SEC Filing | PepsiCo

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pep-20230325

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 25, 2023 (12 weeks)


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

For the transition period from to

Commission file number 1-1183

https://cdn.kscope.io/de0f4e957360a534e646508827d22302-PepsiCoMega14-300.jpg


PepsiCo, Inc.

(Exact Name of Registrant as Specified in its Charter)



North Carolina						13-1584302
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

700 Anderson Hill Road, Purchase, New York 10577


(Address of principal executive offices and Zip Code)

(914) 253-2000


Registrant's telephone number, including area code

N/A


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

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

Title of each class

Trading Symbols

Name of each exchange on which registered

Common Stock, par value 1-2/3 cents per share

PEP

The Nasdaq Stock Market LLC

0.250% Senior Notes Due 2024

PEP24

The Nasdaq Stock Market LLC

2.625% Senior Notes Due 2026

PEP26

The Nasdaq Stock Market LLC

0.750% Senior Notes Due 2027

PEP27

The Nasdaq Stock Market LLC

0.875% Senior Notes Due 2028

PEP28

The Nasdaq Stock Market LLC

0.500% Senior Notes Due 2028

PEP28a

The Nasdaq Stock Market LLC

3.200% Senior Notes Due 2029

PEP29

The Nasdaq Stock Market LLC

1.125% Senior Notes Due 2031

PEP31

The Nasdaq Stock Market LLC

0.400% Senior Notes Due 2032

PEP32

The Nasdaq Stock Market LLC

0.750% Senior Notes Due 2033

PEP33

The Nasdaq Stock Market LLC

3.550% Senior Notes Due 2034

PEP34

The Nasdaq Stock Market LLC

0.875% Senior Notes Due 2039

PEP39

The Nasdaq Stock Market LLC

1.050% Senior Notes Due 2050

PEP50

The Nasdaq Stock Market LLC

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

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

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


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

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

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

Number of shares of Common Stock outstanding as of April 18, 2023 was 1,377,693,115.

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PepsiCo, Inc. and Subsidiaries

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		Page No.
Part I Financial Information
Item 1.	Condensed Consolidated Financial Statements	2
	Condensed Consolidated Statement of Income – 12 Weeks End ed March 25 , 202 3 and March 19 , 20 2 2	2
	Condensed Consolidated Statement of Comprehensive Income – 12 Weeks Ended March 2 5 , 202 3 and March 19 , 20 2 2	3
	Condensed Consolidated Statement of Cash Flows – 12 Weeks Ended March 25 , 202 3 and March 19 , 202 2	4
	Condensed Consolidated Balance Sheet – March 25 , 202 3 and December 31 , 202 2	6
	Condensed Consolidated Statement of Equity – 12 Weeks Ended March 25 , 202 3 and March 19 , 202 2	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Report of Independent Registered Public Accounting Firm		40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
Part II Other Information
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 6.	Exhibits	42

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PART I FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements.

Condensed Consolidated Statement of Income

PepsiCo, Inc. and Subsidiaries

(in millions except per share amounts, unaudited)


	12 Weeks Ended
		3/25/2023		3/19/2022
Net Revenue		$	17,846	$	16,200
Cost of sales		7,988		7,433
Gross profit		9,858		8,767
Selling, general and administrative expenses		7,229		6,580
Gain associated with the Juice Transaction (a)		—		(3,322)
Impairment of intangible assets (see Notes 1 and 4)		—		242
Operating Profit		2,629		5,267
Other pension and retiree medical benefits income		61		134
Net interest expense and other		(200)		(240)
Income before income taxes		2,490		5,161
Provision for income taxes		546		888
Net income		1,944		4,273
Less: Net income attributable to noncontrolling interests		12		12
Net Income Attributable to PepsiCo		$	1,932	$	4,261
Net Income Attributable to PepsiCo per Common Share
Basic		$	1.40	$	3.08
Diluted		$	1.40	$	3.06
Weighted-average common shares outstanding
Basic		1,378		1,383
Diluted		1,384		1,391

(a)In the 12 weeks ended March 19, 2022, we sold our Tropicana, Naked and other select juice brands to PAI Partners for $3.5 billion in cash and a 39% noncontrolling interest in a joint venture, Tropicana Brands Group (TBG), operating across North America and Europe (Juice Transaction). See Note 12 for further information.

See accompanying notes to the condensed consolidated financial statements.

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Condensed Consolidated Statement of Comprehensive Income

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	12 Weeks Ended
		3/25/2023		3/19/2022
Net income		$	1,944	$	4,273
Other comprehensive loss, net of taxes:
Net currency translation adjustment		(235)		(560)
Net change on cash flow hedges		(59)		106
Net pension and retiree medical adjustments		(4)		13

Other		(1)		(4)
		(299)		(445)
Comprehensive income		1,645		3,828
Less: Comprehensive income attributable to noncontrolling interests		12		12
Comprehensive Income Attributable to PepsiCo		$	1,633	$	3,816

See accompanying notes to the condensed consolidated financial statements.

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Condensed Consolidated Statement of Cash Flows

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	12 Weeks Ended
	3/25/2023		3/19/2022
Operating Activities
Net income	$	1,944	$	4,273
Depreciation and amortization	590		555
Gain associated with the Juice Transaction	—		(3,322)


Impairment and other (credits)/charges	(13)		482
Operating lease right-of-use asset amortization	116		103
Share-based compensation expense	93		81
Restructuring and impairment charges	112		27
Cash payments for restructuring charges	(64)		(32)
Acquisition and divestiture-related charges	2		56
Cash payments for acquisition and divestiture-related charges	(4)		(17)
Pension and retiree medical plan expense/(income)	30		(1)
Pension and retiree medical plan contributions	(175)		(178)
Deferred income taxes and other tax charges and credits	78		257


Change in assets and liabilities:
Accounts and notes receivable	(348)		(837)
Inventories	(542)		(549)
Prepaid expenses and other current assets	(288)		(190)
Accounts payable and other current liabilities	(2,259)		(1,238)
Income taxes payable	290		489
Other, net	46		(133)
Net Cash Used for Operating Activities	(392)		(174)

Investing Activities
Capital spending	(581)		(522)
Sales of property, plant and equipment	19		3
Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets	(16)		(13)
Proceeds associated with the Juice Transaction	—		3,456
Other divestitures, sales of investments in noncontrolled affiliates and other assets	85		5
Short-term investments, by original maturity:
More than three months - purchases	(158)		—
More than three months - maturities	100		—

Three months or less, net	19		22
Other investing, net	—		4
Net Cash (Used for)/Provided by Investing Activities	(532)		2,955

(Continued on following page)

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Condensed Consolidated Statement of Cash Flows (continued)

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	12 Weeks Ended
	3/25/2023		3/19/2022
Financing Activities
Proceeds from issuances of long-term debt	$	2,986	$	—
Payments of long-term debt	(1,251)		(1,251)

Short-term borrowings, by original maturity:
More than three months - proceeds	393		559
More than three months - payments	(1)		—
Three months or less, net	491		647

Cash dividends paid	(1,608)		(1,505)
Share repurchases - common	(160)		(193)

Proceeds from exercises of stock options	46		49
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted	(116)		(85)
Other financing	(3)		(1)
Net Cash Provided by/(Used for) Financing Activities	777		(1,780)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(116)		(17)
Net (Decrease)/Increase in Cash and Cash Equivalents and Restricted Cash	(263)		984
Cash and Cash Equivalents and Restricted Cash, Beginning of Year	5,100		5,707
Cash and Cash Equivalents and Restricted Cash, End of Period	$	4,837	$	6,691

Supplemental Non-Cash Activity
Right-of-use assets obtained in exchange for lease obligations	$	213	$	100

See accompanying notes to the condensed consolidated financial statements.

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Condensed Consolidated Balance Sheet

PepsiCo, Inc. and Subsidiaries

(in millions except per share amounts)


	(Unaudited)
	3/25/2023		12/31/2022
ASSETS
Current Assets
Cash and cash equivalents	$	4,770	$	4,954
Short-term investments	434		394

Accounts and notes receivable, less allowance ($184 and $150, respectively)	10,469		10,163
Inventories:
Raw materials and packaging	2,435		2,366
Work-in-process	115		114
Finished goods	3,147		2,742
	5,697		5,222
Prepaid expenses and other current assets	1,057		806

Total Current Assets	22,427		21,539
Property, plant and equipment	50,022		49,784
Accumulated depreciation	(25,794)		(25,493)
Property, Plant and Equipment, net	24,228		24,291
Amortizable Intangible Assets, net	1,250		1,277
Goodwill	18,089		18,202
Other Indefinite-Lived Intangible Assets	14,273		14,309

Investments in Noncontrolled Affiliates	3,123		3,073
Deferred Income Taxes	4,211		4,204
Other Assets	5,441		5,292
Total Assets	$	93,042	$	92,187

LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations	$	4,281	$	3,414
Accounts payable and other current liabilities	21,556		23,371

Total Current Liabilities	25,837		26,785
Long-Term Debt Obligations	37,486		35,657
Deferred Income Taxes	4,039		4,133
Other Liabilities	8,505		8,339
Total Liabilities	75,867		74,914
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: 1,378 and 1,377 shares, respectively)	23		23
Capital in excess of par value	3,996		4,134
Retained earnings	68,142		67,800
Accumulated other comprehensive loss	(15,601)		(15,302)
Repurchased common stock, in excess of par value (489 and 490 shares, respectively)	(39,518)		(39,506)
Total PepsiCo Common Shareholders’ Equity	17,042		17,149
Noncontrolling interests	133		124
Total Equity	17,175		17,273
Total Liabilities and Equity	$	93,042	$	92,187

See accompanying notes to the condensed consolidated financial statements.

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Condensed Consolidated Statement of Equity

PepsiCo, Inc. and Subsidiaries

(in millions, except per share amounts, unaudited)


	12 Weeks Ended
		3/25/2023	3/19/2022
			Shares	Amount		Shares	Amount










Common Stock
Balance, beginning of period			1,377	$	23	1,383	$	23
Change in repurchased common stock			1	—		1	—
Balance, end of period			1,378	23		1,384	23
Capital in Excess of Par Value
Balance, beginning of period				4,134			4,001
Share-based compensation expense				94			83

Stock option exercises, RSUs and PSUs converted				(116)			(106)
Withholding tax on RSUs and PSUs converted				(116)			(85)

Balance, end of period				3,996			3,893
Retained Earnings
Balance, beginning of period				67,800			65,165

Net income attributable to PepsiCo				1,932			4,261
Cash dividends declared – common (a)				(1,590)			(1,492)

Balance, end of period				68,142			67,934
Accumulated Other Comprehensive Loss
Balance, beginning of period				(15,302)			(14,898)
Other comprehensive loss attributable to PepsiCo				(299)			(445)
Balance, end of period				(15,601)			(15,343)
Repurchased Common Stock
Balance, beginning of period			(490)	(39,506)		(484)	(38,248)
Share repurchases			(1)	(174)		(1)	(213)
Stock option exercises, RSUs and PSUs converted			2	162		2	156

Balance, end of period			(489)	(39,518)		(483)	(38,305)
Total PepsiCo Common Shareholders’ Equity				17,042			18,202
Noncontrolling Interests
Balance, beginning of period				124			108
Net income attributable to noncontrolling interest				12			12
Distributions to noncontrolling interests				(1)			—


Other, net				(2)			(2)
Balance, end of period				133			118
Total Equity				$	17,175		$	18,320

(a)Cash dividends declared per common share were $1.15 and $1.075 for the 12 weeks ended March 25, 2023 and March 19, 2022, respectively.

See accompanying notes to the condensed consolidated financial statements.

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Notes to the Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation and Our Divisions

Basis of Presentation

When used in this report, the terms “we,” “us,” “our,” “PepsiCo” and the “Company” mean PepsiCo, Inc. and its consolidated subsidiaries, collectively.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the rules and regulations for reporting the Quarterly Report on Form 10-Q (Form 10-Q). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (2022 Form 10-K). This report should be read in conjunction with our 2022 Form 10-K. In our opinion, these financial statements include all normal and recurring adjustments necessary for a fair presentation. The results for the 12 weeks ended March 25, 2023 are not necessarily indicative of the results expected for any future period or the full year.

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

While our financial results in the United States and Canada (North America) are reported on a 12-week basis, all of our international operations are reported on a monthly calendar basis for which the months of January and February are reflected in our results for the 12 weeks ended March 25, 2023 and March 19, 2022.

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

Our significant interim accounting policies include the recognition of a pro rata share of certain estimated annual sales incentives and certain advertising and marketing costs in proportion to revenue or volume, as applicable, and the recognition of income taxes using an estimated annual effective tax rate.

Unless otherwise noted, tabular dollars are in millions, except per share amounts. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Certain reclassifications were made to the prior year’s financial statements to conform to the current year presentation.

Our Divisions

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

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

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

3)PepsiCo Beverages North America (PBNA), which includes our beverage businesses in the United States and Canada;

4)Latin America (LatAm), which includes all of our beverage and convenient food businesses in Latin America;

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

6)Africa, Middle East and South Asia (AMESA), which includes all of our beverage and convenient food businesses in Africa, the Middle East and South Asia; and

7)Asia Pacific, Australia and New Zealand and China region (APAC), which includes all of our beverage and convenient food businesses in Asia Pacific, Australia and New Zealand, and China region.

Net revenue of each division is as follows:


	12 Weeks Ended
		3/25/2023		3/19/2022
FLNA		$	5,583	$	4,839
QFNA		777		713
PBNA		5,798		5,353
LatAm		1,777		1,474
Europe		1,886		1,797
AMESA		1,019		1,004
APAC		1,006		1,020
Total		$	17,846	$	16,200

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


	12 Weeks Ended
	3/25/2023				3/19/2022
	Beverages(a)		Convenient Foods		Beverages(a)		Convenient Foods
LatAm	10	%	90	%	10	%	90	%
Europe	45	%	55	%	50	%	50	%
AMESA	30	%	70	%	30	%	70	%
APAC	15	%	85	%	15	%	85	%
PepsiCo	40	%	60	%	40	%	60	%

(a)Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe divisions, is approximately 35% of our consolidated net revenue in each of the 12 weeks ended March 25, 2023 and March 19, 2022. Generally, our finished goods beverage operations produce higher net revenue but lower operating margin as compared to concentrate sold to authorized bottling partners for the manufacture of finished goods beverages.

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Operating profit of each division is as follows:


	12 Weeks Ended
		3/25/2023		3/19/2022
FLNA		$	1,599	$	1,296
QFNA		188		159
PBNA (a)		483		3,434
LatAm		364		323
Europe (a) (b)		71		(136)
AMESA		168		180
APAC		227		215
Total divisions		3,100		5,471
Corporate unallocated expenses		(471)		(204)
Total		$	2,629	$	5,267

(a)In the 12 weeks ended March 19, 2022, we recorded a gain of $3,024 million and $298 million in our PBNA and Europe divisions, respectively, associated with the Juice Transaction. The total after-tax amount was $2,870 million or $2.06 per share. See Note 12 for further information.

(b)In the 12 weeks ended March 19, 2022, we recognized impairment and other charges/credits as follows:

(1)Pre-tax charges of $241 million ($241 million after-tax or $0.17 per share), as a result of the Russia-Ukraine conflict, including impairment related to property, plant and equipment, allowance for expected credit losses, inventory write downs and other charges, with $140 million recorded in cost of sales, $100 million recorded in selling, general and administrative expenses and $1 million recorded in impairment of intangible assets.

(2)Pre-tax brand portfolio impairment charges of $241 million ($193 million after-tax or $0.14 per share) in impairment of intangible assets related to the repositioning or discontinuation of certain juice and dairy brands in Russia. See Note 4 for further information. For information on indefinite-lived intangible assets, see Notes 2 and 4 to our consolidated financial statements in our 2022 Form 10-K.

Note 2 - Recently Issued Accounting Pronouncements

Adopted

In September 2022, the Financial Accounting Standards Board issued guidance to enhance the transparency of supplier finance programs to allow financial statement users to understand the effect on working capital, liquidity and cash flows. The new guidance requires disclosure of key terms of the program, including a description of the payment terms, payment timing and assets pledged as security or other forms of guarantees provided to the finance provider or intermediary. Other requirements include the disclosure of the amount that remains unpaid as of the end of the reporting period, a description of where these obligations are presented in the balance sheet and a rollforward of the obligation during the annual period. We adopted the guidance in the first quarter of 2023, except for the rollforward, which is effective in fiscal year 2024 with early adoption permitted. We currently plan to adopt the rollforward guidance when effective. See Note 13 for disclosures currently required under this guidance.

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Note 3 - Restructuring and Impairment Charges

2019 Multi-Year Productivity Plan

We publicly announced a multi-year productivity plan on February 15, 2019 (2019 Productivity Plan) that will leverage new technology and business models to further simplify, harmonize and automate processes; re-engineer our go-to-market and information systems, including deploying the right automation for each market; and simplify our organization and optimize our manufacturing and supply chain footprint. To build on the successful implementation of the 2019 Productivity Plan, in 2022, we expanded and extended the plan through the end of 2028 to take advantage of additional opportunities within the initiatives described above. As a result, we expect to incur pre-tax charges of approximately $3.65 billion, including cash expenditures of approximately $2.9 billion. These pre-tax charges are expected to consist of approximately 55% of severance and other employee-related costs, 10% for asset impairments (all non-cash) resulting from plant closures and related actions, and 35% for other costs associated with the implementation of our initiatives.

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


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

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


	12 Weeks Ended
		3/25/2023		3/19/2022
Cost of sales		$	3	$	5
Selling, general and administrative expenses		110		22
Other pension and retiree medical benefits income (a)		(1)		—
Total restructuring and impairment charges		$	112	$	27
After-tax amount		$	98	$	21
Impact on net income attributable to PepsiCo per common share		$	(0.07)	$	(0.02)


	12 Weeks Ended			Plan to Date
		3/25/2023		3/19/2022		through 3/25/2023
FLNA		$	7	$	3	$	217
QFNA		—		—		19
PBNA		5		3		231
LatAm		5		6		176
Europe		89		7		432
AMESA		5		2		87
APAC		1		1		78
Corporate		1		5		230
		113		27		1,470
Other pension and retiree medical benefits (income)/expense (a)		(1)		—		97
Total		$	112	$	27	$	1,567

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

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	12 Weeks Ended			Plan to Date
		3/25/2023		3/19/2022		through 3/25/2023
Severance and other employee costs		$	92	$	11	$	899
Asset impairments		—		—		190
Other costs		20		16		478
Total		$	112	$	27	$	1,567

Severance and other employee costs primarily include severance and other termination benefits, as well as voluntary separation arrangements. Other costs primarily include costs associated with the implementation of our initiatives, including contract termination costs, consulting and other professional fees.

A summary of our 2019 Productivity Plan activity for the 12 weeks ended March 25, 2023 is as follows:


	Severance and Other Employee Costs		Other Costs		Total
Liability as of December 31, 2022	$	188	$	8	$	196
2023 restructuring charges	92		20		112
Cash payments	(44)		(20)		(64)
Non-cash charges and translation	(4)		—		(4)
Liability as of March 25, 2023	$	232	$	8	$	240

Substantially all of the restructuring accrual at March 25, 2023 is expected to be paid by the end of 2023.

Other Productivity Initiatives

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

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

See Notes 1 and 4 for impairment and other charges/credits taken related to the Russia-Ukraine conflict and brand portfolio impairment charges.

Note 4 - Intangible Assets

During the 12 weeks ended March 19, 2022, we repositioned or discontinued certain juice and dairy brands in Russia in our Europe division. As a result, we recognized pre-tax impairment charges (included in brand portfolio impairment charges) of $241 million ($193 million after-tax or $0.14 per share) in impairment of intangible assets, primarily related to indefinite-lived intangible assets. See Note 1 for further information.

For further information on indefinite-lived intangible assets, see Notes 2 and 4 to our consolidated financial statements in our 2022 Form 10-K.

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A summary of our amortizable intangible assets is as follows:


	3/25/2023						12/31/2022
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Acquired franchise rights	$	833	$	(202)	$	631	$	837	$	(200)	$	637
Customer relationships	563		(240)		323		571		(237)		334
Brands	1,085		(969)		116		1,097		(973)		124
Other identifiable intangibles	445		(265)		180		447		(265)		182
Total	$	2,926	$	(1,676)	$	1,250	$	2,952	$	(1,675)	$	1,277

Table of Contents

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


	Balance 12/31/2022		Translation and Other		Balance 3/25/2023

FLNA
Goodwill	$	451	$	(2)	$	449
Brands	251		—		251
Total	702		(2)		700
QFNA
Goodwill	189		—		189
Total	189		—		189
PBNA
Goodwill	11,947		(7)		11,940
Reacquired franchise rights	7,061		(12)		7,049
Acquired franchise rights	1,758		(2)		1,756
Brands	2,508		1		2,509
Total	23,274		(20)		23,254
LatAm
Goodwill	436		7		443
Brands	75		2		77
Total	511		9		520
Europe
Goodwill	3,646		(56)		3,590
Reacquired franchise rights	421		(8)		413
Acquired franchise rights	148		(1)		147
Brands	1,664		(1)