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Restructuring and Impairment Charges | 8 Months Ended
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Sep. 07, 2024
Restructuring and Related Activities [Abstract] |
Restructuring and Impairment Charges | 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 leverages new technology and business models to further simplify, harmonize and automate processes; re-engineers our go-to-market and information systems, including deploying the right automation for each market; and simplifies our organization and optimizes 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 |  | 36 Weeks Ended
| 9/7/2024 |  | 9/9/2023 |  | 9/7/2024 |  | 9/9/2023
Cost of sales | $ | 10 |  |  | $ | 4 |  |  | $ | 16 |  |  | $ | 10 |
Selling, general and administrative expenses | 228 |  |  | 79 |  |  | 377 |  |  | 278 |
Other pension and retiree medical benefits expense/(income) (a) | 7 |  |  | — |  |  | 22 |  |  | (1) |
Total restructuring and impairment charges | $ | 245 |  |  | $ | 83 |  |  | $ | 415 |  |  | $ | 287 |
After-tax amount | $ | 195 |  |  | $ | 67 |  |  | $ | 325 |  |  | $ | 228 |
Impact on net income attributable to PepsiCo per common share | $ | (0.14) |  |  | $ | (0.05) |  |  | $ | (0.24) |  |  | $ | (0.16) |
| 12 Weeks Ended |  | 36 Weeks Ended |  | Plan-to-Date
| 9/7/2024 |  | 9/9/2023 |  | 9/7/2024 |  | 9/9/2023 |  | through 9/7/2024
FLNA | $ | 8 |  |  | $ | 6 |  |  | $ | 43 |  |  | $ | 19 |  |  | $ | 295 |
QFNA | — |  |  | — |  |  | 4 |  |  | — |  |  | 23 |
PBNA | 128 |  |  | 8 |  |  | 143 |  |  | 18 |  |  | 410 |
LatAm | 11 |  |  | 8 |  |  | 32 |  |  | 19 |  |  | 232 |
Europe | 46 |  |  | 44 |  |  | 83 |  |  | 185 |  |  | 649 |
AMESA | 4 |  |  | 5 |  |  | 7 |  |  | 10 |  |  | 104 |
APAC | 2 |  |  | 2 |  |  | 6 |  |  | 7 |  |  | 91 |
Corporate | 39 |  |  | 10 |  |  | 75 |  |  | 30 |  |  | 392 |
| 238 |  |  | 83 |  |  | 393 |  |  | 288 |  |  | 2,196 |
Other pension and retiree medical benefits expense/(income) (a) | 7 |  |  | — |  |  | 22 |  |  | (1) |  |  | 119 |
Total | $ | 245 |  |  | $ | 83 |  |  | $ | 415 |  |  | $ | 287 |  |  | $ | 2,315 |
(a)Income amount represents adjustments for changes in estimates of previously recorded amounts.
| 12 Weeks Ended |  | 36 Weeks Ended |  | Plan-to-Date
| 9/7/2024 |  | 9/9/2023 |  | 9/7/2024 |  | 9/9/2023 |  | through 9/7/2024
Severance and other employee costs | $ | 151 |  |  | $ | 39 |  |  | $ | 233 |  |  | $ | 181 |  |  | $ | 1,283 |
Asset impairments | 30 |  |  | 1 |  |  | 34 |  |  | 1 |  |  | 226 |
Other costs | 64 |  |  | 43 |  |  | 148 |  |  | 105 |  |  | 806 |
Total | $ | 245 |  |  | $ | 83 |  |  | $ | 415 |  |  | $ | 287 |  |  | $ | 2,315 |
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 consulting and other professional fees, as well as contract termination costs. A summary of our 2019 Productivity Plan activity for the 36 weeks ended September 7, 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 | 233 |  |  | 34 |  |  | 148 |  |  | 415 |
Cash payments | (131) |  |  | — |  |  | (153) |  |  | (284) |
Non-cash charges and translation | (17) |  |  | (34) |  |  | 22 |  |  | (29) |
Liability as of September 7, 2024 | $ | 273 |  |  | $ | — |  |  | $ | 26 |  |  | $ | 299 |
Substantially all of the restructuring accrual at September 7, 2024 is expected to be paid by the end of 2025. 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.

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- Definition The entire disclosure of costs incurred for restructuring including, but not limited to, exit and disposal activities, remediation, implementation, integration, asset impairment, and charges against earnings from the write-down of assets. + References No definition available. + Details
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