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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 3, 2022 (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-20220903_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
3.200% Senior Notes Due 2029PEP29The Nasdaq Stock Market LLC
1.125% Senior Notes Due 2031PEP31The Nasdaq Stock Market LLC
0.400% Senior Notes Due 2032PEP32The Nasdaq Stock Market LLC
0.750% Senior Notes Due 2033PEP33The Nasdaq Stock Market LLC
3.550% Senior Notes Due 2034PEP34The 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 October 5, 2022 was 1,377,709,209.


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
 9/3/20229/4/20219/3/20229/4/2021
Net Revenue$21,971 $20,189 $58,396 $54,226 
Cost of sales10,308 9,394 27,156 24,945 
Gross profit11,663 10,795 31,240 29,281 
Selling, general and administrative expenses8,295 7,636 22,262 20,681 
Gain associated with the Juice Transaction (a)
14  (3,321) 
Impairment of intangible assets (see Notes 1 and 3)1  1,602  
Operating Profit3,353 3,159 10,697 8,600 
Other pension and retiree medical benefits income36 118 168 364 
Net interest expense and other(190)(232)(666)(731)
Income before income taxes3,199 3,045 10,199 8,233 
Provision for income taxes475 802 1,756 1,895 
Net income2,724 2,243 8,443 6,338 
Less: Net income attributable to noncontrolling interests
22 19 51 42 
Net Income Attributable to PepsiCo$2,702 $2,224 $8,392 $6,296 
Net Income Attributable to PepsiCo per Common Share
Basic$1.96 $1.61 $6.07 $4.56 
Diluted$1.95 $1.60 $6.04 $4.54 
Weighted-average common shares outstanding
Basic1,380 1,382 1,382 1,381 
Diluted1,387 1,389 1,389 1,388 
(a)In the 36 weeks ended September 3, 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.
3

Condensed Consolidated Statement of Comprehensive Income
PepsiCo, Inc. and Subsidiaries
(in millions, unaudited) 
12 Weeks Ended36 Weeks Ended
9/3/20229/4/20219/3/20229/4/2021
Net income$2,724 $2,243 $8,443 $6,338 
Other comprehensive (loss)/income, net of taxes:
Net currency translation adjustment(324)(335)390 64 
Net change on cash flow hedges(113)(21)(109)144 
Net pension and retiree medical adjustments108 90 (129)141 
Other2  3 2 
(327)(266)155 351 
Comprehensive income2,397 1,977 8,598 6,689 
Less: Comprehensive income attributable to
noncontrolling interests
22 19 51 42 
Comprehensive Income Attributable to PepsiCo$2,375 $1,958 $8,547 $6,647 
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
9/3/20229/4/2021
Operating Activities
Net income$8,443 $6,338 
Depreciation and amortization1,854 1,863 
Gain associated with the Juice Transaction(3,321) 
Brand portfolio impairment charges475  
Russia-Ukraine conflict charges1,402  
Operating lease right-of-use asset amortization346 340 
Share-based compensation expense233 215 
Restructuring and impairment charges 126 129 
Cash payments for restructuring charges(134)(165)
Acquisition and divestiture-related charges
69 12 
Cash payments for acquisition and divestiture-related charges(41)(25)
Pension and retiree medical plan expenses235 81 
Pension and retiree medical plan contributions(335)(715)
Deferred income taxes and other tax charges and credits(322)261 
Tax expense related to the Tax Cuts and Jobs Act (TCJ Act)86 190 
Tax payments related to the TCJ Act(309)(309)
Change in assets and liabilities:
Accounts and notes receivable(2,258)(1,416)
Inventories(837)(579)
Prepaid expenses and other current assets(124)(46)
Accounts payable and other current liabilities426 99 
Income taxes payable718 645 
Other, net(426)(284)
Net Cash Provided by Operating Activities6,306 6,634 
Investing Activities
Capital spending(2,556)(2,276)
Sales of property, plant and equipment228 40 
Acquisitions, net of cash acquired, investments in noncontrolled affiliates and purchases of intangible and other assets(804)(28)
Proceeds associated with the Juice Transaction
3,456  
Other divestitures, sales of investments in noncontrolled affiliates and other assets
15 158 
Short-term investments, by original maturity:
More than three months - purchases(46) 
More than three months - maturities 1,135 
Three months or less, net9 (65)
Other investing, net7 6 
Net Cash Provided by/(Used for) Investing Activities309 (1,030)
    
(Continued on following page)
5

Condensed Consolidated Statement of Cash Flows (continued)
PepsiCo, Inc. and Subsidiaries
(in millions, unaudited)
36 Weeks Ended
9/3/20229/4/2021
Financing Activities
Proceeds from issuances of long-term debt3,377  
Payments of long-term debt(1,653)(2,454)
Debt redemptions(1,550) 
Short-term borrowings, by original maturity:
More than three months - proceeds1,947  
More than three months - payments(1,932)(397)
Three months or less, net(45)19 
Cash dividends paid(4,586)(4,328)
Share repurchases - common(1,156)(106)
Proceeds from exercises of stock options113 146 
Withholding tax payments on restricted stock units (RSUs) and performance stock units (PSUs) converted(97)(82)
Other financing(25)(19)
Net Cash Used for Financing Activities(5,607)(7,221)
Effect of exchange rate changes on cash and cash equivalents and restricted cash(197)(30)
Net Increase/(Decrease) in Cash and Cash Equivalents and Restricted Cash811 (1,647)
Cash and Cash Equivalents and Restricted Cash, Beginning of Year5,707 8,254 
Cash and Cash Equivalents and Restricted Cash, End of Period$6,518 $6,607 
Supplemental Non-Cash Activity
Right-of-use assets obtained in exchange for lease obligations$560 $494 
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)
9/3/202212/25/2021
ASSETS
Current Assets
Cash and cash equivalents$6,415 $5,596 
Short-term investments327 392 
Accounts and notes receivable, less allowance: 9/22 - $165 and 12/21 - $147
10,739 8,680 
Inventories:
Raw materials and packaging2,303 1,898 
Work-in-process150 151 
Finished goods2,566 2,298 
5,019 4,347 
Prepaid expenses and other current assets1,043 980 
Assets held for sale 1,788 
Total Current Assets23,543 21,783 
Property, plant and equipment48,100 46,828 
Accumulated depreciation(25,300)(24,421)
Property, Plant and Equipment, net22,800 22,407 
Amortizable Intangible Assets, net1,314 1,538 
Goodwill18,388 18,381 
Other Indefinite-Lived Intangible Assets15,838 17,127 
Investments in Noncontrolled Affiliates3,224 2,350 
Deferred Income Taxes4,324 4,310 
Other Assets5,030 4,481 
Total Assets$94,461 $92,377 
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt obligations$3,109 $4,308 
Accounts payable and other current liabilities22,544 21,159 
Liabilities held for sale 753 
Total Current Liabilities25,653 26,220 
Long-Term Debt Obligations36,136 36,026 
Deferred Income Taxes4,724 4,826 
Other Liabilities8,813 9,154 
Total Liabilities75,326 76,226 
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: 1,379 and 1,383 shares, respectively)
23 23 
Capital in excess of par value4,036 4,001 
Retained earnings68,872 65,165 
Accumulated other comprehensive loss(14,743)(14,898)
Repurchased common stock, in excess of par value (488 and 484 shares, respectively)
(39,211)(38,248)
Total PepsiCo Common Shareholders’ Equity18,977 16,043 
Noncontrolling interests158 108 
Total Equity19,135 16,151 
Total Liabilities and Equity$94,461 $92,377 
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
9/3/20229/4/20219/3/20229/4/2021
SharesAmountSharesAmountSharesAmountSharesAmount
Common Stock
Balance, beginning of period1,381 $23 1,382 $23 1,383 $23 1,380 $23 
Change in repurchased common stock(2) 1  (4) 3  
Balance, end of period1,379 23 1,383 23 1,379 23 1,383 23 
Capital in Excess of Par Value
Balance, beginning of period3,970 3,863 4,001 3,910 
Share-based compensation expense77 70 236 215 
Stock option exercises, RSUs and PSUs converted1  (102)(119)
Withholding tax on RSUs and PSUs converted(10)(9)(97)(82)
Other(2) (2) 
Balance, end of period4,036 3,924 4,036 3,924 
Retained Earnings
Balance, beginning of period67,763 64,605 65,165 63,443 
Net income attributable to PepsiCo2,702 2,224 8,392 6,296 
Cash dividends declared – common (a)
(1,593)(1,493)(4,685)(4,403)
Balance, end of period68,872 65,336 68,872 65,336 
Accumulated Other Comprehensive Loss
Balance, beginning of period(14,416)(14,859)(14,898)(15,476)
Other comprehensive (loss)/income attributable to PepsiCo(327)(266)155 351 
Balance, end of period(14,743)(15,125)(14,743)(15,125)
Repurchased Common Stock
Balance, beginning of period(486)(38,787)(485)(38,333)(484)(38,248)(487)(38,446)
Share repurchases(3)(448)  (7)(1,179)(1)(106)
Stock option exercises, RSUs and PSUs converted1 23 1 46 3 215 4 265 
Other 1  1  1  1 
Balance, end of period(488)(39,211)(484)(38,286)(488)(39,211)(484)(38,286)
Total PepsiCo Common Shareholders’ Equity18,977 15,872 18,977 15,872 
Noncontrolling Interests
Balance, beginning of period121 99 108 98 
Net income attributable to noncontrolling interest22 19 51 42 
Distributions to noncontrolling interests(6) (20)(20)
Acquisitions21  21  
Other, net  (2)(2)
Balance, end of period158 118 158 118 
Total Equity$19,135 $15,990 $19,135 $15,990 
(a)Cash dividends declared per common share were $1.15 and $1.075 for the 12 weeks ended September 3, 2022 and September 4, 2021, respectively and $3.375 and $3.1725 for the 36 weeks ended September 3, 2022 and September 4, 2021, 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 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 25, 2021 (2021 Form 10-K). This report should be read in conjunction with our 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 36 weeks ended September 3, 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 reported on a monthly calendar basis 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 June, July and August are reflected in our results for the 12 weeks ended September 3, 2022, and the months of January through August are reflected in our results for the 36 weeks ended September 3, 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. 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.
9

Our Divisions
We are organized into seven reportable segments (also referred to as divisions), as follows:
1)Frito-Lay North America (FLNA), which includes our branded convenient food businesses in the United States and Canada;
2)Quaker Foods North America (QFNA), which includes our branded convenient food businesses, such as cereal, rice, pasta and other branded food, in the United States and Canada;
3)PepsiCo Beverages North America (PBNA), which includes our beverage businesses in the United States and Canada;
4)Latin America (LatAm), which includes all of our beverage and convenient food businesses in Latin America;
5)Europe, which includes all of our beverage and convenient food businesses in Europe;
6)Africa, Middle East and South Asia (AMESA), which includes all of our beverage and convenient food businesses in Africa, the Middle East and South Asia; and
7)Asia Pacific, Australia and New Zealand and China region (APAC), which includes all of our beverage and convenient food businesses in Asia Pacific, Australia and New Zealand, and China region.
Net revenue of each division is as follows:
12 Weeks Ended36 Weeks Ended
9/3/20229/4/20219/3/20229/4/2021
FLNA$5,563 $4,653 $15,583 $13,441 
QFNA713 618 2,101 1,839 
PBNA6,635 6,402 18,108 17,632 
LatAm2,517 2,100 6,406 5,309 
Europe3,646 3,612 8,466 8,693 
AMESA1,726 1,665 4,426 4,150 
APAC1,171 1,139 3,306 3,162 
Total$21,971 $20,189 $58,396 $54,226 
10

Our primary performance obligation is the distribution and sales of beverage and convenient food products to our customers. The following tables reflect the approximate percentage of net revenue generated between our beverage business and our convenient food business for each of our international divisions, as well as our consolidated net revenue:
12 Weeks Ended
9/3/20229/4/2021
Beverages(a)
Convenient Foods
Beverages(a)
Convenient Foods
LatAm10 %90 %10 %90 %
Europe55 %45 %55 %45 %
AMESA35 %65 %35 %65 %
APAC25 %75 %25 %75 %
PepsiCo45 %55 %45 %55 %
36 Weeks Ended
9/3/20229/4/2021
Beverages(a)
Convenient Foods
Beverages(a)
Convenient Foods
LatAm10 %90 %10 %90 %
Europe50 %50 %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 divisions, is approximately 40% of our consolidated net revenue in each of the 12 and 36 weeks ended September 3, 2022 and September 4, 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 Ended36 Weeks Ended
9/3/20229/4/20219/3/20229/4/2021
FLNA$1,588 $1,357 $4,332 $3,979 
QFNA122 106 416 384 
PBNA (a) (b)
784