8-K
PEPSICO INC (PEP)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 2025
PepsiCo, Inc.
(Exact name of registrant as specified in its charter)
| North Carolina | 1-1183 | 13-1584302 |
|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) |
700 Anderson Hill Road, Purchase, New York 10577
(Address of principal executive offices)
Registrant’s telephone number, including area code: (914) 253-2000
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | --- | --- || ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | | --- | --- |
Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
| Title of each class | Trading Symbols | Name of each exchange on which registered |
|---|---|---|
| Common Stock, par value 1-2/3 cents per share | PEP | The Nasdaq Stock Market LLC |
| 2.625% Senior Notes Due 2026 | PEP26 | The Nasdaq Stock Market LLC |
| 0.750% Senior Notes Due 2027 | PEP27 | The Nasdaq Stock Market LLC |
| 0.875% Senior Notes Due 2028 | PEP28 | The Nasdaq Stock Market LLC |
| 0.500% Senior Notes Due 2028 | PEP28A | The Nasdaq Stock Market LLC |
| 3.200% Senior Notes Due 2029 | PEP29 | The Nasdaq Stock Market LLC |
| 1.125% Senior Notes Due 2031 | PEP31 | The Nasdaq Stock Market LLC |
| 0.400% Senior Notes Due 2032 | PEP32 | The Nasdaq Stock Market LLC |
| 0.750% Senior Notes Due 2033 | PEP33 | The Nasdaq Stock Market LLC |
| 3.550% Senior Notes Due 2034 | PEP34 | The Nasdaq Stock Market LLC |
| 0.875% Senior Notes Due 2039 | PEP39 | The Nasdaq Stock Market LLC |
| 1.050% Senior Notes Due 2050 | PEP50 | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operations and Financial Condition.
The information in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that Section and shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.
Attached as Exhibit 99.1 and incorporated by reference into this Item 2.02 is a copy of the press release issued by PepsiCo, Inc. (“PepsiCo”), dated February 4, 2025, reporting PepsiCo’s financial results for the 16 and 52 weeks ended December 28, 2024.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release issued by PepsiCo, Inc., dated February 4, 2025. |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL. |
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 hereunto duly authorized.
| PEPSICO, INC. | ||
|---|---|---|
| Date: February 3, 2025 | By: | /s/ David Flavell |
| Name: | David Flavell | |
| Title: | Executive Vice President, General Counsel and Corporate Secretary |
Document
Exhibit 99.1
PepsiCo Reports Fourth Quarter and Full-Year 2024 Results; Provides 2025 Financial Outlook; Announces Annual Dividend Increase
Reported (GAAP) Fourth Quarter and Full-Year 2024 Results
| Fourth Quarter | Full-Year | |
|---|---|---|
| Net revenue performance | (0.2)% | 0.4% |
| Foreign exchange impact on net revenue | (2)% | (1.5)% |
| Earnings per share (EPS) | $1.11 | $6.95 |
| EPS change | 17% | 6% |
| Foreign exchange impact on EPS | (4)% | (2)% |
Organic/Core (non-GAAP)1 Fourth Quarter and Full-Year 2024 Results
| Fourth Quarter | Full-Year | |
|---|---|---|
| Organic revenue performance | 2.1% | 2.0% |
| Core EPS | $1.96 | $8.16 |
| Core constant currency EPS change | 14% | 9% |
PURCHASE, N.Y. - February 4, 2025 - PepsiCo, Inc. (NASDAQ: PEP) today reported results for the fourth quarter and full-year 2024.
“Our businesses remained resilient in 2024, despite subdued category performance trends in North America, the continued impacts related to a recall in our Quaker Foods North America division and business disruptions due to geopolitical tensions in certain international markets. Our enhanced multiyear productivity initiatives enabled us to invest in our businesses, and deliver improvements in our gross margin, operating margin expansion and EPS in 2024,” said Chairman and CEO Ramon Laguarta.
Laguarta continued, “Looking ahead to 2025, we will continue to build upon the successful expansion of our international business, while also taking actions to improve performance in North America. Our multiyear productivity initiatives will help fund disciplined commercial investments and aid our profitability. Therefore, we expect to deliver low-single-digit organic revenue growth and mid-single-digit core constant currency EPS growth in 2025. We also announced a 5 percent increase in our annualized dividend per share beginning with the June 2025 payment, representing our 53rd consecutive annual increase.”
1 Please refer to the Glossary for the definitions of non-GAAP financial measures including “Organic revenue performance,” “Core” and “Constant currency,” and to “Guidance and Outlook” for additional information regarding PepsiCo’s full-year 2025 financial outlook. PepsiCo provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange and commodity mark-to-market net impacts. Please refer to PepsiCo’s Annual Report on Form 10-K for the year ended December 28, 2024 (2024 Form 10-K) filed with the Securities and Exchange Commission (SEC) for additional information regarding PepsiCo’s financial results.
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Summary Fourth-Quarter 2024 Performance
| Revenue | Volume(a) | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP Reported<br><br>% Change | Percentage Point Impact | Organic<br><br>% Change | % Change | |||||||||||||||||
| Foreign Exchange Translation | Acquisitions and Divestitures | Convenient Foods | Beverages | |||||||||||||||||
| Frito-Lay North America | (2) | — | — | (2) | (3) | |||||||||||||||
| Quaker Foods North America | (2) | — | — | (2) | (6) | |||||||||||||||
| PepsiCo Beverages North America | — | — | — | — | (3) | |||||||||||||||
| Latin America | (7) | 11 | — | 4 | — | (1) | ||||||||||||||
| Europe | 6 | 1 | — | 7 | 1 | 3 | ||||||||||||||
| Africa, Middle East and South Asia | 5 | 9 | — | 14 | 5 | 2 | ||||||||||||||
| Asia Pacific, Australia and New Zealand and China Region | 2 | (1) | — | 1 | 4 | 5.5 | ||||||||||||||
| Total | — | 2 | — | 2 | 1 | 1 | Operating Profit and EPS | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||||||||||
| GAAP Reported % Change | Percentage Point Impact | Core Constant Currency <br>% Change | ||||||||||||||||||
| Items Affecting Comparability | Foreign Exchange Translation | |||||||||||||||||||
| Frito-Lay North America | (11) | 5 | — | (5) | ||||||||||||||||
| Quaker Foods North America | 323 | (316) | — | 7 | ||||||||||||||||
| PepsiCo Beverages North America | (127) | 111 | — | (15) | ||||||||||||||||
| Latin America | (25) | 32 | 14 | 21 | ||||||||||||||||
| Europe | n/m | n/m | 1 | 41 | ||||||||||||||||
| Africa, Middle East and South Asia | 38 | 2 | 16 | 57 | ||||||||||||||||
| Asia Pacific, Australia and New Zealand and China Region | 284 | (265) | (5) | 14 | ||||||||||||||||
| Corporate unallocated expenses | (28) | 11 | — | (16) | ||||||||||||||||
| Total | 34 | (25) | 4 | 13 | ||||||||||||||||
| EPS | 17 | (8) | 4 | 14 |
(a)Excludes the impact of acquisitions and divestitures. In certain instances, the volume change shown here differs from the impact of organic volume on net revenue performance disclosed in the Organic Revenue Performance Rates tables on page A-8, due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between bottler case sales (BCS) and concentrate shipments and equivalents (CSE). We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.
n/m - Not meaningful due to the impact of impairment and other charges, resulting in an operating loss in 2023.
Note: Amounts may not sum due to rounding.
Organic revenue and core constant currency results are non-GAAP financial measures. Please refer to the reconciliation of GAAP and non-GAAP information in the attached exhibits and to the Glossary for definitions of “Organic revenue performance,” “Core” and “Constant currency.”
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Discussion of Fourth-Quarter 2024 Reported Division Results:
In addition to the reported net revenue performance as set out in the tables on pages 2 and A-8, reported operating results were driven by the following:
Frito-Lay North America
Operating profit decreased 11%, primarily reflecting certain operating cost increases, including strategic initiatives, a decrease in organic volume and a 5-percentage-point impact of higher restructuring charges. These impacts were partially offset by productivity savings, a 7-percentage-point impact of a gain on remeasurement of our previously held 50% equity ownership in Sabra Dipping Company, LLC, a 4-percentage-point impact from gains associated with the sale of assets and a 2-percentage-point impact of lower commodity costs, primarily driven by cooking oil.
Quaker Foods North America
Operating profit increased 323%, primarily reflecting the favorable impact of prior-year charges associated with a previously announced voluntary recall of certain bars and cereals in our Quaker Foods North America division (Quaker Recall), a 43-percentage-point impact of an insurance recovery related to the Quaker Recall, productivity savings and lower advertising and marketing expenses, partially offset by certain operating cost increases, a 26-percentage-point impact of impairment charges associated with a nutrition bar brand, a 17-percentage-point impact of higher restructuring charges and a decrease in organic volume.
PepsiCo Beverages North America
Operating profit decreased 127%, reflecting a 93-percentage-point impact of higher impairment and other charges associated with our Tropicana Brands Group (TBG) investment and receivables related to the sale of Tropicana, Naked and other select juice brands (Juice Transaction), certain operating cost increases, a 19-percentage-point impact of higher restructuring charges, a decline in organic volume and higher advertising and marketing expenses. These impacts were partially offset by productivity savings and effective net pricing.
Latin America
Operating profit decreased 25%, primarily reflecting a 31-percentage-point unfavorable impact of an indirect tax reserve, certain operating cost increases, a 14-percentage-point impact of unfavorable foreign exchange translation and a net organic volume decline, partially offset by effective net pricing and productivity savings.
Europe
Operating profit improvement primarily reflects a favorable impact of prior-year impairment charges of $862 million related to the SodaStream business, net revenue growth and productivity savings. These impacts were partially offset by a $135 million impairment and other charges associated with our TBG investment and Juice Transaction-related receivables, certain operating cost increases, a 13-percentage-point impact of higher commodity costs, primarily dairy and potatoes, and higher advertising and marketing expenses.
Africa, Middle East and South Asia
Operating profit increased 38%, primarily reflecting net revenue growth and productivity savings. These impacts were partially offset by a 60-percentage-point impact of higher commodity costs, primarily grains, packaging materials and cooking oil, largely driven by transaction-related foreign exchange, certain operating cost increases and a 16-percentage-point impact of unfavorable foreign exchange translation, driven primarily by the weakening of the Egyptian pound.
Asia Pacific, Australia and New Zealand and China Region
Operating profit increased 284%, primarily reflecting a 294-percentage-point favorable impact of impairment charges related to the Be & Cheery brand in the prior year, productivity savings, organic
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volume growth, a 19-percentage-point impact of lower commodity costs, primarily packaging materials and potatoes, and a 5-percentage-point impact of favorable foreign exchange translation. These impacts were partially offset by unfavorable net pricing, certain operating cost increases, a 21-percentage-point impact of our share of an impairment charge recognized by an equity method investment, an 8-percentage-point impact of higher restructuring charges and higher advertising and marketing expenses.
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Summary Full-Year 2024 Performance
| Revenue | Volume(a) | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP Reported<br><br>% Change | Percentage Point Impact | Organic <br>% Change | % Change | |||||||||||||||||
| Foreign Exchange Translation | Acquisitions and Divestitures | Convenient Foods | Beverages | |||||||||||||||||
| Frito-Lay North America | (1) | — | — | (0.5) | (2.5) | |||||||||||||||
| Quaker Foods North America (b) | (14) | — | — | (14) | (14) | |||||||||||||||
| PepsiCo Beverages North America | 0.5 | — | — | 1 | (3) | |||||||||||||||
| Latin America | 0.5 | 3 | — | 4 | (2) | — | ||||||||||||||
| Europe | 5 | 2 | — | 7 | 2 | 2 | ||||||||||||||
| Africa, Middle East and South Asia | 1 | 9 | — | 10 | 2 | 1 | ||||||||||||||
| Asia Pacific, Australia and New Zealand and China Region | 1 | 2 | — | 3 | 4 | 1 | ||||||||||||||
| Total | — | 1.5 | — | 2 | (1) | — | Operating Profit and EPS | |||||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||||||||||
| GAAP Reported % Change | Percentage Point Impact | Core Constant Currency<br> % Change | ||||||||||||||||||
| Items Affecting Comparability | Foreign Exchange Translation | |||||||||||||||||||
| Frito-Lay North America | (7) | 2 | — | (5) | ||||||||||||||||
| Quaker Foods North America | (38) | 19 | — | (19) | ||||||||||||||||
| PepsiCo Beverages North America | (11) | 16 | — | 5 | ||||||||||||||||
| Latin America | — | 10 | 3 | 13 | ||||||||||||||||
| Europe | 163 | (139) | 3 | 27 | ||||||||||||||||
| Africa, Middle East and South Asia | (1) | 1 | 8 | 9 | ||||||||||||||||
| Asia Pacific, Australia and New Zealand and China Region | 14 | (8) | 3 | 8 | ||||||||||||||||
| Corporate unallocated expenses | (20) | 2 | — | (18) | ||||||||||||||||
| Total | 8 | (2) | 2 | 8 | ||||||||||||||||
| EPS | 6 | 1 | 2 | 9 |
(a)Excludes the impact of acquisitions and divestitures. In certain instances, the volume change shown here differs from the impact of organic volume on net revenue performance disclosed in the Organic Revenue Performance Rates tables on page A-8, due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between BCS and CSE. We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.
(b)Net revenue decline was impacted by the Quaker Recall.
Note: Amounts may not sum due to rounding.
Organic revenue and core constant currency results are non-GAAP financial measures. Please refer to the reconciliation of GAAP and non-GAAP information in the attached exhibits and to the Glossary for definitions of “Organic revenue performance,” “Core” and “Constant currency.”
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Discussion of Full-Year 2024 Reported Division Results:
In addition to the reported net revenue performance as set out in the tables on pages 5 and A-8, reported operating results were driven by the following:
Frito-Lay North America
Operating profit decreased 7%, primarily reflecting certain operating cost increases, including strategic initiatives, and the decrease in organic volume. These impacts were partially offset by productivity savings and the effective net pricing.
Quaker Foods North America
Operating profit decreased 38%, primarily reflecting the decrease in organic volume, certain operating cost increases and a 14-percentage-point impact of charges associated with the Quaker Recall, partially offset by productivity savings, a 12-percentage-point favorable impact of an insurance recovery related to the Quaker Recall, lower advertising and marketing expenses and effective net pricing.
PepsiCo Beverages North America
Operating profit decreased 11%, primarily driven by certain operating cost increases, the decline in organic volume, a 9-percentage-point impact of higher impairment and other charges associated with our TBG investment and Juice Transaction-related receivables, a 7-percentage-point impact of higher restructuring charges and higher advertising and marketing expenses. These impacts were partially offset by the effective net pricing and productivity savings.
Latin America
Operating profit decreased slightly, primarily reflecting certain operating cost increases, a 10-percentage-point unfavorable impact of an indirect tax reserve, the net organic volume decline, higher advertising and marketing expenses and a 3-percentage-point impact of unfavorable foreign exchange translation, partially offset by the effective net pricing, productivity savings and a 5-percentage-point impact of lower commodity costs.
Europe
Operating profit increased 163%, primarily reflecting a 148-percentage-point favorable impact of the prior-year impairment charges related to the SodaStream business, the net revenue growth, productivity savings and a 17-percentage-point favorable impact of lower restructuring charges. These impacts were partially offset by certain operating cost increases, a 23-percentage-point impact of impairment and other charges associated with our TBG investment and Juice Transaction-related receivables, an 8-percentage-point impact of higher commodity costs and higher advertising and marketing costs.
Africa, Middle East and South Asia
Operating profit decreased 1%, primarily reflecting certain operating cost increases, a 33-percentage-point impact of higher commodity costs, primarily packaging materials, potatoes and other ingredients, largely driven by transaction-related foreign exchange and an 8-percentage-point impact of unfavorable foreign exchange translation. These impacts were partially offset by the net revenue growth and productivity savings.
Asia Pacific, Australia and New Zealand and China Region
Operating profit increased 14%, primarily reflecting productivity savings, the organic volume growth, a 9-percentage-point favorable impact of impairment charges related to the Be & Cheery brand in the prior year and a 5-percentage-point impact of lower commodity costs. These impacts were partially offset by certain operating cost increases and the unfavorable net pricing.
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Guidance and Outlook
The Company provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange translation and commodity mark-to-market net impacts.
For 2025, the Company expects:
•A low-single-digit increase in organic revenue; and
•A mid-single-digit increase in core constant currency EPS.
In addition, the Company expects:
•A core annual effective tax rate of approximately 20 percent; and
•Total cash returns to shareholders of approximately $8.6 billion, comprised of dividends of $7.6 billion and share repurchases of $1.0 billion.
The Company also expects a foreign exchange translation headwind of approximately 3-percentage-points to negatively impact reported net revenue and core EPS growth, based on current market consensus rates.
This assumption and the guidance above imply a low-single-digit increase to core EPS in 2025 compared to 2024 core EPS of $8.16.
Dividend Increase
The Company today announced a 5 percent increase in its annualized dividend to $5.69 per share from $5.42 per share, effective with the dividend expected to be paid in June 2025. This represents the Company’s 53rd consecutive annual dividend per share increase.
Prepared Management Remarks and Live Question and Answer Webcast
At approximately 6:30 a.m. (Eastern time) on February 4, 2025, the Company will post prepared management remarks (in pdf format) regarding its fourth quarter and full-year 2024 results, including its outlook for 2025, at www.pepsico.com/investors. At 8:15 a.m. (Eastern time) on February 4, 2025, the Company will host a live question and answer session with investors and financial analysts. Further details will be accessible on the Company’s website at www.pepsico.com/investors.
| Contacts: | Investor Relations | Communications |
|---|---|---|
| investor@pepsico.com | pepsicomediarelations@pepsico.com |
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PepsiCo, Inc. and Subsidiaries
Consolidated Statement of Income
(in millions except per share amounts)
| (Unaudited) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | Year Ended | ||||||||
| 12/28/2024 | 12/30/2023 | 12/28/2024 | 12/30/2023 | ||||||
| Net Revenue | $ | 27,784 | $ | 27,850 | $ | 91,854 | $ | 91,471 | |
| Cost of sales | 13,181 | 13,097 | 41,744 | 41,881 | |||||
| Gross profit | 14,603 | 14,753 | 50,110 | 49,590 | |||||
| Selling, general and administrative expenses | 12,344 | 12,149 | 37,190 | 36,677 | |||||
| Impairment of intangible assets (a) | 9 | 921 | 33 | 927 | |||||
| Operating Profit | 2,250 | 1,683 | 12,887 | 11,986 | |||||
| Other pension and retiree medical benefits (expense)/income | (177) | 67 | (22) | 250 | |||||
| Net interest expense and other | (264) | (217) | (919) | (819) | |||||
| Income before income taxes | 1,809 | 1,533 | 11,946 | 11,417 | |||||
| Provision for income taxes | 275 | 209 | 2,320 | 2,262 | |||||
| Net income | 1,534 | 1,324 | 9,626 | 9,155 | |||||
| Less: Net income attributable to noncontrolling interests | 11 | 22 | 48 | 81 | |||||
| Net Income Attributable to PepsiCo | $ | 1,523 | $ | 1,302 | $ | 9,578 | $ | 9,074 | |
| Diluted | |||||||||
| Net income attributable to PepsiCo per common share | $ | 1.11 | $ | 0.94 | $ | 6.95 | $ | 6.56 | |
| Weighted-average common shares outstanding | 1,377 | 1,381 | 1,378 | 1,383 |
(a)In the quarter and year ended December 30, 2023, we recorded pre-tax impairment charges as a result of our quantitative assessments of certain of our indefinite-lived intangible assets, primarily related to the SodaStream brand and goodwill.
A - 1
PepsiCo, Inc. and Subsidiaries
Supplemental Financial Information
(in millions)
| (Unaudited) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Quarter Ended | Year Ended | ||||||||
| 12/28/2024 | 12/30/2023 | 12/28/2024 | 12/30/2023 | ||||||
| Net Revenue | |||||||||
| Frito-Lay North America | $ | 7,317 | $ | 7,473 | $ | 24,755 | $ | 24,914 | |
| Quaker Foods North America | 874 | 893 | 2,676 | 3,101 | |||||
| PepsiCo Beverages North America | 7,909 | 7,912 | 27,769 | 27,626 | |||||
| Latin America | 3,691 | 3,966 | 11,718 | 11,654 | |||||
| Europe | 4,477 | 4,216 | 13,874 | 13,234 | |||||
| Africa, Middle East and South Asia | 2,033 | 1,937 | 6,217 | 6,139 | |||||
| Asia Pacific, Australia and New Zealand and China Region | 1,483 | 1,453 | 4,845 | 4,803 | |||||
| Total | $ | 27,784 | $ | 27,850 | $ | 91,854 | $ | 91,471 | |
| Operating Profit/(Loss) | |||||||||
| Frito-Lay North America | $ | 1,647 | $ | 1,840 | $ | 6,316 | $ | 6,755 | |
| Quaker Foods North America | 170 | 40 | 303 | 492 | |||||
| PepsiCo Beverages North America | (109) | 408 | 2,302 | 2,584 | |||||
| Latin America | 528 | 703 | 2,245 | 2,252 | |||||
| Europe | 469 | (439) | 2,019 | 767 | |||||
| Africa, Middle East and South Asia | 208 | 151 | 798 | 807 | |||||
| Asia Pacific, Australia and New Zealand and China Region | 93 | 24 | 811 | 713 | |||||
| Corporate unallocated expenses | (756) | (1,044) | (1,907) | (2,384) | |||||
| Total | $ | 2,250 | $ | 1,683 | $ | 12,887 | $ | 11,986 |
A - 2
PepsiCo, Inc. and Subsidiaries
Consolidated Statement of Cash Flows
(in millions)
| Year Ended | ||||
|---|---|---|---|---|
| 12/28/2024 | 12/30/2023 | |||
| Operating Activities | ||||
| Net income | $ | 9,626 | $ | 9,155 |
| Depreciation and amortization | 3,160 | 2,948 | ||
| Impairment and other charges | 714 | 1,230 | ||
| Indirect tax impact | 218 | — | ||
| Product recall-related impact | 187 | 136 | ||
| Cash payments for product recall-related impact | (148) | — | ||
| Operating lease right-of-use asset amortization | 655 | 570 | ||
| Share-based compensation expense | 362 | 380 | ||
| Restructuring and impairment charges | 727 | 445 | ||
| Cash payments for restructuring charges | (436) | (434) | ||
| Pension and retiree medical plan expense | 414 | 150 | ||
| Pension and retiree medical plan contributions | (348) | (410) | ||
| Deferred income taxes and other tax charges and credits | (42) | (271) | ||
| Tax payments related to the Tax Cuts and Jobs Act | (579) | (309) | ||
| Change in assets and liabilities: | ||||
| Accounts and notes receivable | (138) | (793) | ||
| Inventories | (314) | (261) | ||
| Prepaid expenses and other current assets | 40 | (13) | ||
| Accounts payable and other current liabilities | (1,161) | 420 | ||
| Income taxes payable | (123) | 310 | ||
| Other, net | (307) | 189 | ||
| Net Cash Provided by Operating Activities | 12,507 | 13,442 | ||
| Investing Activities | ||||
| Capital spending | (5,318) | (5,518) | ||
| Sales of property, plant and equipment | 342 | 198 | ||
| Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets | (256) | (314) | ||
| Other divestitures, sales of investments in noncontrolled affiliates and other assets | 166 | 75 | ||
| Short-term investments, by original maturity: | ||||
| More than three months - purchases | (425) | (555) | ||
| More than three months - maturities | — | 556 | ||
| More than three months - sales | — | 12 | ||
| Three months or less, net | 5 | 3 | ||
| Other investing, net | 14 | 48 | ||
| Net Cash Used for Investing Activities | (5,472) | (5,495) |
(Continued on following page)
A - 3
PepsiCo, Inc. and Subsidiaries
Consolidated Statement of Cash Flows (continued)
(in millions)
| Year Ended | ||||
|---|---|---|---|---|
| 12/28/2024 | 12/30/2023 | |||
| Financing Activities | ||||
| Proceeds from issuances of long-term debt | 4,042 | 5,482 | ||
| Payments of long-term debt | (3,886) | (3,005) | ||
| Short-term borrowings, by original maturity: | ||||
| More than three months - proceeds | 5,786 | 5,428 | ||
| More than three months - payments | (5,639) | (3,106) | ||
| Three months or less, net | 392 | (29) | ||
| Cash dividends paid | (7,229) | (6,682) | ||
| Share repurchases | (1,000) | (1,000) | ||
| Proceeds from exercises of stock options | 166 | 116 | ||
| Withholding tax payments on restricted stock units and performance stock units converted | (135) | (140) | ||
| Other financing | (53) | (73) | ||
| Net Cash Used for Financing Activities | (7,556) | (3,009) | ||
| Effect of exchange rate changes on cash and cash equivalents and restricted cash | (687) | (277) | ||
| Net (Decrease)/Increase in Cash and Cash Equivalents and Restricted Cash | (1,208) | 4,661 | ||
| Cash and Cash Equivalents and Restricted Cash, Beginning of Year | 9,761 | 5,100 | ||
| Cash and Cash Equivalents and Restricted Cash, End of Year | $ | 8,553 | $ | 9,761 |
A - 4
PepsiCo, Inc. and Subsidiaries
Consolidated Balance Sheet
(in millions except per share amounts)
| 12/28/2024 | 12/30/2023 | |||
|---|---|---|---|---|
| ASSETS | ||||
| Current Assets | ||||
| Cash and cash equivalents | $ | 8,505 | $ | 9,711 |
| Short-term investments | 761 | 292 | ||
| Accounts and notes receivable, net | 10,333 | 10,815 | ||
| Inventories: | ||||
| Raw materials and packaging | 2,440 | 2,388 | ||
| Work-in-process | 104 | 104 | ||
| Finished goods | 2,762 | 2,842 | ||
| 5,306 | 5,334 | |||
| Prepaid expenses and other current assets | 921 | 798 | ||
| Total Current Assets | 25,826 | 26,950 | ||
| Property, Plant and Equipment, net | 28,008 | 27,039 | ||
| Amortizable Intangible Assets, net | 1,102 | 1,199 | ||
| Goodwill | 17,534 | 17,728 | ||
| Other Indefinite-Lived Intangible Assets | 13,699 | 13,730 | ||
| Investments in Noncontrolled Affiliates | 1,985 | 2,714 | ||
| Deferred Income Taxes | 4,362 | 4,474 | ||
| Other Assets | 6,951 | 6,661 | ||
| Total Assets | $ | 99,467 | $ | 100,495 |
| LIABILITIES AND EQUITY | ||||
| Current Liabilities | ||||
| Short-term debt obligations | $ | 7,082 | $ | 6,510 |
| Accounts payable and other current liabilities | 24,454 | 25,137 | ||
| Total Current Liabilities | 31,536 | 31,647 | ||
| Long-Term Debt Obligations | 37,224 | 37,595 | ||
| Deferred Income Taxes | 3,484 | 3,895 | ||
| Other Liabilities | 9,052 | 8,721 | ||
| Total Liabilities | 81,296 | 81,858 | ||
| Commitments and contingencies | ||||
| PepsiCo Common Shareholders’ Equity | ||||
| Common stock, par value 12/3¢ per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1,372 and 1,374 shares, respectively) | 23 | 23 | ||
| Capital in excess of par value | 4,385 | 4,261 | ||
| Retained earnings | 72,266 | 70,035 | ||
| Accumulated other comprehensive loss | (17,612) | (15,534) | ||
| Repurchased common stock, in excess of par value (495 and 493 shares, respectively) | (41,021) | (40,282) | ||
| Total PepsiCo Common Shareholders’ Equity | 18,041 | 18,503 | ||
| Noncontrolling interests | 130 | 134 | ||
| Total Equity | 18,171 | 18,637 | ||
| Total Liabilities and Equity | $ | 99,467 | $ | 100,495 |
A - 5
Non-GAAP Measures
In discussing financial results and guidance, the Company refers to the following measures which are not in accordance with U.S. Generally Accepted Accounting Principles (GAAP): organic revenue performance, core results and core constant currency results. We use non-GAAP financial measures internally to make operating and strategic decisions, including the preparation of our annual operating plan, evaluation of our overall business performance and as a factor in determining compensation for certain employees. We believe presenting non-GAAP financial measures provides additional information to facilitate comparison of our historical operating results and trends in our underlying operating results and provides additional transparency on how we evaluate our business. We also believe presenting these measures allows investors to view our performance using the same measures that we use in evaluating our financial and business performance and trends.
We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Examples of items for which we may make adjustments include: amounts related to mark-to-market gains or losses (non-cash); charges related to restructuring plans; charges associated with acquisitions and divestitures; gains associated with divestitures; asset impairment charges (non-cash); product recall-related impact; pension and retiree medical-related amounts, including all settlement and curtailment gains and losses; charges or adjustments related to the enactment of new laws, rules or regulations, such as tax law changes; amounts related to the resolution of tax positions; tax benefits related to reorganizations of our operations; debt redemptions, cash tender or exchange offers; and remeasurements of net monetary assets. See below for a description of adjustments to our GAAP financial measures included herein.
Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented by other companies.
Glossary
We use the following definitions when referring to our non-GAAP financial measures, which may not be the same as or comparable to similar measures presented by other companies:
Acquisitions and divestitures: mergers and acquisition activity, as well as divestitures and other structural changes, including changes in ownership or control in consolidated subsidiaries and nonconsolidated equity investees.
Bottler case sales (BCS): Measure of physical beverage volume shipped to retailers and independent distributors from both PepsiCo and our independent bottlers.
Concentrate shipments and equivalents (CSE): Measure of our physical beverage volume shipments to independent bottlers.
Constant currency: Financial results assuming constant foreign currency exchange rates used for translation based on the rates in effect for the comparable prior-year period. In order to compute our constant currency results, we multiply or divide, as appropriate, our current-year U.S. dollar results by the current-year average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior-year average foreign exchange rates.
Core: Core results are non-GAAP financial measures which exclude certain items from our financial results. For further information regarding these excluded items, refer to “Items Affecting Comparability” in “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Form 10-K. For the periods presented, core results exclude the following items:
Mark-to-market net impact
Mark-to-market net gains and losses on commodity derivatives in corporate unallocated expenses. These gains and losses are subsequently reflected in division results when the divisions recognize the cost of the underlying commodity in operating profit.
Restructuring and impairment charges
Expenses related to the multi-year productivity plan publicly announced in 2019 (2019 Productivity Plan), which was expanded and extended through the end of 2030 to take advantage of additional opportunities within the initiatives of the plan.
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, contract termination costs, closing costs and other integration costs.
A - 6
Impairment and other charges/credits
We recognized Russia-Ukraine conflict charges, brand portfolio impairment charges and other impairment charges as described below.
Russia-Ukraine conflict charges
In connection with the ongoing conflict in Ukraine, we recognized charges related to indefinite-lived intangible assets and property, plant and equipment impairment, allowance for expected credit losses, inventory write-downs and other costs in 2022. We also recognized adjustments to these charges in 2023.
Brand portfolio impairment charges
We recognized intangible asset, investment and property, plant and equipment impairments and other charges as a result of management’s decision to reposition or discontinue the sale/distribution of certain brands and to sell an investment. We also recognized adjustments to these charges in 2023.
Other impairment charges
We recognized impairment charges taken as a result of our quantitative assessments of certain of our indefinite-lived intangible assets and related to our investment in TBG. In addition, we recorded allowance for expected credit losses related to outstanding receivables from TBG associated with the Juice Transaction.
Product recall-related impact
We recognized product returns, inventory write-offs and customer and consumer-related costs in our Quaker Foods North America division associated with a voluntary recall of certain bars and cereals.
Indirect tax impact
We recognized additional expenses related to an indirect tax reserve in our Latin America division..
Pension and retiree medical-related impact
Pension and retiree medical-related impact includes settlement charges due to lump sum distributions to retired or terminated employees and the purchase of a group annuity contract whereby a third-party insurance company assumed the obligation to pay and administer future benefit payments for certain retirees. The settlement charge was triggered when the aggregate of the cumulative lump sum distributions and the annuity contract premium exceeded the total annual service and interest costs. Pension and retiree medical-related impact also includes curtailment losses due to restructuring actions as part of our 2019 Productivity Plan.
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.
Organic revenue performance: A measure that adjusts for the impacts of foreign exchange translation, acquisitions and divestitures, and every five or six years, the impact of an additional week of results. We believe organic revenue performance provides useful information in evaluating the results of our business because it excludes items that we believe are not indicative of ongoing performance or that we believe impact comparability with the prior year.
2025 guidance
Our 2025 organic revenue growth guidance excludes the impact of acquisitions, divestitures and other structural changes and foreign exchange translation. Our 2025 core effective tax rate guidance and our 2025 core constant currency EPS growth guidance exclude the mark-to-market net impact included in corporate unallocated expenses, restructuring and impairment charges and other items noted above. Our 2025 core constant currency EPS growth guidance also excludes the impact of foreign exchange translation. We are unable to reconcile our full year projected 2025 organic revenue growth to our full year projected 2025 reported net revenue growth because we are unable to predict the 2025 impact of foreign exchange due to the unpredictability of future changes in foreign exchange rates and because we are unable to predict the occurrence or impact of any acquisitions, divestitures or other structural changes. We are also not able to reconcile our full year projected 2025 core effective tax rate to our full year projected 2025 reported effective tax rate and our full year projected 2025 core constant currency EPS growth to our full year projected 2025 reported EPS growth because we are unable to predict the 2025 impact of foreign exchange or the mark-to-market net impact on commodity derivatives due to the unpredictability of future changes in foreign exchange rates and commodity prices. Therefore, we are unable to provide a reconciliation of these measures.
A - 7
PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information
Organic Revenue Performance Rates
Quarter and Year Ended December 28, 2024
(unaudited)
| Quarter Ended 12/28/2024 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Impact of | Impact of | |||||||||||||||
| Net Revenue Year over Year % Change | Reported <br>% Change, GAAP Measure | Foreign exchange translation | Acquisitions and divestitures | Organic<br><br>% Change, Non-GAAP Measure(a) | Organic volume(b) | Effective net pricing | ||||||||||
| Frito-Lay North America | (2) | % | — | — | (2) | % | (3) | 1 | ||||||||
| Quaker Foods North America | (2) | % | — | — | (2) | % | (6) | 4 | ||||||||
| PepsiCo Beverages North America | — | % | — | — | — | % | (3) | 3 | ||||||||
| Latin America | (7) | % | 11 | — | 4 | % | — | 3.5 | ||||||||
| Europe | 6 | % | 1 | — | 7 | % | 2 | 5.5 | ||||||||
| Africa, Middle East and South Asia | 5 | % | 9 | — | 14 | % | 3 | 11 | ||||||||
| Asia Pacific, Australia and New Zealand and China Region | 2 | % | (1) | — | 1 | % | 5 | (4) | ||||||||
| Total | — | % | 2 | — | 2 | % | (1) | 3 | Year Ended 12/28/2024 | |||||||
| --- | --- | --- | --- | --- | --- | |||||||||||
| Impact of | Impact of | |||||||||||||||
| Net Revenue Year over Year % Change | Reported <br>% Change, GAAP Measure | Foreign exchange translation | Acquisitions and divestitures | Organic<br><br>% Change, Non-GAAP Measure(a) | Organic volume(b) | Effective net pricing | ||||||||||
| Frito-Lay North America | (1) | % | — | — | (0.5) | % | (2.5) | 2 | ||||||||
| Quaker Foods North America (c) | (14) | % | — | — | (14) | % | (14) | 0.5 | ||||||||
| PepsiCo Beverages North America | 0.5 | % | — | — | 1 | % | (3.5) | 4 | ||||||||
| Latin America | 0.5 | % | 3 | — | 4 | % | (2) | 5 | ||||||||
| Europe | 5 | % | 2 | — | 7 | % | 2 | 6 | ||||||||
| Africa, Middle East and South Asia | 1 | % | 9 | — | 10 | % | 1 | 9 | ||||||||
| Asia Pacific, Australia and New Zealand and China Region | 1 | % | 2 | — | 3 | % | 4 | (1) | ||||||||
| Total | — | % | 1.5 | — | 2 | % | (2) | 4 |
(a)A financial measure that is not in accordance with GAAP. See pages A-6 through A-7 for further discussion.
(b)Excludes the impact of acquisitions and divestitures. In certain instances, the impact of organic volume on net revenue performance differs from the unit volume disclosed in the Summary Fourth-Quarter 2024 Performance and Summary Full-Year 2024 Performance tables on pages 2 and 5, respectively, due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between BCS and CSE. We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.
(c)Net revenue decline was impacted by the Quaker Recall.
Note – Amounts may not sum due to rounding.
A - 8
PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information (continued)
Year over Year Performance Rates
Quarter and Year Ended December 28, 2024 (unaudited)
| Quarter Ended 12/28/2024 | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Impact of Items Affecting Comparability | Impact of | |||||||||||||||||||||||
| Year over Year % Change | Reported <br>% Change,<br><br>GAAP Measure | Mark-to-market net impact | Restructuring and impairment charges | Acquisition and divestiture-related charges | Impairment and other charges | Product recall-related impact | Indirect tax impact | Pension and retiree medical-related impact | Core<br><br>% Change, Non-GAAP Measure(a) | Foreign exchange translation | Core Constant Currency<br><br>% Change, Non-GAAP Measure(a) | |||||||||||||
| Frito-Lay North America | (11) | % | — | 5 | 0.5 | — | — | — | — | (5) | % | — | (5) | % | ||||||||||
| Quaker Foods North America | 323 | % | — | 17 | — | 26 | (360) | — | — | 7 | % | — | 7 | % | ||||||||||
| PepsiCo Beverages North America | (127) | % | — | 19 | (1) | 93 | — | — | — | (16) | % | — | (15) | % | ||||||||||
| Latin America | (25) | % | — | 1 | — | — | — | 31 | — | 7 | % | 14 | 21 | % | ||||||||||
| Europe | n/m | — | n/m | — | n/m | — | — | — | 40 | % | 1 | 41 | % | |||||||||||
| Africa, Middle East and South Asia | 38 | % | — | 1 | 2 | — | — | — | — | 41 | % | 16 | 57 | % | ||||||||||
| Asia Pacific, Australia and New Zealand and China Region | 284 | % | — | 8 | — | (273) | — | — | — | 19 | % | (5) | 14 | % | ||||||||||
| Corporate unallocated expenses | (28) | % | 7 | 3 | 1 | — | — | — | — | (16) | % | — | (16) | % | ||||||||||
| Total Operating Profit | 34 | % | (8) | 12 | (0.5) | (36) | (11) | 19 | — | 9 | % | 4 | 13 | % | ||||||||||
| Net Income Attributable to PepsiCo | 17 | % | 59 | (99) | (5.5) | 298 | 86 | (185) | (161) | 9 | % | 4 | 13 | % | ||||||||||
| Net Income Attributable to PepsiCo per common share – diluted | 17 | % | 43 | (73) | (4) | 218 | 63 | (136) | (119) | 10 | % | 4 | 14 | % | Year Ended 12/28/2024 | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||
| Impact of Items Affecting Comparability | Impact of | |||||||||||||||||||||||
| Year over Year % Change | Reported <br>% Change, GAAP Measure | Mark-to-market net impact | Restructuring and impairment charges | Acquisition and divestiture-related charges | Impairment and other charges/credits | Product recall-related impact | Indirect tax impact | Pension and retiree medical-related impact | Core<br><br>% Change, Non-GAAP Measure(a) | Foreign exchange translation | Core Constant Currency<br><br>% Change, Non-GAAP Measure(a) | |||||||||||||
| Frito-Lay North America | (7) | % | — | 2 | — | — | — | — | — | (5) | % | — | (5) | % | ||||||||||
| Quaker Foods North America | (38) | % | — | 3 | — | 3 | 14 | — | — | (19) | % | — | (19) | % | ||||||||||
| PepsiCo Beverages North America | (11) | % | — | 7 | — | 9 | — | — | — | 5 | % | — | 5 | % | ||||||||||
| Latin America | — | % | — | 1 | — | — | — | 10 | — | 10 | % | 3 | 13 | % | ||||||||||
| Europe | 163 | % | — | (17) | — | (122) | — | — | — | 24 | % | 3 | 27 | % | ||||||||||
| Africa, Middle East and South Asia | (1) | % | — | — | 0.5 | 1 | — | — | — | — | % | 8 | 9 | % | ||||||||||
| Asia Pacific, Australia and New Zealand and China Region | 14 | % | — | — | — | (8) | — | — | — | 6 | % | 3 | 8 | % | ||||||||||
| Corporate unallocated expenses | (20) | % | 2 | — | 1 | — | — | — | — | (18) | % | — | (18) | % | ||||||||||
| Total Operating Profit | 8 | % | (1) | 5 | — | (10) | 1 | 4 | — | 6 | % | 2 | 8 | % | ||||||||||
| Net Income Attributable to PepsiCo | 5.5 | % | — | 1 | — | (2) | — | 1 | 1 | 7 | % | 2 | 8 | % | ||||||||||
| Net Income Attributable to PepsiCo per common share – diluted | 6 | % | — | 1 | — | (2) | — | 1 | 1 | 7 | % | 2 | 9 | % |
(a)A financial measure that is not in accordance with GAAP. See pages A-6 through A-7 for further discussion.
n/m - Not meaningful due to the impact of impairment and other charges, resulting in an operating loss in 2023.
Note – Amounts may not sum due to rounding.
A - 9
PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information (continued)
Certain Line Items
Quarters Ended December 28, 2024 and December 30, 2023
(in millions except per share amounts, unaudited)
| Quarter Ended 12/28/2024 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of sales | Gross profit | Selling, general and administrative expenses | Impairment of intangible assets | Operating profit | Other pension and retiree medical benefits (expense)/income | (Benefit from)/Provision for income<br><br>taxes(a) | Net income attributable to noncontrolling interests | Net income attributable to PepsiCo | Net income attributable to PepsiCo per common share - diluted | Effective tax rate(b) | ||||||||||||
| Reported, GAAP Measure | $ | 13,181 | $ | 14,603 | $ | 12,344 | $ | 9 | $ | 2,250 | $ | (177) | $ | 275 | $ | 11 | $ | 1,523 | $ | 1.11 | 15.2 | % |
| Items Affecting Comparability | ||||||||||||||||||||||
| Mark-to-market net impact | 13 | (13) | 20 | — | (33) | — | (8) | — | (25) | (0.02) | (0.1) | |||||||||||
| Restructuring and impairment charges | (117) | 117 | (188) | — | 305 | 7 | 74 | (1) | 239 | 0.17 | 1.0 | |||||||||||
| Acquisition and divestiture-related charges (c) | — | — | (15) | — | 15 | — | 2 | — | 13 | 0.01 | — | |||||||||||
| Impairment and other charges | — | — | (695) | (9) | 704 | — | 182 | — | 522 | 0.38 | 3.2 | |||||||||||
| Product recall-related impact | (2) | 2 | (1) | — | 3 | — | 1 | — | 2 | — | — | |||||||||||
| Indirect tax impact | (218) | 218 | — | — | 218 | — | — | — | 218 | 0.16 | (2.1) | |||||||||||
| Pension and retiree medical-related impact | — | — | — | — | — | 259 | 58 | — | 201 | 0.15 | 0.7 | |||||||||||
| Core, Non-GAAP Measure (c) | $ | 12,857 | $ | 14,927 | $ | 11,465 | $ | — | $ | 3,462 | $ | 89 | $ | 584 | $ | 10 | $ | 2,693 | $ | 1.96 | 17.8 | % |
| Quarter Ended 12/30/2023 | ||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||
| Cost of sales | Gross profit | Selling, general and administrative expenses | Impairment of intangible assets | Operating profit | Other pension and retiree medical benefits income | Provision for income taxes(a) | Net income attributable to PepsiCo | Net income attributable to PepsiCo per common share - diluted | Effective tax rate(b) | |||||||||||||
| Reported, GAAP Measure | $ | 13,097 | $ | 14,753 | $ | 12,149 | $ | 921 | $ | 1,683 | $ | 67 | $ | 209 | $ | 1,302 | $ | 0.94 | 13.6 | % | ||
| Items Affecting Comparability | ||||||||||||||||||||||
| Mark-to-market net impact | (6) | 6 | (53) | — | 59 | — | 15 | 44 | 0.03 | 0.2 | ||||||||||||
| Restructuring and impairment charges | (3) | 3 | (155) | — | 158 | — | 36 | 122 | 0.09 | 0.6 | ||||||||||||
| Acquisition and divestiture-related charges | — | — | (21) | — | 21 | — | 14 | 7 | — | 0.7 | ||||||||||||
| Impairment and other charges | — | — | (207) | (921) | 1,128 | — | 255 | 873 | 0.63 | 3.0 | ||||||||||||
| Product recall-related impact | (136) | 136 | — | — | 136 | — | 32 | 104 | 0.07 | 0.5 | ||||||||||||
| Pension and retiree medical-related impact | — | — | — | — | — | 14 | 3 | 11 | 0.01 | — | ||||||||||||
| Core, Non-GAAP Measure (c) | $ | 12,952 | $ | 14,898 | $ | 11,713 | $ | — | $ | 3,185 | $ | 81 | $ | 564 | $ | 2,463 | $ | 1.78 | 18.5 | % |
(a)(Benefit from)/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.
(b)The impact of items affecting comparability on our effective tax rate represents the difference in the effective tax rate resulting from a higher or lower tax rate applicable to the items affecting comparability.
(c)A financial measure that is not in accordance with GAAP. See pages A-6 through A-7 for further discussion.
Note – Amounts may not sum due to rounding.
A - 10
PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information (continued)
Certain Line Items
Years Ended December 28, 2024 and December 30, 2023
(in millions except per share amounts, unaudited)
| Year Ended 12/28/2024 | ||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cost of sales | Gross profit | Selling, general and administrative expenses | Impairment of intangible assets | Operating profit | Other pension and retiree medical benefits (expense)/ income | (Benefit from)/Provision for income taxes(a) | Net income attributable to PepsiCo | Net income attributable to PepsiCo per common share - diluted | Effective tax rate(b) | |||||||||||||||||||||||||||||
| Reported, GAAP Measure | $ | 41,744 | $ | 50,110 | $ | 37,190 | $ | 33 | $ | 12,887 | $ | (22) | $ | 2,320 | $ | 9,578 | $ | 6.95 | 19.4 | % | ||||||||||||||||||
| Items Affecting Comparability | ||||||||||||||||||||||||||||||||||||||
| Mark-to-market net impact | 26 | (26) | (1) | — | (25) | — | (6) | (19) | (0.01) | — | ||||||||||||||||||||||||||||
| Restructuring and impairment charges | (133) | 133 | (551) | (14) | 698 | 29 | 164 | 563 | 0.41 | 0.2 | ||||||||||||||||||||||||||||
| Acquisition and divestiture-related (c) | — | — | (22) | — | 22 | — | 4 | 18 | 0.01 | — | ||||||||||||||||||||||||||||
| Impairment and other charges | — | — | (695) | (19) | 714 | — | 184 | 530 | 0.38 | 0.4 | ||||||||||||||||||||||||||||
| Product recall-related impact | (176) | 176 | (8) | — | 184 | 3 | 44 | 143 | 0.10 | 0.1 | ||||||||||||||||||||||||||||
| Indirect tax impact | (218) | 218 | — | — | 218 | — | — | 218 | 0.16 | (0.4) | ||||||||||||||||||||||||||||
| Pension and retiree medical-related impact | — | — | — | — | — | 276 | 61 | 215 | 0.16 | 0.1 | ||||||||||||||||||||||||||||
| Core, Non-GAAP Measure (c) | $ | 41,243 | $ | 50,611 | $ | 35,913 | $ | — | $ | 14,698 | $ | 286 | $ | 2,771 | $ | 11,246 | $ | 8.16 | 19.7 | % | Year Ended 12/30/2023 | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||||||
| Cost of sales | Gross profit | Selling, general and administrative expenses | Impairment of intangible assets | Operating profit | Other pension and retiree medical benefits income | Provision for income taxes(a) | Net income attributable to noncontrolling interests | Net income attributable to PepsiCo | Net income attributable to PepsiCo per common share - diluted | Effective tax rate(b) | ||||||||||||||||||||||||||||
| Reported, GAAP Measure | $ | 41,881 | $ | 49,590 | $ | 36,677 | $ | 927 | $ | 11,986 | $ | 250 | $ | 2,262 | $ | 81 | $ | 9,074 | $ | 6.56 | 19.8 | % | ||||||||||||||||
| Items Affecting Comparability | ||||||||||||||||||||||||||||||||||||||
| Mark-to-market net impact | (3) | 3 | (33) | — | 36 | — | 9 | — | 27 | 0.02 | — | |||||||||||||||||||||||||||
| Restructuring and impairment charges | (13) | 13 | (433) | — | 446 | (1) | 96 | 1 | 348 | 0.25 | 0.1 | |||||||||||||||||||||||||||
| Acquisition and divestiture-related charges | — | — | (41) | — | 41 | — | 18 | — | 23 | 0.02 | 0.1 | |||||||||||||||||||||||||||
| Impairment and other charges/credits | 5 | (5) | (308) | (927) | 1,230 | — | 284 | — | 946 | 0.68 | 0.3 | |||||||||||||||||||||||||||
| Product recall-related impact | (136) | 136 | — | — | 136 | — | 32 | — | 104 | 0.07 | — | |||||||||||||||||||||||||||
| Pension and retiree medical-related impact | — | — | — | — | — | 14 | 3 | — | 11 | 0.01 | — | |||||||||||||||||||||||||||
| Core, Non-GAAP Measure (c) | $ | 41,734 | $ | 49,737 | $ | 35,862 | $ | — | $ | 13,875 | $ | 263 | $ | 2,704 | $ | 82 | $ | 10,533 | $ | 7.62 | 20.3 | % |
(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.
(b)The impact of items affecting comparability on our effective tax rate represents the difference in the effective tax rate resulting from a higher or lower tax rate applicable to the items affecting comparability.
(c)A financial measure that is not in accordance with GAAP. See pages A-6 through A-7 for further discussion.
Note – Amounts may not sum due to rounding.
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PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information (continued)
Operating Profit by Division
Quarters Ended December 28, 2024 and December 30, 2023
(in millions, unaudited)
| Quarter Ended 12/28/2024 | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Items Affecting Comparability | ||||||||||||||||||||||||||||||||
| Operating Profit | Reported, GAAP Measure | Mark-to-market net impact | Restructuring and impairment charges | Acquisition and divestiture-related charges | Impairment and other charges | Product recall-related impact | Indirect tax impact | Core,<br><br>Non-GAAP Measure(a) | ||||||||||||||||||||||||
| Frito-Lay North America | $ | 1,647 | $ | — | $ | 107 | $ | 9 | $ | — | $ | — | $ | — | $ | 1,763 | ||||||||||||||||
| Quaker Foods North America | 170 | — | 7 | — | 9 | 3 | — | 189 | ||||||||||||||||||||||||
| PepsiCo Beverages North America | (109) | — | 95 | 1 | 556 | — | — | 543 | ||||||||||||||||||||||||
| Latin America | 528 | — | 19 | — | — | — | 218 | 765 | ||||||||||||||||||||||||
| Europe | 469 | — | 40 | — | 135 | — | — | 644 | ||||||||||||||||||||||||
| Africa, Middle East and South Asia | 208 | — | 7 | 5 | — | — | — | 220 | ||||||||||||||||||||||||
| Asia Pacific, Australia and New Zealand and China Region | 93 | — | 4 | — | 4 | — | — | 101 | ||||||||||||||||||||||||
| Corporate unallocated expenses | (756) | (33) | 26 | — | — | — | — | (763) | ||||||||||||||||||||||||
| Total | $ | 2,250 | $ | (33) | $ | 305 | $ | 15 | $ | 704 | $ | 3 | $ | 218 | $ | 3,462 | Quarter Ended 12/30/2023 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||
| Items Affecting Comparability | ||||||||||||||||||||||||||||||||
| Operating Profit | Reported, <br>GAAP Measure | Mark-to-market net impact | Restructuring and impairment charges | Acquisition and divestiture-related charges | Impairment and other charges | Product recall-related impact | Core,<br><br>Non-GAAP Measure(a) | |||||||||||||||||||||||||
| Frito-Lay North America | $ | 1,840 | $ | — | $ | 23 | $ | — | $ | — | $ | — | $ | 1,863 | ||||||||||||||||||
| Quaker Foods North America | 40 | — | — | — | — | 136 | 176 | |||||||||||||||||||||||||
| PepsiCo Beverages North America | 408 | — | 23 | 4 | 208 | — | 643 | |||||||||||||||||||||||||
| Latin America | 703 | — | 10 | — | — | — | 713 | |||||||||||||||||||||||||
| Europe | (439) | — | 38 | — | 861 | — | 460 | |||||||||||||||||||||||||
| Africa, Middle East and South Asia | 151 | — | 5 | 1 | — | — | 157 | |||||||||||||||||||||||||
| Asia Pacific, Australia and New Zealand and China Region | 24 | — | 1 | — | 59 | — | 84 | |||||||||||||||||||||||||
| Corporate unallocated expenses | (1,044) | 59 | 58 | 16 | — | — | (911) | |||||||||||||||||||||||||
| Total | $ | 1,683 | $ | 59 | $ | 158 | $ | 21 | $ | 1,128 | $ | 136 | $ | 3,185 |
(a)A financial measure that is not in accordance with GAAP. See pages A-6 through A-7 for further discussion.
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PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information (continued)
Operating Profit by Division
Years Ended December 28, 2024 and December 30, 2023
(in millions, unaudited)
| Year Ended 12/28/2024 | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Items Affecting Comparability | ||||||||||||||||||||||||||||||||
| Operating Profit | Reported, GAAP Measure | Mark-to-market <br>net impact | Restructuring <br>and impairment charges | Acquisition and divestiture-related charges | Impairment and other charges | Product recall-related impact | Indirect tax impact | Core,<br><br>Non-GAAP Measure(a) | ||||||||||||||||||||||||
| Frito-Lay North America | $ | 6,316 | $ | — | $ | 150 | $ | 9 | $ | — | $ | — | $ | — | $ | 6,475 | ||||||||||||||||
| Quaker Foods North America | 303 | — | 11 | — | 9 | 184 | — | 507 | ||||||||||||||||||||||||
| PepsiCo Beverages North America | 2,302 | — | 238 | 8 | 556 | — | — | 3,104 | ||||||||||||||||||||||||
| Latin America | 2,245 | — | 51 | — | — | — | 218 | 2,514 | ||||||||||||||||||||||||
| Europe | 2,019 | — | 123 | — | 145 | — | — | 2,287 | ||||||||||||||||||||||||
| Africa, Middle East and South Asia | 798 | — | 14 | 5 | — | — | — | 817 | ||||||||||||||||||||||||
| Asia Pacific, Australia and New Zealand and China Region | 811 | — | 10 | — | 4 | — | — | 825 | ||||||||||||||||||||||||
| Corporate unallocated expenses | (1,907) | (25) | 101 | — | — | — | — | (1,831) | ||||||||||||||||||||||||
| Total | $ | 12,887 | $ | (25) | $ | 698 | $ | 22 | $ | 714 | $ | 184 | $ | 218 | $ | 14,698 | Year Ended 12/30/2023 | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||||||||
| Items Affecting Comparability | ||||||||||||||||||||||||||||||||
| Operating Profit | Reported, GAAP Measure | Mark-to-market <br>net impact | Restructuring <br>and impairment charges | Acquisition and divestiture-related charges | Impairment and other charges/credits | Product recall-related impact | Core,<br><br>Non-GAAP Measure(a) | |||||||||||||||||||||||||
| Frito-Lay North America | $ | 6,755 | $ | — | $ | 42 | $ | — | $ | — | $ | — | $ | 6,797 | ||||||||||||||||||
| Quaker Foods North America | 492 | — | — | — | — | 136 | 628 | |||||||||||||||||||||||||
| PepsiCo Beverages North America | 2,584 | — | 41 | 16 | 321 | — | 2,962 | |||||||||||||||||||||||||
| Latin America | 2,252 | — | 29 | — | 2 | — | 2,283 | |||||||||||||||||||||||||
| Europe | 767 | — | 223 | (2) | 855 | — | 1,843 | |||||||||||||||||||||||||
| Africa, Middle East and South Asia | 807 | — | 15 | 2 | (7) | — | 817 | |||||||||||||||||||||||||
| Asia Pacific, Australia and New Zealand and China Region | 713 | — | 8 | — | 59 | — | 780 | |||||||||||||||||||||||||
| Corporate unallocated expenses | (2,384) | 36 | 88 | 25 | — | — | (2,235) | |||||||||||||||||||||||||
| Total | $ | 11,986 | $ | 36 | $ | 446 | $ | 41 | $ | 1,230 | $ | 136 | $ | 13,875 |
(a)A financial measure that is not in accordance with GAAP. See pages A-6 through A-7 for further discussion.
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PepsiCo, Inc. and Subsidiaries
Reconciliation of GAAP and Non-GAAP Information (continued)
(unaudited)
Gross Margin Performance Reconciliation
| Quarter Ended | Year Ended | |||
|---|---|---|---|---|
| 12/28/2024 | 12/28/2024 | |||
| Reported gross margin performance, GAAP measure | (41) | bps | 34 | bps |
| Impact of: | ||||
| Mark-to-market net impact | (7) | (3) | ||
| Restructuring and impairment charges | 41 | 13 | ||
| Impairment and other charges/credits | — | 1 | ||
| Product recall-related impact | (48) | 4 | ||
| Indirect tax impact | 79 | 24 | ||
| Core gross margin performance, non-GAAP measure (a) | 23 | bps | 72 | bps |
Operating Margin Performance Reconciliation
| Quarter Ended | Year Ended | |||
|---|---|---|---|---|
| 12/28/2024 | 12/28/2024 | |||
| Reported operating margin performance, GAAP measure | 206 | bps | 93 | bps |
| Impact of: | ||||
| Mark-to-market net impact | (33) | (7) | ||
| Restructuring and impairment charges | 52 | 27 | ||
| Acquisition and divestiture-related charges | (2) | (2) | ||
| Impairment and other charges/credits | (151) | (57) | ||
| Product recall-related impact | (48) | 5 | ||
| Indirect tax impact | 79 | 24 | ||
| Core operating margin performance, non-GAAP measure (a) | 102 | bps | 83 | bps |
(a)A financial measure that is not in accordance with GAAP. See pages A-6 through A-7 for further discussion.
Note – Amounts may not sum due to rounding.
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Cautionary Statement
Statements in this communication that are “forward-looking statements,” including our 2025 guidance and outlook, are based on currently available information, operating plans and projections about future events and trends. Terminology such as “aim,” “anticipate,” “believe,” “drive,” “estimate,” “expect,” “expressed confidence,” “forecast,” “future,” “goal,” “guidance,” “intend,” “may,” “objective,” “outlook,” “plan,” “position,” “potential,” “project,” “seek,” “should,” “strategy,” “target,” “will” or similar statements or variations of such words and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in such forward-looking statements. Such risks and uncertainties include, but are not limited to: future demand for PepsiCo’s products; damage to PepsiCo’s reputation or brand image; product recalls or other issues or concerns with respect to product quality and safety; PepsiCo’s ability to compete effectively; PepsiCo’s ability to attract, develop and maintain a highly skilled workforce or effectively manage changes in our workforce; water scarcity; changes in the retail landscape or in sales to any key customer; disruption of PepsiCo’s manufacturing operations or supply chain, including increased commodity, packaging, transportation, labor and other input costs; political, social or geopolitical conditions in the markets where PepsiCo’s products are made, manufactured, distributed or sold; PepsiCo’s ability to grow its business in developing and emerging markets; changes in economic conditions in the countries in which PepsiCo operates; future cyber incidents and other disruptions to our information systems; failure to successfully complete or manage strategic transactions; PepsiCo’s reliance on third-party service providers and enterprise-wide systems; climate change or measures to address climate change and other sustainability matters; strikes or work stoppages; failure to realize benefits from PepsiCo’s productivity initiatives or organizational restructurings; deterioration in estimates and underlying assumptions regarding future performance of our business or investments that can result in impairment charges; fluctuations or other changes in exchange rates; any downgrade or potential downgrade of PepsiCo’s credit ratings; imposition or proposed imposition of new or increased taxes aimed at PepsiCo’s products; imposition of limitations on the marketing or sale of PepsiCo’s products; changes in laws and regulations related to the use or disposal of plastics or other packaging materials; failure to comply with personal data protection and privacy laws; increase in income tax rates, changes in income tax laws or disagreements with tax authorities; failure to adequately protect PepsiCo’s intellectual property rights or infringement on intellectual property rights of others; failure to comply with applicable laws and regulations; and potential liabilities and costs from litigation, claims, legal or regulatory proceedings, inquiries or investigations.
For additional information on these and other factors that could cause PepsiCo’s actual results to materially differ from those set forth herein, please see PepsiCo’s filings with the SEC, including its most recent annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.
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