PEPSICO INC

Previous wording

The critical accounting policies and estimates below should be read in conjunction with those outlined in our 2024 Form 10-K.

Current wording

The critical accounting policies and estimates below should be read in conjunction with those outlined in our Recast Segment Information.

Previous wording

This Form 10-Q contains statements reflecting our views about our future performance that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (Reform Act). Statements that constitute forward-looking statements within the meaning of the Reform Act are generally identified through the inclusion of words such as “aim,” “anticipate,” “believe,” “drive,” “estimate,” “expect,” “expressed confidence,” “forecast,” “future,” “goal,” “guidance,” “intend,” “may,” “objective,” “outlook,” “plan,” “position,” “potential,” “project,” “seek,” “should,” “strategy,” “target,” “will” or similar statements or variations of such words and other similar expressions. All statements addressing our future operating performance, and statements addressing events and developments that we expect or anticipate will occur in the future, are forward-looking statements within the meaning of the Reform Act. These forward-looking statements are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in any such forward-looking statement. Such risks and uncertainties include, but are not limited to: future demand for PepsiCo’s products; damage to PepsiCo’s reputation or brand image; product recalls or other issues or concerns with respect to product quality and safety; PepsiCo’s ability to compete effectively; PepsiCo’s ability to attract, develop and maintain a highly skilled workforce or effectively manage changes in our workforce; water scarcity; changes in the retail landscape or in sales to any key customer; disruption of PepsiCo’s manufacturing operations or supply chain, including increased commodity, packaging, transportation, labor and other input costs; political, social or geopolitical conditions in the markets where PepsiCo’s products are made, manufactured, distributed or sold; PepsiCo’s ability to grow its business in developing and emerging markets; changes in economic conditions in the countries in which PepsiCo operates; changes in tariffs and global trade relations; future cyber incidents and other disruptions to our information systems; failure to successfully complete or manage strategic transactions; PepsiCo’s reliance on third-party service providers and enterprise-wide systems; climate change or measures to address climate change and other sustainability matters; strikes or work stoppages; failure to realize benefits from PepsiCo’s productivity initiatives or organizational restructurings; deterioration in estimates and underlying assumptions regarding future performance of our business or investments that can result in impairment charges; fluctuations or other changes in exchange rates; any downgrade or potential downgrade of PepsiCo’s credit ratings; imposition or proposed imposition of new or increased taxes aimed at PepsiCo’…

Excerpt shortened here; the source contains the full paragraph.

Current wording

This Form 10-Q contains statements reflecting our views about our future performance that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (Reform Act). Statements that constitute forward-looking statements within the meaning of the Reform Act are generally identified through the inclusion of words such as “aim,” “anticipate,” “believe,” “drive,” “estimate,” “expect,” “expressed confidence,” “forecast,” “future,” “goal,” “guidance,” “intend,” “may,” “objective,” “outlook,” “plan,” “position,” “potential,” “project,” “seek,” “should,” “strategy,” “target,” “will” or similar statements or variations of such words and other similar expressions. All statements addressing our future operating performance, and statements addressing events and developments that we expect or anticipate will occur in the future, are forward-looking statements within the meaning of the Reform Act. These forward-looking statements are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in any such forward-looking statement. Such risks and uncertainties include, but are not limited to: future demand for PepsiCo’s products; damage to PepsiCo’s reputation or brand image; product recalls or other issues or concerns with respect to product quality and safety; PepsiCo’s ability to compete effectively; PepsiCo’s ability to attract, develop and maintain a highly skilled workforce or effectively manage changes in our workforce; water scarcity; changes in the retail landscape or in sales to any key customer; disruption of PepsiCo’s manufacturing operations or supply chain, including increased commodity, packaging, transportation, labor and other input costs; political, social or geopolitical conditions in the markets where PepsiCo’s products are made, manufactured, distributed or sold; PepsiCo’s ability to grow its business in developing and emerging markets; changes in economic conditions in the countries in which PepsiCo operates; changes in tariffs and global trade relations; future cyber incidents and other disruptions to our information systems; failure to successfully complete or manage strategic transactions; PepsiCo’s reliance on third-party service providers and enterprise-wide systems; climate change or measures to address climate change and other sustainability matters; strikes or work stoppages; failure to realize benefits from PepsiCo’s productivity initiatives or organizational restructurings; deterioration in estimates and underlying assumptions regarding future performance of our business or investments that can result in impairment charges; fluctuations or other changes in exchange rates; any downgrade or potential downgrade of PepsiCo’s credit ratings; imposition or proposed imposition of new or increased taxes aimed at PepsiCo’…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

See Note 9 to our condensed consolidated financial statements in this Form 10-Q and Note 9 to our consolidated financial statements in our 2024 Form 10-K for further information on how we manage our exposure to commodity prices.

Current wording

See Note 9 to our condensed consolidated financial statements in this Form 10-Q and Note 9 to our consolidated financial statements in our Recast Segment Information for further information on how we manage our exposure to commodity prices.

Previous wording

In the 12 weeks ended March 22, 2025, our financial results outside of North America reflect the months of January and February. In the 12 weeks ended March 22, 2025, our operations outside of the United States generated 37% of our consolidated net revenue, with Mexico, Canada, China, Russia, the United Kingdom, Brazil and South Africa comprising approximately 22% of our consolidated net revenue. As a result, we are exposed to foreign exchange risk in the international markets in which our products are made, manufactured, distributed or sold. In the 12 weeks ended March 22, 2025, unfavorable foreign exchange reduced net revenue performance by 3 percentage points primarily driven bydeclines in the Mexican peso and Egyptian pound. Currency declines against the U.S. dollar which are not offset could adversely impact our future financial results.

Current wording

In the 12 weeks ended June 14, 2025, our financial results outside of North America reflect the months of March, April and May. In the 24 weeks ended June 14, 2025, our financial results outside of North America reflect the months of January through May. In the 24 weeks ended June 14, 2025, our operations outside of the United States generated 41% of our consolidated net revenue, with Mexico, Russia, Canada, China, the United Kingdom, Brazil and South Africa comprising approximately 24% of our consolidated net revenue. As a result, we are exposed to foreign exchange risk in the international markets in which our products are made, manufactured, distributed or sold. In the 12 weeks ended June 14, 2025, unfavorable foreign exchange reduced net revenue performance by 1.5 percentage points primarily due todeclines in the Mexican peso, Turkish lira and Brazilian real, partially offset by an appreciation of the Russian ruble. In the 24 weeks ended June 14, 2025, unfavorable foreign exchange reduced net revenue performance by 2 percentage points primarily due todeclines in the Mexican peso, Egyptian pound and Brazilian real. Currency declines against the U.S. dollar which are not offset could adversely impact our future financial results.

Previous wording

In addition, 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), 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. Debt and credit issues, currency controls or fluctuations, sanctions and export controls in certain of these international markets (including restrictions on the transfer of funds to and from certain markets) have also continued to impact our operations in certain of these international markets. We continue to closely monitor the economic, operating and political environment in the markets in which we operate, including risks of additional impairments or write-offs and currency fluctuation, and to identify actions to potentially mitigate any unfavorable impacts on our future results. Our operations in Russia accounted for 3% of our consolidated net revenue during the 12 weeks ended March 22, 2025. Russia accounted for 4% of our consolidated assets, including 13% of our consolidated cash and cash equivalents, and 38% of our accumulated currency translation adjustment loss as of March 22, 2025.

Current wording

In addition, 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), 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. Debt and credit issues, currency controls or fluctuations, sanctions and export controls in certain of these international markets (including restrictions on the transfer of funds to and from certain markets) have also continued to impact our operations in certain of these international markets. We continue to closely monitor the economic, operating and political environment in the markets in which we operate, including risks of additional impairments or write-offs and currency fluctuation, and to identify actions to potentially mitigate any unfavorable impacts on our future results. Our operations in Russia accounted for 5% and 4% of our consolidated net revenue for the 12 and 24 weeks ended June 14, 2025, respectively. Russia accounted for 5% of our consolidated assets, including 17% of our consolidated cash and cash equivalents and 38% of our accumulated currency translation adjustment loss as of June 14, 2025.

Previous wording

See Note 9 to our condensed consolidated financial statements in this Form 10-Q for the fair values of our financial instruments as of March 22, 2025 and December 28, 2024 and Note 9 to our consolidated financial statements in our 2024 Form 10-K for a discussion of these items.

Current wording

See Note 9 to our condensed consolidated financial statements in this Form 10-Q for the fair values of our financial instruments as of June 14, 2025 and December 28, 2024 and Note 9 to our consolidated financial statements in our Recast Segment Information for a discussion of these items.

Previous wording

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) are expected to impact our supply chain and result in increased input costs, including the cost of certain raw materials and packaging. The impact of tariffs will vary, including based on where inputs are sourced from and shipped to. In addition, any supply chain constraints, inflationary impacts or reduced consumer demand for our products as a result of such tariffs or ongoing macroeconomic uncertainty could impact our results. We will continue to evaluate the nature and extent of the impact of these tariffs on our business and to identify actions to potentially mitigate, where possible, any unfavorable impacts on our future results.

Current wording

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. The impact of tariffs will continue to vary, including based on where inputs are sourced from and shipped to. In addition, any supply chain constraints, inflationary impacts or reduced consumer demand for our products as a result of such tariffs or ongoing macroeconomic uncertainty have impacted and could continue to impact our results. We will continue to evaluate the nature and extent of the impact of these tariffs on our business and to identify actions to potentially mitigate, where possible, any unfavorable impacts on our future results.

Previous wording

Cautionary statements included above and in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” in our 2024 Form 10-K should be considered when evaluating our trends and future results.

Current wording

Cautionary statements included above and in “Item 1A. Risk Factors” in our 2024 Form 10-K and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” in our Recast Segment Information should be considered when evaluating our trends and future results.

Previous wording

Physical or unit volume is one of the key metrics management uses internally to make operating and strategic decisions, including the preparation of our annual operating plan and the evaluation of our business performance. We believe volume provides additional information to facilitate the comparison of our historical operating performance and underlying trends and provides additional transparency on how we evaluate our business because it measures demand for our products at the consumer level. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Financial Results – Volume” included in our 2024 Form 10-K for further information on volume. Unit volume performance adjusts for the impacts of acquisitions and divestitures. Acquisitions and divestitures, when used in this report, reflect mergers and acquisitions activity, as well as divestitures and other structural changes, including changes in ownership or control in consolidated subsidiaries and nonconsolidated equity investees. Further, unit volume performance excludes the impact of an additional week of results every five or six years (53 rd reporting week), where applicable.

Current wording

Physical or unit volume is one of the key metrics management uses internally to make operating and strategic decisions, including the preparation of our annual operating plan and the evaluation of our business performance. We believe volume provides additional information to facilitate the comparison of our historical operating performance and underlying trends and provides additional transparency on how we evaluate our business because it measures demand for our products at the consumer level. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Financial Results – Volume” included in our Recast Segment Information for further information on volume. Unit volume performance adjusts for the impacts of acquisitions and divestitures. Acquisitions and divestitures, when used in this report, reflect mergers and acquisitions activity, as well as divestitures and other structural changes, including changes in ownership or control in consolidated subsidiaries and nonconsolidated equity investees. Further, unit volume performance excludes the impact of an additional week of results every five or six years (53 rd reporting week), where applicable.

Previous wording

We report all of our international operations on a monthly calendar basis. The 12 weeks ended March 22, 2025 and March 23, 2024 include volume outside of North America for the months of January and February.

Current wording

We report all of our international operations on a monthly calendar basis. The 12 weeks ended June 14, 2025 and June 15, 2024 include volume outside of North America for the months of March, April and May. The 24 weeks ended June 14, 2025 and June 15, 2024 include volume outside of North America for the months of January through May.

Previous wording

Operating profit decreased 5% and operating margin declined 0.5 percentage points. Operating profit performance was primarily driven by certain operating cost increases, a decline in organic volume, a 4-percentage-point unfavorable impact of foreign exchange translation and a 3-percentage-point impact of higher commodity costs. These impacts were partially offset by productivity savings, effective net pricing and lower advertising and marketing expenses.

Current wording

Operating profit decreased 35% and operating margin declined 5.8 percentage points. Operating profit performance was primarily driven by impairment charges related to the Rockstar and Be & Cheery brands, certain operating cost increases, a decline in organic volume, a 4-percentage-point impact of higher commodity costs and higher restructuring charges. These impacts were partially offset by productivity savings and effective net pricing. The operating margin decline primarily reflects the unfavorable impact of the impairment charges related to the Rockstar and Be & Cheery brands.

Previous wording

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

Current wording

Other pension and retiree medical benefits income decreased $14 million, primarily reflecting recognition of fixed income losses on plan assets and the impact of certain plan changes approved in 2020, as discussed in Note 7 to our consolidated financial statements in our Recast Segment Information, partially offset by prior-year recognition of special termination benefits due to restructuring actions as part of our 2019 Productivity Plan.

Previous wording

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

Current wording

Net interest expense and other increased$26 million, due to higher average debt balances, lower interest rates on average cash balances and higher interest rates on average debt balances, partially offset by higher average cash balances and higher gains on the market value of investments used to economically hedge a portion of our deferred compensation liability.

Previous wording

While our financial results in North America are reported on a 12-week basis, all of our international operations are reported on a monthly calendar basis for which the months of January and February are reflected in our results for the 12 weeks ended March 22, 2025 and March 23, 2024.

Current wording

While our financial results in North America are reported on a 12-week basis, all of our international operations are reported on a monthly calendar basis for which the months of March, April and May are reflected in our results for the 12 weeks ended June 14, 2025 and June 15, 2024, and the months January through May are reflected in our results for the 24 weeks ended June 14, 2025 and June 15, 2024.

Previous wording

Operating Profit, Operating Profit Adjusted for Items Affecting Comparability and Operating Profit Performance Adjusted for Items Affecting Comparability on a Constant Currency Basis

Current wording

Operating Profit/(Loss), Operating Profit/(Loss) Adjusted for Items Affecting Comparability and Operating Profit/(Loss) Performance Adjusted for Items Affecting Comparability on a Constant Currency Basis

Previous wording

Operating profit adjusted for items affecting comparability and operating profit performance adjusted for items affecting comparability on a constant currency basis are both non-GAAP financial measures. For a description of and further information regarding these measures, see “Non-GAAP Measures” and “Items Affecting Comparability.”

Current wording

Operating profit/(loss) adjusted for items affecting comparability and operating profit/(loss) performance adjusted for items affecting comparability on a constant currency basis are both non-GAAP financial measures. For a description of and further information regarding these measures, see “Non-GAAP Measures” and “Items Affecting Comparability.”

Previous wording

Net revenue decreased 1%, primarily driven by a decrease in organic volume, partially offset by the favorable impact of acquisitions and effective net pricing.

Current wording

Net revenue increased 1%, primarily driven by the favorable impact of acquisitions, partially offset by a decrease in organic volume.

Previous wording

Unit volume declined 1%, driven by a 4% decrease in savory snacks volume, partially offset by a 9% increase in other foods volume.

Current wording

Unit volume declined 1%, driven by a 2% decrease in savory snacks volume, partially offset by a 5% increase in other foods volume.

Previous wording

Operating profit increased 2%, primarily reflecting a favorable impact of the prior-year charges associated with the Quaker Recall, productivity savings and a 5-percentage-point impact of gains associated with sales of certain assets. These impacts were partially offset by the net revenue decrease and certain operating cost increases, including strategic initiatives.

Current wording

Operating profit decreased 8%, primarily reflecting certain operating cost increases, including strategic initiatives, and the decrease in net revenue. These impacts were partially offset by productivity savings and a favorable impact of the prior-year charges associated with the Quaker Recall.

Previous wording

Unit volume declined 3%, driven by a 6% decline in non-carbonated beverage volume and a 1% decline in carbonated soft drink volume.

Current wording

Unit volume declined 2%, driven by a 6% decline in non-carbonated beverage (NCB) volume, partially offset by a 1% increase in carbonated soft drink (CSD) volume.

Previous wording

Net revenue increased 3%, primarily reflecting organic volume growth and effective net pricing, partially offset by a 5-percentage-point impact of unfavorable foreign exchange translation.

Current wording

Net revenue increased 3%, primarily reflecting effective net pricing and organic volume growth, partially offset by a 2-percentage-point impact of unfavorable foreign exchange translation.

Previous wording

Operating profit increased 6%, primarily reflecting the net revenue growth, partially offset by a 5-percentage-point impact of unfavorable foreign exchange translation.

Current wording

Operating profit increased 6%, primarily reflecting the net revenue growth and lower advertising and marketing costs, partially offset by a 3-percentage-point impact of unfavorable foreign exchange translation and a 3-percentage-point unfavorable impact of a prior-year gain on a disposal of an investment.

Previous wording

Net revenue decreased 2%, primarily reflecting unfavorable net pricing and a 2-percentage-point impact of unfavorable foreign exchange translation, partially offset by organic volume growth.

Current wording

Net revenue increased 8%, primarily reflecting effective net pricing and a 2-percentage-point impact of favorable foreign exchange translation, partially offset by an organic volume decline.

Previous wording

Convenient foods unit volume declined 9%, primarily reflecting declines in South Africa and the Middle East.

Current wording

Convenient foods unit volume declined 6%, primarily reflecting declines in South Africa, Russia, the Middle East and the United Kingdom.

Previous wording

Net revenue increased slightly, primarily driven by effective net pricing, partially offset by an organic volume decline.

Current wording

Net revenue increased 5%, primarily reflecting effective net pricing, partially offset by an organic volume decline and a 2-percentage-point impact of unfavorable foreign exchange translation.

Previous wording

Operating profit decreased 18%, primarily reflecting certain operating cost increases, a 16-percentage-point impact of unfavorable foreign exchange translation, driven primarily by the weakening of the Mexican peso, and the organic volume decline, partially offset by the effective net pricing and productivity savings.

Current wording

Operating profit decreased 8%, primarily reflecting certain operating cost increases, a 16-percentage-point impact of unfavorable foreign exchange translation, driven primarily by the weakening of the Mexican peso, and a 6-percentage-point impact of higher commodity costs, partially offset by productivity savings, the effective net pricing and a 5-percentage-point favorable impact of certain indirect tax credits in Brazil.

Previous wording

Unit volume grew 3%, primarily reflecting growth in India, China and Australia.

Current wording

Unit volume grew 4%, primarily reflecting growth in India, Thailand, China and Australia.

Previous wording

Operating profit decreased 9%, primarily reflecting the unfavorable net pricing and certain operating cost increases. These impacts were partially offset by productivity savings, the organic volume growth and lower advertising and marketing costs.

Current wording

Operating profit decreased 39%, primarily reflecting an impairment charge related to the Be & Cheery brand, the unfavorable net pricing and certain operating cost increases. These impacts were partially offset by productivity savings, the organic volume growth and lower advertising and marketing costs.

Previous wording

Cost of sales, gross profit, selling, general and administrative expenses, other pension and retiree medical benefits income, provision for income taxes and net income attributable to PepsiCo, each adjusted for items affecting comparability, operating profit and net income attributable to PepsiCo per common share – diluted, each adjusted for items affecting comparability and the corresponding constant currency growth rates

Current wording

Cost of sales, gross profit, selling, general and administrative expenses, impairment of intangible assets, other pension and retiree medical benefits income, provision for income taxes, net income attributable to noncontrolling interests and net income attributable to PepsiCo, each adjusted for items affecting comparability, operating profit and net income attributable to PepsiCo per common share – diluted, each adjusted for items affecting comparability and the corresponding constant currency growth rates

Previous wording

These measures exclude the net impact of mark-to-market gains and losses on centrally managed commodity derivatives that do not qualify for hedge accounting, restructuring and impairment charges related to our 2019 Productivity Plan, charges associated with our acquisitions and divestitures and product recall-related impact (see “Items Affecting Comparability” for a detailed description of each of these items). We also evaluate performance on operating profit and net income attributable to PepsiCo per common share – diluted, each adjusted for items affecting comparability on a constant currency basis, which measure our financial results assuming constant foreign currency exchange rates used for translation based on the rates in effect for the comparable prior-year period. In order to compute our constant currency results, we multiply or divide, as appropriate, our current-year U.S. dollar results by the current-year average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior-year average foreign exchange rates. In addition, beginning with our first quarter of 2025, on a prospective basis, we are also applying the constant currency calculation for our subsidiaries operating in highly inflationary economies. 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.

Current wording

These measures exclude the net impact of mark-to-market gains and losses on centrally managed commodity derivatives that do not qualify for hedge accounting, restructuring and impairment charges related to our 2019 Productivity Plan, charges associated with our acquisitions and divestitures, impairment and other charges, product recall-related impact and the impact of settlement and curtailment gains and losses related to pension and retiree medical plans (see “Items Affecting Comparability” for a detailed description of each of these items). We also evaluate performance on operating profit and net income attributable to PepsiCo per common share – diluted, each adjusted for items affecting comparability on a constant currency basis, which measure our financial results assuming constant foreign currency exchange rates used for translation based on the rates in effect for the comparable prior-year period. In order to compute our constant currency results, we multiply or divide, as appropriate, our current-year U.S. dollar results by the current-year average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior-year average foreign exchange rates. In addition, beginning with our first quarter of 2025, on a prospective basis, we are also applying the constant currency calculation for our subsidiaries operating in highly inflationary economies. 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.

Previous wording

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

Current wording

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

Previous wording

The 2019 Productivity Plan leverages new technology and business models to further simplify, harmonize and automate processes; re-engineers our go-to-market and information systems, including deploying the right automation for each market; and simplifies our organization and optimizes our manufacturing and supply chain footprint. To build on the successful implementation of the 2019 Productivity Plan, in 2024, we further expanded and extended the plan through the end of 2030 to take advantage of additional opportunities within the initiatives described above. As a result, we expect to incur pre-tax charges of approximately $6.15 billion, including cash expenditures of approximately $5.1 billion. Plan-to-date through March 22, 2025, we have incurred pre-tax charges of $2.8 billion, including cash expenditures of $2.1 billion. We expect to incur the majority of the remaining pre-tax charges and cash expenditures through 2027, with the balance to be incurred through 2030. Charges include severance and other employee costs, asset impairments and other costs.

Current wording

The 2019 Productivity Plan leverages new technology and business models to further simplify, harmonize and automate processes; re-engineers our go-to-market and information systems, including deploying the right automation for each market; and simplifies our organization and optimizes our manufacturing and supply chain footprint. To build on the successful implementation of the 2019 Productivity Plan, in 2024, we further expanded and extended the plan through the end of 2030 to take advantage of additional opportunities within the initiatives described above. As a result, we expect to incur pre-tax charges of approximately $6.15 billion, including cash expenditures of approximately $5.1 billion. Plan-to-date through June 14, 2025, we have incurred pre-tax charges of $3.1 billion, including cash expenditures of $2.3 billion. We expect to incur the majority of the remaining pre-tax charges and cash expenditures through 2027, with the balance to be incurred through 2030. Charges include severance and other employee costs, asset impairments and other costs.

Previous wording

See Note 3 to our condensed consolidated financial statements in this Form 10-Q, as well as Note 3 to our consolidated financial statements in our 2024 Form 10-K, for further information related to our 2019 Productivity Plan.

Current wording

See Note 3 to our condensed consolidated financial statements in this Form 10-Q, as well as Note 3 to our consolidated financial statements in our Recast Segment Information, for further information related to our 2019 Productivity Plan.

Previous wording

Acquisition and divestiture-related charges primarily include transaction expenses, such as consulting, advisory and other professional fees, and merger and integration charges. Merger and integration charges include employee-related costs, closing costs and other integration costs.

Current wording

Acquisition and divestiture-related charges primarily include transaction expenses, such as consulting, advisory and other professional fees, and merger and integration charges. Merger and integration charges include distribution agreement termination fees, employee-related costs, closing costs and other integration costs.

Previous wording

We believe that our cash generating capability and financial condition, together with our revolving credit facilities, working capital lines and other available methods of debt financing, such as commercial paper borrowings and long-term debt financing, will be adequate to meet our operating, investing and financing needs, including with respect to our net capital spending plans. Our primary sources of liquidity include cash from operations, proceeds obtained from issuances of commercial paper and long-term debt, and cash and cash equivalents. These sources of cash are available to fund cash outflows that have both a short- and long-term component, including debt repayments and related interest payments; payments for acquisitions; operating leases; purchase, marketing, and other contractual commitments, including capital expenditures and the transition tax liability under the Tax Cuts and Jobs Act (TCJ Act). In addition, these sources of cash fund other cash outflows including anticipated dividend payments and share repurchases. We do not have guarantees or off-balance sheet financing arrangements, including variable interest entities, that we believe could have a material impact on our liquidity. See “Our Business Risks” and Note 8 to our condensed consolidated financial statements included in this Form 10-Q and “Item 1A. Risk Factors,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” and Note 8 to our consolidated financial statements included in our 2024 Form 10-K for further information.

Current wording

We believe that our cash generating capability and financial condition, together with our revolving credit facilities, working capital lines and other available methods of debt financing, such as commercial paper borrowings and long-term debt financing, will be adequate to meet our operating, investing and financing needs, including with respect to our net capital spending plans. Our primary sources of liquidity include cash from operations, proceeds obtained from issuances of commercial paper and long-term debt, and cash and cash equivalents. These sources of cash are available to fund cash outflows that have both a short- and long-term component, including debt repayments and related interest payments; payments for acquisitions; operating leases; purchase, marketing, and other contractual commitments, including capital expenditures and the transition tax liability under the TCJ Act. In addition, these sources of cash fund other cash outflows including anticipated dividend payments and share repurchases. We do not have guarantees or off-balance sheet financing arrangements, including variable interest entities, that we believe could have a material impact on our liquidity. See “Our Business Risks” and Note 8 to our condensed consolidated financial statements included in this Form 10-Q, “Item 1A. Risk Factors” in our 2024 Form 10-K and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our

Previous wording

As of March 22, 2025, cash, cash equivalents and short-term investments in our consolidated subsidiaries outside of Russia that are subject to currency controls or currency exchange restrictions were not material. As of March 22, 2025, Russia accounted for 13% of our consolidated cash and cash equivalents. Our sources and uses of cash were not materially adversely impacted by the cash and cash equivalents held in Russia and, to date, we have not identified any material impact on our liquidity or capital resources as a result of these amounts. See “Our Business Risks” for further information on our operations in Russia.

Current wording

As of June 14, 2025, cash, cash equivalents and short-term investments in our consolidated subsidiaries outside of Russia that are subject to currency controls or currency exchange restrictions were not material. As of June 14, 2025, Russia accounted for 17% of our consolidated cash and cash equivalents. Our sources and uses of cash were not materially adversely impacted by the cash and cash equivalents held in Russia and, to date, we have not identified any material impact on our liquidity or capital resources as a result of these amounts. See “Our Business Risks” for further information on our operations in Russia.

Previous wording

The TCJ Act imposed a one-time mandatory transition tax on undistributed international earnings. As of March 22, 2025, our mandatory transition tax liability was $1.7 billion, which must be paid through 2026 under the provisions of the TCJ Act. See “Our Liquidity and Capital Resources” and Note 5 to our consolidated financial statements included in our 2024 Form 10-K for further discussion of the TCJ Act.

Current wording

The TCJ Act imposed a one-time mandatory transition tax on undistributed international earnings. As of June 14, 2025, our mandatory transition tax liability was $1.0 billion, which must be paid through 2026 under the provisions of the TCJ Act. See “Our Liquidity and Capital Resources” and Note 5 to our consolidated financial statements included in our Recast Segment Information for further discussion of the TCJ Act.

Previous wording

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

Current wording

During the 24 weeks ended June 14, 2025, net cash used for investing activities was$4.1 billion, primarily reflecting net cash paid in connection with our acquisitions of poppi of $1.9 billion and Siete of $1.2 billion, as well as net capital spending of $1.3 billion, partially offset by maturities of short-term investments with maturities greater than three months of $0.4 billion.

Previous wording

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

Current wording

During the 24 weeks ended June 14, 2025, net cash provided by financing activities was $1.9 billion, primarily reflecting proceeds from the issuances of long-term debt of $3.5 billion and net proceeds from short-term borrowings of $5.2 billion, partially offset by the return of operating cash flow to our shareholders through dividend payments and share repurchases of $4.2 billion, as well as payments of long-term debt borrowings of $2.5 billion.

Previous wording

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

Current wording

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