XML 25 R9.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Basis of Presentation and Our Divisions | 12 Months Ended
--- | ---
Dec. 25, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Basis Of Presentation and Our Divisions | Basis of Presentation and Our Divisions Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. GAAP and include the consolidated accounts of PepsiCo, Inc. and the affiliates that we control. In addition, we include our share of the results of certain other affiliates using the equity method based on our economic ownership interest, our ability to exercise significant influence over the operating or financial decisions of these affiliates or our ability to direct their economic resources. We do not control these other affiliates, as our ownership in these other affiliates is generally 50% or less. Intercompany balances and transactions are eliminated. As a result of exchange restrictions and other operating restrictions, we do not have control over our Venezuelan subsidiaries. As such, our Venezuelan subsidiaries are not included within our consolidated financial results for any period presented. 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. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities. Estimates are used in determining, among other items, sales incentives accruals, tax reserves, share-based compensation, pension and retiree medical accruals, amounts and useful lives for intangible assets and future cash flows associated with impairment testing for indefinite-lived intangible assets, goodwill and other long-lived assets. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. Additionally, the business and economic uncertainty resulting from the COVID-19 pandemic has made such estimates and assumptions more difficult to calculate. As future events and their effect cannot be determined with precision, actual results could differ significantly from those estimates. Our fiscal year ends on the last Saturday of each December, resulting in a 53 rd reporting week every five or six years, including in our 2022 financial results. While our North America results are reported on a weekly calendar basis, substantially all of our international operations reported on a monthly calendar basis prior to the fourth quarter of 2021, and beginning in the fourth quarter of 2021, all of our international operations report on a monthly calendar basis. This change did not have a material impact on our consolidated financial statements. The following chart details our quarterly reporting schedule for the three years presented:
Quarter |  | United States and Canada |  | International
First Quarter |  | 12 weeks |  | January, February
Second Quarter |  | 12 weeks |  | March, April and May
Third Quarter |  | 12 weeks |  | June, July and August
Fourth Quarter |  | 16 weeks |  | September, October, November and December
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 consolidated 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)FLNA, which includes our branded convenient food businesses in the United States and Canada; 2)QFNA, which includes our branded convenient food businesses, such as cereal, rice, pasta and other branded food, in the United States and Canada; 3)PBNA, which includes our beverage businesses in the United States and Canada; 4)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)AMESA, which includes all of our beverage and convenient food businesses in Africa, the Middle East and South Asia; and 7)APAC, which includes all of our beverage and convenient food businesses in Asia Pacific, Australia and New Zealand, and China region. Through our operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of beverages and convenient foods, serving customers and consumers in more than 200 countries and territories with our largest operations in the United States, Mexico, Russia, Canada, China, the United Kingdom and South Africa. The accounting policies for the divisions are the same as those described in Note 2, except for the following allocation methodologies: •share-based compensation expense; •pension and retiree medical expense; and •derivatives. Share-Based Compensation Expense Our divisions are held accountable for share-based compensation expense and, therefore, this expense is allocated to our divisions as an incremental employee compensation cost. The allocation of share-based compensation expense of each division is as follows:
| 2021 |  | 2020 |  | 2019
FLNA | 13 | % |  | 13 | % |  | 13 | %
QFNA | 1 | % |  | 1 | % |  | 1 | %
PBNA | 19 | % |  | 18 | % |  | 17 | %
LatAm | 5 | % |  | 6 | % |  | 7 | %
Europe | 13 | % |  | 16 | % |  | 17 | %
AMESA | 6 | % |  | 6 | % |  | 3 | %
APAC | 2 | % |  | 2 | % |  | 5 | %
Corporate unallocated expenses | 41 | % |  | 38 | % |  | 37 | %
The expense allocated to our divisions excludes any impact of changes in our assumptions during the year which reflect market conditions over which division management has no control. Therefore, any variances between allocated expense and our actual expense are recognized in corporate unallocated expenses. Pension and Retiree Medical Expense Pension and retiree medical service costs measured at fixed discount rates are reflected in division results. The variance between the fixed discount rate used to determine the service cost reflected in division results and the discount rate as disclosed in Note 7 is reflected in corporate unallocated expenses. Derivatives We centrally manage commodity derivatives on behalf of our divisions. These commodity derivatives include agricultural products, energy and metals. Commodity derivatives that do not qualify for hedge accounting treatment are marked to market each period with the resulting gains and losses recorded in corporate unallocated expenses as either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. These gains and losses are subsequently reflected in division results when the divisions recognize the cost of the underlying commodity in operating profit. Therefore, the divisions realize the economic effects of the derivative without experiencing any resulting mark-to-market volatility, which remains in corporate unallocated expenses. These derivatives hedge underlying commodity price risk and were not entered into for trading or speculative purposes. Net Revenue and Operating Profit Net revenue and operating profit of each division are as follows:
| Net Revenue |  | Operating Profit
| 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019
FLNA | $ | 19,608 |  |  | $ | 18,189 |  |  | $ | 17,078 |  |  | $ | 5,633 |  |  | $ | 5,340 |  |  | $ | 5,258 |
QFNA | 2,751 |  |  | 2,742 |  |  | 2,482 |  |  | 578 |  |  | 669 |  |  | 544 |
PBNA | 25,276 |  |  | 22,559 |  |  | 21,730 |  |  | 2,442 |  |  | 1,937 |  |  | 2,179 |
LatAm | 8,108 |  |  | 6,942 |  |  | 7,573 |  |  | 1,369 |  |  | 1,033 |  |  | 1,141 |
Europe | 13,038 |  |  | 11,922 |  |  | 11,728 |  |  | 1,292 |  |  | 1,353 |  |  | 1,327 |
AMESA (a) | 6,078 |  |  | 4,573 |  |  | 3,651 |  |  | 858 |  |  | 600 |  |  | 671 |
APAC (b) | 4,615 |  |  | 3,445 |  |  | 2,919 |  |  | 673 |  |  | 590 |  |  | 477 |
Total division | 79,474 |  |  | 70,372 |  |  | 67,161 |  |  | 12,845 |  |  | 11,522 |  |  | 11,597 |
Corporate unallocated expenses | — |  |  | — |  |  | — |  |  | (1,683) |  |  | (1,442) |  |  | (1,306) |
Total | $ | 79,474 |  |  | $ | 70,372 |  |  | $ | 67,161 |  |  | $ | 11,162 |  |  | $ | 10,080 |  |  | $ | 10,291 |
(a)The increase in net revenue reflects our acquisition of Pioneer Foods. See Note 13 for further information. (b)The increase in net revenue reflects our acquisition of Be & Cheery. See Note 13 for further information. Our primary performance obligation is the distribution and sales of beverage and convenient food products to our customers. The following table reflects 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:
| 2021 |  | 2020 |  | 2019
| Beverage(a) |  | Convenient Food |  | Beverage(a) |  | Convenient Food |  | Beverage(a) |  | Convenient Food
LatAm | 10 | % |  | 90 | % |  | 10 | % |  | 90 | % |  | 10 | % |  | 90 | %
Europe | 55 | % |  | 45 | % |  | 55 | % |  | 45 | % |  | 55 | % |  | 45 | %
AMESA (b) | 30 | % |  | 70 | % |  | 30 | % |  | 70 | % |  | 40 | % |  | 60 | %
APAC | 20 | % |  | 80 | % |  | 25 | % |  | 75 | % |  | 25 | % |  | 75 | %
PepsiCo | 45 | % |  | 55 | % |  | 45 | % |  | 55 | % |  | 45 | % |  | 55 | %
(a)Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe segments, is approximately 40% of our consolidated net revenue. Generally, our finished goods beverage operations produce higher net revenue, but lower operating margins as compared to concentrate sold to authorized bottling partners for the manufacture of finished goods beverages. (b)The increase in the approximate percentage of net revenue generated by our convenient food business in 2020 primarily reflects our acquisition of Pioneer Foods. See Note 13 for further information. Operating profit in 2021 and 2020 includes certain pre-tax charges/credits taken as a result of the COVID-19 pandemic. These pre-tax charges/credits by division are as follows:
| 2021
| Allowances for Expected Credit Losses(a) |  | Upfront Payments to Customers(b) |  | Inventory Write-Downs and Product Returns(c) |  | Employee Compensation Expense(d) |  | Employee Protection Costs(e) |  | Other(f) |  | Total
FLNA | $ | (8) |  |  | $ | — |  |  | $ | — |  |  | $ | 35 |  |  | $ | 27 |  |  | $ | 2 |  |  | $ | 56 |
QFNA | (1) |  |  | — |  |  | — |  |  | 2 |  |  | 1 |  |  | — |  |  | 2 |
PBNA | (19) |  |  | (21) |  |  | — |  |  | 31 |  |  | 14 |  |  | (16) |  |  | (11) |
LatAm | — |  |  | — |  |  | 1 |  |  | 44 |  |  | 15 |  |  | 4 |  |  | 64 |
Europe | (3) |  |  | (2) |  |  | — |  |  | 13 |  |  | 8 |  |  | 5 |  |  | 21 |
AMESA | (1) |  |  | — |  |  | (2) |  |  | 1 |  |  | 3 |  |  | 6 |  |  | 7 |
APAC | — |  |  | — |  |  | — |  |  | 2 |  |  | 2 |  |  | 5 |  |  | 9 |
Total | $ | (32) |  |  | $ | (23) |  |  | $ | (1) |  |  | $ | 128 |  |  | $ | 70 |  |  | $ | 6 |  |  | $ | 148 |
| 2020
| Allowances for Expected Credit Losses(a) |  | Upfront Payments to Customers(b) |  | Inventory Write-Downs and Product Returns(c) |  | Employee Compensation Expense(d) |  | Employee Protection Costs(e) |  | Other(f) |  | Total
FLNA | $ | 17 |  |  | $ | — |  |  | $ | 8 |  |  | $ | 145 |  |  | $ | 59 |  |  | $ | — |  |  | $ | 229 |
QFNA | 2 |  |  | — |  |  | — |  |  | 9 |  |  | 3 |  |  | 1 |  |  | 15 |
PBNA | 29 |  |  | 56 |  |  | 28 |  |  | 115 |  |  | 50 |  |  | 26 |  |  | 304 |
LatAm | 1 |  |  | — |  |  | 19 |  |  | 56 |  |  | 18 |  |  | 8 |  |  | 102 |
Europe | 5 |  |  | 3 |  |  | 11 |  |  | 23 |  |  | 22 |  |  | 24 |  |  | 88 |
AMESA | 2 |  |  | — |  |  | 3 |  |  | 9 |  |  | 7 |  |  | 12 |  |  | 33 |
APAC | — |  |  | — |  |  | 3 |  |  | (7) |  |  | 2 |  |  | 5 |  |  | 3 |
Total | $ | 56 |  |  | $ | 59 |  |  | $ | 72 |  |  | $ | 350 |  |  | $ | 161 |  |  | $ | 76 |  |  | $ | 774 |
(a)Reflects the expected impact of the global economic uncertainty caused by COVID-19, leveraging estimates of creditworthiness and projections of default and recovery rates for certain of our customers, including foodservice and vending businesses. Income amounts represent reductions in the previously recorded reserves due to improved projected default rates and lower at-risk receivable balances. (b)Relates to promotional spending for which benefit is not expected to be received. Income amounts represent reductions in previously recorded reserves due to improved projected default rates and lower overall advance balances. (c)Income amount represents a true-up of inventory write-downs. Includes a reserve for product returns of $20 million in 2020. (d)Includes incremental frontline incentive pay, crisis child care and other leave benefits and labor costs. Income amount includes a social welfare relief credit of $11 million. (e)Includes costs associated with personal protective equipment, temperature scans, cleaning and other sanitization services. (f)Includes certain reserves for property, plant and equipment, donations of cash and product, and other costs. Income amount represents adjustments for changes in estimates of previously recorded amounts. Corporate Unallocated Expenses Corporate unallocated expenses include costs of our corporate headquarters, centrally managed initiatives such as commodity derivative gains and losses, foreign exchange transaction gains and losses, our ongoing business transformation initiatives, unallocated research and development costs, unallocated insurance and benefit programs, tax-related contingent consideration, certain acquisition and divestiture-related charges, as well as certain other items. Other Division Information Total assets and capital spending of each division are as follows:
| Total Assets |  | Capital Spending
| 2021 |  | 2020 |  | 2021 |  | 2020 |  | 2019
FLNA | $ | 9,763 |  |  | $ | 8,730 |  |  | $ | 1,411 |  |  | $ | 1,189 |  |  | $ | 1,227 |
QFNA | 1,101 |  |  | 1,021 |  |  | 92 |  |  | 85 |  |  | 104 |
PBNA | 37,801 |  |  | 37,079 |  |  | 1,275 |  |  | 1,245 |  |  | 1,053 |
LatAm | 7,272 |  |  | 6,977 |  |  | 461 |  |  | 390 |  |  | 557 |
Europe | 18,472 |  |  | 17,917 |  |  | 752 |  |  | 730 |  |  | 613 |
AMESA | 6,125 |  |  | 5,942 |  |  | 325 |  |  | 252 |  |  | 267 |
APAC | 5,654 |  |  | 5,770 |  |  | 203 |  |  | 230 |  |  | 195 |
Total division | 86,188 |  |  | 83,436 |  |  | 4,519 |  |  | 4,121 |  |  | 4,016 |
Corporate (a) | 6,189 |  |  | 9,482 |  |  | 106 |  |  | 119 |  |  | 216 |
Total | $ | 92,377 |  |  | $ | 92,918 |  |  | $ | 4,625 |  |  | $ | 4,240 |  |  | $ | 4,232 |
(a)Corporate assets consist principally of certain cash and cash equivalents, restricted cash, short-term investments, derivative instruments, property, plant and equipment and tax assets. In 2021, the change in assets was primarily due to a decrease in cash and cash equivalents and short-term investments. Refer to the cash flow statement for further information. Amortization of intangible assets and depreciation and other amortization of each division are as follows:
| Amortization of Intangible Assets |  | Depreciation and Other Amortization
| 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020 |  | 2019
FLNA | $ | 11 |  |  | $ | 10 |  |  | $ | 7 |  |  | $ | 594 |  |  | $ | 550 |  |  | $ | 492 |
QFNA | — |  |  | — |  |  | — |  |  | 46 |  |  | 41 |  |  | 44 |
PBNA | 25 |  |  | 28 |  |  | 29 |  |  | 926 |  |  | 899 |  |  | 857 |
LatAm | 4 |  |  | 4 |  |  | 5 |  |  | 283 |  |  | 251 |  |  | 270 |
Europe | 37 |  |  | 40 |  |  | 37 |  |  | 364 |  |  | 350 |  |  | 341 |
AMESA | 5 |  |  | 3 |  |  | 2 |  |  | 181 |  |  | 149 |  |  | 116 |
APAC | 9 |  |  | 5 |  |  | 1 |  |  | 102 |  |  | 91 |  |  | 76 |
Total division | 91 |  |  | 90 |  |  | 81 |  |  | 2,496 |  |  | 2,331 |  |  | 2,196 |
Corporate | — |  |  | — |  |  | — |  |  | 123 |  |  | 127 |  |  | 155 |
Total | $ | 91 |  |  | $ | 90 |  |  | $ | 81 |  |  | $ | 2,619 |  |  | $ | 2,458 |  |  | $ | 2,351 |
Net revenue and long-lived assets by country are as follows:
| Net Revenue |  | Long-Lived Assets(a)
| 2021 |  | 2020 |  | 2019 |  | 2021 |  | 2020
United States | $ | 44,545 |  |  | $ | 40,800 |  |  | $ | 38,644 |  |  | $ | 36,324 |  |  | $ | 36,657 |
Mexico | 4,580 |  |  | 3,924 |  |  | 4,190 |  |  | 1,720 |  |  | 1,708 |
Russia | 3,426 |  |  | 3,009 |  |  | 3,263 |  |  | 3,751 |  |  | 3,644 |
Canada | 3,405 |  |  | 2,989 |  |  | 2,831 |  |  | 2,846 |  |  | 2,794 |
China (b) | 2,679 |  |  | 1,732 |  |  | 1,300 |  |  | 1,745 |  |  | 1,649 |
United Kingdom | 2,102 |  |  | 1,882 |  |  | 1,723 |  |  | 906 |  |  | 874 |
South Africa (c) | 2,008 |  |  | 1,282 |  |  | 405 |  |  | 1,389 |  |  | 1,484 |
All other countries | 16,729 |  |  | 14,754 |  |  | 14,805 |  |  | 13,399 |  |  | 13,423 |
Total | $ | 79,474 |  |  | $ | 70,372 |  |  | $ | 67,161 |  |  | $ | 62,080 |  |  | $ | 62,233 |
(a)Long-lived assets represent property, plant and equipment, indefinite-lived intangible assets, amortizable intangible assets and investments in noncontrolled affiliates. See Note 2 and Note 14 for further information on property, plant and equipment. See Note 2 and Note 4 for further information on goodwill and other intangible assets. Investments in noncontrolled affiliates are evaluated for impairment upon a significant change in the operating or macroeconomic environment. These assets are reported in the country where they are primarily used. (b)The increase in net revenue reflects our acquisition of Be & Cheery. See Note 13 for further information. (c)The increase in net revenue reflects our acquisition of Pioneer Foods. See Note 13 for further information.

X
- References No definition available. + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -URI http://asc.fasb.org/topic&trid=2122149 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -URI http://asc.fasb.org/topic&trid=2197479 + Details
Name: | us-gaap_OrganizationConsolidationAndPresentationOfFinancialStatementsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration