The following selected financial data should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” our consolidated financial statements and accompanying notes thereto. Our fiscal year ends on the last Saturday of each December and our fiscal year 2016 comprised fifty-three reporting weeks while all other fiscal years presented in the tables below comprised fifty-two reporting weeks.
2018
2017
2016
2015
2014
Net revenue (a)
$
64,661
$
63,525
$
62,799
$
63,056
$
66,683
Operating profit (b)
$
10,110
$
10,276
$
9,804
$
8,274
$
9,755
(Benefit from)/provision for income taxes (c)
$
(3,370
)
$
4,694
$
2,174
$
1,941
$
2,199
Net income attributable to PepsiCo (c)
$
12,515
$
4,857
$
6,329
$
5,452
$
6,513
Net income attributable to PepsiCo per common share – basic (c)
$
8.84
$
3.40
$
4.39
$
3.71
$
4.31
Net income attributable to PepsiCo per common share – diluted (c)
$
8.78
$
3.38
$
4.36
$
3.67
$
4.27
Cash dividends declared per common share
$
3.5875
$
3.1675
$
2.96
$
2.7625
$
2.5325
Total assets
$
77,648
$
79,804
$
73,490
$
68,976
$
69,634
Long-term debt
$
28,295
$
33,796
$
30,053
$
29,213
$
23,821
(a)
Our fiscal 2016 results included an extra week of results (53rd reporting week). The 53rd reporting week increased 2016 net revenue by $657 million, including $294 million in our FLNA segment, $43 million in our QFNA segment, $300 million in our NAB segment and $20 million in our ESSA segment.
(b)
Our fiscal results prior to 2018 reflect the retrospective adoption of guidance requiring the presentation of non-service cost components of net periodic benefit cost below operating profit. See Note 2 to our consolidated financial statements.
(c)
Our fiscal 2018 results include other net tax benefits related to the reorganization of our international operations. Our fiscal 2018 and 2017 results include the impact of the TCJ Act. See Note 5 to our consolidated financial statements.
The following information highlights certain items that impacted our results of operations and financial condition for the five years presented above:
2018
Operating profit
Other pension and retiree medical benefits income
Interest expense
Benefit from income taxes(d)
Net income attributable to noncontrolling interests
Net income attributable to PepsiCo
Net income attributable to PepsiCo per common share – diluted
Mark-to-market net impact (e)
$
(163
)
$
—
$
—
$
38
$
—
$
(125
)
$
(0.09
)
Restructuring and impairment charges (f)
$
(272
)
$
(36
)
$
—
$
56
$
1
$
(251
)
$
(0.18
)
Merger and integration charges (g)
$
(75
)
$
—
$
—
$
—
$
—
$
(75
)
$
(0.05
)
Net tax benefit related to the TCJ Act (h)
$
—
$
—
$
—
$
28
$
—
$
28
$
0.02
Other net tax benefits (i)
$
—
$
—
$
—
$
5,064
$
—
$
5,064
$
3.55
Charges related to cash tender and exchange offers (j)
$
—
$
—
$
(253
)
$
62
$
—
$
(191
)
$
(0.13
)
Tax reform bonus (k)
$
(87
)
$
—
$
—
$
21
$
—
$
(66
)
$
(0.05
)
Gains on beverage refranchising (l)
$
202
$
—
$
—
$
(30
)
$
—
$
172
$
0.12
Gains on sale of assets (m)
$
76
$
—
$
—
$
(19
)
$
—
$
57
$
0.04
2017
Operating profit(b)
Other pension and retiree medical benefits income(b)
Provision for income taxes(d)
Net income attributable to PepsiCo
Net income attributable to PepsiCo per common share – diluted
Mark-to-market net impact (e)
$
15
$
—
$
(7
)
$
8
$
0.01
Restructuring and impairment charges (f)
$
(229
)
$
(66
)
$
71
$
(224
)
$
(0.16
)
Provisional net tax expense related to the TCJ Act (h)
$
—
$
—
$
(2,451
)
$
(2,451
)
$
(1.70
)
Gain on sale of Britvic plc (Britvic) securities (n)
$
95
$
—
$
(10
)
$
85
$
0.06
Gain on beverage refranchising (l)
$
140
$
—
$
(33
)
$
107
$
0.07
Gain on sale of assets (m)
$
87
$
—
$
(25
)
$
62
$
0.04
2016
Operating profit(b)
Other pension and retiree medical benefits expense(b)
Interest expense
Provision for income taxes(d)
Net income attributable to noncontrolling interests
Net income attributable to PepsiCo
Net income attributable to PepsiCo per common share – diluted
Mark-to-market net impact (e)
$
167
$
—
$
—
$
(56
)
$
—
$
111
$
0.08
Restructuring and impairment charges (f)
$
(155
)
$
(5
)
$
—
$
26
$
3
$
(131
)
$
(0.09
)
Charge related to the transaction with Tingyi (o)
$
(373
)
$
—
$
—
$
—
$
—
$
(373
)
$
(0.26
)
Charge related to debt redemption (j)
$
—
$
—
$
(233
)
$
77
$
—
$
(156
)
$
(0.11
)
Pension-related settlement charge (p)
$
—
$
(242
)
$
—
$
80
$
—
$
(162
)
$
(0.11
)
53rd reporting week (q)
$
126
$
—
$
(19
)
$
(44
)
$
(1
)
$
62
$
0.04
2015
Operating profit(b)
Other pension and retiree medical benefits income(b)
Provision for income taxes(d)
Net income attributable to PepsiCo
Net income attributable to PepsiCo per common share – diluted
Mark-to-market net impact (e)
$
11
$
—
$
(3
)
$
8
$
—
Restructuring and impairment charges (f)
$
(207
)
$
(23
)
$
46
$
(184
)
$
(0.12
)
Charge related to the transaction with Tingyi (o)
$
(73
)
$
—
$
—
$
(73
)
$
(0.05
)
Pension-related settlement benefits (p)
$
67
$
—
$
(25
)
$
42
$
0.03
Venezuela impairment charges (r)
$
(1,359
)
$
—
$
—
$
(1,359
)
$
(0.91
)
Tax benefit (i)
$
—
$
—
$
230
$
230
$
0.15
Müller Quaker Dairy (MQD) impairment (s)
$
(76
)
$
—
$
28
$
(48
)
$
(0.03
)
Gain on beverage refranchising (l)
$
39
$
—
$
(11
)
$
28
$
0.02
Other productivity initiatives (t)
$
(90
)
$
—
$
24
$
(66
)
$
(0.04
)
Joint venture impairment charge (u)
$
(29
)
$
—
$
—
$
(29
)
$
(0.02
)
2014
Operating profit(b)
Other pension and retiree medical benefits expense(b)
Provision for income taxes(d)
Net income attributable to noncontrolling interests
Net income attributable to PepsiCo
Net income attributable to PepsiCo per common share – diluted
Mark-to-market net impact (e)
$
(68
)
$
—
$
24
$
—
$
(44
)
$
(0.03
)
Restructuring and impairment charges (f)
$
(384
)
$
(34
)
$
99
$
3
$
(316
)
$
(0.21
)
Pension-related settlement charge (p)
$
—
$
(141
)
$
53
$
—
$
(88
)
$
(0.06
)
Venezuela remeasurement charge (v)
$
(105
)
$
—
$
—
$
—
$
(105
)
$
(0.07
)
Gain on sale of assets (m)
$
31
$
—
$
3
$
—
$
34
$
0.02
Other productivity initiatives (t)
$
(67
)
$
—
$
13
$
—
$
(54
)
$
(0.04
)
(d)
Benefit from/provision for income taxes is the expected tax benefit/charge on the underlying item based on the tax laws and income tax rates applicable to the underlying item in its corresponding tax jurisdiction and tax year.
(e)
Mark-to-market net gains and losses on commodity derivatives in corporate unallocated expenses.
(f)
Expenses related to the 2019 Multi-Year Productivity Plan (2019 Productivity Plan), 2014 Multi-Year Productivity Plan (2014 Productivity Plan) and 2012 Multi-Year Productivity Plan (2012 Productivity Plan). See Note 3 to our consolidated financial statements for further discussion of our 2019 and 2014 Productivity Plans.
(g)
In 2018, merger and integration charges related to our acquisition of SodaStream. $57 million of this charge was recorded in the ESSA segment, with the balance recorded in corporate unallocated expenses. See Note 14 to our consolidated financial statements.
(h)
In 2018, a net tax benefit and, in 2017, a provisional net tax expense, each associated with the enactment of the TCJ Act. See Note 5 to our consolidated financial statements.
(i)
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. In 2015, non-cash tax benefit associated with our agreement with the IRS resolving substantially all open matters related to the audits for taxable years 2010 through 2011, which reduced our reserve for uncertain tax positions for the tax years 2010 through 2011.
(j)
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. In 2016, interest expense primarily representing the premium paid in accordance with the “make-whole” redemption provisions to redeem all of our outstanding 7.900% senior notes due 2018 and 5.125% senior notes due 2019 for the principal amounts of $1.5 billion and $750 million, respectively. See Note 8 to our consolidated financial statements.
(k)
In 2018, bonus extended to certain U.S. employees in connection with the TCJ Act in the following segments: $44 million in FLNA, $2 million in QFNA and $41 million in NAB.
(l)
In 2018, gains of $58 million and $144 million associated with refranchising our entire beverage bottling operations and snack distribution operations in Czech Republic, Hungary and Slovakia (CHS) in the ESSA segment and refranchising a portion of our beverage business in Thailand in the AMENA segment, respectively. In 2017, gain in the AMENA segment associated with refranchising a portion of our beverage business in Jordan. See Note 14 to our consolidated financial statements. In 2015, gain in the AMENA segment associated with refranchising a portion of our beverage businesses in India.
(m)
In 2018, gains associated with the sale of assets in the following segments: $64 million in NAB and $12 million in AMENA. In 2017, gains associated with the sale of assets in the following segments: $17 million in FLNA, $21 million in NAB, $21 million in AMENA and $28 million in corporate unallocated expenses. In 2014, gain in the ESSA segment associated with the sale of agricultural assets in Russia.
(n)
In 2017, gain in the ESSA segment associated with the sale of our minority stake in Britvic.
(o)
In 2016, impairment charge in the AMENA segment to reduce the value of our 5% indirect equity interest in KSF Beverage Holding Co., Ltd. (KSFB), formerly known as Tingyi-Asahi Beverages Holding Co. Ltd., to its estimated fair value. See Note 9 to our consolidated financial statements. In 2015, write-off in the AMENA segment of the value of a call option to increase our holding in KSFB to 20%.
(p)
In 2016, pension settlement charge related to the purchase of a group annuity contract. In 2015, benefits in the NAB segment associated with the settlement of pension-related liabilities from previous acquisitions. In 2014, lump sum settlement charge related to payments for pension liabilities to certain former employees who had vested benefits.
(q)
Our fiscal 2016 results included the 53rd reporting week, the impact of which was fully offset by incremental investments in our business.
(r)
In 2015, charges in the Latin America segment related to the impairment of investments in our wholly-owned Venezuelan subsidiaries and beverage joint venture. Beginning in the fourth quarter of 2015, our financial results have not included the results of our Venezuelan businesses.
(s)
In 2015, impairment charges in the QFNA segment associated with our MQD joint venture investment, including a charge related to ceasing its operations.
(t)
In 2015 and 2014, expenses related to other productivity initiatives outside the scope of the 2014 and 2012 Productivity Plans.
(u)
In 2015, impairment charge in the AMENA segment associated with a joint venture in the Middle East.
(v)
In 2014, net charge related to our remeasurement of the bolivar for certain net monetary assets of our Venezuelan businesses. $126 million of this charge was in corporate unallocated expenses, with the balance (equity income of $21 million) in our Latin America segment.
Selected Quarterly Financial Data
Selected financial data for 2018 and 2017 is summarized as follows and highlights certain items that impacted our quarterly results (in millions except per share amounts, unaudited):
2018
2017
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Net revenue
$
12,562
$
16,090
$
16,485
$
19,524
$
12,049
$
15,710
$
16,240
$
19,526
Gross profit (a)
$
6,907
$
8,827
$
8,958
$
10,588
$
6,759
$
8,651
$
8,872
$
10,447
Operating profit (a)
$
1,807
$
3,028
$
2,844
$
2,431
$
1,863
$
2,919
$
2,924
$
2,570
Mark-to-market net impact (b)
$
(31
)
$
3
$
(29
)
$
(106
)
$
(14
)
$
(26
)
$
27
$
28
Restructuring and impairment charges (c)
$
(12
)
$
(32
)
$
(35
)
$
(229
)
$
(27
)
$
(34
)
$
(8
)
$
(226
)
Merger and integration charges (d)
—
—
—
$
(75
)
—
—
—
—
Net tax (expense)/benefit related to the TCJ Act (e)
$
(1
)
$
(777
)
$
(76
)
$
882
—
—
—
$
(2,451
)
Other net tax benefits (f)
—
$
314
$
364
$
4,386
—
—
—
—
Charges related to cash tender and exchange offers (g)
—
—
—
$
(253
)
—
—
—
—
Tax reform bonus (h)
$
(87
)
—
—
—
—
—
—
—
Gains on beverage refranchising (i)
—
$
144
—
$
58
—
—
—
$
140
Gains on sale of assets (j)
$
18
$
9
$
37
$
12
—
—
$
21
$
66
Gain on sale of Britvic securities (k)
—
—
—
—
—
$
95
—
—
Provision for/(benefit from) income taxes (l)
$
304
$
1,070
$
188
$
(4,932
)
$
392
$
656
$
620
$
3,026
Net income/(loss) attributable to PepsiCo (l)
$
1,343
$
1,820
$
2,498
$
6,854
$
1,318
$
2,105
$
2,144
$
(710
)
Net income/(loss) attributable to PepsiCo per common share (l)
Basic
$
0.94
$
1.28
$
1.77
$
4.86
$
0.92
$
1.47
$
1.50
$
(0.50
)
Diluted
$
0.94
$
1.28
$
1.75
$
4.83
$
0.91
$
1.46
$
1.49
$
(0.50
)
Cash dividends declared per common share
$
0.805
$
0.9275
$
0.9275
$
0.9275
$
0.7525
$
0.805
$
0.805
$
0.805
(a)
In 2017, reflect the retrospective adoption of guidance requiring the presentation of non-service cost components of net periodic benefit cost below operating profit. See Note 2 to our consolidated financial statements.
(b)
Mark-to-market net gains and losses on commodity derivatives in corporate unallocated expenses.
(c)
Expenses related to the 2019 and 2014 Productivity Plans. See Note 3 to our consolidated financial statements.
(d)
In 2018, merger and integration charges related to our acquisition of SodaStream. $57 million of this charge was recorded in the ESSA segment, with the balance recorded in corporate unallocated expenses. See Note 14 to our consolidated financial statements.
(e)
In 2018, a net tax benefit and, in 2017, a provisional net tax expense, each associated with the enactment of the TCJ Act. See Note 5 to our consolidated financial statements.
(f)
In 2018, other net tax benefits of $4.3 billion resulting from the reorganization of our international operations. 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.
(g)
In 2018, interest expense in connection with our cash tender and exchange offers. See Note 8 to our consolidated financial statements.
(h)
In 2018, bonus extended to certain U.S. employees in connection with the TCJ Act in the following segments: $44 million in FLNA, $2 million in QFNA and $41 million in NAB.
(i)
In 2018, gains of $58 million and $144 million associated with refranchising our entire beverage bottling operations and snack distribution operations in CHS in the ESSA segment and refranchising a portion of our beverage business in Thailand in the AMENA segment, respectively. In 2017, gain in the AMENA segment associated with refranchising a portion of our beverage business in Jordan. See Note 14 to our consolidated financial statements.
(j)
In 2018, gains associated with the sale of assets in the following segments: $64 million in NAB and $12 million in AMENA. In 2017, gains associated with the sale of assets in the following segments: $17 million in FLNA, $21 million in NAB, $21 million in AMENA and $28 million in corporate unallocated expenses.
(k)
In 2017, gain in the ESSA segment associated with the sale of our minority stake in Britvic. See Note 9 to our consolidated financial statements.
(l)
Our fiscal 2018 results include other net tax benefits related to the reorganization of our international operations. Our fiscal 2018 and 2017 results include the impact of the TCJ Act. See Note 5 to our consolidated financial statements.
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