PepsiCo Inc. · Earnings release

PepsiCo Reports Third-Quarter 2024 Results; Updates 2024 Financial Guidance

Reported (GAAP) Third-Quarter and Year-to-Date 2024 Results

Third-Quarter

Year-to-Date

Net revenue performance

Foreign exchange impact on net revenue

(2)%

(1)%

Earnings per share (EPS)

EPS change

(5)%

4%

Foreign exchange impact on EPS

(2)%

(1)%

Organic/Core (non-GAAP)1 Third-Quarter 2024 Results

Third-Quarter

Year-to-Date

Organic revenue growth

Core EPS

Core constant currency EPS change

5%

7%

PURCHASE, N.Y. - October 8, 2024 - PepsiCo, Inc. (NASDAQ: PEP) today reported results for the third quarter 2024.

“Our businesses remained resilient in the third quarter, despite subdued category performance trends in North America, the continued impacts related to certain recalls at Quaker Foods North America and business disruptions due to rising geopolitical tensions in certain international markets. Strong cost controls aided our profitability, as we made incremental investments to improve our marketplace competitiveness,” said Chairman and CEO Ramon Laguarta.

Laguarta continued, “For the balance of the year, we will continue to invest in commercial activities and brand support to stimulate consumer demand. Our investments will be enabled by elevating and advancing productivity initiatives across our entire organization. Given our performance to date and our outlook for the fourth quarter, we now expect to deliver a low-single-digit increase in organic revenue (previously approximately 4 percent organic revenue growth). We continue to expect to deliver at least 8 percent core constant currency EPS growth as we will focus on tightly managing our costs to better align with the subdued growth environment that we are currently operating in.”

1 Please refer to the Glossary for the definitions of non-GAAP financial measures, including “Organic revenue growth,” “Core” and “Constant currency,” and to “Guidance and Outlook” for additional information regarding PepsiCo’s full-year 2024 financial guidance. PepsiCo provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange and commodity mark-to-market net impacts. Please refer to PepsiCo’s Quarterly Report on Form 10-Q for the 12 and 36 weeks ended September 7, 2024 (Q3 2024 Form 10-Q) filed with the Securities and Exchange Commission (SEC) for additional information regarding PepsiCo’s financial results.

1

Summary Third-Quarter 2024 Performance

Revenue

Volume(a)

GAAP Reported

% Change

Percentage Point Impact

Organic

% Change

% Change

Foreign Exchange Translation

Acquisitions and Divestitures

Convenient Foods

Beverages

Frito-Lay North America

(1)

—

—

(1)

Quaker Foods North America (b)

—

—

PepsiCo Beverages North America

—

—

—

1

(3)

Latin America

(5)

7

—

3

(2)

(1)

Europe

7

—

—

6

1

—

Africa, Middle East and South Asia

(4)

—

6

(3)

(2)

Asia Pacific, Australia and New Zealand and China Region

(2)

1

—

(1)

1

(3)

Total

(1)

2

—

1

(2)

(2)

Operating Profit and EPS

GAAP Reported % Change

Percentage Point Impact

Core Constant Currency

% Change

Items Affecting Comparability

Foreign Exchange Translation

Frito-Lay North America

(9)

—

—

(9)

Quaker Foods North America

—

—

PepsiCo Beverages North America

(6)

—

7

Latin America

—

1

8

9

Europe

1

—

Africa, Middle East and South Asia

(2)

(9)

Asia Pacific, Australia and New Zealand and China Region

—

2

Corporate unallocated expenses

(9)

—

Total

(4)

7

2

6

EPS

(5)

8

2

5

(a)Excludes the impact of acquisitions and divestitures. In certain instances, the volume change shown here differs from the impact of organic volume on net revenue performance disclosed in the Organic Revenue Growth Rates table on page A-8, 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 (BCS) and concentrate shipments and equivalents (CSE). We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.

(b)Net revenue decline was impacted by a previously announced voluntary recall of certain bars and cereals in our Quaker Foods North America division (Quaker Recall).

Note: Amounts may not sum due to rounding.

Organic revenue and core constant currency results are non-GAAP financial measures. Please refer to the reconciliation of GAAP and non-GAAP information in the attached exhibits and to the Glossary for definitions of “Organic revenue growth,” “Core” and “Constant currency.”

2

Summary Year-to-Date 2024 Performance

Revenue

Volume(a)

GAAP Reported

% Change

Percentage Point Impact

Organic

% Change

% Change

Foreign Exchange Translation

Acquisitions and Divestitures

Convenient Foods

Beverages

Frito-Lay North America

—

—

—

—

(2)

Quaker Foods North America (b)

—

—

PepsiCo Beverages North America

1

—

—

1

Latin America

4

(1)

—

4

(3)

1

Europe

4

3

—

7

3

2

Africa, Middle East and South Asia

—

9

—

8

—

Asia Pacific, Australia and New Zealand and China Region

—

3

—

3

4

(1)

Total

1

1

—

2

(2)

(1)

Operating Profit and EPS

GAAP Reported

% Change

Percentage Point Impact

Core Constant Currency

% Change

Items Affecting Comparability

Foreign Exchange Translation

Frito-Lay North America

(5)

—

(4)

Quaker Foods North America

—

PepsiCo Beverages North America

—

—

Latin America

1

(2)

Europe

4

Africa, Middle East and South Asia

1

7

(3)

Asia Pacific, Australia and New Zealand and China Region

4

—

8

Corporate unallocated expenses

(5)

—

Total

3

2

1

6

EPS

4

2

1

7

(a)Excludes the impact of acquisitions and divestitures. In certain instances, the volume change shown here differs from the impact of organic volume on net revenue performance disclosed in the Organic Revenue Growth Rates tables on page A-8, due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between BCS and CSE. We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.

(b)Net revenue decline was impacted by the Quaker Recall.

Note: Amounts may not sum due to rounding.

Organic revenue and core constant currency results are non-GAAP financial measures. Please refer to the reconciliation of GAAP and non-GAAP information in the attached exhibits and to the Glossary for definitions of “Organic revenue growth,” “Core” and “Constant currency.”

3

Guidance and Outlook

The Company provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in reported GAAP results, including the impact of foreign exchange translation and commodity mark-to-market net impacts.

For 2024, the Company now expects:

•A low-single-digit increase in organic revenue (previously approximately 4% organic revenue growth).

In addition, the Company continues to expect:

•G1At least 8 percent increase in core constant currency EPS;

•G2A core annual effective tax rate of 20 percent;

•G3G4G5Total cash returns to shareholders of approximately $8.2 billion, comprised of dividends of $7.2 billion and share repurchases of $1.0 billion; and

•An approximate 1-percentage-point foreign exchange translation headwind to impact reported net revenue and core EPS growth based on current market consensus rates.

G6This assumption and the guidance above imply 2024 core EPS of at least $8.15, a 7 percent increase compared to 2023 core EPS of $7.62.

Prepared Management Remarks and Live Question and Answer Webcast

At approximately 6:30 a.m. (Eastern time) on October 8, 2024, the Company will post prepared management remarks (in pdf format) of its third quarter 2024 results and business update, including its outlook for 2024, at www.pepsico.com/investors. At 8:15 a.m. (Eastern time) on October 8, 2024, the Company will host a live question and answer session with investors and financial analysts. Further details will be accessible on the Company’s website at www.pepsico.com/investors.

Contacts:

Investor Relations

Communications

investor@pepsico.com

pepsicomediarelations@pepsico.com

4

PepsiCo, Inc. and Subsidiaries

Condensed Consolidated Statement of Income

(in millions except per share amounts, unaudited)

12 Weeks Ended

36 Weeks Ended

Net Revenue

$

$

$

$

Cost of sales

Gross profit

Selling, general and administrative expenses

Operating Profit

Other pension and retiree medical benefits income

Net interest expense and other

Income before income taxes

Provision for income taxes

Net income

Less: Net income attributable to noncontrolling interests

Net Income Attributable to PepsiCo

$

$

$

$

Diluted

Net income attributable to PepsiCo per common share

$

$

$

$

Weighted-average common shares outstanding

A - 1

PepsiCo, Inc. and Subsidiaries

Supplemental Financial Information

(in millions and unaudited)

12 Weeks Ended

36 Weeks Ended

Net Revenue

Frito-Lay North America

$

$

$

$

Quaker Foods North America

PepsiCo Beverages North America

Latin America

Europe

Africa, Middle East and South Asia

Asia Pacific, Australia and New Zealand and China Region

Total

$

$

$

$

Operating Profit

Frito-Lay North America

$

$

$

$

Quaker Foods North America

PepsiCo Beverages North America

Latin America

Europe

Africa, Middle East and South Asia

Asia Pacific, Australia and New Zealand and China Region

Corporate unallocated expenses

Total

$

$

$

$

A - 2

PepsiCo, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows

(in millions, unaudited)

36 Weeks Ended

Operating Activities

Net income

$

$

Depreciation and amortization

Impairment and other charges

Product recall-related impact

—

Cash payments for product recall-related impact

—

Operating lease right-of-use asset amortization

Share-based compensation expense

Restructuring and impairment charges

Cash payments for restructuring charges

Pension and retiree medical plan expenses

Pension and retiree medical plan contributions

Deferred income taxes and other tax charges and credits

Tax payments related to the Tax Cuts and Jobs Act

Change in assets and liabilities:

Accounts and notes receivable

Inventories

Prepaid expenses and other current assets

Accounts payable and other current liabilities

Income taxes payable

Other, net

Net Cash Provided by Operating Activities

Investing Activities

Capital spending

Sales of property, plant and equipment

Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets

Other divestitures, sales of investments in noncontrolled affiliates and other assets

Short-term investments, by original maturity:

More than three months - purchases

More than three months - maturities

—

More than three months - sales

—

Three months or less, net

4

Other investing, net

Net Cash Used for Investing Activities

(Continued on following page)

A - 3

PepsiCo, Inc. and Subsidiaries

Condensed Consolidated Statement of Cash Flows (continued)

(in millions, unaudited)

36 Weeks Ended

Financing Activities

Proceeds from issuances of long-term debt

Payments of long-term debt

Short-term borrowings, by original maturity:

More than three months - proceeds

More than three months - payments

Three months or less, net

Cash dividends paid

Share repurchases

Proceeds from exercises of stock options

Withholding tax payments on restricted stock units and performance stock units converted

Other financing

Net Cash (Used for)/Provided by Financing Activities

Effect of exchange rate changes on cash and cash equivalents and restricted cash

Net (Decrease)/Increase in Cash and Cash Equivalents and Restricted Cash

Cash and Cash Equivalents and Restricted Cash, Beginning of Year

Cash and Cash Equivalents and Restricted Cash, End of Period

$

$

Supplemental Non-Cash Activity

Right-of-use assets obtained in exchange for lease obligations

$

$

Debt discharged via legal defeasance

$

—

$

A - 4

PepsiCo, Inc. and Subsidiaries

Condensed Consolidated Balance Sheet

(in millions except per share amounts)

(unaudited)

ASSETS

Current Assets

Cash and cash equivalents

$

$

Short-term investments

Accounts and notes receivable, net

Inventories:

Raw materials and packaging

Work-in-process

Finished goods

Prepaid expenses and other current assets

Total Current Assets

Property, Plant and Equipment, net

Amortizable Intangible Assets, net

Goodwill

Other Indefinite-Lived Intangible Assets

Investments in Noncontrolled Affiliates

Deferred Income Taxes

Other Assets

Total Assets

$

$

LIABILITIES AND EQUITY

Current Liabilities

Short-term debt obligations

$

$

Accounts payable and other current liabilities

Total Current Liabilities

Long-Term Debt Obligations

Deferred Income Taxes

Other Liabilities

Total Liabilities

Commitments and contingencies

PepsiCo Common Shareholders’ Equity

Common stock, par value 12/3¢ per share (authorized 3,600 shares; issued, net of repurchased common stock at par value: 1,373 and 1,374 shares, respectively)

Capital in excess of par value

Retained earnings

Accumulated other comprehensive loss

Repurchased common stock, in excess of par value (494 and 493 shares, respectively)

Total PepsiCo Common Shareholders’ Equity

Noncontrolling interests

Total Equity

Total Liabilities and Equity

$

$

A - 5

Non-GAAP Measures

In discussing financial results and guidance, the Company refers to the following measures which are not in accordance with U.S. Generally Accepted Accounting Principles (GAAP): organic revenue growth, core results and core constant currency results. We use non-GAAP financial measures internally to make operating and strategic decisions, including the preparation of our annual operating plan, evaluation of our overall business performance and as a factor in determining compensation for certain employees. We believe presenting non-GAAP financial measures provides additional information to facilitate comparison of our historical operating results and trends in our underlying operating results and provides additional transparency on how we evaluate our business. We also believe presenting these measures allows investors to view our performance using the same measures that we use in evaluating our financial and business performance and trends.

We consider quantitative and qualitative factors in assessing whether to adjust for the impact of items that may be significant or that could affect an understanding of our ongoing financial and business performance or trends. Examples of items for which we may make adjustments include: amounts related to mark-to-market gains or losses (non-cash); charges related to restructuring plans; charges associated with acquisitions and divestitures; gains associated with divestitures; asset impairment charges (non-cash); product recall-related impact; pension and retiree medical-related amounts, including all settlement and curtailment gains and losses; charges or adjustments related to the enactment of new laws, rules or regulations, such as tax law changes; amounts related to the resolution of tax positions; tax benefits related to reorganizations of our operations; debt redemptions, cash tender or exchange offers; and remeasurements of net monetary assets. See below for a description of adjustments to our GAAP financial measures included herein.

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

Glossary

We use the following definitions when referring to our non-GAAP financial measures, which may not be the same as or comparable to similar measures presented by other companies:

Acquisitions and divestitures: mergers and acquisition activity, as well as divestitures and other structural changes, including changes in ownership or control in consolidated subsidiaries and nonconsolidated equity investees.

Bottler case sales (BCS): Measure of physical beverage volume shipped to retailers and independent distributors from both PepsiCo and our independent bottlers.

Concentrate shipments and equivalents (CSE): Measure of our physical beverage volume shipments to independent bottlers.

Constant currency: Financial results assuming constant foreign currency exchange rates used for translation based on the rates in effect for the comparable prior-year period. In order to compute our constant currency results, we multiply or divide, as appropriate, our current-year U.S. dollar results by the current-year average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior-year average foreign exchange rates.

Core: Core results are non-GAAP financial measures which exclude certain items from our financial results. For further information regarding these excluded items, refer to “Items Affecting Comparability” in “Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Q3 2024 Form 10-Q and in “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the fiscal year ended December 30, 2023. For the periods presented, core results exclude the following items:

Mark-to-market net impact

Mark-to-market net gains and losses on commodity derivatives in corporate unallocated expenses. These gains and losses are subsequently reflected in division results when the divisions recognize the cost of the underlying commodity in operating profit.

Restructuring and impairment charges

Expenses related to the multi-year productivity plan publicly announced in 2019, which was expanded and extended through the end of 2028 to take advantage of additional opportunities within the initiatives of the plan.

Acquisition and divestiture-related charges

Acquisition and divestiture-related charges primarily include merger and integration charges and costs associated with divestitures, primarily consulting, advisory and other professional fees.

Impairment and other charges/credits

We recognized impairment charges taken as a result of our quantitative assessments of certain of our indefinite-lived intangible assets and related to our investment in Tropicana Brands Group. We also recognized adjustments to charges recorded in prior years from changes in estimates of previously recorded amounts.

A - 6

Product recall-related impact

We recognized property, plant and equipment and inventory write-offs, product returns, employee severance costs, customer and consumer-related costs and other costs in our Quaker Foods North America division associated with a previously announced voluntary recall of certain bars and cereals.

Pension and retiree medical-related impact

Pension and retiree medical-related impact includes settlement charges related to lump sum distributions exceeding the total of annual service and interest costs.

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.

Organic revenue growth: A measure that adjusts for the impacts of foreign exchange translation, acquisitions and divestitures and every five or six years, the impact of an additional week of 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.

Our 2024 organic revenue growth guidance excludes the impact of acquisitions, divestitures and other structural changes and foreign exchange translation. Our 2024 core effective tax rate guidance and our 2024 core constant currency EPS growth guidance exclude the mark-to-market net impact included in corporate unallocated expenses, restructuring and impairment charges and other items noted above. Our 2024 core constant currency EPS growth guidance also excludes the impact of foreign exchange translation. We are unable to reconcile our full year projected 2024 organic revenue growth to our full year projected 2024 reported net revenue growth because we are unable to predict the 2024 impact of foreign exchange due to the unpredictability of future changes in foreign exchange rates and because we are unable to predict the occurrence or impact of any acquisitions, divestitures or other structural changes.

We are also not able to reconcile our full year projected 2024 core effective tax rate to our full year projected 2024 reported effective tax rate and our full year projected 2024 core constant currency EPS growth to our full year projected 2024 reported EPS growth because we are unable to predict the 2024 impact of foreign exchange or the mark-to-market net impact on commodity derivatives due to the unpredictability of future changes in foreign exchange rates and commodity prices. Therefore, we are unable to provide a reconciliation of these measures.

A - 7

PepsiCo, Inc. and Subsidiaries

Reconciliation of GAAP and Non-GAAP Information

Organic Revenue Growth Rates

(unaudited)

Impact of

Impact of

Net Revenue Year over Year % Change

Reported

% Change, GAAP Measure

Foreign exchange translation

Acquisitions and divestitures

Organic

% Change, Non-GAAP Measure(a)

Organic

volume(b)

Effective net pricing

Frito-Lay North America

(1)

%

—

—

(1)

%

(1)

Quaker Foods North America (c)

%

—

—

%

—

PepsiCo Beverages North America

—

%

—

—

1

%

(3)

3

Latin America

(5)

%

7

—

3

%

(2)

4

Europe

7

%

—

—

6

%

1

5

Africa, Middle East and South Asia

(4)

%

—

6

%

Asia Pacific, Australia and New Zealand and China Region

(2)

%

1

—

(1)

%

(1)

—

Total

(1)

%

2

—

1

%

(2)

3

Impact of

Impact of

Net Revenue Year over Year % Change

Reported

% Change, GAAP Measure

Foreign exchange translation

Acquisitions and divestitures

Organic

% Change, Non-GAAP Measure(a)

Organic

volume(b)

Effective net pricing

Frito-Lay North America

—

%

—

—

—

%

(2)

2

Quaker Foods North America (c)

%

—

—

%

(1)

PepsiCo Beverages North America

1

%

—

—

1

%

(4)

5

Latin America

4

%

(1)

—

4

%

6

Europe

4

%

3

—

7

%

2

6

Africa, Middle East and South Asia

—

%

9

—

8

%

—

8

Asia Pacific, Australia and New Zealand and China Region

—

%

3

—

3

%

3

—

Total

1

%

1

—

2

%

(2)

4

(a)A financial measure that is not in accordance with GAAP. See pages A-6 through A-7 for further discussion.

(b)Excludes the impact of acquisitions and divestitures. In certain instances, the impact of organic volume on net revenue performance differs from the unit volume disclosed in the Summary Third-Quarter 2024 Performance table and Summary Year-to-Date Performance on pages 2 and 3, respectively, due to the impacts of product mix, nonconsolidated joint venture volume, and, for our franchise-owned beverage businesses, temporary timing differences between BCS and CSE. We report net revenue from our franchise-owned beverage businesses based on CSE. The volume sold by our nonconsolidated joint ventures has no direct impact on our net revenue.

(c)Net revenue decline was impacted by the Quaker Recall.

Note – Amounts may not sum due to rounding.

A - 8

PepsiCo, Inc. and Subsidiaries

Reconciliation of GAAP and Non-GAAP Information (continued)

Year over Year Growth Rates

(unaudited)

Impact of Items Affecting Comparability

Impact of

Year over Year % Change

Reported

% Change,

GAAP Measure

Mark-to-market net impact

Restructuring and impairment charges

Acquisition and divestiture-related charges

Impairment and other charges/credits

Product recall-related impact

Pension and retiree medical-related impact

Core

% Change, Non-GAAP Measure(a)

Foreign exchange

translation

Core Constant Currency

% Change,

Non-GAAP Measure(a)

Frito-Lay North America

(9)

%

—

—

—

—

—

—

(9)

%

—

(9)

%

Quaker Foods North America

%

—

—

—

—

—

—

%

—

%

PepsiCo Beverages North America

(6)

%

—

—

—

—

—

7

%

—

7

%

Latin America

—

%

—

1

—

—

—

—

1

%

8

9

%

Europe

%

—

—

—

1

—

—

%

—

%

Africa, Middle East and South Asia

%

—

—

—

(2)

—

—

%

(9)

%

Asia Pacific, Australia and New Zealand and China Region

%

—

—

—

—

—

—

9

%

2

%

Corporate unallocated expenses

(9)

%

(5)

2

—

—

—

%

—

%

Total Operating Profit

(4)

%

3

4

—

—

—

—

4

%

2

6

%

Net Income Attributable to PepsiCo

(5)

%

3

4

—

—

—

—

3

%

2

5

%

Net Income Attributable to PepsiCo per common share – diluted

(5)

%

3

4

—

—

—

—

3

%

2

5

%

Impact of Items Affecting Comparability

Impact of

Year over Year % Change

Reported

% Change,

GAAP Measure

Mark-to-market net impact

Restructuring and impairment charges

Acquisition and divestiture-related charges

Impairment and other charges/credits

Product recall-related impact

Pension and retiree medical-related impact

Core

% Change, Non-GAAP Measure(a)

Foreign exchange

translation

Core Constant Currency

% Change,

Non-GAAP Measure(a)

Frito-Lay North America

(5)

%

—

—

—

—

—

%

—

(4)

%

Quaker Foods North America

%

—

1

—

—

—

%

—

%

PepsiCo Beverages North America

%

—

5

—

(5)

—

—

%

—

%

Latin America

%

—

1

—

—

—

—

%

(2)

%

Europe

%

—

—

2

—

—

%

4

%

Africa, Middle East and South Asia

%

—

—

—

1

—

—

%

7

(3)

%

Asia Pacific, Australia and New Zealand and China Region

4

%

—

—

—

—

—

—

4

%

8

%

Corporate unallocated expenses

%

(4)

1

—

—

—

%

—

%

Total Operating Profit

3

%

—

1

—

(1)

2

—

5

%

1

6

%

Net Income Attributable to PepsiCo

4

%

—

1

—

(1)

2

—

6

%

1

7

%

Net Income Attributable to PepsiCo per common share – diluted

4

%

—

1

—

(1)

2

—

6

%

1

7

%

(a)A financial measure that is not in accordance with GAAP. See pages A-6 through A-7 for further discussion.

Note – Amounts may not sum due to rounding.

A - 9

PepsiCo, Inc. and Subsidiaries

Reconciliation of GAAP and Non-GAAP Information (continued)

Certain Line Items

(in millions except per share amounts, unaudited)

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 noncontrolling interests

Net income attributable to PepsiCo

Net income attributable to PepsiCo per common share - diluted

Effective tax rate(b)

Reported, GAAP Measure

$

$

$

$

$

$

$

$

$

%

Items Affecting Comparability

Mark-to-market net impact

—

—

—

Restructuring and impairment charges

7

2

—

Acquisition and divestiture-related charges

—

—

(5)

5

—

1

—

4

—

—

Impairment and other charges

—

—

—

2

—

8

—

Product recall-related impact

1

(1)

—

(1)

3

—

—

2

—

—

Pension and retiree medical-related impact

—

—

—

—

3

—

—

Core, Non-GAAP Measure (c)

$

$

$

$

$

$

$

$

$

%

Cost of sales

Gross profit

Selling, general and administrative expenses

Operating profit

Provision for income taxes(a)

Net income attributable to PepsiCo

Net income attributable to PepsiCo per common share - diluted

Effective tax rate(b)

Reported, GAAP Measure

$

$

$

$

$

$

$

%

Items Affecting Comparability

Mark-to-market net impact

Restructuring and impairment charges

(4)

4

—

Acquisition and divestiture-related charges

—

—

2

9

—

Impairment and other charges

—

—

(5)

5

1

4

—

—

Core, Non-GAAP Measure (c)

$

$

$

$

$

$

$

%

(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.

(b)The impact of items affecting comparability on our effective tax rate represents the difference in the effective tax rate resulting from a higher or lower tax rate as applicable to the items affecting comparability.

(c)A financial measure that is not in accordance with GAAP. See pages A-6 through A-7 for further discussion.

Note – Amounts may not sum due to rounding.

PepsiCo, Inc. and Subsidiaries

Reconciliation of GAAP and Non-GAAP Information (continued)

Certain Line Items

(in millions except per share amounts, unaudited)

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 noncontrolling interests

Net income attributable to PepsiCo

Net income attributable to PepsiCo per common share - diluted

Effective tax rate(b)

Reported, GAAP Measure

$

$

$

$

$

$

$

$

$

%

Items Affecting Comparability

Mark-to-market net impact

8

—

2

—

6

—

—

Restructuring and impairment charges

1

Acquisition and divestiture-related charges

—

—

(7)

7

—

2

—

5

—

—

Impairment and other charges

—

—

—

2

—

8

—

Product recall-related impact

(7)

3

—

Pension and retiree medical-related impact

—

—

—

—

3

—

—

Core, Non-GAAP Measure (c)

$

$

$

$

$

$

$

$

$

%

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 noncontrolling interests

Net income attributable to PepsiCo

Net income attributable to PepsiCo per common share - diluted

Effective tax rate(b)

Reported, GAAP Measure

$

$

$

$

$

$

$

$

$

%

Items Affecting Comparability

Mark-to-market net impact

3

(3)

—

(6)

—

—

Restructuring and impairment charges

(1)

1

—

Acquisition and divestiture-related charges

—

—

—

4

—

—

Impairment and other charges/credits

5

(5)

—

—

Core, Non-GAAP Measure (c)

$

$

$

$

$

$

$

$

$

%

(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.

(b)The impact of items affecting comparability on our effective tax rate represents the difference in the effective tax rate resulting from a higher or lower tax rate as applicable to the items affecting comparability.

(c)A financial measure that is not in accordance with GAAP. See pages A-6 through A-7 for further discussion.

Note – Amounts may not sum due to rounding.

PepsiCo, Inc. and Subsidiaries

Reconciliation of GAAP and Non-GAAP Information (continued)

Operating Profit by Division

(in millions, unaudited)

Items Affecting Comparability

Operating Profit

Reported, GAAP Measure

Mark-to-market net impact

Restructuring

and impairment charges

Acquisition and divestiture-related charges

Impairment and other charges

Product recall-related impact

Core,

Non-GAAP Measure(a)

Frito-Lay North America

$

$

—

$

8

$

—

$

—

$

—

$

Quaker Foods North America

—

—

—

—

(1)

PepsiCo Beverages North America

—

5

—

—

Latin America

—

—

—

—

Europe

—

—

—

Africa, Middle East and South Asia

—

4

—

—

—

Asia Pacific, Australia and New Zealand and China Region

—

2

—

—

—

Corporate unallocated expenses

—

—

—

Total

$

$

$

$

5

$

$

(1)

$

Items Affecting Comparability

Operating Profit

Reported, GAAP Measure

Mark-to-market net impact

Restructuring

and impairment charges

Acquisition and divestiture-related charges

Impairment and other charges/credits

Core,

Non-GAAP Measure(a)

Frito-Lay North America

$

$

—

$

6

$

—

$

—

$

Quaker Foods North America

—

—

—

—

PepsiCo Beverages North America

—

8

2

—

Latin America

—

8

—

—

Europe

—

—

(1)

Africa, Middle East and South Asia

—

5

—

6

Asia Pacific, Australia and New Zealand and China Region

—

2

—

—

Corporate unallocated expenses

9

—