EARNINGS CONFERENCE CALL SCRIPT
                           (February 5, 2000, 11:00am)

KATHLEEN LUKE

Thank you, operator. And thanks to everyone for joining us this morning.

With me are Steve Reinemund,  President and Chief Operating  Officer of PepsiCo,
and Indra Nooyi, our Chief Financial Officer.

We have a lot of great news to report across all of our  divisions  both for the
fourth  quarter  and the full year 2000.  Steve will start by talking  about the
fine  performances  turned in across all our  businesses  and why we expect that
performance to continue. Indra will then roll up the financials and give you the
corporate algorithm. After that Steve and Indra will take your questions.

Before we begin, I'd like to repeat some  information  about this call, which is
also being  webcast  and can be accessed  at  www.pepsico.com.  The call will be
archived for 90 days at the following websites:  www.ccbn.com and www.vcall.com.
A taped  replay  will be  available  until the close of  business  Wednesday  by
dialing  800-633-8625.  International  callers  should  dial  858-812-6450.  The
reservation number is 17648339.

Let me also take a moment to point out that  PepsiCo's  fiscal  year ends on the
last  Saturday in  December,  so every 5 or 6 years our fiscal year  includes 53
instead of 52 weeks, and our fourth quarter contains 17 instead of 16 weeks. The
year  2000 was one of those  years  and so,  in  order to help you  compare  our
performance in 2000 to our performance in 1999, we are presenting information on
a "comparable"  basis.  Specifically,  we have ignored the incremental impact of
the extra week for both the quarter and the full year. We also presented results
for 1999 on a pro forma basis assuming that the transactions  involving bottling
operations occurred in 1998 and excluding unusual items reported in 1999.

Finally, I'd like to read our Safe Harbor Statement.

This conference call may include forward-looking statements based on our current
expectations  and  projections  about future  events.  Our actual  results could
differ materially from those anticipated in any forward-looking  statements, but
we undertake no obligation to update any such statements.  In addition,  the pro
forma results do not necessarily  represent what our results would have been had
certain transactions been completed as of the dates indicated,  nor do they give
effect to any other events.  For a review of risk  factors,  please refer to our
statements filed at the Securities and Exchange Commission.

Now it's my pleasure to introduce Steve Reinemund.

STEVE REINEMUND

Good morning everybody and thanks for joining us. I'm pleased to report we had a
terrific  year.  2000 was  PepsiCo's  best in recent  memory,  and  actually the
strongest I've seen in my 16 years with the company. I say that not just because
of the overall  results,  which I do believer were excellent,  but because every
single one of our businesses  consistently  contributed to our  success--in  the
U.S. and internationally.

I also say that  because  we've  delivered  on our  promises.  We have the right
strategies  as a  convenient  food  and  beverage  company  and are  focused  on
executing  consistently  against them. We've stayed focused even while executing
last year's M&A program that included Quaker and SoBe.

That's why we're so excited about the future. Our businesses are well-positioned
to take advantage of the consumer trend toward convenient  consumption,  and our
major platforms for growth make us confident that we'll be successful in meeting
our goal to continue to report this kind of solid financial  performance in 2001
and the years to come.

Now let me give you some  highlights  of our  excellent  performance  in the 4th
quarter and for all of last year.

Let's start with the fourth quarter:

o    Earnings  per share grew 15% to 38 cents a share on a 16-week  basis.  This
     was  our  fifth  consecutive  quarter  of  double-digit   earnings  growth,
     demonstrating the strength of our underlying businesses.

o    Including the impact of the extra 53rd week, we would have added three more
     cents to 41 cents per share.  o Every division  gained volume,  which drove
     net sales up 8% to over $6.1  billion.  o Operating  profits also grew very
     strongly across all divisions,  increasing over 12% to $984 million.  o And
     finally, net income grew 15% to $567 million.

The strong quarter contributed to a terrific full year.

o    On a 52-week  basis,  EPS grew a strong 17% to $1.45, compared to $1.24 in
     1999. And with the 53rd week, EPS was $1.48.

o    Net sales grew 8% to over $20 billion.

o    Operating profits grew 13% to $3.5 billion.

o    And ROIC improved even more than expected by 250 basis points to 23%.

Again,  we're particularly proud of the fact that these strong results came from
excellent performances by each of our operating divisions. Let's look at each of
them, starting with Frito-Lay North America.

FLNA achieved  double-digit profit growth for the eighth consecutive quarter, on
increased revenues of 6.5% and 4% volume growth.  Fourth quarter profits came in
at $539 million and revenues were $2.5 billion.

For the year, FLNA's revenues rose 7% to $8.4 billion and profits were up 10% to
$1.8 billion.

Frito-Lay is an exceptional business,  and we expect their strong performance to
continue throughout 2001. We're comfortable that operating profits will continue
growing  at around  10% for the year,  based on  revenue  growth in the range of
5-7%.

Let me come back to volume  for a minute --  specifically  the  impact of FLNA's
weight-out action.  It's simple,  but also complicated,  and I've asked to Indra
walk you through the details.

INDRA NOOYI

                  Thanks Steve,

First, let me reiterate:  we expect 5% - 7% revenue growth and 10% profit growth
from FLNA in 2001.

                  By  way of  background,  remember:  FLNA  has a  portfolio  of
         products   that   includes   salty  snacks  in  both  "take  home"  and
         "single-serve"  sizes,  dips,  meat snacks,  cookies and crackers.  Our
         business is not only the DSD business in the U.S.,  it includes  Canada
         and a vend/food service business.

                  In the snack business we have key "magical" price points,  for
         example 99 cents for single serve,  and $1.99 or 2-for-$5 for take-home
         size promotions.  These price points appeal to consumers and we want to
         maintain  them.  When we take  "visual"  pricing  we  either  lose  the
         appealing price point or, in the case of promoted price points,  end up
         giving  the  price  increase  back  through  allowances  to  get to our
         customary  promoted  price points.  So we need to be very careful about
         taking visual pricing actions.

                  Now the weight out:

o        When you  think  about our  weight  out  action,  think of it as a cost
         reduction that we are using to offset inflation.

o        The weight out was not  across-the-board.  The weight out affected only
         specific SKUs -- mostly larger salty snack take home sizes.  It impacts
         the  single  serve up and down the  street  business  to a much  lesser
         degree  and  does  not  impact  any  of  our   Canadian   business   or
         vend/foodservice.

o        Therefore, it can be a little difficult to explain.

                  With all that said,  here are some rules of thumb to use going
forward:

o    There is typically a difference between our revenue growth and pound growth
     resulting from product mix changes, price changes, and promotional changes.

o    For 2001,  for FLNA as a whole,  you should expect revenue growth to exceed
     pound growth by 3 to 4 pts as the result of the weight out. This is up from
     the 2 to 3 points  we  usually  report.  Any  change  beyond  that  will be
     attributable  to product  mix  changes,  promotional  changes,  or size mix
     changes, all of which would be very hard to forecast at this point.

o    When you look at IRI data,  revenue will likely  exceed lb growth by 4 to 5
     pts as a result of the weight out,

o    This is because the  channels  read by IRI,  which are less than 50% of our
     business,  have a higher mix of take home sizes, where the weight out had a
     bigger impact; and

o    The IRI numbers don't capture the UDS channel and our products not impacted
     by the weight out, such as Obertos  meats,  crackers,  cookies and nuts. As
     Steve said, it's simple but complicated, and hopefully, with these rules of
     thumb,  there won't be confusion going forward.  Now let me turn it back to
     Steve.

STEVE REINEMUND

Thanks, Indra.
Let me just say one more time how proud we are of  FLNA's  performance,  and how
comfortable  we  are  they  will  continue  to  deliver  consistent,   excellent
performance.

Moving beyond North America,  Frito Lay International  also had another terrific
quarter and  continued to grow its salty volume at  double-digits.  Salty volume
was up 12%, with that growth  coming  across all its regions.  In fact we gained
market share in virtually every single market.


For the fourth quarter,  revenues grew almost 10% to $1.3 billion with operating
profits up 11% to $155 million.  Profits would have been four points higher, but
for the adverse impact of unfavorable foreign currency exchange rates.

For the full  year,  revenues  accelerated  a solid  14% to $4.3  billion,  with
profits up 19% to $483 million.

Sabritas and Gamesa continue to perform well.

Volume at Walkers grew 9% for the year and they gained 3 share points.  Walker's
profits were up 12% in local  currency  terms,  but  unfortunately  profits were
impacted by unfavorable FOREX.

After the big three,  our  businesses  performed  well  around  the  world.  For
example,  our European and Latin American JV's saw double digit volume increases
last quarter,  Turkey had  extraordinary  volume gains, Elma in Brazil initiated
its value  strategy  in Q4, and  Australia  continued  to build  momentum in the
grocery and vending channels.

The outlook for FLI  continues to be quite strong.  For the  full-year  2001, we
expect operating profits to grow in the mid-teens.

Now, let's look at Pepsi-Cola North America.

PCNA finished a successful  2000 with a very strong  performance in the quarter.
Revenues  were up 15% and profits over 13% for the quarter,  in each case easily
exceeding our high single-digit guidance.

Concentrate  shipments  rose  2.7%  for  the  fourth  quarter,   driven  by  the
introduction of Sierra Mist.  Bottler case sales were not as strong as expected,
due to severe competitor  pricing actions in December,  but BCS did advance more
than 1%. As you look at BCS, I'd like to remind you for comparison's  sake, that
our reported BCS volume does not reflect any sales of Tropicana products.

For the full year,  PCNA's net sales  increased  8% to $3.3  billion and profits
were up 9% to $820 million.

We are confident that PCNA will continue to produce balanced growth in 2001: |X|
We see building  momentum in CSD's.  |X| Aquafina is  continuing  to show strong
growth.
|X|      We have new  products  lined up, such as Pepsi Lemon Twist and the
         new Mountain Dew entry we're calling Code Red.
|X|      We're looking forward to the sell in of Dole.
|X|      And we have a strong promotional calendar.

Based on all of this, we see bottler case sales growing approximately 3% for the
year.

Our profit outlook for the full year is high single digit growth.  The impact of
the SoBe acquisition should add about a point to that.

Now let me turn to another  division that delivered a fine  performance  for the
quarter by  single-mindedly  pursuing  its  strategy.  Pepsi-Cola  International
volume was up 4% for the quarter,  led by strong  performances  in key countries
like India,  China and Russia,  to name a few. Revenues in the quarter were down
4%, reflecting the negative impact of weaker foreign  currencies and competitive
pricing issues in some markets.  Operating profits broke even--a big win in this
seasonally low quarter and $7 million better than last year.

For the full year, bottler case sales were up 5%, reflecting strong performances
around  the  world.  Net  sales  were up 3% for the full  year to $1.8  billion,
primarily due to volume gains and higher pricing. Operating profits for the full
year  increased  37% to $148  million,  due to the higher  pricing and increased
volume. As you can see,  Pepsi-Cola  International  continues to make tremendous
progress.

And the outlook for 2001 remains  strong.  Consistent with our guidance for last
year, we expect PCI's volume and revenues to grow in the mid-single digits, with
profits growing in the mid-teens.

Now, let me turn your attention to Tropicana.

Trop's  phenomenal  growth  story  continued as they posted  another  quarter of
strong volume  gains.  Equivalent  case volume grew 11% for the quarter,  led by
more double-digit  growth from Pure Premium,  our flagship  not-from-concentrate
brand.

Net sales in the quarter  increased  8% to $761  million and  operating  profits
increased 16% to $63 million, due to the volume gains.

For the full  year,  Tropicana  grew  volume a robust 8%,  more than  double the
growth rate of the prior year.

Net sales increased 6% to $2.4 billion and operating profits grew an outstanding
30% to $220 million.  That's double the operating profit level of 1998, the year
we acquired Tropicana.

Tropicana's focus on its fortified  nutritional blends fueled growth in 2000, as
did the  introduction  of the new 128  ounce  Pure  Premium  package.  Tropicana
pioneered the clinical  trials that allowed it to make  additional  heart health
claims because of the potassium  naturally found in our product.  Driven by this
news, Tropicana's market share rose to almost 35%.

Looking ahead, we have exciting  product news in 2001 as well, and will continue
to focus on extending Pure  Premium's  reach with various  category  development
programs.

We expect both volume and revenues to grow in the mid-single digit range for the
full  year.  We  expect  profits  to grow in the low teens for the full year and
below that for the first  quarter as they  overlap  last year's  phenomenal  70%
growth rate in Q1.

And now,  I'd like to turn it over to Indra to roll up the  numbers and give you
the corporate algorithm.

INDRA NOOYI

Thanks, Steve.

First,  I'd  like  to say  how  proud  I am  about  the  strong  and  consistent
performance  turned  in by every  PepsiCo  operating  division--not  only in the
fourth quarter but throughout the year 2000.

Let me take a few moments  talking about the corporate  leverage that has gotten
us to our 17% EPS growth for the year.

First,  let's talk about  corporate  unallocated  expenses,  which  increased to
$319MM in 2000. Several items drove this increase - deferred compensation costs,
which were higher than prior year due to our strong stock  performance,  stepped
up investments behind our Power-of-One activity,  increased contributions to the
PepsiCo Foundation, and Forex losses.

Equity income grew 52% to $125 million.  This growth was driven in particular by
the outstanding performance delivered by The Pepsi Bottling Group.

Net interest  expense for the 52-week year declined 12% over the proforma  prior
year to $142 million,  reflecting  significantly  lower average debt levels that
were partially offset by higher average interest rates.

I also want to spend a few moments on the number of shares we have  outstanding.
As you may  remember,  we  announced  in December  that we  rescinded  our share
repurchase  program in connection  with our  acquisition of Quaker Oats. For the
full year 2000, prior to stopping our program,  we repurchased 38 million shares
for a total cost of  approximately  $1.4 billion,  bringing our weighted average
number  of  shares  outstanding  on a fully  diluted  basis at year end to 1.475
billion shares.

I'm also very proud of the cash flow  performance  we turned in.  Operating cash
flow,  which we  define  as net  income,  excluding  after  tax  interest,  plus
depreciation and  amortization,  plus changes in working  capital,  less capital
spending and other balance sheet changes, grew 33% to $2.7billion last year.

Now,  let me turn to our Return on Invested  Capital.  We've had and continue to
have as a goal the  improvement  of ROIC by 50 to 100 basis points per year. But
this year we did even better than  expected as a result of our strong net income
performance.  This year ROIC grew by 250 basis  points to  23%--and  we're  very
proud of that accomplishment.

As I think you can tell, we're very pleased with these results and, based on our
outlook  for the coming  year,  we expect to  continue  to deliver  consistently
excellent performance. Let me explain.

o    First,  we expect  revenues from our snack and beverage  businesses to grow
     6-7% for the full year.

o    Second,  we believe we can grow line of business earnings from our existing
     businesses10-11% for the year.

o    Third, we expect to generate another 2% or 3% from corporate initiatives to
     get to EPS growth of 12-13% for the full year.

o    And finally, we expect to improve our ROIC another 50-100 basis points this
     year.

Now let me return to  corporate  leverage.  We are  committed  to getting 2 to 3
points of leverage below the operating  profit line.  But, how we get it will be
slightly different in 2001 than 2000. Let me explain.

1.   Going into 2001, we expect corporate  unallocated expenses to be relatively
     flat to 2000 on a full year  basis,  although  individual  quarters  may be
     higher or lower than prior year.

2.   We expect equity income to continue to benefit from solid  performances  by
     our anchor  bottlers,  although our growth may not be as  outstanding as in
     2000.

3.   The single biggest challenge in 2001 will be the loss of leverage resulting
     from our share repurchase  activity.  As I mentioned earlier, in connection
     with the Quaker  transaction,  which will be accounted for as a pooling, we
     rescinded  our  share   repurchase   program.   Additionally,   our  shares
     outstanding will go up for several reasons:
     we will be  reissuing  15 to 20MM tainted  shares  before that  transaction
     closes,  employee stock option  exercises will continue adding to the base,
     and  approximately  315MM additional shares of PepsiCo stock will be issued
     to Quaker shareholders to conclude the merger.

Nevertheless,  as I  said  before,  we  still  expect  to get 2 to 3  points  of
corporate  leverage.  In 2001,  driven  by the  implementation  of  various  tax
strategies, our PepsiCo standalone corporate tax rate will go down 1% to 31%. We
expect to maintain this rate going forward. This reduction in tax rate will help
us offset the loss in leverage from the rescinded share repurchase program.

Let me close by  reiterating  PepsiCo's  algorithm,  which  relates  only to our
existing portfolio of businesses:

o    Revenues will grow 6-7%. o Line of Business earnings up 10-11%.

o    Full year EPS growth of 12-13%.

o    And finally, we expect to improve our ROIC another 50-100 basis points.

Now,  let me turn it back to Steve who will  give you an  update  on the  Quaker
transaction.

STEVE REINEMUND

Thanks Indra.

As you know, we've entered into a merger agreement with The Quaker Oats Company.
While today I've been talking about the performance and outlook for our existing
snack and beverage portfolio, our goal of sustained growth will not change after
the  Quaker  merger.  In  fact,  that's  one of the  reasons  the  merger  is so
attractive -- because Quaker creates  opportunities  across so many parts of our
existing business and expands our platforms for growth in the future. As we work
out the details of our  integration  plans,  we  continue to feel very  positive
about our ability to successfully complete the deal and achieve the synergies we
spoke about last December.

We believe  the  transaction  is still on track to close some time in the second
quarter of this year.  The  integration  planning is well under way, and we have
received clearance on our preliminary filing with the SEC.

Now I know we've gone through a lot of information, but I want to go back to the
key points  just one last time:  o First,  we had a great  fourth  quarter  that
capped off a terrific year. o Second, we achieved such good performance  because
all of our divisions are highly focused on consistent  performance against their
objectives.

o    And finally, our outlook is simple--more of the same.

Now Indra and I will be happy to entertain your questions.

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