PEPSICO INC - Quarter Report: 2025 March (Form 10-Q)

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PepsiCo, Inc. and Subsidiaries

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		Page No.
Part I Financial Information
Item 1.	Condensed Consolidated Financial Statements	2
	Condensed Consolidated Statement of Income – 12 Weeks Ended March 22, 2025 and March 23, 2024	2
	Condensed Consolidated Statement of Comprehensive Income – 12 Weeks Ended March 22, 2025 and March 23, 2024	3
	Condensed Consolidated Statement of Cash Flows – 12 Weeks Ended March 22, 2025 and March 23, 2024	4
	Condensed Consolidated Balance Sheet – March 22, 2025 and December 28, 2024	6
	Condensed Consolidated Statement of Equity – 12 Weeks Ended March 22, 2025 and March 23, 2024	7
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Report of Independent Registered Public Accounting Firm		38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39
Part II Other Information
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 5.	Other Information	41
Item 6.	Exhibits	41

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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
	3/22/2025	3/23/2024
Net Revenue	$	$
Cost of sales
Gross profit
Selling, general and administrative expenses



Operating Profit
Other pension and retiree medical benefits income
Net interest expense and other	()	()
Income before income taxes
Provision for income taxes
Net income
Less: Net income attributable to noncontrolling interests
Net Income Attributable to PepsiCo	$	$
Net Income Attributable to PepsiCo per Common Share
Basic	$	$
Diluted	$	$
Weighted-average common shares outstanding
Basic
Diluted

See accompanying notes to the condensed consolidated financial statements.

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Condensed Consolidated Statement of Comprehensive Income

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	12 Weeks Ended
	3/22/2025	3/23/2024
Net income	$	$
Other comprehensive income, net of taxes:
Net currency translation adjustment		()
Net change on cash flow hedges
Net pension and retiree medical adjustments

Net change on available-for-sale debt securities and other
Total other comprehensive income, net of taxes
Comprehensive income
Less: Comprehensive income attributable to noncontrolling interests
Comprehensive Income Attributable to PepsiCo	$	$

See accompanying notes to the condensed consolidated financial statements.

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Condensed Consolidated Statement of Cash Flows

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	12 Weeks Ended
	3/22/2025	3/23/2024
Operating Activities
Net income	$	$
Depreciation and amortization


Product recall-related impact
Cash payments for product recall-related impact	()	()
Operating lease right-of-use asset amortization
Share-based compensation expense
Restructuring and impairment charges
Cash payments for restructuring charges	()	()


Pension and retiree medical plan expense
Pension and retiree medical plan contributions	()	()
Deferred income taxes and other tax charges and credits


Change in assets and liabilities:
Accounts and notes receivable	()	()
Inventories	()	()
Prepaid expenses and other current assets	()	()
Accounts payable and other current liabilities	()	()
Income taxes payable
Other, net	()	()
Net Cash Used for Operating Activities	()	()

Investing Activities
Capital spending	()	()
Sales of property, plant and equipment
Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets	()	()
Divestitures, sales of investments in noncontrolled affiliates and other assets
Short-term investments, by original maturity:

More than three months - maturities

Three months or less, net
Other investing, net	()	()
Net Cash Used for Investing Activities	()	()

(Continued on following page)

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Condensed Consolidated Statement of Cash Flows (continued)

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	12 Weeks Ended
	3/22/2025	3/23/2024
Financing Activities
Proceeds from issuances of long-term debt	$	$
Payments of long-term debt	()	()

Short-term borrowings, by original maturity:
More than three months - proceeds
More than three months - payments	()	()
Three months or less, net
Cash dividends paid	()	()
Share repurchases	()	()
Proceeds from exercises of stock options
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted	()	()
Other financing	()
Net Cash Provided by Financing Activities
Effect of exchange rate changes on cash and cash equivalents and restricted cash		()
Net Decrease in Cash and Cash Equivalents and Restricted Cash	()	()
Cash and Cash Equivalents and Restricted Cash, Beginning of Year
Cash and Cash Equivalents and Restricted Cash, End of Period	$	$

Supplemental Non-Cash Activity
Right-of-use assets obtained in exchange for lease obligations	$	$

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)
	3/22/2025	12/28/2024
ASSETS
Current Assets
Cash and cash equivalents	$	$
Short-term investments
Accounts and notes receivable, less allowance ($ and $, respectively)
Inventories:
Raw materials and packaging
Work-in-process
Finished goods

Prepaid expenses and other current assets
Total Current Assets
Property, plant and equipment
Accumulated depreciation	()	()
Property, Plant and Equipment, net
Amortizable Intangible Assets, net
Goodwill
Other Indefinite-Lived Intangible Assets

Investments in Noncontrolled Affiliates
Deferred Income Taxes
Other Assets
Total Assets	$	$

LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations	$	$
Accounts payable and other current liabilities
Total Current Liabilities
Long-Term Debt Obligations
Deferred Income Taxes
Other Liabilities
Total Liabilities
Commitments and contingencies
PepsiCo Common Shareholders’ Equity
Common stock, par value 12/3¢ per share (authorized shares; issued, net of repurchased common stock at par value: and shares, respectively)
Capital in excess of par value
Retained earnings
Accumulated other comprehensive loss	()	()
Repurchased common stock, in excess of par value ( and shares, respectively)	()	()
Total PepsiCo Common Shareholders’ Equity
Noncontrolling interests
Total Equity
Total Liabilities and Equity	$	$

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

3/22/2025

3/23/2024

Amount

Common Stock

Balance, beginning of period

Change in repurchased common stock

Balance, end of period

Capital in Excess of Par Value

Balance, beginning of period

Share-based compensation expense

Stock option exercises, RSUs and PSUs converted

()

Withholding tax on RSUs and PSUs converted

()

Balance, end of period

Retained Earnings

Balance, beginning of period

Net income attributable to PepsiCo

Cash dividends declared (a)

()

Balance, end of period

Accumulated Other Comprehensive Loss

Balance, beginning of period

()

Other comprehensive income attributable to PepsiCo

Balance, end of period

()

Repurchased Common Stock

Balance, beginning of period

()

Share repurchases

()

Stock option exercises, RSUs and PSUs converted

Other

Balance, end of period

()

Total PepsiCo Common Shareholders’ Equity

Noncontrolling Interests

Balance, beginning of period

Net income attributable to noncontrolling interests

Distributions to noncontrolling interests

()

Other, net

()

Balance, end of period

Total Equity

(a) and $ for the 12 weeks ended March 22, 2025 and March 23, 2024, respectively.

See accompanying notes to the condensed consolidated financial statements.

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Notes to the Condensed Consolidated Financial Statements

Note 1 -

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, 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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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 (previously referred to as Other International Foods), which consists of our convenient food businesses in Asia Pacific, primarily China, Australia and New Zealand, as well as India.

$ $ $ $ $ $

Segment cost of sales (a)

Segment selling, general and administrative expenses (a)

Restructuring and impairment charges (b)

Acquisition and divestiture-related charges (c)

Segment operating profit$ $ $ $ $ $ $ Corporate unallocated expenses()Operating profit Other pension and retiree medical benefits income Net interest expense and other()Income before income taxes$

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$ $ $ $ $ $

Segment cost of sales (a)

Segment selling, general and administrative expenses (a)

Restructuring and impairment charges (b)

Acquisition and divestiture-related charges (c)

Product recall-related impact (d)

Segment operating profit$ $ $ $ $ $ $ Corporate unallocated expenses()Operating profit Other pension and retiree medical benefits income Net interest expense and other()Income before income taxes$

(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 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 March 23, 2024, we recorded a pre-tax charge of $ million ($ million after-tax or $ per share) in cost of sales for property, plant and equipment write-offs, employee severance costs and other costs associated with a previously announced voluntary recall of certain bars and cereals in our PFNA segment (Quaker Recall).

% % % %

International (b)

% % % %PepsiCo % % % %

(a)Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and EMEA segments, was % and % of our consolidated net revenue in the 12 weeks ended March 22, 2025 and March 23, 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 % and % of EMEA net revenue, respectively, in the 12 weeks ended March 22, 2025 and % and % of EMEA net revenue, respectively, in the 12 weeks ended March 23, 2024.

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$ $ $ $ $ PBNA IB Franchise EMEA LatAm Foods Asia Pacific Foods Total segment Corporate Total$ $ $ $ $ $

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

Note 2 -

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Note 3 -

billion, including cash expenditures of approximately $ billion. These pre-tax charges are expected to consist of approximately % of severance and other employee-related costs, % for asset impairments (all non-cash) resulting from plant closures and related actions, and % for other costs associated with the implementation of our initiatives. % % % % % % %

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


	12 Weeks Ended
	3/22/2025		3/23/2024
Cost of sales	$		$
Selling, general and administrative expenses
Other pension and retiree medical benefits expense
Total restructuring and impairment charges	$		$
After-tax amount	$		$
Impact on net income attributable to PepsiCo per common share	$	()	$	()

12 Weeks Ended

Plan-to-Date

3/22/2025

3/23/2024

through 3/22/2025

PFNA

PBNA

IB Franchise

EMEA

LatAm Foods

Asia Pacific Foods

Corporate

Other pension and retiree medical benefits expense

Total

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$ $ Asset impairments Other costs Total$ $ $

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.

$ $ $

2025 restructuring charges

Cash payments (a)

() ()()Non-cash charges and translation()() ()Liability as of March 22, 2025$ $ $ $

(a)Excludes cash expenditures of $ million reported in the cash flow statement in pension and retiree medical contributions.

Substantially all of the restructuring accrual at March 22, 2025 is expected to be paid within a year.

Other Productivity Initiatives

There were 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.

Note 4 -

$()$ $ $()$ Customer relationships () ()

Brands

() () Other identifiable intangibles () () Total$ $()$ $ $()$

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$ Other indefinite-lived intangible assetsReacquired franchise rights Acquired franchise rights

Brands (a)

Total indefinite-lived intangible assets$ $

(a)Increase is primarily related to the acquisition of Garza Food Ventures LLC (Siete). See Note 12 for further information.

The change in the book value of goodwill is as follows:

PFNA

PBNA

IB Franchise

EMEA

LatAm Foods

Asia Pacific Foods

Total

Balance as of December 28, 2024

Acquisitions (a)

Translation and other

Balance as of March 22, 2025

(a)Related to the acquisition of Siete. See Note 12 for further information.

Note 5 -

%. 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 March 22, 2025 did not have a material impact on our financial statements for the 12 weeks ended March 22, 2025 and is not expected to have a material impact on our 2025 financial statements.

Note 6 -

$ Share-based compensation expense – liability awards Restructuring charges()()Total$ $

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$ $ RSUs and PSUs $ $

We granted long-term cash awards to certain executive officers and other senior executives with an aggregate target value of $ million and $ million during the 12 weeks ended March 22, 2025 and March 23, 2024, respectively.

years yearsRisk-free interest rate % %Expected volatility % %Expected dividend yield % %

Note 7 -

$ $ $ $ $ Other pension and retiree medical benefits income:Interest cost Expected return on plan assets()()()()()()Amortization of prior service cost/(credits) () ()()Amortization of net losses/(gains) ()()

(a)Excludes debt issuance costs, discounts and premiums.

The net proceeds from the issuances of the above notes were used for general corporate purposes, including the repayment of commercial paper.

In the 12 weeks ended March 22, 2025, $ billion of U.S. dollar-denominated senior notes matured and were paid.

As of March 22, 2025, we had $ billion of commercial paper outstanding, excluding discounts.

Note 9 -

million. We have posted collateral under these contracts and credit-risk-related contingent features were triggered as of March 22, 2025. $ Interest rate swap contracts$ $ Foreign exchange contracts$ $ Cross-currency contracts$ $ Non-derivative debt instruments$ $

(a)In billions.

As of March 22, 2025, approximately % of total debt was subject to variable rates, after the impact of the related interest rate swap contracts, compared to approximately % as of December 28, 2024.

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million of investments in foreign government treasury held-to-maturity debt securities recorded in cash and cash equivalents. As of December 28, 2024, we had investments in held-to-maturity debt securities. As of March 22, 2025, gross unrecognized gains and losses and the allowance for expected credit losses on these securities were .

Available-for-Sale

Related to our Level 3 (significant unobservable inputs) investment in Celsius Holdings, Inc. (Celsius), we recorded an unrealized gain of $ million in other comprehensive income and a decrease in the investment of $ million due to cash dividends received during the 12 weeks ended March 22, 2025. We recorded an unrealized gain of $ million in other comprehensive income during the 12 weeks ended March 23, 2024.

In addition, we recorded an unrealized loss of $ million in other comprehensive income during the 12 weeks ended March 22, 2025 related to our other Level 3 available-for-sale debt securities. There were other Level 3 available-for-sale debt securities held during the 12 weeks ended March 23, 2024.

There were impairment charges related to our investments in available-for-sale debt securities in both the 12 weeks ended March 22, 2025 and March 23, 2024. There were unrealized gains of $ million and $ million as of March 22, 2025 and March 23, 2024, respectively, associated with our available-for-sale debt securities.

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$ $ $

Index funds (c)

1$ $ $ $

Prepaid forward contracts (d)

2$ $ $ $

Deferred compensation (e)

2$ $ $ $ Derivatives designated as fair value hedging instruments:

Interest rate swap contracts (f)

2$ $ $ $ Derivatives designated as cash flow hedging instruments:

Foreign exchange contracts (g)

2$ $ $ $

Cross-currency contracts (g)

Commodity contracts (h)

2 $ $ $ $ Derivatives designated as net investment hedging instruments:

Cross-currency contracts (g)

2$ $ $ $ ) ) $() ) $()

(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 $ million as of December 30, 2023 and $ million as of March 23, 2024.

(c)Currency translation adjustment primarily reflects depreciation of the South African rand, Canadian dollar and Russian ruble.

) Cost of salesCross-currency contracts()

Selling, general and administrative expenses

Interest rate swap contracts ()

Selling, general and administrative expenses

Commodity contracts Cost of salesCommodity contracts

Selling, general and administrative expenses

Net (gains)/losses before tax()

Tax amounts

()Net (gains)/losses after tax$()$ Pension and retiree medical items:Amortization of net prior service credits$ $()Other pension and retiree medical benefits incomeAmortization of net losses Other pension and retiree medical benefits incomeNet losses before tax

Tax amounts

()()Net losses after tax$ $ 3/23/2024 $ $ $ ()$

Other pension and retiree medical benefits income decreased $35 million, primarily reflecting recognition of fixed income losses on plan assets and the recognition of special termination benefits due to restructuring actions as part of our 2019 Productivity Plan.

Net interest expense and other increased $62 million, primarily due to losses on the market value of investments used to economically hedge a portion of our deferred compensation liability, higher interest rates on debt and higher average debt balances.

The reported tax rate increased 1.1 percentage points, primarily reflecting lower tax benefits from foreign results and share-based compensation.

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 January and February are reflected in our results for the 12 weeks ended March 22, 2025 and March 23, 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 3/22/2025
			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	(1)	%	—	(1)	(2)	%	(3)	1
PBNA	—	%	—	—	1	%	(1)	2
IB Franchise	3	%	5	—	7	%	5	2
EMEA	(2)	%	9	—	8	%	(8)	16
LatAm Foods	(12)	%	15	—	3	%	(0.5)	3
Asia Pacific Foods	(2)	%	2	(1)	(1)	%	3.5	(4)
Total	(2)	%	3	—	1	%	(2)	3

(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.

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 3/22/2025
	PFNA		PBNA		IB Franchise		EMEA		LatAm Foods		Asia Pacific Foods		Corporate unallocated expenses		Total
Reported, GAAP measure	$	1,536	$	460	$	277	$	220	$	344	$	160	$	(414)	$	2,583
Items Affecting Comparability (a)
Mark-to-market net impact	—		—		—		—		—		—		(16)		(16)
Restructuring and impairment charges	24		125		2		13		7		1		25		197
Acquisition and divestiture-related charges	15		10		—		—		—		—		—		25

Core, non-GAAP measure	1,575		595		279		233		351		161		(405)		2,789
Impact of foreign exchange translation	5		2		12		28		66		4		—		117
Core Constant Currency, non-GAAP measure	$	1,580	$	597	$	291	$	261	$	417	$	165	$	(405)	$	2,906


Reported Operating Profit % Change, GAAP measure	2	%	(10)	%	6	%	3	%	(18)	%	(9)	%	12	%	(5)	%
Core Operating Profit % Change, non-GAAP measure	(7)	%	14	%	7	%	1	%	(18)	%	(8)	%	8	%	(5)	%
Core Constant Currency Operating Profit % Change, non-GAAP measure	(7)	%	14	%	12	%	13	%	(2)	%	(6)	%	8	%	(1)	%

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	12 Weeks Ended 3/23/2024
	PFNA				PBNA				IB Franchise				EMEA		LatAm Foods		Asia Pacific Foods		Corporate unallocated expenses		Total
Reported, GAAP measure	$	1,505			$	510			$	261			$	214	$	422	$	175	$	(370)	$	2,717
Items Affecting Comparability (a)
Mark-to-market net impact	—				—				—				—		—		—		(36)		(36)
Restructuring and impairment charges	26				10				—				18		5		—		30		89
Acquisition and divestiture-related charges	—				2				—				—		—		—		—		2





2,939			$	65			$	571			$	2,220

(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.


	12 Weeks Ended
	3/22/2025			3/23/2024			Change
Net income attributable to PepsiCo per common share – diluted, GAAP measure	$	1.33		$	1.48		(10)	%
Mark-to-market net impact	(0.01)			(0.02)
Restructuring and impairment charges	0.14			0.05
Acquisition and divestiture-related charges	0.01			—


Product recall-related impact	—			0.09




Core net income attributable to PepsiCo per common share – diluted, non-GAAP measure	$	1.48	(a)	$	1.61	(a)	(8)	%
Impact of foreign exchange translation							4
Change in core net income attributable to PepsiCo per common share – diluted, on a constant currency basis, non-GAAP measure							(4)	%

(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 metals, agricultural products 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.

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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 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 March 22, 2025, we have incurred pre-tax charges of $2.8 billion, including cash expenditures of $2.1 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 2024 Form 10-K, 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. Merger and integration charges include employee-related costs, closing costs and other integration costs.

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.

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 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 Tax Cuts and Jobs Act (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 and “Item 1A. Risk Factors,” “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 2024 Form 10-K for further information.

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As of March 22, 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 March 22, 2025, Russia accounted for 13% 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 March 22, 2025, our mandatory transition tax liability was $1.7 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 2024 Form 10-K 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 12 weeks ended March 22, 2025, net cash used for operating activities of $1.0 billion was largely even with the prior-year period. Current year operating cash flow primarily reflects favorable working capital comparisons, partially offset by unfavorable operating profit performance and higher pre-tax pension and retiree medical plan contributions in the current year.

Investing Activities

During the 12 weeks ended March 22, 2025, net cash used for investing activities was $1.2 billion, primarily reflecting net cash paid in connection with our acquisition of Siete of $1.2 billion and net capital spending of $0.5 billion, partially offset by maturities of short-term investments with maturities greater than three months of $0.4 billion.

We regularly review our plans with respect to net capital spending and believe that we have sufficient liquidity to meet our net capital spending needs.

Financing Activities

During the 12 weeks ended March 22, 2025, net cash provided by financing activities was $1.8 billion, primarily reflecting proceeds from the issuances of long-term debt of $3.5 billion and net proceeds from short-term borrowings of $1.9 billion, partially offset by the return of operating cash flow to our shareholders through dividend payments and share repurchases of $2.1 billion, as well as payments of long-term debt borrowings of $1.5 billion.

We annually review our capital structure with our Board of Directors, including our dividend policy and share repurchase activity. On February 10, 2022, we announced a share repurchase program providing for the repurchase of up to $10.0 billion of PepsiCo common stock which commenced on February 11, 2022 and will expire on February 28, 2026. In addition, on February 4, 2025, we announced a 5% increase in our annualized dividend to $5.69 per share from $5.42 per share, effective with the dividend expected to be paid in June 2025. We expect to return a total of approximately $8.6 billion to shareholders in 2025, comprising dividends of approximately $7.6 billion and share repurchases of approximately $1.0 billion.

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Free Cash Flow

The table below reconciles net cash used for 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.”


	12 Weeks Ended
	3/22/2025		3/23/2024
Net cash used for operating activities, GAAP measure	$	(973)	$	(1,041)
Capital spending	(603)		(614)
Sales of property, plant and equipment	132		7
Free cash flow, non-GAAP measure	$	(1,444)	$	(1,648)

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 and “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks,” included in our 2024 Form 10-K, for certain factors that may impact our credit ratings or our operating cash flows.

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 flexibility that we have experienced historically, and therefore require us to rely more heavily on more expensive types of debt financing. See Note 8 to our condensed consolidated financial statements and “Our Business Risks” included in this Form 10-Q, as well as “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” included in our 2024 Form 10-K for further information.

Changes in Line Items in Our Condensed Consolidated Financial Statements

Changes in line items in the income statement are discussed in “Results of Operations – Consolidated Review,” “Results of Operations – Segment Review” and “Items Affecting Comparability.”

Changes in line items in the cash flow statement are discussed in “Our Liquidity and Capital Resources.”

Changes in line items in the balance sheet are discussed below:

Total Assets

Total assets were $101.7 billion as of March 22, 2025, compared to $99.5 billion as of December 28, 2024. There were no material individual line item changes.

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Total Liabilities

As of March 22, 2025, total liabilities were $83.2 billion, compared to $81.3 billion as of December 28, 2024. The change in total liabilities is primarily driven by the following line items:


	Increase/(Decrease)(a)
Short-term debt obligations (b)	$	2.0
Accounts payable and other current liabilities (c)	$	(2.0)
Long-term debt obligations (b)	$	2.2

(a)In billions.

(b)See Note 8 to our condensed consolidated financial statements for further information.

(c)Primarily reflects timing of payments, combined with lower capital expenditure payables.

Total Equity

See the equity statement and Notes 9 and 11 to our condensed consolidated financial statements.

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

PepsiCo, Inc.:

Results of Review of Interim Financial Information

We have reviewed the Condensed Consolidated Balance Sheet of PepsiCo, Inc. and subsidiaries (the Company) as of March 22, 2025, the related Condensed Consolidated Statements of Income, Comprehensive Income, Cash Flows and Equity for the twelve weeks ended March 22, 2025 and March 23, 2024, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Consolidated Balance Sheet of the Company as of December 28, 2024, and the related Consolidated Statements of Income, Comprehensive Income, Cash Flows and Equity for the fiscal year then ended (not presented herein); and in our report dated February 3, 2025, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying Condensed Consolidated Balance Sheet as of December 28, 2024 is fairly stated, in all material respects, in relation to the Consolidated Balance Sheet from which it has been derived.

Basis for Review Results

This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ KPMG LLP

New York, New York

April 23, 2025

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks.” In addition, see “Item 1A. Risk Factors,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” and Note 9 to our consolidated financial statements in our 2024 Form 10-K.

ITEM 4. Controls and Procedures.

As of the end of the period covered by this report, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

During the 12 weeks ended March 22, 2025, we continued migrating certain of our financial processing systems to an Enterprise Resource Planning (ERP) system. These systems implementations are part of our ongoing global business transformation initiative, and we plan to continue implementing such systems throughout other parts of our businesses in phases over the next several years. In connection with these ERP implementations, we are updating and will continue to update our internal control over financial reporting, as necessary, to accommodate modifications to our business processes and accounting procedures. During the 12 weeks ended March 22, 2025, we continued implementing these systems, resulting in changes that materially affected our internal control over financial reporting. These system implementations did not have an adverse effect, nor do we expect will have an adverse effect, on our internal control over financial reporting. In addition, in connection with our 2019 multi-year productivity plan, we continue to migrate to shared business models across our operations to further simplify, harmonize and automate processes. In connection with this multi-year productivity plan and resulting business process changes, we continue to enhance the design and documentation of our internal control over financial reporting processes to maintain effective controls over our financial reporting. These business process changes have not materially affected, and we do not expect them to materially affect, our internal control over financial reporting.

Except with respect to the continued implementation of ERP systems, there have been no changes in our internal control over financial reporting during the 12 weeks ended March 22, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We will continue to assess the impact on our internal control over financial reporting as we continue to implement our ERP solution and our 2019 multi-year productivity plan.

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PART II OTHER INFORMATION

ITEM 1. Legal Proceedings.

The following information should be read in conjunction with the discussion set forth under Part I, “Item 3. Legal Proceedings” in our 2024 Form 10-K.

As previously disclosed, on October 29, 2024, County Counsel for the County of Los Angeles, on behalf of the people of the State of California, filed a lawsuit against PepsiCo, Inc., Pepsi Bottling Ventures LLC, and two other unrelated parties asserting claims for public nuisance and deceptive acts or practices in the conduct of business allegedly resulting in plastic pollution in Los Angeles (the Los Angeles Matter). This lawsuit was filed in the Superior Court of the State of California for Los Angeles County. On December 2, 2024, the defendants removed the case to the United States District Court for the Central District of California. On March 13, 2025, the defendants withdrew their notice of removal and opposition to the plaintiffs’ motion to remand, and the case was reopened in the Superior Court of the State of California, County of Los Angeles, where the matter is currently pending. The lawsuit does not specify the amount of damages sought and we believe we have strong defenses to each of these claims.

In addition, we and our subsidiaries are party to a variety of litigation, claims, legal or regulatory proceedings, inquiries and investigations. While the results of the Baltimore Matter and the NYS Matter (each, as defined in our 2024 Form 10-K), the Los Angeles Matter and each such other litigation, claim, legal or regulatory proceeding, inquiry and investigation 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. See also “Item 1. Business – Regulatory Matters” and “Item 1A. Risk Factors” in our 2024 Form 10-K.

ITEM 1A. Risk Factors.

There have been no material changes with respect to the risk factors disclosed in our 2024 Form 10-K.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

A summary of our common stock repurchases (in millions, except average price per share) during the 12 weeks ended March 22, 2025 is set forth in the table below.

Issuer Purchases of Common Stock


Period	Total Number of Shares Repurchased(a)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
12/28/2024					$	6,500
12/29/2024 - 1/25/2025	—	$	—	—	—
					6,500
1/26/2025 - 2/22/2025	0.4	$	145.84	0.4	(52)
					6,448
2/23/2025 - 3/22/2025	0.9	$	151.63	0.9	(143)


Total	1.3	$	150.05	1.3	$	6,305

(a)All shares were repurchased pursuant to the $10 billion share repurchase program authorized by our Board of Directors and publicly announced on February 10, 2022, which commenced on February 11, 2022 and will expire on February 28, 2026.

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Shares repurchased under this program may be repurchased in open market transactions, in privately negotiated transactions, in accelerated stock repurchase transactions or otherwise.

ITEM 5. Other Information.

During the 12 weeks ended March 22, 2025, none of our directors or executive officers , modified or a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K.

ITEM 6. Exhibits.


See “Index to Exhibits” on page 42.

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INDEX TO EXHIBITS

ITEM 6


EXHIBIT
Exhibit 3.1			Amended and Restated Articles of Incorporation of PepsiCo, Inc., effective as of May 1, 2019, which are incorporated herein by reference to Exhibit 3.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 3, 2019.
Exhibit 3.2			By-Laws of PepsiCo, Inc., as amended and restated, effective as of September 20, 2024, which are incorporated herein by reference to Exhibit 3.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 20, 2024.
Exhibit 4.1			Form of 4.400% Senior Note due 2027, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 7, 2025.
Exhibit 4.2			Form of 4.450% Senior Note due 2028, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 7, 2025.
Exhibit 4.3			Form of 4.600% Senior Note due 2030, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 7, 2025.
Exhibit 4.4			Form of 5.000% Senior Note due 2035, which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 7, 2025.
Exhibit 10			2025 Form of Annual Long-Term Incentive Award Agreement (Performance Stock Units / Long-Term Cash Award).
Exhibit 15			Letter re: Unaudited Interim Financial Information.
Exhibit 22			Subsidiary Issuer of Guaranteed Securities.
Exhibit 31			Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32			Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 101			The following materials from PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 22, 2025 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statement of Income, (ii) the Condensed Consolidated Statement of Comprehensive Income, (iii) the Condensed Consolidated Statement of Cash Flows, (iv) the Condensed Consolidated Balance Sheet, (v) the Condensed Consolidated Statement of Equity, and (vi) Notes to the Condensed Consolidated Financial Statements.
Exhibit 104			The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 22, 2025, formatted in iXBRL and contained in Exhibit 101.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		PepsiCo, Inc.
		(Registrant)

Date:	April 23, 2025	/s/ Marie T. Gallagher
		Marie T. Gallagher
		Senior Vice President and Controller
		(Principal Accounting Officer)

Date:	April 23, 2025	/s/ David Flavell
		David Flavell
		Executive Vice President, General Counsel and Corporate Secretary
		(Duly Authorized Officer)

PEPSICO INC - Quarter Report: 2025 March (Form 10-Q)

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