The accompanying consolidated financial statements have been prepared in accordance with GAAP and include the consolidated accounts of PepsiCo, Inc. and the affiliates that we control. In addition, we include our share of the results of certain other affiliates using the equity method based on our economic ownership interest, our ability to exercise significant influence over the operating or financial decisions of these affiliates or our ability to direct their economic resources. We do not control these other affiliates, as our ownership in these other affiliates is generally 50% or less. Intercompany balances and transactions are eliminated. As a result of exchange restrictions and other operating restrictions, we do not have control over our Venezuelan subsidiaries. As such, our Venezuelan subsidiaries are not included within our consolidated financial results for any period presented.

Raw materials, direct labor and plant overhead, as well as purchasing and receiving costs, costs directly related to production planning, inspection costs and raw materials handling facilities, are included in cost of sales. The costs of moving, storing and delivering finished product, including merchandising activities, are included in selling, general and administrative expenses.

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities. Estimates are used in determining, among other items, sales incentives accruals, tax reserves, share-based compensation, pension and retiree medical accruals, amounts and useful lives for intangible assets and future cash flows associated with impairment testing for indefinite-lived intangible assets, goodwill and other long-lived assets. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. Additionally, the business and economic uncertainty resulting from volatile geopolitical conditions and changes in the interest rate and inflationary cost environment have made such estimates and assumptions more difficult to calculate. As future events and their effect cannot be determined with precision, actual results could differ significantly from those estimates.

Our fiscal year ends on the last Saturday of each December, resulting in a 53rd reporting week every five or six years, including in our 2022 financial results. While our North America financial results are reported on a weekly calendar basis, our international operations are reported on a monthly calendar basis. The following chart details our quarterly reporting schedule:

Unless otherwise noted, tabular dollars are in millions, except per share amounts. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Certain reclassifications were made to the prior year’s consolidated financial statements to conform to the current year presentation.

Through our operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of beverages and convenient foods, serving customers and consumers in more than 200 countries and territories with our largest operations in the United States, Mexico, Russia, Canada, China, the United Kingdom, South Africa and Brazil.

Our segments are held accountable for share-based compensation expense and, therefore, this expense is allocated to our segments as an incremental employee compensation cost. The expense allocated to our segments excludes any impact of changes in our assumptions during the year which reflect market conditions over which segment management has no control. Therefore, any variances between allocated expense and our actual expense are recognized in corporate unallocated expenses.

Pension and retiree medical service costs measured at fixed discount rates are reflected in segment results. The variance between the fixed discount rate used to determine the service cost reflected in segment results and the discount rate as disclosed in Note 7 is reflected in corporate unallocated expenses.

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

Our chief operating decision maker (CODM) is our Chairman and Chief Executive Officer. Our CODM uses segment operating profit/(loss) as the profit measure to evaluate segment performance and allocate resources across segments. Corporate unallocated expenses, other pension and retiree medical benefits (expense)/income and net interest expense and other are centrally managed costs and are therefore excluded from this profit measure to provide better transparency of our segment operating results. Our CODM considers variances of actual performance to our annual operating plan and periodic forecasts when making decisions.

Significant expenses are expenses which are regularly provided to the CODM and are included in segment operating profit/(loss). These consist of segment cost of sales, segment selling, general and administrative expenses, and various items affecting comparability. Segment cost of sales includes raw materials, direct labor and plant overhead, as well as purchasing and receiving costs, costs directly related to production planning, inspection costs and raw materials handling facilities, excluding the impact of items affecting comparability. Segment selling, general and administrative expenses include the costs to execute sales to customers, distribution costs, including the costs of shipping and handling activities, which include certain merchandising activities, costs related to brand and product marketing to consumers, other ongoing operating costs that are not directly related to manufacturing, distribution, selling, advertising or marketing activities as well as other income or expense items, excluding the impact of items affecting comparability. Items affecting comparability include restructuring and impairment charges, acquisition and divestiture-related charges, impairment and other charges/credits, product recall-related impact, indirect tax impact and gain associated with the Juice Transaction.


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


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


	2022
	PFNA		PBNA		IB Franchise		EMEA		LatAm Foods		Asia Pacific Foods		Total
Net revenue	$	26,451	$	26,213	$	4,328	$	16,032	$	8,867	$	4,501	$	86,392
Segment cost of sales (a)	9,856		12,154		1,420		9,823		4,169		2,868
Segment selling, general and administrative expenses (a)	9,715		11,383		1,543		4,598		3,242		1,360
Restructuring and impairment charges (c)	53		68		4		118		32		15
Acquisition and divestiture-related charges (d)	—		51		—		14		—		3
Gain associated with the Juice Transaction (h)	—		(3,029)		—		(292)		—		—
Impairment and other charges (e)	88		160		1,373		1,749		71		177
Segment operating profit/(loss)	$	6,739	$	5,426	$	(12)	$	22	$	1,353	$	78	$	13,606
Corporate unallocated expenses													(2,094)
Operating profit													11,512
Other pension and retiree medical benefits income													132
Net interest expense and other													(939)
Income before income taxes													$	10,705

(a)Does not include items recorded in the cost of sales or selling, general and administrative expenses lines on our income statement that are presented in the restructuring and impairment charges, acquisition and divestiture-related charges, impairment and other charges/credits, product recall-related impact and indirect tax impact lines of these tables.

(b)We recognized a pre-tax gain of $122 million ($92 million after-tax or $0.07 per share) in our PFNA segment, recorded in selling, general and administrative expenses, related to the remeasurement of our previously held 50% equity ownership in Sabra at fair value. See Note 13 for further information.

(f)In 2024, we recorded a pre-tax charge of $187 million ($143 million after-tax or $0.10 per share) associated with the Quaker Recall with $176 million recorded in cost of sales related to property, plant and equipment write-offs, employee severance costs and other costs, $8 million recorded in selling, general and administrative expenses and $3 million recorded in other pension and retiree medical benefits (expense)/income, which is not included in operating profit. In 2023, we recorded a pre-tax charge of $136 million ($104 million after-tax or $0.07 per share) in cost of sales for product returns, inventory write-offs and customer and consumer-related costs associated with the Quaker Recall.

(a)Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and EMEA segments, is 35% of our consolidated net revenue in both 2024 and 2023, and 37% of our consolidated net revenue in 2022. 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.




	Cost of sales		Selling, general and administrative expenses		Impairment of intangible assets(a)		Total
Impairment charges related to intangible assets	$	—	$	—	$	1,198	$	1,198
Impairment charges related to property, plant and equipment	103		22		—		125
Allowance for expected credit losses	—		12		—		12
Allowance for inventory write downs	28		1		—		29
Other	9		42		—		51
Total	$	140	$	77	$	1,198	$	1,415
After-tax amount							$	1,124
Impact on net income attributable to PepsiCo per common share							$	(0.81)




	Cost of sales		Selling, general and administrative expenses		Impairment of intangible assets		Total
PBNA	$	26	$	8	$	126	$	160	Impairment and other charges associated with distribution rights and inventory due to the termination of Bang energy drinks distribution agreement
IB Franchise	—		109		—		109		Impairment related to the sale of a non-strategic investment



EMEA	30		22		251		303		Primarily impairment of intangible assets related to the discontinuation or repositioning of certain juice and dairy brands in Russia (a)
LatAm Foods	—		35		36		71		Loss on sale and impairment of intangible assets related to the sale of certain non-strategic brands
Asia Pacific Foods	5		—		—		5		Impairment of property, plant and equipment related to the discontinuation of a non-strategic brand in China

Total	$	61	$	174	$	413	$	648
After-tax amount							$	522
Impact on net income attributable to PepsiCo per common share							$	(0.38)

In 2023, a pre-tax credit of $13 million ($13 million after-tax or $0.01 per share) was recorded in our EMEA segment, with $9 million in selling, general and administrative expenses and $4 million in cost of sales. In addition, a pre-tax charge of $2 million ($1 million after-tax with a nominal amount per share) was recorded in our LatAm Foods segment in selling, general and administrative expenses. Both of these amounts represent adjustments for changes in estimates of previously recorded amounts.



	2024		2023		2022
PFNA	$	9	$	—	$	88	2024 related to a nutrition bar brand and 2022 related to a baked fruit convenient food brand (each recorded in impairment of intangible assets)
PBNA	556		321		—		2024 includes other-than-temporary impairment of our remaining investment in TBG and allowance for expected credit losses related to receivables associated with the Juice Transaction (recorded in selling, general and administrative expenses). 2023 includes our proportionate share of TBG’s indefinite-lived intangible assets impairment and other-than-temporary impairment of our investment in TBG (recorded in selling, general and administrative expenses) (a)
IB Franchise	4		862		1,264		Primarily related to the SodaStream brand and goodwill (recorded in impairment of intangible assets) (b)
EMEA	145		6		31		2024 primarily includes other-than-temporary impairment of our investment in TBG and allowance for expected credit losses related to certain receivables from TBG (recorded in selling, general and administrative expenses). 2023 and 2022 are related to brands from the Pioneer Foods acquisition (recorded in impairment of intangible assets) (a)
Asia Pacific Foods	—		59		172		Related to the Be & Cheery brand (recorded in impairment of intangible assets)
Total	$	714	$	1,248	$	1,555
After-tax amount	$	584	$	1,033	$	1,301
Impact on net income attributable to PepsiCo per common share	$	(0.42)	$	(0.75)	$	(0.94)

(a)See Note 9 for further information regarding our proportionate share of TBG’s indefinite-lived intangible assets impairment and other-than temporary impairment of our investment in TBG. In 2024, we recorded an allowance for expected credit losses of $193 million, primarily related to outstanding receivables associated with the Juice Transaction.


	Capital Spending						Amortization of Intangible Assets						Depreciation and Other Amortization
	2024		2023		2022		2024		2023		2022		2024		2023		2022
PFNA	$	1,306	$	1,444	$	1,557	$	10	$	11	$	11	$	852	$	787	$	700
PBNA	1,541		1,723		1,714		22		22		22		1,047		1,003		930
IB Franchise	148		110		128		17		17		17		92		82		80
EMEA	880		831		857		16		16		18		461		432		459
LatAm Foods	809		814		551		1		1		2		381		361		295
Asia Pacific Foods	312		312		261		8		8		8		125		110		100
Total segment	4,996		5,234		5,068		74		75		78		2,958		2,775		2,564
Corporate	322		284		139		—		—		—		128		98		121
Total	$	5,318	$	5,518	$	5,207	$	74	$	75	$	78	$	3,086	$	2,873	$	2,685


	Net Revenue						Long-Lived Assets(a)
	2024		2023		2022		2024		2023
United States	$	51,668	$	52,165	$	49,390	$	41,547	$	41,234
Mexico	7,123		7,011		5,472		2,392		2,509
Russia	3,880		3,566		4,118		1,667		1,986
Canada	3,764		3,722		3,536		2,681		2,815
China	2,709		2,703		2,752		1,538		1,510
United Kingdom	2,063		1,946		1,844		871		868
South Africa	1,859		1,707		1,837		1,302		1,305
Brazil	1,765		1,779		1,617		497		573
All other countries	17,023		16,872		15,826		11,179		11,226
Total	$	91,854	$	91,471	$	86,392	$	63,674	$	64,026

(a)Long-lived assets represent property, plant and equipment, indefinite-lived intangible assets, amortizable intangible assets, investments in noncontrolled affiliates and other investments included in other assets. These assets are reported in the country where they are primarily used. See Notes 2 and 15 for further information on property, plant and equipment. See Notes 2 and 4 for further information on goodwill and other intangible assets. See Notes 9 and 15 for further information on other assets.

Corporate unallocated expenses include costs of our corporate headquarters, centrally managed initiatives such as commodity derivative gains and losses, foreign exchange transaction gains and losses, our ongoing business transformation initiatives, unallocated research and development costs, unallocated insurance and benefit programs, certain gains and losses on equity investments, as well as certain other items.