10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 22, 2014 (12 weeks)

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-1183

PepsiCo, Inc.

(Exact Name of Registrant as Specified in its Charter)

North Carolina	13-1584302
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
700 Anderson Hill Road, Purchase, New York	10577
(Address of Principal Executive Offices)	(Zip Code)

914-253-2000

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES   X    NO  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    YES   X    NO  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  X	Accelerated filer
Non-accelerated filer  (Do not check if a smaller reporting company)	Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES       NO  X

Number of shares of Common Stock outstanding as of April 10, 2014 was 1,516,052,433.

PepsiCo, Inc. and Subsidiaries

Table of Contents

Part I Financial Information		Page No.
Item 1.	Condensed Consolidated Financial Statements	3
	Condensed Consolidated Statement of Income – 12 Weeks Ended March 22, 2014 and March 23, 2013	3
	Condensed Consolidated Statement of Comprehensive Income – 12 Weeks Ended March 22, 2014 and March 23, 2013	4
	Condensed Consolidated Statement of Cash Flows – 12 Weeks Ended March 22, 2014 and March 23, 2013	5
	Condensed Consolidated Balance Sheet – March 22, 2014 and December 28, 2013	7
	Condensed Consolidated Statement of Equity – 12 Weeks Ended March 22, 2014 and March 23, 2013	9
	Notes to the Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Report of Independent Registered Public Accounting Firm		40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41
Part II Other Information
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 6.	Exhibits	44

2

PART I FINANCIAL INFORMATION

ITEM 1. Condensed Consolidated Financial Statements.

Condensed Consolidated Statement of Income

PepsiCo, Inc. and Subsidiaries

(in millions except per share amounts, unaudited)

	12 Weeks Ended
	3/22/2014			3/23/2013
Net Revenue	$	12,623		$	12,581
Cost of sales	5,747			5,834
Selling, general and administrative expenses	5,048			5,066
Amortization of intangible assets	21			23
Operating Profit	1,807			1,658
Interest expense	(201		)	(214		)
Interest income and other	10			27
Income before income taxes	1,616			1,471
Provision for income taxes	389			386
Net income	1,227			1,085
Less: Net income attributable to noncontrolling interests	11			10
Net Income Attributable to PepsiCo	$	1,216		$	1,075
Net Income Attributable to PepsiCo per Common Share
Basic	$	0.80		$	0.69
Diluted	$	0.79		$	0.69
Weighted-average common shares outstanding
Basic	1,524			1,544
Diluted	1,540			1,563
Cash dividends declared per common share	$	0.5675		$	0.5375

See accompanying notes to the condensed consolidated financial statements.

3

Condensed Consolidated Statement of Comprehensive Income

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)

	12 Weeks Ended 3/22/2014
	Pre-tax amounts			Tax amounts			After-tax amounts
Net income							$	1,227
Other Comprehensive Loss
Currency translation adjustment	$	(874	)	$	—		(874		)
Cash flow hedges:
Reclassification of net losses to net income	10			(4		)	6
Net derivative gains	16			(5		)	11
Pension and retiree medical:
Reclassification of net losses to net income	48			(16		)	32
Remeasurement of net liabilities and translation	3			(1		)	2
Unrealized gains on securities	18			(9		)	9
Total Other Comprehensive Loss	$	(779	)	$	(35	)	(814		)
Comprehensive income							413
Comprehensive income attributable to noncontrolling interests							(10		)
Comprehensive Income Attributable to PepsiCo							$	403

	12 Weeks Ended 3/23/2013
	Pre-tax amounts			Tax amounts			After-tax amounts
Net income							$	1,085
Other Comprehensive Loss
Currency translation adjustment	$	(235	)	$	—		(235		)
Cash flow hedges:
Reclassification of net losses to net income	59			(21		)	38
Net derivative losses	(23		)	17			(6		)
Pension and retiree medical:
Reclassification of net losses to net income	79			(27		)	52
Remeasurement of net liabilities and translation	43			(12		)	31
Unrealized losses on securities	(1		)	—			(1		)
Total Other Comprehensive Loss	$	(78	)	$	(43	)	(121		)
Comprehensive income							964
Comprehensive income attributable to noncontrolling interests							(9		)
Comprehensive Income Attributable to PepsiCo							$	955

See accompanying notes to the condensed consolidated financial statements.

4

Condensed Consolidated Statement of Cash Flows PepsiCo, Inc. and Subsidiaries (in millions, unaudited)
	12 Weeks Ended
	3/22/2014			3/23/2013
Operating Activities
Net income	$	1,227		$	1,085
Depreciation and amortization	532			551
Stock-based compensation expense	72			77
Cash payments for merger and integration charges	—			(11		)
Restructuring and impairment charges	98			11
Cash payments for restructuring charges	(25		)	(30		)
Non-cash foreign exchange loss related to Venezuela devaluation	—			111
Excess tax benefits from share-based payment arrangements	(47		)	(36		)
Pension and retiree medical plan expenses	119			149
Pension and retiree medical plan contributions	(84		)	(87		)
Deferred income taxes and other tax charges and credits	62			(23		)
Change in accounts and notes receivable	(358		)	(175		)
Change in inventories	(406		)	(351		)
Change in prepaid expenses and other current assets	(234		)	(201		)
Change in accounts payable and other current liabilities	(813		)	(578		)
Change in income taxes payable	175			244
Other, net	(137		)	(34		)
Net Cash Provided by Operating Activities	181			702
Investing Activities
Capital spending	(355		)	(303		)
Sales of property, plant and equipment	7			8
Acquisitions and investments in noncontrolled affiliates	(24		)	(30		)
Divestitures	85			—
Short-term investments, by original maturity – three months or less, net	59			40
Other investing, net	5			—
Net Cash Used for Investing Activities	(223		)	(285		)

(Continued on following page)

5

Condensed Consolidated Statement of Cash Flows (continued) PepsiCo, Inc. and Subsidiaries (in millions, unaudited)
	12 Weeks Ended
	3/22/2014			3/23/2013
Financing Activities
Proceeds from issuances of long-term debt	$	1,990		$	2,491
Payments of long-term debt	(1,652		)	(1,190		)
Short-term borrowings, by original maturity
More than three months – proceeds	—			5
More than three months – payments	—			(464		)
Three months or less, net	2,125			306
Cash dividends paid	(888		)	(831		)
Share repurchases – common	(1,249		)	(626		)
Share repurchases – preferred	(2		)	(2		)
Proceeds from exercises of stock options	171			449
Excess tax benefits from share-based payment arrangements	47			36
Other financing	—			(1		)
Net Cash Provided by Financing Activities	542			173
Effect of exchange rate changes on cash and cash equivalents	(36		)	(172		)
Net Increase in Cash and Cash Equivalents	464			418
Cash and Cash Equivalents, Beginning of Year	9,375			6,297
Cash and Cash Equivalents, End of Period	$	9,839		$	6,715

See accompanying notes to the condensed consolidated financial statements.

6

Condensed Consolidated Balance Sheet PepsiCo, Inc. and Subsidiaries (in millions)
	(Unaudited)
	3/22/2014			12/28/2013
Assets
Current Assets
Cash and cash equivalents	$	9,839		$	9,375
Short-term investments	247			303
Accounts and notes receivable, less allowance: 3/14 - $153 and 12/13 - $145	7,262			6,954
Inventories
Raw materials	1,794			1,732
Work-in-process	235			168
Finished goods	1,719			1,509
	3,748			3,409
Prepaid expenses and other current assets	2,189			2,162
Total Current Assets	23,285			22,203
Property, Plant and Equipment	36,776			36,961
Accumulated Depreciation	(18,647		)	(18,386		)
	18,129			18,575
Amortizable Intangible Assets, net	1,593			1,638
Goodwill	16,310			16,613
Other Nonamortizable Intangible Assets	14,053			14,401
Nonamortizable Intangible Assets	30,363			31,014
Investments in Noncontrolled Affiliates	1,890			1,841
Other Assets	2,233			2,207
Total Assets	$	77,493		$	77,478

(Continued on following page)

7

Condensed Consolidated Balance Sheet (continued) PepsiCo, Inc. and Subsidiaries (in millions except per share amounts)
	(Unaudited)
	3/22/2014			12/28/2013
Liabilities and Equity
Current Liabilities
Short-term obligations	$	7,832		$	5,306
Accounts payable and other current liabilities	11,625			12,533
Total Current Liabilities	19,457			17,839
Long-Term Debt Obligations	24,240			24,333
Other Liabilities	4,811			4,931
Deferred Income Taxes	6,092			5,986
Total Liabilities	54,600			53,089
Commitments and Contingencies
Preferred Stock, no par value	41			41
Repurchased Preferred Stock	(173		)	(171		)
PepsiCo Common Shareholders’ Equity
Common stock, par value 12/3¢ per share (authorized 3,600 shares, issued, net of repurchased common stock at par value: 1,519 and 1,529 shares, respectively)	25			25
Capital in excess of par value	3,942			4,095
Retained earnings	46,770			46,420
Accumulated other comprehensive loss	(5,940		)	(5,127		)
Repurchased common stock, in excess of par value (347 and 337 shares, respectively)	(21,892		)	(21,004		)
Total PepsiCo Common Shareholders’ Equity	22,905			24,409
Noncontrolling interests	120			110
Total Equity	22,893			24,389
Total Liabilities and Equity	$	77,493		$	77,478

See accompanying notes to the condensed consolidated financial statements.

8

Condensed Consolidated Statement of Equity

PepsiCo, Inc. and Subsidiaries

(in millions, unaudited)

	12 Weeks Ended
	3/22/2014					3/23/2013
	Shares		Amount			Shares		Amount
Preferred Stock	0.8		$	41		0.8		$	41
Repurchased Preferred Stock
Balance, beginning of year	(0.6	)	(171		)	(0.6	)	(164		)
Redemptions	—		(2		)	—		(2		)
Balance, end of period	(0.6	)	(173		)	(0.6	)	(166		)
Common Stock
Balance, beginning of year	1,529		25			1,544		26
Repurchased common stock	(10	)	—			1		—
Balance, end of period	1,519		25			1,545		26
Capital in Excess of Par Value
Balance, beginning of year			4,095					4,178
Stock-based compensation expense			72					77
Stock option exercises and restricted stock units (RSUs) converted (a)			(172		)			(113		)
Withholding tax on RSUs converted			(69		)			(8		)
Other			16					2
Balance, end of period			3,942					4,136
Retained Earnings
Balance, beginning of year			46,420					43,158
Net income attributable to PepsiCo			1,216					1,075
Cash dividends declared – common			(863		)			(831		)
Cash dividends declared – RSUs			(3		)			(7		)
Balance, end of period			46,770					43,395
Accumulated Other Comprehensive Loss
Balance, beginning of year			(5,127		)			(5,487		)
Currency translation adjustment			(873		)			(234		)
Cash flow hedges, net of tax:
Reclassification of net losses to net income			6					38
Net derivative gains/(losses)			11					(6		)
Pension and retiree medical, net of tax:
Reclassification of net losses to net income			32					52
Remeasurement of net liabilities and translation			2					31
Unrealized gains/(losses) on securities, net of tax			9					(1		)
Balance, end of period			(5,940		)			(5,607		)
Repurchased Common Stock
Balance, beginning of year	(337	)	(21,004		)	(322	)	(19,458		)
Share repurchases	(15	)	(1,249		)	(9	)	(626		)
Stock option exercises	3		204			9		589
Other	2		157			1		21
Balance, end of period	(347	)	(21,892		)	(321	)	(19,474		)
Total PepsiCo Common Shareholders’ Equity			22,905					22,476
Noncontrolling Interests
Balance, beginning of year			110					105
Net income attributable to noncontrolling interests			11					10
Currency translation adjustment			(1		)			(1		)
Other, net			—					(1		)
Balance, end of period			120					113
Total Equity			$	22,893				$	22,464

(a) Includes total tax benefits of $17 million in 2014 and $26 million in 2013.

See accompanying notes to the condensed consolidated financial statements.

9

Notes to the Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation and Our Divisions

Basis of Presentation

When used in this report, the terms “we,” “us,” “our,” “PepsiCo” and the “Company” mean PepsiCo, Inc. and its consolidated subsidiaries.

Our Condensed Consolidated Balance Sheet as of March 22, 2014, Condensed Consolidated Statements of Income, Comprehensive Income, Cash Flows and Equity for the 12 weeks endedMarch 22, 2014 and March 23, 2013 have not been audited. These statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013. In our opinion, these financial statements include all normal and recurring adjustments necessary for a fair presentation. The results for the 12 weeks endedMarch 22, 2014 are not necessarily indicative of the results expected for the full year.

The results of our Venezuelan businesses have been reported under highly inflationary accounting since the beginning of 2010. See further unaudited information in “Our Business Risks”, “Items Affecting Comparability” and “Our Liquidity and Capital Resources” in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

While our North America (United States and Canada) results are reported on a 12-week basis, most of our international operations report on a monthly calendar basis for which the months of January and February are reflected in our first quarter results.

Our significant interim accounting policies include the recognition of a pro rata share of certain estimated annual sales incentives and certain advertising and marketing costs in proportion to revenue or volume, as applicable, and the recognition of income taxes using an estimated annual effective tax rate. Raw materials, direct labor and plant overhead, as well as purchasing and receiving costs, costs directly related to production planning, inspection costs and raw material handling facilities, are included in cost of sales. The costs of moving, storing and delivering finished product are included in selling, general and administrative expenses.

The following information is unaudited. Tabular dollars are in millions, except per share amounts. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. This report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 28, 2013.

Our Divisions

We are organized into four business units, as follows:

1. PepsiCo Americas Foods, which includes Frito-Lay North America (FLNA), Quaker Foods North America (QFNA) and all of our Latin American food and snack businesses (LAF);

2. PepsiCo Americas Beverages (PAB), which includes all of our North American and Latin American beverage businesses;

3. PepsiCo Europe (Europe), which includes all beverage, food and snack businesses in Europe and South Africa; and

4. PepsiCo Asia, Middle East and Africa (AMEA), which includes all beverage, food and snack businesses in AMEA, excluding South Africa.

10

Our four business units comprise six reportable segments (also referred to as divisions), as follows:

• FLNA,

• QFNA,

• LAF,

• PAB,

• Europe, and

• AMEA.

Net revenue and operating profit of each division are as follows:

	12 Weeks Ended
	Net Revenue				Operating Profit
	3/22/2014		3/23/2013		3/22/2014			3/23/2013
FLNA	$	3,219	$	3,123	$	862		$	828
QFNA	634		634		160			180
LAF	1,338		1,367		232			216
PAB	4,426		4,420		429			565
Europe	1,961		1,942		152			88
AMEA	1,045		1,095		194			184
Total division	12,623		12,581		2,029			2,061
Corporate Unallocated
Mark-to-market net gains/(losses)					34			(16		)
Restructuring and impairment charges					3			(1		)
Venezuela currency devaluation					—			(124		)
Other					(259		)	(262		)
	$	12,623	$	12,581	$	1,807		$	1,658

Total assets of each division are as follows:

	Total Assets
	3/22/2014		12/28/2013
FLNA	$	5,278	$	5,308
QFNA	998		983
LAF	4,897		4,829
PAB	30,648		30,350
Europe	17,893		18,702
AMEA	5,922		5,754
Total division	65,636		65,926
Corporate (a)	11,857		11,552
	$	77,493	$	77,478

(a) Corporate assets consist principally of cash and cash equivalents, short-term investments, derivative instruments, property, plant and equipment and certain pension and tax assets.

11

Note 2 - Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (FASB) issued new accounting guidance that requires an entity to net its liability for unrecognized tax positions against a net operating loss carryforward, a similar tax loss or a tax credit carryforward when settlement in this manner is available under the tax law. The provisions of this new guidance were effective as of the beginning of our 2014 fiscal year and did not have a material impact on our financial statements.

In December 2011, the FASB issued new disclosure requirements that are intended to enhance current disclosures on offsetting financial assets and liabilities. The new disclosures require an entity to disclose both gross and net information about derivative instruments accounted for in accordance with the guidance on derivatives and hedging that are eligible for offset on the balance sheet and instruments and transactions subject to an agreement similar to a master netting arrangement. The provisions of the new disclosure requirements were effective as of the beginning of our 2014 fiscal year. Accordingly, we have included enhanced footnote disclosure in Note 10.

Note 3 - Restructuring, Impairment and Integration Charges

2014 Multi-Year Productivity Plan

The multi-year productivity plan we publicly announced on February 13, 2014 (2014 Productivity Plan) includes the next generation of productivity initiatives that we believe will strengthen our food, snack and beverage businesses by accelerating our investment in manufacturing automation; further optimizing our global manufacturing footprint, including closing certain manufacturing facilities; re-engineering our go-to-market systems in developed markets; expanding shared services; and implementing simplified organization structures to drive efficiency. The 2014 Productivity Plan is in addition to the productivity plan we began implementing in 2012 and is expected to continue the benefits of that plan.

In the 12 weeks ended March 22, 2014, we incurred restructuring and impairment charges of $96 million ($73 million after-tax or $0.05 per share) in conjunction with the 2014 Productivity Plan. All of these net charges were recorded in selling, general and administrative expenses. The majority of the restructuring accrual at March 22, 2014 is expected to be paid by the end of 2014.

A summary of our 2014 Productivity Plan charges is as follows:

	12 Weeks Ended
	3/22/2014
FLNA	$	12
QFNA	2
LAF	1
PAB	82
Europe	2
AMEA	2
Corporate (a)	(5		)
	$	96

(a) Income amount represents adjustments of previously recorded amounts.

12

A summary of our 2014 Productivity Plan activity in 2014 is as follows:

	Severance and Other Employee Costs			Asset Impairment			Other Costs			Total
Liability as of December 28, 2013	$	30		$	—		$	1		$	31
2014 restructuring charges	47			39			10			96
Cash payments	(2		)	—			(2		)	(4		)
Non-cash charges	(4		)	(39		)	(1		)	(44		)
Liability as of March 22, 2014	$	71		$	—		$	8		$	79

2012 Multi-Year Productivity Plan

The multi-year productivity plan we publicly announced on February 9, 2012 (2012 Productivity Plan) includes actions in every aspect of our business that we believe will strengthen our complementary food, snack and beverage businesses by leveraging new technologies and processes across PepsiCo’s operations, go-to-market and information systems; heightening the focus on best practice sharing across the globe; consolidating manufacturing, warehouse and sales facilities; and implementing simplified organization structures, with wider spans of control and fewer layers of management. The 2012 Productivity Plan continues to enhance PepsiCo’s cost-competitiveness and provide a source of funding for future brand-building and innovation initiatives.

In the 12 weeks ended March 22, 2014, we incurred restructuring charges of $2 million ($3 million after-tax with a nominal amount per share) in conjunction with our 2012 Productivity Plan. All of these net charges were recorded in selling, general and administrative expenses. Substantially all of the restructuring accrual at March 22, 2014 is expected to be paid by the end of 2014.

In the 12 weeks ended March 23, 2013, we incurred restructuring and impairment charges of $11 million ($8 million after-tax or $0.01 per share) in conjunction with the 2012 Productivity Plan. All of these net charges were recorded in selling, general and administrative expenses.

A summary of our 2012 Productivity Plan charges is as follows:

	12 Weeks Ended
	3/22/2014			3/23/2013
FLNA	$	1		$	2
QFNA (a)	—			(1		)
LAF (a)	(5		)	4
PAB	4			—
Europe (a)	(2		)	4
AMEA	2			1
Corporate	2			1
	$	2		$	11

(a) Income amounts represent adjustments of previously recorded amounts.

13

A summary of our 2012 Productivity Plan activity in 2014 is as follows:

	Severance and Other Employee Costs			Other Costs			Total
Liability as of December 28, 2013	$	68		$	17		$	85
2014 restructuring charges (a)	8			(6		)	2
Cash payments	(14		)	(7		)	(21		)
Non-cash charges	(1		)	(1		)	(2		)
Liability as of March 22, 2014	$	61		$	3		$	64

(a) Income amounts represent adjustments of previously recorded amounts.

Note 4 - Intangible Assets

A summary of our amortizable intangible assets, net is as follows:

	3/22/2014							12/28/2013
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Acquired franchise rights	$	896	$	(85	)	$	811	$	910	$	(83	)	$	827
Reacquired franchise rights	107		(90		)	17		108		(86		)	22
Brands	1,395		(999		)	396		1,400		(996		)	404
Other identifiable intangibles	673		(304		)	369		686		(301		)	385
	$	3,071	$	(1,478	)	$	1,593	$	3,104	$	(1,466	)	$	1,638

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The change in the book value of nonamortizable intangible assets is as follows:

	Balance		Translation and Other			Balance
	12/28/2013					3/22/2014
FLNA
Goodwill	$	305	$	(9	)	$	296
Brands	29		(1		)	28
	334		(10		)	324
QFNA
Goodwill	175		—			175
LAF
Goodwill	660		(7		)	653
Brands	206		(1		)	205
	866		(8		)	858
PAB
Goodwill	9,943		(31		)	9,912
Reacquired franchise rights	7,281		(57		)	7,224
Acquired franchise rights	1,551		(6		)	1,545
Brands	146		1			147
	18,921		(93		)	18,828
Europe
Goodwill	5,027		(260		)	4,767
Reacquired franchise rights	760		(29		)	731
Acquired franchise rights	230		—			230
Brands	4,071		(256		)	3,815
	10,088		(545		)	9,543
AMEA
Goodwill	503		4			507
Brands	127		1			128
	630		5			635
Total goodwill	16,613		(303		)	16,310
Total reacquired franchise rights	8,041		(86		)	7,955
Total acquired franchise rights	1,781		(6		)	1,775
Total brands	4,579		(256		)	4,323
	$	31,014	$	(651	)	$	30,363

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Note 5 - Income Taxes

A rollforward of our reserves for all federal, state and foreign tax jurisdictions is as follows:

	3/22/2014			12/28/2013
Balance, beginning of year	$	1,268		$	2,425
Additions for tax positions related to the current year	22			238
Additions for tax positions from prior years	3			273
Reductions for tax positions from prior years	(2		)	(327		)
Settlement payments	(44		)	(1,306		)
Statute of limitations expiration	(29		)	(30		)
Translation and other	(8		)	(5		)
Balance, end of period	$	1,210		$	1,268

Note 6 - Stock-Based Compensation

The following table summarizes our total stock-based compensation expense:

	12 Weeks Ended
	3/22/2014			3/23/2013
Stock-based compensation expense	$	72		$	77
Restructuring and impairment benefits	(3		)	—
Total	$	69		$	77

Our weighted-average Black-Scholes fair value assumptions are as follows:

	12 Weeks Ended
	3/22/2014
Expected life	6 years
Risk free interest rate	1.8	%
Expected volatility (a)	16	%
Expected dividend yield	2.9	%

(a) Reflects movements in our stock price over the most recent historical period equivalent to the expected life.

The following table summarizes awards granted under the terms of our 2007 Long-Term Incentive Plan:

	12 Weeks Ended
	3/22/2014			3/23/2013
	Granted (a)	Weighted-Average Grant Price		Granted (a)	Weighted-Average Grant Price
Stock options	3.0	$	79.75	2.5	$	75.75
RSUs	4.2	$	79.76	3.9	$	75.75
PepsiCo equity performance units (PEPUnits)	0.4	$	79.75	0.4	$	75.75

(a) In millions.

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Note 7 - Pension and Retiree Medical Benefits

The components of net periodic benefit cost for pension and retiree medical plans are as follows:

	12 Weeks Ended
	Pension												Retiree Medical
	3/22/2014			3/23/2013			3/22/2014			3/23/2013			3/22/2014			3/23/2013
	U.S.						International
Service cost	$	91		$	108		$	19		$	22		$	8		$	10
Interest cost	134			121			24			22			14			13
Expected return on plan assets	(181		)	(190		)	(32		)	(30		)	(6		)	(6		)
Amortization of prior service cost/(credit)	5			4			—			—			(5		)	(5		)
Amortization of net losses/(gains)	40			67			9			13			(1		)	—
	89			110			20			27			10			12
Special termination benefits	8			1			—			—			—			—
Total expense	$	97		$	111		$	20		$	27		$	10		$	12

During the first quarter of 2013, we made discretionary contributions of $13 million to our international pension plans.

Note 8 - Debt Obligations

In the first quarter of 2014, we issued:

• $750 million of 0.950% senior notes maturing in February 2017; and

• $1.250 billion of 3.600% senior notes maturing in March 2024.

The net proceeds from the issuances of the above notes were used for general corporate purposes, including the repayment of commercial paper.

Also in the first quarter of 2014, $1.7 billion of senior notes matured.

As of March 22, 2014, we had $4.9 billion of commercial paper outstanding.

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Note 9 - Accumulated Other Comprehensive Loss

The reclassifications from Accumulated Other Comprehensive Loss to the Condensed Consolidated Statement of Income are summarized as follows:

	12 Weeks Ended
	3/22/2014			3/23/2013
	Amount Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in the Condensed Consolidated Statement of Income
Losses/(gains) on cash flow hedges:
Foreign exchange contracts	$	(6	)	$	3		Cost of sales
Interest rate derivatives	5			51			Interest expense
Commodity contracts	12			6			Cost of sales
Commodity contracts	(1		)	(1		)	Selling, general and administrative expenses
Net losses before tax	10			59
Tax amounts	(4		)	(21		)
Net losses after tax	$	6		$	38
Amortization of pension and retiree medical items:
Net prior service benefit (a)	$	—		$	(1	)
Net actuarial losses (a)	48			80
Net losses before tax	48			79
Tax amounts	(16		)	(27		)
Net losses after tax	$	32		$	52
Total net losses reclassified for the period, net of tax	$	38		$	90

(a) These items are included in the components of net periodic benefit cost for pension and retiree medical plans (see Note 7 for additional details).

Note 10 - Financial Instruments

We are exposed to market risks arising from adverse changes in:

• commodity prices, affecting the cost of our raw materials and energy;

• foreign exchange risks and currency restrictions; and

• interest rates.

In the normal course of business, we manage these risks through a variety of strategies, including productivity initiatives, global purchasing programs and hedging strategies. Ongoing productivity initiatives involve the identification and effective implementation of meaningful cost-saving opportunities or efficiencies. Our global purchasing programs include fixed-price purchase orders and pricing agreements. Our hedging strategies include the use of derivatives. Certain derivatives are designated as either cash flow or fair value hedges and qualify for hedge accounting treatment, while others do not qualify and are marked to market through earnings. Cash flows from derivatives used to manage commodity price, foreign exchange or interest rate risks are classified as operating activities in the Condensed Consolidated Statement of Cash Flows. We classify both the earnings and cash flow impact from these derivatives consistent with the underlying hedged item. See “Our Business Risks” in Management’s Discussion and Analysis of Financial Condition and Results of Operations for further unaudited information on our business risks.

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For cash flow hedges, the effective portion of changes in fair value are deferred in accumulated other comprehensive loss within common shareholders’ equity until the underlying hedged item is recognized in net income. For fair value hedges, changes in fair value are recognized immediately in earnings, consistent with the underlying hedged item. Hedging transactions are limited to an underlying exposure. As a result, any change in the value of our derivative instruments would be substantially offset by an opposite change in the value of the underlying hedged items. Hedging ineffectiveness and a net earnings impact occur when the change in the value of the hedge does not fully offset the change in the value of the underlying hedged item. If the derivative instrument related to a cash flow hedge is terminated, we continue to defer the related gain or loss as part of accumulated other comprehensive loss and then include it as a component of the cost of the underlying hedged item. Upon determination that the underlying hedged item will not be part of an actual transaction, we recognize the related gain or loss on the hedge in net income immediately.

We also use derivatives that do not qualify for hedge accounting treatment. We account for such derivatives at market value with the resulting gains and losses reflected in our income statement. We do not use derivative instruments for trading or speculative purposes. We perform assessments of our counterparty credit risk regularly, including a review of credit ratings, credit default swap rates and potential nonperformance of the counterparty. Based on our most recent assessment of our counterparty credit risk, we consider this risk to be low. In addition, we enter into derivative contracts with a variety of financial institutions that we believe are creditworthy in order to reduce our concentration of credit risk.

Commodity Prices

We are subject to commodity price risk because our ability to recover increased costs through higher pricing may be limited in the competitive environment in which we operate. This risk is managed through the use of fixed-price contracts and purchase orders, pricing agreements and derivatives. In addition, risk to our supply of certain raw materials is mitigated through purchases from multiple geographies and suppliers. We use derivatives, with terms of no more than three years, to economically hedge price fluctuations related to a portion of our anticipated commodity purchases, primarily for agricultural products, energy and metals. For those derivatives that qualify for hedge accounting treatment, any ineffectiveness is recorded immediately in corporate unallocated expenses. Ineffectiveness was not material for all periods presented. During the next 12 months, we expect to reclassify net losses of $21 million related to these hedges from accumulated other comprehensive loss into net income. Derivatives used to hedge commodity price risk that do not qualify for hedge accounting treatment are marked to market each period with the resulting gains and losses recorded in corporate unallocated expenses as either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. These gains and losses are subsequently reflected in division results when the divisions recognize the cost of the underlying commodity in operating profit.

Our open commodity derivative contracts that qualify for hedge accounting had a face value of $445 million as of March 22, 2014 and $537 million as of March 23, 2013.

Our open commodity derivative contracts that do not qualify for hedge accounting had a face value of $824 million as of March 22, 2014 and $958 million as of March 23, 2013.

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Foreign Exchange

We are exposed to foreign exchange risk from foreign currency purchases and foreign currency assets and liabilities created in the normal course of business. We manage this risk through sourcing purchases from local suppliers, negotiating contracts in local currencies with foreign suppliers and through the use of derivatives, primarily forward contracts with terms of no more than two years. Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses in our income statement as incurred.

Our foreign currency derivatives had a total face value of $2.4 billion as of March 22, 2014 and $2.9 billion as of March 23, 2013. During the next 12 months, we expect to reclassify net gains of $21 million related to foreign currency derivative contracts that qualify for hedge accounting from accumulated other comprehensive loss into net income. Ineffectiveness was not material for all periods presented. For foreign currency derivatives that do not qualify for hedge accounting treatment, all losses and gains were offset by changes in the underlying hedged items, resulting in no net material impact on earnings.

Interest Rates

We centrally manage our debt and investment portfolios considering investment opportunities and risks, tax consequences and overall financing strategies. We use various interest rate derivative instruments including, but not limited to, interest rate swaps, cross-currency interest rate swaps, Treasury locks and swap locks to manage our overall interest expense and foreign exchange risk. These instruments effectively change the interest rate and currency of specific debt issuances. Certain of our fixed rate indebtedness has been swapped to floating rates. The notional amount, interest payment and maturity date of the interest rate and cross currency interest rate swaps match the principal, interest payment and maturity date of the related debt. Our Treasury locks and swap locks are entered into to protect against unfavorable interest rate changes relating to forecasted debt transactions.

The notional amounts of the interest rate derivative instruments outstanding as of March 22, 2014 and March 23, 2013 were $7.9 billion and $7.8 billion, respectively. For those interest rate derivative instruments that qualify for cash flow hedge accounting, any ineffectiveness is recorded immediately. Ineffectiveness was not material for all periods presented. During the next 12 months, we expect to reclassify net losses of $22 million related to these hedges from accumulated other comprehensive loss into net income.

As of March 22, 2014, approximately 36% of total debt, after the impact of the related interest rate derivative instruments, was exposed to variable rates, compared to 31% as of December 28, 2013.

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Fair Value Measurements

The fair values of our financial assets and liabilities as of March 22, 2014 and March 23, 2013 are categorized as follows:

	2014				2013
	Assets (a)		Liabilities (a)		Assets (a)		Liabilities (a)
Available-for-sale securities (b)	$	154	$	—	$	76	$	—
Short-term investments – index funds (c)	$	182	$	—	$	176	$	—
Prepaid forward contracts (d)	$	24	$	—	$	38	$	—
Deferred compensation (e)	$	—	$	504	$	—	$	502
Derivatives designated as fair value hedging instruments:
Interest rate (f)	$	165	$	2	$	249	$	1
Derivatives designated as cash flow hedging instruments:
Foreign exchange(g)	$	37	$	17	$	27	$	9
Interest rate (f)	25		—		—		24
Commodity (h)	4		33		4		32
	$	66	$	50	$	31	$	65
Derivatives not designated as hedging    instruments:
Foreign exchange (g)	$	16	$	5	$	6	$	4
Interest rate (f)	68		90		112		140
Commodity (h)	11		46		25		54
	$	95	$	141	$	143	$	198
Total derivatives at fair value (i)	$	326	$	193	$	423	$	264
Total	$	686	$	697	$	713	$	766

(a) Financial assets are classified on our condensed consolidated balance sheet within prepaid expenses and other current assets and other assets, with the exception of available-for-sale securities and short-term investments, which are classified as short-term investments. Financial liabilities are classified on our condensed consolidated balance sheet within accounts payable and other current liabilities and other liabilities. Unless specifically indicated, all financial assets and liabilities are categorized as Level 2 assets or liabilities.

(b) Based on the price of common stock. Categorized as a Level 1 asset.

(c) Based on the price of index funds. Categorized as a Level 1 asset.

(d) Based primarily on the price of our common stock.

(e) Based on the fair value of investments corresponding to employees’ investment elections. As of March 22, 2014, all balances are categorized as Level 2 liabilities. As of March 23, 2013, $9 million are categorized as Level 1 liabilities and the remaining balances are categorized as Level 2 liabilities.

(f) Based on LIBOR forward rates and recently reported market transactions of spot and forward rates. As of March 22, 2014 and March 23, 2013, amounts related to non-designated instruments are presented as a net liability on our condensed consolidated balance sheet.

(g) Based on recently reported market transactions of spot and forward rates.

(h) Based on recently reported market transactions, primarily swap arrangements.

(i) Unless otherwise noted, derivative assets and liabilities are presented on a gross basis on our condensed consolidated balance sheet. Amounts subject to enforceable master netting arrangements or similar agreements which are not offset on the condensed consolidated balance sheet as of March 22, 2014 and March 23, 2013 were immaterial. Collateral received against any of our asset positions was immaterial.

The fair value of our debt obligations as of March 22, 2014was $33 billion, based upon prices of similar instruments in the marketplace.

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The effective portion of the pre-tax (gains)/losses on our derivative instruments is categorized as follows:

	12 Weeks Ended
	Fair Value/Non- designated Hedges					Cash Flow Hedges
	(Gains)/Losses Recognized in Income Statement (a)					(Gains)/Losses Recognized in Accumulated Other Comprehensive Loss						(Gains)/Losses Reclassified from Accumulated Other Comprehensive Loss into Income Statement (b)
	3/22/2014			3/23/2013		3/22/2014			3/23/2013			3/22/2014			3/23/2013
Foreign exchange	$	(17	)	$	—	$	(18	)	$	(28	)	$	(6	)	$	3
Interest rate	1			27		(5		)	30			5			51
Commodity	(9		)	11		7			21			11			5
Total	$	(25	)	$	38	$	(16	)	$	23		$	10		$	59

(a) Foreign exchange derivative gains/losses are primarily included in selling, general and administrative expenses. Interest rate derivative losses are primarily from fair value hedges and are included in interest expense. These losses are substantially offset by decreases in the value of the underlying debt, which are also included in interest expense. Commodity derivative gains/losses are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.

(b) Foreign exchange derivative gains/losses are primarily included in cost of sales. Interest rate derivative gains/losses are included in interest expense. Commodity derivative gains/losses are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.

Note 11 - Net Income Attributable to PepsiCo per Common Share

The computations of basic and diluted net income attributable to PepsiCo per common share are as follows:

	12 Weeks Ended
	3/22/2014				3/23/2013
	Income			Shares (a)	Income			Shares (a)
Net income attributable to PepsiCo	$	1,216			$	1,075
Preferred shares:
Dividends	—				—
Redemption premium	(1		)		(2		)
Net income available for PepsiCo common shareholders	$	1,215		1,524	$	1,073		1,544
Basic net income attributable to PepsiCo per common share	$	0.80			$	0.69
Net income available for PepsiCo common shareholders	$	1,215		1,524	$	1,073		1,544
Dilutive securities:
Stock options, RSUs, and PEPUnits (b)	—			15	—			18
Employee stock ownership plan (ESOP) convertible       preferred stock	1			1	2			1
Diluted	$	1,216		1,540	$	1,075		1,563
Diluted net income attributable to PepsiCo per common share	$	0.79			$	0.69

(a) Weighted-average common shares outstanding (in millions).

(b) Options to purchase 0.2 million shares in 2014 and 2.6 million shares in 2013 were not included in the calculation of diluted earnings per common share because these options were out-of-the-money. These out-of-the-money options had average exercise prices of $82.25 in 2014 and $75.69 in 2013.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

FINANCIAL REVIEW

Our discussion and analysis is an integral part of understanding our financial results and is provided as an addition to, and should be read in connection with, our condensed consolidated financial statements and the accompanying notes. Also refer to Note 1 of our condensed consolidated financial statements. Tabular dollars are in millions, except per share amounts. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. Percentage changes are based on unrounded amounts.

Our Critical Accounting Policies

Sales Incentives and Advertising and Marketing Costs

We offer sales incentives and discounts through various programs to customers and consumers. These incentives and discounts are primarily accounted for as a reduction of revenue. A number of our sales incentives, such as bottler funding to independent bottlers and customer volume rebates, are based on annual targets, and accruals are established during the year for the expected payout. These accruals are based on contract terms and our historical experience with similar programs and require management judgment with respect to estimating customer participation and performance levels. Differences between estimated expense and actual incentive costs are normally insignificant and are recognized in earnings in the period such differences are determined. Certain advertising and marketing costs are also based on annual targets.

For interim reporting, our policy is to allocate our forecasted full-year sales incentives for most of our programs to each of our interim reporting periods in the same year that benefits from the programs. The allocation methodology is based on our forecasted sales incentives for the full year and the proportion of each interim period’s actual gross revenue or volume, as applicable, to our forecasted annual gross revenue or volume, as applicable. Based on our review of the forecasts at each interim period, any changes in estimates and the related allocation of sales incentives are recognized beginning in the interim period that they are identified. In addition, we apply a similar allocation methodology for interim reporting purposes for advertising and other marketing activities.

Income Taxes

In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on our expected annual income, statutory tax rates and tax planning opportunities available to us in the various jurisdictions in which we operate. Subsequent recognition, derecognition and measurement of a tax position taken in a previous period are separately recognized in the quarter in which they occur.

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Our Business Risks

This Quarterly Report on Form 10-Q contains statements reflecting our views about our future performance that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Reform Act”). Forward-looking statements are generally identified through the inclusion of words such as “aim,” “anticipate,” “believe,” “drive,” “estimate,” “expect,” “expressed confidence,” “forecast,” “future,” “goals,” “guidance,” “intend,” “may,” “plan,” “position,” “potential,” “project,” “ seek,” “should,” “strategy,” “target,” “will” or similar statements or variations of such words and other similar expressions. All statements addressing our future operating performance, and statements addressing events and developments that we expect or anticipate will occur in the future, are forward-looking statements within the meaning of the Reform Act. These forward-looking statements are based on currently available information, operating plans and projections about future events and trends. They inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in any such forward-looking statement. Such risks and uncertainties include, but are not limited to: changes in demand for PepsiCo’s products, as a result of changes in consumer preferences or otherwise; changes in the legal and regulatory environment; imposition of new taxes, disagreements with tax authorities or additional tax liabilities; PepsiCo’s ability to compete effectively; PepsiCo’s ability to grow its business in developing and emerging markets or unstable political conditions, civil unrest or other developments and risks in the markets where PepsiCo’s products are sold; unfavorable economic conditions in the countries in which PepsiCo operates; increased costs, disruption of supply or shortages of raw materials and other supplies; failure to realize anticipated benefits from PepsiCo’s productivity initiatives or global operating model; disruption of PepsiCo’s supply chain; damage to PepsiCo’s reputation; failure to successfully complete or integrate acquisitions and joint ventures into PepsiCo’s existing operations or to complete or manage divestitures or refranchisings; PepsiCo’s ability to hire or retain key employees or a highly skilled and diverse workforce; trade consolidation or the loss of any key customer; any downgrade or potential downgrade of PepsiCo’s credit ratings; PepsiCo’s ability to protect its information systems against a cybersecurity incident; PepsiCo’s ability to build and sustain proper information technology infrastructure, successfully implement its ongoing business transformation initiative or share services for certain functions effectively; fluctuations or other changes in exchange rates; climate change, or legal, regulatory or market measures to address climate change; failure to successfully negotiate collective bargaining agreements or strikes or work stoppages; any infringement of or challenge to PepsiCo’s intellectual property rights; potential liabilities and costs from litigation or legal proceedings; and other factors that may adversely affect the price of PepsiCo’s common stock and financial performance including those described in “Risk Factors” in Item 1A. and “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Our Business Risks” in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 28, 2013 and in Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Our Business Risks” of this Quarterly Report on Form 10-Q. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

In the first quarter of 2014, our operations outside of the U.S., which reflect the months of January and February, generated 41% of our net revenue, with Russia, Mexico, Canada, the United Kingdom and Brazil comprising approximately 20% of our net revenue. As a result, we are exposed to foreign currency risks and unstable economic and political conditions and civil unrest in certain of the markets in which we operate. Recent events involving Russia, Ukraine and the Middle East and currency fluctuations in markets such as Venezuela (discussed further below), Argentina and Turkey continue to result in challenging operating environments in these markets. We continue to monitor the economic and operating environment in these markets closely and have identified actions to potentially mitigate the unfavorable impact, if any, on our future results. In the 12 weeks ended March 22, 2014, unfavorable foreign currency decreased net revenue

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growth by 3 percentage points, primarily due to depreciation of the Russian ruble, Canadian dollar, the Brazilian real, Venezuelan bolivar (bolivar) and the Argentine peso. Currency declines against the U.S. dollar which are not offset could adversely impact our future results.

The results of our Venezuelan businesses have been reported under highly inflationary accounting since the beginning of our 2010 fiscal year, at which time the functional currency of our Venezuelan entities was changed from the bolivar to the U.S. dollar.

In the first quarter of 2014 and 2013, a substantial number of our Venezuelan transactions included items which are categorized as essential goods at the fixed exchange rate of 6.3 bolivars per U.S. dollar through the government-operated National Center of Foreign Commerce (CENCOEX) (“fixed exchange rate”), formerly the Foreign Exchange Administration Board (CADIVI). In February 2013, the Venezuelan government devalued the bolivar by resetting the fixed exchange rate from 4.3 bolivars per dollar to 6.3 bolivars per dollar, resulting in an after-tax net charge of $111 million in the first quarter of 2013 (see “Items Affecting Comparability”). In January 2014, the Venezuelan government announced the expansion of its auction-based foreign exchange system (SICAD) to include additional items, including foreign investments. In March 2014, the Venezuelan government introduced an additional auction-based foreign exchange system (SICAD 2) which permits all companies incorporated or domiciled in Venezuela to bid for U.S. dollars for any purpose. As of March 22, 2014, the SICAD exchange rate was 10.9 bolivars per U.S. dollar. SICAD 2 became operational subsequent to our first quarter, which ended on March 22, 2014, and on the first day of operations the exchange rate was 51.86 bolivars per U.S. dollar. As we believe the fixed exchange rate of 6.3 bolivars per U.S. dollar remains legally available to us, we intend to continue to remeasure the net monetary assets of our Venezuelan entities at this rate.

At March 22, 2014, we had pending requests with an agency of the Venezuelan government for remittance of dividends at the fixed exchange rate. These requests pertain to years from 2006 to 2012. We are unable to predict the likelihood of Venezuelan government approvals of these requests or, if approved, the estimated time for remittance.

In the first quarter of 2014, our results of operations in Venezuela, which reflect the months of January and February, generated 2% of our net revenue and 3.5% of our operating profit. In the first quarter of 2013, our operations in Venezuela generated 1% of our net revenue and 4% of our operating profit, reflecting a 1-percentage-point impact from the devaluation reported in the first quarter of 2013 (see “Items Affecting Comparability”). In 2013, our operations in Venezuela generated 1% of our net revenue and 2% of our operating profit. The devaluation did not have a material impact on the results of our operations in Venezuela for the full year. As of March 22, 2014, our operations in Venezuela comprised 5% of our cash and cash equivalents balance. Our net monetary assets in Venezuela, which primarily include cash and cash equivalents, approximated $380 million at March 22, 2014. We continue to evaluate available options to obtain U.S. dollars to meet our operational needs in Venezuela.

We believe that significant uncertainty remains regarding the nature of transactions that will flow through CENCOEX, SICAD or SICAD 2, as well as how these mechanisms will operate in the future and the availability of U.S. dollars under each. We continue to monitor developments closely and may determine in the future that rates other than the fixed exchange rate are appropriate for remeasurement of the net monetary assets of our Venezuelan entities. If the exchange rates were to range between 10 and 50 bolivars per U.S. dollar, we would expect the potential after-tax net charge of remeasuring our Venezuela businesses to be approximately $140 million to $330 million. Such a charge, if recognized, would be reflected in “Items Affecting Comparability.” Further devaluation of the bolivar below the fixed exchange rate could adversely affect our financial position, including any potential impairment of non-monetary assets, which primarily include intangible assets, inventory and property, plant and equipment, and results of operations, both for

25

any period in which we determine to remeasure using another rate and on a going forward basis following any such remeasurement.

In 2014, the Venezuelan government also issued a new Law on Fair Pricing, establishing a maximum profit margin of 30%. At this time, it is unclear, based on the current regulations, to what extent this new law may adversely affect our operations and current pricing structure in Venezuela.  As a result, we are evaluating various business actions to mitigate the potential adverse impact on PepsiCo’s financial results.

In light of recent events involving Russia and Ukraine, we continue to monitor the economic and operating environment in these regions closely. In the first quarter of 2014 and 2013, 5.5% and 6% of our total net revenue, respectively, was generated by our operations in Russia, with each period reflecting the months of January and February. As of March 22, 2014, our long-lived assets in Russia were $7.2 billion. Our operations in Ukraine are not significant in relation to our consolidated results or financial position.

See Note 10 to our condensed consolidated financial statements for a discussion of our financial instruments, including their fair values as of March 22, 2014 and March 23, 2013. Cautionary statements included in “Item 1A. Risk Factors” and in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks,” included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013, should be considered when evaluating our trends and future results.

Results of Operations – Consolidated Review

Items Affecting Comparability

Our reported financial results are impacted by the following items in each of the following periods:

	12 Weeks Ended
	3/22/2014			3/23/2013
Operating profit
Mark-to-market net gains/(losses)	$	34		$	(16	)
Merger and integration charges	$	—		$	(1	)
Restructuring and impairment charges	$	(98	)	$	(11	)
Venezuela currency devaluation	$	—		$	(111	)
Net income attributable to PepsiCo
Mark-to-market net gains/(losses)	$	21		$	(11	)
Merger and integration charges	$	—		$	(1	)
Restructuring and impairment charges	$	(76	)	$	(8	)
Venezuela currency devaluation	$	—		$	(111	)
Net income attributable to PepsiCo per common share – diluted
Mark-to-market net gains/(losses)	$	0.01		$	(0.01	)
Merger and integration charges	$	—		$ ( — )
Restructuring and impairment charges	$	(0.05	)	$	(0.01	)
Venezuela currency devaluation	$	—		$	(0.07	)

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Mark-to-Market Net Impact

We centrally manage commodity derivatives on behalf of our divisions. These commodity derivatives include agricultural products, energy and metals. Certain of these commodity derivatives do not qualify for hedge accounting treatment and are marked to market with the resulting gains and losses recognized in corporate unallocated expenses, as either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. These gains and losses are subsequently reflected in division results when the divisions recognize the cost of the underlying commodity in operating profit. Therefore, the divisions realize the economic effects of the derivative without experiencing any resulting mark-to-market volatility, which remains in corporate unallocated expenses.

In the 12 weeks ended March 22, 2014, we recognized $34 million ($21 million after-tax or $0.01 per share) of mark-to-market net gains on commodity hedges in corporate unallocated expenses.

In the 12 weeks ended March 23, 2013, we recognized $16 million ($11 million after-tax or $0.01 per share) of mark-to-market net losses on commodity hedges in corporate unallocated expenses.

Merger and Integration Charges

In the 12 weeks ended March 23, 2013, we incurred merger and integration charges of $1 million ($1 million after-tax with a nominal amount per share) related to our acquisition of Wimm-Bill-Dann Foods OJSC, which were recorded in the Europe segment.

Restructuring and Impairment Charges

2014 Multi-Year Productivity Plan

In the 12 weeks ended March 22, 2014, we incurred restructuring and impairment charges of $96 million ($73 million after tax or $0.05 per share) in conjunction with the multi-year productivity plan we publicly announced on February 13, 2014, including $12 million recorded in the FLNA segment, $2 million recorded in the QFNA segment, $1 million recorded in the LAF segment, $82 million recorded in the PAB segment, $2 million recorded in the Europe segment, $2 million recorded in the AMEA segment and income of $5 million recorded in corporate unallocated expenses representing adjustments of previously recorded amounts.

We expect to incur pre-tax charges of approximately $990 million, $53 million of which was reflected in our 2013 results, $96 million of which was reflected in our first quarter 2014 results, with approximately $345 million of additional charges during the remainder of 2014 and the balance of which will be reflected in our 2015 through 2018 results. These charges totaling $990 million will consist of approximately $550 million of severance and other employee-related costs; approximately $190 million for asset impairments (all non-cash) resulting from plant closures and related actions; and approximately $250 million for other costs, including consulting-related costs and the termination of leases and other contracts. These charges resulted in cash expenditures of $4 million in the first quarter of 2014, with approximately $315 million of additional cash expenditures expected in the remainder of 2014 and the balance of approximately $371 million of related cash expenditures expected in 2015 through 2018. See Note 3 to our condensed consolidated financial statements.

2012 Multi-Year Productivity Plan

In the 12 weeks ended March 22, 2014, we incurred restructuring and impairment charges of $2 million ($3 million after-tax with a nominal amount per share) in conjunction with the multi-year productivity plan we publicly announced on February 9, 2012, including $1 million recorded in the FLNA segment, $4 million recorded in the PAB segment, $2 million recorded in the AMEA segment and $2 million recorded in corporate

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unallocated expenses, partially offset by income of $5 million recorded in the LAF segment and income of $2 million recorded in the Europe segment representing adjustments of previously recorded amounts.

In the 12 weeks ended March 23, 2013, we incurred restructuring and impairment charges of $11 million ($8 million after-tax or $0.01 per share) in conjunction with our 2012 Productivity Plan, including $2 million recorded in the FLNA segment, $4 million recorded in the LAF segment, $4 million recorded in the Europe segment, $1 million recorded in the AMEA segment, $1 million recorded in corporate unallocated expenses and income of $1 million recorded in the QFNA segment representing adjustments of previously recorded amounts.

We expect to incur pre-tax charges of approximately $910 million, $383 million of which was reflected in our 2011 results, $279 million of which was reflected in our 2012 results, $110 million of which was reflected in our 2013 results, $2 million of which was reflected in our first quarter 2014 results, with approximately $75 million of additional charges during the remainder of 2014 and the balance of which will be reflected in our 2015 results. These charges will consist of approximately $560 million of severance and other employee-related costs; approximately $270 million for other costs, including consulting-related costs and the termination of leases and other contracts; and approximately $80 million for asset impairments (all non-cash) resulting from plant closures and related actions. These charges resulted in cash expenditures of $30 million in 2011, $343 million in 2012, $133 million in 2013, $21 million in the first quarter of 2014, with approximately $110 million of additional cash expenditures expected in the remainder of 2014, and the balance of approximately $70 million expected in 2015. See Note 3 to our condensed consolidated financial statements.

Venezuela Currency Devaluation

In the 12 weeks ended March 23, 2013, we recorded a $111 million net charge related to the devaluation of the bolivar for our Venezuelan businesses. $124 million of this charge was recorded in corporate unallocated expenses, with the balance (equity income of $13 million) recorded in our PAB segment. In total, this net charge had an after-tax impact of $111 million or $0.07 per share.

In the event we remeasure the net monetary assets of our Venezuelan entities at a rate other than the fixed exchange rate, any charge associated with such remeasurement would be reflected in “Items Affecting Comparability.”  For additional information on Venezuela, see “Our Business Risks.”

Non-GAAP Measures

Certain measures contained in this Form 10-Q are financial measures that are adjusted for items affecting comparability (see “Items Affecting Comparability” for a detailed list and description of each of these items), as well as, in certain instances, adjusted for foreign exchange. These measures are not in accordance with Generally Accepted Accounting Principles (GAAP). Items adjusted for currency assume foreign currency exchange rates used for translation based on the rates in effect for the comparable prior-year period. In order to compute our constant currency results, we multiply or divide, as appropriate, our current year U.S. dollar results by the current year average foreign exchange rates and then multiply or divide, as appropriate, those amounts by the prior year average foreign exchange rates. We believe investors should consider these non-GAAP measures in evaluating our results as they are more indicative of our ongoing performance and how management evaluates our operational results and trends. These measures are not, and should not be viewed as, a substitute for U.S. GAAP reporting measures. See also “Organic Revenue Growth” and “Free Cash Flow.”

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Volume

Since our divisions each use different measures of physical unit volume, a common servings metric is necessary to reflect our consolidated physical unit volume. For the 12 weeks ended March 22, 2014, total servings increased 1%. For the 12 weeks ended March 23, 2013, total servings increased 3%. 2013 servings growth reflects an adjustment to the base year (2012) for divestitures that occurred in 2012.

We discuss volume for our beverage businesses on a bottler case sales (BCS) basis in which all beverage volume is converted to an 8-ounce-case metric. Most of our beverage volume is sold by our company-owned and franchise-owned bottlers, and that portion is based on our bottlers’ sales to retailers and independent distributors. The remainder of our volume is based on our direct shipments to retailers and independent distributors. We report most of our international beverage volume on a monthly basis. Our first quarter includes beverage volume outside of North America for January and February. Concentrate shipments and equivalents (CSE) represent our physical beverage volume shipments to independent bottlers, retailers and independent distributors, and is the measure upon which our revenue is based.

Consolidated Results

Total Net Revenue and Operating Profit

	12 Weeks Ended
	3/22/2014			3/23/2013			Change
Total net revenue	$	12,623		$	12,581		—	%
Operating profit
FLNA	$	862		$	828		4	%
QFNA	160			180			(11	)%
LAF	232			216			7	%
PAB	429			565			(24	)%
Europe	152			88			72	%
AMEA	194			184			5	%
Corporate Unallocated
Mark-to-market net gains/(losses)	34			(16		)
Restructuring and impairment charges	3			(1		)
Venezuela currency devaluation	—			(124		)
Other	(259		)	(262		)
	(222		)	(403		)	(45	)%
Total operating profit	$	1,807		$	1,658		9	%
Total operating profit margin	14.3		%	13.2		%	1.1

See “Results of Operations – Division Review” for a tabular presentation and discussion of key drivers of net revenue.

On a reported basis, total operating profit increased 9% and operating margin increased 1.1 percentage points. Operating profit growth was primarily driven by effective net pricing, planned cost reductions across a number of expense categories and volume growth, partially offset by certain operating cost increases, including strategic initiatives related to capacity and capability, and higher commodity costs. Commodity inflation reduced operating profit growth by 6 percentage points, primarily attributable to inflation in the Europe, LAF

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and PAB segments, partially offset by deflation in the FLNA segment. The impact of a one-time gain associated with the sale of agricultural assets in Russia contributed 2 percentage points to operating profit growth. Items affecting comparability (see “Items Affecting Comparability”) positively contributed 5 percentage points to total operating profit growth and 0.6 percentage points to total operating margin.

Other Consolidated Results

	12 Weeks Ended
	3/22/2014			3/23/2013				Change
Interest expense, net	$	(191	)	$	(187	)		$	(4	)
Tax rate	24.1		%	26.3		%
Net income attributable to PepsiCo	$	1,216		$	1,075			13		%
Net income attributable to PepsiCo per common share - diluted	$	0.79		$	0.69			15		%
Mark-to-market net (gains)/losses	(0.01		)	0.01
Merger and integration charges	—			—
Restructuring and impairment charges	0.05			0.01
Venezuela currency devaluation	—			0.07
Net income attributable to PepsiCo per common share - diluted, excluding above items (a)	$	0.83		$	0.77		(b)	7		%
Impact of foreign exchange translation								3
Growth in net income attributable to PepsiCo per common share - diluted, excluding above items, on a constant currency basis (a)								10		%

(a)   See “Non-GAAP Measures.”

(b)   Does not sum due to rounding.

Net interest expense increased $4 million, reflecting lower gains on the market value of investments used to economically hedge a portion of our deferred compensation costs, partially offset by lower interest rates on our debt.

The reported tax rate decreased 2.2 percentage points, primarily due to lapping of the impact of the 2013 Venezuela devaluation and the current year impact of favorable resolution of certain tax matters in 2013, partially offset by income mix shift during the quarter.

Net income attributable to PepsiCo increased 13% and net income attributable to PepsiCo per common share increased 15%. Items affecting comparability (see “Items Affecting Comparability”) positively contributed 8 percentage points to both net income attributable to PepsiCo and net income attributable to PepsiCo per common share.

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Results of Operations – Division Review

The results and discussions below are based on how our Chief Executive Officer monitors the performance of our divisions. See “Items Affecting Comparability” for a discussion of items to consider when evaluating our results and related information regarding non-GAAP measures.

Furthermore, in the discussions of net revenue and operating profit below, “effective net pricing” reflects the year-over-year impact of discrete pricing actions, sales incentive activities and mix resulting from selling varying products in different package sizes and in different countries, and “net pricing” reflects the year-over-year combined impact of list price changes, weight changes per package, discounts and allowances. Additionally, “acquisitions and divestitures,” except as otherwise noted, reflect all mergers and acquisitions activity, including the impact of acquisitions, divestitures and changes in ownership or control in consolidated subsidiaries and nonconsolidated equity investees.

Net Revenue
12 Weeks Ended	FLNA			QFNA			LAF			PAB			Europe			AMEA			Total
3/22/2014	$	3,219		$	634		$	1,338		$	4,426		$	1,961		$	1,045		$	12,623
3/23/2013	$	3,123		$	634		$	1,367		$	4,420		$	1,942		$	1,095		$	12,581
% Impact of:
Volume (a)	2		%	1		%	(3		)%	—		%	3		%	2		%	1		%
Effective net pricing (b)	1			—			12			1			4			4			3
Foreign exchange translation	(1		)	(1		)	(11		)	(1		)	(6		)	(5		)	(3		)
Acquisitions and divestitures	—			—			—			—			—			(5		)	—
Reported Growth (c)	3		%	—		%	(2		)%	—		%	1		%	(5		)%	—		%

(a) Excludes the impact of acquisitions and divestitures. In certain instances, volume growth varies from the amounts disclosed in the following divisional discussions due to nonconsolidated joint venture volume, and, for our beverage businesses, temporary timing differences between BCS and CSE, as well as the mix of beverage volume sold by our Company-owned and franchise-owned bottlers. Our net revenue excludes nonconsolidated joint venture volume, and, for our beverage businesses, is based on CSE.

(b) Includes the year-over-year impact of discrete pricing actions, sales incentive activities and mix resulting from selling varying products in different package sizes and in different countries.

(c) Amounts may not sum due to rounding.

Organic Revenue Growth

Organic revenue growth is a significant measure that we use to monitor net revenue performance. However, it is not a measure provided by accounting principles generally accepted in the U.S. Therefore, this measure is not, and should not be viewed as, a substitute for GAAP net revenue growth. In order to compute our organic revenue growth results, we exclude the impact of acquisitions and divestitures and foreign exchange translation from reported net revenue growth. See also “Non-GAAP Measures.”

12 Weeks Ended 3/22/2014	FLNA		QFNA		LAF		PAB		Europe		AMEA		Total
Reported Growth	3	%	—	%	(2	)%	—	%	1	%	(5	)%	—	%
% Impact of:
Foreign exchange translation	1		1		11		1		6		5		3
Acquisitions and divestitures	—		—		—		—		—		5		—
Organic Growth (a)	4	%	1	%	9	%	1	%	7	%	6	%	4	%

(a) Amounts may not sum due to rounding.

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Frito-Lay North America

	12 Weeks Ended				%
	3/22/2014		3/23/2013		Change
Net revenue	$	3,219	$	3,123	3
Impact of foreign exchange translation					1
Net revenue growth, on a constant currency basis (a)					4
Operating profit	$	862	$	828	4
Restructuring and impairment charges	13		2
Operating profit excluding above item (a)	$	875	$	830	5
Impact of foreign exchange translation					1
Operating profit growth excluding above item, on a constant currency basis (a)					6

(a) See “Non-GAAP Measures.”

Net revenue and volume each grew 3%. Net revenue growth was driven by the volume growth and effective net pricing. The volume growth reflects mid-single-digit growth in trademark Doritos, dips and variety packs, high-single-digit growth in trademark Fritos and double-digit growth in our Sabra joint venture. These gains were partially offset by a double-digit decline in trademark SunChips.

Operating profit grew 4%, primarily reflecting the net revenue growth and planned cost reductions across a number of expense categories, as well as lower commodity costs, primarily cooking oil, which increased operating profit growth by 1 percentage point. These impacts were partially offset by certain operating cost increases including strategic initiatives and higher advertising and marketing expenses.

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Quaker Foods North America

	12 Weeks Ended					%
	3/22/2014		3/23/2013			Change
Net revenue	$	634	$	634		—
Impact of foreign exchange translation						1
Net revenue growth, on a constant currency basis (a)						1
Operating profit	$	160	$	180		(11	)
Restructuring and impairment charges	2		(1		)
Operating profit excluding above item (a)	$	162	$	179		(10	)
Impact of foreign exchange translation						1
Operating profit growth excluding above item, on a constant currency basis (a)						(9	)

(a) See “Non-GAAP Measures.”

Net revenue was flat and volume increased 3%, despite the impact of disruptions in oat supplies. Net revenue performance benefited from volume growth and favorable product mix, offset by unfavorable net pricing and unfavorable foreign exchange. The volume growth primarily reflects mid-single-digit growth in Oatmeal and double-digit growth in Müller Quaker Dairy products.

Operating profit declined 11%, driven by the unfavorable net pricing and certain operating cost increases, reflecting strategic initiatives and the impact of disruptions in oat supplies, partially offset by the volume growth and planned cost reductions across a number of expense categories. Restructuring and impairment charges and unfavorable foreign exchange each negatively impacted operating profit performance by 1 percentage point.

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Latin America Foods

	12 Weeks Ended					%
	3/22/2014			3/23/2013		Change
Net revenue	$	1,338		$	1,367	(2	)
Impact of foreign exchange translation						11
Net revenue growth, on a constant currency basis (a)						9
Operating profit	$	232		$	216	7
Restructuring and impairment charges	(4		)	4
Operating profit excluding above item (a)	$	228		$	220	3.5
Impact of foreign exchange translation						10
Operating profit growth excluding above item, on a constant currency basis (a)						13		(b)

(a) See “Non-GAAP Measures.”

(b) Does not sum due to rounding.

Net revenue decreased 2%, reflecting unfavorable foreign exchange, which negatively impacted net revenue performance by 11 percentage points, and a volume decline, partially offset by favorable effective net pricing.

Volume declined 3%, reflecting a mid-single-digit decline in Mexico due to a tax on certain packaged foods, which became effective during the quarter, partially offset by mid-single-digit growth in Brazil.

Operating profit increased 7%, reflecting the effective net pricing and planned cost reductions across a number of expense categories, partially offset by certain operating cost increases including strategic initiatives, as well as higher commodity costs, which reduced operating profit growth by 17 percentage points, and the volume decline. Additionally, items affecting comparability in the above table (see “Items Affecting Comparability”) contributed 3.5 percentage points to reported operating profit growth. Unfavorable foreign exchange reduced operating profit growth by 10 percentage points.

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PepsiCo Americas Beverages

	12 Weeks Ended					%
	3/22/2014		3/23/2013			Change
Net revenue	$	4,426	$	4,420		—
Impact of foreign exchange translation						1
Net revenue growth, on a constant currency basis (a)						1
Operating profit	$	429	$	565		(24	)
Restructuring and impairment charges	86		—
Venezuela currency devaluation	—		(13		)
Operating profit excluding above items (a)	$	515	$	552		(7	)
Impact of foreign exchange translation						3
Operating profit growth excluding above items, on a constant currency basis (a)						(3	)	(b)

(a) See “Non-GAAP Measures.”

(b) Does not sum due to rounding.

Net revenue was even with the prior year, primarily reflecting favorable effective net pricing, offset by unfavorable foreign exchange, which negatively impacted net revenue performance by 1 percentage point.

Volume was even with the prior year, driven by a 1% decline in Latin America offset by a slight increase in North America. North America volume was driven by a 2% increase in non-carbonated beverage volume, partially offset by a 1% decline in carbonated soft drinks. The non-carbonated beverage volume primarily reflected a mid-single-digit increase in Gatorade sports drinks and a high-single-digit increase in our water portfolio, partially offset by a high-single-digit decline in our juice and juice drinks portfolio. The Latin America volume decline primarily reflected a high-single-digit decline in Mexico driven by the tax on sugar-sweetened beverages, which became effective during the quarter, partially offset by a mid-single-digit increase in Argentina and a low-single-digit increase in Brazil.

Reported operating profit decreased 24%. Excluding the items affecting comparability in the above table (see “Items Affecting Comparability”), operating profit decreased 7%. This decrease primarily reflects certain operating cost increases, as well as higher commodity costs, which negatively impacted reported operating profit performance by 2 percentage points. These impacts were partially offset by favorable effective net pricing and planned cost reductions across a number of expense categories, as well as adjustments recognized through our share of the results of a joint venture and more-favorable settlements of promotional spending accruals in the current year, which positively impacted our reported operating profit performance by 3 percentage points and 2 percentage points, respectively. Unfavorable foreign exchange negatively impacted reported operating profit performance by 3 percentage points.

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Europe

	12 Weeks Ended				%
	3/22/2014		3/23/2013		Change
Net revenue	$	1,961	$	1,942	1
Impact of foreign exchange translation					6
Net revenue growth, on a constant currency basis (a)					7
Operating profit	$	152	$	88	72
Merger and integration charges	—		1
Restructuring and impairment charges	—		4
Operating profit excluding above items (a)	$	152	$	93	62
Impact of foreign exchange translation					1
Operating profit growth excluding above items, on a constant currency basis (a)					64	(b)

(a) See “Non-GAAP Measures.”

(b) Does not sum due to rounding.

Net revenue increased 1%, reflecting effective net pricing and volume growth. Unfavorable foreign exchange reduced net revenue growth by 6 percentage points.

Snacks volume grew 3%, primarily reflecting high-single-digit growth in South Africa and mid-single-digit growth in Russia and Turkey, partially offset by a mid-single-digit decline in the Netherlands and a low-single-digit decline in the United Kingdom.

Beverage volume grew 3%, primarily reflecting high-single-digit growth in the United Kingdom, double-digit growth in France and mid-single-digit growth in Germany, partially offset by a mid-single-digit decline in Turkey. Additionally, Russia experienced low-single-digit growth.

Operating profit grew 72%, reflecting the net revenue growth and planned cost reductions across a number of expense categories, as well as the impact of a one-time gain of $31 million associated with the sale of agricultural assets in Russia (which contributed 35 percentage points to operating profit growth). Additionally, the impact of items affecting comparability in the above table (see “Items Affecting Comparability”) and the lapping of a pricing adjustment for certain commodity purchases in the prior year increased operating profit growth by 10 percentage points and 9 percentage points, respectively. These impacts were partially offset by higher commodity costs, primarily milk, which reduced operating profit by 72 percentage points, as well as certain operating cost increases reflecting strategic initiatives.

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Asia, Middle East & Africa

	12 Weeks Ended				%
	3/22/2014		3/23/2013		Change
Net revenue	$	1,045	$	1,095	(5	)
Impact of foreign exchange translation					5
Net revenue growth, on a constant currency basis (a)					0.5		(b)
Operating profit	$	194	$	184	5
Restructuring and impairment charges	4		1
Operating profit excluding above item (a)	$	198	$	185	7
Impact of foreign exchange translation					3
Operating profit growth excluding above item, on a constant currency basis (a)					10

(a) See “Non-GAAP Measures.”

(b) Does not sum due to rounding.

Net revenue declined 5%, reflecting the impact of the prior year refranchising of our Vietnam beverage operations, which negatively impacted net revenue performance by 5 percentage points. This impact was offset by favorable effective net pricing and volume growth. Unfavorable foreign exchange negatively impacted net revenue performance by 5 percentage points.

Snacks volume grew 4%, reflecting high-single-digit growth in China, double-digit growth in Indonesia and mid-single-digit growth in India, partially offset by a low-single-digit decline in Thailand. Additionally, Australia and the Middle East both experienced low-single-digit growth.

Beverage volume declined 1%, driven by a high-single-digit decline in China and a low-single-digit decline in the Middle East, partially offset by double-digit growth in the Philippines and low-single-digit growth in India.

Operating profit grew 5%, driven primarily by the effective net pricing, the volume growth and planned cost reductions across a number of expense categories, partially offset by certain operating cost increases reflecting strategic initiatives. Unfavorable foreign exchange reduced operating profit growth by nearly 3 percentage points and the impact of the prior year refranchising of our Vietnam beverage operations decreased operating profit growth by 2 percentage points.

Our Liquidity and Capital Resources

We believe that our cash generating capability and financial condition, together with our revolving credit facilities and other available methods of debt financing (including long-term debt financing which, depending upon market conditions, we may use to replace a portion of our commercial paper borrowings), will be adequate to meet our operating, investing and financing needs. Sources of cash available to us to fund cash outflows, such as our anticipated share repurchases and dividend payments, include cash from operations and proceeds obtained in the U.S. debt markets. However, there can be no assurance that volatility in the global credit markets will not impair our ability to access these markets on terms commercially acceptable to us, or at all. See “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks”, included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013.

As of March 22, 2014, we had cash, cash equivalents and short-term investments of $9.1 billion outside the U.S. To the extent foreign earnings are repatriated, such amounts would be subject to income tax liabilities, both in the U.S. and in various applicable foreign jurisdictions. In addition, currency restrictions enacted by

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the government in Venezuela have impacted our ability to pay dividends outside of the country from our snack and beverage operations in Venezuela. For additional information on Venezuela, see “Our Business Risks” and “Items Affecting Comparability.”

Operating Activities

During the 12 weeks in 2014, net cash provided by operating activities was $181 million, compared to $702 million in the prior year period. The operating cash flow performance primarily reflects unfavorable working capital comparisons to the prior year.

Also see “Free Cash Flow” below for certain other items impacting net cash provided by operating activities.

Investing Activities

During the 12 weeks in 2014, net cash used for investing activities was $223 million, primarily reflecting $348 million for net capital spending offset by $85 million in proceeds in connection with the sale of agricultural assets in Russia.

We expect 2014 net capital spending to be approximately $3.0 billion, within our long-term capital spending target of less than or equal to 5% of net revenue.

Financing Activities

During the 12 weeks in 2014, net cash provided by financing activities was $542 million, primarily reflecting net proceeds from short-term borrowings of $2.1 billion, net proceeds from long-term debt of $338 million and stock option proceeds of $171 million, partially offset by the return of operating cash flow to our shareholders through share repurchases and dividend payments of $2.1 billion.

We annually review our capital structure with our Board of Directors, including our dividend policy and share repurchase activity. On February 13, 2014, we announced a 15% increase in our annualized dividend to $2.62 per share from $2.27 per share, effective with the dividend that is expected to be paid in June 2014. We expect to return a total of $8.7 billion to shareholders in 2014 through dividends of approximately $3.7 billion and share repurchases of approximately $5.0 billion. See “Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” for a description of our share repurchase program.

Free Cash Flow

We focus on free cash flow as an important element in evaluating our performance. Since net capital spending is essential to our product innovation initiatives and maintaining our operational capabilities, we believe that it is a recurring and necessary use of cash. As such, we believe investors should also consider net capital spending when evaluating our cash from operating activities. Additionally, we consider certain items (included in the table below) in evaluating free cash flow. We believe investors should consider these items in evaluating our free cash flow results. Free cash flow excluding certain items is the primary measure we use to monitor cash flow performance. However, it is not a measure provided by GAAP. Therefore, this measure is not, and should not be viewed as, a substitute for GAAP cash flow measures.

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The table below reconciles net cash provided by operating activities, as reflected in our cash flow statement, to our free cash flow excluding the impact of the items below.

	12 Weeks Ended
	3/22/2014			3/23/2013			% Change
Net cash provided by operating activities	$	181		$	702		(74	)
Capital spending	(355		)	(303		)
Sales of property, plant and equipment	7			8
Free cash flow	(167		)	407			n/m
Discretionary pension and retiree medical contributions	—			13
Merger and integration payments (after-tax)	—			9
Payments related to restructuring charges (after-tax)	29			30
Capital investments related to restructuring plan	3			4
Payments for restructuring and other charges related to the transaction with Tingyi (Cayman Islands) Holding Corp. (Tingyi)	—			1
Free cash flow excluding above items	$	(135	)	$	464		n/m

n/m=not meaningful

Free cash flow is used primarily to repurchase shares and pay dividends. We expect to continue to return free cash flow to our shareholders through dividends and share repurchases while maintaining Tier 1 commercial paper access, which we believe will ensure appropriate financial flexibility and ready access to global capital and credit markets at favorable interest rates. However, see “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks”, included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013, as well as “Our Business Risks” above for certain factors that may impact credit ratings or our operating cash flows.

Any downgrade of our credit ratings by a credit rating agency, especially any downgrade to below investment grade, whether or not as a result of our actions or factors which are beyond our control, could increase our future borrowing costs and impair our ability to access capital and credit markets on terms commercially acceptable to us, or at all. In addition, any downgrade of our current short-term credit ratings could impair our ability to access the commercial paper market with the same flexibility that we have experienced historically, and therefore require us to rely more heavily on more expensive types of debt financing. See “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Our Business Risks”, included in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013 and Note 8 to our condensed consolidated financial statements.

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Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

PepsiCo, Inc.:

We have reviewed the accompanying Condensed Consolidated Balance Sheet of PepsiCo, Inc. and Subsidiaries as of March 22, 2014, and the related Condensed Consolidated Statements of Income, Comprehensive Income, Cash Flows, and Equity for the twelve weeks ended March 22, 2014 and March 23, 2013. These interim condensed consolidated financial statements are the responsibility of PepsiCo, Inc.’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying interim condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Consolidated Balance Sheet of PepsiCo, Inc. and Subsidiaries as of December 28, 2013, and the related Consolidated Statements of Income, Comprehensive Income, Cash Flows and Equity for the fiscal year then ended not presented herein; and in our report dated February 14, 2014, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying Condensed Consolidated Balance Sheet as of December 28, 2013, is fairly stated, in all material respects, in relation to the Consolidated Balance Sheet from which it has been derived.

/s/ KPMG LLP

New York, New York

April 17, 2014

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ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Our Business Risks” and Note 10 to our condensed consolidated financial statements. In addition, see “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Our Business Risks” in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013.

ITEM 4. Controls and Procedures.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Executive Vice President and Chief Financial Officer concluded that as of the end of the period covered by this report our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is (1) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms, and (2) accumulated and communicated to our management, including our Chief Executive Officer and Executive Vice President and Chief Financial Officer, to allow timely decisions regarding required disclosure.

During our first fiscal quarter of 2014, we continued migrating certain of our financial processing systems to an enterprise-wide systems solution. These systems implementations are part of our ongoing global business transformation initiative, and we plan to continue implementing such systems throughout other parts of our businesses over the course of the next few years. In connection with these implementations and resulting business process changes, we continue to enhance the design and documentation of our internal control over financial reporting processes to maintain effective controls over our financial reporting.

Except as described above, there were no changes in our internal control over financial reporting during our first fiscal quarter of 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

41

PART II OTHER INFORMATION

ITEM 1. Legal Proceedings.

The following information should be read in conjunction with the discussion set forth under Part I, Item 3. “Legal Proceedings” in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013.

We and our subsidiaries are party to a variety of legal, administrative, regulatory and government proceedings, claims and inquiries arising in the normal course of business. While the results of these proceedings, claims and inquiries cannot be predicted with certainty, management believes that the final outcome of the foregoing will not have a material adverse effect on our consolidated financial statements, results of operations or cash flows. See “Item 1. Business - Regulatory Environment and Environmental Compliance.”, “Item 1A. Risk Factors – Changes in the legal and regulatory environment could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation.”, “Item 1A. Risk Factors – Imposition of new taxes, disagreements with tax authorities or additional tax liabilities could adversely affect our financial performance.”, “Item 1A. Risk Factors – Our financial performance could be adversely affected if we are unable to grow our business in emerging and developing markets or as a result of unstable political conditions, civil unrest or other developments and risks in the markets where our products are sold.” and “Item 1A. Risk Factors – Potential liabilities and costs from litigation or legal proceedings could have an adverse impact on our business financial condition and results of operations.” in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013.

ITEM 1A. Risk Factors.

There have been no material changes with respect to the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013.

42

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.

A summary of our common stock repurchases (in millions, except average price per share) during the 12 weeks ended March 22, 2014 under the $10.0 billion repurchase program authorized by our Board of Directors and publicly announced in the first quarter of 2013, which commenced on July 1, 2013 and expires on June 30, 2016, is set forth in the table below. All such shares of common stock were repurchased pursuant to open market transactions.

Issuer Purchases of Common Stock

Period	Total Number of Shares Repurchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs
12/28/13					$	8,364
12/29/13 - 1/25/14	4.9	$	82.73	4.9	(407		)
					7,957
1/26/14 - 2/22/14	5.4	$	80.08	5.4	(430		)
					7,527
2/23/14 - 3/22/14	5.1	$	80.47	5.1	(412		)
Total	15.4	$	81.06	15.4	$	7,115

43

In connection with our merger with The Quaker Oats Company in 2001, shares of our convertible preferred stock were authorized and issued to an ESOP fund established by Quaker.  The preferences, limitations and relative rights of the shares of convertible preferred stock are set forth in Exhibit A to our amended and restated articles of incorporation. Quaker made the final award to the ESOP in June 2001. The Company does not have any authorized, but unissued, “blank check preferred stock.” PepsiCo repurchases shares of its convertible preferred stock from the ESOP in connection with share redemptions by ESOP participants.

The following table summarizes our convertible preferred share repurchases during the 12 weeks ended March 22, 2014.

Issuer Purchases of Convertible Preferred Stock

Period	Total Number of Shares Repurchased	Average Price Paid per Share		Total Number  of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs
12/29/13 - 1/25/14	1,500	$	398.09	N/A	N/A
1/26/14 - 2/22/14	1,100	$	403.20	N/A	N/A
2/23/14 - 3/22/14	1,000	$	411.24	N/A	N/A
Total	3,600	$	403.30	N/A	N/A

ITEM 6. Exhibits

See “Index to Exhibits” on page 46.

44

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		PepsiCo, Inc.
		(Registrant)
Date:	April 17, 2014	/s/ Marie T. Gallagher
		Marie T. Gallagher
		Senior Vice President and Controller
Date:	April 17, 2014	/s/ Kelly Mahon Tullier
		Kelly Mahon Tullier
		Senior Vice President,
		Deputy General Counsel (Duly Authorized Officer)

45

INDEX TO EXHIBITS

ITEM 6

EXHIBITS
Exhibit 2.1	Purchase Agreement dated as of December 1, 2010 among PepsiCo, Inc., Pepsi-Cola (Bermuda) Limited, Gavril A. Yushvaev, David Iakobachvili, Mikhail V. Dubinin, Sergei A. Plastinin, Alexander S. Orlov, Mikhail I. Vishnaykov, Aladaro Limited, Tony D. Maher, Dmitry Ivanov, Wimm Bill Dann Finance Cyprus Ltd. and Wimm-Bill-Dann Finance Co. Ltd. (the schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K), which is incorporated herein by reference to Exhibit 2.1 to PepsiCo’s Current Report on Form 8-K filed with the Securities and Exchange Commission on December 2, 2010.
Exhibit 3.1	Articles of Incorporation of PepsiCo, Inc., as amended and restated, effective as of May 9, 2011, which are incorporated herein by reference to Exhibit 3.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on May 9, 2011.
Exhibit 3.2	By-laws of PepsiCo, Inc., as amended, effective as of November 22, 2013, which are incorporated herein by reference to Exhibit 3.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 27, 2013.
Exhibit 4.1	Form of 0.950% Senior Notes due 2017, which is incorporated herein by reference to Exhibit 4.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2014.
Exhibit 4.2	Form of 3.600% Senior Notes due 2024, which is incorporated herein by reference to Exhibit 4.2 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, 2014.
Exhibit 10.1	PepsiCo, Inc. 2007 Long-Term Incentive Plan, as amended and restated March 13, 2014, which is incorporated herein by reference to Exhibit 10.1 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 14, 2014.
Exhibit 12	Computation of Ratio of Earnings to Fixed Charges.
Exhibit 15	Letter re: Unaudited Interim Financial Information.
Exhibit 31	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Exhibit 32	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Exhibit 101	The following materials from PepsiCo, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 22, 2014 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statement of Income, (ii) the Condensed Consolidated Statement of Comprehensive Income, (iii) the Condensed Consolidated Statement of Cash Flows, (iv) the Condensed Consolidated Balance Sheet, (v) the Condensed Consolidated Statement of Equity, and (vi) Notes to the Condensed Consolidated Financial Statements.

46

EX-12

EXHIBIT 12

Computation of Ratio of Earnings to Fixed Charges

PepsiCo, Inc. and Subsidiaries

(in millions except ratio amounts, unaudited)

	12 Weeks Ended
	3/22/2014			3/23/2013
Earnings:
Income before income taxes	$	1,616		$	1,471
Unconsolidated affiliates’ interests, net	(32		)	(28		)
Amortization of capitalized interest	1			—
Interest expense (a)	201			214
Interest portion of rent expense (b)	51			47
Earnings available for fixed charges	$	1,837		$	1,704
Fixed Charges:
Interest expense (a)	$	201		$	214
Capitalized interest	2			1
Interest portion of rent expense (b)	51			47
Total fixed charges	$	254		$	262
Ratio of Earnings to Fixed Charges (c)	7.25			6.49

(a)   Excludes interest related to our reserves for income taxes as such interest is included in provision for income taxes.

(b)   One-third of net rent expense is the portion deemed representative of the interest factor.

(c)   Based on unrounded amounts.

EX-15

EXHIBIT 15

Accountant’s Acknowledgment

The Board of Directors and Shareholders

PepsiCo, Inc.:

We hereby acknowledge our awareness of the use of our report dated April 17, 2014 included within the Quarterly Report on Form 10-Q of PepsiCo, Inc. for the twelve weeks ended March 22, 2014, and incorporated by reference in the following Registration Statements and in the related Prospectuses:

Description, Registration Statement Number

Form S-3

• PepsiCo Automatic Shelf Registration Statement, 333-177307

• PepsiCo Automatic Shelf Registration Statement, 333-154314

• PepsiAmericas, Inc. 2000 Stock Incentive Plan, 333-165176

• PBG 2004 Long Term Incentive Plan, PBG 2002 Long Term Incentive Plan, PBG Long Term Incentive Plan, The Pepsi Bottling Group, Inc. 1999 Long Term Incentive Plan and PBG Stock Incentive Plan, 333-165177

Form S-8

• The PepsiCo 401(k) Plan for Hourly Employees, 333-150868

• The PepsiCo 401(k) Plan for Salaried Employees, 333-150867

• PepsiCo, Inc. 2007 Long-Term Incentive Plan, 333-142811, 333-166740

• PepsiCo, Inc. 2003 Long-Term Incentive Plan, 333-109509

• PepsiCo SharePower Stock Option Plan, 33-35602, 33-29037, 33-42058, 33-51496, 33-54731, 33-66150 and 333-109513

• Director Stock Plan, 33-22970 and 333-110030

• 1979 Incentive Plan and the 1987 Incentive Plan, 33-19539

• 1994 Long-Term Incentive Plan, 33-54733

• PepsiCo, Inc. 1995 Stock Option Incentive Plan, 33-61731, 333-09363 and 333-109514

• 1979 Incentive Plan, 2-65410

• PepsiCo, Inc. Long Term Savings Program, 2-82645, 33-51514 and 33-60965

• PepsiCo 401(k) Plan, 333-89265

• Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates and the Retirement Savings and Investment Plan for Union Employees of Tropicana Products, Inc. and Affiliates (Teamster Local Union #173), 333-65992

• The Quaker Long Term Incentive Plan of 1990, The Quaker Long Term Incentive Plan of 1999 and The Quaker Oats Company Stock Option Plan for Outside Directors, 333-66632

• The Quaker 401(k) Plan for Salaried Employees and The Quaker 401(k) Plan for Hourly Employees, 333-66634

• The PepsiCo 401(k) Plan for Salaried Employees, 333-76196

• The PepsiCo 401(k) Plan for Hourly Employees, 333-76204

• The PepsiCo Share Award Plan, 333-87526

• PBG 401(k) Savings Program, PBG 401(k) Program, PepsiAmericas, Inc. Salaried 401(k) Plan and PepsiAmericas, Inc. Hourly 401(k) Plan, 333-165106

• PBG 2004 Long Term Incentive Plan, PBG 2002 Long Term Incentive Plan, PBG Long Term Incentive Plan, The Pepsi Bottling Group, Inc. 1999 Long Term Incentive Plan, PBG Directors’ Stock Plan, PBG Stock Incentive Plan and PepsiAmericas, Inc. 2000 Stock Incentive Plan, 333-165107

Pursuant to Rule 436 (c) under the Securities Act of 1933 (the “Act”), such report is not considered part of a registration statement prepared or certified by an independent registered public accounting firm, or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act.

/s/ KPMG LLP

New York, New York

April 17, 2014

EX-31

EXHIBIT 31

CERTIFICATION

I, Indra K. Nooyi, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PepsiCo, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 17, 2014	/s/ Indra K. Nooyi
	Indra K. Nooyi
	Chairman of the Board of Directors
	and Chief Executive Officer

CERTIFICATION

I, Hugh F. Johnston, certify that:

1. I have reviewed this quarterly report on Form 10-Q of PepsiCo, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 17, 2014	/s/ Hugh F. Johnston
	Hugh F. Johnston
	Executive Vice President
	and Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PepsiCo, Inc. (the “Corporation”) on Form 10-Q for the quarterly period ended March 22, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Indra K. Nooyi, Chairman of the Board of Directors and Chief Executive Officer of the Corporation, certify to my knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and    

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

Date: April 17, 2014	/s/ Indra K. Nooyi
	Indra K. Nooyi
	Chairman of the Board of Directors
	and Chief Executive Officer

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PepsiCo, Inc. (the “Corporation”) on Form 10-Q for the quarterly period ended March 22, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Hugh F. Johnston, Executive Vice President and Chief Financial Officer of the Corporation, certify to my knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350), that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and    

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Corporation.

Date: April 17, 2014	/s/ Hugh F. Johnston
	Hugh F. Johnston
	Executive Vice President
	and Chief Financial Officer

XML

Rollforward of Reserves for Federal State and Foreign Tax Jurisdictions (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 22, 2014	Mar. 23, 2013
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance, beginning of year	$ 1,268	$ 2,425
Additions for tax positions related to the current year	22	238
Additions for tax positions from prior years	3	273
Reductions for tax positions from prior years	(2)	(327)
Settlement payments	(44)	(1,306)
Statute of limitations expiration	(29)	(30)
Translation and other	(8)	(5)
Balance, end of period	$ 1,210

XML

Effective Portion of Pre Tax Gains and Losses on Derivative Instruments (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 22, 2014		Mar. 23, 2013
Fair Value/Non-designated Hedges
Derivatives, Fair Value [Line Items]
(Gains)/Losses Recognized in Income Statement (a)	$ (25)		$ 38
Fair Value/Non-designated Hedges | Foreign exchange contracts
Derivatives, Fair Value [Line Items]
(Gains)/Losses Recognized in Income Statement (a)	(17)	[1]		[1]
Fair Value/Non-designated Hedges | Interest rate derivatives
Derivatives, Fair Value [Line Items]
(Gains)/Losses Recognized in Income Statement (a)	1	[1]	27	[1]
Fair Value/Non-designated Hedges | Commodity contracts
Derivatives, Fair Value [Line Items]
(Gains)/Losses Recognized in Income Statement (a)	(9)	[1]	11	[1]
Cash Flow Hedges
Derivatives, Fair Value [Line Items]
(Gains)/Losses Recognized in Accumulated Other Comprehensive Loss	(16)		23
(Gains)/Losses Reclassified from Accumulated Other Comprehensive Loss into Income Statement (b)	10		59
Cash Flow Hedges | Foreign exchange contracts
Derivatives, Fair Value [Line Items]
(Gains)/Losses Recognized in Accumulated Other Comprehensive Loss	(18)		(28)
(Gains)/Losses Reclassified from Accumulated Other Comprehensive Loss into Income Statement (b)	(6)	[2]	3	[2]
Cash Flow Hedges | Interest rate derivatives
Derivatives, Fair Value [Line Items]
(Gains)/Losses Recognized in Accumulated Other Comprehensive Loss	(5)		30
(Gains)/Losses Reclassified from Accumulated Other Comprehensive Loss into Income Statement (b)	5	[2]	51	[2]
Cash Flow Hedges | Commodity contracts
Derivatives, Fair Value [Line Items]
(Gains)/Losses Recognized in Accumulated Other Comprehensive Loss	7		21
(Gains)/Losses Reclassified from Accumulated Other Comprehensive Loss into Income Statement (b)	$ 11	[2]	$ 5	[2]

[1] {F|ahBzfndlYmZpbGluZ3MtaHJkcmoLEgZYTUxEb2MiXlhCUkxEb2NHZW5JbmZvOjkwNTcwOTRiYmJkZTRmOThhYWYxNzZjODFlYThkNTY1fFRleHRTZWxlY3Rpb246QUM1NUFDNERGNTlBOThCQjJDRDE0QzE4RTUyOUQ3MzUM}

[2] b)Foreign exchange derivative gains/losses are primarily included in cost of sales. Interest rate derivative gains/losses are included in interest expense. Commodity derivative gains/losses are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.

XML

Financial Instruments - Additional Information (Detail) (USD $)		3 Months Ended				3 Months Ended
	Mar. 22, 2014	Mar. 22, 2014 Commodity contracts	Mar. 23, 2013 Commodity contracts	Mar. 22, 2014 Foreign Exchange Contract	Sep. 08, 2012 Foreign Exchange Contract	Mar. 22, 2014 Interest rate derivatives	Mar. 23, 2013 Interest rate derivatives	Dec. 29, 2012 Interest rate derivatives
Derivative Instruments, Gain (Loss) [Line Items]
Derivative maturity term, maximum		3 years		2 years
Expected reclassification of net gains (losses) related to hedge from accumulated OCI into net income within the next 12 months			$ (21,000,000)	$ 21,000,000		$ (22,000,000)
Derivative, Notional Amount				2,400,000,000	2,900,000,000	7,900,000,000	7,800,000,000
Percentage of total debt, net of related interest rate derivatives, exposed to variable interest rates						36.00%		31.00%
Debt obligations	$ 33,000,000,000

XML

Restructuring, Impairment and Integration Charges 2014 Productivity Plan Charges (Details) (2014 Productivity Plan, USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 22, 2014
Restructuring Cost and Reserve [Line Items]
2014 restructuring charges (a)	$ 96
FLNA
Restructuring Cost and Reserve [Line Items]
2014 restructuring charges (a)	12
QFNA
Restructuring Cost and Reserve [Line Items]
2014 restructuring charges (a)	2
LAF
Restructuring Cost and Reserve [Line Items]
2014 restructuring charges (a)	1
PAB
Restructuring Cost and Reserve [Line Items]
2014 restructuring charges (a)	82
Europe
Restructuring Cost and Reserve [Line Items]
2014 restructuring charges (a)	2
AMEA
Restructuring Cost and Reserve [Line Items]
2014 restructuring charges (a)	2
Corporate Unallocated [Member]
Restructuring Cost and Reserve [Line Items]
2014 restructuring charges (a)	$ (5)

XML

Pension and Retiree Medical Benefits (Tables)

3 Months Ended

Mar. 22, 2014

Compensation and Retirement Disclosure [Abstract]

Schedule of Defined Benefit Plans Disclosures [Table Text Block]

Pension and Retiree Medical Benefits

The components of net periodic benefit cost for pension and retiree medical plans are as follows:

	12 Weeks Ended
	Pension												Retiree Medical
	3/22/2014			3/23/2013			3/22/2014			3/23/2013			3/22/2014			3/23/2013
	U.S.						International
Service cost	$	91		$	108		$	19		$	22		$	8		$	10
Interest cost	134			121			24			22			14			13
Expected return on plan assets	(181		)	(190		)	(32		)	(30		)	(6		)	(6		)
Amortization of prior service cost/(credit)	5			4			—			—			(5		)	(5		)
Amortization of net losses/(gains)	40			67			9			13			(1		)	—
	89			110			20			27			10			12
Special termination benefits	8			1			—			—			—			—
Total expense	$	97		$	111		$	20		$	27		$	10		$	12

XML

Basic and Diluted Net Income Attributable to PepsiCo (Parenthetical) (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 22, 2014	Mar. 23, 2013
Earnings Per Share [Abstract]
Out-of-the-money options	0.2	2.6
Out-of-the-money options average exercise price	$ 82.25	$ 75.69

XML

Components of Net Periodic Benefit Cost for Pension and Retiree Medical Plans (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 22, 2014	Mar. 23, 2013
U.S.
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 91	$ 108
Interest cost	134	121
Expected return on plan assets	(181)	(190)
Amortization of prior service cost/(credit)	5	4
Amortization of net losses/(gains)	40	67
Gross total	89	110
Special termination benefits	8	1
Total expense	97	111
International
Defined Benefit Plan Disclosure [Line Items]
Service cost	19	22
Interest cost	24	22
Expected return on plan assets	(32)	(30)
Amortization of prior service cost/(credit)
Amortization of net losses/(gains)	9	13
Gross total	20	27
Special termination benefits
Total expense	20	27
Retiree Medical
Defined Benefit Plan Disclosure [Line Items]
Service cost	8	10
Interest cost	14	13
Expected return on plan assets	(6)	(6)
Amortization of prior service cost/(credit)	(5)	(5)
Amortization of net losses/(gains)	(1)
Gross total	10	12
Special termination benefits
Total expense	$ 10	$ 12

XML

Intangible Assets Amortizable Intangible Assets, net (Detail) (USD $) In Millions, unless otherwise specified	Mar. 22, 2014	Dec. 28, 2013
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	$ 3,071	$ 3,104
Finite-Lived Intangible Assets, Accumulated Amortization	(1,478)	(1,466)
Amortizable Intangible Assets, net	1,593	1,638
Acquired franchise rights
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	896	910
Finite-Lived Intangible Assets, Accumulated Amortization	(85)	(83)
Amortizable Intangible Assets, net	811	827
Reacquired Franchise Rights
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	107	108
Finite-Lived Intangible Assets, Accumulated Amortization	(90)	(86)
Amortizable Intangible Assets, net	17	22
Brands
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	1,395	1,400
Finite-Lived Intangible Assets, Accumulated Amortization	(999)	(996)
Amortizable Intangible Assets, net	396	404
Other Identifiable Intangibles
Acquired Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Assets, Gross	673	686
Finite-Lived Intangible Assets, Accumulated Amortization	(304)	(301)
Amortizable Intangible Assets, net	$ 369	$ 385

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Fair Values of Financial Assets and Liabilities (Detail) (USD $) In Millions, unless otherwise specified	Mar. 22, 2014		Mar. 23, 2013
Derivatives, Fair Value [Line Items]
Available-for-sale securities	$ 154	[1],[2]	$ 76	[1],[2]
Short-term investments - index funds	182	[1],[3]	176	[1],[3]
Prepaid forward contracts	24	[1],[4]	38	[1],[4]
Deferred compensation	504	[1],[5]	502	[1],[5]
Derivatives not designated as hedging instruments:
Total derivatives at fair value	326	[1],[6]	423	[1],[6]
Total Financial Assets at fair value	686	[1]	713	[1]
Derivatives not designated as hedging instruments:
Total derivatives at fair value	193	[1],[6]	264	[1],[6]
Total Financial Liabilities at fair Value	697	[1]	766	[1]
Derivatives Designated As Fair Value Hedging Instruments Assets
Derivatives designated as fair value hedging instruments:
Interest rate derivatives	165	[1],[7]	249	[1],[7]
Derivatives Designated As Hedging Instruments Assets
Derivatives designated as cash flow hedging instruments:
Foreign exchange contracts	37	[1],[8]	27	[1],[8]
Interest rate derivatives	25	[1],[7]
Commodity contracts	4	[1],[9]	4	[1],[9]
Derivatives designated as hedging instruments, Assets, Total	66	[1]	31	[1]
Derivatives Not Designated As Hedging Instruments Assets
Derivatives not designated as hedging instruments:
Foreign exchange contracts	16	[1],[8]	6	[1],[8]
Interest rate derivatives	68	[1],[7]	112	[1],[7]
Commodity contracts	11	[1],[9]	25	[1],[9]
Derivatives not designated as hedging instruments, Assets, Total	95	[1]	143	[1]
Derivatives Designated As Fair Value Hedging Instruments Liabilities
Derivatives designated as fair value hedging instruments:
Interest rate derivatives	2	[1],[7]	1	[1],[7]
Derivatives Designated As Hedging Instruments Liabilities
Derivatives designated as cash flow hedging instruments:
Foreign exchange contracts	17	[1],[8]	9	[1],[8]
Interest rate derivatives			24	[1],[7]
Commodity contracts	33	[1],[9]	32	[1],[9]
Derivatives designated as hedging instruments, Liabilities, Total	50	[1]	65	[1]
Derivatives Not Designated As Hedging Instruments Liabilities
Derivatives not designated as hedging instruments:
Foreign exchange contracts	5	[1],[8]	4	[1],[8]
Interest rate derivatives	90	[1],[7]	140	[1],[7]
Commodity contracts	46	[1],[9]	54	[1],[9]
Derivatives not designated as hedging instruments, Liabilities, Total	141	[1]	198	[1]
Designated as Hedging Instrument [Member] | Commodity contracts
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	445		537
Not Designated as Hedging Instrument [Member] | Commodity contracts
Derivatives, Fair Value [Line Items]
Derivative, Notional Amount	824		958
Level 1 Fair Values Of Assets And Liabilities [Member]
Derivatives, Fair Value [Line Items]
Deferred compensation			$ 9

[1] Financial assets are classified on our condensed consolidated balance sheet within prepaid expenses and other current assets and other assets, with the exception of available-for-sale securities and short-term investments, which are classified as short-term investments. Financial liabilities are classified on our condensed consolidated balance sheet within accounts payable and other current liabilities and other liabilities. Unless specifically indicated, all financial assets and liabilities are categorized as Level 2 assets or liabilities.

[2] Based on the price of common stock. Categorized as a Level 1 asset.

[3] Based on the price of index funds. Categorized as a Level 1 asset.

[4] Based primarily on the price of our common stock.

[5] Based on the fair value of investments corresponding to employees’ investment elections. As of March 22, 2014, all balances are categorized as Level 2 liabilities. As of March 23, 2013, $9 million are categorized as Level 1 liabilities and the remaining balances are categorized as Level 2 liabilities.

[6] (i)Unless otherwise noted, derivative assets and liabilities are presented on a gross basis on our condensed consolidated balance sheet. Amounts subject to enforceable master netting arrangements or similar agreements which are not offset on the condensed consolidated balance sheet as of March 22, 2014 and March 23, 2013 were immaterial. Collateral received against any of our asset positions was immaterial.

[7] Based on LIBOR forward rates and recently reported market transactions of spot and forward rates.

[8] Based on recently reported market transactions of spot and forward rates.

[9] Based on recently reported market transactions, primarily swap arrangements.

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Basis of Presentation

3 Months Ended

Mar. 22, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Our Divisions

Basis of Presentation

When used in this report, the terms “we,” “us,” “our,” “PepsiCo” and the “Company” mean PepsiCo, Inc. and its consolidated subsidiaries.

Our Condensed Consolidated Balance Sheet as of March 22, 2014, Condensed Consolidated Statements of Income, Comprehensive Income, Cash Flows and Equity for the 12 weeks endedMarch 22, 2014 and March 23, 2013 have not been audited. These statements have been prepared on a basis that is substantially consistent with the accounting principles applied in our Annual Report on Form 10-K for the fiscal year ended December 28, 2013. In our opinion, these financial statements include all normal and recurring adjustments necessary for a fair presentation. The results for the 12 weeks endedMarch 22, 2014 are not necessarily indicative of the results expected for the full year.

The results of our Venezuelan businesses have been reported under highly inflationary accounting since the beginning of 2010. See further unaudited information in “Our Business Risks”, “Items Affecting Comparability” and “Our Liquidity and Capital Resources” in Management’s Discussion and Analysis of Financial Condition and Results of Operations.

While our North America (United States and Canada) results are reported on a 12-week basis, most of our international operations report on a monthly calendar basis for which the months of January and February are reflected in our first quarter results.

Our significant interim accounting policies include the recognition of a pro rata share of certain estimated annual sales incentives and certain advertising and marketing costs in proportion to revenue or volume, as applicable, and the recognition of income taxes using an estimated annual effective tax rate. Raw materials, direct labor and plant overhead, as well as purchasing and receiving costs, costs directly related to production planning, inspection costs and raw material handling facilities, are included in cost of sales. The costs of moving, storing and delivering finished product are included in selling, general and administrative expenses.

The following information is unaudited. Tabular dollars are in millions, except per share amounts. All per share amounts reflect common per share amounts, assume dilution unless otherwise noted, and are based on unrounded amounts. This report should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended December 28, 2013.

Our Divisions

We are organized into four business units, as follows:

1. PepsiCo Americas Foods, which includes Frito-Lay North America (FLNA), Quaker Foods North America (QFNA) and all of our Latin American food and snack businesses (LAF);

2. PepsiCo Americas Beverages (PAB), which includes all of our North American and Latin American beverage businesses;

3. PepsiCo Europe (Europe), which includes all beverage, food and snack businesses in Europe and South Africa; and

4. PepsiCo Asia, Middle East and Africa (AMEA), which includes all beverage, food and snack businesses in AMEA, excluding South Africa.

Our four business units comprise six reportable segments (also referred to as divisions), as follows:

• FLNA,

• QFNA,

• LAF,

• PAB,

• Europe, and

• AMEA.

Net revenue and operating profit of each division are as follows:

	12 Weeks Ended
	Net Revenue				Operating Profit
	3/22/2014		3/23/2013		3/22/2014			3/23/2013
FLNA	$	3,219	$	3,123	$	862		$	828
QFNA	634		634		160			180
LAF	1,338		1,367		232			216
PAB	4,426		4,420		429			565
Europe	1,961		1,942		152			88
AMEA	1,045		1,095		194			184
Total division	12,623		12,581		2,029			2,061
Corporate Unallocated
Mark-to-market net gains/(losses)					34			(16		)
Restructuring and impairment charges					3			(1		)
Venezuela currency devaluation					—			(124		)
Other					(259		)	(262		)
	$	12,623	$	12,581	$	1,807		$	1,658

Total assets of each division are as follows:

	Total Assets
	3/22/2014		12/28/2013
FLNA	$	5,278	$	5,308
QFNA	998		983
LAF	4,897		4,829
PAB	30,648		30,350
Europe	17,893		18,702
AMEA	5,922		5,754
Total division	65,636		65,926
Corporate (a)	11,857		11,552
	$	77,493	$	77,478

(a) Corporate assets consist principally of cash and cash equivalents, short-term investments, derivative instruments, property, plant and equipment and certain pension and tax assets.

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Pension and Retiree Medical Benefits - Additional Information (Detail) (Discretionary, International, USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 23, 2013
Discretionary | International
Defined Benefit Plan Disclosure [Line Items]
Discretionary, pension contributions	$ 13

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Basis of Presentation and Our Divisions - Additional Information (Detail)	3 Months Ended
	Mar. 22, 2014 segment business_unit
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business Units	4
Reportable Business Segment	6

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Net Income Attributable to PepsiCo per Common Share (Tables)

3 Months Ended

Mar. 22, 2014

Earnings Per Share [Abstract]

Basic And Diluted Net Income Attributable To PepsiCo Per Common Share

The computations of basic and diluted net income attributable to PepsiCo per common share are as follows:

	12 Weeks Ended
	3/22/2014				3/23/2013
	Income			Shares (a)	Income			Shares (a)
Net income attributable to PepsiCo	$	1,216			$	1,075
Preferred shares:
Dividends	—				—
Redemption premium	(1		)		(2		)
Net income available for PepsiCo common shareholders	$	1,215		1,524	$	1,073		1,544
Basic net income attributable to PepsiCo per common share	$	0.80			$	0.69
Net income available for PepsiCo common shareholders	$	1,215		1,524	$	1,073		1,544
Dilutive securities:
Stock options, RSUs, and PEPUnits (b)	—			15	—			18
Employee stock ownership plan (ESOP) convertible       preferred stock	1			1	2			1
Diluted	$	1,216		1,540	$	1,075		1,563
Diluted net income attributable to PepsiCo per common share	$	0.79			$	0.69

(a) Weighted-average common shares outstanding (in millions).

(b) Options to purchase 0.2 million shares in 2014 and 2.6 million shares in 2013 were not included in the calculation of diluted earnings per common share because these options were out-of-the-money. These out-of-the-money options had average exercise prices of $82.25 in 2014 and $75.69 in 2013.

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Debt Obligations and Commitments - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 22, 2014
Debt Instrument [Line Items]
Long-Term Debt Instruments, Matured	$ 1,700,000,000
Commercial paper outstanding	4,900,000,000
Notes Due 2017 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	750,000,000
Notes Due 2017 [Member] | Zero Point Ninety Five Notes Due 2017 [Member] [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.95%
Notes Due 2024 [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 1,250,000,000
Notes Due 2024 [Member] | Three Point Six Notes Due 2024 [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.60%

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Segment Reporting Information by Segment (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 22, 2014	Mar. 23, 2013
Segment Reporting Information [Line Items]
Net Revenue	$ 12,623	$ 12,581
Operating Profit	1,807	1,658
FLNA
Segment Reporting Information [Line Items]
Net Revenue	3,219	3,123
Operating Profit	862	828
QFNA
Segment Reporting Information [Line Items]
Net Revenue	634	634
Operating Profit	160	180
LAF
Segment Reporting Information [Line Items]
Net Revenue	1,338	1,367
Operating Profit	232	216
PAB
Segment Reporting Information [Line Items]
Net Revenue	4,426	4,420
Operating Profit	429	565
Europe
Segment Reporting Information [Line Items]
Net Revenue	1,961	1,942
Operating Profit	152	88
AMEA
Segment Reporting Information [Line Items]
Net Revenue	1,045	1,095
Operating Profit	194	184
Total Division
Segment Reporting Information [Line Items]
Net Revenue	12,623	12,581
Operating Profit	2,029	2,061
Corporate Unallocated Net Impact Of Mark To Market On Commodity Hedges
Segment Reporting Information [Line Items]
Operating Profit	34	(16)
Corporate Unallocated Restructuring And Impairment Charges
Segment Reporting Information [Line Items]
Operating Profit	3	(1)
Corporate Unallocated Venezuela Currency Devaluation
Segment Reporting Information [Line Items]
Operating Profit		(124)
Corporate Unallocated Other
Segment Reporting Information [Line Items]
Operating Profit	$ (259)	$ (262)

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Segment Reporting Information by Total Assets (Detail) (USD $) In Millions, unless otherwise specified	Mar. 22, 2014		Dec. 28, 2013
Segment Reporting Information [Line Items]
Assets	$ 77,493		$ 77,478
FLNA
Segment Reporting Information [Line Items]
Assets	5,278		5,308
QFNA
Segment Reporting Information [Line Items]
Assets	998		983
LAF
Segment Reporting Information [Line Items]
Assets	4,897		4,829
PAB
Segment Reporting Information [Line Items]
Assets	30,648		30,350
Europe
Segment Reporting Information [Line Items]
Assets	17,893		18,702
AMEA
Segment Reporting Information [Line Items]
Assets	5,922		5,754
Total Division
Segment Reporting Information [Line Items]
Assets	65,636		65,926
Corporate
Segment Reporting Information [Line Items]
Assets	11,857	[1]	11,552	[1]
Assets, Total [Member]
Segment Reporting Information [Line Items]
Assets	$ 77,493		$ 77,478

[1] Corporate assets consist principally of cash and cash equivalents, short-term investments, derivative instruments, property, plant and equipment and certain pension and tax assets.

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CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 22, 2014	Mar. 23, 2013
Stock option exercises/RSUs converted, tax benefits	$ 17	$ 26

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Restructuring Impairment and Integration Charges - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 22, 2014	Mar. 23, 2013	Dec. 28, 2013
Restructuring Cost and Reserve [Line Items]
Cash payments	$ (25)	$ (30)
2014 Productivity Plan
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	79		31
Restructuring, Settlement and Impairment Provisions	96
Restructuring and impairment charges, after tax	73
Restructuring and impairment charges, after tax impact per share	$ 0.05
Cash payments	(4)
Non-cash charges	(44)
2014 Productivity Plan | FLNA
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	12
2014 Productivity Plan | QFNA
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	2
2014 Productivity Plan | LAF
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	1
2014 Productivity Plan | PAB
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	82
2014 Productivity Plan | Europe
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	2
2014 Productivity Plan | AMEA
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	2
2012 Productivity Plan
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	64		85
Restructuring, Settlement and Impairment Provisions	2	11
Restructuring and impairment charges, after tax	3	8
Restructuring and impairment charges, after tax impact per share		$ 0.01
Cash payments	(21)
Non-cash charges	(2)
2012 Productivity Plan | FLNA
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	1	2
2012 Productivity Plan | QFNA
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	0	(1)
2012 Productivity Plan | LAF
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	(5)	4
2012 Productivity Plan | PAB
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	4	0
2012 Productivity Plan | Europe
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	(2)	4
2012 Productivity Plan | AMEA
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	2	1
2012 Productivity Plan | Corporate Unallocated Expenses
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	$ 2	$ 1

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Stock-Based Compensation - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 22, 2014	Mar. 23, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	3.0	2.5
Stock-based compensation expense	$ 72	$ 77
Restructuring and impairment benefits	(3)	0
Recognized stock-based compensation expense	$ 69	$ 77
Stock Issued During Period, Shares, Restricted Stock Award, Gross	4.2	3.9
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Price	$ 79.75	$ 75.75
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Grants in Period, Weighted Average Grant Price	$ 79.76	$ 75.75
Performance Stock Unit [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other Than Options, Grants in Period, Weighted Average Grant Price	$ 79.75	$ 75.75
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	0.4	0.4

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CONDENSED CONSOLIDATED STATEMENT OF INCOME (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 22, 2014		Mar. 23, 2013
Net Revenue	$ 12,623		$ 12,581
Cost of sales	5,747		5,834
Selling, general and administrative expenses	5,048		5,066
Amortization of intangible assets	21		23
Operating Profit	1,807		1,658
Interest expense	(201)		(214)
Interest income and other	10		27
Income before income taxes	1,616		1,471
Provision for income taxes	389		386
Net income	1,227		1,085
Less: Net income attributable to noncontrolling interests	11		10
Net Income Attributable to PepsiCo	$ 1,216		$ 1,075
Net Income Attributable to PepsiCo per Common Share
Basic	$ 0.80		$ 0.69
Diluted	$ 0.79		$ 0.69
Weighted-average common shares outstanding
Basic	1,524	[1]	1,544	[1]
Diluted	1,540	[1]	1,563	[1]
Cash dividends declared per common share	$ 0.5675		$ 0.5375

[1] Weighted-average common shares outstanding (in millions).

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Accumulated Other Comprehensive Loss - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 22, 2014		Mar. 23, 2013
Losses/(gains) on cash flow hedges:
Total before tax	$ 10		$ 59
Tax amounts	(4)		(21)
Net losses after tax	6		38
Amortization of pension and retiree medical items:
Net prior service benefit (a)	0	[1]	(1)	[1]
Net actuarial losses	48		80
Total before tax	48		79
Tax amounts	(16)		(27)
Net losses after tax	32		52
Total net losses reclassified for the period, net of tax	38		90
Cash Flow Hedges
Losses/(gains) on cash flow hedges:
Losses/(gains) on cash flow hedges	10		59
Cash Flow Hedges | Foreign exchange contracts
Losses/(gains) on cash flow hedges:
Losses/(gains) on cash flow hedges	(6)	[2]	3	[2]
Cash Flow Hedges | Foreign exchange contracts | Cost of Sales
Losses/(gains) on cash flow hedges:
Losses/(gains) on cash flow hedges	(6)		3
Cash Flow Hedges | Interest rate derivatives
Losses/(gains) on cash flow hedges:
Losses/(gains) on cash flow hedges	5	[2]	51	[2]
Cash Flow Hedges | Interest rate derivatives | Interest Expense
Losses/(gains) on cash flow hedges:
Losses/(gains) on cash flow hedges	5		51
Cash Flow Hedges | Commodity contracts
Losses/(gains) on cash flow hedges:
Losses/(gains) on cash flow hedges	11	[2]	5	[2]
Cash Flow Hedges | Commodity contracts | Cost of Sales
Losses/(gains) on cash flow hedges:
Losses/(gains) on cash flow hedges	12		6
Cash Flow Hedges | Commodity contracts | Selling, General and Administrative Expenses
Losses/(gains) on cash flow hedges:
Losses/(gains) on cash flow hedges	$ (1)		$ (1)

[1] These items are included in the components of net periodic benefit cost for pension and retiree medical plans (see Note 7 for additional details).

[2] b)Foreign exchange derivative gains/losses are primarily included in cost of sales. Interest rate derivative gains/losses are included in interest expense. Commodity derivative gains/losses are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.

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CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $) In Millions, except Per Share data, unless otherwise specified	Mar. 22, 2014	Dec. 28, 2013
Accounts and notes receivable, allowance	$ 153	$ 145
Preferred Stock, no par value
Common stock, Par value	$ 0.0167	$ 0.0167
Common stock, Authorized	3,600	3,600
Common stock, Issued	1,519	1,529
Repurchased common stock, shares	347	337

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Restructuring, Impairment and Integration Charges 2012 Productivity Plan Charges (Details) (2012 Productivity Plan, USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 22, 2014	Mar. 23, 2013
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	$ 2	$ 11
FLNA
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	1	2
QFNA
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	0	(1)
LAF
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	(5)	4
PAB
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	4	0
Europe
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	(2)	4
AMEA
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	2	1
Corporate Unallocated Expenses
Restructuring Cost and Reserve [Line Items]
Restructuring, Settlement and Impairment Provisions	$ 2	$ 1

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Intangible Assets (Tables)

3 Months Ended

Mar. 22, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

	3/22/2014							12/28/2013
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Acquired franchise rights	$	896	$	(85	)	$	811	$	910	$	(83	)	$	827
Reacquired franchise rights	107		(90		)	17		108		(86		)	22
Brands	1,395		(999		)	396		1,400		(996		)	404
Other identifiable intangibles	673		(304		)	369		686		(301		)	385
	$	3,071	$	(1,478	)	$	1,593	$	3,104	$	(1,466	)	$	1,638

Schedule Of Change In Book Value Of Nonamortizable Intangible Assets

The change in the book value of nonamortizable intangible assets is as follows:

	Balance		Translation and Other			Balance
	12/28/2013					3/22/2014
FLNA
Goodwill	$	305	$	(9	)	$	296
Brands	29		(1		)	28
	334		(10		)	324
QFNA
Goodwill	175		—			175
LAF
Goodwill	660		(7		)	653
Brands	206		(1		)	205
	866		(8		)	858
PAB
Goodwill	9,943		(31		)	9,912
Reacquired franchise rights	7,281		(57		)	7,224
Acquired franchise rights	1,551		(6		)	1,545
Brands	146		1			147
	18,921		(93		)	18,828
Europe
Goodwill	5,027		(260		)	4,767
Reacquired franchise rights	760		(29		)	731
Acquired franchise rights	230		—			230
Brands	4,071		(256		)	3,815
	10,088		(545		)	9,543
AMEA
Goodwill	503		4			507
Brands	127		1			128
	630		5			635
Total goodwill	16,613		(303		)	16,310
Total reacquired franchise rights	8,041		(86		)	7,955
Total acquired franchise rights	1,781		(6		)	1,775
Total brands	4,579		(256		)	4,323
	$	31,014	$	(651	)	$	30,363

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Restructuring, Impairment and Integration Charges 2012 Productivity Plan Activity (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 22, 2014	Mar. 23, 2013	Dec. 28, 2013
Restructuring Cost and Reserve [Line Items]
Payments for Restructuring	$ 25	$ 30
2012 Productivity Plan
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	64		85
Restructuring, Settlement and Impairment Provisions	2	11
Payments for Restructuring	21
Restructuring Reserve, Settled without Cash	2
Employee Severance [Member] | 2012 Productivity Plan
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	61		68
Restructuring, Settlement and Impairment Provisions	8
Payments for Restructuring	14
Restructuring Reserve, Settled without Cash	1
Other Costs [Member] | 2012 Productivity Plan
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve	3		17
Restructuring, Settlement and Impairment Provisions	(6)
Payments for Restructuring	7
Restructuring Reserve, Settled without Cash	$ 1

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 22, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan

The following table summarizes our total stock-based compensation expense:

	12 Weeks Ended
	3/22/2014			3/23/2013
Stock-based compensation expense	$	72		$	77
Restructuring and impairment benefits	(3		)	—
Total	$	69		$	77

Schedule Of Weighted-Average Black-Scholes Fair Value Assumptions

Our weighted-average Black-Scholes fair value assumptions are as follows:

	12 Weeks Ended
	3/22/2014
Expected life	6 years
Risk free interest rate	1.8	%
Expected volatility (a)	16	%
Expected dividend yield	2.9	%

Schedule of Share-based Payment Award, 2007 Long-Term Incentive Plan

The following table summarizes awards granted under the terms of our 2007 Long-Term Incentive Plan:

	12 Weeks Ended
	3/22/2014			3/23/2013
	Granted (a)	Weighted-Average Grant Price		Granted (a)	Weighted-Average Grant Price
Stock options	3.0	$	79.75	2.5	$	75.75
RSUs	4.2	$	79.76	3.9	$	75.75
PepsiCo equity performance units (PEPUnits)	0.4	$	79.75	0.4	$	75.75

(a) In millions.

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CONDENSED CONSOLIDATED STATEMENT OF EQUITY (USD $) In Millions, unless otherwise specified	Total	Preferred Stock	Repurchased Preferred Stock	Common Stock	Capital in Excess of Par Value		Retained Earnings	Accumulated Other Comprehensive Loss	Repurchased Common Stock	Equity [Member]	Noncontrolling Interests
Balance, beginning of year at Dec. 29, 2012			$ (164)	$ 26	$ 4,178		$ 43,158	$ (5,487)	$ (19,458)		$ 105
Shares issued at Dec. 29, 2012			(0.6)						(322.0)
Balance, beginning of year, shares at Dec. 29, 2012				1,544
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Redemptions, shares			0
Redemptions			(2)
Stock-based compensation expense					77
Other					2
Net income attributable to PepsiCo	1,075						1,075
Cash dividends declared - common							(831)
Cash dividends declared - RSUs							(7)
Currency translation adjustment								(234)			(1)
Cash flow hedges:
Net derivative losses	(6)							(6)
Reclassification of net losses to net income	38							38
Pension and retiree medical:
Reclassification of net losses to net income								52
Remeasurement of net liabilities and translation								31
Unrealized gains on securities, net of tax	(1)							(1)
Share repurchases, shares				1					9
Share repurchases				0					(626)
Stock option exercises, shares									9
Stock option exercises					(113)	[1]			589
Payments Related to Tax Withholding for Share-based Compensation					8
Other (in shares)									1
Other									21
Net income attributable to noncontrolling interests	(10)										10
Acquisitions and divestitures											(1)
Balance, end of period at Mar. 23, 2013	22,464	41	(166)	26	4,136		43,395	(5,607)	(19,474)		113
Total PepsiCo Common Shareholders’ Equity at Mar. 23, 2013	22,476
Shares issued at Mar. 23, 2013		(0.8)	(0.6)						(321.0)
Balance, end of year, shares at Mar. 23, 2013				1,545
Balance, beginning of year at Dec. 28, 2013	24,389		(171)	25	4,095		46,420	(5,127)	(21,004)		110
Shares issued at Dec. 28, 2013			(0.6)						(337.0)
Balance, beginning of year, shares at Dec. 28, 2013				1,529
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Redemptions, shares			0
Redemptions			(2)
Stock-based compensation expense					72
Other					16
Net income attributable to PepsiCo	1,216						1,216
Cash dividends declared - common							(863)
Cash dividends declared - RSUs							(3)
Currency translation adjustment								(873)			(1)
Cash flow hedges:
Net derivative losses	11							11
Reclassification of net losses to net income	6							6
Pension and retiree medical:
Reclassification of net losses to net income								32
Remeasurement of net liabilities and translation								2
Unrealized gains on securities, net of tax	9							9
Share repurchases, shares				10					15
Share repurchases				0					(1,249)
Stock option exercises, shares									3
Stock option exercises					(172)	[1]			204
Payments Related to Tax Withholding for Share-based Compensation					69
Other (in shares)									2
Other									157
Net income attributable to noncontrolling interests	(11)										11
Acquisitions and divestitures
Balance, end of period at Mar. 22, 2014	22,893	41	(173)	25	3,942		46,770	(5,940)	(21,892)	22,893	120
Total PepsiCo Common Shareholders’ Equity at Mar. 22, 2014	$ 22,905									$ 22,905
Shares issued at Mar. 22, 2014		(0.8)	(0.6)						(347.0)
Balance, end of year, shares at Mar. 22, 2014				1,519

[1] Includes total tax benefits of $17 million in 2014 and $26 million in 2013.

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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 22, 2014	Mar. 23, 2013
Net income	$ 1,227	$ 1,085
Other Comprehensive Loss
Currency translation adjustment, pre-tax amount	(874)	(235)
Currency translation adjustment, tax amounts	0
Currency translation adjustment, after-tax amounts	(874)	(235)
Cash flow hedges:
Reclassification of net losses to net income, pre-tax amounts	10	59
Reclassification of net losses to net income, tax amounts	(4)	(21)
Reclassification of net losses to net income, after-tax amounts	6	38
Net derivative gains/(losses), pre-tax amounts	16	(23)
Net derivative gains/(losses), tax amounts	(5)	17
Net derivative gains/(losses), after-tax amounts	11	(6)
Pension and retiree medical:
Reclassification of net losses to net income, pre-tax amounts	48	79
Reclassification of net losses to net income, tax amounts	(16)	(27)
Reclassification of net losses to net income, after-tax amounts	32	52
Remeasurement of net liabilities and translation, pre-tax amounts	3	43
Remeasurement of net liabilities and translation, tax amounts	(1)	(12)
Remeasurement of net liabilities and translation, after-tax amounts	2	31
Unrealized (losses)/gains on securities, pre-tax amounts	18	(1)
Unrealized (losses)/gains on securities, tax amounts	(9)
Unrealized (losses)/gains on securities, after-tax amounts	9	(1)
Total Other Comprehensive Loss, pre-tax amounts	(779)	(78)
Total Other Comprehensive Loss, tax amounts	(35)	(43)
Total Other Comprehensive Loss, after-tax amounts	(814)	(121)
Comprehensive income	413	964
Comprehensive income attributable to noncontrolling interests	(10)	(9)
Comprehensive Income Attributable to PepsiCo	$ 403	$ 955

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Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 22, 2014

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The reclassifications from Accumulated Other Comprehensive Loss to the Condensed Consolidated Statement of Income are summarized as follows:

	12 Weeks Ended
	3/22/2014			3/23/2013
	Amount Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in the Condensed Consolidated Statement of Income
Losses/(gains) on cash flow hedges:
Foreign exchange contracts	$	(6	)	$	3		Cost of sales
Interest rate derivatives	5			51			Interest expense
Commodity contracts	12			6			Cost of sales
Commodity contracts	(1		)	(1		)	Selling, general and administrative expenses
Net losses before tax	10			59
Tax amounts	(4		)	(21		)
Net losses after tax	$	6		$	38
Amortization of pension and retiree medical items:
Net prior service benefit (a)	$	—		$	(1	)
Net actuarial losses (a)	48			80
Net losses before tax	48			79
Tax amounts	(16		)	(27		)
Net losses after tax	$	32		$	52
Total net losses reclassified for the period, net of tax	$	38		$	90

(a) These items are included in the components of net periodic benefit cost for pension and retiree medical plans (see Note 7 for additional details).

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Document and Entity Information	3 Months Ended
	Mar. 22, 2014	Apr. 10, 2014
Document Documentand Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 22, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Trading Symbol	PEP
Entity Registrant Name	PEPSICO INC
Entity Central Index Key	0000077476
Current Fiscal Year End Date	--12-27
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		1,516,052,433

XML

Financial Instruments

3 Months Ended

Mar. 22, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

Financial Instruments

We are exposed to market risks arising from adverse changes in:

• commodity prices, affecting the cost of our raw materials and energy;

• foreign exchange risks and currency restrictions; and

• interest rates.

In the normal course of business, we manage these risks through a variety of strategies, including productivity initiatives, global purchasing programs and hedging strategies. Ongoing productivity initiatives involve the identification and effective implementation of meaningful cost-saving opportunities or efficiencies. Our global purchasing programs include fixed-price purchase orders and pricing agreements. Our hedging strategies include the use of derivatives. Certain derivatives are designated as either cash flow or fair value hedges and qualify for hedge accounting treatment, while others do not qualify and are marked to market through earnings. Cash flows from derivatives used to manage commodity price, foreign exchange or interest rate risks are classified as operating activities in the Condensed Consolidated Statement of Cash Flows. We classify both the earnings and cash flow impact from these derivatives consistent with the underlying hedged item. See “Our Business Risks” in Management’s Discussion and Analysis of Financial Condition and Results of Operations for further unaudited information on our business risks.

For cash flow hedges, the effective portion of changes in fair value are deferred in accumulated other comprehensive loss within common shareholders’ equity until the underlying hedged item is recognized in net income. For fair value hedges, changes in fair value are recognized immediately in earnings, consistent with the underlying hedged item. Hedging transactions are limited to an underlying exposure. As a result, any change in the value of our derivative instruments would be substantially offset by an opposite change in the value of the underlying hedged items. Hedging ineffectiveness and a net earnings impact occur when the change in the value of the hedge does not fully offset the change in the value of the underlying hedged item. If the derivative instrument related to a cash flow hedge is terminated, we continue to defer the related gain or loss as part of accumulated other comprehensive loss and then include it as a component of the cost of the underlying hedged item. Upon determination that the underlying hedged item will not be part of an actual transaction, we recognize the related gain or loss on the hedge in net income immediately.

We also use derivatives that do not qualify for hedge accounting treatment. We account for such derivatives at market value with the resulting gains and losses reflected in our income statement. We do not use derivative instruments for trading or speculative purposes. We perform assessments of our counterparty credit risk regularly, including a review of credit ratings, credit default swap rates and potential nonperformance of the counterparty. Based on our most recent assessment of our counterparty credit risk, we consider this risk to be low. In addition, we enter into derivative contracts with a variety of financial institutions that we believe are creditworthy in order to reduce our concentration of credit risk.

Commodity Prices

We are subject to commodity price risk because our ability to recover increased costs through higher pricing may be limited in the competitive environment in which we operate. This risk is managed through the use of fixed-price contracts and purchase orders, pricing agreements and derivatives. In addition, risk to our supply of certain raw materials is mitigated through purchases from multiple geographies and suppliers. We use derivatives, with terms of no more than three years, to economically hedge price fluctuations related to a portion of our anticipated commodity purchases, primarily for agricultural products, energy and metals. For those derivatives that qualify for hedge accounting treatment, any ineffectiveness is recorded immediately in corporate unallocated expenses. Ineffectiveness was not material for all periods presented. During the next 12 months, we expect to reclassify net losses of $21 million related to these hedges from accumulated other comprehensive loss into net income. Derivatives used to hedge commodity price risk that do not qualify for hedge accounting treatment are marked to market each period with the resulting gains and losses recorded in corporate unallocated expenses as either cost of sales or selling, general and administrative expenses, depending on the underlying commodity. These gains and losses are subsequently reflected in division results when the divisions recognize the cost of the underlying commodity in operating profit.

Our open commodity derivative contracts that qualify for hedge accounting had a face value of $445 million as of March 22, 2014 and $537 million as of March 23, 2013.

Our open commodity derivative contracts that do not qualify for hedge accounting had a face value of $824 million as of March 22, 2014 and $958 million as of March 23, 2013.

Foreign Exchange

We are exposed to foreign exchange risk from foreign currency purchases and foreign currency assets and liabilities created in the normal course of business. We manage this risk through sourcing purchases from local suppliers, negotiating contracts in local currencies with foreign suppliers and through the use of derivatives, primarily forward contracts with terms of no more than two years. Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses in our income statement as incurred.

Our foreign currency derivatives had a total face value of $2.4 billion as of March 22, 2014 and $2.9 billion as of March 23, 2013. During the next 12 months, we expect to reclassify net gains of $21 million related to foreign currency derivative contracts that qualify for hedge accounting from accumulated other comprehensive loss into net income. Ineffectiveness was not material for all periods presented. For foreign currency derivatives that do not qualify for hedge accounting treatment, all losses and gains were offset by changes in the underlying hedged items, resulting in no net material impact on earnings.

Interest Rates

We centrally manage our debt and investment portfolios considering investment opportunities and risks, tax consequences and overall financing strategies. We use various interest rate derivative instruments including, but not limited to, interest rate swaps, cross-currency interest rate swaps, Treasury locks and swap locks to manage our overall interest expense and foreign exchange risk. These instruments effectively change the interest rate and currency of specific debt issuances. Certain of our fixed rate indebtedness has been swapped to floating rates. The notional amount, interest payment and maturity date of the interest rate and cross currency interest rate swaps match the principal, interest payment and maturity date of the related debt. Our Treasury locks and swap locks are entered into to protect against unfavorable interest rate changes relating to forecasted debt transactions.

The notional amounts of the interest rate derivative instruments outstanding as of March 22, 2014 and March 23, 2013 were $7.9 billion and $7.8 billion, respectively. For those interest rate derivative instruments that qualify for cash flow hedge accounting, any ineffectiveness is recorded immediately. Ineffectiveness was not material for all periods presented. During the next 12 months, we expect to reclassify net losses of $22 million related to these hedges from accumulated other comprehensive loss into net income.

As of March 22, 2014, approximately 36% of total debt, after the impact of the related interest rate derivative instruments, was exposed to variable rates, compared to 31% as of December 28, 2013.

Fair Value Measurements

The fair values of our financial assets and liabilities as of March 22, 2014 and March 23, 2013 are categorized as follows:

	2014				2013
	Assets (a)		Liabilities (a)		Assets (a)		Liabilities (a)
Available-for-sale securities (b)	$	154	$	—	$	76	$	—
Short-term investments – index funds (c)	$	182	$	—	$	176	$	—
Prepaid forward contracts (d)	$	24	$	—	$	38	$	—
Deferred compensation (e)	$	—	$	504	$	—	$	502
Derivatives designated as fair value hedging instruments:
Interest rate (f)	$	165	$	2	$	249	$	1
Derivatives designated as cash flow hedging instruments:
Foreign exchange(g)	$	37	$	17	$	27	$	9
Interest rate (f)	25		—		—		24
Commodity (h)	4		33		4		32
	$	66	$	50	$	31	$	65
Derivatives not designated as hedging    instruments:
Foreign exchange (g)	$	16	$	5	$	6	$	4
Interest rate (f)	68		90		112		140
Commodity (h)	11		46		25		54
	$	95	$	141	$	143	$	198
Total derivatives at fair value (i)	$	326	$	193	$	423	$	264
Total	$	686	$	697	$	713	$	766

(a) Financial assets are classified on our condensed consolidated balance sheet within prepaid expenses and other current assets and other assets, with the exception of available-for-sale securities and short-term investments, which are classified as short-term investments. Financial liabilities are classified on our condensed consolidated balance sheet within accounts payable and other current liabilities and other liabilities. Unless specifically indicated, all financial assets and liabilities are categorized as Level 2 assets or liabilities.

(b) Based on the price of common stock. Categorized as a Level 1 asset.

(c) Based on the price of index funds. Categorized as a Level 1 asset.

(d) Based primarily on the price of our common stock.

(e) Based on the fair value of investments corresponding to employees’ investment elections. As of March 22, 2014, all balances are categorized as Level 2 liabilities. As of March 23, 2013, $9 million are categorized as Level 1 liabilities and the remaining balances are categorized as Level 2 liabilities.

(f) Based on LIBOR forward rates and recently reported market transactions of spot and forward rates. As of March 22, 2014 and March 23, 2013, amounts related to non-designated instruments are presented as a net liability on our condensed consolidated balance sheet.

(g) Based on recently reported market transactions of spot and forward rates.

(h) Based on recently reported market transactions, primarily swap arrangements.

(i) Unless otherwise noted, derivative assets and liabilities are presented on a gross basis on our condensed consolidated balance sheet. Amounts subject to enforceable master netting arrangements or similar agreements which are not offset on the condensed consolidated balance sheet as of March 22, 2014 and March 23, 2013 were immaterial. Collateral received against any of our asset positions was immaterial.

The fair value of our debt obligations as of March 22, 2014was $33 billion, based upon prices of similar instruments in the marketplace.

The effective portion of the pre-tax (gains)/losses on our derivative instruments is categorized as follows:

	12 Weeks Ended
	Fair Value/Non- designated Hedges					Cash Flow Hedges
	(Gains)/Losses Recognized in Income Statement (a)					(Gains)/Losses Recognized in Accumulated Other Comprehensive Loss						(Gains)/Losses Reclassified from Accumulated Other Comprehensive Loss into Income Statement (b)
	3/22/2014			3/23/2013		3/22/2014			3/23/2013			3/22/2014			3/23/2013
Foreign exchange	$	(17	)	$	—	$	(18	)	$	(28	)	$	(6	)	$	3
Interest rate	1			27		(5		)	30			5			51
Commodity	(9		)	11		7			21			11			5
Total	$	(25	)	$	38	$	(16	)	$	23		$	10		$	59

(a) Foreign exchange derivative gains/losses are primarily included in selling, general and administrative expenses. Interest rate derivative losses are primarily from fair value hedges and are included in interest expense. These losses are substantially offset by decreases in the value of the underlying debt, which are also included in interest expense. Commodity derivative gains/losses are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.

(b) Foreign exchange derivative gains/losses are primarily included in cost of sales. Interest rate derivative gains/losses are included in interest expense. Commodity derivative gains/losses are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.

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CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 22, 2014	Mar. 23, 2013
Operating Activities
Net income	$ 1,227	$ 1,085
Depreciation and amortization	532	551
Stock-based compensation expense	72	77
Cash payments for merger and integration charges	0	(11)
Restructuring and impairment charges	98	11
Cash payments for restructuring charges	(25)	(30)
Non-cash foreign exchange loss related to Venezuela devaluation	0	111
Excess tax benefits from share-based payment arrangements	(47)	(36)
Pension and retiree medical plan expenses	119	149
Pension and retiree medical plan contributions	(84)	(87)
Deferred income taxes and other tax charges and credits	62	(23)
Change in accounts and notes receivable	(358)	(175)
Change in inventories	(406)	(351)
Change in prepaid expenses and other current assets	(234)	(201)
Change in accounts payable and other current liabilities	(813)	(578)
Change in income taxes payable	175	244
Other, net	(137)	(34)
Net Cash Provided by Operating Activities	181	702
Investing Activities
Capital spending	(355)	(303)
Sales of property, plant and equipment	7	8
Acquisitions and investments in noncontrolled affiliates	(24)	(30)
Divestitures	85	0
Short-term investments, by original maturity – three months or less, net	59	40
Other investing, net	5
Net Cash Used for Investing Activities	(223)	(285)
Financing Activities
Proceeds from issuances of long-term debt	1,990	2,491
Payments of long-term debt	(1,652)	(1,190)
Short-term borrowings, by original maturity
More than three months – proceeds	0	5
More than three months – payments	0	(464)
Three months or less, net	2,125	306
Cash dividends paid	(888)	(831)
Share repurchases – common	(1,249)	(626)
Share repurchases – preferred	(2)	(2)
Proceeds from exercises of stock options	171	449
Excess tax benefits from share-based payment arrangements	47	36
Other financing	0	(1)
Net Cash [Used for] Financing Activities	542	173
Effect of exchange rate changes on cash and cash equivalents	(36)	(172)
Net Increase in Cash and Cash Equivalents	464	418
Cash and Cash Equivalents, Beginning of Year	9,375	6,297
Cash and Cash Equivalents, End of Period	$ 9,839	$ 6,715

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Intangible Assets

3 Months Ended

Mar. 22, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

A summary of our amortizable intangible assets, net is as follows:

	3/22/2014							12/28/2013
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Acquired franchise rights	$	896	$	(85	)	$	811	$	910	$	(83	)	$	827
Reacquired franchise rights	107		(90		)	17		108		(86		)	22
Brands	1,395		(999		)	396		1,400		(996		)	404
Other identifiable intangibles	673		(304		)	369		686		(301		)	385
	$	3,071	$	(1,478	)	$	1,593	$	3,104	$	(1,466	)	$	1,638

The change in the book value of nonamortizable intangible assets is as follows:

	Balance		Translation and Other			Balance
	12/28/2013					3/22/2014
FLNA
Goodwill	$	305	$	(9	)	$	296
Brands	29		(1		)	28
	334		(10		)	324
QFNA
Goodwill	175		—			175
LAF
Goodwill	660		(7		)	653
Brands	206		(1		)	205
	866		(8		)	858
PAB
Goodwill	9,943		(31		)	9,912
Reacquired franchise rights	7,281		(57		)	7,224
Acquired franchise rights	1,551		(6		)	1,545
Brands	146		1			147
	18,921		(93		)	18,828
Europe
Goodwill	5,027		(260		)	4,767
Reacquired franchise rights	760		(29		)	731
Acquired franchise rights	230		—			230
Brands	4,071		(256		)	3,815
	10,088		(545		)	9,543
AMEA
Goodwill	503		4			507
Brands	127		1			128
	630		5			635
Total goodwill	16,613		(303		)	16,310
Total reacquired franchise rights	8,041		(86		)	7,955
Total acquired franchise rights	1,781		(6		)	1,775
Total brands	4,579		(256		)	4,323
	$	31,014	$	(651	)	$	30,363

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Restructuring, Impairment and Integration Charges

3 Months Ended

Mar. 22, 2014

Restructuring and Related Activities [Abstract]

Restructuring, Impairment and Integration Charges

Restructuring, Impairment and Integration Charges

2014 Multi-Year Productivity Plan

The multi-year productivity plan we publicly announced on February 13, 2014 (2014 Productivity Plan) includes the next generation of productivity initiatives that we believe will strengthen our food, snack and beverage businesses by accelerating our investment in manufacturing automation; further optimizing our global manufacturing footprint, including closing certain manufacturing facilities; re-engineering our go-to-market systems in developed markets; expanding shared services; and implementing simplified organization structures to drive efficiency. The 2014 Productivity Plan is in addition to the productivity plan we began implementing in 2012 and is expected to continue the benefits of that plan.

In the 12 weeks ended March 22, 2014, we incurred restructuring and impairment charges of $96 million ($73 million after-tax or $0.05 per share) in conjunction with the 2014 Productivity Plan. All of these net charges were recorded in selling, general and administrative expenses. The majority of the restructuring accrual at March 22, 2014 is expected to be paid by the end of 2014.

A summary of our 2014 Productivity Plan charges is as follows:

	12 Weeks Ended
	3/22/2014
FLNA	$	12
QFNA	2
LAF	1
PAB	82
Europe	2
AMEA	2
Corporate (a)	(5		)
	$	96

(a) Income amount represents adjustments of previously recorded amounts.

A summary of our 2014 Productivity Plan activity in 2014 is as follows:

	Severance and Other Employee Costs			Asset Impairment			Other Costs			Total
Liability as of December 28, 2013	$	30		$	—		$	1		$	31
2014 restructuring charges	47			39			10			96
Cash payments	(2		)	—			(2		)	(4		)
Non-cash charges	(4		)	(39		)	(1		)	(44		)
Liability as of March 22, 2014	$	71		$	—		$	8		$	79

2012 Multi-Year Productivity Plan

The multi-year productivity plan we publicly announced on February 9, 2012 (2012 Productivity Plan) includes actions in every aspect of our business that we believe will strengthen our complementary food, snack and beverage businesses by leveraging new technologies and processes across PepsiCo’s operations, go-to-market and information systems; heightening the focus on best practice sharing across the globe; consolidating manufacturing, warehouse and sales facilities; and implementing simplified organization structures, with wider spans of control and fewer layers of management. The 2012 Productivity Plan continues to enhance PepsiCo’s cost-competitiveness and provide a source of funding for future brand-building and innovation initiatives.

In the 12 weeks ended March 22, 2014, we incurred restructuring charges of $2 million ($3 million after-tax with a nominal amount per share) in conjunction with our 2012 Productivity Plan. All of these net charges were recorded in selling, general and administrative expenses. Substantially all of the restructuring accrual at March 22, 2014 is expected to be paid by the end of 2014.

In the 12 weeks ended March 23, 2013, we incurred restructuring and impairment charges of $11 million ($8 million after-tax or $0.01 per share) in conjunction with the 2012 Productivity Plan. All of these net charges were recorded in selling, general and administrative expenses.

A summary of our 2012 Productivity Plan charges is as follows:

	12 Weeks Ended
	3/22/2014			3/23/2013
FLNA	$	1		$	2
QFNA (a)	—			(1		)
LAF (a)	(5		)	4
PAB	4			—
Europe (a)	(2		)	4
AMEA	2			1
Corporate	2			1
	$	2		$	11

(a) Income amounts represent adjustments of previously recorded amounts.

A summary of our 2012 Productivity Plan activity in 2014 is as follows:

	Severance and Other Employee Costs			Other Costs			Total
Liability as of December 28, 2013	$	68		$	17		$	85
2014 restructuring charges (a)	8			(6		)	2
Cash payments	(14		)	(7		)	(21		)
Non-cash charges	(1		)	(1		)	(2		)
Liability as of March 22, 2014	$	61		$	3		$	64

(a) Income amounts represent adjustments of previously recorded amounts.

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Income Taxes (Tables)

3 Months Ended

Mar. 22, 2014

Income Tax Disclosure [Abstract]

Reserves Rollforward

A rollforward of our reserves for all federal, state and foreign tax jurisdictions is as follows:

	3/22/2014			12/28/2013
Balance, beginning of year	$	1,268		$	2,425
Additions for tax positions related to the current year	22			238
Additions for tax positions from prior years	3			273
Reductions for tax positions from prior years	(2		)	(327		)
Settlement payments	(44		)	(1,306		)
Statute of limitations expiration	(29		)	(30		)
Translation and other	(8		)	(5		)
Balance, end of period	$	1,210		$	1,268

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Net Income Attributable to PepsiCo per Common Share

3 Months Ended

Mar. 22, 2014

Earnings Per Share [Abstract]

Net Income Attributable to PepsiCo per Common Share

Net Income Attributable to PepsiCo per Common Share

The computations of basic and diluted net income attributable to PepsiCo per common share are as follows:

	12 Weeks Ended
	3/22/2014				3/23/2013
	Income			Shares (a)	Income			Shares (a)
Net income attributable to PepsiCo	$	1,216			$	1,075
Preferred shares:
Dividends	—				—
Redemption premium	(1		)		(2		)
Net income available for PepsiCo common shareholders	$	1,215		1,524	$	1,073		1,544
Basic net income attributable to PepsiCo per common share	$	0.80			$	0.69
Net income available for PepsiCo common shareholders	$	1,215		1,524	$	1,073		1,544
Dilutive securities:
Stock options, RSUs, and PEPUnits (b)	—			15	—			18
Employee stock ownership plan (ESOP) convertible       preferred stock	1			1	2			1
Diluted	$	1,216		1,540	$	1,075		1,563
Diluted net income attributable to PepsiCo per common share	$	0.79			$	0.69

(a) Weighted-average common shares outstanding (in millions).

(b) Options to purchase 0.2 million shares in 2014 and 2.6 million shares in 2013 were not included in the calculation of diluted earnings per common share because these options were out-of-the-money. These out-of-the-money options had average exercise prices of $82.25 in 2014 and $75.69 in 2013.

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Pension and Retiree Medical Benefits

3 Months Ended

Mar. 22, 2014

Compensation and Retirement Disclosure [Abstract]

Pension and Retiree Medical Benefits

Pension and Retiree Medical Benefits

The components of net periodic benefit cost for pension and retiree medical plans are as follows:

	12 Weeks Ended
	Pension												Retiree Medical
	3/22/2014			3/23/2013			3/22/2014			3/23/2013			3/22/2014			3/23/2013
	U.S.						International
Service cost	$	91		$	108		$	19		$	22		$	8		$	10
Interest cost	134			121			24			22			14			13
Expected return on plan assets	(181		)	(190		)	(32		)	(30		)	(6		)	(6		)
Amortization of prior service cost/(credit)	5			4			—			—			(5		)	(5		)
Amortization of net losses/(gains)	40			67			9			13			(1		)	—
	89			110			20			27			10			12
Special termination benefits	8			1			—			—			—			—
Total expense	$	97		$	111		$	20		$	27		$	10		$	12

During the first quarter of 2013, we made discretionary contributions of $13 million to our international pension plans.

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Income Taxes

3 Months Ended

Mar. 22, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

A rollforward of our reserves for all federal, state and foreign tax jurisdictions is as follows:

	3/22/2014			12/28/2013
Balance, beginning of year	$	1,268		$	2,425
Additions for tax positions related to the current year	22			238
Additions for tax positions from prior years	3			273
Reductions for tax positions from prior years	(2		)	(327		)
Settlement payments	(44		)	(1,306		)
Statute of limitations expiration	(29		)	(30		)
Translation and other	(8		)	(5		)
Balance, end of period	$	1,210		$	1,268

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Stock-Based Compensation

3 Months Ended

Mar. 22, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The following table summarizes our total stock-based compensation expense:

	12 Weeks Ended
	3/22/2014			3/23/2013
Stock-based compensation expense	$	72		$	77
Restructuring and impairment benefits	(3		)	—
Total	$	69		$	77

Our weighted-average Black-Scholes fair value assumptions are as follows:

	12 Weeks Ended
	3/22/2014
Expected life	6 years
Risk free interest rate	1.8	%
Expected volatility (a)	16	%
Expected dividend yield	2.9	%

(a) Reflects movements in our stock price over the most recent historical period equivalent to the expected life.

The following table summarizes awards granted under the terms of our 2007 Long-Term Incentive Plan:

	12 Weeks Ended
	3/22/2014			3/23/2013
	Granted (a)	Weighted-Average Grant Price		Granted (a)	Weighted-Average Grant Price
Stock options	3.0	$	79.75	2.5	$	75.75
RSUs	4.2	$	79.76	3.9	$	75.75
PepsiCo equity performance units (PEPUnits)	0.4	$	79.75	0.4	$	75.75

(a) In millions.

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Debt Obligations and Commitments

3 Months Ended

Mar. 22, 2014

Debt Obligations and Commitments [Abstract]

Debt Obligations and Commitments

Debt Obligations

In the first quarter of 2014, we issued:

• $750 million of 0.950% senior notes maturing in February 2017; and

• $1.250 billion of 3.600% senior notes maturing in March 2024.

The net proceeds from the issuances of the above notes were used for general corporate purposes, including the repayment of commercial paper.

Also in the first quarter of 2014, $1.7 billion of senior notes matured.

As of March 22, 2014, we had $4.9 billion of commercial paper outstanding.

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Restructuring, Impairment and Integration Charges 2014 Productivity Plan Activity (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended				3 Months Ended		3 Months Ended		3 Months Ended
	Mar. 22, 2014	Mar. 23, 2013	Mar. 22, 2014 2014 Productivity Plan	Dec. 28, 2013 2014 Productivity Plan	Mar. 22, 2014 Employee Severance [Member] 2014 Productivity Plan	Dec. 28, 2013 Employee Severance [Member] 2014 Productivity Plan	Mar. 22, 2014 Asset Impairment [Member] 2014 Productivity Plan	Dec. 28, 2013 Asset Impairment [Member] 2014 Productivity Plan	Mar. 22, 2014 Other Costs [Member] 2014 Productivity Plan	Dec. 28, 2013 Other Costs [Member] 2014 Productivity Plan
Restructuring Cost and Reserve [Line Items]
Restructuring Reserve			$ 79	$ 31	$ 71	$ 30	$ 0	$ 0	$ 8	$ 1
Restructuring, Settlement and Impairment Provisions			96		47		39		10
Payments for Restructuring	25	30	4		2				2
Restructuring Reserve, Settled without Cash			$ 44		$ 4		$ 39		$ 1

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Restructuring, Impairment and Integration Charges (Tables)

3 Months Ended

Mar. 22, 2014

Restructuring and Related Activities [Abstract]

2014 Schedule of Restructuring Related Costs [Table Text Block]

A summary of our 2014 Productivity Plan charges is as follows:

	12 Weeks Ended
	3/22/2014
FLNA	$	12
QFNA	2
LAF	1
PAB	82
Europe	2
AMEA	2
Corporate (a)	(5		)
	$	96

(a) Income amount represents adjustments of previously recorded amounts.

Summary Of 2014 Productivity Plan Activity

A summary of our 2014 Productivity Plan activity in 2014 is as follows:

	Severance and Other Employee Costs			Asset Impairment			Other Costs			Total
Liability as of December 28, 2013	$	30		$	—		$	1		$	31
2014 restructuring charges	47			39			10			96
Cash payments	(2		)	—			(2		)	(4		)
Non-cash charges	(4		)	(39		)	(1		)	(44		)
Liability as of March 22, 2014	$	71		$	—		$	8		$	79

2012 Schedule of Restructuring and Related Costs

A summary of our 2012 Productivity Plan charges is as follows:

	12 Weeks Ended
	3/22/2014			3/23/2013
FLNA	$	1		$	2
QFNA (a)	—			(1		)
LAF (a)	(5		)	4
PAB	4			—
Europe (a)	(2		)	4
AMEA	2			1
Corporate	2			1
	$	2		$	11

(a) Income amounts represent adjustments of previously recorded amounts.

Summary Of 2012 Productivity Plan Activity

A summary of our 2012 Productivity Plan activity in 2014 is as follows:

	Severance and Other Employee Costs			Other Costs			Total
Liability as of December 28, 2013	$	68		$	17		$	85
2014 restructuring charges (a)	8			(6		)	2
Cash payments	(14		)	(7		)	(21		)
Non-cash charges	(1		)	(1		)	(2		)
Liability as of March 22, 2014	$	61		$	3		$	64

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Mar. 22, 2014

Equity [Abstract]

Reclassifications out of Accumulated Other Comprehensive Loss

The reclassifications from Accumulated Other Comprehensive Loss to the Condensed Consolidated Statement of Income are summarized as follows:

	12 Weeks Ended
	3/22/2014			3/23/2013
	Amount Reclassified from Accumulated Other Comprehensive Loss						Affected Line Item in the Condensed Consolidated Statement of Income
Losses/(gains) on cash flow hedges:
Foreign exchange contracts	$	(6	)	$	3		Cost of sales
Interest rate derivatives	5			51			Interest expense
Commodity contracts	12			6			Cost of sales
Commodity contracts	(1		)	(1		)	Selling, general and administrative expenses
Net losses before tax	10			59
Tax amounts	(4		)	(21		)
Net losses after tax	$	6		$	38
Amortization of pension and retiree medical items:
Net prior service benefit (a)	$	—		$	(1	)
Net actuarial losses (a)	48			80
Net losses before tax	48			79
Tax amounts	(16		)	(27		)
Net losses after tax	$	32		$	52
Total net losses reclassified for the period, net of tax	$	38		$	90

(a) These items are included in the components of net periodic benefit cost for pension and retiree medical plans (see Note 7 for additional details).

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Basic and Diluted Net Income Attributable to PepsiCo (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 22, 2014		Mar. 23, 2013
Earnings Per Share [Abstract]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0.2		2.6
Net income attributable to PepsiCo	$ 1,216		$ 1,075
Preferred Stock [Abstract]
Dividends
Redemption premium	(1)		(2)
Net income available for PepsiCo common shareholders - Value	1,215		1,073
Net income available for PepsiCo common shareholders - Shares	1,524	[1]	1,544	[1]
Basic net income attributable to PepsiCo per common share (in dollars per share)	$ 0.80		$ 0.69
Dilutive Securities [Abstract]
Stock options and RSUs - Shares	15	[1],[2]	18	[1],[2]
ESOP convertible preferred stock - Value	1		2
ESOP convertible preferred stock - Shares	1	[1]	1	[1]
Diluted shares - Value	$ 1,216		$ 1,075
Diluted shares - Shares	1,540	[1]	1,563	[1]
Diluted net income attributable to PepsiCo per common share (in dollars per share)	$ 0.79		$ 0.69
Out-of-the-money options average exercise price	$ 82.25		$ 75.69

[1] Weighted-average common shares outstanding (in millions).

[2] Options to purchase 0.2 million shares in 2014 and 2.6 million shares in 2013 were not included in the calculation of diluted earnings per common share because these options were out-of-the-money. These out-of-the-money options had average exercise prices of $82.25 in 2014 and $75.69 in 2013.

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Weighted Average Black Scholes Fair Value Assumptions (Detail)	3 Months Ended
	Mar. 22, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Expected life	6 years
Risk free interest rate	1.80%
Expected volatility	16.00%	[1]
Expected dividend yield	2.90%

[1] Reflects movements in our stock price over the most recent historical period equivalent to the expected life.

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CONDENSED CONSOLIDATED BALANCE SHEET (USD $) In Millions, unless otherwise specified	Mar. 22, 2014	Dec. 28, 2013
Current Assets
Cash and cash equivalents	$ 9,839	$ 9,375
Short-term investments	247	303
Accounts and notes receivable, less allowance: 3/14 - $153 and 12/13 - $145	7,262	6,954
Inventories
Raw materials	1,794	1,732
Work-in-process	235	168
Finished goods	1,719	1,509
Inventory, Net, Total	3,748	3,409
Prepaid expenses and other current assets	2,189	2,162
Total Current Assets	23,285	22,203
Property, Plant and Equipment	36,776	36,961
Accumulated Depreciation	(18,647)	(18,386)
Property, Plant and Equipment, Net, Total	18,129	18,575
Amortizable Intangible Assets, net	1,593	1,638
Goodwill	16,310	16,613
Other Nonamortizable Intangible Assets	14,053	14,401
Nonamortizable Intangible Assets	30,363	31,014
Investments in Noncontrolled Affiliates	1,890	1,841
Other Assets	2,233	2,207
Total Assets	77,493	77,478
Current Liabilities
Short-term obligations	7,832	5,306
Accounts payable and other current liabilities	11,625	12,533
Total Current Liabilities	19,457	17,839
Long-term Debt Obligations	24,240	24,333
Other Liabilities	4,811	4,931
Deferred Income Taxes	6,092	5,986
Total Liabilities	54,600	53,089
Commitments and Contingencies
Preferred Stock, no par value	41	41
PepsiCo Common Shareholders' Equity
Common stock, par value 12/3¢ per share (authorized 3,600 shares, issued, net of repurchased common stock at par value: 1,519 and 1,529 shares, respectively)	25	25
Capital in excess of par value	3,942	4,095
Retained earnings	46,770	46,420
Accumulated other comprehensive loss	(5,940)	(5,127)
Total PepsiCo Common Shareholders’ Equity	22,905	24,409
Noncontrolling interests	120	110
Total Equity	22,893	24,389
Total Liabilities and Equity	77,493	77,478
Preferred Stock
Current Liabilities
Repurchased Preferred Stock	(173)	(171)
PepsiCo Common Shareholders' Equity
Repurchased common stock, in excess of par value (347 and 337 shares, respectively)	(173)	(171)
Total Equity	41
Common Stock
Current Liabilities
Repurchased Preferred Stock	(21,892)	(21,004)
PepsiCo Common Shareholders' Equity
Repurchased common stock, in excess of par value (347 and 337 shares, respectively)	(21,892)	(21,004)
Total Equity	$ 25	$ 25

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Recent Accounting Pronouncements

3 Months Ended

Mar. 22, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In July 2013, the Financial Accounting Standards Board (FASB) issued new accounting guidance that requires an entity to net its liability for unrecognized tax positions against a net operating loss carryforward, a similar tax loss or a tax credit carryforward when settlement in this manner is available under the tax law. The provisions of this new guidance were effective as of the beginning of our 2014 fiscal year and did not have a material impact on our financial statements.

In December 2011, the FASB issued new disclosure requirements that are intended to enhance current disclosures on offsetting financial assets and liabilities. The new disclosures require an entity to disclose both gross and net information about derivative instruments accounted for in accordance with the guidance on derivatives and hedging that are eligible for offset on the balance sheet and instruments and transactions subject to an agreement similar to a master netting arrangement. The provisions of the new disclosure requirements were effective as of the beginning of our 2014 fiscal year. Accordingly, we have included enhanced footnote disclosure in Note 10.

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Financial Instruments (Tables)

3 Months Ended

Mar. 22, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Values of Financial Assets and Liabilities

The fair values of our financial assets and liabilities as of March 22, 2014 and March 23, 2013 are categorized as follows:

	2014				2013
	Assets (a)		Liabilities (a)		Assets (a)		Liabilities (a)
Available-for-sale securities (b)	$	154	$	—	$	76	$	—
Short-term investments – index funds (c)	$	182	$	—	$	176	$	—
Prepaid forward contracts (d)	$	24	$	—	$	38	$	—
Deferred compensation (e)	$	—	$	504	$	—	$	502
Derivatives designated as fair value hedging instruments:
Interest rate (f)	$	165	$	2	$	249	$	1
Derivatives designated as cash flow hedging instruments:
Foreign exchange(g)	$	37	$	17	$	27	$	9
Interest rate (f)	25		—		—		24
Commodity (h)	4		33		4		32
	$	66	$	50	$	31	$	65
Derivatives not designated as hedging    instruments:
Foreign exchange (g)	$	16	$	5	$	6	$	4
Interest rate (f)	68		90		112		140
Commodity (h)	11		46		25		54
	$	95	$	141	$	143	$	198
Total derivatives at fair value (i)	$	326	$	193	$	423	$	264
Total	$	686	$	697	$	713	$	766

(a) Financial assets are classified on our condensed consolidated balance sheet within prepaid expenses and other current assets and other assets, with the exception of available-for-sale securities and short-term investments, which are classified as short-term investments. Financial liabilities are classified on our condensed consolidated balance sheet within accounts payable and other current liabilities and other liabilities. Unless specifically indicated, all financial assets and liabilities are categorized as Level 2 assets or liabilities.

(b) Based on the price of common stock. Categorized as a Level 1 asset.

(c) Based on the price of index funds. Categorized as a Level 1 asset.

(d) Based primarily on the price of our common stock.

(e) Based on the fair value of investments corresponding to employees’ investment elections. As of March 22, 2014, all balances are categorized as Level 2 liabilities. As of March 23, 2013, $9 million are categorized as Level 1 liabilities and the remaining balances are categorized as Level 2 liabilities.

(f) Based on LIBOR forward rates and recently reported market transactions of spot and forward rates. As of March 22, 2014 and March 23, 2013, amounts related to non-designated instruments are presented as a net liability on our condensed consolidated balance sheet.

(g) Based on recently reported market transactions of spot and forward rates.

(h) Based on recently reported market transactions, primarily swap arrangements

Effective Portion Of Pre-Tax (Gains)/Losses On Derivative Instruments

The effective portion of the pre-tax (gains)/losses on our derivative instruments is categorized as follows:

	12 Weeks Ended
	Fair Value/Non- designated Hedges					Cash Flow Hedges
	(Gains)/Losses Recognized in Income Statement (a)					(Gains)/Losses Recognized in Accumulated Other Comprehensive Loss						(Gains)/Losses Reclassified from Accumulated Other Comprehensive Loss into Income Statement (b)
	3/22/2014			3/23/2013		3/22/2014			3/23/2013			3/22/2014			3/23/2013
Foreign exchange	$	(17	)	$	—	$	(18	)	$	(28	)	$	(6	)	$	3
Interest rate	1			27		(5		)	30			5			51
Commodity	(9		)	11		7			21			11			5
Total	$	(25	)	$	38	$	(16	)	$	23		$	10		$	59

(a) Foreign exchange derivative gains/losses are primarily included in selling, general and administrative expenses. Interest rate derivative losses are primarily from fair value hedges and are included in interest expense. These losses are substantially offset by decreases in the value of the underlying debt, which are also included in interest expense. Commodity derivative gains/losses are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.

(b) Foreign exchange derivative gains/losses are primarily included in cost of sales. Interest rate derivative gains/losses are included in interest expense. Commodity derivative gains/losses are included in either cost of sales or selling, general and administrative expenses, depending on the underlying commodity.

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Change in Book Value of Nonamortizable Intangible Assets (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 22, 2014
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	$ 31,014
Translation and Other	(651)
Balance, End	30,363
FLNA
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	334
Translation and Other	(10)
Balance, End	324
LAF
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	866
Translation and Other	(8)
Balance, End	858
PAB
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	18,921
Translation and Other	(93)
Balance, End	18,828
Europe
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	10,088
Translation and Other	(545)
Balance, End	9,543
AMEA
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	630
Translation and Other	5
Balance, End	635
Goodwill
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	16,613
Translation and Other	(303)
Balance, End	16,310
Goodwill | FLNA
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	305
Translation and Other	(9)
Balance, End	296
Goodwill | QFNA
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	175
Translation and Other
Balance, End	175
Goodwill | LAF
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	660
Translation and Other	(7)
Balance, End	653
Goodwill | PAB
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	9,943
Translation and Other	(31)
Balance, End	9,912
Goodwill | Europe
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	5,027
Translation and Other	(260)
Balance, End	4,767
Goodwill | AMEA
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	503
Translation and Other	4
Balance, End	507
Brands
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	4,579
Translation and Other	(256)
Balance, End	4,323
Brands | FLNA
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	29
Translation and Other	(1)
Balance, End	28
Brands | LAF
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	206
Translation and Other	(1)
Balance, End	205
Brands | PAB
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	146
Translation and Other	1
Balance, End	147
Brands | Europe
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	4,071
Translation and Other	(256)
Balance, End	3,815
Brands | AMEA
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	127
Translation and Other	1
Balance, End	128
Reacquired Franchise Rights
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	8,041
Translation and Other	(86)
Balance, End	7,955
Reacquired Franchise Rights | PAB
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	7,281
Translation and Other	(57)
Balance, End	7,224
Reacquired Franchise Rights | Europe
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	760
Translation and Other	(29)
Balance, End	731
Acquired franchise rights
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	1,781
Translation and Other	(6)
Balance, End	1,775
Acquired franchise rights | PAB
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	1,551
Translation and Other	(6)
Balance, End	1,545
Acquired franchise rights | Europe
Indefinite-lived Intangible Assets [Roll Forward]
Balance, Beginning	230
Translation and Other
Balance, End	$ 230

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Basis of Presentation (Tables)

3 Months Ended

Mar. 22, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Segment Reporting Information, By Segment

Our four business units comprise six reportable segments (also referred to as divisions), as follows:

• FLNA,

• QFNA,

• LAF,

• PAB,

• Europe, and

• AMEA.

Net revenue and operating profit of each division are as follows:

	12 Weeks Ended
	Net Revenue				Operating Profit
	3/22/2014		3/23/2013		3/22/2014			3/23/2013
FLNA	$	3,219	$	3,123	$	862		$	828
QFNA	634		634		160			180
LAF	1,338		1,367		232			216
PAB	4,426		4,420		429			565
Europe	1,961		1,942		152			88
AMEA	1,045		1,095		194			184
Total division	12,623		12,581		2,029			2,061
Corporate Unallocated
Mark-to-market net gains/(losses)					34			(16		)
Restructuring and impairment charges					3			(1		)
Venezuela currency devaluation					—			(124		)
Other					(259		)	(262		)
	$	12,623	$	12,581	$	1,807		$	1,658

Segment Reporting Information By Total Assets

	Total Assets
	3/22/2014		12/28/2013
FLNA	$	5,278	$	5,308
QFNA	998		983
LAF	4,897		4,829
PAB	30,648		30,350
Europe	17,893		18,702
AMEA	5,922		5,754
Total division	65,636		65,926
Corporate (a)	11,857		11,552
	$	77,493	$	77,478

(a) Corporate assets consist principally of cash and cash equivalents, short-term investments, derivative instruments, property, plant and equipment and certain pension and tax assets.