Item 1. Condensed Consolidated Financial Statements.

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Item 1. Condensed Consolidated Financial Statements.

Condensed Consolidated Statement of Income

PepsiCo, Inc. and Subsidiaries

(in millions except per share amounts, unaudited)


	12 Weeks Ended
		3/23/2024		3/25/2023
Net Revenue		$	18,250	$	17,846
Cost of sales		8,248		7,988
Gross profit		10,002		9,858
Selling, general and administrative expenses		7,285		7,229


Operating Profit		2,717		2,629
Other pension and retiree medical benefits income		58		61
Net interest expense and other		(202)		(200)
Income before income taxes		2,573		2,490
Provision for income taxes		520		546
Net income		2,053		1,944
Less: Net income attributable to noncontrolling interests		11		12
Net Income Attributable to PepsiCo		$	2,042	$	1,932
Net Income Attributable to PepsiCo per Common Share
Basic		$	1.49	$	1.40
Diluted		$	1.48	$	1.40
Weighted-average common shares outstanding
Basic		1,375		1,378
Diluted		1,380		1,384

See accompanying notes to the condensed consolidated financial statements.

Condensed Consolidated Statement of Comprehensive Income

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	12 Weeks Ended
		3/23/2024		3/25/2023
Net income		$	2,053	$	1,944
Other comprehensive income/(loss), net of taxes:
Net currency translation adjustment		(182)		(235)
Net change on cash flow hedges		3		(59)
Net pension and retiree medical adjustments		11		(4)

Net change on available-for-sale debt securities and other		523		(1)
		355		(299)
Comprehensive income		2,408		1,645
Less: Comprehensive income attributable to noncontrolling interests		11		12
Comprehensive Income Attributable to PepsiCo		$	2,397	$	1,633

See accompanying notes to the condensed consolidated financial statements.

Condensed Consolidated Statement of Cash Flows

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	12 Weeks Ended
	3/23/2024		3/25/2023
Operating Activities
Net income	$	2,053	$	1,944
Depreciation and amortization	641		590
Impairment and other charges/(credits)	—		(13)
Product recall-related impact	167		—
Cash payments for product recall-related impact	(108)		—
Operating lease right-of-use asset amortization	127		116
Share-based compensation expense	97		93
Restructuring and impairment charges	96		112
Cash payments for restructuring charges	(60)		(64)


Pension and retiree medical plan expense	31		30
Pension and retiree medical plan contributions	(218)		(175)
Deferred income taxes and other tax charges and credits	116		78


Change in assets and liabilities:
Accounts and notes receivable	(96)		(348)
Inventories	(291)		(542)
Prepaid expenses and other current assets	(342)		(288)
Accounts payable and other current liabilities	(3,408)		(2,259)
Income taxes payable	222		290
Other, net	(68)		44
Net Cash Used for Operating Activities	(1,041)		(392)

Investing Activities
Capital spending	(614)		(581)
Sales of property, plant and equipment	7		19
Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets	(6)		(16)
Other divestitures, sales of investments in noncontrolled affiliates and other assets	53		85
Short-term investments, by original maturity:
More than three months - purchases	—		(158)
More than three months - maturities	—		100

Three months or less, net	8		19
Other investing, net	(10)		—
Net Cash Used for Investing Activities	(562)		(532)

(Continued on following page)

Condensed Consolidated Statement of Cash Flows (continued)

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	12 Weeks Ended
	3/23/2024		3/25/2023
Financing Activities
Proceeds from issuances of long-term debt	$	1,761	$	2,986
Payments of long-term debt	(1,252)		(1,251)

Short-term borrowings, by original maturity:
More than three months - proceeds	2,313		393
More than three months - payments	(1,631)		(1)
Three months or less, net	774		491
Cash dividends paid	(1,767)		(1,608)
Share repurchases	(146)		(160)
Proceeds from exercises of stock options	66		46
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted	(108)		(116)
Other financing	—		(3)
Net Cash Provided by Financing Activities	10		777
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(38)		(116)
Net Decrease in Cash and Cash Equivalents and Restricted Cash	(1,631)		(263)
Cash and Cash Equivalents and Restricted Cash, Beginning of Year	9,761		5,100
Cash and Cash Equivalents and Restricted Cash, End of Period	$	8,130	$	4,837

Supplemental Non-Cash Activity
Right-of-use assets obtained in exchange for lease obligations	$	259	$	213

See accompanying notes to the condensed consolidated financial statements.

Condensed Consolidated Balance Sheet

PepsiCo, Inc. and Subsidiaries

(in millions except per share amounts)


	(Unaudited)
	3/23/2024		12/30/2023
ASSETS
Current Assets
Cash and cash equivalents	$	8,047	$	9,711
Short-term investments	303		292

Accounts and notes receivable, less allowance ($180 and $175, respectively)	10,938		10,815
Inventories:
Raw materials and packaging	2,465		2,388
Work-in-process	97		104
Finished goods	3,007		2,842
	5,569		5,334
Prepaid expenses and other current assets	1,148		798

Total Current Assets	26,005		26,950
Property, plant and equipment	54,510		54,439
Accumulated depreciation	(27,718)		(27,400)
Property, Plant and Equipment, net	26,792		27,039
Amortizable Intangible Assets, net	1,173		1,199
Goodwill	17,646		17,728
Other Indefinite-Lived Intangible Assets	13,680		13,730

Investments in Noncontrolled Affiliates	2,734		2,714
Deferred Income Taxes	4,444		4,474
Other Assets	7,566		6,661
Total Assets	$	100,040	$	100,495

LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations	$	8,161	$	6,510
Accounts payable and other current liabilities	22,073		25,137

Total Current Liabilities	30,234		31,647
Long-Term Debt Obligations	37,707		37,595
Deferred Income Taxes	4,087		3,895
Other Liabilities	8,822		8,721
Total Liabilities	80,850		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: 1,375 and 1,374 shares, respectively)	23		23
Capital in excess of par value	4,132		4,261
Retained earnings	70,331		70,035
Accumulated other comprehensive loss	(15,179)		(15,534)
Repurchased common stock, in excess of par value (492 and 493 shares, respectively)	(40,260)		(40,282)
Total PepsiCo Common Shareholders’ Equity	19,047		18,503
Noncontrolling interests	143		134
Total Equity	19,190		18,637
Total Liabilities and Equity	$	100,040	$	100,495

See accompanying notes to the condensed consolidated financial statements.

Condensed Consolidated Statement of Equity

PepsiCo, Inc. and Subsidiaries

(in millions, except per share amounts, unaudited)


	12 Weeks Ended
		3/23/2024	3/25/2023
			Shares	Amount		Shares	Amount










Common Stock
Balance, beginning of period			1,374	$	23	1,377	$	23
Change in repurchased common stock			1	—		1	—
Balance, end of period			1,375	23		1,378	23
Capital in Excess of Par Value
Balance, beginning of period				4,261			4,134
Share-based compensation expense				92			94

Stock option exercises, RSUs and PSUs converted				(113)			(116)
Withholding tax on RSUs and PSUs converted				(108)			(116)

Balance, end of period				4,132			3,996
Retained Earnings
Balance, beginning of period				70,035			67,800

Net income attributable to PepsiCo				2,042			1,932
Cash dividends declared (a)				(1,746)			(1,590)

Balance, end of period				70,331			68,142
Accumulated Other Comprehensive Loss
Balance, beginning of period				(15,534)			(15,302)
Other comprehensive income/(loss) attributable to PepsiCo				355			(299)
Balance, end of period				(15,179)			(15,601)
Repurchased Common Stock
Balance, beginning of period			(493)	(40,282)		(490)	(39,506)
Share repurchases			(1)	(158)		(1)	(174)
Stock option exercises, RSUs and PSUs converted			2	179		2	162
Other			—	1		—	—
Balance, end of period			(492)	(40,260)		(489)	(39,518)
Total PepsiCo Common Shareholders’ Equity				19,047			17,042
Noncontrolling Interests
Balance, beginning of period				134			124
Net income attributable to noncontrolling interest				11			12
Distributions to noncontrolling interests				(1)			(1)


Other, net				(1)			(2)
Balance, end of period				143			133
Total Equity				$	19,190		$	17,175

(a)Cash dividends declared per common share were $1.265 and $1.15 for the 12 weeks ended March 23, 2024 and March 25, 2023, respectively.

See accompanying notes to the condensed consolidated financial statements.

Notes to the Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation and Our Divisions

Basis of Presentation

When used in this report, the terms “we,” “us,” “our,” “PepsiCo” and the “Company” mean PepsiCo, Inc. and its consolidated subsidiaries, collectively.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial information and with the rules and regulations for reporting the Quarterly Report on Form 10-Q (Form 10-Q). Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The condensed consolidated balance sheet at December 30, 2023 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. These financial statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended December 30, 2023 (2023 Form 10-K). This report should be read in conjunction with our 2023 Form 10-K. In our opinion, these financial statements include all normal and recurring adjustments necessary for a fair presentation. The results for the 12 weeks ended March 23, 2024 are not necessarily indicative of the results expected for any future period or the full year.

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.

While our financial results in the United States and Canada (North America) are reported on a 12-week basis, all of our international operations are reported on a monthly calendar basis for which the months of January and February are reflected in our results for the 12 weeks ended March 23, 2024 and March 25, 2023.

The preparation of our condensed consolidated financial statements requires management to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and related disclosures. Additionally, the business and economic uncertainty resulting from volatile geopolitical conditions and the high interest rate and inflationary cost environment has made such estimates and assumptions more difficult to calculate. Accordingly, actual results and outcomes could differ from those estimates.

Our significant interim accounting policies include the recognition of a pro rata share of certain estimated annual sales incentives and certain advertising and marketing costs in proportion to revenue or volume, as applicable, and the recognition of income taxes using an estimated annual effective tax rate.

Unless otherwise noted, tabular dollars are in millions, except per share amounts. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Certain reclassifications were made to the prior year’s financial statements to conform to the current year presentation.

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.

Net revenue of each division is as follows:


	12 Weeks Ended
		3/23/2024		3/25/2023
FLNA		$	5,676	$	5,583
QFNA		593		777
PBNA		5,874		5,798
LatAm		2,067		1,777
Europe		1,936		1,886
AMESA		1,040		1,019
APAC		1,064		1,006
Total		$	18,250	$	17,846

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:


	12 Weeks Ended
	3/23/2024				3/25/2023
	Beverages(a)		Convenient Foods		Beverages(a)		Convenient Foods
LatAm	9	%	91	%	9	%	91	%
Europe	45	%	55	%	46	%	54	%
AMESA	32	%	68	%	31	%	69	%
APAC	15	%	85	%	15	%	85	%
PepsiCo	41	%	59	%	41	%	59	%

(a)Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe divisions, was 35% and 36% of our consolidated net revenue in the 12 weeks ended March 23, 2024 and March 25, 2023, respectively. Generally, our finished goods beverage operations produce higher net revenue but lower operating margin as compared to concentrate sold to authorized bottling partners for the manufacture of finished goods beverages.

Operating profit/(loss) of each division is as follows:


	12 Weeks Ended
		3/23/2024		3/25/2023
FLNA		$	1,554	$	1,599
QFNA (a)		(49)		188
PBNA		510		483
LatAm		485		364
Europe		202		71
AMESA		152		168
APAC		233		227
Total divisions		3,087		3,100
Corporate unallocated expenses		(370)		(471)
Total		$	2,717	$	2,629

(a)In the 12 weeks ended March 23, 2024, operating loss included a pre-tax charge of $167 million ($128 million after-tax or $0.09 per share) in cost of sales for property, plant and equipment write-offs, employee severance costs and other costs associated with a previously announced voluntary recall of certain bars and cereals in our QFNA division (Quaker Recall).

Note 2 - Recently Issued Accounting Pronouncements

Adopted

In September 2022, the Financial Accounting Standards Board (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 is effective for the current fiscal year 2024. We will adopt the rollforward guidance when it becomes effective in our 2024 annual reporting, on a prospective basis. See Note 12 for disclosures currently required under this guidance.

Not Yet Adopted

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.

In November 2023, the FASB issued guidance to enhance disclosure of expenses of a public entity’s reportable segments. The new guidance requires a public entity to disclose: (1) on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, (2) on an annual and interim basis, 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, (3) on an annual and interim basis, information about a reportable segment’s profit or loss and assets previously required to be disclosed only on an annual basis, and (4) 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 this update and all existing segment disclosures. The guidance is effective for the current fiscal year 2024 annual reporting, and in the first quarter of 2025 for interim period reporting, with early adoption permitted. Upon adoption, this guidance should be applied retrospectively to all prior periods presented. We will adopt the guidance when it becomes effective in our 2024 annual reporting.

Note 3 - Restructuring and Impairment Charges

2019 Multi-Year Productivity Plan

We publicly announced a multi-year productivity plan on February 15, 2019 (2019 Productivity Plan) that leverages new technology and business models to further simplify, harmonize and automate processes; re-engineer our go-to-market and information systems, including deploying the right automation for each market; and simplify our organization and optimize our manufacturing and supply chain footprint. To build on the successful implementation of the 2019 Productivity Plan, in 2022, we expanded and extended the plan through the end of 2028 to take advantage of additional opportunities within the initiatives described above. As a result, we expect to incur 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			10		%				1		%				30		%				10		%				25		%				5		%				4		%				15		%

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


	12 Weeks Ended
		3/23/2024		3/25/2023
Cost of sales		$	6	$	3
Selling, general and administrative expenses		83		110
Other pension and retiree medical benefits expense/(income) (a)		7		(1)
Total restructuring and impairment charges		$	96	$	112
After-tax amount		$	76	$	98
Impact on net income attributable to PepsiCo per common share		$	(0.05)	$	(0.07)


	12 Weeks Ended			Plan to Date
		3/23/2024		3/25/2023		through 3/23/2024
FLNA		$	22	$	7	$	274
QFNA		4		—		23
PBNA		10		5		277
LatAm		5		5		205
Europe		18		89		584
AMESA		—		5		97
APAC		—		1		85
Corporate		30		1		347
		89		113		1,892
Other pension and retiree medical benefits expense/(income) (a)		7		(1)		104
Total		$	96	$	112	$	1,996

(a)Income amount represents adjustments for changes in estimates of previously recorded amounts.


	12 Weeks Ended			Plan to Date
		3/23/2024		3/25/2023		through 3/23/2024
Severance and other employee costs		$	72	$	92	$	1,122
Asset impairments		1		—		193
Other costs		23		20		681
Total		$	96	$	112	$	1,996

Severance and other employee costs primarily include severance and other termination benefits, as well as voluntary separation arrangements. Other costs primarily include costs associated with the implementation of our initiatives, including contract termination costs, consulting and other professional fees.

A summary of our 2019 Productivity Plan activity for the 12 weeks ended March 23, 2024 is as follows:


	Severance and Other Employee Costs		Asset Impairments		Other Costs		Total
Liability as of December 30, 2023	$	188	$	—	$	9	$	197
2024 restructuring charges	72		1		23		96
Cash payments	(39)		—		(21)		(60)
Non-cash charges and translation	(5)		(1)		(1)		(7)
Liability as of March 23, 2024	$	216	$	—	$	10	$	226

Substantially all of the restructuring accrual at March 23, 2024 is expected to be paid by the end of 2024.

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.

Note 4 - Intangible Assets

A summary of our amortizable intangible assets is as follows:


	3/23/2024						12/30/2023
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Acquired franchise rights	$	835	$	(216)	$	619	$	840	$	(214)	$	626
Customer relationships	553		(267)		286		560		(265)		295
Brands	1,086		(987)		99		1,093		(989)		104
Other identifiable intangibles	445		(276)		169		449		(275)		174
Total	$	2,919	$	(1,746)	$	1,173	$	2,942	$	(1,743)	$	1,199

The change in the book value of indefinite-lived intangible assets is as follows:


	Balance 12/30/2023		Translation and Other		Balance 3/23/2024

FLNA
Goodwill	$	453	$	(2)	$	451
Brands	251		—		251
Total	704		(2)		702
QFNA
Goodwill	189		—		189
Total	189		—		189
PBNA
Goodwill	11,961		(10)		11,951
Reacquired franchise rights	7,114		(18)		7,096
Acquired franchise rights	1,737		(3)		1,734
Brands	2,508		—		2,508
Total	23,320		(31)		23,289
LatAm
Goodwill	460		(8)		452
Brands	82		(1)		81
Total	542		(9)		533
Europe
Goodwill	3,166		(30)		3,136
Reacquired franchise rights	419		(6)		413
Acquired franchise rights	154		(4)		150
Brands	1,124		(7)		1,117
Total	4,863		(47)		4,816
AMESA
Goodwill	991		(22)		969
Brands	137		(5)		132
Total	1,128		(27)		1,101
APAC
Goodwill	508		(10)		498
Brands	204		(6)		198
Total	712		(16)		696

Total goodwill	17,728		(82)		17,646
Total reacquired franchise rights	7,533		(24)		7,509
Total acquired franchise rights	1,891		(7)		1,884
Total brands	4,306		(19)		4,287
Total	$	31,458	$	(132)	$	31,326

Note 5 - Income Taxes

Numerous countries have agreed to a statement in support of the Organization for Economic Co-operation and Development (OECD) model rules that propose a global minimum tax rate of 15%. Certain countries have enacted legislation incorporating the agreed global minimum tax effective in 2024. Legislation enacted as of March 23, 2024 did not have a material impact on our financial statements for the 12 weeks ended March 23, 2024 and is not expected to have a material impact on our 2024 financial statements.

Note 6 - Share-Based Compensation

The following table summarizes our total share-based compensation expense, which is primarily recorded in selling, general and administrative expenses:


	12 Weeks Ended
		3/23/2024		3/25/2023
Share-based compensation expense – equity awards		$	97	$	93
Share-based compensation expense – liability awards		5		6

Restructuring charges		(5)		1
Total		$	97	$	100

The following table summarizes share-based awards granted under the terms of the PepsiCo, Inc. Long-Term Incentive Plan:


	12 Weeks Ended
	3/23/2024			3/25/2023
	Granted(a)	Weighted-Average Grant Price		Granted(a)	Weighted-Average Grant Price
Stock options	1.8	$	164.25	2.0	$	171.00
RSUs and PSUs	2.3	$	164.25	2.1	$	171.00

(a)In millions. All grant activity is disclosed at target.

We granted long-term cash awards to certain executive officers and other senior executives with an aggregate target value of $19 million for both the 12 weeks ended March 23, 2024 and March 25, 2023.

Our weighted-average Black-Scholes fair value assumptions are as follows:


	12 Weeks Ended
	3/23/2024		3/25/2023
Expected life	7 years		7 years
Risk-free interest rate	4.2	%	4.2	%
Expected volatility	16	%	16	%
Expected dividend yield	2.9	%	2.7	%

Note 7 - Pension and Retiree Medical Benefits

The components of net periodic benefit cost/(income) for pension and retiree medical plans are as follows:


	12 Weeks Ended
	Pension								Retiree Medical
	U.S.				International
	3/23/2024		3/25/2023		3/23/2024		3/25/2023		3/23/2024		3/25/2023
Service cost	$	80	$	76	$	9	$	8	$	7	$	6
Other pension and retiree medical benefits income:
Interest cost	135		137		27		25		7		8
Expected return on plan assets	(201)		(197)		(39)		(35)		(3)		(3)
Amortization of prior service credits	(6)		(6)		—		—		(1)		(1)
Amortization of net losses/(gains)	18		16		4		2		(6)		(6)

Special termination benefits	7		(1)		—		—		—		—
Total other pension and retiree medical benefits income	(47)		(51)		(8)		(8)		(3)		(2)
Total	$	33	$	25	$	1	$	—	$	4	$	4

We regularly evaluate opportunities to reduce risk and volatility associated with our pension and retiree medical plans.

In the 12 weeks ended March 23, 2024 and March 25, 2023, we made discretionary contributions of $150 million and $125 million, respectively, to our U.S. qualified defined benefit plans, and $27 million and $17 million, respectively, to our international defined benefit plans.

Note 8 - Debt Obligations

In the 12 weeks ended March 23, 2024, we issued, through our wholly-owned consolidated finance subsidiary, PepsiCo Singapore Financing I Pte. Ltd., the following notes:(a)


Interest Rate		Maturity Date	Principal Amount(b)
Floating rate		February 2027	$	300
4.650	%	February 2027	$	550
4.550	%	February 2029	$	450
4.700	%	February 2034	$	450

(a)PepsiCo Singapore Financing I Pte. Ltd. is a finance subsidiary and 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.

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

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

In the 12 weeks ended March 23, 2024, $1.3 billion of U.S. dollar-denominated senior notes matured and were paid.

As of March 23, 2024, we had $3.6 billion of commercial paper outstanding, excluding discounts.

Note 9 - Financial Instruments

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.

There have been no material changes during the 12 weeks ended March 23, 2024 with respect to our risk management policies or strategies and valuation techniques used in measuring the fair value of the financial assets or liabilities disclosed in Note 9 to our consolidated financial statements in our 2023 Form 10-K.

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 March 23, 2024 was $178 million. We have posted no collateral under these contracts and no credit-risk-related contingent features were triggered as of March 23, 2024.

The notional amounts of our financial instruments used to hedge the above risks as of March 23, 2024 and December 30, 2023 are as follows:


	Notional Amounts(a)
	3/23/2024		12/30/2023
Commodity	$	1.5	$	1.7
Foreign exchange	$	3.9	$	3.8
Interest rate	$	1.3	$	1.3
Net investment (b)	$	3.0	$	3.0

(a)In billions.

(b)The total notional amount of our net investment hedges consists of non-derivative debt instruments.

As of March 23, 2024, approximately 12% of total debt, after the impact of the related interest rate derivative instruments, was subject to variable rates, compared to 9% as of December 30, 2023.

Debt Securities

Held-to-Maturity

As of March 23, 2024, we had no investments in held-to-maturity debt securities. As of December 30, 2023, we had $309 million of investments in commercial paper held-to-maturity debt securities 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

There were no impairment charges related to investments in available-for-sale debt securities in both the 12 weeks ended March 23, 2024 and March 25, 2023. Related to our Level 3 (significant unobservable inputs) investment in Celsius Holdings, Inc. (Celsius), we recorded an unrealized gain of $691 million in other comprehensive income during the 12 weeks ended March 23, 2024. There were no Level 3 investments during the 12 weeks ended March 25, 2023.

Recurring Fair Value Measurements

The fair values of our financial assets and liabilities as of March 23, 2024 and December 30, 2023 are categorized as follows:


		3/23/2024				12/30/2023
	Fair Value Hierarchy Levels(a)	Assets(a)		Liabilities(a)		Assets(a)		Liabilities(a)

Available-for-sale debt securities (b)	2,3	$	2,027	$	—	$	1,334	$	—
Index funds (c)	1	$	303	$	—	$	292	$	—
Prepaid forward contracts (d)	2	$	13	$	—	$	13	$	—
Deferred compensation (e)	2	$	—	$	491	$	—	$	477

Derivatives designated as cash flow hedging instruments:
Foreign exchange (f)	2	$	9	$	16	$	3	$	31
Interest rate (f)	2	—		155		5		135
Commodity (g)	2	4		26		10		24
		$	13	$	197	$	18	$	190
Derivatives not designated as hedging instruments:
Foreign exchange (f)	2	$	8	$	17	$	33	$	38
Commodity (g)	2	7		7		5		13
		$	15	$	24	$	38	$	51
Total derivatives at fair value (h)		$	28	$	221	$	56	$	241
Total		$	2,371	$	712	$	1,695	$	718

(a)Fair value hierarchy levels are categorized consistently by Level 1 (quoted prices in active markets for identical assets), Level 2 (significant other observable inputs) and Level 3 in both years. 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)Includes Level 2 assets of $180 million and Level 3 assets of $1,847 million as of March 23, 2024, and Level 2 assets of $178 million and Level 3 assets of $1,156 million as of December 30, 2023. As of March 23, 2024 and December 30, 2023, $2,027 million and $1,334 million were classified as other assets, respectively. The fair values of our Level 2 investments approximate the transaction price and any accrued returns, as well as the amortized cost. 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 8.1% based on Celsius’ 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.

(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 recently reported market transactions of spot and forward rates.

(g)Primarily based on recently reported market transactions of swap arrangements.

(h)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 March 23, 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 March 23, 2024 and December 30, 2023 was $42 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 cash flow and net investment hedges are categorized as follows:


		12 Weeks Ended
	Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss			Losses/(Gains) Reclassified from Accumulated Other Comprehensive Loss into Income Statement(a)
		3/23/2024		3/25/2023		3/23/2024		3/25/2023
Foreign exchange		$	(14)	$	16	$	9	$	1
Interest rate		25		11		24		3
Commodity		39		65		21		9
Net investment		(52)		37		—		—
Total		$	(2)	$	129	$	54	$	13

(a)Foreign exchange derivative losses/(gains) are included in net revenue and cost of sales. Interest rate 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.

Based on current market conditions, we expect to reclassify net losses of $107 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:


	12 Weeks Ended
	3/23/2024						3/25/2023
	Cost of sales		Selling, general and administrative expenses		Total		Cost of sales		Selling, general and administrative expenses		Total
Foreign exchange	$	—	$	18	$	18	$	(1)	$	(5)	$	(6)
Commodity	(1)		(25)		(26)		31		50		81
Total	$	(1)	$	(7)	$	(8)	$	30	$	45	$	75

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:


	12 Weeks Ended
	3/23/2024			3/25/2023
	Income		Shares(a)	Income		Shares(a)





Basic net income attributable to PepsiCo per common share	$	1.49		$	1.40
Net income available for PepsiCo common shareholders	$	2,042	1,375	$	1,932	1,378
Dilutive securities:
Stock options, RSUs, PSUs and other (b)	—		5	—		6
Diluted	$	2,042	1,380	$	1,932	1,384
Diluted net income attributable to PepsiCo per common share	$	1.48		$	1.40

(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 5 million and 3 million for the 12 weeks ended March 23, 2024 and March 25, 2023, respectively.

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 30, 2023 (b)	$	(13,255)	$	(31)	$	(2,719)	$	471	$	(15,534)
Other comprehensive (loss)/income before reclassifications (c)	(168)		(47)		4		685		474
Amounts reclassified from accumulated other comprehensive loss	—		51		9		—		60
Net other comprehensive (loss)/income	(168)		4		13		685		534
Tax amounts	(14)		(1)		(2)		(162)		(179)
Balance as of March 23, 2024 (b)	$	(13,437)	$	(28)	$	(2,708)	$	994	$	(15,179)

(a)The changes primarily represent fair value increases 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 $1,282 million as of December 30, 2023 and $1,280 million as of March 23, 2024.

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


	Currency Translation Adjustment		Cash Flow Hedges		Pension and Retiree Medical		Available-for-sale debt securities and other		Accumulated Other Comprehensive Loss Attributable to PepsiCo
Balance as of December 31, 2022 (a)	$	(12,948)	$	1	$	(2,361)	$	6	$	(15,302)
Other comprehensive loss before reclassifications (b)	(350)		(92)		(9)		(1)		(452)
Amounts reclassified from accumulated other comprehensive loss (c)	108		13		5		—		126
Net other comprehensive loss	(242)		(79)		(4)		(1)		(326)
Tax amounts	7		20		—		—		27
Balance as of March 25, 2023 (a)	$	(13,183)	$	(58)	$	(2,365)	$	5	$	(15,601)

(a)Pension and retiree medical amounts are net of taxes of $1,184 million as of both December 31, 2022 and March 25, 2023.

(b)Currency translation adjustment primarily reflects depreciation of the Egyptian pound and Russian ruble.

(c)Release of currency translation adjustment is in relation to the sale of a non-strategic brand and an investment within our AMESA division.

The reclassifications from accumulated other comprehensive loss to the income statement are summarized as follows:


	12 Weeks Ended
		3/23/2024		3/25/2023		Affected Line Item in the Income Statement



Currency translation:
Divestitures		$	—	$	108	Selling, general and administrative expenses

Cash flow hedges:
Foreign exchange contracts		$	—	$	(2)	Net revenue
Foreign exchange contracts		9		3		Cost of sales
Interest rate derivatives		21		3		Selling, general and administrative expenses
Commodity contracts		21		10		Cost of sales
Commodity contracts		—		(1)		Selling, general and administrative expenses
Net losses before tax		51		13
Tax amounts		(13)		(4)
Net losses after tax		$	38	$	9

Pension and retiree medical items:
Amortization of prior service credits		$	(7)	$	(7)	Other pension and retiree medical benefits income
Amortization of net losses		16		12		Other pension and retiree medical benefits income

Net losses before tax		9		5
Tax amounts		(2)		(1)
Net losses after tax		$	7	$	4






Total net losses reclassified, net of tax		$	45	$	121

Note 12 - Supply Chain Financing Arrangements

We 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. As of March 23, 2024 and December 30, 2023, $1.6 billion and $1.7 billion, respectively, of our accounts payable are to suppliers participating in these financing arrangements. For further information on the key terms of these supply chain financing programs, see Note 14 to our consolidated financial statements in our 2023 Form 10-K.

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