Restructuring and Impairment Charges

8 Months Ended

Sep. 07, 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-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.