Basis of Presentation and Our Divisions

8 Months Ended

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.