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Basis of Presentation and Our Divisions (Tables) | 8 Months Ended
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Sep. 03, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Summary of Segment Reporting Information By Net Revenue | Net revenue of each division is as follows:
| 12 Weeks Ended |  | 36 Weeks Ended
| 9/3/2022 |  | 9/4/2021 |  | 9/3/2022 |  | 9/4/2021
FLNA | $ | 5,563 |  |  | $ | 4,653 |  |  | $ | 15,583 |  |  | $ | 13,441 |
QFNA | 713 |  |  | 618 |  |  | 2,101 |  |  | 1,839 |
PBNA | 6,635 |  |  | 6,402 |  |  | 18,108 |  |  | 17,632 |
LatAm | 2,517 |  |  | 2,100 |  |  | 6,406 |  |  | 5,309 |
Europe | 3,646 |  |  | 3,612 |  |  | 8,466 |  |  | 8,693 |
AMESA | 1,726 |  |  | 1,665 |  |  | 4,426 |  |  | 4,150 |
APAC | 1,171 |  |  | 1,139 |  |  | 3,306 |  |  | 3,162 |
Total | $ | 21,971 |  |  | $ | 20,189 |  |  | $ | 58,396 |  |  | $ | 54,226 |
Summary of Segment Reporting Information by Percentage of Disaggregated Net Revenue | 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
| 9/3/2022 |  | 9/4/2021
| Beverages(a) |  | Convenient Foods |  | Beverages(a) |  | Convenient Foods
LatAm | 10 | % |  | 90 | % |  | 10 | % |  | 90 | %
Europe | 55 | % |  | 45 | % |  | 55 | % |  | 45 | %
AMESA | 35 | % |  | 65 | % |  | 35 | % |  | 65 | %
APAC | 25 | % |  | 75 | % |  | 25 | % |  | 75 | %
PepsiCo | 45 | % |  | 55 | % |  | 45 | % |  | 55 | %
| 36 Weeks Ended |  |  |  |  |
| 9/3/2022 |  | 9/4/2021 |  |  |  |  |
| Beverages(a) |  | Convenient Foods |  | Beverages(a) |  | Convenient Foods |  |  |  |  |
LatAm | 10 | % |  | 90 | % |  | 10 | % |  | 90 | % |  |  |  |  |
Europe | 50 | % |  | 50 | % |  | 55 | % |  | 45 | % |  |  |  |  |
AMESA | 35 | % |  | 65 | % |  | 35 | % |  | 65 | % |  |  |  |  |
APAC | 25 | % |  | 75 | % |  | 25 | % |  | 75 | % |  |  |  |  |
PepsiCo | 45 | % |  | 55 | % |  | 45 | % |  | 55 | % |  |  |  |  |
(a)Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe divisions, is approximately 40% of our consolidated net revenue in each of the 12 and 36 weeks ended September 3, 2022 and September 4, 2021. 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.
Summary of Segment Reporting Information by Operating Profit | Operating profit of each division is as follows:
| 12 Weeks Ended |  | 36 Weeks Ended
| 9/3/2022 |  | 9/4/2021 |  | 9/3/2022 |  | 9/4/2021
FLNA | $ | 1,588 |  |  | $ | 1,357 |  |  | $ | 4,332 |  |  | $ | 3,979 |
QFNA | 122 |  |  | 106 |  |  | 416 |  |  | 384 |
PBNA (a) (b) | 784 |  |  | 773 |  |  | 4,869 |  |  | 1,948 |
LatAm (c) | 463 |  |  | 393 |  |  | 1,206 |  |  | 967 |
Europe (a) (d) | 564 |  |  | 439 |  |  | (369) |  |  | 975 |
AMESA | 268 |  |  | 312 |  |  | 738 |  |  | 706 |
APAC | 199 |  |  | 201 |  |  | 620 |  |  | 601 |
Total divisions | 3,988 |  |  | 3,581 |  |  | 11,812 |  |  | 9,560 |
Corporate unallocated expenses (e) (f) | (635) |  |  | (422) |  |  | (1,115) |  |  | (960) |
Total | $ | 3,353 |  |  | $ | 3,159 |  |  | $ | 10,697 |  |  | $ | 8,600 |
(a)In the 12 weeks ended September 3, 2022, we recorded a charge of $8 million and $6 million in our PBNA and Europe divisions, respectively, associated with the Juice Transaction. The total after-tax amount was $11 million or $0.01 per share. In the 36 weeks ended September 3, 2022, we recorded a gain of $3,029 million and $292 million in our PBNA and Europe divisions, respectively, associated with the Juice Transaction. The total after-tax amount was $2,869 million or $2.07 per share. See Note 11 for further information. (b)As a result of terminating our agreement with Vital Pharmaceuticals, Inc. (Vital) to distribute Bang energy drinks in our PBNA division, in the 12 weeks ended September 3, 2022, we recognized pre-tax charges (Brand Portfolio Impairment Charges) of $9 million ($7 million after-tax or $0.01 per share) related to the write-down of inventory in cost of sales. In the 36 weeks ended September 3, 2022, we recognized pre-tax impairment and other charges of $150 million ($114 million after-tax or $0.08 per share) primarily related to the write-off of distribution rights, with $17 million recorded in cost of sales, $7 million recorded in selling, general and administrative expenses and $126 million recorded in impairment of intangible assets. See Note 3 for further information. (c)In the 36 weeks ended September 3, 2022, we made the decision to sell or discontinue certain non-strategic brands in our LatAm division. As a result, we recognized pre-tax impairment and other charges (Brand Portfolio Impairment Charges) of $83 million ($56 million after-tax or $0.04 per share) primarily related to property, plant and equipment and intangible assets, with $47 million recorded in selling, general and administrative expenses and $36 million recorded in impairment of intangible assets. See Note 3 for further information. (d)In the 36 weeks ended September 3, 2022, we recorded pre-tax impairment charges (Brand Portfolio Impairment Charges) of $241 million ($193 million after-tax or $0.14 per share) in impairment of intangible assets related to the discontinuation or repositioning of certain juice and dairy brands in Russia. See Note 3 for further information. Also see below for charges taken as a result of the Russia-Ukraine conflict. (e)In the 36 weeks ended September 3, 2022, we recorded a pre-tax loss on certain equity investments of $68 million ($51 million after-tax or $0.04 per share) in selling, general and administrative expenses. (f)In the 36 weeks ended September 4, 2021, we sold our short-term investment in a publicly traded company and recorded a pre-tax net gain of $69 million ($52 million after-tax or $0.04 per share), net of discounts, in selling, general and administrative expenses associated with this sale.
Schedule of Pre-Tax Charges | A summary of pre-tax charges taken in our Europe division as a result of the Russia-Ukraine conflict is as follows:
| 9/3/2022 |  |  |  |
| 12 Weeks Ended |  |  |  | 36 Weeks Ended |  |  |  |
Impairment charges related to intangible assets (a) | $ | — |  |  |  |  | $ | 1,198 |  |  |  |  |
Impairment charges related to property, plant and equipment | 2 |  |  |  |  | 125 |  |  |  |  |
(Recovery of)/allowance for expected credit losses (b) | (9) |  |  |  |  | 17 |  |  |  |  |
Allowance for inventory write-downs | 1 |  |  |  |  | 26 |  |  |  |  |
Other | 2 |  |  |  |  | 36 |  |  |  |  |
Total | $ | (4) |  |  |  |  | $ | 1,402 |  |  |  |  |
After-tax amount | $ | (5) |  |  |  |  | $ | 1,163 |  |  |  |  |
Impact on net income attributable to PepsiCo per common share | $ | — |  |  |  |  | $ | (0.84) |  |  |  |  |
| 9/3/2022
| 12 Weeks Ended |  | 36 Weeks Ended
Cost of sales | $ | 1 |  |  | $ | 134 |
Selling, general and administrative expenses (b) | (5) |  |  | 70 |
Impairment of intangible assets (a) | — |  |  | 1,198 |
Total | $ | (4) |  |  | $ | 1,402 |
(a)See Note 3 for further information. For information on our policies for indefinite-lived intangible assets, refer to Note 2 to our consolidated financial statements in our 2021 Form 10-K. (b)Income amounts primarily relate to changes in estimates. A summary of pre-tax charges related to the impairment of intangible assets is as follows:
| 9/3/2022
| 12 Weeks Ended |  | 36 Weeks Ended
Russia-Ukraine conflict impairment charges | $ | — |  |  | $ | 1,198 |
Brand Portfolio Impairment Charges | 1 |  |  | 404 |
Total | $ | 1 |  |  | $ | 1,602 |
Operating profit includes certain pre-tax charges taken as a result of the COVID-19 pandemic, primarily related to incremental employee compensation costs, such as certain leave benefits and labor costs, and employee protection costs. These pre-tax charges by division are as follows:
| 12 Weeks Ended |  | 36 Weeks Ended
| 9/3/2022 |  | 9/4/2021 |  | 9/3/2022 |  | 9/4/2021
FLNA | $ | 5 |  |  | $ | 6 |  |  | $ | 24 |  |  | $ | 44 |
QFNA (a) | — |  |  | (1) |  |  | 1 |  |  | 2 |
PBNA (a) | 6 |  |  | (12) |  |  | 17 |  |  | (10) |
LatAm | 3 |  |  | 17 |  |  | 13 |  |  | 49 |
Europe | 1 |  |  | 3 |  |  | 4 |  |  | 18 |
AMESA | 2 |  |  | 3 |  |  | 5 |  |  | 5 |
APAC | 3 |  |  | 2 |  |  | 16 |  |  | 6 |
Total | $ | 20 |  |  | $ | 18 |  |  | $ | 80 |  |  | $ | 114 |
(a)Income amounts primarily relate to allowances for expected credit losses and upfront payments to customers, due to improved projected default rates and lower at-risk balances.

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