Restructuring and Impairment Charges Restructuring and Impairment Charges (Notes)

3 Months Ended

Mar. 20, 2021

Restructuring and Related Activities [Abstract]

Restructuring, Impairment, and Other Activities Disclosure [Text Block]

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. In connection with this plan, we expect to incur pre-tax charges of approximately $2.5 billion, including cash expenditures of approximately $1.6 billion. These pre-tax charges are expected to consist of approximately 65% of severance and other employee-related costs, 15% for asset impairments (all non-cash) resulting from plant closures and related actions, and 20% for other costs associated with the implementation of our initiatives. We expect to complete this plan by 2023.

The total expected 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	%	30	%	10	%	25	%	5	%	3	%	11	%

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


	12 Weeks Ended
		3/20/2021		3/21/2020
Cost of sales		$	2	$	2
Selling, general and administrative expenses		35		30
Other pension and retiree medical benefits expense		6		6
Total restructuring and impairment charges		$	43	$	38
After-tax amount		$	35	$	32
Net income attributable to PepsiCo per common share		$	(0.03)	$	(0.02)


	12 Weeks Ended			Plan to Date
		3/20/2021		3/21/2020		through 3/20/2021
FLNA		$	15	$	5	$	151
QFNA		—		1		12
PBNA		4		3		142
LatAm		2		5		104
Europe		11		8		164
AMESA		1		2		56
APAC		—		—		54
Corporate		4		8		94
		37		32		777
Other pension and retiree medical benefits expense		6		6		63
Total		$	43	$	38	$	840


	12 Weeks Ended			Plan to Date
		3/20/2021		3/21/2020		through 3/20/2021
Severance and other employee costs		$	34	$	22	$	478
Asset impairments		—		1		125
Other costs		9		15		237
Total		$	43	$	38	$	840

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 20, 2021 is as follows:


	Severance and Other Employee Costs		Other Costs		Total
Liability as of December 26, 2020	$	122	$	5	$	127
2021 restructuring charges	34		9		43
Cash payments	(37)		(12)		(49)
Non-cash charges and translation	(6)		1		(5)
Liability as of March 20, 2021	$	113	$	3	$	116

Substantially all of the restructuring accrual at March 20, 2021 is expected to be paid by the end of 2021.

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.