PEPSI BOTTLING GROUP INC 10-K (Annual Reports) 2009-02-20

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
FORM 10-K
˛ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 27, 2008
or
o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No Fee Required)
For the transition period from to
Commission file number 1-14893
The Pepsi Bottling Group, Inc.

(Exact name of Registrant as Specified in its Charter)
Incorporate d in Delaware 13-4038356
(State or other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
One Pepsi Way, Some rs, Ne w York 10589
(Address of Principal Executive Offices) (Zip code)
Registrant’s telephone number, including area code: (914) 767-6000
Se curities registered pursuant to Se ction 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Re gistered

Common Stock, par value $.01 per share New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes ˛ No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o No ˛
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports)
and (2) has been subject to such filing requirements for the past 90 days. Yes ˛ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. ˛
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of
the Exchange Act. (Check one):
Large accelerated filer ˛ Accelerated filer o Non-accelerated filer o Smaller reporting company o
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ˛
The number of shares of Common Stock and Class B Common Stock of The Pepsi Bottling Group, Inc. outstanding as of
February 6, 2009 was 211,583,553 and 100,000, respectively. The aggregate market value of The Pepsi Bottling Group, Inc. Capital
Stock held by non-affiliates of The Pepsi Bottling Group, Inc. (assuming for the sole purpose of this calculation, that all executive
officers and directors of The Pepsi Bottling Group, Inc. are affiliates of The Pepsi Bottling Group, Inc.) as of June 13, 2008 was
$4,301,872,063 (based on the closing sale price of The Pepsi Bottling Group, Inc.’s Capital Stock on that date as reported on the New
York Stock Exchange).
Documents of Which P ortions Are Incorporated by Reference P arts of Form 10-K into Which P ortion of Documents Are Incorporated
P roxy Statement for T he P epsi Bottling Group, Inc. III
May 27, 2009 Annual Meeting of Shareholders
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Table of Contents
PART I
Item 1. Business 3
Item 1A. Risk Factors 8
Item 1B. Unresolved Staff Comments 11
Item 2. Properties 11
Item 3. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 11
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities 12
Item 6. Selected Financial Data 14
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations 15
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 56
Item 8. Financial Statements and Supplementary Data 56
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure 56
Item 9A. Controls and Procedures 56
Item 9B. Other Information 57
PART III
Item 10. Directors, Executive Officers and Corporate Governance 58
Item 11. Executive Compensation 59
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters 59
Item 13. Certain Relationships and Related Transactions, and Director Independence 59
Item 14. Principal Accountant Fees and Services 59
PART IV
Item 15. Exhibits and Financial Statement Schedules 60
SIGNATURES 61
INDEX TO FINANCIAL STATEMENT SCHEDULES 62
INDEX TO EXHIBITS 64
EX-10.29: AMENDED AND RESTATED PBG DIRECTORS' STOCK PLAN
EX-10.30: AMENDED AND RESTATED PBG 2004 LONG-TERM INCENTIVE PLAN
EX-10.31: PBG DIRECTOR DEFERRAL PROGRAM
EX-10.32: AMENDED AND RESTATED PBG PENSION EQUALIZATION PLAN
EX-10.33: PBG 409A EXECUTIVE INCOME DEFERRAL PROGRAM
EX-10.34: AMENDED AND RESTATED PBG SUPPLEMENTAL SAVINGS PROGRAM
EX-10.35: DISTRIBUTION AGREEMENT
EX-12: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
EX-21: SUBSIDIARIES
EX-23.1: CONSENT OF DELOITTE & TOUCHE LLP
EX-23.2: CONSENT OF DELOITTE & TOUCHE LLP
EX-24: POWER OF ATTORNEY
EX-31.1: CERTIFICATION
EX-99.1: BOTTLING GROUP, LLC'S 2008 ANNUAL REPORT
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PART I
ITEM 1. BUSINESS
Introduction
The Pepsi Bottling Group, Inc. (“PBG”) was incorporated in Delaware in January, 1999, as a wholly owned subsidiary of PepsiCo,
Inc. (“PepsiCo”) to effect the separation of most of PepsiCo’s company-owned bottling businesses. PBG became a publicly traded
company on March 31, 1999. As of January 23, 2009, PepsiCo’s ownership represented 33.1% of the outstanding common stock and
100% of the outstanding Class B common stock, together representing 40.2% of the voting power of all classes of PBG’s voting
stock. PepsiCo also owned approximately 6.6% of the equity interest of Bottling Group, LLC, PBG’s principal operating subsidiary,
as of January 23, 2009. When used in this Report, “PBG,” “we,” “us,” “our” and the “Company” each refers to The Pepsi Bottling
Group, Inc. and, where appropriate, to Bottling Group, LLC, which we also refer to as “Bottling LLC.”
PBG operates in one industry, carbonated soft drinks and other ready-to-drink beverages, and all of our segments derive revenue
from these products. We conduct business in all or a portion of the United States, Mexico, Canada, Spain, Russia, Greece and
Turkey. PBG manages and reports operating results through three reportable segments: U.S. & Canada, Europe (which includes
Spain, Russia, Greece and Turkey) and Mexico. Operationally, the Company is organized along geographic lines with specific
regional management teams having responsibility for the financial results in each reportable segment.
In 2008, approximately 75% of our net revenues were generated in the U.S. & Canada, 15% of our net revenues were generated in
Europe, and the remaining 10% of our net revenues were generated in Mexico. See “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and Note 14 in the Notes to Consolidated Financial Statements for additional
information regarding the business and operating results of our reportable segments.
Principal Products
PBG is the world’s largest manufacturer, seller and distributor of Pepsi-Cola beverages. In addition, in some of our territories we have
the right to manufacture, sell and distribute soft drink products of companies other than PepsiCo, including Dr Pepper, Crush and
Squirt. We also have the right in some of our territories to manufacture, sell and distribute beverages under trademarks that we own,
including Electropura, e-pura and Garci Crespo. The majority of our volume is derived from brands licensed from PepsiCo or PepsiCo
joint ventures.
We have the exclusive right to manufacture, sell and distribute Pepsi-Cola beverages in all or a portion of 42 states and the District
of Columbia in the United States, nine Canadian provinces, Spain, Greece, Russia, Turkey and 23 states in Mexico.
In 2008, approximately 74% of our sales volume in the U.S. & Canada was derived from carbonated soft drinks and the remaining
26% was derived from non-carbonated beverages, 69% of our sales volume in Europe was derived from carbonated soft drinks and
the remaining 31% was derived from non-carbonated beverages, and 52% of our Mexico sales volume was derived from carbonated
soft drinks and the remaining 48% was derived from non-carbonated beverages. Our principal beverage brands include the
following:
U.S. & Canada

Pepsi Sierra Mist Lipton
Diet Pepsi Sierra Mist Free SoBe
Diet Pepsi Max Aquafina SoBe No Fear
Wild Cherry Pepsi Aquafina FlavorSplash SoBe Life Water
Pepsi Lime G2 from Gatorade Starbucks Frappuccino®
Pepsi ONE Propel Dole
Mountain Dew Crush Muscle Milk
Diet Mountain Dew Tropicana juice drinks
AMP Mug Root Beer
Mountain Dew Code Red Trademark Dr Pepper
Europe
Pepsi Tropicana Fruko
Pepsi Light Aqua Minerale Yedigun
Pepsi Max Mirinda Tamek
7UP IVI Lipton
KAS Fiesta
Mexico
Pepsi Mirinda Electropura
Pepsi Light Manzanita Sol e-pura
7UP Squirt Jarritos
KAS Garci Crespo
Belight Aguas Frescas
No individual customer accounted for 10% or more of our total revenues in 2008, although sales to Wal-Mart Stores, Inc. and its
affiliated companies were 9.9% of our revenues in 2008, primarily as a result of transactions in the U.S. & Canada segment. We have
an extensive direct store distribution system in the United States, Canada and Mexico. In Europe, we use a combination of direct
store distribution and distribution through wholesalers, depending on local marketplace considerations.
Raw Materials and Other Supplies

We purchase the concentrates to manufacture Pepsi-Cola beverages and other beverage products from PepsiCo and other beverage
companies.
In addition to concentrates, we purchase various ingredients, packaging materials and energy such as sweeteners, glass and plastic
bottles, cans, closures, syrup containers, other packaging materials, carbon dioxide, some finished goods, electricity, natural gas and
motor fuel. We generally purchase our raw materials, other than concentrates, from multiple suppliers. PepsiCo acts as our agent for
the purchase of such raw materials in the United States and Canada and, with respect to some of our raw materials, in certain of our
international markets. The Pepsi beverage agreements, as described below, provide that, with respect to the beverage products of
PepsiCo, all authorized containers, closures, cases, cartons and other packages and labels may be purchased only from
manufacturers approved by PepsiCo. There are no materials or supplies used by PBG that are currently in short supply. The supply
or cost of specific materials could
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PART I (continued)
be adversely affected by various factors, including price changes, economic conditions, strikes, weather conditions and
governmental controls.
Franchise and Venture Agreements

We conduct our business primarily under agreements with PepsiCo. These agreements give us the exclusive right to market,
distribute, and produce beverage products of PepsiCo in authorized containers and to use the related trade names and trademarks in
specified territories.
Set forth below is a description of the Pepsi beverage agreements and other bottling agreements to which we are a party.
Terms of the Master Bottling Agreement. The Master Bottling Agreement under which we manufacture, package, sell and distribute
the cola beverages bearing the Pepsi-Cola and Pepsi trademarks in the United States was entered into in March of 1999. The Master
Bottling Agreement gives us the exclusive and perpetual right to distribute cola beverages for sale in specified territories in
authorized containers of the nature currently used by us. The Master Bottling Agreement provides that we will purchase our entire
requirements of concentrates for the cola beverages from PepsiCo at prices, and on terms and conditions, determined from time to
time by PepsiCo. PepsiCo may determine from time to time what types of containers to authorize for use by us. PepsiCo has no rights
under the Master Bottling Agreement with respect to the prices at which we sell our products.
Under the Master Bottling Agreement we are obligated to:
(1) maintain such plant and equipment, staff, distribution facilities and vending equipment that are capable of manufacturing,
packaging, and distributing the cola beverages in sufficient quantities to fully meet the demand for these beverages in our
territories;
(2) undertake adequate quality control measures prescribed by PepsiCo;
(3) push vigorously the sale of the cola beverages in our territories;
(4) increase and fully meet the demand for the cola beverages in our territories;
(5) use all approved means and spend such funds on advertising and other forms of marketing beverages as may be reasonably
required to push vigorously the sale of cola beverages in our territories; and
(6) maintain such financial capacity as may be reasonably necessary to assure performance under the Master Bottling Agreement
by us.
The Master Bottling Agreement requires us to meet annually with PepsiCo to discuss plans for the ensuing year and the following
two years. At such meetings, we are obligated to present plans that set out in reasonable detail our marketing plan, our management
plan and advertising plan with respect to the cola beverages for the year. We must also present a financial plan showing that we
have the financial capacity to perform our duties and obligations under the Master Bottling Agreement for that year, as well as sales,
marketing, advertising and capital expenditure plans for the two years following such year. PepsiCo has the right to approve such
plans, which approval shall not be unreasonably withheld. In 2008, PepsiCo approved our plans.
If we carry out our annual plan in all material respects, we will be deemed to have satisfied our obligations to push vigorously the
sale of the cola beverages, increase and fully meet the demand for the cola beverages in our territories and maintain the financial
capacity required under the Master Bottling Agreement. Failure to present a plan or carry out approved plans in all material respects
would constitute an event of default that, if not cured within 120 days of notice of the failure, would give PepsiCo the right to
terminate the Master Bottling Agreement.
If we present a plan that PepsiCo does not approve, such failure shall constitute a primary consideration for determining whether we
have satisfied our obligations to maintain our financial capacity, push vigorously the sale of the cola beverages and increase and
fully meet the demand for the cola beverages in our territories.
If we fail to carry out our annual plan in all material respects in any segment of our territory, whether defined geographically or by
type of market or outlet, and if such failure is not cured within six months of notice of the failure, PepsiCo may reduce the territory
covered by the Master Bottling Agreement by eliminating the territory, market or outlet with respect to which such failure has
occurred.
PepsiCo has no obligation to participate with us in advertising and marketing spending, but it may contribute to such expenditures
and undertake independent advertising and marketing activities, as well as cooperative advertising and sales promotion programs
that would require our cooperation and support. Although PepsiCo has advised us that it intends to continue to provide
cooperative advertising funds, it is not obligated to do so under the Master Bottling Agreement.
The Master Bottling Agreement provides that PepsiCo may in its sole discretion reformulate any of the cola beverages or
discontinue them, with some limitations, so long as all cola beverages are not discontinued. PepsiCo may also introduce new
beverages under the Pepsi-Cola trademarks or any modification thereof. When that occurs, we are obligated to manufacture,
package, distribute and sell such new beverages with the same obligations as then exist with respect to other cola beverages. We are
prohibited from producing or handling cola products, other than those of PepsiCo, or products or packages that imitate, infringe or
cause confusion with the products, containers or trademarks of PepsiCo. The Master Bottling Agreement also imposes requirements
with respect to the use of PepsiCo’s trademarks, authorized containers, packaging and labeling.
If we acquire control, directly or indirectly, of any bottler of cola beverages, we must cause the acquired bottler to amend its bottling
appointments for the cola beverages to conform to the terms of the Master Bottling Agreement. Under the Master Bottling
Agreement, PepsiCo has agreed not to withhold approval for any acquisition of rights to manufacture and sell Pepsi trademarked
cola beverages within a specific area – currently representing approximately 10.63% of PepsiCo’s U.S. bottling system in terms of
volume – if we have successfully negotiated the acquisition and, in PepsiCo’s reasonable judgment, satisfactorily performed our
obligations under the Master Bottling Agreement. We have agreed not to acquire or attempt to acquire any rights to manufacture
and sell Pepsi trademarked cola beverages outside of that specific area without PepsiCo’s prior written approval.
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The Master Bottling Agreement is perpetual, but may be terminated by PepsiCo in the event of our default. Events of default
include:
(1) our insolvency, bankruptcy, dissolution, receivership or the like;
(2) any disposition of any voting securities of one of our bottling subsidiaries or substantially all of our bottling assets without the
consent of PepsiCo;
(3) our entry into any business other than the business of manufacturing, selling or distributing non-alcoholic beverages or any
business which is directly related and incidental to such beverage business; and
(4) any material breach under the contract that remains uncured for 120 days after notice by PepsiCo.
An event of default will also occur if any person or affiliated group acquires any contract, option, conversion privilege, or other right
to acquire, directly or indirectly, beneficial ownership of more than 15% of any class or series of our voting securities without the
consent of PepsiCo. As of February 13, 2009, to our knowledge, no shareholder of PBG, other than PepsiCo, held more than 5% of
our common stock.
We are prohibited from assigning, transferring or pledging the Master Bottling Agreement, or any interest therein, whether
voluntarily, or by operation of law, including by merger or liquidation, without the prior consent of PepsiCo.
The Master Bottling Agreement was entered into by us in the context of our separation from PepsiCo and, therefore, its provisions
were not the result of arm’s-length negotiations. Consequently, the agreement contains provisions that are less favorable to us than
the exclusive bottling appointments for cola beverages currently in effect for independent bottlers in the United States.
Terms of the Non-Cola Bottling Agreements. The beverage products covered by the non-cola bottling agreements are beverages
licensed to us by PepsiCo, including Mountain Dew, Aquafina, Sierra Mist, Diet Mountain Dew, Mug Root Beer and Mountain Dew
Code Red. The non-cola bottling agreements contain provisions that are similar to those contained in the Master Bottling
Agreement with respect to pricing, territorial restrictions, authorized containers, planning, quality control, transfer restrictions, term
and related matters. Our non-cola bottling agreements will terminate if PepsiCo terminates our Master Bottling Agreement. The
exclusivity provisions contained in the non-cola bottling agreements would prevent us from manufacturing, selling or distributing
beverage products that imitate, infringe upon, or cause confusion with, the beverage products covered by the non-cola bottling
agreements. PepsiCo may also elect to discontinue the manufacture, sale or distribution of a non-cola beverage and terminate the
applicable non-cola bottling agreement upon six months notice to us.
Terms of Certain Distribution Agreements. We also have agreements with PepsiCo granting us exclusive rights to distribute AMP
and Dole in all of our territories, SoBe in certain specified territories and Gatorade and G2 in certain specified channels. The
distribution agreements contain provisions generally similar to those in the Master Bottling Agreement as to use of trademarks,
trade names, approved containers and labels and causes for termination. We also have the right to sell Tropicana juice drinks in the
United States and Canada, Tropicana juices in Russia and Spain, and Gatorade in Spain, Greece and Russia and in certain limited
channels of distribution in the United States and Canada. Some of these beverage agreements have limited terms and, in most
instances, prohibit us from dealing in similar beverage products.
Terms of the Master Syrup Agreement. The Master Syrup Agreement grants us the exclusive right to manufacture, sell and distribute
fountain syrup to local customers in our territories. We have agreed to act as a manufacturing and delivery agent for national
accounts within our territories that specifically request direct delivery without using a middleman. In addition, PepsiCo may appoint
us to manufacture and deliver fountain syrup to national accounts that elect delivery through independent distributors. Under the
Master Syrup Agreement, we have the exclusive right to service fountain equipment for all of the national account customers within
our territories. The Master Syrup Agreement provides that the determination of whether an account is local or national is at the sole
discretion of PepsiCo.
The Master Syrup Agreement contains provisions that are similar to those contained in the Master Bottling Agreement with respect
to concentrate pricing, territorial restrictions with respect to local customers and national customers electing direct-to-store delivery
only, planning, quality control, transfer restrictions and related matters. The Master Syrup Agreement had an initial term of five
years which expired in 2004 and was renewed for an additional five-year period. The Master Syrup Agreement will automatically
renew for additional five-year periods, unless PepsiCo terminates it for cause. PepsiCo has the right to terminate the Master Syrup
Agreement without cause at any time upon twenty-four months notice. In the event PepsiCo terminates the Master Syrup
Agreement without cause, PepsiCo is required to pay us the fair market value of our rights thereunder.
Our Master Syrup Agreement will terminate if PepsiCo terminates our Master Bottling Agreement.
Terms of Other U.S. Bottling Agreements. The bottling agreements between us and other licensors of beverage products, including
Dr Pepper Snapple Group for Dr Pepper, Crush, Schweppes, Canada Dry, Hawaiian Punch and Squirt, the Pepsi/Lipton Tea
Partnership for Lipton Brisk and Lipton Iced Tea, and the North American Coffee Partnership for Starbucks Frappuccino®, contain
provisions generally similar to those in the Master Bottling Agreement as to use of trademarks, trade names, approved containers
and labels, sales of imitations and causes for termination. Some of these beverage agreements have limited terms and, in most
instances, prohibit us from dealing in similar beverage products.
Terms of the Country-Specific Bottling Agreements. The country-specific bottling agreements contain provisions generally similar
to those contained in the Master Bottling Agreement and the non-cola bottling agreements and, in Canada, the Master Syrup
Agreement with respect to authorized containers, planning, quality control, transfer restrictions, term, causes for termination and
related matters. These bottling agreements differ from the Master Bottling Agreement because, except for Canada, they include both
fountain syrup and non-fountain beverages. Certain of these bottling agreements contain provisions that have been modified to
reflect the laws and regulations of the applicable country. For example, the bottling agreements in Spain do not contain a restriction
on the sale and
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PART I (continued)
shipment of Pepsi-Cola beverages into our territory by others in response to unsolicited orders. In addition, in Mexico and Turkey
we are restricted in our ability to manufacture, sell and distribute beverages sold under non-PepsiCo trademarks.
Terms of the Russia Venture Agreement. In 2007, PBG together with PepsiCo formed PR Beverages Limited (“PR Beverages”), a
venture that enables us to strategically invest in Russia to accelerate our growth. We contributed our business in Russia to PR
Beverages, and PepsiCo entered into bottling agreements with PR Beverages for PepsiCo beverage products sold in Russia on the
same terms as in effect for us immediately prior to the venture. PepsiCo also granted PR Beverages an exclusive license to
manufacture and sell the concentrate for such products.
Terms of Russia Snack Food Distribution Agreement. Effective January 2009, PR Beverages entered into an agreement with Frito-
Lay Manufacturing, LLC (“FLM”), a wholly owned subsidiary of PepsiCo, pursuant to which PR Beverages purchases Frito-Lay
snack products from FLM for sale and distribution in the Russian Federation. This agreement provides FLM access to the
infrastructure of our distribution network in Russia and allows us to more effectively utilize some of our distribution network assets.
This agreement replaced a similar agreement, which expired on December 31, 2008.
Seasonality
Sales of our products are seasonal, particularly in our Europe segment, where sales volumes tend to be more sensitive to weather
conditions. Our peak season across all of our segments is the warm summer months beginning in May and ending in September. In
2008, approximately 50% of our volume was generated during the second and third quarters and approximately 90% of cash flow
from operations was generated in the third and fourth quarters.
Competition
The carbonated soft drink market and the non-carbonated beverage market are highly competitive. Our competitors in these markets
include bottlers and distributors of nationally advertised and marketed products, bottlers and distributors of regionally advertised
and marketed products, as well as bottlers of private label soft drinks sold in chain stores. Among our major competitors are bottlers
that distribute products from The Coca-Cola Company including Coca-Cola Enterprises Inc., Coca-Cola Hellenic Bottling Company
S.A., Coca-Cola FEMSA S.A. de C.V. and Coca-Cola Bottling Co. Consolidated. Our market share for carbonated soft drinks sold
under trademarks owned by PepsiCo in our U.S. territories ranges from approximately 21% to approximately 41%. Our market share
for carbonated soft drinks sold under trademarks owned by PepsiCo for each country outside the United States in which we do
business is as follows: Canada 44%; Russia 21%; Turkey 17%; Spain 10% and Greece 10% (including market share for our IVI
brand). In addition, market share for our territories and the territories of other Pepsi bottlers in Mexico is 18% for carbonated soft
drinks sold under trademarks owned by PepsiCo. All market share figures are based on generally available data published by third
parties. Actions by our major competitors and others in the beverage industry, as well as the general economic environment, could
have an impact on our future market share.
We compete primarily on the basis of advertising and marketing programs to create brand awareness, price and promotions, retail
space management, customer service, consumer points of access, new products, packaging innovations and distribution methods.
We believe that brand recognition, market place pricing, consumer value, customer service, availability and consumer and customer
goodwill are primary factors affecting our competitive position.
Governmental Regulation Applicable to PBG

Our operations and properties are subject to regulation by various federal, state and local governmental entities and agencies in the
United States as well as foreign governmental entities and agencies in Canada, Spain, Greece, Russia, Turkey and Mexico. As a
producer of food products, we are subject to production, packaging, quality, labeling and distribution standards in each of the
countries where we have operations, including, in the United States, those of the Federal Food, Drug and Cosmetic Act and the
Public Health Security and Bioterrorism Preparedness and Response Act. The operations of our production and distribution facilities
are subject to laws and regulations relating to the protection of our employees’ health and safety and the environment in the
countries in which we do business. In the United States, we are subject to the laws and regulations of various governmental entities,
including the Department of Labor, the Environmental Protection Agency and the Department of Transportation, and various
federal, state and local occupational, labor and employment and environmental laws. These laws and regulations include the
Occupational Safety and Health Act, the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the Superfund Amendments and Reauthorization Act,
the Federal Motor Carrier Safety Act and the Fair Labor Standards Act.
We believe that our current legal, operational and environmental compliance programs are adequate and that we are in substantial
compliance with applicable laws and regulations of the countries in which we do business. We do not anticipate making any material
expenditures in connection with environmental remediation and compliance. However, compliance with, or any violation of, future
laws or regulations could require material expenditures by us or otherwise have a material adverse effect on our business, financial
condition or results of operations.
Bottle and Can Legislation. Legislation has been enacted in certain U.S. states and Canadian provinces where we operate that
generally prohibits the sale of certain beverages in non-refillable containers unless a deposit or levy is charged for the container.
These include California, Connecticut, Delaware, Hawaii, Iowa, Maine, Massachusetts, Michigan, New York,
Oregon, West Virginia, British Columbia, Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia and Quebec. Legislation
prohibited the sale of carbonated beverages in non-refillable containers in Prince Edwards Islands in 2007, but this law was repealed
in May 2008.
Massachusetts and Michigan have statutes that require us to pay all or a portion of unclaimed container deposits to the state and
Connecticut has
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enacted a similar statute effective in 2009. Hawaii and California impose a levy on beverage containers to fund a waste recovery
system.
In addition to the Canadian deposit legislation described above, Ontario, Canada currently has a regulation requiring that at least
30% of all soft drinks sold in Ontario be bottled in refillable containers.
The European Commission issued a packaging and packing waste directive that was incorporated into the national legislation of
most member states. This has resulted in targets being set for the recovery and recycling of household, commercial and industrial
packaging waste and imposes substantial responsibilities upon bottlers and retailers for implementation. Similar legislation has been
enacted in Turkey.
Mexico adopted legislation regulating the disposal of solid waste products. In response to this legislation, PBG Mexico maintains
agreements with local and federal Mexican governmental authorities as well as with civil associations, which require PBG Mexico,
and other participating bottlers, to provide for collection and recycling of certain minimum amounts of plastic bottles.
We are not aware of similar material legislation being enacted in any other areas served by us. The recent economic downturn has
resulted in reduced tax revenue for many states and has increased the need for some states to identify new revenue sources. Some
states may pursue additional revenue through new or amended bottle and can legislation. We are unable to predict, however,
whether such legislation will be enacted or what impact its enactment would have on our business, financial condition or results of
operations.
Soft Drink Excise Tax Legislation. Specific soft drink excise taxes have been in place in certain states for several years. The states in
which we operate that currently impose such a tax are West Virginia and Arkansas and, with respect to fountain syrup only,
Washington.
Value-added taxes on soft drinks vary in our territories located in Canada, Spain, Greece, Russia, Turkey and Mexico, but are
consistent with the value-added tax rate for other consumer products. In addition, there is a special consumption tax applicable to
cola products in Turkey. In Mexico, bottled water in containers over 10.1 liters are exempt from value-added tax, and we obtained a
tax exemption for containers holding less than 10.1 liters of water. The tax exemption currently also applies to non-carbonated soft
drinks.
We are not aware of any material soft drink taxes that have been enacted in any other market served by us. The recent economic
downturn has resulted in reduced tax revenue for many states and has increased the need for some states to identify new revenue
sources. Some states may pursue additional revenue through new or amended soft drink or similar excise tax legislation. We are
unable to predict, however, whether such legislation will be enacted or what impact its enactment would have on our business,
financial condition or results of operations.
Trade Regulation. As a manufacturer, seller and distributor of bottled and canned soft drink products of PepsiCo and other soft
drink manufacturers in exclusive territories in the United States and internationally, we are subject to antitrust and competition laws.
Under the Soft Drink Interbrand Competition Act, soft drink bottlers operating in the United States, such as us, may have an
exclusive right to manufacture, distribute and sell a soft drink product in a geographic territory if the soft drink product is in
substantial and effective competition with other products of the same class in the same market or markets. We believe that there is
such substantial and effective competition in each of the exclusive geographic territories in which we operate.
School Sales Legislation; Industry Guidelines. In 2004, the U.S. Congress passed the Child Nutrition Act, which required school
districts to implement a school wellness policy by July 2006. In May 2006, members of the American Beverage Association, the
Alliance for a Healthier Generation, the American Heart Association and The William J. Clinton Foundation entered into a
memorandum of understanding that sets forth standards for what beverages can be sold in elementary, middle and high schools in
the United States (the “ABA Policy”). Also, the beverage associations in the European Union and Canada have recently issued
guidelines relating to the sale of beverages in schools. We intend to comply fully with the ABA Policy and these guidelines. In
addition, legislation has been proposed in Mexico that would restrict the sale of certain high-calorie products, including soft drinks,
in schools and that would require these products to include a label that warns consumers that consumption abuse may lead to
obesity.
California Carcinogen and Reproductive Toxin Legislation. A California law requires that any person who exposes another to a
carcinogen or a reproductive toxin must provide a warning to that effect. Because the law does not define quantitative thresholds
below which a warning is not required, virtually all manufacturers of food products are confronted with the possibility of having to
provide warnings due to the presence of trace amounts of defined substances. Regulations implementing the law exempt
manufacturers from providing the required warning if it can be demonstrated that the defined substances occur naturally in the
product or are present in municipal water used to manufacture the product. We have assessed the impact of the law and its
implementing regulations on our beverage products and have concluded that none of our products currently requires a warning
under the law. We cannot predict whether or to what extent food industry efforts to minimize the law’s impact on food products will
succeed. We also cannot predict what impact, either in terms of direct costs or diminished sales, imposition of the law may have.
Mexican Water Regulation. In Mexico, we pump water from our own wells and we purchase water directly from municipal water
companies pursuant to concessions obtained from the Mexican government on a plant-by-plant basis. The concessions are
generally for ten-year terms and can generally be renewed by us prior to expiration with minimal cost and effort. Our concessions
may be terminated if, among other things, (a) we use materially more water than permitted by the concession, (b) we use materially
less water than required by the concession, (c) we fail to pay for the rights for water usage or (d) we carry out, without governmental
authorization, any material construction on or improvement to, our wells. Our concessions generally satisfy our current water
requirements and we believe that we are generally in compliance in all material respects with the terms of our existing concessions.
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PART I (continued)
Employees
As of December 27, 2008, we employed approximately 66,800 workers, of whom approximately 32,700 were employed in the United
States. Approximately 8,700 of our workers in the United States are union members and approximately 16,200 of our workers outside
the United States are union members. We consider relations with our employees to be good and have not experienced significant
interruptions of operations due to labor disagreements.
Available Information
We maintain a website at www.pbg.com. We make available, free of charge, through the Investor Relations – Financial Information –
SEC Filings section of our website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended, as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and
Exchange Commission (the “SEC”).
Additionally, we have made available, free of charge, the following governance materials on our website at www.pbg.com under
Investor Relations – Company Information – Corporate Governance: Certificate of Incorporation, Bylaws, Corporate Governance
Principles and Practices, Worldwide Code of Conduct (including any amendment thereto), Director Independence Policy, the Audit
and Affiliated Transactions Committee Charter, the Compensation and Management Development Committee Charter, the
Nominating and Corporate Governance Committee Charter, the Disclosure Committee Charter and the Policy and Procedures
Governing Related-Person Transactions. These governance materials are available in print, free of charge, to any PBG shareholder
upon request.
Financial Information on Industry Segments and Geographic Areas

We operate in one industry, carbonated soft drinks and other ready-to-drink beverages, and all of our segments derive revenue from
these products. PBG has three reportable segments: U.S. & Canada, Europe (which includes Spain, Russia, Greece and Turkey) and
Mexico. Operationally, the Company is organized along geographic lines with specific regional management teams having
responsibility for the financial results in each reportable segment.
For additional information, see Note 14 in the Notes to Consolidated Financial Statements included in Item 7 below.
ITEM 1A. RISK FACTORS

Our business and operations entail a variety of risks and uncertainties, including those described below.
We may not be able to respond successfully to consumer trends related to carbonated and non-carbonated beverages.
Consumer trends with respect to the products we sell are subject to change. Consumers are seeking increased variety in their
beverages, and there is a growing interest among the public regarding the ingredients in our products, the attributes of those
ingredients and health and wellness issues generally. This interest has resulted in a decline in consumer demand for carbonated soft
drinks and an increase in consumer demand for products associated with health and wellness, such as water, enhanced water, teas
and certain other non-carbonated beverages. Consumer preferences may change due to a variety of other factors, including the
aging of the general population, changes in social trends, the real or perceived impact the manufacturing of our products has on the
environment, changes in consumer demographics, changes in travel, vacation or leisure activity patterns or a downturn in economic
conditions. Any of these changes may reduce consumers’ demand for our products. For example, the recent downturn in economic
conditions has adversely impacted sales of certain of our higher margin products, including our products sold for immediate
consumption in restaurants.
Because we rely mainly on PepsiCo to provide us with the products we sell, if PepsiCo fails to develop innovative products and
packaging that respond to consumer trends, we could be put at a competitive disadvantage in the marketplace and our business and
financial results could be adversely affected. In addition, PepsiCo is under no obligation to provide us distribution rights to all of its
products in all of the channels in which we operate. If we are unable to enter into agreements with PepsiCo to distribute innovative
products in all of these channels or otherwise gain broad access to products that respond to consumer trends, we could be put at a
competitive disadvantage in the marketplace and our business and financial results could be adversely affected.
We may not be able to respond successfully to the demands of our largest customers.
Our retail customers are consolidating, leaving fewer customers with greater overall purchasing power and, consequently, greater
influence over our pricing, promotions and distribution methods. Because we do not operate in all markets in which these customers
operate, we must rely on PepsiCo and other Pepsi bottlers to service such customers outside of our markets. The inability of PepsiCo
or Pepsi bottlers as a whole, to meet the product, packaging and service demands of our largest customers could lead to a loss or
decrease in business from such customers and have a material adverse effect on our business and financial results.
Our business requires a significant supply of raw materials and energy, the limited availability or increased costs of which could
adversely affect our business and financial results.
The production and distribution of our beverage products is highly dependent on certain ingredients, packaging materials, other raw
materials, and energy. To produce our products, we require significant amounts of ingredients, such as beverage concentrate and
high fructose corn syrup, as well as access to significant amounts of water. We also require significant amounts of packaging
materials, such as aluminum and plastic bottle components, such as resin (a petroleum-based product). In addition, we use a
significant amount of electricity, natural gas, motor fuel and other energy sources to operate our fleet of trucks and our bottling
plants.
If the suppliers of our ingredients, packaging materials, other raw materials or energy are impacted by an increased demand for their
products, business
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downturn, weather conditions (including those related to climate change), natural disasters, governmental regulation, terrorism,
strikes or other events, and we are not able to effectively obtain the products from another supplier, we could incur an interruption in
the supply of such products or increased costs of such products. Any sustained interruption in the supply of our ingredients,
packaging materials, other raw materials or energy, or increased costs thereof, could have a material adverse effect on our business
and financial results.
The prices of some of our ingredients, packaging materials, other raw materials and energy, including high fructose corn syrup and
motor fuel, are experiencing unprecedented volatility, which can unpredictably and substantially increase our costs. We have
implemented a hedging strategy to better predict our costs of some of these products. In a volatile market, however, such strategy
includes a risk that, during a particular period of time, market prices fall below our hedged price and we pay higher than market prices
for certain products. As a result, under certain circumstances, our hedging strategy may increase our overall costs.
If there is a significant or sustained increase in the costs of our ingredients, packaging materials, other raw materials or energy, and
we are unable to pass the increased costs on to our customers in the form of higher prices, there could be a material adverse effect
on our business and financial results.
Changes in the legal and regulatory environment, including those related to climate change, could increase our costs or liabilities
or impact the sale of our products.
Our operations and properties are subject to regulation by various federal, state and local governmental entities and agencies as well
as foreign governmental entities. Such regulations relate to, among other things, food and drug laws, competition laws, labor laws,
taxation requirements (including soft drink or similar excise taxes), bottle and can legislation (see above under “Governmental
Regulation Applicable to PBG”), accounting standards and environmental laws.
There is also a growing consensus that emissions of greenhouse gases are linked to global climate change, which may result in more
regional, federal and/or global legal and regulatory requirements to reduce or mitigate the effects of greenhouse gases. Until any
such requirements come into effect, it is difficult to predict their impact on our business or financial results, including any impact on
our supply chain costs. In the interim, we are working to improve our systems to record baseline data and monitor our greenhouse
gas emissions and, during the process of developing our business strategies, we consider the impact our plans may have on the
environment.
We cannot assure you that we have been or will at all times be in compliance with all regulatory requirements or that we will not
incur material costs or liabilities in connection with existing or new regulatory requirements, including those related to climate
change.
PepsiCo’s equity ownership of PBG could affect matters concerning us.

As of January 23, 2009, PepsiCo owned approximately 40.2% of the combined voting power of our voting stock (with the balance
owned by the public). PepsiCo will be able to significantly affect the outcome of PBG’s shareholder votes, thereby affecting matters
concerning us.
Because we depend upon PepsiCo to provide us with concentrate, certain funding and various services, changes in our relationship
with PepsiCo could adversely affect our business and financial results.
We conduct our business primarily under beverage agreements with PepsiCo. If our beverage agreements with PepsiCo are
terminated for any reason, it would have a material adverse effect on our business and financial results. These agreements provide
that we must purchase all of the concentrate for such beverages at prices and on other terms which are set by PepsiCo in its sole
discretion. Any significant concentrate price increases could materially affect our business and financial results.
PepsiCo has also traditionally provided bottler incentives and funding to its bottling operations. PepsiCo does not have to maintain
or continue these incentives or funding. Termination or decreases in bottler incentives or funding levels could materially affect our
business and financial results.
Under our shared services agreement, we obtain various services from PepsiCo, including procurement of raw materials and certain
administrative services. If any of the services under the shared services agreement were terminated, we would have to obtain such
services on our own. This could result in a disruption of such services, and we might not be able to obtain these services on terms,
including cost, that are as favorable as those we receive through PepsiCo.
We may have potential conflicts of interest with PepsiCo, which could result in PepsiCo’s objectives being favored over our
objectives.
Our past and ongoing relationship with PepsiCo could give rise to conflicts of interests. In addition, two members of our Board of
Directors are executive officers of PepsiCo, and one of the three Managing Directors of Bottling LLC, our principal operating
subsidiary, is an officer of PepsiCo, a situation which may create conflicts of interest.
These potential conflicts include balancing the objectives of increasing sales volume of PepsiCo beverages and maintaining or
increasing our profitability. Other possible conflicts could relate to the nature, quality and pricing of services or products provided
to us by PepsiCo or by us to PepsiCo.
Conflicts could also arise in the context of our potential acquisition of bottling territories and/or assets from PepsiCo or other
independent Pepsi bottlers. Under our Master Bottling Agreement with PepsiCo, we must obtain PepsiCo’s approval to acquire any
independent Pepsi bottler. PepsiCo has agreed not to withhold approval for any acquisition within agreed-upon U.S. territories if we
have successfully negotiated the acquisition and, in PepsiCo’s reasonable judgment, satisfactorily performed our obligations under
the Master Bottling Agreement. We have agreed not to attempt to acquire any independent Pepsi bottler outside of those agreed-
upon territories without PepsiCo’s prior written approval.
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PART I (continued)
Our acquisition strategy may be limited by our ability to successfully integrate acquired businesses into ours or our failure to
realize our expected return on acquired businesses.
We intend to continue to pursue acquisitions of bottling assets and territories from PepsiCo’s independent bottlers. The success of
our acquisition strategy may be limited because of unforeseen costs and complexities. We may not be able to acquire, integrate
successfully or manage profitably additional businesses without substantial costs, delays or other difficulties. Unforeseen costs and
complexities may also prevent us from realizing our expected rate of return on an acquired business. Any of the foregoing could
have a material adverse effect on our business and financial results.
We may not be able to compete successfully within the highly competitive carbonated and non-carbonated beverage markets.
The carbonated and non-carbonated beverage markets are highly competitive. Competitive pressures in our markets could cause us
to reduce prices or forego price increases required to off-set increased costs of raw materials and fuel, increase capital and other
expenditures, or lose market share, any of which could have a material adverse effect on our business and financial results.
If we are unable to fund our substantial capital requirements, it could cause us to reduce our planned capital expenditures and
could result in a material adverse effect on our business and financial results.
We require substantial capital expenditures to implement our business plans. If we do not have sufficient funds or if we are unable to
obtain financing in the amounts desired or on acceptable terms, we may have to reduce our planned capital expenditures, which
could have a material adverse effect on our business and financial results.
The level of our indebtedness could adversely affect our financial health.
The level of our indebtedness requires us to dedicate a substantial portion of our cash flow from operations to payments on our
debt. This could limit our flexibility in planning for, or reacting to, changes in our business and place us at a competitive
disadvantage compared to competitors that have less debt. Our indebtedness also exposes us to interest rate fluctuations, because
the interest on some of our indebtedness is at variable rates, and makes us vulnerable to general adverse economic and industry
conditions. All of the above could make it more difficult for us, or make us unable to satisfy our obligations with respect to all or a
portion of such indebtedness and could limit our ability to obtain additional financing for future working capital expenditures,
strategic acquisitions and other general corporate requirements.
We are unable to predict the impact of the recent downturn in the credit markets and the resulting costs or constraints in
obtaining financing on our business and financial results.
Our principal sources of cash come from our operating activities and the issuance of debt and bank borrowings. The recent and
extraordinary disruption in the credit markets has had a significant adverse impact on a number of financial institutions and has
affected the cost of capital available to us. At this point in time, our liquidity has not been materially impacted by the current credit
environment and management does not expect that it will be materially impacted in the near future. We will continue to closely
monitor our liquidity and the credit markets. The recent economic downturn has also had an adverse impact on some of our
customers and suppliers. We will continue to closely monitor the credit worthiness of our customers and suppliers and adjust our
allowance for doubtful accounts, as appropriate. We cannot predict with any certainty the impact to us of any further disruption in
the credit environment or any resulting material impact on our liquidity, future financing costs or financial results.
Our foreign operations are subject to social, political and economic risks and may be adversely affected by foreign currency
fluctuations.
In the fiscal year ended December 27, 2008, approximately 34% of our net revenues were generated in territories outside the United
States. Social, economic and political developments in our international markets (including Russia, Mexico, Canada, Spain, Turkey
and Greece) may adversely affect our business and financial results. These developments may lead to new product pricing, tax or
other policies and monetary fluctuations that may adversely impact our business and financial results. The overall risks to our
international businesses also include changes in foreign governmental policies. In addition, we are expanding our investment and
sales and marketing efforts in certain emerging markets, such as Russia. Expanding our business into emerging markets may present
additional risks beyond those associated with more developed international markets. For example, Russia has been a significant
source of our profit growth, but is now experiencing an economic downturn, which if sustained may have a material adverse impact
on our business and financial results. Additionally, our cost of goods, our results of operations and the value of our foreign assets
are affected by fluctuations in foreign currency exchange rates. For example, the recent weakening of foreign currencies negatively
impacted our earnings in 2008 compared with the prior year.
If we are unable to maintain brand image and product quality, or if we encounter other product issues such as product recalls, our
business may suffer.
Maintaining a good reputation globally is critical to our success. If we fail to maintain high standards for product quality, or if we fail
to maintain high ethical, social and environmental standards for all of our operations and activities, our reputation could be
jeopardized. In addition, we may be liable if the consumption of any of our products causes injury or illness, and we may be required
to recall products if they become contaminated or are damaged or mislabeled. A significant product liability or other product-related
legal judgment against us or a widespread recall of our products could have a material adverse effect on our business and financial
results.
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Our success depends on key members of our management, the loss of whom could disrupt our business operations.
Our success depends largely on the efforts and abilities of key management employees. Key management employees are not parties
to employment agreements with us. The loss of the services of key personnel could have a material adverse effect on our business
If we are unable to renew collective bargaining agreements on satisfactory terms, or if we experience strikes, work stoppages or
labor unrest, our business may suffer.
Approximately 31% of our U.S. and Canadian employees are covered by collective bargaining agreements. These agreements
generally expire at various dates over the next five years. Our inability to successfully renegotiate these agreements could cause
work stoppages and interruptions, which may adversely impact our operating results. The terms and conditions of existing or
renegotiated agreements could also increase our costs or otherwise affect our ability to increase our operational efficiency.
Benefits cost increases could reduce our profitability or cash flow.

Our profitability and cash flow is substantially affected by the costs of pension, postretirement medical and employee medical and
other benefits. Recently, these costs have increased significantly due to factors such as declines in investment returns on pension
assets, changes in discount rates used to calculate pension and related liabilities, and increases in health care costs. Although we
actively seek to control increases, there can be no assurance that we will succeed in limiting future cost increases, and continued
upward pressure in these costs could have a material adverse affect on our business and financial performance.
Our failure to effectively manage our information technology infrastructure could disrupt our operations and negatively impact
our business.
We rely on information technology systems to process, transmit, store and protect electronic information. Additionally, a significant
portion of the communications between our personnel, customers, and suppliers depends on information technology. If we do not
effectively manage our information technology infrastructure, we could be subject to transaction errors, processing inefficiencies,
the loss of customers, business disruptions and data security breaches.
Adverse weather conditions could reduce the demand for our products.
Demand for our products is influenced to some extent by the weather conditions in the markets in which we operate. Weather
conditions in these markets, such as unseasonably cool temperatures, could have a material adverse effect on our sales volume and
financial results.
Catastrophic events in the markets in which we operate could have a material adverse effect on our financial condition.
Natural disasters, terrorism, pandemic, strikes or other catastrophic events could impair our ability to manufacture or sell our
products. Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to manage such events
effectively if they occur, could adversely affect our sales volume, cost of raw materials, earnings and financial results.
ITEM 1B. UNRESOLVED STAFF COMMENTS

None.
ITEM 2. PROPERTIES
Our corporate headquarters is located in leased property in Somers, New York. In addition, we have a total of 591 manufacturing and
distribution facilities, as follows:
U.S. & Canada Europe Mexico
Manufacturing Facilities
Owned 51 14 22
Leased 2 – 3
Other 4 – –
Total 57 14 25
Distribution Facilities
Owned 222 12 84
Leased 49 48 80
Total 271 60 164
We also own or lease and operate approximately 38,500 vehicles, including delivery trucks, delivery and transport tractors and
trailers and other trucks and vans used in the sale and distribution of our beverage products. We also own more than two million
coolers, soft drink dispensing fountains and vending machines.
With a few exceptions, leases of plants in the U.S. & Canada are on a long-term basis, expiring at various times, with options to
renew for additional periods. Our leased facilities in Europe and Mexico are generally leased for varying and usually shorter periods,
with or without renewal options. We believe that our properties are in good operating condition and are adequate to serve our
current operational needs.
ITEM 3. LEGAL PROCEEDINGS

From time to time we are a party to various litigation proceedings arising in the ordinary course of our business, none of which, in
the opinion of management, is likely to have a material adverse effect on our financial condition or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
Our common stock is listed on the New York Stock Exchange under the symbol “PBG.” Our Class B common stock is not publicly
traded. On February 6, 2009, the last sales price for our common stock on the New York Stock Exchange was $21.02 per share. The
following table sets forth the high and low sales prices per share of our common stock during each of our fiscal quarters in 2008 and
2007.
2008 High Low

First Quarter $41.74 $32.15
Second Quarter $34.74 $30.71
Third Quarter $31.46 $26.47
Fourth Quarter $32.47 $16.49
2007 High Low

First Quarter $32.54 $30.13
Second Quarter $35.23 $31.55
Third Quarter $36.76 $32.35
Fourth Quarter $43.38 $34.72
Shareholders – As of February 6, 2009, there were approximately 56,777 registered and beneficial holders of our common stock.
PepsiCo is the holder of all of our outstanding shares of Class B common stock.
Dividend Policy – Quarterly cash dividends are usually declared in late January or early February, March, July and October and paid
at the end of March, June, and September and at the beginning of January. The dividend record dates for 2009 are expected to be
March 6, June 5, September 4 and December 4.
We declared the following dividends on our common stock during fiscal years 2008 and 2007:
Quarter 2008 2007

1 $.14 $.11
2 $.17 $.14
3 $.17 $.14
4 $.17 $.14
Total $.65 $.53
Performance Graph – The following performance graph compares the cumulative total return of our common stock to the
Standard & Poor’s 500 Stock Index and to an index of peer companies selected by us (the “Bottling Group Index”). The Bottling
Group Index consists of Coca-Cola Hellenic Bottling Company S.A., Coca-Cola Bottling Co. Consolidated, Coca-Cola Enterprises
Inc., Coca-Cola FEMSA ADRs, and PepsiAmericas, Inc. The graph assumes the return on $100 invested on December 27, 2003 until
December 27, 2008. The returns of each member of the Bottling Group Index are weighted according to each member’s stock market
capitalization as of the beginning of the period measured and includes the subsequent reinvestment of dividends.
(LINE GRAPH)
Ye ar-e n de d
2003 2004 2005 2006 2007 2008
PBG(1) 100 114 122 134 175 99
Bottling Group Index 100 106 116 140 205 105
Standard & Poor’s 500 Index 100 112 118 137 145 88
(1) T he closing price for a share of our common stock on December 26, 2008, the last trading day of our fiscal year, was $22.00.
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PBG Purchases of Equity Securities – We did not repurchase shares in the fourth quarter of 2008. We repurchased approximately
15.0 million shares of PBG common stock during fiscal year 2008. Since the inception of our share repurchase program in October
1999 and through the end of fiscal year 2008, approximately 146.5 million shares of PBG common stock have been repurchased. Our
share repurchases for the fourth quarter of 2008 are as follows:
Maximum
Number (or
Total Number Approximate
of Shares Dollar Value)
(or Units) of Shares
Purchased (or Units)
Total as Part of that May Yet
Number Average Publicly Be Purchased
of Shares Price Paid Announced Under the
(or Units) per Share Plans or Plans or
Period Purchased(1) (or Unit)(2) Programs (3) Programs (3)
Period 10
09/07/08-10/04/08 – – – 28,540,400
Period 11
10/05/08-11/01/08 – – – 28,540,400
Period 12
11/02/08-11/29/08 – – – 28,540,400
Period 13
11/30/08-12/27/08 – – – 28,540,400
Total – – –
(1) Shares have only been repurchased through publicly announced programs.
(2) Average share price excludes brokerage fees.
(3) Our Board has authorized the repurchase of shares of our common stock on the open market and through negotiated transactions as follows:
Number of Shares
Date Share Repurchase Programs Authorized to be
were P ublicly Announced Repurchased
October 14, 1999 20,000,000
July 13, 2000 10,000,000
July 11, 2001 20,000,000
May 28, 2003 25,000,000
March 25, 2004 25,000,000
March 24, 2005 25,000,000
December 15, 2006 25,000,000
March 27, 2008 25,000,000
Total shares authorized to be repurchased as of December 27, 2008 175,000,000
Unless terminated by resolution of our Board, each share repurchase program expires when we have repurchased all shares
authorized for repurchase thereunder.
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PART II (continued)
ITEM 6. SELECTED FINANCIAL DATA

SELECTED FINANCIAL AND OPERATING DATA
in millions, except per share data
Fiscal years ended 2008(1) 2007(2) 2006(3)(4) 2005(3)(5) 2004(3)

Statement of Operations Data:
Net revenues $13,796 $13,591 $ 12,730 $ 11,885 $10,906
Cost of sales 7,586 7,370 6,900 6,345 5,656
Gross profit 6,210 6,221 5,830 5,540 5,250
Selling, delivery and administrative expenses 5,149 5,150 4,813 4,517 4,274
Impairment charges 412 – – – –
Operating income 649 1,071 1,017 1,023 976
Interest expense, net 290 274 266 250 230
Other non-operating expenses (income), net 25 (6) 11 1 1
Minority interest 60 94 59 59 56
Income before income taxes 274 709 681 713 689
Income tax expense(6)(7)(8) 112 177 159 247 232
Net income $ 162 $ 532 $ 522 $ 466 $ 457
Per Share Data:
Basic earnings per share $ 0.75 $ 2.35 $ 2.22 $ 1.91 $ 1.79
Diluted earnings per share $ 0.74 $ 2.29 $ 2.16 $ 1.86 $ 1.73
Cash dividends declared per share $ 0.65 $ 0.53 $ 0.41 $ 0.29 $ 0.16
Weighted-average basic shares outstanding 216 226 236 243 255
Weighted-average diluted shares outstanding 220 233 242 250 263
Other Financial Data:
Cash provided by operations $ 1,284 $ 1,437 $ 1,228 $ 1,219 $ 1,222
Capital expenditures $ (760) $ (854) $ (725) $ (715) $ (688)
Balance Sheet Data (at period end):
Total assets $12,982 $13,115 $ 11,927 $ 11,524 $10,937
Long-term debt $ 4,784 $ 4,770 $ 4,754 $ 3,939 $ 4,489
Minority interest $ 1,148 $ 973 $ 540 $ 496 $ 445
Accumulated other comprehensive loss(9) $ (938) $ (48) $ (361) $ (262) $ (315)
Shareholders’ equity $ 1,343 $ 2,615 $ 2,084 $ 2,043 $ 1,949
(1) Our fiscal year 2008 results include a $412 million pre-tax non-cash impairment charge related primarily to distribution rights and product brands in
Mexico and an $83 million pre-tax charge related to restructuring charges. See Items Affecting Comparability of Our Financial Results in Item 7.
(2) Our fiscal year 2007 results include a $30 million pre-tax charge related to restructuring charges and a $23 million pre-tax charge related to our asset
disposal plan. See Items Affecting Comparability of Our Financial Results in Item 7.
(3) In 2007, we made a classification correction for certain miscellaneous costs incurred from product losses in the trade. Approximately $90 million and
$92 million of costs incurred, which were incorrectly included in selling, delivery and administrative expenses, were reclassified to cost of sales in our
Consolidated Statements of Operations for the years ended 2006 and 2005, respectively. We have not reclassified these expenses for the 2004 fiscal
year.
(4) In fiscal year 2006, we adopted Statement of Financial Accounting Standards (“ SFAS”) No. 123 (revised 2004), “ Share-Based Payment” resulting in a
$65 million decrease in operating income or $0.17 per diluted earnings per share. Results for prior periods have not been restated as provided for
under the modified prospective approach.
(5) Our fiscal year 2005 results include an extra week of activity. T he pre-tax income generated from the extra week was spent back in strategic
initiatives within our selling, delivery and administrative expenses and, accordingly, had no impact on our diluted earnings per share.
(6) Our fiscal year 2007 results include a non-cash tax benefit of $46 million due to the reversal of net tax contingency reserves and a net non-cash
benefit of $13 million due to tax law changes in Canada and Mexico. See Note 13 in the Notes to Consolidated Financial Statements.
(7) Our fiscal year 2006 results include a tax benefit of $11 million from tax law changes in Canada, T urkey, and in various U.S. jurisdictions and a
$55 million tax benefit from the reversal of tax contingency reserves due to completion of our IRS audit of our 1999-2000 income tax returns. See
Note 13 in the Notes to Consolidated Financial Statements.
(8) Our fiscal year 2004 results include Mexico tax law change benefit of $26 million and international tax restructuring charge of $30 million.
(9) In fiscal year 2006, we adopted SFAS No. 158, “ Employers’ Accounting for Defined Benefit P ension and Other Postretirement Plans” and recorded a
$159 million loss, net of taxes and minority interest, to accumulated other comprehensive loss.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
TABLE OF CONTENTS
MANAGEMENT’S FINANCIAL REVIEW
Our Business 16
Critical Accounting Policies 17
Other Intangible Assets net, and Goodwill 17
Pension and Postretirement Medical Benefit Plans 17
Casualty Insurance Costs 19
Income Taxes 19
Relationship with PepsiCo 20
Items Affecting Comparability of Our Financial Results 20
Financial Performance Summary and Worldwide Financial Highlights for Fiscal Year 2008 22
Results of Operations By Segment 22
Liquidity and Financial Condition 26
Market Risks and Cautionary Statements 28
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Operations 31

Consolidated Statements of Cash Flows 32
Consolidated Balance Sheets 33
Consolidated Statements of Changes in Shareholders’ Equity 34
Notes to Consolidated Financial Statements
Note 1 – Basis of Presentation 35
Note 2 – Summary of Significant Accounting Policies 35
Note 3 – Earnings per Share 38
Note 4 – Share-Based Compensation 39
Note 5 – Balance Sheet Details 41
Note 6 – Other Intangible Assets, net and Goodwill 41
Note 7 – Investment in Noncontrolled Affiliate 42
Note 8 – Fair Value Measurements 42
Note 9 – Short-Term Borrowings and Long-Term Debt 43
Note 10 – Leases 44
Note 11 – Financial Instruments and Risk Management 44
Note 12 – Pension and Postretirement Medical Benefit Plans 46
Note 13 – Income Taxes 49
Note 14 – Segment Information 51
Note 15 – Related Party Transactions 52
Note 16 – Restructuring Charges 53
Note 17 – Accumulated Other Comprehensive Loss 54
Note 18 – Supplemental Cash Flow Information 54
Note 19 – Contingencies 54
Note 20 – Selected Quarterly Financial Data (unaudited) 54
Note 21 – Subsequent Event 54
Report of Independent Registered Public Accounting Firm 55
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PART II (continued)

Tabular dollars in millions, except per share data
OUR BUSINESS
The Pepsi Bottling Group, Inc. is the world’s largest manufacturer, seller and distributor of Pepsi-Cola beverages. When used in
these Consolidated Financial Statements, “PBG,” “we,” “our,” “us” and the “Company” each refers to The Pepsi Bottling Group, Inc.
and, where appropriate, to Bottling Group, LLC (“Bottling LLC”), our principal operating subsidiary.
We have the exclusive right to manufacture, sell and distribute Pepsi-Cola beverages in all or a portion of the U.S., Mexico, Canada,
Spain, Russia, Greece and Turkey. PBG manages and reports operating results through three reportable segments: U.S. & Canada,
Europe (which includes Spain, Russia, Greece and Turkey) and Mexico. As shown in the graph below, the U.S. & Canada segment is
the dominant driver of our results, generating 68 percent of our volume and 75 percent of our net revenues.
Volum e Re ve n u e
T otal: 1.6 Billion Raw Cases T otal: $13.8 Billion
(BAR GRAPH) (BAR GRAPH)
The majority of our volume is derived from brands licensed from PepsiCo, Inc. (“PepsiCo”) or PepsiCo joint ventures. These brands
are some of the most recognized in the world and consist of carbonated soft drinks (“CSDs”) and non-carbonated beverages. Our
CSDs include brands such as Pepsi-Cola, Diet Pepsi, Diet Pepsi Max, Mountain Dew and Sierra Mist. Our non-carbonated beverages
portfolio includes brands with Starbucks Frapuccino in the ready-to-drink coffee category; Mountain Dew Amp and SoBe
Adrenaline Rush in the energy drink category; SoBe and Tropicana in the juice and juice drinks category; Aquafina in the water
category; and Lipton Iced Tea in the tea category. We continue to strengthen our powerful portfolio highlighted by our focus on the
hydration category with SoBe Life Water, Propel fitness water and G2 in the U.S. In some of our territories we have the right to
manufacture, sell and distribute soft drink products of companies other than PepsiCo, including Dr Pepper, Crush and Squirt. We
also have the right in some of our territories to manufacture, sell and distribute beverages under brands that we own, including
Electropura, e-pura and Garci Crespo. See Part I, Item 1 of this report for a listing of our principal products by segment.
We sell our products through cold-drink and take-home channels. Our cold-drink channel consists of chilled products sold in the
retail and foodservice channels. We earn the highest profit margins on a per-case basis in the cold-drink channel. Our take-home
channel consists of unchilled products that are sold in the retail, mass merchandiser and club store channels for at-home
consumption.
Our products are brought to market primarily through direct store delivery (“DSD”) or third-party distribution, including foodservice
and vending distribution networks. The hallmarks of the Company’s DSD system are customer service, speed to market, flexibility
and reach. These are all critical factors in bringing new products to market, adding accounts to our existing base and meeting
increasingly diverse volume demands.
Our customers range from large format accounts, including large chain foodstores, supercenters, mass merchandisers, chain drug
stores, club stores and military bases, to small independently owned shops and foodservice businesses. Changing consumer
shopping trends and “on-the-go” lifestyles are shifting more of our volume to fast-growing channels such as supercenters, club and
dollar stores. Retail consolidation continues to increase the strategic significance of our large-volume customers. In 2008, sales to
our top five retail customers represented approximately 19 percent of our net revenues.
PBG’s focus is on superior sales execution, customer service, merchandising and operating excellence. Our goal is to help our
customers grow their beverage business by making our portfolio of brands readily available to consumers at every shopping
occasion, using proven methods to grow not only PepsiCo brand sales, but the overall beverage category. Our objective is to ensure
we have the right product in the right package to satisfy the ever changing needs of today’s consumers.
We measure our sales in terms of physical cases sold to our customers. Each package, as sold to our customers, regardless of
configuration or number of units within a package, represents one physical case. Our net price and gross margin on a per-case basis
are impacted by how much we charge for the product, the mix of brands and packages we sell, and the channels through which the
product is sold. For example, we realize a higher net revenue and gross margin per case on a 20-ounce chilled bottle sold in a
convenience store than on a 2-liter unchilled bottle sold in a grocery store.
Our financial success is dependent on a number of factors, including: our strong partnership with PepsiCo, the customer
relationships we cultivate, the pricing we achieve in the marketplace, our market execution, our ability to meet changing consumer
preferences and the efficiencies we achieve in manufacturing and distributing our products. Key indicators of our financial success
are: the number of physical cases we sell, the net price and gross margin we achieve on a per-case basis, our overall cost
productivity which reflects how well we manage our raw material, manufacturing, distribution and other overhead costs, and cash
and capital management.
The discussion and analysis throughout Management’s Financial Review should be read in conjunction with the Consolidated
Financial Statements and the related accompanying notes. The preparation of our Consolidated Financial Statements in conformity
with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires us to make estimates and
assumptions that affect the reported amounts in our Consolidated Financial Statements and the related accompanying notes,
including various claims and contingencies related to lawsuits, taxes, environmental and other matters arising from the normal course
of business. We apply our best judgment, our knowledge of existing facts and circumstances and actions that we may undertake in
the future, in determining the estimates that affect our Consolidated Financial Statements.
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We evaluate our estimates on an on-going basis using our historical experience as well as other factors we believe appropriate under
the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. As future
events and their effect cannot be determined with precision, actual results may differ from these estimates.
CRITICAL ACCOUNTING POLICIES

Significant accounting policies are discussed in Note 2 in the Notes to Consolidated Financial Statements. Management believes the
following policies, which require the use of estimates, assumptions and the application of judgment, to be the most critical to the
portrayal of PBG’s results of operations and financial condition. We applied our critical accounting policies and estimation methods
consistently in all material respects and have discussed the selection of these policies and related disclosures with the Audit and
Affiliated Transactions Committee of our Board of Directors.
Other Intangible Assets, net and Goodwill

Our intangible assets consist primarily of franchise rights, distribution rights, licensing rights, brands and goodwill and principally
arise from the allocation of the purchase price of businesses acquired. These intangible assets, other than goodwill, are classified as
either finite-lived intangibles or indefinite-lived intangibles.
The classification of intangibles and the determination of the appropriate useful life require substantial judgment. The determination
of the expected life depends upon the use and underlying characteristics of the intangible asset. In our evaluation of the expected
life of these intangible assets, we consider the nature and terms of the underlying agreements; our intent and ability to use the
specific asset; the age and market position of the products within the territories in which we are entitled to sell; the historical and
projected growth of those products; and costs, if any, to renew the related agreement.
Intangible assets that are determined to have a finite life are amortized over their expected useful life, which generally ranges from
five to twenty years. For intangible assets with finite lives, evaluations for impairment are performed only if facts and circumstances
indicate that the carrying value may not be recoverable.
Goodwill and other intangible assets with indefinite lives are not amortized; however, they are evaluated for impairment at least
annually or more frequently if facts and circumstances indicate that the assets may be impaired. Prior to 2008, the Company
completed this test in the fourth quarter. During 2008, the Company changed its impairment testing of goodwill and intangible assets
with indefinite useful lives to the third quarter, with the exception of Mexico’s intangible assets. Impairment testing of Mexico’s
intangible assets with indefinite useful lives was completed in the fourth quarter to coincide with the completion of our strategic
review of the business.
We evaluate goodwill for impairment at the reporting unit level, which we determined to be the countries in which we operate. We
evaluate goodwill for impairment by comparing the fair value of the reporting unit, as determined by its discounted cash flows, with
its carrying value. If the carrying value of a reporting unit exceeds its fair value, we compare the implied fair value of the reporting
unit’s goodwill with its carrying amount to measure the amount of impairment loss.
We evaluate other intangible assets with indefinite useful lives for impairment by comparing the fair values of the assets with their
carrying values. The fair value of our franchise rights, distribution rights and licensing rights is measured using a multi-period excess
earnings method that is based upon estimated discounted future cash flows. The fair value of our brands is measured using a multi-
period royalty savings method, which reflects the savings realized by owning the brand and, therefore, not requiring payment of
third party royalty fees.
Considerable management judgment is necessary to estimate discounted future cash flows in conducting an impairment analysis for
goodwill and other intangible assets. The cash flows may be impacted by future actions taken by us and our competitors and the
volatility of macroeconomic conditions in the markets in which we conduct business. Assumptions used in our impairment analysis,
such as forecasted growth rates, cost of capital and additional risk premiums used in the valuations, are based on the best available
market information and are consistent with our long-term strategic plans. An inability to achieve strategic business plan targets in a
reporting unit, a change in our discount rate or other assumptions could have a significant impact on the fair value of our reporting
units and other intangible assets, which could then result in a material non-cash impairment charge to our results of operations. The
recent volatility in the global macroeconomic conditions has had a negative impact on our business results. If this volatility
continues to persist into the future, the fair value of our intangible assets could be adversely impacted.
As a result of the 2008 impairment test for goodwill and other intangible assets with indefinite lives, the Company recorded a
$412 million non-cash impairment charge relating primarily to distribution rights and brands for the Electropura water business in
Mexico. The impairment charge relating to these intangible assets was based upon the findings of an extensive strategic review and
the finalization of restructuring plans for our Mexican business. In light of the weakening macroeconomic conditions and our
outlook for the business in Mexico, we lowered our expectation of the future performance, which reduced the value of these
intangible assets and triggered the impairment charge. After recording the above mentioned impairment charge, Mexico’s remaining
net book value of goodwill and other intangible assets is approximately $367 million.
For further information about our goodwill and other intangible assets see Note 6 in the Notes to Consolidated Financial Statements.
Pension and Postretirement Medical Benefit Plans

We sponsor pension and other postretirement medical benefit plans in various forms in the United States and similar pension plans
in our international locations, covering employees who meet specified eligibility requirements. The assets, liabilities and expenses
associated with our international plans were not significant to our worldwide results of operations or financial position, and
accordingly, assumptions, expenses, sensitivity analyses and other data regarding these plans are not included in any of the
discussions provided below.
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PART II (continued)
In the U.S., the non-contributory defined benefit pension plans provide benefits to certain full-time salaried and hourly employees.
Benefits are generally based on years of service and compensation, or stated amounts for each year of service. Effective January 1,
2007, newly hired salaried and non-union hourly employees are not eligible to participate in these plans. Additionally, effective
April 1, 2009, benefits from these plans will no longer continue to accrue for certain salaried and non-union employees that do not
meet age and service requirements. The impact of these plan changes will significantly reduce the Company’s future long-term
pension obligation, pension expense and cash contributions to the plans. Employees not eligible to participate in these plans or
employees whose benefits will be discontinued will receive additional Company retirement contributions under the Company’s
defined contribution plans.
Substantially all of our U.S. employees meeting age and service requirements are eligible to participate in our postretirement medical
benefit plans.
Assumptions
Effective for the 2008 fiscal year, the Company adopted the measurement date provisions of Statement of Financial Accounting
Standards (“SFAS”) No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (“SFAS 158”).
As a result of adopting SFAS 158, the Company’s measurement date for plan assets and benefit obligations was changed from
September 30 to its fiscal year end.
The determination of pension and postretirement medical plan obligations and related expenses requires the use of assumptions to
estimate the amount of benefits that employees earn while working, as well as the present value of those benefit obligations.
Significant assumptions include discount rate; expected return on plan assets; certain employee-related factors such as retirement
age, mortality, and turnover; rate of salary increases for plans where benefits are based on earnings; and for retiree medical plans,
health care cost trend rates.
On an annual basis we evaluate these assumptions, which are based upon historical experience of the plans and management’s best
judgment regarding future expectations. These assumptions may differ materially from actual results due to changing market and
economic conditions. A change in the assumptions or economic events outside our control could have a material impact on the
measurement of our pension and postretirement medical benefit expenses and obligations as well as related funding requirements.
The discount rates used in calculating the present value of our pension and postretirement medical benefit plan obligations are
developed based on a yield curve that is comprised of high-quality, non-callable corporate bonds. These bonds are rated Aa or
better by Moody’s; have a principal amount of at least $250 million; are denominated in U.S. dollars; and have maturity dates
ranging from six months to thirty years, which matches the timing of our expected benefit payments.
The expected rate of return on plan assets for a given fiscal year is based upon actual historical returns and the long-term outlook on
asset classes in the pension plans’ investment portfolio. In connection with the pension plan design change we changed our asset
allocation targets. The current target asset allocation for the U.S. pension plans is 65 percent equity investments, of which
approximately half is to be invested in domestic equities and half is to be invested in foreign equities. The remaining 35 percent is to
be invested primarily in long-term corporate bonds. Based on our revised asset allocation, historical returns and estimated future
outlook of the pension plans’ portfolio, we changed our 2009 estimated long-term rate of return on plan assets assumption from
8.5 percent to 8.0 percent.
Differences between the assumed rate of return and actual rate of return on plan assets are deferred in accumulated other
comprehensive loss in equity and amortized to earnings utilizing the market-related value method. Under this method, differences
between the assumed rate of return and actual rate of return from any one year will be recognized over a five year period to determine
the market related value.
Other gains and losses resulting from changes in actuarial assumptions and from differences between assumed and actual
experience are determined at each measurement date and deferred in accumulated other comprehensive loss in equity. To the extent
the amount of all unrecognized gains and losses exceeds 10 percent of the larger of the benefit obligation or plan assets, such
amount is amortized to earnings over the average remaining service period of active participants.
The cost or benefit from benefit plan changes is also deferred in accumulated other comprehensive loss in equity and amortized to
earnings on a straight-line basis over the average remaining service period of the employees expected to receive benefits.
Net unrecognized losses and unamortized prior service costs relating to the pension and postretirement plans in the United States,
totaled $969 million and $449 million at December 27, 2008 and December 29, 2007, respectively.
The following tables provide the weighted-average assumptions for our 2009 and 2008 pension and postretirement medical plans’
expense:
P ension 2009 2008
Discount rate 6.20% 6.70%
Expected rate of return on plan assets (net of administrative expenses) 8.00% 8.50%
Rate of compensation increase 3.53% 3.56%
P ostretirement 2009 2008

Health care cost trend rate 8.75% 9.50%
During 2008, our ongoing defined benefit pension and postretirement medical plan expenses totaled $87 million, which excludes one-
time charges of approximately $27 million associated with restructuring actions and our pension plan design change. In 2009, these
expenses are expected to increase by approximately $11 million to $98 million as a result of the following factors:
• A decrease in our weighted-average discount rate for our pension expense from 6.70 percent to 6.20 percent, reflecting decreases in
the yields of long-term corporate bonds comprising the yield curve. This
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change in assumption will increase our 2009 pension expense by approximately $18 million.
• Asset losses during 2008 will increase our pension expense by $20 million.
• A decrease in the rate of return on plan asset assumption from 8.5 percent to 8.0 percent, due to revised asset allocation,
historical trends and our projected long-term outlook. This change in assumption will increase our 2009 pension expense
by approximately $8 million.
• The pension design change, which will freeze benefits of certain salaried and non-union hourly employees, will decrease
our 2009 pension expense by approximately $20 million.
• Additional expected contributions to the pension trust will decrease 2009 pension expense by $11 million.
• Other factors, including improved health care claim experience, will decrease our 2009 defined benefit pension and
postretirement medical expenses by approximately $4 million.
In addition, we expect our defined contribution plan expense will increase by $10 million to $15 million due to additional
contributions to this plan for employees impacted by the pension design change.
Sensitivity Analysis
It is unlikely that in any given year the actual rate of return will be the same as the assumed long-term rate of return. The
following table provides a summary for the last three years of actual rates of return versus expected long-term rates of return
for our pension plan assets:
2008 2007 2006

Expected rates of return on plan assets (net of administrative expenses) 8.50% 8.50% 8.50%
Actual rates of return on plan assets (net of administrative expenses) (28.50)% 12.64% 9.74%
Sensitivity of changes in key assumptions for our pension and postretirement plans’ expense in 2009 are as follows:
• Discount rate – A 25 basis point change in the discount rate would increase or decrease the 2009 expense for the pension
and postretirement medical benefit plans by approximately $9 million.
• Expected rate of return on plan assets – A 25 basis point change in the expected return on plan assets would increase or
decrease the 2009 expense for the pension plans by approximately $4 million. The postretirement medical benefit plans
have no expected return on plan assets as they are funded from the general assets of the Company as the payments come
due.
• Contribution to the plan – A $20 million decrease in planned contributions to the plan for 2009 will increase our pension
expense by $1 million.
Funding
We make contributions to the pension trust to provide plan benefits for certain pension plans. Generally, we do not fund
the pension plans if current contributions would not be tax deductible. Effective in 2008, under the Pension Protection Act,
funding requirements are more stringent and require companies to make minimum contributions equal to their service cost
plus amortization of their deficit over a seven year period. Failure to achieve appropriate funded levels will result in
restrictions on employee benefits. Failure to contribute the minimum required contributions will result in excise taxes for the
Company and reporting to the regulatory agencies. During 2008, the Company contributed $85 million to its pension trusts.
The Company expects to contribute an additional $150 million to its pension trusts in 2009, of which approximately
$54 million is to satisfy minimum funding requirements. These amounts exclude $23 million and $35 million of contributions
to the unfunded plans for the years ended December 27, 2008 and December 26, 2009, respectively.
For further information about our pension and postretirement plans see Note 12 in the Notes to Consolidated Financial
Statements.
Casualty Insurance Costs

Due to the nature of our business, we require insurance coverage for certain casualty risks. In the United States, we use a
combination of insurance and self-insurance mechanisms, including a wholly owned captive insurance entity. This captive
entity participates in a reinsurance pool for a portion of our workers’ compensation risk. We provide self-insurance for the
workers’ compensation risk retained by the Company and automobile risks up to $10 million per occurrence, and product
and general liability risks up to $5 million per occurrence. For losses exceeding these self-insurance thresholds, we purchase
casualty insurance from third-party providers.
At December 27, 2008, our net liability for casualty costs was $235 million, of which $70 million was considered short-term in
nature. At December 29, 2007, our net liability for casualty costs was $222 million, of which $65 million was considered
short-term in nature.
Our liability for casualty costs is estimated using individual case-based valuations and statistical analyses and is based
upon historical experience, actuarial assumptions and professional judgment. We do not discount our loss expense
reserves. These estimates are subject to the effects of trends in loss severity and frequency and are subject to a significant
degree of inherent variability. We evaluate these estimates periodically during the year and we believe that they are
appropriate; however, an increase or decrease in the estimates or events outside our control could have a material impact on
reported net income. Accordingly, the ultimate settlement of these costs may vary significantly from the estimates included
in our financial statements.
Income Taxes
Our effective tax rate is based on pre-tax income, statutory tax rates, tax laws and regulations and tax planning strategies
available to us in the various jurisdictions in which we operate. Significant management judgment is required in evaluating
our tax positions and in determining our effective tax rate.
Our deferred tax assets and liabilities reflect our best estimate of the tax benefits and costs we expect to realize in the future.
We establish valuation
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PART II (continued)
allowances to reduce our deferred tax assets to an amount that will more likely than not be realized.
As required under the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting
for Uncertainty in Income Taxes” (“FIN 48”), which we adopted as of the beginning of fiscal year 2007, we recognize the
impact of our tax positions in our financial statements if those positions will more likely than not be sustained on audit,
based on the technical merits of the position. A number of years may elapse before an uncertain tax position for which we
have established a tax reserve is audited and finally resolved, and the number of years for which we have audits that are
open varies depending on the tax jurisdiction. While it is often difficult to predict the final outcome or the timing of the
resolution of an audit, we believe that our reserves for uncertain tax benefits reflect the outcome of tax positions that is more
likely than not to occur. Nevertheless, it is possible that tax authorities may disagree with our tax positions, which could
have a significant impact on our results of operations, financial position and cash flows. The resolution of a tax position
could be recognized as an adjustment to our provision for income taxes and our deferred taxes in the period of resolution,
and may also require a use of cash.
For further information about our income taxes see “Income Tax Expense” in the Results of Operations and Note 13 in the
Notes to Consolidated Financial Statements.
RELATIONSHIP WITH PEPSICO

PepsiCo is a related party due to the nature of our franchise relationship and its ownership interest in our company. More
than 80 percent of our volume is derived from the sale of PepsiCo brands. At December 27, 2008, PepsiCo owned
approximately 33.2 percent of our outstanding common stock and 100 percent of our outstanding class B common stock,
together representing approximately 40.2 percent of the voting power of all classes of our voting stock. In addition, at
December 27, 2008, PepsiCo owned 6.6 percent of the equity of Bottling LLC and 40 percent of PR Beverages Limited (“PR
Beverages”), a consolidated venture for our Russian operations. We fully consolidate the results of Bottling LLC and PR
Beverages and present PepsiCo’s share as minority interest in our Consolidated Financial Statements.
On March 1, 2007, together with PepsiCo, we formed PR Beverages, a venture that enables us to strategically invest in
Russia to accelerate our growth. PBG contributed its business in Russia to PR Beverages, and PepsiCo entered into bottling
agreements with PR Beverages for PepsiCo beverage products sold in Russia on the same terms as in effect for PBG
immediately prior to the venture. PR Beverages has an exclusive license to manufacture and sell PepsiCo concentrate for
such products. Increases in gross profit and operating income resulting from the consolidation of the venture are offset by
minority interest expense related to PepsiCo’s share. Minority interest expense is recorded below operating income.
Our business is conducted primarily under beverage agreements with PepsiCo, including a master bottling agreement, non-
cola bottling agreements, distribution agreements and a master syrup agreement. These agreements provide PepsiCo with
the ability, at its sole discretion, to establish prices, and other terms and conditions for our purchase of concentrates and
finished products from PepsiCo. PepsiCo provides us with bottler funding to support a variety of trade and consumer
programs such as consumer incentives, advertising support, new product support and vending and cooler equipment
placement. The nature and type of programs, as well as the level of funding, vary annually. Additionally, under a shared
services agreement, we obtain various services from PepsiCo, which include services for information technology
maintenance and the procurement of raw materials. We also provide services to PepsiCo, including facility and credit and
collection support.
Because we depend on PepsiCo to provide us with concentrate which we use in the production of CSDs and non-
carbonated beverages, bottler incentives and various services, changes in our relationship with PepsiCo could have a
material adverse effect on our business and financial results.
For further information about our relationship with PepsiCo and its affiliates see Note 15 in the Notes to Consolidated
Financial Statements.
ITEMS AFFECTING COMPARABILITY OF OUR FINANCIAL RESULTS

The year-over-year comparisons of our financial results are affected by the following items included in our reported results:
De ce m be r 27, December 29, December 30,
Incom e/(Expense) 2008 2007 2006
Gross Profit
P R Beverages $ – $ 29 $ –
O pe ratin g In com e
Impairment Charges $ (412) $ – $ –
2008 Restructuring Charges (83) – –
2007 Restructuring Charges (3) (30) –
Asset Disposal Charges (2) (23) –
P R Beverages – 29 –
Total O pe ratin g In com e Im pact $ (500) $ (24) $ –
Ne t In com e
Impairment Charges $ (277) $ – $ –
2008 Restructuring Charges (58) – –
2007 Restructuring Charges (2) (22) –
Asset Disposal Charges (1) (13) –
T ax Audit Settlement – 46 55
T ax Law Changes – 10 10
Total Ne t In com e Im pact $ (338) $ 21 $ 65
Dilu te d Earn ings Pe r S h are
Impairment Charges $ (1.26) $ – $ –
2008 Restructuring Charges (0.26) – –
2007 Restructuring Charges (0.01) (0.09) –
Asset Disposal Charges – (0.06) –
T ax Audit Settlement – 0.20 0.22
T ax Law Changes – 0.04 0.05
Total Dilute d Earn ings Pe r S h are Im pact $ (1.53) $ 0.09 $ 0.27
Items impacting comparability described below are shown in the year the action was initiated.
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2008 Items
Impairment Charges
During the fourth quarter of 2008, the Company recorded a $412 million non-cash impairment charge relating primarily to distribution
rights and brands for the Electropura water business in Mexico. For further information about the impairment charges, see section
entitled “Other Intangible Assets, net and Goodwill,” in our Critical Accounting Policies.
2008 Restructuring Charges

In the fourth quarter of 2008, we announced a restructuring program to enhance the Company’s operating capabilities in each of our
reportable segments. The program’s key objectives are to strengthen customer service and selling effectiveness; simplify decision
making and streamline the organization; drive greater cost productivity to adapt to current macroeconomic challenges; and
rationalize the Company’s supply chain infrastructure. We anticipate the program to be substantially complete by the end of 2009
and the program is expected to result in annual pre-tax savings of approximately $150 million to $160 million.
The Company expects to record pre-tax charges of $140 million to $170 million over the course of the restructuring program, which is
primarily for severance and related benefits, pension and other employee-related costs and other charges, including employee
relocation and asset disposal costs. As part of the restructuring program, approximately 3,150 positions will be eliminated including
750 positions in the U.S. & Canada, 200 positions in Europe and 2,200 positions in Mexico. The Company will also close four
facilities in the U.S., as well as three plants and approximately 30 distribution centers in Mexico. The program will also include the
elimination of approximately 700 routes in Mexico. In addition, the Company will modify its U.S. defined benefit pension plans, which
will generate long-term savings and significantly reduce future financial obligations.
During 2008, the Company incurred pre-tax charges of $83 million, of which $53 million was recorded in the U.S. & Canada segment,
$27 million was recorded in our Europe segment and the remaining $3 million was recorded in the Mexico segment. All of these
charges were recorded in selling, delivery and administrative expenses. During 2008, we eliminated approximately 1,050 positions
across all reportable segments and closed three facilities in the U.S. and two plants in Mexico and eliminated 126 routes in Mexico.
The Company expects about $130 million in pre-tax cash expenditures from these restructuring actions, of which $13 million was paid
in the fourth quarter of 2008, with the balance expected to occur in 2009 and 2010.
For further information about our restructuring charges see Note 16 in the Notes to Consolidated Financial Statements.
2007 Items
In the third quarter of 2007, we announced a restructuring program to realign the Company’s organization to adapt to changes in the
marketplace, improve operating efficiencies and enhance the growth potential of the Company’s product portfolio. We substantially
completed the organizational realignment during the first quarter of 2008, which resulted in the elimination of approximately 800
positions. Annual cost savings from this restructuring program are approximately $30 million. Over the course of the program we
incurred a pre-tax charge of approximately $29 million. During 2007, we recorded pre-tax charges of $26 million, of which $18 million
was recorded in the U.S. & Canada segment and the remaining $8 million was recorded in the Europe segment. During the first half of
2008, we recorded an additional $3 million of pre-tax charges primarily relating to relocation expenses in our U.S. & Canada segment.
We made approximately $24 million of after-tax cash payments associated with these restructuring charges.
In the fourth quarter of 2007, we implemented and completed an additional phase of restructuring actions to improve operating
efficiencies. In addition to the amounts discussed above, we recorded a pre-tax charge of approximately $4 million in selling, delivery
and administrative expenses, primarily related to employee termination costs in Mexico, where an additional 800 positions were
eliminated as a result of this phase of the restructuring. Annual cost savings from this restructuring program are approximately
$7 million.
Asset Disposal Charges

In the fourth quarter of 2007, we adopted a Full Service Vending (“FSV”) Rationalization plan to rationalize our vending asset base in
our U.S. & Canada segment by disposing of older underperforming assets and redeploying certain assets to higher return accounts.
Our FSV business portfolio consists of accounts where we stock and service vending equipment. This plan, which we completed in
the second quarter of 2008, was part of the Company’s broader initiative to improve operating income margins of our FSV business.
Over the course of the FSV Rationalization plan, we incurred a pre-tax asset disposal charge of approximately $25 million, the majority
of which was non-cash. The charge included costs associated with the removal of these assets from service, disposal costs and
redeployment expenses. Of this amount, we recorded a pre-tax charge of approximately $23 million in 2007 with the remainder being
recorded in 2008. This charge is recorded in selling, delivery and administrative expenses.
PR Beverages
For further information about PR Beverages see “Relationship with PepsiCo.”
Tax Audit Settlement
During 2007, PBG recorded a net non-cash benefit of approximately $46 million to income tax expense related to the reversal of
reserves for uncertain tax benefits resulting from the expiration of the statute of limitations on the IRS audit of our U.S. 2001 and 2002
tax returns.
Tax Law Changes

During 2007, tax law changes were enacted in Canada and Mexico, which required us to re-measure our deferred tax assets and
liabilities. The impact of the reduction in tax rates in Canada was partially offset by the tax law changes in Mexico which decreased
our income tax expense on a net basis.
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PART II (continued)
After the impact of minority interest, net income increased approximately $10 million as a result of these tax law changes.
2006 Items
Tax Audit Settlement
During 2006, PBG recorded a tax gain from the reversal of approximately $55 million of tax contingency reserves. These reserves,
which related to the IRS audit of PBG’s 1999-2000 income tax returns, resulted from the expiration of the statute of limitations for this
IRS audit on December 30, 2006.
Tax Law Changes

During 2006, tax law changes were enacted in Canada, Turkey and in various state jurisdictions in the United States which decreased
our income tax expense. After the impact of minority interest, net income increased by approximately $10 million as a result of these
tax law changes.
FINANCIAL PERFORMANCE SUMMARY AND WORLDWIDE FINANCIAL HIGHLIGHTS FOR FISCAL YEAR 2008
De ce m be r 27, December 29, Fiscal Year

2008 2007 % Change
Net Revenues $ 13,796 $ 13,591 2%
Cost of Sales $ 7,586 $ 7,370 3%
Gross Profit $ 6,210 $ 6,221 –%
Selling, Delivery and Administrative Expenses $ 5,149 $ 5,150 –%
Operating Income $ 649 $ 1,071 (39)%
Net Income $ 162 $ 532 (69)%
Diluted Earnings Per Share(1) $ 0.74 $ 2.29 (68)%
(1) P ercentage change for diluted earnings per share is calculated by using earnings per share data that is expanded to the fourth decimal place.
Volume – Decrease of four percent versus the prior year driven by declines in each of our segments due to the soft economic
conditions globally which have negatively impacted the liquid refreshment beverage category.
Net revenues – Increase of two percent versus the prior year is driven by strong increases in net price per case in each of our
segments, partially offset by volume declines. Net price per case increased six percent due primarily to rate increases and includes
one percentage point of growth from foreign currency.
Cost of sales – Increase of three percent versus the prior year due to rising raw material costs partially offset by volume declines.
Cost of sales per case increased seven percent, which includes one percentage point from foreign currency. Increase in costs of
sales per case was driven by plastic bottle components, sweetener and concentrate.
Gross profit – Growth was flat driven by rate increases offset by volume declines and higher raw material costs. Rate gains more
than offset higher raw material costs driving a four percent increase in gross profit per case.
Selling, Delivery and Administrative (“SD&A”) expenses – Flat results versus the prior year include one percentage point of
growth relating to restructuring and asset disposal charges taken in the current and prior year. The remaining one percentage point
improvement in SD&A expenses was driven by lower operating costs due to decreases in volume and continued cost and
productivity improvements across all our segments, partially offset by the negative impact from strengthening foreign currencies
during the first half of the year.
Operating income – Decrease of 39 percent versus the prior year was driven primarily by the impairment, restructuring and asset
disposal charges taken in the current and prior year, which together contributed 41 percentage points to the operating income
decline for the year. The remaining two percentage points of growth in operating income were driven by increases in Europe and the
U.S. & Canada. During 2008, we captured over $170 million of productivity gains reflecting an increased focus on cost containment
across all of our businesses. Savings include productivity from manufacturing and logistics coupled with reduced headcount and
decreased discretionary spending. Operating income growth includes one percentage point of growth from foreign currency
translation.
Net income – Net income for the year of $162 million includes a net after-tax charge of $338 million, or $1.53 per diluted share, from
impairment and asset disposal charges, and restructuring initiatives discussed above. In addition, net income reflects higher interest
and foreign currency transactional expenses versus the prior year. For 2007, net income of $532 million included a net after-tax gain
of $21 million, or $0.09 per diluted share, from tax items, restructuring charges and asset disposal charges.
RESULTS OF OPERATIONS BY SEGMENT

Except where noted, tables and discussion are presented as compared to the prior fiscal year. Growth rates are rounded to the
nearest whole percentage.
Volume
2008 vs. 2007
U.S. &
Worldwide Canada Europe Mexico
Total Volume Change (4)% (4)% (3)% (5)%
U.S. & Canada

In our U.S. & Canada segment, volume decreased four percent due to declining consumer confidence and spending, which has
negatively impacted the liquid refreshment beverage category. Cold-drink and take-home channels both declined by four percent
versus last year. The decline in the take-home channel was driven primarily by our large format stores, which was impacted by the
overall declines in the liquid refreshment beverage category as well as pricing actions taken to improve profitability in our take-home
packages including our unflavored water business. Decline in the cold-drink channel was driven by our foodservice channel,
including restaurants, travel and leisure and workplace, which has been particularly impacted by the economic downturn in the
United States.
Europe
In our Europe segment, volume declined by three percent resulting from a soft volume performance in the second half of the year.
Results reflect overall weak macroeconomic environments throughout Europe with high
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single digit declines in Spain and flat volume growth in Russia. Despite the slowing growth in Russia, we showed improvements in
our energy and tea categories, partially offset by declines in the CSD category. In Spain, there were declines across all channels due
to a weakening economy and our continued focus on improving revenue and gross profit growth.
Mexico
In our Mexico segment, volume decreased five percent driven by slower economic growth coupled with pricing actions taken by the
Company to drive improved margins across its portfolio. This drove single digit declines in our jug water and multi-serve packages,
which was partially offset by one percent improvement in our bottled water package.
2007 vs. 2006
U.S. &
Base volume –% –% 4% (2)%
Acquisitions 1 – – 3
Total Volume Change 1% –% 4% 1%
U.S. & Canada

In our U.S. & Canada segment, volume was unchanged, driven primarily by flat volume in the U.S. Our performance in the
U.S. reflected growth in the take-home channel of approximately one percent, driven primarily by growth in supercenters, wholesale
clubs and mass merchandisers. This growth was offset by a decline of three percent in the cold-drink channel, as a result of declines
in our small format and foodservice channels. From a brand perspective, our U.S. non-carbonated portfolio increased six percent,
reflecting significant increases in Trademark Lipton and water, coupled with strong growth in energy drinks. The growth in our
U.S. non-carbonated portfolio was offset by declines in our CSD portfolio of three percent, driven primarily by declines in Trademark
Pepsi.
In Canada, volume grew two percent, driven primarily by three percent growth in the cold-drink channel and two percent growth in
the take-home channel. From a brand perspective, our non-carbonated portfolio increased 13 percent, reflecting a 12 percent increase
in Trademark Lipton and a five percent increase in water.
Europe
In our Europe segment, overall volume grew four percent. This growth was driven primarily by 17 percent growth in Russia, partially
offset by declines of eight percent in Spain and two percent in Turkey. Volume increases in Russia were strong in all channels, led
by growth of 40 percent in our non-carbonated portfolio.
Mexico
In our Mexico segment, overall volume increased one percent, driven primarily by acquisitions, partially offset by a decrease of two
percent in base business volume. This decrease was primarily attributable to four percent declines in both CSD and jug water
volumes, mitigated by nine percent growth in bottled water and greater than 40 percent growth in non-carbonated beverages.
Net Revenues
2008 vs. 2007
Worldwide U.S. & Canada Europe Mexico

2008 Net revenues $13,796 $10,300 $2,115 $1,381
2007 Net revenues $13,591 $10,336 $1,872 $1,383
% Impact of:
Volume (4)% (4)% (3)% (5)%
Net price per case (rate/mix) 5 4 10 6
Currency translation 1 – 6 (1)
Total Net Revenues Change 2% –% 13% –%
U.S. & Canada

In our U.S. & Canada segment, net revenues were flat versus the prior year driven by net price per case improvement offset by
volume declines. The four percent improvement in net price per case was primarily driven by rate increases taken to offset rising raw
material costs and to improve profitability in our take-home packages including our unflavored water business.
Europe
In our Europe segment, growth in net revenues for the year reflects an increase in net price per case and the positive impact of
foreign currency translation, partially offset by volume declines. Net revenue per case grew in every country in Europe led by
double-digit growth in Russia and Turkey due mainly to rate increases.
Mexico
In our Mexico segment, net revenues were flat versus the prior year reflecting increases in net price per case offset by declines in
volume and the negative impact of foreign currency translation. Growth in net price per case was primarily due to rate increases
taken within our multi-serve CSDs, jugs and bottled water packages.
2007 vs. 2006
U.S. &
2007 Net revenues $13,591 $10,336 $1,872 $1,383
2006 Net revenues $12,730 $ 9,910 $1,534 $1,286
% Impact of:
Volume –% –% 4% (2)%
Acquisitions 1 – – 3
Currency translation 2 – 9 –
Total Net Revenues Change 7% 4% 22% 8%
U.S. & Canada

In our U.S. & Canada segment, four percent growth in net revenues was driven mainly by increases in net price per case as a result
of rate gains. The favorable impact of Canada’s foreign currency translation added slightly less than one percentage point of growth
to the segment’s four percent increase. In the U.S., we achieved revenue growth as a result of a net price per case improvement of
four percent.
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PART II (continued)
Europe
In our Europe segment, 22 percent growth in net revenues reflected exceptionally strong increases in net price per case, strong
volume growth in Russia and the positive impact of foreign currency translation. Growth in net revenues in Europe was mainly
driven by a 44 percent increase in Russia.
Mexico
In our Mexico segment, eight percent growth in net revenues reflected strong increases in net price per case, and the impact of
acquisitions, partially offset by declines in base business volume.
Operating Income
2008 vs. 2007
U.S. &
2008 Operating income $ 649 $886 $101 $(338)
2007 Operating income $1,071 $893 $106 $ 72
% Impact of:
Operations 1% 1% 2% (3)%
Currency translation 1 – 12 2
Impairment charges (38) – (3) (571)
2008 Restructuring charges (8) (6) (25) (4)
2007 Restructuring charges 3 2 8 4
Asset disposal charges 2 2 – –
Total Operating Income Change (39)% (1)% (5)%* (572)%
* Does not add due to rounding to the whole percentage.
U.S. & Canada

In our U.S. & Canada segment, operating income was $886 million in 2008, decreasing one percent versus the prior year.
Restructuring and asset disposal charges taken in the current and prior year together contributed a decrease of two percentage
points to the operating income decline. The remaining one percentage point of growth includes increases in gross profit per case
and lower operating costs, partially offset by lower volume in the United States.
Gross profit per case improved two percent versus the prior year in our U.S. & Canada segment. This includes growth in net revenue
per case, which was offset by a six percent increase in cost of sales per case. Growth in cost of sales per case includes higher
concentrate, sweetener and packaging costs.
SD&A expenses improved three percent versus the prior year in our U.S. & Canada segment due to lower volume and pension costs
and cost productivity initiatives. These productivity initiatives reflect a combination of headcount savings, reduced discretionary
spending and leveraged manufacturing and logistics benefits. Results also include one percentage point of growth due to
restructuring and asset disposal charges taken in the current and prior year.
Europe
In our Europe segment, operating income was $101 million in 2008, decreasing five percent versus the prior year. The net impact of
restructuring and impairment charges contributed 20 percentage points to the decline for the year. The remaining 14 percentage
point increase in operating income growth for the year reflects improvements in gross profit per case and the positive impact from
foreign currency translation, partially offset by higher SD&A expenses.
Gross profit per case in Europe increased 16 percent versus the prior year due to net price per case increases and foreign currency
translation, partially offset by higher sweetener and packaging costs. Foreign currency contributed six percentage points of growth
to gross profit for the year.
SD&A expenses in Europe increased 16 percent due to additional operating costs associated with our investments in Europe
coupled with charges in Russia due to softening volume and weakening economic conditions in the fourth quarter. Foreign currency
contributed five percentage points to SD&A growth. Restructuring charges taken in the current and prior year contributed
approximately two percentage points of growth to SD&A expenses for the year.
Mexico
In our Mexico segment, we had an operating loss of $338 million in 2008 driven primarily by impairment and restructuring charges
taken in the current and prior years. The remaining one percent decrease in operating income growth for the year was driven by
volume declines, partially offset by increases in gross profit per case and the positive impact from foreign currency translation.
Gross profit per case improved six percent versus the prior year driven by improvements in net revenue per case, as we continue to
improve our segment profitability in our jug water and multi-serve packages. Cost of sales per case in Mexico increased by five
percent due primarily to rising packaging costs.
SD&A remained flat versus the prior year driven by lower volume and reduced operating costs as we focus on route productivity,
partially offset by cost inflation.
2007 vs. 2006
U.S. &
2007 Operating income $1,071 $893 $106 $ 72
2006 Operating income $1,017 $878 $ 57 $ 82
% Impact of:
Operations 6% 6% 41% (11)%
Currency translation 1 1 11 1
PR Beverages 3 – 50 –
2007 Restructuring (3) (2) (15) (4)
Asset disposal charges (2) (3) – –
Acquisitions – – – 2
Total Operating Income Change 5% 2% 86%* (13)%*
U.S. & Canada

In our U.S. & Canada segment, operating income increased two percent versus the prior year. Growth in operating income includes a
five
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percentage point negative impact from restructuring and asset disposal charges. The remaining seven percentage point improvement
in operating income growth was the result of increases in gross profit, coupled with cost productivity improvements. These
improvements were partially offset by higher SD&A expenses.
Gross profit for our U.S. & Canada segment increased three percent driven by net price per case improvement, which was partially
offset by a five percent increase in cost of sales. Increases in cost of sales are primarily due to growth in cost of sales per case
resulting from higher concentrate and sweetener costs and a one percentage point negative impact from foreign currency translation.
SD&A in the U.S. & Canada segment increased four percent driven primarily by strategic initiatives in connection with the hydration
category, partially offset by cost productivity improvements.
Europe
In our Europe segment, operating income increased 86 percent versus the prior year. Operating income growth includes
35 percentage points of growth from the consolidation of PR Beverages and restructuring charges taken during the year. The
remaining 52 percentage points of growth reflect strong increases in volume, gross profit per case, cost productivity improvements
and an 11 percentage point positive impact of foreign currency translation. This growth was partially offset by higher operating
expenses in Russia.
Gross profit per case in Europe grew 26 percent versus the prior year. This growth was driven by improvements in net revenue per
case partially offset by a 16 percent increase in cost of sales. Increases in cost of sales reflected a nine percentage point impact from
foreign currency translation, cost per case increases resulting from higher raw material costs, shifts in package mix and strong
volume growth. These increases were partially offset by a three percentage point impact from consolidating PR Beverages in our
financial results.
SD&A costs in Europe increased 25 percent versus the prior year, which includes a nine percentage point negative impact from
foreign currency translation. The remaining increase in SD&A costs is due to higher operating expenses in Russia due to its growth
during the year.
Mexico
In our Mexico segment, operating income decreased 13 percent as a result of declines in base business volume and higher SD&A
expenses. Restructuring charges and the impact of acquisitions together contributed a two percentage point impact to the operating
income decline for the year.
Gross profit per case in Mexico grew five percent versus the prior year due primarily to increases in net revenue per case partially
offset by a nine percent increase in cost of sales. Increase in cost of sales reflects cost per case increases resulting from significantly
higher sweetener costs and the impact of acquisitions, partially offset by base volume declines.
SD&A expenses in Mexico grew eight percent versus the prior year, which includes three percentage points of growth from
acquisitions. The remaining growth is driven by higher operating expenses versus the prior year.
Interest Expense, net

2008 vs. 2007
Net interest expense increased by $16 million largely due to higher average debt balances throughout the year and our treasury rate
locks that were settled in the fourth quarter. These increases were partially offset by lower effective interest rates from interest rate
swaps which convert our fixed-rate debt to variable-rate debt.
2007 vs. 2006

Net interest expense increased by $8 million largely due to higher effective interest rates and additional interest associated with
higher average debt balances throughout the year.
Other Non-Operating Expenses (Income), net

2008 vs. 2007
Other net non-operating expenses were $25 million in 2008 as compared to $6 million of net non-operating income in 2007. Foreign
currency transactional losses in 2008 resulted primarily from our U.S. dollar and euro purchases in Mexico and Russia, reflecting the
impact of the weakening peso and ruble during the second half of 2008.
2007 vs. 2006

Other net non-operating income was $6 million in 2007 as compared to $11 million of net non-operating expenses in 2006. Income in
2007 was primarily a result of foreign exchange gains due to the strength of the Canadian dollar, Turkish lira, Russian ruble and euro.
The expense position in 2006 was primarily a result of foreign exchange losses associated with the devaluation of the Turkish lira.
Minority Interest
2008 vs. 2007
Minority interest primarily reflects PepsiCo’s ownership in Bottling LLC of 6.6 percent, coupled with their 40 percent ownership in
the PR Beverages venture. The $34 million decrease versus the prior year was primarily driven by lower operating results due to the
impairment and restructuring charges taken in the fourth quarter of 2008.
2007 vs. 2006

The $35 million increase in 2007 was primarily driven by PepsiCo’s minority interest in the PR Beverages venture. The remaining
increase was a result of higher operating results in Bottling LLC.
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PART II (continued)
Income Tax Expense

2008 vs. 2007
Our effective tax rates for 2008 and 2007 were 40.7 percent and 25.0 percent, respectively. The increase in our effective tax rate is
primarily due to year-over-year comparability associated with the following:
• In 2008, we had pre-tax impairment charges related primarily to Mexico which resulted in a tax provision benefit of $115 million as
well as pre-tax restructuring charges, which provided a tax provision benefit of $21 million. The net effect of these items increased
our effective tax rate by 7.7 percentage points as most of these charges were in our international jurisdictions, which have lower
effective tax rates.
• In 2007, we had a tax audit settlement which reduced our tax provision by $46 million, coupled with tax law changes that reduced
our deferred income tax provision by $13 million. These items decreased our effective tax rate by 8.3 percentage points.
2007 vs. 2006

Our effective tax rates for 2007 and 2006 were 25.0 percent and 23.4 percent, respectively. The increase in our effective tax rate is
primarily due to year-over-year comparability associated with the reversal of tax contingency reserves resulting from the expiration
of the statute of limitations on the IRS audits in 2007 versus 2006. The tax law changes enacted in 2007 and 2006 that required us to
re-measure our deferred taxes had approximately the same impact in both years.
Diluted Weighted-Average Shares Outstanding

Diluted weighted-average shares outstanding includes the weighted-average number of common shares outstanding plus the
potential dilution that could occur if equity awards from our stock compensation plans were exercised and converted into common
stock.
Our diluted weighted-average shares outstanding for 2008, 2007 and 2006 were 220 million, 233 million and 242 million, respectively.
The decrease in shares outstanding for 2008 reflects the effect of our share repurchase program, which began in October 1999,
partially offset by share issuances from the exercise of equity awards. The amount of shares authorized by the Board of Directors to
be repurchased totals 175 million shares, of which we have repurchased approximately 15 million shares in 2008 and 146 million
shares since the inception of our share repurchase program. For further discussion on our earnings per share calculation see Note 3
in the Notes to Consolidated Financial Statements.
LIQUIDITY AND FINANCIAL CONDITION

Cash Flows
2008 vs. 2007
PBG generated $1,284 million of net cash from operations, a decrease of $153 million from 2007. The decrease in net cash provided by
operations was driven primarily by a change in working capital due largely to timing of accounts payable disbursements and higher
payments relating to promotional activities and pensions.
Net cash used for investments was $1,758 million, an increase of $875 million from 2007. The increase in cash used for investments
primarily reflects $742 million of payments associated with our investment in JSC Lebedyansky and payments for acquisitions of
Lane Affiliated Companies, Inc., Sobol-Aqua JSC and Pepsi-Cola Batavia Bottling Corp., partially offset by lower capital
expenditures.
Net cash provided by financing activities was $850 million, an increase of $1,414 million as compared to a use of cash of $564 million
in 2007. This increase in cash from financing reflects proceeds from the issuance of $1.3 billion in senior notes to partially pre-fund
the February 2009 bond maturity of $1.3 billion. Also reflected in financing activities was $308 million of cash received from PepsiCo
for their proportional share in the acquisition of JSC Lebedyansky and Sobol-Aqua JSC by PR Beverages.
2007 vs. 2006

Net cash provided by operations increased by $209 million to $1,437 million in 2007. Increases in net cash provided by operations
were driven by higher cash profits and favorable working capital.
Net cash used for investments increased by $152 million to $883 million, driven by higher capital spending due to strategic
investments in the U.S. and Russia, including the building of new plants in Las Vegas and Moscow and additional dedicated water
lines in the U.S.
Net cash used for financing increased by $193 million to $564 million, driven primarily by lower net proceeds from long-term debt,
partially offset by lower share repurchases in 2007.
Capital Expenditures
Our business requires substantial infrastructure investments to maintain our existing level of operations and to fund investments
targeted at growing our business. Capital expenditures included in our cash flows from investing activities totaled $760 million,
$854 million and $725 million during 2008, 2007 and 2006, respectively. Capital expenditures decreased $94 million in 2008 as a result
of lower investments due to the economic slowdown, primarily in the United States.
Liquidity and Capital Resources

Our principal sources of cash include cash from our operating activities and the issuance of debt and bank borrowings. We believe
that these cash inflows will be sufficient for the foreseeable future to fund capital expenditures, benefit plan contributions,
acquisitions, share repurchases, dividends and working capital requirements.
The recent and extraordinary disruption in the world credit markets in 2008 had a significant adverse impact on a number of financial
institutions. At this point in time, the Company’s liquidity has not been materially impacted by the current credit environment and
management does not expect that it will be materially impacted in the near-future. Management will continue to closely monitor the
Company’s liquidity and the credit markets. However, management cannot predict with any certainty the impact to the Company of
any further disruption in the credit environment.
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Acquisitions and Investments

We completed a joint acquisition with PepsiCo of Russia’s leading branded juice company JSC Lebedyansky (“Lebedyansky”) for
approximately $1.8 billion. Lebedyansky was acquired 58.3 percent by PepsiCo and 41.7 percent by PR Beverages, our Russian
venture with PepsiCo. We have recorded an equity investment for PR Beverages’ share in Lebedyansky. In addition, we have
recorded minority interest for PepsiCo’s proportional contribution to PR Beverages relating to Lebedyansky.
During 2008, we acquired Pepsi-Cola Batavia Bottling Corp and Lane Affiliated Companies, Inc. (“Lane”), Pepsi-Cola franchise
bottlers which serve certain New York counties and portions of Colorado, Arizona and New Mexico. In addition we acquired Sobol-
Aqua JSC (“Sobol”), a company that manufactures Sobol brands and co-packs various Pepsi products in Siberia and Eastern Russia.
The total cost of acquisitions during 2008 was approximately $279 million.
Long-Term Debt Activities

During the fourth quarter, we issued $1.3 billion in senior notes with a coupon rate of 6.95 percent, maturing in 2014. A portion of
this debt was used to repay our senior notes due in 2009 at their maturity on February 17, 2009. In the interim, these proceeds were
placed in short-term investments. In addition, we used a portion of the proceeds to finance the Lane acquisition and repay short-
term commercial paper debt, a portion of which was used to finance our acquisition of Lebedyansky.
In addition, during the first quarter of 2009 we issued an additional $750 million in senior notes, with a coupon rate of 5.125 percent,
maturing in 2019. The net proceeds of the offering, together with a portion of the proceeds from the offering of our senior notes
issued in the fourth quarter of 2008, were used to repay our senior notes due in 2009, at their scheduled maturity on February 17,
2009. Any excess proceeds of this offering will be used for general corporate purposes. The next significant scheduled debt maturity
is not until 2012.
Short-Term Debt Activities

We have a committed revolving credit facility of $1.1 billion and an uncommitted credit facility of $500 million. Both of these credit
facilities are guaranteed by Bottling LLC and are used to support our $1.2 billion commercial paper program and working capital
requirements. At December 27, 2008, we had no outstanding commercial paper. At December 29, 2007, we had $50 million in
outstanding commercial paper with a weighted-average interest rate of 5.3 percent.
In addition to the revolving credit facilities discussed above, we had available bank credit lines of approximately $772 million at
December 27, 2008, of which the majority was uncommitted. These lines were primarily used to support the general operating needs
of our international locations. As of year-end 2008, we had $103 million outstanding under these lines of credit at a weighted-average
interest rate of 10.0 percent. As of year-end 2007, we had available short-term bank credit lines of approximately $748 million, of
which $190 million was outstanding at a weighted-average interest rate of 5.3 percent.
Our peak borrowing timeframe varies with our working capital requirements and the seasonality of our business. Additionally,
throughout the year, we may have further short-term borrowing requirements driven by other operational needs of our business.
During 2008, borrowings from our commercial paper program in the U.S. peaked at $702 million. Borrowings from our line of credit
facilities peaked at $484 million, reflecting payments for working capital requirements.
Debt Covenants and Credit Ratings

Certain of our senior notes have redemption features and non-financial covenants that will, among other things, limit our ability to
create or assume liens, enter into sale and lease-back transactions, engage in mergers or consolidations and transfer or lease all or
substantially all of our assets. Additionally, certain of our credit facilities and senior notes have financial covenants. These
requirements are not, and it is not anticipated they will become, restrictive to our liquidity or capital resources. We are in compliance
with all debt covenants. For a discussion of our covenants, see Note 9 in the Notes to Consolidated Financial Statements.
Our credit ratings are periodically reviewed by rating agencies. Currently our long-term ratings from Moody’s and Standard and
Poor’s are A2 and A, respectively. Changes in our operating results or financial position could impact the ratings assigned by the
various agencies resulting in higher or lower borrowing costs.
Pensions
During 2009, we expect to contribute $185 million to fund our U.S. pension and postretirement plans. For further information about
our pension and postretirement plan funding see section entitled “Pension and Postretirement Medical Benefit Plans” in our Critical
Accounting Policies.
Dividends
On March 27, 2008, the Company’s Board of Directors approved an increase in the Company’s quarterly dividend from $0.14 to $0.17
per share on the outstanding common stock of the Company. This action resulted in a 21 percent increase in our quarterly dividend.
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PART II (continued)
Contractual Obligations
The following table summarizes our contractual obligations as of December 27, 2008:
P ayments Due by P eriod
2010- 2012- 2014 and
Contractual Obligations T otal 2009 2011 2013 beyond
Long-term debt obligations(1) $ 6,087 $ 1,301 $ 36 $ 1,400 $ 3,350
Capital lease obligations(2) 9 4 3 – 2
Operating leases(2) 279 58 69 34 118
Interest obligations(3) 2,638 307 560 516 1,255
Purchase obligations:
Raw material obligations(4) 821 718 100 – 3
Capital expenditure obligations(5) 33 33 – – –
Other obligations(6) 325 135 114 38 38
Other long-term liabilities(7) 23 5 8 6 4
$10,215 $ 2,561 $ 890 $ 1,994 $ 4,770
(1) See Note 9 in the Notes to Consolidated Financial Statements for additional information relating to our long-term debt obligations.
(2) Lease obligation balances include imputed interest. See Note 10 in the Notes to Consolidated Financial Statements for additional information relating
to our lease obligations.
(3) Represents interest payment obligations related to our long-term fixed-rate debt as specified in the applicable debt agreements. A portion of our long-
term debt has variable interest rates due to either existing swap agreements or interest arrangements. We have estimated our variable interest
payment obligations by using the interest rate forward curve where practical. Given uncertainties in future interest rates we have not included the
beneficial impact of interest rate swaps after the year 2010.
(4) Represents obligations to purchase raw materials pursuant to contracts entered into by P epsiCo on our behalf and international agreements to
purchase raw materials.
(5) Represents commitments to suppliers under capital expenditure related contracts or purchase orders.
(6) Represents legally binding agreements to purchase goods or services that specify all significant terms, including: fixed or minimum quantities, price
arrangements and timing of payments. If applicable, penalty, notice, or minimum purchase amount is used in the calculation. Balances also include
non-cancelable customer contracts for sports marketing arrangements.
(7) P rimarily represents non-compete contracts that resulted from business acquisitions. T he non-current portion of unrecognized tax benefits recorded
on the balance sheet as of December 27, 2008 is not included in the table. T here was no current portion of unrecognized tax benefits as of
December 27, 2008. For additional information about our income taxes see Note 13 in the Notes to Consolidated Financial Statements.
This table excludes our pension and postretirement liabilities recorded on the balance sheet. For a discussion of our future pension
contributions, as well as expected pension and postretirement benefit payments see Note 12 in the Notes to Consolidated Financial
Statements.
Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our
results of operations, financial condition, liquidity, capital expenditures or capital resources.
MARKET RISKS AND CAUTIONARY STATEMENTS

Quantitative and Qualitative Disclosures
about Market Risk
In the normal course of business, our financial position is routinely subject to a variety of risks. These risks include changes in the
price of commodities purchased and used in our business, interest rates on outstanding debt and currency movements impacting
our non-U.S. dollar denominated assets and liabilities. We are also subject to the risks associated with the business environment in
which we operate. We regularly assess all of these risks and have strategies in place to reduce the adverse effects of these
exposures.
Our objective in managing our exposure to fluctuations in commodity prices, interest rates and foreign currency exchange rates is to
minimize the volatility of earnings and cash flows associated with changes in the applicable rates and prices. To achieve this
objective, we have derivative instruments to hedge against the risk of adverse movements in commodity prices, interest rates and
foreign currency. We monitor our counterparty credit risk on an ongoing basis. Our corporate policy prohibits the use of derivative
instruments for trading or speculative purposes, and we have procedures in place to monitor and control their use. See Note 11 in
the Notes to Consolidated Financial Statements for additional information relating to our derivative instruments.
A sensitivity analysis has been prepared to determine the effects that market risk exposures may have on our financial instruments.
These sensitivity analyses evaluate the effect of hypothetical changes in commodity prices, interest rates and foreign currency
exchange rates and changes in our stock price on our unfunded deferred compensation liability. Information provided by these
sensitivity analyses does not necessarily represent the actual changes in fair value that we would incur under normal market
conditions because, due to practical limitations, all variables other than the specific market risk factor were held constant. As a
result, the reported changes in the values of some financial instruments that are affected by the sensitivity analyses are not matched
with the offsetting changes in the values of the items that those instruments are designed to finance or hedge.
Commodity Price Risk

We are subject to market risks with respect to commodities because our ability to recover increased costs through higher pricing
may be limited by the competitive business environment in which we operate. We use future and option contracts to hedge the risk
of adverse movements in commodity
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prices related primarily to anticipated purchases of raw materials and energy used in our operations. With respect to commodity
price risk, we currently have various contracts outstanding for commodity purchases in 2009 and 2010, which establish our purchase
prices within defined ranges. We estimate that a 10 percent decrease in commodity prices with all other variables held constant
would have resulted in a change in the fair value of our financial instruments of $14 million and $7 million at December 27, 2008 and
December 29, 2007, respectively.
Interest Rate Risk

Interest rate risk is inherent to both fixed- and floating-rate debt. We effectively converted $1.1 billion of our senior notes to floating-
rate debt through the use of interest rate swaps. Changes in interest rates on our interest rate swaps and other variable debt would
change our interest expense. We estimate that a 50 basis point increase in interest rates on our variable rate debt and cash
equivalents, with all other variables held constant, would have resulted in an increase to net interest expense of $1 million and
$2 million in fiscal years 2008 and 2007, respectively.
Foreign Currency Exchange Rate Risk

In 2008, approximately 34 percent of our net revenues were generated from outside the United States. Social, economic and political
conditions in these international markets may adversely affect our results of operations, financial condition and cash flows. The
overall risks to our international businesses include changes in foreign governmental policies and other social, political or economic
developments. These developments may lead to new product pricing, tax or other policies and monetary fluctuations that may
adversely impact our business. In addition, our results of operations and the value of our foreign assets and liabilities are affected
by fluctuations in foreign currency exchange rates.
As currency exchange rates change, translation of the statements of operations of our businesses outside the U.S. into U.S. dollars
affects year-over-year comparability. We generally have not hedged against these types of currency risks because cash flows from
our international operations have been reinvested locally. We have foreign currency transactional risks in certain of our international
territories for transactions that are denominated in currencies that are different from their functional currency. We have entered into
forward exchange contracts to hedge portions of our forecasted U.S. dollar cash flows in these international territories. A 10 percent
weaker U.S. dollar against the applicable foreign currency, with all other variables held constant, would result in a change in the fair
value of these contracts of $5 million and $6 million at December 27, 2008 and December 29, 2007, respectively.
In 2007, we entered into forward exchange contracts to economically hedge a portion of intercompany receivable balances that are
denominated in Mexican pesos. A 10 percent weaker U.S. dollar versus the Mexican peso, with all other variables held constant,
would result in a change of $4 million and $9 million in the fair value of these contracts at December 27, 2008 and December 29, 2007,
respectively.
Unfunded Deferred Compensation Liability

Our unfunded deferred compensation liability is subject to changes in our stock price, as well as price changes in certain other
equity and fixed-income investments. Employee investment elections include PBG stock and a variety of other equity and fixed-
income investment options. Since the plan is unfunded, employees’ deferred compensation amounts are not directly invested in
these investment vehicles. Instead, we track the performance of each employee’s investment selections and adjust the employee’s
deferred compensation account accordingly. The adjustments to the employees’ accounts increases or decreases the deferred
compensation liability reflected on our Consolidated Balance Sheet with an offsetting increase or decrease to our selling, delivery
and administrative expenses in our Consolidated Statements of Operations. We use prepaid forward contracts to hedge the portion
of our deferred compensation liability that is based on our stock price. Therefore, changes in compensation expense as a result of
changes in our stock price are substantially offset by the changes in the fair value of these contracts. We estimate that a 10 percent
unfavorable change in the year-end stock price would have reduced the fair value from these forward contract commitments by
$1 million and $2 million at December 27, 2008 and December 29, 2007, respectively.
Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this annual report on Form 10-K and
in the annual report to the shareholders may constitute forward-looking statements as defined by the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on currently available competitive, financial and economic data and
our operating plans. These statements involve a number of risks, uncertainties and other factors that could cause actual results to be
materially different. Among the events and uncertainties that could adversely affect future periods are:
• changes in our relationship with PepsiCo;
• PepsiCo’s ability to affect matters concerning us through its equity ownership of PBG, representation on our Board and approval
rights under our Master Bottling Agreement;
• material changes in expected levels of bottler incentive payments from PepsiCo;
• restrictions imposed by PepsiCo on our raw material suppliers that could increase our costs;
• material changes from expectations in the cost or availability of ingredients, packaging materials, other raw materials or energy;
• limitations on the availability of water or obtaining water rights;
• an inability to achieve strategic business plan targets that could result in a non-cash intangible asset impairment charge;
• an inability to achieve cost savings;
• material changes in capital investment for infrastructure and an inability to achieve the expected timing for returns on cold-drink
equipment and related infrastructure expenditures;
• decreased demand for our product resulting from changes in consumers’ preferences;
• an inability to achieve volume growth through product and packaging initiatives;
• impact of competitive activities on our business;
• impact of customer consolidations on our business;
• unfavorable weather conditions in our markets;
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PART II (continued)
• an inability to successfully integrate acquired businesses or to meet projections for performance in newly acquired territories;
• loss of business from a significant customer;
• loss of key members of management;
• failure or inability to comply with laws and regulations;
• litigation, other claims and negative publicity relating to alleged unhealthy properties or environmental impact of our products;
• changes in laws and regulations governing the manufacture and sale of food and beverages, the environment, transportation,
employee safety, labor and government contracts;
• changes in accounting standards and taxation requirements (including unfavorable outcomes from audits performed by various tax
authorities);
• an increase in costs of pension, medical and other employee benefit costs;
• unfavorable market performance of assets in our pension plans or material changes in key assumptions used to calculate the
liability of our pension plans, such as discount rate;
• unforeseen social, economic and political changes;
• possible recalls of our products;
• interruptions of operations due to labor disagreements;
• limitations on our ability to invest in our business as a result of our repayment obligations under our existing indebtedness;
• changes in our debt ratings, an increase in financing costs or limitations on our ability to obtain credit; and
• material changes in expected interest and currency exchange rates.
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CONSOLIDATED STATEMENTS OF OPERATIONS
Fiscal years ended December 27, 2008, December 29, 2007 and December 30, 2006
in millions, except per share data 2008 2007 2006
Net Revenues $13,796 $13,591 $12,730
Cost of sales 7,586 7,370 6,900
Gross Profit 6,210 6,221 5,830

Selling, delivery and administrative expenses 5,149 5,150 4,813
Impairment charges 412 – –
Operating Income 649 1,071 1,017

Interest expense, net 290 274 266
Other non-operating expenses (income), net 25 (6) 11
Minority interest 60 94 59
Income Before Income Taxes 274 709 681

Income tax expense 112 177 159
Net Income $ 162 $ 532 $ 522
Basic Earnings per Share $ 0.75 $ 2.35 $ 2.22
Weighted-average shares outstanding 216 226 236
Diluted Earnings per Share $ 0.74 $ 2.29 $ 2.16
Weighted-average shares outstanding 220 233 242
Dividends declared per common share $ 0.65 $ 0.53 $ 0.41
See accompanying notes to Consolidated Financial Statements.
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PART II (continued)
CONSOLIDATED STATEMENTS OF CASH FLOWS
in millions 2008 2007 2006
Cash Flows – Operations
Net income $ 162 $ 532 $ 522
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization 673 669 649
Deferred income taxes (47) (42) (61)
Stock-based compensation 56 62 65
Impairment charges 412 – –
Defined benefit pension and postretirement expenses 114 121 119
Minority interest expense 60 94 59
Casualty self-insurance expense 87 90 80
Other non-cash charges and credits 95 79 67
Changes in operating working capital, excluding effects of acquisitions:
Accounts receivable, net 40 (110) (120)
Inventories 3 (19) (57)
Prepaid expenses and other current assets 10 (17) 1
Accounts payable and other current liabilities (134) 185 88
Income taxes payable 14 9 (2)
Net change in operating working capital (67) 48 (90)
Casualty insurance payments (79) (70) (67)
Pension contributions to funded plans (85) (70) (68)
Other, net (97) (76) (47)
Net Cash Provided by Operations 1,284 1,437 1,228
Cash Flows – Investments
Capital expenditures (760) (854) (725)
Acquisitions, net of cash acquired (279) (49) (33)
Investments in noncontrolled affiliates (742) – –
Proceeds from sale of property, plant and equipment 24 14 18
Other investing activities, net (1) 6 9
Net Cash Used for Investments (1,758) (883) (731)
Cash Flows – Financing
Short-term borrowings, net – three months or less (108) (106) (107)
Proceeds from short-term borrowings – more than three months 117 167 96
Payments of short-term borrowings – more than three months (91) (211) (74)
Proceeds from issuances of long-term debt 1,290 24 793
Payments of long-term debt (10) (42) (604)
Minority interest distribution (73) (17) (19)
Dividends paid (135) (113) (90)
Excess tax benefit from the exercise of equity awards 2 14 19
Proceeds from the exercise of stock options 42 159 168
Share repurchases (489) (439) (553)
Contributions from minority interest holder 308 – –
Other financing activities (3) – –
Net Cash Provided by (Used for) Financing 850 (564) (371)
Effect of Exchange Rate Changes on Cash and Cash Equivalents (57) 28 1
Net Increase in Cash and Cash Equivalents 319 18 127
Cash and Cash Equivalents – Beginning of Year 647 629 502
Cash and Cash Equivalents – End of Year $ 966 $ 647 $ 629
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CONSOLIDATED BALANCE SHEETS
December 27, 2008 and December 29, 2007

in millions, except per share data 2008 2007
ASSETS
Current Assets
Cash and cash equivalents $ 966 $ 647
Accounts receivable, net 1,371 1,520
Inventories 528 577
Prepaid expenses and other current assets 276 342
Total Current Assets 3,141 3,086
Property, plant and equipment, net 3,882 4,080
Other intangible assets, net 3,751 4,181
Goodwill 1,434 1,533
Investments in noncontrolled affiliates 619 –
Other assets 155 235
Total Assets $12,982 $13,115
LIABILITIES AND SHAREHOLDERS’ EQUITY

Current Liabilities
Accounts payable and other current liabilities $ 1,675 $ 1,968
Short-term borrowings 103 240
Current maturities of long-term debt 1,305 7
Total Current Liabilities 3,083 2,215
Long-term debt 4,784 4,770
Other liabilities 1,658 1,186
Deferred income taxes 966 1,356
Minority interest 1,148 973
Total Liabilities 11,639 10,500
Shareholders’ Equity
Common stock, par value $0.01 per share:
authorized 900 shares, issued 310 shares 3 3
Additional paid-in capital 1,851 1,805
Retained earnings 3,130 3,124
Accumulated other comprehensive loss (938) (48)
Treasury stock: 99 shares and 86 shares in 2008 and 2007, respectively, at cost (2,703) (2,269)
Total Shareholders’ Equity 1,343 2,615
Total Liabilities and Shareholders’ Equity $12,982 $13,115
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PART II (continued)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Accumulated
Other
Common Additional Deferred Retained Comprehensive T reasury Comprehensive
in millions, except per share data Stock P aid-In Capital Compensation Earnings Loss Stock T otal Income (Loss)
Balance at December 31,
2005 $ 3 $ 1,709 $ (14) $2,283 $ (262) $(1,676) $2,043
Comprehensive income:
Net income – – – 522 – – 522 $ 522
Net currency translation
adjustment – – – – 25 – 25 25
Cash flow hedge adjustment
(net of tax and minority
interest of $(5)) – – – – 8 – 8 8
M inimum pension liability
adjustment (net of tax and
minority interest of
$(21)) – – – – 27 – 27 27
Total comprehensive income $ 582
FAS 158 – pension liability
minority interest of $124) – – – – (159) – (159)
Stock option exercises: 9 shares – (44) – – – 212 168
Tax benefit – equity awards – 35 – – – – 35
Share repurchases: 18 shares – – – – – (553) (553)
Stock compensation – 51 14 – – – 65
Cash dividends declared on
common stock (per share:
$0.41) – – – (97) – – (97)
2006 3 1,751 – 2,708 (361) (2,017) 2,084
Net income – – – 532 – – 532 $ 532
adjustment – – – – 220 – 220 220
interest of $(1)) – – – – (1) – (1) (1)
Pension and postretirement
medical benefit plans
minority interest of
$(72)) – – – – 94 – 94 94
Total comprehensive income $ 845
Stock option exercises: 7 shares – (28) – – – 187 159
Tax benefit – equity awards – 22 – – – – 22
Stock compensation – 60 – – – – 60
Impact from adopting FIN 48 – – – 5 – – 5
$0.53) – – – (121) – – (121)
2007 3 1,805 – 3,124 (48) (2,269) 2,615
Comprehensive income (loss):
Net income – – – 162 – – 162 $ 162
adjustment – – – – (554) – (554) (554)
interest of $28) – – – – (33) – (33) (33)
Pension and postretirement
medical benefit plans
adjustment (net of tax
and minority interest of
$242) – – – – (322) – (322) (322)
Total comprehensive loss $ (747)
FAS 158 – measurement date
minority interest of $(5)) – – – (16) 19 – 3
Equity awards exercises:
2 shares – (13) – – – 55 42
Tax benefit and withholding
tax – equity awards – 2 – – – – 2
Stock compensation – 57 – – – – 57
$0.65) – – – (140) – – (140)
2008 $ 3 $ 1,851 $ – $3,130 $ (938) $(2,703) $1,343
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
T abular dollars in millions, except per share data
Note 1 – Basis of Presentation

The Pepsi Bottling Group, Inc. is the world’s largest manufacturer, seller and distributor of Pepsi-Cola beverages. We have the
exclusive right to manufacture, sell and distribute Pepsi-Cola beverages in all or a portion of the U.S., Mexico, Canada, Spain, Russia,
Greece and Turkey. When used in these Consolidated Financial Statements, “PBG,” “we,” “our,” “us” and the “Company” each
refers to The Pepsi Bottling Group, Inc. and, where appropriate, to Bottling Group, LLC (“Bottling LLC”), our principal operating
subsidiary.
At December 27, 2008, PepsiCo, Inc. (“PepsiCo”) owned 70,166,458 shares of our common stock, consisting of 70,066,458 shares of
common stock and all 100,000 authorized shares of Class B common stock. This represents approximately 33.2 percent of our
outstanding common stock and 100 percent of our outstanding Class B common stock, together representing 40.2 percent of the
voting power of all classes of our voting stock. In addition, PepsiCo owns approximately 6.6 percent of the equity of Bottling LLC
and 40 percent of PR Beverages Limited (“PR Beverages”), a consolidated venture for our Russian operations, which was formed on
March 1, 2007.
The common stock and Class B common stock both have a par value of $0.01 per share and are substantially identical, except for
voting rights. Holders of our common stock are entitled to one vote per share and holders of our Class B common stock are entitled
to 250 votes per share. Each share of Class B common stock is convertible into one share of common stock. Holders of our common
stock and holders of our Class B common stock share equally on a per-share basis in any dividend distributions.
Our Board of Directors has the authority to provide for the issuance of up to 20,000,000 shares of preferred stock, and to determine
the price and terms, including, but not limited to, preferences and voting rights of those shares without stockholder approval. At
December 27, 2008, there was no preferred stock outstanding.
Note 2 – Summary of Significant Accounting Policies

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United
States of America (“U.S. GAAP”) often requires management to make judgments, estimates and assumptions that affect a number of
amounts included in our financial statements and related disclosures. We evaluate our estimates on an on-going basis using our
historical experience as well as other factors we believe appropriate under the circumstances, such as current economic conditions,
and adjust or revise our estimates as circumstances change. As future events and their effect cannot be determined with precision,
actual results may differ from these estimates.
Basis of Consolidation – We consolidate in our financial statements entities in which we have a controlling financial interest, as well
as variable interest entities where we are the primary beneficiary. Minority interest in earnings and ownership has been recorded for
the percentage of these entities not owned by PBG. We have eliminated all intercompany accounts and transactions in
consolidation.
Fiscal Year – Our U.S. and Canadian operations report using a fiscal year that consists of 52 weeks, ending on the last Saturday in
December. Every five or six years a 53rd week is added. Fiscal years 2008, 2007 and 2006 consisted of 52 weeks. Our remaining
countries report on a calendar-year basis. Accordingly, we recognize our quarterly business results as outlined below:
Quarter U.S. & Canada Mexico & Europe
First Quarter 12 weeks January and February
Second Quarter 12 weeks March, April and May
Third Quarter 12 weeks June, July and August
Fourth Quarter 16 weeks September, October, November and
December
Revenue Recognition – Revenue, net of sales returns, is recognized when our products are delivered to customers in accordance
with the written sales terms. We offer certain sales incentives on a local and national level through various customer trade
agreements designed to enhance the growth of our revenue. Customer trade agreements are accounted for as a reduction to our
revenues.
Customer trade agreements with our customers include payments for in-store displays, volume rebates, featured advertising and
other growth incentives. A number of our customer trade agreements are based on quarterly and annual targets that generally do not
exceed one year. Amounts recognized in our financial statements are based on amounts estimated to be paid to our customers
depending upon current performance, historical experience, forecasted volume and other performance criteria.
Advertising and Marketing Costs – We are involved in a variety of programs to promote our products. We include advertising and
marketing costs in selling, delivery and administrative expenses. Advertising and marketing costs were $437 million, $424 million and
$403 million in 2008, 2007 and 2006, respectively, before bottler incentives received from PepsiCo and other brand owners.
Bottler Incentives – PepsiCo and other brand owners, at their discretion, provide us with various forms of bottler incentives. These
incentives cover a variety of initiatives, including direct marketplace support and advertising support. We classify bottler incentives
as follows:
• Direct marketplace support represents PepsiCo’s and other brand owners’ agreed-upon funding to assist us in offering sales and
promotional discounts to retailers and is generally recorded as an adjustment to cost of sales. If the direct marketplace support is a
reimbursement for a specific, incremental and identifiable program, the funding is recorded as an offset to the cost of the program
either in net revenues or selling, delivery and administrative expenses.
• Advertising support represents agreed-upon funding to assist us with the cost of media time and promotional materials and is
generally recorded as an adjustment to cost of sales. Advertising support that represents reimbursement for a specific, incremental
and identifiable media cost, is recorded as a reduction to advertising and marketing expenses within selling, delivery and
administrative expenses.
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PART II (continued)
Total bottler incentives recognized as adjustments to net revenues, cost of sales and selling, delivery and administrative expenses in
our Consolidated Statements of Operations were as follows:
Fiscal Year Ended
2008 2007 2006
Net revenues $ 93 $ 66 $ 67
Cost of sales 586 626 612
Selling, delivery and administrative expenses 57 67 70
Total bottler incentives $736 $759 $749
Share-Based Compensation – The Company grants a combination of stock option awards and restricted stock units to our middle
and senior management and our Board of Directors. See Note 4 for further discussion on our share-based compensation.
Shipping and Handling Costs – Our shipping and handling costs reported in the Consolidated Statements of Operations are
recorded primarily within selling, delivery and administrative expenses. Such costs recorded within selling, delivery and
administrative expenses totaled $1.7 billion in 2008, 2007 and 2006.
Foreign Currency Gains and Losses and Currency Translation – We translate the balance sheets of our foreign subsidiaries at the
exchange rates in effect at the balance sheet date, while we translate the statements of operations at the average rates of exchange
during the year. The resulting translation adjustments of our foreign subsidiaries are included in accumulated other comprehensive
loss, net of minority interest on our Consolidated Balance Sheets. Transactional gains and losses arising from the impact of currency
exchange rate fluctuations on transactions in foreign currency that is different from the local functional currency are included in
other non-operating expenses (income), net in our Consolidated Statements of Operations.
Pension and Postretirement Medical Benefit Plans – We sponsor pension and other postretirement medical benefit plans in various
forms in the U.S. and other similar plans in our international locations, covering employees who meet specified eligibility
requirements.
On December 30, 2006, we adopted the funded status provision of Statement of Financial Accounting Standards (“SFAS”) No. 158,
“Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (“SFAS 158”), which requires that we
recognize the overfunded or underfunded status of each of the pension and other postretirement plans. In addition, on December 30,
2007, we adopted the measurement date provisions of SFAS 158, which requires that our assumptions used to measure our annual
pension and postretirement medical expenses be determined as of the year-end balance sheet date and all plan assets and liabilities
be reported as of that date. For fiscal years ended 2007 and prior, the majority of the pension and other postretirement plans used a
September 30 measurement date and all plan assets and obligations were generally reported as of that date. As part of measuring the
plan assets and benefit obligations on December 30, 2007, we adjusted our opening balances of retained earnings and accumulated
other comprehensive loss for the change in net periodic benefit cost and fair value, respectively, from the previously used
September 30 measurement date. The adoption of the measurement date provisions resulted in a net decrease in the pension and
other postretirement medical benefit plans liability of $9 million, a net decrease in retained earnings of $16 million, net of minority
interest of $2 million and taxes of $9 million and a net decrease in accumulated other comprehensive loss of $19 million, net of
minority interest of $2 million and taxes of $14 million. There was no impact on our results of operations.
The determination of pension and postretirement medical plan obligations and related expenses requires the use of assumptions to
estimate the amount of benefits that employees earn while working, as well as the present value of those benefit obligations.
Significant assumptions include discount rate; expected rate of return on plan assets; certain employee-related factors such as
retirement age, mortality, and turnover; rate of salary increases for plans where benefits are based on earnings; and for retiree
medical plans, health care cost trend rates. We evaluate these assumptions on an annual basis at each measurement date based
upon historical experience of the plans and management’s best judgment regarding future expectations.
Differences between the assumed rate of return and actual return of plan assets are deferred in accumulated other comprehensive
loss in equity and amortized to earnings utilizing the market-related value method. Under this method, differences between the
assumed rate of return and actual rate of return from any one year will be recognized over a five year period in the market related
value.
Other gains and losses resulting from changes in actuarial assumptions and from differences between assumed and actual
experience are determined at each measurement date and deferred in accumulated other comprehensive loss in equity. To the extent
the amount of all unrecognized gains and losses exceeds 10 percent of the larger of the benefit obligation or plan assets, such
amount is amortized to earnings over the average remaining service period of active participants.
The cost or benefit from benefit plan changes is also deferred in accumulated other comprehensive loss in equity and amortized to
earnings on a straight-line basis over the average remaining service period of the employees expected to receive benefits.
See Note 12 for further discussion on our pension and postretirement medical benefit plans.
Income Taxes – Our effective tax rate is based on pre-tax income, statutory tax rates, tax laws and regulations and tax planning
strategies available to us in the various jurisdictions in which we operate.
Our deferred tax assets and liabilities reflect our best estimate of the tax benefits and costs we expect to realize in the future. We
establish valuation allowances to reduce our deferred tax assets to an amount that will more likely than not be realized.
As required under the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes” (“FIN 48”), which we adopted as of the beginning of fiscal year 2007, we recognize the impact of our
tax positions in our financial statements if those positions will more likely than not be sustained on audit, based on the technical
merit of the position.
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Significant management judgment is required in evaluating our tax positions and in determining our effective tax rate.
See Note 13 for further discussion on our income taxes.
Earnings Per Share – We compute basic earnings per share by dividing net income by the weighted-average number of common
shares outstanding for the period. Diluted earnings per share reflect the potential dilution that could occur if stock options or other
equity awards from stock compensation plans were exercised and converted into common stock that would then participate in net
income.
Cash and Cash Equivalents – Cash and cash equivalents include all highly liquid investments with original maturities not exceeding
three months at the time of purchase. The fair value of our cash and cash equivalents approximate the amounts shown on our
Consolidated Balance Sheets due to their short-term nature.
Allowance for Doubtful Accounts – A portion of our accounts receivable will not be collected due to non-payment, bankruptcies
and sales returns. Our accounting policy for the provision for doubtful accounts requires reserving an amount based on the
evaluation of the aging of accounts receivable, sales return trend analysis, detailed analysis of high-risk customers’ accounts, and
the overall market and economic conditions of our customers.
Inventories – We value our inventories at the lower of cost or net realizable value. The cost of our inventory is generally computed
on the first-in, first-out method.
Property, Plant and Equipment – We record property, plant and equipment (“PP&E”) at cost, except for PP&E that has been
impaired, for which we write down the carrying amount to estimated fair market value, which then becomes the new cost basis.
Other Intangible Assets, net and Goodwill – Goodwill and other intangible assets with indefinite useful lives are not amortized;
however, they are evaluated for impairment at least annually, or more frequently if facts and circumstances indicate that the assets
may be impaired.
Intangible assets that are determined to have a finite life are amortized on a straight-line basis over the period in which we expect to
receive economic benefit, which generally ranges from five to twenty years, and are evaluated for impairment only if facts and
circumstances indicate that the carrying value of the asset may not be recoverable.
The determination of the expected life depends upon the use and the underlying characteristics of the intangible asset. In our
evaluation of the expected life of these intangible assets, we consider the nature and terms of the underlying agreements; our intent
and ability to use the specific asset; the age and market position of the products within the territories in which we are entitled to sell;
the historical and projected growth of those products; and costs, if any, to renew the related agreement.
If the carrying value is not recoverable, impairment is measured as the amount by which the carrying value exceeds its fair value.
Initial fair value is generally based on either appraised value or other valuation techniques.
See Note 6 for further discussion on our goodwill and other intangible assets.
Casualty Insurance Costs – In the United States, we use a combination of insurance and self-insurance mechanisms, including a
wholly owned captive insurance entity. This captive entity participates in a reinsurance pool for a portion of our workers’
compensation risk. We provide self-insurance for the workers’ compensation risk retained by the Company and automobile risks up
to $10 million per occurrence, and product and general liability risks up to $5 million per occurrence. For losses exceeding these self-
insurance thresholds, we purchase casualty insurance from a third-party provider. Our liability for casualty costs is estimated using
individual case-based valuations and statistical analyses and is based upon historical experience, actuarial assumptions and
professional judgment. We do not discount our loss expense reserves.
Minority Interest – Minority interest is recorded for the entities that we consolidate but are not wholly owned by PBG. Minority
interest recorded in our Consolidated Financial Statements is primarily comprised of PepsiCo’s share of Bottling LLC and PR
Beverages. At December 27, 2008, PepsiCo owned 6.6 percent of Bottling LLC and 40 percent of PR Beverages venture.
Treasury Stock – We record the repurchase of shares of our common stock at cost and classify these shares as treasury stock
within shareholders’ equity. Repurchased shares are included in our authorized and issued shares but not included in our shares
outstanding. We record shares reissued using an average cost. At December 27, 2008, we had 175 million shares authorized under
our share repurchase program. Since the inception of our share repurchase program in October 1999, we have repurchased
approximately 146 million shares and have reissued approximately 47 million for stock option exercises.
Financial Instruments and Risk Management – We use derivative instruments to hedge against the risk of adverse movements
associated with commodity prices, interest rates and foreign currency. Our corporate policy prohibits the use of derivative
instruments for trading or speculative purposes, and we have procedures in place to monitor and control their use.
All derivative instruments are recorded at fair value as either assets or liabilities in our Consolidated Balance Sheets. Derivative
instruments are generally designated and accounted for as either a hedge of a recognized asset or liability (“fair value hedge”) or a
hedge of a forecasted transaction (“cash flow hedge”). The derivative’s gain or loss recognized in earnings is recorded consistent
with the expense classification of the underlying hedged item.
If a fair value or cash flow hedge were to cease to qualify for hedge accounting or were terminated, it would continue to be carried on
the balance sheet at fair value until settled, but hedge accounting would be discontinued prospectively. If the underlying hedged
transaction ceases to exist, any associated amounts reported in accumulated other comprehensive loss are reclassified to earnings at
that time.
We also may enter into a derivative instrument for which hedge accounting is not required because it is entered into to offset
changes in the fair value of an underlying transaction recognized in earnings (“economic hedge”). These instruments are reflected in
the Consolidated Balance Sheets at fair value with changes in fair value recognized in earnings.
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Commitments and Contingencies – We are subject to various claims and contingencies related to lawsuits, environmental and other
matters arising out of the normal course of business. Liabilities related to commitments and contingencies are recognized when a
loss is probable and reasonably estimable.
New Accounting Standards
SFAS No. 157

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which establishes a framework for
reporting fair value and expands disclosures about fair value measurements. The Company adopted SFAS 157 as it applies to
financial assets and liabilities in our first quarter of 2008. The adoption of these provisions did not have a material impact on our
Consolidated Financial Statements. For further information about the fair value measurements of our financial assets and liabilities,
see Note 8.
In February 2008, the FASB issued FASB Staff Position No. FAS 157-2, “Effective Date of FASB Statement No. 157” (“FSP 157-2”).
FSP 157-2 delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except for certain items that are
recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). FSP 157-2 will become
effective beginning with our first quarter of 2009 and will not have a material impact on our Consolidated Financial Statements.
SFAS No. 141(R)

In December 2007, the FASB issued SFAS No. 141(revised 2007), “Business Combinations” (“SFAS 141(R)”), which addresses the
recognition and accounting for identifiable assets acquired, liabilities assumed, and noncontrolling interest in business
combinations. Certain costs, which were previously capitalized as a component of goodwill, such as acquisition closing costs, post
acquisition restructuring charges and changes to tax liabilities and valuation allowances after the measurement period, will now be
expensed. SFAS 141(R) also establishes expanded disclosure requirements for business combinations. SFAS 141(R) will become
effective for new transactions closing in our 2009 fiscal year.
SFAS No. 160

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment
of ARB No. 51” (“SFAS 160”), which addresses the accounting and reporting framework for minority interests by a parent company.
SFAS 160 also addresses disclosure requirements to distinguish between interests of the parent and interests of the noncontrolling
owners of a subsidiary. SFAS 160 will become effective beginning with our first quarter of 2009. We will be reporting minority
interest as a component of equity in our Consolidated Balance Sheets and below income tax expense in our Consolidated Statement
of Operations. As minority interest will be recorded below income tax expense, it will have an impact to our total effective tax rate, but
our total taxes will not change. For comparability, we will be retrospectively applying the presentation of our prior year balances in
our Consolidated Financial Statements.
SFAS No. 161

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment
of FASB Statement No. 133” (“SFAS 161”), which requires enhanced disclosures for derivative and hedging activities. SFAS 161 will
become effective beginning with our first quarter of 2009.
EITF Issue No. 07-1

In December 2007, the FASB ratified its Emerging Issues Task Force’s (“EITF”) Consensus for Issue No. 07-1, “Accounting for
Collaborative Arrangements” (“EITF 07-1”), which defines collaborative arrangements and establishes reporting requirements for
transactions between participants in a collaborative arrangement and between participants in the arrangement and third parties.
EITF 07-1 will become effective beginning with our first quarter of 2009. We do not believe this standard will have a material impact
on our Consolidated Financial Statements.
Note 3 –Earnings per Share

The following table reconciles the shares outstanding and net earnings used in the computations of both basic and diluted earnings
per share:
Fiscal Year Ended
Shares in millions 2008 2007 2006
Net Income $ 162 $ 532 $ 522
Weighted-average shares outstanding during period on which basic earnings
per share is calculated 216 226 236
Effect of dilutive shares
Incremental shares under stock compensation plans 4 7 6
Weighted-average shares outstanding during period on which diluted
earnings per share is calculated 220 233 242
Basic earnings per share $0.75 $2.35 $2.22
Diluted earnings per share $0.74 $2.29 $2.16
Basic earnings per share are calculated by dividing the net income by the weighted-average number of shares outstanding during
each period. Diluted earnings per share reflects the potential dilution that could occur if stock options or other equity awards from
our stock compensation plans were exercised and converted into common stock that would then participate in net income.
Diluted earnings per share for the fiscal years ended 2008 and 2006 exclude the dilutive effect of 11.6 million and 1.7 million stock
options, respectively. These shares were excluded from the diluted earnings per share computation because for the years noted, the
exercise price of the stock options was greater than the average market price of the Company’s common shares during the related
periods and the effect of including the stock options in the computation would be anti-dilutive. For the fiscal year ended 2007, there
were no stock options excluded from the diluted earnings per share calculation.
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Note 4 –Share-Based Compensation

Accounting for Share-Based Compensation – Effective January 1, 2006, the Company adopted SFAS No. 123 (revised 2004), “Share-
Based Payment” (“SFAS 123(R)”). Among its provisions, SFAS 123(R) requires the Company to recognize compensation expense for
equity awards over the vesting period based on their grant-date fair value. The Company adopted SFAS 123(R) in using the modified
prospective approach. Under this transition method, the measurement and our method of amortization of costs for share-based
payments granted prior to, but not vested as of January 1, 2006, would be based on the same estimate of the grant-date fair value
and the same amortization method that was previously used in our SFAS 123 pro forma disclosure. Results for prior periods have not
been restated as provided for under the modified prospective approach. For equity awards granted after the date of adoption, we
amortize share-based compensation expense on a straight-line basis over the vesting term.
Compensation expense is recognized only for share-based payments expected to vest. We estimate forfeitures, both at the date of
grant as well as throughout the vesting period, based on the Company’s historical experience and future expectations. Prior to the
adoption of SFAS 123(R), the effect of forfeitures on the pro forma expense amounts was recognized based on estimated forfeitures.
Total share-based compensation expense recognized in the Consolidated Statements of Operations is as follows:
Fiscal Year Ended
2008 2007 2006
Total share-based compensation expense $ 56 $ 62 $ 65
Income tax benefit (16) (17) (18)
Minority interest (3) (5) (4)
Net income impact $ 37 $ 40 $ 43
Share-Based Long-Term Incentive Compensation Plans – Prior to 2006, we granted non-qualified stock options to certain
employees, including middle and senior management under our share-based long-term incentive compensation plans (“incentive
plans”). Additionally, we granted restricted stock units to certain senior executives. Non-employee members of our Board of
Directors (“Directors”) participate in a separate incentive plan and receive non-qualified stock options or restricted stock units.
Beginning in 2006, we grant a mix of stock options and restricted stock units to middle and senior management employees and
Directors under our incentive plans.
Shares available for future issuance to employees and Directors under existing plans were 16.4 million at December 27, 2008.
The fair value of PBG stock options was estimated at the date of grant using the Black-Scholes-Merton option-valuation model. The
table below outlines the weighted-average assumptions for options granted during years ended December 27, 2008, December 29,
2007 and December 30, 2006:
2008 2007 2006

Risk-free interest rate 2.8% 4.5% 4.7%
Expected term (in years) 5.3 5.6 5.7
Expected volatility 24% 25% 27%
Expected dividend yield 2.0% 1.8% 1.5%
The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining
expected term. The expected term of the options represents the estimated period of time employees will retain their vested stocks
until exercise. Due to the lack of historical experience in stock option exercises, we estimate expected term utilizing a combination of
the simplified method as prescribed by the United States Securities and Exchange Commission’s Staff Accounting Bulletin No. 110
and historical experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations of
future employee behavior. Expected stock price volatility is based on a combination of historical volatility of the Company’s stock
and the implied volatility of its traded options. The expected dividend yield is management’s long-term estimate of annual dividends
to be paid as a percentage of share price.
The fair value of restricted stock units is based on the fair value of PBG stock on the date of grant.
We receive a tax deduction for certain stock option exercises when the options are exercised, generally for the excess of the stock
price over the exercise price of the options. Additionally, we receive a tax deduction for restricted stock units equal to the fair market
value of PBG’s stock at the date the restricted stock units are converted to PBG stock. SFAS 123(R) requires that benefits received
from tax deductions resulting from the grant-date fair value of equity awards be reported as operating cash inflows in our
Consolidated Statement of Cash Flows. Benefits from tax deductions in excess of the grant-date fair value from equity awards are
treated as financing cash inflows in our Consolidated Statement of Cash Flows. For the year ended December 27, 2008, we
recognized $7 million in tax benefits from equity awards in the Consolidated Statements of Cash Flows, of which $2 million was
recorded in the financing section with the remaining being recorded in cash from operations.
As of December 27, 2008, there was approximately $75 million of total unrecognized compensation cost related to non-vested share-
based compensation arrangements granted under the incentive plans. That cost is expected to be recognized over a weighted-
average period of 2.0 years.
Stock Options – Stock options expire after 10 years and generally vest ratably over three years. Stock options granted to Directors
are typically fully vested on the grant date.
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PART II (continued)
The following table summarizes option activity during the year ended December 27, 2008:
Weighted-Average
Weighted-Average Remaining Aggregate
Shares Exercise Price Contractual Intrinsic
(in millions) per Share T erm (years) Value
Outstanding at December 29, 2007 26.9 $ 25.27 5.9 $ 395
Granted 3.7 $ 33.69
Exercised (1.9) $ 21.70
Forfeited (0.7) $ 30.46
Vested or expected to vest at December 27, 2008 27.6 $ 26.42 5.4 $ 35
Exercisable at December 27, 2008 21.4 $ 24.81 4.5 $ 35
The aggregate intrinsic value in the table above is before income taxes, based on the Company’s closing stock price of $22.00 and
$39.96 as of the last business day of the period ended December 27, 2008 and December 29, 2007, respectively.
For the years ended December 27, 2008, December 29, 2007 and December 30, 2006, the weighted-average grant-date fair value of
stock options granted was $7.10, $8.19 and $8.75, respectively. The total intrinsic value of stock options exercised during the years
ended December 27, 2008, December 29, 2007 and December 30, 2006 was $21 million, $100 million and $115 million, respectively.
Restricted Stock Units – Restricted stock units granted to employees generally vest over three years. In addition, restricted stock
unit awards to certain senior executives contain vesting provisions that are contingent upon the achievement of pre-established
performance targets. The initial restricted stock unit award to Directors remains restricted while the individual serves on the Board.
The annual grants to Directors vest immediately, but receipt of the shares may be deferred. All restricted stock unit awards are
settled in shares of PBG common stock.
The following table summarizes restricted stock unit activity during the year ended December 27, 2008:
Weighted-Average
Weighted-Average Remaining Aggregate
Shares Grant-Date Contractual Intrinsic
(in thousands) Fair Value T erm (years) Value
Outstanding at December 29, 2007 2,379 $ 29.96 1.7 $ 95
Granted 1,319 $ 35.38
Converted (163) $ 30.63
Forfeited (182) $ 31.61
Vested or expected to vest at December 27, 2008 2,826 $ 32.25 1.4 $ 62
Convertible at December 27, 2008 190 $ 28.81 – $ 4
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For the years ended December 27, 2008, December 29, 2007 and December 30, 2006, the weighted-average grant-date fair value of
restricted stock units granted was $35.38, $31.02 and $29.55, respectively. The total intrinsic value of restricted stock units converted
during the years ended December 27, 2008, December 29, 2007 and December 30, 2006 was approximately $4 million, $575 thousand
and $248 thousand, respectively.
Note 5 –Balance Sheet Details
2008 2007
Accounts Receivable, net
Trade accounts receivable $ 1,208 $ 1,319
Allowance for doubtful accounts (71) (54)
Accounts receivable from PepsiCo 154 188
Other receivables 80 67
$ 1,371 $ 1,520
Inventories
Raw materials and supplies $ 185 $ 195
Finished goods 343 382
$ 528 $ 577
Prepaid Expenses and Other Current Assets
Prepaid expenses $ 244 $ 290
Other current assets 32 52
$ 276 $ 342
Property, Plant and Equipment, net
Land $ 300 $ 320
Buildings and improvements 1,542 1,484
Manufacturing and distribution equipment 3,999 4,091
Marketing equipment 2,246 2,389
Capital leases 23 36
Other 154 164
8,264 8,484
Accumulated depreciation (4,382) (4,404)
$ 3,882 $ 4,080
Capital leases primarily represent manufacturing and distribution equipment and other equipment.
We calculate depreciation on a straight-line basis over the estimated lives of the assets as follows:
Buildings and improvements 20–33 years

Manufacturing and distribution equipment 2–15 years
Marketing equipment 2–7 years
Industrial Revenue Bonds – Pursuant to the terms of an industrial revenue bond, we transferred title of certain fixed assets with a net
book value of $72 million to a state governmental authority in the U.S. to receive a property tax abatement. The title to these assets
will revert back to PBG upon retirement or cancellation of the bond. These fixed assets are still recognized in the Company’s
Consolidated Balance Sheet as all risks and rewards remain with the Company.
2008 2007
Accounts Payable and Other Current Liabilities
Accounts payable $ 444 $ 615
Accounts payable to PepsiCo 217 255
Trade incentives 189 235
Accrued compensation and benefits 240 276
Other accrued taxes 128 140
Accrued interest 85 70
Other current liabilities 372 377
$1,675 $1,968
Note 6 – Other Intangible Assets, net and Goodwill

The components of other intangible assets are as follows:
2008 2007
Intangibles subject to amortization:
Gross carrying amount:
Customer relationships and lists $ 45 $ 54
Franchise and distribution rights 41 46
Other identified intangibles 34 30
120 130
Accumulated amortization:
Customer relationships and lists (15) (15)
Franchise and distribution rights (31) (31)
Other identified intangibles (21) (17)
(67) (63)
Intangibles subject to amortization, net 53 67
Intangibles not subject to amortization:
Carrying amount:
Franchise rights 3,244 3,235
Licensing rights 315 315
Distribution rights 49 294
Brands 39 213
Intangibles not subject to amortization 3,698 4,114
Total other intangible assets, net $3,751 $4,181
During the first quarter of 2008, we acquired Pepsi-Cola Batavia Bottling Corp. This Pepsi-Cola franchise bottler serves certain New
York counties in whole or in part. As a result of the acquisition, we recorded approximately $19 million of non-amortizable franchise
rights and $4 million of non-compete agreements.
During the first quarter of 2008, we acquired distribution rights for SoBe brands in portions of Arizona and Texas and recorded
approximately $6 million of non-amortizable distribution rights.
During the fourth quarter of 2008, we acquired Lane Affiliated Companies, Inc. (“Lane”). This Pepsi-Cola franchise bottler serves
portions of Colorado,
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PART II (continued)
Arizona and New Mexico. As a result of the acquisition, we recorded approximately $176 million of non-amortizable franchise rights.
During the first quarter of 2007, we acquired from Nor-Cal Beverage Company, Inc., franchise and bottling rights for select Cadbury
Schweppes brands in the Northern California region. As a result of the acquisition, we recorded approximately $50 million of non-
amortizable franchise rights.
As a result of the formation of the PR Beverages venture in the second quarter of 2007, we recorded licensing rights valued at
$315 million, representing the fair value of the exclusive license and related rights granted by PepsiCo to PR Beverages to
manufacture and sell the concentrate for PepsiCo beverage products sold in Russia. The licensing rights have an indefinite useful
life and are not subject to amortization. For further discussion on the PR Beverages venture see Note 15.
Intangible Asset Amortization – Intangible asset amortization expense was $9 million, $10 million and $12 million in 2008, 2007 and
2006, respectively. Amortization expense for each of the next five years is estimated to be approximately $7 million or less.
Goodwill – The changes in the carrying value of goodwill by reportable segment for the years ended December 29, 2007 and
December 27, 2008 are as follows:
U.S. & Canada Europe Mexico T otal
Balance at December 30, 2006 $ 1,229 $ 16 $ 245 $ 1,490
Purchase price allocations 1 – (16) (15)
Impact of foreign currency translation and
other 60 1 (3) 58
Balance at December 29, 2007 1,290 17 226 1,533
Purchase price allocations 20 13 (6) 27
Impact of foreign currency translation and
other (75) (4) (47) (126)
Balance at December 27, 2008 $ 1,235 $26 $173 $1,434
During 2008, the purchase price allocations in the U.S. & Canada segment primarily relate to goodwill allocations resulting from the
Lane acquisition discussed above. In the Europe segment, the purchase price allocations primarily relate to Russia’s purchase of
Sobol-Aqua JSC (“Sobol”) in the second quarter of 2008. Sobol manufactures its brands and co-packs various Pepsi products in
Siberia and Eastern Russia.
During 2008 and 2007, the purchase price allocations in the Mexico segment primarily relate to goodwill allocations resulting from
changes in taxes associated with prior year acquisitions.
Annual Impairment Testing – The Company completes its impairment testing of goodwill in accordance with SFAS No. 142,
“Goodwill and Other Intangible Assets” annually, or more frequently as indicators warrant. Goodwill and intangible assets with
indefinite lives are not amortized; however, they are evaluated for impairment at least annually or more frequently if facts and
circumstances indicate that the assets may be impaired. In previous years the Company completed this test in the fourth quarter
using a measurement date of third quarter-end. During the second quarter ended June 14, 2008, the Company changed its impairment
testing of goodwill to the third quarter, using a measurement date at the beginning of the third quarter. With the exception of
Mexico’s intangible assets, the Company has also changed its impairment testing of intangible assets with indefinite useful lives to
the third quarter, using a measurement date at the beginning of the third quarter. Impairment testing of Mexico’s intangible assets
with indefinite useful lives was completed in the fourth quarter to coincide with the completion of the strategic review of the
business.
As a result of this testing, the Company recorded a $412 million non-cash impairment charge ($277 million net of tax and minority
interest). The impairment charge relates primarily to distribution rights and brands for Electropura water business in Mexico. The
impairment charge relating to these intangible assets was determined based upon the findings of an extensive strategic review and
the finalization of certain restructuring plans for our Mexican business. In light of weakening macroeconomic conditions and our
outlook for the business in Mexico, we lowered our expectations of the future performance, which reduced the value of these
intangible assets and triggered an impairment charge. The fair value of our franchise rights and distribution rights was estimated
using a multi-period excess earnings method that is based upon estimated discounted future cash flows. The fair value of our brands
was estimated using a multi-period royalty savings method, which reflects the savings realized by owning the brand and, therefore,
not having to pay a royalty fee to a third party.
Note 7 – Investment in Noncontrolled Affiliate

During the second half of 2008, together with PepsiCo, we completed a joint acquisition of JSC Lebedyansky (“Lebedyansky”) for
approximately $1.8 billion. The acquisition does not include the company’s baby food and mineral water businesses, which were
spun off to shareholders in a separate transaction prior to our acquisition. Lebedyansky was acquired 58.3 percent by PepsiCo and
41.7 percent by PR Beverages, our Russian venture with PepsiCo. We and PepsiCo have an ownership interest in PR Beverages of
60 percent and 40 percent, respectively. As a result, PepsiCo and we have acquired a 75 percent and 25 percent economic stake in
Lebedyansky, respectively.
We have recorded an equity investment for PR Beverages’ share in Lebedyansky. In addition, we have recorded a minority interest
contribution for PepsiCo’s proportional contribution to PR Beverages relating to Lebedyansky.
Note 8 – Fair Value Measurements

We adopted SFAS 157 at the beginning of fiscal 2008 for all financial instruments valued on a recurring basis, at least annually. The
standard defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. It also establishes a three-level fair value hierarchy that prioritizes the inputs
used to measure fair value. The three levels of the hierarchy are defined as follows:
Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities.
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Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for identical assets or
liabilities in non-active markets, quoted prices for similar assets or liabilities in active markets and inputs other than quoted
prices that are observable for substantially the full term of the asset or liability.
Level 3 – Unobservable inputs reflecting management’s own assumptions about the input used in pricing the asset or
liability.
If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is
based on the lowest level input that is significant to the fair value measurement of the instrument.
The following table summarizes the financial assets and liabilities we measure at fair value on a recurring basis as of
December 27, 2008:
Level 2
Financial Assets:
Foreign currency forward contracts(1) $ 13
Prepaid forward contracts(2) 13
Interest rate swaps(3) 8
$ 34
Financial Liabilities:
Commodity contracts(1) $ 57
Foreign currency contracts(1) 6
Interest rate swaps(3) 1
$ 64
(1) Based primarily on the forward rates of the specific indices upon which the contract settlement is based.
(2) Based primarily on the value of our stock price.
(3) Based primarily on the London Inter-Bank Offer Rate (“ LIBOR”) index.
Note 9 – Short-Term Borrowings and Long-Term Debt
2008 2007
Short-term borrowings
Current maturities of long-term debt $ 1,305 $ 7
Other short-term borrowings 103 240
$ 1,408 $ 247
Long-term debt
5.63% (5.2% effective rate)(2)(3) senior notes due 2009 $ 1,300 $1,300
4.63% (4.6% effective rate)(3) senior notes due 2012 1,000 1,000
5.00% (5.2% effective rate) senior notes due 2013 400 400
6.95% (7.4% effective rate)(4) senior notes due 2014 1,300 –
5.50% (5.3% effective rate)(2) senior notes due 2016 800 800
7.00% (7.1% effective rate) senior notes due 2029 1,000 1,000
Capital lease obligations (Note 10) 8 9
Other (average rate 14.43%) 37 29
6,095 4,788
SFAS 133 adjustment(1) 6 –
Unamortized discount, net (12) (11)
Current maturities of long-term debt (1,305) (7)
$ 4,784 $4,770
(1) In accordance with the requirements of SFAS No. 133, “ Accounting for Derivative Instruments and Hedging Activities” (“ SFAS 133”), the
portion of our fixed-rate debt obligations that is hedged is reflected in our Consolidated Balance Sheets as an amount equal to the sum of the
debt’s carrying value plus a SFAS 133 fair value adjustment, representing changes recorded in the fair value of the hedged debt obligations
attributable to movements in market interest rates.
(2) Effective interest rates include the impact of the gain/loss realized on swap instruments and represent the rates that were achieved in 2008.
(3) T hese notes are guaranteed by P epsiCo.
(4) Effective interest rate excludes the impact of the loss realized on T reasury Rate Locks in 2008.
Aggregate Maturities — Long-Term Debt – Aggregate maturities of long-term debt as of December 27, 2008 are as follows:
2009: $1,301 million, 2010: $29 million, 2011: $7 million, 2012: $1,000 million, 2013: $400 million, 2014 and thereafter:
$3,350 million. The maturities of long-term debt do not include the capital lease obligations, the non-cash impact of the
SFAS 133 adjustment and the interest effect of the unamortized discount.
On October 24, 2008, we issued $1.3 billion of 6.95 percent senior notes due 2014 (the “Notes”). The Notes were guaranteed
by PepsiCo on February 17, 2009. A portion of this debt was used to repay our senior notes due in 2009 at their maturity on
February 17, 2009. In the interim, these proceeds were placed in short-term investments. In addition, we used a portion of
the proceeds to finance the Lane acquisition and repay short-term commercial paper debt, a portion of which was used to
finance our acquisition of Lebedyansky.
2008 Short-Term Debt Activities – We have a committed credit facility of $1.1 billion and an uncommitted credit facility of
$500 million. Both of these credit facilities are guaranteed by Bottling LLC and are used to
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PART II (continued)
support our $1.2 billion commercial paper program and working capital requirements.
At December 27, 2008, we had no outstanding commercial paper. At December 29, 2007, we had $50 million in outstanding
commercial paper with a weighted-average interest rate of 5.3 percent.
In addition to the credit facilities discussed above, we had available bank credit lines of approximately $772 million at year-end 2008,
of which the majority was uncommitted. These lines were primarily used to support the general operating needs of our international
locations. As of year-end 2008, we had $103 million outstanding under these lines of credit at a weighted-average interest rate of
10.0 percent. As of year-end 2007, we had available short-term bank credit lines of approximately $748 million with $190 million
outstanding at a weighted-average interest rate of 5.3 percent.
Debt Covenants – Certain of our senior notes have redemption features and non-financial covenants that will, among other things,
limit our ability to create or assume liens, enter into sale and lease-back transactions, engage in mergers or consolidations and
transfer or lease all or substantially all of our assets. Additionally, certain of our credit facilities and senior notes have financial
covenants consisting of the following:
• Our debt to capitalization ratio should not be greater than .75 on the last day of a fiscal quarter when PepsiCo’s ratings are A- by
S&P and A3 by Moody’s or higher. Debt is defined as total long-term and short-term debt plus accrued interest plus total
standby letters of credit and other guarantees less cash and cash equivalents not in excess of $500 million. Capitalization is
defined as debt plus shareholders’ equity plus minority interest, excluding the impact of the cumulative translation adjustment.
• Our debt to EBITDA ratio should not be greater than five on the last day of a fiscal quarter when PepsiCo’s ratings are less than
A- by S&P or A3 by Moody’s. EBITDA is defined as the last four quarters of earnings before depreciation, amortization, net
interest expense, income taxes, minority interest, net other non-operating expenses and extraordinary items.
• New secured debt should not be greater than 15 percent of our net tangible assets. Net tangible assets are defined as total assets
less current liabilities and net intangible assets.
As of December 27, 2008 we were in compliance with all debt covenants.
Interest Payments and Expense – Amounts paid to third parties for interest, net of settlements from our interest rate swaps, were
$293 million, $305 million and $289 million in 2008, 2007 and 2006, respectively. Total interest expense incurred during 2008, 2007 and
2006 was $316 million, $305 million and $298 million, respectively.
Letters of Credit, Bank Guarantees and Surety Bonds – At December 27, 2008, we had outstanding letters of credit, bank guarantees
and surety bonds valued at $294 million from financial institutions primarily to provide collateral for estimated self-insurance claims
and other insurance requirements.
Note 10 – Leases
We have non-cancelable commitments under both capital and long-term operating leases, principally for real estate and office
equipment. Certain of our operating leases for real estate contain escalation clauses, holiday rent allowances and other rent
incentives. We recognize rent expense on our operating leases, including these allowances and incentives, on a straight-line basis
over the lease term. Capital and operating lease commitments expire at various dates through 2072. Most leases require payment of
related executory costs, which include property taxes, maintenance and insurance.
The cost of real estate and office equipment under capital leases is included in the Consolidated Balance Sheets as property, plant
and equipment. Amortization of assets under capital leases is included in depreciation expense.
Capital lease additions totaled $4 million, $7 million and $33 million for 2008, 2007 and 2006, respectively. Included in the 2006
additions was a $25 million capital lease agreement with PepsiCo to lease vending equipment. In 2007, we repaid this lease obligation
with PepsiCo.
The future minimum lease payments by year and in the aggregate, under capital leases and non-cancelable operating leases
consisted of the following at December 27, 2008:
Leases
Capital Operating
2009 $ 4 $ 58
2010 2 43
2011 1 26
2012 – 20
2013 – 14
Thereafter 2 118
$ 9 $279
Less: amount representing interest 1
Present value of net minimum lease payments 8
Less: current portion of net minimum lease payments 3
Long-term portion of net minimum lease payments $ 5
Components of Net Rental Expense Under Operating Leases:
2008 2007 2006

Minimum rentals $120 $114 $99
Sublease rental income (1) (2) (3)
Net rental expense $119 $112 $96
Note 11 – Financial Instruments and Risk Management

We are subject to the risk of loss arising from adverse changes in commodity prices, foreign currency exchange rates, interest rates,
and our stock price. In the normal course of business, we manage these risks through a variety of strategies, including the use of
derivatives. Certain of these derivatives are designated as either cash flow or fair value hedges.
Cash Flow Hedges – We are subject to market risk with respect to the cost of commodities because our ability to recover increased
costs through
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higher pricing may be limited by the competitive business environment in which we operate. We use future and option contracts to
hedge the risk of adverse movements in commodity prices related primarily to anticipated purchases of raw materials and energy
used in our operations. These contracts generally range from one to 24 months in duration and qualify for cash flow hedge
accounting treatment. At December 27, 2008 the fair value of our commodity contracts was a $57 million net loss, of which $48 million
and $9 million was recorded in other current liabilities and other liabilities, respectively, in our Consolidated Balance Sheets. In 2008,
$48 million of a net loss was recognized in accumulated other comprehensive loss (“AOCL”). Additionally, in 2008, $14 million of a
net gain was reclassified into earnings in selling, delivery and administrative expenses for our commodity contracts.
We are subject to foreign currency transactional risks in certain of our international territories for transactions that are denominated
in currencies that are different from their functional currency. We enter into forward exchange contracts to hedge portions of our
forecasted U.S. dollar purchases in our foreign businesses. These contracts generally range from one to 12 months in duration and
qualify for cash flow hedge accounting treatment. At December 27, 2008, the fair value of our foreign exchange contracts was a
$4 million gain recorded in other current assets in our Consolidated Balance Sheets. In 2008, $11 million of a gain was recognized in
AOCL and $2 million of a loss was reclassified into earnings in cost of goods sold for our foreign exchange contracts.
For these cash flow hedges, the effective portion of the change in the fair value of a derivative instrument is deferred in AOCL until
the underlying hedged item is recognized in earnings. The ineffective portion of a fair value change on a qualifying cash flow hedge
is recognized in earnings immediately and is recorded consistent with the expense classification of the underlying hedged item.
We have also entered into treasury rate lock agreements to hedge against adverse interest rate changes on certain debt financing
arrangements, which qualify for cash flow hedge accounting. Gains and losses that are considered effective are deferred in AOCL
and amortized to interest expense over the duration of the debt term. In 2008, we recognized a $20 million loss in AOCL for treasury
rate locks that settled in the fourth quarter. Additionally, in 2008, we reclassified from AOCL $7 million of a loss to interest expense
from our treasury rate locks that previously settled.
The following summarizes activity in AOCL related to derivatives designated as cash flow hedges held by the Company during the
applicable periods:
Before Net of
Minority Minority
Interest Minority Interest
and T axes Interest T axes and T axes
Accumulated net gains as of December 31, 2005 $ 5 $ – $ (2) $ 3
Net changes in the fair value of cash flow hedges 14 (1) (5) 8
Net gains reclassified from AOCL into earnings (1) – 1 –
Accumulated net gains as of December 30, 2006 18 (1) (6) 11
Net changes in the fair value of cash flow hedges (4) – – (4)
Net losses reclassified from AOCL into earnings 4 – (1) 3
Accumulated net gains as of December 29, 2007 18 (1) (7) 10
Net changes in the fair value of cash flow hedges (57) 4 23 (30)
Net gains reclassified from AOCL into earnings (4) – 1 (3)
Accumulated net losses as of December 27, 2008 $ (43) $ 3 $ 17 $ (23)
Assuming no change in the commodity prices and foreign currency rates as measured on December 27, 2008, $47 million of
unrealized losses will be recognized in earnings over the next 24 months. During 2008 we recognized $8 million of ineffectiveness for
the treasury locks that were settled in the fourth quarter. The ineffective portion of the change in fair value of our other contracts
was not material to our results of operations in 2008, 2007 or 2006.
Fair Value Hedges – We finance a portion of our operations through fixed-rate debt instruments. We effectively converted
$1.1 billion of our senior notes to floating-rate debt through the use of interest rate swaps with the objective of reducing our overall
borrowing costs. These interest rate swaps meet the criteria for fair value hedge accounting and are 100 percent effective in
eliminating the market rate risk inherent in our long-term debt. Accordingly, any gain or loss associated with these swaps is fully
offset by the opposite market impact on the related debt. During 2008, the fair value of the interest rate swaps increased to a net
asset of $6.1 million at December 27, 2008 from a liability of $0.3 million at December 29, 2007. The fair value of our swaps was
recorded in other assets and other liabilities in our Consolidated Balance Sheets.
Foreign Currency Hedges – We entered into forward exchange contracts to economically hedge a portion of our intercompany
receivable balances that are denominated in Mexican pesos. At December 27, 2008, the fair value of these contracts was $9 million
and was classified in other current assets in our Consolidated Balance Sheet. The earnings impact from these instruments is
classified in other non-operating expenses (income), net in the Consolidated Statements of Operations.
Unfunded Deferred Compensation Liability – Our unfunded deferred compensation liability is subject to changes in our stock price
as well as
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PART II (continued)
price changes in other equity and fixed-income investments. Participating employees in our deferred compensation program can elect
to defer all or a portion of their compensation to be paid out on a future date or dates. As part of the deferral process, employees
select from phantom investment options that determine the earnings on the deferred compensation liability and the amount that they
will ultimately receive. Employee investment elections include PBG stock and a variety of other equity and fixed-income investment
options.
Since the plan is unfunded, employees’ deferred compensation amounts are not directly invested in these investment vehicles.
Instead, we track the performance of each employee’s investment selections and adjust his or her deferred compensation account
accordingly. The adjustments to employees’ accounts increases or decreases the deferred compensation liability reflected on our
Consolidated Balance Sheets with an offsetting increase or decrease to our selling, delivery and administrative expenses.
We use prepaid forward contracts to hedge the portion of our deferred compensation liability that is based on our stock price. At
December 27, 2008, we had a prepaid forward contract for 585,000 shares at a price of $22.00, which was accounted for as an
economic hedge. This contract requires cash settlement and has a fair value at December 27, 2008, of $13 million recorded in prepaid
expenses and other current assets in our Consolidated Balance Sheet. The fair value of this contract changes based on the change in
our stock price compared with the contract exercise price. We recognized an expense of $10 million and income of $5 million in 2008
and 2007, respectively, resulting from the change in fair value of these prepaid forward contracts. The earnings impact from these
instruments is recorded in selling, delivery and administrative expenses.
Other Financial Assets and Liabilities – Financial assets with carrying values approximating fair value include cash and cash
equivalents and accounts receivable. Financial liabilities with carrying values approximating fair value include accounts payable and
other accrued liabilities and short-term debt. The carrying value of these financial assets and liabilities approximates fair value due to
their short maturities and since interest rates approximate current market rates for short-term debt.
Long-term debt, which includes the current maturities of long-term debt, at December 27, 2008, had a carrying value and fair value of
$6.1 billion and $6.4 billion, respectively, and at December 29, 2007, had a carrying value and fair value of $4.8 billion and $4.9 billion,
respectively. The fair value is based on interest rates that are currently available to us for issuance of debt with similar terms and
remaining maturities.
Note 12 – Pension and Postretirement Medical Benefit Plans

Employee Benefit Plans – We sponsor both pension and other postretirement medical benefit plans in various forms in the United
States and other similar pension plans in our international locations, covering employees who meet specified eligibility requirements.
The assets, liabilities and expense associated with our international plans were not significant to our results of operations and are
not included in the tables and discussion presented below.
Defined Benefit Pension Plans – In the U.S. we participate in non-contributory defined benefit pension plans for certain full-time
salaried and hourly employees. Benefits are generally based on years of service and compensation, or stated amounts for each year
of service. Effective January 1, 2007, newly hired salaried and non-union hourly employees are not eligible to participate in these
plans. Additionally, effective April 1, 2009, we will no longer continue to accrue benefits for certain of our salaried and non-union
employees that do not meet age and service requirements.
Postretirement Medical Plans – Our postretirement medical plans provide medical and life insurance benefits principally to
U.S. retirees and their dependents. Employees are eligible for benefits if they meet age and service requirements. The plans are not
funded and since 1993 have included retiree cost sharing.
Defined Contribution Benefits – Nearly all of our U.S. employees are eligible to participate in our defined contribution plans, which
are voluntary defined contribution savings plans. We make matching contributions to the defined contribution savings plans on
behalf of participants eligible to receive such contributions. Additionally, employees not eligible to participate in the defined benefit
pension plans and employees whose benefits will be discontinued will receive additional Company retirement contributions under
the defined contribution plans. Defined contribution expense was $29 million, $27 million and $22 million in 2008, 2007 and 2006,
respectively.
Components of Net Pension Expense and Other Amounts Recognized in Other Comprehensive Loss/(Income)
Pension
2008 2007 2006
Net pension expense
Service cost $ 51 $ 55 $ 53
Interest cost 100 90 82
Expected return on plan assets – (income) (116) (102) (94)
Amortization of net loss 15 38 38
Amortization of prior service amendments 7 7 9
Curtailment charge 20 – –
Special termination benefits 7 4 –
Net pension expense for the defined benefit plans 84 92 88
Other comprehensive loss (income)
Prior service cost arising during the year 14 8 N/A
Net loss (gain) arising during the year 619 (114) N/A
Amortization of net loss (15) (38) N/A
Amortization of prior service amendments (1) (27) (7) N/A
Total recognized in other comprehensive loss (income)(2) 591 (151) N/A
Total recognized in net pension expense and other comprehensive loss
(income) $ 675 $ (59) $ 88
(1) 2008 includes curtailment charge of $20 million.
(2) P rior to taxes and minority interest.
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Components of Postretirement Medical Expense and Other Amounts Recognized in Other Comprehensive Loss/(Income)
P ostretirement
2008 2007 2006
Net postretirement expense
Special termination benefits 1 – –
Net postretirement expense 30 29 31
Other comprehensive loss (income)
Net (gain) arising during the year (30) (4) N/A
Total recognized in other comprehensive loss (income)(1) (33) (8) N/A
Total recognized in net postretirement expense and other
comprehensive loss (income) $ (3) $21 $ 31
(1) P rior to taxes and minority interest.
Changes in Benefit Obligations

P ension P ostretirement
2008 2007 2008 2007
Obligation at beginning of year $1,585 $1,539 $353 $354

SFAS 158 adoption (53) – (5) –
Service cost 51 55 5 5
Interest cost 100 90 21 20
Plan amendments 14 8 – –
Plan curtailment (50) – – –
Actuarial (gain) loss 141 (53) (30) (4)
Benefit payments (69) (57) (19) (23)
Special termination benefits 7 4 1 –
Adjustment for Medicare subsidy – – 1 1
Transfers (2) (1) – –
Obligation at end of year $1,724 $1,585 $327 $353
Changes in the Fair Value of Plan Assets
2008 2007 2008 2007
Fair value of plan assets at beginning of year $1,455 $1,289 $ – $ –
SFAS 158 adoption (17) – – –
Actual return on plan assets (412) 163 – –
Transfers (2) (1) – –
Employer contributions 90 61 18 22
Adjustment for Medicare subsidy – – 1 1
Fair value of plan assets at end of year $1,045 $1,455 $ – $ –
Amounts Included in AOCL(1)
2008 2007 2008 2007
Prior service cost $ 38 $ 48 $ 3 $ 3

Net loss 879 308 49 90
Total $917 $356 $52 $93
(1) P rior to taxes and minority interest
Estimated Gross Amounts in AOCL to be Amortized in 2009
Prior service cost $ 6 $–

Net loss $35 $1
The accumulated benefit obligations for all U.S. pension plans were $1,636 million and $1,458 million at December 27, 2008
and December 29, 2007, respectively.
Selected Information for Plans with Liabilities in Excess of Plan Assets

2008 2007(1) 2008 2007(1)
Projected benefit obligation $1,724 $777 $327 $353

Accumulated benefit obligation $1,636 $649 $327 $353
Fair value of plan assets $1,045 $598 $ – $ –
(1) 2007 balances were measured on September 30, 2007. Fair value of plan assets for 2007 includes fourth quarter employer contributions.
Reconciliation of Funded Status

2008 2007 2008 2007
Funded status at measurement date $(679) $(130) $(327) $(353)

Fourth quarter employer
contributions/payments N/A 23 N/A 4
Funded status at end of year $(679) $(107) $(327) $(349)
Amounts recognized
Other assets $ – $ 69 $ – $ –
Accounts payable and other current liabilities (10) (5) (24) (26)
Other liabilities (669) (171) (303) (323)
Total net liabilities (679) (107) (327) (349)
Accumulated other comprehensive loss(1) 917 356 52 93
Net amount recognized $ 238 $ 249 $(275) $(256)
(1) P rior to taxes and minority interest
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PART II (continued)
Weighted Average Assumptions

2008 2007 2006 2008 2007 2006
Expense discount rate 6.70% 6.00% 5.80% 6.35% 5.80% 5.55%
Liability discount rate 6.20% 6.35% 6.00% 6.50% 6.20% 5.80%
Expected rate of return on plan
assets (1) 8.50% 8.50% 8.50% N/A N/A N/A
Expense rate of compensation
increase 3.56% 3.55% 3.53% 3.56% 3.55% 3.53%
Liability rate of compensation increase 3.53% 3.56% 3.55% 3.53% 3.56% 3.55%
(1) Expected rate of return on plan assets is presented after administration expenses.
The expected rate of return on plan assets for a given fiscal year is based upon actual historical returns and the long-term
outlook on asset classes in the pension plans’ investment portfolio.
Funding and Plan Assets

Allocation Percentage
T arget Actual Actual
Asset Category 2009 2008 2007
Equity securities 65% 60% 75%
Debt securities 35% 40% 25%
The table above shows the target allocation for 2009 and the actual allocation as of December 27, 2008 and December 29,
2007. Target allocations of PBG sponsored pension plans’ assets reflect the long-term nature of our pension liabilities. The
target allocation for 2009 has been changed in the first quarter of 2009 from 75 percent equity and 25 percent fixed income to
65 percent equity and 35 percent fixed income. None of the current assets are invested directly in equity or debt instruments
issued by PBG, PepsiCo or any bottling affiliates of PepsiCo, although it is possible that insignificant indirect investments
exist through our broad market indices. PBG sponsored pension plans’ equity investments are currently diversified across
all areas of the equity market (i.e., large, mid and small capitalization stocks as well as international equities). PBG sponsored
pension plans’ fixed income investments are also currently diversified and consist of both corporate and U.S. government
bonds. The pension plans currently do not invest directly in any derivative investments. The pension plans’ assets are held
in a pension trust account at our trustee’s bank.
PBG’s pension investment policy and strategy are mandated by PBG’s Pension Investment Committee (“PIC”) and are
overseen by the PBG Board of Directors’ Compensation and Management Development Committee. The plan assets are
invested using a combination of enhanced and passive indexing strategies. The performance of the plan assets is
benchmarked against market indices and reviewed by the PIC. Changes in investment strategies, asset allocations and
specific investments are approved by the PIC prior to execution.
Health Care Cost Trend Rates – We have assumed an average increase of 8.75 percent in 2009 in the cost of postretirement
medical benefits for employees who retired before cost sharing was introduced. This average increase is then projected to
decline gradually to five percent in 2015 and thereafter.
Assumed health care cost trend rates have an impact on the amounts reported for postretirement medical plans. A one-
percentage point change in assumed health care costs would have the following impact:
1% Increase 1% Decrease
Effect on total fiscal year 2008 service and interest cost components $– $ –
Effect on total fiscal year 2008 postretirement benefit obligation $6 $ (5)
Pension and Postretirement Cash Flow – We do not fund our pension plan and postretirement medical plans when our
contributions would not be tax deductible or when benefits would be taxable to the employee before receipt. Of the total
U.S. pension liabilities at December 27, 2008, $72 million relates to pension plans not funded due to these unfavorable tax
consequences.
Employer Contributions P ension P ostretirement
2007 $ 74 $ 21
2008 $ 90 $ 18
2009 (expected) $160 $ 25
Expected Benefits – The expected benefit payments to be made from PBG sponsored pension and postretirement medical
plans (with and without the prescription drug subsidy provided by the Medicare Prescription Drug, Improvement and
Modernization Act of 2003) to our participants over the next ten years are as follows:
P ension Postretirement
Including Excluding
Medicare Medicare
Expected Benefit P ayments Subsidy Subsidy
2009 $ 80 $ 25 $ 26
2010 $ 73 $ 25 $ 26
2011 $ 80 $ 26 $ 27
2012 $ 88 $ 27 $ 28
2013 $ 96 $ 27 $ 28
2014 to 2018 $ 627 $141 $146
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Note 13 – Income Taxes

The details of our income tax provision are set forth below:
2008 2007 2006

Current:
Federal $ 93 $168 $154
Foreign 46 25 36
State 20 26 30
159 219 220
Deferred:
Federal 56 (41) (26)
Foreign (96) 5 (35)
State (7) (6) –
(47) (42) (61)
$112 $177 $159
In 2008, our tax provision includes the following significant items:

• Tax impact from impairment charge – During 2008, we recorded a deferred tax benefit of $115 million associated with
impairment charges primarily related to our business in Mexico.
• Tax impact from restructuring – We incurred restructuring charges in the fourth quarter of 2008 which resulted in a tax
benefit of $21 million.
In 2007, our tax provision included higher taxes on higher international earnings, as well as the following significant items:
• Valuation allowances – During 2007, we reversed deferred tax asset valuation allowances resulting in an $11 million tax
benefit. These reversals were due to improved profitability trends in Russia.
• Tax audit settlement – The statute of limitations for the IRS audit of our 2001-2002 tax returns closed on June 30, 2007,
and we released approximately $46 million in reserves for uncertain tax benefits relating to such audit.
• Tax rate changes – During 2007, changes to the income tax laws in Canada, Mexico and certain state jurisdictions in the
U.S. were enacted. These law changes required us to re-measure our net deferred tax liabilities which resulted in a net
decrease to our income tax expense of approximately $13 million before the impact of minority interest.
In 2006, our tax provision included increased taxes on U.S. earnings and additional contingencies related to certain historic
tax positions, as well as the following significant items:
• Valuation allowances – During 2006, we reversed deferred tax asset valuation allowances resulting in a $34 million tax
benefit. These reversals were due to improved profitability trends and certain restructurings in Spain, Russia and Turkey.
• Tax audit settlement – The statute of limitations for the IRS audit of our 1999-2000 tax returns closed on December 30,
2006, and we released approximately $55 million in tax contingency reserves relating to such audit.
• Tax rate changes – During 2006, changes to the income tax laws in Canada, Turkey and certain jurisdictions within the
U.S. were enacted. These law changes required us to re-measure our net deferred tax liabilities using lower tax rates which
decreased our income tax expense by approximately $11 million before the impact of minority interest.
Our U.S. and foreign income before income taxes is set forth below:
2008 2007 2006

U.S. $ 428 $474 $485
Foreign (154) 235 196
$ 274 $709 $681
Below is the reconciliation of our income tax rate from the U.S. federal statutory rate to our effective tax rate:
2008 2007 2006
Income taxes computed at the U.S. federal statutory rate 35.0% 35.0% 35.0%
State income tax, net of federal tax benefit (0.5) 2.2 4.2
Impact of foreign results (17.7) (4.5) (1.8)
Change in valuation allowances, net 4.2 (3.5) (7.5)
Nondeductible expenses 11.9 2.6 1.9
Other, net (3.5) 1.5 1.3
Impairment charges 10.5 – –
Release of tax reserves from audit settlements – (6.5) (8.0)
Tax rate change charge (benefit) 0.8 (1.8) (1.7)
Total effective income tax rate 40.7% 25.0% 23.4%
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PART II (continued)
The 2008 percentages above are impacted by the pre-tax impact of impairment and restructuring charges.
The details of our 2008 and 2007 deferred tax liabilities (assets) are set forth below:
2008 2007
Intangible assets and property, plant and equipment $ 1,464 $1,585
Investments 305 178
Other 26 41
Gross deferred tax liabilities 1,795 1,804
Net operating loss carryforwards (445) (366)
Employee benefit obligations (441) (248)
Various liabilities and other (279) (229)
Gross deferred tax assets (1,165) (843)
Deferred tax asset valuation allowance 227 244
Net deferred tax assets (938) (599)
Net deferred tax liability $ 857 $1,205
Classification within the Consolidated Balance Sheets
Prepaid expenses and other current assets $ (86) $ (129)
Other assets (26) (24)
Accounts payable and other current liabilities 3 2
Deferred income taxes 966 1,356
Net amount recognized $ 857 $1,205
We have net operating loss carryforwards (“NOLs”) totaling $1,681 million at December 27, 2008, which resulted in deferred
tax assets of $445 million and which may be available to reduce future taxes in the U.S., Spain, Greece, Turkey, Russia and
Mexico. Of these NOLs, $12 million expire in 2009, $657 million expire at various times between 2010 and 2028, and
$1,012 million have an indefinite life. At December 27, 2008, we have tax credit carryforwards in the U.S. of $4 million with an
indefinite carryforward period and in Mexico of $34 million, which expire at various times between 2009 and 2017.
We establish valuation allowances on our deferred tax assets, including NOLs and tax credits, when the amount of expected
future taxable income is not likely to support the use of the deduction or credit. Our valuation allowances, which reduce our
deferred tax assets to an amount that will more likely than not be realized, were $227 million at December 27, 2008. Our
valuation allowance decreased $17 million in 2008, and increased $49 million in 2007.
Deferred taxes have not been recognized on the excess of the amount for financial reporting purposes over the tax basis of
investments in foreign subsidiaries that are expected to be permanent in duration. This amount becomes taxable upon a
repatriation of assets from the subsidiary or a sale or liquidation of the subsidiary. The amount of such temporary difference
totaled approximately $1,048 million at December 27, 2008 and $1,113 million at December 29, 2007, respectively.
Determination of the amount of unrecognized deferred income taxes related to this temporary difference is not practicable.
Income taxes receivable from taxing authorities were $25 million and $19 million at December 27, 2008 and December 29, 2007,
respectively. Such amounts are recorded within prepaid expenses and other current assets in our Consolidated Balance
Sheets. Income taxes payable to taxing authorities were $20 million and $36 million at December 27, 2008 and December 29,
2007, respectively. Such amounts are recorded within accounts payable and other current liabilities in our Consolidated
Balance Sheets.
Income taxes receivable from PepsiCo were $1 million and $7 million at December 27, 2008 and December 29, 2007,
respectively. Such amounts are recorded within accounts receivable in our Consolidated Balance Sheets. Amounts paid to
taxing authorities and PepsiCo for income taxes were $142 million, $195 million and $203 million in 2008, 2007 and 2006,
respectively.
We file annual income tax returns in the U.S. federal jurisdiction, various U.S. state and local jurisdictions, and in various
foreign jurisdictions. Our tax filings are subject to review by various tax authorities who may disagree with our positions.
A number of years may elapse before an uncertain tax position, for which we have established tax reserves, is audited and
finally resolved. While it is often difficult to predict the final outcome or the timing of the resolution of an audit, we believe
that our reserves for uncertain tax benefits reflect the outcome of tax positions that is more-likely than not to occur. We
adjust these reserves, as well as the related interest and penalties, in light of changing facts and circumstances. The
resolution of a matter could be recognized as an adjustment to our provision for income taxes and our deferred taxes in the
period of resolution, and may also require a use of cash.
Our major taxing jurisdictions include the U.S., Mexico, Canada and Russia. The following table summarizes the years that
remain subject to examination and the years currently under audit by major tax jurisdictions:
Years Subject to
Jurisdiction Examination Years Under Audit
U.S. Federal 2003-2007 2003-2005
Mexico 2002-2007 2002-2003
Canada 2006-2007 2006
Russia 2005-2007 2005-2007
We also have a tax separation agreement with PepsiCo, which among other provisions, specifies that PepsiCo maintain full
control and absolute discretion for any combined or consolidated tax filings for tax periods ended on or before our initial
public offering that occurred in March 1999. In accordance with the tax separation agreement, we will bear our allocable
share of any cost or benefit resulting from the settlement of tax matters affecting us for these tax periods. The IRS has
issued a Revenue Agent’s Report (“RAR”) related to PBG and PepsiCo’s joint tax returns for 1998 through March 1999. We
have agreed with the IRS conclusion, except for one matter which continues to be in dispute.
We currently have on-going income tax audits in our major tax jurisdictions, where issues such as deductibility of certain
expenses have been raised. In Canada, income tax audits have been completed for all tax
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years through 2005. We are in agreement with the audit results except for one matter which we continue to dispute for our
1999 through 2005 tax years. In January, 2009, we reached an agreement with the IRS related to our 2003-2005 audit years,
which will result in a cash payment of approximately $4 million.
We believe that it is reasonably possible that our worldwide reserves for uncertain tax benefits could decrease in the range
of $130 million to $170 million within the next twelve months as a result of the completion of audits in various jurisdictions,
including the settlement with the IRS and the expiration of statute of limitations. The reductions in our tax reserves will
result in a combination of additional tax payments, the adjustment of certain deferred taxes or the recognition of tax benefits
in our income statement. In the event that we cannot reach settlement of some of these audits, our tax reserves may
increase, although we cannot estimate such potential increases at this time.
Below is a reconciliation of the beginning and ending amount of our reserves for income taxes which are recorded in our
Consolidated Balance Sheets.
2008 2007
Reserves (excluding interest and penalties)
Balance at beginning of year $220 $239
Increases due to tax positions related to prior years 18 32
Increases due to tax positions related to the current year 13 15
Decreases due to tax positions related to prior years (11) (19)
Decreases due to settlements with taxing authorities (2) (6)
Decreases due to lapse of statute of limitations (7) (49)
Currency translation adjustment (19) 8
Balance at end of year $212 $220
Other liabilities $209 $212
Accounts payable and other current liabilities – 5
Deferred income taxes 3 3
Total amount of reserves recognized $212 $220
Of the $212 million of 2008 income tax reserves above, approximately $161 million would impact our effective tax rate over
time, if recognized.
2008 2007
Interest and penalties accrued $95 $77
We recognized $23 million of expense and $1 million of expense, net of reversals, during the fiscal years 2008 and 2007,
respectively, for interest and penalties related to income tax reserves in the income tax expense line of our Consolidated
Statements of Operations.
Note 14 –Segment Information

We operate in one industry, carbonated soft drinks and other ready-to-drink beverages, and all of our segments derive
revenue from these products. PBG has three reportable segments — U.S. & Canada, Europe (which includes Spain, Russia,
Greece and Turkey) and Mexico.
Operationally, the Company is organized along geographic lines with specific regional management teams having
responsibility for the financial results in each reportable segment. We evaluate the performance of these segments based on
operating income or loss. Operating income or loss is exclusive of net interest expense, minority interest, foreign exchange
gains and losses and income taxes.
Net Revenues
2008 2007 2006
U.S. & Canada $10,300 $10,336 $ 9,910
Europe 2,115 1,872 1,534
Mexico 1,381 1,383 1,286
Worldwide net revenues $13,796 $13,591 $12,730
Net revenues in the U.S. were $9,097 million, $9,202 million and $8,901 million in 2008, 2007 and 2006, respectively. In 2008,
2007 and 2006, the Company did not have one individual customer that represented 10 percent of total revenues, although
sales to Wal-Mart Stores, Inc. and its affiliated companies were 9.9 percent of our revenues in 2008, primarily as a result of
transactions in the U.S. & Canada segment.
Operating Income / (Loss)
2008 2007 2006
U.S. & Canada $ 886 $ 893 $ 878
Europe 101 106 57
Mexico (338) 72 82
Worldwide operating income 649 1,071 1,017
Interest expense, net 290 274 266
Minority interest 60 94 59
Income before income taxes $ 274 $ 709 $ 681
T otal Assets Long-Lived Assets(1)
2008 2007 2006 2008 2007 2006
U.S. & Canada $ 9,815 $ 9,737 $ 9,044 $7,466 $ 7,572 $7,150
Europe(2) 2,222 1,671 1,072 1,630 1,014 554
Mexico 945 1,707 1,811 745 1,443 1,474
Worldwide total $12,982 $13,115 $11,927 $9,841 $10,029 $9,178
(1) Long-lived assets represent property, plant and equipment, other intangible assets, goodwill, investments in noncontrolled affiliates and other assets.
(2) Long-lived assets include an equity method investment in Lebedyansky with a net book value of $617 million as of December 27, 2008.
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PART II (continued)
Long-lived assets in the U.S. were $6,468 million, $6,319 million and $6,108 million in 2008, 2007 and 2006, respectively. Long-lived
assets in Russia were $1,290 million, $626 million and $213 million in 2008, 2007 and 2006, respectively.
Capital Expenditures Depreciation and Amortization
2008 2007 2006 2008 2007 2006
U.S. & Canada $528 $626 $558 $499 $510 $514
Europe 147 146 99 86 72 52
Mexico 85 82 68 88 87 83
Worldwide total $760 $854 $725 $673 $669 $649
Note 15 –Related Party Transactions

PepsiCo is a related party due to the nature of our franchise relationship and its ownership interest in our Company. The most
significant agreements that govern our relationship with PepsiCo consist of:
(1) Master Bottling Agreement for cola beverages bearing the Pepsi-Cola and Pepsi trademarks in the U.S.; bottling agreements and
distribution agreements for non-cola beverages; and a master fountain syrup agreement in the U.S.;
(2) Agreements similar to the Master Bottling Agreement and the non-cola agreement for each country in which we operate, as well
as a fountain syrup agreement for Canada;
(3) A shared services agreement where we obtain various services from PepsiCo and provide services to PepsiCo;
(4) Russia Venture Agreement related to the formation of PR Beverages;
(5) Russia Snack Food Distribution Agreement pursuant to which our PR Beverages venture purchases snack food products from
Frito-Lay, Inc. (“Frito”), a subsidiary of PepsiCo, for sale and distribution in the Russian Federation; and
(6) Transition agreements that provide certain indemnities to the parties, and provide for the allocation of tax and other assets,
liabilities and obligations arising from periods prior to the initial public offering.
The Master Bottling Agreement provides that we will purchase our entire requirements of concentrates for the cola beverages from
PepsiCo at prices and on terms and conditions determined from time to time by PepsiCo. Additionally, we review our annual
marketing, advertising, management and financial plans each year with PepsiCo for its approval. If we fail to submit these plans, or if
we fail to carry them out in all material respects, PepsiCo can terminate our beverage agreements. If our beverage agreements with
PepsiCo are terminated for this or for any other reason, it would have a material adverse effect on our business and financial results.
On March 1, 2007, together with PepsiCo, we formed PR Beverages, a venture that enables us to strategically invest in Russia to
accelerate our growth. PBG contributed its business in Russia to PR Beverages, and PepsiCo entered into bottling agreements with
PR Beverages for PepsiCo beverage products sold in Russia on the same terms as in effect for PBG immediately prior to the venture.
PR Beverages has an exclusive license to manufacture and sell PepsiCo concentrate for such products. PR Beverages has contracted
with a PepsiCo subsidiary to manufacture such concentrate.
The following income (expense) amounts are considered related party transactions as a result of our relationship with PepsiCo and
its affiliates:
2008 2007 2006
Net revenues:
Bottler incentives and other arrangements(a) $ 93 $ 66 $ 67
Cost of sales:
Purchases of concentrate and
finished products, and
royalty fees(b) $(3,451) $(3,406) $(3,227)
Bottler incentives and other arrangements(a) 542 582 570
Total cost of sales $(2,909) $(2,824) $(2,657)
Selling, delivery and administrative expenses:
Bottler incentives and other arrangements(a) $ 56 $ 66 $ 69
Fountain service fee(c) 187 188 178
Frito-Lay purchases(d) (355) (270) (198)
Shared services:(e)
Shared services expense (52) (57) (61)
Shared services revenue 7 8 8
Net shared services (45) (49) (53)
Total selling, delivery and
administrative expenses $ (157) $ (65) $ (4)
Income tax benefit:(f) $ 1 $ 7 $ 6
(a) Bottler Incentives and Other Arrangements – In order to promote PepsiCo beverages, PepsiCo, at its discretion, provides us with
various forms of bottler incentives. These incentives cover a variety of initiatives, including direct marketplace support and
advertising support. We record most of these incentives as an adjustment to cost of sales unless the incentive is for reimbursement
of a specific, incremental and identifiable cost. Under these conditions, the incentive would be recorded as an offset against the
related costs, either in net revenues or selling, delivery and administrative expenses. Changes in our bottler incentives and funding
levels could materially affect our business and financial results.
(b) Purchases of Concentrate and Finished Product – As part of our franchise relationship, we purchase concentrate from PepsiCo,
pay royalties and produce or distribute other products through various arrangements with PepsiCo or PepsiCo joint ventures. The
prices we pay for concentrate, finished goods and royalties are generally determined by PepsiCo at its sole
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discretion. Concentrate prices are typically determined annually. Effective January 2009, PepsiCo increased the price of U.S.
concentrate by four percent. Significant changes in the amount we pay PepsiCo for concentrate, finished goods and royalties could
materially affect our business and financial results. These amounts are reflected in cost of sales in our Consolidated Statements of
Operations.
(c) Fountain Service Fee – We manufacture and distribute fountain products and provide fountain equipment service to PepsiCo
customers in some territories in accordance with the Pepsi beverage agreements. Fees received from PepsiCo for these transactions
offset the cost to provide these services. The fees and costs for these services are recorded in selling, delivery and administrative
expenses in our Consolidated Statements of Operations.
(d) Frito-Lay Purchases – We purchase snack food products from Frito for sale and distribution in Russia primarily to accommodate
PepsiCo with the infrastructure of our distribution network. Frito would otherwise be required to source third-party distribution
services to reach their customers in Russia. We make payments to PepsiCo for the cost of these snack products and retain a minimal
net fee based on the gross sales price of the products. Payments for the purchase of snack products are reflected in selling, delivery
and administrative expenses in our Consolidated Statements of Operations.
(e) Shared Services – We provide to and receive various services from PepsiCo and PepsiCo affiliates pursuant to a shared services
agreement and other arrangements. In the absence of these agreements, we would have to obtain such services on our own. We
might not be able to obtain these services on terms, including cost, which are as favorable as those we receive from PepsiCo. Total
expenses incurred and income generated is reflected in selling, delivery and administrative expenses in our Consolidated Statements
of Operations.
(f) Income Tax Benefit – Includes settlements under the tax separation agreement with PepsiCo.
Other Related Party Transactions

Bottling LLC will distribute pro rata to PepsiCo and PBG, based upon membership interest, sufficient cash such that the aggregate
cash distributed to PBG will enable PBG to pay its taxes, share repurchases, dividends and make interest payments for its internal
and external debt. PepsiCo’s pro rata cash distribution during 2008, 2007 and 2006 from Bottling LLC was $73 million, $17 million and
$19 million, respectively.
In accordance with our tax separation agreement with PepsiCo, in 2006 PBG reimbursed PepsiCo $5 million for our obligations with
respect to certain IRS matters relating to the tax years 1998 through March 1999.
There are certain manufacturing cooperatives whose assets, liabilities and results of operations are consolidated in our financial
statements. Concentrate purchases from PepsiCo by these cooperatives, not included in the table above, for the years ended 2008,
2007 and 2006 were $140 million, $143 million and $72 million, respectively. We also have equity investments in certain other
manufacturing cooperatives. Total purchases of finished goods from these cooperatives, not included in the table above, for the
years ended 2008, 2007 and 2006 were $61 million, $66 million and $71 million, respectively. These manufacturing cooperatives
purchase concentrate from PepsiCo for certain of its finished goods sold to the Company.
As of December 27, 2008 and December 29, 2007, the receivables from PepsiCo and its affiliates were $154 million and $188 million,
respectively. Our receivables from PepsiCo are shown as part of accounts receivable in our Consolidated Financial Statements. As of
December 27, 2008 and December 29, 2007, the payables to PepsiCo and its affiliates were $217 million and $255 million, respectively.
Our payables to PepsiCo are shown as part of accounts payable and other current liabilities in our Consolidated Financial
Statements.
As a result of the formation of PR Beverages, PepsiCo has agreed to contribute $83 million plus accrued interest to the venture in the
form of property, plant and equipment. PepsiCo has contributed $49 million in regards to this note. The remaining balance to be
contributed to the venture is $39 million as of December 27, 2008.
Two of our board members have been designated by PepsiCo. These board members do not serve on our Audit and Affiliated
Transactions Committee, Compensation and Management Development Committee or Nominating and Corporate Governance
Committee. In addition, one of the managing directors of Bottling LLC is an officer of PepsiCo.
Note 16 – Restructuring Charges

On November 18, 2008, we announced a restructuring program to enhance the Company’s operating capabilities in each of our
reporting segments with the objective to strengthen customer service and selling effectiveness; simplify decision making and
streamline the organization; drive greater cost productivity to adapt to current macroeconomic challenges; and rationalize the
Company’s supply chain infrastructure. As part of the restructuring program, approximately 3,150 positions will be eliminated across
all reporting segments, four facilities will be closed in the U.S., three plants and about 30 distribution centers will be closed in Mexico
and about 700 routes will be eliminated in Mexico. In addition, the Company will modify its U.S. defined benefit pension plans, which
will generate long-term savings and significantly reduce future financial obligations.
The Company expects to record pre-tax charges of $140 million to $170 million over the course of the restructuring program which is
primarily for severance and related benefits, pension and other employee-related costs and other charges including employee
relocation and asset disposal costs. During 2008, we eliminated approximately 1,050 positions across all reporting segments and
closed three facilities in the U.S., two plants in Mexico and eliminated 126 routes in Mexico. As of December 27, 2008, the Company
incurred a pre-tax charge of approximately $83 million, which was recorded in selling, delivery and administrative expenses. The
remaining costs are expected to be incurred in fiscal year 2009.
The Company expects about $130 million in pre-tax cash expenditures from these restructuring actions, of which $13 million was
recognized in the fourth quarter of 2008, with the balance expected to occur in 2009 and 2010. This includes $2 million of employee
benefit payments pursuant to existing unfunded termination indemnity plans. These benefit payments have been accrued for in
previous periods, and therefore, are not included in our estimated cost for this program and are not included in the tables below. The
following table summarizes the pre-tax costs associated with the
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PART II (continued)
restructuring program by reportable segment for the year ended December 27, 2008:
U.S. &
Worldwide Canada Mexico Europe
Costs incurred through December 27, 2008 $ 83 $ 53 $ 3 $ 27
Costs expected to be incurred through December 26,
2009 57-87 36-47 20-35 1-5
T otal costs expected to be incurred $140-$170 $89-$100 $23-$38 $28-$32
The following table summarizes the nature of and activity related to pre-tax costs and cash payments associated with the
restructuring program for the year ended December 27, 2008:
Asset
P ension & Disposal,
Severance Other Employee
& Related Related Relocation
T otal Benefits Costs & Other
Costs accrued $ 83 $ 47 $ 29 $ 7
Cash payments (11) (10) – (1)
Non-cash settlements (30) (1) (23) (6)
Remaining costs accrued at December 27, 2008 $ 42 $ 36 $ 6 $ –
Note 17 – Accumulated Other Comprehensive Loss

The year-end balances related to each component of AOCL were as follows:
2008 2007 2006

Net currency translation adjustment $(355) $ 199 $ (21)
Cash flow hedge adjustment(1) (23) 10 11
Minimum pension liability adjustment(2) – – (192)
Adoption of SFAS 158(3) – – (159)
Pension and postretirement medical benefit plans adjustment(4) (560) (257) –
Accumulated other comprehensive loss $(938) $ (48) $(361)
(1) Net of minority interest and taxes of $20 million in 2008, $(8) million in 2007 and $(7) million in 2006.
(2) Net of minority interest and taxes of $143 million in 2006.
(3) Net of minority interest and taxes of $124 million in 2006.
(4) Net of minority interest and taxes of $421 million in 2008 and $195 million in 2007.
Note 18 – Supplemental Cash Flow Information

The table below presents the Company’s supplemental cash flow information:
2008 2007 2006

Non-cash investing and financing activities:
(Decrease) Increase in accounts payable related to capital expenditures $(67) $ 15 $ 7
Acquisition of intangible asset $ – $315 $ –
Liabilities assumed in conjunction with acquisition of bottlers $ 22 $ 1 $20
Capital-in-kind contributions $ 34 $ 15 $ –
Share compensation $ 4 $ – $ –
Note 19 – Contingencies
We are subject to various claims and contingencies related to lawsuits, environmental and other matters arising out of the normal
course of business. We believe that the ultimate liability arising from such claims or contingencies, if any, in excess of amounts
already recognized is not likely to have a material adverse effect on our results of operations, financial position or liquidity.
Note 20 – Selected Quarterly Financial Data (unaudited)

Quarter to quarter comparisons of our financial results are impacted by our fiscal year cycle and the seasonality of our business. The
seasonality of our operating results arises from higher sales in the second and third quarters versus the first and fourth quarters of
the year, combined with the impact of fixed costs, such as depreciation and interest, which are not significantly impacted by
business seasonality.
First S e con d Th ird Fourth
Q u arte r Q u arte r Q u arte r Q u arte r Fu ll Ye ar
2008(1)
Net revenues $2,651 $3,522 $3,814 $3,809 $13,796
Gross profit $1,169 $1,606 $1,737 $1,698 $ 6,210
Operating income (loss) $ 108 $ 350 $ 455 $ (264) $ 649
Net income (loss) $ 28 $ 174 $ 231 $ (271) $ 162
Diluted earnings (loss) per
share(2) $ 0.12 $ 0.78 $ 1.06 $ (1.28) $ 0.74
First Second T hird Fourth

Quarter Quarter Quarter Quarter Full Year
2007(1)
Net revenues $2,466 $3,360 $3,729 $4,036 $13,591
Gross profit $1,123 $1,535 $1,726 $1,837 $ 6,221
Operating income $ 120 $ 338 $ 433 $ 180 $ 1,071
Net income $ 29 $ 162 $ 260 $ 81 $ 532
Diluted earnings per share(2) $ 0.12 $ 0.70 $ 1.12 $ 0.35 $ 2.29
(1) For additional unaudited information see “ Items affecting comparability of our financial results” in Management’s Financial Review in Item 7.
(2) Diluted earnings per share are computed independently for each of the periods presented.
Note 21 – Subsequent Event

On January 14, 2009, the Company issued an additional $750 million in senior notes, with a coupon rate of 5.125 percent, maturing in
2019. The net proceeds of the offering, together with a portion of the proceeds from the offering of our senior notes issued in the
fourth quarter of 2008, were used to repay our senior notes due in 2009, at their scheduled maturity on February 17, 2009. Any excess
proceeds of this offering will be used for general corporate purposes. The next significant scheduled debt maturity is not until 2012.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of
Somers, New York
We have audited the accompanying consolidated balance sheets of The Pepsi Bottling Group, Inc. and subsidiaries (the
“Company”) as of December 27, 2008 and December 29, 2007, and the related consolidated statements of operations, changes in
shareholders’ equity, and cash flows for each of the three years in the period ended December 27, 2008. Our audits also included the
financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the
responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial
statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company
as of December 27, 2008 and December 29, 2007, and the results of their operations and their cash flows for each of the three years in
the period ended December 27, 2008, in conformity with accounting principles generally accepted in the United States of America.
Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements
taken as a whole, presents fairly, in all material respects, the information set forth therein.
As discussed in Note 2 to the consolidated financial statements, effective December 30, 2007 and December 30, 2006, the Company
adopted Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and 132(R),” related to the measurement date provision
and the requirement to recognize the funded status of a benefit plan, respectively.
As discussed in Note 2 to the consolidated financial statements, effective December 31, 2006, the Company adopted Financial
Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB
Statement No. 109.”
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
Company’s internal control over financial reporting as of December 27, 2008, based on the criteria established in Internal
Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our
report dated February 20, 2009 expressed an unqualified opinion on the Company’s internal control over financial reporting.
/s/ Deloitte & Touche LLP
New York, New York

February 20, 2009
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PART II (continued)
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Included in Item 7, Management’s Financial Review – Market Risks and Cautionary Statements.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Included in Item 7, Management’s Financial Review – Financial Statements.
Bottling LLC’s Annual Report on Form 10-K for the fiscal year ended December 27, 2008 is attached as Exhibit 99.1 to PBG’s Annual
Report on Form 10-K as required by the SEC as a result of Bottling LLC’s guarantee of up to $1,000,000,000 aggregate principal
amount of our 7% Senior Notes due in 2029.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures
PBG’s management carried out an evaluation, as required by Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange
Act”), with the participation of our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of our disclosure
controls and procedures, as of the end of our last fiscal quarter. Based upon this evaluation, the Chief Executive Officer and the
Chief Financial Officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by
this Annual Report on Form 10-K, such that the information relating to PBG and its consolidated subsidiaries required to be
disclosed in our Exchange Act reports filed with the SEC (i) is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms, and (ii) is accumulated and communicated to PBG’s management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control Over Financial Reporting

PBG’s management is responsible for establishing and maintaining adequate internal control over financial reporting for PBG.
Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements in accordance with generally accepted accounting principles and includes
those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of PBG’s assets, (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that PBG’s receipts and
expenditures are being made only in accordance with authorizations of PBG’s management and directors, and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of PBG’s assets that could have
a material effect on the financial statements.
As required by Section 404 of the Sarbanes-Oxley Act of 2002 and the related rule of the SEC, management assessed the
effectiveness of PBG’s internal control over financial reporting using the Internal Control-Integrated Framework developed by the
Committee of Sponsoring Organizations of the Treadway Commission.
Based on this assessment, management concluded that PBG’s internal control over financial reporting was effective as of
December 27, 2008. Management has not identified any material weaknesses in PBG’s internal control over financial reporting as of
December 27, 2008.
Our independent registered public accounting firm, Deloitte & Touche, LLP (“D&T”), who has audited and reported on our financial
statements, issued an attestation report on PBG’s internal control over financial reporting. D&T’s reports are included in this Annual
Report on Form 10-K.
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The Board of Directors and Shareholders of
Somers, New York
We have audited the internal control over financial reporting of The Pepsi Bottling Group, Inc. and subsidiaries (the “Company”) as
of December 27, 2008, based on criteria established in Internal Control – Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective
internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting,
included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to
express an opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control
over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in
the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal
executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors,
management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with
authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper
management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.
Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject
to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 27,
2008, based on the criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated financial statements and financial statement schedule as of and for the year ended December 27, 2008 of the Company
and our report dated February 20, 2009 expressed an unqualified opinion on those financial statements and financial statement
schedule and includes an explanatory paragraph regarding the Company’s adoption of Statement of Financial Accounting Standards
No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements
No. 87, 88, 106, and 132(R),” related to the measurement date provision.

New York, New York
February 20, 2009
Changes in Internal Control Over Financial Reporting

PBG’s management also carried out an evaluation, as required by Rule 13a-15(d) of the Exchange Act, with the participation of our
Chief Executive Officer and our Chief Financial Officer, of changes in PBG’s internal control over financial reporting. Based on this
evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that there were no changes in our internal control
over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION

None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The name, age and background of each of our directors nominated for election are contained under the caption “Election of
Directors” in our Proxy Statement for our 2009 Annual Meeting of Shareholders.
Executive officers are elected by our Board of Directors, and their terms of office continue until the next annual meeting of
the Board or until their successors are elected and have been qualified. There are no family relationships among our
executive officers. Set forth below is information pertaining to our executive officers who held office as of February 6, 2009:
John L. Berisford, 45, was appointed Senior Vice President of Human Resources in March 2005. Mr. Berisford previously
served as Vice President, Field Human Resources and Group Vice President of Human Resources from 2001 to 2004. From
1998 to 2001, Mr. Berisford served as Vice President of Organization Capability. Mr. Berisford joined Pepsi in 1988 and held
a series of staffing, labor relations and organizational capability positions.
Victor L. Crawford, 47, was appointed Senior Vice President of Global Operations and System Transformation in November
2008. Mr. Crawford previously served as Senior Vice President, Worldwide Operations from December 2006 to November
2008. From December 2005 to December 2006, Mr. Crawford served as Senior Vice President and General Manager of PBG’s
Mid-Atlantic Business Unit. Prior to that, Mr. Crawford was with Marriott International where he served as Senior Vice
President of Marriott Distribution Services, Executive Vice President and General Manager and Senior Vice President and
Chief Operations Officer for the Eastern Region of Marriott International from September 2000 until joining PBG in December
2005.
Alfred H. Drewes, 53, was appointed Senior Vice President and Chief Financial Officer in June 2001. Mr. Drewes previously
served as Senior Vice President and Chief Financial Officer of Pepsi-Cola International (“PCI”). Mr. Drewes joined PepsiCo
in 1982 as a financial analyst in New Jersey. During the next nine years, he rose through increasingly responsible finance
positions within Pepsi-Cola North America in field operations and headquarters. In 1991, Mr. Drewes joined PCI as Vice
President of Manufacturing Operations, with responsibility for the global concentrate supply organization. In 1994, he was
appointed Vice President of Business Planning and New Business Development and, in 1996, relocated to London as the
Vice President and Chief Financial Officer of the Europe and Sub-Saharan Africa Business Unit of PCI. Mr. Drewes is also a
director of the Meredith Corporation.
Eric J. Foss, 50, was appointed Chairman of the Board in October 2008 and has been Chief Executive Officer and a member
of our Board since July 2006. Mr. Foss served as our President and Chief Executive Officer from July 2006 to October 2008.
Previously, Mr. Foss served as our Chief Operating Officer from September 2005 to July 2006 and President of PBG North
America from September 2001 to September 2005. Prior to that, Mr. Foss was the Executive Vice President and General
Manager of PBG North America from August 2000 to September 2001. From October 1999 until August 2000, he served as
our Senior Vice President, U.S. Sales and Field Operations, and prior to that, he was our Senior Vice President, Sales and
Field Marketing, since March 1999. Mr. Foss joined the Pepsi-Cola Company in 1982 where he held a variety of field and
headquarters-based sales, marketing and general management positions. From 1994 to 1996, Mr. Foss was General Manager
of Pepsi-Cola North America’s Great West Business Unit. In 1996, Mr. Foss was named General Manager for the Central
Europe Region for PCI, a position he held until joining PBG in March 1999. Mr. Foss is also a director of UDR, Inc. and on
the Industry Affairs Council of the Grocery Manufacturers of America.
Robert C. King, 50, was appointed Executive Vice President and President of North America in November 2008. Previously,
Mr. King served as President of PBG’s North American business from December 2006 to November 2008 and served as
President of PBG’s North American Field Operations from October 2005 to December 2006. Prior to that, Mr. King served as
Senior Vice President and General Manager of PBG’s Mid-Atlantic Business Unit from October 2002 to October 2005. From
2001 to October 2002, he served as Senior Vice President, National Sales and Field Marketing. In 1999, he was appointed
Vice President, National Sales and Field Marketing. Mr. King joined Pepsi-Cola North America in 1989 as a Business
Development Manager and has held a variety of other field and headquarters-based sales and general management
positions.
Yiannis Petrides, 50, is the President of PBG Europe. He was appointed to this position in June 2000, with responsibilities
for our operations in Spain, Greece, Turkey and Russia. Prior to that, Mr. Petrides served as Business Unit General Manager
for PBG in Spain and Greece. Mr. Petrides joined PepsiCo in 1987 in the international beverage division. In 1993, he was
named General Manager of Frito-Lay’s Greek operation with additional responsibility for the Balkan countries. In 1995,
Mr. Petrides was appointed Business Unit General Manager for Pepsi Beverages International’s bottling operation in Spain.
Steven M. Rapp, 55, was appointed Senior Vice President, General Counsel and Secretary in January 2005. Mr. Rapp
previously served as Vice President, Deputy General Counsel and Assistant Secretary from 1999 through 2004. Mr. Rapp
joined PepsiCo as a corporate attorney in 1986 and was appointed Division Counsel of Pepsi-Cola Company in 1994.
Information on compliance with Section 16(a) of the Exchange Act is contained in our Proxy Statement for our 2009 Annual
Meeting of Shareholders under the caption “Ownership of PBG Common Stock – Section 16(a) Beneficial Ownership
Reporting Compliance.”
Information regarding the adoption of our Worldwide Code of Conduct, any material amendments thereto and any related
waivers are contained in our Proxy Statement for our 2009 Annual Meeting of Shareholders under the caption “Corporate
Governance – Worldwide Code of Conduct.”
The identification of our Audit Committee members and our Audit Committee financial expert is contained in our Proxy
Statement for our 2009 Annual Meeting of Shareholders under the caption “Corporate Governance – Committees of the
Board of Directors.”
All of the foregoing information is incorporated herein by reference.
The Worldwide Code of Conduct is posted on our website at www.pbg.com under Investor Relations – Company
Information – Corporate Governance. A copy of our Worldwide Code of Conduct is available upon request without charge
by writing to The Pepsi Bottling Group, Inc., One Pepsi Way, Somers, New York 10589, Attention: Investor Relations.
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ITEM 11. EXECUTIVE COMPENSATION

Information on compensation of our directors and named executive officers is contained in our Proxy Statement for our 2009
Annual Meeting of Shareholders under the captions “Director Compensation” and “Executive Compensation,” respectively,
and is incorporated herein by reference.
Information regarding compensation committee interlocks and insider participation is contained in our Proxy Statement for
our 2009 Annual Meeting of Shareholders under the caption “Corporate Governance – Compensation Committee Interlocks
and Insider Participation” and is incorporated herein by reference.
The information furnished under the caption “Compensation Committee Report” is contained in our Proxy Statement for our
2009 Annual Meeting of Shareholders and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
Securities Authorized for Issuance Under Equity Compensation Plans
The table below sets forth certain information as of December 27, 2008, the last day of the fiscal year, for (i) all equity
compensation plans previously approved by our shareholders and (ii) all equity compensation plans not previously
approved by our shareholders.
Number of securities
remaining available for
Number of securities Weighted-average future issuance under
to be issued upon exercise exercise price of equity compensation plans
of outstanding options, outstanding options, (excluding securities
P lan Category warrants and rights warrants and rights reflected in column (a))
(a) (b) (c)
Equity compensation plans approved by security
holders 30,000,777(1) 24.01 16,407,474
Equity compensation plans not approved by security
holders 1,403,460(2) 14.81
Total 31,404,237 23.60 16,407,474(3)
(1) T he securities reflected in this category are authorized for issuance (i) under exercise of awards granted under the Directors’ Stock P lan and
the 2004 Long-T erm Incentive Plan and (ii) upon exercise of awards granted prior to May 26, 2004 under the following PBG plans:
(A) 1999 Long-T erm Incentive Plan; (B) 2000 Long-T erm Incentive Plan and (C) 2002 Long-T erm Incentive Plan. Effective May 26,
2004, no securities were available for future issuance under the 1999 Long-T erm Incentive Plan, the 2000 Long-T erm Incentive Plan or
the 2002 Long-T erm Incentive Plan.
(2) T he securities reflected in this category are authorized for issuance upon exercise of awards granted prior to May 26, 2004 under the P BG
Stock Incentive Plan (the “ SIP ”). Effective May 26, 2004, no securities were available for future issuance under the SIP.
(3) T he 2004 Long-T erm Incentive Plan and the Directors’ Stock P lan, both of which have been approved by our shareholders, are the only
equity compensation plans that provide securities remaining available for future issuance.
Description of the PBG Stock Incentive Plan

Effective May 26, 2004, no securities were available for future issuance under the SIP. The SIP is a non-shareholder
approved, broad-based plan that was adopted by our Board of Directors on March 30, 1999. No grants, other than stock
option awards, have been made under the SIP. All stock options were granted to select groups of non-management
employees with an exercise price equal to the fair market value of our common stock on the grant date. The options
generally become exercisable three years from the date of grant and have a ten-year term. At year-end 2008, options
covering 1,403,460 shares of our common stock were outstanding under the SIP. The SIP is filed as Exhibit 10.11 to our
Annual Report on Form 10-K for the year ended December 25, 1999 and qualifies this summary in its entirety.
Security Ownership
Information on the number of shares of our common stock beneficially owned by each director, each named executive
officer and by all directors and all executive officers as a group is contained under the caption “Ownership of PBG Common
Stock – Ownership of Common Stock by Directors and Executive Officers” and information on each beneficial owner of
more than 5% of PBG common stock is contained under the caption “Ownership of PBG Common Stock – Stock Ownership
of Certain Beneficial Owners” in our Proxy Statement for our 2009 Annual Meeting of Shareholders and is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information relating to certain transactions between PBG, PepsiCo and their affiliates and certain other persons, as well as
our procedures for the review, approval or ratification of any such transactions, is set forth under the caption “Transactions
with Related Persons” in our Proxy Statement for our 2009 Annual Meeting of Shareholders and is incorporated herein by
reference.
Information on the independence of our directors is contained under the caption “Corporate Governance – Director
Independence” in our Proxy Statement for our 2009 Annual Meeting of Shareholders and is incorporated herein by
reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information relating to audit fees, audit-related fees, tax fees and all other fees billed in fiscal years 2008 and 2007 by
Deloitte & Touche LLP for services rendered to PBG is set forth under the caption “Independent Accountants Fees and
Services” in the Proxy Statement for our 2009 Annual Meeting of Shareholders and is incorporated herein by reference. In
addition, information relating to the pre-approval policies and procedures of the Audit and Affiliated Transactions
Committee is set forth under the caption “Independent Accountants Fees and Services – Pre-Approval Policies and
Procedures” in the Proxy Statement for our 2009 Annual Meeting of Shareholders and is incorporated herein by reference.
59
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) 1. Financial Statements. The following consolidated financial statements of PBG and its subsidiaries are included herein:
Consolidated Statements of Operations – Fiscal years ended December 27, 2008, December 29, 2007 and December 30, 2006.
Consolidated Statements of Cash Flows – Fiscal years ended December 27, 2008, December 29, 2007 and December 30, 2006.
Consolidated Balance Sheets – December 27, 2008 and December 29, 2007.
Consolidated Statements of Changes in Shareholders’ Equity – Fiscal years ended December 27, 2008, December 29, 2007
and December 30, 2006.
Report of Independent Registered Public Accounting Firm
2. Financial Statement Schedules. The following financial statement schedule of PBG and its subsidiaries is included in this
Report on the page indicated:
P age
Schedule II – Valuation and Qualifying Accounts for the fiscal years ended December 27, 2008, December 29, 2007
and December 30, 2006 63
3. Exhibits
See Index to Exhibits on pages 64 - 66.
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SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, The Pepsi Bottling Group, Inc. has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: February 19, 2009
/s/ Eric J. Foss

Eric J. Foss
Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on
behalf of The Pepsi Bottling Group, Inc. and in the capacities and on the dates indicated.
SIGNAT URE T IT LE DAT E
/s/ Eric J. Foss Chairman of the Board and Chief Executive Officer (Principal February 19,
Executive Officer) 2009
Eric J. Foss
/s/ Alfred H. Drewes Senior Vice President and Chief Financial Officer (Principal February 19,
Financial Officer) 2009
Alfred H. Drewes
/s/ Thomas M. Lardieri Vice President and Controller (Principal Accounting Officer) February 19,
2009
Thomas M. Lardieri
/s/ Linda G. Alvarado Director February 19,

2009
Linda G. Alvarado
/s/ Barry H. Beracha Director February 19,

2009
Barry H. Beracha
/s/ John C. Compton Director February 19,

2009
John C. Compton
/s/ Ira D. Hall Director February 19,

2009
Ira D. Hall
/s/ Susan D. Kronick Director February 19,

2009
Susan D. Kronick
/s/ Blythe J. McGarvie Director February 19,

2009
Blythe J. McGarvie
/s/ John A. Quelch Director February 19,

2009
John A. Quelch
/s/ Javier G. Teruel Director February 19,

2009
Javier G. Teruel
/s/ Cynthia M. Trudell Director February 19,
2009
Cynthia M. Trudell
61
INDEX TO FINANCIAL STATEMENT SCHEDULES
P age
Schedule II – Valuation and Qualifying Accounts for the fiscal years ended December 27, 2008, December 29, 2007 and
December 30, 2006 63
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SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

THE PEPSI BOTTLING GROUP, INC.
Balance At Charges to Accounts Foreign Balance At
Beginning Cost and Written Currency End Of
In millions Of Period Expenses Acquisitions Off T ranslation P eriod
Fiscal Year Ended December 27, 2008
Allowance for losses on trade accounts receivable $ 54 $ 30 $ – $ (9) $ (4) $ 71
Allowance for losses on trade accounts receivable $ 50 $ 11 $ – $ (10) $ 3 $ 54
Allowance for losses on trade accounts receivable $ 51 $ 5 $ – $ (7) $ 1 $ 50
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Index to Exhibits
EXHIBIT NO. DESCRIP T ION OF EXHIBIT
3.1 Amended and Restated Certificate of Incorporation of PBG, which is incorporated herein by reference to
Exhibit 3.1 to PBG’s Quarterly Report on Form 10-Q for the quarter ended June 14, 2008.
3.2 By-Laws of PBG, which are incorporated herein by reference to Exhibit 3.2 to PBG’s Registration Statement
on Form S-1 (Registration No. 333-70291).
4.1 Form of common stock certificate, which is incorporated herein by reference to Exhibit 4 to PBG’s
Registration Statement on Form S-1 (Registration No. 333-70291).
4.2 Indenture dated as of March 8, 1999 by and among PBG, as obligor, Bottling Group, LLC, as guarantor, and
The Chase Manhattan Bank, as trustee, relating to $1,000,000,000 7% Series B Senior Notes due 2029, which
is incorporated herein by reference to Exhibit 10.14 to PBG’s Registration Statement on Form S-1
(Registration No. 333-70291).
4.3 Indenture dated as of November 15, 2002 among Bottling Group, LLC, PepsiCo, Inc., as guarantor, and
JPMorgan Chase Bank, as trustee, relating to $1,000,000,000 45/8% Senior Notes due November 15, 2012,
which is incorporated herein by reference to Exhibit 4.8 to PBG’s Annual Report on Form 10-K for the year
ended December 28, 2002.
4.4 Registration Rights Agreement dated as of November 7, 2002 relating to the $1,000,000,000 45/8% Senior
Notes due November 15, 2012, which is incorporated herein by reference to Exhibit 4.8 to Bottling Group
LLC’s Annual Report on Form 10-K for the year ended December 28, 2002.
4.5 Indenture, dated as of June 10, 2003 by and between Bottling Group, LLC, as obligor, and JPMorgan Chase
Bank, as trustee, relating to $250,000,000 41/8% Senior Notes due June 15, 2015, which is incorporated herein
by reference to Exhibit 4.1 to Bottling Group, LLC’s registration statement on Form S-4 (Registration No. 333-
106285).
4.6 Registration Rights Agreement dated June 10, 2003 by and among Bottling Group, LLC, J.P. Morgan
Securities Inc., Lehman Brothers Inc., Banc of America Securities LLC, Citigroup Global Markets Inc, Credit
Suisse First Boston LLC, Deutsche Bank Securities Inc., Blaylock & Partners, L.P. and Fleet Securities, Inc,
relating to $250,000,000 41/8% Senior Notes due June 15, 2015, which is incorporated herein by reference to
Exhibit 4.3 to Bottling Group, LLC’s registration statement on Form S-4 (Registration No. 333-106285).
4.7 Indenture, dated as of October 1, 2003, by and between Bottling Group, LLC, as obligor, and JPMorgan
Chase Bank, as trustee, which is incorporated herein by reference to Exhibit 4.1 to Bottling Group, LLC’s
Current Report on Form 8-K dated October 3, 2003.
4.8 Form of Note for the $400,000,000 5.00% Senior Notes due November 15, 2013, which is incorporated herein
by reference to Exhibit 4.1 to Bottling Group, LLC’s Current Report on Form 8-K dated November 13, 2003.
4.9 Indenture, dated as of March 30, 2006, by and between Bottling Group, LLC, as obligor, and JPMorgan
Chase Bank, N.A., as trustee, which is incorporated herein by reference to Exhibit 4.1 to PBG’s Quarterly
Report on Form 10-Q for the quarter ended March 25, 2006.
4.10 Form of Note for the $800,000,000 51/2% Senior Notes due April 1, 2016, which is incorporated herein by
reference to Exhibit 4.2 to PBG’s Quarterly Report on Form 10-Q for the quarter ended March 25, 2006.
4.11 Indenture, dated as of October 24, 2008, by and among Bottling Group, LLC, as obligor, PepsiCo, Inc., as
guarantor, and The Bank of New York Mellon, as trustee, relating to $1,300,000,000 6.95% Senior Notes due
March 15, 2014, which is incorporated herein by reference to Exhibit 4.1 to Bottling Group, LLC’s Current
Report on Form 8-K dated October 21, 2008.
4.12 Form of Note for the $1,300,000,000 6.95% Senior Notes due March 15, 2014, which is incorporated herein by
reference to Exhibit 4.2 to Bottling Group, LLC’s Current Report on Form 8-K dated October 21, 2008.
4.13 Form of Note for the $750,000,000 5.125% Senior Notes due January 15, 2019, which is incorporated herein by
reference to Exhibit 4.1 to Bottling Group, LLC’s Current Report on Form 8-K dated January 14, 2009.
10.1 Form of Master Bottling Agreement, which is incorporated herein by reference to Exhibit 10.1 to PBG’s
10.2 Form of Master Syrup Agreement, which is incorporated herein by reference to Exhibit 10.2 to PBG’s
10.3 Form of Non-Cola Bottling Agreement, which is incorporated herein by reference to Exhibit 10.3 to PBG’s
10.4 Form of Separation Agreement, which is incorporated herein by reference to Exhibit 10.4 to PBG’s
10.5 Form of Shared Services Agreement, which is incorporated herein by reference to Exhibit 10.5 to PBG’s
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10.6 Form of Tax Separation Agreement, which is incorporated herein by reference to Exhibit 10.6 to PBG’s
10.7 Form of Employee Programs Agreement, which is incorporated herein by reference to Exhibit 10.7 to PBG’s
10.8 PBG 1999 Long-Term Incentive Plan, which is incorporated herein by reference to Exhibit 10.9 to PBG’s
Annual Report on Form 10-K for the year ended December 25, 1999.
10.9 PBG Stock Incentive Plan, which is incorporated herein by reference to Exhibit 10.11 to PBG’s Annual Report
on Form 10-K for the year ended December 25, 1999.
10.10 PBG Executive Income Deferral Program as amended, which is incorporated herein by reference to
Exhibit 10.12 to PBG’s Annual Report on Form 10-K for the year ended December 30, 2000.
10.11 PBG Long Term Incentive Plan, which is incorporated herein by reference to Exhibit 10.13 to PBG’s Annual
Report on Form 10-K for the year ended December 30, 2000.
10.12 2002 PBG Long-Term Incentive Plan, which is incorporated herein by reference to Exhibit 10.15 to PBG’s
Annual Report on Form 10-K for the year ended December 28, 2002.
10.13 Form of Mexican Master Bottling Agreement, which is incorporated herein by reference to Exhibit 10.16 to
PBG’s Annual Report on Form 10-K for the year ended December 28, 2002.
10.14 Form of Employee Restricted Stock Agreement under the PBG 2004 Long-Term Incentive Plan, which is
incorporated herein by reference to Exhibit 10.1 to PBG’s Quarterly Report on Form 10-Q for the quarter
ended September 4, 2004.
10.15 Form of Employee Stock Option Agreement under the PBG 2004 Long-Term Incentive Plan, which is
10.16 Form of Non-Employee Director Annual Stock Option Agreement under the PBG Directors’ Stock Plan which
is incorporated herein by reference to Exhibit 10.3 to PBG’s Quarterly Report on Form 10-Q for the quarter
10.17 Form of Non-Employee Director Restricted Stock Agreement under the PBG Directors’ Stock Plan, which is
10.18 Summary of the material terms of the PBG Executive Incentive Compensation Plan, which is incorporated
herein by reference to Exhibit 10.6 to PBG’s Quarterly Report on Form 10-Q for the quarter ended
September 4, 2004.
10.19 Description of the compensation paid by PBG to its non-management directors which is incorporated herein
by reference to the Directors’ Compensation section in PBG’s Proxy Statement for the 2009 Annual Meeting
of Shareholders.
10.20 Form of Director Indemnification, which is incorporated herein by reference to Exhibit 10.1 to PBG’s
Quarterly Report on Form 10-Q for the quarter ended June 11, 2005.
10.21 PBG 2005 Executive Incentive Compensation Plan, which is incorporated herein by reference to Appendix A
to PBG’s Proxy Statement for the 2005 Annual Meeting of Shareholders.
10.22 Form of Employee Restricted Stock Unit Agreement, which is incorporated herein by reference to Exhibit 10.1
to PBG’s Quarterly Report on Form 10-Q for the quarter ended September 3, 2005.
10.23 Form of Non-Employee Director Restricted Stock Unit Agreement under the Amended and Restated PBG
Directors’ Stock Plan which is incorporated herein by reference to Exhibit 10.32 to PBG’s Annual Report on
Form 10-K for the year ended December 31, 2005.
10.24 Private Limited Company Agreement of PR Beverages Limited dated as of March 1, 2007 among PBG
Beverages Ireland Limited, PepsiCo (Ireland), Limited and PR Beverages Limited, which is incorporated
herein by reference to Exhibit 10.1 to PBG’s Quarterly Report on Form 10-Q for the quarter ended March 24,
2007.
10.25 U.S. $1,200,000,000 First Amended and Restated Credit Agreement dated as of October 19, 2007 among The
Pepsi Bottling Group, Inc., as borrower; Bottling Group, LLC, as guarantor; Citigroup Global Markets Inc.
and HSBC Securities (USA) Inc., as joint lead arrangers and book managers; Citibank, N.A., as agent; HSBC
Bank USA, N.A., as syndication agent; and certain other banks identified in the First Amended and Restated
Credit Agreement, which is incorporated herein by reference to Exhibit 10.1 to PBG’s Current Report on
Form 8-K dated October 19, 2007 and filed October 25, 2007.
10.26 Distribution Agreement between PBG and the North American Coffee Partnership, which is incorporated
herein by reference to Exhibit 10.3 to PBG’s Quarterly Report on Form 10-Q for the quarter ended June 14,
2008.
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10.27 Amended and Restated Limited Liability Company Agreement of Bottling Group, LLC, which is
incorporated herein by reference to Exhibit 10.4 to PBG’s Quarterly Report on Form 10-Q for the
quarter ended June 14, 2008.
10.28 Amendment No. 1 to Bottling Group, LLC’s Amended and Restated Limited Liability Company
Agreement, which is incorporated herein by reference to Exhibit 10.5 to PBG’s Quarterly Report on
Form 10-Q for the quarter ended June 14, 2008.
10.29* Amended and Restated PBG Directors’ Stock Plan effective as of October 2, 2008.
10.30* Amended and Restated PBG 2004 Long-Term Incentive Plan effective as of January 1, 2009.
10.31* PBG Director Deferral Program effective as of January 1, 2009.
10.32* Amended and Restated PBG Pension Equalization Plan effective as of January 1, 2009.
10.33* PBG 409A Executive Income Deferral Program as amended effective as of January 1, 2009.
10.34* Amended and Restated PBG Supplemental Savings Program effective as of January 1, 2009.
10.35* Distribution Agreement between PepsiCo Holdings LLC and Frito-Lay Manufacturing LLC effective
as of January 1, 2009.
12* Computation of Ratio of Earnings to Fixed Charges.
21* Subsidiaries of The Pepsi Bottling Group, Inc.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Deloitte & Touche LLP, independent registered public accounting firm of Bottling Group,
LLC.
24* Power of Attorney.
31.1* Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002.
31.2* Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1* Certification by the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
32.2* Certification by the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1* Bottling Group, LLC’s Annual Report on Form 10-K for the fiscal year ended December 27, 2008.
* Filed herewith.
66
Exhibit 10.29
THE PBG DIRECTORS’ STOCK PLAN

(As Amended and Restated as of October 2, 2008)
1. Purposes
The principal purposes of The PBG Directors’ Stock Plan (the “Plan”) are to provide compensation to those members of the Board of
Directors of The Pepsi Bottling Group, Inc. (“PBG”) who are not also employees of PBG, to assist PBG in attracting and retaining outside
directors with experience and ability on a basis competitive with industry practices, and to associate more fully the interests of such directors
with those of PBG’s shareholders.
2. Effective Date
The Plan was unanimously approved by the Board of Directors of PBG, conditional on shareholder approval, and became effective on
May 23, 2001, superseding The PBG Directors’ Stock Plan of 1999. The Plan was amended on January 23, 2003 and further amended and
restated effective as of February 2, 2006, as of July 19, 2006, February 8, 2007 and further amended March 27, 2008. This amendment and
restatement of the Plan is effective as of October 2, 2008, and it shall apply to awards made on or after that date.
3. Administration
The Plan shall be administered and interpreted by the Board of Directors of PBG (the “Board”). The Board shall have full power and
authority to administer and interpret the Plan and to adopt such rules, regulations, guidelines and instruments for the administration of the
Plan and for the conduct of its business as the Board deems necessary or advisable. The Board’s interpretations of the Plan, and all actions
taken and determinations made by the Board pursuant to the powers vested in them hereunder, shall be conclusive and binding on all parties
concerned, including PBG, its directors and shareholders and any employee of PBG. The costs and expenses of administering the Plan shall be
borne by PBG and not charged against any award or to any award recipient.
4. Eligibility
Directors of PBG who are not employees of PBG (“Non-Employee Directors”) are eligible to receive awards under the Plan. Directors of PBG
who are employees of PBG are not eligible to participate in the Plan, but shall be eligible to participate in other PBG benefit and compensation
plans.
5. Initial Award
Under the Plan, each Non-Employee Director shall, on the first day of the month after commencing service as a Non-Employee Director of
PBG, receive a formula grant of restricted stock (“Restricted Stock”). The number of shares of Restricted Stock to be included in each such
award shall be determined by dividing $25,000 by the Fair Market Value (as defined below) of a share of PBG Common Stock on the date of
grant (the “Stock Grant Date”), or if such day is not a trading day on the New York Stock Exchange (“NYSE”), on the immediately preceding
trading day. The number of shares so determined shall be rounded up to the nearest number of whole shares. If the recipient of the Restricted
Stock continuously remains a director of PBG, the Restricted Stock granted hereunder shall vest and any restrictions thereon shall lapse on the
first anniversary of the Stock Grant Date; provided, however, that, in the event of a Non-Employee Director’s death or Disability (as defined in
Section 6(c)), the Restricted Stock granted to such Non-Employee Director shall vest and any restrictions thereon shall lapse immediately.
Notwithstanding the foregoing, a Non-Employee Director may not sell or otherwise transfer any Restricted Stock granted to him or her prior to
the date such Non-Employee Director ceases to serve as a director for any reason. The Non-Employee Director shall have all of the rights of
a stockholder with respect to such Restricted Stock, including the right to receive all dividends or other distributions paid or made with respect
to the stock. Any dividends or distributions that are paid or made in PBG Common Stock shall be subject to the same restrictions as the
Restricted Stock in respect of which such dividends or distributions were paid or made. However, any dividends or distributions paid or made
in cash shall not be subject to the restrictions. Each Restricted Stock award shall be evidenced by an agreement setting forth the terms and
conditions thereof, which terms and conditions shall not be inconsistent with those set forth in this Plan.
6. Annual Stock Option Award

(a) Under the Plan, each Non-Employee Director shall receive an annual formula grant of options to purchase shares of PBG Common Stock
(“Options”) at a fixed price (the “Exercise Price”). Such grant shall be made annually on April 1 (the “Option Grant Date”); provided, however,
that each individual who commences services as a Non-Employee Director after April 1 of a year shall receive a pro-rated annual formula grant
of options (a “Pro-Rated Grant”) with respect to his or her first year of service, on the first day of the month following the date he or she
commences service (the “Pro-Rated Option Grant Date”). To receive a grant of Options, a Non-Employee Director must be actively serving as a
director of PBG on the Option Grant Date or the Pro-Rated Option Grant Date, as applicable.
(b) The number of Options to be included in each annual option award shall be determined by dividing the Grant Amount (as defined
below) by the Fair Market Value (as defined below) of a share of PBG Common Stock on the Option Grant Date or Pro-Rated Option Grant
Date, as applicable, or if such day is not a trading day on the NYSE, on the immediately preceding trading day. Grant Amount shall mean
$210,000, except that, in the case of a Pro-Rated Grant, Grant Amount shall mean the following: (i) $157,500 in the case of an individual who
commences service as a Non-Employee Director of PBG on or after April 2 and on or before June 30; (ii) $105,000 in the case of an individual
who commences service as a Non-Employee Director of PBG on or after July 1 and on or before September 30; (iii) $52,500 in the case of an
individual who commences service as a Non-Employee Director of PBG on or after October 1 and on or before December 31. No Pro-Rated
Grant shall be made in the case of an individual who commences service as a Non-Employee Director of PBG on or after January 1 and on or
before April 1. The number of Options so determined shall be rounded up (if necessary) to the nearest number of whole Options. “Fair Market
Value” shall mean the average of the high and low per share sale prices for PBG Common Stock on the composite tape for securities listed on
the NYSE for the day in question, except that such average price shall be rounded up (if necessary) to the nearest cent.
(c) Options shall vest and become immediately exercisable on the Option Grant Date or Pro-Rated Option Grant Date, as applicable. Each
Option shall have an Exercise Price equal to the Fair Market Value of PBG Common Stock on the Option Grant Date or Pro-Rated Option Grant
Date, as applicable, or if such day is not a trading day on the NYSE, on the immediately preceding trading day. Each Option shall have a term
of ten years; provided, however, in the event the holder thereof shall cease to be a director of PBG, or its successor, for a reason other than
death or Disability (as defined below), such Options shall terminate and expire upon the earlier of (i) the expiration of the original term, or
(ii) five years from the date the holder ceased to be a director. For purposes of this Section 6 and Section 5 above, a Non-Employee Director
has a “Disability” if he or she is totally disabled as determined using the standards PBG applies under its long term disability program.
(d) Non-Employee Directors may exercise their Options by giving an exercise notice to PBG in the manner specified from time to time by the
Board. Options may be exercised by using either a standard cash exercise procedure or a cashless exercise procedure. From time to time, the
Board may change or adopt procedures relating to Option exercises. If, at any time, a Non-Employee Director suffers a Disability or is
otherwise incapable of exercising his or her Options before the expiration thereof, the Board may take any steps it deems appropriate to
prevent such Options from lapsing prior to being exercised.
(e) Each Option award shall be evidenced by a written agreement setting forth the terms and conditions thereof, which terms and conditions
shall not be inconsistent with those set forth in this Plan.
2
(f) No Option shall contain a feature for the deferral of compensation within the meaning of Treasury Regulation section 1.409A-
1(b)(5)(i)(A)(3).
7. Annual Restricted Stock Unit Award

(a) Under the Plan, each Non-Employee Director shall receive an annual formula grant of restricted stock units (“RSUs”). When a Non-
Employee Director’s RSUs become payable, they shall be settled in shares of PBG Common Stock with the Non-Employee Director receiving
one share of PBG Common Stock for each RSU. The grant of RSUs shall be made annually on April 1 (the “RSU Grant Date”); provided,
however, that each individual who commences service as a Non-Employee Director after April 1 of a year shall receive a pro-rated annual
formula grant of RSUs (a “Pro-Rated RSU Grant”) with respect to his or her first year of service on the first day of the month following the date
he or she commences service (the “Pro-Rated RSU Grant Date”). To receive a grant of RSUs, a Non-Employee Director must be actively
serving as a director of PBG on the RSU Grant Date or the Pro-Rated RSU Grant Date, as applicable.
(b) The number of RSUs to be included in each annual RSU award shall be determined by dividing the RSU Grant Amount (as defined
below) by the Fair Market Value of a share of PBG Common Stock on the RSU Grant Date or Pro-Rated RSU Grant Date, as applicable, or if
such day is not a trading day on the NYSE, on the immediately preceding trading day. RSU Grant Amount shall mean $70,000, except that, in
the case of a Pro-Rated RSU Grant, RSU Grant Amount shall mean the following: (i) $52,500 in the case of an individual who commences
service as a Non-Employee Director on or after April 2 and on or before June 30; (ii) $35,000 in the case of an individual who commences
service as a Non-Employee Director on or after July 1 and on or before September 30; (iii) $17,500 in the case of an individual who commences
service as a Non-Employee Director on or after October 1 and on or before December 31. No Pro-Rated RSU Grant shall be made in the case of
an individual who commences service as a Non-Employee Director on or after January 1 and on or before April 1. The number of RSUs so
determined shall be rounded up (if necessary) to the nearest number of whole RSUs.
(c) RSUs shall vest on the RSU Grant Date or Pro-Rated RSU Grant Date, as applicable. RSUs shall be payable on the RSU Grant Date or
Pro-Rated RSU Grant Date, as applicable, unless the Non-Employee Director timely elects to defer the payment of such RSUs. In general, any
such deferral election with respect to RSUs must be made in the calendar year preceding the year of the grant. However, in the case of a Pro-
Rated RSU Grant, any such deferral election may be made as late as one day prior to the Pro-Rated RSU Grant Date, provided that when the
election is made, the Non-Employee Director is then initially eligible to participate in the Plan, within the meaning of Treasury Regulation
section 1.409A-2(a)(7)(ii), taking into account any other plan that would be aggregated with the Plan pursuant to Treasury Regulation section
1.409A-1(c)(2). Any such election to defer the payment date of an RSU Grant or a Pro-Rated RSU Grant must specify a future payment date
(the beginning of any calendar quarter) that will result in a minimum deferral period of at least two years.
(d) Notwithstanding any deferral election made pursuant to the immediately preceding provision, a Non-Employee Director’s RSUs shall be
paid as of the beginning of the calendar quarter following the Non-Employee Director’s Permanent Disability (as defined below), Separation
from Service (as defined below) with PBG or death. For purposes of this Plan, a Non-Employee Director shall be considered to have a
Permanent Disability as of the first date on which the Non-Employee Director would be considered disabled within the meaning of
Section 409A(a)(2)(C) of the Internal Revenue Code of 1986, as amended (“Code”). For purposes of this Plan, the determination of when a
Non-Employee Director has incurred a separation from service with PBG shall be made in accordance with Section 409A(a)(2)(A)(i) of the Code
(“Separation from Service”).
(e) During any period that the payment of RSUs is deferred, the Non-Employee Director whose RSUs are deferred shall be entitled to be
credited with dividend equivalents. Dividend equivalents shall equal the dividends actually paid with respect to a corresponding amount of
PBG Common Stock during the deferral period, while the RSUs remain unpaid, and shall be credited on the date such dividends are actually
paid. Upon crediting, a Non-Employee Director’s dividend equivalents shall be immediately converted to additional RSUs (whole and/or
fractional, as appropriate) by dividing the aggregate amount of dividend equivalents credited to the Non-Employee Director on a day by the
Fair Market Value of a share of PBG Common Stock on such day,
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or if such day is not a trading day on the NYSE, on the immediately preceding trading day. Additional RSUs credited under this Section 7(e)
are in turn entitled to be credited with dividend equivalents, and a Non-Employee Director’s aggregate additional RSUs shall be paid out at the
same time as the underlying RSUs to which they relate. Any cumulative fractional RSU remaining at such time shall be rounded up to a whole
RSU prior to its settlement in PBG Common Stock.
(f) Each RSU award shall be evidenced by a written agreement setting forth the terms and conditions thereof, which terms and conditions
shall not be inconsistent with those set forth in this Plan.
8. Non-Executive Chair Annual Award

(a) Under the Plan, a Non–Employee Director serving as Non-Executive Chair of the Board (the “Chair”) shall receive an additional annual
formula grant of restricted stock units (“Chair RSUs”). Such grant shall be made upon commencement of services as Chair, unless otherwise
determined by the Board; and annually, thereafter, on the anniversary of formal commencement of services as Chair, except as otherwise
determined by the Board (the “Chair RSU Grant Date”). When the Chair’s RSUs become payable, they shall be settled in shares of PBG
Common Stock with the Chair receiving one share of PBG Common Stock for each Chair RSU.
(b) The number of Chair RSUs to be included in each Chair RSU award shall be determined by dividing the Chair RSU Grant Amount (as
defined below) by the Fair Market Value of a share of PBG Common Stock on the Chair RSU Grant Date or, if such day is not a trading day on
the NYSE, on the immediately preceding trading day. The Chair RSU Grant Amount shall mean $100,000. The number of Chair RSUs so
determined shall be rounded up (if necessary) to the nearest number of whole RSUs.
(c) Chair RSUs shall vest on the Chair RSU Grant Date. Notwithstanding the foregoing, payment of the Chair RSUs shall be deferred until
such time as the Chair ceases to serve as a director of PBG for any reason. The Chair RSUs shall be paid as of the beginning of the calendar
quarter following the Chair’s Permanent Disability, Separation from Service with PBG or death.
(d) During any period that the payment of Chair RSUs is deferred, the Chair shall be entitled to be credited with dividend equivalents.
Dividend equivalents shall equal the dividends actually paid with respect to a corresponding amount of PBG Common Stock during the period
payment of the Chair RSUs is deferred, and shall be credited on the date such dividends are actually paid. Upon crediting, the Chair’s dividend
equivalents shall be immediately converted to additional RSUs (whole and/or fractional, as appropriate) by dividing the aggregate amount of
dividend equivalents credited to the Chair on a day by the Fair Market Value of a share of PBG Common Stock on such day, or if such day is
not a trading day on the NYSE, on the immediately preceding trading day. Additional RSUs credited under this Section 8(d) are in turn entitled
to be credited with dividend equivalents, and the Chair’s aggregate additional RSUs shall be paid out at the same time as the underlying Chair
RSUs to which they relate. Any cumulative fractional RSU remaining at such time shall be rounded up to a whole RSU prior to its settlement in
PBG Common Stock.
(e) Each Chair RSU award shall be evidenced by a written agreement setting forth the terms and conditions thereof, which terms and
conditions shall not be inconsistent with those set forth in this Plan.
9. Shares of Stock Subject to the Plan

The shares that may be delivered under this Plan shall not exceed an aggregate of 300,000 shares of PBG Common Stock, adjusted, if
appropriate, in accordance with Section 11 below; provided that any shares authorized but not delivered under the Prior Plan (as hereinafter
defined) shall be available for delivery under this Plan in addition to the above mentioned 300,000 shares. The shares granted or delivered
under the Plan may be newly issued shares of Common Stock or treasury shares.
10. Deferral of Initial Awards
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(a) Non-Employee Directors may make an advance, one-time election to defer into PBG phantom stock units all of the shares of Restricted
Stock otherwise granted under Section 5. Any such election shall be made at least one day prior to the grant date of such Restricted Stock.
The deferral period shall equal the Non-Employee Director’s period of service as a director of PBG (i.e., such deferral period shall end in the
event of the Non-Employee Director’s Permanent Disability, Separation from Service or death), and such deferral shall be paid as of the
beginning of the calendar quarter following such Separation from Service. Non-Employee Directors who elect to defer receipt of such shares
shall be credited on the grant date with a number of phantom stock units equal to that number of shares of Restricted Stock which they would
have received had they not elected to defer. During the deferral period, the value of the phantom stock units will fluctuate based on the market
value of PBG Common Stock. At the end of the deferral period, all payments of deferred awards shall be made in shares of PBG Common Stock
(one share of PBG Common Stock for each PBG phantom stock unit), unless the Board in its discretion decides to make the distribution in cash
or in a combination of cash and shares of PBG Common Stock. To the extent that a distribution is made in cash, in whole or in part, the Non-
Employee Directors will receive the aggregate value of the PBG phantom stock units credited to them which are to be paid in cash. The value
of PBG phantom stock units will be determined by multiplying the number of PBG phantom stock units which are to be paid in cash by the Fair
Market Value of PBG Common Stock on the last NYSE trading day of the deferral period.
(b) During the deferral period, the Non-Employee Director whose Restricted Stock is deferred as phantom stock units shall be entitled to be
credited with dividend equivalents. Dividend equivalents shall equal the dividends actually paid with respect to a corresponding amount of
PBG Common Stock during the deferral period and shall be credited on the date such dividends are actually paid. Upon crediting, a Non-
Employee Director’s dividend equivalents shall be immediately converted to additional phantom stock units (whole and/or fractional, as
appropriate) by dividing the aggregate amount of dividend equivalents credited to the Non-Employee Director on a day by the Fair Market
Value of a share of PBG Common Stock on such day, or if such day is not a trading day on the NYSE, on the immediately preceding trading
day. Additional phantom stock units credited under this Section 10(b) are in turn entitled to be credited with dividend equivalents, and a Non-
Employee Director’s aggregate additional phantom stock units shall be paid out at the same time as the underlying phantom stock units to
which they relate. Any fractional phantom stock unit remaining at such time shall be rounded up to a whole phantom stock unit prior to its
settlement in PBG Common Stock.
11. Dilution and Other Adjustments

The number and kind of shares of PBG Common Stock issuable under the Plan, or which may or have been awarded to any Non-Employee
Director, shall be adjusted proportionately by the Board, as may be, and to such extent (if any), determined to be appropriate and equitable by
the Board, to reflect stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations or exchanges of shares, any spin off
or other distribution of assets of the Company to its shareholders, any partial or complete liquidation, or other similar corporate changes. Such
adjustment shall be conclusive and binding for all purposes of the Plan.
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12. Effect of Misconduct

Notwithstanding anything to the contrary herein, if a Non-Employee Director commits “Misconduct,” he or she shall forfeit all rights to any
unexercised Options, any RSUs and Restricted Stock, as well as any phantom stock units credited to him or her under Section 10. For purposes
of this Plan, Misconduct occurs if a majority of the Board determines that a Non-Employee Director has: (a) engaged in any act which is
considered to be contrary to the Company’s best interests; (b) violated the Company’s Code of Conduct or engaged in any other activity
which constitutes gross misconduct; (c) engaged in unlawful trading in the securities of PBG or of any other company based on information
gained as a result of his or her service as a director of PBG; or (d) disclosed to an unauthorized person or misused confidential information or
trade secrets of the Company.
13. Withholding Taxes and Code Section 409A

(a) Except to the extent other arrangements are made by a Non-Employee Director that are satisfactory to the Company, the Company shall
withhold a number of shares of PBG Common Stock otherwise deliverable having a Fair Market Value sufficient to satisfy the minimum
withholding taxes (if any) required by federal, state, local or foreign law in respect of any award.
(b) At all times, this Plan shall be interpreted and operated (i) in accordance with the requirements of Section 409A with respect to deferred
compensation that is subject to Code Section 409A, and (ii) to maintain the exemption from Code Section 409A of stock option awards and
undeferred Restricted Stock (collectively, “Excepted Awards”), and (iii) to preserve the status of deferrals made prior to the effective date of
Code Section 409A (“Prior Deferrals”) as exempt from Section 409A, i.e., to preserve the grandfathered status of Prior Deferrals. Thus, for
example, a Non-Employee Director’s ability to defer a Pro-Rated RSU Grant is conditioned on the Non-Employee Director not having been
previously eligible for a PBG deferral plan of the same type. In addition, if a Non-Employee Director is determined to be a specified employee
(within the meaning of Code Section 409A(a)(2)(B)(i)), any payment of deferred compensation subject to Section 409A made based on
Separation from Service with PBG shall not be made until the beginning of the calendar quarter that occurs at least six months after such
Separation from Service with PBG. Similarly, any election that must be made at least one day prior to a specified date must be effectively made
and irrevocable, under the applicable requirements of Code Section 409A, by the day preceding such specified date.
14. Resale Restrictions, Assignment and Transfer

Options (unless the Board of Directors specifically determines otherwise), RSUs, Chair RSUs, Restricted Stock and PBG phantom stock
units may not be sold, transferred or assigned, except in the event of the Non-Employee Director’s death, in which case his or her Options,
Restricted Stock or PBG phantom stock units may be transferred by will or by the laws of descent and distribution. All restrictions on
Restricted Stock granted to a Non-Employee Director shall lapse upon his or her death. Options may be exercised by the decedent’s personal
representative, or by whomever inherits the Options, at any time, through and including their original expiration date.
Once awarded, the shares of PBG Common Stock received by Non-Employee Directors may be freely transferred, assigned, pledged or
otherwise subjected to lien, subject to restrictions imposed by the Securities Act of 1933, as amended, and subject to the trading restrictions
imposed by Section 16 of the Securities Exchange Act of 1934, as amended. PBG phantom stock units may not be transferred or assigned
except by will or the laws of descent and distribution.
15. Funding
The Plan shall be unfunded. PBG shall not be required to establish any special or separate fund or to make any other segregation of assets
to assure the payment of any award under the Plan.
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16. Supersession of Prior Plan

This Plan superseded The PBG Directors’ Stock Plan of 1999 (the “Prior Plan”) when shareholders approved this Plan on May 23, 2001. As
of that date, all awards granted under the Prior Plan became subject to the terms of this Plan and all shares that were authorized but not
delivered under the Prior Plan became available for delivery under this Plan, in addition to those shares authorized for issuance pursuant to
Section 8 of this Plan. No awards were made under the Prior Plan after May 23, 2001.
17. Duration, Amendments and Terminations

The Board of Directors may terminate or amend the Plan in whole or in part; provided, however, that the Plan may not be amended more
than once every six (6) months, other than to comport with changes in the Code or the rules and regulations thereunder; provided further,
however, that no such action shall have a material adverse effect on any rights or obligations with respect to any awards theretofore granted
under the Plan, unless consented to by the recipients of such awards (unless the amendment is required to comply with Code Section 409A in
which case, the amendment shall be effective without consent of the recipient unless the recipient expressly denies consent to such
amendment in writing); and provided further, however, that with any amendment and the termination of the Plan shall neither violate Code
Section 409A nor adversely affect the exemption of Excepted Awards or the grandfather of the Prior Deferrals. The Plan shall continue until
terminated.
Exhibit 10.30
PBG 2004 Long-Term Incentive Plan

As Amended and Restated
Effective January 1, 2009
1. Purpose.
The purposes of the PBG 2004 Long Term Incentive Plan (the “Plan”) are: (a) to provide long-term incentives to those persons with
significant responsibility for the success and growth of The Pepsi Bottling Group, Inc. (“PBG”) and its subsidiaries, divisions and affiliated
businesses (collectively, the “Company”); (b) to assist the Company in attracting, retaining and motivating a diverse group of employees on a
competitive basis; (c) to ensure a pay for performance linkage for such employees; and (d) to associate the interests of such employees with
those of PBG shareholders.
2. Administration of the Plan.

(a) The Plan shall be administered by the Compensation and Management Development Committee of the Board of Directors of PBG (the
“Committee”). The Committee shall be appointed by the Board of Directors of PBG (the “Board”) and shall consist entirely of members
of the Board who qualify as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the
“Code”), as “Non-Employee Directors” within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934 as amended (the
“Act”) and as “independent” for purposes of any rules and regulations of a stock exchange on which PBG’s Common Stock is traded.
The foregoing notwithstanding, no act of the Committee shall be void or deemed to be without authority because a member fails to
meet the qualification requirements of this Section.
(b) The Committee shall have all powers vested in it by the terms of the Plan, such powers to include the authority (within the limitations
described herein):
- to select the individuals to be granted awards under the Plan;
- to determine the type, size and terms of awards to be granted to each individual selected;
- to determine the guidelines and procedures for the payment or exercise of awards;
- to determine the time when awards will be granted and any conditions which must be satisfied by employees before an award is
granted;
- to establish objectives and conditions for earning awards that are otherwise applicable to awards;
- to determine whether such objectives and conditions have been met and whether awards will be paid at the end of the award
period or at the time the award is exercised (whichever applies);
- to determine whether payment of an award will be deferred (subject to Section 6 below);
- to determine whether payment of an award should be reduced or eliminated; and
- to determine whether any such award should qualify, regardless of its amount, as deductible in its entirety for federal income tax
purposes, including whether any award is intended to comply with the performance-based exception under Section 162(m) of the
Code in the case of an award to a “Covered Executive,” i.e., an employee who is a “named executive officer” (within the meaning
of Item 402(a)(3) of Regulation S-K) or an individual who is expected to be a named executive officer and an employee at the time
the Company is entitled to a tax deduction related to such award (but excluding any such named executive officer who is not
considered a Covered Executive under guidance published by the Internal Revenue Service).
(c) The Committee shall have full power and authority to administer and interpret the Plan and to adopt such rules, regulations,
agreements, guidelines and instruments for the administration of the Plan and for the conduct of its business as the Committee deems
necessary or advisable. The Committee’s interpretations of the Plan, and all actions taken and determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding on all parties concerned, including the Company, PBG
shareholders and any person receiving an award under the Plan.
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(d) To the extent not prohibited by law and not inconsistent with the requirements of Section 162(m) of the Code, Rule 16b-3 of the Act or
applicable stock exchange rules, the Committee may delegate its authority hereunder (including to a member of the Committee or an
officer of PBG) and may designate employees of the Company to execute documents on behalf of the Committee or to otherwise assist
the Committee in the administration and operation of the Plan. Specifically, and not by way of limitation, the Committee hereby
delegates to the Senior Vice President of Human Resources of the Company the authority to adopt all appropriate provisions relating
to compliance with Section 409A of the Code, which provisions shall be set out in one or more separate documents (collectively, the
“Rules”).
3. Eligibility.
Subject to the provisions of the Plan, the Committee may, from time to time, designate any of the following individuals as eligible to receive
an award available under the Plan: (i) officer, (ii) employee, or (iii) key consultant or advisor of the Company, other than a non-employee
director, who provides bona fide services to the Company not in connection with the offer or sale of securities in a capital-raising transaction,
in each case subject to limitations provided by the Code or the Act as determined by the Committee; and the Committee shall determine the
nature and amount of each award.
In addition, in order to foster and promote achievement of the purposes of the Plan or to comply with provisions of laws in other countries
in which the Company operates or has employees, the Committee, in its sole discretion, shall have the power and authority to: (i) determine
which eligible individuals (if any) performing services for the Company outside the United States are eligible to participate in the Plan,
(ii) modify the terms, conditions and types of any awards made to such eligible individuals, and (iii) establish subplans, modified stock option
exercise procedures and other award terms and procedures to the extent such actions may be necessary or advisable. The preceding sentence
shall apply notwithstanding any provision of the Plan to the contrary, except that in the case of a Post-409A Award (as defined in Section
11(a) below) for a United States taxpayer, it shall not override a provision of the Plan to the extent necessary to comply with Section 409A of
the Code.
4. Awards.
(a) Types. Awards under the Plan include stock options (incentive stock options and non-qualified stock options), stock appreciation
rights, restricted shares, restricted share units, performance shares, performance units and share awards.
(i) Stock Options. Stock options are rights to purchase shares of PBG Common Stock (“Common Stock”) at a fixed price for a
specified period of time. Stock options may consist of incentive stock options satisfying the requirements of Section 422 of the
Code (“ISOs”) and designated by the Committee as ISOs and non-qualified stock options that do not satisfy the aforementioned
requirements. The purchase price per share of Common Stock covered by a stock option awarded pursuant to this Plan (the
“Exercise Price” as defined for stock options), including any ISOs, shall be equal to or greater than the “Fair Market Value” of a
share of Common Stock on the date the stock option is awarded unless the stock option was granted through the assumption
of, or in substitution for, outstanding awards previously granted to individuals who became employees of the Company as a
result of merger, consolidation, acquisition or other corporate transaction involving the Company, in which case, provided it
does not cause the stock option to be subject to Section 409A of the Code, an Exercise Price may be used that reasonably
preserves the value of the previously granted award. “Fair Market Value” means an amount equal to the average of the high and
low sales prices for Common Stock as reported on the composite tape for securities listed on the New York Stock Exchange, Inc.
(the “Exchange”) on the date in question (or, if no sales of Common Stock were made on such Exchange on such date, on the
immediately preceding day on which sales were made on such Exchange), except that such average price shall be rounded up to
the nearest one cent solely for purposes of determining the Exercise Price of stock options and stock appreciation rights
(“SARs” which are more fully described below in paragraph (ii) hereof). The Exercise Price per share may be payable, in whole or
in part, in cash or in shares of Common Stock held by the option holder, including previously acquired shares and shares
issuable or deliverable in connection with an award (with any such Common Stock valued at its Fair Market
2
Value on the date of exercise), provided that no Common Stock may be used to pay the Exercise Price if and to the extent that
additional accounting expense would result to the Company under then applicable accounting rules.
Stock options that are Post-409A Awards may be granted only to individuals who provide direct services on the date of grant of
the stock option to PBG or another entity in a chain of entities in which PBG or another such entity has a controlling interest
within the meaning of Treasury Regulation §1.409A-1(b)(5)(iii)(E) in each entity in the chain.
Stock options may be granted alone or in tandem with other awards, including SARs. With respect to stock options granted in
tandem with SARs, the exercise of either such stock options or SARs will result in the simultaneous cancellation of the same
number of stock options or tandem SARs, as the case may be.
Except for adjustments made pursuant to Section 7, the Exercise Price for any outstanding stock option granted under the Plan
may not be decreased after the date of grant nor may any outstanding stock option granted under the Plan be surrendered to the
Company as consideration for the grant of a new stock option with a lower Exercise Price without the approval of PBG’s
shareholders.
Except in the case of grants in connection with: (1) the recruitment of new employees, including employees transferring from an
allied organization (within the meaning of Section 4(c)(i) or (ii) below), (2) special recognition awards (3) awards granted in
connection with business turnaround plans, and (4) the assumption of, or substitution for, outstanding awards previously
granted to individuals who become employees of the Company as a result of merger, consolidation, acquisition or other
corporate transaction, stock options shall vest over a period of three years from the grant date and no options shall have a
vesting period of less than one year. However, without regard to the vesting period assigned, the vesting of stock options may
be accelerated in connection with a change in control and certain transfers, or in connection with a participant’s death,
disability, retirement or involuntary termination of employment, in each case as determined by the Committee. The term of
options shall be determined by the Committee in its sole discretion at the time of grant, but in no event shall the term exceed ten
years from the date of grant.
ISOs may only be granted to employees of PBG, its subsidiaries and divisions and may only be granted to an employee who, at
the time the option is granted, does not own stock possessing more than 10% of the total combined voting power of all classes
of stock of PBG. The aggregate Fair Market Value (determined at the time of grant) of all shares with respect to which ISOs are
exercisable by a participant for the first time during any year shall not exceed $100,000. Any option that is intended to be an ISO
but which does not qualify as such shall remain outstanding and constitute a non-qualified stock option. In determining the
shares available for issuance as ISOs under Section 5, adjustment under Section 5(a) shall not apply to the extent not permitted
under Section 422 of the Code and regulations promulgated thereunder.
(ii) Stock Appreciation Rights. SARs are rights to receive the amount by which the Fair Market Value of a share of Common Stock
on the date the SAR is exercised exceeds the purchase price of the SAR (the “Exercise Price” as defined for SARs), which shall
be equal to or greater than the Fair Market Value of a share of Common Stock on the grant date, unless the SAR was granted
through the assumption of, or in substitution for, outstanding awards previously granted to individuals who became employees
of the Company as a result of merger, consolidation, acquisition or other corporate transaction involving the Company, in which
case, provided it does not cause the SAR to be subject to Section 409A of the Code, an Exercise Price may be used that
reasonably preserves the value of the previously granted award. Such difference may be paid in cash, shares of Common Stock
or both, or by any other method as determined by the Committee in its sole discretion.
3
Except in the case of grants in connection with: (1) the recruitment of new employees, including employees transferring from an
allied organization (within the meaning of Section 4(c)(i) or (ii) below), (2) special recognition awards, (3) awards granted in
connection with business turnaround plans, and (4) the assumption of, or substitution for, outstanding awards previously
granted to individuals who become employees of the Company as a result of merger, consolidation, acquisition or other
corporate transaction, SARs shall vest over a period of three years from the grant date and no SARs shall have a vesting period
of less than one year from the grant date. However, without regard to the vesting period assigned, the vesting of SARs may be
accelerated in connection with a change in control and certain transfers, or in connection with a participant’s death, disability,
retirement or involuntary termination of employment, in each case as determined by the Committee. The term of an SAR shall be
determined by the Committee in its sole discretion at the time of grant, but in no event shall the term exceed ten years from the
date of grant.
SARs that are Post-409A Awards may be granted only to individuals who provide direct services on the date of grant of the
SAR to PBG or another entity in a chain of entities in which PBG or another such entity has a controlling interest within the
meaning of Treasury Regulation §1.409A-1(b)(5)(iii)(E) in each entity in the chain. SARs may be granted alone or in tandem with
stock options. The grant of SARs related to ISOs must be concurrent with the grant of the ISOs. The grant of SARs related to
non-qualified stock options may be concurrent with the grant of the non-qualified stock options or in connection with such
non-qualified stock options, previously granted under Section 4(a)(i), that are unexercised and have not terminated or lapsed.
With respect to SARs granted in tandem with stock options, the exercise of either such stock options or such SARs will result in
the simultaneous cancellation of the same number of tandem stock options or SARs, as the case may be.
(iii) Restricted Shares/Restricted Share Units. Restricted shares are shares of Common Stock that may not be traded or sold until
the date that the restrictions on transferability imposed by the Committee with respect to such shares have lapsed (the
“Restriction Period”). Restricted share units are the right to receive an amount equal to the value of a specified number of shares
of Common Stock. Awards of restricted shares or restricted share units may be made either alone or in addition to or in tandem
with other awards granted under the Plan, and they may be awarded as additional compensation for services rendered by the
eligible individual or in lieu of cash or other compensation to which the eligible individual is entitled from the Company.
The Committee shall impose such terms, conditions and/or restrictions on any restricted share awards or restricted share units
granted pursuant to the Plan as it may deem advisable including, without limitation: (1) a requirement that participants pay a
stipulated price for each restricted share or each restricted share unit, (2) restrictions based upon the achievement of specific
performance goals (Company-wide, divisional, related to other business units, and/or individual), (3) time-based restrictions on
vesting, including the time during which the award is subject to a risk of forfeiture, and (4) restrictions under applicable Federal
or state securities laws.
Except in the case of performance-based awards and awards made in connection with: (1) the recruitment of new employees,
including employees transferring from an allied organization (within the meaning of Section 4(c)(i) or (ii) below), (2) special
recognition awards, (3) awards granted in connection with business turnaround plans, and (4) the assumption of, or substitution
for, outstanding awards previously granted to individuals who become employees of the Company as a result of merger,
consolidation, acquisition or other corporate transaction, all restricted share and restricted share unit awards shall be subject to
a time-based vesting restriction of at least three years from the date of grant. However, without regard to the time-based vesting
restriction assigned, the vesting of restricted share and restricted share unit awards may be accelerated in connection with a
change in control and certain transfers (to the extent permitted in Section 4(c) below) or in connection with a participant’s death,
disability, retirement, retirement eligibility or involuntary termination of employment, in each case as determined by the
Committee. To the extent the restricted shares or restricted share units granted to a Covered Executive are intended to
4
be deductible under Section 162(m) of the Code, the applicable restrictions shall be based on the achievement of performance
goals over a performance period, as described in Section 4(a)(iv).
Restricted share units that become payable in accordance with their terms and conditions shall be settled in cash, shares of
Common Stock, or a combination of cash and shares of Common Stock, as determined by the Committee. To the extent that the
vesting of a restricted share unit is tied to (1) the completion of a specified period of service, (2) death, (3) disability, or
(4) retirement, the payment date for the restricted share unit shall be the day when vesting occurs, except to the extent the
agreement specifies a different payment date for such vesting event or as otherwise provided below. Accordingly, if more than
one such vesting event applies with respect to the restricted share unit, the earliest occurring vesting event shall govern (but if
two or more vesting dates occur on the same date, the vesting event enumerated first in the prior sentence shall govern).
Notwithstanding any contrary terms in an agreement evidencing a restricted shares unit, if the specified period of service that is
required to vest is changed after it is initially established, the change shall not be taken into account for purposes of
determining the payment date for the restricted share unit, unless the change extends the vesting period and such extension is
eligible for the special rule for certain transaction-based compensation in Treasury Regulation 1.409A-3(i)(5)(iv) or unless the
restricted share unit is exempt from Section 409A of the Code and the change accelerates the vesting period.
Notwithstanding any contrary terms in this Plan or in an agreement evidencing a restricted share unit, if a restricted share unit is
a Post-409A Award and is part of an award of restricted share units that includes one or more restricted share units that is
required to comply with Section 409A of the Code, then all restricted share units in such award shall be subject to the provisions
of the Rules.
During any Restriction Period, restricted shares may not be sold, assigned, transferred or otherwise disposed of, or mortgaged,
pledged or otherwise encumbered. In order to enforce the limitations imposed upon the restricted shares, the Committee may
(1) cause a legend or legends to be placed on any certificates relating to such restricted shares, and/or (2) issue “stop transfer”
instructions, as it deems necessary or appropriate.
Unless otherwise determined by the Committee, during any Restriction Period, participants who hold restricted shares shall have
the right to receive dividends, in cash or property, as well as other distributions or rights in respect of such shares, shall have
the right to vote such shares as the record owner thereof, and participants who hold restricted share units shall have the right to
receive dividend equivalents. Unless otherwise determined by the Committee, any dividends, distributions or rights, or dividend
equivalents payable to a participant during the Restriction Period shall be distributed to the participant only if and when the
restrictions imposed on the applicable restricted shares or restricted share units lapse (and in the case of dividend equivalents
on restricted share units, in accordance with the time of payment rules that are applicable to the related restricted share units).
Each certificate issued for restricted shares shall be registered in the name of the participant and deposited with the Company or
its designee. At the end of the Restriction Period, a certificate representing the number of shares to which the participant is then
entitled shall be delivered to the participant free and clear of the restrictions (or the participant’s unrestricted ownership shall be
otherwise reflected). No certificate shall be issued with respect to a restricted share unit unless and until such unit is paid in
shares of Common Stock.
(iv) Performance Awards. Performance awards are performance shares or performance units. Each performance share shall have an
initial value equal to the Fair Market Value of a share of Common Stock on the date of grant. Each performance unit shall have an
initial value that is established by the Committee at the time of grant. Performance awards may be granted either alone or in
addition to other awards made under the Plan.
5
Unless otherwise determined by the Committee, performance awards shall be conditioned on the achievement of performance
goals (which shall be based on one or more performance measures, as determined by the Committee) over a performance period
established by the Committee, provided that no performance period shall be less than one year.
The performance measure(s) to be used for purposes of performance awards (and for restricted shares and restricted share units,
as provided in Section 4(a)(iii)) may be described in terms of objectives that are related to the individual participant or objectives
that are Company-wide or related to one or more subsidiaries, divisions, departments, regions, functions or business units of the
Company to which the contributions of the participant are relevant, and may consist of one or more or any combination of the
following criteria: stock price, market share, sales revenue, sales volume, cash flow, earnings per share, return on equity, return
on assets, return on sales, return on invested capital, economic value added, net earnings, total shareholder return, gross
margin, profit (before or after-taxes), net income, operating income, EBITDA (earnings before interest, taxes, depreciation and
amortization) and/or costs. The performance goals based on these performance measures may be made relative to the
performance of other corporations or a published index. The Committee can establish other performance measures for
performance awards granted to participants who are not Covered Executives and, with respect to such participants, shall have
the sole discretion to adjust the determination of the degree of attainment of the pre-established performance goals.
Notwithstanding the achievement of any performance goal established under this Plan, the Committee has the discretion, on a
participant by participant basis, to reduce some or all of a performance award that would otherwise be paid.
At, or at any time after, the time an award is granted, and in the case of Covered Executives to the extent permitted under Section
162(m) of the Code and the regulations thereunder without adversely affecting the treatment of the award under the
performance-based exception, the Committee may provide for the manner in which performance will be measured against the
performance goals (or may adjust the performance goals) to reflect the impact of unusual or nonrecurring events affecting the
Company, or its financial statements or changes in applicable laws, regulations or accounting principles.
With respect to any award that is intended to satisfy the conditions for the performance-based exception under Section 162(m)
of the Code: (1) the Committee shall interpret the Plan and this Section 4 in light of Section 162(m) of the Code and the
regulations thereunder; (2) the Committee shall have no discretion to amend the award in any way that would adversely affect
the treatment of the award under Section 162(m) of the Code and the regulations thereunder; and (3) such award shall not be
paid until the Committee shall first have certified that the performance goals have been achieved.
If applicable tax and/or securities laws change to permit Committee discretion to alter the governing performance measures
without obtaining shareholder approval of such changes, the Committee shall have the sole discretion to make such changes
without first obtaining shareholder approval.
(v) Share Awards. Share awards are grants of shares of Common Stock. The Committee may grant a share award to any eligible
individual on such terms and conditions as the Committee may determine in its sole discretion. Share awards may be made only
in lieu of cash or other compensation to which the eligible individual is entitled from the Company except as to limited awards to
non-executive employees or key consultants made in connection with special recognition programs.
(b) Maximum Awards. An eligible individual may be granted multiple awards under the Plan, but no one employee may be granted awards
which would result in his or her receiving in the aggregate, during a single calendar year, more than 2 million shares of Common Stock.
Solely for the purposes of
6
determining whether this maximum is met, an SAR, restricted share unit, or performance share shall be treated as entitling the holder
thereof to one share of Common Stock, and an award of performance units shall be treated as entitling the holder to the number of
shares of Common Stock that is determined by dividing the dollar value of the award by the Fair Market Value of a share of Common
Stock on the date the performance units were awarded.
(c) Employment by the Company.
(i) To the extent the vesting, exercise, or term of any stock option, SAR and/or restricted share is conditioned on employment by
the Company, an award recipient whose Company employment terminates through a Company-approved transfer to an allied
organization: (1) shall, at the time of such termination, vest in and (where applicable) be entitled to exercise immediately prior to
the transfer any stock option, SAR or restricted share that is not conditioned on the achievement of a performance goal; (2) shall
have employment with the allied organization treated as employment by the Company in determining any applicable term of such
award and period for exercise (as well as any right to, or right to exercise, the award upon achievement of a performance goal);
and (3) shall have the allied organization considered part of the Company for purposes of applying the misconduct provisions of
Section 8. The Chief Personnel Officer shall specify the entities that are considered allied organizations as of any time. This
Section 4(c)(i) applies to awards that are not required to comply with Section 409A of the Code.
(ii) To the extent the vesting, exercise, or term of any restricted share unit, performance share and/or performance unit is
conditioned on employment by the Company, an award recipient whose Company employment is transferred to an allied
organization through a Company-approved transfer to the allied organization: (1) shall, at the time of such transfer, vest in any
restricted share unit that is not conditioned on the achievement of a performance goal and, except as provided in the remainder
of this Section 4(c)(ii), the date of such vesting shall also be the payment date of the restricted share unit; (2) shall have
employment with the allied organization treated as employment by the Company for purposes of any right to the award upon
achievement of a performance goal; and (3) shall have the allied organization considered part of the Company for purposes of
applying the misconduct provisions of Section 8. For purposes of applying this Section 4(c)(ii) to a restricted share unit,
performance share or performance unit that is part of a Post-409A Award that is required to comply with Section 409A of the
Code with respect to one or more restricted share units, performance shares or performance units, as applicable, under such
award, the provisions set out in the Rules shall apply notwithstanding any contrary terms in this Plan or in an agreement
evidencing such an award.
(iii) The Committee may decide, when granting an award, to exclude some or all of the award from the application of this subsection,
or to provide the recipient of the grant with less protection in connection with a transfer than would otherwise apply under the
foregoing provisions of this subsection.
(d) Company Buy-Out Right. At any time after any award becomes exercisable or vested, the Committee shall have the right to elect, in its
sole discretion and without the consent of the holder thereof, to cancel such award and to cause PBG to pay to the participant the
excess of the Fair Market Value of the shares of Common Stock covered by such award over any Exercise Price or purchase price on
the date the Committee provides written notice (the “Buy-Out Notice”) of its intention to exercise such right (the “Buy-Out”),
provided that in the case of a Post-409A Award, the Fair Market Value used for this purpose shall not exceed the fair market value
of the shares of Common Stock covered by such award on the date of cancellation as determined under Treasury Regulation §
1.409A-1(b)(5)(iv). Buy-Outs pursuant to this provision shall be effected by PBG as promptly as possible after the date of the Buy-Out
Notice. Payments of Buy-Out amounts shall be made in shares of Common Stock (with cash for any fractional share). The number of
shares shall be determined by dividing the amount of the payment to be made by the Fair Market Value of a share of Common Stock
on the date of the Buy-Out Notice, provided that in the case of a Post-409A Award, the Fair Market Value used for this purpose
shall not exceed the fair market value
7
of the shares of Common Stock covered by such award on the date of cancellation as determined under Treasury Regulation §
1.409A-1(b)(5)(iv). This Buy-Out provision shall not apply in the case of a “Change in Control” within the meaning of Section 9, in
which case the provisions of Section 9 shall apply. This Buy-Out provision also shall not apply in the case of a Post-409A Award that
is required to comply with Section 409A of the Code (in whole or in part) unless such application does not result in an acceleration of
the payment of the award (for purposes of Section 409A of the Code) or comes within an exception that permits acceleration of the
payment of the award as provided in Treasury Regulation § 1.409A-3(j)(4).
5. Shares of Common Stock Subject to the Plan.

The maximum aggregate number of shares of Common Stock available for issuance under the Plan shall be 36 million, determined as
provided in this Section and as may be adjusted pursuant to Section 7 hereof. Any of the authorized shares may be used for any of the types
of awards described in the Plan, provided, however, that in no event shall the number of restricted shares which become fully vested, shares
delivered in settlement of restricted share units and performance awards, and shares granted as share awards (“full-value awards”) exceed 50%
of the maximum aggregate number of shares of Common Stock available for issuance under the Plan as may be adjusted pursuant to Section 7
hereof.
(a) Shares Remaining. The following shall apply in determining the number of shares remaining available for grant under this Plan:
(i) In connection with the granting of a stock option or other award (other than SARs payable only in cash or a performance unit
denominated in dollars or property other than Common Stock), the number of shares of Common Stock available for issuance
under this Plan shall be reduced by the number of shares in respect of which the stock option or award is granted or
denominated; provided, however, that where an SAR or performance unit is settled in shares of Common Stock, the number of
shares of Common Stock available for issuance under this Plan shall be reduced only by the number of shares issued in such
settlement.
(ii) If any stock option is exercised by tendering or having the Company withhold shares of Common Stock to PBG as full or partial
payment of the Exercise Price or to satisfy tax withholding obligations, the number of shares available for issuance under this
Plan shall be increased by the number of shares so tendered or withheld.
(iii) Whenever any outstanding stock option or other award under the Plan (or portion thereof) expires, is cancelled, is settled in
cash or is terminated for any reason, the shares allocable to the expired, cancelled, settled or terminated portion of the stock
option or award shall remain available for awards under this Plan.
(iv) Awards granted through the assumption of, or in substitution for, outstanding awards previously granted to individuals who
become employees as a result of a merger, consolidation, acquisition or other corporate transaction involving the Company as a
result of an acquisition will not count against the reserve of available shares under this Plan.
(b) Shares to be Delivered. Shares of Common Stock to be delivered by the Company under this Plan shall be determined by the
Committee and may consist in whole or in part of authorized but unissued shares, treasury shares or shares acquired on the open
market.
6. Deferred Payments.
The Committee may determine that all or a portion of a payment to a participant under the Plan, whether it is to be made in cash, shares of
Common Stock or a combination thereof, shall be deferred or may, in its sole discretion, approve deferral elections made by participants.
Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion, which terms shall be designed
to comply with Section 409A of the Code in the case of Post-409A Awards. The Committee may take such steps as are reasonably necessary
to
8
permit the deferral of taxes in connection with any award deferral. Notwithstanding the foregoing, no stock option or SAR that is a Post-409A
Award shall contain a feature for the deferral of compensation within the meaning of Treasury Regulation § 1.409A-1(b)(5)(i)(A)(3) or §
1.409A-1(b)(5)(i)(B)(3), respectively. Awards of restricted shares are intended to be and to remain exempt from Section 409A of the Code
pursuant to Treasury Regulation § 1.409A-1(b)(6)(i).
7. Dilution and Other Adjustments.

In the event of (a) any change in the outstanding shares of Common Stock by reason of any stock split, reverse stock split, stock dividend,
recapitalization, merger, reorganization, consolidation, combination or exchange of shares, (b) any separation of a corporation (including a
spin-off or other distribution of assets of the Company to its shareholders), (c) any partial or complete liquidation, or (d) other similar corporate
change, the Committee shall make such equitable adjustments in the Plan and the awards thereunder as, and to the extent (if any), the
Committee determines are necessary and appropriate to prevent dilution or enlargement of a participant’s rights hereunder, including, if
necessary, an adjustment in (i) the maximum number or kind of shares that may be issued under the Plan, (ii) the individual maximum in
Section 4(b), (iii) the number and kind of shares and the Exercise Price or purchase price applicable to awards that may be or have been
awarded to any participant (including the conversion of shares subject to awards from Common Stock to stock of another entity), and
(iv) related terms of awards, including any performance conditions, and to make cash payments in lieu of such adjustments provided that any
such cash payment shall be made in a manner that does not cause the recipient of the corresponding award to be subject to the payment of
additional tax under Section 409A(a)(1)(B) of the Code. No adjustment to performance conditions is authorized in connection with any awards
to a Covered Executive intended to qualify as performance-based under Section 162(m) of the Code if and to the extent that such adjustment
would cause the award to fail to so qualify. Such adjustment shall be conclusive and binding for all purposes of the Plan.
8. Misconduct.
Except as otherwise provided in agreements covering Awards hereunder, a participant shall forfeit all rights in his or her outstanding
awards under the Plan, and all such outstanding awards shall automatically terminate and lapse, if the Committee determines that such
participant has engaged in “Misconduct” as defined below. The Committee may in its sole discretion require the participant to pay to the
Company any and all gains realized from any awards granted hereunder that were exercised, vested or paid out within the twelve month period
immediately preceding a date on which the participant engaged in such Misconduct, as determined by the Committee.
“Misconduct” means any of the following, as determined by the Committee in good faith: (i) violation of any agreement between the
Company and the participant, including but not limited to a violation relating to the disclosure of confidential information or trade secrets, the
solicitation of employees, customers, suppliers, licensors or contractors, or the performance of competitive services; (ii) violation of any duty
to the Company, including but not limited to violation of the Company’s Code of Conduct; (iii) making, or causing or attempting to cause any
other person to make, any statement (whether written, oral or electronic), or conveying any information about the Company which is
disparaging or which in any way reflects negatively upon the Company, unless required by law or pursuant to a Company policy;
(iv) improperly disclosing or otherwise misusing any confidential information regarding the Company; (v) unlawful trading in the securities of
PBG or of another company based on information gained as a result of that participant’s employment or other relationship with the Company;
(vi) engaging in any act which is considered to be contrary to the best interests of the Company, including but not limited to recruiting or
soliciting employees of the Company; or (vii) commission of a felony or other serious crime or engaging in any activity which constitutes
gross misconduct.
This section shall also apply in the case of a former Company employee (including, without limitation, a retired or disabled employee) who
commits Misconduct after his or her employment with the Company terminates.
9. Change in Control.
Upon a “Change in Control” (as defined in subsection (f) below), the following shall occur, unless otherwise provided by the Committee in
an agreement:
9
(a) Options. Effective on the date of such Change in Control, all outstanding and unvested stock options granted under the Plan shall
immediately vest and become exercisable, and all stock options then outstanding under the Plan shall remain outstanding in
accordance with their terms. In the event that any stock option granted under the Plan becomes unexercisable during its term on or
after a Change in Control because: (i) the individual who holds such stock option is involuntarily terminated (other than for cause), or
such individual terminates for “Good Reason” as defined in the agreement governing the stock option award or applicable operating
guidelines, within two years after the Change in Control; (ii) such stock option is terminated or adversely modified; or (iii) Common
Stock is no longer issued and outstanding, or no longer traded on a national securities exchange, then the holder of such stock option
shall immediately be entitled to receive equity (e.g. common stock) of the “Acquiring Entity” (as defined below) with a fair market
value equal to at least (A) the gain on such stock option or (B) only if greater than the gain and only with respect to non-qualified
stock options that are not Post-409A Awards, the Black-Scholes value of such stock option (as determined by a nationally recognized
independent investment banker chosen by PBG), in either case calculated on the date such stock option becomes unexercisable. For
purposes of the preceding sentence, the gain on a stock option shall be calculated as the difference between the Fair Market Value
per share of Common Stock as of the date such stock option becomes unexercisable and the Exercise Price per share of Common Stock
covered by the stock option; provided, however, if the shares of Common Stock are not traded on a national exchange on such date,
the Fair Market Value on the immediately preceding day on which the shares were traded shall be used (but only to the extent it does
not result, in the case of a Post-409A Award, in the payment of more than fair market value as determined under Treasury Regulation
§ 1.409A-1(b)(5)(iv)).
(b) Stock Appreciation Rights. Effective on the date of such Change in Control, all outstanding and unvested SARs granted under the
Plan shall immediately vest and become exercisable, and all SARs then outstanding under the Plan shall remain outstanding in
accordance with their terms. In the event that any SAR granted under the Plan becomes unexercisable during its term on or after a
Change in Control because: (i) the individual who holds such SAR is involuntarily terminated (other than for cause), or such
individual terminates for “Good Reason” as defined in the agreement governing the SAR award or applicable operating guidelines,
within two years after the Change in Control; (ii) such SAR is terminated or adversely modified; or (iii) Common Stock is no longer
issued and outstanding, or no longer traded on a national securities exchange, then the holder of such SAR shall immediately be
entitled to receive equity (e.g. common stock) of the “Acquiring Entity” (as defined below) with a fair market value equal to at least
the gain on such SAR. For purposes of the preceding sentence, the gain on an SAR shall be calculated as the difference between the
Fair Market Value per share of Common Stock as of the date such SAR becomes unexercisable and the purchase price per share of
Common Stock covered by the SAR; provided, however, if the shares of Common Stock are not traded on a national exchange on
such date, the Fair Market Value on the immediately preceding day on which the shares were traded shall be used (but only to the
extent it does not result, in the case of a Post-409A Award, in the payment of more than fair market value as determined under
Treasury Regulation § 1.409A-1(b)(5)(iv)).
(c) Restricted Shares/Restricted Share Units. Upon a Change of Control all restricted shares and restricted share units shall immediately
vest. Immediately upon such vesting, certificates for all such vested restricted shares shall be distributed to the participants, and the
cash or shares payable upon vesting of the restricted share units shall be paid to the participants. Notwithstanding anything set out
in this Plan or an agreement evidencing a restricted share unit to the contrary, if a restricted share unit is a Post-409A Award and is
covered by Section 409A of the Code, then the provisions set out in the Rules shall apply.
(d) Performance Awards. Each performance award granted under the Plan that is outstanding on the date of the Change in Control shall
immediately vest and the holder of such performance award shall be entitled to a lump sum cash payment equal to the amount of such
performance award payable at the end of the performance period as if 100% of the performance goals have been achieved.
Notwithstanding anything set out in this Plan or an agreement evidencing a performance award to the
10
contrary, if a performance award is a Post-409A Award and is covered by Section 409A of the Code, then the provisions set out in the
Rules shall apply.
(e) Time of Payment. Any amount required to be paid pursuant to this Section shall be paid within 20 days after the date such amount
becomes payable.
(f) Definition of Change in Control. A “Change in Control” means the occurrence of any of the following events: (i) any individual,
corporation, partnership, group, association or other entity (a “Person”), other than PepsiCo, Inc. (“PepsiCo”) or an entity approved
by PepsiCo, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of 50% or more of the
combined voting power of PBG’s outstanding securities ordinarily having the right to vote at elections of directors; (ii) during any
consecutive two-year period, persons who constitute the Board at the beginning of the period cease to constitute at least 50% of the
Board (provided that any new Board member who was approved by a majority of directors who began the two-year period or who was
approved by PepsiCo shall be considered a director who began the two-year period); (iii) the approval by the shareholders of PBG of
a plan or agreement providing for a merger or consolidation of PBG with another company, other than with PepsiCo or an entity
approved by PepsiCo, and PBG is not the surviving company (unless the shareholders of PBG prior to the merger or consolidation
continue to have 50% or more of the combined voting power of the surviving company’s outstanding securities); (iv) the sale,
exchange or other disposition of all or substantially all of PBG’s assets, other than to PepsiCo or an entity approved by PepsiCo; or
(v) any other event, circumstance, offer or proposal occurs or is made, which is intended to effect a change in the control of PBG and
which results in the occurrence of one or more of the events set forth in clauses (i) through (iv) of this paragraph. For purposes of this
Plan, the Person that triggers a Change in Control under clause (i) or (ii), survives the merger or consolidation referred to in clause
(iii) or purchases the assets under clause (iv) is referred to as the “Acquiring Entity.”
In addition, a “Change in Control” means the occurrence of any of the following events with respect to PepsiCo: (i) acquisition of 20%
or more of the outstanding voting securities of PepsiCo by another entity or group; excluding, however, any acquisition by an
employee benefit plan or related trust sponsored or maintained by PepsiCo; (ii) during any consecutive two-year period, persons who
constitute the Board of Directors of PepsiCo (the “PepsiCo Board”) at the beginning of the period cease to constitute at least 50% of
the PepsiCo Board (provided that any new PepsiCo Board member who was approved by a majority of directors who began the two-
year period shall be considered a director who began the two-year period); (iii) PepsiCo shareholders approve, and there is completed,
a merger or consolidation of PepsiCo with another company, and PepsiCo is not the surviving company; or, if after such transaction,
the other entity owns, directly or indirectly, 50% or more of the outstanding voting securities of PepsiCo; (iv) PepsiCo shareholders
approve a plan of complete liquidation of PepsiCo or the sale or disposition of all or substantially all of PepsiCo’s assets; or (v) any
other event, circumstance, offer or proposal occurs or is made, which is intended to effect a change in the control of PepsiCo, and
which results in the occurrence of one or more of the events set forth in clauses (i) through (iv) of this paragraph.
Notwithstanding the above definition, the definition of “Change in Control set out in the Rules shall apply in the circumstances and
manner specified in the Rules to a restricted share unit, performance share or performance unit that is part of a Post-409A Award that
is required to comply with Section 409A of the Code with respect to one or more restricted share units, performance shares or
performance units, as applicable, under such award.
10. Miscellaneous Provisions.

(a) Rights as Shareholder. Except as otherwise provided herein, a participant in the Plan shall have no rights as a holder of Common
Stock with respect to awards hereunder, unless and until certificates for shares of Common Stock are issued to such participant or
registered in the name of the participant on the Company’s records.
11
(b) Assignment or Transfer. Unless the Committee shall specifically determine otherwise, no award granted under the Plan or any rights or
interests therein (other than an award of shares that is not subject to any restrictions) shall be assignable or transferable by a
participant, except by will or the laws of descent and distribution.
(c) Agreements. All awards granted under the Plan shall be evidenced by agreements in such form and containing such terms and
conditions (not inconsistent with the Plan), as the Committee shall approve.
(d) Requirements for Transfer. The Committee shall have no obligation to issue or transfer a share of Common Stock under the Plan until
all legal requirements applicable to the issuance or transfer of such shares have been complied with to the satisfaction of the
Committee. The Committee shall have the right to condition any issuance of shares of Common Stock made to any participant upon
such participant’s written undertaking to comply with such restrictions on his subsequent disposition of such shares as the
Committee or PBG shall deem necessary or advisable as a result of any applicable law, regulation or official interpretation thereof, and
certificates representing such shares may be legended to reflect any such restrictions.
(e) Withholding Taxes. PBG shall have the right to deduct from all awards hereunder paid in cash any federal, state, local or foreign taxes
required by law to be withheld with respect to such awards, and with respect to awards paid or satisfied in stock, to require the
payment (through withholding from the participant’s salary or otherwise) of any such taxes. The obligations of PBG to make delivery
of awards in cash or shares of Common Stock shall be subject to currency or other restrictions imposed by any government. With
respect to withholding required upon the exercise of stock options or SARs, upon the lapse of restrictions on restricted shares or
upon any other taxable event arising as a result of awards granted hereunder, unless other arrangements are made with the consent of
the Committee, participants shall satisfy the withholding requirement by having the Company withhold shares of Common Stock
having a Fair Market Value on the date the tax is to be determined equal to not more than the minimum amount of tax required to be
withheld with respect to the transaction unless a fractional share is payable in which case, such minimum amount plus the next
highest share will be withheld. The Committee may permit a participant to surrender or direct the withholding of other shares of
Common Stock to satisfy tax obligations but only if and to the extent that no additional accounting expense would result to the
Company under then applicable accounting rules.
If a participant makes a disposition, within the meaning of Section 424(c) of the Code and regulations promulgated thereunder, of any
shares of Common Stock issued to him pursuant to the exercise of an incentive stock option within the two-year period commencing
on the day after the date of the grant or within the one-year period commencing on the day after the date of transfer of such shares to
the participant pursuant to such exercise, the participant shall, within ten (10) days of such disposition, notify PBG thereof, by
delivery of written notice to PBG at its principal executive office, and immediately deliver to PBG (or allow to be withheld from other
compensation) any taxes required to be withheld.
(f) No Implied Rights to Awards. Except as set forth herein, no employee or other person shall have any claim or right to be granted an
award under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company.
(g) Fractional Shares. Fractional shares of Common Stock shall not be issued or transferred under an award, but the Committee may pay
cash in lieu of a fraction or round the fraction, in its discretion.
(h) Beneficiary Designation. To the extent allowed by the Committee, each participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named on a contingent or successive basis) to whom any benefit under the Plan is to be paid
in case of his or her death before he or she receives any or all of such benefit. Unless the Committee determines otherwise, each such
designation shall revoke all prior designations by the same participant, shall be in a form prescribed by the Committee, and will be
effective only when filed by the Participant in writing with the Company during the participant’s lifetime. In the absence of any such
designation, benefits remaining unpaid at
12
the participant’s death shall be paid to the participant’s estate.

(i) Costs and Expenses. The cost and expenses of administering the Plan shall be borne by PBG and not charged to any award or to any
employee receiving an award.
(j) Funding of Plan. PBG shall not be required to establish any special or separate fund or to make any other segregation of assets to
assure the payment of any award under the Plan.
(k) Successors. All obligations of the Company under the Plan with respect to awards granted hereunder shall be binding on any
successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger,
consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
(l) Compliance with Section 409A of the Code. At all times, this Plan shall be interpreted and operated (i) with respect to Post-409A
Awards, in accordance with the applicable requirements of Section 409A of the Code, (ii) to maintain the exemptions from
Section 409A of the Code of stock options, SARs, restricted shares and awards designed to meet the short-deferral exception under
Section 409A of the Code, and (iii) to preserve the status of deferrals made prior to the effective date of Section 409A of the Code (“
Prior Deferrals”) as exempt from Section 409A of the Code, i.e., to preserve the grandfathered status of Prior Deferrals. To the extent
there is a conflict between the provisions of the Plan relating to compliance with Section 409A of the Code and the provisions of any
award agreement issued under the Plan, the provisions of the Plan control. To the extent there is a conflict between the provisions of
the Rules and the provisions of the Plan and/or of any award agreement issued under the Plan, the provisions of the Rules control.
(m) Successor Provisions. Any reference in the Plan to a provision of law or regulation shall also refer to any provision of law or
regulation that is a successor to such provision.
11. Effective Date, Amendments and Termination.

(a) Effective Date. The Plan became effective on May 26, 2004, the date on which it was initially approved by PBG’s shareholders. The
Plan was amended and restated effective May 25, 2005, and again effective May 28, 2008, the dates on which these amendments were
approved by PBG’s shareholders. This amendment and restatement of the Plan is generally effective as of January 1, 2009 (the
“Effective Date”), and applies to awards granted on or after that date, except in the case of provisions relating to (i) “Post-409A
Awards, ” i.e., all Plan awards that were not both earned and vested as of December 31, 2004, and all Plan awards that were materially
modified after October 3, 2004, determined in each case within the meaning of Section 409A of the Code, (ii) Article 9 (regarding
Change in Control), (iii) the rounding mechanism specified within the definition of Fair Market Value in Section 4(a)(i), and
(iv) Section 7 (relating to antidilution and other adjustments). Provisions relating to Post-409A Awards shall apply to Post-409A
Awards granted on or after the Effective Date and to the administration on and after the Effective Date of Post-409A Awards granted
prior to the Effective Date. Article 9 (regarding Change in Control) shall be effective as of December 20, 2005. The rounding
mechanism specified within the definition of Fair Market Value in Section 4(a)(i) shall be effective as of October 6, 2006. Section 7
(relating to antidilution and other adjustments) shall be effective as of January 8, 2007. The Rules are considered an integral part of
this document and, together with this document and the agreements evidencing awards granted under the Plan, are intended to
evidence documentary compliance with Section 409A of the Code and the applicable regulations and other guidance of general
applicability issued thereunder or in connection therewith.
(b) Amendments. The Committee may at any time terminate or from time to time amend the Plan in whole or in part; provided that the
Committee shall not, without the requisite affirmative approval of shareholders of the Company, make any amendment to the Plan that
materially modifies the Plan, including but not limited to amendments that would permit repricing, expand the types of awards
available or the class of eligible participants, increase the number of securities which may be issued; or
13
which requires shareholder approval under any applicable law or rule of the New York Stock Exchange or Section 162(m) or 422 of the
Code. No termination or amendment shall materially adversely affect any rights or obligations with respect to any awards theretofore
granted under the Plan without the consent of the affected participant.
The Committee may, at any time, amend outstanding agreements evidencing awards under the Plan in a manner not inconsistent with
the terms of the Plan; provided, however, that except as provided in Section 4(d) with respect to the Company’s Buy-Out right, if such
amendment is materially adverse to the participant, the amendment shall not be effective unless and until the participant consents, in
writing, to such amendment.
Notwithstanding the preceding provisions of this subsection (b), following a Change in Control (as defined in Section 9), the
Committee may not amend the Plan or outstanding agreements evidencing awards under the Plan in a way that would be adverse to a
participant, even if the amendment would not be materially adverse, without the written consent of the participant.
(c) Termination. No awards shall be made under the Plan on or after the tenth anniversary of the date on which PBG’s shareholders
approved the Plan. Determination of the award actually earned and payout or settlement of the award may occur later, and as to any
outstanding award, the Plan’s terms shall remain in effect (including authority under Section 11(b) relating to the Committee’s
authority to modify outstanding awards).
14
Exhibit 10.31
THE
PBG
DIRECTOR
DEFERRAL PROGRAM
Effective as of January 1, 2009
TABLE OF CONTENTS
Page
ARTICLE I — INTRODUCTION 1
ARTICLE II — DEFINITIONS 2
2.01 ACCOUNT: 2
2.02 ACT: 2
2.03 BENEFICIARY: 2
2.04 CODE: 2
2.05 COMPANY: 2
2.06 DEFERRAL SUBACCOUNT: 2
2.07 DIRECTOR: 2
2.08 DIRECTOR COMPENSATION: 3
2.09 DISTRIBUTION VALUATION DATE: 3
2.10 ELECTION FORM: 3
2.11 ELIGIBLE DIRECTOR: 3
2.12 ERISA: 3
2.13 FAIR MARKET VALUE: 4
2.14 KEY EMPLOYEE: 4
2.15 MANDATORY DEFERRAL: 5
2.16 PARTICIPANT: 5
2.17 PBG ORGANIZATION: 5
2.18 PLAN: 5
2.19 PLAN ADMINISTRATOR: 5
2.20 PLAN YEAR: 6
2.21 RECORDKEEPER: 6
2.22 SECOND LOOK ELECTION: 6
2.23 SECTION 409A: 6
2.24 SEPARATION FROM SERVICE: 6
2.25 SPECIFIC PAYMENT DATE: 6
2.26 VALUATION DATE: 7
ARTICLE III — ELIGIBILITY AND PARTICIPATION 8
3.01 ELIGIBILITY TO PARTICIPATE: 8

3.02 TERMINATION OF ELIGIBILITY TO DEFER: 8
3.03 TERMINATION OF PARTICIPATION: 8
TABLE OF CONTENTS
Page
ARTICLE IV — DEFERRAL OF COMPENSATION 9
4.01 DEFERRAL ELECTION: 9

4.02 TIME AND MANNER OF DEFERRAL ELECTION: 9
4.03 PERIOD OF DEFERRAL; FORM OF PAYMENT: 10
4.04 SECOND LOOK ELECTION: 11
4.05 MANDATORY DEFERRALS: 12
ARTICLE V — INTERESTS OF PARTICIPANTS 13
5.01 ACCOUNTING FOR PARTICIPANTS’ INTERESTS: 13

5.02 PHANTOM INVESTMENT OF ACCOUNT: 13
5.03 VESTING OF A PARTICIPANT’S ACCOUNT: 14
ARTICLE VI — DISTRIBUTIONS 15
6.01 GENERAL: 15
6.02 DISTRIBUTIONS BASED ON A SPECIFIC PAYMENT DATE: 15
6.03 DISTRIBUTIONS ON ACCOUNT OF A SEPARATION FROM SERVICE: 16
6.04 DISTRIBUTIONS ON ACCOUNT OF DEATH: 17
6.05 DISTRIBUTIONS OF MANDATORY DEFERRALS: 17
6.06 VALUATION: 18
6.07 IMPACT OF SECTION 16 OF THE ACT ON DISTRIBUTIONS: 18
6.08 ACTUAL PAYMENT DATE: 18
ARTICLE VII — PLAN ADMINISTRATION 19
7.01 PLAN ADMINISTRATOR: 19

7.02 ACTION: 19
7.03 POWERS OF THE PLAN ADMINISTRATOR: 19
7.04 COMPENSATION, INDEMNITY AND LIABILITY: 20
7.05 SECTION 16 COMPLIANCE: 21
7.06 CONFORMANCE WITH SECTION 409A: 21
ARTICLE VIII — AMENDMENT AND TERMINATION 22
8.01 AMENDMENT OF PLAN: 22

8.02 TERMINATION OF PLAN: 22
ARTICLE IX — MISCELLANEOUS 23
9.01 LIMITATION ON PARTICIPANT’S RIGHTS: 23

9.02 UNFUNDED OBLIGATION OF THE COMPANY: 23
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TABLE OF CONTENTS
Page
9.03 OTHER PLANS: 23
9.04 GOVERNING LAW: 23
9.05 GENDER, TENSE AND EXAMPLES: 23
9.06 SUCCESSORS AND ASSIGNS; NONALIENATION OF BENEFITS: 24
9.07 FACILITY OF PAYMENT: 24
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ARTICLE I – INTRODUCTION
The Pepsi Bottling Group, Inc. (the “Company” or “PBG”) established the PBG Director Deferral Program (the “Plan”) to permit Eligible
Directors to defer certain compensation paid to them as Directors. The material terms of the Plan were approved by the Board of Directors by
resolution duly adopted on March 27, 2008 and the Plan is effective as of January 1, 2009 (the “Effective Date”).
For federal income tax purposes, the Plan is intended to be a nonqualified unfunded deferred compensation plan that is unfunded and
unsecured. For purposes of ERISA, the Plan is intended to be exempt from ERISA coverage as a plan that solely benefits non-employees (or
alternatively, a plan described in Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA providing benefits to a select group of management or
highly compensated employees).
ARTICLE II – DEFINITIONS
When used in this Plan, the following underlined terms shall have the meanings set forth below unless a different meaning is plainly
required by the context:
2.01 Account:
The account maintained for a Participant on the books of the Company to determine, from time to time, the Participant’s interest under this
Plan. The balance in such Account shall be determined by the Plan Administrator. Each Participant’s Account shall consist of at least one
Deferral Subaccount for each separate deferral under section 4.01. The Recordkeeper may also establish such additional Deferral Subaccounts
as it deems necessary for the proper administration of the Plan. The Recordkeeper may also combine Deferral Subaccounts to the extent it
deems separate accounts are not needed for sound recordkeeping. Where appropriate, a reference to a Participant’s Account shall include a
reference to each applicable Deferral Subaccount that has been established thereunder.
2.02 Act:
The Securities Exchange Act of 1934, as amended from time to time.
2.03 Beneficiary:
The person or persons (including a trust or trusts) properly designated by a Participant, as determined by the Plan Administrator, to receive
the amounts in one or more of the Participant’s Deferral Subaccounts in the event of the Participant’s death in accordance with section 4.02(c).
2.04 Code:
The Internal Revenue Code of 1986, as amended from time to time.
2.05 Company:
The Pepsi Bottling Group, Inc., a corporation organized and existing under the laws of the State of Delaware, or its successor or successors.
2.06 Deferral Subaccount:

A subaccount of a Participant’s Account maintained to reflect his or her interest in the Plan attributable to each deferral (or separately
tracked portion of a deferral) of Director Compensation, and earnings or losses credited to such subaccount in accordance with section
5.01(b).
2.07 Director:
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A person who is a member of the Board of Directors of the Company and who is not currently an employee of the PBG Organization.
2.08 Director Compensation:

Direct monetary remuneration to the extent payable in cash in U.S. dollars to the Eligible Director by the Company for the discharge of his or
her duties as a member of the Board of Directors of the Company. Director Compensation shall not include the amount of any reimbursement
by the Company for expenses incurred by the Eligible Director in the discharge of his or her duties as a member of the Board of Directors of the
Company.
2.09 Distribution Valuation Date:

Each date as specified by the Plan Administrator from time to time as of which Participant Accounts are valued for purposes of a
distribution from a Participant’s Account. The current Distribution Valuation Dates are March 31st , June 30th , September 30th and
December 31st . Any current Distribution Valuation Date may be changed by the Plan Administrator, provided that such change does not result
in a change in when deferrals are paid out that is impermissible under Section 409A. Values are determined as of the close of a Distribution
Valuation Date or, if such date is not a business day, as of the close of the preceding business day.
2.10 Election Form:

The form prescribed by the Plan Administrator on which a Participant specifies the amount of his or her Director Compensation to be
deferred and the timing and form of his or her deferral payout, pursuant to the provisions of Article IV. An Election Form need not exist in a
paper format, and it is expressly authorized that the Plan Administrator may make available for use such technologies, including voice
response systems, Internet-based forms and any other electronic forms, as it deems appropriate from time to time.
2.11 Eligible Director:

The term “Eligible Director” shall have the meaning given to it in section 3.01(b).
2.12 ERISA:
Public Law 93-406, the Employee Retirement Income Security Act of 1974, as amended from time to time.
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2.13 Fair Market Value:

For purposes of converting a Participant’s deferrals to phantom PBG Common Stock as of any date, and for converting dividend
equivalents to phantom PBG Common Stock as of any date, the Fair Market Value of such stock is the closing price on such date (or if such
date is not a trading date, the first date immediately following such date that is a trading date) for PBG Common Stock as reported on the
composite tape for securities listed on the New York Stock Exchange, Inc., rounded to two decimal places. For purposes of determining the
value of a Plan distribution, the Fair Market Value of phantom PBG Common Stock is determined as the closing price on the applicable
Distribution Valuation Date for PBG Common Stock as reported on the composite tape for securities listed on the New York Stock Exchange,
Inc., rounded to two decimal places.
2.14 Key Employee:

The individuals identified in accordance with the principles set forth below.
(a) General. Any Participant who at any time during the applicable year is –
(1) An officer of any member of the PBG Organization having annual compensation greater than $130,000 (as adjusted for the
applicable year under Section 416(i)(1) of the Code);
(2) A 5-percent owner of any member of the PBG Organization; or
(3) A 1-percent owner of any member of the PBG Organization having annual compensation of more than $150,000.
For purposes of (1) above, no more than 50 employees identified in the order of their annual compensation shall be treated as officers. For
purposes of this section, annual compensation means compensation as defined in Treas. Reg. §1.415(c)-2(a), without regard to Treas. Reg.
§§1.415(c)-2(d), 1.415(c)-2(e), and 1.415(c)-2(g). The Plan Administrator shall determine who is a Key Employee in accordance with Section
416(i) of the Code and the applicable regulations and other guidance of general applicability issued thereunder or in connection therewith
(provided, that Section 416(i)(5) of the Code shall not apply in making such determination), and provided further that the applicable year shall
be determined in accordance with Section 409A and that any modification of the foregoing definition that applies under Section 409A shall be
taken into account.
(b) Applicable Year. The Plan Administrator shall determine Key Employees as of the last day of each calendar year (the “determination
date”), based on compensation for such year, and the designation for a particular determination date shall be effective for purposes of this
Plan for the twelve month period commending on April 1st of the next following calendar year. For purposes of the 2009 calendar year, the prior
sentence shall mean that the Key
-4-
Employees determined by the Plan Administrator as of December 31, 2007 shall apply to the period from January 1, 2009 to March 31, 2009.
(c) Rule of Administrative Convenience. In addition to the foregoing, the Plan Administrator shall treat all other employees classified as
Band E5 and above on the applicable determination date prescribed in subsection (b) as Key Employees for purposes of the Plan for the
twelve month period commencing on April 1st of the next following calendar year, provided that if this would result in counting more than 200
individuals as key employees as of any such determination date, then the number treated as key employees will be reduced to 200 by
eliminating from consideration those employees otherwise added by this subsection (c) in order by their base compensation, from the lowest
to the highest.
2.15 Mandatory Deferral:

The term “Mandatory Deferral” shall have the meaning given to it in section 4.05.
2.16 Participant:
Any Director who is qualified to participate in this Plan in accordance with section 3.01 and who has an Account. An active Participant is
one who is currently deferring under section 4.01.
2.17 PBG Organization:

The controlled group of organizations of which the Company is a part, as defined by Sections 414(b) and (c) of the Code and the
regulations issued thereunder. An entity shall be considered a member of the PBG Organization only during the period it is one of the group of
organizations described in the preceding sentence.
2.18 Plan:
The PBG Director Deferral Program, as set forth herein and as amended from time to time.
2.19 Plan Administrator:

The Board of Directors of the Company or its delegate or delegates, which shall have the authority to administer the Plan as provided in
Article VII. References in this document to the Plan Administrator shall be understood as referring to the Board of Directors, and those
delegated by the Board of Directors. All delegations made under the authority granted by this section are subject to section 7.05.
-5-
2.20 Plan Year:

The 12-consecutive month period beginning on January 1st and ending on December 31st .
2.21 Recordkeeper:
For any designated period of time, the party (which may include the Company’s Compensation Department) that is delegated the
responsibility, pursuant to the authority granted in the definition of Plan Administrator, to maintain the records of Participant Accounts,
process Participant transactions and perform other duties in accordance with any procedures and rules established by the Plan Administrator.
2.22 Second Look Election:

The term “Second Look Election” shall have the meaning given to it in section 4.04.
2.23 Section 409A:

Section 409A of the Code and the applicable regulations and other guidance of general applicability that are issued thereunder.
2.24 Separation from Service:

A Participant’s separation from service as defined in Section 409A; provided that for this purpose the term “service recipient” shall include
PepsiCo, Inc. so long as PepsiCo, Inc. or a member of the PepsiCo, Inc. controlled group maintains an ownership interest in the Company of at
least 20%. In the event the Participant also provides services other than as a director for the Company and its affiliates, as determined under
the prior sentence, such other services shall not be taken into account in determining when a Separation from Service occurs to the extent
permitted under Treas. Reg. § 1.409A-1(h)(5). The term may also be used as a verb (i.e., “Separates from Service”) with no change in meaning.
2.25 Specific Payment Date:

A specific date selected by an Eligible Director that triggers a lump sum payment of a deferral as specified in section 4.03 or 4.04. The
Specific Payment Dates that are available to be selected by Eligible Directors shall be determined by the Plan Administrator. With respect to
any deferral, the currently available Specific Payment Date(s) shall be the date or dates reflected on the Election Form or the Second Look
Election form that is made available by the Plan Administrator for the deferral. In the event that an Election Form or Second Look Election form
only provides for selecting a month and a year as the Specific Payment Date, the first day of the month that is selected shall be the Specific
Payment Date.
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2.26 Valuation Date:

Each business day, as determined by the Recordkeeper, as of which Participant Accounts are valued in accordance with Plan procedures
that are currently in effect. In accordance with procedures that may be adopted by the Plan Administrator, any current Valuation Date may be
changed.
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ARTICLE III — ELIGIBILITY AND PARTICIPATION
3.01 Eligibility to Participate:

(a) An individual shall be eligible to defer compensation under the Plan during the period that he or she is a Director hereunder.
(b) During the period an individual satisfies the eligibility requirements of this section, he or she shall be referred to as an Eligible
Director.
(c) Each Eligible Director shall become an active Participant on the earlier of the date an amount is first withheld from his or her
compensation pursuant to an Election Form submitted by the Director to the Plan Administrator under section 4.01 or the date on which a
Mandatory Deferral is first credited to the Plan on his or her behalf under section 4.05.
3.02 Termination of Eligibility to Defer:

An individual’s eligibility to participate by making an election to defer pursuant to section 4.01 shall cease as soon as administratively
practicable following the date he or she ceases to be a Director.
3.03 Termination of Participation:

An individual, who has been an active Participant under the Plan, ceases to be a Participant on the date his or her Account is fully paid out.
-8-
ARTICLE IV — DEFERRAL OF COMPENSATION
4.01 Deferral Election:

(a) Each Eligible Director may make an election to defer under the Plan in 10% increments up to 100% of his or her Director Compensation
for a Plan Year (disregarding any Director Compensation that is subject to a Mandatory Deferral pursuant to section 4.05) in the manner
described in section 4.02. Such election to defer shall apply to Director Compensation that is earned for services performed in the
corresponding Plan Year. A newly Eligible Director may only defer the portion of his or her eligible Director Compensation for the Plan Year in
which he or she becomes an Eligible Director that is earned for services performed after the date of his or her election. For this purpose, if a
valid Election Form is received prior to the date on which the Eligible Director becomes a Director and the Election Form is effective under
section 4.02(a) as of the date on which the Eligible Director becomes a Director, then the Director shall be deemed to receive all of his or her
Director Compensation for the Plan Year in which he or she becomes an Eligible Director after the date of the election. Any Director
Compensation deferred by an Eligible Director for a Plan Year will be deducted for each payment period for the Plan Year for which he or she
has Director Compensation and is an Eligible Director.
(b) To be effective, an Eligible Director’s Election Form must set forth the percentage of Director Compensation to be deferred and any
other information that may be requested by the Plan Administrator from time to time. For this purpose, the Election Form must meet the
requirements of section 4.02.
4.02 Time and Manner of Deferral Election:

(a) Deferral Election Deadlines. Ordinarily an Eligible Director must make a deferral election for Director Compensation earned for services
performed in a Plan Year no later than December 31st of the calendar year immediately prior to the beginning of the Plan Year (although the
Plan Administrator may adopt policies that encourage or require earlier submission of election forms). If December 31st of such year is not a
business day, then the deadline for deferral elections will be the first business day preceding December 31st of such year. In addition, an
individual who has been nominated for Director status must submit an Election Form prior to becoming an Eligible Director or otherwise prior
to rendering services as an Eligible Director, and such Election Form will be effective immediately upon commencement of the individual’s
status as an Eligible Director or otherwise upon commencement of his or her services as an Eligible Director.
(b) General Provisions. A separate deferral election under subsection (a) above must be made by an Eligible Director for each Plan Year’s
compensation that is eligible for deferral. If a properly completed and executed Election Form is not actually received by the Plan Administrator
(or, if authorized by the Plan Administrator for this purpose, the Recordkeeper) by the prescribed time in subsection (a) above, the Eligible
Director will be deemed to have elected not to defer any Director Compensation for the applicable Plan Year. An election is irrevocable once
received and determined by the Plan Administrator to be properly
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completed (and such determination shall be made not later than the last date for making the election in question). Increases or decreases in the
percentage a Participant elects to defer shall not be permitted after the beginning of the applicable Plan Year.
(c) Beneficiaries. A Participant may designate on the Election Form (or in some other manner authorized by the Plan Administrator) one
or more Beneficiaries to receive payment, in the event of his or her death, of the amounts credited to his or her Account; provided that, to be
effective, any Beneficiary designation must be in writing, signed by the Participant, and must meet such other standards (including any
requirement for spousal consent) as the Plan Administrator shall require from time to time. The Beneficiary designation must also be filed with
the Plan Administrator (or Recordkeeper, if designated by the Plan Administrator for this purpose) prior to the Participant’s death. An
incomplete Beneficiary designation, as determined by the Plan Administrator (or Recordkeeper, if designated by the Plan Administrator for this
purpose), shall be void and of no effect. A Beneficiary designation of an individual by name remains in effect regardless of any change in the
designated individual’s relationship to the Participant. Any Beneficiary designation submitted to the Plan Administrator (or Recordkeeper, if
designated by the Plan Administrator for this purpose) that only specifies a Beneficiary by relationship shall not be considered an effective
Beneficiary designation and shall be void and of no effect. If more than one Beneficiary is specified and the Participant fails to indicate the
respective percentage applicable to two or more Beneficiaries, then each Beneficiary for whom a percentage is not designated will be entitled
to an equal share of the portion of the Account (if any) for which percentages have not been designated. At any time, a Participant may
change a Beneficiary designation for his or her Account in a writing that is signed by the Participant and filed with the Plan Administrator (or
Recordkeeper, if designated by the Plan Administrator for this purpose) prior to the Participant’s death, and that meets such other standards
as the Plan Administrator shall require from time to time. An individual who is otherwise a Beneficiary with respect to a Participant’s Account
ceases to be a Beneficiary when all payments have been made from the Account.
4.03 Period of Deferral; Form of Payment:

(a) Period of Deferral. An Eligible Director making a deferral election shall specify a deferral period on his or her Election Form by
designating either a Specific Payment Date or the date he or she incurs a Separation from Service. Notwithstanding an Eligible Director’s actual
election of a Specific Payment Date, an Eligible Director shall be deemed to have elected a period of deferral of not less than one year after the
end of the Plan Year for which the Compensation would have been paid absent deferral.
If the Specific Payment Date selected by an Eligible Director would result in a period of deferral that is less than this minimum deferral
period, the Eligible Director shall be deemed to have selected a Specific Payment Date equal to the minimum period of deferral as provided in
the preceding sentence. If an Eligible Director fails to affirmatively designate a period of deferral on his or her Election Form, he or she shall be
deemed to have specified the date on which he or she incurs a Separation from Service.
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(b) Form of Payment. An Eligible Director making a deferral election shall be eligible for a lump sum payment only.
4.04 Second Look Election:

(a) General. Subject to subsection (b) below, a Participant who has made a valid initial deferral in accordance with the foregoing
provisions of this Article may subsequently make another one-time election regarding the time of payment of his or her deferral. This
opportunity to modify the Participant’s initial election is referred to as a “Second Look Election.”
(b) Requirements for Second Look Elections. Second Look Elections must comply with all of the following requirements:
(1) If an Eligible Director’s initial election specified payment based on a Specific Payment Date, the Participant may only make a
Second Look Election if the election is made at least 12 months before the Participant’s original Specific Payment Date and such election will
not be effective until 12 months after it is made. In addition, in this case the Participant’s Second Look Election must specify one of the
following two payment events on the Second Look Election — (i) the Second Look Election must provide for a new Specific Payment Date
that is at least 5 years after the original Specific Payment Date, or (ii) the Second Look Election must provide for payment to be made on the
later of a new Specific Payment Date that is at least 5 years after the original Specific Payment Date or Separation from Service.
(2) If an Eligible Director’s initial election specified payment based on the Participant’s Separation from Service, the Participant may
only make a Second Look Election if the election is made at least 12 months before the Participant’s Separation from Service. In addition, in
this case the Participant must elect a payment date that is at least 5 years after the Participant’s Separation from Service.
(3) An Eligible Director may make only one Second Look Election for each individual deferral, and each Second Look Election must
comply with all of the relevant requirements of this section.
A Second Look Election will be void and payment will be made based on the Participant’s original election under section 4.03 if all of
the relevant provisions of this subsection (b) are not satisfied in full. However, if an Eligible Director’s Second Look Election becomes
effective in accordance with the provisions of subsection (b), the Participant’s original election shall be superseded (including any Specific
Payment Date specified therein), and the original election shall not be taken into account with respect to the deferral that is subject to the
Second Look Election.
(c) Plan Administrator’s Role. Each Participant has the sole responsibility to elect a Second Look Election by contacting the Plan
Administrator (or, if authorized by the Plan
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Administrator, the Recordkeeper) and to comply with the requirements of this section. The Plan Administrator or the Recordkeeper may
provide a notice of a Second Look Election opportunity to some or all Participants, but the Recordkeeper and Plan Administrator are under no
obligation to provide such notice (or to provide it to all Participants, in the event a notice is provided only to some Participants). The
Recordkeeper and the Plan Administrator have no discretion to waive or otherwise modify any requirement for a Second Look Election set
forth in this section or in Section 409A.
4.05 Mandatory Deferrals:

(a) General. As provided in this section, the Board of Directors of the Company may require that Director Compensation be deferred
under the Plan. Such portion of an Eligible Director’s Director Compensation for a Plan Year that the Board of Directors of the Company
requires to be deferred under this section 4.05 shall be referred to as a “Mandatory Deferral.”
(b) Time for Board’s Determination. To be effective hereunder, any determination by the Board of Directors of the Company to require a
Mandatory Deferral of a portion of an Eligible Director’s Director Compensation for a Plan Year must be made no later than the December 31st
immediately preceding the calendar year in which the Eligible Director performs the services to which such Director Compensation relates (or,
to the extent the Eligible Director is not permitted to make any payment election with respect to such Mandatory Deferral and it would result in
a later deadline, immediately prior to the time the Eligible Director first has a legally binding right to such Director Compensation). As of such
date or time, the determination by the Board of Directors of the Company to require the deferral of the Director Compensation shall be
irrevocable. Any Mandatory Deferral for a Plan Year shall be credited to a separate Deferral Subaccount for such Plan Year.
(c) Time and Form of Payment. Each Mandatory Deferral shall be distributed in accordance with section 6.05. The Eligible Director shall
be entitled to elect to change the time of payment in accordance with section 4.04 unless otherwise provided by the Board of Directors.
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ARTICLE V — INTERESTS OF PARTICIPANTS
5.01 Accounting for Participants’ Interests:

(a) Deferral Subaccounts. Each Participant shall have at least one separate Deferral Subaccount for each separate deferral of Director
Compensation made by the Participant under this Plan. A Participant’s deferral shall be credited to his or her Account as soon as practicable
following the date the Director Compensation would be paid in the absence of a deferral. A Participant’s Account is a bookkeeping device to
track the value of the Participant’s deferrals and the Company’s liability therefor. No assets shall be reserved or segregated in connection with
any Account, and no Account shall be insured or otherwise secured.
(b) Account Earnings or Losses. As of each Valuation Date, a Participant’s Account shall be credited with earnings and gains (and shall
be debited for expenses and losses) determined as if the amounts credited to the Participant’s Account had actually been invested in
accordance with this Article. The Plan provides only for “phantom investment,” and therefore such earnings, gains, expenses and losses are
hypothetical and not actual. However, they shall be applied to measure the value of a Participant’s Account and the amount of the Company’s
liability to make deferred payments to or on behalf of the Participant.
5.02 Phantom Investment of Account:

(a) General. Each of a Participant’s Deferral Subaccounts shall be invested on a phantom basis in phantom PBG Common Stock as
provided in subsection (b) below.
(b) Phantom PBG Common Stock. Participant Accounts invested in the phantom investment are adjusted to reflect an investment in PBG
Common Stock. An amount deferred into this phantom investment is converted to phantom shares (or units) of PBG Common Stock of
equivalent value by dividing such amount by the Fair Market Value of a share of PBG Common Stock (or of a unit in the Account) on the date
as of which the amount is treated as invested in the phantom investment by the Plan Administrator. The Plan Administrator shall adopt a fair
valuation methodology for valuing the phantom investment, such that the value shall reflect the complete value of an investment in PBG
Common Stock in accordance with the following:
(1) The Plan Administrator shall value the phantom investment in PBG Common Stock pursuant to an accounting methodology which
unitizes partial shares as well as any amounts that would be received by the Account as dividends (if dividends were paid on phantom
shares/units of PBG Common Stock as they are on actual shares of equivalent value). For the time period this methodology is chosen,
partial shares and the above dividends shall be converted to units and credited to the Participant’s investment in the phantom PBG
Common Stock.
- 13 -
(2) A Participant’s interest in the phantom PBG Common Stock is valued as of a Valuation Date by multiplying the number of phantom
shares (or units) credited to his or her Account on such date by the Fair Market Value of a share of PBG Common Stock (or of a unit in the
Account) on such date.
(3) If shares of PBG Common Stock change by reason of any stock split, stock dividend, recapitalization, merger, consolidation, spin-
off, combination or exchange of shares or any other corporate change treated as subject to this provision by the Plan Administrator, such
equitable adjustment shall be made in the number and kind of phantom shares/units credited to an Account or Deferral Subaccount as the
Plan Administrator may determine to be necessary or appropriate.
(4) In no event will shares of PBG Common Stock actually be purchased or held under this Plan, and no Participant shall have any
rights as a shareholder of PBG Common Stock on account of an interest in this phantom investment.
(c) Any valuation or other determination that is required to be made under this section by the Plan Administrator may also be made by
the Recordkeeper, if the Recordkeeper has been authorized by the Plan Administrator to make such valuation or determination.
(d) Phantom PBG Common Stock Restrictions. Notwithstanding the preceding provisions of this section, the Plan Administrator may at
any time alter the effective date of any investment or allocation involving the phantom PBG Common Stock pursuant to section 7.03(j) (relating
to safeguards against insider trading). The Plan Administrator may also, to the extent necessary to ensure compliance with Rule 16b-3(f) of the
Act, arrange for tracking of any such transaction defined in Rule 16b-3(b)(1) of the Act and bar any such transaction to the extent it would not
be exempt under Rule 16b-3(f). The Company may also impose blackout periods pursuant to the requirements of the Sarbanes-Oxley Act of
2002 whenever the Company determines that circumstances warrant. These provisions shall apply notwithstanding any provision of the Plan
to the contrary except section 7.06 (relating to compliance with Section 409A).
5.03 Vesting of a Participant’s Account:

A Participant’s interest in the value of his or her Account shall at all times be 100% vested, which means that it will not forfeit as a result of
his or her Separation from Service.
- 14 -
ARTICLE VI — DISTRIBUTIONS
6.01 General:
A Participant’s Deferral Subaccount(s) shall be distributed as provided in this Article, subject in all cases to section 7.03(j) (relating to
safeguards against insider trading) and section 7.05 (relating to compliance with Section 16 of the Act). All Deferral Subaccount balances shall
be distributed in cash. In no event shall any portion of a Participant’s Account be distributed earlier or later than is allowed under
Section 409A. The rules set forth in this Article VI shall apply to any distributions that would occur based on events (including any
Separations from Service) or Specific Payment Dates.
(a) Section 6.02 (Distributions Based on a Specific Payment Date) applies when a Participant has elected to defer until a Specific Payment
Date and the Specific Payment Date is reached before the Participant’s death. If such a Participant dies prior to the Specific Payment Date,
section 6.04 shall apply to the extent it would result in an earlier distribution of all or part of a Participant’s Account.
(b) Section 6.03 (Distributions on Account of a Separation from Service) applies when a Participant has elected to defer until a Separation
from Service and then the Participant Separates from Service (other than as a result of death). Subsection (c) of this section provides for when
section 6.04 takes precedence over section 6.03.
(c) Section 6.04 (Distributions on Account of Death) applies when the Participant dies. If a Participant is entitled to receive a distribution
under section 6.02 or 6.03 (see below) at the time of his or her death, section 6.04 shall take precedence over those sections solely to the extent
section 6.04 would result in an earlier distribution of all or part of a Participant’s Account.
6.02 Distributions Based on a Specific Payment Date:

This section shall apply to distributions that are to be made upon the occurrence of a Specific Payment Date. In the event a Participant’s
Specific Payment Date for a Deferral Subaccount is reached before the Participant’s death, such Deferral Subaccount shall be distributed
based on the occurrence of such Specific Payment Date in accordance with the following terms and conditions:
(a) If a Participant’s Deferral Subaccount is to be paid pursuant to sections 4.03 or 4.04, whichever is applicable, the Deferral Subaccount
shall be valued as of the last Distribution Valuation Date that immediately precedes the Specific Payment Date, and the resulting amount shall
be paid in a single lump sum on the Specific Payment Date.
- 15 -
6.03 Distributions on Account of a Separation from Service:

This section shall apply to distributions that are to be made upon Separation from Service. When used in this section, the phrase
“Separation from Service” shall only refer to a Separation from Service that is not for death.
(a) If the Participant’s Separation from Service is prior to the Specific Payment Date that is applicable to a Deferral Subaccount, the
Participant’s deferral election pursuant to sections 4.03 or 4.04 (i.e., time and form of payment) shall continue to be given effect, and the
Deferral Subaccounts shall be distributed based upon the provisions of section 6.02.
(b) If the Participant has selected payment of his or her deferral on account of Separation from Service, distribution of the related Deferral
Subaccount shall commence as follows:
(1) for deferrals of Director Compensation other than Mandatory Deferrals, payment of the related Deferral Subaccount shall occur on
the first day of the month following the end of the calendar quarter following the quarter in which the Participant’s Separation from Service
occurs (or if section 4.04(b)(2) applies, payment shall occur on the payment date elected pursuant to section 4.04(b)(2)); and
(2) for Mandatory Deferrals, payment of the related Deferral Subaccount shall occur on the first day of the month following the end of
the calendar quarter following the quarter in which the Participant’s Separation from Service occurs (or if section 4.04(b)(2) applies, payment
shall occur on the payment date elected pursuant to section 4.04(b)(2).
(c) The distribution provided in subsection (b) shall be made in a single lump sum payment and shall be distributed on the date specified
in subsection (b) above and shall be valued as of the last Distribution Valuation Date preceding the date of distribution.
(d) Notwithstanding subsections (a), (b) and (c) above, if the Participant is classified as a Key Employee at the time of the Participant’s
Separation from Service (or at such other time for determining Key Employee status as may apply under Section 409A), then such Participant’s
Account shall not be paid, as a result of the Participant’s Separation from Service, earlier than the date that is at least 6 months after the
Participant’s Separation from Service. In such event any applicable lump sum payment shall be payable on the first day of the month following
the end of the second calendar quarter following the quarter in which the Participant’s Separation from Service occurs, valued as of the
immediately preceding Distribution Valuation Date.
- 16 -
6.04 Distributions on Account of Death:

(a) Upon a Participant’s death, the value of the Participant’s Account under the Plan shall be distributed in a single lump sum payment
on the earlier of the first day of the month following the end of the calendar quarter following the quarter in which the Participant’s death
occurs or the Specified Payment Date, valued as of the immediately preceding Distribution Valuation Date. Amounts paid following a
Participant’s death shall be paid to the Participant’s Beneficiary. If some but not all of the persons designated as Beneficiaries by a Participant
to receive his or her Account at death predecease the Participant, the Participant’s surviving Beneficiaries shall be entitled to the portion of
the Participant’s Account intended for such pre-deceased persons in proportion to the surviving Beneficiaries’ respective shares.
(b) If no designation is in effect at the time of a Participant’s death (as determined by the Plan Administrator) or if all persons designated
as Beneficiaries have predeceased the Participant, then the payments to be made pursuant to this section shall be distributed as follows:
(1) If the Participant is married at the time of his/her death, all payments made pursuant to this section shall be paid to the Participant’s
spouse; or
(2) If the Participant is not married at the time of his/her death, all payments made pursuant to this section shall be paid to the
Participant’s estate.
The Plan Administrator shall determine whether a Participant is “married” and shall determine a Participant’s “spouse” based on the state
law where the Participant has his/her primary residence at the time of death. The Plan Administrator is authorized to make any applicable
inquires and to request any documents, certificates or other information that it deems necessary or appropriate in order to make the above
determinations.
(c) Any claim to be paid any amounts standing to the credit of a Participant in connection with the Participant’s death must be received
by the Recordkeeper or the Plan Administrator at least 14 days before any such amount is paid out by the Recordkeeper. Any claim received
thereafter is untimely, and it shall be unenforceable against the Plan, the Company, the Plan Administrator, the Recordkeeper or any other
party acting for one or more of them.
6.05 Distributions of Mandatory Deferrals:

This section 6.05 shall govern the distribution of all Mandatory Deferrals under the Plan. Subject to the last sentence of this section 6.05, a
Participant’s Deferral Subaccount(s) for Mandatory Deferrals shall be distributed upon the earliest of the following to occur:
(a) The Participant’s Separation from Service (other than on account of a death) pursuant to the distribution rules of section 6.03;
(b) The Participant’s death pursuant to the distribution rules of section 6.04;
- 17 -
Notwithstanding the foregoing, the Board of Directors of the Company may specify different terms for the distribution of Mandatory
Deferrals. Such specification may always occur not later than when the Mandatory Deferral becomes irrevocable under section 4.05(c). Such
specification may also occur later, but only to the extent that such later specification satisfies the requirements of section 4.04 (as if it were an
election by the Participant). In addition, unless otherwise determined by the Board of Directors, the Participant may make an election under
section 4.04.
6.06 Valuation:
In determining the amount of any individual distribution pursuant to this Article, the Participant’s Deferral Subaccount shall continue to be
credited with earnings and gains (and debited for expenses and losses) as specified in Article V until the Distribution Valuation Date that is
used in determining the amount of the distribution under this Article. If a particular section in this Article does not specify a Distribution
Valuation Date to be used in calculating the distribution, the Participant’s Deferral Subaccount shall continue to be credited with earnings and
gains (and debited for expenses and losses) as specified in Article V until the Distribution Valuation Date most recently preceding the date of
such distribution.
6.07 Impact of Section 16 of the Act on Distributions:

The provisions of section 7.05 shall apply in determining whether a Participant’s distribution shall be delayed beyond the date applicable
under the preceding provisions of this Article VI.
6.08 Actual Payment Date:

An amount payable on a date specified in this Article VI shall be paid no later than the later of (a) the end of the calendar year in which the
specified date occurs, or (b) the 15th day of the third calendar month following such specified date. In addition, the Participant (or Beneficiary)
is not permitted to designate the taxable year of the payment.
- 18 -
ARTICLE VII — PLAN ADMINISTRATION
7.01 Plan Administrator:

The Plan Administrator is responsible for the administration of the Plan. The Plan Administrator has the authority to name one or more
delegates to carry out certain responsibilities hereunder, as specified in the definition of Plan Administrator. To the extent not already set forth
in the Plan, any such delegation shall state the scope of responsibilities being delegated and is subject to section 7.05 below.
7.02 Action:
Action by the Plan Administrator may be taken in accordance with procedures that the Plan Administrator adopts from time to time or that
the Company’s Law Department determines are legally permissible.
7.03 Powers of the Plan Administrator:

The Plan Administrator shall administer and manage the Plan and shall have (and shall be permitted to delegate) all powers necessary to
accomplish that purpose, including the following:
(a) To exercise its discretionary authority to construe, interpret, and administer this Plan;
(b) To exercise its discretionary authority to make all decisions regarding eligibility, participation and deferrals, to make allocations and
determinations required by this Plan, and to maintain records regarding Participants’ Accounts;
(c) To compute and certify to the Company the amount and kinds of payments to Participants or their Beneficiaries, and to determine the
time and manner in which such payments are to be paid;
(d) To authorize all disbursements by the Company pursuant to this Plan;
(e) To maintain (or cause to be maintained) all the necessary records for administration of this Plan;
(f) To make and publish such rules for the regulation of this Plan as are not inconsistent with the terms hereof;
(g) To delegate to other individuals or entities from time to time the performance of any of its duties or responsibilities hereunder;
(h) To change the phantom investment under Article V;
- 19 -
(i) To hire agents, accountants, actuaries, consultants and legal counsel to assist in operating and administering the Plan; and
(j) Notwithstanding any other provision of this Plan except section 7.06 (relating to compliance with Section 409A), the Plan
Administrator or the Recordkeeper may take any action the Plan Administrator determines is necessary to assure compliance with any policy
of the Company respecting insider trading as may be in effect from time to time. Such actions may include altering the distribution date of
Deferral Subaccounts. Any such actions shall alter the normal operation of the Plan to the minimum extent necessary.
The Plan Administrator has the exclusive and discretionary authority to construe and to interpret the Plan, to decide all questions of
eligibility for benefits, to determine the amount and manner of payment of such benefits and to make any determinations that are contemplated
by (or permissible under) the terms of this Plan, and its decisions on such matters will be final and conclusive on all parties. Any such decision
or determination shall be made in the absolute and unrestricted discretion of the Plan Administrator, even if (1) such discretion is not expressly
granted by the Plan provisions in question, or (2) a determination is not expressly called for by the Plan provisions in question, and even
though other Plan provisions expressly grant discretion or call for a determination. As a result, benefits under this Plan will be paid only if the
Plan Administrator decides in its discretion that the applicant is entitled to them. In the event of a review by a court, arbitrator or any other
tribunal, any exercise of the Plan Administrator’s discretionary authority shall not be disturbed unless it is clearly shown to be arbitrary and
capricious.
7.04 Compensation, Indemnity and Liability:

The Plan Administrator will serve without bond and without compensation for services hereunder. All expenses of the Plan and the Plan
Administrator will be paid by the Company. To the extent deemed appropriate by the Plan Administrator, any such expense may be charged
against specific Participant Accounts, thereby reducing the obligation of the Company. No member of the Board of Directors (who serves as
the Plan Administrator), and no individual acting as the delegate of the Board of Directors, shall be liable for any act or omission of any other
member or individual, nor for any act or omission on his or her own part, excepting his or her own willful misconduct. The Company will
indemnify and hold harmless each member of the Board of Directors and any employee of the Company (or a Company affiliate, if recognized
as an affiliate for this purpose by the Plan Administrator) acting as the delegate of the Board of Directors against any and all expenses and
liabilities, including reasonable legal fees and expenses, arising in connection with this Plan out of his or her membership on the Board of
Directors (or his or her serving as the delegate of the Board of Directors), excepting only expenses and liabilities arising out of his or her own
willful misconduct or bad faith.
- 20 -
7.05 Section 16 Compliance:

(a) In General. This Plan is intended to be a formula plan for purposes of Section 16 of the Act. Accordingly, in the case of a deferral or
other action under the Plan that constitutes a transaction that could be covered by Rule 16b-3(d) or (e), if it were approved by the Company’s
Board or Compensation and Management Development Committee (“Board Approval”), it is intended that the Plan shall be administered by
delegates of the Board, in the case of a Participant who is subject to Section 16 of the Act, in a manner that will permit the Board Approval of
the Plan to avoid any additional Board Approval of specific transactions to the maximum possible extent.
(b) Approval of Distributions: This Subsection shall govern the distribution of a deferral that (i) is being distributed to a Participant in
cash, (ii) was the subject of a Second Look Election, (iii) is made to a Participant who is subject to Section 16 of the Act at the time the interest
in the phantom PBG Common Stock would be liquidated in connection with the distribution, and (iv) if paid at the time the distribution would
be made without regard to this subsection, could result in a violation of Section 16 of the Act because there is an opposite way transaction
that would be matched with the liquidation of the Participant’s interest in phantom PBG Common Stock (either as a “discretionary transaction,”
within the meaning of Rule 16b-3(b)(1), or as a regular transaction, as applicable) (“Covered Distribution”). In the case of a Covered
Distribution, if the liquidation of the Participant’s interest in the phantom PBG Common Stock in connection with the distribution has not
received Board Approval by the time the distribution would be made if it were not a Covered Distribution, or if it is a discretionary transaction,
then the actual distribution to the Participant shall be delayed only until the earlier of:
(1) In the case of a transaction that is not a discretionary transaction, Board Approval of the liquidation of the Participant’s interest in
the phantom PBG Common Stock in connection with the distribution, or
(2) The date the distribution would no longer violate Section 16 of the Act, e.g., when the Participant is no longer subject to Section 16
of the Act, or when the time between the liquidation and an opposite way transaction is sufficient.
7.06 Conformance with Section 409A:

At all times during each Plan Year, this Plan shall be operated and construed in accordance with the requirements of Section 409A. In all
cases, the provisions of this section shall apply notwithstanding any contrary provision of the Plan that is not contained in this section.
- 21 -
ARTICLE VIII — AMENDMENT AND TERMINATION
8.01 Amendment of Plan:

The Board of Directors of the Company has the right in its sole discretion to amend this Plan in whole or in part at any time and in any
manner, including the manner of making deferral elections, the terms on which distributions are made, and the form and timing of distributions.
However, except for mere clarifying amendments necessary to avoid an inappropriate windfall, no Plan amendment shall reduce the amount
credited to the Account of any Participant as of the date such amendment is adopted. Any amendment shall be in writing and adopted by the
Board of Directors. All Participants and Beneficiaries shall be bound by such amendment. Any amendments made to the Plan shall be subject
to any restrictions on amendment that are applicable to ensure continued compliance under Section 409A.
8.02 Termination of Plan:

(a) The Company expects to continue this Plan, but does not obligate itself to do so. The Company, acting through its entire Board of
Directors, reserves the right to discontinue and terminate the Plan at any time, in whole or in part, for any reason (including a change, or an
impending change, in the tax laws of the United States or any State). Termination of the Plan will be binding on all Participants (and a partial
termination shall be binding upon all affected Participants) and their Beneficiaries, but in no event may such termination reduce the amounts
credited at that time to any Participant’s Account. If this Plan is terminated (in whole or in part), the termination resolution shall provide for
how amounts theretofore credited to affected Participants’ Accounts will be distributed.
(b) This section is subject to the same restrictions related to compliance with Section 409A that apply to section 8.01. In accordance with
these restrictions, the Company intends to have the maximum discretionary authority to terminate the Plan and make distributions in
connection with a Change in Control (as defined in Section 409A), and the maximum flexibility with respect to how and to what extent to carry
this out following a Change in Control (as defined in Section 409A) as is permissible under Section 409A. The previous sentence contains the
exclusive terms under which a distribution may be made in connection with any change in control with respect to deferrals made under this
Plan.
- 22 -
ARTICLE IX — MISCELLANEOUS
9.01 Limitation on Participant’s Rights:

Participation in this Plan does not give any Participant the right to be retained in the service of the Company. The Company reserves the
right to terminate the service of any Participant without any liability for any claim against the Company under this Plan, except for a claim for
payment of deferrals as provided herein.
9.02 Unfunded Obligation of the Company:

The benefits provided by this Plan are unfunded. All amounts payable under this Plan to Participants are paid from the general assets of the
Company. Nothing contained in this Plan requires the Company to set aside or hold in trust any amounts or assets for the purpose of paying
benefits to Participants. Neither a Participant, Beneficiary, nor any other person shall have any property interest, legal or equitable, in any
specific Company asset. This Plan creates only a contractual obligation on the part of the Company, and the Participant has the status of a
general unsecured creditor of the Company with respect to amounts of compensation deferred hereunder. Such a Participant shall not have
any preference or priority over, the rights of any other unsecured general creditor of the Company. No other Company affiliate guarantees or
shares such obligation, and no other Company affiliate shall have any liability to the Participant or his or her Beneficiary.
9.03 Other Plans:

This Plan shall not affect the right of any Eligible Director or Participant to participate in and receive benefits under and in accordance with
the provisions of any other Director compensation plans which are now or hereafter maintained by the Company, unless the terms of such
other plan or plans specifically provide otherwise or it would cause such other plan to violate a requirement for tax favored treatment.
9.04 Governing Law:

This Plan shall be construed, administered, and governed in all respects in accordance with applicable federal law and, to the extent not
preempted by federal law, in accordance with the laws of the State of Delaware. If any provisions of this instrument shall be held by a court of
competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective.
9.05 Gender, Tense and Examples:

In this Plan, whenever the context so indicates, the singular or plural number and the masculine, feminine, or neuter gender shall be deemed
to include the other. Whenever an example is provided or the text uses the term “including” followed by a specific item or items, or there is a
passage having a similar effect, such passage of the Plan shall be construed as if the
- 23 -
phrase “without limitation” followed such example or term (or otherwise applied to such passage in a manner that avoids limitation on its
breadth of application).
9.06 Successors and Assigns; Nonalienation of Benefits:

This Plan inures to the benefit of and is binding upon the parties hereto and their successors, heirs and assigns; provided, however, that
the amounts credited to the Account of a Participant are not subject in any manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to any benefits payable hereunder, including,
without limitation, any assignment or alienation in connection with a separation, divorce, child support or similar arrangement, will be null and
void and not binding on the Plan or the Company. Notwithstanding the foregoing, the Plan Administrator reserves the right to make payments
in accordance with a divorce decree, judgment or other court order as and when cash payments are made in accordance with the terms of this
Plan from the Deferral Subaccount of a Participant. Any such payment shall be charged against and reduce the Participant’s Account.
9.07 Facility of Payment:

Whenever, in the Plan Administrator’s opinion, a Participant or Beneficiary entitled to receive any payment hereunder is under a legal
disability or is incapacitated in any way so as to be unable to manage his or her financial affairs, the Plan Administrator may direct the
Company to make payments to such person or to the legal representative of such person for his or her benefit, or to apply the payment for the
benefit of such person in such manner as the Plan Administrator considers advisable. Any payment in accordance with the provisions of this
section shall be a complete discharge of any liability for the making of such payment to the Participant or Beneficiary under the Plan.
- 24 -
Exhibit 10.32
PBG
PENSION EQUALIZATION PLAN
(PEP)
2009 Restatement
PEP PENSION EQUALIZATION PLAN

Table of Contents
Page
No.
ARTICLE I — History and Purpose 1
1.1 History of Plan 1
ARTICLE II — Definitions and Construction 2
2.1 Definitions 2
(a) Actuarial Equivalent 2
(b) Annuity 2
(c) Code 2
(d) Company or PBG 2
(e) Compensation Limitation 2
(f) Effective Date 2
(g) ERISA 2
(h) Participant 2
(i) PBG Organization 3
(j) PEP Pension 3
(k) PepsiCo Prior Plan 3
(l) Plan 3
(m) Plan Administrator 3
(n) Plan Year 3
(o) Primary Social Security Amount 3
(p) Salaried Plan 4
(q) Salaried Plan Participant 4
(r) Section 409A 4
(s) Section 415 Limitation 4
(t) Separation from Service 4
(u) Single Lump Sum 4
(v) Specified Employee 4
(w) Vested Pension 5
2.2 Construction 5
(a) Gender and Number 5
(b) Compounds of the Word “Here” 5
ARTICLE III — Participation 5
ARTICLE IV — Amount of Retirement Pension 6
-i-
Page
No.
4.1 PEP Pension 6
(a) Same Form as Salaried Plan 6
(b) Different Form than Salaried Plan 6
4.2 PEP Guarantee 7

(a) Eligibility 7
(b) PEP Guarantee Formula 7
4.3 Certain Adjustments 9

(a) Adjustments for Rehired Participants 9
(b) Adjustment for Increased Pension Under Other Plans 9
4.4 Reemployment of Certain Participants 10
4.5 Vesting; Misconduct 10
ARTICLE V — Death Benefits 10
5.1 Death Benefits 10
ARTICLE VI — Distributions 11
6.1 Form and Timing of Distributions 11

(a) Time and Form of Payment of Grandfathered Benefit 11
(b) Time and Form of Payment of Non-Grandfathered Benefit 11
6.2 Special Rules for Survivor Options 12

(a) Effect of Certain Deaths 12
(b) Nonspouse Beneficiaries 13
6.3 Designation of Beneficiary 13
6.4 Determination of Single Lump Sum Amounts 13

(a) Vested Pensions 13
(b) 2008 Reorganization 13
6.5 Section 162(m) Postponement 13
ARTICLE VII — Administration 14
7.1 Authority to Administer Plan 14
7.2 Facility of Payment 14
7.3 Claims Procedure 14
7.4 Effect of Specific References 15
7.5 Limitations on Actions 15
ARTICLE VIII — Miscellaneous 15
8.1 Nonguarantee of Employment 15
- ii -
Page
No.
8.2 Nonalienation of Benefits 16
8.3 Unfunded Plan 16
8.4 Action by the Company 16
8.5 Indemnification 16
8.6 Applicable Law 16
8.7 Withholding 16
ARTICLE IX — Amendment and Termination 16
9.1 Continuation of the Plan 17
9.2 Amendments 17
9.3 Termination 17
APPENDIX 18
Foreword 18
Article IPO — Transferred and Transition Individuals 18
Article B — Special Cases 19
Article C — Transfers From/To PepsiCo, Inc. 20
- iii -
ARTICLE I – History and Purpose

1.1 History of Plan. The Pepsi Bottling Group, Inc. (the “Company”) established the PBG Pension Equalization Plan (“PEP” or “Plan”)
effective April 6, 1999 for the benefit of salaried employees of the PBG Organization who participate in the PBG Salaried Employees Retirement
Plan (“Salaried Plan”). The Plan was amended by a First Amendment effective as of May 26, 1999. The Plan was further amended and
completely restated effective January 1, 2006. The Plan provides benefits for eligible employees whose pension benefits under the Salaried
Plan are limited by the provisions of the Internal Revenue Code of 1986, as amended. In addition, the Plan provides benefits for certain eligible
employees based on the pre-1989 Salaried Plan formula. The Plan is intended as a nonqualified unfunded deferred compensation plan for
federal income tax purposes. For purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Plan is structured as two
plans. The portion of the Plan that provides benefits based on limitations imposed by Section 415 of the Internal Revenue Code (the “Code”)
is intended to be an “excess benefit plan” as described in Section 4(b)(5) of ERISA. The portion of the Plan that provides benefits based on
limitations imposed by Section 401(a)(17) of the Code is intended to be a plan described in Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA
providing benefits to a select group of management or highly-compensated employees.
The Plan was initially established as a successor plan to the PepsiCo Pension Equalization Plan, due to PBG’s April 6, 1999 initial public
offering and the Plan included historical PepsiCo provisions which are relevant for eligibility and benefit determinations under the Plan. The
Plan was amended and completely restated effective as of January 1, 2006. Subsequent to October 3, 2004, the Plan has been administered in
accordance with a good faith interpretation of Section 409A of the Code and IRS regulations and other guidance thereunder.
The Company now wishes to further amend and completely restate the Plan, effective as of January 1, 2009 except as otherwise explicitly
provided in the Plan, to comply with Section 409A of the Code.
NOW, THEREFORE, the PBG Pension Equalization Plan is hereby amended and completely restated (the “2009 Restatement”) as follows.
1.2 Effect of Amendment and Restatement. The Plan as in effect on October 3, 2004 is referred to herein as the Prior Plan.
Except as otherwise explicitly provided in Section 6.1(b)(3) of this Plan, a Participant’s benefit (including death benefits), determined under
the terms of the Plan as in effect on October 3, 2004 as if the Participant had terminated employment on December 31, 2004, without regard to
any compensation paid or services rendered after 2004, or any other events affecting the amount of or the entitlement to benefits (other than
the Participant’s survival or the Participant’s election under the terms of the Plan with respect to the time or form of benefit) (the
“Grandfathered Benefit”) shall be paid at the time and in the form provided by the terms of the Plan as in effect on October 3, 2004.
-1-
The benefit of a Participant accrued under this Plan based on all compensation and services taken into account by the Prior Plan and this
Plan, less the Participant’s Grandfathered Benefit, shall be paid in the times and in the form as provided in this Plan. Except as otherwise
explicitly provided in this Plan, this Plan supersedes the Prior Plan effective January 1, 2009, with respect to amounts accrued and vested after
2004 by Participants who have not commenced receiving benefits as of January 1, 2009. The Plan has been administered in accordance with a
good faith interpretation of Section 409A of the Internal Revenue Code and IRS regulations and guidance thereunder since January 1, 2005.
Amounts accrued under this Plan after 2004 shall be treated as payable under a separate Plan for purposes of Section 409A of the Internal
Revenue Code.
ARTICLE II – Definitions and Construction

2.1 Definitions. The following words and phrases, when used in this Plan, shall have the meaning set forth below unless the context clearly
indicates otherwise. Unless otherwise expressly qualified by the terms or the context of this Plan, the terms used in this Plan shall have the
same meaning as those terms in the Salaried Plan.
(a) Actuarial Equivalent. Except as otherwise specifically set forth in the Plan or any Appendix to the Plan with respect to a specific
benefit determination, a benefit of equivalent value computed on the basis of the factors applicable for such purposes under the Salaried Plan.
(b) Annuity. A Pension payable as a series of monthly payments for at least the life of the Participant.
(c) Code. The Internal Revenue Code of 1986, as amended from time to time.
(d) Company or PBG. The Pepsi Bottling Group, Inc., a corporation organized and existing under the laws of the State of Delaware, or its
successor or successors.
(e) Compensation Limitation. Benefits not payable under the Salaried Plan because of the limitations on the maximum amount of
compensation which may be considered in determining the annual benefit of the Salaried Plan Participant under Section 401(a)(17) of the Code.
(f) Effective Date. The date upon which this Plan was effective, which is April 6, 1999 (except as otherwise provided herein).
(g) ERISA. Public Law No. 93-406, the Employee Retirement Income Security Act of 1974, as amended from time to time.
(h) Participant. An Employee participating in the Plan in accordance with the provisions of Section 3.1.
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(i) PBG Organization. The controlled group of organizations of which the Company is a part, as defined by Code section 414 and
regulations issued thereunder. An entity shall be considered a member of the PBG Organization only during the period it is one of the group of
organizations described in the preceding sentence.
(j) PEP Pension. One or more payments that are payable to a person who is entitled to receive benefits under the Plan. The term
“Grandfather Benefit” shall be used to refer to the portion of a PEP Pension that is payable in accordance with the Plan as in effect October 3,
2004 and is not subject to Section 409A.
(k) PepsiCo Prior Plan. The PepsiCo Pension Equalization Plan.
(l) Plan. The PBG Pension Equalization Plan, the Plan set forth herein, as it may be amended from time to time. The Plan is also sometimes
referred to as PEP. For periods before April 6, 1999, references to the Plan refer to the PepsiCo Prior Plan.
(m) Plan Administrator. The Company, which shall have authority to administer the Plan as provided in Article VII.
(n) Plan Year. The 12-month period ending on each December 31st .
(o) Primary Social Security Amount. In determining Pension amounts, Primary Social Security Amount shall mean:
(1) For purposes of determining the amount of a Retirement, Vested or Pre-Retirement Spouse’s Pension, the Primary Social Security
Amount shall be the estimated monthly amount that may be payable to a Participant commencing at age 65 as an old-age insurance benefit
under the provisions of Title II of the Social Security Act, as amended. Such estimates of the old-age insurance benefit to which a
Participant would be entitled at age 65 shall be based upon the following assumptions:
(i) That the Participant’s social security wages in any year prior to Retirement or severance are equal to the Taxable Wage Base in
such year, and
(ii) That he will not receive any social security wages after Retirement or severance.
However, in computing a Vested Pension under Section 4.2, the estimate of the old-age insurance benefit to which a Participant would be
entitled at age 65 shall be based upon the assumption that he continued to receive social security wages until age 65 at the same rate as the
Taxable Wage Base in effect at his severance from employment. For purposes of this subsection, “social security wages” shall mean wages
within the meaning of the Social Security Act.
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(2) For purposes of paragraph (1), the Primary Social Security Amount shall exclude amounts that may be available because of the
spouse or any dependent of the Participant or any amounts payable on account of the Participant’s death. Estimates of Primary Social
Security Amounts shall be made on the basis of the Social Security Act as in effect at the Participant’s Severance from Service Date,
without regard to any increases in the social security wage base or benefit levels provided by such Act which take effect thereafter.
(p) Salaried Plan. The PBG Salaried Employees Retirement Plan, as it may be amended from time to time. Any references herein to the
Salaried Plan for a period that is before the Effective Date shall mean the PepsiCo Salaried Employees Retirement Plan.
(q) Salaried Plan Participant. An Employee who is a participant in the Salaried Plan.
(r) Section 409A. Section 409A of the Code and the applicable regulations and other guidance issued thereunder.
(s) Section 415 Limitation. Benefits not payable under the Salaried Plan because of the limitations imposed on the annual benefit of a
Salaried Plan Participant by Section 415 of the Code.
(t) Separation from Service. A Participant’s separation from service as defined in Section 409A; provided that for this purpose the term
“service recipient” shall include PepsiCo., Inc., so long as PepsiCo., Inc. or a member of the PepsiCo., Inc. controlled group maintains an
ownership interest in the Company of at least 20%.
(u) Single Lump Sum. The distribution of a Participant’s total PEP Pension in excess of the Participant’s Grandfathered Benefit in the
form of a single payment.
(v) Specified Employee. The individuals identified in accordance with principles set forth below.
(1) General. Any Participant who at any time during the applicable year is:
(i) An officer of any member of the PBG Organization having annual compensation greater than $130,000 (as adjusted under
Section 416(i)(1) of the Code);
(ii) A 5-percent owner of any member of the PBG Organization; or
(iii) A 1-percent owner of any member of the PBG Organization having annual compensation of more than $150,000.
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For purposes of (i) above, no more than 50 employees identified in the order of their annual compensation shall be treated as officers.
For purposes of this section, annual compensation means compensation as defined in Treas. Reg. § 1.415(c)-2(a), without regard to Treasury
Reg. §§ 1.415(c)-2(d), 1.415(c)-2(e), and 1.415(c)-2(g). The Plan Administrator shall determine who is a Specified Employee in accordance with
Section 416(i) of the Code and the applicable regulations and other guidance of general applicability issued thereunder or in connection
therewith, and provided further that the applicable year shall be determined in accordance with Section 409A and that any modification of the
foregoing definition that applies under Section 409A shall be taken into account.
(1) Applicable Year. Except as otherwise required by Section 409A, the Plan Administrator shall determine Specified Employees as of
the last day of each calendar year, based on compensation for such year, and such designation shall be effective for purposes of this Plan for
the twelve month period commencing on April 1st of the next following calendar year.
(2) Rule of Administrative Convenience. In addition to the foregoing, the Plan Administrator shall treat all other Employees classified
as E5 and above on the applicable determination date prescribed in subsection (2) (i.e., the last day of each calendar year) as a Specified
Employee for purposes of the Plan for the twelve-month period commencing of the applicable April 1st date. However, if there are at least 200
Specified Employees without regard to this provision, then it shall not apply. If there are less than 200 Specified Employees without regard to
this provision, but full application of this provision would cause there to be more than 200 Specified Employees, then (to the extent necessary
to avoid exceeding 200 Specified Employees) those Employees classified as E5 and above who have the lowest base salaries on such
applicable determination date shall not be Specified Employees.
(w) Vested Pension. The PEP Pension available to a Participant who has a vested PEP Pension and is not eligible for a Retirement
Pension.
2.2 Construction. The terms of the Plan shall be construed in accordance with this section.
(a) Gender and Number. The masculine gender, where appearing in the Plan, shall be deemed to include the feminine gender, and the
singular may include the plural, unless the context clearly indicates to the contrary.
(b) Compounds of the Word “Here”. The words “hereof”, “hereunder” and other similar compounds of the word “here” shall mean and
refer to the entire Plan, not to any particular provision or section.
ARTICLE III – Participation
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3.1 Each Salaried Plan Participant whose benefit under the Salaried Plan is curtailed by the Compensation Limitation or the Section 415
Limitation, or both, and each other Salaried Plan Participant whose 1988 pensionable “earnings” under the Salaried Plan, as described in
Section 4.2(a), were $75,000 or more shall participate in this Plan.
ARTICLE IV – Amount of Retirement Pension

4.1 PEP Pension. Subject to Section 4.5, a Participant’s PEP Pension shall equal the amount determined under (a) or (b) of this Section 4.1,
whichever is applicable. Such amount shall be determined as of the date of the Participant’s Separation from Service.
(a) Same Form as Salaried Plan. If a Participant’s PEP Pension will be paid in the same form and will commence as of the same time as his
pension under the Salaried Plan, then his monthly PEP Pension shall be equal to the excess of:
(1) The greater of (i) the monthly pension benefit which would have been payable to such Participant under the Salaried Plan without
regard to the Compensation Limitation and the Section 415 Limitation, and (ii) if applicable, the amount determined in accordance with
Section 4.2, expressed in such form and payable as of such time; over
(2) The amount of the monthly pension benefit that is in fact payable to such Salaried Plan Participant under the Salaried Plan,
expressed in such form and payable as of such time.
The amount of the monthly pension benefit so determined, less the portion of such benefit that is the Participant’s Grandfathered Benefit,
shall be payable as provided in Section 6.2.
(b) Different Form than Salaried Plan. If a Participant’s PEP Pension will be paid in a different form (whether in whole or in part) or will
commence as of a different time than his pension benefit under the Salaried Plan, his PEP Pension shall be the product of:
(1) The greater of (i) the monthly pension benefit which would have been payable to such Participant under the Salaried Plan without
regard to the Compensation Limitation and the Section 415 Limitation, and (ii) if applicable, the amount determined in accordance with
Section 4.2, expressed in the form and payable as of such time as applies to his PEP Pension under this Plan, multiplied by
(2) A fraction, the numerator of which is the value of the amount determined in Section 4.1(b)(1), reduced by the value of his pension
under the Salaried Plan, and the denominator of which is the value of the amount determined in Section 4.1(b)(1) (with value determined on a
reasonable and consistent basis, in the discretion of the Plan Administrator, with respect to similarly situated employees).
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The amount of the monthly pension benefit so determined, less the portion of such benefit that is the Participant’s Grandfathered Benefit,
shall be payable as provided in Section 6.2.
Notwithstanding the above, in the event any portion of the accrued benefit of a Participant under this Plan or the Salaried Plan is awarded
to an alternate payee pursuant to a qualified domestic relations order, as such terms are defined in Section 414(p) of the Code, the Participant’s
total PEP Pension shall be adjusted, as the Plan Administrator shall determine, so that the combined benefit payable to the Participant and the
alternate payee from this Plan and the Salaried Plan is the amount determined pursuant to subsections 4.1(a) and (b) above.
4.2 PEP Guarantee. A Participant who is eligible under subsection (a) below shall be entitled to a PEP Guarantee benefit determined under
subsection (b) below, if any.
(a) Eligibility. A Participant shall be covered by this section if the Participant has 1988 pensionable earnings from an Employer of at least
$75,000. For purposes of this section, “1988 pensionable earnings” means the Participant’s remuneration for the 1988 calendar year that was
recognized for benefit accrual received under the Salaried Plan as in effect in 1988. “1988 pensionable earnings” does not include remuneration
from an entity attributable to any period when that entity was not an Employer.
(b) PEP Guarantee Formula. The amount of a Participant’s PEP Guarantee shall be determined under paragraph (1), subject to the special
rules in paragraph (2).
(1) Formula. The amount of a Participant’s PEP Guarantee under this paragraph shall be determined as follows:
(i) Three percent of the Participant’s Highest Average Monthly Earnings for the first 10 years of Credited Service, plus
(ii) One percent of the Participant’s Highest Average Monthly Earnings for each year of Credited Service in excess of 10 years, less
(iii) One and two-thirds percent of the Participant’s Primary Social Security Amount multiplied by years of Credited Service not in
excess of 30 years.
In determining the amount of a Vested Pension, the PEP Guarantee shall first be calculated on the basis of (I) the Credited Service the
Participant would have earned had he remained in the employ of the Employer until his Normal Retirement Age, and (II) his Highest
Average Monthly Earnings and Primary Social Security Amount at his Severance from Service Date, and then shall be reduced by
multiplying the resulting amount by a fraction, the numerator of which is the Participant’s actual years of Credited Service on his
Severance from Service Date and the denominator of which is the years of Credited Service he would
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have earned had he remained in the employ of an Employer until his Normal Retirement Age.
(2) Calculation. The amount of the PEP Guarantee shall be determined pursuant to paragraph (1) above, subject to the following
special rules:
(i) Surviving Eligible Spouse’s Annuity: Subject to subparagraph (iii) below and the last sentence of this subparagraph, if the
Participant has an Eligible Spouse and has commenced receipt of an Annuity under this section, the Participant’s Eligible Spouse shall
be entitled to receive a survivor annuity equal to 50 percent of the Participant’s Annuity under this section, with no corresponding
reduction in such Annuity for the Participant. Annuity payments to a surviving Eligible Spouse shall begin on the first day of the month
coincident with or following the Participant’s death and shall end with the last monthly payment due prior to the Eligible Spouse’s death.
If the Eligible Spouse is more than 10 years younger than the Participant, the survivor benefit payable under this subparagraph shall be
adjusted as provided below.
(A) For each full year more than 10 but less than 21 that the surviving Eligible Spouse is younger than the Participant, the
survivor benefit payable to such spouse shall be reduced by 0.8 percent.
(B) For each full year more than 20 that the surviving Eligible Spouse is younger than the Participant, the survivor benefit
payable to such spouse shall be reduced by an additional 0.4 percent.
This subparagraph applies only to a Participant who retires on or after his Early Retirement Date.
(ii) Reductions. The following reductions shall apply in determining a Participant’s PEP Guarantee.
(A) If the Participant will receive an Early Retirement Pension, the payment amount shall be reduced by 3/12ths of 1 percent for
each month by which the benefit commencement date precedes the date the Participant would attain his Normal Retirement Date.
(B) If the Participant is entitled to a Vested Pension, the payment amount shall be reduced to the Actuarial Equivalent of the
amount payable at his Normal Retirement Date (if payment commences before such date), and the reductions set forth in the Salaried
Plan for any Pre-Retirement Spouse’s coverage shall apply.
(C) This clause applies if the Participant will receive his PEP Guarantee in a form that provides an Eligible Spouse benefit,
continuing for the life of the surviving spouse, that is greater than that
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provided under subparagraph (i). In this instance, the Participant’s PEP Guarantee under this section shall be reduced so that the total
value of the benefit payable on the Participant’s behalf is the Actuarial Equivalent of the PEP Guarantee otherwise payable under the
foregoing provisions of this section.
(D) This clause applies if the Participant will receive his PEP Guarantee in a form that provides a survivor annuity for a
beneficiary who is not his Eligible Spouse. In this instance, the Participant’s PEP Guarantee under this section shall be reduced so that
the total value of the benefit payable on the Participant’s behalf is the Actuarial Equivalent of a Single Life Annuity for the
Participant’s life.
(E) This clause applies if the Participant will receive his PEP Guarantee in a Annuity form that includes inflation protection
described in the Salaried Plan. In this instance, the Participant’s PEP Guarantee under this section shall be reduced so that the total
value of the benefit payable on the Participant’s behalf is the Actuarial Equivalent of the elected Annuity without such protection.
(iii) Lump Sum Conversion. The amount of the PEP Guarantee determined under this section for a Participant whose Retirement
Pension will be distributed in the form of a lump sum shall be the Actuarial Equivalent of the Participant’s PEP Guarantee determined
under this section, taking into account the value of any survivor benefit under subparagraph (i) above and any early retirement
reductions under subparagraph (ii)(A) above.
4.3 Certain Adjustments. Pensions determined under the foregoing sections of this Article are subject to adjustment as provided in this
section. For purposes of this section, “specified plan” shall mean the Salaried Plan or a nonqualified pension plan similar to this Plan. A
nonqualified pension plan is similar to this Plan if it is sponsored by a member of the PBG Organization and if its benefits are not based on
participant pay deferrals (this category of similar plans includes the PepsiCo Prior Plan).
(a) Adjustments for Rehired Participants. This subsection shall apply to a current or former Participant who is reemployed after his
Annuity Starting Date and whose benefit under the Salaried Plan is recalculated based on an additional period of Credited Service. In the event
of any such recalculation, the Participant’s PEP Pension shall also be recalculated hereunder. For this purpose, the PEP Guarantee under
Section 4.2 is adjusted for in-service distributions and prior distributions in the same manner as benefits are adjusted under the Salaried Plan,
but by taking into account benefits under this Plan and any specified plans.
(b) Adjustment for Increased Pension Under Other Plans. If the benefit paid under a specified plan on behalf of a Participant is
increased after PEP benefits on his behalf have been determined (whether the increase is by order of a court, by agreement of the plan
administrator of the specified plan, or otherwise), the PEP benefit for the Participant shall
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be recalculated. If the recalculation identifies an overpayment hereunder, the Plan Administrator shall take such steps as it deems advisable to
recover the overpayment. It is specifically intended that there shall be no duplication of payments under this Plan and any specified plans.
4.4 Reemployment of Certain Participants. In the case of a current or former Participant who is reemployed and is eligible to reparticipate
in the Salaried Plan after his Annuity Starting Date, payment of his non-Grandfathered PEP Pension will not be suspended. If such Participant
accrues an additional PEP Pension for service after such reemployment, his PEP Pension on his subsequent Separation from Service shall be
reduced by the present value of PEP benefits previously distributed to such Participant, as determined by the Plan Administrator.
4.5 Vesting; Misconduct. A Participant shall be fully vested in his Accrued Benefit at the time he becomes fully vested in his accrued
benefit under the Salaried Plan. Notwithstanding the preceding, or any other provision of the Plan to the contrary, a Participant shall forfeit his
or her entire PEP Pension if the Plan Administrator determines that such Participant has engaged in “Misconduct” as defined below,
determined without regard to whether the Misconduct occurred before or after the Participant’s Severance from Service. The Plan
Administrator may, in its sole discretion, require the Participant to pay to the Employer any PEP Pension paid to the Participant within the
twelve month period immediately preceding a date on which the Participant engaged in such Misconduct, as determined by the Plan
Administrator.
“Misconduct” means any of the following, as determined by the Plan Administrator in good faith: (i) violation of any agreement between
the Company or Employer and the Participant, including but not limited to a violation relating to the disclosure of confidential information or
trade secrets, the solicitation of employees, customers, suppliers, licensors or contractors, or the performance of competitive services;
(ii) violation of any duty to the Company or Employer, including but not limited to violation of the Company’s Code of Conduct; (iii) making, or
causing or attempting to cause any other person to make, any statement (whether written, oral or electronic), or conveying any information
about the Company or Employer which is disparaging or which in any way reflects negatively upon the Company or Employer unless required
by law or pursuant to a Company or Employer policy; (iv) improperly disclosing or otherwise misusing any confidential information regarding
the Company or Employer; (v) unlawful trading in the securities of the Company or of another company based on information garnered as a
result of that Participant’s employment or other relationship with the Company; (vi) engaging in any act which is considered to be contrary to
the best interests of the Company or Employer, including but not limited to recruiting or soliciting employees of the Employer; or
(vii) commission of a felony or other serious crime or engaging in any activity which constitutes gross misconduct.
ARTICLE V – Death Benefits

5.1 Death Benefits. Each Participant entitled to a PEP Pension under this Plan who dies before his Annuity Starting Date shall be entitled to
a death benefit equal in amount to the additional death benefit to which the Participant would have been entitled under the Salaried
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Plan if the PEP Pension as determined under Article IV was payable under the Salaried Plan instead of this Plan. The death benefit with respect
to a Participant’s PEP Pension in excess of the Grandfathered Benefit shall become payable on the Participant’s date of death in a Single Lump
Sum payment.
Payment of any death benefit of a Participant who dies before his Annuity Starting Date under the Plan shall be made to the persons and
in the proportions to which any death benefit under the Salaried Plan is or would be paid.
ARTICLE VI – Distributions
The terms of this Article govern the distribution of benefits to a Participant who becomes entitled to payment of a PEP Pension under the
Plan.
6.1 Form and Timing of Distributions. Subject to Section 6.5, this Section shall govern the form and timing of PEP Pensions.
(a) Time and Form of Payment of Grandfathered Benefit. The Grandfathered Benefit of a Participant shall be paid in the form and at the
time or times provided by the terms of the Plan as in effect on October 3, 2004.
(b) Time and Form of Payment of Non-Grandfathered Benefit. Except as provided below, the PEP Pension payable to a Participant in
excess of the Grandfathered Benefit shall be become payable in a Single Lump Sum on the Separation from Service of the Participant.
(1) Certain Vested Pensions. A Participant (i) who incurred a Separation from Service during the period January 1, 2005 through
December 31, 2008 (other than a Participant described in (3) below); and (ii) whose Annuity Starting Date has not occurred as of January 1,
2009, shall receive his PEP Pension in excess of his Grandfathered Benefit in a Single Lump Sum which shall become payable on January 1,
2009.
(2) Annuity Election. A Participant who (i) attained age 50 on or before January 1, 2009, (ii) on or before December 31, 2008 irrevocably
elected to receive a Single Life Annuity, a 50%, 75% or 100% Joint and Survivor Annuity, or a 10 Year Certain and Life Annuity; and
(iii) incurs a Termination of Employment on or after July 1, 2009 after either attainment of age 55 and the tenth anniversary of the
Participant’s initial employment date or attainment of age 65 and the fifth anniversary of the Participant’s initial employment date, shall
receive his PEP Pension in excess of his Grandfathered Benefit in the form elected commencing on the first day of the month coincident with
or next following his Separation from Service. If such Participant Separates from Service prior to July 1, 2009 or prior to attainment of age 55
and the tenth anniversary of the Participant’s employment date, or prior to attainment of age 65 and the fifth anniversary of the Participant’s
employment, the Participant’s PEP Pension in
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excess of his Grandfathered Pension shall be payable in a Single Lump Sum on the Participant’s Separation from Service.
(3) 2008 Reorganization. The entire PEP Pension of a Participant who (i) was involuntarily Separated from Service on or after
November 1, 2008 and on or before December 19, 2008; (ii) at the time of Separation from Service had attained age 50 and had not attained
age 55, and had 10 or more years of Service; and (iii) is eligible for special retirement benefits as described in the letter agreement executed
and not revoked by the Participant, shall become payable in a Single Lump Sum on the last day of the Participant’s “Transition Period” as
defined in the letter agreement.
(4) Specified Employees. If a Participant is classified as a Specified Employee at the time of the Participant’s Separation from Service
(or at such other time for determining Specified Employee status as may apply under Section 409A), then no amount shall be payable
pursuant to this Section 6.1(b) until at least six (6) months after such a Separation from Service. Any payment otherwise due in such six
month period shall be suspended and become payable at the end of such six month period, with interest at the applicable interest rates used
for computing a Single Lump Sum payment on the date of Separation from Service.
(5) Actual Date of Payment. An amount payable on a date specified in this Article VI or in Article V shall be paid as soon as
administratively feasible after such date; but no later than the later of (a) the end of the calendar year in which the specified date occurs; or
(b) the 15th day of the third calendar month following such specified date and the Participant (or Beneficiary) is not permitted to designate the
taxable year of the payment. The payment date may be postponed further if calculation of the amount of the payment is not administratively
practicable due to events beyond the control of the Participant (or Beneficiary), and the payment is made in the first calendar year in which the
calculation of the amount of the payment is administratively practicable.
6.2 Special Rules for Survivor Options.
(a) Effect of Certain Deaths. If a Participant makes an Annuity election described in Section 6.1(b)(2) and the Participant dies before his
Separation from Service, the election shall be disregarded. Such a Participant may change his coannuitant of a Joint and Survivor Annuity at
any time prior to his Separation from Service, and may change his beneficiary of a Ten Years Certain and Life Annuity at any time. If the
Participant dies after such election becomes effective but before his non-Grandfathered PEP Pension actually commences, the election shall be
given effect and the amount payable to his surviving Eligible Spouse or other beneficiary shall commence on the first day of the month
following his death (any back payments due the Participant shall be payable to his estate). In the case of a Participant who elected a 10 Year
Certain and Life Annuity, if such Participant dies: (i) after benefits have commenced; (ii) without a surviving primary or contingent beneficiary,
and (iii) before receiving 120 payments under the form of payment, then the remaining payments due under such form of payment shall be paid
to the Participant’s estate. If payments have commenced under such form of payment to a Participant’s primary or contingent beneficiary and
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such beneficiary dies before payments are completed, then the remaining payments due under such form of payment shall be paid to such
beneficiary’s estate.
(b) Nonspouse Beneficiaries. If a Participant’s beneficiary is not his Eligible Spouse, he may not elect:
(1) The 100 percent survivor option described in Section 6.1(b)(2) with a nonspouse beneficiary more than 10 years younger than he
is, or
(2) The 75 percent survivor option described in Section 6.1(b)(2) with a nonspouse beneficiary more than 19 years younger than he is.
6.3 Designation of Beneficiary. A Participant who has elected to receive all or part of his pension in a form of payment that includes a
survivor option shall designate a beneficiary who will be entitled to any amounts payable on his death. Such designation shall be made on a
PEP Election Form. A Participant shall have the right to change or revoke his beneficiary designation at any time prior to when his election is
finally effective. The designation of any beneficiary, and any change or revocation thereof, shall be made in accordance with rules adopted by
the Plan Administrator. A beneficiary designation shall not be effective unless and until filed with the Plan Administrator
6.4 Determination of Single Lump Sum Amounts. Except as otherwise provided below, a Single Lump Sum payable under Article V or
Section 6.1 shall be determined in the same manner as the single lump sum payment option prescribed in Section 6.1(b)(3) of the Salaried Plan.
(a) Vested Pensions. If on the date of Separation from Service of a Participant such Participant is not entitled to retire with an immediate
pension under the Salaried Plan, the Single Lump Sum payable to the Participant under Section 6.1 shall be determined in the same manner as
the single lump sum payment option prescribed in Section 6.1(b)(3) of the Salaried Plan but substituting (for Plan Years beginning before 2012)
the applicable segment rates for the blended 30 year Treasury and segment rates that would otherwise be applicable.
(b) 2008 Reorganization. Notwithstanding subsection (a) above, the Single Lump Sum payment for a Participant whose employment was
involuntarily terminated as a result of the 2008 Reorganization on or after November 1, 2008 and on or before December 19, 2008 shall be
determined based on the applicable interest rates and mortality used by the Salaried Plan for optional lump sum distributions in
December 2008, provided that in no event shall such Single Lump Sum payment be less than the Single Lump Sum determined based on the
applicable interest rates and mortality used by the Salaried Plan for lump sum distributions for the month in which the Single Lump Sum is
distributed to the Participant.
6.5 Section 162(m) Postponement. Notwithstanding any other provision of this Plan to the contrary, no PEP Pension shall be paid to any
Participant prior to the earliest date on which the Company’s federal income tax deduction for such payment is not precluded by Section
162(m) of the Code. In the event any payment is delayed solely as a result of the preceding restriction, such
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payment shall be made as soon as administratively feasible following the first date as of which Section 162(m) of the Code no longer precludes
the deduction by the Company of such payment. Amounts deferred because of the Section 162(m) deduction limitation shall be increased by
simple interest for the period of delay at the annual rate of six percent (6%).
ARTICLE VII – Administration

7.1 Authority to Administer Plan. The Plan shall be administered by the Plan Administrator, which shall have the authority to interpret the
Plan and issue such regulations as it deems appropriate. The Plan Administrator shall maintain Plan records and make benefit calculations, and
may rely upon information furnished it by the Participant in writing, including the Participant’s current mailing address, age and marital status.
The Plan Administrator’s interpretations, determinations, regulations and calculations shall be final and binding on all persons and parties
concerned. The Company, in its capacity as Plan Administrator or in any other capacity, shall not be a fiduciary of the Plan for purposes of
ERISA, and any restrictions that apply to a party in interest under section 406 of ERISA shall not apply to the Company or otherwise under the
Plan.
7.2 Facility of Payment. Whenever, in the Plan Administrator’s opinion, a person entitled to receive any payment of a benefit or installment
thereof hereunder is under a legal disability or is incapacitated in any way so as to be unable to manage his financial affairs, the Plan
Administrator may make payments to such person or to the legal representative of such person for his benefit, or the Plan Administrator may
apply the payment for the benefit of such person in such manner as it considers advisable. Any payment of a benefit or installment thereof in
accordance with the provisions of this section shall be a complete discharge of any liability for the making of such payment under the
provisions of the Plan.
7.3 Claims Procedure. The Plan Administrator shall have the exclusive discretionary authority to construe and to interpret the Plan, to
decide all questions of eligibility for benefits and to determine the amount of such benefits, and its decisions on such matters are final and
conclusive. This discretionary authority is intended to be absolute, and in any case where the extent of this discretion is in question, the Plan
Administrator is to be accorded the maximum discretion possible. Any exercise of this discretionary authority shall be reviewed by a court,
arbitrator or other tribunal under the arbitrary and capricious standard (i.e., the abuse of discretion standard). If, pursuant to this discretionary
authority, an assertion of any right to a benefit by or on behalf of a Participant or beneficiary is wholly or partially denied, the Plan
Administrator, or a party designated by the Plan Administrator, will provide such claimant within the 90-day period following the receipt of the
claim by the Plan Administrator, a comprehensible written notice setting forth:
(a) The specific reason or reasons for such denial;
(b) Specific reference to pertinent Plan provisions on which the denial is based;
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(c) A description of any additional material or information necessary for the claimant to submit to perfect the claim and an explanation of
why such material or information is necessary; and
(d) A description of the Plan’s claim review procedure. The claim review procedure is available upon written request by the claimant to
the Plan Administrator, or the designated party, within 60 days after receipt by the claimant of written notice of the denial of the claim, and
includes the right to examine pertinent documents and submit issues and comments in writing to the Plan Administrator, or the designated
party. The decision on review will be made within 60 days after receipt of the request for review, unless circumstances warrant an extension of
time not to exceed an additional 60 days, and shall be in writing and drafted in a manner calculated to be understood by the claimant, and
include specific reasons for the decision with references to the specific Plan provisions on which the decision is based.
If within a reasonable period of time after the Plan receives the claim asserted by the Participant, the Plan Administrator, or the
designated party, fails to provide a comprehensible written notice stating that the claim is wholly or partially denied and setting forth the
information described in (a) through (d) above, the claim shall be deemed denied. Once the claim is deemed denied, the Participant shall be
entitled to the claim review procedure described in subsection (d) above. Such review procedure shall be available upon written request by the
claimant to the Plan Administrator, or the designated party, within 60 days after the claim is deemed denied. Any claim under the Plan that is
reviewed by a court shall be reviewed solely on the basis of the record before the Plan Administrator at the time it made its determination.
7.4 Effect of Specific References. Specific references in the Plan to the Plan Administrator’s discretion shall create no inference that the
Plan Administrator’s discretion in any other respect, or in connection with any other provision, is less complete or broad.
7.5 Limitations on Actions. Any claim filed under this Article VII and any action brought in state or federal court by or on behalf of a
Participant or a Beneficiary for the alleged wrongful denial of Plan benefits or for the alleged interference with ERISA-protected rights must be
brought within three years of the date the Participant’s or Beneficiary’s cause of action first accrues. Failure to bring any such cause of action
within this three-year time frame shall preclude a Participant or Beneficiary, or any representative of the Participant or Beneficiary, from
bringing the claim or cause of action. Correspondence or other communications following the mandatory appeals process described in this
Article VII shall have no effect on this three-year time frame.
ARTICLE VIII– Miscellaneous

8.1 Nonguarantee of Employment. Nothing contained in this Plan shall be construed as a contract of employment between an Employer
and any Employee, or as a right of any Employee to be continued in the employment of an Employer, or as a limitation of the right of an
Employer to discharge any of its Employees, with or without cause.
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8.2 Nonalienation of Benefits. Benefits payable under the Plan or the right to receive future benefits under the Plan shall not be subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution, or levy of any kind,
either voluntary or involuntary, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of
any right to benefits payable hereunder, including any assignment or alienation in connection with a divorce, separation, child support or
similar arrangement, shall be null and void and not binding on the Company. The Company shall not in any manner be liable for, or subject to,
the debts, contracts, liabilities, engagements or torts of any person entitled to benefits hereunder.
8.3 Unfunded Plan. The Company’s obligations under the Plan shall not be funded, but shall constitute liabilities by the Company payable
when due out of the Company’s general funds. To the extent the Participant or any other person acquires a right to receive benefits under this
Plan, such right shall be no greater than the rights of any unsecured general creditor of the Company.
8.4 Action by the Company. Any action by the Company under this Plan may be made by the Board of Directors of the Company or by the
Compensation Committee of the Board of Directors, with a report of any actions taken by it to the Board of Directors. In addition, such action
may be made by any other person or persons duly authorized by resolution of said Board to take such action.
8.5 Indemnification. Unless the Board of Directors of the Company shall determine otherwise, the Company shall indemnify, to the full
extent permitted by law, any employee acting in good faith within the scope of his employment in carrying out the administration of the Plan.
8.6 Applicable Law. All questions pertaining to the construction, validity and effect of the Plan shall be determined in accordance with the
provisions of ERISA. In the event ERISA is not applicable or does not preempt state law, the laws of the state of New York shall govern.
If any provision of this Plan is, or is hereafter declared to be, void, voidable, invalid or otherwise unlawful, the remainder of the Plan shall
not be affected thereby.
8.7 Withholding. The Employer shall withhold from amounts due under this Plan the amount necessary to enable the employer to remit to
the appropriate government entity or entities on behalf of the Participant as may be required by the federal income tax withholding provisions
of the Code, by an applicable state’s income tax, or by an applicable city, county or municipality’s earnings or income tax act. The Employer
may withhold from the compensation of, or collect from, a Participant the amount necessary to remit on behalf of the Participant any FICA
taxes which may be required with respect to amounts accrued by a Participant hereunder as determined by the Employer.
ARTICLE IX – Amendment and Termination
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9.1 Continuation of the Plan. While the Company and the Employers intend to continue the Plan indefinitely, they assume no contractual
obligation as to its continuance. In accordance with Section 8.4, the Company hereby reserves the right, in its sole discretion, to amend,
terminate, or partially terminate the Plan at any time.
9.2 Amendments. The Company may, in its sole discretion, make any amendment or amendments to this Plan from time to time, with or
without retroactive effect, at any time before the Participant’s Separation from Service. An Employer (other than the Company) shall not have
the right to amend the Plan. Any amendments made to the Plan shall be subject to any restrictions on amendment that are applicable to ensure
continued compliance under Section 409A.
9.3 Termination. The Company may terminate the Plan and all other plans aggregated with the Plan pursuant to Treas. Reg. §1.409A-1(c),
subject to the Section 409A distribution timing provisions and the restrictions on maintaining future deferred compensation arrangements set
forth in Treas. Reg. §1.409A-3(h)(2)(viii) (no new nonqualified plan within three years).
The Company also may terminate the Plan and distribute all vested accrued benefits in a lump sum payment within twelve months after a
change in control as permitted under Section 409A.
The Company also may terminate the Plan and distribute all vested accrued benefits in a lump sum payment as of the date of the corporate
dissolution of the Company in a transaction taxable under Section 331 of the Code or in the event of the bankruptcy of the Company with the
approval of the Bankruptcy Court pursuant to 11 U.S.C. §504(b)(1).
In addition, the Company may terminate the Plan and distribute all vested benefits as may otherwise be permitted by the Commissioner of
the Internal Revenue Service under Section 409A.
A termination of the Plan must comply with the provisions of Section 409A, including, but not limited to, restrictions on the timing of final
distributions and the adoption of future deferred compensation arrangements.
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APPENDIX
Foreword
This Appendix sets forth additional provisions applicable to individuals specified in the Articles of this Appendix. In any case where there
is a conflict between the Appendix and the main text of the Plan, the Appendix shall govern.
Article IPO – Transferred and Transition Individuals

IPO.1 Scope. This Article supplements the main portion of the Plan document with respect to the rights and benefits of Transferred and
Transition Individuals following the spinoff of this Plan from the PepsiCo Prior Plan.
IPO.2 Definitions. This section provides definitions for the following words or phrases in boldface and underlined. Where they appear in
this Article with initial capitals they shall have the meaning set forth below. Except as otherwise provided in this Article, all defined terms shall
have the meaning given to them in Section 2.1 of the Plan.
(a) Agreement. The 1999 Employee Programs Agreement between PepsiCo, Inc. and The Pepsi Bottling Group, Inc.
(b) Close of the Distribution Date. This term shall take the definition given it in the Agreement.
(c) Transferred Individual. This term shall take the definition given it in the Agreement.
(d) Transition Individual. This term shall take the definition given it in the Agreement.
IPO.3 Rights of Transferred and Transition Individuals. All Transferred Individuals who participated in the PepsiCo Prior Plan immediately
prior to the Effective Date shall be Participants in this Plan as of the Effective Date. The spinoff of this Plan from the PepsiCo Prior Plan shall
not result in a break in the Service or Credited Service of Transferred Individuals or Transition Individuals. Notwithstanding anything in the
Plan to the contrary, and as provided in Section 2.04 of the Agreement, all service, all compensation, and all other benefit-affecting
determinations for Transferred Individuals that, as of the Close of the Distribution Date, were recognized under the PepsiCo Prior Plan for
periods immediately before such date, shall as of the Effective Date continue to receive full recognition, credit and validity and shall be taken
into account under this Plan as if such items occurred under this Plan, except to the extent that duplication of benefits would result. Similarly,
notwithstanding anything to the contrary in the Plan, the benefits of Transition Individuals shall be determined in accordance with section
8.02 of the Agreement.
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Article B – Special Cases

B.1 This Article B of the Appendix supplements the main portion of the Plan document and is effective as of January 28, 2002.
B.2 This Article shall apply to certain highly compensated management individuals who were (i) hired as a Band IV on or about January 28,
2002 and (ii) designated by the Senior Vice President of Human Resources as eligible to receive a supplemental retirement benefit (the
“Participant”).
B.3 Notwithstanding Article IV of the Plan, the amount of the total PEP Pension under this Plan shall be equal to the excess of (1) the
monthly pension benefit which would have been payable to such individual under the Salaried Plan without regard to the Compensation
Limitation and the Section 415 Limitation, determined as if such individual’s employment commencement date with the Company were
September 10, 1990; (2) the sum of (i) the amount of the monthly pension benefit that is in fact payable under the Salaried Plan; and (ii) the
monthly amount of such individual’s deferred, vested benefit under any qualified or nonqualified defined benefit pension plan maintained by
PepsiCo., Inc. or any affiliate of PepsiCo., Inc., Tricom or YUM!, as determined by the administrator using reasonable assumptions to adjust for
different commencement dates so that the total benefit of such individual does not exceed the amount described in (1) above.
B.4 In the event of the death of such individual while employed by the Company, the individual’s beneficiary shall be entitled to a death
benefit as provided in Article V, determined based on the formula for the total benefit described above, and reduced by the survivor benefits
payable by the Salaried Plan and the other plans described above. The net amount so determined shall be payable in a Single Lump Sum as
prescribed in Article V.
B.5 The Plan Administrator shall, in its sole discretion, adjust any benefit determined pursuant to this Article B to the extend necessary or
appropriate to ensure that such individual’s benefit in the aggregate does not exceed the Company’s intent to ensure overall pension benefits
equal to the benefits that would be applicable if such individual had been continuously employed by the Company for the period commencing
September 10, 1990 to the date of Separation from Service.
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Article C – Transfers From/To PepsiCo, Inc.

C.1 This Article supplements and overrides the main portion of the Plan with respect to Participants who (i) transfer from the Company to
PepsiCo, Inc.; and (ii) transfer from PepsiCo, Inc. to the Company.
C.2 Notwithstanding Article IV of the Plan, the PEP Pension of a Participant who (i) transfers from the Company to PepsiCo., Inc. or
(ii) transfers to PepsiCo, Inc. from the Company shall be determined as set forth below.
C.3 Transfers to PepsiCo, Inc. The PEP Pension of a Participant who transfers to PepsiCo, Inc. shall be determined as of the date of such
transfer in the manner described in Article IV, including the Salaried Plan offset regardless of whether such benefit under the Salaried Plan is
transferred to a qualified plan of PepsiCo, Inc. On such Participant’s Separation from Service, the PEP Pension so determined shall become
payable in accordance with Article VI.
C.4 Transfers from PepsiCo., Inc. The PEP Pension of a Participant who transfers from PepsiCo, Inc. shall be determined as of the date of the
Participant’s Separation from Service in the manner described in Article IV and shall be reduced by any benefit accrued by the Participant
under any qualified or nonqualified plan maintained by PepsiCo, Inc. that is based on credited service included in the determination of the
Participant’s benefit under this Plan so that the total benefit from all plans does not exceed the benefit the Participant would have received had
the Participant been solely employed by the Company. The Plan Administrator shall make such adjustments as the Plan Administrator deems
appropriate to effectuate the intent of this Section C.4.
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Exhibit 10.33
(PBC LOGO)
EXECUTIVE INCOME
DEFERRAL PROGRAM
2009 Restatement
PBG
Executive Income Deferral Program
2009 Restatement
Table of Contents
Page
ARTICLE I — HISTORY AND PURPOSE 1
1.1 History and Purpose 1

1.2 Type of Plan 1
1.3 Effect of Restatement 1
ARTICLE II — DEFINITIONS 2
2.1 Account 2
2.2 Act 2
2.3 Base Compensation 2
2.4 Beneficiary 2
2.5 Bonus Compensation 2
2.6 Code 2
2.7 Company 2
2.8 Deferral Subaccount 2
2.9 Distribution Valuation Date 2
2.10 Election Form 3
2.11 Eligible Executive 3
2.12 Employer 3
2.13 Executive 3
2.14 Mandatory Deferral 3
2.15 NAV 3
2.16 Participant 3
2.17 PBG Organization 3
2.18 Performance Period 3
2.19 Plan 4
2.20 Plan Administrator 4
2.21 Plan Year 4
2.22 Recordkeeper 4
2.23 Retirement 4
2.24 Second Look Election 4
2.25 Section 409A 4
2.26 Separation from Service 4
2.27 Specific Payment Date 4
2.28 Specified Employee 5
2.29 Unforeseeable Emergency 5
TABLE OF CONTENTS
Page
2.30 Valuation Date 6
ARTICLE III — ELIGIBILITY AND PARTICIPATION 7
3.1 Eligibility to Participate 7

3.2 Termination of Eligibility to Defer 7
3.3 Termination of Participation 7
ARTICLE IV — DEFERRAL OF COMPENSATION 8
4.1 Deferral Election 8

4.2 Time and Manner of Deferral Election 9
4.3 Period of Deferral 10
4.4 Form of Deferral Payment 10
4.5 Second Look Election 10
4.6 Mandatory Deferrals 12
ARTICLE V — INTERESTS OF PARTICIPANTS 14
5.1 Accounting for Participants’ Interests 14

5.2 Investment Options 14
5.3 Method of Allocation 15
5.4 Vesting of a Participant’s Account 16
ARTICLE VI — DISTRIBUTIONS 17
6.1 General Rules 17

6.2 Distributions Based on a Specific Payment Date 18
6.3 Distributions on Account of a Separation from Service 18
6.4 Distributions on Account of Death 19
6.5 Distributions on Account of Retirement 20
6.6 Distributions on Account of Unforeseeable Emergency 20
6.7 Distributions of Mandatory Deferrals 21
6.8 Valuation 21
6.9 Section 162(m) — Automatic Deferral 22
6.10 Impact of Section 16 of the Act on Distributions 22
6.11 Actual Date of Payment 23
ARTICLE VII — PLAN ADMINISTRATION 24

7.2 Action 24
7.3 Powers of the Plan Administrator 24
7.4 Compensation, Indemnity and Liability 25
7.5 Withholding 25
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TABLE OF CONTENTS
Page
7.6 Conformance with Section 409A 26
ARTICLE VIII — CLAIMS PROCEDURE 27
8.1 Claims for Benefits 27

8.2 Appeals of Denied Claims 27
ARTICLE IX — AMENDMENT AND TERMINATION 28
9.1 Amendment of Plan 28

9.2 Termination of Plan 28
ARTICLE X — MISCELLANEOUS 29
10.1 Limitation on Participant’s Rights 29

10.2 Unfunded Obligation of Individual Employer 29
10.3 Receipt or Release 29
10.4 Governing Law 29
10.5 Adoption of Plan by Related Employers 29
10.6 Gender, Tense and Examples 29
10.7 Successors and Assigns; Nonalienation of Benefits 30
-iii-
ARTICLE I – HISTORY AND PURPOSE

1.1 History and Purpose. The Pepsi Bottling Group, Inc. (the “Company”) established the PBG Executive Income Deferral Program (the
“Plan”) to permit Eligible Executives to defer base pay and certain other compensation under its executive compensation programs. The Plan
was originally adopted effective as of April 7, 1999. Thereafter, the Plan was amended and restated in its entirety effective as of October 11,
2000 (subject to other specific effective dates set forth therein).
The earned and vested account balances in the Plan were frozen as of December 31, 2004, except for adjustments for earnings and losses,
because of Section 409A of the Internal Revenue Code enacted by the American Jobs Creation Act of 2004 (“Section 409A”). Contributions
after 2004 and amounts that were not vested as of December 31, 2004, were credited to separate accounts designed to comply with
Section 409A. This 2009 Restatement governs payment of amounts credited to such separate accounts.
1.2 Type of Plan. For federal income tax purposes, the Plan is intended to be a nonqualified unfunded deferred compensation plan. For
purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”) the Plan is intended to be a plan described in Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA providing benefits to a select group of management or highly compensated employees.
1.3 Effect of Restatement. This 2009 Restatement is effective January 1, 2009, except as otherwise explicitly provided in this document.
The Plan document as in effect on October 3, 2004, without regard to this amendment and restatement, is referred to herein as the Pre-409A
Program. Each Participant’s vested account as of December 31, 2004, as adjusted for earnings or losses in accordance with the Pre-409A
Program, are referred to as the Grandfathered Accounts. Payment of benefits credited to Grandfathered Accounts shall be governed by the
Pre-409A Program. The preservation of the terms of the Pre-409A Program, without material modification, with respect to the Grandfathered
Accounts, is intended to permit the Grandfathered Accounts to remain exempt from Section 409A, and the administration of the Plan shall be
consistent with this intent.
Contributions for periods on or after January 1, 2005, and amounts that became vested on or after January 1, 2005, as adjusted for earnings
and losses, are credited to separate accounts. Payment of amounts during the period after 2004 and before 2009 that were credited to such
non-grandfathered accounts were administered in accordance with a good faith interpretation of Section 409A, as documented in part in
interim Plan restatement drafts, Plan summaries and administration forms.
On and after January 1, 2009, payment of amounts credited to such non-grandfathered accounts shall be governed by this 2009
Restatement, as amended from time to time.
When used in this 2009 Restatement of the Plan, the following terms shall have the meanings set forth below unless a different meaning is
plainly required by the context:
2.1 Account. The account maintained for a Participant on the books of his or her Employer to determine, from time to time, the Participant’s
interest under this Plan. The balance in such Account shall be determined by the Recordkeeper pursuant to any guidelines established by the
Plan Administrator. Each Participant’s Account shall consist of at least one Deferral Subaccount for each separate deferral under Section 4.1.
The Recordkeeper may also establish such additional Deferral Subaccounts as it deems necessary for the proper administration of the Plan.
The Recordkeeper may also combine Deferral Subaccounts to the extent it deems separate accounts are not needed for sound recordkeeping.
Where appropriate, a reference to a Participant’s Account shall include a reference to each applicable Deferral Subaccount that has been
established thereunder.
2.2 Act. The Securities Exchange Act of 1934, as amended.
2.3 Base Compensation. An Eligible Executive’s base salary, to the extent payable in U.S. dollars from an Employer’s U.S. payroll.
2.4 Beneficiary. The person or persons (including a trust or trusts) properly designated by a Participant, as determined by the Plan
Administrator, to receive the Participant’s Account in the event of the Participant’s death.
2.5 Bonus Compensation. An Eligible Executive’s annual incentive award under his or her Employer’s annual incentive plan or the PBG
Executive Incentive Compensation Plan, to the extent payable in U.S. dollars from an Employer’s U.S. payroll.
2.6 Code. The Internal Revenue Code of 1986, as amended from time to time.
2.7 Company. The Pepsi Bottling Group, Inc. (also referred to herein as “PBG”), a corporation organized and existing under the laws of the
State of Delaware, or its successor or successors.
2.8 Deferral Subaccount. A Subaccount of a Participant’s Account maintained to reflect his or her interest in the Plan attributable to each
deferral (or separately tracked portion of a deferral) of Base Compensation and Bonus Compensation, and earnings or losses credited to such
Subaccount in accordance with Section 5.1(b).
2.9 Distribution Valuation Date. Each date as specified by the Plan Administrator from time to time as of which Participant Accounts are
valued for purposes of a distribution from a Participant’s Account. The current Distribution Valuation Dates are March 31, June 30, September
30 and December 31. Any current Distribution Valuation Date may be changed by the Plan Administrator, provided that such change does not
result in a change in the time of
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payment that is impermissible under Section 409A. Values are determined as of the close of a Distribution Valuation Date or, if such date is not
a business day, as of the close of the immediately preceding business day.
2.10 Election Form. The form prescribed by the Plan Administrator on which a Participant specifies the amount of his or her Base
Compensation or Bonus Compensation (or both) to be deferred and the time and form of his or her deferral payout, pursuant to the provisions
of Article IV. An Election Form need not exist in a paper format, and it is expressly contemplated that the Plan Administrator may make
available for use such technologies, including voice response systems and electronic forms, as it deems appropriate from time to time.
2.11 Eligible Executive. The term, Eligible Executive, shall have the meaning given to it in Section 3.1.
2.12 Employer. The Company and each of the Company’s subsidiaries and affiliates (if any) that is currently designated as an Employer by
the Plan Administrator. An entity shall be an Employer hereunder only for the period that it is (i) so designated by the Plan Administrator, and
(ii) a member of the PBG Organization.
2.13 Executive. Any person in an executive classification of an Employer who (i) is receiving remuneration for personal services rendered in
the employment of the Employer, and (ii) is paid in U.S. dollars from the Employer’s U.S. payroll.
2.14 Mandatory Deferral. That portion of an Eligible Executive’s Base Compensation that is mandatorily deferred under Section 4.6
pursuant to the requirements established by the Compensation Committee from time to time.
2.15 NAV. The net asset value of a phantom unit in one of the phantom funds offered for investment under the Plan, determined as of any
date in the same manner as applies on that date under the actual fund that is the basis of the phantom fund offered by the Plan.
2.16 Participant. Any Executive who is qualified to participate in this Plan in accordance with Section 3.1 and who has an Account. An
active Participant is one who is currently deferring under Section 4.1.
2.17 PBG Organization. The controlled group of organizations of which the Company is a part, as defined by Sections 414(b) and (c) of the
Code and the regulations issued thereunder. An entity shall be considered a member of the PBG Organization only during the period it is one
of the group of organizations described in the preceding sentence.
2.18 Performance Period. The 52/53 week fiscal year of the Employer for which Bonus Compensation is calculated and determined. A
Performance Period shall be deemed to relate to the Plan Year in which the Performance Period ends.
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2.19 Plan. The PBG Executive Income Deferral Program, the plan set forth herein and in the Pre-409A Program document, as the plan may be
amended and restated from time to time (subject to the limitations on amendment that are applicable hereunder and under the Pre-409A
Program).
2.20 Plan Administrator. The Compensation and Management Development Committee of the Board of Directors of the Company (the
“Compensation Committee”) or its delegate or delegates, which shall have the authority to administer the Plan as provided in Article VII.
2.21 Plan Year. The twelve-consecutive month period beginning on January 1 and ending on December 31.
2.22 Recordkeeper. For any designated period of time, the party to whom the Plan Administrator delegates the responsibility to maintain
the records of Participant Accounts, process Participant transactions and perform other duties in accordance with any procedures and rules
established by the Plan Administrator.
2.23 Retirement. Separation from Service after either (i) attainment of age 55 and the tenth anniversary of the Participant’s initial
employment date; or (ii) attainment of age 65 and the fifth anniversary of the Participant’s initial employment date.
For purposes of this section, if a Participant commences employment within the PBG Organization immediately following employment with
PepsiCo, Inc., the Participant’s initial employment date shall be the date such Participant first became employed by PepsiCo., Inc.
2.24 Second Look Election. The term Second Look Election shall have the meaning given to it in Section 4.5.
2.25 Section 409A. Section 409A of the Code and the applicable regulations and other guidance of general applicability that are issued
thereunder.
2.26 Separation from Service. A Participant’s separation from service as defined in Section 409A; provided that for this purpose, the term
“service recipient” shall include PepsiCo, Inc. so long as PepsiCo, Inc. or a member of the PepsiCo, Inc. controlled group maintains an
ownership interest in the Company of at least 20%. The term may also be used as a verb (i.e., “Separates from Service”) with no change in
meaning.
2.27 Specific Payment Date. A specific date selected by an Eligible Executive that triggers a lump sum payment of a deferral or the start of
installment payments for a deferral, as provided in Section 4.4. The Specific Payment Dates that are available to be selected by Eligible
Executives shall be determined by the Plan Administrator, and the currently available Specific Payment Dates shall be reflected on the Election
Forms that are made available from time to time by the authorization of the Plan Administrator. In the event that an Election Form only provides
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for selecting a month and a year as the Specific Payment Date, the first day of the month that is selected shall be the Specific Payment Date.
2.28 Specified Employee. The individuals identified in accordance with the principles set forth below.
(a) General. Any Participant who at any time during the applicable year is:
(1) An officer of any member of the PBG Organization having annual compensation greater than $130,000 (as adjusted for the
applicable year under Section 416(i)(1) of the Code);
For purposes of (1) above, no more than 50 employees identified in the order of their annual compensation shall be treated as officers. For
purposes of this section, annual compensation means compensation as defined in Treas. Reg. §1.415(c)-2(a), without regard to Treas. Reg.
§§1.415(c)-2(d), 1.415(c)-2(e), and 1.415(c)-2(g). The Plan Administrator shall determine who is a Specified Employee in accordance with
Section 416(i) of the Code and the applicable regulations and other guidance of general applicability issued thereunder or in connection
therewith, and provided further that the applicable year shall be determined in accordance with Section 409A and that any modification of the
foregoing definition that applies under Section 409A shall be taken into account.
(b) Applicable Year. Except as otherwise required by Section 409A, the Plan Administrator shall determine Specified Employees as of the
last day of each calendar year, based on compensation for such year, and such designation shall be effective for purposes of this Plan for the
twelve month period commencing on April 1st of the next following calendar year.
(c) Rule of Administrative Convenience. In addition to the foregoing, the Plan Administrator shall treat all other employees classified as
E5 and above on the applicable determination date prescribed in subsection (b) (i.e., the last day of each calendar year) as a Specified
Employee for purposes of the Plan for the twelve month period commencing on the applicable April 1st date. However, if there are at least 200
Specified Employees without regard to this provision, then it shall not apply. If there are less than 200 Specified Employees without regard to
this provision, but full application of this provision would cause there to be more than 200 Specified Employees, then (to the extent necessary
to avoid exceeding 200 Specified Employees) those employees classified as E5 and above who have the lowest base salaries on such
applicable determination date shall not be Specified Employees.
2.29 Unforeseeable Emergency. A severe financial hardship to the Participant resulting from:
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(a) An illness or accident of the Participant, the Participant’s spouse or a dependent (as defined in Section 152 of the Code, without
regard to Sections 152(b)(1), 152(b)(2) and 152(d)(1)(B) of the Code) of the Participant;
(b) Loss of the Participant’s property due to casualty; or
(c) Any other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.
The Recordkeeper shall determine the occurrence of an Unforeseeable Emergency in accordance with Treas. Reg. §1.409A-3(i)(3) and any
guidelines established by the Plan Administrator.
2.30 Valuation Date. Each date, as determined by the Recordkeeper, as of which Participant Accounts are valued in accordance with Plan
procedures that are currently in effect. In accordance with procedures that may be adopted by the Plan Administrator, any current Valuation
Date may be changed.
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ARTICLE III – ELIGIBILITY AND PARTICIPATION

3.1 Eligibility to Participate.
(a) In General.
(1) Subject to the election timing rules of Article IV, an Executive who is classified as salary band E1 or above shall be eligible to defer
compensation under the Plan, provided that an Eligible Executive who makes an irrevocable election to participate for a Plan Year shall remain
an Eligible Executive for the remainder of that Plan Year regardless of whether such Executive is subsequently classified in a salary band below
E1. An individual who becomes an Eligible Executive during a Plan Year may make a deferral election for that Plan Year only if such individual
satisfies the requirements for newly-eligible status under Section 409A. Any such election shall be subject to the election restrictions set forth
in Article IV.
(2) Notwithstanding Paragraph (1) above, from time to time the Plan Administrator may modify, limit or expand the class of Executives
eligible to defer hereunder, pursuant to criteria for eligibility that need not be uniform among all or any group of Executives; provided that the
Plan Administrator may remove an Executive from eligibility to participate effective only as of the end of a Plan Year.
(b) During the period an individual satisfies all of the eligibility requirements of this section, he or she shall be referred to as an Eligible
Executive.
(c) Each Eligible Executive becomes an active Participant on the date an amount is first withheld from his or her compensation pursuant
to an Election Form submitted by the Executive to the Recordkeeper (or, if authorized, the Plan Administrator) under Section 4.1.
3.2 Termination of Eligibility to Defer. An individual’s eligibility to participate actively by making deferrals (or a deferral election) under
Article IV shall cease upon the “Election Termination Date” (as defined below) occurring after the earliest of:
(a) Subject to Section 4.1(b), the date he or she Separates from Service; or
(b) The date the Executive ceases to be eligible under criteria described in Section 3.1(a)(2) above.
3.3 Termination of Participation. An individual, who has been an active Participant under the Plan, ceases to be a Participant on the date
his or her Account is fully paid out.
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ARTICLE IV – DEFERRAL OF COMPENSATION

4.1 Deferral Election.
(a) Deferrals of Base Compensation. Each Eligible Executive may make an election to defer under the Plan any whole percentage (up to
80%) of his or her Base Compensation in the manner described in Section 4.2. A newly Eligible Executive may only defer the portion of his or
her eligible Base Compensation that is earned for services performed after the date of his or her election. Subject to the foregoing sentence,
any Base Compensation deferred by an Eligible Executive for a Plan Year shall will be deducted each pay period during the Plan Year for which
he or she has Base Compensation and is an Eligible Executive. Base Compensation paid after the end of a Plan Year for services performed
during the final payroll period of the preceding Plan Year shall be treated as Base Compensation for services in the subsequent Plan Year.
(b) Deferrals of Bonus Compensation.
(1) General Rules. Each Eligible Executive may make an election to defer under the Plan any whole percentage (up to 100%) of his or
her Bonus Compensation in the manner described in Section 4.2. An Eligible Executive that is hired, transferred or promoted into a position
eligible for the Plan during a Plan Year may not defer any portion of his or her Bonus Compensation earned for the Performance Period relating
to the Plan Year in which he or she is hired, transferred or promoted; provided that a promoted Executive may elect to defer Bonus
Compensation if such Executive was eligible for such compensation as of the first day of the Plan Year. The percentage of Bonus
Compensation deferred by an Eligible Executive for a Plan Year will be deducted from his or her payment under the applicable compensation
program at the time it would otherwise be paid, provided he or she satisfies all conditions for payment that would apply in the absence of a
deferral.
(2) Performance Criteria. Notwithstanding subsection (b)(1) above, an Eligible Executive shall not be eligible to defer Bonus
Compensation for a Plan Year unless the Bonus Compensation is contingent on the satisfaction of organizational or individual performance
criteria for the Performance Period that relates to the Plan Year, such criteria have been established in writing by not later than 90 days after the
beginning of the applicable Performance Period, and the Bonus Compensation satisfies the requirements for performance-based compensation
under 409A.
(c) Election Form Rules. To be effective in deferring Base or Bonus Compensation, an Eligible Executive’s Election Form must set forth
the percentage of Base/Bonus Compensation (whichever applies) to be deferred, and any other information that may be required by the Plan
Administrator from time to time. In addition, the Election Form must meet the requirements of Section 4.2. To avoid the application of certain
default choices, the Eligible Executive may also specify the deferral period under Section 4.3, and the form of payment under Section 4.4. It is
contemplated that an Eligible Executive will specify the
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investment choice under Section 5.2 (in multiples of 5%) for the Eligible Executive’s deferral. However, this is not a condition for making an
effective election.
4.2 Time and Manner of Deferral Election.
(a) Deferrals of Base Compensation. Ordinarily, an Eligible Executive must make a deferral election for a Plan Year with respect to Base
Compensation no later than October 31 of the year prior to the Plan Year in which the Base Compensation would otherwise be paid. However,
an individual who newly becomes an Eligible Executive will have 30 days from the date the individual becomes an Eligible Executive to make a
deferral election with respect to Base Compensation that is earned for services performed after the election is received (the “30-Day Election
Period”). The 30-Day Election Period may be used to make an election for Base Compensation that otherwise would be paid in the Plan Year in
which the individual becomes an Eligible Executive. In addition, the 30-Day Election Period may be used to make an election for Base
Compensation that would otherwise be paid in the next Plan Year (i.e., the Plan Year following when the individual becomes an Eligible
Executive), if the individual becomes an Eligible Executive after October 1 and not later than December 31 of a Plan Year. Thus, if a Base
Compensation deferral election for a Plan Year is made after October 31 of the prior Plan Year in reliance on the 30-day rule, then the Plan
Administrator shall apply the restriction that the election may only apply to Base Compensation earned for services performed after the date
the election is received.
(b) Deferrals of Bonus Compensation. An Eligible Executive must make a deferral election with respect to his or her Bonus Compensation
at least six months prior to the end of the Performance Period for which the applicable Bonus Compensation is paid, and this election will be
the Eligible Executive’s bonus deferral election for the Plan Year to which the Performance Period relates.
(c) General Provisions. A separate deferral election under (a) or (b) above must be made by an Eligible Executive for each category of a
Plan Year’s compensation that is eligible for deferral. If a properly completed and executed Election Form is not actually received by the
Recordkeeper (or, if authorized, the Plan Administrator) by the prescribed time in (a) and (b) above, the Eligible Executive will be deemed to
have elected not to defer any Base Compensation or Bonus Compensation, as the case may be, for the applicable Plan Year. Except as
provided in the next sentence, an election is irrevocable once received and determined by the Plan Administrator to be properly completed
(and in all cases shall be irrevocable not later than the latest date permitted under Section 409A for the applicable kind of initial election).
Increases or decreases in the percentage a Participant elects to defer shall not be permitted during a Plan Year; provided that if a Participant
receives a hardship distribution under a cash or deferred profit sharing plan that is sponsored by a member of the PBG Organization and such
plan requires that deferrals be suspended for a period of time following the hardship distribution, the Plan Administrator shall cancel the
Participant’s deferral election so that no deferrals shall be made during such suspension period. If an election is cancelled because of a
hardship distribution, any later deferral elections shall be subject to the provisions governing initial deferral elections. Notwithstanding the
preceding three sentences, to the extent necessary
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because of circumstances beyond the control of the Executive, the Plan Administrator may grant an extension of any election period and may
permit (to the extent deemed necessary for orderly Plan administration or to avoid undue hardship to an Eligible Executive) the modification of
an election. Any such extension or modification shall be available only if (1) it does not extend the time for making an election beyond the
latest time permitted under Section 409A, (2) the Plan Administrator determines that it otherwise meets the minimum requirements of
Section 409A and is desirable for Plan administration, and (3) only upon such conditions as may be required by the Plan Administrator.
4.3 Period of Deferral. An Eligible Executive making a deferral election shall specify a deferral period on his or her Election Form by
designating either a Specific Payment Date or the date he or she incurs a Separation from Service. Notwithstanding an Eligible Executive’s
actual election of a Specific Payment Date, an Eligible Executive shall be deemed to have elected a period of deferral of not less than:
(a) For Base Compensation, at least one year after the end of the Plan Year during which the Base Compensation would have been paid
absent the deferral; and
(b) For Bonus Compensation, at least two years after the date the Bonus Compensation would have been paid absent the deferral.
In the case of a deferral to a Specific Payment Date, if an Eligible Executive’s Election Form either fails to specify a period of deferral or
specifies a period less than the applicable minimum, the Eligible Executive shall be deemed to have selected a Specific Payment Date equal to
the minimum period of deferral as provided in subsections (a) and (b) above.
4.4 Form of Deferral Payment. An Eligible Executive making a deferral election shall specify a form of payment on his or her Election Form
by designating either a lump sum payment or installment payments to be paid over a period of no more than 20 years. Any election for
installment payments shall also specify (a) the frequency for which installment payments shall be paid, which shall be quarterly, semi-annually
and annually and (b) the fixed number of years over which installments are to be paid. If an Eligible Executive fails to make a form of payment
election for a deferral as provided above, he or she shall be deemed to have elected a lump sum payment.
4.5 Second Look Election.
(a) General. Subject to subsection (b) below, a Participant who has made a valid initial deferral in accordance with the foregoing
provisions of this Article that provides for payment on a Specified Payment Date may subsequently make another one-time election regarding
the time and/or form of payment of his or her deferral. This opportunity to modify the Participant’s initial election is referred to as a “Second
Look Election.”
(b) Requirements for Second Look Elections. A Second Look Election must comply with all of the following requirements:
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(1) If a Participant’s initial election specified payment based on a Specific Payment Date, the Participant may only make a Second Look
Election if the election is made at least twelve months before the Participant’s original Specific Payment Date. In addition, in this case the
Participant’s Second Look Election must delay the payment of the Participant’s deferral to a new Specific Payment Date that is at least 5 years
after the original Specific Payment Date.
(2) A Second Look Election will not be effective until twelve months after it is made.
(3) A Separation from Service may not be specified as the payout date resulting from a Second Look Election.
(4) A Participant may make only one Second Look Election for each individual deferral, and all Second Look Elections must comply
with all of the requirements of this Section 4.5.
(5) A Participant who changes the form of his or her payment election from lump sum to installments will be subject to the provisions
of the Plan regarding installment payment elections in Section 4.4, and such installment payments must begin no earlier than 5 years after when
the lump sum payment would have been paid based upon the Participant’s initial election.
(6) If a Participant’s initial election specified payment in the form of installments and the Participant wants to elect installment
payments over a greater number of years, the election will be subject to the provisions of the Plan regarding installment payment elections in
Section 4.4, and the first payment date of the new installment payment schedule must be no earlier than 5 years after the first payment date that
applied under the Participant’s initial installment election.
(7) If a Participant’s initial election specified payment in the form of installments and the Participant wants to elect instead payment in
a lump sum, the earliest payment date of the lump sum must be no earlier than five years after the first payment date that applied under the
Participant’s initial installment election.
(8) For purposes of this section, all of a Participant’s installment payments related to a specific deferral election shall be treated as a
single payment.
A Second Look Election will be void and payment will be made based on the Participant’s original election under Sections 4.3 and 4.4 if all
of the provisions of the foregoing Paragraphs of this subsection are not satisfied in full. However, if a Participant’s Second Look Election
becomes effective in accordance with the provisions of this subsection, the Participant’s original election shall be superseded (including the
Specific Payment Date specified therein), and
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this original election shall not be taken into account with respect to the deferral that is subject to the Second Look Election.
(c) Plan Administrator’s Role. Each Participant has the sole responsibility to elect a Second Look Election by contacting the
Recordkeeper (or, if authorized, the Plan Administrator) and to comply with the requirements of this section. The Plan Administrator or the
Recordkeeper may provide a notice of a Second Look Election opportunity to some or all Participants, but the Recordkeeper and Plan
Administrator is under no obligation to provide such notice (or to provide it to all Participants, in the event a notice is provided only to some
Participants). The Recordkeeper and the Plan Administrator have no discretion to waive or otherwise modify any requirement for a Second
Look Election set forth in this section or in Section 409A.
4.6 Mandatory Deferrals.
(a) In General. As provided in this section, Base Compensation may be deferred under the Plan on a non-elective basis. In the case of an
Eligible Executive whose Base Compensation for a Plan Year is determined by the Compensation Committee, the Compensation Committee may
require a portion of the Eligible Executive’s Base Compensation for the Plan Year to be deferred under the Plan. Such portion of the Eligible
Executive’s Base Compensation that the Compensation Committee requires to be deferred under this Section 4.6 on a non-elective basis shall
be referred to as a “Mandatory Deferral.”
(b) Time for Committee’s Determination. If, prior to the decision by the Compensation Committee with respect a Mandatory Deferral, the
Eligible Executive has not earned a binding right to the portion of his Base Compensation that is to be deferred mandatorily, the Compensation
Committee may require the deferral of such Base Compensation not later than when the Eligible Executive earns a binding right to the Base
Compensation. However, if the Eligible Executive has already earned a binding right to some or all of the Base Compensation to be deferred
mandatorily, then to be effective hereunder any determination by the Compensation Committee to require deferral of such portion of the
Eligible Executive’s Base Compensation must be made no later than December 31st of the year prior to the Plan Year in which such portion of
Base Compensation would otherwise be paid and as of December 31st of such prior year the determination shall be irrevocable. Any
Mandatory Deferral for a Plan Year shall be credited to a separate Deferral Subaccount for such Plan Year.
(c) Time and Form of Payment. At the time that the Compensation Committee provides for the Mandatory Deferral of an Eligible
Executive’s Base Compensation, the Compensation Committee shall (1) designate a Specific Payment Date for such Mandatory Deferral within
the parameters of Section 4.3, and (2) designate a form of payment for such Mandatory Deferral (e.g., lump sum or installments) within the
parameters of Section 4.4(a). The Compensation Committee may retain the right to change the time and form of payment of any Mandatory
Deferral, but any such change must meet the requirements of Section 4.5 (applied as if the decision by the Compensation Committee were a
decision by the Eligible Executive).
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The Eligible Executive shall be entitled to elect to change the time and form of payment under Section 4.5 only to the extent expressly permitted
by the Compensation Committee.
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ARTICLE V – INTERESTS OF PARTICIPANTS

5.1 Accounting for Participants’ Interests.
(a) Deferral Subaccounts. Each Participant shall have at least one separate Deferral Subaccount for each separate deferral of Base
Compensation or Bonus Compensation made by the Participant under this Plan. A Participant’s deferral shall be credited to his or her Account
as soon as practicable following the date the compensation would be paid in the absence of a deferral. A Participant’s Account is a
bookkeeping device to track the value of the Participant’s deferrals (and his or her Employer’s liability therefor). No assets shall be reserved or
segregated in connection with any Account, and no Account shall be insured or otherwise secured.
(b) Account Earnings or Losses. As of each Valuation Date, a Participant’s Account shall be credited with earnings and gains (and shall
be debited for expenses and losses) determined as if the amounts credited to his or her Account had actually been invested as directed by the
Participant in accordance with this Article. The Plan provides only for “phantom investments,” and therefore such earnings, gains, expenses
and losses are hypothetical and not actual. However, they shall be applied to measure the value of a Participant’s Account and the amount of
his or her Employer’s liability to make deferred payments to or on behalf of the Participant.
5.2 Investment Options.
(a) General. Each of a Participant’s Deferral Subaccounts shall be invested on a phantom basis in any combination of phantom
investment options specified by the Participant (or following the Participant’s death, by his or her Beneficiary) from those offered by the Plan
Administrator for this purpose from time to time. The Plan Administrator may discontinue any phantom investment option with respect to
some or all Accounts, and it may provide rules for transferring a Participant’s phantom investment from the discontinued option to a specified
replacement option (unless the Participant selects another replacement option in accordance with such requirements as the Plan Administrator
may apply).
(b) Phantom Investment Options. The basic phantom investment options offered under the Plan are as follows:
(1) Phantom PBG Stock Fund. Participant Accounts invested in this phantom option are adjusted to reflect an investment in the PBG
Stock Fund, which is offered under the PBG 401(k) Savings Program. An amount deferred or transferred into this option is converted to
phantom units in the PBG Stock Fund by dividing such amount by the NAV of the fund on the Valuation Date as of which the amount is
treated as invested in this option by the Plan Administrator. A Participant’s interest in the Phantom PBG Stock Fund is valued as of a
Valuation Date (or a Distribution Valuation Date) by multiplying the number of phantom units credited to the Participant’s Account on such
date by the NAV of a unit in the PBG Stock Fund on such date. If shares of PBG Common Stock change by reason of any stock split, stock
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dividend, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other any other corporate change treated as
subject to this provision by the Plan Administrator, such equitable adjustment shall be made in the number and kind of phantom units credited
to an Account or Subaccount as the Plan Administrator may determine to be necessary or appropriate. In no event will shares of PBG Common
Stock actually be purchased or held under this Plan, and no Participant shall have any rights as a shareholder of PBG Common Stock on
account of an interest in this phantom option.
(2) Phantom PBG 401(k) Funds. From time to time, the Plan Administrator shall designate which (if any) of the investment options
under the PBG 401(k) Savings Program shall be available as phantom investment options under this Plan. Participant Accounts invested in
these phantom options are adjusted to reflect an investment in the corresponding investment options under the PBG 401(k) Savings Program.
An amount deferred or transferred into one of these options is converted to phantom units in the applicable PBG 401(k) Savings Program fund
of equivalent value by dividing such amount by the NAV of a unit in such fund on the date as of which the amount is treated as invested in
the option by the Plan Administrator. Thereafter, a Participant’s interest in each such phantom option is valued as of a Valuation Date (or a
Distribution Valuation Date) by multiplying the number of phantom units credited to his or her Account on such date by the NAV of a unit in
the applicable PBG 401(k) Savings Program fund on such date.
(3) Other Funds. From time to time, the Plan Administrator shall designate which (if any) other investment options shall be available as
phantom investment options under this Plan. These may be in addition to those provided for above. They may also be in lieu of some or all of
them. Any of these phantom investment options shall be administered under procedures implemented from time to time by the Plan
Administrator.
5.3 Method of Allocation.
(a) Deferral Elections. With respect to any deferral election by a Participant, the Participant must use his or her Election Form to allocate
the deferral in 5% increments among the phantom investment options then offered by the Plan Administrator. If an Election Form related to an
original deferral election specifies phantom investment options for less than 100% of the Participant’s deferral, the Recordkeeper shall allocate
the Participant’s deferrals to the Phantom Security Plus Fund to the extent necessary to provide for investment of 100% of the Participant’s
deferral. If an Election Form related to an original deferral election specifies phantom investment options for more than 100% of the
Participant’s deferral, the Recordkeeper shall prorate all of the Participant’s investment allocations to the extent necessary to reduce (after
rounding to 5% increments) the Participant’s aggregate investment percentages to 100%.
(b) Fund Transfers. A Participant may reallocate previously deferred amounts in a Deferral Subaccount by properly completing and
submitting a fund transfer form provided by the Plan Administrator or Recordkeeper or by following such other non-paper procedures, such as
electronically, that the Plan Administrator may designate, and specifying, in 5% increments, the reallocation of his or her Deferral Subaccounts
among the phantom investment
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options then offered by the Plan Administrator for this purpose. If a fund transfer form or other designated method provides for investing less
than or more than 100% of the Participant’s Account, it will be void and disregarded. Any fund transfer form that is not void under the
preceding sentence shall be effective as of the Valuation Date next occurring after its receipt by the Recordkeeper, but the Plan Administrator
or the Recordkeeper may also specify a minimum number of days in advance of which such transfer form must be received in order for the form
to become effective as of such next Valuation Date. If more than one transfer form is received on a timely basis for a Deferral Subaccount, the
transfer form that the Plan Administrator or Recordkeeper determines to be the most recent shall be followed.
(c) Phantom PBG Stock Fund Restrictions. Notwithstanding the preceding provisions of this section, to the extent necessary to ensure
compliance with Rule 16b-3(f) of the Act, the Company may arrange for tracking of any such transaction defined in Rule 16b-3(b)(1) of the Act
involving the Phantom PBG Stock Fund and the Company may bar or alter the effective date of any such transaction to the extent it would not
be exempt under Rule 16b-3(f). The Company may impose blackout periods pursuant to the requirements of the Sarbanes-Oxley Act of 2002
whenever the Company determines that circumstances warrant. Further, the Company may impose quarterly blackout periods on insider
trading in the Phantom PBG Stock Fund as needed (as determined by the Company), timed to coincide with the release of the Company’s
quarterly earnings reports. The commencement and termination of these blackout periods in each quarter, the parties to which they apply and
the activities they restrict shall be as set forth in the official insider trading policy promulgated by the Company from time to time. These
provisions shall apply notwithstanding any provision of the Plan to the contrary except Section 7.6 (relating to compliance with Section 409A).
5.4 Vesting of a Participant’s Account. A participant’s interest in the value of his or her Account shall at all times be 100% vested, which
means that it will not forfeit as a result of his or her Separation from Service.
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ARTICLE VI – DISTRIBUTIONS
6.1 General Rules. A Participant’s Deferral Subaccount(s) that are governed by the terms of this 2009 Restatement shall be distributed as
provided in this Article, subject in all cases to Sections 5.3(c), 6.10 and 7.3(j) (relating to compliance with securities laws with respect to the
Phantom PBG Stock Fund). All Deferral Subaccount balances (including those hypothetically invested in the Phantom PBG Stock Fund) shall
be distributed in cash. In no event shall any portion of a Participant’s Account be distributed earlier or later than is allowed under
Section 409A. Subsequent reemployment of the Participant shall not affect the payment of the Participant’s Deferral Account for which a
payment event previously occurred.
The following general rules shall apply for purposes of interpreting the provisions of this Article VI.
(a) Section 6.2 (Distributions Based on a Specific Payment Date) applies when a Participant has elected to defer until a Specific Payment
Date (including pursuant to a Second Look Election) and the Specific Payment Date is reached before the Participant’s (i) Separation from
Service (other than for Retirement); or (ii) death. However, if such a Participant Separates from Service (other than for Retirement or death)
prior to the Specific Payment Date (or prior to an installment payment pursuant to a Specific Payment Date or Second Look Election),
Section 6.3 shall apply to the extent it would result in an earlier distribution. If such a Participant dies prior to the Specific Payment Date (or
prior to an installment payment pursuant to a Specific Payment Date), Section 6.4 shall apply to the extent it would result in an earlier
distribution of all or part of a Participant’s Account.
(b) Section 6.3 (Distributions on Account of a Separation from Service) applies (i) when a Participant has elected to defer until a
Separation from Service and then the Participant Separates from Service (other than for Retirement or death); or (ii) when applicable under
subsection (a) above.
(c) Section 6.4 (Distributions on Account of Death) applies when the Participant dies. If a Participant is entitled to receive or is receiving
a distribution under Section 6.2, 6.3 or 6.5 (see below) at the time of his death, Section 6.4 shall take precedence over those sections to the
extent Section 6.4 would result in an earlier distribution of all or part of a Participant’s Account.
(d) Section 6.5 (Distributions on Account of Retirement) applies when a Participant has elected to defer until a Separation from Service
and then the Participant Separates from Service on account of his or her Retirement. Subsection (c) of this section provides for when
Section 6.4 takes precedence over Section 6.5.
(e) Section 6.6 (Distributions on Account of Unforeseeable Emergency) applies when the Participant incurs an Unforeseeable Emergency
prior to when a Participant’s Account is distributed under Sections 6.2 through 6.5. In this case, the provisions of Section 6.6
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shall take precedence over Sections 6.2 through 6.5 to the extent Section 6.6 would result in an earlier distribution of all or part of the
Participant’s Account.
(f) Section 6.7 (Distributions of Mandatory Deferrals) shall apply to all distributions of Mandatory Deferrals, and the provisions of
Section 6.7 shall take precedence over Sections 6.2 through 6.6 with respect to distributions of all Mandatory Deferrals.
6.2 Distributions Based on a Specific Payment Date. This Section shall apply to distributions that are to be made upon the occurrence of a
Specific Payment Date (including distributions pursuant to a Second Look Election). In the event a Participant’s Specific Payment Date for a
Deferral Subaccount is reached before an amount becomes payable to the Participant on account of (i) the Participant’s Separation from
Service (other than for Retirement), or (ii) the Participant’s death, such Deferral Subaccount shall be distributed based on the occurrence of
such Specific Payment Date in accordance with the following terms and conditions:
(a) If a Participant’s Deferral Subaccount is to be paid in the form of a lump sum pursuant to Section 4.4 or 4.5, whichever is applicable,
the Deferral Subaccount shall be valued as of the last Distribution Valuation Date preceding the Participant’s Specific Payment Date, and the
resulting amount shall be payable in a single lump sum on the Specific Payment Date.
(b) If a Participant’s Deferral Subaccount is to be paid in the form of installments pursuant to Section 4.4 or 4.5, whichever is applicable,
the Participant’s first installment payment shall be payable on the Specific Payment Date. Thereafter, installment payments shall continue in
accordance with the schedule elected by the Participant, except as provided in Sections 6.3, 6.4 and 6.6 (relating to distributions upon
Separation from Service (other than Retirement or death), death or Unforeseeable Emergency). The amount of each installment shall be
determined under Section 6.8 based on the Distribution Valuation Date immediately preceding the date such installment is payable.
Notwithstanding the preceding provisions of this subsection, if the Participant Separates from Service (other than for Retirement) or dies, the
Participant’s Deferral Subaccounts that would otherwise be distributed based on such Specific Payment Date shall instead be distributed in
accordance with Section 6.3 or 6.4 (relating to distributions on account of Separation from Service or death), whichever applies, but only to the
extent it would result in an earlier distribution of the Participant’s Subaccount.
6.3 Distributions on Account of a Separation from Service. A Participant’s total Account shall be distributed upon the occurrence of a
Participant’s Separation from Service (other than for Retirement or death) in accordance with the terms and conditions of this section. When
used in this section, the phrase “Separation from Service” shall only refer to a Separation from Service that is not for Retirement or death.
(a) Subject to subsection (c), for those Deferral Subaccounts that have a Specific Payment Date (including a Specific Payment Date
resulting from a Second Look Election) that is after the Participant’s Separation from Service, such Deferral Subaccounts shall be payable in a
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single lump sum payment on the first day of the month following the end of the calendar quarter following the quarter in which the
Participant’s Separation from Service occurs to the extent such payment would result in an earlier distribution to the Participant.
(b) Subject to subsection (c), if the Participant’s Separation from Service is on or after the Specific Payment Date (including a Specific
Payment Date resulting from a Second Look Election) applicable to a Participant’s Deferral Subaccount and the Participant has selected
installment payments as the form of distribution for the Deferral Subaccount, then the remainder of such Deferral Subaccount shall be payable
in a single lump sum payment on the first day of the month following the end of the calendar quarter following the quarter in which the
Participant’s Separation from Service occurs to the extent such payment would result in an earlier distribution to the Participant).
(c) If the Participant is classified as a Specified Employee at the time of the Participant’s Separation from Service (or at such other time for
determining Specified Employee status as may apply under Section 409A), then such Participant’s Account shall be payable, to the extent
such payment is due as a result of the Participant’s Separation from Service, on the first day of the month following the end of the second
calendar quarter following the quarter in which the Participant’s Separation from Service occurs, valued as of the immediately preceding
Distribution Valuation Date.
Amounts payable in accordance with this Section 6.3 shall be determined based on the Distribution Valuation Date immediately
preceding the date such amount is payable.
6.4 Distributions on Account of Death.
(a) Upon a Participant’s death, the value of the Participant’s Account under the Plan shall be payable in a single lump sum payment on
the first day of the month following the end of the calendar quarter following the quarter in which the Participant’s death occurs, valued as of
the last Distribution Valuation Date preceding the date such amount becomes payable. If the Participant is receiving installment payments at
the time of the Participant’s death, or a Specific Payment Date distribution (including a Specific Payment Date resulting from a Second Look
Election) is payable prior to the date an amount is payable under this Section 6.4, such payment or installment payment shall be made in
accordance with the terms of the applicable deferral election that governs such payment until the time that the lump sum payment is due to be
paid under the preceding sentence of this subsection. Immediately prior to the time that such lump sum payment is scheduled to be paid, all
installment payments shall cease and the remaining balance of the Participant’s Account shall be distributed at such scheduled payment time
in a single lump sum. Amounts paid following a Participant’s death, whether a lump sum or installments, shall be paid to the Participant’s
Beneficiary.
(b) Each Participant may designate a Beneficiary or Beneficiaries (contingently, consecutively, or successively) of a death benefit and,
from time to time, may change his or her designated Beneficiary. A Beneficiary may be a trust. A beneficiary designation shall be made in
writing in a form prescribed by the Plan Administrator and delivered to the Plan Administrator
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while the Participant is alive. If there is no designated Beneficiary surviving at the death of a Participant, payment of any death benefit of the
Participant shall be made to the estate of the Participant.
(c) Any claim to be paid any amounts standing to the credit of a Participant in connection with the Participant’s death must be received
by the Recordkeeper or the Plan Administrator at least 14 days before any such amount is paid out by the Recordkeeper. Any claim received
thereafter is untimely, and it shall be unenforceable against the Plan, the Company, the Plan Administrator, the Recordkeeper or any other
party acting for one or more of them.
6.5 Distributions on Account of Retirement. If a Participant incurs a Separation from Service on account of his or her Retirement, the
Participant’s Account shall be distributed in accordance with the terms and conditions of this section.
(a) If the Participant’s Retirement is prior to the Specific Payment Date that is applicable to a Deferral Subaccount, the Participant’s
deferral election pursuant to Sections 4.3, 4.4 or 4.5 (i.e., time and form of payment) shall continue to be given effect, and the Deferral
Subaccount shall be distributed based upon the provisions of subsections (a) and (b) under Section 6.2, whichever applies (relating to
distribution based on a Specific Payment Date).
(b) If the Participant has selected payment of his or her deferral on account of Separation from Service, distribution of the related Deferral
Subaccount shall commence on the first day of the month following the end of the calendar quarter following the quarter in which the
Participant’s Retirement occurs. Such distribution shall be made in either a single lump sum payment (valued as of the immediately preceding
Distribution Valuation Date) or in installment payments depending upon the Participant’s deferral election under Sections 4.4 or 4.5. If the
Participant is entitled to installment payments, such payments shall be made in accordance with the Participant’s installment election (but
subject to acceleration under Sections 6.4 and 6.6 relating to distributions on account of death and Unforeseeable Emergency) and with the
installment payment amounts determined under Section 6.8. However, if the Participant is classified as a Specified Employee at the time of the
Participant’s Retirement (or at such other time for determining Specified Employee status as may apply under Section 409A), then such
Participant’s Account shall not be payable, as a result of the Participant’s Retirement, until the first day of the first calendar quarter that is at
least six months after the Participant’s Retirement.
(c) If the Participant is receiving installment payments in accordance with Section 6.2 (relating to distributions on account of a Specific
Payment Date) for one or more Deferral Subaccounts at the time of his or her Retirement, such installment payments shall continue to be paid
based upon the Participant’s deferral election (but subject to acceleration under Sections 6.4 and 6.6 relating to distributions on account of
death and Unforeseeable Emergency).
6.6 Distributions on Account of Unforeseeable Emergency. Prior to the time that an amount would become distributable under Sections 6.2
through 6.5, a Participant may file a
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written request with the Recordkeeper for accelerated payment of all or a portion of the amount credited to the Participant’s Account based
upon an Unforeseeable Emergency. After an individual has filed a written request pursuant to this section, along with all supporting material
that may be required by the Recordkeeper from time to time, the Recordkeeper shall determine within 60 days (or such other number of days
that is necessary if special circumstances warrant additional time) whether the individual meets the criteria for an Unforeseeable Emergency. If
the Recordkeeper determines that an Unforeseeable Emergency has occurred, the Participant shall receive a distribution from his or her
Account as soon as administratively practicable thereafter. However, such distribution shall not exceed the dollar amount necessary to satisfy
the Unforeseeable Emergency (plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution) after taking into
account the extent to which the Unforeseeable Emergency is or may be relieved through reimbursement or compensation by insurance or
otherwise or by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial
hardship).
6.7 Distributions of Mandatory Deferrals. This Section 6.7 shall govern the distribution of all Mandatory Deferrals under the Plan. Unless
the Compensation Committee determines otherwise at the time of the Mandatory Deferral or afterwards (subject to the provisions of
Section 4.5), a Participant’s Deferral Subaccount(s) for a Mandatory Deferral shall be distributed upon the earliest of the following to occur:
(a) The Specific Payment Date for the Deferral Subaccount pursuant to the distribution rules of Section 6.2;
(b) The Participant’s Separation from Service (other than account of a death) pursuant to the distribution rules of Section 6.3;
(c) The Participant’s death pursuant to the distribution rules of Section 6.4;
(d) The occurrence of an Unforeseeable Emergency with respect to the Participant pursuant to the distribution rules of Section 6.6.
6.8 Valuation. In determining the amount of any individual distribution pursuant to this Article, the Participant’s Deferral Subaccount shall
continue to be credited with earnings and gains (and debited for expenses and losses) as specified in Article V until the Distribution Valuation
Date that is used in determining the amount of the distribution under this Article. If a particular Section in this Article does not specify a
Distribution Valuation Date to be used in calculating the distribution, the Participant’s Deferral Subaccount shall continue to be credited with
earnings and gains (and debited for expenses and losses) as specified in Article V until the Distribution Valuation Date that immediately
precedes such distribution. In determining the value of a Participant’s remaining Deferral Subaccount following an installment distribution
from the Deferral Subaccount (or a partial distribution under Section 6.6 relating to an Unforeseeable Emergency), such distribution shall
reduce the value of the Participant’s Deferral Subaccount as of the close of the Distribution Valuation Date immediately preceding the payment
date for such installment (or partial distribution). The amount to be distributed in
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connection with any installment payment shall be determined by dividing the value of a Participant’s Deferral Subaccount as of such
immediately preceding Distribution Valuation Date (determined before reduction of the Deferral Subaccount as of such Distribution Valuation
Date in accordance with the preceding sentence) by the remaining number of installments to be paid with respect to the Deferral Subaccount.
6.9 Section 162(m) — Automatic Deferral. Notwithstanding any other provision of this Plan to the contrary, and subject to the
requirements of Treas. Reg. §1.409A-2(b)(7)(i), no amount shall be paid to any Participant before the earliest date on which the Employer’s
federal income tax deduction for such payment is not precluded by Section 162(m) of the Code. In the event any payment is delayed solely as a
result of the preceding restriction, such payment shall be made as soon as administratively feasible following the first date as of which the
Employer reasonably anticipates that Section 162(m) of the Code no longer precludes the deduction by the Employer.
6.10 Impact of Section 16 of the Act on Distributions. The provisions of Section 5.3(c) and this Section 6.10 shall apply in determining
whether a Participant’s distribution shall be delayed beyond the date applicable under the preceding provisions of this Article VI.
(a) In General. This Plan is intended to be a formula plan for purposes of Section 16 of the Act. Accordingly, in the case of a deferral or
other action under the Plan that constitutes a transaction that could be covered by Rule 16b-3(d) or (e) of the Act, if it were approved by the
Company’s Board of Directors or the Compensation Committee (“Board Approval”), it is intended that the Plan shall be administered by
delegates of the Compensation Committee, in the case of a Participant who is subject to Section 16 of the Act, in a manner that will permit the
Board Approval of the Plan to avoid any additional Board Approval of specific transactions to the maximum possible extent.
(b) Approval of Distributions: This Subsection shall govern the distribution of a deferral that (i) is wholly or partly invested in the
Phantom PBG Stock Fund at the time the deferral would be valued to determine the amount of cash to be distributed to a Participant, (ii) either
was the subject of a Second Look Election or was not covered by an agreement, made at the time of the Participant’s original deferral election,
that any investments in the Phantom PBG Stock Fund would, once made, remain in that fund until distribution of the deferral, (iii) is made to a
Participant who is subject to Section 16 of the Act at the time the interest in the Phantom PBG Stock Fund would be liquidated in connection
with the distribution, and (iv) if paid at the time the distribution would be made without regard to this subsection, could result in a violation of
Section 16 of the Act because there is an opposite way transaction that would be matched with the liquidation of the Participant’s interest in
the Phantom PBG Stock Fund (either as a “discretionary transaction,” within the meaning of Rule 16b-3(b)(1), or as a regular transaction, as
applicable) (a “Covered Distribution”). In the case of a Covered Distribution, if the liquidation of the Participant’s interest in the Phantom PBG
Stock Fund in connection with the distribution has not received Board Approval by the time the distribution would be made if it were not a
Covered Distribution, or if it is a discretionary transaction, then the actual distribution to the Participant shall be delayed only until the
earlier of:
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(1) In the case of a transaction that is not a discretionary transaction, Board Approval of the liquidation of the Participant’s interest in
the Phantom PBG Stock Fund in connection with the distribution, and
(2) The date the distribution would no longer violate Section 16 of the Act, e.g., when the Participant is no longer subject to Section 16
of the Act, when the Deferral Subaccount related to the distribution is no longer invested in the Phantom PBG Stock Fund, or when the time
between the liquidation and an opposite way transaction is sufficient.
6.11 Actual Date of Payment. An amount payable on a date specified in this Article VI shall be paid as soon as administratively feasible
after such date; but no later than the later of (a) the end of the calendar year in which the specified date occurs; or (b) the 15 th day of the third
calendar month following such specified date and the Participant (or Beneficiary) is not permitted to designate the taxable year of the payment.
The payment date may be postponed further if calculation of the amount of the payment is not administratively practicable due to events
beyond the control of the Participant (or Beneficiary), and the payment is made in the first calendar year in which the calculation of the amount
of the payment is administratively practicable.
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ARTICLE VII – PLAN ADMINISTRATION

7.1 Plan Administrator. The Plan Administrator is responsible for the administration of the Plan. The Plan Administrator has the authority
to name one or more delegates to carry out certain responsibilities hereunder, as specified in the definition of Plan Administrator. Any such
delegation shall state the scope of responsibilities being delegated.
7.2 Action. Action by the Plan Administrator may be taken in accordance with procedures that the Plan Administrator adopts from time to
time or that the Company’s Law Department determines are legally permissible.
7.3 Powers of the Plan Administrator. The Plan Administrator shall administer and manage the Plan and shall have (and shall be permitted
to delegate) all powers necessary to accomplish that purpose, including the following:
(b) To exercise its discretionary authority to make all decisions regarding eligibility, participation and deferrals, to make allocations and
determinations required by this Plan, and to maintain records regarding Participants’ Accounts;
(c) To compute and certify to the Employers the amount and kinds of payments to Participants or their Beneficiaries, and to determine the
(d) To authorize all disbursements by the Employer pursuant to this Plan;
(h) To establish or to change the phantom investment options or arrangements under Article V;
(j) Notwithstanding any other provision of this Plan except Section 7.6 (relating to compliance with Section 409A), the Plan Administrator
or the Recordkeeper may
- 24 -
take any action the Plan Administrator deems is necessary to assure compliance with any policy of the Company respecting insider trading as
may be in effect from time to time. Such actions may include altering the effective date of intra-fund transfers or the distribution date of
Deferral Subaccounts. Any such actions shall alter the normal operation of the Plan to the minimum extent necessary.
capricious.
7.4 Compensation, Indemnity and Liability. The Plan Administrator will serve without bond and without compensation for services
hereunder. All expenses of the Plan and the Plan Administrator will be paid by the Employers. To the extent deemed appropriate by the Plan
Administrator, any such expense may be charged against specific Participant Accounts, thereby reducing the obligation of the Employers. No
member of the Committee (which serves as the Plan Administrator), and no individual acting as the delegate of the Committee, shall be liable
for any act or omission of any other member or individual, nor for any act or omission on his or her own part, excepting his or her own willful
misconduct. The Employers will indemnify and hold harmless each member of the Committee and any employee of the Company (or a
Company affiliate, if recognized as an affiliate for this purpose by the Plan Administrator) acting as the delegate of the Committee against any
and all expenses and liabilities, including reasonable legal fees and expenses, arising in connection with this Plan out of his or her membership
on the Committee (or his or her serving as the delegate of the Committee), excepting only expenses and liabilities arising out of his or her own
willful misconduct or bad faith.
7.5 Withholding. The Employer shall withhold from amounts due under this Plan any amount necessary to enable the Employer to remit to
of the Code, by an applicable state’s income tax provisions, or by an applicable city, county or municipality’s earnings or income tax
provisions. The Employer shall withhold from the payroll of, or collect from, a Participant the amount necessary to remit on behalf of the
Participant any Social Security or Medicare taxes which may be required with respect to amounts accrued by a Participant hereunder, as
determined by the Company.
- 25 -
7.6 Conformance with Section 409A. At all times during each Plan Year, this Plan shall be operated (i) in accordance with the requirements
of Section 409A, and (ii) to preserve the status of deferrals under the Pre-409A Program as being exempt from Section 409A, i.e., to preserve
the grandfathered status of the Pre-409A Program. Any action that may be taken (and, to the extent possible, any action actually taken) by the
Plan Administrator, the Recordkeeper or the Company shall not be taken (or shall be void and without effect), if such action violates the
requirements of Section 409A or if such action would adversely affect the grandfather of the Pre-409A Program. If the failure to take an action
under the Plan would violate Section 409A, then to the extent it is possible thereby to avoid a violation of Section 409A, the rights and effects
under the Plan shall be altered to avoid such violation. A corresponding rule shall apply with respect to a failure to take an action that would
adversely affect the grandfather of the Pre-409A Program. Any provision in this Plan document that is determined to violate the requirements
of Section 409A or to adversely affect the grandfather of the Pre-409A Program shall be void and without effect. In addition, any provision that
is required to appear in this Plan document to satisfy the requirements of Section 409A, but that is not expressly set forth, shall be deemed to
be set forth herein, and the Plan shall be administered in all respects as if such provision were expressly set forth. A corresponding rule shall
apply with respect to a provision that is required to preserve the grandfather of the Pre-409A Program. In all cases, the provisions of this
section shall apply notwithstanding any contrary provision of the Plan that is not contained in this section.
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ARTICLE VIII – CLAIMS PROCEDURE

8.1 Claims for Benefits. If a Participant, Beneficiary or other person (hereafter, “Claimant”) does not receive timely payment of any benefits
which he or she believes are due and payable under the Plan, he or she may make a claim for benefits to the Plan Administrator. The claim for
benefits must be in writing and addressed to the Plan Administrator. If the claim for benefits is denied, the Plan Administrator will notify the
Claimant within 90 days after the Plan Administrator initially received the benefit claim. However, if special circumstances require an extension
of time for processing the claim, the Plan Administrator will furnish notice of the extension to the Claimant prior to the termination of the initial
90-day period and such extension may not exceed one additional, consecutive 90-day period. Any notice of a denial of benefits shall advise
the Claimant of the basis for the denial, any additional material or information necessary for the Claimant to perfect his or her claim, and the
steps which the Claimant must take to appeal his or her claim for benefits.
8.2 Appeals of Denied Claims. Each Claimant whose claim for benefits has been denied may file a written appeal for a review of his or her
claim by the Plan Administrator. The request for review must be filed by the Claimant within 60 days after he or she received the notice
denying his or her claim. The decision of the Plan Administrator will be communicated to the Claimant within 60 days after receipt of a request
for appeal. The notice shall set forth the basis for the Plan Administrator’s decision. However, if special circumstances require an extension of
time for processing the appeal, the Plan Administrator will furnish notice of the extension to the Claimant prior to the termination of the initial
60-day period and such extension may not exceed one additional, consecutive 60-day period.
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ARTICLE IX – AMENDMENT AND TERMINATION

9.1 Amendment of Plan. The Compensation and Management Development Committee of the Board of Directors of the Company has the
right in its sole discretion to amend this Plan in whole or in part at any time and in any manner, including the manner of making deferral
elections, the terms on which distributions are made, and the form and timing of distributions. However, except for mere clarifying amendments
necessary to avoid an inappropriate windfall, no Plan amendment shall reduce the amount credited to the Account of any Participant as of the
date such amendment is adopted. Any amendment shall be in writing and adopted by the Committee. All Participants and Beneficiaries shall be
bound by such amendment. Any amendments made to the Plan shall be subject to any restrictions on amendment that are applicable to ensure
continued compliance under Section 409A.
Notwithstanding the preceding, the Company’s Senior Vice President — Human Resources may amend the Plan without the consent of the
Compensation and Management Development Committee for the purposes of (i) conforming the Plan to the requirements of law, (ii) facilitating
the administration of the Plan, and (iii) clarifying provisions based on the Committee’s interpretation of the document; provided that such
amendment does not relate to the Plan provisions and restrictions for ensuring compliance with Rule 16b-3 of the Act.
9.2 Termination of Plan:
(a) The Company expects to continue this Plan, but does not obligate itself to do so. The Company, acting by the Compensation and
Management Development Committee of the Board of Directors, or through its entire Board of Directors, reserves the right to discontinue and
terminate the Plan at any time, in whole or in part, for any reason (including a change, or an impending change, in the tax laws of the United
States or any State). Termination of the Plan will be binding on all Participants (and a partial termination shall be binding upon all affected
Participants) and their Beneficiaries, but in no event may such termination reduce the amounts credited at that time to any Participant’s
Account. If this Plan is terminated (in whole or in part), the termination resolution shall provide for how amounts theretofore credited to
affected Participants’ Accounts will be distributed.
(b) Notwithstanding subsection (a), a termination of the Plan must comply with the provisions of Section 409A including, but not limited
to, aggregation of plans of the same type, restrictions on the timing of final distributions, and the adoption of future deferred compensation
arrangements.
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ARTICLE X – MISCELLANEOUS
10.1 Limitation on Participant’s Rights. Participation in this Plan does not give any Participant the right to be retained in the Employer’s or
Company’s employ (or any right or interest in this Plan or any assets of the Company or Employer other than as herein provided). The
Company and the Employers reserve the right to terminate the employment of any Participant without any liability for any claim against the
Company or the Employers under this Plan, except for a claim for payment of deferrals as provided herein.
10.2 Unfunded Obligation of Individual Employer. The benefits provided by this Plan are unfunded. All amounts payable under this Plan
to Participants are paid from the general assets of the Participant’s individual Employer. Nothing contained in this Plan requires the Company
or an Employer to set aside or hold in trust any amounts or assets for the purpose of paying benefits to Participants. Neither a Participant,
Beneficiary, nor any other person shall have any property interest, legal or equitable, in any specific Employer asset. This Plan creates only a
contractual obligation on the part of a Participant’s individual Employer, and the Participant has the status of a general unsecured creditor of
the Employer with respect to amounts of compensation deferred hereunder. Such a Participant shall not have any preference or priority over,
the rights of any other unsecured general creditor of the Employer. No other Employer guarantees or shares such obligation, and no other
Employer shall have any liability to the Participant or his or her Beneficiary.
10.3 Receipt or Release. Any payment to a Participant in accordance with the provisions of this Plan shall, to the extent thereof, be in full
satisfaction of all claims against the Plan Administrator, the Recordkeeper, the Employers and the Company, and the Plan Administrator may
require such Participant, as a condition precedent to such payment, to execute a receipt and release to such effect.
10.4 Governing Law. This Plan shall be construed, administered, and governed in all respects in accordance with applicable federal law and,
to the extent not preempted by federal law, in accordance with the laws of the State of New York. If any provisions of this instrument shall be
held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective.
10.5 Adoption of Plan by Related Employers. The Plan Administrator may select as an Employer any subsidiary or affiliate related to the
Company by ownership (and that is a member of the PBG Organization), and permit or cause such subsidiary or affiliate to adopt the Plan. The
selection by the Plan Administrator shall govern the effective date of the adoption of the Plan by such related Employer. The requirements for
Plan adoption are entirely within the discretion of the Plan Administrator and, in any case where the status of an entity as an Employer is at
issue, the determination of the Plan Administrator shall be absolutely conclusive.
10.6 Gender, Tense and Examples. In this Plan, whenever the context so indicates, the singular or plural number and the masculine,
feminine, or neuter gender shall be deemed to include the other. Whenever an example is provided or the text uses the term “including”
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followed by a specific item or items, or there is a passage having a similar effect, such passage of the Plan shall be construed as if the phrase
“without limitation” followed such example or term (or otherwise applied to such passage in a manner that avoids limitation on its breadth of
application).
10.7 Successors and Assigns; Nonalienation of Benefits. This Plan inures to the benefit of and is binding upon the parties hereto and their
successors, heirs and assigns; provided, however, that the amounts credited to the Account of a Participant are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary
or involuntary, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to any
benefits payable hereunder, including, without limitation, any assignment or alienation in connection with a separation, divorce, child support
or similar arrangement, will be null and void and not binding on the Plan or the Company or any Employer. Notwithstanding the foregoing, the
Plan Administrator reserves the right to make payments in accordance with a divorce decree, judgment or other court order as and when cash
payments are made in accordance with the terms of this Plan from the Deferral Subaccount of a Participant. Any such payment shall be
charged against and reduce the Participant’s Account.
10.8 Facility of Payment. Whenever, in the Plan Administrator’s opinion, a Participant or Beneficiary entitled to receive any payment
hereunder is under a legal disability or is incapacitated in any way so as to be unable to manage his or her financial affairs, the Plan
Administrator may direct the Employer to make payments to such person or to the legal representative of such person for his or her benefit, or
to apply the payment for the benefit of such person in such manner as the Plan Administrator considers advisable. Any payment in
accordance with the provisions of this section shall be a complete discharge of any liability for the making of such payment to the Participant
or Beneficiary under the Plan.
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Exhibit 10.34
(PBG LOGO)
SUPPLEMENTAL
SAVINGS PROGRAM
2009 Restatement
PBG
Supplemental Savings Program
Table of Contents
Page
ARTICLE I – HISTORY AND PURPOSE 1
1.1 History and Purpose 1

1.2 Type of Plan 1
1.3 Effect of Restatement 1
ARTICLE II – DEFINITIONS 1
2.1 Account 1
2.2 Act 1
2.3 Beneficiary 1
2.4 Code 1
2.5 Company 2
2.6 Company Retirement Contribution Subaccount 2
2.7 Compensation 2
2.8 Compensation Limit 2
2.9 Distribution Valuation Date 2
2.10 EID 2
2.11 Eligible Employee 2
2.12 Employee 2
2.13 Employer 2
2.14 ERISA 2
2.15 NAV 3
2.16 Nonqualified Holding Contribution Subaccount 3
2.17 Participant 3
2.18 PBG Organization 3
2.19 Plan 3
2.21 Recordkeeper 3
2.22 Savings Plan 3
2.23 Savings Plan Pay 3
2.24 Section 409A 3
2.25 Separation from Service 3
2.26 Specified Employee 3
2.27 Supplemental Company Retirement Contribution Subaccount 4
2.28 Valuation Date 5
-i -
Page
ARTICLE III – ELIGIBILITY AND PARTICIPATION 5
3.1 Eligibility to Participate 5

3.2 Termination of Participation 5
ARTICLE IV – CONTRIBUTIONS 5
4.1 Company Retirement Contributions 5

4.2 Supplemental Company Retirement Contributions 5
4.3 Nonqualified Holding Contributions 6
4.4 Transfers to Company Retirement Contribution and Supplemental Company Retirement Subaccount 6
4.5 Maximum Company Contributions 6
ARTICLE V – PARTICIPANT ACCOUNTS 6
5.1 Establishment of Participant Accounts 6

5.2 Credits to Accounts 6
5.3 Investment Options 7
5.4 Method of Allocation 8
5.5 Vesting of a Participant’s Account; Misconduct 9
ARTICLE VI – PAYMENT OF BENEFITS 10
6.1 Time and Form of Payment 10

6.2 Six Month Deferral 10
6.3 Distributions on Account of Death 10
6.4 Valuation 10
6.5 Automatic Deferral 10
6.6 Actual Date of Payment 11
6.7 Impact of Securities Law on Distributions 11
ARTICLE VII – PLAN ADMINISTRATION 12

7.2 Action 12
7.3 Powers of the Plan Administrator 12
7.4 Compensation, Indemnity and Liability 13
7.5 Withholding 14
ARTICLE VIII – CLAIMS PROCEDURE 14
8.1 Claims for Benefits 14

8.2 Appeals of Denied Claims 14
8.3 Limitations on Actions 14
- ii -
Page
ARTICLE IX – AMENDMENT AND TERMINATION 15
9.1 Amendment of Plan 15

9.2 Termination of Plan 15
ARTICLE X – MISCELLANEOUS 16
10.1 Limitation on Participant’s Rights 16

10.2 Unfunded Obligation of Individual Employer 16
10.3 Other Plans 16
10.4 Receipt or Release 16
10.5 Governing Law 17
10.6 Adoption of Plan by Related Employers 17
- iii -
ARTICLE I – HISTORY AND PURPOSE

1.1 History and Purpose. The Pepsi Bottling Group, Inc. (“Company”) established the PBG Supplemental Savings Program (“Plan”) to
provide benefits to employees whose participation in the Company Retirement Contributions portion of the PBG 401(k) Savings Program is
limited because of the maximum amount of compensation which may be considered for purposes of Company Retirement Contributions under
Section 401(a)(17) of the Internal Revenue Code or because of elective deferrals under the PBG Executive Income Deferral Program. The Plan
was adopted effective as of January 1, 2007. The Company now wishes to amend and completely restate the Plan to comply with the final
regulations under Section 409A of the Internal Revenue Code.
1.2 Type of Plan. For federal income tax purposes, the PBG Supplemental Savings Program is intended to be a non-qualified unfunded
deferred compensation plan. For purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Plan is intended to be a
plan described in Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA providing benefits to a select group of management or highly compensated
employees.
1.3 Effect of Restatement. This 2009 Restatement of the Plan is effective January 1, 2009.
When used in this Plan, the following terms shall have the meanings set forth below unless a different meaning is plainly required by the
context:
2.1 Account. The account maintained for a Participant on the books of his or her Employer to determine, from time to time, the Participant’s
interest under this Plan. The balance in such Account shall be determined by the Recordkeeper pursuant to guidelines established by the Plan
Administrator. Each Participant’s Account shall consist of up to three subaccounts, as applicable: a Company Retirement Contribution
Subaccount, a Supplemental Company Retirement Contribution Subaccount, and a Nonqualified Holding Contribution Subaccount. The
Recordkeeper may also establish such additional subaccounts as it deems necessary for the proper administration of the Plan.
2.2 Act. The Securities Exchange Act of 1934, as amended.
2.3 Beneficiary. The person or persons (including a trust or trusts) properly designated by a Participant, as determined by the Plan
Administrator, to receive the Participant’s vested Account in the event of the Participant’s death.
2.4 Code. The Internal Revenue Code of 1986, as amended from time to time.
2.5 Company. The Pepsi Bottling Group, Inc. (also referred to herein as “PBG”), a corporation organized and existing under the laws of the
State of Delaware, or its successor or successors.
2.6 Company Retirement Contribution Subaccount. A subaccount of a Participant’s Account maintained to reflect the Participant’s
interest in the Plan attributable to Employer allocations prescribed in Section 4.1.
2.7 Compensation. A Participant’s Savings Plan Pay, determined without regard to the Compensation Limit, plus amounts deferred under
the EID. Deferred amounts shall be included in Compensation at the time such amounts would have been payable if the Participant made no
election to defer receipt of such amounts pursuant to the EID, and amounts received in a later year pursuant to an election to defer the
payment in accordance with the EID shall not be treated as Compensation in such later year.
2.8 Compensation Limit. The maximum amount of compensation which may be considered in determining the Company Retirement
Contributions for a Participant in the Savings Plan under Section 401(a)(17) of the Code.
2.9 Distribution Valuation Date. Each date as specified by the Plan Administrator from time to time as of which Participant Accounts are
valued for purposes of a distribution from a Participant’s Account. The initial Distribution Valuation Dates are the last day of each month. The
Distribution Valuation Date may be changed by the Plan Administrator, provided that such change does not result in a change in when
Accounts are paid out that is impermissible under Section 409A of the Code. Values are determined as of the close of a Distribution Valuation
Date or, if such date is not a business day, as of the close of the immediately preceding business day.
2.10 EID. The PBG Executive Income Deferral Program, as amended from time to time.
2.11 Eligible Employee. The term Eligible Employee shall have the meaning given to it in Section 3.1 of this Plan.
2.12 Employee. An individual who is a common law employee of an Employer. In no event shall a leased employee, independent contractor,
or other non-employee contract worker be treated as an Employee.
2.13 Employer. The Company and each of the Company’s subsidiaries and affiliates (if any) that are currently designated as an Employer
by the Plan Administrator. An entity shall be an Employer hereunder only for the period that it is (i) so designated by the Plan Administrator,
and (ii) a member of the PBG Organization.
2.14 ERISA. Public Law 93-406, the Employee Retirement Income Security Act of 1974, as amended from time to time.
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2.15 NAV. The net asset value of a phantom unit in one of the phantom funds offered for investment under the Plan, determined as of any
date in the same manner as applies on that date under the actual fund that is the basis of the phantom fund offered by the Plan.
2.16 Nonqualified Holding Contribution Subaccount. A subaccount of a Participant to reflect the Participant’s interest in the Plan
attributable to Employer allocations prescribed in Section 4.3.
2.17 Participant. Any Eligible Employee who has an Account. An active Participant is one who is currently receiving credits to such
Account in accordance with Article IV.
2.18 PBG Organization. The controlled group of organizations of which the Company is a part, as defined by Sections 414(b) and (c) of the
Code and the regulations issued thereunder. An entity shall be considered a member of the PBG Organization only during the period it is one
of the group of organizations described in the preceding sentence.
2.19 Plan. The PBG Supplemental Savings Program, the plan set forth herein, as it may be amended from time to time.
2.20 Plan Administrator. The Compensation and Management Development Committee of the Board of Directors of the Company (the
“Compensation Committee”) or its delegate or delegates, which shall have the authority to administer the Plan as provided in Article VII.
2.21 Recordkeeper. For any designated period of time, the party that is delegated the responsibility, pursuant to the authority granted by
the Plan Administrator, to maintain the records of Participant Accounts, process Participant transactions and perform other duties in
accordance with procedures and rules established by the Plan Administrator.
2.22 Savings Plan. The PBG 401(k) Savings Program, as amended from time to time.
2.23 Savings Plan Pay. The Participant’s compensation as defined in the Savings Plan for purposes of Company Retirement Contributions
under the Savings Plan.
2.24 Section 409A. Section 409A of the Code and the applicable regulations and other guidance issued thereunder.
2.25 Separation from Service. A Participant’s separation from service as defined in Section 409A; provided that for this purpose the term
“service recipient” shall include PepsiCo., Inc., so long as PepsiCo., Inc. or a member of the PepsiCo., Inc. controlled group maintains an
ownership interest in the Company of at least 20%.
2.26 Specified Employee. The individuals identified in accordance with principles set forth below.
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(a) General. Any Participant who at any time during the applicable year is:
(1) An officer of any member of the PBG Organization having annual compensation greater than $130,000 (as adjusted under
Section 416(i)(1) of the Code);
For purposes of (1) above, no more than 50 employees identified in the order of their annual compensation shall be treated as officers.
For purposes of this section, annual compensation means compensation as defined in Treas. Reg. § 1.415(c)-2(a), without regard to
Treasury Reg. §§ 1.415(c)-2(d), 1.415(c)-2(e), and 1.415(c)-2(g). The Plan Administrator shall determine who is a Specified Employee in
accordance with Section 416(i) of the Code and the applicable regulations and other guidance of general applicability issued thereunder
or in connection therewith, and provided further that the applicable year shall be determined in accordance with Section 409A and that
any modification of the foregoing definition that applies under Section 409A shall be taken into account.
(b) Applicable Year. Except as otherwise required by Section 409A, the Plan Administrator shall determine Specified Employees as of the
last day of each calendar year, based on compensation for such year, and such designation shall be effective for purposes of this Plan
for the twelve month period commencing on April 1st of the next following calendar year.
(c) Rule of Administrative Convenience. In addition to the foregoing, the Plan Administrator shall treat all other Employees classified as E5
and above on the applicable determination date prescribed in subsection (b) (i.e., the last day of each calendar year) as a Specified
Employee for purposes of the Plan for the twelve-month period commencing of the applicable April 1st date. However, if there are at least
200 Specified Employees without regard to this provision, then it shall not apply. If there are less than 200 Specified Employees without
regard to this provision, but full application of this provision would cause there to be more than 200 Specified Employees, then (to the
extent necessary to avoid exceeding 200 Specified Employees) those Employees classified as E5 and above who have the lowest base
salaries on such applicable determination date shall not be Specified Employees.
2.27 Supplemental Company Retirement Contribution Subaccount. A Subaccount of a Participant’s Account maintained to reflect the
Participant’s interest in the Plan attributable to Employer allocations prescribed in Section 4.2.
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2.28 Valuation Date. Each date, as determined by the Plan Administrator from time to time, as of which Participant Accounts are valued in
accordance with Plan procedures.
ARTICLE III – ELIGIBILITY AND PARTICIPATION

3.1 Eligibility to Participate.
(a) In General.
(1) Each Employee who is eligible for Company Retirement Contributions under the Savings Plan and (i) whose allocations of
Company Retirement Contributions under such plan are curtailed by the Compensation Limit; or (ii) who elects to make elective
deferrals under the EID shall be eligible to participate in this Plan.
(2) Notwithstanding paragraph (1) above, from time to time the Plan Administrator may modify, limit or expand the class of individuals
eligible to participate in the Plan, pursuant to criteria for eligibility that need not be uniform among all or any group of Employees.
(b) During the period an individual satisfies all of the eligibility requirements of this section, he or she shall be referred to as an Eligible
Employee.
(c) Each Eligible Employee becomes an active Participant on the date an amount is first credited to the Eligible Employee’s Account by the
Recordkeeper or the Plan Administrator pursuant to Section 4.1.
3.2 Termination of Participation. An individual, who has been an active Participant under the Plan, ceases to be a Participant on the date
his or her Account is fully paid out.
ARTICLE IV – CONTRIBUTIONS
4.1 Company Retirement Contributions. As soon as administratively feasible following the end of each calendar year (or, in the event the
Eligible Employee Separates from Service during such year, as soon as administratively feasible following Separation from Service), the Plan
Administrator shall credit each Eligible Employee’s Company Retirement Contribution Subaccount the amount, if any, determined under
Section 4.4.
4.2 Supplemental Company Retirement Contributions. As soon as administratively feasible following each payroll period of an Employer,
the Plan Administrator shall credit each Eligible Employee’s Supplemental Company Retirement Contribution Subaccount an amount, if any,
equal to two percent (2%) of the Eligible Employee’s Savings Plan Pay for such period in excess of the Compensation Limit. As soon as
administratively feasible following the end of each calendar year (or, in the event the Eligible Employee Separates from Service during such
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year, as soon as administratively feasible following Separation from Service), the Plan Administrator shall credit each Eligible Employee’s
Supplemental Company Retirement Contribution Subaccount the amount, if any, determined under Section 4.4.
4.3 Nonqualified Holding Contributions. As soon as administratively feasible following each payroll period of an Employer, the Plan
Administrator shall credit each Eligible Employee’s Nonqualified Holding Contribution Subaccount an amount, if any, equal to two percent
(2%) of the Eligible Employees elective EID deferrals for such period.
4.4 Transfers to Company Retirement Contribution and Supplemental Company Retirement Contribution Subaccounts. As soon as
administratively feasible following the last day of each calendar year (or in the event a Participant Separates from Service during such year, as
soon as administratively feasible following Separation from Service), the Plan Administrator shall transfer from each Participant’s Nonqualified
Holding Contribution Subaccount to such Participant’s Company Retirement Contribution Subaccount an amount, if any, equal to the sum of
(i) the Participant’s elective EID deferrals credited for such calendar year that do not exceed the difference between the Compensation Limit
and the Participant’s Savings Plan Pay not in excess of such Limit, multiplied by two percent (2%); and (ii) gains and losses credited with
respect to such amount for such calendar year, determined by the Plan Administrator based on the ratio of contributions to be transferred and
the total contribution to the subaccount for such year. After such transfer, the balance in the Eligible Employee’s Nonqualified Holding
Contribution Subaccount shall be transferred to such Participant’s Supplemental Company Retirement Contribution Subaccount.
4.5 Maximum Company Contributions. Notwithstanding any provisions of the Plan to the contrary, in no event shall the Company
Contributions credited to a Participant’s Account exclusive of gains and losses credited in accordance with Section 5.2(b), for a calendar year
exceed two percent (2%) of such Participant’s Compensation for such year, less the amount credited to the Participant’s Company Retirement
Contribution Account in the Savings Plan.
ARTICLE V – PARTICIPANT ACCOUNTS

5.1 Establishment of Participant Accounts. The Plan Administrator shall establish and maintain an Account for each Participant to which
amounts credited pursuant to this Plan, and the investment performance of underlying investments attributable to such amounts will be
credited.
5.2 Credits to Accounts.
(a) The Plan Administrator shall credit amounts prescribed in Article IV to the Account of the Participant as soon as administratively
feasible after such amount is determined.
(b) Account Earnings or Losses. As of each Valuation Date, a Participant’s Account shall be credited with earnings and gains (and shall be
debited for expenses and losses)
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determined as if the amounts credited to his or her Account had actually been invested as directed by the Participant in accordance with
this Article. The Plan provides only for “phantom investments,” and therefore such earnings, gains, expenses and losses are
hypothetical and not actual. However, they shall be applied to measure the value of a Participant’s Account and the amount of his or her
Employer’s liability to make deferred payments to or on behalf of the Participant.
5.3 Investment Options.
(a) General. Each Participant’s Account shall be invested on a phantom basis in any combination of phantom investment options specified
by the Participant from those offered by the Plan Administrator for this purpose from time to time. The Plan Administrator may
discontinue any phantom investment option with respect to some or all Accounts, and it may provide rules for transferring a
Participant’s phantom investment from the discontinued option to a specified replacement option (unless the Participant selects another
replacement option in accordance with such requirements as the Plan Administrator may apply).
(b) Phantom Investment Options. The basic phantom investment options offered under the Plan are as follows:
(1) Phantom PBG Stock Fund. Participant Accounts (or designated portions thereof) invested in this phantom option are adjusted to
reflect an investment in the PBG Stock Fund, which is offered under the Savings Plan. An amount initially invested or transferred into
this option is converted to phantom units in the PBG Stock Fund by dividing such amount by the NAV of the fund on the Valuation
Date as of which the amount is treated as invested in this option by the Plan Administrator. A Participant’s interest in the Phantom
PBG Stock Fund is valued as of a Valuation Date (or a Distribution Valuation Date) by multiplying the number of phantom units
credited to the Participant’s Account on such date by the NAV of a unit in the PBG Stock Fund on such date. If shares of PBG
Common Stock change by reason of any stock split, stock dividend, recapitalization, merger, consolidation, spin-off, combination or
exchange of shares or other any other corporate change treated as subject to this provision by the Plan Administrator, such equitable
adjustment shall be made in the number and kind of phantom units credited to an Account as the Plan Administrator may determine to
be necessary or appropriate. In no event will shares of PBG Common Stock actually be purchased or held under this Plan, and no
Participant shall have any rights as a shareholder of PBG Common Stock on account of an interest in this phantom option.
(2) Phantom Savings Plan Funds. From time to time, the Plan Administrator shall designate which (if any) of the investment options
under the Savings Plan shall be available as phantom investment options under this Plan. Participant Accounts invested in these
phantom options are adjusted to reflect an investment in the
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corresponding investment options under the Savings Plan. An amount initially credited or transferred into one of these options is
converted to phantom units in the applicable Savings Plan fund of equivalent value by dividing such amount by the NAV of a unit in
such fund on the date as of which the amount is treated as invested in the option by the Plan Administrator. Thereafter, a
Participant’s interest in each such phantom option is valued as of a Valuation Date (or a Distribution Valuation Date) by multiplying
the number of phantom units credited to his or her Account on such date by the NAV of a unit in the applicable Savings Plan fund on
such date.
(3) Other Funds. From time to time, the Plan Administrator shall designate which (if any) other investment options shall be available as
phantom investment options under this Plan. These may be in addition to those provided for above. They may also be in lieu of some
or all of them. Any of these phantom investment options shall be administered under procedures implemented from time to time by the
Plan Administrator.
5.4 Method of Allocation.
(a) The Participant must designate, in accordance with procedures established by the Plan Administrator, the allocation of credits to the
Participant’s Account in 5% increments among the phantom investment options then offered by the Plan Administrator. If such a
designation specifies phantom investment options for less than 100% of the Participant’s Account, the Plan Administrator shall allocate
the Participant’s Account to a default fund designated by the Plan Administrator to the extent necessary to provide for investment of
100% of the credits to such Participant’s Account. If an election specifies phantom investment options for more than 100% of the
amounts credited for the Participant’s Account, the election shall be void and the Participant must make a new election. In the absence
of a valid election, the Plan Administrator shall allocate the Participant’s Account to a default fund designated by the Plan
Administrator.
(b) Fund Transfers. A Participant may reallocate previously credited amounts among the phantom investment options in accordance with
procedures established by the Plan Administrator. Such an election must specify, in 1% increments, but not less than $250.00, the
reallocation of his or her Account among the phantom investment options then offered by the Plan Administrator for this purpose. If a
fund transfer election provides for investing less than or more than 100% of the Participant’s Account, it will be void and no transfers
shall be made. Fund transfers shall be effective as of the Valuation Date next occurring after receipt by the Recordkeeper, but the Plan
Administrator or the Recordkeeper may also specify a minimum number of days in advance of which such transfer instruction must be
received in order to become effective as of such next Valuation Date. If more than one transfer request is received on a timely basis for an
Account, the transfer request that the Plan Administrator or Recordkeeper determines to be the most recent shall be followed.
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(c) Phantom PBG Stock Fund Restrictions. To the extent necessary to ensure compliance with Rule 16b-3(f) of the Securities Exchange Act
of 1934, the Company may arrange for tracking of any such transaction defined in Rule 16b-3(b)(1) of the Securities Exchange Act of 1934
involving the Phantom PBG Stock Fund and the Company may bar any such transaction to the extent it would not be exempt under
Rule 16b-3(f). The Company may impose blackout periods pursuant to the requirements of the Sarbanes-Oxley Act of 2002 whenever the
Company determines that circumstances warrant. Further, the Company may impose quarterly blackout periods on insider trading in the
Phantom PBG Stock Fund as needed (as determined by the Company), timed to coincide with the release of the Company’s quarterly
earnings reports. The commencement and termination of these blackout periods in each quarter, the parties to which they apply and the
activities they restrict shall be as set forth in the official insider trading policy promulgated by the Company from time to time.
5.5 Vesting of a Participant’s Account; Misconduct. Subject to the following paragraph, the amount credited to a Participant’s
Supplemental Company Retirement Contribution Subaccount and Nonqualified Holding Contribution Subaccount shall be fully vested on the
earlier of the date the Participant, while an Employee, (a) has completed ten years of Service, as defined by the Savings Plan, and attained age
55, (b) has completed five years of Service, as defined by the Savings Plan, and attained age 65 and (c) dies. The amount credited to a
Participant’s Company Retirement Contribution Subaccount (after all transfers prescribed in Section 4.4), if any, shall be fully vested on the
earlier of the date the Participant (a) has completed three years of Service, as defined in the Savings Plan, and (b) dies.
Notwithstanding any other provisions of this Plan, including this Section 5.5, to the contrary, a Participant shall forfeit his or her entire
Account if the Plan Administrator determines that such Participant has engaged in “Misconduct” as defined below. The Plan Administrator
may, in its sole discretion, require the Participant to pay to the Employer any amount distributed to the Participant from the Participant’s
Account within the twelve month period immediately preceding a date on which the Participant engaged in such Misconduct, as determined
by the Plan Administrator.
“Misconduct” means any of the following, as determined by the Plan Administrator in good faith: (i) violation of any agreement between
the Company or Employer and the Participant, including but not limited to a violation relating to the disclosure of confidential information or
trade secrets, the solicitation of employees, customers, suppliers, licensors or contractors, or the performance of competitive services;
(ii) violation of any duty to the Company or Employer, including but not limited to violation of the Company’s Code of Conduct; (iii) making, or
causing or attempting to cause any other person to make, any statement (whether written, oral or electronic), or conveying any information
about the Company or Employer which is disparaging or which in any way reflects negatively upon the Company or Employer unless required
by law or pursuant to a Company or Employer policy; (iv) improperly disclosing or otherwise misusing any confidential information regarding
the Company or Employer; (v) unlawful trading in the securities of the Company or of another company based on information garnered as a
result of that Participant’s employment or other relationship with the
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Company; (vi) engaging in any act which is considered to be contrary to the best interests of the Company or Employer, including but not
limited to recruiting or soliciting employees of the Employer; or (vii) commission of a felony or other serious crime or engaging in any activity
which constitutes gross misconduct.
ARTICLE VI – PAYMENT OF BENEFITS

6.1 Time and Form of Payment. Subject to Sections 6.2 and 6.5, the balance credited to an Account, to the extent vested, shall be payable
in a single lump sum payment on the first day of the month following the Distribution Valuation Date that next follows the earlier of (i) the
Participant’s Separation from Service; and (ii) a change in control of the Participant’s Employer (other than the Company), as defined in
Section 409A.
6.2 Six Month Deferral. If the Participant is classified as a Specified Employee at the time of the Participant’s Separation from Service (or at
such other time for determining Specified Employee status as may apply under Section 409A), then such Participant’s vested Account shall be
paid, as a result of the Participant’s Separation from Service, on the first day of the month next following the first Distribution Valuation Date
that occurs at least six months after the Participant’s Separation from Service.
6.3 Distributions on Account of Death. Upon a Participant’s death, the value of the Participant’s Vested Account under the Plan shall be
distributed to the Participant’s Beneficiary in a single lump sum payment on the first day of the month following the Distribution Valuation
Date next following the date of the Participant’s death.
Each Participant may designate a Beneficiary or Beneficiaries (contingently, consecutively, or successively) of a death benefit and, from
time to time, may change his or her designated Beneficiary. A Beneficiary may be a trust. A beneficiary designation shall be made in writing in
a form prescribed by the Plan Administrator and delivered to the Plan Administrator while the Participant is alive. The designation of a non-
spouse Beneficiary shall be vested only if the Participant’s spouse shall have in writing consented to such designation, the consent
acknowledges the effect of such designation, and the consent is witnessed by a Plan representative or a notary public. If there is no
designated Beneficiary surviving at the death of a Participant, payment of any death benefit of the Participant shall be made to the surviving
spouse of the Participant, and if the Participant leaves no spouse, to the surviving children of the Participant and if the Participant leaves no
spouse or children surviving, to the estate of the Participant.
6.4 Valuation. In determining the amount of a distribution pursuant to this Article, the Participant’s Account shall continue to be credited
with earnings and gains (and debited for expenses and losses) as specified in Article V until the Distribution Valuation Date that is used in
determining the amount of the distribution under this Article.
6.5 Automatic Deferral. Notwithstanding any other provision of this Plan to the contrary, and subject to the requirements of Treas. Reg. §
1.409A-2(b)(7)(i), no amount shall be
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paid to any Participant before the earliest date on which the Employer’s federal income tax deduction for such payment is not precluded by
Section 162(m) of the Code. In the event any payment is delayed solely as a result of the preceding restriction, such payment shall be made not
later than the later of the last day of the Participant’s taxable year that includes the date as of which the Employer reasonably anticipates that
Section 162(m) of the Code no longer precludes the deduction by the Employer, and the date specified in Section 6.6. The Participant is not
permitted to designate the taxable year of payment.
6.6 Actual Date of Payment. An amount payable on a date specified in this Article VI shall be paid as soon as administratively feasible after
such date; but no later than the later of (a) the end of the calendar year in which the specified date occurs; or (b) the 15th day of the third
calendar month following such specified date and the Participant (or Beneficiary) is not permitted to designate the taxable year of the payment.
The payment date may be postponed further if calculation of the amount of the payment is not administratively practicable due to events
beyond the control of the Participant (or Beneficiary), and the payment is made in the first calendar year in which the calculation of the amount
of the payment is administratively practicable.
6.7 Impact of Securities Law on Distributions. The provisions of Section 5.4(c) and this Section 6.7 shall apply in determining whether a
Participant’s distribution shall be delayed beyond the date applicable under the preceding provisions of this Article VI.
(a) In General. This Plan is intended to be a formula plan for purposes of Section 16 of the Securities Exchange Act of 1934 (the “Act”).
Accordingly, in the case of a deferral or other action under the Plan that constitutes a transaction that could be covered by Rule 16b-3(d)
or (e) of the Act, if it were approved by the Company’s Board of Directors or the Compensation Committee (“Board Approval”), it is
intended that the Plan shall be administered by delegates of the Compensation Committee, in the case of a Participant who is subject to
Section 16 of the Act, in a manner that will permit the Board Approval of the Plan to avoid any additional Board Approval of specific
transactions to the maximum possible extent.
(b) Approval of Distributions: This subsection shall govern the distribution of a deferral that (i) is wholly or partly invested in the Phantom
PBG Stock Fund at the time the deferral would be valued to determine the amount of cash to be distributed to a Participant, (ii) was not
covered by an agreement, made at the time of the Participant’s original phantom investment election, that any investments in the Phantom
PBG Stock Fund would, once made, remain in that fund until distribution, (iii) is made to a Participant who is subject to Section 16 of the
Act at the time the interest in the Phantom PBG Stock Fund would be liquidated in connection with the distribution, and (iv) if paid at the
time the distribution would be made without regard to this subsection, could result in a violation of Section 16 of the Act because there is
an opposite way transaction that would be matched with the liquidation of the Participant’s interest in the Phantom PBG Stock Fund
(either as a “discretionary transaction,” within the meaning of Rule 16b-3(b)(1), or as a regular transaction, as applicable) (a “Covered
Distribution”). In the case
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of a Covered Distribution, if the liquidation of the Participant’s interest in the Phantom PBG Stock Fund in connection with the distribution
has not received Board Approval by the time the distribution would be made if it were not a Covered Distribution, or if it is a discretionary
transaction, then the actual distribution to the Participant shall be delayed only until the earlier of:
(1) In the case of a transaction that is not a discretionary transaction, Board Approval of the liquidation of the Participant’s interest in the
Phantom PBG Stock Fund in connection with the distribution, and
(2) The date the distribution would no longer violate Section 16 of the Act, e.g., when the Participant is no longer subject to Section 16 of
the Act, when the balance related to the distribution is no longer invested in the Phantom PBG Stock Fund, or when the time between
the liquidation and an opposite way transaction is sufficient.
ARTICLE VII — PLAN ADMINISTRATION

7.1 Plan Administrator. The Plan Administrator is responsible for the administration of the Plan. The Plan Administrator has the authority
to name one or more delegates to carry out certain responsibilities hereunder, as specified in Section 7.3. Any such delegation shall state the
scope of responsibilities being delegated.
7.2 Action. Action by the Plan Administrator may be taken in accordance with procedures that the Plan Administrator adopts from time to
time or that the Company’s Law Department determines are legally permissible.
7.3 Powers of the Plan Administrator. The Plan Administrator shall administer and manage the Plan and shall have (and shall be permitted
to delegate) all powers necessary to accomplish that purpose, including the following:
(b) To exercise its discretionary authority to make all decisions regarding eligibility, participation and credits to Accounts, to make allocations
and determinations required by this Plan, and to maintain records regarding Participants’ Accounts;
(c) To compute and certify to the Employers the amount and kinds of payments to Participants or their Beneficiaries, and to determine the
(d) To authorize all disbursements by the Employer pursuant to this Plan;
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(h) To establish or to change the phantom investment options or arrangements under Article V;
(j) Notwithstanding any other provision of this Plan, the Plan Administrator or the Recordkeeper may take any action the Plan Administrator
deems is necessary to assure compliance with any policy of the Company respecting insider trading as may be in effect from time to time.
Such actions may include altering the effective date of intra-fund transfers or the distribution date of Accounts. Any such actions shall
alter the normal operation of the Plan to the minimum extent necessary, and shall comply with any applicable requirements of
Section 409A.
capricious.
7.4 Compensation, Indemnity and Liability. The Plan Administrator will serve without bond and without compensation for services
hereunder. All expenses of the Plan and the Plan Administrator will be paid by the Employers. To the extent deemed appropriate by the Plan
Administrator, any such expense may be charged against specific Participant Accounts, thereby reducing the obligation of the Employers. No
member of the Compensation Committee (which serves as the Plan Administrator), and no individual acting as the delegate of such committee,
shall be liable for any act or omission of any other member or individual, nor for any act or omission on his or her own part, excepting his or her
own willful misconduct. The Employers
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will indemnify and hold harmless each member of the Compensation Committee and any employee of the Company (or a Company affiliate, if
recognized as an affiliate for this purpose by the Plan Administrator) acting as the delegate of such committee against any and all expenses
and liabilities, including reasonable legal fees and expenses, arising in connection with this Plan out of his or her membership on the
Compensation Committee (or his or her serving as the delegate of such committee), excepting only expenses and liabilities arising out of his or
her own willful misconduct or bad faith.
7.5 Withholding. The Employer shall withhold from amounts due under this Plan, the amount necessary to enable the Employer to remit to
of the Code, by an applicable state’s income tax, or by an applicable city, county or municipality’s earnings or income tax act. The Employer
shall withhold from the payroll of, or collect from, a Participant the amount necessary to remit on behalf of the Participant any FICA taxes
which may be required with respect to amounts accrued by a Participant hereunder, as determined by the Company.
ARTICLE VIII – CLAIMS PROCEDURE

8.1 Claims for Benefits. If a Participant, Beneficiary or other person (hereafter, “Claimant”) does not receive timely payment of any benefits
which he or she believes are due and payable under the Plan, he or she may make a claim for benefits to the Plan Administrator. The claim for
benefits must be in writing and addressed to the Plan Administrator. If the claim for benefits is denied, the Plan Administrator will notify the
Claimant within 90 days after the Plan Administrator initially received the benefit claim. However, if special circumstances require an extension
of time for processing the claim, the Plan Administrator will furnish notice of the extension to the Claimant prior to the termination of the initial
90-day period and such extension may not exceed one additional, consecutive 90-day period. Any notice of a denial of benefits shall advise
the Claimant of the basis for the denial, any additional material or information necessary for the Claimant to perfect his or her claim, and the
steps which the Claimant must take to appeal his or her claim for benefits.
8.2 Appeals of Denied Claims. Each Claimant whose claim for benefits has been denied may file a written appeal for a review of his or her
claim by the Plan Administrator. The request for review must be filed by the Claimant within 60 days after he or she received the notice
denying his or her claim. The decision of the Plan Administrator will be communicated to the Claimant within 60 days after receipt of a request
for appeal. The notice shall set forth the basis for the Plan Administrator’s decision. However, if special circumstances require an extension of
time for processing the appeal, the Plan Administrator will furnish notice of the extension to the Claimant prior to the termination of the initial
60-day period and such extension may not exceed one additional, consecutive 60-day period.
8.3 Limitations on Actions. Any claim filed under this Article VIII and any action brought in state or federal court by or on behalf of a
Participant or a Beneficiary for the alleged
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wrongful denial of Plan benefits or for the alleged interference with ERISA-protected rights must be brought within three years of the date the
Participant’s or Beneficiary’s cause of action first accrues. Failure to bring any such cause of action within this three-year time frame shall
preclude a Participant or Beneficiary, or any representative of the Participant or Beneficiary, from bringing the claim or cause of action.
Correspondence or other communications following the mandatory appeals process described in this Article VIII shall have no effect on this
three-year time frame.
ARTICLE IX – AMENDMENT AND TERMINATION

9.1 Amendment of Plan. The Compensation Committee has the right in its sole discretion to amend this Plan in whole or in part at any time
and in any manner, including the manner of making deferral elections, the terms on which distributions are made, and the form and timing of
distributions. However, except for mere clarifying amendments necessary to avoid an inappropriate windfall, no Plan amendment shall reduce
the vested amount credited to the Account of any Participant as of the date such amendment is adopted. Any amendment shall be in writing
and adopted by the Compensation Committee. All Participants and Beneficiaries shall be bound by such amendment. Any amendments made
to the Plan shall be subject to any restrictions on amendment that are applicable to ensure continued compliance under Section 409A.
Notwithstanding the preceding, the Company’s Senior Vice President — Human Resources may amend the Plan without the consent of the
Compensation and Management Development Committee for the purposes of (i) conforming the Plan to the requirements of law, (ii) facilitating
the administration of the Plan, and (iii) clarifying provisions based on the Committee’s interpretation of the document; provided that such
amendment does not relate to the Plan provisions and restrictions for ensuring compliance with Rule 16b-3 of the Act.
9.2 Termination of Plan. The Company may terminate the Plan and all other plans aggregated with the Plan pursuant to Treas. Reg.
§1.409A-1(c), and distribute all vested amounts credited to Participants’ Accounts in a lump sum after the first anniversary of the date of the
Plan termination and before the second anniversary of the date of the Plan termination, subject to the restrictions on maintaining future
deferred compensation arrangements set forth in Treas. Reg. §1.409A-3(h)(2)(viii) (no new nonqualified plan within three years).
The Company also may terminate the Plan and distribute all vested amounts credited to Participants’ Accounts in a lump sum payment
within twelve months after a change in control as permitted under Section 409A.
The Company also may terminate the Plan and distribute all vested amounts credited to Participants’ Accounts in a lump sum payment as of
the date of the corporate dissolution of the Company in a transaction taxable under Section 331 of the Code or in the event of the bankruptcy
of the Company with the approval of the Bankruptcy Court pursuant to 11 U.S.C. §504(b)(1).
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In addition, the Company may terminate the Plan and distribute all vested amounts credited to Participants’ Accounts as may otherwise be
permitted by the Commissioner of the Internal Revenue Service under Section 409A.
A termination of the Plan must comply with the provisions of Section 409A, including, but not limited to, restrictions on the timing of final
distributions and the adoption of future deferred compensation arrangements.
ARTICLE X – MISCELLANEOUS
10.1 Limitation on Participant’s Rights. Participation in this Plan does not give any Participant the right to be retained in the Employer’s or
Company’s employ (or any right or interest in this Plan or any assets of the Company or Employer other than as herein provided). The
Company and the Employers reserve the right to terminate the employment of any Participant without any liability for any claim against the
Company or the Employers under this Plan, except for a claim for payment of deferrals as provided herein.
10.2 Unfunded Obligation of Individual Employer. The benefits provided by this Plan are unfunded. All amounts payable under this Plan
to Participants are paid from the general assets of the Participant’s individual Employer. Nothing contained in this Plan requires the Company
or an Employer to set aside or hold in trust any amounts or assets for the purpose of paying benefits to Participants. Neither a Participant,
Beneficiary, nor any other person shall have any property interest, legal or equitable, in any specific Employer asset. This Plan creates only a
contractual obligation on the part of a Participant’s Employer, and the Participant has the status of a general unsecured creditor of this
Employer with respect to amounts of compensation deferred hereunder. Such a Participant shall not have any preference or priority over, the
rights of any other unsecured general creditor of the Employer. No other Employer guarantees or shares such obligation, and no other
Employer shall have any liability to the Participant or his or her Beneficiary. In the event, a Participant transfers from the employment of one
Employer to another, the former Employer shall transfer the liability for deferrals made while the Participant was employed by that Employer to
the new Employer (and the books of both Employers shall be adjusted appropriately).
10.3 Other Plans. This Plan shall not affect the right of any Participant to participate in and receive benefits under and in accordance with
the provisions of any other employee benefit plans which are now or hereafter maintained by any Employer, unless the terms of such other
employee benefit plan or plans specifically provide otherwise or it would cause such other plan to violate a requirement for tax favored
treatment.
10.4 Receipt or Release. Any payment to a Participant in accordance with the provisions of this Plan shall, to the extent thereof, be in full
satisfaction of all claims against the Plan Administrator, the Recordkeeper, the Employers and the Company, and the Plan
- 16 -
Administrator may require such Participant, as a condition precedent to such payment, to execute a receipt and release to such effect.
10.5 Governing Law. This Plan shall be construed, administered, and governed in all respects in accordance with applicable federal law and,
to the extent not preempted by federal law, in accordance with the laws of the State of New York. If any provisions of this instrument shall be
held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof shall continue to be fully effective.
10.6 Adoption of Plan by Related Employers. The Plan Administrator may select as an Employer any subsidiary or affiliate related to the
Company by ownership (and that is a member of the PBG Organization), and permit or cause such division, subsidiary or affiliate to adopt the
Plan. The selection by the Plan Administrator shall govern the effective date of the adoption of the Plan by such related Employer. The
requirements for Plan adoption are entirely within the discretion of the Plan Administrator and, in any case where the status of an entity as an
Employer is at issue, the determination of the Plan Administrator shall be absolutely conclusive.
The amounts credited to the Account of a Participant are not (except as provided in Section 7.5) subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or
involuntary, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or otherwise dispose of any right to any
benefits payable hereunder, including, without limitation, any assignment or alienation in connection with a separation, divorce, child support
or similar arrangement, will be null and void and not binding on the Plan or the Company or any Employer. Notwithstanding the foregoing, the
Plan Administrator reserves the right to make payments in accordance with a divorce decree, judgment or other court order as and when cash
payments are made in accordance with the terms of this Plan from the Account of a Participant. Any such payment shall be charged against
and reduce the Participant’s Account.
10.7 Facility of Payment. Whenever, in the Plan Administrator’s opinion, a Participant or Beneficiary entitled to receive any payment
hereunder is under a legal disability or is incapacitated in any way so as to be unable to manage his or her financial affairs, the Plan
Administrator may direct the Employer to make payments to such person or to the legal representative of such person for his or her benefit, or
to apply the payment for the benefit of such person in such manner as the Plan Administrator considers advisable. Any payment in
accordance with the provisions of this section shall be a complete discharge of any liability for the making of such payment to the Participant
or Beneficiary under the Plan.
- 17 -
Exhibit 10.35
On this 25th day of December 2008 in Moscow, Russian Federation
Frito Lay Manufacturing LLC whose registered address is Mezheninova, 5, Kashira, Moscow Region, Russian Federation in the person
of its general director, Paul Kiesler acting on the basis of the charter of the company on the one hand
And
PepsiCo Holdings LLC whose registered address is Sherrizone, Moscow Region, Russian Federation in the person of its general
director, Marina Ostrovskaya acting on the basis of the charter of the company on the other hand
have reached the following agreement:
1 Definitions
Throughout this Agreement, unless the context expressly admits otherwise, the following words and phrases shall have the following
meanings:
Agreement means this master distribution agreement signed between FLM and PCH.
AOP means FLM’s prevailing annual operating plan for the sale of the Products in the Russian Federation to be determined by FLM and
communicated to PCH.
Beverages means any beverage distributed by PCH.
Case means a raw case of the Products, determined according to the Product list, set forth in Schedule F as amended from time to time by
FLM.
Channel means either the Modern Trade, the Traditional Trade or the Indirect Channel (as the case may be.)
Combined Sales Force means all those sales persons employed by PCH and engaged in the sale of the Products together with the sale of
the Beverages.
Combined Cities means all those cities or oblasts in which the Combined Sales Force collects orders for the Products and which at the
Effective Date are those set forth in Schedule S.
Credit Limit means the total amount of money which PCH may owe FLM at any time for the Products and which shall not exceed the
value of all Products purchased by PCH during any thirty day period or such other period as the Parties may agree from time to time,
such value being determined on the basis of the prevailing Price List.
1
Credit Terms means those credit terms granted by PCH to Customers from time to time in accordance herewith.
Customers means any legal or physical entity purchasing the Products and/or Beverages from PCH.
Database means a data base containing Customer and transactional information and maintained by PCH in accordance with clause 11.
Dedicated Sales Force means all those sales persons employed by PCH and engaged solely in the sale of the Products.
Dedicated Cities means all those cities and oblasts in which the Dedicated Sales Force collects some or all of orders for the Products
arising in such city and which at the Effective Date are those set forth in Schedule S.
DS3 Customer means any 3PD Customer some or all of whose sales force is employed by PCH. Any sales made by such sales force
shall be deemed to have been made by the Sales Force. Any sales made directly by a DS3 Customer (and not by such sales force) shall
be deemed to form part of sales into the Indirect Channel.
Effective Date means the date on which this Agreement shall come into force and this shall be 1st of January 2009.
FLM means Frito Lay Manufacturing LLC whose registered address is 142 900, Mezheninova, 5, Kashira, Moscow Region, Russian
Federation.
Forecast means a forecast jointly prepared by the Parties pursuant to clause 6.2 setting out, inter alia, the Parties’ commercial
expectations for the following year and the financial assumptions on which they are based.
Indirect Channel means that channel comprised of 3PD Customers or wholesalers who purchase the Products primarily for resale to
other distributors or retailers.
KPI(s) means all those key performance indicators determined by FLM (taking into account the reasonable opinions of PCH) and which
PCH shall track and report to FLM in accordance with Schedules L and S. and the introduction of which shall be subject to the prior
approval of PCH, such approval not to be unreasonably withheld or delayed.
Modern Trade means any hypermarket, supermarket, discounter or any other Customer falling within this channel according to PCH’s
channel classification prevailing on the Effective Date together with such other Customers as the Parties may determine (from time to
time) acting reasonably.
Pallet means those pallets belonging to FLM on which the Product is shipped to PCH.
2
Parties means FLM and PCH.

PCH means PepsiCo Holdings LLC whose registered address is Sherrizone, Moscow Region, Russian Federation.
Price List shall mean the rouble price list setting out the prices at which FLM shall sell the Products to PCH and such list shall be
determined in accordance with Schedule F, subject to clause 6.5. The Price List prevailing on the Effective Date is set forth at Schedule F.
Products means all those products sold by FLM to PCH from time to time pursuant hereto, all of which shall conform to the Quality
Documents.
Proposing Party shall have the meaning ascribed to it in clause 6.5 of this Agreement.
Quality Specifications means all those quality specifications to which the Products shall conform in accordance with Russian law.
Quality Documents means the certificate of conformity, sanitary epidemiological conclusion and confirmation of quality and fitness for
consumption for each of the Products.
Sales Force means either the Combined Sales Force or the Dedicated Sales Force (as the case may be.)
Schedule(s) mean all those schedules of this Agreement, which form an integral part hereof.
Total Sales Force means the Combined Sales Force and the Dedicated Sales Force.
Trademarks means “Lays”, “Lays Max”, “Cheetos” and “Hrusteam” and such other snack food trademarks under which the Products
are sold from time to time.
Traditional Trade means any Customer falling within this channel according to PCH’s channel classification prevailing on the Effective
Date (and this shall include on-premise customers) together with such other Customers as the Parties may determine (from time to time)
acting reasonably.
Term means the term of this Agreement which shall be five years from the Effective Date subject to the relevant provisions of clause 6
and17.
Volume Plan means the annual plan setting out by region, city, Sales Force and Channel the volume of the Products to be sold during
the following year throughout the Russian Federation.
3
3PD Agreements means a distribution or wholesale supply agreement (as the case may be) concluded by PCH with a 3PD Customer for
the supply of the Products and/or the Beverages.
3PD Customers means any wholesaler or distributor within the Indirect Channel which purchases the Products from PCH.
2 General
With effect from the Effective Date FLM hereby appoints PCH as its distributor of the Products in the Channels throughout the Term in
accordance with the terms and conditions hereof and PCH hereby accepts such appointment.
3 Sale of Products to PCH
3.1 FLM shall sell the Products to PCH at the Price List, prevailing on the day on which shipment of the Products [is scheduled to take
place] [takes place.]
3.2 Any amendments to the Price List made in accordance herewith shall become effective 30 calendar days after PCH’s receipt of electronic
notice thereof.
3.3 FLM shall recognize the income from the sale of Products to PCH at the moment of their delivery to PCH, which shall be deemed to have
taken place upon signing of an act of acceptance by a duly authorized representative of PCH, whereupon title and risk in the Products
shall pass to PCH.
3.4 If FLM delivers Products directly to Customers, FLM shall recognize the income from such sale from the moment a duly authorized
representative of PCH confirms in writing that the Products have been loaded onto the delivery truck, whereupon title in the Products
shall pass to PCH.
3.5 The Parties shall exchange between each other in accordance with their usual practices information confirming shipment and delivery of
the Products to ensure their respective finance departments effect mutual reconciliation of such information by the last working day of
each week and by the end of the first working day after each month of the Term.
3.6 The rights and obligations of the Parties with respect to the acceptance, rejection, and repackaging of the Products together with the
presentation and settlement of any claims by PCH arising from the Products’ failure to conform to the Quality Specifications are set forth
in Schedule L.
4 PCH’s Payment Terms
4.1 PCH shall pay for the Products within 30 calendar days of the date of their shipment.
4.2 The Parties shall ensure that at any time PCH shall not owe FLM an amount in excess of the Credit Limit.
4
4.3 The Credit Limit shall be tracked by the Parties on a monthly basis.
4.4 The Parties shall review the Credit Limit annually in good faith taking into account prevailing market conditions and shall endeavour to
make reasonable changes thereto in the light of such review.
4.5 The Credit Limit does not include the cost of any Pallets. If PCH fails to return a Pallet to FLM within 6 months of its shipment in case of
return to FLM’s Samara, Yekaterinburg & Novosibirsk branches and 3 month of its shipment in case of return to FLM’s Moscow and St.
Petersburg branches PCH shall promptly pay FLM an amount equal to the prevailing invoice price at which FLM purchases replacement
Pallets pursuant to arm’s length transactions.
4.6 All those other rights and obligations of the Parties in relation to the Pallets are set forth in Schedule L.
5 Terms of Delivery to PCH
5.1 The prices set forth in the prevailing Price List shall include the cost of primary transportation to the agreed place of delivery, which
FLM shall bear.
5.2 The delivery destinations and the standard delivery terms to which all Product sold and distributed pursuant to the terms hereof shall be
subject are more particularly described in Schedules S & L.
5.3 The Parties shall abide by the procedure for the collection and submission of orders for the Products by PCH together with the
procedure for the fulfilment of such orders set forth in Schedule L.
6 Determining & Amending the Price List
6.1 The Price List and growth bonuses, which shall be in force from the Effective Date throughout 2009, subject to the provisions of clause
6.5 is set forth at Schedule F.
6.2 By 31st of October of each year of the Term commencing in 2009, the Parties shall acting in good faith use all reasonable endeavours to
agree the Forecast and the Price List.
6.3 The Forecast on which the Price List for 2009 is based is set forth in Schedule F.
6.4 No later than 30th of September each year the Parties shall commence the negotiation of the Forecast and the Price List. If by 31st of
October of each year of the Term the Parties fail to agree in writing either the Forecast or the Price List for the following year, this
Agreement shall terminate on 1st of May of the following year.
6.5 At least once every quarter the Parties shall use their reasonable endeavours to review in good faith the prevailing Forecast against the
latest actual market
5
data to which each component of the Forecast relates. If in the reasonable opinion of either party the Forecast is materially different to
such actual data, such party may propose in writing appropriate amendment(s) to the Price List in the light of such difference (“the
Proposing Party”) and the Parties shall use all reasonable endeavours to agree such amendments. If 30 days after the date upon which
the Proposing Party delivers notice of its proposal to the other party, the Parties have failed to reach agreement on the amendments to
the Price List, either party may terminate this Agreement by delivering written notice thereof on the other party in which case this
Agreement shall terminate six months after the date of delivery of such notice.
6.6 Upon reasonable notice each party shall grant to the other prompt, full and unfettered access to all books and records maintained by
such party in order to permit the other party to exercise its right of review set forth in clause 6.5.
6.7 If this Agreement is terminated pursuant to clauses 6.4 or 6.5, such termination shall not amount to a breach of contract by either party
and the Price List prevailing immediately prior to (i) 31st of October (in the case of clause 6.4) or (ii) the delivery of the Proposing Party’s
notice (in the case of clause 6.5) shall remain in force until termination.
6.8 If the Parties fail to reach agreement on appropriate amendments to the Price List following notice from the Proposing Party pursuant to
clause 6.5 and neither Party terminates the Agreement, the prevailing Price List shall remain in force until either the next quarterly review
pursuant to clause 6.5 or (if sooner than the next quarterly review) the next determination of the Forecast pursuant to clause 6.2. If the
Parties continue to fail to agree:
(i) the amendments to the Price List pursuant to clause 6.5, then the applicable provisions of this clause shall again apply or
(ii) the new Price List pursuant to clause 6.2, then the provisions of clause 6.4 shall apply.
7 Credit
7.1 PCH shall determine the Credit Terms, at all times taking into account the reasonable opinions of FLM.
7.2 PCH shall bear all risk of each Customer’s failure to pay for the Products without recourse to FLM.
7.3 PCH shall grant its Customers the same Credit Terms in respect of the Products as it does in respect of the Beverages, irrespective of the
Customer’s purchases of each and determined solely by reference to the Customer’s creditworthiness and the total value of purchases
made by the Customer.
8 Sales Forces
8.1 PCH shall ensure that:
6
(i) the Total Sales Force consists of a sufficient number of people having sufficient experience in the sales and distribution of snack
foods to permit PCH to sell prevailing Volume Plan.
(ii) those members of its senior management who shall determine the activities and working conditions (including salary and bonuses)
of the Total Sales Force shall be specialists having significant prior knowledge and experience of best practices in relation to the
sale of the Products.
8.2 PCH shall ensure that:
(i) the Total Sales Force is equipped with hand held computers capable of collecting in store data in line with FLM’s reasonable
requirements (as communicated by FLM to PCH during the AOP process).
(ii) such data is electronically transferred to FLM daily.
9 Channel Allocation
9.1 The Parties have agreed the allocation of Customers to Channels for 2009. No later than 31st of October of each year of the Term
commencing in 2009 the Parties shall jointly determine the Channel to which a Customer belongs during the following year.
9.2 The Parties shall review the composition of the Dedicated Cities and the Combined Cities at least twice a year and shall, acting
reasonably, make appropriate changes in the light of prevailing market conditions it being agreed that no changes shall be effected in
April, May or June of any year.
9.3 In the case of a 3PD Customer who purchases both Beverages and Products, PCH shall use all reasonable endeavours to ensure that the
terms and conditions of the supply of the Products shall be no worse than those of the supply of the Beverages. PCH shall use all
commercially reasonable endeavours to ensure that such 3PD Customers enter into two commercial agreements per annum, one setting
out the commercial conditions to which the supply of Beverages shall be subject and one setting out the commercial conditions to which
the supply of the Products shall be subject.
9.4 With respect to the Modern Trade, the Parties have agreed the following:
(i) FLM shall hire, instruct and bear the costs of all third party merchandisers working together with the Dedicated Sales Force.
(ii) Shipments of the Products from FLM warehouses shall be effected in accordance with Schedule L.
7
10 Volume Plan
10.1 FLM shall prepare a Volume Plan and submit it to PCH by 1st of September of each year of the Term commencing in 2009.
10.2 PCH shall use all commercially reasonable efforts to ensure that the Total Sales Force delivers the prevailing Volume Plan.
10.3 The Parties shall jointly review the Volume Plan by the end of each quarter throughout the Term and shall, acting reasonably, amend the
Volume Plan in accordance with Schedule S.
10.4 By 1st of October of each year of the Term commencing in 2009, PCH shall, taking into account the prevailing Volume Plan, submit to
FLM for its approval (such approval not to be unreasonably withheld or delayed) a volume target for the Total Sales Force (split
between the Combined and Dedicated) for each month of the following year (expressed by region, city and Channel) and PCH shall use
all commercially reasonably endeavours to ensure that the Total Sales Force attains such volume target, which shall be subject to
revisions commensurate with those made to the Volume Plan in accordance with clause 10.3.
11. Database
PCH shall maintain a Database in accordance with Schedule S.
12 Reporting
12.1 PCH shall ensure that it reports all relevant data to FLM in accordance with the applicable provisions of Schedules S&L.
12.2 During the final quarter of each year commencing in 2009 FLM shall determine those KPIs which PCH shall track and report to FLM
during the following years, subject to the Parties agreeing in advance on the timing and procedure for such tracking and reporting.
13 Marketing, Trade Support & Use of Trademarks
13.1 FLM shall alone determine all activities relating to and shall bear all costs arising in connection with the marketing and trade support for
the Products (including the development of all in store materials and promotional activities.)
13.2 In order to increase the sales of the Products throughout the Russian Federation, FLM has the right to:
(i) provide PCH with such sales materials (including racks) and other advertising materials as FLM shall determine and PCH shall
place them at points of sale in accordance with procedures which the Parties shall separately agree, acting reasonably;
8
(ii) engage in such merchandising activities at points of sale as it so chooses;

(iii) appoint and manage third party merchandisers on its own or in connection with PCH.
13.3 When FLM determines the prevailing Price List, FLM shall include all costs incurred pursuant to this Clause 13 in the price at which it
sells Products to PCH pursuant to the prevailing Price List.
13.4 FLM hereby authorises PCH to use the Trademarks for the purposes hereof in accordance with those written instructions, which FLM
shall, acting reasonably, issue to PCH from time to time.
13.5 If PCH becomes aware of any unauthorised use of the Trademarks by any third party, PCH shall promptly inform FLM thereof.
14 FLM’s Right of Field Audit
14.1 Upon reasonable notice to PCH, FLM may visit any premises owned or controlled by PCH with a view to verifying PCH’s compliance
with FLM’s transportation, operating and warehousing standards set forth in Schedule L.
14.2 If FLM exercises its right of field audit set forth in clause 14.1, PCH shall:
(i) make available to FLM or its authorised representative(s) such records and personnel as FLM may reasonably request in order for
FLM to complete the audit in accordance with PepsiCo, Inc’s usual auditing practices.
(ii) if the right of audit can only be exercised by visiting premises owned or controlled by a third party, use all commercially reasonable
endeavours to facilitate such visit.
15 Warehousing & Logistics
15.1 PCH shall ensure that at all times it maintains sufficient capacity throughout the Russian Federation to store, load and unload ordered
Products (as more particularly defined in Schedule L) and subject to those procedures set forth in Schedule L.
15.2 The Parties shall enjoy all those rights and submit to all those obligations relating to:
(i) warehousing, storing and ordering which are more particularly set forth in Schedule L.
(ii) logistics which are more particularly set forth in Schedule L.
9
15.3 PCH shall ensure the Products are sold, transported and delivered to Customers in accordance with those provisions set forth in
Schedule L.
15.4 FLM may in its absolute and unqualified discretion recall the Products from Customers and PCH shall effect such recall in accordance
with Schedule L on condition that (save where the recall is the result of any act or omission by PCH) FLM shall compensate PCH for all
direct costs incurred by PCH connected therewith.
16 Business Reviews
16.1 Throughout the Term the Parties shall undertake the following reviews within the period indicated:
(i) Following FLM’s determination of the Volume Plan by 1st of September of each year of the Term, the Parties shall agree the
following by 1st of October of each year of the Term:
(a) The following year’s volume target for the Combined Sales Force expressed by brand and city.
(b) The following year’s roll out for the Dedicated Team.
(c) KPIs for the following year.
(ii) By the third week of every month during the Term the Parties shall jointly review, inter alia, the year to date sales data for the
Products (including the sales volumes) versus the corresponding AOP targets together with any other joint projects.
(iii) Following FLM’s determination of the three year strategic volume plan for the sale of the Products in the Russian Federation by
30th of April of each year of the Term, the Parties shall agree promptly thereafter in the light thereof the roll out for the Dedicated
Sales Force during the next three years and the schedule for the conversion of 3PD Customers to DS3 Customers.
16.2 By the end of the third week of every month during the Term PCH shall review the year to date performance of the Combined Sales Team
against the relevant KPIs set out in the AOP.
17 Term & Termination
17.1 Subject to clauses 6.4, 6.5, 17.2 and 17.3 (respectively), the Term of this Agreement shall be five years commencing on the Effective Date
and expiring automatically on the fifth anniversary thereof.
17.2 Either Party may terminate this Agreement by giving the other two years prior written notice thereof. For the avoidance of doubt if either
Party serves such
10
notice on the other, this Agreement shall automatically terminate on the second anniversary of the delivery of notice of termination.
17.3 This Agreement shall automatically terminate six months after the occurrence of the termination for whatever reason of any of the
following:
(i) the joint venture agreement between PepsiCo Ireland Limited and PR Beverages Ireland Limited in relation to the establishment and
operation of PR Beverages Limited.
(ii) Any master bottling appointment issued by PepsiCo, Inc. or its affiliates to PR Beverages Limited in respect of any of the following
trademarks: Pepsi, 7-UP or Mirinda.
17.4 If the joint venture agreement described in clause 17.2 (i) is terminated by virtue of the material breach of PR Beverages Ireland Limited or
if any master bottling appointment described in clause 17.2 (i) is terminated by virtue of the material breach of PR Beverages Limited, this
Agreement shall be deemed to have been terminated due to the material breach of PCH.
17.5 If the joint venture agreement described in clause 17.2 (i) is terminated by virtue of the material breach of PepsiCo Ireland Limited or if
any master bottling appointment described in clause 17.2 (i) is terminated by virtue of the material breach of PepsiCo, Inc. or its affiliates,
this Agreement shall be deemed to have been terminated due to the material breach of FLM.
17.6 If this Agreement terminates for whatever reason, then immediately prior to termination;
(i) PCH undertakes to :
(a) sell to FLM any unsold Products in PCH’s possession at the book value thereof.
(b) return to FLM all equipment or materials owned by FLM in PCH’s possession.
(c) deliver to FLM an electronic copy of the Customer master files and credit history of all Customers, subject to PCH’s legal
right to do so.
(d) cease the sale of the Products.
(ii) The Parties shall make all payments due to each other pursuant to the terms hereof and either Part may set off monies owed to the
other against monies due from the other.
17.7 No term shall survive expiry or termination of this Agreement unless expressly provided otherwise.
11
17.8 The expiry or termination of this Agreement shall be without prejudice to any rights which have accrued already to either of the Parties
under this Agreement or (subject to clause 24) accrue to either Party under any applicable legislation.
18 Schedules
18.1 The Parties acknowledge that the full commercial understanding which they have reached from the Effective Date is set forth in this
Agreement together with all the Schedules hereto.
18.2 The Parties may from time to time amend this Agreement or its Schedules on condition that no amendment shall be effective unless
signed by duly authorised representatives of both Parties.
18.3 If there is a conflict between the provisions set forth in this Agreement with any set forth in the Schedules, the former shall prevail.
19 Governing Law & Jurisdiction
This Agreement shall be governed by Russian law and interpretation and the Parties irrevocably submit to the exclusive jurisdiction of
the Russian courts for all purposes connected with it.
20 Supersedes Prior Agreements
As at the Effective Date, this Agreement supersedes any prior agreement relating to the distribution of the Products, or any of them, in
the Russian Federation between the Parties whether written or oral and any such prior agreements are hereby cancelled but without
prejudice to any rights which have already accrued to either of the Parties.
21 Notices
Any notice to be served on either of the Parties by the other shall be sent by prepaid recorded delivery or registered post or by telex or
by electronic mail and shall be deemed to have been received by the addressee within 72 hours of posting or 24 hours if sent by telex or
by electronic mail to the correct telex number (with correct answerback) or correct electronic mail number of the addressee.
22 Waiver
The failure by either of the Parties to enforce at any time or for any period any one or more of the terms or conditions of this Agreement
shall not be a waiver of them or of the right at any time subsequently to enforce all terms and conditions of this Agreement.
12
23 Warranty
Each Party warrants it has the full power and authority to enter into this Agreement.
24 Exclusion of Liability
24.1 Neither Party shall have any liability to the other in connection with this Agreement for any loss of profit, loss of goodwill, loss of
opportunity or loss of reputation suffered by such other Party (whether in contract, tort or otherwise.)
24.2 In the event of the expiry or termination of this Agreement, PCH hereby waives any claim (which it may otherwise have pursuant to any
applicable legislation) for payment for any goodwill which may have inured to the benefit of the Products during the Term.
25 Force Majeure
25.1 If the ability of either party to perform its obligations hereunder is affected by national emergency war terrorism riot or civil commotion,
prohibitive governmental regulations, third party industrial dispute or any other cause beyond its reasonable control the Party affected
shall forthwith notify the other Party of the nature and extent thereof.
25.2 Neither party shall be deemed to be in breach of this Agreement or otherwise be liable to the other by reason of any delay in performance
or non-performance of any of its obligations hereunder to the extent that such delay or non-performance is due to any of the causes
referred to in Clause 25.1 hereof of which it has notified the other party and the time for performance of that obligation shall be extended
accordingly.
25.3 If the delay or non-performance in question shall extend for a continuous period in excess of three months, the parties shall enter into
bona fide discussions with a view to alleviating its effects or to agreeing upon such alternative arrangements as may be fair and
reasonable.
26. Language
26.1 This Agreement (excluding the Schedules) shall be executed in English and Russian counterparts. In the event of a conflict between
these English and the Russian texts, the English text shall prevail over the Russian.
26.2 The Schedules shall be executed in either Russian or in English and Russian. If they are executed only in Russian, any translations shall
be for information and without legal force. If they are executed in English and Russian, the English text shall prevail over the Russian in
the event of a conflict.
27. Costs
13
27.1 Each Party shall bear all its own costs incurred in the formation and execution of this Agreement.
27.2 Each Party shall bear the cost of discharging all those obligations imposed on it by the terms hereof, unless the context expressly admits
otherwise.
27.3 The Parties shall use all commercially reasonable endeavours to assist the other Party to minimize the costs which it incurs in connection
with this Agreement.
28. Confidentiality
28.1 During the Term of this Agreement, each Party will be exposed to confidential proprietary technical information belonging to the other
which pertains to the operation of the other’s business. In particular but without limitation, each Party may be exposed to know-how,
process and product information, intellectual property, methods of manufacture, business plans, sales and marketing strategies, data and
technical information pertaining to the other party (referred to in the remainder of this paragraph as “Confidential Information”). Each
Party agrees to hold in confidence and not to disclose to others or to use for its own benefit or the benefit of other members of its group
all Confidential Information which has been or will be disclosed to it either directly or indirectly and to use Confidential Information
solely in conjunction with its performance under this Agreement provided that such obligation of confidentiality and non-use does not
apply to any Confidential Information which:
(i) is already in or which comes into the possession of the non-owning party other than as a result of a breach of this Agreement;
(ii) is or becomes generally available to the public other than as a result of a disclosure by the non-owning party;
(iii) is or becomes available to the non-owning party on a non-confidential basis from a third party who is not known by the non-
owning party to be bound by a confidentiality Agreement or other obligation of secrecy to the owning party; or
(iv) is required to be disclosed by the non-owning party in the course of any legal proceedings or by any governmental or other
authority or regulatory body.
14
28.2 Upon completion or termination of this Agreement for any reason, or upon written demand, each Party agrees to deliver to the other all
tangible forms of Confidential Information belonging to the other.
Executed on this 25th day of December 2008 in Moscow, Russian Federation
By: /s/ Paul Kiesler

Name: Paul Kiesler
Position: General Director
A duly authorised representative of
Frito Lay Manufacturing Limited
By: /s/ Marina Ostrovskaya

Name: Marina Ostrovskaya
Position: General Director
A duly authorised representative of
PepsiCo Holdings Limited
15
Exhibit 12
RATIO OF EARNINGS TO FIXED CHARGES. We have calculated PBG’s ratio of earnings to fixed charges in the following table by dividing
earnings by fixed charges. For this purpose, earnings are before taxes, minority interest and cumulative effect of change in accounting
principle, plus fixed charges (excluding capitalized interest) and losses recognized from equity investments, reduced by undistributed income
from equity investments. Fixed charges include interest expense, capitalized interest and one-third of net rent which is the portion of the rent
deemed representative of the interest factor.
Ratio of Earnings to Fixed Charges

($ in millions)
Fiscal Ye ar
2008 2007 2006 2005 2004
Net income before taxes and minority interest $ 334 $ 803 $ 740 $ 772 $ 745
Undistributed (income) loss from equity investments (1) — 2 — (1)
Fixed charges excluding capitalized interest 356 343 331 288 261
Earnings as adjusted $ 689 $ 1,146 $ 1,073 $ 1,060 $ 1,005
Fixed charges:
Interest expense $ 316 $ 305 $ 298 $ 258 $ 236
Capitalized interest — — — — —
Interest portion of rental expense 40 38 33 30 25
Total fixed charges $ 356 $ 343 $ 331 $ 288 $ 261
Ratio of earnings to fixed charges 1.94 3.34 3.24 3.68 3.85
Exhibit 21
Subsidiaries of The Pepsi Bottling Group, Inc.

As of December 27, 2008
Nam e of S u bsidiary Ju risdiction

Bermuda Holdings, LLC Delaware
Bottling Group Holdings, Inc. Delaware
Bottling Group, LLC Delaware
C & I Leasing, Inc. Maryland
Gemex Holdings LLC Delaware
Gray Bern Holdings, Inc. Delaware
Grayhawk Leasing, LLC Delaware
Hillwood Bottling, LLC Delaware
International Bottlers Management Co. LLC Delaware
Luxembourg SCS Holdings, LLC Delaware
New Bern Transport Corporation Delaware
PBG Canada Holdings, Inc. Delaware
PBG Canada Holdings II, Inc. Delaware
PBG Horizon, LLC Delaware
PBG International Holdings Partnership Bermuda
PBG International Holdings Luxembourg Jayhawk, SCS Luxembourg
PBG Midwest Holding Sarl Luxembourg
PBG Michigan, LLC Delaware
PBG Mohegan Holdings Limited Gibraltar
PBG Soda Can Holdings Sarl Luxembourg
Pepsi-Cola Batavia Bottling Corporation New York
Pepsi Bottling Group Global Finance LLC Delaware
Pepsi Northwest Beverages LLC Delaware
Primrose, LLC Delaware
Woodlands Insurance Company, Inc. Vermont
The Pepsi Bottling Group (Canada), Co. Canada
PBG Investment Partnership Canada
PBG Investment (Luxembourg) Sarl Luxembourg
Pepsi Bottling Group GmbH Germany
Tanglewood Finance, Sarl Luxembourg
PRB Luxembourg Sarl Luxembourg
PRB Luxembourg International Sarl Luxembourg
KAS Anorthosis S.C.A. Luxembourg
PepsiCo IVI S.A. Greece
Page 1 of 3

PBG Beverages Ireland Limited Ireland
PBG Beverages International Limited Ireland
PR Beverages Limited Ireland
Seraldo Investments Ltd Cyprus
Sercombes Enterprises Ltd Cyprus
PR Beverages Bermuda Holding Ltd Bermuda
PBG Cyprus Holdings Limited Cyprus
Pepsi-Cola Bottling Finance B.V. The Netherlands
Pepsi-Cola Bottling Global B.V. The Netherlands
PepsiCo Holdings OOO (Russia) Russia
Pepsi-Cola Soft Drink Factory of Sochi Russia
Sobol Aqua ZAO Russia
Abechuko Inversiones, S.L. Spain
Alikate Inversiones, S.L. Spain
Bottling Group Espana, S.L. Spain
Bottling Group Servicios Centrales SL Spain
Catalana de Bebidas Carbonicas, S.L. Spain
Canguro Rojo Inversiones, S.L. Spain
Centro-Mediterreanea de Bebidas Carbonicas PepsiCo S.L. Spain
Centro-Levantina de Bebidas Carbonicas PepsiCo S.L. Spain
Compania de Bebidas PepsiCo, S.L. Spain
KAS, S.L. Spain
Mountain Dew Inversiones, S.L. Spain
Onbiso Inversiones, S.L. Spain
Enfolg Inversiones, S.L. Spain
Gatika Inversiones, S.L. Spain
Greip Inversiones, S.L. Spain
PBG Holding de Espana ETVE, S.L. Spain
Jatabe Inversiones, S.L. Spain
Jugodesalud Inversiones, S.L. Spain
Lorencito Inversiones, S.L. Spain
Manurga Inversiones, S.L. Spain
Miglioni Inversiones, S.L. Spain
Nadamas Inversiones, S.L. Spain
PBG Financiera y Promocion de Empresas, S.L. Spain
PBG Commercial SECOR, S.L. Spain
PepsiCo Ventas Andalucia, S.L. Spain
Stepplan Inversiones, S.L. Spain
Beimiguel Inversiones, S.L. Spain
Aquafina Inversiones, S.L. Spain
Wesellsoda Inversiones, S.L. Spain
Rasines Inversiones, S.L. Spain
Rebujito Inversiones, S.L. Spain
Ronkas Inversiones, S.L. Spain
Page 2 of 3

Pet-Iberia, S.L. Spain
Fruko Mesrubat Sanayii, Ltd. Sti. Turkey
PepsiCo Middle East Investments The Netherlands
Pepsi-Cola Servis Dagitim, Ltd. Sti. Turkey
Duingras Holdings, B.V. The Netherlands
Bebidas Purificadas S.R.L. Mexico
Embotelladores Del Valle de Anahuac, S.R.L. de C.V Mexico
Embotelladora de Refrescos Mexicanos S.R.L. de C.V Mexico
Embotelladora Moderna, S.R.L de C.V Mexico
Embotelladora La Isleta, S.R.L. de C.V Mexico
Embotelladores Del Bajio, S.R.L. de C.V Mexico
Finvemex, S.R.L. de C.V Mexico
Nueva Santa Cecilia, S.R.L. de C.V Mexico
Servicios Administrativos Suma, S.R.L. de C.V Mexico
Bienes Raices Metropolitanos, S.R.L. de C.V Mexico
Fomentadora Urbana Metropolitana, S.R.L. de C.V Mexico
Industria de Refrescos, S.R.L. de C.V Mexico
Bebidas Purificadas Del Sureste S.R.L. de C.V Mexico
Marketing Para Embotelladoras SRL de C.V Mexico
Procesos Plasticos S.R.L. de C.V Mexico
Inmobiliaria La Bufa, S.R.L. de C.V Mexico
Central de La Industria Escorpion S.R.L. de C.V Mexico
Fomentadora Urbana del Sureste, S.R.L. de C.V Mexico
Embotelladora Metropolitana, S.R.L. de C.V Mexico
Embotelladora Potosi, S.R.L. de C.V Mexico
Electropura, S.R.L. de C.V Mexico
Inmobiliaria Operativa S.R.L. de C.V Mexico
Embotelladora Garci-Crespo, S.R.L. de C.V Mexico
Comercializadora Vitalite, S.R.L. de C.V Mexico
Distribuidora Garci-Crespo, S.R.L. de C.V Mexico
Bebidas Purificadas Del Noreste, S.R.L. de C.V Mexico
Tenedora Del Noreste, S.R.L. de C.V Mexico
Grupo Embotellador Noreste, S.R.L. de C.V Mexico
Industria de Refrescos Del Noreste, S.R.L. de C.V Mexico
The Pepsi Bottling Group Mexico S.R.L. de C.V Mexico
Page 3 of 3
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements No. 333-60428, 333-79357, 333-79369, 333-79375, 333-79365, 333-80647,
333-69622, 333-73302, 333-100786, 333-117894, 333-128992, 333-128993, 333-142554 and 333-154250 on Form S-8 of our reports dated
February 20, 2009 relating to the consolidated financial statements and financial statement schedule of The Pepsi Bottling Group, Inc. and
subsidiaries (which report expresses an unqualified opinion and includes explanatory paragraphs referring to the Company’s adoption of
Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans –
an amendment of FASB Statements No. 87, 88, 106, and 132(R),” and Financial Accounting Standards Board Interpretation No. 48,
“Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement 109”) and the effectiveness of The Pepsi Bottling Group,
Inc. and subsidiaries internal control over financial reporting, appearing in this Annual Report on Form 10-K of The Pepsi Bottling Group, Inc.
and subsidiaries for the year ended December 27, 2008.

New York, New York
February 20, 2009
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Bottling Group, LLC and subsidiaries Registration Statements No. 333-108225 and 333-132716
on Form S-3 of our reports dated February 20, 2009 relating to the consolidated financial statements and financial statement schedule of The
Pepsi Bottling Group, Inc. and subsidiaries (which report expresses an unqualified opinion and includes explanatory paragraphs referring to
the Company’s adoption of Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and
Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and 132(R),” and Financial Accounting Standards Board
Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement 109”) and the effectiveness of The
Pepsi Bottling Group, Inc. and subsidiaries internal control over financial reporting, appearing in this Annual Report on Form 10-K of The
Pepsi Bottling Group, Inc. and subsidiaries for the year ended December 27, 2008.

New York, New York
February 20, 2009
Exhibit 24
Power of Attorney
Know all by these presents, that the undersigned hereby constitutes and appoints each of Steven M. Rapp and David Yawman, signing
singly, the undersigned’s true and lawful attorney-in-fact to execute and file on behalf of the undersigned in the undersigned’s capacity as a
Director and /or Executive Officer of The Pepsi Bottling Group, Inc. (“PBG”) all necessary and/or required applications, reports, registrations,
information, documents and instruments filed or required to be filed by the undersigned or PBG with the Securities and Exchange Commission
(“SEC”), any stock exchanges or any governmental official or agency, including without limitation:
1) execute and file any amendment or supplement to PBG’s Annual Report on Form 10-K for the year ended December 27, 2008, with all
exhibits thereto and other documents in connection therewith (the “Form 10-K”);
2) do and perform any and all acts for and on behalf of the undersigned which may be necessary or desirable to complete and execute
the Form 10-K and timely file the Form 10-K;
3) execute and file Forms 3, 4 and 5 in accordance with Section 16(a) of the Securities Exchange Act of 1934 and the rules thereunder;
any such Form 3, 4 or 5 and timely file such form;
5) execute and file Form 144 in accordance with Rule 144 of the Securities Act of 1933 and the rules thereunder;
any such Form 144 and timely file such form;
7) execute and file Registration Statements on Form S-8 under the Securities Act of 1933;
any such Registration Statements on Form S-8 and timely file such form; and
9) take any other action of any type whatsoever in connection with the foregoing, which, in the opinion of such attorney-in-fact, may be
of benefit to, in the best interest of, or legally required by, the undersigned, it being understood that the documents executed by such
attorney-in-fact on behalf of the undersigned pursuant to this Power of Attorney shall be in such form and shall contain such terms
and conditions as such attorney-in-fact may approve in such attorney-in-fact’s discretion.
The undersigned hereby grants to each such attorney-in-fact full power and authority to do and perform any and every act and thing
whatsoever requisite, necessary, or proper to be done in the exercise of any of the rights and powers herein granted, as fully to all intents and
purposes as the undersigned might or could do if personally present, with full power of substitution or revocation, hereby ratifying and
confirming all that such attorney-in-fact, or such attorney-in-fact’s substitute or substitutes, shall lawfully do or cause to be done by virtue of
this Power of Attorney and the rights and powers herein granted. Each of the attorneys-in-fact named herein shall have the power to act
hereunder with or without the other. The undersigned acknowledges that the foregoing attorneys-in-fact, in serving in such capacity at the
request of the undersigned, are not assuming, nor is PBG assuming, any of the undersigned’s responsibilities to comply with Section 16 of the
Securities Exchange Act of 1934.
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney to be executed as of February 19, 2009.
THE PEPSI BOTTLING GROUP, INC.
By: /s/ Steven M. Rapp

Steven M. Rapp
Senior Vice President, General Counsel and Secretary
S IGNATURE TITLE DATE
/s/ Eric J. Foss Chairman of the Board and Chief Executive Officer February 19, 2009
Eric J. Foss (Principal Executive Officer)
/s/Alfred H. Drewes Senior Vice President and Chief Financial Officer February 19, 2009
Alfred H. Drewes (Principal Financial Officer)
/s/ Thomas M. Lardieri Vice President and Controller February 19, 2009
Thomas M. Lardieri (Principal Accounting Officer)
/s/ Linda G. Alvarado Director February 19, 2009

Linda G. Alvarado
/s/ Barry H. Beracha Director February 19, 2009

Barry H. Beracha
/s/ John C. Compton Director February 19, 2009

John C. Compton
/s/ Ira D. Hall Director February 19, 2009

Ira D. Hall
/s/ Susan D. Kronick Director February 19, 2009

Susan D. Kronick
/s/ Blythe J. McGarvie Director February 19, 2009

Blythe J. McGarvie
/s/ John A. Quelch Director February 19, 2009

John A. Quelch
/s/ Javier G. Teruel Director February 19, 2009

Javier G. Teruel
/s/ Cynthia M. Trudell Director February 19, 2009

Cynthia M. Trudell
Exhibit 31.1
CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Eric J. Foss, certify that:

1. I have reviewed this annual report on Form 10-K of The Pepsi Bottling Group, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: February 20, 2009 /s/ Eric J. Foss

Eric J. Foss
Chairman of the Board and
Chief Executive Officer
Exhibit 31.2
CERTIFICATION
I, Alfred H. Drewes, certify that:

1. I have reviewed this annual report on Form 10-K of The Pepsi Bottling Group, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the
period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to
us by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on
such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
Date: February 20, 2009 /s/ Alfred H. Drewes

Alfred H. Drewes
Senior Vice President and
Chief Financial Officer
Exhibit 32.1
CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsection (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code),
the undersigned officer of The Pepsi Bottling Group, Inc. (the “Company”) certifies to his knowledge that:
(1) The Annual Report on Form 10-K of the Company for the year ended December 27, 2008 (the “Form 10-K”) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Act”); and
(2) The information contained in the Form 10-K fairly presents, in all material respects, the financial conditions and results of operations
of the Company as of the dates and for the periods referred to in the Form 10-K.
/s/ Eric J. Foss

Eric J. Foss
Chairman of the Board and
Chief Executive Officer
February 20, 2009
The foregoing certification (the “Certification”) is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(subsection (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
A signed original of the Certification has been provided to the Company and will be retained by the Company in accordance with Rule 12b-
11(d) of the Act and furnished to the Securities and Exchange Commission or its staff upon request.
Exhibit 32.2
CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (subsection (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code),
the undersigned officer of The Pepsi Bottling Group, Inc. (the “Company”) certifies to his knowledge that:
(1) The Annual Report on Form 10-K of the Company for the year ended December 27, 2008 (the “Form 10-K”) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Act”); and
(2) The information contained in the Form 10-K fairly presents, in all material respects, the financial conditions and results of operations
of the Company as of the dates and for the periods referred to in the Form 10-K.
/s/ Alfred H. Drewes

Alfred H. Drewes
Senior Vice President and
Chief Financial Officer
February 20, 2009
The foregoing certification (the “Certification”) is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(subsection (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code).
A signed original of the Certification has been provided to the Company and will be retained by the Company in accordance with Rule 12b-
11(d) of the Act and furnished to the Securities and Exchange Commission or its staff upon request.
Table of Contents
UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
FORM 10-K
˛ Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 27, 2008
or
o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No Fee
Required)
For the transition period from to
Commission file number 333-80361-01
Bottling Group, LLC

(Exact name of Registrant as Specified in its Charter)
Organized in Delaware 13-4042452

(State or other Jurisdiction of Incorporation or Organization) (I.R.S. Employer Identification No.)
One Pepsi Way, Somers, New York 10589

(Address of Principal Executive Offices) (Zip code)
Registrant’s telephone number, including area code: (914) 767-6000

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ˛ No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ˛
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days. Yes ˛ No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K 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. ˛
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act. (Check one):
Large accelerated filer o Accelerated filer o Non-accelerated filer ˛ Smaller reporting company o
(Do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ˛
The aggregate market value of Bottling Group, LLC Capital Stock held by non-affiliates of Bottling Group, LLC as of June 13, 2008 was $0.
Table of Contents
PART I
Item 1. Business 1
Item 1A. Risk Factors 8
Item 1B. Unresolved Staff Comments 12
Item 2. Properties 12
Item 3. Legal Proceedings 12
Item 4. Submission of Matters to a Vote of Security Holders 12
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 13
Item 6. Selected Financial Data 14
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 15
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 69
Item 8. Financial Statements and Supplementary Data 69
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 69
Item 9A(T). Controls and Procedures 69
Item 9B. Other Information 70
PART III
Item 10. Directors, Executive Officers and Corporate Governance 71
Item 11. Executive Compensation 72
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 98
Item 13. Certain Relationships and Related Transactions, and Director Independence 98
Item 14. Principal Accountant Fees and Services 100
PART IV
Item 15. Exhibits and Financial Statement Schedules 101
SIGNATURES S-1
INDEX TO FINANCIAL STATEMENT SCHEDULES F-1
INDEX TO EXHIBITS E-1

Table of Contents
PART I
ITEM 1. BUSINESS
Introduction
Bottling Group, LLC (“Bottling LLC”) is the principal operating subsidiary of The Pepsi Bottling Group, Inc. (“PBG”) and consists of
substantially all of the operations and assets of PBG. Bottling LLC, which is fully consolidated by PBG, consists of bottling operations located
in the United States, Canada, Spain, Greece, Russia, Turkey and Mexico. Prior to its formation, Bottling LLC was an operating unit of PepsiCo,
Inc. (“PepsiCo”). When used in this Report, “Bottling LLC,” “we,” “us,” “our” and the “Company” each refers to Bottling Group, LLC and,
where appropriate, its subsidiaries.
PBG was incorporated in Delaware in January, 1999, as a wholly owned subsidiary of PepsiCo to effect the separation of most of PepsiCo’s
company-owned bottling businesses. PBG became a publicly traded company on March 31, 1999. As of January 23, 2009, PepsiCo’s ownership
represented 33.1% of the outstanding common stock and 100% of the outstanding Class B common stock, together representing 40.2% of the
voting power of all classes of PBG’s voting stock.
PepsiCo and PBG contributed bottling businesses and assets used in the bottling business to Bottling LLC in connection with the
formation of Bottling LLC. As result of the contributions of assets and other subsequent transactions, PBG owns 93.4% of Bottling LLC and
PepsiCo owns the remaining 6.6% as of December 27, 2008.
We operate in one industry, carbonated soft drinks and other ready-to-drink beverages, and all of our segments derive revenue from these
products. We conduct business in all or a portion of the United States, Mexico, Canada, Spain, Russia, Greece and Turkey. Bottling LLC
manages and reports operating results through three reportable segments: U.S. & Canada, Europe (which includes Spain, Russia, Greece and
Turkey) and Mexico. Operationally, the Company is organized along geographic lines with specific regional management teams having
responsibility for the financial results in each reportable segment.
In 2008, approximately 75% of our net revenues were generated in the U.S. & Canada, 15% of our net revenues were generated in Europe,
and the remaining 10% of our net revenues were generated in Mexico. See “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and Note 13 in the Notes to Consolidated Financial Statements for additional information regarding the business
and operating results of our reportable segments.
Principal Products
We are the world’s largest manufacturer, seller and distributor of Pepsi-Cola beverages. In addition, in some of our territories we have the
right to manufacture, sell and distribute soft drink products of companies other than PepsiCo, including Dr Pepper, Crush and Squirt. We also
have the right in some of our territories to manufacture, sell and distribute beverages under trademarks that we own, including Electropura, e-
pura and Garci Crespo. The majority of our volume is derived from brands licensed from PepsiCo or PepsiCo joint ventures.
We have the exclusive right to manufacture, sell and distribute Pepsi-Cola beverages in all or a portion of 42 states and the District of
Columbia in the United States, nine Canadian provinces, Spain, Greece, Russia, Turkey and 23 states in Mexico.
In 2008, approximately 74% of our sales volume in the U.S. & Canada was derived from carbonated soft drinks and the remaining 26% was
derived from non-carbonated beverages, 69% of our sales volume in Europe was derived from carbonated soft drinks and the remaining 31%
was derived from non-carbonated beverages, and 52% of our Mexico sales volume was derived from carbonated soft drinks and the remaining
48% was derived from non-carbonated beverages. Our principal beverage brands include the following:
U.S. & Canada

Pepsi Sierra Mist Lipton
Diet Pepsi Sierra Mist Free SoBe
Diet Pepsi Max Aquafina SoBe No Fear
Wild Cherry Pepsi Aquafina FlavorSplash SoBe Life Water
Pepsi Lime G2 from Gatorade Starbucks Frappuccino®
Pepsi ONE Propel Dole
Mountain Dew Crush Muscle Milk
Diet Mountain Dew Tropicana juice drinks
AMP Mug Root Beer
Mountain Dew Code Red Trademark Dr Pepper
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Europe
Pepsi Tropicana Fruko
Pepsi Light Aqua Minerale Yedigun
Pepsi Max Mirinda Tamek
7UP IVI Lipton
KAS Fiesta
Mexico
Pepsi Mirinda Electropura
Pepsi Light Manzanita Sol e-pura
7UP Squirt Jarritos
KAS Garci Crespo
Belight Aguas Frescas
No individual customer accounted for 10% or more of our total revenues in 2008, although sales to Wal-Mart Stores, Inc. and its affiliated
companies were 9.9% of our revenues in 2008, primarily as a result of transactions in the U.S. & Canada segment. We have an extensive direct
store distribution system in the United States, Canada and Mexico. In Europe, we use a combination of direct store distribution and
distribution through wholesalers, depending on local marketplace considerations.
Raw Materials and Other Supplies

We purchase the concentrates to manufacture Pepsi-Cola beverages and other beverage products from PepsiCo and other beverage
companies.
In addition to concentrates, we purchase various ingredients, packaging materials and energy such as sweeteners, glass and plastic bottles,
cans, closures, syrup containers, other packaging materials, carbon dioxide, some finished goods, electricity, natural gas and motor fuel. We
generally purchase our raw materials, other than concentrates, from multiple suppliers. PepsiCo acts as our agent for the purchase of such raw
materials in the United States and Canada and, with respect to some of our raw materials, in certain of our international markets. The Pepsi
beverage agreements, as described below, provide that, with respect to the beverage products of PepsiCo, all authorized containers, closures,
cases, cartons and other packages and labels may be purchased only from manufacturers approved by PepsiCo. There are no materials or
supplies used by PBG that are currently in short supply. The supply or cost of specific materials could be adversely affected by various
factors, including price changes, economic conditions, strikes, weather conditions and governmental controls.
Franchise and Venture Agreements

We conduct our business primarily under agreements with PepsiCo. Although Bottling LLC is not a direct party to these agreements as the
principal operating subsidiary of PBG, Bottling LLC enjoys certain rights and is subject to certain obligations as described below. These
agreements give us the exclusive right to market, distribute, and produce beverage products of PepsiCo in authorized containers and to use
the related trade names and trademarks in specified territories.
Set forth below is a description of the Pepsi beverage agreements and other bottling agreements from which we benefit and under which we
are obligated as the principal operating subsidiary.
Terms of the Master Bottling Agreement. The Master Bottling Agreement under which we manufacture, package, sell and distribute the cola
beverages bearing the Pepsi-Cola and Pepsi trademarks in the United States was entered into in March of 1999. The Master Bottling
Agreement gives us the exclusive and perpetual right to distribute cola beverages for sale in specified territories in authorized containers of
the nature currently used by us. The Master Bottling Agreement provides that we will purchase our entire requirements of concentrates for the
cola beverages from PepsiCo at prices, and on terms and conditions, determined from time to time by PepsiCo. PepsiCo may determine from
time to time what types of containers to authorize for use by us. PepsiCo has no rights under the Master Bottling Agreement with respect to
the prices at which we sell our products.
Under the Master Bottling Agreement we are obligated to:
(1) maintain such plant and equipment, staff, distribution facilities and vending equipment that are capable of manufacturing, packaging,
and distributing the cola beverages in sufficient quantities to fully meet the demand for these beverages in our territories;
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(2) undertake adequate quality control measures prescribed by PepsiCo;

(3) push vigorously the sale of the cola beverages in our territories;
(4) increase and fully meet the demand for the cola beverages in our territories;
(5) use all approved means and spend such funds on advertising and other forms of marketing beverages as may be reasonably required to
push vigorously the sale of cola beverages in our territories; and
(6) maintain such financial capacity as may be reasonably necessary to assure performance under the Master Bottling Agreement by us.
The Master Bottling Agreement requires us to meet annually with PepsiCo to discuss plans for the ensuing year and the following two
years. At such meetings, we are obligated to present plans that set out in reasonable detail our marketing plan, our management plan and
advertising plan with respect to the cola beverages for the year. We must also present a financial plan showing that we have the financial
capacity to perform our duties and obligations under the Master Bottling Agreement for that year, as well as sales, marketing, advertising and
capital expenditure plans for the two years following such year. PepsiCo has the right to approve such plans, which approval shall not be
unreasonably withheld. In 2008, PepsiCo approved our plans.
If we carry out our annual plan in all material respects, we will be deemed to have satisfied our obligations to push vigorously the sale of the
cola beverages, increase and fully meet the demand for the cola beverages in our territories and maintain the financial capacity required under
the Master Bottling Agreement. Failure to present a plan or carry out approved plans in all material respects would constitute an event of
default that, if not cured within 120 days of notice of the failure, would give PepsiCo the right to terminate the Master Bottling Agreement.
If we present a plan that PepsiCo does not approve, such failure shall constitute a primary consideration for determining whether we have
satisfied our obligations to maintain our financial capacity, push vigorously the sale of the cola beverages and increase and fully meet the
demand for the cola beverages in our territories.
If we fail to carry out our annual plan in all material respects in any segment of our territory, whether defined geographically or by type of
market or outlet, and if such failure is not cured within six months of notice of the failure, PepsiCo may reduce the territory covered by the
Master Bottling Agreement by eliminating the territory, market or outlet with respect to which such failure has occurred.
PepsiCo has no obligation to participate with us in advertising and marketing spending, but it may contribute to such expenditures and
undertake independent advertising and marketing activities, as well as cooperative advertising and sales promotion programs that would
require our cooperation and support. Although PepsiCo has advised us that it intends to continue to provide cooperative advertising funds, it
is not obligated to do so under the Master Bottling Agreement.
The Master Bottling Agreement provides that PepsiCo may in its sole discretion reformulate any of the cola beverages or discontinue them,
with some limitations, so long as all cola beverages are not discontinued. PepsiCo may also introduce new beverages under the Pepsi-Cola
trademarks or any modification thereof. When that occurs, we are obligated to manufacture, package, distribute and sell such new beverages
with the same obligations as then exist with respect to other cola beverages. We are prohibited from producing or handling cola products,
other than those of PepsiCo, or products or packages that imitate, infringe or cause confusion with the products, containers or trademarks of
PepsiCo. The Master Bottling Agreement also imposes requirements with respect to the use of PepsiCo’s trademarks, authorized containers,
packaging and labeling.
If we acquire control, directly or indirectly, of any bottler of cola beverages, we must cause the acquired bottler to amend its bottling
appointments for the cola beverages to conform to the terms of the Master Bottling Agreement. Under the Master Bottling Agreement,
PepsiCo has agreed not to withhold approval for any acquisition of rights to manufacture and sell Pepsi trademarked cola beverages within a
specific area — currently representing approximately 10.63% of PepsiCo’s U.S. bottling system in terms of volume — if we have successfully
negotiated the acquisition and, in PepsiCo’s reasonable judgment, satisfactorily performed our obligations under the Master Bottling
Agreement. We have agreed not to acquire or attempt to acquire any rights to manufacture and sell Pepsi trademarked cola beverages outside
of that specific area without PepsiCo’s prior written approval.
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The Master Bottling Agreement is perpetual, but may be terminated by PepsiCo in the event of our default. Events of default include:
(1) PBG’s insolvency, bankruptcy, dissolution, receivership or the like;
(2) any disposition of any voting securities of one of our bottling subsidiaries or substantially all of our bottling assets without the
consent of PepsiCo;
(3) PBG’s entry into any business other than the business of manufacturing, selling or distributing non-alcoholic beverages or any
business which is directly related and incidental to such beverage business; and
(4) any material breach under the contract that remains uncured for 120 days after notice by PepsiCo.
An event of default will also occur if any person or affiliated group acquires any contract, option, conversion privilege, or other right to
acquire, directly or indirectly, beneficial ownership of more than 15% of any class or series of PBG’s voting securities without the consent of
PepsiCo. As of February 13, 2009, to our knowledge, no shareholder of PBG, other than PepsiCo, held more than 5% of PBG’s common stock.
We are prohibited from assigning, transferring or pledging the Master Bottling Agreement, or any interest therein, whether voluntarily, or
by operation of law, including by merger or liquidation, without the prior consent of PepsiCo.
The Master Bottling Agreement was entered into by PBG in the context of our separation from PepsiCo and, therefore, its provisions were
not the result of arm’s-length negotiations. Consequently, the agreement contains provisions that are less favorable to us than the exclusive
bottling appointments for cola beverages currently in effect for independent bottlers in the United States.
Terms of the Non-Cola Bottling Agreements. The beverage products covered by the non-cola bottling agreements are beverages licensed
to PBG by PepsiCo, including Mountain Dew, Aquafina, Sierra Mist, Diet Mountain Dew, Mug Root Beer and Mountain Dew Code Red. The
non-cola bottling agreements contain provisions that are similar to those contained in the Master Bottling Agreement with respect to pricing,
territorial restrictions, authorized containers, planning, quality control, transfer restrictions, term and related matters. PBG’s non-cola bottling
agreements will terminate if PepsiCo terminates PBG’s Master Bottling Agreement. The exclusivity provisions contained in the non-cola
bottling agreements would prevent us from manufacturing, selling or distributing beverage products that imitate, infringe upon, or cause
confusion with, the beverage products covered by the non-cola bottling agreements. PepsiCo may also elect to discontinue the manufacture,
sale or distribution of a non-cola beverage and terminate the applicable non-cola bottling agreement upon six months notice to us.
Terms of Certain Distribution Agreements. PBG also has agreements with PepsiCo granting us exclusive rights to distribute AMP and Dole
in all of PBG’s territories, SoBe in certain specified territories and Gatorade and G2 in certain specified channels. The distribution agreements
contain provisions generally similar to those in the Master Bottling Agreement as to use of trademarks, trade names, approved containers and
labels and causes for termination. PBG also has the right to sell Tropicana juice drinks in the United States and Canada, Tropicana juices in
Russia and Spain, and Gatorade in Spain, Greece and Russia and in certain limited channels of distribution in the United States and Canada.
Some of these beverage agreements have limited terms and, in most instances, prohibit us from dealing in similar beverage products.
Terms of the Master Syrup Agreement. The Master Syrup Agreement grants PBG the exclusive right to manufacture, sell and distribute
fountain syrup to local customers in PBG’s territories. We have agreed to act as a manufacturing and delivery agent for national accounts
within PBG’s territories that specifically request direct delivery without using a middleman. In addition, PepsiCo may appoint PBG to
manufacture and deliver fountain syrup to national accounts that elect delivery through independent distributors. Under the Master Syrup
Agreement, PBG has the exclusive right to service fountain equipment for all of the national account customers within our territories. The
Master Syrup Agreement provides that the determination of whether an account is local or national is at the sole discretion of PepsiCo.
The Master Syrup Agreement contains provisions that are similar to those contained in the Master Bottling Agreement with respect to
concentrate pricing, territorial restrictions with respect to local customers and national customers electing direct-to-store delivery only,
planning, quality control, transfer restrictions and related matters. The Master Syrup Agreement had an initial term of five years which expired
in 2004 and was renewed for an additional five-year period. The Master Syrup Agreement will automatically renew for additional five-year
periods, unless PepsiCo terminates it for cause. PepsiCo has the right to terminate the Master Syrup Agreement without cause at any time
upon twenty-four months notice. In the event PepsiCo terminates the Master Syrup Agreement without cause, PepsiCo is required to pay PBG
the fair market value of PBG’s rights thereunder.
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Our Master Syrup Agreement will terminate if PepsiCo terminates our Master Bottling Agreement.
Terms of Other U.S. Bottling Agreements. The bottling agreements between PBG and other licensors of beverage products, including Dr
Pepper Snapple Group for Dr Pepper, Crush, Schweppes, Canada Dry, Hawaiian Punch and Squirt, the Pepsi/Lipton Tea Partnership for Lipton
Brisk and Lipton Iced Tea, and the North American Coffee Partnership for Starbucks Frappuccino®, contain provisions generally similar to
those in the Master Bottling Agreement as to use of trademarks, trade names, approved containers and labels, sales of imitations and causes
for termination. Some of these beverage agreements have limited terms and, in most instances, prohibit us from dealing in similar beverage
products.
Terms of the Country-Specific Bottling Agreements. The country-specific bottling agreements contain provisions generally similar to those
contained in the Master Bottling Agreement and the non-cola bottling agreements and, in Canada, the Master Syrup Agreement with respect
to authorized containers, planning, quality control, transfer restrictions, term, causes for termination and related matters. These bottling
agreements differ from the Master Bottling Agreement because, except for Canada, they include both fountain syrup and non-fountain
beverages. Certain of these bottling agreements contain provisions that have been modified to reflect the laws and regulations of the
applicable country. For example, the bottling agreements in Spain do not contain a restriction on the sale and shipment of Pepsi-Cola
beverages into our territory by others in response to unsolicited orders. In addition, in Mexico and Turkey we are restricted in our ability to
manufacture, sell and distribute beverages sold under non-PepsiCo trademarks.
Terms of the Russia Venture Agreement. In 2007, PBG together with PepsiCo formed PR Beverages Limited (“PR Beverages”), a venture that
enables us to strategically invest in Russia to accelerate our growth. PBG contributed its business in Russia to PR Beverages, and PepsiCo
entered into bottling agreements with PR Beverages for PepsiCo beverage products sold in Russia on the same terms as in effect for PBG
immediately prior to the venture. PepsiCo also granted PR Beverages an exclusive license to manufacture and sell the concentrate for such
products.
Terms of Russia Snack Food Distribution Agreement. Effective January 2009, PR Beverages entered into an agreement with Frito-Lay
Manufacturing, LLC (“FLM”), a wholly owned subsidiary of PepsiCo, pursuant to which PR Beverages purchases Frito-Lay snack products
from FLM for sale and distribution in the Russian Federation. This agreement provides FLM access to the infrastructure of PBG’s distribution
network in Russia and allows PBG to more effectively utilize some of its distribution network assets. This agreement replaced a similar
agreement, which expired on December 31, 2008.
Seasonality
Sales of our products are seasonal, particularly in our Europe segment, where sales volumes tend to be more sensitive to weather
conditions. Our peak season across all of our segments is the warm summer months beginning in May and ending in September. In 2008,
approximately 50% of our volume was generated during the second and third quarters and approximately 80% of cash flow from operations
was generated in the third and fourth quarters.
Competition
The carbonated soft drink market and the non-carbonated beverage market are highly competitive. Our competitors in these markets include
bottlers and distributors of nationally advertised and marketed products, bottlers and distributors of regionally advertised and marketed
products, as well as bottlers of private label soft drinks sold in chain stores. Among our major competitors are bottlers that distribute products
from The Coca-Cola Company including Coca-Cola Enterprises Inc., Coca-Cola Hellenic Bottling Company S.A., Coca-Cola FEMSA S.A. de
C.V. and Coca-Cola Bottling Co. Consolidated. Our market share for carbonated soft drinks sold under trademarks owned by PepsiCo in our
U.S. territories ranges from approximately 21% to approximately 41%. Our market share for carbonated soft drinks sold under trademarks
owned by PepsiCo for each country outside the United States in which we do business is as follows: Canada 44%; Russia 21%; Turkey 17%;
Spain 10% and Greece 10% (including market share for our IVI brand). In addition, market share for our territories and the territories of other
Pepsi bottlers in Mexico is 18% for carbonated soft drinks sold under trademarks owned by PepsiCo. All market share figures are based on
generally available data published by third parties. Actions by our major competitors and others in the beverage industry, as well as the
general economic environment, could have an impact on our future market share.
We compete primarily on the basis of advertising and marketing programs to create brand awareness, price and promotions, retail space
management, customer service, consumer points of access, new products, packaging innovations and distribution methods. We believe that
brand recognition, market place pricing, consumer value, customer service, availability and consumer and customer goodwill are primary
factors affecting our competitive position.
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Governmental Regulation Applicable to Bottling LLC

Our operations and properties are subject to regulation by various federal, state and local governmental entities and agencies in the United
States as well as foreign governmental entities and agencies in Canada, Spain, Greece, Russia, Turkey and Mexico. As a producer of food
products, we are subject to production, packaging, quality, labeling and distribution standards in each of the countries where we have
operations, including, in the United States, those of the Federal Food, Drug and Cosmetic Act and the Public Health Security and Bioterrorism
Preparedness and Response Act. The operations of our production and distribution facilities are subject to laws and regulations relating to the
protection of our employees’ health and safety and the environment in the countries in which we do business. In the United States, we are
subject to the laws and regulations of various governmental entities, including the Department of Labor, the Environmental Protection Agency
and the Department of Transportation, and various federal, state and local occupational, labor and employment and environmental laws. These
laws and regulations include the Occupational Safety and Health Act, the Clean Air Act, the Clean Water Act, the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Superfund Amendments and
Reauthorization Act, the Federal Motor Carrier Safety Act and the Fair Labor Standards Act.
We believe that our current legal, operational and environmental compliance programs are adequate and that we are in substantial
compliance with applicable laws and regulations of the countries in which we do business. We do not anticipate making any material
expenditures in connection with environmental remediation and compliance. However, compliance with, or any violation of, future laws or
regulations could require material expenditures by us or otherwise have a material adverse effect on our business, financial condition or results
of operations.
Bottle and Can Legislation. Legislation has been enacted in certain U.S. states and Canadian provinces where we operate that generally
prohibits the sale of certain beverages in non-refillable containers unless a deposit or levy is charged for the container. These include
California, Connecticut, Delaware, Hawaii, Iowa, Maine, Massachusetts, Michigan, New York, Oregon, West Virginia, British Columbia,
Alberta, Saskatchewan, Manitoba, New Brunswick, Nova Scotia and Quebec. Legislation prohibited the sale of carbonated beverages in non-
refillable containers in Prince Edwards Islands in 2007, but this law was repealed in May 2008.
Massachusetts and Michigan have statutes that require us to pay all or a portion of unclaimed container deposits to the state and
Connecticut has enacted a similar statute effective in 2009. Hawaii and California impose a levy on beverage containers to fund a waste
recovery system.
In addition to the Canadian deposit legislation described above, Ontario, Canada currently has a regulation requiring that at least 30% of all
soft drinks sold in Ontario be bottled in refillable containers.
The European Commission issued a packaging and packing waste directive that was incorporated into the national legislation of most
member states. This has resulted in targets being set for the recovery and recycling of household, commercial and industrial packaging waste
and imposes substantial responsibilities upon bottlers and retailers for implementation. Similar legislation has been enacted in Turkey.
Mexico adopted legislation regulating the disposal of solid waste products. In response to this legislation, PBG Mexico maintains
agreements with local and federal Mexican governmental authorities as well as with civil associations, which require PBG Mexico, and other
participating bottlers, to provide for collection and recycling of certain minimum amounts of plastic bottles.
We are not aware of similar material legislation being enacted in any other areas served by us. The recent economic downturn has resulted
in reduced tax revenue for many states and has increased the need for some states to identify new revenue sources. Some states may pursue
additional revenue through new or amended bottle and can legislation. We are unable to predict, however, whether such legislation will be
enacted or what impact its enactment would have on our business, financial condition or results of operations.
Soft Drink Excise Tax Legislation. Specific soft drink excise taxes have been in place in certain states for several years. The states in which
we operate that currently impose such a tax are West Virginia and Arkansas and, with respect to fountain syrup only, Washington.
Value-added taxes on soft drinks vary in our territories located in Canada, Spain, Greece, Russia, Turkey and Mexico, but are consistent
with the value-added tax rate for other consumer products. In addition, there is a special consumption tax applicable to cola products in
Turkey. In Mexico, bottled water in containers over 10.1 liters are exempt from value-added tax, and we obtained a tax exemption for containers
holding less than 10.1 liters of water. The tax exemption currently also applies to non-carbonated soft drinks.
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We are not aware of any material soft drink taxes that have been enacted in any other market served by us. The recent economic downturn
has resulted in reduced tax revenue for many states and has increased the need for some states to identify new revenue sources. Some states
may pursue additional revenue through new or amended soft drink or similar excise tax legislation. We are unable to predict, however, whether
such legislation will be enacted or what impact its enactment would have on our business, financial condition or results of operations.
Trade Regulation. As a manufacturer, seller and distributor of bottled and canned soft drink products of PepsiCo and other soft drink
manufacturers in exclusive territories in the United States and internationally, we are subject to antitrust and competition laws. Under the Soft
Drink Interbrand Competition Act, soft drink bottlers operating in the United States, such as us, may have an exclusive right to manufacture,
distribute and sell a soft drink product in a geographic territory if the soft drink product is in substantial and effective competition with other
products of the same class in the same market or markets. We believe that there is such substantial and effective competition in each of the
exclusive geographic territories in which we operate.
School Sales Legislation; Industry Guidelines. In 2004, the U.S. Congress passed the Child Nutrition Act, which required school districts
to implement a school wellness policy by July 2006. In May 2006, members of the American Beverage Association, the Alliance for a Healthier
Generation, the American Heart Association and The William J. Clinton Foundation entered into a memorandum of understanding that sets
forth standards for what beverages can be sold in elementary, middle and high schools in the United States (the “ABA Policy”). Also, the
beverage associations in the European Union and Canada have recently issued guidelines relating to the sale of beverages in schools. We
intend to comply fully with the ABA Policy and these guidelines. In addition, legislation has been proposed in Mexico that would restrict the
sale of certain high-calorie products, including soft drinks, in schools and that would require these products to include a label that warns
consumers that consumption abuse may lead to obesity.
California Carcinogen and Reproductive Toxin Legislation. A California law requires that any person who exposes another to a
carcinogen or a reproductive toxin must provide a warning to that effect. Because the law does not define quantitative thresholds below which
a warning is not required, virtually all manufacturers of food products are confronted with the possibility of having to provide warnings due to
the presence of trace amounts of defined substances. Regulations implementing the law exempt manufacturers from providing the required
warning if it can be demonstrated that the defined substances occur naturally in the product or are present in municipal water used to
manufacture the product. We have assessed the impact of the law and its implementing regulations on our beverage products and have
concluded that none of our products currently requires a warning under the law. We cannot predict whether or to what extent food industry
efforts to minimize the law’s impact on food products will succeed. We also cannot predict what impact, either in terms of direct costs or
diminished sales, imposition of the law may have.
Mexican Water Regulation. In Mexico, we pump water from our own wells and we purchase water directly from municipal water companies
pursuant to concessions obtained from the Mexican government on a plant-by-plant basis. The concessions are generally for ten-year terms
and can generally be renewed by us prior to expiration with minimal cost and effort. Our concessions may be terminated if, among other things,
(a) we use materially more water than permitted by the concession, (b) we use materially less water than required by the concession, (c) we fail
to pay for the rights for water usage or (d) we carry out, without governmental authorization, any material construction on or improvement to,
our wells. Our concessions generally satisfy our current water requirements and we believe that we are generally in compliance in all material
respects with the terms of our existing concessions.
Employees
As of December 27, 2008, we employed approximately 66,800 workers, of whom approximately 32,700 were employed in the United States.
Approximately 8,700 of our workers in the United States are union members and approximately 16,200 of our workers outside the United States
are union members. We consider relations with our employees to be good and have not experienced significant interruptions of operations due
to labor disagreements.
Available Information
PBG has made available, free of charge, the following governance materials on its website at www.pbg.com under Investor Relations —
Company Information — Corporate Governance: PBG’s Certificate of Incorporation, PBG’s Bylaws, PBG’s Corporate Governance Principles
and Practices, PBG’s Worldwide Code of Conduct (including any amendment thereto), PBG’s Director Independence Policy, PBG’s Audit and
Affiliated Transactions Committee Charter, PBG’s Compensation and Management Development Committee Charter, PBG’s Nominating and
Corporate Governance Committee Charter, PBG’s Disclosure Committee Charter and PBG’s Policy and Procedures Governing Related-Person
Transactions. These governance materials are available in print, free of charge, to any PBG shareholder upon request.
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Financial Information on Industry Segments and Geographic Areas

products. We have three reportable segments: U.S. & Canada, Europe (which includes Spain, Russia, Greece and Turkey) and Mexico.
Operationally, the Company is organized along geographic lines with specific regional management teams having responsibility for the
financial results in each reportable segment.
For additional information, see Note 13 in the Notes to Consolidated Financial Statements included in Item 7 below.
ITEM 1A. RISK FACTORS

Our business and operations entail a variety of risks and uncertainties, including those described below.
We may not be able to respond successfully to consumer trends related to carbonated and non-carbonated beverages.
Consumer trends with respect to the products we sell are subject to change. Consumers are seeking increased variety in their beverages,
and there is a growing interest among the public regarding the ingredients in our products, the attributes of those ingredients and health and
wellness issues generally. This interest has resulted in a decline in consumer demand for carbonated soft drinks and an increase in consumer
demand for products associated with health and wellness, such as water, enhanced water, teas and certain other non-carbonated beverages.
Consumer preferences may change due to a variety of other factors, including the aging of the general population, changes in social trends,
the real or perceived impact the manufacturing of our products has on the environment, changes in consumer demographics, changes in travel,
vacation or leisure activity patterns or a downturn in economic conditions. Any of these changes may reduce consumers’ demand for our
products. For example, the recent downturn in economic conditions has adversely impacted sales of certain of our higher margin products,
including our products sold for immediate consumption in restaurants.
Because we rely mainly on PepsiCo to provide us with the products we sell, if PepsiCo fails to develop innovative products and packaging
that respond to consumer trends, we could be put at a competitive disadvantage in the marketplace and our business and financial results
could be adversely affected. In addition, PepsiCo is under no obligation to provide us distribution rights to all of its products in all of the
channels in which we operate. If we are unable to enter into agreements with PepsiCo to distribute innovative products in all of these channels
or otherwise gain broad access to products that respond to consumer trends, we could be put at a competitive disadvantage in the
marketplace and our business and financial results could be adversely affected.
We may not be able to respond successfully to the demands of our largest customers.
Our retail customers are consolidating, leaving fewer customers with greater overall purchasing power and, consequently, greater influence
over our pricing, promotions and distribution methods. Because we do not operate in all markets in which these customers operate, we must
rely on PepsiCo and other Pepsi bottlers to service such customers outside of our markets. The inability of PepsiCo or Pepsi bottlers as a
whole, to meet the product, packaging and service demands of our largest customers could lead to a loss or decrease in business from such
customers and have a material adverse effect on our business and financial results.
Our business requires a significant supply of raw materials and energy, the limited availability or increased costs of which could adversely
affect our business and financial results.
The production and distribution of our beverage products is highly dependent on certain ingredients, packaging materials, other raw
materials, and energy. To produce our products, we require significant amounts of ingredients, such as beverage concentrate and high
fructose corn syrup, as well as access to significant amounts of water. We also require significant amounts of packaging materials, such as
aluminum and plastic bottle components, such as resin (a petroleum-based product). In addition, we use a significant amount of electricity,
natural gas, motor fuel and other energy sources to operate our fleet of trucks and our bottling plants.
If the suppliers of our ingredients, packaging materials, other raw materials or energy are impacted by an increased demand for their
products, business downturn, weather conditions (including those related to climate change), natural disasters, governmental regulation,
terrorism, strikes or other events, and we are not able to effectively obtain the products from another supplier, we could incur an interruption in
the supply of such products or increased costs of such products. Any sustained interruption in the supply of our ingredients, packaging
materials, other raw materials or energy, or increased costs thereof, could have a material adverse effect on our business and financial results.
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The prices of some of our ingredients, packaging materials, other raw materials and energy, including high fructose corn syrup and motor
fuel, are experiencing unprecedented volatility, which can unpredictably and substantially increase our costs. We have implemented a hedging
strategy to better predict our costs of some of these products. In a volatile market, however, such strategy includes a risk that, during a
particular period of time, market prices fall below our hedged price and we pay higher than market prices for certain products. As a result,
under certain circumstances, our hedging strategy may increase our overall costs.
If there is a significant or sustained increase in the costs of our ingredients, packaging materials, other raw materials or energy, and we are
unable to pass the increased costs on to our customers in the form of higher prices, there could be a material adverse effect on our business
Changes in the legal and regulatory environment, including those related to climate change, could increase our costs or liabilities or impact
the sale of our products.
Our operations and properties are subject to regulation by various federal, state and local governmental entities and agencies as well as
foreign governmental entities. Such regulations relate to, among other things, food and drug laws, competition laws, labor laws, taxation
requirements (including soft drink or similar excise taxes), bottle and can legislation (see above under “Governmental Regulation Applicable to
Bottling LLC”), accounting standards and environmental laws.
There is also a growing consensus that emissions of greenhouse gases are linked to global climate change, which may result in more
regional, federal and/or global legal and regulatory requirements to reduce or mitigate the effects of greenhouse gases. Until any such
requirements come into effect, it is difficult to predict their impact on our business or financial results, including any impact on our supply
chain costs. In the interim, we are working to improve our systems to record baseline data and monitor our greenhouse gas emissions and,
during the process of developing our business strategies, we consider the impact our plans may have on the environment.
We cannot assure you that we have been or will at all times be in compliance with all regulatory requirements or that we will not incur
material costs or liabilities in connection with existing or new regulatory requirements, including those related to climate change.
PepsiCo’s equity ownership of PBG could affect matters concerning us.

As of January 23, 2009, PepsiCo owned approximately 40.2% of the combined voting power of PBG’s voting stock (with the balance owned
by the public). PepsiCo will be able to significantly affect the outcome of PBG’s shareholder votes, thereby affecting matters concerning us.
Because we depend upon PepsiCo to provide us with concentrate, certain funding and various services, changes in our relationship with
PepsiCo could adversely affect our business and financial results.
We conduct our business primarily under beverage agreements with PepsiCo. If our beverage agreements with PepsiCo are terminated for
any reason, it would have a material adverse effect on our business and financial results. These agreements provide that we must purchase all
of the concentrate for such beverages at prices and on other terms which are set by PepsiCo in its sole discretion. Any significant concentrate
price increases could materially affect our business and financial results.
PepsiCo has also traditionally provided bottler incentives and funding to its bottling operations. PepsiCo does not have to maintain or
continue these incentives or funding. Termination or decreases in bottler incentives or funding levels could materially affect our business and
financial results.
Under our shared services agreement, we obtain various services from PepsiCo, including procurement of raw materials and certain
administrative services. If any of the services under the shared services agreement were terminated, we would have to obtain such services on
our own. This could result in a disruption of such services, and we might not be able to obtain these services on terms, including cost, that are
as favorable as those we receive through PepsiCo.
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We may have potential conflicts of interest with PepsiCo, which could result in PepsiCo’s objectives being favored over our objectives.
Our past and ongoing relationship with PepsiCo could give rise to conflicts of interests. In addition, two members of PBG’s Board of
Directors are executive officers of PepsiCo, and one of the three Managing Directors of Bottling LLC is an officer of PepsiCo, a situation which
may create conflicts of interest.
These potential conflicts include balancing the objectives of increasing sales volume of PepsiCo beverages and maintaining or increasing
our profitability. Other possible conflicts could relate to the nature, quality and pricing of services or products provided to us by PepsiCo or
by us to PepsiCo.
Conflicts could also arise in the context of our potential acquisition of bottling territories and/or assets from PepsiCo or other independent
Pepsi bottlers. Under our Master Bottling Agreement with PepsiCo, we must obtain PepsiCo’s approval to acquire any independent Pepsi
bottler. PepsiCo has agreed not to withhold approval for any acquisition within agreed-upon U.S. territories if we have successfully negotiated
the acquisition and, in PepsiCo’s reasonable judgment, satisfactorily performed our obligations under the Master Bottling Agreement. We
have agreed not to attempt to acquire any independent Pepsi bottler outside of those agreed-upon territories without PepsiCo’s prior written
approval.
Our acquisition strategy may be limited by our ability to successfully integrate acquired businesses into ours or our failure to realize our
expected return on acquired businesses.
We intend to continue to pursue acquisitions of bottling assets and territories from PepsiCo’s independent bottlers. The success of our
acquisition strategy may be limited because of unforeseen costs and complexities. We may not be able to acquire, integrate successfully or
manage profitably additional businesses without substantial costs, delays or other difficulties. Unforeseen costs and complexities may also
prevent us from realizing our expected rate of return on an acquired business. Any of the foregoing could have a material adverse effect on our
We may not be able to compete successfully within the highly competitive carbonated and non-carbonated beverage markets.
The carbonated and non-carbonated beverage markets are highly competitive. Competitive pressures in our markets could cause us to
reduce prices or forego price increases required to off-set increased costs of raw materials and fuel, increase capital and other expenditures, or
lose market share, any of which could have a material adverse effect on our business and financial results.
If we are unable to fund our substantial capital requirements, it could cause us to reduce our planned capital expenditures and could result in
a material adverse effect on our business and financial results.
We require substantial capital expenditures to implement our business plans. If we do not have sufficient funds or if we are unable to obtain
financing in the amounts desired or on acceptable terms, we may have to reduce our planned capital expenditures, which could have a material
adverse effect on our business and financial results.
The level of our indebtedness could adversely affect our financial health.
The level of our indebtedness requires us to dedicate a substantial portion of our cash flow from operations to payments on our debt. This
could limit our flexibility in planning for, or reacting to, changes in our business and place us at a competitive disadvantage compared to
competitors that have less debt. Our indebtedness also exposes us to interest rate fluctuations, because the interest on some of our
indebtedness is at variable rates, and makes us vulnerable to general adverse economic and industry conditions. All of the above could make
it more difficult for us, or make us unable to satisfy our obligations with respect to all or a portion of such indebtedness and could limit our
ability to obtain additional financing for future working capital expenditures, strategic acquisitions and other general corporate requirements.
We are unable to predict the impact of the recent downturn in the credit markets and the resulting costs or constraints in obtaining
financing on our business and financial results.
Our principal sources of cash come from our operating activities and the issuance of debt and bank borrowings. The recent and
extraordinary disruption in the credit markets has had a significant adverse impact on a number of financial institutions and has affected the
cost of capital available to us. At this point in time, our liquidity has not been materially impacted by the current credit environment and
management does not expect that it will be materially impacted in the near future. We will continue to closely
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monitor our liquidity and the credit markets. The recent economic downturn has also had an adverse impact on some of our customers and
suppliers. We will continue to closely monitor the credit worthiness of our customers and suppliers and adjust our allowance for doubtful
accounts, as appropriate. We cannot predict with any certainty the impact to us of any further disruption in the credit environment or any
resulting material impact on our liquidity, future financing costs or financial results.
Our foreign operations are subject to social, political and economic risks and may be adversely affected by foreign currency fluctuations.
In the fiscal year ended December 27, 2008, approximately 34% of our net revenues were generated in territories outside the United States.
Social, economic and political developments in our international markets (including Russia, Mexico, Canada, Spain, Turkey and Greece) may
adversely affect our business and financial results. These developments may lead to new product pricing, tax or other policies and monetary
fluctuations that may adversely impact our business and financial results. The overall risks to our international businesses also include
changes in foreign governmental policies. In addition, we are expanding our investment and sales and marketing efforts in certain emerging
markets, such as Russia. Expanding our business into emerging markets may present additional risks beyond those associated with more
developed international markets. For example, Russia has been a significant source of our profit growth, but is now experiencing an economic
downturn, which if sustained may have a material adverse impact on our business and financial results. Additionally, our cost of goods, our
results of operations and the value of our foreign assets are affected by fluctuations in foreign currency exchange rates. For example, the
recent weakening of foreign currencies negatively impacted our earnings in 2008 compared with the prior year.
If we are unable to maintain brand image and product quality, or if we encounter other product issues such as product recalls, our business
may suffer.
Maintaining a good reputation globally is critical to our success. If we fail to maintain high standards for product quality, or if we fail to
maintain high ethical, social and environmental standards for all of our operations and activities, our reputation could be jeopardized. In
addition, we may be liable if the consumption of any of our products causes injury or illness, and we may be required to recall products if they
become contaminated or are damaged or mislabeled. A significant product liability or other product-related legal judgment against us or a
widespread recall of our products could have a material adverse effect on our business and financial results.
Our success depends on key members of our management, the loss of whom could disrupt our business operations.
Our success depends largely on the efforts and abilities of key management employees. Key management employees are not parties to
employment agreements with us. The loss of the services of key personnel could have a material adverse effect on our business and financial
results.
If we are unable to renew collective bargaining agreements on satisfactory terms, or if we experience strikes, work stoppages or labor
unrest, our business may suffer.
Approximately 31% of our U.S. and Canadian employees are covered by collective bargaining agreements. These agreements generally
expire at various dates over the next five years. Our inability to successfully renegotiate these agreements could cause work stoppages and
interruptions, which may adversely impact our operating results. The terms and conditions of existing or renegotiated agreements could also
increase our costs or otherwise affect our ability to increase our operational efficiency.
Benefits cost increases could reduce our profitability or cash flow.

Our profitability and cash flow is substantially affected by the costs of pension, postretirement medical and employee medical and other
benefits. Recently, these costs have increased significantly due to factors such as declines in investment returns on pension assets, changes
in discount rates used to calculate pension and related liabilities, and increases in health care costs. Although we actively seek to control
increases, there can be no assurance that we will succeed in limiting future cost increases, and continued upward pressure in these costs
could have a material adverse affect on our business and financial performance.
Our failure to effectively manage our information technology infrastructure could disrupt our operations and negatively impact our
business.
We rely on information technology systems to process, transmit, store and protect electronic information. Additionally, a significant
portion of the communications between our personnel, customers, and suppliers depends on information technology. If we do not effectively
manage our information technology infrastructure, we could be subject to transaction errors, processing inefficiencies, the loss of customers,
business disruptions and data security breaches.
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Adverse weather conditions could reduce the demand for our products.
Demand for our products is influenced to some extent by the weather conditions in the markets in which we operate. Weather conditions in
these markets, such as unseasonably cool temperatures, could have a material adverse effect on our sales volume and financial results.
Catastrophic events in the markets in which we operate could have a material adverse effect on our financial condition.
Natural disasters, terrorism, pandemic, strikes or other catastrophic events could impair our ability to manufacture or sell our products.
Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to manage such events effectively if they occur,
could adversely affect our sales volume, cost of raw materials, earnings and financial results.
ITEM 1B. UNRESOLVED STAFF COMMENTS

None.
ITEM 2. PROPERTIES
Our corporate headquarters is located in leased property in Somers, New York. In addition, we have a total of 591 manufacturing and
distribution facilities, as follows:
U.S . & C an ada Eu rope Me xico

Manufacturing Facilities
Owned 51 14 22
Leased 2 — 3
Other 4 — —
Total 57 14 25
Distribution Facilities
Owned 222 12 84
Leased 49 48 80
Total 271 60 164
We also own or lease and operate approximately 38,500 vehicles, including delivery trucks, delivery and transport tractors and trailers and
other trucks and vans used in the sale and distribution of our beverage products. We also own more than two million coolers, soft drink
dispensing fountains and vending machines.
With a few exceptions, leases of plants in the U.S. & Canada are on a long-term basis, expiring at various times, with options to renew for
additional periods. Our leased facilities in Europe and Mexico are generally leased for varying and usually shorter periods, with or without
renewal options. We believe that our properties are in good operating condition and are adequate to serve our current operational needs.
ITEM 3. LEGAL PROCEEDINGS

From time to time we are a party to various litigation proceedings arising in the ordinary course of our business, none of which, in the
opinion of management, is likely to have a material adverse effect on our financial condition or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
There is no established public trading market for the ownership of Bottling LLC.
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ITEM 6. SELECTED FINANCIAL DATA

SELECTED FINANCIAL AND OPERATING DATA
in millions
Fiscal ye ars e n de d 2008 (1) 2007 (2) 2006 (3)(4) 2005 (3)(5) 2004
Statement of Operations Data:
Net revenues $ 13,796 $ 13,591 $ 12,730 $ 11,885 $ 10,906
Cost of sales 7,586 7,370 6,900 6,345 5,656
Gross profit 6,210 6,221 5,830 5,540 5,250
Selling, delivery and administrative expenses 5,171 5,167 4,842 4,533 4,285
Impairment charges 412 — — — —
Operating income 627 1,054 988 1,007 965
Interest expense 244 232 227 187 166
Interest income 162 222 174 77 34
Other non-operating expenses (income), net 24 (5) 10 1 1
Minority interest 24 28 (2) 1 —
Income before income taxes 497 1,021 927 895 832
Income tax (benefit) expense (6)(7)(8) (39) 27 3 24 3
Net income $ 536 $ 994 $ 924 $ 871 $ 829
Balance Sheet Data (at period end):

Total assets $ 16,495 $ 16,712 $ 14,955 $ 13,745 $ 12,724
Long-term debt $ 3,789 $ 3,776 $ 3,759 $ 2,943 $ 3,495
Minority interest $ 672 $ 379 $ 18 $ 3 $ 3
Accumulated other comprehensive loss (9) $ (1,373) $ (189) $ (589) $ (395) $ (447)
Owners’ equity $ 7,534 $ 9,229 $ 8,092 $ 7,581 $ 6,620
(1) Our fiscal year 2008 results include a $412 million non-cash impairment charge related primarily to
distribution rights and product brands in Mexico and an $83 million pre-tax charge related to restructuring
charges. See Items Affecting Comparability of Our Financial Results in Item 7.
(2) Our fiscal year 2007 results include a $30 million pre-tax charge related to restructuring charges and a
$23 million pre-tax charge related to our asset disposal plan. See Items Affecting Comparability of Our
Financial Results in Item 7.
(3) In 2007, we made a classification correction for certain miscellaneous costs incurred from product losses in
the trade. Approximately $90 million and $92 million of costs incurred, which were incorrectly included in
selling, delivery and administrative expenses, were reclassified to cost of sales in our Consolidated
Statements of Operations for the years ended 2006 and 2005, respectively. We have not reclassified these
expenses for the 2004 fiscal year.
(4) In fiscal year 2006, we adopted Statement of Financial Accounting Standards (“SFAS”) No. 123 (revised
2004), “Share-Based Payment” resulting in a $65 million decrease in operating income. Results for prior
periods have not been restated as provided for under the modified prospective approach.
(5) Our fiscal year 2005 results include an extra week of activity. The pre-tax income generated from the extra
week was spent back in strategic initiatives within our selling, delivery and administrative expenses and,
accordingly, had no impact on our net income.
(6) Our fiscal year 2007 results include a net non-cash benefit of $13 million due to tax law changes in Canada
and Mexico. See Items Affecting Comparability of Our Financial Results in Item 7.
(7) Our fiscal year 2006 results include a tax benefit of $12 million from tax law changes in Canada, Turkey, and
in certain U.S. jurisdictions. See Items Affecting Comparability of Our Financial Results in Item 7.
(8) Our fiscal year 2004 results include Mexico tax law change benefit of $26 million.
(9) In fiscal year 2006, we adopted SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and
Other Postretirement Plans” and recorded a $278 million loss, net of taxes, to accumulated other
comprehensive loss.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
TABLE OF CONTENTS
Our Business 16
Critical Accounting Policies 17
Other Intangible Assets net, and Goodwill 17
Pension and Postretirement Medical Benefit Plans 18
Income Taxes 21
Relationship with PepsiCo 21
Items Affecting Comparability of Our Financial Results 22
Financial Performance Summary and Worldwide Financial Highlights for Fiscal Year 2008 24
Results of Operations by Segment 24
Liquidity and Financial Condition 30
Market Risks and Cautionary Statements 33
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Statements of Operations 36

Consolidated Statements of Cash Flows 37
Consolidated Balance Sheets 38
Consolidated Statements of Changes in Owners’ Equity 39
Notes to Consolidated Financial Statements 40
Note 1 - Basis of Presentation 40
Note 2 - Summary of Significant Accounting Policies 40
Note 3 - Share-Based Compensation 44
Note 4 - Balance Sheet Details 46
Note 5 - Other Intangible Assets net, and Goodwill 48
Note 6 - Investment in Noncontrolled Affiliate 50
Note 7 - Fair Value Measurements 50
Note 8 - Short-term Borrowings and Long-term Debt 51
Note 9 - Leases 52
Note 10 - Financial Instruments and Risk Management 52
Note 11 - Pension and Postretirement Medical Benefit Plans 54
Note 12 - Income Taxes 59
Note 13 - Segment Information 62
Note 14 - Related Party Transactions 63
Note 15 - Restructuring Charges 66
Note 16 - Accumulated Other Comprehensive Loss 66
Note 17 - Supplemental Cash Flow Information 67
Note 18 - Contingencies 67
Note 19 - Selected Quarterly Financial Data 67
Note 20 - Subsequent Event 67
Report of Independent Registered Public Accounting Firm 68
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Tabular dollars in millions
OUR BUSINESS
Bottling Group, LLC (referred to as “Bottling LLC,” “we,” “our,” “us” and the “Company”) is the principal operating subsidiary of The
Pepsi Bottling Group, Inc. (“PBG”) and consists of substantially all of the operations and the assets of PBG. PBG is the world’s largest
manufacturer, seller and distributor of Pepsi-Cola beverages.
We have the exclusive right to manufacture, sell and distribute Pepsi-Cola beverages in all or a portion of the U.S., Mexico, Canada, Spain,
Russia, Greece and Turkey. Bottling LLC manages and reports operating results through three reportable segments: U.S. & Canada, Europe
(which includes Spain, Russia, Greece and Turkey) and Mexico. As shown in the graph below, the U.S. & Canada segment is the dominant
driver of our results, generating 68 percent of our volume and 75 percent of our net revenues.
Volume Revenue
Total: 1.6 Billion Raw Cases Total: $13.8 Billion
(PIE CHART) (PIE CHART)
The majority of our volume is derived from brands licensed from PepsiCo, Inc. (“PepsiCo”) or PepsiCo joint ventures. These brands are
some of the most recognized in the world and consist of carbonated soft drinks (“CSDs”) and non-carbonated beverages. Our CSDs include
brands such as Pepsi-Cola, Diet Pepsi, Diet Pepsi Max, Mountain Dew and Sierra Mist. Our non-carbonated beverages portfolio includes
brands with Starbucks Frapuccino in the ready-to-drink coffee category; Mountain Dew Amp and SoBe Adrenaline Rush in the energy drink
category; SoBe and Tropicana in the juice and juice drinks category; Aquafina in the water category; and Lipton Iced Tea in the tea category.
We continue to strengthen our powerful portfolio highlighted by our focus on the hydration category with SoBe Life Water, Propel fitness
water and G2 in the U.S. In some of our territories we have the right to manufacture, sell and distribute soft drink products of companies other
than PepsiCo, including Dr Pepper, Crush and Squirt. We also have the right in some of our territories to manufacture, sell and distribute
beverages under brands that we own, including Electropura, e-pura and Garci Crespo. See Part I, Item 1 of this report for a listing of our
principal products by segment.
We sell our products through cold-drink and take-home channels. Our cold-drink channel consists of chilled products sold in the retail and
foodservice channels. We earn the highest profit margins on a per-case basis in the cold-drink channel. Our take-home channel consists of
unchilled products that are sold in the retail, mass merchandiser and club store channels for at-home consumption.
Our products are brought to market primarily through direct store delivery (“DSD”) or third-party distribution, including foodservice and
vending distribution networks. The hallmarks of the Company’s DSD system are customer service, speed to market, flexibility and reach. These
are all critical factors in bringing new products to market, adding accounts to our existing base and meeting increasingly diverse volume
demands.
Our customers range from large format accounts, including large chain foodstores, supercenters, mass merchandisers, chain drug stores,
club stores and military bases, to small independently owned shops and foodservice businesses. Changing consumer shopping trends and
“on-the-go” lifestyles are shifting more of our volume to fast-growing channels such as supercenters, club and dollar stores. Retail
consolidation continues to increase the strategic significance of our large-volume customers. In 2008, sales to our top five retail customers
represented approximately 19 percent of our net revenues.
Bottling LLC’s focus is on superior sales execution, customer service, merchandising and operating excellence. Our goal is to help our
customers grow their beverage business by making our portfolio of brands readily available to consumers at every shopping occasion, using
proven methods to grow not only PepsiCo brand sales, but the overall beverage category. Our objective is to ensure we have the right product
in the right package to satisfy the ever changing needs of today’s consumers.
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We measure our sales in terms of physical cases sold to our customers. Each package, as sold to our customers, regardless of configuration
or number of units within a package, represents one physical case. Our net price and gross margin on a per-case basis are impacted by how
much we charge for the product, the mix of brands and packages we sell, and the channels through which the product is sold. For example, we
realize a higher net revenue and gross margin per case on a 20-ounce chilled bottle sold in a convenience store than on a 2-liter unchilled bottle
sold in a grocery store.
Our financial success is dependent on a number of factors, including: our strong partnership with PepsiCo, the customer relationships we
cultivate, the pricing we achieve in the marketplace, our market execution, our ability to meet changing consumer preferences and the
efficiencies we achieve in manufacturing and distributing our products. Key indicators of our financial success are: the number of physical
cases we sell, the net price and gross margin we achieve on a per-case basis, our overall cost productivity which reflects how well we manage
our raw material, manufacturing, distribution and other overhead costs, and cash and capital management.
The discussion and analysis throughout Management’s Financial Review should be read in conjunction with the Consolidated Financial
Statements and the related accompanying notes. The preparation of our Consolidated Financial Statements in conformity with accounting
principles generally accepted in the United States of America (“U.S. GAAP”) requires us to make estimates and assumptions that affect the
reported amounts in our Consolidated Financial Statements and the related accompanying notes, including various claims and contingencies
related to lawsuits, taxes, environmental and other matters arising from the normal course of business. We apply our best judgment, our
knowledge of existing facts and circumstances and actions that we may undertake in the future, in determining the estimates that affect our
Consolidated Financial Statements. We evaluate our estimates on an on-going basis using our historical experience as well as other factors we
believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances
change. As future events and their effect cannot be determined with precision, actual results may differ from these estimates.
CRITICAL ACCOUNTING POLICIES

Significant accounting policies are discussed in Note 2 in the Notes to Consolidated Financial Statements. Management believes the
following policies, which require the use of estimates, assumptions and the application of judgment, to be the most critical to the portrayal of
Bottling LLC’s results of operations and financial condition. We applied our critical accounting policies and estimation methods consistently
in all material respects and have discussed the selection of these policies and related disclosures with the Audit and Affiliated Transactions
Committee of PBG’s Board of Directors.
Other Intangible Assets, net and Goodwill

Our intangible assets consist primarily of franchise rights, distribution rights, licensing rights, brands and goodwill and principally arise
from the allocation of the purchase price of businesses acquired. These intangible assets, other than goodwill, are classified as either finite-
lived intangibles or indefinite-lived intangibles.
The classification of intangibles and the determination of the appropriate useful life require substantial judgment. The determination of the
expected life depends upon the use and underlying characteristics of the intangible asset. In our evaluation of the expected life of these
intangible assets, we consider the nature and terms of the underlying agreements; our intent and ability to use the specific asset; the age and
market position of the products within the territories in which we are entitled to sell; the historical and projected growth of those products; and
costs, if any, to renew the related agreement.
Intangible assets that are determined to have a finite life are amortized over their expected useful life, which generally ranges from five to
twenty years. For intangible assets with finite lives, evaluations for impairment are performed only if facts and circumstances indicate that the
carrying value may not be recoverable.
Goodwill and other intangible assets with indefinite lives are not amortized; however, they are evaluated for impairment at least annually or
more frequently if facts and circumstances indicate that the assets may be impaired. Prior to 2008, the Company completed this test in the
fourth quarter. During 2008, the Company changed its impairment testing of goodwill and intangible assets with indefinite useful lives to the
third quarter, with the exception of Mexico’s intangible assets. Impairment testing of Mexico’s intangible assets with indefinite useful lives
was completed in the fourth quarter to coincide with the completion of our strategic review of the business.
We evaluate goodwill for impairment at the reporting unit level, which we determined to be the countries in which we operate. We evaluate
goodwill for impairment by comparing the fair value of the reporting unit, as determined by its discounted cash flows, with its carrying value. If
the carrying value of a reporting unit exceeds its fair value, we compare the implied fair value of the reporting unit’s goodwill with its carrying
amount to measure the amount of impairment loss.
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We evaluate other intangible assets with indefinite useful lives for impairment by comparing the fair values of the assets with their carrying
values. The fair value of our franchise rights, distribution rights and licensing rights is measured using a multi-period excess earnings method
that is based upon estimated discounted future cash flows. The fair value of our brands is measured using a multi-period royalty savings
method, which reflects the savings realized by owning the brand and, therefore, not requiring payment of third party royalty fees.
Considerable management judgment is necessary to estimate discounted future cash flows in conducting an impairment analysis for
goodwill and other intangible assets. The cash flows may be impacted by future actions taken by us and our competitors and the volatility of
macroeconomic conditions in the markets in which we conduct business. Assumptions used in our impairment analysis, such as forecasted
growth rates, cost of capital and additional risk premiums used in the valuations, are based on the best available market information and are
consistent with our long-term strategic plans. An inability to achieve strategic business plan targets in a reporting unit, a change in our
discount rate or other assumptions could have a significant impact on the fair value of our reporting units and other intangible assets, which
could then result in a material non-cash impairment charge to our results of operations. The recent volatility in the global macroeconomic
conditions has had a negative impact on our business results. If this volatility continues to persist into the future, the fair value of our
intangible assets could be adversely impacted.
As a result of the 2008 impairment test for goodwill and other intangible assets with indefinite lives, the Company recorded a $412 million
non-cash impairment charge relating primarily to distribution rights and brands for the Electropura water business in Mexico. The impairment
charge relating to these intangible assets was based upon the findings of an extensive strategic review and the finalization of restructuring
plans for our Mexican business. In light of the weakening macroeconomic conditions and our outlook for the business in Mexico, we lowered
our expectation of the future performance, which reduced the value of these intangible assets and triggered the impairment charge. After
recording the above mentioned impairment charge, Mexico’s remaining net book value of goodwill and other intangible assets is approximately
$367 million.
For further information about our goodwill and other intangible assets see Note 5 in the Notes to Consolidated Financial Statements.
Pension and Postretirement Medical Benefit Plans

We participate in PBG sponsored pension and other postretirement medical benefit plans in various forms in the United States and similar
pension plans in our international locations, covering employees who meet specified eligibility requirements. The assets, liabilities and
expenses associated with our international plans were not significant to our worldwide results of operations or financial position, and
accordingly, assumptions, expenses, sensitivity analyses and other data regarding these plans are not included in any of the discussions
provided below.
In the U.S., the non-contributory defined benefit pension plans provide benefits to certain full-time salaried and hourly employees. Benefits
are generally based on years of service and compensation, or stated amounts for each year of service. Effective January 1, 2007, newly hired
salaried and non-union hourly employees are not eligible to participate in these plans. Additionally, effective April 1, 2009, benefits from these
plans will no longer continue to accrue for certain salaried and non-union employees that do not meet age and service requirements. The
impact of these plan changes will significantly reduce the Company’s future long-term pension obligation, pension expense and cash
contributions to the plans. Employees not eligible to participate in these plans or employees whose benefits will be discontinued will receive
additional Company retirement contributions under PBG’s defined contribution plans.
Substantially all of our U.S. employees meeting age and service requirements are eligible to participate in PBG’s postretirement medical
benefit plans.
Assumptions
Effective for the 2008 fiscal year, the Company adopted the measurement date provisions of Statement of Financial Accounting Standards
(“SFAS”) No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (“SFAS 158”). As a result of
adopting SFAS 158, the Company’s measurement date for plan assets and benefit obligations was changed from September 30 to its fiscal year
end.
The determination of pension and postretirement medical plan obligations and related expenses requires the use of assumptions to estimate
the amount of benefits that employees earn while working, as well as the present value of those benefit obligations. Significant assumptions
include discount rate; expected return on plan assets; certain employee-related factors such as retirement age, mortality, and turnover; rate of
salary increases for plans where benefits are based on earnings; and for retiree medical plans, health care cost trend rates.
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On an annual basis we evaluate these assumptions, which are based upon historical experience of the plans and management’s best
judgment regarding future expectations. These assumptions may differ materially from actual results due to changing market and economic
conditions. A change in the assumptions or economic events outside our control could have a material impact on the measurement of our
pension and postretirement medical benefit expenses and obligations as well as related funding requirements.
The discount rates used in calculating the present value of our pension and postretirement medical benefit plan obligations are developed
based on a yield curve that is comprised of high-quality, non-callable corporate bonds. These bonds are rated Aa or better by Moody’s; have
a principal amount of at least $250 million; are denominated in U.S. dollars; and have maturity dates ranging from six months to thirty years,
which matches the timing of our expected benefit payments.
The expected rate of return on plan assets for a given fiscal year is based upon actual historical returns and the long-term outlook on asset
classes in the pension plans’ investment portfolio. In connection with the pension plan design change we changed our asset allocation
targets. The current target asset allocation for the U.S. pension plans is 65 percent equity investments, of which approximately half is to be
invested in domestic equities and half is to be invested in foreign equities. The remaining 35 percent is to be invested primarily in long-term
corporate bonds. Based on the revised asset allocation, historical returns and estimated future outlook of the pension plans’ portfolio, we
changed the 2009 estimated long-term rate of return on plan assets assumption from 8.5 percent to 8.0 percent.
Differences between the assumed rate of return and actual rate of return on plan assets are deferred in accumulated other comprehensive
loss in equity and amortized to earnings utilizing the market-related value method. Under this method, differences between the assumed rate of
return and actual rate of return from any one year will be recognized over a five year period to determine the market related value.
Other gains and losses resulting from changes in actuarial assumptions and from differences between assumed and actual experience are
determined at each measurement date and deferred in accumulated other comprehensive loss in equity. To the extent the amount of all
unrecognized gains and losses exceeds 10 percent of the larger of the benefit obligation or plan assets, such amount is amortized to earnings
over the average remaining service period of active participants.
The cost or benefit from benefit plan changes is also deferred in accumulated other comprehensive loss in equity and amortized to earnings
on a straight-line basis over the average remaining service period of the employees expected to receive benefits.
Net unrecognized losses and unamortized prior service costs relating to the pension and postretirement plans in the United States, totaled
$969 million and $449 million at December 27, 2008 and December 29, 2007, respectively.
The following tables provide the weighted-average assumptions for our 2009 and 2008 pension and postretirement medical plans’ expense:
2009 2008
Pension
Expected rate of return on plan assets (net of administrative expenses) 8.00% 8.50%
2009 2008
Postretirement
Health care cost trend rate 8.75% 9.50%
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During 2008, our ongoing defined benefit pension and postretirement medical plan expenses totaled $87 million, which excludes one-time
charges of approximately $27 million associated with restructuring actions and our pension plan design change. In 2009, these expenses are
expected to increase by approximately $11 million to $98 million as a result of the following factors:
• A decrease in our weighted-average discount rate for our pension expense from 6.70 percent to 6.20 percent, reflecting decreases in
the yields of long-term corporate bonds comprising the yield curve. This change in assumption will increase our 2009 pension
expense by approximately $18 million.
• Asset losses during 2008 will increase our pension expense by $20 million.
• A decrease in the rate of return on plan asset assumption from 8.5 percent to 8.0 percent, due to revised asset allocation, historical
trends and our projected long-term outlook. This change in assumption will increase our 2009 pension expense by approximately
$8 million.
• The pension design change, which will freeze benefits of certain salaried and non-union hourly employees, will decrease our 2009
pension expense by approximately $20 million.
• Additional expected contributions to the pension trust will decrease 2009 pension expense by $11 million.
• Other factors, including improved health care claim experience, will decrease our 2009 defined benefit pension and postretirement
medical expenses by approximately $4 million.
In addition, we expect our defined contribution plan expense will increase by $10 million to $15 million due to additional contributions to this
plan for employees impacted by the pension design change.
Sensitivity Analysis
It is unlikely that in any given year the actual rate of return will be the same as the assumed long-term rate of return. The following table
provides a summary for the last three years of actual rates of return versus expected long-term rates of return for our pension plan assets:
2008 2007 2006

Expected rates of return on plan assets (net of administrative expenses) 8.50% 8.50% 8.50%
Actual rates of return on plan assets (net of administrative expenses) (28.50)% 12.64% 9.74%
Sensitivity of changes in key assumptions for our pension and postretirement plans’ expense in 2009 are as follows:
• Discount rate — A 25 basis point change in the discount rate would increase or decrease the 2009 expense for the pension and
postretirement medical benefit plans by approximately $9 million.
• Expected rate of return on plan assets — A 25 basis point change in the expected return on plan assets would increase or decrease
the 2009 expense for the pension plans by approximately $4 million. The postretirement medical benefit plans have no expected return
on plan assets as they are funded from the general assets of the Company as the payments come due.
• Contribution to the plan — A $20 million decrease in planned contributions to the plan for 2009 will increase our pension expense by
$1 million.
Funding
We make contributions to the pension trust to provide plan benefits for certain pension plans. Generally, we do not fund the pension plans
if current contributions would not be tax deductible. Effective in 2008, under the Pension Protection Act, funding requirements are more
stringent and require companies to make minimum contributions equal to their service cost plus amortization of their deficit over a seven year
period. Failure to achieve appropriate funded levels will result in restrictions on employee benefits. Failure to contribute the minimum required
contributions will result in excise taxes for the Company and reporting to the regulatory agencies. During 2008, the Company contributed
$85 million to PBG’s pension trusts. The Company expects to contribute an additional $150 million to PBG’s pension trusts in 2009, of which
approximately $54 million is to satisfy minimum funding requirements. These amounts exclude $23 million and $35 million of contributions to
the unfunded plans for the years ended December 27, 2008 and December 26, 2009, respectively.
For further information about PBG’s pension and postretirement plans see Note 11 in the Notes to Consolidated Financial Statements.
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Income Taxes
We are a limited liability company, classified as a partnership for U.S. tax purposes and, as such, generally will pay limited U.S. federal, state
and local income taxes. Our federal and state distributive shares of income, deductions and credits are allocated to our owners based on their
percentage of ownership. However, certain domestic and foreign affiliates pay taxes in their respective jurisdictions and record related deferred
income tax assets and liabilities.
Our effective tax rate is based on pre-tax income, statutory tax rates, tax laws and regulations and tax planning strategies available to us in
the various jurisdictions in which we operate. Significant management judgment is required in evaluating our tax positions and in determining
our effective tax rate.
Our deferred tax assets and liabilities reflect our best estimate of the tax benefits and costs we expect to realize in the future. We establish
valuation allowances to reduce our deferred tax assets to an amount that will more likely than not be realized.
As required under the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes” (“FIN 48”), which we adopted as of the beginning of fiscal year 2007, we recognize the impact of our tax positions in our
financial statements if those positions will more likely than not be sustained on audit, based on the technical merits of the position. A number
of years may elapse before an uncertain tax position for which we have established a tax reserve is audited and finally resolved, and the
number of years for which we have audits that are open varies depending on the tax jurisdiction. While it is often difficult to predict the final
outcome or the timing of the resolution of an audit, we believe that our reserves for uncertain tax benefits reflect the outcome of tax positions
that is more likely than not to occur. Nevertheless, it is possible that tax authorities may disagree with our tax positions, which could have a
significant impact on our results of operations, financial position and cash flows. The resolution of a tax position could be recognized as an
adjustment to our provision for income taxes and our deferred taxes in the period of resolution, and may also require a use of cash.
For further information about our income taxes see “Income Tax Expense” in the Results of Operations and Note 12 in the Notes to
Consolidated Financial Statements.
RELATIONSHIP WITH PEPSICO

PepsiCo is a related party due to the nature of our franchise relationship and its ownership interest in our company. More than 80 percent of
our volume is derived from the sale of PepsiCo brands. At December 27, 2008, PepsiCo owned 6.6 percent of our equity and 40 percent of PR
Beverages Limited (“PR Beverages”), a consolidated venture for our Russian operations. We fully consolidate the results of PR Beverages and
present PepsiCo’s share as minority interest in our Consolidated Financial Statements.
On March 1, 2007, together with PepsiCo, we formed PR Beverages, a venture that enables us to strategically invest in Russia to accelerate
our growth. PBG contributed its business in Russia to PR Beverages, and PepsiCo entered into bottling agreements with PR Beverages for
PepsiCo beverage products sold in Russia on the same terms as in effect for PBG immediately prior to the venture. PR Beverages has an
exclusive license to manufacture and sell PepsiCo concentrate for such products. Increases in gross profit and operating income resulting from
the consolidation of the venture are offset by minority interest expense related to PepsiCo’s share. Minority interest expense is recorded below
operating income.
Our business is conducted primarily under beverage agreements between PBG and PepsiCo, including a master bottling agreement, non-
cola bottling agreements, distribution agreements and a master syrup agreement. These agreements provide PepsiCo with the ability, at its sole
discretion, to establish prices, and other terms and conditions for our purchase of concentrates and finished products from PepsiCo. PepsiCo
provides us with bottler funding to support a variety of trade and consumer programs such as consumer incentives, advertising support, new
product support and vending and cooler equipment placement. The nature and type of programs, as well as the level of funding, vary
annually. Additionally, under a shared services agreement, we obtain various services from PepsiCo, which include services for information
technology maintenance and the procurement of raw materials. We also provide services to PepsiCo, including facility and credit and
collection support. Although we are not a direct party to these contracts, as the principal operating subsidiary of PBG, we derive direct benefit
from them.
Because we depend on PepsiCo to provide us with concentrate which we use in the production of CSDs and non-carbonated beverages,
bottler incentives and various services, changes in our and PBG’s relationship with PepsiCo could have a material adverse effect on our
For further information about our relationship with PepsiCo and its affiliates see Note 14 in the Notes to Consolidated Financial Statements.
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ITEMS AFFECTING COMPARABILITY OF OUR FINANCIAL RESULTS

The year-over-year comparisons of our financial results are affected by the following items included in our reported results:
De ce m be r De ce m be r De ce m be r
Incom e/(Expense) 27, 2008 29, 2007 30, 2006
Gross Profit
PR Beverages $ — $ 29 $ —
Operating Income
Impairment Charges $ (412) $ — $ —
2008 Restructuring Charges (83) — —
2007 Restructuring Charges (3) (30) —
Asset Disposal Charges (2) (23) —
PR Beverages — 29 —
Total Operating Income Impact $ (500) $ (24) $ —
Net Income
Impairment Charges $ (297) $ — $ —
2008 Restructuring Charges (83) — —
2007 Restructuring Charges (3) (30) —
Asset Disposal Charges (2) (23) —
Tax Law Changes — 13 12
Total Net Income Impact $ (385) $ (40) $ 12
Items impacting comparability described below are shown in the year the action was initiated.
2008 Items
Impairment Charges
During the fourth quarter of 2008, the Company recorded a $412 million non-cash impairment charge relating primarily to distribution rights
and brands for the Electropura water business in Mexico. For further information about the impairment charges, see section entitled “Other
Intangible Assets, net and Goodwill,” in our Critical Accounting Policies.
In the fourth quarter of 2008, we announced a restructuring program to enhance the Company’s operating capabilities in each of our
reportable segments. The program’s key objectives are to strengthen customer service and selling effectiveness; simplify decision making and
streamline the organization; drive greater cost productivity to adapt to current macroeconomic challenges; and rationalize the Company’s
supply chain infrastructure. We anticipate the program to be substantially complete by the end of 2009 and the program is expected to result in
annual pre-tax savings of approximately $150 million to $160 million.
The Company expects to record pre-tax charges of $140 million to $170 million over the course of the restructuring program, which is
primarily for severance and related benefits, pension and other employee-related costs and other charges, including employee relocation and
asset disposal costs. As part of the restructuring program, approximately 3,150 positions will be eliminated including 750 positions in the U.S.
& Canada, 200 positions in Europe and 2,200 positions in Mexico. The Company will also close four facilities in the U.S., as well as three plants
and approximately 30 distribution centers in Mexico. The program will also include the elimination of approximately 700 routes in Mexico. In
addition, PBG will modify its U.S. defined benefit pension plans, which will generate long-term savings and significantly reduce future financial
obligations.
During 2008, the Company incurred pre-tax charges of $83 million, of which $53 million was recorded in the U.S. & Canada segment,
$27 million was recorded in our Europe segment and the remaining $3 million was recorded in the Mexico segment. All of these charges were
recorded in selling, delivery and administrative expenses. During 2008 we eliminated approximately 1,050 positions across all reportable
segments and closed three facilities in the U.S. and two plants in Mexico and eliminated 126 routes in Mexico.
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The Company expects about $130 million in pre-tax cash expenditures from these restructuring actions, of which $13 million was paid in the
fourth quarter of 2008, with the balance expected to occur in 2009 and 2010.
For further information about our restructuring charges, see Note 15 in the Notes to Consolidated Financial Statements.
2007 Items
In the third quarter of 2007, we announced a restructuring program to realign the Company’s organization to adapt to changes in the
marketplace, improve operating efficiencies and enhance the growth potential of the Company’s product portfolio. We substantially completed
the organizational realignment during the first quarter of 2008, which resulted in the elimination of approximately 800 positions. Annual cost
savings from this restructuring program are approximately $30 million. Over the course of the program we incurred a pre-tax charge of
approximately $29 million. During 2007, we recorded pre-tax charges of $26 million, of which $18 million was recorded in the U.S. & Canada
segment and the remaining $8 million was recorded in the Europe segment. During the first half of 2008, we recorded an additional $3 million of
pre-tax charges primarily relating to relocation expenses in our U.S. & Canada segment. We made approximately $30 million of after-tax cash
payments associated with these restructuring charges.
In the fourth quarter of 2007, we implemented and completed an additional phase of restructuring actions to improve operating efficiencies.
In addition to the amounts discussed above, we recorded a pre-tax charge of approximately $4 million in selling, delivery and administrative
expenses, primarily related to employee termination costs in Mexico, where an additional 800 positions were eliminated as a result of this phase
of the restructuring. Annual cost savings from this restructuring program are approximately $7 million.
Asset Disposal Charges
In the fourth quarter of 2007, we adopted a Full Service Vending (“FSV”) Rationalization plan to rationalize our vending asset base in our
U.S. & Canada segment by disposing of older underperforming assets and redeploying certain assets to higher return accounts. Our FSV
business portfolio consists of accounts where we stock and service vending equipment. This plan, which we completed in the second quarter
of 2008, was part of the Company’s broader initiative to improve operating income margins of our FSV business.
Over the course of the FSV Rationalization plan, we incurred a pre-tax asset disposal charge of approximately $25 million, the majority of
which was non-cash. The charge included costs associated with the removal of these assets from service, disposal costs and redeployment
expenses. Of this amount, we recorded a pre-tax charge of approximately $23 million in 2007, with the remainder being recorded in 2008. This
charge is recorded in selling, delivery and administrative expenses.
PR Beverages
For further information about PR Beverages see “Relationship with PepsiCo.”
Tax Law Changes
During 2007, tax law changes were enacted in Canada and Mexico which required us to re-measure our deferred tax assets and liabilities.
The impact of the reduction in tax rates in Canada was partially offset by the tax law changes in Mexico which decreased our income tax
expense on a net basis. Net income increased approximately $13 million as a result of these tax law changes.
2006 Items
Tax Law Changes
During 2006, tax law changes were enacted in Canada, Turkey and in various state jurisdictions in the United States which decreased our
income tax expense by approximately $12 million.
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FINANCIAL PERFORMANCE SUMMARY AND WORLDWIDE FINANCIAL HIGHLIGHTS FOR FISCAL YEAR 2008
De ce m be r De ce m be r Fiscal Ye ar
27, 2008 29, 2007 % C h an ge
Net Revenues $13,796 $13,591 2%
Cost of Sales $ 7,586 $ 7,370 3%
Gross Profit $ 6,210 $ 6,221 —%
Selling, Delivery and Administrative Expenses $ 5,171 $ 5,167 —%
Operating Income $ 627 $ 1,054 (41)%
Net Income $ 536 $ 994 (46)%

Volume — Decrease of four percent versus the prior year driven by declines in each of our segments due to the soft economic conditions
globally which have negatively impacted the liquid refreshment beverage category.
Net Revenues —Increase of two percent versus the prior year is driven by strong increases in net price per case in each of our segments,
partially offset by volume declines. Net price per case increased six percent due primarily to rate increases and includes one percentage point
of growth from foreign currency.
Cost of Sales — Increase of three percent versus the prior year due to rising raw material costs partially offset by volume declines. Cost of
sales per case increased seven percent, which includes one percentage point from foreign currency. Increase in costs of sales per case was
driven by plastic bottle components, sweetener and concentrate.
Gross Profit — Growth was flat driven by rate increases offset by volume declines and higher raw material costs. Rate gains more than
offset higher raw material costs driving a four percent increase in gross profit per case.
Selling, Delivery and Administrative (“SD&A”) Expenses — Flat results versus the prior year include one percentage point of growth
relating to restructuring and asset disposal charges taken in the current and prior year. The remaining one percentage point improvement in
SD&A expenses was driven by lower operating costs due to decreases in volume and continued cost and productivity improvements across
all our segments, partially offset by the negative impact from strengthening foreign currencies during the first half of the year.
Operating Income — Decrease of 41 percent versus the prior year was driven primarily by the impairment, restructuring and asset disposal
charges taken in the current and prior year, which together contributed 42 percentage points to the operating income decline for the year. The
remaining one percentage point of growth in operating income was driven by increases in Europe and the U.S. & Canada. During 2008, we
captured over $170 million of productivity gains reflecting an increased focus on cost containment across all of our businesses. Savings
include productivity from manufacturing and logistics coupled with reduced headcount and decreased discretionary spending. Operating
income growth includes one percentage point of growth from foreign currency translation.
Net Income — Net income for the year of $536 million includes a net after-tax charge of $385 million from impairment and asset disposal
charges, and restructuring initiatives discussed above. These items contributed 35 percentage points to our net income decline. The remaining
11 percent decline reflects lower interest income generated from loans made to PBG, higher interest expense on third party loans, the negative
impact of foreign currency transactional expenses and higher effective taxes. For 2007, net income of $994 million included a net after-tax
charge of $40 million from restructuring charges, asset disposal charges and tax items.
RESULTS OF OPERATIONS BY SEGMENT

Except where noted, tables and discussion are presented as compared to the prior fiscal year. Growth rates are rounded to the nearest
whole percentage.
Volume
2008 vs. 2007
U.S . &
W orldwide C an ada Eu rope Me xico
Total Volume Change (4)% (4)% (3)% (5)%
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U.S. & Canada

In our U.S. & Canada segment, volume decreased four percent due to declining consumer confidence and spending, which has negatively
impacted the liquid refreshment beverage category. Cold-drink and take-home channels both declined by four percent versus last year. The
decline in the take-home channel was driven primarily by our large format stores, which was impacted by the overall declines in the liquid
refreshment beverage category as well as pricing actions taken to improve profitability in our take-home packages including our unflavored
water business. Decline in the cold-drink channel was driven by our foodservice channel, including restaurants, travel and leisure and
workplace, which has been particularly impacted by the economic downturn in the United States.
Europe
In our Europe segment, volume declined by three percent resulting from a soft volume performance in the second half of the year. Results
reflect overall weak macroeconomic environments throughout Europe with high single digit declines in Spain and flat volume growth in Russia.
Despite the slowing growth in Russia, we showed improvements in our energy and tea categories, partially offset by declines in the CSD
category. In Spain, there were declines across all channels due to a weakening economy and our continued focus on improving revenue and
gross profit growth.
Mexico
In our Mexico segment, volume decreased five percent driven by slower economic growth coupled with pricing actions taken by the
Company to drive improved margins across its portfolio. This drove single digit declines in our jug water and multi-serve packages, which was
partially offset by one percent improvement in our bottled water package.
2007 vs. 2006
U.S . &
Base volume —% —% 4% (2)%
Acquisitions 1 — — 3
Total Volume Change 1% —% 4% 1%
U.S. & Canada

In our U.S. & Canada segment, volume was unchanged, driven primarily by flat volume in the U.S. Our performance in the U.S. reflected
growth in the take-home channel of approximately one percent, driven primarily by growth in supercenters, wholesale clubs and mass
merchandisers. This growth was offset by a decline of three percent in the cold-drink channel, as a result of declines in our small format and
foodservice channels. From a brand perspective, our U.S. non-carbonated portfolio increased six percent, reflecting significant increases in
Trademark Lipton and water, coupled with strong growth in energy drinks. The growth in our U.S. non-carbonated portfolio was offset by
declines in our CSD portfolio of three percent, driven primarily by declines in Trademark Pepsi.
In Canada, volume grew two percent, driven primarily by three percent growth in the cold-drink channel and two percent growth in the take-
home channel. From a brand perspective, our non-carbonated portfolio increased 13 percent, reflecting a 12 percent increase in Trademark
Lipton and a five percent increase in water.
Europe
In our Europe segment, overall volume grew four percent. This growth was driven primarily by 17 percent growth in Russia, partially offset
by declines of eight percent in Spain and two percent in Turkey. Volume increases in Russia were strong in all channels, led by growth of
40 percent in our non-carbonated portfolio.
Mexico
In our Mexico segment, overall volume increased one percent, driven primarily by acquisitions, partially offset by a decrease of two percent
in base business volume. This decrease was primarily attributable to four percent declines in both CSD and jug water volumes, mitigated by
nine percent growth in bottled water and greater than 40 percent growth in non-carbonated beverages.
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Net Revenues
2008 vs. 2007
U.S . &
2008 Net revenues $ 13,796 $ 10,300 $ 2,115 $ 1,381
2007 Net revenues $ 13,591 $ 10,336 $ 1,872 $ 1,383
% Impact of:
Volume (4)% (4)% (3)% (5)%
Currency translation 1 — 6 (1)
Total Net Revenues Change 2% —% 13% —%
U.S. & Canada

In our U.S. & Canada segment, net revenues were flat versus the prior year driven by net price per case improvement offset by volume
declines. The four percent improvement in net price per case was primarily driven by rate increases taken to offset rising raw material costs and
to improve profitability in our take-home packages including our unflavored water business.
Europe
In our Europe segment, growth in net revenues for the year reflects an increase in net price per case and the positive impact of foreign
currency translation, partially offset by volume declines. Net revenue per case grew in every country in Europe led by double-digit growth in
Russia and Turkey due mainly to rate increases.
Mexico
In our Mexico segment, net revenues were flat versus the prior year reflecting increases in net price per case offset by declines in volume
and the negative impact of foreign currency translation. Growth in net price per case was primarily due to rate increases taken within our multi-
serve CSDs, jugs and bottled water packages.
2007 vs. 2006
U.S . &
2007 Net revenues $ 13,591 $ 10,336 $ 1,872 $ 1,383
2006 Net revenues $ 12,730 $ 9,910 $ 1,534 $ 1,286
% Impact of:
Volume —% —% 4% (2)%
Acquisitions 1 — — 3
Currency translation 2 — 9 —
Total Net Revenues Change 7% 4% 22% 8%
U.S. & Canada

In our U.S. & Canada segment, four percent growth in net revenues was driven mainly by increases in net price per case as a result of rate
gains. The favorable impact of Canada’s foreign currency translation added slightly less than one percentage point of growth to the segment’s
four percent increase. In the U.S., we achieved revenue growth as a result of a net price per case improvement of four percent.
Europe
In our Europe segment, 22 percent growth in net revenues reflected exceptionally strong increases in net price per case, strong volume
growth in Russia and the positive impact of foreign currency translation. Growth in net revenues in Europe was mainly driven by a 44 percent
increase in Russia.
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Mexico
In our Mexico segment, eight percent growth in net revenues reflected strong increases in net price per case, and the impact of acquisitions,
partially offset by declines in base business volume.
Operating Income
2008 vs. 2007
U.S . &
2008 Operating income $ 627 $ 864 $ 101 $ (338)
2007 Operating income $ 1,054 $ 876 $ 106 $ 72
% Impact of:
Operations 1% 1% 2% (3)%
Currency translation 1 — 12 2
Impairment charges (39) — (3) (571)
2008 Restructuring charges (8) (6) (25) (4)
2007 Restructuring charges 3 2 8 4
Asset disposal charges 2 2 — —
Total Operating Income Change (41)%* (1)% (5)%* (572)%

U.S. & Canada
In our U.S. & Canada segment, operating income was $864 million in 2008, decreasing one percent versus the prior year. Restructuring and
asset disposal charges taken in the current and prior year together contributed a decrease of two percentage points to the operating income
decline. The remaining one percentage point of growth includes increases in gross profit per case and lower operating costs, partially offset by
lower volume in the United States.
Gross profit per case improved two percent versus the prior year in our U.S. & Canada segment. This includes growth in net revenue per
case, which was offset by a six percent increase in cost of sales per case. Growth in cost of sales per case includes higher concentrate,
sweetener and packaging costs.
SD&A expenses improved three percent versus the prior year in our U.S. & Canada segment due to lower volume and pension costs and
cost productivity initiatives. These productivity initiatives reflect a combination of headcount savings, reduced discretionary spending and
leveraged manufacturing and logistics benefits. Results also include one percentage point of growth due to restructuring and asset disposal
charges taken in the current and prior year.
Europe
In our Europe segment, operating income was $101 million in 2008, decreasing five percent versus the prior year. The net impact of
restructuring and impairment charges contributed 20 percentage points to the decline for the year. The remaining 14 percentage point increase
in operating income growth for the year reflects improvements in gross profit per case and the positive impact from foreign currency
translation, partially offset by higher SD&A expenses.
Gross profit per case in Europe increased 16 percent versus the prior year due to net price per case increases and foreign currency
translation, partially offset by higher sweetener and packaging costs. Foreign currency contributed six percentage points of growth to gross
profit for the year.
SD&A expenses in Europe increased 16 percent due to additional operating costs associated with our investments in Europe coupled with
charges in Russia due to softening volume and weakening economic conditions in the fourth quarter. Foreign currency contributed five
percentage points to SD&A growth. Restructuring charges taken in the current and prior year contributed approximately two percentage
points of growth to SD&A expenses for the year.
Mexico
In our Mexico segment, we had an operating loss of $338 million in 2008 driven primarily by impairment and restructuring charges taken in
the current and prior years. The remaining one percent decrease in operating income growth for the year was driven by volume declines,
partially offset by increases in gross profit per case and the positive impact from foreign currency translation.
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Gross profit per case improved six percent versus the prior year driven by improvements in net revenue per case, as we continue to improve
our segment profitability in our jug water and multi-serve packages. Cost of sales per case in Mexico increased by five percent due primarily to
rising packaging costs.
SD&A remained flat versus the prior year driven by lower volume and reduced operating costs as we focus on route productivity, partially
offset by cost inflation.
2007 vs. 2006
U.S . &
2007 Operating income $ 1,054 $ 876 $ 106 $ 72
2006 Operating income $ 988 $ 849 $ 57 $ 82
% Impact of:
Operations 8% 8% 41% (11)%
Currency translation 1 1 11 1
PR Beverages 3 — 50 —
2007 Restructuring (3) (2) (15) (4)
Asset disposal charges (2) (3) — —
Acquisitions — — — 2
Total Operating Income Change 7% 3%* 86%* (13)%*

U.S. & Canada
In our U.S. & Canada segment, operating income increased three percent versus the prior year. Growth in operating income includes a five
percentage point negative impact from restructuring and asset disposal charges. The remaining nine percentage point improvement in
operating income growth was the result of increases in gross profit coupled with cost productivity improvements. These improvements were
partially offset by higher SD&A expenses.
Gross profit for our U.S. & Canada segment increased three percent driven by net price per case improvement, which was partially offset by
a five percent increase in cost of sales. Increases in cost of sales are primarily due to growth in cost of sales per case resulting from higher
concentrate and sweetener costs and a one percentage point negative impact from foreign currency translation.
SD&A in the U.S. & Canada segment increased three percent driven primarily by strategic initiatives in connection with the hydration
category, partially offset by cost productivity improvements.
Europe
In our Europe segment, operating income increased 86 percent versus the prior year. Operating income growth includes 35 percentage
points of growth from the consolidation of PR Beverages and restructuring charges taken during the year. The remaining 52 percentage points
of growth reflect strong increases in volume, gross profit per case, cost productivity improvements and an 11 percentage point positive impact
of foreign currency translation. This growth was partially offset by higher operating expenses in Russia.
Gross profit per case in Europe grew 26 percent versus the prior year. This growth was driven by improvements in net revenue per case
partially offset by a 16 percent increase in cost of sales. Increases in cost of sales reflected a nine percentage point impact from foreign
currency translation, cost per case increases resulting from higher raw material costs, shifts in package mix and strong volume growth. These
increases were partially offset by a three percentage point impact from consolidating PR Beverages in our financial results.
SD&A costs in Europe increased 25 percent versus the prior year, which includes a nine percentage point negative impact from foreign
currency translation. The remaining increase in SD&A costs is due to higher operating expenses in Russia due to its growth during the year.
Mexico
In our Mexico segment, operating income decreased 13 percent as a result of declines in base business volume and higher SD&A expenses.
Restructuring charges and the impact of acquisitions together contributed a two percentage point impact to the operating income decline for
the year.
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Gross profit per case in Mexico grew five percent versus the prior year due primarily to increases in net revenue per case partially offset by
a nine percent increase in cost of sales. Increase in cost of sales reflects cost per case increases resulting from significantly higher sweetener
costs and the impact of acquisitions, partially offset by base volume declines.
SD&A expenses in Mexico grew eight percent versus the prior year, which includes three percentage points of growth from acquisitions.
The remaining growth is driven by higher operating expenses versus the prior year.
Interest Expense
2008 vs. 2007
Interest expense increased by $12 million largely due to higher average debt balances throughout the year and our treasury rate locks that
were settled in the fourth quarter. These increases were partially offset by lower effective interest rates from interest rate swaps which convert
our fixed-rate debt to variable-rate debt.
2007 vs. 2006
Interest expense increased by $5 million largely due to higher effective interest rates.
Interest Income
2008 vs. 2007
Interest income decreased by $60 million largely due to lower effective interest rates on loans made to PBG.
2007 vs. 2006
Interest income increased by $48 million largely due to additional loans made to PBG.
Other Non-Operating Expenses (Income), net

2008 vs. 2007
Other net non-operating expenses were $24 million in 2008 as compared to $5 million of net non-operating income in 2007. Foreign currency
transactional losses in 2008 resulted primarily from our U.S. dollar and euro purchases in Mexico and Russia, reflecting the impact of the
weakening peso and ruble during the second half of 2008.
2007 vs. 2006
Other net non-operating income was $5 million in 2007 as compared to $10 million of net non-operating expenses in 2006. Income in 2007
was primarily a result of foreign exchange gains due to the strength of the Canadian dollar, Turkish lira, Russian ruble and euro. The expense
position in 2006 was primarily a result of foreign exchange losses associated with the devaluation of the Turkish lira.
Minority Interest
2008 vs. 2007
The $4 million decrease versus the prior year was primarily driven by lower minority interest from the PR Beverages venture.
2007 vs. 2006
In 2007, minority interest primarily reflects PepsiCo’s 40 percent ownership in the PR Beverages venture formed in 2007. Minority interest
activity in 2006 was not material to our results of operations.
Income Tax Expense

Bottling LLC is a limited liability company, classified as a partnership for U.S. tax purposes and, as such, generally will pay limited U.S.
federal, state and local income taxes. The federal and state distributive shares of income, deductions and credits of Bottling LLC are allocated
to Bottling LLC’s owners based on their percentage of ownership in Bottling LLC. However, certain domestic and foreign affiliates pay taxes in
their respective jurisdictions. Such amounts are reflected in our Consolidated Statements of Operations.
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2008 vs. 2007

Our effective tax rate was a benefit of 7.7 percent in 2008 and an expense of 2.7 percent in 2007, respectively. The decrease in our effective
tax rate is due primarily to the year-over-year comparability associated with the following:
• In 2008, we had pre-tax impairment charges related primarily to Mexico as well as pre-tax restructuring charges which resulted in a tax
provision benefit of $115 million. The net impact of these items decreased our effective tax rate by 15.4 percentage points.
• In 2007, we had tax law changes that reduced our deferred income tax provision by $13 million, coupled with valuation allowance
reversals of $11 million. These items decreased our effective tax rate by 2.4 percentage points.
2007 vs. 2006
Our effective tax rates for 2007 and 2006 were 2.7 percent and 0.3 percent, respectively. The increase in our effective tax rate is due primarily
to the year-over-year comparability associated with the reversal of valuation allowances in Spain, Russia and Turkey in 2006. The tax law
changes enacted in 2007 and 2006 that required us to re-measure our deferred taxes had approximately the same impact in both years.
LIQUIDITY AND FINANCIAL CONDITION

Cash Flows
2008 vs. 2007
Bottling LLC generated $1,473 million of net cash from operations, a decrease of $505 million from 2007. The decrease in net cash provided
by operations was driven primarily by lower interest income received from PBG, timing of accounts payable disbursements and higher
payments related to promotional activities.
Net cash used for investments was $1,543 million, a decrease of $73 million from 2007. The decrease in cash used for investments primarily
reflects $1,027 million of proceeds from collection of notes receivable from PBG and lower capital expenditures, partially offset by $742 million
of payments associated with our investment in JSC Lebedyansky, and payments for acquisitions of Lane Affiliated Companies, Inc. and Sobol-
Aqua JSC.
Net cash provided by financing activities was $454 million, an increase of $826 million as compared to a use of cash of $372 million in 2007.
The increase in cash from financing primarily reflects proceeds from the issuance of $1.3 billion in senior notes to partially pre-fund the
February 2009 bond maturity of $1.3 billion. Also reflected in financing activities was $308 million of cash received from PepsiCo for their
proportional share in the acquisition of JSC Lebedyansky and Sobol-Aqua JSC by PR Beverages. These increases were partially offset by
higher distributions to Bottling LLC’s owners.
2007 vs. 2006
Net cash provided by operations increased by $451 million to $1,978 million in 2007. Increases in net cash provided by operations were
driven by higher cash profits coupled with increased interest income from PBG and favorable working capital.
Net cash used for investments increased by $122 million to $1,616 million, driven by higher capital spending due to strategic investments in
the U.S. and Russia, including the building of new plants in Las Vegas and Moscow and additional dedicated water lines in the U.S. The
increase was partially offset by a lower increase in notes receivable from PBG.
Net cash used for financing increased by $433 million to $372 million, driven primarily by lower net proceeds from long-term debt.
Capital Expenditures
Our business requires substantial infrastructure investments to maintain our existing level of operations and to fund investments targeted
at growing our business. Capital expenditures included in our cash flows from investing activities totaled $755 million, $854 million and
$721 million during 2008, 2007 and 2006, respectively. Capital expenditures decreased $99 million in 2008 as a result of lower investments due to
the economic slowdown, primarily in the United States.
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Liquidity and Capital Resources

Our principal sources of cash include cash from our operating activities and the issuance of debt and bank borrowings. We believe that
these cash inflows will be sufficient for the foreseeable future to fund capital expenditures, benefit plan contributions, acquisitions and
working capital requirements for PBG and us.
The recent and extraordinary disruption in the world credit markets in 2008 had a significant adverse impact on a number of financial
institutions. At this point in time, the Company’s liquidity has not been materially impacted by the current credit environment and management
does not expect that it will be materially impacted in the near-future. Management will continue to closely monitor the Company’s liquidity and
the credit markets. However, management cannot predict with any certainty the impact to the Company of any further disruption in the credit
environment.
Acquisitions and Investments
We completed a joint acquisition with PepsiCo of Russia’s leading branded juice company JSC Lebedyansky (“Lebedyansky”) for
approximately $1.8 billion. Lebedyansky was acquired 58.3 percent by PepsiCo and 41.7 percent by PR Beverages, our Russian venture with
PepsiCo. We have recorded an equity investment for PR Beverages’ share in Lebedyansky. In addition, we have recorded minority interest for
PepsiCo’s proportional contribution to PR Beverages relating to Lebedyansky.
During 2008, we acquired Lane Affiliated Companies, Inc. (“Lane”), a Pepsi-Cola franchise bottler which serves portions of Colorado,
Arizona and New Mexico. In addition, we acquired Sobol-Aqua JSC (“Sobol”), a company that manufactures Sobol brands and co-packs
various Pepsi products in Siberia and Eastern Russia. The total cost of acquisitions during 2008 was approximately $257 million.
Additionally during 2008, PBG acquired Pepsi-Cola Batavia Bottling Corp, which was contributed to Bottling LLC. This Pepsi-Cola franchise
bottler serves certain New York counties in whole or in part.
Long-Term Debt Activities
During the fourth quarter, we issued $1.3 billion in senior notes with a coupon rate of 6.95 percent, maturing in 2014. A portion of this debt
was used to repay our senior notes due in 2009 at their maturity on February 17, 2009. In the interim, these proceeds were placed in short-term
investments. In addition, we used a portion of the proceeds to finance the Lane acquisition and repay PBG’s short-term commercial paper debt,
a portion of which was used to finance the acquisition of Lebedyansky.
In addition, during the first quarter of 2009 we issued an additional $750 million in senior notes, with a coupon rate of 5.125 percent,
maturing in 2019. The net proceeds of the offering, together with a portion of the proceeds from the offering of our senior notes issued in the
fourth quarter of 2008, were used to repay our senior notes due in 2009, at their scheduled maturity on February 17, 2009. Any excess proceeds
of this offering will be used for general corporate purposes. The next significant scheduled debt maturity is not until 2012.
Short-Term Debt Activities
At December 27, 2008, we had available bank credit lines of approximately $772 million, of which the majority was uncommitted. These lines
were primarily used to support the general operating needs of our international locations. As of year-end 2008, we had $103 million
outstanding under these lines of credit at a weighted-average interest rate of 10.0 percent. As of year-end 2007, we had available short-term
bank credit lines of approximately $748 million, of which $190 million was outstanding at a weighted-average interest rate of 5.3 percent.
Our peak borrowing timeframe varies with our working capital requirements and the seasonality of our business. Additionally, throughout
the year, we may have further short-term borrowing requirements driven by other operational needs of our business. During 2008, borrowings
from our line of credit facilities peaked at $484 million, reflecting payments for working capital requirements.
Debt Covenants and Credit Ratings
Certain of our senior notes have redemption features and non-financial covenants that will, among other things, limit our ability to create or
assume liens, enter into sale and lease-back transactions, engage in mergers or consolidations and transfer or lease all or substantially all of
our assets. Additionally, certain of our senior notes have financial covenants. These requirements are not, and it is not anticipated they will
become, restrictive to our liquidity or capital resources. We are in compliance with all debt covenants. For a discussion of our covenants, see
Note 8 in the Notes to Consolidated Financial Statements.
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Our credit ratings are periodically reviewed by rating agencies. Currently our long-term ratings from Moody’s and Standard and Poor’s are
A2 and A, respectively. Changes in our operating results or financial position could impact the ratings assigned by the various agencies
resulting in higher or lower borrowing costs.
Pensions
During 2009, we expect to contribute $185 million to fund PBG’s U.S. pension and postretirement plans. For further information about our
pension and postretirement plan funding see section entitled “Pension and Postretirement Medical Benefit Plans” in our Critical Accounting
Policies.
The following table summarizes our contractual obligations as of December 27, 2008:
Paym e n ts Due by Pe riod

2010- 2012- 2014 an d
Total 2009 2011 2013 be yond
Long-term debt obligations(1) $ 5,086 $ 1,301 $ 35 $ 1,400 $ 2,350
Capital lease obligations(2) 9 4 3 — 2
Operating leases(2) 279 58 69 34 118
Interest obligations(3) 1,203 237 420 376 170
Purchase obligations:
Raw material obligations(4) 821 718 100 — 3
Capital expenditure obligations(5) 33 33 — — —
Other obligations(6) 324 135 113 38 38
Other long-term liabilities(7) 7 2 3 1 1
$ 7,762 $ 2,488 $ 743 $ 1,849 $ 2,682
(1) See Note 8 in the Notes to Consolidated Financial Statements for additional information relating to our long-
term debt obligations.
(2) Lease obligation balances include imputed interest. See Note 9 in the Notes to Consolidated Financial
Statements for additional information relating to our lease obligations.
(3) Represents interest payment obligations related to our long-term fixed-rate debt as specified in the
applicable debt agreements. A portion of our long-term debt has variable interest rates due to either existing
swap agreements or interest arrangements. We have estimated our variable interest payment obligations by
using the interest rate forward curve where practical. Given uncertainties in future interest rates we have not
included the beneficial impact of interest rate swaps after the year 2010.
(4) Represents obligations to purchase raw materials pursuant to contracts entered into by PepsiCo on our
behalf and international agreements to purchase raw materials.
(5) Represents commitments to suppliers under capital expenditure related contracts or purchase orders.
(6) Represents legally binding agreements to purchase goods or services that specify all significant terms,
including: fixed or minimum quantities, price arrangements and timing of payments. If applicable, penalty,
notice, or minimum purchase amount is used in the calculation. Balances also include non-cancelable
customer contracts for sports marketing arrangements.
(7) Primarily represents non-compete contracts that resulted from business acquisitions. The non-current
portion of unrecognized tax benefits recorded on the balance sheet as of December 27, 2008 is not included
in the table. There was no current portion of unrecognized tax benefits as of December 27, 2008. For
additional information about our income taxes see Note 12 in the Notes to Consolidated Financial
Statements.
This table excludes our pension and postretirement liabilities recorded on the balance sheet. For a discussion of our future pension
contributions, as well as expected pension and postretirement benefit payments see Note 11 in the Notes to Consolidated Financial
Statements.
Off-Balance Sheet Arrangements

For information about our off-balance sheet arrangements see Note 14 in the Notes to our Consolidated Financial Statements regarding
certain guarantees we made to our parent, PBG.
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MARKET RISKS AND CAUTIONARY STATEMENTS

Quantitative and Qualitative Disclosures about Market Risk
In the normal course of business, our financial position is routinely subject to a variety of risks. These risks include changes in the price of
commodities purchased and used in our business, interest rates on outstanding debt and currency movements impacting our non-U.S. dollar
denominated assets and liabilities. We are also subject to the risks associated with the business environment in which we operate. We
regularly assess all of these risks and have strategies in place to reduce the adverse effects of these exposures.
Our objective in managing our exposure to fluctuations in commodity prices, interest rates and foreign currency exchange rates is to
minimize the volatility of earnings and cash flows associated with changes in the applicable rates and prices. To achieve this objective, we
have derivative instruments to hedge against the risk of adverse movements in commodity prices, interest rates and foreign currency. We
monitor our counterparty credit risk on an ongoing basis. Our corporate policy prohibits the use of derivative instruments for trading or
speculative purposes, and we have procedures in place to monitor and control their use. See Note 10 in the Notes to Consolidated Financial
Statements for additional information relating to our derivative instruments.
A sensitivity analysis has been prepared to determine the effects that market risk exposures may have on our financial instruments. These
sensitivity analyses evaluate the effect of hypothetical changes in commodity prices, interest rates and foreign currency exchange rates and
changes in PBG’s stock price on our unfunded deferred compensation liability. Information provided by these sensitivity analyses does not
necessarily represent the actual changes in fair value that we would incur under normal market conditions because, due to practical limitations,
all variables other than the specific market risk factor were held constant. As a result, the reported changes in the values of some financial
instruments that are affected by the sensitivity analyses are not matched with the offsetting changes in the values of the items that those
instruments are designed to finance or hedge.
Commodity Price Risk
We are subject to market risks with respect to commodities because our ability to recover increased costs through higher pricing may be
limited by the competitive business environment in which we operate. We use future and option contracts to hedge the risk of adverse
movements in commodity prices related primarily to anticipated purchases of raw materials and energy used in our operations. With respect to
commodity price risk, we currently have various contracts outstanding for commodity purchases in 2009 and 2010, which establish our
purchase prices within defined ranges. We estimate that a 10 percent decrease in commodity prices with all other variables held constant
would have resulted in a change in the fair value of our financial instruments of $14 million and $7 million at December 27, 2008 and
December 29, 2007, respectively.
Interest Rate Risk
Interest rate risk is inherent to both fixed and floating rate debt. We effectively converted $1.1 billion of our senior notes to floating-rate
debt through the use of interest rate swaps. Changes in interest rates on our interest rate swaps and other variable debt would change our
interest expense. We estimate that a 50 basis point increase in interest rates on our variable rate debt and cash equivalents, with all other
variables held constant, would have resulted in an increase to net interest expense of $2 million and $2 million in fiscal years 2008 and 2007,
respectively.
Foreign Currency Exchange Rate Risk
In 2008, approximately 34 percent of our net revenues were generated from outside the United States. Social, economic and political
conditions in these international markets may adversely affect our results of operations, financial condition and cash flows. The overall risks
to our international businesses include changes in foreign governmental policies and other social, political or economic developments. These
developments may lead to new product pricing, tax or other policies and monetary fluctuations that may adversely impact our business. In
addition, our results of operations and the value of our foreign assets and liabilities are affected by fluctuations in foreign currency exchange
rates.
As currency exchange rates change, translation of the statements of operations of our businesses outside the U.S. into U.S. dollars affects
year-over-year comparability. We generally have not hedged against these types of currency risks because cash flows from our international
operations have been reinvested locally. We have foreign currency transactional risks in certain of our international territories for transactions
that are denominated in currencies that are different from their functional currency. We have entered into forward exchange contracts to hedge
portions of our forecasted U.S. dollar cash flows in these international territories. A 10 percent weaker U.S. dollar against the applicable foreign
currency, with all other variables held constant, would result in a change in the fair value of these contracts of $5 million and $6 million at
December 27, 2008 and December 29, 2007, respectively.
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In 2007, we entered into forward exchange contracts to economically hedge a portion of intercompany receivable balances that are
denominated in Mexican pesos. A 10 percent weaker U.S. dollar versus the Mexican peso, with all other variables held constant, would result
in a change of $4 million and $9 million in the fair value of these contracts at December 27, 2008 and December 29, 2007, respectively.
Our unfunded deferred compensation liability is subject to changes in PBG’s stock price, as well as price changes in certain other equity
and fixed-income investments. Employee investment elections include PBG stock and a variety of other equity and fixed-income investment
options. Since the plan is unfunded, employees’ deferred compensation amounts are not directly invested in these investment vehicles.
Instead, we track the performance of each employee’s investment selections and adjust the employee’s deferred compensation account
accordingly. The adjustments to the employees’ accounts increases or decreases the deferred compensation liability reflected on our
Consolidated Balance Sheet with an offsetting increase or decrease to our selling, delivery and administrative expenses in our Consolidated
Statements of Operations. We use prepaid forward contracts to hedge the portion of our deferred compensation liability that is based on
PBG’s stock price. Therefore, changes in compensation expense as a result of changes in PBG’s stock price are substantially offset by the
changes in the fair value of these contracts. We estimate that a 10 percent unfavorable change in the year-end stock price would have reduced
the fair value from these forward contract commitments by $1 million and $2 million at December 27, 2008 and December 29, 2007, respectively.
Cautionary Statements
Except for the historical information and discussions contained herein, statements contained in this annual report on Form 10-K may
constitute forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements
are based on currently available competitive, financial and economic data and our operating plans. These statements involve a number of risks,
uncertainties and other factors that could cause actual results to be materially different. Among the events and uncertainties that could
adversely affect future periods are:
• changes in our relationship with PepsiCo;
• PepsiCo’s ability to affect matters concerning us through its equity ownership of PBG and Bottling LLC, representation on PBG’s Board
and approval rights under our Master Bottling Agreement;
• material changes in expected levels of bottler incentive payments from PepsiCo;
• restrictions imposed by PepsiCo on our raw material suppliers that could increase our costs;
• material changes from expectations in the cost or availability of ingredients, packaging materials, other raw materials or energy;
• limitations on the availability of water or obtaining water rights;
• an inability to achieve strategic business plan targets that could result in a non-cash intangible asset impairment charge;
• an inability to achieve cost savings;
• material changes in capital investment for infrastructure and an inability to achieve the expected timing for returns on cold-drink equipment
and related infrastructure expenditures;
• decreased demand for our product resulting from changes in consumers’ preferences;
• an inability to achieve volume growth through product and packaging initiatives;
• impact of competitive activities on our business;
• impact of customer consolidations on our business;
• unfavorable weather conditions in our markets;
• an inability to successfully integrate acquired businesses or to meet projections for performance in newly acquired territories;
• loss of business from a significant customer;
• loss of key members of management;
• failure or inability to comply with laws and regulations;
• litigation, other claims and negative publicity relating to alleged unhealthy properties or environmental impact of our products;
• changes in laws and regulations governing the manufacture and sale of food and beverages, the environment, transportation, employee
safety, labor and government contracts;
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• changes in accounting standards and taxation requirements (including unfavorable outcomes from audits performed by various tax
authorities);
• an increase in costs of pension, medical and other employee benefit costs;
• unfavorable market performance of assets in PBG’s pension plans or material changes in key assumptions used to calculate the liability of
PBG’s pension plans, such as discount rate;
• unforeseen social, economic and political changes;
• possible recalls of our products;
• interruptions of operations due to labor disagreements;
• limitations on our ability to invest in our business as a result of our repayment obligations under our existing indebtedness;
• changes in our debt ratings, an increase in financing costs or limitations on our ability to obtain credit; and
• material changes in expected interest and currency exchange rates.
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Bottling Group, LLC

Consolidated Statements of Operations
in millions
2008 2007 2006

Net Revenues $ 13,796 $ 13,591 $ 12,730
Cost of sales 7,586 7,370 6,900
Gross Profit 6,210 6,221 5,830

Selling, delivery and administrative expenses 5,171 5,167 4,842
Impairment charges 412 — —
Operating Income 627 1,054 988

Interest expense 244 232 227
Interest income 162 222 174
Minority interest expense (income) 24 28 (2)
Income Before Income Taxes 497 1,021 927

Income tax (benefit) expense (39) 27 3
Net Income $ 536 $ 994 $ 924
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Bottling Group, LLC

Consolidated Statements of Cash Flows
in millions
2008 2007 2006

Cash Flows—Operations
Net income $ 536 $ 994 $ 924
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization 672 668 648
Deferred income taxes (87) (8) (41)
Stock-based compensation 56 61 65
Impairment charges 412 — —
Defined benefit pension and postretirement expenses 114 121 119
Minority interest expense (income) 24 28 (2)
Other non-cash charges and credits 95 78 68
Changes in operating working capital, excluding effects of acquisitions:
Accounts receivable, net 40 (110) (120)
Inventories 3 (19) (57)
Prepaid expenses and other current assets (96) 116 (75)
Accounts payable and other current liabilities (136) 187 87
Income taxes payable 18 5 25
Net change in operating working capital (171) 179 (140)
Pension contributions to funded plans (85) (70) (68)
Other, net (93) (73) (46)
Net Cash Provided by Operations 1,473 1,978 1,527
Cash Flows—Investments
Capital expenditures (755) (854) (721)
Acquisitions, net of cash acquired (257) (49) (33)
Investments in noncontrolled affiliates (742) — —
Proceeds from sale of property, plant and equipment 24 14 18
Increase in notes receivable from PBG, net (839) (733) (763)
Proceeds from collection of notes receivable from PBG 1,027 — —
Other investing activities, net (1) 6 5
Net Cash Used for Investments (1,543) (1,616) (1,494)
Cash Flows—Financing
Short-term borrowings, net—three months or less (58) (40) 133
Proceeds from short-term borrowings — more than three months 117 167 96
Payments of short-term borrowings — more than three months (91) (211) (74)
Proceeds from issuances of long-term debt 1,290 24 793
Payments of long-term debt (9) (41) (603)
Contributions from minority interest holder 308 — —
Distributions to owners (1,102) (271) (284)
Other financing activities, net (1) — —
Net Cash Provided by (Used for) Financing 454 (372) 61
Effect of Exchange Rate Changes on Cash and Cash Equivalents (57) 28 1
Net Increase in Cash and Cash Equivalents 327 18 95
Cash and Cash Equivalents—Beginning of Year 459 441 346
Cash and Cash Equivalents—End of Year $ 786 $ 459 $ 441
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Bottling Group, LLC

Consolidated Balance Sheets
in millions
December 27, 2008 and December 29, 2007
2008 2007
ASSETS
Current Assets
Cash and cash equivalents $ 786 $ 459
Accounts receivable, net 1,371 1,520
Inventories 528 577
Prepaid expenses and other current assets 337 308
Total Current Assets 3,022 2,864
Property, plant and equipment, net 3,869 4,071

Other intangible assets, net 3,751 4,181
Goodwill 1,434 1,533
Investments in noncontrolled affiliates 619 —
Notes receivable from PBG 3,692 3,880
Other assets 108 183
Total Assets $ 16,495 $ 16,712
LIABILITIES AND OWNERS’ EQUITY

Current Liabilities
Accounts payable and other current liabilities $ 1,529 $ 1,829
Short-term borrowings 103 190
Current maturities of long-term debt 1,305 6
Total Current Liabilities 2,937 2,025
Long-term debt 3,789 3,776

Other liabilities 1,284 832
Minority interest 672 379
Total Liabilities 8,961 7,483
Owners’ Equity
Owners’ net investment 8,907 9,418
Accumulated other comprehensive loss (1,373) (189)
Total Owners’ Equity 7,534 9,229
Total Liabilities and Owners’ Equity $ 16,495 $ 16,712
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Bottling Group, LLC

Consolidated Statements of Changes in Owners’ Equity
in millions
December 27, 2008, December 29, 2007 and December 30, 2006
Accum u late d
O wn e rs’ O the r
Ne t De fe rre d C om pre h e n sive C om pre h e n sive
Inve stm e n t C om pe n sation Loss Total Incom e (Loss)
Balance at December 31, 2005 $ 7,990 $ (14) $ (395) $ 7,581
Net income 924 — — 924 $ 924
Net currency translation adjustment — — 26 26 26
Minimum pension liability
adjustment — — 48 48 48
Cash flow hedge adjustment (net of
tax of $(3)) — — 10 10 10
Total comprehensive income $ 1,008
FAS 158 - pension liability adjustment
(net of tax of $4 ) — — (278) (278)
Cash distributions to owners (284) — — (284)
Stock compensation 51 14 — 65
Balance at December 30, 2006 8,681 — (589) 8,092

Net income 994 — — 994 $ 994
Net currency translation adjustment — — 235 235 235
Pension and postretirement medical
benefit plans adjustment (net of
tax of $(3)) — — 163 163 163
tax of $2) — — 2 2 2
Total comprehensive income $ 1,394
Impact from adopting FIN 48 (45) — — (45)
Cash distributions to owners (271) — — (271)
Stock compensation 59 — — 59
Balance at December 29, 2007 9,418 — (189) 9,229

Comprehensive income (loss):
Net income 536 — — 536 $ 536
Net currency translation adjustment — — (593) (593) (593)
Pension and postretirement medical
benefit plans adjustment (net of
tax of $2) — — (562) (562) (562)
tax of $(3)) — — (64) (64) (64)
Total comprehensive loss $ (683)
FAS 158 - measurement date
adjustment (net of tax of $0) (27) — 35 8
Cash distributions to owners (1,102) — — (1,102)
Non-cash contributions from owners 26 — — 26
Stock compensation 56 — — 56
Balance at December 27, 2008 $ 8,907 $ — $ (1,373) $ 7,534
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Tabular dollars in millions
Note 1—Basis of Presentation

Bottling Group, LLC (referred to as “Bottling LLC,” “we,” “our,” “us” and the “Company”) is the principal operating subsidiary of The
Pepsi Bottling Group, Inc. (“PBG”) and consists of substantially all of the operations and the assets of PBG. PBG is the world’s largest
manufacturer, seller and distributor of Pepsi-Cola beverages. We have the exclusive right to manufacture, sell and distribute Pepsi-Cola
beverages in all or a portion of the U.S., Mexico, Canada, Spain, Russia, Greece and Turkey.
In conjunction with PBG’s initial public offering and other subsequent transactions, PBG and PepsiCo, Inc. (“PepsiCo”) contributed
bottling businesses and assets used in the bottling businesses to Bottling LLC. As a result of the contribution of these assets, PBG owns 93.4
percent of Bottling LLC and PepsiCo owns the remaining 6.6 percent as of December 27, 2008. PepsiCo also owns 40 percent of PR Beverages
Limited (“PR Beverages”), a consolidated venture for our Russian operations, which was formed on March 1, 2007.
Note 2—Summary of Significant Accounting Policies

The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States
of America (“U.S. GAAP”) often requires management to make judgments, estimates and assumptions that affect a number of amounts
included in our financial statements and related disclosures. We evaluate our estimates on an on-going basis using our historical experience as
well as other factors we believe appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates
as circumstances change. As future events and their effect cannot be determined with precision, actual results may differ from these estimates.
Basis of Consolidation — We consolidate in our financial statements entities in which we have a controlling financial interest, as well as
variable interest entities where we are the primary beneficiary. Minority interest in earnings and ownership has been recorded for the
percentage of these entities not owned by Bottling LLC. We have eliminated all intercompany accounts and transactions in consolidation.
Fiscal Year — Our U.S. and Canadian operations report using a fiscal year that consists of 52 weeks, ending on the last Saturday in
December. Every five or six years a 53rd week is added. Fiscal years 2008, 2007 and 2006 consisted of 52 weeks. Our remaining countries report
on a calendar-year basis. Accordingly, we recognize our quarterly business results as outlined below:
Quarter U.S. & Canada Mexico & Europe

First Quarter 12 weeks January and February
Second Quarter 12 weeks March, April and May
Third Quarter 12 weeks June, July and August
Fourth Quarter 16 weeks September, October, November and
December
Revenue Recognition — Revenue, net of sales returns, is recognized when our products are delivered to customers in accordance with the
written sales terms. We offer certain sales incentives on a local and national level through various customer trade agreements designed to
enhance the growth of our revenue. Customer trade agreements are accounted for as a reduction to our revenues.
Customer trade agreements with our customers include payments for in-store displays, volume rebates, featured advertising and other
growth incentives. A number of our customer trade agreements are based on quarterly and annual targets that generally do not exceed one
year. Amounts recognized in our financial statements are based on amounts estimated to be paid to our customers depending upon current
performance, historical experience, forecasted volume and other performance criteria.
Advertising and Marketing Costs — We are involved in a variety of programs to promote our products. We include advertising and
marketing costs in selling, delivery and administrative expenses. Advertising and marketing costs were $437 million, $424 million and
$403 million in 2008, 2007 and 2006, respectively, before bottler incentives received from PepsiCo and other brand owners.
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Bottler Incentives — PepsiCo and other brand owners, at their discretion, provide us with various forms of bottler incentives. These
incentives cover a variety of initiatives, including direct marketplace support and advertising support. We classify bottler incentives as
follows:
• Direct marketplace support represents PepsiCo’s and other brand owners’ agreed-upon funding to assist us in offering sales and
promotional discounts to retailers and is generally recorded as an adjustment to cost of sales. If the direct marketplace support is a
reimbursement for a specific, incremental and identifiable program, the funding is recorded as an offset to the cost of the program
either in net revenues or selling, delivery and administrative expenses.
• Advertising support represents agreed-upon funding to assist us with the cost of media time and promotional materials and is
generally recorded as an adjustment to cost of sales. Advertising support that represents reimbursement for a specific, incremental
and identifiable media cost, is recorded as a reduction to advertising and marketing expenses within selling, delivery and
Total bottler incentives recognized as adjustments to net revenues, cost of sales and selling, delivery and administrative expenses in our
Consolidated Statements of Operations were as follows:
Fiscal Ye ar En de d
2008 2007 2006
Net revenues $ 93 $ 66 $ 67
Cost of sales 586 626 612
Selling, delivery and administrative expenses 57 67 70
Total bottler incentives $ 736 $ 759 $ 749
Share-Based Compensation — The Company grants a combination of PBG stock option awards and PBG restricted stock units to our
middle and senior management. See Note 3 for further discussion on our share-based compensation.
Shipping and Handling Costs — Our shipping and handling costs reported in the Consolidated Statements of Operations are recorded
primarily within selling, delivery and administrative expenses. Such costs recorded within selling, delivery and administrative expenses totaled
$1.7 billion in 2008, 2007 and 2006.
Foreign Currency Gains and Losses and Currency Translation — We translate the balance sheets of our foreign subsidiaries at the
exchange rates in effect at the balance sheet date, while we translate the statements of operations at the average rates of exchange during the
year. The resulting translation adjustments of our foreign subsidiaries are included in accumulated other comprehensive loss on our
Consolidated Balance Sheets. Transactional gains and losses arising from the impact of currency exchange rate fluctuations on transactions in
foreign currency that is different from the local functional currency are included in other non-operating expenses (income), net in our
Consolidated Statements of Operations.
Pension and Postretirement Medical Benefit Plans — We participate in PBG sponsored pension and other postretirement medical benefit
plans in various forms in the U.S. and other similar plans in our international locations, covering employees who meet specified eligibility
requirements.
On December 30, 2006, we adopted the funded status provision of Statement of Financial Accounting Standards (“SFAS”) No. 158,
“Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (“SFAS 158”), which requires that we recognize the
overfunded or underfunded status of each of the pension and other postretirement plans. In addition, on December 30, 2007, we adopted the
measurement date provisions of SFAS 158, which requires that our assumptions used to measure our annual pension and postretirement
medical expenses be determined as of the year-end balance sheet date and all plan assets and liabilities be reported as of that date. For fiscal
years ended 2007 and prior, the majority of the pension and other postretirement plans used a September 30 measurement date and all plan
assets and obligations were generally reported as of that date. As part of measuring the plan assets and benefit obligations on December 30,
2007, we adjusted our opening balances of retained earnings and accumulated other comprehensive loss for the change in net periodic benefit
cost and fair value, respectively, from the previously used September 30 measurement date. The adoption of the measurement date provisions
resulted in a net decrease in the pension and other postretirement medical benefit plans liability of $9 million, a net decrease in retained
earnings of $27 million and a net decrease in accumulated other comprehensive loss of $35 million. There was no impact on our results of
operations.
The determination of pension and postretirement medical plan obligations and related expenses requires the use of assumptions to estimate
the amount of benefits that employees earn while working, as well as the present value of those benefit obligations. Significant assumptions
include discount rate; expected rate of return on plan assets;
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certain employee-related factors such as retirement age, mortality, and turnover; rate of salary increases for plans where benefits are based on
earnings; and for retiree medical plans, health care cost trend rates. We evaluate these assumptions on an annual basis at each measurement
date based upon historical experience of the plans and management’s best judgment regarding future expectations.
Differences between the assumed rate of return and actual return of plan assets are deferred in accumulated other comprehensive loss in
equity and amortized to earnings utilizing the market-related value method. Under this method, differences between the assumed rate of return
and actual rate of return from any one year will be recognized over a five year period in the market related value.
Other gains and losses resulting from changes in actuarial assumptions and from differences between assumed and actual experience are
determined at each measurement date and deferred in accumulated other comprehensive loss in equity. To the extent the amount of all
unrecognized gains and losses exceeds 10 percent of the larger of the benefit obligation or plan assets, such amount is amortized to earnings
over the average remaining service period of active participants.
The cost or benefit from benefit plan changes is also deferred in accumulated other comprehensive loss in equity and amortized to earnings
on a straight-line basis over the average remaining service period of the employees expected to receive benefits.
See Note 11 for further discussion on pension and postretirement medical benefit plans.
Income Taxes — We are a limited liability company, classified as a partnership for U.S. tax purposes and, as such, generally will pay limited
U.S. federal, state and local income taxes. Our federal and state distributive shares of income, deductions and credits are allocated to our
owners based on their percentage of ownership. However, certain domestic and foreign affiliates pay taxes in their respective jurisdictions and
record related deferred income tax assets and liabilities. Our effective tax rate is based on pre-tax income, statutory tax rates, tax laws and
regulations and tax planning strategies available to us in the various jurisdictions in which we operate.
Our deferred tax assets and liabilities reflect our best estimate of the tax benefits and costs we expect to realize in the future. We establish
valuation allowances to reduce our deferred tax assets to an amount that will more likely than not be realized.
As required under the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes” (“FIN 48”), which we adopted as of the beginning of fiscal year 2007, we recognize the impact of our tax positions in our
financial statements if those positions will more likely than not be sustained on audit, based on the technical merit of the position.
Significant management judgment is required in evaluating our tax positions and in determining our effective tax rate.
See Note 12 for further discussion on our income taxes.
Cash and Cash Equivalents — Cash and cash equivalents include all highly liquid investments with original maturities not exceeding three
months at the time of purchase. The fair value of our cash and cash equivalents approximate the amounts shown on our Consolidated Balance
Sheets due to their short-term nature.
Allowance for Doubtful Accounts — A portion of our accounts receivable will not be collected due to non-payment, bankruptcies and sales
returns. Our accounting policy for the provision for doubtful accounts requires reserving an amount based on the evaluation of the aging of
accounts receivable, sales return trend analysis, detailed analysis of high-risk customers’ accounts, and the overall market and economic
conditions of our customers.
Inventories — We value our inventories at the lower of cost or net realizable value. The cost of our inventory is generally computed on the
first-in, first-out method.
Property, Plant and Equipment — We record property, plant and equipment (“PP&E”) at cost, except for PP&E that has been impaired, for
which we write down the carrying amount to estimated fair market value, which then becomes the new cost basis.
Other Intangible Assets, net and Goodwill — Goodwill and other intangible assets with indefinite useful lives are not amortized; however,
they are evaluated for impairment at least annually, or more frequently if facts and circumstances indicate that the assets may be impaired.
Intangible assets that are determined to have a finite life are amortized on a straight-line basis over the period in which we expect to receive
economic benefit, which generally ranges from five to twenty years, and are evaluated for impairment only if facts and circumstances indicate
that the carrying value of the asset may not be recoverable.
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The determination of the expected life depends upon the use and the underlying characteristics of the intangible asset. In our evaluation of
the expected life of these intangible assets, we consider the nature and terms of the underlying agreements; our intent and ability to use the
specific asset; the age and market position of the products within the territories in which we are entitled to sell; the historical and projected
growth of those products; and costs, if any, to renew the related agreement.
If the carrying value is not recoverable, impairment is measured as the amount by which the carrying value exceeds its fair value. Initial fair
value is generally based on either appraised value or other valuation techniques.
See Note 5 for further discussion on our goodwill and other intangible assets.
Minority Interest — Minority interest is recorded for the entities that we consolidate but are not wholly owned by Bottling LLC. Minority
interest recorded in our Consolidated Financial Statements is primarily comprised of PepsiCo’s share of the consolidated net income and net
assets of the PR Beverages venture. At December 27, 2008, PepsiCo owned 40 percent of the PR Beverages venture.
Financial Instruments and Risk Management — We use derivative instruments to hedge against the risk of adverse movements
associated with commodity prices, interest rates and foreign currency. Our policy prohibits the use of derivative instruments for trading or
speculative purposes, and we have procedures in place to monitor and control their use.
All derivative instruments are recorded at fair value as either assets or liabilities in our Consolidated Balance Sheets. Derivative instruments
are generally designated and accounted for as either a hedge of a recognized asset or liability (“fair value hedge”) or a hedge of a forecasted
transaction (“cash flow hedge”). The derivative’s gain or loss recognized in earnings is recorded consistent with the expense classification of
the underlying hedged item.
If a fair value or cash flow hedge were to cease to qualify for hedge accounting or were terminated, it would continue to be carried on the
balance sheet at fair value until settled, but hedge accounting would be discontinued prospectively. If the underlying hedged transaction
ceases to exist, any associated amounts reported in accumulated other comprehensive loss are reclassified to earnings at that time.
We also may enter into a derivative instrument for which hedge accounting is not required because it is entered into to offset changes in
the fair value of an underlying transaction recognized in earnings (“economic hedge”). These instruments are reflected in the Consolidated
Balance Sheets at fair value with changes in fair value recognized in earnings.
Commitments and Contingencies — We are subject to various claims and contingencies related to lawsuits, environmental and other
matters arising out of the normal course of business. Liabilities related to commitments and contingencies are recognized when a loss is
probable and reasonably estimable.
New Accounting Standards

SFAS No. 157
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157”), which establishes a framework for reporting
fair value and expands disclosures about fair value measurements. The Company adopted SFAS 157 as it applies to financial assets and
liabilities in our first quarter of 2008. The adoption of these provisions did not have a material impact on our Consolidated Financial
Statements. For further information about the fair value measurements of our financial assets and liabilities, see Note 7.
In February 2008, the FASB issued FASB Staff Position No. FAS 157-2, “Effective Date of FASB Statement No. 157” (“FSP 157-2”). FSP 157-
2 delays the effective date of SFAS 157 for nonfinancial assets and nonfinancial liabilities, except for certain items that are recognized or
disclosed at fair value in the financial statements on a recurring basis (at least annually). FSP 157-2 will become effective beginning with our
first quarter of 2009 and will not have a material impact on our Consolidated Financial Statements.
SFAS No. 141(R)
In December 2007, the FASB issued SFAS No. 141(revised 2007), “Business Combinations” (“SFAS 141(R)”), which addresses the
recognition and accounting for identifiable assets acquired, liabilities assumed, and noncontrolling interest in business combinations. Certain
costs, which were previously capitalized as a component of goodwill, such as acquisition closing costs, post acquisition restructuring charges
and changes to tax liabilities and valuation allowances after the measurement period, will now be expensed. SFAS 141(R) also establishes
expanded disclosure requirements for business combinations. SFAS 141(R) will become effective for new transactions closing in our 2009
fiscal year.
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SFAS No. 160

In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB
No. 51” (“SFAS 160”), which addresses the accounting and reporting framework for minority interests by a parent company. SFAS 160 also
addresses disclosure requirements to distinguish between interests of the parent and interests of the noncontrolling owners of a subsidiary.
SFAS 160 will become effective beginning with our first quarter of 2009. We will be reporting minority interest as a component of equity in our
Consolidated Balance Sheets and below income tax expense in our Consolidated Statement of Operations. As minority interest will be recorded
below income tax expense, it will have an impact to our total effective tax rate, but our total taxes will not change. For comparability, we will be
retrospectively applying the presentation of our prior year balances in our Consolidated Financial Statements.
SFAS No. 161
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB
Statement No. 133” (“SFAS 161”), which requires enhanced disclosures for derivative and hedging activities. SFAS 161 will become effective
beginning with our first quarter of 2009.
EITF Issue No. 07-1
In December 2007, the FASB ratified its Emerging Issues Task Force’s (“EITF”) Consensus for Issue No. 07-1, “Accounting for
Collaborative Arrangements” (“EITF 07-1”), which defines collaborative arrangements and establishes reporting requirements for transactions
between participants in a collaborative arrangement and between participants in the arrangement and third parties. EITF 07-1 will become
effective beginning with our first quarter of 2009. We do not believe this standard will have a material impact on our Consolidated Financial
Statements.
Note 3—Share-Based Compensation

Accounting for Share-Based Compensation
Effective January 1, 2006, the Company adopted SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”). Among its
provisions, SFAS 123(R) requires the Company to recognize compensation expense for equity awards over the vesting period based on their
grant-date fair value. The Company adopted SFAS 123(R) in using the modified prospective approach. Under this transition method, the
measurement and our method of amortization of costs for share-based payments granted prior to, but not vested as of January 1, 2006, would
be based on the same estimate of the grant-date fair value and the same amortization method that was previously used in our SFAS 123 pro
forma disclosure. Results for prior periods have not been restated as provided for under the modified prospective approach. For equity awards
granted after the date of adoption, we amortize share-based compensation expense on a straight-line basis over the vesting term.
Compensation expense is recognized only for share-based payments expected to vest. We estimate forfeitures, both at the date of grant as
well as throughout the vesting period, based on our historical experience and future expectations. Prior to the adoption of SFAS 123(R), the
effect of forfeitures on the pro forma expense amounts was recognized based on estimated forfeitures.
Total share-based compensation expense recognized in the Consolidated Statements of Operations for the years ended 2008, 2007 and 2006
was $56 million, $61 million and $65 million, respectively.
Share-Based Long-Term Incentive Compensation Plans

Prior to 2006, we granted non-qualified PBG stock options to certain employees, including middle and senior management under PBG’s
share-based long-term incentive compensation plans (“incentive plans”). Additionally, we granted PBG restricted stock units to certain senior
executives.
Beginning in 2006, we grant a mix of PBG stock options and PBG restricted stock units to middle and senior management employees under
PBG’s incentive plan.
Shares of PBG stock available for future issuance to Bottling LLC’s employees under the existing plans were 16.2 million at December 27,
2008.
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The fair value of PBG stock options was estimated at the date of grant using the Black-Scholes-Merton option-valuation model. The table
below outlines the weighted-average assumptions for options granted during years ended December 27, 2008, December 29, 2007 and
December 30, 2006:
2008 2007 2006

Risk-free interest rate 2.8% 4.5% 4.7%
Expected term (in years) 5.3 5.6 5.7
Expected volatility 24% 25% 27%
Expected dividend yield 2.0% 1.8% 1.5%
The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining expected
term. The expected term of the options represents the estimated period of time employees will retain their vested stocks until exercise. Due to
the lack of historical experience in stock option exercises, we estimate expected term utilizing a combination of the simplified method as
prescribed by the United States Securities and Exchange Commission’s Staff Accounting Bulletin No. 110 and historical experience of similar
awards, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. Expected stock price
volatility is based on a combination of historical volatility of PBG’s stock and the implied volatility of its traded options. The expected
dividend yield is management’s long-term estimate of PBG’s annual dividends to be paid as a percentage of share price.
The fair value of restricted stock units is based on the fair value of PBG stock on the date of grant.
We receive a tax deduction for certain stock option exercises when the options are exercised, generally for the excess of the stock price over
the exercise price of the options. Additionally, we receive a tax deduction for certain restricted stock units equal to the fair market value of
PBG’s stock at the date the restricted stock units are converted to PBG stock. SFAS 123(R) requires that benefits received from tax deductions
resulting from the grant-date fair value of equity awards be reported as operating cash inflows in our Consolidated Statement of Cash Flows.
Benefits from tax deductions in excess of the grant-date fair value from equity awards are treated as financing cash inflows in our Consolidated
Statement of Cash Flows. For the year ended December 27, 2008, the tax benefits from equity awards did not have a significant impact on our
Consolidated Financial Statements.
As of December 27, 2008, there was approximately $75 million of total unrecognized compensation cost related to nonvested share-based
compensation arrangements granted under the incentive plans. That cost is expected to be recognized over a weighted-average period of 2.0
years.
Stock Options
PBG stock options expire after 10 years and generally vest ratably over three years.
The following table summarizes option activity for Bottling LLC employees during the year ended December 27, 2008:
W e ighte d- W e ighte d-
Ave rage Ave rage
Exe rcise Re m aining Aggre gate
S h are s Price C on tractu al Intrin sic
(in m illion s) pe r S h are Te rm (ye ars) Value
Granted 3.6 $ 33.69
Exercised (1.9) $ 21.75
Forfeited (0.7) $ 28.39
Vested or expected to vest at December 27, 2008 27.1 $ 26.50 5.4 $ 33
Exercisable at December 27, 2008 21.0 $ 24.89 4.5 $ 33
The aggregate intrinsic value in the table above is before income taxes, based on PBG’s closing stock price of $22.00 and $39.96 as of the
last business day of the period ended December 27, 2008 and December 29, 2007, respectively.
For the years ended December 27, 2008, December 29, 2007 and December 30, 2006, the weighted-average grant-date fair value of PBG stock
options granted was $7.09, $8.18 and $8.75, respectively. The total intrinsic value of PBG stock options exercised during the years ended
December 27, 2008, December 29, 2007 and December 30, 2006 was $21 million, $99 million and $113 million, respectively.
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Restricted Stock Units

PBG restricted stock units granted to employees generally vest over three years. In addition, restricted stock unit awards to certain senior
executives contain vesting provisions that are contingent upon the achievement of pre-established performance targets. All restricted stock
unit awards are settled in shares of PBG common stock.
The following table summarizes restricted stock unit activity for Bottling LLC employees during the year ended December 27, 2008:
W e ighte d-
W e ighte d- Ave rage
Ave rage Re m aining Aggre gate
S h are s Grant-Date C on tractu al Intrin sic
(in thou san ds) Fair Value Te rm (ye ars) Value
Granted 1,305 $ 35.34
Converted (160) $ 30.10
Forfeited (182) $ 31.61
Vested or expected to vest at December 27, 2008 2,775 $ 32.34 1.4 $ 61
Convertible at December 27, 2008 139 $ 29.39 — $ 3
For the years ended December 27, 2008, December 29, 2007 and December 30, 2006, the weighted-average grant-date fair value of PBG
restricted stock units granted was $35.34, $31.01 and $29.52, respectively. The total intrinsic value of restricted stock units converted during
the year ended December 27, 2008 was $4 million. No PBG restricted stock units were converted during fiscal years 2007 and 2006.
Note 4—Balance Sheet Details
2008 2007
Accounts Receivable, net
Trade accounts receivable $ 1,208 $ 1,319
Allowance for doubtful accounts (71) (54)
Accounts receivable from PepsiCo 154 188
Other receivables 80 67
$ 1,371 $ 1,520
Inventories
Raw materials and supplies $ 185 $ 195
Finished goods 343 382
$ 528 $ 577
Prepaid Expenses and Other Current Assets

Prepaid expenses $ 187 $ 244
Accrued interest receivable from PBG 118 12
Other current assets 32 52
$ 337 $ 308
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2008 2007
Property, Plant and Equipment, net
Land $ 300 $ 320
Buildings and improvements 1,542 1,484
Manufacturing and distribution equipment 3,999 4,091
Marketing equipment 2,246 2,389
Capital leases 23 36
Other 139 154
8,249 8,474
Accumulated depreciation (4,380) (4,403)
$ 3,869 $ 4,071
Capital leases primarily represent manufacturing and distribution equipment and other equipment.
We calculate depreciation on a straight-line basis over the estimated lives of the assets as follows:
Buildings and improvements 20-33 years

Manufacturing and distribution equipment 2-15 years
Marketing equipment 2-7 years
Industrial Revenue Bonds

Pursuant to the terms of an industrial revenue bond, we transferred title of certain fixed assets with a net book value of $72 million to a state
governmental authority in the U.S. to receive a property tax abatement. The title to these assets will revert back to us upon retirement or
cancellation of the bond. These fixed assets are still recognized in the Company’s Consolidated Balance Sheet as all risks and rewards remain
with the Company.
2008 2007
Accounts Payable and Other Current Liabilities
Accounts payable $ 444 $ 615
Accounts payable to PepsiCo 217 255
Trade incentives 189 235
Accrued compensation and benefits 240 276
Other accrued taxes 128 139
Accrued interest 62 47
Other current liabilities 249 262
$ 1,529 $ 1,829
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Note 5—Other Intangible Assets, net and Goodwill

The components of other intangible assets are as follows:
2008 2007
Intangibles subject to amortization:
Gross carrying amount:
Customer relationships and lists $ 45 $ 54
Franchise and distribution rights 41 46
120 130
Accumulated amortization:
Customer relationships and lists (15) (15)
Franchise and distribution rights (31) (31)
Other identified intangibles (21) (17)
(67) (63)
Intangibles subject to amortization, net 53 67
Intangibles not subject to amortization:

Carrying amount:
Franchise rights 3,244 3,235
Licensing rights 315 315
Distribution rights 49 294
Brands 39 213
Intangibles not subject to amortization 3,698 4,114
Total other intangible assets, net $ 3,751 $ 4,181
During the first quarter of 2008, PBG acquired Pepsi-Cola Batavia Bottling Corp, which was contributed to Bottling LLC. This Pepsi-Cola
franchise bottler serves certain New York counties in whole or in part. As a result of the acquisition, we recorded approximately $19 million of
non-amortizable franchise rights and $4 million of non-compete agreements.
During the first quarter of 2008, we acquired distribution rights for SoBe brands in portions of Arizona and Texas and recorded
approximately $6 million of non-amortizable distribution rights.
During the fourth quarter of 2008, we acquired Lane Affiliated Companies, Inc. (“Lane”). This Pepsi-Cola franchise bottler serves portions
of Colorado, Arizona and New Mexico. As a result of the acquisition, we recorded approximately $176 million of non-amortizable franchise
rights.
During the first quarter of 2007, we acquired from Nor-Cal Beverage Company, Inc., franchise and bottling rights for select Cadbury
Schweppes brands in the Northern California region. As a result of the acquisition, we recorded approximately $50 million of non-amortizable
franchise rights.
As a result of the formation of the PR Beverages venture in the second quarter of 2007, we recorded licensing rights valued at $315 million,
representing the fair value of the exclusive license and related rights granted by PepsiCo to PR Beverages to manufacture and sell the
concentrate for PepsiCo beverage products sold in Russia. The licensing rights have an indefinite useful life and are not subject to
amortization. For further discussion on the PR Beverages venture see Note 14.
Intangible Asset Amortization

Intangible asset amortization expense was $9 million, $10 million and $12 million in 2008, 2007 and 2006, respectively. Amortization expense
for each of the next five years is estimated to be approximately $7 million or less.
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Goodwill
The changes in the carrying value of goodwill by reportable segment for the years ended December 29, 2007 and December 27, 2008 are as
follows:
U.S . &
C an ada Eu rope Me xico Total
Purchase price allocations 1 — (16) (15)
Impact of foreign currency translation and other 60 1 (3) 58
Balance at December 29, 2007 1,290 17 226 1,533
Purchase price allocations 20 13 (6) 27
Impact of foreign currency translation and other (75) (4) (47) (126)
During 2008, the purchase price allocations in the U.S. & Canada segment primarily relate to goodwill allocations resulting from the Lane
acquisition discussed above. In the Europe segment, the purchase price allocations primarily relate to Russia’s purchase of Sobol-Aqua JSC
(“Sobol”) in the second quarter of 2008. Sobol manufactures its brands and co-packs various Pepsi products in Siberia and Eastern Russia.
During 2008 and 2007, the purchase price allocations in the Mexico segment primarily relate to goodwill allocations resulting from changes
in taxes associated with prior year acquisitions.
Annual Impairment Testing

The Company completes its impairment testing of goodwill in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets”
annually, or more frequently as indicators warrant. Goodwill and intangible assets with indefinite lives are not amortized; however, they are
evaluated for impairment at least annually or more frequently if facts and circumstances indicate that the assets may be impaired. In previous
years the Company completed this test in the fourth quarter using a measurement date of third quarter-end. During the second quarter ended
June 14, 2008, the Company changed its impairment testing of goodwill to the third quarter, using a measurement date at the beginning of the
third quarter. With the exception of Mexico’s intangible assets, the Company has also changed its impairment testing of intangible assets with
indefinite useful lives to the third quarter, using a measurement date at the beginning of the third quarter. Impairment testing of Mexico’s
intangible assets with indefinite useful lives was completed in the fourth quarter to coincide with the completion of the strategic review of the
business.
As a result of this testing, the Company recorded a $412 million non-cash impairment charge ($297 million net of tax). The impairment charge
relates primarily to distribution rights and brands for Electropura water business in Mexico. The impairment charge relating to these intangible
assets was determined based upon the findings of an extensive strategic review and the finalization of certain restructuring plans for our
Mexican business. In light of weakening macroeconomic conditions and our outlook for the business in Mexico, we lowered our expectations
of the future performance, which reduced the value of these intangible assets and triggered an impairment charge. The fair value of our
franchise rights and distribution rights was estimated using a multi-period excess earnings method that is based upon estimated discounted
future cash flows. The fair value of our brands was estimated using a multi-period royalty savings method, which reflects the savings realized
by owning the brand and, therefore, not having to pay a royalty fee to a third party.
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Note 6—Investment in Noncontrolled Affiliate

approximately $1.8 billion. The acquisition does not include the company’s baby food and mineral water businesses, which were spun off to
shareholders in a separate transaction prior to our acquisition. Lebedyansky was acquired 58.3 percent by PepsiCo and 41.7 percent by PR
Beverages, our Russian venture with PepsiCo. We and PepsiCo have an ownership interest in PR Beverages of 60 percent and 40 percent,
respectively. As a result, PepsiCo and we have acquired a 75 percent and 25 percent economic stake in Lebedyansky, respectively.
We have recorded an equity investment for PR Beverages’ share in Lebedyansky. In addition, we have recorded a minority interest
contribution for PepsiCo’s proportional contribution to PR Beverages relating to Lebedyansky.
Note 7—Fair Value Measurements

We adopted SFAS 157 at the beginning of fiscal 2008 for all financial instruments valued on a recurring basis, at least annually. The
standard defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. It also establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair
value. The three levels of the hierarchy are defined as follows:
Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than quoted prices included in Level 1, such as quoted prices for identical assets or liabilities in non-
active markets, quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for
substantially the full term of the asset or liability.
Level 3 - Unobservable inputs reflecting management’s own assumptions about the input used in pricing the asset or liability.
If the inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest
level input that is significant to the fair value measurement of the instrument.
The following table summarizes the financial assets and liabilities we measure at fair value on a recurring basis as of December 27, 2008:
Le ve l 2
Financial Assets:
Foreign currency forward contracts (1) $ 13
Prepaid forward contracts (2) 13
Interest rate swaps (3) 8
$ 34
Financial Liabilities:
Commodity contracts (1) $ 57
Foreign currency contracts (1) 6
Interest rate swaps (3) 1
$ 64
(1) Based primarily on the forward rates of the specific indices upon which contract settlement is based.
(2) Based primarily on the value of PBG’s stock price.
(3) Based primarily on the London Inter-Bank Offer Rate (“LIBOR”) index.
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Note 8—Short-Term Borrowings and Long-Term Debt
2008 2007
Short-term borrowings
Current maturities of long-term debt $ 1,305 $ 6
Other short-term borrowings 103 190
$ 1,408 $ 196
Long-term debt
5.63% (5.2% effective rate) (2) (3) senior notes due 2009 $ 1,300 $ 1,300
4.63% (4.6% effective rate) (3) senior notes due 2012 1,000 1,000
6.95% (7.4% effective rate) (4) senior notes due 2014 1,300 —
5.50% (5.3% effective rate) (2) senior notes due 2016 800 800
Capital lease obligations (Note 9) 8 9
Other (average rate 14.73%) 36 28
5,094 3,787
SFAS 133 adjustment (1) 6 —

Unamortized discount, net (6) (5)
Current maturities of long-term debt (1,305) (6)
$ 3,789 $ 3,776
(1) In accordance with the requirements of SFAS No. 133, “Accounting for Derivative Instruments and Hedging
Activities” (“SFAS 133”), the portion of our fixed-rate debt obligations that is hedged is reflected in our
Consolidated Balance Sheets as an amount equal to the sum of the debt’s carrying value plus a SFAS 133
fair value adjustment, representing changes recorded in the fair value of the hedged debt obligations
attributable to movements in market interest rates.
(2) Effective interest rates include the impact of the gain/loss realized on swap instruments and represent the
rates that were achieved in 2008.
(3) These notes are guaranteed by PepsiCo.
(4) Effective interest rate excludes the impact of the loss realized on Treasury Rate Locks in 2008.
Aggregate Maturities — Long-Term Debt

Aggregate maturities of long-term debt as of December 27, 2008 are as follows: 2009: $1,301 million, 2010: $28 million, 2011: $7 million, 2012:
$1,000 million, 2013: $400 million, 2014 and thereafter: $2,350 million. The maturities of long-term debt do not include the capital lease
obligations, the non-cash impact of the SFAS 133 adjustment and the interest effect of the unamortized discount.
On October 24, 2008 we issued $1.3 billion of 6.95 percent senior notes due 2014 (the “Notes”). The Notes were guaranteed by PepsiCo on
February 17, 2009. A portion of this debt was used to repay our senior notes due in 2009 at their maturity on February 17, 2009. In the interim,
these proceeds were placed in short-term investments. In addition, we used a portion of the proceeds to finance the Lane acquisition and to
repay PBG’s short-term commercial paper debt, a portion of which was used to finance the acquisition of Lebedyansky.
2008 Short-Term Debt Activities

We had available bank credit lines of approximately $772 million at year-end 2008, of which the majority was uncommitted. These lines were
primarily used to support the general operating needs of our international locations. As of year-end 2008, we had $103 million outstanding
under these lines of credit at a weighted-average interest rate of 10.0 percent. As of year-end 2007, we had available short-term bank credit
lines of approximately $748 million with $190 million outstanding at a weighted-average interest rate of 5.3 percent.
Debt Covenants
Certain of our senior notes have redemption features and non-financial covenants that will, among other things, limit our ability to create or
assume liens, enter into sale and lease-back transactions, engage in mergers or consolidations and transfer or lease all or substantially all of
our assets. Additionally, our new secured debt should not be greater than 10 percent of our net tangible assets. Net tangible assets are
defined as total assets less current liabilities and net intangible assets.
As of December 27, 2008 we were in compliance with all debt covenants.
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Interest Payments
Amounts paid to third parties for interest, net of settlements from our interest rate swaps, were $216 million, $227 million and $213 million in
2008, 2007 and 2006, respectively.
Letters of Credit, Bank Guarantees and Surety Bonds

At December 27, 2008, we had outstanding letters of credit, bank guarantees and surety bonds from financial institutions valued at
$50 million.
Note 9—Leases
We have non-cancelable commitments under both capital and long-term operating leases, principally for real estate and office equipment.
Certain of our operating leases for real estate contain escalation clauses, holiday rent allowances and other rent incentives. We recognize rent
expense on our operating leases, including these allowances and incentives, on a straight-line basis over the lease term. Capital and operating
lease commitments expire at various dates through 2072. Most leases require payment of related executory costs, which include property taxes,
maintenance and insurance.
The cost of real estate and office equipment under capital leases is included in the Consolidated Balance Sheets as property, plant and
equipment. Amortization of assets under capital leases is included in depreciation expense.
Capital lease additions totaled $4 million, $7 million and $33 million for 2008, 2007 and 2006, respectively. Included in the 2006 additions was
a $25 million capital lease agreement with PepsiCo to lease vending equipment. In 2007, we repaid this lease obligation with PepsiCo.
The future minimum lease payments by year and in the aggregate, under capital leases and non-cancelable operating leases consisted of the
following at December 27, 2008:
Le ase s
C apital O pe ratin g
2009 $ 4 $ 58
2010 2 43
2011 1 26
2012 — 20
2013 — 14
Thereafter 2 118
$ 9 $ 279
Less: Amount representing interest 1

Present value of net minimum lease payments 8
Less: current portion of net minimum lease payments 3
Long-term portion of net minimum lease payments $ 5
Components of Net Rental Expense Under Operating Leases
2008 2007 2006

Minimum rentals $ 121 $ 114 $ 99
Sublease rental income (1) (2) (3)
Net Rental Expense $ 120 $ 112 $ 96
Note 10—Financial Instruments and Risk Management

We are subject to the risk of loss arising from adverse changes in commodity prices, foreign currency exchange rates, interest rates, and
PBG’s stock price. In the normal course of business, we manage these risks through a variety of strategies, including the use of derivatives.
Certain of these derivatives are designated as either cash flow or fair value hedges.
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Cash Flow Hedges

We are subject to market risk with respect to the cost of commodities because our ability to recover increased costs through higher pricing
may be limited by the competitive business environment in which we operate. We use future and option contracts to hedge the risk of adverse
movements in commodity prices related primarily to anticipated purchases of raw materials and energy used in our operations. These contracts
generally range from one to 24 months in duration and qualify for cash flow hedge accounting treatment. At December 27, 2008 the fair value
of our commodity contracts was a $57 million net loss, of which $48 million and $9 million was recorded in other current liabilities and other
liabilities, respectively, in our Consolidated Balance Sheets. In 2008, $48 million of a net loss was recognized in accumulated other
comprehensive loss (“AOCL”). Additionally, in 2008, $14 million of a net gain was reclassified into earnings in selling, delivery and
administrative expenses for our commodity contracts.
We are subject to foreign currency transactional risks in certain of our international territories for transactions that are denominated in
currencies that are different from their functional currency. We enter into forward exchange contracts to hedge portions of our forecasted U.S.
dollar purchases in our foreign businesses. These contracts generally range from one to 12 months in duration and qualify for cash flow hedge
accounting treatment. At December 27, 2008, the fair value of our foreign exchange contracts was a $4 million gain recorded in other current
assets in our Consolidated Balance Sheets. In 2008, $11 million of a gain was recognized in AOCL and $2 million of a loss was reclassified into
earnings in cost of goods sold for our foreign exchange contracts.
For these cash flow hedges, the effective portion of the change in the fair value of a derivative instrument is deferred in AOCL until the
underlying hedged item is recognized in earnings. The ineffective portion of a fair value change on a qualifying cash flow hedge is recognized
in earnings immediately and is recorded consistent with the expense classification of the underlying hedged item.
We have also entered into treasury rate lock agreements to hedge against adverse interest rate changes on certain debt financing
arrangements, which qualify for cash flow hedge accounting. Gains and losses that are considered effective are deferred in AOCL and
amortized to interest expense over the duration of the debt term.
In 2008, we recognized a $20 million loss in AOCL for treasury rate locks that settled in the fourth quarter. Additionally, in 2008, we
reclassified from AOCL $7 million of a loss to interest expense from our treasury rate locks that previously settled.
The following summarizes activity in AOCL related to derivatives designated as cash flow hedges held by the Company during the
applicable periods:
Be fore Taxe s Taxe s Ne t of Taxe s

Accumulated net gains as of December 31, 2005 $ 5 $ 2 $ 7
Net changes in the fair value of cash flow hedges 14 (2) 12
Net gains reclassified from AOCL into earnings (1) (1) (2)
Accumulated net gains as of December 30, 2006 18 (1) 17
Net changes in the fair value of cash flow hedges (4) 3 (1)
Net losses reclassified from AOCL into earnings 4 (1) 3
Accumulated net gains as of December 29, 2007 18 1 19
Net changes in the fair value of cash flow hedges (57) (2) (59)
Net gains reclassified from AOCL into earnings (4) (1) (5)
Accumulated net losses as of December 27, 2008 $ (43) $ (2) $ (45)
Assuming no change in the commodity prices and foreign currency rates as measured on December 27, 2008, $47 million of unrealized
losses will be recognized in earnings over the next 24 months. During 2008 we recognized $8 million of ineffectiveness for the treasury locks
that were settled in the fourth quarter. The ineffective portion of the change in fair value of our other contracts was not material to our results
of operations in 2008, 2007 or 2006.
Fair Value Hedges

We finance a portion of our operations through fixed-rate debt instruments. We effectively converted $1.1 billion of our senior notes to
floating-rate debt through the use of interest rate swaps with the objective of reducing our overall borrowing costs. These interest rate swaps
meet the criteria for fair value hedge accounting and are 100 percent effective in eliminating the market rate risk inherent in our long-term debt.
Accordingly, any gain or loss associated with these swaps is fully offset by the opposite market impact on the related debt. During 2008, the
fair value of the interest rate swaps increased to a net asset of $6.1 million at December 27, 2008 from a liability of $0.3 million at December 29,
2007. The fair value of our swaps was recorded in other assets and other liabilities in our Consolidated Balance Sheets.
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Foreign Currency Hedges

We entered into forward exchange contracts to economically hedge a portion of our intercompany receivable balances that are denominated
in Mexican pesos. At December 27, 2008, the fair value of these contracts was $9 million and was classified in other current assets in our
Consolidated Balance Sheet. The earnings impact from these instruments is classified in other non-operating expenses (income), net in the

Our unfunded deferred compensation liability is subject to changes in PBG’s stock price as well as price changes in other equity and fixed-
income investments. Participating employees in our deferred compensation program can elect to defer all or a portion of their compensation to
be paid out on a future date or dates. As part of the deferral process, employees select from phantom investment options that determine the
earnings on the deferred compensation liability and the amount that they will ultimately receive. Employee investment elections include PBG
stock and a variety of other equity and fixed-income investment options.
Since the plan is unfunded, employees’ deferred compensation amounts are not directly invested in these investment vehicles. Instead, we
track the performance of each employee’s investment selections and adjust his or her deferred compensation account accordingly. The
adjustments to employees’ accounts increases or decreases the deferred compensation liability reflected on our Consolidated Balance Sheets
with an offsetting increase or decrease to our selling, delivery and administrative expenses.
We use prepaid forward contracts to hedge the portion of our deferred compensation liability that is based on PBG’s stock price. At
December 27, 2008, we had a prepaid forward contract for 585,000 shares at a price of $22.00, which was accounted for as an economic hedge.
This contract requires cash settlement and has a fair value at December 27, 2008, of $13 million recorded in prepaid expenses and other current
assets in our Consolidated Balance Sheet. The fair value of this contract changes based on the change in PBG’s stock price compared with the
contract exercise price. We recognized an expense of $10 million and income of $5 million in 2008 and 2007, respectively, resulting from the
change in fair value of these prepaid forward contracts. The earnings impact from these instruments is recorded in selling, delivery and
Other Financial Assets and Liabilities

Financial assets with carrying values approximating fair value include cash and cash equivalents and accounts receivable. Financial
liabilities with carrying values approximating fair value include accounts payable and other accrued liabilities and short-term debt. The carrying
value of these financial assets and liabilities approximates fair value due to their short maturities and since interest rates approximate current
market rates for short-term debt.
Long-term debt, which includes the current maturities of long-term debt, at December 27, 2008, had a carrying value and fair value of
$5.1 billion and $5.3 billion, respectively, and at December 29, 2007, had a carrying value and fair value of $3.8 billion. The fair value is based on
interest rates that are currently available to us for issuance of debt with similar terms and remaining maturities.
Note 11—Pension and Postretirement Medical Benefit Plans

Employee Benefit Plans
We participate in PBG sponsored pension and other postretirement medical benefit plans in various forms in the United States and other
similar pension plans in our international locations, covering employees who meet specified eligibility requirements. The assets, liabilities and
expense associated with our international plans were not significant to our results of operations and are not included in the tables and
discussion presented below.
Defined Benefit Pension Plans

In the U.S. we participate in non-contributory defined benefit pension plans for certain full-time salaried and hourly employees. Benefits are
generally based on years of service and compensation, or stated amounts for each year of service. Effective January 1, 2007, newly hired
salaried and non-union hourly employees are not eligible to participate in these plans. Additionally, effective April 1, 2009, we will no longer
continue to accrue benefits for certain of our salaried and non-union employees that do not meet age and service requirements.
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Postretirement Medical Plans

PBG’s postretirement medical plans provide medical and life insurance benefits principally to U.S. retirees and their dependents. Employees
are eligible for benefits if they meet age and service requirements. The plans are not funded and since 1993 have included retiree cost sharing.
Defined Contribution Benefits

Nearly all of our U.S. employees are eligible to participate in PBG’s defined contribution plans, which are voluntary defined contribution
savings plans. We make matching contributions to the defined contribution savings plans on behalf of participants eligible to receive such
contributions. Additionally, employees not eligible to participate in the defined benefit pension plans and employees whose benefits will be
discontinued will receive additional Company retirement contributions under PBG’s defined contribution plans. Defined contribution expense
was $29 million, $27 million and $22 million in 2008, 2007 and 2006, respectively.
Components of Net Pension Expense and Other Amounts Recognized in Other Comprehensive Loss (Income)
Pe n sion
2008 2007 2006
Net Pension Expense
Expected return on plan assets — (income) (116) (102) (94)
Amortization of prior service amendments 7 7 9
Curtailment charge 20 — —
Special termination benefits 7 4 —
Net pension expense for the defined benefit plans 84 92 88
Other Comprehensive Loss (Income)

Prior service cost arising during the year 14 8 N/A
Net loss (gain) arising during the year 619 (114) N/A
Amortization of prior service amendments (1) (27) (7) N/A
Total recognized in other comprehensive loss (income) 591 (151) N/A
Total recognized in net pension expense and other comprehensive loss (income) $ 675 $ (59) $ 88
(1) 2008 includes curtailment charge of $20 million.

Components of Postretirement Medical Expense and Other Amounts Recognized in Other Comprehensive Loss (Income)
Postre tire m e n t
2008 2007 2006
Net Postretirement Expense
Special termination benefits 1 — —
Net postretirement expense 30 29 31
Other Comprehensive Loss (Income)

Net (gain) arising during the year (30) (4) N/A
Total recognized in other comprehensive loss (income) (33) (8) N/A
Total recognized in net postretirement expense and other comprehensive loss (income) $ (3) $ 21 $ 31
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Changes in Benefit Obligations
Pe n sion Postre tire m e n t

2008 2007 2008 2007
Obligation at beginning of year $ 1,585 $ 1,539 $ 353 $ 354
SFAS 158 adoption (53) — (5) —
Service cost 51 55 5 5
Interest cost 100 90 21 20
Plan amendments 14 8 — —
Plan curtailment (50) — — —
Actuarial (gain) loss 141 (53) (30) (4)
Special termination benefits 7 4 1 —
Adjustment for Medicare subsidy — — 1 1
Transfers (2) (1) — —
Obligation at end of year $ 1,724 $ 1,585 $ 327 $ 353
Changes in the Fair Value of Plan Assets

2008 2007 2008 2007
Fair value of plan assets at beginning of year $ 1,455 $ 1,289 $ — $ —
SFAS 158 adoption (17) — — —
Actual return on plan assets (412) 163 — —
Transfers (2) (1) — —
Employer contributions 90 61 18 22
Adjustment for Medicare subsidy — — 1 1
Fair value of plan assets at end of year $ 1,045 $ 1,455 $ — $ —
Amounts Included in AOCL

2008 2007 2008 2007
Prior service cost $ 38 $ 48 $ 3 $ 3
Net loss 879 308 49 90
Total $ 917 $ 356 $ 52 $ 93
Estimated Gross Amounts in AOCL to be Amortized in 2009

Prior service cost $ 6 $ —
Net loss $ 35 $ 1
The accumulated benefit obligations for all U.S. pension plans were $1,636 million and $1,458 million at December 27, 2008 and December 29,
2007, respectively.
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Selected Information for Plans with Liabilities in Excess of Plan Assets

2008 2007 (1) 2008 2007 (1)
Projected benefit obligation $1,724 $777 $327 $353
Accumulated benefit obligation $1,636 $649 $327 $353
Fair value of plan assets (1) $1,045 $598 $ — $ —
(1) 2007 balances were measured on September 30, 2007. Fair value of plan assets for 2007 includes fourth
quarter employer contributions.
Reconciliation of Funded Status

2008 2007 2008 2007
Funded status at measurement date $ (679) $ (130) $ (327) $ (353)
Fourth quarter employer contributions/payments N/A 23 N/A 4
Funded status at end of year $ (679) $ (107) $ (327) $ (349)
Amounts Recognized
Other assets $ — $ 69 $ — $ —
Accounts payable and other current liabilities (10) (5) (24) (26)
Other liabilities (669) (171) (303) (323)
Total net liabilities (679) (107) (327) (349)
Accumulated other comprehensive loss 917 356 52 93
Net amount recognized $ 238 $ 249 $ (275) $ (256)
Weighted Average Assumptions

2008 2007 2006 2008 2007 2006
Expense discount rate 6.70% 6.00% 5.80% 6.35% 5.80% 5.55%
Liability discount rate 6.20% 6.35% 6.00% 6.50% 6.20% 5.80%
Expected rate of return on plan assets (1) 8.50% 8.50% 8.50% N/A N/A N/A
Expense rate of compensation increase 3.56% 3.55% 3.53% 3.56% 3.55% 3.53%
Liability rate of compensation increase 3.53% 3.56% 3.55% 3.53% 3.56% 3.55%
(1) Expected rate of return on plan assets is presented after administration expenses.
The expected rate of return on plan assets for a given fiscal year is based upon actual historical returns and the long-term outlook on asset
classes in the pension plans’ investment portfolio.
Funding and Plan Assets
Allocation Pe rce n tage

Targe t Actu al Actu al
2009 2008 2007
Asset Category
Equity securities 65% 60% 75%
Debt securities 35% 40% 25%
The table above shows the target allocation for 2009 and the actual allocation as of December 27, 2008 and December 29, 2007. Target
allocations of PBG sponsored pension plans’ assets reflect the long-term nature of our pension liabilities. The target allocation for 2009 has
been changed in the first quarter of 2009 from 75 percent equity and 25 percent fixed income to 65 percent equity and 35 percent fixed income.
None of the current assets are invested directly in equity or debt instruments issued by Bottling LLC, PBG, PepsiCo or any bottling affiliates of
PepsiCo, although it is possible that insignificant indirect investments exist through our broad market indices. PBG sponsored pension plans’
equity investments are currently diversified across all areas of the equity market (i.e., large, mid and small capitalization stocks as well as
international equities). PBG sponsored pension plans’ fixed income investments are also currently diversified and consist of both corporate
and U.S. government bonds. The pension plans currently do not invest directly in any derivative investments. The pension plans’ assets are
held in a pension trust account at PBG’s trustee’s bank.
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PBG’s pension investment policy and strategy are mandated by PBG’s Pension Investment Committee (“PIC”) and are overseen by the PBG
Board of Directors’ Compensation and Management Development Committee. The plan assets are invested using a combination of enhanced
and passive indexing strategies. The performance of the plan assets is benchmarked against market indices and reviewed by the PIC. Changes
in investment strategies, asset allocations and specific investments are approved by the PIC prior to execution.
Health Care Cost Trend Rates

We have assumed an average increase of 8.75 percent in 2009 in the cost of postretirement medical benefits for employees who retired
before cost sharing was introduced. This average increase is then projected to decline gradually to five percent in 2015 and thereafter.
Assumed health care cost trend rates have an impact on the amounts reported for postretirement medical plans. A one-percentage point
change in assumed health care costs would have the following impact:
1% Incre ase 1% De cre ase

Effect on total fiscal year 2008 service and interest cost components $ — $ —
Effect on total fiscal year 2008 postretirement benefit obligation $ 6 $ (5)
Pension and Postretirement Cash Flow

We do not fund PBG sponsored pension plan and postretirement medical plans when contributions would not be tax deductible or when
benefits would be taxable to the employee before receipt. Of the total pension liabilities at December 27, 2008, $72 million relates to pension
plans not funded due to these unfavorable tax consequences.

Employer Contributions
2007 $ 74 $ 21
2008 $ 90 $ 18
2009 (expected) $160 $ 25
Expected Benefits
The expected benefit payments to be made from PBG sponsored pension and postretirement medical plans (with and without the
prescription drug subsidy provided by the Medicare Prescription Drug, Improvement and Modernization Act of 2003) to our participants over
the next ten years are as follows:
Postre tire m e n t
Inclu ding Me dicare Excluding Me dicare
Pe n sion S u bsidy S u bsidy
Expected Benefit Payments
2009 $ 80 $ 25 $ 26
2010 $ 73 $ 25 $ 26
2011 $ 80 $ 26 $ 27
2012 $ 88 $ 27 $ 28
2013 $ 96 $ 27 $ 28
2014 to 2018 $627 $ 141 $ 146
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Note 12—Income Taxes

The details of our income tax provision are set forth below:
2008 2007 2006

Current:
Federal $ 7 $ 6 $ 6
Foreign 43 24 36
State (2) 5 2
48 35 44
Deferred:
Federal 12 (17) (5)
Foreign (96) 6 (36)
State (3) 3 —
(87) (8) (41)
$ (39) $ 27 $ 3
In 2008, our tax provision includes the following significant items:

• Tax impact from impairment charge — During 2008, we recorded a deferred tax benefit of $115 million associated with the impairment
charges primarily related to our business in Mexico.
In 2007, our tax provision included higher taxes on higher international earnings as well as the following significant items:
• Valuation allowances — During 2007, we reversed valuation allowances resulting in an $11 million tax benefit. These reversals were
due to improved profitability trends in Russia.
• Tax rate changes — During 2007, changes to the income tax laws in Canada and Mexico were enacted. These law changes required us
to re-measure our net deferred tax liabilities which resulted in a net decrease to our income tax expense of approximately $13 million.
In 2006, our tax provision included increased taxes on non-U.S. earnings and the following significant items:
• Valuation allowances — During 2006, we reversed valuation allowances resulting in a $34 million tax benefit. These reversals were due
to improved profitability trends and certain restructurings in Spain, Russia and Turkey.
• Tax rate changes — During 2006, changes to the income tax laws in Canada, Turkey and certain jurisdictions within the U.S. were
enacted. These law changes enabled us to re-measure our net deferred tax liabilities using lower tax rates which decreased our income
tax expense by approximately $12 million.
Our U.S. and foreign income before income taxes is set forth below:
2008 2007 2006

U.S. $ 651 $ 787 $ 731
Foreign (154) 234 196
$ 497 $ 1,021 $ 927
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Below is the reconciliation of our income tax rate from the U.S. federal statutory rate to our effective tax rate:
2008 2007 2006

Income taxes computed at the U.S. federal statutory rate 35.0% 35.0% 35.0%
Income taxable to owners (46.3) (26.6) (31.4)
State income tax, net of federal tax benefit (0.8) 0.7 3.1
Impact of foreign results (10.1) (2.8) (1.3)
Change in valuation allowances, net 0.5 (2.4) (5.5)
Nondeductible expenses 6.6 1.9 1.4
Other, net 1.2 (1.8) 0.4
Impairment charges 5.8 — —
Tax rate change charge (benefit) 0.4 (1.3) (1.4)
Total effective income tax rate (7.7)% 2.7% 0.3%
The 2008 percentages above are impacted by the pre-tax impact of impairment and restructuring charges.
The details of our 2008 and 2007 deferred tax liabilities (assets) are set forth below:
2008 2007
Intangible assets and property, plant and equipment $ 288 $ 438
Investment 305 178
Other 12 15
Gross deferred tax liabilities 605 631
Net operating loss carryforwards (433) (354)

Employee benefit obligations (41) (30)
Various liabilities and other (114) (100)
Gross deferred tax assets (588) (484)
Deferred tax asset valuation allowance 214 240
Net deferred tax assets (374) (244)
Net deferred tax liability $ 231 $ 387

Prepaid expenses and other current assets $ (51) $ (86)
Accounts payable and other current liabilities 3 2
$ 231 $ 387
We have net operating loss carryforwards (“NOLs”) totaling $1,548 million at December 27, 2008, which resulted in deferred tax assets of
$433 million and which may be available to reduce future taxes in the U.S., Spain, Greece, Turkey, Russia and Mexico. Of these NOLs,
$11 million expire in 2009; $525 million expire at various times between 2010 and 2028; and $1,012 million have an indefinite life. At December 27,
2008, we have tax credit carryforwards in Mexico of $34 million, which expire at various times between 2009 and 2017.
We establish valuation allowances on our deferred tax assets, including NOLs and tax credits, when the amount of expected future taxable
income is not likely to support the use of the deduction or credit. Our valuation allowances, which reduce deferred tax assets to an amount that
will more likely than not be realized, were $214 million at December 27, 2008. Our valuation allowance decreased $26 million in 2008 and
increased $51 million in 2007.
Deferred taxes have not been recognized on the excess of the amount for financial reporting purposes over the tax basis of investments in
foreign subsidiaries that are expected to be permanent in duration. This amount becomes taxable upon a repatriation of assets from the
subsidiary or a sale or liquidation of the subsidiary. The amount of such temporary difference totaled approximately $1,048 million at
December 27, 2008 and $1,113 million at December 29, 2007, respectively. Determination of the amount of unrecognized deferred income taxes
related to this temporary difference is not practicable.
Income taxes receivable from taxing authorities were $12 million and $17 million at December 27, 2008 and December 29, 2007, respectively.
Such amounts are recorded within prepaid expenses and other current assets in our Consolidated Balance Sheets. Income taxes payable to
taxing authorities were $13 million and $19 million at December 27, 2008 and December 29, 2007, respectively. Such amounts are recorded within
accounts payable and other current liabilities in our Consolidated Balance Sheets.
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Income taxes receivable from PepsiCo were $1 million and $7 million at December 27, 2008 and December 29, 2007, respectively. Such
amounts are recorded within accounts receivable in our Consolidated Balance Sheets. Amounts paid to taxing authorities and PepsiCo for
income taxes were $30 million, $29 million and $19 million in 2008, 2007 and 2006, respectively.
We file annual income tax returns in the U.S. federal jurisdiction, various U.S. state and local jurisdictions, and in various foreign
jurisdictions. Our tax filings are subject to review by various tax authorities who may disagree with our positions.
A number of years may elapse before an uncertain tax position, for which we have established tax reserves, is audited and finally resolved.
While it is often difficult to predict the final outcome or the timing of the resolution of an audit, we believe that our reserves for uncertain tax
benefits reflect the outcome of tax positions that is more likely than not to occur. We adjust these reserves, as well as the related interest and
penalties, in light of changing facts and circumstances. The resolution of a matter could be recognized as an adjustment to our provision for
income taxes and our deferred taxes in the period of resolution, and may also require a use of cash.
Our major taxing jurisdictions include Mexico, Canada and Russia. The following table summarizes the years that remain subject to
examination and the years currently under audit by major tax jurisdictions:
Ye ars su bje ct to
Ju risdiction e xam ination Ye ars u n de r au dit
Mexico 2002-2007 2002-2003
Canada 2006-2007 2006
Russia 2005-2007 2005-2007
We currently have on-going income tax audits in our major tax jurisdictions, where issues such as deductibility of certain expenses have
been raised. In Canada, income tax audits have been completed for all tax years through 2005. We are in agreement with the audit results except
for one matter which we continue to dispute for our 1999 through 2005 tax years.
We believe that it is reasonably possible that our worldwide reserves for uncertain tax benefits could decrease in the range of $10 million to
$50 million within the next twelve months as a result of the completion of the audits in various jurisdictions and the expiration of statute of
limitations. The reductions in our tax reserves can result in a combination of additional tax payments, the adjustment of certain deferred taxes
or the recognition of tax benefits in our income statement. In the event that we cannot reach settlement of some of these audits, our tax
reserves may increase, although we cannot estimate such potential increases at this time.
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Below is a reconciliation of the beginning and ending amount of our reserves for income taxes, as well as the related amount of interest and
penalties, which are recorded in our Consolidated Balance Sheets.
2008 2007
Reserves (excluding interest and penalties)
Balance at beginning of year $ 87 $ 82
Increases due to tax positions related to prior years 3 4
Increases due to tax positions related to the current year 9 9
Decreases due to tax positions related to prior years (4) (5)
Decreases due to settlements with taxing authorities — (2)
Decreases due to lapse of statute of limitations (5) (9)
Currency translation adjustment (19) 8
Balance at end of year $ 71 $ 87
Classification of reserves within the Consolidated Balance Sheets

Other liabilities $ 68 $ 84
Total amount of reserves recognized $ 71 $ 87
Of the $71 million of 2008 income tax reserves above, approximately $70 million would impact our effective tax rate over time, if recognized.
2008 2007
Interest and penalties accrued $ 45 $ 38
We recognized $14 million of expense and $0.3 million of expense, net of reversals, during the fiscal years 2008 and 2007, respectively, for
interest and penalties related to income tax reserves in the income tax expense line of our Consolidated Statements of Operations.
Note 13—Segment Information

products. Bottling LLC has three reportable segments - U.S. & Canada, Europe (which includes Spain, Russia, Greece and Turkey) and Mexico.
Operationally, the Company is organized along geographic lines with specific regional management teams having responsibility for the
financial results in each reportable segment. We evaluate the performance of these segments based on operating income or loss. Operating
income or loss is exclusive of net interest expense, minority interest, foreign exchange gains and losses and income taxes.
Ne t Re ve n u e s
2008 2007 2006
U.S. & Canada $ 10,300 $ 10,336 $ 9,910
Europe 2,115 1,872 1,534
Mexico 1,381 1,383 1,286
Worldwide net revenues $ 13,796 $ 13,591 $ 12,730
Net revenues in the U.S. were $9,097 million, $9,202 million and $8,901 million in 2008, 2007 and 2006, respectively. In 2008, 2007 and 2006, the
Company did not have one individual customer that represented 10 percent of total revenues, although sales to Wal-Mart Stores, Inc. and its
affiliated companies were 9.9 percent of our revenues in 2008, primarily as a result of transactions in the U.S. & Canada segment.
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O pe ratin g In com e (Loss)

2008 2007 2006
U.S. & Canada $ 864 $ 876 $ 849
Europe 101 106 57
Mexico (338) 72 82
Worldwide operating income 627 1,054 988
Interest expense 244 232 227
Interest income 162 222 174
Minority interest 24 28 (2)
Income before income taxes $ 497 $ 1,021 $ 927
Total Asse ts Lon g-Live d Asse ts (1)

2008 2007 2006 2008 2007 2006
U.S. & Canada $ 13,328 $ 13,334 $ 12,072 $ 11,098 $ 11,391 $ 10,267
Europe (2) 2,222 1,671 1,072 1,630 1,014 554
Mexico 945 1,707 1,811 745 1,443 1,474
Worldwide total $ 16,495 $ 16,712 $ 14,955 $ 13,473 $ 13,848 $ 12,295
(1) Long-lived assets represent property, plant and equipment, other intangible assets, net, goodwill,
investments in noncontrolled affiliates, notes receivable from PBG and other assets.
(2) Long-lived assets include an equity method investment in Lebedyansky with a net book value of
$617 million as of December 27, 2008.
Long-lived assets in the U.S. were $10,100 million, $10,138 million and $9,224 million in 2008, 2007 and 2006, respectively. Long-lived assets
in Russia were $1,290 million, $626 million and $213 million in 2008, 2007 and 2006, respectively.
C apital Expe n ditu re s De pre ciation an d Am ortiz ation

2008 2007 2006 2008 2007 2006
U.S. & Canada $ 523 $ 626 $ 554 $ 498 $ 509 $ 513
Europe 147 146 99 86 72 52
Mexico 85 82 68 88 87 83
Worldwide total $ 755 $ 854 $ 721 $ 672 $ 668 $ 648
Note 14—Related Party Transactions

PepsiCo is a related party due to the nature of our franchise relationship and its ownership interest in our Company. PBG has entered into a
number of agreements with PepsiCo. Although we are not a direct party to these contracts, as the principal operating subsidiary of PBG, we
derive direct benefit from them. The most significant agreements that govern our relationship with PepsiCo consist of:
(1) Master Bottling Agreement for cola beverages bearing the Pepsi-Cola and Pepsi trademarks in the U.S.; bottling agreements and
distribution agreements for non-cola beverages; and a master fountain syrup agreement in the U.S.;
(2) Agreements similar to the Master Bottling Agreement and the non-cola agreement for each country in which we operate, as well as a
fountain syrup agreement for Canada;
(3) A shared services agreement where we obtain various services from PepsiCo and provide services to PepsiCo;
(4) Russia Venture Agreement related to the formation of PR Beverages;
(5) Russia Snack Food Distribution Agreement pursuant to which our PR Beverages venture purchases snack food products from Frito-
Lay, Inc. (“Frito”) a subsidiary of PepsiCo, for sale and distribution in the Russian Federation; and
(6) Transition agreements that provide certain indemnities to the parties, and provide for the allocation of tax and other assets, liabilities
and obligations arising from periods prior to the initial public offering.
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The Master Bottling Agreement provides that we will purchase our entire requirements of concentrates for the cola beverages from PepsiCo
at prices and on terms and conditions determined from time to time by PepsiCo. Additionally, we review our annual marketing, advertising,
management and financial plans each year with PepsiCo for its approval. If we fail to submit these plans, or if we fail to carry them out in all
material respects, PepsiCo can terminate our beverage agreements. If our beverage agreements with PepsiCo are terminated for this or for any
other reason, it would have a material adverse effect on our business and financial results.
On March 1, 2007, together with PepsiCo, we formed PR Beverages, a venture that enables us to strategically invest in Russia to accelerate
our growth. Bottling LLC contributed its business in Russia to PR Beverages, and PepsiCo entered into bottling agreements with PR
Beverages for PepsiCo beverage products sold in Russia on the same terms as in effect for Bottling LLC immediately prior to the venture. PR
Beverages has an exclusive license to manufacture and sell PepsiCo concentrate for such products. PR Beverages has contracted with a
PepsiCo subsidiary to manufacture such concentrate.
The following income (expense) amounts are considered related party transactions as a result of our relationship with PepsiCo and its
affiliates:
2008 2007 2006

Net revenues:
Bottler incentives and other arrangements (a) $ 93 $ 66 $ 67
Cost of sales:
Purchases of concentrate and finished products, and royalty fees (b) $ (3,451) $ (3,406) $ (3,227)
Bottler incentives and other arrangements (a) 542 582 570
Total cost of sales $ (2,909) $ (2,824) $ (2,657)
Selling, delivery and administrative expenses:

Bottler incentives and other arrangements (a) $ 56 $ 66 $ 69
Fountain service fee (c) 187 188 178
Frito-Lay purchases (d) (355) (270) (198)
Shared services: (e)
Shared services expense (52) (57) (61)
Shared services revenue 7 8 8
Net shared services (45) (49) (53)
Total selling, delivery and administrative expenses $ (157) $ (65) $ (4)
Income tax benefit: (f) $ 1 $ 7 $ 6
(a) Bottler Incentives and Other Arrangements — In order to promote PepsiCo beverages, PepsiCo, at its discretion, provides us with
various forms of bottler incentives. These incentives cover a variety of initiatives, including direct marketplace support and advertising
support. We record most of these incentives as an adjustment to cost of sales unless the incentive is for reimbursement of a specific,
incremental and identifiable cost. Under these conditions, the incentive would be recorded as an offset against the related costs, either in net
revenues or selling, delivery and administrative expenses. Changes in our bottler incentives and funding levels could materially affect our
(b) Purchases of Concentrate and Finished Product — As part of our franchise relationship, we purchase concentrate from PepsiCo, pay
royalties and produce or distribute other products through various arrangements with PepsiCo or PepsiCo joint ventures. The prices we pay
for concentrate, finished goods and royalties are generally determined by PepsiCo at its sole discretion. Concentrate prices are typically
determined annually. Effective January 2009, PepsiCo increased the price of U.S. concentrate by four percent. Significant changes in the
amount we pay PepsiCo for concentrate, finished goods and royalties could materially affect our business and financial results. These
amounts are reflected in cost of sales in our Consolidated Statements of Operations.
(c) Fountain Service Fee — We manufacture and distribute fountain products and provide fountain equipment service to PepsiCo
customers in some territories in accordance with the Pepsi beverage agreements. Fees received from PepsiCo for these transactions offset the
cost to provide these services. The fees and costs for these services are recorded in selling, delivery and administrative expenses in our
(d) Frito-Lay Purchases — We purchase snack food products from Frito for sale and distribution in Russia primarily to accommodate
PepsiCo with the infrastructure of our distribution network. Frito would otherwise be required to source third-party distribution services to
reach their customers in Russia. We make payments to PepsiCo for the cost of these snack products and retain a minimal net fee based on the
gross sales price of the products. Payments for the purchase of snack products are reflected in selling, delivery and administrative expenses in
our Consolidated Statements of Operations.
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(e) Shared Services — We provide to and receive various services from PepsiCo and PepsiCo affiliates pursuant to a shared services
agreement and other arrangements. In the absence of these agreements, we would have to obtain such services on our own. We might not be
able to obtain these services on terms, including cost, which are as favorable as those we receive from PepsiCo. Total expenses incurred and
income generated is reflected in selling, delivery and administrative expenses in our Consolidated Statements of Operations.
(f) Income Tax Benefit - Includes settlements under the tax separation agreement with PepsiCo.
Other Related Party Transactions

There are certain manufacturing cooperatives whose assets, liabilities and results of operations are consolidated in our financial statements.
Concentrate purchases from PepsiCo by these cooperatives, not included in the table above, for the years ended 2008, 2007 and 2006 were
$140 million, $143 million and $72 million, respectively. We also have equity investments in certain other manufacturing cooperatives. Total
purchases of finished goods from these cooperatives, not included in the table above, for the years ended 2008, 2007 and 2006 were $61
million, $66 million and $71 million, respectively. These manufacturing cooperatives purchase concentrate from PepsiCo for certain of its
finished goods sold to the Company.
As of December 27, 2008 and December 29, 2007, the receivables from PepsiCo and its affiliates were $154 million and $188 million,
respectively. Our receivables from PepsiCo are shown as part of accounts receivable in our Consolidated Financial Statements. As of
December 27, 2008 and December 29, 2007, the payables to PepsiCo and its affiliates were $217 million and $255 million, respectively. Our
payables to PepsiCo are shown as part of accounts payable and other current liabilities in our Consolidated Financial Statements.
As a result of the formation of PR Beverages, PepsiCo has agreed to contribute $83 million plus accrued interest to the venture in the form
of property, plant and equipment. PepsiCo has contributed $49 million in regards to this note. The remaining balance to be contributed to the
venture is $39 million as of December 27, 2008.
PBG is a related party, as we are the principal operating subsidiary of PBG and we make up substantially all of the operations and assets of
PBG. At December 27, 2008, PBG owned approximately 93.4 percent of our equity.
We guarantee that we will distribute pro rata to PBG and PepsiCo sufficient cash such that the aggregate cash distributed to PBG will
enable PBG to repay amounts borrowed from us to fund their cash needs. During 2008 and 2007, we made cash distributions to PBG and
PepsiCo totaling $1,102 million and $271 million, respectively.
Throughout 2008 we loaned $839 million to PBG, net of repayments, through a series of 1-year notes with interest rates ranging from 2.5
percent to 4.5 percent. In addition, at the end of the year PBG repaid $1,027 million of intercompany loans owed to us. The resulting net
decrease in the notes receivable from PBG in 2008 was $188 million. During 2007, we loaned PBG $733 million, net of repayments. Total
intercompany loans owed to us from PBG at December 27, 2008 and December 29, 2007, were $3,692 million and $3,880 million, respectively. The
loan proceeds were used by PBG to pay for interest, taxes, dividends, share repurchases and acquisitions. Accrued interest receivable from
PBG on these notes totaled $118 million and $12 million at December 27, 2008 and December 29, 2007, respectively, and is included in prepaid
expenses and other current assets in our Consolidated Balance Sheets.
Total interest income recognized in our Consolidated Statements of Operations relating to outstanding loans with PBG was $140 million,
$199 million and $149 million, in 2008, 2007 and 2006, respectively.
Beginning in 2002, PBG provides insurance and risk management services to us pursuant to a contractual agreement. Total premiums paid
to PBG during each of the years 2008 and 2007 were $113 million.
PBG has a committed credit facility of $1.1 billion and an uncommitted credit facility of $500 million. Both of these credit facilities are
guaranteed by the Company and will be used to support PBG’s commercial paper program and our working capital requirements. PBG had $0
and $50 million of outstanding commercial paper at December 27, 2008 and December 29, 2007, respectively.
In March 1999, PBG issued $1 billion of 7 percent senior notes due 2029, which are guaranteed by us.
One of our managing directors is an officer of PepsiCo and the other managing directors and officers are employees of PBG.
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Note 15—Restructuring Charges

On November 18, 2008, we announced a restructuring program to enhance the Company’s operating capabilities in each of our reporting
segments with the objective to strengthen customer service and selling effectiveness; simplify decision making and streamline the
organization; drive greater cost productivity to adapt to current macroeconomic challenges; and rationalize the Company’s supply chain
infrastructure. As part of the restructuring program, approximately 3,150 positions will be eliminated across all reporting segments, four
facilities will be closed in the U.S., three plants and about 30 distribution centers will be closed in Mexico and about 700 routes will be
eliminated in Mexico. In addition, PBG will modify its U. S. defined benefit pension plans, which will generate long-term savings and
significantly reduce future financial obligations.
The Company expects to record pre-tax charges of $140 million to $170 million over the course of the restructuring program which is
primarily for severance and related benefits, pension and other employee-related costs and other charges, including employee relocation and
asset disposal costs. During 2008, we eliminated approximately 1,050 positions across all reporting segments and closed three facilities in the
U.S., two plants in Mexico and eliminated 126 routes in Mexico. As of December 27, 2008, the Company incurred a pre-tax charge of
approximately $83 million, which was recorded in selling, delivery and administrative expenses. The remaining costs are expected to be incurred
in fiscal year 2009.
The Company expects about $130 million in pre-tax cash expenditures from these restructuring actions, of which $13 million was recognized
in the fourth quarter of 2008, with the balance expected to occur in 2009 and 2010. This includes $2 million of employee benefit payments
pursuant to existing unfunded termination indemnity plans. These benefit payments have been accrued for in previous periods, and therefore,
are not included in our estimated cost for this program and are not included in the tables below. The following table summarizes the pre-tax
costs associated with the restructuring program by reportable segment for the year ended December 27, 2008:
U.S . &
W orldwide C an ada Me xico Eu rope
Costs incurred through December 27, 2008 $ 83 $ 53 $ 3 $ 27
Costs expected to be incurred through December 26, 2009 57-87 36-47 20-35 1-5
Total costs expected to be incurred $ 140-$170 $89-$100 $ 23-$38 $ 28-$32
The following table summarizes the nature of and activity related to pre-tax costs and cash payments associated with the restructuring
program for the year ended December 27, 2008:
Asse t
Pe n sion & Disposal,
S e ve ran ce O the r Em ploye e
& Re late d Re late d Re location
Total Be n e fits C osts & O the r
Costs accrued $ 83 $ 47 $ 29 $ 7
Cash payments (11) (10) — (1)
Non-cash settlements (30) (1) (23) (6)
Remaining costs accrued at December 27, 2008 $ 42 $ 36 $ 6 $ —
Note 16—Accumulated Other Comprehensive Loss

The year-end balances related to each component of AOCL were as follows:
2008 2007 2006

Net currency translation adjustment $ (351) $ 242 $ 7
Cash flow hedge adjustment (1) (45) 19 17
Minimum pension liability adjustment — — (335)
Adoption of SFAS 158 (2) — — (278)
Pension and postretirement medical benefit plans adjustment (3) (977) (450) —
Accumulated other comprehensive loss $ (1,373) $ (189) $ (589)
(1) Net of taxes of $(2) million in 2008, $1 million in 2007 and $(1) million in 2006.
(2) Net of taxes of $4 million in 2006.
(3) Net of taxes of $4 million in 2008 and $1 million in 2007.
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Note 17—Supplemental Cash Flow Information

The table below presents the Company’s supplemental cash flow information:
2008 2007 2006

Non-cash investing and financing activities:
(Decrease) increase in accounts payable related to capital expenditures $ (67) $ 15 $ 7
Acquisition of intangible asset $ — $ 315 $ —
Contribution of acquired entity by PBG $ 26 $ — $ —
Liabilities assumed in conjunction with acquisition of bottlers $ 17 $ 1 $ 20
Capital-in-kind contributions $ 34 $ 15 $ —
Share compensation $ 4 $ — $ —
Note 18—Contingencies
We are subject to various claims and contingencies related to lawsuits, environmental and other matters arising out of the normal course of
business. We believe that the ultimate liability arising from such claims or contingencies, if any, in excess of amounts already recognized is not
likely to have a material adverse effect on our results of operations, financial position or liquidity.
Note 19—Selected Quarterly Financial Data (unaudited)

Quarter to quarter comparisons of our financial results are impacted by our fiscal year cycle and the seasonality of our business. The
seasonality of our operating results arises from higher sales in the second and third quarters versus the first and fourth quarters of the year,
combined with the impact of fixed costs, such as depreciation and interest, which are not significantly impacted by business seasonality.

2008 (1)
Net revenues $2,651 $3,522 $3,814 $3,809 $13,796
Gross profit $1,169 $1,606 $1,737 $1,698 $ 6,210
Operating income (loss) $ 106 $ 343 $ 453 $ (275) $ 627
Net income (loss) $ 98 $ 297 $ 384 $ (243) $ 536

2007 (1)
Net revenues $2,466 $3,360 $3,729 $4,036 $13,591
Gross profit $1,123 $1,535 $1,726 $1,837 $ 6,221
Operating income $ 119 $ 320 $ 430 $ 185 $ 1,054
Net income $ 102 $ 301 $ 401 $ 190 $ 994
(1) For additional unaudited information see “Items affecting comparability of our financial results” in
Management’s Financial Review in Item 7.
Note 20—Subsequent Event

On January 14, 2009, the Company issued an additional $750 million in senior notes, with a coupon rate of 5.125 percent, maturing in 2019.
The net proceeds of the offering, together with a portion of the proceeds from the offering of our senior notes issued in the fourth quarter of
2008, were used to repay our senior notes due in 2009, at their scheduled maturity on February 17, 2009. Any excess proceeds of this offering
will be used for general corporate purposes. The next significant scheduled debt maturity is not until 2012.
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The Owners of
Bottling Group, LLC
Somers, New York
We have audited the accompanying consolidated balance sheets of Bottling Group, LLC and subsidiaries (the “Company”) as of December 27,
2008 and December 29, 2007, and the related consolidated statements of operations, changes in owners’ equity, and cash flows for each of the
three years in the period ended December 27, 2008. Our audits also included the financial statement schedule listed in the Index at Item 15.
These financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to
express an opinion on the financial statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of
December 27, 2008 and December 29, 2007, and the results of their operations and their cash flows for each of the three years in the period
ended December 27, 2008, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion,
such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly
in all material respects the information set forth therein.
As discussed in Note 2 to the consolidated financial statements, effective December 30, 2007 and December 30, 2006, the Company adopted
Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans —
an amendment of FASB Statements No. 87, 88, 106, and 132(R),” related to the measurement date provision and the requirement to recognize
the funded status of a benefit plan, respectively.
As discussed in Note 2 to the consolidated financial statements, effective December 31, 2006, the Company adopted Financial Accounting
Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109.”
New York, New York

February 20, 2009
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Included in Item 7, Management’s Financial Review — Market Risks and Cautionary Statements.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Included in Item 7, Management’s Financial Review — Financial Statements.
PBG’s Annual Report on Form 10-K for the fiscal year ended December 27, 2008 is attached hereto as Exhibit 99.1 as required by the SEC as
a result of our guarantee of up to $1,000,000,000 aggregate principal amount of PBG’s 7% Senior Notes due in 2029.
PepsiCo’s consolidated financial statements and notes thereto included in PepsiCo’s Annual Report on Form 10-K for the fiscal year ended
December 27, 2008 filed with the Securities and Exchange Commission (“SEC”) on February 19, 2009, and any amendments to such financial
information filed with the SEC, are incorporated herein by reference as required by the SEC as a result of PepsiCo’s guarantee of up to
$1,300,000,000 aggregate principal amount of our 6.95% Senior Notes due 2014. Such financial information of PepsiCo was prepared by
management of PepsiCo and was subject to PepsiCo’s internal control over financial reporting. We did not have any responsibility for the
preparation of, and have not independently reviewed this financial information of PepsiCo and it was not subject to our financial controls or
procedures. This financial information should be viewed accordingly.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A(T). CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures

Bottling LLC’s management carried out an evaluation, as required by Rule 13a-15(b) of the Securities Exchange Act of 1934 (the “Exchange
Act”), with the participation of our Principal Executive Officer and our Principal Financial Officer, of the effectiveness of our disclosure
controls and procedures, as of the end of our last fiscal quarter. Based upon this evaluation, the Principal Executive Officer and the Principal
Financial Officer concluded that our disclosure controls and procedures were effective, as of the end of the period covered by this Annual
Report on Form 10-K, such that the information relating to Bottling LLC and its consolidated subsidiaries required to be disclosed in our
Exchange Act reports filed with the SEC (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and
forms, and (ii) is accumulated and communicated to Bottling LLC’s management, including our Principal Executive Officer and Principal
Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control Over Financial Reporting
Bottling LLC’s management is responsible for establishing and maintaining adequate internal control over financial reporting for Bottling
LLC. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements in accordance with generally accepted accounting principles and includes those policies
and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of Bottling LLC’s assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting principles, and that Bottling LLC’s receipts and expenditures are being
made only in accordance with authorizations of Bottling LLC’s management and Managing Directors, and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Bottling LLC’s assets that could have a material
effect on the financial statements.
As required by Section 404 of the Sarbanes-Oxley Act of 2002 and the related rule of the SEC, management assessed the effectiveness of
Bottling LLC’s internal control over financial reporting using the Internal Control-Integrated Framework developed by the Committee of
Sponsoring Organizations of the Treadway Commission.
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Based on this assessment, management concluded that Bottling LLC’s internal control over financial reporting was effective as of
December 27, 2008. Management has not identified any material weaknesses in Bottling LLC’s internal control over financial reporting as of
December 27, 2008.
This Annual Report on Form 10-K does not include an attestation report of Bottling LLC’s independent registered public accounting firm
regarding internal control over financial reporting. Management’s report was not subject to attestation by Bottling LLC’s independent
registered public accounting firm pursuant to temporary rules of the SEC that permit Bottling LLC to provide only management’s report in this
Annual Report on Form 10-K.
Changes in Internal Control Over Financial Reporting

In addition, Bottling LLC’s management also carried out an evaluation, as required by Rule 13a-15(d) of the Exchange Act, with the
participation of our Principal Executive Officer and our Principal Financial Officer, of changes in Bottling LLC’s internal control over financial
reporting. Based on this evaluation, the Principal Executive Officer and the Principal Financial Officer concluded that there were no changes in
our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION

None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The name, age and background of each of Bottling LLC’s Managing Directors is set forth below. Managing Directors are elected by a
majority of members of Bottling LLC and their terms of office continue until their successors are appointed and qualified or until their earlier
resignation or removal, death or disability. There are no family relationships among our Managing Directors.
Thomas M. Lardieri, 48, was appointed Managing Director of Bottling LLC in June 2007. He has also served as PBG’s Vice President and
Controller since June 2007. Previously, Mr. Lardieri, a 19-year Pepsi veteran, had served as Vice President, Risk Management and General
Auditor of PepsiCo since June 2001. Mr. Lardieri joined PepsiCo’s international beverage division in 1988 where he held a variety of
accounting positions.
Marie T. Gallagher, 49, was appointed Managing Director of Bottling LLC in December 2007. She has also served as Vice President and
Assistant Controller of PepsiCo since 2005. Prior to joining PepsiCo in 2005, Ms. Gallagher served as the Assistant Controller at Altria
Corporate Services, Inc. since 1992. Prior to that, Ms. Gallagher was a Senior Manager at PricewaterhouseCoopers LLP.
Steven M. Rapp, 55, was appointed Managing Director of Bottling LLC in January 2005. He has also served as PBG’s Senior Vice President,
General Counsel and Secretary since January 2005. Mr. Rapp previously served as Vice President, Deputy General Counsel and Assistant
Secretary from 1999 through 2004. Mr. Rapp joined PepsiCo as a corporate attorney in 1986 and was appointed Division Counsel of Pepsi-Cola
Company in 1994.
The name, age and background of each of Bottling LLC’s executive officers who held office as of February 6, 2009 is set forth below.
Executive Officers are elected by our Managing Directors, and their terms of office continue until their successors are appointed and qualified
or until their earlier resignation or removal. There are no family relationships among our executive officers.
Eric J. Foss, 50, is the Principal Executive Officer of Bottling LLC. He is also PBG’s Chairman and Chief Executive Officer and a member of
PBG’s Board of Directors. Mr. Foss served as PBG’s President and Chief Executive Officer from July 2006 to October 2008. Previously,
Mr. Foss served as PBG’s Chief Operating Officer from September 2005 to July 2006 and President of PBG North America from September 2001
to September 2005. Prior to that, Mr. Foss was the Executive Vice President and General Manager of PBG North America from August 2000 to
September 2001. From October 1999 until August 2000, he served as PBG’s Senior Vice President, U.S. Sales and Field Operations, and prior to
that, he was our Senior Vice President, Sales and Field Marketing, since March 1999. Mr. Foss joined the Pepsi-Cola Company in 1982 where
he held a variety of field and headquarters-based sales, marketing and general management positions. From 1994 to 1996, Mr. Foss was General
Manager of Pepsi-Cola North America’s Great West Business Unit. In 1996, Mr. Foss was named General Manager for the Central Europe
Region for PCI, a position he held until joining PBG in March 1999. Mr. Foss is also a director of UDR, Inc. and on the Industry Affairs Council
of the Grocery Manufacturers of America.
Alfred H. Drewes, 53, is the Principal Financial Officer of Bottling LLC. He is also PBG’s Senior Vice President and Chief Financial Officer.
Previously, Mr. Drewes served as Senior Vice President and Chief Financial Officer of Pepsi-Cola International (“PCI”). Mr. Drewes joined
PepsiCo in 1982 as a financial analyst in New Jersey. During the next nine years, he rose through increasingly responsible finance positions
within Pepsi-Cola North America in field operations and headquarters. In 1991, Mr. Drewes joined PCI as Vice President of Manufacturing
Operations, with responsibility for the global concentrate supply organization. In 1994, he was appointed Vice President of Business Planning
and New Business Development and, in 1996, relocated to London as the Vice President and Chief Financial Officer of the Europe and Sub-
Saharan Africa Business Unit of PCI. Mr. Drewes is also a director of the Meredith Corporation.
Thomas M. Lardieri, 48, is the Principal Accounting Officer of Bottling LLC.
Bottling LLC has not adopted a Code of Ethics because PBG’s Worldwide Code of Conduct applies to all of our officers and employees,
including our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer. A copy of PBG’s Worldwide Code of
Conduct is available upon request without charge by writing to Bottling Group, LLC at One Pepsi Way, Somers, New York 10589, Attention:
Investor Relations.
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ITEM 11. EXECUTIVE COMPENSATION

Compensation Discussion and Analysis (CD&A)
What are the highlights of PBG’s 2008 executive compensation program as described in this CD&A?
• PBG provides compensation and benefits to the executive officers of Bottling LLC
• The primary objectives of PBG’s compensation program are to attract, retain, and motivate talented and diverse domestic and
international executives
• PBG provides executive officers with the following types of compensation: base salary, short-term performance-based cash incentives,
and long-term performance-based equity incentive awards
• PBG believes that to appropriately motivate senior executives to achieve and sustain the long-term growth of PBG, a majority of their
compensation should be tied to PBG’s performance
• PBG uses equity-based compensation as a means to align the interests of their executives with those of their shareholders
• PBG believes the design of its executive compensation program drives performance in a financially responsible way that is sensitive to
the dilutive impact on their shareholders
• PBG generally targets total compensation within the third quartile of companies within its peer group of companies which was changed
slightly in 2008
• In early 2008, consistent with this philosophy, PBG granted a special, one-time performance-based equity award (the “Strategic
Leadership Award”) to select senior executives linking their long-term compensation with PBG’s strategic imperatives and reinforcing
continuity within the senior leadership team of PBG
• In early 2008, PBG added an individual non-financial performance component to the annual performance-based cash incentive program
for senior executives to reinforce the importance of their individual contribution to certain non-financial objectives of PBG
• The challenging worldwide economic environment resulted in PBG performance in 2008 that was significantly below target. Our
management nevertheless delivered solid year-over-year financial results. Based on these results, the Committee determined it
appropriate to award a discretionary bonus amount to each of the Named Executive Officers. The total bonus payout for each of the
Named Executive Officers was significantly below target
• PBG has never backdated or re-priced equity awards and does not time its equity award grants relative to the release of material non-
public information
• Executive officers of Bottling LLC do not have employment, severance or change-in-control agreements
• PBG does not provide any gross-ups for potential excise taxes that may be incurred in connection with a change-in-control of PBG
• PBG has a long-standing policy in place to recoup compensation from an executive who has engaged in misconduct
• Bottling LLC executives participate in the same group benefit programs, at the same levels, as all PBG employees
Who oversees PBG’s executive compensation program?

The Compensation and Management Development Committee of PBG’s Board of Directors (the “Committee”), which is comprised solely of
independent, non-management directors oversees the executive compensation program for its Chairman and Chief Executive Officer who is
also our Principal Executive Officer (“PEO”), its Chief Financial Officer, who also serves as our Principal Financial Officer (“PFO”), and the
other named executive officer who appears in the tables below (collectively, the “Named Executive Officers”).
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What are the objectives of PBG’s executive compensation program?

The objectives of PBG’s executive compensation program are to:
• Provide a total compensation program that is appropriately competitive within its industry and to reinforce its short-term and long-
term business objectives by:
ß motivating and rewarding key executives for achieving and exceeding PBG’s business objectives;
ß providing financial consequences to key executives for failing to achieve PBG’s business objectives; and
ß attracting and retaining key executives through meaningful wealth-creation opportunities;
• Align the interests of their shareholders and executives by placing particular emphasis on performance-based and equity-based
compensation;
• Maintain a financially responsible program that is appropriate within PBG’s financial structure and sensitive to the dilutive impact
on their shareholders; and
• Establish and maintain PBG’s program in accordance with all applicable laws and regulations, as well as with corporate governance
best practices.
How does PBG achieve its objectives?

PBG achieves its objectives through the use of various executive compensation elements that drive both short-term and long-term
performance, deliver to their executives fixed pay as well as variable, performance-based pay, and provide significant personal exposure to PBG
common stock. In 2008, the principal elements of executive compensation were base salary, an annual performance-based cash incentive
(variable, short-term pay), and long-term incentive awards in the form of stock options and RSUs (variable, long-term pay). These three
elements of executive compensation are referred to as “total compensation.”
O bje ctive
Align m e n t with
Ele m e n t of Total Form of Motivation S h are h olde r
C om pe n sation C om pe n sation Attraction S h ort-Te rm Lon g-Te rm Inte re sts Re te n tion
Base Salary Cash ¸ ¸ ¸
Annual Performance-Based Cash ¸ ¸ ¸ ¸

Cash Incentive
Long-Term Stock Options ¸ ¸ ¸ ¸

Performance-Based RSUs
Equity Incentive
Why does PBG choose to pay a mix of cash and equity-based compensation?
PBG views the combination of cash and equity-based compensation as an important tool in achieving the objectives of its program. The
Committee periodically reviews the mix of cash and equity-based compensation provided under the program to ensure that the mix is
appropriate in light of market trends and PBG’s primary business objectives.
PBG pays base salary in cash so that their executives have a steady, liquid source of compensation.
PBG pays the annual incentive in cash because the annual incentive is tied to the achievement of its short-term (i.e., annual) business
objectives, and PBG believes a cash bonus is the strongest way to motivate and reward the achievement of these objectives.
Finally, PBG pays its long-term incentive in the form of PBG equity because its long-term incentive is tied to its long-term business
objectives, and PBG believes the market value of PBG equity is a strong indicator of whether PBG is achieving its long-term business
objectives.
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For 2008, our Named Executive Officers’ percentage of cash (based on base salary and target payout of the short-term cash incentive)
versus equity-based pay (based on the grant date fair value of the annual 2008 equity awards and the annualized grant date fair value (one-
fourth) of the one-time Strategic Leadership Award for Mr. Drewes), was approximately as follows:
Chairman and CEO Other Named Executive Officers (Average)
Why is the compensation of our Named Executive Officers largely performance-based compensation rather than fixed?
Consistent with the objectives of its program, PBG utilizes the performance-based elements of its program to reinforce its short-term and
long-term business objectives and to align shareholder and executive interests. PBG believes that to appropriately motivate its senior
executives to achieve their business objectives, a majority of their compensation should be tied to the performance of PBG. Thus, PBG links
the level of compensation to the achievement of its business objectives. As a result of this link, for years when PBG achieves above-target
performance, executives will be paid above-target compensation, and for years when PBG achieves below-target performance, executives will
be paid below-target compensation.
PBG also believes that the more influence an executive has over company performance, the more the executive’s compensation should be
tied to their performance results. Thus, the more senior the executive, the greater the percentage of his or her total compensation that is
performance-based.
When looking at the three elements of total compensation, PBG views base salary as fixed pay (i.e., once established, it is not performance-
based) and the annual incentive and long-term incentive as performance-based pay. With respect to the cash-based, annual incentive, PBG’s
intent is to emphasize its performance in a given year. As a result of a design change approved by the Committee in 2008, PBG links eighty
percent of the annual incentive to the achievement of annual performance measures (such as year-over-year profit and volume growth) and
twenty percent of the incentive to the achievement of individual non-financial performance measures (such as employee and customer
satisfaction survey scores). With respect to PBG equity-based, long-term incentive, PBG views the market value of its common stock as the
primary performance measure. This is especially true in the case of stock options, which have no value to the executive unless the market
value of PBG common stock goes up after the grant date. In the case of other equity-based awards to our PEO and PFO, such as RSUs, that
have value to the executive even if the market value of PBG common stock goes down after the grant date, PBG typically includes a second
performance component — such as a specific earnings per share performance target — that must be satisfied in order for the executive to vest
in the award. In addition, PBG may grant supplemental, performance-based equity awards to executives in order to link long-term
compensation with its strategic imperatives and to reinforce continuity within their senior leadership team, as they did with the 2008 Strategic
Leadership Awards.
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The percentage of our Named Executive Officers’ 2008 total target compensation that was performance-based (based on base salary, target
payout of the short-term cash incentive, the grant date fair value of the annual 2008 equity awards and the annualized grant date fair value
(one-fourth) of the one-time Strategic Leadership Award for Mr. Drewes) was approximately as follows:
Chairman and CEO Other Named Executive Officers (Average)
Why does PBG use earnings per share, volume and cash flow as the financial criteria for its performance-based compensation?
In selecting the criteria on which to base the performance targets underlying short-term and long-term incentive pay, the Committee
chooses criteria that are leading indicators of PBG’s success, important to PBG’s shareholders and external market professionals, and relevant
to their executives whose performance PBG strives to motivate towards the achievement of particular targets.
For PBG’s business and industry, the Committee believes the most relevant financial criteria on which to evaluate PBG’s success are
comparable (or operational) earnings per share (“EPS”), profit, volume of product sold, and operating free cash flow (as defined in PBG’s
earnings releases). The Committee views EPS as the best composite indicator of PBG’s operational performance. The Committee, therefore,
emphasizes comparable EPS in establishing performance targets for the Named Executive Officers. In evaluating PBG’s performance against
such EPS targets, the Committee considers the impact of unusual events on PBG’s reported EPS results (e.g., acquisitions, changes in
accounting practices, share repurchases, etc.) and adjusts the reported results for purposes of determining the extent to which the comparable
EPS targets were or were not achieved. The comparable EPS performance targets and results utilized by the Committee under PBG’s
compensation program are generally consistent with PBG’s publicly disclosed EPS guidance and results.
Short-Term Incentive. Under PBG’s short-term incentive program, the Committee establishes performance targets that are designed to
motivate executives to achieve short-term business targets. Therefore, for the executives leading PBG’s geographic business units, the
Committee links the payment of 80% of the executives’ annual bonus to the achievement of year-over-year profit and volume growth targets,
which are set at levels specifically chosen for each geographic territory. The Committee believes tying a substantial portion of these
executives’ annual bonuses to local profit and volume growth is the best way to motivate executives to achieve business success within the
regions they manage. Beginning in 2008, 20% of our PEO’s and PFO’s annual bonus is tied to individual non-financial goals which are
qualitative and specific to the executive’s area of responsibility. The Committee implemented these goals to reinforce the importance of certain
non-financial business objectives.
For our PEO and PFO, the Committee establishes a table of EPS targets that, depending on the level of EPS achieved by PBG during the
year, establishes the maximum bonus payable to each executive for that year. No bonus is payable if comparable EPS is below a certain level.
The Committee then uses its discretion to determine the actual bonus paid to each executive, which is never greater, and is typically much less,
than the maximum bonus payable. In exercising this discretion, the Committee refers to a separately established comparable EPS or net
operating profit before taxes (“NOPBT”) target, as well as volume and operating free cash flow targets, and individual non-financial targets, all
of which the Committee approves at the beginning of the year. For Named Executive Officers with worldwide responsibilities, the financial
targets are typically consistent with PBG’s EPS, volume and operating free cash flow guidance provided to external market professionals at the
beginning of the year. For Named Executive Officers with responsibility over one of PBG’s operating segments outside the United States,
these targets are typically consistent with the PBG’s internal operating plans for the particular segment.
As a result of the 2008 introduction of individual non-financial targets for certain members of PBG’s senior management, the
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Committee’s discretion is also guided by the PEO’s evaluation of the PFO’s performance against these targets. In addition, consistent with
past practice, the Committee separately considers the performance of our PEO and is guided by reference to certain pre-established non-
financial targets specific to our PEO (often related to strategic planning, organizational capabilities and/or executive development).
Notably, in establishing the actual bonus paid for each Named Executive Officer (within the limit of the maximum bonus payable), the
Committee refers to the above financial and non-financial targets, but reserves the right to pay a bonus at the level it deems appropriate based
on the performance of the Company and each executive. The performance targets established by the Committee with respect to the 2008 bonus
are more fully described at page 82.
Long-Term Incentive. The Committee provides the long-term incentive in the form of an equity-based award because it believes the price of
PBG common stock is a strong indicator of whether PBG is meeting its long-term objectives. The Committee, therefore, believes it important
that each executive, in particular senior executives, have personal financial exposure to the performance of PBG common stock. Such exposure
results in a link between PBG shareholder and executive interests and motivates PBG executives to achieve and sustain the long-term growth
of PBG. Consequently, PBG is committed to paying a significant portion of executive compensation in the form of PBG equity. PBG is
deliberate, however, in its use of equity compensation to avoid an inappropriate dilution of PBG’s current shareholders.
As a way of ensuring executives remain motivated and to bolster the retention of executives, the Committee does not provide for immediate
vesting of long-term incentive awards. Instead, consistent with the three-year time frame with respect to which PBG establishes its strategic
plans, the Committee typically provides for a three-year vesting period for equity-based awards. Executives must remain an employee of PBG
through the vesting date to vest in the award. For equity-based awards that have no intrinsic value to the executive on the grant date, such as
stock options, the Committee typically provides for staged vesting of such awards over the three-year vesting period (e.g., one-third vesting
each year). For equity-based awards that have value to the executive on the grant date, such as RSUs, the Committee typically provides for
vesting of the award only at the end of the three-year period.
Typically, for awards to our PEO and PFO that have actual value on the grant date (such as RSUs), the Committee also establishes a
comparable EPS performance target for the year in which the award is granted. The achievement of this EPS target is a prerequisite to vesting
in the award at the end of the three-year vesting period. The Committee believes such an additional performance element is appropriate to
ensure that the executives do not obtain significant compensation if PBG’s performance in the year of grant is significantly below the EPS
target. As the long-term incentive is designed to reinforce long-term business objectives, however, the Committee typically establishes this
one-year EPS performance target at a lower level than PBG’s external guidance. The Committee does so to ensure that executives only lose the
RSUs granted in that year if PBG misses its EPS target to such an extent as to indicate that a performance issue exists that is unlikely to be
resolved in the near term. The implementation of this additional EPS performance target also ensures that the compensation paid through the
long-term incentive is deductible to PBG (see “Deductibility of Compensation Expenses” below).
Why does PBG provide perquisites as an element of compensation?

Certain perquisites provided to senior executives are services or benefits designed to ensure that executives are fully focused on their
responsibilities to PBG. For example, PBG makes annual physicals available to senior executives so that they can efficiently address this
important personal issue and, therefore, maximize their productivity at work. Other perquisites, such as PBG’s company car program, simply
represent PBG’s choice on how to deliver fixed pay to executives.
PBG also provides certain specific perquisites to senior executives who move to and work in international locations. Such perquisites are
provided based on local and competitive practices. Perquisites such as housing allowances are typical in the international arena.
For certain limited perquisites, PBG reimburses (or grosses-up) the executive for the tax liability resulting from the income imputed to the
executive in connection with the perquisite. PBG does so because it does not want the provision of such perquisites to result in a financial
penalty to the executive or potentially discourage the executive from taking advantage of the perquisite. For example, PBG provides a gross-up
to an executive with respect to his or her annual physical and benefits provided under the Company car program. PBG does not, however,
gross-up perquisites with respect to which PBG does not have an interest in encouraging, such as their executives’ limited personal use of
corporate transportation.
In 2008, limited perquisites were provided to our Named Executive Officers, consistent with PBG’s practice described above. These
perquisites are described in more detail in the footnotes to the Summary Compensation Table.
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What other forms of compensation does PBG provide to employees, including the Named Executive Officers, and why are they provided?
PBG provides a number of other employee benefits to its employees, including the Named Executive Officers, that are generally comparable
to those benefits provided at similarly sized companies. Such benefits enhance PBG’s reputation as an employer of choice and thereby serve
the objectives of its compensation program to attract, retain and motivate executives.
Pension. During 2008, PBG maintained a qualified defined benefit pension plan for essentially all U.S. salaried and hourly non-union
employees hired before January 1, 2007 and a non-qualified defined benefit pension plan (the “Excess Plan”) for such employees with annual
compensation or pension benefits in excess of the limits imposed by the IRS. The Excess Plan provides for a benefit under the same benefit
formula as provided under the qualified plan, but without regard to the IRS limits. The terms of these plans are essentially the same for all
participating employees and are described in the Narrative to the Pension Benefits Table. Our Named Executive Officers have accrued pension
benefits under these plans.
PBG does not provide any specially enhanced pension plan formulas or provisions that are limited to their Named Executive Officers.
Effective April 1, 2009, PBG amended its qualified and non-qualified defined benefit pension plans to cease all future accruals for salaried
and non-union U.S. hourly employees with the exception of employees who, on March 31, 2009 (i) met a Rule of 65 (combined age and years of
service equal to or greater than 65) or (ii) were at least age 50 with five years of service. The Named Executive Officers satisfy the Rule of 65
and will continue to accrue pension benefits.
401(k) Savings Plan. Our Named Executive Officers participate in the same 401(k) savings program PBG provides to other U.S. employees.
This program includes a PBG match. PBG does not provide any special 401(k) benefits to our Named Executive Officers.
In general, salaried and non-union U.S. hourly employees hired on or after January 1, 2007 are eligible to receive a PBG company retirement
contribution (“CRC”) under the 401(k) plan equal to 2% of eligible compensation (annual pay and bonus). Effective April 1, 2009, salaried and
non-union U.S. hourly employees who ceased to accrue a benefit under the defined benefit pension plans will be eligible to receive the CRC,
and the CRC for all eligible employees with ten or more years of service will be 3% of eligible compensation.
Deferred Income Program. PBG also maintains an Executive Income Deferral Program (the “Deferral Program”), through which all PBG
executives, including the Named Executive Officers, paid in U.S. dollars, may elect to defer their base salary and/or their annual cash bonus.
PBG makes the Deferral Program available to executives so they have the opportunity to defer their cash compensation without regard to the
limit imposed by the IRS for amounts that may be deferred under the 401(k) plan. The material terms of the Deferral Program are described in
the Narrative to the Nonqualified Deferred Compensation Table.
Health and Welfare Benefits. PBG also provides other benefits such as medical, dental, life insurance, and long-term disability coverage, on
the same terms and conditions, to all employees, including the Named Executive Officers.
What policies and practices does PBG utilize in designing its executive compensation program and setting target levels of total
compensation?
The Committee has established several policies and practices that govern the design and structure of PBG’s executive compensation
program.
Process of Designing the Executive Compensation Program. Each year, the Committee reviews the PBG executive compensation program
and establishes the target compensation level for the Named Executive Officers who appear in the tables below. For a description of this
process, see the section entitled “Corporate Governance — Process of Designing the Executive Compensation Program” in PBG’s Proxy
Statement.
Target Compensation - Use of Peer Group Data. In establishing the target total compensation for the Named Executive Officers, the
Committee considers the competitive labor market, as determined by looking at PBG’s peer group of companies and other compensation
survey data. The Committee believes that the total compensation paid to our executive officers generally should be targeted within the third
quartile (i.e., which for 2008 was defined as the average of the 50th and 75th percentile) of the total compensation opportunities of executive
officers at comparable companies. The Committee believes that this target is appropriately competitive and provides a total compensation
opportunity that will be effective in attracting, retaining and motivating the leaders we need to be successful.
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For positions with respect to which there is widespread, publicly available compensation data (e.g. PEO), PBG establishes the third quartile
based on compensation data of PBG’s peer group companies. PBG’s peer group is made up of comparably sized companies, each of which is a
PBG competitor, customer or peer from the consumer goods or services industry. PBG’s peer group companies are generally world-class,
industry leading companies with superior brands and/or products. The Committee, with the assistance of PBG’s senior management and the
Committee’s independent compensation consultant, periodically reviews PBG’s peer group to ensure the peer group is an appropriate measure
of the competitive labor market for senior executives. In January 2008, after review and discussion with the Committee’s independent
compensation consultant and senior management, the Committee approved changes to PBG’s peer group of companies and this peer group
was used for purposes of determining the PEO’s target total compensation. The peer group was modified to put greater focus on companies
that do not require the development of big innovation platforms and are not as globally oriented. Specifically, the peer group of companies
was changed as follows:
De le te d Adde d
Colgate-Palmolive Company ConAgra Foods, Inc.
Kimberly-Clark Corporation Newell Rubbermaid Inc.
Staples, Inc. Sysco Corporation
Yum! Brands, Inc.
PBG’s current peer group includes:
Anheuser-Busch Companies, Inc H.J. Heinz Company

Aramark Corporation Hershey Foods Corporation
Campbell Soup Company Kellogg Company
Clorox Company, Inc. Newell Rubbermaid Inc.
Coca-Cola Enterprises Inc. PepsiAmericas, Inc.
ConAgra Foods, Inc. Sara Lee Corporation
Dean Foods Company Supervalu Inc.
FedEx Corporation Sysco Corporation
General Mills, Inc.
Comparative financial measures and number of employees for the 2008 peer group are shown below:
Pe e r Group* PBG*
75 th PBG Pe rce n t
Me dian Pe rce n tile Data Ran k
Revenue $11,799 $17,748 $13,591 68%
Net Income $ 604 $ 1,027 $ 532 48%
Market Capitalization $12,128 $19,052 $ 8,839 26%
Number of Employees 27,497 51,175 69,100 85%
* Dollars are in millions. Based on information as of December 31, 2007.

For senior executive positions for which peer group data is not consistently publicly available (e.g., a general manager with specific
geographic responsibilities), the Committee establishes the third quartile based on available peer group data and other compensation survey
data from nationally-recognized human resources consulting firms.
Based on the peer group and other survey data, the Committee establishes the third quartile for target total compensation for each
executive, as well as for various elements of total compensation, including base pay, total annual cash (base pay and target annual incentive)
and total compensation (total annual cash and long-term incentive). The Committee then establishes the midpoint of the third quartile as its
“market target.”
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Establishing Target Compensation; Role of the PEO. The Committee does not formulaically set the target total compensation for our
Named Executive Officers at the market target. In determining the appropriate target total compensation for each executive, the Committee
reviews each individual separately and considers a variety of factors in establishing his or her target compensation. These factors may include
the executive’s time in position, unique contribution or value to PBG, recent performance, and whether there is a particular need to strengthen
the retention aspects of the executive’s compensation. For a senior executive recently promoted into a new position, his or her total
compensation will often fall below the targeted third quartile. In such cases, the Committee may establish a multi-year plan to raise the
executive’s total compensation to the market target and, during such time, the executive’s compensation increases will often be greater than
those of other senior executives.
In establishing the target total compensation for the PEO, the Committee, together with PBG’s Nominating and Corporate Governance
Committee, formally advises the PBG Board of Directors on the annual individual performance of the PEO and the Committee considers
recommendations from its independent compensation consultant regarding his compensation. The PEO is not involved in determining his
compensation level and he is not present during the executive session during which the Committee evaluates the performance of the PEO
against pre-established qualitative and quantitative targets. The Committee, however, does request that the PEO provide it with a self-
evaluation of his performance against the pre-established targets prior to such executive session.
In establishing the target total compensation for Named Executive Officers other than the PEO, the Committee, with the assistance of the
PEO and its independent compensation consultant, evaluates each executive’s performance and considers other individual factors such as
those referenced above.
Use of Tally Sheets. The Committee annually reviews a tally sheet of our PEO’s and PFO’s compensation. This tally sheet includes detailed
data for each of the following compensation elements and includes a narrative description of the material terms of any relevant plan, program
or award:
• Annual direct compensation: Information regarding base salary, annual incentive, and long-term incentive for the past three years;
• Equity awards: Detailed chart of information regarding all PBG equity-based awards, whether vested, unvested, exercised or
unexercised, including total pre-tax value to the executive and holdings relative to the executive’s Stock Ownership Guidelines
(discussed below);
• Perquisites: Line item summary showing the value of each perquisite as well as the value of the tax gross-up, if any;
• Pension / Deferred Compensation: Value of pension plan benefits (qualified plan, non-qualified plan and total) and value of
defined-contribution plan accounts (401(k) and deferred compensation), including the year-over-year change in value in those
accounts;
• Life Insurance Benefits (expressed as multiple of cash compensation as well as actual dollar value);
• Description of all compensation and benefits payable upon a termination of employment.
The Committee reviews the information presented in the tally sheet to ensure that it is fully informed of all the compensation and benefits
the executive has received as a PBG employee. The Committee does not, however, specifically use the tally sheet or wealth accumulation
analysis in determining the executive’s target compensation for a given year.
Form of Equity-Based Compensation. Under PBG’s program, each executive annually receives an equity-based, long-term incentive award.
The PBG shareholder-approved Amended and Restated 2004 Long-Term Incentive Plan (the “LTIP”) authorizes the Committee to grant equity-
based awards in various forms, including stock options, restricted stock, and RSUs. The Committee selects the form of equity award based on
its determination as to which form most effectively achieves the objectives of PBG’s program. While the amount of the award varies based on
the level of executive, the form of the annual award has historically been the same for all PBG executives regardless of level.
The Committee periodically considers various forms of equity-based awards based on an analysis of market trends as well as their
respective tax, accounting and share usage characteristics. The Committee has determined that a mix of forms is appropriate and that the
annual long-term incentive award shall be in the form of 50% stock options and 50% RSUs (based on grant date fair value).
The Committee believes this mix of forms is the most appropriate approach for PBG because of the balanced impact this mix has when
viewed in light of several of the objectives of PBG’s executive compensation program, including motivating and retaining a high-performing
executive population, aligning the interests of PBG shareholders and executives, and creating a program that is financially appropriate for PBG
and sensitive to the dilutive impact on shareholders.
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Equity Award Grant Practices. PBG has a consistent practice with respect to the granting of stock options and other equity-based awards,
which the Committee established early in PBG’s history and which belies any concern regarding the timing or pricing of such awards, in
particular stock options.
Timing of Grants. Executives receive equity-based awards under three scenarios. First, all executives annually receive an award, which has
always been comprised, entirely or in part, of stock options. Under PBG’s long-established practice, the Committee approves this annual award
at its first meeting of the calendar year (around February 1) and establishes the grant date of the award as March 1. March 1 was selected
because it aligns with several other PBG human resources processes for employees generally, including the end of the annual performance
review process and the effective date of base salary increases.
Second, individuals who become an executive of PBG for the first time within six months after the March 1 date are eligible for an equity
award equal to 50% of the annual award. This pro-rated award is granted to all new executives on the same, fixed date of September 1.
Finally, senior executives may, on rare occasion, receive an additional equity-based award when they are first hired by PBG, when they are
promoted to a new position, or when there is a special consideration related to an executive that the Committee seeks to address. In all cases of
these awards, the grant date occurs after the award is approved.
Pricing of Stock Options. Throughout PBG’s history, the exercise price of stock options has been equal to the fair market value of PBG
common stock on the grant date. PBG has never backdated or repriced stock options. PBG defines “Fair Market Value” in the LTIP as the
average of the high and low sales prices of PBG common stock as recorded on the NYSE on the grant date, rounded up to the nearest penny.
PBG believes its stock option pricing methodology is an accurate representation of the fair market value of PBG common stock on the grant
date even though PBG’s methodology is different from that selected by the SEC (i.e., the closing price on the grant date).
What are some other policies and practices that govern the design and structure of PBG’s compensation program?
Stock Ownership Guidelines. To achieve PBG’s program objective of aligning PBG shareholder and executive interests, the Committee
believes that PBG’s business leaders must have significant personal financial exposure to PBG common stock. The Committee, therefore, has
established stock ownership guidelines for PBG’s key senior executives and directors. These guidelines are described in PBG’s Proxy
Statement.
Trading Windows / Trading Plans / Hedging. PBG restricts the ability of certain employees to freely trade in PBG common stock because of
their periodic access to material non-public information regarding PBG. As discussed in the corporate Governance section of PBG’s Proxy
Statement, under PBG’s Insider Trading Policy, all of PBG’s key executives are permitted to purchase and sell PBG common stock and exercise
PBG stock options only during limited quarterly trading windows. PBG’s senior executives, including our PEO and our PFO are generally
required to conduct all stock sales and stock option exercises pursuant to written trading plans that are intended to satisfy the requirements of
Rule 10b5-1 of the Securities Exchange Act. In addition, under the PBG Worldwide Code of Conduct, all employees, including our Named
Executive Officers, are prohibited from hedging against or speculating in the potential changes in the value of PBG common stock.
Compensation Recovery for Misconduct. While we believe our executives conduct PBG business with the highest integrity and in full
compliance with the PBG Worldwide Code of Conduct, the Committee believes it appropriate to ensure that PBG’s compensation plans and
agreements provide for financial penalties to an executive who engages in fraudulent or other inappropriate conduct. Therefore, the Committee
has included as a term of all equity-based awards that in the event the Committee determines that an executive has engaged in “Misconduct”
(which is defined in the LTIP to include, among other things, a violation of the Code of Conduct), then all of the executive’s then outstanding
equity-based awards shall be immediately forfeited and the Committee, in its discretion, may require the executive to repay to PBG all gains
realized by the executive in connection with any PBG equity-based award (e.g., through option exercises or the vesting of RSUs) during the
twelve-month period preceding the date the Misconduct occurred. This latter concept of repayment is commonly referred to as a “claw back”
provision.
Similarly, in the event of termination of employment for cause, PBG may cancel all or a portion of an executive’s annual cash incentive or
require reimbursement from the executive to the extent such amount has been paid.
As a majority of the compensation paid to an executive at the vice president level or higher is performance-based, the Committee believes
its approach to compensation recovery through the LTIP and annual incentive is the most direct and appropriate for PBG.
Employment / Severance Agreements. Neither our PEO nor any other Named Executive Officer has (or ever has had) an individual
employment or severance agreement with PBG or the Company entitling him to base salary, cash bonus, perquisites, or new equity grants
following termination of employment.
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Indeed, as a matter of policy and practice, PBG does not generally enter into any individual agreements with executives. There are limited
exceptions to this policy. First, in connection with the involuntary termination of an executive, PBG has, in light of the circumstances of the
specific situation, entered into appropriate severance or settlement agreements. Second, in the case of an executive’s retirement, PBG has, on
rare occasion, entered into a short-term consulting arrangement with the retired executive to ensure a proper transfer of the business
knowledge the retired executive possesses. Finally, PBG’s standard long-term incentive award agreement that applies to all executives
typically provides for the accelerated vesting of outstanding, unvested awards in the case of the executive’s approved transfer to PepsiCo,
death, disability or retirement subject to satisfaction of any applicable performance-based vesting condition in the case of approved transfer or
retirement. With respect to our PEO and other Named Executive Officers, the value of these benefits is summarized in the Narrative and
accompanying tables entitled Potential Payments Upon Termination or Change In Control.
Approved Transfers To / From PepsiCo. PBG maintains a policy intended to facilitate the transfer of employees between PBG and PepsiCo.
The two companies may, on a limited and mutually agreed basis, exchange employees who are considered necessary or useful to the other’s
business (“Approved Transfers”). Certain of PBG’s benefit and compensation programs (as well as PepsiCo’s) are designed to prevent an
Approved Transfer’s loss of compensation and benefits that would otherwise occur upon termination of his or her employment from the
transferring company. For example, at the receiving company, Approved Transfers receive pension plan service credit for all years of service
with the transferring company. Also, upon transfer, Approved Transfers generally vest in their transferring company equity awards rather
than forfeit them as would otherwise be the case upon a termination of employment.
Two of our Named Executive Officers, Mr. Drewes and Mr. Lardieri are Approved Transfers from PepsiCo. As discussed in the footnotes to
the Pension Benefits Table, Mr. Drewes and Mr. Lardieri will be eligible for pension benefits attributable to service both at PepsiCo prior to
transfer and at the Company. The Potential Payments Upon Termination or Change In Control section sets forth in more detail the various
compensation and benefits available to Approved Transfers.
Change in Control Protections. PBG was created in 1999 via an initial public offering by PepsiCo, and PepsiCo holds approximately 40% of
the voting power of PBG common stock. As such, an acquisition of PBG can only practically occur with PepsiCo’s consent. Given this
protection against a non-PepsiCo approved acquisition, the only change in control protection PBG provides through its executive
compensation program is a term of the LTIP, which provides for the accelerated vesting of all outstanding, unvested equity-based awards at
the time of a change in control of PBG. With respect to our PEO and other Named Executive Officers, the events that constitute a change in
control and the value of change in control benefits provided under the LTIP are summarized in the Narrative and accompanying tables entitled
Potential Payments Upon Termination or Change In Control. PBG does not gross-up any executive for potential excise taxes that may be
incurred in connection with a change in control.
Deductibility of Compensation Expenses. Pursuant to Section 162(m) of the Internal Revenue Code (“Section 162(m)”), certain
compensation paid to the PEO and other Named Executive Officers in excess of $1 million is not tax deductible, except to the extent such excess
compensation is performance-based. The Committee has and will continue to carefully consider the impact of Section 162(m) when
establishing the target compensation for executive officers. For 2008, PBG believes that substantially all of the compensation paid to executive
officers satisfies the requirements for deductibility under Section 162(m).
As one of PBG’s primary program objectives, however, the Committee seeks to design the executive compensation program in a manner that
furthers the best interests of PBG and its shareholders. In certain cases, the Committee may determine that the amount of tax deductions lost is
insignificant when compared to the potential opportunity a compensation program provides for creating shareholder value. The Committee,
therefore, retains the ability to pay appropriate compensation to executive officers, even though such compensation is non-deductible.
What compensation actions were taken in 2008 and why were they taken?
In January 2008, the Committee took action with respect to each element of total compensation (annual base salary, short-term cash
incentive and long-term equity incentive award) for senior executives of PBG who appear in the PBG Proxy Statement including our PEO and
our PFO following the principles, practices and processes described above. The PEO’s and PFO’s 2008 target total compensation did not
exceed the market target based on the data considered by the Committee in January 2008.
Base Salary. In accordance with PBG’s practices with respect to individual raises, the level of annual merit increase in the base salary for
each Named Executive Officer in 2008 took into consideration the performance of PBG and the executive, any increase in the executive’s
responsibilities, and with respect to the PEO and PFO, an analysis of whether the executive’s base salary was within the third quartile of PBG’s
peer group. The Committee determined that each of the PEO and PFO had performed well with respect to his role and responsibilities and the
average merit increase in the annual rate of base salary for our Named Executive Officers receiving a merit increase was 6.6%. The Committee
approved a more substantial increase in the annual salary for our PEO (11.1%) in order to bring his compensation closer to the targeted third
quartile.
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Annual Cash Incentive Award. The Committee established the 2008 annual incentive targets for our executives in January 2008 with a
potential payout range from 0 to 200% of target. At such time, the Committee determined that an increase in Mr. Foss’ annual incentive target,
from 140% to 150% of base pay, was appropriate in light of his position and responsibilities and as measured against the targeted third quartile
of total compensation of CEOs within the peer group.
Actual Annual Cash Incentive Awards. In February 2009, the Committee determined that PBG’s 2008 comparable EPS performance of $2.25,
which was in excess of the $1.75 target, resulted in a maximum bonus of $5 million payable to our PEO and PFO under Section 162(m). The
Committee then reviewed PBG’s 2008 performance against the pre-established EPS/NOPBT, volume and operating free cash flow targets which
the Committee uses to guide its negative discretion in determining the actual bonus payable to each senior executive.
ÿ Financial Performance Targets and Results. The overall achievement of financial targets is used to determine 80% of the actual bonus
payout for our PEO and PFO and 100% for Mr. Lardieri, with each measure separately weighted. Each financial measure for each of the Named
Executive Officers was worldwide in scope and each target was consistent with the Company’s external guidance at the start of 2008.
W orldwide Me asu re W e ightin g* Targe t Actu al Re su lt

EPS (comparable) 40% $ 2.37 $ 2.25
Volume Growth v. Prior Year 24% 2.8% -4.0%
Operating Free Cash Flow 16% $635 million $526 million
* The weighting for Mr. Lardieri was 50%, 30% and 20% for EPS, Volume Growth and Operating Free Cash
Flow, respectively.
At its meeting in February 2009, the Committee certified the Actual Results shown in the tables above. The Committee determined that
PBG’s performance against the worldwide measures resulted in a financial target bonus score of 12% for Messrs. Foss, Drewes and Lardieri.
Following this determination, the Committee reviewed and discussed PBG’s overall operating performance during 2008. The Committee noted
the PBG’s year-over-year performance, in particular comparable EPS and operating profit growth, which PBG achieved despite the economic
downturn and adverse market conditions. In light of these factors, the Committee determined to exercise its discretion and award
Messrs. Foss, Drewes and Lardieri a financial target bonus score of 50%.
ÿ Non-Financial Performance Targets and Results. The overall achievement of individual non-financial targets is used to determine 20%
of the actual bonus payout for our PEO and PFO. The Committee reviewed and concurred in the assessment of our PEO with respect to the
performance of our PFO against the pre-established non-financial goals. The goals were similar to the qualitative measures used by the
Committee to evaluate the performance of the PEO, such as development of strategic plans. The Committee determined that a 50% payout
based on non-financial measures was appropriate for our PFO.
The Committee then determined that Mr. Foss had performed well against his pre-established non-financial measures. In particular, the
Committee noted that Mr. Foss had been successful in developing PBG’s global growth strategy with the acquisition of Lebedyansky in
Russia and in expanding the PBG’s product portfolio with new products, such as Crush and Muscle Milk. The Committee also noted that
during 2008, Mr. Foss was successful in further strengthening organization capability through greater employee engagement and improved
executive representation of minorities. The Committee determined that an 80% payout based on non-financial measures was appropriate for
Mr. Foss.
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For 2008, the annual incentive targets and actual payout amounts for each of the Named Executive Officers were as follows:
2008 An n u al C ash Ince n tive Awards

Targe t 2008 Award
Nam e d Exe cu tive O ffice r (% of S alary) Targe t ($) (% of Targe t) 2008 Award ($)
Eric J. Foss 150% 1,500,000 56% 840,000
Alfred H. Drewes 85% 408,000 50% 204,000
Thomas M. Lardieri 65% 211,250 50% 105,630

The Committee believes the 2008 actual awards reflected PBG’s overall operating performance in 2008 and each individual’s contribution to
such performance and were consistent with its policy to link pay to performance.
Long-Term Incentive. All of the 2008 stock option and RSU awards to our Named Executive Officers are reflected in the Grants of Plan-
Based Awards Table and their terms and conditions are set out in the Narrative to the Summary Compensation Table and Grants of Plan-Based
Awards Table.
Strategic Leadership Awards. During 2008, the Committee approved the Strategic Leadership Award, a special, one-time performance-
based RSU award for certain senior executives other than the PEO. The Committee awarded the Strategic Leadership Award to Mr. Drewes and
the other senior executives in order to emphasize the linkage between long-term compensation and the Company’s strategic imperatives and to
reinforce continuity within the Company’s senior leadership team over the next four years.
The Committee established the target value of each executive’s Strategic Leadership Award at either $1,000,000 or $1,500,000 based on the
executive’s scope of responsibilities and contribution to PBG. The Committee made vesting of the Strategic Leadership Award contingent
upon PBG’s achievement of 2008 and 2009 comparable EPS performance targets of at least $0.75 in each year as well as the executive’s
continued employment with the Company through the end of 2011. In February 2009, the Committee certified that the 2008 EPS performance
target was met. Provided the 2009 EPS target and service vesting condition are satisfied, each executive is eligible to receive RSUs with a value
up to 150% of his target value, with the final value of the award determined by the Committee at the beginning of 2010. The threshold, target
and maximum values for each Named Executive Officer are set forth in the Grant of Plan-Based Awards Table. The final value will be
determined by the Committee based on its own evaluation as well as the PEO’s assessment of PBG’s performance in 2008 and 2009 against
performance criteria established for each of 2008 and 2009. The performance criteria for 2008 were: (i) increased distribution and market share of
specified products within PBG’s brand portfolio; (ii) improved customer satisfaction, as measured by an external survey, and execution at point
of sale; (iii) year-over-year improvement in the cost of making our products (i.e., operational efficiency); and (iv) year-over-year improvement
in the Company’s internal employee satisfaction survey. The specific target levels for each of the above referenced criteria have not been
externally communicated and involve confidential, commercial information, disclosure of which could result in competitive harm to the
Company. The targets for each criteria are set at levels intended to incent the achievement of both short-term and long-term growth in these
key strategic areas. To achieve target performance, the executive team must drive broad-based effort and contribution from the geographical
and functional teams throughout PBG. The targets, individually and together, are designed to be challenging to attain and achievement of the
targets requires performance beyond our normal operating plan expectations for each year of the performance period.
Annual Equity Award. Consistent with its established practice, the Committee approved the 2008 long-term incentive awards for each of the
Named Executive Officers after reviewing comparative market data for total compensation, including data related to what portion of total
compensation was paid in the form of long-term incentive. The Committee also considered each executive’s role and level of responsibility
within PBG. Mr. Foss received a long-term equity incentive award with a present value of approximately $5,000,000. The Committee determined
this award was appropriate in light of his position and responsibilities and as measured against the targeted third quartile of total
compensation of CEOs within the peer group. Mr. Drewes received a long-term equity incentive award with a present value of approximately
$1,000,000 and Mr. Lardieri was granted a long-term equity incentive award with a present value of approximately $575,000. These awards
included the same terms and conditions as the awards to all other executives, except that consistent with its practice, the Committee made the
vesting of the RSU award granted to our PFO and PEO subject to the achievement of a 2008 comparable PBG EPS performance target of $0.75.
In February 2009, the Committee determined that the 2008 EPS target had been satisfied, such that our PEO and PFO will vest in his annual
2008 RSU award if he remains employed by the Company through March 1, 2011.
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Supplemental Stock Option Award for the PEO. In October 2008, after consultation with the independent compensation consultant, the
Committee awarded Mr. Foss a supplemental long-term equity incentive award comprised of 400,000 stock options to recognize his
appointment as Chairman of the Board of Directors of PBG and to bring Mr. Foss’ target total compensation (including the annualized value of
promotional awards) closer to the peer group market target.
What noteworthy executive compensation actions took place during the first quarter of 2009 and why were such actions taken?
In February 2009, in response to the challenging global economic conditions, the Committee determined that the total target compensation
for each Named Executive Officer would not increase from 2008 levels. Specifically, the Committee determined to freeze salaries at 2008 levels
and determined that there would be no change to the bonus target or the annual equity award value for any of the Named Executive Officers.
The Committee also reviewed the current design of the annual long-term incentive program, noting that all outstanding stock options held by
the Named Executive Officers are “out-of the money”. The Committee determined that the design remained consistent with the primary
objectives of attracting, retaining and motivating a talented and diverse group of executives and concluded that no design change was
appropriate at this time.
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2008 Summary Compensation Table
C h an ge in
Pe n sion Valu e
Non -Equ ity an d
Ince n tive Non qu alifie d
Plan De fe rre d
S tock O ption C om pe n - C om pe n sation All O the r
Nam e an d Prin cipal S alary Awards Awards sation Earn ings C om pe n sation Total
Position Ye ar ($) ($) (1) ($) (1) ($) ($) (2)(3) ($) (4) ($)
Eric J. Foss 2008 984,615 2,383,547 1,934,908 840,000 1,166,000 191,748(5) 7,500,818
Principal Executive Officer 2007 892,308 1,584,557 1,893,158 1,805,580 594,000 66,680 6,836,283
2006 754,500 975,979 2,025,066 1,289,000 387,000 64,513 5,496,058
Alfred H. Drewes 2008 476,154 841,694 444,431 204,000 505,000 50,669(6) 2,521,948
Principal Financial Officer 2007 451,154 304,747 664,901 551,120 222,000 81,884 2,275,806
2006 425,385 139,141 899,853 456,150 180,000 69,442 2,169,971
Thomas M. Lardieri 2008 323,462 162,331 48,920 105,630 159,000 41,617(7) 840,960
Principal Accounting Officer 2007 182,942 48,361 0 170,200 54,000 16,441 471,944
2006 — — — — — — —
1. The amount included in this column is the compensation cost recognized by PBG in fiscal year 2008 related
to the executive’s outstanding equity awards that were unvested for all or any part of 2008, calculated in
accordance with SFAS 123R without regard to forfeiture estimates. This amount encompasses equity awards
that were granted in 2005, 2006, 2007 and 2008 and was determined using the assumptions set forth in Note
3, Share-Based Compensation, to Bottling LLC’s Annual Report on Form 10-K for the fiscal year ended
December 27, 2008 (for 2008, 2007, 2006 awards) and Note 3, Share-Based Compensation, to Bottling LLC’s
Annual Report on Form 10-K for the fiscal year ended December 29, 2007 (for 2005 awards). As of the end of
PBG’s fiscal year, the market price of PBG’s common stock was below the exercise price of the option
awards. Therefore, all of the option awards are “out of the money” and have no intrinsic value to the
executive.
2. No executive earned above-market or preferential earnings on deferred compensation in 2008 and, therefore,
no such earnings are reported in this column. Consequently, this amount reflects only the aggregate change
in 2008 in the actuarial present value of the executive’s accumulated benefit under all PBG-sponsored
defined benefit pension plans in which the executive participates. The executive participates in such plans
on the same terms as all other eligible employees.
3. This amount was calculated based on the material assumptions set forth in Note 11, Pension and
Postretirement Medical Benefit Plans, to Bottling LLC’s Annual Report on Form 10-K for the fiscal year
ended December 27, 2008 and Note 9, Pension and Postretirement Medical Benefit Plans, to Bottling LLC’s
Annual Report on Form 10-K for the fiscal year ended December 29, 2007, except for the generally applicable
assumptions regarding retirement age and pre-retirement mortality. During 2008, PBG changed its
measurement date from September 30 to the fiscal year-end. Consequently, we have used an annualized
approach adjusting the 15 month period to a 12 month period, consistent with SEC guidance, in determining
the change in pension value.
4. The amount in this column reflects the actual cost of perquisites and personal benefits provided by PBG to
each of the Named Executive Officers as well as the reimbursements paid by PBG to the executive for his tax
liability related to certain of these PBG provided benefits and the dollar value of life insurance premiums paid
by PBG for the benefit of the Named Executive Officers each on the same terms and conditions as all other
eligible employees. The particular benefits provided to each Named Executive Officer are described below in
footnotes 5, 6, and 7. In addition, PBG purchases club memberships, season tickets and passes to various
sporting events and other venues for purposes of business entertainment. On limited occasions, employees
(including one or more of the Named Executive Officers) may use such memberships, tickets or passes for
personal use. There is no incremental cost to the Company in such circumstances. Therefore, no cost of
such memberships, tickets and passes is reflected in the “All Other Compensation” column.
5. This amount includes: $160,425, which equals the total cost of all perquisites and personal benefits provided
by PBG to Mr. Foss, including a car allowance, financial advisory services, personal use of corporate
transportation, nominal recognition awards and nominal personal expenses incurred in connection with a
PBG Board of Directors’ meeting. The value of Mr. Foss’ personal use of the PBG-leased aircraft is $128,225
and represents the aggregate incremental cost to the Company. For this purpose, the Company has
calculated the aggregate incremental cost based on the actual variable operating costs that were incurred as
a result of Mr. Foss’ use of the aircraft, which includes an hourly occupied rate, fuel rate and other flight
specific fees. Mr. Foss is responsible for all taxes associated with any personal use of corporate
transportation.
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The amount shown in the above table also includes: (i) $17,629, which equals all tax reimbursements paid to
Mr. Foss for the tax liability related to PBG provided perquisites and personal benefits, including his car
allowance, financial advisory services, nominal recognition awards and nominal personal expenses incurred
in connection with a PBG Board of Directors’ meeting; (ii) a standard PBG matching contribution of $9,038 to
Mr. Foss’ 401(k) account; and (iii) $4,656, which represents the dollar value of life insurance premiums paid
by PBG for the benefit of Mr. Foss.
6. This amount includes: (i) $25,896, which equals the total cost of all perquisites and personal benefits
provided by PBG to Mr. Drewes, including a car allowance, financial advisory services and a nominal
recognition award; (ii) $13,489, which equals all tax reimbursements paid to Mr. Drewes for the tax liability
related to PBG provided perquisites and personal benefits, including his car allowance, financial advisory
services and a nominal recognition award; (iii) a standard PBG matching contribution of $9,200 to
Mr. Drewes’ 401(k) account; and (iv) $2,084, which represents the dollar value of life insurance premiums
paid by PBG for the benefit of Mr. Drewes.
7. This amount includes: (i) $24,856, which equals the total cost of all perquisites and personal benefits
provided by PBG to Mr. Lardieri, including a company car and related car expenses, a service award and a
nominal recognition award; (ii) $7,227, which equals all tax reimbursements paid to Mr. Lardieri for the tax
liability related to PBG provided perquisites and personal benefits, including a company car and related car
expenses and a nominal recognition award; (iii) a standard PBG matching contribution of $8,781 to
Mr. Laridieri’s 401(k) account; and (iv) $753, which represents the dollar value of life insurance premiums
paid by PBG for the benefit of Mr. Lardieri.
Grants of Plan-Based Awards In Fiscal Year 2008

All Other
Option
Awards:
Number Grant
of Exercise Date Fair
Estimated Possible Payouts Under Estimated Future Payouts Under Securities or Base Closing Value of
Non-Equity Incentive Plan Awards(1) Equity Incentive Plan Awards(2)(3) Under- Price of Market Stock and
Date of Thres- Thres- lying Option Price on Option
Grant Board hold Target Maximum hold Target Maximum Options Awards Grant Awards
Name Date Action ($) ($) ($) (#) (#) (#) (#) ($/Sh) Date ($) ($)(4)
Eric J. Foss
Non-Equity — — 0 1,500,000 3,000,000
RSUs 03/01/2008 01/25/2008 72,823 2,500,014
Options 03/01/2008 01/25/2008 218,468 34.33 34.01 1,542,384
Options 10/02/2008 10/02/2008 400,000 28.90 28.49 2,760,000
Alfred H. Drewes
Non-Equity — — 0 408,000 816,000
SLA RSUs 01/01/2008 10/11/2007 0 37,765 56,648 1,500,026
RSUs 03/01/2008 01/25/2008 14,565 500,016
Options 03/01/2008 01/25/2008 43,694 34.33 34.01 308,480
Thomas M.
Lardieri Non-
Equity — — 0 211,250 422,500
RSUs 03/01/2008 01/25/2008 8,375 287,514
Options 03/01/2008 01/25/2008 25,124 34.33 34.01 177,375
1. Amounts shown reflect the threshold, target and maximum payout amounts under PBG’s annual incentive
program which is administered under the PBG shareholder-approved 2005 Executive Incentive
Compensation Plan (“EICP”). The target amount is equal to a percentage of each executive’s salary, which
for 2008 ranged from 65% to 150%, depending on the executive’s role and level of responsibility. The
maximum amount equals 200% of the target amount. The actual payout amount is contingent upon
achievement of certain financial and non-financial performance goals. Please refer to the narrative below for
more detail regarding each executive’s target amount, the specific performance criteria used to determine the
actual payout and how such payout is typically the result of the Committee’s exercise of negative discretion
with respect to separate maximum payout amounts established for purposes of Section 162(m).
2. In addition to the 2008 annual RSU awards, this column reflects a special award of performance-based RSUs
(Strategic Leadership Award or SLA RSUs) granted to Mr. Drewes. Please refer to the narrative below for
more detail regarding the Strategic Leadership Award.
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3. The 2008 stock option awards and RSU awards, including the Strategic Leadership Award, were made under
the LTIP, which was approved by PBG shareholders in 2008.
4. The assumptions used in calculating the SFAS 123R grant date fair value of the option awards and stock
awards are set forth in Note 3, Share-Based Compensation, to Bottling LLC’s Annual Report on Form 10-K
for the fiscal year ended December 27, 2008. As of the end of PBG’s fiscal year, the market price of PBG’s
common stock was below the exercise price of the option awards. Therefore, all of the option awards are
“out of the money” and have no intrinsic value to the executive.
Narrative to the Summary Compensation Table and Grants of Plan-Based Awards Table
Salary. The 2008 annual salary of each Named Executive Officer is set forth in the “Salary” column of the Summary Compensation Table.
Compensation levels for each of the Named Executive Officers are at the discretion of the Committee. There are no written or unwritten
employment agreements with any Named Executive Officer. A salary increase or decrease for a Named Executive Officer may be approved by
the Committee at any time in the Committee’s sole discretion. Typically, the Committee considers salary increases for each of the Named
Executive Officers based on considerations such as the performance of PBG and the executive, any increase in the executive’s responsibilities
and the executive’s salary level relative to similarly situated executives at peer group companies.
Stock Awards. Awards of RSUs are made under the LTIP at the discretion of the Committee. The annual RSU awards were approved by the
Committee in January 2008, with a grant date of March 1, 2008, to all executives of PBG, including the Named Executive Officers. The number of
RSUs awarded was determined based on an award value established by the Committee for each executive. The actual number of RSUs awarded
was calculated by dividing the respective award value by the “Fair Market Value” of a share of PBG common stock on the grant date, rounded
up to the next whole share. The LTIP defines Fair Market Value as the average of the high and low sales price for PBG common stock as
reported on the NYSE on the grant date.
Vesting of the annual RSUs awarded to certain of the Named Executive Officers in 2008, specifically our Principal Executive Officer and
Principal Financial Officer, was made subject to the achievement of a pre-established PBG EPS performance goal as well as continued
employment for three years. In February 2009, the Committee determined that this PBG EPS goal was met. Thus, the RSUs will fully vest after
three years provided the Principal Executive Officer and Principal Financial Officer remains continuously employed through the third
anniversary of the grant date.
Mr. Drewes also received an additional, special award of performance-based RSUs (Strategic Leadership Award) in January 2008. This
Strategic Leadership Award will vest only if pre-established PBG EPS targets and performance criteria are met in both 2008 and 2009 and the
executive remains employed through January 1, 2012. Provided the pre-established PBG EPS targets are satisfied, Mr. Drewes will be eligible to
receive a maximum award equal to 150% of the award value. The actual value of the award (from 0 — 150% of the award value) will be
determined by the Committee based on achievement of the performance criteria.
All RSUs are credited with dividend equivalents in the form of additional RSUs at the same time and in the same amount as dividends are
paid to shareholders of PBG. If the underlying RSUs do not vest, no dividend equivalents are paid. RSUs are paid out in shares of PBG
common stock upon vesting. With the exception of the Strategic Leadership Award, vesting of the RSUs in the event of death, disability,
retirement, or Approved Transfer is the same as described below for stock options; provided, however, that accelerated vesting in the case of
retirement or Approved Transfer to PepsiCo is subject to satisfaction of any performance-based condition. The Strategic Leadership Award
does not vest upon retirement or Approved Transfer to PepsiCo. All RSUs vest and are paid out upon the occurrence of a “Change In
Control” as defined under the LTIP (“CIC”), as more fully discussed in the narrative and accompanying tables entitled Potential Payments
Upon Termination or Change In Control. RSUs and shares received upon certain prior payouts of RSUs are subject to forfeiture in the event an
executive engages in Misconduct.
Option Awards. Stock option awards are made under the LTIP at the discretion of the Committee. The annual stock option awards were
approved by the Committee in January 2008, with a grant date of March 1, 2008, to all executives of PBG, including the Named Executive
Officers. The exercise price was equal to the Fair Market Value of a share of PBG common stock on the grant date, rounded to the nearest
penny. The stock options have a term of ten years and no dividends or dividend rights are payable with respect to the stock options. The 2008
stock option awards for all executives, including the Named Executive Officers, become exercisable in one-third increments, on the first, second
and third anniversary of the grant date provided the executive is actively employed on each such date.
However, the vesting is accelerated in the event of death, disability, retirement, a CIC or Approved Transfer to PepsiCo. In the event of
death or Approved Transfer to PepsiCo, unvested stock options fully vest immediately. In the event of retirement or disability, unvested stock
options immediately vest in proportion to the number of months of active employment during the vesting period over the total number of
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months in such period. In the event of death, disability, retirement or an Approved Transfer to PepsiCo, the vested options remain exercisable
for their original ten-year term, provided that in the case of an Approved Transfer, the Named Executive Officer remains actively employed at
PepsiCo. In the event of a subsequent termination of employment from PepsiCo, the Named Executive Officer must exercise vested stock
options within 90 calendar days of termination or the stock options are automatically cancelled. Vesting is also accelerated upon the
occurrence of a CIC as more fully discussed in the narrative and accompanying tables entitled Potential Payments Upon Termination or
Change In Control. Stock option awards, including certain gains on previously exercised stock options, are subject to forfeiture in the event an
executive engages in Misconduct.
In October 2008, the Committee approved a supplemental stock option award for Mr. Foss as a result of his appointment to the position of
Chairman of the Board of Directors of PBG. This supplemental award will vest on October 2, 2013 provided Mr. Foss is actively employed on
such date and is subject to the same accelerated vesting and exercise provisions described above.
Non-Equity Incentive Plan Compensation. The 2008 annual, performance-based cash bonuses paid to the Named Executive Officers are
shown in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table and the threshold, target and maximum
bonus amounts payable to each Named Executive Officer are shown in the Grants of Plan-Based Awards Table. These award amounts were
approved by the Committee and were paid under the EICP, which was approved by PBG shareholders in 2005 in order to ensure that PBG may
recognize a tax deduction with respect to such awards under Section 162(m) of the Code. The threshold, target and maximum payout amounts
are shown in the “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” column in the Grants of Plan-Based Awards Table.
The pre-established performance criteria, actual performance and each Named Executive Officer’s target and actual payout amounts are
discussed in detail in the CD&A.
Change in Pension Value and Nonqualified Deferred Compensation Earnings. The material terms of the pension plans governing the
pension benefits provided to the Named Executive Officers are more fully discussed in the narrative accompanying the Pension Benefits Table.
The material terms of the non-qualified elective deferred compensation plan are more fully discussed in the narrative accompanying the
Nonqualified Deferred Compensation Table.
All Other Compensation. The perquisites, tax reimbursements and all other compensation paid to or on behalf of the Named Executive
Officers during 2008 are described fully in the footnotes to the Summary Compensation Table.
Proportion of Salary to Total Compensation. As noted in the CD&A, PBG believes that the total compensation of our business leaders
should be closely tied to the performance of PBG. Therefore, the percentage of total compensation that is fixed generally decreases as the level
of the executive increases. This is reflected in the ratio of salary in proportion to total compensation for each Named Executive Officer. In 2008,
Mr. Foss’ ratio of salary in proportion to total compensation shown in the Summary Compensation Table was 13%, and the ratio for
Messrs. Drewes and Lardieri was approximately 19% and 38%, respectively.
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Outstanding Equity Awards At 2008 Fiscal Year-End

Option Awards Stock Awards
Incentive
Equity
Equity Plan
Incentive Awards:
Market Plan Market or
Value of Awards: Payout
Shares Number of Value of
or Units Unearned Unearned
Number of Number of Number of of Shares, Shares,
Securities Securities Shares or Stock Units or Units or
Underlying Underlying Units of That Other Other
Unexercised Unexercised Option Stock That Have Rights That Rights That
Stock Options Options Exercise Option Have Not Have Not Have Not
Option (#)(26) (#)(26) Price Expiration Stock Award Not Vested Vested Vested Vested
Name Grant Date Exercisable Unexercisable ($) Date Grant Date (#) ($)(26) (#) ($)(26)
E. Foss 03/01/2002 (1) 145,743 0 25.25 03/29/2012 10/07/2005 (10) 125,718 2,765,796
03/01/2003 (2) 223,404 0 23.50 03/29/2013 03/01/2006 (11) 35,627(17) 783,794
03/01/2004 (3) 182,373 0 29.50 03/29/2014 03/01/2007 (12) 66,846(18) 1,470,612
03/01/2005 (4) 212,389 0 28.25 02/28/2015 03/01/2008 (13) 73,998(19) 1,627,956
03/01/2006 (5) 67,530 34,789 29.32 02/29/2016
07/24/2006 (6) 0 200,000 33.77 07/23/2016
03/01/2007 (7) 64,181 130,309 30.85 02/28/2017
03/01/2008 (8) 0 218,468 34.33 02/28/2018
10/02/2008 (9) 0 400,000 28.90 10/01/2018
A. Drewes 03/01/2003 (2) 127,660 0 23.50 03/29/2013 03/01/2006 (11) 17,813(20) 391,886
03/01/2004 (3) 104,407 0 29.50 03/29/2014 03/01/2007 (12) 16,712(21) 367,664
03/01/2005 (4) 113,274 0 28.25 02/28/2015 01/01/2008 (14) 38,374(25) 844,228
03/01/2006 (5) 33,765 17,395 29.32 02/29/2016 03/01/2008 (13) 14,800(22) 325,600
03/01/2007 (7) 16,045 32,578 30.85 02/28/2017
03/01/2008 (8) 0 43,694 34.33 02/28/2018
T. Lardieri 03/01/2008 (8) 0 25,124 34.33 02/28/2018 06/01/2007 (15) 7,324(23) 161,128
03/01/2008 (16) 8,510(24) 187,220
1. The vesting schedule with respect to this 2002 stock option award is as follows: 25% of the options vested
and became exercisable on March 30, 2003; 25% of the options vested and became exercisable on March 30,
2004; and the remaining 50% of the options vested and became exercisable on March 30, 2005.
2007; and the remaining 50% of the options vest and become exercisable on March 30, 2008, provided the
executive remains employed through such date.
and became exercisable on March 1, 2007; 33% of the options vest and become exercisable on March 1,
executive remains employed through the applicable vesting dates.
6. This stock option award was granted to Mr. Foss in recognition of his role and responsibilities as President
and Chief Executive Officer of PBG. The award fully vests and becomes exercisable on July 24, 2011,
provided Mr. Foss remains employed through such date.
7. The vesting schedule with respect to this 2007 stock option award is as follows: 33% of the options vest
and become exercisable on March 1, 2008; 33% of the options vest and become exercisable on March 1,
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8. The vesting schedule with respect to this 2008 stock option award is as follows: 33% of the options vest
and become exercisable on March 1, 2009; 33% of the options vest and become exercisable on March 1,
9. This stock option award was granted to Mr. Foss in recognition of his new role and responsibilities as
Chairman of the Board of Directors of PBG. The award fully vests and becomes exercisable on October 2,
2013, provided Mr. Foss remains employed through October 2, 2013.
10. Since the pre-established PBG earnings per share performance target was met, these RSUs fully vest on
October 7, 2010, provided the executive remains employed through October 7, 2010.
March 1, 2009, provided the executive remains employed through March 1, 2009.
14. The vesting of this RSU award is contingent upon the satisfaction of a pre-established 2008 and 2009 PBG
earnings per share performance target, achievement of specific performance criteria and continued
employment through January 1, 2012.
15. These RSUs fully vest on June 1, 2010, provided the executive remains employed through June 1, 2010.
16. These RSUs fully vest on March 1, 2011, provided the executive remains employed through March 1, 2011.
17. This amount includes 1,521 RSUs accumulated as a result of dividend equivalents credited to the executive
at the same time and in the same amount as dividends were paid to shareholders of PBG common stock in
accordance with the governing RSU agreement.
20. This amount includes 760 RSUs accumulated as a result of dividend equivalents credited to the executive at
the same time and in the same amount as dividends were paid to shareholders of PBG common stock in
26. The closing price for a share of PBG common stock on December 26, 2008, the last trading day of PBG’s
fiscal year, was $22.00. This price is below the exercise price of the option awards. Therefore, all of the
option awards are “out of the money” and have no intrinsic value to the executive.
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Option Exercises and Stock Vested In Fiscal Year 2008
O ption Awards S tock Awards

Nu m be r of S h are s Value Re aliz e d Nu m be r of S h are s Value Re aliz e d
Nam e Acqu ire d on Exe rcise (#) on Exe rcise ($) Acqu ire d on Ve stin g (#) on Ve stin g ($)
Eric J. Foss 0 0 0 0
Alfred H. Drewes 0 0 0 0
Thomas M. Lardieri 0 0 0 0
Pension Benefits for the 2008 Fiscal Year
Nu m be r of Ye ars Pre se n t Valu e of Paym e n ts Durin g

C re dite d S e rvice Accum u late d Be n e fit Last Fiscal Ye ar
Nam e Plan Nam e (#) (1) ($) (2) ($)
Eric J. Foss PBG Salaried Employees Retirement Plan 26.6 462,000 0
PBG Pension Equalization Plan 26.6 3,626,000 0
Alfred H. Drewes PBG Salaried Employees Retirement Plan 26.6(3) 565,000 0

PBG Pension Equalization Plan 26.6(3) 1,887,000 0
Thomas M. Lardieri PBG Salaried Employees Retirement Plan 20.0(4) 308,000 0

PBG Pension Equalization Plan 20.0(4) 438,000 0
1. The number of years of service shown for each executive includes service with PepsiCo, PBG’s parent
company prior to March 31, 1999, at which time PBG became a separate, publicly traded company. The
executive’s service with PepsiCo prior to March 31, 1999 has not been separately identified and the benefit
attributable to such service has not been separately quantified for such period. Any benefit amount
attributable to the executive’s service with PepsiCo after March 31, 1999 has been separately identified and
quantified. In this regard, periods of PepsiCo service that Mr. Drewes and Mr. Lardieri accrued after PBG
became a separate company have been separately identified and quantified in footnotes 3 (for Mr. Drewes)
and 4 (for Mr. Lardieri). PBG’s policy for granting extra years of credited service is discussed in more detail
in the CD&A and in the Narrative to the Pension Benefits Table.
2. The material assumptions used to quantify the present value of the accumulated benefit for each executive
are set forth in Note 11, Pension and Postretirement Medical Benefit Plans, to Bottling LLC’s Annual Report
on Form 10-K for the fiscal year ended December 27, 2008, except for the generally applicable assumptions
regarding retirement age and pre-retirement mortality.
3. Mr. Drewes transferred from PepsiCo on June 25, 2001. The years of credited service shown above include
all prior PepsiCo service. However, only the portion of the pension benefit attributable to Mr. Drewes’
PepsiCo service that accrued after March 31, 1999 (two years of service) has been separately quantified as
follows: $33,000 under the PBG Salaried Employees Retirement Plan and $120,000 under the PBG Pension
Equalization Plan. PepsiCo transferred to the PBG Salaried Employees Retirement Plan an amount equal to
the present value of Mr. Drewes’ pension benefit under the PepsiCo Salaried Employees Retirement Plan at
the time Mr. Drewes transferred to PBG.
4. Mr. Lardieri transferred from PepsiCo on June 1, 2007. The years of credited service shown above include all
prior PepsiCo service. However, only the portion of the pension benefit attributable to Mr. Lardieri’s
PepsiCo service that accrued after March 31, 1999 (eight years of service) has been separately quantified as
follows: $101,000 under the PBG Salaried Employees Retirement Plan and $148,000 under the PBG Pension
Equalization Plan. PepsiCo transferred to the PBG Salaried Employees Retirement Plan an amount equal to
the present value of Mr. Lardieri’s pension benefit under the PepsiCo Salaried Employees Retirement Plan at
the time Mr. Lardieri transferred to PBG.
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Narrative to the Pension Benefits Table

This narrative describes the terms of the PBG Salaried Employees Retirement Plan (“Salaried Plan”) and the Pension Equalization Plan
(“PEP”) in effect during 2008. The narrative does not describe certain changes to the Salaried Plan and the PEP that became effective during
2009, which are discussed in the CD&A.
The PBG Salaried Employees Retirement Plan. The Salaried Plan, a tax qualified defined benefit pension plan, generally covers salaried
employees in the U.S. hired by PBG or PepsiCo in the case of an Approved Transfer before January 1, 2007, who have completed one year of
service. Eligible employees hired after January 1, 2007 participate in a defined contribution plan and receive an annual employer contribution of
two percent of eligible pay. All of our Named Executive Officers were hired before January 1, 2007.
Benefits are payable under the Salaried Plan to participants with five or more years of service commencing on the later of age 65 or
retirement. Benefits are determined based on a participant’s earnings (which generally include base pay or salary, regular bonuses, and short
term disability pay; and exclude income resulting from equity awards, extraordinary bonuses, fringe benefits, and earnings that exceed the
applicable dollar limit of Section 401(a)(17) of the Code) and credited service (generally, service as an eligible employee). The primary purpose
of the Salaried Plan is to provide retirement income to eligible employees.
The annual retirement benefit formula for a participant with at least five years of service on December 31, 1999 is (a) 3% of the participant’s
average earnings in the five consecutive calendar years in which earnings were the highest for each year of credited service up to ten years,
plus (b) an additional 1% of such average earnings for each year of credited service in excess of ten years, minus (c) 0.43% of average earnings
up to the Social Security covered compensation multiplied by years of credited service up to 35 years (“Basic Formula”). If a participant did
not have five years of service on December 31, 1999, the retirement benefit formula is 1% of the participant’s average earnings in the five
consecutive calendar years in which earnings were the highest for each year of credited service (“Primary Formula”).
A participant who has attained age 55 and completed ten years of vesting service may retire and begin receiving early retirement benefits. If
the participant retires before age 62, benefits are reduced by 1/3 of 1% for each month (4% for each year) of payment before age 62.
Retirees have several payment options under the Salaried Plan. With the exception of the single lump sum payment option, each payment
form provides monthly retirement income for the life of the retiree. Survivor options provide for continuing payments in full or part for the life
of a contingent annuitant and, if selected, the survivor option reduces the benefit payable to the participant during his or her lifetime.
A participant with five or more years of service who terminates employment prior to attaining age 55 and completing ten years of service is
entitled to a deferred vested benefit. The deferred vested benefit of a participant entitled to a benefit under the Basic Formula described above
is equal to the Basic Formula amount calculated based on projected service to age 65 prorated by a fraction, the numerator of which is the
participant’s credited service at termination of employment and the denominator of which is the participant’s potential credited service had the
participant remained employed to age 65. The deferred vested benefit of a participant entitled to a benefit under the Primary Formula described
above is the Primary Formula amount, determined based on earnings and credited service as of the date employment terminates. Deferred
vested benefits are payable commencing at age 65. However, a participant may elect to commence benefits as early as age 55 on an actuarially
reduced basis to reflect the longer payment period. Deferred vested benefits are payable in the form of a single life annuity or a joint and
survivor annuity with the participant’s spouse as co-annuitant.
The Salaried Plan also provides survivor spouse benefits in the event of a participant’s death prior to commencement of benefits under the
Salaried Plan. After a participant’s benefits have commenced, any survivor benefits are determined by the form of payment elected by the
participant.
The Salaried Plan provides extra years of credited service for participants who become totally and permanently disabled after completing at
least ten years of vesting service, and with respect to pre-participation service in connection with specified events such as plan mergers,
acquired groups of employees, designated employees who transfer to PBG from PepsiCo, and other special circumstances. Salaried Plan
benefits are generally offset by any other qualified plan benefit the participant is entitled to under a plan maintained or contributed to by PBG.
The PBG Pension Equalization Plan. The PEP is an unfunded nonqualified defined benefit pension plan designed to provide (i) additional
benefits to participants whose Salaried Plan benefits are limited due to the annual compensation limit in Section 401(a)(17) of the Code
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and the annual benefit limit in Section 415 of the Code, and (ii) a subsidized 50% joint and survivor annuity for certain retirement eligible
employees based on the Salaried Plan’s benefit formula using the participant’s total compensation including earnings that otherwise would be
used to determine benefits payable under the Salaried Plan. Generally, for benefits accrued and vested prior to January 1, 2005 (“grandfathered
PEP benefits”), a participant’s PEP benefit is payable under the same terms and conditions of the Salaried Plan, which include various
actuarially equivalent forms as elected by participants, including lump sums. In addition, if the lump sum value of the grandfathered PEP
benefit does not exceed $10,000, the benefit is paid as a single lump sum. Benefits accrued or vested on or after January 1, 2005 are payable as
a lump sum at termination of employment; provided that a PEP participant who attained age 50 on or before January 1, 2009 was provided a
one-time opportunity to elect to receive such benefits in the form of an annuity commencing on retirement. The PEP benefit, calculated under
the terms of the plan in effect at fiscal year end, is equal to the Salaried Plan benefit, as determined without regard to the Code’s annual
compensation limit and the annual benefit limit, less the actual benefit payable under the Salaried Plan. However, the PEP benefit of a
participant who had eligible earnings in 1988 in excess of $75,000, including Mr. Drewes, is payable as a subsidized 50% joint and survivor
annuity benefit. The subsidized 50% joint and survivor benefit pays an unreduced benefit for the lifetime of the participant and 50% of that
benefit amount to the surviving spouse upon the death of the participant.
Nonqualified Deferred Compensation for the 2008 Fiscal Year
Aggre gate
Exe cu tive C om pany Aggre gate Earn ings W ith drawals/ Aggre gate
C on tribu tion s C on tribu tion s in Last FY Distribution s Balan ce at
Nam e in Last FY ($) in Last FY ($) ($) ($) Last FYE ($) (5)
Eric J. Foss 902,790 0 (1,316,342) 0 1,889,821(1)
Alfred H. Drewes 536,817 0 (505,210) 0 2,098,835(2)
Thomas M. Lardieri 64,692(3) 0 (21,214) 0 72,843(4)
1. $1,965,025 of Mr. Foss’ aggregate balance was previously reported as compensation in Summary
Compensation Tables for prior years.
2. $675,899 of Mr. Drewes’ aggregate balance was previously reported as compensation in Summary
Compensation Tables for prior years.
3. $64,692 is reported as compensation in the “Salary” column of the Summary Compensation Table to this
Executive Compensation section.
4. $31,500 of Mr. Lardieri’s aggregate balance was previously reported as compensation in Summary
Compensation Tables for prior years. This amount also includes an additional $2,423 that was inadvertently
omitted from the total reflected in the “Executive Contributions in Last FY” column of the Nonqualified
Deferred Compensation Table in last year’s Executive Compensation section of Bottling LLC’s Annual
Report on Form 10-K for the fiscal year ended December 29, 2007 due to a reporting error by the third party
administrator for the nonqualified deferred compensation plan.
5. The amount reflected in this column for Mr. Drewes includes compensation deferred by the Named
Executive Officer over the entirety of his career at both PepsiCo and PBG.
Narrative to the Nonqualified Deferred Compensation Table

The Deferral Program is the only nonqualified elective deferred compensation program sponsored by PBG. The Deferral Program is
administered by the Committee. All PBG executives on the U.S. payroll, including our Named Executive Officers, are eligible to participate in the
Deferral Program. The Deferral Program allows executives to defer receipt of compensation in excess of compensation limits imposed by the
Internal Revenue Code under PBG’s 401(k) plan and to defer federal and state income tax on the deferred amounts, including earnings, until
such time as the deferred amounts are paid out. PBG makes no contributions to the Deferral Program on behalf of executives. The Deferral
Program is unfunded and the executive’s deferrals under the Deferral Program are at all times subject to the claims of PBG’s general creditors.
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The terms and conditions of the Deferral Program vary with respect to deferrals made or vested on and after January 1, 2005. Such deferrals
are subject to the requirements of Section 409A of the Code (“409A”) which became effective on such date. Deferrals made or vested before
January 1, 2005 are not subject to the requirements of 409A (“grandfathered deferrals”).
Deferrals of Base Salary and Annual Non-Equity Incentive Award. Executives may irrevocably elect to defer up to 80% of their annual base
salary and 100% of their annual non-equity incentive award (“Bonus”). In addition to elective deferrals, the Committee may mandate deferral of
a portion of an executive’s base salary in excess of one million dollars.
Phantom Investment Options. Executives select the phantom investment option(s) from those available under the terms of the Deferral
Program. The phantom investment options available under the Deferral Program are a subset of the funds available under PBG’s 401(k) plan.
Consequently, amounts deferred under the Deferral Program are subject to the same investment gains and losses during the deferral period as
experienced by the participants in PBG’s 401(k) plan. Executives may change investment option elections and transfer balances between
investment options on a daily basis.
The phantom investment options currently available under the Deferral Program and their 2008 rates of return are:
PHANTO M FUND FYE RETURN RATE (%)

The Phantom PBG Stock Fund (41.00)
The Phantom Security Plus Fund 4.19
The Phantom Bond Index Fund 5.46
The Phantom Total U.S. Equity Index Fund (37.01)
The Phantom Large Cap Equity Index Fund (36.93)
The Phantom Mid Cap Equity Index Fund (36.09)
The Phantom Small Cap Equity Index Fund (33.66)
The Phantom International Equity Index Fund (43.26)
Time and Form of Payment. Prior to deferral, executives are required to elect a specific payment date or payment event as well as the form of
payment (lump sum or quarterly, semi-annual, or annual installments for a period of up to twenty years). The Committee selects the time and
form of payment for mandatory deferrals. Executives with grandfathered deferrals are required to elect a specific payment date or event prior to
deferral, but may elect the form of payment at a later date nearer to the payment date (not later than December 31 of the calendar year
preceding the year of the scheduled payment and at least six months in advance of the scheduled payment date).
Deferral Periods. Salary and Bonus deferrals are subject to minimum and maximum deferral periods. The minimum deferral period for salary
deferrals is one year after the end of the applicable base salary year. The minimum deferral period for Bonus deferrals is two years after the
Bonus payout would have been made but for the deferral.
Distribution Rules. In general, deferrals are paid out in accordance with the executive’s deferral election, subject to the minimum deferral
periods. The Deferral Program provides that, notwithstanding the minimum deferral periods or the executive’s time and form of payment
elections, deferrals will automatically be paid out in a lump sum in the event of death, disability or a separation from service for reasons other
than retirement (unless installment payments have already begun in which case they would continue to be paid without acceleration).
Generally, payment will be made three months after the end of the quarter in which the separation from service occurred. However, special
rules apply for “key employees,” as defined under 409A (which would encompass all Named Executive Officers). In the event of a separation
from service, the Named Executive Officers may not receive a distribution for at least six months following separation from service. This six
month rule does not apply in the event of the Named Executive Officer’s death or disability.
Generally, payment of grandfathered deferrals is made in the form of a lump sum in the event of voluntary termination of employment or
termination of employment as a result of misconduct but only after the minimum deferral periods have been satisfied. If the executive’s balance
is greater than $25,000, the executive will be paid out in a lump sum a year after their last day of employment. However, special distribution
rules apply when an executive separates from service after reaching retirement eligibility (age 55 with ten years of service). In such case,
payment is made in the time and form elected by the executive.
Deferral Extensions (Second-Look Elections). In general, executives may extend their original deferral period by making a subsequent
deferral election. This modification of an original deferral election is often referred to as a “second-look” election. More stringent requirements
apply to second-look elections related to deferrals subject to 409A since 409A requires that any second-look
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election must be made at least 12 months prior to the originally scheduled payout date and the second-look election must provide for a deferral
period of at least five years from the originally scheduled payment date. Grandfathered deferrals may also be extended at the election of the
executive provided the election is made no later than December 31 of the year preceding the originally scheduled payout date and at least six
months in advance of the originally scheduled payout date and is for a minimum deferral of at least two years from the originally scheduled
payment date.
Hardship Withdrawals. Accelerated distribution is only permissible upon the executive’s showing of severe, extraordinary and unforeseen
financial hardship.
Potential Payments Upon Termination or Change In Control

The terms and conditions of PBG’s compensation and benefit programs govern all payments to all eligible employees, including the Named
Executive Officers. Neither PBG nor the Company have any separate written or unwritten agreement with any Named Executive Officer
regarding payment of any kind at, following or in connection with termination of employment for any reason including, without limitation,
retirement, an Approved Transfer to PepsiCo, a change in responsibilities, or upon a change in control of PBG (collectively, “Termination”).
As such, the Named Executive Officers are not entitled to any payment outside the written terms of the LTIP or the PBG-sponsored (i) qualified
and nonqualified pension plans, (ii) qualified and nonqualified defined contribution plans, (iii) non-U.S. pension and severance plans, or
(iv) employee welfare benefit plans. None of PBG’s compensation or benefit programs provide for any perquisites or tax reimbursements by
PBG upon Termination.
This narrative and the accompanying tables are intended to show the value of all potential payments that would be payable, under the
terms of the plans in effect on December 26, 2008, to the Named Executive Officers upon any event of Termination to the extent that the
Termination would result in a payment or benefit that is not generally available to all salaried employees of PBG and that is incremental to, or
an enhancement of, the payments and benefits described or shown in any preceding narrative or table in this Executive Compensation section.
Nonqualified Pension Benefits. The PEP benefits accrued and vested before 2005 would provide a deferred vested pension benefit, payable
as an annual annuity for the life of the executive or as a joint and survivor annuity with the executive’s spouse commencing at the same time
and in the same form as the qualified plan benefit. An unreduced benefit would commence at age 65; actuarially reduced benefits may be
elected as early as age 55. PEP benefits accrued or vested after 2004 are generally payable in a single lump sum payment on termination of
employment (six months following termination in the case of key employees). The deferred vested PEP benefit is significantly less than the
benefit that would be payable to the executive had he remained employed until age 55 and is significantly less than the benefit valued in the
Pension Benefits Table, which was calculated assuming the executive works until age 62, the earliest age at which unreduced benefits are
available to a plan participant. No pension benefit would be payable in an enhanced form or in an amount in excess of the value shown in the
Pension Benefits Table except in the event of death. Therefore, we have not separately quantified pension benefits payable upon any event of
Termination other than death under the terms of the PEP in effect on December 26, 2008.
Death. Under the terms of the PEP, a pre-retirement survivor spouse benefit would be payable with respect to pre-2005 accrued and vested
PEP benefits, payable in the form of an annuity for the life of the surviving spouse. Surviving spouse benefits for post-2004 accrued and
vested PEP benefits are payable in a single lump sum payment.
The table below reflects the PEP pension benefit that would be payable to the surviving spouse of each Named Executive Officer in the
event of the executive’s death on December 26, 2008. To the extent the Named Executive Officer continues active service, the amounts shown
below generally will increase year over year based on increases in eligible pay and service credit. The payments would be in lieu of the benefit
valued in the Pension Benefits Table.
De ath
Nam e Plan Nam e Annual Annuity Lump Sum
Eric J. Foss PBG Pension Equalization Plan $ 34,000 $3,239,000
Alfred H. Drewes PBG Pension Equalization Plan 16,000 1,199,000
Thomas M. Lardieri PBG Pension Equalization Plan N/A 624,000
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LTIP. The LTIP’s provisions apply to all PBG equity awards made to employees of PBG, including the Named Executive Officers, and, with
few exceptions, the terms of the individual LTIP agreements provide for accelerated vesting of stock options and RSUs upon death, disability,
retirement and Approved Transfer to PepsiCo. This accelerated vesting is pro-rata or 100% depending on the triggering event as more fully
described below. The payments that would result from each triggering event are quantified for each Named Executive Officer in the table
below. The amounts were calculated based on the closing market price of PBG common stock on December 26, 2008, the last trading day of
PBG’s fiscal 2008, and reflect the incremental value to the executive that would result from the accelerated vesting of unvested equity awards.
Disability. In the event of the Disability of a Named Executive Officer, a pro-rata number of stock options vest in proportion to the
executive’s active employment during the vesting period. The stock options would remain exercisable for the remainder of their original ten-
year term. RSUs vest in the same pro-rata manner and would be paid out immediately upon vesting.
Death. In the event of the death of a Named Executive Officer, all unvested stock options vest automatically and remain exercisable by the
executive’s estate for the remainder of their original ten-year term. In general, RSUs similarly vest automatically and are immediately paid out in
shares of PBG common stock to the executive’s legal representative or heir. This automatic vesting does not apply to the October 7, 2005 RSU
award granted to Mr. Foss as reflected in the Outstanding Equity Awards Table, and the special award of performance-based RSUs (Strategic
Leadership Award) granted to Mr. Drewes on January 1, 2008 as reflected in the Grants of Plan-Based Awards Table, that instead provide for
pro-rata vesting upon the death of the executive. The pro-rata number of RSUs that would vest is in proportion to the executive’s active
employment during the vesting period.
Retirement. In general, if a Named Executive Officer retires (generally, after attaining age 55 with ten or more years of service), a pro-rata
number of stock options and RSUs would vest in proportion to executive’s active employment during the vesting period subject to
achievement of any applicable performance-based vesting condition. Certain RSU awards to the Named Executive Officer contain different
retirement provisions. In particular, the October 7, 2005 RSU award granted to Mr. Foss as reflected in the Outstanding Equity Awards Table,
and the special award of performance-based RSUs (Strategic Leadership Award) granted to Mr. Drewes on January 1, 2008 as reflected in the
Grants of Plan-Based Awards Table, do not provide for accelerated vesting and payout upon retirement. Since no Named Executive Officer
was eligible for early or normal retirement during 2008, there is no quantification of vesting or payout based upon such occurrence.
Approved Transfer to PepsiCo. In general, if a Named Executive Officer transfers to PepsiCo with the approval of the PBG, all stock options
and RSUs would fully vest on the date of transfer subject to achievement of any applicable performance-based vesting condition. The stock
options would remain exercisable for the remainder of their original ten-year term provided the Named Executive Officer remains actively
employed at PepsiCo. In the event of termination from PepsiCo during the original term, the Named Executive Officer would have a limited
number of days from the date of termination to exercise his stock options or they would be automatically cancelled. Generally, RSUs would
vest and be paid out immediately upon an Approved Transfer to PepsiCo subject to achievement of any applicable performance-based vesting
condition. However, the October 7, 2005 RSU award granted to Mr. Foss as reflected in the Outstanding Equity Awards Table, and the special
award of performance-based RSUs (Strategic Leadership Award) granted to Mr. Drewes on January 1, 2008 as reflected in the Grants of Plan-
Based Awards Table, do not provide for accelerated vesting and payout upon Approved Transfer.
Change in Control. The LTIP change in control provisions apply to PBG equity awards made to all employees, including the Named
Executive Officers. The LTIP defines a CIC in the context of two circumstances, one related to a change in control of PBG and the other related
to a change in control of PepsiCo.
A CIC of the PBG occurs if: (i) any person or entity, other than PepsiCo, becomes a beneficial owner of 50% or more of the combined voting
power of PBG’s outstanding securities entitled to vote for directors; (ii) 50% of the directors (other than directors approved by a majority of
the PBG’s directors or by PepsiCo) change in any consecutive two-year period; (iii) PBG is merged into or consolidated with an entity, other
than PepsiCo, and is not the surviving company, unless PBG’s shareholders before and after the merger or consolidation continue to hold 50%
or more of the voting power of the surviving entity’s outstanding securities; (iv) there is a disposition of all or substantially all of PBG’s
assets, other than to PepsiCo or an entity approved by PepsiCo; or (v) any event or circumstance that is intended to effect a change in control
of PBG results in any one of the events set forth in (i) through (iv).
A CIC of PepsiCo occurs if: (i) any person or entity acquires 20% or more of the outstanding voting securities of PepsiCo; (ii) 50% of the
directors (other than directors approved by a majority of the PepsiCo directors) change in any consecutive two-year period; (iii) PepsiCo
shareholders approve, and there is completed, a merger or consolidation with another entity, and PepsiCo is not the surviving company; or, if
after such transaction, the other entity owns, directly or indirectly, 50% or more of PepsiCo’s
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outstanding voting securities; (iv) PepsiCo shareholders approve a plan of complete liquidation of PepsiCo or the disposition of all or
substantially all of PepsiCo’s assets; or (v) any event or circumstance that is intended to effect a change in control of PepsiCo results in any
one of the events set forth in (i) through (iv).
In general, in the event of a CIC of PBG or PepsiCo, all unvested PBG stock options immediately vest and are exercisable during their
original term. RSUs immediately vest in the event of a CIC of PBG or PepsiCo and are payable upon vesting.
The following table reflects the incremental value the executive would receive as a result of accelerated vesting of unvested stock options
and RSUs had a triggering event occurred on December 26, 2008. The value was calculated using the closing market price of a share of PBG
common stock on December 26, 2008, the last trading day of PBG’s fiscal 2008.
Approve d Tran sfe r C h an ge

to In
Nam e Disability De ath Pe psiC o C on trol
Eric J. Foss $3,836,177 $5,666,101 $ 3,882,352 $6,648,148
Alfred H. Drewes 882,373 1,291,910 1,085,159 1,929,391
Thomas M. Lardieri 133,338 348,342 348,342 348,342

Nonqualified Deferred Compensation Plan. The Named Executive Officers’ deferred compensation balances under the Deferral Program and
a description of the Deferral Program’s payment provisions are set forth in the Nonqualified Deferred Compensation Table and accompanying
narrative. No triggering event would serve to enhance such amounts. However, under the terms of the Deferral Program, the deferred
compensation balances set forth in the Nonqualified Deferred Compensation Table would be payable in the form of a lump sum in the event of
death or separation from service for reasons other than retirement notwithstanding the Named Executive Officer’s election as to time and form
of payment.
Severance. Neither PBG nor the Company has any agreement to provide any form of severance payment to a Named Executive Officer.
Benefits Generally Available to All Salaried Employees. There are a number of employee benefits generally available to all salaried
employees upon termination of employment. In accordance with SEC guidelines, these benefits are not discussed above since they do not
discriminate in scope, terms or operation in favor of the Company’s executive officers. These include tax-qualified retirement benefits, life
insurance, long-term disability, retiree medical, health care continuation coverage mandated by the Consolidated Omnibus Budget
Reconciliation Act of 1986 (“COBRA”).
Compensation of Managing Directors. Individuals do not receive additional compensation or benefits for serving as Managing Directors of
Bottling LLC.
Compensation Committee Interlocks and Insider Participation. Bottling LLC does not have a compensation committee because our
executive compensation program is overseen by the Compensation and Management Development Committee of PBG’s Board of Directors.
During fiscal year 2008, the following individuals served as members of PBG’s Compensation and Management Development Committee: Linda
G. Alvarado, Barry H. Beracha, Ira D. Hall, Susan D. Kronick, Blythe J. McGarvie, John A. Quelch and Javier G. Teruel. None of these
individuals has ever served as an officer or employee of PBG, Bottling LLC or any of its subsidiaries. Ms. Alvarado has an indirect business
relationship with PBG as described below under “Relationships and Transactions with Management and Others.” PBG’s Compensation and
Management Development Committee members have no interlocking relationships requiring disclosure under the rules of the SEC.
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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
PBG holds 93.4% and PepsiCo holds 6.6% of the ownership of Bottling LLC. PBG’s address is One Pepsi Way, Somers, New York 10589 and
PepsiCo’s address is 700 Anderson Hill Road, Purchase, New York 10577.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Although Bottling LLC may not be a direct party to the following transactions, as the principal operating subsidiary of PBG, it derives
certain benefits from them. Accordingly, set forth below is information relating to certain transactions between PBG and PepsiCo. In addition,
set forth below is information relating to certain transactions between Bottling LLC and PBG (“PBG/Bottling LLC Transactions”) and certain
transactions with management and others.
Stock Ownership and Director Relationships with PepsiCo. PBG was initially incorporated in January 1999 as a wholly owned subsidiary
of PepsiCo to effect the separation of most of PepsiCo’s company-owned bottling businesses. PBG became a publicly traded company on
March 31, 1999. As of January 23, 2009, PepsiCo’s ownership represented 33.1% of PBG’s outstanding common stock and 100% of PBG’s
outstanding Class B common stock, together representing 40.2% of the voting power of all classes of PBG’s voting stock. PepsiCo also owns
approximately 6.6% of the equity of Bottling LLC. In addition, Marie T. Gallagher, a Managing Director of Bottling LLC, is an officer of
PepsiCo.
Agreements and Transactions with PepsiCo and Affiliates. PBG and PepsiCo (and certain of its affiliates) have entered into transactions
and agreements with one another, incident to their respective businesses, and PBG and PepsiCo are expected to enter into material
transactions and agreements from time to time in the future. As used in this section, “PBG” includes PBG and its subsidiaries.
Material agreements and transactions between PBG and PepsiCo (and certain of its affiliates) during 2008 are described below.
Beverage Agreements and Purchases of Concentrates and Finished Products. PBG purchases concentrates from PepsiCo and
manufactures, packages, distributes and sells carbonated and non-carbonated beverages under license agreements with PepsiCo. These
agreements give PBG the right to manufacture, sell and distribute beverage products of PepsiCo in both bottles and cans and fountain syrup
in specified territories. The agreements also provide PepsiCo with the ability to set prices of such concentrates, as well as the terms of
payment and other terms and conditions under which PBG purchases such concentrates. In addition, PBG bottles water under the Aquafina
trademark pursuant to an agreement with PepsiCo, which provides for the payment of a royalty fee to PepsiCo. In certain instances, PBG
purchases finished beverage products from PepsiCo. During 2008, total payments by PBG to PepsiCo for concentrates, royalties and finished
beverage products were approximately $2.9 billion.
There are certain manufacturing cooperatives whose assets, liabilities and results of operations are consolidated in our financial statements.
Concentrate purchases from PepsiCo by these cooperatives for the years ended 2008, 2007 and 2006 were $140 million, $143 million and $72
million, respectively.
Transactions with Joint Ventures in which PepsiCo holds an equity interest. PBG purchases tea concentrate and finished beverage
products from the Pepsi/Lipton Tea Partnership, a joint venture of Pepsi-Cola North America, a division of PepsiCo, and Lipton. During 2008,
total amounts paid or payable to PepsiCo for the benefit of the Pepsi/Lipton Tea Partnership were approximately $279 million.
PBG purchases finished beverage products from the North American Coffee Partnership, a joint venture of Pepsi-Cola North America and
Starbucks in which PepsiCo has a 50% interest. During 2008, amounts paid or payable to the North American Coffee Partnership by PBG were
approximately $278 million.
Under tax sharing arrangements we have with PepsiCo and PepsiCo joint ventures, we received approximately $1 million in tax related
benefits in 2008.
As a result of the formation of PR Beverages, PepsiCo has agreed to contribute $83 million plus accrued interest to the venture in the form
of property, plant and equipment. During 2008, PepsiCo has contributed $34 million in regards to this note.
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approximately $1.8 billion. Lebedyansky was acquired 58.3 percent by PepsiCo and 41.7 percent by PR Beverages, our Russian venture with
PepsiCo. We and PepsiCo have an ownership interest in PR Beverages of 60 percent and 40 percent, respectively. As a result, PepsiCo and we
have acquired a 75 percent and 25 percent economic stake in Lebedyansky, respectively.
Purchase of Frito-Lay Snack Food Products. Pursuant to a Distribution Agreement between PR Beverages and Frito-Lay Manufacturing,
LLC, a wholly-owned subsidiary of PepsiCo, PR Beverages purchases snack food products from Frito-Lay Manufacturing for sale and
distribution through Russia. In 2008, amounts paid or payable by PR Beverages to Frito-Lay Manufacturing were approximately $355 million.
Shared Services. PepsiCo provides various services to PBG pursuant to a shared services agreement and other arrangements, including
information technology maintenance and the procurement of raw materials. During 2008, amounts paid or payable to PepsiCo for these
services totaled approximately $52 million.
Pursuant to the shared services agreement and other arrangements, PBG provides various services to PepsiCo, including credit and
collection, international tax and supplier services. During 2008, payments to PBG from PepsiCo for these services totaled approximately
$3 million.
Rental Payments. Amounts paid or payable by PepsiCo to PBG for rental of office space at certain PBG facilities were approximately
$4 million in 2008.
National Fountain Services. PBG provides certain manufacturing, delivery and equipment maintenance services to PepsiCo’s national
fountain customers in specified territories. In 2008, net amounts paid or payable by PepsiCo to PBG for these services were approximately
$187 million.
Bottler Incentives. PepsiCo provides PBG with marketing support in the form of bottler incentives. The level of this support is negotiated
annually and can be increased or decreased at the discretion of PepsiCo. These bottler incentives are intended to cover a variety of programs
and initiatives, including direct marketplace support (including point-of-sale materials) and advertising support. For 2008, total bottler
incentives received from PepsiCo, including media costs shared by PepsiCo, were approximately $691 million.
PepsiCo Guarantees. The $1.0 billion of 4.63% senior notes due November 2012 issued by us on November 15, 2002 and the $1.3 billion of
6.95% senior notes due February 2014 issued by us on October 24, 2008 are guaranteed by PepsiCo in accordance with the terms set forth in
the related indentures.
PBG/Bottling LLC Transactions. PBG is considered a related party, as we are the principal operating subsidiary of PBG and we make up
substantially all of the operations and assets of PBG. At December 27, 2008, PBG owned approximately 93.4% of our equity.
PBG provides insurance and risk management services to us pursuant to a contractual agreement. Total premiums paid to PBG during 2008
were $113 million.
On March 8, 1999, PBG issued $1 billion of 7% senior notes due 2029, which are guaranteed by us.
PBG has a $1.2 billion commercial paper program that is supported by a $1.1 billion committed credit facility and an uncommitted credit
facility of $500 million. Both of these credit facilities are guaranteed by us. At December 27, 2008, PBG had no outstanding commercial paper.
Throughout 2008 we loaned $839 million to PBG, net of repayments through a series of 1-year notes with interest rates ranging from
approximately 2.5% to 4.5%. In addition, at the end of the year PBG repaid $1,027 million of the outstanding intercompany loans owed to us.
The resulting net decrease in the notes receivable from PBG in 2008 was $188 million. Total intercompany loans owed to us from PBG at
December 27, 2008 were $3,692 million. The proceeds were used by PBG to pay for interest, taxes, dividends and share repurchases. Accrued
interest receivable from PBG on these notes totaled $118 million at December 27, 2008.
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Bottling LLC Distribution. We guarantee that to the extent there is available cash, we will distribute pro rata to PBG and PepsiCo sufficient
cash such that the aggregate cash distributed to PBG will enable PBG to pay its taxes, share repurchases, dividends and make interest
payments for its internal and external debt. During 2008, in accordance with our Limited Liability Company Agreement we made cash
distributions to PepsiCo in the amount of $73 million and to PBG in the amount of $1,029 million.
Relationships and Transactions with Management and Others. One of our Managing Directors is an employee and officer of PepsiCo and
the other Managing Directors and officers are employees of PBG. Linda G. Alvarado, a member of PBG’s Board of Directors, together with
certain of her family members, wholly own interests in several YUM Brands franchise restaurant companies that purchase beverage products
from PBG. In 2008, the total amount of these purchases was approximately $593,000.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

INDEPENDENT ACCOUNTANTS FEES AND SERVICES
Deloitte & Touche LLP has served as our independent registered public accounting firm since June 2005. In addition to retaining
independent accountants to audit our consolidated financial statements for 2008, we and our affiliates retained Deloitte & Touche LLP, as well
as other accounting firms, to provide various services in 2008. The aggregate fees billed for professional services by Deloitte & Touche LLP in
2008 and 2007 were as follows:
Audit and Non-Audit Fees
(in millions)
2008 2007
Audit Fees (1) $5.8 $5.6
Audit-Related Fees (2) $0.8 $0.7
Tax Fees (3) $0.4 $0.3
All Other Fees $0.0 $0.0
Total $7.0 $6.6
(1) Represents fees for the audit of our consolidated financial statements, audit of internal controls, the reviews
of interim financial statements included in our Forms 10-Q and all statutory audits.
(2) Represents fees primarily related to audits of employee benefit plans and other audit-related services.
(3) Represents fees primarily related to assistance with tax compliance matters.
Pre-Approval Policies and Procedures. We have a policy that defines audit, audit-related and non-audit services to be provided to us by
our independent registered public accounting firm and requires such services to be pre-approved by PBG’s Audit and Affiliated Transactions
Committee. In accordance with our policy and applicable SEC rules and regulations, the Committee or its Chairperson pre-approves such
services provided to us. Pre-approval is detailed as to the particular service or category of services. If the services are required prior to a
regularly scheduled Committee meeting, the Committee Chairperson is authorized to approve such services, provided that they are consistent
with our policy and applicable SEC rules and regulations, and that the full Committee is advised of such services at the next regularly
scheduled Committee meeting. The independent accountants and management periodically report to the Committee regarding the extent of the
services provided by the independent accountants in accordance with this pre-approval, and the fees for the services performed to date.
PBG’s Audit and Affiliated Transactions Committee pre-approved all audit and non-audit fees of Deloitte & Touche LLP billed for fiscal years
2008 and 2007.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) 1. Financial Statements. The following consolidated financial statements of Bottling LLC and its subsidiaries are included herein:
Consolidated Statements of Operations — Fiscal years ended December 27, 2008, December 29, 2007 and December 30, 2006.
Consolidated Statements of Cash Flows — Fiscal years ended December 27, 2008, December 29, 2007 and December 30, 2006.
Consolidated Balance Sheets — December 27, 2008 and December 29, 2007.
Consolidated Statements of Changes in Owners’ Equity — Fiscal years ended December 27, 2008, December 29, 2007 and December 30, 2006.
Report of Independent Registered Public Accounting Firm

2. Financial Statement Schedules. The following financial statement schedule of Bottling LLC and its subsidiaries is included in this Report
on the page indicated:
Page
Schedule II — Valuation and Qualifying Accounts for the fiscal years ended December 27, 2008, December 29, 2007 and
December 30, 2006 F-2
3. Exhibits
See Index to Exhibits on pages E-1 - E-2.
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SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, Bottling Group, LLC has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Dated: February 19, 2009
Bottling Group, LLC
/s/ Eric J. Foss

Eric J. Foss
Principal Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of
Bottling Group, LLC and in the capacities and on the dates indicated.
S IGNATURE TITLE DATE
/s/ Eric J. Foss Principal Executive Officer February 19, 2009

Eric J. Foss
/s/ Alfred H. Drewes Principal Financial Officer February 19, 2009

Alfred H. Drewes
/s/ Thomas M. Lardieri Principal Accounting Officer and February 19, 2009
Thomas M. Lardieri Managing Director
/s/ Steven M. Rapp Managing Director February 19, 2009

Steven M. Rapp
/s/ Marie T. Gallagher Managing Director February 19, 2009

Marie T. Gallagher
S-1
Table of Contents
INDEX TO FINANCIAL STATEMENT SCHEDULES
Page
Schedule II — Valuation and Qualifying Accounts for the fiscal years ended December 27, 2008, December 29, 2007 and
December 30, 2006 F-2
F-1
Table of Contents
SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS BOTTLING GROUP, LLC
Balan ce At C h arge s to Accou n ts Fore ign Balan ce At

Be ginn ing C ost an d W ritte n C u rre n cy En d O f
In m illion s O f Pe riod Expe n se s Acqu isition s O ff Tran slation Pe riod
Allowance for losses on trade accounts receivable $ 54 $ 30 $ — $ (9) $ (4) $ 71
Allowance for losses on trade accounts receivable $ 50 $ 11 $ — $ (10) $ 3 $ 54
Allowance for losses on trade accounts receivable $ 51 $ 5 $ — $ (7) $ 1 $ 50
F-2
Table of Contents
INDEX TO EXHIBITS
EXHIBIT NO . DES C RIPTIO N O F EXHIBIT

3.1 Articles of Formation of Bottling LLC, which is incorporated herein by reference to Exhibit 3.4 to Bottling LLC’s Registration
Statement on Form S-4 (Registration No. 333-80361).
3.2 Amended and Restated Limited Liability Company Agreement of Bottling LLC, which is incorporated herein by reference to
Exhibit 3.5 to Bottling LLC’s Registration Statement on Form S-4 (Registration No. 333-80361).
3.3 Amendment No. 1 to Bottling LLC’s Amended and Restated Limited Liability Company Agreement, which is incorporated
herein by reference to Exhibit 3.3 to Bottling LLC’s Quarterly Report on Form 10-Q for the quarter ended June 14, 2008.
4.1 Indenture dated as of March 8, 1999 by and among PBG, as obligor, Bottling LLC, as guarantor, and The Chase Manhattan
Bank, as trustee, relating to $1,000,000,000 7% Series B Senior Notes due 2029, which is incorporated herein by reference to
Exhibit 10.14 to PBG’s Registration Statement on Form S-1 (Registration No. 333-70291).
4.2 Indenture dated as of November 15, 2002 among Bottling LLC, PepsiCo, Inc., as guarantor, and JPMorgan Chase Bank, as
trustee, relating to $1,000,000,000 4 5/8% Senior Notes due November 15, 2012, which is incorporated herein by reference to
Exhibit 4.8 to PBG’s Annual Report on Form 10-K for the year ended December 28, 2002.
4.3 Registration Rights Agreement dated as of November 7, 2002 relating to the $1,000,000,000 4 5/8% Senior Notes due
November 15, 2012, which is incorporated herein by reference to Exhibit 4.8 to Bottling LLC’s Annual Report on Form 10-K for
the year ended December 28, 2002.
4.4 Indenture, dated as of June 10, 2003 by and between Bottling LLC, as obligor, and JPMorgan Chase Bank, as trustee, relating
to $250,000,000 4 1/8% Senior Notes due June 15, 2015, which is incorporated herein by reference to Exhibit 4.1 to Bottling
LLC’s registration statement on Form S-4 (Registration No. 333-106285).
4.5 Registration Rights Agreement dated June 10, 2003 by and among Bottling LLC, J.P. Morgan Securities Inc., Lehman Brothers
Inc., Banc of America Securities LLC, Citigroup Global Markets Inc, Credit Suisse First Boston LLC, Deutsche Bank Securities
Inc., Blaylock & Partners, L.P. and Fleet Securities, Inc, relating to $250,000,000 4 1/8% Senior Notes due June 15, 2015, which
is incorporated herein by reference to Exhibit 4.3 to Bottling LLC’s registration statement on Form S-4 (Registration No. 333-
106285).
4.6 Indenture, dated as of October 1, 2003, by and between Bottling LLC, as obligor, and JPMorgan Chase Bank, as trustee,
which is incorporated herein by reference to Exhibit 4.1 to Bottling LLC’s Current Report on Form 8-K dated October 3, 2003.
4.7 Form of Note for the $400,000,000 5.00% Senior Notes due November 15, 2013, which is incorporated herein by reference to
Exhibit 4.1 to Bottling LLC’s Current Report on Form 8-K dated November 13, 2003.
4.8 Indenture, dated as of March 30, 2006, by and between Bottling LLC, as obligor, and JPMorgan Chase Bank, N.A., as trustee,
which is incorporated herein by reference to Exhibit 4.1 to PBG’s Quarterly Report on Form 10-Q for the quarter ended
March 25, 2006.
4.9 Form of Note for the $800,000,000 5 1/2% Senior Notes due April 1, 2016, which is incorporated herein by reference to
Exhibit 4.2 to PBG’s Quarterly Report on Form 10-Q for the quarter ended March 25, 2006.
4.10 Indenture, dated as of October 24, 2008, by and among Bottling LLC, as obligor, PepsiCo, Inc., as guarantor, and The Bank of
New York Mellon, as trustee, relating to $1,300,000,000 6.95% Senior Notes due March 15, 2014, which is incorporated herein
by reference to Exhibit 4.1 to Bottling LLC’s Current Report on Form 8-K dated October 21, 2008.
4.11 Form of Note for the $1,300,000,000 6.95% Senior Notes due March 15, 2014, which is incorporated herein by reference to
Exhibit 4.2 to Bottling LLC’s Current Report on Form 8-K dated October 21, 2008.
4.12 Form of Note for the $750,000,000 5.125% Senior Notes due January 15, 2019, which is incorporated herein by reference to
Exhibit 4.1 to Bottling LLC’s Current Report on Form 8-K dated January 14, 2009.
E-1
Table of Contents
EXHIBIT NO . DES C RIPTIO N O F EXHIBIT

10.1 Private Limited Company Agreement of PR Beverages Limited dated as of March 1, 2007 among PBG Beverages Ireland
Limited, PepsiCo (Ireland), Limited and PR Beverages Limited, which is incorporated herein by reference to Exhibit 10.1 to
PBG’s Quarterly Report on Form 10-Q for the quarter ended March 24, 2007.
10.2 U.S. $1,200,000,000 First Amended and Restated Credit Agreement dated as of October 19, 2007 among The Pepsi Bottling
Group, Inc., as borrower; Bottling Group, LLC, as guarantor; Citigroup Global Markets Inc. and HSBC Securities (USA) Inc.,
as joint lead arrangers and book managers; Citibank, N.A., as agent; HSBC Bank USA, N.A., as syndication agent; and
certain other banks identified in the First Amended and Restated Credit Agreement, which is incorporated herein by reference
to Exhibit 10.1 to PBG’s Current Report on Form 8-K dated October 19, 2007 and filed October 25, 2007.
10.3 Insurance Policy between Bottling LLC and Woodlands Insurance Company, Inc., which is incorporated herein by reference
to Exhibit 10.1 to Bottling LLC’s Quarterly Report on Form 10-Q for the quarter ended June 14, 2008.
10.4 Form of Promissory Note between The Pepsi Bottling Group, Inc. and Bottling LLC, which is incorporated herein by reference
to Exhibit 10.2 to Bottling LLC’s Quarterly Report on Form 10-Q for the quarter ended June 14, 2008.
10.5* Distribution Agreement between PepsiCo Holdings LLC and Frito-Lay Manufacturing LLC effective as of January 1, 2009.
12* Computation of Ratio of Earnings to Fixed Charges.
21* Subsidiaries of Bottling LLC.
23.1* Consent of Deloitte & Touche LLP.
23.2* Consent of Deloitte & Touche LLP, independent registered public accounting firm of The Pepsi Bottling Group, Inc.
23.3* Consent of KPMG LLP, independent registered public accounting firm of PepsiCo, Inc.
31.1* Certification by the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2* Certification by the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1* Certification by the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2* Certification by the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1* The Pepsi Bottling Group, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 27, 2008.
99.2 PepsiCo, Inc.’s consolidated financial statements and notes thereto included in PepsiCo’s Annual Report on Form 10-K for
the fiscal year ended December 27, 2008, which are incorporated herein by reference to PepsiCo, Inc.’s Annual Report on
Form 10-K for the year ended December 27, 2008.
* Filed herewith
E-2

PEPSI BOTTLING GROUP INC 10-K (Annual Reports) 2009-02-20

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

The Pepsi Bottling Group, Inc.

Se curities registered pursuant to Se ction 12(b) of the Act:

Title of Each Class Name of Each Exchange on Which Re gistered

Securities registered pursuant to Section 12(g) of the Act: None

U.S. & Canada

Raw Materials and Other Supplies

Franchise and Venture Agreements

Governmental Regulation Applicable to PBG

Financial Information on Industry Segments and Geographic Areas

ITEM 1A. RISK FACTORS

PepsiCo’s equity ownership of PBG could affect matters concerning us.

Benefits cost increases could reduce our profitability or cash flow.

ITEM 1B. UNRESOLVED STAFF COMMENTS

ITEM 3. LEGAL PROCEEDINGS

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

2008 High Low

2007 High Low

Quarter 2008 2007

ITEM 6. SELECTED FINANCIAL DATA

Fiscal years ended 2008(1) 2007(2) 2006(3)(4) 2005(3)(5) 2004(3)

AUDITED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Operations 31

MANAGEMENT’S FINANCIAL REVIEW

(BAR GRAPH) (BAR GRAPH)

CRITICAL ACCOUNTING POLICIES

Other Intangible Assets, net and Goodwill

Pension and Postretirement Medical Benefit Plans

P ostretirement 2009 2008

2008 2007 2006

Casualty Insurance Costs

RELATIONSHIP WITH PEPSICO

ITEMS AFFECTING COMPARABILITY OF OUR FINANCIAL RESULTS

2008 Restructuring Charges

Asset Disposal Charges

Tax Law Changes

Tax Law Changes

De ce m be r 27, December 29, Fiscal Year

RESULTS OF OPERATIONS BY SEGMENT

U.S. & Canada

2007 vs. 2006

U.S. & Canada

Worldwide U.S. & Canada Europe Mexico

U.S. & Canada

2007 vs. 2006

U.S. & Canada

U.S. & Canada

2007 vs. 2006

U.S. & Canada

Interest Expense, net

2007 vs. 2006

Other Non-Operating Expenses (Income), net

2007 vs. 2006

2007 vs. 2006

Income Tax Expense

2007 vs. 2006

Diluted Weighted-Average Shares Outstanding

LIQUIDITY AND FINANCIAL CONDITION

2007 vs. 2006

Liquidity and Capital Resources

Acquisitions and Investments

Long-Term Debt Activities

Short-Term Debt Activities