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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 September 4, 2021 (36 weeks)
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to             
Commission file number 1-1183
pep-20210904_g1.jpg
PepsiCo, Inc.
(Exact Name of Registrant as Specified in its Charter)
North Carolina13-1584302
(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 classTrading SymbolsName of each exchange on which registered
Common Stock, par value 1-2/3 cents per sharePEPThe Nasdaq Stock Market LLC
2.500% Senior Notes Due 2022PEP22aThe Nasdaq Stock Market LLC
0.250% Senior Notes Due 2024PEP24The Nasdaq Stock Market LLC
2.625% Senior Notes Due 2026PEP26The Nasdaq Stock Market LLC
0.750% Senior Notes Due 2027PEP27The Nasdaq Stock Market LLC
0.875% Senior Notes Due 2028PEP28The Nasdaq Stock Market LLC
0.500% Senior Notes Due 2028PEP28aThe Nasdaq Stock Market LLC
1.125% Senior Notes Due 2031PEP31The Nasdaq Stock Market LLC
0.400% Senior Notes Due 2032PEP32The Nasdaq Stock Market LLC
0.875% Senior Notes Due 2039PEP39The Nasdaq Stock Market LLC
1.050% Senior Notes Due 2050PEP50The 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 September 28, 2021 was 1,382,652,943.


PepsiCo, Inc. and Subsidiaries

Table of Contents
Page No.
Part I Financial Information
Item 1.Condensed Consolidated Financial Statements
Item 2.
Report of Independent Registered Public Accounting Firm
Item 3.
Item 4.
Part II Other Information
Item 1.
Item 1A.
Item 2.
Item 6.

2

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 Ended36 Weeks Ended
 9/4/20219/5/20209/4/20219/5/2020
Net Revenue$20,189 $18,091 $54,226 $47,917 
Cost of sales9,394 8,156 24,945 21,371 
Gross profit10,795 9,935 29,281 26,546 
Selling, general and administrative expenses7,636 6,924 20,681 19,292 
Operating Profit3,159 3,011 8,600 7,254 
Other pension and retiree medical benefits income118 86 364 247 
Net interest expense and other(232)(264)(731)(789)
Income before income taxes3,045 2,833 8,233 6,712 
Provision for income taxes802 526 1,895 1,396 
Net income2,243 2,307 6,338 5,316 
Less: Net income attributable to noncontrolling interests
19 16 42 41 
Net Income Attributable to PepsiCo$2,224 $2,291 $6,296 $5,275 
Net Income Attributable to PepsiCo per Common Share
Basic$1.61 $1.66 $4.56 $3.80 
Diluted$1.60 $1.65 $4.54 $3.79 
Weighted-average common shares outstanding
Basic1,382 1,384 1,381 1,387 
Diluted1,389 1,390 1,388 1,393 
See accompanying notes to the condensed consolidated financial statements.
3

Condensed Consolidated Statement of Comprehensive Income
PepsiCo, Inc. and Subsidiaries
(in millions, unaudited) 
12 Weeks Ended36 Weeks Ended
9/4/20219/5/20209/4/20219/5/2020
Net income$2,243 $2,307 $6,338 $5,316 
Other comprehensive (loss)/income, net of taxes:
Net currency translation adjustment(335)414 64 (1,136)
Net change on cash flow hedges(21)11 144 (37)
Net pension and retiree medical adjustments90 (1)141 119 
Other (3)2 (3)
(266)421 351 (1,057)
Comprehensive income1,977 2,728 6,689 4,259 
Less: Comprehensive income attributable to
noncontrolling interests
19 16 42 41 
Comprehensive Income Attributable to PepsiCo$1,958 $2,712 $6,647 $4,218 
See accompanying notes to the condensed consolidated financial statements.
4

Condensed Consolidated Statement of Cash Flows
PepsiCo, Inc. and Subsidiaries
(in millions, unaudited)
 36 Weeks Ended
 9/4/20219/5/2020
Operating Activities
Net income$6,338 $5,316 
Depreciation and amortization1,863 1,731 
Share-based compensation expense215 186 
Restructuring and impairment charges 129 124 
Cash payments for restructuring charges(165)(166)
Acquisition and divestiture-related charges
12 286 
Cash payments for acquisition and divestiture-related charges(25)(97)
Pension and retiree medical plan expenses81 121 
Pension and retiree medical plan contributions(715)(501)
Deferred income taxes and other tax charges and credits261 96 
Tax expense related to the Tax Cuts and Jobs Act (TCJ Act)190  
Tax payments related to the TCJ Act(309)(78)
Change in assets and liabilities:
Accounts and notes receivable(1,416)(1,430)
Inventories(579)(549)
Prepaid expenses and other current assets(46)(202)
Accounts payable and other current liabilities99 289 
Income taxes payable645 583 
Other, net56 414 
Net Cash Provided by Operating Activities6,634 6,123 
Investing Activities
Capital spending(2,276)(2,074)
Sales of property, plant and equipment40 26 
Acquisitions, net of cash acquired, and investments in noncontrolled affiliates(28)(6,373)
Divestitures and sales of investments in noncontrolled affiliates
158 4 
Short-term investments, by original maturity:
More than three months - purchases (400)
More than three months - maturities1,135  
Three months or less, net
(65)23 
Other investing, net6 33 
Net Cash Used for Investing Activities(1,030)(8,761)
    
(Continued on following page)
5

Condensed Consolidated Statement of Cash Flows (continued)
PepsiCo, Inc. and Subsidiaries
(in millions, unaudited)
36 Weeks Ended
9/4/20219/5/2020
Financing Activities
Proceeds from issuances of long-term debt 10,564 
Payments of long-term debt(2,454)(814)
Short-term borrowings, by original maturity:
More than three months - proceeds
 4,069 
More than three months - payments
(397)(1,801)
Three months or less, net
19 (11)
Cash dividends paid(4,328)(4,094)
Share repurchases - common(106)(1,543)
Proceeds from exercises of stock options146 145 
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted(82)(86)
Other financing(19)(18)
Net Cash (Used for)/Provided by Financing Activities(7,221)6,411 
Effect of exchange rate changes on cash and cash equivalents and restricted cash(30)(184)
Net (Decrease)/Increase in Cash and Cash Equivalents and Restricted Cash(1,647)3,589 
Cash and Cash Equivalents and Restricted Cash, Beginning of Year8,254 5,570 
Cash and Cash Equivalents and Restricted Cash, End of Period$6,607 $9,159 
Supplemental Non-Cash Activity
Right-of-use assets obtained in exchange for lease obligations$494 $431 
See accompanying notes to the condensed consolidated financial statements.
6

Condensed Consolidated Balance Sheet
PepsiCo, Inc. and Subsidiaries
(in millions except per share amounts)
(Unaudited)
9/4/202112/26/2020
ASSETS
Current Assets
Cash and cash equivalents$6,506 $8,185 
Short-term investments344 1,366 
Accounts and notes receivable, less allowance: 9/21 - $165 and 12/20 - $201
9,545 8,404 
Inventories:
Raw materials and packaging1,926 1,720 
Work-in-process178 205 
Finished goods2,260 2,247 
4,364 4,172 
Prepaid expenses and other current assets1,058 874 
Assets held for sale1,893  
Total Current Assets23,710 23,001 
Property, plant and equipment45,688 46,340 
Accumulated depreciation(24,431)(24,971)
Property, Plant and Equipment, net21,257 21,369 
Amortizable Intangible Assets, net1,584 1,703 
Goodwill18,531 18,757 
Other Indefinite-Lived Intangible Assets17,291 17,612 
Investments in Noncontrolled Affiliates2,791 2,792 
Deferred Income Taxes4,357 4,372 
Other Assets3,733 3,312 
Total Assets$93,254 $92,918 
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations$4,234 $3,780 
Accounts payable and other current liabilities20,060 19,592 
Liabilities held for sale783  
Total Current Liabilities25,077 23,372 
Long-Term Debt Obligations37,023 40,370 
Deferred Income Taxes4,529 4,284 
Other Liabilities10,635 11,340 
Total Liabilities77,264 79,366 
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: 1,383 and 1,380 shares, respectively)
23 23 
Capital in excess of par value3,924 3,910 
Retained earnings65,336 63,443 
Accumulated other comprehensive loss(15,125)(15,476)
Repurchased common stock, in excess of par value (484 and 487 shares, respectively)
(38,286)(38,446)
Total PepsiCo Common Shareholders’ Equity15,872 13,454 
Noncontrolling interests118 98 
Total Equity15,990 13,552 
Total Liabilities and Equity$93,254 $92,918 
See accompanying notes to the condensed consolidated financial statements.
7

Condensed Consolidated Statement of Equity
PepsiCo, Inc. and Subsidiaries
(in millions, except per share amounts, unaudited)
12 Weeks Ended36 Weeks Ended
9/4/20219/5/20209/4/20219/5/2020
SharesAmountSharesAmountSharesAmountSharesAmount
Common Stock
Balance, beginning of period1,382 $23 1,385 $23 1,380 $23 1,391 $23 
Change in repurchased common stock1  (2) 3  (8) 
Balance, end of period1,383 23 1,383 23 1,383 23 1,383 23 
Capital in Excess of Par Value
Balance, beginning of period3,863 3,772 3,910 3,886 
Share-based compensation expense70 85 215 186 
Stock option exercises, RSUs and PSUs converted (2)(119)(138)
Withholding tax on RSUs and PSUs converted(9)(7)(82)(86)
Balance, end of period3,924 3,848 3,924 3,848 
Retained Earnings
Balance, beginning of period64,605 62,145 63,443 61,946 
Cumulative effect of accounting changes   (34)
Net income attributable to PepsiCo2,224 2,291 6,296 5,275 
Cash dividends declared – common (a)
(1,493)(1,423)(4,403)(4,174)
Balance, end of period65,336 63,013 65,336 63,013 
Accumulated Other Comprehensive Loss
Balance, beginning of period(14,859)(15,778)(15,476)(14,300)
Other comprehensive (loss)/income attributable to PepsiCo(266)421 351 (1,057)
Balance, end of period(15,125)(15,357)(15,125)(15,357)
Repurchased Common Stock
Balance, beginning of period(485)(38,333)(482)(37,671)(487)(38,446)(476)(36,769)
Share repurchases  (3)(400)(1)(106)(12)(1,559)
Stock option exercises, RSUs and PSUs converted1 46 1 27 4 265 4 284 
Other 1    1   
Balance, end of period(484)(38,286)(484)(38,044)(484)(38,286)(484)(38,044)
Total PepsiCo Common Shareholders’ Equity15,872 13,483 15,872 13,483 
Noncontrolling Interests
Balance, beginning of period99 96 98 82 
Net income attributable to noncontrolling interest19 16 42 41 
Distributions to noncontrolling interests  (20)(15)
Acquisitions   5 
Other, net  (2)(1)
Balance, end of period118 112 118 112 
Total Equity$15,990 $13,595 $15,990 $13,595 
(a)Cash dividends declared per common share were $1.075 and $1.0225 for the 12 weeks ended September 4, 2021 and September 5, 2020, respectively, and $3.1725 and $3.00 for the 36 weeks ended September 4, 2021 and September 5, 2020, respectively.

See accompanying notes to the condensed consolidated financial statements.

8

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 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 Form 10-K). This report should be read in conjunction with our 2020 Form 10-K. In our opinion, these financial statements include all normal and recurring adjustments necessary for a fair presentation. The results for the 12 and 36 weeks ended September 4, 2021 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 on a monthly calendar basis for which the months of June, July and August are reflected in our results for the 12 weeks ended September 4, 2021 and the months of January through August are reflected in our results for the 36 weeks ended September 4, 2021.
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 business and economic uncertainty resulting from the novel coronavirus (COVID-19) pandemic 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.
Our Divisions
We are organized into seven reportable segments (also referred to as divisions), as follows:
1)Frito-Lay North America (FLNA), which includes our branded food and snack businesses in the United States and Canada;
2)Quaker Foods North America (QFNA), which includes our cereal, rice, pasta and other branded food businesses in the United States and Canada;
9

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 businesses in Latin America;
5)Europe, which includes all of our beverage, food and snack businesses in Europe;
6)Africa, Middle East and South Asia (AMESA), which includes all of our beverage, food and snack 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 businesses in Asia Pacific, Australia and New Zealand, and China region.
Net revenue of each division is as follows:
12 Weeks Ended36 Weeks Ended
9/4/20219/5/20209/4/20219/5/2020
FLNA$4,653 $4,399 $13,441 $12,746 
QFNA618 608 1,839 1,906 
PBNA6,402 5,958 17,632 15,766 
LatAm2,100 1,654 5,309 4,531 
Europe3,612 3,323 8,693 7,887 
AMESA (a)
1,665 1,252 4,150 2,866 
APAC (b)
1,139 897 3,162 2,215 
Total$20,189 $18,091 $54,226 $47,917 
(a)The increase in net revenue for the 36 weeks ended September 4, 2021 primarily reflects our acquisition of Pioneer Food Group Ltd. (Pioneer Foods). See Note 12 for further information.
(b)The increase in net revenue for the 36 weeks ended September 4, 2021 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 food and snack products to our customers. The following tables reflect the approximate percentage of net revenue generated between our beverage business and our food and snack business for each of our international divisions, as well as our consolidated net revenue:
12 Weeks Ended
9/4/20219/5/2020
Beverage(a)
Food/Snack
Beverage(a)
Food/Snack
LatAm10 %90 %10 %90 %
Europe55 %45 %55 %45 %
AMESA35 %65 %30 %70 %
APAC25 %75 %25 %75 %
PepsiCo45 %55 %45 %55 %
10

36 Weeks Ended
9/4/20219/5/2020
Beverage(a)
Food/Snack
Beverage(a)
Food/Snack
LatAm10 %90 %10 %90 %
Europe55 %45 %55 %45 %
AMESA35 %65 %35 %65 %
APAC25 %75 %25 %75 %
PepsiCo45 %55 %45 %55 %
(a)Beverage revenue from company-owned bottlers, which primarily includes our consolidated bottling operations in our PBNA and Europe segments, is approximately 40% of our consolidated net revenue in each of the 12 and 36 weeks ended September 4, 2021 and September 5, 2020. 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 Ended36 Weeks Ended
9/4/20219/5/20209/4/20219/5/2020
FLNA$1,357 $1,353 $3,979 $3,833 
QFNA106 145 384 491 
PBNA773 697 1,948 1,391 
LatAm393 250 967 700 
Europe439 480 975 977 
AMESA312 193 706 386 
APAC201 163 601 494 
Total divisions3,581 3,281 9,560 8,272 
Corporate unallocated expenses (a)
(422)(270)(960)(1,018)
Total$3,159 $3,011 $8,600 $7,254 
(a)In the 36 weeks ended September 4, 2021, we sold our short-term investment in a publicly traded company and recorded a pre-tax net gain of $69 million ($52 million after-tax or $0.04 per share), net of discounts, in selling, general and administrative expenses associated with this sale.
Operating profit includes certain pre-tax charges taken as a result of the COVID-19 pandemic. These pre-tax charges by division are as follows: