10-K – 2026-02-03 – pep-20251227.htm

Name Age Title
David J. Flavell 54 Executive Vice President, General Counsel and Corporate Secretary, PepsiCo
Athina Kanioura 49 Chief Executive Officer, PepsiCo Latin America Foods and Executive Vice President, Strategy & Transformation Officer
Ram Krishnan 55 Chief Executive Officer, PepsiCo North America
Ramon L. Laguarta 62 Chairman of the Board of Directors and Chief Executive Officer, PepsiCo
Silviu Popovici 58 Chief Executive Officer, Europe, Middle East and Africa
Becky Schmitt 52 Executive Vice President and Chief People Officer, PepsiCo
Stephen T. Schmitt 52 Executive Vice President and Chief Financial Officer, PepsiCo
Christine E. Tammara 48 Senior Vice President and Controller, PepsiCo
Eugene Willemsen 58 Chief Executive Officer, International Beverages

David J. Flavell has served as Executive Vice President, General Counsel and Corporate Secretary, PepsiCo since 2021. Mr. Flavell previously held a number of leadership roles at PepsiCo, including as Senior Vice President, Deputy General Counsel and Chief Compliance & Ethics Officer for PepsiCo from 2019 to 2021, as Senior Vice President, Deputy General Counsel & Managing Attorney from 2018 to 2019, as Senior Vice President, Deputy General Counsel & General Counsel, International and Global Groups from 2017 to 2018, as Senior Vice President, Deputy General Counsel & General Counsel, Latin America and Frito-Lay North America from 2016 to 2017, as Senior Vice President, General Counsel, Latin America and Frito-Lay North America from 2015 to 2016, and as Senior Vice President, General Counsel, Asia, Middle East and Africa from 2011 to 2015. Before joining PepsiCo in 2011, Mr. Flavell was general counsel for Danone S.A.’s Asia Pacific and Middle East business. Prior to that, Mr. Flavell served as senior legal counsel at Fonterra Co-operative Group Limited and was a partner at Corrs Chambers Westgarth.
Athina Kanioura was appointed Chief Executive Officer, PepsiCo Latin America Foods and Executive Vice President, Strategy & Transformation Officer in December 2025. Ms. Kanioura previously served as Executive Vice President and Chief Strategy and Transformation Officer, PepsiCo from 2020 to December 2025. Prior to joining PepsiCo, Ms. Kanioura served as Chief Analytics Officer and Global Head of Applied Intelligence at Accenture plc from 2019 to 2020 and as its Global Data Science Lead from 2017 to 2019. Since she joined Accenture in 2005, she held positions of increasing responsibility, including as Global Marketing and Commercial Analytics Lead.
Ram Krishnan was appointed Chief Executive Officer, PepsiCo North America, effective December 2025. Prior to that, Mr. Krishnan served as Chief Executive Officer, U.S. Beverages from January 2025 to December 2025, as Chief Executive Officer, PepsiCo Beverages North America from February 2024 to January 2025, as Chief Executive Officer, International Beverages and Chief Commercial Officer of PepsiCo from 2022 to February 2024, as Executive Vice President and Chief Commercial Officer, PepsiCo, from 2019 to 2021, as President and Chief Executive Officer of PepsiCo’s Asia Pacific, Australia and New Zealand and China Region from 2018 to 2020, and as PepsiCo’s Senior Vice President and Chief Customer Officer for Walmart, leading PepsiCo’s global Walmart customer team, from 2016 to 2017. Mr. Krishnan joined PepsiCo in 2006 and held marketing roles of increasing responsibility from 2006 to 2016, including as Senior Vice President and Chief Marketing Officer, Frito-Lay North America from 2014 to 2016, as Senior Vice President, Marketing, Frito-Lay North America from 2012 to 2013 and

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as Vice President of Global Brands, Frito-Lay North America from 2011 to 2012. Prior to PepsiCo, Mr. Krishnan spent six years at General Motors Company as a marketing manager for Cadillac.
Ramon L. Laguarta has served as PepsiCo’s Chief Executive Officer and a director on the Board since 2018, and assumed the role of Chairman of the Board in 2019. Mr. Laguarta previously served as President of PepsiCo from 2017 to 2018. Prior to serving as President, Mr. Laguarta held a variety of positions of increasing responsibility in Europe, including as Commercial Vice President of PepsiCo Europe from 2006 to 2008, PepsiCo Eastern Europe Region from 2008 to 2012, President, Developing & Emerging Markets, PepsiCo Europe from 2012 to 2015, Chief Executive Officer, PepsiCo Europe in 2015, and Chief Executive Officer, Europe Sub-Saharan Africa from 2015 until 2017. From 2002 to 2006, he was General Manager for Iberia Snacks and Juices, and from 1999 to 2001, a General Manager for Greece Snacks. Prior to joining PepsiCo in 1996 as a marketing vice president for Spain Snacks, Mr. Laguarta worked for Chupa Chups, S.A., where he worked in several international assignments in Asia, Europe, the Middle East and the United States. Mr. Laguarta was elected to the board of directors of International Business Machines Corporation effective March 1, 2026.
Silviu Popovici was appointed Chief Executive Officer, Europe, Middle East and Africa, effective January 2025. Prior to this role, he served as Chief Executive Officer, Europe from 2019 to 2024 and as Chief Executive Officer, Europe Sub-Saharan Africa in 2019 and as President, Europe Sub-Saharan Africa from 2017 to early 2019. Mr. Popovici previously served as President, Russia, Ukraine and CIS (The Commonwealth of Independent States) from 2015 to 2017, and as President, PepsiCo Russia from 2013 to 2015. Mr. Popovici joined PepsiCo in 2011 following PepsiCo’s acquisition of Wimm-Bill-Dann Foods OJSC (WBD) and served as General Manager, WBD Foods Division from 2011 until 2012. Prior to the acquisition, Mr. Popovici held senior leadership roles at WBD, running its dairy business from 2008 to 2011 and its beverages business from 2006 to 2008.
Becky Schmitt has served as Executive Vice President and Chief People Officer, PepsiCo, since June 2023. Prior to that, Ms. Schmitt served as Executive Vice President, Chief People Officer of Cognizant Technology Solutions Corp. from 2020 to 2023. Prior to joining Cognizant, Ms. Schmitt served in various executive human resources roles at Walmart, Inc., including as Senior Vice President, Chief People Officer of Sam’s Club, a division of Walmart, from 2018 to 2020, Senior Vice President, Chief People Officer of U.S. eCommerce and corporate functions from late 2016 to 2018, and Vice President, Human Resources – Technology from early 2016 to late 2016. Prior to joining Walmart, Ms. Schmitt spent over 20 years with Accenture plc in multiple senior human resources roles globally.
Stephen T. Schmitt was appointed Executive Vice President and Chief Financial Officer, effective November 2025. Prior to that, Mr. Schmitt served as Executive Vice President and Chief Financial Officer for Walmart U.S. from 2021 to November 2025, as Executive Vice President and Chief Financial Officer for Walmart U.S. Omni-Channel during 2021, as Senior Vice President and Chief Financial Officer for Walmart U.S. eCommerce from 2019 to 2020 and as Senior Vice President and Chief Financial Officer for Sam’s Club from 2018 to 2019. Before these roles, Mr. Schmitt served in investor relations after joining Walmart in 2016. Prior to joining Walmart, Mr. Schmitt held a variety of roles at Yum! Brands from 2006 to 2016.
Christine E. Tammara was appointed Senior Vice President and Controller, PepsiCo effective May 2025. Prior to that, Ms. Tammara served as Senior Vice President, Controller, PepsiCo Beverages North America from 2023 to May 2025, as Senior Vice President and General Auditor from 2021 to 2023 and as Vice President and Assistant Controller, Technical Accounting and Policy from 2016 to 2021 and held a succession of roles in PepsiCo’s Control function. Prior to joining PepsiCo in 2007, Ms. Tammara worked in external reporting at Reader’s Digest Association, Inc. and as an audit manager for PricewaterhouseCoopers LLP.

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Eugene Willemsen was appointed Chief Executive Officer, International Beverages, effective January 2025. Previously, he served as Chief Executive Officer, Africa, Middle East, South Asia and International Beverages in 2024, as Chief Executive Officer, Africa, Middle East, South Asia from 2019 to February 2024, as Chief Executive Officer, Sub-Saharan Africa in 2019 and as Executive Vice President, Global Categories and Franchise Management from 2015 to 2019. Before that, he led the global Pepsi-Lipton Joint Venture as President from 2014 to 2015. Prior to such role, Mr. Willemsen served as PepsiCo’s Senior Vice President and General Manager, South East Europe from 2011 to 2013, as Senior Vice President and General Manager, Commercial, Europe from 2008 to 2011, as Senior Vice President and General Manager, Northern Europe from 2006 to 2008, as Vice President, General Manager, Benelux from 2000 to 2005 and as Commercial Director, Benelux for the snacks business from 1998 to 2000. Mr. Willemsen joined PepsiCo in 1995 as a business development manager.
Executive officers are elected by our Board, and their terms of office continue until the next annual meeting of the Board or until their successors are elected and have qualified. There are no family relationships among our executive officers.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Stock Trading Symbol – PEP.
Stock Exchange Listings – The Nasdaq Global Select Market is the principal market for our common stock, which is also listed on the SIX Swiss Exchange.
Shareholders – As of January 23, 2026, there were approximately 87,254 shareholders of record of our common stock.
Dividends – We have paid consecutive quarterly cash dividends since 1965. The declaration and payment of future dividends are at the discretion of the Board. Dividends are usually declared in February, May, July and November and paid at the end of March, June and September and the beginning of January. For 2026, the record dates for these dividend payments are expected to be March 6, June 5, September 4 and December 4, 2026, subject to the approval of the Board. On February 3, 2026, we announced a 4% increase in our annualized dividend to $5.92 per share from $5.69 per share, effective with the dividend expected to be paid in June 2026. We expect to return a total of approximately $8.9 billion to shareholders in 2026, comprising dividends of approximately $7.9 billion and share repurchases of approximately $1.0 billion.
For information on securities authorized for issuance under our equity compensation plans, see “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

A summary of our common stock repurchases (in millions, except average price per share) during the fourth quarter of 2025 is set forth in the table below.
Issuer Purchases of Common Stock

Period Total
Number of
Shares
Repurchased (a)
Average
Price Paid
Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
9/6/2025 $ 5,740 
9/7/2025-10/4/2025 0.7  $ 141.35  0.7  (97)
5,643 
10/5/2025-11/1/2025 0.4  $ 149.10  0.4  (61)
5,582 
11/2/2025-11/29/2025 0.3  $ 145.16  0.3  (50)
5,532 
11/30/2025-12/27/2025 0.2  $ 147.53  0.2  (32)
Total 1.6   $ 144.88   1.6   $ 5,500  

(a) All shares were repurchased in open market transactions pursuant to the $10 billion repurchase program authorized by our Board and publicly announced on February 10, 2022, which commenced on February 11, 2022 and was originally set to expire on February 28, 2026. On February 3, 2026, we announced a new share repurchase program providing for the repurchase of up to $10 billion of PepsiCo common stock which commenced on February 1, 2026 and will expire on February 28, 2030 (2026 Share Repurchase Program), and such shares are excluded from the above table. The 2026 Share Repurchase Program replaced and superseded the existing share repurchase program. Shares repurchased under the 2026 Share Repurchase Program may be repurchased in open market transactions, in privately negotiated transactions, in accelerated stock repurchase transactions or otherwise.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

OUR BUSINESS
Executive Overview 33

Our Operations 34

Other Relationships 34

Our Business Risks 34

OUR FINANCIAL RESULTS
Results of Operations – Consolidated Review 40

Results of Operations – Segment Review 41

PFNA 43

PBNA 43

IB Franchise 43

EMEA 44

LatAm Foods 44

Asia Pacific Foods 44

Non-GAAP Measures 44

Items Affecting Comparability 46

Our Liquidity and Capital Resources 49

Return on Invested Capital 51

OUR CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Revenue Recognition 52

Goodwill and Other Intangible Assets 53

Income Tax Expense and Accruals 54

Pension and Retiree Medical Plans 55

CONSOLIDATED STATEMENT OF INCOME 57

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 58

CONSOLIDATED STATEMENT OF CASH FLOWS 59

CONSOLIDATED BALANCE SHEET 61

CONSOLIDATED STATEMENT OF EQUITY 62

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Basis of Presentation and Our Segments 63

Note 2 – Our Significant Accounting Policies 69

Note 3 – Restructuring and Impairment Charges 73

Note 4 – Intangible Assets 75

Note 5 – Income Taxes 77

Note 6 – Share-Based Compensation 81

Note 7 – Pension, Retiree Medical and Savings Plans 85

Note 8 – Debt Obligations 91

Note 9 – Financial Instruments 93

Note 10 – Net Income Attributable to PepsiCo per Common Share 99

Note 11 – Accumulated Other Comprehensive Loss Attributable to PepsiCo 100

Note 12 – Leases 101

Note 13 – Acquisitions and Divestitures 103

Note 14 – Supply Chain Financing Arrangements 104

Note 15 – Supplemental Financial Information 106

Note 16 – Legal Contingencies 107

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 108

GLOSSARY 111

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Our discussion and analysis is intended to help the reader understand our results of operations and financial condition and is provided as an addition to, and should be read in connection with, our consolidated financial statements and the accompanying notes. Definitions of key terms can be found in the glossary. Unless otherwise noted, tabular dollars are presented in millions, except per share amounts. All per share amounts reflect common stock per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Percentage changes are based on unrounded amounts.
Discussion in this Form 10-K includes results of operations and financial condition for 2025 and 2024 and year-over-year comparisons between 2025 and 2024. For discussion on results of operations and financial condition pertaining to 2023 and year-over-year comparisons between 2024 and 2023, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of Exhibit 99.2 to our Current Report on Form 8-K dated July 17, 2025.
OUR BUSINESS
Executive Overview
PepsiCo is a leading global beverage and convenient food company with a complementary portfolio of brands, including Lay’s, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker and SodaStream. Through our operations, authorized bottlers, contract manufacturers, and other third parties, we make, market, distribute, and sell a wide array of beverages and convenient foods, serving customers and consumers in more than 200 countries and territories.
As a global company with strong local connections, we faced many of the same challenges in 2025 as our consumers, customers, and competitors worldwide. These included ongoing supply chain disruptions; tariffs; persistent inflationary pressures; evolving consumer consumption patterns and preferences; an intensely competitive business environment, including the increased adoption of artificial intelligence technologies; the continued expansion of e-commerce in a rapidly changing retail landscape, including customers moving away from DSD systems; the need for further innovation and collaboration as we progress toward our ambitious packaging and other goals; ongoing macroeconomic and political volatility; and an increasingly complex regulatory environment.
In response to these challenges, we have continued to adapt and innovate, reinforcing our resilience and continued focus on growth. We are focused on improving our productivity, optimizing our operations and harnessing our scale and capabilities across our markets and further elevating the interests, occasions, and channels of consumers in our strategies to lead and shape the future of our categories. This is underpinned by our pep+ (PepsiCo Positive) transformation, now in its fifth year.
A Bold Ambition: Against this backdrop, we have a clear set of priorities: reigniting our North America business by combining operations where it makes the most sense and using the savings to support meaningful investments in our brands; increasing the size, presence and scale of our International business, with a focus on capturing growth in large and developing markets; and working to grow our away-from-home business by expanding our availability and extending into new occasions.
Laying the Groundwork: Since 2018, we have made significant investments in the business to adapt to the changing landscape. This includes increasing investments to strengthen our brands, from transforming our portfolio through innovation and acquisitions, to foundational investments in technology and artificial intelligence to position ourselves to be fit for the future, building a set of high impact commercial, operational, and digital capabilities; expanding and updating our manufacturing footprint to enable geographic growth and capture future demand; right-sizing and modernizing our warehousing and distribution capacity; and transforming our operating model to become more agile, efficient and responsive to the consumer.

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Big Changes to Big Things: Guided by pep+, we continue to work to reshape our portfolio to fit today’s world. That includes: reducing added sugar, sodium and saturated fat in core brands like Lay’s and Gatorade; advancing efforts to remove artificial colors and flavors in brands like Lay’s, Cheetos, and Doritos; adding new products with functional benefits, such as Pepsi Prebiotic Cola; and welcoming popular brands like Siete, Sabra and poppi.
We continued to expand our away-from-home business into new occasions. The successful Walking Taco platform is thriving in stadiums, arenas, and parks across the United States, while our “Food Deserves Pepsi” campaign and the “Pepsi Zero Sugar Taste Challenge” have driven higher brand awareness and contributed positively to our performance.
We are becoming a more deeply integrated, more productive organization. This has been one of our biggest priorities over the past year. Since we shifted our operating model at the start of 2025, we have worked hard to be more agile, simpler and more unified. From sharing global services, to streamlining processes, to launching our first new corporate brand identity in nearly 25 years, we are making One PepsiCo real. In North America, we are carefully evaluating an integrated model for our food and beverage supply chains, go-to-market, and commercial capabilities and intend to take a nuanced approach factoring in key components such as return on investment, scale and market share. Our Global Capability Centers now support multiple functions, enabling us to centralize information, reduce duplicative work, and share best practices across the organization.
We are building smarter systems with technologies like artificial intelligence to better serve our customers and consumers, so we can have the right products, at the right place, at the right price. Through our collaborations with cutting-edge technology providers, we are using artificial intelligence to reimagine our go-to-market model, enhance customer support, and empower sales teams to focus on strategic growth. This allows us to unify data, gain real-time inventory visibility, and provide faster, more responsive customer service.
We are becoming more resilient through pep+. pep+ remains central to our strategy, ensuring that we continue to create value for shareholders, customers and consumers, while doing what is right for communities and the planet. In 2025, we stepped up our efforts around key pillars like regenerative agriculture and water use efficiency, with the aim to make a positive impact in markets around the world.

Our Operations
See “Item 1. Business” for information on our segments and a description of our distribution network, ingredients and other supplies, brands and intellectual property rights, seasonality, customers, competition, research and development, regulatory matters and human capital. In addition, see Note 1 to our consolidated financial statements for financial information about our segments and geographic areas.

Other Relationships
Certain members of our Board also serve on the boards of certain vendors and customers. These Board members do not participate in our vendor selection and negotiations nor in our customer negotiations. Our transactions with these vendors and customers are in the normal course of business and are consistent with terms negotiated with other vendors and customers. In addition, certain of our employees serve on the boards of Pepsi Bottling Ventures LLC and other affiliated companies of PepsiCo and do not receive incremental compensation for such services.

Our Business Risks
Risks Associated with Commodities and Our Supply Chain
Many of the commodities used in the production and transportation of our products are purchased in the open market. The prices we pay for such items are subject to fluctuation, and we manage this risk through

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the use of fixed-price contracts and purchase orders, pricing agreements and derivative instruments, including swaps and futures. A number of external factors, including volatile geopolitical conditions, the inflationary cost environment, import/export restrictions and tariffs, adverse weather conditions and supply chain disruptions, have impacted and may continue to impact commodity, transportation and labor costs. When prices increase, we may or may not pass on such increases to our customers, which may result in reduced volume, revenue, margins and operating results.
See Note 9 to our consolidated financial statements for further information on how we manage our exposure to commodity prices.
Risks Associated with Climate Change
Certain jurisdictions in which our products are made, manufactured, distributed or sold have either imposed, or are considering imposing, new or increased legal and regulatory requirements to reduce or mitigate the potential effects of climate change, including regulation of greenhouse gas emissions and potential carbon pricing programs. These new or increased legal or regulatory requirements, along with initiatives to meet our sustainability goals, could result in significant increased costs and additional investments in facilities and equipment. However, we are unable to predict the scope, nature and timing of any new or increased environmental laws and regulations and therefore cannot predict the ultimate impact of such laws and regulations on our business or financial results. We continue to monitor existing and proposed laws and regulations in the jurisdictions in which our products are made, manufactured, distributed and sold and to consider actions we may take to potentially mitigate the unfavorable impact, if any, of such laws or regulations.
Risks Associated with International Operations
We are subject to risks in the normal course of business that are inherent to international operations. During the periods presented in this report, volatile economic, political, social and geopolitical conditions, civil unrest and wars and other military conflicts, acts of terrorism and natural disasters and other catastrophic events in certain markets in which our products are made, manufactured, distributed or sold, including in Argentina, Brazil, China, Mexico, the Middle East (including Egypt) , Russia, Turkey and Ukraine, continue to result in challenging operating environments and have resulted in and could continue to result in changes in how we operate in certain of these markets. Debt and credit issues, currency controls or fluctuations, sanctions and export controls in certain of these international markets (including restrictions on the transfer of funds to and from certain markets) have also continued to impact our operations in certain of these international markets. We continue to closely monitor the economic, operating and political environment in the markets in which we operate, including risks of additional impairments or write-offs and currency fluctuation, and to identify actions to potentially mitigate any unfavorable impacts on our future results.
Our operations in Russia accounted for 5% and 4% of our consolidated net revenue for the years ended December 27, 2025 and December 28, 2024, respectively. Russia accounted for 5% and 3% of our consolidated assets, 20% and 10% of our consolidated cash and cash equivalents, and 39% and 41% of our accumulated currency translation adjustment loss as of December 27, 2025 and December 28, 2024 , respectively.
See Notes 1 and 4 to our consolidated financial statements for a discussion of i mpairment and other charges recognized in the years ended December 27, 2025, December 28, 2024, and December 30, 2023 .
Risks Associated with Tariffs
The imposition of tariffs (including U.S. tariffs imposed or threatened to be imposed on China, the European Union, Canada and Mexico and other countries and any tariffs imposed by such countries) have impacted and could continue to impact our supply chain resulting in increased input costs, including the

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cost of certain raw materials and packaging. The impact of tariffs will continue to vary, including based on where inputs are sourced from and shipped to. In addition, any supply chain constraints, inflationary impacts or reduced consumer demand for our products as a result of such tariffs or ongoing macroeconomic uncertainty have impacted and could continue to impact our results. We will continue to evaluate the nature and extent of the impact of these tariffs on our business and to identify actions to potentially mitigate, where possible, any unfavorable impacts on our future results.
Imposition of Taxes and Regulations on our Products
Certain jurisdictions in which our products are made, manufactured, distributed or sold have either imposed, or are considering imposing, new or increased taxes or regulations on the manufacture, distribution or sale of our products or their packaging, ingredients or substances contained in, or attributes of, our products or their packaging, commodities used in the production of our products or their packaging or the recyclability or recoverability of our packaging. These taxes and regulations vary in scope and form. For example, some taxes apply to all beverages, including non-caloric beverages, while others apply only to beverages with a caloric sweetener (e.g., sugar). Further, some regulations apply to all products using certain types of packaging (e.g., plastic), while others are designed to increase the sustainability of packaging, encourage waste reduction and increased recycling rates or facilitate the waste management process or restrict the sale of products in certain packaging. In addition, certain jurisdictions in which our snack products are sold have either imposed or are considering imposing, new or increased taxes on the manufacture, distribution or sale of certain of our snack products as a result of ingredients (such as sugar, sodium or saturated fat) contained in our products.
We sell a wide variety of beverages and convenient foods in more than 200 countries and territories and the profile of the products we sell, the amount of revenue attributable to such products and the type of packaging used vary by jurisdiction. Because of this, we cannot predict the scope or form potential taxes, regulations or other limitations on our products or their packaging may take, and therefore cannot predict the impact of such taxes, regulations or limitations on our financial results. In addition, taxes, regulations and limitations may impact us and our competitors differently. We expect continued scrutiny of certain ingredients and substances present in certain of our products and packaging. We continue to monitor existing and proposed taxes and regulations in the jurisdictions in which our products are made, manufactured, distributed and sold and to consider actions we may take to potentially mitigate the unfavorable impact, if any, of such taxes, regulations or limitations, including advocating alternative measures with respect to the imposition, form and scope of any such taxes, regulations or limitations.
OECD Model Global Minimum Tax
Numerous countries, including European Union member states, have enacted or are expected to enact legislation incorporating the OECD model rules for a global minimum tax rate of 15% with widespread implementation expected by the end of 2026. As the legislation becomes effective in countries in which we do business, our taxes will increase and negatively impact our provision for income taxes.
Retail Landscape
Our industry continues to be affected by disruption of the retail landscape, including the continued growth in sales through e-commerce websites and mobile commerce applications, including through subscription services, the integration of physical and digital operations among retailers and the international expansion of hard discounters. We have seen and expect to continue to see a further shift to e-commerce, online-to-offline and other online purchasing by consumers. We continue to monitor changes in the retail landscape and seek to identify actions we may take to build our global e-commerce and digital capabilities, such as expanding our direct-to-consumer business, and distribute our products effectively through all existing and emerging channels of trade and potentially mitigate any unfavorable impacts on our future results.

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Changing dynamics at the retail level have also impacted and may continue to impact our ability to grow in certain jurisdictions. In this changing retail landscape, retailers and buying groups are shifting traditional value propositions, removing our products or otherwise reducing shelf space allocated to our products and focusing on introducing and developing private-label brands. We have seen and expect to continue to see retailers and buying groups impact our ability to compete in these jurisdictions. We continue to monitor our relationships with retailers and buying groups and seek to identify actions we may take to maintain mutually beneficial relationships and resolve any significant disputes and potentially mitigate any unfavorable impacts on our future results.
See also “Item 1A. Risk Factors,” “Executive Overview” above and “Market Risks” below for more information about these risks and the actions we have taken to address key challenges.
Risk Management Framework
The achievement of our strategic and operating objectives involves risks, many of which evolve over time. To identify, assess, prioritize, address, manage, monitor and communicate these risks across the Company’s operations and foster a corporate culture of integrity and risk awareness, we leverage an integrated risk management framework. This framework includes the following:
• PepsiCo’s Board has oversight responsibility for PepsiCo’s integrated risk management framework. One of the Board’s primary responsibilities is overseeing and interacting with senior management with respect to key aspects of the Company’s business, including risk assessment and risk mitigation of the Company’s top risks. Throughout the year, the Board and relevant Committees of the Board receive updates from management with respect to various enterprise risk management issues and dedicate a portion of their meetings to reviewing and discussing specific risk topics in greater detail, including risks related to cybersecurity, food safety, sustainability, human capital management and supply chain and commodity inflation. The Board receives and provides feedback on regular updates from management regarding the Company’s top risks, including updates from members of management responsible for overseeing impacted areas (for example, the Chief Strategy and Transformation Officer and Chief Information Security Officer), governance processes associated with managing these risks, the status of projects to strengthen the Company’s risk mitigation efforts and recent incidents impacting the industry and threat landscape. Given that cybersecurity risks can impact various areas of responsibility of the Committees of the Board, the Board believes it is useful and effective for the full Board to maintain direct oversight over cybersecurity matters. In evaluating top risks, the Board and management consider short-, medium- and long-term potential impacts on the Company’s business, financial condition and results of operations, including looking at the internal and external environment when evaluating risks, risk amplifiers and emerging trends, and considers the risk horizon as part of prioritizing the Company’s risk mitigation efforts. The Board receives updates through presentations, memos and other written materials, teleconferences and other appropriate means of communication, with numerous opportunities for discussion and feedback, and continuously evaluates its approach in addressing top risks as circumstances evolve. For example, as part of risk updates to the Board and relevant Committees during 2025, the Board or its relevant Committee were provided updates on the impact of disruptive events, including geopolitical events and tensions in certain international markets. The Board also receives periodic updates from external experts and advisers on global macroeconomic trends and conditions that may impact the Company’s strategy and financial performance, including geopolitical conflicts, economic instability, labor market trends, changing consumer behavior, retail disruption and digitalization.

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The Board has tasked designated Committees of the Board with oversight of certain categories of risk management, and the Committees report to the Board regularly on these matters.
◦ The Audit Committee of the Board reviews and assesses the guidelines and policies governing PepsiCo’s risk management and oversight processes, and assists the Board’s oversight of financial, compliance and employee safety risks facing PepsiCo. The Audit Committee also assists the Board’s oversight of the Company’s compliance with legal and regulatory requirements and the Chief Compliance & Ethics Officer, who reports to the General Counsel, meets regularly with the Audit Committee, including in executive session without management present;
◦ The Compensation Committee of the Board reviews PepsiCo’s employee compensation policies and practices to assess whether such policies and practices could lead to unnecessary risk-taking behavior;
◦ The Nominating and Corporate Governance Committee assists the Board in its oversight of the Company’s governance structure and other corporate governance matters, including succession planning; and
◦ The Sustainability and Public Policy Committee of the Board assists the Board in its oversight of PepsiCo’s policies, programs and related risks that concern key sustainability (including climate change), inclusion and public policy matters.
• The PepsiCo Risk Committee (PRC) meets regularly to identify, assess, prioritize and address top strategic, financial, operating, compliance, safety, reputational and other risks. The PRC is also responsible for reporting progress on our risk mitigation efforts to the Board and designated Committees. The PRC is comprised of a cross-functional, geographically diverse, senior management group, including PepsiCo’s Chairman of the Board of Directors and Chief Executive Officer, Chief Financial Officer, General Counsel, Region Chief Executive Officers, and the heads of Enterprise Risk, Corporate Affairs, Human Resources, Research & Development, Information Technology, Sustainability, Strategy, Transformation, International Beverages, Commercial, Global Operations and Marketing;
• Segment and key market risk committees, comprised of cross-functional senior management teams, meet regularly to identify, assess, prioritize and address segment and market-specific business risks;
• PepsiCo’s Risk Management Office, which manages the overall risk management process, provides ongoing guidance, tools and analytical support to the PRC and the segment and key market and function risk committees, identifies and assesses potential risks and facilitates ongoing communication between the parties, as well as with PepsiCo’s Board, the Audit Committee of the Board and other Committees of the Board;
• PepsiCo’s Internal Audit Department evaluates the ongoing effectiveness of our key internal controls through periodic audit and review procedures; and
• PepsiCo’s Compliance & Ethics and Law Departments lead and coordinate our compliance policies and practices.
• PepsiCo’s Disclosure Committee, comprised of the General Counsel, Controller and heads of Internal Audit, Financial Planning & Analysis and Investor Relations, evaluates information from PepsiCo’s integrated risk management framework as part of the Disclosure Committee’s monitoring of the integrity and effectiveness of the Company’s disclosure controls and procedures. PepsiCo’s risk oversight processes and disclosure controls and procedures are

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designed to appropriately escalate key risks to the Board as well as to analyze potential risks for disclosure.
Market Risks
We are exposed to market risks arising from adverse changes in:
• commodity prices, affecting the cost of our raw materials and energy;
• foreign exchange rates and currency restrictions; and
• interest rates.
In the normal course of business, we manage commodity price, foreign exchange and interest rate risks through a variety of strategies, including productivity initiatives, global purchasing programs and hedging. Ongoing productivity initiatives involve the identification and effective implementation of meaningful cost-saving opportunities or efficiencies, including the use of derivatives. Our global purchasing programs include fixed-price contracts and purchase orders and pricing agreements. See “Item 1A. Risk Factors” for further discussion of our market risks.
The fair value of our derivatives fluctuates based on market rates and prices. The sensitivity of our derivatives to these market fluctuations is discussed below. See Note 9 to our consolidated financial statements for further discussion of these derivatives and our hedging policies. The fair value of our indefinite-lived intangible assets is impacted by changes in market conditions, including interest rates and inflationary, deflationary and recessionary conditions. See “Our Critical Accounting Policies and Estimates” for a discussion of the exposure of our goodwill and other intangible assets and pension and retiree medical plan assets and liabilities to risks related to market fluctuations.
Inflationary, deflationary and recessionary conditions impacting these market risks also impact the demand for and pricing of our products. See “Item 1A. Risk Factors” for further discussion.
Commodity Prices
Our commodity derivative contracts had a total notional value of $1.5 billion as of December 27, 2025 and $1.4 billion as of December 28, 2024. At the end of 2025, the potential change in fair value of commodity derivative contracts, assuming a 10% decrease in the underlying commodity price, would have decreased our net unrealized gains in 2025 by $155 million, which would generally be offset by a reduction in the cost of the underlying commodity purchases.
Foreign Exchange
Our operations outside of the United States generated 44% of our consolidated net revenue in 2025, with Mexico, Russia, Canada, China, the United Kingdom, Brazil and South Africa, collectively, comprising 25% of our consolidated net revenue in 2025. As a result, we are exposed to foreign exchange risks in the international markets in which our products are made, manufactured, distributed or sold. Additionally, we are exposed to foreign exchange risk from net investments in foreign subsidiaries, foreign currency purchases, foreign currency assets and liabilities created in the normal course of business. During 2025, unfavorable foreign exchange had a net nominal impact on net revenue performance primarily due to declines in the Mexican peso and Turkish lira, offset by an appreciation of the Russian ruble. Currency declines against the U.S. dollar which are not offset could adversely impact our future financial results.
Our foreign exchange derivative contracts had a total notional value of $3.1 billion as of both December 27, 2025 and December 28, 2024. At the end of 2025, we estimate that an unfavorable 10% change in the underlying exchange rates would have increased our net unrealized losses in 2025 by $308 million, which would be significantly offset by an inverse change in the fair value of the underlying exposure. Subsequent to December 27, 2025, we executed $1.6 billion of foreign exchange contracts

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maturing in February 2026 and designated them as net investment hedges to partially offset the effects of foreign currency on our investments in certain of our foreign subsidiaries.
Our cross-currency swap contracts had a total notional value of $1.7 billion as of December 27, 2025 and $1.2 billion as of December 28, 2024. At the end of 2025, we estimate that an unfavorable 10% change in the underlying exchange rates would have increased our net unrealized losses in 2025 by $173 million, which would be significantly offset by an inverse change in the fair value of the underlying exposure.
The total notional amount of our debt instruments designated as net investment hedges was $4.4 billion as of December 27, 2025 and $2.9 billion as of December 28, 2024. Subsequent to December 27, 2025, we designated $4.5 billion of existing euro denominated debt as net investment hedges to partially offset the effects of foreign currency on our investments in certain of our foreign subsidiaries.
Interest Rates
Our interest rate swap contracts had a total notional value of $2.0 billion as of both December 27, 2025 and December 28, 2024. Assuming year-end 2025 investment levels and variable rate debt, a 1-percentage-point increase in interest rates would have decreased our net interest expense in 2025 by $36 million due to higher cash and cash equivalents and short-term investments levels, as compared with our variable rate debt.

OUR FINANCIAL RESULTS
Results of Operations — Consolidated Review
Volume
Physical or unit volume is one of the key metrics management uses internally to make operating and strategic decisions, including the preparation of our annual operating plan and the evaluation of our business performance. We believe volume provides additional information to facilitate the comparison of our historical operating performance and underlying trends, and provides additional transparency on how we evaluate our business because it measures demand for our products at the consumer level. Unit volume performance adjusts for the impacts of acquisitions and divestitures. Acquisitions and divestitures, when used in this report, reflect mergers and acquisitions activity, as well as divestitures and other structural changes. Further, unit volume performance excludes the impact of a 53 rd reporting week, where applicable. Our fiscal year ends on the last Saturday of each December, resulting in an additional reporting week every five or six years (53 rd reporting week).
Beverage volume includes volume of concentrate sold to independent bottlers and volume of finished products bearing company-owned or licensed trademarks and allied brand products and joint venture trademarks sold by company-owned bottling operations. Beverage volume also includes volume of finished products bearing company-owned or licensed trademarks sold by our noncontrolled affiliates. Concentrate volume sold to independent bottlers is reported in concentrate shipments and equivalents (CSE), whereas finished beverage product volume is reported in bottler case sales (BCS). Both CSE and BCS convert all beverage volume to an 8-ounce-case metric. Typically, CSE and BCS are not equal in any given period due to seasonality, timing of product launches, product mix, bottler inventory practices and other factors. While our net revenue is not entirely based on BCS volume due to the independent bottlers in our supply chain, we believe that BCS is a better measure of the consumption of our beverage products. PBNA, IB Franchise and EMEA, either independently or in conjunction with third parties, make, market, distribute and sell ready-to-drink tea products through a joint venture with Unilever (under the Lipton brand name), and PBNA, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink coffee products through a joint venture with Starbucks.
Convenient food volume includes volume sold by us and our noncontrolled affiliates of convenient food products bearing company-owned or licensed trademarks. Internationally, we measure convenient food

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product volume in kilograms, while in North America we measure convenient food product volume in pounds.
Consolidated Net Revenue and Operating Profit

  2025 2024 Change
Net revenue $ 93,925   $ 91,854  2   %
Operating profit $ 11,498   $ 12,887  (11) %
Operating margin 12.2   % 14.0  % (1.8)

See “Results of Operations – Segment Review” for a tabular presentation and discussion of key drivers of net revenue.
Operating profit decreased 11%, primarily driven by certain operating cost increases, impairment charges related to the Rockstar brand, a decline in organic volume, a 5-percentage-point impact of higher commodity costs and higher acquisition and divestiture-related charges. These impacts were partially offset by productivity savings and effective net pricing. Additionally, a favorable impact of prior-year impairment and other charges associated with our TBG investment and receivables related to the sale of Tropicana, Naked and other select juice brands (Juice Transaction) and lower advertising and marketing expenses contributed to the decline.

Other Consolidated Results  

  2025 2024 Change
Other pension and retiree medical benefits expense $ 133   $ 22  $ 111  
Net interest expense and other $ 1,121   $ 919  $ 202  
Annual tax rate 19.0   % 19.4  %
Net income attributable to PepsiCo $ 8,240   $ 9,578  (14) %
Net income attributable to PepsiCo per common share – diluted $ 6.00   $ 6.95  (14) %

Other pension and retiree medical benefits expense increased $111 million, primarily reflecting recognition of fixed income losses on plan assets and the impact of the freeze of benefit accruals to U.S. salaried participants effective December 31, 2025. See Note 7 to our consolidated financial statements for further information.
Net interest expense and other increased $202 million, due to higher average debt balances, higher interest rates on average debt balances and lower interest rates on average cash balances, partially offset by higher average cash balances.
The reported tax rate decreased 0.4 percentage points, primarily reflecting the release of federal interest accruals.

Results of Operations — Segment Review
See “Our Business Risks,” “Non-GAAP Measures” and “Items Affecting Comparability” for a discussion of items to consider when evaluating our results and related information regarding measures not in accordance with U.S. Generally Accepted Accounting Principles (GAAP).
In the discussions of net revenue and operating profit below, “effective net pricing” reflects the year-over-year impact of discrete pricing actions, sales incentive activities and mix resulting from selling varying products in different package sizes and in different countries.

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Net Revenue and Organic Revenue Performance
Organic revenue performance is a non-GAAP financial measure. For a description of and further information regarding this measure, see “Non-GAAP Measures.”

2025
Impact of Impact of
Reported
% Change, GAAP measure Foreign exchange translation Acquisitions and divestitures Organic
% Change, non-GAAP measure (a )
Organic volume (b)
Effective net pricing
PFNA —   % —  (2) (2) % (2) 1 
PBNA 1.5   % —  —  1   % (3.5) 5 
IB Franchise 2   % —  —  3   % —  2 
EMEA 8   % (2.5) —  6   % (3) 9 
LatAm Foods —   % 5  —  4.5   % —  4 
Asia Pacific Foods 2   % 1  (1) 1.5   % 5  (3)
Total 2   % —  (1) 2   % (2) 4 

(a) Amounts may not sum due to rounding.
(b) In certain instances, the impact of organic volume change on net revenue performance differs from the unit volume change disclosed in the following segment discussions due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise beverage businesses, temporary timing differences between BCS and CSE. We report net revenue from our franchise beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.

Operating Profit, Operating Profit Adjusted for Items Affecting Comparability and Operating Profit Performance Adjusted for Items Affecting Comparability on a Constant Currency Basis
Operating profit adjusted for items affecting comparability and operating profit performance adjusted for items affecting comparability on a constant currency basis are both non-GAAP financial measures. For a description of and further information regarding these measures, see “Non-GAAP Measures” and “Items Affecting Comparability.”

2025
PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Corporate unallocated expenses Total
Reported, GAAP measure $ 6,173  $ 1,089  $ 1,769  $ 2,106  $ 2,010  $ 369  $ (2,018) $ 11,498 
Items Affecting Comparability (a)

Mark-to-market net impact —  —  —  —  —  —  (1) (1)
Restructuring and impairment charges 344  281  14  195  52  12  66  964 
Acquisition and divestiture-related charges 28  422  —  —  —  3  —  453 
Impairment and other charges —  1,523  73  270  —  80  —  1,946 
Indirect tax impact —  —  —  —  82  —  —  82 
Pension and retiree medical-related impact —  (30) —  —  —  —  —  (30)
Core, non-GAAP measure 6,545  3,285  1,856  2,571  2,144  464  (1,953) 14,912 
Impact of foreign exchange translation 7  4  9  (104) 117  3  —  36 
Core Constant Currency, non-GAAP measure $ 6,552  $ 3,289  $ 1,865  $ 2,467  $ 2,261  $ 467  $ (1,953) $ 14,948 

Reported Operating Profit % Change, GAAP measure (7) % (53) % 21  % 7  % (2) % (2) % 6  % (11) %
Core Operating Profit % Change, non-GAAP measure (6) % 6  % 9  % 15  % 2  % 19  % 7  % 1.5  %
Core Constant Currency Operating Profit % Change, non-GAAP measure (6) % 6  % 9  % 10  % 8  % 20  % 7  % 2  %

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2024
PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Corporate unallocated expenses Total
Reported, GAAP measure $ 6,619  $ 2,302  $ 1,462  $ 1,971  $ 2,052  $ 377  $ (1,896) $ 12,887 
Items Affecting Comparability (a)

Mark-to-market net impact —  —  —  —  —  —  (25) (25)
Restructuring and impairment charges 161  238  24  116  49  9  101  698 
Acquisition and divestiture-related charges 9  8  —  —  —  5  —  22 
Impairment and other charges 9  556  4  145  —  —  —  714 
Indirect tax impact —  —  218  —  —  —  —  218 
Product recall-related impact 184  —  —  —  —  —  —  184 
Core, non-GAAP measure $ 6,982  $ 3,104  $ 1,708  $ 2,232  $ 2,101  $ 391  $ (1,820) $ 14,698 

(a) See “Items Affecting Comparability” for further information.

PFNA
Net revenue increased slightly, primarily driven by the favorable impact of acquisitions and effective net pricing, partially offset by a decrease in organic volume.
Unit volume declined 2%, driven by a 3% decrease in savory snacks volume.
Operating profit decreased 7%, primarily reflecting certain operating cost increases, including strategic initiatives, higher restructuring charges and the decrease in organic volume. These impacts were partially offset by productivity savings and a favorable impact of the prior-year charges associated with a previously announced voluntary recall of certain bars and cereals in our PFNA segment (Quaker Recall).

PBNA
Net revenue increased 1.5%, primarily driven by effective net pricing, partially offset by an organic volume decline.
Unit volume declined 3%, driven by a 6% decline in non-carbonated beverage volume and a slight decline in CSD volume.
Operating profit decreased 53%, primarily reflecting impairment charges related to the Rockstar brand. Operating profit also decreased due to certain operating cost increases, acquisition and divestiture-related charges related to our VNGR Beverage, LLC (poppi) acquisition, the decline in organic volume and a 5-percentage-point impact of higher commodity costs, driven by a 6-percentage-point impact of tariffs. These impacts were partially offset by a favorable impact of prior-year impairment and other charges associated with our TBG investment and Juice Transaction-related receivables, the effective net pricing, productivity savings, and lower advertising and marketing expenses.

IB Franchise
Net revenue increased 2%, primarily reflecting effective net pricing.
Unit volume grew 1.5%, primarily reflecting growth in the Middle East, China and Pakistan.
Operating profit increased 21%, primarily reflecting a favorable impact of a prior-year indirect tax reserve, the net revenue growth and lower advertising and marketing costs, partially offset by an impairment charge related to the Rockstar brand.

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EMEA
Net revenue increased 8%, primarily reflecting effective net pricing and a 2.5-percentage-point impact of favorable foreign exchange translation, partially offset by an organic volume decline.
Convenient food unit volume declined 5%, primarily reflecting a decline in South Africa.
Beverage unit volume grew slightly, primarily reflecting growth in the Middle East, Germany, Poland and Turkey, partially offset by declines in South Africa and Russia.
Operating profit increased 7%, primarily reflecting the effective net pricing, productivity savings, a favorable impact of prior-year impairment and other charges associated with our TBG investment and Juice Transaction-related receivables and a 5-percentage-point impact of favorable foreign exchange translation. These impacts were partially offset by certain operating cost increases, a 22-percentage-point impact of higher commodity costs, primarily dairy, potatoes and cooking oil, an impairment charge related to the Rockstar brand and higher restructuring charges.

LatAm Foods
Net revenue decreased slightly, primarily reflecting a 5-percentage-point impact of unfavorable foreign exchange translation, partially offset by effective net pricing.
Unit volume grew 1%, primarily reflecting growth in Brazil, Peru, Colombia and Argentina, partially offset by a decline in Mexico.
Operating profit decreased 2%, primarily reflecting certain operating cost increases, a 6-percentage-point impact each of higher commodity costs and unfavorable foreign exchange translation and an unfavorable impact of an indirect tax audit settlement, partially offset by productivity savings and the effective net pricing.

Asia Pacific Foods
Net revenue increased 2%, primarily reflecting organic volume growth, partially offset by unfavorable net pricing.
Unit volume grew 4%, primarily reflecting growth in India, Thailand and Australia, partially offset by a decline in China.
Operating profit decreased 2%, primarily reflecting certain operating cost increases, an impairment charge related to the Be & Cheery brand and the unfavorable net pricing. These impacts were partially offset by productivity savings, the organic volume growth, lower advertising and marketing costs and a 5-percentage-point impact of lower commodity costs.

Non-GAAP Measures
Certain financial measures contained in this Form 10-K adjust for the impact of specified items and are not in accordance with GAAP. We use non-GAAP financial measures internally to make operating and strategic decisions, including the preparation of our annual operating plan, evaluation of our overall business performance and as a factor in determining compensation for certain employees. We believe presenting non-GAAP financial measures in this Form 10-K provides additional information to facilitate comparison of our historical operating results and trends in our underlying operating results and provides additional transparency on how we evaluate our business. We also believe presenting these measures in this Form 10-K allows investors to view our performance using the same measures that we use in evaluating our financial and business performance and trends.
We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business

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performance or trends. Examples of items for which we may make adjustments include: amounts related to mark-to-market gains or losses (non-cash); charges related to restructuring plans; charges associated with acquisitions and divestitures; gains associated with divestitures; asset impairment charges (non-cash); product recall-related impact; pension and retiree medical-related amounts, including all settlement and curtailment gains and losses; charges or adjustments related to the enactment of new laws, rules or regulations, such as tax law changes; amounts related to the resolution of tax positions; tax benefits related to reorganizations of our operations; and debt redemptions, cash tender or exchange offers. See below and “Items Affecting Comparability” for a description of adjustments to our GAAP financial measures in this Form 10-K. 
Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented by other companies.
The following non-GAAP financial measures contained in this Form 10-K are discussed below:
Organic revenue performance
We define organic revenue performance as a measure that adjusts for the impacts of foreign exchange translation (on a constant currency basis, as defined below), acquisitions and divestitures, and every five or six years, the impact of the 53 rd reporting week. Beginning in 2025, on a prospective basis, we are also applying the constant currency calculation for our subsidiaries operating in highly inflationary economies. Adjusting for acquisitions and divestitures reflects mergers and acquisitions activity, as well as divestitures and other structural changes, including changes in ownership or control in consolidated subsidiaries and nonconsolidated equity investees. We believe organic revenue performance provides useful information in evaluating the results of our business because it adjusts for items that we believe are not indicative of ongoing performance or that we believe impact comparability with the prior year.
See “Net Revenue and Organic Revenue Performance” in “Results of Operations – Segment Review” for further information.
Cost of sales, gross profit, selling, general and administrative expenses, impairment of intangible assets, other pension and retiree medical benefits expense/income, provision for income taxes and net income attributable to PepsiCo, each adjusted for items affecting comparability, operating profit and net income attributable to PepsiCo per common share – diluted, each adjusted for items affecting comparability, and the corresponding constant currency growth rates
These measures exclude the net impact of mark-to-market gains and losses on centrally managed commodity derivatives that do not qualify for hedge accounting, restructuring and impairment charges related to our 2019 Multi-Year Productivity Plan (2019 Productivity Plan), charges associated with our acquisitions and divestitures, impairment and other charges/credits, indirect and income tax impacts, product recall-related impact and the impact of settlement, curtailment and certain other gains and losses related to pension and retiree medical plans (see “Items Affecting Comparability” for a detailed description of each of these items). We also evaluate performance on operating profit and net income attributable to PepsiCo per common share – diluted, each adjusted for items affecting comparability, on a constant currency basis, which measure our financial results assuming constant foreign currency exchange rates used for translation based on the rates in effect for the comparable prior-year period. In order to compute our constant currency results, we multiply or divide, as appropriate, our current-year U.S. dollar results by the current-year average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior-year average foreign exchange rates. In addition, beginning in 2025, on a prospective basis, we are also applying the constant currency calculation for our subsidiaries operating in highly inflationary economies. We believe these measures provide useful information in evaluating the

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results of our business because they exclude items that we believe are not indicative of our ongoing performance or that we believe impact comparability with the prior year.
Free cash flow
We define free cash flow as net cash from operating activities less capital spending, plus sales of property, plant and equipment. Since net capital spending is essential to our product innovation initiatives and maintaining our operational capabilities, we believe that it is a recurring and necessary use of cash. As such, we believe investors should also consider net capital spending when evaluating our cash from operating activities. Free cash flow is used by us primarily for acquisitions and financing activities, including debt repayments, dividends and share repurchases. Free cash flow is not a measure of cash available for discretionary expenditures since we have certain non-discretionary obligations such as debt service that are not deducted from the measure.
See “Free Cash Flow” in “Our Liquidity and Capital Resources” for further information.
Return on invested capital (ROIC) and net ROIC, excluding items affecting comparability
We define ROIC as net income attributable to PepsiCo plus interest expense after-tax divided by the sum of quarterly average debt obligations and quarterly average common shareholders’ equity. Although ROIC is a common financial metric, numerous methods exist for calculating ROIC. Accordingly, the method used by management to calculate ROIC may differ from the methods other companies use to calculate their ROIC.
We believe this metric serves as a measure of how well we use our capital to generate returns. In addition, we use net ROIC, excluding items affecting comparability, to compare our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that we believe are not indicative of our ongoing performance and reflects how management evaluates our operating results and trends. We define net ROIC, excluding items affecting comparability, as ROIC, adjusted for quarterly average cash, cash equivalents and short-term investments, after-tax interest income and items affecting comparability. We believe the calculation of ROIC and net ROIC, excluding items affecting comparability, provides useful information to investors and is an additional relevant comparison of our performance to consider when evaluating our capital allocation efficiency.
See “Return on Invested Capital” in “Our Liquidity and Capital Resources” for further information.

Items Affecting Comparability
Our reported financial results in this Form 10-K are impacted by the following items in each of the following years:  

2025

Cost of sales Gross profit Selling, general and administrative expenses Impairment of intangible assets Operating profit Other pension and retiree medical benefits (expense)/income

Provision
for income taxes (a)
Net income attributable to PepsiCo
Reported, GAAP measure $ 43,066   $ 50,859   $ 37,368   $ 1,993   $ 11,498   $ (133) $ 1,949   $ 8,240  
Items Affecting Comparability
Mark-to-market net impact (3) 3  4  —  (1) —  —  (1)
Restructuring and impairment charges (236) 236  (728) —  964  19  191  792 
Acquisition and divestiture-related charges
(57) 57  (346) (50) 453  —  106  347 
Impairment and other charges —  —  (3) (1,943) 1,946  —  455  1,491 

Indirect and income tax impact (b)
—  —  (82) —  82  —  (29) 111 

Pension and retiree medical-related impact —  —  30  —  (30) 279  53  196 
Core, non-GAAP measure $ 42,770   $ 51,155   $ 36,243   $ —   $ 14,912   $ 165   $ 2,725   $ 11,176  

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2024

Cost of sales Gross profit Selling, general and administrative expenses Impairment of intangible assets Operating profit Other pension and retiree medical benefits (expense)/income Provision for income taxes (a)
Net income attributable to PepsiCo
Reported, GAAP measure $ 41,744  $ 50,110  $ 37,190  $ 33  $ 12,887  $ (22) $ 2,320  $ 9,578 
Items Affecting Comparability
Mark-to-market net impact 26  (26) (1) —  (25) —  (6) (19)
Restructuring and impairment charges (133) 133  (551) (14) 698  29  164  563 
Acquisition and divestiture-related charges
—  —  (22) —  22  —  4  18 
Impairment and other charges —  —  (695) (19) 714  —  184  530 
Indirect and income tax impact (218) 218  —  —  218  —  —  218 
Product recall-related impact (176) 176  (8) —  184  3  44  143 
Pension and retiree medical-related impact
—  —  —  —  —  276  61  215 

Core, non-GAAP measure $ 41,243  $ 50,611  $ 35,913  $ —  $ 14,698  $ 286  $ 2,771  $ 11,246 

(a) Provision for income taxes is the expected tax charge/benefit on the underlying item based on the tax laws and income tax rates applicable to the underlying item in its corresponding tax jurisdiction.
(b) Provision for income taxes includes the impact of an income tax audit settlement in our LatAm Foods segment.

2025 2024 Change
Net income attributable to PepsiCo per common share – diluted, GAAP measure $ 6.00   $ 6.95  (14) %
Mark-to-market net impact —   (0.01)
Restructuring and impairment charges 0.58   0.41 
Acquisition and divestiture-related charges
0.25   0.01 

Impairment and other charges 1.09   0.38 
Indirect and income tax impact 0.08   0.16 
Product recall-related impact —   0.10 
Pension and retiree medical-related impact
0.14   0.16 

Core net income attributable to PepsiCo per common share – diluted, non-GAAP measure $ 8.14   $ 8.16  —   %
Impact of foreign exchange translation —  
Growth in core net income attributable to PepsiCo per common share – diluted, on a constant currency basis, non-GAAP measure —   %

Mark-to-Market Net Impact
We centrally manage commodity derivatives on behalf of our segments. These commodity derivatives include agricultural products, energy and metals. Commodity derivatives that do not qualify for hedge accounting treatment are marked to market each period with the resulting gains and losses recorded in corporate unallocated expenses as either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. These gains and losses are subsequently reflected in segment results when the segments recognize the cost of the underlying commodity in operating profit. Therefore, the segments realize the economic effects of the derivative without experiencing any resulting mark-to-market volatility, which remains in corporate unallocated expenses.

Restructuring and Impairment Charges
2019 Multi-Year Productivity Plan
The 2019 Productivity Plan leverages new technology and business models to further simplify, harmonize and automate processes; re-engineers our go-to-market and information systems, including deploying the right automation for each market; and simplifies our organization and optimizes our manufacturing and supply chain footprint. To build on the successful implementation of the 2019 Productivity Plan, in 2024, we further expanded and extended the plan through the end of 2030 to take advantage of additional opportunities within the initiatives described above. As a result, we expect to incur pre-tax charges of approximately $6.15 billion, including cash expenditures of approximately $5.1 billion. Plan to date through December 27, 2025, we have incurred pre-tax charges of $3.6 billion, including cash expenditures of $2.7 billion. In our 2026 financial results, we expect to incur pre-tax charges of approximately $900

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million, including cash expenditures of approximately $750 million. These charges will be funded primarily through cash from operations. We expect to incur the majority of the remaining pre-tax charges and cash expenditures through 2027, with the balance to be incurred through 2030. Charges include severance and other employee costs, asset impairments and other costs.
See Note 3 to our consolidated financial statements for further information related to our 2019 Productivity Plan. We regularly evaluate productivity initiatives beyond the productivity plan and other initiatives discussed above and in Note 3 to our consolidated financial statements.

Acquisition and Divestiture-Related Charges
Acquisition and divestiture-related charges include merger and integration charges, transaction expenses, such as consulting, advisory and other professional fees, as well as fair value adjustments to contingent consideration and acquired inventory included in the acquisition-date balance sheets. Merger and integration charges include distribution agreement termination fees, impairment of certain acquisition-related intangible assets, employee-related costs, closing costs and other integration costs.
See Note 13 to our consolidated financial statements for further information.

Impairment and Other Charges/Credits
We recognized impairment charges taken primarily as a result of our quantitative assessments of certain of our indefinite-lived intangible assets and related to our investment in TBG. In addition, we recorded allowance for expected credit losses related to outstanding receivables from TBG associated with the Juice Transaction.
See Notes 1, 4 and 9 to our consolidated financial statements for further information.

Indirect and Income Tax Impact
We recognized additional expenses related to an indirect and income tax audit settlement in our LatAm Foods segment and an indirect tax reserve in our IB Franchise segment.
See Note 1 to our consolidated financial statements for further information.

Product Recall-Related Impact
We recognized property, plant and equipment write-offs, employee severance costs and other costs in our PFNA segment associated with a previously announced voluntary recall of certain bars and cereals.
See Note 1 to our consolidated financial statements for further information.

Pension and Retiree Medical-Related Impact
Pension and retiree medical-related impact includes settlement charges due to lump sum distributions to retired or terminated employees and the purchases of group annuity contracts whereby a third-party insurance company assumed the obligation to pay and administer future benefit payments for certain retirees. The settlement charges were triggered when the aggregate of the cumulative lump sum distributions and the annuity contract premium exceeded the total annual service and interest costs. Pension and retiree medical-related impact also includes curtailment losses due to restructuring actions as part of our 2019 Productivity Plan. We also recorded pre-tax income in our PBNA segment associated with pension-related liabilities from previous acquisitions.
See Notes 1 and 7 to our consolidated financial statements for further information.

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Our Liquidity and Capital Resources
We believe that our cash generating capability and financial condition, together with our revolving credit facilities, working capital lines and other available methods of debt financing, such as commercial paper borrowings and long-term debt financing, will be adequate to meet our operating, investing and financing needs, including with respect to our net capital spending plans. Our primary sources of liquidity include cash from operations, proceeds obtained from issuances of commercial paper and long-term debt, and cash and cash equivalents. These sources of cash are available to fund cash outflows that have both a short- and long-term component, including debt repayments and related interest payments; payments for acquisitions; operating leases; purchase, marketing, and other contractual commitments, including capital expenditures and the transition tax liability under the Tax Cuts and Jobs Act (TCJ Act). In addition, these sources of cash fund other cash outflows including anticipated dividend payments and share repurchases. We do not have guarantees or off-balance sheet financing arrangements, including variable interest entities, that we believe could have a material impact on our liquidity. See “Item 1A. Risk Factors,” “Our Business Risks” and Note 8 to our consolidated financial statements for further information.
As of December 27, 2025, cash, cash equivalents and short-term investments in our consolidated subsidiaries outside of Russia that are subject to currency controls or currency exchange restrictions were not material. As of December 27, 2025, Russia accounted for 20% of our consolidated cash and cash equivalents. Our sources and uses of cash were not materially adversely impacted by the cash and cash equivalents held in Russia and, to date, we have not identified any material impact on our liquidity or capital resources as a result of these amounts. See “Our Business Risks” for further information on our operations in Russia.
The TCJ Act imposed a one-time mandatory transition tax on undistributed international earnings. As of December 27, 2025, our mandatory transition tax liability was $965 million, which must be paid in 2026 and will represent our final payment under the provisions of the TCJ Act. See Note 5 to our consolidated financial statements for further discussion of the TCJ Act.
Supply chain financing arrangements did not have a material impact on our liquidity or capital resources in the periods presented and we do not expect such arrangements to have a material impact on our liquidity or capital resources for the foreseeable future. See Note 14 to our consolidated financial statements for further discussion of supply chain financing arrangements.
Furthermore, our cash provided from operating activities is somewhat impacted by seasonality. Working capital needs are impacted by weekly sales, which are generally highest in the third quarter due to seasonal and holiday-related patterns and generally lowest in the first quarter. On a continuing basis, we consider various transactions to increase shareholder value and enhance our business results, including acquisitions, divestitures, joint ventures, dividends, share repurchases, productivity and other efficiency initiatives and other structural changes. These transactions may result in future cash proceeds or payments.
The table below summarizes our cash activity:  

2025 2024
Net cash provided by operating activities $ 12,087   $ 12,507 
Net cash used for investing activities $ (6,879) $ (5,472)
Net cash used for financing activities $ (4,979) $ (7,556)

Operating Activities
In 2025, net cash provided by operating activities was $12.1 billion, compared to $12.5 billion in the prior year. The decrease in operating cash flow primarily reflects increased cash payments for restructuring charges and cash payments for acquisition and divestiture-related charges.

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Investing Activities
In 2025, net cash used for investing activities was $6.9 billion, primarily reflecting net cash paid in connection with our acquisitions of poppi of $1.95 billion and Garza Food Ventures LLC (Siete) of $1.2 billion, as well as net capital spending of $3.9 billion.
In 2024, net cash used for investing activities was $5.5 billion, primarily reflecting net capital spending of $5.0 billion.
See Note 1 to our consolidated financial statements for further discussion of capital spending by segment and see Note 13 to our consolidated financial statements for further discussion of our acquisitions.
We regularly review our plans with respect to net capital spending and believe that we have sufficient liquidity to meet our net capital spending needs.
Financing Activities
In 2025, net cash used for financing activities was $5.0 billion, primarily reflecting the return of operating cash flow to our shareholders through dividend payments and share repurchases of $8.6 billion, as well as payments of long-term debt borrowings of $4.1 billion, partially offset by proceeds from the issuances of long-term debt of $8.2 billion.
In 2024, net cash used for financing activities was $7.6 billion, primarily reflecting the return of operating cash flow to our shareholders through dividend payments and share repurchases of $8.2 billion, as well as payments of long-term debt borrowings of $3.9 billion, partially offset by proceeds from the issuances of long-term debt of $4.0 billion.
See Note 8 to our consolidated financial statements for further discussion of debt obligations.
We annually review our capital structure with our Board, including our dividend policy and share repurchase activity. On February 3, 2026, we announced the 2026 Share Repurchase Program. See “Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” for further information. In addition, on February 3, 2026, we announced a 4% increase in our annualized dividend to $5.92 per share from $5.69 per share, effective with the dividend expected to be paid in June 2026. We expect to return a total of approximately $8.9 billion to shareholders in 2026, comprising dividends of approximately $7.9 billion and share repurchases of approximately $1.0 billion.
Free Cash Flow
The table below reconciles net cash provided by operating activities, as reflected on our cash flow statement, to our free cash flow.   Free cash flow is a non-GAAP financial measure. For further information on free cash flow, see “Non-GAAP Measures.”

2025 2024 Change
Net cash provided by operating activities, GAAP measure $ 12,087   $ 12,507  (3) %
Capital spending (4,415) (5,318)
Sales of property, plant and equipment 528   342 
Free cash flow, non-GAAP measure $ 8,200   $ 7,531  9   %

We use free cash flow primarily for acquisitions and financing activities, including debt repayments, dividends and share repurchases. We expect to continue to return free cash flow to our shareholders primarily through dividends and share repurchases while maintaining Tier 1 commercial paper access, which we believe will facilitate appropriate financial flexibility and ready access to global capital and credit markets at favorable interest rates. However, see “Item 1A. Risk Factors” and “Our Business Risks” for certain factors that may impact our credit ratings or our operating cash flows.

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Any downgrade of our credit ratings by a credit rating agency, especially any downgrade to below investment grade, whether or not as a result of our actions or factors which are beyond our control, could increase our future borrowing costs and impair our ability to access capital and credit markets on terms commercially acceptable to us, or at all. In addition, any downgrade of our current short-term credit ratings could impair our ability to access the commercial paper market with the same flexibility that we have experienced historically, and therefore require us to rely more heavily on more expensive types of debt financing. See “Item 1A. Risk Factors,” “Our Business Risks” and Note 8 to our consolidated financial statements for further information.

Return on Invested Capital
ROIC is a non-GAAP financial measure. For further information on ROIC, see “Non-GAAP Measures.”

  2025
Net income attributable to PepsiCo $ 8,240  

Interest expense 1,840  
Tax on interest expense (410)
$ 9,670  

Average debt obligations (a)
$ 48,848  
Average common shareholders’ equity (b)
18,929  
Average invested capital $ 67,777  

ROIC, non-GAAP measure 14.3   %

(a) Includes a quarterly average of short-term and long-term debt obligations.
(b) Includes a quarterly average of common stock, capital in excess of par value, retained earnings, accumulated other comprehensive loss and repurchased common stock.
The table below reconciles ROIC as calculated above to net ROIC, excluding items affecting comparability.

  2025
ROIC, non-GAAP measure 14.3   %
Impact of:
Average cash, cash equivalents and short-term investments 2.3  
Interest income (1.0)
Tax on interest income 0.2  
Mark-to-market net impact (a)
—  
Restructuring and impairment charges (a)
0.9  
Acquisition and divestiture-related charges (a)
0.4  

Impairment and other charges (a)
1.7  
Indirect and income tax impact (a)
0.1  
Product recall-related impact (a)
—  
Pension and retiree medical-related impact (a)
0.2  

Core Net ROIC, non-GAAP measure 19.1   %

(a) See “Items Affecting Comparability” for a detailed description.

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OUR CRITICAL ACCOUNTING POLICIES AND ESTIMATES
An appreciation of our critical accounting policies and estimates is necessary to understand our financial results. These policies may require management to make difficult and subjective judgments regarding uncertainties, including the business and economic uncertainty resulting from volatile geopolitical conditions and the high interest rate and inflationary cost environment, and as a result, such estimates may significantly impact our financial results. The precision of these estimates and the likelihood of future changes depend on a number of underlying variables and a range of possible outcomes. We applied our critical accounting policies and estimation methods consistently in all material respects and for all periods presented. We have discussed our critical accounting policies and estimates with our Audit Committee.
Our critical accounting policies and estimates are:
• revenue recognition;
• goodwill and other intangible assets;
• income tax expense and accruals; and
• pension and retiree medical plans.

Revenue Recognition
We recognize revenue when our performance obligation is satisfied. Our primary performance obligation (the distribution and sales of beverage and convenient food products) is satisfied upon the shipment or delivery of products to our customers, which is also when control is transferred. The transfer of control of products to our customers is typically based on written sales terms that generally do not allow for a right of return, except in the instance of a product recall or other limited circumstances that may allow for product returns. Our policy for DSD is to remove and replace damaged and out-of-date products from store shelves to ensure that consumers receive the product quality and freshness they expect. Similarly, our policy for certain warehouse-distributed products is to replace damaged and out-of-date products. As a result, we record reserves, based on estimates, for product recall, anticipated damaged and out-of-date produc ts.
Our products are sold for cash or on credit terms. Our credit terms, which are established in accordance with local and industry practices, typically require payment within 30 days of delivery in the United States, and generally within 30 to 90 days internationally, and may allow discounts for early payment.
We estimate and reserve for our expected credit loss exposure based on our experience with past due accounts and collectibility, write-off history, the aging of accounts receivable, our analysis of customer data, and forward-looking information (including the expected impact of a high interest rate and inflationary cost environment), leveraging estimates of creditworthiness and projections of default and recovery rates for certain of our customers.
Our policy is to provide customers with product when needed. In fact, our commitment to freshness and product dating serves to regulate the quantity of product shipped or delivered. In addition, DSD products are placed on the shelf by our employees with customer shelf space and storerooms limiting the quantity of product. For product delivered through other distribution networks, we monitor customer inventory levels.
As discussed in “Our Customers” in “Item 1. Business,” we offer sales incentives and discounts through various programs to customers and consumers. Total marketplace spending includes sales incentives, discounts, advertising and other marketing activities. Sales incentives and discounts are primarily accounted for as a reduction of revenue and include payments to customers for performing activities on our behalf, such as payments for in-store displays, payments to gain distribution of new products, payments for shelf space and discounts to promote lower retail prices. Sales incentives and discounts also

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include support provided to our independent bottlers through funding of advertising and other marketing activities.
A number of our sales incentives, such as bottler funding to independent bottlers and customer volume rebates, are based on annual targets, and accruals are established during the year, as products are delivered, for the expected payout, which may occur after year-end once reconciled and settled. These accruals are based on contract terms and our historical experience with similar programs and require management judgment with respect to estimating customer and consumer participation and performance levels. Differences between estimated expense and actual incentive costs are normally insignificant and are recognized in earnings in the period such differences are determined. In addition, certain advertising and marketing costs are also based on annual targets and recognized during the year as incurred.
See Note 2 to our consolidated financial statements for further information on our revenue recognition and related policies, including total marketplace spending.

Goodwill and Other Intangible Assets
We sell products under a number of brand names, many of which were developed by us. Brand development costs are expensed as incurred. We also purchase brands and other intangible assets in acquisitions. In a business combination, the consideration is first assigned to identifiable assets and liabilities, including brands and other intangible assets, based on estimated fair values, with any excess recorded as goodwill. Determining fair value requires significant estimates and assumptions, including those related to volatile geopolitical conditions and a high interest rate and inflationary cost environment, based on an evaluation of a number of factors, such as marketplace participants, product life cycles, market share, consumer awareness, brand history and future expansion expectations, amount and timing of future cash flows and the discount rate applied to the cash flows.
We believe that a brand has an indefinite life if it has a history of strong revenue and cash flow performance and we have the intent and ability to support the brand with marketplace spending for the foreseeable future. If these indefinite-lived brand criteria are not met, brands are amortized over their expected useful lives, which generally range from 20 to 40 years. Determining the expected life of a brand requires management judgment and is based on an evaluation of a number of factors, including market share, consumer awareness, brand history, future expansion expectations and regulatory restrictions, as well as the macroeconomic environment of the countries in which the brand is sold.
In connection with previous acquisitions, we reacquired certain franchise rights which provided the exclusive and perpetual rights to manufacture and/or distribute beverages for sale in specified territories. In determining the useful life of these franchise rights, many factors were considered, including the pre-existing perpetual bottling arrangements, the indefinite period expected for these franchise rights to contribute to our future cash flows, as well as the lack of any factors that would limit the useful life of these franchise rights to us, including legal, regulatory, contractual, competitive, economic or other factors. Therefore, certain of these franchise rights are considered as indefinite-lived. Franchise rights that are not considered indefinite-lived are amortized over the remaining contractual period of the contract in which the right was granted.
Indefinite-lived intangible assets and goodwill are not amortized and, as a result, are assessed for impairment at least annually, using either a qualitative or quantitative approach. We perform this annual assessment during our third quarter, or more frequently if circumstances indicate that the carrying value may not be recoverable. Where we use the qualitative assessment, first we determine if, based on qualitative factors, it is more likely than not that an impairment exists. Factors considered include macroeconomic conditions (including those related to volatile geopolitical conditions and a high interest rate and inflationary cost environment), industry and competitive conditions, legal and regulatory environment, historical financial performance and significant changes in the brand or reporting unit. If the

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qualitative assessment indicates that it is more likely than not that an impairment exists, then a quantitative assessment is performed.
In the quantitative assessment for indefinite-lived intangible assets and goodwill, an assessment is performed to determine the fair value of the indefinite-lived intangible asset and the reporting unit, respectively. Estimated fair value is determined using discounted cash flows and requires an analysis of several estimates including future cash flows or income consistent with management’s strategic business plans, annual sales growth rates, perpetuity growth assumptions and the selection of assumptions underlying a discount rate (weighted-average cost of capital) based on market data available at the time. Significant management judgment is necessary to estimate the impact of competitive operating, macroeconomic and other factors (including those related to volatile geopolitical conditions and a high interest rate and inflationary cost environment) to estimate future levels of sales, operating profit or cash flows. All assumptions used in our impairment evaluations for indefinite-lived intangible assets and goodwill, such as forecasted growth rates (including perpetuity growth assumptions) and weighted-average cost of capital, are based on the best available market information and are consistent with our internal forecasts and operating plans. A deterioration in these assumptions could adversely impact our results. Additionally, indefinite-lived intangible assets acquired in recent acquisitions are more susceptible to impairment because they are recorded at fair value at the time of acquisition. These assumptions could be adversely impacted by certain of the risks described in “Item 1A. Risk Factors” and “Our Business Risks.”
As of December 27, 2025, the estimated fair value of the SodaStream reporting unit narrowly exceeded its carrying value. Given the low coverage, there could be further impairment to the carrying value of the SodaStream reporting unit goodwill if future sales and operating profit results are not in line with the forecasted future cash flows of the business and/or if macroeconomic conditions worsen and drive an increase in the weighted-average cost of capital used to estimate its fair value. We continue to monitor the performance of the SodaStream reporting unit, as well as all of our indefinite-lived intangible assets.
Amortizable intangible assets are only evaluated for impairment upon a significant change in the operating or macroeconomic environment. If an evaluation of the undiscounted future cash flows indicates impairment, the asset is written down to its estimated fair value, which is based on its discounted future cash flows.
See Notes 2, 4 and 13 to our consolidated financial statements for further information.

Income Tax Expense and Accruals
Our annual tax rate is based on our income, statutory tax rates and tax structure and transactions, including transfer pricing arrangements, available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our annual tax rate and in evaluating our tax positions. We establish reserves when, despite our belief that our tax return positions are fully supportable, we believe that certain positions are subject to challenge and that we likely will not succeed. We adjust these reserves, as well as the related interest, in light of changing facts and circumstances, such as the progress of a tax audit, new tax laws, relevant court cases or tax authority settlements. See “Item 1A. Risk Factors” for further discussion.
An estimated annual effective tax rate is applied to our quarterly operating results. In the event there is a significant or unusual item recognized in our quarterly operating results, the tax attributable to that item is separately calculated and recorded at the same time as that item. We consider the tax adjustments from the resolution of prior-year tax matters to be among such items.
Tax law requires items to be included in our tax returns at different times than the items are reflected in our consolidated financial statements. As a result, our annual tax rate reflected in our consolidated

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financial statements is different than that reported in our tax returns (our cash tax rate). Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences reverse over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax returns in future years for which we have already recorded the tax benefit on our consolidated financial statements. We establish valuation allowances for our deferred tax assets if, based on the available evidence, it is not more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax liabilities generally represent tax expense recognized in our consolidated financial statements for which payment has been deferred, or expense for which we have already taken a deduction in our tax return but have not yet recognized as expense in our consolidated financial statements.
In 2025, our annual tax rate was 19.0% compared to 19.4% in 2024. See “Other Consolidated Results” for further information.
See Note 5 to our consolidated financial statements for further information.

Pension and Retiree Medical Plans
Our pension plans cover certain employees in the United States and certain international employees. Benefits are determined based on either years of service or a combination of years of service and earnings. Certain U.S. and Canada retirees are also eligible for medical and life insurance benefits (retiree medical) if they meet age and service requirements. Generally, our share of retiree medical costs is capped at specified dollar amounts, which vary based upon years of service, with retirees contributing the remainder of the cost. In addition, we have been phasing out certain subsidies of retiree medical benefits.
See “Items Affecting Comparability” and Note 7 to our consolidated financial statements for information about changes and settlements within our pension plans.
Our Assumptions
The determination of pension and retiree medical expenses and obligations requires the use of assumptions to estimate the amount of benefits that employees earn while working, as well as the present value of those benefits. Annual pension and retiree medical expense amounts are principally based on four components: (1) the value of benefits earned by employees for working during the year (service cost), (2) the increase in the projected benefit obligation due to the passage of time (interest cost), and (3) other gains and losses as discussed in Note 7 to our consolidated financial statements, reduced by (4) the expected return on assets for our funded plans.
Significant assumptions used to measure our annual pension and retiree medical expenses include:
• certain employee-related demographic factors, such as turnover, retirement age and mortality;
• the expected rate of return on assets in our funded plans; and
• the spot rates along the yield curve used to determine service and interest costs and the present value of liabilities.
Certain assumptions reflect our historical experience and management’s best judgment regarding future expectations. All actuarial assumptions are reviewed annually, except in the case of an interim remeasurement due to a significant event such as a curtailment or settlement. Due to the significant management judgment involved, these assumptions could have a material impact on the measurement of our pension and retiree medical expenses and obligations.
At each measurement date, the discount rates are based on interest rates for high-quality, long-term corporate debt securities with maturities comparable to those of our liabilities. Our U.S. obligation and pension and retiree medical expense is based on the discount rates determined using the Mercer Above

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Mean Curve. This curve includes bonds that closely match the timing and amount of our expected benefit payments and reflects the portfolio of investments we would consider to settle our liabilities.
See Note 7 to our consolidated financial statements for information about the expected rate of return on plan assets and our plans’ investment strategy. Although we review our expected long-term rates of return on an annual basis, our asset returns in a given year do not significantly influence our evaluation of long-term rates of return.
Weighted-average assumptions for pension and retiree medical expense are as follows:  

2026 2025 2024
Pension
Service cost discount rate 6.1   % 6.0  % 5.4  %
Interest cost discount rate 5.0   % 5.4  % 5.1  %
Expected rate of return on plan assets 7.3   % 7.1  % 7.0  %
Retiree medical
Service cost discount rate 5.2   % 5.6  % 5.1  %
Interest cost discount rate 4.6   % 5.2  % 5.0  %
Expected rate of return on plan assets 7.5   % 7.1  % 7.1  %

In 2025, the aggregate of lump sum distributions and the purchase of a group annuity contract exceeded the total of annual service and interest cost and triggered pre-tax settlement charges for certain U.S. defined pension plans. In addition, we expect the impact of the freeze of benefit accruals to U.S. salaried participants effective December 31, 2025, changes in discount rates and higher expected rate of return on plan assets to decrease our pension and retiree medical expense in 2026.
Sensitivity of Assumptions
A decrease in each of the collective discount rates or in the expected rate of return assumptions would increase expense for our benefit plans. A 100-basis-point decrease in each of the above discount rates and expected rate of return assumptions would individually increase 2026 pre-tax pension and retiree medical expense as follows:

Assumption Amount
Discount rates used in the calculation of expense
$ 64 
Expected rate of return $ 142 

Funding
We make contributions to pension trusts that provide plan benefits for certain pension plans. These contributions are made in accordance with applicable tax regulations that provide for current tax deductions for our contributions and taxation to the employee only upon receipt of plan benefits. Generally, we do not fund our pension plans when our contributions would not be currently tax deductible. As our retiree medical plans are not subject to regulatory funding requirements, we generally fund these plans on a pay-as-you-go basis, although we periodically review available options to make additional contributions toward these benefits.
We made discretionary contributions of $200 million to a U.S. qualified defined benefit plan and $52 million to our international pension benefit plans in January 2026.
Our pension and retiree medical plan contributions are subject to change as a result of many factors, such as changes in interest rates, deviations between actual and expected asset returns and changes in tax or other benefit laws. We regularly evaluate different opportunities to reduce risk and volatility associated with our pension and retiree medical plans. See Note 7 to our consolidated financial statements for our past and expected contributions and estimated future benefit payments.

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Consolidated Statement of Income
PepsiCo, Inc. and Subsidiaries
Fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023
(in millions except per share amounts)

2025 2024 2023
Net Revenue $ 93,925   $ 91,854   $ 91,471  
Cost of sales 43,066   41,744   41,881  
Gross profit 50,859   50,110   49,590  
Selling, general and administrative expenses 37,368   37,190   36,677  

Impairment of intangible assets (see Notes 1 and 4) 1,993   33   927  

Operating Profit 11,498   12,887   11,986  
Other pension and retiree medical benefits (expense)/income ( 133 ) ( 22 ) 250  
Net interest expense and other ( 1,121 ) ( 919 ) ( 819 )
Income before income taxes 10,244   11,946   11,417  
Provision for income taxes 1,949   2,320   2,262  
Net income 8,295   9,626   9,155  
Less: Net income attributable to noncontrolling interests 55   48   81  
Net Income Attributable to PepsiCo $ 8,240   $ 9,578   $ 9,074  
Net Income Attributable to PepsiCo per Common Share
Basic $ 6.02   $ 6.97   $ 6.59  
Diluted $ 6.00   $ 6.95   $ 6.56  
Weighted-average common shares outstanding
Basic 1,369   1,373   1,376  
Diluted 1,373   1,378   1,383  

See accompanying notes to the consolidated financial statements.

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Consolidated Statement of Comprehensive Income
PepsiCo, Inc. and Subsidiaries
Fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023
(in millions)

2025 2024 2023
Net income $ 8,295   $ 9,626   $ 9,155  
Other comprehensive income/(loss), net of taxes:
Net currency translation adjustment 1,723   ( 1,962 ) ( 307 )
Net change on cash flow hedges 44   113   ( 32 )
Net pension and retiree medical adjustments 452   5   ( 358 )
Net change on available-for-sale debt securities and other 369   ( 234 ) 465  
Total other comprehensive income/(loss), net of taxes 2,588   ( 2,078 ) ( 232 )
Comprehensive income 10,883   7,548   8,923  
Less: Comprehensive income attributable to noncontrolling interests 55   48   81  
Comprehensive Income Attributable to PepsiCo $ 10,828   $ 7,500   $ 8,842  

See accompanying notes to the consolidated financial statements.

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Consolidated Statement of Cash Flows
PepsiCo, Inc. and Subsidiaries
Fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023
(in millions)

2025 2024 2023
Operating Activities
Net income $ 8,295   $ 9,626   $ 9,155  
Depreciation and amortization 3,451   3,160   2,948  

Impairment and other charges 1,946   714   1,230  

Product recall-related impact —   187   136  
Cash payments for product recall-related impact ( 6 ) ( 148 ) —  
Operating lease right-of-use asset amortization 727   655   570  
Share-based compensation expense 288   362   380  
Restructuring and impairment charges 983   727   445  
Cash payments for restructuring charges ( 796 ) ( 436 ) ( 434 )
Acquisition and divestiture-related charges 453   22   41  
Cash payments for acquisition and divestiture-related charges ( 228 ) ( 18 ) ( 41 )
Pension and retiree medical plan expenses 504   414   150  
Pension and retiree medical plan contributions ( 472 ) ( 348 ) ( 410 )
Deferred income taxes and other tax charges and credits 71   ( 42 ) ( 271 )

Tax payments related to the TCJ Act ( 772 ) ( 579 ) ( 309 )
Change in assets and liabilities:
Accounts and notes receivable ( 580 ) ( 138 ) ( 793 )
Inventories ( 150 ) ( 314 ) ( 261 )
Prepaid expenses and other current assets 195   40   ( 13 )
Accounts payable and other current liabilities ( 677 ) ( 943 ) 420  
Income taxes payable ( 433 ) ( 123 ) 310  
Other, net ( 712 ) ( 311 ) 189  
Net Cash Provided by Operating Activities 12,087   12,507   13,442  

Investing Activities
Capital spending ( 4,415 ) ( 5,318 ) ( 5,518 )
Sales of property, plant and equipment 528   342   198  
Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets ( 3,391 ) ( 256 ) ( 314 )

Divestitures, sales of investments in noncontrolled affiliates and other assets 39   166   75  
Short-term investments, by original maturity:
More than three months - purchases ( 190 ) ( 425 ) ( 555 )
More than three months - maturities 605   —   556  
More than three months - sales —   —   12  
Three months or less, net 45   5   3  
Other investing, net ( 100 ) 14   48  
Net Cash Used for Investing Activities ( 6,879 ) ( 5,472 ) ( 5,495 )

(Continued on following page)

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Consolidated Statement of Cash Flows (continued)
PepsiCo, Inc. and Subsidiaries
Fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023
(in millions)

2025 2024 2023
Financing Activities
Proceeds from issuances of long-term debt $ 8,189   $ 4,042   $ 5,482  
Payments of long-term debt ( 4,082 ) ( 3,886 ) ( 3,005 )

Short-term borrowings, by original maturity:
More than three months - proceeds 6,391   5,786   5,428  
More than three months - payments ( 7,920 ) ( 5,639 ) ( 3,106 )
Three months or less, net 1,170   392   ( 29 )

Cash dividends paid ( 7,638 ) ( 7,229 ) ( 6,682 )
Share repurchases ( 1,000 ) ( 1,000 ) ( 1,000 )
Proceeds from exercises of stock options 97   166   116  
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted ( 113 ) ( 135 ) ( 140 )
Other financing ( 73 ) ( 53 ) ( 73 )
Net Cash Used for Financing Activities ( 4,979 ) ( 7,556 ) ( 3,009 )
Effect of exchange rate changes on cash and cash equivalents and restricted cash 422   ( 687 ) ( 277 )
Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash 651   ( 1,208 ) 4,661  
Cash and Cash Equivalents and Restricted Cash, Beginning of Year 8,553   9,761   5,100  
Cash and Cash Equivalents and Restricted Cash, End of Year $ 9,204   $ 8,553   $ 9,761  

See accompanying notes to the consolidated financial statements.

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Consolidated Balance Sheet
PepsiCo, Inc. and Subsidiaries
December 27, 2025 and December 28, 2024
(in millions except per share amounts)

2025 2024
ASSETS
Current Assets
Cash and cash equivalents
$ 9,159   $ 8,505  
Short-term investments
371   761  

Accounts and notes receivable, net
11,506   10,333  
Inventories
Raw materials and packaging 2,581   2,440  
Work-in-process 143   104  
Finished goods 3,121   2,762  
5,845   5,306  
Prepaid expenses and other current assets 1,068   921  

Total Current Assets
27,949   25,826  
Property, Plant and Equipment, net 29,905   28,008  
Amortizable Intangible Assets, net 1,219   1,102  
Goodwill 18,916   17,534  
Other Indefinite-Lived Intangible Assets 13,847   13,699  
Investments in Noncontrolled Affiliates 2,038   1,985  
Deferred Income Taxes 4,541   4,362  
Other Assets 8,984   6,951  
Total Assets
$ 107,399   $ 99,467  

LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations
$ 6,861   $ 7,082  
Accounts payable and other current liabilities
25,903   24,454  

Total Current Liabilities
32,764   31,536  
Long-Term Debt Obligations 42,321   37,224  
Deferred Income Taxes 3,802   3,484  
Other Liabilities 7,965   9,052  
Total Liabilities
86,852   81,296  
Commitments and contingencies

PepsiCo Common Shareholders’ Equity
Common stock, par value 1 2 / 3 ¢  per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1,367 and 1,372 shares, respectively)
23   23  
Capital in excess of par value
4,451   4,385  
Retained earnings
72,788   72,266  
Accumulated other comprehensive loss
( 15,024 ) ( 17,612 )
Repurchased common stock, in excess of par value 500 and 495 shares, respectively)
( 41,832 ) ( 41,021 )
Total PepsiCo Common Shareholders’ Equity
20,406   18,041  
Noncontrolling interests 141   130  
Total Equity
20,547   18,171  
Total Liabilities and Equity $ 107,399   $ 99,467  

See accompanying notes to the consolidated financial statements.

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Consolidated Statement of Equity
PepsiCo, Inc. and Subsidiaries
Fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023
(in millions except per share amounts)

  2025 2024 2023
  Shares Amount Shares Amount Shares Amount

Common Stock
Balance, beginning of year 1,372   $ 23   1,374   $ 23   1,377   $ 23  
Change in repurchased common stock ( 5 ) —   ( 2 ) —   ( 3 ) —  
Balance, end of year 1,367   23   1,372   23   1,374   23  
Capital in Excess of Par Value
Balance, beginning of year 4,385   4,261   4,134  
Share-based compensation expense 280   357   379  
Stock option exercises, RSUs and PSUs converted ( 92 ) ( 90 ) ( 107 )
Withholding tax on RSUs and PSUs converted ( 113 ) ( 135 ) ( 140 )
Other ( 9 ) ( 8 ) ( 5 )
Balance, end of year 4,451   4,385   4,261  
Retained Earnings
Balance, beginning of year 72,266   70,035   67,800  

Net income attributable to PepsiCo 8,240   9,578   9,074  
Cash dividends declared (a)
( 7,718 ) ( 7,347 ) ( 6,839 )
Balance, end of year 72,788   72,266   70,035  
Accumulated Other Comprehensive Loss
Balance, beginning of year ( 17,612 ) ( 15,534 ) ( 15,302 )
Other comprehensive income/(loss) attributable to PepsiCo 2,588   ( 2,078 ) ( 232 )
Balance, end of year ( 15,024 ) ( 17,612 ) ( 15,534 )
Repurchased Common Stock
Balance, beginning of year ( 495 ) ( 41,021 ) ( 493 ) ( 40,282 ) ( 490 ) ( 39,506 )
Share repurchases ( 7 ) ( 1,000 ) ( 6 ) ( 1,000 ) ( 6 ) ( 1,000 )
Stock option exercises, RSUs and PSUs converted 2   189   4   256   3   223  
Other —   —   —   5   —   1  
Balance, end of year ( 500 ) ( 41,832 ) ( 495 ) ( 41,021 ) ( 493 ) ( 40,282 )
Total PepsiCo Common Shareholders’ Equity 20,406   18,041   18,503  
Noncontrolling Interests
Balance, beginning of year 130   134   124  
Net income attributable to noncontrolling interests 55   48   81  
Distributions to noncontrolling interests ( 44 ) ( 49 ) ( 68 )

Other, net —   ( 3 ) ( 3 )
Balance, end of year 141   130   134  
Total Equity $ 20,547   $ 18,171   $ 18,637  

(a) Cash dividends declared per common share were $ 5.6225 , $ 5.3300 and $ 4.9450 for 2025, 2024 and 2023, respectively.

See accompanying notes to the consolidated financial statements.

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Notes to the Consolidated Financial Statements

Note 1 — Basis of Presentation and Our Segments
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with GAAP and include the consolidated accounts of PepsiCo, Inc. and the affiliates that we control. In addition, we include our share of the results of certain other affiliates using the equity method based on our economic ownership interest, our ability to exercise significant influence over the operating or financial decisions of these affiliates or our ability to direct their economic resources. We do not control these other affiliates, as our ownership in these other affiliates is generally 50 % or less. Intercompany balances and transactions are eliminated. As a result of exchange restrictions and other operating restrictions, during the periods presented, we did not have control over our Venezuelan subsidiaries. As such, our Venezuelan subsidiaries are not included within our consolidated financial results for any period presented.
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.
The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities. Estimates are used in determining, among other items, sales incentives accruals, tax reserves, share-based compensation, pension and retiree medical accruals, amounts and useful lives for intangible assets and future cash flows associated with impairment testing for indefinite-lived intangible assets, goodwill and other long-lived assets. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. Additionally, the business and economic uncertainty resulting from volatile geopolitical conditions and changes in the interest rate and inflationary cost environment have made such estimates and assumptions more difficult to calculate. As future events and their effect cannot be determined with precision, actual results could differ significantly from those estimates.
Our fiscal year ends on the last Saturday of each December, resulting in a 53 rd reporting week every five or six years. While our North America financial results are reported on a weekly calendar basis, our international operations are reported on a monthly calendar basis. The following chart details our quarterly reporting schedule:

Quarter United States and Canada International
First Quarter 12 weeks January and 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

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 consolidated financial statements to conform to the current year presentation.

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Our Segments
We are organized into six reportable segments, as follows:
1) PepsiCo Foods North America (PFNA), which includes all of our convenient food businesses in the United States and Canada;
2) PepsiCo Beverages North America (PBNA), which includes all of our beverage businesses in the United States and Canada;
3) International Beverages Franchise (IB Franchise), which includes our international franchise beverage businesses, as well as our SodaStream business;
4) Europe, Middle East and Africa (EMEA), which includes our convenient food businesses and our beverage businesses with company-owned bottlers in Europe, the Middle East and Africa;
5) Latin America Foods (LatAm Foods), which includes all of our convenient food businesses in Latin America; and
6) Asia Pacific Foods, which consists of our convenient food businesses in Asia Pacific, including China, Australia and New Zealand, as well as India.
Through our operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of beverages and convenient foods, serving customers and consumers in more than 200 countries and territories with our largest operations in the United States, Mexico, Russia, Canada, China, the United Kingdom, Brazil and South Africa.
The accounting policies for the segments are the same as those described in Note 2, except for the following allocation methodologies:
• share-based compensation expense;
• pension and retiree medical expense; and
• derivatives.
Share-Based Compensation Expense
Our segments are held accountable for share-based compensation expense and, therefore, this expense is allocated to our segments as an incremental employee compensation cost. The expense allocated to our segments excludes any impact of changes in our assumptions during the year which reflect market conditions over which segment management has no control. Therefore, any variances between allocated expense and our actual expense are recognized in corporate unallocated expenses.
Pension and Retiree Medical Expense
Pension and retiree medical service costs measured at fixed discount rates are reflected in segment results. The variance between the fixed discount rate used to determine the service cost reflected in segment results and the discount rate as disclosed in Note 7 is reflected in corporate unallocated expenses.
Derivatives
We centrally manage commodity derivatives on behalf of our segments. These commodity derivatives include agricultural products, energy and metals. Commodity derivatives that do not qualify for hedge accounting treatment are marked to market each period with the resulting gains and losses recorded in corporate unallocated expenses as either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. These gains and losses are subsequently reflected in segment results when the segments recognize the cost of the underlying commodity in operating profit. Therefore, the segments realize the economic effects of the derivative without experiencing any resulting mark-to-market volatility, which remains in corporate unallocated expenses. These derivatives hedge underlying commodity price risk and were not entered into for trading or speculative purposes.

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Net Revenue, Significant Expenses and Operating Profit by Segment
Our chief operating decision maker (CODM) is our Chairman and Chief Executive Officer. Our CODM uses segment operating profit as the profit measure to evaluate segment performance and allocate resources across segments. Corporate unallocated expenses, other pension and retiree medical benefits (expense)/income and net interest expense and other are centrally managed costs and are therefore excluded from this profit measure to provide better transparency of our segment operating results. Our CODM considers variances of actual performance to our annual operating plan and periodic forecasts when making decisions.
Significant expenses are expenses which are regularly provided to the CODM and are included in segment operating profit. These consist of segment cost of sales, segment selling, general and administrative expenses, and various items affecting comparability. Segment cost of sales includes 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, excluding the impact of items affecting comparability. Segment selling, general and administrative expenses include the costs to execute sales to customers, distribution costs, including the costs of shipping and handling activities, which include certain merchandising activities, costs related to brand and product marketing to consumers, other ongoing operating costs that are not directly related to manufacturing, distribution, selling, advertising or marketing activities as well as other income or expense items, excluding the impact of items affecting comparability. Items affecting comparability include restructuring and impairment charges, acquisition and divestiture-related charges, impairment and other charges/credits, indirect tax impact, product recall-related impact and pension and retiree medical-related impact.
Asset and other balance sheet information for segments is not provided to the CODM.
Net revenue, significant expenses and operating profit of each segment are as follows:

  2025
  PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Total
Net revenue $ 27,528   $ 28,197   $ 4,997   $ 18,025   $ 10,549   $ 4,629   $ 93,925  
Segment cost of sales (a)
10,564   12,910   1,529   10,437   4,480   2,850  
Segment selling, general and administrative expenses (a)
10,419   12,002   1,612   5,017   3,925   1,315  
Restructuring and impairment charges (b)
344   281   14   195   52   12  
Acquisition and divestiture-related charges (c)
28   422   —   —   —   3  
Impairment and other charges (d)
—   1,523   73   270   —   80  
Indirect tax impact (e)
—   —   —   —   82   —  
Pension and retiree medical-related impact (f)
—   ( 30 ) —   —   —   —  
Segment operating profit $ 6,173   $ 1,089   $ 1,769   $ 2,106   $ 2,010   $ 369   $ 13,516  
Corporate unallocated expenses ( 2,018 )
Operating profit 11,498  
Other pension and retiree medical benefits expense ( 133 )
Net interest expense and other ( 1,121 )
Income before income taxes $ 10,244  

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  2024
  PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Total
Net revenue $ 27,431   $ 27,769   $ 4,879   $ 16,658   $ 10,568   $ 4,549   $ 91,854  
Segment cost of sales (a)
10,245   12,701   1,482   9,639   4,420   2,756  
Segment selling, general and administrative expenses (a)(g)
10,204   11,964   1,689   4,787   4,047   1,402  
Restructuring and impairment charges (b)
161   238   24   116   49   9  
Acquisition and divestiture-related charges (c)
9   8   —   —   —   5  
Impairment and other charges (d)
9   556   4   145   —   —  
Indirect tax impact (e)
—   —   218   —   —   —  
Product recall-related impact (h)
184   —   —   —   —   —  
Segment operating profit $ 6,619   $ 2,302   $ 1,462   $ 1,971   $ 2,052   $ 377   $ 14,783  
Corporate unallocated expenses ( 1,896 )
Operating profit 12,887  
Other pension and retiree medical benefits expense ( 22 )
Net interest expense and other ( 919 )
Income before income taxes $ 11,946  

  2023
  PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Total
Net revenue $ 28,015   $ 27,626   $ 4,559   $ 16,210   $ 10,576   $ 4,485   $ 91,471  
Segment cost of sales (a)
10,432   12,856   1,478   9,666   4,591   2,711  
Segment selling, general and administrative expenses (a)
10,158   11,808   1,641   4,569   4,056   1,404  
Restructuring and impairment charges (b)
42   41   11   227   29   8  
Acquisition and divestiture-related charges (c)
—   16   —   ( 2 ) —   2  
Impairment and other charges/credits (d)
—   321   862   ( 14 ) 2   59  
Product recall-related impact (h)
136   —   —   —   —   —  
Segment operating profit $ 7,247   $ 2,584   $ 567   $ 1,764   $ 1,898   $ 301   $ 14,361  
Corporate unallocated expenses ( 2,375 )
Operating profit 11,986  
Other pension and retiree medical benefits income 250  
Net interest expense and other ( 819 )
Income before income taxes $ 11,417  

(a) Does not include items recorded in the cost of sales or selling, general and administrative expenses lines on our income statement that are presented in the restructuring and impairment charges, acquisition and divestiture-related charges, impairment and other charges/credits, indirect tax impact, product recall-related impact and pension and retiree medical-related impact lines of these tables.
(b) See Note 3 for further information related to restructuring and impairment charges.
(c) See Note 13 for further information related to acquisitions and divestiture-related charges.
(d) See below and Note 4 for impairment and other charges taken. In 2023, EMEA included adjustments for changes in estimates of previously recorded amounts.
(e) In 2025, we recorded a pre-tax charge of $ 82  million in selling, general and administrative expenses and income tax expense of $ 29  million in provision for income taxes (collectively, $ 0.08 per share) related to an indirect and income tax audit settlement in our LatAm Foods segment. In 2024, we recorded a pre-tax charge of $ 218  million ($ 218  million after-tax or $ 0.16 per share) in cost of sales related to an indirect tax reserve in our IB Franchise segment.
(f) We recognized pre-tax income of $ 30  million ($ 22  million after-tax or $ 0.02 per share) in our PBNA segment, recorded in selling, general and administrative expenses, associated with pension-related liabilities from previous acquisitions.
(g) We recognized a pre-tax gain of $ 122  million ($ 92  million after-tax or $ 0.07 per share) in our PFNA segment, recorded in selling, general and administrative expenses, related to the remeasurement of our previously held 50 % equity ownership in Sabra at fair value. See Note 13 for further information.
(h) In 2024, we recorded a pre-tax charge of $ 187  million ($ 143  million after-tax or $ 0.10 per share) associated with the Quaker Recall with $ 176  million recorded in cost of sales related to property, plant and equipment write-offs, employee severance costs and other costs,

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$ 8  million recorded in selling, general and administrative expenses and $ 3  million recorded in other pension and retiree medical benefits (expense)/income, which is not included in operating profit. In 2023, we recorded a pre-tax charge of $ 136  million ($ 104  million after-tax or $ 0.07 per share) in cost of sales for product returns, inventory write-offs and customer and consumer-related costs associated with the Quaker Recall.
Disaggregation of Net Revenue
Our primary performance obligation is the distribution and sales of beverage and convenient food products to our customers. The following table reflects the percentage of net revenue generated between our beverage business and our convenient food business:

2025 2024 2023
Beverages (a)
Convenient Foods Beverages (a)
Convenient Foods Beverages (a)
Convenient Foods
North America 51   % 49   % 50   % 50   % 50   % 50   %
International (b)
31   % 69   % 29   % 71   % 29   % 71   %
PepsiCo 42   % 58   % 42   % 58   % 41   % 59   %

(a) Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and EMEA segments, is 36 % of our consolidated net revenue in 2025 and 35 % of our consolidated net revenue in both 2024 and 2023. 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.
(b) Beverage and convenient food revenue generated from our EMEA segment is 37 % and 63 % of EMEA net revenue, respectively, in 2025, and 35 % and 65 % of EMEA net revenue, respectively, in both 2024 and 2023.
Impairment and Other Charges
A summary of impairment and other charges taken, which are primarily as a result of our quantitative assessments, is as follows:

2025 2024 2023 Affected Line Item in the Income Statement
PFNA
Other $ —   $ 9   $ —   Impairment of intangible assets
PBNA
Rockstar (a)
1,539   —   —   Impairment of intangible assets
TBG (b)
( 16 ) 556 321 Selling, general and administrative expenses
IB Franchise
Rockstar (a)
73   —   —   Impairment of intangible assets
SodaStream (a)
—   —   862   Impairment of intangible assets
Other —   4   —   Selling, general and administrative expenses
EMEA
Rockstar (a)
251   —   —   Impairment of intangible assets
TBG (b)
19   135   —   Selling, general and administrative expenses
Other (c)
—   10   ( 14 ) Impairment of intangible assets, selling, general and administrative expenses and cost of sales
LatAm Foods
Other —   —   2   Selling, general and administrative expenses
Asia Pacific Foods
Be & Cheery 80   —   59   Impairment of intangible assets
Total $ 1,946   $ 714   $ 1,230  
After-tax amount (d)
$ 1,491   $ 584   $ 1,014  
Impact on net income attributable to PepsiCo per common share (d)
$ ( 1.09 ) $ ( 0.42 ) $ ( 0.73 )

(a) See Note 4 for further information regarding impairment of intangible assets. For information on our policies for indefinite-lived intangible assets, see Note 2.

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(b) See Note 9 for further information regarding our proportionate share of TBG’s indefinite-lived intangible assets impairment and other-than-temporary impairment of our investment in TBG. In 2024, we recorded an allowance for expected credit losses of $ 193  million, primarily related to outstanding receivables associated with the Juice Transaction. In 2025, we recorded adjustments for changes in estimates of previously recorded amounts.
(c) 2023 amount includes adjustments for changes in estimates of previously recorded amounts.
(d) 2025 includes a tax benefit of $ 39  million ($ 0.03 per share) related to the prior-year impairment of our investment in TBG.
Other Segment Information
Capital spending and depreciation and amortization of each segment are as follows:

  Capital Spending Depreciation and Amortization
  2025 2024 2023 2025 2024 2023
PFNA $ 1,051   $ 1,306   $ 1,444   $ 969   $ 862   $ 798  
PBNA 1,344   1,541   1,723   1,093   1,069   1,025  
IB Franchise 124   148   110   109   109   99  
EMEA 744   880   831   549   477   448  
LatAm Foods 672   809   814   417   382   362  
Asia Pacific Foods 257   312   312   153   133   118  
Total segment 4,192   4,996   5,234   3,290   3,032   2,850  
Corporate 223   322   284   161   128   98  
Total $ 4,415   $ 5,318   $ 5,518   $ 3,451   $ 3,160   $ 2,948  

Net revenue by country is as follows:    

  2025 2024 2023
United States $ 52,228   $ 51,668   $ 52,165  
Mexico 6,947   7,123   7,011  
Russia 4,768   3,880   3,566  
Canada 3,729   3,764   3,722  
China 2,621   2,709   2,703  
United Kingdom 2,142   2,063   1,946  
Brazil 1,782   1,765   1,779  
South Africa 1,767   1,859   1,707  
All other countries 17,941   17,023   16,872  
Total $ 93,925   $ 91,854   $ 91,471  

Property, plant and equipment, net by geography is as follows:    

2025 2024
United States $ 16,671   $ 16,550  
International (a)
13,234   11,458  
Total $ 29,905   $ 28,008  

(a) Mexico accounted for 9 % and 8 % of our consolidated property, plant and equipment, net as of December 27, 2025 and December 28, 2024, respectively. No other individual country exceeded 5 % of our consolidated property, plant and equipment, net.
Corporate Unallocated Expenses
Corporate unallocated expenses include costs of our corporate headquarters, centrally managed initiatives such as our ongoing business transformation initiatives, unallocated research and development costs, foreign exchange transaction gains and losses, unallocated insurance and benefit programs, commodity derivative gains and losses, as well as certain other items.

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Note 2 — Our Significant Accounting Policies
Revenue Recognition
We recognize revenue when our performance obligation is satisfied. Our primary performance obligation (the distribution and sales of beverage and convenient food products) is satisfied upon the shipment or delivery of products to our customers, which is also when control is transferred. Merchandising activities are performed after a customer obtains control of the product, are accounted for as fulfillment of our performance obligation to ship or deliver product to our customers and are recorded in selling, general and administrative expenses. Merchandising activities are immaterial in the context of our contracts. In addition, we exclude from net revenue all sales, use, value-added and certain excise taxes assessed by government authorities on revenue producing transactions.
The transfer of control of products to our customers is typically based on written sales terms that generally do not allow for a right of return, except in the instance of a product recall or other limited circumstances that may allow for product returns. Our policy for DSD is to remove and replace damaged and out-of-date products from store shelves to ensure that consumers receive the product quality and freshness they expect. Similarly, our policy for certain warehouse-distributed products is to replace damaged and out-of-date products. As a result, we record reserves, based on estimates, for product recall, anticipated damaged and out-of-date produc ts.
Our products are sold for cash or on credit terms. Our credit terms, which are established in accordance with local and industry practices, typically require payment within 30 days of delivery in the United States, and generally within 30 to 90 days internationally, and may allow discounts for early payment.
We estimate and reserve for our expected credit loss exposure based on our experience with past due accounts and collectibility, write-off history, the aging of accounts receivable, our analysis of customer data, and forward-looking information (including the expected impact of a high interest rate and inflationary cost environment), leveraging estimates of creditworthiness and projections of default and recovery rates for certain of our customers.
We are exposed to concentration of credit risk from our major customers, including Walmart. We have not experienced credit issues with these customers. In 2025, sales to Walmart and its affiliates (including Sam’s) represented approximately 14 % of our consolidated net revenue, including concentrate sales to our independent bottlers, which were used in finished goods sold by them to Walmart.
Total Marketplace Spending
We offer sales incentives and discounts through various programs to customers and consumers. Total marketplace spending includes sales incentives, discounts, advertising and other marketing activities. Sales incentives and discounts are primarily accounted for as a reduction of revenue and include payments to customers for performing activities on our behalf, such as payments for in-store displays, payments to gain distribution of new products, payments for shelf space and discounts to promote lower retail prices. Sales incentives and discounts also include support provided to our independent bottlers through funding of advertising and other marketing activities.
A number of our sales incentives, such as bottler funding to independent bottlers and customer volume rebates, are based on annual targets, and accruals are established during the year, as products are delivered, for the expected payout, which may occur after year-end once reconciled and settled. These accruals are based on contract terms and our historical experience with similar programs and require management judgment with respect to estimating customer and consumer participation and performance levels. Differences between estimated expense and actual incentive costs are normally insignificant and are recognized in earnings in the period such differences are determined. In addition, certain advertising and marketing costs are also based on annual targets and recognized during the year as incurred.

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The terms of most of our incentive arrangements do not exceed one year and, therefore, do not require highly uncertain long-term estimates. Certain arrangements, such as fountain pouring rights, may extend beyond one year. Upfront payments to customers under these arrangements are recognized over the shorter of the economic or contractual life, primarily as a reduction of revenue, and the remaining balances of $ 329 million as of December 27, 2025 and $ 237 million as of December 28, 2024 are included in prepaid expenses and other current assets and other assets on our balance sheet.
For interim reporting, our policy is to allocate our forecasted full-year sales incentives for most of our programs to each of our interim reporting periods in the same year that benefits from the programs. The allocation methodology is based on our forecasted sales incentives for the full year and the proportion of each interim period’s actual gross revenue or volume, as applicable, to our forecasted annual gross revenue or volume, as applicable. Based on our review of the forecasts at each interim period, any changes in estimates and the related allocation of sales incentives are recognized beginning in the interim period that they are identified. In addition, we apply a similar allocation methodology for interim reporting purposes for certain advertising and other marketing activities. Our annual consolidated financial statements are not impacted by this interim allocation methodology.
Advertising and other marketing activities, reported as selling, general and administrative expenses, totaled $ 5.4 billion in 2025, $ 5.9 billion in 2024 and $ 5.7 billion in 2023, including advertising expenses of $ 3.4 billion in 2025, $ 3.9 billion in 2024 and $ 3.8  billion in 2023. Deferred advertising costs are not expensed until the year first used and consist of:
• media and personal service prepayments;
• promotional materials in inventory; and
• production costs of future media advertising.
Deferred advertising costs of $ 48 million and $ 58 million as of December 27, 2025 and December 28, 2024, respectively, are classified as prepaid expenses and other current assets on our balance sheet.
Distribution Costs
Distribution costs, including the costs of shipping and handling activities, which include certain merchandising activities, are reported as selling, general and administrative expenses. Shipping and handling expenses were $ 16.7 billion in 2025, $ 16.0 billion in 2024 and $ 15.4 billion in 2023.
Software Costs
We capitalize certain computer software and software development costs incurred in connection with developing or obtaining computer software for internal use when both the preliminary project stage is completed and it is probable that the software will be used as intended. Capitalized software costs include (1) external direct costs of materials and services utilized in developing or obtaining computer software, (2) compensation and related benefits for employees who are directly associated with the software projects and (3) interest costs incurred while developing internal-use computer software. Capitalized software costs are included in property, plant and equipment on our balance sheet and amortized on a straight-line basis when placed into service over the estimated useful lives of the software, which approximate five to 10 years. Software amortization totaled $ 260 million in 2025, $ 199 million in 2024 and $ 159 million in 2023. Net capitalized software and development costs were $ 1.8 billion and $ 1.5 billion as of December 27, 2025 and December 28, 2024, respectively.
Commitments and Contingencies
We are subject to various claims and contingencies related to lawsuits, certain taxes and environmental matters, as well as commitments under contractual and other commercial obligations. We recognize liabilities for contingencies and commitments when a loss is probable and estimable.

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Research and Development
We engage in a variety of research and development activities and continue to invest to accelerate growth and to drive innovation globally. Consumer research is excluded from research and development costs and included in other marketing costs. Research and development costs were $ 839 million, $ 813 million and $ 804  million in 2025, 2024 and 2023, respectively, and are reported within selling, general and administrative expenses.
Goodwill and Other Intangible Assets
Indefinite-lived intangible assets and goodwill are not amortized and, as a result, are assessed for impairment at least annually, using either a qualitative or quantitative approach. We perform this annual assessment during our third quarter, or more frequently if circumstances indicate that the carrying value may not be recoverable. Where we use the qualitative assessment, first we determine if, based on qualitative factors, it is more likely than not that an impairment exists. Factors considered include macroeconomic conditions (including those related to volatile geopolitical conditions and a high interest rate and inflationary cost environment), industry and competitive conditions, legal and regulatory environment, historical financial performance and significant changes in the brand or reporting unit. If the qualitative assessment indicates that it is more likely than not that an impairment exists, then a quantitative assessment is performed.
In the quantitative assessment for indefinite-lived intangible assets and goodwill, an assessment is performed to determine the fair value of the indefinite-lived intangible asset and the reporting unit, respectively. Estimated fair value is determined using discounted cash flows and requires an analysis of several estimates including future cash flows or income consistent with management’s strategic business plans, annual sales growth rates, perpetuity growth assumptions and the selection of assumptions underlying a discount rate (weighted-average cost of capital) based on market data available at the time. Significant management judgment is necessary to estimate the impact of competitive operating, macroeconomic and other factors (including those related to volatile geopolitical conditions and a high interest rate and inflationary cost environment) to estimate future levels of sales, operating profit or cash flows. All assumptions used in our impairment evaluations for indefinite-lived intangible assets and goodwill, such as forecasted growth rates (including perpetuity growth assumptions) and weighted-average cost of capital, are based on the best available market information and are consistent with our internal forecasts and operating plans. A deterioration in these assumptions could adversely impact our results.
Amortizable intangible assets are only evaluated for impairment upon a significant change in the operating or macroeconomic environment. If an evaluation of the undiscounted future cash flows indicates impairment, the asset is written down to its estimated fair value, which is based on its discounted future cash flows.
See Note 4 for further information.
Other Significant Accounting Policies
Our other significant accounting policies are disclosed as follows:
• Basis of Presentation – Note 1 includes a description of our policies regarding use of estimates, basis of presentation and consolidation.
• Income Taxes – Note 5.
• Share-Based Compensation – Note 6.
• Pension, Retiree Medical and Savings Plans – Note 7.
• Financial Instruments – Note 9.
• Leases – Note 12.

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• Acquisitions and Divestitures – Note 13.
• Supply Chain Financing Arrangements – Note 14 .
• Cash Equivalents – Cash equivalents are highly liquid investments with original maturities of three months or less.
• Inventories – 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. For inventories valued under the LIFO method, the differences between the LIFO and FIFO methods of valuing inventories are not material.
• Property, Plant and Equipment – Note 15. Property, plant and equipment is recorded at historical cost. Depreciation is recognized on a straight-line basis over an asset’s estimated useful life. Construction in progress is not depreciated until ready for service.
• Translation of Financial Statements of Foreign Subsidiaries – Generally, financial statements of foreign subsidiaries are translated into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for revenues and expenses. Adjustments resulting from translating net assets are reported as a separate component of accumulated other comprehensive loss within common shareholders’ equity as currency translation adjustment. For foreign subsidiaries operating in highly inflationary economies, the reporting currency of the immediate parent becomes the functional currency. Non-functional currency monetary assets and liabilities are remeasured at period-end exchange rates, with the impact of any changes in exchange rates included in net income. Non-monetary assets and liabilities are carried forward at historical exchange rates starting from when hyperinflationary accounting is implemented.

Recently Issued Accounting Pronouncements
Adopted
In December 2023, the Financial Accounting Standards Board (FASB) issued guidance to enhance transparency of income tax disclosures. On an annual basis, the new guidance requires a public entity to disclose: (1) specific categories in the rate reconciliation, (2) additional information for reconciling items that are equal to or greater than 5% of the amount computed by multiplying income (or loss) from continuing operations before income tax expense (or benefit) by the applicable statutory income tax rate, (3) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, with foreign taxes disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than 5% of total income taxes paid, (4) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and (5) income tax expense (or benefit) from continuing operations disaggregated between federal (national), state and foreign. We adopted the guidance in our 2025 annual reporting, on a prospective basis. See Note 5 for further information.
Not Yet Adopted
In September 2025, the FASB issued guidance to improve the accounting for costs related to internal-use software. The new guidance eliminates project stages and requires capitalizing software costs to begin when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. When evaluating if a project is probable to be completed, significant development uncertainty must be assessed. Additionally, disclosures for property, plant and equipment will be required for all capitalized software costs. The guidance is effective in the first quarter of 2028 with early adoption permitted as of the beginning of an annual reporting period. Upon adoption, the guidance may be applied prospectively, retrospectively or using a modified transition approach. We are evaluating the impact of this guidance on our consolidated financial statements.

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In July 2025, the FASB issued guidance to provide for a practical expedient that an entity may assume that conditions as of the balance sheet date remain unchanged over the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from revenue transactions from contracts with customers. The guidance is effective in the first quarter of 2026 with early adoption permitted, to be applied on a prospective basis. We will adopt the guidance when it becomes effective. The guidance is not expected to have a material impact on our consolidated financial statements.
In November 2024, the FASB issued guidance to improve the disclosure of expenses in commonly presented expense captions. The new guidance requires a public entity to provide tabular disclosure, on an annual and interim basis, of amounts for the following expense categories: (1) purchases of inventory, (2) employee compensation, (3) depreciation and (4) intangible asset amortization, as included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement that contains any of the expense categories noted. Additionally, on an annual and interim basis, a qualitative description is required for amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. The guidance also requires certain amounts that are currently required to be disclosed to be included in the same tabular disclosure as these disaggregation requirements. Furthermore, on an annual and interim basis, a public entity is required to separately disclose selling expenses and annually, disclose a description of the selling expenses. The guidance is effective for 2027 annual reporting, and in the first quarter of 2028 for interim reporting, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. We will adopt the guidance when it becomes effective, in our 2027 annual reporting and each quarter thereafter, on a prospective basis.

Note 3 — Restructuring and Impairment Charges
2019 Multi-Year Productivity Plan
The 2019 Productivity Plan leverages new technology and business models to further simplify, harmonize and automate processes; re-engineers our go-to-market and information systems, including deploying the right automation for each market; and simplifies our organization and optimizes our manufacturing and supply chain footprint. To build on the successful implementation of the 2019 Productivity Plan, in 2024, we further expanded and extended the plan through the end of 2030 to take advantage of additional opportunities within the initiatives described above. As a result, we expect to incur pre-tax charges of approximately $ 6.15  billion, including cash expenditures of approximately $ 5.1  billion. These pre-tax charges are expected to consist of approximately 50 % of severance and other employee-related costs, 15 % 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 plan pre-tax charges are expected to be incurred by segment approximately as follows:

PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Corporate
Expected pre-tax charges 20   % 25   % 2   % 25   % 10   % 3   % 15   %

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

2025 2024 2023
Cost of sales $ 236   $ 133   $ 13  
Selling, general and administrative expenses 728   551   433  
Impairment of intangible assets —   14   —  
Other pension and retiree medical benefits expense/(income) (a)
19   29   ( 1 )
Total restructuring and impairment charges $ 983   $ 727   $ 445  
After-tax amount $ 792   $ 563   $ 349  
Impact on net income attributable to PepsiCo per common share $ ( 0.58 ) $ ( 0.41 ) $ ( 0.25 )

2025 2024 2023 Plan to Date
through 12/27/2025

PFNA $ 344   $ 161   $ 42   $ 776  
PBNA 281   238   41   786  
IB Franchise 14   24   11   65  
EMEA 195   116   227   956  
LatAm Foods 52   49   29   299  
Asia Pacific Foods 12   9   8   99  
Corporate 66   101   88   484  
964   698   446   3,465  
Other pension and retiree medical benefits expense/(income) (a)
19   29   ( 1 ) 145  
Total $ 983   $ 727   $ 445   $ 3,610  

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

Plan to Date
through 12/27/2025

Severance and other employee costs $ 1,789  
Asset impairments 546  
Other costs 1,275  
Total $ 3,610  

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 consulting and other professional fees, as well as contract termination costs.

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A summary of our 2019 Productivity Plan is as follows:

Severance and Other Employee Costs Asset
Impairments Other Costs Total

Liability as of December 31, 2022
$ 188   $ —   $ 8   $ 196  
2023 restructuring charges 243   2   200   445  
Cash payments (a)
( 242 ) —   ( 192 ) ( 434 )
Non-cash charges and translation ( 1 ) ( 2 ) ( 7 ) ( 10 )
Liability as of December 30, 2023
188   —   9   197  
2024 restructuring charges 384   114   229   727  
Cash payments (a)
( 204 ) —   ( 232 ) ( 436 )
Non-cash charges and translation ( 30 ) ( 114 ) 20   ( 124 )
Liability as of December 28, 2024
338   —   26   364  
2025 restructuring charges 355   240   388   983  
Cash payments (a)
( 384 ) —   ( 412 ) ( 796 )
Non-cash charges and translation ( 1 ) ( 240 ) 16   ( 225 )
Liability as of December 27, 2025
$ 308   $ —   $ 18   $ 326  

(a) Excludes cash expenditures of $ 12 million in 2025 , $ 7  million in 2024 and $ 1  million in 2023, reported in the cash flow statement in pension and retiree medical plan contributions.
Substantially all of the restructuring accrual at December 27, 2025 is expected to be paid by the end of 2026.
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.
For information on additional impairment charges, see Notes 1, 4 and 9.

Note 4 — Intangible Assets
A summary of our amortizable intangible assets is as follows:

  2025 2024 2023
Average
Useful Life (Years) Gross Accumulated
Amortization Net Gross Accumulated
Amortization Net
Acquired franchise rights 56 – 60
$ 835   $ ( 244 ) $ 591   $ 821   $ ( 223 ) $ 598  
Customer relationships (a)
15 – 24
773   ( 347 ) 426   565   ( 279 ) 286  
Brands 20 – 40
1,084   ( 1,021 ) 63   1,051   ( 977 ) 74  
Other identifiable intangibles 10 – 24
433   ( 294 ) 139   420   ( 276 ) 144  
Total $ 3,125   $ ( 1,906 ) $ 1,219   $ 2,857   $ ( 1,755 ) $ 1,102  
Amortization expense $ 83   $ 74   $ 75  

(a) Increase is primarily related to acquisitions of poppi and Siete. See Note 13 for further information on acquisitions.

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Amortization is recognized on a straight-line basis over an intangible asset’s estimated useful life. Amortization of intangible assets for each of the next five years , based on existing intangible assets as of December 27, 2025 and using average 2025 foreign exchange rates, is expected to be as follows:

2026 2027 2028 2029 2030
Five-year projected amortization $ 78   $ 74   $ 73   $ 72   $ 63  

Depreciable and amortizable assets are evaluated for impairment upon a significant change in the operating or macroeconomic environment. In these circumstances, if an evaluation of the undiscounted cash flows indicates impairment, the asset is written down to its estimated fair value, which is based on discounted future cash flows. Useful lives are periodically evaluated to determine whether events or circumstances have occurred which indicate the need for revision.
Indefinite-Lived Intangible Assets
In 2025, business performance in conjunction with lower expectations of future business performance compared to projections, as well as the transaction discussed below, indicated a deterioration of the significant inputs used to determine the fair value of our indefinite-lived intangible assets in certain markets and required us to perform quantitative assessments on certain assets. The fair value of our indefinite-lived intangible assets was estimated using discounted cash flows under the income approach, which we consider to be a Level 3 (significant unobservable inputs) measurement. We determined that the carrying value exceeded the fair value, which reflected our most current estimates of future sales and their contributions to operating profit and expected future cash flows (including perpetuity growth assumptions), as well as an increase in the weighted-average cost of capital. As a result of the quantitative assessments, we recorded pre-tax impairment charges of $ 1.9  billion ($ 1.5  billion after-tax or $ 1.11 per share) in impairment of intangible assets primarily comprised of the Rockstar brand in our PBNA, EMEA, and IB Franchise segments.
On August 28, 2025, we consummated a transaction with Celsius, pursuant to which we acquired convertible preferred shares and transferred cash and certain non-cash assets, primarily the Rockstar brand of $ 0.5  billion in the United States and Canada (Celsius Transaction). For further information on the convertible preferred shares, see Note 9. On the same date, we entered into an agreement with Celsius to be the exclusive distributor for the Alani Nu brand in certain channels in the United States and Canada that commenced in the fourth quarter of 2025.
As discussed in Note 2, we perform our annual impairment assessment on indefinite-lived intangible assets during our third quarter. The annual impairment assessment on indefinite-lived intangible assets performed in the third quarter of 2025, based on best available market information and our internal forecasts and operating plans at the time, did not result in any further material impairment charges.
As of December 27, 2025, the estimated fair value of the SodaStream reporting unit narrowly exceeded its carrying value. Given the low coverage, there could be further impairment to the carrying value of the SodaStream reporting unit goodwill if future sales and operating profit results are not in line with the forecasted future cash flows of the business and/or if macroeconomic conditions worsen and drive an increase in the weighted-average cost of capital used to estimate its fair value. We continue to monitor the performance of the SodaStream reporting unit, as well as all of our indefinite-lived intangible assets.
We did not recognize any impairment charges for goodwill in the years ended December 27, 2025 and December 28, 2024.
In 2023, macroeconomic conditions, including higher interest rates, inflationary costs, and the ongoing conflict in the Middle East, and recent business performance indicated a deterioration of the significant inputs used to determine the fair value of our indefinite-lived intangible assets in various markets,

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primarily assumptions underlying the weighted-average cost of capital and the impact of economic uncertainty on current and future financial performance, and required us to perform a quantitative assessment on certain assets. The fair value of our indefinite-lived intangible assets was estimated using discounted cash flows under the income approach, which we consider to be a Level 3 measurement. We determined that the carrying value exceeded the fair value for certain of our intangible assets, which reflects the increase in the weighted-average cost of capital as well as our most current estimates of future sales and their contributions to operating profit and expected future cash flows (including perpetuity growth assumptions). As a result of the quantitative assessment, we recorded pre-tax impairment charges of $ 0.6  billion ($ 0.5  billion after-tax or $ 0.35 per share) for brands and $ 0.3  billion ($ 0.3  billion after-tax or $ 0.22 per share) for goodwill, both in impairment of intangible assets, primarily related to the SodaStream brand and reporting unit in our IB Franchise segment, in the year ended December 30, 2023. See Note 1 for further information.
For further information on our policies for indefinite-lived intangible assets, see Note 2.
The components of indefinite-lived intangible assets are as follows:

2025 2024
Goodwill $ 18,916   $ 17,534  
Other indefinite-lived intangible assets
Reacquired franchise rights 7,542   7,437  
Acquired franchise rights (a)
2,099   1,858  
Brands (b)
4,206   4,404  
Total indefinite-lived intangible assets $ 32,763   $ 31,233  

(a) Increase is primarily related to acquired distribution rights for the Alani Nu brand.
(b) Decrease is primarily related to impairments of the Rockstar and Be & Cheery brands as well as the sale of the Rockstar brand in connection with the transaction described above, partially offset by acquisitions of poppi and Siete. See Note 13 for further information on acquisitions.
The change in the book value of goodwill is as follows:

PFNA PBNA IB Franchise EMEA (a)
LatAm Foods Asia Pacific Foods Total
Balance as of December 30, 2023
$ 642   $ 11,961   $ 1,986   $ 2,382   $ 393   $ 364   $ 17,728  
Acquisitions (b)
159   —   —   —   —   3   162  

Translation and other ( 10 ) ( 36 ) ( 68 ) ( 188 ) ( 39 ) ( 15 ) ( 356 )
Balance as of December 28, 2024
791   11,925   1,918   2,194   354   352   17,534  
Acquisitions (b)
625   179   —   —   —   —   804  
Translation and other 6   21   3   494   31   23   578  
Balance as of December 27, 2025
$ 1,422   $ 12,125   $ 1,921   $ 2,688   $ 385   $ 375   $ 18,916  

(a) Translation and other in 2024 primarily reflects the depreciation of the Russian ruble and euro. Translation and other in 2025 primarily reflects appreciation of the Russian ruble, euro and South African rand.
(b) Primarily related to the acquisitions of Sabra in 2024 and Siete in 2025 in our PFNA segment and poppi in our PBNA segment. See Note 13 for further information on acquisitions.

Note 5 — Income Taxes
The components of income before income taxes are as follows:

2025 2024 2023
United States $ 806   $ 2,590   $ 4,120  
Foreign 9,438   9,356   7,297  
$ 10,244   $ 11,946   $ 11,417  

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The provision for income taxes consisted of the following:

2025 2024 2023
Current:
U.S. Federal $ 299   $ 1,033   $ 1,133  
Foreign 1,583   1,406   1,201  
State 42   255   309  
1,924   2,694   2,643  
Deferred:
U.S. Federal 116   ( 306 ) ( 109 )
Foreign ( 116 ) ( 10 ) ( 212 )
State 25   ( 58 ) ( 60 )
25   ( 374 ) ( 381 )
$ 1,949   $ 2,320   $ 2,262  

A reconciliation of the U.S. Federal statutory tax rate to our 2025 annual tax rate is as follows:

Amount Tax Rate
U.S. Federal statutory tax $ 2,151   21.0   %
State income tax, net of U.S. Federal tax benefit (a)
25   0.2  
Changes in valuation allowances 12   0.1  
Foreign tax effects
Ireland
Statutory income tax rate differential ( 119 ) ( 1.2 )
Other 24   0.2  
Singapore
Tax incentive ( 113 ) ( 1.1 )
Other ( 26 ) ( 0.3 )
Switzerland
Changes in valuation allowances ( 149 ) ( 1.5 )
Other 32   0.3  
Bermuda
Statutory income tax rate differential ( 310 ) ( 3.0 )
Other foreign jurisdictions 21   0.2  

Effect of cross-border tax laws (b)

Transfer pricing adjustments 128   1.3  
Global intangible low-tax income (GILTI) 115   1.1  
Other ( 110 ) ( 1.0 )
Tax credits ( 29 ) ( 0.3 )
Changes in unrecognized tax benefits 181   1.8  
Nondeductible and nontaxable items, net ( 31 ) ( 0.3 )
Other 147   1.5  
Reported tax $ 1,949   19.0   %

(a) State taxes in California, Illinois, New Jersey, Texas, Minnesota, Oregon, Wisconsin, Louisiana, Michigan, and Arizona make up the majority (greater than 50%) of the tax effect in this category.
(b) Includes the impact of any tax credits.

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A reconciliation of the U.S. Federal statutory tax rate to our 2024 and 2023 annual tax rate is as follows:

2024 2023
U.S. Federal statutory tax rate 21.0   % 21.0   %
State income tax, net of U.S. Federal tax benefit 1.3   1.8  
Lower taxes on foreign results ( 2.5 ) ( 2.5 )

Juice Transaction —   ( 0.1 )

Other, net ( 0.4 ) ( 0.4 )
Annual tax rate 19.4   % 19.8   %

A summary of income taxes paid in 2025 is as follows:

Amount
U.S. Federal $ 1,107  
U.S. State and Local (a)
243  

Foreign
Ireland 424  
Mexico 313  
Russia 237  

Other 759  
1,733  
Total $ 3,083  

(a) No single state or local jurisdiction accounts for more than 5 % of the total income taxes paid.
Tax Cuts and Jobs Act
As of December 27, 2025, our mandatory transition tax liability was $ 965  million, which must be paid in 2026 and will represent our final payment under the provisions of the TCJ Act. We reduced our liability through cash payments by $ 772 million in 2025 , $ 579  million in 2024 and $ 309  million in 2023.
The TCJ Act also created a requirement that certain income earned by foreign subsidiaries, known as GILTI, must be included in the gross income of their U.S. shareholder. The FASB allows an accounting policy election of either recognizing deferred taxes for temporary differences expected to reverse as GILTI in future years or recognizing such taxes as a current-period expense when incurred. We elected to treat the tax effect of GILTI as a current-period expense when incurred.
Other Tax Matters
On July 4, 2025, the One Big Beautiful Bill (OBBB) Act, which includes a broad range of tax reform provisions, was signed into law in the United States. The OBBB Act did not have a material impact on our annual effective tax rate in 2025 and we do not expect it to have a material impact in 2026.
Numerous countries, including European Union member states, have enacted or are expected to enact legislation incorporating the OECD model rules for a global minimum tax rate of 15 % with widespread implementation expected by the end of 2026. Legislation enacted as of December 27, 2025 did not have a material impact on our financial statements for 2025. As the legislation becomes effective in countries in which we do business, our taxes will increase and negatively impact our provision for income taxes.
In 2024 and 2023, tax benefits of $ 54  million ($ 0.04 per share) and $ 68  million ($ 0.05 per share), respectively, were recorded related to the impairment of certain consolidated investments.

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Deferred tax liabilities and assets are comprised of the following:

2025 2024
Deferred tax liabilities
Property, plant and equipment $ 2,047   $ 1,868  
Right-of-use assets 819   772  
Debt guarantee of wholly-owned subsidiary 578   578  
Recapture of net operating losses 488   488  
Pension liabilities 238   112  

Other 486   301  
Gross deferred tax liabilities 4,656   4,119  

Deferred tax assets
Net carryforwards 6,849   6,737  
Intangible assets other than nondeductible goodwill 1,996   1,599  
Lease liabilities 819   773  
Share-based compensation 141   148  
Retiree medical benefits 96   104  
Other employee-related benefits 372   415  

Deductible state tax and interest benefits 181   202  
Capitalized research and development 134   256  
Other 927   948  
Gross deferred tax assets 11,515   11,182  
Valuation allowances ( 6,120 ) ( 6,185 )
Deferred tax assets, net 5,395   4,997  
Net deferred tax (assets)/liabilities $ ( 739 ) $ ( 878 )

A summary of our valuation allowance activity is as follows:

2025 2024 2023
Balance, beginning of year $ 6,185   $ 6,478   $ 5,013  
(Benefit)/provision ( 284 ) ( 198 ) 1,419  
Other additions/(deductions) 219   ( 95 ) 46  
Balance, end of year $ 6,120   $ 6,185   $ 6,478  

Reserves
A number of years may elapse before a particular matter, for which we have established a reserve, is audited and finally resolved. The number of years with open tax audits varies depending on the tax jurisdiction. Our major taxing jurisdictions and the related open tax audits are as follows:

Jurisdiction
Years Open to Audit Years Currently Under Audit
United States
2014-2024 2014-2019
Mexico
2014-2024 2014-2020
Canada (Domestic)
2021-2024 2021
Canada (International)
2012-2024 2012-2021
Russia
2022-2024 None

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Our annual tax rate is based on our income, statutory tax rates and tax planning strategies and transactions, including transfer pricing arrangements, available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our annual tax rate and in evaluating our tax positions. We establish reserves when, despite our belief that our tax return positions are fully supportable, we believe that certain positions are subject to challenge and that we likely will not succeed. We adjust these reserves, as well as the related interest, in light of changing facts and circumstances, such as the progress of a tax audit, new tax laws, relevant court cases or tax authority settlements. Settlement of any particular issue would usually require the use of cash. Favorable resolution would be recognized as a reduction to our annual tax rate in the year of resolution.
As of December 27, 2025, the total gross amount of reserves for income taxes, reported in other liabilities, was $ 2.4  billion. We accrue interest related to reserves for income taxes in our provision for income taxes and any associated penalties are recorded in selling, general and administrative expenses. The gross amount of interest accrued, reported in other liabilities, was $ 450  million as of December 27, 2025, of which $ 2 million of tax benefit was recognized in 2025, reflecting the release of federal interest accruals. The gross amount of interest accrued, reported in other liabilities, was $ 469 million as of December 28, 2024, of which $ 103 million of tax expense was recognized in 2024.
A reconciliation of unrecognized tax benefits is as follows:

2025 2024
Balance, beginning of year $ 2,284   $ 2,093  
Additions for tax positions related to the current year 153   210  
Additions for tax positions from prior years 124   108  
Reductions for tax positions from prior years ( 76 ) ( 46 )
Settlement payments ( 114 ) ( 24 )
Statutes of limitations expiration ( 18 ) ( 31 )
Translation and other 23   ( 26 )
Balance, end of year $ 2,376   $ 2,284  

Carryforwards and Allowances
Operating loss carryforwards and income tax credits totaling $ 35.5 billion as of December 27, 2025 are being carried forward in a number of foreign and state jurisdictions where we are permitted to use tax operating losses and income tax credits from prior periods to reduce future taxable income or income tax liabilities. These operating losses and income tax credits will expire as follows: $ 0.8 billion in 2026, $ 29.9 billion between 2027 and 2044 and $ 4.8 billion may be carried forward indefinitely. We establish valuation allowances for our deferred tax assets if, based on the available evidence, it is not more likely than not that some portion or all of the deferred tax assets will be realized.
Undistributed International Earnings
As of December 27, 2025, we had approximately $ 12  billion of undistributed international earnings. We intend to continue to reinvest $ 12  billion of earnings outside the United States for the foreseeable future and while future distribution of these earnings would not be subject to U.S. federal tax expense, no deferred tax liabilities with respect to items such as certain foreign exchange gains or losses, foreign withholding taxes or state taxes have been recognized. It is not practicable for us to determine the amount of unrecognized tax expense on these reinvested international earnings.

Note 6 — Share-Based Compensation
Our share-based compensation program is designed to attract and retain employees while also aligning employees’ interests with the interests of our shareholders. PepsiCo has granted stock options, RSUs,

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PSUs and long-term cash awards to employees under the shareholder-approved PepsiCo, Inc. Long-Term Incentive Plan (LTIP). Executives who are awarded long-term incentives based on their performance may generally elect to receive their grant in the form of stock options or RSUs, or a combination thereof. Executives who elect stock options receive four stock options for every one RSU that would have otherwise been granted. Certain executive officers and other senior executives do not have a choice and are granted 66 % PSUs and 34 % long-term cash, each of which are subject to pre-established performance targets.
The Company may use authorized and unissued shares to meet share requirements resulting from the exercise of stock options and the vesting of RSUs and PSUs.
As of December 27, 2025, 89 million shares were available for future share-based compensation grants under the LTIP.
The following table summarizes our total share-based compensation expense, which is primarily recorded in selling, general and administrative expenses, and excess tax benefits recognized:

2025 2024 2023
Share-based compensation expense - equity awards $ 288   $ 362   $ 380  
Share-based compensation expense - liability awards 13   7   19  
Restructuring charges ( 8 ) ( 5 ) ( 1 )
Total $ 293   $ 364   $ 398  
Income tax benefits recognized in earnings related to share-based compensation $ 53   $ 68   $ 73  
Excess tax benefits related to share-based compensation
$ 3   $ 33   $ 36  

As of December 27, 2025, there was $ 329 million of total unrecognized compensation cost related to nonvested share-based compensation grants. This unrecognized compensation cost is expected to be recognized over a weighted-average period of two years.
Method of Accounting and Our Assumptions
The fair value of share-based award grants is amortized to expense over the vesting period, primarily three years . Awards to employees eligible for retirement prior to the award becoming fully vested are amortized to expense over the period through the date that the employee first becomes eligible to retire and is no longer required to provide service to earn the award. In addition, we use historical data to estimate forfeiture rates and record share-based compensation expense only for those awards that are expected to vest.
We do not backdate, reprice or grant share-based compensation awards retroactively. Repricing of awards would require shareholder approval under the LTIP.
Stock Options
A stock option permits the holder to purchase shares of PepsiCo common stock at a specified price. We account for our employee stock options under the fair value method of accounting using a Black-Scholes valuation model to measure stock option expense at the date of grant. All stock option grants have an exercise price equal to the fair market value of our common stock on the date of grant and generally have a 10 -year term.

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

2025 2024 2023
Expected life 7 years 7 years 7 years
Risk-free interest rate 4.1   % 4.2   % 4.2   %
Expected volatility 16   % 16   % 16   %
Expected dividend yield 3.5   % 2.9   % 2.7   %

The expected life is the period over which our employee groups are expected to hold their options. It is based on our historical experience with similar grants. The risk-free interest rate is based on the expected U.S. Treasury rate over the expected life. Volatility reflects movements in our stock price over the most recent historical period equivalent to the expected life. Dividend yield is estimated over the expected life based on our stated dividend policy and forecasts of net income, share repurchases and stock price.
A summary of our stock option activity for the year ended December 27, 2025 is as follows:

Options (a)
Weighted-Average Exercise
Price Per Unit Weighted-Average Contractual
Life Remaining
(years) Aggregate Intrinsic
Value (a)

Outstanding at December 28, 2024
11,055   $ 143.88  
Granted 1,804   $ 150.28  
Exercised ( 896 ) $ 108.72  
Forfeited/expired ( 642 ) $ 163.52  
Outstanding at December 27, 2025
11,321   $ 146.60   6.0 $ 100,992  
Exercisable at December 27, 2025
6,279   $ 134.10   4.2 $ 98,385  
Expected to vest as of December 27, 2025
4,793   $ 162.45   8.2 $ 2,468  

(a) In thousands.
Restricted Stock Units and Performance Stock Units
Each RSU represents our obligation to deliver to the holder one share of PepsiCo common stock when the award vests at the end of the service period. PSUs are awards pursuant to which a number of shares are delivered to the holder upon vesting at the end of the service period based on PepsiCo’s performance against specified financial performance metrics. The number of shares may be increased to the maximum or reduced to the minimum threshold based on the results of these performance metrics in accordance with the terms established at the time of the award. During the vesting period, RSUs and PSUs accrue dividend equivalents that pay out in cash (without interest) if and when the applicable RSU or PSU vests and becomes payable.
The fair value of RSUs and PSUs is measured at the market price of the Company’s stock on the date of grant.

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A summary of our RSU and PSU activity for the year ended December 27, 2025 is as follows:

RSUs/PSUs (a)
Weighted-Average
Grant-Date Fair Value Per Unit Weighted-Average Contractual Life
Remaining (years) Aggregate
Intrinsic
Value (a)

Outstanding at December 28, 2024
5,366   $ 166.09  
Granted 2,199   $ 153.22  
Converted ( 1,849 ) $ 163.78  
Forfeited ( 607 ) $ 163.47  
Outstanding at December 27, 2025 (b)
5,109   $ 161.72   1.3 $ 734,635  
Expected to vest as of December 27, 2025 (c)
4,411   $ 162.11   1.2 $ 634,185  

(a) In thousands. Outstanding awards are disclosed at target.
(b) The outstanding PSUs for which the vesting period has not ended as of December 27, 2025, at the threshold, target and maximum award levels were zero , 0.7 million and 1.4 million, respectively.
(c) Represents the number of outstanding awards expected to vest, including estimated performance adjustments on all outstanding PSUs as of December 27, 2025.
Long-Term Cash
Certain executive officers and other senior executives were granted long-term cash awards for which final payout is based on PepsiCo’s total shareholder return relative to a specific set of peer companies and achievement of a specified performance target over a three-year performance period.
Long-term cash awards that qualify as liability awards under share-based compensation guidance are valued through the end of the performance period on a mark-to-market basis using the Monte Carlo simulation model.
A summary of our long-term cash activity for the year ended December 27, 2025 is as follows:

Long-Term Cash
Award (a)
Balance Sheet Date Fair Value (b)
Contractual Life Remaining
(years)
Outstanding at December 28, 2024
$ 53,970  
Granted 21,636  
Vested ( 11,274 )
Forfeited ( 7,297 )
Outstanding at December 27, 2025 (c)
$ 57,035   $ 36,064   1.2
Expected to vest as of December 27, 2025
$ 54,169   $ 33,597   1.2

(a) In thousands, disclosed at target.
(b) In thousands, based on the most recent valuation as of December 27, 2025.
(c) The outstanding awards for which the vesting period has not ended as of December 27, 2025, at the threshold, target and maximum award levels based on the achievement of its market conditions were zero , $ 57 million and $ 114 million, respectively.

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Other Share-Based Compensation Data
The following is a summary of other share-based compensation data: