Annual Report 2024 Mix of Net Revenue Food 58% Beverage 42% 58% 42% 56% 44% U.S. 56% Outside U.S. 44% 2024 FINANCIAL HIGHLIGHTS 1. Excludes the mark-to-market net impact of our commodity derivatives, restructuring and impairment charges, acquisition and divestiture-related charges, impairment and other charges, as well as product returns, inventory write-offs, and customer and consumer-related costs associated with the voluntary recall of certain bars and cereals in our Quaker Foods North America division (Quaker Recall). In 2024, also excludes additional expenses related to an indirect tax reserve in our Latin America division. See page 135 “Reconciliation of GAAP and Non-GAAP Information” for a reconciliation to the most directly comparable financial measure in accordance with U.S. Generally Accepted Accounting Principles (GAAP). On a reported basis, the division operating profit percentages in 2024 were: Frito-Lay North America 43%, Quaker Foods North America 2%, PepsiCo Beverages North America 15%, Latin America 15%, Europe 14%, Africa, Middle East and South Asia 5%, and Asia Pacific, Australia and New Zealand and China Region 6%. 2024 and 2023 reported operating profit was $12,887 and $11,986, respectively, reflecting an increase of 8% in 2024. 2. Percentage changes are based on unrounded amounts. 3. Excludes the mark-to-market net impact of our commodity derivatives, restructuring and impairment charges, acquisition and divestiture-related charges, impairment and other charges, as well as product returns, inventory write-offs, and customer and consumer-related costs associated with the Quaker Recall. In addition, excludes pension and retiree medical-related impact. In 2024, also excludes additional expenses related to an indirect tax reserve in our Latin America division. See page 135 “Reconciliation of GAAP and Non-GAAP Information” for a reconciliation to the most directly comparable financial measure in accordance with GAAP. 4. Includes the impact of net capital spending. See page 135 “Reconciliation of GAAP and Non-GAAP Information” for a reconciliation to the most directly comparable financial measure in accordance with GAAP. 2024 and 2023 net cash provided by operating activities was $12,507 and $13,442, respectively, reflecting a decrease of 7% in 2024. PepsiCo, Inc. & Consolidated Subsidiaries (in millions, except per share data — all per share amounts assume dilution) Summary of Operations 2024 2023 % Change 2 Net revenue $ 91,854 $ 91,471 —% Core operating profit 1 $ 14,698 $ 13,875 6% Reported earnings per share $ 6.95 $ 6.56 6% Core earnings per share 3 $ 8.16 $ 7.62 7% Free cash flow 4 $ 7,531 $ 8,122 (7)% Capital spending $ 5,318 $ 5,518 (4)% Common share repurchases $ 1,000 $ 1,000 —% Dividends paid $ 7,229 $ 6,682 8% Net Revenue Frito-Lay North America 27% Quaker Foods North America 3% PepsiCo Beverages North America 30% Latin America 13% Europe 15% Africa, Middle East and South Asia 7% Asia Pacific, Australia and New Zealand and China Region 5% 27% 3% 30% 13% 15% 7% 5% Core Division Operating Profit 1 Frito-Lay North America 39% Quaker Foods North America 3% PepsiCo Beverages North America 19% Latin America 15% Europe 14% Africa, Middle East and South Asia 5% Asia Pacific, Australia and New Zealand and China Region 5% 39% 3% 19% 15% 14% 5% 5% PEP+ (PEPSICO POSITIVE) HIGHLIGHTS PepsiCo Annual Report 2024 | 1 Regenerative Agriculture PepsiCo, in collaboration with the Alliance of Bioversity International, the International Center for Tropical Agriculture, and the Foundation for Food and Agriculture Research, launched the Climate Resilience Platform (CRP), an open-access tool providing actionable insights on climate change impacts and mitigation strategies for farming communities. Recognized by Fast Company in 2024 as a “Next Big Thing in Tech” for its contributions to food and agriculture, the CRP tool helps boost yields and reduce environmental impact. Water We reached our 2025 global goal in operational water-use efficiency in high water-risk areas 1 and exceeded our agricultural water-use efficiency target in high water-risk watersheds 2 two years ahead of schedule. Packaging We’re focused on scale and efficiency in incorporating recycled plastic (rPET) into our packaging across brands and geographies, with rPET now incorporated into the packaging of at least one PepsiCo product in approximately 60 countries in 2024. Expanded Portfolio Offerings + Acquisitions We’ve recently launched products that have not only been centered on meeting essential consumer needs, but also on delivering on our pep+ agenda. For example, our Gatorade Hydration Booster, an electrolyte drink mix, provides all-day hydration without the use of artificial flavors, sweeteners, or colors. In Brazil, our oat “rice” offers higher fiber and plant-based protein compared to standard brown rice, and all profits from oat “rice” sales are donated to a nongovernmental organization in the northeast of Brazil to help address food insecurity in the region. We’ve expanded our better-for-you portfolio through our recent acquisition of the remaining interest in Sabra and our recent acquisition of Siete Foods. 1. Measured versus a 2015 baseline. Goal reflects the exclusion of third-party facilities. Between 2006–2015, water-use efficiency improved by 26% in global legacy operations at the date of target setting. World Resources Institute’s Aqueduct water stress assessment tool is used to reconfirm high water-risk areas every three years. 2. Measured versus a 2015 baseline. The metric tracks the improvement of the water-use efficiency of PepsiCo’s direct agricultural supply chain. To focus efforts on implementing sustainable practices, we currently collect and publish agricultural water-use efficiency data at least once every three years. World Resources Institute’s Aqueduct water stress assessment tool is used to reconfirm high water-risk areas every three years. As I reflect on PepsiCo’s performance over the past year, one word comes to mind: resilient. Despite facing a series of headwinds in 2024, we delivered 2% organic revenue growth for the full year.1 We also delivered 9% growth in core constant currency earnings per share (EPS), beating our guidance of at least 8% and giving us four straight years of meeting or exceeding our EPS objectives.1 Over the past five years, our net revenue has increased 37% to nearly $92 billion, while core EPS increased 48%.1 We’ve made tremendous progress in our journey to invest in our businesses and accelerate growth — while also having to navigate through a global pandemic and periods of abnormally high levels of inflation. This is a testament to the long-term resilience of our categories, our product and geographic diversification, the agility of our business model, and our ability to deliver profitable growth. Our International business has been an especially important contributor to our growth, as we have continued to build our presence outside North America. In 2024, our International businesses delivered net revenue of $37 billion, representing 40% of our total net revenue and 39% of our core division operating profit mix. This sustained top line growth helped our International business deliver core operating profit compound annual growth of 10% over the last five years.1 I’m proud of our teams around the world for everything they’re doing to meet local tastes, offer consumers more value and convenience, and elevate our productivity to help fund investments in growth. As we look ahead, we believe the runway for growth remains vast. We operate in two large and attractive categories — global beverages and convenient foods — which represent a $1.3 trillion global opportunity. Roughly 60% of our business comes from geographies with 5% of the global population, which means we have a massive opening to expand in geographies covering the other 95% of the population. With this opportunity in mind, we are focusing our energy and investment on four key pillars: evolving our portfolio to always win the consumer, expanding our availability to reach consumers everywhere, modernizing the company to fuel growth, and becoming more sustainable and resilient with pep+ (PepsiCo Positive). DEAR FELLOW PEPSICO SHAREHOLDERS: 1. 2024 reported net revenue increased 0.4%. 2024 reported EPS increased 6%. Reported EPS had cumulative growth of 34% between 2019–2024. 2024 International business represented 40% of reported division operating profit mix. 2020–2024 reported operating profit compound annual growth was 10% for our International business. Organic revenue, core constant currency EPS, core EPS, core operating profit, and core division operating profit are non-GAAP financial measures. See page 135 “Reconciliation of GAAP and Non-GAAP Information” for definitions and more information about these results, including a reconciliation to the most directly comparable financial measure in accordance with GAAP. 2 | PepsiCo Annual Report 2024 Evolving our portfolio Our aspiration is to offer consumers a broad portfolio of products that meets their needs throughout the day. We’re doing this by accelerating the pace of our portfolio innovation, with a focus on: • Advancing Positive Choices including no-sugar beverages and increasing diverse ingredients like whole grains and pulses in our food business; • Providing more functionality in our products, like better hydration and proteins; • Offering more options that provide portion control; and • Addressing consumers’ increasing desire for customization and personalization, like our powders and tablets and expanding our SodaStream offerings. To point to a few examples, we’re: • Refreshing our iconic offerings like Lay’s Classic with less sodium in the U.S. and expanding cooking methods like popping and baking; • Re-launching the Simply line in the U.S. with more natural ingredients; • Innovating functional hydration with brands like Gatorade and Propel; • Advancing our multicultural focus in the U.S. by expanding Sabritas’ presence, while also adding Siete Foods’ collection of authentic Mexican- American products to our portfolio; • Providing consumers with alternatives like mini canisters and mini cans that offer convenience, value, and portion control; and • Investing in personalization and customization, with Gatorade and Propel powders now a $1 billion business in the U.S. and SodaStream adding more flavors. We also believe we have an opportunity to capture more consumers throughout the day by extending our large brands into meal occasions around the world. For example, in Europe we’re showing consumers how to make a traditional potato omelet using Lay’s to save time and effort; and in the U.S., we’re offering Doritos Loaded at colleges and universities, while our Drips mixology stations give consumers the chance to create their own unique beverages using PepsiCo products. Expanding our availability At the same time, we’re also working to expand our brands’ presence in high-growth channels and markets. We’re stepping up our Away From Home business in both foods and beverages. For example, in Mexico, we’re leveraging Tosticentros, street food trucks that enable consumers to create a meal centered around Tostitos. We’re also expanding our brands into new markets, and we’re building up our own direct‑to‑consumer and business-to-business platforms. By focusing more on these channels, we’re aiming to grow our connection with consumers and make sure our products are available everywhere they are needed. Modernizing the company To support these initiatives and investments, while positioning us to deliver long-term profitable growth, we will continue to elevate and accelerate our multi-year, corporate-wide transformation and productivity programs. This includes modernizing our company with digital platforms, simplifying and harmonizing our IT systems, and standardizing our ways of working. We’ve also created a network of global capability centers that helps us avoid duplication, leverage our global scale, and centralize information, enabling knowledge sharing and allowing us to quickly lift and shift best PepsiCo Annual Report 2024 | 3 Ramon L. Laguarta Chairman of the Board of Directors and Chief Executive Officer March 28, 2025 practices. Each of these programs helps us better leverage data to make us more competitive in the marketplace by improving our agility, speed to market, and precise execution at the store level, while also lowering our costs. Becoming more sustainable and resilient Going forward, we will continue to focus on Winning with pep+, our strategy to transform PepsiCo from end-to-end to create sustainable growth and value. Winning with pep+ has been — and will remain — the cornerstone of our long-term success. It’s the way we are transforming our supply chain, evolving our portfolio, and striving to make sure we have the right capabilities to support our people and our business everywhere in the world. Some key wins from 2024 include: • Working with partners to launch the Climate Resilience Platform (CRP), an open-access tool providing actionable insights for farming communities on climate change impacts and mitigation strategies. Recognized by Fast Company as a “Next Big Thing in Tech,” the CRP helps boost yields and reduce environmental impact; • Incorporating recycled material into the packaging of at least one PepsiCo product in approximately 60 countries; • Reaching our 2025 global goal in operational water-use efficiency in high water-risk areas 2 and exceeding our agricultural water-use efficiency target in high water-risk watersheds 3 two years ahead of schedule; • Elevating our Positive Choices by continuously improving our recipes to reduce sodium, saturated fat, and added sugar, while incorporating more diverse ingredients; and • Launching Gatorade Hydration Booster, an electrolyte drink mix that provides all-day hydration without artificial flavors, sweeteners, or colors. We also introduced Quaker Oat “Rice” in Brazil, offering higher fiber and plant-based protein compared to standard brown rice. All profits from the sales of oat “rice” are donated to a nongovernmental organization in the northeast of Brazil to help address food insecurity in the region. In summary, we have beloved brands, a talented team of associates around the world, and advantaged capabilities. As the external landscape continues to evolve, we believe we have the right strategies, tools, and capabilities in place to capture additional opportunities for growth. Thank you for your support and the confidence you place in us with your investment. Sincerely, 2. Measured versus a 2015 baseline. Goal reflects the exclusion of third-party facilities. Between 2006–2015, water-use efficiency improved by 26% in global legacy operations at the date of target setting. World Resources Institute’s Aqueduct water stress assessment tool is used to reconfirm high water-risk areas every three years. 3. Measured versus a 2015 baseline. The metric tracks the improvement of the water-use efficiency of PepsiCo’s direct agricultural supply chain. To focus efforts on implementing sustainable practices, we currently collect and publish agricultural water-use efficiency data at least once every three years. World Resources Institute’s Aqueduct water stress assessment tool is used to reconfirm high water-risk areas every three years. 4 | PepsiCo Annual Report 2024 PEPSICO LEADERSHIP PEPSICO BOARD OF DIRECTORS Ramon L. Laguarta Chairman of the Board of Directors and Chief Executive Officer Jim Andrew Executive Vice President and Chief Sustainability Officer James T. Caulfield Executive Vice President and Chief Financial Officer Rachel Ferdinando Chief Executive Officer, U.S. Foods David J. Flavell Executive Vice President, General Counsel and Corporate Secretary Marie Gallagher Senior Vice President and Controller Athina Kanioura Executive Vice President and Chief Strategy and Transformation Officer Stephen Kehoe Executive Vice President and Chief Corporate Affairs Officer Ram Krishnan Chief Executive Officer, U.S. Beverages René Lammers Executive Vice President and Chief Science Officer Roberto Martínez International Chief Commercial Officer and Chief Executive Officer, New Revenue Streams Silviu Popovici Chief Executive Officer, Europe, Middle East and Africa Gregg Roden Executive Vice President and Chief Operations Officer, North America Supply Chain Paula Santilli Chief Executive Officer, Latin America Foods Becky Schmitt Executive Vice President and Chief People Officer Anne Tse Chief Executive Officer, Asia Pacific Foods Jane Wakely Executive Vice President, Chief Consumer and Marketing Officer and Chief Growth Officer, International Foods Eugene Willemsen Chief Executive Officer, International Beverages Steven Williams Chief Executive Officer, North America Segun Agbaje Group Chief Executive Officer, Guaranty Trust Holding Company Plc (GTCO Plc) Elected 2020 Jennifer Bailey Vice President, Internet Services, Apple Pay, Apple, Inc. Elected 2023 Cesar Conde Chairman, NBCUniversal News Group Elected 2016 Ian Cook Former Chairman, President and Chief Executive Officer, Colgate-Palmolive Company Elected 2008 Edith W. Cooper Former Executive Vice President and Global Head, Human Capital Management, The Goldman Sachs Group, Inc. Elected 2021 Susan M. Diamond Former Chief Financial Officer, Humana, Inc. Elected 2023 Dina Dublon Former Executive Vice President and Chief Financial Officer, JPMorgan Chase & Co. Elected 2005 Michelle Gass President and Chief Executive Officer, Levi Strauss & Co. Elected 2019 Ramon L. Laguarta Chairman of the Board of Directors and Chief Executive Officer, PepsiCo Elected 2018 Sir Dave J. Lewis Former Group Chief Executive Officer, Tesco PLC; Chair, Haleon plc; Chairman, Xlinks Elected 2020 David C. Page, MD Professor, Massachusetts Institute of Technology; Former Director and President, Whitehead Institute for Biomedical Research Elected 2014 Robert C. Pohlad President and Chief Executive Officer of various family-owned entities; Former Chairman and Chief Executive Officer, PepsiAmericas, Inc. Elected 2015 Daniel Vasella, MD Former Chairman and Chief Executive Officer, Novartis AG Elected 2002 Darren Walker President, Ford Foundation Elected 2016 Alberto Weisser Former Chairman and Chief Executive Officer, Bunge Limited Elected 2011 This list is as of March 28, 2025. This list is as of March 28, 2025. 2024 Citizenship Giving (in millions) PepsiCo Foundation $ 43 Corporate Contributions 2 Division Contributions 13 Division Estimated In-Kind 84 Total $ 142 See pages 29–31 of our Annual Report on Form 10-K for a list of PepsiCo Executive Officers subject to Section 16 of the Securities Exchange Act of 1934. PepsiCo Annual Report 2024 | 5 Page intentionally left blank For the fiscal year ended December 28, 2024 PepsiCo, Inc. Annual Report 2024 Form 10-K Page intentionally left blank UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 28, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 1-1183 PepsiCo, Inc. (Exact Name of Registrant as Specified in its Charter) North Carolina 13-1584302 (State or Other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.) 700 Anderson Hill Road, Purchase, New York 10577 (Address of principal executive offices and Zip Code) (914) 253-2000 Registrant’s telephone number, including area code Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934: Title of each class Trading Symbols Name of each exchange on which registered Common Stock, par value 1-2/3 cents per share PEP The Nasdaq Stock Market LLC 2.625% Senior Notes Due 2026 PEP26 The Nasdaq Stock Market LLC 0.750% Senior Notes Due 2027 PEP27 The Nasdaq Stock Market LLC 0.875% Senior Notes Due 2028 PEP28 The Nasdaq Stock Market LLC 0.500% Senior Notes Due 2028 PEP28A The Nasdaq Stock Market LLC 3.200% Senior Notes Due 2029 PEP29 The Nasdaq Stock Market LLC 1.125% Senior Notes Due 2031 PEP31 The Nasdaq Stock Market LLC 0.400% Senior Notes Due 2032 PEP32 The Nasdaq Stock Market LLC 0.750% Senior Notes Due 2033 PEP33 The Nasdaq Stock Market LLC 3.550% Senior Notes Due 2034 PEP34 The Nasdaq Stock Market LLC 0.875% Senior Notes Due 2039 PEP39 The Nasdaq Stock Market LLC 1.050% Senior Notes Due 2050 PEP50 The Nasdaq Stock Market LLC Securities registered pursuant to Section 12(g) of the Securities Exchange Act of 1934: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ¨ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ¨ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ¨ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ¨ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The aggregate market value of PepsiCo, Inc. Common Stock held by nonaffiliates of PepsiCo, Inc. (assuming for these purposes, but without conceding, that all executive officers and directors of PepsiCo, Inc. are affiliates of PepsiCo, Inc.) as of June 14, 2024, the last day of business of our most recently completed second fiscal quarter, was $224.8 billion (based on the closing sale price of PepsiCo, Inc.’s Common Stock on that date as reported on the Nasdaq Global Select Market). The number of shares of PepsiCo, Inc. Common Stock outstanding as of January 28, 2025 was 1,371,499,838. Documents Incorporated by Reference Portions of the Proxy Statement relating to PepsiCo, Inc.’s 2025 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K. PepsiCo, Inc. Form 10-K Annual Report For the Fiscal Year Ended December 28, 2024 Table of Contents PART I Item 1. Business 2 Item 1A. Risk Factors 12 Item 1B. Unresolved Staff Comments 26 Item 1C. Cybersecurity 26 Item 2. Properties 28 Item 3. Legal Proceedings 28 Item 4. Mine Safety Disclosures 29 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 33 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 120 Item 8. Financial Statements and Supplementary Data 120 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 120 Item 9A. Controls and Procedures 120 Item 9B. Other Information 121 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 121 PART III Item 10. Directors, Executive Officers and Corporate Governance 121 Item 11. Executive Compensation 122 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 122 Item 13. Certain Relationships and Related Transactions, and Director Independence 122 Item 14. Principal Accounting Fees and Services 122 PART IV Item 15. Exhibits and Financial Statement Schedules 123 Item 16. Form 10-K Summary 123 1 Forward-Looking Statements This Annual Report on Form 10-K 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. These risks and uncertainties include, but are not limited to, those described in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business – Our Business Risks.” Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. The discussion of risks in this report is by no means all-inclusive but is designed to highlight what we believe are important factors to consider when evaluating our future performance. PART I Item 1. Business. When used in this report, the terms “we,” “us,” “our,” “PepsiCo” and the “Company” mean PepsiCo, Inc. and its consolidated subsidiaries, collectively. Certain terms used in this Annual Report on Form 10-K are defined in the Glossary included in Item 7. of this report. Company Overview We were incorporated in Delaware in 1919 and reincorporated in North Carolina in 1986. We are a leading global beverage and convenient food company with a complementary portfolio of brands, including Lay’s, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker and SodaStream. 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. Our 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 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. 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. In December 2024, we acquired the Strauss Group’s 50% ownership in Sabra Dipping Company, LLC (Sabra) and Sabra became a wholly-owned subsidiary. Sabra makes, markets, distributes and sells Sabra refrigerated dips and spreads. 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. 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. 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. PBNA operates its own bottling plants and distribution facilities and sells branded finished goods directly to independent distributors and retailers. PBNA also sells concentrate and finished goods for our brands to authorized and independent bottlers, who in turn sell our branded finished goods to independent distributors and retailers in certain markets. PBNA also, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink tea and coffee products through joint ventures with Unilever (under the Lipton brand name) and Starbucks, respectively. 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. 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). 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. 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. 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. These branded products are sold to authorized and independent bottlers, independent distributors and retailers. 3 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). 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. 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. 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. 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. See Note 13 to our consolidated financial statements for further information. 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. 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. 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). 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. 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. 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. Effective beginning with our first quarter of 2025, we realigned certain of 4 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. 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. 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. 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. Direct-Store-Delivery We, our independent bottlers and our distributors operate DSD systems that deliver beverages and convenient foods directly to retail stores where the products are merchandised by our employees or our independent bottlers. DSD enables us to merchandise with maximum visibility and appeal. DSD is especially well-suited to products that are restocked often and respond to in-store promotion and merchandising. 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. Third-party distributors are particularly effective when greater distribution reach can be achieved by including a wide range of products on the delivery vehicles. For example, our foodservice and vending business distributes beverages and convenient foods to restaurants, businesses, schools and stadiums through third-party foodservice and vending distributors and operators. E-commerce Our products are also available and sold directly to consumers on a growing number of company-owned and third-party e-commerce websites and mobile commerce applications. 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. Our key packaging materials include plastic resins, including polyethylene 5 terephthalate (PET) and polypropylene resins used for plastic beverage bottles and film packaging used 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. 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. We employ specialists to secure adequate supplies of many of these items and have not experienced any significant continuous shortages that would prevent us from meeting our requirements. Many of these ingredients, raw materials and commodities are purchased in the open market. 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. In addition, risk to our supply of certain raw materials is mitigated through purchases from multiple geographies and suppliers. When prices increase, we may or may not pass on such increases to our customers. In addition, we continue to make investments to improve the sustainability and resources of our agricultural supply chain, including the development of our initiative to advance sustainable farming practices by our suppliers and expanding it further globally. 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. We also maintain voluntary supply chain finance agreements with several participating global financial institutions, pursuant to which our suppliers, at their sole discretion, may elect to sell their accounts receivable with PepsiCo to such global financial institutions. These agreements did not have a material impact on our business or financial results. See “Our Financial Results – Our Liquidity and Capital Resources” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 14 to our consolidated financial statements for further information. 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. 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. 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 2024, we shifted our 6 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. 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. 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. 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. Our Customers Our customers include wholesale and other distributors, foodservice customers, grocery stores, drug stores, convenience stores, discount/dollar stores, mass merchandisers, membership stores, hard discounters, e-commerce retailers and authorized independent bottlers, among others. We normally grant our independent bottlers exclusive contracts to sell and manufacture certain beverage products bearing our trademarks within a specific geographic area. These arrangements provide us with the right to charge our independent bottlers for concentrate, finished goods and Aquafina royalties and specify the manufacturing process required for product quality. We also grant distribution rights to our independent bottlers for certain beverage products bearing our trademarks for specified geographic areas. We rely on and provide financial incentives to our customers to assist in the distribution and promotion of our products to the consumer. For our independent distributors and retailers, these incentives include volume-based rebates, product placement fees, promotions and displays. For our independent bottlers, these incentives are referred to as bottler funding and are negotiated annually with each bottler to support a variety of trade and consumer programs, such as consumer incentives, advertising support, new product support, and vending and cooler equipment placement. Consumer incentives include pricing discounts and promotions, and other promotional offers. Advertising support is directed at advertising programs and supporting independent bottler media. New product support includes targeted consumer and retailer incentives and direct marketplace support, such as point-of-purchase materials, product placement fees, media and advertising. Vending and cooler equipment placement programs support the acquisition and placement of vending machines and cooler equipment. The nature and type of programs vary annually. Changes to the retail landscape, including increased consolidation of retail ownership, the continued growth of sales through e-commerce websites and mobile commerce applications, including through subscription services and other direct-to-consumer businesses, the integration of physical and digital operations among retailers, as well as the international expansion of hard discounters, and the current economic environment continue to increase the importance of major customers. 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. The loss of this customer would have a material adverse effect on our FLNA, QFNA and PBNA divisions. 7 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. In many countries in which our products are sold, including the United States, The Coca-Cola Company is our primary beverage competitor. 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. 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. However, The Coca-Cola Company has significant carbonated soft drink (CSD) share advantage in many markets outside the United States. Our beverage and convenient food products compete primarily on the basis of brand recognition and loyalty, taste, price, value, quality, product variety, innovation, distribution, shelf space, advertising, marketing and promotional activity (including digital), packaging, convenience, service and the ability to anticipate and effectively respond to consumer preferences and trends, including increased consumer focus on health and wellness and sustainability and the continued acceleration of e-commerce and other methods of distributing and purchasing products. Success in this competitive environment is dependent on effective promotion of existing products, effective introduction of new products and reformulations of existing products, increased efficiency in production techniques, effective incorporation of technology and digital tools across all areas of our business, the effectiveness of our advertising campaigns, marketing programs, product packaging and pricing, new vending and dispensing equipment and brand and trademark development and protection. We believe that the strength of our brands, innovation and marketing, coupled with the quality of our products and flexibility of our distribution network, allows us to compete effectively. Research and Development We engage in a variety of research and development activities and invest in innovation globally with the goal of meeting the needs of our customers and consumers and accelerating growth. 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 reducing water use in our operations and our agricultural practices and reducing our environmental impact in our operations throughout our value chain. 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. 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. It is our policy to abide by the laws and regulations around the world that apply to our businesses. The U.S. laws and regulations that we are subject to include, but are not limited to: the Federal Food, Drug and Cosmetic Act and various state laws governing food safety and food labeling; the Food Safety Modernization Act; the Occupational Safety and Health Act and various state laws and regulations governing workplace health and safety; various federal, state and local environmental protection laws, as discussed below; the Federal Motor Carrier Safety Act; the Federal Trade Commission Act; the Lanham Act and various state law statutory and common law duties regarding false advertising; various federal and state laws and regulations governing competition and trade practices, including the Robinson-Patman Act and the Clayton Act; various federal and state laws and regulations governing our employment practices, including those related to equal employment opportunity, such as the Equal Employment Opportunity Act and the National Labor Relations Act and those related to overtime compensation, such as the Fair Labor Standards Act; data privacy and personal data protection laws and regulations, including the California Consumer Privacy Act of 2018 (as modified by the California Privacy Rights Act); customs and foreign trade laws and regulations, including laws regarding the import or export of our products or ingredients used in our products and tariffs; laws regulating the sale of certain of our products in schools; laws regulating the ingredients or substances contained in, or attributes of, our products; laws regulating our supply chain, including the 2010 California Transparency in Supply Chains Act and laws relating to the payment of taxes. We are also required to comply with the Foreign Corrupt Practices Act and the Trade Sanctions Reform and Export Enhancement Act. We are also subject to various state and local statutes and regulations, including state consumer protection laws such as Proposition 65 in California, which requires that a specific warning appear on any product that contains a substance listed by the State of California as having been found to cause cancer or birth defects, unless the amount of such substance in the product is below a safe harbor level. 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. 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. 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 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. These taxes vary in scope and form: some apply to all beverages, including non-caloric beverages, while others apply only to beverages with a caloric sweetener (e.g., sugar). 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. In addition, certain jurisdictions in which our snack products are sold have either imposed or are considering imposing, new or increased taxes on the manufacture, distribution or sale of certain of our snack products as a result of ingredients (such as sugar, sodium or saturated fat) contained in our products. 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. 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. 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. Certain jurisdictions have either imposed or are considering imposing regulations designed to increase recycling rates, encourage waste reduction, restrict the sale of products utilizing certain packaging or to carry warnings about the environmental impact of plastic packaging. These regulations vary in scope and form from deposit return systems designed to incentivize the return of beverage containers, to extended producer responsibility policies and even restrictions or bans on the use of certain types of packaging, including single-use plastics and packaging containing per- and polyfluoroalkyl substances (PFAS). It is possible that similar or more restrictive requirements may be proposed or enacted in the future. We are also subject to national and local environmental laws in the United States and in foreign countries in which we do business, including laws related to water consumption and treatment, wastewater discharge and air emissions. In the United States, we are subject to the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act and other federal, state and local laws and regulations regarding handling, storage, release and disposal of wastes generated onsite and sent to third-party owned and operated offsite licensed facilities. Our operations outside the United States are subject to similar laws and regulations. In addition, continuing concern over environmental, social and governance matters, including climate change, is expected to continue to result in new or increased legal and regulatory requirements (in or outside of the United States) to reduce emissions to mitigate the potential effects of greenhouse gases, to limit or impose additional costs on commercial water use due to local water scarcity concerns or to expand mandatory reporting of certain environmental, social and governance metrics. Our policy is to abide by all applicable environmental laws and regulations, and we have internal programs in place with respect to our global environmental compliance. We have made, and plan to continue making, necessary expenditures for compliance with applicable environmental laws and regulations and that aim to make progress toward achieving our sustainability goals. While these expenditures have not had a material impact on our business, financial condition or results of operations to date, changes in environmental compliance requirements, and expenditures necessary to comply with such requirements or that aim to make progress toward achieving our sustainability goals, could adversely affect our financial performance. In addition, 10 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. 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. Risk Factors.” Human Capital PepsiCo believes that human capital management, including attracting, developing and retaining a high quality workforce, is critical to our long-term success. Our Board of Directors (Board) and its Committees provide oversight on a broad range of human capital management topics, including corporate culture, pay equity, health and safety, training and development and compensation and benefits. 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 strive to achieve an injury-free work environment. We also continue to invest in emerging technologies to protect our employees from injuries, including leveraging fleet telematics and distracted driving technology, resulting in reductions in road traffic incidents, and deploying ergonomic and machine safety risk reduction solutions. We believe that our culture is a competitive advantage that fuels innovation, enhances our ability to attract and retain talent and strengthens our reputation. We continually strive to improve the attraction, retention, and advancement of associates to ensure we sustain a high-caliber pipeline of talent that also represents the communities we serve. 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. 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). 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. 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. 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. Information that we post on our corporate website could be deemed material to investors. We encourage investors, the media, our customers, consumers, business 11 partners and others interested in us to review the information we post on these channels. 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. 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. Item 1A. Risk Factors. The following risks, some of which have occurred and any of which may occur in the future, can have a material adverse effect on our business or financial performance, which in turn can affect the price of our publicly traded securities. These are not the only risks we face. There may be other risks we are not currently aware of or that we currently deem not to be material but that may become material in the future. Business Risks Reduction in future demand for our products would adversely affect our business. Demand for our products depends in part on our ability to innovate and anticipate and effectively respond to shifts in consumer trends and preferences, including the types of products our consumers want and how they browse for, purchase and consume them. Consumer 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. Concerns with any of the foregoing could lead consumers to reduce or publicly boycott the purchase or consumption of our products. 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. Consumer preferences are also influenced by perception of our brand image or the brand images of our products, the success of our advertising and marketing campaigns, our ability to engage with our consumers in the manner they prefer, including through the use of digital media or assets, and the perception of our use of social media and our response to political and social issues, geopolitical events and tensions, wars and other military conflicts or catastrophic events. These and other factors have reduced and could continue to reduce consumers’ willingness to purchase certain of our products, including as a result of public boycotts. Any inability on our part to anticipate or react to changes in consumer preferences and trends, or make the right strategic investments to do so, including investments in artificial intelligence and data analytics to understand consumer trends, can lead to reduced demand for our products, lead to inventory write-offs or erode our competitive and financial position, thereby adversely affecting 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 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 Damage to our reputation or brand image can adversely affect our business. Maintaining a positive reputation globally is critical to selling our products. 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. Damage to our reputation or brand image has in the past and could in the future decrease demand for our products, thereby adversely affecting our business. Product recalls or other issues or concerns with respect to product quality and safety can adversely affect our business. We have recalled, and could in the future recall, products due to product quality or safety issues, including actual or alleged mislabeling, misbranding, spoilage, undeclared allergens, adulteration or contamination. Joint ventures in which we have an interest have also recalled, and could in the future recall, products for the same or other reasons. Product recalls have in the past and could in the future adversely affect our business by resulting in losses due to their cost, the destruction of product inventory, customer fines and returns or lost sales due to any unavailability of the product for a period of time. In addition, our manufacturing facilities and products have been and could continue to be subject to increased inspection by federal, state and local authorities. 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. 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. 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. 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 Any inability to compete effectively can adversely affect our business. Our products 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 and economy brand manufacturers 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. In many countries in which our products are sold, including the United States, The Coca-Cola Company is our primary beverage competitor. Our products compete primarily on the basis of brand recognition and loyalty, taste, price, value, quality, product variety, innovation, distribution, shelf space and preferable shelf placement, advertising, marketing and promotional activity, packaging, convenience, service and the ability to anticipate and effectively respond to consumer preferences and trends. 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. Failure to attract, develop and maintain a highly skilled workforce or effectively manage changes in our workforce can have an adverse effect on our business. Our business requires that we attract, develop and maintain a highly skilled workforce. Our employees are highly sought after by our competitors and other companies and our continued ability to compete effectively depends on our ability to attract, retain, develop and motivate highly skilled personnel for all areas of our organization. Our ability to do so has been and may continue to be impacted by challenges in the labor market, which has experienced and may continue to experience wage inflation, labor shortages, increased employee turnover, changes in availability of our workforce and changing worker expectations regarding flexible work models. Any unplanned turnover, sustained labor shortage or unsuccessful implementation of our succession plans to backfill current leadership positions, including the Chief Executive Officer, or failure to attract, develop and maintain a highly skilled workforce, including with key capabilities such as e-commerce and digital marketing, artificial intelligence and data analytic skills, can deplete our institutional knowledge base, erode our competitive advantage or result in increased costs due to increased competition for employees, higher employee turnover or increased employee benefit costs. 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. Water is also essential to the production of the raw materials needed in our manufacturing process. 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 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. Changes in the retail landscape or in sales to any key customer can adversely affect our business. The retail landscape continues to evolve, including continued growth in e-commerce channels and hard discounters. Our business will be adversely affected if we are unable to maintain and develop successful relationships with e-commerce retailers and hard discounters, while also maintaining relationships with our key customers operating in traditional retail channels (many of whom are also focused on increasing their e-commerce sales). Our business can be adversely affected if e-commerce channels and hard discounters take significant additional market share away from traditional retailers or we fail to find ways to create increasingly better digital tools and capabilities for our retail customers to enable them to grow their businesses. In addition, our business can be adversely affected if we are unable to profitably expand our own direct-to-consumer e-commerce capabilities. 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. 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. 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. 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 can continue to adversely affect our business. Disruption of our manufacturing operations or supply chain, including increased commodity, packaging, transportation, labor and other input costs, can adversely affect our business. We have experienced and could continue to experience disruption in our manufacturing operations and supply chain. 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. Natural disasters and extreme weather conditions also pose physical risks to our facilities and those of our suppliers, which could impair our production capabilities and disrupt our supply chain. Some raw materials and supplies, including packaging materials, are available only from a limited number of suppliers or from a sole supplier or are in short supply when seasonal demand is at its peak. 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. Any sustained or significant disruption in the future to the manufacturing or sourcing of products or materials could increase our costs and interrupt product supply, which can adversely impact our business. 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 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. 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. 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. 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. 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. Such conditions have resulted in and could continue to result in exchange rate fluctuation, limitations on access to credit markets and other corporate banking services, including working capital facilities, volatility in global stock markets and global economic uncertainty and heightened risk to employee safety, any of which 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. Our operations or the operations of our business partners, including the distribution of our products and the ingredients or other raw materials used in the production of our products, may be disrupted if such events persist for a prolonged period of time, including due to actions taken by governmental authorities in affected cities and regions, which can adversely affect our business. Our business can be adversely affected if we are unable to grow in developing and emerging markets. Our success depends in part on our ability to grow our business in developing and emerging markets. There can be no assurance that our products will be accepted or be successful in any particular developing or emerging market, due to competition, price, cultural differences, consumer preferences, regulation, method of distribution or otherwise. Our business in these markets has been and could continue in the 16 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. Bribery Act and the Trade Sanctions Reform and Export Enhancement Act; and adverse consequences, such as the assessment of fines or penalties, for any failure to comply with laws and regulations. Our business can be adversely affected if we are unable to expand our business in developing and emerging markets, effectively operate, or manage the risks associated with operating, in these markets, or achieve the return on capital we expect from our investments in these markets. Changes in economic conditions can adversely impact our business. 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. These uncertain or unfavorable economic conditions have resulted in and could continue to result in recessions or economic slowdowns; volatile commodity markets; labor shortages; highly inflationary economies, devaluation, fluctuation or demonetization of currency; contraction in the availability of credit; austerity or stimulus measures; the effects of any default by or deterioration in the creditworthiness of the countries in which our products are sold; or a decrease in the fair value of pension or post-retirement assets that could increase future employee benefit costs and/or funding requirements of our pension or post-retirement plans. Under difficult economic conditions, consumers may seek to reduce discretionary spending by forgoing purchases of our products or shifting toward lower-priced products offered by other companies, including private-label brands, which has impacted and could continue to impact consumer demand for our products. 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. We depend on information systems and technology, including public websites and cloud-based services, for many activities important to our business, including communications within our company, interfacing with customers and consumers; ordering and managing inventory; managing and operating our facilities; protecting confidential information, including personal data we collect; maintaining accurate financial records and complying with regulatory, financial reporting, legal and tax requirements. 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. 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. 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 subject to failure, disruption or unavailability, and increased vulnerability to cyberattacks and other cyber incidents. 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. In addition, the rapid evolution and increased adoption of artificial intelligence technologies may increase our cybersecurity risks, including generative artificial intelligence augmenting threat actors’ technological sophistication to enhance existing or create new malware. Cyberattacks and cyber incidents take many forms including cyber extortion, denial of service, social engineering, deepfake attacks and disinformation campaigns, introduction of viruses or malware (such as ransomware), exploiting vulnerabilities in hardware, software or other infrastructure (including zero-day vulnerabilities), hacking, website defacement or theft of passwords and other credentials, unauthorized use of computing resources for digital currency mining and business email compromise. As with other global companies, we are regularly subject to cyberattacks and other cyber incidents, including the types of attacks and incidents described above. Continued geopolitical instability has heightened the risk of cyberattacks. In addition, such cyberattacks may be difficult to detect for periods of time and, even if detected, the nature and extent of that cybersecurity incident may not be immediately clear and an investigation into a cybersecurity incident could take a significant amount of time to complete. These factors may inhibit our ability to provide rapid, complete and reliable information about the cybersecurity incident to customers, counterparties and regulators, as well as the public. If we do not allocate and effectively manage the resources necessary to continue building and maintaining our information technology infrastructure, or if we fail to timely identify or appropriately respond to cyberattacks or other cyber incidents, our business has been and can continue to be adversely affected, which has resulted in and can continue to result in some or all of the following: transaction errors, processing inefficiencies, inability to access our data or systems, lost revenues or other costs resulting from disruptions or shutdowns of offices, plants, warehouses, distribution centers or other facilities, compromises of personal data, confidential information, intellectual property or other sensitive data, litigation, claims, legal or regulatory proceedings, inquiries or investigations, fines or penalties, remediation costs, damage to our reputation or a negative impact on employee morale and the loss of current or potential customers. In addition, these risks also exist in acquired businesses, joint ventures or companies we invest in or partner with that use separate information systems or that have not yet been fully integrated into our information systems. Similar risks exist with respect to our business partners and third-party providers, including suppliers, software and cloud-based service providers, that we rely upon for aspects of various business processes and activities, including procurement, supply chain, manufacturing, distribution, information technology support services and administrative functions (including payroll processing, health and benefit plan administration and certain finance and accounting functions) and the systems managed, hosted, provided and/or used by such third parties and their vendors. 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. The need to coordinate with various third-party service providers, including with respect to timely notification and access to personnel and information concerning an incident, may complicate our efforts to address issues that arise. As a result, we are subject to the risk that the activities associated with our third- party service providers can adversely affect our business even if the attack or breach does not directly impact our systems or information. Although the cyber incidents and other systems disruptions that we have experienced to date have not had a material effect on our business, such incidents or disruptions could have a material adverse effect on us in the future. While we believe we devote significant resources to network security, disaster recovery, 18 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. 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 cyber incidents and information systems failures, 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. Failure to successfully complete or manage strategic transactions can adversely affect our business. We regularly review our portfolio of businesses and evaluate potential acquisitions, joint ventures, distribution agreements, divestitures, refranchisings and other strategic transactions. 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. Risks associated with strategic transactions include integrating manufacturing, distribution, sales, accounting, financial reporting and administrative support activities and information technology systems with our company or difficulties separating such personnel, activities and systems in connection with divestitures; operating through new business models or in new categories or territories; motivating, recruiting and retaining executives and key employees; conforming controls (including internal control over financial reporting, disclosure controls and procedures and data protection and cybersecurity) and policies (including with respect to environmental compliance, food safety, health and safety compliance and compliance with anti-bribery laws); retaining existing customers and consumers and attracting new customers and consumers; managing tax costs or inefficiencies; maintaining good relations with divested or refranchised businesses in our supply or sales chain; inability to offset loss of revenue associated with divested brands or businesses; recognition of impairment charges in connection with potential divestitures; managing the impact of business decisions or other actions or omissions of our joint venture partners that may have different interests than we do; and other unanticipated problems or liabilities, such as contingent liabilities and litigation. Strategic transactions that are not successfully completed or managed effectively, or our failure to effectively manage the risks associated with such transactions, have in the past and could continue to result in adverse effects 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. Our reliance on third-party service providers and enterprise-wide systems can have an adverse effect on our business. We rely on third-party service providers, including software and cloud data service providers, for certain areas of our business, including procurement, supply chain, manufacturing, distribution, information technology support services and administrative functions (such as payroll processing, health and benefit plan administration and certain finance and accounting functions). Failure by these third parties to meet their contractual, regulatory and other obligations to us, or our failure to adequately monitor their performance, has in the past and could continue to result in our inability to achieve the expected cost savings or efficiencies and result in additional costs to correct errors made by such service providers. 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 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, if we do not allocate and effectively manage the resources necessary to build and sustain the proper information technology infrastructure, or if we fail to achieve the expected benefits from this initiative, our business could be adversely affected. Climate change or measures to address climate change and other sustainability matters can negatively affect our business or damage our reputation. Climate change may increase the frequency or severity of natural disasters and other extreme weather conditions, including rising temperatures and drought. Natural disasters and extreme weather conditions could pose physical risks to our facilities, impair our production capabilities, disrupt our supply chain or impact demand for our products. In addition, climate change or other weather-related disruptions to our supply chain may also have a negative effect on agricultural production resulting in decreased availability or less favorable pricing for certain commodities that are necessary for our products, such as potatoes, sugar cane, corn, wheat, rice, oats, oranges and other commodities. 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. This increased focus may result in new or increased legal and regulatory requirements, such as potential carbon pricing programs or revised product labeling requirements or other regulatory measures, which could, along with initiatives to meet our sustainability goals, continue to result in significant increased costs and require additional investments in facilities and equipment. As a result, the effects of climate change can negatively affect our business and operations. 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. 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, 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. 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. 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 Strikes or work stoppages can cause our business to suffer. Many of our employees and employees of third parties that are involved in the manufacturing, production or distribution of our products are covered by collective bargaining agreements, and other employees may seek to be covered by collective bargaining agreements. Strikes or work stoppages or other business interruptions have occurred and may occur in the future if we or the third parties that are involved in the manufacturing, production and distribution of our products are unable to renew, or enter into new, collective bargaining agreements on satisfactory terms and can impair manufacturing and distribution of our products or the ingredients, raw materials or commodities used in our products, interrupt product supply, lead to a loss of sales, increase our costs or otherwise affect our ability to fully implement future operational changes to enhance our efficiency or to adapt to changing business needs or strategy, all of which can adversely affect our business. Financial Risks Failure to realize benefits from our productivity initiatives or organizational restructurings can adversely affect our financial performance. Our future growth depends, in part, on our ability to continue to reduce costs and improve efficiencies, including digitalization of our operations, our multi-year phased implementation of shared business service organizational models and organizational restructuring. 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. Some of these measures could result in unintended consequences, such as business disruptions, distraction of management and employees, reduced morale and productivity, unexpected employee attrition, an inability to attract or retain key personnel and negative publicity. If we are unable to successfully implement our productivity initiatives, digitalization of our operations or organizational restructurings as planned or do not achieve expected savings or efficiencies as a result of these initiatives, we may not realize all or any of the anticipated benefits, resulting in adverse effects on our financial performance. A deterioration in our estimates and underlying assumptions regarding the future performance of our business or investments can result in impairment charges that adversely affect our results of operations. We conduct impairment tests on our goodwill and other indefinite-lived intangible assets annually or more frequently if circumstances indicate that impairment may have occurred. In addition, amortizable intangible assets, equity method investments, equity investments without readily determinable fair values, investments in available-for-sale debt securities, property, plant and equipment and other long-lived assets are evaluated for impairment upon a significant change in the operating or macroeconomic environment. 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. 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 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. 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. Our borrowing costs and access to capital and credit markets can be adversely affected by a downgrade or potential downgrade of our credit ratings. Rating agencies routinely evaluate us and their ratings are based on a number of factors, including our cash generating capability, levels of indebtedness, policies with respect to shareholder distributions and our financial strength generally, as well as factors beyond our control, such as the state of the economy and our industry. We expect to maintain Tier 1 commercial paper access, which we believe will facilitate appropriate financial flexibility and ready access to global credit markets at favorable interest rates. Any downgrade or announcement that we are under review for a potential downgrade of our credit ratings, especially any downgrade to below investment grade, can increase our future borrowing costs, impair our ability to access capital and credit markets on terms commercially acceptable to us or at all, result in a reduction in our liquidity, or impair our ability to access the commercial paper market with the same flexibility that we have experienced historically (and therefore require us to rely more heavily on more expensive types of debt financing), all of which can adversely affect our financial performance. Legal, Tax and Regulatory Risks Taxes aimed at our products can adversely affect our business or financial performance. Certain jurisdictions in which our products are sold have either imposed, or are considering imposing, new or increased taxes on the manufacture, distribution or sale of certain of our beverage products as a result of ingredients contained in such products. These taxes vary in scope and form: some apply to all beverages, including non-caloric beverages, while others apply only to beverages with a caloric sweetener (e.g., sugar). Similarly, some measures apply a single tax rate per ounce/liter on beverages containing over a certain amount of added sugar (or other sweetener), some apply a graduated tax rate depending upon the amount of added sugar (or other sweetener) in the beverage and others apply a flat tax rate on beverages containing any amount of added sugar (or other sweetener). 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. In addition, certain jurisdictions in which our snack products are sold, have either imposed, or are considering imposing, new or increased taxes on the manufacture, distribution or sale of certain of our snack products as a result of ingredients (such as sugar, sodium or saturated fat) contained in such products. 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. 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. 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 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. 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. 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. The imposition or proposed imposition of additional limitations on the marketing or sale of our products has in the past reduced and could continue to reduce overall consumption of our products, lead to negative publicity or leave consumers with the perception that our products do not meet their health and wellness needs, resulting in an adverse effect on our business and financial performance. Laws and regulations related to the use or disposal of plastics or other packaging materials can adversely affect our business and financial performance. We rely on diverse packaging solutions to safely deliver products to our customers and consumers. Certain of our products are sold in packaging designed to be recyclable, commercially compostable, biodegradable or reusable. 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. Packaging waste not properly disposed of that displays one or more of our brands has in the past resulted in and could continue to result in negative publicity, litigation, government investigations or other action or reduced consumer demand for our products, adversely affecting our financial performance. Many jurisdictions in which our products are sold have imposed or are considering imposing laws, regulations or policies intended to encourage the use of sustainable packaging, waste reduction, increased recycling rates or decreased use of single-use plastics or to restrict the sale of products utilizing certain packaging. These laws, regulations and policies vary in form and scope and include extended producer responsibility policies, plastic or packaging taxes, minimum recycled content requirements, restrictions on certain products and materials, requirements for bottle caps to be tethered to bottles, restrictions or bans on the use of certain types of packaging, including single-use plastics and packaging containing PFAS, restrictions on labeling related to recyclability, requirements to charge deposit fees and requirements to scale reusable or refillable packaging. 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. 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. Failure to comply with personal data protection and privacy laws can adversely affect our business. 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. Our efforts to comply with these laws and regulations, including the California Consumer Privacy Act, as amended by the California Privacy Rights Act, as well as similar legislation enacted in other states, as well as the European Union’s General Data Protection Regulation (GDPR), the U.K. General Data Protection Regulation (which implements the 23 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. 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. Increases in income tax rates, changes in income tax laws or disagreements with tax authorities can adversely affect our financial performance. Increases in income tax rates or other changes in tax laws, including changes in how existing tax laws are interpreted or enforced, can adversely affect our financial performance. 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, numerous countries have agreed to a statement in support of the Organization for Economic Co-operation and Development model (OECD) rules that propose a partial global profit reallocation and a global minimum tax rate of 15%. 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. 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. We are also subject to regular reviews, examinations and audits by numerous taxing authorities with respect to income and non-income based taxes. 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. If we are unable to adequately protect our intellectual property rights, or if we are found to infringe on the intellectual property rights of others, our business can be adversely affected. We possess intellectual property rights that are important to our business, including ingredient formulas, trademarks, copyrights, patents, business processes and other trade secrets. The laws of various jurisdictions in which we operate have differing levels of protection of intellectual property. Our competitive position and the value of our products and brands can be reduced and our business adversely affected if we fail to obtain or adequately protect our intellectual property, including our ingredient formulas, or if there is a change in law that limits or removes the current legal protections afforded our intellectual property. 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. In addition, our use of artificial intelligence may result in increased claims of infringement or other claims, including those based on unauthorized use of third-party technology or content. Such infringement or allegations of infringement could result in expensive litigation and damages, damage to our reputation, disruption to our operations, injunctions against development, manufacturing, use and/or sale of certain products, inventory write-offs or other limitations on our ability to introduce new products or improve the quality of existing products, resulting in an adverse effect on 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. 24 Failure to comply with laws and regulations applicable to our business can adversely affect our business. 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. In addition, in many jurisdictions, compliance with competition and antitrust laws is of special importance to us due to our competitive position, as is compliance with anti-corruption laws. 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. 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. 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. In addition, the entry into new markets or categories has resulted in and could continue to result in our business being subject to additional regulations resulting in higher compliance costs. If one jurisdiction imposes or proposes to impose new laws or regulations that impact the manufacture, distribution or sale of our products, other jurisdictions may follow. Failure to comply with such laws or regulations (or allegations thereof) can subject us to criminal or civil investigations or enforcement actions, including voluntary and involuntary document requests, fines, injunctions, product recalls, penalties, disgorgement of profits or activity restrictions, all of which can adversely affect 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. Potential liabilities and costs from litigation, claims, legal or regulatory proceedings, inquiries or investigations can have an adverse impact on our business. 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. These matters are inherently uncertain and there is no guarantee that we will be successful in defending ourselves or that our assessment of the materiality of these matters and the likely outcome or potential losses and established reserves will be consistent with the ultimate outcome of such matters. Responding to these matters, even those that are ultimately non-meritorious, requires us to incur 25 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. Item 1B. Unresolved Staff Comments. We have received no written comments regarding our periodic or current reports from the staff of the SEC that were issued 180 days or more preceding the end of our 2024 fiscal year and that remain unresolved. Item 1C. Cybersecurity. Cybersecurity Risk Management and Strategy We are regularly subject to cyberattacks and other cyber incidents. In response, we have implemented cybersecurity processes, technologies, and controls to aid in our efforts to assess, identify, and manage cybersecurity risks. Our enterprise risk management framework considers cybersecurity risk alongside other company risks as part of our overall risk assessment process. Our 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. We assess PepsiCo’s Information Security program using an industry-leading cybersecurity framework from the National Institute of Standards and Technology. To help assess and identify our cybersecurity risks, we maintain internal resources to perform penetration testing designed to simulate evolving tactics and techniques of real-world threat actors, engage with industry partners and law enforcement and intelligence communities and conduct tabletop exercises and periodic risk interviews across our business. We also engage an independent third party to perform internal and external penetration testing of PepsiCo’s environment periodically and engage other third parties to periodically conduct assessments of our cybersecurity capabilities. In addition, we continue to expand training and awareness practices to mitigate human risk, including mandatory computer-based training, internal communications, and regular phishing awareness campaigns that are designed to emulate real-world contemporary threats and provide immediate feedback (and, if necessary, additional training or remedial action) to employees. 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. Additionally, we require those third parties to agree by contract to implement appropriate security controls. Security issues are documented and tracked and periodic monitoring is conducted for third parties in order to mitigate risk. In addition to the processes, technologies, and controls that we have in place to reduce the likelihood of a successful material cyberattack, the Company has established well-defined response procedures to address cyber events that do occur. The program provides for the coordination of various corporate functions and governance groups and serves as a framework for the execution of responsibilities across businesses and operational roles. Our incident response plan coordinates the activities we take to prepare for, detect, respond to and recover from cybersecurity incidents, which include processes to triage, assess severity for, escalate, contain, investigate, and remediate the incident, as well as to assess for potential disclosure, comply with potentially applicable legal obligations and mitigate brand and reputational damage. We also maintain insurance coverage that, subject to its terms and conditions, is intended to address costs associated with certain aspects of cyber incidents and information systems failures. 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 affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition. See “Item 1A. Risk Factors” for further information about these risks. Cybersecurity Governance Cybersecurity is an important part of our risk management processes and an area of focus for our Board and management. Given that cybersecurity risks can impact various areas of responsibility of the Committees of the Board, the Board believes it is useful and effective for the full Board to maintain direct oversight over cybersecurity matters. In 2021, the Board amended our Corporate Governance Guidelines to specifically mention cybersecurity as an area of Board oversight to reflect this existing practice. The Board receives and provides feedback on regular updates from management, including from the Company’s Chief Strategy and Transformation Officer and the Company’s Chief Information Security Officer, regarding cybersecurity governance processes, the status of projects to strengthen internal cybersecurity, results from third-party assessments, and also discusses any significant cyber incidents, including recent incidents at other companies and the emerging threat landscape. Our cybersecurity risk management and strategy processes, which are discussed in greater detail above, are led by the Company’s Chief Strategy and Transformation Officer and the Company’s Chief Information Security Officer. Such individuals have significant prior work experience in various roles across multiple industries involving managing information security, developing cybersecurity strategy, implementing effective information and cybersecurity programs and managing compliance environments. 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 Item 2. Properties. Our principal executive office located in Purchase, New York and our facilities located in Plano, Texas, all of which we own, are our most significant corporate properties. 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. Significant 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. Most of our plants are owned or leased on a long-term basis. In addition to company-owned or leased properties described above, we also utilize a highly distributed network of plants, warehouses and distribution centers that are owned or leased by our contract manufacturers, co-packers, strategic alliances or joint ventures in which we have an equity interest. We believe that our properties generally are in good operating condition and, taken as a whole, are suitable, adequate and of sufficient capacity for our current operations. Item 3. Legal Proceedings. 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. (the NYS Matter). This matter was assigned to the Commercial Division of the New York State Supreme Court – Erie County. On November 8, 2024, the court granted our motion to dismiss the complaint in its entirety. On December 9, 2024, the plaintiff filed an appeal to the New York State Supreme Court Appellate Division – Fourth Department. 28 • 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). This 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). 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. 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. 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. Business – Regulatory Matters” and “Item 1A. Risk Factors.” 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. Gallagher 65 Senior Vice President and Controller, PepsiCo Ram Krishnan 54 Chief Executive Officer, U.S. Beverages Ramon L. 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. Caulfield has served as Executive Vice President and Chief Financial Officer, PepsiCo, since November 2023. 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. 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 David J. Flavell has served as Executive Vice President, General Counsel and Corporate Secretary, PepsiCo since 2021. Mr. Flavell previously held a number of leadership roles at PepsiCo, including as Senior Vice President, Deputy General Counsel and Chief Compliance & Ethics Officer for PepsiCo from 2019 to 2021, as Senior Vice President, Deputy General Counsel & Managing Attorney from 2018 to 2019, as Senior Vice President, Deputy General Counsel & General Counsel, International and Global Groups from 2017 to 2018, as Senior Vice President, Deputy General Counsel & General Counsel, Latin America and Frito-Lay North America from 2016 to 2017, as Senior Vice President, General Counsel, Latin America and Frito-Lay North America from 2015 to 2016, and as Senior Vice President, General Counsel, Asia, Middle East and Africa from 2011 to 2015. 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. 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. Beverages, effective January 2025. Prior to that, 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. 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. Prior to PepsiCo, Mr. Krishnan spent six years at General Motors Company as a marketing manager for Cadillac. Ramon L. Laguarta has served as PepsiCo’s Chief Executive Officer and a director on the Board since 2018, and assumed the role of Chairman of the Board in 2019. Mr. Laguarta previously served as President of PepsiCo from 2017 to 2018. Prior to serving as President, Mr. Laguarta held a variety of positions of increasing responsibility in Europe, including as Commercial Vice President of PepsiCo Europe from 2006 to 2008, PepsiCo Eastern Europe Region from 2008 to 2012, President, Developing & Emerging Markets, PepsiCo Europe from 2012 to 2015, Chief Executive Officer, PepsiCo Europe in 2015, and Chief Executive Officer, Europe Sub-Saharan Africa from 2015 until 2017. From 2002 to 2006, he was General Manager for Iberia Snacks and Juices, and from 1999 to 2001, a General Manager for Greece Snacks. Prior to joining PepsiCo in 1996 as a marketing vice president for Spain Snacks, Mr. 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. Prior to this role, he served as Chief Executive Officer, Europe from 2019 to 2024 and as Chief Executive Officer, Europe Sub-Saharan Africa in 2019 and as President, Europe Sub-Saharan Africa from 2017 to early 2019. Mr. 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 30 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. Santilli 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. 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. 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. Schmitt served as executive vice president, chief people officer of Cognizant Technology Solutions Corp. from 2020 to 2023. Prior to joining Cognizant, Ms. Schmitt served in various executive human resources roles at Walmart, Inc., including as senior vice president, chief people officer of Sam’s Club, a division of Walmart, from 2018 to 2020, senior vice president, chief people officer of U.S. eCommerce and corporate functions from late 2016 to 2018, and vice president, human resources – technology from early 2016 to late 2016. 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. Previously, he served as Chief Executive Officer, Africa, Middle East, South Asia and International Beverages in 2024, as Chief Executive Officer, Africa, Middle East, South Asia from 2019 to February 2024, as Chief Executive Officer, Sub-Saharan Africa in 2019 and as Executive Vice President, Global Categories and Franchise Management from 2015 to 2019. Before that, he led the global Pepsi-Lipton Joint Venture as President from 2014 to 2015. Prior to such role, Mr. Willemsen served as PepsiCo’s Senior Vice President and General Manager, South East Europe from 2011 to 2013, as Senior Vice President and General Manager, Commercial, Europe from 2008 to 2011, as Senior Vice President and General Manager, Northern Europe from 2006 to 2008, as Vice President, General Manager, Benelux from 2000 to 2005 and as Commercial Director, Benelux for the snacks business from 1998 to 2000. 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. 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. 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. 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. 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 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Stock Trading Symbol – PEP. Stock Exchange Listings – The Nasdaq Global Select Market is the principal market for our common stock, which is also listed on the SIX Swiss Exchange. 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. 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. 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. 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. Issuer Purchases of Common Stock Period Total Number of Shares Repurchased(a) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs 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. Shares repurchased under this program may be repurchased in open market transactions, in privately negotiated transactions, in accelerated stock repurchase transactions or otherwise. 32 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. OUR BUSINESS Executive Overview 34 Our Operations 35 Other Relationships 36 Our Business Risks 36 OUR FINANCIAL RESULTS Results of Operations – Consolidated Review 41 Results of Operations – Division Review 43 FLNA 45 QFNA 45 PBNA 45 LatAm 46 Europe 46 AMESA 46 APAC 47 Non-GAAP Measures 47 Items Affecting Comparability 49 Our Liquidity and Capital Resources 52 Changes in Line Items in Our Consolidated Financial Statements 54 Return on Invested Capital 55 OUR CRITICAL ACCOUNTING POLICIES AND ESTIMATES Revenue Recognition 56 Goodwill and Other Intangible Assets 57 Income Tax Expense and Accruals 58 Pension and Retiree Medical Plans 59 CONSOLIDATED STATEMENT OF INCOME 61 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 62 CONSOLIDATED STATEMENT OF CASH FLOWS 63 CONSOLIDATED BALANCE SHEET 65 CONSOLIDATED STATEMENT OF EQUITY 66 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1 – Basis of Presentation and Our Divisions 67 Note 2 – Our Significant Accounting Policies 74 Note 3 – Restructuring and Impairment Charges 79 Note 4 – Intangible Assets 81 Note 5 – Income Taxes 84 Note 6 – Share-Based Compensation 88 Note 7 – Pension, Retiree Medical and Savings Plans 92 Note 8 – Debt Obligations 98 Note 9 – Financial Instruments 100 Note 10 – Net Income Attributable to PepsiCo per Common Share 106 Note 11 – Accumulated Other Comprehensive Loss Attributable to PepsiCo 107 Note 12 – Leases 108 Note 13 – Acquisitions and Divestitures 110 Note 14 – Supply Chain Financing Arrangements 112 Note 15 – Supplemental Financial Information 113 Note 16 – Legal Contingencies 114 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 115 GLOSSARY 118 33 Our discussion and analysis is intended to help the reader understand our results of operations and financial condition and is provided as an addition to, and should be read in connection with, our consolidated financial statements and the accompanying notes. Definitions of key terms can be found in the glossary. Unless otherwise noted, tabular dollars are presented in millions, except per share amounts. All per share amounts reflect common stock per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Percentage changes are based on unrounded amounts. 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. For discussion on results of operations and financial condition pertaining to 2022 and year-over-year comparisons between 2023 and 2022, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 30, 2023. OUR BUSINESS Executive Overview PepsiCo is a leading global food and beverage company with a diverse and complementary portfolio of brands such as Lay’s, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker and SodaStream. We operate through various channels, including authorized bottlers, contract manufacturers, and other third parties, to produce, market, distribute, and sell a wide array of beverages and convenient foods. Our reach extends to customers and consumers in more than 200 countries and territories around the world. As a global company with strong local connections, we faced many of the same challenges in 2024 as our consumers, customers, and competitors worldwide. These included ongoing supply chain disruptions, persistent inflationary pressures, evolving consumer preferences and behaviors, an intensely competitive business environment, the continued expansion of e-commerce in a rapidly changing retail landscape, ongoing macroeconomic and political volatility, and an increasingly complex regulatory environment. In response to these challenges, we have continued to adapt and innovate, reinforcing our resilience and continued focus on growth. 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. A Strategy for the Future: pep+ is our strategy to transform our company to create sustainable growth and value – today, tomorrow, and many years into the future. It is the way we are transforming our supply chain, evolving our portfolio, and making sure we have the right capabilities to support our people and our business throughout the world. As a food and agricultural leader, we are working to help farmers adapt to climate change through investments in regenerative agriculture, training programs, and innovative technologies. We are operating net-zero water and energy facilities across many markets, electrifying our transport fleets, and accelerating the use of recycled plastics, so we can try to build a more sustainable business while reducing operational costs. Our leadership in regenerative agriculture not only supports farmers and the planet, but also strengthens our supply chain, helping us become more resilient while positioning us to deliver long-term value for shareholders. And thanks to the diversification across our portfolio, our categories, and the geographies in which we operate, we are better equipped to capitalize on opportunities across a wide range of consumer needs. Our pep+ initiatives and ambitions are geared toward driving growth across every aspect of our operations, so that we can strengthen our business and deliver more value for our stakeholders. Transforming Our Portfolio: Our consumer-centric portfolio transformation revolves around three key elements: our work to evolve our recipes to reduce sodium, saturated fat, and added sugar, while 34 incorporating more diverse ingredients; our efforts to find innovative ways to deliver new occasions and engagements for consumers across our existing portfolio; and the strategic acquisition of brands that help us incorporate new and complementary foods and beverages into our portfolio. Bringing Our Business Closer to the Consumer: We are continuously making investments that aim to help us provide consumers with more value, more personalization, and more choices. We will continue to innovate to create foods, beverages, and experiences that meet consumer needs without compromising the taste or quality they expect. We are making changes to our organization to help us further increase productivity, sharpen our focus on growth and value, and create opportunities to better harness the expertise and scale of our food and beverage operations across markets. In the United States, we are reorganizing our U.S. Foods and Beverages businesses into one unified North America Region to harness scale, unlock synergies, and accelerate growth through category-leading brands and innovative products. Internationally, we are realigning our international beverages and foods businesses to ensure each category is distinctly managed and has the right resources and capabilities to meet the unique needs of consumers in every market. North America Business: As part of the changes to our organizational structure, we’re working to enhance our connection with North American consumers, bringing sales and consumer insights closer together, so we can identify and act efficiently on shifts in demand. Combining supply chain operations allows us to harness scale, reduce duplication, and create a more cohesive system for managing inventory and logistics, thereby optimizing our go-to-market strategy and helping drive consistent best practices across the business. At the same time, the company is focused on expanding our better-for-you offerings and product innovations in both foods and drinks to meet evolving consumer preferences. Through advanced technologies like artificial intelligence, we are optimizing our supply chain, reducing waste, and improving speed to market. These steps ensure the company operates with more precision while protecting margins in an inflationary environment. The immediate focus is on meeting consumer needs, operational excellence, competing for market share, and maintaining agility and resilience. These efforts are foundational to the North America business and driving near-term growth, while setting the stage for long- term success. Productivity Fuels our Ability to Perform: In 2024, we delivered record productivity. Increases in automation in our plants and warehouses have empowered frontline decision-making, improved optimization across our transportation and fleet networks, and allowed greater focus on cost management and waste elimination. These efforts fuel our ability to reinvest in our brands and capabilities, so that we are well-positioned to support areas in which our business is performing well, while simultaneously allowing us to develop in new ways across our markets and our categories. Focus on Growth: We remain focused on delivering growth and fueling innovation by driving positive action for people and the planet. By improving our productivity and aligning our operations and strategy to meet consumer needs, we aim to be well positioned to navigate the complexities of the global market and deliver sustainable, long-term value to our consumers and stakeholders. Our Operations See “Item 1. Business” for information on our divisions and a description of our distribution network, ingredients and other supplies, brands and intellectual property rights, seasonality, customers, competition, research and development, regulatory matters and human capital. In addition, see Note 1 to our consolidated financial statements for financial information about our divisions and geographic areas. 35 Other Relationships Certain members of our Board also serve on the boards of certain vendors and customers. These Board members do not participate in our vendor selection and negotiations nor in our customer negotiations. Our transactions with these vendors and customers are in the normal course of business and are consistent with terms negotiated with other vendors and customers. In addition, certain of our employees serve on the boards of Pepsi Bottling Ventures LLC and other affiliated companies of PepsiCo and do not receive incremental compensation for such services. Our Business Risks Risks Associated with Commodities and Our Supply Chain During 2024, we continued to experience higher operating costs, including on transportation and labor costs, which may continue in 2025. Many of the commodities used in the production and transportation of our products are purchased in the open market. 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. A number of external factors, including volatile geopolitical conditions, the inflationary cost environment, adverse weather conditions, supply chain disruptions and labor shortages, have impacted and may continue to impact transportation and labor costs. When prices increase, we may or may not pass on such increases to our customers, which may result in reduced volume, revenue, margins and operating results. See Note 9 to our consolidated financial statements for further information on how we manage our exposure to commodity prices. Risks Associated with Climate Change Certain jurisdictions in which our products are made, manufactured, distributed or sold have either imposed, or are considering imposing, new or increased legal and regulatory requirements to reduce or mitigate the potential effects of climate change, including regulation of greenhouse gas emissions and potential carbon pricing programs. These new or increased legal or regulatory requirements, along with initiatives to meet our sustainability goals, could result in significant increased costs and additional investments in facilities and equipment. However, we are unable to predict the scope, nature and timing of any new or increased environmental laws and regulations and therefore cannot predict the ultimate impact of such laws and regulations on our business or financial results. We continue to monitor existing and proposed laws and regulations in the jurisdictions in which our products are made, manufactured, distributed and sold and to consider actions we may take to potentially mitigate the unfavorable impact, if any, of such laws or regulations. Risks Associated with International Operations We are subject to risks in the normal course of business that are inherent to international operations. 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. Debt and credit issues, currency controls or fluctuations in certain of these international markets (including restrictions on the transfer of funds to and from certain markets), as well as the threat or imposition of new, expanded or retaliatory tariffs (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 or export controls have also continued to impact our operations in certain of these international markets. We continue to closely monitor the 36 economic, operating and political environment in the markets in which we operate, including risks of additional impairments or write-offs and currency devaluation, and to identify actions to potentially mitigate any unfavorable impacts on our future results. Our operations in Russia accounted for 4% of our consolidated net revenue for each of the years ended December 28, 2024 and December 30, 2023. Russia accounted for 3% and 3% of our consolidated assets, 10% and 6% of our consolidated cash and cash equivalents, and 41% and 35% of our accumulated currency translation adjustment loss as of December 28, 2024 and December 30, 2023, respectively. Our operations in Ukraine accounted for less than 1% of our consolidated net revenue for each of the years ended December 28, 2024 and December 30, 2023 and of our consolidated assets as of December 28, 2024 and December 30, 2023. See Notes 1 and 4 to our consolidated financial statements for a discussion of impairment and other charges recognized in the years ended December 28, 2024, December 30, 2023, and December 31, 2022. Imposition of Taxes and Regulations on our Products Certain jurisdictions in which our products are made, manufactured, distributed or sold have either imposed, or are considering imposing, new or increased taxes or regulations on the manufacture, distribution or sale of our products or their packaging, ingredients or substances contained in, or attributes of, our products or their packaging, commodities used in the production of our products or their packaging or the recyclability or recoverability of our packaging. These taxes and regulations vary in scope and form. For example, some taxes apply to all beverages, including non-caloric beverages, while others apply only to beverages with a caloric sweetener (e.g., sugar). Further, some regulations apply to all products using certain types of packaging (e.g., plastic), while others are designed to increase the sustainability of packaging, encourage waste reduction and increased recycling rates or facilitate the waste management process or restrict the sale of products in certain packaging. In addition, certain jurisdictions in which our snack products are sold have either imposed or are considering imposing, new or increased taxes on the manufacture, distribution or sale of certain of our snack products as a result of ingredients (such as sugar, sodium or saturated fat) contained in our products. We sell a wide variety of beverages and convenient foods in more than 200 countries and territories and the profile of the products we sell, the amount of revenue attributable to such products and the type of packaging used vary by jurisdiction. Because of this, we cannot predict the scope or form potential taxes, regulations or other limitations on our products or their packaging may take, and therefore cannot predict the impact of such taxes, regulations or limitations on our financial results. In addition, taxes, regulations and limitations may impact us and our competitors differently. We expect continued scrutiny of certain ingredients and substances present in certain of our products and packaging. We continue to monitor existing and proposed taxes and regulations in the jurisdictions in which our products are made, manufactured, distributed and sold and to consider actions we may take to potentially mitigate the unfavorable impact, if any, of such taxes, regulations or limitations, including advocating alternative measures with respect to the imposition, form and scope of any such taxes, regulations or limitations. OECD Global Minimum Tax Numerous countries, including European Union member states, have enacted, or are expected to enact, legislation incorporating the OECD model rules for a global minimum tax rate of 15%. Widespread implementation is expected by the end of 2025, with certain countries that have not yet enacted potentially applying the legislation as of a retroactive date. As the legislation becomes effective in countries in which we do business, our taxes could increase and negatively impact our provision for income taxes. We will continue to monitor pending legislation and implementation by individual countries and evaluate the potential impact on our business in future periods. 37 Retail Landscape Our industry continues to be affected by disruption of the retail landscape, including the continued growth in sales through e-commerce websites and mobile commerce applications, including through subscription services, the integration of physical and digital operations among retailers and the international expansion of hard discounters. We have seen and expect to continue to see a further shift to e-commerce, online-to- offline and other online purchasing by consumers. We continue to monitor changes in the retail landscape and seek to identify actions we may take to build our global e-commerce and digital capabilities, such as expanding our direct-to-consumer business, and distribute our products effectively through all existing and emerging channels of trade and potentially mitigate any unfavorable impacts on our future results. The retail industry also continues to be impacted by the actions and increasing power of retailers, including as a result consolidation of ownership resulting in large retailers or buying groups with increased purchasing power, particularly in North America, Europe and Latin America. We have seen and expect to continue to see retailers and buying groups impact our ability to compete in these jurisdictions. We continue to monitor our relationships with retailers and buying groups and seek to identify actions we may take to maintain mutually beneficial relationships and resolve any significant disputes and potentially mitigate any unfavorable impacts on our future results. 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. To identify, assess, prioritize, address, manage, monitor and communicate these risks across the Company’s operations and foster a corporate culture of integrity and risk awareness, we leverage an integrated risk management framework. This framework includes the following: • PepsiCo’s Board has oversight responsibility for PepsiCo’s integrated risk management framework. One of the Board’s primary responsibilities is overseeing and interacting with senior management with respect to key aspects of the Company’s business, including risk assessment and risk mitigation of the Company’s top risks. Throughout the year, the Board and relevant Committees of the Board receive updates from management with respect to various enterprise risk management issues and dedicate a portion of their meetings to reviewing and discussing specific risk topics in greater detail, including risks related to cybersecurity, food safety, sustainability, human capital management and supply chain and commodity inflation. The Board receives and provides feedback on regular updates from management regarding the Company’s top risks, including updates from members of management responsible for overseeing impacted areas (for example, the Chief Strategy and Transformation Officer and Chief Information Security Officer), governance processes associated with managing these risks, the status of projects to strengthen the Company’s risk mitigation efforts and recent incidents impacting the industry and threat landscape. Given that cybersecurity risks can impact various areas of responsibility of the Committees of the Board, the Board believes it is useful and effective for the full Board to maintain direct oversight over cybersecurity matters. In evaluating top risks, the Board and management consider short-, medium- and long-term potential impacts on the Company’s business, financial condition and results of operations, including looking at the internal and external environment when evaluating risks, risk amplifiers and emerging trends, and considers the risk horizon as part of prioritizing the Company’s risk mitigation efforts. The Board receives updates through presentations, memos and other written materials, teleconferences and other appropriate means of communication, with numerous opportunities for discussion and feedback, and continuously evaluates its approach in addressing top risks as circumstances evolve. For 38 example, as part of risk updates to the Board and relevant Committees during 2024, the Board or its relevant Committee were provided updates on the impact of disruptive events, including geopolitical events and tensions in certain international markets, such as the Russia-Ukraine conflict. The Board also receives periodic updates from external experts and advisers on global macroeconomic trends and conditions that may impact the Company’s strategy and financial performance, including geopolitical conflicts, economic instability, labor market trends, changing consumer behavior, retail disruption and digitalization. The Board has tasked designated Committees of the Board with oversight of certain categories of risk management, and the Committees report to the Board regularly on these matters. ◦ The Audit Committee of the Board reviews and assesses the guidelines and policies governing PepsiCo’s risk management and oversight processes, and assists the Board’s oversight of financial, compliance and employee safety risks facing PepsiCo. 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 PRC is also responsible for reporting progress on our risk mitigation efforts to the Board and designated Committees. 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 • 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. PepsiCo’s risk oversight processes and disclosure controls and procedures are designed to appropriately escalate key risks to the Board as well as to analyze potential risks for disclosure. Market Risks We are exposed to market risks arising from adverse changes in: • commodity prices, affecting the cost of our raw materials and energy; • foreign exchange rates and currency restrictions; and • interest rates. In the normal course of business, we manage commodity price, foreign exchange and interest rate risks through a variety of strategies, including productivity initiatives, global purchasing programs and hedging. Ongoing productivity initiatives involve the identification and effective implementation of meaningful cost-saving opportunities or efficiencies, including the use of derivatives. Our global purchasing programs include fixed-price contracts and purchase orders and pricing agreements. See “Item 1A. Risk Factors” for further discussion of our market risks. The fair value of our derivatives fluctuates based on market rates and prices. The sensitivity of our derivatives to these market fluctuations is discussed below. See Note 9 to our consolidated financial statements for further discussion of these derivatives and our hedging policies. The fair value of our indefinite-lived intangible assets is impacted by changes in market conditions, including interest rates and inflationary, deflationary and recessionary conditions. See “Our Critical Accounting Policies and Estimates” for a discussion of the exposure of our goodwill and other intangible assets and pension and retiree medical plan assets and liabilities to risks related to market fluctuations. Inflationary, deflationary and recessionary conditions impacting these market risks also impact the demand for and pricing of our products. See “Item 1A. Risk Factors” for further discussion. Commodity Prices Our commodity derivative contracts had a total notional value of $1.4 billion as of December 28, 2024 and $1.7 billion as of December 30, 2023. At the end of 2024, the potential change in fair value of commodity derivative contracts, assuming a 10% decrease in the underlying commodity price, would have increased our net unrealized losses in 2024 by $140 million, which would generally be offset by a reduction in the cost of the underlying commodity purchases. 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. As a result, we are exposed to foreign exchange risks in the international markets in which our products are made, manufactured, distributed or sold. Additionally, we are exposed to foreign exchange risk from net investments in foreign subsidiaries, foreign currency purchases, foreign currency assets and liabilities created in the normal course of business. During 2024, unfavorable foreign exchange reduced net revenue performance by 1.5 percentage points, 40 primarily due to declines in the Egyptian pound, Russian ruble, Mexican peso and Brazilian real. Currency declines against the U.S. dollar which are not offset could adversely impact our future financial results. Our foreign exchange derivative contracts had a total notional value of $3.1 billion as of December 28, 2024 and $3.8 billion as of December 30, 2023. At the end of 2024, we estimate that an unfavorable 10% change in the underlying exchange rates would have decreased our net unrealized gains in 2024 by $319 million, which would be significantly offset by an inverse change in the fair value of the underlying exposure. Our cross-currency swap contracts had a total notional value of $1.2 billion as of December 28, 2024 and $1.3 billion as of December 30, 2023. 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. The total notional amount of our debt instruments designated as net investment hedges was $2.9 billion as of December 28, 2024 and $3.0 billion as of December 30, 2023. Interest Rates Our interest rate swap contracts had a total notional value of $2.0 billion as of December 28, 2024. 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. OUR FINANCIAL RESULTS Results of Operations — Consolidated Review Volume 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. 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 a 53rd reporting week, where applicable. Our fiscal year ends on the last Saturday of each December, resulting in an additional reporting week every five or six years (53rd reporting week). Beverage volume includes volume of concentrate sold to independent bottlers and volume of finished products bearing company-owned or licensed trademarks and allied brand products and joint venture trademarks sold by company-owned bottling operations. Beverage volume also includes volume of finished products bearing company-owned or licensed trademarks sold by our noncontrolled affiliates. Concentrate volume sold to independent bottlers is reported in concentrate shipments and equivalents (CSE), whereas finished beverage product volume is reported in bottler case sales (BCS). Both CSE and BCS convert all beverage volume to an 8-ounce-case metric. Typically, CSE and BCS are not equal in any given period due to seasonality, timing of product launches, product mix, bottler inventory practices and other factors. While our net revenue is not entirely based on BCS volume due to the independent bottlers in our supply chain, we believe that BCS is a better measure of the consumption of our beverage products. PBNA, LatAm, Europe, AMESA and APAC, either independently or in conjunction with third parties, make, market, distribute and sell ready-to-drink tea products through a joint venture with Unilever (under 41 the Lipton brand name), and PBNA, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink coffee products through a joint venture with Starbucks. Convenient food volume includes volume sold by us and our noncontrolled affiliates of convenient food products bearing company-owned or licensed trademarks. Internationally, we measure convenient food product volume in kilograms, while in North America we measure convenient food product volume in pounds. FLNA makes, markets, distributes and sells Sabra refrigerated dips and spreads through a joint venture with Strauss Group. In December 2024, we acquired the Strauss Group’s 50% ownership in Sabra and Sabra became a wholly-owned subsidiary. Consolidated Net Revenue and Operating Profit 2024 2023 Change Net revenue $ 91,854 $ 91,471 — % Operating profit $ 12,887 $ 11,986 8 % Operating margin 14.0 % 13.1 % 0.9 See “Results of Operations – Division Review” for a tabular presentation and discussion of key drivers of net revenue. Operating profit increased 8% and operating margin improved 0.9 percentage points. Operating profit growth was primarily driven by effective net pricing, productivity savings and an 18-percentage-point impact of prior-year impairment charges related to the SodaStream business. These impacts were partially offset by certain operating cost increases, a decline in organic volume, an 8-percentage-point impact of higher impairment and other charges associated with our TBG investment and Juice Transaction-related receivables, a 5-percentage-point impact of higher restructuring charges and a 4-percentage-point unfavorable impact of an indirect tax reserve. Corporate unallocated expenses reflect a 3-percentage-point favorable impact driven primarily by a decrease in corporate expenses and prior-year contributions to The PepsiCo Foundation, Inc. Other Consolidated Results 2024 2023 Change Other pension and retiree medical benefits (expense)/income $ (22) $ 250 $ (272) Net interest expense and other $ 919 $ 819 $ 100 Annual tax rate 19.4 % 19.8 % Net income attributable to PepsiCo $ 9,578 $ 9,074 5.5 % Net income attributable to PepsiCo per common share – diluted $ 6.95 $ 6.56 6 % Other pension and retiree medical benefits expense increased $272 million, primarily reflecting higher 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. Net interest expense and other increased $100 million, primarily due to higher interest rates on debt and higher average debt balances, partially offset by higher average cash balances and higher interest rates on average cash balances. The reported tax rate decreased 0.4 percentage points, primarily reflecting a reduction in the state tax rate. 42 Results of Operations — Division Review See “Our Business Risks,” “Non-GAAP Measures” and “Items Affecting Comparability” for a discussion of items to consider when evaluating our results and related information regarding measures not in accordance with U.S. Generally Accepted Accounting Principles (GAAP). In the discussions of net revenue and operating profit below, “effective net pricing” reflects the year-over- year impact of discrete pricing actions, sales incentive activities and mix resulting from selling varying products in different package sizes and in different countries. Net Revenue and Organic Revenue Performance Organic revenue performance is a non-GAAP financial measure. For further information on this measure, see “Non-GAAP Measures.” 2024 Impact of Impact of Reported % Change, GAAP Measure Foreign exchange translation Acquisitions and divestitures Organic % Change, Non-GAAP Measure(a) Organic volume(b) Effective net pricing FLNA (1) % — — (0.5) % (2.5) 2 QFNA (c) (14) % — — (14) % (14) 0.5 PBNA 0.5 % — — 1 % (3.5) 4 LatAm 0.5 % 3 — 4 % (2) 5 Europe 5 % 2 — 7 % 2 6 AMESA 1 % 9 — 10 % 1 9 APAC 1 % 2 — 3 % 4 (1) Total — % 1.5 — 2 % (2) 4 (a) Amounts may not sum due to rounding. (b) Excludes the impact of acquisitions and divestitures. In certain instances, the impact of organic volume on net revenue performance differs from the unit volume change disclosed in the following divisional discussions due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between BCS and CSE. We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue. (c) Net revenue decline was impacted by a previously announced voluntary recall of certain bars and cereals in our QFNA division (Quaker Recall). 43 Operating Profit, Operating Profit Adjusted for Items Affecting Comparability and Operating Profit Performance Adjusted for Items Affecting Comparability on a Constant Currency Basis Operating profit adjusted for items affecting comparability and operating profit performance adjusted for items affecting comparability on a constant currency basis are both non-GAAP financial measures. For further information on these measures, see “Non-GAAP Measures” and “Items Affecting Comparability.” Operating Profit and Operating Profit Adjusted for Items Affecting Comparability 2024 Items Affecting Comparability(a) Reported, GAAP Measure Mark-to- market net impact Restructuring and impairment charges Acquisition and divestiture- related charges Impairment and other charges Product recall- related impact Indirect tax impact Core, Non-GAAP Measure FLNA $ 6,316 $ — $ 150 $ 9 $ — $ — $ — $ 6,475 QFNA 303 — 11 — 9 184 — 507 PBNA 2,302 — 238 8 556 — — 3,104 LatAm 2,245 — 51 — — — 218 2,514 Europe 2,019 — 123 — 145 — — 2,287 AMESA 798 — 14 5 — — — 817 APAC 811 — 10 — 4 — — 825 Corporate unallocated expenses (1,907) (25) 101 — — — — (1,831) Total $ 12,887 $ (25) $ 698 $ 22 $ 714 $ 184 $ 218 $ 14,698 2023 Items Affecting Comparability(a) Reported, GAAP Measure Mark-to- market net impact Restructuring and impairment charges Acquisition and divestiture- related charges Impairment and other charges/ credits Product recall- related impact Core, Non-GAAP Measure FLNA $ 6,755 $ — $ 42 $ — $ — $ — $ 6,797 QFNA 492 — — — — 136 628 PBNA 2,584 — 41 16 321 — 2,962 LatAm 2,252 — 29 — 2 — 2,283 Europe 767 — 223 (2) 855 — 1,843 AMESA 807 — 15 2 (7) — 817 APAC 713 — 8 — 59 — 780 Corporate unallocated expenses (2,384) 36 88 25 — — (2,235) Total $ 11,986 $ 36 $ 446 $ 41 $ 1,230 $ 136 $ 13,875 (a) See “Items Affecting Comparability.” 44 Operating Profit Performance and Operating Profit Performance Adjusted for Items Affecting Comparability on a Constant Currency Basis 2024 Impact of Items Affecting Comparability(a) Impact of Reported % Change, GAAP Measure Mark-to- market net impact Restructuring and impairment charges Acquisition and divestiture -related charges Impairment and other charges/ credits Product recall- related impact Indirect tax impact Core % Change, Non-GAAP Measure(b) Foreign exchange translation Core Constant Currency % Change, Non-GAAP Measure(b) FLNA (7) % — 2 — — — — (5) % — (5) % QFNA (38) % — 3 — 3 14 — (19) % — (19) % PBNA (11) % — 7 — 9 — — 5 % — 5 % LatAm — % — 1 — — — 10 10 % 3 13 % Europe 163 % — (17) — (122) — — 24 % 3 27 % AMESA (1) % — — 0.5 1 — — — % 8 9 % APAC 14 % — — — (8) — — 6 % 3 8 % Corporate unallocated expenses (20) % 2 — 1 — — — (18) % — (18) % Total 8 % (1) 5 — (10) 1 4 6 % 2 8 % (a) See “Items Affecting Comparability.” (b) Amounts may not sum due to rounding. FLNA Net revenue decreased 1%, primarily driven by a decrease in organic volume, partially offset by effective net pricing. Unit volume declined 2.5%, primarily driven by mid-single-digit declines in trademark Cheetos and trademark Tostitos and low-single-digit declines in trademark Lay’s and variety packs, partially offset by double-digit growth in trademark Chester’s and trademark Miss Vickie’s. Operating profit decreased 7%, primarily reflecting certain operating cost increases, including strategic initiatives, and the decrease in organic volume. These impacts were partially offset by productivity savings and the effective net pricing. QFNA Net revenue decreased 14%, primarily driven by a decrease in organic volume, which was negatively impacted by the loss of sales from products included in the Quaker Recall. Unit volume declined 14%, primarily driven by double-digit declines in bars, oatmeal, pancake syrup and mix and ready-to-eat cereals. The unit volume decline in bars and ready-to-eat cereals was negatively impacted by the loss of sales from products included in the Quaker Recall. Operating profit decreased 38%, primarily reflecting the decrease in organic volume, certain operating cost increases and a 14-percentage-point impact of charges associated with the Quaker Recall, partially offset by productivity savings, a 12-percentage-point favorable impact of an insurance recovery related to the Quaker Recall, lower advertising and marketing expenses and effective net pricing. PBNA Net revenue increased 0.5%, primarily driven by effective net pricing, partially offset by an organic volume decline. Unit volume declined 3%, driven by a 4% decline in non-carbonated beverage (NCB) volume and a 2% decline in CSD volume. The NCB volume decline primarily reflected a mid-single-digit decline in our overall water portfolio, a low-single-digit decline in Gatorade sports drinks and a high-single-digit decline in our Lipton ready-to-drink tea portfolio. 45 Operating profit decreased 11%, primarily driven by certain operating cost increases, the decline in organic volume, a 9-percentage-point impact of higher impairment and other charges associated with our TBG investment and Juice Transaction-related receivables, a 7-percentage-point impact of higher restructuring charges and higher advertising and marketing expenses. These impacts were partially offset by the effective net pricing and productivity savings. LatAm Net revenue increased 0.5%, reflecting effective net pricing, partially offset by a 3-percentage-point impact of unfavorable foreign exchange translation and a net decline in organic volume. Convenient foods unit volume declined 2%, primarily reflecting double-digit declines in Peru and Argentina, partially offset by low-single-digit growth in Brazil. Additionally, Mexico experienced a low- single-digit decline. Beverage unit volume grew slightly, primarily reflecting mid-single-digit growth in Brazil and low-single- digit growth in Mexico, Guatemala and Chile, partially offset by a double-digit decline in Colombia and high-single-digit declines in Argentina and Peru. Operating profit decreased slightly, primarily reflecting certain operating cost increases, a 10-percentage- point unfavorable impact of an indirect tax reserve, the net organic volume decline, higher advertising and marketing expenses and a 3-percentage-point impact of unfavorable foreign exchange translation, partially offset by the effective net pricing, productivity savings and a 5-percentage-point impact of lower commodity costs. Europe Net revenue increased 5%, primarily reflecting effective net pricing and organic volume growth, partially offset by a 2-percentage-point impact of unfavorable foreign exchange translation. Convenient foods unit volume grew 2%, primarily reflecting mid-single-digit growth in Russia and low- single-digit growth in the United Kingdom, partially offset by a high-single-digit decline in France and a mid-single-digit decline in the Netherlands. Additionally, Turkey experienced low-single-digit growth. Beverage unit volume grew 2%, primarily reflecting mid-single-digit growth in Russia and low-single- digit growth in Turkey, partially offset by a double-digit decline in France and a slight decline in Germany. Additionally, the United Kingdom experienced low-single-digit growth. Operating profit increased 163%, primarily reflecting a 148-percentage-point favorable impact of the prior-year impairment charges related to the SodaStream business, the net revenue growth, productivity savings and a 17-percentage-point favorable impact of lower restructuring charges. These impacts were partially offset by certain operating cost increases, a 23-percentage-point impact of impairment and other charges associated with our TBG investment and Juice Transaction-related receivables, an 8-percentage- point impact of higher commodity costs and higher advertising and marketing costs. AMESA Net revenue increased 1%, primarily reflecting effective net pricing and organic volume growth, partially offset by a 9-percentage-point impact of unfavorable foreign exchange translation. Convenient foods unit volume grew 2%, primarily reflecting mid-single-digit growth in South Africa and double-digit growth in India, partially offset by double-digit declines in the Middle East and Pakistan. Beverage unit volume grew 1%, primarily reflecting double-digit growth in India, partially offset by a low-single-digit decline in the Middle East, a mid-single-digit decline in Pakistan and a high-single-digit decline in Nigeria. 46 Operating profit decreased 1%, primarily reflecting certain operating cost increases, a 33-percentage-point impact of higher commodity costs, primarily packaging materials, potatoes and other ingredients, largely driven by transaction-related foreign exchange and an 8-percentage-point impact of unfavorable foreign exchange translation. These impacts were partially offset by the net revenue growth and productivity savings. APAC Net revenue increased 1%, primarily reflecting organic volume growth, partially offset by a 2-percentage- point impact of unfavorable foreign exchange translation and unfavorable net pricing. Convenient foods unit volume grew 4%, primarily reflecting double-digit growth in Thailand and mid- single-digit growth in China. Additionally, Australia experienced mid-single-digit growth. Beverage unit volume grew 1%, primarily reflecting high-single-digit growth in Vietnam, mid-single-digit growth in Thailand and low-single-digit growth in the Philippines, partially offset by a low-single-digit decline in China. Operating profit increased 14%, primarily reflecting productivity savings, the organic volume growth, a 9- percentage-point favorable impact of impairment charges related to the Be & Cheery brand in the prior year and a 5-percentage-point impact of lower commodity costs. These impacts were partially offset by certain operating cost increases and the unfavorable net pricing. Non-GAAP Measures Certain financial measures contained in this Form 10-K adjust for the impact of specified items and are not in accordance with GAAP. We use non-GAAP financial measures internally to make operating and strategic decisions, including the preparation of our annual operating plan, evaluation of our overall business performance and as a factor in determining compensation for certain employees. We believe presenting non-GAAP financial measures in this Form 10-K provides additional information to facilitate comparison of our historical operating results and trends in our underlying operating results and provides additional transparency on how we evaluate our business. We also believe presenting these measures in this Form 10-K allows investors to view our performance using the same measures that we use in evaluating our financial and business performance and trends. We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Examples of items for which we may make adjustments include: amounts related to mark-to-market gains or losses (non-cash); charges related to restructuring plans; charges associated with acquisitions and divestitures; gains associated with divestitures; asset impairment charges (non-cash); product recall-related impact; pension and retiree medical-related amounts, including all settlement and curtailment gains and losses; charges or adjustments related to the enactment of new laws, rules or regulations, such as tax law changes; amounts related to the resolution of tax positions; tax benefits related to reorganizations of our operations; debt redemptions, cash tender or exchange offers; and remeasurements of net monetary assets. See below and “Items Affecting Comparability” for a description of adjustments to our GAAP financial measures in this Form 10-K. Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented by other companies. 47 The following non-GAAP financial measures contained in this Form 10-K are discussed below: Cost of sales, gross profit, selling, general and administrative expenses, impairment of intangible assets, other pension and retiree medical benefits expense/income, net interest expense and other, 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 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 Multi-Year Productivity Plan (2019 Productivity Plan), charges associated with our acquisitions and divestitures, impairment and other charges/credits, product recall-related impact, indirect tax expense related to an international audit 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. 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. Organic revenue performance We define organic revenue performance as a measure that adjusts for the impacts of foreign exchange translation, acquisitions and divestitures, and every five or six years, the impact of the 53rd reporting week. Adjusting for acquisitions and divestitures reflects 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. 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. Free cash flow We define free cash flow as net cash from operating activities less capital spending, plus sales of property, plant and equipment. Since net capital spending is essential to our product innovation initiatives and maintaining our operational capabilities, we believe that it is a recurring and necessary use of cash. As such, we believe investors should also consider net capital spending when evaluating our cash from operating activities. Free cash flow is used by us primarily for acquisitions and financing activities, including debt repayments, dividends and share repurchases. Free cash flow is not a measure of cash available for discretionary expenditures since we have certain non-discretionary obligations such as debt service that are not deducted from the measure. See “Free Cash Flow” in “Our Liquidity and Capital Resources” for further information. 48 Return on invested capital (ROIC) and net ROIC, excluding items affecting comparability We define ROIC as net income attributable to PepsiCo plus interest expense after-tax divided by the sum of quarterly average debt obligations and quarterly average common shareholders’ equity. Although ROIC is a common financial metric, numerous methods exist for calculating ROIC. Accordingly, the method used by management to calculate ROIC may differ from the methods other companies use to calculate their ROIC. We believe this metric serves as a measure of how well we use our capital to generate returns. In addition, we use net ROIC, excluding items affecting comparability, to compare our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that we believe are not indicative of our ongoing performance and reflects how management evaluates our operating results and trends. We define net ROIC, excluding items affecting comparability, as ROIC, adjusted for quarterly average cash, cash equivalents and short-term investments, after-tax interest income and items affecting comparability. We believe the calculation of ROIC and net ROIC, excluding items affecting comparability, provides useful information to investors and is an additional relevant comparison of our performance to consider when evaluating our capital allocation efficiency. See “Return on Invested Capital” in “Our Liquidity and Capital Resources” for further information. Items Affecting Comparability Our reported financial results in this Form 10-K are impacted by the following items in each of the following years: 2024 Cost of sales Gross profit Selling, general and administrative expenses Impairment of intangible assets Operating profit Other pension and retiree medical benefits (expense)/ income Provision for income taxes(a) Net income attributable to PepsiCo Reported, GAAP Measure $ 41,744 $ 50,110 $ 37,190 $ 33 $ 12,887 $ (22) $ 2,320 $ 9,578 Items Affecting Comparability Mark-to-market net impact 26 (26) (1) — (25) — (6) (19) Restructuring and impairment charges (133) 133 (551) (14) 698 29 164 563 Acquisition and divestiture-related charges — — (22) — 22 — 4 18 Impairment and other charges — — (695) (19) 714 — 184 530 Product recall-related impact (176) 176 (8) — 184 3 44 143 Indirect tax impact (218) 218 — — 218 — — 218 Pension and retiree medical-related impact — — — — — 276 61 215 Core, Non-GAAP Measure $ 41,243 $ 50,611 $ 35,913 $ — $ 14,698 $ 286 $ 2,771 $ 11,246 49 2023 Cost of sales Gross profit Selling, general and administrative expenses Impairment of intangible assets Operating profit Other pension and retiree medical benefits income Provision for income taxes(a) Net income attributable to noncontrolling interests Net income attributable to PepsiCo Reported, GAAP Measure $ 41,881 $ 49,590 $ 36,677 $ 927 $ 11,986 $ 250 $ 2,262 $ 81 $ 9,074 Items Affecting Comparability Mark-to-market net impact (3) 3 (33) — 36 — 9 — 27 Restructuring and impairment charges (13) 13 (433) — 446 (1) 96 1 348 Acquisition and divestiture-related charges — — (41) — 41 — 18 — 23 Impairment and other charges/ credits 5 (5) (308) (927) 1,230 — 284 — 946 Product recall-related impact (136) 136 — — 136 — 32 — 104 Pension and retiree medical-related impact — — — — — 14 3 — 11 Core, Non-GAAP Measure $ 41,734 $ 49,737 $ 35,862 $ — $ 13,875 $ 263 $ 2,704 $ 82 $ 10,533 (a) Provision for income taxes is the expected tax charge/benefit on the underlying item based on the tax laws and income tax rates applicable to the underlying item in its corresponding tax jurisdiction. 2024 2023 Change Net income attributable to PepsiCo per common share – diluted, GAAP measure $ 6.95 $ 6.56 6 % Mark-to-market net impact (0.01) 0.02 Restructuring and impairment charges 0.41 0.25 Acquisition and divestiture-related charges 0.01 0.02 Impairment and other charges/credits 0.38 0.68 Product recall-related impact 0.10 0.07 Indirect tax impact 0.16 — Pension and retiree medical-related impact 0.16 0.01 Core net income attributable to PepsiCo per common share – diluted, non-GAAP measure $ 8.16 $ 7.62 (a) 7 % Impact of foreign exchange translation 2 Growth in core net income attributable to PepsiCo per common share – diluted, on a constant currency basis, non-GAAP measure 9 % (a) Does not sum due to rounding. Mark-to-Market Net Impact We centrally manage commodity derivatives on behalf of our divisions. These commodity derivatives include agricultural products, metals, and energy. Commodity derivatives that do not qualify for hedge accounting treatment are marked to market each period with the resulting gains and losses recorded in corporate unallocated expenses as either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. These gains and losses are subsequently reflected in 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. Restructuring and Impairment Charges 2019 Multi-Year Productivity Plan The 2019 Productivity Plan leverages new technology and business models to further simplify, harmonize and automate processes; re-engineers our go-to-market and information systems, including deploying the right automation for each market; and simplifies our organization and optimizes our manufacturing and supply chain footprint. To build on the successful implementation of the 2019 Productivity Plan, in the fourth quarter of 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 50 pre-tax charges of approximately $6.15 billion, including cash expenditures of approximately $5.1 billion, as compared to our previous estimate of pre-tax charges of approximately $3.65 billion, including cash expenditures of approximately $2.9 billion. Plan to date through December 28, 2024, we have incurred pre-tax charges of $2.6 billion, including cash expenditures of $1.9 billion. In our 2025 financial results, we expect to incur pre-tax charges of approximately $900 million, including cash expenditures of approximately $800 million. These charges will be funded primarily through cash from operations. We expect to incur the majority of the remaining pre-tax charges and cash expenditures through 2027, with the balance to be incurred through 2030. Charges include severance and other employee costs, asset impairments and other costs. See Note 3 to our consolidated financial statements for further information related to our 2019 Productivity Plan. We regularly evaluate productivity initiatives beyond the productivity plan and other initiatives discussed above and in Note 3 to our consolidated financial statements. Acquisition and Divestiture-Related Charges Acquisition and divestiture-related charges primarily include transaction expenses, such as consulting, advisory and other professional fees, and merger and integration charges. Merger and integration charges include employee-related costs, contract termination costs, closing costs and other integration costs. See Note 13 to our consolidated financial statements for further information. Impairment and Other Charges/Credits We recognized Russia-Ukraine conflict charges, brand portfolio impairment charges and other impairment charges as described below. Russia-Ukraine Conflict Charges In connection with the ongoing conflict in Ukraine, we recognized charges related to indefinite-lived intangible assets and property, plant and equipment impairment, allowance for expected credit losses, inventory write-downs and other costs in 2022. We also recognized adjustments to these charges in 2023. See Notes 1 and 4 to our consolidated financial statements for further information. Brand Portfolio Impairment Charges We recognized intangible asset, investment and property, plant and equipment impairments and other charges as a result of management’s decision to reposition or discontinue the sale/distribution of certain brands and to sell an investment in 2022. We also recognized adjustments to these charges in 2023. See Notes 1 and 4 to our consolidated financial statements for further information. Other Impairment Charges We recognized impairment charges taken as a result of our quantitative assessments of certain of our indefinite-lived intangible assets and related to our investment in TBG. In addition, we recorded allowance for expected credit losses related to outstanding receivables from TBG associated with the Juice Transaction. See Notes 1, 4 and 9 to our consolidated financial statements for further information. Product Recall-Related Impact We recognized product returns, inventory write-offs and customer and consumer-related costs in our QFNA division associated with a voluntary recall of certain bars and cereals. See Note 1 to our consolidated financial statements for further information. 51 Indirect Tax Impact We recognized additional expenses related to an indirect tax reserve in our LatAm division. Pension and Retiree Medical-Related Impact Pension and retiree medical-related impact includes settlement charges due to lump sum distributions to retired or terminated employees and the purchase of a group annuity contract whereby a third-party insurance company assumed the obligation to pay and administer future benefit payments for certain retirees. The settlement charge was triggered when the aggregate of the cumulative lump sum distributions and the annuity contract premium exceeded the total annual service and interest costs. Pension and retiree medical-related impact also includes curtailment losses due to restructuring actions as part of our 2019 Productivity Plan. See Notes 7 and 13 to our consolidated financial statements for further information. Our Liquidity and Capital Resources We believe that our cash generating capability and financial condition, together with our revolving credit facilities, working capital lines and other available methods of debt financing, such as commercial paper borrowings and long-term debt financing, will be adequate to meet our operating, investing and financing needs, including with respect to our net capital spending plans. Our primary sources of liquidity include cash from operations, proceeds obtained from issuances of commercial paper and long-term debt, and cash and cash equivalents. These sources of cash are available to fund cash outflows that have both a short- and long-term component, including debt repayments and related interest payments; payments for acquisitions; operating leases; purchase, marketing, and other contractual commitments, including capital expenditures and the transition tax liability under the Tax Cuts and Jobs Act (TCJ Act). In addition, these sources of cash fund other cash outflows including anticipated dividend payments and share repurchases. We do not have guarantees or off-balance sheet financing arrangements, including variable interest entities, that we believe could have a material impact on our liquidity. See “Item 1A. Risk Factors,” “Our Business Risks” and Note 8 to our consolidated financial statements for further information. As of December 28, 2024, cash, cash equivalents and short-term investments in our consolidated subsidiaries subject to currency controls or currency exchange restrictions were not material. The TCJ Act imposed a one-time mandatory transition tax on undistributed international earnings. As of December 28, 2024, our mandatory transition tax liability was $1.7 billion, which must be paid through 2026 under the provisions of the TCJ Act; we currently expect to pay approximately $772 million of this liability in 2025. Any additional guidance issued by the Internal Revenue Service (IRS) may impact our recorded amounts for this transition tax liability. See Note 5 to our consolidated financial statements for further discussion of the TCJ Act. Supply chain financing arrangements did not have a material impact on our liquidity or capital resources in the periods presented and we do not expect such arrangements to have a material impact on our liquidity or capital resources for the foreseeable future. See Note 14 to our consolidated financial statements for further discussion of supply chain financing arrangements. Furthermore, our cash provided from operating activities is somewhat impacted by seasonality. Working capital needs are impacted by weekly sales, which are generally highest in the third quarter due to seasonal and holiday-related patterns and generally lowest in the first quarter. On a continuing basis, we consider various transactions to increase shareholder value and enhance our business results, including acquisitions, divestitures, joint ventures, dividends, share repurchases, productivity and other efficiency initiatives and other structural changes. These transactions may result in future cash proceeds or payments. 52 The table below summarizes our cash activity: 2024 2023 Net cash provided by operating activities $ 12,507 $ 13,442 Net cash used for investing activities $ (5,472) $ (5,495) Net cash used for financing activities $ (7,556) $ (3,009) Operating Activities In 2024, net cash provided by operating activities was $12.5 billion, compared to $13.4 billion in the prior year. The decrease in operating cash flow primarily reflects unfavorable working capital comparisons. Investing Activities In 2024, net cash used for investing activities was $5.5 billion, primarily reflecting net capital spending of $5.0 billion. In 2023, net cash used for investing activities was $5.5 billion, primarily reflecting net capital spending of $5.3 billion. See Note 1 to our consolidated financial statements for further discussion of capital spending by division and see Note 13 to our consolidated financial statements for further discussion of our acquisitions. We regularly review our plans with respect to net capital spending and believe that we have sufficient liquidity to meet our net capital spending needs. Financing Activities 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 2023, net cash used for financing activities was $3.0 billion, primarily reflecting the return of operating cash flow to our shareholders through dividend payments and share repurchases of $7.7 billion, as well as payments of long-term debt borrowings of $3.0 billion, partially offset by proceeds from issuances of long-term debt of $5.5 billion and net proceeds from short-term borrowings of $2.3 billion. See Note 8 to our consolidated financial statements for further discussion of debt obligations. We annually review our capital structure with our Board, 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. 53 Free Cash Flow The table below reconciles net cash provided by operating activities, as reflected on our cash flow statement, to our free cash flow. Free cash flow is a non-GAAP financial measure. For further information on free cash flow, see “Non-GAAP Measures.” 2024 2023 Change Net cash provided by operating activities, GAAP measure $ 12,507 $ 13,442 (7) % Capital spending (5,318) (5,518) Sales of property, plant and equipment 342 198 Free cash flow, non-GAAP measure $ 7,531 $ 8,122 (7) % We use free cash flow primarily for acquisitions and financing activities, including debt repayments, dividends and share repurchases. We expect to continue to return free cash flow to our shareholders primarily through dividends and share repurchases while maintaining Tier 1 commercial paper access, which we believe will facilitate appropriate financial flexibility and ready access to global capital and credit markets at favorable interest rates. However, see “Item 1A. Risk Factors” and “Our Business Risks” for certain factors that may impact our credit ratings or our operating cash flows. Any downgrade of our credit ratings by a credit rating agency, especially any downgrade to below investment grade, whether or not as a result of our actions or factors which are beyond our control, could increase our future borrowing costs and impair our ability to access capital and credit markets on terms commercially acceptable to us, or at all. In addition, any downgrade of our current short-term credit ratings could impair our ability to access the commercial paper market with the same flexibility that we have experienced historically, and therefore require us to rely more heavily on more expensive types of debt financing. See “Item 1A. Risk Factors,” “Our Business Risks” and Note 8 to our consolidated financial statements for further information. Changes in Line Items in Our Consolidated Financial Statements Changes in line items in the income statement are discussed in “Results of Operations – Consolidated Review,” “Results of Operations – Division Review” and “Items Affecting Comparability.” Changes in line items in the cash flow statement are discussed in “Our Liquidity and Capital Resources.” Changes in line items in the balance sheet are discussed below: Total Assets As of December 28, 2024, total assets were $99.5 billion, compared to $100.5 billion as of December 30, 2023. The decrease in total assets is primarily driven by the following line item: Change(a) Cash and cash equivalents (b) $ (1.2) (a) In billions. (b) Refer to the cash flow statement for further information. Total Liabilities As of December 28, 2024, total liabilities were $81.3 billion, compared to $81.9 billion as of December 30, 2023. There were no material line item changes. See Notes 8 and 13 for further information regarding our liabilities. Total Equity See the equity statement and Notes 9 and 11 to our consolidated financial statements. 54 Return on Invested Capital ROIC is a non-GAAP financial measure. For further information on ROIC, see “Non-GAAP Measures.” 2024 Net income attributable to PepsiCo $ 9,578 Interest expense 1,606 Tax on interest expense (357) $ 10,827 Average debt obligations (a) $ 44,844 Average common shareholders’ equity (b) 18,898 Average invested capital $ 63,742 ROIC, non-GAAP measure 17.0 % (a) Includes a quarterly average of short-term and long-term debt obligations. (b) Includes a quarterly average of common stock, capital in excess of par value, retained earnings, accumulated other comprehensive loss and repurchased common stock. The table below reconciles ROIC as calculated above to net ROIC, excluding items affecting comparability. 2024 ROIC, non-GAAP measure 17.0 % Impact of: Average cash, cash equivalents and short-term investments 2.6 Interest income (1.0) Tax on interest income 0.2 Mark-to-market net impact (a) — Restructuring and impairment charges (a) 0.6 Acquisition and divestiture-related charges (a) — Impairment and other charges/credits (a) 0.5 Product recall-related impact (a) 0.1 Indirect tax impact (a) 0.2 Pension and retiree medical-related impact (a) 0.2 Core Net ROIC, non-GAAP measure 20.4 % (a) See “Items Affecting Comparability” for a detailed description. OUR CRITICAL ACCOUNTING POLICIES AND ESTIMATES An appreciation of our critical accounting policies and estimates is necessary to understand our financial results. These policies may require management to make difficult and subjective judgments regarding uncertainties, including the business and economic uncertainty resulting from volatile geopolitical conditions and the high interest rate and inflationary cost environment, and as a result, such estimates may significantly impact our financial results. The precision of these estimates and the likelihood of future changes depend on a number of underlying variables and a range of possible outcomes. We applied our critical accounting policies and estimation methods consistently in all material respects and for all periods presented. We have discussed our critical accounting policies and estimates with our Audit Committee. 55 Our critical accounting policies and estimates are: • revenue recognition; • goodwill and other intangible assets; • income tax expense and accruals; and • pension and retiree medical plans. Revenue Recognition We recognize revenue when our performance obligation is satisfied. Our primary performance obligation (the distribution and sales of beverage and convenient food products) is satisfied upon the shipment or delivery of products to our customers, which is also when control is transferred. 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. Our policy for DSD, including certain chilled products, is to remove and replace damaged and out-of-date products from store shelves to ensure that consumers receive the product quality and freshness they expect. Similarly, our policy for certain warehouse-distributed products is to replace damaged and out-of-date products. As a result, we record reserves, based on estimates, for product recall, anticipated damaged and out-of-date products. Our products are sold for cash or on credit terms. Our credit terms, which are established in accordance with local and industry practices, typically require payment within 30 days of delivery in the United States, and generally within 30 to 90 days internationally, and may allow discounts for early payment. 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. Our policy is to provide customers with product when needed. In fact, our commitment to freshness and product dating serves to regulate the quantity of product shipped or delivered. In addition, DSD products are placed on the shelf by our employees with customer shelf space and storerooms limiting the quantity of product. For product delivered through other distribution networks, we monitor customer inventory levels. As discussed in “Our Customers” in “Item 1. Business,” we offer sales incentives and discounts through various programs to customers and consumers. Total marketplace spending includes sales incentives, discounts, advertising and other marketing activities. 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 also include support provided to our independent bottlers through funding of advertising and other marketing activities. 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. 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 are recognized in earnings in the period such differences are determined. In addition, certain advertising and marketing costs are also based on annual targets and recognized during the year as incurred. See Note 2 to our consolidated financial statements for further information on our revenue recognition and related policies, including total marketplace spending. Goodwill and Other Intangible Assets We sell products under a number of brand names, many of which were developed by us. Brand development costs are expensed as incurred. We also purchase brands and other intangible assets in acquisitions. In a business combination, the consideration is first assigned to identifiable assets and liabilities, including brands and other intangible assets, based on estimated fair values, with any excess recorded as goodwill. Determining fair value requires significant estimates and assumptions, including those related to volatile geopolitical conditions and a high interest rate and inflationary cost environment, based on an evaluation of a number of factors, such as marketplace participants, product life cycles, market share, consumer awareness, brand history and future expansion expectations, amount and timing of future cash flows and the discount rate applied to the cash flows. We believe that a brand has an indefinite life if it has a history of strong revenue and cash flow performance and we have the intent and ability to support the brand with marketplace spending for the foreseeable future. If these indefinite-lived brand criteria are not met, brands are amortized over their expected useful lives, which generally range from 20 to 40 years. Determining the expected life of a brand requires management judgment and is based on an evaluation of a number of factors, including market share, consumer awareness, brand history, future expansion expectations and regulatory restrictions, as well as the macroeconomic environment of the countries in which the brand is sold. In connection with previous acquisitions, we reacquired certain franchise rights which provided the exclusive and perpetual rights to manufacture and/or distribute beverages for sale in specified territories. In determining the useful life of these franchise rights, many factors were considered, including the pre- existing perpetual bottling arrangements, the indefinite period expected for these franchise rights to contribute to our future cash flows, as well as the lack of any factors that would limit the useful life of these franchise rights to us, including legal, regulatory, contractual, competitive, economic or other factors. Therefore, certain of these franchise rights are considered as indefinite-lived. Franchise rights that are not considered indefinite-lived are amortized over the remaining contractual period of the contract in which the right was granted. Indefinite-lived intangible assets and goodwill are not amortized and, as a result, are assessed for impairment at least annually, using either a qualitative or quantitative approach. We perform this annual assessment during our third quarter, or more frequently if circumstances indicate that the carrying value may not be recoverable. Where we use the qualitative assessment, first we determine if, based on qualitative factors, it is more likely than not that an impairment exists. 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. 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. Estimated fair value is determined using discounted cash flows and requires an analysis of several estimates including future cash flows or income consistent with management’s strategic business plans, annual sales growth rates, perpetuity growth assumptions and the selection of assumptions underlying a discount rate (weighted-average cost of capital) based on market data available at the time. 57 Significant management judgment is necessary to estimate the impact of competitive operating, macroeconomic and other factors (including those related to volatile geopolitical conditions and a high interest rate and inflationary cost environment) to estimate future levels of sales, operating profit or cash flows. 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. Additionally, indefinite-lived intangible assets acquired in recent acquisitions are more susceptible to impairment because they are recorded at fair value at the time of acquisition. These assumptions could be adversely impacted by certain of the risks described in “Item 1A. Risk Factors” and “Our Business Risks.” As of December 28, 2024, the estimated fair value of the SodaStream reporting unit narrowly exceeded its carrying 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. We continue to monitor the performance of the SodaStream reporting unit, as well as all of our indefinite-lived intangible assets. Amortizable intangible assets are only evaluated for impairment upon a significant change in the operating or macroeconomic environment. 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. Income Tax Expense and Accruals Our annual tax rate is based on our income, statutory tax rates and tax structure and transactions, including transfer pricing arrangements, available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our annual tax rate and in evaluating our tax positions. We establish reserves when, despite our belief that our tax return positions are fully supportable, we believe that certain positions are subject to challenge and that we likely will not succeed. We adjust these reserves, as well as the related interest, in light of changing facts and circumstances, such as the progress of a tax audit, new tax laws, relevant court cases or tax authority settlements. See “Item 1A. Risk Factors” for further discussion. An estimated annual effective tax rate is applied to our quarterly operating results. In the event there is a significant or unusual item recognized in our quarterly operating results, the tax attributable to that item is separately calculated and recorded at the same time as that item. We consider the tax adjustments from the resolution of prior-year tax matters to be among such items. 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). Some of these differences are permanent, such as expenses that are not deductible in our tax return, and some differences reverse over time, such as depreciation expense. These temporary differences create deferred tax assets and liabilities. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax returns in future years for which we have already recorded the tax benefit on our consolidated financial statements. We establish valuation allowances for our deferred tax assets if, based on the available evidence, it is not more likely than not that some portion or all of the deferred tax assets will be realized. Deferred tax liabilities generally represent tax expense recognized in our consolidated financial statements for which payment has been deferred, or expense for which we have already taken a deduction 58 in our tax return but have not yet recognized as expense in our consolidated financial statements. In 2024, our annual tax rate was 19.4% compared to 19.8% in 2023. See “Other Consolidated Results” for further information. See Note 5 to our consolidated financial statements for further information. Pension and Retiree Medical Plans Our pension plans cover certain employees in the United States and certain international employees. Benefits are determined based on either years of service or a combination of years of service and earnings. Certain U.S. and Canada retirees are also eligible for medical and life insurance benefits (retiree medical) if they meet age and service requirements. Generally, our share of retiree medical costs is capped at specified dollar amounts, which vary based upon years of service, with retirees contributing the remainder of the cost. In addition, we have been phasing out certain subsidies of retiree medical benefits. See “Items Affecting Comparability” and Note 7 to our consolidated financial statements for information about changes and settlements within our pension plans. Our Assumptions The determination of pension and retiree medical expenses and obligations requires the use of assumptions to estimate the amount of benefits that employees earn while working, as well as the present value of those benefits. Annual pension and retiree medical expense amounts are principally based on four components: (1) the value of benefits earned by employees for working during the year (service cost), (2) the increase in the projected benefit obligation due to the passage of time (interest cost), and (3) other gains and losses as discussed in Note 7 to our consolidated financial statements, reduced by (4) the expected return on assets for our funded plans. Significant assumptions used to measure our annual pension and retiree medical expenses include: • certain employee-related demographic factors, such as turnover, retirement age and mortality; • the expected rate of return on assets in our funded plans; and • the spot rates along the yield curve used to determine service and interest costs and the present value of liabilities. Certain assumptions reflect our historical experience and management’s best judgment regarding future expectations. All actuarial assumptions are reviewed annually, except in the case of an interim remeasurement due to a significant event such as a curtailment or settlement. Due to the significant management judgment involved, these assumptions could have a material impact on the measurement of our pension and retiree medical expenses and obligations. At each measurement date, the discount rates are based on interest rates for high-quality, long-term corporate debt securities with maturities comparable to those of our liabilities. 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. See Note 7 to our consolidated financial statements for information about the expected rate of return on plan assets and our plans’ investment strategy. Although we review our expected long-term rates of return on an annual basis, our asset returns in a given year do not significantly influence our evaluation of long- term rates of return. 59 Weighted-average assumptions for pension and retiree medical expense are as follows: 2025 2024 2023 Pension Service cost discount rate 6.0 % 5.4 % 5.5 % Interest cost discount rate 5.4 % 5.1 % 5.4 % Expected rate of return on plan assets 7.1 % 7.0 % 7.0 % Retiree medical Service cost discount rate 5.6 % 5.1 % 5.4 % Interest cost discount rate 5.2 % 5.0 % 5.3 % Expected rate of return on plan assets 7.1 % 7.1 % 7.1 % In 2024, the aggregate of lump sum distributions and the purchase of a group annuity contract exceeded the total of annual service and interest cost and triggered pre-tax settlement charges for certain U.S. defined pension plans. In addition, we expect the recognition of fixed income losses on plan assets, partially offset by higher discount rates, to increase our pension and retiree medical expense in 2025. Sensitivity of Assumptions A decrease in each of the collective discount rates or in the expected rate of return assumptions would increase expense for our benefit plans. 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. These contributions are made in accordance with applicable tax regulations that provide for current tax deductions for our contributions and taxation to the employee only upon receipt of plan benefits. Generally, we do not fund our pension plans when our contributions would not be currently tax deductible. As our retiree medical plans are not subject to regulatory funding requirements, we generally fund these plans on a pay-as-you-go basis, although we periodically review available options to make additional contributions toward these benefits. We made a discretionary contribution of $250 million to a U.S. qualified defined benefit plan in January 2025. Our pension and retiree medical plan contributions are subject to change as a result of many factors, such as changes in interest rates, deviations between actual and expected asset returns and changes in tax or other benefit laws. We regularly evaluate different opportunities to reduce risk and volatility associated with our pension and retiree medical plans. See Note 7 to our consolidated financial statements for our past and expected contributions and estimated future benefit payments. 60 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 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 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 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 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 12/3¢ per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1,372 and 1,374 shares, respectively) 23 23 Capital in excess of par value 4,385 4,261 Retained earnings 72,266 70,035 Accumulated other comprehensive loss (17,612) (15,534) Repurchased common stock, in excess of par value 495 and 493 shares, respectively) (41,021) (40,282) Total PepsiCo Common Shareholders’ Equity 18,041 18,503 Noncontrolling interests 130 134 Total Equity 18,171 18,637 Total Liabilities and Equity $ 99,467 $ 100,495 See accompanying notes to the consolidated financial statements. 65 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. See accompanying notes to the consolidated financial statements. 66 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. In addition, we include our share of the results of certain other affiliates using the equity method based on our economic ownership interest, our ability to exercise significant influence over the operating or financial decisions of these affiliates or our ability to direct their economic resources. We do not control these other affiliates, as our ownership in these other affiliates is generally 50% or less. Intercompany balances and transactions are eliminated. As a result of exchange restrictions and other operating restrictions, we do not have control over our Venezuelan subsidiaries. As such, our Venezuelan subsidiaries are not included within our consolidated financial results for any period presented. Raw materials, direct labor and plant overhead, as well as purchasing and receiving costs, costs directly related to production planning, inspection costs and raw materials handling facilities, are included in cost of sales. The costs of moving, storing and delivering finished product, including merchandising activities, are included in selling, general and administrative expenses. The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses and disclosure of contingent assets and liabilities. Estimates are used in determining, among other items, sales incentives accruals, tax reserves, share-based compensation, pension and retiree medical accruals, amounts and useful lives for intangible assets and future cash flows associated with impairment testing for indefinite-lived intangible assets, goodwill and other long-lived assets. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. Additionally, the business and economic uncertainty resulting from volatile geopolitical conditions and changes in the interest rate and inflationary cost environment have made such estimates and assumptions more difficult to calculate. As future events and their effect cannot be determined with precision, actual results could differ significantly from those estimates. Our fiscal year ends on the last Saturday of each December, resulting in a 53rd reporting week every five or six years, including in our 2022 financial results. While our North America financial results are reported on a weekly calendar basis, our international operations are reported on a monthly calendar basis. The following chart details our quarterly reporting schedule: 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. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Certain reclassifications were made to the prior year’s consolidated financial statements to conform to the current year presentation. 67 Our Divisions 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; 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. 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. Effective beginning with our first quarter of 2025, we realigned certain of 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. 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. 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. Our historical segment reporting will be recast beginning first quarter 2025 to reflect the new organizational structure. 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. The accounting policies for the divisions are the same as those described in Note 2, except for the following allocation methodologies: • share-based compensation expense; • pension and retiree medical expense; and • derivatives. 68 Share-Based Compensation Expense Our divisions are held accountable for share-based compensation expense and, therefore, this expense is allocated to our divisions as an incremental employee compensation cost. The expense allocated to our divisions excludes any impact of changes in our assumptions during the year which reflect market conditions over which division management has no control. Therefore, any variances between allocated expense and our actual expense are recognized in corporate unallocated expenses. Pension and Retiree Medical Expense Pension and retiree medical service costs measured at fixed discount rates are reflected in division results. The variance between the fixed discount rate used to determine the service cost reflected in division results and the discount rate as disclosed in Note 7 is reflected in corporate unallocated expenses. Derivatives We centrally manage commodity derivatives on behalf of our divisions. These commodity derivatives include agricultural products, metals, and energy. Commodity derivatives that do not qualify for hedge accounting treatment are marked to market each period with the resulting gains and losses recorded in corporate unallocated expenses as either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. These gains and losses are subsequently reflected in 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 derivatives hedge underlying commodity price risk and were not entered into for trading or speculative purposes. Net Revenue, Significant Expenses and Operating Profit/(Loss) by Division Our chief operating decision maker (CODM) is our Chairman and Chief Executive Officer. Our CODM uses division operating profit/(loss) as the profit measure to evaluate division performance and allocate resources across divisions. Corporate unallocated expenses, other pension and retiree medical benefits (expense)/income and net interest expense and other are centrally managed costs and are therefore excluded from this profit measure to provide better transparency of our division operating results. Our CODM considers variances of actual performance to our annual operating plan and periodic forecasts when making decisions. Significant expenses are expenses which are regularly provided to the CODM and are included in division operating profit/(loss). These consist of segment cost of sales, segment selling, general and administrative expenses, and various items affecting comparability. Segment cost of sales includes raw materials, direct labor and plant overhead, as well as purchasing and receiving costs, costs directly related to production planning, inspection costs and raw materials handling facilities, excluding the impact of items affecting comparability. Segment selling, general and administrative expenses include the costs to execute sales to customers, distribution costs, including the costs of shipping and handling activities, which include certain merchandising activities, costs related to brand and product marketing to consumers, other ongoing operating costs that are not directly related to manufacturing, distribution, selling, advertising or marketing activities as well as other income or expense items, excluding the impact of items affecting comparability. Items affecting comparability include restructuring and impairment charges, acquisition and divestiture- related charges, impairment and other charges/credits, product recall-related impact, indirect tax impact and gain associated with the Juice Transaction. Asset and other balance sheet information for divisions is not provided to the CODM. 69 Net revenue, significant expenses and operating profit/(loss) of each division are as follows: 2024 FLNA QFNA PBNA LatAm Europe AMESA APAC Total Net revenue $ 24,755 $ 2,676 $ 27,769 $ 11,718 $ 13,874 $ 6,217 $ 4,845 $ 91,854 Segment cost of sales (a) 8,786 1,459 12,701 4,762 7,219 3,885 2,431 Segment selling, general and administrative expenses (a)(b) 9,494 710 11,964 4,442 4,368 1,515 1,589 Restructuring and impairment charges (c) 150 11 238 51 123 14 10 Acquisition and divestiture-related charges (d) 9 — 8 — — 5 — Impairment and other charges (e) — 9 556 — 145 — 4 Product recall-related impact (f) — 184 — — — — — Indirect tax impact (g) — — — 218 — — — Division operating profit $ 6,316 $ 303 $ 2,302 $ 2,245 $ 2,019 $ 798 $ 811 $ 14,794 Corporate unallocated expenses (1,907) Operating profit 12,887 Other pension and retiree medical benefits expense (22) Net interest expense and other (919) Income before income taxes $ 11,946 2023 FLNA QFNA PBNA LatAm Europe AMESA APAC Total Net revenue $ 24,914 $ 3,101 $ 27,626 $ 11,654 $ 13,234 $ 6,139 $ 4,803 $ 91,471 Segment cost of sales (a) 8,829 1,603 12,856 4,958 7,178 3,888 2,422 Segment selling, general and administrative expenses (a) 9,288 870 11,808 4,413 4,213 1,434 1,601 Restructuring and impairment charges (c) 42 — 41 29 223 15 8 Acquisition and divestiture-related charges (d) — — 16 — (2) 2 — Impairment and other charges/credits (e) — — 321 2 855 (7) 59 Product recall-related impact (f) — 136 — — — — — Division operating profit $ 6,755 $ 492 $ 2,584 $ 2,252 $ 767 $ 807 $ 713 $ 14,370 Corporate unallocated expenses (2,384) Operating profit 11,986 Other pension and retiree medical benefits income 250 Net interest expense and other (819) Income before income taxes $ 11,417 70 2022 FLNA QFNA PBNA LatAm Europe AMESA APAC Total Net revenue $ 23,291 $ 3,160 $ 26,213 $ 9,779 $ 12,724 $ 6,438 $ 4,787 $ 86,392 Segment cost of sales (a) 8,183 1,673 12,154 4,490 7,173 4,108 2,509 Segment selling, general and administrative expenses (a) 8,839 876 11,383 3,559 4,168 1,459 1,548 Restructuring and impairment charges (c) 46 7 68 32 109 12 16 Acquisition and divestiture-related charges (d) — — 51 — 14 3 — Gain associated with the Juice Transaction (h) — — (3,029) — (292) — — Impairment and other charges (e) 88 — 160 71 2,932 190 177 Division operating profit/(loss) $ 6,135 $ 604 $ 5,426 $ 1,627 $ (1,380) $ 666 $ 537 $ 13,615 Corporate unallocated expenses (2,103) Operating profit 11,512 Other pension and retiree medical benefits income 132 Net interest expense and other (939) Income before income taxes $ 10,705 (a) Does not include items recorded in the cost of sales or selling, general and administrative expenses lines on our income statement that are presented in the restructuring and impairment charges, acquisition and divestiture-related charges, impairment and other charges/credits, product recall-related impact and indirect tax impact lines of these tables. (b) We recognized a pre-tax gain of $122 million ($92 million after-tax or $0.07 per share) in our 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. See Note 13 for further information. (c) See Note 3 for further information related to restructuring and impairment charges. (d) See Note 13 for further information related to acquisitions and divestiture-related charges. (e) See below and Note 4 for impairment and other charges taken related to the Russia-Ukraine conflict, brand portfolio impairment and other impairment. (f) In 2024, we recorded a pre-tax charge of $187 million ($143 million after-tax or $0.10 per share) associated with the Quaker Recall with $176 million recorded in cost of sales related to property, plant and equipment write-offs, employee severance costs and other costs, $8 million recorded in selling, general and administrative expenses and $3 million recorded in other pension and retiree medical benefits (expense)/income, which is not included in operating profit. In 2023, we recorded a pre-tax charge of $136 million ($104 million after- tax or $0.07 per share) in cost of sales for product returns, inventory write-offs and customer and consumer-related costs associated with the Quaker Recall. (g) We recorded a pre-tax charge of $218 million ($218 million after-tax or $0.16 per share) in cost of sales related to an indirect tax reserve in our LatAm division. (h) We recorded a gain of $3,029 million and $292 million in our PBNA and Europe divisions, respectively, associated with the Juice Transaction. The total after-tax amount was $2,888 million or $2.08 per share. See Note 13 for further information. Disaggregation of Net Revenue Our primary performance obligation is the distribution and sales of beverage and convenient food products to our customers. The following table reflects the percentage of net revenue generated between our beverage business and our convenient food business for each of our international divisions, as well as our consolidated net revenue: 2024 2023 2022 Beverages(a) Convenient Foods Beverages(a) Convenient Foods Beverages(a) Convenient Foods LatAm 10 % 90 % 9 % 91 % 9 % 91 % Europe 48 % 52 % 48 % 52 % 50 % 50 % AMESA 30 % 70 % 29 % 71 % 30 % 70 % APAC 23 % 77 % 23 % 77 % 23 % 77 % PepsiCo 42 % 58 % 41 % 59 % 42 % 58 % (a) Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe divisions, is 35% of our consolidated net revenue in both 2024 and 2023, and 37% of our consolidated net revenue in 2022. Generally, our finished goods beverage operations produce higher net revenue, but lower operating margins as compared to concentrate sold to authorized bottling partners for the manufacture of finished goods beverages. 71 Impairment and Other Charges We recognized Russia-Ukraine conflict charges, brand portfolio impairment charges and other impairment charges as described below. A summary of pre-tax charges taken in 2022 in our Europe division as a result of the Russia-Ukraine conflict is as follows: Cost of sales Selling, general and administrative expenses Impairment of intangible assets(a) Total Impairment charges related to intangible assets $ — $ — $ 1,198 $ 1,198 Impairment charges related to property, plant and equipment 103 22 — 125 Allowance for expected credit losses — 12 — 12 Allowance for inventory write downs 28 1 — 29 Other 9 42 — 51 Total $ 140 $ 77 $ 1,198 $ 1,415 After-tax amount $ 1,124 Impact on net income attributable to PepsiCo per common share $ (0.81) (a) See Note 4 for further information. For information on our policies for indefinite-lived intangible assets, see Note 2. In 2023, a pre-tax credit of $7 million ($7 million after-tax or $0.01 per share) was recorded in our Europe division, primarily in selling, general and administrative expenses, representing adjustments for changes in estimates of previously recorded amounts. A summary of pre-tax charges taken in 2022 as a result of our decision to reposition or discontinue the sale/distribution of certain brands and to sell an investment is as follows: Cost of sales Selling, general and administrative expenses Impairment of intangible assets Total PBNA $ 26 $ 8 $ 126 $ 160 Impairment and other charges associated with distribution rights and inventory due to the termination of Bang energy drinks distribution agreement LatAm — 35 36 71 Loss on sale and impairment of intangible assets related to the sale of certain non-strategic brands Europe 1 10 242 253 Primarily impairment of intangible assets related to the discontinuation or repositioning of certain juice and dairy brands in Russia (a) AMESA 29 121 9 159 Primarily impairment of investment, property, plant and equipment and intangible assets related to the sale or discontinuation of non-strategic investment and brands APAC 5 — — 5 Impairment of property, plant and equipment related to the discontinuation of a non-strategic brand in China Total $ 61 $ 174 $ 413 $ 648 After-tax amount $ 522 Impact on net income attributable to PepsiCo per common share $ (0.38) (a) See Note 4 for further information. For information on our policies for indefinite-lived intangible assets, see Note 2. 72 In 2023, a pre-tax credit of $13 million ($13 million after-tax or $0.01 per share) was recorded in our AMESA division, with $9 million in selling, general and administrative expenses and $4 million in cost of sales. In addition, a pre-tax charge of $2 million ($1 million after-tax with a nominal amount per share) was recorded in our LatAm division in selling, general and administrative expenses. Both of these amounts represent adjustments for changes in estimates of previously recorded amounts. A summary of pre-tax other impairment charges taken as a result of our quantitative assessments is as follows: 2024 2023 2022 FLNA $ — $ — $ 88 Related to a baked fruit convenient food brand (recorded in impairment of intangible assets) QFNA 9 — — Related to a nutrition bar brand (recorded in impairment of intangible assets) PBNA 556 321 — 2024 includes other-than-temporary impairment of our remaining investment in TBG and allowance for expected credit losses related to receivables associated with the Juice Transaction (recorded in selling, general and administrative expenses). 2023 includes our proportionate share of TBG’s indefinite-lived intangible assets impairment and other-than- temporary impairment of our investment in TBG (recorded in selling, general and administrative expenses) (a) Europe 145 862 1,264 2024 primarily includes other-than-temporary impairment of our investment in TBG and allowance for expected credit losses related to certain receivables from TBG (recorded in selling, general and administrative expenses). 2023 and 2022 are related to the SodaStream brand and goodwill (recorded in impairment of intangible assets) (a)(b) AMESA — 6 31 Related to brands from the Pioneer Food Group Ltd. acquisition (recorded in impairment of intangible assets) APAC 4 59 172 Primarily related to the Be & Cheery brand (recorded in impairment of intangible assets) Total $ 714 $ 1,248 $ 1,555 After-tax amount $ 584 $ 1,033 $ 1,301 Impact on net income attributable to PepsiCo per common share $ (0.42) $ (0.75) $ (0.94) (a) See Note 9 for further information regarding our proportionate share of TBG’s indefinite-lived intangible assets impairment and other- than temporary impairment of our investment in TBG. In 2024, we recorded an allowance for expected credit losses of $193 million, primarily related to outstanding receivables associated with the Juice Transaction. (b) See Note 4 for further information regarding impairment of intangible assets. For information on our policies for indefinite-lived intangible assets, see Note 2. 73 Other Division Information Capital spending, amortization of intangible assets, and depreciation and other amortization of each division are as follows: Capital Spending Amortization of Intangible Assets Depreciation and Other Amortization 2024 2023 2022 2024 2023 2022 2024 2023 2022 FLNA $ 1,182 $ 1,341 $ 1,464 $ 10 $ 11 $ 11 $ 806 $ 736 $ 653 QFNA 124 103 93 — — — 46 51 47 PBNA 1,541 1,723 1,714 22 22 22 1,047 1,003 930 LatAm 837 841 581 2 2 3 394 372 306 Europe 568 551 668 29 29 30 377 347 357 AMESA 450 391 307 3 3 4 172 167 179 APAC 294 284 241 8 8 8 116 99 92 Total division 4,996 5,234 5,068 74 75 78 2,958 2,775 2,564 Corporate 322 284 139 — — — 128 98 121 Total $ 5,318 $ 5,518 $ 5,207 $ 74 $ 75 $ 78 $ 3,086 $ 2,873 $ 2,685 Net revenue and long-lived assets by country are as follows: Net Revenue Long-Lived Assets(a) 2024 2023 2022 2024 2023 United States $ 51,668 $ 52,165 $ 49,390 $ 41,547 $ 41,234 Mexico 7,123 7,011 5,472 2,392 2,509 Russia 3,880 3,566 4,118 1,667 1,986 Canada 3,764 3,722 3,536 2,681 2,815 China 2,709 2,703 2,752 1,538 1,510 United Kingdom 2,063 1,946 1,844 871 868 South Africa 1,859 1,707 1,837 1,302 1,305 Brazil 1,765 1,779 1,617 497 573 All other countries 17,023 16,872 15,826 11,179 11,226 Total $ 91,854 $ 91,471 $ 86,392 $ 63,674 $ 64,026 (a) Long-lived assets represent property, plant and equipment, indefinite-lived intangible assets, amortizable intangible assets, investments in noncontrolled affiliates and other investments included in other assets. These assets are reported in the country where they are primarily used. See Notes 2 and 15 for further information on property, plant and equipment. See Notes 2 and 4 for further information on goodwill and other intangible assets. See Notes 9 and 15 for further information on other assets. Corporate Unallocated Expenses Corporate unallocated expenses include costs of our corporate headquarters, centrally managed initiatives such as commodity derivative gains and losses, foreign exchange transaction gains and losses, our ongoing business transformation initiatives, unallocated research and development costs, unallocated insurance and benefit programs, certain gains and losses on equity investments, as well as certain other items. Note 2 — Our Significant Accounting Policies Revenue Recognition We recognize revenue when our performance obligation is satisfied. Our primary performance obligation (the distribution and sales of beverage and convenient food products) is satisfied upon the shipment or delivery of products to our customers, which is also when control is transferred. 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 administrative expenses. Merchandising activities are immaterial in the context of our contracts. In addition, we exclude from net revenue all sales, use, value-added and certain excise taxes assessed by government authorities on revenue producing transactions. 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. Our policy for DSD, including certain chilled products, is to remove and replace damaged and out-of-date products from store shelves to ensure that consumers receive the product quality and freshness they expect. Similarly, our policy for certain warehouse-distributed products is to replace damaged and out-of-date products. As a result, we record reserves, based on estimates, for product recall, anticipated damaged and out-of-date products. Our products are sold for cash or on credit terms. Our credit terms, which are established in accordance with local and industry practices, typically require payment within 30 days of delivery in the United States, and generally within 30 to 90 days internationally, and may allow discounts for early payment. 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 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. Total Marketplace Spending We offer sales incentives and discounts through various programs to customers and consumers. Total marketplace spending includes sales incentives, discounts, advertising and other marketing activities. 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 also include support provided to our independent bottlers through funding of advertising and other marketing activities. 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. 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. 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. Upfront payments to customers under these arrangements are recognized over the shorter of the economic or contractual life, primarily as a reduction of revenue, and the remaining balances of $237 million as of December 28, 2024 and $228 million as of December 30, 2023 are included in prepaid expenses and other current assets and other assets on our balance sheet. 75 For interim reporting, our policy is to allocate our forecasted full-year sales incentives for most of our programs to each of our interim reporting periods in the same year that benefits from the programs. The allocation methodology is based on our forecasted sales incentives for the full year and the proportion of each interim period’s actual gross revenue or volume, as applicable, to our forecasted annual gross revenue or volume, as applicable. Based on our review of the forecasts at each interim period, any changes in estimates and the related allocation of sales incentives are recognized beginning in the interim period that they are identified. In addition, we apply a similar allocation methodology for interim reporting purposes for certain advertising and other marketing activities. 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. Deferred advertising costs are not expensed until the year first used and consist of: • media and personal service prepayments; • promotional materials in inventory; and • production costs of future media advertising. Deferred advertising costs of $58 million and $67 million as of December 28, 2024 and December 30, 2023, respectively, are classified as prepaid expenses and other current assets on our balance sheet. Distribution Costs Distribution costs, including the costs of shipping and handling activities, which include certain merchandising activities, are reported as selling, general and administrative expenses. Shipping and handling expenses were $16.0 billion in 2024, $15.4 billion in 2023 and $15.0 billion in 2022. Software Costs We capitalize certain computer software and software development costs incurred in connection with developing or obtaining computer software for internal use when both the preliminary project stage is completed and it is probable that the software will be used as intended. Capitalized software costs include (1) external direct costs of materials and services utilized in developing or obtaining computer software, (2) compensation and related benefits for employees who are directly associated with the software projects and (3) interest costs incurred while developing internal-use computer software. 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. Net capitalized software and development costs were $1.5 billion and $1.4 billion as of December 28, 2024 and December 30, 2023, respectively. Commitments and Contingencies We are subject to various claims and contingencies related to lawsuits, certain taxes and environmental matters, as well as commitments under contractual and other commercial obligations. 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. Research and development costs were $813 million, $804 million and 76 $771 million in 2024, 2023 and 2022, respectively, and are reported within selling, general and administrative expenses. Goodwill and Other Intangible Assets Indefinite-lived intangible assets and goodwill are not amortized and, as a result, are assessed for impairment at least annually, using either a qualitative or quantitative approach. We perform this annual assessment during our third quarter, or more frequently if circumstances indicate that the carrying value may not be recoverable. Where we use the qualitative assessment, first we determine if, based on qualitative factors, it is more likely than not that an impairment exists. 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. 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. Estimated fair value is determined using discounted cash flows and requires an analysis of several estimates including future cash flows or income consistent with management’s strategic business plans, annual sales growth rates, perpetuity growth assumptions and the selection of assumptions underlying a discount rate (weighted-average cost of capital) based on market data available at the time. Significant management judgment is necessary to estimate the impact of competitive operating, macroeconomic and other factors (including those related to volatile geopolitical conditions and a high interest rate and inflationary cost environment) to estimate future levels of sales, operating profit or cash flows. 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. Amortizable intangible assets are only evaluated for impairment upon a significant change in the operating or macroeconomic environment. 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 4 for further information. 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 • Inventories – Inventories are valued at the lower of cost or net realizable value. Cost is determined using the average; first-in, first-out (FIFO); or, in limited instances, last-in, first-out (LIFO) methods. For inventories valued under the LIFO method, the differences between the LIFO and FIFO methods of valuing inventories are not material. • Property, Plant and Equipment – Note 15. Property, plant and equipment is recorded at historical cost. 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. Adjustments resulting from translating net assets are reported as a separate component of accumulated other comprehensive loss within common shareholders’ equity as currency translation adjustment. Recently Issued Accounting Pronouncements Adopted In November 2023, the Financial Accounting Standards Board (FASB) issued guidance to enhance disclosure of expenses of a public entity’s reportable segments. The new guidance requires a public entity to disclose on an annual and interim basis: (1) significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, (2) an amount for other segment items (the difference between segment revenue less the significant expenses disclosed under the significant expense principle and each reported measure of segment profit or loss), including a description of its composition, and (3) information about a reportable segment’s: (a) profit or loss, and (b) assets, if provided to CODM, and on an annual basis, the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and how to allocate resources. The new guidance also clarifies that if the CODM uses more than one measure of a segment’s profit or loss, one or more of those measures may be reported and requires that a public entity that has a single reportable segment provide all the disclosures required by the amendments in the guidance and all existing segment disclosures. We adopted the guidance in our 2024 annual reporting, on a retrospective basis. See Note 1 for further information. In September 2022, the FASB issued guidance to enhance the transparency of supplier finance programs to allow financial statement users to understand the effect on working capital, liquidity and cash flows. The new guidance requires disclosure of key terms of the program, including a description of the payment terms, payment timing and assets pledged as security or other forms of guarantees provided to the finance provider or intermediary. Other requirements include the disclosure of the amount that remains unpaid as of the end of the reporting period, a description of where these obligations are presented in the balance sheet and a rollforward of the obligation during the annual period. We adopted the guidance in the first quarter of 2023, except for the rollforward, which we adopted in our 2024 annual reporting, on a prospective basis. See Note 14 for further information. Not Yet Adopted In November 2024, the FASB issued guidance to improve the disclosure of expenses in commonly presented expense captions. The new guidance requires a public entity to provide tabular disclosure, on an annual and interim basis, of amounts for the following expense categories: (1) purchases of inventory, (2) employee compensation, (3) depreciation and (4) intangible asset amortization, as included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement that contains any of the expense categories noted. Additionally, on an annual and interim basis, a qualitative description is required for amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. The guidance also requires certain amounts that are 78 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 is effective for 2027 annual reporting, and in the first quarter of 2028 for interim reporting, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. We will adopt the guidance when it becomes effective, in our 2027 annual reporting and each quarter thereafter, on a prospective basis. In December 2023, the FASB issued guidance to enhance transparency of income tax disclosures. On an annual basis, the new guidance requires a public entity to disclose: (1) specific categories in the rate reconciliation, (2) additional information for reconciling items that are equal to or greater than 5% of the amount computed by multiplying income (or loss) from continuing operations before income tax expense (or benefit) by the applicable statutory income tax rate, (3) income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, with foreign taxes disaggregated by individual jurisdictions in which income taxes paid is equal to or greater than 5% of total income taxes paid, (4) income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign, and (5) income tax expense (or benefit) from continuing operations disaggregated between federal (national), state and foreign. The guidance is effective for fiscal year 2025 annual reporting, with early adoption permitted, to be applied on a prospective basis, with retrospective application permitted. We will adopt the guidance when it becomes effective, in our 2025 annual reporting, on a prospective basis. Note 3 — Restructuring and Impairment Charges 2019 Multi-Year Productivity Plan The 2019 Productivity Plan leverages new technology and business models to further simplify, harmonize and automate processes; re-engineers our go-to-market and information systems, including deploying the right automation for each market; and simplifies our organization and optimizes our manufacturing and supply chain footprint. To build on the successful implementation of the 2019 Productivity Plan, in the fourth quarter of 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, as compared to our previous estimate of pre-tax charges of approximately $3.65 billion, including cash expenditures of approximately $2.9 billion. 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. The total plan pre-tax charges are expected to be incurred by division approximately as follows: FLNA QFNA PBNA LatAm Europe AMESA APAC Corporate Expected pre-tax charges 15 % 1 % 25 % 10 % 25 % 5 % 4 % 15 % 79 A summary of our 2019 Productivity Plan charges is as follows: 2024 2023 2022 Cost of sales $ 133 $ 13 $ 33 Selling, general and administrative expenses 551 433 347 Impairment of intangible assets 14 — — Other pension and retiree medical benefits expense/ (income) (a) 29 (1) 31 Total restructuring and impairment charges $ 727 $ 445 $ 411 After-tax amount $ 563 $ 349 $ 334 Impact on net income attributable to PepsiCo per common share $ (0.41) $ (0.25) $ (0.24) 2024 2023 2022 Plan to Date through 12/28/2024 FLNA $ 150 $ 42 $ 46 $ 402 QFNA 11 — 7 30 PBNA 238 41 68 505 LatAm 51 29 32 251 Europe 123 223 109 689 AMESA 14 15 12 111 APAC 10 8 16 95 Corporate 101 88 90 418 698 446 380 2,501 Other pension and retiree medical benefits expense/(income) (a) 29 (1) 31 126 Total $ 727 $ 445 $ 411 $ 2,627 (a) Income amount represents adjustments for changes in estimates of previously recorded amounts. Plan to Date through 12/28/2024 Severance and other employee costs $ 1,434 Asset impairments 306 Other costs 887 Total $ 2,627 Severance and other employee costs primarily include severance and other termination benefits, as well as voluntary separation arrangements. Other costs primarily include costs associated with the implementation of our initiatives, including consulting and other professional fees, as well as contract termination costs. 80 A summary of our 2019 Productivity Plan is as follows: Severance and Other Employee Costs Asset Impairments Other Costs Total Liability as of December 25, 2021 $ 64 $ — $ 7 $ 71 2022 restructuring charges 243 33 135 411 Cash payments (a) (90) — (134) (224) Non-cash charges and translation (29) (33) — (62) Liability as of December 31, 2022 188 — 8 196 2023 restructuring charges 243 2 200 445 Cash payments (a) (242) — (192) (434) Non-cash charges and translation (1) (2) (7) (10) Liability as of December 30, 2023 188 — 9 197 2024 restructuring charges 384 114 229 727 Cash payments (a) (204) — (232) (436) Non-cash charges and translation (30) (114) 20 (124) Liability as of December 28, 2024 $ 338 $ — $ 26 $ 364 (a) Excludes cash expenditures of $7 million in 2024, and $1 million each in 2023 and 2022, reported in the cash flow statement in pension and retiree medical plan contributions. The majority of the restructuring accrual at December 28, 2024 is expected to be paid by the end of 2025. Other Productivity Initiatives There were no material charges related to other productivity and efficiency initiatives outside the scope of the 2019 Productivity Plan. We regularly evaluate different productivity initiatives beyond the productivity plan and other initiatives described above. For information on additional impairment charges, see Notes 1, 4 and 9 for impairment and other charges taken related to the Russia-Ukraine conflict, brand portfolio impairment charges and other impairment charges. Note 4 — Intangible Assets A summary of our amortizable intangible assets is as follows: 2024 2023 2022 Average Useful Life (Years) Gross Accumulated Amortization Net Gross Accumulated Amortization Net Acquired franchise rights 56 – 60 $ 821 $ (223) $ 598 $ 840 $ (214) $ 626 Customer relationships 15 – 24 565 (279) 286 560 (265) 295 Brands 20 – 40 1,051 (977) 74 1,093 (989) 104 Other identifiable intangibles 10 – 24 420 (276) 144 449 (275) 174 Total $ 2,857 $ (1,755) $ 1,102 $ 2,942 $ (1,743) $ 1,199 Amortization expense $ 74 $ 75 $ 78 81 Amortization is recognized on a straight-line basis over an intangible asset’s estimated useful life. Amortization of intangible assets for each of the next five years, based on existing intangible assets as of December 28, 2024 and using average 2024 foreign exchange rates, is expected to be as follows: 2025 2026 2027 2028 2029 Five-year projected amortization $ 73 $ 64 $ 60 $ 59 $ 58 Depreciable and amortizable assets are evaluated for impairment upon a significant change in the operating or macroeconomic environment. In these circumstances, if an evaluation of the undiscounted cash flows indicates impairment, the asset is written down to its estimated fair value, which is based on discounted future cash flows. Useful lives are periodically evaluated to determine whether events or circumstances have occurred which indicate the need for revision. Indefinite-Lived Intangible Assets As discussed in Note 2, we perform our annual impairment assessment on indefinite-lived intangible assets during our third quarter. 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. 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. We continue to monitor the performance of the SodaStream reporting unit, as well as all of our indefinite-lived intangible assets. We did not recognize any impairment charges for goodwill in the year ended December 28, 2024. 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. 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. We determined that the carrying value exceeded the fair value for certain of our intangible assets, which reflects 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). 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. See Note 1 for further information. In the first quarter of 2022, we discontinued or repositioned certain juice and dairy brands in Russia in our Europe division. As a result, we recognized pre-tax impairment charges of $241 million ($193 million after-tax or $0.14 per share) in impairment of intangible assets, primarily related to indefinite-lived intangible assets in the year ended December 31, 2022. See Note 1 for further information. In the second quarter of 2022, macroeconomic factors, sanctions and other regulations as a result of the Russia-Ukraine conflict indicated a material deterioration of the significant inputs used to determine the fair value of our indefinite-lived intangible assets in Russia, primarily assumptions underlying the 82 weighted-average cost of capital. These factors required us to perform a quantitative assessment, despite the absence of a material adverse impact on these assets’ financial performance (e.g., sales, operating profit, cash flows). The fair value of our indefinite-lived intangible assets in Russia was estimated using discounted cash flows under the income approach, which we consider to be a Level 3 measurement. We determined that the carrying value exceeded the fair value, with the decrease in the fair value primarily attributable to a significant increase in the weighted-average cost of capital, which reflected the macroeconomic uncertainty in Russia. As a result of the quantitative assessment, we recorded pre-tax impairment charges of $1.2 billion ($958 million after-tax or $0.69 per share) in impairment of intangible assets, related to our juice and dairy brands in Russia in our Europe division, in the year ended December 31, 2022. See Note 1 for further information. In the fourth quarter of 2022, macroeconomic conditions including a high interest rate and inflationary cost environment, coupled with 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. 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. 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). As a result of the quantitative assessment, we recognized pre-tax impairment charges of $1.6 billion ($1.3 billion after- tax or $0.94 per share) in impairment of intangible assets, primarily related to the SodaStream brand in our Europe division, in the year ended December 31, 2022. See Note 1 for further information. We did not recognize any impairment charges for goodwill in the year ended December 31, 2022. For further information on our policies for indefinite-lived intangible assets, see Note 2. The components of indefinite-lived intangible assets are as follows: 2024 2023 Goodwill $ 17,534 $ 17,728 Other indefinite-lived intangible assets Reacquired franchise rights 7,437 7,533 Acquired franchise rights 1,858 1,891 Brands (a) 4,404 4,306 Total indefinite-lived intangible assets $ 31,233 $ 31,458 (a) Increase is related to the acquisition of remaining ownership in Sabra. See Note 13 for further information. 83 The change in the book value of goodwill is as follows: FLNA QFNA PBNA LatAm Europe (a) AMESA APAC Total Balance as of December 31, 2022 $ 451 $ 189 $ 11,947 $ 436 $ 3,646 $ 1,015 $ 518 $ 18,202 Acquisitions — — 4 — — 34 — 38 Impairment — — — — (290) — — (290) Translation and other 2 — 10 24 (190) (58) (10) (222) Balance as of December 30, 2023 453 189 11,961 460 3,166 991 508 17,728 Acquisitions (b) 159 — — — — — 3 162 Translation and other (10) — (36) (47) (220) (21) (22) (356) Balance as of December 28, 2024 $ 602 $ 189 $ 11,925 $ 413 $ 2,946 $ 970 $ 489 $ 17,534 (a) Impairment in 2023 is related to SodaStream. Translation and other in 2023 primarily reflects the depreciation of the Russian ruble, partially offset by appreciation of the euro and British pound. Translation and other in 2024 primarily reflects the depreciation of the Russian ruble and euro. (b) Primarily related to the acquisition of remaining ownership in Sabra. See Note 13 for further information. Note 5 — Income Taxes The components of income before income taxes are as follows: 2024 2023 2022 United States $ 2,590 $ 4,120 $ 7,305 Foreign 9,356 7,297 3,400 $ 11,946 $ 11,417 $ 10,705 The provision for income taxes consisted of the following: 2024 2023 2022 Current: U.S. Federal $ 1,033 $ 1,133 $ 1,137 Foreign 1,406 1,201 1,027 State 255 309 246 2,694 2,643 2,410 Deferred: U.S. Federal (306) (109) 22 Foreign (10) (212) (709) State (58) (60) 4 (374) (381) (683) $ 2,320 $ 2,262 $ 1,727 84 A reconciliation of the U.S. Federal statutory tax rate to our annual tax rate is as follows: 2024 2023 2022 U.S. Federal statutory tax rate 21.0 % 21.0 % 21.0 % State income tax, net of U.S. Federal tax benefit 1.3 1.8 1.8 Lower taxes on foreign results (2.5) (2.5) (1.5) One-time mandatory transition tax - TCJ Act — — 0.8 Juice Transaction — (0.1) (2.4) Tax settlements — — (3.0) Other, net (0.4) (0.4) (0.6) Annual tax rate 19.4 % 19.8 % 16.1 % Tax Cuts and Jobs Act In 2022, we recorded $86 million ($0.06 per share) of net tax expense related to the TCJ Act as a result of correlating adjustments related to a partial audit settlement with the IRS for tax years 2014 through 2019. As of December 28, 2024, our mandatory transition tax liability was $1.7 billion, which must be paid through 2026 under the provisions of the TCJ Act. We reduced our liability through cash payments and application of tax overpayments by $579 million in 2024, and $309 million in each of 2023 and 2022. We currently expect to pay approximately $772 million of this liability in 2025. The TCJ Act also created a requirement that certain income earned by foreign subsidiaries, known as global intangible low-tax income (GILTI), must be included in the gross income of their U.S. shareholder. The FASB allows an accounting policy election of either recognizing deferred taxes for temporary differences expected to reverse as GILTI in future years or recognizing such taxes as a current-period expense when incurred. We elected to treat the tax effect of GILTI as a current-period expense when incurred. Other Tax Matters On October 29, 2021, we filed a formal written protest of a final assessment from the IRS audit for the tax years 2014 through 2016 and requested an appeals conference. In 2022, we came to an agreement with the IRS to settle one of the issues assessed in the 2014 through 2016 tax audit. The agreement covers tax years 2014 through 2019. As a result, we reduced our reserves for uncertain tax positions, including any correlating adjustments impacting the mandatory transition tax liability under the TCJ Act, resulting in a net non-cash tax benefit of $233 million ($0.17 per share) in 2022. Tax years 2014 through 2019 remain under audit for other issues. In 2024 and 2023, tax benefits of $54 million ($0.04 per share) and $68 million ($0.05 per share), respectively, were recorded related to the impairment of certain consolidated investments. 85 Deferred tax liabilities and assets are comprised of the following: 2024 2023 Deferred tax liabilities Debt guarantee of wholly-owned subsidiary $ 578 $ 578 Property, plant and equipment 1,868 1,978 Recapture of net operating losses 488 492 Pension liabilities 112 167 Right-of-use assets 772 660 Investment in TBG — 93 Other 301 350 Gross deferred tax liabilities 4,119 4,318 Deferred tax assets Net carryforwards 6,737 6,877 Intangible assets other than nondeductible goodwill 1,599 1,758 Share-based compensation 148 137 Retiree medical benefits 104 114 Other employee-related benefits 415 412 Deductible state tax and interest benefits 202 176 Lease liabilities 773 660 Capitalized research and development 256 210 Other 948 1,031 Gross deferred tax assets 11,182 11,375 Valuation allowances (6,185) (6,478) Deferred tax assets, net 4,997 4,897 Net deferred tax (assets)/liabilities $ (878) $ (579) A summary of our valuation allowance activity is as follows: 2024 2023 2022 Balance, beginning of year $ 6,478 $ 5,013 $ 4,628 (Benefit)/provision (198) 1,419 492 Other (deductions)/additions (95) 46 (107) Balance, end of year $ 6,185 $ 6,478 $ 5,013 86 Reserves A number of years may elapse before a particular matter, for which we have established a reserve, is audited and finally resolved. The number of years with open tax audits varies depending on the tax jurisdiction. Our major taxing jurisdictions and the related open tax audits are as follows: Jurisdiction Years Open to Audit Years Currently Under Audit United States 2014-2023 2014-2019 Mexico 2014-2023 2014-2019 United Kingdom 2021-2023 None Canada (Domestic) 2018-2023 2019 Canada (International) 2012-2023 2012-2019 Russia 2021-2023 None Our annual tax rate is based on our income, statutory tax rates and tax planning strategies and transactions, including transfer pricing arrangements, available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our annual tax rate and in evaluating our tax positions. We establish reserves when, despite our belief that our tax return positions are fully supportable, we believe that certain positions are subject to challenge and that we likely will not succeed. We adjust these reserves, as well as the related interest, in light of changing facts and circumstances, such as the progress of a tax audit, new tax laws, relevant court cases or tax authority settlements. Settlement of any particular issue would usually require the use of cash. Favorable resolution would be recognized as a reduction to our annual tax rate in the year of resolution. As of December 28, 2024, the total gross amount of reserves for income taxes, reported in other liabilities, was $2.3 billion. We accrue interest related to reserves for income taxes in our provision for income taxes and any associated penalties are recorded in selling, general and administrative expenses. The gross amount of interest accrued, reported in other liabilities, was $469 million as of December 28, 2024, of which $103 million of tax expense was recognized in 2024. The gross amount of interest accrued, reported in other liabilities, was $390 million as of December 30, 2023, of which $102 million of tax expense was recognized in 2023. A reconciliation of unrecognized tax benefits is as follows: 2024 2023 Balance, beginning of year $ 2,093 $ 1,867 Additions for tax positions related to the current year 210 225 Additions for tax positions from prior years 108 123 Reductions for tax positions from prior years (46) (51) Settlement payments (24) (16) Statutes of limitations expiration (31) (33) Translation and other (26) (22) Balance, end of year $ 2,284 $ 2,093 Carryforwards and Allowances Operating loss carryforwards and income tax credits totaling $34.0 billion as of December 28, 2024 are being carried forward in a number of foreign and state jurisdictions where we are permitted to use tax operating losses and income tax credits from prior periods to reduce future taxable income or income tax liabilities. These operating losses and income tax credits will expire as follows: $0.4 billion in 2025, $29.1 87 billion between 2026 and 2041 and $4.5 billion may be carried forward indefinitely. We establish valuation allowances for our deferred tax assets if, based on the available evidence, it is not more likely than not that some portion or all of the deferred tax assets will be realized. Undistributed International Earnings As of December 28, 2024, we had approximately $11 billion of undistributed international earnings. 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. It is not practicable for us to determine the amount of unrecognized tax expense on these reinvested international earnings. Note 6 — Share-Based Compensation Our share-based compensation program is designed to attract and retain employees while also aligning employees’ interests with the interests of our shareholders. 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. Executives who elect stock options receive four stock options for every one RSU that would have otherwise been granted. Certain executive officers and other senior executives do not have a choice and are granted 66% PSUs and 34% long-term cash, each of which are subject to pre-established performance targets. The Company may use authorized and unissued shares to meet share requirements resulting from the exercise of stock options and the vesting of RSUs and PSUs. As of December 28, 2024, 95 million shares were available for future share-based compensation grants under the LTIP. The following table summarizes our total share-based compensation expense, which is primarily recorded in selling, general and administrative expenses, and excess tax benefits recognized: 2024 2023 2022 Share-based compensation expense - equity awards $ 362 $ 380 $ 343 Share-based compensation expense - liability awards 7 19 30 Acquisition and divestiture-related charges — — 3 Restructuring charges (5) (1) — Total $ 364 $ 398 $ 376 Income tax benefits recognized in earnings related to share-based compensation $ 68 $ 73 $ 62 Excess tax benefits related to share-based compensation $ 33 $ 36 $ 44 As of December 28, 2024, there was $398 million of total unrecognized compensation cost related to nonvested share-based compensation grants. This unrecognized compensation cost is expected to be recognized over a weighted-average period of two years. Method of Accounting and Our Assumptions The fair value of share-based award grants is amortized to expense over the vesting period, primarily three years. 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 longer required to provide service to earn the award. In addition, we use historical data to estimate forfeiture rates and record share-based compensation expense only for those awards that are expected to vest. We do not backdate, reprice or grant share-based compensation awards retroactively. Repricing of awards would require shareholder approval under the LTIP. Stock Options A stock option permits the holder to purchase shares of PepsiCo common stock at a specified price. We account for our employee stock options under the fair value method of accounting using a Black-Scholes valuation model to measure stock option expense at the date of grant. All stock option grants have an exercise price equal to the fair market value of our common stock on the date of grant and generally have a 10-year term. Our weighted-average Black-Scholes fair value assumptions are as follows: 2024 2023 2022 Expected life 7 years 7 years 7 years Risk-free interest rate 4.2 % 4.2 % 1.9 % Expected volatility 16 % 16 % 16 % Expected dividend yield 2.9 % 2.7 % 2.5 % The expected life is the period over which our employee groups are expected to hold their options. It is based on our historical experience with similar grants. The risk-free interest rate is based on the expected U.S. Treasury rate over the expected life. Volatility reflects movements in our stock price over the most recent historical period equivalent to the expected life. Dividend yield is estimated over the expected life based on our stated dividend policy and forecasts of net income, share repurchases and stock price. A summary of our stock option activity for the year ended December 28, 2024 is as follows: Options(a) Weighted- Average Exercise Price Per Unit Weighted- Average Contractual Life Remaining (years) Aggregate Intrinsic Value(a) Outstanding at December 30, 2023 11,167 $ 136.10 Granted 2,034 $ 164.48 Exercised (1,555) $ 107.36 Forfeited/expired (591) $ 165.37 Outstanding at December 28, 2024 11,055 $ 143.88 6.16 $ 177,780 Exercisable at December 28, 2024 5,369 $ 119.78 3.98 $ 177,780 Expected to vest as of December 28, 2024 5,403 $ 166.64 8.19 $ — (a) In thousands. Restricted Stock Units and Performance Stock Units Each RSU represents our obligation to deliver to the holder one share of PepsiCo common stock when the award vests at the end of the service period. PSUs are awards pursuant to which a number of shares are delivered to the holder upon vesting at the end of the service period based on PepsiCo’s performance against specified financial performance metrics. 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 the terms established at the time of the award. During the vesting period, RSUs and PSUs accrue dividend equivalents that pay out in cash (without interest) if and when the applicable RSU or PSU vests and becomes payable. The fair value of RSUs and PSUs are measured at the market price of the Company’s stock on the date of grant. A summary of our RSU and PSU activity for the year ended December 28, 2024 is as follows: RSUs/PSUs(a) Weighted- Average Grant-Date Fair Value Per Unit Weighted- Average Contractual Life Remaining (years) Aggregate Intrinsic Value(a) Outstanding at December 30, 2023 5,598 $ 156.43 Granted 2,348 $ 164.25 Converted (2,055) $ 134.42 Forfeited (525) $ 165.96 Outstanding at December 28, 2024 (b) 5,366 $ 166.09 1.28 $ 820,429 Expected to vest as of December 28, 2024 (c) 5,306 $ 166.14 1.20 $ 811,310 (a) In thousands. Outstanding awards are disclosed at target. (b) The outstanding PSUs for which the vesting period has not ended as of December 28, 2024, at the threshold, target and maximum award levels were zero, 0.7 million and 1.3 million, respectively. (c) Represents the number of outstanding awards expected to vest, including estimated performance adjustments on all outstanding PSUs as of December 28, 2024. Long-Term Cash Certain executive officers and other senior executives were granted long-term cash awards for which final payout is based on PepsiCo’s total shareholder return relative to a specific set of peer companies and achievement of a specified performance target over a three-year performance period. Long-term cash awards that qualify as liability awards under share-based compensation guidance are valued through the end of the performance period on a mark-to-market basis using the Monte Carlo simulation model. A summary of our long-term cash activity for the year ended December 28, 2024 is as follows: Long-Term Cash Award(a) Balance Sheet Date Fair Value(b) Contractual Life Remaining (years) Outstanding at December 30, 2023 $ 51,851 Granted 19,499 Vested (15,241) Forfeited (2,139) Outstanding at December 28, 2024 (c) $ 53,970 $ 36,199 1.24 Expected to vest as of December 28, 2024 $ 49,546 $ 32,681 1.24 (a) In thousands, disclosed at target. (b) In thousands, based on the most recent valuation as of December 28, 2024. (c) The outstanding awards for which the vesting period has not ended as of December 28, 2024, at the threshold, target and maximum award levels based on the achievement of its market conditions were zero, $54 million and $108 million, respectively. 90 Other Share-Based Compensation Data The following is a summary of other share-based compensation data: 2024 2023 2022 Stock Options Total number of options granted (a) 2,034 2,162 2,422 Weighted-average grant-date fair value per unit of options granted $ 27.29 $ 29.81 $ 19.72 Total intrinsic value of options exercised (a) $ 99,388 $ 100,209 $ 134,580 Total grant-date fair value of options vested (a) $ 14,759 $ 11,830 $ 9,661 RSUs/PSUs Total number of RSUs/PSUs granted (a) 2,348 2,151 2,263 Weighted-average grant-date fair value per unit of RSUs/PSUs granted $ 164.25 $ 171.11 $ 163.02 Total intrinsic value of RSUs/PSUs converted (a) $ 372,612 $ 396,123 $ 329,705 Total grant-date fair value of RSUs/PSUs vested (a) $ 280,673 $ 286,605 $ 196,649 (a) In thousands. As of December 28, 2024 and December 30, 2023, there were approximately 311,000 and 330,000 outstanding awards, respectively, consisting primarily of phantom stock units that were granted under the PepsiCo Director Deferral Program and will be settled in shares of PepsiCo common stock pursuant to the LTIP at the end of the applicable deferral period, not included in the tables above. 91 Note 7 — Pension, Retiree Medical and Savings Plans In 2024, we recognized a pre-tax settlement charge of $213 million ($165 million after-tax or $0.12 per share) in a U.S. qualified defined benefit pension plan due to lump sum distributions to retired or terminated employees and the purchase of a group annuity contract whereby a third-party insurance company assumed the obligation to pay and administer future benefit payments for certain retirees. The settlement charge was triggered when the aggregate of the cumulative lump sum distributions and the annuity contract premium exceeded the total annual service and interest cost. Effective December 31, 2022, we merged two U.S. qualified defined benefit pension plans, PepsiCo Employees Retirement Plan I (Plan I), mostly inactive participants, and PepsiCo Employees Retirement Plan A, mostly active participants, with Plan I remaining. The accrued benefits offered to the plans’ participants were unchanged. The merger was made to provide additional flexibility in evaluating opportunities to reduce risk and volatility. Actuarial gains and losses of the merged plan will be amortized over the average remaining life expectancy of participants. There was no material impact to pre-tax pension benefits expense from this merger. In 2022, we transferred pension and retiree medical obligations of $145 million and related assets to TBG in connection with the Juice Transaction. See Note 13 for further information. In 2020, we adopted an amendment to the U.S. qualified defined benefit plans to freeze benefit accruals for salaried participants, effective December 31, 2025. Gains and losses resulting from actual experience differing from our assumptions, including the difference between the actual and expected return on plan assets, as well as changes in our assumptions, are determined at each measurement date. These differences are recognized as a component of net gain or loss in accumulated other comprehensive loss within common shareholders’ equity. 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). 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 Selected financial information for our pension and retiree medical plans is as follows: Pension Retiree Medical U.S. International 2024 2023 2024 2023 2024 2023 Change in projected benefit obligation Obligation at beginning of year $ 12,035 $ 11,543 $ 2,986 $ 2,603 $ 677 $ 714 Service cost 347 327 46 43 31 29 Interest cost 585 593 144 141 32 36 Plan amendments 12 13 1 — — — Participant contributions — — 2 2 — — Experience (gain)/loss (563) 603 (55) 194 (44) (22) Benefit payments (617) (1,006) (108) (116) (78) (80) Settlement/curtailment (506) (36) (62) (26) — — Special termination benefits 31 (1) — — 1 — Other, including foreign currency adjustment — (1) (168) 145 (3) — Obligation at end of year $ 11,324 $ 12,035 $ 2,786 $ 2,986 $ 616 $ 677 Change in fair value of plan assets Fair value at beginning of year $ 11,541 $ 11,148 $ 3,528 $ 3,195 $ 183 $ 196 Actual return on plan assets (10) 1,121 142 267 5 21 Employer contributions/funding 236 314 59 50 53 46 Participant contributions — — 2 2 — — Benefit payments (617) (1,006) (108) (116) (78) (80) Settlement (539) (36) (62) (26) — — Other, including foreign currency adjustment (2) — (164) 156 — — Fair value at end of year $ 10,609 $ 11,541 $ 3,397 $ 3,528 $ 163 $ 183 Funded status $ (715) $ (494) $ 611 $ 542 $ (453) $ (494) Amounts recognized Other assets $ 388 $ 313 $ 792 $ 727 $ — $ — Other current liabilities (85) (75) (10) (11) (52) (52) Other liabilities (1,018) (732) (171) (174) (401) (442) Net amount recognized $ (715) $ (494) $ 611 $ 542 $ (453) $ (494) Amounts included in accumulated other comprehensive loss (pre-tax) Net loss/(gain) $ 3,618 $ 3,596 $ 633 $ 707 $ (333) $ (323) Prior service cost/(credit) 54 18 (5) (8) (14) (19) Total $ 3,672 $ 3,614 $ 628 $ 699 $ (347) $ (342) Changes recognized in net loss/(gain) included in other comprehensive loss Net loss/(gain) arising in current year $ 320 $ 333 $ 8 $ 119 $ (36) $ (30) Amortization and settlement recognition (298) (74) (43) (23) 25 27 Foreign currency translation (gain)/loss — — (39) 40 1 — Total $ 22 $ 259 $ (74) $ 136 $ (10) $ (3) Accumulated benefit obligation at end of year $ 11,069 $ 11,653 $ 2,638 $ 2,835 The net loss arising in the current year is primarily attributable to lower actual asset return as compared to expected return on plan assets and actual experience differing from demographic assumptions, partially offset by experience gain primarily due to higher discount rates. 93 The amount we report in operating profit as pension and retiree medical cost is service cost, which is the value of benefits earned by employees for working during the year. The amounts we report below operating profit as pension and retiree medical cost consist of the following components: • Interest cost is the accrued interest on the projected benefit obligation due to the passage of time. • Expected return on plan assets is the long-term return we expect to earn on plan investments for our funded plans that will be used to settle future benefit obligations. • Amortization of prior service cost/(credit) represents the recognition in the income statement of benefit changes resulting from plan amendments. • Amortization of net loss/(gain) represents the recognition in the income statement of changes in the amount of plan assets and the projected benefit obligation based on changes in assumptions and actual experience. • Settlement/curtailment loss/(gain) represents the result of actions that effectively eliminate all or a portion of related projected benefit obligations. Settlements are triggered when payouts to settle the projected benefit obligation of a plan due to lump sums or other events exceed the total of annual service and interest cost. Settlements are recognized when actions are irrevocable and we are relieved of the primary responsibility and risk for projected benefit obligations. Lump sum payouts are generally higher when interest rates are lower. Curtailments are recognized when events such as plant closures, the sale of a business, or plan changes result in a significant reduction of future service or benefits. Curtailment losses are recognized when an event is probable and estimable, while curtailment gains are recognized when an event has occurred (when the related employees terminate or an amendment is adopted). • Special termination benefits are the additional benefits offered to employees upon departure due to actions such as restructuring. The components of total pension and retiree medical benefit costs are as follows: Pension Retiree Medical U.S. International 2024 2023 2022 2024 2023 2022 2024 2023 2022 Service cost $ 347 $ 327 $ 487 $ 46 $ 43 $ 64 $ 31 $ 29 $ 37 Other pension and retiree medical benefits expense/(income): Interest cost $ 585 $ 593 $ 434 $ 144 $ 141 $ 90 $ 32 $ 36 $ 19 Expected return on plan assets (871) (851) (912) (205) (192) (218) (13) (13) (16) Amortization of prior service credits (24) (26) (28) (2) (1) (1) (5) (6) (8) Amortization of net losses/(gains) 77 70 149 21 13 29 (25) (27) (14) Settlement/curtailment losses/(gains) (a) 254 4 322 22 10 1 — — (16) Special termination benefits 31 (1) 37 — — — 1 — — Total other pension and retiree medical benefits expense/(income) $ 52 $ (211) $ 2 $ (20) $ (29) $ (99) $ (10) $ (10) $ (35) Total $ 399 $ 116 $ 489 $ 26 $ 14 $ (35) $ 21 $ 19 $ 2 (a) In 2024, U.S. includes a settlement charge of $213 million ($165 million after-tax or $0.12 per share) related to the aggregate of lump sum distributions and the purchase of a group annuity contract exceeding the total of annual service and interest cost. In 2022, U.S. includes a settlement charge of $318 million ($246 million after-tax or $0.18 per share) related to lump sum distributions exceeding the total of annual service and interest cost. 94 The following table provides the weighted-average assumptions used to determine net periodic benefit cost and projected benefit obligation for our pension and retiree medical plans: Pension Retiree Medical U.S. International 2024 2023 2022 2024 2023 2022 2024 2023 2022 Net Periodic Benefit Cost Service cost discount rate (a) 5.1 % 5.4 % 3.1 % 6.9 % 7.0 % 4.2 % 5.1 % 5.4 % 2.8 % Interest cost discount rate (a) 5.1 % 5.4 % 3.1 % 5.0 % 5.4 % 2.3 % 5.0 % 5.3 % 2.1 % Expected return on plan assets (a) 7.4 % 7.4 % 6.7 % 5.8 % 5.7 % 5.3 % 7.1 % 7.1 % 5.7 % Rate of salary increases 3.9 % 3.2 % 3.0 % 4.3 % 4.2 % 3.3 % Projected Benefit Obligation Discount rate 5.7 % 5.1 % 5.4 % 5.5 % 5.1 % 5.3 % 5.5 % 5.1 % 5.4 % Rate of salary increases 3.9 % 3.9 % 3.2 % 4.0 % 4.3 % 4.2 % (a) 2022 U.S. rates reflect remeasurement of a U.S. qualified defined benefit pension plan in the second quarter of 2022. The following table provides selected information about plans with accumulated benefit obligation and total projected benefit obligation in excess of plan assets: Pension Retiree Medical U.S. International 2024 2023 2024 2023 2024 2023 Selected information for plans with accumulated benefit obligation in excess of plan assets Obligation for service to date $ (7,315) $ (631) $ (194) $ (255) Fair value of plan assets $ 6,399 $ — $ 135 $ 190 Selected information for plans with projected benefit obligation in excess of plan assets Benefit obligation $ (7,502) $ (8,223) $ (346) $ (375) $ (616) $ (677) Fair value of plan assets $ 6,399 $ 7,416 $ 165 $ 190 $ 163 $ 183 Of the total projected pension benefit obligation as of December 28, 2024, approximately $664 million relates to plans that we do not fund because the funding of such plans does not receive favorable tax treatment. Future Benefit Payments Our estimated future benefit payments are as follows: 2025 2026 2027 2028 2029 2030 - 2034 Pension $ 1,053 $ 1,145 $ 953 $ 982 $ 1,008 $ 5,327 Retiree medical (a) $ 77 $ 75 $ 72 $ 69 $ 67 $ 295 (a) Expected future benefit payments for our retiree medical plans do not reflect any estimated subsidies expected to be received under the 2003 Medicare Act. Subsidies are expected to be less than $1 million for each of the years from 2025 through 2029 and approximately $2 million in total for 2030 through 2034. These future benefit payments to beneficiaries include payments from both funded and unfunded plans. 95 Funding Contributions to our pension and retiree medical plans were as follows: Pension Retiree Medical 2024 2023 2022 2024 2023 2022 Discretionary (a) $ 161 $ 267 $ 160 $ — $ — $ — Non-discretionary 134 97 176 53 46 48 Total $ 295 $ 364 $ 336 $ 53 $ 46 $ 48 (a) Includes $150 million contribution in 2024, $250 million contribution in 2023 and $150 million contribution in 2022 to fund our U.S. qualified defined benefit plans. We made a discretionary contribution of $250 million to a U.S. qualified defined benefit plan in January 2025. In addition, in 2025, we expect to make non-discretionary contributions of approximately $102 million to our U.S. and international pension benefit plans and contributions of approximately $52 million for retiree medical benefits. We also regularly evaluate opportunities to reduce risk and volatility associated with our pension and retiree medical plans. Plan Assets Our pension plan investment strategy includes the use of actively managed accounts and is reviewed periodically in conjunction with plan obligations, an evaluation of market conditions, tolerance for risk and cash requirements for benefit payments. This strategy is also applicable to funds held for the retiree medical plans. Our investment objective includes ensuring that funds are available to meet the plans’ benefit obligations when they become due. Assets contributed to our pension plans are no longer controlled by us, but become the property of our individual pension plans. However, we are indirectly impacted by changes in these plan assets as compared to changes in our projected obligations. Our overall investment policy is to prudently invest plan assets in a well-diversified portfolio of equity and high- quality debt securities and real estate to achieve our long-term return expectations. Our investment policy also permits the use of derivative instruments, such as futures and forward contracts, to reduce interest rate and foreign currency risks. Futures contracts represent commitments to purchase or sell securities at a future date and at a specified price. Forward contracts consist of currency forwards. 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. Our target investment allocations for U.S. plan assets are as follows: 2025 2024 Fixed income 56 % 55 % U.S. equity 22 % 22 % International equity 18 % 19 % Real estate 4 % 4 % Actual investment allocations may vary from our target investment allocations due to prevailing market conditions. We regularly review our actual investment allocations and periodically rebalance our investments. The expected return on plan assets is based on our investment strategy and our expectations for long-term rates of return by asset class, taking into account volatility and correlation among asset classes and our historical experience. 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 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. For all other asset categories, such as equity securities, we use a method that recognizes investment gains or losses (the difference between the expected and actual return based on the market-related value of assets) over a five-year period. This has the effect of reducing year- to-year volatility. Plan assets measured at fair value as of year-end 2024 and 2023 are categorized consistently by Level 1 (quoted prices in active markets for identical assets), Level 2 (significant other observable inputs) and Level 3 (significant unobservable inputs) in both years and are as follows: Fair Value Hierarchy Level 2024 2023 U.S. plan assets (a)(b) Equity securities, including preferred stock (c) 1 $ 4,270 $ 4,698 Government securities (d) 2 1,538 1,812 Corporate bonds (d) 2 3,903 4,233 Mortgage-backed securities (d) 2 125 133 Contracts with insurance companies (e) 3 1 1 Cash and cash equivalents (f) (g) 1, 2 732 349 Sub-total U.S. plan assets 10,569 11,226 Real estate and other commingled funds measured at net asset value (h) 561 411 Securities lending payables, net of dividends and interest receivable (g) (358) 87 Total U.S. plan assets $ 10,772 $ 11,724 International plan assets Equity securities (c) 1 $ 1,172 $ 1,175 Government securities (d) 2 932 1,207 Corporate bonds (d) 2 469 267 Fixed income commingled funds (i) 1 557 526 Contracts with insurance companies (e) 3 29 30 Cash and cash equivalents 1 128 143 Sub-total international plan assets 3,287 3,348 Real estate commingled funds measured at net asset value (h) 79 162 Dividends and interest receivable 31 18 Total international plan assets $ 3,397 $ 3,528 (a) Includes $163 million and $183 million in 2024 and 2023, respectively, of retiree medical plan assets that are restricted for purposes of providing health benefits for U.S. retirees and their beneficiaries. (b) Includes securities loaned to borrowers under the securities lending program with fair value of $630 million in 2024. (c) Invested in U.S. and international common stock and commingled funds, and the preferred stock portfolio was invested in domestic and international corporate preferred stock investments. The common and preferred stock investments are based on quoted prices in active markets. The commingled funds are based on the published price of the fund and include one large-cap fund that represents 12% and 13% of total U.S. plan assets for 2024 and 2023, respectively. (d) These investments are based on quoted bid prices for comparable securities in the marketplace and broker/dealer quotes in active markets. Corporate bonds of U.S.-based companies represent 31% of total U.S. plan assets for both 2024 and 2023. (e) Based on the fair value of the contracts as determined by the insurance companies using inputs that are not observable. The changes in Level 3 amounts were not significant in the years ended December 28, 2024 and December 30, 2023. (f) Includes Level 1 assets of $456 million and $3 million, and Level 2 assets of $276 million and $346 million for 2024 and 2023, respectively. (g) Includes $447 million of cash collateral under the securities lending program offset by corresponding securities lending payable of the same amount. 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 majority of the funds are redeemable quarterly subject to availability of cash and have notice periods ranging from 30 to 90 days. (i) Based on the published price of the fund. 97 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. Savings Plan Certain U.S. employees are eligible to participate in a 401(k) savings plan, which is a voluntary defined contribution plan. The plan is designed to help employees accumulate savings for retirement and we make Company matching contributions for certain employees on a portion of employee contributions based on years of service. Certain U.S. employees, who are either not eligible to participate in a defined benefit pension plan or whose benefit is capped, are also eligible to receive an employer contribution based on either years of service or age and years of service regardless of employee contribution. In 2024, 2023 and 2022, our total Company contributions were $411 million, $356 million and $283 million, respectively. Note 8 — Debt Obligations The following table summarizes our debt obligations: 2024(a) 2023(a) Short-term debt obligations (b) Current maturities of long-term debt $ 4,004 $ 3,924 Commercial paper (4.5% and 5.5%) 2,818 2,286 Other borrowings (8.6% and 7.8%) 260 300 $ 7,082 $ 6,510 Long-term debt obligations (b) Notes due 2024 (3.0%) $ — $ 3,919 Notes due 2025 (3.2% and 3.2%) 3,999 3,994 Notes due 2026 (3.7% and 3.7%) 3,941 3,961 Notes due 2027 (3.1% and 2.4%) 3,370 2,544 Notes due 2028 (2.1% and 2.1%) 3,240 3,323 Notes due 2029 (4.6% and 4.0%) 3,239 1,925 Notes due 2030-2060 (3.2% and 2.9%) 23,400 21,800 Other, due 2024-2033 (5.7% and 3.6%) 39 53 41,228 41,519 Less: current maturities of long-term debt obligations 4,004 3,924 Total $ 37,224 $ 37,595 (a) Amounts are shown net of unamortized net discounts of $267 million and $225 million for 2024 and 2023, respectively. (b) The interest rates presented reflect weighted-average effective interest rates at year-end. Certain of our fixed rate indebtedness have been swapped to floating rates through the use of interest rate derivative instruments. See Note 9 for further information regarding our interest rate swap contracts. 98 As of December 28, 2024 and December 30, 2023, our international debt of $325 million and $279 million, respectively, was related to borrowings from external parties, including various lines of credit. These lines of credit are subject to normal banking terms and conditions and are fully committed at least to the extent of our borrowings. In 2024, we issued the following senior notes: Interest Rate Maturity Date Principal Amount(a) Floating rate February 2027 $ 300 (b) 4.650 % February 2027 $ 550 (b) 4.550 % February 2029 $ 450 (b) 4.700 % February 2034 $ 450 (b) 4.500 % July 2029 $ 850 4.800 % July 2034 $ 650 5.250 % July 2054 $ 750 (a) Excludes debt issuance costs, discounts and premiums. (b) Issued through our wholly-owned consolidated finance subsidiary, PepsiCo Singapore Financing I Pte. Ltd., which has no assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of the notes and any other notes that may be issued in the future. The notes are fully and unconditionally guaranteed by PepsiCo, Inc. on a senior unsecured basis and may be assumed at any time by PepsiCo, Inc. as the primary and sole obligor. The net proceeds from the issuances of the above notes were used for general corporate purposes, including the repayment of commercial paper. In 2024, we entered into a new five-year unsecured revolving credit agreement (Five-Year Credit Agreement), which expires on May 24, 2029. 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. 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. The Five-Year Credit Agreement replaced our $4.2 billion five-year credit agreement, dated as of May 26, 2023. Also in 2024, we entered into a new 364-day unsecured revolving credit agreement (364-Day Credit Agreement), which expires on May 23, 2025. 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). We may request renewal of this facility for an additional 364-day period or convert any amounts outstanding into a term loan for a period of up to one year, which term loan would mature no later than the anniversary of the then effective termination date. The 364-Day Credit Agreement replaced our $4.2 billion 364-day credit agreement, dated as of May 26, 2023. Funds borrowed under the Five-Year Credit Agreement and the 364-Day Credit Agreement may be used for general corporate purposes. Subject to certain conditions, we may borrow, prepay and reborrow amounts under these agreements. As of December 28, 2024, there were no outstanding borrowings under the Five-Year Credit Agreement or the 364-Day Credit Agreement. In 2023, we discharged via legal defeasance $94 million outstanding principal amount of certain notes originally issued by our subsidiary, The Quaker Oats Company, following the deposit of $102 million of U.S. government securities with the Bank of New York Mellon, as trustee, in the fourth quarter of 2022. In 2022, we paid $750 million to redeem all $750 million outstanding principal amount of our 2.25% senior notes due May 2022, we paid $800 million to redeem all $800 million outstanding principal amount 99 of our 3.10% senior notes due July 2022 and we paid $154 million to redeem all $133 million outstanding principal amount of our subsidiary, Pepsi-Cola Metropolitan Bottling Company, Inc.’s 7.00% senior notes due March 2029 and 5.50% notes due May 2035. Note 9 — Financial Instruments Derivatives and Hedging We are exposed to market risks arising from adverse changes in: • commodity prices, affecting the cost of our raw materials and energy; • foreign exchange rates and currency restrictions; and • interest rates. In the normal course of business, we manage commodity price, foreign exchange and interest rate risks through a variety of strategies, including productivity initiatives, global purchasing programs and hedging. Ongoing productivity initiatives involve the identification and effective implementation of meaningful cost-saving opportunities or efficiencies, including the use of derivatives. We do not use derivative instruments for trading or speculative purposes. Our global purchasing programs include fixed-price contracts and purchase orders and pricing agreements. Our hedging strategies include the use of derivatives and non-derivative debt instruments. Certain derivatives are designated as either cash flow, fair value or net investment hedges and qualify for hedge accounting treatment, while others do not qualify and are marked to market through earnings. The accounting for qualifying hedges allows changes in a hedging instrument’s fair value to offset corresponding changes in the hedged item in the same reporting period that the hedged item impacts earnings. Gains or losses on derivatives designated as cash flow and net investment hedges are recorded in accumulated other comprehensive loss within common shareholders’ equity and reclassified to our income statement when the hedged transaction affects earnings for cash flow hedges and when the hedged foreign operation is either sold or substantially liquidated for net investment hedges. If it becomes probable that the hedged transaction will not occur, we immediately recognize the related hedging gains or losses in earnings; there were no such gains or losses reclassified during the year ended December 28, 2024. Cash flows from derivatives used to manage commodity price, foreign exchange or interest rate risks are classified as operating activities in the cash flow statement. We classify both the earnings and cash flow impact from these derivatives consistent with the underlying hedged item. Cash flows associated with the settlement of derivative instruments designated as net investment hedges of foreign operations are classified within investing activities. Credit Risk We perform assessments of our counterparty credit risk regularly, including reviewing netting agreements, if any, and a review of credit ratings, credit default swap rates and potential nonperformance of the counterparty. Based on our most recent assessment of our counterparty credit risk, we consider this risk to be low. In addition, we enter into derivative contracts with a variety of financial institutions that we believe are creditworthy in order to reduce our concentration of credit risk. Certain of our agreements with our counterparties require us to post full collateral on derivative instruments in a net liability position if our credit rating is at A2 (Moody’s Investors Service, Inc.) or A (S&P Global Ratings) and we have been placed on credit watch for possible downgrade or if our credit rating falls below either of these levels. The fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position as of December 28, 2024 was $208 million. We have posted no collateral under these contracts and no credit-risk-related contingent features were triggered as of December 28, 2024. 100 Commodity Prices We are subject to commodity price risk because our ability to recover increased costs through higher pricing may be limited in the competitive environment in which we operate. This risk is managed through the use of fixed-price contracts and purchase orders, pricing agreements and derivative instruments, which primarily include swaps and futures. In addition, risk to our supply of certain raw materials is mitigated through purchases from multiple geographies and suppliers. We use derivatives, with terms of no more than two years, to hedge price fluctuations related to a portion of our anticipated commodity purchases, primarily for agricultural products, metals, and energy. Derivatives used to hedge commodity price risk 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 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. We use various interest rate derivative instruments including, but not limited to, interest rate swaps, cross-currency interest rate swaps, Treasury locks and swap locks to manage our overall interest expense. These instruments effectively change the interest rate of specific debt issuances. Certain of our fixed rate indebtedness have been swapped to floating rates. The notional amount, interest payment and maturity date of our interest rate swap contracts match the principal, interest payment and maturity date of the related debt, and they have terms of no more than six years. Our Treasury locks and swap locks are entered into to protect against unfavorable interest rate changes relating to forecasted debt transactions. As of December 28, 2024, approximately 13% of total debt was subject to variable rates, after the impact of the related interest rate swap contracts, compared to approximately 9% as of December 30, 2023. Foreign Exchange We are exposed to foreign exchange risks in the international markets in which our products are made, manufactured, distributed or sold. Additionally, we are exposed to foreign exchange risk from foreign currency purchases and foreign currency assets and liabilities created in the normal course of business. We manage this risk through sourcing purchases from local suppliers, negotiating contracts in local currencies with foreign suppliers and through the use of derivatives including, but not limited to, forward contracts and cross-currency interest rate swap contracts. Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses on our income statement as incurred. The forward contracts and cross-currency interest rate swap contracts have terms of no more than two years and twelve years, respectively. The notional amount, interest payment and maturity date of our cross- currency interest rate swap contracts match the principal, interest payment and maturity date of the related foreign currency debt. For foreign currency derivatives that do not qualify for hedge accounting treatment, gains and losses were offset by changes in the underlying hedged items, resulting in no material net impact on earnings. Net Investment Hedges We are exposed to foreign exchange risk from net investments in our foreign operations. We manage this risk for certain of our foreign operations by utilizing derivative and non-derivative instruments, including cross-currency interest rate swaps and foreign currency denominated debt designated as net investment hedges. 101 In 2024, we entered into cross-currency interest rate swaps with a total notional amount of $500 million for Chinese renminbi and maturity dates ranging from November 2025 to November 2029. The cross- currency interest rate swaps are designated as net investment hedges to hedge the net assets of certain foreign operations with Chinese renminbi functional currency. We use the spot method to assess hedge effectiveness for our net investment hedges. Excluded components in the form of interest accruals on cross-currency interest rate swaps are recorded in net interest expense and other. The notional amounts of our financial instruments used to hedge the above risks as of December 28, 2024 and December 30, 2023 are as follows: Notional Amounts(a) 2024 2023 Commodity contracts $ 1.4 $ 1.7 Interest rate swap contracts $ 2.0 $ — Foreign exchange contracts $ 3.1 $ 3.8 Cross-currency contracts $ 1.2 $ 1.3 Non-derivative debt instruments $ 2.9 $ 3.0 (a) In billions. Debt Securities Held-to-Maturity Investments in debt securities that we have the positive intent and ability to hold until maturity are classified as held-to-maturity. Highly liquid debt securities with original maturities of three months or less are recorded as cash equivalents. Our held-to-maturity debt securities consist of commercial paper. As of December 28, 2024, we have no investments in held-to-maturity debt securities. As of December 30, 2023, we had $309 million investments in commercial paper recorded in cash and cash equivalents. Held- to-maturity debt securities are recorded at amortized cost, which approximates fair value, and realized gains or losses are reported in earnings. As of December 30, 2023, gross unrecognized gains and losses and the allowance for expected credit losses were not material. Available-for-Sale Investments in available-for-sale debt securities are reported at fair value. Changes in the fair value of available-for-sale debt securities are generally recognized in accumulated other comprehensive loss within common shareholders’ equity. Changes in the fair value of available-for-sale debt securities impact earnings only when such securities are sold, or an allowance for expected credit losses or impairment is recognized. We regularly evaluate our investment portfolio for expected credit losses and impairment. In making this judgment, we evaluate, among other things, the extent to which the fair value of a debt security is less than its amortized cost; the financial condition of the issuer, including the credit quality, and any changes thereto; and our intent to sell, or whether we will more likely than not be required to sell, the debt security before recovery of its amortized cost basis. Our assessment of whether a debt security has a credit loss or is impaired could change in the future due to new developments or changes in assumptions related to any particular debt security. In 2022, we entered into an agreement with Celsius Holdings, Inc. (Celsius) to distribute Celsius energy drinks in the United States and invested $550 million in Series A convertible preferred shares issued by Celsius, which included certain conversion and redemption features. The preferred shares automatically convert into Celsius common shares after six years if certain market-based conditions are met, or can be redeemed after seven years. Shares underlying the transaction were priced at $75 per share, and the 102 preferred shares are entitled to a 5% annual dividend, payable either in cash or in-kind. Given our redemption right, we classified our investment in the convertible preferred stock as an available-for-sale debt security. As of December 31, 2022, the fair value of this investment was classified as Level 2, based primarily on the transaction price. There were no unrealized gains and losses on our investment in the year ended December 31, 2022. In the year ended December 30, 2023, we transferred $558 million from Level 2 to Level 3 as unobservable inputs to the fair value became more significant and subsequently recorded an unrealized gain of $612 million in other comprehensive income and a decrease in the investment of $14 million due to cash dividends received. In the year ended December 28, 2024, we recorded an unrealized loss of $350 million in other comprehensive income and a decrease in the investment of $21 million due to cash dividends received. In addition, during the year ended December 28, 2024, we transferred $184 million of other available-for- sale debt securities from Level 2 to Level 3, as unobservable inputs to the fair value became more significant, and subsequently recorded an unrealized gain of $72 million in other comprehensive income. There were no impairment charges related to our investments in available-for-sale debt securities in the years ended December 28, 2024, December 30, 2023 and December 31, 2022. There were net unrealized gains of $334 million and $612 million as of December 28, 2024 and December 30, 2023, respectively, associated with our available-for-sale debt securities. TBG Investment 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. We have significant influence over our investment in TBG and account for our investment under the equity method, recognizing our proportionate share of TBG’s earnings on our income statement (recorded in selling, general and administrative expenses). See Note 13 for further information. 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. We estimated the fair value of our ownership in TBG using discounted cash flows and an option pricing model related to our liquidation preference in TBG, which we categorized as Level 3 in the fair value hierarchy. 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. We estimated the fair value of our ownership in TBG using discounted cash flows. We also recorded an allowance for expected credit losses in selling, general and administrative expenses in 2024, primarily related to outstanding receivables associated with the Juice Transaction; see Note 1 for further information. 103 Recurring Fair Value Measurements The fair values of our financial assets and liabilities as of December 28, 2024 and December 30, 2023 are categorized as follows: 2024 2023 Fair Value Hierarchy Levels(a) Assets(a) Liabilities(a) Assets(a) Liabilities(a) Available-for-sale debt securities (b) 3, 2 $ 1,041 $ — $ 1,334 $ — Index funds (c) 1 $ 336 $ — $ 292 $ — Prepaid forward contracts (d) 2 $ 15 $ — $ 13 $ — Deferred compensation (e) 2 $ — $ 503 $ — $ 477 Derivatives designated as fair value hedging instruments: Interest rate swap contracts (f) 2 $ — $ 46 $ — $ — Derivatives designated as cash flow hedging instruments: Foreign exchange contracts (g) 2 $ 55 $ 3 $ 3 $ 31 Cross-currency contracts (g) 2 — 165 5 135 Commodity contracts (h) 2 27 6 10 24 $ 82 $ 174 $ 18 $ 190 Derivatives designated as net investment hedging instruments: Cross-currency contracts (g) 2 $ 1 $ 4 $ — $ — Derivatives not designated as hedging instruments: Foreign exchange contracts (g) 2 $ 28 $ 12 $ 33 $ 38 Commodity contracts (h) 2 3 10 5 13 $ 31 $ 22 $ 38 $ 51 Total derivatives at fair value (i) $ 114 $ 246 $ 56 $ 241 Total $ 1,506 $ 749 $ 1,695 $ 718 (a) Fair value hierarchy levels are defined in Note 7. Unless otherwise noted, financial assets are classified on our balance sheet within prepaid expenses and other current assets and other assets. Financial liabilities are classified on our balance sheet within accounts payable and other current liabilities and other liabilities. (b) Classified as other assets. Includes Level 3 assets of $1,041 million as of December 28, 2024, and Level 2 assets of $178 million and Level 3 assets of $1,156 million as of December 30, 2023. The fair value of our Level 3 investment in Celsius is estimated using probability-weighted discounted future cash flows based on a Monte Carlo simulation using significant unobservable inputs such as an 80% probability that a certain market-based condition will be met and an average estimated discount rate of 7.3% and 8.1% as of December 28, 2024 and December 30, 2023, respectively, based on Celsius’ estimated synthetic credit rating. The fair value of the other Level 3 investment is estimated using a lattice model primarily based on the underlying stock price, volatility and certain significant unobservable inputs, such as a discount rate of 8.3% as of December 28, 2024, based upon an estimated synthetic credit rating. An increase in the probability that certain market-based conditions will be met or a decrease in the discount rate would result in a higher fair value measurement, while a decrease in the probability that certain market-based conditions will be met or an increase in the discount rate would result in a lower fair value measurement. The fair value of our Level 2 investment as of December 30, 2023 approximates the transaction price and any accrued returns, as well as the amortized cost. (c) Based on the price of index funds. These investments are classified as short-term investments and are used to manage a portion of market risk arising from our deferred compensation liability. (d) Based primarily on the price of our common stock. (e) Based on the fair value of investments corresponding to employees’ investment elections. (f) Based on Secured Overnight Financing Rate forward rates. As of December 28, 2024, the carrying amount of hedged fixed-rate debt was $1.9 billion, which was classified on the balance sheet within long-term debt obligations. 104 (g) Based on recently reported market transactions of spot and forward rates. (h) Primarily based on recently reported market transactions of swap arrangements. (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. Exchange-traded commodity futures are cash-settled on a daily basis and, therefore, not included in the table. The carrying amounts of our cash and cash equivalents and short-term investments recorded at amortized cost approximate fair value (classified as Level 2 in the fair value hierarchy) due to their short-term maturity. The fair value of our debt obligations as of December 28, 2024 and December 30, 2023 was $40 billion and $41 billion, respectively, based upon prices of identical or similar instruments in the marketplace, which are considered Level 2 inputs. Losses/(gains) on our fair value hedges are categorized as follows: Losses/(Gains) Recognized in Income Statement(a) 2024 2023 Interest rate swap contracts $ 46 $ — (a) Interest rate derivative losses/(gains) are included in net interest expense and other. These losses/(gains) are substantially offset by decreases/increases in the value of the underlying debt, which are also included in net interest expense and other. Losses/(gains) on our cash flow hedges are categorized as follows: Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss Losses/(Gains) Reclassified from Accumulated Other Comprehensive Loss into Income Statement(a) 2024 2023 2024 2023 Foreign exchange contracts $ (101) $ 93 $ (6) $ 61 Cross-currency contracts 46 (34) 48 (31) Commodity contracts 57 149 123 125 Total $ 2 $ 208 $ 165 $ 155 (a) Foreign exchange derivative losses/(gains) are included in net revenue and cost of sales. Cross-currency interest rate swap derivative losses/(gains) are included in selling, general and administrative expenses. Commodity derivative losses/(gains) are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. See Note 11 for further information. Losses/(gains) on our net investment hedges are categorized as follows: Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss Losses/(Gains) Recognized in Income Statement(a) 2024 2023 2024 2023 Non-derivative debt instruments $ (133) $ 122 $ — $ — Cross-currency contracts 3 — (5) — Total $ (130) $ 122 $ (5) $ — (a) Amount excluded from the assessment of effectiveness recognized in earnings associated with cross-currency interest rate swaps. 105 Based on current market conditions, we expect to reclassify net gains of $45 million related to our cash flow hedges from accumulated other comprehensive loss within common shareholders’ equity into net income during the next 12 months. Losses/(gains) recognized in the income statement related to our non-designated hedges are categorized as follows: 2024 2023 Cost of sales Selling, general and administrative expenses Total Cost of sales Selling, general and administrative expenses Total Foreign exchange contracts $ 1 $ 2 $ 3 $ (1) $ 41 $ 40 Commodity contracts 2 8 10 39 33 72 Total $ 3 $ 10 $ 13 $ 38 $ 74 $ 112 Note 10 — Net Income Attributable to PepsiCo per Common Share The computations of basic and diluted net income attributable to PepsiCo per common share are as follows: 2024 2023 2022 Income Shares(a) Income Shares(a) Income Shares(a) Basic net income attributable to PepsiCo per common share $ 6.97 $ 6.59 $ 6.45 Net income available for PepsiCo common shareholders $ 9,578 1,373 $ 9,074 1,376 $ 8,910 1,380 Dilutive securities: Stock options, RSUs, PSUs and other (b) — 5 — 7 — 7 Diluted $ 9,578 1,378 $ 9,074 1,383 $ 8,910 1,387 Diluted net income attributable to PepsiCo per common share $ 6.95 $ 6.56 $ 6.42 (a) Weighted-average common shares outstanding (in millions). (b) The dilutive effect of these securities is calculated using the treasury stock method. The weighted-average amount of antidilutive securities excluded from the calculation of diluted earnings per common share was 4 million, 3 million and immaterial for the years ended December 28, 2024, December 30, 2023 and December 31, 2022, respectively. 106 Note 11 — Accumulated Other Comprehensive Loss Attributable to PepsiCo The changes in the balances of each component of accumulated other comprehensive loss attributable to PepsiCo are as follows: Currency Translation Adjustment Cash Flow Hedges Pension and Retiree Medical Available-for- Sale Debt Securities and Other(a) Accumulated Other Comprehensive Loss Attributable to PepsiCo Balance as of December 25, 2021 (b) $ (12,309) $ 159 $ (2,750) $ 2 $ (14,898) Other comprehensive (loss)/income before reclassifications (c) (603) (78) 48 8 (625) Amounts reclassified from accumulated other comprehensive loss — (129) 440 — 311 Net other comprehensive (loss)/income (603) (207) 488 8 (314) Tax amounts (36) 49 (99) (4) (90) Balance as of December 31, 2022 (b) (12,948) 1 (2,361) 6 (15,302) Other comprehensive (loss)/income before reclassifications (d) (442) (188) (493) 608 (515) Amounts reclassified from accumulated other comprehensive loss 108 146 37 — 291 Net other comprehensive (loss)/income (334) (42) (456) 608 (224) Tax amounts 27 10 98 (143) (8) Balance as of December 30, 2023 (b) (13,255) (31) (2,719) 471 (15,534) Other comprehensive loss before reclassifications (e) (1,965) (6) (280) (306) (2,557) Amounts reclassified from accumulated other comprehensive loss — 158 285 — 443 Net other comprehensive (loss)/income (1,965) 152 5 (306) (2,114) Tax amounts 3 (39) — 72 36 Balance as of December 28, 2024 (b) $ (15,217) $ 82 $ (2,714) $ 237 $ (17,612) (a) The movements primarily represent fair value changes in available-for-sale debt securities, including our investment in Celsius convertible preferred stock. See Note 9 for further information. (b) Pension and retiree medical amounts are net of taxes of $1,283 million as of December 25, 2021, $1,184 million as of December 31, 2022 and $1,282 million as of both December 30, 2023 and December 28, 2024. (c) Currency translation adjustment primarily reflects depreciation of the Egyptian pound and British pound sterling. (d) Currency translation adjustment primarily reflects depreciation of the Russian ruble and South African rand, partially offset by appreciation of the Mexican peso. (e) Currency translation adjustment primarily reflects depreciation of the Mexican peso and Russian ruble. 107 The following table summarizes the reclassifications from accumulated other comprehensive loss to the income statement: Amount Reclassified from Accumulated Other Comprehensive Loss Affected Line Item in the Income Statement 2024 2023 2022 Currency translation: Divestitures $ — $ 108 $ — Selling, general and administrative expenses Cash flow hedges: Foreign exchange contracts $ (1) $ (3) $ (11) Net revenue Foreign exchange contracts (5) 64 (10) Cost of sales Cross-currency contracts 48 (31) 159 Selling, general and administrative expenses Interest rate swap contracts (7) (9) — Selling, general and administrative expenses Commodity contracts 122 126 (252) Cost of sales Commodity contracts 1 (1) (15) Selling, general and administrative expenses Net losses/(gains) before tax 158 146 (129) Tax amounts (37) (39) 23 Net losses/(gains) after tax $ 121 $ 107 $ (106) Pension and retiree medical items: Amortization of net prior service credit $ (31) $ (33) $ (37) Other pension and retiree medical benefits (expense)/income Amortization of net losses 73 56 164 Other pension and retiree medical benefits (expense)/income Settlement/curtailment losses 243 14 313 Other pension and retiree medical benefits (expense)/income Net losses before tax 285 37 440 Tax amounts (62) (7) (80) Net losses after tax $ 223 $ 30 $ 360 Total net losses reclassified for the year, net of tax $ 344 $ 245 $ 254 Note 12 — Leases Lessee We determine whether an arrangement is a lease at inception. We have operating leases for plants, warehouses, distribution centers, storage facilities, offices and other facilities, as well as machinery and equipment, including fleet. Our leases generally have remaining lease terms of up to 20 years, some of which include options to extend the lease term for up to five years and some of which include options to terminate the lease within one year. We consider these options in determining the lease term used to establish our right-of-use assets and lease liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We have lease agreements that contain both lease and non-lease components. For real estate leases, we account for lease components together with non-lease components (e.g., common-area maintenance). 108 Components of lease cost are as follows: 2024 2023 2022 Operating lease cost (a) $ 788 $ 666 $ 585 Variable lease cost (b) $ 165 $ 146 $ 115 Short-term lease cost (c) $ 566 $ 582 $ 510 (a) Includes right-of-use asset amortization of $655 million, $570 million, and $517 million in 2024, 2023, and 2022, respectively. (b) Primarily related to adjustments for inflation, common-area maintenance and property tax. (c) Not recorded on our balance sheet. In 2024, 2023 and 2022, we recognized gains of $118 million, $52 million and $175 million, respectively, on sale-leaseback transactions with terms generally under five years. Supplemental cash flow information and non-cash activity related to our operating leases are as follows: 2024 2023 2022 Operating cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ 775 $ 655 $ 573 Non-cash activity: Right-of-use assets obtained in exchange for lease obligations $ 1,218 $ 1,088 $ 871 Supplemental balance sheet information related to our operating leases is as follows: Balance Sheet Classification 2024 2023 Right-of-use assets Other assets $ 3,383 $ 2,905 Current lease liabilities Accounts payable and other current liabilities $ 642 $ 556 Non-current lease liabilities Other liabilities $ 2,803 $ 2,400 Weighted-average remaining lease term and discount rate for our operating leases are as follows: 2024 2023 2022 Weighted-average remaining lease term 7 years 7 years 7 years Weighted-average discount rate 4 % 4 % 3 % Maturities of lease liabilities by year for our operating leases are as follows: 2025 $ 770 2026 680 2027 579 2028 478 2029 377 2030 and beyond 1,129 Total lease payments 4,013 Less: Imputed interest 568 Present value of lease liabilities $ 3,445 Finance leases were not material as of December 28, 2024, December 30, 2023 and December 31, 2022. Lessor We have various arrangements for certain foodservice and vending equipment under which we are the lessor. These leases meet the criteria for operating lease classification. Lease income associated with these leases is not material. 109 Note 13 — Acquisitions and Divestitures Acquisition of remaining ownership in Sabra On December 3, 2024, we acquired the Strauss Group’s 50% ownership in Sabra for total consideration of $241 million in cash, resulting in Sabra becoming a wholly-owned subsidiary. 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. We accounted for the acquisition as a business combination in the fourth quarter of 2024. We recognized and measured the identifiable assets acquired and liabilities assumed at their estimated fair values on the date of acquisition, in our FLNA division. The preliminary estimates of the fair value of the identifiable assets acquired and liabilities assumed in this transaction as of the acquisition date primarily include goodwill and other intangible assets of $0.3 billion and property, plant and equipment of $0.1 billion. The preliminary estimates of the fair value of identifiable assets acquired and liabilities assumed are subject to revision, which may result in adjustments to the preliminary values discussed above as valuations are finalized. We expect to finalize these amounts as soon as possible, but no later than the fourth quarter of 2025. Acquisition of Siete On January 17, 2025, we acquired all of the outstanding equity interest in Siete, a Mexican-American foods business, in a transaction valued at approximately $1.2 billion. The total consideration transferred was approximately $1.2 billion in cash. The purchase price will be adjusted for net working capital and net debt amounts as of the acquisition date. We will account for the transaction as a business combination in the first quarter of 2025. We will recognize and measure the identifiable assets acquired and liabilities assumed at their estimated fair values on the date of acquisition. The identifiable assets acquired and liabilities assumed in Siete as of the acquisition date, which primarily include goodwill and other intangible assets, will be based on preliminary estimates that are subject to revisions and may result in adjustments to the preliminary values as valuations are finalized. We expect to finalize these amounts as soon as possible, but no later than the first quarter of 2026. Juice Transaction In the first quarter of 2022, we sold our Tropicana, Naked and other select juice brands to PAI Partners for approximately $3.5 billion in cash, subject to purchase price adjustments, and a 39% noncontrolling interest in TBG, operating across North America and Europe. The North America portion of the transaction was completed on January 24, 2022 and the Europe portion of the transaction was completed on February 1, 2022. 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. We have significant influence over our investment in TBG and account for our investment under the equity method, recognizing our proportionate share of TBG’s earnings on our income statement (recorded in selling, general and administrative expenses). As a result of this transaction, in the year ended December 31, 2022, we recorded a gain in our PBNA and Europe divisions (see detailed income statement activity below), including $520 million related to the remeasurement of our 39% ownership in TBG at fair value using a combination of the transaction price, discounted cash flows and an option pricing model related to our liquidation preference in TBG. In the fourth quarter of 2022, we reached an agreement on final purchase price adjustments for net working 110 capital and net debt amounts as of the transaction close date compared to targeted amounts set forth in the purchase agreement. A summary of income statement activity related to the Juice Transaction for the year ended December 31, 2022 is as follows: PBNA Europe Corporate Total PepsiCo Provision for income taxes(a) Net income attributable to PepsiCo Impact on net income attributable to PepsiCo per common share Gain associated with the Juice Transaction $ (3,029) $ (292) $ — $ (3,321) $ 433 $ (2,888) $ 2.08 Acquisition and divestiture- related charges 51 14 6 71 (13) 58 (0.04) Operating profit $ (2,978) $ (278) $ 6 (3,250) 420 (2,830) 2.04 Other pension and retiree medical benefits income (b) (10) 3 (7) 0.01 Total Juice Transaction $ (3,260) $ 423 $ (2,837) $ 2.04 (c) (a) Includes $186 million of deferred tax expense related to the recognition of our investment in TBG. (b) Includes $16 million curtailment gain, partially offset by $6 million special termination benefits. (c) Does not sum due to rounding. In connection with the sale, we entered into a transition services agreement with PAI Partners, under which we provide certain services to TBG to help facilitate an orderly transition of the business following the sale. In return for these services, TBG is required to pay certain agreed upon fees to reimburse us for our costs without markup. The Juice Transaction did not meet the criteria to be classified as discontinued operations. In the years ended December 28, 2024 and December 30, 2023, we recognized impairment and other charges related to our TBG investment. See Notes 1 and 9 for further information. Acquisition and Divestiture-Related Charges Acquisition and divestiture-related charges primarily include transaction expenses, such as consulting, advisory and other professional fees, and merger and integration charges. Merger and integration charges include employee-related costs, contract termination costs, closing costs and other integration costs. A summary of our acquisition and divestiture-related charges is as follows: 2024 2023 2022 FLNA $ 9 $ — $ — PBNA 8 16 51 Europe (a) — (2) 14 AMESA 5 2 3 APAC — — — Corporate — 25 6 Total (b) 22 41 74 Other pension and retiree medical benefits expense — — 6 Total acquisition and divestiture-related charges $ 22 $ 41 $ 80 After-tax amount $ 18 $ 23 $ 66 Impact on net income attributable to PepsiCo per common share $ (0.01) $ (0.02) $ (0.05) (a) Income amount represents adjustments for changes in estimates of previously recorded amounts. (b) Recorded in selling, general and administrative expenses. 111 Note 14 — Supply Chain Financing Arrangements As part of our evolving market practices, we work with our suppliers to optimize our terms and conditions, which include the extension of payment terms. Our current payment terms with a majority of our suppliers generally range from 60 to 90 days, which we deem to be commercially reasonable. We will continue to monitor economic conditions and market practice working with our suppliers to adjust as necessary. We also maintain voluntary supply chain finance agreements with several participating global financial institutions. Under these agreements, our suppliers, at their sole discretion, may elect to sell their accounts receivable with PepsiCo to these participating global financial institutions. Supplier participation in these financing arrangements is voluntary. Our suppliers negotiate their financing agreements directly with the respective global financial institutions and we are not a party to these agreements. These financing arrangements allow participating suppliers to leverage PepsiCo’s creditworthiness in establishing credit spreads and associated costs, which generally provides our suppliers with more favorable terms than they would be able to secure on their own. Neither PepsiCo nor any of its subsidiaries provide any guarantees to any third party in connection with these financing arrangements. We have no economic interest in our suppliers’ decision to participate in these agreements. Our obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted. All outstanding amounts related to suppliers participating in such financing arrangements are recorded within accounts payable and other current liabilities in our consolidated balance sheet. A summary of our outstanding obligations confirmed as valid under the supplier finance program for the year ended December 28, 2024 is as follows: 2024 Confirmed obligations outstanding at beginning of year $ 1,655 Invoices confirmed 6,552 Confirmed invoices paid (6,636) Translation and other (93) Confirmed obligations outstanding at end of year $ 1,478 112 Note 15 — Supplemental Financial Information Balance Sheet 2024 2023 2022 Accounts and notes receivable Trade receivables $ 8,487 $ 8,675 Other receivables 2,202 2,315 Total 10,689 10,990 Allowance, beginning of year 175 150 $ 147 Net amounts charged to expense (a) 228 55 21 Deductions (36) (26) (12) Translation and other (11) (4) (6) Allowance, end of year 356 175 $ 150 Accounts and notes receivable, net $ 10,333 $ 10,815 Property, plant and equipment, net Average Useful Life (Years) Land $ 1,136 $ 1,159 Buildings and improvements 15 - 44 11,938 11,579 Machinery and equipment, including fleet and software 5 - 15 36,990 36,006 Construction in progress 5,941 5,695 56,005 54,439 Accumulated depreciation (27,997) (27,400) Property, plant and equipment, net $ 28,008 $ 27,039 Depreciation expense $ 2,945 $ 2,714 $ 2,523 Other assets Noncurrent notes and accounts receivable $ 111 $ 200 Deferred marketplace spending 100 103 Pension plans (b) 1,190 1,057 Right-of-use assets (c) 3,383 2,905 Other investments (d) 1,346 1,616 Other 821 780 Total $ 6,951 $ 6,661 Accounts payable and other current liabilities Accounts payable (e) $ 10,997 $ 11,635 Accrued marketplace spending 3,458 3,523 Accrued compensation and benefits 2,256 2,687 Dividends payable 1,885 1,767 Current lease liabilities 642 556 Other current liabilities 5,216 4,969 Total $ 24,454 $ 25,137 (a) Increase primarily reflects an allowance for expected credit losses related to outstanding receivables from TBG associated with the Juice Transaction; see Note 1 for further information. (b) See Note 7 for further information. (c) See Note 12 for further information. (d) Includes our investment in Celsius convertible preferred stock. See Note 9 for further information. (e) Primarily reflects a decrease in capital expenditure payables, currency translation adjustments, as well as timing of payments. 113 Statement of Cash Flows 2024 2023 2022 Interest paid (a) $ 1,585 $ 1,401 $ 1,043 Income taxes paid, net of refunds (b) $ 3,064 $ 2,532 $ 2,766 (a) 2022 excludes the premiums paid in accordance with certain debt transactions. See Note 8 for further information. (b) Includes tax payments of $579 million in 2024, and $309 million in each of 2023 and 2022, related to the TCJ Act. Supplemental Non-Cash Activity 2024 2023 2022 Debt discharged via legal defeasance $ — $ 94 $ — The following table provides a reconciliation of cash and cash equivalents and restricted cash as reported within the balance sheet to the same items as reported in the cash flow statement: 2024 2023 Cash and cash equivalents $ 8,505 $ 9,711 Restricted cash included in other assets (a) 48 50 Total cash and cash equivalents and restricted cash $ 8,553 $ 9,761 (a) Primarily relates to collateral posted against certain of our derivative positions. Note 16 — Legal Contingencies The Company is party to a variety of litigation, claims, legal or regulatory proceedings, inquiries and investigations. 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 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). We also have audited the Company’s 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. 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. 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. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. 115 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Unrecognized tax benefits As discussed in Note 5 to the consolidated financial statements, the Company’s global operating model gives rise to income tax obligations in the United States and in certain foreign jurisdictions in which it operates. As of December 28, 2024, the Company recorded reserves for unrecognized tax benefits of $2.3 billion. The Company establishes reserves if it believes that certain positions taken in its tax returns are subject to challenge and the Company likely will not succeed, even though the Company believes the tax return position is supportable under the tax law. The Company adjusts these reserves, as well as the related interest, in light of new information, such as the progress of a tax examination, new tax law, relevant court rulings or tax authority settlements. We identified the evaluation of certain of the Company’s unrecognized tax benefits as a critical audit matter because the application of tax law and interpretation of a tax authority’s settlement history is complex and involves subjective judgment. Such judgments impact both the timing and amount of the reserves that are recognized, including judgments about re-measuring liabilities for positions taken in prior years’ tax returns in light of new information. The following are the primary procedures we performed to address this critical audit matter. 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 settlements. We involved tax and valuation professionals with specialized skills and knowledge, who assisted in assessing the unrecognized tax benefits by (1) evaluating the Company’s tax structure and transactions, including transfer pricing arrangements, and (2) assessing the Company’s interpretation of existing tax law as well as new and amended tax laws, tax positions taken, associated external counsel opinions, information from tax examinations, relevant court rulings and tax authority settlements. /s/ KPMG LLP We have served as the Company’s auditor since 1990. New York, New York February 3, 2025 117 GLOSSARY Acquisitions and divestitures: 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. Bottler Case Sales (BCS): measure of physical beverage volume shipped to retailers and independent distributors from both PepsiCo and our independent bottlers. Bottler funding: financial incentives we give to our independent bottlers to assist in the distribution and promotion of our beverage products. Chief Operating Decision Maker (CODM): our Chairman and Chief Executive Officer. Concentrate Shipments and Equivalents (CSE): measure of our physical beverage volume shipments to independent bottlers. Constant currency: financial results assuming constant foreign currency exchange rates used for translation based on the rates in effect for the comparable prior-year period. In order to compute our constant currency results, we multiply or divide, as appropriate, our current year U.S. dollar results by the current year average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior year average foreign exchange rates. Consumers: people who eat and drink our products. CSD: carbonated soft drinks. Customers: authorized independent bottlers, distributors and retailers. Direct-Store-Delivery (DSD): delivery system used by us, our independent bottlers and our distributors to deliver beverages and convenient foods directly to retail stores where our products are merchandised. Effective net pricing: reflects the year-over-year impact of discrete pricing actions, sales incentive activities and mix resulting from selling varying products in different package sizes and in different countries. Free cash flow: net cash from operating activities less capital spending, plus sales of property, plant and equipment. Independent bottlers: customers to whom we have granted exclusive contracts to sell and manufacture certain beverage products bearing our trademarks within a specific geographical area. Mark-to-market net impact: change in market value for commodity derivative contracts that we purchase to mitigate the volatility in costs of energy and raw materials that we consume. The market value is determined based on prices on national exchanges and recently reported transactions in the marketplace. NCB: non-carbonated beverage. Organic: a measure that adjusts for the impacts of foreign exchange translation, acquisitions and divestitures, and where applicable, the impact of the 53rd reporting week. In excluding the impact of foreign exchange translation, we assume constant foreign exchange rates used for translation based on the rates in effect for the comparable prior-year period. See the definition of “Constant currency” for further information. 118 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. 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 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks.” Item 8. Financial Statements and Supplementary Data. See “Item 15. Exhibits and Financial Statement Schedules.” Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable. Item 9A. Controls and Procedures. (a) Disclosure Controls and Procedures. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. (b) Management’s Annual Report on Internal Control over Financial Reporting. Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based upon criteria established in Internal Control – Integrated Framework (2013) by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 28, 2024. Attestation Report of the Registered Public Accounting Firm. KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included in this Annual Report on Form 10-K and, as part of their audit, has issued their report, included herein, on the effectiveness of our internal control over financial reporting. (c) Changes in Internal Control over Financial Reporting. During our fourth quarter of 2024, we continued migrating certain of our financial processing systems to an Enterprise Resource Planning (ERP) solution. These systems implementations are part of our ongoing global business transformation initiative, and we plan to continue implementing such systems throughout other parts of our businesses in phases over the next several years. In connection with these ERP implementations, we are updating and will continue to update our internal control over financial reporting, as necessary, to accommodate modifications to our business processes and accounting procedures. During 2024, we continued implementing these systems, resulting in changes that materially affected our internal control over financial reporting. These system implementations did not have an adverse effect, nor do we expect will have an adverse effect, on our internal control over financial reporting. In addition, in connection with our 2019 multi-year productivity plan, we continue to migrate to shared business models across our operations to further simplify, harmonize and automate processes. In connection with our 2019 multi-year 120 productivity plan and resulting organization and business process changes, we continue to enhance the design and documentation of our internal control over financial reporting processes, to maintain effective controls over our financial reporting. These changes have not materially affected, and we do not expect them to materially affect, our internal control over financial reporting. Except with respect to the continued implementation of ERP systems, there have been no changes in our internal control over financial reporting during our fourth quarter of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We will continue to assess the impact on our internal control over financial reporting as we continue to implement our ERP solution and our 2019 multi-year productivity plan. Item 9B. Other Information. During the 16 weeks ended December 28, 2024, none of our directors or executive officers adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement” as such terms are defined under Item 408 of Regulation S-K. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. PART III Item 10. Directors, Executive Officers and Corporate Governance. Information about our directors and persons nominated to become directors is contained under the caption “Election of Directors” in our Proxy Statement for our 2025 Annual Meeting of Shareholders to be filed with the SEC within 120 days of the year ended December 28, 2024 (the 2025 Proxy Statement) and is incorporated herein by reference. Information about our executive officers is reported under the caption “Information About Our Executive Officers” in Part I of this report. Information on beneficial ownership reporting compliance will be contained under the caption “Ownership of PepsiCo Common Stock - Delinquent Section 16(a) Reports,” if applicable, in our 2025 Proxy Statement and is incorporated herein by reference. We have a written code of conduct that applies to all of our employees, including our Chairman of the Board of Directors and Chief Executive Officer, Chief Financial Officer and Controller, and to our Board of Directors. Our Global Code of Conduct is distributed to all employees and is available on our website at http://www.pepsico.com. A copy of our Global Code of Conduct may be obtained free of charge by writing to Investor Relations, PepsiCo, Inc., 700 Anderson Hill Road, Purchase, New York 10577. Any amendment to our Global Code of Conduct and any waiver applicable to our executive officers or senior financial officers will be posted on our website within the time period required by the SEC and applicable rules of The Nasdaq Stock Market LLC. Information about the procedures by which security holders may recommend nominees to our Board of Directors can be found in our 2025 Proxy Statement under the caption “Board Composition and Refreshment – Shareholder Recommendations and Nominations of Director Candidates” and is incorporated herein by reference. Information concerning the composition of the Audit Committee and our Audit Committee financial experts is contained in our 2025 Proxy Statement under the caption “Corporate Governance at PepsiCo – Committees of the Board of Directors – Audit Committee” and is incorporated herein by reference. 121 Information about the Company’s insider trading policy is contained in our 2025 Proxy Statement under the caption “Corporate Governance at PepsiCo - Our Standards of Conduct - Insider Trading Policy” and is incorporated herein by reference. Item 11. Executive Compensation. Information about director and executive officer compensation, Compensation Committee interlocks and the Compensation Committee Report is contained in our 2025 Proxy Statement under the captions “2024 Director Compensation,” “Executive Compensation,” “Corporate Governance at PepsiCo – Committees of the Board of Directors – Compensation Committee – Compensation Committee Interlocks and Insider Participation” and “Executive Compensation – Compensation Committee Report” and is incorporated herein by reference. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. Information with respect to securities authorized for issuance under equity compensation plans can be found under the caption “Executive Compensation – Securities Authorized for Issuance Under Equity Compensation Plans” in our 2025 Proxy Statement and is incorporated herein by reference. Information on the number of shares of PepsiCo Common Stock beneficially owned by each director and named executive officer, by all directors and executive officers as a group and on each beneficial owner of more than 5% of PepsiCo Common Stock is contained under the caption “Ownership of PepsiCo Common Stock” in our 2025 Proxy Statement and is incorporated herein by reference. Item 13. Certain Relationships and Related Transactions, and Director Independence. Information with respect to certain relationships and related transactions and director independence is contained under the captions “Corporate Governance at PepsiCo – Related Person Transactions” and “Corporate Governance at PepsiCo – Director Independence” in our 2025 Proxy Statement and is incorporated herein by reference. Item 14. Principal Accounting Fees and Services. Information on our Audit Committee’s pre-approval policy and procedures for audit and other services and information on our principal accountant fees and services is contained in our 2025 Proxy Statement under the caption “Ratification of Appointment of Independent Registered Public Accounting Firm – Audit and Other Fees” and is incorporated herein by reference. 122 PART IV Item 15. Exhibits and Financial Statement Schedules. (a)1. Financial Statements The following consolidated financial statements of PepsiCo, Inc. and its affiliates are included herein by reference to the pages indicated on the index appearing in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations”: Consolidated Statement of Income – Fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022 Consolidated Statement of Comprehensive Income – Fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022 Consolidated Statement of Cash Flows – Fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022 Consolidated Balance Sheet – December 28, 2024 and December 30, 2023 Consolidated Statement of Equity – Fiscal years ended December 28, 2024, December 30, 2023 and December 31, 2022 Notes to the Consolidated Financial Statements, and Report of Independent Registered Public Accounting Firm (PCAOB ID: 185). (a)2. Financial Statement Schedules These schedules are omitted because they are not required or because the information is set forth in the financial statements or the notes thereto. (a)3. Exhibits See Index to Exhibits. Item 16. Form 10-K Summary. None. 123 INDEX TO EXHIBITS ITEM 15(a)(3) The following is a list of the exhibits filed as part of this Form 10-K. The documents incorporated by reference can be viewed on the SEC’s website at http://www.sec.gov. EXHIBIT 3.1 Amended and Restated Articles of Incorporation of PepsiCo, Inc., effective as of May 1, 2019, which are incorporated herein by reference to Exhibit 3.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 3, 2019. 3.2 By-laws of PepsiCo, Inc., as amended and restated, effective as of September 20, 2024, which are incorporated herein by reference to Exhibit 3.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 20, 2024. 4.1 PepsiCo, Inc. agrees to furnish to the Securities and Exchange Commission, upon request, a copy of any instrument, not otherwise filed herewith, defining the rights of holders of long- term debt of PepsiCo, Inc. and its consolidated subsidiaries and for any of its unconsolidated subsidiaries for which financial statements are required to be filed with the Securities and Exchange Commission. 4.2 Indenture dated May 21, 2007 between PepsiCo, Inc. and The Bank of New York Mellon (formerly known as The Bank of New York), as trustee, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Registration Statement on Form S-3ASR (Registration No. 333-154314) filed with the Securities and Exchange Commission on October 15, 2008. 4.3 Form of 5.50% Senior Note due 2040, which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2010. 4.4 Form of 4.875% Senior Note due 2040, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 25, 2010. 4.5 Form of 2.625% Senior Note due 2026, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 28, 2014. 4.6 Form of 4.250% Senior Note due 2044, which is incorporated herein by reference to Exhibit 4.1 of PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 22, 2014. 4.7 Form of 2.750% Senior Note due 2025, which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 30, 2015. 4.8 Form of 3.500% Senior Note due 2025, which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 17, 2015. 4.9 Form of 4.600% Senior Note due 2045, which is incorporated herein by reference to Exhibit 4.5 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 17, 2015. 4.10 Form of 4.450% Senior Note due 2046, which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 14, 2015. 4.11 Form of 2.850% Senior Note due 2026, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 24, 2016. 4.12 Form of 4.450% Senior Note due 2046, which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 24, 2016. 124 4.13 Form of 0.875% Senior Note due 2028, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 18, 2016. 4.14 Form of 2.375% Senior Note due 2026, which is incorporated herein by reference to Exhibit 4.5 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 6, 2016. 4.15 Form of 3.450% Senior Note due 2046, which is incorporated herein by reference to Exhibit 4.6 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 6, 2016. 4.16 Form of 4.000% Senior Note due 2047, which is incorporated herein by reference to Exhibit 4.5 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 2, 2017. 4.17 Form of 3.000% Senior Note due 2027, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 10, 2017. 4.18 Board of Directors Resolutions Authorizing PepsiCo, Inc.’s Officers to Establish the Terms of the 5.50% Senior Notes due 2040 and 4.875% Senior Notes due 2040, which are incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the 24 weeks ended June 12, 2010. 4.19 Board of Directors Resolutions Authorizing PepsiCo, Inc.’s Officers to Establish the Terms of the 4.000% Senior Notes due 2042 and the 3.600% Senior Notes due 2042, which are incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 6, 2011. 4.20 Form of 4.000% Senior Note due 2042, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 2, 2012. 4.21 Form of 3.600% Senior Note due 2042, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 13, 2012. 4.22 Form of 7.00% Senior Note due 2029, Series A, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 8, 2018. 4.23 Form of 5.50% Senior Note due 2035, Series A, which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 8, 2018. 4.24 Form of 7.29% Senior Note due 2026, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Registration Statement on Form S-4 (Registration No. 333-228466) filed with the Securities and Exchange Commission on November 19, 2018. 4.25 Form of 7.44% Senior Note due 2026, which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Registration Statement on Form S-4 (Registration No. 333-228466) filed with the Securities and Exchange Commission on November 19, 2018. 4.26 Form of 7.00% Senior Note due 2029, which is incorporated herein by reference to Exhibit 4.5 to PepsiCo, Inc.’s Registration Statement on Form S-4 (Registration No. 333-228466) filed with the Securities and Exchange Commission on November 19, 2018. 4.27 Form of 5.50% Senior Note due 2035, which is incorporated herein by reference to Exhibit 4.6 to PepsiCo, Inc.’s Registration Statement on Form S-4 (Registration No. 333-228466) filed with the Securities and Exchange Commission on November 19, 2018. 4.28 Form of 0.750% Senior Note due 2027, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 18, 2019. 4.29 Form of 1.125% Senior Note due 2031, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 18, 2019. 125 4.30 Form of 2.625% Senior Note due 2029, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 29, 2019. 4.31 Form of 3.375% Senior Note due 2049, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 29, 2019. 4.32 Form of 2.875% Senior Note due 2049, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 9, 2019. 4.33 Form of 0.875% Senior Note due 2039, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 16, 2019. 4.34 Form of 2.250% Senior Note due 2025, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 19, 2020. 4.35 Form of 2.625% Senior Note due 2027, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 19, 2020. 4.36 Form of 2.750% Senior Note due 2030, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 19, 2020. 4.37 Form of 3.500% Senior Note due 2040, which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 19, 2020. 4.38 Form of 3.625% Senior Note due 2050, which is incorporated herein by reference to Exhibit 4.5 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 19, 2020. 4.39 Form of 3.875% Senior Note due 2060, which is incorporated herein by reference to Exhibit 4.6 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 19, 2020. 4.40 Form of 1.625% Senior Note due 2030, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 1, 2020. 4.41 Form of 0.500% Senior Note due 2028, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 6, 2020. 4.42 Form of 1.400% Senior Note due 2031, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 7, 2020. 4.43 Form of 0.400% Senior Note due 2032, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 9, 2020. 4.44 Form of 1.050% Senior Note due 2050, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 9, 2020. 4.45 Form of 0.750% Senior Note due 2033, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 14, 2021. 4.46 Form of 1.950% Senior Note due 2031, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 21, 2021. 126 4.47 Form of 2.625% Senior Note due 2041, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 21, 2021. 4.48 Form of 2.750% Senior Note due 2051, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 21, 2021. 4.49 Form of 3.600% Senior Note due 2028, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 18, 2022. 4.50 Form of 4.200% Senior Note due 2052, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 18, 2022. 4.51 Form of 3.900% Senior Note due 2032, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 18, 2022. 4.52 Form of 3.200% Senior Note due 2029, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 22, 2022. 4.53 Form of 3.550% Senior Note due 2034, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 22, 2022. 4.54 Form of Floating Rate Note due 2026, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 15, 2023. 4.55 Form of 4.550% Senior Note due 2026, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 15, 2023. 4.56 Form of 4.450% Senior Note due 2028, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 15, 2023. 4.57 Form of 4.450% Senior Note due 2033, which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 15, 2023. 4.58 Form of 4.650% Senior Note due 2053, which is incorporated herein by reference to Exhibit 4.5 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 15, 2023. 4.59 Form of 5.250% Senior Note due 2025, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 13, 2023. 4.60 Form of 5.125% Senior Note due 2026, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 13, 2023. 4.61 Form of 4.500% Senior Note due 2029, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 17, 2024. 4.62 Form of 4.800% Senior Note due 2034, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 17, 2024. 4.63 Form of 5.250% Senior Note due 2054, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 17, 2024. 127 4.64 Board of Directors Resolutions Authorizing PepsiCo, Inc.’s Officers to Establish the Terms of the 2.625% Senior Notes due 2026, the 4.250% Senior Notes due 2044, the 2.750% Senior Notes due 2025, the 3.500% Senior Notes due 2025, the 4.600% Senior Notes due 2045, the 4.450% Senior Notes due 2046, the 2.850% Senior Notes due 2026, the 0.875% Senior Notes due 2028, the 2.375% Senior Notes due 2026, the 3.450% Senior Notes due 2046, the 4.000% Senior Notes due 2047, the 3.000% Senior Notes due 2027, the 7.00% Senior Notes due 2029, Series A, the 5.50% Senior Notes due 2035, Series A, the 7.29% Senior Notes due 2026, the 7.44% Senior Notes due 2026, the 7.00% Senior Notes due 2029, the 5.50% Senior Notes due 2035, the 0.750% Senior Notes due 2027, the 1.125% Senior Notes due 2031, the 2.625% Senior Notes due 2029, the 3.375% Senior Notes due 2049, the 2.875% Senior Notes due 2049, the 0.875% Senior Notes due 2039, the 2.250% Senior Notes due 2025, the 2.625% Senior Notes due 2027, the 2.750% Senior Notes due 2030, the 3.500% Senior Notes due 2040, the 3.625% Senior Notes due 2050, the 3.875% Senior Notes due 2060, the 1.625% Senior Notes due 2030, the 0.500% Senior Notes due 2028, the 1.400% Senior Notes due 2031, the 0.400% Senior Notes due 2032, the 1.050% Senior Notes due 2050, the 0.750% Senior Notes due 2033, the 1.950% Senior Notes due 2031, the 2.625% Senior Notes due 2041, the 2.750% Senior Notes due 2051, the 3.600% Senior Notes due 2028, the 4.200% Senior Notes due 2052, the 3.900% Senior Notes due 2032, the 3.200% Senior Notes due 2029, the 3.550% Senior Notes due 2034, the Floating Rate Notes due 2026, the 4.550% Senior Notes due 2026, the 4.450% Senior Notes due 2028, the 4.450% Senior Notes due 2033, the 4.650% Senior Notes due 2053, the 5.250% Senior Notes due 2025, the 5.125% Senior Notes due 2026, the 4.500% Senior Notes due 2029, the 4.800% Senior Notes due 2034 and the 5.250% Senior Notes due 2054, which are incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2013. 4.65 Third Supplemental Indenture, dated as of October 24, 2018, between Pepsi-Cola Metropolitan Bottling Company, Inc. and The Bank New York Mellon Trust Company, N.A., as trustee, to the Indenture dated as of January 15, 1993 between Whitman Corporation and The First National Bank of Chicago, as trustee, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 25, 2018. 4.66 Second Supplemental Indenture, dated as of February 26, 2010, among Pepsi-Cola Metropolitan Bottling Company, Inc., PepsiAmericas, Inc. and The Bank New York Mellon Trust Company, N.A., as trustee, to the Indenture dated as of January 15, 1993 between Whitman Corporation and The First National Bank of Chicago, as trustee, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 1, 2010. 4.67 First Supplemental Indenture, dated as of May 20, 1999, between Whitman Corporation and The First National Bank of Chicago, as trustee, to the Indenture dated as of January 15, 1993, between Whitman Corporation and The First National Bank of Chicago, as trustee, each of which is incorporated herein by reference to Exhibit 4.3 to Post-Effective Amendment No. 1 to PepsiAmericas, Inc.’s Registration Statement on Form S-8 (Registration No. 333-64292) filed with the Securities and Exchange Commission on December 29, 2005. 4.68 Form of PepsiAmericas, Inc. 7.29% Note due 2026, which is incorporated herein by reference to Exhibit 4.7 to PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 20, 2010. 4.69 Indenture dated as of February 12, 2024, between PepsiCo, Inc. and U.S. Bank Trust Company, National Association, as trustee, which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s and PepsiCo Singapore Financing I Pte. Ltd.’s Registration Statement on Form S-3ASR filed with the Securities and Exchange Commission on February 12, 2024 (File No. 333-277003). 128 4.70 Indenture dated as of February 12, 2024, among PepsiCo Singapore Financing I Pte. Ltd., as issuer, PepsiCo, Inc., as guarantor, and U.S. Bank Trust Company, National Association, as trustee, which is incorporated herein by reference to Exhibit 4.5 to PepsiCo, Inc.’s and PepsiCo Singapore Financing I Pte. Ltd.’s Registration Statement on Form S-3ASR filed with the Securities and Exchange Commission on February 12, 2024 (File No. 333-277003). 4.71 PepsiCo Singapore Financing I Pte. Ltd. Board of Directors Resolutions Authorizing Officers of PepsiCo, Inc. and PepsiCo Singapore Financing I Pte. Ltd. to Establish the Terms of the Floating Rate Notes due 2027, the 4.650% Senior Notes due 2027, the 4.550% Senior Notes due 2029 and the 4.700% Senior Notes due 2034, which are incorporated herein by reference to Exhibit 4.10 to PepsiCo, Inc.’s and PepsiCo Singapore Financing I Pte. Ltd.’s Registration Statement on Form S-3ASR filed with the Securities and Exchange Commission on February 12, 2024 (File No. 333-277003). 4.72 Form of Global Note representing PepsiCo Singapore Financing I Pte. Ltd.’s Floating Rate Note due 2027, which is incorporated herein incorporated by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 16, 2024. 4.73 Form of Global Note representing PepsiCo Singapore Financing I Pte. Ltd.’s 4.650% Senior Note due 2027, which is incorporated herein incorporated by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 16, 2024. 4.74 Form of Global Note representing PepsiCo Singapore Financing I Pte. Ltd.’s 4.550% Senior Note due 2029, which is incorporated herein incorporated by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 16, 2024. 4.75 Form of Global Note representing PepsiCo Singapore Financing I Pte. Ltd.’s 4.700% Senior Note due 2034, which is incorporated herein incorporated by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 16, 2024. 4.76 Description of Securities. 10.1 Form of PepsiCo, Inc. Director Indemnification Agreement, which is incorporated herein by reference to Exhibit 10.20 to PepsiCo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 25, 2004.* 10.2 Severance Plan for Executive Employees of PepsiCo, Inc. and Affiliates, which is incorporated herein by reference to Exhibit 10.5 to PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 6, 2008.* 10.3 Form of Aircraft Time Sharing Agreement, which is incorporated herein by reference to Exhibit 10 to PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 21, 2009.* 10.4 Specified Employee Amendments to Arrangements Subject to Section 409A of the Internal Revenue Code, adopted February 18, 2010 and March 29, 2010, which is incorporated herein by reference to Exhibit 10.13 to PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 20, 2010.* 10.5 PepsiCo, Inc. 2007 Long-Term Incentive Plan, as amended and restated March 13, 2014, which is incorporated herein by reference to Exhibit 10.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 14, 2014.* 10.6 The PepsiCo International Retirement Plan Defined Benefit Program, as amended and restated effective as of January 1, 2024.* 10.7 The PepsiCo International Retirement Plan Defined Contribution Program, as amended and restated effective as of January 1, 2024.* 129 10.8 PepsiCo, Inc. Long-Term Incentive Plan (as amended and restated May 4, 2016), which is incorporated herein by reference to Exhibit B to PepsiCo, Inc.’s Proxy Statement for its 2016 Annual Meeting of Shareholders, filed with the Securities and Exchange Commission on March 18, 2016.* 10.9 PepsiCo Pension Equalization Plan (Plan Document for the Pre-409A Program), as amended and restated effective as of January 1, 2022, which is incorporated herein by reference to Exhibit 10.9 to PepsiCo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021.* 10.10 PepsiCo Pension Equalization Plan (Plan Document for the 409A Program), as amended and restated effective as of January 1, 2024.* 10.11 PepsiCo Automatic Retirement Contribution Equalization Plan, as amended and restated effective as of January 1, 2024.* 10.12 PepsiCo Director Deferral Program (Plan Document for the 409A Program), amended and restated effective as of January 1, 2020, which is incorporated by reference to Exhibit 10.25 to PepsiCo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019.* 10.13 PepsiCo Executive Income Deferral Program (Plan Document for the 409A Program), amended and restated effective as of January 1, 2023, which is incorporated herein by reference to Exhibit 10.13 to PepsiCo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023.* 10.14 Amendment to Certain PepsiCo Award Agreements, which is incorporated herein by reference to Exhibit 10.45 to PepsiCo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 30, 2017. * 10.15 PepsiCo, Inc. Long Term Incentive Plan (as amended and restated December 20, 2017), which is incorporated herein by reference to Exhibit 10.47 to PepsiCo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 30, 2017.* 10.16 PepsiCo, Inc. Executive Incentive Compensation Plan (as amended and restated effective February 4, 2021), which is incorporated by reference to Exhibit 10.20 to PepsiCo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 26, 2020.* 10.17 PepsiCo Executive Income Deferral Program (Plan Document for the Pre-409A Program), amended and restated effective as of January 1, 2019, which is incorporated by reference to Exhibit 10.35 to PepsiCo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019.* 10.18 2022 Form of Annual Long-Term Incentive Award Agreement (Performance Stock Units / Long-Term Cash Award), which is incorporated herein by reference to Exhibit 10.1 to PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 19, 2022.* 10.19 2023 Form of Annual Long-Term Incentive Award Agreement (Performance Stock Units / Long-Term Cash Award), which is incorporated herein by reference to Exhibit 10.1 to PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 25, 2023.* 10.20 2020 Form of Annual Long-Term Incentive Award Agreement (Stock Options / Restricted Stock Units / Performance Stock Units), which is incorporated herein by reference to Exhibit 10.22 to PepsiCo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023.* 10.21 2021 Form of Annual Long-Term Incentive Award Agreement (Stock Options / Restricted Stock Units), which is incorporated herein by reference to Exhibit 10.23 to PepsiCo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023.* 10.22 2024 Form of Annual Long-Term Incentive Award Agreement (Performance Stock Units / Long-Term Cash Award), which is incorporated herein by reference to Exhibit 10.1 to PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended March 23, 2024.* 130 19 PepsiCo, Inc. Insider Trading Policy. 21 Subsidiaries of PepsiCo, Inc. 22 Subsidiary Issuer of Guaranteed Securities. 23 Consent of KPMG LLP. 24 Power of Attorney. 31 Certification of our Chief Executive Officer and our Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32 Certification of our Chief Executive Officer and our Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97 PepsiCo, Inc. Compensation Recovery Policy for Covered Executives, which is incorporated herein by reference to Exhibit 97 to PepsiCo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 30, 2023. 99.1 364-Day Credit Agreement, dated as of May 24, 2024, among PepsiCo, as borrower, the lenders named therein, and Citibank, N.A., as administrative agent, which is incorporated by reference to Exhibit 99.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 24, 2024. 99.2 Five-Year Credit Agreement, dated as of May 24, 2024, among PepsiCo, as borrower, the lenders named therein, and Citibank, N.A., as administrative agent, which is incorporated by reference to Exhibit 99.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 24, 2024. 101 The following materials from PepsiCo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Consolidated Statements of Income, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Balance Sheets, (v) the Consolidated Statements of Equity and (vi) Notes to the Consolidated Financial Statements. 104 The cover page from the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2024, formatted in Inline XBRL and contained in Exhibit 101. * Management contracts and compensatory plans or arrangements required to be filed as exhibits pursuant to Item 15(a)(3) of this report. 131 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, PepsiCo has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: February 3, 2025 PepsiCo, Inc. By: /s/ Ramon L. Laguarta Ramon L. Laguarta Chairman of the Board of Directors and Chief Executive Officer 132 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of PepsiCo and in the capacities and on the date indicated. SIGNATURE TITLE DATE /s/ Ramon L. Laguarta Chairman of the Board of Directors February 3, 2025 Ramon L. Laguarta and Chief Executive Officer /s/ James T. Caulfield Executive Vice President February 3, 2025 James T. Caulfield and Chief Financial Officer /s/ Marie T. Gallagher Senior Vice President and Controller February 3, 2025 Marie T. Gallagher (Principal Accounting Officer) /s/ Segun Agbaje Director February 3, 2025 Segun Agbaje /s/ Jennifer Bailey Director February 3, 2025 Jennifer Bailey /s/ Cesar Conde Director February 3, 2025 Cesar Conde /s/ Ian M. Cook Director February 3, 2025 Ian M. Cook /s/ Edith W. Cooper Director February 3, 2025 Edith W. Cooper /s/ Susan M. Diamond Director February 3, 2025 Susan M. Diamond /s/ Dina Dublon Director February 3, 2025 Dina Dublon /s/ Michelle Gass Director February 3, 2025 Michelle Gass /s/ Dave J. Lewis Director February 3, 2025 Dave J. Lewis /s/ David C. Page Director February 3, 2025 David C. Page /s/ Robert C. Pohlad Director February 3, 2025 Robert C. Pohlad /s/ Daniel Vasella Director February 3, 2025 Daniel Vasella /s/ Darren Walker Director February 3, 2025 Darren Walker /s/ Alberto Weisser Director February 3, 2025 Alberto Weisser 133 Page intentionally left blank RECONCILIATION OF GAAP AND NON-GAAP INFORMATION In discussing financial results and guidance, we refer to the following measures which are not in accordance with GAAP: organic revenue, core results, core constant currency results and free cash flow. We use non‑GAAP financial measures internally to make operating and strategic decisions, including the preparation of our annual operating plan, evaluation of our overall business performance and as a factor in determining compensation for certain employees. We believe presenting non-GAAP financial measures provides additional information to facilitate comparison of our historical operating results and trends in our underlying operating results and provides additional transparency on how we evaluate our business. We also believe presenting these measures allows investors to view our performance using the same measures that we use in evaluating our financial and business performance and trends. We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. For further information regarding these non- GAAP financial measures, including further information on the excluded items for the periods presented, see “Non-GAAP Measures,” “Items Affecting Comparability” and “Our Liquidity and Capital Resources” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K. The core non-GAAP financial measures contained in this Annual Report exclude the impact of the following items: Mark-to-market net impact: Mark-to-market net gains and losses on commodity derivatives in corporate unallocated expenses. These gains and losses are subsequently reflected in division results when the divisions recognize the cost of the underlying commodity in operating profit. Restructuring and impairment charges: Expenses related to the multi-year productivity plan publicly announced in 2019, which was expanded and extended through the end of 2030 to take advantage of additional opportunities within the initiatives of the plan. Acquisition and divestiture-related charges: Primarily include transaction expenses, such as consulting, advisory and other professional fees, and merger and integration charges. Merger and integration charges include employee-related costs, contract termination costs, closing costs and other integration costs. Impairment and other charges: Primarily impairment charges taken as a result of our quantitative assessments of certain of our indefinite-lived intangible assets and related to our investment in Tropicana Brands Group (TBG). Also includes allowance for expected credit losses related to outstanding receivables from TBG. Product recall-related impact: Product returns, inventory write-offs and customer and consumer- related costs in our Quaker Foods North America division associated with a voluntary recall of certain bars and cereals. Indirect tax impact: Related to an indirect tax reserve in our Latin America division. Pension and retiree medical-related impact: Includes settlement charges related to lump sum distributions exceeding the total annual service and interest costs, as well as curtailment losses. Net tax related to the TCJ Act: Adjustments to the mandatory transition tax liability under the Tax Cuts and Jobs Act (TCJ Act). Additionally, organic revenue performance is a measure that adjusts for the impacts of foreign exchange translation, acquisitions and divestitures, and every five or six years, the impact of the 53rd reporting week. Adjusting for acquisitions and divestitures reflects 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. 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. PepsiCo Annual Report 2024 | 135 Division operating profit is the aggregation of the operating profit for each of our reportable segments, which excludes the impact of corporate unallocated expenses. Free cash flow is a measure management uses to monitor cash flow performance. We define free cash flow as net cash from operating activities less capital spending, plus sales of property, plant and equipment. Since net capital spending is essential to our product innovation initiatives and maintaining our operational capabilities, we believe that it is a recurring and necessary use of cash. As such, we believe investors should also consider net capital spending when evaluating our cash from operating activities. Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with U.S. GAAP. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non‑GAAP measures presented by other companies. 136 | PepsiCo Annual Report 2024 Division Operating Profit Reconciliation Year Ended December 28, 2024 Impact of Reported, GAAP measure % of Reported division operating profit Mark-to- market net impact Restructuring and impairment charges Acquisition and divestiture- related charges Impairment and other charges Product recall- related impact Indirect tax impact Core, non-GAAP measure % of Core division operating profit Frito-Lay North America $ 6,316 43% $ — $ 150 $ 9 $ — $ — $ — $ 6,475 39% Quaker Foods North America 303 2 — 11 — 9 184 — 507 3 PepsiCo Beverages North America 2,302 15 — 238 8 556 — — 3,104 19 North America divisions $ 8,921 60% $ — $ 399 $ 17 $ 565 $ 184 $ — $ 10,086 61% Latin America $ 2,245 15% $ — $ 51 $ — $ — $ — $ 218 $ 2,514 15% Europe 2,019 14 — 123 — 145 — — 2,287 14 Africa, Middle East and South Asia 798 5 — 14 5 — — — 817 5 Asia Pacific, Australia and New Zealand and China Region 811 6 — 10 — 4 — — 825 5 International divisions $ 5,873 40% $ — $ 198 $ 5 $ 149 $ — $ 218 $ 6,443 39% Division operating profit $ 14,794 $ — $ 597 $ 22 $ 714 $ 184 $ 218 $ 16,529 Corporate unallocated expenses (1,907) (25) 101 — — — — (1,831) Operating profit $ 12,887 $ (25) $ 698 $ 22 $ 714 $ 184 $ 218 $ 14,698 Operating profit for the year ended December 30, 2023 $ 11,986 $ 36 $ 446 $ 41 $ 1,230 $ 136 $ — $ 13,875 2024 operating profit % change 8% 6% International divisions operating profit for the year ended December 28, 2019 $ 3,616 $ — $ 246 $ 53 $ — $ — $ — $ 3,915 International divisions 2020–2024 compound annual growth rate 10% 10% Note — Dollars are presented in millions. PepsiCo Annual Report 2024 | 137 Diluted EPS Reconciliation Year Ended December 28, 2024 December 30, 2023 December 28, 2019 % Change from year ended 2023 to 2024 % Change from year ended 2019 to 2024 Reported diluted EPS, GAAP measure $6.95 $6.56 $5.20 6% 34% Mark-to-market net impact (0.01) 0.02 (0.06) Restructuring and impairment charges 0.41 0.25 0.21 Acquisition and divestiture-related charges 0.01 0.02 0.03 Impairment and other charges 0.38 0.68 — Product recall-related impact 0.10 0.07 — Indirect tax impact 0.16 — — Pension and retiree medical-related impact 0.16 0.01 0.15 Net tax related to the TCJ Act — — (0.01) Core diluted EPS, non-GAAP measure $8.16 $7.62 $5.53 7 % 48% Impact of foreign exchange translation 2 Core constant currency diluted EPS growth, non-GAAP measure 9 % Net Cash Provided by Operating Activities Reconciliation Year Ended December 28, 2024 December 30, 2023 % Change Net cash provided by operating activities, GAAP measure $12,507 $13,442 (7)% Capital spending (5,318) (5,518) Sales of property, plant and equipment 342 198 Free cash flow, non-GAAP measure $ 7,531 $ 8,122 (7)% Net Revenue Performance Reconciliation Year Ended December 28, 2024 Reported % Change, GAAP measure — % Impact of: Foreign exchange translation 1.5 Acquisitions and divestitures — Organic % Change, non-GAAP measure 2 % Note — Dollars are presented in millions, except per share amounts. Certain amounts above may not sum due to rounding. 138 | PepsiCo Annual Report 2024 $0 $50 $100 $150 $250 $200 12/24 12/23 12/22 12/21 12/20 12/19 PepsiCo, Inc. S&P 500 S&P Avg. of Ind. Groups* 2020 2021 2022 2024 2023 $5.3300 $4.5250 $4.2475 $4.0225 $4.9450 Comparison of Cumulative Total Shareholder Return (in U.S. Dollars) The graph below matches PepsiCo, Inc.’s cumulative five-year total shareholder return on common stock with the cumulative total returns of the S&P 500® index, and the S&P® Average of Industry Groups index.* The graph tracks the performance of a $100 investment in our common stock and in each index (with the reinvestment of all dividends) from 12/31/2019 to 12/31/2024. * The S&P Average of Industry Groups is derived by weighting the returns of two applicable S&P Industry Groups (the S&P 500 Soft Drinks & Non-alcoholic Beverages and S&P 500 Packaged Foods and Meats indices) based on PepsiCo’s sales in its beverage and foods businesses. The returns for PepsiCo, the S&P 500 and the S&P Average of Industry Groups are calculated through December 31, 2024. 12/19 12/20 12/21 12/22 12/23 12/24 PepsiCo, Inc. $100 $112 $135 $144 $139 $128 S&P 500® $100 $118 $152 $125 $158 $197 S&P® Average of Industry Groups* $100 $107 $122 $133 $126 $122 The stock price performance included in this graph is not necessarily indicative of future stock price performance. Year-End Market Price of Stock Based on calendar year-end (in U.S. Dollars) Stock Trading Symbol — PEP Stock Exchange Listings The Nasdaq Global Select Market is the principal market for our common stock, which is also listed on the SIX Swiss Exchange. Dividend Policy 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. 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. On February 5, 2025, the Board of Directors of PepsiCo declared a quarterly dividend of $1.355 per share, payable March 31, 2025, to shareholders of record on March 7, 2025. For the remainder of 2025, the record dates for these dividend payments are expected to be June 6, September 5, and December 5, 2025, subject to the approval of the Board of Directors. We have paid consecutive quarterly cash dividends since 1965. Annualized Cash Dividends Declared Per share (in U.S. Dollars) The closing price for a share of PepsiCo common stock on The Nasdaq Global Select Market for the years ended 2020–2024 was the price reported by Bloomberg. Past performance is not necessarily indicative of future stock price performance. COMMON STOCK INFORMATION $200 $175 $150 $125 $100 2020 2021 2022 2023 2024 PepsiCo Annual Report 2024 | 139 Annual Meeting The Annual Meeting of Shareholders will be conducted in a virtual- only format on Wednesday, May 7, 2025, at 9:00 a.m. Eastern Daylight time at www.virtualshareholdermeeting.com/PEP2025. The webcast will open for shareholders at approximately 8:45 a.m. Eastern Daylight time and begin promptly at 9:00 a.m. Eastern Daylight time. Proxies for the meeting will be solicited by an independent proxy solicitor. This Annual Report is not part of the proxy solicitation. Inquiries Regarding Your Stock Holdings Registered Shareholders (shares held by you in your name) should address communications concerning transfers, statements, dividend payments, address changes, lost certificates, and other administrative matters to: Computershare Inc. 150 Royall Street, Suite 101 Canton, MA 02021 Telephone: 800-226-0083 201-680-6578 (outside the U.S.) Email: web.queries@computershare.com Website: www.computershare.com/investor or Shareholder Relations PepsiCo, Inc. 700 Anderson Hill Road Purchase, NY 10577 Email: ir@pepsico.com In all correspondence or telephone inquiries, please mention PepsiCo, the name in which your shares are registered, your holder ID, your address, and your telephone number. Long-Term Incentive Plan Participants Associates who received Long-Term Incentive awards should address all questions regarding their account, including outstanding options or shares received through option exercises or vesting event, to: Morgan Stanley Global Stock Plan Services P.O. Box 182616 Columbus, OH 43218-2616 Telephone: 844-4-PEP-LTI (U.S. and Canada) 614-414-8060 (all other locations) Email: PEP@morganstanley.com Website: atwork.morganstanley.com PepsiCo Savings Plan Participants Associates who are a part of the U.S. Retirement programs should address all questions regarding their account to: Fidelity P.O. Box 770003 Cincinnati, OH 45277-0065 Telephone: 800-632-2014 Overseas: Dial your country’s AT&T Access Number + 800-632-2014 In the U.S., access numbers are available by calling 800-331-1140 Website: www.netbenefits.com/pepsico PepsiCo Stock Purchase Program Participants Associates should address all questions regarding their account to: Fidelity P.O. Box 770001 Cincinnati, OH 45277-0002 Telephone: 800-544-9354 Website: www.netbenefits.com/pepsico Please have a copy of your most recent statement available when calling with inquiries. SHAREHOLDER INFORMATION This Annual Report 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. These risks and uncertainties include, but are not limited to, those described in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Our Business—Our Business Risks” in our Annual Report on Form 10-K included herewith. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise. FORWARD-LOOKING STATEMENTS 140 | PepsiCo Annual Report 2024 Design by Sia/Addison www.addison.com Printing by Sandy Alexander Inc. Corporate Headquarters PepsiCo, Inc. 700 Anderson Hill Road Purchase, NY 10577 Telephone: 914-253-2000 PepsiCo Website www.pepsico.com Direct Stock Purchase Interested investors can make their initial purchase directly through Computershare, transfer agent for PepsiCo and Administrator for the Plan. Please contact our transfer agent for more information. Computershare Inc. 150 Royall Street, Suite 101 Canton, MA 02021 Telephone: 800-226-0083 201-680-6578 (outside the U.S.) Email: web.queries@computershare.com Website: www.computershare.com/investor Other services include dividend reinvestment, direct deposit of dividends, optional cash investments by electronic funds transfer or check drawn on a U.S. bank, sale of shares, online account access, and electronic delivery of shareholder materials. Independent Auditors KPMG LLP 345 Park Avenue New York, NY 10154-0102 Telephone: 212-758-9700 Additional Information PepsiCo’s Annual Report contains many of the valuable trademarks owned and/or used by PepsiCo and its subsidiaries and affiliates in the U.S. and internationally to distinguish products and services of outstanding quality. All other trademarks featured herein are the property of their respective owners. © 2025 PepsiCo, Inc. Environmental Profile This Annual Report was printed with Forest Stewardship Council® (FSC®)(COC)-certified paper, the use of 100% certified renewable wind power resources, and vegetable-based ink. PepsiCo continues to reduce the costs and environmental impact of annual report printing and mailing by utilizing a distribution model that drives increased online readership and fewer printed copies. You can learn more about our environmental efforts at www.pepsico.com. CORPORATE INFORMATION