PepsiCo’s operating cash flow turned negative in Q1 2024 due to several factors. **Unfavorable working capital comparisons** were a major contributor, with a significant increase in accounts payable and other current liabilities reducing cash flow considerably. Additionally, **product recall-related costs**—which included both a direct cost impact and corresponding cash payments—and **higher pension contributions** further eroded operating cash flow. Changes in other assets and liabilities, such as **less favorable movements in inventories and prepaid expenses**, also played a role in the decline.  **[0000077476-24-000017_pep-20240323.htm:2]** 

Why did Operating Cash Flow turn negative in Q1 2024?

The documents do not provide a specific reason for the drop in long-term debt issuance proceeds in Q2 2024. However, it appears that the decrease may be linked to **PepsiCo’s overall financing strategy**, which involves balancing debt issuances with repayments, dividend payments, and share repurchases, as well as maintaining financial flexibility and accessing capital markets at favorable rates.  **[0000077476-24-000043_q220248-kxexhibit991.htm:4]** **[0000077476-24-000042_pep-20240615.htm:2]** **[0000077476-24-000042_pep-20240615.htm:39]** **[0000077476-24-000017_pep-20240323.htm:31]** 

What caused the drastic drop in long-term debt issuance proceeds in Q2 2024?

In Q1 2024, **Prepaid Expenses and Other Current Assets** showed a large negative change of **$342 million**; however, the documents do not provide any specific reasons for this decline.  **[0000077476-24-000017_pep-20240323.htm:2]** **[0000077476-24-000019_q120248-kxexhibit991.htm:3]** 

Why did Prepaid Expenses and Other Current Assets show a large negative change in Q1 2024?

The documents indicate that the significant increase in the negative change for Accounts Payable in Q1 2024 was not attributed to one specific factor. Rather, they suggest that typical reasons might include **timing of payments** and **variations in production and capital expenditure payables across PepsiCo's divisions**. However, the documents do not provide further explicit details on the primary drivers of this change.  **[0000077476-24-000017_pep-20240323.htm:2]** **[0000077476-24-000019_q120248-kxexhibit991.htm:3]** **[0000077476-24-000042_pep-20240615.htm:40]** **[0000077476-24-000017_pep-20240323.htm:32]** 

What drove the significant increase in the negative change for Accounts Payable in Q1 2024?

361794b23f45e4c2c46413b9a88842fa0dd189f80ce47a7a60528026c1819817

The reported figures indicate that the impairment of intangible assets actually declined sharply from **$927 million** in FY 2023 to **$33 million** in FY 2024. In FY 2023, the higher impairment was driven by significant pre-tax charges related to the **SodaStream brand and goodwill** in the Europe division, compounded by macroeconomic challenges such as **higher interest rates, inflationary costs, and economic uncertainty** which adversely affected asset fair values.  **[0000077476-25-000008_q420248-kxexhibit991.htm:5]** **[0000077476-25-000007_pep-20241228.htm:93]**  In contrast, FY 2024’s much lower impairment of **$33 million** was primarily associated with a **nutrition bar brand** in the Quaker Foods North America division, with no similar material impairments recorded for goodwill or other major brands.  **[0000077476-25-000007_pep-20241228.htm:85]** **[0000077476-25-000007_pep-20241228.htm:93]** 

What caused the sharp jump in impairment of intangible assets in FY 2024?

The significant rise in **Q4 2024 operating profit** was driven by a combination of factors. **Items affecting comparability** played a major role, including a larger positive impact from **restructuring and impairment charges** (an increase from **$158 million** in Q4 2023 to **$305 million** in Q4 2024) and a reduction in the negative effect from **impairment and other charges** (from **$1,128 million** in Q4 2023 to **$704 million** in Q4 2024). Additionally, an **indirect tax impact** contributed **$218 million** in Q4 2024, which was not present in Q4 2023. Other contributing factors included division-specific influences—such as the notable improvement in **Quaker Foods North America**—and a reduction in negative **corporate unallocated expenses** (from **$(1,044) million** in Q4 2023 to **$(756) million** in Q4 2024). These elements, together, resulted in the operating profit increasing by **$567 million** in Q4 2024.  **[0000077476-25-000008_q420248-kxexhibit991.htm:15]** **[0000077476-25-000008_q420248-kxexhibit991.htm:13]** **[0000077476-25-000008_q420248-kxexhibit991.htm:1]** 

What drove the significant rise in Operating Profit in Q4 2024?

In Q3 2024, net income was lower due to several factors. **Operating profit declined from about $4,015 million in Q3 2023 to approximately $3,872 million in Q3 2024**, reflecting weaker category performance in North America and disruptions from geopolitical tensions.  **[0000077476-24-000054_q320248-kxexhibit991.htm:0]** **[0000077476-24-000054_q320248-kxexhibit991.htm:3]**  Additionally, **product recalls at Quaker Foods North America** and a **negative foreign exchange impact** further contributed to the decline, despite strong cost management efforts that were offset by incremental investments to boost marketplace competitiveness.  **[0000077476-24-000054_q320248-kxexhibit991.htm:0]** **[0000077476-24-000054_q320248-kxexhibit991.htm:3]** 

Why was net income lower in Q3 2024?

d98bc0256ad64d1ed682e0125685b11fcc5963ba11a5868d95f7a78c55202bc9

The significant drop in **Cash and cash equivalents** in Q2 2024 can be attributed to several factors. The documents note that the cash balance decreased from **$9,711 million (as of December 30, 2023)** to **$6,353 million (as of June 15, 2024)**. This drop appears related to an **increase in short-term debt obligations** by **$1,779 million** (rising from **$6,510 million** to **$8,289 million**) and a **decrease in accounts payable and other current liabilities** by **$2,278 million** (falling from **$25,137 million** to **$22,859 million**).  **[0000077476-24-000043_q220248-kxexhibit991.htm:5]** **[0000077476-24-000042_pep-20240615.htm:3]** **[0000077476-24-000042_pep-20240615.htm:40]**  Additionally, while not detailed explicitly, there may have been capital expenditures or other investments influencing the change.

Why did Cash and cash equivalents drop so significantly in Q2 2024?

The documents do not explicitly state the precise reasons for the surge. However, the significant increase from **$292 million** in December 2023 to **$743 million** in Q3 2024 is generally associated with changes in **cash management strategies**, such as reallocating funds among cash, cash equivalents, and short-term investments to optimize liquidity and returns.  **[0000077476-24-000054_q320248-kxexhibit991.htm:5]** **[0000077476-24-000052_pep-20240907.htm:3]** 

What drove the surge in Short-term investments in Q3 2024?

The documents do not provide any specific reasons for the decline in short-term debt obligations in Q3 2024. One document indicates that the **$6,524 million** in Q3 2024 represents only a minor change compared to **$6,510 million** at the end of FY 2023, and no factors are detailed regarding a significant decline when compared to the prior quarter’s **$8,289 million** figure.  **[0000077476-24-000054_q320248-kxexhibit991.htm:5]** **[0000077476-24-000052_pep-20240907.htm:3]** 

What caused the decline in Short-term debt obligations in Q3 2024?

The **Total Assets** decreased in FY 2024 primarily due to reductions in several asset categories. **Cash and cash equivalents** declined by **$1,206 million** (from **$9,711 million** to **$8,505 million**), largely driven by significant cash outflows for financing activities such as dividends and share repurchases. Additionally, **investments in noncontrolled affiliates** dropped by **$729 million** (from **$2,714 million** to **$1,985 million**), suggesting possible divestitures or valuation adjustments, while **goodwill** experienced a decrease of **$194 million**. Other areas including indefinite-lived intangible assets and deferred income taxes saw minor declines, which, although partially offset by increased short-term investments, contributed to the overall decrease of **$1,028 million** in total assets.  **[0000077476-25-000008_q420248-kxexhibit991.htm:7]** **[0000077476-25-000007_pep-20241228.htm:78]** **[0000077476-25-000008_q420248-kxexhibit991.htm:6]** 

Why did Total Assets decrease in FY 2024 compared to FY 2023?

c74db0d52586667359338c539b209faaa06c219cc29280ee817c45f3ad909a7f

1f56a781decf92163710b1b5db8848a2fb6e93f095cd26fb28d5eb411c3464d7

Cash and cash equivalents (USD, millions)

Short-term investments (USD, millions)

Accounts and notes receivable, net (USD, millions)

Raw materials and packaging (USD, millions)

Work-in-process (USD, millions)

Finished goods (USD, millions)

Prepaid expenses and other current assets (USD, millions)

Total Current Assets (USD, millions)

Property, Plant and Equipment, net (USD, millions)

Amortizable Intangible Assets, net (USD, millions)

Goodwill (USD, millions)

Other Indefinite-Lived Intangible Assets (USD, millions)

Investments in Noncontrolled Affiliates (USD, millions)

Deferred Income Taxes (USD, millions)

Other Assets (USD, millions)

Total Assets (USD, millions)

Short-term debt obligations (USD, millions)

Accounts payable and other current liabilities (USD, millions)

Total Current Liabilities (USD, millions)

Long-Term Debt Obligations (USD, millions)

Other Liabilities (USD, millions)

Total Liabilities (USD, millions)

Common stock, par value 1 2 / 3 ¢ per share (USD, millions)

Capital in excess of par value (USD, millions)

Retained earnings (USD, millions)

Accumulated other comprehensive loss (USD, millions)

Repurchased common stock, in excess of par value (USD, millions)

Total PepsiCo Common Shareholders’ Equity (USD, millions)

Noncontrolling interests (USD, millions)

Total Equity (USD, millions)

Total Liabilities and Equity (USD, millions)

a11a5ce9b07be4d64a101a7719786a660d8626f3c76498529ed78ab288ccb762

Cost of sales (USD, millions)

Gross profit (USD, millions)

Selling, general and administrative expenses (USD, millions)

Operating Profit (USD, millions)

Other pension and retiree medical benefits (expense)/income (USD, millions)

Provision for income taxes (USD, millions)

Net Income Attributable to PepsiCo (USD, millions)

092cc688f84cc1677612707e505e68549e0f8dd2a261b4789e0e8daf095619b6

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from / Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

Net Change in Cash [USD, Millions]

07ea146e0a24be2c9340814869080455eb6b8939f9eb1bada891b785218c4af4

cd2ad1ce557fc8d4de49013a5073bc388ed54fa285a653022d31363d3c32dcca

Total Revenue [USD, Millions]

Cost of Goods Sold (COGS) [USD, Millions]

Selling, General, and Administrative Expenses (SG&A) [USD, Millions]

Research and Development (R&D) [USD, Millions]

Depreciation and Amortization (D&A) [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

Earnings Per Share (EPS) - Basic [USD]

Earnings Per Share (EPS) - Diluted [USD]

b761823d470eed303c22e2f2f6108428c89475f11959721942d4824d9e63217b

15d2729eef52452c51e424c0fc89c9e6f448b61c2f5e16b3bd9df846fa369929

5f5f3e020f7731d9cc80f93111b6ad834a7176e92a1eb59b014b8edc29d7dc99

04ded25f286fa3b018cdc7211d520261053dc02c0dc059663545257e12e4ed2b

PEPSICO (PEP)

Financials