UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June ~~12, 2021~~11, 2022 (24 weeks)


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-1183


PepsiCo, Inc.

(Exact Name of Registrant as Specified in its Charter)



North Carolina						13-1584302
(State or Other Jurisdiction of Incorporation or Organization)						(I.R.S. Employer Identification No.)

700 Anderson Hill Road, Purchase, New York 10577


(Address of principal executive offices and Zip Code)

(914) 253-2000


Registrant's telephone number, including area code

N/A


(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class

Trading Symbols

Name of each exchange on which registered

Common Stock, par value 1-2/3 cents per share

PEP

The Nasdaq Stock Market LLC

2.500% Senior Notes Due 2022

PEP22a

The Nasdaq Stock Market LLC

0.250% Senior Notes Due 2024

PEP24

The Nasdaq Stock Market LLC

2.625% Senior Notes Due 2026

PEP26

The Nasdaq Stock Market LLC

0.750% Senior Notes Due 2027

PEP27

The Nasdaq Stock Market LLC

0.875% Senior Notes Due 2028

PEP28

The Nasdaq Stock Market LLC

0.500% Senior Notes Due 2028

PEP28a

The Nasdaq Stock Market LLC

1.125% Senior Notes Due 2031

PEP31

The Nasdaq Stock Market LLC

0.400% Senior Notes Due 2032

PEP32

The Nasdaq Stock Market LLC

0.750% Senior Notes Due 2033

PEP33

The Nasdaq Stock Market LLC

0.875% Senior Notes Due 2039

PEP39

The Nasdaq Stock Market LLC

1.050% Senior Notes Due 2050

PEP50

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of Common Stock outstanding as of July ~~6, 2021~~5, 2022 was ~~1,382,114,956.~~1,380,084,844.

Table of Contents

PepsiCo, Inc. and Subsidiaries

Table of Contents


		Page No.
Part I Financial Information
Item 1.	Condensed Consolidated Financial Statements	3
	Condensed Consolidated Statement of Income – 12 and 24 Weeks Ended June 11 , 2022 and June 12 , 2021 ~~and June 13, 2020~~	3
	Condensed Consolidated Statement of Comprehensive Income – 12 and 24 Weeks Ended June 11, 2022 and June 12 , 2021 ~~and June 13, 2020~~	4
	Condensed Consolidated Statement of Cash Flows – 24 Weeks Ended June ~~12, 2021~~11, 2 022 and June ~~13, 2020~~12 , 2021	5
	Condensed Consolidated Balance Sheet – June ~~12, 2021~~11 , 2022 and December ~~26, 2020~~25, 2021	7
	Condensed Consolidated Statement of Equity – 12 and 24 2 4 Weeks Ended June 11 , 2022 and June 12 , 2021 ~~and June 13, 2020~~	8
	Notes to the Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2728
Report of Independent Registered Public Accounting Firm		5054
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5155
Item 4.	Controls and Procedures	5155
Part II Other Information
Item 1.	Legal Proceedings	5256
Item 1A.	Risk Factors	5256
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5257
Item 6.	Exhibits	5257

Table of Contents

PART I FINANCIAL INFORMATION

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				24 Weeks Ended					12 Weeks Ended				24 Weeks Ended
		6/12/2021		6/13/2020		6/12/2021		6/13/2020			6/11/2022		6/12/2021		6/11/2022		6/12/2021
Net Revenue	Net Revenue	$	19,217	$	15,945	$	34,037	$	29,826	Net Revenue	$	20,225	$	19,217	$	36,425	$	34,037
Cost of sales	Cost of sales	8,880		7,088		15,551		13,215		Cost of sales	9,415		8,880		16,848		15,551
Gross profit	Gross profit	10,337		8,857		18,486		16,611		Gross profit	10,810		10,337		19,577		18,486
Selling, general and administrative expenses	Selling, general and administrative expenses	7,208		6,538		13,045		12,368		Selling, general and administrative expenses	7,387		7,208		13,967		13,045
Gain associated with the Juice Transaction (a)										Gain associated with the Juice Transaction (a)	(13)		—		(3,335)		—
Impairment of intangible assets (see Notes 1 and 3)										Impairment of intangible assets (see Notes 1 and 3)	1,359		—		1,601		—
Operating Profit	Operating Profit	3,129		2,319		5,441		4,243		Operating Profit	2,077		3,129		7,344		5,441
Other pension and retiree medical benefits income		126		84		246		161
Other pension and retiree medical benefits (expense)/income										Other pension and retiree medical benefits (expense)/income	(2)		126		132		246
Net interest expense and other	Net interest expense and other	(241)		(235)		(499)		(525)		Net interest expense and other	(236)		(241)		(476)		(499)
Income before income taxes	Income before income taxes	3,014		2,168		5,188		3,879		Income before income taxes	1,839		3,014		7,000		5,188
Provision for income taxes	Provision for income taxes	642		510		1,093		870		Provision for income taxes	393		642		1,281		1,093
Net income	Net income	2,372		1,658		4,095		3,009		Net income	1,446		2,372		5,719		4,095
Less: Net income attributable to noncontrolling interests	Less: Net income attributable to noncontrolling interests	14		12		23		25		Less: Net income attributable to noncontrolling interests	17		14		29		23
Net Income Attributable to PepsiCo	Net Income Attributable to PepsiCo	$	2,358	$	1,646	$	4,072	$	2,984	Net Income Attributable to PepsiCo	$	1,429	$	2,358	$	5,690	$	4,072
Net Income Attributable to PepsiCo per Common Share	Net Income Attributable to PepsiCo per Common Share									Net Income Attributable to PepsiCo per Common Share
Basic	Basic	$	1.71	$	1.19	$	2.95	$	2.15	Basic	$	1.03	$	1.71	$	4.11	$	2.95
Diluted	Diluted	$	1.70	$	1.18	$	2.94	$	2.14	Diluted	$	1.03	$	1.70	$	4.09	$	2.94
Weighted-average common shares outstanding	Weighted-average common shares outstanding									Weighted-average common shares outstanding
Basic	Basic	1,382		1,387		1,381		1,389		Basic	1,382		1,382		1,383		1,381
Diluted	Diluted	1,388		1,393		1,387		1,395		Diluted	1,389		1,388		1,390		1,387

(a)In the 24 weeks ended June 11, 2022, we sold our Tropicana, Naked and other select juice brands to PAI Partners for approximately $3.5 billion in cash and a 39% noncontrolling interest in a newly formed joint venture (Tropicana JV) operating across North America and Europe (Juice Transaction). See Note 11 for further information.

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

Condensed Consolidated Statement of Comprehensive Income

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


		12 Weeks Ended				24 Weeks Ended					12 Weeks Ended				24 Weeks Ended
		6/12/2021		6/13/2020		6/12/2021		6/13/2020			6/11/2022		6/12/2021		6/11/2022		6/12/2021
Net income	Net income	$	2,372	$	1,658	$	4,095	$	3,009	Net income	$	1,446	$	2,372	$	5,719	$	4,095
Other comprehensive income/(loss), net of taxes:
Other comprehensive income, net of taxes:										Other comprehensive income, net of taxes:
Net currency translation adjustment	Net currency translation adjustment	268		(796)		399		(1,550)		Net currency translation adjustment	1,274		268		714		399
Net change on cash flow hedges	Net change on cash flow hedges	93		13		165		(48)		Net change on cash flow hedges	(102)		93		4		165
Net pension and retiree medical adjustments	Net pension and retiree medical adjustments	24		63		51		120		Net pension and retiree medical adjustments	(250)		24		(237)		51
Other	Other	2		(1)		2		0		Other	5		2		1		2
		387		(721)		617		(1,478)			927		387		482		617
Comprehensive income	Comprehensive income	2,759		937		4,712		1,531		Comprehensive income	2,373		2,759		6,201		4,712
Less: Comprehensive income attributable to noncontrolling interests	Less: Comprehensive income attributable to noncontrolling interests	14		12		23		25		Less: Comprehensive income attributable to noncontrolling interests	17		14		29		23
Comprehensive Income Attributable to PepsiCo	Comprehensive Income Attributable to PepsiCo	$	2,745	$	925	$	4,689	$	1,506	Comprehensive Income Attributable to PepsiCo	$	2,356	$	2,745	$	6,172	$	4,689

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

Condensed Consolidated Statement of Cash Flows

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


		24 Weeks Ended					24 Weeks Ended
		6/12/2021		6/13/2020			6/11/2022		6/12/2021
Operating Activities	Operating Activities					Operating Activities
Net income	Net income	$	4,095	$	3,009	Net income	$	5,719	$	4,095
Depreciation and amortization	Depreciation and amortization	1,213		1,122		Depreciation and amortization	1,195		1,213
Gain associated with the Juice Transaction						Gain associated with the Juice Transaction	(3,335)		—
Brand portfolio impairment charges						Brand portfolio impairment charges	465		—
Russia-Ukraine conflict charges						Russia-Ukraine conflict charges	1,406		—
Operating lease right-of-use asset amortization						Operating lease right-of-use asset amortization	223		220
Share-based compensation expense	Share-based compensation expense	144		101		Share-based compensation expense	156		144
Restructuring and impairment charges	Restructuring and impairment charges	77		63		Restructuring and impairment charges	75		77
Cash payments for restructuring charges	Cash payments for restructuring charges	(104)		(109)		Cash payments for restructuring charges	(82)		(104)
Inventory fair value adjustments and merger and integration charges		15		243
Cash payments for merger and integration charges		(14)		(89)
Acquisition and divestiture-related charges						Acquisition and divestiture-related charges	64		15
Cash payments for acquisition and divestiture-related charges						Cash payments for acquisition and divestiture-related charges	(34)		(14)
Pension and retiree medical plan expenses	Pension and retiree medical plan expenses	48		80		Pension and retiree medical plan expenses	139		48
Pension and retiree medical plan contributions	Pension and retiree medical plan contributions	(461)		(293)		Pension and retiree medical plan contributions	(214)		(461)
Deferred income taxes and other tax charges and credits	Deferred income taxes and other tax charges and credits	220		109		Deferred income taxes and other tax charges and credits	49		220

Tax payments related to the Tax Cuts and Jobs Act (TCJ Act)	Tax payments related to the Tax Cuts and Jobs Act (TCJ Act)	(309)		0		Tax payments related to the Tax Cuts and Jobs Act (TCJ Act)	(309)		(309)
Change in assets and liabilities:	Change in assets and liabilities:					Change in assets and liabilities:
Accounts and notes receivable	Accounts and notes receivable	(1,214)		(1,101)		Accounts and notes receivable	(1,753)		(1,214)
Inventories	Inventories	(810)		(827)		Inventories	(990)		(810)
Prepaid expenses and other current assets	Prepaid expenses and other current assets	(40)		(251)		Prepaid expenses and other current assets	(186)		(40)
Accounts payable and other current liabilities	Accounts payable and other current liabilities	(1,114)		(1,336)		Accounts payable and other current liabilities	(990)		(1,114)
Income taxes payable	Income taxes payable	516		448		Income taxes payable	608		516
Other, net	Other, net	78		293		Other, net	(325)		(142)
Net Cash Provided by Operating Activities	Net Cash Provided by Operating Activities	2,340		1,462		Net Cash Provided by Operating Activities	1,881		2,340

Investing Activities	Investing Activities					Investing Activities
Capital spending	Capital spending	(1,305)		(1,188)		Capital spending	(1,499)		(1,305)
Sales of property, plant and equipment	Sales of property, plant and equipment	22		18		Sales of property, plant and equipment	222		22
Acquisitions, net of cash acquired, and investments in noncontrolled affiliates	Acquisitions, net of cash acquired, and investments in noncontrolled affiliates	(22)		(5,649)		Acquisitions, net of cash acquired, and investments in noncontrolled affiliates	(29)		(22)
Divestitures and sales of investments in noncontrolled affiliates		120		4
Proceeds associated with the Juice Transaction						Proceeds associated with the Juice Transaction	3,456		—
Other divestitures and sales of investments in noncontrolled affiliates						Other divestitures and sales of investments in noncontrolled affiliates	15		120
Short-term investments, by original maturity:	Short-term investments, by original maturity:					Short-term investments, by original maturity:

More than three months - maturities	More than three months - maturities	1,135		0		More than three months - maturities	—		1,135

Three months or less, net	Three months or less, net	(67)		18		Three months or less, net	8		(67)
Other investing, net	Other investing, net	1		35		Other investing, net	(1)		1
Net Cash Used for Investing Activities		(116)		(6,762)
Net Cash Provided by/(Used for) Investing Activities						Net Cash Provided by/(Used for) Investing Activities	2,172		(116)

(Continued on following page)

Table of Contents

Condensed Consolidated Statement of Cash Flows (continued)

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)


		24 Weeks Ended					24 Weeks Ended
		6/12/2021		6/13/2020			6/11/2022		6/12/2021
Financing Activities	Financing Activities					Financing Activities
Proceeds from issuances of long-term debt		0		10,564

Payments of long-term debt	Payments of long-term debt	(1,696)		(752)		Payments of long-term debt	(1,652)		(1,696)
Debt redemptions						Debt redemptions	(1,550)		—
Short-term borrowings, by original maturity:	Short-term borrowings, by original maturity:					Short-term borrowings, by original maturity:
More than three months - proceeds	More than three months - proceeds	—		3,663		More than three months - proceeds	1,935		—
More than three months - payments	More than three months - payments	(397)		(1,176)		More than three months - payments	—		(397)
Three months or less, net	Three months or less, net	89		461		Three months or less, net	844		89

Cash dividends paid	Cash dividends paid	(2,842)		(2,677)		Cash dividends paid	(2,997)		(2,842)
Share repurchases - common	Share repurchases - common	(106)		(1,137)		Share repurchases - common	(699)		(106)

Proceeds from exercises of stock options	Proceeds from exercises of stock options	100		120		Proceeds from exercises of stock options	89		100
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted	Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted	(73)		(79)		Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted	(87)		(73)
Other financing	Other financing	(19)		(16)		Other financing	(15)		(19)
Net Cash (Used for)/Provided by Financing Activities		(4,944)		8,971
Net Cash Used for Financing Activities						Net Cash Used for Financing Activities	(4,132)		(4,944)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	Effect of exchange rate changes on cash and cash equivalents and restricted cash	12		(252)		Effect of exchange rate changes on cash and cash equivalents and restricted cash	(83)		12
Net (Decrease)/Increase in Cash and Cash Equivalents and Restricted Cash		(2,708)		3,419
Net Decrease in Cash and Cash Equivalents and Restricted Cash						Net Decrease in Cash and Cash Equivalents and Restricted Cash	(162)		(2,708)
Cash and Cash Equivalents and Restricted Cash, Beginning of Year	Cash and Cash Equivalents and Restricted Cash, Beginning of Year	8,254		5,570		Cash and Cash Equivalents and Restricted Cash, Beginning of Year	5,707		8,254
Cash and Cash Equivalents and Restricted Cash, End of Period	Cash and Cash Equivalents and Restricted Cash, End of Period	$	5,546	$	8,989	Cash and Cash Equivalents and Restricted Cash, End of Period	$	5,545	$	5,546

Supplemental Non-Cash Activity	Supplemental Non-Cash Activity					Supplemental Non-Cash Activity
Right-of-use assets obtained in exchange for lease obligations	Right-of-use assets obtained in exchange for lease obligations	$	319	$	302	Right-of-use assets obtained in exchange for lease obligations	$	428	$	319

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

Condensed Consolidated Balance Sheet

PepsiCo, Inc. and Subsidiaries

(in millions except per share amounts)


		(Unaudited)					(Unaudited)
		6/12/2021		12/26/2020			6/11/2022		12/25/2021
ASSETS	ASSETS					ASSETS
Current Assets	Current Assets					Current Assets
Cash and cash equivalents	Cash and cash equivalents	$	5,449	$	8,185	Cash and cash equivalents	$	5,405	$	5,596
Short-term investments	Short-term investments	328		1,366		Short-term investments	287		392

Accounts and notes receivable, less allowance: 6/21 - $170 and 12/20 - $201		9,722		8,404
Accounts and notes receivable, less allowance: 6/22 - $185 and 12/21 - $147						Accounts and notes receivable, less allowance: 6/22 - $185 and 12/21 - $147	10,498		8,680
Inventories:	Inventories:					Inventories:
Raw materials and packaging	Raw materials and packaging	2,081		1,720		Raw materials and packaging	2,403		1,898
Work-in-process	Work-in-process	381		205		Work-in-process	158		151
Finished goods	Finished goods	2,544		2,247		Finished goods	2,726		2,298
		5,006		4,172			5,287		4,347
Prepaid expenses and other current assets	Prepaid expenses and other current assets	1,092		874		Prepaid expenses and other current assets	1,156		980
Assets held for sale						Assets held for sale	—		1,788
Total Current Assets	Total Current Assets	21,597		23,001		Total Current Assets	22,633		21,783
Property, plant and equipment	Property, plant and equipment	47,404		46,340		Property, plant and equipment	47,902		46,828
Accumulated depreciation	Accumulated depreciation	(25,785)		(24,971)		Accumulated depreciation	(25,208)		(24,421)
Property, Plant and Equipment, net	Property, Plant and Equipment, net	21,619		21,369		Property, Plant and Equipment, net	22,694		22,407
Amortizable Intangible Assets, net	Amortizable Intangible Assets, net	1,686		1,703		Amortizable Intangible Assets, net	1,348		1,538
Goodwill	Goodwill	18,893		18,757		Goodwill	18,547		18,381
Other Indefinite-Lived Intangible Assets	Other Indefinite-Lived Intangible Assets	17,738		17,612		Other Indefinite-Lived Intangible Assets	15,743		17,127

Investments in Noncontrolled Affiliates	Investments in Noncontrolled Affiliates	2,774		2,792		Investments in Noncontrolled Affiliates	3,519		2,627
Deferred Income Taxes	Deferred Income Taxes	4,370		4,372		Deferred Income Taxes	4,345		4,310
Other Assets	Other Assets	3,708		3,312		Other Assets	4,274		4,204
Total Assets	Total Assets	$	92,385	$	92,918	Total Assets	$	93,103	$	92,377

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Current Liabilities	Current Liabilities					Current Liabilities
Short-term debt obligations	Short-term debt obligations	$	4,264	$	3,780	Short-term debt obligations	$	6,032	$	4,308
Accounts payable and other current liabilities	Accounts payable and other current liabilities	19,359		19,592		Accounts payable and other current liabilities	21,191		21,159
Liabilities held for sale						Liabilities held for sale	—		753
Total Current Liabilities	Total Current Liabilities	23,623		23,372		Total Current Liabilities	27,223		26,220
Long-Term Debt Obligations	Long-Term Debt Obligations	38,034		40,370		Long-Term Debt Obligations	33,247		36,026
Deferred Income Taxes	Deferred Income Taxes	4,625		4,284		Deferred Income Taxes	4,838		4,826
Other Liabilities	Other Liabilities	10,705		11,340		Other Liabilities	9,121		9,154
Total Liabilities	Total Liabilities	76,987		79,366		Total Liabilities	74,429		76,226
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies
PepsiCo Common Shareholders’ Equity	PepsiCo Common Shareholders’ Equity					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: 1,382 and 1,380 shares, respectively)		23		23
Common stock, par value 12/3¢ per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1,381 and 1,383 shares, respectively)						Common stock, par value 12/3¢ per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1,381 and 1,383 shares, respectively)	23		23
Capital in excess of par value	Capital in excess of par value	3,863		3,910		Capital in excess of par value	3,970		4,001
Retained earnings	Retained earnings	64,605		63,443		Retained earnings	67,763		65,165
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(14,859)		(15,476)		Accumulated other comprehensive loss	(14,416)		(14,898)
Repurchased common stock, in excess of par value (485 and 487 shares, respectively)		(38,333)		(38,446)
Repurchased common stock, in excess of par value (486 and 484 shares, respectively)						Repurchased common stock, in excess of par value (486 and 484 shares, respectively)	(38,787)		(38,248)
Total PepsiCo Common Shareholders’ Equity	Total PepsiCo Common Shareholders’ Equity	15,299		13,454		Total PepsiCo Common Shareholders’ Equity	18,553		16,043
Noncontrolling interests	Noncontrolling interests	99		98		Noncontrolling interests	121		108
Total Equity	Total Equity	15,398		13,552		Total Equity	18,674		16,151
Total Liabilities and Equity	Total Liabilities and Equity	$	92,385	$	92,918	Total Liabilities and Equity	$	93,103	$	92,377

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

Condensed Consolidated Statement of Equity

PepsiCo, Inc. and Subsidiaries

(in millions, except per share amounts, unaudited)


		12 Weeks Ended						24 Weeks Ended							12 Weeks Ended						24 Weeks Ended
		6/12/2021			6/13/2020			6/12/2021			6/13/2020				6/11/2022			6/12/2021			6/11/2022			6/12/2021
		Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount			Shares	Amount		Shares	Amount		Shares	Amount		Shares	Amount

Common Stock	Common Stock													Common Stock
Balance, beginning of period	Balance, beginning of period	1,382	$	23	1,389	$	23	1,380	$	23	1,391	$	23	Balance, beginning of period	1,384	$	23	1,382	$	23	1,383	$	23	1,380	$	23
Change in repurchased common stock	Change in repurchased common stock	0	0		(4)	0		2	0		(6)	0		Change in repurchased common stock	(3)	—		—	—		(2)	—		2	—
Balance, end of period	Balance, end of period	1,382	23		1,385	23		1,382	23		1,385	23		Balance, end of period	1,381	23		1,382	23		1,381	23		1,382	23
Capital in Excess of Par Value	Capital in Excess of Par Value													Capital in Excess of Par Value
Balance, beginning of period	Balance, beginning of period		3,800			3,741			3,910			3,886		Balance, beginning of period		3,893			3,800			4,001			3,910
Share-based compensation expense	Share-based compensation expense		65			39			145			101		Share-based compensation expense		76			65			159			145

Stock option exercises, RSUs and PSUs converted	Stock option exercises, RSUs and PSUs converted		0			(5)			(119)			(136)		Stock option exercises, RSUs and PSUs converted		3			—			(103)			(119)
Withholding tax on RSUs and PSUs converted	Withholding tax on RSUs and PSUs converted		(2)			(3)			(73)			(79)		Withholding tax on RSUs and PSUs converted		(2)			(2)			(87)			(73)

Balance, end of period	Balance, end of period		3,863			3,772			3,863			3,772		Balance, end of period		3,970			3,863			3,970			3,863
Retained Earnings	Retained Earnings													Retained Earnings
Balance, beginning of period	Balance, beginning of period		63,740			61,920			63,443			61,946		Balance, beginning of period		67,934			63,740			65,165			63,443
Cumulative effect of accounting changes			0			0			0			(34)

Net income attributable to PepsiCo	Net income attributable to PepsiCo		2,358			1,646			4,072			2,984		Net income attributable to PepsiCo		1,429			2,358			5,690			4,072
Cash dividends declared – common (a)	Cash dividends declared – common (a)		(1,493)			(1,421)			(2,910)			(2,751)		Cash dividends declared – common (a)		(1,600)			(1,493)			(3,092)			(2,910)

Balance, end of period	Balance, end of period		64,605			62,145			64,605			62,145		Balance, end of period		67,763			64,605			67,763			64,605
Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss													Accumulated Other Comprehensive Loss
Balance, beginning of period	Balance, beginning of period		(15,246)			(15,057)			(15,476)			(14,300)		Balance, beginning of period		(15,343)			(15,246)			(14,898)			(15,476)
Other comprehensive income/(loss) attributable to PepsiCo			387			(721)			617			(1,478)
Other comprehensive income attributable to PepsiCo														Other comprehensive income attributable to PepsiCo		927			387			482			617
Balance, end of period	Balance, end of period		(14,859)			(15,778)			(14,859)			(15,778)		Balance, end of period		(14,416)			(14,859)			(14,416)			(14,859)
Repurchased Common Stock	Repurchased Common Stock													Repurchased Common Stock
Balance, beginning of period	Balance, beginning of period	(485)	(38,370)		(478)	(37,162)		(487)	(38,446)		(476)	(36,769)		Balance, beginning of period	(483)	(38,305)		(485)	(38,370)		(484)	(38,248)		(487)	(38,446)
Share repurchases	Share repurchases	0	0		(5)	(557)		(1)	(106)		(9)	(1,159)		Share repurchases	(3)	(518)		—	—		(4)	(731)		(1)	(106)
Stock option exercises, RSUs and PSUs converted	Stock option exercises, RSUs and PSUs converted	0	37		1	48		3	219		3	257		Stock option exercises, RSUs and PSUs converted	—	36		—	37		2	192		3	219

Balance, end of period	Balance, end of period	(485)	(38,333)		(482)	(37,671)		(485)	(38,333)		(482)	(37,671)		Balance, end of period	(486)	(38,787)		(485)	(38,333)		(486)	(38,787)		(485)	(38,333)
Total PepsiCo Common Shareholders’ Equity	Total PepsiCo Common Shareholders’ Equity		15,299			12,491			15,299			12,491		Total PepsiCo Common Shareholders’ Equity		18,553			15,299			18,553			15,299
Noncontrolling Interests	Noncontrolling Interests													Noncontrolling Interests
Balance, beginning of period	Balance, beginning of period		106			94			98			82		Balance, beginning of period		118			106			108			98
Net income attributable to noncontrolling interest	Net income attributable to noncontrolling interest		14			12			23			25		Net income attributable to noncontrolling interest		17			14			29			23
Distributions to noncontrolling interests	Distributions to noncontrolling interests		(19)			(15)			(20)			(15)		Distributions to noncontrolling interests		(14)			(19)			(14)			(20)

Acquisitions			0			6			0			6

Other, net	Other, net		(2)			(1)			(2)			(2)		Other, net		—			(2)			(2)			(2)
Balance, end of period	Balance, end of period		99			96			99			96		Balance, end of period		121			99			121			99
Total Equity	Total Equity		$	15,398		$	12,587		$	15,398		$	12,587	Total Equity		$	18,674		$	15,398		$	18,674		$	15,398

(a)Cash dividends declared per common share were ~~$1.075~~$1.15 and ~~$1.0225~~$1.075 for the 12 weeks ended June 11, 2022 and June 12, 2021, ~~and June 13, 2020,~~ respectively and ~~$2.0975~~$2.225 and ~~$1.9775~~$2.0975 for the 24 weeks ended June ~~12, 2021~~11, 2022 and June ~~13, 2020,~~12, 2021, respectively.

See accompanying notes to the condensed consolidated financial statements.

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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 ~~26, 2020~~25, 2021 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 ~~26, 2020 (2020~~25, 2021 (2021 Form 10-K). This report should be read in conjunction with our ~~2020~~2021 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 24 weeks ended June ~~12, 2021~~11, 2022 are not necessarily indicative of the results expected for any future period or the full year.

While our financial results in the United States and Canada (North America) are reported on a 12-week basis, substantially all of our international operations ~~report~~reported on a monthly calendar basis ~~for which~~prior to the fourth quarter of 2021. Beginning in the fourth quarter of 2021, all of our international operations reported on a monthly calendar basis. This change did not have a material impact on our condensed consolidated financial statements. For our international operations, the months of March, April and May are reflected in our results for the 12 weeks ended June ~~12, 2021~~11, 2022, and the months of January through May are reflected in our results for the 24 weeks ended June ~~12, 2021.~~11, 2022.

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. ~~The~~Additionally, the business and economic uncertainty resulting from the novel coronavirus (COVID-19) pandemic and the Russia-Ukraine conflict 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. 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.

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.

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Our Divisions

We are organized into 7 reportable segments (also referred to as divisions), as follows:

1)Frito-Lay North America (FLNA), which includes our branded convenient food ~~and snack~~ 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, ~~businesses~~ in the United States and Canada;

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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 ~~food~~ and ~~snack~~convenient food businesses in Latin America;

5)Europe, which includes all of our beverage ~~food~~ and ~~snack~~convenient food businesses in Europe;

6)Africa, Middle East and South Asia (AMESA), which includes all of our beverage ~~food~~ and ~~snack~~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 ~~food~~ and ~~snack~~convenient food businesses in Asia Pacific, Australia and New Zealand, and China region.

Net revenue of each division is as follows:


		12 Weeks Ended				24 Weeks Ended					12 Weeks Ended				24 Weeks Ended
		6/12/2021		6/13/2020		6/12/2021		6/13/2020			6/11/2022		6/12/2021		6/11/2022		6/12/2021
FLNA	FLNA	$	4,552	$	4,273	$	8,788	$	8,347	FLNA	$	5,181	$	4,552	$	10,020	$	8,788
QFNA	QFNA	575		664		1,221		1,298		QFNA	675		575		1,388		1,221
PBNA	PBNA	6,156		4,970		11,230		9,808		PBNA	6,120		6,156		11,473		11,230
LatAm	LatAm	1,967		1,567		3,209		2,877		LatAm	2,415		1,967		3,889		3,209
Europe	Europe	3,286		2,725		5,081		4,564		Europe	3,023		3,286		4,820		5,081
AMESA ~~(a)~~	AMESA ~~(a)~~	1,602		983		2,485		1,614		AMESA ~~(a)~~	1,696		1,602		2,700		2,485
APAC ~~(b)~~	APAC ~~(b)~~	1,079		763		2,023		1,318		APAC ~~(b)~~	1,115		1,079		2,135		2,023
Total	Total	$	19,217	$	15,945	$	34,037	$	29,826	Total	$	20,225	$	19,217	$	36,425	$	34,037

~~(a)~~Table of Contents~~The increase primarily reflects our acquisition of Pioneer Food Group Ltd. (Pioneer Foods). See Note 12 for further information.~~

~~(b)The increase primarily reflects our acquisition of Hangzhou Haomusi Food Co., Ltd. (Be & Cheery). See Note 12 for further information.~~

Our primary performance obligation is the distribution and sales of beverage and convenient food ~~and snack~~ products to our customers. The following tables reflect the approximate percentage of net revenue generated between our beverage business and our convenient food ~~and snack~~ business for each of our international divisions, as well as our consolidated net revenue:


		12 Weeks Ended									12 Weeks Ended
		6/12/2021				6/13/2020					6/11/2022				6/12/2021
		Beverage(a)		Food/Snack		Beverage(a)		Food/Snack			Beverages(a)		Convenient Foods		Beverages(a)		Convenient Foods
LatAm	LatAm	10	%	90	%	10	%	90	%	LatAm	10	%	90	%	10	%	90	%
Europe	Europe	55	%	45	%	50	%	50	%	Europe	50	%	50	%	55	%	45	%
AMESA	AMESA	35	%	65	%	40	%	60	%	AMESA	35	%	65	%	35	%	65	%
APAC	APAC	25	%	75	%	25	%	75	%	APAC	25	%	75	%	25	%	75	%
PepsiCo	PepsiCo	45	%	55	%	45	%	55	%	PepsiCo	45	%	55	%	45	%	55	%

~~Table of Contents~~


		24 Weeks Ended									24 Weeks Ended
		6/12/2021				6/13/2020					6/11/2022				6/12/2021
		Beverage(a)		Food/Snack		Beverage(a)		Food/Snack			Beverages(a)		Convenient Foods		Beverages(a)		Convenient Foods
LatAm	LatAm	10	%	90	%	10	%	90	%	LatAm	10	%	90	%	10	%	90	%
Europe	Europe	55	%	45	%	55	%	45	%	Europe	50	%	50	%	55	%	45	%
AMESA	AMESA	30	%	70	%	35	%	65	%	AMESA	30	%	70	%	30	%	70	%
APAC	APAC	20	%	80	%	25	%	75	%	APAC	20	%	80	%	20	%	80	%
PepsiCo	PepsiCo	45	%	55	%	45	%	55	%	PepsiCo	45	%	55	%	45	%	55	%

(a)Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe ~~segments,~~divisions, is over 35% of our consolidated net revenue in the 12 and 24 weeks ended June 11, 2022, and approximately 40% of our consolidated net revenue in ~~each of~~ the 12 and 24 weeks ended June 12, ~~2021 and June 13, 2020.~~2021. 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 of each division is as follows:


		12 Weeks Ended				24 Weeks Ended					12 Weeks Ended				24 Weeks Ended
		6/12/2021		6/13/2020		6/12/2021		6/13/2020			6/11/2022		6/12/2021		6/11/2022		6/12/2021
FLNA	FLNA	$	1,382	$	1,278	$	2,622	$	2,480	FLNA	$	1,448	$	1,382	$	2,744	$	2,622
QFNA	QFNA	128		196		278		346		QFNA	135		128		294		278
PBNA		809		397		1,175		694
PBNA (a) (b)										PBNA (a) (b)	651		809		4,085		1,175
LatAm(c)	LatAm(c)	356		219		574		450		LatAm(c)	420		356		743		574
Europe		405		351		536		497
Europe (a) (d)										Europe (a) (d)	(797)		405		(933)		536
AMESA	AMESA	256		59		394		193		AMESA	290		256		470		394
APAC	APAC	192		189		400		331		APAC	206		192		421		400
Total divisions	Total divisions	3,528		2,689		5,979		4,991		Total divisions	2,353		3,528		7,824		5,979
Corporate unallocated expenses (a)		(399)		(370)		(538)		(748)
Corporate unallocated expenses (e) (f)										Corporate unallocated expenses (e) (f)	(276)		(399)		(480)		(538)
Total	Total	$	3,129	$	2,319	$	5,441	$	4,243	Total	$	2,077	$	3,129	$	7,344	$	5,441

(a)In the 24 weeks ended June 11, 2022, we recorded a gain of $3.0 billion and $298 million in our PBNA and Europe divisions, respectively, associated with the Juice Transaction. The total after-tax amount was $2.9 billion or $2.07 per share. See Note 11 for further information.

(b)In the 12 and 24 weeks ended June 11, 2022, we decided to terminate our agreement with Vital Pharmaceuticals, Inc. (Vital) to distribute Bang Energy drinks in our PBNA division. As a result, we recognized pre-tax impairment and other charges (Brand Portfolio Impairment Charges) of $141 million ($107 million after-tax or $0.08 per share) primarily related to the write-off of distribution rights, with $8 million recorded in cost of sales, $7 million recorded in selling, general and administrative expenses and $126 million recorded in impairment of intangible assets. See Note 3 for further information.

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(c)In the 12 and 24 weeks ended June 11, 2022, we made the decision to sell or discontinue certain non-strategic brands in our LatAm division. As a result, we recognized pre-tax impairment and other charges (Brand Portfolio Impairment Charges) of $83 million ($56 million after-tax or $0.04 per share) primarily related to property, plant and equipment and intangible assets, with $47 million recorded in selling, general and administrative expenses and $36 million recorded in impairment of intangible assets. See Note 3 for further information.

(d)In the 24 weeks ended June 11, 2022, we recorded pre-tax impairment charges (Brand Portfolio Impairment Charges) of $241 million ($193 million after-tax or $0.14 per share) in impairment of intangible assets related to the discontinuation or repositioning of certain juice and dairy brands in Russia. See Note 3 for further information. Also see below for charges taken as a result of the Russia-Ukraine conflict.

(e)In the 12 weeks ended June 11, 2022, we recorded a pre-tax loss on certain equity investments of $56 million ($42 million after-tax or $0.03 per share) in selling, general and administrative expenses. In the 24 weeks ended June 11, 2022, we recorded a pre-tax loss on certain equity investments of $64 million ($48 million after-tax or $0.03 per share) in selling, general and administrative expenses.

(f)In the 12 weeks ended June 12, 2021, we sold our short-term investment in a publicly traded company and recorded a pre-tax loss on the sale of $39 million ($30 million after-tax or $0.02 per share), net of discounts, in selling, general and administrative expenses. The 24 weeks ended June 12, 2021 include a pre-tax net gain of $69 million ($52 million after-tax or $0.04 per share) associated with this sale.

~~Operating profit includes certain~~A summary of pre-tax charges taken in our Europe division as a result of the ~~COVID-19 pandemic. These pre-tax charges by division are~~Russia-Ukraine conflict is as follows:

12 Weeks Ended 6/12/2021
Allowances for Expected Credit Losses(a)
Upfront Payments to Customers(b)
Inventory Write-Downs and Product Returns
Employee Compensation Expense(c)
Employee Protection Costs(d)
Other(e)
Total
FLNA $ (4) $ 0 $ 0 $ 11 $ 7 $ 0 $ 14
QFNA 0 0 0 1 0 0 1
PBNA (9) (6) 0 7 4 (7) (11)
LatAm 0 0 1 12 3 1 17
Europe 0 0 0 5 3 1 9
AMESA 0 0 0 0 1 2 3
APAC 0 0 0 0 1 1 2
Total $ (13) $ (6) $ 1 $ 36 $ 19 $ (2) $ 35



	6/11/2022
	12 Weeks Ended		24 Weeks Ended
Impairment charges related to intangible assets (a)	$	1,197	$	1,198
Impairment charges related to property, plant and equipment	—		123

(Recovery of)/allowance for expected credit losses (b)	(11)		26
(Recovery of)/allowance for inventory write-downs (b)	(8)		25



Other (b)	(13)		34
Total	$	1,165	$	1,406
After-tax amount	$	927	$	1,168
Impact on net income attributable to PepsiCo per common share	$	(0.67)	$	(0.84)

~~Table of Contents~~

12 Weeks Ended 6/13/2020
Allowances for Expected Credit Losses(a)
Upfront Payments to Customers(b)
Inventory Write-Downs and Product Returns(f)
Employee Compensation Expense(c)
Employee Protection Costs(d)
Other(e)
Total
FLNA $ (2) $ 0 $ 4 $ 100 $ 33 $ 0 $ 135
QFNA 0 0 0 6 1 0 7
PBNA 4 2 7 84 31 9 137
LatAm 1 0 6 16 8 3 34
Europe 0 1 10 9 8 17 45
AMESA 1 0 1 7 4 4 17
APAC 0 0 0 2 1 0 3
Total $ 4 $ 3 $ 28 $ 224 $ 86 $ 33 $ 378

24 Weeks Ended 6/12/2021
Allowances for Expected Credit Losses(a)
Upfront Payments to Customers(b)
Inventory Write-Downs and Product Returns(f)
Employee Compensation Expense(c)
Employee Protection Costs(d)
Other(e)
Total
FLNA $ (8) $ 0 $ 0 $ 29 $ 16 $ 1 $ 38
QFNA 0 0 0 2 1 0 3
PBNA (13) (5) 0 19 9 (8) 2
LatAm 0 0 1 24 5 2 32
Europe 0 0 0 8 6 1 15
AMESA 0 0 (2) 0 1 3 2
APAC 0 0 0 0 1 3 4
Total $ (21) $ (5) $ (1) $ 82 $ 39 $ 2 $ 96

24 Weeks Ended 6/13/2020
Allowances for Expected Credit Losses(a)
Upfront Payments to Customers(b)
Inventory Write-Downs and Product Returns(f)
Employee Compensation Expense(c)
Employee Protection Costs(d)
Other(e)
Total
FLNA $ 19 $ 0 $ 7 $ 100 $ 33 $ 3 $ 162
QFNA 2 0 0 6 1 0 9
PBNA 45 46 29 84 31 10 245
LatAm 1 0 6 16 8 3 34
Europe 4 1 10 9 8 17 49
AMESA 1 0 1 7 4 4 17
APAC 0 0 1 2 1 1 5
Total $ 72 $ 47 $ 54 $ 224 $ 86 $ 38 $ 521


	6/11/2022
	12 Weeks Ended		24 Weeks Ended
Cost of sales (b)	$	(7)	$	133
Selling, general and administrative expenses (b)	(25)		75
Impairment of intangible assets (a)	1,197		1,198
Total	$	1,165	$	1,406

(a)~~Reflects the expected impact of the global economic uncertainty caused by COVID-19, leveraging estimates of creditworthiness and projections of default and recovery rates~~See Note 3 for ~~certain of~~further information. For information on our ~~customers, including foodservice and vending businesses. Income amounts represent reductions~~policies for indefinite-lived intangible assets, refer to Note 2 to our consolidated financial statements in ~~the previously recorded reserves due to improved projected default rates and lower at-risk receivable balances.~~our 2021 Form 10-K.

(b)~~Relates to promotional spending for which benefit is not expected to be received.~~ Income amounts ~~represent reductions~~primarily relate to changes in ~~previously recorded reserves due~~estimates.

A summary of pre-tax charges related to ~~improved projected default rates and lower overall advance balances.~~the impairment of intangible assets is as follows:


	6/11/2022
	12 Weeks Ended		24 Weeks Ended
Russia-Ukraine conflict impairment charges	$	1,197	$	1,198
Brand Portfolio Impairment Charges	162		403
Total	$	1,359	$	1,601

~~(c)Includes incremental frontline incentive pay, crisis child care and other leave benefits and labor costs.~~

~~(d)Includes costs associated with personal protective equipment, temperature scans, cleaning and other sanitization services.~~

~~(e)Includes reserves for property, plant and equipment, donations of cash and product and other costs. Income amounts represent adjustments for changes in estimates of previously recorded amounts.~~

~~(f)Includes a reserve for product returns of $9 million and $16 million in the 12 and 24 weeks ended June 13, 2020, respectively. Income amount represents a true-up of inventory reserves.~~

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~~Note 2 - Recently Issued Accounting Pronouncements~~

~~Adopted~~

~~In 2019,~~Operating profit includes certain pre-tax charges taken as a result of the ~~Financial Accounting Standards Board issued guidance to simplify the accounting for income taxes. The guidance~~COVID-19 pandemic, primarily ~~addresses how to (1) recognize a deferred tax liability after we transition to or from the equity method of accounting, (2) evaluate if a step-up in the tax basis of goodwill is~~ related to ~~a business combination or is a separate transaction, (3) recognize all of the effects of a change in tax law in the period of enactment, including adjusting the estimated annual tax rate,~~incremental employee compensation costs, such as certain leave benefits and ~~(4) include the~~labor costs, and employee protection costs. These pre-tax charges by division are as follows:


	12 Weeks Ended				24 Weeks Ended
	6/11/2022		6/12/2021		6/11/2022		6/12/2021
FLNA	$	5	$	14	$	19	$	38
QFNA	—		1		1		3
PBNA (a)	1		(11)		11		2
LatAm	4		17		10		32
Europe	2		9		3		15
AMESA	1		3		3		2
APAC	11		2		13		4
Total	$	24	$	35	$	60	$	96

(a)Income amount ~~of tax based on income in the income tax provision~~primarily relates to allowances for expected credit losses and any incremental amount as a tax not based on income for hybrid tax regimes. We adopted the guidance in the first quarter of 2021. The adoption did not have a material impact on our condensed consolidated financial statements or related disclosures.upfront payments to customers, due to improved projected default rates and lower at-risk balances.

Note 32 - 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 will leverage 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, ~~to date,~~in 2021, we expanded and extended the plan through the end of 2026 to take advantage of additional opportunities within the initiatives described above. ~~We now~~As a result, we expect to incur pre-tax charges of approximately $3.15 billion, including cash expenditures of approximately $2.4 ~~billion, as compared to our previous estimate of pre-tax charges of approximately $2.5 billion, which included cash expenditures of approximately $1.6~~ billion. These pre-tax charges are expected to consist of approximately ~~65%~~55% of severance and other employee-related costs, 10% for asset impairments (all non-cash) resulting from plant closures and related actions, and ~~25%~~35% for other costs associated with the implementation of our initiatives.

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

FLNA QFNA PBNA LatAm Europe AMESA APAC Corporate
Expected pre-tax charges 15 % 1 % 25 % 10 % 30 % 5 % 3 % 11 %


	FLNA		QFNA		PBNA		LatAm		Europe		AMESA		APAC		Corporate
Expected pre-tax charges	15	%	1	%	25	%	10	%	25	%	5	%	4	%	15	%

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


		12 Weeks Ended				24 Weeks Ended					12 Weeks Ended				24 Weeks Ended
		6/12/2021		6/13/2020		6/12/2021		6/13/2020			6/11/2022		6/12/2021		6/11/2022		6/12/2021
Cost of sales	Cost of sales	$	2	$	1	$	4	$	3	Cost of sales	$	—	$	2	$	5	$	4
Selling, general and administrative expenses	Selling, general and administrative expenses	33		23		68		53		Selling, general and administrative expenses	45		33		67		68
Other pension and retiree medical benefits (income)/expense (a)		(1)		1		5		7
Other pension and retiree medical benefits expense/(income)										Other pension and retiree medical benefits expense/(income)	3		(1)		3		5
Total restructuring and impairment charges	Total restructuring and impairment charges	$	34	$	25	$	77	$	63	Total restructuring and impairment charges	$	48	$	34	$	75	$	77
After-tax amount	After-tax amount	$	29	$	21	$	64	$	53	After-tax amount	$	40	$	29	$	61	$	64
Net income attributable to PepsiCo per common share		$	(0.02)	$	(0.02)	$	(0.05)	$	(0.04)
Impact on net income attributable to PepsiCo per common share										Impact on net income attributable to PepsiCo per common share	$	(0.03)	$	(0.02)	$	(0.04)	$	(0.05)

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

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		12 Weeks Ended				24 Weeks Ended				Plan to Date			12 Weeks Ended				24 Weeks Ended				Plan to Date
		6/12/2021		6/13/2020		6/12/2021		6/13/2020		through 6/12/2021			6/11/2022		6/12/2021		6/11/2022		6/12/2021		through 6/11/2022
FLNA	FLNA	$	3	$	2	$	18	$	7	$	154	FLNA	$	3	$	3	$	6	$	18	$	170
QFNA	QFNA	0		0		0		1		12		QFNA	—		—		—		—		12
PBNA	PBNA	1		0		5		3		143		PBNA	2		1		5		5		163
LatAm	LatAm	6		4		8		9		110		LatAm	8		6		14		8		153
Europe	Europe	15		8		26		16		179		Europe	12		15		19		26		253
AMESA	AMESA	3		5		4		7		59		AMESA	3		3		5		4		75
APAC	APAC	1		3		1		3		55		APAC	3		1		4		1		65
Corporate	Corporate	6		2		10		10		100		Corporate	14		6		19		10		158
		35		24		72		56		812			45		35		72		72		1,049
Other pension and retiree medical benefits (income)/expense (a)		(1)		1		5		7		62
Other pension and retiree medical benefits expense/(income)												Other pension and retiree medical benefits expense/(income)	3		(1)		3		5		70
Total	Total	$	34	$	25	$	77	$	63	$	874	Total	$	48	$	34	$	75	$	77	$	1,119

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


		12 Weeks Ended				24 Weeks Ended				Plan to Date			12 Weeks Ended				24 Weeks Ended				Plan to Date
		6/12/2021		6/13/2020		6/12/2021		6/13/2020		through 6/12/2021			6/11/2022		6/12/2021		6/11/2022		6/12/2021		through 6/11/2022
Severance and other employee costs	Severance and other employee costs	$	15	$	2	$	49	$	24	$	493	Severance and other employee costs	$	20	$	15	$	31	$	49	$	595
Asset impairments	Asset impairments	1		4		1		5		126		Asset impairments	—		1		—		1		157
Other costs	Other costs	18		19		27		34		255		Other costs	28		18		44		27		367
Total	Total	$	34	$	25	$	77	$	63	$	874	Total	$	48	$	34	$	75	$	77	$	1,119

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 24 weeks ended June ~~12, 2021~~11, 2022 is as follows:

Severance and Other Employee Costs Asset
Impairments Other Costs Total
Liability as of December 26, 2020 $ 122 $ 0 $ 5 $ 127
2021 restructuring charges 49 1 27 77
Cash payments (75) 0 (29) (104)
Non-cash charges and translation (6) (1) 0 (7)
Liability as of June 12, 2021 $ 90 $ 0 $ 3 $ 93


	Severance and Other Employee Costs		Other Costs		Total
Liability as of December 25, 2021	$	64	$	7	$	71
2022 restructuring charges	31		44		75
Cash payments	(37)		(45)		(82)
Non-cash charges and translation	(3)		(1)		(4)
Liability as of June 11, 2022	$	55	$	5	$	60

Substantially all of the restructuring accrual at June ~~12, 2021~~11, 2022 is expected to be paid by the end of ~~2021.~~2022.

Other Productivity Initiatives

There were 0no 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 other impairment charges, see Notes 1 and 3 for Brand Portfolio Impairment Charges and Russia-Ukraine Conflict Charges.

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Note 43 - Intangible Assets

Indefinite-lived intangible assets are not amortized and are assessed for impairment at least annually, using either a qualitative or quantitative approach. We perform this annual assessment during our third quarter, or more frequently if circumstances indicate that the carrying value may not be recoverable. Where we use the qualitative assessment, first we determine if, based on qualitative factors, it is more likely than not that an impairment exists. If the qualitative assessment indicates that it is more likely than not that an impairment exists, then a quantitative assessment is performed. In the quantitative assessment for indefinite-lived intangible assets, an assessment is performed to determine the fair value of the indefinite-lived intangible asset. Estimated fair value is determined using discounted cash flows and requires an analysis of several estimates including future cash flows or income consistent with management’s strategic business plans, annual sales growth rates, perpetuity growth assumptions and the selection of assumptions underlying a discount rate (weighted-average cost of capital) based on market data available at the time. Significant management judgment is necessary to estimate the impact of competitive operating, macroeconomic and other factors (including those related to the Russia-Ukraine conflict) to estimate future levels of sales, operating profit or cash flows. All assumptions used in our impairment evaluations for indefinite-lived intangible assets, such as forecasted growth rates (including perpetuity growth assumptions) and weighted-average cost of capital, are based on the best available market information and are consistent with our internal forecasts and operating plans. A deterioration in these assumptions could adversely impact our results.

During the 12 weeks ended June 11, 2022, macroeconomic factors, sanctions and other regulations as a result of the Russia-Ukraine conflict indicated a material deterioration of the significant inputs used to determine the fair value of our indefinite-lived intangible assets in Russia, primarily assumptions underlying the weighted-average cost of capital. These factors required us to perform a quantitative assessment, despite the absence of a material adverse impact on these assets’ financial performance (e.g., sales, operating profit, cash flows).

The fair value of our indefinite-lived intangible assets in Russia was estimated using discounted cash flows under the income approach, which we consider to be a Level 3 measurement. We determined that the carrying value exceeds the fair value, with the decrease in the fair value primarily attributable to a significant increase in the weighted-average cost of capital, which reflects the macroeconomic uncertainty in Russia. As a result of the quantitative assessment, in the 12 and 24 weeks ended June 11, 2022, we recorded pre-tax impairment charges of $1.2 billion ($958 million after-tax or $0.69 per share) in impairment of intangible assets, related to our juice and dairy brands in Russia in our Europe division. See Note 1 for further information.

During the 24 weeks ended June 11, 2022, we discontinued or repositioned certain juice and dairy brands in Russia in our Europe division. As a result, we recognized pre-tax impairment charges (Brand Portfolio Impairment Charges) of $241 million ($193 million after-tax or $0.14 per share) in impairment of intangible assets, primarily related to indefinite-lived intangible assets. In light of the current political and economic environment, we will continue to review and analyze our brand portfolio worldwide. See Note 1 for further information.

For further information on our policies for indefinite-lived intangible assets, refer to Note 2 to our consolidated financial statements in our 2021 Form 10-K.

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A summary of our amortizable intangible assets is as follows:


		6/12/2021						12/26/2020							6/11/2022						12/25/2021
		Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net			Gross		Accumulated Amortization		Net		Gross		Accumulated Amortization		Net
Acquired franchise rights(a)	Acquired franchise rights(a)	$	989	$	(183)	$	806	$	976	$	(173)	$	803	Acquired franchise rights(a)	$	851	$	(196)	$	655	$	976	$	(187)	$	789
Customer relationships	Customer relationships	656		(220)		436		642		(204)		438		Customer relationships	617		(243)		374		623		(227)		396
Brands	Brands	1,354		(1,116)		238		1,348		(1,099)		249		Brands	1,119		(983)		136		1,151		(989)		162
Other identifiable intangibles	Other identifiable intangibles	475		(269)		206		474		(261)		213		Other identifiable intangibles	444		(261)		183		451		(260)		191
Total	Total	$	3,474	$	(1,788)	$	1,686	$	3,440	$	(1,737)	$	1,703	Total	$	3,031	$	(1,683)	$	1,348	$	3,201	$	(1,663)	$	1,538

(a)Decrease is primarily due to the write-off of our distribution rights for Bang Energy drinks. Subsequent to June 11, 2022, we came to an agreement with Vital to terminate the distribution agreement. See Note 1 for further information.

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


		Balance 12/26/2020		Acquisitions		Translation and Other		Balance 6/12/2021			Balance 12/25/2021		Impairment			Translation and Other		Balance 6/11/2022

FLNA ~~(a)~~	FLNA ~~(a)~~														FLNA ~~(a)~~
Goodwill	Goodwill	$	465	$	(8)	$	9	$	466	Goodwill	$	458	$	—		$	1	$	459
Brands	Brands	340		0		1		341		Brands	340		—			—		340
Total	Total	805		(8)		10		807		Total	798		—			1		799
QFNA	QFNA									QFNA
Goodwill	Goodwill	189		0		0		189		Goodwill	189		—			—		189
Total	Total	189		0		0		189		Total	189		—			—		189
PBNA ~~(b)~~	PBNA ~~(b)~~									PBNA ~~(b)~~
Goodwill	Goodwill	12,189		(2)		30		12,217		Goodwill	11,974		—			1		11,975
Reacquired franchise rights	Reacquired franchise rights	7,107		0		51		7,158		Reacquired franchise rights	7,107		—			6		7,113
Acquired franchise rights	Acquired franchise rights	1,536		0		11		1,547		Acquired franchise rights	1,538		—			—		1,538
Brands (c)		3,122		0		(324)		2,798
Brands										Brands	2,508		—			—		2,508
Total	Total	23,954		(2)		(232)		23,720		Total	23,127		—			7		23,134
LatAm	LatAm									LatAm
Goodwill	Goodwill	458		0		(7)		451		Goodwill	433		—			27		460
Brands		108		0		(3)		105
Brands (a)										Brands (a)	100		(29)			10		81
Total	Total	566		—		(10)		556		Total	533		(29)			37		541
Europe(b)	Europe(b)									Europe(b)
Goodwill	Goodwill	3,806		0		35		3,841		Goodwill	3,700		—			159		3,859
Reacquired franchise rights	Reacquired franchise rights	496		0		2		498		Reacquired franchise rights	441		—			4		445
Acquired franchise rights	Acquired franchise rights	172		0		(2)		170		Acquired franchise rights	158		—			(8)		150
Brands (c)	Brands (c)	4,072		0		333		4,405		Brands (c)	4,254		(1,420)			67		2,901
Total	Total	8,546		0		368		8,914		Total	8,553		(1,420)			222		7,355
AMESA ~~(d)~~	AMESA ~~(d)~~									AMESA ~~(d)~~
Goodwill	Goodwill	1,096		(2)		65		1,159		Goodwill	1,063		—			2		1,065
Brands	Brands	214		0		22		236		Brands	205		—			4		209
Total	Total	1,310		(2)		87		1,395		Total	1,268		—			6		1,274
APAC ~~(e)~~	APAC ~~(e)~~									APAC ~~(e)~~
Goodwill	Goodwill	554		3		13		570		Goodwill	564		—			(24)		540
Brands (c)		445		0		35		480
Brands										Brands	476		—			(18)		458
Total	Total	999		3		48		1,050		Total	1,040		—			(42)		998

Total goodwill	Total goodwill	18,757		(9)		145		18,893		Total goodwill	18,381		—			166		18,547
Total reacquired franchise rights	Total reacquired franchise rights	7,603		0		53		7,656		Total reacquired franchise rights	7,548		—			10		7,558
Total acquired franchise rights	Total acquired franchise rights	1,708		0		9		1,717		Total acquired franchise rights	1,696		—			(8)		1,688
Total brands	Total brands	8,301		0		64		8,365		Total brands	7,883		(1,449)			63		6,497
Total	Total	$	36,369	$	(9)	$	271	$	36,631	Total	$	35,508	$	(1,449)		$	231	$	34,290

(a)~~The change in acquisitions primarily~~Impairment reflects our ~~acquisition of BFY Brands, Inc. (BFY Brands).~~

~~(b)The change in acquisitions primarily reflects our acquisition of Rockstar Energy Beverages (Rockstar).~~decision to sell or discontinue certain non-strategic brands. See Note 121 for further information.

~~(c)~~(b)~~The change in translation~~Translation and other primarily ~~reflects~~represents the ~~allocation~~appreciation of the ~~Rockstar brand to the respective divisions, which was finalized in the 12 weeks ended June 12, 2021 as part of purchase price allocation.~~Russian ruble.

~~(d)~~(c)~~The change~~Impairment represents decrease in ~~acquisitions primarily reflects our acquisition~~fair value as a result of ~~Pioneer Foods. See Note 12 for further information.~~

~~(e)The change~~the Russia-Ukraine conflict and the discontinuation or repositioning of certain juice and dairy brands in ~~acquisitions primarily reflects our acquisition of Be & Cheery. See Note 12 for further information.~~Russia.

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Note 54 - Income Taxes

On May 19, 2019, a public referendum held in Switzerland passed the Federal Act on Tax Reform and AHV Financing (TRAF), effective January 1, 2020. The enactment of certain provisions of the TRAF resulted in adjustments to our deferred taxes. During 2020, we recorded a net tax benefit of $72 million related to the adoption of the TRAF in the Swiss Canton of Bern. There were 0 income tax adjustments related to the TRAF recorded in either of the 24 weeks ended June 12, 2021 or June 13, 2020. While the accounting for the impacts of the TRAF are deemed to be complete, further adjustments to our financial statements and related disclosures could be made in future quarters, including in connection with final tax return filings.

~~For further information and discussion of the TRAF, refer to Note 5 to our consolidated financial statements in our 2020 Form 10-K.~~

~~Subsequent to June 12,~~In 2021, we received a final assessment from the ~~IRS related to~~Internal Revenue Service audit for the ~~audits of~~tax years 2014 through 2016. ~~We regularly assess~~The assessment included both agreed and unagreed issues. On October 29, 2021, we filed a formal written protest of the ~~likelihood~~assessment and requested an appeals conference. As a result of ~~adverse outcomes~~the analysis of the 2014 through 2016 final assessment, we remeasured all applicable reserves for uncertain tax positions for all years open under the statute of limitations, including any correlating adjustments impacting the mandatory transition tax liability under the TCJ Act, resulting in a net non-cash tax expense of $112 million in 2021. There were no tax amounts recognized in the 24 weeks ended June 11, 2022 and June 12, 2021 from ~~such assessments and believe that our current reserves are adequate.~~this assessment.

Note 65 - Share-Based Compensation

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


		12 Weeks Ended				24 Weeks Ended					12 Weeks Ended				24 Weeks Ended
		6/12/2021		6/13/2020		6/12/2021		6/13/2020			6/11/2022		6/12/2021		6/11/2022		6/12/2021
Share-based compensation expense – equity awards	Share-based compensation expense – equity awards	$	65	$	40	$	144	$	101	Share-based compensation expense – equity awards	$	75	$	65	$	156	$	144
Share-based compensation expense – liability awards	Share-based compensation expense – liability awards	0		4		4		7		Share-based compensation expense – liability awards	7		—		12		4
Acquisition and divestiture-related charges										Acquisition and divestiture-related charges	—		—		3		—
Restructuring charges	Restructuring charges	0		(1)		1		0		Restructuring charges	1		—		—		1
Total	Total	$	65	$	43	$	149	$	108	Total	$	83	$	65	$	171	$	149

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


		24 Weeks Ended							24 Weeks Ended
		6/12/2021			6/13/2020				6/11/2022			6/12/2021
		Granted(a)	Weighted-Average Grant Price		Granted(a)	Weighted-Average Grant Price			Granted(a)	Weighted-Average Grant Price		Granted(a)	Weighted-Average Grant Price
Stock options	Stock options	1.8	$	131.25	1.6	$	131.25	Stock options	2.1	$	163.00	1.8	$	131.25
RSUs and PSUs	RSUs and PSUs	2.6	$	131.27	2.5	$	131.20	RSUs and PSUs	2.3	$	163.00	2.6	$	131.27

(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 ~~$17~~$18 million and ~~$18~~$17 million during the 24 weeks ended June ~~12, 2021~~11, 2022 and June ~~13, 2020,~~12, 2021, respectively.

For the 12 weeks ended June ~~12, 2021~~11, 2022 and June ~~13, 2020,~~12, 2021, our grants of stock options, RSUs, PSUs and long-term cash awards were nominal.

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


	24 Weeks Ended
	6/11/2022		6/12/2021
Expected life	7 years		7 years
Risk-free interest rate	1.7	%	1.1	%
Expected volatility	16	%	14	%
Expected dividend yield	2.5	%	3.1	%

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

24 Weeks Ended
6/12/2021 6/13/2020
Expected life 7 years 6 years
Risk-free interest rate 1.1 % 1.0 %
Expected volatility 14 % 14 %
Expected dividend yield 3.1 % 3.5 %

Note 76 - Pension and Retiree Medical Benefits

In ~~2020,~~the 12 and 24 weeks ended June 11, 2022, we ~~adopted an amendment, effective December 31, 2025,~~recognized a pre-tax settlement charge of $131 million ($101 million after-tax or $0.07 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 2022. As a result, related plan assets and benefit obligations were remeasured using assumptions as of June 11, 2022, the remeasurement date. The weighted-average discount rate for the U.S. defined benefit plans’ projected benefit obligations increased from 2.9% to 3.4% as a result of the remeasurement. In addition, the U.S. defined benefit pension ~~plans~~plans’ weighted-average interest cost discount rate and expected return on plan assets used to ~~freeze~~determine 2022 net periodic benefit accruals for salaried participants, which will decrease pre-tax pension benefits expense by approximately $70 million in 2021, primarily impacting corporate unallocated expenses. In 2020, we also approved an amendment, effective January 1, 2021,cost/(income) increased from 2.4% and 6.3% to reorganize the U.S. qualified defined benefit pension plans that resulted in the transfer of certain participants from the PepsiCo Employees Retirement Plan A (Plan A) to the PepsiCo Employees Retirement Plan I3.1% and ~~to a newly created plan, PepsiCo Employees Retirement Plan H (Plan H)~~6.7%, with no material impact to pre-tax pension benefits expense. In addition, in 2020, we adopted an amendment, effective January 1, 2021, to enhance the pay credits of certain participants in Plan H, which will increase pre-tax pension benefits expense by approximately $45 million in 2021, primarily impacting service cost expense. respectively.

For further information on ~~plan changes,~~our policies for pension, retiree-medical and savings plans, refer to Note 7 to our consolidated financial statements in our ~~2020~~2021 Form 10-K.

In the 24 weeks ended June 11, 2022, we transferred pension and retiree medical obligations of $145 million and related assets to the Tropicana JV in connection with the Juice Transaction. See Note 11 for further information.

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												12 Weeks Ended
		6/12/2021		6/13/2020		6/12/2021			6/13/2020			6/12/2021			6/13/2020			Pension								Retiree Medical
																		U.S.				International
								6/11/2022			6/12/2021			6/11/2022				6/12/2021		6/11/2022		6/12/2021
Service cost	Service cost	$	120	$	100	$	25		$	20		$	7		$	5	Service cost	$	115	$	120	$	17	$	25	$	9	$	7
Other pension and retiree medical benefits income:
Other pension and retiree medical benefits expense/(income):																	Other pension and retiree medical benefits expense/(income):
Interest cost	Interest cost	74		100		19			21			4			5		Interest cost	87		74		23		19		4		4
Expected return on plan assets	Expected return on plan assets	(224)		(215)		(57)			(49)			(3)			(4)		Expected return on plan assets	(216)		(224)		(56)		(57)		(4)		(3)
Amortization of prior service (credits)/cost		(7)		2		(1)			0			(3)			(2)
Amortization of prior service credits																	Amortization of prior service credits	(7)		(7)		—		(1)		(2)		(3)
Amortization of net losses/(gains)	Amortization of net losses/(gains)	52		46		19			16			(3)			(5)		Amortization of net losses/(gains)	35		52		7		19		(3)		(3)
Curtailment losses		0		0		5			0			0			0
Settlement/curtailment losses																	Settlement/curtailment losses	131		—		—		5		—		—
Special termination benefits	Special termination benefits	(1)		1		0			0			0			0		Special termination benefits	3		(1)		—		—		—		—
Total other pension and retiree medical benefits income		(106)		(66)		(15)			(12)			(5)			(6)
Total other pension and retiree medical benefits expense/(income)																	Total other pension and retiree medical benefits expense/(income)	33		(106)		(26)		(15)		(5)		(5)
Total	Total	$	14	$	34	$	10		$	8		$	2		$	(1)	Total	$	148	$	14	$	(9)	$	10	$	4	$	2

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		24 Weeks Ended													24 Weeks Ended
		Pension								Retiree Medical					Pension								Retiree Medical
		U.S.				International									U.S.				International
		6/12/2021		6/13/2020		6/12/2021		6/13/2020		6/12/2021		6/13/2020			6/11/2022		6/12/2021		6/11/2022		6/12/2021		6/11/2022		6/12/2021
Service cost	Service cost	$	240	$	200	$	44	$	37	$	15	$	11	Service cost	$	229	$	240	$	34	$	44	$	17	$	15
Other pension and retiree medical benefits income:	Other pension and retiree medical benefits income:													Other pension and retiree medical benefits income:
Interest cost	Interest cost	149		200		32		37		7		11		Interest cost	175		149		40		32		8		7
Expected return on plan assets	Expected return on plan assets	(448)		(429)		(98)		(86)		(7)		(8)		Expected return on plan assets	(431)		(448)		(98)		(98)		(7)		(7)
Amortization of prior service (credits)/cost		(14)		5		(1)		0		(5)		(5)
Amortization of prior service credits														Amortization of prior service credits	(13)		(14)		—		(1)		(4)		(5)
Amortization of net losses/(gains)	Amortization of net losses/(gains)	103		91		32		26		(6)		(10)		Amortization of net losses/(gains)	68		103		12		32		(6)		(6)
Curtailment losses		0		0		5		0		0		0
Settlement/curtailment losses/(gains)														Settlement/curtailment losses/(gains)	131		—		—		5		(16)		—
Special termination benefits	Special termination benefits	5		7		0		0		0		0		Special termination benefits	9		5		—		—		—		—
Total other pension and retiree medical benefits income	Total other pension and retiree medical benefits income	(205)		(126)		(30)		(23)		(11)		(12)		Total other pension and retiree medical benefits income	(61)		(205)		(46)		(30)		(25)		(11)
Total	Total	$	35	$	74	$	14	$	14	$	4	$	(1)	Total	$	168	$	35	$	(12)	$	14	$	(8)	$	4

We ~~continue to monitor the impact of the COVID-19 pandemic and related global economic conditions and uncertainty on the net unfunded status of our pension and retiree medical plans. We also~~ regularly evaluate opportunities to reduce risk and volatility associated with our pension and retiree medical plans.

During the 24 weeks ended June 11, 2022 and June 12, 2021, we made discretionary contributions of $75 million and $300 million, respectively, to ~~Plan H in the United States~~our U.S. qualified defined benefit plans, and $10 million and $25 million, respectively, to our international defined benefit plans. We expect to make an additional discretionary contribution of ~~$200~~$75 million to our U.S. qualified defined benefit plans in the third quarter of ~~2021. During the 24 weeks ended June 13, 2020, we made discretionary contributions of $150 million to Plan A in the United States and $14 million to our international plans.~~2022.

Note 87 - Debt Obligations

In the 24 weeks ended June ~~12, 2021, $1.0~~11, 2022, $1.7 billion of ~~USD-denominated senior notes and €0.5 billion of euro-denominated~~U.S. dollar-denominated senior notes matured and were ~~paid.~~paid. In addition, in the 24 weeks ended June 11, 2022, we paid $750 million to redeem all $750 million outstanding principal amount of our 2.25% senior notes due May 2022, and we paid $800 million to redeem all $800 million outstanding principal amount of our 3.10% senior notes due July 2022.

As of June ~~12, 2021,~~11, 2022, we had 0$2.8 billion of commercial paper outstanding.

In the second quarter of ~~2021,~~2022, we entered into a new five-year unsecured revolving credit agreement (Five-Year Credit Agreement), which expires on May ~~28, 2026.~~27, 2027. The Five-Year Credit Agreement enables us and our borrowing subsidiaries to borrow up to ~~$3.75~~$3.8 billion in U.S. dollars and/or euros, including a $0.75 billion swing line subfacility for euro-denominated borrowings permitted to be borrowed on a same-day basis, subject to customary terms and conditions. We may request that commitments under this agreement be increased up to $4.5 billion (or the equivalent amount in euros). Additionally, we may, once a year, request renewal of the agreement for an additional one-year period. The Five-Year Credit Agreement replaced our $3.75 billion ~~five year~~five-year credit agreement, dated as of ~~June 3, 2019.~~May 28, 2021.

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Also in the second quarter of ~~2021,~~2022, we entered into a new 364-day unsecured revolving credit agreement (364-Day Credit Agreement), which expires on May ~~27, 2022.~~26, 2023. The 364-Day Credit Agreement enables us and our borrowing subsidiaries to borrow up to ~~$3.75~~$3.8 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 $4.5 billion (or the equivalent amount in euros). We may request renewal of this facility for an additional 364-day period or convert any amounts outstanding into a term loan for a period of up to one year, which term loan would mature no later than the anniversary of the then effective termination date. The 364-Day Credit Agreement replaced our $3.75 billion 364-day credit agreement, dated as of ~~June 1, 2020.~~

~~Table of Contents~~May 28, 2021.

Funds borrowed under the Five-Year Credit Agreement and the 364-Day Credit Agreement may be used for general corporate purposes. Subject to certain conditions, we may borrow, prepay and reborrow amounts under these agreements. As of June ~~12, 2021,~~11, 2022, there were no outstanding borrowings under the Five-Year Credit Agreement or the 364-Day Credit Agreement.

Note 98 - 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 24 weeks ended June ~~12, 2021~~11, 2022 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 ~~2020~~2021 Form 10-K. We continue to evaluate our hedging strategies related to our Russian business based on the impact of the Russia-Ukraine conflict on financial markets.

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 June ~~12, 2021~~11, 2022 was ~~$133~~$353 million. We have posted 0no collateral under these contracts and no credit-risk-related contingent features were triggered as of June ~~12, 2021.~~11, 2022.

The notional amounts of our financial instruments used to hedge the above risks as of June ~~12, 2021~~11, 2022 and December ~~26, 2020~~25, 2021 are as follows:


		Notional Amounts(a)					Notional Amounts(a)
		6/12/2021		12/26/2020			6/11/2022		12/25/2021
Commodity	Commodity	$	1.2	$	1.1	Commodity	$	1.7	$	1.6
Foreign exchange	Foreign exchange	$	2.3	$	1.9	Foreign exchange	$	2.3	$	2.8
Interest rate	Interest rate	$	2.3	$	3.0	Interest rate	$	2.1	$	2.1
Net investment (b)	Net investment (b)	$	2.7	$	2.7	Net investment (b)	$	2.0	$	2.1

(a)In billions.

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

As of June ~~12, 2021,~~11, 2022, approximately 2%8% of total debt, after the impact of the related interest rate derivative instruments, was subject to variable rates, compared to 3%2% as of December ~~26, 2020.~~25, 2021.

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Held-to-Maturity Debt Securities

Investments in debt securities that we have the positive intent and ability to hold until maturity are classified as held-to-maturity. Highly liquid debt securities with original maturities of three months or less are recorded as cash equivalents. ~~Our held-to-maturity debt securities consist of U.S. Treasury securities and commercial paper.~~ As of June ~~12, 2021,~~11, 2022, we had 0 investments in ~~U.S. Treasury~~debt securities. As of December ~~26, 2020, we had $2.1 billion of investments in U.S. Treasury securities with $2.0 billion recorded in cash and cash equivalents and $0.1 billion in short-term investments. As of June 12,~~25, 2021, we had ~~$85~~$130 million of investments in commercial paper recorded in cash and cash equivalents. ~~As of December 26, 2020, we had $260 million of investments in commercial paper with $75 million recorded in cash and cash equivalents and $185 million in short-term investments.~~ Held-to-maturity debt securities are recorded at amortized cost, which approximates fair value, and realized gains or losses are reported in

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earnings. ~~Our investments mature in less than one year.~~ As of ~~June 12,~~December 25, 2021, ~~and December 26, 2020,~~ gross unrecognized gains and losses and the allowance for expected credit losses were not material.

Fair Value Measurements

The fair values of our financial assets and liabilities as of June ~~12, 2021~~11, 2022 and December ~~26, 2020~~25, 2021 are categorized as follows:

6/12/2021 12/26/2020

Fair Value Hierarchy Levels(a)
Assets(a)
Liabilities(a)
Assets(a)
Liabilities(a)
Index funds (b)
1 $ 328 $ 0 $ 231 $ 0
Prepaid forward contracts (c)
2 $ 18 $ 0 $ 18 $ 0
Deferred compensation (d)
2 $ 0 $ 500 $ 0 $ 477
Contingent consideration (e)
3 $ 0 $ 853 $ 0 $ 861
Derivatives designated as fair value hedging instruments:
Interest rate (f)
2 $ 1 $ 0 $ 2 $ 0
Derivatives designated as cash flow hedging instruments:
Foreign exchange (g)
2 $ 4 $ 62 $ 9 $ 71
Interest rate (g)
2 49 191 13 307
Commodity (h)
2 69 1 32 0
$ 122 $ 254 $ 54 $ 378
Derivatives not designated as hedging instruments:
Foreign exchange (g)
2 $ 5 $ 14 $ 4 $ 8
Commodity (h)
2 45 15 19 7
$ 50 $ 29 $ 23 $ 15
Total derivatives at fair value (i)
$ 173 $ 283 $ 79 $ 393
Total $ 519 $ 1,636 $ 328 $ 1,731


		6/11/2022				12/25/2021
	Fair Value Hierarchy Levels(a)	Assets(a)		Liabilities(a)		Assets(a)		Liabilities(a)

Index funds (b)	1	$	279	$	—	$	337	$	—
Prepaid forward contracts (c)	2	$	13	$	—	$	21	$	—
Deferred compensation (d)	2	$	—	$	440	$	—	$	505

Derivatives designated as cash flow hedging instruments:
Foreign exchange (e)	2	$	14	$	42	$	29	$	14
Interest rate (e)	2	20		349		14		264
Commodity (f)	2	22		30		70		5
		$	56	$	421	$	113	$	283
Derivatives not designated as hedging instruments:
Foreign exchange (e)	2	$	6	$	9	$	19	$	7
Commodity (f)	2	46		25		35		22
		$	52	$	34	$	54	$	29
Total derivatives at fair value (g)		$	108	$	455	$	167	$	312
Total		$	400	$	895	$	525	$	817

(a)Fair value hierarchy levels are categorized consistently by Level 1 (quoted prices in active markets for identical assets), and Level 2 (significant other observable ~~inputs) and Level 3 (significant unobservable~~ inputs) 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)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.

(c)Based primarily on the price of our common stock.

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

(e)In connection with our acquisition of Rockstar, we recorded a liability for tax-related contingent consideration payable over up to 15 years, with an option to accelerate all remaining payments, with estimated maximum payments of approximately $1.1 billion, using current tax rates. The fair value of the liability is estimated using probability-weighted, discounted future cash flows at current tax rates. The significant unobservable inputs (Level 3) used to estimate the fair value include the expected future tax benefits associated with the acquisition, the probability that the option to accelerate all remaining payments will be exercised and discount rates. These unobservable inputs did not materially differ from those used as of December 26, 2020. The expected annual future tax benefits range from approximately $40 million to $110 million, with an average of $70 million. The probability, in any given year, that the option to accelerate will be exercised ranges from 3 to 25 percent, with a weighted-average payment period of approximately 3 years. The discount rates range from less than 1 percent to 5 percent, with a weighted average of 3 percent. The contingent consideration measured at fair value using unobservable inputs as of June 12, 2021 is $853 million, comprised of an $861 million liability as of December 26, 2020, a fair value decrease of $6 million in the 24 weeks ended June 12, 2021, recorded in selling, general and administrative expenses, and a fair value decrease of $2 million in the 24 weeks ended June 12, 2021, recorded in goodwill as a result of the finalization of purchase price allocation.

~~(f)~~Based on London Interbank Offered Rate forward rates. The carrying amount of hedged fixed-rate debt was $0.2 billion as of June 12, 2021 and December 26, 2020 and is classified on our balance sheet within short-term debt obligations. As of June 12, 2021 and

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December 26, 2020, the cumulative amount of fair value hedging adjustments to hedged fixed-rate debt was a $1 million gain and a $2 million gain, respectively. As of June 12, 2021, the cumulative amount of fair value hedging adjustments on discontinued hedges was a $9 million net loss, which is being amortized over the remaining life of the related debt obligations.

~~(g)~~Based on recently reported market transactions of spot and forward rates.

~~(h)~~(f)~~Based~~Primarily based on recently reported market transactions of swap arrangements.

~~(i)~~(g)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 the balance sheet as of June ~~12, 2021~~11, 2022 and December ~~26, 2020~~25, 2021 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.

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The carrying amounts of our cash and cash equivalents and short-term investments recorded at amortized cost approximate fair value ~~due to their short-term maturity. Our cash equivalents and short-term investments recorded at amortized cost are classified~~(classified as Level 2 in the fair value ~~hierarchy.~~hierarchy) due to their short-term maturity. The fair value of our debt obligations as of June ~~12, 2021~~11, 2022 and December ~~26, 2020~~25, 2021 was ~~$46~~$37 billion and ~~$50~~$43 billion, respectively, based upon prices of similar instruments in the marketplace, which are considered Level 2 inputs.

Losses/(gains) on our hedging instruments are categorized as follows:


		12 Weeks Ended													12 Weeks Ended
		Fair Value/Non- designated Hedges				Cash Flow and Net Investment Hedges									Fair Value/Non- designated Hedges				Cash Flow and Net Investment Hedges
		Losses/(Gains) Recognized in Income Statement(a)				Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss				Losses/(Gains) Reclassified from Accumulated Other Comprehensive Loss into Income Statement(b)					Losses/(Gains) Recognized in Income Statement(a)				Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss				Losses/(Gains) Reclassified from Accumulated Other Comprehensive Loss into Income Statement(b)
		6/12/2021		6/13/2020		6/12/2021		6/13/2020		6/12/2021		6/13/2020			6/11/2022		6/12/2021		6/11/2022		6/12/2021		6/11/2022		6/12/2021
Foreign exchange	Foreign exchange	$	6	$	10	$	27	$	(27)	$	27	$	(19)	Foreign exchange	$	21	$	6	$	26	$	27	$	(17)	$	27
Interest rate	Interest rate	0		(1)		(46)		(130)		(47)		(121)		Interest rate	—		—		82		(46)		61		(47)
Commodity	Commodity	(70)		(9)		(156)		13		(33)		13		Commodity	(181)		(70)		(1)		(156)		(74)		(33)
Net investment	Net investment	0		0		55		125		0		0		Net investment	—		—		(88)		55		—		—
Total	Total	$	(64)	$	0	$	(120)	$	(19)	$	(53)	$	(127)	Total	$	(160)	$	(64)	$	19	$	(120)	$	(30)	$	(53)

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		24 Weeks Ended													24 Weeks Ended
		Fair Value/Non- designated Hedges				Cash Flow and Net Investment Hedges									Fair Value/Non- designated Hedges				Cash Flow and Net Investment Hedges
		Losses/(Gains) Recognized in Income Statement(a)				Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss				Losses/(Gains) Reclassified from Accumulated Other Comprehensive Loss into Income Statement(b)					Losses/(Gains) Recognized in Income Statement(a)				Losses/(Gains) Recognized in Accumulated Other Comprehensive Loss				Losses/(Gains) Reclassified from Accumulated Other Comprehensive Loss into Income Statement(b)
		6/12/2021		6/13/2020		6/12/2021		6/13/2020		6/12/2021		6/13/2020			6/11/2022		6/12/2021		6/11/2022		6/12/2021		6/11/2022		6/12/2021
Foreign exchange	Foreign exchange	$	10	$	(1)	$	38	$	(78)	$	40	$	(15)	Foreign exchange	$	5	$	10	$	18	$	38	$	(21)	$	40
Interest rate	Interest rate	1		(12)		(64)		93		(51)		29		Interest rate	—		1		79		(64)		81		(51)
Commodity	Commodity	(151)		157		(246)		77		(43)		16		Commodity	(347)		(151)		(190)		(246)		(152)		(43)
Net investment	Net investment	0		0		(8)		41		0		0		Net investment	—		—		(139)		(8)		—		—
Total	Total	$	(140)	$	144	$	(280)	$	133	$	(54)	$	30	Total	$	(342)	$	(140)	$	(232)	$	(280)	$	(92)	$	(54)

(a)Foreign exchange derivative losses/gains are primarily included in selling, general and administrative expenses. Interest rate derivative losses/gains are primarily from fair value hedges and 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. Commodity derivative losses/gains are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.

(b)Foreign exchange derivative losses/gains are primarily included in cost of sales. Interest rate derivative losses/gains on cross-currency interest rate swaps 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.

Based on current market conditions, we expect to reclassify net gains of ~~$188~~$137 million related to our cash flow hedges from accumulated other comprehensive loss into net income during the next 12 months.

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Note 109 - 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							12 Weeks Ended
		6/12/2021			6/13/2020				6/11/2022			6/12/2021
		Income		Shares(a)	Income		Shares(a)		Income		Shares(a)	Income		Shares(a)

Basic net income attributable to PepsiCo per common share	Basic net income attributable to PepsiCo per common share	$	1.71		$	1.19		Basic net income attributable to PepsiCo per common share	$	1.03		$	1.71
Net income available for PepsiCo common shareholders	Net income available for PepsiCo common shareholders	$	2,358	1,382	$	1,646	1,387	Net income available for PepsiCo common shareholders	$	1,429	1,382	$	2,358	1,382
Dilutive securities:	Dilutive securities:							Dilutive securities:
Stock options, RSUs, PSUs and other (b)	Stock options, RSUs, PSUs and other (b)	0		6	0		6	Stock options, RSUs, PSUs and other (b)	—		7	—		6

Diluted	Diluted	$	2,358	1,388	$	1,646	1,393	Diluted	$	1,429	1,389	$	2,358	1,388
Diluted net income attributable to PepsiCo per common share	Diluted net income attributable to PepsiCo per common share	$	1.70		$	1.18		Diluted net income attributable to PepsiCo per common share	$	1.03		$	1.70


		24 Weeks Ended							24 Weeks Ended
		6/12/2021			6/13/2020				6/11/2022			6/12/2021
		Income		Shares(a)	Income		Shares(a)		Income		Shares(a)	Income		Shares(a)

Basic net income attributable to PepsiCo per common share	Basic net income attributable to PepsiCo per common share	$	2.95		$	2.15		Basic net income attributable to PepsiCo per common share	$	4.11		$	2.95
Net income available for PepsiCo common shareholders	Net income available for PepsiCo common shareholders	$	4,072	1,381	$	2,984	1,389	Net income available for PepsiCo common shareholders	$	5,690	1,383	$	4,072	1,381
Dilutive securities:	Dilutive securities:							Dilutive securities:
Stock options, RSUs, PSUs and other (b)	Stock options, RSUs, PSUs and other (b)	0		6	0		6	Stock options, RSUs, PSUs and other (b)	—		7	—		6
Diluted	Diluted	$	4,072	1,387	$	2,984	1,395	Diluted	$	5,690	1,390	$	4,072	1,387
Diluted net income attributable to PepsiCo per common share	Diluted net income attributable to PepsiCo per common share	$	2.94		$	2.14		Diluted net income attributable to PepsiCo per common share	$	4.09		$	2.94

(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

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per common share was immaterial for both the 12 and 24 weeks ended June ~~12, 2021~~11, 2022 and June ~~13, 2020.~~12, 2021.

Note 1110 - 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 Other Accumulated Other Comprehensive Loss Attributable to PepsiCo
Balance as of December 26, 2020 (a)
$ (11,940) $ 4 $ (3,520) $ (20) $ (15,476)
Other comprehensive income/(loss) before reclassifications (b)
128 97 (20) 0 205
Amounts reclassified from accumulated other comprehensive loss 18 (1) 52 0 69
Net other comprehensive income 146 96 32 0 274
Tax amounts (15) (24) (5) 0 (44)
Balance as of March 20, 2021 (a)
$ (11,809) $ 76 $ (3,493) $ (20) $ (15,246)
Other comprehensive income/(loss) before reclassifications (c)
255 175 (28) 2 404
Amounts reclassified from accumulated other comprehensive loss 0 (53) 57 0 4
Net other comprehensive income 255 122 29 2 408
Tax amounts 13 (29) (5) 0 (21)
Balance as of June 12, 2021 (a)
$ (11,541) $ 169 $ (3,469) $ (18) $ (14,859)


	Currency Translation Adjustment		Cash Flow Hedges		Pension and Retiree Medical		Other		Accumulated Other Comprehensive Loss Attributable to PepsiCo
Balance as of December 25, 2021 (a)	$	(12,309)	$	159	$	(2,750)	$	2	$	(14,898)
Other comprehensive (loss)/income before reclassifications (b)	(549)		200		(8)		—		(357)
Amounts reclassified from accumulated other comprehensive loss	—		(62)		25		—		(37)
Net other comprehensive (loss)/income	(549)		138		17		—		(394)
Tax amounts	(11)		(32)		(4)		(4)		(51)
Balance as of March 19, 2022 (a)	$	(12,869)	$	265	$	(2,737)	$	(2)	$	(15,343)
Other comprehensive income/(loss) before reclassifications (c)	1,298		(107)		(484)		5		712
Amounts reclassified from accumulated other comprehensive loss	—		(30)		161		—		131
Net other comprehensive income/(loss)	1,298		(137)		(323)		5		843
Tax amounts	(24)		35		73		—		84
Balance as of June 11, 2022 (a)	$	(11,595)	$	163	$	(2,987)	$	3	$	(14,416)

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(a)Pension and retiree medical amounts are net of taxes of $1,283 million as of December 25, 2021, $1,279 million as of March 19, 2022 and $1,352 million as of June 11, 2022.

(b)Currency translation adjustment primarily reflects depreciation of the Russian ruble, partially offset by appreciation of the South African rand, Brazilian real and Canadian dollar.

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


	Currency Translation Adjustment		Cash Flow Hedges		Pension and Retiree Medical		Other		Accumulated Other Comprehensive Loss Attributable to PepsiCo
Balance as of December 26, 2020 (a)	$	(11,940)	$	4	$	(3,520)	$	(20)	$	(15,476)
Other comprehensive income/(loss) before reclassifications (b)	128		97		(20)		—		205
Amounts reclassified from accumulated other comprehensive loss	18		(1)		52		—		69
Net other comprehensive income	146		96		32		—		274
Tax amounts	(15)		(24)		(5)		—		(44)
Balance as of March 20, 2021 (a)	$	(11,809)	$	76	$	(3,493)	$	(20)	$	(15,246)
Other comprehensive income/(loss) before reclassifications (c)	255		175		(28)		2		404
Amounts reclassified from accumulated other comprehensive loss	—		(53)		57		—		4
Net other comprehensive income	255		122		29		2		408
Tax amounts	13		(29)		(5)		—		(21)
Balance as of June 12, 2021 (a)	$	(11,541)	$	169	$	(3,469)	$	(18)	$	(14,859)

(a)Pension and retiree medical amounts are net of taxes of $1,514 million as of December 26, 2020, $1,509 million as of March 20, 2021 and $1,504 million as of June 12, 2021.

(b)Currency translation adjustment primarily reflects appreciation of the Canadian dollar, ~~Pound~~British pound sterling and Russian ruble.

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

Currency Translation Adjustment Cash Flow Hedges Pension and Retiree Medical Other Accumulated Other Comprehensive Loss Attributable to PepsiCo
Balance as of December 28, 2019 (a)
$ (11,290) $ (3) $ (2,988) $ (19) $ (14,300)
Other comprehensive (loss)/income before reclassifications (b)
(735) (236) 21 1 (949)
Amounts reclassified from accumulated other comprehensive loss 0 157 50 0 207
Net other comprehensive (loss)/income (735) (79) 71 1 (742)
Tax amounts (19) 18 (14) 0 (15)
Balance as of March 21, 2020 (a)
$ (12,044) $ (64) $ (2,931) $ (18) $ (15,057)
Other comprehensive (loss)/income before reclassifications (c)
(827) 144 25 (1) (659)
Amounts reclassified from accumulated other comprehensive loss 0 (127) 57 0 (70)
Net other comprehensive (loss)/income (827) 17 82 (1) (729)
Tax amounts 31 (4) (19) 0 8
Balance as of June 13, 2020 (a)
$ (12,840) $ (51) $ (2,868) $ (19) $ (15,778)

~~(a)Pension and retiree medical amounts are net of taxes of $1,370 million as of December 28, 2019, $1,356 million as of March 21, 2020 and $1,337 million as of June 13, 2020.~~

~~(b)Currency translation adjustment primarily reflects depreciation of the Russian ruble, Canadian dollar and Mexican peso.~~

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

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


		12 Weeks Ended				24 Weeks Ended						12 Weeks Ended				24 Weeks Ended
		6/12/2021		6/13/2020		6/12/2021		6/13/2020		Affected Line Item in the Income Statement		6/11/2022		6/12/2021		6/11/2022		6/12/2021		Affected Line Item in the Income Statement

Currency translation:	Currency translation:										Currency translation:
Divestiture	Divestiture	$	0	$	0	$	18	$	0	Selling, general and administrative expenses	Divestiture	$	—	$	—	$	—	$	18	Selling, general and administrative expenses

Cash flow hedges:	Cash flow hedges:										Cash flow hedges:
Foreign exchange contracts	Foreign exchange contracts	$	3	$	0	$	4	$	0	Net revenue	Foreign exchange contracts	$	(2)	$	3	$	(4)	$	4	Net revenue
Foreign exchange contracts	Foreign exchange contracts	24		(19)		36		(15)		Cost of sales	Foreign exchange contracts	(15)		24		(17)		36		Cost of sales
Interest rate derivatives	Interest rate derivatives	(47)		(121)		(51)		29		Selling, general and administrative expenses	Interest rate derivatives	61		(47)		81		(51)		Selling, general and administrative expenses
Commodity contracts	Commodity contracts	(32)		11		(43)		14		Cost of sales	Commodity contracts	(70)		(32)		(146)		(43)		Cost of sales
Commodity contracts	Commodity contracts	(1)		2		0		2		Selling, general and administrative expenses	Commodity contracts	(4)		(1)		(6)		—		Selling, general and administrative expenses
Net (gains)/losses before tax		(53)		(127)		(54)		30
Net gains before tax											Net gains before tax	(30)		(53)		(92)		(54)
Tax amounts	Tax amounts	12		31		13		(8)			Tax amounts	7		12		17		13
Net (gains)/losses after tax		$	(41)	$	(96)	$	(41)	$	22
Net gains after tax											Net gains after tax	$	(23)	$	(41)	$	(75)	$	(41)

Pension and retiree medical items:	Pension and retiree medical items:										Pension and retiree medical items:
Amortization of prior service credits	Amortization of prior service credits	$	(11)	$	0	$	(20)	$	0	Other pension and retiree medical benefits income	Amortization of prior service credits	$	(9)	$	(11)	$	(17)	$	(20)	Other pension and retiree medical benefits (expense)/income
Amortization of net losses	Amortization of net losses	68		57		129		107		Other pension and retiree medical benefits income	Amortization of net losses	39		68		74		129		Other pension and retiree medical benefits (expense)/income

Settlement/curtailment losses											Settlement/curtailment losses	131		—		129		—		Other pension and retiree medical benefits (expense)/income
Net losses before tax	Net losses before tax	57		57		109		107			Net losses before tax	161		57		186		109
Tax amounts	Tax amounts	(12)		(11)		(23)		(22)			Tax amounts	(35)		(12)		(41)		(23)
Net losses after tax	Net losses after tax	$	45	$	46	$	86	$	85		Net losses after tax	$	126	$	45	$	145	$	86

Total net losses/(gains) reclassified, net of tax		$	4	$	(50)	$	63	$	107
Total net losses reclassified, net of tax											Total net losses reclassified, net of tax	$	103	$	4	$	70	$	63

Note 1211 - Acquisitions and Divestitures

2020 Acquisitions

~~On March 23,~~In 2020, we acquired ~~all~~Pioneer Food Group Ltd. (Pioneer Foods), Rockstar Energy Beverages (Rockstar) and Hangzhou Haomusi Food Co., Ltd. (Be & Cheery). The purchase price allocations for each of the outstanding shares of Pioneer Foods, a food and beverage company in South Africa with exports to countries across the globe, for 110.00 South African rand per share in cash. The total consideration transferred was approximately $1.2 billion and was funded by two unsecured bridge loan facilities entered into by one of our international consolidated subsidiaries, whichthese acquisitions were ~~fully repaid in April 2020.~~

In connection with our acquisition of Pioneer Foods, we have made certain commitments to the South Africa Competition Commission, including a commitment to provide the equivalent of 7.8 billion South African rand, or approximately $0.4 billion as of the acquisition date, in value for the benefit of our employees, agricultural development, education, developing Pioneer Foods’ operations and enterprise development programs in South Africa. Included in this commitment is 2.3 billion South African rand, or approximately $0.1 billion, relating to the implementation of an employee ownership plan and an agricultural, entrepreneurship and educational development fund, which is an irrevocable condition of the acquisition. This commitment was recorded in selling, general and administrative expenses primarily in the year ended December 26, 2020 and is expected to be settled primarilyfinalized in the second ~~half~~quarter of 2021. See Note 13 to our consolidated financial statements in our 2021 Form 10-K for further information.

Juice Transaction

In the 12 weeks ended March 19, 2022, we sold our Tropicana, Naked and other select juice brands to PAI Partners for approximately $3.5 billion in cash, subject to purchase price adjustments, and a 39% noncontrolling interest in the Tropicana JV, operating across North America and Europe. The ~~remaining commitment of 5.5 billion South African rand, or approximately $0.3 billion as~~North America portion of the transaction was completed on January 24, 2022 and the Europe portion of the transaction was completed on February 1, 2022. In the U.S., PepsiCo acts as the exclusive distributor for Tropicana JV’s portfolio of brands for small-format and foodservice customers with chilled direct-store-delivery. We have significant influence over our investment in the Tropicana JV and account for our

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~~acquisition date, relates to capital expenditures and/~~investment under the equity method, recognizing our proportionate share of Tropicana JV’s earnings within our income statement (recorded in selling, general and administrative expenses).

As a result of this transaction, in the 24 weeks ended June 11, 2022, we recorded a pre-tax gain of $3.3 billion ($2.9 billion after-tax or ~~business-related costs which will be incurred~~$2.07 per share) in our PBNA and ~~recorded over a five-year period from the acquisition date.~~

~~On April 24, 2020, we acquired Rockstar, an energy drink maker with whom we had a distribution agreement prior~~Europe divisions, including $525 million related to the ~~acquisition, for~~remeasurement of our 39% ownership in the Tropicana JV at fair value using a combination of the transaction price, discounted cash flows and an ~~upfront cash payment of approximately $3.85 billion and contingent consideration~~option pricing model related to ~~estimated future tax benefits associated with~~our liquidation preference in the ~~acquisition of approximately $0.88 billion. See Note 9 for further information about the contingent consideration.~~

~~On June 1, 2020, we acquired all of the outstanding shares of Be & Cheery, one of the largest online snacks companies in China, from Haoxiangni Health Food Co., Ltd. for~~Tropicana J~~cash. The total consideration transferred was approximately $0.7 billion.~~

We accounted for the 2020 transactions 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 each of the 2020 acquisitions were finalized inV. In the 12 weeks ended June ~~12, 2021.~~11, 2022, we recorded certain purchase price adjustments for net working capital and net debt amounts, which resulted in an increase in the transaction price and the recognition of an incremental pre-tax gain of $13 million ($10 million after-tax or $0.01 per share) in our PBNA division. The purchase price will continue to be adjusted for net working capital and net debt amounts as of the transaction close date compared to targeted amounts set forth in the purchase agreement.

A summary of income statement activity related to the Juice Transaction in the 24 weeks ended June 11, 2022 is as follows:


	PBNA		Europe		Corporate		Total PepsiCo		Provision for income taxes(a)		Net income attributable to PepsiCo		Impact on net income attributable to PepsiCo per common share
Gain associated with the Juice Transaction	$	(3,037)	$	(298)	$	—	$	(3,335)	$	455	$	(2,880)	$	2.07
Acquisition and divestiture-related charges	39		13		6		58		(10)		48		(0.04)
Operating profit	$	(2,998)	$	(285)	$	6	(3,277)		445		(2,832)		2.04		(c)
Other pension and retiree medical benefits income (b)							(10)		3		(7)		0.01
Total Juice Transaction							$	(3,287)	$	448	$	(2,839)	$	2.04	(c)

(a)Includes $195 million of deferred tax expense related to the recognition of our investment in the Tropicana JV.

(b)Includes $16 million curtailment gain, partially offset by $6 million special termination benefits.

(c)Does not sum due to rounding.

In connection with the sale, we entered into a transition services agreement with PAI Partners, under which we provide certain services to the Tropicana JV to help facilitate an orderly transition of the business following ~~table summarizes~~ the sale. In return for these services, the Tropicana JV is required to pay certain agreed upon fees to reimburse us for our costs without markup.

Acquisition and Divestiture-Related Charges

Acquisition and divestiture-related charges primarily include merger and integration charges and costs associated with divestitures. Merger and integration charges include changes in fair value of ~~identifiable assets acquired~~contingent consideration, liabilities to support socioeconomic programs in South Africa, employee-related costs, contract termination costs and ~~liabilities assumed in the acquisitions of Pioneer Foods, Rockstar~~other integration costs. Divestiture-related charges reflect transaction expenses, including consulting, advisory and ~~Be & Cheery and the resulting goodwill as of the respective acquisition dates.~~

Pioneer Foods Rockstar Be & Cheery
Acquisition date March 23, 2020 April 24, 2020 June 1, 2020
Inventories $ 229 $ 52 $ 45
Property, plant and equipment 379 8 60
Amortizable intangible assets 52 0 98
Nonamortizable intangible assets 183 2,400 309
Other assets and liabilities (53) (9) (24)
Net deferred income taxes (117) 0 (99)
Noncontrolling interest (5) 0 0
Total identifiable net assets 668 2,451 389
Goodwill 558 2,278 309
Total purchase price $ 1,226 $ 4,729 $ 698

~~Goodwill is calculated as the excess of the aggregate of the fair value of the consideration transferred over the fair value of the net assets recognized.~~

The goodwill recorded as part of the acquisition of Pioneer Foods primarily reflects synergies expected to arise from our combined brand portfolios and distribution networks, and is not deductible for tax purposes. All of the goodwill is recorded in the AMESA segment.

The goodwill recorded as part of the acquisition of Rockstar primarily represents the value of PepsiCo’s expected new innovation in the energy category and is deductible for tax purposes. All of the goodwill is recorded in the PBNA segment.

The goodwill recorded as part of the acquisition of Be & Cheery primarily reflects growth opportunities for PepsiCo as we leverage Be & Cheery’s direct-to-consumer and supply chain capabilities and is not deductible for tax purposes. All of the goodwill is recorded in the APAC segment.other professional fees.

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~~Inventory Fair Value Adjustments and Merger and Integration Charges~~

A summary of our ~~inventory fair value adjustments~~acquisition and ~~merger and integration~~divestiture-related charges is as follows:

12 Weeks Ended 24 Weeks Ended
6/12/2021 6/13/2020 6/12/2021 6/13/2020
Cost of sales $ 1 $ 19 $ 1 $ 19
Selling, general and administrative expenses 24 199 14 224
Total $ 25 $ 218 $ 15 $ 243
After-tax amount $ 21 $ 205 $ 14 $ 227
Net income attributable to PepsiCo per common share $ (0.02) $ (0.15) $ (0.01) $ (0.16)


	12 Weeks Ended				24 Weeks Ended
	6/11/2022		6/12/2021		6/11/2022		6/12/2021		Transaction
FLNA	$	—	$	—	$	—	$	2	BFY Brands, Inc.
PBNA	2		1		39		2		Juice Transaction, Rockstar
Europe	3		—		13		—		Juice Transaction
AMESA	—		6		—		7		Pioneer Foods
APAC	—		3		—		3		Be & Cheery
Corporate	3		15		6		1		Juice Transaction, Rockstar
Total (a)	$	8	$	25	$	58	$	15
Other pension and retiree medical benefits expense	—		—		6		—		Juice Transaction
Total acquisition and divestiture-related charges	$	8	$	25	$	64	$	15
After-tax amount	$	7	$	21	$	54	$	14
Impact on net income attributable to PepsiCo per common share	$	(0.01)	$	(0.02)	$	(0.04)	$	(0.01)

~~Inventory fair value adjustments and merger and integration charges~~(a)Recorded primarily include fair value adjustments to the acquired inventory included in the acquisition-date balance sheets (recorded in cost of sales), merger and integration charges and other transaction-related costs (recorded in selling, general and administrative expenses). Merger and integration charges include liabilities to support socioeconomic programs in South Africa, closing costs, employee-related costs, changes in the fair value of contingent consideration, contract termination costs and other integration costs.

~~Inventory fair value adjustments and merger and integration charges by division are as follows:~~

12 Weeks Ended 24 Weeks Ended
6/12/2021 6/13/2020 6/12/2021 6/13/2020 Transaction
FLNA $ 0 $ 2 $ 2 $ 25 BFY Brands
PBNA 1 43 2 43 Rockstar
AMESA 6 157 7 159 Pioneer Foods
APAC 3 0 3 0 Be & Cheery
Corporate (a)
15 16 1 16
Total $ 25 $ 218 $ 15 $ 243

~~(a) Relates to changes in the fair value of contingent consideration associated with our acquisition of Rockstar, as well as other transaction-related costs.~~expenses.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

FINANCIAL REVIEW

Our discussion and analysis is intended to help the reader understand our results of operations and financial condition and is provided as an addition to, and should be read in connection with, our condensed consolidated financial statements and the accompanying notes. Unless otherwise noted, tabular dollars are presented in millions, except per share amounts. All per share amounts reflect common stock per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Percentage changes are based on unrounded amounts.

Our Critical Accounting Policies and Estimates

The critical accounting policies and estimates below should be read in conjunction with those outlined in our ~~2020~~2021 Form 10-K.

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Total Marketplace Spending

We offer sales incentives and discounts through various programs to customers and consumers. Total marketplace spending includes sales incentives, discounts, advertising and other marketing activities. Sales incentives and discounts are primarily accounted for as a reduction of revenue. A number of our sales incentives, such as bottler funding to independent bottlers and customer volume rebates, are based on annual targets, and accruals are established during the year, as products are delivered, for the expected payout, which may occur after year end once reconciled and settled.

These accruals are based on contract terms and our historical experience with similar programs and require management judgment with respect to estimating customer and consumer participation and performance levels. Differences between estimated expense and actual incentive costs are normally insignificant and are recognized in earnings in the period such differences are determined. In addition, certain advertising and marketing costs are also based on annual targets and recognized during the year as incurred.

For interim reporting, our policy is to allocate our forecasted full-year sales incentives for most of our programs to each of our interim reporting periods in the same year that benefits from the programs. The allocation methodology is based on our forecasted sales incentives for the full year and the proportion of

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each interim period’s actual gross revenue or volume, as applicable, to our forecasted annual gross revenue or volume, as applicable. Based on our review of the forecasts at each interim period, any changes in estimates and the related allocation of sales incentives are recognized beginning in the interim period that they are identified. In addition, we apply a similar allocation methodology for interim reporting purposes for certain advertising and other marketing activities.

Income Taxes

In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on our expected annual income, statutory tax rates and tax structure and transactions, including transfer pricing arrangements, available to us in the various jurisdictions in which we operate. Significant judgment is required in determining our annual tax rate and in evaluating our tax positions. Subsequent recognition, derecognition and measurement of a tax position taken in a previous period are separately recognized in the quarter in which they occur.

Our Business Risks

This Form 10-Q contains statements reflecting our views about our future performance that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (Reform Act). Statements that constitute forward-looking statements within the meaning of the Reform Act are generally identified through the inclusion of words such as “aim,” “anticipate,” “believe,” “drive,” “estimate,” “expect,” “expressed confidence,” “forecast,” “future,” “goal,” “guidance,” “intend,” “may,” “objective,” “outlook,” “plan,” “position,” “potential,” “project,” “seek,” “should,” “strategy,” “target,” “will” or similar statements or variations of such words and other similar expressions. All statements addressing our future operating performance, and statements addressing events and developments that we expect or anticipate will occur in the future, are forward-looking statements within the meaning of the Reform Act. These forward-looking statements are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in any such forward-looking statement. Such risks and uncertainties include, but are not limited to: the risks associated with the deadly conflict in Ukraine; the impact of COVID-19; future demand for PepsiCo’s products; damage to PepsiCo’s reputation or brand image; product recalls or other issues or concerns with respect to product quality and safety; PepsiCo’s ability to compete effectively; PepsiCo’s ability to attract, develop and maintain a highly skilled and diverse workforce; water scarcity; changes in the retail landscape or in sales to any key customer; disruption of PepsiCo’s

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manufacturing operations or supply ~~chain;~~chain, including increased commodity, packaging, transportation, labor and other input costs; political or social conditions in the markets where PepsiCo’s products are made, manufactured, distributed or sold; PepsiCo’s ability to grow its business in developing and emerging markets; changes in economic conditions in the countries in which PepsiCo operates; future cyber incidents and other ~~disruptions;~~disruptions to our information systems; failure to successfully complete or manage strategic transactions; PepsiCo’s reliance on third-party service ~~providers;~~providers and enterprise-wide systems; climate change or measures to address climate change; strikes or work stoppages; failure to realize benefits from PepsiCo’s productivity initiatives; deterioration in estimates and underlying assumptions regarding future performance that can result in an impairment charge; fluctuations or other changes in exchange rates; any downgrade or potential downgrade of PepsiCo’s credit ratings; imposition or proposed imposition of new or increased taxes aimed at PepsiCo’s products; imposition of limitations on the marketing or sale of PepsiCo’s products; changes in laws and regulations related to the use or disposal of plastics or other packaging ~~of PepsiCo’s products;~~materials; failure to comply with personal data protection and privacy laws; increase in income tax rates, changes in income tax laws or disagreements with tax authorities; failure to adequately protect PepsiCo’s intellectual property rights or infringement on intellectual property rights of others; failure to comply with applicable laws and regulations; and potential liabilities and costs from litigation,

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claims, legal or regulatory proceedings, inquiries or investigations; and other risks and uncertainties including those described in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks,” included in our ~~2020~~2021 Form 10-K and in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” and “Item 1A. Risk Factors” of this Form 10-Q. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

COVID-19

Our global operations continue to expose us to risks associated with the COVID-19 ~~pandemic, which continues~~pandemic. Numerous measures have been implemented around the world to ~~result in challenging operating environments and has affected almost all~~try to reduce the spread of the ~~more than~~ ~~200~~ ~~countries~~virus and territories in which our products are made, manufactured, distributed or sold. Travel bans and restrictions, quarantines, curfews, restrictions on public gatherings, shelter in place and safer-at-home orders, business shutdowns and closures continue in many of these ~~markets. These~~ measures have impacted and will continue to impact us, our ~~customers (including foodservice customers), consumers, employees, bottlers, contract manufacturers, distributors, joint venture~~business partners ~~suppliers~~ and ~~other third parties with whom we do business, which~~our customers. The COVID-19 pandemic, including these measures, may continue to result in changes in demand for our products, increases in employee and other operating costs ~~(whether as a result of changes to our~~or supply chain or increases in employee costs, including expanded benefits and frontline incentives, costs associated with the provision of personal protective equipment and increased sanitation, or otherwise), or adverse impacts to our supply chain through reduced availability of air or other commercial transport, port closures or border restrictions,disruptions, any of which can impact our ability to ~~make, manufacture, distribute and sell~~operate our ~~products.~~business. In addition, measures that impact our ability to access our offices (several of which remain closed), plants, warehouses, distribution centers or other facilities, or that impact the ability of our customers (including our foodservice customers), consumers, bottlers, contract manufacturers, distributors, joint venture partners, suppliers and other third parties to do the same,we may continue to ~~impact~~experience business disruptions resulting from the ~~availability or productivity~~temporary closures of our ~~and their employees, many of whom are not able to perform their job functions remotely.~~

~~Public concern regarding the risk of contracting COVID-19 has impacted and may continue to impact demand from consumers, including due to consumers not leaving their homes~~facilities or leaving their homes less often than they did prior to the start of the pandemic or otherwise shopping for and consuming food and beverage products in a different manner than they historically have or because somefacilities of our ~~consumers have lower discretionary income due~~business partners or the inability of a significant portion of our or our business partners’ workforce to ~~unemployment~~work because of illness, absenteeism, quarantine, vaccine mandates, or ~~reduced~~travel or ~~limited work as a result of measures taken in response to the pandemic.~~ other governmental restrictions.

Even as governmental restrictions are relaxed and economies

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gradually, partially, or fully reopen in certain ~~of these~~ jurisdictions and markets, the ongoing economic impacts and health concerns associated with the pandemic may continue to affect consumer behavior, spending levels and shopping and consumption preferences. Changes in consumer purchasing and consumption patterns may increase demand for our products in one quarter, resulting in decreased demand for our products in subsequent quarters, or in a lower-margin sales channel resulting in potentially reduced profit from sales of our products. We continue to see shiftsincluding changes in product and channel preferences ~~as markets move through varying stages~~that result in reduced sales or profit from the sale of ~~restrictions and re-opening at different times, including changes in at-home consumption, in immediate consumption and away-from-home channels, such as convenience and gas and foodservice.~~our products. In addition, ~~we continue to see an increase in demand in the e-commerce and online-to-offline channels and~~ any ~~failure to capitalize on this demand could adversely affect our ability to maintain and grow sales or category share and erode our competitive position.~~

~~Any~~ reduced demand for our products or change in consumer purchasing and consumption patterns, as well as continued economic uncertainty, can adversely affect our customers’ and business partners’ financial condition, which can result in bankruptcy filings and/or an inability to pay for our products, reduced or canceled orders of our products, continued or additional closing of restaurants, stores, entertainment or sports complexes, schools or other venues in which our products are sold, or reduced capacity at any of the foregoing, or our business partners’ inability to supply us with ingredients or other items necessary for us to make, manufacture, distribute or sell our products. Such adverse changes in our customers’ or business partners’ financial condition have alsohas resulted and may continue to result in our recording additional charges for our inability to recover or collect any accounts receivable, owned or leased assets, including certain foodservice, ~~and~~ vending and other equipment, or prepaid expenses. In addition, continued economic uncertainty associated with the COVID-19 pandemic has resulted in volatility in the global capital and credit markets which can impair our ability to access these markets on terms commercially acceptable to us, or at all.

While we have developed and implemented and continue to develop and implement health and safety protocols, business continuity plans and crisis management protocols in an effort to mitigate the negative impact of COVID-19 to our employees and our business, the extent of the impact of the pandemic on our business and financial results will continue to depend on numerous evolving factors that we are not able to accurately predict and which will vary by jurisdiction and market, including the duration and scope of the pandemic, the possible emergence and spread of new variants of the virus, the ~~likelihood~~availability, administration and effectiveness of ~~a resurgence of positive cases, the development and availability of effective~~ treatments and vaccines, ~~the speed at which such vaccines are administered,~~ global economic conditions during and after the pandemic, governmental actions that have been taken, or may be taken in the future, in response to the pandemic and changes in consumer behavior in response to the pandemic, some of which may be more than just temporary.

Risks Associated with Commodities and Our Supply Chain

Many of the commodities used in the production and transportation of our products are purchased in the open market. The prices we pay for such items are subject to fluctuation, and we manage this risk through the use of fixed-price contracts and purchase orders, pricing agreements and derivative instruments, including swaps and futures. During the 12 and 24 weeks ended June 11, 2022, we continued to experience inflationary pressures on transportation and commodity costs, which we expect to continue for the remainder of 2022. A number of external factors, including the deadly conflict in Ukraine, the COVID-19 pandemic, adverse weather conditions, supply chain disruptions (including raw material shortages) and labor shortages, have impacted and may continue to impact transportation and commodity

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costs. When prices increase, we may or may not pass on such increases to our customers without suffering reduced volume, revenue, margins and operating results.

See Note 8 to our condensed consolidated financial statements in this Form 10-Q and Note 9 to our consolidated financial statements in our 2021 Form 10-K for further information on how we manage our exposure to commodity prices.

Risks Associated with Climate Change

Certain jurisdictions in which our products are made, manufactured, distributed or sold have either imposed, or are considering imposing, new or increased legal and regulatory requirements to reduce or mitigate the potential effects of climate change, including regulation of greenhouse gas emissions and potential carbon pricing programs. These new or increased legal or regulatory requirements could result in significant increased costs of compliance and additional investments in facilities and equipment. However, we are unable to predict the scope, nature and timing of any new or increased environmental laws and regulations and therefore cannot predict the ultimate impact of such laws and regulations on our business or financial results. We continue to monitor existing and proposed laws and regulations in the jurisdictions in which our products are made, manufactured, distributed and sold and to consider actions we may take to potentially mitigate the unfavorable impact, if any, of such laws or regulations.

Risks Associated with International Operations

In the 12 weeks ended June ~~12, 2021, substantially all of~~11, 2022, our financial results outside of North America reflect the months of March, April and ~~May.~~May. In the 24 weeks ended June ~~12, 2021, substantially all of~~11, 2022, our financial results outside of North America reflect the months of January through May. In the 24 weeks ended June ~~12, 2021,~~11, 2022, our operations outside of the United States generated ~~42%~~41% of our consolidated net revenue, with Mexico, Canada, Russia, China, ~~South Africa and~~ the United Kingdom and South Africa comprising approximately 22% of our consolidated net revenue. As a result, we are exposed to foreign exchange risk in the international markets in ~~which~~which our products are made, manufactured, distributed or sold. In the 12 and 24 weeks ended June ~~12, 2021, favorable~~11, 2022, unfavorable foreign exchange ~~contributed~~reduced net revenue growth by 3 percentage points and 2 percentage points, respectively, ~~to net revenue growth,~~ primarily due to ~~appreciation~~declines in the Turkish lira, euro, ~~Canadian dollar~~Russian ruble and ~~Mexican peso.~~Egyptian pound. Currency declines against the U.S. dollar which are not offset could adversely impact our future financial results.

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In addition, volatile economic, political and social conditions and civil unrest in certain markets in which our products are made, manufactured, distributed or sold, including in Argentina, Brazil, China, Mexico, the Middle East, Russia, Turkey and ~~Turkey,~~Ukraine, and natural disasters, debt and credit issues and currency controls or fluctuations in certain of these international markets, continue to, and the threat or imposition of new or increased tariffs or sanctions or other impositions in or related to these international markets may, result in challenging operating environments. We continue to monitor the economic, operating and political environment in these markets closely, including risks of additional impairments or write-offs, and to identify actions to potentially mitigate any unfavorable impacts on our future results. ~~We also continue~~

See Notes 1 and 3 to ~~monitor the economic and political developments related to the United Kingdom’s withdrawal from the European Union (Brexit), including the effects~~our condensed consolidated financial statements in this Form 10-Q for a discussion of the ~~post-Brexit trade deal entered into between~~Russia-Ukraine conflict charges, including impairment charges, recognized in the ~~United Kingdom~~12 and ~~the European Union in December 2020, as well as the economic, operating and political environment in Russia and the potential impact for our Europe segment and other businesses.~~24 weeks ended June 11, 2022.

See Note 98 to our condensed consolidated financial statements in this Form 10-Q for the fair values of our financial instruments as of June ~~12, 2021~~11, 2022 and December ~~26, 2020~~25, 2021 and Note 9 to our consolidated financial statements in our ~~2020~~2021 Form 10-K for a discussion of these items. ~~Cautionary~~

Risks Associated with the Deadly Conflict in Ukraine

In addition to the risks associated with international operations discussed above, we continue to face risks associated with the deadly conflict in Ukraine. The conflict has continued to result in worldwide

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geopolitical and macroeconomic uncertainty, and the majority of our operations in Ukraine remain suspended. We are in the process of suspending sales of Pepsi-Cola and certain of our other global beverage brands and have suspended our discretionary capital investments and advertising and promotional activities in Russia, which has negatively impacted and could continue to negatively impact our business. We continue to offer our other products in Russia. Our operations in Russia and Ukraine, respectively, accounted for 4% and 0.2% of our consolidated net revenue for the 12 weeks ended June 11, 2022, 4% and 0.3% of our consolidated net revenue for the 24 weeks ended June 11, 2022 and 4% and 0.5% of our consolidated net revenue for both the 12 and 24 weeks ended June 12, 2021 and the year ended December 25, 2021. Our assets in Russia and Ukraine, respectively, were 5% and 0.3% of our consolidated assets as of December 25, 2021 and 4% and 0.1% of our consolidated assets as of June 11, 2022.

The conflict has resulted and could continue to result in volatile commodity markets, supply chain disruptions, increased risk of cyber incidents or other disruptions to our information systems, reputational risks, heightened risks to employee safety, significant volatility of the Russian ruble, limitations on access to credit markets, including working capital facilities, reduced availability and increased costs for transportation, energy, packaging, raw materials and other input costs, environmental, health and safety risks related to securing and maintaining facilities, additional sanctions, export controls and other regulations (including restrictions on the transfer of funds to and from Russia). The ongoing conflict could result in loss of assets or result in additional impairment charges. We cannot predict how and the extent to which the conflict will continue to affect our customers, operations or business partners or our ability to achieve certain of our sustainability goals. The conflict has adversely affected and could continue to adversely affect demand for our products and our global business. See Notes 1 and 3 to our condensed consolidated financial statements ~~included above~~in this Form 10-Q for a discussion of the Russia-Ukraine conflict charges, including impairment charges, recognized in the 12 and ~~in “Item 1A. Risk Factors”~~24 weeks ended June 11, 2022.

The extent of the impact of these tragic events on our business remains uncertain and ~~“Item 7. Management’s Discussion~~will continue to depend on numerous evolving factors that we are not able to accurately predict, including the duration and ~~Analysis~~scope of ~~Financial Condition~~the conflict, regional instability and ~~Results of Operations – Our Business Risks” in~~ongoing and additional financial and economic sanctions and export controls imposed by governments. We will continue to monitor and assess the situation as circumstances evolve and to identify actions to potentially mitigate any unfavorable impacts on our ~~2020 Form 10-K should be considered when evaluating our trends and~~ future results.

Imposition of Taxes and Regulations on our Products

Certain jurisdictions in which our products are made, manufactured, distributed or sold have either imposed, or are considering imposing, new or increased taxes or regulations on the manufacture, distribution or sale of our products or their packaging, ingredients or substances contained in, or attributes of, our products or their packaging, commodities used in the production of our products or their packaging or the recyclability or recoverability of our packaging. These taxes and regulations vary in scope and form. For example, some taxes apply to all beverages, including non-caloric beverages, while others apply only to beverages with a caloric sweetener (e.g., sugar). In addition, COVID-19 has resulted in increased regulatory focus on labeling in certain jurisdictions, including in Mexico which ~~recently~~ enacted product labeling requirements and limitations on the marketing of certain of our products as a result of ingredients or substances contained in such products. Further, some regulations apply to all products using certain types of packaging (e.g., plastic), while others are designed to increase the sustainability of packaging, encourage waste reduction and increased recycling rates or facilitate the waste management process or restrict the sale of products in certain packaging.

We sell a wide variety of beverages ~~foods~~ and ~~snacks~~convenient foods in more than 200 countries and territories and the profile of the products we sell, the amount of revenue attributable to such products and the type of packaging used vary by jurisdiction. Because of this, we cannot predict the scope or form potential taxes,

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regulations or other limitations on our products or their packaging may take, and therefore cannot predict the impact of such taxes, regulations or limitations on our financial results. In addition, taxes, regulations and limitations may impact us and our competitors differently. We continue to monitor existing and proposed taxes and regulations in the jurisdictions in which our products are made, manufactured, distributed and sold and to consider actions we may take to potentially mitigate the unfavorable impact, if any, of such taxes, regulations or limitations, including advocating alternative measures with respect to the imposition, form and scope of any such taxes, regulations or limitations.

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Retail Landscape

Our industry continues to be affected by disruption of the retail landscape, including the rapid growth in sales through e-commerce websites and mobile commerce applications, including through subscription services, the integration of physical and digital operations among retailers and the international expansion of hard discounters. We have seen and expect to continue to see a further shift to e-commerce, online-to-offline and other online purchasing by consumers, including as a result of the COVID-19 pandemic. We continue to monitor changes in the retail landscape and seek to identify actions we may take to build our global e-commerce and digital capabilities, such as expanding our direct-to-consumer business, and distribute our products effectively through all existing and emerging channels of trade and potentially mitigate any unfavorable impacts on our future results.

Cautionary statements included above and in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” in our 2021 Form 10-K should be considered when evaluating our trends and future results.

Results of Operations – Consolidated Review

Consolidated Results

Volume

Physical or unit volume is one of the key metrics management uses internally to make operating and strategic decisions, including the preparation of our annual operating plan and the evaluation of our business performance. We believe volume provides additional information to facilitate the comparison of our historical operating performance and underlying trends and provides additional transparency on how we evaluate our business because it measures demand for our products at the consumer level. Refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Financial Results – Volume” included in our ~~2020~~2021 Form 10-K for further information on volume. Beginning in the first quarter of 2022, unit volume growth adjusts for the impacts of acquisitions, divestitures and other structural changes. Further, unit volume growth will exclude the impact of an additional week of results every five or six years (53rd reporting week), where applicable, including in our fourth quarter 2022 financial results.

We ~~report~~reported substantially all of our international volume on a monthly calendar basis prior to the fourth quarter of 2021, and beginning in the fourth quarter of 2021, all of our international operations report on a monthly calendar basis. The 12 weeks ended June ~~12, 2021~~11, 2022 include volume outside of North America for the months of March, April and ~~May.~~May. The 24 weeks ended June ~~12, 2021~~11, 2022 include volume outside of North America for the months of January through May.

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Consolidated Net Revenue and Operating Profit


		12 Weeks Ended								24 Weeks Ended									12 Weeks Ended								24 Weeks Ended
		6/12/2021			6/13/2020			Change		6/12/2021			6/13/2020			Change			6/11/2022			6/12/2021			Change		6/11/2022			6/12/2021			Change
Net revenue	Net revenue	$	19,217		$	15,945		21	%	$	34,037		$	29,826		14	%	Net revenue	$	20,225		$	19,217		5	%	$	36,425		$	34,037		7	%
Operating profit	Operating profit	$	3,129		$	2,319		35	%	$	5,441		$	4,243		28	%	Operating profit	$	2,077		$	3,129		(34)	%	$	7,344		$	5,441		35	%
Operating profit margin		16.3		%	14.5		%	1.8		16.0		%	14.2		%	1.8
Operating margin																		Operating margin	10.3		%	16.3		%	(6.0)		20.2		%	16.0		%	4.2

See “Results of Operations – Division Review” for a tabular presentation and discussion of key drivers of net revenue.

12 Weeks

Operating profit decreased 34% and operating margin declined 6.0 percentage points. Operating profit performance was primarily driven by a 37-percentage-point impact of the charges associated with the Russia-Ukraine conflict and a 7-percentage-point impact of the Brand Portfolio Impairment Charges, partially offset by a 2.5-percentage-point impact of higher mark-to-market gains on commodity derivatives.

Operating profit performance was also positively impacted by net revenue growth and productivity savings, partially offset by certain operating cost increases and a 36-percentage-point impact of higher commodity costs. Additionally, gains on sales of assets positively contributed 5 percentage points to operating profit performance. The operating margin decline primarily reflects the impact of the charges associated with the Russia-Ukraine conflict and the Brand Portfolio Impairment Charges.

24 Weeks

Operating profit grew 35% and operating ~~profit~~ margin ~~increased 1.8~~improved 4.2 percentage points. Operating profit growth was primarily driven by ~~net revenue growth, productivity savings and~~ a ~~3.5-percentage-point~~61-percentage-point impact of ~~favorable foreign exchange,~~the gain associated with the Juice Transaction, partially offset by ~~certain operating cost increases,~~ a ~~10-percentage-point~~26-percentage-point impact of ~~higher commodity costs~~the charges associated with the Russia-Ukraine conflict and ~~higher advertising and marketing expenses.~~a 9-percentage-point impact of Brand Portfolio Impairment Charges.

Lower inventory fair value adjustments and merger and integration charges included in “Items Affecting Comparability” contributed 11 percentage points to operating profit growth. Additionally, lower charges taken as a result of the COVID-19 pandemic compared to the prior year contributed 14 percentage points to operating profit growth.

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~~24 Weeks~~

~~Operating profit grew 28% and operating profit margin increased 1.8 percentage points.~~ Operating profit growth was ~~primarily~~also driven by net revenue growth and productivity savings, partially offset by certain operating cost increases ~~an 8-percentage-point~~and a 33-percentage-point impact of higher commodity ~~costs and higher advertising and marketing expenses.~~

~~Lower inventory fair value adjustments and merger and integration charges and higher mark-to-market~~costs. Additionally, gains on ~~commodity derivatives both included in “Items Affecting Comparability”~~sales of assets contributed ~~6 percentage points and 5 percentage points, respectively, to operating profit growth. Additionally, lower charges taken as a result of the COVID-19 pandemic compared to the prior year contributed 9~~3 percentage points to operating profit growth. The operating margin improvement primarily reflects the impact of the gain associated with the Juice Transaction, partially offset by the charges associated with the Russia-Ukraine conflict and the Brand Portfolio Impairment Charges.

Juice Transaction

In the 24 weeks ended June 11, 2022, we sold our Tropicana, Naked and other select juice brands to PAI Partners, while retaining a 39% noncontrolling interest in the Tropicana JV, operating across North America and Europe. These juice businesses delivered approximately $3 billion in net revenue in 2021. In the U.S., PepsiCo acts as the exclusive distributor for Tropicana JV’s portfolio of brands for small-format and foodservice customers with chilled direct-store-delivery. See Note 11 to our condensed consolidated financial statements for further information.

Results of Operations – Division Review

While our financial results in North America are reported on a 12-week basis, substantially all of our international operations ~~report~~reported on a monthly calendar basis ~~for which~~prior to the fourth quarter of 2021. Beginning in the fourth quarter of 2021, all of our international operations reported on a monthly calendar basis. This change did not have a material impact on our condensed consolidated financial statements. For our international operations, the months of March, April and May are reflected in our results for the 12

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weeks ended June ~~12, 2021~~11, 2022, and the months of January through May are reflected in our results for the 24 weeks ended June ~~12, 2021.~~11, 2022.

In the discussions of net revenue and operating profit below, “effective net pricing” reflects the year-over-year impact of discrete pricing actions, sales incentive activities and mix resulting from selling varying products in different package sizes and in different countries and “net pricing” reflects the year-over-year combined impact of list price changes, weight changes per package, discounts and allowances.

See “Our Business Risks,” “Non-GAAP Measures” and “Items Affecting Comparability” for a discussion of items to consider when evaluating our results and related information regarding measures not in accordance with GAAP.

Net Revenue and Organic Revenue Growth

Organic revenue growth is a non-GAAP financial measure. For further information on this measure see “Non-GAAP Measures.”


		12 Weeks Ended 6/12/2021								12 Weeks Ended 6/11/2022
				Impact of				Impact of							Impact of			Impact of
		Reported % Change, GAAP Measure		Foreign exchange translation	Acquisitions and divestitures	Organic % Change, Non-GAAP Measure(a)			Organic volume(b)		Effective net pricing		Reported % Change, GAAP Measure			Foreign exchange translation	Acquisitions and divestitures	Organic % Change, Non-GAAP Measure(a)		Organic volume(b)	Effective net pricing
FLNA	FLNA	7	%	(1)	—	6	%		2		4	FLNA	14	%		—	—	14	%	—	14
QFNA	QFNA	(13)	%	(1)	—	(14)	%		(20)		6	QFNA	17	%		—	—	18	%	2	16
PBNA	PBNA	24	%	(1)	(2)	21	%		16		4.5	PBNA	(1)	%		—	9	9	%	—	9
LatAm	LatAm	26	%	(9)	—	16	%		4		12	LatAm	23	%		(2)	1	22	%	7	15
Europe	Europe	21	%	(5)	—	15	%		10		5	Europe	(8)	%		12	5	9	%	(8)	17
AMESA	AMESA	63	%	(9)	(38)	15	%		7		8	AMESA	6	%		7	10	23	%	14	9
APAC	APAC	41	%	(9)	(26)	6	%		4		2	APAC	3	%		2	7	13	%	10	2.5
Total	Total	21	%	(3)	(4)	13	%		7		5	Total	5	%		3	5	13	%	1	12

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		24 Weeks Ended 6/12/2021						24 Weeks Ended 6/11/2022
				Impact of					Impact of						Impact of					Impact of
		Reported % Change, GAAP Measure		Foreign exchange translation	Acquisitions and divestitures	Organic % Change, Non-GAAP Measure(a)				Organic volume(b)	Effective net pricing		Reported % Change, GAAP Measure			Foreign exchange translation	Acquisitions and divestitures	Organic % Change, Non-GAAP Measure(a)			Organic volume(b)	Effective net pricing
FLNA	FLNA	5	%	(1)	—	4	%			0.5	4	FLNA	14	%		—	—	14	%		1	13
QFNA	QFNA	(6)	%	(1)	—	(7)	%			(12)	5	QFNA	14	%		—	—	14	%		—	14
PBNA	PBNA	15	%	(1)	(3)	11	%			6	5	PBNA	2	%		—	8	10	%		2	9
LatAm	LatAm	12	%	(1)	—	10	%			2	8	LatAm	21	%		—	1	22	%		12	10
Europe	Europe	11	%	(2)	—	9	%			7	2.5	Europe	(5)	%		11	4	9	%		(5)	15
AMESA	AMESA	54	%	(5.5)	(39)	9	%			5	4.5	AMESA	9	%		6	7	21	%		13	8
APAC	APAC	53	%	(8)	(34)	11	%			9	2	APAC	5.5	%		2	4	11	%		6	5
Total	Total	14	%	(2)	(5)	8	%			3	5	Total	7	%		2	4	13	%		2.5	11

(a)Amounts may not sum due to rounding.

(b)Excludes the impact of acquisitions, divestitures and ~~divestitures, including the impact of an extra month of volume in the 12 and 24 weeks ended June 12, 2021 as we aligned Pioneer Foods’ reporting calendar with that of our AMESA division.~~other structural changes. In certain instances, the impact of organic volume growth on net revenue growth differs from the unit volume growth disclosed in the following divisional discussions due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between bottler case sales and concentrate shipments and equivalents (CSE). ~~Our~~We report net revenue ~~excludes nonconsolidated joint venture volume, and, for~~from our franchise-owned beverage businesses is based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.

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

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

~~Operating Profit and Operating Profit Adjusted for Items Affecting Comparability~~

12 Weeks Ended 6/12/2021
Items Affecting Comparability(a)
Reported, GAAP Measure(b)
Mark-to-market net impact Restructuring and impairment charges Merger and integration charges
Core,
Non-GAAP Measure(b)
FLNA $ 1,382 $ — $ 3 $ — $ 1,385
QFNA 128 — — — 128
PBNA 809 — 1 1 811
LatAm 356 — 6 — 362
Europe 405 — 15 — 420
AMESA 256 — 3 6 265
APAC 192 — 1 3 196
Corporate unallocated expenses (399) (20) 6 15 (398)
Total $ 3,129 $ (20) $ 35 $ 25 $ 3,169

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12 Weeks Ended 6/13/2020
Items Affecting Comparability(a)
Reported,
GAAP Measure(b)
Mark-to-market net impact Restructuring
and impairment charges Inventory fair value adjustments and merger and integration charges
Core,
Non-GAAP Measure(b)
FLNA $ 1,278 $ — $ 2 $ 2 $ 1,282
QFNA 196 — — — 196
PBNA 397 — — 43 440
LatAm 219 — 4 — 223
Europe 351 — 8 — 359
AMESA 59 — 5 157 221
APAC 189 — 3 — 192
Corporate unallocated expenses (370) (45) 2 16 (397)
Total $ 2,319 $ (45) $ 24 $ 218 $ 2,516
Operating Profit and Operating Profit Adjusted for Items Affecting Comparability


		24 Weeks Ended 6/12/2021								12 Weeks Ended 6/11/2022
				Items Affecting Comparability(a)												Items Affecting Comparability(a)
		Reported, GAAP Measure(b)		Mark-to-market net impact		Restructuring and impairment charges		Merger and integration charges			Core, Non-GAAP Measure(b)			Reported, GAAP Measure(b)		Mark-to-market net impact		Restructuring and impairment charges		Acquisition and divestiture-related charges		Gain associated with the Juice Transaction		Russia-Ukraine conflict charges		Brand Portfolio Impairment Charges		Core, Non-GAAP Measure(b)
FLNA	FLNA	$	2,622	$	—	$	18	$	2		$	2,642	FLNA	$	1,448	$	—	$	3	$	—	$	—	$	—	$	—	$	1,451
QFNA	QFNA	278		—		—		—			278		QFNA	135		—		—		—		—		—		—		135
PBNA	PBNA	1,175		—		5		2			1,182		PBNA	651		—		2		2		(13)		—		141		783
LatAm	LatAm	574		—		8		—			582		LatAm	420		—		8		—		—		—		83		511
Europe	Europe	536		—		26		—			562		Europe	(797)		—		12		3		—		1,165		—		383
AMESA	AMESA	394		—		4		7			405		AMESA	290		—		3		—		—		—		—		293
APAC	APAC	400		—		1		3			404		APAC	206		—		3		—		—		—		—		209
Corporate unallocated expenses	Corporate unallocated expenses	(538)		(95)		10		1			(622)		Corporate unallocated expenses	(276)		(98)		14		3		—		—		—		(357)
Total	Total	$	5,441	$	(95)	$	72	$	15		$	5,433	Total	$	2,077	$	(98)	$	45	$	8	$	(13)	$	1,165	$	224	$	3,408


	12 Weeks Ended 6/12/2021
			Items Affecting Comparability(a)
	Reported, GAAP Measure(b)		Mark-to-market net impact		Restructuring and impairment charges		Acquisition and divestiture-related charges		Core, Non-GAAP Measure(b)
FLNA	$	1,382	$	—	$	3	$	—	$	1,385
QFNA	128		—		—		—		128
PBNA	809		—		1		1		811
LatAm	356		—		6		—		362
Europe	405		—		15		—		420
AMESA	256		—		3		6		265
APAC	192		—		1		3		196
Corporate unallocated expenses	(399)		(20)		6		15		(398)
Total	$	3,129	$	(20)	$	35	$	25	$	3,169


	24 Weeks Ended 6/11/2022
			Items Affecting Comparability(a)
	Reported, GAAP Measure(b)		Mark-to-market net impact		Restructuring and impairment charges		Acquisition and divestiture-related charges		Gain associated with the Juice Transaction		Russia-Ukraine conflict charges		Brand Portfolio Impairment Charges		Core, Non-GAAP Measure(b)
FLNA	$	2,744	$	—	$	6	$	—	$	—	$	—	$	—	$	2,750
QFNA	294		—		—		—		—		—		—		294
PBNA	4,085		—		5		39		(3,037)		—		141		1,233
LatAm	743		—		14		—		—		—		83		840
Europe	(933)		—		19		13		(298)		1,406		241		448
AMESA	470		—		5		—		—		—		—		475
APAC	421		—		4		—		—		—		—		425
Corporate unallocated expenses	(480)		(210)		19		6		—		—		—		(665)
Total	$	7,344	$	(210)	$	72	$	58	$	(3,335)	$	1,406	$	465	$	5,800

24 Weeks Ended 6/13/2020
Items Affecting Comparability(a)
Reported,
GAAP Measure(b)
Mark-to-market net impact Restructuring
and impairment charges Inventory fair value adjustments and merger and integration charges
Core,
Non-GAAP Measure(b)
FLNA $ 2,480 $ — $ 7 $ 25 $ 2,512
QFNA 346 — 1 — 347
PBNA 694 — 3 43 740
LatAm 450 — 9 — 459
Europe 497 — 16 — 513
AMESA 193 — 7 159 359
APAC 331 — 3 — 334
Corporate unallocated expenses (748) 97 10 16 (625)
Total $ 4,243 $ 97 $ 56 $ 243 $ 4,639

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	24 Weeks Ended 6/12/2021
			Items Affecting Comparability(a)
	Reported, GAAP Measure(b)		Mark-to-market net impact		Restructuring and impairment charges		Acquisition and divestiture-related charges		Core, Non-GAAP Measure(b)
FLNA	$	2,622	$	—	$	18	$	2	$	2,642
QFNA	278		—		—		—		278
PBNA	1,175		—		5		2		1,182
LatAm	574		—		8		—		582
Europe	536		—		26		—		562
AMESA	394		—		4		7		405
APAC	400		—		1		3		404
Corporate unallocated expenses	(538)		(95)		10		1		(622)
Total	$	5,441	$	(95)	$	72	$	15	$	5,433

(a)See “Items Affecting Comparability.”

(b)Includes the charges taken as a result of the COVID-19 pandemic. See Note 1 to our condensed consolidated financial statements for further information.

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


		12 Weeks Ended 6/12/2021							12 Weeks Ended 6/11/2022
				Impact of Items Affecting Comparability(a)						Impact of						Impact of Items Affecting Comparability(a)								Impact of
		Reported % Change, GAAP Measure		Mark-to-market net impact	Restructuring and impairment charges	Inventory fair value adjustments and merger and integration charges	Core % Change, Non-GAAP Measure(b)			Foreign exchange translation	Core Constant Currency % Change, Non-GAAP Measure(b)			Reported % Change, GAAP Measure		Mark-to-market net impact	Restructuring and impairment charges	Acquisition and divestiture-related charges	Gain associated with the Juice Transaction	Russia-Ukraine conflict charges	Brand Portfolio Impairment Charges	Core % Change, Non-GAAP Measure(b)		Foreign exchange translation	Core Constant Currency % Change, Non-GAAP Measure(b)
FLNA	FLNA	8	%	—	—	—	8	%		(1)	7	%	FLNA	5	%	—	—	—	—	—	—	5	%	—	5	%
QFNA	QFNA	(34)	%	—	—	—	(34)	%		—	(35)	%	QFNA	5	%	—	—	—	—	—	—	5	%	—	6	%
PBNA	PBNA	104	%	—	0.5	(20)	84	%		(2)	83	%	PBNA	(20)	%	—	—	—	(2)	—	17	(3)	%	—	(3)	%
LatAm	LatAm	63	%	—	(1)	—	62	%		(16)	47	%	LatAm	18	%	—	—	—	—	—	23	41	%	(2)	39	%
Europe	Europe	15	%	—	1	—	17	%		(6)	11	%	Europe	(297)	%	—	(1)	1	—	288	—	(9)	%	11	2	%
AMESA	AMESA	325	%	—	(2)	(303)	20	%		(3)	17	%	AMESA	14	%	—	—	(3)	—	—	—	10	%	7	18	%
APAC	APAC	2	%	—	(1)	1	2	%		(5)	(3)	%	APAC	7	%	—	1	(1)	—	—	—	7	%	4	10	%
Corporate unallocated expenses	Corporate unallocated expenses	7	%	(7)	(1)	—	—	%		—	—	%	Corporate unallocated expenses	(31)	%	20	(2.5)	3	—	—	—	(10)	%	—	(10)	%
Total	Total	35	%	1	1	(11)	26	%		(3.5)	22	%	Total	(34)	%	(2.5)	—	(0.5)	—	37	7	8	%	2	10	%


		24 Weeks Ended 6/12/2021								24 Weeks Ended 6/11/2022
				Impact of Items Affecting Comparability(a)					Impact of							Impact of Items Affecting Comparability(a)								Impact of
		Reported % Change, GAAP Measure		Mark-to-market net impact	Restructuring and impairment charges	Inventory fair value adjustments and merger and integration charges	Core % Change, Non-GAAP Measure(b)		Foreign exchange translation		Core Constant Currency % Change, Non-GAAP Measure(b)			Reported % Change, GAAP Measure		Mark-to-market net impact	Restructuring and impairment charges	Acquisition and divestiture-related charges	Gain associated with the Juice Transaction	Russia-Ukraine conflict charges	Brand Portfolio Impairment Charges	Core % Change, Non-GAAP Measure(b)		Foreign exchange translation	Core Constant Currency % Change, Non-GAAP Measure(b)
FLNA	FLNA	6	%	—	0.5	(1)	5	%	(0.5)		5	%	FLNA	5	%	—	(0.5)	—	—	—	—	4	%	—	4	%
QFNA	QFNA	(20)	%	—	—	—	(20)	%	—		(20)	%	QFNA	6	%	—	—	—	—	—	—	6	%	—	6	%
PBNA	PBNA	69	%	—	0.5	(10)	60	%	(1)		58	%	PBNA	248	%	—	—	3	(259)	—	12	4	%	—	4.5	%
LatAm	LatAm	28	%	—	(1)	—	27	%	(4)		23	%	LatAm	29	%	—	1	—	—	—	14	44	%	—	44	%
Europe	Europe	8	%	—	2	—	9	%	(3)		6	%	Europe	(274)	%	—	(1)	2	(56)	263	45	(20)	%	9	(11)	%
AMESA	AMESA	103	%	—	(2)	(89)	13	%	(2)		11	%	AMESA	19	%	—	—	(2)	—	—	—	17	%	5	23	%
APAC	APAC	21	%	—	1	(1)	21	%	(6)		15	%	APAC	5	%	—	—	—	—	—	—	5	%	2	8	%
Corporate unallocated expenses	Corporate unallocated expenses	(28)	%	26	—	2	(0.5)	%	—		(0.5)	%	Corporate unallocated expenses	(11)	%	20	(2)	(1)	—	—	—	7	%	—	7	%
Total	Total	28	%	(5)	—	(6)	17	%	(2)		15	%	Total	35	%	(2)	—	1	(61)	26	9	7	%	2	8	%

(a)See “Items Affecting Comparability” for further information.

(b)Amounts may not sum due to rounding.

Table of Contents

FLNA

12 Weeks

Net revenue grew 7%14%, primarily driven by effective net ~~pricing and organic volume growth.~~ pricing.

Unit volume ~~grew 1%~~declined 2%, primarily reflecting a double-digit ~~growth~~decline in our Sabra joint venture products and a high-single-digit decline in variety packs, partially offset by low-single-digit growth in trademark Doritos and Ruffles and double-digit growth in trademark Popcorners.

Operating profit increased 5%, primarily reflecting the effective net pricing and productivity savings. These impacts were partially offset by certain operating cost increases, including strategic initiatives and incremental transportation costs, and a 17-percentage-point impact of higher commodity costs, primarily cooking oil, packaging material and seasoning.

24 Weeks

Net revenue grew 14%, primarily driven by effective net pricing.

Unit volume declined 1%, primarily reflecting a double-digit decline in our Sabra joint venture products and a mid-single-digit decline in trademark ~~Tostitos.~~Tostitos, partially offset by double-digit growth in trademark Popcorners and mid-single-digit growth in trademark Ruffles.

Operating profit increased 8%5%, primarily reflecting ~~a 9-percentage-point impact of lower charges taken as a result of the COVID-19 pandemic,~~ the net revenue growth and productivity savings. These impacts were partially offset by certain operating cost increases, including strategic initiatives and incremental transportation costs, and a 15-percentage-point impact of higher ~~advertising~~commodity costs, primarily cooking oil, packaging material and ~~marketing expenses.~~seasoning.

~~Table of Contents~~

QFNA

2412 Weeks

Net revenue grew 5%17%, primarily driven by effective net pricing and an increase in organic ~~volume growth.~~ volume.

Unit volume grew ~~0.5%~~2%, primarily reflecting ~~a full 24 weeks of results of our BFY Brands acquisition and~~ double-digit growth in ~~variety packs,~~bars, rice/pasta sides and trademark Gamesa, partially offset byby a ~~mid-single-digit~~double-digit decline in ~~trademark Tostitos~~pancake syrups and ~~a low-single-digit decline in trademark Cheetos.~~mixes.

Operating profit ~~increased 6%~~grew 5%, primarily reflecting the net revenue growth and productivity ~~savings and a 5-percentage-point impact of lower charges taken as a result of the COVID-19 pandemic,~~savings. These impacts were partially offset by ~~certain operating cost increases.~~

~~QFNA~~

~~12 Weeks~~

~~Net revenue declined 13% and unit volume declined 21%. The net revenue decline primarily reflects~~ a decrease in organic volume, partially offset by favorable mix. The unit volume decline was primarily driven by double-digit declines in oatmeal, pancake syrup and mix, and ready-to-eat cereals, partially offset by Cheetos macaroni and cheese, which was introduced in the third quarter of 2020, and double-digit growth in lite snacks.

Operating profit declined 34%, primarily reflecting the net revenue performance and certain operating cost increases, partially offset by productivity savings and lower advertising and marketing expenses. Favorable settlements of promotional spending accruals compared to the prior year and an asset write-off in the prior year each positively impacted operating profit performance by 4 percentage points. Additionally, lower charges taken as a result of the COVID-19 pandemic positively impacted operating profit performance by 3 percentage points.

The impact of the COVID-19 pandemic contributed to a current-year decrease in consumer demand, which had a negative impact on net revenue, unit volume and operating profit performance compared to the significant COVID-19-related surge in demand in the prior year.

~~24 Weeks~~

Net revenue declined 6% and unit volume declined 12%. The net revenue decline primarily reflects a decrease in organic volume, partially offset by favorable pricing and mix. The unit volume decline was primarily driven by double-digit declines in oatmeal, pancake syrup and mix, and ready-to-eat cereals, partially offset by Cheetos macaroni and cheese, which was introduced in the third quarter of 2020, and double-digit growth in lite snacks.

~~Operating profit declined 20%, primarily reflecting the net revenue performance, certain operating cost increases and a 3-percentage-point~~38-percentage-point impact of higher commodity costs, ~~partially offset by productivity savings,~~primarily oats and ingredients, certain operating cost increases, including incremental transportation costs, and a ~~4-percentage-point~~7-percentage-point impact of less favorable settlements of promotional spending accruals compared to the prior ~~year~~year.

24 Weeks

Net revenue grew 14%, primarily driven by effective net pricing.

Unit volume grew slightly, primarily reflecting double-digit growth in rice/pasta sides and ~~lower advertising~~trademark Gamesa and ~~marketing expenses.~~high-single-digit growth in bars, partially offset by a double-digit decline in pancake syrups and mixes and a low-single-digit decline in oatmeal.

~~The~~Operating profit grew 6%, primarily reflecting the effective net pricing and productivity savings. These impacts were partially offset by a 24-percentage-point impact of ~~the COVID-19 pandemic contributed to~~higher commodity costs, primarily oats and ingredients, certain operating cost increases, including incremental transportation costs, and a ~~current-year decrease in consumer demand, which had a negative~~5-percentage-point impact ~~on net revenue, unit volume and operating profit performance~~of less favorable settlements of promotional spending accruals compared to ~~the significant COVID-19-related surge in demand in~~ the prior year.

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PBNA

12 Weeks

Net revenue ~~increased 24%~~decreased 1%, primarily driven by ~~an increase in~~a 9-percentage-point unfavorable impact of the Juice Transaction and a slight organic volume ~~and~~decrease, largely offset by effective net pricing.

Unit volume ~~increased 16%~~decreased 1%, driven by a ~~12% increase~~2% decrease in carbonated soft drink (CSD) volume, ~~and~~partially offset by a ~~20%~~1% increase in our non-carbonated beverage (NCB) volume. The NCB volume increase primarily reflected ~~double-digit increases~~a mid-single-digit increase in Gatorade sports drinks and a low-single-digit increase in our overall water portfolio, ~~Gatorade sports drinks,~~partially offset by a high-single-digit decrease in our energy portfolio ~~Lipton ready-to-drink teas~~ and a mid-single-digit decrease in our juice and juice drinks ~~portfolio.~~portfolio (adjusted for the impact of the Juice Transaction).

Operating profit ~~increased 104%~~decreased 20%, primarily reflecting ~~the net revenue growth, a 33-percentage-point impact of lower charges taken as a result of the COVID-19 pandemic and productivity savings. These impacts were partially offset by~~ certain operating cost increases, including incremental transportation ~~costs, higher advertising~~ and ~~marketing expenses,~~information technology costs, and a ~~12-percentage-point~~35-percentage-point impact of higher commodity ~~costs. Higher prior-year merger~~costs, primarily aluminum and ~~integration charges related~~resin, offset by the effective net pricing and productivity savings. Operating profit performance was also negatively impacted by a 9-percentage-point impact of the loss of net revenue due to ~~our Rockstar acquisition contributed 20 percentage points to operating profit growth. Additionally,~~the Juice Transaction, a 5-percentage-point impact of less favorable ~~settlements of promotional spending accruals~~insurance adjustments compared to the prior year ~~contributed 8 percentage points to operating profit growth.~~

~~The recovery from the COVID-19 pandemic contributed to a current-year increase in consumer demand, which had a positive impact on net revenue, unit volume and operating profit performance.~~

~~24 Weeks~~

~~Net revenue increased 15%, primarily driven by an increase in organic volume, effective net pricing~~ and a 3-percentage-point impact of ~~acquisitions.~~ certain costs associated with remediating a service disruption from a third-party payroll service provider. These impacts were offset by an 18-percentage-point impact of a current-year gain associated with the sale of an asset.

As a result of our decision to terminate the agreement with Vital to distribute Bang Energy drinks, we recorded impairment and other related charges which negatively impacted operating profit performance by 17 percentage points.

24 Weeks

Net revenue increased 2%, primarily driven by effective net pricing and an increase in organic volume. The Juice Transaction reduced net revenue growth by 8 percentage points.

Unit volume increased 7%1%, driven by a 5%4% increase in ~~CSD~~NCB volume, ~~and~~partially offset by a ~~9% increase~~1% decrease in ~~NCB~~CSD volume. The NCB volume increase primarily reflected a high-single-digit increase in Gatorade sports drinks ~~a double-digit increase in our energy portfolio, primarily due to acquisitions,~~and a mid-single-digit increase in our overall water portfolio, partially offset by a low-single-digit decrease in our juice and ~~a high-single-digit increase in Lipton ready-to-drink teas.~~juice drinks portfolio (adjusted for the impact of the Juice Transaction).

Operating profit increased ~~69%~~248%, primarily reflecting a 259-percentage-point impact of the gain of $3.0 billion associated with the Juice Transaction, partially offset by a 3-percentage-point impact of related transaction costs of $39 million. Operating profit growth was also driven by the net revenue growth ~~a 33-percentage-point impact of lower charges taken as a result of the COVID-19 pandemic~~ and productivity ~~savings. These impacts were partially~~savings, largely offset by certain operating cost increases, including incremental transportation and information technology costs, ~~higher advertising~~ and ~~marketing expenses, and an 8-percentage-point~~a 39-percentage-point impact of higher commodity ~~costs. Higher prior-year merger~~costs, primarily aluminum and ~~integration charges related to our Rockstar acquisition~~resin. A current-year gain associated with the sale of an asset contributed 1013 percentage points to operating profit growth. Additionally, operating profit growth was reduced by an 11-percentage-point impact of the loss of net revenue due to the Juice Transaction, a 5-percentage-point impact of certain costs associated with remediating a service disruption from a third-party payroll service provider and a 4-percentage-point impact of less favorable settlements of promotional spending accruals compared to the prior ~~year~~year.

As a result of our decision to terminate the agreement with Vital to distribute Bang Energy drinks, we recorded impairment and ~~acquisitions each contributed 7 percentage points to~~other related charges which negatively impacted operating profit ~~growth.~~

~~The recovery from the COVID-19 pandemic contributed to a current-year increase in consumer demand, which had a positive impact on net revenue, unit volume and operating profit performance.~~

~~LatAm~~

performance by 12 ~~Weeks~~

~~Net revenue increased 26%, reflecting effective net pricing, a 9-percentage-point impact of favorable foreign exchange and organic volume growth.~~

~~Snacks unit volume grew 3%, primarily reflecting high-single-digit growth in Brazil, partially offset by a low-single-digit decline in Mexico.~~

~~Beverage unit volume grew 13%, primarily reflecting double-digit growth in Argentina and Chile, high-single-digit growth in Guatemala and Mexico and mid-single-digit growth in Brazil.~~percentage points.

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Operating profit increased 63%, primarily reflecting the net revenue growth, productivity savings and a 16-percentage-point impact of favorable foreign exchange. These impacts were partially offset by a 33-percentage-point impact of higher commodity costs, certain operating cost increases and higher advertising and marketing expenses. Additionally, lower charges taken as a result of the COVID-19 pandemic contributed 7 percentage points to operating profit growth.LatAm

~~The recovery from the COVID-19 pandemic contributed to a current-year increase in consumer demand, which had a positive impact on net revenue, unit volume and operating profit performance.~~

2412 Weeks

Net revenue increased ~~12%~~23%, primarily reflecting effective net pricing and organic volume growth.

~~Snacks~~Convenient foods unit volume grew 1%6%, primarily reflecting ~~mid-single-digit~~high-single-digit growth in ~~Brazil,~~Mexico, partially offset by a ~~low-single-digit~~mid-single-digit decline in ~~Mexico.~~Brazil.

Beverage unit volume grew 6%9%, primarily reflecting double-digit growth in Argentina and Chile and ~~mid-single-digit~~high-single-digit growth ~~in Guatemala, partially offset by a low-single-digit decline~~ in Brazil. Additionally, Mexico and ~~Honduras~~Guatemala each experienced mid-single-digit growth.

Operating profit increased 28%, primarily reflecting the net revenue growth, productivity savings and a 4-percentage-point impact of favorable foreign exchange. These impacts were partially offset by a 26-percentage-point impact of higher commodity costs and certain operating cost increases.

~~The recovery from the COVID-19 pandemic contributed to a current-year increase in consumer demand, which had a positive impact on net revenue, unit volume and operating profit performance.~~

~~Europe~~

~~12 Weeks~~

~~Net revenue increased 21%, reflecting organic volume growth, effective net pricing and a 5-percentage-point impact of favorable foreign exchange.~~

Snacks unit volume grew 6%, primarily reflecting double-digit growth in Turkey, France and Poland and high-single-digit growth in Russia, partially offset by a low-single-digit decline in the United Kingdom. Additionally, the Netherlands experienced mid-single-digit growth.

Beverage unit volume grew 17%, primarily reflecting double-digit growth in France, Russia and the United Kingdom. Additionally, Germany experienced double-digit growth and Turkey experienced mid-single-digit growth.

~~Operating profit increased 15%~~18%, primarily reflecting the net revenue growth and productivity savings, partially offset by certain operating cost increases and a ~~21-percentage-point~~40-percentage-point impact of higher commodity costs, ~~a 10-percentage-point impact of a gain on an asset sale~~primarily cooking oil and packaging material. Impairment and other charges associated with our decision to sell or discontinue certain non-strategic brands reduced operating profit growth by 23 percentage points. Certain indirect tax credits in ~~the prior year,~~Brazil and ~~higher advertising and marketing expenses. Additionally,~~ lower charges taken as a result of the COVID-19 pandemic ~~and favorable foreign exchange~~ contributed 107 percentage points and 64 percentage points, respectively, to operating profit growth.

~~The recovery from the COVID-19 pandemic contributed to a current-year increase in consumer demand, which had a positive impact on net revenue, unit volume and operating profit performance.~~

~~Table of Contents~~

24 Weeks

Net revenue increased ~~11%~~21%, primarily reflecting organic volume growth and effective net ~~pricing and a 2-percentage-point impact of favorable foreign exchange.~~pricing.

~~Snacks~~Convenient foods unit volume grew 5%6%, primarily reflecting high-single-digit growth in Mexico, partially offset by a low-single-digit decline in Brazil.

Beverage unit volume grew 8%, primarily reflecting double-digit growth in ~~Turkey~~Argentina, Peru and Chile and high-single-digit growth in ~~Russia, Poland~~Brazil. Additionally, Mexico and ~~France, partially offset by a slight decline in the United Kingdom and a mid-single-digit decline in Spain. Additionally, the Netherlands experienced low-single-digit growth.~~

~~Beverage unit volume grew 13%, primarily reflecting double-digit growth in Russia and France. Additionally, Germany and the United Kingdom~~Guatemala each experienced ~~double-digit growth and Turkey experienced high-single-digit~~mid-single-digit growth.

Operating profit increased 8%29%, primarily reflecting the net revenue growth and productivity savings, partially offset by certain operating cost ~~increases,~~increases and a ~~21-percentage-point~~40-percentage-point impact of higher commodity costs, ~~largely due~~primarily cooking oil and packaging material. Impairment and other charges associated with our decision to ~~transaction-related foreign exchange,~~sell or discontinue certain non-strategic brands reduced operating profit growth by 14 percentage points. Certain indirect tax credits in Brazil and ~~a 7-percentage-point impact of a gain on an asset sale in the prior year. Additionally,~~ lower charges ~~taken~~taken as a result of the COVID-19 pandemic ~~and favorable foreign exchange~~ contributed 76 percentage points and 34 percentage points, respectively, to operating profit growth.

~~The recovery from the COVID-19 pandemic contributed to a current-year increase in consumer demand, which had a positive impact on net revenue, unit volume and operating profit performance.~~

~~AMESA~~Europe

12 Weeks

Net revenue ~~increased 63%~~decreased 8%, reflecting a ~~36-percentage-point~~12-percentage-point impact of ~~our Pioneer Foods acquisition, which included the~~unfavorable foreign exchange, an organic volume decline and a 5-percentage-point unfavorable impact of ~~an extra month of net revenue as we aligned Pioneer Foods’ reporting calendar with that of our AMESA division, as well as a 9-percentage-point impact of favorable foreign exchange,~~the Juice Transaction, partially offset by effective net ~~pricing and organic volume growth.~~pricing.

~~Snacks~~Convenient foods unit volume ~~grew 116%~~declined 7%, primarily reflecting a 116-percentage-point impact of our Pioneer Foods acquisition, which included the impact of an extra month of unit volume as we aligned Pioneer Foods’ reporting calendar with that of our AMESA division, double-digit ~~growth~~decline in ~~India~~Russia and ~~Pakistan~~high-single-digit declines in Poland and ~~mid-single-digit~~France, partially offset by low-single-digit growth in the ~~Middle East, partially offset by a high-single-digit decline in South Africa (excluding our Pioneer Foods acquisition).~~

~~Beverage unit volume grew 38%, primarily reflecting a 4-percentage-point impact of our Pioneer Foods acquisition~~United Kingdom and double-digit growth in ~~India.~~Turkey. Additionally, the ~~Middle East and Pakistan each~~Netherlands experienced ~~double-digit growth and Nigeria experienced~~a mid-single-digit ~~growth.~~decline.

~~Operating profit increased 325%~~Beverage unit volume declined 8%, primarily reflecting ~~a 303-percentage-point impact of the prior-year merger~~double-digit declines in Germany and ~~integration charges associated with our Pioneer Foods acquisition, the net revenue growth and productivity savings. These impacts were~~Russia, partially offset by ~~certain operating cost increases, higher advertising~~double-digit growth in Turkey and ~~marketing expenses and~~slight growth in France. Additionally, the United Kingdom experienced a 10-percentage-point impact of higher commodity costs. Additionally, lower charges taken as a result of the COVID-19 pandemic and our Pioneer Foods acquisition contributed 6 percentage points and 3 percentage points, respectively, to operating profit growth.

~~The recovery from the COVID-19 pandemic contributed to a current-year increase in consumer demand, which had a positive impact on net revenue, unit volume and operating profit performance.~~low-single-digit decline.

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Operating profit decreased 297%, primarily reflecting a 288-percentage-point unfavorable impact of charges associated with the Russia-Ukraine conflict. Operating profit performance was also negatively impacted by a 67-percentage-point impact of higher commodity costs, primarily packaging material, raw milk and potatoes, certain operating cost increases and the organic volume decline. These impacts were partially offset by the effective net pricing, productivity savings and lower advertising and marketing expenses. Unfavorable foreign exchange negatively impacted operating profit performance by 11 percentage points.

24 Weeks

Net revenue decreased 5%, reflecting an 11-percentage-point impact of unfavorable foreign exchange, an organic volume decline and a 4-percentage-point unfavorable impact of the Juice Transaction, partially offset by effective net pricing.

Convenient foods unit volume declined 4%, primarily reflecting double-digit declines in Russia and Poland and a mid-single-digit decline in France, partially offset by low-single-digit growth in the United Kingdom and high-single-digit growth in Turkey. Additionally, the Netherlands experienced a low-single-digit decline.

Beverage unit volume declined 5%, primarily reflecting double-digit declines in Germany and Russia, partially offset by mid-single-digit growth in Turkey, low-single-digit growth in France and slight growth in the United Kingdom.

Operating profit decreased 274%, primarily reflecting a 263-percentage-point unfavorable impact of charges associated with the Russia-Ukraine conflict and a 45-percentage-point unfavorable impact of impairment of intangible assets related to the discontinuation or repositioning of certain juice and dairy brands in Russia, partially offset by a 56-percentage-point favorable impact of the gain associated with the Juice Transaction. Operating profit performance was also negatively impacted by a 76-percentage-point impact of higher commodity costs, primarily packaging material, raw milk and cooking oil, certain operating cost increases, the organic volume decline and a 7-percentage-point impact of payments to employees for a change in pension benefits. These impacts were partially offset by the effective net pricing, productivity savings and lower advertising and marketing expenses. Unfavorable foreign exchange negatively impacted operating profit performance by 9 percentage points.

AMESA

12 Weeks

Net revenue increased ~~54%~~6%, primarily reflecting organic volume growth and effective net pricing, partially offset by a ~~38-percentage-point impact of our Pioneer Foods acquisition, which included the~~10-percentage-point unfavorable impact of an extra month of net revenue in 2021 as we aligned Pioneer Foods’ reporting calendar with that of our AMESA ~~division, as well as a 5.5-percentage-point impact of favorable~~division. Unfavorable foreign exchange ~~organic volume~~reduced net revenue growth ~~and effective net pricing.~~by 7 percentage points.

~~Snacks~~Convenient foods unit volume grew ~~146%~~10%, primarily reflecting a 145-percentage-point impact of our Pioneer Foods acquisition, which included the impact of an extra month of unit volume as we aligned Pioneer Foods’ reporting calendar with that of our AMESA division, double-digit ~~growth in India and Pakistan and low-single-digit~~ growth in the Middle East ~~partially offset by a high-single-digit decline in~~and India. Additionally, South Africa ~~(excluding our Pioneer Foods acquisition).~~experienced high-single-digit growth and Pakistan experienced double-digit growth.

Beverage unit volume grew ~~26%~~28%, primarily reflecting ~~a 4-percentage-point impact of our Pioneer Foods acquisition and~~ double-digit growth in ~~India and Pakistan.~~India. Additionally, the Middle East, Nigeria and Pakistan each experienced double-digit ~~growth and Nigeria experienced mid-single-digit~~ growth.

Operating profit increased ~~103%~~14%, primarily reflecting ~~an 89-percentage-point impact of the prior-year merger and integration charges associated with our Pioneer Foods acquisition,~~ the net revenue growth and productivity savings. These impacts were partially offset by ~~certain operating cost increases,~~ a ~~7-percentage-point~~51-percentage-point impact of higher commodity costs, primarily packaging material and cooking oil, certain operating cost increases and higher advertising and marketing expenses. ~~Additionally, lower charges taken as a result of the COVID-19 pandemic and our Pioneer Foods acquisition each contributed 4 percentage points to operating profit growth.~~

~~The recovery from the COVID-19 pandemic contributed to a current-year increase in consumer demand, which had a positive impact on net revenue, unit volume and operating profit performance.~~

~~APAC~~

~~12 Weeks~~

Net revenue increased 41%, reflecting a 26-percentage-point impact of our Be & Cheery acquisition, which included the impact of an extra month of net revenue as we aligned Be & Cheery’s reporting calendar with that of our APAC division, as well as a 9-percentage-point impact of favorableUnfavorable foreign exchange ~~organic volume growth and effective net pricing.~~

Snacks unit volume grew 14%, primarily reflecting a 26-percentage-point impact of our Be & Cheery acquisition, which included the impact of an extra month of unit volume as we aligned Be & Cheery’s reporting calendar with that of our APAC division, double-digit growth in Thailand and low-single-digit growth in Indonesia, partially offset by a double-digit decline in China (excluding our Be & Cheery acquisition), a high-single-digit decline in Taiwan and a mid-single-digit decline in Australia.

Beverage unit volume grew 23%, primarily reflecting double-digit growth in China. Additionally, Thailand experienced high-single-digit growth and the Philippines and Vietnam each experienced double-digit growth.

Operating profit increased 2%, primarily reflecting the net revenue growth and productivity savings, partially offset by higher advertising and marketing expenses and certain operating cost increases. Additionally, impairment charges associated with an equity method investment reduced operating profit growth by 117 percentage points. ~~Favorable foreign exchange contributed 5 percentage points to operating profit growth.~~

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24 Weeks

Net revenue increased ~~53%~~9%, primarily reflecting organic volume growth and effective net pricing, partially offset by a ~~34-percentage-point impact of our Be & Cheery acquisition, which included the~~7-percentage-point unfavorable impact of an extra month of net revenue in 2021 as we aligned Pioneer Foods’ reporting calendar with that of our AMESA division. Unfavorable foreign exchange reduced net revenue growth by 6 percentage points.

Convenient foods unit volume grew 10%, primarily reflecting double-digit growth in the Middle East, India and Pakistan. Additionally, South Africa experienced high-single-digit growth.

Beverage unit volume grew 21%, primarily reflecting double-digit growth in India and Pakistan. Additionally, the Middle East experienced double-digit growth and Nigeria experienced low-single-digit growth.

Operating profit increased 19%, primarily reflecting the net revenue growth and productivity savings. These impacts were partially offset by a 46-percentage-point impact of higher commodity costs, primarily packaging material and cooking oil, certain operating cost increases and higher advertising and marketing expenses. Unfavorable foreign exchange reduced operating profit growth by 5 percentage points.

APAC

12 Weeks

Net revenue increased 3%, primarily reflecting organic volume growth and effective net pricing, partially offset by a 7-percentage-point unfavorable impact of an extra month of net revenue in 2021 as we aligned Be & Cheery’s reporting calendar with that of our APAC ~~division,~~division.

Convenient foods unit volume grew 12%, primarily reflecting double-digit growth in China. Additionally, Taiwan experienced mid-single-digit growth and Australia and Thailand each experienced double-digit growth.

Beverage unit volume grew 6%, primarily reflecting double-digit growth in Vietnam and the Philippines, partially offset by a slight decline in Thailand. Additionally, China experienced low-single-digit growth.

Operating profit increased 7%, primarily reflecting the net revenue growth and productivity savings. These impacts were partially offset by a 15-percentage-point impact of higher commodity costs, primarily cooking oil and potatoes, and certain operating cost increases. Higher charges taken as ~~well as~~a result of the COVID-19 pandemic reduced operating profit growth by 5 percentage points. Additionally, prior-year impairment charges associated with an equity method investment contributed 10 percentage points to operating profit growth.

24 Weeks

Net revenue increased 5.5%, primarily reflecting organic volume growth ~~an 8-percentage-point impact of favorable foreign exchange~~ and effective net ~~pricing.~~

~~Snacks unit volume grew 33%, primarily reflecting~~pricing, partially offset by a ~~34-percentage-point impact of our Be & Cheery acquisition, which included the~~4-percentage-point unfavorable impact of an extra month of ~~unit volume~~net revenue in 2021 as we aligned Be & Cheery’s reporting calendar with that of our APAC division, double-digit growth in Thailand and mid-single-digit growth in China (excluding our Be & Cheery acquisition) and Indonesia, partially offset by low-single-digit declines in Australia and Taiwan.division.

~~Beverage~~Convenient foods unit volume grew ~~19%~~5.5%, primarily reflecting double-digit growth in ~~China.~~Thailand and high-single-digit growth in Australia. Additionally, China experienced mid-single-digit growth.

Beverage unit volume grew 10%, primarily reflecting double-digit growth in the ~~Philippines and~~Philippines. Additionally, Thailand ~~each~~ experienced ~~low-single-digit~~mid-single-digit growth, Vietnam experienced high-single-digit growth and ~~Vietnam~~China experienced double-digit growth.

Operating profit increased ~~21%~~5%, primarily reflecting the ~~organic volume~~net revenue growth and productivity savings, ~~and a 4-percentage-point contribution from our Be & Cheery acquisition,~~ partially offset by a 12-percentage-point impact of higher commodity costs, primarily cooking oil and potatoes, certain operating cost increases and higher advertising and marketing ~~expenses and certain operating cost increases.~~expenses. Additionally,

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prior-year impairment charges associated with an equity method investment ~~reduced operating profit growth by 6 percentage points. Favorable foreign exchange~~ contributed 65 percentage points to operating profit growth.

Other Consolidated Results


		12 Weeks Ended									24 Weeks Ended										12 Weeks Ended									24 Weeks Ended
		6/12/2021			6/13/2020			Change			6/12/2021			6/13/2020			Change				6/11/2022			6/12/2021			Change			6/11/2022			6/12/2021			Change
Other pension and retiree medical benefits income		$	126		$	84		$	42		$	246		$	161		$	85
Other pension and retiree medical benefits (expense)/income																				Other pension and retiree medical benefits (expense)/income	$	(2)		$	126		$	(128)		$	132		$	246		$	(114)
Net interest expense and other	Net interest expense and other	$	(241)		$	(235)		$	(6)		$	(499)		$	(525)		$	26		Net interest expense and other	$	(236)		$	(241)		$	5		$	(476)		$	(499)		$	23
Tax rate	Tax rate	21.3		%	23.5		%				21.1		%	22.4		%				Tax rate	21.4		%	21.3		%				18.3		%	21.1		%
Net income attributable to PepsiCo (a)	Net income attributable to PepsiCo (a)	$	2,358		$	1,646		43		%	$	4,072		$	2,984		36		%	Net income attributable to PepsiCo (a)	$	1,429		$	2,358		(39)		%	$	5,690		$	4,072		40		%
Net income attributable to PepsiCo per common share – diluted (a)	Net income attributable to PepsiCo per common share – diluted (a)	$	1.70		$	1.18		44		%	$	2.94		$	2.14		37		%	Net income attributable to PepsiCo per common share – diluted (a)	$	1.03		$	1.70		(39)		%	$	4.09		$	2.94		39		%

(a)For the 12 ~~and 24~~ weeks ended June ~~12, 2021, lower charges taken~~11, 2022, the impairment of intangible assets as a result of the ~~COVID-19 pandemic~~Russia-Ukraine conflict negatively impacted both net income attributable to PepsiCo performance and net income attributable to PepsiCo per common share performance. For the 24 weeks ended June 11, 2022, the gain associated with the Juice Transaction contributed ~~16 percentage points and 11 percentage points, respectively,~~ to both net income attributable to PepsiCo growth and net income attributable to PepsiCo per common share ~~growth.~~growth, partially offset by the impairment of intangible assets as a result of the Russia-Ukraine conflict. See Notes 3 and 11 to our condensed consolidated financial statements for further information.

12 Weeks

Other pension and retiree medical benefits income ~~increased $42~~decreased $128 million, ~~primarily~~primarily reflecting ~~the recognition~~a settlement charge of fixed income gains on plan assets, the impact of plan changes approved in 2020, as discussed in Note 7 in our condensed consolidated financial statements, and the impact of discretionary plan contributions, partially offset by the decrease in the expected rate of return on plan assets.$131 million.

Net interest expense and other ~~increased $6~~decreased $5 million, primarily due to higher interest rates on average cash balances, lower ~~gains~~average debt balances, lower interest rates on average debt balances and higher average cash balances. These impacts were partially offset by losses on the market value of investments used to economically hedge a portion of our deferred compensation liability, lower average cash balances and lower interest rates on average cash balances. These impacts were partially offset by lower interest rates on average debt balances and lower average debt balances.liability.

The reported tax rate ~~decreased 2.2~~increased 0.1 percentage points, primarily reflecting ~~prior-year non-deductible expenses related to an acquisition and a current-year tax benefit related to~~the net impact of the completion of certain tax audits.

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24 Weeks

Other pension and retiree medical benefits income ~~increased $85~~decreased $114 million, primarily reflecting the ~~recognition~~settlement charge of fixed income gains on plan assets, the impact of plan changes approved in 2020, as discussed in Note 7 in our condensed consolidated financial statements, and the impact of discretionary plan contributions,$131 million, partially offset by ~~the decrease in the expected rate~~a curtailment gain of ~~return on plan assets.~~$16 million.

Net interest expense and other decreased ~~$26~~$23 million, primarily due to ~~gains~~lower average debt balances, lower interest rates on average debt balances and higher interest rates on average cash balances, partially offset by losses on the market value of investments used to economically hedge a portion of our deferred compensation liability and lower ~~interest rates on average debt balances. These impacts were partially offset by higher average debt balances, lower interest rates on average cash balances and lower~~ average cash balances.

The reported tax rate decreased ~~1.3~~2.8 percentage points, primarily reflecting the impact of the Juice Transaction, partially offset by valuation allowances recorded as a ~~current-year tax benefit related to~~result of the ~~completion of certain tax audits and prior-year non-deductible expenses related to an acquisition.~~Russia-Ukraine conflict.

Non-GAAP Measures

Certain financial measures contained in this Form 10-Q adjust for the impact of specified items and are not in accordance with ~~U.S.~~ GAAP. We use non-GAAP financial measures internally to make operating and strategic decisions, including the preparation of our annual operating plan, evaluation of our overall business performance and as a factor in determining compensation for certain employees. We believe presenting non-GAAP financial measures in this Form 10-Q provides additional information to facilitate comparison of our historical operating results and trends in our underlying operating results and provides additional transparency on how we evaluate our business. We also believe presenting these measures in

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this Form 10-Q allows investors to view our performance using the same measures that we use in evaluating our financial and business performance and trends.

We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Examples of items for which we may make adjustments include: amounts related to mark-to-market gains or losses (non-cash); charges related to restructuring plans; ~~costs~~charges associated with mergers, acquisitions, divestitures and other structural changes; gains associated with divestitures; asset impairment charges (non-cash); pension and retiree ~~medical related items;~~medical-related amounts (including all settlement and curtailment gains and losses); charges or adjustments related to the enactment of new laws, rules or regulations, such as ~~significant~~ tax law changes; amounts related to the resolution of tax positions; tax benefits related to reorganizations of our operations; debt redemptions, cash tender or exchange offers; ~~asset impairments (non-cash);~~ and remeasurements of net monetary assets. Prior to the fourth quarter of 2021, certain immaterial pension and retiree medical-related settlement and curtailment gains and losses were not considered items affecting comparability. Pension and retiree medical-related service cost, interest cost, expected return on plan assets, and other net periodic pension costs will continue to be reflected in our core results. See below and “Items Affecting Comparability” for a description of adjustments to our ~~U.S.~~ GAAP financial measures in this Form 10-Q.

Non-GAAP information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with ~~U.S.~~ GAAP. In addition, our non-GAAP financial measures may not be the same as or comparable to similar non-GAAP measures presented by other companies.

The following non-GAAP financial measures contained in this Form 10-Q are discussed below:

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

These measures exclude the net impact of mark-to-market gains and losses on centrally managed commodity derivatives that do not qualify for hedge accounting, restructuring and impairment charges

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related to our 2019 Productivity Plan, ~~and inventory fair value adjustments and merger and integration~~ charges associated with our acquisitions and divestitures, the gain associated with the Juice Transaction, Russia-Ukraine conflict charges, Brand Portfolio Impairment Charges, and the impact of settlement and curtailment gains and losses related to pension and retiree medical plans (see “Items Affecting Comparability” for a detailed description of each of these items). We also evaluate performance on operating profit and net income attributable to PepsiCo per common share – diluted, each adjusted for items affecting comparability on a constant currency basis, which measure our financial results assuming constant foreign currency exchange rates used for translation based on the rates in effect for the comparable prior-year period. In order to compute our constant currency results, we multiply or divide, as appropriate, our current-year U.S. dollar results by the current-year average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior-year average foreign exchange rates. We believe these measures provide useful information in evaluating the results of our business because they exclude items that we believe are not indicative of our ongoing ~~performance.~~performance or that we believe impact comparability with the prior year.

Organic revenue growth

We define organic revenue growth as a measure that adjusts for the impacts of foreign exchange translation, acquisitions, divestitures and ~~divestitures,~~other structural changes, and where applicable, the impact of the ~~53rd~~

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53rd reporting ~~week. Adjusting for acquisitions and divestitures reflects all mergers and acquisitions activity,~~week, including ~~the impact of an extra month of net revenue~~ in ~~the 12 and 24 weeks ended June 12, 2021 as we aligned Pioneer Foods’ reporting calendar with that of~~ our ~~AMESA division, divestitures and other structural changes, including changes in ownership or control in consolidated subsidiaries and nonconsolidated equity investees.~~fourth quarter 2022 financial results. We believe organic revenue growth provides useful information in evaluating the results of our business because it excludes items that we believe are not indicative of ongoing performance or that we believe impact comparability with the prior year.

See “Net Revenue and Organic Revenue Growth” in “Results of Operations – Division Review” for further information.

Free cash flow

We define free cash flow as net cash provided by operating activities less capital spending, plus sales of property, plant and equipment. Since net capital spending is essential to our product innovation initiatives and maintaining our operational capabilities, we believe that it is a recurring and necessary use of cash. As such, we believe investors should also consider net capital spending when evaluating our cash from operating activities. Free cash flow is used by us primarily for acquisitions and financing activities, including debt repayments, dividends and share repurchases. Free cash flow is not a measure of cash available for discretionary expenditures since we have certain non-discretionary obligations such as debt service that are not deducted from the measure.

See “Free Cash Flow” in “Our Liquidity and Capital Resources” for further information.

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Items Affecting Comparability

Our reported financial results in this Form 10-Q are impacted by the following items in each of the following periods:

12 Weeks Ended 6/12/2021
Cost of sales Gross profit Selling, general and administrative expenses Operating profit Other pension and retiree medical benefits income
Provision for income taxes(a)
Net income attributable to PepsiCo
Reported, GAAP Measure $ 8,880 $ 10,337 $ 7,208 $ 3,129 $ 126 $ 642 $ 2,358
Items Affecting Comparability
Mark-to-market net impact — — 20 (20) — (4) (16)
Restructuring and impairment charges (2) 2 (33) 35 (1) 5 29
Merger and integration charges (1) 1 (24) 25 — 4 21
Core, Non-GAAP Measure $ 8,877 $ 10,340 $ 7,171 $ 3,169 $ 125 $ 647 $ 2,392


		12 Weeks Ended 6/13/2020												12 Weeks Ended 6/11/2022
		Cost of sales		Gross profit		Selling, general and administrative expenses		Operating profit		Other pension and retiree medical benefits income		Provision for income taxes(a)			Net income attributable to PepsiCo			Cost of sales		Gross profit		Selling, general and administrative expenses		Gain associated with the Juice Transaction		Impairment of intangible assets		Operating profit		Other pension and retiree medical benefits (expense)/income		Provision for income taxes(a)		Net income attributable to noncontrolling interests		Net income attributable to PepsiCo
Reported, GAAP Measure	Reported, GAAP Measure	$	7,088	$	8,857	$	6,538	$	2,319	$	84	$	510		$	1,646	Reported, GAAP Measure	$	9,415	$	10,810	$	7,387	$	(13)	$	1,359	$	2,077	$	(2)	$	393	$	17	$	1,429
Items Affecting Comparability	Items Affecting Comparability																Items Affecting Comparability
Mark-to-market net impact	Mark-to-market net impact	14		(14)		31		(45)		—		(11)			(34)		Mark-to-market net impact	22		(22)		76		—		—		(98)		—		(25)		—		(73)
Restructuring and impairment charges	Restructuring and impairment charges	(1)		1		(23)		24		1		4			21		Restructuring and impairment charges	—		—		(45)		—		—		45		3		8		1		39
Inventory fair value adjustments and merger and integration charges		(19)		19		(199)		218		—		13			205
Acquisition and divestiture-related charges																	Acquisition and divestiture-related charges	—		—		(8)		—		—		8		—		1		—		7
Gain associated with the Juice Transaction																	Gain associated with the Juice Transaction	—		—		—		13		—		(13)		—		(3)		—		(10)
Russia-Ukraine conflict charges																	Russia-Ukraine conflict charges	7		(7)		25		—		(1,197)		1,165		—		238		—		927
Brand Portfolio Impairment Charges																	Brand Portfolio Impairment Charges	(8)		8		(54)		—		(162)		224		—		61		—		163
Pension and retiree medical-related impact																	Pension and retiree medical-related impact	—		—		—		—		—		—		131		30		—		101
Core, Non-GAAP Measure	Core, Non-GAAP Measure	$	7,082	$	8,863	$	6,347	$	2,516	$	85	$	516		$	1,838	Core, Non-GAAP Measure	$	9,436	$	10,789	$	7,381	$	—	$	—	$	3,408	$	132	$	703	$	18	$	2,583


		24 Weeks Ended 6/12/2021												12 Weeks Ended 6/12/2021
		Cost of sales		Gross profit		Selling, general and administrative expenses		Operating profit		Other pension and retiree medical benefits income		Provision for income taxes(a)			Net income attributable to PepsiCo			Cost of sales		Gross profit		Selling, general and administrative expenses		Operating profit		Other pension and retiree medical benefits income		Provision for income taxes(a)		Net income attributable to PepsiCo
Reported, GAAP Measure	Reported, GAAP Measure	$	15,551	$	18,486	$	13,045	$	5,441	$	246	$	1,093		$	4,072	Reported, GAAP Measure	$	8,880	$	10,337	$	7,208	$	3,129	$	126	$	642	$	2,358
Items Affecting Comparability	Items Affecting Comparability																Items Affecting Comparability
Mark-to-market net impact	Mark-to-market net impact	36		(36)		59		(95)		—		(21)			(74)		Mark-to-market net impact	—		—		20		(20)		—		(4)		(16)
Restructuring and impairment charges	Restructuring and impairment charges	(4)		4		(68)		72		5		13			64		Restructuring and impairment charges	(2)		2		(33)		35		(1)		5		29
Merger and integration charges		(1)		1		(14)		15		—		1			14

Acquisition and divestiture-related charges																	Acquisition and divestiture-related charges	(1)		1		(24)		25		—		4		21
Core, Non-GAAP Measure	Core, Non-GAAP Measure	$	15,582	$	18,455	$	13,022	$	5,433	$	251	$	1,086		$	4,076	Core, Non-GAAP Measure	$	8,877	$	10,340	$	7,171	$	3,169	$	125	$	647	$	2,392

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	24 Weeks Ended 6/11/2022
	Cost of sales		Gross profit		Selling, general and administrative expenses		Gain associated with the Juice Transaction		Impairment of intangible assets		Operating profit		Other pension and retiree medical benefits income		Provision for income taxes(a)		Net income attributable to noncontrolling interests		Net income attributable to PepsiCo
Reported, GAAP Measure	$	16,848	$	19,577	$	13,967	$	(3,335)	$	1,601	$	7,344	$	132	$	1,281	$	29	$	5,690
Items Affecting Comparability
Mark-to-market net impact	55		(55)		155		—		—		(210)		—		(51)		—		(159)
Restructuring and impairment charges	(5)		5		(67)		—		—		72		3		14		1		60
Acquisition and divestiture-related charges	—		—		(58)		—		—		58		6		10		—		54
Gain associated with the Juice Transaction	—		—		—		3,335		—		(3,335)		—		(455)		—		(2,880)
Russia-Ukraine conflict charges	(133)		133		(75)		—		(1,198)		1,406		—		238		—		1,168
Brand Portfolio Impairment Charges	(8)		8		(54)		—		(403)		465		—		109		—		356
Pension and retiree medical-related impact	—		—		—		—		—		—		115		26		—		89
Core, Non-GAAP Measure	$	16,757	$	19,668	$	13,868	$	—	$	—	$	5,800	$	256	$	1,172	$	30	$	4,378


		24 Weeks Ended 6/13/2020												24 Weeks Ended 6/12/2021
		Cost of sales		Gross profit		Selling, general and administrative expenses		Operating profit		Other pension and retiree medical benefits income		Provision for income taxes(a)			Net income attributable to PepsiCo			Cost of sales		Gross profit		Selling, general and administrative expenses		Operating profit		Other pension and retiree medical benefits income		Provision for income taxes(a)		Net income attributable to PepsiCo
Reported, GAAP Measure	Reported, GAAP Measure	$	13,215	$	16,611	$	12,368	$	4,243	$	161	$	870		$	2,984	Reported, GAAP Measure	$	15,551	$	18,486	$	13,045	$	5,441	$	246	$	1,093	$	4,072
Items Affecting Comparability	Items Affecting Comparability																Items Affecting Comparability
Mark-to-market net impact	Mark-to-market net impact	(24)		24		(73)		97		—		24			73		Mark-to-market net impact	36		(36)		59		(95)		—		(21)		(74)
Restructuring and impairment charges	Restructuring and impairment charges	(3)		3		(53)		56		7		10			53		Restructuring and impairment charges	(4)		4		(68)		72		5		13		64
Inventory fair value adjustments and merger and integration charges		(19)		19		(224)		243		—		16			227
Acquisition and divestiture-related charges																	Acquisition and divestiture-related charges	(1)		1		(14)		15		—		1		14
Core, Non-GAAP Measure	Core, Non-GAAP Measure	$	13,169	$	16,657	$	12,018	$	4,639	$	168	$	920		$	3,337	Core, Non-GAAP Measure	$	15,582	$	18,455	$	13,022	$	5,433	$	251	$	1,086	$	4,076

(a)Provision for income taxes is the expected tax charge/benefit on the underlying item based on the tax laws and income tax rates applicable to the underlying item in its corresponding tax jurisdiction.

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		12 Weeks Ended								24 Weeks Ended								12 Weeks Ended								24 Weeks Ended
		6/12/2021			6/13/2020			Change		6/12/2021			6/13/2020		Change			6/11/2022			6/12/2021			Change		6/11/2022		6/12/2021			Change
Net income attributable to PepsiCo per common share – diluted, GAAP measure	Net income attributable to PepsiCo per common share – diluted, GAAP measure	$	1.70		$	1.18		44	%	$	2.94		$	2.14	37	%	Net income attributable to PepsiCo per common share – diluted, GAAP measure	$	1.03		$	1.70		(39)	%	$	4.09	$	2.94		39	%
Mark-to-market net impact	Mark-to-market net impact	(0.01)			(0.02)					(0.05)			0.05				Mark-to-market net impact	(0.05)			(0.01)					(0.11)		(0.05)
Restructuring and impairment charges	Restructuring and impairment charges	0.02			0.02					0.05			0.04				Restructuring and impairment charges	0.03			0.02					0.04		0.05
Inventory fair value adjustments and merger and integration charges		0.02			0.15					0.01			0.16
Acquisition and divestiture-related charges																	Acquisition and divestiture-related charges	0.01			0.02					0.04		0.01
Gain associated with the Juice Transaction																	Gain associated with the Juice Transaction	(0.01)			—					(2.07)		—
Russia-Ukraine conflict charges																	Russia-Ukraine conflict charges	0.67			—					0.84		—
Brand Portfolio Impairment Charges																	Brand Portfolio Impairment Charges	0.12			—					0.26		—
Pension and retiree medical-related impact																	Pension and retiree medical-related impact	0.07			—					0.06		—

Core net income attributable to PepsiCo per common share – diluted, non-GAAP measure	Core net income attributable to PepsiCo per common share – diluted, non-GAAP measure	$	1.72	(a)	$	1.32	(a)	31	%	$	2.94	(a)	$	2.39	23	%	Core net income attributable to PepsiCo per common share – diluted, non-GAAP measure	$	1.86	(a)	$	1.72	(a)	8	%	$	3.15	$	2.94	(a)	7	%
Impact of foreign exchange translation	Impact of foreign exchange translation							(4)							(2)		Impact of foreign exchange translation							2							2
Growth in core net income attributable to PepsiCo per common share – diluted, on a constant currency basis, non-GAAP measure	Growth in core net income attributable to PepsiCo per common share – diluted, on a constant currency basis, non-GAAP measure							27	%						21	%	Growth in core net income attributable to PepsiCo per common share – diluted, on a constant currency basis, non-GAAP measure							10	%						9	%

(a)Does not sum due to rounding.

Mark-to-Market Net Impact

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

Restructuring and Impairment Charges

2019 Multi-Year Productivity Plan

To build on the successful implementation of the 2019 Productivity Plan, ~~to date,~~in the second quarter of 2021, we expanded and extended the program through the end of 2026 to take advantage of additional opportunities within the initiatives of the 2019 Productivity Plan. ~~We now~~As a result, we expect to incur pre-tax charges of approximately $3.15 billion, including cash expenditures of approximately $2.4 ~~billion, as compared to our previous estimate of pre-tax charges of approximately $2.5 billion, which included cash expenditures of approximately $1.6~~ billion. Plan to date through June ~~12, 2021,~~11, 2022, we have incurred pre-tax charges of ~~$874 million,~~$1.1 billion, including cash expenditures of ~~$622~~$859 million. For the remainder of ~~2021,~~2022, we expect to incur pre-tax charges of approximately ~~$400~~$200 million, ~~including~~and cash expenditures of approximately ~~$300 million, with the balance to be reflected in our 2022 through 2026 financial results.~~$175 million. These charges will be funded primarily through cash from operations. We expect to incur the majority of the remaining pre-tax charges and cash expenditures in our 2022 through 2024 financial results, with the balance to be incurred through 2026. Charges include severance and ~~2023 results.~~other employee costs, asset impairments and other costs.

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See Note 32 to our condensed consolidated financial statements in this Form 10-Q, as well as Note 3 to our consolidated financial statements in our ~~2020~~2021 Form 10-K, for further information related to our 2019 Productivity Plan.

We regularly evaluate productivity initiatives beyond the productivity plan and other initiatives discussed above and in Note 32 to our condensed consolidated financial statements.

~~Inventory Fair Value Adjustments~~Acquisition and ~~Merger~~Divestiture-Related Charges

Acquisition and ~~Integration Charges~~

~~In the 12 and 24 weeks ended June 12, 2021, we recorded~~divestiture-related charges primarily include merger and integration charges ~~related to our acquisitions of BFY Brands, Rockstar, Pioneer Foods~~ and ~~Be & Cheery, as well as other transaction-~~

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~~related costs. The merger~~costs associated with divestitures. Merger and integration charges ~~primarily~~ include changes in ~~the~~ fair value of contingent consideration, liabilities to support socioeconomic programs in South Africa, employee-related costs, contract termination costs and other integration costs. Divestiture-related charges reflect transaction expenses, including consulting, advisory and other professional fees.

See Note 11 to our condensed consolidated financial statements for further information.

Gain Associated with the Juice Transaction

We recognized a gain associated with the Juice Transaction in our PBNA and Europe divisions. See Note 11 to our condensed consolidated financial statements for further information.

Russia-Ukraine Conflict Charges

In connection with the ~~12 and 24 weeks ended June 13, 2020,~~deadly conflict in Ukraine, we ~~recorded inventory fair value adjustments and merger and integration~~recognized charges related to indefinite-lived intangible assets and property, plant and equipment impairment, allowance for expected credit losses, inventory write-downs and other costs. See Notes 1 and 3 to our ~~acquisitions~~condensed consolidated financial statements for further information.

Brand Portfolio Impairment Charges

We recognized intangible assets and property, plant and equipment impairment and other charges as a result of ~~BFY Brands, Rockstar~~management’s decision to reposition or discontinue the sale/distribution of certain brands. See Notes 1 and ~~Pioneer Foods. These~~3 to our condensed consolidated financial statements for further information.

Pension and Retiree Medical-Related Impact

Pension and retiree medical-related impact includes settlement charges ~~primarily relate~~related to ~~fair value adjustments to~~lump sum distributions exceeding the ~~acquired inventory included in~~total of annual service and interest cost, partially offset by curtailment gains resulting from the ~~acquisition-date balance sheets, liabilities to support socioeconomic programs in South Africa, closing costs, employee-related costs, changes in the fair value of contingent consideration~~Juice Transaction. See Notes 6 and ~~contract termination costs.~~

~~See Note 12~~11 to our condensed consolidated financial statements for further information.

Our Liquidity and Capital Resources

We believe that our cash generating capability and financial condition, together with our revolving credit facilities, working capital lines and other available methods of debt financing, such as commercial paper borrowings and long-term debt financing, will be adequate to meet our operating, investing and financing needs, including with respect to our net capital spending plans. Our primary sources of cash available to fund cash outflows, such as our anticipated dividend payments, debt repayments, payments for acquisitions, including the contingent consideration related to Rockstar, and the transition tax liability under the TCJ Act,liquidity include cash from operations, pre-tax cash proceeds of approximately $3.5 billion from the Juice Transaction,proceeds obtained from issuances of commercial paper and long-term debt, and cash and cash equivalents. These sources of cash are available to fund cash outflows that have both a short- and long-term component, including debt repayments and related interest payments; payments for acquisitions; operating leases; purchase, marketing, and other contractual commitments, including capital expenditures and the transition tax liability under the TCJ Act. In addition, these sources of cash fund other cash outflows including anticipated dividend payments and share repurchases. We do not have guarantees or off-balance sheet financing arrangements, including variable interest entities, that we believe could have a material impact on our liquidity. See “Our Business Risks” and ~~Note 8~~Notes 7 and 11 to our condensed consolidated

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financial statements included in this Form 10-Q and “Item 1A. Risk Factors,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” and Note 8 to our consolidated financial statements included in our ~~2020~~2021 Form 10-K for further information.

Our sources and uses of cash were not materially adversely impacted by the Russia-Ukraine conflict in the 24 weeks ended June 11, 2022 and, to date, we have not identified any material liquidity deficiencies as a result of the conflict. Based on the information currently available to us, we do not expect the impact of the Russia-Ukraine conflict to have a material impact on our future liquidity. We will continue to monitor and assess the impact the Russia-Ukraine conflict may have on our business and financial results. See “Our Business Risks,” Note 1 to our condensed consolidated financial statements and “Item 1A. Risk Factors” in this Form 10-Q for further information related to the impact of the Russia-Ukraine conflict on our business and financial results.

Our sources and uses of cash were not materially adversely impacted by COVID-19 in the 24 weeks ended June ~~12, 2021~~11, 2022 and, to date, we have not identified any material liquidity deficiencies as a result of the COVID-19 pandemic. Based on the information currently available to us, we do not expect the impact of the COVID-19 pandemic to have a material impact on our future liquidity. We will continue to monitor and assess the impact the COVID-19 pandemic may have on our business and financial results. See “Our Business Risks” and Note 1 to our condensed consolidated financial statements in this Form 10-Q and “Item 1A. Risk Factors,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” and Note 1 to our consolidated financial statements included in our ~~2020~~2021 Form 10-K for further information related to the impact of the COVID-19 pandemic on our business and financial results.

As of June ~~12, 2021,~~11, 2022, cash, cash equivalents and short-term investments in our consolidated subsidiaries subject to currency controls or currency exchange restrictions were not material.

The TCJ Act imposed a one-time mandatory ~~one-time~~ transition tax on undistributed international earnings. As of June ~~12, 2021,~~11, 2022, our mandatory transition tax liability was ~~$2.9~~$2.6 billion, which must be paid through 2026 under the provisions of the TCJ Act. See “Our Liquidity and Capital Resources,” “Our Critical Accounting Policies” and Note 5 to our consolidated financial statements included in our ~~2020~~2021 Form 10-K for further discussion of the TCJ Act.

As of June 12, 2021, we had $4.2 billion of non-cancelable purchasing commitments, reflecting an increase of $1.9 billion from December 26, 2020, primarily due to new purchasing contracts and the timing of entering into contract renewals. For further information on our long-term contractual commitments, see “Credit Facilities and Long-Term Contractual Commitments” in “Our Liquidity and Capital Resources” in our 2020 Form 10-K.

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As part of our evolving market practices, we work with our suppliers to optimize our terms and conditions, which include the extension of payment terms. Our current payment terms with a majority of our suppliers generally range from 60 to 90 days, which we deem to be commercially reasonable. We will continue to monitor economic conditions and market practice working with our suppliers to adjust as necessary. We also maintain voluntary supply chain finance agreements with several participating global financial institutions. Under these agreements, our suppliers, at their sole discretion, may elect to sell their accounts receivable with PepsiCo to these participating global financial institutions. Supplier participation in these financing arrangements is voluntary. Our suppliers negotiate their financing agreements directly with the respective global financial institutions and we are not a party to these agreements. These financing arrangements allow participating suppliers to leverage PepsiCo’s creditworthiness in establishing credit spreads and associated costs, which generally provides our suppliers with more favorable terms than they would be able to secure on their own. Neither PepsiCo nor any of its subsidiaries provide any guarantees to any third party in connection with these financing arrangements. We have no economic interest in our suppliers’ decision to participate in these agreements. Our obligations to our suppliers, including amounts due and scheduled payment terms, are not impacted. All outstanding amounts related to suppliers participating in such financing arrangements are recorded within accounts payable and other current liabilities in our condensed consolidated balance sheet. We ~~have been~~were informed by the participating financial institutions that as of June ~~12, 2021~~11, 2022 and December ~~26, 2020, $1.2~~25, 2021, $1.3 billion and $1.5 billion, respectively, of our accounts payable to suppliers who participate in these

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financing arrangements are outstanding. These supply chain finance arrangements did not have a material impact on our liquidity or capital resources in the periods presented and we do not expect such arrangements to have a material impact on our liquidity or capital resources for the foreseeable future.

Operating Activities

During the 24 weeks ended June ~~12, 2021,~~11, 2022, net cash provided by operating activities was ~~$2.3~~$1.9 billion, compared to net cash provided by operating activities of ~~$1.5~~$2.3 billion in the prior-year period. The ~~increase~~decrease in operating cash flow primarily reflects unfavorable working capital comparisons and higher net cash tax payments, partially offset by favorable operating profit performance and ~~working capital comparisons, partially offset by higher net cash tax payments and higher~~lower pre-tax pension and retiree medical plan contributions in the current year.

Investing Activities

During the 24 weeks ended June ~~12, 2021,~~11, 2022, net cash ~~used for~~provided by investing activities was ~~$0.1~~$2.2 billion, primarily reflecting proceeds associated with the Juice Transaction of $3.5 billion, partially offset by net capital spending of $1.3 ~~billion, largely offset by maturities of short-term investments with maturities of greater than three months of $1.1~~ billion.

We regularly review our plans with respect to net capital spending, including in light of the ongoing uncertainty caused by the Russia-Ukraine conflict and by the COVID-19 pandemic on our business, and believe that we have sufficient liquidity to meet our net capital spending needs.

Financing Activities

During the 24 weeks ended June ~~12, 2021,~~11, 2022, net cash used for financing activities was ~~$4.9~~$4.1 billion, primarily reflecting the return of operating cash flow to our shareholders, ~~primarily~~ through dividend payments of ~~$2.8~~$3.0 billion and share repurchases of $0.7 billion, payments of long-term debt borrowings of $1.7 billion ~~and payments~~and debt redemptions of $1.6 billion, partially offset by net proceeds of short-term borrowings of ~~$0.4~~$2.8 billion.

We annually review our capital structure with our Board of Directors, including our dividend policy and share repurchase activity. On February ~~13, 2018,~~10, 2022, we announced ~~the 2018~~a share repurchase program providing for the repurchase of up to ~~$15.0~~$10.0 billion of PepsiCo common stock which commenced on ~~July 1, 2018~~February 11, 2022 and ~~expired~~will expire on ~~June 30, 2021.~~February 28, 2026. In addition, on February ~~11, 2021,~~10, 2022, we announced a 5%7% increase in our annualized dividend to ~~$4.30~~$4.60 per share from ~~$4.09~~$4.30 per share, effective with the dividend paid in June

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~~2021.~~ 2022. We expect to return a total of approximately ~~$5.9~~$7.7 billion to shareholders in ~~2021, comprised of~~2022, comprising dividends of approximately ~~$5.8~~$6.2 billion and share repurchases of ~~$106 million. We completed our share repurchase activity during the 12 weeks ended March 20, 2021 and do not expect to repurchase any additional shares for the balance of 2021.~~approximately $1.5 billion.

Free Cash Flow

The table below reconciles net cash provided by operating activities, as reflected on our cash flow statement, to our free cash flow. Free cash flow is a non-GAAP financial measure. For further information on free cash flow see “Non-GAAP Measures.”


		24 Weeks Ended					24 Weeks Ended
		6/12/2021		6/13/2020			6/11/2022		6/12/2021
Net cash provided by operating activities, GAAP measure	Net cash provided by operating activities, GAAP measure	$	2,340	$	1,462	Net cash provided by operating activities, GAAP measure	$	1,881	$	2,340
Capital spending	Capital spending	(1,305)		(1,188)		Capital spending	(1,499)		(1,305)
Sales of property, plant and equipment	Sales of property, plant and equipment	22		18		Sales of property, plant and equipment	222		22
Free cash flow, non-GAAP measure	Free cash flow, non-GAAP measure	$	1,057	$	292	Free cash flow, non-GAAP measure	$	604	$	1,057

We use free cash flow primarily for acquisitions and financing activities, including debt repayments, dividends and share repurchases. We expect to continue to return free cash flow to our shareholders primarily through dividends while maintaining Tier 1 commercial paper access, which we believe will facilitate appropriate financial flexibility and ready access to global capital and credit markets at favorable

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interest rates. See “Our Business Risks” included in this Form 10-Q and “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks,” included in our ~~2020~~2021 Form 10-K, for certain factors that may impact our credit ratings or our operating cash flows.

Any downgrade of our credit ratings by a credit rating agency, especially any downgrade to below investment grade, whether or not as a result of our actions or factors which are beyond our control, could increase our future borrowing costs and impair our ability to access capital and credit markets on terms commercially acceptable to us, or at all. In addition, any downgrade of our current short-term credit ratings could impair our ability to access the commercial paper market with the same flexibility that we have experienced historically, and therefore require us to rely more heavily on more expensive types of debt financing. See Note 87 to our condensed consolidated financial statements and “Our Business Risks” included in this Form 10-Q, as well as “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” included in our ~~2020~~2021 Form 10-K for further information.

Material Changes in Line Items in Our Condensed Consolidated Financial Statements

Material changes in line items in our condensed consolidated statement of income are discussed in “Results of Operations – Division Review” and “Items Affecting Comparability.”

Material changes in line items in our condensed consolidated statement of cash flows are discussed in “Our Liquidity and Capital Resources.”

Material changes in line items in our condensed consolidated balance sheet are discussed below:

Total Assets

As of June 11, 2022, total assets were $93.1 billion, compared to $92.4 billion as of December 25, 2021. The increase in total assets is primarily driven by the following line items:


	Change(a)		Reference

Accounts and notes receivable, less allowance	$	1.8	(b)
Inventories	$	0.9	(c)
Assets held for sale	$	(1.8)	(d)
Other indefinite-lived intangible assets	$	(1.4)	Note 3
Investments in noncontrolled affiliates	$	0.9	Note 11

Total Liabilities

As of June 11, 2022, total liabilities were $74.4 billion, compared to $76.2 billion as of December 25, 2021. The decrease in total liabilities is primarily driven by the following line items:


	Change(a)		Reference
Short-term debt obligations	$	1.7	(e)

Liabilities held for sale	$	(0.8)	(d)
Long-term debt obligations	$	(2.8)	Note 7

(a)In billions.

(b)Reflects favorable operating performance.

(c)Reflects seasonal build of inventory.

(d)Reflects closing of the Juice Transaction. See Note 11 to our condensed consolidated financial statements included in this Form 10-Q and Note 13 to our consolidated financial statements included in our 2021 Form 10-K for further information.

(e)Reflects changes primarily related to issuance of commercial paper.

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Total Equity

Refer to our condensed consolidated statement of equity, and Notes 6 and 10 to our condensed consolidated financial statements for material changes in equity line items.

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

PepsiCo, Inc.:

Results of Review of Interim Financial Information

We have reviewed the Condensed Consolidated Balance Sheet of PepsiCo, Inc. and subsidiaries (the Company) as of June ~~12, 2021,~~11, 2022, the related Condensed Consolidated Statements of Income, Comprehensive Income and Equity for the twelve and twenty-four weeks ended June ~~12, 2021~~11, 2022 and June ~~13, 2020,~~12, 2021, the related Condensed Consolidated Statement of Cash Flows for the twenty-four weeks ended June ~~12, 2021~~11, 2022 and June ~~13, 2020,~~12, 2021, and the related notes (collectively, the consolidated interim financial information). Based on our reviews, we are not aware of any material modifications that should be made to the consolidated interim financial information for it to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Consolidated Balance Sheet of the Company as of December ~~26, 2020,~~25, 2021, and the related Consolidated Statements of Income, Comprehensive Income, Cash Flows and Equity for the year then ended (not presented herein); and in our report dated February ~~10, 2021,~~9, 2022, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying Condensed Consolidated Balance Sheet as of December ~~26, 2020,~~25, 2021, is fairly stated, in all material respects, in relation to the Consolidated Balance Sheet from which it has been derived.

Basis for Review Results

This consolidated interim financial information is the responsibility of the Company’s management. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our reviews in accordance with the standards of the PCAOB. A review of consolidated interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

/s/ KPMG LLP

New York, New York

July ~~12, 2021~~11, 2022

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

See “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks.” In addition, see “Item 1A. Risk Factors,” “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks” and Note 9 to our consolidated financial statements in our ~~2020~~2021 Form 10-K.

ITEM 4. Controls and Procedures.

As of the end of the period covered by this report, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in our internal control over financial reporting during the 12 weeks ended June 12, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During the 12 weeks ended June ~~12, 2021,~~11, 2022, we continued migrating certain of our financial processing systems to an ~~enterprise-wide systems solution.~~Enterprise Resource Planning (ERP) system. These systems implementations are part of our ongoing global business transformation initiative, and we plan to continue implementing such systems throughout other parts of our ~~businesses.~~businesses in phases over the next several years. In connection with these ERP implementations, we are updating and will continue to update our internal control over financial reporting, as necessary, to accommodate modifications to our business processes and accounting procedures. During the 12 weeks ended June 11, 2022, we continued implementing these systems, resulting in changes that materially affected our internal control over financial reporting. These system implementations did not have an adverse effect, nor do we expect will have an adverse effect, on our internal control over financial reporting. In addition, in connection with our 2019 ~~Productivity Plan,~~multi-year productivity plan, we continueto migrate to shared business ~~service~~ models across our operations to further simplify, harmonize and automate processes. In connection with ~~these implementations~~this multi-year productivity plan and resulting business process changes, we continue to enhance the design and documentation of our internal control over financial reporting processes, to maintain effective controls over our financial reporting. These ~~transitions~~business process changes have not materially affected, and we do not expect them to materially affect, our internal control over financial reporting.

Except with respect to the continued implementation of ERP systems, there have been no changes in our internal control over financial reporting during the 12 weeks ended June 11, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We will continue to assess the impact on our internal control over financial reporting as we continue to implement our ERP solution and our 2019 multi-year productivity plan.

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PART II OTHER INFORMATION

ITEM 1. Legal Proceedings.

The following information should be read in conjunction with the discussion set forth under Part I, “Item 3. Legal Proceedings” in our ~~2020~~2021 Form 10-K.

We and our subsidiaries are party to a variety of litigation, claims, legal or regulatory proceedings, inquiries and investigations. While the results of such litigation, claims, legal or regulatory proceedings, inquiries and investigations cannot be predicted with certainty, management believes that the final outcome of the foregoing will not have a material adverse effect on our financial condition, results of operations or cash flows. See also “Item 1. Business – Regulatory Matters” and “Item 1A. Risk Factors” in our ~~2020~~2021 Form 10-K.

ITEM 1A. Risk Factors.

~~There have been no material changes~~The following additional risk factor should be read in conjunction with ~~respect to~~ the risk factors set forth under “Item 1A. Risk Factors” in our 2021 Form 10-K and our Form 10-Q for the fiscal quarter ended March 19, 2022 (Q1 2022 Form 10-Q). The developments described below have heightened, or in some cases manifested, certain of the risks disclosed in the risk factor section of our ~~2020~~2021 Form ~~10-K.~~10-K, and such risk factors are further qualified by the information relating to our operations in Russia and Ukraine as described in this Form 10-Q and our Q1 2022 Form 10-Q, including in the additional risk factor below.

You should carefully consider the risks described below and in our 2021 Form 10-K and Q1 2022 Form 10-Q in addition to the other information set forth in this Form 10-Q, our Q1 2022 Form 10-Q and in our 2021 Form 10-K, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations sections and the consolidated financial statements and related notes. These risks, some of which have occurred and any of which may occur in the future, can have a material adverse effect on our business or financial performance, which in turn can affect the price of our publicly traded securities. The risks described below and in our 2021 Form 10-K and Q1 2022 Form 10-Q are not the only risks we face. There may be other risks we are not currently aware of or that we currently deem not to be material but that may become material in the future. Therefore, historical operating results, financial and business performance, events and trends are often not a reliable indicator of future operating results, financial and business performance, events or trends.

Risks associated with the deadly conflict in Ukraine

The deadly conflict in Ukraine has continued to result in worldwide geopolitical and macroeconomic uncertainty and the majority of our operations in Ukraine remain suspended. We are in the process of suspending sales of Pepsi-Cola and certain of our other global beverage brands and have suspended our discretionary capital investments and advertising and promotional activities in Russia. We plan to continue to offer our other products in Russia. The conflict has resulted and could continue to result in volatile commodity markets, supply chain disruptions, increased risk of cyber incidents or other disruptions to our information systems, reputational risk, heightened risks to employee safety, significant volatility of the Russian ruble, limitations on access to credit markets, including working capital facilities, reduced availability and increased costs for transportation, energy, packaging and raw materials and other input costs, environmental, health and safety risks related to securing and maintaining facilities, additional sanctions, export controls and other regulations (including restrictions on the transfer of funds to and from Russia). The ongoing conflict could result in loss of assets or result in additional impairment charges. We cannot predict how and the extent to which the conflict will continue to affect our operations, customers or business partners or our ability to achieve certain of our sustainability goals. The conflict has adversely affected and could continue to adversely affect demand for our products and our global business.

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ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

~~None.~~A summary of our common stock repurchases (in millions, except average price per share) during the 12 weeks ended June 11, 2022 is set forth in the table below.

Issuer Purchases of Common Stock


Period	Total Number of Shares Repurchased(a)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs







3/19/2022					$	9,787

3/20/2022 - 4/16/2022	1.1	$	168.85	1.1	(176)
					9,611
4/17/2022 - 5/14/2022	0.8	$	172.40	0.8	(136)
					9,475
5/15/2022 - 6/11/2022	1.2	$	166.12	1.2	(206)
Total	3.1	$	168.66	3.1	$	9,269

(a)All shares (other than 46 thousand shares which were repurchased pursuant to a privately negotiated block trade transaction) were repurchased in open market transactions pursuant to the $10 billion share repurchase program authorized by our Board of Directors and publicly announced on February 10, 2022, which commenced on February 11, 2022 and will expire on February 28, 2026. Shares repurchased under this program may be repurchased in open market transactions, in privately negotiated transactions, in accelerated stock repurchase transactions or otherwise.

ITEM 6. Exhibits.


See “Index to Exhibits” on page 5358.

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INDEX TO EXHIBITS

ITEM 6


EXHIBIT
Exhibit 3.1			Amended and Restated Articles of Incorporation of PepsiCo, Inc., effective as of May 1, 2019, which are incorporated herein by reference to Exhibit 3.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 3, 2019.
Exhibit 3.2			By-Laws of PepsiCo, Inc., as amended and restated, effective as of April 15, 2020, which are incorporated herein by reference to Exhibit 3.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 16, 2020.
Exhibit 15			Letter re: Unaudited Interim Financial Information.
Exhibit 31			Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32			Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 99.1			364-Day Credit Agreement, dated as of May ~~28, 2021,~~27, 2022, among PepsiCo, as borrower, the lenders named therein, and Citibank, N.A., as administrative agent, which is incorporated by reference to Exhibit 99.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May ~~28, 2021.~~27, 2022.
Exhibit 99.2			Five-Year Credit Agreement, dated as of May ~~28, 2021,~~27, 2022, among PepsiCo, as borrower, the lenders named therein, and Citibank, N.A., as administrative agent, which is incorporated by reference to Exhibit 99.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May ~~28, 2021.~~27, 2022.
Exhibit 101			The following materials from PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June ~~12, 2021~~11, 2022 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) the Condensed Consolidated Statement of Income, (ii) the Condensed Consolidated Statement of Comprehensive Income, (iii) the Condensed Consolidated Statement of Cash Flows, (iv) the Condensed Consolidated Balance Sheet, (v) the Condensed Consolidated Statement of Equity, and (vi) Notes to the Condensed Consolidated Financial Statements.
Exhibit 104			The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June ~~12, 2021,~~11, 2022, formatted in iXBRL and contained in Exhibit 101.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		PepsiCo, Inc.
		(Registrant)

Date:	July ~~12, 2021~~11, 2022	/s/ Marie T. Gallagher
		Marie T. Gallagher
		Senior Vice President and Controller
		(Principal Accounting Officer)

Date:	July ~~12, 2021~~11, 2022	/s/ David Flavell
		David Flavell
		Executive Vice President, General Counsel and Corporate Secretary
		(Duly Authorized Officer)

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	12 Weeks Ended 6/12/2021
	Allowances for Expected Credit Losses(a)		Upfront Payments to Customers(b)		Inventory Write-Downs and Product Returns		Employee Compensation Expense(c)		Employee Protection Costs(d)		Other(e)		Total
FLNA	$	(4)	$	0	$	0	$	11	$	7	$	0	$	14
QFNA	0		0		0		1		0		0		1
PBNA	(9)		(6)		0		7		4		(7)		(11)
LatAm	0		0		1		12		3		1		17
Europe	0		0		0		5		3		1		9
AMESA	0		0		0		0		1		2		3
APAC	0		0		0		0		1		1		2

Total	$	(13)	$	(6)	$	1	$	36	$	19	$	(2)	$	35


	Severance and Other Employee Costs		Asset Impairments		Other Costs		Total
Liability as of December 26, 2020	$	122	$	0	$	5	$	127
2021 restructuring charges	49		1		27		77
Cash payments	(75)		0		(29)		(104)
Non-cash charges and translation	(6)		(1)		0		(7)
Liability as of June 12, 2021	$	90	$	0	$	3	$	93


	Pioneer Foods		Rockstar		Be & Cheery
Acquisition date	March 23, 2020		April 24, 2020		June 1, 2020
Inventories	$	229	$	52	$	45
Property, plant and equipment	379		8		60
Amortizable intangible assets	52		0		98
Nonamortizable intangible assets	183		2,400		309
Other assets and liabilities	(53)		(9)		(24)
Net deferred income taxes	(117)		0		(99)
Noncontrolling interest	(5)		0		0
Total identifiable net assets	668		2,451		389
Goodwill	558		2,278		309
Total purchase price	$	1,226	$	4,729	$	698