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What changed in PepsiCo's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of PepsiCo's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+582 added−628 removedSource: 10-K (2026-02-03) vs 10-K (2025-02-04)

Top changes in PepsiCo's 2025 10-K

582 paragraphs added · 628 removed · 485 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

49 edited+2 added−14 removed43 unchanged
Biggest changeOur Operations We are organized into seven reportable segments (also referred to as divisions), as follows: 1) Frito-Lay North America (FLNA), which includes our branded convenient food businesses in the United States and Canada; 2) Quaker Foods North America (QFNA), which includes our branded convenient food businesses, such as cereal, rice, pasta and other branded food, in the United States and Canada; 3) PepsiCo Beverages North America (PBNA), which includes our beverage businesses in the United States and Canada; 4) Latin America (LatAm), which includes all of our beverage and convenient food businesses in Latin America; 5) Europe, which includes all of our beverage and convenient food businesses in Europe; 2 Table of Contents 6) Africa, Middle East and South Asia (AMESA), which includes all of our beverage and convenient food businesses in Africa, the Middle East and South Asia; and 7) Asia Pacific, Australia and New Zealand and China Region (APAC), which includes all of our beverage and convenient food businesses in Asia Pacific, Australia and New Zealand, and China region.
Biggest changeOur Operations We are organized into six reportable segments, as follows: 1) PepsiCo Foods North America (PFNA), which includes all of our convenient food businesses in the United States and Canada; 2) PepsiCo Beverages North America (PBNA), which includes all of our beverage businesses in the United States and Canada; 3) International Beverages Franchise (IB Franchise), which includes our international franchise beverage businesses, as well as our SodaStream business; 4) Europe, Middle East and Africa (EMEA), which includes our convenient food businesses and our beverage businesses with company-owned bottlers in Europe, the Middle East and Africa; 2 Table of Contents 5) Latin America Foods (LatAm Foods), which includes all of our convenient food businesses in Latin America; and 6) Asia Pacific Foods, which consists of our convenient food businesses in Asia Pacific, including China, Australia and New Zealand, as well as India.
We are subject to numerous similar and other laws and regulations outside the United States, including but not limited to laws and regulations governing food safety; the ingredients or substances contained in, or attributes of, our products, including the Food (Promotion and Placement)(England) Regulations; international trade, import/export restrictions and tariffs; supply chains, including the U.K.
We are subject to numerous similar and other laws and regulations outside the United States, including but not limited to laws and regulations governing food safety; the ingredients or substances contained in, or attributes of, our products, including the Food (Promotion and Placement) (England) Regulations; international trade, sanctions, import/export restrictions and tariffs; supply chains, including the U.K.
Ingredients and Other Supplies The principal ingredients we use in our beverage and convenient food products are acesulfame potassium, aspartame, corn, corn sweeteners, flavorings, flour, juice concentrates, nuts, oats, potatoes, raw milk, rice, seasonings, sucralose, sugar, vegetable and essential oils, and wheat. We also use water in the manufacturing of our products.
Ingredients and Other Supplies The principal ingredients we use in our beverage and convenient food products are acesulfame potassium, aspartame, cocoa products, corn, corn sweeteners, flavorings, flour, juice concentrates, nuts, oats, potatoes, raw milk, rice, seasonings, sucralose, sugar, vegetable and essential oils, and wheat. We also use water in the manufacturing of our products.
Investors should note that we currently announce material information to our investors and others using filings with the SEC, press releases, public conference calls, webcasts or our corporate website ( www.pepsico.com ), including news and announcements regarding our financial performance, key personnel, our brands and our business strategy.
Investors should note that we currently announce material information to our investors and others using filings with the SEC, press releases, public conference calls, webcasts or our corporate website ( https://www.pepsico.com ), including news and announcements regarding our financial performance, key personnel, our brands and our business strategy.
Our Brands and Intellectual Property Rights We own numerous valuable trademarks which are essential to our worldwide businesses, including Adrenaline Rush, Agusha, Amp Energy, Aquafina, Aquafina Flavorsplash, Aqua Minerale, Arto Lifewtr, Baja Blast, BaiCaoWei, Bare, Bokomo, Bubly, Cap’n Crunch, Ceres, Cheetos, Chester’s, Chipsy, Chokis, Chudo, Cracker Jack, Crunchy, Diet Mountain Dew, Diet Mug, Diet Pepsi, Diet 7UP (outside the United States), Domik v Derevne, Doritos, Duyvis, Elma Chips, Emperador, Evolve, Fast Twitch, Frito-Lay, Fritos, Fruktovy Sad, Futurelife, G2, Gamesa, Gatorade, Gatorade Fit, Gatorade Zero, Gatorlyte, Grandma’s, H2oh!, Hard MTN Dew, Health Warrior, Imunele, J7, Kas, Kurkure, Lay’s, Life, Lifewtr, Liquifruit, Lubimy, Manzanita Sol, Marias Gamesa, Matutano, Mirinda, Miss Vickie’s, Moirs, Mother’s, Mountain Dew, Mountain Dew Code Red, Mountain Dew Game Fuel, Mountain Dew Kickstart, Mountain Dew Zero Sugar, Mug, Munchies, Muscle Milk, Near East, Obela, Off the Eaten Path, Paso de los Toros, Pasta Roni, Pearl Milling Company, Pepsi, Pepsi Black, Pepsi Max, Pepsi Zero Sugar, PopCorners, Pronutro, Propel, Quaker, Quaker Chewy, Quaker Simply Granola, Rice-A-Roni, Rockstar, Rold Gold, Ruffles, Sabra, Sabritas, Safari, Sakata, Saladitas Gamesa, San Carlos, Sandora, Santitas, Sasko, 7UP (outside the United States), 7UP Free (outside the United States), Siete, Simba, Smartfood, Smith’s, Snack a Jacks, SoBe, SodaStream, Sonric’s, Spekko, Stacy’s, Starry, Starry Zero Sugar, Sting Energy, Stubborn Soda, SunChips, Toddy, Toddynho, Tostitos, Vesely Molochnik, Walkers, Weetbix, Wheaten, White Star, Ya and Yachak.
Our Brands and Intellectual Property Rights We own numerous valuable trademarks which are essential to our worldwide businesses, including Adrenaline Rush, Agusha, Amp Energy, Aquafina, Aquafina Flavorsplash, Aqua Minerale, Arto Lifewtr, Baja Blast, BaiCaoWei, Bare, Bokomo, Bubly, Cap’n Crunch, Ceres, Cheetos, Chester’s, Chipsy, Chokis, Chudo, Cracker Jack, Crunchy, Diet Mountain Dew, Diet Mug, Diet Pepsi, Diet 7UP (outside the United States), Domik v Derevne, Doritos, Duyvis, Elma Chips, Emperador, Evolve, Fast Twitch, Frito-Lay, Fritos, Fruktovy Sad, Futurelife, G2, Gamesa, Gatorade, Gatorade Fit, Gatorade Zero, Gatorlyte, Grandma’s, H2oh!, Hard MTN Dew, Health Warrior, Imunele, J7, Kas, Kurkure, Lay’s, Life, Lifewtr, Liquifruit, Lubimy, Manzanita Sol, Marias Gamesa, Matutano, Mirinda, Miss Vickie’s, Moirs, Mother’s, Mountain Dew, Mountain Dew Code Red, Mountain Dew Game Fuel, Mountain Dew Kickstart, Mountain Dew Zero Sugar, Mug, Munchies, Muscle Milk, Near East, Obela, Off the Eaten Path, Paso de los Toros, Pasta Roni, Pearl Milling Company, Pepsi, Pepsi Black, Pepsi Max, Pepsi Wild Cherry, Pepsi Zero Sugar, PopCorners, Poppi, Pronutro, Propel, Quaker, Quaker Chewy, Quaker Simply Granola, Rice-A-Roni, Rockstar (outside the United States and Canada), Rold Gold, Ruffles, Sabra, Sabritas, Safari, Sakata, Saladitas Gamesa, San Carlos, Sandora, Santitas, Sasko, 7UP (outside the United States), 7UP Free (outside the United States), Siete, Simba, Smartfood, Smith’s, Snack a Jacks, SoBe, SodaStream, Sonric’s, Spekko, Stacy’s, Starry, Starry Zero Sugar, Sting Energy, Stubborn Soda, SunChips, Toddy, Toddynho, Tostitos, Vesely Molochnik, Walkers, Weetbix, White Star, Ya and Yachak.
We may from time to time update the list of channels we will use to communicate information that could be deemed material and will post information about any such change on www.pepsico.com .
We may from time to time update the list of channels we will use to communicate information that could be deemed material and will post information about any such change on https://www.pepsico.com .
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those documents filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are also available free of charge on our Internet site at http://www.pepsico.com as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC.
Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and amendments to those documents filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are also available free of charge on our Internet site at https://www.pepsico.com as soon as reasonably practicable after such reports are electronically filed with or furnished to the SEC.
During 2024, we continued to experience volatility in our commodity, packaging and other input costs, that may continue into fiscal 2025. See Note 9 to our consolidated financial statements for further information on how we manage our exposure to commodity prices.
During 2025, we continued to experience volatility in our commodity, packaging and other input costs that may continue into fiscal 2026. See Note 9 to our consolidated financial statements for further information on how we manage our exposure to commodity prices.
These types of provisions have required that we highlight perceived concerns about a product, warn consumers to avoid consumption of certain ingredients or substances present in our products, restrict the age of consumers to whom products are marketed or sold, limit the location in which our products may be available or discontinue the use of certain ingredients.
These types of provisions have, among other things, required that we highlight perceived concerns about a product, warn consumers to avoid consumption of certain ingredients or substances present in our products, restrict the age of consumers to whom products are marketed or sold, limit the location in which our products may be available or discontinue the use of certain ingredients.
Other beverage and convenient food competitors include, but are not limited to, The Campbell’s Company, Conagra Brands, Inc., Hormel Foods Corporation, Kellanova, Keurig Dr Pepper Inc., The Kraft Heinz Company, Link Snacks, Inc., Mondelēz International, Inc., Monster Beverage Corporation, Nestlé S.A., Primo Brands Corporation, Red Bull GmbH and Utz Brands, Inc.
Other beverage and convenient food competitors include, but are not limited to, The Campbell’s Company, Conagra Brands, Inc., Hormel Foods Corporation, Keurig Dr Pepper Inc., The Kraft Heinz Company, Link Snacks, Inc., Mars, Incorporated, Mondelēz International, Inc., Monster Beverage Corporation, Nestlé S.A., Primo Brands Corporation, Red Bull GmbH and Utz Brands, Inc.
Similarly, some measures apply a single tax rate per ounce/liter on beverages containing over a certain level of added sugar (or other sweetener) while others apply a graduated tax rate depending upon the amount of added sugar (or other sweetener) in the beverage and some apply a flat tax rate on beverages containing a particular substance or ingredient, regardless of the level of such substance or ingredient.
Similarly, some measures apply a single tax rate per ounce/liter on 8 Table of Contents beverages containing over a certain level of added sugar (or other sweetener) while others apply a graduated tax rate depending upon the amount of added sugar (or other sweetener) in the beverage and some apply a flat tax rate on beverages containing a particular substance or ingredient, regardless of the level of such substance or ingredient.
Certain jurisdictions have either imposed, or are considering imposing, product labeling or warning requirements or other limitations on the marketing or sale of certain of our products as a result of ingredients or substances contained in such products or packaging materials, the audience to whom products are marketed or the location in which the products are sold.
Certain jurisdictions have either imposed, or are considering imposing, product labeling or warning requirements or other limitations on the marketing or sale of certain of our products as a result of ingredients or substances contained in such products or packaging materials, processes used to make the ingredients or products, the audience to whom products are marketed or the location in which the products are sold.
In addition, 10 Table of Contents we and our subsidiaries are subject to environmental remediation obligations arising in the normal course of business, as well as remediation and related indemnification obligations in connection with certain historical activities and contractual obligations, including those of businesses or properties acquired by us or our subsidiaries.
In addition, we and our subsidiaries are subject to environmental remediation obligations arising in the normal course of business, as well as remediation and related indemnification obligations in connection with certain historical activities and contractual obligations, including those of businesses or properties acquired by us or our subsidiaries.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov .
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at https://www.sec.gov .
While these environmental remediation and indemnification obligations cannot be predicted with certainty, such obligations have not had, and are not expected to have, a material impact on our capital expenditures, earnings or competitive position. In addition to the discussion in this section, see also “Item 1A.
While these environmental remediation and indemnification obligations cannot be 9 Table of Contents predicted with certainty, such obligations have not had, and are not expected to have, a material impact on our capital expenditures, earnings or competitive position. In addition to the discussion in this section, see also “Item 1A.
PepsiCo Beverages North America Either independently or in conjunction with third parties, PBNA makes, markets and sells beverage concentrates, fountain syrups and finished goods under various beverage brands including Aquafina, Bubly, Diet Mountain Dew, Diet Pepsi, Gatorade, Gatorade Zero, Mountain Dew, Pepsi, Pepsi Zero Sugar and Propel.
PepsiCo Beverages North America Either independently or in conjunction with third parties, PBNA makes, markets and sells beverage concentrates, fountain syrups and finished goods under various beverage brands including Aquafina, Bubly, Diet Mountain Dew, Diet Pepsi, Gatorade, Gatorade Zero, Mountain Dew, Mountain Dew Baja Blast, Pepsi, Pepsi Wild Cherry, Pepsi Zero Sugar and Propel.
Latin America Either independently or in conjunction with third parties, LatAm makes, markets, distributes and sells a number of convenient food brands including Cheetos, Doritos, Emperador, Lay’s, Marias Gamesa, Ruffles, Sabritas, Saladitas Gamesa and Tostitos, as well as many Quaker-branded convenient foods.
Latin America Foods Either independently or in conjunction with third parties, LatAm Foods makes, markets, distributes and sells a number of convenient food brands including Cheetos, Doritos, Emperador, Lay’s, Marias Gamesa, Quaker, Ruffles, Sabritas, Saladitas Gamesa and Tostitos.
We are also committed to the continued growth and development of our associates. PepsiCo supports and develops its associates through a variety of global training and development programs that build and strengthen employees’ leadership and professional skills, including career development plans, mentoring programs and in-house learning opportunities, such as PEP U Degreed, our internal global online learning resource.
We are also committed to the continued growth and development of our associates. PepsiCo supports and develops its associates through a variety of global training and development programs that build and strengthen employees’ leadership and professional skills, including career development plans, mentoring programs and in-house learning opportunities, such as MyLearning and Schoox, our internal global online learning resource.
In 2024, sales to Walmart Inc. (Walmart) and its affiliates, including Sam’s Club (Sam’s), represented approximately 14% of our consolidated net revenue, with sales reported across all of our divisions, including concentrate sales to our independent bottlers, which were used in finished goods sold by them to Walmart.
In 2025, sales to Walmart Inc. (Walmart) and its affiliates, including Sam’s Club (Sam’s), represented approximately 14% of our consolidated net revenue, with sales reported across all of our segments, including concentrate sales to our independent bottlers, which were used in finished goods sold by them to Walmart.
The information on our website is not, and shall not be deemed to be, a part hereof or incorporated into this or any of our other filings with the SEC.
The information 10 Table of Contents on our website is not, and shall not be deemed to be, a part hereof or incorporated into this or any of our other filings with the SEC.
These activities principally involve: innovations focused on creating consumer preferred products to grow and transform our portfolio through development of new technologies, ingredients, flavors and substrates; development and improvement of our manufacturing processes, including reductions in cost and environmental footprint; implementing product improvements to our global portfolio that reduce added sugars, sodium or saturated fat; offering more products with functional ingredients and positive nutrition including legumes, whole grains, fruits and vegetables, nuts and seeds, dairy, protein (including plant-based proteins), fiber, micronutrients and hydration; development of packaging technology and new package designs, including reducing the amount of plastic in our packaging and developing recyclable, compostable, biodegradable, reusable or otherwise sustainable packaging; development of marketing, merchandising and dispensing equipment; further expanding our beyond the bottle portfolio including innovation for our SodaStream business; investments in technology and digitalization, including artificial intelligence and data analytics to enhance our consumer insights and research; continuing to strengthen our omnichannel capabilities, particularly in e-commerce; and efforts focused on reducing our impact on the environment, including 8 Table of Contents reducing water use in our operations and our agricultural practices and reducing our environmental impact in our operations throughout our value chain.
These activities principally involve: innovations focused on creating consumer preferred products to grow and transform our portfolio through development of new technologies, ingredients, flavors and substrates; development and improvement of our manufacturing processes, including reductions in cost and environmental footprint; implementing product improvements to our global portfolio including to reduce added sugars, sodium or saturated fat; offering more products with functional benefits and positive nutrition including fiber, whole grains, protein and hydration; development of packaging technology and new package designs, including reducing the amount of plastic in our packaging and developing recyclable, compostable, biodegradable, reusable or otherwise sustainable packaging; development of marketing, merchandising and dispensing equipment; further expanding our beyond the bottle portfolio including innovation for our SodaStream business; investments in technology and digitalization, including artificial intelligence and data analytics to enhance our consumer insights and research; continuing to strengthen our omnichannel capabilities, particularly in e-commerce; and efforts focused on reducing our impact on the environment, including reducing water use in our operations and our agricultural practices and reducing our environmental impact in our operations throughout our value chain.
Information that we post on our corporate website could be deemed material to investors. We encourage investors, the media, our customers, consumers, business 11 Table of Contents partners and others interested in us to review the information we post on these channels.
Information that we post on our corporate website could be deemed material to investors. We encourage investors, the media, our customers, consumers, business partners and others interested in us to review the information we post on these channels.
Many of our convenient food products hold significant leadership positions in the convenient food industry in the United States and worldwide. In 2024, we and The Coca-Cola Company represented approximately 18% and 21%, respectively, of the U.S. liquid refreshment beverage category by estimated retail sales in measured channels, according to Information Resources, Inc.
Many of our convenient food products hold significant leadership positions in the convenient food industry in the United States and worldwide. In 2025, we and The Coca-Cola Company represented approximately 16% and 20%, respectively, of the U.S. liquid refreshment beverage category by estimated retail sales in measured channels, according to Information Resources, Inc.
Modern Slavery Act; occupational health and safety; competition; and anti-corruption and data privacy, including the European Union General Data Protection Regulation. In many jurisdictions, compliance with competition laws is of special importance to us due to our competitive position in those jurisdictions, as is compliance with anti-corruption laws, including the U.K. Bribery Act.
Modern Slavery Act; occupational health and safety; the payment of taxes and the global tax environment; competition; and anti-corruption and data privacy, including the European Union General Data Protection Regulation. In many jurisdictions, compliance with competition laws is of special importance to us due to our competitive position in those jurisdictions, as is compliance with anti-corruption laws, including the U.K.
AMESA also, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name).
Further, IB Franchise, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name).
We employed approximately 319,000 people worldwide as of December 28, 2024, including approximately 134,000 people within the United States. We are party to numerous collective bargaining agreements and believe that relations with our employees are generally good. Protecting the safety, health, and well-being of our associates around the world is PepsiCo’s top priority.
We employed approximately 306,000 people worldwide as of December 27, 2025, including approximately 125,000 people within the United States. We are party to numerous collective bargaining agreements and believe that relations with our employees are generally good. Protecting the safety, health, and well-being of our associates around the world is PepsiCo’s top priority.
In 2024, PepsiCo employees completed over 1.8 million hours of training. Available Information We are required to file annual, quarterly and current reports, proxy statements and other information with the U.S. Securities and Exchange Commission (SEC).
In 2025, PepsiCo employees, including front-line employees, completed over 2.8 million hours of training. Available Information We are required to file annual, quarterly and current reports, proxy statements and other information with the U.S. Securities and Exchange Commission (SEC).
We expect continued scrutiny of certain ingredients or substances present in certain of our products and/or their packaging and it is possible that similar or more restrictive requirements may be proposed or enacted in the future.
We expect continued scrutiny of certain ingredients or substances present in certain of our products and/or their packaging, as well as processes used to make them, and it is possible that similar or more restrictive requirements may be proposed or enacted in the future.
Asia Pacific, Australia and New Zealand and China Region Either independently or in conjunction with third parties, APAC makes, markets, distributes and sells a number of convenient food brands including BaiCaoWei, Cheetos, Doritos, Lay’s and Smith’s, as well as many Quaker-branded convenient foods, through consolidated businesses, as well as through noncontrolled affiliates.
Asia Pacific Foods Either independently or in conjunction with third parties, Asia Pacific Foods makes, markets, distributes and sells a number of convenient food brands including BaiCaoWei, Cheetos, Doritos, Kurkure, Lay’s, Quaker and Smith’s, through consolidated businesses, as well as through noncontrolled affiliates.
Our beverage and convenient food sales are generally highest in the third quarter due to seasonal and holiday-related patterns and generally lowest in the first quarter. However, taken as a whole, seasonality has not had a material impact on our consolidated financial results.
Some of these patents are licensed to others. Seasonality Our businesses are affected by seasonal variations. Our beverage and convenient food sales are generally highest in the third quarter due to seasonal and holiday-related patterns and generally lowest in the first quarter. However, taken as a whole, seasonality has not had a material impact on our consolidated financial results.
Africa, Middle East and South Asia Either independently or in conjunction with third parties, AMESA makes, markets, distributes and sells a number of convenient food brands including Cheetos, Chipsy, Doritos, Kurkure, Lay’s, Sasko, Spekko, Wheaten and White Star, as well as many Quaker-branded convenient foods, through consolidated businesses, as well as through noncontrolled affiliates.
Europe, Middle East and Africa Either independently or in conjunction with third parties, EMEA makes, markets, distributes and sells a number of convenient food brands including Cheetos, Chipsy, Doritos, Lay’s, Quaker, Sasko, Spekko, Walkers and White Star through consolidated businesses, as well as through noncontrolled affiliates.
The loss of this customer would have a material adverse effect on our FLNA, QFNA and PBNA divisions. 7 Table of Contents Our Competition Our beverage and convenient food products are in highly competitive categories and markets and compete against products of international beverage and convenient food companies that, like us, operate in multiple geographies, as well as regional, local and private label manufacturers and economy brands and other competitors, including smaller companies developing and selling micro brands directly to consumers through e-commerce platforms or through retailers focused on locally-sourced products.
Our Competition Our beverage and convenient food products are in highly competitive categories and markets and compete against products of international beverage and convenient food companies that, like us, operate in multiple geographies, as well as regional, local and private label manufacturers and economy brands and other competitors, including smaller companies developing and selling micro brands directly to consumers 6 Table of Contents through e-commerce platforms or through retailers focused on locally-sourced products.
Our historical segment reporting will be recast beginning first quarter 2025 to reflect the new organizational structure. Our Distribution Network Our products are primarily brought to market through DSD, customer warehouse and distributor networks and are also sold directly to consumers through e-commerce platforms and retailers. The distribution system used depends on customer needs, product characteristics and local trade practices.
Our Distribution Network Our products are primarily brought to market through DSD, customer warehouse and distributor networks and are also sold directly to consumers through e-commerce platforms and retailers. The distribution system used depends on customer needs, product characteristics and local trade practices.
Further, PBNA manufactures and distributes certain brands licensed from Keurig Dr Pepper Inc., including Crush, Dr Pepper and Schweppes, and certain juice brands licensed from Dole Food Company, Inc. and Ocean Spray Cranberries, Inc.
Further, PBNA manufactures and distributes certain brands licensed from Keurig Dr Pepper Inc., including Crush, Dr Pepper and Schweppes, and certain juice brands licensed from Dole Food Company, Inc. and Ocean Spray Cranberries, Inc. PBNA also distributes, in certain channels, brands owned by Celsius Holdings, Inc. (Celsius), including Celsius, Alani Nu and Rockstar.
Regulatory Matters The conduct of our businesses, including the production, storage, distribution, sale, display, advertising, marketing, labeling, content, quality, safety, transportation, packaging, disposal, recycling and use of our products and their ingredients, as well as our employment and occupational health and safety practices and protection of personal information, are subject to various laws and regulations administered by federal, state and local governmental agencies in the United States, as well as to laws and regulations administered by government entities and agencies in the more than 200 other countries and territories in which our products are made, manufactured, distributed or sold.
Our research centers are located around the world, including in Brazil, China, India, Ireland, Mexico, Russia, South Africa, the United Kingdom and the United States, and leverage consumer insights, food science and engineering to meet our strategy to continually innovate our portfolio of beverages and convenient foods. 7 Table of Contents Regulatory Matters The conduct of our businesses, including the production, storage, distribution, sale, display, advertising, marketing, labeling, content, quality, safety, transportation, packaging, disposal, recycling and use of our products and their ingredients, as well as our employment and occupational health and safety practices and protection of personal information, are subject to various laws and regulations administered by federal, state and local governmental agencies in the United States, as well as to laws and regulations administered by government entities and agencies in the more than 200 other countries and territories in which our products are made, manufactured, distributed or sold.
Customer Warehouse Some of our products are delivered from our manufacturing plants and distribution centers, both company and third-party operated, to customer warehouses. These less costly systems generally work best for products that are less fragile and perishable, and have lower turnover. Distributor Networks We distribute many of our products through third-party distributors.
Customer Warehouse Some of our products are delivered from our manufacturing plants and distribution centers, both company and third-party operated, to customer warehouses, which is a less costly method of distribution than DSD. Distributor Networks We distribute many of our products through third-party distributors.
These branded products are sold to authorized and independent bottlers, independent distributors and retailers. 3 Table of Contents LatAm also, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name).
Further, EMEA makes, markets, distributes and sells a number of dairy products including Agusha, Chudo and Domik v Derevne. EMEA also, either 3 Table of Contents independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name).
We also hold long-term licenses to use valuable trademarks in connection with our products in certain markets, including Ocean Spray. We also distribute Celsius energy drinks and various Keurig Dr Pepper Inc. brands, including Dr Pepper in certain markets, Crush and Schweppes.
We also hold long-term licenses to use valuable trademarks in connection with our products in certain markets, including Ocean Spray. We also distribute Celsius, Alani Nu and Rockstar energy drinks in certain channels across the United States and Canada.
We either own or have licenses to use a number of patents which relate to certain of our products, their packaging, the processes for their production and the design and operation of various equipment used in our businesses. Some of these patents are licensed to others. Seasonality Our businesses are affected by seasonal variations.
In addition, we license the use of our trademarks on merchandise that is sold at retail, which enhances brand awareness. We either own or have licenses to use a number of patents which relate to certain of our products, their packaging, the processes for their production and the design and operation of various equipment used in our businesses.
In addition, we continue to integrate recyclability into our product development process and support the increased use of recycled content, including recycled PET, in our packaging. Fuel, electricity and natural gas are also important commodities for our businesses due to their use in our and our business partners’ facilities and the vehicles delivering our products.
Fuel, electricity and natural gas are also important commodities for our businesses due to their use in our and our business partners’ 4 Table of Contents facilities and the vehicles delivering our products.
In the United States, PepsiCo acts as the exclusive distributor for TBG’s portfolio of brands for small-format and foodservice customers with chilled direct-store-delivery (DSD). See Note 13 to our consolidated financial statements for further information.
In the United States, PBNA acts as the exclusive distributor for small-format and foodservice customers with chilled direct-store-delivery (DSD) for the portfolio of brands owned by Tropicana Beverages Group (TBG).
Our key packaging materials include plastic resins, including polyethylene 5 Table of Contents terephthalate (PET) and polypropylene resins used for plastic beverage bottles and film packaging used for convenient foods, aluminum, glass, closures, cardboard and paperboard cartons.
Our key packaging materials include plastic resin, including polyethylene terephthalate (PET), polyethylene and polypropylene used for plastic beverage bottles and film packaging for convenient foods, aluminum, glass, closures, cardboard and paperboard cartons. In addition, we continue to integrate recyclability into our product development process and support the increased use of recycled content, including recycled PET, in our packaging.
Europe also, either independently or in conjunction with third parties, makes, markets, distributes and sells beverage concentrates, fountain syrups and finished goods under various beverage brands including 7UP, Adrenaline Rush, Aqua Minerale, Lubimy, Mirinda, Pepsi and Pepsi Zero Sugar. These branded products are sold to authorized and independent bottlers, independent distributors and retailers.
EMEA also, either independently or in conjunction with third parties, makes, markets, distributes and sells a number of beverage brands including 7UP, Adrenaline Rush, Aquafina, Lubimy, Mirinda, Pepsi and Pepsi Zero Sugar. EMEA operates its own bottling plants and distribution facilities and sells finished goods directly to independent distributors and retailers.
In 2024, we shifted our 6 Table of Contents alcoholic beverage business away from distribution to a trademark licensing model and flavor sales model and have licensed certain brands in certain markets in the United States and internationally. Trademarks remain valid so long as they are used properly for identification purposes, and we emphasize correct use of our trademarks.
In the United States, PepsiCo acts as the exclusive distributor for TBG’s portfolio of brands for small-format and foodservice customers with chilled DSD. In 2024, we shifted our alcoholic beverage business away from distribution to a trademark licensing model and flavor sales model and have licensed certain of our brands in certain markets in the United States and internationally.
Frito-Lay North America Either independently or in conjunction with third parties, FLNA makes, markets, distributes and sells branded convenient foods. These foods include branded dips, Cheetos cheese-flavored snacks, Doritos tortilla chips, Fritos corn chips, Lay’s potato chips, Ruffles potato chips and Tostitos tortilla chips. FLNA’s branded products are sold to independent distributors and retailers.
PepsiCo Foods North America Either independently or in conjunction with third parties, PFNA makes, markets, distributes and sells convenient foods, which include cereals, chips, dips, granola bars, oatmeal, pasta, rice and syrups and mixes under various brands including Cheetos, Doritos, Fritos, Lay’s, Pearl Milling Company, Quaker, Ruffles and Tostitos. PFNA’s products are sold to independent distributors and retailers.
APAC also makes, markets, distributes and sells beverage concentrates, fountain syrups and finished goods under various beverage brands including 7UP, Aquafina, Mirinda, Mountain Dew, Pepsi and Sting Energy. These branded products are sold to authorized and independent bottlers, independent distributors and retailers.
International Beverages Franchise IB Franchise makes, markets and sells beverage concentrates to authorized and independent bottlers under various beverage brands including 7UP, Aquafina, Gatorade, Mirinda, Mountain Dew, Pepsi, Pepsi Black, Pepsi Zero Sugar, and Sting Energy. IB Franchise also manufactures and distributes SodaStream sparkling water makers and related products.
We rely on legal and operational compliance programs, as well as in-house and outside counsel and other experts, to guide our businesses in complying with the laws and regulations around the world that apply to our businesses. 9 Table of Contents Certain jurisdictions have either imposed, or are considering imposing, new or increased taxes on the manufacture, distribution or sale of our products, ingredients or substances contained in, or attributes of, our products or commodities used in the production of our products.
Bribery Act. We rely on legal and operational compliance programs, as well as in-house and outside counsel and other experts, to guide our businesses in complying with the laws and regulations around the world that apply to our businesses.
We have authorized, through licensing arrangements, the use of many of our trademarks in such contexts as convenient food joint ventures and beverage bottling appointments. In addition, we license the use of our trademarks on merchandise that is sold at retail, which enhances brand awareness.
Trademarks remain valid so long as they are used properly for identification purposes, and we emphasize correct use of our trademarks. We have authorized, through licensing arrangements, the use 5 Table of Contents of many of our trademarks in such contexts as convenient food joint ventures and beverage bottling appointments.
Joint ventures in which we have an ownership interest either own or have the right to use certain trademarks, such as Lipton and Starbucks. In the United States, PepsiCo acts as the exclusive distributor for TBG’s portfolio of brands for small-format and foodservice customers with chilled DSD. See Note 13 to our consolidated financial statements for further information.
In addition, we distribute various Keurig Dr Pepper Inc. brands in certain markets in the United States and Canada, including Dr Pepper, Crush and Schweppes. Joint ventures in which we have an ownership interest either own or have the right to use certain trademarks, such as Lipton and Starbucks.
Removed
Quaker Foods North America Either independently or in conjunction with third parties, QFNA makes, markets, distributes and sells branded convenient foods, which include cereals, rice, pasta and other branded products.
Added
The loss of this customer would have a material adverse effect on our PFNA and PBNA segments.
Removed
QFNA’s products include Cap’n Crunch cereal, Life cereal, Pearl Milling Company syrups and mixes, Quaker Chewy granola bars, Quaker grits, Quaker oatmeal, Quaker rice cakes, Quaker Simply Granola and Rice-A-Roni side dishes. QFNA’s branded products are sold to independent distributors and retailers.
Added
Certain jurisdictions have either imposed, or are considering imposing, new or increased taxes on the manufacture, distribution or sale of our products, ingredients or substances contained in, or attributes of, our products or commodities used in the production of our products.
Removed
In the first quarter of 2022, we sold our Tropicana, Naked and other select juice brands to PAI Partners, while retaining a 39% noncontrolling interest in a newly formed joint venture, Tropicana Brands Group (TBG), operating across North America and Europe (Juice Transaction).
Removed
LatAm also, either independently or in conjunction with third parties, makes, markets, distributes and sells beverage concentrates, fountain syrups and finished goods under various beverage brands including 7UP, Diet 7UP, Gatorade, H2oh!, Manzanita Sol, Mirinda, Pepsi, Pepsi Black, San Carlos and Toddy.
Removed
Europe Either independently or in conjunction with third parties, Europe makes, markets, distributes and sells a number of convenient food brands including Cheetos, Doritos, Lay’s, Ruffles and Walkers, as well as many Quaker-branded convenient foods, through consolidated businesses, as well as through noncontrolled affiliates.
Removed
In certain markets, however, Europe operates its own bottling plants and distribution facilities. Europe also, as part of its beverage business, manufactures and distributes SodaStream sparkling water makers and related products. Further, Europe makes, markets, distributes and sells a number of dairy products including Agusha, Chudo and Domik v Derevne.
Removed
Europe also, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name).In the first quarter of 2022, we sold our Tropicana, Naked and other select juice brands to PAI Partners, while retaining a 39% noncontrolling interest in TBG, operating across North America and Europe.
Removed
See Note 13 to our consolidated financial statements for further information.
Removed
AMESA also makes, markets, distributes and sells beverage concentrates, fountain syrups and finished goods under various beverage brands including 7UP, Aquafina, Mirinda, Mountain Dew, Pepsi and Sting Energy. These branded products are sold to authorized and independent bottlers, independent distributors and retailers. In certain markets, however, AMESA operates its own bottling plants and distribution facilities.
Removed
APAC also, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name). Changes to Organizational Structure The division amounts and discussions included in this Form 10-K reflect the reportable segments that existed through the end of 2024.
Removed
Effective beginning with our first quarter of 2025, we realigned certain of 4 Table of Contents our reportable segments to be consistent with certain changes to our organizational structure and how the Chief Executive Officer will monitor the performance of these segments. In North America, the food businesses, FLNA and QFNA, will be reported together as PepsiCo Foods North America.
Removed
These changes do not impact our PBNA segment. Internationally, the foods businesses in LatAm, Europe, AMESA and APAC will be reorganized into three reportable segments: Latin America Foods, Europe, Middle East and Africa (EMEA), and Other International Foods. Other International Foods will include the foods businesses in APAC and India, currently part of AMESA.
Removed
Our international franchise beverage businesses that were part of our LatAm, Europe, AMESA and APAC segments will be reported as International Beverages Franchise. The company-owned bottling businesses operating internationally are all located within EMEA and will be reported in the newly created EMEA segment.
Removed
Our research centers are located around the world, including in Brazil, China, India, Ireland, Mexico, Russia, South Africa, the United Kingdom and the United States, and leverage consumer insights, food science and engineering to meet our strategy to continually innovate our portfolio of beverages and convenient foods.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

70 edited+8 added−8 removed89 unchanged
Biggest changeConsumer preferences continuously evolve due to a variety of factors, including: changes in consumer demographics, consumption patterns, diet (whether due to changes in consumer behavior and eating habits, increasing use of weight-loss drugs or other factors) and channel preferences (including continued increases in the e-commerce and online-to-offline channels); pricing (including the effective impact of taxes imposed on the manufacture, distribution or sale of certain of our products as a result of ingredients contained in such products); changes in consumer spending patterns (including if consumers switch to private label or lower-priced product offerings); product quality; concerns or perceptions regarding packaging and its environmental impact (such as single-use and other plastic packaging); concerns or perceptions regarding the nutrition profile and health effects of, or location of origin of, ingredients or substances in our products or packaging, including due to the results of third-party studies (whether or not scientifically valid); and concerns or perceptions regarding our workforce policies and initiatives.
Biggest changeConsumer preferences continuously evolve due to a variety of factors, including: changes in consumer demographics, consumption patterns (including increased food purchased away-from-home), diet (whether due to changes in consumer behavior and eating habits, increasing use of weight-loss drugs, such as GLP-1 medications, or other factors) and channel preferences (including continued increases in the e-commerce and online-to-offline channels and use of artificial intelligence shopping agents that autonomously select products that may not be ours); pricing (including the effective impact of tariffs and taxes imposed on the manufacture, distribution or sale of certain of our products as a result of ingredients contained in such products); affordability pressures and changes in consumer spending patterns (including if consumers switch to private label or lower-priced product offerings); changes in funding for or restrictions on the inclusion of our products in benefit programs, such as the Supplemental Nutrition Assistance Program (SNAP) in the United States; product quality; product functionality (including products high in protein or fiber-enriched); concerns or perceptions regarding packaging and its environmental impact (such as single-use and other plastic packaging); concerns or perceptions regarding the processing, nutrition profile and health effects of, or location of origin of, ingredients or substances in our products or packaging, including due to public statements by government officials, increased litigation, changes in regulations, regulatory scrutiny or the results of third-party studies (whether or not scientifically valid); and concerns or perceptions regarding our workforce policies and initiatives.
Product quality or safety issues identified by us or governmental authorities have in the past and could in the future also reduce consumer confidence and demand for our products, cause production and delivery disruptions, including as a result of temporary or permanent closure of manufacturing plants or facilities, and result in increased costs (including payment of fines and/or judgments, cleaning and remediation costs and legal fees, and costs associated with alternative sources of production) and damage our reputation (or the reputation of joint ventures in which we have an interest), particularly as we or our joint ventures continue to expand into new categories, all of which can adversely affect our business.
Product quality or safety issues identified by us or governmental authorities have in the past and could in the future also reduce consumer confidence and demand for our products, cause production and delivery disruptions, including as a result of temporary or permanent closure of manufacturing plants or facilities, result in increased costs (including payment of fines and/or judgments, cleaning and remediation costs and legal fees, and costs associated with alternative sources of production) and damage our reputation (or the reputation of joint ventures in which we have an interest), particularly as we or our joint ventures continue to expand into new categories, all of which can adversely affect our business.
Many of the raw materials and supplies used in the production of our products are sourced from countries experiencing war and other military conflict, acts of terrorism, civil unrest, political instability or unfavorable economic conditions.
Many of the raw materials and supplies used in the production of our products are sourced from countries experiencing war or other military conflict, acts of terrorism, civil unrest, political instability or unfavorable economic conditions.
These disruptions or incidents may be caused by cyberattacks and other cyber incidents, network or power outages, software, equipment or telecommunications failures, the unintentional or malicious actions of employees or contractors, natural disasters, fires or other catastrophic events.
These incidents or disruptions may be caused by cyberattacks and other cyber incidents, network or power outages, software, equipment or telecommunications failures, the unintentional or malicious actions of employees or contractors, natural disasters, fires or other catastrophic events.
Cyberattacks and other cyber incidents are occurring more frequently, the techniques used to gain access to information technology systems and data, disable or degrade service or sabotage systems are constantly evolving and becoming more sophisticated in nature and are being carried out by groups and individuals with a wide range of expertise and motives.
Cyberattacks and other cyber incidents are occurring more frequently, and the techniques used to gain access to information technology systems and data, disable or degrade service or sabotage systems are constantly evolving and becoming more sophisticated in nature and are being carried out by groups and individuals with a wide range of expertise and motives.
Further, developing and collecting, measuring and reporting sustainability information and metrics can be costly, difficult and time consuming and is subject to changing interpretive guidance and evolving reporting standards, including the Corporate Sustainability Reporting Directive in the European Union, especially to the extent these standards are not harmonized or consistent.
Further, developing and collecting, measuring and reporting sustainability information and metrics can be costly, difficult and time consuming and is subject to changing interpretive guidance and evolving reporting standards, including the European Sustainability Reporting Standards and Corporate Sustainability Reporting Directive in the European Union, especially to the extent these standards are not harmonized or consistent.
For example, increasing governmental and societal attention to environmental, social and governance matters has resulted and could continue to result in new laws or regulatory requirements, including expanded disclosure requirements that are expected to continue to expand the nature, scope and complexity of matters on which we are required to report.
For example, increasing governmental and societal attention to environmental, social and governance matters has resulted in and could continue to result in new laws or regulatory requirements, including expanded disclosure requirements that are expected to continue to expand the nature, scope and complexity of matters on which we are required to report.
Failure to comply with these laws and regulations or to otherwise protect personal data from unauthorized access, use or other processing, have in the past and could in the future result in litigation, claims, legal or regulatory proceedings, inquiries or investigations, damage to our reputation, fines or penalties, all of which can adversely affect our business.
Failure to comply with these laws and regulations or to otherwise protect personal data from unauthorized access, use or other processing, have in the past resulted in and could in the future result in litigation, claims, legal or regulatory proceedings, inquiries or investigations, damage to our reputation, fines or penalties, all of which can adversely affect our business.
Our business in these markets has been and could continue in the 16 Table of Contents future to be impacted by economic, political and social conditions; geopolitical conflicts or tensions, acts of war, terrorist acts, and civil unrest, including demonstrations and protests; competition; tariffs, sanctions or other regulations restricting contact with certain countries in these markets; foreign ownership restrictions; nationalization of our assets or the assets of our business partners; government-mandated closure, or threatened closure, of our operations or the operations of our business partners; restrictions on the import or export of our products or ingredients or substances used in our products; highly inflationary economies; devaluation or fluctuation or demonetization of currency; regulations on the transfer of funds to and from foreign countries, currency controls or other currency exchange restrictions, which result in significant cash balances in foreign countries, from time to time, or can significantly affect our ability to effectively manage our operations in certain of these markets and can result in the deconsolidation of such businesses; the lack of well-established or reliable legal systems; increased costs of doing business due to compliance with complex foreign and U.S. laws and regulations that apply to our international operations, including the Foreign Corrupt Practices Act, the U.K.
Our business in these markets has been and could continue in the future to be impacted by economic, political and social conditions; geopolitical conflicts or tensions, acts of war, terrorist acts, and civil unrest, including demonstrations and protests; competition; tariffs, sanctions or other regulations restricting contact with certain countries in these markets; foreign ownership restrictions; nationalization of our assets or the assets of our business partners; government-mandated closure, or threatened closure, of our operations or the operations of our business partners; restrictions on the import or export of our products or ingredients or substances used in our products; highly inflationary economies; devaluation or fluctuation or demonetization of currency; regulations on the transfer of funds to and from foreign countries, currency controls or other currency exchange restrictions, which result in significant cash balances in foreign countries, from time to time, or can significantly affect our ability to effectively manage our operations in certain of these markets and can result in the deconsolidation of such businesses; the lack of well-established or reliable legal systems; increased costs of doing business due to compliance with complex foreign and U.S. laws and regulations that apply to our international operations, including the Foreign Corrupt Practices Act, the U.K.
Limitations on the marketing or sale of our products can adversely affect our business and financial performance. Certain jurisdictions in which our products are sold have either imposed, or are considering imposing, limitations on the marketing or sale of our products as a result of ingredients or substances in our products or product packaging.
Limitations on the marketing or sale of our products can adversely affect our business and financial performance. Certain jurisdictions in which our products are sold have either imposed, or are considering imposing, limitations on the marketing or sale of our products as a result of ingredients or substances in our products or certain product attributes or packaging.
Lack of available water of acceptable quality, actions by governmental and non-governmental organizations, investors, customers and consumers on water scarcity and increasing pressure to conserve and replenish water in areas of scarcity and stress, including due to the effects of climate change, can lead to: supply chain disruption; adverse effects on our operations or the operations of our business partners; higher compliance costs; increased capital expenditures (including investments in the development of technologies to enhance water efficiency and reduce consumption); higher production costs, including less favorable pricing for water; the interruption or cessation of operations at, or relocation of, our facilities or the facilities of our business partners; failure to achieve our goals relating to water use; perception of our failure to act responsibly with 14 Table of Contents respect to water use or to effectively respond to legal or regulatory requirements concerning water scarcity; or damage to our reputation, any of which can adversely affect our business.
Lack of available water of acceptable quality, actions by governmental and non-governmental organizations, investors, customers and consumers on water scarcity and increasing pressure to conserve and replenish water in areas of scarcity and stress, including due to the effects of climate change, can lead to: supply chain disruption; adverse effects on our operations or the operations of our business partners; higher compliance costs; increased capital expenditures (including investments in the development of technologies to enhance water efficiency and reduce consumption); higher production costs, including less favorable pricing for water; the interruption or cessation of operations at, or relocation of, our facilities or the facilities of our business partners; failure to achieve our goals relating to water use; perception of our failure to act responsibly with respect to water use or to effectively respond to legal or regulatory requirements concerning water scarcity; or damage to our reputation, any of which can adversely affect our business.
For example, economic and political conditions in countries where we are subject to taxes, including the United States, have in the past and could continue to result in significant changes in tax legislation or regulation.
For example, economic and political conditions in countries where we are subject to taxes, including the United States, have in the past resulted in and could continue to result in significant changes in tax legislation or regulation.
Our business has in the past and could in the future be negatively affected by system shutdowns, degraded systems performance, systems disruptions or security incidents.
Our business has in the past and could in the future be negatively affected by security incidents, systems disruptions or shutdowns or degraded systems performance.
In addition, there can be no assurance that we will achieve our sustainability goal, which will require significant effort and resources from us and other stakeholders, such as our suppliers and other third parties, governmental entities, and the development of technology that may not currently exist or exist at scale.
In addition, there can be no assurance that we will achieve our sustainability goals, which will require significant effort and resources from us and other stakeholders, such as our suppliers and other third parties, governmental entities, and the development of technology that may not currently exist or exist at scale.
As the legislation becomes effective in countries in which we do business, our taxes could increase and negatively impact our provision for income taxes. This increasingly complex global tax environment has in the past and could continue to increase tax uncertainty, resulting in higher compliance costs and adverse effects on our financial performance.
As the legislation becomes effective in countries in which we do business, our taxes will increase and negatively impact our provision for income taxes. This increasingly complex global tax environment has in the past increased and could continue to increase tax uncertainty, resulting in higher compliance costs and adverse effects on our financial performance.
Depending on the function involved, such errors can also lead to business disruption, systems performance degradation, processing inefficiencies or other systems disruptions, the loss of or damage to intellectual property or sensitive data through security breaches or otherwise, incorrect or adverse effects on financial reporting, litigation, claims, legal or regulatory proceedings, inquiries or investigations, fines or penalties, 19 Table of Contents remediation costs, damage to our reputation or have a negative impact on employee morale, all of which can adversely affect our business.
Depending on the function involved, such errors can also lead to business disruption, systems performance degradation, processing inefficiencies or other systems disruptions, the loss of or damage to intellectual property or sensitive data through security breaches or otherwise, incorrect or adverse effects on financial reporting, litigation, claims, legal or regulatory proceedings, inquiries or investigations, fines or penalties, remediation costs, damage to our reputation or have a negative impact on employee morale, all of which can adversely affect our business.
In addition, we continue on our multi-year phased business transformation initiative to migrate certain aspects of our systems, including our financial processing systems, to enterprise-wide systems solutions and have deployed these systems in certain countries and divisions. We have experienced and could continue to experience systems outages and operating inefficiencies following these planned implementations.
In addition, we continue on our multi-year phased business transformation initiative to migrate certain aspects of our systems, including our financial processing systems, to enterprise-wide systems solutions and have deployed these systems in certain countries and segments. We have experienced and could continue to experience systems outages and operating inefficiencies following these planned implementations.
We and our subsidiaries have been, and in the future may be, party to a variety of litigation, claims, legal or regulatory proceedings, inquiries and investigations, including but not limited to matters related to our advertising, marketing or commercial practices, product labels, claims and ingredients, food safety, personal injury, property damage, intellectual property rights, privacy, employment, tax and insurance matters, environmental, social and governance matters, including concerns or perceptions regarding our packaging and its environmental impact, the efficacy of recycling, our packaging sustainability goals and our workforce policies and initiatives, and matters relating to our compliance with applicable laws and regulations.
We and our subsidiaries have been, and in the future may be, party to a variety of litigation, claims, legal or regulatory proceedings, inquiries and investigations, including but not limited to matters related to our advertising, marketing or commercial practices, product labels, claims and ingredients, processing, food safety, personal injury, property damage, intellectual property rights, privacy, employment, tax and insurance matters, environmental, social and governance matters, including concerns or perceptions regarding our packaging and its environmental impact, the efficacy of recycling, our sustainability goals and our workforce policies and initiatives, shareholder-initiated actions, and matters relating to our compliance with applicable laws and regulations.
These limitations require that we highlight perceived concerns about a product or product packaging, warn consumers to avoid consumption of certain ingredients or substances present in 22 Table of Contents our products, restrict the age of consumers to whom products are marketed or sold (including bans on advertising during children’s TV programs), limit the location in which our products may be available (including limits on the sale of our products in public schools) or discontinue the use of certain ingredients or packaging.
These limitations require that we highlight perceived concerns about a product or product packaging, warn consumers to avoid consumption of certain ingredients or substances present in our products, restrict the age of consumers to whom products are marketed or sold (including bans on advertising during children’s TV programs), limit the location in which our products may be available (including limits on the sale of our products in public schools) or discontinue the use of certain ingredients or packaging.
Further, the legal and regulatory landscape for certain new technologies, such as artificial intelligence, is uncertain and evolving and our compliance obligations could increase our costs or limit how we may use these technologies in one or more of our businesses.
Further, the legal and regulatory landscape for certain new technologies, such as artificial intelligence, is uncertain and evolving and our compliance obligations could continue to increase our costs or limit how we may use these technologies in one or more of our businesses.
There can be no assurance that we will be able to maintain favorable arrangements and relationships with suppliers or that our contingency plans will be effective to mitigate disruptions that may arise from shortages or discontinuation of any raw materials and other supplies that we use in the manufacture, production and distribution of our products or from operational or financial instability of our key suppliers.
There can be no assurance that we will be able to maintain favorable arrangements and relationships with suppliers or that our contingency plans will be effective to mitigate disruptions that may arise from shortages or discontinuation of any raw materials and other supplies that we use in the manufacture, production and distribution of our products or from operational or financial 14 Table of Contents instability of our key suppliers.
While we believe we devote significant resources to network security, disaster recovery, 18 Table of Contents employee training and other measures to secure our information technology systems and prevent unauthorized access to or loss of data, there are no guarantees that they will be adequate to safeguard against all cyber incidents, systems disruptions, system compromises or misuses of data.
While we believe we devote significant resources to network security, disaster recovery, employee training and other measures to secure our information technology systems and prevent unauthorized access to or loss of data, there are no guarantees that they will be adequate to safeguard against all cyber incidents, systems disruptions, system compromises or misuses of data.
Lack of progress or failure to properly report on our goals with respect to reducing our impact on the environment or perception of a failure to act responsibly with respect to the environment or to effectively respond to regulatory requirements concerning climate change and other sustainability matters, including the use of single-use plastics, has led and could continue to lead to adverse publicity, which could result in reduced demand for our products, damage to our reputation and increased the risk of litigation, regulatory proceedings, inquiries or investigations, which has adversely affected our business.
Lack of progress or failure to properly report on our goals with respect to reducing our impact on the environment or perception of a failure to act responsibly with respect to the environment or to effectively respond to regulatory requirements concerning climate change and other sustainability matters, including the use of single-use plastics, has led and could continue to lead to adverse publicity, reduced demand for our products, damage to our reputation, an increased risk of litigation, regulatory proceedings, inquiries or investigations, which have adversely affected our business.
In addition, we cannot predict how current or future economic conditions will affect our business partners, including financial institutions with whom we do business, and any negative impact on any of the foregoing may also have an adverse impact on our business. Future cyber incidents and other disruptions to our information systems can adversely affect our business.
In addition, we cannot predict how current or future economic conditions will affect our business partners, including financial institutions with whom we do business, and any negative impact on any of the foregoing may also have an adverse impact on our business. 16 Table of Contents Future cyber incidents and other disruptions to our information systems can adversely affect our business.
In addition, geopolitical conflicts (such as the ongoing conflict in Ukraine) could result in temporary or permanent loss of assets, including the nationalization or expropriation of assets. In addition, political and social conditions in certain jurisdictions have resulted in demonstrations and protests, including in connection with geopolitical events and tensions, political elections, civil rights and liberties.
In addition, geopolitical conflicts (such as the ongoing conflict in Ukraine) could result in temporary or permanent loss of assets, including the nationalization or expropriation of assets. 15 Table of Contents In addition, political and social conditions in certain jurisdictions have resulted in demonstrations and protests, including in connection with geopolitical events and tensions, political elections, civil rights and liberties.
For example, malicious actors have employed and could continue to employ the information technology supply chain to introduce malware through software updates or compromised supplier accounts or hardware and exploit known or unknown hardware or software vulnerabilities in our systems or the systems of our vendors and third-party service providers.
For example, malicious actors have employed and 17 Table of Contents could continue to employ the information technology supply chain to introduce malware through software updates or compromised supplier accounts or hardware and exploit known or unknown hardware or software vulnerabilities in our systems or the systems of our vendors and third-party service providers.
Also, there is an increased focus in many jurisdictions in which our products are made, manufactured, distributed or sold regarding environmental policies relating to climate change, biodiversity loss, deforestation, regulating greenhouse gas emissions, energy policies and sustainability, including single-use plastics.
Also, there is continued focus in many jurisdictions in which our products are made, manufactured, distributed or sold regarding environmental policies relating to climate change, biodiversity loss, deforestation, regulating greenhouse gas emissions, energy policies and sustainability, including single-use plastics.
Responding to these matters, even those that are ultimately non-meritorious, requires us to incur 25 Table of Contents significant expense and devote significant resources, and may generate adverse publicity that damages our reputation or brand image. Any of the foregoing can adversely affect our business.
Responding to these matters, even those that are ultimately non-meritorious, requires us to incur significant expense and devote significant resources, and may generate adverse publicity that damages our reputation or brand image. Any of the foregoing can adversely affect our business.
In addition, failure to successfully complete or manage strategic transactions may impede our efforts to shift our portfolio to include new products that are less affected by the impact of ingredient-based taxes or other regulatory actions. Our reliance on third-party service providers and enterprise-wide systems can have an adverse effect on our business.
In addition, failure to successfully complete or manage strategic transactions may impede our efforts to shift our portfolio to include new products that are less affected by the impact of ingredient-based taxes or other regulatory actions or scrutiny. 18 Table of Contents Our reliance on third-party service providers and enterprise-wide systems can have an adverse effect on our business.
General Data Protection Regulation (which implements the 23 Table of Contents GDPR into U.K. law), China’s Personal Information Protection Act and similar regulations implemented in other non-U.S. jurisdictions, impose significant costs and challenges that are likely to continue to increase over time, particularly as additional jurisdictions continue to adopt similar regulations and we continue to expand our direct-to-consumer operations.
General Data Protection Regulation (which implements the GDPR into U.K. law), China’s Personal Information Protection Act and similar regulations implemented in other non-U.S. jurisdictions, impose significant costs and challenges that are likely to continue to increase over time, particularly as additional jurisdictions continue to adopt similar regulations and we continue to expand our direct-to-consumer operations.
Further, methodologies for reporting our data may be updated and previously reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations (including from acquisitions and divestitures) and other changes in circumstances.
Further, methodologies for reporting our data may be updated and previously 19 Table of Contents reported data may be adjusted to reflect improvement in availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations (including from acquisitions and divestitures) and other changes in circumstances.
In addition, we cannot ensure that licensees and other third parties who hold licenses to our intellectual property will not take actions that adversely affect the value of our intellectual property. 24 Table of Contents Failure to comply with laws and regulations applicable to our business can adversely affect our business.
In addition, we cannot ensure that licensees and other third parties who hold licenses to our intellectual property will not take actions that adversely affect the value of our intellectual property. Failure to comply with laws and regulations applicable to our business can adversely affect our business.
In addition, failure to attract, retain and develop associates in a manner that supports our culture can damage our business results and our reputation. Any of the foregoing can adversely affect our business. Water scarcity can adversely affect our business. We and our business partners use water in the manufacturing of our products.
In addition, failure to attract, retain and develop associates in a manner that supports our culture can damage our business results and our reputation. Any of the foregoing can adversely affect our business. 13 Table of Contents Water scarcity can adversely affect our business. We and our business partners use water in the manufacturing of our products.
Our equity method investees also perform similar impairment tests and we record our proportionate share of impairment charges recorded by them, adjusted for the impact of items such as basis differences and deferred taxes, as appropriate.
Our equity method investees also perform similar impairment tests and we record our proportionate share 20 Table of Contents of impairment charges recorded by them, adjusted for the impact of items such as basis differences and deferred taxes, as appropriate.
Also, in the course of developing new products or improving the quality of existing products, we have in the past been alleged to have infringed, and could in the future infringe or be alleged to infringe, on the intellectual property rights of others.
Also, in the course of developing new products or improving the quality of existing products, we have in the past been alleged to have infringed, and could in the future infringe or be alleged 23 Table of Contents to infringe, on the intellectual property rights of others.
The conduct of our business is subject to numerous laws and regulations relating to the production, processing, storage, distribution, sale, display, advertising, marketing, labeling, content (including whether a product contains genetically engineered ingredients), quality, safety, transportation, supply chain (including human rights), traceability, sourcing (including pesticide use), packaging, disposal, recycling and use of our products or raw materials, employment and occupational health and safety, environmental, social and governance matters and reporting (including climate change), machine learning and artificial intelligence (including generative artificial intelligence) and data privacy and protection.
The conduct of our business is subject to numerous laws and regulations relating to the production, processing, storage, distribution, sale, display, advertising, marketing, labeling, content (including whether a product contains artificial colors or flavors or genetically engineered ingredients), quality, safety, transportation, supply chain (including human rights), traceability, sourcing (including pesticide use), packaging, disposal, recycling and use of our products or raw materials, employment and occupational health and safety, environmental, social and governance matters and reporting (including climate change), machine learning and artificial intelligence (including generative artificial intelligence), international trade (including sanctions and export controls), and data privacy and protection.
Many of the jurisdictions in which our products are sold have experienced and could continue to experience uncertain or unfavorable economic conditions, such as high inflation and adverse changes in interest rates, tax laws or tax rates, including as a result of geopolitical events and tensions.
Many of the jurisdictions in which our products are sold have experienced and could continue to experience uncertain or unfavorable economic conditions, such as high inflation and adverse changes in interest rates, tax laws or tax rates and new, expanded or retaliatory tariffs, including as a result of geopolitical events and tensions.
Our reputation or brand image has in the past been, and could in the future be, adversely impacted by a variety of factors, including: any failure by us, our business partners, or other actors in our supply chain to maintain high ethical, business and environmental, social and governance practices, including with respect to human rights, child labor, workforce policies and initiatives, workplace conditions and employee health and safety; any failure, or perception of a failure, to achieve or make sufficient progress toward our environmental, social and governance goals, or any revisions of or negative perception toward such goals, including with respect to the nutrition profile of our products, packaging, water use, our impact on the environment and our workforce policies and initiatives; any failure to address health or other concerns about our products, products we distribute, certain brands licensed to and distributed to third parties (including alcoholic beverages), or particular ingredients in our products, including concerns regarding whether certain of our products are “ultra-processed” or otherwise contribute to obesity and other health conditions or an increase in public health costs; our research and development efforts; any product quality or safety issues, including the recall of any of our products; any failure to comply with laws and regulations; consumer perception of our advertising campaigns, sponsorship arrangements, marketing programs, use of social media and our response to political and social issues, geopolitical events and tensions, wars and other military conflicts, including the ongoing conflicts in Ukraine and the Middle East, or catastrophic events; or any failure to effectively respond to negative or inaccurate comments about us on social media or otherwise regarding any of the foregoing.
Our reputation or brand image has in the past been, and could in the future be, adversely impacted by a variety of factors, including: any failure by us, our business partners, or other actors in our supply chain to maintain high ethical, business and environmental, social and governance practices, including with respect to human rights, child labor, workforce policies and initiatives, workplace conditions and employee health and safety; any failure, or perceived failure, to achieve or make sufficient progress toward our environmental, social and governance goals, or any revisions of or negative perception toward such goals, including with respect to the nutrition profile of our products, packaging, water use, our impact on the environment and our workforce policies and initiatives; any difficulties executing our strategic initiatives; any failure to address health or other concerns about our products, products we distribute, certain brands licensed to and distributed to third parties (including alcoholic beverages), or particular ingredients or substances in our products, including concerns or perceptions regarding whether certain of our products are “ultra-processed,” contain certain ingredients or substances or otherwise contribute to obesity and other health conditions or an increase in public health costs; our research and development efforts; any product quality or safety issues, including the recall of any of our products; any failure to comply with laws and regulations; consumer perception of our advertising campaigns, sponsorship arrangements, marketing programs, use of social media and our response to political and social issues, geopolitical events and tensions, wars and other military conflicts, or catastrophic events; or any failure to effectively respond to negative or inaccurate comments about us on social media or otherwise regarding any of the foregoing.
We could also be subjected to negative responses by governmental actors (such as anti-ESG legislation or retaliatory legislative treatment) or certain stakeholders (such as boycotts, litigation or negative publicity campaigns) that could adversely affect our business. 20 Table of Contents Strikes or work stoppages can cause our business to suffer.
We could also be subjected to negative responses by governmental actors (such as anti-ESG legislation or retaliatory legislative treatment) or certain stakeholders (such as boycotts, litigation or negative publicity campaigns) that could adversely affect our business. Strikes or work stoppages can cause our business to suffer.
Our business can also be adversely affected if consumers lose confidence in product quality, safety and integrity generally, even if such loss of confidence is unrelated to products in our portfolio.
Our business can also be adversely affected if consumers lose confidence in product 12 Table of Contents quality, safety and integrity generally, even if such loss of confidence is unrelated to products in our portfolio.
These tax measures, whatever their scope or form, have in the past and could continue to increase the cost of certain of our products, reduce overall consumption of our products or lead to negative publicity, resulting in an adverse effect on our business and financial performance.
These tax measures, whatever their scope or form, have in the past increased and could continue 21 Table of Contents to increase the cost of certain of our products, reduce overall consumption of our products or lead to negative publicity, resulting in an adverse effect on our business and financial performance.
However, not all packaging is recovered, whether due to lack of infrastructure, improper disposal or otherwise, and certain of our packaging is not currently recyclable, commercially compostable, biodegradable or reusable.
However, not all packaging is recovered or handled as designed, whether due to lack of infrastructure, improper disposal or otherwise, and certain of our packaging is not currently recyclable, commercially compostable, biodegradable or reusable.
Economic and political pressures to increase tax revenues in jurisdictions in which we operate, or the adoption of new or reformed tax legislation or regulation, has made and could continue to make resolving tax disputes more difficult and the final resolution of tax audits and any related litigation can materially differ from our historical provisions and accruals, resulting in an adverse effect on our financial performance.
Economic and political pressures to increase tax revenues in jurisdictions in which we operate, or the adoption of new or reformed tax legislation or regulation, has made and could continue to make resolving tax disputes more difficult and the final resolution of tax audits and any related litigation can materially differ from our historical provisions and accruals, which can adversely affect our financial performance.
The raw materials and other supplies, including agricultural commodities, fuel and packaging materials, such as recycled PET, transportation, labor and other supply chain inputs that we use for the manufacturing, production and distribution of our products are subject to price volatility and fluctuations in availability caused by many factors, including changes in supply and demand, supplier capacity constraints, inflation, weather conditions (including potential effects of climate change), fire, natural 15 Table of Contents disasters, disease or pests (including the impact of greening disease on the citrus industry), agricultural uncertainty, health epidemics or pandemics or other contagious outbreaks, labor shortages or changes in availability of our or our business partners’ workforce, strikes or work stoppages (including by railway workers or other third parties involved in the manufacture, production and distribution of our products), governmental incentives and controls and import/export restrictions, such as new, expanded or retaliatory tariffs, sanctions, quotas or trade barriers (including recent U.S. tariffs imposed or threatened to be imposed on China, Canada and Mexico and other countries and any retaliatory actions taken by such countries), port congestions or delays, transport capacity constraints, cybersecurity incidents or other disruptions, loss or impairment of key manufacturing sites, political uncertainties, geopolitical events and tensions, wars and other military conflicts (including the ongoing conflicts in Ukraine and the Middle East), acts of terrorism, governmental instability or currency exchange rates.
The raw materials and other supplies, including agricultural commodities, fuel and packaging materials, such as recycled PET, transportation, labor and other supply chain inputs that we use for the manufacturing, production and distribution of our products are subject to price volatility and fluctuations in availability caused by many factors, including changes in supply and demand, supplier capacity constraints, inflation, weather conditions (including potential effects of climate change), fire, natural disasters, disease or pests (including the impact of greening disease on the citrus industry), agricultural uncertainty, health epidemics or pandemics or other contagious outbreaks, labor shortages or changes in availability of our or our business partners’ workforce, strikes or work stoppages (including by railway workers or other third parties involved in the manufacture, production and distribution of our products), governmental incentives and controls and import/export restrictions, such as new, expanded or retaliatory tariffs, sanctions, quotas or trade barriers, port congestions or delays, transport capacity constraints, cybersecurity incidents or other disruptions, loss or impairment of key manufacturing sites, political uncertainties, geopolitical events and tensions, wars and other military conflicts, acts of terrorism, governmental instability or currency exchange rates.
Certain jurisdictions have imposed or are considering imposing color-coded labeling requirements where colors such as red, yellow and green are used to indicate various levels of a particular ingredient, such as sugar, sodium or saturated fat, in products, and other jurisdictions, including the U.S., are evaluating restrictions on “ultra-processed” foods.
Certain jurisdictions have imposed or are considering imposing color-coded labeling requirements where colors such as red, yellow and green are used to indicate various levels of a particular ingredient, such as sugar, sodium or saturated fat, in products, and other jurisdictions, including the United States, have imposed or are considering imposing restrictions on so-called “ultra-processed” foods.
Any perception or allegation (whether or not valid) of failure to maintain adequate oversight over product quality or safety can result in product recalls, litigation, government investigations, inspections or inquiries or civil or criminal proceedings, all of which may result in fines, penalties, damages or criminal liability.
Any perception or allegation (whether or not valid) of failure to maintain adequate oversight over product quality or safety can result in product recalls, litigation, government investigations, inspections or inquiries or civil or criminal proceedings, all of which may result in fines, penalties, damages, criminal liability, damage to our reputation or changes in consumer demand.
The results of elections, referendums or other political conditions (including government shutdowns), geopolitical events and tensions, wars and other military conflicts (such as the ongoing conflicts in Ukraine and the Middle East) in these markets have in the past impacted and could continue to impact how existing laws, regulations and government programs or policies are implemented or result in uncertainty as to how such laws, regulations, programs or policies may change, including with respect to the negotiation of new trade agreements, new, expanded or retaliatory tariffs against certain countries or covering certain products or ingredients (including recent U.S. tariffs imposed or threatened to be imposed on China, Canada and Mexico and other countries and any retaliatory actions taken by such countries), sanctions, environmental and climate change regulations, taxes, benefit programs, the movement of goods, services and people between countries, relationships between countries, customer or consumer perception of a particular country or its government and other matters.
The results of elections, referendums or other political conditions (including government shutdowns), geopolitical events and tensions, wars and other military conflicts (such as the ongoing conflict in Ukraine and recent intervention in Venezuela) in these markets have in the past impacted and could continue to impact how existing laws, regulations and government programs or policies are implemented or result in uncertainty as to how such laws, regulations, programs or policies may change, including with respect to the negotiation of new trade agreements, new, expanded or retaliatory tariffs against certain countries or covering certain products or ingredients (including U.S. tariffs imposed or threatened to be imposed on China, the European Union, Canada and Mexico and other countries and any retaliatory actions taken by such countries), sanctions, environmental and climate change regulations, taxes, benefit programs (including any changes to governmental subsidies provided to our consumers such as SNAP in the United States), the movement of goods, services and people between countries, relationships between countries, customer or consumer perception of a particular country or its government and other matters.
In addition, our business operations, including our supply chain, are subject to disruption by geopolitical events and tensions, wars and other military conflicts, natural disasters, pandemics, epidemics or other events beyond our control that could negatively impact product availability and decrease demand for our products if our crisis management plans do not effectively mitigate these issues. 12 Table of Contents Damage to our reputation or brand image can adversely affect our business.
In addition, our business operations, including our supply chain, are subject to disruption by geopolitical events and tensions, wars and other military conflicts, natural disasters, pandemics, epidemics or other events beyond 11 Table of Contents our control that could negatively impact product availability and decrease demand for our products if our crisis management plans do not effectively mitigate these issues.
These laws and regulations have in the past increased and could continue to increase the cost of our products, impact demand for our products, result in negative publicity and require us and our business partners, including our independent bottlers, to increase capital expenditures to invest in reducing the amount of virgin plastic or other materials used in our packaging, to develop alternative packaging or to revise product labeling, all of which can adversely affect our business and financial performance.
These laws and regulations have in the past increased and could continue to increase the cost of our products, impact demand for our products, result in negative publicity and require us and our business partners, including our independent bottlers, to increase capital expenditures to invest in reducing the amount of virgin plastic or other materials used in our packaging, to develop alternative packaging or to revise product labeling, all of which can adversely affect our business and financial performance. 22 Table of Contents Failure to comply with personal data protection and privacy laws can adversely affect our business.
Pandemics, epidemics or other disease outbreaks and geopolitical events and tensions, wars and other military conflicts, including the ongoing conflicts in Ukraine and the Middle East, have also impacted and could continue to impact consumer preferences and demand for our products, including negative consumer sentiment toward non-local products.
Pandemics, epidemics or other disease outbreaks and geopolitical events and tensions, wars and other military conflicts have also impacted and could continue to impact consumer preferences and demand for our products, including negative consumer sentiment toward non-local products.
A deterioration in our underlying assumptions, or those of our equity method investees, regarding the impact of competitive operating conditions, geopolitical conditions (including the ongoing conflicts in Ukraine and the Middle East), macroeconomic conditions, including the interest rate environment, or other factors used to estimate the future performance of any of our reporting units or assets, including any deterioration in the weighted-average cost of capital based on market data available at the time, as well as our ability to hold the investment until recovery of fair value to amortized cost for available-for-sale debt securities, have resulted and could in the future result in an impairment charge (including the impairments of our investment in TBG), thereby adversely affecting our results of operations. 21 Table of Contents Fluctuations in exchange rates impact our financial performance.
A deterioration in our underlying assumptions, or those of our equity method investees, regarding the impact of competitive operating conditions, geopolitical conditions, macroeconomic conditions, including the interest rate environment, or other factors used to estimate the future performance of any of our reporting units or assets, including any deterioration in the weighted-average cost of capital based on market data available at the time, as well as our ability to hold the investment until recovery of fair value to amortized cost for available-for-sale debt securities, have resulted and could in the future result in an impairment charge, thereby adversely affecting our results of operations.
Our inability to resolve a significant dispute with any of our key customers, a change in the business condition (financial or otherwise) of any of our key customers, even if unrelated to us, a significant reduction in sales to any key customer, or the loss of any of our key customers has adversely affected and c an continue to adversely affect our business.
A change in the business conditions (financial or otherwise) of any of our key customers, even if unrelated to us, a significant reduction in sales to any key customer, or the loss of any of our key customers has adversely affected and c an continue to adversely affect our business.
The success of these transactions, including our recent acquisition of Garza Food Ventures LLC (Siete), is dependent upon, among other things, our ability to realize the full extent of the expected returns, benefits, cost savings or synergies as a result of a transaction, within the anticipated time frame, or at all; and receipt of necessary consents, clearances and approvals.
The success of these transactions is dependent upon, among other things, our ability to realize the full extent of the expected returns, benefits, cost savings or synergies as a result of a transaction, within the anticipated time frame, or at all; and receipt of necessary consents, clearances and approvals.
The imposition of new laws, changes in laws or regulatory requirements or changing interpretations thereof, changes in the enforcement priorities of regulators, and differing or competing regulations and standards across the markets where our products or raw materials are made, manufactured, distributed or sold, have in the past and could continue to result in higher compliance costs, capital expenditures and higher production costs, or make it necessary for us to reformulate certain of our products, resulting in adverse effects on our business.
The imposition of new laws or regulatory requirements (including sanctions), changes in laws or regulatory requirements or changing interpretations or uncertainty regarding the interpretation thereof (including as a result of executive orders), changes in the enforcement priorities of regulators, and differing or competing regulations and standards across the markets where our products or raw materials are made, manufactured, distributed or sold, have in the past resulted in and could continue to result in higher compliance costs, capital expenditures and higher production costs, or make it necessary for us to reformulate certain of our products or otherwise make changes to our operations, resulting in adverse effects on our business.
In addition, while we currently maintain insurance coverage that, subject to its terms and conditions, is intended to address costs associated with certain aspects of product recalls, this insurance coverage may not, depending on the specific facts and circumstances surrounding an incident, cover all losses or all types of claims that arise from an incident, or the damage to our reputation or brands that may result from an incident. 13 Table of Contents Any inability to compete effectively can adversely affect our business.
In addition, while we currently maintain insurance coverage that, subject to its terms and conditions, is intended to address costs associated with certain aspects of product recalls, this insurance coverage may not, depending on the specific facts and circumstances surrounding an incident, cover all losses or all types of claims that arise from an incident, or the damage to our reputation or brands that may result from an incident.
Political, social and geopolitical conditions in the markets in which our products are sold have been and could continue to be difficult to predict, resulting in adverse effects on our business.
Political, social and geopolitical conditions can adversely affect our business. The impact from political, social and geopolitical conditions in the markets in which our products are sold has been and could continue to be difficult to predict, resulting in adverse effects on our business.
In addition, increasing governmental attention to certain ingredients or substances present in certain of our products or packaging materials as well as the results of third-party studies (whether or not scientifically valid) purporting to assess the health implications of consumption of such ingredients or substances have resulted in and could continue to result in increased regulatory scrutiny and our being subject to new taxes and regulations or lawsuits that can adversely affect our business.
In addition, increasing governmental attention to processing and certain ingredients or substances present in certain of our products or packaging materials as well as the results of third-party studies (whether or not scientifically valid) purporting to assess the health implications of consumption of such ingredients or substances have resulted in and could continue to result in increased regulatory scrutiny and our being subject to new taxes and regulations or lawsuits that can adversely affect our business. 24 Table of Contents Potential liabilities and costs from litigation, claims, legal or regulatory proceedings, inquiries or investigations can have an adverse impact on our business.
Our business can be adversely affected if we are unable to effectively promote or develop our existing products or introduce and effectively market new products, if we are unable to effectively digitalize our operations and adopt new technologies, including artificial intelligence and data analytics to develop new commercial insights and improve operating efficiencies, if we are unable to continuously strengthen and evolve our capabilities in digital marketing, if our competitors spend more aggressively or effectively than we do, if our competitors are more successful than us in shifting to products that are less effected by the impact of taxes imposed as a result of ingredients contained in such products, or if we are otherwise unable to effectively respond to supply disruptions, pricing pressure (including as a result of commodity inflation) or otherwise compete effectively, and we may be unable to grow or maintain sales or category share or we may need to increase capital, marketing or other expenditures.
Our business can be adversely affected if our strategy is not effective, if we fail to achieve the commercial and financial priorities announced during 2025 to improve our marketplace competitiveness and financial performance, including in our North American businesses, if we are unable to effectively promote or develop our existing products or introduce and effectively market new products (including in response to increased consumer demand for products with certain attributes, functional benefits, ingredients or nutrition profiles), if we are unable to effectively digitalize our operations and adopt new technologies, including artificial intelligence and data analytics to develop new commercial insights and improve operating efficiencies, if we are unable to continuously strengthen and evolve our capabilities in digital marketing, if our competitors spend more aggressively or effectively than we do, if our competitors are more successful than us in shifting to products that are less affected by the impact of taxes imposed as a result of ingredients contained in such products, or if we are otherwise unable to effectively respond to supply disruptions, pricing pressure (including as a result of commodity inflation) or otherwise compete effectively, and we may be unable to grow or maintain sales or category share or we may need to increase capital, marketing or other expenditures.
We continue to identify and implement productivity initiatives that we believe will position our business for long-term sustainable growth by allowing us to achieve a lower cost structure, improve decision-making and operate more efficiently.
We continue to identify and implement productivity and restructuring initiatives that we believe will position our business for long-term sustainable growth, including certain commercial and financial priorities to improve our marketplace competitiveness and financial performance announced during 2025, by allowing us to achieve a lower cost structure, improve decision-making and operate more efficiently.
Fluctuations in exchange rates, including as a result of inflation, central bank monetary policies, currency controls or other currency exchange restrictions or geopolitical instability have had, and could continue to have, an adverse impact on our financial performance.
Given our global operations, we also pay for the ingredients, raw materials and commodities used in our business in numerous currencies. Fluctuations in exchange rates, including as a result of inflation, central bank monetary policies, currency controls or other currency exchange restrictions or geopolitical instability have had, and could continue to have, an adverse impact on our financial performance.
When input prices increase unexpectedly or significantly, we may be unwilling or unable to increase our product prices or unable to effectively hedge against price increases to offset these increased costs without suffering reduced volume, revenue, margins and operating results. Political, social and geopolitical conditions can adversely affect our business.
We continued to experience volatility in our commodity, packaging and transportation costs during 2025, which may continue. When input prices increase unexpectedly or significantly, we may be unwilling or unable to increase our product prices or unable to effectively hedge against price increases to offset these increased costs without suffering reduced volume, revenue, margins and operating results.
Concerns with any of the foregoing could lead consumers to reduce or publicly boycott the purchase or consumption of our products.
Concerns with any of the foregoing have affected and may continue to affect consumer behaviors and can lead consumers to reduce or publicly boycott the purchase or consumption of our products.
The increasing power of retailers and consolidation may also adversely impact our other customers’ ability to compete effectively in the market in which they operate, which may in turn affect orders of our products. Further, we must maintain mutually beneficial relationships with our key customers to compete effectively.
These changing conditions may also adversely impact how our customers compete in the markets in which they operate, which may in turn affect purchasing patterns of our products. Further, we must maintain mutually beneficial relationships with our key customers to compete effectively.
Certain countries, including European Union member states, have enacted or are expected to enact legislation incorporating the global minimum tax with effect from 2024 and widespread implementation of a global minimum tax is expected by the end of 2025.
Numerous countries, including European Union member states, have enacted or are expected to enact legislation incorporating the Organization for Economic Co-operation and Development (OECD) model rules for a global minimum tax rate of 15% with widespread implementation expected by the end of 2026.
These laws and regulations may be interpreted and applied differently from country to country or, within the United States, from state to state, and can create inconsistent or conflicting requirements.
We are subject to a variety of continuously evolving and developing laws and regulations in numerous jurisdictions regarding personal data protection and privacy laws. These laws and regulations may be interpreted and applied differently from country to country or, within the United States, from state to state, and can create inconsistent or conflicting requirements.
In this changing retail landscape, retailers and buying groups have impacted and may continue to impact our ability to compete in these jurisdictions by demanding lower prices or increased promotional programs, removing our products or otherwise reducing shelf space allocated to our products and focusing on introducing and developing private-label brands.
In this changing retail landscape, retailers and buying groups are shifting traditional value propositions, removing our products or otherwise reducing shelf space allocated to our products and focusing on introducing and developing private-label brands.
Because our consolidated financial statements are presented in U.S. dollars, the financial statements of our subsidiaries outside the United States, where the functional currency is other than the U.S. dollar, are translated into U.S. dollars. Given our global operations, we also pay for the ingredients, raw materials and commodities used in our business in numerous currencies.
Fluctuations in exchange rates impact our financial performance. Because our consolidated financial statements are presented in U.S. dollars, the financial statements of our subsidiaries outside the United States, where the functional currency is other than the U.S. dollar, are translated into U.S. dollars.
In addition, our business can be adversely affected if we are unable to profitably expand our own direct-to-consumer e-commerce capabilities.
In addition, our business can be adversely affected if we are unable to profitably expand direct-to-consumer e-commerce capabilities. Changing dynamics at the retail level have also impacted and may continue to impact our ability to grow in certain jurisdictions.
Many of our raw materials and supplies are purchased in the open market and the prices we pay for such items are subject to fluctuation. Even as certain inflationary pressures moderated, we continued to experience volatility in our commodity, packaging and transportation costs during 2024, which may continue.
The impact of tariffs will continue to vary, including based on where inputs are sourced from and shipped to. Many of our raw materials and supplies are purchased in the open market and the prices we pay for such items are subject to fluctuation.
Maintaining a positive reputation globally is critical to selling our products.
Damage to our reputation or brand image can adversely affect our business. Maintaining a positive reputation globally is important to our business.
Removed
The retail industry is also impacted by the actions and increasing power of retailers, including as a result of increased consolidation of ownership resulting in large retailers or buying groups with increased purchasing power, particularly in North America, Europe and Latin America.
Added
These risks could be heightened in light of new or evolving regulations, changes to our portfolio (including increased use of functional or other ingredients), aging infrastructure, and increased pressure on our suppliers from supply chain disruptions.
Removed
In addition, the increase in certain of our employees working remotely has resulted in increased demand on our information technology infrastructure, which can be 17 Table of Contents subject to failure, disruption or unavailability, and increased vulnerability to cyberattacks and other cyber incidents.
Added
Any inability to compete effectively can adversely affect our business.
Removed
For example, Italy enacted a flat tax on all non-alcoholic beverages, effective July 1, 2025, at a rate of 0.10 Euro (0.11 U.S. dollars) per liter for drinks with a sweetener content higher than 25g per liter.
Added
In addition, the imposition of tariffs (including U.S. tariffs imposed or threatened to be imposed on China, the European Union, Canada and Mexico and other countries and any tariffs imposed by such countries) have impacted and could continue to impact our supply chain resulting in increased input costs, including the cost of certain raw materials and packaging.
Removed
For example, in 2023 the U.K. restricted promotion and in-store placement of high in fat, sugar or salt products and in 2024, the state of California enacted a regulation banning artificial colors in products sold in K-12 public schools effective in 2027.
Added
For example, Mexico recently enacted an increase to its existing flat tax on all sweetened beverages, effective January 1, 2026, from a rate of approximately $0.09 (1.64 Mexican pesos) to a rate of approximately $0.17 (3.08 Mexican pesos) per liter.
Removed
For example, the European Union, Peru, South Africa and certain states in the United States, among other jurisdictions, have imposed a minimum recycled content requirement for beverage bottle packaging and similar legislation is under consideration in other jurisdictions.
Added
For example, in 2025, the state of Texas passed a law, effective January 1, 2027, requiring warning labels on products containing certain ingredients, including artificial colors.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur enterprise risk management team collaborates with our Information Security function, led by the Company’s Chief Strategy and Transformation Officer and the Company’s Chief Information Security Officer, to gather insights for identifying, assessing and managing cybersecurity threat risks, their severity, and potential mitigations.
Biggest changeOur enterprise risk management team collaborates with our Cybersecurity function, led by the Company’s Chief Strategy and Transformation Officer and the Company’s Chief Information Security Officer, to gather insights for identifying, assessing and managing cybersecurity threat risks, their severity, and potential mitigations. We assess PepsiCo’s Cybersecurity program using an industry-leading cybersecurity framework from the National Institute of Standards and Technology.
These members of management are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan. 27 Table of Contents
These members of management are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, including the operation of our incident response plan. 26 Table of Contents
Our processes also address cybersecurity risks associated with our use of third-party service providers including suppliers, software and cloud-based service providers. We proactively evaluate the cybersecurity risk of a third party by utilizing a repository of risk assessments, external monitoring sources, threat intelligence and predictive analytics to better inform PepsiCo during contracting and vendor selection processes.
Our processes also address cybersecurity risks associated with our use of third-party service providers including suppliers, software and cloud-based service providers. We proactively evaluate the cybersecurity risk of a third party by utilizing a repository of risk assessments, external monitoring 25 Table of Contents sources, threat intelligence and predictive analytics to better inform PepsiCo during contracting and vendor selection processes.
Based on the information we have as of the date of this Form 10-K, we do not believe any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially 26 Table of Contents affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. See “Item 1A.
Based on the information we have as of the date of this Form 10-K, we do not believe any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. See “Item 1A.
Removed
We assess PepsiCo’s Information Security program using an industry-leading cybersecurity framework from the National Institute of Standards and Technology.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSignificant properties by division are as follows: Property Type Location Owned/ Leased FLNA Research and development facility Plano, Texas Owned QFNA Convenient food plant Cedar Rapids, Iowa Owned PBNA Research and development facility Valhalla, New York Owned PBNA Concentrate plant Arlington, Texas Owned LatAm Convenient food plant Celaya, Mexico Owned LatAm Two convenient food plants Vallejo, Mexico Owned Europe Convenient food plant Leicester, United Kingdom Owned (a) Europe Convenient food plant Kashira, Russia Owned Europe Manufacturing plant Lehavim, Israel Owned Europe Dairy plant Moscow, Russia Owned AMESA Convenient food plant Riyadh, Saudi Arabia Owned (a) APAC Convenient food plant Shanghai, China Owned (a) FLNA, QFNA, PBNA, LatAm, Corporate Shared service center Mexico City, Mexico Leased PBNA, LatAm Concentrate plant Colonia, Uruguay Owned (a) PBNA, Europe, AMESA Two concentrate plants Cork, Ireland Owned PBNA, AMESA, APAC Concentrate plant Singapore Owned (a) All divisions Shared service center Hyderabad, India Leased (a) The land on which these properties are located is leased.
Biggest changeSignificant properties by segment are as follows: Property Type Location Owned/ Leased PFNA Research and development facility Plano, Texas Owned PFNA Convenient food plant Cedar Rapids, Iowa Owned PBNA Research and development facility Valhalla, New York Owned PBNA Concentrate plant Arlington, Texas Owned IB Franchise Manufacturing plant Lehavim, Israel Owned EMEA Convenient food plant Leicester, United Kingdom Owned (a) EMEA Convenient food plant Kashira, Russia Owned EMEA Dairy plant Moscow, Russia Owned LatAm Foods Convenient food plant Celaya, Mexico Owned LatAm Foods Two convenient food plants Vallejo, Mexico Owned PBNA, IB Franchise Concentrate plant Colonia, Uruguay Owned (a) PBNA, IB Franchise, EMEA Two concentrate plants Cork, Ireland Owned PBNA, IB Franchise, EMEA Concentrate plant Singapore Owned (a) All segments Shared service center Mexico City, Mexico Leased All segments Shared service center Hyderabad, India Leased (a) The land on which these properties are located is leased.
In connection with making, marketing, distributing and selling our products, each division utilizes manufacturing, processing, bottling and production plants, warehouses, distribution centers, storage facilities, offices, including division headquarters, research and development facilities and other facilities, all of which are either owned or leased.
In connection with making, marketing, distributing and selling our products, each segment utilizes manufacturing, processing, bottling and production plants, warehouses, distribution centers, storage facilities, offices, including segment headquarters, research and development facilities and other facilities, all of which are either owned or leased.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThis matter is pending in the Circuit Court for Baltimore City, Maryland. • 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 (the Los Angeles Matter).
Biggest changeThe court did not opine on the public nuisance claim and stayed the case pending a decision in three cases unrelated to PepsiCo that are before the Maryland Supreme Court. • 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 (the Los Angeles Matter).
We are party to the following litigation asserting claims for public nuisance, deceptive acts or practices in the conduct of business among other related claims allegedly resulting in plastic pollution in certain areas. • On November 15, 2023, the Attorney General of New York, on behalf of the people of the State of New York, filed a lawsuit against PepsiCo, Inc., Frito-Lay, Inc. and Frito-Lay North America, Inc.
We are party to the following litigation asserting claims for public nuisance, and deceptive acts or practices in the conduct of business among other related claims allegedly resulting in plastic pollution in certain areas. • On November 15, 2023, the Attorney General of New York, on behalf of the people of the State of New York, filed a lawsuit against PepsiCo, Inc., Frito-Lay, Inc. and Frito-Lay North America, Inc.
While the results of the NYS Matter, Baltimore Matter, 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 will not have a material adverse effect on our financial condition, results of operations or cash flows. See also “Item 1.
While the results of the NYS Matter, Baltimore Matter, Los Angeles Matter, USVI 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 will not have a material adverse effect on our financial condition, results of operations or cash flows.
Business – Regulatory Matters” and “Item 1A. Risk Factors.”
See also “Item 1. Business – Regulatory Matters” and “Item 1A. Risk Factors.”
On December 9, 2024, the plaintiff filed an appeal to the New York State Supreme Court Appellate Division – Fourth Department. 28 Table of Contents • On June 20, 2024, the Mayor and City Council of Baltimore, Maryland filed a lawsuit against PepsiCo, Inc., Frito-Lay, Inc., Frito-Lay North America, Inc., and several other unrelated parties (the Baltimore Matter).
On December 9, 2024, the plaintiff provided notice that it would appeal to the New York State Supreme Court Appellate Division – Fourth Department and filed its brief before the appellate court on January 6, 2026. • On June 20, 2024, the Mayor and City Council of Baltimore, Maryland filed a lawsuit against PepsiCo, Inc., Frito-Lay, Inc., Frito-Lay North America, Inc., and several other unrelated parties (the Baltimore Matter).
The lawsuits mentioned above do not specify the amount of damages sought and we believe we have strong defenses to each of the respective claims. In addition, we and our subsidiaries are party to a variety of litigation, claims, legal or regulatory proceedings, inquiries and investigations.
In addition, we and our subsidiaries are party to a variety of litigation, claims, legal or regulatory proceedings, inquiries and investigations.
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, where the matter is currently pending.
This lawsuit was filed in the Superior Court of the State of California for Los Angeles County.
Added
On July 21, 2025, the Circuit Court for Baltimore City, Maryland dismissed with prejudice all claims except for public nuisance.
Added
On May 21, 2025, Pepsi Bottling Ventures LLC was dismissed from the suit. • On April 11, 2025, the Commissioner of the Department of Licensing and Consumer Affairs and Government of the United States Virgin Islands filed a lawsuit against PepsiCo, Inc., PepsiCo Caribbean, Inc., and two other unrelated parties (the USVI Matter).
Added
The lawsuit was initially filed in the Superior Court of the United States Virgin Islands, Division of St. Croix. On May 19, 2025, the defendants removed the case to federal court in the United States District Court of the Virgin Islands, Division of St. Croix.
Added
On June 18, 2025, the Government of the United States Virgin Islands filed a motion to remand the case back to the Superior Court. That motion is pending. The lawsuits mentioned above do not specify the amount of damages sought and we believe we have strong defenses to each of the respective claims.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

15 edited+5 added−9 removed10 unchanged
Biggest changeSantilli served as Chief Executive Officer, Latin America from 2019 to 2024. Previously, she served in various leadership positions at PepsiCo Mexico Foods, as President from 2017 to 2019, as Chief Operating Officer from 2016 to 2017 and as Vice President and General Manager from 2011 to 2016.
Biggest changeAthina Kanioura was appointed Chief Executive Officer, PepsiCo Latin America Foods and Executive Vice President, Strategy & Transformation Officer in December 2025. Ms. Kanioura previously served as Executive Vice President and Chief Strategy and Transformation Officer, PepsiCo from 2020 to December 2025. Prior to joining PepsiCo, Ms.
Popovici previously served as President, Russia, Ukraine and CIS (The Commonwealth of Independent States) from 2015 to 2017, and as President, PepsiCo Russia from 2013 to 2015. Mr. Popovici joined PepsiCo in 2011 following PepsiCo’s acquisition of Wimm-Bill-Dann Foods OJSC (WBD) and served as General Manager, WBD Foods Division from 2011 until 2012.
Popovici previously served as President, Russia, Ukraine and CIS (The Commonwealth of Independent States) from 2015 to 2017, and as President, PepsiCo Russia from 2013 to 2015. Mr. Popovici joined PepsiCo in 2011 following PepsiCo’s acquisition of Wimm-Bill-Dann Foods OJSC (WBD) and served as General Manager, WBD Foods Division from 2011 until 2012. Prior to the acquisition, Mr.
Krishnan served as Chief Executive Officer, PepsiCo Beverages North America from February 2024 to January 2025, as Chief Executive Officer, International Beverages and Chief Commercial Officer of PepsiCo from 2022 to February 2024, as Executive Vice President and Chief Commercial Officer, PepsiCo, from 2019 to 2021, as President and Chief Executive Officer of PepsiCo’s Asia Pacific, Australia and New Zealand and China Region from 2018 to 2020, and as PepsiCo’s Senior Vice President and Chief Customer Officer for Walmart, leading PepsiCo’s global Walmart customer team, from 2016 to 2017.
Beverages from January 2025 to December 2025, as Chief Executive Officer, PepsiCo Beverages North America from February 2024 to January 2025, as Chief Executive Officer, International Beverages and Chief Commercial Officer of PepsiCo from 2022 to February 2024, as Executive Vice President and Chief Commercial Officer, PepsiCo, from 2019 to 2021, as President and Chief Executive Officer of PepsiCo’s Asia Pacific, Australia and New Zealand and China Region from 2018 to 2020, and as PepsiCo’s Senior Vice President and Chief Customer Officer for Walmart, leading PepsiCo’s global Walmart customer team, from 2016 to 2017.
Mr. Krishnan joined PepsiCo in 2006 and held marketing roles of increasing responsibility from 2006 to 2016, including as Senior Vice President and Chief Marketing Officer, Frito-Lay North America from 2014 to 2016, as Senior Vice President, Marketing, Frito-Lay North America from 2012 to 2013 and as Vice President of Global Brands, Frito-Lay North America from 2011 to 2012.
Krishnan joined PepsiCo in 2006 and held marketing roles of increasing responsibility from 2006 to 2016, including as Senior Vice President and Chief Marketing Officer, Frito-Lay North America from 2014 to 2016, as Senior Vice President, Marketing, Frito-Lay North America from 2012 to 2013 and 28 Table of Contents as Vice President of Global Brands, Frito-Lay North America from 2011 to 2012.
Before joining PepsiCo in 2011, Mr. Flavell was general counsel for Danone S.A.’s Asia Pacific and Middle East business. Prior to that, Mr. Flavell served as senior legal counsel at Fonterra Co-operative Group Limited and was a partner at Corrs Chambers Westgarth. Marie T. Gallagher was appointed PepsiCo’s Senior Vice President and Controller in 2011. Ms.
Before joining PepsiCo in 2011, Mr. Flavell was general counsel for Danone S.A.’s Asia Pacific and Middle East business. Prior to that, Mr. Flavell served as senior legal counsel at Fonterra Co-operative Group Limited and was a partner at Corrs Chambers Westgarth.
Executive officers are elected by our Board, and their terms of office continue until the next annual meeting of the Board or until their successors are elected and have qualified. There are no family relationships among our executive officers. 31 Table of Contents PART II
Mr. Willemsen joined PepsiCo in 1995 as a business development manager. Executive officers are elected by our Board, and their terms of office continue until the next annual meeting of the Board or until their successors are elected and have qualified. There are no family relationships among our executive officers. 30 Table of Contents PART II
Laguarta worked for Chupa Chups, S.A., where he worked in several international assignments in Asia, Europe, the Middle East and the United States. Mr. Laguarta has served as a director of Visa Inc. since 2019. Silviu Popovici was appointed Chief Executive Officer, Europe, Middle East and Africa, effective January 2025.
Laguarta worked for Chupa Chups, S.A., where he worked in several international assignments in Asia, Europe, the Middle East and the United States. Mr. Laguarta was elected to the board of directors of International Business Machines Corporation effective March 1, 2026. Silviu Popovici was appointed Chief Executive Officer, Europe, Middle East and Africa, effective January 2025.
Prior to joining Walmart, Ms. Schmitt spent over 20 years with Accenture plc in multiple senior human resources roles globally. Eugene Willemsen was appointed Chief Executive Officer, International Franchise Beverages, effective January 2025.
Prior to joining Walmart, Ms. Schmitt spent over 20 years with Accenture plc in multiple senior human resources roles globally. Stephen T. Schmitt was appointed Executive Vice President and Chief Financial Officer, effective November 2025. Prior to that, Mr.
Flavell has served as Executive Vice President, General Counsel and Corporate Secretary, PepsiCo since 2021. Mr.
Tammara 48 Senior Vice President and Controller, PepsiCo Eugene Willemsen 58 Chief Executive Officer, International Beverages David J. Flavell has served as Executive Vice President, General Counsel and Corporate Secretary, PepsiCo since 2021. Mr.
Item 4. Mine Safety Disclosures. Not applicable. Information About Our Executive Officers The following is a list of names, ages and backgrounds of our current executive officers: Name Age Title James T. Caulfield 65 Executive Vice President and Chief Financial Officer, PepsiCo David J. Flavell 53 Executive Vice President, General Counsel and Corporate Secretary, PepsiCo Marie T.
Item 4. Mine Safety Disclosures. Not applicable. 27 Table of Contents Information About Our Executive Officers The following is a list of names, ages and backgrounds of our current executive officers as of the date of filing of this Form 10-K with the SEC: Name Age Title David J.
Laguarta 61 Chairman of the Board of Directors and Chief Executive Officer, PepsiCo Silviu Popovici 57 Chief Executive Officer, Europe, Middle East and Africa Paula Santilli 60 Chief Executive Officer, Latin America Foods Becky Schmitt 51 Executive Vice President and Chief People Officer, PepsiCo Eugene Willemsen 57 Chief Executive Officer, International Franchise Beverages Steven Williams 59 Chief Executive Officer, North America James T.
Laguarta 62 Chairman of the Board of Directors and Chief Executive Officer, PepsiCo Silviu Popovici 58 Chief Executive Officer, Europe, Middle East and Africa Becky Schmitt 52 Executive Vice President and Chief People Officer, PepsiCo Stephen T. Schmitt 52 Executive Vice President and Chief Financial Officer, PepsiCo Christine E.
Prior to the 30 Table of Contents acquisition, Mr. Popovici held senior leadership roles at WBD, running its dairy business from 2008 to 2011 and its beverages business from 2006 to 2008. Paula Santilli was appointed Chief Executive Officer, Latin America Foods, effective January 2025. Prior to this role, Ms.
Popovici held senior leadership roles at WBD, running its dairy business from 2008 to 2011 and its beverages business from 2006 to 2008. Becky Schmitt has served as Executive Vice President and Chief People Officer, PepsiCo, since June 2023. Prior to that, Ms.
Caulfield has served as Executive Vice President and Chief Financial Officer, PepsiCo, since November 2023.
Schmitt served as Executive Vice President and Chief Financial Officer for Walmart U.S. from 2021 to November 2025, as Executive Vice President and Chief Financial Officer for Walmart U.S.
Mr. Willemsen joined PepsiCo in 1995 as a business development manager. Steven Williams was appointed Chief Executive Officer, North America, effective January 2025. Prior to this role, Mr. Williams served as Chief Executive Officer, PepsiCo Foods North America from 2019 to 2024. Previously, Mr.
Ram Krishnan was appointed Chief Executive Officer, PepsiCo North America, effective December 2025. Prior to that, Mr. Krishnan served as Chief Executive Officer, U.S.
Gallagher 65 Senior Vice President and Controller, PepsiCo Ram Krishnan 54 Chief Executive Officer, U.S. Beverages Ramon L.
Flavell 54 Executive Vice President, General Counsel and Corporate Secretary, PepsiCo Athina Kanioura 49 Chief Executive Officer, PepsiCo Latin America Foods and Executive Vice President, Strategy & Transformation Officer Ram Krishnan 55 Chief Executive Officer, PepsiCo North America Ramon L.
Removed
Prior to that, he served as Senior Vice President and Chief Financial Officer, PepsiCo Foods North America from 2019 to November 2023, as PepsiCo’s Senior Vice President, Investor Relations from 2010 to 2019, as Senior Vice President and Chief Financial Officer, PepsiCo Beverages Canada from 2010 to 2011, as Vice President, Corporate Strategy and Development from 2007 to 2010, Vice President, Investor Relations from 2005 to 2007 and as Vice President, Financial Planning and Analysis from 2000 to 2005.
Added
Kanioura served as Chief Analytics Officer and Global Head of Applied Intelligence at Accenture plc from 2019 to 2020 and as its Global Data Science Lead from 2017 to 2019. Since she joined Accenture in 2005, she held positions of increasing responsibility, including as Global Marketing and Commercial Analytics Lead.
Removed
He also held a variety of senior finance roles in Frito-Lay North America from 1995 to 2000 and was Director, Corporate Audit from 1993 to 1995. Prior to joining PepsiCo in 1993, Mr. Caulfield was a partner at the accounting firm Coopers & Lybrand. 29 Table of Contents David J.
Added
Omni-Channel during 2021, as Senior Vice President and Chief Financial Officer for Walmart U.S. eCommerce from 2019 to 2020 and as Senior Vice President and Chief Financial Officer for Sam’s Club from 2018 to 2019. Before these roles, Mr. Schmitt served in investor relations after joining Walmart in 2016. Prior to joining Walmart, Mr.
Removed
Gallagher joined PepsiCo in 2005 as Vice President and Assistant Controller. Prior to joining PepsiCo, Ms. Gallagher was Assistant Controller at Altria Corporate Services from 1992 to 2005 and, prior to that, a senior manager at Coopers & Lybrand. As previously announced, Ms. Gallagher will retire from PepsiCo, effective May 3, 2025. Ram Krishnan was appointed Chief Executive Officer, U.S.
Added
Schmitt held a variety of roles at Yum! Brands from 2006 to 2016. Christine E. Tammara was appointed Senior Vice President and Controller, PepsiCo effective May 2025. Prior to that, Ms.
Removed
Beverages, effective January 2025. Prior to that, Mr.
Added
Tammara served as Senior Vice President, Controller, PepsiCo Beverages North America from 2023 to May 2025, as Senior Vice President and General Auditor from 2021 to 2023 and as Vice President and Assistant Controller, Technical Accounting and Policy from 2016 to 2021 and held a succession of roles in PepsiCo’s Control function. Prior to joining PepsiCo in 2007, Ms.
Removed
Prior to joining PepsiCo Mexico Foods, she held a variety of roles, including leadership positions in Beverages in Mexico, as well as in Foods and Snacks in the Latin America Southern Cone region comprising Argentina, Uruguay and Paraguay. Ms. Santilli joined PepsiCo in 2001 following PepsiCo’s acquisition of the Quaker Oats Company.
Added
Tammara worked in external reporting at Reader’s Digest Association, Inc. and as an audit manager for PricewaterhouseCoopers LLP. 29 Table of Contents Eugene Willemsen was appointed Chief Executive Officer, International Beverages, effective January 2025.
Removed
At Quaker, she held various roles of increasing responsibility from 1992 to 2001, including running the regional Quaker Foods and Gatorade businesses in Argentina, Chile and Uruguay. Becky Schmitt was appointed Executive Vice President and Chief People Officer, PepsiCo, in June 2023. Prior to that, Ms.
Removed
Williams served in leadership positions for Frito-Lay’s U.S. operations, as Senior Vice President, Commercial Sales and Chief Commercial Officer from 2017 to 2019 and as General Manager and Senior Vice President, East Division from 2016 to 2017.
Removed
Prior to that, he served as General Manager and Senior Vice President, Customer Management for PepsiCo’s global Walmart business from 2013 to 2016, as Sales Senior Vice President, North American Nutrition from 2011 to 2013 and as Vice President, Sales, Central Division from 2009 to 2011. Mr.
Removed
Williams joined PepsiCo in 2001 as a part of PepsiCo’s acquisition of the Quaker Oats Company, which he joined in 1997 and has held leadership positions of increasing responsibility in sales and customer management.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−0 removed1 unchanged
Biggest changeIssuer 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 9/7/2024 $ 6,738 9/8/2024-10/5/2024 0.7 $ 172.85 0.7 (121) 6,617 10/6/2024-11/2/2024 0.2 $ 171.08 0.2 (36) 6,581 11/3/2024-11/30/2024 0.3 $ 162.42 0.3 (51) 6,530 12/1/2024-12/28/2024 0.2 $ 159.84 0.2 (30) Total 1.4 $ 168.51 1.4 $ 6,500 (a) All shares were repurchased in open market transactions pursuant to the $10 billion repurchase program authorized by our Board and publicly announced on February 10, 2022, which commenced on February 11, 2022 and will expire on February 28, 2026.
Biggest changeIssuer 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 9/6/2025 $ 5,740 9/7/2025-10/4/2025 0.7 $ 141.35 0.7 (97) 5,643 10/5/2025-11/1/2025 0.4 $ 149.10 0.4 (61) 5,582 11/2/2025-11/29/2025 0.3 $ 145.16 0.3 (50) 5,532 11/30/2025-12/27/2025 0.2 $ 147.53 0.2 (32) Total 1.6 $ 144.88 1.6 $ 5,500 (a) All shares were repurchased in open market transactions pursuant to the $10 billion repurchase program authorized by our Board and publicly announced on February 10, 2022, which commenced on February 11, 2022 and was originally set to expire on February 28, 2026.
For information on securities authorized for issuance under our equity compensation plans, see “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” A summary of our common stock repurchases (in millions, except average price per share) during the fourth quarter of 2024 is set forth in the table below.
For information on securities authorized for issuance under our equity compensation plans, see “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.” A summary of our common stock repurchases (in millions, except average price per share) during the fourth quarter of 2025 is set forth in the table below.
Dividends are usually declared in February, May, July and November and paid at the end of March, June and September and the beginning of January. For 2025, the record dates for these dividend payments are expected to be March 7, June 6, September 5 and December 5, 2025, subject to the approval of the Board.
Dividends are usually declared in February, May, July and November and paid at the end of March, June and September and the beginning of January. For 2026, the record dates for these dividend payments are expected to be March 6, June 5, September 4 and December 4, 2026, subject to the approval of the Board.
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.
On February 3, 2026, we announced a 4% increase in our annualized dividend to $5.92 per share from $5.69 per share, effective with the dividend expected to be paid in June 2026. We expect to return a total of approximately $8.9 billion to shareholders in 2026, comprising dividends of approximately $7.9 billion and share repurchases of approximately $1.0 billion.
Shareholders – As of January 28, 2025, there were approximately 91,097 shareholders of record of our common stock. Dividends – We have paid consecutive quarterly cash dividends since 1965. The declaration and payment of future dividends are at the discretion of the Board.
Shareholders – As of January 23, 2026, there were approximately 87,254 shareholders of record of our common stock. Dividends – We have paid consecutive quarterly cash dividends since 1965. The declaration and payment of future dividends are at the discretion of the Board.
Shares repurchased under this program may be repurchased in open market transactions, in privately negotiated transactions, in accelerated stock repurchase transactions or otherwise. 32 Table of Contents
The 2026 Share Repurchase Program replaced and superseded the existing share repurchase program. Shares repurchased under the 2026 Share Repurchase Program may be repurchased in open market transactions, in privately negotiated transactions, in accelerated stock repurchase transactions or otherwise. 31 Table of Contents
Added
On February 3, 2026, we announced a new share repurchase program providing for the repurchase of up to $10 billion of PepsiCo common stock which commenced on February 1, 2026 and will expire on February 28, 2030 (2026 Share Repurchase Program), and such shares are excluded from the above table.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

332 edited+77 added−111 removed208 unchanged
Biggest changeSee Note 7 to our consolidated financial statements for our past and expected contributions and estimated future benefit payments. 60 Table of Contents Consolidated Statement of Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022 (in millions except per share amounts) 2024 2023 2022 Net Revenue $ 91,854 $ 91,471 $ 86,392 Cost of sales 41,744 41,881 40,576 Gross profit 50,110 49,590 45,816 Selling, general and administrative expenses 37,190 36,677 34,459 Gain associated with the Juice Transaction (see Note 13) — — (3,321) Impairment of intangible assets (see Notes 1 and 4) 33 927 3,166 Operating Profit 12,887 11,986 11,512 Other pension and retiree medical benefits (expense)/income (22) 250 132 Net interest expense and other (919) (819) (939) Income before income taxes 11,946 11,417 10,705 Provision for income taxes 2,320 2,262 1,727 Net income 9,626 9,155 8,978 Less: Net income attributable to noncontrolling interests 48 81 68 Net Income Attributable to PepsiCo $ 9,578 $ 9,074 $ 8,910 Net Income Attributable to PepsiCo per Common Share Basic $ 6.97 $ 6.59 $ 6.45 Diluted $ 6.95 $ 6.56 $ 6.42 Weighted-average common shares outstanding Basic 1,373 1,376 1,380 Diluted 1,378 1,383 1,387 See accompanying notes to the consolidated financial statements. 61 Table of Contents Consolidated Statement of Comprehensive Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022 (in millions) 2024 2023 2022 Net income $ 9,626 $ 9,155 $ 8,978 Other comprehensive loss, net of taxes: Net currency translation adjustment (1,962) (307) (643) Net change on cash flow hedges 113 (32) (158) Net pension and retiree medical adjustments 5 (358) 389 Net change on available-for-sale debt securities and other (234) 465 4 Total other comprehensive loss, net of taxes (2,078) (232) (408) Comprehensive income 7,548 8,923 8,570 Less: Comprehensive income attributable to noncontrolling interests 48 81 64 Comprehensive Income Attributable to PepsiCo $ 7,500 $ 8,842 $ 8,506 See accompanying notes to the consolidated financial statements. 62 Table of Contents Consolidated Statement of Cash Flows PepsiCo, Inc. and Subsidiaries Fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022 (in millions) 2024 2023 2022 Operating Activities Net income $ 9,626 $ 9,155 $ 8,978 Depreciation and amortization 3,160 2,948 2,763 Gain associated with the Juice Transaction — — (3,321) Impairment and other charges 714 1,230 3,618 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 655 570 517 Share-based compensation expense 362 380 343 Restructuring and impairment charges 727 445 411 Cash payments for restructuring charges (436) (434) (224) Pension and retiree medical plan expense 414 150 419 Pension and retiree medical plan contributions (348) (410) (384) Deferred income taxes and other tax charges and credits (42) (271) (873) Tax expense related to the TCJ Act — — 86 Tax payments related to the TCJ Act (579) (309) (309) Change in assets and liabilities: Accounts and notes receivable (138) (793) (1,763) Inventories (314) (261) (1,142) Prepaid expenses and other current assets 40 (13) 118 Accounts payable and other current liabilities (1,161) 420 1,842 Income taxes payable (123) 310 57 Other, net (307) 189 (325) Net Cash Provided by Operating Activities 12,507 13,442 10,811 Investing Activities Capital spending (5,318) (5,518) (5,207) Sales of property, plant and equipment 342 198 251 Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets (256) (314) (873) Proceeds associated with the Juice Transaction — — 3,456 Other divestitures, sales of investments in noncontrolled affiliates and other assets 166 75 49 Short-term investments, by original maturity: More than three months - purchases (425) (555) (291) More than three months - maturities — 556 150 More than three months - sales — 12 — Three months or less, net 5 3 24 Other investing, net 14 48 11 Net Cash Used for Investing Activities (5,472) (5,495) (2,430) (Continued on following page) 63 Table of Contents Consolidated Statement of Cash Flows (continued) PepsiCo, Inc. and Subsidiaries Fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022 (in millions) 2024 2023 2022 Financing Activities Proceeds from issuances of long-term debt $ 4,042 $ 5,482 $ 3,377 Payments of long-term debt (3,886) (3,005) (2,458) Debt redemptions — — (1,716) Short-term borrowings, by original maturity: More than three months - proceeds 5,786 5,428 1,969 More than three months - payments (5,639) (3,106) (1,951) Three months or less, net 392 (29) (31) Cash dividends paid (7,229) (6,682) (6,172) Share repurchases (1,000) (1,000) (1,500) Proceeds from exercises of stock options 166 116 138 Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted (135) (140) (107) Other financing (53) (73) (72) Net Cash Used for Financing Activities (7,556) (3,009) (8,523) Effect of exchange rate changes on cash and cash equivalents and restricted cash (687) (277) (465) Net (Decrease)/Increase in Cash and Cash Equivalents and Restricted Cash (1,208) 4,661 (607) Cash and Cash Equivalents and Restricted Cash, Beginning of Year 9,761 5,100 5,707 Cash and Cash Equivalents and Restricted Cash, End of Year $ 8,553 $ 9,761 $ 5,100 See accompanying notes to the consolidated financial statements. 64 Table of Contents Consolidated Balance Sheet PepsiCo, Inc. and Subsidiaries December 28, 2024 and December 30, 2023 (in millions except per share amounts) 2024 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 1 2 / 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 See accompanying notes to the consolidated financial statements. 65 Table of Contents Consolidated Statement of Equity PepsiCo, Inc. and Subsidiaries Fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022 (in millions except per share amounts) 2024 2023 2022 Shares Amount Shares Amount Shares Amount Common Stock Balance, beginning of year 1,374 $ 23 1,377 $ 23 1,383 $ 23 Change in repurchased common stock (2) — (3) — (6) — Balance, end of year 1,372 23 1,374 23 1,377 23 Capital in Excess of Par Value Balance, beginning of year 4,261 4,134 4,001 Share-based compensation expense 357 379 346 Stock option exercises, RSUs and PSUs converted (90) (107) (102) Withholding tax on RSUs and PSUs converted (135) (140) (107) Other (8) (5) (4) Balance, end of year 4,385 4,261 4,134 Retained Earnings Balance, beginning of year 70,035 67,800 65,165 Net income attributable to PepsiCo 9,578 9,074 8,910 Cash dividends declared (a) (7,347) (6,839) (6,275) Balance, end of year 72,266 70,035 67,800 Accumulated Other Comprehensive Loss Balance, beginning of year (15,534) (15,302) (14,898) Other comprehensive loss attributable to PepsiCo (2,078) (232) (404) Balance, end of year (17,612) (15,534) (15,302) Repurchased Common Stock Balance, beginning of year (493) (40,282) (490) (39,506) (484) (38,248) Share repurchases (6) (1,000) (6) (1,000) (9) (1,500) Stock option exercises, RSUs and PSUs converted 4 256 3 223 3 240 Other — 5 — 1 — 2 Balance, end of year (495) (41,021) (493) (40,282) (490) (39,506) Total PepsiCo Common Shareholders’ Equity 18,041 18,503 17,149 Noncontrolling Interests Balance, beginning of year 134 124 108 Net income attributable to noncontrolling interests 48 81 68 Distributions to noncontrolling interests (49) (68) (69) Acquisitions — — 21 Other, net (3) (3) (4) Balance, end of year 130 134 124 Total Equity $ 18,171 $ 18,637 $ 17,273 (a) Cash dividends declared per common share were $5.3300, $4.9450 and $4.5250 for 2024, 2023 and 2022, respectively.
Biggest changeSee Note 7 to our consolidated financial statements for our past and expected contributions and estimated future benefit payments. 56 Table of Contents Consolidated Statement of Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023 (in millions except per share amounts) 2025 2024 2023 Net Revenue $ 93,925 $ 91,854 $ 91,471 Cost of sales 43,066 41,744 41,881 Gross profit 50,859 50,110 49,590 Selling, general and administrative expenses 37,368 37,190 36,677 Impairment of intangible assets (see Notes 1 and 4) 1,993 33 927 Operating Profit 11,498 12,887 11,986 Other pension and retiree medical benefits (expense)/income (133) (22) 250 Net interest expense and other (1,121) (919) (819) Income before income taxes 10,244 11,946 11,417 Provision for income taxes 1,949 2,320 2,262 Net income 8,295 9,626 9,155 Less: Net income attributable to noncontrolling interests 55 48 81 Net Income Attributable to PepsiCo $ 8,240 $ 9,578 $ 9,074 Net Income Attributable to PepsiCo per Common Share Basic $ 6.02 $ 6.97 $ 6.59 Diluted $ 6.00 $ 6.95 $ 6.56 Weighted-average common shares outstanding Basic 1,369 1,373 1,376 Diluted 1,373 1,378 1,383 See accompanying notes to the consolidated financial statements. 57 Table of Contents Consolidated Statement of Comprehensive Income PepsiCo, Inc. and Subsidiaries Fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023 (in millions) 2025 2024 2023 Net income $ 8,295 $ 9,626 $ 9,155 Other comprehensive income/(loss), net of taxes: Net currency translation adjustment 1,723 (1,962) (307) Net change on cash flow hedges 44 113 (32) Net pension and retiree medical adjustments 452 5 (358) Net change on available-for-sale debt securities and other 369 (234) 465 Total other comprehensive income/(loss), net of taxes 2,588 (2,078) (232) Comprehensive income 10,883 7,548 8,923 Less: Comprehensive income attributable to noncontrolling interests 55 48 81 Comprehensive Income Attributable to PepsiCo $ 10,828 $ 7,500 $ 8,842 See accompanying notes to the consolidated financial statements. 58 Table of Contents Consolidated Statement of Cash Flows PepsiCo, Inc. and Subsidiaries Fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023 (in millions) 2025 2024 2023 Operating Activities Net income $ 8,295 $ 9,626 $ 9,155 Depreciation and amortization 3,451 3,160 2,948 Impairment and other charges 1,946 714 1,230 Product recall-related impact — 187 136 Cash payments for product recall-related impact (6) (148) — Operating lease right-of-use asset amortization 727 655 570 Share-based compensation expense 288 362 380 Restructuring and impairment charges 983 727 445 Cash payments for restructuring charges (796) (436) (434) Acquisition and divestiture-related charges 453 22 41 Cash payments for acquisition and divestiture-related charges (228) (18) (41) Pension and retiree medical plan expenses 504 414 150 Pension and retiree medical plan contributions (472) (348) (410) Deferred income taxes and other tax charges and credits 71 (42) (271) Tax payments related to the TCJ Act (772) (579) (309) Change in assets and liabilities: Accounts and notes receivable (580) (138) (793) Inventories (150) (314) (261) Prepaid expenses and other current assets 195 40 (13) Accounts payable and other current liabilities (677) (943) 420 Income taxes payable (433) (123) 310 Other, net (712) (311) 189 Net Cash Provided by Operating Activities 12,087 12,507 13,442 Investing Activities Capital spending (4,415) (5,318) (5,518) Sales of property, plant and equipment 528 342 198 Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets (3,391) (256) (314) Divestitures, sales of investments in noncontrolled affiliates and other assets 39 166 75 Short-term investments, by original maturity: More than three months - purchases (190) (425) (555) More than three months - maturities 605 — 556 More than three months - sales — — 12 Three months or less, net 45 5 3 Other investing, net (100) 14 48 Net Cash Used for Investing Activities (6,879) (5,472) (5,495) (Continued on following page) 59 Table of Contents Consolidated Statement of Cash Flows (continued) PepsiCo, Inc. and Subsidiaries Fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023 (in millions) 2025 2024 2023 Financing Activities Proceeds from issuances of long-term debt $ 8,189 $ 4,042 $ 5,482 Payments of long-term debt (4,082) (3,886) (3,005) Short-term borrowings, by original maturity: More than three months - proceeds 6,391 5,786 5,428 More than three months - payments (7,920) (5,639) (3,106) Three months or less, net 1,170 392 (29) Cash dividends paid (7,638) (7,229) (6,682) Share repurchases (1,000) (1,000) (1,000) Proceeds from exercises of stock options 97 166 116 Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted (113) (135) (140) Other financing (73) (53) (73) Net Cash Used for Financing Activities (4,979) (7,556) (3,009) Effect of exchange rate changes on cash and cash equivalents and restricted cash 422 (687) (277) Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash 651 (1,208) 4,661 Cash and Cash Equivalents and Restricted Cash, Beginning of Year 8,553 9,761 5,100 Cash and Cash Equivalents and Restricted Cash, End of Year $ 9,204 $ 8,553 $ 9,761 See accompanying notes to the consolidated financial statements. 60 Table of Contents Consolidated Balance Sheet PepsiCo, Inc. and Subsidiaries December 27, 2025 and December 28, 2024 (in millions except per share amounts) 2025 2024 ASSETS Current Assets Cash and cash equivalents $ 9,159 $ 8,505 Short-term investments 371 761 Accounts and notes receivable, net 11,506 10,333 Inventories Raw materials and packaging 2,581 2,440 Work-in-process 143 104 Finished goods 3,121 2,762 5,845 5,306 Prepaid expenses and other current assets 1,068 921 Total Current Assets 27,949 25,826 Property, Plant and Equipment, net 29,905 28,008 Amortizable Intangible Assets, net 1,219 1,102 Goodwill 18,916 17,534 Other Indefinite-Lived Intangible Assets 13,847 13,699 Investments in Noncontrolled Affiliates 2,038 1,985 Deferred Income Taxes 4,541 4,362 Other Assets 8,984 6,951 Total Assets $ 107,399 $ 99,467 LIABILITIES AND EQUITY Current Liabilities Short-term debt obligations $ 6,861 $ 7,082 Accounts payable and other current liabilities 25,903 24,454 Total Current Liabilities 32,764 31,536 Long-Term Debt Obligations 42,321 37,224 Deferred Income Taxes 3,802 3,484 Other Liabilities 7,965 9,052 Total Liabilities 86,852 81,296 Commitments and contingencies PepsiCo Common Shareholders’ Equity Common stock, par value 1 2 / 3 ¢ per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1,367 and 1,372 shares, respectively) 23 23 Capital in excess of par value 4,451 4,385 Retained earnings 72,788 72,266 Accumulated other comprehensive loss (15,024) (17,612) Repurchased common stock, in excess of par value 500 and 495 shares, respectively) (41,832) (41,021) Total PepsiCo Common Shareholders’ Equity 20,406 18,041 Noncontrolling interests 141 130 Total Equity 20,547 18,171 Total Liabilities and Equity $ 107,399 $ 99,467 See accompanying notes to the consolidated financial statements. 61 Table of Contents Consolidated Statement of Equity PepsiCo, Inc. and Subsidiaries Fiscal years ended December 27, 2025, December 28, 2024 and December 30, 2023 (in millions except per share amounts) 2025 2024 2023 Shares Amount Shares Amount Shares Amount Common Stock Balance, beginning of year 1,372 $ 23 1,374 $ 23 1,377 $ 23 Change in repurchased common stock (5) — (2) — (3) — Balance, end of year 1,367 23 1,372 23 1,374 23 Capital in Excess of Par Value Balance, beginning of year 4,385 4,261 4,134 Share-based compensation expense 280 357 379 Stock option exercises, RSUs and PSUs converted (92) (90) (107) Withholding tax on RSUs and PSUs converted (113) (135) (140) Other (9) (8) (5) Balance, end of year 4,451 4,385 4,261 Retained Earnings Balance, beginning of year 72,266 70,035 67,800 Net income attributable to PepsiCo 8,240 9,578 9,074 Cash dividends declared (a) (7,718) (7,347) (6,839) Balance, end of year 72,788 72,266 70,035 Accumulated Other Comprehensive Loss Balance, beginning of year (17,612) (15,534) (15,302) Other comprehensive income/(loss) attributable to PepsiCo 2,588 (2,078) (232) Balance, end of year (15,024) (17,612) (15,534) Repurchased Common Stock Balance, beginning of year (495) (41,021) (493) (40,282) (490) (39,506) Share repurchases (7) (1,000) (6) (1,000) (6) (1,000) Stock option exercises, RSUs and PSUs converted 2 189 4 256 3 223 Other — — — 5 — 1 Balance, end of year (500) (41,832) (495) (41,021) (493) (40,282) Total PepsiCo Common Shareholders’ Equity 20,406 18,041 18,503 Noncontrolling Interests Balance, beginning of year 130 134 124 Net income attributable to noncontrolling interests 55 48 81 Distributions to noncontrolling interests (44) (49) (68) Other, net — (3) (3) Balance, end of year 141 130 134 Total Equity $ 20,547 $ 18,171 $ 18,637 (a) Cash dividends declared per common share were $5.6225, $5.3300 and $4.9450 for 2025, 2024 and 2023, respectively.
Financing Activities In 2024, net cash used for financing activities was $7.6 billion, primarily reflecting the return of operating cash flow to our shareholders through dividend payments and share repurchases of $8.2 billion, as well as payments of long-term debt borrowings of $3.9 billion, partially offset by proceeds from the issuances of long-term debt of $4.0 billion.
In 2024, net cash used for financing activities was $7.6 billion, primarily reflecting the return of operating cash flow to our shareholders through dividend payments and share repurchases of $8.2 billion, as well as payments of long-term debt borrowings of $3.9 billion, partially offset by proceeds from the issuances of long-term debt of $4.0 billion.
Through our operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of beverages and convenient foods, serving customers and consumers in more than 200 countries and territories with our largest operations in the United States, Mexico, Russia, Canada, China, the United Kingdom, South Africa and Brazil.
Through our operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of beverages and convenient foods, serving customers and consumers in more than 200 countries and territories with our largest operations in the United States, Mexico, Russia, Canada, China, the United Kingdom, Brazil and South Africa.
The transfer of control of products to our customers is typically based on written sales terms that generally do not allow for a right of return, except in the instance of a product recall or other limited circumstances that may allow for product returns.
The transfer of control of products to our customers is typically based on written sales terms that generally do not allow for a right of return, except in the instance of a product recall or other limited circumstances that may allow for product returns.
We estimate and reserve for our expected credit loss exposure based on our experience with past due accounts and collectibility, write-off history, the aging of accounts receivable, our analysis of customer data, and forward-looking information (including the expected impact of a high interest rate and inflationary cost environment), leveraging estimates of creditworthiness and projections of default and recovery rates for certain of our customers.
We estimate and reserve for our expected credit loss exposure based on our experience with past due accounts and collectibility, write-off history, the aging of accounts receivable, our analysis of customer data, and forward-looking information (including the expected impact of a high interest rate and inflationary cost environment), leveraging estimates of creditworthiness and projections of default and recovery rates for certain of our customers.
Sales incentives and discounts are primarily accounted for as a reduction of revenue and include payments to customers for performing activities on our behalf, such as payments for in-store displays, payments to gain distribution of new products, payments for shelf space and discounts to promote lower retail prices.
Sales incentives and discounts are primarily accounted for as a reduction of revenue and include payments to customers for performing activities on our behalf, such as payments for in-store displays, payments to gain distribution of new products, payments for shelf space and discounts to promote lower retail prices.
A number of our sales incentives, such as bottler funding to independent bottlers and customer volume rebates, are based on annual targets, and accruals are established during the year, as products are delivered, for the expected payout, which may occur after year-end once reconciled and settled.
A number of our sales incentives, such as bottler funding to independent bottlers and customer volume rebates, are based on annual targets, and accruals are established during the year, as products are delivered, for the expected payout, which may occur after year-end once reconciled and settled.
Factors considered include macroeconomic conditions (including those related to volatile geopolitical conditions and a high interest rate and inflationary cost environment), industry and competitive conditions, legal and regulatory environment, historical financial performance and significant changes in the brand or reporting unit.
Factors considered include macroeconomic conditions (including those related to volatile geopolitical conditions and a high interest rate and inflationary cost environment), industry and competitive conditions, legal and regulatory environment, historical financial performance and significant changes in the brand or reporting unit.
All assumptions used in our impairment evaluations for indefinite-lived intangible assets and goodwill, such as forecasted growth rates (including perpetuity growth assumptions) and weighted-average cost of capital, are based on the best available market information and are consistent with our internal forecasts and operating plans. A deterioration in these assumptions could adversely impact our results.
All assumptions used in our impairment evaluations for indefinite-lived intangible assets and goodwill, such as forecasted growth rates (including perpetuity growth assumptions) and weighted-average cost of capital, are based on the best available market information and are consistent with our internal forecasts and operating plans. A deterioration in these assumptions could adversely impact our results.
Given the low coverage, there could be further impairment to the carrying value of the SodaStream reporting unit goodwill if future sales and operating profit results are not in line with the forecasted future cash flows of the business and/or if macroeconomic conditions worsen and drive an increase in the weighted-average cost of capital used to estimate its fair value.
Given the low coverage, there could be further impairment to the carrying value of the SodaStream reporting unit goodwill if future sales and operating profit results are not in line with the forecasted future cash flows of the business and/or if macroeconomic conditions worsen and drive an increase in the weighted-average cost of capital used to estimate its fair value.
Depreciation is recognized on a straight-line basis over an asset’s estimated useful life. Construction in progress is not depreciated until ready for service. • Translation of Financial Statements of Foreign Subsidiaries – Financial statements of foreign subsidiaries are translated into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for revenues and expenses.
Depreciation is recognized on a straight-line basis over an asset’s estimated useful life. Construction in progress is not depreciated until ready for service. • Translation of Financial Statements of Foreign Subsidiaries – Generally, financial statements of foreign subsidiaries are translated into U.S. dollars using period-end exchange rates for assets and liabilities and average exchange rates for revenues and expenses.
The Five-Year Credit Agreement enables us and our borrowing subsidiaries to borrow up to $5.0 billion in U.S. dollars and/or euros, including a $0.75 billion swing line subfacility for euro-denominated borrowings permitted to be borrowed on a same-day basis, subject to customary terms and conditions.
The 2025 Five-Year Credit Agreement enables us and our borrowing subsidiaries to borrow up to $5.0 billion in U.S. dollars and/or euros, including a $0.75 billion swing line subfacility for euro-denominated borrowings permitted to be borrowed on a same-day basis, subject to customary terms and conditions.
The Audit Committee also assists the Board’s oversight of the Company’s compliance with legal and regulatory requirements and the Chief Compliance & Ethics Officer, who reports to the General Counsel, meets regularly with the Audit Committee, including in executive session without management present; ◦ The Compensation Committee of the Board reviews PepsiCo’s employee compensation policies and practices to assess whether such policies and practices could lead to unnecessary risk-taking behavior; ◦ The Nominating and Corporate Governance Committee assists the Board in its oversight of the Company’s governance structure and other corporate governance matters, including succession planning; and ◦ The Sustainability, Diversity and Public Policy Committee of the Board assists the Board in its oversight of PepsiCo’s policies, programs and related risks that concern key sustainability (including climate change), diversity, and public policy matters. • The PepsiCo Risk Committee (PRC) meets regularly to identify, assess, prioritize and address top strategic, financial, operating, compliance, safety, reputational and other risks.
The Audit Committee also assists the Board’s oversight of the Company’s compliance with legal and regulatory requirements and the Chief Compliance & Ethics Officer, who reports to the General Counsel, meets regularly with the Audit Committee, including in executive session without management present; ◦ The Compensation Committee of the Board reviews PepsiCo’s employee compensation policies and practices to assess whether such policies and practices could lead to unnecessary risk-taking behavior; ◦ The Nominating and Corporate Governance Committee assists the Board in its oversight of the Company’s governance structure and other corporate governance matters, including succession planning; and ◦ The Sustainability and Public Policy Committee of the Board assists the Board in its oversight of PepsiCo’s policies, programs and related risks that concern key sustainability (including climate change), inclusion and public policy matters. • The PepsiCo Risk Committee (PRC) meets regularly to identify, assess, prioritize and address top strategic, financial, operating, compliance, safety, reputational and other risks.
The net impact on the fair value of U.S. plan assets is zero. (h) Includes investments in limited partnerships and private credit funds. These funds are based on the net asset value of the investments owned by these funds as determined by independent third parties using inputs that are not observable.
The net impact on the fair value of U.S. plan assets is zero. (h) Includes investments in private credit funds, limited partnerships and mortgage funds. These funds are based on the net asset value of the investments owned by these funds as determined by independent third parties using inputs that are not observable.
The 364-Day Credit Agreement enables us and our borrowing subsidiaries to borrow up to $5.0 billion in U.S. dollars and/or euros, subject to customary terms and conditions. We may request that commitments under this agreement be increased up to $5.75 billion (or the equivalent amount in euros).
The 2025 364-Day Credit Agreement enables us and our borrowing subsidiaries to borrow up to $5.0 billion in U.S. dollars and/or euros, subject to customary terms and conditions. We may request that commitments under this agreement be increased up to $5.75 billion (or the equivalent amount in euros).
We determined that the carrying value exceeded the fair value, which reflected the increase in the weighted-average cost of capital as well as our most current estimates of future sales and their contributions to operating profit and expected future cash flows (including perpetuity growth assumptions).
We determined that the carrying value exceeded the fair value, which reflected our most current estimates of future sales and their contributions to operating profit and expected future cash flows (including perpetuity growth assumptions), as well as an increase in the weighted-average cost of capital.
During the periods presented in this report, volatile economic, political, social and geopolitical conditions, civil unrest and wars and other military conflicts, acts of terrorism and natural disasters and other catastrophic events in certain markets in which our products are made, manufactured, distributed or sold, including in Argentina, Brazil, China, Mexico, the Middle East, Pakistan, Russia, Turkey and Ukraine, continue to result in challenging operating environments and have resulted in and could continue to result in changes in how we operate in certain of these markets.
During the periods presented in this report, volatile economic, political, social and geopolitical conditions, civil unrest and wars and other military conflicts, acts of terrorism and natural disasters and other catastrophic events in certain markets in which our products are made, manufactured, distributed or sold, including in Argentina, Brazil, China, Mexico, the Middle East (including Egypt) , Russia, Turkey and Ukraine, continue to result in challenging operating environments and have resulted in and could continue to result in changes in how we operate in certain of these markets.
We evaluated the design and tested the operating effectiveness of certain internal controls related to the unrecognized tax benefits process, including controls to (1) identify uncertain income tax positions, (2) evaluate the tax law and tax authority’s settlement history used to estimate the unrecognized tax benefits, and (3) monitor for new information that may give rise to changes to the existing unrecognized tax benefits, such as progress of a tax examination, new tax law or tax authority 116 Table of Contents settlements.
We evaluated the design and tested the operating effectiveness of certain internal controls related to the unrecognized tax benefits process, including controls to (1) identify uncertain income tax positions, (2) evaluate the tax law and tax authority’s settlement history used to estimate the unrecognized tax benefits, and (3) monitor for new information that may give rise to changes to the existing unrecognized tax benefits, such as progress of a tax examination, new tax law or tax authority 109 Table of Contents settlements.
If this net accumulated gain or loss exceeds 10% of the greater of the market-related value of plan assets or plan obligations, a portion of the net gain or loss is included in other pension and retiree medical benefits (expense)/income for the following year based upon the average remaining service life for participants in PepsiCo Employees Retirement Hourly Plan (Plan H) (approximately 11 years) and retiree medical (approximately 11 years), and the remaining life expectancy for participants in Plan I (approximately 26 years).
If this net accumulated gain or loss exceeds 10% of the greater of the market-related value of plan assets or plan obligations, a portion of the net gain or loss is included in other pension and retiree medical benefits (expense)/income for the following year based upon the average remaining service life for participants in PepsiCo Employees Retirement Hourly Plan (Plan H) (approximately 10 years) and retiree medical (approximately 12 years), and the remaining life expectancy for participants in PepsiCo Employees Retirement Plan I (Plan I) (approximately 26 years).
We intend to continue to reinvest $11 billion of earnings outside the United States for the foreseeable future and while future distribution of these earnings would not be subject to U.S. federal tax expense, no deferred tax liabilities with respect to items such as certain foreign exchange gains or losses, foreign withholding taxes or state taxes have been recognized.
We intend to continue to reinvest $12 billion of earnings outside the United States for the foreseeable future and while future distribution of these earnings would not be subject to U.S. federal tax expense, no deferred tax liabilities with respect to items such as certain foreign exchange gains or losses, foreign withholding taxes or state taxes have been recognized.
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.
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.
Transaction gains and losses : the impact on our consolidated financial statements of exchange rate changes arising from specific transactions. Translation adjustment : the impact of converting our foreign affiliates’ financial statements into U.S. dollars for the purpose of consolidating our financial statements. 119 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Included in “Item 7.
Transaction gains and losses : the impact on our consolidated financial statements of exchange rate changes arising from specific transactions. Translation adjustment : the impact of converting our foreign affiliates’ financial statements into U.S. dollars for the purpose of consolidating our financial statements. 112 Table of Contents Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Included in “Item 7.
We are exposed to concentration of credit risk from our major customers, including Walmart. We have not experienced credit issues with these customers. In 2024, sales to Walmart and its affiliates (including Sam’s) represented approximately 14% of our consolidated net revenue, including concentrate sales to our independent bottlers, which were used in finished goods sold by them to Walmart.
We are exposed to concentration of credit risk from our major customers, including Walmart. We have not experienced credit issues with these customers. In 2025, sales to Walmart and its affiliates (including Sam’s) represented approximately 14% of our consolidated net revenue, including concentrate sales to our independent bottlers, which were used in finished goods sold by them to Walmart.
The cost or benefit of plan changes that increase or decrease benefits for prior employee service (prior service cost/(credit)) is included in other pension and retiree medical benefits (expense)/income on a straight-line basis over the average remaining service life for participants in Plan H, and the remaining life expectancy for participants in Plan I, except that prior service cost/(credit) for salaried participants subject to the benefit accruals freeze effective December 31, 2025 is amortized on a straight-line basis over the period up to the effective date of the freeze. 92 Table of Contents Selected financial information for our pension and retiree medical plans is as follows: Pension Retiree Medical U.S.
The cost or benefit of plan changes that increase or decrease benefits for prior employee service (prior service cost/(credit)) is included in other pension and retiree medical benefits (expense)/income on a straight-line basis over the average remaining service life for participants in Plan H, and the remaining life expectancy for participants in Plan I, except that prior service cost/(credit) for salaried participants subject to the benefit accruals freeze effective December 31, 2025 was amortized on a straight-line basis over the period up to the effective date of the freeze. 85 Table of Contents Selected financial information for our pension and retiree medical plans is as follows: Pension Retiree Medical U.S.
We also review current levels of interest rates and inflation to assess the reasonableness of the long-term rates. We evaluate our expected return assumptions annually to ensure 96 Table of Contents that they are reasonable. To calculate the expected return on plan assets, our market-related value of assets for fixed income is the actual fair value.
We also review current levels of interest rates and inflation to assess the reasonableness of the long-term rates. We evaluate our expected return assumptions annually to ensure 89 Table of Contents that they are reasonable. To calculate the expected return on plan assets, our market-related value of assets for fixed income is the actual fair value.
(d) Currency translation adjustment primarily reflects depreciation of the Russian ruble and South African rand, partially offset by appreciation of the Mexican peso.
(c) Currency translation adjustment primarily reflects depreciation of the Russian ruble and South African rand, partially offset by appreciation of the Mexican peso. (d) Currency translation adjustment primarily reflects depreciation of the Mexican peso and Russian ruble.
We believe that our audits provide a reasonable basis for our opinions. 115 Table of Contents Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
We believe that our audits provide a reasonable basis for our opinions. 108 Table of Contents Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
In 2023, we recorded our proportionate share of TBG’s earnings, which included an impairment of TBG’s indefinite-lived intangible assets, and recorded an other-than-temporary impairment of our investment, both of which resulted in pre-tax impairment charges of $321 million ($243 million after-tax or $0.18 per share), recorded in selling, general and administrative expenses in our PBNA division.
In 2023, we recorded our proportionate share of TBG’s earnings, which included an impairment of TBG’s indefinite-lived intangible assets, and recorded an other-than-temporary impairment of our investment, both of which resulted in pre-tax impairment charges of $321 million ($243 million after-tax or $0.18 per share), recorded in selling, general and administrative expenses in our PBNA segment.
Our fiscal year ends on the last Saturday of each December, resulting in a 53 rd reporting week every five or six years, including in our 2022 financial results. While our North America financial results are reported on a weekly calendar basis, our international operations are reported on a monthly calendar basis.
Our fiscal year ends on the last Saturday of each December, resulting in a 53 rd reporting week every five or six years. While our North America financial results are reported on a weekly calendar basis, our international operations are reported on a monthly calendar basis.
We may request that commitments under this agreement be increased up to $5.75 billion (or the equivalent amount in euros). Additionally, we may, up to two times during the term of the 2024 Five-Year Credit Agreement, request renewal of the agreement for an additional one-year period.
We may request that commitments under this agreement be increased up to $5.75 billion (or the equivalent amount in euros). Additionally, we may, up to two times during the term of the 2025 Five-Year Credit Agreement, request renewal of the agreement for an additional one-year period.
See the definition of “Constant currency” for further information. 118 Table of Contents Total marketplace spending : includes sales incentives and discounts offered through various programs to our customers, consumers or independent bottlers, as well as advertising and other marketing activities.
See the definition of “Constant currency” for further information. 111 Table of Contents Total marketplace spending : includes sales incentives and discounts offered through various programs to our customers, consumers or independent bottlers, as well as advertising and other marketing activities.
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.
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; and debt redemptions, cash tender or exchange offers.
The following chart details our quarterly reporting schedule: Quarter United States and Canada International First Quarter 12 weeks January and February Second Quarter 12 weeks March, April and May Third Quarter 12 weeks June, July and August Fourth Quarter 16 weeks (17 weeks for 2022) September, October, November and December Unless otherwise noted, tabular dollars are in millions, except per share amounts.
The following chart details our quarterly reporting schedule: Quarter United States and Canada International First Quarter 12 weeks January and February Second Quarter 12 weeks March, April and May Third Quarter 12 weeks June, July and August Fourth Quarter 16 weeks September, October, November and December Unless otherwise noted, tabular dollars are in millions, except per share amounts.
In addition, certain advertising and marketing costs are also based on annual targets and recognized during the year as incurred. The terms of most of our incentive arrangements do not exceed one year and, therefore, do not require highly uncertain long-term estimates. Certain arrangements, such as fountain pouring rights, may extend beyond one year.
In addition, certain advertising and marketing costs are also based on annual targets and recognized during the year as incurred. 69 Table of Contents The terms of most of our incentive arrangements do not exceed one year and, therefore, do not require highly uncertain long-term estimates. Certain arrangements, such as fountain pouring rights, may extend beyond one year.
PepsiCo has granted stock options, RSUs, PSUs and long-term cash awards to employees under the shareholder-approved PepsiCo, Inc. Long-Term Incentive Plan (LTIP). Executives who are awarded long-term incentives based on their performance may generally elect to receive their grant in the form of stock options or RSUs, or a combination thereof.
PepsiCo has granted stock options, RSUs, 81 Table of Contents PSUs and long-term cash awards to employees under the shareholder-approved PepsiCo, Inc. Long-Term Incentive Plan (LTIP). Executives who are awarded long-term incentives based on their performance may generally elect to receive their grant in the form of stock options or RSUs, or a combination thereof.
Our U.S. obligation and pension and retiree medical expense is based on the discount rates determined using the Mercer Above Mean Curve. This curve includes bonds that closely match the timing and amount of our expected benefit payments and reflects the portfolio of investments we would consider to settle our liabilities.
Our U.S. obligation and pension and retiree medical expense is based on the discount rates determined using the Mercer Above 55 Table of Contents Mean Curve. This curve includes bonds that closely match the timing and amount of our expected benefit payments and reflects the portfolio of investments we would consider to settle our liabilities.
Other Significant Accounting Policies Our other significant accounting policies are disclosed as follows: • Basis of Presentation – Note 1 includes a description of our policies regarding use of estimates, basis of presentation and consolidation. • Income Taxes – Note 5. • Share-Based Compensation – Note 6. • Pension, Retiree Medical and Savings Plans – Note 7. • Financial Instruments – Note 9. • Leases – Note 12. • Supply Chain Financing Arrangements – Note 14 . • Cash Equivalents – Cash equivalents are highly liquid investments with original maturities of three months or less. 77 Table of Contents • Inventories – Inventories are valued at the lower of cost or net realizable value.
Other Significant Accounting Policies Our other significant accounting policies are disclosed as follows: • Basis of Presentation – Note 1 includes a description of our policies regarding use of estimates, basis of presentation and consolidation. • Income Taxes – Note 5. • Share-Based Compensation – Note 6. • Pension, Retiree Medical and Savings Plans – Note 7. • Financial Instruments – Note 9. • Leases – Note 12. 71 Table of Contents • Acquisitions and Divestitures – Note 13. • Supply Chain Financing Arrangements – Note 14 . • Cash Equivalents – Cash equivalents are highly liquid investments with original maturities of three months or less. • Inventories – Inventories are valued at the lower of cost or net realizable value.
The guidance also requires certain amounts that are 78 Table of Contents currently required to be disclosed to be included in the same tabular disclosure as these disaggregation requirements. Furthermore, on an annual and interim basis, a public entity is required to separately disclose selling expenses and annually, disclose a description of the selling expenses.
The guidance also requires certain amounts that are currently required to be disclosed to be included in the same tabular disclosure as these disaggregation requirements. Furthermore, on an annual and interim basis, a public entity is required to separately disclose selling expenses and annually, disclose a description of the selling expenses.
The PRC is comprised of a cross-functional, geographically diverse, senior management group, including PepsiCo’s Chairman of the Board of Directors and Chief Executive Officer, Chief Financial Officer, General Counsel, Sector Chief Executive Officers, and the heads of Enterprise Risk, Corporate Affairs, Human Resources, Research & Development, Information Technology, Sustainability, Strategy, Transformation, International Beverages, Commercial, Global Operations and Marketing; • Division and key market risk committees, comprised of cross-functional senior management teams, meet regularly to identify, assess, prioritize and address division and country-specific business risks; • PepsiCo’s Risk Management Office, which manages the overall risk management process, provides ongoing guidance, tools and analytical support to the PRC and the division and key country risk committees, identifies and assesses potential risks and facilitates ongoing communication between the parties, as well as with PepsiCo’s Board, the Audit Committee of the Board and other Committees of the Board; • PepsiCo’s Internal Audit Department evaluates the ongoing effectiveness of our key internal controls through periodic audit and review procedures; and 39 Table of Contents • PepsiCo’s Compliance & Ethics and Law Departments lead and coordinate our compliance policies and practices. • PepsiCo’s Disclosure Committee, comprised of the General Counsel, Controller and heads of Internal Audit, Financial Planning & Analysis and Investor Relations, evaluates information from PepsiCo’s integrated risk management framework as part of the Disclosure Committee’s monitoring of the integrity and effectiveness of the Company’s disclosure controls and procedures.
The PRC is comprised of a cross-functional, geographically diverse, senior management group, including PepsiCo’s Chairman of the Board of Directors and Chief Executive Officer, Chief Financial Officer, General Counsel, Region Chief Executive Officers, and the heads of Enterprise Risk, Corporate Affairs, Human Resources, Research & Development, Information Technology, Sustainability, Strategy, Transformation, International Beverages, Commercial, Global Operations and Marketing; • Segment and key market risk committees, comprised of cross-functional senior management teams, meet regularly to identify, assess, prioritize and address segment and market-specific business risks; • PepsiCo’s Risk Management Office, which manages the overall risk management process, provides ongoing guidance, tools and analytical support to the PRC and the segment and key market and function risk committees, identifies and assesses potential risks and facilitates ongoing communication between the parties, as well as with PepsiCo’s Board, the Audit Committee of the Board and other Committees of the Board; • PepsiCo’s Internal Audit Department evaluates the ongoing effectiveness of our key internal controls through periodic audit and review procedures; and • PepsiCo’s Compliance & Ethics and Law Departments lead and coordinate our compliance policies and practices. • PepsiCo’s Disclosure Committee, comprised of the General Counsel, Controller and heads of Internal Audit, Financial Planning & Analysis and Investor Relations, evaluates information from PepsiCo’s integrated risk management framework as part of the Disclosure Committee’s monitoring of the integrity and effectiveness of the Company’s disclosure controls and procedures.
In 2024, after identifying several indicators of impairment such as worsening operating losses and liquidity position, we quantitatively assessed our investment in TBG for impairment and, consequently, recorded an other-than-temporary impairment of our remaining investment, resulting in pre-tax impairment charges of $498 million ($416 million after-tax or $0.30 per share), with $409 million in our PBNA division and $89 million in our Europe division, recorded in selling, general and administrative expenses.
In 2024, after identifying several indicators of impairment such as worsening operating losses and liquidity position, we quantitatively assessed our investment in TBG for impairment and, consequently, recorded an other-than-temporary impairment of our remaining investment, resulting in pre-tax impairment charges of $498 million ($416 million after-tax or $0.30 per share), with $409 million in our PBNA segment and $89 million in our EMEA segment, recorded in selling, general and administrative expenses.
Upon consolidation, we recognized a pre-tax gain of $122 million ($92 million after-tax or $0.07 per share) in our FLNA division, recorded in selling, general and administrative expenses, related to the remeasurement of our previously held 50% equity ownership in Sabra at fair value using a combination of the transaction price, net of a control premium, and discounted cash flows.
Upon consolidation, we recognized a pre-tax gain of $122 million ($92 million after-tax or $0.07 per share) in our PFNA segment, recorded in selling, general and administrative expenses, related to the remeasurement of our previously held 50% equity ownership in Sabra at fair value using a combination of the transaction price, net of a control premium, and discounted cash flows.
If the qualitative assessment indicates that it is more likely than not that an impairment exists, then a quantitative assessment is performed. In the quantitative assessment for indefinite-lived intangible assets and goodwill, an assessment is performed to determine the fair value of the indefinite-lived intangible asset and the reporting unit, respectively.
If the 53 Table of Contents qualitative assessment indicates that it is more likely than not that an impairment exists, then a quantitative assessment is performed. In the quantitative assessment for indefinite-lived intangible assets and goodwill, an assessment is performed to determine the fair value of the indefinite-lived intangible asset and the reporting unit, respectively.
If an evaluation of the undiscounted future cash flows indicates impairment, the asset is written down to its estimated fair value, which is based on its discounted future cash flows. See Note 2 and Note 4 to our consolidated financial statements for further information.
If an evaluation of the undiscounted future cash flows indicates impairment, the asset is written down to its estimated fair value, which is based on its discounted future cash flows. See Notes 2, 4 and 13 to our consolidated financial statements for further information.
We recognize liabilities for contingencies and commitments when a loss is probable and estimable. Research and Development We engage in a variety of research and development activities and continue to invest to accelerate growth and to drive innovation globally. Consumer research is excluded from research and development costs and included in other marketing costs.
We recognize liabilities for contingencies and commitments when a loss is probable and estimable. 70 Table of Contents Research and Development We engage in a variety of research and development activities and continue to invest to accelerate growth and to drive innovation globally. Consumer research is excluded from research and development costs and included in other marketing costs.
In the fourth quarter of 2023, macroeconomic conditions, including higher interest rates, inflationary costs, and the ongoing conflict in the Middle East, and recent business performance indicated a deterioration of the significant inputs used to determine the fair value of our indefinite-lived intangible assets in various markets, primarily assumptions underlying the weighted-average cost of capital and the impact of economic uncertainty on current and future financial performance, and required us to perform a quantitative assessment on certain assets.
In 2023, macroeconomic conditions, including higher interest rates, inflationary costs, and the ongoing conflict in the Middle East, and recent business performance indicated a deterioration of the significant inputs used to determine the fair value of our indefinite-lived intangible assets in various markets, 76 Table of Contents primarily assumptions underlying the weighted-average cost of capital and the impact of economic uncertainty on current and future financial performance, and required us to perform a quantitative assessment on certain assets.
Merchandising activities are performed after a customer obtains control of the product, are accounted for as fulfillment of our performance obligation to ship or deliver product to our customers and are recorded in selling, general and 74 Table of Contents administrative expenses. Merchandising activities are immaterial in the context of our contracts.
Merchandising activities are performed after a customer obtains control of the product, are accounted for as fulfillment of our performance obligation to ship or deliver product to our customers and are recorded in selling, general and administrative expenses. Merchandising activities are immaterial in the context of our contracts.
(f) In 2024, we recorded a pre-tax charge of $187 million ($143 million after-tax or $0.10 per share) associated with the Quaker Recall with $176 million recorded in cost of sales related to property, plant and equipment write-offs, employee severance costs and other costs, $8 million recorded in selling, general and administrative expenses and $3 million recorded in other pension and retiree medical benefits (expense)/income, which is not included in operating profit.
(h) In 2024, we recorded a pre-tax charge of $187 million ($143 million after-tax or $0.10 per share) associated with the Quaker Recall with $176 million recorded in cost of sales related to property, plant and equipment write-offs, employee severance costs and other costs, 66 Table of Contents $8 million recorded in selling, general and administrative expenses and $3 million recorded in other pension and retiree medical benefits (expense)/income, which is not included in operating profit.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 28, 2024 and December 30, 2023, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended December 28, 2024, in conformity with U.S. generally accepted accounting principles.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 27, 2025 and December 28, 2024, and the results of its operations and its cash flows for each of the fiscal years in the three-year period ended December 27, 2025, in conformity with U.S. generally accepted accounting principles.
Capitalized software costs are included in property, plant and equipment on our balance sheet and amortized on a straight-line basis when placed into service over the estimated useful lives of the software, which approximate five to 10 years. Software amortization totaled $199 million in 2024, $159 million in 2023 and $123 million in 2022.
Capitalized software costs are included in property, plant and equipment on our balance sheet and amortized on a straight-line basis when placed into service over the estimated useful lives of the software, which approximate five to 10 years. Software amortization totaled $260 million in 2025, $199 million in 2024 and $159 million in 2023.
We also participate in securities lending programs to generate additional income by loaning plan assets to borrowers on a fully collateralized basis, including both cash and non-cash collaterals. For 2025 and 2024, our expected long-term rate of return on U.S. plan assets is 7.5% and 7.4%, respectively.
We also participate in securities lending programs to generate additional income by loaning plan assets to borrowers on a fully collateralized basis, including both cash and non-cash collaterals. For 2026 and 2025, our expected long-term rate of return on U.S. plan assets is 7.8% and 7.5%, respectively.
(i) Derivative assets and liabilities are presented on a gross basis on our balance sheet. Amounts subject to enforceable master netting arrangements or similar agreements which are not offset on our balance sheet as of December 28, 2024 and December 30, 2023 were not material. Collateral received or posted against our asset or liability positions was not material.
(i) Derivative assets and liabilities are presented on a gross basis on our balance sheet. Amounts subject to enforceable master netting arrangements or similar agreements which are not offset on our balance sheet as of December 27, 2025 and December 28, 2024 were not material. Collateral received or posted against our asset or liability positions was not material.
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.
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 44 Table of Contents performance or trends.
These accruals are based on contract terms and our historical experience with similar programs and require management judgment with respect to estimating customer and consumer participation and performance levels. Differences between estimated expense and actual incentive costs are normally insignificant and 56 Table of Contents are recognized in earnings in the period such differences are determined.
These accruals are based on contract terms and our historical experience with similar programs and require management judgment with respect to estimating customer and consumer participation and performance levels. Differences between estimated expense and actual incentive costs are normally insignificant and are recognized in earnings in the period such differences are determined.
We are focused on improving our productivity, optimizing our operations and harnessing our scale and capabilities across our markets, and further elevating the needs, occasions, and channels of consumers in our strategies to lead and shape the future of our categories. This is underpinned by our pep+ (PepsiCo Positive) transformation, now in its fourth year.
We are focused on improving our productivity, optimizing our operations and harnessing our scale and capabilities across our markets and further elevating the interests, occasions, and channels of consumers in our strategies to lead and shape the future of our categories. This is underpinned by our pep+ (PepsiCo Positive) transformation, now in its fifth year.
The prices we pay for such items are subject to fluctuation, and we manage this risk through the use of fixed-price contracts and purchase orders, pricing agreements and derivative instruments, including swaps and futures.
The prices we pay for such items are subject to fluctuation, and we manage this risk through 34 Table of Contents the use of fixed-price contracts and purchase orders, pricing agreements and derivative instruments, including swaps and futures.
As the legislation becomes effective in countries in which we do business, our taxes could increase and negatively impact our provision for income taxes.
As the legislation becomes effective in countries in which we do business, our taxes will increase and negatively impact our provision for income taxes.
We believe these measures provide useful information in evaluating the results of our business because they exclude items that we believe are not indicative of our ongoing performance or that we believe impact comparability with the prior year.
We believe these measures provide useful information in evaluating the 45 Table of Contents results of our business because they exclude items that we believe are not indicative of our ongoing performance or that we believe impact comparability with the prior year.
See also “Item 1A. Risk Factors,” “Executive Overview” above and “Market Risks” below for more information about these risks and the actions we have taken to address key challenges. Risk Management Framework The achievement of our strategic and operating objectives involves risks, many of which evolve over time.
Risk Factors,” “Executive Overview” above and “Market Risks” below for more information about these risks and the actions we have taken to address key challenges. Risk Management Framework The achievement of our strategic and operating objectives involves risks, many of which evolve over time.
Discussion in this Form 10-K includes results of operations and financial condition for 2024 and 2023 and year-over-year comparisons between 2024 and 2023.
Discussion in this Form 10-K includes results of operations and financial condition for 2025 and 2024 and year-over-year comparisons between 2025 and 2024.
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. See “Net Revenue and Organic Revenue Performance” in “Results of Operations – Division Review” for further information.
We believe organic revenue performance provides useful information in evaluating the results of our business because it adjusts for items that we believe are not indicative of ongoing performance or that we believe impact comparability with the prior year. See “Net Revenue and Organic Revenue Performance” in “Results of Operations – Segment Review” for further information.
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.
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 purchases of group annuity contracts whereby a third-party insurance company assumed the obligation to pay and administer future benefit payments for certain retirees.
While the results of such litigation, claims, legal or regulatory proceedings, inquiries and investigations cannot be predicted with certainty, management believes that the final outcome of the foregoing will not have a material adverse effect on our financial condition, results of operations or cash flows. 114 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors PepsiCo, Inc.: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying Consolidated Balance Sheet of PepsiCo, Inc. and Subsidiaries (the Company) as of December 28, 2024 and December 30, 2023, the related Consolidated Statements of Income, Comprehensive Income, Cash Flows, and Equity for each of the fiscal years in the three-year period ended December 28, 2024, and the related notes (collectively, the consolidated financial statements).
While the results of such litigation, claims, legal or regulatory proceedings, inquiries and investigations 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. 107 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors PepsiCo, Inc.: Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting We have audited the accompanying Consolidated Balance Sheet of PepsiCo, Inc. and Subsidiaries (the Company) as of December 27, 2025 and December 28, 2024, the related Consolidated Statements of Income, Comprehensive Income, Cash Flows, and Equity for each of the fiscal years in the three-year period ended December 27, 2025, and the related notes (collectively, the consolidated financial statements).
Foreign Exchange Our operations outside of the United States generated 44% of our consolidated net revenue in 2024, with Mexico, Russia, Canada, China, the United Kingdom, South Africa and Brazil, collectively, comprising approximately 25% of our consolidated net revenue in 2024.
Foreign Exchange Our operations outside of the United States generated 44% of our consolidated net revenue in 2025, with Mexico, Russia, Canada, China, the United Kingdom, Brazil and South Africa, collectively, comprising 25% of our consolidated net revenue in 2025.
Assuming year-end 2024 investment levels and variable rate debt, a 1-percentage-point increase in interest rates would have decreased our net interest expense in 2024 by $32 million due to higher cash and cash equivalents and short-term investments levels, as compared with our variable rate debt.
Assuming year-end 2025 investment levels and variable rate debt, a 1-percentage-point increase in interest rates would have decreased our net interest expense in 2025 by $36 million due to higher cash and cash equivalents and short-term investments levels, as compared with our variable rate debt.
These gains and losses are subsequently reflected in division results when the divisions recognize the cost of the underlying commodity in operating profit. Therefore, the divisions realize the economic effects of the derivative without experiencing any resulting mark-to-market volatility, which remains in corporate unallocated expenses.
These gains and losses are subsequently reflected in segment results when the segments recognize the cost of the underlying commodity in operating profit. Therefore, the segments realize the economic effects of the derivative without experiencing any resulting mark-to-market volatility, which remains in corporate unallocated expenses.
These gains and losses are subsequently reflected in division results when the divisions recognize the cost of the underlying commodity in operating profit. Therefore, the divisions realize the economic effects of the derivative without experiencing any resulting mark-to-market volatility, which remains in corporate unallocated expenses.
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.
Our annual consolidated financial statements are not impacted by this interim allocation methodology. Advertising and other marketing activities, reported as selling, general and administrative expenses, totaled $5.9 billion in 2024, $5.7 billion in 2023 and $5.2 billion in 2022, including advertising expenses of $3.9 billion in 2024, $3.8 billion in 2023 and $3.5 billion in 2022.
Our annual consolidated financial statements are not impacted by this interim allocation methodology. Advertising and other marketing activities, reported as selling, general and administrative expenses, totaled $5.4 billion in 2025, $5.9 billion in 2024 and $5.7 billion in 2023, including advertising expenses of $3.4 billion in 2025, $3.9 billion in 2024 and $3.8 billion in 2023.
The annual impairment assessment on indefinite-lived intangible assets performed in the third quarter of 2024, based on best available market information and our internal forecasts and operating plans at the time, did not result in any material impairment charges. As of December 28, 2024, the estimated fair value of the SodaStream reporting unit narrowly exceeded its carrying value.
The annual impairment assessment on indefinite-lived intangible assets performed in the third quarter of 2025, based on best available market information and our internal forecasts and operating plans at the time, did not result in any further material impairment charges. As of December 27, 2025, the estimated fair value of the SodaStream reporting unit narrowly exceeded its carrying value.
As a result of the quantitative assessment, we recorded pre-tax impairment charges of $0.6 billion ($0.5 billion after-tax or $0.35 per share) for brands and $0.3 billion ($0.3 billion after-tax or $0.22 per share) for goodwill, both in impairment of intangible assets, primarily related to the SodaStream brand and reporting unit in our Europe division, in the year ended December 30, 2023.
As a result of the quantitative assessment, we recorded pre-tax impairment charges of $0.6 billion ($0.5 billion after-tax or $0.35 per share) for brands and $0.3 billion ($0.3 billion after-tax or $0.22 per share) for goodwill, both in impairment of intangible assets, primarily related to the SodaStream brand and reporting unit in our IB Franchise segment, in the year ended December 30, 2023.
The fair value of our indefinite-lived intangible assets was estimated using discounted cash flows under the income approach, which we consider to be a Level 3 measurement.
The fair value of our indefinite-lived intangible assets was estimated using discounted cash flows under the income approach, which we consider to be a Level 3 (significant unobservable inputs) measurement.
The number of shares may be increased to the maximum or reduced to the minimum threshold based on the results of these performance metrics in accordance with 89 Table of Contents the terms established at the time of the award.
The number of shares may be increased to the maximum or reduced to the minimum threshold based on the results of these performance metrics in accordance with the terms established at the time of the award.
These gains and losses are subsequently reflected in division results when the divisions recognize the cost of the underlying commodity in operating profit. Interest Rates We centrally manage our debt and investment portfolios considering investment opportunities and risks, tax consequences and overall financing strategies.
These gains and losses are subsequently reflected in segment results when the segments recognize the cost of the underlying commodity in operating profit. Interest Rates We centrally manage our debt and investment portfolios considering investment opportunities and risks, tax consequences and overall financing strategies.
These pre-tax charges are expected to consist of approximately 55% of severance and other employee-related costs, 10% for asset impairments (all non-cash) resulting from plant closures and related actions and 35% for other costs associated with the implementation of our initiatives.
These pre-tax charges are expected to consist of approximately 50% of severance and other employee-related costs, 15% for asset impairments (all non-cash) resulting from plant closures and related actions and 35% for other costs associated with the implementation of our initiatives.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 28, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 27, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
At the end of 2024, we estimate that an unfavorable 10% change in the underlying exchange rates would have increased our net unrealized losses in 2024 by $107 million, which would be significantly offset by an inverse change in the fair value of the underlying exposure.
At the end of 2025, we estimate that an unfavorable 10% change in the underlying exchange rates would have increased our net unrealized losses in 2025 by $308 million, which would be significantly offset by an inverse change in the fair value of the underlying exposure.
See accompanying notes to the consolidated financial statements. 66 Table of Contents Notes to the Consolidated Financial Statements Note 1 — Basis of Presentation and Our Divisions Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with GAAP and include the consolidated accounts of PepsiCo, Inc. and the affiliates that we control.
See accompanying notes to the consolidated financial statements. 62 Table of Contents Notes to the Consolidated Financial Statements Note 1 — Basis of Presentation and Our Segments Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with GAAP and include the consolidated accounts of PepsiCo, Inc. and the affiliates that we control.
Awards to employees eligible for retirement prior to the award becoming fully vested are amortized to expense over the period through the date that the employee first becomes eligible to retire and is no 88 Table of Contents longer required to provide service to earn the award.
Awards to employees eligible for retirement prior to the award becoming fully vested are amortized to expense over the period through the date that the employee first becomes eligible to retire and is no longer required to provide service to earn the award.
A 100-basis-point decrease in each of the above discount rates and expected rate of return assumptions would individually increase 2025 pre-tax pension and retiree medical expense as follows: Assumption Amount Discount rates used in the calculation of expense $ 74 Expected rate of return $ 143 Funding We make contributions to pension trusts that provide plan benefits for certain pension plans.
A 100-basis-point decrease in each of the above discount rates and expected rate of return assumptions would individually increase 2026 pre-tax pension and retiree medical expense as follows: Assumption Amount Discount rates used in the calculation of expense $ 64 Expected rate of return $ 142 Funding We make contributions to pension trusts that provide plan benefits for certain pension plans.
(i) Based on the published price of the fund. 97 Table of Contents Retiree Medical Cost Trend Rates The assumed health care cost trend rates for both 2025 and 2024 are as follows: Average increase assumed 5 % Ultimate projected increase 4 % Year of ultimate projected increase 2046 Annually, we review external data and our historical experience to estimate assumed health care cost trend rates that impact our retiree medical plan obligation and expense, however the cap on our share of retiree medical costs limits the impact.
(i) Based on the published price of the fund. 90 Table of Contents Retiree Medical Cost Trend Rates The assumed health care cost trend rates are as follows: 2026 2025 Average increase assumed 8 % 5 % Ultimate projected increase 4 % 4 % Year of ultimate projected increase 2046 2046 Annually, we review external data and our historical experience to estimate assumed health care cost trend rates that impact our retiree medical plan obligation and expense, however the cap on our share of retiree medical costs limits the impact.
Tax law requires items to be included in our tax returns at different times than the items are reflected in our consolidated financial statements. As a result, our annual tax rate reflected in our consolidated financial statements is different than that reported in our tax returns (our cash tax rate).
Tax law requires items to be included in our tax returns at different times than the items are reflected in our consolidated financial statements. As a result, our annual tax rate reflected in our consolidated 54 Table of Contents financial statements is different than that reported in our tax returns (our cash tax rate).

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