Chair speak report -PEPSICO(Dupont analysis with coke)

DEPARTMENT OF COMMERCE AND MANAGEMENT STUDIES
UNIVERSITY OF CALICUT
CHAIR SPEAK REPORT SUBMISSION
COMPANY: PEPSICO
CEO: INDRA K NOOYI
SUBMITTED TO
Dr.P.MOHAN
FACULTY, DCMS
UNIVERSITY OF CALICUT
SUBMITTED BY
AKSHARA C V
VIDYA KRISHNA
SUBMITTED ON 21-10-2014
INDUSRTY PROFILE

The beverage industry refers to the industry that produces drinks. Beverage production can
vary greatly depending on which beverage is being made. The website
ManufacturingDrinks.com explains that, "bottling facilities differ in the types of bottling lines
they operate and the types of products they can run". Other bits of required information include
the knowledge of if said beverage is canned or bottled, hot-fill or cold-fill, and natural or
conventional. Innovations in the beverage industry, catalyzed by requests for non-alcoholic
beverages, include beverage plants, beverage processing, and beverage packing. The beverage
industry is a major driver of economic growth. A National Council of Applied Economic
Research (NCAER) study on the carbonated soft-drink industry indicates that this industry has
an output multiplier effect of 2.1. This means that if one unit of output of beverage is increased,
the direct and indirect effect on the economy will be twice of that. In terms of employment, the
NCAER study notes that "an extra production of 1000 cases generates an extra employment of
410 man days."
Barbara Murray (2006c) explained the soft drink industry by stating, “For years the
story in the nonalcoholic sector centered on the power struggle between…Coke and Pepsi. But
as the pop fight has topped out, the industry's giants have begun relying on new product
flavors…and looking to noncarbonated beverages for growth.” In order to fully understand the
soft drink industry, the following should be considered: the dominant economic factors, five
competitive sources, industry trends, and the industry’s key factors. Based on the analyses of
the industry, specific recommendations for competitors can then be created.
The soft drink/beverage industry is dominated by two major competitors, PepsiCo and
Coca-Cola. The industry is highly profitable, with an average return on assets rate of 14.70%,
much higher than average return on assets rate for S&P 500 companies of roughly 7.00%. In
spite of market maturity and saturation during recent years in the United States, the growth in
international market is very strong and promising. Both PepsiCo and Coca-Cola had large
market shares, dominated distribution channels, well-established brand names and consumer

loyalty. And both companies possess their own secrete formulas. All of these serve as entry
barriers that make it very difficult for a new company to enter soft drink/beverage industry.
These high entry barriers also protect the profitability of the industry.
Dominant Economic Factors
Market size, growth rate and overall profitability are three economic indicators that can
be used to evaluate the soft drink industry. The market size of this industry has been
changing.Soft drink consumption has a market share of 46.8% within the non-alcoholic drink
industry, Datamonitor (2005) also found that the total market value of soft drinks
reached $307.2 billion in 2004 with a market value forecast of $367.1 billion in 2009. Further,
the 2004 soft drink volume was 325,367.2 million liters (see Table 2). Clearly, the soft drink
industry is lucrative with a potential for high profits, but there are several obstacles to overcome
in order to capture the market share.
The growth rate has been recently criticized due to the U.S. market saturation of soft
drinks. Datamonitor (2005) stated, “Looking ahead, despite solid growth in consumption, the
global soft drinks market is expected to slightly decelerate, reflecting stagnation of market
prices.” The change is attributed to the other growing sectors of the non-alcoholic industry
including tea and coffee (11.8%) and bottled water (9.3%). Sports drinks and energy drinks are
also expected to increase in growth as competitors start adopting new product lines.
Profitability in the soft drink industry will remain rather solid, but market saturation
especially in the U.S. has caused analysts to suspect a slight deceleration of growth in the
industry (2005). Because of this, soft drink leaders are establishing themselves in alternative
markets such as the snack, confections, bottled water, and sports drinks industries (Barbara
Murray, 2006c). In order for soft drink companies to continue to grow and increase profits they
will need to diversify their product offerings.The geographic scope of the competitive rivalry
explains some of the economic features found in the soft drink industry. According to Barbara
Murray (2006c), “The sector is dominated by three major players…Coca-Cola is king of the
soft drink-empire and boasts a global market share of around 50%, followed by PepsiCo at
about 21%, and Cadbury Schweppes at 7%.” Aside from these major players, smaller
companies such as Cott Corporation and National Beverage Company make up the remaining
market share. All five of these companies make a portion of their profits outside of the United
States. The US does not hold the highest percentage of the global market share, therefore
companies need to be able to compete globally in order to be successful. Coca-Cola has a
similar distribution of sales in Europe, North America, and Asia. On the other hand, the
majority of PepsiCo’s profits come from the United. Compared to PepsiCo, Cadbury

Schweppes has a stronger global presence with their global mix). Smaller companies are also
trying to establish a global presence. Cott Corporation is a good example. The saturation of the
US markets has increased the global expansion by soft drink leaders to increase their profits.
The ease of entry and exit does not cause competitive pressure on the major soft drink
companies. It would be very difficult for a new company to enter this industry because they
would not be able to compete with the established brand names, distribution channels, and high
capital investment. Likewise, leaving this industry would be difficult with the significant loss
of money from the fixed costs, binding contracts with distribution channels, and advertisements
used to create the strong brand images. This industry is well established already, and it would
be difficult for any company to enter or exit successfully.
Three leading companies have prominent presence in the soft drink industry. The
leaders include the Coca-Cola Company, PepsiCo, and Cadbury Schweppes. According to the
Coca-Cola annual report (2004), it has the most soft drink sales with $22 billion. The Coca-
Cola product line has several popular soft drinks including Coca-Cola, Diet Coke, Fanta,
Barq’s, and Sprite, selling over 400 drink brands in about 200 nations (Murray 2006a). PepsiCo
is the next top competitor with soft drink sales grossing $18 billion for the two beverage
subsidiaries, PepsiCo Beverages North America and PepsiCo International (PepsiCo Inc.,
2004). PepsiCo’s soft drink product line includes Pepsi, Mountain Dew, and Slice which make
up more than onequarter of its sales. Cadbury Schweppes had soft drink sales of $6 billion with
a product line consisting of soft drinks such as A&W Root Beer, Canada Dry, and Dr. Pepper
(Cadbury Schweppes, 2004).
Financial Analysis
The carbonated beverage industry is a highly competitive global industry as illustrated
in the financial statements. According to John Sicher of Beverage Digest (2005), Coca-Cola
was the number one brand with around 4.5 billion cases sold in 2004. Pepsi followed with 3.2
billion cases, and Cadbury had 1.5 billion cases sold. However, the market share shows a
different picture. Coca-Cola and PepsiCo control the market share with Coca-Cola holding
43.1% and Pepsi with 31.7% (see Graph 1); however these market shares for both Coca-Cola
and PepsiCo have slightly decreased from 2003 to 2004. Coca-Cola’s volume has also
decreased 1.0% since 2003, whereas PepsiCo’s volume has increased 0.4% (see Graph 1). Diet
Coke posted a 5% growth, but Coca-Cola’s other top 10 brands declined (Sicher, 2005).
Overall, Coca-Cola’s market position has declined in 2004. The strategic group map (see Graph
1) also shows the growth of Cott Corp. of 18% which is significantly higher than that of Coca-
Cola and PepsiCo.

The American Beverage Association (2006) states that in 2004, the retail sales for the
entire soft-drink industry were $65.9 billion. Barbara Murray (2006e) analyzed the industry
averages for 2004 and average net profit margin was 11.29%. The current ratio average was
1.11 and the quick ratio average was 0.8. These figures help analyze the financial statements
of the major corporations in the industry. Coca-Cola has seen their net profit margin increase
from 20.7% to 22.1% from 2003 to 2004. According to Coca-Cola’s annual report (2004), 80%
of their sales are from soft drinks; therefore the total sales amount was used for their financial
analysis. These figures show that their profits are increasing, but at a slow rate. This is in line
with what is happening in the soft drink industry. The market is highly competitive and growth
has remained at a stable level. The slight increase in Coca-Cola’s profit margin is most likely
from their new energy drink product line. This industry is currently expanding rapidly, and is
allowing the major beverage companies to increase their profits.
Coca-Cola’s working capital was around $1.1 billion in 2004. This is a large increase
from 2003 at only $500 million. This shows that they have sufficient funds to pursue new
opportunities. However, their current ratio and quick ratio are a cause for concern.
A current ratio of 2 or better is considered good and Coca-Cola’s was 1.102. This number
shows that they may not have enough funds to cover short term claims. The quick ratio for
2004 was at 0.906 and is considered good when it is greater than 1. This illustrates that Coca-
Cola may not have the ability to pay short term debt without selling inventory. These two
numbers are a concern because they are not able to satisfy their short term obligations. The
current and quick ratios are in line with the industry averages, however (Murray, 2006e), Coca-
Cola needs to improve these ratios in order focus on long-term plans (Coca-Cola Company,
2004).
PepsiCo’s financial statements cannot be analyzed for only the soft drinks industry
because they do not distinguish between businesses. Over half their profits are from snacks or
other beverage items; however there are sales and profit figures for their two beverage
subsidiaries. These sales figures grew from almost $16.5 billion in 2003 to $18 billion in 2004
(Pepsi Co. Inc., 2004). Their operating profit margin also increased 1% from 2003 to 2004.
This shows that beverage profits are increasing for them, but also at a slow rate. The increase
could be due to the increase in market share that the Pepsi products gained in 2004 (Sicher
2004). The PepsiCo. Annual Report (2004) stated that beverage volume increased 3% in 2004,
but was driven by the high growth of the non-carbonated beverage industry.
Cadbury’s current and quick ratios are very similar to those of Coca-Cola. The current
ratio and quick ratio for Cadbury Schweppes for 2004 were both 0.917. Again,

the current ratio should be 2 or more, and the quick ratio should be over 1. This illustrates that
Cadbury also has difficulty paying short term debt and claims. Cadbury’s net profit margin has
increased by 0.7% from 2003 to 2004. This can be attributed to their market share growth in
2004 of 0.2% (Sicher, 2005). One ratio that is concerning is their debt to equity ratio for 2004.
They have almost two times as much debt as they do to equity, which means that their funds
are mainly provided by creditors as opposed to owners. This is concerning because they owe a
lot of money, and must make a decent profit to be able to pay it off. The industry average for
debt to equity is 81%, and Cadbury is far from that number (2006e). Also, Cadbury has a
negative working capital for both 2003 and 2004, meaning they have more liabilities than
assets. This shows that they do not have any funds to pursue new opportunities, as their current
assets are being used to pay off liabilities (Cadbury, 2004).
Overall, the financial statements of the three top competitors in the soft drink industry
show that the industry is highly competitive and has little growth. Net profit margins increased
for all three corporations, however only at a small rate. It also seems that all three companies
lack sufficient current and quick ratios, but are all within a reasonable range of the industry
average (2006e). This may be due to expanding their product lines to include energy drinks
and non-carbonated beverages in order to increase profits and diversify their business. The soft
drinks market is now in the matured stage of the life cycle. Growth in the industry has remained
stagnant, and the financial statements of the major corporations in the industry illustrate that
their sales and income are following this trend.
The companies are in good financial positions; gross profits and net profit margins are
continuing to increase each year. The leverage and activity ratios are all within reasonable
range. However, one area all three corporations need to improve on is the liquidity ratios. Their
quick and current ratios are low and need to be increased so they are able to meet short-term
obligations.
Industry Changes
The soft drink industry is affected by macro environmental factors of the industry that
will lead to change. First, the entry/exit of major firms is a trend in the industry that will likely
lead to change. More specifically, merger and consolidation has been prevalent in the soft
drinks market, causing some firms to exit the industry and then re-enter themselves. Several
leading companies have been looking to drive revenue growth and improve market share
through the increased economies of scale found through mergers and acquisitions. One specific
example is how PepsiCo acquired Quaker Oats, who bought Gatorade which will help expand

PepsiCo’s energy drink sector (Datamonitor, 2005). This trend has increased competition as
firms’ diversification of products is increasing. A second trend in the macro environment is
globalization. With the growing use of the internet and other electronic technologies, global
communication is rapidly increasing. This is allowing firms to collaborate within the country
market and expand into world markets. It has driven competition greatly as companies strive
to be first-movers. Specifically, the global soft
drink market’s compound annual growth rate (CAGR) is expected to expand to 3.6% from
2004 to 2009 (Datamonitor, 2005). Third, changing societal concerns, attitudes, and lifestyles
are important trends. In the United States and Europe, people are becoming more concerned
with a healthy lifestyle.
“Consumer awareness of health problems arising from obesity and inactive lifestyles
represent a serious risk to the carbonated drinks sector” (Datamonitor, 2005, p. 15). The trend
is causing the industry’s business environment to change, as firms are differentiating their
products in order to increase sales in a stagnant market. Thus, the long-term industry growth
rate, the fourth trend, shows low growth in recent years. Since 2000, the CAGR is 1.5 per cent
(Datamonitor, 2005). The low growth rates are of concern for soft drink companies, and several
are creating new strategies to combat the low rates. This leads to the fifth trend of growing
buyer preferences for differentiated products. Because soft drinks have been around since as
early as 1798 (American Beverage Association, 2006), buyers want innovation with the
products they buy. In today’s globalizing society, being plain is not good enough.
According to Barbara Murray (2006c), “The key for all of these beverage companies is
differentiation. The giants have new formulations and appearances. Whatever the strategy, be
it a new color, flavor, or formula, companies will strive to create the greatest brand awareness
in the minds of the consumer in the hopes of crowding out its competitors.” Thus, the last trend,
product innovation, is necessary to combat buyers need for a variety of tastes.
Key Success Factors
Key factors for competitive success within the soft drink industry branch from the
trends of the macroenvironment. Primarily, constant product innovation is imperative. A
company must be able to recognize consumer wants and needs, while maintaining the ability
to adjust with the changing market. They must keep up with the changing trends (Murray,
2006c).Another key factor is the size of the organization, especially in terms of market share.
Large distributors have the ability to negotiate with stadiums, universities and school systems,
making them the exclusive supplier for a specified period of time. Additionally, they have the

ability to commit to mass purchases that significantly lower their costs. They must implement
effective distribution channels to remain competitive. Taste of the product is also a key factor
for success. Furthermore, established brand loyalty is a large aspect of the soft drink industry.
Many consumers of carbonated beverages are extremely dedicated to a particular product, and
rarely purchase other varieties. This stresses the importance of developing and maintaining a
superior brand image. Price, however, is also a key factor because consumers without a strong
brand preference will select the product with the most competitive price. Finally, global
expansion is a vital factor in the success of a company within the soft drink industry. The
United States has reached relative market saturation, requiring movement into the global
industry to maintain growth (Datamonitor, 2005).
Recommendations
Looking towards the future, the most important recommendation to Coca-Cola is
continuing product innovation and expansion of their product line. The soft-drinks industry is
fully saturated with competitors. Also, the industry is no longer expanding, and market share
is actually decreasing as more consumers are looking to healthier options. By continually
introducing new products, Coca-Cola will be able to increase their profits and allow the
company to continue to grow. Also, having a diverse product line will make the corporation
very stable, which is appealing to investors and creditors.
A second recommendation would be to sustain or increase the global market share.
Coca-Cola is very well-established globally, and is the global soft-drinks leader. This is very
important to sustain because it is the source of the majority of their profits. If they lose global
market share, their profits will decline dramatically. A final recommendation for Coca-Cola is
to maintain and try to increase their brand loyalty. Diet Coke has the second highest brand
loyalty of all the soft-drink competitors’ brands, and solid advertising campaigns will help
maintain the brand loyalty. They can also strive to obtain higher brand loyalty in all other
brands, not solely Diet Coke. The brand loyalty is important because it will allow Coca-Cola
to sustain profits and maintain their market share.

PepsiCo CEO Indra K. Nooyi
“Indra Nooyi is one of the most respected and inspiring CEOs in the world. She has
guided PepsiCo to incredible heights and built a culture of respect, collaboration and success.
Her business and life lessons are both inspirational and transferable to the challenges that
bowling center business owners face every day,” said Steve Johnson, executive director of
BPAA. “Indra and PepsiCo have also been tremendous friends to bowling. The partnership
that we’ve enjoyed with PepsiCo has been so important in fueling our industry’s continued
national growth, while also helping to drive the success of the thousands of small business
owners who make up our industry.”
Nooyi, who was named PepsiCo’s CEO in 2006, leads a $65 billion global food and
beverage powerhouse with a portfolio that includes 22 brands that generate more than $1 billion
each in annual retail sales. The company’s main businesses – Quaker, Tropicana, Gatorade,
Frito-Lay and Pepsi-Cola – make hundreds of snacks and beverages sold around the world.
Nooyi has been frequently ranked by such media as Forbes, Fortune, Wall Street Journal,
TIME and U.S. News and World Report as one the most influential and powerful people in
business. She is recognized for consistently delivering strong business and financial results,
while also taking steps to set the company on a course toward sustainable, long-term growth.
A message from PepsiCo’s President & CFO, Indra Nooyi
I recently had the privilege of speaking to the 2005 graduating class of Columbia
University’s Business School in New York City. Recognizing that these talented new leaders
will influence both America and the world, I tried to provide some advice as they embark on
their careers. I chose to speak about the powerful role that America, and we as Americans, hold
in the world today. I hoped to encourage these graduates to be sure they make a positive and
personal difference as representatives of our great country.
In my comments, I used the analogy of a human hand to illustrate that people in
countries around the globe need to join together to make the world work in harmony – just as
all the fingers of a hand work together. It is an illustration that I learned when I was a student,
and that I have shared with others on many different occasions. As part of this illustration, I
assigned five of the world’s continents to the different fingers and thumb. I refer to North
America and particularly the U.S. as the middle finger because it is the longest and anchors

every function the hand performs. The middle finger also is key to all the fingers working
together effectively. That is how I view America’s place of importance in the world. The point
of my analogy was to emphasize America’s leadership position. Equally critical is the need for
each of us as citizens to take a constructive role in whatever we choose to do in life to ensure
the U.S. continues as the world’s “helping hand.”
Unfortunately, my remarks at Columbia University were misconstrued and depicted in
a different context as unpatriotic. Although nothing could be further from the truth, I regret any
confusion or concern that I may have inadvertently created. As I shared with the audience at
Columbia, this country that I am proud and honored to call home is a “promised land” that I
love dearly. I would never say or do anything to detract from our great nation and its people
who have done so much for so many, including myself.
Thank you for your understanding and allowing me to set the record straight.
Indra K. Nooyi President & CFO, PepsiCo
Q. You come home one day as president of the company, just appointed, and your mom
is not that impressed. Would you tell that story?
This is about 14 years ago. I was working in the office. I work very late, and we were in the
middle of the Quaker Oats acquisition. And I got a call about 9:30 in the night from the existing
chairman and CEO at that time. He said, Indra, we're going to announce you as president and
put you on the board of directors... I was overwhelmed, because look at my background and
where I came from—to be president of an iconic American company and to be on the board of
directors, I thought something special had happened to me.
Why Women Still Can't Have It All
So rather than stay and work until midnight which I normally would've done because I had so
much work to do, I decided to go home and share the good news with my family. I got home
about 10, got into the garage, and my mother was waiting at the top of the stairs. And I said,
"Mom, I've got great news for you." She said, "let the news wait. Can you go out and get some
milk?" I looked in the garage and it looked like my husband was home. I said, "what time did
he get home?" She said "8 o'clock." I said, "Why didn't you ask him to buy the milk?" "He's
tired." Okay. We have a couple of help at home, "why didn't you ask them to get the milk?"

She said, "I forgot." She said just get the milk. We need it for the morning. So like a dutiful
daughter, I went out and got the milk and came back.
I banged it on the counter and I said, "I had great news for you. I've just been told that I'm going
to be president on the Board of Directors. And all that you want me to do is go out and get the
milk, what kind of a mom are you?" And she said to me, "let me explain something to you.
You might be president of PepsiCo. You might be on the board of directors. But when you
enter this house, you're the wife, you're the daughter, you're the daughter-in-law, you're the
mother. You're all of that. Nobody else can take that place. So leave that damned crown in the
garage. And don't bring it into the house. You know I've never seen that crown."
Q. What's your opinion about whether women can have it all?
I don't think women can have it all. I just don't think so. We pretend we have it all. We pretend
we can have it all. My husband and I have been married for 34 years. And we have two
daughters. And every day you have to make a decision about whether you are going to be a
wife or a mother, in fact many times during the day you have to make those decisions. And you
have to co-opt a lot of people to help you. We co-opted our families to help us. We plan our
lives meticulously so we can be decent parents. But if you ask our daughters, I'm not sure they
will say that I've been a good mom. I'm not sure. And I try all kinds of coping mechanisms.
In 2009, PepsiCo made a promise. For the next 10 years, we promised to deliver sustainable
growth by investing in a healthier future for our consumers, our planet, our associates and
external partners and the communities we serve.
This promise is the cornerstone of our 'Performance with Purpose' mission: our belief that our
financial success Performance must go hand-in-hand with our social and environmental
responsibilities our Purpose. We call this 'The Promise of PepsiCo', a manifesto that includes
ambitious global goals 47 commitments in all that will guide our company this decade.
As the world's second-largest food and beverage business, we have a responsibility to help
devise solutions to key global challenges where we can have the most impact. We categorize
these responsibilities in three distinct areas: Human Sustainability addressing diverse and
complex global nutrition needs; Environmental Sustainability being a good steward of our
planet's natural resources; and Talent Sustainability creating meaningful employment

opportunities in the communities where we operate and developing our associates while
fostering a diverse and inclusive workplace.
Our strategy for long-term growth is an integral part of our 'Performance with Purpose' mission.
In fact, we design our business plans to ensure that the work we do and the investments we
make have a positive impact on society that's why our 2009 corporate citizenship report is titled
Performance with Purpose: Investing in Sustainable Growth.
Challenging economic times are still ahead, but we will not reduce our commitment to
responsible business, and we are taking action to ensure sustainable, profitable growth across
all our businesses. Despite many challenges, we see enormous opportunity for continued
growth.
One way is through the game-changing merger transaction with our two anchor bottlers. This
merger allows us to create a lean, agile organization with an optimized supply chain, a flexible
go-to-market system and enhanced innovation capabilities. Another critical path to growth is
to continue to expand our R&D capabilities and increase investments to develop more
nutritious products that taste great and add positive nutrition such as fiber, vitamins and
calcium, among other benefits.
Our 'Performance with Purpose' mission guides the way we conduct ourselves as we continue
to seek valuable counsel from key external stakeholders like Ceres, the Carbon Trust and global
experts in the nutrition, science and global health policy communities. Together, these actions
will help us maintain our long-term commitment to the overall sustainability of our company.

MAY 07 2014 /1.00 PM, PEP – PepsiCo Annual Shareholder Meeting
C O R P O R A T E P A R T I C I P A N T S
Indra Nooyi PepsiCo, Inc. - Chairman, CEO
Larry Thompson PepsiCo, Inc. - EVP, Government Affairs, General Counsel and Corporate
Secretary
C O N F E R E N C E C A L L P A R T I C I P A N T S
James Mackie - Shareholder
Tamara Williams - Representative of Shareholder
James Kiszka Computershare - Senior Relationship Manager
P R E S E N T A T I O N
Unidentified Company Representative
Before we begin, please take note of our cautionary statement. This presentation
includes forward-looking statements based on currently available information. Forward-
looking statements inherently involve risks and uncertainties that could cause our actual results
to differ materially from those predicted in such forward-looking statements.
Statements made in this presentation should be considered together with the cautionary
statements and other information contained in our most recent earnings release and in our most
recent periodic reports filed with the SEC.
Also, to find reconciliations of non-GAAP measures that we may use when discussing
PepsiCo's financial results, please refer to the "Investors" section of PepsiCo's website under
the "Events and Presentations" tab as well as our 2013 annual report.
And now, please welcome the Chairman and Chief Executive Officer of PepsiCo, Indra
Nooyi.
Indra Nooyi - PepsiCo, Inc. - Chairman, CEO
Good morning everyone and welcome. On behalf of PepsiCo's Board of Directors and
our senior leadership team, welcome to PepsiCo's 2014.
Annual Meeting of Shareholders.
Whether you're here in New Bern, North Carolina or listening via webcast, I want to
thank you for joining us this morning.
You know, this is our third straight year of coming home to New Bern, the birthplace
of Pepsi-Cola for our shareholder meeting. And for us, there are few things more humbling and
more inspiring than the special connection between PepsiCo and New Bern. From the moment

we arrive in town, we can feel a sense of pride. Our shareholders, here and across the country,
are proud to own a part of PepsiCo.
It's a pride in knowing that this town, this country and PepsiCo all hold the same values
dear. Values like ingenuity, dependability and accountability, the cornerstones of great
communities and great institutions alike. They are the values we demonstrate every day and
they are the values that Caleb Bradham demonstrated when, after closing up his drugstore in
the corner of Middle and Pollock for the day, he would go to work perfecting his recipe for
Brad's Drink, which would later become Pepsi-Cola.
You know, we outgrew that drugstore but we have not outgrown our values. And as we
continue to transform and grow, they will guide us and help us achieve the strong and consistent
performance that has defined PepsiCo for decades.
It's in that spirit that I want to take a few minutes to discuss our performance from last
year and the steps we've taken to position ourselves to continue delivering the sustainable
performance you, our shareholders, have come to expect. Before we officially get underway,
I'd like to take a moment and recognize some special attendees.
First, I'd like to thank Mr. James Mackie as well as Ms. Tamara Williams, who's here
on behalf of Mr. Kenneth Steiner, for being here today. Each of them will be presenting a
shareholder proposal this morning.
And it's wonderful to have a number of our partners and members of the PepsiCo family
here in attendance today. I'd like to take a special welcome to my predecessor, our former
chairman and CEO, Steve Reinemund, who's finishing a fantastic stint as the Dean of the Wake
Forest School of Business. Steve Reinemund. Where is Steve? Steve. Welcome.
And it's a great honor for all of us to have Jan Calloway join us this morning, whose
late husband Wayne Calloway, a proud native of North Carolina.
I may add, who also served as PepsiCo Chairman and CEO. Welcome, Jan. Where's
Jan? Hi, Jan.
We're also very happy to be joined by Jeff Minges, the President and CEO of Minges
Bottling Group, a respected local business leader and our franchise partner for a number of
counties here in North Carolina. Jeff is joined by his son Miles. Jeff and Miles, welcome to the
shareholder meeting.
And I want to extend a very special welcome to members of the Brown family. They're
long-time PepsiCo shareholders who've also been important distributors for PepsiCo in the
Wilmington, North Carolina area over the years. I want to say thank you to Debbie, Bill, Pam,
Allison, Amy and Clint for coming, the Brown family. Where are you? Welcome.

Now I'd like to recognize our Board Members in attendance today who will each stand
as his or her name is read. Shona Brown, George Buckley, Ian Cook, Dina Dublon, Ray Hunt,
Alberto Ibarguen, Sharon Percy Rockefeller, Lloyd Trotter, Dan Vasella, Alberto Weisser, and
our newest Board Member, former chairman and CEO of the Financial Times Group, Rona
Fairhead. Rona welcome to your first PepsiCo shareholder meeting. One member of the board,
Jim Schiro, is unable to attend today's meeting.
Next, I'd like to introduce you to the members of the PepsiCo leadership team who are
in the audience today. Will each member please stand as I say his or her name? Here on stage
with me is Larry Thompson, Executive Vice President, Government Affairs, General Counsel
and Corporate Secretary.
We're also joined by Zein Abdalla, President of PepsiCo; Al Carey, Chief Executive
Officer of PepsiCo Americas Beverages; Brian Cornell, Chief Executive Officer of PepsiCo
Americas Foods; Hugh Johnston, Executive Vice President, Chief Financial Officer; Jim
Wilkinson, Executive Vice President of Communications; Mehmood Khan, Executive Vice
President, Chief Scientific Officer, Global Research and Development; and Cynthia Trudell,
Executive Vice President of Human Resources and the Chief Human Resources Officer. Thank
you all for joining us today.
And now let me take a few minutes to talk about the state of PepsiCo, where we are
today and where we are headed. Since the transformation of PepsiCo began in 2009, we have
operated in service of two goals: to deliver top tier financial performance and to create
long-term sustainable growth. I'm proud to say that in 2013 we met both of these goals. We
performed as we transformed.
Last year we met or exceeded each and every one of the financial goals we announced
to you, our shareholders, at the beginning of the year. Our organic revenue grew 4%, core
constant currency earnings per share grew 9%, core gross margins improved by 90 basis points
and core operating margins improved by 40 basis points, even while we increased investment
in the company.
We captured more than $900 million of productivity, exceeding our target, and keeping us on
track to deliver the three-year, $3 billion productivity program that we set for ourselves for the
years 2012 to 2014.
In fact, this success gave a confidence to extend this goal of $1 billion in annual
productivity savings for five years beyond the 2014 timeframe. Core net return on invested
capital improved 110 basis points, 60 points, 60 basis points, ahead of our target. And free cash
flow excluding certain items was strong at $8.2 billion.

And finally, we returned $6.4 billion of cash to shareholders through dividends and
share repurchases. Returning cash to shareholders remains a top priority. Yesterday, our board
of directors increased our annual dividend by 15% to an annual rate of $2.62 per share, which
is our 42nd consecutive annual dividend increase. And in 2014, we expect to increase total cash
returns by 35%, with $5 billion in share repurchases and $3.7 billion in dividends. You know,
2013 was a great year for us, not just for our immediate successes, because it showed that the
investments we've made to future-proof the company are beginning to pay off.
Our actions in 2013 were a continuation of six concrete steps we've taken over the past
five years to position ourselves for the long-term. First, we invested to enhance the equity of
our portfolio of $22 billion brands.
And because of those stepped up investments, today we have 9 of the 40 largest
packaged good trademarks in the United States, which is more than any other company out
there; 9 of the top 50 packaged food and soft drink brands in Russia, again, number one; 7 of
the top 50 in Mexico; and 6 of the top 50 in the United Kingdom.
And a great example of our brand push is Pepsi's global "Live for Now" campaign,
which is generating worldwide buzz. And this year it's getting even bigger with new spots
featuring soccer superstars like Lionel Messi with Pepsi and Lay's. So that's the brands.
The second thing we did was fine-tune and ramped up our innovation machine. And
2013 was PepsiCo's best year for innovation. We had nine of the top 15 new food and beverage
product introductions across all measured channels in the United States, including Mountain
Dew Kickstart, Tostitos Cantina Tortilla Chips, Starbucks Ice Coffee, Lipton Pure Leaf Tea,
Muller Quaker Yogurt and Tropicana Farmstand, so great year for innovation.
Third, we continued to invest in the developing and emerging markets that are critical
to PepsiCo's long-term growth. Despite significant volatility in many key regions, our
developing and emerging markets posted 10% organic revenue growth. With particularly
strong performances in China, Pakistan, Saudi Arabia, Mexico, Brazil and Turkey. So
investments in these markets are beginning to pay off.
Fourth, we increased investment in, and expanded our portfolio of, nutritious products,
which in 2013 accounted for approximately 20% of PepsiCo's total revenue. Building from
positions of strength across four platforms and brands - Quaker, Tropicana, Gatorade and
Naked Juice - we've developed new products that will unlock growth opportunities, categories
such as dairy, hummus, baked grain snacks are all showing special promise.
Fifth, we reinforced PepsiCo's global go-to-market capability, which is a critical
strategic advantage for us. We increased number of routes in key markets, we improved our in-

store presence and put mobile technology in the hands of our sales team. And sixth, we
redoubled and refocused our efforts on talent development. And we prioritized comprehensive
leadership training for our leadership positions.
And these are some of the reasons why our 2013 Organization Health Survey scores
are impressive, 89% of our professional executive populations responded that they are proud
to work for PepsiCo, which is well above the industry standard. All these efforts have been
financially rewarding for PepsiCo and our shareholders too.
Over the past decade our net revenue compound annual growth rate was 9%, earnings
per share over the past decade has grown at 8% and through year-end 2013 we returned $57
billion to shareholders.
Today our operating margins stands at 15% which puts us in the top tier of our food
and beverage peer group. From 2000 to year-end 2013 PepsiCo's cumulative total shareholder
returns outpaced the S&P 500 on an annualize basis by 170 basis points. And these numbers
tell the story of a company that's been a model of durability, delivering for our consumers, our
customers and most importantly our shareholders. We are poised to win now and for years to
come.
But that future success is continued in our ability to capitalize on the trend shaping the
marketplace, and there are five trends in particular I want to spend a moment highlighting.
First, as we look out over the next 5 to 10 years, growth in developing and emerging
markets will continue to outpace the growth in developed markets. Additionally, by 2030,
experts estimate that another 3 billion people might join the middle class, all in developing and
emerging markets.
These are both enormous opportunities we're committed to maximizing by further
developing our people, skills and tools.
Second trend, the ongoing consumer shift towards more nutritious products will
continue to accelerate. You know, we anticipated these trends early, we took the necessary
steps to transform our portfolio. And in 2014 and beyond, we will keep innovating to deliver
the convenient and functional nutritious snacks and beverages that consumers demand today,
while never sacrificing on taste.
Third, digital technology will disrupt business at every point in the value chain. The
way we interact with retailers, shoppers and consumers is changing dramatically. To keep up
with the technological advancement and adapt to the dynamic digital landscape, we are laser
focused on evolving all points where technology touches our business.

Fourth, geopolitical and social instability is now the norm and it requires new levels of
vigilance against threats to our people and supply chains. Fortunately our PepsiCo local teams
have an intimate understanding of the communities and how to do business in volatile
environments.
And finally we are facing increasingly extreme weather affecting everything from
commodity prices to our ability to operate during extreme weather events. While our size and
scale allows us to manage the risks, our R&D team is working on developing formulations for
new products to be able to cope with changes in raw material availability and prices.
We believe these five mega-trends make up the "new normal." And with our focus,
investment strategy, product diversity, operating model and people, we believe PepsiCo is well
prepared to deliver great returns going forward. As we look to the future, we believe one of
PepsiCo's important strategic advantages as we address global challenges is the power of our
combined food and beverage portfolio. Our consumers can wake up to a breakfast of Quaker
Real Medleys and Trop 50, enjoy Pepsi Max and Sun Chips at lunch and unwind in the
afternoon with Stacey's Pita Chips, Sabra hummus, and Lipton Iced Tea after work. No matter
the time of day or the occasion, PepsiCo has a product for you.
Our combined portfolio along with our scale and relationships with retailers allows us
to create in-store destinations featuring a wide range of PepsiCo products. You know, for
example during the fourth of July season last year, the combination of Pepsi and Lay's at one
major retail chain drove about a 40% increase in display inventory.
Our relationships with retailers also help us grow complementary categories. For
example, an existing PepsiCo beverage business in a market can enable us to enter the snacks
business in that market. And this advantage extends to food service as well.
Look at one of our biggest wins last year, Buffalo Wild Wings. We will now serve our
products at more than 1,000 Buffalo Wild Wings locations because of the combined strength
of our food and beverage portfolio. And for structural standpoint, a combined business model
has driven numerous cost benefits saving us approximately $1 billion a year by integrating
everything from procurement, to go-to-market, to human resources.
And because PepsiCo is a food and beverage company, we have the ability to find
growth and efficiencies in places that competitors just don't have access to. And this
combination has proven successful in the past and is positioned to do so in the future.
To ensure our continued success, we must keep an eye on the long term and take actions
that result in sustainable growth. And I believe the way we do that is by continuing to
demonstrate our commitment to Performance with Purpose. This means that we at PepsiCo

will continue to uphold our promise to provide a range of products from treats to healthy eats,
minimize our impact on the environment, provide a safe and inclusive workplace for our
employees globally and respect, support and invest in local communities in which we operate.
Performance with Purpose is how we "future-proof" our company at a time of increased
unpredictability and competition, and today it's more important than ever. By staying true to
Performance with Purpose, we will uphold our promises to shareholders and stakeholders and
remainstrong not just for future quarters, but for future generations.
. You know, I began this morning talking about values. Value that define a community
and a company. As shareholders, these values are what you are investing in when you invest
in PepsiCo.
So when we tell you that our goals are to give you the highest quality, best tasting
products, contribute to the communities in which we operate, and focus on principled, long-
term success for the benefit of all of our shareholders and all those who have a stake in PepsiCo,
you'll know that it's not just talk, it's the core way we do business.
When you invest in PepsiCo, you're investing in a lasting American born and bred
institution that is now global. When PepsiCo is strong, you are strong, because after all PepsiCo
is your company and these values are your values.
So to all of PepsiCo's shareholders - you are stewards of a great legacy and a great
company. A company committed to responsible, sustainable growth. A global company rooted
in fundamental great American values. And a company that will work every day to do right by
its consumers, customers, shareholders and communities just like this one.
Thank you very much for your time.
Now I'll turn the meeting over to Larry Thompson. Larry?
Larry Thompson - PepsiCo, Inc. - EVP, Government Affairs, General Counsel and Corporate
Secretary
Thank you Madam Chairman. I am pleased to report that a majority of the votes entitled
to be cast at this meeting are represented today in person or by proxy and therefore we have
the necessary quorum under state law and our bylaws. If anyone has not yet voted and would
like to do so by ballot during the meeting, please raise your hand. We have staff assistants who
will distribute ballots to you.
Now these ballots must be completed and turned in before the Inspectors of Election
announce the closing of the polls. If you are a holder of convertible preferred stock, please tell
our staff assistant so he or she can give you the appropriate ballot. Please remember to vote on
all items, not just those on which you may want to change an earlier vote.

Please also remember to print your name clearly and sign your ballot. If you have
previously voted by proxy, you do not need to vote today unless you wish to change your vote.
If you have a legal proxy, please hand it in with your ballot.
Now the ballots and proxies will be held in the possession of our Inspectors of Election,
James Kiszka and Sharon Tucker-Lockett, from Computershare Trust Company, who have
previously taken their oath as Inspectors of Election at this meeting. Mr. Kiszka and Ms.
Tucker-Lockett will you please stand and be recognized. Thank you.
Consistent with state law and our bylaws, a list of the shareholders entitled to notice of
this meeting is available for inspection at the registration desk throughout the meeting.
Now that we have a quorum, I declare this meeting to be duly convened for purposes
of transacting such business as may properly come before it in accordance with state law and
our bylaws. It is now in order to proceed with the meeting. Will the Inspectors of Elections
please open the polls?
James Kiszka - Computershare - Senior Relationship Manager
I hereby declare the polls to be open.
We have six agenda items this morning: the first is the election of directors, the second
is the ratification of the appointment of KPMG LLP as the company's independent registered
public accountants for fiscal year 2014.
The third is the advisory approval of executive compensation, the fourth is the approval
of the material terms of the performance goals of the PepsiCo, Inc. Executive Incentive
Compensation Plan, and two shareholder proposals will then be voted on if properly presented.
In proceeding with the meeting, we will introduce all agenda items and then we will
open the floor to questions on just the agenda items. I ask you to hold all questions on our
agenda items until we actually open the floor and to please direct your questions only to me.
The proponents of the shareholder proposals, or their representatives, will have five minutes to
present each shareholder proposal. Because we did not receive notice in accordance with our
bylaws of any additional matters to be considered, no other proposals or nominations may be
introduced at this meeting.
After we address any questions regarding the agenda items, we will collect all the
ballots and then ask our Inspectors of Election to tabulate the voting results. And at the end of
the meeting, we will open the floor to general questions. You should have a copy of the rules

of procedure that we will follow in the conduct of the meeting. And we please appreciate your
cooperation.
I've asked Larry Thompson to address any issues that arise under those rules. So let's
begin with our first item, which is the election of directors. I place before the meeting to serve
as directors for the coming year the 13 individuals whose names and biographies appear in our
proxy statement. Our board recommends a vote "for" each of the nominees for director.
We now turn to our second agenda item, the ratification of the appointment of KPMG as our
independent registered public accountants for 2014, which I place before the meeting. Doug
Ruud and Alan Colaco are here with us representing KPMG and will be available to answer
questions or make a statement, if they would like to do so, later in the meeting. Our board
recommends a vote "for" the ratification of the appointment of KMPG as our independent
registered public accountants for 2014.
The third agenda item is the advisory vote to approve the compensation of the executive
officers named in our proxy statement, which I place before the meeting. Our board
recommends a vote "for" the advisory resolution to approve executive compensation.
We now come to our fourth agenda item, the approval of the material terms of the
performance goals of PepsiCo Inc. Executive Incentive Compensation Plan, which I place
before the meeting. Our board recommends a vote "for" approval of this agenda item.
We'll now move on to the shareholder proposals in the order in which they appear in
the agenda. Each of the shareholders or their representatives will present their respective
proposals.
Now we turn to our first shareholder proposal submitted by Mr. James W. Mackie
regarding a political contributions policy. Would Mr. Mackie please introduce himself and the
proposal?
James Mackie - - Shareholder
Madam Chairman and directors, my name is James W. Mackie, I reside in Bryn Mawr,
Pennsylvania. Madam Chairman, directors and officers, thank you for the opportunity to
present my proposal concerning political contributions. I move the adoption of the proposal
concerning political contributions as stated in the proxy statement. I bring this proposal strictly
on my own and do not represent any group, any organization or political party. In the simplest
terms, I'm requesting that the board of directors prepare a clear and easily understood policy
stating the circumstances under which PepsiCo will make political contributions in cash or in
kind and submit the proposal to the stockholders for approval.

After the stockholder approval, no political contributions would be permitted unless
they were in accordance with the corporate policy. In the current political environment, we
have seen candidates at all levels spend enormous sums of money to win an election. This has
been spent to elect individuals who support political and, in particular, positions that may or
may not in the best interest of the public.
The use of super PACs and the large individual contributors has raised the stakes in the
pay to play political arena and often the super PAC donors are not identified until after the
election is over. The unfettered ability of a corporation or organization to contribute large sums
to political campaigns can only lead to a lowering of the quality of governance and regulation.
And that would be detrimental to both PepsiCo and the public.
I chose to present my proposals to PepsiCo because I hold the current management in
high esteem. And believe that Pepsi can be a leader in corporate governance with the
publication of a corporate policy setting forth clear parameters for making political
contributions. This would also benefit the directors and management if and when pressured by
political groups to make a significant contribution.
The current PepsiCo policy on political contribution relies on the integrity of the current
management. With changing management in the future and without a stated corporate policy,
stockholders might find PepsiCo funding candidates with whom they have severe differences
of opinion.
Having been employed by a large corporation, where I worked with state and federal
regulatory agencies and with the state legislature, I recognize a need for business to provide
honest and accurate input through direct and indirect contact with government and regulatory
agencies.
PepsiCo products are subject to many regulatory requirements, and it is imperative that
the company provide transparent and truthful communication with appropriate agencies and
regulatory bodies. I move that PepsiCo adopt a corporate policy clearly stating the criteria for
making political contributions and have the policy submitted to the stockholders for approval.
Thank you.
Thank you Mr. Mackie and thank you for taking the time to share your proposal with
us.
And let me take a minute to share with you our board's position on this matter as
outlined in our proxy statement. You know, your proposal calls for a political contributions

policy to be approved by at least 75% of shares outstanding and provides that no political
contributions can be made by PepsiCo unless they are consistent with that policy.
PepsiCo's active participation in public policy matters, including political expenditures and
participation in lobbying activities on topics of relevance to our business, is essential and
appropriate for our company and PepsiCo has already adopted a political contributions policy
which we've clearly stated on our website.
We've also developed various processes designed to further promote corporate
accountability and transparency to shareholders including a requirement that all contributions
must reflect PepsiCo's business or strategic interests and not that of individual officers or
directors. It is important to note that PepsiCo's political contributions are focused on business
issues that are critical to our company and our stakeholders.
And PepsiCo's Public Policy and Government Affairs team works with the senior
management to develop annual and long-term public policy priorities.
And our board has active oversight of PepsiCo's public policy activities through the
Nominating and Corporate Governance Committee which
annually reviews and assesses PepsiCo's political expenditures.
MAY 07, 2014 / 1:00PM, PEP - PepsiCo Annual Shareholder Meeting
All political expenditures are made in a non-partisan manner and after careful consideration of
specific criteria, including a candidate's commitment to the long-term public policy goals of
PepsiCo. We understand that our engagement in public policy matters is an important issue for
shareholders and we too believe that transparency and accountability are warranted.
Accordingly our shareholders can obtain very detailed information on PepsiCo's
website about our policy and procedures governing public policy matters including political
contributions.
On our website, you will find the specific criteria that are considered in connection with
all political contributions. You will also find disclosure of the total amount of PepsiCo's annual
corporate political contributions in the United States, as well as our annual expenditures on
federal lobbying-related activities in the United States.
I note that PepsiCo follows all applicable campaign finance, disclosure and other rules
regarding both political giving and reporting on lobbying activities and has implemented
internal controls to promote compliance with all these rules.
We recommend that shareholders do not support this proposal. By setting an unduly
high standard for shareholder approval, this proposal would be impractical to adopt and would

virtually shut down PepsiCo's ability to make political expenditures in support of public policy
issues that are critical to the success of our business.
The final item on the ballot today is a shareholder proposal submitted by Mr. Kenneth
Steiner requesting adoption of a policy requiring our senior executives to retain a significant
portion of stock. Will Tamara Williams, the representative of Kenneth Steiner please introduce
herself and the proposal?
Tamara Williams - - Representative of Shareholder
Hello, my name is Tamara Williams and this is proxy item number six, policy regarding
executive retention of stock by Kenneth Steiner of Great Neck, New York. Resolved:
Executives to retain significant stock. Shareholders urge that our executive pay committee
adopt a policy requiring senior executives to retain a significant percentage of shares acquired
through equity pay programs until reaching normal retirement age and to
report to shareholders regarding the policy before our company's next annual meeting.
For the purpose of this policy, normal retirement age would be an age of at least 60 and
determined by our executive pay committee. Shareholders recommend that the committee
adopt a share retention percentage requirement of 50% of net after-tax shares. This single
unified policy shall prohibit hedging transactions for shares subject to this policy which are not
sales but reduce the risk of loss to the executives.
This policy shall supplement any other share ownership requirements that have been
established for senior executives and should be implemented so as not to violate our company's
existing contractual obligations or the terms of any pay or benefit plan currently in effect.
Requiring senior executives to hold a significant portion of stock obtained through executive
pay plans would focus our executives on our company's long-term success. A Conference
Board Task Force report stated that hold-to-retirement requirements give executives an ever-
growing incentive to focus on the long-term stock price performance.
Thank you, Ms. Williams. And let me share with you our board's point of view on this
topic as outlined in our proxy statements. Our board agrees with the proponent's view th, l,lat
our executive officers should own a significant amount of PepsiCo stock in order to align their
interest with those of shareholders.
However, PepsiCo's executive compensation programs and robust governance policies
are already designed to accomplish the objectives of this proposal. Our proxy statement
contains substantial detail regarding these programs and policies, but here are some key points
I'd like to highlight for you.

. First, PepsiCo's executive officers are already subject to strong stock ownership
requirements. As PepsiCo's Chief Executive Officer, I'm required to hold PepsiCo's stock
having a value equal to eight times my annual salary. As noted in the proxy statement, I own
PepsiCo stock worth more than 19 times my annual salary.
Other executive officers of the company are required to hold PepsiCo stock having a
value equal to either four or two times their annual salary, depending on their position. So while
the shareholder proposal seeks a policy requiring executive officers to retain a certain
percentage of the total shares granted to them, our current policies require stock ownership
based on an executives' annual salary.
Second, executive officers who have not yet achieved their stock ownership
requirement are subject to PepsiCo's strict share retention policies.
Our executive officers have five years from the date of appointment to their position to
meet their ownership requirement. Until the ownership requirement is satisfied, our policies
limit the cash proceeds that executive officers may receive upon exercise of stock options and
upon payout of any PepsiCo units, which is PepsiCo's performance share rewards.
Additional policies we already have in place to motivate our executive officers to
deliver long-term performance include post-employment stock holding requirements, a strong
clawback policy that continues to apply following an executive officer's retirement or
termination and a prohibition on our executive officers engaging in any hedging involving
PepsiCo stock.
Finally, given that our executive compensation programs are designed with the
objective of focusing our executive officers on PepsiCo's long-term success, our board is very
confident that the underlying goal of this proposal has already been met.
The annual long-term incentive award, which rewards business performance measured
through a combination of critical internal operating metrics and market-based stock
performance, is weighted more heavily than any other component of total direct compensation
for our executive officers.
And for all these reasons, we recommend that shareholders do not support this proposal.
We will open the floor to general questions on other topics at the end of the meeting. For now,
are there any questions on the agenda items we just reviewed?
As reminder, in order to accommodate all of you who wish to pose a question, each
shareholder will be limited to three minutes for questions or comments. And to facilitate this
process, you will hear a chime indicating when it's time for you to begin to finalize your
question or remarks.

So questions on just on the agenda items? Comments on just the agenda items?
Comments, questions, yes, what we just talked about. Thank you.
Has everyone voted who wishes to do so? Please put your hand up if somebody has a
ballot to be collected. Have all the ballots have been collected?
Anyone? Two outstanding, okay.
All the votes collected, good.
We now seem to have all of the ballots and since those desiring to vote have done so, I
will ask our Inspectors of Election to close the polls. Mr. Kiszka and Ms. Tucker-Lockett?
James Kiszka - Computershare - Senior Relationship Manager
I now declare the polls closed.
All right., 2014 / 1:00PM, PEP - PepsiCo Annual Shareholder Meeting
Secretary
The responsibility of the Inspectors of Election is to tabulate the voting results and they
will begin to do so now while we will take a brief break.
Larry Thompson will now announce the preliminary results of the balloting. Larry?
Secretary
Thank you, Madam Chairman. I'd like to report the preliminary results of the voting. I
remind everyone that the holders of our common stock and the holders of our convertible
preferred stock vote together on all matters as a single class. With respect to the nominees for
director, I'd like to report that all director nominees have been duly elected by the affirmative
vote of a majority of the votes cast.
Ballot item number two, the appointment of KPMG as our independent auditors for
2014, has been ratified by the affirmative vote of approximately 99% of the votes cast.
Ballot item number three, the advisory vote on executive compensation, has been
approved on an advisory basis by the affirmative vote of approximately 89% of the votes cast.
Ballot item number four, the material terms of the performance goals of PepsiCo
Executive Compensation Plan, has been approved by the affirmative
vote of approximately 96% of the votes cast.

Ballot item number five, a stockholder proposal calling for a political contributions
policy, has received approximately 3.6% of the votes cast and thus did not receive enough votes
to pass.
Ballot item number six, a shareholder proposal regarding a policy on executive
retention of stock, has received approximately 25% of the votes cast and thus did not receive
enough votes to pass.
Again, I remind you that these are preliminary voting results and final results will be
available after the votes have been certified by our Inspectors of Election. The final results will
be disclosed on a Form 8-K that will be filed with the SEC.
Thank you, Larry. And this concludes the business portion of our meeting. I thank you
all for your time and attention today. All of the proposals eligible for consideration by the
shareholders at this annual meeting have been presented and the formal business portion of the
meeting is now adjourned.

COMPANY PROFILE
About PepsiCo
PepsiCo is a global food and beverage leader with net revenues of more than $65 billion
and a product portfolio that includes 22 brands that generate more than $1 billion each in annual
retail sales. Our main businesses – Quaker, Tropicana, Gatorade, Frito-Lay and Pepsi-Cola –
make hundreds of enjoyable foods and beverages that are loved throughout the world.
PepsiCo’s people are united by our unique commitment to sustainable growth by investing in
a healthier future for people and our planet, which we believe also means a more successful
future for PepsiCo. We call this commitment Performance with Purpose: PepsiCo’s promise to
provide a wide range of foods and beverages from treats to healthy eats; to find innovative
ways to minimize our impact on the environment by conserving energy and water and reducing
packaging volume; to provide a great workplace for our associates; and to respect, support and
invest in the local communities where we operate.
PepsiCo India Region: Leadership through Performance with Purpose
PepsiCo entered India in 1989 and in a short period, has grown into one of the largest
food and beverage businesses in the country. PepsiCo growth in India has been guided by its
global vision of “Performance with Purpose”. This means that while businesses maximize
shareholder value, they have a responsibility to all the stakeholders, including the communities
in which they operate, the consumers they serve and the environment whose resources they
use.

Large investor and one of the largest food & beverage businesses in India
One of the largest US multinational investors in the country, PepsiCo has been
consistently investing in India and has built an expansive beverage and snack food business
supported by 38 beverage plants and 3 food plants. PepsiCo and its partners recently announced
an additional targeted investment of Rs. 33,000 Crore in India by 2020 in the areas of product
innovation, increasing manufacturing capacity, ramping up market infrastructure,
strengthening supply chain and expanding company’s agriculture programme. PepsiCo India’s
diverse portfolio includes iconic brands like Pepsi, Lay’s, Kurkure, Tropicana, Gatorade and
Quaker. In two decades, the company has been able to organically grow eight brands that
generate Rs. 1000 crores or more in estimated annual retails sales and are household names,
trusted across the country.
A growing portfolio of enjoyable and wholesome snacks and beverages
PepsiCo India’s portfolio reflects its commitment to nourish consumers with a diverse
range of fun and healthier products. The portfolio includes several healthier treats like Quaker
Oats, Tropicana juices, Tropicana fruit powders, rehydrator Gatorade, Tata Water plus, Lay’s
baked range, Quaker flavoured oats and Quaker Nutri Upma & Nutri Poha breakfast range with
the power of wholegrain.
Model partnership with over 24,000 farmers
PepsiCo India has pioneered and established a model of partnership with farmers and
now works with over 24,000 happy farmers across nine states. More than 45 percent of these
are small and marginal farmers with a land holding of one acre or less. PepsiCo provides 360-
degree support to the farmer through assured buy back of their produce at pre-agreed prices,
quality seeds, extension services, disease control packages, bank loans, weather insurance, and
the latest technological practices. The association with PepsiCo India has not only raised the
incomes of small and marginal farmers, but also their social standing.
Global leader in water conservation
In 2009, PepsiCo India achieved a significant milestone, by becoming the first business
to achieve ‘Positive Water Balance’ in the beverage world, and has been Water Positive since
then. This fact has been independently assured by Deloitte Touché Tohmatsu India Pvt. Ltd. In
2012, PepsiCo India saved 8.2 billion litres more that it consumed in its manufacturing
operations. The company made this possible through innovative irrigation practices like direct
seeding, community water recharging initiatives, and by reducing the consumption of water in
its manufacturing facilities. PepsiCo is lauded for its efforts for water conservation and has

received numerous awards such as CII National award for water management, Water Digest
award for water practices and Golden Peacock award for water conservation amongst others.
Care for the environment
PepsiCo India is now focused on reducing its carbon footprint. More than 40 per cent
of its energy is today generated from renewable sources such as bio mass & rice husk boilers
and wind turbines. Initiatives such as reduction in use of chemicals, eco-friendly packaging
initiatives and efficient waste management help reduce load on the environment. PepsiCo in
partnership with the NGO Exnora and local municipalities has also been working on a unique
waste collection and treatment program called ‘Waste-to-Wealth’. The award winning
programme has positively impacted more than 5,00,000 people.
Exemplary employment practices
PepsiCo India provides direct and indirect employment to almost 2,00,000 people. The
company believes in providing employment and growth opportunities to local talent. Its
‘College of Leadership’, ensures early identification of talent, and employees’ focused
development through critical experiences. PepsiCo firmly believes that encouraging diversity
means encouraging policies and systems that respect people’s special needs. Not only does
PepsiCo have a vibrant and diverse workforce, it takes the utmost care to make dynamic
business leaders of its employees and foster their career and personal growth through
differentiated experiences and a robust leadership development model.
External Awards received by PepsiCo India in 2013
 Doc T.S.R. Murali, Head R&D, was awarded a Gold Medal by Secretary, Ministry of Food
Processing, Government of India for his outstanding contribution in supporting R&D,
Innovation and growth of Food Processing Sector in India.
 Satharia plant was awarded LEED (Leadership in Energy and Environmental Design) Gold
Green Certification by Indian Green Building Council.
 India Region Finance and BIS team won UK’s Adam Smith award in collaboration with
Citibank for Best practices and innovation under the section Asia Pacific Regional Award for
Best Practices in the “Highly Commended’ category.
 PepsiCo India won the award for “Excellence in Developing the Leaders of Tomorrow” at the
second edition of the SHRM (Society for Human Resource Management) India HR Awards.
 PepsiCo India’s Sangareddy Plant was recognized by CII with “Commendation Certificate for
Strong Commitment to Excel in Food Safety” in the category of “Large Manufacturing Food
Businesses – Beverages.

 PepsiCo India’s Sathariya, plant won the CII Award for Outstanding Performance in Food
Safety Excellence in the Category of ‘Rising Star; Large Manufacturing Food Businesses –
Beverages.’
Performance with Purpose
At PepsiCo, 'Performance with Purpose' means delivering sustainable growth by
investing in a healthier future for people and our planet.
As a global food and beverage company with brands that stand for quality and are
respected household names — Pepsi, Frito-Lay, Quaker Oats, Tropicana and Gatorade to name
a few — we will continue to build a portfolio of enjoyable and wholesome foods and beverages;
find innovative ways to reduce the use of energy, water and packaging; and provide a great
workplace for our employees. Additionally, we will respect, support and invest in the local
communities where we operate by hiring local people, creating products designed for local
tastes and partnering with local farmers, governments and community groups. Because a
healthier future for all people and our planet means a more successful future for PepsiCo. This
is our promise.
Performance
To all of our investors, it's a promise to strive to deliver superior, sustainable financial
performance.
Human Sustainability
To the people of the world, it is a promise to encourage people to live healthier lives by
offering a portfolio of both enjoyable and wholesome foods and beverages.
As the world's nutrition needs continue to evolve, we are committed to encouraging people to
live healthier by offering a portfolio of both enjoyable and wholesome foods and beverages.
We're adding more whole grains, nuts, fruits and vegetables while reducing added sugars,
lowering sodium and saturated fat levels and moving to heart-healthier oils and natural
sweeteners. We're also embarking on many initiatives to improve calorie labeling, support
nutrition education, bring physical education to schools and feed malnourished people in lower-
income communities. Our R&D investment has increased by more than 40 percent over three
years, helping us step across industry boundaries to address core challenges to make our
products more nutritious.

Environmental Sustainability
To the planet we all share, it is a promise to be a good citizen of the world, protecting
the Earth's natural resources through innovation and more efficient use of land, energy, water
and packaging in our operations.
While we continue to make great strides on our portfolio transformation, we are also committed
to improving the environmental profile of our operations worldwide. Most recently, we opened
a facility in Chongqing, China, that is designed to use 22 percent less water and 23 percent less
energy than our existing in-country facilities. In the U.S., our Frito-Lay business developed a
fully compostable bag for our SunChips multigrain snacks, and the facility in Arizona that
produces these snacks just received the Environmental Contribution of the Year award at the
2010 Global Water Awards. One of our goals is to achieve positive water balance across all
our businesses. For every liter we use, we intend to return one to the Earth. Sound impossible?
We already did it across our India beverage operations. And India is just one step in our
journey.
Talent Sustainability
To the employees of PepsiCo, it is a promise to invest in them to help them succeed, to
work continually to develop and retain exceptional people and to create employment
opportunities in the communities we serve.
Another crucial element of our promise is our commitment to invest in our associates so they
can succeed and develop the skills needed to drive our sustainable growth. To advance these
imperatives, we have made our training and development regimen more robust, providing
additional experiential learning to build leadership skills and functional capabilities across our
businesses. Our efforts have earned external recognition in key talent and workplace rankings,
including Fortune magazine's 'Top Companies for Leaders' list in 2009. We also remain
committed to strengthening a diverse, inclusive and empowering workplace culture in which
all our associates can thrive while helping to raise standards of living in the communities in
which we operate. We are proud of the progress we continue to make, including increasing the
number of women in management globally, reducing diversity turnover and creating thousands
of new jobs in growing markets.

Human Sustainability
It's a promise to encourage people to live healthier by offering a portfolio of both enjoyable
and wholesome foods and beverages.
Global goals include:
 Increasing the whole grains, fruits and vegetables, nuts, seeds and low-fat dairy in its product
portfolio.
 Reducing the average sodium per serving in key global food brands in key markets by 25
percent by 2015.
 Reducing the average saturated fat per serving in key global food brands in key markets by 15
percent by 2020.
 Reducing the average added sugar per serving in key global beverage brands in key markets
by 25 percent by 2020.
PepsiCo India has been at the forefront of leading the human sustainability agenda and some
of the initiatives include:
 The decision to eliminate the direct sale of full-sugar soft drinks to primary and secondary
schools around the globe.
 Frito Lay's products are MSG and trans-fat free and contain voluntary on pack nutritional
labeling.
 Breakfast cereal, Quaker Oats, is rich in soluble fibre, beta-glucan which helps in lowering
cholesterol.
 The new Lay's Classic Salted has been launched with 25 percent less sodium.
 Lehar Gluco+ is a lemon-flavored drink with glucose, electrolytes and iron that provides instant
energy and refreshment to consumers.
 Tropicana 100% juice range provides fruit nutrients
 PepsiCo offers products with zero or reduced calories such as Diet Pepsi, and Aquafina
packaged water and bulk water.
 Gatorade, the world's leading sports drink, has valuable re-hydration benefits and is
scientifically formulated to replenish electrolytes, and refuel carbohydrate energy.
 Most of PepsiCo's products are available in a range of packages so consumers can choose a
size suited to particular consumption occasion, and offering choices for portion control.

 Lehar Iron Chusti is an extruded snack fortified with best form of iron (NaEDTA) to address
pervasive problem of Iron Deficiency Anaemia for base of pyramid population at an affordable
price. Nutritionally a single pack delivers 25 percent of iron RDA and 50 percent of Vitamin
B1, B12 and folate RDA for adolescent girls. The product has been specifically designed for
adolescent girls recognizing the impact of micronutrient deficiency in context of
intergenerational cycle of malnutrition. The product is made with wholesome local grains like
ragi, soya and rice.
 Aquafina packaged water for safe hydration
Environmental Sustainability
To the planet we all share
It is a promise to be a good citizen of the world, protecting the Earth's natural resources through
innovation and more efficient use of land, energy, water and packaging in our operations.
Our business focuses on sustainable growth and relies on the Earth's natural resources every
day. As our business grows in developed, developing and emerging countries, we remain
committed to minimizing the impact it has on the environment. We strive to use only methods
and tools that are scientifically proven, socially responsible and economically sound.
In India, we operate three ongoing initiatives to better the environment. These are closely linked
to our business and are areas in which we believe we can make a very positive impact.
 Our initiative to replenish water has been a major success. 2009 was a milestone for us – we
were able to achieve a positive water balance, giving back more water than we consumed
through our various initiatives of recharging, replenishing and reusing water. Click here to
know more
 Our efforts to convert waste to wealth have been very fruitful. We have educated community
members on how to segregate and recycle their waste. In a project employing over 500 people,
we transform bio-degradable waste into organic manure through vermi-culture. Click here to
know more
 We have also partnered with farmers across the country to help them boost their productivity
and income. We have pioneered contract farming, developed robust, high-quality potato seeds,
arranged for farmer loans, and aided citrus growers in a variety of ways.

Our Goals and Commitments
In 2009, we announced 15 global goals and commitments to guide our work to protect the
Earth's natural resources through innovation and more efficient use of land, energy, water and
packaging in our operations. We are focusing our work where we can make the most positive
impact (water, packaging, climate change and agriculture) and on key policies and partnerships
to help provide solutions to address the world's environmental challenges.
Water: Respect the human right to water through world-class efficiency in our
operations, preserving water resources and enabling access to safe water
 Improve our water use efficiency by 20 percent per unit of production by 2015.
 Strive for positive water balance in our operations in water-distressed areas.
 Provide access to safe water to 3 million people in developing countries by the end of 2015.
Land and Packaging: Rethink the way we grow, source, create, package and deliver our
products to minimize our impact on land
 Continue to lead the industry by incorporating at least 10 percent recycled polyethylene
terephthalate (rPET) in our primary soft drink containers in the US, and broadly expand the use
of rPET across key international markets.
 Reduce packaging weight by 350 million pounds, avoiding the creation of 1 billion pounds of
landfill waste by 2012.
 Work to eliminate all solid waste to landfills from our production facilities.
Climate Change: Reduce the carbon footprint of our operations
 Improve our electricity use efficiency by 20 percent per unit of production by 2015.
 Reduce our fuel use intensity by 25 percent per unit of production by 2015.
 Commit to an absolute reduction in GHG emissions across global operations.
Community: Respect and responsibly use natural resources in our businesses and in the
local communities we serve
 Apply proven sustainable agricultural practices on our farmed land.
 Provide funding, technical support and training to local farmers.
 Promote environmental education and best practices among our associates and business
partners.
 Integrate our policies and actions on human health, agriculture and the environment to make
sure they support each other.

Partnership with Farmers
At PepsiCo India, we see ourselves as an agriculture company. Since our entry into India in
1989, we have worked closely with farmers to help improve both their livelihoods and
agricultural yield. Our journey began with our successful introduction of a high-yielding
variety of tomato, and we went on to help paddy farmers increase their crop. Today our ventures
into crop diversification and the farming of high-quality potatoes and other edibles have
transformed the lives of thousands of Indian farmers.
We continue to strengthen our partnerships with farmers across the country to boost their
productivity and income. We plan to strengthen farmer connect from 21,000 in 2009 to 50,000
by 2012.
HELPING FARMERS IMPROVE YIELD AND INCOME
The company’s vision is to create a cost-effective, localized agri-supply chain for its business
by:
 Building PepsiCo’s stature as a development partner by helping farmers grow more and earn
more.
 Introducing new high-yielding varieties of potato and other edibles.
 Introducing sustainable farming methods and practising contact farming.
 Making world-class agricultural practices available to farmers and helping them raise farm
productivity.
 Working closely with farmers and state governments to improve agri-sustainability and crop
diversification.
 Providing customized solutions to suit specific geographies and locations.
 Facilitating financial and insurance services in order to de-risk farming.
THE JOURNEY SO FAR
Where we stand today, at a glimpse
 Today PepsiCo India’s potato farming programme reaches out to more than 12,000 farmer
families across six states. We provide farmers with superior seeds, timely agricultural inputs
and supply of agricultural implements free of charge.
 We have an assured buy-back mechanism at a prefixed rate with farmers. This insulates them
from market price fluctuations.

 Through our tie-up with State Bank of India, we help farmers get credit at a lower rate of
interest.
 We have arranged weather insurance for farmers through our tie-up with ICICI Lombard.
 We have a retention ratio of over 90%, which reveals the depth and success of our partnership.
 In 2010, our contract farmers in West Bengal registered a phenomenal 100% growth in crop
output, creating in a huge increase in farm income.
 The remarkable growth has resulted in farmers receiving a profit between Rs. 20,000– 40,000
per acre, as compared to Rs. 10000–20,000 per acre in 2009.
Contact farming
PepsiCo pioneered contact farming in India in 1989, when in order to improve the
performance of a tomato processing plant in Punjab, it imported and tested high-yielding
varieties that thrived best in India. Consequently, yield improved by over 300% and the length
of the tomato season more than doubled, resulting in a substantial increase of farmer incomes.
Today, the success of contact farming has spread and PepsiCo engages with over 22,000
farmers across the country to grow a variety of crops. Through this partnership, PepsiCo has
transformed the lives of thousands of farmers by helping them refine their farming techniques
and raise farm productivity.
Our high-quality seed programme
 In order to provide our farmers the ‘best quality potato seeds’, PepsiCo collaborated with the
Thapar Institute of Technology to develop quality potato mini-tubers.
 PepsiCo has also invested in a world-class potato mini-tuber facility at Zahura in Punjab which
helps getting robust and disease-free seeds to our company’s contact farmers.
Potato farming
 PepsiCo India has introduced world-class, top-quality, high-yielding potato varieties.
 High-yielding potato seeds have allowed farmers to produce world-class potatoes and obtain
higher returns.
 We have partnered with more than 11,000 farmers working across Punjab, Uttar Pradesh,
Karnataka, Bihar, West Bengal, Gujarat and Maharashtra for the supply of world-class chip-
grade potatoes.
 We have partnered with State Bank of India to get soft loans to all our contact farmers, thus
reducing their cost of cultivation and saving them from the clutches of moneylenders (higher
interest rates)

Replenishing Water
Conserving the world's most precious asset: Water
PepsiCo India has pioneered several major initiatives to replenish water in communities. Our
goal is to conserve, replenish and thus offset the water used in our manufacturing process
through community water recharge projects and water conservation projects in agriculture.
2009 was a year of immense pride and joy for PepsiCo India. We were able to give back more
water than we consumed through our various initiatives of recharging, replenishing and reusing
water.
Positive water balance
In 2009, PepsiCo India achieved a significant milestone, by becoming the first business to
achieve ‘Positive Water Balance’ in the beverage world, a fact verified by Deloitte Touché
Tohmatsu India Pvt. Ltd. The company has been Water Positive since then.
PepsiCo's community water initiatives
 Aurangabad
 Neelamangala
 Panipat
 Sangareddy
PepsiCo Community Check–Dam Project Paithan, Aurangabad:
The initiative PepsiCo conducted a water resource assessment study near its
Aurangabad plant. In partnership with a civil society organization, Alternative Development
initiatives (ADI), PepsiCo selected the village, Wahegaon, as well as Mudhalwadi,Rahatgaon
and Esarwadi, as the core areas to implement its interventions to replenish ground water.
PepsiCo India facilitated construction of 13 check-dams and recharged 100 wells.
Impact
The project created the potential to recharge more than 1 billion litres of water. It benefits
nearly 12,000 community members through improved access to water, additional crops,
increase in yield of rain-fed crops and the opportunity for a second cultivation cycle during the
Rabi season due to improved availability of water. Water levels have visibly risen after
implementation; old dry wells now have water and farmers’ incomes have improved by Rs.
20,000/acre. PepsiCo has also provided safe drinking water to Nagnath Vidyalaya, Wahegaon,
by laying an underground pipeline, an overhead tank and taps.

Waste to Wealth
PepsiCo Solid Waste Management Programme
PepsiCo India continues to strengthen its Solid Waste Management initiatives in
partnership with Exnora, an environmental NGO. This award-winning, income-
generating partnership provides a clean environment to more than 500,000 people across
India.
 A unique income-generating partnership with leading environmental NGO, Exnora, a pioneer
in waste management.
 Community members enjoy the benefits of a clean environment and are educated on how to
recycle waste, not just relocate it.
 Households segregate their bio-degradable waste from their recyclable waste, and the
programme recycles 80 percent of household garbage. Bio-degradable waste is converted into
organic manure through the process of vermi-culture. This project provides livelihood to more
than 600 community green ambassadors memers.
 Recyclable waste such as PET and plastics, waste paper and tetra packs are recycled.
 The community awareness programme includes door-to-door campaigns and street plays to
motivate people to segregate organic and inorganic garbage at source to enable recycling.
 Every aspect of the programme is built around community and government participation to
help the programme evolve into a self-sustaining model.
 The initiative recycled nearly 35,000 tons that would have otherwise been relocated to landfills.
Awards
 The unique PepsiCo–Exnora initiative in Pammal was awarded the environmental Golden
Peacock Award for Innovation in 2006.
 The Zero Solid Waste Centre in Pammal was recognized as a model project by UNICEF in
2007.
 PepsiCo–Exnora Waste to Wealth programme won the BSE NASSCOM Social and Corporate
Governance Award 2008.

Talent Sustainability
To the employees of PepsiCo…
It is a promise to invest in them to help them succeed, to work continually to develop and retain
exceptional people and to create employment opportunities in the communities we serve.
As PepsiCo continues its journey of sustainable growth, we must continue to hire, retain and
develop our leadership bench and a highly skilled and diverse workforce. After all, our
employees are our greatest strength.
We have an extraordinary talent base across our organization — in our manufacturing facilities,
our sales and distribution organization, our marketing groups, our staff functions and our
general managers.
As we expand our business, we are heightening our focus on ensuring that we maintain an
inclusive environment and develop the careers of our employees. Our goal is to continue to
have the leadership talent, capabilities and experience necessary to grow our business well into
the future.
Our Goals and Commitments
In 2009, we announced 12 new goals and commitments to achieve Talent Sustainability. These
reinforce our promise to develop our employees. Our commitments include enabling our
associates to thrive in a diverse, inclusive culture; providing a safe and empowering workplace;
providing opportunities that strengthen our associates' skills and capabilities; and contributing
to better living standards in the communities we serve.
Culture: Enable our people to thrive by providing a supportive and empowering
workplace.
 Ensure high levels of employee engagement and satisfaction as compared with
other Fortune500 companies.
 Foster diversity and inclusion by developing a workforce that reflects local communities.
 Encourage our employees to lead healthier lives by offering workplace wellness programmes.
 Ensure a safe workplace by continuing to reduce Lost-Time Injury Rates while striving to
improve other occupational health and safety metrics through best practices.

 Support ethical and legal compliance through annual training in our Code of Conduct, which
outlines PepsiCo's unwavering commitment to its human rights policy, including treating every
employee with dignity and respect.
Career: Provide opportunities that strengthen our employees' skills and capabilities to
drive sustainable growth.
 Become universally recognized through top rankings as one of the best companies in the world
for leadership development.
 Create a work environment in which employees know that their skills, talents and interests can
fully develop.
 Conduct training for employees from the frontline to senior management, in order to ensure
that employees have the knowledge and skills required to achieve performance goals.
Community: Contribute to better living standards in the communities we serve.
 Create local jobs by expanding operations in developing countries.
 Support education through PepsiCo Foundation grants.
 Support associate volunteerism and community involvement through company-sponsored
programmes and initiatives.
Goals & Commitments
At PepsiCo, Performance with Purpose means delivering sustainable growth by investing in a
healthier future for people and our planet. As a global food and beverage company with brands
that stand for quality and are respected household names – Quaker Oats, Tropicana, Gatorade,
Lay's and Pepsi-Cola, to name a few – we will continue to build a portfolio of enjoyable and
wholesome foods and beverages, find innovative ways to reduce the use of energy, water and
packaging, and provide a great workplace for our employees. Additionally, we will respect,
support and invest in the local communities where we operate, by hiring local people, creating
products designed for local tastes and partnering with local farmers, governments and
community groups. Because a healthier future for all people and our planet means a more
successful future for PepsiCo. This is our promise.

Other Community Initiatives
Some of the Other Initiatives taken by PepsiCo:
PepsiCo India HIV/AIDS Initiative
PepsiCo India embarked on the HIV / AIDS journey in 2005, along with our Technical partner
The International Labor Organization (ILO), with the purpose of spreading awareness amongst
all our stakeholders. We have built the whole program in a manner to build capacity within and
externally and have focused on the “Each one Teach one” approach to ensure sustainability.
The program was kicked off by creating a pool of Master Trainers and Peer Educators who
could cascade the program across all our work locations along with NGOs who were also
trained along with PepsiCo employees. We started the program by cascading HIV / AIDS
awareness amongst our employees. This was progressively enhanced to cover other
stakeholders including spouses of employees, business partners, distributors, contractual
workers, and our bottling partners. We further strengthened the impact of our efforts through
community outreach programs where we leveraged our NGO partners across the country.
Today we have 58 Master Trainers and 175 Peer Educators across both businesses and our
endeavor is to continue to create more and most Master Trainers and Peer Educators. PepsiCo
India has been awarded TERI Corporate Award for Business Response to HIV/AIDS in 2009.
PepsiCo India – Akshay Patra Partnership
PepsiCo India has partnered with Akshaya Patra, an NGO that supports the "Mid-day meal"
program launched by Government of India feeding over 1.4 million underprivileged students
every day of the school year, in 20 locations, across 9 states in India. For children belonging to
the weaker economic sections of society, a full meal, even once a day, is a strong incentive to
stay in school. This program enables hunger free education and it has lead to a significant rise
in enrollment and attendance. So this partnership has a simple but powerful mission - to change
the trajectory of countless lives in our community. In the first stage, PepsiCo India is funding
equipment and vehicles to set up a kitchen, near Kapashera, Delhi which has the capacity to
feed 75,000 children through the mid-day meal program. Through this program PepsiCo India
employees can participate in this cause by contributing as little as Rs 3375 (@ Rs. 675 per
child) to keep 5 children in a school in a year. PepsiCo foundation will match the employee
contribution and double the impact.

FINANCIAL STATEMENTS OF PEPSICO
INCOME STATEMENTS
Fiscal year is January-December.
All values USD millions.
2009 2010 2011 2012 2013
Sales/Revenue 43.23B 57.84B 66.5B 65.49B 66.42B
Cost of Goods Sold (COGS) incl.
D&A
20.14B 26.62B 31.74B 31.34B 31.18B
COGS excluding D&A 18.57B 24.38B 29.13B 28.73B 28.52B
Depreciation &
Amortization Expense
1.56B 2.24B 2.61B 2.61B 2.66B
Depreciation 1.5B 2.12B 2.48B 2.49B 2.55B
Amortization of
Intangibles
63M 117M 133M 119M 110M
Gross Income 23.1B 31.21B 34.77B 34.15B 35.23B
2009 2010 2011 2012 2013
SG&A Expense 15.3B 21.81B 24.41B 24.62B 25.18B
Research & Development 414M 488M 525M 552M 665M
Other SG&A 14.88B 21.32B 23.89B 24.07B 24.52B
Other Operating Expense 0 0 0 0 0
Unusual Expense (40M) 887M 643M 464M 415M
EBIT after Unusual Expense 40M (887M) (643M) (464M) (415M)
Non Operating Income/Expense 0 (120M) 0 0 (32M)
Non-Operating Interest Income 67M 68M 57M 91M 97M
Equity in Affiliates (Pretax) 365M 735M 0 0 -
Interest Expense 191M 970M 938M 858M 809M
Gross Interest Expense 194M 976M 948M 863M 816M
Interest Capitalized 3M 6M 10M 5M 7M
Pretax Income 8.08B 8.23B 8.83B 8.3B 8.89B
Income Tax 2.1B 1.89B 2.37B 2.09B 2.1B

2009 2010 2011 2012 2013
Income Tax - Current
Domestic
1.36B 1.07B 735M 1.06B 1.22B
Income Tax - Current
Foreign
473M 728M 882M 940M 807M
Income Tax - Deferred
Domestic
244M 79M 843M 181M 70M
Income Tax - Deferred
Foreign
21M 18M (88M) (95M) 11M
Income Tax Credits - - - - -
Equity in Affiliates - - - - -
Other After Tax Income
(Expense)
0 0 0 0 (7M)
Consolidated Net Income 5.98B 6.34B 6.46B 6.21B 6.78B
Minority Interest Expense 33M 18M 19M 36M 47M
Net Income 5.95B 6.32B 6.44B 6.18B 6.73B
Extraordinaries &
Discontinued Operations
0 0 0 0 0
Extra Items & Gain/Loss
Sale Of Assets
0 0 0 0 0
Cumulative Effect -
Accounting Chg
0 0 0 0 0
Discontinued Operations 0 0 0 0 0
Net Income After Extraordinaries 5.95B 6.32B 6.44B 6.18B 6.73B
Preferred Dividends 6M 6M 7M 7M 1M
Net Income Available to
Common
5.94B 6.31B 6.44B 6.17B 6.73B
EPS (Basic) 3.81 3.97 4.08 3.96 4.37
Basic Shares Outstanding 1.56B 1.59B 1.58B 1.56B 1.54B
EPS (Diluted) 3.77 3.91 4.03 3.92 4.32
Diluted Shares Outstanding 1.58B 1.61B 1.6B 1.58B 1.56B
EBITDA 9.36B 11.65B 12.97B 12.14B 12.71B
RATIOS FROM INCOME STATEMENT

Chair speak report -PEPSICO(Dupont analysis with coke)

Chair speak report -PEPSICO(Dupont analysis with coke)

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