SEC EDGAR · 10-Q

10-Q – 2025-10-09 – pep-20250906.htm

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Omsättning

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 54
9/6/2025 9/7/2024 9/6/2025 9/7/2024 | Net Revenue $ 23,937 $ 23,319 $ 64,582 $ 64,070 | Cost of sales 11,113 10,396 29,343 28,563
Net Revenue $ 23,937 $ 23,319 $ 64,582 $ 64,070 | Cost of sales 11,113 10,396 29,343 28,563 | Gross profit 12,824 12,923 35,239 35,507
Capital spending ( 2,499 ) ( 2,850 ) | Sales of property, plant and equipment 272 177 | Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets ( 3,176 ) ( 31 )
Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets ( 3,176 ) ( 31 ) | Divestitures, sales of investments in noncontrolled affiliates and other assets 5 145 | Short-term investments, by original maturity:
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the rules and regulations for reporting the Quarterly Report on Form 10-Q (Form 10-Q). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. We have subsidiaries operating in highly inflationary economies, such as Argentina, Eg | 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. | While our financial results in the United States and Canada (North America) are reported on a 12-week basis, all of our international operations are reported on a monthly calendar basis for which the months of June, July and August are reflected in our results for the 12 weeks ended September 6, 2025 and September 7, 2024, and the months of January through August are reflected in our results for the 36 weeks ended September 6, 2025 and September 7, 2024.
The preparation of our condensed consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and related disclosures. Additionally, the business and economic uncertainty resulting from volatile geopolitical conditions, an increasingly complex global tax environment, including changes in how existing laws are interpreted or enforced, expanded or retaliatory tariffs and changes in the in | Our significant interim accounting policies include the recognition of a pro rata share of certain estimated annual sales incentives and certain advertising and marketing costs in proportion to revenue or volume, as applicable, and the recognition of income taxes using an estimated annual effective tax rate. | Unless otherwise noted, tabular dollars are in millions, except per share amounts. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Certain reclassifications were made to the prior year’s financial statements to conform to the current year presentation.
Net Revenue, Significant Expenses and Operating Profit by Segment

Rörelseresultat

Impairment of intangible assets (see Notes 1 and 4) 133 24 1,993 24 | Operating Profit 3,569 3,872 7,941 10,637 | Other pension and retiree medical benefits income 26 41 91 155
Net Revenue, Significant Expenses and Operating Profit by Segment
— — — — 82 — | Segment operating profit $ 1,536 $ 729 $ 436 $ 720 $ 424 $ 151 $ 3,996 | Corporate unallocated expenses ( 427 )
Corporate unallocated expenses ( 427 ) | Operating profit 3,569 | Other pension and retiree medical benefits income 26
Segment operating profit $ 1,620 $ 914 $ 458 $ 713 $ 480 $ 129 $ 4,314 | Corporate unallocated expenses ( 442 )
Corporate unallocated expenses ( 442 ) | Operating profit 3,872 | Other pension and retiree medical benefits income 41
— — — — 82 — | Segment operating profit $ 4,463 $ 550 $ 1,248 $ 1,310 $ 1,301 $ 321 $ 9,193 | Corporate unallocated expenses ( 1,252 )
Corporate unallocated expenses ( 1,252 ) | Operating profit 7,941 | Other pension and retiree medical benefits income 91

Periodens resultat

Provision for income taxes 713 749 1,504 2,045 | Net income 2,618 2,945 5,740 8,092 | Less: Net income attributable to noncontrolling interests 15 15 40 37
Net income 2,618 2,945 5,740 8,092 | Less: Net income attributable to noncontrolling interests 15 15 40 37 | Net Income Attributable to PepsiCo $ 2,603 $ 2,930 $ 5,700 $ 8,055
Less: Net income attributable to noncontrolling interests 15 15 40 37 | Net Income Attributable to PepsiCo $ 2,603 $ 2,930 $ 5,700 $ 8,055 | Net Income Attributable to PepsiCo per Common Share
Net Income Attributable to PepsiCo $ 2,603 $ 2,930 $ 5,700 $ 8,055 | Net Income Attributable to PepsiCo per Common Share | Basic $ 1.90 $ 2.13 $ 4.16 5.86
9/6/2025 9/7/2024 9/6/2025 9/7/2024 | Net income $ 2,618 $ 2,945 $ 5,740 $ 8,092 | Other comprehensive income/(loss), net of taxes:
Operating Activities | Net income $ 5,740 $ 8,092 | Depreciation and amortization 2,315 2,118
Balance, beginning of period 71,547 71,545 72,266 70,035 | Net income attributable to PepsiCo 2,603 2,930 5,700 8,055 | Cash dividends declared (a)
Balance, beginning of period 141 134 130 134 | Net income attributable to noncontrolling interests 15 15 40 37 | Distributions to noncontrolling interests — — ( 15 ) ( 17 )

Kassaflöde

Net currency translation adjustment 39 ( 512 ) 1,436 ( 961 ) | Net change on cash flow hedges 23 ( 24 ) 27 21 | Net pension and retiree medical adjustments 21 21 12 41
(a) Excludes cash expenditures of $ 8 million reported in the cash flow statement in pension and retiree medical contributions. | The majority of the restructuring accrual at September 6, 2025 is expected to be paid within a year.
Derivatives designated as cash flow hedging instruments: | Foreign exchange contracts (h)
(a) Interest rate derivative losses/(gains) are included in net interest expense and other. These losses/(gains) are substantially offset by decreases/increases in the value of the underlying debt, which are also included in net interest expense and other. | Losses/(gains) on our cash flow hedges are categorized as follows:
(a) Foreign exchange derivative losses/(gains) are included in net revenue and cost of sales. Cross-currency interest rate swap derivative losses/(gains) are included in selling, general and administrative expenses. Commodity derivative losses/(gains) are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. See Note 11 for further information. | As of September 6, 2025, we expect to reclassify net gains of $ 74 million related to our cash flow hedges from accumulated other comprehensive loss within common shareholders’ equity into net income during the next 12 months. | 23
Currency Translation Adjustment Cash Flow Hedges Pension and Retiree Medical Available-for-Sale Debt Securities and Other (a) | Accumulated Other Comprehensive Loss Attributable to PepsiCo
Currency Translation Adjustment Cash Flow Hedges Pension and Retiree Medical Available-for-Sale Debt Securities and Other (a) | Accumulated Other Comprehensive Loss Attributable
Cash flow hedges: | Foreign exchange contracts $ — $ ( 1 ) $ ( 2 ) $ ( 1 ) Net revenue

Fritt kassaflöde

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 Productivity Plan, charges associated with our acquisitions and divestitures, impairment and other charges, indirect and income tax impact, product recall-related impact and the impact of settlement and curtailment gains and losses related to pension and retiree medical plans (see “It | 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
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 | See “Free Cash Flow” in “Our Liquidity and Capital Resources” for further information.
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 | See “Free Cash Flow” in “Our Liquidity and Capital Resources” for further information. | 44
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.”
272 177 | Free cash flow, non-GAAP measure $ 3,241 $ 3,547
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 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. See “Our Business Risks” included in this Form 10-Q, “Item 1A. Risk Fa | 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 flex

Likvida medel

Net Cash Used for Financing Activities ( 1,008 ) ( 5,282 ) | Effect of exchange rate changes on cash and cash equivalents and restricted cash 395 ( 391 ) | Net Decrease in Cash and Cash Equivalents and Restricted Cash ( 382 ) ( 2,418 )
Effect of exchange rate changes on cash and cash equivalents and restricted cash 395 ( 391 ) | Net Decrease in Cash and Cash Equivalents and Restricted Cash ( 382 ) ( 2,418 ) | Cash and Cash Equivalents and Restricted Cash, Beginning of Year 8,553 9,761
Net Decrease in Cash and Cash Equivalents and Restricted Cash ( 382 ) ( 2,418 ) | Cash and Cash Equivalents and Restricted Cash, Beginning of Year 8,553 9,761 | Cash and Cash Equivalents and Restricted Cash, End of Period $ 8,171 $ 7,343
Cash and Cash Equivalents and Restricted Cash, Beginning of Year 8,553 9,761 | Cash and Cash Equivalents and Restricted Cash, End of Period $ 8,171 $ 7,343
Current Assets | Cash and cash equivalents $ 8,126 $ 8,505 | Short-term investments 535 761
(j) Derivative assets and liabilities are presented on a gross basis on our balance sheet. Amounts subject to enforceable master netting arrangements or similar agreements which are not offset on our balance sheet as of September 6, 2025 and December 28, 2024 were not material . Collateral received or posted against our asset or liability positions was not material . Exchange-traded commodity futures are cash-settled on a daily basis and, therefore, not included in the table. | The carrying amounts of our cash and cash equivalents and short-term investments recorded at amortized cost approximate fair value (classified as Level 2 in the fair value hierarchy) due to their short-term maturity. The fair value of our debt obligations as of September 6, 2025 and December 28, 2024 was $ 48 billion and $ 40 billion, respectively, based upon prices of identical or similar instruments in the marketplace, which are considered Level 2 inputs. | Losses/(gains) on our fair value hedges recognized in the income statement are as follows:
our consolidated cash and cash equivalents and 39% of our accumulated currency translation adjustment loss as of September 6, 2025. | See Note 9 to our condensed consolidated financial statements in this Form 10-Q for the fair values of our financial instruments as of September 6, 2025 and December 28, 2024 and Note 9 to our consolidated financial statements in our Recast Segment Information for a discussion of these items.
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, inc | As of September 6, 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 September 6, 2025, Russia accounted for 15% 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 liquid

Nettoskuld

Other, net ( 441 ) ( 138 ) | Net Cash Provided by Operating Activities 5,468 6,220
Other investing, net ( 117 ) 15 | Net Cash Used for Investing Activities ( 5,237 ) ( 2,965 )
Other financing ( 18 ) ( 22 ) | Net Cash Used for Financing Activities ( 1,008 ) ( 5,282 ) | Effect of exchange rate changes on cash and cash equivalents and restricted cash 395 ( 391 )
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 | See “Free Cash Flow” in “Our Liquidity and Capital Resources” for further information.
Operating Activities | During the 36 weeks ended September 6, 2025, net cash provided by operating activities was $5.5 billion, compared to net cash provided by operating activities of $6.2 billion in the prior-year period. The de crease in operating cash flow primarily reflects unfavorable operating profit performance.
Investing Activities | During the 36 weeks ended September 6, 2025 , net cash used for investing activities was $5.2 billion , primarily reflecting net cash paid in connection with our acquisitions of poppi of $1.9 billion and Siete of $1.2 billion, as well as net capital spending of $2.2 billion. | We regularly review our plans with respect to ne t capital spending and believe that we have sufficient liquidity to meet our net capital spending needs.
Financing Activities | During the 36 weeks ended September 6, 2025, net cash used for financing activities was $1.0 billion, primarily reflecting the return of operating cash flow to our shareholders through dividend payments and share repurchases of $6.4 billion and payments of long-term debt borrowings of $3.2 billion, partially offset by proceeds from the issuances of long-term debt of $8.2 billion. | 48
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.”

Eget kapital

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: 1,369 and 1,372 shares, respectively)
( 41,609 ) ( 41,021 ) | Total PepsiCo Common Shareholders’ Equity 19,388 18,041 | Noncontrolling interests 155 130
Balance, end of period ( 498 ) ( 41,609 ) ( 494 ) ( 40,806 ) ( 498 ) ( 41,609 ) ( 494 ) ( 40,806 ) | Total PepsiCo Common Shareholders’ Equity 19,388 19,453 19,388 19,453 | Noncontrolling Interests
(a) Foreign exchange derivative losses/(gains) are included in net revenue and cost of sales. Cross-currency interest rate swap derivative losses/(gains) are included in selling, general and administrative expenses. Commodity derivative losses/(gains) are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. See Note 11 for further information. | As of September 6, 2025, we expect to reclassify net gains of $ 74 million related to our cash flow hedges from accumulated other comprehensive loss within common shareholders’ equity into net income during the next 12 months. | 23

Antal aktier

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ | Number of shares of Common Stock outstanding as of October 2, 2025 was 1,367,340,122 .
Diluted $ 1.90 $ 2.13 $ 4.15 5.84 | Weighted-average common shares outstanding | Basic 1,369 1,373 1,370 1,374
(a) Weighted-average common shares outstanding (in millions). | (b) The dilutive effect of these securities is calculated using the treasury stock method.

Antal anställda

(d) Based primarily on the price of our common stock. | (e) Based on the fair value of investments corresponding to employees’ investment elections. | (f) In connection with our acquisition of poppi, we recorded a liability at fair value for the contingent consideration payable upon achievement of certain performance milestones by the third quarter of 2027, with a maximum payment of $ 300 million. If these performance milestones are not met, no payment will be made. The fair value of the liability is estimated using discounted future cash flows based on a Monte Carlo simulation using significant unobservable inputs such as forecasts of net rev
Non-GAAP Measures | Certain financial measures contained in this Form 10-Q 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-Q provides additional information to facil | 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 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 ch

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)

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

For the quarterly period ended September 6, 2025 (36 weeks)
OR

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

For the transition period from            to             
Commission file number 1-1183

PepsiCo, Inc.

(Exact Name of Registrant as Specified in its Charter)

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

700 Anderson Hill Road , Purchase , New York 10577

(Address of principal executive offices and Zip Code)

( 914 ) 253-2000

Registrant’s telephone number, including area code

N/A

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

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

Title of each class Trading Symbols Name of each exchange on which registered
Common Stock, par value 1-2/3 cents per share PEP The Nasdaq Stock Market LLC
2.625% Senior Notes Due 2026 PEP26 The Nasdaq Stock Market LLC
0.750% Senior Notes Due 2027 PEP27 The Nasdaq Stock Market LLC
0.875% Senior Notes Due 2028 PEP28 The Nasdaq Stock Market LLC
0.500% Senior Notes Due 2028 PEP28A The Nasdaq Stock Market LLC
3.200% Senior Notes Due 2029 PEP29 The Nasdaq Stock Market LLC
1.125% Senior Notes Due 2031 PEP31 The Nasdaq Stock Market LLC
0.400% Senior Notes Due 2032 PEP32 The Nasdaq Stock Market LLC
0.750% Senior Notes Due 2033 PEP33 The Nasdaq Stock Market LLC
3.550% Senior Notes Due 2034 PEP34 The Nasdaq Stock Market LLC
3.450% Senior Notes Due 2037 PEP37 The Nasdaq Stock Market LLC
0.875% Senior Notes Due 2039 PEP39 The Nasdaq Stock Market LLC
1.050% Senior Notes Due 2050 PEP50 The Nasdaq Stock Market LLC
4.050% Senior Notes Due 2055 PEP55 The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes    ☒    No    ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes    ☒    No    ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨     
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes    ☐     No  ☒
Number of shares of Common Stock outstanding as of October 2, 2025 was  1,367,340,122 .

Table of Contents     

PepsiCo, Inc. and Subsidiaries

Table of Contents

Page No.
Part I Financial Information
Item 1. Condensed Consolidated Financial Statements 2

Condensed Consolidated Statement of Income –
12 and 3 6 Weeks Ended September 6, 2025 and September 7, 2024
2

Condensed Consolidated Statement of Comprehensive Income –
12 and 36 Weeks Ended September 6, 2025 and September 7, 2024
3

Condensed Consolidated Statement of Cash Flows –
36 Weeks Ended September 6, 2025 and September 7 , 2024
4

Condensed Consolidated Balance Sheet –
September 6, 2025 and December 28, 2024
6

Condensed Consolidated Statement of Equity –
12 and 36 Weeks Ended September 6, 2025 and September 7, 2024
7

Notes to the Condensed Consolidated Financial Statements
8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
31

Report of Independent Registered Public Accounting Firm 51

Item 3. Quantitative and Qualitative Disclosures About Market Risk
52

Item 4. Controls and Procedures
52

Part II Other Information
Item 1. Legal Proceedings
53

Item 1A. Risk Factors
53

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
54

Item 5. Other Information
54

Item 6. Exhibits
54

1

Table of Contents     

PART I FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements.

Condensed Consolidated Statement of Income
PepsiCo, Inc. and Subsidiaries
(in millions, except per share amounts, unaudited)  

12 Weeks Ended 36 Weeks Ended
  9/6/2025 9/7/2024 9/6/2025 9/7/2024
Net Revenue $ 23,937   $ 23,319   $ 64,582   $ 64,070  
Cost of sales 11,113   10,396   29,343   28,563  
Gross profit 12,824   12,923   35,239   35,507  
Selling, general and administrative expenses 9,122   9,027   25,305   24,846  

Impairment of intangible assets (see Notes 1 and 4) 133   24   1,993   24  
Operating Profit 3,569   3,872   7,941   10,637  
Other pension and retiree medical benefits income 26   41   91   155  
Net interest expense and other ( 264 ) ( 219 ) ( 788 ) ( 655 )
Income before income taxes 3,331   3,694   7,244   10,137  
Provision for income taxes 713   749   1,504   2,045  
Net income 2,618   2,945   5,740   8,092  
Less: Net income attributable to noncontrolling interests 15   15   40   37  
Net Income Attributable to PepsiCo $ 2,603   $ 2,930   $ 5,700   $ 8,055  
Net Income Attributable to PepsiCo per Common Share
Basic $ 1.90   $ 2.13   $ 4.16   5.86  
Diluted $ 1.90   $ 2.13   $ 4.15   5.84  
Weighted-average common shares outstanding
Basic 1,369   1,373   1,370   1,374  
Diluted 1,372   1,378   1,373   1,379  

See accompanying notes to the condensed consolidated financial statements.
2

Table of Contents     

Condensed Consolidated Statement of Comprehensive Income
PepsiCo, Inc. and Subsidiaries
(in millions, unaudited)

12 Weeks Ended 36 Weeks Ended
9/6/2025 9/7/2024 9/6/2025 9/7/2024
Net income $ 2,618   $ 2,945   $ 5,740   $ 8,092  
Other comprehensive income/(loss), net of taxes:
Net currency translation adjustment 39   ( 512 ) 1,436   ( 961 )
Net change on cash flow hedges 23   ( 24 ) 27   21  
Net pension and retiree medical adjustments 21   21   12   41  

Net change on available-for-sale debt securities and other 410   ( 351 ) 540   ( 219 )
Total other comprehensive income/(loss), net of taxes 493   ( 866 ) 2,015   ( 1,118 )
Comprehensive income 3,111   2,079   7,755   6,974  
Less: Comprehensive income attributable to
noncontrolling interests
15   15   40   37  
Comprehensive Income Attributable to PepsiCo $ 3,096   $ 2,064   $ 7,715   $ 6,937  

See accompanying notes to the condensed consolidated financial statements.
3

Table of Contents     

Condensed Consolidated Statement of Cash Flows
PepsiCo, Inc. and Subsidiaries
(in millions, unaudited)

  36 Weeks Ended
9/6/2025 9/7/2024
Operating Activities
Net income $ 5,740   $ 8,092  
Depreciation and amortization 2,315   2,118  
Impairment and other charges 1,960   10  

Product recall-related impact —   184  
Cash payments for product recall-related impact ( 5 ) ( 138 )
Operating lease right-of-use asset amortization 489   438  
Share-based compensation expense 207   260  
Restructuring and impairment charges 567   415  
Cash payments for restructuring charges ( 554 ) ( 284 )
Acquisition and divestiture-related charges 308   7  
Cash payments for acquisition and divestiture-related charges ( 80 ) ( 4 )
Pension and retiree medical plan expenses 164   114  
Pension and retiree medical plan contributions ( 400 ) ( 300 )
Deferred income taxes and other tax charges and credits 30   124  

Tax payments related to the Tax Cuts and Jobs Act (TCJ Act) ( 772 ) ( 579 )
Change in assets and liabilities:
Accounts and notes receivable ( 1,747 ) ( 1,521 )
Inventories ( 449 ) ( 492 )
Prepaid expenses and other current assets ( 223 ) ( 200 )
Accounts payable and other current liabilities ( 1,647 ) ( 2,312 )
Income taxes payable 6   426  
Other, net ( 441 ) ( 138 )
Net Cash Provided by Operating Activities 5,468   6,220  

Investing Activities
Capital spending ( 2,499 ) ( 2,850 )
Sales of property, plant and equipment 272   177  
Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets ( 3,176 ) ( 31 )
Divestitures, sales of investments in noncontrolled affiliates and other assets 5   145  
Short-term investments, by original maturity:
More than three months - purchases ( 190 ) ( 425 )
More than three months - maturities 425   —  

Three months or less, net 43   4  
Other investing, net ( 117 ) 15  
Net Cash Used for Investing Activities ( 5,237 ) ( 2,965 )
    

(Continued on following page)
4

Table of Contents     

Condensed Consolidated Statement of Cash Flows (continued)
PepsiCo, Inc. and Subsidiaries
(in millions, unaudited)

36 Weeks Ended
9/6/2025 9/7/2024
Financing Activities
Proceeds from issuances of long-term debt $ 8,179   $ 4,014  
Payments of long-term debt ( 3,245 ) ( 2,883 )

Short-term borrowings, by original maturity:
More than three months - proceeds 5,528   3,808  
More than three months - payments ( 5,417 ) ( 4,177 )
Three months or less, net 445   101  
Cash dividends paid ( 5,692 ) ( 5,369 )
Share repurchases ( 752 ) ( 760 )
Proceeds from exercises of stock options 76   138  
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted ( 112 ) ( 132 )
Other financing ( 18 ) ( 22 )
Net Cash Used for Financing Activities ( 1,008 ) ( 5,282 )
Effect of exchange rate changes on cash and cash equivalents and restricted cash 395   ( 391 )
Net Decrease in Cash and Cash Equivalents and Restricted Cash ( 382 ) ( 2,418 )
Cash and Cash Equivalents and Restricted Cash, Beginning of Year 8,553   9,761  
Cash and Cash Equivalents and Restricted Cash, End of Period $ 8,171   $ 7,343  

Supplemental Non-Cash Activity
Right-of-use assets obtained in exchange for lease obligations $ 542   $ 869  
Investment obtained for certain assets (see Notes 4 and 9) $ 554   $ —  

See accompanying notes to the condensed consolidated financial statements.
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Condensed Consolidated Balance Sheet
PepsiCo, Inc. and Subsidiaries
(in millions, except per share amounts)

(Unaudited)
9/6/2025 12/28/2024
ASSETS
Current Assets
Cash and cash equivalents $ 8,126   $ 8,505  
Short-term investments 535   761  
Accounts and notes receivable, less allowance ($ 245 and $ 356 , respectively)
12,634   10,333  
Inventories:
Raw materials and packaging 2,805   2,440  
Work-in-process 154   104  
Finished goods 3,134   2,762  
6,093   5,306  
Prepaid expenses and other current assets 1,334   921  
Total Current Assets 28,722   25,826  
Property, plant and equipment 59,309   56,005  
Accumulated depreciation ( 30,256 ) ( 27,997 )
Property, Plant and Equipment, net 29,053   28,008  
Amortizable Intangible Assets, net 1,241   1,102  
Goodwill 18,845   17,534  
Other Indefinite-Lived Intangible Assets 13,611   13,699  

Investments in Noncontrolled Affiliates 2,084   1,985  
Deferred Income Taxes 4,341   4,362  
Other Assets 8,661   6,951  
Total Assets $ 106,558   $ 99,467  

LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations $ 6,736   $ 7,082  
Accounts payable and other current liabilities 24,763   24,454  
Total Current Liabilities 31,499   31,536  
Long-Term Debt Obligations 44,113   37,224  
Deferred Income Taxes 3,474   3,484  
Other Liabilities 7,929   9,052  
Total Liabilities 87,015   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: 1,369 and 1,372 shares, respectively)
23   23  
Capital in excess of par value 4,374   4,385  
Retained earnings 72,197   72,266  
Accumulated other comprehensive loss ( 15,597 ) ( 17,612 )
Repurchased common stock, in excess of par value ( 498 and 495 shares, respectively)
( 41,609 ) ( 41,021 )
Total PepsiCo Common Shareholders’ Equity 19,388   18,041  
Noncontrolling interests 155   130  
Total Equity 19,543   18,171  
Total Liabilities and Equity $ 106,558   $ 99,467  

See accompanying notes to the condensed consolidated financial statements.
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Condensed Consolidated Statement of Equity
PepsiCo, Inc. and Subsidiaries
(in millions, except per share amounts, unaudited)
12 Weeks Ended 36 Weeks Ended
9/6/2025 9/7/2024 9/6/2025 9/7/2024
Shares Amount Shares Amount Shares Amount Shares Amount

Common Stock
Balance, beginning of period 1,371   $ 23   1,374   $ 23   1,372   $ 23   1,374   $ 23  
Change in repurchased common stock ( 2 ) —   ( 1 ) —   ( 3 ) —   ( 1 ) —  
Balance, end of period 1,369   23   1,373   23   1,369   23   1,373   23  
Capital in Excess of Par Value
Balance, beginning of period 4,299   4,203   4,385   4,261  
Share-based compensation expense 75   76   204   255  

Stock option exercises, RSUs and PSUs converted 4   9   ( 96 ) ( 95 )
Withholding tax on RSUs and PSUs converted ( 1 ) ( 1 ) ( 112 ) ( 132 )
Other ( 3 ) ( 6 ) ( 7 ) ( 8 )
Balance, end of period 4,374   4,281   4,374   4,281  
Retained Earnings
Balance, beginning of period 71,547   71,545   72,266   70,035  
Net income attributable to PepsiCo 2,603   2,930   5,700   8,055  
Cash dividends declared (a)
( 1,953 ) ( 1,868 ) ( 5,769 ) ( 5,483 )
Balance, end of period 72,197   72,607   72,197   72,607  
Accumulated Other Comprehensive Loss
Balance, beginning of period ( 16,090 ) ( 15,786 ) ( 17,612 ) ( 15,534 )
Other comprehensive income/(loss) attributable to PepsiCo 493   ( 866 ) 2,015   ( 1,118 )
Balance, end of period ( 15,597 ) ( 16,652 ) ( 15,597 ) ( 16,652 )
Repurchased Common Stock
Balance, beginning of period ( 496 ) ( 41,361 ) ( 493 ) ( 40,539 ) ( 495 ) ( 41,021 ) ( 493 ) ( 40,282 )
Share repurchases ( 2 ) ( 263 ) ( 2 ) ( 294 ) ( 5 ) ( 760 ) ( 5 ) ( 762 )
Stock option exercises, RSUs and PSUs converted —   15   1   23   2   172   4   233  
Other —   —   —   4   —   —   —   5  
Balance, end of period ( 498 ) ( 41,609 ) ( 494 ) ( 40,806 ) ( 498 ) ( 41,609 ) ( 494 ) ( 40,806 )
Total PepsiCo Common Shareholders’ Equity 19,388   19,453   19,388   19,453  
Noncontrolling Interests
Balance, beginning of period 141   134   130   134  
Net income attributable to noncontrolling interests 15   15   40   37  
Distributions to noncontrolling interests —   —   ( 15 ) ( 17 )

Other, net ( 1 ) 3   —   ( 2 )
Balance, end of period 155   152   155   152  
Total Equity $ 19,543   $ 19,605   $ 19,543   $ 19,605  

(a) Cash dividends declared per common share were $ 1.4225 and $ 1.3550 for the 12 weeks ended September 6, 2025 and September 7, 2024, respectively, and $ 4.2000 and $ 3.9750 for the 36 weeks ended September 6, 2025 and September 7, 2024, respectively.

See accompanying notes to the condensed consolidated financial statements.
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Notes to the Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation and Our Segments

Basis of Presentation
When used in this report, the terms “we,” “us,” “our,” “PepsiCo” and the “Company” mean PepsiCo, Inc. and its consolidated subsidiaries, collectively.
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the rules and regulations for reporting the Quarterly Report on Form 10-Q (Form 10-Q). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. We have subsidiaries operating in highly inflationary economies, such as Argentina, Egypt and Turkey, and accordingly apply highly inflationary accounting for these subsidiaries. The condensed consolidated balance sheet at December 28, 2024 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended December 28, 2024 (2024 Form 10-K) and in Exhibit 99.2 to our Current Report on Form 8-K dated July 17, 2025 (Recast Segment Information). This report should be read in conjunction with our 2024 Form 10-K and our Recast Segment Information, in which we retrospectively recast historical segment reporting to reflect our current organizational structure. In our opinion, these financial statements include all normal and recurring adjustments necessary for a fair presentation. The results for the 12 and 36 weeks ended September 6, 2025 are not necessarily indicative of the results expected for any future period or the full year.
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.
While our financial results in the United States and Canada (North America) are reported on a 12-week basis, all of our international operations are reported on a monthly calendar basis for which the months of June, July and August are reflected in our results for the 12 weeks ended September 6, 2025 and September 7, 2024, and the months of January through August are reflected in our results for the 36 weeks ended September 6, 2025 and September 7, 2024.
The preparation of our condensed consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and related disclosures. Additionally, the business and economic uncertainty resulting from volatile geopolitical conditions, an increasingly complex global tax environment, including changes in how existing laws are interpreted or enforced, expanded or retaliatory tariffs and changes in the interest rate and inflationary cost environment have made such estimates and assumptions more difficult to calculate. Accordingly, actual results and outcomes could differ from those estimates.
Our significant interim accounting policies include the recognition of a pro rata share of certain estimated annual sales incentives and certain advertising and marketing costs in proportion to revenue or volume, as applicable, and the recognition of income taxes using an estimated annual effective tax rate.
Unless otherwise noted, tabular dollars are in millions, except per share amounts. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Certain reclassifications were made to the prior year’s financial statements to conform to the current year presentation.
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Our Segments
As previously disclosed in our 2024 Form 10-K, effective beginning with our first quarter of 2025, we realigned certain of our reportable segments to conform with changes to our organizational structure and how our Chief Executive Officer regularly reviews the performance of, and allocates resources to, these segments. Our historical segment reporting has been recast to reflect our current organizational structure.
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 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.

Net Revenue, Significant Expenses and Operating Profit by Segment

  12 Weeks Ended 9/6/2025
  PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Total
Net revenue $ 6,526   $ 7,327   $ 1,291   $ 5,022   $ 2,656   $ 1,115   $ 23,937  
Segment cost of sales (a)
2,557   3,407   405   2,864   1,134   666  
Segment selling, general and administrative expenses (a)
2,399   2,945   375   1,350   999   293  
Restructuring and impairment charges (b)
32   19   2   69   17   5  
Acquisition and divestiture-related charges (c)
2   219   —   —   —   —  

Impairment and other charges (d)
—   8   73   19   —   —  

Indirect and income tax impact (e)
—   —   —   —   82   —  
Segment operating profit $ 1,536   $ 729   $ 436   $ 720   $ 424   $ 151   $ 3,996  
Corporate unallocated expenses ( 427 )
Operating profit 3,569  
Other pension and retiree medical benefits income 26  
Net interest expense and other ( 264 )
Income before income taxes $ 3,331  

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  12 Weeks Ended 9/7/2024
  PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Total
Net revenue $ 6,536   $ 7,175   $ 1,290   $ 4,612   $ 2,615   $ 1,091   $ 23,319  
Segment cost of sales (a)
2,489   3,188   386   2,578   1,092   635  
Segment selling, general and administrative expenses (a)
2,420   2,940   431   1,276   1,032   325  
Restructuring and impairment charges (b)
8   128   15   35   11   2  
Acquisition and divestiture-related charges (c)
—   5   —   —   —   —  
Impairment and other charges —   —   —   10   —   —  
Product recall-related impact ( 1 ) —   —   —   —   —  

Segment operating profit $ 1,620   $ 914   $ 458   $ 713   $ 480   $ 129   $ 4,314  
Corporate unallocated expenses ( 442 )
Operating profit 3,872  
Other pension and retiree medical benefits income 41  
Net interest expense and other ( 219 )
Income before income taxes $ 3,694  

  36 Weeks Ended 9/6/2025
  PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Total
Net revenue $ 19,215   $ 19,999   $ 3,418   $ 11,946   $ 6,865   $ 3,139   $ 64,582  
Segment cost of sales (a)
7,376   9,056   1,017   6,909   2,906   1,905  
Segment selling, general and administrative expenses (a)
7,206   8,379   1,073   3,339   2,540   824  
Restructuring and impairment charges (b)
147   192   7   118   36   9  
Acquisition and divestiture-related charges (c)
23   285   —   —   —   —  
Impairment and other charges (d)
—   1,537   73   270   —   80  

Indirect and income tax impact (e)
—   —   —   —   82   —  
Segment operating profit $ 4,463   $ 550   $ 1,248   $ 1,310   $ 1,301   $ 321   $ 9,193  
Corporate unallocated expenses ( 1,252 )
Operating profit 7,941  
Other pension and retiree medical benefits income 91  
Net interest expense and other ( 788 )
Income before income taxes $ 7,244  

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  36 Weeks Ended 9/7/2024
  PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Total
Net revenue $ 19,240   $ 19,860   $ 3,355   $ 11,228   $ 7,254   $ 3,133   $ 64,070  
Segment cost of sales (a)
7,091   8,993   1,003   6,455   3,002   1,842  
Segment selling, general and administrative expenses (a)
7,119   8,306   1,116   3,179   2,784   878  
Restructuring and impairment charges (b)
47   143   15   75   32   6  
Acquisition and divestiture-related charges (c)
—   7   —   —   —   —  
Impairment and other charges —   —   —   10   —   —  
Product recall-related impact (f)
181   —   —   —   —   —  

Segment operating profit $ 4,802   $ 2,411   $ 1,221   $ 1,509   $ 1,436   $ 407   $ 11,786  
Corporate unallocated expenses (g)
( 1,149 )
Operating profit 10,637  
Other pension and retiree medical benefits income 155  
Net interest expense and other ( 655 )
Income before income taxes $ 10,137  

(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, indirect and income tax impact and product recall-related impact lines of these tables.
(b) See Note 3 for further information related to restructuring and impairment charges.
(c) See Note 12 for further information related to acquisitions and divestiture-related charges.
(d) In the 12 weeks ended September 6, 2025, we recorded pre-tax charges of $ 100  million ($ 92  million after tax or $ 0.07 per share), primarily related to the impairment of the Rockstar brand in our IB Franchise and PBNA segments, with $ 83  million recorded in impairment of intangible assets and $ 17  million recorded in selling, general and administrative expenses. In the 36 weeks ended September 6, 2025, we recorded pre-tax charges of $ 1,960 million ($ 1,539 million after-tax or $ 1.12 per share), primarily related to the impairment of the Rockstar brand in our PBNA, EMEA and IB Franchise segments and the Be & Cheery brand in our Asia Pacific Foods segment, with $ 1,943  million recorded in impairment of intangible assets and $ 17  million recorded in selling, general and administrative expenses. See Note 4 for further information.
(e) In the 12 and 36 weeks ended September 6, 2025, we recorded a pre-tax charge of $ 82  million in selling, general and administrative expenses and income tax expense of $ 47  million in provision for income taxes (collectively, $ 0.09 per share) related to an indirect and income tax audit settlement in our LatAm Foods segment.
(f) In the 36 weeks ended September 7, 2024, we recorded a pre-tax charge of $ 184  million ($ 141  million after-tax or $ 0.10 per share) associated with a previously announced voluntary recall of certain bars and cereals in our PFNA segment (Quaker Recall) with $ 174  million recorded in cost of sales related to property, plant and equipment write-offs, employee severance costs and other costs, $ 7  million recorded in selling, general and administrative expenses and $ 3  million recorded in other pension and retiree medical benefits income, which is not included in operating profit.
(g) In the 36 weeks ended September 7, 2024, we recorded a pre-tax gain of $ 76 million ($ 57 million after-tax or $ 0.04 per share) in selling, general and administrative expenses as a result of the sale of a corporate asset.

Disaggregation of Net Revenue
Our primary performance obligation is the distribution and sales of beverage and convenient food products to our customers. The following tables reflect the percentage of net revenue generated between our beverage business and our convenient food business:

12 Weeks Ended
9/6/2025 9/7/2024
Beverages (a)
Convenient Foods Beverages (a)
Convenient Foods

North America 53   % 47   % 52   % 48   %
International (b)
33   % 67   % 32   % 68   %
PepsiCo 45   % 55   % 44   % 56   %

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36 Weeks Ended
9/6/2025 9/7/2024
Beverages (a)
Convenient Foods Beverages (a)
Convenient Foods

North America 51   % 49   % 51   % 49   %
International (b)
32   % 68   % 30   % 70   %
PepsiCo 43   % 57   % 43   % 57   %

(a) Beverage revenue from company-owned bottlers, which includes our consolidated bottling operations in our PBNA and EMEA segments, was 38 % and 37 % of our consolidated net revenue in the 12 and 36 weeks ended September 6, 2025, respectively, and 37 % and 36 % of our consolidated net revenue in the 12 and 36 weeks ended September 7, 2024, respectively. 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 foods revenue generated from our EMEA segment was 41 % and 59 % of EMEA net revenue, respectively, in the 12 weeks ended September 6, 2025, 38 % and 62 % of EMEA net revenue, respectively, in the 36 weeks ended September 6, 2025, 39 % and 61 % of EMEA net revenue, respectively, in the 12 weeks ended September 7, 2024 and 36 % and 64 % of EMEA net revenue, respectively, in the 36 weeks ended September 7, 2024.

Other Segment Information
Capital spending, amortization of intangible assets, and depreciation and other amortization of each segment are as follows:

12 Weeks Ended
  Capital Spending (a)
Amortization of 
Intangible Assets Depreciation and
Other Amortization
  9/6/2025 9/7/2024 9/6/2025 9/7/2024 9/6/2025 9/7/2024
PFNA $ 220   $ 253   $ 4   $ 2   $ 233   $ 190  
PBNA 278   313   7   5   229   234  
IB Franchise 31   33   4   4   25   24  
EMEA 167   189   4   4   138   117  
LatAm Foods 178   207   —   —   105   96  
Asia Pacific Foods 60   96   2   2   36   32  
Total segment 934   1,091   21   17   766   693  
Corporate 58   58   —   —   37   29  
Total $ 992   $ 1,149   $ 21   $ 17   $ 803   $ 722  

36 Weeks Ended
  Capital Spending (a)
Amortization of 
Intangible Assets Depreciation and
Other Amortization
  9/6/2025 9/7/2024 9/6/2025 9/7/2024 9/6/2025 9/7/2024
PFNA $ 645   $ 788   $ 12   $ 8   $ 665   $ 564  
PBNA 809   791   17   15   713   713  
IB Franchise 77   77   11   11   64   61  
EMEA 354   436   10   11   348   303  
LatAm Foods 339   413   1   1   266   262  
Asia Pacific Foods 152   167   5   5   94   81  
Total segment 2,376   2,672   56   51   2,150   1,984  
Corporate 123   178   —   —   109   83  
Total $ 2,499   $ 2,850   $ 56   $ 51   $ 2,259   $ 2,067  

(a) Asset and other balance sheet information for segments is not provided to our chief operating decision maker.

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Note 2 - Recently Issued Accounting Pronouncements
Not Yet Adopted
In September 2025, the Financial Accounting Standards Board (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.
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 are evaluating the impact of electing this practical expedient 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.
In December 2023, the 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. The guidance is effective for fiscal year 2025 annual 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 2025 annual reporting, on a prospective basis.
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Note 3 - Restructuring and Impairment Charges
2019 Multi-Year Productivity Plan (2019 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, 10 % for asset impairments (all non-cash) resulting from plant closures and related actions, and 40 % 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   %

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

12 Weeks Ended 36 Weeks Ended
9/6/2025 9/7/2024 9/6/2025 9/7/2024
Cost of sales $ 16   $ 10   $ 119   $ 16  
Selling, general and administrative expenses 126   214   435   363  
Impairment of intangible assets —   14   —   14  
Other pension and retiree medical benefits (income)/expense (a)
( 1 ) 7   13   22  
Total restructuring and impairment charges $ 141   $ 245   $ 567   $ 415  
After-tax amount $ 116   $ 195   $ 467   $ 325  
Impact on net income attributable to PepsiCo per common share $ ( 0.08 ) $ ( 0.14 ) $ ( 0.34 ) $ ( 0.24 )

12 Weeks Ended 36 Weeks Ended Plan-to-Date
9/6/2025 9/7/2024 9/6/2025 9/7/2024 through 9/6/2025

PFNA $ 32   $ 8   $ 147   $ 47   $ 579  
PBNA 19   128   192   143   697  
IB Franchise 2   15   7   15   58  
EMEA 69   35   118   75   879  
LatAm Foods 17   11   36   32   283  
Asia Pacific Foods 5   2   9   6   96  
Corporate (a)
( 2 ) 39   45   75   463  
142   238   554   393   3,055  
Other pension and retiree medical benefits (income)/expense (a)
( 1 ) 7   13   22   139  
Total $ 141   $ 245   $ 567   $ 415   $ 3,194  

(a) Income amount represents adjustments for changes in estimates of previously recorded amounts.
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12 Weeks Ended 36 Weeks Ended Plan-to-Date
9/6/2025 9/7/2024 9/6/2025 9/7/2024 through 9/6/2025

Severance and other employee costs $ 46   $ 151   $ 168   $ 233   $ 1,602  
Asset impairments 22   30   109   34   415  
Other costs 73   64   290   148   1,177  
Total $ 141   $ 245   $ 567   $ 415   $ 3,194  

Severance and other employee costs primarily include severance and other termination benefits, as well as voluntary separation arrangements. Other costs primarily include costs associated with the implementation of our initiatives, including contract termination costs, consulting and other professional fees.
A summary of our 2019 Productivity Plan activity for the 36 weeks ended September 6, 2025 is as follows:

Severance and Other Employee Costs Asset
Impairments Other Costs Total
Liability as of December 28, 2024 $ 338   $ —   $ 26   $ 364  
2025 restructuring charges
168   109   290   567  
Cash payments (a)
( 245 ) —   ( 309 ) ( 554 )
Non-cash charges and translation ( 1 ) ( 109 ) ( 1 ) ( 111 )
Liability as of September 6, 2025 $ 260   $ —   $ 6   $ 266  

(a) Excludes cash expenditures of $ 8  million reported in the cash flow statement in pension and retiree medical contributions.
The majority of the restructuring accrual at September 6, 2025 is expected to be paid within a year.
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 and 4 for impairment and other charges taken primarily related to the impairments of the Rockstar and Be & Cheery brands.

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

9/6/2025 12/28/2024
Gross Accumulated Amortization Net Gross Accumulated Amortization Net
Acquired franchise rights
$ 833   $ ( 239 ) $ 594   $ 821   $ ( 223 ) $ 598  
Customer relationships (a)
766   ( 330 ) 436   565   ( 279 ) 286  
Brands 1,080   ( 1,013 ) 67   1,051   ( 977 ) 74  
Other identifiable intangibles 433   ( 289 ) 144   420   ( 276 ) 144  
Total $ 3,112   $ ( 1,871 ) $ 1,241   $ 2,857   $ ( 1,755 ) $ 1,102  

(a) Increase is primarily related to acquisitions of VNGR Beverage, LLC (poppi) and Garza Food Ventures LLC (Siete). See Note 12 for further information on acquisitions.
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The components of indefinite-lived intangible assets are as follows:

9/6/2025 12/28/2024
Goodwill $ 18,845   $ 17,534  
Other indefinite-lived intangible assets
Reacquired franchise rights 7,532   7,437  
Acquired franchise rights 1,886   1,858  
Brands (a)
4,193   4,404  
Total indefinite-lived intangible assets $ 32,456   $ 31,233  

(a) Decrease is primarily related to impairments to the Rockstar and Be & Cheery brands as well as the sale of the Rockstar brand in connection with the transaction described below, partially offset by acquisitions of poppi and Siete. See Note 12 for further information on acquisitions.
During the 36 weeks ended September 6, 2025, recent 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, in the 36 weeks ended September 6, 2025, we recorded pre-tax impairment charges of $ 1.9  billion ($ 1.5  billion after-tax or $ 1.07 per share) in impairment of intangible assets primarily comprised of the Rockstar brand in our PBNA, EMEA, and IB Franchise segments, with $ 0.1  billion ($ 0.1  billion after-tax or $ 0.06 per share) recorded during the 12 weeks ended September 6, 2025 related to the Rockstar brand in our IB Franchise and PBNA segments. For further information on our policies for indefinite-lived intangible assets, see Note 2 to our consolidated financial statements in our Recast Segment Information.
On August 28, 2025, we consummated a transaction with Celsius Holdings, Inc. (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 for approximately $ 0.2  billion, to start in the fourth quarter of 2025.
The change in the book value of goodwill is as follows:

PFNA PBNA IB Franchise EMEA (b)
LatAm Foods Asia Pacific Foods Total
Balance as of December 28, 2024
$ 791   $ 11,925   $ 1,918   $ 2,194   $ 354   $ 352   $ 17,534  
Acquisitions (a)
625   179   —   —   —   —   804  

Translation and other 5   18   3   442   25   14   507  
Balance as of September 6, 2025
$ 1,421   $ 12,122   $ 1,921   $ 2,636   $ 379   $ 366   $ 18,845  

(a) Related to the acquisitions of Siete in our PFNA segment and poppi in our PBNA segment. See Note 12 for further information on acquisitions.
(b) Translation and other primarily reflects the appreciation of the Russian ruble and the euro.
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Note 5 - Income Taxes
Numerous countries, including European Union member states, have enacted, or are expected to enact, legislation incorporating the Organization for Economic Co-operation and Development (OECD) model rules for a global minimum tax rate of 15 %. Widespread implementation is expected by the end of 2025, with certain countries that have not yet enacted potentially applying the legislation as of a retroactive date. Legislation enacted as of September 6, 2025 did not have a material impact on our financial statements for the 12 and 36 weeks ended September 6, 2025 and is not expected to have a material impact on our 2025 financial statements.
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. We do not expect the OBBB Act to have a material impact on our estimated annual effective tax rate in 2025.

Note 6 - Share-Based Compensation
The following table summarizes our total share-based compensation expense, which is primarily recorded in selling, general and administrative expenses:

12 Weeks Ended 36 Weeks Ended
9/6/2025 9/7/2024 9/6/2025 9/7/2024
Share-based compensation expense – equity awards $ 76   $ 77   $ 207   $ 260  
Share-based compensation expense – liability awards 2   4   ( 1 ) 14  

Restructuring charges ( 1 ) ( 1 ) ( 3 ) ( 5 )
Total $ 77   $ 80   $ 203   $ 269  

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

36 Weeks Ended
9/6/2025 9/7/2024
Granted (a)
Weighted-Average Grant Price Granted (a)
Weighted-Average Grant Price
Stock options 1.7   $ 150.75   2.0   $ 164.28  
RSUs and PSUs 2.1   $ 153.50   2.3   $ 164.25  

(a) In millions. All grant activity is disclosed at target.
We granted long-term cash awards to certain executive officers and other senior executives with an aggregate target value of $ 22 million and $ 19 million during the 36 weeks ended September 6, 2025 and September 7, 2024, respectively.
For the 12 weeks ended September 6, 2025 and September 7, 2024, our grants of stock options, RSUs, PSUs and long-term cash awards were nominal.
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Our weighted-average Black-Scholes fair value assumptions are as follows:  

  36 Weeks Ended
  9/6/2025 9/7/2024
Expected life 7 years 7 years
Risk-free interest rate 4.1   % 4.2   %
Expected volatility 16   % 16   %
Expected dividend yield 3.5   % 2.9   %

Note 7 - Pension and Retiree Medical Benefits
The components of net periodic benefit cost/(income) for pension and retiree medical plans are as follows:

12 Weeks Ended
Pension Retiree Medical
U.S. International
9/6/2025 9/7/2024 9/6/2025 9/7/2024 9/6/2025 9/7/2024
Service cost $ 71   $ 80   $ 11   $ 11   $ 8   $ 7  
Other pension and retiree medical benefits income:
Interest cost $ 136   $ 135   $ 35   $ 36   $ 6   $ 7  
Expected return on plan assets ( 186 ) ( 201 ) ( 46 ) ( 50 ) ( 3 ) ( 3 )
Amortization of prior service cost/(credits) 1   ( 6 ) ( 1 ) —   ( 1 ) ( 1 )
Amortization of net losses/(gains) 19   17   7   6   ( 5 ) ( 6 )
Settlement/curtailment losses 5   8   8   7   —   —  
Special termination benefits ( 1 ) 8   —   —   —   2  
Total other pension and retiree medical benefits income $ ( 26 ) $ ( 39 ) $ 3   $ ( 1 ) $ ( 3 ) $ ( 1 )
Total $ 45   $ 41   $ 14   $ 10   $ 5   $ 6  

  36 Weeks Ended
  Pension Retiree Medical
  U.S. International  
  9/6/2025 9/7/2024 9/6/2025 9/7/2024 9/6/2025 9/7/2024
Service cost $ 216   $ 240   $ 30   $ 32   $ 22   $ 22  
Other pension and retiree medical benefits income:
Interest cost $ 406   $ 405   $ 97   $ 99   $ 20   $ 22  
Expected return on plan assets ( 558 ) ( 604 ) ( 129 ) ( 139 ) ( 8 ) ( 9 )
Amortization of prior service cost/(credits) 2   ( 17 ) ( 1 ) ( 1 ) ( 3 ) ( 3 )
Amortization of net losses/(gains) 58   53   17   15   ( 17 ) ( 18 )
Net settlement/curtailment losses 5   8   7   9   —   —  
Special termination benefits 13   23   —   —   —   2  
Total other pension and retiree medical benefits income $ ( 74 ) $ ( 132 ) $ ( 9 ) $ ( 17 ) $ ( 8 ) $ ( 6 )
Total $ 142   $ 108   $ 21   $ 15   $ 14   $ 16  

We regularly evaluate opportunities to reduce risk and volatility associated with our pension and retiree medical plans.
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In the 36 weeks ended September 6, 2025 and September 7, 2024, we made discretionary contributions of $ 250 million and $ 150 million, respectively, to our U.S. qualified defined benefit plans, and $ 29  million and $ 27  million, respectively, to our international defined benefit plans.

Note 8 - Debt Obligations
In the 36 weeks ended September 6, 2025, we issued the following notes:

Interest Rate Maturity Date Principal Amount (a)

4.400   % February 2027 $ 500  
4.450   % February 2028 $ 750  
4.600   % February 2030 $ 1,000  
5.000   % February 2035 $ 1,250  
4.100   % January 2029 $ 750  
4.300   % July 2030 $ 650  
4.650   % July 2032 $ 850  
5.000   % July 2035 $ 1,250  
3.450   % July 2037 € 500   (b)
4.050   % July 2055 € 500   (b)

(a) Excludes debt issuance costs, discounts and premiums.
(b) These notes, issued in euros, were designated as net investment hedges to partially offset the effects of foreign currency on our investments in certain of our foreign subsidiaries.
The net proceeds from the issuances of the above notes were used for general corporate purposes, including the repayment of commercial paper.
In the 36 weeks ended September 6, 2025 , $ 3.2  billion of U.S. dollar-denominated senior notes matured and were paid.
As of September 6, 2025 , we had $ 3.0  billion of commercial paper outstanding, excluding discounts.
In the 36 weeks ended September 6, 2025, we entered into a new five-year unsecured revolving credit agreement (2025 Five-Year Credit Agreement), which expires on May 23, 2030. The 2025 Five-Year Credit Agreement enables us and our borrowing subsidiaries to borrow up to $ 5.0  billion in U.S. dollars and/or euros, including a $ 0.75  billion swing line subfacility for euro-denominated borrowings permitted to be borrowed on a same-day basis, subject to customary terms and conditions. We may request that commitments under this agreement be increased up to $ 5.75  billion (or the equivalent amount in euros). Additionally, we may, up to two times during the term of the 2025 Five-Year Credit Agreement, request renewal of the agreement for an additional one-year period. The 2025 Five-Year Credit Agreement replaced our $ 5.0  billion five-year credit agreement, dated as of May 24, 2024.
Also in the 36 weeks ended September 6, 2025, we entered into a new 364-day unsecured revolving credit agreement (2025 364-Day Credit Agreement), which expires on May 22, 2026. The 2025 364-Day Credit Agreement enables us and our borrowing subsidiaries to borrow up to $ 5.0  billion in U.S. dollars and/or euros, subject to customary terms and conditions. We may request that commitments under this agreement be increased up to $ 5.75  billion (or the equivalent amount in euros). We may request renewal of this facility for an additional 364-day period or convert any amounts outstanding into a term loan for a period of up to one year, which term loan would mature no later than the anniversary of the then effective termination date. The 2025 364-Day Credit Agreement replaced our $ 5.0  billion 364-day credit agreement, dated as of May 24, 2024.
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Funds borrowed under the 2025 Five-Year Credit Agreement and the 2025 364-Day Credit Agreement may be used for general corporate purposes. Subject to certain conditions, we may borrow, prepay and reborrow amounts under these agreements. As of September 6, 2025, there were no outstanding borrowings under the 2025 Five-Year Credit Agreement or the 2025 364-Day Credit Agreement.

Note 9 - Financial Instruments
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.
There have been no material changes during the 36 weeks ended September 6, 2025 with respect to our risk management policies or strategies and valuation techniques used in measuring the fair value of the financial assets or liabilities disclosed in Note 9 to our consolidated financial statements in our Recast Segment Information.
Certain of our agreements with our counterparties require us to post full collateral on derivative instruments in a net liability position if our credit rating is at A2 (Moody’s Investors Service, Inc.) or A (S&P Global Ratings) and we have been placed on credit watch for possible downgrade or if our credit rating falls below either of these levels. The fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position as of September 6, 2025 was $ 88 million. We have posted no collateral under these contracts and no credit-risk-related contingent features were triggered as of September 6, 2025.
The notional amounts of our financial instruments used to hedge the above risks are as follows:

  Notional Amounts (a)

9/6/2025 12/28/2024
Commodity contracts $ 1.3   $ 1.4  
Interest rate swap contracts $ 2.0   $ 2.0  
Foreign exchange contracts $ 3.2   $ 3.1  
Cross-currency contracts $ 1.7   $ 1.2  
Non-derivative debt instruments $ 4.3   $ 2.9  

(a) In billions.
As of September 6, 2025 and December 28, 2024, approximately 13 % of total debt was subject to variable rates, after the impact of the related interest rate swap contracts.
Debt Securities
Available-for-Sale
On August 28, 2025, as part of the Celsius Transaction described in Note 4, we acquired Series B convertible preferred shares, issued by Celsius, valued at $ 585  million upon acquisition, excluding acquisition-related charges. These Series B convertible preferred shares include certain conversion and redemption features and convert into Celsius common shares after six years from issuance if certain market-based conditions are met, or can be redeemed for cash after seven years from issuance. Shares underlying the transaction were priced at $ 51.75 per share, and the preferred shares are entitled to a 5 % annual dividend, payable either in cash or in-kind. Given our redemption right, we classified our investment in the convertible preferred stock as a Level 3 investment in available-for-sale debt securities, consistent with the Series A convertible preferred shares issued by Celsius that we currently hold. In addition, as part of this transaction, the conversion and redemption periods of the Series A convertible
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preferred shares were extended to match the terms of the newly issued Series B convertible preferred shares, which was accounted for as a modification.
The activity related to our Level 3 investments in certain available-for-sale debt securities is as follows:

12 Weeks Ended 36 Weeks Ended

9/6/2025 9/7/2024 9/6/2025 9/7/2024
Celsius:
Balance, beginning of period $ 958   $ 1,337   $ 785   $ 1,156  
Acquired 590   —   590   —  
Net unrealized gain/(loss) 535   ( 453 ) 722   ( 265 )
Cash dividends received ( 6 ) ( 7 ) ( 20 ) ( 14 )
Balance, end of period $ 2,077   $ 877   $ 2,077   $ 877  
Other:
Balance, beginning of period $ 261   $ —   $ 256   $ —  
Net unrealized gain/(loss) 6   —   11   —  
Balance, end of period $ 267   $ —   $ 267   $ —  
Total Level 3 available-for-sale balance, end of period $ 2,344   $ 877   $ 2,344   $ 877  

There were no impairment charges related to our investments in available-for-sale debt securities in both the 36 weeks ended September 6, 2025 and September 7, 2024. There were unrealized gains of $ 1,067 million and $ 347 million as of September 6, 2025 and September 7, 2024, respectively, associated with our available-for-sale debt securities.
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Recurring Fair Value Measurements
The fair values of our financial assets and liabilities are categorized as follows:

  9/6/2025 12/28/2024
  Fair Value Hierarchy Levels (a)
Assets (a)
Liabilities (a)
Assets (a)
Liabilities (a)

Available-for-sale debt securities (b)
3 $ 2,344   $ —   $ 1,041   $ —  
Index funds (c)
1 $ 325   $ —   $ 336   $ —  
Prepaid forward contracts (d)
2 $ 9   $ —   $ 15   $ —  
Deferred compensation (e)
2 $ —   $ 485   $ —   $ 503  
Contingent consideration (f)
3 $ —   $ 180   $ —   $ —  
Derivatives designated as fair value hedging instruments:
Interest rate swap contracts (g)
2 $ 31   $ 1   $ —   $ 46  

Derivatives designated as cash flow hedging instruments:
Foreign exchange contracts (h)
2 $ 8   $ 32   $ 55   $ 3  
Cross-currency contracts (h)
2 —   105   —   165  
Commodity contracts (i)
2 86   8   27   6  
$ 94   $ 145   $ 82   $ 174  
Derivatives designated as net investment hedging instruments:
Cross-currency contracts (h)
2 $ —   $ 16   $ 1   $ 4  

Derivatives not designated as hedging instruments:
Foreign exchange contracts (h)
2 $ 6   $ 12   $ 28   $ 12  
Commodity contracts (i)
2 1   11   3   10  
$ 7   $ 23   $ 31   $ 22  
Total derivatives at fair value (j)
$ 132   $ 185   $ 114   $ 246  
Total $ 2,810   $ 850   $ 1,506   $ 749  

(a) Fair value hierarchy levels are categorized consistently by Level 1 (quoted prices in active markets for identical assets), Level 2 (significant other observable inputs) and Level 3 in both years. Unless otherwise noted, financial assets are classified on our balance sheet within prepaid expenses and other current assets and other assets. Financial liabilities are classified on our balance sheet within accounts payable and other current liabilities and other liabilities.
(b) Classified as other assets. Includes $ 2,077  million and $ 785  million related to our investment in Celsius as of September 6, 2025 and December 28, 2024, respectively; also, includes $ 267  million and $ 256  million related to our other investment in available-for-sale debt securities as of September 6, 2025 and December 28, 2024, respectively. The fair value of our Level 3 investment in Celsius is estimated using probability-weighted discounted future cash flows based on a Monte Carlo simulation using significant unobservable inputs such as an 80 % probability that a certain market-based condition will be met and an average estimated discount rate of 10.1 % and 7.3 % as of September 6, 2025 and December 28, 2024, respectively. The fair value of the other Level 3 investment is estimated using a lattice model primarily based on the underlying stock price, volatility and certain significant unobservable inputs, such as a discount rate of 8.3 % based on an estimated synthetic credit rating. An increase in the probability that certain market-based conditions will be met or a decrease in the discount rate would result in a higher fair value measurement, while a decrease in the probability that certain market-based conditions will be met or an increase in the discount rate would result in a lower fair value measurement.
(c) Based on the price of index funds. These investments are classified as short-term investments and are used to manage a portion of market risk arising from our deferred compensation liability.
(d) Based primarily on the price of our common stock.
(e) Based on the fair value of investments corresponding to employees’ investment elections.
(f) In connection with our acquisition of poppi, we recorded a liability at fair value for the contingent consideration payable upon achievement of certain performance milestones by the third quarter of 2027, with a maximum payment of $ 300  million. If these performance milestones are not met, no payment will be made. The fair value of the liability is estimated using discounted future cash flows based on a Monte Carlo simulation using significant unobservable inputs such as forecasts of net revenue and margin. An increase in the net revenue and margin forecasts would result in a higher fair value measurement, while a decrease in the net revenue and margin forecasts would result in a lower fair value measurement.
(g) Based on Secured Overnight Financing Rate forward rates. As of September 6, 2025, the carrying amount of hedged fixed-rate debt was $ 2.0 billion, which was classified on the balance sheet within long-term debt obligations.
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(h) Based on recently reported market transactions of spot and forward rates.
(i) Primarily based on recently reported market transactions of swap arrangements.
(j) Derivative assets and liabilities are presented on a gross basis on our balance sheet. Amounts subject to enforceable master netting arrangements or similar agreements which are not offset on our balance sheet as of September 6, 2025 and December 28, 2024 were not material . Collateral received or posted against our asset or liability positions was not material . Exchange-traded commodity futures are cash-settled on a daily basis and, therefore, not included in the table.
The carrying amounts of our cash and cash equivalents and short-term investments recorded at amortized cost approximate fair value (classified as Level 2 in the fair value hierarchy) due to their short-term maturity. The fair value of our debt obligations as of September 6, 2025 and December 28, 2024 was $ 48 billion and $ 40 billion, respectively, based upon prices of identical or similar instruments in the marketplace, which are considered Level 2 inputs.
Losses/(gains) on our fair value hedges recognized in the income statement are as follows:

12 Weeks Ended 36 Weeks Ended

9/6/2025 9/7/2024 9/6/2025 9/7/2024
Interest rate swap contracts (a)
$ ( 33 ) $ —   $ ( 76 ) $ —  

(a) Interest rate derivative losses/(gains) are included in net interest expense and other. These losses/(gains) are substantially offset by decreases/increases in the value of the underlying debt, which are also included in net interest expense and other.
Losses/(gains) on our cash flow hedges are categorized as follows:

12 Weeks Ended
Losses/(Gains)
Recognized in
Accumulated Other
Comprehensive Loss Losses/(Gains)
Reclassified from
Accumulated Other
Comprehensive Loss
into Income Statement (a)

9/6/2025 9/7/2024 9/6/2025 9/7/2024
Foreign exchange contracts
$ 8   $ ( 33 ) $ 13   $ ( 3 )
Cross-currency contracts ( 5 ) ( 15 ) ( 8 ) ( 21 )
Commodity contracts ( 38 ) 75   ( 10 ) 34  
Total $ ( 35 ) $ 27   $ ( 5 ) $ 10  

  36 Weeks Ended
  Losses/(Gains)
Recognized in
Accumulated Other
Comprehensive Loss Losses/(Gains)
Reclassified from
Accumulated Other
Comprehensive Loss
into Income Statement (a)

9/6/2025 9/7/2024 9/6/2025 9/7/2024
Foreign exchange contracts
$ 78   $ ( 48 ) $ ( 11 ) $ 15  
Cross-currency contracts ( 60 ) 19   ( 63 ) 14  
Commodity contracts ( 138 ) 103   ( 15 ) 85  
Total $ ( 120 ) $ 74   $ ( 89 ) $ 114  

(a) Foreign exchange derivative losses/(gains) are included in net revenue and cost of sales. Cross-currency interest rate swap derivative losses/(gains) are included in selling, general and administrative expenses. Commodity derivative losses/(gains) are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. See Note 11 for further information.
As of September 6, 2025, we expect to reclassify net gains of $ 74 million related to our cash flow hedges from accumulated other comprehensive loss within common shareholders’ equity into net income during the next 12 months.
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Losses/(gains) on our net investment hedges are categorized as follows:

  12 Weeks Ended
  Losses/(Gains)
Recognized in
Accumulated Other
Comprehensive Loss Losses/(Gains)
Recognized in Income Statement (a)

9/6/2025 9/7/2024 9/6/2025 9/7/2024
Non-derivative debt instruments $ 27   $ 114   $ —   $ —  
Cross-currency contracts 4   13   ( 3 ) ( 2 )
Foreign exchange contracts
( 13 ) —   —   —  
Total $ 18   $ 127   $ ( 3 ) $ ( 2 )

  36 Weeks Ended
  Losses/(Gains)
Recognized in
Accumulated Other
Comprehensive Loss Losses/(Gains)
Recognized in Income Statement (a)

9/6/2025 9/7/2024 9/6/2025 9/7/2024
Non-derivative debt instruments $ 311   $ 45   $ —   $ —  
Cross-currency contracts 13   13   ( 7 ) ( 2 )
Foreign exchange contracts
( 13 ) —   —   —  
Total $ 311   $ 58   $ ( 7 ) $ ( 2 )

(a) Amount excluded from the assessment of effectiveness recognized in earnings associated with cross-currency interest rate swaps.
Losses/(gains) recognized in the income statement related to our non-designated hedges are categorized as follows:

12 Weeks Ended
9/6/2025 9/7/2024
Cost of sales Selling, general and administrative expenses Total Cost of sales Selling, general and administrative expenses Total
Foreign exchange contracts $ —   $ ( 3 ) $ ( 3 ) $ 1   $ ( 8 ) $ ( 7 )
Commodity contracts 16   4   20   24   36   60  
Total $ 16   $ 1   $ 17   $ 25   $ 28   $ 53  

36 Weeks Ended
9/6/2025 9/7/2024
Cost of sales Selling, general and administrative expenses Total Cost of sales Selling, general and administrative expenses Total
Foreign exchange contracts $ 1   $ 51   $ 52   $ 1   $ 34   $ 35  
Commodity contracts 12   ( 6 ) 6   9   16   25  
Total $ 13   $ 45   $ 58   $ 10   $ 50   $ 60  

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Note 10 - Net Income Attributable to PepsiCo per Common Share
The computations of basic and diluted net income attributable to PepsiCo per common share are as follows:

12 Weeks Ended
9/6/2025 9/7/2024
Income Shares (a)
Income Shares (a)

Basic net income attributable to PepsiCo per common share
$ 1.90   $ 2.13  
Net income available for PepsiCo common shareholders
$ 2,603   1,369   $ 2,930   1,373  
Dilutive securities:
Stock options, RSUs, PSUs and other (b)
—   3   —   5  
Diluted $ 2,603   1,372   $ 2,930   1,378  
Diluted net income attributable to PepsiCo per common share
$ 1.90   $ 2.13  

  36 Weeks Ended
  9/6/2025 9/7/2024
  Income Shares (a)
Income Shares (a)

Basic net income attributable to PepsiCo per common share
$ 4.16   $ 5.86  
Net income available for PepsiCo common shareholders
$ 5,700   1,370   $ 8,055   1,374  
Dilutive securities:
Stock options, RSUs, PSUs and other (b)
—   3   —   5  
Diluted $ 5,700   1,373   $ 8,055   1,379  
Diluted net income attributable to PepsiCo per common share
$ 4.15   $ 5.84  

(a) Weighted-average common shares outstanding (in millions).
(b) The dilutive effect of these securities is calculated using the treasury stock method.
The weighted-average amount of antidilutive securities excluded from the calculation of diluted earnings per common share was 7  million and 8 million for the 12 and 36 weeks ended September 6, 2025, respectively, and 4  million for the 12 and 36 weeks ended September 7, 2024.
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Note 11 - Accumulated Other Comprehensive Loss Attributable to PepsiCo
The changes in the balances of each component of accumulated other comprehensive loss attributable to PepsiCo are as follows:

Currency Translation Adjustment Cash Flow Hedges Pension and Retiree Medical Available-for-Sale Debt Securities and Other (a)
Accumulated Other Comprehensive Loss Attributable to PepsiCo
Balance as of December 28, 2024 (b)
$ ( 15,217 ) $ 82   $ ( 2,714 ) $ 237   $ ( 17,612 )
Other comprehensive income/(loss) before reclassifications (c)
410   58   ( 4 ) 87   551  
Amounts reclassified from accumulated other comprehensive loss —   ( 31 ) 17   —   ( 14 )
Net other comprehensive income 410   27   13   87   537  
Tax amounts 26   ( 5 ) ( 3 ) ( 21 ) ( 3 )
Balance as of March 22, 2025 (b)
( 14,781 ) 104   ( 2,704 ) 303   ( 17,078 )
Other comprehensive income/(loss) before reclassifications (d)
915   27   ( 42 ) 84   984  
Amounts reclassified from accumulated other comprehensive loss
—   ( 53 ) 18   —   ( 35 )
Net other comprehensive income/(loss) 915   ( 26 ) ( 24 ) 84   949  
Tax amounts 46   8   5   ( 20 ) 39  
Balance as of June 14, 2025 (b)
( 13,820 ) 86   ( 2,723 ) 367   ( 16,090 )
Other comprehensive income/(loss) before reclassifications 33   35   ( 6 ) 536   598  
Amounts reclassified from accumulated other comprehensive loss
—   ( 5 ) 33   —   28  
Net other comprehensive income 33   30   27   536   626  
Tax amounts 6   ( 7 ) ( 6 ) ( 126 ) ( 133 )
Balance as of September 6, 2025 (b)
$ ( 13,781 ) $ 109   $ ( 2,702 ) $ 777   $ ( 15,597 )

(a) The movements primarily represent fair value changes in available-for-sale debt securities, including our investment in Celsius convertible preferred stock. See Note 9 for further information.
(b) Pension and retiree medical amounts are net of taxes of $ 1,282  million as of December 28, 2024, $ 1,279 million as of March 22, 2025, $ 1,284  million as of June 14, 2025 and $ 1,278 million as of September 6, 2025.
(c) Currency translation adjustment primarily reflects appreciation of the Russian ruble and deprecation of the euro.
(d) Currency translation adjustment primarily reflects appreciation of the Russian ruble, Mexican peso and Canadian dollar.

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Currency Translation Adjustment Cash Flow Hedges Pension and Retiree Medical Available-for-Sale Debt Securities and Other (a)
Accumulated Other Comprehensive Loss Attributable
to PepsiCo
Balance as of December 30, 2023 (b)
$ ( 13,255 ) $ ( 31 ) $ ( 2,719 ) $ 471   $ ( 15,534 )
Other comprehensive (loss)/income before reclassifications (c)
( 168 ) ( 47 ) 4   685   474  
Amounts reclassified from accumulated other comprehensive loss —   51   9   —   60  
Net other comprehensive (loss)/income ( 168 ) 4   13   685   534  
Tax amounts ( 14 ) ( 1 ) ( 2 ) ( 162 ) ( 179 )
Balance as of March 23, 2024 (b)
( 13,437 ) ( 28 ) ( 2,708 ) 994   ( 15,179 )
Other comprehensive (loss)/income before reclassifications (d)
( 295 ) 3   ( 1 ) ( 511 ) ( 804 )
Amounts reclassified from accumulated other comprehensive loss
—   53   12   —   65  
Net other comprehensive (loss)/income ( 295 ) 56   11   ( 511 ) ( 739 )
Tax amounts 28   ( 14 ) ( 2 ) 120   132  
Balance as of June 15, 2024 (b)
( 13,704 ) 14   ( 2,699 ) 603   ( 15,786 )
Other comprehensive (loss)/income before reclassifications (e)
( 544 ) ( 34 ) —   ( 460 ) ( 1,038 )
Amounts reclassified from accumulated other comprehensive loss
—   7   25   —   32  
Net other comprehensive (loss)/income ( 544 ) ( 27 ) 25   ( 460 ) ( 1,006 )
Tax amounts 32   3   ( 4 ) 109   140  
Balance as of September 7, 2024 (b)
$ ( 14,216 ) $ ( 10 ) $ ( 2,678 ) $ 252   $ ( 16,652 )

(a) The movements primarily represent fair value changes in available-for-sale debt securities, including our investment in Celsius convertible preferred stock. See Note 9 for further information.
(b) Pension and retiree medical amounts are net of taxes of $ 1,282 million as of December 30, 2023 and $ 1,280  million as of March 23, 2024, $ 1,278  million as of June 15, 2024 and $ 1,274  million as of September 7, 2024.
(c) Currency translation adjustment primarily reflects depreciation of the South African rand, Canadian dollar and Russian ruble.
(d) Currency translation adjustment primarily reflects depreciation of the Egyptian pound.
(e) Currency translation adjustment primarily reflects depreciation of the Mexican peso.

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The reclassifications from accumulated other comprehensive loss to the income statement are summarized as follows:

12 Weeks Ended 36 Weeks Ended
9/6/2025 9/7/2024 9/6/2025 9/7/2024 Affected Line Item in the Income Statement

Cash flow hedges:
Foreign exchange contracts $ —   $ ( 1 ) $ ( 2 ) $ ( 1 ) Net revenue
Foreign exchange contracts
13   ( 2 ) ( 9 ) 16   Cost of sales
Cross-currency contracts ( 8 ) ( 21 ) ( 63 ) 14   Selling, general and administrative expenses

Interest rate swap contracts —   ( 3 ) —   ( 3 ) Selling, general and administrative expenses

Commodity contracts ( 11 ) 34   ( 17 ) 85   Cost of sales
Commodity contracts 1   —   2   —   Selling, general and administrative expenses

Net (gains)/losses before tax ( 5 ) 7   ( 89 ) 111  
Tax amounts
—   ( 1 ) 22   ( 28 )
Net (gains)/losses after tax $ ( 5 ) $ 6   $ ( 67 ) $ 83  

Pension and retiree medical items:
Amortization of net prior service credits $ ( 1 ) $ ( 7 ) $ ( 2 ) $ ( 21 ) Other pension and retiree medical benefits income
Amortization of net losses 21   17   58   50   Other pension and retiree medical benefits income
Net settlement/curtailment losses 13   15   12   17   Other pension and retiree medical benefits income
Net losses before tax 33   25   68   46  
Tax amounts
( 7 ) ( 5 ) ( 15 ) ( 9 )
Net losses after tax $ 26   $ 20   $ 53   $ 37  

Total net losses/(gains) reclassified, net of tax $ 21   $ 26   $ ( 14 ) $ 120  

Note 12 - Acquisitions and Divestitures

Acquisition of Siete
On January 17, 2025, we acquired all of the outstanding equity interest in Siete, a Mexican-American foods business, for total consideration of $ 1.2 billion in cash.
We accounted for the transaction as a business combination in the first quarter of 2025. We recognized and measured the identifiable assets acquired and liabilities assumed at their estimated fair values on the date of acquisition, in our PFNA segment. The preliminary estimates of the fair value of the identifiable assets acquired and liabilities assumed in this transaction as of the acquisition date primarily include goodwill and other intangible assets of approximately $ 1.2 billion. These preliminary estimates include management’s assumptions and are subject to revision as additional information is obtained about the facts and circumstances that existed as of the acquisition date, primarily related to intangible assets, which may result in adjustments to the preliminary values discussed above as valuations are finalized. We expect to finalize these amounts as soon as possible, but no later than the first quarter of 2026.
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Acquisition of poppi
On May 19, 2025, we acquired all of the outstanding equity interest in poppi, a prebiotic soda business, for cash consideration of $ 1.95  billion and contingent consideration with an acquisition date fair value of $ 0.2  billion. See Note 9 for further information on the contingent consideration. In connection with this acquisition, other payments may be incurred, subject to the achievement of certain conditions.
We accounted for the transaction as a business combination in the second quarter of 2025. We recognized and measured the identifiable assets acquired and liabilities assumed at their estimated fair values on the date of acquisition, in our PBNA segment. The preliminary estimates of the fair value of the identifiable assets acquired and liabilities assumed in this transaction as of the acquisition date primarily include goodwill and other intangible assets of approximately $ 2.0  billion. These preliminary estimates include management’s assumptions and are subject to revision as additional information is obtained about the facts and circumstances that existed as of the acquisition date, primarily related to intangible assets, which may result in adjustments to the preliminary values discussed above as valuations are finalized. We expect to finalize these amounts as soon as possible, but no later than the second quarter of 2026.

Acquisition and Divestiture-Related Charges
Acquisition and divestiture-related charges primarily include transaction expenses, such as consulting, advisory and other professional fees, and merger and integration charges, as well as fair value adjustments to the acquired inventory included in the acquisition-date balance sheets. Merger and integration charges include distribution agreement termination fees, impairment of certain acquisition-related intangibles, employee-related costs, closing costs and other integration costs.
A summary of charges is as follows:

12 Weeks Ended 36 Weeks Ended
9/6/2025 9/7/2024 9/6/2025 9/7/2024
Cost of sales $ 46   $ —   $ 46   $ —  
Selling, general and administrative expenses 125   5   212   7  
Impairment of intangible assets 50   —   50   —  
Total $ 221   $ 5   $ 308   $ 7  
After-tax amount $ 169   $ 4   $ 236   $ 5  
Impact on net income attributable to PepsiCo per common share $ ( 0.12 ) $ —   $ ( 0.17 ) $ —  

12 Weeks Ended 36 Weeks Ended
9/6/2025 9/7/2024 9/6/2025 9/7/2024
PFNA $ 2   $ —   $ 23   $ —  
PBNA 219   5   285   7  

Total $ 221   $ 5   $ 308   $ 7  

Note 13 - Supply Chain Financing Arrangements
We maintain voluntary supply chain finance agreements with several participating global financial institutions. Under these agreements, our suppliers, at their sole discretion, may elect to sell their accounts receivable with PepsiCo to these participating global financial institutions. As of both September 6, 2025 and December 28, 2024, $ 1.5  billion of our accounts payable are to suppliers participating in these financing arrangements. For further information on the key terms of these supply chain financing programs, see Note 14 to our consolidated financial statements in our Recast Segment Information.
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Note 14 - Legal Contingencies
The Company is party to a variety of litigation, claims, legal or regulatory proceedings, inquiries and investigations. While the results of such litigation, claims, legal or regulatory proceedings, inquiries and investigations cannot be predicted with certainty, management believes that the final outcome of the foregoing is not expected to have a material adverse effect on our financial condition, results of operations or cash flows.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
FINANCIAL REVIEW
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 condensed consolidated financial statements and the accompanying notes. 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.

Our Critical Accounting Policies and Estimates
The critical accounting policies and estimates below should be read in conjunction with those outlined in our Recast Segment Information.
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. 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.
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.
Income Taxes
In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on our expected annual 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. Subsequent recognition, derecognition and measurement of a tax position taken in a previous period are separately recognized in the quarter in which they occur.

Our Business Risks
This Form 10-Q contains statements reflecting our views about our future performance that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (Reform Act). Statements that constitute forward-looking statements within the meaning of the Reform Act
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are generally identified through the inclusion of words such as “aim,” “anticipate,” “believe,” “drive,” “estimate,” “expect,” “expressed confidence,” “forecast,” “future,” “goal,” “guidance,” “intend,” “may,” “objective,” “outlook,” “plan,” “position,” “potential,” “project,” “seek,” “should,” “strategy,” “target,” “will” or similar statements or variations of such words and other similar expressions. All statements addressing our future operating performance, and statements addressing events and developments that we expect or anticipate will occur in the future, are forward-looking statements within the meaning of the Reform Act. These forward-looking statements are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in any such forward-looking statement. Such risks and uncertainties include, but are not limited to: future demand for PepsiCo’s products; damage to PepsiCo’s reputation or brand image; product recalls or other issues or concerns with respect to product quality and safety; PepsiCo’s ability to compete effectively; PepsiCo’s ability to attract, develop and maintain a highly skilled workforce or effectively manage changes in our workforce; water scarcity; changes in the retail landscape or in sales to any key customer; disruption of PepsiCo’s manufacturing operations or supply chain, including increased commodity, packaging, transportation, labor and other input costs; political, social or geopolitical conditions in the markets where PepsiCo’s products are made, manufactured, distributed or sold; PepsiCo’s ability to grow its business in developing and emerging markets; changes in economic conditions in the countries in which PepsiCo operates; changes in tariffs and global trade relations; future cyber incidents and other disruptions to our information systems; failure to successfully complete or manage strategic transactions; PepsiCo’s reliance on third-party service providers and enterprise-wide systems; climate change or measures to address climate change and other sustainability matters; strikes or work stoppages; failure to realize benefits from PepsiCo’s productivity initiatives or organizational restructurings; deterioration in estimates and underlying assumptions regarding future performance of our business or investments that can result in impairment charges; fluctuations or other changes in exchange rates; any downgrade or potential downgrade of PepsiCo’s credit ratings; imposition or proposed imposition of new or increased taxes aimed at PepsiCo’s products; imposition of limitations on the marketing or sale of PepsiCo’s products; changes in laws and regulations related to the use or disposal of plastics or other packaging materials; failure to comply with personal data protection and privacy laws; increase in income tax rates, changes in income tax laws or disagreements with tax authorities; failure to adequately protect PepsiCo’s intellectual property rights or infringement on intellectual property rights of others; failure to comply with applicable laws and regulations; potential liabilities and costs from litigation, claims, legal or regulatory proceedings, inquiries or investigations; and other risks and uncertainties including those described in “Item 1A. Risk Factors” in our 2024 Form 10-K, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks,” included in our Recast Segment Information and in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” of this Form 10-Q. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
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 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
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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 condensed consolidated financial statements in this Form 10-Q and Note 9 to our consolidated financial statements in our Recast Segment Information 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
In the 12 weeks ended September 6, 2025, our financial results outside of North America reflect the months of June, July and August. In the 36 weeks ended September 6, 2025, our financial results outside of North America reflect the months of January through August. In the 36 weeks ended September 6, 2025, our operations outside of the United States generated 43% of our consolidated net revenue, with Mexico, Russia, Canada, China, the United Kingdom, Brazil and South Africa comprising approximately 24% of our consolidated net revenue. As a result, we are exposed to foreign exchange risk in the international markets in whi ch our products are made, manufactured, distributed or sold. In the 12 weeks ended September 6, 2025, favorable foreign exchange contributed to net revenue performance by 0.5 percentage points primarily driven by an appreciation of the Russian ruble, euro, British pound and Polish zloty, partially offset by declines in the Turkish lira, Mexican peso and Argentine peso . In the 36 weeks ended September 6, 2025, unfavorable foreign exchange reduced net revenue performance by 1 percentage point primarily driven by declines in the Mexican peso, Turkish lira, Egyptian pound and Brazilian real, partially 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.
In addition, 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 5.5% and 5% of our consolidated net revenue for the 12 and 36 weeks ended September 6, 2025, respectively. Russia accounted for 4.5% of our consolidated assets, including 15% of
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our consolidated cash and cash equivalents and 39% of our accumulated currency translation adjustment loss as of September 6, 2025.
See Note 9 to our condensed consolidated financial statements in this Form 10-Q for the fair values of our financial instruments as of September 6, 2025 and December 28, 2024 and Note 9 to our consolidated financial statements in our Recast Segment Information for a discussion of these items.
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 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 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%. Widespread implementation is expected by the end of 2025, with certain countries that have not yet enacted potentially applying the legislation as of a retroactive date. As the legislation becomes effective in countries in which
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we do business, our taxes could increase and negatively impact our provision for income taxes. We will continue to monitor pending legislation and implementation by individual countries and evaluate the potential impact on our business in future periods.
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.
The retail industry also continues to be impacted by the actions and increasing power of retailers, including as a result consolidation of ownership resulting in large retailers or buying groups with increased purchasing power, particularly in North America, Europe and Latin America. 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.
Cautionary statements included above and in “Item 1A. Risk Factors” in our 2024 Form 10-K and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” in our Recast Segment Information should be considered when evaluating our trends and future results.

Results of Operations – Consolidated Review
Consolidated Results
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. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Financial Results – Volume” included in our Recast Segment Information for further information on volume. 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, including changes in ownership or control in consolidated subsidiaries and nonconsolidated equity investees. Further, unit volume performance excludes the impact of an additional week of results every five or six years (53 rd reporting week), where applicable.
We report all of our international operations on a monthly calendar basis. The 12 weeks ended September 6, 2025 and September 7, 2024 include volume outside of North America for the months of June, July and August. The 36 weeks ended September 6, 2025 and September 7, 2024 include volume outside of North America for the months of January through August.
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Consolidated Net Revenue and Operating Profit

  12 Weeks Ended 36 Weeks Ended
  9/6/2025 9/7/2024 Change 9/6/2025 9/7/2024 Change
Net revenue $ 23,937   $ 23,319  3   % $ 64,582   $ 64,070  1   %
Operating profit $ 3,569   $ 3,872  (8) % $ 7,941   $ 10,637  (25) %
Operating margin 14.9   % 16.6  % (1.7) 12.3   % 16.6  % (4.3)

See “Results of Operations – Segment Review” for a tabular presentation and discussion of key drivers of net revenue.
12 Weeks
Operating profit decreased 8% and operating margin declined 1.7 percentage points. Operating profit performance was primarily driven by certain operating cost increases, a decline in organic volume, an 8-percentage-point impact of higher commodity costs, partly driven by a 3-percentage-point impact of tariffs, and higher acquisition and divestiture-related charges. These impacts were partially offset by productivity savings, effective net pricing and lower advertising and marketing expenses. The operating margin decline primarily reflects the acquisition and divestiture-related charges related to our poppi acquisition.
36 Weeks
Operating profit decreased 25% and operating margin declined 4.3 percentage points. Operating profit performance was primarily driven by certain operating cost increases, impairment charges related to the Rockstar brand, a decline in organic volume and a 5.5-percentage-point impact of higher commodity costs. These impacts were partially offset by productivity savings, effective net pricing and lower advertising and marketing expenses. The operating margin decline primarily reflects the unfavorable impact of the impairment charges related to the Rockstar brand.

Other Consolidated Results

  12 Weeks Ended 36 Weeks Ended
  9/6/2025 9/7/2024 Change 9/6/2025 9/7/2024 Change
Other pension and retiree medical benefits income $ 26   $ 41  $ (15) $ 91   $ 155  $ (64)
Net interest expense and other $ 264   $ 219  $ 45   $ 788   $ 655  $ 133  
Tax rate 21.4   % 20.3  % 20.8   % 20.2  %
Net income attributable to PepsiCo $ 2,603   $ 2,930  (11) % $ 5,700   $ 8,055  (29) %
Net income attributable to PepsiCo per common share – diluted
$ 1.90   $ 2.13  (11) % $ 4.15   $ 5.84  (29) %

12 Weeks
Other pension and retiree medical benefits income decreased $15 million, primarily reflecting recognition of fixed income losses on plan assets and the impact of certain plan changes approved in 2020, as discussed in Note 7 to our consolidated financial statements in our Recast Segment Information, partially offset by higher prior-year recognition of special termination benefits due to restructuring actions as part of our 2019 Productivity Plan.
Net interest expense and other increased $45 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 and higher gains on the market value of investments used to economically hedge a portion of our deferred compensation liability.
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The reported tax rate increased 1.1 percentage points, primarily reflecting the unfavorable impact of a tax audit settlement in our LatAm Foods segment, partially offset by the reversal of deferred tax liability on undistributed earnings as a result of a tax election.
36 Weeks
Other pension and retiree medical benefits income decreased $64 million, primarily reflecting recognition of fixed income losses on plan assets and the impact of certain plan changes approved in 2020, as discussed in Note 7 to our consolidated financial statements in our Recast Segment Information, partially offset by higher prior-year recognition of special termination benefits due to restructuring actions as part of our 2019 Productivity Plan.
Net interest expense and other increased $133 million , primarily 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 increased 0.6 percentage points, primarily reflecting the impact of a prior-year release of a valuation allowance in a foreign jurisdiction.

Results of Operations – Segment Review
Effective beginning with our first quarter of 2025, we realigned certain of our reportable segments to conform with changes to our organizational structure and how our Chief Executive Officer regularly reviews the performance of, and allocates resources to, these segments. Our historical segment reporting has been recast to reflect our current organizational structure.
While our financial results in North America are reported on a 12-week basis, all of our international operations are reported on a monthly calendar basis for which the months of June, July and August are reflected in our results for the 12 weeks ended September 6, 2025 and September 7, 2024, and the months January through August are reflected in our results for the 36 weeks ended September 6, 2025 and September 7, 2024.
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.
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 GAAP.
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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.”

12 Weeks Ended 9/6/2025
Impact of Impact of
Reported
% Change, GAAP measure Foreign exchange translation Acquisitions and divestitures Organic
% Change, non-GAAP measure (a)
Organic volume change (b)
Effective net pricing
PFNA —   % —  (2.5) (3) % (4) 2 
PBNA 2   % —  —  2   % (4) 6 
IB Franchise —   % (1) —  (1) % (5) 4 
EMEA 9   % (4) —  5.5   % —  6 
LatAm Foods 2   % 2  —  4   % —  4 
Asia Pacific Foods 2   % —  (1) 1   % 4  (3)
Total 3   % (0.5) (1) 1   % (3) 4 

36 Weeks Ended 9/6/2025
Impact of Impact of
Reported
% Change, GAAP measure Foreign exchange translation Acquisitions and divestitures Organic
% Change, non-GAAP measure (a)
Organic volume change (b)
Effective net pricing
PFNA —   % —  (2) (2) % (3) 1 
PBNA 1   % —  —  1   % (3) 4 
IB Franchise 2   % 1  —  3   % —  3 
EMEA 6   % —  —  6   % (3.5) 10 
LatAm Foods (5) % 10  —  4   % 1  3 
Asia Pacific Foods —   % 1  (1) —   % 5  (4.5)
Total 1   % 1  (0.5) 1.5   % (2) 4 

(a) Amounts may not sum due to rounding.
(b) Excludes the impact of acquisitions and divestitures. 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 bottler case sales and concentrate shipments and equivalents (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.
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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.”

12 Weeks Ended 9/6/2025
PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Corporate unallocated expenses Total
Reported, GAAP measure $ 1,536  $ 729  $ 436  $ 720  $ 424  $ 151  $ (427) $ 3,569 
Items Affecting Comparability (a)

Mark-to-market net impact —  —  —  —  —  —  23  23 
Restructuring and impairment charges 32  19  2  69  17  5  (2) 142 
Acquisition and divestiture-related charges 2  219  —  —  —  —  —  221 
Impairment and other charges —  8  73  19  —  —  —  100 
Indirect and income tax impact —  —  —  —  82  —  —  82 
Core, non-GAAP measure 1,570  975  511  808  523  156  (406) 4,137 
Impact of foreign exchange translation —  —  (3) (30) 11  (1) —  (23)
Core Constant Currency, non-GAAP measure $ 1,570  $ 975  $ 508  $ 778  $ 534  $ 155  $ (406) $ 4,114 

Reported Operating Profit % Change, GAAP measure (5) % (20) % (5) % 1  % (12) % 16  % (3.5) % (8) %
Core Operating Profit % Change, non-GAAP measure (3.5) % (7) % 8  % 7  % 6  % 19  % 16  % (1) %
Core Constant Currency Operating Profit % Change, non-GAAP measure (3.5) % (7) % 7  % 3  % 9  % 18  % 16  % (1.5) %

12 Weeks Ended 9/7/2024
PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Corporate unallocated expenses Total
Reported, GAAP measure $ 1,620  $ 914  $ 458  $ 713  $ 480  $ 129  $ (442) $ 3,872 
Items Affecting Comparability (a)

Mark-to-market net impact —  —  —  —  —  —  52  52 
Restructuring and impairment charges 8  128  15  35  11  2  39  238 
Acquisition and divestiture-related charges —  5  —  —  —  —  —  5 
Impairment and other charges/credits —  —  —  10  —  —  —  10 
Product recall-related impact (1) —  —  —  —  —  —  (1)
Core, non-GAAP measure $ 1,627  $ 1,047  $ 473  $ 758  $ 491  $ 131  $ (351) $ 4,176 

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36 Weeks Ended 9/6/2025
PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Corporate unallocated expenses Total
Reported, GAAP measure $ 4,463  $ 550  $ 1,248  $ 1,310  $ 1,301  $ 321  $ (1,252) $ 7,941 
Items Affecting Comparability (a)

Mark-to-market net impact —  —  —  —  —  —  (8) (8)
Restructuring and impairment charges 147  192  7  118  36  9  45  554 
Acquisition and divestiture-related charges 23  285  —  —  —  —  —  308 
Impairment and other charges —  1,537  73  270  —  80  —  1,960 
Indirect and income tax impact —  —  —  —  82  —  —  82 
Core, non-GAAP measure 4,633  2,564  1,328  1,698  1,419  410  (1,215) 10,837 
Impact of foreign exchange translation 6  4  20  (16) 170  2  —  186 
Core Constant Currency, non-GAAP measure $ 4,639  $ 2,568  $ 1,348  $ 1,682  $ 1,589  $ 412  $ (1,215) $ 11,023 

Reported Operating Profit % Change, GAAP measure (7) % (77) % 2  % (13) % (9) % (21) % 9  % (25) %
Core Operating Profit % Change, non-GAAP measure (8) % —  % 7  % 7  % (3) % (1) % 14  % (4) %
Core Constant Currency Operating Profit % Change, non-GAAP measure (8) % —  % 9  % 5.5  % 8  % —  % 14  % (2) %

36 Weeks Ended 9/7/2024
PFNA PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Corporate unallocated expenses Total
Reported, GAAP measure $ 4,802  $ 2,411  $ 1,221  $ 1,509  $ 1,436  $ 407  $ (1,149) $ 10,637 
Items Affecting Comparability (a)

Mark-to-market net impact —  —  —  —  —  —  8  8 
Restructuring and impairment charges 47  143  15  75  32  6  75  393 
Acquisition and divestiture-related charges —  7  —  —  —  —  —  7 
Impairment and other charges —  —  —  10  —  —  —  10 
Product recall-related impact 181  —  —  —  —  —  —  181 
Core, non-GAAP measure $ 5,030  $ 2,561  $ 1,236  $ 1,594  $ 1,468  $ 413  $ (1,066) $ 11,236 

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

PFNA
12 Weeks
Net revenue decreased slightly, primarily driven by a decrease in organic volume, partially offset by the favorable impact of acquisitions and effective net pricing.
Unit volume declined 4%, driven by a 4% decrease in savory snacks volume and a 2% decrease in other foods volume.
Operating profit decreased 5%, primarily reflecting certain operating cost increases, including strategic initiatives, and the decrease in organic volume. These impacts were partially offset by productivity savings and a 4-percentage-point impact of gains on asset sales.
36 Weeks
Net revenue decreased slightly, primarily reflecting a decrease in organic volume, partially offset by the favorable impact of acquisitions.
Unit volume declined 2%, driven by a 3% decrease in savory snacks volume, partially offset by a 3.5% increase in other foods volume.
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Operating profit decreased 7%, primarily reflecting certain operating cost increases, including strategic initiatives, and the decrease in organic volume. These impacts were partially offset by productivity savings and a 3-percentage-point impact of gains on asset sales.

PBNA
12 Weeks
Net revenue increased 2%, 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 (NCB) volume, while carbonated soft drink (CSD) volume was even with the prior year.
Operating profit decreased 20%, primarily due to acquisition and divestiture-related charges related to our poppi acquisition, certain operating cost increases, a 13-percentage-point impact of higher commodity costs, largely driven by a 12-percentage-point impact of tariffs, and the decline in organic volume. These impacts were partially offset by productivity savings, lower restructuring charges, lower advertising and marketing expenses and the effective net pricing.
36 Weeks
Net revenue increased 1%, primarily driven by effective net pricing, partially offset by an organic volume decline.
Unit volume declined 3%, driven by a 6% decline in NCB volume, while CSD volume was even with the prior year.
Operating profit decreased 77%, primarily reflecting impairment charges related to the Rockstar brand. Operating profit also decreased due to certain operating cost increases, the decline in organic volume, acquisition and divestiture-related charges related to our poppi acquisition and a 5-percentage-point impact of higher commodity costs, driven by a 5-percentage-point impact of tariffs. These impacts were partially offset by productivity savings, the effective net pricing and lower advertising and marketing expenses.

IB Franchise
12 Weeks
Net revenue increased slightly, primarily reflecting effective net pricing and a 1-percentage-point impact of favorable foreign exchange translation, partially offset by an organic volume decline.
Unit volume declined 1%, primarily reflecting declines in Mexico and India, partially offset by growth in the Middle East.
Operating profit decreased 5%, primarily reflecting an impairment charge related to the Rockstar brand and a 4-percentage-point impact of higher commodity costs, partially offset by lower advertising and marketing costs and productivity savings.
36 Weeks
Net revenue increased 2%, primarily reflecting effective net pricing, partially offset by a 1-percentage-point impact of unfavorable foreign exchange translation.
Unit volume grew 1%, primarily reflecting growth in the Middle East, China and Pakistan, partially offset by a decline in Mexico.
Operating profit increased 2%, primarily reflecting 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
12 Weeks
Net revenue increased 9%, primarily reflecting effective net pricing, part of which is from subsidiaries operating in highly inflationary economies, and a 4-percentage-point impact of favorable foreign exchange translation.
Convenient foods unit volume declined 1%, primarily reflecting declines in Russia, South Africa and the United Kingdom, partially offset by growth in the Middle East and Pakistan.
Beverage unit volume grew 1.5%, primarily reflecting growth in the Middle East, partially offset by declines in Turkey and Russia.
Operating profit increased 1%, primarily reflecting the effective net pricing, productivity savings, lower advertising and marketing costs and a 4-percentage-point impact of favorable foreign exchange translation. These impacts were partially offset by certain operating cost increases, an 18-percentage-point impact of higher commodity costs, primarily dairy, potatoes and cooking oil, and higher restructuring charges.
36 Weeks
Net revenue increased 6%, primarily reflecting effective net pricing, partially offset by an organic volume decline.
Convenient foods unit volume declined 5%, primarily reflecting declines in South Africa and Russia.
Beverage unit volume grew slightly, primarily reflecting growth in the Middle East, Germany, Poland, Turkey and France, partially offset by declines in South Africa and Russia.
Operating profit decreased 13%, primarily reflecting certain operating cost increases, a 24-percentage-point impact of higher commodity costs, primarily dairy, potatoes and cooking oil, and an impairment charge related to the Rockstar brand. These impacts were partially offset by the effective net pricing and productivity savings.

LatAm Foods
12 Weeks
Net revenue increased 2%, primarily reflecting effective net pricing, partially offset by a 2-percentage-point impact of unfavorable foreign exchange translation.
Unit volume declined slightly, primarily reflecting a decline in Mexico, partially offset by growth in Colombia and Brazil.
Operating profit decreased 12%, primarily reflecting certain operating cost increases, an unfavorable impact of an indirect tax audit settlement, and an 8-percentage-point impact of higher commodity costs, partially offset by productivity savings and the effective net pricing.
36 Weeks
Net revenue decreased 5%, primarily reflecting a 10-percentage-point impact of unfavorable foreign exchange translation, driven by the weakening of the Mexican peso, partially offset by effective net pricing.
Unit volume grew 1%, primarily reflecting growth in Brazil, Peru and Argentina, partially offset by a decline in Mexico.
Operating profit decreased 9%, primarily reflecting certain operating cost increases, a 12-percentage-point impact of unfavorable foreign exchange translation, driven primarily by the weakening of the Mexican
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peso, a 7-percentage-point impact of higher commodity costs and an unfavorable impact of an indirect tax audit settlement, partially offset by productivity savings, the effective net pricing and a 4-percentage-point favorable impact of certain indirect tax credits in Brazil.

Asia Pacific Foods
12 Weeks
Net revenue increased 2%, primarily reflecting organic volume growth, partially offset by unfavorable net pricing.
Unit volume grew 3%, primarily reflecting growth in India, Australia and Thailand, partially offset by a decline in China.
Operating profit increased 16%, primarily reflecting productivity savings, lower advertising and marketing costs, the organic volume growth and a 5-percentage-point impact of lower commodity costs. These impacts were partially offset by certain operating cost increases and the unfavorable net pricing.
36 Weeks
Net revenue increased slightly, primarily reflecting organic volume growth, partially offset by unfavorable net pricing.
Unit volume grew 4%, primarily reflecting growth in India, Thailand and Australia.
Operating profit decreased 21%, primarily reflecting certain operating cost increases, the unfavorable net pricing and an impairment charge related to the Be & Cheery brand. These impacts were partially offset by productivity savings, lower advertising and marketing costs and the organic volume growth.

Non-GAAP Measures
Certain financial measures contained in this Form 10-Q 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-Q 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-Q 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 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; debt redemptions, cash tender or exchange offers; and remeasurements of net monetary assets. See below and “Items Affecting Comparability” for a description of adjustments to our GAAP financial measures in this Form 10-Q. 
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
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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-Q 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 where applicable, the impact of the 53 rd reporting week. Beginning with our first quarter of 2025, on a prospective basis, we are also applying the constant currency calculation for our subsidiaries operating in highly inflationary economies. 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 income, provision for income taxes, net income attributable to noncontrolling interests 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 Productivity Plan, charges associated with our acquisitions and divestitures, impairment and other charges, indirect and income tax impact, product recall-related impact and the impact of settlement and curtailment 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 with our first quarter of 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 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.
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Items Affecting Comparability
Our reported financial results in this Form 10-Q are impacted by the following items in each of the following periods:

12 Weeks Ended 9/6/2025
Cost of sales Gross profit Selling, general and administrative expenses Impairment of intangible assets Operating profit Other pension and retiree medical benefits income Provision
for income taxes (a)
Net income attributable to PepsiCo
Reported, GAAP measure $ 11,113   $ 12,824   $ 9,122   $ 133   $ 3,569   $ 26   $ 713   $ 2,603  
Items Affecting Comparability
Mark-to-market net impact (18) 18  (5) —  23  —  6  17 
Restructuring and impairment charges (16) 16  (126) —  142  (1) 25  116 
Acquisition and divestiture-related charges (46) 46  (125) (50) 221  —  52  169 
Impairment and other charges —  —  (17) (83) 100  —  8  92 
Indirect and income tax impact (b)
—  —  (82) —  82  —  (47) 129 
Pension and retiree medical-related impact —  —  —  —  —  13  2  11 
Core, non-GAAP measure $ 11,033   $ 12,904   $ 8,767   $ —   $ 4,137   $ 38   $ 759   $ 3,137  

12 Weeks Ended 9/7/2024
Cost of sales Gross profit Selling, general and administrative expenses Impairment of intangible assets Operating profit Other pension and retiree medical benefits income Provision for income taxes (a)
Net income attributable to noncontrolling interests Net income attributable to PepsiCo
Reported, GAAP measure $ 10,396  $ 12,923  $ 9,027  $ 24  $ 3,872  $ 41  $ 749  $ 15  $ 2,930 
Items Affecting Comparability
Mark-to-market net impact (19) 19  (33) —  52  —  12  —  40 
Restructuring and impairment charges (10) 10  (214) (14) 238  7  50  2  193 
Acquisition and divestiture-related charges —  —  (5) —  5  —  1  —  4 
Impairment and other charges —  —  —  (10) 10  —  2  —  8 
Product recall-related impact 1  (1) —  —  (1) 3  —  —  2 
Pension and retiree medical-related impact —  —  —  —  —  15  3  —  12 
Core, non-GAAP measure $ 10,368  $ 12,951  $ 8,775  $ —  $ 4,176  $ 66  $ 817  $ 17  $ 3,189 

36 Weeks Ended 9/6/2025
Cost of sales Gross profit Selling, general and administrative expenses Impairment of intangible assets Operating profit Other pension and retiree medical benefits income
Provision
for income taxes (a)
Net income attributable to PepsiCo
Reported, GAAP measure $ 29,343   $ 35,239   $ 25,305   $ 1,993   $ 7,941   $ 91   $ 1,504   $ 5,700  
Items Affecting Comparability
Mark-to-market net impact (9) 9  17  —  (8) —  (2) (6)
Restructuring and impairment charges (119) 119  (435) —  554  13  100  467 
Acquisition and divestiture-related charges (46) 46  (212) (50) 308  —  72  236 

Impairment and other charges —  —  (17) (1,943) 1,960  —  421  1,539 
Indirect and income tax impact (b)
—  —  (82) —  82  —  (47) 129 

Pension and retiree medical-related impact —  —  —  —  —  12  2  10 

Core, non-GAAP measure $ 29,169   $ 35,413   $ 24,576   $ —   $ 10,837   $ 116   $ 2,050   $ 8,075  

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36 Weeks Ended 9/7/2024
Cost of sales Gross profit Selling, general and administrative expenses Impairment of intangible assets Operating profit Other pension and retiree medical benefits income Provision for income taxes (a)
Net income attributable to noncontrolling interests Net income attributable to PepsiCo
Reported, GAAP measure $ 28,563  $ 35,507  $ 24,846  $ 24  $ 10,637  $ 155  $ 2,045  $ 37  $ 8,055 
Items Affecting Comparability
Mark-to-market net impact 13  (13) (21) —  8  —  2  —  6 
Restructuring and impairment charges (16) 16  (363) (14) 393  22  90  1  324 
Acquisition and divestiture-related charges
—  —  (7) —  7  —  2  —  5 

Impairment and other charges —  —  —  (10) 10  —  2  —  8 

Product recall-related impact (174) 174  (7) —  181  3  43  —  141 
Pension and retiree medical-related impact —  —  —  —  —  17  3  —  14 

Core, non-GAAP measure $ 28,386  $ 35,684  $ 24,448  $ —  $ 11,236  $ 197  $ 2,187  $ 38  $ 8,553 

(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 reflects the unfavorable impact of an income tax audit settlement in our LatAm Foods segment.

  12 Weeks Ended 36 Weeks Ended
9/6/2025 9/7/2024 Change 9/6/2025 9/7/2024 Change
Net income attributable to PepsiCo per common share – diluted, GAAP measure $ 1.90   $ 2.13  (11) % $ 4.15   $ 5.84  (29) %
Mark-to-market net impact
0.01   0.03  —   — 
Restructuring and impairment charges 0.08   0.14  0.34   0.24 
Acquisition and divestiture-related charges 0.12   —  0.17   — 
Impairment and other charges 0.07   0.01  1.12   0.01 
Indirect and income tax impact 0.09   —  0.09   — 
Product recall-related impact —   —  —   0.10 
Pension and retiree medical-related impact 0.01   0.01  0.01   0.01 

Core net income attributable to PepsiCo per common share – diluted, non-GAAP measure $ 2.29   (a)
$ 2.31  (a)
(1) % $ 5.88   $ 6.20  (5) %
Impact of foreign exchange translation
(1) 2  
Growth in core net income attributable to PepsiCo per common share – diluted, on a constant currency basis, non-GAAP measure (2) %

(3.5) % (a)

(a) Does not sum due to rounding.

Mark-to-Market Net Impact
We centrally manage commodity derivatives on behalf of our segments. These commodity derivatives include agricultural, metals, and energy products. 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
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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 September 6, 2025, we have incurred pre-tax charges of $3.2 billion, including cash expenditures of $2.4 billion. 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 condensed consolidated financial statements in this Form 10-Q, as well as Note 3 to our consolidated financial statements in our Recast Segment Information, 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 condensed consolidated financial statements.

Acquisition and Divestiture-Related Charges
Acquisition and divestiture-related charges primarily include transaction expenses, such as consulting, advisory and other professional fees, and merger and integration charges, as well as fair value adjustments to the acquired inventory included in the acquisition-date balance sheets. Merger and integration charges include distribution agreement termination fees, impairment of certain acquisition-related intangibles, employee-related costs, closing costs and other integration costs.
See Note 12 to our condensed consolidated financial statements for further information.

Impairment and Other Charges
We recognized charges primarily related to the impairments of the Rockstar and Be & Cheery brands.
See Notes 1 and 4 to our condensed 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.
See Note 1 to our condensed 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 condensed consolidated financial statements for further information.

Pension and Retiree Medical-Related Impact
Pension and retiree medical-related impact includes settlement charges related to lump sum distributions exceeding the total of annual service and interest costs, partially offset by curtailment gains.
See Note 7 to our condensed consolidated financial statements for further information.

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
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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 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 “Our Business Risks” and Note 8 to our condensed consolidated financial statements included in this Form 10-Q, “Item 1A. Risk Factors” in our 2024 Form 10-K and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” and Note 8 to our consolidated financial statements included in our Recast Segment Information for further information.
As of September 6, 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 September 6, 2025, Russia accounted for 15% 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 September 6, 2025, our mandatory transition tax liability was $1.0 billion, which must be paid through 2026 under the provisions of the TCJ Act. See “Our Liquidity and Capital Resources” and Note 5 to our consolidated financial statements included in our Recast Segment Information 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 13 to our condensed consolidated financial statements for further discussion of supply chain financing arrangements.

Operating Activities
During the 36 weeks ended September 6, 2025, net cash provided by operating activities was $5.5 billion, compared to net cash provided by operating activities of $6.2 billion in the prior-year period. The de crease in operating cash flow primarily reflects unfavorable operating profit performance.

Investing Activities
During the 36 weeks ended September 6, 2025 , net cash used for investing activities was $5.2 billion , primarily reflecting net cash paid in connection with our acquisitions of poppi of $1.9 billion and Siete of $1.2 billion, as well as net capital spending of $2.2 billion.
We regularly review our plans with respect to ne t capital spending and believe that we have sufficient liquidity to meet our net capital spending needs.

Financing Activities
During the 36 weeks ended September 6, 2025, net cash used for financing activities was $1.0 billion, primarily reflecting the return of operating cash flow to our shareholders through dividend payments and share repurchases of $6.4 billion and payments of long-term debt borrowings of $3.2 billion, partially offset by proceeds from the issuances of long-term debt of $8.2 billion.
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