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Basis of Presentation and Our Divisions | 8 Months Ended
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Sep. 06, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Basis of Presentation and Other Divisions | 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. 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 |
| 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 |
| 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 | %
| 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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