PepsiCo Reports Second-Quarter 2019 Results; Reaffirms ...

PepsiCo Reports Second-Quarter 2019 Results; Reaffirms 2019 Financial Targets

Reported (GAAP) Second-Quarter and Year-to-Date 2019 Results

Net revenue growth Foreign exchange impact on net revenue Earnings per share (EPS) EPS growth Foreign exchange impact on EPS

Second Quarter 2.2% (3)% $1.44 13% (2)%

Year-to-Date 2.4% (3)% $2.44 10% (2)%

Organic/Core (non-GAAP)1 Second-Quarter and Year-to-Date 2019 Results

Organic revenue growth Core EPS Core constant currency EPS change

Second Quarter 4.5% $1.54 (2)%

Year-to-Date 4.8% $2.52 --%

PURCHASE, N.Y. - July 9, 2019 - PepsiCo, Inc. (NASDAQ: PEP) today reported results for the second quarter 2019.

"We are pleased with our results for the second quarter," said Chairman and CEO Ramon Laguarta. "While adverse foreign exchange translation negatively impacted our reported net revenue performance, our organic revenue growth was 4.5% in the quarter."

Laguarta continued, "We are also pleased with the progress on our priorities to make PepsiCo a faster, stronger and better company by building new capabilities, strengthening our brands, adding capacity to grow and transforming our culture. Our performance for the first half and the progress we are making on our strategic priorities give us increased confidence in achieving the 2019 financial targets we communicated earlier this year."

1 Please refer to the Glossary for definitions of non-GAAP financial measures, including "Organic," "Core" and "Constant Currency," and to "2019 Guidance and Outlook" for additional information regarding PepsiCo's full-year 2019 financial targets. PepsiCo provides guidance on a non-GAAP basis as we cannot predict certain elements which are included in GAAP results, including the impact of foreign exchange and mark-to-market adjustments. Please refer to PepsiCo's Form 10-Q filed with the SEC on July 9, 2019 for additional information regarding PepsiCo's financial results for the 12 and 24 weeks ended June 15, 2019.

1

Summary Second-Quarter 2019 Performance

FLNA QFNA PBNA LatAm ESSA AMENA Total

GAAP Reported % Change

4.5 2.5 2.5 2 0.5 (1) 2

Revenue

Percentage Point Impact

Foreign Exchange Translation

Acquisitions, Divestitures,

and Other Structural Changes

--

--

0.5

--

--

(0.5)

7

--

9

(4.5)

4

2

3

(1)

Organic % Change

5 3 2 10 5 5 4.5

Volume

Organic Volume % Change

Food/Snacks -- --

4 2 6 2

Beverages

(2) 5 1 1 --

Operating Profit and EPS

FLNA QFNA PBNA LatAm ESSA AMENA Corporate Unallocated Expenses Total

GAAP Reported % Change 4 (12) (8) 4 (16) (34) 15 (10)

Percentage Point Impact

Items Affecting Comparability

Foreign Exchange Translation

--

--

--

--

--

--

6

3

16

9

8

2

(10)

--

5

2

Core Constant Currency % Change 4.5 (13) (7) 13 9 (24) 5 (2.5)

EPS

13

(18)

2

(2)

Note: Rows 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," "Core" and "Constant Currency."

2

Summary Year-to-Date 2019 Performance

FLNA QFNA PBNA LatAm ESSA AMENA Total

GAAP Reported % Change

5

1

2

2

1

(1)

2

Revenue

Percentage Point Impact

Foreign Exchange Translation

Acquisitions, Divestitures,

and Other Structural Changes

--

--

0.5

(0.5)

--

--

8

--

10

(5)

4.5

3

3

(1)

Organic % Change

5 0.5 2 10 6 7 5

Volume

Organic Volume % Change

Food/Snacks 1

(0.5)

2 1 5 2

Beverages

(2) 6 3 1 1

Operating Profit and EPS

FLNA QFNA PBNA LatAm ESSA AMENA Corporate Unallocated Expenses Total

GAAP Reported % Change 7 (12) (5) 11 (12) (23) (1) (2)

Percentage Point Impact

Items Affecting Comparability

Foreign Exchange Translation

--

--

--

--

0.5

--

2

4

16

10

7

3

9

--

2

2

Core Constant Currency % Change 7 (12) (4) 16 14 (13) 8 2

EPS

10

(13)

2

--

Note: Rows 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," "Core" and "Constant Currency."

3

2019 Guidance and Outlook

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

Consistent with its previous guidance for 2019, the Company continues to expect: ? Full-year organic revenue growth to be 4 percent. ? A core effective tax rate of approximately 21 percent. ? A decline in core constant currency EPS of approximately 1 percent, which incorporates lapping a number of 2018 strategic asset-sale and refranchising gains, the expected increased core effective tax rate, and expected 2019 incremental investments to strengthen the business. ? Approximately $9 billion in cash from operating activities and free cash flow of approximately $5 billion, which assumes net capital spending of approximately $4.5 billion. ? Total cash returns to shareholders of approximately $8 billion, comprised of dividends of approximately $5 billion and share repurchases of approximately $3 billion.

Applying current market consensus rates implies a 2-percentage-point foreign exchange translation headwind to both reported net revenue and EPS performance. This assumption and the guidance above implies 2019 core earnings per share of $5.50, a 3 percent decrease compared to 2018 core earnings per share of $5.66.

Conference Call: At 7:45 a.m. (Eastern Time) today, the Company will host a conference call with investors and financial analysts to discuss second quarter 2019 results and the outlook for 2019. Further details will be accessible on the Company's website at investors.

Contacts:

Investors Jamie Caulfield Investor Relations 914-253-3035 jamie.caulfield@

Media Carrie Ratner Communications 914-253-3817 carrie.ratner@

4

PepsiCo, Inc. and Subsidiaries Condensed Consolidated Statement of Income (in millions except per share amounts, unaudited)

Net Revenue Cost of sales Gross profit Selling, general and administrative expenses Operating Profit Other pension and retiree medical benefits income Interest expense Interest income 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

12 Weeks Ended

24 Weeks Ended

6/15/2019

6/16/2018

6/15/2019

6/16/2018

$ 16,449 $ 16,090 $ 29,333 $ 28,652

7,404

7,263

13,092

12,918

9,045

8,827

16,241

15,734

6,316

5,799

11,504

10,899

2,729

3,028

4,737

4,835

61

82

125

157

(261)

(308)

(528)

(602)

38

98

101

167

2,567

2,900

4,435

4,557

524

1,070

970

1,374

2,043

1,830

3,465

3,183

8

10

17

20

$

2,035 $

1,820 $ 3,448 $ 3,163

$

1.44 $

1.28 $

2.44 $

2.21

1,409

1,426

1,411

1,428

A - 1

PepsiCo, Inc. and Subsidiaries Supplemental Financial Information

(in millions and unaudited)

Net Revenue Frito-Lay North America Quaker Foods North America PepsiCo Beverages North America Latin America Europe Sub-Saharan Africa Asia, Middle East and North Africa Total

12 Weeks Ended

6/15/2019

6/16/2018

24 Weeks Ended

6/15/2019

6/16/2018

$

4,010 $

3,837 $

7,825 $

7,454

540

527

1,134

1,128

5,322

5,193

9,832

9,608

1,886

1,843

3,127

3,067

3,133

3,116

4,826

4,784

1,558

1,574

2,589

2,611

$

16,449 $

16,090 $

29,333 $

28,652

Operating Profit (a) Frito-Lay North America Quaker Foods North America PepsiCo Beverages North America Latin America Europe Sub-Saharan Africa Asia, Middle East and North Africa Corporate Unallocated Expenses Total

$

1,249 $

1,200 $

2,408 $

2,250

127

145

265

300

690

747

1,079

1,135

278

269

508

458

366

438

491

556

325

496

526

683

(306)

(267)

(540)

(547)

$

2,729 $

3,028 $

4,737 $

4,835

(a) For a discussion of reported operating profit performance, please refer to PepsiCo's Quarterly Report on Form 10-Q for the 12 and 24 weeks ended June 15, 2019 (Q2 2019 Form 10-Q), filed with the U.S. Securities and Exchange Commission on July 9, 2019.

A - 2

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