Restructuring and Impairment Charges

3 Months Ended

Mar. 23, 2024

Restructuring and Related Activities [Abstract]

2019 Multi-Year Productivity Plan

We publicly announced a multi-year productivity plan on February 15, 2019 (2019 Productivity Plan) that leverages 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	10	%	1	%	30	%	10	%	25	%	5	%	4	%	15	%

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


	12 Weeks Ended
		3/23/2024		3/25/2023
Cost of sales		$	6	$	3
Selling, general and administrative expenses		83		110
Other pension and retiree medical benefits expense/(income) (a)		7		(1)
Total restructuring and impairment charges		$	96	$	112
After-tax amount		$	76	$	98
Impact on net income attributable to PepsiCo per common share		$	(0.05)	$	(0.07)


	12 Weeks Ended			Plan to Date
		3/23/2024		3/25/2023		through 3/23/2024
FLNA		$	22	$	7	$	274
QFNA		4		—		23
PBNA		10		5		277
LatAm		5		5		205
Europe		18		89		584
AMESA		—		5		97
APAC		—		1		85
Corporate		30		1		347
		89		113		1,892
Other pension and retiree medical benefits expense/(income) (a)		7		(1)		104
Total		$	96	$	112	$	1,996

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


	12 Weeks Ended			Plan to Date
		3/23/2024		3/25/2023		through 3/23/2024
Severance and other employee costs		$	72	$	92	$	1,122
Asset impairments		1		—		193
Other costs		23		20		681
Total		$	96	$	112	$	1,996

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 23, 2024 is as follows:


	Severance and Other Employee Costs		Asset Impairments		Other Costs		Total
Liability as of December 30, 2023	$	188	$	—	$	9	$	197
2024 restructuring charges	72		1		23		96
Cash payments	(39)		—		(21)		(60)
Non-cash charges and translation	(5)		(1)		(1)		(7)
Liability as of March 23, 2024	$	216	$	—	$	10	$	226

Substantially all of the restructuring accrual at March 23, 2024 is expected to be paid by the end of 2024.

Other Productivity Initiatives

There were no material 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.