Comparable net interest expense was flat compared to prior year. Decreases in borrowing rates offset decreases in investment rates.
Comparable net interest expense declined 16% primarily due to higher average investment balances and lower average debt levels, partially offset by increased losses of $5 million on investments used to economically hedge a portion of our deferred compensation liability. Decreases in borrowing rates were more than offset by decreases in investment rates.
The comparable effective tax rate remained flat for the 12 and 36 weeks. The decrease in the reported effective tax rate results from the adoption of SFAS 142 in 2002 and increased tax benefit from merger-related costs.
Net Income and Net Income Per Common Share
% %
12 Weeks Change 36 Weeks Change
-------------------- -------------------
9/7/02 9/8/01 B/(W) 9/7/02 9/8/01 B/(W)
-------- -------- ------- -------- -------- -------
Net income
Reported $969 $627 54 $2,508 $1,995 26
Comparable $996 $890 12 $2,617 $2,311 13
Net income per common share
Reported $0.54 $0.34 57 $1.39 $1.10 26
Comparable $0.56 $0.49 14 $1.45 $1.28 14
- ---------------------------------------------------------------------------------------------
12 and 36 Weeks
Comparable net income increased 12% for the 12 weeks and 13% for the 36 weeks and the related net income per share increased 14% for the 12 and 36 weeks. These increases primarily reflect the solid operating profit growth and increases in bottling equity income. Net income per common share also reflects the benefit of a reduction in average shares outstanding as a result of our share buyback activity.
Analysis of Business Segments
Worldwide Snacks
Volume growth is reported on a systemwide basis, which includes joint ventures.
Frito-Lay North America
% %
12 Weeks Change 36 Weeks Change
----------------- --------------------
9/7/02 9/8/01 B/(W) 9/7/02 9/8/01 B/(W)
-------- -------- ------- -------- -------- -------
Net sales $2,077 $2,014 3 $6,016 $5,759 4
Operating profit $559 $526 6 $1,560 $1,444 8
- -------------------------------------------------------------------------------------------
12 Weeks
Pound volume increased 4% due primarily to new product introductions, single-digit growth in Doritos torilla chips, strong growth in branded snack mix, Cheetos cheese flavored snacks and Rold Gold pretzels, and single digit growth in branded dips. Go Snacks significantly contributed to the new product growth. These gains were partially offset by a double-digit decline in Ruffles potato chips.
Net sales grew 3% due to the increased volume, partially offset by lower effective net pricing driven by increased promotional spending. Almost all of the sales increase came from new products and our sensible snacks portfolio.
-21-
Operating profit increased 6% due to the volume increase, cost management and productivity. These gains were partially offset by the increased promotional spending.
36 Weeks
Pound volume increased 5% due primarily to new product introductions, single-digit growth in Cheetos cheese flavored snacks and Lay’s potato chips, strong growth in branded dips, branded snack mix, Quaker Chewy Granola Bars, Tostitos and Rold Gold pretzels, and single-digit growth in Doritos tortilla chips. Go Snacks significantly contributed to the new product growth. These gains were partially offset by a double-digit decline in Ruffles potato chips.
Net sales grew 4% due to the increased volume, partially offset by lower effective net pricing driven by increased promotional spending. New products and our sensible snacks portfolio primarily drove the sales increase.
Operating profit increased 8% due to the volume increase, cost management and productivity. These gains were partially offset by the increased promotional spending.
Frito-Lay International
% %
12 Weeks Change 36 Weeks Change
----------------- -------------------
9/7/02 9/8/01 B/(W) 9/7/02 9/8/01 B/(W)
-------- -------- ------- -------- -------- -------
Net sales
Reported $1,329 $1,120 19 $3,902 $3,276 19
Comparable $1,329 $1,290 3 $3,902 $3,781 3
Operating profit
Reported $179 $143 25 $542 $426 27
Comparable $179 $148 21 $542 $449 21
- ------------------------------------------------------------------------------------------
12 Weeks
Volume increased 5% reflecting growth in the sweet and foods categories. Sweet volume grew 10% driven by double-digit growth at Gamesa. Foods volume grew 10% driven by double-digit growth in the Brazilian foods business. Salty volume was flat primarily reflecting single-digit growth at Walkers and Sabritas offset by double-digit declines in Brazil and Turkey.
Comparable net sales increased 3% driven primarily by the volume growth at Sabritas, Walkers and Gamesa, as well as, higher net effective pricing in Brazil. These gains were partially offset by net unfavorable foreign currencies. Net unfavorable foreign currencies primarily in Mexico, Argentina and Brazil, offset by the favorable euro and British pound, reduced net sales growth by 3 percentage points. The unfavorable foreign currencies in Mexico and Brazil offset the volume gain in Mexico and more than offset the pricing in Brazil.
Comparable operating profit increased 21% resulting from solid operating results at Sabritas, Walkers and Gamesa. The unfavorable Mexican peso offset the favorable impact of the British pound and, as a result, foreign currency was not a factor in operating profit growth.
-22-
36 Weeks
Volume increased 5% reflecting growth in all categories. Salty volume grew 3% due to double-digit growth at Walkers and single-digit growth at Sabritas. Sweet volume grew 6% primarily due to single-digit growth at Gamesa. Food volume grew 8% driven by double-digit growth in the Brazilian foods business.
Comparable net sales increased 3% driven primarily by the volume growth at Sabritas, Walkers, and Gamesa, as well as, higher net pricing in Brazil and at Gamesa. These gains were partially offset by net unfavorable foreign currency and lower net effective pricing at Sabritas. Net unfavorable foreign currencies primarily in Argentina, Brazil, South Africa and Mexico, offset by favorable foreign currencies in Europe and the United Kingdom, reduced net sales growth by 3 percentage points. Unfavorable foreign currencies in Brazil and South Africa offset the favorable pricing in those countries.
Comparable operating profit increased 21% resulting from solid operating results at Sabritas and Walkers. The unfavorable impact of the Mexican peso offset the favorable impact of the British pound and, as a result, foreign currency was not a factor in operating profit growth.
Worldwide Beverages
Bottler case sales (BCS) represents PepsiCo-owned brands as well as brands that we have been granted the right to produce, distribute and market nationally and are based on sales by our bottlers, including company-owned bottlers. Third quarter BCS includes the months of June, July and August. Concentrate shipments and equivalents (CSE) for PCNA are reported on a fiscal period basis consistent with their results, and reflect shipments of concentrate and finished goods to bottlers and distributors, as well as bottler case sales of Aquafina. BCS and CSE growth may vary due to differences in the reporting calendars and short-term changes in bottler inventory.
Pepsi-Cola North America
% %
12 Weeks Change 36 Weeks Change
----------------- ------------------
9/7/02 9/8/01 B/(W) 9/7/02 9/8/01 B/(W)
-------- -------- ------- -------- -------- -------
Net sales $858 $804 7 $2,386 $2,253 6
Operating profit
Reported $254 $239 6 $710 $672 6
Comparable $254 $228 12 $710 $637 12
- ------------------------------------------------------------------------------------------
12 Weeks
CSE increased 2% driven by strong double-digit growth of Aquafina, the introduction of Lipton Brisk Lemonade and increases in trademark Pepsi, partially offset by declines in trademark Mountain Dew. Trademark Pepsi increased compared to prior year reflecting the introductions of Pepsi Blue and Pepsi Twist, partially offset by a decline in base Pepsi. Trademark Mountain Dew was down compared to prior year as gains in Code Red were more than offset by declines in base Mountain Dew. BCS increased 4% compared to prior year.
-23-
Net sales increased 7%, primarily due to new products such as Pepsi Blue, Pepsi Twist and AMP, higher concentrate pricing and an increase in Aquafina royalties and SoBe volume. These gains were offset by lower concentrate volume. Bottler funding and customer support grew at a slower rate than sales.
Comparable operating profit increased 12% primarily due to the higher concentrate pricing and the growth in Aquafina, partially offset by the lower concentrate volume. Operating profit growth benefited from manufacturing costs which grew at a slower rate than sales. In addition, advertising and marketing costs grew at a slower rate than sales.
36 Weeks
CSE increased 3% driven by strong double-digit growth in Aquafina, the introduction last quarter of Lipton Brisk Lemonade and single-digit growth in trademark Mountain Dew. For trademark Mountain Dew, increases from the second quarter 2001 introduction of Code Red were partially offset by declines in base Mountain Dew. Trademark Pepsi was even compared to prior year reflecting the introductions of Pepsi Twist and Pepsi Blue, offset by declines in base Pepsi. BCS increased 3% compared to prior year.
Net sales increased 6% primarily due to new products such as Pepsi Twist, Pepsi Blue and AMP, higher concentrate pricing, higher national fountain volume and pricing, and increased Aquafina royalties. These gains were partially offset by lower concentrate volume. In addition, bottler funding and customer support grew at a slower rate than sales.
Comparable operating profit increased 12% primarily due to the higher concentrate pricing, increase in Aquafina volume and the fourth quarter 2001 introduction of AMP. Operating profit growth benefited from manufacturing costs growing at a slower rate than sales. In addition, selling, general and administrative expenses grew at a slower rate than sales.
Gatorade/Tropicana North America
% %
12 Weeks Change 36 Weeks Change
----------------- ------------------
9/7/02 9/8/01 B/(W) 9/7/02 9/8/01 B/(W)
-------- -------- ------- -------- -------- -------
Net sales $1,156 $1,073 8 $2,851 $2,755 3
Operating profit
Reported $230 $185 24 $524 $439 19
Comparable $230 $201 14 $524 $487 7
- ------------------------------------------------------------------------------------------
12 Weeks
Overall volume grew 10% reflecting strong 16% growth from Gatorade products and flat volume from Tropicana products. The volume gain was driven by the continued success of Gatorade products introduced in the first quarter and the national launch of Propel. Volume gains in Tropicana chilled products were offset by declines in Tropicana ambient products led by Twister. Tropicana chilled volume gains were driven by Pure Premium nutritionals and Dole blends, partially offset by declines in Tropicana Season's Best. The loss of the single serve Pure Premium business from Burger King reduced Tropicana growth by nearly 2%.
-24-
Overall net sales increased 8% due to volume gains from Gatorade products, partially offset by increased promotional spending.
Comparable operating profit increased 14% reflecting the volume gains and lower costs from merger-related synergies. This growth was partially offset by the increased promotional spending and advertising and marketing costs reflecting the competitive marketplace.
36 Weeks
Overall volume grew 7% reflecting strong 15% growth from Gatorade products, offset by a 2% volume decline from Tropicana products. The volume gain was driven by new Gatorade products introduced in the first quarter and the national launch of Propel. For Tropicana, volume gains in Dole blends and Tropicana Pure Premium were offset by declines in Tropicana Season’s Best and Twister. The loss of the single serve Pure Premium business from Burger King reduced Tropicana growth by nearly 2%.
Overall net sales increased 3% reflecting the volume gains from Gatorade products, partially offset by the decline from Tropicana products. The volume gain was reduced by increased promotional spending.
Comparable operating profit increased 7% reflecting the volume gains and lower costs from merger-related synergies. This growth was reduced by the increased promotional spending and advertising and marketing costs reflecting the competitive marketplace.
PepsiCo Beverages International
% %
12 Weeks Change 36 Weeks Change
----------------- ------------------
9/7/02 9/8/01 B/(W) 9/7/02 9/8/01 B/(W)
-------- -------- ------- -------- -------- -------
Net sales $576 $574 - $1,452 $1,455 -
Operating profit
Reported $101 $97 5 $233 $228 3
Comparable $101 $91 10 $233 $213 9
- ------------------------------------------------------------------------------------------
12 Weeks
BCS increased 5%, reflecting broad-based increases led by double-digit growth in Turkey, China, India and Russia. These increases were partially offset by declines in Argentina due to poor macroeconomic conditions and declines from a boycott of American products in the Middle East. For June through August, total concentrate shipments to franchisees also grew 5% while the related BCS grew at a slightly slower rate.
Net sales were flat compared to prior year as the volume growth was offset by lower effective net pricing reflecting country mix, the impact of franchising Gatorade businesses to our bottlers in certain countries and the Middle East boycott. Foreign currency did not have an impact on sales growth as a favorable impact from the euro was offset by unfavorable impacts in Latin America and Egypt.
-25-
Comparable operating profit increased 10% primarily due to the volume growth and net favorable foreign currency, partially offset by the lower effective net pricing. The net favorable foreign currency increased operating profit growth by 2 percentage points as an increase in the euro was partially offset by declines in Latin America and Egypt.
36 Weeks
BCS increased 4.5%, reflecting broad-based increases led by double-digit growth in China, India, Turkey and Russia and mid single-digit growth in Mexico. These increases were partially offset by declines in Argentina due to poor macroeconomic conditions and declines from the boycott of American products in the Middle East. Through August, total concentrate shipments to franchisees grew 6% while the related BCS grew at a slower rate.
Net sales were flat compared to prior year. The volume growth was offset by a net unfavorable foreign currency, lower effective net pricing reflecting country mix, the impact of franchising Gatorade businesses to our bottlers in certain countries and the declines in Argentina and the Middle East. The net unfavorable foreign currency reduced the net sales growth by 2 percentage points as declines in Latin America and Egypt were partially offset by the euro.
Comparable operating profit increased 9% primarily due to the volume gain and favorable advertising and marketing cost comparisons. The increase was partially offset by lower effective net pricing, increased general and administrative expenses and a net unfavorable foreign currency. The net unfavorable foreign currency reduced the operating profit growth by 6 percentage points as declines in Latin American and Egypt were partially offset by the euro.
Quaker Foods North America
Quaker Foods North America (QFNA) reports results on a monthly basis, except for its Canada Foods operations. As a result of converting to period reporting in 2002 without restating its prior period results, Canada Foods is reporting three additional weeks of results in the first quarter of 2002 and one less week of results in the second, third and fourth quarters of 2002 as compared to 2001.
% %
12 Weeks Change 36 Weeks Change
----------------- ------------------
9/7/02 9/8/01 B/(W) 9/7/02 9/8/01 B/(W)
-------- -------- ------- -------- -------- -------
Net sales $380 $396 (4) $1,048 $1,048 -
Operating profit
Reported $128 $110 16 $342 $275 24
Comparable $128 $112 14 $342 $280 22
- ------------------------------------------------------------------------------------------
12 Weeks
Volume decreased 6% primarily due to softness in ready-to-eat and hot cereals. The impact of the shorter 2002 reporting period for Canada Foods reduced volume growth by 1 percentage point.
-26-
Net sales decreased 4% primarily due to decreased volume partially offset by lower promotional spending on hot cereals.
Comparable operating profit increased 14% primarily reflecting the benefit of productivity and merger-related synergies and lower advertising and marketing expenses.
36 Weeks
Volume decreased 1% due to softness in ready-to-eat cereals. The Canada Foods 2002 reporting period change did not impact results.
Net sales were flat due to overall decreased cereal volume offset by new product volume for hot cereals.
Comparable operating profit increased 22% primarily reflecting the benefit of productivity, merger-related synergies and lower advertising and marketing expenses.
CONSOLIDATED CASH FLOWS
Our strong cash generating capability provides us with substantial financial flexibility in meeting operating and investing needs. We focus on operating cash flow efficiencies as a key element of achieving shareholder value.
The table below reconciles net cash provided by operating activities as reflected in our consolidated statement of cash flows to our operating cash flow.
36 Weeks
-------------------
9/7/02 9/8/01
-------- --------
Net cash provided by operating activities....................... $3,443 $2,484
Capital spending............................................. (807) (756)
Cash payments for merger-related and restructuring charges... 81 159
Sales of property, plant and equipment....................... 76 27
Other net investing activities............................... (33) 111
After-tax interest and forex................................. 22 75
-------- --------
Operating cash flow............................................. $2,782 $2,100
======== ========
Operating cash flow for the 36 weeks ended September 7, 2002 was $2,782 million compared with $2,100 million for the same period in 2001. This comparative increase primarily reflects our solid operating results and continued focus on working capital efficiencies.
As shown in our Condensed Consolidated Statement of Cash Flows, our cash and cash equivalents for the 36 weeks ended September 7, 2002 increased $1.1 billion to $1.8 billion reflecting lower investing activities and cash provided by operating activities, partially offset by cash used in financing activities. The cash used in investing activities in 2002 reflects capital spending and our acquisition of the Wotsits brand in the United Kingdom, partially offset by a shift from short-term investments to cash and cash equivalents in anticipation of the fourth quarter pension contribution. The cash used in financing activities in 2002 primarily reflects our share buyback activity and dividend payments, partially offset by proceeds from the exercise of stock options.
-27-
LIQUIDITY AND CAPITAL RESOURCES
Our strong cash-generating capability and financial condition give us ready access to capital markets throughout the world. Our principle source of liquidity is operating cash flows, which are derived from net sales. Macroeconomic conditions may impact the demand for and pricing of our products. Our debt rating of A1 from Moody’s and A from Standard & Poor’s contributes to our accessibility to global capital markets. These ratings reflect our strong operating cash flows and include the impact of the cash flows and debt of our anchor bottlers. We have maintained these ratings since 1989 demonstrating the stability of our operating cash flows.
On July 19, 2002, our Board of Directors authorized a share repurchase program for up to $5 billion over a three year period. During the third quarter, we repurchased 30.3 million shares at a cost of $1.3 billion. Through October 4th, we repurchased 46.6 million shares at a cost of $1.9 billion.
Subsequent to the quarter, we have contributed approximately $750 million to our pension plans. These contributions are consistent with our strategy of ensuring that our qualified plans are fully funded, effectively utilizing excess cash and maximizing our taxable deductions. In addition, in the fourth quarter, we anticipate a net cash recovery of approximately $200 million from the final settlement with the IRS of audits for years prior to 1990, and we expect to receive the net proceeds from the Gemex transaction described in Note 10.
-28-
Independent Accountants' Review Report
The Board of Directors
PepsiCo, Inc.
We have reviewed the accompanying Condensed Consolidated Balance Sheet of PepsiCo, Inc. and Subsidiaries as of September 7, 2002 and the related Condensed Consolidated Statements of Income and Comprehensive Income for the twelve and thirty-six weeks ended September 7, 2002 and September 8, 2001 and the Condensed Consolidated Statement of Cash Flows for the thirty-six weeks ended September 7, 2002 and September 8, 2001. These condensed consolidated financial statements are the responsibility of PepsiCo, Inc.‘s management.
We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical review procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.
We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the Consolidated Balance Sheet of PepsiCo, Inc. and Subsidiaries as of December 29, 2001, and the related Consolidated Statements of Income, Common Shareholders’ Equity and Cash Flows for the year then ended not presented herein; and in our report dated February 6, 2002, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying Condensed Consolidated Balance Sheet as of December 29, 2001, is fairly presented, in all material respects, in relation to the Consolidated Balance Sheet from which it has been derived.
KPMG LLP
New York, New York
October 8, 2002
-29-
PART II - OTHER INFORMATION AND SIGNATURES
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
See Index to Exhibits on page 34.
(b) Reports on Form 8-K
-------------------
1. On July 19, 2002, we filed a Current Report on Form 8-K attaching
a press release dated July 19, 2002 announcing Board approval of a
share repurchase program.
2. On July 19, 2002, we filed a Current Report on Form 8-K attaching
a press release dated July 19, 2002 announcing our earnings for
the 12 and 24 weeks ended June 15, 2002.
3. On July 31, 2002, we filed a Current Report on Form 8-K attaching
and announcing our submission, on July 24, 2002, of the Oath of
the Principal Executive Officer and the Principal Financial Officer
in accordance with the Securities and Exchange Commission's
June 27, 2002 order requiring the filing of sworn statements
pursuant to Section 21(a)(1) of the Securities Exchange Act of 1934.
4. On September 4, 2002, we filed a Current Report on Form 8-K
attaching a press release dated September 4, 2002 announcing
that third quarter volume for our total North American Beverage
business is expected to increase four to five percent,
in line with expectations.
-30-
Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned.
PepsiCo, Inc.
------------------
(Registrant)
Date: October 15, 2002 /S/ PETER A. BRIDGMAN
- ------------------------ ---------------------------
Peter A. Bridgman
Senior Vice President and
Controller
Date: October 15, 2002 /S/ ROBERT E. COX
- ------------------------ --------------------------
Robert E. Cox
Vice President, Associate General
Counsel and Assistant Secretary
-31-
CERTIFICATION
I, Steven S Reinemund certify that;
| 1. | I have reviewed this quarterly report on Form 10-Q of PepsiCo, Inc. (PepsiCo),
|
| 2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of PepsiCo as of, and for, the periods presented in this quarterly report; |
| 4. | PepsiCo's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for PepsiCo and we have: |
| | a) | designed such disclosure controls and procedures to ensure that material information relating to PepsiCo, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; |
| | b) | evaluated the effectiveness of PepsiCo's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and |
| | c) | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; |
| 5. | PepsiCo's other certifying officer and I have disclosed, based on our most recent evaluation, to PepsiCo's auditors and audit committee of PepsiCo's Board of Directors: |
| | a) | all significant deficiencies in the design or operation of internal controls which could adversely affect PepsiCo's ability to record, process, summarize and report financial data and have identified for PepsiCo's auditors any material weaknesses in internal controls; and |
| | b) | any fraud, whether or not material, that involves management or other employees who have a significant role in PepsiCo's internal controls; and |
| 6. | PepsiCo's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
| Dated: October 15, 2002 | /S/ STEVEN S REINEMUND
Steven S Reinemund
Chairman and Chief
Executive Officer |
-32-
CERTIFICATION
I, Indra K. Nooyi certify that;
| 1. | I have reviewed this quarterly report on Form 10-Q of PepsiCo, Inc. (PepsiCo),
|
| 2. | Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of PepsiCo as of, and for, the periods presented in this quarterly report; |
| 4. | PepsiCo's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for PepsiCo and we have: |
| | a) | designed such disclosure controls and procedures to ensure that material information relating to PepsiCo, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; |
| | b) | evaluated the effectiveness of PepsiCo's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and |
| | c) | presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; |
| 5. | PepsiCo's other certifying officer and I have disclosed, based on our most recent evaluation, to PepsiCo's auditors and audit committee of PepsiCo's Board of Directors: |
| | a) | all significant deficiencies in the design or operation of internal controls which could adversely affect PepsiCo's ability to record, process, summarize and report financial data and have identified for PepsiCo's auditors any material weaknesses in internal controls; and |
| | b) | any fraud, whether or not material, that involves management or other employees who have a significant role in PepsiCo's internal controls; and |
| 6. | PepsiCo's other certifying officer and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. |
| Dated: October 15, 2002 | /S/ INDRA K. NOOYI
Indra K. Nooyi
President and
Chief Financial Officer |
-33-
INDEX TO EXHIBITS
ITEM 6 (a)
EXHIBITS
Exhibit 12 Computation of Ratio of Earnings to Fixed Charges
Exhibit 15 Accountant's Acknowledgement
-34-
