UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 21, 2020 (12 weeks)

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to             

Commission file number 1-1183

 

PepsiCo, Inc.

(Exact Name of Registrant as Specified in its Charter)

North Carolina	13-1584302
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

700 Anderson Hill Road, Purchase, New York 10577

(Address of principal executive offices and Zip Code)

(914) 253-2000

Registrant's telephone number, including area code

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock, par value 1-2/3 cents per share	PEP	The Nasdaq Stock Market LLC
2.500% Senior Notes Due 2022	PEP22a	The Nasdaq Stock Market LLC
1.750% Senior Notes Due 2021	PEP21a	The Nasdaq Stock Market LLC
2.625% Senior Notes Due 2026	PEP26	The Nasdaq Stock Market LLC
0.875% Senior Notes Due 2028	PEP28	The Nasdaq Stock Market LLC
0.750% Senior Notes Due 2027	PEP27	The Nasdaq Stock Market LLC
1.125% Senior Notes Due 2031	PEP31	The Nasdaq Stock Market LLC
0.875% Senior Notes Due 2039	PEP39	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes   x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨    

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes   ☐    No  x

Number of shares of Common Stock outstanding as of April 21, 2020 was 1,387,500,433.

PepsiCo, Inc. and Subsidiaries

Table of Contents

		Page No.
Part I Financial Information
Item 1.	Condensed Consolidated Financial Statements	3
	Condensed Consolidated Statement of Income – 12 Weeks Ended March 21, 2020 and March 23, 2019	3
	Condensed Consolidated Statement of Comprehensive Income – 12 Weeks Ended March 21, 2020 and March 23, 2019	4
	Condensed Consolidated Statement of Cash Flows – 12 Weeks Ended March 21, 2020 and March 23, 2019	5
	Condensed Consolidated Balance Sheet – March 21, 2020 and December 28, 2019	6
	Condensed Consolidated Statement of Equity – 12 Weeks Ended March 21, 2020 and March 23, 2019	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Report of Independent Registered Public Accounting Firm		38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39
Part II Other Information
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 6.	Exhibits	42

2

PART I FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements.

Condensed Consolidated Statement of Income

PepsiCo, Inc. and Subsidiaries

(in millions except per share amounts, unaudited) 

	12 Weeks Ended
	3/21/2020			3/23/2019
Net Revenue	$	13,881		$	12,884
Cost of sales	6,127			5,688
Gross profit	7,754			7,196
Selling, general and administrative expenses	5,830			5,188
Operating Profit	1,924			2,008
Other pension and retiree medical benefits income	77			64
Net interest expense and other	(290		)	(204		)
Income before income taxes	1,711			1,868
Provision for income taxes	360			446
Net income	1,351			1,422
Less: Net income attributable to noncontrolling interests	13			9
Net Income Attributable to PepsiCo	$	1,338		$	1,413
Net Income Attributable to PepsiCo per Common Share
Basic	$	0.96		$	1.01
Diluted	$	0.96		$	1.00
Weighted-average common shares outstanding
Basic	1,390			1,406
Diluted	1,396			1,413

See accompanying notes to the condensed consolidated financial statements.

3

Condensed Consolidated Statement of Comprehensive Income

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited) 

	12 Weeks Ended
	3/21/2020			3/23/2019
Net income	$	1,351		$	1,422
Other comprehensive (loss)/income, net of taxes:
Net currency translation adjustment	(754		)	473
Net change on cash flow hedges	(61		)	(27		)
Net pension and retiree medical adjustments	57			17
Other	1			—
	(757		)	463
Comprehensive income	594			1,885
Comprehensive income attributable to noncontrolling interests	(13		)	(9		)
Comprehensive Income Attributable to PepsiCo	$	581		$	1,876

See accompanying notes to the condensed consolidated financial statements.

4

Condensed Consolidated Statement of Cash Flows

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)

	12 Weeks Ended
	3/21/2020			3/23/2019
Operating Activities
Net income	$	1,351		$	1,422
Depreciation and amortization	533			498
Share-based compensation expense	61			57
Restructuring and impairment charges	38			26
Cash payments for restructuring charges	(60		)	(52		)
Pension and retiree medical plan expenses	40			47
Pension and retiree medical plan contributions	(234		)	(260		)
Deferred income taxes and other tax charges and credits	25			216
Net tax related to the Tax Cuts and Jobs Act (TCJ Act)	—			(29		)
Change in assets and liabilities:
Accounts and notes receivable	(784		)	(406		)
Inventories	(312		)	(435		)
Prepaid expenses and other current assets	(263		)	(382		)
Accounts payable and other current liabilities	(1,419		)	(1,207		)
Income taxes payable	204			120
Other, net	71			40
Net Cash Used for Operating Activities	(749		)	(345		)
Investing Activities
Capital spending	(484		)	(442		)
Sales of property, plant and equipment	5			2
Acquisition of SodaStream International Ltd. (SodaStream)	(9		)	(1,807		)
Other acquisitions and investments in noncontrolled affiliates	(445		)	(56		)
Short-term investments, by original maturity - three months or less, net	7			9
Other investing, net	1			(6		)
Net Cash Used for Investing Activities	(925		)	(2,300		)
Financing Activities
Proceeds from issuances of long-term debt	6,429			1,122
Payments of long-term debt	(1		)	(1,851		)
Short-term borrowings, by original maturity:
More than three months - proceeds	164			2
More than three months - payments	(2		)	—
Three months or less, net	2,794			115
Cash dividends paid	(1,349		)	(1,332		)
Share repurchases - common	(573		)	(940		)
Proceeds from exercises of stock options	78			103
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted	(76		)	(93		)
Other financing	(2		)	(2		)
Net Cash Provided by/(Used for) Financing Activities	7,462			(2,876		)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(66		)	57
Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash	5,722			(5,464		)
Cash and Cash Equivalents and Restricted Cash, Beginning of Year	5,570			10,769
Cash and Cash Equivalents and Restricted Cash, End of Period	$	11,292		$	5,305
Supplemental Non-Cash Activity
Right-of-use assets obtained in exchange for lease obligations	$	148		$	59

See accompanying notes to the condensed consolidated financial statements.

5

Condensed Consolidated Balance Sheet

PepsiCo, Inc. and Subsidiaries

(in millions except per share amounts)

	(Unaudited)
	3/21/2020			12/28/2019
ASSETS
Current Assets
Cash and cash equivalents	$	11,089		$	5,509
Short-term investments	158			229
Accounts and notes receivable, less allowance: 3/20 - $228 and 12/19 - $105	8,477			7,822
Inventories:
Raw materials and packaging	1,502			1,395
Work-in-process	277			200
Finished goods	1,821			1,743
	3,600			3,338
Prepaid expenses and other current assets	944			747
Total Current Assets	24,268			17,645
Property, plant and equipment	42,696			43,003
Accumulated depreciation	(23,716		)	(23,698		)
Property, Plant and Equipment, net	18,980			19,305
Amortizable Intangible Assets, net	1,443			1,433
Goodwill	15,465			15,501
Other indefinite-lived intangible assets	14,536			14,610
Indefinite-Lived Intangible Assets	30,001			30,111
Investments in Noncontrolled Affiliates	2,719			2,683
Deferred Income Taxes	4,357			4,359
Other Assets	3,294			3,011
Total Assets	$	85,062		$	78,547
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations	$	5,882		$	2,920
Accounts payable and other current liabilities	16,196			17,541
Total Current Liabilities	22,078			20,461
Long-Term Debt Obligations	35,361			29,148
Deferred Income Taxes	4,060			4,091
Other Liabilities	10,004			9,979
Total Liabilities	71,503			63,679
Commitments and contingencies
PepsiCo Common Shareholders’ Equity
Common stock, par value 12/3¢ per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1,389 and 1,391 shares, respectively)	23			23
Capital in excess of par value	3,741			3,886
Retained earnings	61,920			61,946
Accumulated other comprehensive loss	(15,057		)	(14,300		)
Repurchased common stock, in excess of par value (478 and 476 shares, respectively)	(37,162		)	(36,769		)
Total PepsiCo Common Shareholders’ Equity	13,465			14,786
Noncontrolling interests	94			82
Total Equity	13,559			14,868
Total Liabilities and Equity	$	85,062		$	78,547

See accompanying notes to the condensed consolidated financial statements.

6

Condensed Consolidated Statement of Equity

PepsiCo, Inc. and Subsidiaries

(in millions, except per share amounts, unaudited)

	12 Weeks Ended
	3/21/2020					3/23/2019
	Shares		Amount			Shares		Amount
Common Stock
Balance, beginning of period	1,391		$	23		1,409		$	23
Change in repurchased common stock	(2	)	—			(5	)	—
Balance, end of period	1,389		23			1,404		23
Capital in Excess of Par Value
Balance, beginning of period			3,886					3,953
Share-based compensation expense			62					57
Stock option exercises, RSUs and PSUs converted			(131		)			(164		)
Withholding tax on RSUs and PSUs converted			(76		)			(93		)
Balance, end of period			3,741					3,753
Retained Earnings
Balance, beginning of period			61,946					59,947
Cumulative effect of accounting changes			(34		)			8
Net income attributable to PepsiCo			1,338					1,413
Cash dividends declared – common (a)			(1,330		)			(1,308		)
Balance, end of period			61,920					60,060
Accumulated Other Comprehensive Loss
Balance, beginning of period			(14,300		)			(15,119		)
Other comprehensive (loss)/income attributable to PepsiCo			(757		)			463
Balance, end of period			(15,057		)			(14,656		)
Repurchased Common Stock
Balance, beginning of period	(476	)	(36,769		)	(458	)	(34,286		)
Share repurchases	(4	)	(602		)	(9	)	(971		)
Stock option exercises, RSUs and PSUs converted	2		209			4		279
Balance, end of period	(478	)	(37,162		)	(463	)	(34,978		)
Total PepsiCo Common Shareholders’ Equity			13,465					14,202
Noncontrolling Interests
Balance, beginning of period			82					84
Net income attributable to noncontrolling interests			13					9
Other, net			(1		)			1
Balance, end of period			94					94
Total Equity			$	13,559				$	14,296

(a) Cash dividends declared per common share were $0.955 and $0.9275 for the 12 weeks ended March 21, 2020 and March 23, 2019, respectively.

See accompanying notes to the condensed consolidated financial statements.

7

Notes to the Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation and Our Divisions

Basis of Presentation

When used in this report, the terms “we,” “us,” “our,” “PepsiCo” and the “Company” mean PepsiCo, Inc. and its consolidated subsidiaries, collectively.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the rules and regulations for reporting the Quarterly Report on Form 10-Q (Form 10-Q). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated balance sheet at December 28, 2019 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended December 28, 2019 (2019 Form 10-K), as modified to reflect the adoption of the recently issued accounting pronouncement disclosed in Note 2 in this Form 10-Q. This report should be read in conjunction with our 2019 Form 10-K. In our opinion, these financial statements include all normal and recurring adjustments necessary for a fair presentation. The results for the 12 weeks ended March 21, 2020 are not necessarily indicative of the results expected for any future period or the full year.

While our financial results in the United States and Canada (North America) are reported on a 12-week basis, substantially all of our international operations report on a monthly calendar basis for which the months of January and February are reflected in our results for the 12 weeks ended March 21, 2020.

Our significant interim accounting policies include the recognition of a pro rata share of certain estimated annual sales incentives and certain advertising and marketing costs in proportion to revenue or volume, as applicable, and the recognition of income taxes using an estimated annual effective tax rate. Raw materials, direct labor and plant overhead, as well as purchasing and receiving costs, costs directly related to production planning, inspection costs and raw materials handling facilities, are included in cost of sales. The costs of moving, storing and delivering finished product, including merchandising activities, are included in selling, general and administrative expenses.

Unless otherwise noted, tabular dollars are in millions, except per share amounts. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts.

Our Divisions

As previously disclosed in our 2019 Form 10-K, during the fourth quarter of 2019, we realigned certain of our reportable segments to be consistent with a recent strategic realignment of our organizational structure and how our Chief Executive Officer assesses the performance of, and allocates resources to, our reportable segments. Our historical segment reporting presented in this report has been retrospectively revised to reflect the new organizational structure. These changes did not impact our consolidated financial results. See Note 1 to our consolidated financial statements in our 2019 Form 10-K for further information.

We are organized into seven reportable segments (also referred to as divisions), as follows:

1) Frito-Lay North America (FLNA), which includes our branded food and snack businesses in the United States and Canada;

2) Quaker Foods North America (QFNA), which includes our cereal, rice, pasta and other branded food businesses in the United States and Canada;

8

3) PepsiCo Beverages North America (PBNA), which includes our beverage businesses in the United States and Canada;

4) Latin America (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) Africa, Middle East and South Asia (AMESA), which includes all of our beverage, food and snack businesses in Africa, the Middle East and South Asia; and

7) Asia Pacific, Australia and New Zealand and China region (APAC), which includes all of our beverage, food and snack businesses in Asia Pacific, Australia and New Zealand, and China region.

Net revenue and operating profit of each division are as follows:

	12 Weeks Ended
Net Revenue (a)	3/21/2020		3/23/2019
FLNA	$	4,074	$	3,815
QFNA	634		594
PBNA	4,838		4,510
LatAm	1,310		1,241
Europe	1,839		1,620
AMESA	631		579
APAC	555		525
Total	$	13,881	$	12,884

(a) Our primary performance obligation is the distribution and sales of beverage, food and snack products to our customers. For the 12 weeks ended March 21, 2020 and March 23, 2019, our food and snack business represented approximately 55% of our consolidated net revenue. Internationally, LatAm’s food and snack business represented approximately 90% of the segment’s revenue, Europe’s beverage business and food and snack business represented approximately 55% and 45%, respectively, of the segment’s net revenue, AMESA’s beverage business and food and snack business represented approximately 35% and 65%, respectively, of the segment’s net revenue and APAC’s beverage business and food and snack business represented approximately 20% and 80%, respectively, of the segment’s net revenue. Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe segments, was approximately 40% of our consolidated net revenue. Generally, our finished goods beverage operations produce higher net revenue, but lower operating margins as compared to concentrate sold to authorized bottling partners for the manufacture of finished goods beverages.

	12 Weeks Ended
Operating Profit	3/21/2020			3/23/2019
FLNA (a)	$	1,202		$	1,159
QFNA (a)	150			138
PBNA (a)	297			389
LatAm	231			230
Europe (a)	146			115
AMESA	134			105
APAC (a)	142			106
Total division	$	2,302		$	2,242
Corporate unallocated expenses	(378		)	(234		)
Total	$	1,924		$	2,008

(a) In the 12 weeks ended March 21, 2020, operating profit includes $143 million of certain charges taken as a result of the novel coronavirus (COVID-19) pandemic, including $68 million of incremental allowances for expected credit losses ($21 million in FLNA, $2 million in QFNA, $41 million in PBNA and $4 million in Europe), $44 million of write-downs against upfront payments to customers in PBNA, $26 million of inventory write-downs and product returns ($3 million in FLNA, $22 million in PBNA and $1 million in APAC) and $5 million of certain other charges ($3 million in FLNA, $1 million in PBNA and $1 million in APAC).

9

Note 2 - Recently Issued Accounting Pronouncements

Adopted

In 2016, the Financial Accounting Standards Board (FASB) issued guidance that changes the impairment model used to measure credit losses for most financial assets. For our trade receivables, certain other receivables and certain other financial instruments, we are required to use a new forward-looking expected credit loss model that replaced the existing incurred credit loss model. The new model generally results in earlier recognition of allowances for credit losses. We adopted this guidance prospectively in the first quarter of 2020 and the adoption did not have a material impact on our condensed consolidated financial statements or disclosures. We recorded an after-tax cumulative effect decrease to retained earnings of $34 million ($44 million pre-tax) as of the beginning of 2020 and, during the first quarter of 2020, we increased our allowance for expected credit losses and recorded a pre-tax charge of $68 million. This increase in allowance reflects the forward-looking expected impact of the global economic uncertainty caused by COVID-19, leveraging estimates of credit worthiness, default and recovery rates for certain of our customers, including foodservice and vending businesses.

Not Yet Adopted

In 2019, the FASB issued guidance to simplify the accounting for income taxes. The guidance primarily addresses how to (1) recognize a deferred tax liability after we transition to or from the equity method of accounting, (2) evaluate if a step-up in the tax basis of goodwill is related to a business combination or is a separate transaction, (3) recognize all of the effects of a change in tax law in the period of enactment, including adjusting the estimated annual tax rate, and (4) include the amount of tax based on income in the income tax provision and any incremental amount as a tax not based on income for hybrid tax regimes. The guidance is effective in the first quarter of 2021 with early adoption permitted. We are currently evaluating the impact of this guidance on our financial statements and the timing of adoption.

Note 3 - Restructuring and Impairment Charges

2019 Multi-Year Productivity Plan

We publicly announced a multi-year productivity plan on February 15, 2019 (2019 Productivity Plan) that will leverage new technology and business models to further simplify, harmonize and automate processes; re-engineer our go-to-market and information systems, including deploying the right automation for each market; and simplify our organization and optimize our manufacturing and supply chain footprint. In connection with this plan, we expect to incur pre-tax charges of approximately $2.5 billion and cash expenditures of approximately $1.6 billion. These pre-tax charges are expected to consist of approximately 70% of severance and other employee-related costs, 15% for asset impairments (all non-cash) resulting from plant closures and related actions, and 15% for other costs associated with the implementation of our initiatives. We expect to complete this plan by 2023.

The total expected plan pre-tax charges are expected to be incurred by division approximately as follows:

	FLNA		QFNA		PBNA		LatAm		Europe		AMESA		APAC		Corporate
Expected pre-tax charges	11	%	2	%	30	%	10	%	25	%	8	%	5	%	9	%

10

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

	12 Weeks Ended
	3/21/2020		3/23/2019
Cost of sales	$	2	$	8
Selling, general and administrative expenses	30		23
Other pension and retiree medical benefits expense/(income)	6		(5		)
Total restructuring and impairment charges	$	38	$	26
After-tax amount	$	32	$	23
Net income attributable to PepsiCo per common share	$	0.02	$	0.02

	12 Weeks Ended					Plan to Date
	3/21/2020		3/23/2019			through 3/21/2020
FLNA	$	5	$	—		$	58
QFNA	1		—			8
PBNA	3		6			94
LatAm	5		—			76
Europe	8		6			113
AMESA	2		8			43
APAC	—		3			49
Corporate	8		8			62
	32		31			503
Other pension and retiree medical benefits expense/ (income) (a)	6		(5		)	43
Total	$	38	$	26		$	546

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

	12 Weeks Ended					Plan to Date
	3/21/2020		3/23/2019			through 3/21/2020
Severance and other employee costs (a)	$	22	$	(3	)	$	308
Asset impairments	1		8			93
Other costs (b)	15		21			145
Total	$	38	$	26		$	546

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

(b) Includes other costs associated with the implementation of our initiatives, including contract termination costs, consulting and other professional fees.

A summary of our 2019 Productivity Plan activity for the 12 weeks ended March 21, 2020 is as follows:

	Severance and Other Employee Costs			Asset Impairments			Other Costs			Total
Liability as of December 28, 2019	$	128		$	—		$	21		$	149
2020 restructuring charges	22			1			15			38
Cash payments	(31		)	—			(29		)	(60		)
Non-cash charges and translation	(9		)	(1		)	4			(6		)
Liability as of March 21, 2020	$	110		$	—		$	11		$	121

Substantially all of the restructuring accrual at March 21, 2020 is expected to be paid by the end of 2020.

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Other Productivity Initiatives

There were no material charges related to other productivity and efficiency initiatives outside the scope of the 2019 Productivity Plan.

We regularly evaluate different productivity initiatives beyond the productivity plan and other initiatives described above.

Note 4 - Intangible Assets

A summary of our amortizable intangible assets is as follows:

	3/21/2020							12/28/2019
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Acquired franchise rights	$	829	$	(157	)	$	672	$	846	$	(158	)	$	688
Reacquired franchise rights	105		(105		)	—		106		(105		)	1
Brands	1,307		(1,058		)	249		1,326		(1,066		)	260
Other identifiable intangibles	850		(328		)	522		810		(326		)	484
Total	$	3,091	$	(1,648	)	$	1,443	$	3,088	$	(1,655	)	$	1,433

12

The change in the book value of indefinite-lived intangible assets is as follows:

	Balance 12/28/2019		Acquisitions/ (Divestitures)			Translation and Other			Balance 3/21/2020
FLNA (a)
Goodwill	$	299	$	162		$	(11	)	$	450
Brands	162		176			(2		)	336
Total	461		338			(13		)	786
QFNA
Goodwill	189		—			—			189
Brands	11		—			—			11
Total	200		—			—			200
PBNA (b)
Goodwill	9,898		21			(39		)	9,880
Reacquired franchise rights	7,089		—			(66		)	7,023
Acquired franchise rights	1,517		—			(13		)	1,504
Brands	763		—			—			763
Total	19,267		21			(118		)	19,170
LatAm
Goodwill	501		—			(26		)	475
Brands	125		—			(8		)	117
Total	626		—			(34		)	592
Europe (c)
Goodwill	3,961		(3		)	(131		)	3,827
Reacquired franchise rights	505		—			(20		)	485
Acquired franchise rights	157		—			(3		)	154
Brands	4,181		—			(131		)	4,050
Total	8,804		(3		)	(285		)	8,516
AMESA
Goodwill	446		—			1			447
Total	446		—			1			447
APAC
Goodwill	207		—			(10		)	197
Brands	100		—			(7		)	93
Total	307		—			(17		)	290
Total goodwill	15,501		180			(216		)	15,465
Total reacquired franchise rights	7,594		—			(86		)	7,508
Total acquired franchise rights	1,674		—			(16		)	1,658
Total brands	5,342		176			(148		)	5,370
Total	$	30,111	$	356		$	(466	)	$	30,001

(a) The change from December 28, 2019 to March 21, 2020 primarily reflects our acquisition of BFY Brands, Inc. (BFY Brands).

(b) The change in translation and other primarily reflects the depreciation of the Canadian dollar.

(c) The change in translation and other primarily reflects the depreciation of the Russian ruble.

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Note 5 - Income Taxes

Tax Cuts and Jobs Act

During the fourth quarter of 2017, the TCJ Act was enacted in the United States. The related provisional measurement period allowed by the U.S. Securities and Exchange Commission (SEC) ended in the fourth quarter of 2018. While our accounting for the recorded impact of the TCJ Act was deemed to be complete, additional guidance issued by the Internal Revenue Service (IRS) impacted our recorded amounts after December 29, 2018. 

There were no tax amounts recognized in the 12 weeks ended March 21, 2020 related to the TCJ Act. In the 12 weeks ended March 23, 2019, we recognized tax benefits of $29 million ($0.02 per share) related to the TCJ Act. 

Other Tax Matters

On May 19, 2019, a public referendum held in Switzerland passed the Federal Act on Tax Reform and AHV Financing (TRAF), effective January 1, 2020. There were no income tax adjustments recorded in the 12 weeks ended March 21, 2020 related to the TRAF. Enactment of additional TRAF provisions subsequent to March 21, 2020 is expected to result in adjustments to our financial statements and related disclosures in future periods. The future impact of the TRAF cannot currently be reasonably estimated; we will continue to monitor and assess the impact the TRAF may have on our business and financial results.

For further information and discussion of the impacts of the TCJ Act and the TRAF, refer to Note 5 to our consolidated financial statements in our 2019 Form 10-K.

Subsequent to the end of our first quarter, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted on March 27, 2020 in the United States. The CARES Act and related notices include several significant provisions, including delaying certain payroll tax payments, mandatory transition tax payments under the TCJ Act, and estimated income tax payments that we expect to defer to future periods. We do not currently expect the CARES Act to have a material impact on our financial results, including on our annual estimated effective tax rate, or on our liquidity. We will continue to monitor and assess the impact the CARES Act and similar legislation in other countries may have on our business and financial results.

Note 6 - Share-Based Compensation

The following table summarizes our total share-based compensation expense:

	12 Weeks Ended
	3/21/2020		3/23/2019
Share-based compensation expense - equity awards	$	61	$	57
Share-based compensation expense - liability awards	3		1
Restructuring charges	1		—
Total (a)	$	65	$	58

(a) Primarily recorded in selling, general and administrative expenses.

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The following table summarizes share-based awards granted under the terms of the PepsiCo, Inc. Long-Term Incentive Plan:

	12 Weeks Ended
	3/21/2020			3/23/2019
	Granted(a)	Weighted-Average Grant Price		Granted(a)	Weighted-Average Grant Price
Stock options	1.6	$	131.25	1.1	$	116.00
RSUs and PSUs	2.4	$	131.28	2.7	$	115.98

(a) In millions. All grant activity is disclosed at target.

We granted long-term cash awards to certain executive officers and other senior executives with an aggregate target value of $18 million and $15 million during the 12 weeks ended March 21, 2020 and March 23, 2019, respectively.

Our weighted-average Black-Scholes fair value assumptions are as follows: 

	12 Weeks Ended
	3/21/2020		3/23/2019
Expected life	6 years		5 years
Risk-free interest rate	1.0	%	2.6	%
Expected volatility	14