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 19, 2022 (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
0.250% Senior Notes Due 2024	PEP24	The Nasdaq Stock Market LLC
2.625% Senior Notes Due 2026	PEP26	The Nasdaq Stock Market LLC
0.750% Senior Notes Due 2027	PEP27	The Nasdaq Stock Market LLC
0.875% Senior Notes Due 2028	PEP28	The Nasdaq Stock Market LLC
0.500% Senior Notes Due 2028	PEP28a	The Nasdaq Stock Market LLC
1.125% Senior Notes Due 2031	PEP31	The Nasdaq Stock Market LLC
0.400% Senior Notes Due 2032	PEP32	The Nasdaq Stock Market LLC
0.750% Senior Notes Due 2033	PEP33	The Nasdaq Stock Market LLC
0.875% Senior Notes Due 2039	PEP39	The Nasdaq Stock Market LLC
1.050% Senior Notes Due 2050	PEP50	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   ☒    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   ☒    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	☒	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  ☒

Number of shares of Common Stock outstanding as of April 19, 2022 was 1,382,683,559.

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 19, 2022 and March 20, 2021	3
	Condensed Consolidated Statement of Comprehensive Income – 12 Weeks Ended March 19, 2022 and March 20, 2021	4
	Condensed Consolidated Statement of Cash Flows – 12 Weeks Ended March 19, 2022 and March 20, 2021	5
	Condensed Consolidated Balance Sheet – March 19, 2022 and December 25, 2021	7
	Condensed Consolidated Statement of Equity – 12 Weeks Ended March 19, 2022 and March 20, 2021	8
	Notes to the Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Report of Independent Registered Public Accounting Firm		43
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44
Part II Other Information
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 6.	Exhibits	46

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
	3/19/2022		3/20/2021
Net Revenue	$	16,200	$	14,820
Cost of sales	7,433		6,671
Gross profit	8,767		8,149
Selling, general and administrative expenses	6,822		5,837
Gain associated with the Juice Transaction (a)	(3,322)		—
Operating Profit	5,267		2,312
Other pension and retiree medical benefits income	134		120
Net interest expense and other	(240)		(258)
Income before income taxes	5,161		2,174
Provision for income taxes	888		451
Net income	4,273		1,723
Less: Net income attributable to noncontrolling interests	12		9
Net Income Attributable to PepsiCo	$	4,261	$	1,714
Net Income Attributable to PepsiCo per Common Share
Basic	$	3.08	$	1.24
Diluted	$	3.06	$	1.24
Weighted-average common shares outstanding
Basic	1,383		1,380
Diluted	1,391		1,387

(a)In the 12 weeks ended March 19, 2022, we sold our Tropicana, Naked and other select juice brands to PAI Partners for approximately $3.5 billion in cash and a 39% noncontrolling interest in a newly formed joint venture (Tropicana JV) operating across North America and Europe (Juice Transaction). See Note 11 for further information.

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
	3/19/2022		3/20/2021
Net income	$	4,273	$	1,723
Other comprehensive (loss)/income, net of taxes:
Net currency translation adjustment	(560)		131
Net change on cash flow hedges	106		72
Net pension and retiree medical adjustments	13		27
Other	(4)		—
	(445)		230
Comprehensive income	3,828		1,953
Less: Comprehensive income attributable to noncontrolling interests	12		9
Comprehensive Income Attributable to PepsiCo	$	3,816	$	1,944

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
	3/19/2022		3/20/2021
Operating Activities
Net income	$	4,273	$	1,723
Depreciation and amortization	555		560
Gain associated with the Juice Transaction	(3,322)		—
Brand portfolio impairment charges	241		—
Russia-Ukraine conflict charges	241		—
Operating lease right-of-use asset amortization	103		99
Share-based compensation expense	81		79
Restructuring and impairment charges	27		43
Cash payments for restructuring charges	(32)		(49)
Acquisition and divestiture-related charges	56		(10)
Cash payments for acquisition and divestiture-related charges	(17)		(7)
Pension and retiree medical plan (income)/expense	(1)		21
Pension and retiree medical plan contributions	(178)		(413)
Deferred income taxes and other tax charges and credits	257		108
Change in assets and liabilities:
Accounts and notes receivable	(837)		(455)
Inventories	(549)		(397)
Prepaid expenses and other current assets	(190)		(210)
Accounts payable and other current liabilities	(1,238)		(1,906)
Income taxes payable	489		227
Other, net	(133)		(132)
Net Cash Used for Operating Activities	(174)		(719)
Investing Activities
Capital spending	(522)		(471)
Sales of property, plant and equipment	3		5
Acquisitions, net of cash acquired, and investments in noncontrolled affiliates	(13)		(13)
Proceeds associated with the Juice Transaction	3,456		—
Other divestitures and sales of investments in noncontrolled affiliates	5		35
Short-term investments, by original maturity:
More than three months - maturities	—		535
Three months or less, net	22		3
Other investing, net	4		—
Net Cash Provided by Investing Activities	2,955		94

    

(Continued on following page)

5

Condensed Consolidated Statement of Cash Flows (continued)

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)

	12 Weeks Ended
	3/19/2022		3/20/2021
Financing Activities
Payments of long-term debt	(1,251)		(1)
Short-term borrowings, by original maturity:
More than three months - proceeds	559		—
More than three months - payments	—		(396)
Three months or less, net	647		53
Cash dividends paid	(1,505)		(1,429)
Share repurchases - common	(193)		(106)
Proceeds from exercises of stock options	49		62
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted	(85)		(71)
Other financing	(1)		—
Net Cash Used for Financing Activities	(1,780)		(1,888)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(17)		(10)
Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash	984		(2,523)
Cash and Cash Equivalents and Restricted Cash, Beginning of Year	5,707		8,254
Cash and Cash Equivalents and Restricted Cash, End of Period	$	6,691	$	5,731
Supplemental Non-Cash Activity
Right-of-use assets obtained in exchange for lease obligations	$	100	$	167

See accompanying notes to the condensed consolidated financial statements.

6

Condensed Consolidated Balance Sheet

PepsiCo, Inc. and Subsidiaries

(in millions except per share amounts)

	(Unaudited)
	3/19/2022		12/25/2021
ASSETS
Current Assets
Cash and cash equivalents	$	6,561	$	5,596
Short-term investments	343		392
Accounts and notes receivable, less allowance: 3/22 - $192 and 12/21 - $147	9,424		8,680
Inventories:
Raw materials and packaging	2,017		1,898
Work-in-process	154		151
Finished goods	2,591		2,298
	4,762		4,347
Prepaid expenses and other current assets	1,252		980
Assets held for sale	—		1,788
Total Current Assets	22,342		21,783
Property, plant and equipment	46,533		46,828
Accumulated depreciation	(24,516)		(24,421)
Property, Plant and Equipment, net	22,017		22,407
Amortizable Intangible Assets, net	1,497		1,538
Goodwill	18,112		18,381
Other Indefinite-Lived Intangible Assets	16,603		17,127
Investments in Noncontrolled Affiliates	3,595		2,627
Deferred Income Taxes	4,301		4,310
Other Assets	4,495		4,204
Total Assets	$	92,962	$	92,377
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations	$	5,459	$	4,308
Accounts payable and other current liabilities	20,365		21,159
Liabilities held for sale	—		753
Total Current Liabilities	25,824		26,220
Long-Term Debt Obligations	34,590		36,026
Deferred Income Taxes	5,072		4,826
Other Liabilities	9,156		9,154
Total Liabilities	74,642		76,226
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: 1,384 and 1,383 shares, respectively)	23		23
Capital in excess of par value	3,893		4,001
Retained earnings	67,934		65,165
Accumulated other comprehensive loss	(15,343)		(14,898)
Repurchased common stock, in excess of par value (483 and 484 shares, respectively)	(38,305)		(38,248)
Total PepsiCo Common Shareholders’ Equity	18,202		16,043
Noncontrolling interests	118		108
Total Equity	18,320		16,151
Total Liabilities and Equity	$	92,962	$	92,377

See accompanying notes to the condensed consolidated financial statements.

7

Condensed Consolidated Statement of Equity

PepsiCo, Inc. and Subsidiaries

(in millions, except per share amounts, unaudited)

	12 Weeks Ended
	3/19/2022			3/20/2021
	Shares	Amount		Shares	Amount
Common Stock
Balance, beginning of period	1,383	$	23	1,380	$	23
Change in repurchased common stock	1	—		2	—
Balance, end of period	1,384	23		1,382	23
Capital in Excess of Par Value
Balance, beginning of period		4,001			3,910
Share-based compensation expense		83			80
Stock option exercises, RSUs and PSUs converted		(106)			(119)
Withholding tax on RSUs and PSUs converted		(85)			(71)
Balance, end of period		3,893			3,800
Retained Earnings
Balance, beginning of period		65,165			63,443
Net income attributable to PepsiCo		4,261			1,714
Cash dividends declared – common (a)		(1,492)			(1,417)
Balance, end of period		67,934			63,740
Accumulated Other Comprehensive Loss
Balance, beginning of period		(14,898)			(15,476)
Other comprehensive (loss)/income attributable to PepsiCo		(445)			230
Balance, end of period		(15,343)			(15,246)
Repurchased Common Stock
Balance, beginning of period	(484)	(38,248)		(487)	(38,446)
Share repurchases	(1)	(213)		(1)	(106)
Stock option exercises, RSUs and PSUs converted	2	156		3	182
Balance, end of period	(483)	(38,305)		(485)	(38,370)
Total PepsiCo Common Shareholders’ Equity		18,202			13,947
Noncontrolling Interests
Balance, beginning of period		108			98
Net income attributable to noncontrolling interest		12			9
Other, net		(2)			(1)
Balance, end of period		118			106
Total Equity		$	18,320		$	14,053

(a)Cash dividends declared per common share were $1.075 and $1.0225 for the 12 weeks ended March 19, 2022 and March 20, 2021, respectively.

See accompanying notes to the condensed consolidated financial statements.

8

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 25, 2021 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 25, 2021 (2021 Form 10-K). This report should be read in conjunction with our 2021 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 19, 2022 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 reported on a monthly calendar basis prior to the fourth quarter of 2021. Beginning in the fourth quarter of 2021, all of our international operations reported on a monthly calendar basis. This change did not have a material impact on our condensed consolidated financial statements. For our international operations, the months of January and February are reflected in our results for the 12 weeks ended March 19, 2022.

The preparation of our condensed consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and related disclosures. Additionally, the business and economic uncertainty resulting from the novel coronavirus (COVID-19) pandemic and the deadly conflict in Ukraine has made such estimates and assumptions more difficult to calculate. Accordingly, actual results and outcomes could differ from those estimates.

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. Certain reclassifications were made to the prior year’s financial statements to conform to the current year presentation.

Our Divisions

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

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

9

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

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 and convenient food businesses in Latin America;

5)Europe, which includes all of our beverage and convenient food businesses in Europe;

6)Africa, Middle East and South Asia (AMESA), which includes all of our beverage and convenient food 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 and convenient food businesses in Asia Pacific, Australia and New Zealand, and China region.

Net revenue of each division is as follows:

	12 Weeks Ended
	3/19/2022		3/20/2021
FLNA	$	4,839	$	4,236
QFNA	713		646
PBNA	5,353		5,074
LatAm	1,474		1,242
Europe	1,797		1,795
AMESA	1,004		883
APAC	1,020		944
Total	$	16,200	$	14,820

Our primary performance obligation is the distribution and sales of beverage and convenient food products to our customers. The following tables reflect the approximate percentage of net revenue generated between our beverage business and our convenient food business for each of our international divisions, as well as our consolidated net revenue:

	12 Weeks Ended
	3/19/2022				3/20/2021
	Beverages(a)		Convenient Foods		Beverages(a)		Convenient Foods
LatAm	10	%	90	%	10	%	90	%
Europe	50	%	50	%	50	%	50	%
AMESA	30	%	70	%	30	%	70	%
APAC	15	%	85	%	15	%	85	%
PepsiCo (b)	40	%	60	%	45	%	55	%

(a)Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe divisions, is approximately 35% and 40% of our consolidated net revenue in the 12 weeks ended March 19, 2022 and March 20, 2021, respectively. Generally, our finished goods beverage operations produce higher net revenue but lower operating margin as compared to concentrate sold to authorized bottling partners for the manufacture of finished goods beverages.

(b)The decrease in the percentage of net revenue generated by our beverage business in the 12 weeks ended March 19, 2022 primarily reflects the Juice Transaction. See Note 11 for further information.

10

Operating profit of each division is as follows:

	12 Weeks Ended
	3/19/2022		3/20/2021
FLNA	$	1,296	$	1,240
QFNA	159		150
PBNA (a)	3,434		366
LatAm	323		218
Europe (a) (b)	(136)		131
AMESA	180		138
APAC	215		208
Total divisions	5,471		2,451
Corporate unallocated expenses (c)	(204)		(139)
Total	$	5,267	$	2,312

(a)In the 12 weeks ended March 19, 2022, we recorded a gain of $3.0 billion and $298 million in our PBNA and Europe divisions, respectively, associated with the Juice Transaction. The total after-tax amount was $2.9 billion or $2.06 per share. See Note 11 for further information.

(b)In the 12 weeks ended March 19, 2022, we recorded pre-tax impairment charges (Brand Portfolio Impairment Charges) of $241 million ($193 million after-tax or $0.14 per share) in selling, general and administrative expenses related to the discontinuation or repositioning of certain juice and dairy brands in Russia. See Note 3 for further information. Also see below for charges taken as a result of the Russia-Ukraine conflict.

(c)In the 12 weeks ended March 20, 2021, we recorded a pre-tax unrealized gain of $108 million ($82 million after-tax or $0.06 per share) on our short-term investment in a publicly traded company, based on the quoted active market price as of market close on March 19, 2021, the last trading day of our first quarter of 2021. The gain was recorded in selling, general and administrative expenses within corporate unallocated expenses. We sold all of these shares during the second quarter of 2021.

Operating profit includes certain pre-tax charges in our Europe division, taken as a result of the Russia-Ukraine conflict. These pre-tax charges are as follows:

	12 Weeks Ended 3/19/2022
Impairment charges related to property, plant and equipment	$	123
Allowance for expected credit losses	37
Inventory write-downs	33
Other	48
Total (a)	$	241
After-tax amount	$	241
Impact on net income attributable to PepsiCo per common share	$	(0.17)

(a)Includes $140 million recorded in cost of sales and $101 million recorded in selling, general and administrative expenses.

11

Operating profit includes certain pre-tax charges taken as a result of the COVID-19 pandemic, primarily related to incremental employee compensation costs, such as certain leave benefits and labor costs, and employee protection costs. These pre-tax charges by division are as follows:

	12 Weeks Ended
	3/19/2022		3/20/2021
FLNA	$	14	$	24
QFNA	1		2
PBNA	10		13
LatAm	6		15
Europe	1		6
AMESA (a)	2		(1)
APAC	2		2
Total	$	36	$	61

(a)Income amount primarily relates to a true-up of inventory write-downs.

Note 2 - 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. To build on the successful implementation of the 2019 Productivity Plan, in 2021, we expanded and extended the plan through the end of 2026 to take advantage of additional opportunities within the initiatives described above. As a result, we expect to incur pre-tax charges of approximately $3.15 billion, including cash expenditures of approximately $2.4 billion. These pre-tax charges are expected to consist of approximately 55% of severance and other employee-related costs, 10% for asset impairments (all non-cash) resulting from plant closures and related actions, and 35% for other costs associated with the implementation of our initiatives.

The total 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	15	%	1	%	25	%	10	%	25	%	5	%	4	%	15	%

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

	12 Weeks Ended
	3/19/2022		3/20/2021
Cost of sales	$	5	$	2
Selling, general and administrative expenses	22		35
Other pension and retiree medical benefits expense	—		6
Total restructuring and impairment charges	$	27	$	43
After-tax amount	$	21	$	35
Impact on net income attributable to PepsiCo per common share	$	(0.02)	$	(0.03)

12

	12 Weeks Ended				Plan to Date
	3/19/2022		3/20/2021		through 3/19/2022
FLNA	$	3	$	15	$	167
QFNA	—		—		12
PBNA	3		4		161
LatAm	6		2		145
Europe	7		11		241
AMESA	2		1		72
APAC	1		—		62
Corporate	5		4		144
	27		37		1,004
Other pension and retiree medical benefits expense	—		6		67
Total	$	27	$	43	$	1,071

	12 Weeks Ended				Plan to Date
	3/19/2022		3/20/2021		through 3/19/2022
Severance and other employee costs	$	11	$	34	$	575
Asset impairments	—		—		157
Other costs	16		9		339
Total	$	27	$	43	$	1,071

Severance and other employee costs primarily include severance and other termination benefits, as well as voluntary separation arrangements. Other costs primarily include costs associated with the implementation of our initiatives, including contract termination costs, consulting and other professional fees.

A summary of our 2019 Productivity Plan activity for the 12 weeks ended March 19, 2022 is as follows:

	Severance and Other Employee Costs		Other Costs		Total
Liability as of December 25, 2021	$	64	$	7	$	71
2022 restructuring charges	11		16		27
Cash payments	(16)		(16)		(32)
Liability as of March 19, 2022	$	59	$	7	$	66

Substantially all of the restructuring accrual at March 19, 2022 is expected to be paid by the end of 2022.

Other Productivity Initiatives

There were no 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.

For information on other impairment charges, see Notes 1 and 3 for Brand Portfolio Impairment Charges and Note 1 for Russia-Ukraine Conflict Charges.

13

Note 3 - Intangible Assets    

During the 12 weeks ended March 19, 2022, we discontinued or repositioned certain juice and dairy brands in Russia in our Europe division. As a result, we recognized pre-tax impairment charges (Brand Portfolio Impairment Charges) of $241 million ($193 million after-tax or $0.14 per share) in selling, general and administrative expenses, primarily related to indefinite-lived intangible assets. In light of the current political and economic environment, we will continue to review and analyze our brand portfolio worldwide.

For further information on our policies for indefinite-lived intangible assets, refer to Note 2 to our consolidated financial statements in our 2021 Form 10-K.

A summary of our amortizable intangible assets is as follows:

	3/19/2022						12/25/2021
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Acquired franchise rights (a)	$	975	$	(189)	$	786	$	976	$	(187)	$	789
Customer relationships	608		(222)		386		623		(227)		396
Brands	1,120		(984)		136		1,151		(989)		162
Other identifiable intangibles	450		(261)		189		451		(260)		191
Total	$	3,153	$	(1,656)	$	1,497	$	3,201	$	(1,663)	$	1,538

(a)Acquired franchise rights includes our distribution agreement with Vital Pharmaceuticals, Inc., with an expected residual value higher than our carrying value. In the fourth quarter of 2020, we received notice of termination without cause, which would end our distribution rights, effective in the fourth quarter of 2023. The distribution agreement’s useful life is three years, in accordance with the three-year termination notice issued.

14

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

	Balance 12/25/2021		Translation and Other		Balance 3/19/2022
FLNA
Goodwill	$	458	$	2	$	460
Brands	340		—		340
Total	798		2		800
QFNA
Goodwill	189		—		189
Total	189		—		189
PBNA
Goodwill	11,974		6		11,980
Reacquired franchise rights	7,107		13		7,120
Acquired franchise rights	1,538		2		1,540
Brands	2,508		—		2,508
Total	23,127		21		23,148
LatAm
Goodwill	433		15		448
Brands	100		5		105
Total	533		20		553
Europe (a)
Goodwill	3,700		(308)		3,392
Reacquired franchise rights	441		(36)		405
Acquired franchise rights	158		(2)		156
Brands	4,254		(513)		3,741
Total	8,553		(859)		7,694
AMESA
Goodwill	1,063		16		1,079
Brands	205		6		211
Total	1,268		22		1,290
APAC
Goodwill	564		—		564
Brands	476