||
Inventory fair value adjustments and merger and integration charges | (20 | ) | 20 | (4 | ) | 24 | 5 | — | 19 | 0.01 | — | |||||||||||||||||||||||
Core, Non-GAAP Measure (a) | $ | 7,315 | $ | 9,134 | $ | 6,217 | $ | 2,917 | $ | 568 | $ | 12 | $ | 2,175 | $ | 1.54 | 20.6 | % |
(a) | Core results are financial measures that are not in accordance with GAAP and exclude 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. |
24 Weeks Ended 6/13/2020 | ||||||||||||||||||||||||||||||||||
Cost of sales | Gross profit | Selling, general and administrative expenses | Operating profit | Other pension and retiree medical benefits income | 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 | $ | 13,215 | $ | 16,611 | $ | 12,368 | $ | 4,243 | $ | 161 | $ | 870 | $ | 2,984 | $ | 2.14 | 22.4 | % | ||||||||||||||||
Items Affecting Comparability | ||||||||||||||||||||||||||||||||||
Mark-to-market net impact | (24 | ) | 24 | (73 | ) | 97 | — | 24 | 73 | 0.05 | 0.1 | |||||||||||||||||||||||
Restructuring and impairment charges | (3 | ) | 3 | (53 | ) | 56 | 7 | 10 | 53 | 0.04 | (0.1 | ) | ||||||||||||||||||||||
Inventory fair value adjustments and merger and integration charges | (19 | ) | 19 | (224 | ) | 243 | — | 16 | 227 | 0.16 | (0.9 | ) | ||||||||||||||||||||||
Core, Non-GAAP Measure (a) | $ | 13,169 | $ | 16,657 | $ | 12,018 | $ | 4,639 | $ | 168 | $ | 920 | $ | 3,337 | $ | 2.39 | 21.5 | % |
24 Weeks Ended 6/15/2019 | ||||||||||||||||||||||||||||||||||||||
Cost of sales | Gross profit | Selling, general and administrative expenses | Operating profit | Other pension and retiree medical benefits 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 | $ | 13,092 | $ | 16,241 | $ | 11,504 | $ | 4,737 | $ | 125 | $ | 970 | $ | 17 | $ | 3,448 | $ | 2.44 | 21.9 | % | ||||||||||||||||||
Items Affecting Comparability | ||||||||||||||||||||||||||||||||||||||
Mark-to-market net impact | 32 | (32 | ) | 22 | (54 | ) | — | (13 | ) | — | (41 | ) | (0.03 | ) | — | |||||||||||||||||||||||
Restructuring and impairment charges | (90 | ) | 90 | (99 | ) | 189 | (5 | ) | 41 | 4 | 139 | 0.10 | — | |||||||||||||||||||||||||
Inventory fair value adjustments and merger and integration charges | (34 | ) | 34 | (5 | ) | 39 | — | 7 | — | 32 | 0.02 | — | ||||||||||||||||||||||||||
Net tax related to the TCJ Act | — | — | — | — | — | 29 | — | (29 | ) | (0.02 | ) | 0.7 | ||||||||||||||||||||||||||
Core, Non-GAAP Measure (a) | $ | 13,000 | $ | 16,333 | $ | 11,422 | $ | 4,911 | $ | 120 | $ | 1,034 | $ | 21 | $ | 3,549 | $ | 2.52 | 22.5 | % |
(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. |
12 Weeks Ended 6/13/2020 | |||||||||||||||||||
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 | $ | 1,278 | $ | — | $ | 2 | $ | 2 | $ | 1,282 | |||||||||
Quaker Foods North America | 196 | — | — | — | 196 | ||||||||||||||
PepsiCo Beverages North America | 397 | — | — | 43 | 440 | ||||||||||||||
Latin America | 219 | — | 4 | — | 223 | ||||||||||||||
Europe | 351 | — | 8 | — | 359 | ||||||||||||||
Africa, Middle East and South Asia | 59 | — | 5 | 157 | 221 | ||||||||||||||
Asia Pacific, Australia and New Zealand and China Region | 189 | — | 3 | — | 192 | ||||||||||||||
Corporate unallocated expenses | (370 | ) | (45 | ) | 2 | 16 | (397 | ) | |||||||||||
Total | $ | 2,319 | $ | (45 | ) | $ | 24 | $ | 218 | $ | 2,516 |
12 Weeks Ended 6/15/2019 | |||||||||||||||||||
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 | $ | 1,249 | $ | — | $ | 6 | $ | — | $ | 1,255 | |||||||||
Quaker Foods North America | 127 | — | — | — | 127 | ||||||||||||||
PepsiCo Beverages North America | 690 | — | 10 | — | 700 | ||||||||||||||
Latin America | 278 | — | 21 | — | 299 | ||||||||||||||
Europe | 339 | — | 53 | 23 | 415 | ||||||||||||||
Africa, Middle East and South Asia | 236 | — | 8 | — | 244 | ||||||||||||||
Asia Pacific, Australia and New Zealand and China Region | 116 | — | 34 | — | 150 | ||||||||||||||
Corporate unallocated expenses | (306 | ) | 6 | 26 | 1 | (273 | ) | ||||||||||||
Total | $ | 2,729 | $ | 6 | $ | 158 | $ | 24 | $ | 2,917 |
(a) | Core results are financial measures that are not in accordance with GAAP and exclude the above items affecting comparability. See A-5 through A-6 for a discussion of each of these adjustments. |
24 Weeks Ended 6/13/2020 | |||||||||||||||||||
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 | $ | 2,480 | $ | — | $ | 7 | $ | 25 | $ | 2,512 | |||||||||
Quaker Foods North America | 346 | — | 1 | — | 347 | ||||||||||||||
PepsiCo Beverages North America | 694 | — | 3 | 43 | 740 | ||||||||||||||
Latin America | 450 | — | 9 | — | 459 | ||||||||||||||
Europe | 497 | — | 16 | — | 513 | ||||||||||||||
Africa, Middle East and South Asia | 193 | — | 7 | 159 | 359 | ||||||||||||||
Asia Pacific, Australia and New Zealand and China Region | 331 | — | 3 | — | 334 | ||||||||||||||
Corporate unallocated expenses | (748 | ) | 97 | 10 | 16 | (625 | ) | ||||||||||||
Total | $ | 4,243 | $ | 97 | $ | 56 | $ | 243 | $ | 4,639 |
24 Weeks Ended 6/15/2019 | |||||||||||||||||||
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 | $ | 2,408 | $ | — | $ | 6 | $ | — | $ | 2,414 | |||||||||
Quaker Foods North America | 265 | — | — | — | 265 | ||||||||||||||
PepsiCo Beverages North America | 1,079 | — | 16 | — | 1,095 | ||||||||||||||
Latin America | 508 | — | 21 | — | 529 | ||||||||||||||
Europe | 454 | — | 59 | 38 | 551 | ||||||||||||||
Africa, Middle East and South Asia | 341 | — | 16 | — | 357 | ||||||||||||||
Asia Pacific, Australia and New Zealand and China Region | 222 | — | 37 | — | 259 | ||||||||||||||
Corporate unallocated expenses | (540 | ) | (54 | ) | 34 | 1 | (559 | ) | |||||||||||
Total | $ | 4,737 | $ | (54 | ) | $ | 189 | $ | 39 | $ | 4,911 |
(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. |
12 Weeks Ended | 24 Weeks Ended | ||||||
6/13/2020 | 6/13/2020 | ||||||
Reported gross margin growth | 56 | bps | 33 | bps | |||
Mark-to-market net impact | — | 19 | |||||
Restructuring and impairment charges | (49 | ) | (30 | ) | |||
Inventory fair value adjustments and merger and integration charges | (1 | ) | (5 | ) | |||
Core gross margin growth (a) | 6 | bps | 17 | bps |
12 Weeks Ended | 24 Weeks Ended | ||||||
6/13/2020 | 6/13/2020 | ||||||
Reported operating margin performance | (205 | ) | bps | (192 | ) | bps | |
Mark-to-market net impact | (31 | ) | 51 | ||||
Restructuring and impairment charges | (80 | ) | (45 | ) | |||
Inventory fair value adjustments and merger and integration charges | 122 | 68 | |||||
Core operating margin performance (a) | (195 | ) | bps | (119 | ) | bps |
(a) | Core results are financial measures that are not in accordance with GAAP and exclude the above items affecting comparability. See pages A-5 to A-6 for a discussion of each of these adjustments. |