PEPPepsiCo

Consumer preferences continuously evolve due to a variety of factors, including: changes in consumer demographics, consumption patterns, patterns (including increased food purchased away-from-home), diet (whether due to changes in consumer behavior and eating habits, increasing use of weight-loss drugs drugs, such as GLP-1 medications, or other factors) and channel preferences (including continued increases in the e-commerce and online-to-offline channels); channels and use of artificial intelligence shopping agents that autonomously select products that may not be ours); pricing (including the effective impact of tariffs and taxes imposed on the manufacture, distribution or sale of certain of our products as a result of ingredients contained in such products); affordability pressures and changes in consumer spending patterns (including if consumers switch to private label or lower-priced product offerings); changes in funding for or restrictions on the inclusion of our products in benefit programs, such as the Supplemental Nutrition Assistance Program (SNAP) in the United States; product quality; product functionality (including products high in protein or fiber-enriched); concerns or perceptions regarding packaging and its environmental impact (such as single-use and other plastic packaging); concerns or perceptions regarding the processing, nutrition profile and health effects of, or location of origin of, ingredients or substances in our products or packaging, including due to public statements by government officials, increased litigation, changes in regulations, regulatory scrutiny or the results of third-party studies (whether or not scientifically valid); and concerns or perceptions regarding our workforce policies and initiatives.

Our business can be adversely affected if our strategy is not effective, if we fail to achieve the commercial and financial priorities announced during 2025 to improve our marketplace competitiveness and financial performance, including in our North American businesses, if we are unable to effectively promote or develop our existing products or introduce and effectively market new products, products (including in response to increased consumer demand for products with certain attributes, functional benefits, ingredients or nutrition profiles), if we are unable to effectively digitalize our operations and adopt new technologies, including artificial intelligence and data analytics to develop new commercial insights and improve operating efficiencies, if we are unable to continuously strengthen and evolve our capabilities in digital marketing, if our competitors spend more aggressively or effectively than we do, if our competitors are more successful than us in shifting to products that are less effected affected by the impact of taxes imposed as a result of ingredients contained in such products, or if we are otherwise unable to effectively respond to supply disruptions, pricing pressure (including as a result of commodity inflation) or otherwise compete effectively, and we may be unable to grow or maintain sales or category share or we may need to increase capital, marketing or other expenditures.

The results of elections, referendums or other political conditions (including government shutdowns), geopolitical events and tensions, wars and other military conflicts (such as the ongoing conflicts conflict in Ukraine and the Middle East) recent intervention in Venezuela) in these markets have in the past impacted and could continue to impact how existing laws, regulations and government programs or policies are implemented or result in uncertainty as to how such laws, regulations, programs or policies may change, including with respect to the negotiation of new trade agreements, new, expanded or retaliatory tariffs against certain countries or covering certain products or ingredients (including recent U.S. tariffs imposed or threatened to be imposed on China, the European Union, Canada and Mexico and other countries and any retaliatory actions taken by such countries), sanctions, environmental and climate change regulations, taxes, benefit programs, programs (including any changes to governmental subsidies provided to our consumers such as SNAP in the United States), the movement of goods, services and people between countries, relationships between countries, customer or consumer perception of a particular country or its government and other matters.

The imposition of new laws, laws or regulatory requirements (including sanctions), changes in laws or regulatory requirements or changing interpretations thereof, or uncertainty regarding the interpretation thereof (including as a result of executive orders), changes in the enforcement priorities of regulators, and differing or competing regulations and standards across the markets where our products or raw materials are made, manufactured, distributed or sold, have in the past resulted in and could continue to result in higher compliance costs, capital expenditures and higher production costs, or make it necessary for us to reformulate certain of our products, products or otherwise make changes to our operations, resulting in adverse effects on our business.

Our reputation or brand image has in the past been, and could in the future be, adversely impacted by a variety of factors, including: any failure by us, our business partners, or other actors in our supply chain to maintain high ethical, business and environmental, social and governance practices, including with respect to human rights, child labor, workforce policies and initiatives, workplace conditions and employee health and safety; any failure, or perception of a perceived failure, to achieve or make sufficient progress toward our environmental, social and governance goals, or any revisions of or negative perception toward such goals, including with respect to the nutrition profile of our products, packaging, water use, our impact on the environment and our workforce policies and initiatives; any difficulties executing our strategic initiatives; any failure to address health or other concerns about our products, products we distribute, certain brands licensed to and distributed to third parties (including alcoholic beverages), or particular ingredients or substances in our products, including concerns or perceptions regarding whether certain of our products are “ultra-processed” “ultra-processed,” contain certain ingredients or substances or otherwise contribute to obesity and other health conditions or an increase in public health costs; our research and development efforts; any product quality or safety issues, including the recall of any of our products; any failure to comply with laws and regulations; consumer perception of our advertising campaigns, sponsorship arrangements, marketing programs, use of social media and our response to political and social issues, geopolitical events and tensions, wars and other military conflicts, including the ongoing conflicts in Ukraine and the Middle East, or catastrophic events; or any failure to effectively respond to negative or inaccurate comments about us on social media or otherwise regarding any of the foregoing.

Certain Numerous countries, including European Union member states, have enacted or are expected to enact legislation incorporating the global minimum tax with effect from 2024 Organization for Economic Co-operation and widespread implementation of Development (OECD) model rules for a global minimum tax is rate of 15% with widespread implementation expected by the end of 2025. 2026.

Lack of available water of acceptable quality, actions by governmental and non-governmental organizations, investors, customers and consumers on water scarcity and increasing pressure to conserve and replenish water in areas of scarcity and stress, including due to the effects of climate change, can lead to: supply chain disruption; adverse effects on our operations or the operations of our business partners; higher compliance costs; increased capital expenditures (including investments in the development of technologies to enhance water efficiency and reduce consumption); higher production costs, including less favorable pricing for water; the interruption or cessation of operations at, or relocation of, our facilities or the facilities of our business partners; failure to achieve our goals relating to water use; perception of our failure to act responsibly with respect to water use or to effectively respond to legal or regulatory requirements concerning water scarcity; or damage to our reputation, any of which can adversely affect our business.

In this changing retail landscape, retailers and buying groups have impacted and may continue to impact our ability to compete in these jurisdictions by demanding lower prices or increased promotional programs, are shifting traditional value propositions, removing our products or otherwise reducing shelf space allocated to our products and focusing on introducing and developing private-label brands.

In addition, our business operations, including our supply chain, are subject to disruption by geopolitical events and tensions, wars and other military conflicts, natural disasters, pandemics, epidemics or other events beyond our control that could negatively impact product availability and decrease demand for our products if our crisis management plans do not effectively mitigate these issues.

The increasing power of retailers and consolidation These changing conditions may also adversely impact how our other customers’ ability to customers compete effectively in the market markets in which they operate, which may in turn affect orders purchasing patterns of our products.

Depending on the function involved, such errors can also lead to business disruption, systems performance degradation, processing inefficiencies or other systems disruptions, the loss of or damage to intellectual property or sensitive data through security breaches or otherwise, incorrect or adverse effects on financial reporting, litigation, claims, legal or regulatory proceedings, inquiries or investigations, fines or penalties, remediation costs, damage to our reputation or have a negative impact on employee morale, all of which can adversely affect our business.

A deterioration in our underlying assumptions, or those of our equity method investees, regarding the impact of competitive operating conditions, geopolitical conditions (including the ongoing conflicts in Ukraine and the Middle East), conditions, macroeconomic conditions, including the interest rate environment, or other factors used to estimate the future performance of any of our reporting units or assets, including any deterioration in the weighted-average cost of capital based on market data available at the time, as well as our ability to hold the investment until recovery of fair value to amortized cost for available-for-sale debt securities, have resulted and could in the future result in an impairment charge (including the impairments of our investment in TBG), charge, thereby adversely affecting our results of operations.

As the legislation becomes effective in countries in which we do business, our taxes could will increase and negatively impact our provision for income taxes.

FLNA QFNA PFNA PBNA IB Franchise EMEA LatAm Europe AMESA APAC Foods Asia Pacific Foods Total 2023 2024 Net revenue $ 24,914 27,431 $ 3,101 27,769 $ 27,626 4,879 $ 11,654 16,658 $ 13,234 10,568 $ 6,139 4,549 $ 4,803 $ 91,471 91,854 Segment cost of sales (a) 8,829 1,603 12,856 4,958 7,178 3,888 2,422 10,245 12,701 1,482 9,639 4,420 2,756 Segment selling, general and administrative expenses (a) 9,288 870 11,808 4,413 4,213 1,434 1,601 (a)(g) 10,204 11,964 1,689 4,787 4,047 1,402 Restructuring and impairment charges (c) 42 — 41 29 223 15 8 (b) 161 238 24 116 49 9 Acquisition and divestiture-related charges (d) (c) 9 8 — — 16 — (2) 2 — 5 Impairment and other charges/credits charges (d) 9 556 4 145 — — Indirect tax impact (e) — — 321 2 855 (7) 59 218 — — — Product recall-related impact (f) — 136 (h) 184 — — — — — Division Segment operating profit $ 6,755 6,619 $ 492 2,302 $ 2,584 1,462 $ 2,252 1,971 $ 767 2,052 $ 807 377 $ 713 $ 14,370 14,783 Corporate unallocated expenses (2,384) (1,896) Operating profit 11,986 12,887 Other pension and retiree medical benefits income 250 expense (22) Net interest expense and other (819) (919) Income before income taxes $ 11,417 11,946

Cost of sales Gross profit Selling, general and administrative expenses Impairment of intangible assets Operating profit Other pension and retiree medical benefits (expense)/income Provision for income taxes(a) Net income attributable to PepsiCo 2024 for income taxes(a) 2025 Reported, GAAP Measure measure $ 41,744 43,066 $ 50,110 50,859 $ 37,190 37,368 $ 33 1,993 $ 12,887 11,498 $ (22) (133) $ 2,320 1,949 $ 9,578 8,240 Items Affecting Comparability Mark-to-market net impact 26 (26) (3) 3 4 — (1) — (25) — (6) (19) (1) Restructuring and impairment charges (133) 133 (551) (14) 698 29 164 563 (236) 236 (728) — 964 19 191 792 Acquisition and divestiture-related charges (57) 57 (346) (50) 453 — — (22) — 22 — 4 18 106 347 Impairment and other charges — — (695) (19) 714 (3) (1,943) 1,946 — 184 530 Product recall-related impact (176) 176 (8) — 184 3 44 143 455 1,491 Indirect and income tax impact (218) 218 (b) — — 218 (82) — 82 — 218 (29) 111 Pension and retiree medical-related impact — — 30 — — — 276 61 215 (30) 279 53 196 Core, Non-GAAP Measure non-GAAP measure $ 41,243 42,770 $ 50,611 51,155 $ 35,913 36,243 $ — $ 14,698 14,912 $ 286 165 $ 2,771 2,725 $ 11,246 11,176

OUR BUSINESS Executive Overview 34 33 Our Operations 35 34 Other Relationships 36 34 Our Business Risks 36 34 OUR FINANCIAL RESULTS Results of Operations – Consolidated Review 41 40 Results of Operations – Division Segment Review 41 PFNA 43 FLNA 45 QFNA 45 PBNA 45 43 IB Franchise 43 EMEA 44 LatAm 46 Europe 46 AMESA 46 APAC 47 Foods 44 Asia Pacific Foods 44 Non-GAAP Measures 47 44 Items Affecting Comparability 49 46 Our Liquidity and Capital Resources 52 Changes in Line Items in Our Consolidated Financial Statements 54 49 Return on Invested Capital 55 51 OUR CRITICAL ACCOUNTING POLICIES AND ESTIMATES Revenue Recognition 56 52 Goodwill and Other Intangible Assets 57 53 Income Tax Expense and Accruals 58 54 Pension and Retiree Medical Plans 59 55 CONSOLIDATED STATEMENT OF INCOME 61 57 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 62 58 CONSOLIDATED STATEMENT OF CASH FLOWS 63 59 CONSOLIDATED BALANCE SHEET 65 61 CONSOLIDATED STATEMENT OF EQUITY 66 62 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Note 1 – Basis of Presentation and Our Divisions 67 Segments 63 Note 2 – Our Significant Accounting Policies 74 69 Note 3 – Restructuring and Impairment Charges 79 73 Note 4 – Intangible Assets 81 75 Note 5 – Income Taxes 84 77 Note 6 – Share-Based Compensation 88 81 Note 7 – Pension, Retiree Medical and Savings Plans 92 85 Note 8 – Debt Obligations 98 91 Note 9 – Financial Instruments 100 93 Note 10 – Net Income Attributable to PepsiCo per Common Share 106 99 Note 11 – Accumulated Other Comprehensive Loss Attributable to PepsiCo 107 100 Note 12 – Leases 108 101 Note 13 – Acquisitions and Divestitures 110 103 Note 14 – Supply Chain Financing Arrangements 112 104 Note 15 – Supplemental Financial Information 113 106 Note 16 – Legal Contingencies 114 107 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 115 108 GLOSSARY 118 111

FLNA QFNA PFNA PBNA IB Franchise EMEA LatAm Europe AMESA APAC Foods Asia Pacific Foods Total 2023 Net revenue $ 24,914 $ 3,101 28,015 $ 27,626 $ 11,654 4,559 $ 13,234 16,210 $ 6,139 10,576 $ 4,803 4,485 $ 91,471 Segment cost of sales (a) 8,829 1,603 10,432 12,856 4,958 7,178 3,888 2,422 1,478 9,666 4,591 2,711 Segment selling, general and administrative expenses (a) 9,288 870 10,158 11,808 4,413 4,213 1,434 1,601 1,641 4,569 4,056 1,404 Restructuring and impairment charges (c) (b) 42 — 41 11 227 29 223 15 8 Acquisition and divestiture-related charges (d) — (c) — 16 — (2) — 2 — Impairment and other charges/credits (e) — (d) — 321 862 (14) 2 855 (7) 59 Product recall-related impact (f) — (h) 136 — — — — — Division Segment operating profit $ 6,755 $ 492 7,247 $ 2,584 $ 2,252 567 $ 767 1,764 $ 807 1,898 $ 713 301 $ 14,370 14,361 Corporate unallocated expenses (2,384) (2,375) Operating profit 11,986 Other pension and retiree medical benefits income 250 Net interest expense and other (819) Income before income taxes $ 11,417

In 2025, business performance in conjunction with lower expectations of future business performance compared to projections, as well as the fourth quarter of 2022, macroeconomic conditions including a high interest rate and inflationary cost environment, coupled with recent business performance, transaction discussed below, indicated a deterioration of the significant inputs used to determine the fair value of our indefinite-lived intangible assets in various markets, primarily assumptions underlying the weighted-average cost of capital and the impact of economic uncertainty on current and future financial performance, certain markets and required us to perform a quantitative assessment assessments on certain assets.

Options(a) Weighted-Average Exercise Weighted-Average Contractual Aggregate Intrinsic Value(a) Price Per Unit Life Remaining (years) Outstanding at December 30, 2023 11,167 $136.10 Granted 2,034 $164.48 Exercised (1,555) $107.36 Forfeited/expired (591) $165.37 Outstanding at December 28, 2024 11,055 $143.88 6.16 $177,780 Granted 1,804 $150.28 Exercised (896) $108.72 Forfeited/expired (642) $163.52 Outstanding at December 27, 2025 11,321 $146.60 6.0 $100,992 Exercisable at December 28, 2024 5,369 $119.78 3.98 $177,780 27, 2025 6,279 $134.10 4.2 $98,385 Expected to vest as of December 28, 2024 5,403 $166.64 8.19 $— 27, 2025 4,793 $162.45 8.2 $2,468

Fair Value Hierarchy Level 2025 2024 2023 U.S. plan assets (a)(b) Equity securities, including preferred stock (c) 1 $ 4,248 $ 4,270 $ 4,698 Government securities (d) 2 1,573 1,538 1,812 Corporate bonds (d) 2 3,963 3,903 4,233 Mortgage-backed securities (d) 2 134 125 133 Contracts with insurance companies (e) 3 1 1 Cash and cash equivalents (f) (g) 1, 2 700 732 349 Sub-total U.S. plan assets 10,619 10,569 11,226 Real estate and other commingled funds Investments measured at net asset value (h) 817 561 411 Securities lending payables, net of dividends and interest receivable (g) (332) (358) 87 Total U.S. plan assets $ 11,104 $ 10,772 $ 11,724 International plan assets Equity securities (c) 1 $ 1,215 $ 1,172 $ 1,175 Government securities (d) 2 987 932 1,207 Corporate bonds (d) 2 610 469 267 Fixed income commingled funds (i) 1 616 557 526 Contracts with insurance companies (e) 3 — 29 30 Cash and cash equivalents 1 85 128 143 Sub-total international plan assets 3,513 3,287 3,348 Real estate commingled funds Investments measured at net asset value (h) 122 79 162 Dividends and interest receivable 17 31 18 Total international plan assets $ 3,652 $ 3,397 $ 3,528

Debt and credit issues, currency controls or fluctuations fluctuations, sanctions and export controls in certain of these international markets (including restrictions on the transfer of funds to and from certain markets), as well as the threat or imposition of new, expanded or retaliatory tariffs (including recent U.S. tariffs imposed or threatened to be imposed on China, Canada and Mexico and other countries and any retaliatory actions taken by such countries), sanctions or export controls markets) have also continued to impact our operations in certain of these international markets.

These included ongoing supply chain disruptions, disruptions; tariffs; persistent inflationary pressures, pressures; evolving consumer preferences consumption patterns and behaviors, preferences; an intensely competitive business environment, including the increased adoption of artificial intelligence technologies; the continued expansion of e-commerce in a rapidly changing retail landscape, including customers moving away from DSD systems; the need for further innovation and collaboration as we progress toward our ambitious packaging and other goals; ongoing macroeconomic and political volatility, volatility; and an increasingly complex regulatory environment.

In 2023, macroeconomic conditions, including higher interest rates, inflationary costs, and the second quarter of 2022, macroeconomic factors, sanctions ongoing conflict in the Middle East, and other regulations as a result of the Russia-Ukraine conflict recent business performance 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 various markets,

An increase in the probability that certain market-based conditions will be met or a decrease in the discount rate net revenue and margin forecasts would result in a higher fair value measurement, while a decrease in the probability that certain market-based conditions will be met or an increase in the discount rate net revenue and margin forecasts would result in a lower fair value measurement.

Operating profit decreased 11%, primarily driven These impacts were partially offset by certain operating cost increases, the decline in organic volume, a 9-percentage-point favorable impact of higher prior-year impairment and other charges associated with our TBG investment and Juice Transaction-related receivables, a 7-percentage-point impact of higher restructuring charges the effective net pricing, productivity savings, and higher lower advertising and marketing expenses.

As the legislation becomes effective in countries in which we do business, our taxes could will increase and negatively impact our provision for income taxes.

We recognized impairment charges taken primarily as a result of our quantitative assessments of certain of our indefinite-lived intangible assets and related to our investment in TBG.

The fair value of our indefinite-lived intangible assets was estimated using discounted cash flows under the income approach, which we consider to be a Level 3 (significant unobservable inputs) measurement.

As the legislation becomes effective in countries in which we do business, our taxes could will increase and negatively impact our provision for income taxes.

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