Basis of Presentation and Our Divisions

6 Months Ended

Jun. 14, 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 24 weeks ended June 14, 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 March, April and May are reflected in our results for the 12 weeks ended June 14, 2025 and June 15, 2024, and the months of January through May are reflected in our results for the 24 weeks ended June 14, 2025 and June 15, 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/(Loss) by Segment


	12 Weeks Ended 6/14/2025
	PFNA		PBNA		IB Franchise		EMEA		LatAm Foods		Asia Pacific Foods		Total
Net revenue	$	6,476	$	6,796	$	1,368	$	4,536	$	2,548	$	1,002	$	22,726
Segment cost of sales (a)	2,471		2,990		400		2,638		1,074		627
Segment selling, general and administrative expenses (a)	2,517		2,812		430		1,241		929		282
Restructuring and impairment charges (b)	91		48		3		36		12		3
Acquisition and divestiture-related charges (c)	6		56		—		—		—		—

Impairment and other charges (d)	—		1,529		—		251		—		80


Segment operating profit/(loss)	$	1,391	$	(639)	$	535	$	370	$	533	$	10	$	2,200
Corporate unallocated expenses													(411)
Operating profit													1,789
Other pension and retiree medical benefits income													42
Net interest expense and other													(260)
Income before income taxes													$	1,571


	12 Weeks Ended 6/15/2024
	PFNA		PBNA		IB Franchise		EMEA		LatAm Foods		Asia Pacific Foods		Total
Net revenue	$	6,435	$	6,811	$	1,326	$	4,183	$	2,749	$	997	$	22,501
Segment cost of sales (a)	2,330		3,052		400		2,406		1,145		597
Segment selling, general and administrative expenses (a)	2,400		2,767		424		1,173		1,054		293
Restructuring and impairment charges (b)	13		5		—		22		16		4


Product recall-related impact (e)	15		—		—		—		—		—

Segment operating profit	$	1,677	$	987	$	502	$	582	$	534	$	103	$	4,385
Corporate unallocated expenses (f)													(337)
Operating profit													4,048
Other pension and retiree medical benefits income													56
Net interest expense and other													(234)
Income before income taxes													$	3,870


	24 Weeks Ended 6/14/2025
	PFNA		PBNA		IB Franchise		EMEA		LatAm Foods		Asia Pacific Foods		Total
Net revenue	$	12,689	$	12,672	$	2,127	$	6,924	$	4,209	$	2,024	$	40,645
Segment cost of sales (a)	4,819		5,649		612		4,045		1,772		1,239
Segment selling, general and administrative expenses (a)	4,807		5,434		698		1,989		1,541		531
Restructuring and impairment charges (b)	115		173		5		49		19		4
Acquisition and divestiture-related charges (c)	21		66		—		—		—		—
Impairment and other charges (d)	—		1,529		—		251		—		80


Segment operating profit/(loss)	$	2,927	$	(179)	$	812	$	590	$	877	$	170	$	5,197
Corporate unallocated expenses													(825)
Operating profit													4,372
Other pension and retiree medical benefits expense													65
Net interest expense and other													(524)
Income before income taxes													$	3,913


	24 Weeks Ended 6/15/2024
	PFNA		PBNA		IB Franchise		EMEA		LatAm Foods		Asia Pacific Foods		Total
Net revenue	$	12,704	$	12,685	$	2,065	$	6,616	$	4,639	$	2,042	$	40,751
Segment cost of sales (a)	4,602		5,805		617		3,877		1,910		1,207
Segment selling, general and administrative expenses (a)	4,699		5,366		685		1,903		1,752		553
Restructuring and impairment charges (b)	39		15		—		40		21		4
Acquisition and divestiture-related charges (c)	—		2		—		—		—		—

Product recall-related impact (e)	182		—		—		—		—		—

Segment operating profit	$	3,182	$	1,497	$	763	$	796	$	956	$	278	$	7,472
Corporate unallocated expenses (f)													(707)
Operating profit													6,765
Other pension and retiree medical benefits expense													114
Net interest expense and other													(436)
Income before income taxes													$	6,443

(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 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 and 24 weeks ended June 14, 2025, we recorded pre-tax charges of $1,860 million ($1,447 million after-tax or $1.05 per share), of which $1,780 million is related to the impairment of the Rockstar brand in our PBNA and EMEA segments. The remaining $80 million is related to the impairment of the Be & Cheery brand in our Asia Pacific Foods segment. See Note 4 for further information.

(e)In the 12 weeks ended June 15, 2024, we recorded a pre-tax charge of $15 million ($11 million after-tax or $0.01 per share) associated with a previously announced voluntary recall of certain bars and cereals in our PFNA segment (Quaker Recall) with $8 million recorded in cost of sales and $7 million recorded in selling, general and administrative expenses. In the 24 weeks ended June 15, 2024, we recorded a pre-tax charge of $182 million ($139 million after-tax or $0.10 per share) associated with the Quaker Recall, with $175 million recorded in cost of sales related to property, plant and equipment write-offs, employee severance costs and other costs and $7 million recorded in selling, general and administrative expenses.

(f)In the 12 and 24 weeks ended June 15, 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
	6/14/2025				6/15/2024
	Beverages(a)		Convenient Foods		Beverages(a)		Convenient Foods




North America	51	%	49	%	51	%	49	%
International (b)	33	%	67	%	30	%	70	%
PepsiCo	43	%	57	%	43	%	57	%


	24 Weeks Ended
	6/14/2025				6/15/2024
	Beverages(a)		Convenient Foods		Beverages(a)		Convenient Foods




North America	50	%	50	%	50	%	50	%
International (b)	31	%	69	%	28	%	72	%
PepsiCo	43	%	57	%	42	%	58	%

(a)Beverage revenue from company-owned bottlers, which includes our consolidated bottling operations in our PBNA and EMEA segments, was 36% of our consolidated net revenue in the 12 and 24 weeks ended June 14, 2025 and 36% and 35% of our consolidated

net revenue in the 12 and 24 weeks ended June 15, 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 38% and 62% of EMEA net revenue, respectively, in the 12 weeks ended June 14, 2025, 36% and 64% of EMEA net revenue, respectively, in the 24 weeks ended June 14, 2025 and 35% and 65% of EMEA net revenue, respectively, in the 12 and 24 weeks ended June 15, 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
	6/14/2025		6/15/2024		6/14/2025		6/15/2024		6/14/2025		6/15/2024
PFNA	$	230	$	298	$	4	$	3	$	226	$	185
PBNA	283		298		5		5		236		243
IB Franchise	30		33		4		4		23		22
EMEA	137		177		4		4		131		110
LatAm Foods	115		145		1		1		99		102
Asia Pacific Foods	68		52		2		2		36		29
Total segment	863		1,003		20		19		751		691
Corporate	41		84		—		—		36		28
Total	$	904	$	1,087	$	20	$	19	$	787	$	719


	24 Weeks Ended
	Capital Spending(a)				Amortization of Intangible Assets				Depreciation and Other Amortization
	6/14/2025		6/15/2024		6/14/2025		6/15/2024		6/14/2025		6/15/2024
PFNA	$	425	$	535	$	8	$	6	$	432	$	374
PBNA	531		478		10		10		484		479
IB Franchise	46		44		7		7		39		37
EMEA	187		247		6		7		210		186
LatAm Foods	161		206		1		1		161		166
Asia Pacific Foods	92		71		3		3		58		49
Total segment	1,442		1,581		35		34		1,384		1,291
Corporate	65		120		—		—		72		54
Total	$	1,507	$	1,701	$	35	$	34	$	1,456	$	1,345

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