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				36 Weeks Ended
	9/5/2026		9/6/2025		9/5/2026		9/6/2025
Net Revenue	$	25,274	$	23,937	$	68,898	$	64,582
Cost of sales	11,520		11,113		31,302		29,343
Gross profit	13,754		12,824		37,596		35,239
Selling, general and administrative expenses	9,494		9,122		26,100		25,305

Impairment of intangible assets (see Notes 1 and 4)	—		133		—		1,993
Operating Profit	4,260		3,569		11,496		7,941
Other pension and retiree medical benefits (expense)/income	(114)		26		3		91
Net interest expense and other	(242)		(264)		(773)		(788)
Income before income taxes	3,904		3,331		10,726		7,244
Provision for income taxes	834		713		2,314		1,504
Net income	3,070		2,618		8,412		5,740
Less: Net income attributable to noncontrolling interests	22		15		56		40
Net Income Attributable to PepsiCo	$	3,048	$	2,603	$	8,356	$	5,700
Net Income Attributable to PepsiCo per Common Share
Basic	$	2.23	$	1.90	$	6.12	$	4.16
Diluted	$	2.23	$	1.90	$	6.10	$	4.15
Weighted-average common shares outstanding
Basic	1,364		1,369		1,366		1,370
Diluted	1,367		1,372		1,369		1,373

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				36 Weeks Ended
	9/5/2026		9/6/2025		9/5/2026		9/6/2025
Net income	$	3,070	$	2,618	$	8,412	$	5,740
Other comprehensive (loss)/income, net of taxes:
Net currency translation adjustment	(858)		39		16		1,436
Net change on cash flow hedges	(41)		23		54		27
Net pension and retiree medical adjustments	203		21		230		12

Net change on available-for-sale debt securities and other	52		410		(263)		540
Total other comprehensive (loss)/income, net of taxes	(644)		493		37		2,015
Comprehensive income	2,426		3,111		8,449		7,755
Less: Comprehensive income attributable to noncontrolling interests	22		15		56		40
Comprehensive Income Attributable to PepsiCo	$	2,404	$	3,096	$	8,393	$	7,715

See accompanying notes to the condensed consolidated financial statements.

Condensed Consolidated Statement of Cash Flows

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	36 Weeks Ended
	9/5/2026		9/6/2025
Operating Activities
Net income	$	8,412	$	5,740
Depreciation and amortization	2,531		2,315
Impairment and other charges	—		1,960



Operating lease right-of-use asset amortization	531		489
Share-based compensation expense	240		207
Restructuring and impairment charges	367		567
Cash payments for restructuring charges	(373)		(554)
Acquisition and divestiture-related charges/credits	(254)		308
Cash payments for acquisition and divestiture-related charges	(24)		(80)
Pension and retiree medical plan expenses	227		164
Pension and retiree medical plan contributions	(355)		(400)
Deferred income taxes and other tax charges/credits	663		30

Tax payments related to the Tax Cuts and Jobs Act (TCJ Act)	(965)		(772)
Change in assets and liabilities:
Accounts and notes receivable	(2,124)		(1,747)
Inventories	(588)		(449)
Prepaid expenses and other current assets	27		(223)
Accounts payable and other current liabilities	(358)		(1,647)
Income taxes payable	415		6
Other, net	(422)		(446)
Net Cash Provided by Operating Activities	7,950		5,468

Investing Activities
Capital spending	(2,182)		(2,499)
Sales of property, plant and equipment	89		272
Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets	(148)		(3,176)

Short-term investments, by original maturity:
More than three months - purchases	(105)		(190)
More than three months - maturities	17		425
More than three months - sales	14		—
Three months or less, net	(5)		43
Other investing, net	(27)		(112)
Net Cash Used for Investing Activities	(2,347)		(5,237)

(Continued on following page)

Condensed Consolidated Statement of Cash Flows (continued)

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


	36 Weeks Ended
	9/5/2026		9/6/2025
Financing Activities
Proceeds from issuances of long-term debt	$	2,978	$	8,179
Payments of long-term debt	(2,328)		(3,245)

Short-term borrowings, by original maturity:
More than three months - proceeds	4,562		5,528
More than three months - payments	(3,817)		(5,417)
Three months or less, net	1,365		445
Cash dividends paid	(5,935)		(5,692)
Share repurchases	(739)		(752)
Proceeds from exercises of stock options	107		76
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted	(96)		(112)
Other financing	(1)		(18)
Net Cash Used for Financing Activities	(3,904)		(1,008)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(175)		395
Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash	1,524		(382)
Cash and Cash Equivalents and Restricted Cash, Beginning of Year	9,204		8,553
Cash and Cash Equivalents and Restricted Cash, End of Period	$	10,728	$	8,171

Supplemental Non-Cash Activity
Right-of-use assets obtained in exchange for lease obligations	$	625	$	542
Investment obtained for certain assets (see Notes 4 and 8)	$	—	$	554

See accompanying notes to the condensed consolidated financial statements.

Condensed Consolidated Balance Sheet

PepsiCo, Inc. and Subsidiaries

(in millions, except per share amounts)


	(Unaudited)
	9/5/2026		12/27/2025
ASSETS
Current Assets
Cash and cash equivalents	$	10,675	$	9,159
Short-term investments	488		371
Accounts and notes receivable, less allowance ($222 and $230, respectively)	13,623		11,506
Inventories:
Raw materials and packaging	2,792		2,581
Work-in-process	175		143
Finished goods	3,467		3,121
	6,434		5,845
Prepaid expenses and other current assets	1,339		1,068
Total Current Assets	32,559		27,949
Property, plant and equipment	62,383		60,909
Accumulated depreciation	(32,652)		(31,004)
Property, Plant and Equipment, net	29,731		29,905
Amortizable Intangible Assets, net	1,165		1,219
Goodwill	18,884		18,916
Other Indefinite-Lived Intangible Assets	13,977		13,847

Investments in Noncontrolled Affiliates	2,215		2,038
Deferred Income Taxes	4,328		4,541
Other Assets	9,117		8,984
Total Assets	$	111,976	$	107,399

LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations	$	9,223	$	6,861
Accounts payable and other current liabilities	25,306		25,903
Total Current Liabilities	34,529		32,764
Long-Term Debt Obligations	42,658		42,321
Deferred Income Taxes	4,107		3,802
Other Liabilities	8,195		7,965
Total Liabilities	89,489		86,852
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: 1,364 and 1,367 shares, respectively)	23		23
Capital in excess of par value	4,522		4,451
Retained earnings	75,140		72,788
Accumulated other comprehensive loss	(14,987)		(15,024)
Repurchased common stock, in excess of par value (503 and 500 shares, respectively)	(42,406)		(41,832)
Total PepsiCo Common Shareholders’ Equity	22,292		20,406
Noncontrolling interests	195		141
Total Equity	22,487		20,547
Total Liabilities and Equity	$	111,976	$	107,399

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						36 Weeks Ended
	9/5/2026			9/6/2025			9/5/2026			9/6/2025
	Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount










Common Stock
Balance, beginning of period	1,366	$	23	1,371	$	23	1,367	$	23	1,372	$	23
Change in repurchased common stock	(2)	—		(2)	—		(3)	—		(3)	—
Balance, end of period	1,364	23		1,369	23		1,364	23		1,369	23
Capital in Excess of Par Value
Balance, beginning of period		4,447			4,299			4,451			4,385
Share-based compensation expense		78			75			240			204

Stock option exercises, RSUs and PSUs converted		2			4			(67)			(96)
Withholding tax on RSUs and PSUs converted		(1)			(1)			(96)			(112)
Other		(4)			(3)			(6)			(7)
Balance, end of period		4,522			4,374			4,522			4,374
Retained Earnings
Balance, beginning of period		74,116			71,547			72,788			72,266
Net income attributable to PepsiCo		3,048			2,603			8,356			5,700
Cash dividends declared (a)		(2,024)			(1,953)			(6,004)			(5,769)
Balance, end of period		75,140			72,197			75,140			72,197
Accumulated Other Comprehensive Loss
Balance, beginning of period		(14,343)			(16,090)			(15,024)			(17,612)
Other comprehensive (loss)/income attributable to PepsiCo		(644)			493			37			2,015
Balance, end of period		(14,987)			(15,597)			(14,987)			(15,597)
Repurchased Common Stock
Balance, beginning of period	(501)	(42,145)		(496)	(41,361)		(500)	(41,832)		(495)	(41,021)
Share repurchases	(2)	(267)		(2)	(263)		(5)	(749)		(5)	(760)
Stock option exercises, RSUs and PSUs converted	—	6		—	15		2	174		2	172
Other	—	—		—	—		—	1		—	—
Balance, end of period	(503)	(42,406)		(498)	(41,609)		(503)	(42,406)		(498)	(41,609)
Total PepsiCo Common Shareholders’ Equity		22,292			19,388			22,292			19,388
Noncontrolling Interests
Balance, beginning of period		172			141			141			130
Net income attributable to noncontrolling interests		22			15			56			40
Distributions to noncontrolling interests		—			—			(15)			(15)


Other, net		1			(1)			13			—
Balance, end of period		195			155			195			155
Total Equity		$	22,487		$	19,543		$	22,487		$	19,543

(a)Cash dividends declared per common share were $1.4800 and $1.4225 for the 12 weeks ended September 5, 2026 and September 6, 2025, respectively, and $4.3825 and $4.2000 for the 36 weeks ended September 5, 2026 and September 6, 2025, respectively.

See accompanying notes to the condensed consolidated financial statements.

Notes to the Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation and Our Segments

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. We have subsidiaries operating in highly inflationary economies, such as Argentina, Egypt and Turkey, and accordingly apply highly inflationary accounting for these subsidiaries. The condensed consolidated balance sheet at December 27, 2025 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 27, 2025 (2025 Form 10-K). This report should be read in conjunction with our 2025 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 and 36 weeks ended September 5, 2026 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 June, July and August are reflected in our results for the 12 weeks ended September 5, 2026 and September 6, 2025 and the months of January through August are reflected in our results for the 36 weeks ended September 5, 2026 and September 6, 2025.

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, an increasingly complex global tax environment, including changes in how existing laws are interpreted or enforced, expanded or retaliatory tariffs and changes in the interest rate and inflationary cost environment have 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 Segments

We are organized into six reportable segments, as follows:

1)PepsiCo Foods North America (PFNA), which includes all of our convenient food businesses in the United States and Canada;

2)PepsiCo Beverages North America (PBNA), which includes all of our beverage businesses in the United States and Canada;

3)International Beverages Franchise (IB Franchise), which includes our international franchise beverage businesses, as well as our SodaStream business;

4)Europe, Middle East and Africa (EMEA), which includes our convenient food businesses and our beverage businesses with company-owned bottlers in Europe, the Middle East and Africa;

5)Latin America Foods (LatAm Foods), which includes all of our convenient food businesses in Latin America; and

6)Asia Pacific Foods, which consists of our convenient food businesses in Asia Pacific, including China, Australia and New Zealand, as well as India.

Net Revenue, Significant Expenses and Operating Profit by Segment


	12 Weeks Ended 9/5/2026
	PFNA		PBNA		IB Franchise		EMEA		LatAm Foods		Asia Pacific Foods		Total
Net revenue	$	6,504	$	7,706	$	1,401	$	5,413	$	3,021	$	1,229	$	25,274
Segment cost of sales (a)	2,576		3,535		409		3,041		1,234		731
Segment selling, general and administrative expenses (a)	2,546		3,159		428		1,432		1,161		319
Restructuring and impairment charges (b)	48		53		2		43		2		5
Acquisition and divestiture-related charges/credits (c)	1		(97)		—		—		—		—


Segment operating profit	$	1,333	$	1,056	$	562	$	897	$	624	$	174	$	4,646
Corporate unallocated expenses													(386)
Operating profit													4,260
Other pension and retiree medical benefits expense													(114)
Net interest expense and other													(242)
Income before income taxes													$	3,904


	12 Weeks Ended 9/6/2025
	PFNA		PBNA		IB Franchise		EMEA		LatAm Foods		Asia Pacific Foods		Total
Net revenue	$	6,526	$	7,327	$	1,291	$	5,022	$	2,656	$	1,115	$	23,937
Segment cost of sales (a)	2,557		3,407		405		2,864		1,134		666
Segment selling, general and administrative expenses (a)	2,399		2,945		375		1,350		999		293
Restructuring and impairment charges (b)	32		19		2		69		17		5
Acquisition and divestiture-related charges/credits (c)	2		219		—		—		—		—
Impairment and other charges (d)	—		8		73		19		—		—
Indirect and income tax impact (e)	—		—		—		—		82		—
Segment operating profit	$	1,536	$	729	$	436	$	720	$	424	$	151	$	3,996
Corporate unallocated expenses													(427)
Operating profit													3,569
Other pension and retiree medical benefits income													26
Net interest expense and other													(264)
Income before income taxes													$	3,331


	36 Weeks Ended 9/5/2026
	PFNA		PBNA		IB Franchise		EMEA		LatAm Foods		Asia Pacific Foods		Total
Net revenue	$	19,204	$	21,340	$	3,748	$	13,219	$	7,895	$	3,492	$	68,898
Segment cost of sales (a)	7,466		9,947		1,080		7,553		3,193		2,078
Segment selling, general and administrative expenses (a)	7,482		8,750		1,138		3,658		3,025		883
Restructuring and impairment charges (b)	149		55		10		82		9		13
Acquisition and divestiture-related charges/credits (c)	3		(257)		—		—		—		—


Segment operating profit	$	4,104	$	2,845	$	1,520	$	1,926	$	1,668	$	518	$	12,581
Corporate unallocated expenses													(1,085)
Operating profit													11,496
Other pension and retiree medical benefits income													3
Net interest expense and other													(773)
Income before income taxes													$	10,726


	36 Weeks Ended 9/6/2025
	PFNA		PBNA		IB Franchise		EMEA		LatAm Foods		Asia Pacific Foods		Total
Net revenue	$	19,215	$	19,999	$	3,418	$	11,946	$	6,865	$	3,139	$	64,582
Segment cost of sales (a)	7,376		9,056		1,017		6,909		2,906		1,905
Segment selling, general and administrative expenses (a)	7,206		8,379		1,073		3,339		2,540		824
Restructuring and impairment charges (b)	147		192		7		118		36		9
Acquisition and divestiture-related charges/credits (c)	23		285		—		—		—		—
Impairment and other charges (d)	—		1,537		73		270		—		80

Indirect and income tax impact (e)	—		—		—		—		82		—
Segment operating profit	$	4,463	$	550	$	1,248	$	1,310	$	1,301	$	321	$	9,193
Corporate unallocated expenses													(1,252)
Operating profit													7,941
Other pension and retiree medical benefits income													91
Net interest expense and other													(788)
Income before income taxes													$	7,244

(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/credits, impairment and other charges and indirect and income tax impact lines of these tables.

(b)See Note 3 for further information related to restructuring and impairment charges.

(c)See Note 11 for further information related to acquisition and divestiture-related charges/credits.

(d)In the 12 weeks ended September 6, 2025, we recorded pre-tax charges of $100 million ($92 million after tax or $0.07 per share), primarily related to the impairment of the Rockstar brand in our IB Franchise and PBNA segments, with $83 million recorded in impairment of intangible assets and $17 million recorded in selling, general and administrative expenses. In the 36 weeks ended September 6, 2025, we recorded pre-tax charges of $1,960 million ($1,539 million after-tax or $1.12 per share), primarily related to the impairment of the Rockstar brand in our PBNA, EMEA and IB Franchise segments and the Be & Cheery brand in our Asia Pacific Foods segment, with $1,943 million recorded in impairment of intangible assets and $17 million recorded in selling, general and administrative expenses. See Note 4 for further information.

(e)In the 12 and 36 weeks ended September 6, 2025, we recorded a pre-tax charge of $82 million in selling, general and administrative expenses and income tax expense of $47 million in provision for income taxes (collectively, $0.09 per share) related to an indirect and income tax audit settlement in our LatAm Foods segment.

Disaggregation of Net Revenue

Our primary performance obligation is the distribution and sales of beverage and convenient food products to our customers. The following tables reflect the percentage of net revenue generated between our beverage business and our convenient food business:


	12 Weeks Ended
	9/5/2026				9/6/2025
	Beverages(a)		Convenient Foods		Beverages(a)		Convenient Foods




North America	54	%	46	%	53	%	47	%
International (b)	33	%	67	%	33	%	67	%
PepsiCo	45	%	55	%	45	%	55	%


	36 Weeks Ended
	9/5/2026				9/6/2025
	Beverages(a)		Convenient Foods		Beverages(a)		Convenient Foods




North America	53	%	47	%	51	%	49	%
International (b)	31	%	69	%	32	%	68	%
PepsiCo	44	%	56	%	43	%	57	%

(a)Beverage revenue from company-owned bottlers, which includes our consolidated bottling operations in our PBNA and EMEA segments, was 38% of our consolidated net revenue in each of the 12 weeks ended September 5, 2026 and September 6, 2025, and 37% of our consolidated net revenue in each of the 36 weeks ended September 5, 2026 and September 6, 2025. 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.

(b)Beverage and convenient foods revenue generated from our EMEA segment was 41% and 59% of EMEA net revenue, respectively, in each of the 12 weeks ended September 5, 2026 and September 6, 2025, and 38% and 62% of EMEA net revenue, respectively, in each of the 36 weeks ended September 5, 2026 and September 6, 2025.

Other Segment Information

Capital spending and depreciation and amortization of each segment are as follows:


	12 Weeks Ended
	Capital Spending(a)				Depreciation and Amortization
	9/5/2026		9/6/2025		9/5/2026		9/6/2025
PFNA	$	214	$	220	$	224	$	237
PBNA	321		278		277		236
IB Franchise	22		31		25		29
EMEA	159		167		151		142
LatAm Foods	110		178		127		105
Asia Pacific Foods	43		60		44		38
Total segment	869		934		848		787
Corporate	47		58		44		37
Total	$	916	$	992	$	892	$	824


	36 Weeks Ended
	Capital Spending(a)				Depreciation and Amortization
	9/5/2026		9/6/2025		9/5/2026		9/6/2025
PFNA	$	535	$	645	$	680	$	677
PBNA	765		809		804		730
IB Franchise	51		77		71		75
EMEA	376		354		412		358
LatAm Foods	258		339		330		267
Asia Pacific Foods	94		152		114		99
Total segment	2,079		2,376		2,411		2,206
Corporate	103		123		120		109
Total	$	2,182	$	2,499	$	2,531	$	2,315

(a)Asset and other balance sheet information for segments is not provided to our chief operating decision maker.

Note 2 - Recently Issued Accounting Pronouncements

Adopted

In July 2025, the Financial Accounting Standards Board (FASB) issued guidance to provide for a practical expedient that an entity may assume that conditions as of the balance sheet date remain unchanged over the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from revenue transactions from contracts with customers. We adopted the guidance in the first quarter of 2026, on a prospective basis. The adoption did not have a material impact on our condensed consolidated financial statements.

Not Yet Adopted

In September 2025, the FASB issued guidance to improve the accounting for costs related to internal-use software. The new guidance eliminates project stages and requires capitalizing software costs to begin when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. When evaluating if a project is probable to be completed, significant development uncertainty must be assessed. Additionally, disclosures for property, plant and equipment will be required for all capitalized software costs. The guidance is effective in the first quarter of 2028 with early adoption permitted as of the beginning of an annual reporting period. Upon adoption, the guidance may be applied prospectively, retrospectively or using a modified transition approach. We are evaluating the impact of this guidance on our consolidated financial statements.

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 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.

Note 3 - Restructuring and Impairment Charges

2019 Multi-Year Productivity Plan (2019 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 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. These pre-tax charges are expected to consist of approximately 50% of severance and other employee-related costs, 15% for asset impairments (all non-cash) resulting from plant closures and related actions, and 35% for other costs associated with the implementation of our initiatives.

The total plan pre-tax charges are expected to be incurred by segment approximately as follows:


			PFNA						PBNA						IB Franchise						EMEA						LatAm Foods						Asia Pacific Foods						Corporate
Expected pre-tax charges			20		%				25		%				2		%				25		%				10		%				3		%				15		%

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


	12 Weeks Ended				36 Weeks Ended
	9/5/2026		9/6/2025		9/5/2026		9/6/2025
Cost of sales	$	9	$	16	$	27	$	119
Selling, general and administrative expenses	183		126		346		435

Other pension and retiree medical benefits (income)/expense	(7)		(1)		(6)		13
Total restructuring and impairment charges	$	185	$	141	$	367	$	567
After-tax amount	$	149	$	116	$	290	$	467
Impact on net income attributable to PepsiCo per common share	$	(0.11)	$	(0.08)	$	(0.21)	$	(0.34)


	12 Weeks Ended				36 Weeks Ended				Plan-to-Date
	9/5/2026		9/6/2025		9/5/2026		9/6/2025		through 9/5/2026
PFNA	$	48	$	32	$	149	$	147	$	925
PBNA	53		19		55		192		841
IB Franchise	2		2		10		7		75
EMEA	43		69		82		118		1,038
LatAm Foods	2		17		9		36		308
Asia Pacific Foods	5		5		13		9		112
Corporate (a)	39		(2)		55		45		539
	192		142		373		554		3,838
Other pension and retiree medical benefits (income)/expense	(7)		(1)		(6)		13		139
Total	$	185	$	141	$	367	$	567	$	3,977

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


	12 Weeks Ended				36 Weeks Ended				Plan-to-Date
	9/5/2026		9/6/2025		9/5/2026		9/6/2025		through 9/5/2026
Severance and other employee costs	$	148	$	46	$	199	$	168	$	1,988
Asset impairments	—		22		59		109		605
Other costs	37		73		109		290		1,384
Total	$	185	$	141	$	367	$	567	$	3,977

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 36 weeks ended September 5, 2026 is as follows:


	Severance and Other Employee Costs		Asset Impairments		Other Costs		Total
Liability as of December 27, 2025	$	308	$	—	$	18	$	326
Restructuring charges	199		59		109		367
Cash payments (a)	(231)		—		(142)		(373)
Non-cash charges and translation	3		(59)		23		(33)
Liability as of September 5, 2026	$	279	$	—	$	8	$	287

(a)Excludes cash expenditures of $3 million reported in the cash flow statement in pension and retiree medical plan contributions.

The majority of the restructuring accrual at September 5, 2026 is expected to be paid within a year.

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 and 4 for impairment and other charges taken primarily related to the impairments of the Rockstar and Be & Cheery brands.

Note 4 - Intangible Assets

A summary of our amortizable intangible assets is as follows:


	9/5/2026						12/27/2025
	Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Acquired franchise rights	$	832	$	(252)	$	580	$	835	$	(244)	$	591
Customer relationships	773		(374)		399		773		(347)		426
Brands	1,082		(1,027)		55		1,084		(1,021)		63
Other identifiable intangibles	429		(298)		131		433		(294)		139
Total	$	3,116	$	(1,951)	$	1,165	$	3,125	$	(1,906)	$	1,219

The components of indefinite-lived intangible assets are as follows:


	9/5/2026		12/27/2025
Goodwill (a)	$	18,884	$	18,916
Other indefinite-lived intangible assets
Reacquired franchise rights	7,516		7,542
Acquired franchise rights (b)	2,241		2,099
Brands	4,220		4,206
Total indefinite-lived intangible assets	$	32,861	$	32,763

(a)Decrease is primarily related to currency translation adjustments.

(b)Increase is primarily related to acquired distribution rights for the Alani Nu brand.

During the 36 weeks ended September 6, 2025, business performance in conjunction with lower expectations of future business performance compared to projections, as well as the transaction discussed below, indicated a deterioration of the significant inputs used to determine the fair value of our indefinite-lived intangible assets in certain markets 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 (significant unobservable inputs) measurement. We determined that the carrying value exceeded the fair value, which reflected our most current estimates of future sales and their contributions to operating profit and expected future cash flows (including perpetuity growth assumptions), as well as an increase in the weighted-average cost of capital. As a result of the quantitative assessments, in the 36 weeks ended September 6, 2025, we recorded pre-tax impairment charges of $1.9 billion ($1.5 billion after-tax or $1.07 per share) in impairment of intangible assets, primarily comprised of the Rockstar brand in our PBNA, EMEA and IB Franchise segments, with $0.1 billion ($0.1 billion after-tax or $0.06 per share) recorded during the 12 weeks ended September 6, 2025 related to the Rockstar brand in our IB Franchise and PBNA segments.

On August 28, 2025, we consummated a transaction with Celsius Holdings, Inc. (Celsius), pursuant to which we acquired convertible preferred shares and transferred cash and certain non-cash assets, primarily the Rockstar brand of $0.5 billion in the United States and Canada (Celsius Transaction). For further information on the convertible preferred shares, see Note 8. On the same date, we entered into an agreement with Celsius to be the exclusive distributor for the Alani Nu brand in certain channels in the United States and Canada that commenced in the fourth quarter of 2025.

We continuously monitor the performance of all our indefinite-lived intangible assets and performed our annual impairment assessment during our third quarter, which resulted in no impairment. For further information on our policies for indefinite-lived intangible assets, see Note 2 to our consolidated financial statements in our 2025 Form 10-K.

Note 5 - Share-Based Compensation

Starting with awards granted in 2026, RSUs and stock options will primarily vest ratably over three years and amortized to expense on a straight-line basis. Additionally, certain executive officers and other senior executives who were previously granted 66% PSUs and 34% long-term cash were granted 60% PSUs and 40% RSUs in 2026. For PSUs granted in 2026, the final payout will be determined over a three-year period based on achievement of specified pre-established financial performance metrics, with PepsiCo’s total shareholder return relative to a specific set of peer companies acting as a multiplier. The Monte Carlo valuation model is used to determine the grant date fair value of the award, reflective of the total shareholder return market condition. Share-based compensation expense is adjusted for changes in the expected achievement of pre-established financial performance metrics throughout the three-year performance period.

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


	12 Weeks Ended				36 Weeks Ended
	9/5/2026		9/6/2025		9/5/2026		9/6/2025
Share-based compensation expense – equity awards	$	78	$	76	$	240	$	207
Share-based compensation expense – liability awards	2		2		7		(1)

Restructuring charges	—		(1)		—		(3)
Total	$	80	$	77	$	247	$	203

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


	36 Weeks Ended
	9/5/2026			9/6/2025
	Granted(a)	Weighted-Average Grant Price		Granted(a)	Weighted-Average Grant Price
Stock options	1.2	$	162.45	1.7	$	150.75
RSUs and PSUs	2.4	$	169.20	2.1	$	153.50

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

For the 12 weeks ended September 5, 2026 and September 6, 2025, our grants of stock options, RSUs and PSUs were nominal.

We granted long-term cash awards to certain executive officers and other senior executives with an aggregate target value of $22 million during the 36 weeks ended September 6, 2025. Long-term cash awards granted for the 12 weeks ended September 6, 2025 were nominal.

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


	36 Weeks Ended
	9/5/2026		9/6/2025
Expected life	7 years		7 years
Risk-free interest rate	3.8	%	4.1	%
Expected volatility	16	%	16	%
Expected dividend yield	3.6	%	3.5	%

Note 6 - Pension and Retiree Medical Benefits

In the 12 and 36 weeks ended September 5, 2026, we recognized a pre-tax settlement charge of $144 million ($111 million after-tax or $0.08 per share) in a U.S. qualified defined benefit pension plan due to lump sum distributions to retired or terminated employees. The settlement charge was triggered when the cumulative lump sum distributions exceeded the total annual service and interest cost in 2026. As a result, related plan assets and benefit obligations were remeasured using assumptions as of September 5, 2026, the remeasurement date. The weighted-average discount rate for the U.S. defined benefit plans’ projected benefit obligations increased from 5.5% to 5.7% as a result of the remeasurement. In addition, for purposes of determining the 2026 net periodic benefit cost/(income), the weighted-average interest cost discount rate for the U.S. defined benefit pension plans increased from 4.9% to 5.1%, while the weighted-average expected return on plan assets remained unchanged at 7.8%. Any incremental lump sum payments made in the fourth quarter of 2026 would result in additional settlement charges for the year.

For further information on our policies for pension, retiree-medical and savings plans, refer to Note 7 to our consolidated financial statements in our 2025 Form 10-K.

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
	9/5/2026		9/6/2025		9/5/2026		9/6/2025		9/5/2026		9/6/2025
Service cost	$	55	$	71	$	13	$	11	$	8	$	8
Other pension and retiree medical benefits expense/(income):
Interest cost	121		136		38		35		7		6
Expected return on plan assets	(191)		(186)		(50)		(46)		(4)		(3)
Amortization of prior service cost/(credits)	2		1		—		(1)		(1)		(1)
Amortization of net losses/(gains)	16		19		9		7		(5)		(5)
Settlement/curtailment losses (a)	171		5		8		8		—		—
Special termination benefits	(7)		(1)		—		—		—		—
Total other pension and retiree medical benefits expense/(income)	112		(26)		5		3		(3)		(3)
Total	$	167	$	45	$	18	$	14	$	5	$	5


	36 Weeks Ended
	Pension								Retiree Medical
	U.S.				International
	9/5/2026		9/6/2025		9/5/2026		9/6/2025		9/5/2026		9/6/2025
Service cost	$	163	$	216	$	36	$	30	$	25	$	22
Other pension and retiree medical benefits expense/(income):
Interest cost	361		406		103		97		19		20
Expected return on plan assets	(573)		(558)		(140)		(129)		(8)		(8)
Amortization of prior service cost/(credits)	6		2		—		(1)		(3)		(3)
Amortization of net losses/(gains)	50		58		23		17		(14)		(17)
Net settlement/curtailment losses (a)	171		5		8		7		—		—
Special termination benefits	(6)		13		—		—		—		—
Total other pension and retiree medical benefits expense/(income)	9		(74)		(6)		(9)		(6)		(8)
Total	$	172	$	142	$	30	$	21	$	19	$	14

(a) U.S. amounts for the 12 and 36 weeks ended September 5, 2026 include a pre-tax settlement charge of $144 million ($111 million after-tax or $0.08 per share) in a U.S. qualified defined benefit pension plan.

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

In the 36 weeks ended September 5, 2026 and September 6, 2025, we made discretionary contributions of $200 million and $250 million, respectively, to our U.S. qualified defined benefit plans, and $52 million and $29 million, respectively, to our international defined benefit plans.

Note 7 - Debt Obligations

In the 36 weeks ended September 5, 2026, we issued the following notes:


Interest Rate		Maturity Date	Principal Amount(a) (b)
Floating Rate		February 2028	€500
3.300	%	February 2034	€650
3.700	%	February 2038	€850
4.150	%	February 2047	€500

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

(b)These notes, issued in euros, were designated as net investment hedges to partially offset the effects of foreign currency on our investments in certain of our foreign subsidiaries.

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

In the 36 weeks ended September 5, 2026, $1.6 billion of U.S. dollar-denominated senior notes and €0.5 billion of euro-denominated senior notes matured and were paid. Subsequent to September 5, 2026, $1.1 billion of U.S. dollar-denominated senior notes matured and were paid.

As of September 5, 2026, we had $4.8 billion of commercial paper outstanding, excluding discounts.

In the 36 weeks ended September 5, 2026, we entered into a new five-year unsecured revolving credit agreement (2026 Five-Year Credit Agreement), which expires on May 22, 2031. The 2026 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 $1.2 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 2026 Five-Year Credit Agreement, request renewal of the agreement for an additional one-year period. The 2026 Five-Year Credit Agreement replaced our $5.0 billion five-year credit agreement, dated as of May 23, 2025.

Also in the 36 weeks ended September 5, 2026, we entered into a new 364-day unsecured revolving credit agreement (2026 364-Day Credit Agreement), which expires on May 21, 2027. The 2026 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 2026 364-Day Credit Agreement replaced our $5.0 billion 364-day credit agreement, dated as of May 23, 2025.

Funds borrowed under the 2026 Five-Year Credit Agreement and the 2026 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 September 5, 2026, there were no outstanding borrowings under the 2026 Five-Year Credit Agreement or the 2026 364-Day Credit Agreement.

Note 8 - 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 36 weeks ended September 5, 2026 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 2025 Form 10-K.

Occasionally, we are exposed to fluctuation in market prices of certain of our equity investments. Subsequent to September 5, 2026, we manage this risk through the use of derivative or non-derivative instruments, including forward contracts. Derivative positions are marked to market each period with the resulting gains and losses offset by price changes in the underlying hedged investments. Cash flows associated with the settlement of these instruments are classified within investing activities.

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 September 5, 2026 was $156 million. We have posted no collateral under these contracts and no credit-risk-related contingent features were triggered as of September 5, 2026.

The notional amounts of our financial instruments used to hedge the above risks are as follows:


	Notional Amounts(a)
	9/5/2026		12/27/2025
Commodity contracts	$	1.7	$	1.5
Interest rate swap contracts	$	2.0	$	2.0
Foreign exchange contracts (b)	$	4.0	$	3.1
Cross-currency contracts (c)	$	1.3	$	1.7
Non-derivative debt instruments (b)	$	11.7	$	4.4

(a)In billions. Subsequent to September 5, 2026, we entered into a forward sale contract for a notional amount of $253 million to hedge the exposure to changes in price of an investment.

(b)During the 36 weeks ended September 5, 2026, we designated $4.5 billion of existing euro denominated debt and $2.9 billion of euro denominated debt issued in February 2026 as net investment hedges to partially offset the effects of foreign currency on our investments in certain of our foreign operations. During the 12 and 36 weeks ended September 5, 2026, we designated $580 million of foreign exchange contracts maturing in October 2026 as net investment hedges to partially offset the effects of foreign currency on our investments in certain of our foreign operations.

(c)During the 36 weeks ended September 5, 2026, U.S. dollar for euro cross-currency interest rate swaps with a total notional amount of $0.7 billion matured. During the 12 and 36 weeks ended September 5, 2026, we entered into Thai baht for U.S. dollar cross-currency interest rate swaps with a total notional amount of $0.3 billion and maturity dates ranging from May 2027 to May 2031. The cross-currency interest rate swaps are designated as net investment hedges to hedge the net assets of certain foreign operations with Thai baht functional currency.

As of September 5, 2026, approximately 15% of total debt was subject to variable rates, after the impact of the related interest rate swap contracts, compared to approximately 11% as of December 27, 2025.

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. As of September 5, 2026, we had $70 million of investments in U.S. municipal bonds held-to-maturity debt securities with $25 million recorded in short-term investments and $45 million recorded in other assets. As of December 27, 2025, our held-to-maturity debt securities were not material. 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 September 5, 2026 and December 27, 2025, gross unrecognized gains and losses and the allowance for expected credit losses were not material.

Available-for-Sale

On August 28, 2025, as part of the Celsius Transaction described in Note 4, we acquired Series B convertible preferred shares, issued by Celsius, valued at $585 million upon acquisition, excluding acquisition-related charges. These Series B convertible preferred shares include certain conversion and redemption features and convert into Celsius common shares after six years from issuance if certain market-based conditions are met, or can be redeemed for cash after seven years from issuance. Shares underlying the transaction were priced at $51.75 per share, and the 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 a Level 3 investment in available-for-sale debt securities, consistent with the Series A convertible preferred shares issued by Celsius that we also hold. In addition, as part of this transaction, the conversion and redemption periods of the Series A convertible preferred

shares were extended to match the terms of the newly issued Series B convertible preferred shares, which was accounted for as a modification.

The activity related to our Level 3 investments in certain available-for-sale debt securities is as follows:



	12 Weeks Ended				36 Weeks Ended

	9/5/2026		9/6/2025		9/5/2026		9/6/2025
Celsius:
Balance, beginning of period	$	1,453	$	958	$	1,852	$	785
Acquired	—		590		—		590
Net unrealized gain/(loss)	43		535		(328)		722
Cash dividends received	(14)		(6)		(42)		(20)
Balance, end of period	1,482		2,077		1,482		2,077
Other:
Balance, beginning of period	259		261		275		256
Net unrealized gain	41		6		25		11
Balance, end of period (a)	300		267		300		267
Total Level 3 available-for-sale balance, end of period	$	1,782	$	2,344	$	1,782	$	2,344

(a)Subsequent to September 5, 2026, we converted this available-for-sale debt security into common shares of the issuer pursuant to the terms of the investment agreement. Additionally, we executed a forward sale contract to hedge the exposure to changes in market price of this investment, resulting in an expected pre-tax income of $50 million to be recognized in corporate unallocated expenses in the fourth quarter of 2026.

There were no impairment charges related to our investments in available-for-sale debt securities in both the 36 weeks ended September 5, 2026 and September 6, 2025. There were net unrealized gains of $557 million and $1,067 million as of September 5, 2026 and September 6, 2025, respectively, associated with our available-for-sale debt securities.

Recurring Fair Value Measurements

The fair values of our financial assets and liabilities are categorized as follows:


	Fair Value Hierarchy Levels(a)		9/5/2026						12/27/2025
		Assets(a)			Liabilities(a)			Assets(a)			Liabilities(a)

Available-for-sale debt securities (b)	3		$	1,782		$	—		$	2,127		$	—
Index funds (c)	1		382			—			341			—

Deferred compensation (d)	2		—			506			—			495
Contingent consideration (e)	3		—			12			—			278
Derivatives designated as fair value hedging instruments:
Interest rate swap contracts (f)	2		—			38			19			3

Derivatives designated as cash flow hedging instruments:
Foreign exchange contracts (g)	2		8			20			6			28
Cross-currency contracts (g)	2		—			—			—			102
Commodity contracts (h)	2		60			15			116			5
			68			35			122			135
Derivatives designated as net investment hedging instruments:
Foreign exchange contracts (g)	2		1			3			—			1
Cross-currency contracts (g)	2		1			132			—			34
			2			135			—			35
Derivatives not designated as hedging instruments:
Foreign exchange contracts (g)	2		1			23			6			32
Commodity contracts (h)	2		33			7			4			9
			34			30			10			41
Total derivatives at fair value (i)			104			238			151			214
Total			$	2,268		$	756		$	2,619		$	987

(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)Classified as other assets. The fair value of our 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 8.9% and 8.5% as of September 5, 2026 and December 27, 2025, respectively. The fair value of the other 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% based on 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. Subsequent to September 5, 2026, we converted the other available-for-sale debt security into common shares of the issuer pursuant to the terms of the investment agreement. Additionally, we executed a forward sale contract to hedge the exposure to changes in market price of this investment, resulting in an expected pre-tax income of $50 million to be recognized in corporate unallocated expenses in the fourth quarter of 2026.

(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 on the fair value of investments corresponding to employees’ investment elections.

(e)In connection with our acquisition of VNGR Beverage, LLC (poppi), we recorded a contingent consideration liability measured at fair value. Under the terms of the arrangement, we will be required to make a payment of $300 million if certain performance milestones are achieved by the third quarter of 2027; otherwise, no payment will be made. The fair value of the liability is estimated using discounted future cash flows based on a Monte Carlo simulation using significant unobservable inputs such as forecasts of net revenue and margin. An increase in the net revenue and margin forecasts would result in a higher fair value measurement, while a decrease in the net revenue and margin forecasts would result in a lower fair value measurement. As of September 5, 2026, the fair value of the contingent consideration was $12 million, reflecting a fair value decrease of $105 million and $266 million in the 12 and 36 weeks ended September 5, 2026, respectively, recorded in selling, general and administrative expenses.

(f)Based on Secured Overnight Financing Rate forward rates. As of September 5, 2026, the carrying amount of hedged fixed-rate debt was $2.0 billion, which was classified on the balance sheet within long-term debt obligations.

(g)Based on recently reported market transactions of spot and/or 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 September 5, 2026 and December 27, 2025 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 September 5, 2026 and December 27, 2025 was $47 billion and $46 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 recognized in the income statement are as follows:



	12 Weeks Ended				36 Weeks Ended

	9/5/2026		9/6/2025		9/5/2026		9/6/2025
Interest rate swap contracts (a)	$	17	$	(33)	$	54	$	(76)

(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:


	12 Weeks Ended
	Recognized in Accumulated Other Comprehensive Loss				Reclassified from Accumulated Other Comprehensive Loss into Income Statement(a)
	9/5/2026		9/6/2025		9/5/2026		9/6/2025
Foreign exchange contracts	$	16	$	8	$	7	$	13
Cross-currency contracts	—		(5)		—		(8)
Commodity contracts	1		(38)		(44)		(10)
Total	$	17	$	(35)	$	(37)	$	(5)


		36 Weeks Ended
	Recognized in Accumulated Other Comprehensive Loss			Reclassified from Accumulated Other Comprehensive Loss into Income Statement(a)
		9/5/2026		9/6/2025		9/5/2026		9/6/2025
Foreign exchange contracts		$	22	$	78	$	37	$	(11)
Cross-currency contracts		5		(60)		5		(63)
Commodity contracts		(211)		(138)		(168)		(15)
Total		$	(184)	$	(120)	$	(126)	$	(89)

(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 10 for further information.

As of September 5, 2026, we expect to reclassify net gains of $160 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) on our net investment hedges are categorized as follows:


		12 Weeks Ended
	Recognized in Accumulated Other Comprehensive Loss			Recognized in Income Statement(a)
		9/5/2026		9/6/2025		9/5/2026		9/6/2025
Non-derivative debt instruments		$	39	$	27	$	—	$	—
Cross-currency contracts		27		4		(5)		(3)
Foreign exchange contracts		3		(13)		(1)		—
Total		$	69	$	18	$	(6)	$	(3)


		36 Weeks Ended
	Recognized in Accumulated Other Comprehensive Loss			Recognized in Income Statement(a)
		9/5/2026		9/6/2025		9/5/2026		9/6/2025
Non-derivative debt instruments		$	(120)	$	311	$	—	$	—
Cross-currency contracts		97		13		(13)		(7)
Foreign exchange contracts		(8)		(13)		(3)		—
Total		$	(31)	$	311	$	(16)	$	(7)

(a)Amount excluded from the assessment of effectiveness recognized in earnings associated with cross-currency interest rate swaps and forward contracts.

Losses/(gains) recognized in the income statement related to our non-designated hedges are categorized as follows:


	12 Weeks Ended
	9/5/2026						9/6/2025
	Cost of sales		Selling, general and administrative expenses		Total		Cost of sales		Selling, general and administrative expenses		Total
Foreign exchange contracts	$	—	$	32	$	32	$	—	$	(3)	$	(3)
Commodity contracts	(20)		(102)		(122)		16		4		20
Total	$	(20)	$	(70)	$	(90)	$	16	$	1	$	17


	36 Weeks Ended
	9/5/2026						9/6/2025
	Cost of sales		Selling, general and administrative expenses		Total		Cost of sales		Selling, general and administrative expenses		Total
Foreign exchange contracts	$	—	$	19	$	19	$	1	$	51	$	52
Commodity contracts	(48)		(277)		(325)		12		(6)		6
Total	$	(48)	$	(258)	$	(306)	$	13	$	45	$	58

Note 9 - 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
	9/5/2026			9/6/2025
	Income		Shares(a)	Income		Shares(a)
Basic net income attributable to PepsiCo per common share	$	2.23		$	1.90
Net income available for PepsiCo common shareholders	$	3,048	1,364	$	2,603	1,369
Dilutive securities:
Stock options, RSUs, PSUs and other (b)	—		3	—		3
Diluted	$	3,048	1,367	$	2,603	1,372
Diluted net income attributable to PepsiCo per common share	$	2.23		$	1.90


	36 Weeks Ended
	9/5/2026			9/6/2025
	Income		Shares(a)	Income		Shares(a)





Basic net income attributable to PepsiCo per common share	$	6.12		$	4.16
Net income available for PepsiCo common shareholders	$	8,356	1,366	$	5,700	1,370
Dilutive securities:
Stock options, RSUs, PSUs and other (b)	—		3	—		3
Diluted	$	8,356	1,369	$	5,700	1,373
Diluted net income attributable to PepsiCo per common share	$	6.10		$	4.15

(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 10 million and 9 million for the 12 and 36 weeks ended September 5, 2026, respectively, and 7 million and 8 million for the 12 and 36 weeks ended September 6, 2025, respectively.

Note 10 - 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 27, 2025 (b)	$	(13,494)	$	126	$	(2,262)	$	606	$	(15,024)
Other comprehensive income/(loss) before reclassifications (c)	757		108		(10)		(129)		726
Amounts reclassified from accumulated other comprehensive loss	—		(37)		19		—		(18)
Net other comprehensive income/(loss)	757		71		9		(129)		708
Tax amounts	(38)		(16)		(3)		31		(26)
Balance as of March 21, 2026 (b)	(12,775)		181		(2,256)		508		(14,342)
Other comprehensive income/(loss) before reclassifications (d)	145		93		4		(285)		(43)
Amounts reclassified from accumulated other comprehensive loss	—		(52)		22		—		(30)
Net other comprehensive income/(loss)	145		41		26		(285)		(73)
Tax amounts	10		(1)		(5)		68		72
Balance as of June 13, 2026 (b)	(12,620)		221		(2,235)		291		(14,343)
Other comprehensive (loss)/ income before reclassifications (e)	(876)		(17)		87		69		(737)
Amounts reclassified from accumulated other comprehensive loss	—		(37)		175		—		138
Net other comprehensive (loss)/income	(876)		(54)		262		69		(599)
Tax amounts	18		13		(59)		(17)		(45)
Balance as of September 5, 2026 (b)	$	(13,478)	$	180	$	(2,032)	$	343	$	(14,987)

(a)The movements primarily represent fair value changes in available-for-sale debt securities, including our investment in Celsius convertible preferred stock. See Note 8 for further information.

(b)Pension and retiree medical amounts are net of taxes of $1,138 million as of December 27, 2025, $1,135 million as of March 21, 2026, $1,130 million as of June 13, 2026 and $1,071 million as of September 5, 2026.

(c)Currency translation adjustment primarily reflects appreciation of the euro, Mexican peso and Russian ruble.

(d)Currency translation adjustment primarily reflects appreciation of the Russian ruble.

(e)Currency translation adjustment primarily reflects depreciation of the Russian ruble.


	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 28, 2024 (b)	$	(15,217)	$	82	$	(2,714)	$	237	$	(17,612)
Other comprehensive income/(loss) before reclassifications (c)	410		58		(4)		87		551
Amounts reclassified from accumulated other comprehensive loss	—		(31)		17		—		(14)
Net other comprehensive income	410		27		13		87		537
Tax amounts	26		(5)		(3)		(21)		(3)
Balance as of March 22, 2025 (b)	(14,781)		104		(2,704)		303		(17,078)
Other comprehensive income/(loss) before reclassifications (d)	915		27		(42)		84		984
Amounts reclassified from accumulated other comprehensive loss	—		(53)		18		—		(35)
Net other comprehensive income/(loss)	915		(26)		(24)		84		949
Tax amounts	46		8		5		(20)		39
Balance as of June 14, 2025 (b)	(13,820)		86		(2,723)		367		(16,090)
Other comprehensive income/(loss) before reclassifications	33		35		(6)		536		598
Amounts reclassified from accumulated other comprehensive loss	—		(5)		33		—		28
Net other comprehensive income	33		30		27		536		626
Tax amounts	6		(7)		(6)		(126)		(133)
Balance as of September 6, 2025 (b)	$	(13,781)	$	109	$	(2,702)	$	777	$	(15,597)

(a)The movements primarily represent fair value changes in available-for-sale debt securities, including our investment in Celsius convertible preferred stock. See Note 8 for further information.

(b)Pension and retiree medical amounts are net of taxes of $1,282 million as of December 28, 2024, $1,279 million as of March 22, 2025, $1,284 million as of June 14, 2025 and $1,278 million as of September 6, 2025.

(c)Currency translation adjustment primarily reflects appreciation of the Russian ruble and depreciation of the euro.

(d)Currency translation adjustment primarily reflects appreciation of the Russian ruble, Mexican peso and Canadian dollar.

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


	12 Weeks Ended				36 Weeks Ended
	9/5/2026		9/6/2025		9/5/2026		9/6/2025		Affected Line Item in the Income Statement






Cash flow hedges:
Foreign exchange contracts	$	(1)	$	—	$	(1)	$	(2)	Net revenue
Foreign exchange contracts	8		13		38		(9)		Cost of sales
Cross-currency contracts	—		(8)		5		(63)		Selling, general and administrative expenses

Commodity contracts	(44)		(11)		(166)		(17)		Cost of sales
Commodity contracts	—		1		(2)		2		Selling, general and administrative expenses
Net gains before tax	(37)		(5)		(126)		(89)
Tax amounts	8		—		37		22
Net gains after tax	(29)		(5)		(89)		(67)

Pension and retiree medical items:
Amortization of net prior service cost/(credits)	1		(1)		3		(2)		Other pension and retiree medical benefits (expense)/income
Amortization of net losses	20		21		59		58		Other pension and retiree medical benefits (expense)/income
Net settlement/curtailment losses	154		13		154		12		Other pension and retiree medical benefits (expense)/income
Net losses before tax	175		33		216		68
Tax amounts	(39)		(7)		(48)		(15)
Net losses after tax	136		26		168		53






Total net losses/(gains) reclassified, net of tax	$	107	$	21	$	79	$	(14)

Note 11 - Acquisitions and Divestitures

2025 Acquisitions

On January 17, 2025, we acquired all of the outstanding equity interest in Garza Food Ventures LLC (Siete), a Mexican-American foods business, for total consideration of $1.2 billion in cash.

On May 19, 2025, we acquired all of the outstanding equity interest in poppi, a prebiotic soda business, for cash consideration of $1.9 billion and contingent consideration with an acquisition date fair value of $0.2 billion. See Note 8 for further information on the contingent consideration. In connection with this acquisition, other payments may be incurred, subject to the achievement of certain conditions.

We accounted for the 2025 acquisitions as business combinations. We recognized and measured the identifiable assets acquired and liabilities assumed at their estimated fair values on the respective dates of acquisition. The purchase price allocations for Siete and poppi were finalized in the first and second quarter of 2026, respectively.

The fair value of identifiable assets acquired and liabilities assumed in the acquisitions of Siete and poppi and the resulting goodwill as of the respective acquisition dates is summarized as follows:



	Siete		poppi
Acquisition date	January 17, 2025		May 19, 2025
Segment	PFNA		PBNA
Inventories	$	28	$	114
Property, plant and equipment	7		3
Amortizable intangible asset	65		150
Other indefinite-lived intangible asset (brand)	470		1,700
Other assets and liabilities	46		(32)
Total identifiable net assets	616		1,935
Goodwill	630		185
Total purchase price	$	1,246	$	2,120

Goodwill is calculated as the excess of the aggregate fair value of the consideration transferred over the fair value of the net assets recognized. The goodwill recorded as part of the acquisitions of Siete and poppi primarily reflects our expectation of future economic benefits arising from growth opportunities, expanded consumer reach and the strengthening of our overall product offerings across our food and beverage businesses. All of the goodwill associated with our acquisitions of Siete and poppi is recorded in our PFNA and PBNA segments, respectively, and is deductible for tax purposes.

Acquisition and Divestiture-Related Charges/Credits

Acquisition and divestiture-related charges/credits include merger and integration charges, transaction expenses, such as consulting, advisory and other professional fees, as well as fair value adjustments to contingent consideration and to the acquired inventory included in the acquisition-date balance sheets. Merger and integration charges include distribution agreement termination fees, impairment of certain acquisition-related intangibles, employee-related costs, closing costs and other integration costs.

A summary of charges/credits is as follows:


	12 Weeks Ended				36 Weeks Ended
	9/5/2026		9/6/2025		9/5/2026		9/6/2025
Cost of sales	$	—	$	46	$	—	$	46
Selling, general and administrative expenses (a)	(96)		125		(254)		212
Impairment of intangible assets	—		50		—		50
Total	$	(96)	$	221	$	(254)	$	308
After-tax amount	$	(73)	$	169	$	(194)	$	236
Impact on net income attributable to PepsiCo per common share	$	0.05	$	(0.12)	$	0.14	$	(0.17)


	12 Weeks Ended				36 Weeks Ended
	9/5/2026		9/6/2025		9/5/2026		9/6/2025
PFNA	$	1	$	2	$	3	$	23
PBNA (a)	(97)		219		(257)		285





Total	$	(96)	$	221	$	(254)	$	308

(a)Income amounts primarily relate to the change in the fair value of contingent consideration associated with our acquisition of poppi. See Note 8 for further information.

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 September 5, 2026 and December 27, 2025, $1.8 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 2025 Form 10-K.

Note 13 - 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 is not expected to have a material adverse effect on our financial condition, results of operations or cash flows.

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