Quarter | United States and Canada | International | ||
First Quarter | 12 weeks | January, February | ||
Second Quarter | 12 weeks | March, April and May | ||
Third Quarter | 12 weeks | June, July and August | ||
Fourth Quarter | 16 weeks | September, October, November and December |
1) | FLNA, which includes our branded food and snack businesses in the United States and Canada; |
2) | QFNA, which includes our cereal, rice, pasta and other branded food businesses in the United States and Canada; |
3) | PBNA, which includes our beverage businesses in the United States and Canada; |
4) | LatAm, which includes all of our beverage, food and snack businesses in Latin America; |
5) | Europe, which includes all of our beverage, food and snack businesses in Europe; |
6) | AMESA, which includes all of our beverage, food and snack businesses in Africa, the Middle East and South Asia; and |
7) | APAC, which includes all of our beverage, food and snack businesses in Asia Pacific, Australia and New Zealand and China region. |
\u2022 | share-based compensation expense; |
\u2022 | pension and retiree medical expense; and |
\u2022 | derivatives. |
2019 | 2018 | 2017 | ||||||
FLNA | 13 | % | 13 | % | 13 | % | ||
QFNA | 1 | % | 1 | % | 1 | % | ||
PBNA | 17 | % | 18 | % | 18 | % | ||
LatAm | 7 | % | 8 | % | 7 | % | ||
Europe | 17 | % | 9 | % | 9 | % | ||
AMESA | 3 | % | 4 | % | 5 | % | ||
APAC | 5 | % | 4 | % | 4 | % | ||
Corporate unallocated expenses | 37 | % | 43 | % | 43 | % |
\u00a0 | Net Revenue | Operating Profit | |||||||||||||||||||||
\u00a0 | 2019(a) | 2018(a) | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||
FLNA | $ | 17,078 | $ | 16,346 | $ | 15,798 | $ | 5,258 | $ | 5,008 | $ | 4,793 | |||||||||||
QFNA | 2,482 | 2,465 | 2,503 | 544 | 637 | 640 | |||||||||||||||||
PBNA | 21,730 | 21,072 | 20,936 | 2,179 | 2,276 | 2,700 | |||||||||||||||||
LatAm | 7,573 | 7,354 | 7,208 | 1,141 | 1,049 | 924 | |||||||||||||||||
Europe | 11,728 | 10,973 | 10,522 | 1,327 | 1,256 | 1,199 | |||||||||||||||||
AMESA | 3,651 | 3,657 | 3,674 | 671 | 661 | 789 | |||||||||||||||||
APAC | 2,919 | 2,794 | 2,884 | 477 | 619 | 401 | |||||||||||||||||
Total division | 67,161 | 64,661 | 63,525 | 11,597 | 11,506 | 11,446 | |||||||||||||||||
Corporate unallocated expenses | \u2014 | \u2014 | \u2014 | (1,306 | ) | (1,396 | ) | (1,170 | ) | ||||||||||||||
Total | $ | 67,161 | $ | 64,661 | $ | 63,525 | $ | 10,291 | $ | 10,110 | $ | 10,276 |
(a) | Our primary performance obligation is the distribution and sales of beverage products and food and snack products to our customers, with our food and snack business representing approximately 55% of our consolidated net revenue. Internationally, LatAm\u2019s food and snack business is approximately 90% of the segment\u2019s net revenue, Europe\u2019s beverage business and food and snack business are approximately 55% and 45%, respectively, of the segment\u2019s net revenue, AMESA\u2019s beverage business and food and snack business are approximately 40% and 60%, respectively, of the segment\u2019s net revenue and APAC\u2019s beverage business and food and snack business are approximately 25% and 75%, respectively, of the segment\u2019s net revenue. Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe segments, is approximately 40% of our consolidated net revenue. Generally, our |
\u00a0 | Total Assets | Capital Spending | |||||||||||||||||
\u00a0 | 2019 | 2018 | 2019 | 2018 | 2017 | ||||||||||||||
FLNA | $ | 7,519 | $ | 6,577 | $ | 1,227 | $ | 840 | $ | 665 | |||||||||
QFNA | 941 | 870 | 104 | 53 | 44 | ||||||||||||||
PBNA | 31,449 | 29,878 | 1,053 | 945 | 904 | ||||||||||||||
LatAm | 7,007 | 6,458 | 557 | 492 | 481 | ||||||||||||||
Europe | 17,814 | 16,887 | 613 | 466 | 463 | ||||||||||||||
AMESA | 3,672 | 3,252 | 267 | 198 | 181 | ||||||||||||||
APAC | 4,113 | 3,704 | 195 | 138 | 145 | ||||||||||||||
Total division | 72,515 | 67,626 | 4,016 | 3,132 | 2,883 | ||||||||||||||
Corporate\u00a0(a) | 6,032 | 10,022 | 216 | 150 | 86 | ||||||||||||||
Total | $ | 78,547 | $ | 77,648 | $ | 4,232 | $ | 3,282 | $ | 2,969 |
(a) | Corporate assets consist principally of certain cash and cash equivalents, restricted cash, short-term investments, derivative instruments, property, plant and equipment and tax assets. In 2019, the change in assets was primarily due to a decrease in cash and cash equivalents and restricted cash. Refer to the cash flow statement for additional information. |
\u00a0 | Amortization\u00a0of\u00a0 Intangible Assets | Depreciation and Other Amortization | |||||||||||||||||||||
\u00a0 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||
FLNA | $ | 7 | $ | 7 | $ | 7 | $ | 492 | $ | 457 | $ | 449 | |||||||||||
QFNA | \u2014 | \u2014 | \u2014 | 44 | 45 | 47 | |||||||||||||||||
PBNA | 29 | 31 | 31 | 857 | 821 | 780 | |||||||||||||||||
LatAm | 5 | 5 | 5 | 270 | 253 | 245 | |||||||||||||||||
Europe | 37 | 23 | 22 | 341 | 319 | 317 | |||||||||||||||||
AMESA | 2 | 2 | 2 | 116 | 169 | 170 | |||||||||||||||||
APAC | 1 | 1 | 1 | 76 | 80 | 99 | |||||||||||||||||
Total division | 81 | 69 | 68 | 2,196 | 2,144 | 2,107 | |||||||||||||||||
Corporate | \u2014 | \u2014 | \u2014 | 155 | 186 | 194 | |||||||||||||||||
Total | $ | 81 | $ | 69 | $ | 68 | $ | 2,351 | $ | 2,330 | $ | 2,301 |
\u00a0 | Net Revenue | Long-Lived Assets(a) | |||||||||||||||||
\u00a0 | 2019 | 2018 | 2017 | 2019 | 2018 | ||||||||||||||
United States | $ | 38,644 | $ | 37,148 | $ | 36,546 | $ | 30,601 | $ | 29,169 | |||||||||
Mexico | 4,190 | 3,878 | 3,650 | 1,666 | 1,404 | ||||||||||||||
Russia | 3,263 | 3,191 | 3,232 | 4,314 | 3,926 | ||||||||||||||
Canada | 2,831 | 2,736 | 2,691 | 2,695 | 2,565 | ||||||||||||||
United Kingdom | 1,723 | 1,743 | 1,650 | 827 | 759 | ||||||||||||||
China | 1,300 | 1,164 | 963 | 705 | 509 | ||||||||||||||
Brazil | 1,295 | 1,335 | 1,427 | 590 | 639 | ||||||||||||||
All other countries | 13,915 | 13,466 | 13,366 | 12,134 | 11,660 | ||||||||||||||
Total | $ | 67,161 | $ | 64,661 | $ | 63,525 | $ | 53,532 | $ | 50,631 |
Quarter | United States and Canada | International | ||
First Quarter | 12 weeks | January, February | ||
Second Quarter | 12 weeks | March, April and May | ||
Third Quarter | 12 weeks | June, July and August | ||
Fourth Quarter | 16 weeks | September, October, November and December |
Quarter | United States and Canada | International | ||
First Quarter | 12 weeks | January, February | ||
Second Quarter | 12 weeks | March, April and May | ||
Third Quarter | 12 weeks | June, July and August | ||
Fourth Quarter | 16 weeks | September, October, November and December |
2019 | 2018 | 2017 | ||||||
FLNA | 13 | % | 13 | % | 13 | % | ||
QFNA | 1 | % | 1 | % | 1 | % | ||
PBNA | 17 | % | 18 | % | 18 | % | ||
LatAm | 7 | % | 8 | % | 7 | % | ||
Europe | 17 | % | 9 | % | 9 | % | ||
AMESA | 3 | % | 4 | % | 5 | % | ||
APAC | 5 | % | 4 | % | 4 | % | ||
Corporate unallocated expenses | 37 | % | 43 | % | 43 | % |
\u00a0 | Net Revenue | Operating Profit | |||||||||||||||||||||
\u00a0 | 2019(a) | 2018(a) | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||
FLNA | $ | 17,078 | $ | 16,346 | $ | 15,798 | $ | 5,258 | $ | 5,008 | $ | 4,793 | |||||||||||
QFNA | 2,482 | 2,465 | 2,503 | 544 | 637 | 640 | |||||||||||||||||
PBNA | 21,730 | 21,072 | 20,936 | 2,179 | 2,276 | 2,700 | |||||||||||||||||
LatAm | 7,573 | 7,354 | 7,208 | 1,141 | 1,049 | 924 | |||||||||||||||||
Europe | 11,728 | 10,973 | 10,522 | 1,327 | 1,256 | 1,199 | |||||||||||||||||
AMESA | 3,651 | 3,657 | 3,674 | 671 | 661 | 789 | |||||||||||||||||
APAC | 2,919 | 2,794 | 2,884 | 477 | 619 | 401 | |||||||||||||||||
Total division | 67,161 | 64,661 | 63,525 | 11,597 | 11,506 | 11,446 | |||||||||||||||||
Corporate unallocated expenses | \u2014 | \u2014 | \u2014 | (1,306 | ) | (1,396 | ) | (1,170 | ) | ||||||||||||||
Total | $ | 67,161 | $ | 64,661 | $ | 63,525 | $ | 10,291 | $ | 10,110 | $ | 10,276 |
(a) | Our primary performance obligation is the distribution and sales of beverage products and food and snack products to our customers, with our food and snack business representing approximately 55% of our consolidated net revenue. Internationally, LatAm\u2019s food and snack business is approximately 90% of the segment\u2019s net revenue, Europe\u2019s beverage business and food and snack business are approximately 55% and 45%, respectively, of the segment\u2019s net revenue, AMESA\u2019s beverage business and food and snack business are approximately 40% and 60%, respectively, of the segment\u2019s net revenue and APAC\u2019s beverage business and food and snack business are approximately 25% and 75%, respectively, of the segment\u2019s net revenue. Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe segments, is approximately 40% of our consolidated net revenue. Generally, our |
\u00a0 | Total Assets | Capital Spending | |||||||||||||||||
\u00a0 | 2019 | 2018 | 2019 | 2018 | 2017 | ||||||||||||||
FLNA | $ | 7,519 | $ | 6,577 | $ | 1,227 | $ | 840 | $ | 665 | |||||||||
QFNA | 941 | 870 | 104 | 53 | 44 | ||||||||||||||
PBNA | 31,449 | 29,878 | 1,053 | 945 | 904 | ||||||||||||||
LatAm | 7,007 | 6,458 | 557 | 492 | 481 | ||||||||||||||
Europe | 17,814 | 16,887 | 613 | 466 | 463 | ||||||||||||||
AMESA | 3,672 | 3,252 | 267 | 198 | 181 | ||||||||||||||
APAC | 4,113 | 3,704 | 195 | 138 | 145 | ||||||||||||||
Total division | 72,515 | 67,626 | 4,016 | 3,132 | 2,883 | ||||||||||||||
Corporate\u00a0(a) | 6,032 | 10,022 | 216 | 150 | 86 | ||||||||||||||
Total | $ | 78,547 | $ | 77,648 | $ | 4,232 | $ | 3,282 | $ | 2,969 |
\u00a0 | Amortization\u00a0of\u00a0 Intangible Assets | Depreciation and Other Amortization | |||||||||||||||||||||
\u00a0 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||
FLNA | $ | 7 | $ | 7 | $ | 7 | $ | 492 | $ | 457 | $ | 449 | |||||||||||
QFNA | \u2014 | \u2014 | \u2014 | 44 | 45 | 47 | |||||||||||||||||
PBNA | 29 | 31 | 31 | 857 | 821 | 780 | |||||||||||||||||
LatAm | 5 | 5 | 5 | 270 | 253 | 245 | |||||||||||||||||
Europe | 37 | 23 | 22 | 341 | 319 | 317 | |||||||||||||||||
AMESA | 2 | 2 | 2 | 116 | 169 | 170 | |||||||||||||||||
APAC | 1 | 1 | 1 | 76 | 80 | 99 | |||||||||||||||||
Total division | 81 | 69 | 68 | 2,196 | 2,144 | 2,107 | |||||||||||||||||
Corporate | \u2014 | \u2014 | \u2014 | 155 | 186 | 194 | |||||||||||||||||
Total | $ | 81 | $ | 69 | $ | 68 | $ | 2,351 | $ | 2,330 | $ | 2,301 |
\u00a0 | Net Revenue | Long-Lived Assets(a) | |||||||||||||||||
\u00a0 | 2019 | 2018 | 2017 | 2019 | 2018 | ||||||||||||||
United States | $ | 38,644 | $ | 37,148 | $ | 36,546 | $ | 30,601 | $ | 29,169 | |||||||||
Mexico | 4,190 | 3,878 | 3,650 | 1,666 | 1,404 | ||||||||||||||
Russia | 3,263 | 3,191 | 3,232 | 4,314 | 3,926 | ||||||||||||||
Canada | 2,831 | 2,736 | 2,691 | 2,695 | 2,565 | ||||||||||||||
United Kingdom | 1,723 | 1,743 | 1,650 | 827 | 759 | ||||||||||||||
China | 1,300 | 1,164 | 963 | 705 | 509 | ||||||||||||||
Brazil | 1,295 | 1,335 | 1,427 | 590 | 639 | ||||||||||||||
All other countries | 13,915 | 13,466 | 13,366 | 12,134 | 11,660 | ||||||||||||||
Total | $ | 67,161 | $ | 64,661 | $ | 63,525 | $ | 53,532 | $ | 50,631 |
\u2022 | media and personal service prepayments; |
\u2022 | promotional materials in inventory; and |
\u2022 | production costs of future media advertising. |
\u2022 | Basis of Presentation \u2013 Note 1 includes a description of our policies regarding use of estimates, basis of presentation and consolidation. |
\u2022 | Property, Plant and Equipment \u2013 Note 4. |
\u2022 | Income Taxes \u2013 Note 5. |
\u2022 | Share-Based Compensation \u2013 Note 6. |
\u2022 | Pension, Retiree Medical and Savings Plans \u2013 Note 7. |
\u2022 | Financial Instruments \u2013 Note 9. |
\u2022 | Cash Equivalents \u2013 Cash equivalents are highly liquid investments with original maturities of three months or less. |
\u2022 | Inventories \u2013 Note 15. Inventories are valued at the lower of cost or net realizable value. Cost is determined using the average; first-in, first-out (FIFO) or, in limited instances, last-in, first-out (LIFO) methods. |
\u2022 | media and personal service prepayments; |
\u2022 | promotional materials in inventory; and |
\u2022 | production costs of future media advertising. |
\u2022 | Basis of Presentation \u2013 Note 1 includes a description of our policies regarding use of estimates, basis of presentation and consolidation. |
\u2022 | Property, Plant and Equipment \u2013 Note 4. |
\u2022 | Income Taxes \u2013 Note 5. |
\u2022 | Share-Based Compensation \u2013 Note 6. |
\u2022 | Pension, Retiree Medical and Savings Plans \u2013 Note 7. |
\u2022 | Financial Instruments \u2013 Note 9. |
\u2022 | Cash Equivalents \u2013 Cash equivalents are highly liquid investments with original maturities of three months or less. |
\u2022 | Inventories \u2013 Note 15. Inventories are valued at the lower of cost or net realizable value. Cost is determined using the average; first-in, first-out (FIFO) or, in limited instances, last-in, first-out (LIFO) methods. |
2019 | 2018 | 2017 | |||||||||
2019 Productivity Plan | $ | 370 | $ | 138 | $ | \u2014 | |||||
2014 Productivity Plan | \u2014 | 170 | 295 | ||||||||
Total restructuring and impairment charges | 370 | 308 | 295 | ||||||||
Other productivity initiatives | 3 | 8 | 16 | ||||||||
Total restructuring and impairment charges and other productivity initiatives | $ | 373 | $ | 316 | $ | 311 |
FLNA | QFNA | PBNA | LatAm | Europe | AMESA | APAC | Corporate | ||||||||||||||||
Expected pre-tax charges | 11 | % | 2 | % | 30 | % | 10 | % | 25 | % | 8 | % | 5 | % | 9 | % |
2019 | 2018 | ||||||
Cost of sales | $ | 115 | $ | 3 | |||
Selling, general and administrative expenses | 253 | 100 | |||||
Other pension and retiree medical benefits expense | 2 | 35 | |||||
Total restructuring and impairment charges | $ | 370 | $ | 138 | |||
After-tax amount | $ | 303 | $ | 109 | |||
Net income attributable to PepsiCo per common share | $ | 0.21 | $ | 0.08 |
2019 | 2018 | Plan to Date through 12/28/2019 | |||||||||
FLNA | $ | 22 | $ | 31 | $ | 53 | |||||
QFNA | 2 | 5 | 7 | ||||||||
PBNA | 51 | 40 | 91 | ||||||||
LatAm | 62 | 9 | 71 | ||||||||
Europe | 99 | 6 | 105 | ||||||||
AMESA | 38 | 3 | 41 | ||||||||
APAC | 47 | 2 | 49 | ||||||||
Corporate | 47 | 7 | 54 | ||||||||
368 | 103 | 471 | |||||||||
Other pension and retiree medical benefits expense | 2 | 35 | 37 | ||||||||
Total | $ | 370 | $ | 138 | $ | 508 |
Plan to Date through 12/28/2019 | |||
Severance and\u00a0other employee costs | $ | 286 | |
Asset impairments | 92 | ||
Other\u00a0costs (a) | 130 | ||
Total | $ | 508 |
(a) | Includes other costs associated with the implementation of our initiatives, including contract termination costs, consulting and other professional fees. |
Severance and\u00a0Other Employee Costs | Asset Impairments | Other\u00a0Costs | Total | ||||||||||||
2018 restructuring charges | $ | 137 | $ | \u2014 | $ | 1 | $ | 138 | |||||||
Non-cash charges and translation | (32 | ) | \u2014 | \u2014 | (32 | ) | |||||||||
Liability as of December 29, 2018 | 105 | \u2014 | 1 | 106 | |||||||||||
2019 restructuring charges | 149 | 92 | 129 | 370 | |||||||||||
Cash payments (a) | (138 | ) | \u2014 | (119 | ) | (257 | ) | ||||||||
Non-cash charges and translation | 12 | (92 | ) | 10 | (70 | ) | |||||||||
Liability as of December 28, 2019 | $ | 128 | $ | \u2014 | $ | 21 | $ | 149 |
(a) | Excludes cash expenditures of $4 million reported in the cash flow statement in pension and retiree medical contributions. |
2018 | 2017 | ||||||
Selling, general and administrative expenses | $ | 169 | $ | 229 | |||
Other pension and retiree medical benefits expense | 1 | 66 | |||||
Total restructuring and impairment charges | $ | 170 | $ | 295 | |||
After-tax amount | $ | 143 | $ | 224 | |||
Net income attributable to PepsiCo per common share | $ | 0.10 | $ | 0.16 |
2018 | 2017 | ||||||
FLNA | $ | 8 | $ | 67 | |||
QFNA | 2 | 11 | |||||
PBNA | 51 | 54 | |||||
LatAm | 30 | 63 | |||||
Europe | 53 | 53 | |||||
AMESA | 15 | 2 | |||||
APAC (a) | 12 | (5 | ) | ||||
Corporate (b) | (1 | ) | 50 | ||||
Total | $ | 170 | $ | 295 |
(a) | Income amount primarily reflects a gain on the sale of property, plant and equipment. |
(b) | Income amount primarily relates to other pension and retiree medical benefits. |
Severance and\u00a0Other Employee Costs | Asset Impairments | Other\u00a0Costs | Total | ||||||||||||
Liability as of December 31, 2016 | $ | 88 | $ | \u2014 | $ | 8 | $ | 96 | |||||||
2017 restructuring charges | 280 | 21 | (6 | ) | (a)\u00a0 | 295 | |||||||||
Cash payments | (91 | ) | \u2014 | (22 | ) | (113 | ) | ||||||||
Non-cash charges and translation | (65 | ) | (21 | ) | 34 | (52 | ) | ||||||||
Liability as of December 30, 2017 | 212 | \u2014 | 14 | 226 | |||||||||||
2018 restructuring charges | 86 | 28 | 56 | 170 | |||||||||||
Cash payments (b) | (203 | ) | \u2014 | (52 | ) | (255 | ) | ||||||||
Non-cash charges and translation | (4 | ) | (28 | ) | 5 | (27 | ) | ||||||||
Liability as of December 29, 2018 | 91 | \u2014 | 23 | 114 | |||||||||||
Cash payments | (77 | ) | \u2014 | (16 | ) | (93 | ) | ||||||||
Non-cash charges and translation | (14 | ) | \u2014 | (7 | ) | (21 | ) | ||||||||
Liability as of December 28, 2019 | $ | \u2014 | $ | \u2014 | $ | \u2014 | $ | \u2014 |
(a) | Income amount represents adjustments for changes in estimates and a gain on the sale of property, plant, and equipment. |
(b) | Excludes cash expenditures of $11 million reported in the cash flow statement in pension and retiree medical plan contributions. |
2019 | 2018 | 2017 | |||||||||
2019 Productivity Plan | $ | 370 | $ | 138 | $ | \u2014 | |||||
2014 Productivity Plan | \u2014 | 170 | 295 | ||||||||
Total restructuring and impairment charges | 370 | 308 | 295 | ||||||||
Other productivity initiatives | 3 | 8 | 16 | ||||||||
Total restructuring and impairment charges and other productivity initiatives | $ | 373 | $ | 316 | $ | 311 |
FLNA | QFNA | PBNA | LatAm | Europe | AMESA | APAC | Corporate | ||||||||||||||||
Expected pre-tax charges | 11 | % | 2 | % | 30 | % | 10 | % | 25 | % | 8 | % | 5 | % | 9 | % |
2019 | 2018 | ||||||
Cost of sales | $ | 115 | $ | 3 | |||
Selling, general and administrative expenses | 253 | 100 | |||||
Other pension and retiree medical benefits expense | 2 | 35 | |||||
Total restructuring and impairment charges | $ | 370 | $ | 138 | |||
After-tax amount | $ | 303 | $ | 109 | |||
Net income attributable to PepsiCo per common share | $ | 0.21 | $ | 0.08 |
2019 | 2018 | Plan to Date through 12/28/2019 | |||||||||
FLNA | $ | 22 | $ | 31 | $ | 53 | |||||
QFNA | 2 | 5 | 7 | ||||||||
PBNA | 51 | 40 | 91 | ||||||||
LatAm | 62 | 9 | 71 | ||||||||
Europe | 99 | 6 | 105 | ||||||||
AMESA | 38 | 3 | 41 | ||||||||
APAC | 47 | 2 | 49 | ||||||||
Corporate | 47 | 7 | 54 | ||||||||
368 | 103 | 471 | |||||||||
Other pension and retiree medical benefits expense | 2 | 35 | 37 | ||||||||
Total | $ | 370 | $ | 138 | $ | 508 |
Plan to Date through 12/28/2019 | |||
Severance and\u00a0other employee costs | $ | 286 | |
Asset impairments | 92 | ||
Other\u00a0costs (a) | 130 | ||
Total | $ | 508 |
(a) | Includes other costs associated with the implementation of our initiatives, including contract termination costs, consulting and other professional fees. |
Severance and\u00a0Other Employee Costs | Asset Impairments | Other\u00a0Costs | Total | ||||||||||||
2018 restructuring charges | $ | 137 | $ | \u2014 | $ | 1 | $ | 138 | |||||||
Non-cash charges and translation | (32 | ) | \u2014 | \u2014 | (32 | ) | |||||||||
Liability as of December 29, 2018 | 105 | \u2014 | 1 | 106 | |||||||||||
2019 restructuring charges | 149 | 92 | 129 | 370 | |||||||||||
Cash payments (a) | (138 | ) | \u2014 | (119 | ) | (257 | ) | ||||||||
Non-cash charges and translation | 12 | (92 | ) | 10 | (70 | ) | |||||||||
Liability as of December 28, 2019 | $ | 128 | $ | \u2014 | $ | 21 | $ | 149 |
2018 | 2017 | ||||||
Selling, general and administrative expenses | $ | 169 | $ | 229 | |||
Other pension and retiree medical benefits expense | 1 | 66 | |||||
Total restructuring and impairment charges | $ | 170 | $ | 295 | |||
After-tax amount | $ | 143 | $ | 224 | |||
Net income attributable to PepsiCo per common share | $ | 0.10 | $ | 0.16 |
2018 | 2017 | ||||||
FLNA | $ | 8 | $ | 67 | |||
QFNA | 2 | 11 | |||||
PBNA | 51 | 54 | |||||
LatAm | 30 | 63 | |||||
Europe | 53 | 53 | |||||
AMESA | 15 | 2 | |||||
APAC (a) | 12 | (5 | ) | ||||
Corporate (b) | (1 | ) | 50 | ||||
Total | $ | 170 | $ | 295 |
(a) | Income amount primarily reflects a gain on the sale of property, plant and equipment. |
(b) | Income amount primarily relates to other pension and retiree medical benefits. |
Severance and\u00a0Other Employee Costs | Asset Impairments | Other\u00a0Costs | Total | ||||||||||||
Liability as of December 31, 2016 | $ | 88 | $ | \u2014 | $ | 8 | $ | 96 | |||||||
2017 restructuring charges | 280 | 21 | (6 | ) | (a)\u00a0 | 295 | |||||||||
Cash payments | (91 | ) | \u2014 | (22 | ) | (113 | ) | ||||||||
Non-cash charges and translation | (65 | ) | (21 | ) | 34 | (52 | ) | ||||||||
Liability as of December 30, 2017 | 212 | \u2014 | 14 | 226 | |||||||||||
2018 restructuring charges | 86 | 28 | 56 | 170 | |||||||||||
Cash payments (b) | (203 | ) | \u2014 | (52 | ) | (255 | ) | ||||||||
Non-cash charges and translation | (4 | ) | (28 | ) | 5 | (27 | ) | ||||||||
Liability as of December 29, 2018 | 91 | \u2014 | 23 | 114 | |||||||||||
Cash payments | (77 | ) | \u2014 | (16 | ) | (93 | ) | ||||||||
Non-cash charges and translation | (14 | ) | \u2014 | (7 | ) | (21 | ) | ||||||||
Liability as of December 28, 2019 | $ | \u2014 | $ | \u2014 | $ | \u2014 | $ | \u2014 |
(a) | Income amount represents adjustments for changes in estimates and a gain on the sale of property, plant, and equipment. |
Average Useful\u00a0Life (Years) | 2019 | 2018 | 2017 | ||||||||||
Property, plant and equipment, net | |||||||||||||
Land | $ | 1,130 | $ | 1,078 | |||||||||
Buildings and improvements | 15 - 44 | 9,314 | 8,941 | ||||||||||
Machinery and equipment, including fleet and software | 5 - 15 | 29,390 | 27,715 | ||||||||||
Construction in progress | 3,169 | 2,430 | |||||||||||
43,003 | 40,164 | ||||||||||||
Accumulated depreciation | (23,698 | ) | (22,575 | ) | |||||||||
Total | $ | 19,305 | $ | 17,589 | |||||||||
Depreciation expense | $ | 2,257 | $ | 2,241 | $ | 2,227 |
\u00a0 | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Average Useful\u00a0Life (Years) | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | |||||||||||||||||||||||
Amortizable intangible assets, net | |||||||||||||||||||||||||||||
Acquired franchise rights | 56 \u2013 60 | $ | 846 | $ | (158 | ) | $ | 688 | $ | 838 | $ | (140 | ) | $ | 698 | ||||||||||||||
Reacquired franchise rights | 5 \u2013 14 | 106 | (105 | ) | 1 | 106 | (105 | ) | 1 | ||||||||||||||||||||
Brands | 20 \u2013 40 | 1,326 | (1,066 | ) | 260 | 1,306 | (1,032 | ) | 274 | ||||||||||||||||||||
Other identifiable intangibles (a) | 10 \u2013 24 | 810 | (326 | ) | 484 | 959 | (288 | ) | 671 | ||||||||||||||||||||
Total | $ | 3,088 | $ | (1,655 | ) | $ | 1,433 | $ | 3,209 | $ | (1,565 | ) | $ | 1,644 | |||||||||||||||
Amortization expense | $ | 81 | $ | 69 | $ | 68 |
(a) | The change from 2018 to 2019 primarily reflects revisions to the purchase price allocation for our acquisition of SodaStream. |
2020 | 2021 | 2022 | 2023 | 2024 | |||||||||||||||
Five-year projected amortization | $ | 82 | $ | 80 | $ | 77 | $ | 75 | $ | 74 |
Balance, Beginning 2018 | Acquisitions/ (Divestitures) | Translation and\u00a0Other | Balance, End\u00a0of 2018 | Acquisitions/ (Divestitures) | Translation and\u00a0Other | Balance, End of 2019 | |||||||||||||||||||||
FLNA | |||||||||||||||||||||||||||
Goodwill | $ | 280 | $ | 28 | $ | (11 | ) | $ | 297 | $ | (3 | ) | $ | 5 | $ | 299 | |||||||||||
Brands | 25 | 138 | (2 | ) | 161 | \u2014 | 1 | 162 | |||||||||||||||||||
Total | 305 | 166 | (13 | ) | 458 | (3 | ) | 6 | 461 | ||||||||||||||||||
QFNA | |||||||||||||||||||||||||||
Goodwill | 175 | 9 | \u2014 | 184 | 6 | (1 | ) | 189 | |||||||||||||||||||
Brands | \u2014 | 25 | \u2014 | 25 | (14 | ) | \u2014 | 11 | |||||||||||||||||||
Total | 175 | 34 | \u2014 | 209 | (8 | ) | (1 | ) | 200 | ||||||||||||||||||
PBNA (a) | |||||||||||||||||||||||||||
Goodwill | 9,854 | \u2014 | (41 | ) | 9,813 | 66 | 19 | 9,898 | |||||||||||||||||||
Reacquired franchise rights | 7,126 | \u2014 | (68 | ) | 7,058 | \u2014 | 31 | 7,089 | |||||||||||||||||||
Acquired franchise rights | 1,525 | \u2014 | (15 | ) | 1,510 | \u2014 | 7 | 1,517 | |||||||||||||||||||
Brands | 353 | \u2014 | \u2014 | 353 | 418 | (8 | ) | 763 | |||||||||||||||||||
Total | 18,858 | \u2014 | (124 | ) | 18,734 | 484 | 49 | 19,267 | |||||||||||||||||||
LatAm | |||||||||||||||||||||||||||
Goodwill | 555 | \u2014 | (46 | ) | 509 | \u2014 | (8 | ) | 501 | ||||||||||||||||||
Brands | 141 | \u2014 | (14 | ) | 127 | \u2014 | (2 | ) | 125 | ||||||||||||||||||
Total | 696 | \u2014 | (60 | ) | 636 | \u2014 | (10 | ) | 626 | ||||||||||||||||||
Europe (b) (c) | |||||||||||||||||||||||||||
Goodwill | 3,202 | 526 | (367 | ) | 3,361 | 440 | 160 | 3,961 | |||||||||||||||||||
Reacquired franchise rights | 549 | (1 | ) | (51 | ) | 497 | \u2014 | 8 | 505 | ||||||||||||||||||
Acquired franchise rights | 195 | (25 | ) | (9 | ) | 161 | \u2014 | (4 | ) | 157 | |||||||||||||||||
Brands | 2,545 | 1,993 | (350 | ) | 4,188 | (139 | ) | 132 | 4,181 | ||||||||||||||||||
Total | 6,491 | 2,493 | (777 | ) | 8,207 | 301 | 296 | 8,804 | |||||||||||||||||||
AMESA | |||||||||||||||||||||||||||
Goodwill | 437 | \u2014 | \u2014 | 437 | 11 | (2 | ) | 446 | |||||||||||||||||||
Total | 437 | \u2014 | \u2014 | 437 | 11 | (2 | ) | 446 | |||||||||||||||||||
APAC | |||||||||||||||||||||||||||
Goodwill | 241 | \u2014 | (34 | ) | 207 | \u2014 | \u2014 | 207 | |||||||||||||||||||
Brands | 111 | \u2014 | (10 | ) | 101 | \u2014 | (1 | ) | 100 | ||||||||||||||||||
Total | 352 | \u2014 | (44 | ) | 308 | \u2014 | (1 | ) | 307 | ||||||||||||||||||
Total goodwill | 14,744 | 563 | (499 | ) | 14,808 | 520 | 173 | 15,501 | |||||||||||||||||||
Total reacquired franchise rights | 7,675 | (1 | ) | (119 | ) | 7,555 | \u2014 | 39 | 7,594 | ||||||||||||||||||
Total acquired franchise rights | 1,720 | (25 | ) | (24 | ) | 1,671 | \u2014 | 3 | 1,674 | ||||||||||||||||||
Total brands | 3,175 | 2,156 | (376 | ) | 4,955 | 265 | 122 | 5,342 | |||||||||||||||||||
Total | $ | 27,314 | $ | 2,693 | $ | (1,018 | ) | $ | 28,989 | $ | 785 | $ | 337 | $ | 30,111 |
(a) | The change in acquisitions/(divestitures) in 2019 is primarily related to our acquisition of CytoSport Inc. |
(b) | The change in acquisitions/(divestitures) in 2019 and 2018 is primarily related to our acquisition of SodaStream. See Note 14 for further information. |
Average Useful\u00a0Life (Years) | 2019 | 2018 | 2017 | ||||||||||
Property, plant and equipment, net | |||||||||||||
Land | $ | 1,130 | $ | 1,078 | |||||||||
Buildings and improvements | 15 - 44 | 9,314 | 8,941 | ||||||||||
Machinery and equipment, including fleet and software | 5 - 15 | 29,390 | 27,715 | ||||||||||
Construction in progress | 3,169 | 2,430 | |||||||||||
43,003 | 40,164 | ||||||||||||
Accumulated depreciation | (23,698 | ) | (22,575 | ) | |||||||||
Total | $ | 19,305 | $ | 17,589 | |||||||||
Depreciation expense | $ | 2,257 | $ | 2,241 | $ | 2,227 |
\u00a0 | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Average Useful\u00a0Life (Years) | Gross | Accumulated Amortization | Net | Gross | Accumulated Amortization | Net | |||||||||||||||||||||||
Amortizable intangible assets, net | |||||||||||||||||||||||||||||
Acquired franchise rights | 56 \u2013 60 | $ | 846 | $ | (158 | ) | $ | 688 | $ | 838 | $ | (140 | ) | $ | 698 | ||||||||||||||
Reacquired franchise rights | 5 \u2013 14 | 106 | (105 | ) | 1 | 106 | (105 | ) | 1 | ||||||||||||||||||||
Brands | 20 \u2013 40 | 1,326 | (1,066 | ) | 260 | 1,306 | (1,032 | ) | 274 | ||||||||||||||||||||
Other identifiable intangibles (a) | 10 \u2013 24 | 810 | (326 | ) | 484 | 959 | (288 | ) | 671 | ||||||||||||||||||||
Total | $ | 3,088 | $ | (1,655 | ) | $ | 1,433 | $ | 3,209 | $ | (1,565 | ) | $ | 1,644 | |||||||||||||||
Amortization expense | $ | 81 | $ | 69 | $ | 68 |
2020 | 2021 | 2022 | 2023 | 2024 | |||||||||||||||
Five-year projected amortization | $ | 82 | $ | 80 | $ | 77 | $ | 75 | $ | 74 |
Balance, Beginning 2018 | Acquisitions/ (Divestitures) | Translation and\u00a0Other | Balance, End\u00a0of 2018 | Acquisitions/ (Divestitures) | Translation and\u00a0Other | Balance, End of 2019 | |||||||||||||||||||||
FLNA | |||||||||||||||||||||||||||
Goodwill | $ | 280 | $ | 28 | $ | (11 | ) | $ | 297 | $ | (3 | ) | $ | 5 | $ | 299 | |||||||||||
Brands | 25 | 138 | (2 | ) | 161 | \u2014 | 1 | 162 | |||||||||||||||||||
Total | 305 | 166 | (13 | ) | 458 | (3 | ) | 6 | 461 | ||||||||||||||||||
QFNA | |||||||||||||||||||||||||||
Goodwill | 175 | 9 | \u2014 | 184 | 6 | (1 | ) | 189 | |||||||||||||||||||
Brands | \u2014 | 25 | \u2014 | 25 | (14 | ) | \u2014 | 11 | |||||||||||||||||||
Total | 175 | 34 | \u2014 | 209 | (8 | ) | (1 | ) | 200 | ||||||||||||||||||
PBNA (a) | |||||||||||||||||||||||||||
Goodwill | 9,854 | \u2014 | (41 | ) | 9,813 | 66 | 19 | 9,898 | |||||||||||||||||||
Reacquired franchise rights | 7,126 | \u2014 | (68 | ) | 7,058 | \u2014 | 31 | 7,089 | |||||||||||||||||||
Acquired franchise rights | 1,525 | \u2014 | (15 | ) | 1,510 | \u2014 | 7 | 1,517 | |||||||||||||||||||
Brands | 353 | \u2014 | \u2014 | 353 | 418 | (8 | ) | 763 | |||||||||||||||||||
Total | 18,858 | \u2014 | (124 | ) | 18,734 | 484 | 49 | 19,267 | |||||||||||||||||||
LatAm | |||||||||||||||||||||||||||
Goodwill | 555 | \u2014 | (46 | ) | 509 | \u2014 | (8 | ) | 501 | ||||||||||||||||||
Brands | 141 | \u2014 | (14 | ) | 127 | \u2014 | (2 | ) | 125 | ||||||||||||||||||
Total | 696 | \u2014 | (60 | ) | 636 | \u2014 | (10 | ) | 626 | ||||||||||||||||||
Europe (b) (c) | |||||||||||||||||||||||||||
Goodwill | 3,202 | 526 | (367 | ) | 3,361 | 440 | 160 | 3,961 | |||||||||||||||||||
Reacquired franchise rights | 549 | (1 | ) | (51 | ) | 497 | \u2014 | 8 | 505 | ||||||||||||||||||
Acquired franchise rights | 195 | (25 | ) | (9 | ) | 161 | \u2014 | (4 | ) | 157 | |||||||||||||||||
Brands | 2,545 | 1,993 | (350 | ) | 4,188 | (139 | ) | 132 | 4,181 | ||||||||||||||||||
Total | 6,491 | 2,493 | (777 | ) | 8,207 | 301 | 296 | 8,804 | |||||||||||||||||||
AMESA | |||||||||||||||||||||||||||
Goodwill | 437 | \u2014 | \u2014 | 437 | 11 | (2 | ) | 446 | |||||||||||||||||||
Total | 437 | \u2014 | \u2014 | 437 | 11 | (2 | ) | 446 | |||||||||||||||||||
APAC | |||||||||||||||||||||||||||
Goodwill | 241 | \u2014 | (34 | ) | 207 | \u2014 | \u2014 | 207 | |||||||||||||||||||
Brands | 111 | \u2014 | (10 | ) | 101 | \u2014 | (1 | ) | 100 | ||||||||||||||||||
Total | 352 | \u2014 | (44 | ) | 308 | \u2014 | (1 | ) | 307 | ||||||||||||||||||
Total goodwill | 14,744 | 563 | (499 | ) | 14,808 | 520 | 173 | 15,501 | |||||||||||||||||||
Total reacquired franchise rights | 7,675 | (1 | ) | (119 | ) | 7,555 | \u2014 | 39 | 7,594 | ||||||||||||||||||
Total acquired franchise rights | 1,720 | (25 | ) | (24 | ) | 1,671 | \u2014 | 3 | 1,674 | ||||||||||||||||||
Total brands | 3,175 | 2,156 | (376 | ) | 4,955 | 265 | 122 | 5,342 | |||||||||||||||||||
Total | $ | 27,314 | $ | 2,693 | $ | (1,018 | ) | $ | 28,989 | $ | 785 | $ | 337 | $ | 30,111 |
(a) | The change in acquisitions/(divestitures) in 2019 is primarily related to our acquisition of CytoSport Inc. |
(b) | The change in acquisitions/(divestitures) in 2019 and 2018 is primarily related to our acquisition of SodaStream. See Note 14 for further information. |
2019 | 2018 | 2017 | ||||||||||
United States | $ | 4,123 | $ | 3,864 | $ | 3,452 | ||||||
Foreign | 5,189 | 5,325 | 6,150 | |||||||||
$ | 9,312 | $ | 9,189 | $ | 9,602 |
2019 | 2018 | 2017 | ||||||||||
Current: | U.S. Federal | $ | 652 | $ | 437 | $ | 4,925 | |||||
Foreign | 807 | 378 | 724 | |||||||||
State | 196 | 63 | 136 | |||||||||
1,655 | 878 | 5,785 | ||||||||||
Deferred: | U.S. Federal | 325 | 140 | (1,159 | ) | |||||||
Foreign | (31 | ) | (4,379 | ) | (9 | ) | ||||||
State | 10 | (9 | ) | 77 | ||||||||
304 | (4,248 | ) | (1,091 | ) | ||||||||
$ | 1,959 | $ | (3,370 | ) | $ | 4,694 |
2019 | 2018 | 2017 | |||||||
U.S. Federal statutory tax rate | 21.0 | \u00a0% | 21.0 | \u00a0% | 35.0 | \u00a0% | |||
State income tax, net of U.S. Federal tax benefit | 1.6 | 0.5 | 0.9 | ||||||
Lower taxes on foreign results | (0.9 | ) | (2.2 | ) | (9.4 | ) | |||
One-time mandatory transition tax - TCJ Act | (0.1 | ) | 0.1 | 41.4 | |||||
Remeasurement of deferred taxes - TCJ Act | \u2014 | (0.4 | ) | (15.9 | ) | ||||
International reorganizations | \u2014 | (47.3 | ) | \u2014 | |||||
Tax settlements | \u2014 | (7.8 | ) | \u2014 | |||||
Other, net | (0.6 | ) | (0.6 | ) | (3.1 | ) | |||
Annual tax rate | 21.0 | \u00a0% | (36.7 | )% | 48.9 | \u00a0% |
2019 | 2018 | ||||||
Deferred tax liabilities | |||||||
Debt guarantee of wholly-owned subsidiary | $ | 578 | $ | 578 | |||
Property, plant and equipment | 1,583 | 1,303 | |||||
Recapture of net operating losses | 335 | 414 | |||||
Right-of-use assets | 345 | \u2014 | |||||
Other | 167 | 71 | |||||
Gross deferred tax liabilities | 3,008 | 2,366 | |||||
Deferred tax assets | |||||||
Net carryforwards | 4,168 | 4,353 | |||||
Intangible assets other than nondeductible goodwill | 793 | 985 | |||||
Share-based compensation | 94 | 106 | |||||
Retiree medical benefits | 154 | 167 | |||||
Other employee-related benefits | 350 | 303 | |||||
Pension benefits | 104 | 221 | |||||
Deductible state tax and interest benefits | 126 | 110 | |||||
Lease liabilities | 345 | \u2014 | |||||
Other | 741 | 739 | |||||
Gross deferred tax assets | 6,875 | 6,984 | |||||
Valuation allowances | (3,599 | ) | (3,753 | ) | |||
Deferred tax assets, net | 3,276 | 3,231 | |||||
Net deferred tax assets | $ | (268 | ) | $ | (865 | ) |
2019 | 2018 | 2017 | |||||||||
Balance, beginning of year | $ | 3,753 | $ | 1,163 | $ | 1,110 | |||||
Provision | (124 | ) | 2,639 | 33 | |||||||
Other (deductions)/additions | (30 | ) | (49 | ) | 20 | ||||||
Balance, end of year | $ | 3,599 | $ | 3,753 | $ | 1,163 |
Jurisdiction | Years Open to Audit | Years Currently Under Audit | ||
United States | 2014-2018 | 2014-2016 | ||
Mexico | 2017-2018 | None | ||
United Kingdom | 2017-2018 | 2017 | ||
Canada (Domestic) | 2015-2018 | 2015-2016 | ||
Canada (International) | 2010-2018 | 2010-2016 | ||
Russia | 2016-2018 | None |
2019 | 2018 | ||||||
Balance, beginning of year | $ | 1,440 | $ | 2,212 | |||
Additions for tax positions related to the current year | 179 | 142 | |||||
Additions for tax positions from prior years | 93 | 197 | |||||
Reductions for tax positions from prior years | (201 | ) | (822 | ) | |||
Settlement payments | (74 | ) | (233 | ) | |||
Statutes of limitations expiration | (47 | ) | (42 | ) | |||
Translation and other | 5 | (14 | ) | ||||
Balance, end of year | $ | 1,395 | $ | 1,440 |
2019 | 2018 | 2017 | ||||||||||
United States | $ | 4,123 | $ | 3,864 | $ | 3,452 | ||||||
Foreign | 5,189 | 5,325 | 6,150 | |||||||||
$ | 9,312 | $ | 9,189 | $ | 9,602 |
2019 | 2018 | 2017 | ||||||||||
Current: | U.S. Federal | $ | 652 | $ | 437 | $ | 4,925 | |||||
Foreign | 807 | 378 | 724 | |||||||||
State | 196 | 63 | 136 | |||||||||
1,655 | 878 | 5,785 | ||||||||||
Deferred: | U.S. Federal | 325 | 140 | (1,159 | ) | |||||||
Foreign | (31 | ) | (4,379 | ) | (9 | ) | ||||||
State | 10 | (9 | ) | 77 | ||||||||
304 | (4,248 | ) | (1,091 | ) | ||||||||
$ | 1,959 | $ | (3,370 | ) | $ | 4,694 |
2019 | 2018 | 2017 | |||||||
U.S. Federal statutory tax rate | 21.0 | \u00a0% | 21.0 | \u00a0% | 35.0 | \u00a0% | |||
State income tax, net of U.S. Federal tax benefit | 1.6 | 0.5 | 0.9 | ||||||
Lower taxes on foreign results | (0.9 | ) | (2.2 | ) | (9.4 | ) | |||
One-time mandatory transition tax - TCJ Act | (0.1 | ) | 0.1 | 41.4 | |||||
Remeasurement of deferred taxes - TCJ Act | \u2014 | (0.4 | ) | (15.9 | ) | ||||
International reorganizations | \u2014 | (47.3 | ) | \u2014 | |||||
Tax settlements | \u2014 | (7.8 | ) | \u2014 | |||||
Other, net | (0.6 | ) | (0.6 | ) | (3.1 | ) | |||
Annual tax rate | 21.0 | \u00a0% | (36.7 | )% | 48.9 | \u00a0% |
2019 | 2018 | ||||||
Deferred tax liabilities | |||||||
Debt guarantee of wholly-owned subsidiary | $ | 578 | $ | 578 | |||
Property, plant and equipment | 1,583 | 1,303 | |||||
Recapture of net operating losses | 335 | 414 | |||||
Right-of-use assets | 345 | \u2014 | |||||
Other | 167 | 71 | |||||
Gross deferred tax liabilities | 3,008 | 2,366 | |||||
Deferred tax assets | |||||||
Net carryforwards | 4,168 | 4,353 | |||||
Intangible assets other than nondeductible goodwill | 793 | 985 | |||||
Share-based compensation | 94 | 106 | |||||
Retiree medical benefits | 154 | 167 | |||||
Other employee-related benefits | 350 | 303 | |||||
Pension benefits | 104 | 221 | |||||
Deductible state tax and interest benefits | 126 | 110 | |||||
Lease liabilities | 345 | \u2014 | |||||
Other | 741 | 739 | |||||
Gross deferred tax assets | 6,875 | 6,984 | |||||
Valuation allowances | (3,599 | ) | (3,753 | ) | |||
Deferred tax assets, net | 3,276 | 3,231 | |||||
Net deferred tax assets | $ | (268 | ) | $ | (865 | ) |
2019 | 2018 | 2017 | |||||||||
Balance, beginning of year | $ | 3,753 | $ | 1,163 | $ | 1,110 | |||||
Provision | (124 | ) | 2,639 | 33 | |||||||
Other (deductions)/additions | (30 | ) | (49 | ) | 20 | ||||||
Balance, end of year | $ | 3,599 | $ | 3,753 | $ | 1,163 |
Jurisdiction | Years Open to Audit | Years Currently Under Audit | ||
United States | 2014-2018 | 2014-2016 | ||
Mexico | 2017-2018 | None | ||
United Kingdom | 2017-2018 | 2017 | ||
Canada (Domestic) | 2015-2018 | 2015-2016 | ||
Canada (International) | 2010-2018 | 2010-2016 | ||
Russia | 2016-2018 | None |
2019 | 2018 | ||||||
Balance, beginning of year | $ | 1,440 | $ | 2,212 | |||
Additions for tax positions related to the current year | 179 | 142 | |||||
Additions for tax positions from prior years | 93 | 197 | |||||
Reductions for tax positions from prior years | (201 | ) | (822 | ) | |||
Settlement payments | (74 | ) | (233 | ) | |||
Statutes of limitations expiration | (47 | ) | (42 | ) | |||
Translation and other | 5 | (14 | ) | ||||
Balance, end of year | $ | 1,395 | $ | 1,440 |
2019 | 2018 | 2017 | ||||||||||
Share-based compensation expense - equity awards | $ | 237 | $ | 256 | $ | 292 | ||||||
Share-based compensation expense - liability awards | 8 | 20 | 13 | |||||||||
Restructuring charges | (2 | ) | (6 | ) | (2 | ) | ||||||
Total (a) | $ | 243 | $ | 270 | $ | 303 | ||||||
Income tax benefits recognized in earnings related to share-based compensation | $ | 39 | $ | 45 | $ | 89 | (b)\u00a0 | |||||
Excess tax benefits related to share-based compensation | $ | 50 | $ | 48 | $ | 115 |
(a) | Primarily recorded in selling, general and administrative expenses. |
(b) | Reflects tax rates effective for the 2017 tax year. |
2019 | 2018 | 2017 | ||||||
Expected life | 5 years | 5 years | 5 years | |||||
Risk-free interest rate | 2.4 | % | 2.6 | % | 2.0 | % | ||
Expected volatility | 14 | % | 12 | % | 11 | % | ||
Expected dividend yield | 3.1 | % | 2.7 | % | 2.7 | % |
Options(a) | Weighted-Average Exercise Price | Weighted-Average Contractual Life Remaining (years) | Aggregate Intrinsic Value(b) | |||||||||
Outstanding at December\u00a029, 2018 | 15,589 | $ | 79.94 | |||||||||
Granted | 1,286 | $ | 118.33 | |||||||||
Exercised | (4,882 | ) | $ | 67.34 | ||||||||
Forfeited/expired | (368 | ) | $ | 94.30 | ||||||||
Outstanding at December\u00a028, 2019 | 11,625 | $ | 89.03 | 4.68 | $ | 563,942 | ||||||
Exercisable at December\u00a028, 2019 | 7,972 | $ | 78.27 | 3.13 | $ | 472,512 | ||||||
Expected to vest as of December 28, 2019 | 3,364 | $ | 112.25 | 8.04 | $ | 85,066 |
(a) | Options are in thousands and include options previously granted under the PBG plan. No additional options or shares were granted under the PBG plan after 2009. |
(b) | In thousands. |
RSUs/PSUs(a) | Weighted-Average Grant-Date Fair Value | Weighted-Average Contractual Life Remaining (years) | Aggregate Intrinsic Value(a) | |||||||||
Outstanding at December\u00a029, 2018 | 7,175 | $ | 105.13 | |||||||||
Granted (b) | 2,754 | $ | 116.87 | |||||||||
Converted | (2,642 | ) | $ | 99.35 | ||||||||
Forfeited | (852 | ) | $ | 111.11 | ||||||||
Actual performance change (c) | (55 | ) | $ | 108.32 | ||||||||
Outstanding at December\u00a028, 2019 (d) | 6,380 | $ | 111.53 | 1.22 | $ | 877,487 | ||||||
Expected to vest as of December 28, 2019 | 5,876 | $ | 111.32 | 1.19 | $ | 808,220 |
(a) | In thousands. |
(b) | Grant activity for all PSUs are disclosed at target. |
(c) | Reflects the net number of PSUs above and below target levels based on actual performance measured at the end of the performance period. |
(d) | The outstanding PSUs for which the performance period has not ended as of December\u00a028, 2019, at the threshold, target and maximum award levels were zero, 0.7 million and 1.3 million, respectively. |
Long-Term Cash Award(a) | Balance Sheet Date Fair Value(a) | Contractual Life Remaining (years) | |||||||
Outstanding at December\u00a029, 2018 | $ | 54,710 | |||||||
Granted\u00a0(b) | 16,112 | ||||||||
Vested | (15,438 | ) | |||||||
Forfeited | (9,465 | ) | |||||||
Actual performance change (c) | (1,695 | ) | |||||||
Outstanding at December\u00a028, 2019 (d) | $ | 44,224 | $ | 45,875 | 1.10 | ||||
Expected to Vest at December 28, 2019 | $ | 42,998 | $ | 44,557 | 1.10 |
(a) | In thousands. |
(b) | Grant activity for all long-term cash awards are disclosed at target. |
(c) | Reflects the net number of long-term cash awards above and below target levels based on actual performance measured at the end of the performance period. |
(d) | The outstanding long-term cash awards for which the performance period has not ended as of December\u00a028, 2019, at the threshold, target and maximum award levels were zero, 28.5 million and 57.1 million, respectively. |
2019 | 2018 | 2017 | |||||||||
Stock Options | |||||||||||
Total number of options granted (a) | 1,286 | 1,429 | 1,481 | ||||||||
Weighted-average grant-date fair value of options granted | $ | 10.89 | $ | 9.80 | $ | 8.25 | |||||
Total intrinsic value of options exercised (a) | $ | 275,745 | $ | 224,663 | $ | 327,860 | |||||
Total grant-date fair value of options vested (a) | $ | 9,838 | $ | 15,506 | $ | 23,122 | |||||
RSUs/PSUs | |||||||||||
Total number of RSUs/PSUs granted (a) | 2,754 | 2,634 | 2,824 | ||||||||
Weighted-average grant-date fair value of RSUs/PSUs granted | $ | 116.87 | $ | 108.75 | $ | 109.92 | |||||
Total intrinsic value of RSUs/PSUs converted (a) | $ | 333,951 | $ | 260,287 | $ | 380,269 | |||||
Total grant-date fair value of RSUs/PSUs vested (a) | $ | 275,234 | $ | 232,141 | $ | 264,923 | |||||
PEPunits | |||||||||||
Total intrinsic value of PEPunits converted (a) | $ | \u2014 | $ | 30,147 | $ | 39,782 | |||||
Total grant-date fair value of PEPunits vested (a) | $ | \u2014 | $ | 9,430 | $ | 18,833 |
(a) | In thousands. |
2019 | 2018 | 2017 | ||||||||||
Share-based compensation expense - equity awards | $ | 237 | $ | 256 | $ | 292 | ||||||
Share-based compensation expense - liability awards | 8 | 20 | 13 | |||||||||
Restructuring charges | (2 | ) | (6 | ) | (2 | ) | ||||||
Total (a) | $ | 243 | $ | 270 | $ | 303 | ||||||
Income tax benefits recognized in earnings related to share-based compensation | $ | 39 | $ | 45 | $ | 89 | (b)\u00a0 | |||||
Excess tax benefits related to share-based compensation | $ | 50 | $ | 48 | $ | 115 |
(a) | Primarily recorded in selling, general and administrative expenses. |
(b) | Reflects tax rates effective for the 2017 tax year. |
2019 | 2018 | 2017 | ||||||||||
Share-based compensation expense - equity awards | $ | 237 | $ | 256 | $ | 292 | ||||||
Share-based compensation expense - liability awards | 8 | 20 | 13 | |||||||||
Restructuring charges | (2 | ) | (6 | ) | (2 | ) | ||||||
Total (a) | $ | 243 | $ | 270 | $ | 303 | ||||||
Income tax benefits recognized in earnings related to share-based compensation | $ | 39 | $ | 45 | $ | 89 | (b)\u00a0 | |||||
Excess tax benefits related to share-based compensation | $ | 50 | $ | 48 | $ | 115 |
2019 | 2018 | 2017 | ||||||
Expected life | 5 years | 5 years | 5 years | |||||
Risk-free interest rate | 2.4 | % | 2.6 | % | 2.0 | % | ||
Expected volatility | 14 | % | 12 | % | 11 | % | ||
Expected dividend yield | 3.1 | % | 2.7 | % | 2.7 | % |
Options(a) | Weighted-Average Exercise Price | Weighted-Average Contractual Life Remaining (years) | Aggregate Intrinsic Value(b) | |||||||||
Outstanding at December\u00a029, 2018 | 15,589 | $ | 79.94 | |||||||||
Granted | 1,286 | $ | 118.33 | |||||||||
Exercised | (4,882 | ) | $ | 67.34 | ||||||||
Forfeited/expired | (368 | ) | $ | 94.30 | ||||||||
Outstanding at December\u00a028, 2019 | 11,625 | $ | 89.03 | 4.68 | $ | 563,942 | ||||||
Exercisable at December\u00a028, 2019 | 7,972 | $ | 78.27 | 3.13 | $ | 472,512 | ||||||
Expected to vest as of December 28, 2019 | 3,364 | $ | 112.25 | 8.04 | $ | 85,066 |
(a) | Options are in thousands and include options previously granted under the PBG plan. No additional options or shares were granted under the PBG plan after 2009. |
RSUs/PSUs(a) | Weighted-Average Grant-Date Fair Value | Weighted-Average Contractual Life Remaining (years) | Aggregate Intrinsic Value(a) | |||||||||
Outstanding at December\u00a029, 2018 | 7,175 | $ | 105.13 | |||||||||
Granted (b) | 2,754 | $ | 116.87 | |||||||||
Converted | (2,642 | ) | $ | 99.35 | ||||||||
Forfeited | (852 | ) | $ | 111.11 | ||||||||
Actual performance change (c) | (55 | ) | $ | 108.32 | ||||||||
Outstanding at December\u00a028, 2019 (d) | 6,380 | $ | 111.53 | 1.22 | $ | 877,487 | ||||||
Expected to vest as of December 28, 2019 | 5,876 | $ | 111.32 | 1.19 | $ | 808,220 |
(a) | In thousands. |
(b) | Grant activity for all PSUs are disclosed at target. |
(c) | Reflects the net number of PSUs above and below target levels based on actual performance measured at the end of the performance period. |
Long-Term Cash Award(a) | Balance Sheet Date Fair Value(a) | Contractual Life Remaining (years) | |||||||
Outstanding at December\u00a029, 2018 | $ | 54,710 | |||||||
Granted\u00a0(b) | 16,112 | ||||||||
Vested | (15,438 | ) | |||||||
Forfeited | (9,465 | ) | |||||||
Actual performance change (c) | (1,695 | ) | |||||||
Outstanding at December\u00a028, 2019 (d) | $ | 44,224 | $ | 45,875 | 1.10 | ||||
Expected to Vest at December 28, 2019 | $ | 42,998 | $ | 44,557 | 1.10 |
(a) | In thousands. |
(b) | Grant activity for all long-term cash awards are disclosed at target. |
(c) | Reflects the net number of long-term cash awards above and below target levels based on actual performance measured at the end of the performance period. |
2019 | 2018 | 2017 | |||||||||
Stock Options | |||||||||||
Total number of options granted (a) | 1,286 | 1,429 | 1,481 | ||||||||
Weighted-average grant-date fair value of options granted | $ | 10.89 | $ | 9.80 | $ | 8.25 | |||||
Total intrinsic value of options exercised (a) | $ | 275,745 | $ | 224,663 | $ | 327,860 | |||||
Total grant-date fair value of options vested (a) | $ | 9,838 | $ | 15,506 | $ | 23,122 | |||||
RSUs/PSUs | |||||||||||
Total number of RSUs/PSUs granted (a) | 2,754 | 2,634 | 2,824 | ||||||||
Weighted-average grant-date fair value of RSUs/PSUs granted | $ | 116.87 | $ | 108.75 | $ | 109.92 | |||||
Total intrinsic value of RSUs/PSUs converted (a) | $ | 333,951 | $ | 260,287 | $ | 380,269 | |||||
Total grant-date fair value of RSUs/PSUs vested (a) | $ | 275,234 | $ | 232,141 | $ | 264,923 | |||||
PEPunits | |||||||||||
Total intrinsic value of PEPunits converted (a) | $ | \u2014 | $ | 30,147 | $ | 39,782 | |||||
Total grant-date fair value of PEPunits vested (a) | $ | \u2014 | $ | 9,430 | $ | 18,833 |
(a) | In thousands. |
\u00a0 | Pension | Retiree Medical | |||||||||||||||||||||
\u00a0 | U.S. | International | \u00a0 | \u00a0 | |||||||||||||||||||
\u00a0 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
Change in projected benefit liability | |||||||||||||||||||||||
Liability at beginning of year | $ | 13,807 | $ | 14,777 | $ | 3,098 | $ | 3,490 | $ | 996 | $ | 1,187 | |||||||||||
Service cost | 381 | 431 | 73 | 92 | 23 | 32 | |||||||||||||||||
Interest cost | 543 | 482 | 97 | 93 | 36 | 34 | |||||||||||||||||
Plan amendments | 15 | 83 | 1 | 2 | \u2014 | \u2014 | |||||||||||||||||
Participant contributions | \u2014 | \u2014 | 2 | 2 | \u2014 | \u2014 | |||||||||||||||||
Experience loss/(gain) | 2,091 | (972 | ) | 515 | (230 | ) | 36 | (147 | ) | ||||||||||||||
Benefit payments | (341 | ) | (956 | ) | (100 | ) | (114 | ) | (105 | ) | (108 | ) | |||||||||||
Settlement/curtailment | (1,268 | ) | (74 | ) | (31 | ) | (35 | ) | \u2014 | \u2014 | |||||||||||||
Special termination benefits | 2 | 36 | \u2014 | 2 | \u2014 | 1 | |||||||||||||||||
Other, including foreign currency adjustment | \u2014 | \u2014 | 98 | (204 | ) | 2 | (3 | ) | |||||||||||||||
Liability at end of year | $ | 15,230 | $ | 13,807 | $ | 3,753 | $ | 3,098 | $ | 988 | $ | 996 | |||||||||||
Change in fair value of plan assets | |||||||||||||||||||||||
Fair value at beginning of year | $ | 12,258 | $ | 12,582 | $ | 3,090 | $ | 3,460 | $ | 285 | $ | 321 | |||||||||||
Actual return on plan assets | 3,101 | (789 | ) | 551 | (136 | ) | 78 | (21 | ) | ||||||||||||||
Employer contributions/funding | 550 | 1,495 | 122 | 120 | 44 | 93 | |||||||||||||||||
Participant contributions | \u2014 | \u2014 | 2 | 2 | \u2014 | \u2014 | |||||||||||||||||
Benefit payments | (341 | ) | (956 | ) | (100 | ) | (114 | ) | (105 | ) | (108 | ) | |||||||||||
Settlement | (1,266 | ) | (74 | ) | (31 | ) | (32 | ) | \u2014 | \u2014 | |||||||||||||
Other, including foreign currency adjustment | \u2014 | \u2014 | 98 | (210 | ) | \u2014 | \u2014 | ||||||||||||||||
Fair value at end of year | $ | 14,302 | $ | 12,258 | $ | 3,732 | $ | 3,090 | $ | 302 | $ | 285 | |||||||||||
Funded status | $ | (928 | ) | $ | (1,549 | ) | $ | (21 | ) | $ | (8 | ) | $ | (686 | ) | $ | (711 | ) |
Amounts recognized | |||||||||||||||||||||||
Other assets | $ | 744 | $ | 185 | $ | 99 | $ | 81 | $ | \u2014 | $ | \u2014 | |||||||||||
Other current liabilities | (52 | ) | (107 | ) | (1 | ) | (1 | ) | (58 | ) | (41 | ) | |||||||||||
Other liabilities | (1,620 | ) | (1,627 | ) | (119 | ) | (88 | ) | (628 | ) | (670 | ) | |||||||||||
Net amount recognized | $ | (928 | ) | $ | (1,549 | ) | $ | (21 | ) | $ | (8 | ) | $ | (686 | ) | $ | (711 | ) | |||||
Amounts included in accumulated other comprehensive loss (pre-tax) | |||||||||||||||||||||||
Net loss/(gain) | $ | 3,516 | $ | 4,093 | $ | 914 | $ | 780 | $ | (285 | ) | $ | (287 | ) | |||||||||
Prior service cost/(credit) | 114 | 109 | \u2014 | (1 | ) | (32 | ) | (51 | ) | ||||||||||||||
Total | $ | 3,630 | $ | 4,202 | $ | 914 | $ | 779 | $ | (317 | ) | $ | (338 | ) | |||||||||
Changes recognized in net (gain)/loss included in other comprehensive loss | |||||||||||||||||||||||
Net (gain)/loss arising in current year | $ | (120 | ) | $ | 760 | $ | 152 | $ | 103 | $ | (24 | ) | $ | (107 | ) | ||||||||
Amortization and settlement recognition | (457 | ) | (187 | ) | (44 | ) | (56 | ) | 27 | 8 | |||||||||||||
Foreign currency translation loss/(gain) | \u2014 | \u2014 | 26 | (49 | ) | (1 | ) | 1 | |||||||||||||||
Total | $ | (577 | ) | $ | 573 | $ | 134 | $ | (2 | ) | $ | 2 | $ | (98 | ) | ||||||||
Accumulated benefit obligation at end of year | $ | 14,255 | $ | 12,890 | $ | 3,441 | $ | 2,806 |
\u00a0 | Pension | Retiree Medical | |||||||||||||||||||||
\u00a0 | U.S. | International | \u00a0 | \u00a0 | |||||||||||||||||||
\u00a0 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
Change in projected benefit liability | |||||||||||||||||||||||
Liability at beginning of year | $ | 13,807 | $ | 14,777 | $ | 3,098 | $ | 3,490 | $ | 996 | $ | 1,187 | |||||||||||
Service cost | 381 | 431 | 73 | 92 | 23 | 32 | |||||||||||||||||
Interest cost | 543 | 482 | 97 | 93 | 36 | 34 | |||||||||||||||||
Plan amendments | 15 | 83 | 1 | 2 | \u2014 | \u2014 | |||||||||||||||||
Participant contributions | \u2014 | \u2014 | 2 | 2 | \u2014 | \u2014 | |||||||||||||||||
Experience loss/(gain) | 2,091 | (972 | ) | 515 | (230 | ) | 36 | (147 | ) | ||||||||||||||
Benefit payments | (341 | ) | (956 | ) | (100 | ) | (114 | ) | (105 | ) | (108 | ) | |||||||||||
Settlement/curtailment | (1,268 | ) | (74 | ) | (31 | ) | (35 | ) | \u2014 | \u2014 | |||||||||||||
Special termination benefits | 2 | 36 | \u2014 | 2 | \u2014 | 1 | |||||||||||||||||
Other, including foreign currency adjustment | \u2014 | \u2014 | 98 | (204 | ) | 2 | (3 | ) | |||||||||||||||
Liability at end of year | $ | 15,230 | $ | 13,807 | $ | 3,753 | $ | 3,098 | $ | 988 | $ | 996 | |||||||||||
Change in fair value of plan assets | |||||||||||||||||||||||
Fair value at beginning of year | $ | 12,258 | $ | 12,582 | $ | 3,090 | $ | 3,460 | $ | 285 | $ | 321 | |||||||||||
Actual return on plan assets | 3,101 | (789 | ) | 551 | (136 | ) | 78 | (21 | ) | ||||||||||||||
Employer contributions/funding | 550 | 1,495 | 122 | 120 | 44 | 93 | |||||||||||||||||
Participant contributions | \u2014 | \u2014 | 2 | 2 | \u2014 | \u2014 | |||||||||||||||||
Benefit payments | (341 | ) | (956 | ) | (100 | ) | (114 | ) | (105 | ) | (108 | ) | |||||||||||
Settlement | (1,266 | ) | (74 | ) | (31 | ) | (32 | ) | \u2014 | \u2014 | |||||||||||||
Other, including foreign currency adjustment | \u2014 | \u2014 | 98 | (210 | ) | \u2014 | \u2014 | ||||||||||||||||
Fair value at end of year | $ | 14,302 | $ | 12,258 | $ | 3,732 | $ | 3,090 | $ | 302 | $ | 285 | |||||||||||
Funded status | $ | (928 | ) | $ | (1,549 | ) | $ | (21 | ) | $ | (8 | ) | $ | (686 | ) | $ | (711 | ) |
Amounts recognized | |||||||||||||||||||||||
Other assets | $ | 744 | $ | 185 | $ | 99 | $ | 81 | $ | \u2014 | $ | \u2014 | |||||||||||
Other current liabilities | (52 | ) | (107 | ) | (1 | ) | (1 | ) | (58 | ) | (41 | ) | |||||||||||
Other liabilities | (1,620 | ) | (1,627 | ) | (119 | ) | (88 | ) | (628 | ) | (670 | ) | |||||||||||
Net amount recognized | $ | (928 | ) | $ | (1,549 | ) | $ | (21 | ) | $ | (8 | ) | $ | (686 | ) | $ | (711 | ) | |||||
Amounts included in accumulated other comprehensive loss (pre-tax) | |||||||||||||||||||||||
Net loss/(gain) | $ | 3,516 | $ | 4,093 | $ | 914 | $ | 780 | $ | (285 | ) | $ | (287 | ) | |||||||||
Prior service cost/(credit) | 114 | 109 | \u2014 | (1 | ) | (32 | ) | (51 | ) | ||||||||||||||
Total | $ | 3,630 | $ | 4,202 | $ | 914 | $ | 779 | $ | (317 | ) | $ | (338 | ) | |||||||||
Changes recognized in net (gain)/loss included in other comprehensive loss | |||||||||||||||||||||||
Net (gain)/loss arising in current year | $ | (120 | ) | $ | 760 | $ | 152 | $ | 103 | $ | (24 | ) | $ | (107 | ) | ||||||||
Amortization and settlement recognition | (457 | ) | (187 | ) | (44 | ) | (56 | ) | 27 | 8 | |||||||||||||
Foreign currency translation loss/(gain) | \u2014 | \u2014 | 26 | (49 | ) | (1 | ) | 1 | |||||||||||||||
Total | $ | (577 | ) | $ | 573 | $ | 134 | $ | (2 | ) | $ | 2 | $ | (98 | ) | ||||||||
Accumulated benefit obligation at end of year | $ | 14,255 | $ | 12,890 | $ | 3,441 | $ | 2,806 |
\u2022 | Interest cost is the accrued interest on the projected benefit obligation due to the passage of time. |
\u2022 | Expected return on plan assets is the long-term return we expect to earn on plan investments for our funded plans that will be used to settle future benefit obligations. |
\u2022 | Amortization of prior service cost/(credit) represents the recognition in the income statement of benefit changes resulting from plan amendments. |
\u2022 | Amortization of net loss/(gain) represents the recognition in the income statement of changes in the amount of plan assets and the projected benefit obligation based on changes in assumptions and actual experience. |
\u2022 | Settlement/curtailment loss/(gain) represents the result of actions that effectively eliminate all or a portion of related projected benefit obligations. Settlements are triggered when payouts to settle the projected benefit obligation of a plan due to lump sums or other events exceed the annual service and interest cost. Settlements are recognized when actions are irrevocable and we are relieved of the primary responsibility and risk for projected benefit obligations. Curtailments are due to events such as plant closures or the sale of a business resulting in a reduction of future service or benefits. Curtailment losses are recognized when an event is probable and estimable, while curtailment gains are recognized when an event has occurred (when the related employees terminate or an amendment is adopted). |
\u2022 | Special termination benefits are the additional benefits offered to employees upon departure due to actions such as restructuring. |
\u00a0 | Pension | Retiree Medical | |||||||||||||||||||||||||||||||||
\u00a0 | U.S. | International | \u00a0 | \u00a0 | \u00a0 | ||||||||||||||||||||||||||||||
\u00a0 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Service cost | $ | 381 | $ | 431 | $ | 401 | $ | 73 | $ | 92 | $ | 91 | $ | 23 | $ | 32 | $ | 28 | |||||||||||||||||
Other pension and retiree medical benefits expense/(income): | |||||||||||||||||||||||||||||||||||
Interest cost | $ | 543 | $ | 482 | $ | 468 | $ | 97 | $ | 93 | $ | 89 | $ | 36 | $ | 34 | $ | 36 | |||||||||||||||||
Expected return on plan assets | (892 | ) | (943 | ) | (849 | ) | (188 | ) | (197 | ) | (176 | ) | (18 | ) | (19 | ) | (22 | ) | |||||||||||||||||
Amortization of prior service cost/(credits) | 10 | 3 | 1 | \u2014 | \u2014 | \u2014 | (19 | ) | (20 | ) | (25 | ) | |||||||||||||||||||||||
Amortization of net losses/(gains) | 161 | 179 | 123 | 32 | 45 | 53 | (27 | ) | (8 | ) | (12 | ) | |||||||||||||||||||||||
Settlement/curtailment losses (a) | 296 | 8 | 8 | 12 | 6 | 11 | \u2014 | \u2014 | \u2014 | ||||||||||||||||||||||||||
Special termination benefits | 1 | 36 | 60 | \u2014 | 2 | \u2014 | \u2014 | 1 | 2 | ||||||||||||||||||||||||||
Total other pension and retiree medical benefits expense/(income) | $ | 119 | $ | (235 | ) | $ | (189 | ) | $ | (47 | ) | $ | (51 | ) | $ | (23 | ) | $ | (28 | ) | $ | (12 | ) | $ | (21 | ) | |||||||||
Total | $ | 500 | $ | 196 | $ | 212 | $ | 26 | $ | 41 | $ | 68 | $ | (5 | ) | $ | 20 | $ | 7 |
(a) | In 2019, U.S. includes settlement charges related to the purchase of a group annuity contract of $220 million and a pension lump sum settlement charge of $53 million. |
\u00a0 | Pension | Retiree Medical | ||||||||||||||||||||||||
\u00a0 | U.S. | International | \u00a0 | \u00a0 | \u00a0 | |||||||||||||||||||||
\u00a0 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||
Liability discount rate | 3.3 | % | 4.4 | % | 3.7 | % | 2.5 | % | 3.4 | % | 3.0 | % | 3.1 | % | 4.2 | % | 3.5 | % | ||||||||
Service cost discount rate | 4.4 | % | 3.8 | % | 4.5 | % | 4.2 | % | 3.5 | % | 3.6 | % | 4.3 | % | 3.6 | % | 4.0 | % | ||||||||
Interest cost discount rate | 4.1 | % | 3.4 | % | 3.7 | % | 3.2 | % | 2.8 | % | 2.8 | % | 3.8 | % | 3.0 | % | 3.2 | % | ||||||||
Expected return on plan assets | 7.1 | % | 7.2 | % | 7.5 | % | 5.8 | % | 6.0 | % | 6.0 | % | 6.6 | % | 6.5 | % | 7.5 | % | ||||||||
Liability rate of salary increases | 3.1 | % | 3.1 | % | 3.1 | % | 3.3 | % | 3.7 | % | 3.7 | % | ||||||||||||||
Expense rate of salary increases | 3.1 | % | 3.1 | % | 3.1 | % | 3.7 | % | 3.7 | % | 3.6 | % |
\u00a0 | Pension | Retiree Medical | |||||||||||||||||||||
\u00a0 | U.S. | International | \u00a0 | \u00a0 | |||||||||||||||||||
\u00a0 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
Selected information for plans with accumulated benefit obligation in excess of plan assets | |||||||||||||||||||||||
Liability for service to date | $ | (9,194 | ) | $ | (8,040 | ) | $ | (192 | ) | $ | (155 | ) | |||||||||||
Fair value of plan assets | $ | 8,497 | $ | 7,223 | $ | 151 | $ | 121 | |||||||||||||||
Selected information for plans with projected benefit liability in excess of plan assets | |||||||||||||||||||||||
Benefit liability | $ | (10,169 | ) | $ | (8,957 | ) | $ | (632 | ) | $ | (514 | ) | $ | (988 | ) | $ | (996 | ) | |||||
Fair value of plan assets | $ | 8,497 | $ | 7,223 | $ | 512 | $ | 426 | $ | 302 | $ | 285 |
2020 | 2021 | 2022 | 2023 | 2024 | 2025 - 2029 | ||||||||||||||||||
Pension | $ | 945 | $ | 915 | $ | 900 | $ | 930 | $ | 970 | $ | 5,275 | |||||||||||
Retiree medical (a) | $ | 100 | $ | 95 | $ | 95 | $ | 90 | $ | 85 | $ | 355 |
(a) | Expected future benefit payments for our retiree medical plans do not reflect any estimated subsidies expected to be received under the 2003 Medicare Act. Subsidies are expected to be approximately $2 million for each of the years from 2020 through 2024 and approximately $4 million in total for 2025 through 2029. |
Pension | Retiree Medical | ||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
Discretionary (a) | $ | 417 | $ | 1,417 | $ | 6 | $ | \u2014 | $ | 37 | $ | \u2014 | |||||||||||
Non-discretionary | 255 | 198 | 158 | 44 | 56 | 56 | |||||||||||||||||
Total | $ | 672 | $ | 1,615 | $ | 164 | $ | 44 | $ | 93 | $ | 56 |
(a) | Includes $400 million contribution in 2019 and $1.4 billion contribution in 2018 to fund Plan A in the United States. |
2020 | 2019 | ||||
Fixed income | 50 | % | 47 | % | |
U.S. equity | 25 | % | 29 | % | |
International equity | 21 | % | 20 | % | |
Real estate | 4 | % | 4 | % |
\u00a0 | 2019 | 2018 | |||||||||||||||||
\u00a0 | Total | Quoted Prices in Active Markets for Identical Assets (Level\u00a01) | Significant Other Observable Inputs (Level\u00a02) | Significant Unobservable Inputs (Level\u00a03) | Total | ||||||||||||||
U.S. plan assets (a) | |||||||||||||||||||
Equity securities, including preferred stock (b) | $ | 6,605 | $ | 6,605 | $ | \u2014 | $ | \u2014 | $ | 5,605 | |||||||||
Government securities (c) | 2,154 | \u2014 | 2,154 | \u2014 | 1,674 | ||||||||||||||
Corporate bonds (c) | 4,737 | \u2014 | 4,737 | \u2014 | 4,145 | ||||||||||||||
Mortgage-backed securities (c) | 159 | \u2014 | 159 | \u2014 | 212 | ||||||||||||||
Contracts with insurance companies (d) | 9 | \u2014 | \u2014 | 9 | 9 | ||||||||||||||
Cash and cash equivalents | 275 | 275 | \u2014 | \u2014 | 215 | ||||||||||||||
Sub-total U.S. plan assets | 13,939 | $ | 6,880 | $ | 7,050 | $ | 9 | 11,860 | |||||||||||
Real estate commingled funds measured at net asset value (e) | 605 | 618 | |||||||||||||||||
Dividends and interest receivable, net of payables | 60 | 65 | |||||||||||||||||
Total U.S. plan assets | $ | 14,604 | $ | 12,543 | |||||||||||||||
International plan assets | |||||||||||||||||||
Equity securities (b) | $ | 1,973 | $ | 1,941 | $ | 32 | $ | \u2014 | $ | 1,651 | |||||||||
Government securities (c) | 524 | \u2014 | 524 | \u2014 | 433 | ||||||||||||||
Corporate bonds (c) | 585 | \u2014 | 585 | \u2014 | 478 | ||||||||||||||
Fixed income commingled funds (f) | 384 | 384 | \u2014 | \u2014 | 356 | ||||||||||||||
Contracts with insurance companies (d) | 42 | \u2014 | \u2014 | 42 | 36 | ||||||||||||||
Cash and cash equivalents | 24 | 24 | \u2014 | \u2014 | 27 | ||||||||||||||
Sub-total international plan assets | 3,532 | $ | 2,349 | $ | 1,141 | $ | 42 | 2,981 | |||||||||||
Real estate commingled funds measured at net asset value (e) | 193 | 102 | |||||||||||||||||
Dividends and interest receivable | 7 | 7 | |||||||||||||||||
Total international plan assets | $ | 3,732 | $ | 3,090 |
(a) | 2019 and 2018 amounts include $302 million and $285 million, respectively, of retiree medical plan assets that are restricted for purposes of providing health benefits for U.S. retirees and their beneficiaries. |
(b) | The equity securities portfolio was invested in U.S. and international common stock and commingled funds, and the preferred stock portfolio in the U.S. was invested in domestic and international corporate preferred stock investments. The common stock is based on quoted prices in active markets. The commingled funds are based on the published price of the fund and the U.S. commingled funds include one large-cap fund that represents 16% and 15% of total U.S. plan assets for 2019 and 2018, respectively. The preferred stock investments are based on quoted bid prices for comparable securities in the marketplace and broker/dealer quotes in active markets. |
(c) | These investments are based on quoted bid prices for comparable securities in the marketplace and broker/dealer quotes in active markets. Corporate bonds of U.S.-based companies represent 28% of total U.S. plan assets for both 2019 and 2018. |
(d) | Based on the fair value of the contracts as determined by the insurance companies using inputs that are not observable. The changes in Level 3 amounts were not significant in the years ended December\u00a028, 2019 and December\u00a029, 2018. |
(e) | The real estate commingled funds include investments in limited partnerships. These funds are based on the net asset value of the appraised value of investments owned by these funds as determined by independent third parties using inputs that are not observable. The majority of the funds are redeemable quarterly subject to availability of cash and have notice periods ranging from 45 to 90 days. |
(f) | Based on the published price of the fund. |
2020 | 2019 | ||||
Average increase assumed | 6 | % | 6 | % | |
Ultimate projected increase | 5 | % | 5 | % | |
Year of ultimate projected increase\u00a0 | 2039 | 2039 |
\u00a0 | Pension | Retiree Medical | |||||||||||||||||||||||||||||||||
\u00a0 | U.S. | International | \u00a0 | \u00a0 | \u00a0 | ||||||||||||||||||||||||||||||
\u00a0 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||||||||||
Service cost | $ | 381 | $ | 431 | $ | 401 | $ | 73 | $ | 92 | $ | 91 | $ | 23 | $ | 32 | $ | 28 | |||||||||||||||||
Other pension and retiree medical benefits expense/(income): | |||||||||||||||||||||||||||||||||||
Interest cost | $ | 543 | $ | 482 | $ | 468 | $ | 97 | $ | 93 | $ | 89 | $ | 36 | $ | 34 | $ | 36 | |||||||||||||||||
Expected return on plan assets | (892 | ) | (943 | ) | (849 | ) | (188 | ) | (197 | ) | (176 | ) | (18 | ) | (19 | ) | (22 | ) | |||||||||||||||||
Amortization of prior service cost/(credits) | 10 | 3 | 1 | \u2014 | \u2014 | \u2014 | (19 | ) | (20 | ) | (25 | ) | |||||||||||||||||||||||
Amortization of net losses/(gains) | 161 | 179 | 123 | 32 | 45 | 53 | (27 | ) | (8 | ) | (12 | ) | |||||||||||||||||||||||
Settlement/curtailment losses (a) | 296 | 8 | 8 | 12 | 6 | 11 | \u2014 | \u2014 | \u2014 | ||||||||||||||||||||||||||
Special termination benefits | 1 | 36 | 60 | \u2014 | 2 | \u2014 | \u2014 | 1 | 2 | ||||||||||||||||||||||||||
Total other pension and retiree medical benefits expense/(income) | $ | 119 | $ | (235 | ) | $ | (189 | ) | $ | (47 | ) | $ | (51 | ) | $ | (23 | ) | $ | (28 | ) | $ | (12 | ) | $ | (21 | ) | |||||||||
Total | $ | 500 | $ | 196 | $ | 212 | $ | 26 | $ | 41 | $ | 68 | $ | (5 | ) | $ | 20 | $ | 7 |
\u00a0 | Pension | Retiree Medical | ||||||||||||||||||||||||
\u00a0 | U.S. | International | \u00a0 | \u00a0 | \u00a0 | |||||||||||||||||||||
\u00a0 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||
Liability discount rate | 3.3 | % | 4.4 | % | 3.7 | % | 2.5 | % | 3.4 | % | 3.0 | % | 3.1 | % | 4.2 | % | 3.5 | % | ||||||||
Service cost discount rate | 4.4 | % | 3.8 | % | 4.5 | % | 4.2 | % | 3.5 | % | 3.6 | % | 4.3 | % | 3.6 | % | 4.0 | % | ||||||||
Interest cost discount rate | 4.1 | % | 3.4 | % | 3.7 | % | 3.2 | % | 2.8 | % | 2.8 | % | 3.8 | % | 3.0 | % | 3.2 | % | ||||||||
Expected return on plan assets | 7.1 | % | 7.2 | % | 7.5 | % | 5.8 | % | 6.0 | % | 6.0 | % | 6.6 | % | 6.5 | % | 7.5 | % | ||||||||
Liability rate of salary increases | 3.1 | % | 3.1 | % | 3.1 | % | 3.3 | % | 3.7 | % | 3.7 | % | ||||||||||||||
Expense rate of salary increases | 3.1 | % | 3.1 | % | 3.1 | % | 3.7 | % | 3.7 | % | 3.6 | % |
2020 | 2021 | 2022 | 2023 | 2024 | 2025 - 2029 | ||||||||||||||||||
Pension | $ | 945 | $ | 915 | $ | 900 | $ | 930 | $ | 970 | $ | 5,275 | |||||||||||
Retiree medical (a) | $ | 100 | $ | 95 | $ | 95 | $ | 90 | $ | 85 | $ | 355 |
(a) | Expected future benefit payments for our retiree medical plans do not reflect any estimated subsidies expected to be received under the 2003 Medicare Act. Subsidies are expected to be approximately $2 million for each of the years from 2020 through 2024 and approximately $4 million in total for 2025 through 2029. |
2020 | 2019 | ||||
Fixed income | 50 | % | 47 | % | |
U.S. equity | 25 | % | 29 | % | |
International equity | 21 | % | 20 | % | |
Real estate | 4 | % | 4 | % |
\u00a0 | 2019 | 2018 | |||||||||||||||||
\u00a0 | Total | Quoted Prices in Active Markets for Identical Assets (Level\u00a01) | Significant Other Observable Inputs (Level\u00a02) | Significant Unobservable Inputs (Level\u00a03) | Total | ||||||||||||||
U.S. plan assets (a) | |||||||||||||||||||
Equity securities, including preferred stock (b) | $ | 6,605 | $ | 6,605 | $ | \u2014 | $ | \u2014 | $ | 5,605 | |||||||||
Government securities (c) | 2,154 | \u2014 | 2,154 | \u2014 | 1,674 | ||||||||||||||
Corporate bonds (c) | 4,737 | \u2014 | 4,737 | \u2014 | 4,145 | ||||||||||||||
Mortgage-backed securities (c) | 159 | \u2014 | 159 | \u2014 | 212 | ||||||||||||||
Contracts with insurance companies (d) | 9 | \u2014 | \u2014 | 9 | 9 | ||||||||||||||
Cash and cash equivalents | 275 | 275 | \u2014 | \u2014 | 215 | ||||||||||||||
Sub-total U.S. plan assets | 13,939 | $ | 6,880 | $ | 7,050 | $ | 9 | 11,860 | |||||||||||
Real estate commingled funds measured at net asset value (e) | 605 | 618 | |||||||||||||||||
Dividends and interest receivable, net of payables | 60 | 65 | |||||||||||||||||
Total U.S. plan assets | $ | 14,604 | $ | 12,543 | |||||||||||||||
International plan assets | |||||||||||||||||||
Equity securities (b) | $ | 1,973 | $ | 1,941 | $ | 32 | $ | \u2014 | $ | 1,651 | |||||||||
Government securities (c) | 524 | \u2014 | 524 | \u2014 | 433 | ||||||||||||||
Corporate bonds (c) | 585 | \u2014 | 585 | \u2014 | 478 | ||||||||||||||
Fixed income commingled funds (f) | 384 | 384 | \u2014 | \u2014 | 356 | ||||||||||||||
Contracts with insurance companies (d) | 42 | \u2014 | \u2014 | 42 | 36 | ||||||||||||||
Cash and cash equivalents | 24 | 24 | \u2014 | \u2014 | 27 | ||||||||||||||
Sub-total international plan assets | 3,532 | $ | 2,349 | $ | 1,141 | $ | 42 | 2,981 | |||||||||||
Real estate commingled funds measured at net asset value (e) | 193 | 102 | |||||||||||||||||
Dividends and interest receivable | 7 | 7 | |||||||||||||||||
Total international plan assets | $ | 3,732 | $ | 3,090 |
(a) | 2019 and 2018 amounts include $302 million and $285 million, respectively, of retiree medical plan assets that are restricted for purposes of providing health benefits for U.S. retirees and their beneficiaries. |
(b) | The equity securities portfolio was invested in U.S. and international common stock and commingled funds, and the preferred stock portfolio in the U.S. was invested in domestic and international corporate preferred stock investments. The common stock is based on quoted prices in active markets. The commingled funds are based on the published price of the fund and the U.S. commingled funds include one large-cap fund that represents 16% and 15% of total U.S. plan assets for 2019 and 2018, respectively. The preferred stock investments are based on quoted bid prices for comparable securities in the marketplace and broker/dealer quotes in active markets. |
(c) | These investments are based on quoted bid prices for comparable securities in the marketplace and broker/dealer quotes in active markets. Corporate bonds of U.S.-based companies represent 28% of total U.S. plan assets for both 2019 and 2018. |
(d) | Based on the fair value of the contracts as determined by the insurance companies using inputs that are not observable. The changes in Level 3 amounts were not significant in the years ended December\u00a028, 2019 and December\u00a029, 2018. |
(e) | The real estate commingled funds include investments in limited partnerships. These funds are based on the net asset value of the appraised value of investments owned by these funds as determined by independent third parties using inputs that are not observable. The majority of the funds are redeemable quarterly subject to availability of cash and have notice periods ranging from 45 to 90 days. |
2020 | 2019 | ||||
Average increase assumed | 6 | % | 6 | % | |
Ultimate projected increase | 5 | % | 5 | % | |
Year of ultimate projected increase\u00a0 | 2039 | 2039 |
2019(a) | 2018(a) | ||||||
Short-term debt obligations\u00a0(b) | |||||||
Current maturities of long-term debt | $ | 2,848 | $ | 3,953 | |||
Other borrowings (6.4% and 6.0%) | 72 | 73 | |||||
$ | 2,920 | $ | 4,026 | ||||
Long-term debt obligations (b) | |||||||
Notes due 2019 (3.1%) | \u2014 | 3,948 | |||||
Notes due 2020 (2.7% and 3.9%) | 2,840 | 3,784 | |||||
Notes due 2021 (2.4% and 3.1%) | 3,276 | 3,257 | |||||
Notes due 2022 (2.7% and 2.8%) | 3,831 | 3,802 | |||||
Notes due 2023 (2.8% and 2.9%) | 1,272 | 1,270 | |||||
Notes due 2024 (3.4% and 3.2%) | 1,839 | 1,816 | |||||
Notes due 2025-2049 (3.4% and 3.7%) | 18,910 | 14,345 | |||||
Other, due 2019-2026 (1.3% and 1.3%) | 28 | 26 | |||||
31,996 | 32,248 | ||||||
Less: current maturities of long-term debt obligations | (2,848 | ) | (3,953 | ) | |||
Total | $ | 29,148 | $ | 28,295 |
(a) | Amounts are shown net of unamortized net discounts of $163 million and $119 million for 2019 and 2018, respectively. |
(b) | The interest rates presented reflect weighted-average effective interest rates at year-end. Certain of our fixed rate indebtedness have been swapped to floating rates through the use of interest rate derivative instruments. See Note 9 for further information regarding our interest rate derivative instruments. |
Interest Rate | Maturity Date | Amount(a) | ||||||
0.750 | % | March 2027 | \u20ac | 500 | (b)\u00a0 | |||
1.125 | % | March 2031 | \u20ac | 500 | (b)\u00a0 | |||
2.625 | % | July 2029 | $ | 1,000 | ||||
3.375 | % | July 2049 | $ | 1,000 | ||||
0.875 | % | October 2039 | \u20ac | 500 | (b)\u00a0 | |||
2.875 | % | October 2049 | $ | 1,000 |
(a) | Represents gross proceeds from issuances of long-term debt excluding debt issuance costs, discounts and premiums. |
(b) | These notes, issued in euros, were designated as net investment hedges to partially offset the effects of foreign currency on our investments in certain of our foreign subsidiaries. |
Interest Rate | Maturity Date | Amount Tendered | |||||
7.290 | % | September 2026 | $ | 11 | |||
7.440 | % | September 2026 | $ | 4 | |||
7.000 | % | March 2029 | $ | 357 | |||
5.500 | % | May 2035 | $ | 138 | |||
4.875 | % | November 2040 | $ | 410 | |||
5.500 | % | January 2040 | $ | 408 |
Interest Rate | Maturity Date | Amount Exchanged | |||||
7.290 | % | September 2026 | $ | 88 | |||
7.440 | % | September 2026 | $ | 21 | |||
7.000 | % | March 2029 | $ | 516 | |||
5.500 | % | May 2035 | $ | 107 |
2019(a) | 2018(a) | ||||||
Short-term debt obligations\u00a0(b) | |||||||
Current maturities of long-term debt | $ | 2,848 | $ | 3,953 | |||
Other borrowings (6.4% and 6.0%) | 72 | 73 | |||||
$ | 2,920 | $ | 4,026 | ||||
Long-term debt obligations (b) | |||||||
Notes due 2019 (3.1%) | \u2014 | 3,948 | |||||
Notes due 2020 (2.7% and 3.9%) | 2,840 | 3,784 | |||||
Notes due 2021 (2.4% and 3.1%) | 3,276 | 3,257 | |||||
Notes due 2022 (2.7% and 2.8%) | 3,831 | 3,802 | |||||
Notes due 2023 (2.8% and 2.9%) | 1,272 | 1,270 | |||||
Notes due 2024 (3.4% and 3.2%) | 1,839 | 1,816 | |||||
Notes due 2025-2049 (3.4% and 3.7%) | 18,910 | 14,345 | |||||
Other, due 2019-2026 (1.3% and 1.3%) | 28 | 26 | |||||
31,996 | 32,248 | ||||||
Less: current maturities of long-term debt obligations | (2,848 | ) | (3,953 | ) | |||
Total | $ | 29,148 | $ | 28,295 |
(a) | Amounts are shown net of unamortized net discounts of $163 million and $119 million for 2019 and 2018, respectively. |
\u2022 | commodity prices, affecting the cost of our raw materials and energy; |
\u2022 | foreign exchange rates and currency restrictions; and |
\u2022 | interest rates. |
\u00a0 | 2019 | 2018 | |||||||||||||||
\u00a0 | Fair Value Hierarchy Levels(a) | Assets(a) | Liabilities(a) | Assets(a) | Liabilities(a) | ||||||||||||
Available-for-sale debt securities (b) | 2 | $ | \u2014 | $ | \u2014 | $ | 3,658 | $ | \u2014 | ||||||||
Short-term investments (c) | 1 | $ | 229 | $ | \u2014 | $ | 196 | $ | \u2014 | ||||||||
Prepaid forward contracts (d) | 2 | $ | 17 | $ | \u2014 | $ | 22 | $ | \u2014 | ||||||||
Deferred compensation (e) | 2 | $ | \u2014 | $ | 468 | $ | \u2014 | $ | 450 | ||||||||
Derivatives designated as fair value hedging instruments: | |||||||||||||||||
Interest rate (f) | 2 | $ | \u2014 | $ | 5 | $ | 1 | $ | 108 | ||||||||
Derivatives designated as cash flow hedging instruments: | |||||||||||||||||
Foreign exchange (g) | 2 | $ | 5 | $ | 32 | $ | 44 | $ | 14 | ||||||||
Interest rate (g) | 2 | \u2014 | 390 | \u2014 | 323 | ||||||||||||
Commodity (h) | 1 | 2 | 5 | \u2014 | 1 | ||||||||||||
Commodity (i) | 2 | 2 | 5 | \u2014 | 3 | ||||||||||||
$ | 9 | $ | 432 | $ | 44 | $ | 341 | ||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Foreign exchange (g) | 2 | $ | 3 | $ | 2 | $ | 3 | $ | 10 | ||||||||
Commodity (h) | 1 | 23 | 7 | 2 | 17 | ||||||||||||
Commodity (i) | 2 | 6 | 24 | 5 | 92 | ||||||||||||
$ | 32 | $ | 33 | $ | 10 | $ | 119 | ||||||||||
Total derivatives at fair value (j) | $ | 41 | $ | 470 | $ | 55 | $ | 568 | |||||||||
Total | $ | 287 | $ | 938 | $ | 3,931 | $ | 1,018 |
(a) | Fair value hierarchy levels are defined in Note 7. Unless otherwise noted, financial assets are classified on our balance sheet within prepaid expenses and other current assets and other assets. Financial liabilities are classified on our balance sheet within accounts payable and other current liabilities and other liabilities. |
(b) | Based on quoted broker prices or other significant inputs derived from or corroborated by observable market data. As of December\u00a029, 2018, these debt securities were primarily classified as cash equivalents. The decrease in available-for-sale debt securities was due to maturities and sales during the current year. |
(c) | Based on the price of index funds. These investments are classified as short-term investments and are used to manage a portion of market risk arising from our deferred compensation liability. |
(d) | Based primarily on the price of our common stock. |
(e) | Based on the fair value of investments corresponding to employees\u2019 investment elections. |
(f) | Based on LIBOR forward rates. As of December\u00a028, 2019 and December\u00a029, 2018, the carrying amount of hedged fixed-rate debt was $2.2 billion and $7.7 billion, respectively, and classified on our balance sheet within short-term and long-term debt obligations. As of December 28, 2019, the cumulative amount of fair value hedging adjustments to hedged fixed-rate debt was $5 million. As of December\u00a028, 2019, the cumulative amount of fair value hedging adjustments on discontinued hedges was a $49 million loss, which is being amortized over the remaining life of the related debt obligations. |
(g) | Based on recently reported market transactions of spot and forward rates. |
(h) | Based on quoted contract prices on futures exchange markets. |
(i) | Based on recently reported market transactions of swap arrangements. |
(j) | Derivative assets and liabilities are presented on a gross basis on our balance sheet. Amounts subject to enforceable master netting arrangements or similar agreements which are not offset on the balance sheet as of December\u00a028, 2019 and December\u00a029, 2018 were not material. Collateral received or posted against our asset or liability positions is classified as restricted cash. See Note 15 for further information. |
\u00a0 | Fair\u00a0Value/Non- designated\u00a0Hedges | Cash Flow and Net Investment Hedges | |||||||||||||||||||||
\u00a0 | Losses/(Gains) Recognized\u00a0in Income\u00a0Statement(a) | Losses/(Gains) Recognized\u00a0in Accumulated\u00a0Other Comprehensive\u00a0Loss | Losses/(Gains) Reclassified\u00a0from Accumulated\u00a0Other Comprehensive\u00a0Loss into Income Statement(b) | ||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Foreign exchange | $ | (1 | ) | $ | 9 | $ | 57 | $ | (52 | ) | $ | 3 | $ | (8 | ) | ||||||||
Interest rate | (64 | ) | 53 | 67 | 110 | 7 | 119 | ||||||||||||||||
Commodity | (17 | ) | 117 | 7 | 3 | 4 | \u2014 | ||||||||||||||||
Net investment | \u2014 | \u2014 | (30 | ) | (77 | ) | \u2014 | \u2014 | |||||||||||||||
Total | $ | (82 | ) | $ | 179 | $ | 101 | $ | (16 | ) | $ | 14 | $ | 111 |
(a) | Foreign exchange derivative losses/gains are primarily included in selling, general and administrative expenses. Interest rate derivative losses/gains are primarily from fair value hedges and are included in interest expense. These losses/gains are substantially offset by decreases/increases in the value of the underlying debt, which are also included in interest expense. Commodity derivative losses/gains are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. |
(b) | Foreign exchange derivative losses/gains are primarily included in cost of sales. Interest rate derivative losses/gains are included in interest expense. Commodity derivative losses/gains are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. |
\u00a0 | 2019 | 2018 | |||||||||||||||
\u00a0 | Fair Value Hierarchy Levels(a) | Assets(a) | Liabilities(a) | Assets(a) | Liabilities(a) | ||||||||||||
Available-for-sale debt securities (b) | 2 | $ | \u2014 | $ | \u2014 | $ | 3,658 | $ | \u2014 | ||||||||
Short-term investments (c) | 1 | $ | 229 | $ | \u2014 | $ | 196 | $ | \u2014 | ||||||||
Prepaid forward contracts (d) | 2 | $ | 17 | $ | \u2014 | $ | 22 | $ | \u2014 | ||||||||
Deferred compensation (e) | 2 | $ | \u2014 | $ | 468 | $ | \u2014 | $ | 450 | ||||||||
Derivatives designated as fair value hedging instruments: | |||||||||||||||||
Interest rate (f) | 2 | $ | \u2014 | $ | 5 | $ | 1 | $ | 108 | ||||||||
Derivatives designated as cash flow hedging instruments: | |||||||||||||||||
Foreign exchange (g) | 2 | $ | 5 | $ | 32 | $ | 44 | $ | 14 | ||||||||
Interest rate (g) | 2 | \u2014 | 390 | \u2014 | 323 | ||||||||||||
Commodity (h) | 1 | 2 | 5 | \u2014 | 1 | ||||||||||||
Commodity (i) | 2 | 2 | 5 | \u2014 | 3 | ||||||||||||
$ | 9 | $ | 432 | $ | 44 | $ | 341 | ||||||||||
Derivatives not designated as hedging instruments: | |||||||||||||||||
Foreign exchange (g) | 2 | $ | 3 | $ | 2 | $ | 3 | $ | 10 | ||||||||
Commodity (h) | 1 | 23 | 7 | 2 | 17 | ||||||||||||
Commodity (i) | 2 | 6 | 24 | 5 | 92 | ||||||||||||
$ | 32 | $ | 33 | $ | 10 | $ | 119 | ||||||||||
Total derivatives at fair value (j) | $ | 41 | $ | 470 | $ | 55 | $ | 568 | |||||||||
Total | $ | 287 | $ | 938 | $ | 3,931 | $ | 1,018 |
(a) | Fair value hierarchy levels are defined in Note 7. Unless otherwise noted, financial assets are classified on our balance sheet within prepaid expenses and other current assets and other assets. Financial liabilities are classified on our balance sheet within accounts payable and other current liabilities and other liabilities. |
(b) | Based on quoted broker prices or other significant inputs derived from or corroborated by observable market data. As of December\u00a029, 2018, these debt securities were primarily classified as cash equivalents. The decrease in available-for-sale debt securities was due to maturities and sales during the current year. |
(c) | Based on the price of index funds. These investments are classified as short-term investments and are used to manage a portion of market risk arising from our deferred compensation liability. |
(d) | Based primarily on the price of our common stock. |
(e) | Based on the fair value of investments corresponding to employees\u2019 investment elections. |
(f) | Based on LIBOR forward rates. As of December\u00a028, 2019 and December\u00a029, 2018, the carrying amount of hedged fixed-rate debt was $2.2 billion and $7.7 billion, respectively, and classified on our balance sheet within short-term and long-term debt obligations. As of December 28, 2019, the cumulative amount of fair value hedging adjustments to hedged fixed-rate debt was $5 million. As of December\u00a028, 2019, the cumulative amount of fair value hedging adjustments on discontinued hedges was a $49 million loss, which is being amortized over the remaining life of the related debt obligations. |
(g) | Based on recently reported market transactions of spot and forward rates. |
(h) | Based on quoted contract prices on futures exchange markets. |
(i) | Based on recently reported market transactions of swap arrangements. |
\u00a0 | Fair\u00a0Value/Non- designated\u00a0Hedges | Cash Flow and Net Investment Hedges | |||||||||||||||||||||
\u00a0 | Losses/(Gains) Recognized\u00a0in Income\u00a0Statement(a) | Losses/(Gains) Recognized\u00a0in Accumulated\u00a0Other Comprehensive\u00a0Loss | Losses/(Gains) Reclassified\u00a0from Accumulated\u00a0Other Comprehensive\u00a0Loss into Income Statement(b) | ||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Foreign exchange | $ | (1 | ) | $ | 9 | $ | 57 | $ | (52 | ) | $ | 3 | $ | (8 | ) | ||||||||
Interest rate | (64 | ) | 53 | 67 | 110 | 7 | 119 | ||||||||||||||||
Commodity | (17 | ) | 117 | 7 | 3 | 4 | \u2014 | ||||||||||||||||
Net investment | \u2014 | \u2014 | (30 | ) | (77 | ) | \u2014 | \u2014 | |||||||||||||||
Total | $ | (82 | ) | $ | 179 | $ | 101 | $ | (16 | ) | $ | 14 | $ | 111 |
(a) | Foreign exchange derivative losses/gains are primarily included in selling, general and administrative expenses. Interest rate derivative losses/gains are primarily from fair value hedges and are included in interest expense. These losses/gains are substantially offset by decreases/increases in the value of the underlying debt, which are also included in interest expense. Commodity derivative losses/gains are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. |
(b) | Foreign exchange derivative losses/gains are primarily included in cost of sales. Interest rate derivative losses/gains are included in interest expense. Commodity derivative losses/gains are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. |
\u00a0 | 2019 | 2018 | 2017 | |||||||||||||||||
\u00a0 | Income | Shares(a) | Income | Shares(a) | Income | Shares(a) | ||||||||||||||
Net income attributable to PepsiCo | $ | 7,314 | $ | 12,515 | $ | 4,857 | ||||||||||||||
Preferred stock: | ||||||||||||||||||||
Redemption premium (b) | \u2014 | (2 | ) | (4 | ) | |||||||||||||||
Net income available for PepsiCo common shareholders | $ | 7,314 | 1,399 | $ | 12,513 | 1,415 | $ | 4,853 | 1,425 | |||||||||||
Basic net income attributable to PepsiCo per common share | $ | 5.23 | $ | 8.84 | $ | 3.40 | ||||||||||||||
Net income available for PepsiCo common shareholders | $ | 7,314 | 1,399 | $ | 12,513 | 1,415 | $ | 4,853 | 1,425 | |||||||||||
Dilutive securities: | ||||||||||||||||||||
Stock options, RSUs, PSUs, PEPunits and Other (c) | \u2014 | 8 | \u2014 | 10 | \u2014 | 12 | ||||||||||||||
Employee stock ownership plan (ESOP) convertible preferred stock | \u2014 | \u2014 | 2 | \u2014 | 4 | 1 | ||||||||||||||
Diluted | $ | 7,314 | 1,407 | $ | 12,515 | 1,425 | $ | 4,857 | 1,438 | |||||||||||
Diluted net income attributable to PepsiCo per common share | $ | 5.20 | $ | 8.78 | $ | 3.38 |
(a) | Weighted-average common shares outstanding (in millions). |
(b) | See Note 11 for further information. |
(c) | The dilutive effect of these securities is calculated using the treasury stock method. |
2019 | 2018 | 2017 | |||||||||
Out-of-the-money options (a) | 0.3 | 0.7 | 0.4 | ||||||||
Average exercise price per option | $ | 117.55 | $ | 109.83 | $ | 110.12 |
\u00a0 | 2019 | 2018 | 2017 | |||||||||||||||||
\u00a0 | Income | Shares(a) | Income | Shares(a) | Income | Shares(a) | ||||||||||||||
Net income attributable to PepsiCo | $ | 7,314 | $ | 12,515 | $ | 4,857 | ||||||||||||||
Preferred stock: | ||||||||||||||||||||
Redemption premium (b) | \u2014 | (2 | ) | (4 | ) | |||||||||||||||
Net income available for PepsiCo common shareholders | $ | 7,314 | 1,399 | $ | 12,513 | 1,415 | $ | 4,853 | 1,425 | |||||||||||
Basic net income attributable to PepsiCo per common share | $ | 5.23 | $ | 8.84 | $ | 3.40 | ||||||||||||||
Net income available for PepsiCo common shareholders | $ | 7,314 | 1,399 | $ | 12,513 | 1,415 | $ | 4,853 | 1,425 | |||||||||||
Dilutive securities: | ||||||||||||||||||||
Stock options, RSUs, PSUs, PEPunits and Other (c) | \u2014 | 8 | \u2014 | 10 | \u2014 | 12 | ||||||||||||||
Employee stock ownership plan (ESOP) convertible preferred stock | \u2014 | \u2014 | 2 | \u2014 | 4 | 1 | ||||||||||||||
Diluted | $ | 7,314 | 1,407 | $ | 12,515 | 1,425 | $ | 4,857 | 1,438 | |||||||||||
Diluted net income attributable to PepsiCo per common share | $ | 5.20 | $ | 8.78 | $ | 3.38 |
(a) | Weighted-average common shares outstanding (in millions). |
(b) | See Note 11 for further information. |
(c) | The dilutive effect of these securities is calculated using the treasury stock method. |
2019 | 2018 | 2017 | |||||||||
Out-of-the-money options (a) | 0.3 | 0.7 | 0.4 | ||||||||
Average exercise price per option | $ | 117.55 | $ | 109.83 | $ | 110.12 |
Currency Translation Adjustment | Cash Flow Hedges | Pension and Retiree Medical | Available-For-Sale Securities | Other | Accumulated Other Comprehensive Loss Attributable to PepsiCo | ||||||||||||||||||
Balance as of December 31, 2016 (a) | $ | (11,386 | ) | $ | 83 | $ | (2,645 | ) | $ | 64 | $ | (35 | ) | $ | (13,919 | ) | |||||||
Other comprehensive (loss)/income before reclassifications (b) | 1,049 | 130 | (375 | ) | 25 | \u2014 | 829 | ||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | \u2014 | (171 | ) | 158 | (99 | ) | \u2014 | (112 | ) | ||||||||||||||
Net other comprehensive (loss)/income | 1,049 | (41 | ) | (217 | ) | (74 | ) | \u2014 | 717 | ||||||||||||||
Tax amounts | 60 | 5 | 58 | 6 | 16 | 145 | |||||||||||||||||
Balance as of December 30, 2017 (a) | (10,277 | ) | 47 | (2,804 | ) | (4 | ) | (19 | ) | (13,057 | ) | ||||||||||||
Other comprehensive (loss)/income before reclassifications (c) | (1,664 | ) | (61 | ) | (813 | ) | 6 | \u2014 | (2,532 | ) | |||||||||||||
Amounts reclassified from accumulated other comprehensive loss | 44 | 111 | 218 | \u2014 | \u2014 | 373 | |||||||||||||||||
Net other comprehensive (loss)/income | (1,620 | ) | 50 | (595 | ) | 6 | \u2014 | (2,159 | ) | ||||||||||||||
Tax amounts | (21 | ) | (10 | ) | 128 | \u2014 | \u2014 | 97 | |||||||||||||||
Balance as of December 29, 2018\u00a0(a) | (11,918 | ) | 87 | (3,271 | ) | 2 | (19 | ) | (15,119 | ) | |||||||||||||
Other comprehensive (loss)/income before reclassifications (d) | 636 | (131 | ) | (89 | ) | (2 | ) | \u2014 | 414 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | \u2014 | 14 | 468 | \u2014 | \u2014 | 482 | |||||||||||||||||
Net other comprehensive (loss)/income | 636 | (117 | ) | 379 | (2 | ) | \u2014 | 896 | |||||||||||||||
Tax amounts | (8 | ) | 27 | (96 | ) | \u2014 | \u2014 | (77 | ) | ||||||||||||||
Balance as of December 28, 2019 (a) | $ | (11,290 | ) | $ | (3 | ) | $ | (2,988 | ) | $ | \u2014 | $ | (19 | ) | $ | (14,300 | ) |
(a) | Pension and retiree medical amounts are net of taxes of $1,280 million as of December\u00a031, 2016, $1,338 million as of December\u00a030, 2017, $1,466 million as of December\u00a029, 2018 and $1,370 million as of December\u00a028, 2019. |
(b) | Currency translation adjustment primarily reflects the appreciation of the euro, Russian ruble, Pound sterling and Canadian dollar. |
(c) | Currency translation adjustment primarily reflects the depreciation of the Russian ruble, Canadian dollar, Pound sterling and Brazilian real. |
(d) | Currency translation adjustment primarily reflects the appreciation of the Russian ruble, Canadian dollar, Mexican peso and Pound sterling. |
Amount Reclassified from Accumulated Other Comprehensive Loss | Affected Line Item in the Income Statement | ||||||||||||
2019 | 2018 | 2017 | |||||||||||
Currency translation: | |||||||||||||
Divestitures | $ | \u2014 | $ | 44 | $ | \u2014 | Selling, general and administrative expenses | ||||||
Cash flow hedges: | |||||||||||||
Foreign exchange contracts | $ | 1 | $ | (1 | ) | $ | \u2014 | Net revenue | |||||
Foreign exchange contracts | 2 | (7 | ) | 10 | Cost of sales | ||||||||
Interest rate derivatives | 7 | 119 | (184 | ) | Interest expense | ||||||||
Commodity contracts | 3 | 3 | 4 | Cost of sales | |||||||||
Commodity contracts | 1 | (3 | ) | (1 | ) | Selling, general and administrative expenses | |||||||
Net losses/(gains) before tax | 14 | 111 | (171 | ) | |||||||||
Tax amounts | (2 | ) | (27 | ) | 64 | ||||||||
Net losses/(gains) after tax | $ | 12 | $ | 84 | $ | (107 | ) | ||||||
Pension and retiree medical items: | |||||||||||||
Amortization of net prior service credit | $ | (9 | ) | $ | (17 | ) | $ | (24 | ) | Other pension and retiree medical benefits (expense)/income | |||
Amortization of net losses | 169 | 216 | 167 | Other pension and retiree medical benefits (expense)/income | |||||||||
Settlement/curtailment losses | 308 | 19 | 15 | Other pension and retiree medical benefits (expense)/income | |||||||||
Net losses before tax | 468 | 218 | 158 | ||||||||||
Tax amounts | (102 | ) | (45 | ) | (44 | ) | |||||||
Net losses after tax | $ | 366 | $ | 173 | $ | 114 | |||||||
Available-for-sale securities: | |||||||||||||
Sale of Britvic securities | $ | \u2014 | $ | \u2014 | $ | (99 | ) | Selling, general and administrative expenses | |||||
Tax amount | \u2014 | \u2014 | 10 | ||||||||||
Net gain after tax | $ | \u2014 | $ | \u2014 | $ | (89 | ) | ||||||
Total net losses/(gains) reclassified for the year, net of tax | $ | 378 | $ | 301 | $ | (82 | ) |
Currency Translation Adjustment | Cash Flow Hedges | Pension and Retiree Medical | Available-For-Sale Securities | Other | Accumulated Other Comprehensive Loss Attributable to PepsiCo | ||||||||||||||||||
Balance as of December 31, 2016 (a) | $ | (11,386 | ) | $ | 83 | $ | (2,645 | ) | $ | 64 | $ | (35 | ) | $ | (13,919 | ) | |||||||
Other comprehensive (loss)/income before reclassifications (b) | 1,049 | 130 | (375 | ) | 25 | \u2014 | 829 | ||||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | \u2014 | (171 | ) | 158 | (99 | ) | \u2014 | (112 | ) | ||||||||||||||
Net other comprehensive (loss)/income | 1,049 | (41 | ) | (217 | ) | (74 | ) | \u2014 | 717 | ||||||||||||||
Tax amounts | 60 | 5 | 58 | 6 | 16 | 145 | |||||||||||||||||
Balance as of December 30, 2017 (a) | (10,277 | ) | 47 | (2,804 | ) | (4 | ) | (19 | ) | (13,057 | ) | ||||||||||||
Other comprehensive (loss)/income before reclassifications (c) | (1,664 | ) | (61 | ) | (813 | ) | 6 | \u2014 | (2,532 | ) | |||||||||||||
Amounts reclassified from accumulated other comprehensive loss | 44 | 111 | 218 | \u2014 | \u2014 | 373 | |||||||||||||||||
Net other comprehensive (loss)/income | (1,620 | ) | 50 | (595 | ) | 6 | \u2014 | (2,159 | ) | ||||||||||||||
Tax amounts | (21 | ) | (10 | ) | 128 | \u2014 | \u2014 | 97 | |||||||||||||||
Balance as of December 29, 2018\u00a0(a) | (11,918 | ) | 87 | (3,271 | ) | 2 | (19 | ) | (15,119 | ) | |||||||||||||
Other comprehensive (loss)/income before reclassifications (d) | 636 | (131 | ) | (89 | ) | (2 | ) | \u2014 | 414 | ||||||||||||||
Amounts reclassified from accumulated other comprehensive loss | \u2014 | 14 | 468 | \u2014 | \u2014 | 482 | |||||||||||||||||
Net other comprehensive (loss)/income | 636 | (117 | ) | 379 | (2 | ) | \u2014 | 896 | |||||||||||||||
Tax amounts | (8 | ) | 27 | (96 | ) | \u2014 | \u2014 | (77 | ) | ||||||||||||||
Balance as of December 28, 2019 (a) | $ | (11,290 | ) | $ | (3 | ) | $ | (2,988 | ) | $ | \u2014 | $ | (19 | ) | $ | (14,300 | ) |
(a) | Pension and retiree medical amounts are net of taxes of $1,280 million as of December\u00a031, 2016, $1,338 million as of December\u00a030, 2017, $1,466 million as of December\u00a029, 2018 and $1,370 million as of December\u00a028, 2019. |
(b) | Currency translation adjustment primarily reflects the appreciation of the euro, Russian ruble, Pound sterling and Canadian dollar. |
(c) | Currency translation adjustment primarily reflects the depreciation of the Russian ruble, Canadian dollar, Pound sterling and Brazilian real. |
Amount Reclassified from Accumulated Other Comprehensive Loss | Affected Line Item in the Income Statement | ||||||||||||
2019 | 2018 | 2017 | |||||||||||
Currency translation: | |||||||||||||
Divestitures | $ | \u2014 | $ | 44 | $ | \u2014 | Selling, general and administrative expenses | ||||||
Cash flow hedges: | |||||||||||||
Foreign exchange contracts | $ | 1 | $ | (1 | ) | $ | \u2014 | Net revenue | |||||
Foreign exchange contracts | 2 | (7 | ) | 10 | Cost of sales | ||||||||
Interest rate derivatives | 7 | 119 | (184 | ) | Interest expense | ||||||||
Commodity contracts | 3 | 3 | 4 | Cost of sales | |||||||||
Commodity contracts | 1 | (3 | ) | (1 | ) | Selling, general and administrative expenses | |||||||
Net losses/(gains) before tax | 14 | 111 | (171 | ) | |||||||||
Tax amounts | (2 | ) | (27 | ) | 64 | ||||||||
Net losses/(gains) after tax | $ | 12 | $ | 84 | $ | (107 | ) | ||||||
Pension and retiree medical items: | |||||||||||||
Amortization of net prior service credit | $ | (9 | ) | $ | (17 | ) | $ | (24 | ) | Other pension and retiree medical benefits (expense)/income | |||
Amortization of net losses | 169 | 216 | 167 | Other pension and retiree medical benefits (expense)/income | |||||||||
Settlement/curtailment losses | 308 | 19 | 15 | Other pension and retiree medical benefits (expense)/income | |||||||||
Net losses before tax | 468 | 218 | 158 | ||||||||||
Tax amounts | (102 | ) | (45 | ) | (44 | ) | |||||||
Net losses after tax | $ | 366 | $ | 173 | $ | 114 | |||||||
Available-for-sale securities: | |||||||||||||
Sale of Britvic securities | $ | \u2014 | $ | \u2014 | $ | (99 | ) | Selling, general and administrative expenses | |||||
Tax amount | \u2014 | \u2014 | 10 | ||||||||||
Net gain after tax | $ | \u2014 | $ | \u2014 | $ | (89 | ) | ||||||
Total net losses/(gains) reclassified for the year, net of tax | $ | 378 | $ | 301 | $ | (82 | ) |
2019 | |||
Operating lease cost (a) | $ | 474 | |
Variable lease cost (b) | $ | 101 | |
Short-term lease cost (c) | $ | 379 |
(a) | Includes right-of-use asset amortization of $412 million. |
(b) | Primarily related to adjustments for inflation, common-area maintenance and property tax. |
(c) | Not recorded on our balance sheet. |
2019 | |||
Operating cash flow information: | |||
Cash paid for amounts included in the measurement of lease liabilities | $ | 478 | |
Non-cash activity: | |||
Right-of-use assets obtained in exchange for lease obligations | $ | 479 |
Balance Sheet Classification | 2019 | |||||
Right-of-use assets | Other assets | $ | 1,548 | |||
Current lease liabilities | Accounts payable and other current liabilities | $ | 442 | |||
Non-current lease liabilities | Other liabilities | $ | 1,118 |
2019 | ||
Weighted-average remaining lease term | 6 years | |
Weighted-average discount rate | 4 | % |
2020 | $ | 501 | |
2021 | 374 | ||
2022 | 280 | ||
2023 | 183 | ||
2024 | 117 | ||
2025 and beyond | 308 | ||
Total lease payments | 1,763 | ||
Less: Imputed interest | (203 | ) | |
Present value of lease liabilities | $ | 1,560 |
2019 | $ | 459 | |
2020 | 406 | ||
2021 | 294 | ||
2022 | 210 | ||
2023 | 161 | ||
2024 and beyond | 310 | ||
Total | $ | 1,840 |
2018 | 2017 | ||||||
Rent expense | $ | 771 | $ | 742 |
2019 | |||
Operating lease cost (a) | $ | 474 | |
Variable lease cost (b) | $ | 101 | |
Short-term lease cost (c) | $ | 379 |
(a) | Includes right-of-use asset amortization of $412 million. |
(b) | Primarily related to adjustments for inflation, common-area maintenance and property tax. |
2019 | |||
Operating cash flow information: | |||
Cash paid for amounts included in the measurement of lease liabilities | $ | 478 | |
Non-cash activity: | |||
Right-of-use assets obtained in exchange for lease obligations | $ | 479 |
Balance Sheet Classification | 2019 | |||||
Right-of-use assets | Other assets | $ | 1,548 | |||
Current lease liabilities | Accounts payable and other current liabilities | $ | 442 | |||
Non-current lease liabilities | Other liabilities | $ | 1,118 |
2019 | ||
Weighted-average remaining lease term | 6 years | |
Weighted-average discount rate | 4 | % |
2020 | $ | 501 | |
2021 | 374 | ||
2022 | 280 | ||
2023 | 183 | ||
2024 | 117 | ||
2025 and beyond | 308 | ||
Total lease payments | 1,763 | ||
Less: Imputed interest | (203 | ) | |
Present value of lease liabilities | $ | 1,560 |
2019 | $ | 459 | |
2020 | 406 | ||
2021 | 294 | ||
2022 | 210 | ||
2023 | 161 | ||
2024 and beyond | 310 | ||
Total | $ | 1,840 |
2018 | 2017 | ||||||
Rent expense | $ | 771 | $ | 742 |
Inventories | $ | 176 | |
Property, plant and equipment | 193 | ||
Amortizable intangible assets | 284 | ||
Nonamortizable intangible asset (brand) | 1,840 | ||
Other assets and liabilities | 210 | ||
Net deferred income taxes | (303 | ) | |
Total identifiable net assets | $ | 2,400 | |
Goodwill | 943 | ||
Total purchase price | $ | 3,343 |
Inventories | $ | 176 | |
Property, plant and equipment | 193 | ||
Amortizable intangible assets | 284 | ||
Nonamortizable intangible asset (brand) | 1,840 | ||
Other assets and liabilities | 210 | ||
Net deferred income taxes | (303 | ) | |
Total identifiable net assets | $ | 2,400 | |
Goodwill | 943 | ||
Total purchase price | $ | 3,343 |
2019 | 2018 | 2017 | |||||||||
Accounts and notes receivable | |||||||||||
Trade receivables | $ | 6,447 | $ | 6,079 | |||||||
Other receivables | 1,480 | 1,164 | |||||||||
Total | 7,927 | 7,243 | |||||||||
Allowance, beginning of year | 101 | 129 | $ | 134 | |||||||
Net amounts charged to expense | 22 | 16 | 26 | ||||||||
Deductions (a) | (30 | ) | (33 | ) | (35 | ) | |||||
Other (b) | 12 | (11 | ) | 4 | |||||||
Allowance, end of year | 105 | 101 | $ | 129 | |||||||
Net receivables | $ | 7,822 | $ | 7,142 | |||||||
Inventories\u00a0(c) | |||||||||||
Raw materials and packaging | $ | 1,395 | $ | 1,312 | |||||||
Work-in-process | 200 | 178 | |||||||||
Finished goods | 1,743 | 1,638 | |||||||||
Total | $ | 3,338 | $ | 3,128 | |||||||
Other assets | |||||||||||
Noncurrent notes and accounts receivable | $ | 85 | $ | 86 | |||||||
Deferred marketplace spending | 147 | 112 | |||||||||
Pension plans (d) | 846 | 269 | |||||||||
Right-of-use assets (e) | 1,548 | \u2014 | |||||||||
Other | 385 | 293 | |||||||||
Total | $ | 3,011 | $ | 760 | |||||||
Accounts payable and other current liabilities | |||||||||||
Accounts payable | $ | 8,013 | $ | 7,213 | |||||||
Accrued marketplace spending | 2,765 | 2,541 | |||||||||
Accrued compensation and benefits | 1,835 | 1,755 | |||||||||
Dividends payable | 1,351 | 1,329 | |||||||||
SodaStream consideration payable | 58 | 1,997 | |||||||||
Current lease liabilities (e) | 442 | \u2014 | |||||||||
Other current liabilities | 3,077 | 3,277 | |||||||||
Total | $ | 17,541 | $ | 18,112 |
(a) | Includes accounts written off. |
(b) | Includes adjustments related primarily to currency translation and other adjustments. |
(c) | Approximately 7% and 5% of the inventory cost in 2019 and 2018, respectively, were computed using the LIFO method. The differences between LIFO and FIFO methods of valuing these inventories were not material. |
(d) | See Note 7 for further information. |
(e) | See Note 13 for further information. |
2019 | 2018 | 2017 | |||||||||
Interest paid (a) | $ | 1,076 | $ | 1,388 | $ | 1,123 | |||||
Income taxes paid, net of refunds (b) | $ | 2,226 | $ | 1,203 | $ | 1,962 |
(a) | In 2018, excludes the premiums paid in accordance with the debt transactions discussed in Note 8. |
(b) | In 2019 and 2018, includes tax payments of $423 million and $115 million, respectively, related to the TCJ Act. |
2019 | 2018 | ||||||
Cash and cash equivalents | $ | 5,509 | $ | 8,721 | |||
Restricted cash (a) | \u2014 | 1,997 | |||||
Restricted cash included in other assets (b) | 61 | 51 | |||||
Total cash and cash equivalents and restricted cash | $ | 5,570 | $ | 10,769 |
(a) | In 2018, primarily represents consideration held by our paying agent in connection with our acquisition of SodaStream. |
2019 | 2018 | ||||||
Cash and cash equivalents | $ | 5,509 | $ | 8,721 | |||
Restricted cash (a) | \u2014 | 1,997 | |||||
Restricted cash included in other assets (b) | 61 | 51 | |||||
Total cash and cash equivalents and restricted cash | $ | 5,570 | $ | 10,769 |
(a) | In 2018, primarily represents consideration held by our paying agent in connection with our acquisition of SodaStream. |
2019 | 2018 | ||||||||||||||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||||||||||||
Net revenue | $ | 12,884 | $ | 16,449 | $ | 17,188 | $ | 20,640 | $ | 12,562 | $ | 16,090 | $ | 16,485 | $ | 19,524 | |||||||||||||||
Gross profit | $ | 7,196 | $ | 9,045 | $ | 9,494 | $ | 11,294 | $ | 6,907 | $ | 8,827 | $ | 8,958 | $ | 10,588 | |||||||||||||||
Operating profit | $ | 2,008 | $ | 2,729 | $ | 2,855 | $ | 2,699 | $ | 1,807 | $ | 3,028 | $ | 2,844 | $ | 2,431 | |||||||||||||||
Mark-to-market net impact (a) | $ | 60 | $ | (6 | ) | $ | (4 | ) | $ | 62 | $ | (31 | ) | $ | 3 | $ | (29 | ) | $ | (106 | ) | ||||||||||
Restructuring and impairment charges\u00a0(b) | $ | (26 | ) | $ | (158 | ) | $ | (98 | ) | $ | (88 | ) | $ | (12 | ) | $ | (32 | ) | $ | (35 | ) | $ | (229 | ) | |||||||
Inventory fair value adjustments and merger and integration charges (c) | $ | (15 | ) | $ | (24 | ) | $ | (7 | ) | $ | (9 | ) | \u2014 | \u2014 | \u2014 | $ | (75 | ) | |||||||||||||
Pension-related settlement charges (d) | \u2014 | \u2014 | \u2014 | $ | (273 | ) | \u2014 | \u2014 | \u2014 | \u2014 | |||||||||||||||||||||
Net tax related to the TCJ Act (e) | $ | 29 | \u2014 | \u2014 | $ | (21 | ) | $ | (1 | ) | $ | (777 | ) | $ | (76 | ) | $ | 882 | |||||||||||||
Gains on sale of assets (f) | \u2014 | $ | 32 | \u2014 | $ | 45 | $ | 18 | $ | 9 | $ | 37 | $ | 12 | |||||||||||||||||
Other net tax benefits (g) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | $ | 314 | $ | 364 | $ | 4,386 | ||||||||||||||||||||
Charges related to cash tender and exchange offers (h) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | $ | (253 | ) | |||||||||||||||||||||
Tax reform bonus (i) | \u2014 | \u2014 | \u2014 | \u2014 | $ | (87 | ) | \u2014 | \u2014 | \u2014 | |||||||||||||||||||||
Gains on beverage refranchising (j) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | $ | 144 | \u2014 | $ | 58 | |||||||||||||||||||||
Provision for/(benefit from) income taxes\u00a0(e)(f) | $ | 446 | $ | 524 | $ | 559 | $ | 430 | $ | 304 | $ | 1,070 | $ | 188 | $ | (4,932 | ) | ||||||||||||||
Net income attributable to PepsiCo | $ | 1,413 | $ | 2,035 | $ | 2,100 | $ | 1,766 | $ | 1,343 | $ | 1,820 | $ | 2,498 | $ | 6,854 | |||||||||||||||
Net income attributable to PepsiCo per common share | |||||||||||||||||||||||||||||||
Basic | $ | 1.01 | $ | 1.45 | $ | 1.50 | $ | 1.27 | $ | 0.94 | $ | 1.28 | $ | 1.77 | $ | 4.86 | |||||||||||||||
Diluted | $ | 1.00 | $ | 1.44 | $ | 1.49 | $ | 1.26 | $ | 0.94 | $ | 1.28 | $ | 1.75 | $ | 4.83 | |||||||||||||||
Cash dividends declared per common share | $ | 0.9275 | $ | 0.955 | $ | 0.955 | $ | 0.955 | $ | 0.805 | $ | 0.9275 | $ | 0.9275 | $ | 0.9275 |
(a) | Mark-to-market net gains and losses on commodity derivatives in corporate unallocated expenses. |
(b) | Expenses related to the 2019 and 2014 Productivity Plans. See Note 3 to our consolidated financial statements for further information. |
(c) | In 2019, inventory fair value adjustments and merger and integration charges primarily related to our acquisition of SodaStream. In 2018, merger and integration charges related to our acquisition of SodaStream. See Note 14 to our consolidated financial statements for further information. |
(d) | In 2019, pension settlement charges of $220 million related to the purchase of a group annuity contract and settlement charges of $53 million related to one-time lump sum payments to certain former employees who had vested benefits, recorded in other pension and retiree medical benefits expense/income. See Note 7 to our consolidated financial statements for further information. |
(e) | Net tax related to the TCJ Act. See Note 5 to our consolidated financial statements for further information. |
(f) | In 2019, gains associated with the sale of assets in the following segments: $31 million in FLNA and $46 million in PBNA. In 2018, gains associated with the sale of assets in the following segments: $64 million in PBNA and $12 million in AMESA. |
(g) | In 2018, other net tax benefits of $4.3 billion resulting from the reorganization of our international operations, including the intercompany transfer of certain intangible assets. Also in 2018, non-cash tax benefits of $717 million associated with both the conclusion of certain international tax audits and our agreement with the IRS resolving all open matters related to the audits of taxable years 2012 and 2013. See Note 5 to our consolidated financial statements for further information. |
(h) | In 2018, interest expense in connection with our cash tender and exchange offers, primarily representing the tender price paid over the carrying value of the tendered notes. See Note 8 to our consolidated financial statements for further information. |
(i) | In 2018, bonus extended to certain U.S. employees related to the TCJ Act in the following segments: $44 million in FLNA, $2 million in QFNA and $41 million in PBNA. |
2019 | 2018 | ||||||||||||||||||||||||||||||
First Quarter | Second Quarter | Third Quarter | Fourth Quarter | First Quarter | Second Quarter | Third Quarter | Fourth Quarter | ||||||||||||||||||||||||
Net revenue | $ | 12,884 | $ | 16,449 | $ | 17,188 | $ | 20,640 | $ | 12,562 | $ | 16,090 | $ | 16,485 | $ | 19,524 | |||||||||||||||
Gross profit | $ | 7,196 | $ | 9,045 | $ | 9,494 | $ | 11,294 | $ | 6,907 | $ | 8,827 | $ | 8,958 | $ | 10,588 | |||||||||||||||
Operating profit | $ | 2,008 | $ | 2,729 | $ | 2,855 | $ | 2,699 | $ | 1,807 | $ | 3,028 | $ | 2,844 | $ | 2,431 | |||||||||||||||
Mark-to-market net impact (a) | $ | 60 | $ | (6 | ) | $ | (4 | ) | $ | 62 | $ | (31 | ) | $ | 3 | $ | (29 | ) | $ | (106 | ) | ||||||||||
Restructuring and impairment charges\u00a0(b) | $ | (26 | ) | $ | (158 | ) | $ | (98 | ) | $ | (88 | ) | $ | (12 | ) | $ | (32 | ) | $ | (35 | ) | $ | (229 | ) | |||||||
Inventory fair value adjustments and merger and integration charges (c) | $ | (15 | ) | $ | (24 | ) | $ | (7 | ) | $ | (9 | ) | \u2014 | \u2014 | \u2014 | $ | (75 | ) | |||||||||||||
Pension-related settlement charges (d) | \u2014 | \u2014 | \u2014 | $ | (273 | ) | \u2014 | \u2014 | \u2014 | \u2014 | |||||||||||||||||||||
Net tax related to the TCJ Act (e) | $ | 29 | \u2014 | \u2014 | $ | (21 | ) | $ | (1 | ) | $ | (777 | ) | $ | (76 | ) | $ | 882 | |||||||||||||
Gains on sale of assets (f) | \u2014 | $ | 32 | \u2014 | $ | 45 | $ | 18 | $ | 9 | $ | 37 | $ | 12 | |||||||||||||||||
Other net tax benefits (g) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | $ | 314 | $ | 364 | $ | 4,386 | ||||||||||||||||||||
Charges related to cash tender and exchange offers (h) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | $ | (253 | ) | |||||||||||||||||||||
Tax reform bonus (i) | \u2014 | \u2014 | \u2014 | \u2014 | $ | (87 | ) | \u2014 | \u2014 | \u2014 | |||||||||||||||||||||
Gains on beverage refranchising (j) | \u2014 | \u2014 | \u2014 | \u2014 | \u2014 | $ | 144 | \u2014 | $ | 58 | |||||||||||||||||||||
Provision for/(benefit from) income taxes\u00a0(e)(f) | $ | 446 | $ | 524 | $ | 559 | $ | 430 | $ | 304 | $ | 1,070 | $ | 188 | $ | (4,932 | ) | ||||||||||||||
Net income attributable to PepsiCo | $ | 1,413 | $ | 2,035 | $ | 2,100 | $ | 1,766 | $ | 1,343 | $ | 1,820 | $ | 2,498 | $ | 6,854 | |||||||||||||||
Net income attributable to PepsiCo per common share | |||||||||||||||||||||||||||||||
Basic | $ | 1.01 | $ | 1.45 | $ | 1.50 | $ | 1.27 | $ | 0.94 | $ | 1.28 | $ | 1.77 | $ | 4.86 | |||||||||||||||
Diluted | $ | 1.00 | $ | 1.44 | $ | 1.49 | $ | 1.26 | $ | 0.94 | $ | 1.28 | $ | 1.75 | $ | 4.83 | |||||||||||||||
Cash dividends declared per common share | $ | 0.9275 | $ | 0.955 | $ | 0.955 | $ | 0.955 | $ | 0.805 | $ | 0.9275 | $ | 0.9275 | $ | 0.9275 |
(a) | Mark-to-market net gains and losses on commodity derivatives in corporate unallocated expenses. |
(b) | Expenses related to the 2019 and 2014 Productivity Plans. See Note 3 to our consolidated financial statements for further information. |
(c) | In 2019, inventory fair value adjustments and merger and integration charges primarily related to our acquisition of SodaStream. In 2018, merger and integration charges related to our acquisition of SodaStream. See Note 14 to our consolidated financial statements for further information. |
(d) | In 2019, pension settlement charges of $220 million related to the purchase of a group annuity contract and settlement charges of $53 million related to one-time lump sum payments to certain former employees who had vested benefits, recorded in other pension and retiree medical benefits expense/income. See Note 7 to our consolidated financial statements for further information. |
(e) | Net tax related to the TCJ Act. See Note 5 to our consolidated financial statements for further information. |
(f) | In 2019, gains associated with the sale of assets in the following segments: $31 million in FLNA and $46 million in PBNA. In 2018, gains associated with the sale of assets in the following segments: $64 million in PBNA and $12 million in AMESA. |
(g) | In 2018, other net tax benefits of $4.3 billion resulting from the reorganization of our international operations, including the intercompany transfer of certain intangible assets. Also in 2018, non-cash tax benefits of $717 million associated with both the conclusion of certain international tax audits and our agreement with the IRS resolving all open matters related to the audits of taxable years 2012 and 2013. See Note 5 to our consolidated financial statements for further information. |
(h) | In 2018, interest expense in connection with our cash tender and exchange offers, primarily representing the tender price paid over the carrying value of the tendered notes. See Note 8 to our consolidated financial statements for further information. |
(i) | In 2018, bonus extended to certain U.S. employees related to the TCJ Act in the following segments: $44 million in FLNA, $2 million in QFNA and $41 million in PBNA. |