PepsiCo (PEP) 10-K risk factor changes: FY2018 vs FY2017

You should carefully consider the risks described below in addition to the other information set forth in this Annual Report on Form [removed: 10-K.][added: 10-K, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations section and the consolidated financial statements and related notes.]

Demand for our products depends in part on our ability to anticipate and effectively respond to shifts in consumer trends and preferences, including increased demand for products that meet the needs of consumers who are concerned with: health and wellness (including products that have less added sugars, sodium and saturated fat); convenience (including responding to changes in in-home and on-the-go consumption patterns and methods of distribution of our products to customers and [removed: consumers);] [added: consumers, including through e-commerce and hard discounters);] or the location of origin or source of [removed: the] ingredients and products (including the environmental impact related to [removed: the] production of our products).

[removed: Consumer preferences have been evolving, and are expected to continue to evolve, due to a variety of factors, including: changes in consumer demographics, including the aging of the general population and the emergence of the millennial and younger generations who have differing spending and consumption habits; consumer concerns or perceptions regarding the nutrition profile of certain of our products, including the presence of added sugar, sodium and saturated fat in certain of our products; growing demand for organic or locally sourced ingredients, or consumer concerns or perceptions (whether or not valid) regarding the] health effects of ingredients or substances present in certain of our products, such as 4-MeI, acrylamide, artificial flavors and colors, artificial sweeteners, aspartame, caffeine, furfuryl alcohol, high-fructose corn syrup, partially hydrolyzed oils, saturated fat, sodium, sugar, trans fats or other product ingredients, substances or attributes, including genetically engineered ingredients; taxes or other restrictions, including labeling requirements, imposed on our products; consumer concerns or perceptions regarding packaging materials, including [added: single-use and other plastic packaging, and] their environmental impact; changes in package or portion size; changes in social trends that impact travel, vacation or leisure activity patterns; changes in weather patterns or seasonal consumption cycles; the continued acceleration of e-commerce and other methods of purchasing products; negative publicity (whether or not valid) resulting from regulatory actions, litigation against us or other companies in our industry or negative or inaccurate posts or comments in the media, including social media, about us, our employees, our products or advertising campaigns and marketing programs; perception of [removed: social media posts or other information disseminated by us or] our [removed: employees and agents, customers, suppliers, bottlers, distributors, joint venture partners or other third parties; perception of our] employees, agents, customers, suppliers, bottlers, [added: contract manufacturers,] distributors, joint venture partners or other third parties or [removed: the] [added: our respective social media posts,] business practices [removed: of such parties;] [added: or other information disseminated by or regarding them or us;] product boycotts; or a downturn in economic conditions.

Any of these factors may reduce consumers’ willingness to purchase our products and any inability on our part to anticipate or react to such changes could result in reduced demand for our products [removed: and erosion of] [added: or erode] our competitive and financial position and could adversely affect our business, reputation, financial condition or results of operations.

Demand for our products is also dependent in part on product quality, product and marketing innovation and production and distribution, including our ability to: maintain a robust pipeline of new products; improve the quality of existing products; extend our portfolio of products in growing markets and [removed: categories;] [added: categories (through acquisitions, such as SodaStream, and innovation, such as increasing non-carbonated beverage offerings and other alternatives to, or reformulations of, carbonated beverage offerings);] respond to cultural differences and regional consumer preferences (whether through developing or acquiring new products that are responsive to such preferences); monitor and adjust our use of ingredients [added: and packaging materials] (including to respond to applicable regulations); develop [removed: or acquire a broader portfolio of product choices, including by continuing to increase non-carbonated beverage offerings and other alternatives to traditional carbonated beverage offerings and, in some cases, reformulations of our traditional carbonated beverage offerings; develop] sweetener alternatives and innovation; [added: increase the recyclability or recoverability of our packaging;] improve the [removed: production, packaging] [added: production] and distribution of our [added: products; respond to competitive product and pricing pressures and changes in distribution channels, including in the e-commerce channel; and implement effective advertising campaigns and marketing programs, including successfully adapting to a rapidly changing media environment through the use of social media and online advertising campaigns and marketing programs.]

Although we devote significant resources to the items mentioned above, there can be no assurance as to our continued ability to develop, launch, maintain or distribute successful new products or variants of existing products in a timely manner (including [removed: to] correctly [removed: anticipate] [added: anticipating] or effectively [removed: react] [added: reacting] to changes in consumer preferences) or to develop and effectively execute advertising and marketing campaigns that appeal to customers and consumers.

Our failure to make the right strategic investments to drive innovation or successfully launch new products or variants of existing products or effectively [added: market or] distribute our products could [removed: decrease] [added: reduce] demand for our [removed: existing products by negatively affecting consumer perception of our existing brands and may] [added: products,] result in inventory write-offs and [removed: other costs that] [added: erode our competitive and financial position and] could adversely affect our business, financial condition or results of operations.

The conduct of our business is subject to various laws and regulations administered by federal, state and local governmental agencies in the United States, as well as government entities and agencies outside the United States, including laws and regulations relating to the production, storage, distribution, sale, display, advertising, marketing, labeling, content, quality, safety, transportation, [added: packaging,] disposal, recycling and use of our products, as well as our employment and occupational health and safety practices and protection of personal information.

For example, products containing genetically engineered ingredients are subject to [removed: varying] [added: differing] regulations and restrictions in the jurisdictions in which our products are made, manufactured, distributed or [removed: sold.][added: sold, as is the packaging, disposal and recyclability of our products.]

Such changes may include changes in: food and drug laws; laws related to product labeling, advertising and marketing [removed: practices;] [added: practices, including restrictions on the audience to whom products are marketed;] laws and treaties related to international trade, including laws regarding the import or export of our products or ingredients used in our products and tariffs; laws and programs [removed: restricting the sale and advertising of certain of our products, including restrictions on the audience to whom products are marketed; laws and programs] aimed at reducing, restricting or eliminating ingredients or substances in, or attributes of, certain of our products; laws and programs aimed at discouraging the consumption or altering the package or portion size of certain of our products, including laws imposing restrictions on the use of government funds or [removed: programs, such as the Supplemental Nutrition Assistance Program (included within the Farm Bill in the United States),] [added: programs] to purchase certain of our products; increased regulatory scrutiny of, and increased litigation involving product claims and concerns (whether or not valid) regarding the effects on health of ingredients or substances in, or attributes of, certain of our products, including without limitation those found in energy drinks; state consumer protection laws; laws regulating the protection of personal information; cyber-security regulations; regulatory initiatives, including the imposition or proposed imposition of new or increased taxes or other measures impacting the manufacture, distribution or sale of our products; accounting rules and interpretations; employment laws; privacy laws; laws regulating the price we may charge for our products; laws regulating water rights and access to and use of water or utilities; environmental laws, including laws relating to the regulation of water treatment and discharge of wastewater and air emissions and laws relating to the disposal, recovery or recycling of our products and their packaging.

[added: Changes in regulatory requirements or changing interpretations thereof, and differing or competing regulations and standards across the markets where our] products are made, manufactured, distributed or sold, may result in higher compliance costs, capital expenditures and higher production costs, which could adversely affect our business, reputation, financial condition or results of operations.

The imposition [removed: by any jurisdiction in the United States or outside the United States] of new laws, regulations or governmental policy and their related interpretations, or changes in any of the foregoing, including taxes, labeling, [removed: product] [added: product, production, recovery] or [removed: production requirements] [added: recycling requirements,] or other limitations on, or pertaining to, the sale or advertisement of certain of our products, ingredients or substances contained in, or attributes of, our [removed: products or] [added: products,] commodities used in the production of our [removed: products,] [added: products or use, disposal, recovery or recyclability of our products and their packaging,] may further alter the way in which we do business and, therefore, may continue to increase our costs or liabilities or reduce demand for our products, which could adversely affect our business, financial condition or results of operations.

If one jurisdiction imposes or proposes to impose new requirements or restrictions, other jurisdictions may [removed: follow and the requirements or restrictions, or proposed requirements or restrictions, may also result in adverse publicity (whether or not valid).][added: follow.]

In addition, studies (whether or not scientifically valid) [removed: are] [added: have been and continue to be] underway by third parties purporting to assess the health implications of consumption of certain ingredients or substances present in certain of our [removed: products,] [added: products or packaging materials,] such as 4-MeI, acrylamide, caffeine, [added: glyphosate,] furfuryl alcohol, added sugars, [removed: sodium and] [added: sodium,] saturated [removed: fat.][added: fat and plastic.]

Third parties have also published documents or studies claiming (whether or not valid) that taxes can address consumer consumption of sugar-sweetened beverages and [removed: other] foods high in sugar, sodium or saturated fat.

If, as a result of these studies and documents or otherwise, there is an increase in consumer concerns (whether or not valid) about the health implications of consumption of [added: certain of] our products, an increase in the number of jurisdictions that impose taxes on our products, or an increase in new labeling, product or production requirements or other restrictions on the manufacturing, sale or display of our products, demand for our products could decline, or we could be subject [removed: to lawsuits or new regulations that could affect sales of our products, any of which could adversely affect our business, financial condition or results of operations.]

[removed: Violations of] [added: Failure to comply with such] laws or regulations could subject us to criminal or civil enforcement actions, including fines, [added: injunctions, product recalls,] penalties, disgorgement of profits or activity restrictions, any of which could [removed: result in adverse publicity or] [added: adversely] affect our business, [added: reputation,] financial condition or results of operations.

[added: We cannot guarantee that our costs in relation to these matters] will not exceed our estimates or otherwise have an adverse effect on our business, financial condition or results of operations.

By contrast, [removed: the United Kingdom enacted] [added: France revised an existing flat tax to become] a graduated tax, effective [removed: April] [added: July] 2018, in which the per-ounce tax rate is tied to the amount of added sugar present in the beverage: the higher the amount of added sugar, the higher the per-ounce tax [removed: rate and] [added: rate, while] Saudi Arabia enacted, effective June 2017, a flat tax rate of [removed: 50%] [added: 50%, and Jordan increased, effective January 2018, its flat tax from 10% to 20%,] on the retail price of carbonated soft drinks.

These tax measures, whatever their scope or form, could increase the cost of our products, reduce [added: consumer demand and] overall consumption of our products, lead to negative publicity (whether based on scientific fact or not) or leave consumers with the perception (whether or not valid) that our products do not meet their health and wellness needs.

Certain jurisdictions in which our products are made, manufactured, distributed or sold have either imposed, or are considering imposing, product labeling or warning requirements or limitations on the marketing or [removed: sale of certain of our products as a result of ingredients or substances contained in such products.]

Changes in laws and regulations relating to [removed: packaging] [added: the use] or disposal of [added: plastics or other packaging of] our products could continue to increase our [removed: costs and] [added: costs,] reduce demand for our products or otherwise have an adverse impact on our business, reputation, financial condition or results of operations.

Certain of our [added: food and beverage] products are sold in [added: plastic or other] packaging designed to be recoverable for recycling but not all packaging [added: is recovered, whether due to low value, lack of infrastructure or otherwise.]

Further, our reputation could be damaged [added: for failure to achieve our sustainability goals with respect to our plastics use, including our goal to use 25% recycled content in our plastic packaging by 2025, or] if we or others in our industry do not act, or are perceived not to act, responsibly with respect to packaging or disposal of our products.

Our beverage, food and snack products are in highly competitive categories and markets and compete against products of international beverage, food and snack companies that, like us, operate in multiple geographies, as well as regional, [removed: local,] [added: local] and private label [removed: manufacturers,] [added: manufacturers and] economy brands and other competitors.

Other beverage, food and snack competitors include, but are not limited to, [removed: DPSG,] [added: Campbell Soup Company, Conagra Brands, Inc.,] Kellogg Company, [added: Keurig Dr Pepper Inc.,] The Kraft Heinz Company, [added: Link Snacks, Inc.,] Mondelēz International, Inc., Monster Beverage Corporation, Nestlé [removed: S.A.,] [added: S.A. and] Red Bull [removed: GmbH and Snyder’s-Lance, Inc.][added: GmbH.]

If we are unable to effectively promote our existing products or introduce new products, if our advertising or marketing campaigns are not [removed: effective] [added: effective, if our competitors spend more aggressively than we do] or if we are otherwise unable to effectively respond to pricing pressure or compete effectively (including in distributing our products effectively and cost efficiently through all existing and emerging channels of trade, including through e-commerce and hard discounters), we may be unable to grow or maintain sales or category share or we may need to increase capital, marketing or other expenditures, which may adversely affect our business, financial condition or results of operations.

The results of elections, referendums or other political conditions [added: (including government shutdowns)] in [removed: the] [added: these] markets [removed: in which our products] [added: could impact how existing laws, regulations and government programs or policies] are [removed: made, manufactured, distributed] [added: implemented] or [removed: sold could] create uncertainty [removed: regarding] [added: as to] how [removed: existing laws and] [added: such laws,] regulations [added: and government programs or policies] may change, including with respect to [added: tariffs,] sanctions, climate change regulation, taxes, [added: benefit programs,] the movement of goods, services and people between countries and other matters, and could result in exchange rate fluctuation, volatility in global stock markets and global economic [removed: uncertainty.][added: uncertainty or adversely affect demand for our products.]

Any changes in, or the imposition of new laws, regulations or governmental policy and their related interpretations due to elections, [added: referendums or other political conditions could have an adverse impact on our business, financial conditions and results of operations.]

[removed: The following factors could reduce demand for our products or otherwise impede the growth of our business in developing and emerging markets: unstable economic, political or social conditions; acts of war, terrorist acts, and civil unrest; increased competition; volatility in the economic growth of certain of these markets and the related impact on developed countries who export to these markets; volatile oil prices and the impact on the local economy in certain of these markets; our inability to acquire businesses, form strategic business alliances or to make necessary infrastructure investments; our inability to complete divestitures or refranchisings; imposition of new or increased labeling, product or production requirements, or other restrictions; imposition of new or increased sanctions against, or other regulations restricting contact with, certain countries in these] markets, or imposition of new or increased sanctions against U.S. multinational corporations [added: or tariffs on the products of such corporations] operating in these markets; actions, such as removing our products from shelves, taken by retailers in response to U.S. trade [removed: sanctions] [added: sanctions, tariffs] or other governmental action or policy; foreign ownership restrictions; nationalization of our assets or the assets of our suppliers, bottlers, [added: contract manufacturers,] distributors, joint venture partners or other third parties; imposition of taxes on our products or the ingredients or substances used in our products; government-mandated closure, or threatened closure, of our operations or the operations of our suppliers, bottlers, [added: contract manufacturers,] distributors, joint venture partners, customers or other third parties; restrictions on the import or export of our products or ingredients or substances used in our products; regulations relating to the repatriation of funds currently held in foreign jurisdictions to the United States; [removed: highly-inflationary] [added: highly inflationary] economies, devaluation or fluctuation, such as the devaluation of the [removed: Egyptian pound,] [added: Russian ruble,] Turkish lira, [removed: Pound sterling,] [added: Brazilian real,] Argentine peso and the Mexican peso, or demonetization of currency; regulations on the transfer of funds to and from foreign countries, currency controls or other currency exchange restrictions, which result in significant cash balances in foreign countries, from time to time, or could significantly affect our ability to effectively manage our operations in certain of these markets and could result in the deconsolidation of such [removed: businesses;] [added: businesses, such as occurred with respect to our Venezuelan businesses which were deconsolidated at] the [added: end of the third quarter of 2015; the] lack of well-established or reliable legal systems; increased costs of doing business due to compliance with complex foreign and U.S. laws and regulations that apply to our international operations, including the Foreign Corrupt Practices Act, the U.K. Bribery Act and the Trade Sanctions Reform and Export Enhancement Act; and adverse consequences, such as the assessment of fines or penalties, for any failure to comply with these laws and regulations.

If we are unable to expand our businesses in developing and emerging markets, effectively operate, or manage the risks associated with operating, in these markets, or achieve the return on capital we expect from our investments in these markets, our [removed: reputation,] business, [added: reputation,] financial condition or results of operations could be adversely affected.

[added: Our business or financial results may be adversely impacted by uncertain or unfavorable economic conditions in the United States and globally, including: adverse changes in interest rates, tax laws or tax rates; volatile commodity markets, including speculative influences; highly-inflationary] economies, devaluation, fluctuation or demonetization; contraction in the availability of credit in the marketplace due to legislation or economic conditions; the effects of government initiatives, including demonetization, austerity or stimulus measures to manage economic conditions and any changes to or cessation of such initiatives; the effects of any default by or deterioration in the creditworthiness of the countries in which our products are made, manufactured, distributed or sold or of countries that may then impact countries in which our products are made, manufactured, distributed or sold; reduced demand for our products resulting from volatility in general global economic conditions or a shift in consumer preferences for economic reasons or otherwise to regional, local or private label products or other lower-cost products, or to less profitable sales channels; or a decrease in the fair value of pension or post-retirement assets that could increase future employee benefit costs and/or funding requirements of our pension or post-retirement plans.

In addition, we cannot predict how current or future economic conditions will affect our customers, consumers, suppliers, bottlers, [added: contract manufacturers,] distributors, joint venture partners or other third parties and any negative impact on any of the foregoing may also have an adverse impact on our business, financial condition or results of operations.

In addition, some of the major financial institutions with which we execute transactions, including U.S. and non-U.S. commercial banks, insurance companies, investment banks and other financial [removed: institutions,] [added: institutions] may be [removed: exposed to a ratings downgrade, bankruptcy, liquidity events, default or similar risks as a result of unfavorable economic conditions, changing regulatory requirements or other factors beyond our control.]

Similar risks exist with respect to our customers, suppliers, bottlers, [added: contract manufacturers,] distributors and joint venture partners and could result in their inability to obtain credit to purchase our products or to finance the manufacture and distribution of our products resulting in canceled orders and/or product delays, which could also have an adverse impact on our [removed: reputation,] business, [added: reputation,] financial condition or results of operations.

We depend on information systems and technology, some of which are provided by third parties, including public websites and cloud-based services, for many activities important to our business, including: to interface with our customers and consumers; to engage in marketing activities; to enable and improve the effectiveness of our operations; to order and manage materials from suppliers; to manage inventory; to manage [added: and operate] our facilities; to conduct research and development; to maintain accurate financial records; to achieve operational efficiencies; to comply with regulatory, financial reporting, legal and tax requirements; to collect and store sensitive data and confidential information; to communicate electronically among our global operations and with our employees and the employees of our customers, suppliers, bottlers, contract manufacturers, distributors, joint venture partners and other third parties; and to communicate with our investors.

As with other global companies, we are regularly subject to [removed: cyberattacks.][added: cyberattacks, including many of the types of attacks described above.]

[removed: institutions, terrorist organizations] [added: Cyberattacks] and [added: other cyber incidents are occurring more frequently, are constantly evolving in nature, are becoming more sophisticated and are being carried out by groups and] individuals [added: (including criminal hackers, hacktivists, state-sponsored actors, criminal and terrorist organizations, individuals] or groups participating in organized [removed: crime)] [added: crime and insiders)] with a wide range of expertise and motives (including monetization of corporate, payment or other internal or personal data, theft of [added: computing resources, financial fraud, operational disruption, theft of] trade secrets and intellectual property for competitive advantage and leverage for political, social, economic and environmental reasons).

Such cyberattacks and cyber incidents can take many forms including cyber extortion, denial of service, social engineering, such as impersonation attempts to fraudulently induce employees or others to disclose information or unwittingly provide access to systems or data, introduction of viruses or malware, such as ransomware through phishing emails, website defacement or theft of passwords and other [removed: credentials.][added: credentials, unauthorized use of computing resources for digital currency mining and business email compromises.]

[removed: If we do not allocate and effectively manage] the [removed: resources necessary to build and maintain our information technology infrastructure, including monitoring networks and systems, upgrading our security policies and the] skills and training of our employees, and requiring our third-party service providers, customers, suppliers, bottlers, contract manufacturers, distributors, joint venture partners or other third parties to do the same, if we or they fail to timely identify or appropriately respond to cyberattacks or other cyber incidents, or if our or their information systems are damaged, compromised, destroyed or shut down (whether as a result of natural disasters, fires, power outages, acts of terrorism or other catastrophic events, network outages, software, equipment or telecommunications failures, technology development defects, user errors, [added: lapses in our controls] or [added: the intentional or negligent actions of employees, or] from deliberate cyberattacks such as malicious or disruptive software, denial of service attacks, malicious social engineering, hackers or otherwise), our business could be disrupted and we could, among other things, be subject to: transaction errors; processing inefficiencies; the loss of, or failure to attract, new customers and consumers; lost revenues resulting from the disruption or shutdown of computer systems or other information technology systems at our offices, plants, warehouses, distribution centers or other facilities, or the loss of a competitive advantage due to the unauthorized use, acquisition or disclosure of, or access to, confidential information; the incurrence of costs to restore data and to safeguard against future extortion attempts; the loss of, or damage to, intellectual property or trade secrets, including the loss or unauthorized disclosure of sensitive data or other assets; alteration, corruption or loss of accounting, financial or other data on which we rely for financial reporting and other purposes, which could cause [added: errors or] delays in our financial reporting; damage to our reputation or brands; damage to employee, customer and consumer relations; litigation; regulatory enforcement actions or fines; unauthorized disclosure of confidential personal information of our employees, customers or consumers; the loss of information and/or supply chain disruption resulting from the failure of security patches to be developed and installed on a timely basis; violation of data privacy, security or other laws and regulations; and remediation costs.

Consumer preferences have been evolving, and are expected to continue to evolve, due to a variety of factors, including: changes in consumer demographics, including the aging of the general population and the emergence of the millennial and younger generations who have differing spending, consumption and purchasing habits; consumer concerns or perceptions regarding the nutrition profile of products, including the presence of added sugar, sodium and saturated fat in certain of our products; growing demand for organic or locally sourced ingredients, or consumer concerns or perceptions (whether or not valid) regarding the

In addition, certain of our packaging may currently not be recyclable, compostable or biodegradable.

There is a growing concern with the accumulation of plastic and other packaging waste in the environment,

particularly in the world’s oceans and waterways.

As a result, our branded packaging waste could result in negative publicity (whether or not valid) or reduce consumer demand and overall consumption of our products, which could adversely affect our business, financial condition or results of operations.

In response to these concerns, the United States and many other jurisdictions have imposed or are considering imposing regulations or policies designed to increase the sustainability of packaging, encourage waste reduction and increase recycling rates or facilitate the waste management process or restricting the sale of products in certain packaging.

These regulations vary in scope and form from taxes or fees designed to incentivize behavior to restrictions or bans on certain products and materials.

For example, the state of California is one of 10 states in the United States that have a bottle deposit return system in effect, which requires a deposit charged to consumers to incentivize the return of the beverage container.

In addition, 26 markets in the European Union have established extended producer responsibility policies, which make manufacturers such as us responsible for the costs of recycling products after consumers have used them.

Further, certain jurisdictions are considering imposing other types of regulations or policies, including packaging taxes, requirements for bottle caps to be tethered to the plastic bottle, minimum recycled content mandates, which would require packaging to include a certain percentage of post-consumer recycled material in a new package, and even bans on the use of some plastic beverage bottles and other single-use plastics.

These laws and regulations, whatever their scope or form, could increase the cost of our products, reduce consumer demand and overall consumption of our products or result in negative publicity (whether or not valid), which could adversely affect our business, financial condition or results of operations.

While we continue to devote significant resources to increase the recyclability and sustainability of our packaging, the increased focus on reducing plastic waste may require us to increase capital expenditures, including requiring additional investments to minimize the amount of plastic across our packaging; increase the amount of recycled content in our packaging; and develop sustainable, bio-based packaging as a replacement for fossil fuel-based plastic packaging, including flexible film alternatives for our snacks packaging.

Our failure to minimize our plastics use, increase the amount of recycled content in our packaging or develop sustainable packaging or consumers’ failure to accept such sustainable packaging could reduce consumer demand and overall consumption of our products and erode our competitive and financial position.

For example, five provinces in Canada, covering most of the Canadian market, have

established extended producer responsibility policies, which make manufacturers such as us responsible for the costs of recycling products after consumers have used them.

to lawsuits or new regulations that could affect sales of our products, any of which could adversely affect our business, financial condition or results of operations.

sale of certain of our products as a result of ingredients or substances contained in such products.

We are also continuing to implement our initiatives to

For example, the United Kingdom’s pending withdrawal from the European Union (commonly referred to as Brexit) could lead to differing laws and regulations in the United Kingdom and European Union.

The following factors could reduce demand for our products or otherwise impede the growth of our business in developing and emerging markets: unstable economic, political or social conditions; acts of war, terrorist acts, and civil unrest; increased competition; volatility in the economic growth of certain of these markets and the related impact on developed countries who export to these markets; volatile oil prices and the impact on the local economy in certain of these markets; our inability to acquire businesses, form strategic business alliances or to make necessary infrastructure investments; our inability to complete divestitures or refranchisings; imposition of new or increased labeling, product or production requirements, or other restrictions; our inability to hire or retain a highly skilled workforce; imposition of new or increased tariffs and other impositions on imported goods or sanctions against, or other regulations restricting contact with, certain countries in these

exposed to a ratings downgrade, bankruptcy, liquidity events, default or similar risks as a result of unfavorable economic conditions, changing regulatory requirements or other factors beyond our control.

If we do not allocate and effectively manage the resources necessary to build and maintain our information technology infrastructure, including monitoring networks and systems, upgrading our security policies and

Further, our information systems and those of our third-party providers, and the information stored therein could be compromised, including through cyberattacks or other external or internal methods, resulting in unauthorized parties accessing or extracting sensitive data or confidential information.

Failure to comply with data privacy laws could result in litigation, claims, legal or regulatory proceedings, inquiries or investigations.

For example, in 2018, the United States imposed tariffs on steel and aluminum as well as on goods imported from China and certain other countries, which has resulted in retaliatory tariffs by China and other countries.

Additional tariffs imposed by the United States on a broader range of imports, or further retaliatory trade measures taken by China or other countries in response, could result in an increase in supply chain costs that we may not be able to offset or otherwise adversely impact our results of operations.

Our business could

While our accounting for the recorded impact of the TCJ Act is deemed to be complete, these amounts are based on prevailing regulations and currently available information, and any additional guidance issued by the Internal Revenue Service (IRS) could impact our recorded amounts in future periods.

For example, the Organization for Economic Cooperation and Development (OECD) has recommended changes to numerous long-standing international tax principles through its base erosion and profit shifting (BEPS) project.

These changes, to the extent adopted,

may increase tax uncertainty, result in higher compliance costs and adversely affect our provision for income taxes, results of operations and/or cash flow.

The loss of, or a significant reduction in sales to, any key customer could adversely affect our business, financial condition or results of operations.

customers.

Further, the ability of consumers to compare prices on a real-time basis using digital technology puts additional pressure on us to maintain competitive prices.

We may enter into new or additional agreements for shared services in other functions in the future to achieve cost savings and efficiencies as we continue to migrate to shared business service organizational models across our business operations.

If any of these third-party service

In addition, the management of multiple third-party service providers increases operational complexity and decreases our control.

intellectual property.

products; respond to competitive product and pricing pressures and changes in distribution channels, including in the rapidly growing e-commerce channel; and implement effective advertising campaigns and marketing programs, including successfully adapting to a rapidly changing media environment through the use of social media and online advertising campaigns and marketing programs.

Changes in regulatory requirements, and competing regulations and standards, where our

We cannot guarantee that our costs in relation to these matters

is recovered, whether due to low value, lack of infrastructure or otherwise.

The United States and many other jurisdictions have imposed or are considering imposing regulations or policies designed to encourage recycling, including requiring that deposits or certain taxes or fees be charged in connection with the sale, distribution, marketing and use of certain packaging; extended producer responsibility policies which makes brand owners responsible for the costs of recycling products after consumers have used them; and adopting or extending product stewardship policies which could require brand owners to plan for and, if necessary, pay for the recycling or disposal of packaging after consumers have used them.

In addition, these jurisdictions may elect to impose regulations or policies to ban the use of certain packaging, such as plastic beverage bottles.

Compliance with these laws and regulations could continue to affect our costs or require changes in our distribution model, which could adversely affect our business, financial condition or results of operations.

For example, there is continued uncertainty surrounding the United Kingdom’s pending withdrawal from the European Union, including how the United Kingdom will interact with other European Union countries following its departure.

referendums or other political conditions could have an adverse impact on our business, financial conditions and results of operations.

Our business or financial results may be adversely impacted by uncertain or unfavorable economic conditions in the United States and globally, including: adverse changes in interest rates, tax laws or tax rates; volatile commodity markets, including speculative influences; highly-inflationary

Cyberattacks and other cyber incidents are occurring more frequently, are constantly evolving in nature, are becoming more sophisticated and are being made by groups and individuals (including criminal hackers, hacktivists, state-sponsored

Further, our information systems and the information stored therein could be compromised by, and we could experience similar adverse consequences due to, unauthorized outside parties accessing or extracting sensitive data or confidential information, corrupting information or disrupting business processes (or demonstrating an ability to do so) or by inadvertent or intentional actions by our employees, agents or third parties.

As a result,

In addition, certain of the derivatives used to hedge price risk do not qualify for hedge

brand equity.

compliance with the Foreign Corrupt Practices Act and other anti-corruption and anti-bribery laws and laws and regulations outside the United States.

The changes in the TCJ Act are broad and complex and we continue to examine the impact the TCJ Act may have on our business and financial results.

Among its many provisions, the TCJ Act imposed a mandatory one-time transition tax on undistributed international earnings regardless of whether they are repatriated, reduced the U.S. corporate income tax rate from 35% to 21%, imposed limitations on the deductibility of interest and certain other corporate deductions, and moved from a “worldwide” system of taxation that generally allows deferral of U.S. tax on international earnings until repatriated to a “territorial”/dividend exemption system with a minimum tax that will subject international earnings to U.S. tax when earned.

In accordance with applicable SEC guidance, we recorded a provisional net tax expense in the fourth quarter of 2017 resulting from the enactment of the TCJ Act.

This provisional expense is subject to change, possibly materially, due to, among other things, changes in estimates,

interpretations and assumptions we have made, changes in Internal Revenue Service (IRS) interpretations, the issuance of new guidance, legislative actions, changes in accounting standards or related interpretations in response to the TCJ Act and future actions by states within the United States that have not currently adopted the TCJ Act.

their skills and competencies.

control over financial reporting.

Responding to litigation, claims,

| Executive Overview | [removed: [45](#s87DE2AE6DFDC59C480251E330548ABBD)] [added: [44](#sD40DD8C7663F5540BA6BCBCFDA4E8449)] |

| Our Operations | [removed: [45](#s605D0F607A755781B58CA1AA0975564D)] [added: [44](#s2785658058955339B294ED741683109B)] |

| Other Relationships | [removed: [46](#s5E2582AE1F5050F99B8A30CE094EA3DA)] [added: [45](#s7EB88246CD095C2C95C69F5EAE0A754A)] |

| Our Business Risks | [removed: [46](#s02DC20DC754E564ABCB07434D505DC2D)] [added: [45](#s7245C929B6115678A5AC64A32C3A5D96)] |

| Results of Operations – Consolidated Review | [removed: [50](#s98AAED64BE6C513B93EBE2559A0A27FA)] [added: [49](#s6730EF3F4D1F5686B51F69663D1F6982)] |

| Non-GAAP Measures | [removed: [53](#s5C8E94044E855E84AA894774D967F10B)] [added: [52](#s676A9E08C16D5AB9A008C486020005C3)] |

| Items Affecting Comparability | [removed: [55](#s79BABB5589C85BEC976165EE5541A246)] | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Results of Operations – Division Review | [removed: [59](#s2F55472F8F485C49BC78EA5689039517)] [added: [59](#s91F7C7689DC1520582CDC92F039875A0)] |

| Frito-Lay North America | [removed: [61](#s6EE741805DAA5CB5BBE7B77AF65BFA84)] [added: [60](#s889997BCA431505B965B6041632F925A)] |

| Quaker Foods North America | [removed: [62](#s7627B8C0C48852ABB93531C89E98BACD)] [added: [61](#sD51948ACC0615A658B3B0CC22559F92A)] |

| North America Beverages | [removed: [63](#sF89F397F379351C5AEF315E7E65F40E7)] [added: [62](#s03735C78E01A5A0C8839AF6CA885FA2A)] |

| Latin America | [removed: [64](#s8B3C099E5BEF5504A3B032CCC12F73E0)] [added: 2] | [added: % | | 6 | | | — | | | — | | 8 | % | | 1 | | | 7 | |]

| Europe Sub-Saharan Africa | [removed: [65](#sA409356D45625DD8B099F12BA3814655)] [added: [64](#s7C5182D1C60752009AE727B59553BF86)] |

| Asia, Middle East and North Africa | [removed: [66](#sC194E6A45F2A5FCF8123EACF1FC180BC)] [added: [65](#sE78D27317F5058FC85DB7F3FAE6B70F5)] |

| Our Liquidity and Capital Resources | [removed: [68](#s5606957C0EED5A938699CA0DE81A9CAA)] [added: [67](#s747B8C66E78552C991D8FEEE815C5817)] |

| Return on Invested Capital | [removed: [72](#s512509EA4A6551619F46EDA329AC8620)] [added: [71](#s18B4C3CC42165F38A74350A343F58FBB)] |

| Revenue Recognition | [removed: [73](#sF005F570A6E850B1871072F51BC461E8)] [added: [72](#sF87B3F4750ED5D5BB0F757F9EE44B43C)] |

| Goodwill and Other Intangible Assets | [removed: [73](#s5D8B59EBA4E15B4A9D62837F8FC259BA)] [added: [72](#s05F4D53619275753A17035E6E0E49C9C)] |

| Income Tax Expense and Accruals | [removed: [74](#s29DC70DF283D5D8C922BC6FF56C7BB02)] [added: [73](#sF3D746FBCACE517CAD2679A613A7BEAE)] |

| Pension and Retiree Medical Plans | [removed: [76](#s6CAC6A4DDBDE5CD1B07AC1131A493BE2)] [added: [75](#s776798C0710654B5858216AAEAF7ECEC)] |

| Consolidated Statement of Income | [removed: [79](#sA38FD4458A835CB3B789DA3303BEB2AF)] [added: [78](#s1A5A3E567CB957569E2B49DDD22FB8A2)] |

| Consolidated Statement of Comprehensive Income | [removed: [80](#s38E4F7A3BC6659AAB1E4CFB148BA4187)] [added: [79](#s70CE44681CD25649AEBF172879914BB8)] |

| Consolidated Statement of Cash Flows | [removed: [81](#s74EF05157F0E5B9DB1CCFE2196A40193)] [added: [80](#sFA5DB77A1DB25EA6A7BCEA032C69B7D4)] |

| Consolidated Balance Sheet | [removed: [82](#s2A957AE3831152458C9F367938A1E421)] [added: [81](#s6C76CD1B8D58528B86CEFAAFF6B619DB)] |

| Consolidated Statement of Equity | [removed: [83](#s73E0F3B01C2453D887CE31C3811E42FD)] [added: [82](#s938F03A2E5335BB1AE94A0349D64BEB0)] |

| Note 1 – Basis of Presentation and Our Divisions | [removed: [84](#s184EA36948D6548891B73A95AE4C4C4D)] [added: [83](#s2837D83C83CC56129C176003C1F961FC)] |

| Note 2 – Our Significant Accounting Policies | [removed: [87](#sDA8C0F4078AE5592BD419CD285DFB111)] [added: [86](#sBB817810993A5882BDEC846500C693FB)] |

| Note 3 – Restructuring and Impairment Charges | [removed: [93](#s5FF2DC17EAB15BF7AA8D2676D1BC4607)] [added: [92](#s965634fe6d624b60950a04dce0f68ab5)] |

| Note 4 – Property, Plant and Equipment and Intangible Assets | [removed: [96](#s72AD0BA3B2735A7EB4FF894F4967E23C)] [added: [95](#s9F27528E03895E5D9ADF982F22622FF0)] |

| Note 5 – Income Taxes | [removed: [99](#s78FDF593C9225663BD6FF75C3036E6EA)] [added: [98](#s3181382613AB53688340585FF0D9B5A6)] |

| Note 6 – Share-Based Compensation | [removed: [102](#s054165137B535C78B11FCB404E1CA10C)] [added: [102](#s6A383AE8497D53FB84DA5D485DE58CBF)] |

| Note 7 – Pension, Retiree Medical and Savings Plans | [removed: [106](#sC8656ACD0EA85B22B35258F3015851ED)] [added: [105](#s9F43A0650BAB589BA4076925BB883548)] |

| Note 8 – Debt Obligations | [removed: [114](#sD2E13B3639F05B26BD09222941B41C77)] [added: [112](#sC2D4888B0EF75E74A15DDF60DDA6BAC8)] |

| Note 9 – Financial Instruments | [removed: [115](#sADE186ED3AE656EEB1084FA2D3D990AA)] [added: [114](#s8A3B7D7ACDD15628B3EE1A2F01735D30)] |

| Note 10 – Net Income Attributable to PepsiCo per Common Share | [removed: [121](#sA53A3993EAB45B9AB10A6E599FA506B6)] [added: [119](#s82B1DD501CF2532E989B2F27A9F12756)] |

| Note 11 – Preferred Stock | [removed: [121](#s3E1A8DCC667F5CA2B8E0BB1AF467D6AD)] [added: [119](#sA6F524213F8C5FA988EA8D8E11CEF002)] |

| Note 12 – Accumulated Other Comprehensive Loss Attributable to PepsiCo | [removed: [122](#sEF6E7417CA3550CE8934E7DEB062E23A)] [added: [120](#sBA91171C1DCD589BA2CD3D94B1E1E687)] |

| Note [removed: 13] [added: 15] – Supplemental Financial Information | [removed: [124](#sb7318675e39a4a4586f42eb08a5d8b9e)] [added: [124](#sF2790B8E54E1566DA169ECFB36C40272)] |

| [removed: MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING] [added: Management’s Responsibility for Financial Reporting] | [removed: [126](#s70E14790A0A7573093CFE759AEE25EE0)] [added: [126](#s25AA0B0063D351D0BDAB0299266045F2)] |

| [removed: REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM] [added: Report of Independent Registered Public Accounting Firm] | [removed: [128](#sF82ADC0D175B56D59C64DA334DE693B9)] [added: [128](#s9B3688DF86205FFBB136DF29E6507D54)] |

| Note 13 – Restricted Cash | [122](#sc5f4d9eca456429595a3b69b4451252f) |

| Note 14 – Acquisitions and Divestitures | [122](#s0B3EEDED52BF5F07ACF12236FE9C3515) |

At PepsiCo, we are focused on an approach called Winning with Purpose that will help make our company faster, stronger and better at meeting the needs of our customers, consumers, partners and communities, while caring for our planet and inspiring our associates.

Our strategies are designed to address key challenges facing our Company, including: shifting consumer preferences and behaviors; a highly competitive operating environment; a rapidly changing retail landscape, including the growth in e-commerce; continued macroeconomic and political volatility; and an evolving regulatory landscape.

| • | Winning in the marketplace and accelerating growth by strengthening and broadening our portfolio, while focusing on locally meeting the needs of our consumers and customers; |

| • | Continuing to implement our productivity initiatives to improve our operational efficiency and enhance our competitive advantage while continuing to transform our core capabilities with technology and building and retaining a talented workforce to drive cost savings; and |

| • | Continuing to lead with purpose by focusing on our impact on the planet and our people, assisting in establishing a more sustainable food system, minimizing our impact on the environment, protecting human rights and securing supply while positioning our Company for sustainable growth. |

We believe these priorities will position our Company for long-term sustainable growth.

These taxes and regulations vary in scope and form.

In addition, some regulations apply to all products using certain types of packaging (e.g., plastic), while others are designed to increase the sustainability of packaging and encourage waste reduction and increased recycling rates.

In 2018, we recognized a net tax benefit of $28 million in connection with the TCJ Act.

See further information in “Items Affecting Comparability.” While our accounting for the recorded impact of the TCJ Act is deemed to be complete, these amounts are based on prevailing regulations and currently available information, and any additional guidance issued by the IRS could impact the aforementioned amounts in future periods.

For

investment hedges was $0.9 billion as of December 29, 2018 and $1.5 billion as of December 30, 2017.

| Operating profit (a) | $ | 10,110 | | | $ | 10,276 | | | $ | 9,804 | | | (2 | )% | | 5 | % |

| Operating profit margin (a) | 15.6 | | % | | 16.2 | | % | | 15.6 | | % | | (0.5 | ) | | 0.6 | |

| (a) | In 2017 and 2016, operating profit and operating profit margin reflect the retrospective adoption of guidance requiring the presentation of non-service cost components of net periodic benefit cost below operating profit. See Note 2 to our consolidated financial statements. |

The operating profit performance was driven by certain operating cost increases and a 6-percentage-point impact of higher commodity costs, partially offset by productivity savings of more than $1 billion and net revenue growth.

These impacts were offset by a 2-percentage-point positive impact of refranchising a portion of our beverage business in Thailand and our entire beverage bottling operations and snack distribution operations in CHS in 2018.

Items affecting comparability (see “Items Affecting Comparability”) negatively impacted operating profit performance by 3 percentage points and decreased operating profit margin by 0.5 percentage points, primarily due to higher mark-to-market net impact on commodity derivatives included in corporate unallocated expenses.

Operating profit growth was driven by productivity savings of more than $1 billion and effective net pricing, partially offset by certain operating cost increases, a 7-percentage-point impact of higher commodity costs and unfavorable foreign exchange.

| Other pension and retiree medical benefits income/(expense) (a) | $ | 298 | | | $ | 233 | | | $ | (19 | ) | | $ | 65 | | | $ | 252 | |

| Merger and integration charges | 0.05 | | | | — | | | | — | | | | | | | | | | |

| Net tax (benefit)/expense related to the TCJ Act (b) | (0.02 | | ) | | 1.70 | | | | — | | | | | | | | | | |

| Other net tax benefits (b) | (3.55 | | ) | | — | | | | — | | | | | | | | | | |

| Charges related to cash tender and exchange offers | 0.13 | | | | — | | | | — | | | | | | | | | | |

| (a) | In 2017 and 2016, reflect the retrospective adoption of guidance requiring the presentation of non-service cost components of net periodic benefit cost below operating profit. See Note 2 to our consolidated financial statements. |

Other pension and retiree medical benefits income increased $65 million, reflecting the impact of the $1.4 billion discretionary pension contribution to the PepsiCo Employees Retirement Plan A (Plan A) in the United States, as well as the recognition of net asset gains, partially offset by higher amortization of net losses.

Net interest expense increased $312 million reflecting a charge of $253 million in connection with our cash tender and exchange offers, primarily representing the tender price paid over the carrying value of the tendered notes.

These impacts were partially offset by higher interest income due to higher interest rates on cash balances.

The reported tax rate decreased 85.6 percentage points, reflecting both other net tax benefits related to the reorganization of our international operations, which reduced the reported tax rate by 45 percentage points, and the prior year provisional net tax expense related to the TCJ Act, which reduced the current year reported tax rate by 25 percentage points.

Additionally, the favorable conclusion of certain international tax audits and the favorable resolution with the IRS of all open matters related to the audits of taxable years 2012 and 2013, collectively, reduced the reported tax rate by 7 percentage points.

Other pension and retiree medical benefits income increased $252 million, primarily reflecting a settlement charge of $242 million related to the purchase of a group annuity contract in 2016.

remeasurements of net monetary assets.

We are not able to reconcile our full year projected 2019 annual tax rate, excluding items affecting comparability, to our full year projected 2019 reported annual tax rate because we are unable to predict the 2019 impact of foreign exchange or the mark-to-market net impact on commodity derivatives due to the unpredictability of future changes in foreign exchange rates and commodity prices.

Therefore, we are unable to provide a reconciliation of this measure.

Our 2018 reported results reflect the accounting policy election taken in conjunction with the adoption of the revenue

recognition guidance to exclude from net revenue and cost of sales all sales, use, value-added and certain excise taxes assessed by governmental authorities on revenue-producing transactions not already excluded.

Our 2018 organic revenue growth excludes the impact of approximately $75 million of these taxes previously recognized in net revenue.

| Reported, GAAP Measure | $ | 29,381 | | | $ | 35,280 | | | $ | 25,170 | | | $ | 10,110 | | | $ | 298 | | | $ | 1,525 | | | $ | (3,370 | ) | | $ | 44 | | | $ | 12,515 | |

| Note 14 – Divestitures | [125](#s928d62a8790949d1958343427d0bbd1b) |

At PepsiCo, we are focused on operating our company in a way that generates sustained financial growth and consistently strong returns and is also responsive to the needs of the world around us.

We call this approach Performance with Purpose — it is embedded into our business and our strategy — and it enabled us to deliver another year of strong performance in 2017.

As we look to 2018 and beyond, we believe our Performance with Purpose strategy will enable us to continue delivering strong performance while positioning our Company for long-term sustainable growth.

Our strategies are designed to address key challenges facing our Company, including: macroeconomic and political volatility and the continued rebalancing of the economic world; shifting consumer preferences and increasing demand for more nutritious foods and beverages; the disruption of retail; the expansion of hard discounters; and the emergence of niche brands laying claim to large consumer segments, particularly in developed markets.

| • | Utilizing the strength of our distribution system to offer consumers a wide array of choices, from “fun-for-you” to “better-for-you” to “good-for-you” products to meet consumers’ demand for more nutritious foods and beverages; |

| • | Continuing to strengthen our retail and foodservice relationships to sell our products faster, increase cash flow and engage consumers; |

| • | Minimizing our environmental footprint to streamline costs and mitigate our operational impact on the communities in which we operate; |

| • | Continuing to invest in our associates so that we have the best talent to position our company for continued growth; and |

| • | Continuing our investments in e-commerce and digital solutions to meet changing consumer consumption patterns and capture cost savings while streamlining our operations. |

and geographic areas.

The hurricanes and earthquakes which occurred in the third and fourth quarters of 2017 in North and Central America did not materially impact our consolidated financial results in 2017.

Similarly, some measures apply a single tax rate per liquid ounce while others apply a graduated tax rate depending upon the amount of added sugar in the beverage and some apply a flat tax rate on beverages containing a particular substance or ingredient.

The changes in the TCJ Act are broad and complex and we continue to examine the impact the TCJ Act may have on our business and financial results.

the TCJ Act is provisional and the final amount may differ from the above estimate, possibly materially, due to, among other things, changes in estimates, interpretations and assumptions we have made, changes in IRS interpretations, the issuance of new guidance, legislative actions, changes in accounting standards or related interpretations in response to the TCJ Act and future actions by states within the United States that have not currently adopted the TCJ Act.

See “Uncertain or unfavorable economic conditions may have an adverse impact on our business, financial condition or results of operations.” and “Our business, financial condition or results of operations may be adversely affected by increased costs, disruption of supply or shortages of raw materials, energy, water and other supplies.” in “Item 1A.

Middle East, Russia and Turkey, and currency fluctuations in certain of these international markets continue to result in challenging operating environments.

Starting in 2014, Russia announced economic sanctions against the United States and other nations that include a ban on imports of certain ingredients and finished goods from specific countries.

These sanctions have not had and are not expected to have a material impact on the results of our operations in Russia or our consolidated results or financial position, and we will continue to monitor the economic, operating and political environment in Russia closely.

For the years ended December 30, 2017, December 31, 2016 and December 26, 2015, net revenue generated by our operations in Russia represented 5%, 4% and 4% of our consolidated net revenue, respectively.

As of December 30, 2017, our long-lived assets in Russia were $4.7 billion.

Due to exchange restrictions and other conditions that significantly impact our ability to effectively manage our businesses in Venezuela and realize earnings generated by our Venezuelan businesses, effective at the end of the third quarter of 2015, we deconsolidated our Venezuelan subsidiaries and began accounting for our investments in our Venezuelan subsidiaries and joint venture using the cost method of accounting.

In 2015, we recorded pre- and after-tax charges of $1.4 billion in our income statement to reduce the value of the cost method investments to their estimated fair values, resulting in a full impairment.

The factors that led to our conclusions at the end of the third quarter of 2015 continued to exist through the end of 2017, and we expect these conditions will continue for the foreseeable future.

We do not have any guarantees related to our Venezuelan entities, and our ongoing contractual commitments to our Venezuelan businesses are not material.

We will recognize income from dividends and sales of inventory to our Venezuelan entities, which have not been and are not expected to be material, to the extent cash in U.S. dollars is received.

We have not received any cash in U.S. dollars from our Venezuelan entities since our deconsolidation at the end of the third quarter of 2015.

We continue to monitor the conditions in Venezuela and their impact on our accounting and disclosures.

The impact of the structural change related to the deconsolidation of our Venezuelan businesses is presented separately.

| Operating profit | $ | 10,509 | | | $ | 9,785 | | | $ | 8,353 | | | 7 | % | | 17 | % |

| Operating profit margin | 16.5 | | % | | 15.6 | | % | | 13.2 | | % | | 1.0 | | | 2.3 | |

Operating profit growth was driven by the benefit of actions associated with our productivity initiatives, which contributed more than $1 billion in cost reductions across a number of expense categories, as well as effective net pricing.

Commodity inflation reduced operating profit growth by 6 percentage points, primarily attributable to inflation in the AMENA, Latin America, ESSA, NAB and FLNA segments.

Corporate unallocated expenses (see Note 1 to our consolidated financial statements) decreased 9%, reflecting the impact of higher prior-year contributions to The PepsiCo Foundation, Inc. to fund charitable and social programs.

Operating profit growth was driven by the benefit of actions associated with our productivity initiatives, which contributed more than $1 billion in cost reductions across a number of expense categories, effective net pricing and volume growth.

Additionally, the impact of recording an impairment charge in 2015 and ceasing the operations of our MQD joint venture contributed 1 percentage point to operating profit growth.

Items affecting comparability (see “Items Affecting Comparability”) contributed 13 percentage points to operating profit growth and increased operating profit margin by 1.5 percentage points, primarily reflecting a 17-percentage-point contribution from the 2015 Venezuela impairment charges.

Higher commodity inflation reduced operating profit growth by 1 percentage point, primarily attributable to inflation in the Latin America, ESSA and AMENA segments, partially offset by deflation in the NAB, FLNA and QFNA segments.

The impact of our 53rd reporting week was fully offset by incremental investments we made in our business.

Corporate unallocated expenses (see Note 1 to our consolidated financial statements) decreased 1%, driven by lower pension expense reflecting the change to the full yield curve approach, lower foreign exchange transaction losses and decreases in other corporate expenses, partially offset by increased contributions to The PepsiCo Foundation, Inc. to fund charitable and social programs and the net impact of items affecting comparability mentioned above included in corporate unallocated expenses.

We are a leading global food and beverage company with a complementary portfolio of [removed: enjoyable] brands, including Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana.

Through our operations, authorized bottlers, contract manufacturers and other third parties, we make, market, distribute and sell a wide variety of convenient [removed: and enjoyable] beverages, foods and snacks, serving customers and consumers in more than 200 countries and territories.

| 6) | Asia, Middle East and North Africa (AMENA), which includes all of our beverage, food and snack [removed: businesses in Asia, Middle East and North Africa.] |

See Note [removed: 1] [added: 14] to our consolidated financial statements for [removed: financial] [added: additional] information about our [removed: divisions and geographic areas.][added: acquisition of SodaStream.]

These foods include branded dips, Cheetos cheese-flavored snacks, Doritos tortilla chips, Fritos corn chips, Lay’s potato chips, Ruffles potato [removed: chips, Santitas tortilla] chips and Tostitos tortilla chips.

Either independently or in conjunction with third parties, NAB makes, markets and sells beverage concentrates, fountain syrups and finished goods under various beverage brands including Aquafina, Diet Mountain Dew, Diet Pepsi, Gatorade, [removed: Mist Twst,] Mountain Dew, Pepsi, [removed: Propel] [added: Propel, Sierra Mist] and Tropicana.

Further, NAB manufactures and distributes certain brands licensed from [added: Keurig] Dr Pepper [removed: Snapple Group, Inc. (DPSG),] [added: Inc.,] including Crush, Dr Pepper and Schweppes, and certain juice brands licensed from Dole Food Company, Inc. (Dole) and Ocean Spray Cranberries, Inc. (Ocean Spray).

Latin America also, either independently or in conjunction with third parties, makes, markets, distributes and sells beverage concentrates, fountain syrups and finished goods under various beverage brands including 7UP, Diet Pepsi, Gatorade, H2oh!, Manzanita Sol, Mirinda, [added: Pepsi,] Pepsi [added: Black] and Toddy.

Either independently or in conjunction with third parties, ESSA makes, markets, distributes and sells a number of leading snack food brands including Cheetos, Chipita, Doritos, Lay’s, Ruffles and Walkers, as well as many Quaker-branded cereals and snacks, through consolidated [removed: businesses] [added: businesses,] as well as through noncontrolled affiliates.

[removed: ESSA also, either independently or in conjunction with third parties, makes,] markets, distributes and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name).

Either independently or in conjunction with third parties, AMENA makes, markets, distributes and sells a number of leading snack food brands including Cheetos, Chipsy, [removed: Crunchy,] Doritos, Kurkure and Lay’s, as well as many Quaker branded cereals and snacks, through consolidated businesses, as well as through noncontrolled affiliates.

AMENA also makes, markets, distributes and sells beverage concentrates, fountain syrups and finished goods under various beverage brands including 7UP, Aquafina, Mirinda, Mountain Dew, [removed: Pepsi] [added: Pepsi, Sting] and Tropicana.

[added: DSD is especially well-suited] to products that are restocked often and respond to in-store promotion and merchandising.

The principal ingredients we use in our beverage, food and snack products are apple, orange and pineapple juice and other juice concentrates, aspartame, corn, corn sweeteners, flavorings, flour, grapefruit, oranges and other fruits, oats, potatoes, raw milk, rice, seasonings, sucralose, sugar, vegetable and essential oils, and [removed: wheat.]

We own numerous valuable trademarks which are essential to our worldwide businesses, including [added: 1893,] Agusha, Amp Energy, Aquafina, Aquafina Flavorsplash, [added: Arto Lifewater,] Aunt Jemima, [added: Bare, bubly,] Cap’n Crunch, Cheetos, Chester’s, Chipsy, Chokis, Chudo, Cracker Jack, Crunchy, Diet [removed: Mist Twst, Diet] Mountain Dew, Diet Mug, Diet Pepsi, Diet [added: Sierra Mist, Diet] 7UP (outside the United States), Domik v Derevne, Doritos, Duyvis, Elma Chips, Emperador, Frito-Lay, Fritos, Fruktovy Sad, G2, Gamesa, Gatorade, Grandma’s, H2oh!, [added: Health Warrior,] Imunele, Izze, J-7 Tonus, Kas, KeVita, Kurkure, Lay’s, Life, Lifewtr, [removed: Lifewater,] Lubimy, Manzanita Sol, Marias Gamesa, Matutano, Mirinda, Miss Vickie’s, [removed: Mist Twst,] Mother’s, Mountain Dew, Mountain Dew Code Red, Mountain Dew [added: Ice, Mountain Dew] Kickstart, Mug, Munchies, Naked, Near East, O.N.E., Paso de los Toros, Pasta Roni, Pepsi, Pepsi [added: Black, Pepsi] Max, Pepsi Next, Pepsi Zero Sugar, Propel, Quaker, Quaker Chewy, Rice-A-Roni, Rold Gold, Rosquinhas Mabel, Ruffles, Sabritas, Sakata, Saladitas, Sandora, Santitas, 7UP (outside the United States), 7UP Free (outside the United States), [added: Sierra Mist,] Simba, Smartfood, Smith’s, Snack a Jacks, SoBe, [removed: SoBe Lifewater,] [added: SodaStream,] Sonric’s, Stacy’s, Sting, [added: Stubborn Soda,] SunChips, Toddy, [added: Toddynho, Tostitos, Trop 50, Tropicana, Tropicana Farmstand, Tropicana Pure Premium, Tropicana Twister, V Water, Vesely Molochnik, Walkers and Ya.]

We also distribute Rockstar Energy drinks, Muscle Milk protein shakes and various [removed: DPSG] [added: Keurig Dr Pepper Inc.] brands, including Dr Pepper in certain markets, Crush and Schweppes.

However, taken as a whole, seasonality has not had a material impact on our [removed: consolidated financial results.]

Changes to the retail landscape, including increased consolidation of retail ownership, the rapid growth of sales through e-commerce websites and mobile commerce applications, [added: including through subscription services,] the integration of physical and digital operations among retailers, as well as the growth in hard discounters, and the current economic environment continue to increase the importance of major customers.

In [removed: 2017,] [added: 2018,] sales to Walmart Inc. (Walmart), including Sam’s Club (Sam’s), represented approximately 13% of our consolidated net revenue.

Our top five retail customers represented approximately 33% of our [removed: 2017] [added: 2018] net revenue in North America, with Walmart (including [added: Sam’s) representing approximately 19%.]

Our beverage, food and snack products are in highly competitive categories and markets and compete against products of international beverage, food and snack companies that, like us, operate in multiple geographies, as well as regional, local and private label [removed: manufacturers,] [added: manufacturers and] economy brands and other competitors.

Other beverage, food and snack competitors include, but are not limited to, [removed: DPSG,] [added: Campbell Soup Company, Conagra Brands, Inc.,] Kellogg Company, [added: Keurig Dr Pepper Inc.,] The Kraft Heinz Company, [added: Link Snacks, Inc.,] Mondelēz International, Inc., Monster Beverage Corporation, Nestlé [removed: S.A.,] [added: S.A. and] Red Bull [removed: GmbH and Snyder’s-Lance, Inc.][added: GmbH.]

[removed: In 2017, we and The Coca-Cola Company represented approximately 23% and 20%, respectively, of the U.S. liquid refreshment beverage category by estimated retail sales in measured] channels, according to Information Resources, Inc. However, The Coca-Cola Company has significant carbonated soft drink (CSD) share advantage in many markets outside the United States.

These activities principally involve: development of new ingredients, flavors and products; reformulation and improvement in the quality and appeal of existing products; improvement and modernization of manufacturing processes, including cost reduction; improvements in product quality, safety and integrity; development of, and improvements in, dispensing equipment, packaging [removed: technology,] [added: technology (including investments in recycling-focused technologies),] package design [added: (including development of sustainable, bio-based packaging)] and portion sizes; efforts focused on identifying opportunities to transform, grow and broaden our product portfolio, including by developing products with improved nutrition profiles that reduce added sugars, sodium or saturated fat, including through the use of sweetener alternatives and flavor modifiers and innovation in existing sweeteners, [added: further expanding our beyond the bottle portfolio (including through our acquisition of SodaStream)] and [removed: by] offering more products with positive nutrition including whole grains, fruits and vegetables, dairy, protein and hydration; investments in building our capabilities to support our global e-commerce business; and improvements in energy efficiency and efforts focused on reducing our impact on the environment.

Our research centers are located around the world, including in Brazil, China, India, Ireland, Mexico, Russia, the United [removed: Arab Emirates, the United] Kingdom and the United States, and leverage nutrition science, food [added: science, engineering and consumer insights to meet our strategy to continue to develop nutritious and convenient beverages, foods and snacks.]

In [removed: 2017,] [added: 2018,] we continued to refine our beverage, food and snack portfolio to meet changing consumer demands by reducing added sugars in many of our beverages and sodium and saturated fat in many of our foods and snacks, and by developing a broader portfolio of product choices, including: continuing to expand our beverage options that contain no high-fructose corn syrup and that are made with natural flavors; expanding our state-of-the-art food and beverage healthy vending initiative to increase the availability of [removed: convenient, affordable] [added: convenient] and [removed: enjoyable] [added: affordable] nutrition; further expanding our portfolio of nutritious products by building on our important nutrition platforms and brands — Quaker (grains), Tropicana (juices, lemonades, fruit and vegetable drinks), Gatorade (sports nutrition for athletes), Naked Juice (cold-pressed juices and [removed: smoothies) and] [added: smoothies),] KeVita (probiotics, tonics and fermented [removed: teas);] [added: teas), Bare (baked apple chips and other baked produce) and Health Warrior (nutrition bars);] further expanding our whole grain products globally; and further expanding our portfolio of nutritious products in growing categories, such as dairy, hummus and other refrigerated dips, and baked grain snacks.

[removed: In addition, we continued to make investments to reduce our impact on the environment, including: efforts to conserve raw materials and energy, such as by working to achieve reductions in greenhouse gas emissions across our global businesses, by helping to protect and conserve global water supply especially in high-water-risk locations (including replenishing watersheds that source our operations in high-water-risk locations and] promoting the efficient use of water [removed: use] in our agricultural supply chain), and by incorporating [removed: into our operations,] improvements in the sustainability and resources of our agricultural supply [removed: chain;] [added: chain into our operations;] efforts to reduce waste generated by our operations and disposed of in landfills; efforts to support increased packaging [removed: recovery and] [added: recovery,] recycling [removed: rates;] [added: rates and the amount of recycled content in our packaging;] efforts to increase energy efficiency, including the increased use of renewable energy and resources; efforts to support sustainable agriculture by expanding best practices with our growers and suppliers; and efforts to optimize packaging technology and design to [added: minimize the amount of plastic in our packaging, and] make our packaging increasingly recoverable or recyclable with lower environmental impact, including continuing to invest in developing compostable and biodegradable packaging.

The conduct of our businesses, including the production, storage, distribution, sale, display, advertising, marketing, labeling, content, quality, safety, transportation, [added: packaging,] disposal, recycling and use of our products, as well as our [added: employment and] occupational health and safety practices and protection of personal information, are subject to various laws and regulations administered by federal, state and local governmental agencies in the United States, as well as to laws and regulations administered by government entities and agencies in the more than 200 other countries and territories in which our products are made, manufactured, distributed or sold.

The U.S. laws and regulations that we are subject to include: the Federal Food, Drug and Cosmetic Act and various state laws governing food safety; the Food Safety Modernization Act; the Occupational Safety and Health Act; various federal, state and local environmental protection laws, as discussed below; the Federal Motor Carrier Safety Act; the Federal Trade Commission Act; the Lanham Act; various federal and state laws and regulations governing competition and trade practices; various federal and state laws and regulations governing our employment practices, including those related to equal employment opportunity, such as the Equal Employment Opportunity Act and the National Labor Relations Act and those related to overtime compensation, such as the Fair Labor Standards Act; customs and foreign trade laws and [removed: regulations;] [added: regulations, including] laws [added: regarding the import or export of our products or ingredients used in our products and tariffs; laws] regulating the sale of certain of our products in schools; and laws relating to the payment of taxes.

We are also subject to various state and local statutes and regulations, including state consumer protection laws such as Proposition 65 in California, which requires that a specific warning appear [added: on any product that contains a substance listed by the State of California as having been found to cause cancer or birth defects, unless the amount of such substance in the product is below a safe harbor level.]

We are also subject to numerous similar and other laws and regulations outside the United States, including but not limited to laws and regulations governing food safety, [added: international trade and tariffs,] occupational health and safety, competition, anti-corruption and data [removed: privacy.][added: privacy, including the European Union General Data Protection Regulation.]

[removed: Similarly, some measures] apply a [removed: single tax rate per liquid ounce while others apply a] graduated tax rate depending upon the amount of added sugar in the beverage and some apply a flat tax rate on beverages containing a particular substance or ingredient.

In the United States, our facilities must comply with the Clean Air Act, the Clean Water Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act and other federal and state laws regarding handling, storage, release and disposal of wastes generated [removed: on-site] [added: onsite] and sent to third-party owned and operated [removed: off-site] [added: offsite] licensed facilities and our facilities outside the United States must comply with similar laws and regulations.

[added: While these environmental remediation and indemnification] obligations cannot be predicted with certainty, such obligations have not had, and are not expected to have, a material impact on our capital expenditures, earnings or competitive position.

As of December [removed: 30, 2017,] [added: 29, 2018,] we and our consolidated subsidiaries employed approximately [removed: 263,000] [added: 267,000] people worldwide, including approximately [removed: 113,000] [added: 114,000] people within the United States.

[removed: In addition, the] [added: The] SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.

businesses in Asia, Middle East and North Africa.

ESSA also, either independently or in conjunction with third parties, makes,

In December 2018, we acquired SodaStream International Ltd. (SodaStream), a manufacturer and distributor of sparkling water makers.

SodaStream products are included within ESSA’s beverage business.

wheat.

consolidated financial results.

In 2018, we and The Coca-Cola Company represented approximately 22% and 20%, respectively, of the U.S. liquid refreshment beverage category by estimated retail sales in measured

In addition, we continued to make investments to reduce our impact on the environment, including: efforts to conserve raw materials and energy, such as by working to achieve reductions in greenhouse gas emissions across our global businesses, by helping to protect and conserve global water supply especially in high-water-risk locations (including replenishing watersheds that source our operations in high-water-risk locations and

Similarly, some measures apply a single tax rate per liquid ounce while others

In addition, certain jurisdictions have either imposed or are considering imposing regulations designed to increase recycling rates or encourage waste reduction.

These regulations vary in scope and form from deposit return systems designed to incentivize the return of beverage containers, to extended producer responsibility policies and even bans on the use of some plastic beverage bottles and other single-use plastics.

| | |

| --- | --- |

Our segment net revenue (in millions) and contributions to consolidated net revenue for each of the last three fiscal years were as follows:

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | |

| | Net Revenue | | | | | | | | | | | | % of Total Net Revenue | | | | | | | |

| | 2017 | | | | 2016(a) | | | | 2015 | | | | 2017 | | | 2016 | | | 2015 | |

| FLNA | $ | 15,798 | | | $ | 15,549 | | | $ | 14,782 | | | 25 | % | | 25 | % | | 23 | % |

| QFNA | 2,503 | | | | 2,564 | | | | 2,543 | | | | 4 | | | 4 | | | 4 | |

| NAB | 20,936 | | | | 21,312 | | | | 20,618 | | | | 33 | | | 34 | | | 33 | |

| Latin America | 7,208 | | | | 6,820 | | | | 8,228 | | | | 11 | | | 11 | | | 13 | |

| ESSA | 11,050 | | | | 10,216 | | | | 10,510 | | | | 17 | | | 16 | | | 17 | |

| AMENA | 6,030 | | | | 6,338 | | | | 6,375 | | | | 10 | | | 10 | | | 10 | |

| | $ | 63,525 | | | $ | 62,799 | | | $ | 63,056 | | | 100 | % | | 100 | % | | 100 | % |

| (a) | Our fiscal 2016 results included an extra week of results (53rd reporting week). The 53rd reporting week increased 2016 net revenue by $657 million, including $294 million in our FLNA segment, $43 million in our QFNA segment, $300 million in our NAB segment and $20 million in our ESSA segment. |

See also “Item 1A.

Risk Factors” below for a discussion of certain risks associated with our operations, including outside the United States.

See Note 1 to our consolidated financial statements for information about the deconsolidation of our Venezuelan subsidiaries, which was effective as of the end of the third quarter of 2015.

DSD is especially well-suited

Toddynho, Tostitos, Trop 50, Tropicana, Tropicana Farmstand, Tropicana Pure Premium, Tropicana Twister, V Water, Vesely Molochnik, Walkers and Ya.

Sam’s) representing approximately 19%.

science, engineering and consumer insights to meet our strategy to continue to develop nutritious and convenient beverages, foods and snacks.

Research and development costs were $737 million, $760 million and $754 million in 2017, 2016 and 2015, respectively, and are reported within selling, general and administrative expenses.

Consumer research is excluded from such research and development costs and included in other marketing costs.

on any product that contains a substance listed by the State of California as having been found to cause cancer or birth defects, unless the amount of such substance in the product is below a safe harbor level.

Regulators may also restrict consumers’ ability to use benefit programs, such as the Supplemental Nutrition Assistance Program in the United States, to purchase certain beverages and foods.

In addition, legislation has been enacted in certain U.S. states and in certain other countries where our products are sold that requires collection and recycling of containers or that prohibits the sale of our beverages in certain non-refillable containers, unless a deposit, ecotax or other fee is charged.

While these environmental remediation and indemnification

The public may read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549.

Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330.

As previously disclosed, in April 2017, Corporación Autónoma Regional de Cundinamarca, a Colombian environmental authority (the environmental authority), initiated an administrative proceeding regarding our subsidiary, PepsiCo Alimentos Z.F., Ltda.

(PAZ), for allegedly delivering wastewater to a third party without first verifying that the third party had appropriate permits with respect to the discharge of such wastewater.

In July 2018, the environmental authority initiated an administrative proceeding to impose a monetary sanction against PAZ with respect to the alleged permitting violation by the third party, and on August 13, 2018, PAZ submitted evidence of its defense to these allegations.

If the environmental authority determines PAZ is responsible for the alleged permitting violations by the third party, the environmental authority may seek to impose monetary sanctions of up to $1.3 million, which PAZ would be entitled to appeal.

As previously disclosed, in January 2011, Wojewodzka Inspekcja Ochrony Srodowiska, the Polish environmental control authority, began an audit of a bottling plant of our subsidiary, Pepsi-Cola General Bottlers Poland SP, z.o.o.

(PCGB), in Michrow, Poland.

In July 2013, Wojewodzka Inspekcja Ochrony Srodowiska alleged that the plant was not in compliance in 2009 with applicable regulations governing the taking of water samples for analysis of the plant’s waste and sought monetary sanctions of $650,000 and, in August 2013, PCGB appealed this decision.

In April 2015, the General Environmental Inspector for Environmental Protection upheld the sanctions against PCGB and, in May 2015, PCGB further appealed this decision.

In October 2015, Viovodeship Administrative Court in Warsaw rejected our appeal and, in December 2015, PCGB filed an extraordinary appeal in the Supreme Administrative Court.

In October 2017, the Supreme Administrative Court issued a final, non-appealable decision, rejecting our appeal and we agreed to invest funds up to the penalty amount(s) into the bottling plant to fully resolve the matter.

10-K 1 [removed: pepsico201710-k.htm] [added: pepsico201810-k.htm] FORM 10-K

For the fiscal year ended December [removed: 30, 2017][added: 29, 2018]

[removed: ][added: ]

| Common Stock, par value 1-2/3 cents per share | | The Nasdaq Stock Market LLC [removed: and Chicago Stock Exchange] |

| 2.500% Senior Notes Due 2022 | | [removed: New York] [added: The Nasdaq] Stock [removed: Exchange] [added: Market LLC] |

| 1.750% Senior Notes Due 2021 | | [removed: New York] [added: The Nasdaq] Stock [removed: Exchange] [added: Market LLC] |

| 2.625% Senior Notes Due 2026 | | [removed: New York] [added: The Nasdaq] Stock [removed: Exchange] [added: Market LLC] |

| 0.875% Senior Notes Due 2028 | | [removed: New York] [added: The Nasdaq] Stock [removed: Exchange] [added: Market LLC] |

Indicate by check mark whether the registrant has submitted electronically [removed: and posted on its corporate Web site, if any,] every Interactive Data File required to be submitted [removed: 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 [removed: and post] such files).

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [added: x]

| Non-accelerated filer ¨ [removed: (Do not check if a smaller reporting company)] | | | | Smaller reporting company ¨ |

| | [added: | | |] Emerging growth company ¨ | [removed: | | |]

The aggregate market value of PepsiCo, Inc. Common Stock held by nonaffiliates of PepsiCo, Inc. (assuming for these purposes, but without conceding, that all executive officers and directors of PepsiCo, Inc. are affiliates of PepsiCo, Inc.) as of June [removed: 16, 2017,] [added: 15, 2018,] the last day of business of our most recently completed second fiscal quarter, was [removed: $166.5] [added: $152.0] billion (based on the closing sale price of PepsiCo, Inc.’s Common Stock on that date as reported on the [removed: New York Stock Exchange).][added: Nasdaq Global Select Market).]

The number of shares of PepsiCo, Inc. Common Stock outstanding as of February [removed: 6, 2018] [added: 8, 2019] was [removed: 1,419,908,267.][added: 1,404,686,108.]

Portions of the Proxy Statement relating to PepsiCo, Inc.’s [removed: 2018] [added: 2019] Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K.

For the Fiscal Year Ended December [removed: 30, 2017][added: 29, 2018]

| Item 1. | [removed: [Business](#s548FE159129B5904BD79E86864814981)] [added: [Business](#s89E5EB671B345AD785DBFE627FD2427C)] | [removed: [2](#s548FE159129B5904BD79E86864814981)] [added: [2](#s89E5EB671B345AD785DBFE627FD2427C)] |

| Item 1A. | [Risk [removed: Factors](#s8C576F9CC17D55319458696C5F8DF47E)] [added: Factors](#s079FD361B1BD52239688B942B3F8AA3E)] | [removed: [10](#s8C576F9CC17D55319458696C5F8DF47E)] [added: [10](#s079FD361B1BD52239688B942B3F8AA3E)] |

| Item 1B. | [Unresolved Staff [removed: Comments](#s8DA69207C4065AE9AE0631874DC0C7B6)] [added: Comments](#s8B5D11D0C1E458178C7DFB52C70BB7B9)] | [removed: [29](#s8DA69207C4065AE9AE0631874DC0C7B6)] [added: [30](#s8B5D11D0C1E458178C7DFB52C70BB7B9)] |

| Item 2. | [removed: [Properties](#sDEF3943122A25685A84F52FF1B1A639D)] [added: [Properties](#sC94CFDE550A45830A24C048EEB28DA16)] | [removed: [30](#sDEF3943122A25685A84F52FF1B1A639D)] [added: [31](#sC94CFDE550A45830A24C048EEB28DA16)] |

| Item 3. | [Legal [removed: Proceedings](#sE057A34BA02157799BC2373C547F07C0)] [added: Proceedings](#sA77AD4EF9BF35849828A2B1B194BF6B6)] | [removed: [31](#sE057A34BA02157799BC2373C547F07C0)] [added: [32](#sA77AD4EF9BF35849828A2B1B194BF6B6)] |

| Item 4. | [Mine Safety [removed: Disclosures](#s629E381C9ABD59E99C35752CFC179B72)] [added: Disclosures](#sEBDB3224F4025FF69ED70ADD195C40E1)] | [removed: [31](#s629E381C9ABD59E99C35752CFC179B72)] [added: [32](#sEBDB3224F4025FF69ED70ADD195C40E1)] |

| Item 5. | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s74AAC760B4DB5C3F8D838074DA604BE8)] [added: Securities](#s1CD2C6149FFE5A43A9544F620B918D9C)] | [removed: [36](#s74AAC760B4DB5C3F8D838074DA604BE8)] [added: [36](#s1CD2C6149FFE5A43A9544F620B918D9C)] |

| Item 6. | [Selected Financial [removed: Data](#s76CB50A56814537F89BB3E8EE837397D)] [added: Data](#sBCF1980F740D55ED9BF25C7EA61F8275)] | [removed: [39](#s76CB50A56814537F89BB3E8EE837397D)] [added: [37](#sBCF1980F740D55ED9BF25C7EA61F8275)] |

| Item 7. | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sD4F674C304505785B7B4941E1916FAE0)] [added: Operations](#s4FA87BCA3CF65CE8991BCB65087D12E8)] | [removed: [44](#sD4F674C304505785B7B4941E1916FAE0)] [added: [43](#s4FA87BCA3CF65CE8991BCB65087D12E8)] |

| Item 7A. | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#sBD5949FF87EA5217A66F3EB7A1782BA6)] [added: Risk](#sAF3E8EFB5D605277AC8A06AE5F6CA700)] | [removed: [132](#sBD5949FF87EA5217A66F3EB7A1782BA6)] [added: [132](#sAF3E8EFB5D605277AC8A06AE5F6CA700)] |

| Item 8. | [Financial Statements and Supplementary [removed: Data](#s070C0FE8405A55AE926A2CEC35EA51AC)] [added: Data](#sC9292D4869F75D4FB4D076A2C5C44226)] | [removed: [132](#s070C0FE8405A55AE926A2CEC35EA51AC)] [added: [132](#sC9292D4869F75D4FB4D076A2C5C44226)] |

| Item 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#sBC582C6028A55D24B3A95AD03BFD7E67)] [added: Disclosure](#s269E5809483959629A40097720D998D5)] | [removed: [132](#sBC582C6028A55D24B3A95AD03BFD7E67)] [added: [132](#s269E5809483959629A40097720D998D5)] |

| Item 9A. | [Controls and [removed: Procedures](#sDA9D847BC38554BC8BC78256548FC5DD)] [added: Procedures](#sEAAFFF0CE4B95299AD0A8E2AA8A586C0)] | [removed: [132](#sDA9D847BC38554BC8BC78256548FC5DD)] [added: [132](#sEAAFFF0CE4B95299AD0A8E2AA8A586C0)] |

| Item 9B. | [Other [removed: Information](#s33D9896A11145BFAB349CEF3B7F90F8A)] [added: Information](#s06A561A32E8D5F56A1DB79794D2B6CD5)] | [removed: [133](#s33D9896A11145BFAB349CEF3B7F90F8A)] [added: [133](#s06A561A32E8D5F56A1DB79794D2B6CD5)] |

| Item 10. | [Directors, Executive Officers and Corporate [removed: Governance](#s96603A38085D5E28835B77B3ED610A9E)] [added: Governance](#s286925D788DB5FB6A5586808888E0769)] | [removed: [133](#s96603A38085D5E28835B77B3ED610A9E)] [added: [133](#s286925D788DB5FB6A5586808888E0769)] |

| Item 11. | [Executive [removed: Compensation](#s5C0E09419F5554358F77F10C4477DDCC)] [added: Compensation](#s10BE6A6637EF57FCBCB4F6D72E66ED85)] | [removed: [133](#s5C0E09419F5554358F77F10C4477DDCC)] [added: [133](#s10BE6A6637EF57FCBCB4F6D72E66ED85)] |

| Item 12. | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s772DD51EE10A58058BECAE236B5E0C18)] [added: Matters](#sC0C0225265D757A9A899CF89FE6E6389)] | [removed: [133](#s772DD51EE10A58058BECAE236B5E0C18)] [added: [134](#sC0C0225265D757A9A899CF89FE6E6389)] |

| Item 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s271330AC513A53F1ADCD5D39093F434C)] [added: Independence](#s8F27B94689355F648CAB3F587CD4F02E)] | [removed: [134](#s271330AC513A53F1ADCD5D39093F434C)] [added: [134](#s8F27B94689355F648CAB3F587CD4F02E)] |

| Item 14. | [Principal Accounting Fees and [removed: Services](#s24329E438A6A5C5DA758246CFEC82E45)] [added: Services](#sFA81E550DDA5582D9CBFBCDCDC2F1069)] | [removed: [134](#s24329E438A6A5C5DA758246CFEC82E45)] [added: [134](#sFA81E550DDA5582D9CBFBCDCDC2F1069)] |

| Item 15. | [Exhibits and Financial Statement [removed: Schedules](#s1F64C8E6AC715BCCBE5D5F099DE07875)] [added: Schedules](#s7A041B4575CE54AA80765CDA299BDE1E)] | [removed: [135](#s1F64C8E6AC715BCCBE5D5F099DE07875)] [added: [135](#s7A041B4575CE54AA80765CDA299BDE1E)] |

| Item 16. | [Form 10-K [removed: Summary](#s2F8EF9B41C9C5A73B551892523CE1417)] [added: Summary](#sDE0C16B56D725637BE325F1E9D139834)] | [removed: [136](#s2F8EF9B41C9C5A73B551892523CE1417)] [added: [136](#sDE0C16B56D725637BE325F1E9D139834)] |

We have received no written comments regarding our periodic or current reports from the staff of the SEC that were issued 180 days or more preceding the end of our [removed: 2017] [added: 2018] fiscal year and that remain unresolved.

| Plants (b) | 35 | | 5 | | 65 | | [removed: 50] [added: 45] | | 85 | | [removed: 50] [added: 45] | | 5 |

| • | Latin America’s three snack plants in Mexico (one in Vallejo, one in Celaya and one in [removed: Monterrey)] [added: Obregón)] and one in Brazil (Sorocaba), all of which are owned. |

| • | AMENA’s [added: two] beverage plants in [removed: Tanta City,] Egypt [added: (one in Tanta City] and [removed: Rayong, Thailand,] [added: one in Sixth of October City)] and its snack plant in [removed: Sixth of October City, Egypt,] [added: Wuhan, China,] all of which are owned; and its snack plant in Riyadh, Saudi Arabia, which is leased. |

| • | Two concentrate plants in Cork, Ireland, which are shared by our NAB, ESSA and AMENA [removed: divisions,] [added: segments,] both of which are [removed: owned.] [added: owned; and one in Singapore, which is shared by our NAB and AMENA segments, which is leased.] |

| • | Shared service centers in Winston-Salem, North Carolina, and Plano, Texas, which are primarily shared by our FLNA, QFNA and NAB [removed: divisions,] [added: segments,] both of which are leased. |

| Other Facilities (c) | 1,660 | | 4 | | 440 | | 575 | | 350 | | 335 | | 45 |

| Other Facilities (c) | 1,680 | | 3 | | 440 | | 585 | | 340 | | 345 | | 40 |

| [removed: Albert P. Carey] [added: Kirk Tanner] | [removed: 66] [added: 50] | Chief Executive Officer, North America [added: Beverages] |

| [removed: Sanjeev Chadha] [added: Mike Spanos] | [removed: 58] [added: 54] | [removed: Chairman,] [added: Chief Executive Officer,] Asia, Middle East and North Africa |

| [removed: Ruth Fattori] [added: Ronald Schellekens] | [removed: 65] [added: 54] | Executive Vice [removed: President, Human Resources] [added: President] and Chief Human Resources Officer, PepsiCo |

| Marie T. Gallagher | [removed: 58] [added: 59] | Senior Vice President and Controller, PepsiCo |

| Hugh F. Johnston | [removed: 56] [added: 57] | Vice Chairman, PepsiCo; Executive Vice President and Chief Financial Officer, PepsiCo |

| Dr. Mehmood Khan | [removed: 59] [added: 60] | Vice Chairman, PepsiCo; Executive Vice President, PepsiCo Chief Scientific Officer, Global Research and Development |

| Laxman Narasimhan | [removed: 50] [added: 51] | Chief Executive Officer, Latin [removed: America and] [added: America,] Europe [added: and] Sub-Saharan Africa |

| [removed: Indra K. Nooyi] [added: Ramon Laguarta] | [removed: 62] [added: 55] | Chairman of the Board of Directors and Chief Executive Officer, PepsiCo |

| Silviu Popovici | [removed: 50] [added: 51] | President, Europe Sub-Saharan Africa |

| Vivek Sankaran | [removed: 55] [added: 56] | [removed: President and] Chief [removed: Operating] [added: Executive] Officer, Frito-Lay North America |

[removed: |] Mike [removed: Spanos | 53 |] [added: Spanos, 54, was appointed] Chief Executive Officer, Asia, Middle East and North [removed: Africa |][added: Africa, effective January 2018.]

[removed: |] Kirk [removed: Tanner | 49 | President and] [added: Tanner, 50, was appointed] Chief [removed: Operating] [added: Executive] Officer, North America [removed: Beverages |][added: Beverages, effective January 2019.]

| David Yawman | [removed: 49] [added: 50] | Executive Vice President, Government Affairs, General Counsel and Corporate Secretary, PepsiCo |

[removed: Carey, 66,] [added: Vivek Sankaran, 56,] was appointed Chief Executive Officer, [added: Frito-Lay] North America, effective [removed: April 2016.][added: January 2019.]

[removed: Ruth Fattori, 65,] [added: Ronald Schellekens, 54,] was appointed Executive Vice [removed: President, Human Resources] [added: President] and Chief Human Resources Officer, [removed: PepsiCo] [added: PepsiCo,] effective [removed: October 2017.][added: December 2018.]

Gallagher, [removed: 58,] [added: 59,] was appointed PepsiCo’s Senior Vice President and Controller in May 2011.

Johnston, [removed: 56,] [added: 57,] was appointed Vice Chairman, PepsiCo in July 2015 and Executive Vice President and Chief Financial Officer, PepsiCo in March 2010.

Dr. Mehmood Khan, [removed: 59,] [added: 60,] was appointed Vice Chairman, PepsiCo in February 2015 and Executive Vice President, PepsiCo Chief Scientific Officer, Global Research and Development in May 2012.

[removed: He previously] [added: Prior to serving as PepsiCo’s President, Mr. Laguarta also] held [removed: the] [added: a variety of] positions of [removed: Chief Executive Officer,] [added: increasing responsibility in Europe, including as Commercial Vice President of PepsiCo] Europe [removed: Sub-Saharan Africa] from [removed: July 2015] [added: 2006] to [removed: September 2017, Chief Executive Officer,] [added: 2008,] PepsiCo [added: Eastern] Europe [added: Region] from [removed: January 2015] [added: 2008] to [removed: July 2015,] [added: 2012,] President, Developing & Emerging Markets, PepsiCo Europe from 2012 to [removed: January 2015 and President,] [added: 2015, Chief Executive Officer,] PepsiCo [removed: Eastern] Europe [removed: Region] [added: in 2015, and Chief Executive Officer, Europe Sub-Saharan Africa] from [removed: 2008] [added: 2015] to [removed: 2012.][added: 2017.]

Prior to joining PepsiCo in [removed: 1996,] [added: 1996 as a marketing vice president for Spain Snacks,] Mr. Laguarta worked for Chupa Chups, S.A., where he worked in several international assignments in [removed: Europe, Asia,] [added: Europe] and the United States.

Laxman Narasimhan, [removed: 50,] [added: 51,] was appointed Chief Executive Officer, Latin [removed: America and] [added: America,] Europe [added: and] Sub-Saharan Africa in September 2017.

[removed: Nooyi, 62,] [added: Ramon Laguarta, 55,] has [removed: been PepsiCo’s] [added: served as] Chief Executive Officer [added: of PepsiCo and as a director of the Board] since [removed: 2006] [added: October 2018,] and assumed the role of Chairman of [removed: PepsiCo’s] [added: the] Board [removed: of Directors] in [removed: 2007.][added: February 2019.]

Silviu Popovici, [removed: 50,] [added: 51,] was appointed President, Europe Sub-Saharan [removed: Africa] [added: Africa,] effective September 2017.

Prior to that, Mr. Sankaran served as [added: President and] Chief Operating Officer, Frito-Lay North America from [added: April 2016 to December 2018; Chief Operating Officer, Frito-Lay North America from] February 2016 to April 2016; Chief Commercial Officer, North America from 2014 to February 2016; Chief Customer Officer for Frito-Lay North America from 2012 to 2014; Senior Vice President and General Manager, Frito-Lay North America’s [removed: south] [added: South] business unit from 2011 to 2012; and Senior Vice President, Corporate Strategy and Development from 2009 to 2010.

Prior to that, Mr. Tanner served as [added: President and] Chief Operating Officer, North America Beverages [added: from April 2016 to December 2018; Chief Operating Officer, North America Beverages] and President, Global Foodservice from December 2015 to April 2016 and President, Global Foodservice from 2014 to December 2015.

David Yawman, [removed: 49,] [added: 50,] was appointed Executive Vice President, Government Affairs, General Counsel and Corporate Secretary, PepsiCo effective October 2017.

He previously served as Senior Vice President, PepsiCo Deputy General Counsel, General Counsel, North America Beverages and Quaker Foods North America from July 2015 to July 2017, as Senior Vice President, PepsiCo Deputy General Counsel, General Counsel, PepsiCo America [removed: Beverages from April 2014 to July 2015, as Senior Vice President, PepsiCo Chief Compliance and Ethics]

[added: Beverages from April 2014 to July 2015, as Senior Vice President, PepsiCo Chief Compliance and Ethics] Officer from March 2012 to April 2014 and as Senior Vice President, General Counsel, Pepsi Beverages Company from February 2010 to March 2012.

Prior to that, he [removed: spent] [added: served] five years in the law department of The Pepsi Bottling Group, Inc. (PBG) and, prior to that, was a member of PepsiCo’s corporate law department from the time he joined PepsiCo in 1998 until 2003.

Mr. Laguarta previously served as President from 2017 to 2018.

From 2002 to 2006, he was General Manager for Iberia Snacks and Juices, and from 1999 to 2001 a General Manager for Greece Snacks.

Prior to that, Mr. Schellekens served as Group HR Director of Vodafone Group Services Limited from 2009 to December 2018, where he was responsible for the Vodafone Human Resource Management function, as well as health and safety, and property and real estate functions.

Prior to joining Vodafone, Mr. Schellekens was executive vice president, human resources for the global downstream division of Royal Dutch Shell Plc.

Prior to that, he worked for PepsiCo for nine years from 1994 to 2003 in various international, senior human resources roles, including assignments in Switzerland, Spain, South Africa, the United Kingdom and Poland, where he was most recently responsible for the Europe, Middle East & Africa region for PepsiCo Foods International.

Prior to that, he served for nine years at AT&T Inc. in Human Resources.

| Ramon Laguarta | 54 | President, PepsiCo |

Albert P.

Mr. Carey previously served as Chief Executive Officer, North America Beverages from July 2015 to April 2016, as Chief Executive Officer, PepsiCo Americas Beverages from 2011 to July 2015 and as President and Chief Executive Officer of Frito-Lay North America from 2006 to 2011.

Mr. Carey began his career with Frito-Lay in 1981 where he spent 20 years in a variety of roles.

He served as President, PepsiCo Sales from 2003 until 2006.

Prior to that, he served as Chief Operating Officer, PepsiCo Beverages and Foods North America from 2002 to 2003 and as PepsiCo’s Senior Vice President, Sales and Retailer Strategies from 1998 to 2002.

Sanjeev Chadha, 58, was appointed Chairman, Asia, Middle East and North Africa, effective January 2018.

Mr. Chadha previously served as Chief Executive Officer, Asia, Middle East and North Africa from July 2015 to January 2018, as Chief Executive Officer, PepsiCo Asia, Middle East and Africa from 2013 to July 2015, as President of PepsiCo’s Middle East and Africa region from 2011 to 2013 and as President of PepsiCo’s India region from 2009 to 2010.

Mr. Chadha joined PepsiCo in 1989 and has held a variety of senior positions with the Company.

He served as Senior Vice President - Commercial, Asia Pacific, including China and India, Senior General Manager, Vietnam and the Philippines, and held other leadership roles in sales, marketing, innovation and franchise.

Ms. Fattori previously served as PepsiCo’s Senior Vice President, Talent Management, Training and Development from February 2013 until October 2017.

Prior to joining PepsiCo, Ms. Fattori was managing partner of Pecksland Partners, LLC from 2009 to February 2013.

From 2008 to 2009, Ms. Fattori served as Executive Vice President and Chief Administrative Officer for MetLife, Inc. From 2004 to 2008, Ms. Fattori served as Executive Vice President of Human Resources at Motorola, Inc. and, prior to that, held senior human resources positions at JPMorgan Chase & Co. and Siemens Corporation.

Ramon Laguarta, 54, was appointed President, PepsiCo in September 2017.

Mr. Laguarta joined PepsiCo in 1996 as a marketing vice president for Spain Snacks and served in a variety of positions, including as Commercial Vice President of PepsiCo Europe from 2006 to 2008, General Manager for Iberia Snacks and Juices from 2002 to 2006 and General Manager for Greece Snacks from 1999 to 2001.

Indra K.

She was elected to PepsiCo’s Board of Directors and became President and Chief Financial Officer in 2001, after serving as Senior Vice President and Chief Financial Officer since 2000.

Ms. Nooyi also served as PepsiCo’s Senior Vice President, Corporate Strategy and

Development from 1996 until 2000, and as PepsiCo’s Senior Vice President, Strategic Planning from 1994 until 1996.

Prior to joining PepsiCo, Ms. Nooyi spent four years as Senior Vice President of Strategy, Planning and Strategic Marketing for Asea Brown Boveri, Inc. She was also Vice President and Director of Corporate Strategy and Planning at Motorola, Inc. Ms. Nooyi has served as a director of Schlumberger Ltd. since 2015.

Vivek Sankaran, 55, was appointed President and Chief Operating Officer, Frito-Lay North America, effective April 2016.

Mike Spanos, 53, was appointed Chief Executive Officer, Asia, Middle East and North Africa, effective January 2018.

Kirk Tanner, 49, was appointed President and Chief Operating Officer, North America Beverages, effective April 2016.

[removed: Our] [added: Stock Exchange Listings – The Nasdaq Global Select Market is the principal market for our] common [removed: stock] [added: stock, which] is also listed on the [removed: Chicago Stock Exchange and] SIX Swiss Exchange.

Shareholders – As of February [removed: 6, 2018,] [added: 8, 2019,] there were approximately [removed: 120,156] [added: 114,513] shareholders of record of our common stock.

On February [removed: 5, 2018,] [added: 13, 2019,] the Board of Directors declared a quarterly dividend of [removed: $0.805] [added: $0.9275] payable March [removed: 30, 2018,] [added: 29, 2019,] to shareholders of record on March [removed: 2, 2018.][added: 1, 2019.]

For the remainder of [removed: 2018,] [added: 2019,] the dividend record dates for these payments are expected to be June [removed: 1,] [added: 7,] September [removed: 7] [added: 6] and December [removed: 7, 2018,] [added: 6, 2019,] subject to approval of the Board of Directors.

A summary of our common stock repurchases (in millions, except average price per share) during the fourth quarter of [removed: 2017] [added: 2018] is set forth in the table below.

| (b) | [removed: Includes] [added: Represents] shares authorized for repurchase under the [removed: $12] [added: $15] billion repurchase program authorized by our Board of Directors and publicly announced on February [removed: 11, 2015, which commenced on July 1, 2015 and expires on June 30, 2018. On February] 13, 2018, [removed: we publicly announced a new repurchase program of up to $15 billion of our common stock,] which [removed: will commence] [added: commenced] on July 1, 2018 and [added: will] expire on June 30, [removed: 2021, and such shares are excluded from the above table.] [added: 2021.] Such shares may be repurchased in open market transactions, in privately negotiated transactions, in accelerated stock repurchase transactions or otherwise. |

| 9/8/2018 | | | | | | | | | | | $ | 14,631 | |

| 9/9/2018 - 10/6/2018 | 1.3 | | | $ | 112.64 | | | 1.3 | | | (147 | | ) |

| | | | | | | | | | | | 14,484 | | |

| 10/7/2018 - 11/3/2018 | 1.3 | | | $ | 110.39 | | | 1.3 | | | (145 | | ) |

| | | | | | | | | | | | 14,339 | | |

| 11/4/2018 - 12/1/2018 | 1.4 | | | $ | 116.68 | | | 1.4 | | | (163 | | ) |

| | | | | | | | | | | | 14,176 | | |

| 12/2/2018 - 12/29/2018 | 0.8 | | | $ | 116.99 | | | 0.8 | | | (92 | | ) |

| Total | 4.8 | | | $ | 113.91 | | | 4.8 | | | $ | 14,084 | |

Stock Exchange Listings – Since December 20, 2017, our common stock has traded on The Nasdaq Global Select Market.

Before December 20, 2017, our common stock traded on The New York Stock Exchange.

Stock Prices – The quarterly composite high and low sales prices for PepsiCo common stock for each fiscal quarter of 2017 and 2016 as reported on The New York Stock Exchange through December 19, 2017 and The Nasdaq Global Select Market from December 20, 2017 through December 30, 2017, are contained in “Item 6.

Selected Financial Data.”

Information with respect to the quarterly dividends declared in 2017 and 2016 is contained in “Item 6.

Selected Financial Data.”

| 9/9/2017 | | | | | | | | | | | $ | 5,857 | |

| 9/10/2017 - 10/7/2017 | 1.5 | | | $ | 112.85 | | | 1.5 | | | (167 | | ) |

| | | | | | | | | | | | 5,690 | | |

| 10/8/2017 - 11/4/2017 | 1.3 | | | $ | 111.00 | | | 1.3 | | | (139 | | ) |

| | | | | | | | | | | | 5,551 | | |

| 11/5/2017 - 12/2/2017 | 1.1 | | | $ | 114.32 | | | 1.1 | | | (126 | | ) |

| | | | | | | | | | | | 5,425 | | |

| 12/3/2017 - 12/30/2017 | 0.6 | | | $ | 117.55 | | | 0.6 | | | (72 | | ) |

| Total | 4.5 | | | $ | 113.34 | | | 4.5 | | | $ | 5,353 | |

In connection with our merger with The Quaker Oats Company (Quaker) in 2001, shares of our convertible preferred stock were authorized and issued to an employee stock ownership plan (ESOP) fund established by Quaker.

In the fourth quarter of 2017, PepsiCo repurchased shares of its convertible preferred stock from the ESOP in connection with share redemptions by ESOP participants.

See Note 11 to our consolidated financial statements for additional information on our convertible preferred stock.

The Company does not have any authorized, but unissued, “blank check preferred stock.”

The following table summarizes our convertible preferred share repurchases during the fourth quarter of 2017.

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 |

| 9/10/2017 - 10/7/2017 | — | | | $ | — | | | N/A | | N/A |

| | | | | | | | | | | |

| 10/8/2017 - 11/4/2017 | 1,000 | | | $ | 548.21 | | | N/A | | N/A |

| | | | | | | | | | | |

| 11/5/2017 - 12/2/2017 | — | | | $ | — | | | N/A | | N/A |

| | | | | | | | | | | |

| 12/3/2017 - 12/30/2017 | 900 | | | $ | 578.48 | | | N/A | | N/A |

| Total | 1,900 | | | $ | 562.55 | | | N/A | | N/A |

| | [removed: 2017] [added: 2018] | | | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | |

| Net revenue (a) | $ | [removed: 63,525] [added: 64,661] | | | $ | [removed: 62,799] [added: 63,525] | | | $ | [removed: 63,056] [added: 62,799] | | | $ | [removed: 66,683] [added: 63,056] | | | $ | [removed: 66,415] [added: 66,683] | |

| [removed: Provision] [added: (Benefit from)/provision] for income taxes [removed: (b)] [added: (c)] | $ | [removed: 4,694] [added: (3,370] | [added: )] | | $ | [removed: 2,174] [added: 4,694] | | | $ | [removed: 1,941] [added: 2,174] | | | $ | [removed: 2,199] [added: 1,941] | | | $ | [removed: 2,104] [added: 2,199] | |

| Net income attributable to PepsiCo [removed: (b)] [added: (c)] | $ | [removed: 4,857] [added: 12,515] | | | $ | [removed: 6,329] [added: 4,857] | | | $ | [removed: 5,452] [added: 6,329] | | | $ | [removed: 6,513] [added: 5,452] | | | $ | [removed: 6,740] [added: 6,513] | |

| Net income attributable to PepsiCo per common share – basic [removed: (b)] [added: (c)] | $ | [removed: 3.40] [added: 8.84] | | | $ | [removed: 4.39] [added: 3.40] | | | $ | [removed: 3.71] [added: 4.39] | | | $ | [removed: 4.31] [added: 3.71] | | | $ | [removed: 4.37] [added: 4.31] | |

| Net income attributable to PepsiCo per common share – diluted [removed: (b)] [added: (c)] | $ | [removed: 3.38] [added: 8.78] | | | $ | [removed: 4.36] [added: 3.38] | | | $ | [removed: 3.67] [added: 4.36] | | | $ | [removed: 4.27] [added: 3.67] | | | $ | [removed: 4.32] [added: 4.27] | |

| Cash dividends declared per common share | $ | [removed: 3.1675] [added: 3.5875] | | | $ | [removed: 2.96] [added: 3.1675] | | | $ | [removed: 2.7625] [added: 2.96] | | | $ | [removed: 2.5325] [added: 2.7625] | | | $ | [removed: 2.24] [added: 2.5325] | |

| Total assets | $ | [removed: 79,804] [added: 77,648] | | | $ | [removed: 73,490] [added: 79,804] | | | $ | [removed: 68,976] [added: 73,490] | | | $ | [removed: 69,634] [added: 68,976] | | | $ | [removed: 76,762] [added: 69,634] | |

| Long-term debt | $ | [removed: 33,796] [added: 28,295] | | | $ | [removed: 30,053] [added: 33,796] | | | $ | [removed: 29,213] [added: 30,053] | | | $ | [removed: 23,821] [added: 29,213] | | | $ | [removed: 24,333] [added: 23,821] | |

| (a) | Our fiscal 2016 results included an extra week of [removed: results.] [added: results (53rd reporting week).] The 53rd reporting week increased 2016 net revenue by $657 million, including $294 million in our FLNA segment, $43 million in our QFNA segment, $300 million in our NAB segment and $20 million in our ESSA segment. |

| | 2017 | | | | | | | | | | | | | | | [added: | | | |]

| | Operating [removed: profit] [added: profit(b)] | | | | [added: Other pension and retiree medical benefits income(b) | | | |] Provision for income [removed: taxes(c)] [added: taxes(d)] | | | | Net income attributable to PepsiCo | | | | Net income attributable to PepsiCo per common share – diluted | | |

| Mark-to-market net impact [removed: (d)] [added: (e)] | $ | 15 | | | $ | [added: — | | | $ |] (7 | ) | | $ | 8 | | | $ | 0.01 | |

| Restructuring and impairment charges [removed: (e)] [added: (f)] | $ | [removed: (295] [added: (229] | ) | | $ | [added: (66 | ) | | $ |] 71 | | | $ | (224 | ) | | $ | (0.16 | ) |

| Provisional net tax expense related to the TCJ Act [removed: (f)] [added: (h)] | $ | — | | | $ | [added: — | | | $ |] (2,451 | ) | | $ | (2,451 | ) | | $ | (1.70 | ) |

| Gain on sale of Britvic plc (Britvic) securities [removed: (g)] [added: (n)] | $ | 95 | | | $ | [added: — | | | $ |] (10 | ) | | $ | 85 | | | $ | 0.06 | |

| Gain on beverage refranchising [removed: (h)] [added: (l)] | $ | 140 | | | $ | [added: — | | | $ |] (33 | ) | | $ | 107 | | | $ | 0.07 | |

| Gain on sale of assets [removed: (i)] [added: (m)] | $ | 87 | | | $ | [added: — | | | $ |] (25 | ) | | $ | 62 | | | $ | 0.04 | |

| | 2016 | | | | | | | | | | | | | | | | | | | | | | | [added: | | | |]

| | Operating [removed: profit] [added: profit(b)] | | | | [added: Other pension and retiree medical benefits expense(b) | | | |] Interest expense | | | | Provision for income [removed: taxes(c)] [added: taxes(d)] | | | | Net income attributable to noncontrolling interests | | | | Net income attributable to PepsiCo | | | | Net income attributable to PepsiCo per common share – diluted | | |

| Mark-to-market net impact [removed: (d)] [added: (e)] | $ | 167 | | | $ | — | | | $ | [added: — | | | $ |] (56 | ) | | $ | — | | | $ | 111 | | | $ | 0.08 | |

| Restructuring and impairment charges [removed: (e)] [added: (f)] | $ | [removed: (160] [added: (155] | ) | | $ | [added: (5 | ) | | $ |] — | | | $ | 26 | | | $ | 3 | | | $ | (131 | ) | | $ | (0.09 | ) |

| Charge related to the transaction with Tingyi [removed: (j)] [added: (o)] | $ | (373 | ) | | $ | — | | | $ | — | | | $ | — | | | $ | [added: — | | | $ |] (373 | ) | | $ | (0.26 | ) |

| Charge related to debt redemption [removed: (k)] [added: (j)] | $ | — | | | $ | [added: — | | | $ |] (233 | ) | | $ | 77 | | | $ | — | | | $ | (156 | ) | | $ | (0.11 | ) |

| Pension-related settlement charge [removed: (l)] [added: (p)] | $ | [added: — | | | $ |] (242 | ) | | $ | — | | | $ | 80 | | | $ | — | | | $ | (162 | ) | | $ | (0.11 | ) |

| 53rd reporting week [removed: (m)] [added: (q)] | $ | 126 | | | $ | [added: — | | | $ |] (19 | ) | | $ | (44 | ) | | $ | (1 | ) | | $ | 62 | | | $ | 0.04 | |

| | 2015 | | | | | | | | | | | | | | | [added: | | | |]

| | Operating [removed: profit] [added: profit(b)] | | | | [added: Other pension and retiree medical benefits income(b) | | | |] Provision for income [removed: taxes(c)] [added: taxes(d)] | | | | Net income attributable to PepsiCo | | | | Net income attributable to PepsiCo per common share – diluted | | |

| Mark-to-market net impact [removed: (d)] [added: (e)] | $ | 11 | | | $ | [added: — | | | $ |] (3 | ) | | $ | 8 | | | $ | — | |

| Restructuring and impairment charges [removed: (e)] [added: (f)] | $ | [removed: (230] [added: (207] | ) | | $ | [added: (23 | ) | | $ |] 46 | | | $ | (184 | ) | | $ | (0.12 | ) |

| Charge related to the transaction with Tingyi [removed: (j)] [added: (o)] | $ | (73 | ) | | $ | — | | | $ | [added: — | | | $ |] (73 | ) | | $ | (0.05 | ) |

| Pension-related settlement benefits [removed: (l)] [added: (p)] | $ | 67 | | | $ | [added: — | | | $ |] (25 | ) | | $ | 42 | | | $ | 0.03 | |

| Venezuela impairment charges [removed: (n)] [added: (r)] | $ | (1,359 | ) | | $ | — | | | $ | [added: — | | | $ |] (1,359 | ) | | $ | (0.91 | ) |

| Tax benefit [removed: (o)] [added: (i)] | $ | — | | | $ | [added: — | | | $ |] 230 | | | $ | 230 | | | $ | 0.15 | |

| Müller Quaker Dairy (MQD) impairment [removed: (p)] [added: (s)] | $ | (76 | ) | | $ | [added: — | | | $ |] 28 | | | $ | (48 | ) | | $ | (0.03 | ) |

| Gain on beverage refranchising [removed: (h)] [added: (l)] | $ | 39 | | | $ | [added: — | | | $ |] (11 | ) | | $ | 28 | | | $ | 0.02 | |

| Other productivity initiatives [removed: (q)] [added: (t)] | $ | (90 | ) | | $ | [added: — | | | $ |] 24 | | | $ | (66 | ) | | $ | (0.04 | ) |

| Joint venture impairment charge [removed: (r)] [added: (u)] | $ | (29 | ) | | $ | — | | | $ | [added: — | | | $ |] (29 | ) | | $ | (0.02 | ) |

| | 2014 | | | | | | | | | | | | | | | | | | | [added: | | | |]

| | Operating [removed: profit] [added: profit(b)] | | | | [added: Other pension and retiree medical benefits expense(b) | | | |] Provision for income [removed: taxes(c)] [added: taxes(d)] | | | | Net income attributable to noncontrolling interests | | | | Net income attributable to PepsiCo | | | | Net income attributable to PepsiCo per common share – diluted | | |

| Operating profit (b) | $ | 10,110 | | | $ | 10,276 | | | $ | 9,804 | | | $ | 8,274 | | | $ | 9,755 | |

| (b) | Our fiscal results prior to 2018 reflect the retrospective adoption of guidance requiring the presentation of non-service cost components of net periodic benefit cost below operating profit. See Note 2 to our consolidated financial statements. |

| (c) | Our fiscal 2018 results include other net tax benefits related to the reorganization of our international operations. Our fiscal 2018 and 2017 results include the impact of the TCJ Act. See Note 5 to our consolidated financial statements. |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | Operating profit | | | | Other pension and retiree medical benefits income | | | | Interest expense | | | | Benefit from income taxes(d) | | | | Net income attributable to noncontrolling interests | | | | Net income attributable to PepsiCo | | | | Net income attributable to PepsiCo per common share – diluted | | |

| Merger and integration charges (g) | $ | (75 | ) | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (75 | ) | | $ | (0.05 | ) |

| Net tax benefit related to the TCJ Act (h) | $ | — | | | $ | — | | | $ | — | | | $ | 28 | | | $ | — | | | $ | 28 | | | $ | 0.02 | |

| Other net tax benefits (i) | $ | — | | | $ | — | | | $ | — | | | $ | 5,064 | | | $ | — | | | $ | 5,064 | | | $ | 3.55 | |

| Charges related to cash tender and exchange offers (j) | $ | — | | | $ | — | | | $ | (253 | ) | | $ | 62 | | | $ | — | | | $ | (191 | ) | | $ | (0.13 | ) |

| Tax reform bonus (k) | $ | (87 | ) | | $ | — | | | $ | — | | | $ | 21 | | | $ | — | | | $ | (66 | ) | | $ | (0.05 | ) |

| Gains on beverage refranchising (l) | $ | 202 | | | $ | — | | | $ | — | | | $ | (30 | ) | | $ | — | | | $ | 172 | | | $ | 0.12 | |

| Gains on sale of assets (m) | $ | 76 | | | $ | — | | | $ | — | | | $ | (19 | ) | | $ | — | | | $ | 57 | | | $ | 0.04 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | |

| (g) | In 2018, merger and integration charges related to our acquisition of SodaStream. $57 million of this charge was recorded in the ESSA segment, with the balance recorded in corporate unallocated expenses. See Note 14 to our consolidated financial statements. |

| (k) | In 2018, bonus extended to certain U.S. employees in connection with the TCJ Act in the following segments: $44 million in FLNA, $2 million in QFNA and $41 million in NAB. |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | 2018 | | | | | | | | | | | | | | | | 2017 | | | | | | | | | | | | | | |

| Gross profit (a) | $ | 6,907 | | | $ | 8,827 | | | $ | 8,958 | | | $ | 10,588 | | | $ | 6,759 | | | $ | 8,651 | | | $ | 8,872 | | | $ | 10,447 | |

| Operating profit (a) | $ | 1,807 | | | $ | 3,028 | | | $ | 2,844 | | | $ | 2,431 | | | $ | 1,863 | | | $ | 2,919 | | | $ | 2,924 | | | $ | 2,570 | |

| Other net tax benefits (f) | — | | | | $ | 314 | | | $ | 364 | | | $ | 4,386 | | | — | | | | — | | | | — | | | | — | | |

| Charges related to cash tender and exchange offers (g) | — | | | | — | | | | — | | | | $ | (253 | ) | | — | | | | — | | | | — | | | | — | | |

| Tax reform bonus (h) | $ | (87 | ) | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | |

| Basic | $ | 0.94 | | | $ | 1.28 | | | $ | 1.77 | | | $ | 4.86 | | | $ | 0.92 | | | $ | 1.47 | | | $ | 1.50 | | | $ | (0.50 | ) |

| Diluted | $ | 0.94 | | | $ | 1.28 | | | $ | 1.75 | | | $ | 4.83 | | | $ | 0.91 | | | $ | 1.46 | | | $ | 1.49 | | | $ | (0.50 | ) |

| (a) | In 2017, reflect the retrospective adoption of guidance requiring the presentation of non-service cost components of net periodic benefit cost below operating profit. See Note 2 to our consolidated financial statements. |

| (d) | In 2018, merger and integration charges related to our acquisition of SodaStream. $57 million of this charge was recorded in the ESSA segment, with the balance recorded in corporate unallocated expenses. See Note 14 to our consolidated financial statements. |

| (f) | In 2018, other net tax benefits of $4.3 billion resulting from the reorganization of our international operations. Also in 2018, non-cash tax benefits of $717 million associated with both the conclusion of certain international tax audits and our agreement with the IRS resolving all open matters related to the audits of taxable years 2012 and 2013. See Note 5 to our consolidated financial statements. |

| (g) | In 2018, interest expense in connection with our cash tender and exchange offers. See Note 8 to our consolidated financial statements. |

| (h) | In 2018, bonus extended to certain U.S. employees in connection with the TCJ Act in the following segments: $44 million in FLNA, $2 million in QFNA and $41 million in NAB. |

| | |

| Operating profit | $ | 10,509 | | | $ | 9,785 | | | $ | 8,353 | | | $ | 9,581 | | | $ | 9,705 | |

| (b) | Includes the provisional impact of the TCJ Act enacted in 2017. See Note 5 to our consolidated financial statements for additional information. |

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | |

| | 2013 | | | | | | | | | | | | | | |

| Tax benefit (o) | $ | — | | | $ | 209 | | | $ | 209 | | | $ | 0.13 | |

| Venezuela remeasurement charge (s) | $ | (111 | ) | | $ | — | | | $ | (111 | ) | | $ | (0.07 | ) |

| Gain on beverage refranchising (h) | $ | 137 | | | $ | — | | | $ | 137 | | | $ | 0.09 | |

| (t) | In 2013, merger and integration charges in the ESSA segment related to our acquisition of WBD. |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | 2017 | | | | | | | | | | | | | | | | | | 2016 | | | | | | | | | | | | | | |

| Gross profit | $ | 6,763 | | | | $ | 8,654 | | | | $ | 8,874 | | | $ | 10,449 | | | $ | 6,711 | | | $ | 8,565 | | | $ | 8,743 | | | $ | 10,571 | |

| Operating profit | $ | 1,933 | | | | $ | 2,990 | | | | $ | 2,993 | | | $ | 2,593 | | | $ | 1,619 | | | $ | 2,964 | | | $ | 2,821 | | | $ | 2,381 | |

| Charge related to the transaction with Tingyi (h) | — | | | | | — | | | | | — | | | | — | | | | $ | (373 | ) | | — | | | | — | | | | — | | |

| Charge related to debt redemption (i) | — | | | | | — | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | $ | (233 | ) |

| Pension-related settlement charge (j) | — | | | | | — | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | $ | (242 | ) |

| 53rd reporting week (k) | — | | | | | — | | | | | — | | | | — | | | | — | | | | — | | | | — | | | | $ | 126 | |

| Net income/(loss) attributable to PepsiCo per common share (l) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic | $ | 0.92 | | | | $ | 1.47 | | | | $ | 1.50 | | | $ | (0.50 | ) | | $ | 0.64 | | | $ | 1.39 | | | $ | 1.38 | | | $ | 0.98 | |

| Diluted | $ | 0.91 | | | | $ | 1.46 | | | | $ | 1.49 | | | $ | (0.50 | ) | | $ | 0.64 | | | $ | 1.38 | | | $ | 1.37 | | | $ | 0.97 | |

| Stock price per share (m) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| High | $ | 112.38 | | | | $ | 118.12 | | | | $ | 119.39 | | | $ | 120.57 | | | $ | 102.12 | | | $ | 106.94 | | | $ | 110.94 | | | $ | 109.71 | |

| Low | $ | 101.06 | | | | $ | 111.34 | | | | $ | 112.25 | | | $ | 106.19 | | | $ | 93.25 | | | $ | 100.00 | | | $ | 101.30 | | | $ | 98.50 | |

| (a) | Our fiscal 2016 results included a 53rd reporting week which increased 2016 net revenue by $657 million, including $294 million in our FLNA segment, $43 million in our QFNA segment, $300 million in our NAB segment and $20 million in our ESSA segment. |

| (h) | In 2016, impairment charge in the AMENA segment to reduce the value of our 5% indirect equity interest in TAB to its estimated fair value. See Note 9 to our consolidated financial statements. |

| (i) | In 2016, interest expense primarily representing the premium paid in accordance with the “make-whole” redemption provisions to redeem all of our outstanding 7.900% senior notes due 2018 and 5.125% senior notes due 2019 for the principal amounts of $1.5 billion and $750 million, respectively. See Note 8 to our consolidated financial statements. |

| (j) | In 2016, pension settlement charge in corporate unallocated expenses related to the purchase of a group annuity contract. |

| (k) | Our fiscal 2016 results included the 53rd reporting week, the impact of which was fully offset by incremental investments in our business. |

| (l) | Includes the provisional impact of the TCJ Act enacted in the fourth quarter of 2017. See Note 5 to our consolidated financial statements for additional information. |

| (m) | Reflects the quarterly composite high and low sales prices for one share of PepsiCo common stock as reported on The New York Stock Exchange from December 27, 2015 through December 19, 2017 and The Nasdaq Global Select Market from December 20, 2017 through December 30, 2017. |

Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December [removed: 30, 2017.][added: 29, 2018.]

[removed: There were] [added: Except as discussed, there have been] no changes in our internal control over financial reporting during our fourth fiscal quarter of [removed: 2017] [added: 2018] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

During our fourth fiscal quarter of [removed: 2017,] [added: 2018,] we continued migrating certain of our financial processing systems to an enterprise-wide systems solution.

[removed: 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.

[removed: This transition has] [added: These transitions have] not materially affected, and we do not expect [removed: it] [added: them] to materially affect, our internal control over financial reporting.

As permitted by SEC guidance, the scope of management’s assessment of the effectiveness of our internal control over financial reporting as of December 29, 2018 excluded SodaStream International Ltd. and its subsidiaries (SodaStream), which we acquired in December 2018.

SodaStream’s total assets and net revenue represented approximately 5% and 1%, respectively, of the consolidated total assets and net revenue of PepsiCo, Inc. as of and for the year ended December 29, 2018.

These systems implementations are part of our ongoing global business

In addition, in connection with our 2019 multi-year productivity program, we continue to migrate to shared business models across our operations to further simplify, harmonize and automate processes.

Information about our directors and persons nominated to become directors is contained under the caption “Election of Directors” in our Proxy Statement for our [removed: 2018] [added: 2019] Annual Meeting of Shareholders to be filed with the SEC within 120 days of the fiscal year ended December [removed: 30, 2017 (the] [added: 29,] 2018 [added: (the 2019] Proxy Statement) and is incorporated herein by reference.

Information on beneficial ownership reporting compliance is contained under the caption “Ownership of PepsiCo Common Stock – Section 16(a) Beneficial Ownership Reporting Compliance” in our [removed: 2018] [added: 2019] Proxy Statement and is incorporated herein by reference.

Information about the procedures by which security holders may recommend nominees to our Board of Directors can be found in our [removed: 2018] [added: 2019] Proxy Statement under the caption “Board Composition and Refreshment – Shareholder Recommendations and Nominations of Director Candidates” and is incorporated herein by reference.

Information concerning the composition of the Audit Committee and our Audit Committee financial experts is contained in our [removed: 2018] [added: 2019] Proxy Statement under the caption “Corporate Governance at PepsiCo – Committees of the Board of Directors – Audit Committee” and is incorporated herein by reference.

Information about director and executive officer compensation, Compensation Committee interlocks and the Compensation Committee Report is contained in our [removed: 2018] [added: 2019] Proxy Statement under the captions [removed: “2017] [added: “2018] Director Compensation,” “Executive Compensation,” “Corporate Governance at PepsiCo – Committees of the Board of Directors – Compensation Committee – Compensation Committee Interlocks and Insider Participation” and “Executive Compensation – Compensation Committee Report” and is incorporated herein by reference.

Information with respect to securities authorized for issuance under equity compensation plans can be found under the caption “Executive Compensation – Securities Authorized for Issuance Under Equity Compensation Plans” in our [removed: 2018] [added: 2019] Proxy Statement and is incorporated herein by reference.

Information on the number of shares of PepsiCo Common Stock beneficially owned by each director and named executive officer, by all directors and executive officers as a group and on each beneficial owner of more than 5% of PepsiCo Common Stock is contained under the caption “Ownership of PepsiCo Common Stock” in our [removed: 2018] [added: 2019] Proxy Statement and is incorporated herein by reference.

Information with respect to certain relationships and related transactions and director independence is contained under the captions “Corporate Governance at PepsiCo – Related Person Transactions” and “Corporate Governance at PepsiCo – Director Independence” in our [removed: 2018] [added: 2019] Proxy Statement and is incorporated herein by reference.

Information on our Audit Committee’s pre-approval policy and procedures for audit and other services and information on our principal accountant fees and services is contained in our [removed: 2018] [added: 2019] Proxy Statement under the caption “Ratification of Appointment of Independent Registered Public Accounting Firm – Audit and Other Fees” and is incorporated herein by reference.

| | Consolidated Statement of Income – Fiscal years ended December [added: 29, 2018, December] 30, [removed: 2017,] [added: 2017 and] December 31, 2016 [removed: and December 26, 2015] |

| | Consolidated Statement of Comprehensive Income – Fiscal years ended December [added: 29, 2018, December] 30, [removed: 2017,] [added: 2017 and] December 31, 2016 [removed: and December 26, 2015] |

| | Consolidated Statement of Cash Flows – Fiscal years ended December [added: 29, 2018, December] 30, [removed: 2017,] [added: 2017 and] December 31, 2016 [removed: and December 26, 2015] |

| | Consolidated Balance Sheet – December [removed: 30, 2017] [added: 29, 2018] and December [removed: 31, 2016] [added: 30, 2017] |

| | Consolidated Statement of Equity – Fiscal years ended December [added: 29, 2018, December] 30, [removed: 2017,] [added: 2017 and] December 31, 2016 [removed: and December 26, 2015] |

| 4.1 | PepsiCo, Inc. agrees to furnish to the [removed: SEC,] [added: Securities and Exchange Commission,] upon request, a copy of any [removed: instrument] [added: instrument, not otherwise filed herewith,] defining the rights of holders of long-term debt of PepsiCo, Inc. and [removed: all] [added: its consolidated subsidiaries and for any] of its [added: unconsolidated] subsidiaries for which [removed: consolidated or unconsolidated] financial statements are required to be filed with the Securities and Exchange Commission. |

| 4.3 | [Form of [removed: 5.00%] [added: 4.50%] Senior Note due [removed: 2018,] [added: 2020,] which is incorporated herein by reference to Exhibit [removed: 4.2] [added: 4.3] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on [removed: May 21, 2008.](http://www.sec.gov/Archives/edgar/data/77476/000119312508120137/dex42.htm)] [added: January 13, 2010.](http://www.sec.gov/Archives/edgar/data/77476/000095012310002313/y81499exv4w3.htm)] |

| [removed: 4.4] [added: 4.43] | [Form of [removed: 7.90%] [added: 2.500%] Senior Note due [removed: 2018,] [added: 2022,] 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 October [removed: 24, 2008.](http://www.sec.gov/Archives/edgar/data/77476/000095012308013363/y71867exv4w1.htm)] [added: 30, 2012.](http://www.sec.gov/Archives/edgar/data/77476/000119312512441707/d425877dex41.htm)] |

| [removed: 4.5] [added: 4.4] | [Form of [removed: 4.50%] [added: 5.50%] Senior Note due [removed: 2020,] [added: 2040,] which is incorporated herein by reference to Exhibit [removed: 4.3] [added: 4.4] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, [removed: 2010.](http://www.sec.gov/Archives/edgar/data/77476/000095012310002313/y81499exv4w3.htm)] [added: 2010.](http://www.sec.gov/Archives/edgar/data/77476/000095012310002313/y81499exv4w4.htm)] |

| 4.6 | [Form of [removed: 5.50%] [added: 4.875%] Senior Note due 2040, which is incorporated herein by reference to Exhibit [removed: 4.4] [added: 4.3] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on [removed: January 13, 2010.](http://www.sec.gov/Archives/edgar/data/77476/000095012310002313/y81499exv4w4.htm)] [added: October 25, 2010.](http://www.sec.gov/Archives/edgar/data/77476/000095012310095596/y87267exv4w3.htm)] |

| [removed: 4.7] [added: 4.5] | [Form of 3.125% Senior Note due 2020, 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 October 25, 2010.](http://www.sec.gov/Archives/edgar/data/77476/000095012310095596/y87267exv4w2.htm) |

| [removed: 4.8] [added: 4.16] | [Form of [removed: 4.875%] [added: 2.150%] Senior Note due [removed: 2040,] [added: 2020,] which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October [removed: 25, 2010.](http://www.sec.gov/Archives/edgar/data/77476/000095012310095596/y87267exv4w3.htm)] [added: 14, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915070645/a15-20899_1ex4d3.htm)] |

| [removed: 4.9] [added: 4.7] | [Form of [removed: 0.950%] [added: 3.600%] Senior [removed: Notes] [added: Note] due [removed: 2017,] [added: 2024,] which is incorporated herein by reference to Exhibit [removed: 4.1] [added: 4.2] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 28, [removed: 2014.](http://www.sec.gov/Archives/edgar/data/77476/000110465914014923/a14-6261_3ex4d1.htm)] [added: 2014.](http://www.sec.gov/Archives/edgar/data/77476/000110465914014923/a14-6261_3ex4d2.htm)] |

| 4.10 | [Form of [removed: 3.600%] [added: 4.250%] Senior [removed: Notes] [added: Note] due [removed: 2024,] [added: 2044,] which is incorporated herein by reference to Exhibit [removed: 4.2 to] [added: 4.1 of] PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on [removed: February 28, 2014.](http://www.sec.gov/Archives/edgar/data/77476/000110465914014923/a14-6261_3ex4d2.htm)] [added: October 22, 2014.](http://www.sec.gov/Archives/edgar/data/77476/000110465914073055/a14-21385_4ex4d1.htm)] |

| [removed: 4.11] [added: 4.8] | [Form of 1.750% Senior [removed: Notes] [added: Note] due 2021, 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 April 28, 2014.](http://www.sec.gov/Archives/edgar/data/77476/000110465914031301/a14-11218_1ex4d1.htm) |

| [removed: 4.12] [added: 4.9] | [Form of 2.625% Senior [removed: Notes] [added: Note] due 2026, 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 April 28, 2014.](http://www.sec.gov/Archives/edgar/data/77476/000110465914031301/a14-11218_1ex4d2.htm) |

| 4.13 | [Form of [removed: 4.250%] [added: 3.100%] Senior [removed: Notes] [added: Note] due [removed: 2044,] [added: 2022,] which is incorporated herein by reference to Exhibit [removed: 4.1 of] [added: 4.3 to] PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on [removed: October 22, 2014.](http://www.sec.gov/Archives/edgar/data/77476/000110465914073055/a14-21385_4ex4d1.htm)] [added: July 17, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915051710/a15-15727_1ex4d3.htm)] |

| [removed: 4.14] [added: 4.11] | [Form of [removed: Floating Rate Notes] [added: 1.850% Senior Note] due [removed: 2018,] [added: 2020,] which is incorporated herein by reference to Exhibit [removed: 4.1] [added: 4.3] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 30, [removed: 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915032611/a15-10046_1ex4d1.htm)] [added: 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915032611/a15-10046_1ex4d3.htm)] |

| [removed: 4.15] [added: 4.12] | [Form of [removed: 1.250%] [added: 2.750%] Senior [removed: Notes] [added: Note] due [removed: 2018,] [added: 2025,] which is incorporated herein by reference to Exhibit [removed: 4.2] [added: 4.4] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 30, [removed: 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915032611/a15-10046_1ex4d2.htm)] [added: 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915032611/a15-10046_1ex4d4.htm)] |

| [removed: 4.16] [added: 4.14] | [Form of [removed: 1.850%] [added: 3.500%] Senior [removed: Notes] [added: Note] due [removed: 2020,] [added: 2025,] which is incorporated herein by reference to Exhibit [removed: 4.3] [added: 4.4] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on [removed: April 30, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915032611/a15-10046_1ex4d3.htm)] [added: July 17, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915051710/a15-15727_1ex4d4.htm)] |

| 4.17 | [Form of [removed: 2.750%] [added: 4.450%] Senior [removed: Notes] [added: Note] due [removed: 2025,] [added: 2046,] which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on [removed: April 30, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915032611/a15-10046_1ex4d4.htm)] [added: October 14, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915070645/a15-20899_1ex4d4.htm)] |

| 4.18 | [Form of Floating Rate [removed: Notes] [added: Note] due [removed: 2017,] [added: 2019,] 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 [removed: July 17, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915051710/a15-15727_1ex4d1.htm)] [added: February 24, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916099579/a16-4973_1ex4d1.htm)] |

| [removed: 4.19] [added: 4.15] | [Form of [removed: 1.125%] [added: 4.600%] Senior [removed: Notes] [added: Note] due [removed: 2017,] [added: 2045,] which is incorporated herein by reference to Exhibit [removed: 4.2] [added: 4.5] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July 17, [removed: 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915051710/a15-15727_1ex4d2.htm)] [added: 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915051710/a15-15727_1ex4d5.htm)] |

| 4.20 | [Form of [removed: 3.100%] [added: 2.850%] Senior [removed: Notes] [added: Note] due [removed: 2022,] [added: 2026,] which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on [removed: July 17, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915051710/a15-15727_1ex4d3.htm)] [added: February 24, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916099579/a16-4973_1ex4d3.htm)] |

| 4.21 | [Form of [removed: 3.500%] [added: 4.450%] Senior [removed: Notes] [added: Note] due [removed: 2025,] [added: 2046,] which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on [removed: July 17, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915051710/a15-15727_1ex4d4.htm)] [added: February 24, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916099579/a16-4973_1ex4d4.htm)] |

| 4.22 | [Form of [removed: 4.600%] [added: 0.875%] Senior [removed: Notes] [added: Note] due [removed: 2045,] [added: 2028,] which is incorporated herein by reference to Exhibit [removed: 4.5] [added: 4.1] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on July [removed: 17, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915051710/a15-15727_1ex4d5.htm)] [added: 18, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916133022/a16-11909_5ex4d1.htm)] |

| 4.23 | [Form of Floating Rate [removed: Notes] [added: Note] due [removed: 2017,] [added: 2019,] 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 October [removed: 14, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915070645/a15-20899_1ex4d1.htm)] [added: 6, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916149114/a16-18482_5ex4d1.htm)] |

| 4.24 | [Form of [removed: 1.000% Senior Notes] [added: Floating Rate Note] due [removed: 2017,] [added: 2021,] 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 October [removed: 14, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915070645/a15-20899_1ex4d2.htm)] [added: 6, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916149114/a16-18482_5ex4d2.htm)] |

| 4.25 | [Form of [removed: 2.150%] [added: 1.350%] Senior [removed: Notes] [added: Note] due [removed: 2020,] [added: 2019,] which is incorporated herein by reference to Exhibit 4.3 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October [removed: 14, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915070645/a15-20899_1ex4d3.htm)] [added: 6, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916149114/a16-18482_5ex4d3.htm)] |

| 4.26 | [Form of [removed: 4.450%] [added: 1.700%] Senior [removed: Notes] [added: Note] due [removed: 2046,] [added: 2021,] which is incorporated herein by reference to Exhibit 4.4 to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October [removed: 14, 2015.](http://www.sec.gov/Archives/edgar/data/77476/000110465915070645/a15-20899_1ex4d4.htm)] [added: 6, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916149114/a16-18482_5ex4d4.htm)] |

| [removed: 4.27] [added: 4.19] | [Form of [removed: Floating Rate] [added: 1.500% Senior] Note due 2019, which is incorporated herein by reference to Exhibit [removed: 4.1] [added: 4.2] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 24, [removed: 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916099579/a16-4973_1ex4d1.htm)] [added: 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916099579/a16-4973_1ex4d2.htm)] |

| 4.28 | [Form of [removed: 1.500%] [added: 3.450%] Senior [removed: Notes] [added: Note] due [removed: 2019,] [added: 2046,] which is incorporated herein by reference to Exhibit [removed: 4.2] [added: 4.6] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on [removed: February 24, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916099579/a16-4973_1ex4d2.htm)] [added: October 6, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916149114/a16-18482_5ex4d6.htm)] |

| [removed: 4.29] [added: 4.27] | [Form of [removed: 2.850%] [added: 2.375%] Senior [removed: Notes] [added: Note] due 2026, which is incorporated herein by reference to Exhibit [removed: 4.3] [added: 4.5] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on [removed: February 24, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916099579/a16-4973_1ex4d3.htm)] [added: October 6, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916149114/a16-18482_5ex4d5.htm)] |

| [removed: 4.30] [added: 4.44] | [Form of [removed: 4.450%] [added: 2.750%] Senior [removed: Notes] [added: Note] due [removed: 2046,] [added: 2023,] which is incorporated herein by reference to Exhibit [removed: 4.4] [added: 4.3] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February [removed: 24, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916099579/a16-4973_1ex4d4.htm)] [added: 28, 2013.](http://www.sec.gov/Archives/edgar/data/77476/000119312513084656/d493310dex43.htm)] |

| 4.31 | [Form of [removed: 0.875%] [added: 1.550%] Senior Note due [removed: 2028,] [added: 2019,] which is incorporated herein by reference to Exhibit [removed: 4.1] [added: 4.3] to PepsiCo, Inc.’s Current Report on Form 8-K filed with the Securities and Exchange Commission on [removed: July 18, 2016.](http://www.sec.gov/Archives/edgar/data/77476/000110465916133022/a16-11909_5ex4d1.htm)] [added: May 2, 2017.](http://www.sec.gov/Archives/edgar/data/77476/000110465917028885/a17-9812_5ex4d3.htm)] |