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Segment Reporting | 12 Months Ended
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Dec. 31, 2019
Segment Reporting [Abstract] |
Segment Reporting | Note 18. Segment Reporting We manufacture and market primarily snack food products, including biscuits (cookies, crackers and salted snacks), chocolate, gum & candy and various cheese & grocery products, as well as powdered beverage products. We manage our global business and report operating results through geographic units. We manage our operations by region to leverage regional operating scale, manage different and changing business environments more effectively and pursue growth opportunities as they arise across our key markets. Our regional management teams have responsibility for the business, product categories and financial results in the regions. Our operations and management structure are organized into four operating segments:
• | Latin America
• | AMEA
• | Europe
• | North America
We use segment operating income to evaluate segment performance and allocate resources. We believe it is appropriate to disclose this measure to help investors analyze segment performance and trends. Segment operating income excludes unrealized gains and losses on hedging activities (which are a component of cost of sales), general corporate expenses (which are a component of selling, general and administrative expenses), amortization of intangibles, gains and losses on divestitures and acquisition-related costs (which are a component of selling, general and administrative expenses) in all periods presented. We exclude these items from segment operating income in order to provide better transparency of our segment operating results. Furthermore, we centrally manage benefit plan non-service income and interest and other expense, net. Accordingly, we do not present these items by segment because they are excluded from the segment profitability measure that management reviews. Our segment net revenues and earnings, reflecting our current segment structure for all periods presented, were:
| For the Years Ended December 31,
| 2019 |  | 2018 |  | 2017
| (in millions)
Net revenues: |  |  |  |  |
Latin America | $ | 3,018 |  |  | $ | 3,202 |  |  | $ | 3,566 |
AMEA | 5,770 |  |  | 5,729 |  |  | 5,739 |
Europe | 9,972 |  |  | 10,122 |  |  | 9,794 |
North America | 7,108 |  |  | 6,885 |  |  | 6,797 |
Net revenues | $ | 25,868 |  |  | $ | 25,938 |  |  | $ | 25,896 |
Earnings before income taxes: |  |  |  |  |
Operating income: |  |  |  |  |
Latin America | $ | 341 |  |  | $ | 410 |  |  | $ | 564 |
AMEA | 691 |  |  | 702 |  |  | 514 |
Europe | 1,732 |  |  | 1,734 |  |  | 1,610 |
North America | 1,451 |  |  | 849 |  |  | 1,144 |
Unrealized gains/(losses) on hedging activities (mark-to-market impacts) | 91 |  |  | 141 |  |  | (96 | )
General corporate expenses | (330 | ) |  | (335 | ) |  | (282 | )
Amortization of intangibles | (174 | ) |  | (176 | ) |  | (178 | )
Net gains on divestitures | 44 |  |  | — |  |  | 186 |
Acquisition-related costs | (3 | ) |  | (13 | ) |  | — |
Operating income | 3,843 |  |  | 3,312 |  |  | 3,462 |
Benefit plan non-service income (1) | 60 |  |  | 50 |  |  | 44 |
Interest and other expense, net | (456 | ) |  | (520 | ) |  | (382 | )
Earnings before income taxes | $ | 3,447 |  |  | $ | 2,842 |  |  | $ | 3,124 |
(1) | During the first quarter of 2018, in connection with adopting a new pension cost classification accounting standard, we reclassified certain of our benefit plan component costs other than service costs out of operating income into a new line item, benefit plan non-service income, on our consolidated statements of earnings. As such, we have recast our historical operating income and segment operating income to reflect this reclassification, which had no impact to earnings before income taxes or net earnings.
No single customer accounted for 10% or more of our net revenues from continuing operations in 2019. Our five largest customers accounted for 17.0% and our ten largest customers accounted for 23.2% of net revenues from continuing operations in 2019. Items impacting our segment operating results are discussed in Note 1, Summary of Significant Accounting Policies, Note 2, Divestitures and Acquisitions, Note 4, Property, Plant and Equipment, Note 6, Goodwill and Intangible Assets, Note 8, Restructuring Program, and Note 14, Commitments and Contingencies. Also see Note 9, Debt and Borrowing Arrangements, and Note 10, Financial Instruments, for more information on our interest and other expense, net for each period. Total assets, depreciation expense and capital expenditures by segment, reflecting our current segment structure for all periods presented, were:
| For the Years Ended December 31,
| 2019 |  | 2018 |  | 2017
| (in millions)
Total assets: |  |  |  |  |
Latin America (1) | $ | 4,716 |  |  | $ | 4,699 |  |  | $ | 4,948 |
AMEA (1) | 9,740 |  |  | 9,571 |  |  | 9,883 |
Europe (1) | 20,354 |  |  | 19,426 |  |  | 21,611 |
North America (1) | 21,637 |  |  | 21,015 |  |  | 20,709 |
Equity method investments | 7,212 |  |  | 7,123 |  |  | 6,193 |
Unallocated assets and adjustments (2) | 890 |  |  | 895 |  |  | (387 | )
Total assets | $ | 64,549 |  |  | $ | 62,729 |  |  | $ | 62,957 |
(1) | Segment assets do not reflect outstanding intercompany asset balances as intercompany accounts have been eliminated at a segment level.
(2) | Unallocated assets consist primarily of cash and cash equivalents, deferred income taxes, centrally held property, plant and equipment, prepaid pension assets and derivative financial instrument balances. Final adjustments for jurisdictional netting of deferred tax assets and liabilities is done at a consolidated level.
| For the Years Ended December 31,
| 2019 |  | 2018 |  | 2017
| (in millions)
Depreciation expense (1): |  |  |  |  |
Latin America | $ | 105 |  |  | $ | 97 |  |  | $ | 107 |
AMEA | 164 |  |  | 159 |  |  | 157 |
Europe | 238 |  |  | 248 |  |  | 239 |
North America | 138 |  |  | 131 |  |  | 135 |
Total depreciation expense | $ | 645 |  |  | $ | 635 |  |  | $ | 638 |
(1) | Includes depreciation expense related to owned property, plant and equipment. Does not include amortization of intangible assets or leased assets. Refer to the consolidated statement of cash flows for 2019 for total depreciation and amortization expenses.
| For the Years Ended December 31,
| 2019 |  | 2018 |  | 2017
| (in millions)
Capital expenditures: |  |  |  |  |
Latin America | $ | 197 |  |  | $ | 261 |  |  | $ | 226 |
AMEA | 244 |  |  | 277 |  |  | 280 |
Europe | 297 |  |  | 326 |  |  | 278 |
North America | 187 |  |  | 231 |  |  | 230 |
Total capital expenditures | $ | 925 |  |  | $ | 1,095 |  |  | $ | 1,014 |
Geographic data for net revenues (recognized in the countries where products are sold) and long-lived assets, excluding deferred tax, goodwill, intangible assets and equity method investments, were:
| For the Years Ended December 31,
| 2019 |  | 2018 |  | 2017
| (in millions)
Net revenues: |  |  |  |  |
United States | $ | 6,625 |  |  | $ | 6,401 |  |  | $ | 6,275 |
Other | 19,243 |  |  | 19,537 |  |  | 19,621 |
Total net revenues | $ | 25,868 |  |  | $ | 25,938 |  |  | $ | 25,896 |
| As of December 31,
| 2019 |  | 2018 |  | 2017
| (in millions)
Long-lived assets: |  |  |  |  |
United States | $ | 1,806 |  |  | $ | 1,481 |  |  | $ | 1,468 |
Other | 8,370 |  |  | 7,539 |  |  | 7,733 |
Total long-lived assets | $ | 10,176 |  |  | $ | 9,020 |  |  | $ | 9,201 |
No individual country within Other exceeded 10% of our net revenues or long-lived assets for all periods presented. Net revenues by product category, reflecting our current segment structure for all periods presented, were:
| For the Year Ended December 31, 2019
| Latin America |  | AMEA |  | Europe |  | North America |  | Total
| (in millions)
Biscuits | $ | 708 |  |  | $ | 1,844 |  |  | $ | 2,998 |  |  | $ | 5,888 |  |  | $ | 11,438 |
Chocolate | 710 |  |  | 2,082 |  |  | 5,119 |  |  | 247 |  |  | 8,158 |
Gum & Candy | 823 |  |  | 861 |  |  | 698 |  |  | 973 |  |  | 3,355 |
Beverages | 452 |  |  | 546 |  |  | 97 |  |  | — |  |  | 1,095 |
Cheese & Grocery | 325 |  |  | 437 |  |  | 1,060 |  |  | — |  |  | 1,822 |
Total net revenues | $ | 3,018 |  |  | $ | 5,770 |  |  | $ | 9,972 |  |  | $ | 7,108 |  |  | $ | 25,868 |
| For the Year Ended December 31, 2018
| Latin America |  | AMEA |  | Europe |  | North America |  | Total
| (in millions)
Biscuits | $ | 727 |  |  | $ | 1,724 |  |  | $ | 3,127 |  |  | $ | 5,607 |  |  | $ | 11,185 |
Chocolate | 747 |  |  | 2,080 |  |  | 5,083 |  |  | 267 |  |  | 8,177 |
Gum & Candy | 865 |  |  | 879 |  |  | 736 |  |  | 1,011 |  |  | 3,491 |
Beverages | 533 |  |  | 553 |  |  | 98 |  |  | — |  |  | 1,184 |
Cheese & Grocery | 330 |  |  | 493 |  |  | 1,078 |  |  | — |  |  | 1,901 |
Total net revenues | $ | 3,202 |  |  | $ | 5,729 |  |  | $ | 10,122 |  |  | $ | 6,885 |  |  | $ | 25,938 |
| For the Year Ended December 31, 2017
| Latin America |  | AMEA |  | Europe |  | North America |  | Total
| (in millions)
Biscuits | $ | 779 |  |  | $ | 1,637 |  |  | $ | 2,944 |  |  | $ | 5,479 |  |  | $ | 10,839 |
Chocolate | 862 |  |  | 2,008 |  |  | 4,869 |  |  | 293 |  |  | 8,032 |
Gum & Candy | 919 |  |  | 919 |  |  | 775 |  |  | 1,025 |  |  | 3,638 |
Beverages | 665 |  |  | 569 |  |  | 121 |  |  | — |  |  | 1,355 |
Cheese & Grocery | 341 |  |  | 606 |  |  | 1,085 |  |  | — |  |  | 2,032 |
Total net revenues | $ | 3,566 |  |  | $ | 5,739 |  |  | $ | 9,794 |  |  | $ | 6,797 |  |  | $ | 25,896 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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