PepsiCo Reports Fourth Quarter and Full Year 2012 Results

Thu Feb 14, 2013 7:01am EST

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-- Fourth quarter core(1) EPS $1.09 and reported EPS $1.06
PURCHASE, N.Y.,  Feb. 14, 2013  /PRNewswire/ -- PepsiCo, Inc. (NYSE: PEP) today
reported core earnings per share of  $1.09  for the fourth quarter of 2012 and 
$4.10  for the full year, on organic revenue growth of 5 percent for both the
quarter and the full year.

"In 2012, we delivered 5 percent organic revenue growth, reflecting PepsiCo's
many strengths: we're well positioned in attractive and highly complementary
growth categories, our portfolio is diversified with products that have broad
appeal and a global footprint that is balanced, and we have an enviable
portfolio of iconic brands," said Chairman and CEO  Indra Nooyi.

"We also took a number of significant steps in 2012 that will even better
position our business for sustainable, long-term growth; we increased our brand
investment, stepped up our innovation, improved our marketplace execution and
embarked on an aggressive productivity program that will contribute to our
profitability and act as a funding source of future investment.

"Our recent brand-building initiatives and innovation across the portfolio,
including Quaker Real Medleys, Gatorade Energy Chews, Pepsi Next and Doritos
Locos Tacos, are translating into success in the marketplace."  

"Just as importantly, we remain highly focused on generating attractive returns
for our shareholders.  We returned  $6.5 billion  to shareholders in 2012
through a combination of share repurchases and dividends, and today announced an
increase in our quarterly dividend that will take effect in June.  

"We're encouraged by the progress we're making and expect performance in the
coming year to be consistent with our long-term targets."   

(1) Please refer to the Glossary for the definitions of Non-GAAP financial
measures including core, constant currency, organic and management operating
cash flow.  




Operating and Marketplace Highlights

* Achieved 5 percent organic revenue growth in the quarter and for the full year
with a good balance between volume growth(2) and price realization.  
* PepsiCo Americas Foods organic revenue grew 8 percent in the quarter driven by
organic revenue gains in all divisions, including  Frito-Lay North America,
Quaker Foods North America and Latin America Foods. Reported net revenue
increased 3.5 percent in the quarter, with declines at FLNA and QFNA due to the
impact of an extra reporting week in the fourth quarter of 2011.  
* Frito-Lay North America  and PepsiCo Americas Beverages market share trends in
the U.S. improved sequentially in the fourth quarter reflecting disciplined
execution and significant investments in advertising and marketing.  
* AMEA organic revenue grew 8 percent in the quarter driven by low-double-digit
organic volume growth in snacks and mid-single-digit organic volume growth in
beverages. Reported net revenue in AMEA declined 13 percent in the fourth
quarter, reflecting the impact of structural changes.  
* On an organic basis, emerging and developing market revenue grew 9 percent in
the quarter. On a reported basis, emerging and developing market net revenue was
even with the prior year quarter, primarily due to beverage refranchisings in 
China  and Mexico.      
* Substantially increased advertising and marketing expense by 50 basis points
to 5.7 percent of net revenue during 2012, supporting the company's long-term
brand-building initiatives.  
* Delivered more than  $1 billion  of productivity savings during 2012 through
disciplined cost management programs. The company remains on track to deliver 
$3 billion  in productivity savings by 2015.  
* Management operating cash flow (excluding certain items) was  $7.4 billion  in
2012. Cash flow from operations was  $8.5 billion.  
* Delivered a 20 percent reduction in net capital spending to 4.0 percent of
2012 net revenue.  
* Returned  $6.5 billion  to shareholders in 2012 through  $3.2 billion  in
share repurchases and  $3.3 billion  in dividends.

(2) All 2012 volume growth measures reflect an adjustment to the base year
(2011) for divestitures that occurred in 2012 and 2011, and exclude the impact
of an extra reporting week in 2011.

Summary of Fourth Quarter Financial Performance

* Organic revenue grew 5 percent and reported net revenue declined 1 percent.
Organic revenue growth was driven by balanced volume growth and effective net
pricing. Structural changes, primarily refranchisings in  China  and  Mexico,
negatively impacted reported net revenue performance by 3 percentage points. An
extra reporting week in the prior year quarter negatively impacted reported net
revenue performance by 3 percentage points and foreign exchange translation had
less than a 1 percent unfavorable impact in the quarter.   
* Core constant currency operating profit declined 7 percent reflecting the
impact of increased commodity costs, increased advertising and marketing
expense, higher pension expense, lapping gains related to certain divestitures
and asset disposals in the fourth quarter of 2011, partially offset by
productivity initiatives. Reported operating profit declined 1.5 percent and
included the impacts of a lump sum pension settlement charge in the current year
and an extra reporting week in 2011, partially offset by lower restructuring and
certain impairment charges and merger and integration charges in the current
year.   
* The company's core effective tax rate was 26.7 percent, below the prior year
quarter primarily due to an adjustment to deferred tax liabilities. The
company's reported effective tax rate was 15.4 percent reflecting the benefit of
a tax court decision.   
* Core EPS was  $1.09  and reported EPS was  $1.06. Core EPS excludes a  $0.14 
per share tax benefit related to a tax court decision, an  $0.08  per share
charge related to a pension lump sum settlement, a  $0.06  per share impact of
certain restructuring, impairment and integration charges, and a  $0.02  per
share impact from mark-to-market net losses on commodity hedges. Mark-to-market
gains and losses on commodity hedges are subsequently reflected in core division
results when the divisions take delivery of the underlying commodity.

Summary Fourth Quarter 2012 Performance (Percent Growth)

                    Reported  Core Constant    Organicb  
                              
Currencya                 
 Volumec                                                 
 Snacks                                        4.5       
 Beverages                                     2         
 Net Revenue        (1)                        5         
 Operating Profitd  (1.5)     (7)                        
 EPS                19        (5)                        


                  Volumec   Net       Operating        Organic   Core          
                            
Revenue  
Profitd         Revenue   
Constant     
                                                                 
Currency     
                                                                 
Operating    
                                                                 
Profit       
 PAF              6e        3.5       2                8         (2)           
 FLNA             5         (1)       3.5              5         3             
 LAF              8e        13        8                13        (4.5)         
 QFNA             6         (0.5)     (17)             5         (18)          
                                                                               
 PAB              -         (4)       (1)              2.5       (8)           
 Europe           1/(1)f    1         38               3.5       (10)          
 AMEA             12/13f,g  (13)      (25)             8         (20)          
 Total Divisions  6/4f      (1)       2.5              5         (5)           
 Total PepsiCo              (1)       (1.5)            5         (7)           
                                                                              


a Core constant currency results are non-GAAP financial measures that exclude
certain items affecting comparability. For more information about our core
constant currency results, see "Reconciliation of GAAP and Non-GAAP Information"
in the attached exhibits. Please refer to the Glossary for definitions of "Core"
and "Constant currency".

b Organic results are non-GAAP financial measures that adjust for impacts of
acquisitions, divestitures and other structural changes, foreign exchange
translation and a 53rd  week in the fourth quarter of 2011. Please refer to the
Glossary for additional information regarding organic results.

c Volume growth measures adjusted to exclude the impact of a 53rd  week in the
fourth quarter of the base year (2011).

d The reported operating profit performance was impacted by certain items
excluded from our core results in both 2012 and 2011. See "Reconciliation of
GAAP and Non-GAAP Information" in the attached exhibits for more information
about these items. Please refer to the Glossary for the definition of "Core".

e PAF and LAF volumes include 2 percentage points and 4 percentage points of
benefit, respectively, related to acquisitions.

f Snacks/Beverages.   

g AMEA beverage volume includes an estimated benefit of 6 percentage points
relating to co-branded juice drinks in  China, after adjustment to include
co-branded juice drink volume in  China  for the fourth quarter of the base year
(2011).






Summary Full Year 2012 Performance (Percent Growth)

                                Reported  Core Constant  Organicb  
                                          
 Currencya              
 Volumec                                                           
 Snacks                                                  3         
 Beverages                                               1         
 Net Revenue                    (1.5)                    5         
 Operating Profitd              (5)       (5)                      
 EPS                            (3)       (5)                      
                                                                


                                                                                
                  Volumec   Net       Operating        Organic   Core          
                            
Revenue  
Profitd         Revenue   
Constant     
                                                                 
Currency     
                                                                 
Operating    
                                                                 
Profit       
 PAF              5e        4         (2)              7         -             
 FLNA             1         2         1                4         2             
 LAF              13e       9         (2)              14        4             
 QFNA             1         (1)       (13)             1         (12)          
                                                                               
 PAB              (1)       (4.5)     (10)             1.5       (11)          
 Europe           3/1f,g    (1)       10               4         3             
 AMEA             14/10f,h  (10)      (16)             10        4             
 Total Divisions  6/2.5 f   (1.5)     (4)              5         (3)           
 Total PepsiCo              (1.5)     (5)              5         (5)           
                                                                              


a Core constant currency results are non-GAAP financial measures that exclude
certain items affecting comparability. For more information about our core
constant currency results, see "Reconciliation of GAAP and Non-GAAP Information"
in the attached exhibits. Please refer to the Glossary for definitions of "Core"
and "Constant currency".

b Organic results are non-GAAP financial measures that adjust for impacts of
acquisitions, divestitures and other structural changes, foreign exchange
translation and a 53rd  week in 2011. Please refer to the Glossary for
additional information regarding organic results.

cVolume growth measures adjusted to exclude the impact of a 53rd  week in the
fourth quarter of the base year (2011).

d The reported operating profit performance was impacted by certain items
excluded from our core results in both 2012 and 2011. See "Reconciliation of
GAAP and Non-GAAP Information" in the attached exhibits for more information
about these items. Please refer to the Glossary for the definition of "Core".

e PAF and LAF volumes include 3 and 9 percentage points of benefit,
respectively, related to acquisitions.

f Snacks/Beverages.   

g Europe  snacks and beverage volumes include 2 percentage points and 1
percentage point of benefit, respectively, related to acquisitions.

h AMEA beverage volume includes an estimated benefit of 4 percentage points
relating to co-branded juice drinks in  China, after adjustment to include
co-branded juice drink volume in  China  for the fourth quarter of the base year
(2011).




Division Operating Summaries



PepsiCo Americas Foods (PAF)

Organic revenue grew 8 percent in the quarter driven by 5 percentage points of
organic volume growth and 3 percentage points of effective net pricing. Reported
net revenue increased 3.5 percent reflecting a 4-percentage-point negative
impact from the extra reporting week in 2011, and a less than 1-percentage-point
unfavorable impact from foreign exchange translation. Core constant currency
operating profit declined 2 percent, reflecting higher commodity costs and
increased advertising and marketing investments across all PAF divisions,
partially offset by productivity initiatives and effective net pricing.  

For the full year, organic revenue grew 7 percent driven by 2 percentage points
of organic volume growth and 5 percentage points of effective net pricing.
Reported net revenue grew 4 percent reflecting a 1-percentage-point negative
impact from the extra reporting week in 2011, and a 2-percentage-point
unfavorable impact from foreign exchange translation. Core constant currency
operating profit was even with the prior year, reflecting revenue gains and
productivity initiatives, offset by higher commodity costs and increased
advertising and marketing investments across all PAF divisions.



Frito-Lay North America  (FLNA)

Organic revenue increased 5 percent in the quarter, reflecting a
5-percentage-point increase in organic volume and even effective net pricing.
Reported revenue declined 1 percent reflecting the impact from the extra
reporting week in the prior year quarter. For the full year, organic revenue
grew 4 percent, reflecting a 1-percentage-point contribution from organic volume
and 3 percentage points of effective net pricing. Full year reported revenue
grew 2 percent, including 2 percentage points of negative impact from the extra
reporting week in 2011.  

Core constant currency operating profit grew 3 percent in the quarter, and 2
percent for the full year. These results reflect organic revenue gains and
productivity initiatives, partially offset by higher commodity costs and a
significant increase in advertising and marketing investments.

Latin America Foods (LAF)

Organic revenue grew 13 percent in the quarter, reflecting 3 percentage points
of organic volume growth and 10 percentage points of effective net pricing.
Reported net revenue also grew 13 percent in the quarter, with a
1-percentage-point benefit from acquisitions and divestitures offset by a
1-percentage-point unfavorable foreign exchange translation impact.    

Full-year organic revenue grew 14 percent, reflecting 4 percentage points of
organic volume growth and 10 percentage points of effective net pricing.
Reported net revenue increased 9 percent and included a 2-percentage-point
benefit from acquisitions and divestitures and a 7-percentage-point unfavorable
impact from foreign exchange translation.

Core constant currency operating profit declined 4.5 percent in the quarter and
rose 4 percent for the full year. These results reflect revenue growth and
productivity gains offset by increased advertising and marketing expense and
commodity cost inflation in both periods as well as lapping a gain from the sale
of a fish business in  Brazil  in the fourth quarter of 2011.



Quaker Foods North America (QFNA)

Organic revenue grew 5 percent in the quarter and 1 percent for the full year
driven primarily by organic volume gains. Reported net revenue declined 0.5
percent in the quarter and 1 percent for the full year, reflecting the impact
from the extra reporting week in 2011.  

Core constant currency operating profit declined 18 percent for the quarter and
declined 12 percent for the full year. This was driven principally by higher
commodity costs and increased advertising and marketing expense in the quarter
and the full year, and by lapping gains from a divestiture and an asset sale in
the fourth quarter of 2011.   



PepsiCo Americas Beverages (PAB)

Organic revenue grew 2.5 percent in the quarter reflecting organic volume that
was even with the prior year and 2.5 percentage points of effective net pricing.
Non-carbonated beverages volume grew low-single-digits led by mid-single-digit
volume growth at Gatorade, and CSD volume declined approximately 1 percent in
the quarter.   

For the full year, organic revenue grew 1.5 percent reflecting a
1-percentage-point organic volume decline, 3 percentage points of effective net
pricing, and the impact of concentrate shipment timing.   

Reported net revenue declines included the impacts of refranchising the
division's Mexican bottling operation in 2011, which had a negative
2-percentage-point impact for the quarter and a negative 5-percentage-point
impact for the full year, and of the extra reporting week in 2011, which had a
negative 5-percentage-point impact for the quarter, and a negative
1-percentage-point impact for the year.  

Core constant currency operating profit declined 8 percent in the quarter and 11
percent for the full year, primarily reflecting increased commodity costs and
higher advertising and marketing expense, partially offset by favorable
effective net pricing and productivity initiatives. Operating profit comparisons
were also impacted by a gain associated with the refranchising of the division's
 Mexico  bottling operation in the fourth quarter of 2011.

Europe

Organic revenue grew 3.5 percent in the quarter and 4 percent for the full year.
This reflected even organic volume and 3 percentage points of effective net
pricing in the quarter and even organic volume performance on 4 percentage
points of effective net pricing for the full year. Continued healthy volume
growth in  Russia  and parts of  Eastern Europe  partially offset softer trends
in  Western Europe  for the quarter and the full year.   

Reported net revenue grew 1 percent in the quarter, including a
1-percentage-point unfavorable impact from foreign exchange translation, and a
1-percentage-point negative impact from the extra reporting week in 2011.
Reported net revenue declined 1 percent for the full year, including a
7-percentage-point unfavorable impact from foreign exchange translation.  

Core constant currency operating profit declined 10 percent in the quarter and
grew 3 percent for the full year, reflecting significantly higher marketing
investments and commodity cost inflation partially offset by productivity
savings.   

Asia,  Middle East  &  Africa  (AMEA)

Organic revenue grew 8 percent in the quarter, led by low double-digit organic
volume growth in snacks and mid-single-digit organic volume growth in beverages.
 Reported net revenue declined 13 percent reflecting a 19-percentage-point
negative impact from structural changes, principally the refranchising of
bottling operations in  China  and an unfavorable 1-percentage-point impact from
foreign exchange translation.  

For the full year, organic revenue grew 10 percent led by double-digit organic
volume growth in snacks and mid-single-digit organic volume growth in beverages.
Including structural changes and foreign exchange translation, reported net
revenue declined 10 percent reflecting a 17-percentage-point negative impact
from structural changes, principally the refranchising of bottling operations in
 China, and an unfavorable 3-percentage-point impact from foreign exchange
translation.  

Core constant currency operating profit declined 20 percent for the fourth
quarter and was up 4 percent for the full year. These results include the impact
of lapping a gain on divestiture associated with the sale of the division's
minority interest in its franchise bottler in  Thailand  in the fourth quarter
of 2011.



2013 Outlook

For 2013, the company expects 7 percent core constant currency EPS growth versus
its fiscal 2012 core EPS of  $4.10. Based on the current foreign exchange market
consensus, the company expects that foreign exchange translation will have an
unfavorable impact of up to 1 point on the company's full-year core EPS
performance in 2013. Excluding the impact of structural changes and foreign
exchange translation, organic revenue is expected to grow mid-single-digits,
consistent with the company's long-term targets. The impact of structural
changes, principally beverage refranchisings, are expected to reduce organic
revenue growth by approximately 1 percentage point for the full year.   

For 2013, the company expects low-single-digit commodity inflation, and
productivity savings of approximately  $900 million. The company also expects
advertising and marketing expense to increase at or above the rate of net
revenue growth. Below the operating line, the company expects higher interest
expense driven by increased debt balances and a core effective tax rate of
approximately 27 percent.

The company is targeting over  $9 billion  in cash flow from operating
activities and more than  $7 billion  in management operating cash flow
(excluding certain items) in 2013.  Net capital spending is expected to be
approximately  $3 billion  in 2013, within the company's long-term capital
spending target of less than 5 percent of net revenue.

Reflecting its commitment to return capital to shareholders, the company
announced a new share repurchase program providing for the repurchase of up to 
$10 billion  of PepsiCo common stock from  July 1, 2013  through  June 30, 2016,
which will succeed the current repurchase program that expires on  June 30,
2013. The company also announced a 5.6 percent increase in its annualized
dividend to  $2.27  per share from  $2.15  per share, to take effect with the 
June 2013  payment. Under these programs, the company expects to return a total
of  $6.4 billion  to shareholders in 2013 through dividends of approximately 
$3.4 billion, and share repurchases of approximately  $3.0 billion.  



Conference Call

At  8 a.m. (Eastern Time)  today, the company will host a conference call with
investors to discuss fourth-quarter results and the outlook for 2013. Further
details, including a slide presentation accompanying the call, will be
accessible on the company's website at  www.pepsico.com/investors  in advance of
the call.

 PepsiCo, Inc. and Subsidiaries                                                                                                                                                                  
 Condensed Consolidated Statement of Income                                                                                                                                                      
 (in millions except per share amounts, unaudited, except year-ended 12/31/2011 amounts)                                                                                                         
                                                                                                                                                                                     
                                           Quarter Ended                                                                   Year Ended                                                          
                                           12/29/2012              12/31/2011              Change                      12/29/2012              12/31/2011              Change          
                                                                                                                                                                                     
 Net Revenue                               $     19,954            $     20,158            (1)      %                 $     65,492            $     66,504            (1.5)    %     
                                                                                                                                                                                     
 Cost of sales                             9,654                   9,731                   (1)      %                 31,291                  31,593                  (1)      %     
 Selling, general and administrative       8,050                   8,150                                              24,970                  25,145                                 
 expenses                                  (1)            %        (1)            %        
 Amortization of intangible assets         37                      30                      24       %                 119                     133                     (11)     %     
                                                                                                                                                                                     
 Operating Profit                          2,213                   2,247                   (1.5)    %                 9,112                   9,633                   (5)      %     
                                                                                                                                                                                     
 Interest expense                          (288)                   (272)                   6        %                 (899)                   (856)                   5        %     
 Interest income and other                 44                      24                      89       %                 91                      57                      61       %     
                                                                                                                                                                                     
 Income before income taxes                1,969                   1,999                   (1)      %                 8,304                   8,834                   (6)      %     
                                                                                                                                                                                     
 Provision for income taxes                302                     597                     (49)     %                 2,090                   2,372                   (12)     %     
                                                                                                                                                                                     
 Net income                                1,667                   1,402                   19       %                 6,214                   6,462                   (4)      %     
                                                                                                                                                                                     
 Less:  Net income (loss) attributable to                          (13)                                                                       19                                     
 noncontrolling interests                  6              n/m                     36       92       %        
                                                                                                                                                                                     
 Net Income Attributable to PepsiCo        $      1,661            $      1,415            17       %                 $      6,178            $      6,443            (4)      %     
                                                                                                                                                                                     
 Diluted                                                                                                                                                                             
 Net Income Attributable to PepsiCo per                                                                                                                                              
 Common Share                              $        1.06           $        0.89           19       %                 $        3.92           $        4.03           (3)      %     
 Weighted-average common shares                                                                                                                                                      
 outstanding                               1,564                   1,584                                              1,575                   1,597                                  
                                                                                                                                                                                     
 Cash dividends declared per common                                                                                                                                                  
 share                                     $     0.5375            $      0.515                                       $     2.1275            $      2.025                           
                                                                                                                                                                                     
                                                                                                                                                                                     
 n/m = not meaningful                                                                                                                                                                             
                                                                                                                                                                                                  
 A-1                                                                                                                                                                                              


 PepsiCo, Inc. and Subsidiaries                                                                                                                                                    
 Supplemental Financial Information                                                                                                                                                
 (in millions and unaudited, except year-ended 12/31/2011 amounts)                                                                                                                 
                                                                                                                                                                       
                                           Quarter Ended                                                            Year Ended                                                   
                                           12/29/2012            12/31/2011            Change                   12/29/2012           12/31/2011           Change         
 Net Revenue                                                                                                                                                                
                                                                                                                                                                       
 Frito-Lay North America                   $      4,102          $      4,155          (1)     %               $    13,574          $   13,322           2       %     
 Quaker Foods North America                815                   819                   (0.5)   %               2,636                2,656                (1)     %     
 Latin America Foods                       2,714                 2,399                 13      %               7,780                7,156                9       %     
 PepsiCo Americas Foods                    7,631                 7,373                 3.5     %               23,990               23,134               4       %     
                                                                                                                                                                       
 PepsiCo Americas Beverages                6,078                 6,311                 (4)     %               21,408               22,418               (4.5)   %     
 Europe                                    4,288                 4,231                 1       %               13,441               13,560               (1)     %     
 Asia, Middle East & Africa                1,957                 2,243                 (13)    %               6,653                7,392                (10)    %     
 Total Net Revenue                         $    19,954           $    20,158           (1)     %               $    65,492          $   66,504           (1.5)   %     
                                                                                                                                                                       
 Operating Profit                                                                                                                                                      
                                                                                                                                                                       
 Frito-Lay North America                   $      1,114          $      1,076          3.5     %               $     3,646          $     3,621          1       %     
 Quaker Foods North America                200                   239                   (17)    %               695                  797                  (13)    %     
 Latin America Foods                       386                   358                   8       %               1,059                1,078                (2)     %     
 PepsiCo Americas Foods                    1,700                 1,673                 2       %               5,400                5,496                (2)     %     
                                                                                                                                                                       
 PepsiCo Americas Beverages                735                   740                   (1)     %               2,937                3,273                (10)    %     
 Europe                                    313                   226                   38      %               1,330                1,210                10      %     
 Asia, Middle East & Africa                117                   157                   (25)    %               747                  887                  (16)    %     
 Division Operating Profit                 2,865                 2,796                 2.5     %               10,414               10,866               (4)     %     
                                                                                                                                                                       
 Corporate Unallocated                                                                                                                                                 
 Mark-to-Market net impact (Losses)/Gains  (61)                  (71)                  (14)    %               65                   (102)                n/m           
 Merger and Integration Charges            -                     (14)                  n/m                     -                    (78)                 n/m           
 Restructuring and Impairment Charges      (2)                   (74)                  (97)    %               (10)                 (74)                 (86)    %     
 Pension Lump Sum Settlement Charge        (195)                 -                     n/m                     (195)                -                    n/m           
 53rdWeek                                  -                     (18)                  n/m                     -                    (18)                 n/m           
 Other                                     (394)                 (372)                 6       %               (1,162)              (961)                21      %     
                                           (652)                 (549)                 19      %               (1,302)              (1,233)              6       %     
                                                                                                                                                                       
 Total Operating Profit                    $      2,213          $      2,247          (1.5)   %               $     9,112          $     9,633          (5)     %     
                                                                                                                                                                       
                                                                                                                                                                       
 n/m = not meaningful                                                                                                                                                               
                                                                                                                                                                                    
 A-2                                                                                                                                                                                


 PepsiCo, Inc. and Subsidiaries                                                                                                
 Condensed Consolidated Statement of Cash Flows                                                                                
 (in millions)                                                                                                                 
                                                                                         Year Ended                          
                                                                                         12/29/2012          12/31/2011    
                                                                                        (unaudited)                       
 Operating Activities                                                                                                      
 Net income                                                                              $      6,214        $      6,462  
 Depreciation and amortization                                                           2,689               2,737         
 Stock-based compensation expense                                                        278                 326           
 Merger and integration charges                                                          16                  329           
 Cash payments for merger and integration charges                                        (83)                (377)         
 Restructuring and impairment charges                                                    279                 383           
 Cash payments for restructuring charges                                                 (343)               (31)          
 Restructuring and other charges related to the transaction with Tingyi                                                    
 
   (Cayman Islands)  Holding Corp. (Tingyi)                                                                              
                                        176                                             -             
 Cash payments for restructuring and other charges related to the                                                          
 
   transaction  with Tingyi                                                                                              
                                        (109)                                           -             
 Excess tax benefits from share-based payment arrangements                               (124)               (70)          
 Pension and retiree medical plan contributions                                          (1,865)             (349)         
 Pension and retiree medical plan expenses                                               796                 571           
 Deferred income taxes and other tax charges and credits                                 321                 495           
 Change in accounts and notes receivable                                                 (250)               (666)         
 Change in inventories                                                                   144                 (331)         
 Change in prepaid expenses and other current assets                                     89                  (27)          
 Change in accounts payable and other current liabilities                                548                 520           
 Change in income taxes payable                                                          (97)                (340)         
 Other, net                                                                              (200)               (688)         
 Net Cash Provided by Operating Activities                                               8,479               8,944         
                                                                                                                           
 Investing Activities                                                                                                      
 Capital spending                                                                        (2,714)             (3,339)       
 Sales of property, plant and equipment                                                  95                  84            
 Acquisition of Wimm-Bill-Dann Foods OJSC (WBD), net of cash and cash                                                      
 equivalents acquired                                                                    -                   (2,428)       
 Investment in WBD                                                                       -                   (164)         
 Cash payments related to the transaction with Tingyi                                    (306)               -             
 Other acquisitions and investments in noncontrolled affiliates                          (121)               (601)         
 Divestitures                                                                            (32)                780           
 Short-term investments, net                                                             61                  66            
 Other investing, net                                                                    12                  (16)          
 Net Cash Used for Investing Activities                                                  (3,005)             (5,618)       
                                                                                                                           
 Financing Activities                                                                                                      
 Proceeds from issuances of long-term debt                                               5,999               3,000         
 Payments of long-term debt                                                              (2,449)             (1,596)       
 Debt repurchase                                                                         -                   (771)         
 Short-term borrowings, net                                                     (1,461)                303   
 Cash dividends paid                                                                     (3,305)             (3,157)       
 Share repurchases - common                                                              (3,219)             (2,489)       
 Share repurchases - preferred                                                           (7)                 (7)           
 Proceeds from exercises of stock options                                                1,122               945           
 Excess tax benefits from share-based payment arrangements                               124                 70            
 Acquisition of noncontrolling interests                                                 (68)                (1,406)       
 Other financing                                                                         (42)                (27)          
 Net Cash Used for Financing Activities                                                  (3,306)             (5,135)       
                                                                                                                           
 Effect of exchange rate changes on cash and cash equivalents                            62                  (67)          
 Net Increase/(Decrease) in Cash and Cash Equivalents                                    2,230               (1,876)       
 Cash and Cash Equivalents - Beginning of Year                                           4,067               5,943         
 Cash and Cash Equivalents - End of Year                                                 $      6,297        $      4,067  
                                                                                                                           
 A-3                                                                                                                       


 PepsiCo, Inc. and Subsidiaries                                                                                                   
 Condensed Consolidated Balance Sheet                                                                                             
 (in millions except per share amounts)                                                                                           
                                                                                                                             
                                                                                    12/29/2012         12/31/2011             
 Assets                                                                             (unaudited)                               
 Current Assets                                                                                                               
 Cash and cash equivalents                                                          $         6,297    $          4,067       
 Short-term investments                                                             322                358                    
 Accounts and notes receivable, net                                                 7,041              6,912                  
 Inventories                                                                                                                  
 Raw materials                                                                      1,875              1,883                  
 Work-in-process                                                                    173                207                    
 Finished goods                                                                     1,533              1,737                  
                                                                                    3,581              3,827                  
                                                                                                                              
 Prepaid expenses and other current assets                                          1,479              2,277                  
 Total Current Assets                                                               18,720             17,441                 
                                                                                                                              
 Property, plant and equipment, net                                                 19,136             19,698                 
 Amortizable intangible assets, net                                                 1,781              1,888                  
                                                                                                                              
 Goodwill                                                                           16,971             16,800                 
 Other nonamortizable intangible assets                                             14,744             14,557                 
 Nonamortizable Intangible Assets                                                   31,715             31,357                 
                                                                                                                              
 Investments in noncontrolled affiliates                                            1,633              1,477                  
 Other assets                                                                       1,653              1,021                  
 Total Assets                                                                       $       74,638     $        72,882        
                                                                                                                              
 Liabilities and Equity                                                                                                       
 Current Liabilities                                                                                                          
 Short-term obligations                                                             $         4,815    $          6,205       
 Accounts payable and other current liabilities                                     11,903             11,757                 
 Income taxes payable                                                               371                192                    
 Total Current Liabilities                                                          17,089             18,154                 
                                                                                                                              
 Long-term debt obligations                                                         23,544             20,568                 
 Other liabilities                                                                  6,543              8,266                  
 Deferred income taxes                                                              5,063              4,995                  
 Total Liabilities                                                                  52,239             51,983                 
                                                                                                                              
 Commitments and Contingencies                                                                                                
                                                                                                                              
 Preferred stock, no par value                                                      41                 41                     
 Repurchased preferred stock                                                        (164)              (157)                  
                                                                                                                              
 PepsiCo Common Shareholders' Equity                                                                                          
 Common stock, par value 12/3ยข per share (authorized 3,600 shares, issued, net      26                 26                     
 of repurchased common stock at par value: 1,544 and 1,565 shares, respectively)  
 Capital in excess of par value                                                     4,178              4,461                  
 Retained earnings                                                                  43,158             40,316                 
 Accumulated other comprehensive loss                                               (5,487)            (6,229)                
 Repurchased common stock, in excess of par (322 and 301 shares, respectively)      (19,458)           (17,870)               
 Total PepsiCo Common Shareholders' Equity                                          22,417             20,704                 
                                                                                                                              
 Noncontrolling interests                                                           105                311                    
 Total Equity                                                                       22,399             20,899                 
 Total Liabilities and Equity                                                       $       74,638     $        72,882        
                                                                                                                              
 A-4                                                                                                                          


 PepsiCo, Inc. and Subsidiaries                                                                                                                                                                  
 Supplemental Share and Stock-Based Compensation Data                                                                                                                                            
 (in millions except dollar amounts, unaudited)                                                                                                                                                  
                                                                                                                                                                                       
                                                                     Quarter Ended                                                Year Ended                                                 
                                                                      12/29/2012                       12/31/2011                12/29/2012                      12/31/2011               
 Beginning Net Shares Outstanding                                     1,552                            1,568                     1,565                           1,582                    
 Options Exercised/Restricted Stock Units and PEPUnits Converted      4                                5                         26                              22                       
 Shares Repurchased                                                   (12)                             (8)                       (47)                            (39)                     
 Ending Net Shares Outstanding                                        1,544                            1,565                     1,544                           1,565                    
                                                                                                                                                                                          
 Weighted Average Basic                                               1,546                            1,564                     1,557                           1,576                    
 Dilutive Securities:                                                                                                                                                                     
 Options                                                              10                               12                        11                              14                       
 Restricted Stock Units                                               7                                7                         6                               6                        
 PEPUnits                                                             -                                -                         -                               -                        
 ESOP Convertible Preferred Stock/Other                               1                                1                         1                               1                        
 Weighted Average Diluted                                             1,564                            1,584                     1,575                           1,597                    
                                                                                                                                                                                          
 Average Share Price for the Period                                   $              69.91             $             62.92       $              68.34            $             65.25      
 Growth Versus Prior Year                                             11%                              (4)%                      5%                              1%                       
                                                                                                                                                                                          
 Options Outstanding                                                  68                               91                        76                              97                       
 Options in the Money                                                 67                               55                        66                              72                       
 Dilutive Shares from Options                                         10                               12                        11                              14                       
 Dilutive Shares from Options as a % of Options in the Money          15%                              22%                       16%                             20%                      
                                                                                                                                                                                          
 Average Exercise Price of Options in the Money                       $              58.96             $             48.93       $              56.42            $             51.36      
                                                                                                                                                                                          
 Restricted Stock Units Outstanding                                   12                               12                        12                              13                       
 Dilutive Shares from Restricted Stock Units                          7                                7                         6                               6                        
 Dilutive Shares from PEPUnits                                        -                                -                         -                               -                        
                                                                                                                                                                                          
 Average Intrinsic Value of Restricted Stock Units Outstanding*       $              65.60             $             62.96       $              65.41            $             62.93      
 Average Intrinsic Value of PEPUnits Outstanding*                     $              64.89             $                    -    $              64.78            $                     -  
                                                                                                                                                                                       
                                                                                                                                                                                          
 * Weighted average intrinsic value at grant date.                                                                                                                                               
                                                                                                                                                                                                 
 A-5                                                                                                                                                                                             


 PepsiCo, Inc. and Subsidiaries                                                                                                                                                                 
 Reconciliation of GAAP and Non-GAAP Information                                                                                                                                                
 Organic Growth                                                                                                                                                                                 
 Quarters Ended December 29, 2012 and December 31, 2011                                                                                                                                         
 (unaudited)                                                                                                                                                                                    
                                                                                                                                                                                     
                                         GAAP Measure                Percent Impact                                                                          Non-GAAP Measure            
                                         Reported % Change                                                                                               Organic % Change*           
 Net Revenue Year over Year % Change      Quarter Ended 12/29/2012    Acquisitions and                    Foreign exchange                   53rd week    Quarter Ended 12/29/2012    
                                                                      
divestitures                       
translation                                                                
                                                                                                                                                                                     
 Frito-Lay North America                  (1)                         -                                   -                                  7            5                           
 Quaker Foods North America               (0.5)                       -                                   (0.5)                              5.5          5                           
 Latin America Foods                      13                          (1)                                 1                                  -            13                          
 PepsiCo Americas Foods                   3.5                         -                                   -                                  4            8                           
                                                                                                                                                                                     
 PepsiCo Americas Beverages               (4)                         2                                   -                                  5            2.5                         
                                                                                                                                                                                     
 Europe                                   1                           -                                   1                                  1            3.5                         
                                                                                                                                                                                     
 Asia, Middle East & Africa               (13)                        19                                  1                                  -            8                           
                                                                                                                                                                                     
 Total PepsiCo                            (1)                         3                                   0.5                                3            5                           
                                                                                                                                                                                     
                                                                                                                                                                                     
                                         GAAP Measure                Percent Impact                                                                          Non-GAAP Measure            
                                         Reported % Change                                                                                               Organic % Change*           
 Net Revenue Year over Year % Change      Quarter  Ended              Acquisitions and divestitures       Foreign exchange translation       53rd week    Quarter Ended 12/31/2011    
                                          
12/31/2011                                                                                                                                 
                                                                                                                                                                                     
 Frito-Lay North America                  13                          -                                   -                                  (7)          6                           
 Quaker Foods North America               4                           -                                   -                                  (5)          (2)                         
 Latin America Foods                      7                           -                                   6                                  -            13                          
 PepsiCo Americas Foods                   10                          -                                   2                                  (4.5)        8                           
                                                                                                                                                                                     
 PepsiCo Americas Beverages               -                           4                                   -                                  (5)          -                           
                                                                                                                                                                                     
 Europe                                   32                          (30)                                3                                  (1)          4                           
                                                                                                                                                                                     
 Asia, Middle East & Africa               16                          -                                   1                                  -            17                          
                                                                                                                                                                                     
 Total PepsiCo                            11                          (4)                                 1.5                                (3)          5                           
                                                                                                                                                                                     
                                                                                                                                                                                     
                                                                                                                                                                                                
 * Organic percent change is a financial measure that is not in accordance with GAAP and is calculated by excluding the impact of acquisitions and                                              
 
     divestitures, foreign exchange translation and a 53rd week in the fourth quarter of 2011 from reported growth.                                                                           
                                                                                                                                                                                                
 Note - certain amounts above may not sum due to rounding.                                                                                                                                      
                                                                                                                                                                                                
 A-6                                                                                                                                                                                            


 PepsiCo, Inc. and Subsidiaries                                                                                                                                                                            
 Reconciliation of GAAP and Non-GAAP Information (cont.)                                                                                                                                                   
 Organic Growth                                                                                                                                                                                            
 Years Ended December 29, 2012 and December 31, 2011                                                                                                                                                       
 (unaudited)                                                                                                                                                                                               
                                                                                                                                                                                                 
                                         GAAP Measure                   Percent Impact                                                                                      Non-GAAP Measure         
                                         Reported % Change                                                                                                              Organic % Change*        
 Net Revenue Year over Year % Change      Year Ended 12/29/2012          Acquisitions and divestitures          Foreign exchange                      53rd week          Year Ended 12/29/2012    
                                                                                                                
translation                                                                      
                                                                                                                                                                                                 
 Frito-Lay North America                  2                              -                                      -                                     2                  4                        
 Quaker Foods North America               (1)                            -                                      -                                     2                  1                        
 Latin America Foods                      9                              (2)                                    7                                     -                  14                       
 PepsiCo Americas Foods                   4                              (0.5)                                  2                                     1                  7                        
                                                                                                                                                                                                 
 PepsiCo Americas Beverages               (4.5)                          4.5                                    -                                     1                  1.5                      
                                                                                                                                                                                                 
 Europe                                   (1)                            (2)                                    7                                     -                  4                        
                                                                                                                                                                                                 
 Asia, Middle East & Africa               (10)                           17                                     3                                     -                  10                       
                                                                                                                                                                                                 
 Total PepsiCo                            (1.5)                          3                                      2.5                                   1                  5                        
                                                                                                                                                                                                 
                                                                                                                                                                                                 
                                                                                                                                                                                                 
                                         GAAP Measure                   Percent Impact                                                                                      Non-GAAP Measure         
                                         Reported % Change                                                                                                              Organic % Change*        
 Net Revenue Year over Year % Change      Year Ended 12/31/2011          Acquisitions and divestitures          Foreign exchange translation          53rd week          Year Ended 12/31/2011    
                                                                                                                                                                                                 
 Frito-Lay North America                  6                              -                                      -                                     (2)                3.5                      
 Quaker Foods North America               -                              -                                      (1)                                   (2)                (2)                      
 Latin America Foods                      13                             -                                      (2)                                   -                  11                       
 PepsiCo Americas Foods                   7                              -                                      (1)                                   (1)                5                        
                                                                                                                                                                                                 
 PepsiCo Americas Beverages               10                             **                                     (1)                                   (1)                **                       
                                                                                                                                                                                                 
 Europe                                   41                             **                                     (3)                                   -                  **                       
                                                                                                                                                                                                 
 Asia, Middle East & Africa               17                             -                                      (2)                                   -                  16                       
                                                                                                                                                                                                 
 Total PepsiCo                            15                             **                                     (1)                                   (1)                **                       
                                                                                                                                                                                                 
                                                                                                                                                                                                 
                                                                                                                                                                                                            
 * Organic percent change is a financial measure that is not in accordance with GAAP and is calculated by excluding the impact of                                                                           
 
      acquisitions and divestitures, foreign exchange translation and a 53rdweek in the fourth quarter of 2011 from reported growth.                                                                      
 ** It is impractical to separately determine and quantify the impact of our acquisitions of PBG and PAS from changes in our pre-existing                                                                   
 
      beverage business since we now manage these businesses as an  integrated system.                                                                                                                    
                                                                                                                                                                                                            
 Note - certain amounts above may not sum due to rounding.                                                                                                                                                  
                                                                                                                                                                                                            
 A-7                                                                                                                                                                                                        


 PepsiCo, Inc. and Subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
 Reconciliation of GAAP and Non-GAAP Information (cont.)                                                                                                                                                                                                                                                                                                                                                                                                                                        
 Year over Year Growth Rates                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
 Quarters Ended December 29, 2012 and December 31, 2011                                                                                                                                                                                                                                                                                                                                                                                                                                         
 (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
                                                                    GAAP                                                                                                                                                                                                                                                                                                   Non-GAAP                                                                       Non-GAAP           
                                                                    
Measure                                                                                                                                                                                                                                                                                               
Measure                                                                       
Measure           
                                                                    Reported %                 Percent Impact of Non-Core Adjustments                                                                                                                                                                                                                                                  Core* % Change                                 Percent Impact of               Core Constant      
                                                                    
Change                                                                                                                                                                                                                                                                                                                                                                                           
Currency* %       
                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
Change            
 Operating Profit Year over Year % Change                           Quarter                    Commodity                           Merger and                                   Restructuring and                 Restructuring                     Pension lump                                   53rd week                    Inventory fair                             Quarter  Ended                                 Foreign exchange translation    Quarter            
                                                                    
Ended                     
mark-to-                           
 integration                                
impairment charges               
and  other                       
sum                                                                        
value                                     
12/29/2012                                                                    
Ended             
                                                                    
12/29/2012                
market  net                        
charges                                                                       
charges                          
settlement                                                                 
adjustments                                                                                                              
12/29/2012        
                                                                                               
impact                                                                                                            
related  to  the                 
charge                                                                                                                                                                                                                  
                                                                                                                                                                                                                  
transaction  with                                                                                                                                                                                                                                         
                                                                                                                                                                                                                  
Tingyi                                                                                                                                                                                                                                                    
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
 Frito-Lay North America                                            3.5                        -                                   -                                            (7)                               -                                 -                                              7                            -                                          3                                              -                               3                  
 Quaker Foods North America                                         (17)                       -                                   -                                            (7)                               -                                 -                                              5                            -                                          (18)                                           -                               (18)               
 Latin America Foods                                                8                          -                                   -                                            (11)                              -                                 -                                              -                            -                                          (2.5)                                          (2)                             (4.5)              
 PepsiCo Americas Foods                                             2                          -                                   -                                            (8)                               -                                 -                                              5                            -                                          (1)                                            (1)                             (2)                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
 PepsiCo Americas Beverages                                         (1)                        -                                   (5)                                          (7)                               -                                 -                                              5                            (1)                                        (8)                                            -                               (8)                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
 Europe                                                             38                         -                                   (38)                                         (12)                              -                                 -                                              3                            -                                          (10)                                           -                               (10)               
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
 Asia, Middle East & Africa                                         (25)                       -                                   -                                            (3)                               8                                 -                                              -                            -                                          (19)                                           (1)                             (20)               
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
 Division Operating Profit                                          2.5                        -                                   (5)                                          (8)                               0.5                               -                                              5                            -                                          (5)                                            -                               (5)                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
 Impact of Corporate Unallocated                                    (4)                        -                                   (2)                                          (3)                               -                                 8                                              -                            -                                          (1.5)                                          -                               (1.5)              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
 Total Operating Profit                                             (1.5)                      -                                   (7)                                          (12)                              0.5                               8                                              5                            -                                          (7)                                            -                               (7)                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
 Net income Attributable to PepsiCo                                 17                                                                                                                                                                                                                                                                                                     (6)                                            -                               (7)                
 Net income Attributable to PepsiCo per common share - diluted      19                                                                                                                                                                                                                                                                                                     (5)                                            (0.5)                           (5)                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                    GAAP                                                                                                                                                                                                                           Non-GAAP                                                                Non-GAAP                                                                                          
                                                                    
Measure                                                                                                                                                                                                                       
Measure                                                                
Measure                                                                                          
                                                                    Reported %                 Percent Impact of Non-Core Adjustments                                                                                                                                                                      Core* % Change               Percent Impact of                          Core Constant Currency* % Change                                                                  
                                                                    
Change                                                                                                                                                                                                                                                                                                                                                                                                          
 Operating Profit Year over Year % Change                           Quarter                    Commodity                           Merger and integration charges               Restructuring and                 53rdweek                          Inventory fair value adjustments               Quarter                      Foreign exchange translation               Quarter                                                                                           
                                                                    
Ended                     
mark-to-market net                                                              
impairment charges                                                                                                
Ended                                                                  
Ended                                                                                            
                                                                    
12/31/2011                
impact                                                                                                                                                                                             
12/31/2011                                                             
12/31/2011                                                                                       
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
 Frito-Lay North America                                            10                         -                                   -                                            8                                 (7)                               -                                              10                           -                                          10                                                                                                
 Quaker Foods North America                                         9                          -                                   -                                            8                                 (6)                               -                                              11                           -                                          11                                                                                                
 Latin America Foods                                                (8)                        -                                   -                                            12                                -                                 -                                              4                            7                                          12                                                                                                
 PepsiCo Americas Foods                                             5                          -                                   -                                            9                                 (5)                               -                                              9                            2                                          11                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
 PepsiCo Americas Beverages                                         1                          -                                   (13)                                         11                                (5)                               (3)                                            (7)                          1                                          (6)                                                                                               
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
 Europe                                                             -                          -                                   13                                           26                                (3)                               -                                              36                           2                                          38                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
 Asia, Middle East & Africa                                         209                        -                                   -                                            19                                -                                 -                                              227                          5                                          232                                                                                               
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
 Division Operating Profit                                          7                          -                                   (2)                                          12                                (5)                               (1)                                            10                           1.5                                        12                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
 Impact of Corporate Unallocated                                    (7)                        5                                   (3)                                          5                                 -                                 -                                              -                            -                                          -                                                                                                 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
 Total Operating Profit                                             1                          5                                   (5)                                          17                                (5)                               (1)                                            11                           2                                          12                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
 Net income Attributable to PepsiCo                                 4                                                                                                                                                                                                                              8                            2                                          9                                                                                                 
 Net income Attributable to PepsiCo per common share - diluted      5                                                                                                                                                                                                                              9                            2                                          11                                                                                                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
 * Core results and core constant currency results are financial measures that are not in accordance with GAAP and exclude the above adjustments.   See A-17 through A-19 for a discussion of each of these adjustments.                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
 Note - certain amounts above may not sum due to rounding.                                                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
 A-8                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               


 Reconciliation of GAAP and Non-GAAP Information (cont.)                                                                                                                                                                                                                                                                                                                                                             
 Year over Year Growth Rates                                                                                                                                                                                                                                                                                                                                                                                         
 Years Ended December 29, 2012 and December 31, 2011                                                                                                                                                                                                                                                                                                                                                                 
 (unaudited)                                                                                                                                                                                                                                                                                                                                                                                                         
                                                                    GAAP                                                                                                                                                                                                                  Non-GAAP                                            Non-GAAP                                        
                                                                    
Measure                                                                                                                                                                                                              
Measure                                            
Measure                                        
                                                                    Reported %               Percent Impact of Non-Core Adjustments                                                                                                                                                                   Core* % Change             Percent Impact of        Core Constant                                   
                                                                    
Change                                                                                                                                                                                                                                                                               
Currency* %                                    
                                                                                                                                                                                                                                                                                                                                                          
Change                                         
 Operating Profit Year over Year % Change                           Year Ended 12/29/2012    Commodity            Merger and           Restructuring         Restructuring             Pension lump                           53rd week                            Inventory fair         Year Ended                 Foreign                  Year Ended 12/29/2012                           
                                                                                             
mark-to-            
integration         
and                  
and other                
sum  settlement                                                            
value                 
12/29/2012                
exchange                                                                
                                                                                             
market  net         
charges             
impairment           
charges related          
charge                                                                     
adjustments                                      
translation                                                             
                                                                                             
impact                                   
charges              
to the                                                                                                                                                                                                                          
                                                                                                                                                             
transaction with                                                                                                                                                                                                                
                                                                                                                                                             
Tingyi                                                                                                                                                                                                                          
                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                             
 Frito-Lay North America                                            1                        -                    -                    (1)                   -                         -                                      2                                    -                      2                          -                        2                                               
 Quaker Foods North America                                         (13)                     -                    -                    (1)                   -                         -                                      2                                    -                      (12)                       -                        (12)                                            
 Latin America Foods                                                (2)                      -                    -                    -                     -                         -                                      -                                    -                      (1.5)                      5.5                      4                                               
 PepsiCo Americas Foods                                             (2)                      -                    -                    (1)                   -                         -                                      1.5                                  -                      (1)                        1                        -                                               
                                                                                                                                                                                                                                                                                                                                                                                             
 PepsiCo Americas Beverages                                         (10)                     -                    (3)                  1                     -                         -                                      1                                    (1)                    (12)                       1                        (11)                                            
                                                                                                                                                                                                                                                                                                                                                                                             
 Europe                                                             10                       -                    (9)                  (3)                   -                         -                                      1                                    (2)                    (3)                        6                        3                                               
                                                                                                                                                                                                                                                                                                                                                                                             
 Asia, Middle East & Africa                                         (16)                     -                    -                    2                     17                        -                                      -                                    -                      3                          1                        4                                               
                                                                                                                                                                                                                                                                                                                                                                                             
 Division Operating Profit                                          (4)                      -                    (2)                  -                     1                         -                                      1                                    -                      (4)                        2                        (3)                                             
                                                                                                                                                                                                                                                                                                                                                                                             
 Impact of Corporate Unallocated                                    (1)                      (2)                  (1)                  (1)                   -                         2                                      -                                    -                      (2)                        -                        (2)                                             
                                                                                                                                                                                                                                                                                                                                                                                             
 Total Operating Profit                                             (5)                      (2)                  (3)                  (1)                   1                         2                                      1                                    (0.5)                  (7)                        2                        (5)                                             
                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                             
 Net income Attributable to PepsiCo                                 (4)                                                                                                                                                                                                                   (8)                        2                        (6)                                             
 Net income Attributable to PepsiCo per common share - diluted      (3)                                                                                                                                                                                                                   (7)                        2                        (5)                                             
                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                             
                                                                   GAAP                                                                                                                                                                                                                                             Non-GAAP                                          Non-GAAP               
                                                                   
Measure                                                                                                                                                                                                                                         
Measure                                          
Measure               
                                                                   Reported %               Percent Impact of Non-Core Adjustments                                                                                                                                                                                                Core* % Change           Percent Impact of        Core Constant          
                                                                   
Change                                                                                                                                                                                                                                                                                                          
Currency* %           
                                                                                                                                                                                                                                                                                                                                                                                    
Change                
 Operating Profit Year over Year % Change                           Year Ended 12/31/2011    Commodity            Merger and           Restructuring         53rdweek                  Inventory fair value adjustments       Venezuela currency devaluation       Asset write-off        Foundation contribution    Year Ended 12/31/2011    Foreign  exchange        Year Ended 12/31/2011  
                                                                                             
mark-to-            
integration         
and                                                                                                                                                                                                   
translation                                    
                                                                                             
market net          
charges             
impairment                                                                                                                                                                                                                                            
                                                                                             
impact                                   
charges                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                             
 Frito-Lay North America                                            7                        -                    -                    2                     (2)                       -                                      -                                    -                      -                          7                        -                        7                      
 Quaker Foods North America                                         8                        -                    -                    2                     (2)                       -                                      -                                    -                      -                          8                        (0.5)                    8                      
 Latin America Foods                                                7                        -                    -                    5                     -                         -                                      -                                    -                      -                          12                       (1)                      11                     
 PepsiCo Americas Foods                                             7                        -                    -                    3                     (2)                       -                                      -                                    -                      -                          8                        (0.5)                    8                      
                                                                                                                                                                                                                                                                                                                                                                                             
 PepsiCo Americas Beverages                                         18                       -                    (13)                 3                     (1)                       (12)                                   -                                    -                      -                          (4)                      (0.5)                    (4)                    
                                                                                                                                                                                                                                                                                                                                                                                             
 Europe                                                             15                       -                    1                    4                     (1)                       (1)                                    -                                    -                      -                          18                       (4)                      14                     
                                                                                                                                                                                                                                                                                                                                                                                             
 Asia, Middle East & Africa                                         25                       -                    -                    1                     -                         -                                      -                                    -                      -                          27                       (2.5)                    24                     
                                                                                                                                                                                                                                                                                                                                                                                             
 Division Operating Profit                                          13                       -                    (4)                  3                     (1)                       (4)                                    -                                    -                      -                          7                        (1)                      6                      
                                                                                                                                                                                                                                                                                                                                                                                             
 Impact of Corporate Unallocated                                    3                        2                    (2)                  1                     -                         -                                      (1.5)                                (2)                    (1)                        (0.5)                    -                        (0.5)                  
                                                                                                                                                                                                                                                                                                                                                                                             
 Total Operating Profit                                             16                       2                    (6)                  4                     (1.5)                     (4)                                    (1.5)                                (2)                    (1)                        6                        (1)                      5                      
                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                             
 Net income Attributable to PepsiCo                                 2                                                                                                                                                                                                                                                5                        (1)                      4                      
 Net income Attributable to PepsiCo per common share - diluted      3                                                                                                                                                                                                                                                7                        (1)                      5                      
                                                                                                                                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                             
 * Core results and core constant currency results are financial measures that are not in accordance with GAAP and exclude the above adjustments.   See A-17 through A-19 for a discussion of each of these adjustments.                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                                                                                                                                                     
 Note - certain amounts above may not sum due to rounding.                                                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                                                     
 A-9                                                                                                                                                                                                                                                                                                                                                                                                                 


 PepsiCo, Inc. and Subsidiaries                                                                                                                                                                                                                                                                                                         
 Reconciliation of GAAP and Non-GAAP Information (cont.)                                                                                                                                                                                                                                                                                
 Certain Line Items                                                                                                                                                                                                                                                                                                                     
 Quarters Ended December 29, 2012 and December 31, 2011                                                                                                                                                                                                                                                                                 
 (in millions except per share amounts, unaudited)                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                                                        
                                                                                   GAAP Measure    Non-Core Adjustments                                                                                                                                                                                         Non-GAAP Measure  
                                                                                   Reported        Commodity  mark-        Merger and                                                                                                                                                                 Core*             
                                                                                                   
to-market  net         
integration                                                                                                                                                                                 
                                                                                                   
impact                 
charges                                                                                                                                                                                     
                                                                                   Quarter                                 Restructuring         Restructuring and other charges related to the transaction with Tingyi       Pension lump                 Tax benefit            Quarter           
                                                                                   
Ended                                  
and                                                                                               
sum                         
related to tax        
Ended            
                                                                                   
12/29/2012                             
impairment                                                                                        
settlement                  
court                 
12/29/2012       
                                                                                                                           
charges                                                                                           
 charge                     
decision                                
                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                        
 Cost of sales                                                                     $   9,654       $      (43)             $          -          $          -                                                                 $          -                 $          -           $          -        $   9,611         
                                                                                                                                                                                                                                                                                                                        
 Selling, general and administrative expenses                                      $   8,050       $      (18)             $        (4)          $      (86)                                                                  $      (13)                  $    (195)             $          -        $   7,734         
                                                                                                                                                                                                                                                                                                                        
 Operating profit                                                                  $   2,213       $       61              $         4           $       86                                                                   $       13                   $     195              $          -        $   2,572         
                                                                                                                                                                                                                                                                                                                        
 Interest expense                                                                   $    (288)      $          -            $         5           $          -                                                                 $          -                 $          -           $          -        $    (283)        
                                                                                                                                                                                                                                                                                                                        
 Provision for income taxes                                                        $     302       $       27              $         3           $       10                                                                   $          -                 $       64             $     217           $     623         
                                                                                                                                                                                                                                                                                                                        
 Net income attributable to PepsiCo                                                $   1,661       $       34              $         6           $       76                                                                   $       13                   $     131              $    (217)          $   1,704         
                                                                                                                                                                                                                                                                                                                        
 Net income attributable to PepsiCo per common share - diluted                     $    1.06       $    0.02               $        -            $    0.05                                                                    $    0.01                    $    0.08              $   (0.14)          $    1.09         
                                                                                                                                                                                                                                                                                                                        
 Effective tax rate                                                                15.4%                                                                                                                                                                                                              26.7%             
                                                                                                                                                                                                                                                                                                                        
                                                                                   GAAP Measure    Non-Core Adjustments                                                                                                                                                                   Non-GAAP Measure                      
                                                                                   Reported        Commodity mark-         Merger and                                                                                                                      Inventory fair         Core*                                 
                                                                                                   
to-market net          
integration                                                                                                                    
value                                                       
                                                                                                   
impact                 
charges                                                                                                                        
adjustments                                                 
                                                                                   Quarter                                 Restructuring         53rd week                                                                                    Quarter                             
                                                                                   
Ended                                  
and                                                                                                               
Ended                              
                                                                                   
12/31/2011                             
impairment                                                                                                        
12/31/2011                         
                                                                                                                           
charges                                                                                                                                               
                                                                                                                                                                                                                                                                                                                        
 Cost of sales                                                                     $   9,731       $        -              $        -            $        -                                                                   $    (265)                   $        (5)           $   9,461                             
                                                                                                                                                                                                                                                                                                                        
 Selling, general and administrative expenses                                      $   8,150       $      (71)             $    (155)            $    (383)                                                                   $    (248)                   $        -             $   7,293                             
                                                                                                                                                                                                                                                                                                                        
 Amortization of intangible assets                                                  $       30      $        -              $        -            $        -                                                                   $        (1)                 $        -             $       29                            
                                                                                                                                                                                                                                                                                                                        
 Operating profit                                                                  $   2,247       $       71              $     155             $     383                                                                    $    (109)                   $         5            $   2,752                             
                                                                                                                                                                                                                                                                                                                        
 Interest expense                                                                  $    (272)      $        -              $        -            $        -                                                                   $       16                   $        -             $    (256)                            
                                                                                                                                                                                                                                                                                                                        
 Interest income and other                                                          $       24      $        -              $        -            $        -                                                                   $        (1)                 $        -             $       23                            
                                                                                                                                                                                                                                                                                                                        
 Provision for income taxes                                                        $     597       $       20              $       31            $       97                                                                   $      (30)                  $         2            $     717                             
                                                                                                                                                                                                                                                                                                                        
 Net income attributable to PepsiCo                                                $   1,415       $       51              $     124             $     286                                                                    $      (64)                  $         3            $   1,815                             
                                                                                                                                                                                                                                                                                                                        
 Net income attributable to PepsiCo per common share - diluted                     $    0.89       $    0.03               $    0.08             $    0.18                                                                    $   (0.04)                   $        -             $    1.15                             
                                                                                                                                                                                                                                                                                                                        
 Effective tax rate                                                                29.9%                                                                                                                                                                                          28.4%                                 
                                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                                        
 *Core results are financial measures that are not in accordance with GAAP and exclude the above non-core adjustments.  See A-17 through A-19 for a discussion of each of these non-core adjustments.                                                                                                                                   
                                                                                                                                                                                                                                                                                                                        
 Note - certain amounts above may not sum due to rounding.                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                        
 A-10                                                                                                                                                                                                                                                                                                                                   


 PepsiCo, Inc. and Subsidiaries                                                                                                                                                                                                                                                                                                                                                      
 Reconciliation of GAAP and Non-GAAP Information (cont.)                                                                                                                                                                                                                                                                                                                             
 Certain Line Items                                                                                                                                                                                                                                                                                                                                                                  
 Years Ended December 29, 2012 and December 31, 2011                                                                                                                                                                                                                                                                                                                                 
 (in millions except per share amounts, unaudited)                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                                                                                                                                     
                                                                                   GAAP Measure                    Non-Core Adjustments                                                                                                                                                                                                                          Non-GAAP      
                                                                                                                                                                                                                                                                                                                                                                 
 Measure     
                                                                                   Reported                                                                                                                                                                                                                                                            Core*         
                                                                                   Year Ended                      Commodity                                        Merger and                                            Restructuring                       Restructuring and                    Pension                           Tax benefit       Year Ended    
                                                                                   12/29/2012                      
mark-to-                                        
integration                                          
 and impairment                    
other charges                       
lump sum                         
related to       
 12/29/2012  
                                                                                                                   
market net                                      
charges                                              
charges                            
related to the                      
settlement                       
tax court                      
                                                                                                                   
impact                                                                                                                                    
transaction with                    
charge                           
decision                       
                                                                                                                                                                                                                                                              
 Tingyi                                                                                               
                                                                                                                                                                                                                                                                                                                                                                     
 Cost of sales                                                                     $ 31,291                        $       25                                       $          -                                          $          -                        $          -                         $        -                        $        -        $ 31,316      
                                                                                                                                                                                                                                                                                                                                                                     
 Selling, general and administrative expenses                                      $ 24,970                        $       40                                       $      (11)                                           $    (279)                          $    (150)                           $    (195)                        $        -        $ 24,375      
                                                                                                                                                                                                                                                                                                                                                                     
 Operating profit                                                                  $   9,112                       $      (65)                                      $       11                                            $     279                           $     150                            $     195                         $        -        $   9,682     
                                                                                                                                                                                                                                                                                                                                                                     
 Interest expense                                                                   $    (899)                      $          -                                     $         5                                           $          -                        $          -                         $        -                        $        -        $    (894)    
                                                                                                                                                                                                                                                                                                                                                                     
 Provision for income taxes                                                        $   2,090                       $      (24)                                      $         4                                           $       64                          $      (26)                          $       64                        $     217         $   2,389     
                                                                                                                                                                                                                                                                                                                                                                     
 Net income attributable to PepsiCo                                                $   6,178                       $      (41)                                      $       12                                            $     215                           $     176                            $     131                         $    (217)        $   6,454     
                                                                                                                                                                                                                                                                                                                                                                     
 Net income attributable to PepsiCo per common share - diluted                     $    3.92                       $   (0.03)                                       $    0.01                                             $    0.14                           $    0.11                            $    0.08                         $   (0.14)        $    4.10     
                                                                                                                                                                                                                                                                                                                                                                     
 Effective tax rate                                                                25.2%                                                                                                                                                                                                                                                               26.9%         
                                                                                                                                                                                                                                                                                                                                                                     
                                                                                   GAAP Measure                    Non-Core Adjustments                                                                                                                                                                                                      Non-GAAP                        
                                                                                                                                                                                                                                                                                                                                             
 Measure                       
                                                                                   Reported                        Commodity mark-                                                                                                                                                                 Inventory fair                    Core*                           
                                                                                                                   
to-market net                                                                                                                                                                  
value                                                            
                                                                                                                   
 impact                                                                                                                                                                        
adjustments                                                      
                                                                                   Year Ended                                       Merger and integration charges                  Restructuring and impairment charges                      53rd week                                            Year Ended                                        
                                                                                   
 12/31/2011                                                                                                                                                                                                    
 12/31/2011                                      
                                                                                                                                                                                                                                                                                                                                                                     
 Cost of sales                                                                     $ 31,593                        $        -                                       $        -                                            $        -                          $    (265)                           $      (46)                       $ 31,282                        
                                                                                                                                                                                                                                                                                                                                                                     
 Selling, general and administrative expenses                                      $ 25,145                        $    (102)                                       $    (313)                                            $    (383)                          $    (248)                           $        -                        $ 24,099                        
                                                                                                                                                                                                                                                                                                                                                                     
 Amortization of intangible assets                                                  $     133                       $        -                                       $        -                                            $        -                          $        (1)                         $        -                        $     132                       
                                                                                                                                                                                                                                                                                                                                                                     
 Operating profit                                                                  $   9,633                       $     102                                        $     313                                             $     383                           $    (109)                           $       46                        $ 10,368                        
                                                                                                                                                                                                                                                                                                                                                                     
 Interest expense                                                                  $    (856)                      $        -                                       $       16                                            $        -                          $       16                           $        -                        $    (824)                      
                                                                                                                                                                                                                                                                                                                                                                     
 Interest income and other                                                          $       57                      $        -                                       $        -                                            $        -                          $        (1)                         $        -                        $       56                      
                                                                                                                                                                                                                                                                                                                                                                     
 Provision for income taxes                                                        $   2,372                       $       31                                       $       58                                            $       97                          $      (30)                          $       12                        $   2,540                       
                                                                                                                                                                                                                                                                                                                                                                     
 Noncontrolling interests                                                          $       19                      $        -                                       $        -                                            $        -                          $        -                           $         6                       $       25                      
                                                                                                                                                                                                                                                                                                                                                                     
 Net income attributable to PepsiCo                                                $   6,443                       $       71                                       $     271                                             $     286                           $      (64)                          $       28                        $   7,035                       
                                                                                                                                                                                                                                                                                                                                                                     
 Net income attributable to PepsiCo per common share - diluted                     $    4.03                       $    0.04                                        $    0.17                                             $    0.18                           $   (0.04)                           $    0.02                         $    4.40                       
                                                                                                                                                                                                                                                                                                                                                                     
 Effective tax rate                                                                26.8%                                                                                                                                                                                                                                             26.5%                           
                                                                                                                                                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                                                                                                                                     
 *Core results are financial measures that are not in accordance with GAAP and exclude the above non-core adjustments.  See A-17 through A-19 for a discussion of each of these non-core adjustments.                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                     
 Note - certain amounts above may not sum due to rounding.                                                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                                                                                                                                                                     
 A-11                                                                                                                                                                                                                                                                                                                                                                                


 PepsiCo, Inc. and Subsidiaries                                                                                                                                                                                                                               
 Reconciliation of GAAP and Non-GAAP Information (cont.)                                                                                                                                                                                                      
 Operating Profit by Division                                                                                                                                                                                                                                 
 Quarters Ended December 29, 2012 and December 31, 2011                                                                                                                                                                                                       
 (in millions, unaudited)                                                                                                                                                                                                                                     
                                                                                                                                                                                                                                                
                                        GAAP Measure    Non-Core Adjustments                                                                                                                                                          Non-GAAP Measure  
                                        Reported        Commodity mark-                                                               Restructuring                                                      Pension lump         Core*             
                                                        
to-market net                                                                
and  impairment                                                   
sum settlement                        
                                                        
impact                                                                       
charges                                                           
charge                                
 Operating Profit                        Quarter                           Merger and                                                  Restructuring and                 Quarter  Ended  12/29/2012  
                                         
Ended                            
integration                                                
other charges                                                
                                         
12/29/2012                       
charges                                                    
related to the                                               
                                                                                                                                       
transaction with                                             
                                                                                                                                       
Tingyi                                                       
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                
 Frito-Lay North America                $   1,114       $          -                      $          -                                $        (2)                      $          -                     $          -         $   1,112         
 Quaker Foods North America             200             -                                 -                                           2                                 -                                -                    202               
 Latin America Foods                    386             -                                 -                                           9                                 -                                -                    395               
 PepsiCo Americas Foods                 1,700           -                                 -                                           9                                 -                                -                    1,709             
                                                                                                                                                                                                                                                
 PepsiCo Americas Beverages             735             -                                 -                                           26                                -                                -                    761               
                                                                                                                                                                                                                                                
 Europe                                 313             -                                 4                                           44                                -                                -                    361               
                                                                                                                                                                                                                                                
 Asia, Middle East & Africa             117             -                                 -                                           5                                 13                               -                    135               
                                                                                                                                                                                                                                                
 Division Operating Profit              2,865           -                                 4                                           84                                13                               -                    2,966             
                                                                                                                                                                                                                                                
 Corporate Unallocated                  (652)           61                                -                                           2                                 -                                195                  (394)             
                                                                                                                                                                                                                                                
 Total Operating Profit                 $   2,213       $       61                        $         4                                 $       86                        $       13                       $     195            $   2,572         
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                
                                        GAAP Measure    Non-Core Adjustments                                                                                                                                                          Non-GAAP Measure  
                                        Reported        Commodity mark-                                                                                                 53rd week                        Inventory fair       Core*             
                                                        
to-market net                                                                                                                                   
value                                 
                                                        
impact                                                                                                                                          
adjustments                           
 Operating Profit                        Quarter                           Merger and                    Restructuring and impairment                       Quarter      
                                         
Ended                            
integration                  
 charges                                          
Ended       
                                         
12/31/2011                       
charges                                                                         
12/31/2011  
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                
 Frito-Lay North America                $   1,076       $          -                      $          -                                $       76                        $      (72)                      $          -         $   1,080         
 Quaker Foods North America             239             -                                 -                                           18                                (12)                             -                    245               
 Latin America Foods                    358             -                                 -                                           48                                -                                -                    406               
 PepsiCo Americas Foods                 1,673           -                                 -                                           142                               (84)                             -                    1,731             
                                                                                                                                                                                                                                                
 PepsiCo Americas Beverages             740             -                                 35                                          81                                (35)                             5                    826               
                                                                                                                                                                                                                                                
 Europe                                 226             -                                 106                                         77                                (8)                              -                    401               
                                                                                                                                                                                                                                                
 Asia, Middle East & Africa             157             -                                 -                                           9                                 -                                -                    166               
                                                                                                                                                                                                                                                
 Division Operating Profit              2,796           -                                 141                                         309                               (127)                            5                    3,124             
                                                                                                                                                                                                                                                
 Corporate Unallocated                  (549)           71                                14                                          74                                18                               -                    (372)             
                                                                                                                                                                                                                                                
 Total Operating Profit                 $   2,247       $       71                        $     155                                   $     383                         $    (109)                       $         5          $   2,752         
                                                                                                                                                                                                                                                
                                                                                                                                                                                                                                                
 *Core results are financial measures that are not in accordance with GAAP and exclude the above non-core adjustments.  See A-17 through A-19 for a discussion                                                                                                
 
   of each of these non-core adjustments.                                                                                                                                                                                                                   
                                                                                                                                                                                                                                                              
 A-12                                                                                                                                                                                                                                                         


 PepsiCo, Inc. and Subsidiaries                                                                                                                                                                                 
 Reconciliation of GAAP and Non-GAAP Information (cont.)                                                                                                                                                        
 Operating Profit by Division                                                                                                                                                                                   
 Years Ended December 29, 2012 and December 31, 2011                                                                                                                                                            
 (in millions, unaudited)                                                                                                                                                                                       
                                                                                                                                                                                                  
                                        GAAP            Non-Core Adjustments                                                                                                                  Non-GAAP    
                                        
Measure                                                                                                                                              
Measure    
                                        Reported        Commodity mark-                                            Restructuring                                 Pension lump         Core*       
                                                        
to-market net                                             
and  impairment                              
sum settlement                  
                                                        
impact                                                    
charges                                      
charge                          
 Operating Profit                        Year Ended                        Merger and                               Restructuring and          Year Ended    
                                         
12/29/2012                       
integration                             
other charges             
12/29/2012   
                                                                           
charges                                 
related  to the                         
                                                                                                                    
transaction  with                       
                                                                                                                    
Tingyi                                  
                                                                                                                                                                                                  
                                                                                                                                                                                                  
 Frito-Lay North America                $   3,646       $          -                      $          -             $       38                 $          -       $          -         $   3,684   
 Quaker Foods North America             695             -                                 -                        9                          -                  -                    704         
 Latin America Foods                    1,059           -                                 -                        50                         -                  -                    1,109       
 PepsiCo Americas Foods                 5,400           -                                 -                        97                         -                  -                    5,497       
                                                                                                                                                                                                  
 PepsiCo Americas Beverages             2,937           -                                 -                        102                        -                  -                    3,039       
                                                                                                                                                                                                  
 Europe                                 1,330           -                                 11                       42                         -                  -                    1,383       
                                                                                                                                                                                                  
 Asia, Middle East & Africa             747             -                                 -                        28                         150                -                    925         
                                                                                                                                                                                                  
 Division Operating Profit              10,414          -                                 11                       269                        150                -                    10,844      
                                                                                                                                                                                                  
 Corporate Unallocated                  (1,302)         (65)                              -                        10                         -                  195                  (1,162)     
                                                                                                                                                                                                  
 Total Operating Profit                 $   9,112       $      (65)                       $       11               $     279                  $     150          $     195            $   9,682   
                                                                                                                                                                                                  
                                                                                                                                                                                                  
                                        GAAP            Non-Core Adjustments                                                                                                                  Non-GAAP    
                                        
Measure                                                                                                                                              
Measure    
                                        Reported        Commodity mark-                   Merger and                                          53rd week          Inventory fair       Core*       
                                                        
to-market net                    
integration                                                           
value                           
                                                        
impact                           
charges                                                               
adjustments                     
 Operating Profit                        Year Ended                                        Restructuring            Year Ended            
                                         
12/31/2011                                       
and  impairment         
12/31/2011           
                                                                                           
charges                                       
                                                                                                                                                                                                  
                                                                                                                                                                                                  
 Frito-Lay North America                $   3,621       $          -                      $          -             $       76                 $      (72)        $          -         $   3,625   
 Quaker Foods North America             797             -                                 -                        18                         (12)               -                    803         
 Latin America Foods                    1,078           -                                 -                        48                         -                  -                    1,126       
 PepsiCo Americas Foods                 5,496           -                                 -                        142                        (84)               -                    5,554       
                                                                                                                                                                                                  
 PepsiCo Americas Beverages             3,273           -                                 112                      81                         (35)               21                   3,452       
                                                                                                                                                                                                  
 Europe                                 1,210           -                                 123                      77                         (8)                25                   1,427       
                                                                                                                                                                                                  
 Asia, Middle East & Africa             887             -                                 -                        9                          -                  -                    896         
                                                                                                                                                                                                  
 Division Operating Profit              10,866          -                                 235                      309                        (127)              46                   11,329      
                                                                                                                                                                                                  
 Corporate Unallocated                  (1,233)         102                               78                       74                         18                 -                    (961)       
                                                                                                                   .                                                                              
 Total Operating Profit                 $   9,633       $     102                         $     313                $     383                  $    (109)         $       46           $ 10,368    
                                                                                                                                                                                                  
                                                                                                                                                                                                  
 *Core results are financial measures that are not in accordance with GAAP and exclude the above non-core adjustments.  See A-17 through A-19 for a discussion                                                  
 
   of each of these non-core adjustments.                                                                                                                                                                     
                                                                                                                                                                                                                
 A-13                                                                                                                                                                                                           


 PepsiCo, Inc. and Subsidiaries                                                                                                           
 Reconciliation of GAAP and Non-GAAP Information (cont.)                                                                                  
 (unaudited)                                                                                                                              
                                                                                                                              
                                                                                                                              
 Net Cash Provided by Operating Activities Reconciliation (in millions)                                                           
                                                                                      Year Ended                              
                                                                                      12/29/2012                              
 Net Cash Provided by Operating Activities                                                $               8,479                   
 Capital Spending                                                                         (2,714)                                 
 Sales of Property, Plant and Equipment                                                   95                                      
 Management Operating Cash Flow                                                           5,860                                   
 Discretionary Pension and Retiree Medical Contributions (after-tax)                      1,051                                   
 Merger and Integration Payments (after-tax)                                              63                                      
 Payments Related to Restructuring Charges (after-tax)                                    260                                     
 Capital Investments Related to the PBG/PAS Integration                                   10                                      
 Capital Investments Related to the Productivity Plan                                     26                                      
 Payments for Restructuring and Other Charges Related to                                                                          
 the Transaction with Tingyi                                                              117                                     
 Management Operating Cash Flow excluding above Items                                     $               7,387                   
                                                                                                                              
                                                                                                                              
                                                                                                                              
 Emerging and Developing Markets Net Revenue Growth Reconciliation                                                                
                                                                                      Quarter Ended                           
                                                                                      12/29/2012                              
 Reported Emerging and Developing Markets Net Revenue Growth                              -                       %               
 Impact of Acquisitions and Divestitures                                                  7                                       
 Impact of Foreign Currency Translation                                                   1                                       
 Emerging and Developing Markets Organic Net Revenue Growth                               9                       %                
                                                                                                                              
                                                                                                                              
 Net Cash Provided by Operating Activities Reconciliation (in billions)                                                           
                                                                                      2013 Guidance                           
 Net Cash Provided by Operating Activities                                                $                   ~9                  
 Net Capital Spending                                                                     ~(3)                                    
 Management Operating Cash Flow                                                           ~6                                      
 Certain Other Items*                                                                     ~1                                      
 Management Operating Cash Flow excluding Certain Other Items                             $                   ~7                  
                                                                                                                              
 *Certain other items include discretionary pension and retiree medical contributions, merger and integration                             
 
   payments, payments related to restructuring charges, capital investments related to the Productivity Plan and                        
 
   payments related to tax settlements.                                                                                                 
                                                                                                                              
 Note - certain amounts above may not sum due to rounding.                                                                                
                                                                                                                                          
 A-14                                                                                                                                     


Cautionary Statement  

Statements in this communication that are "forward-looking statements,"
including our 2013 guidance, are based on currently available information,
operating plans and projections about future events and trends. Terminology such
as  "believe," "expect," "intend," "estimate," "project," "anticipate," "will"
or similar statements or variations of such terms are intended to identify
forward-looking statements, although not all forward-looking statements contain
such terms. Forward-looking statements inherently involve risks and
uncertainties that could cause actual results to differ materially from those
predicted in such forward-looking statements. Such risks and uncertainties
include, but are not limited to: changes in demand for PepsiCo's products, as a
result of changes in consumer preferences and tastes or otherwise; changes in
the legal and regulatory environment; PepsiCo's ability to compete effectively;
PepsiCo's ability to grow its business in emerging and developing markets or
unstable political conditions, civil unrest or other developments and risks in
the countries where PepsiCo operates; unfavorable economic conditions in the
countries in which PepsiCo operates; increased costs, disruption of supply or
shortages of raw materials and other supplies; failure to realize anticipated
benefits from our productivity plan or global operating model; disruption of
PepsiCo's supply chain; damage to PepsiCo's reputation; failure to successfully
complete or integrate acquisitions and joint ventures into PepsiCo's existing
operations; PepsiCo's ability to hire or retain key employees or a highly
skilled and diverse workforce; trade consolidation or the loss of any key
customer; any downgrade of our credit ratings; PepsiCo's ability to build and
sustain proper information technology infrastructure, successfully implement its
ongoing business transformation initiative or outsource certain functions
effectively; fluctuations in foreign exchange rates; climate change, or legal,
regulatory or market measures to address climate change; failure to successfully
renew collective bargaining agreements or strikes or work stoppages; any
infringement of or challenge to PepsiCo's intellectual property rights; and
potential liabilities and costs from litigation or legal proceedings.

For additional information on these and other factors that could cause PepsiCo's
actual results to materially differ from those set forth herein, please see
PepsiCo's filings with the SEC, including its most recent annual report on Form
10-K and subsequent reports on Forms 10-Q and 8-K. Investors are cautioned not
to place undue reliance on any such forward-looking statements, which speak only
as of the date they are made. PepsiCo undertakes no obligation to update any
forward-looking statements, whether as a result of new information, future
events or otherwise.

A-15

Miscellaneous Disclosures

In discussing financial results and guidance, the company may refer to certain
non-GAAP measures. Reconciliations of any such non-GAAP measures to the most
directly comparable financial measures in accordance with GAAP can be found in
the attached exhibits, as well as on the company's website at  www.pepsico.com 
in the "Investors" section under "Investor Presentations." Our non-GAAP measures
exclude from reported results those items that management believes are not
indicative of our ongoing performance and how management evaluates our operating
results and trends.      

Glossary   

Acquisitions and divestitures: All mergers and acquisitions activity, including
the impact of acquisitions, divestitures and changes in ownership or control in
consolidated subsidiaries and nonconsolidated equity investees.

Beverage volume: Volume shipped to retailers and independent distributors from
both PepsiCo and our bottlers.    

Core: Core results are non-GAAP financial measures which exclude certain items
from our historical results. In 2012, core results exclude the commodity
mark-to-market net impact included in corporate unallocated expenses, merger and
integration charges in connection with our acquisition of WBD, restructuring and
impairment charges, restructuring and other charges related to the transaction
with Tingyi, a pension lump sum settlement charge and a tax benefit related to a
tax court decision. In 2011, core results exclude the commodity mark-to-market
net impact included in corporate unallocated expenses, merger and integration
charges, restructuring and impairment charges, an extra reporting week and
certain inventory fair value adjustments in connection with our acquisitions of
The Pepsi Bottling Group, Inc. (PBG), PepsiAmericas, Inc. (PAS) and WBD.  See
above for reconciliations of this non-GAAP financial measure to the most
directly comparable financial measure in accordance with GAAP. See
"Reconciliation of GAAP and Non-GAAP Information" for additional information.

Constant currency: Financial results assuming constant foreign currency exchange
rates used for translation based on the rates in effect for the comparable
prior-year period.  In order to compute our constant currency results, we
multiply or divide, as appropriate, our current year U.S. dollar results by the
current year average foreign exchange rates and then multiply or divide, as
appropriate, those amounts by the prior year average foreign exchange rates.

Division operating profit: The aggregation of the operating profit for each of
our reportable segments, which excludes the impact of corporate unallocated
expenses.    

Effective net pricing: Reflects the year-over-year impact of discrete pricing
actions, sales incentive activities and mix resulting from selling varying
products in different package sizes and in different countries.

Management operating cash flow: Net cash provided by operating activities less
capital spending plus sales of property, plant and equipment. See above for a
reconciliation of this non-GAAP financial measure to the most directly
comparable financial measure in accordance with GAAP (operating cash flow).

Management operating cash flow, excluding certain items: Management operating
cash flow, excluding: (1) discretionary pension and retiree medical
contributions, (2) merger and integration payments in connection with the PBG,
PAS and WBD acquisitions, (3) restructuring payments, (4) capital investments
related to the bottling integration, (5) capital investments related to the
productivity plan, (6) payments for restructuring and other charges related to
the transaction with Tingyi and (7) the tax impacts associated with each of
these items, as applicable. This non-GAAP financial measure is our primary
measure used to monitor cash flow performance. See above for a reconciliation of
this non-GAAP financial measure to the most directly comparable financial
measure in accordance with GAAP (operating cash flow).  See "Reconciliation of
GAAP and Non-GAAP Information" for additional information.     

A-16

Mark-to-market gain or loss or net impact: Change in market value for commodity
contracts that we purchase to mitigate the volatility in costs of energy and raw
materials that we consume. The market value is determined based on average
prices on national exchanges and recently reported transactions in the
marketplace.    

Net capital spending: Capital spending less cash proceeds from sales of
property, plant and equipment.   

Organic: A measure that adjusts for impacts of acquisitions, divestitures and
other structural changes and foreign exchange translation.  This measure also
excludes the impact of an extra reporting week in 2011.  In excluding the impact
of foreign exchange translation, we assume constant foreign exchange rates used
for translation based on the rates in effect for the comparable prior-year
period. See the definition of "Constant currency" for additional information.

A-17

Reconciliation of GAAP and Non-GAAP Information (unaudited)  

Division operating profit, core results, core constant currency results and
organic results are non-GAAP financial measures as they exclude certain items
noted below.  However, we believe investors should consider these measures as
they are more indicative of our ongoing performance and with how management
evaluates our operational results and trends.   

Commodity mark-to-market net impact

In the quarter and year ended  December 29, 2012, we recognized  $61 million  of
mark-to-market net losses and  $65 million  of mark-to-market net gains,
respectively, on commodity hedges in corporate unallocated expenses.  In the
quarter and year ended  December 31, 2011, we recognized  $71 million  and  $102
million, respectively, of mark-to-market net losses on commodity hedges in
corporate unallocated expenses. We centrally manage commodity derivatives on
behalf of our divisions. These commodity derivatives include agricultural
products, metals and energy. Certain of these commodity derivatives do not
qualify for hedge accounting treatment and are marked to market with the
resulting gains and losses recognized in corporate unallocated expenses. These
gains and losses are subsequently reflected in division results when the
divisions take delivery of the underlying commodity.  

Merger and integration charges

In the quarter ended  December 29, 2012, we incurred merger and integration
charges of  $9 million  related to our acquisition of WBD, including  $4 million
 recorded in the  Europe  segment and  $5 million  recorded in interest expense.
In the year ended  December 29, 2012, we incurred merger and integration charges
of  $16 million  related to our acquisition of WBD, including  $11 million 
recorded in the  Europe  segment and  $5 million  recorded in interest expense. 
In the quarter ended  December 31, 2011, we incurred merger and integration
charges of  $155 million  related to our acquisitions of PBG, PAS and WBD,
including  $35 million  recorded in the PAB segment,  $106 million  recorded in
the  Europe  segment and  $14 million  recorded in the corporate unallocated
expenses.  In the year ended  December 31, 2011, we incurred merger and
integration charges of  $329 million  related to our acquisitions of PBG, PAS
and WBD, including  $112 million  recorded in the PAB segment,  $123 million 
recorded in the  Europe  segment,  $78 million  recorded in corporate
unallocated expenses and  $16 million  recorded in interest expense. These
charges also include closing costs and advisory fees related to our acquisition
of WBD.   

Restructuring and impairment charges

In the quarter ended  December 29, 2012, we incurred merger and integration
charges of  $86 million  in conjunction with our multi-year productivity plan
(Productivity Plan), including  $2 million  recorded in the QFNA segment,  $9
million  recorded in the LAF segment,  $26 million  recorded in the PAB segment,
 $44 million  recorded in the  Europe  segment,  $5 million  recorded in the
AMEA segment,  $2 million  recorded in corporate unallocated expenses, and
income of  $2 million  recorded in the FLNA segment representing adjustments of
previously recorded amounts.  In the year ended  December 29, 2012, we incurred
restructuring charges of  $279 million, in conjunction with our Productivity
Plan, including  $38 million  recorded in the FLNA segment,  $9 million 
recorded in the QFNA segment,  $50 million  recorded in the LAF segment,  $102
million  recorded in the PAB segment,  $42 million  recorded in the  Europe 
segment,  $28 million  recorded in the AMEA segment and  $10 million  recorded
in corporate unallocated expenses.  In the quarter and year ended  December 31,
2011, we incurred restructuring charges of  $383 million  in conjunction with
our Productivity Plan, including  $76 million  recorded in the FLNA segment, 
$18 million  recorded in the QFNA segment,  $48 million  recorded in the LAF
segment,  $81 million  recorded in the PAB segment,  $77 million  recorded in
the  Europe  segment,  $9 million  recorded in the AMEA segment and  $74 million
 recorded in corporate unallocated expenses. The Productivity Plan includes
actions in every aspect of our business that we believe will strengthen our
complementary food, snack and beverage businesses by leveraging new technologies
and processes across PepsiCo's operations, go-to-market and information systems;
heightening the focus on best practice sharing across the globe; consolidating
manufacturing, warehouse and sales facilities; and implementing simplified
organization structures, with wider spans of control and fewer layers of
management.  

Restructuring and other charges related to the transaction with Tingyi

In the quarter and year ended  December 29, 2012, we recorded restructuring and
other charges of  $13 million  and  $150 million, respectively, in the AMEA
segment related to the transaction with Tingyi.

Pension lump sum settlement charge

In the quarter and year ended  December 29, 2012, we recorded a pension lump sum
settlement charge of  $195 million.

Tax benefit related to tax court decision

In the quarter and year ended  December 29, 2012, we recognized a non-cash tax
benefit of  $217 million  associated with a favorable tax court decision related
to the classification of financial instruments.

53rd  week impact

In 2011, we had an extra reporting week (53rd  week).  Our fiscal year ends on
the last Saturday of each December, resulting in an extra week of results every
five or six years.  The 53rd  week increased net revenue by  $623 million  and
operating profit by  $109 million  in the quarter and year ended  December 31,
2011.

Inventory fair value adjustments

In the quarter ended  December 31, 2011, we recorded  $5 million  of incremental
costs in cost of sales related to hedging contracts included in PBG's and PAS's
balance sheets at the acquisition date. In the year ended  December 31, 2011, we
recorded  $46 million  of incremental costs in cost of sales related to fair
value adjustments to the acquired inventory included in WBD's balance sheet at
the acquisition date and hedging contracts included in PBG's and PAS's balance
sheets at the acquisition date.

Management operating cash flow (excluding certain items)

Additionally, management operating cash flow (excluding the items noted in the
Net Cash Provided by Operating Activities Reconciliation table) is the primary
measure management uses to monitor cash flow performance.  This is not a measure
defined by GAAP.  Since net capital spending is essential to our product
innovation initiatives and maintaining our operational capabilities, we believe
that it is a recurring and necessary use of cash.  As such, we believe investors
should also consider net capital spending when evaluating our cash from
operating activities.  Additionally, we consider certain other items (included
in the Net Cash Provided by Operating Activities Reconciliation table) in
evaluating management operating cash flow which we believe investors should
consider in evaluating our management operating cash flow results.

A-18

2013 guidance
Our 2013 core tax rate guidance and our 2013 core constant currency EPS guidance
exclude the commodity mark-to-market net impact included in corporate
unallocated expenses, merger and integration charges in connection with our
acquisition of WBD, restructuring and impairment charges and a one-time charge
related to the  Venezuela  currency devaluation. Our 2013 organic revenue
guidance excludes the impact of acquisitions, divestitures and other structural
changes. In addition, our 2013 organic revenue and core constant currency EPS
guidance excludes the impact of foreign exchange. We are not able to reconcile
our full-year projected 2013 core tax rate guidance to our full-year projected
2013 reported tax rate or our 2013 core constant currency EPS growth to our
full-year projected 2013 reported EPS growth because we are unable to predict
the 2013 impact of foreign exchange or the mark-to-market net impact on
commodity hedges due to the unpredictability of future changes in foreign
exchange rates and commodity prices. In addition, we are unable to reconcile our
full-year projected 2013 organic revenue growth to our full-year projected 2013
reported net revenue growth because we are unable to predict the 2013 impact of
foreign exchange due to the unpredictability of future changes in foreign
exchange rates. Therefore, we are unable to provide a reconciliation of these
measures.   

A-19


SOURCE  PepsiCo, Inc.


Investor, Jamie Caulfield, Senior Vice President, Investor Relations,
+1-914-253-3035, jamie.caulfield@pepsico.com or Media, Melisa Tezanos, Senior
Director, Media Bureau, +1-914-253-2599, melisa.tezanos@pepsico.com

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