Debt Obligations and Commitments

The following table summarizes the Company’s long-term debt obligations:



	2013			2012
Short-term debt obligations
Current maturities of long-term debt	$	2,224		$	2,901
Commercial paper (0.1% and 0.1%)	2,924			1,101
Other borrowings (12.4% and 7.4%)	158			813
	$	5,306		$	4,815
Long-term debt obligations
Notes due 2013 (2.3%)	$	—		$	2,891
Notes due 2014 (5.3% and 4.4%)	2,219			3,237
Notes due 2015 (1.2% and 1.5%)	4,116			3,300
Notes due 2016 (2.5% and 3.9%)	3,106			1,878
Notes due 2017 (2.0% and 2.0%)	1,258			1,250
Notes due 2018 (4.3% and 4.7%)	3,439			3,511
Notes due 2019-2042 (4.0% and 4.4%)	12,373			10,270
Other, due 2014-2020 (4.4% and 9.3%)	46			108
	26,557			26,445
Less: current maturities of long-term debt obligations	(2,224		)	(2,901		)
Total	$	24,333		$	23,544

The interest rates in the above table reflect weighted-average rates at year-end.

In the first quarter of 2013, we issued:


•	$625 million of floating rate notes maturing February 2016, which bear interest at a rate equal to the three-month London Inter-Bank Offered Rate (LIBOR) plus 21 basis points;


•	$625 million of 0.700% senior notes maturing in February 2016; and


•	$1.25 billion of 2.750% senior notes maturing in March 2023.

In the third quarter of 2013, we issued:


•	$850 million of floating rate notes maturing in July 2015 (2015 Notes), which bear interest at a rate equal to the three-month LIBOR plus 20 basis points; and


•	$850 million of 2.250% senior notes maturing in January 2019 (2019 Notes).

The net proceeds from the issuances of the notes in the first quarter of 2013 were used for general corporate purposes, including the repayment of commercial paper. The net proceeds from the issuances of the notes in the third quarter of 2013 were primarily used for the redemption of our outstanding 3.75% senior notes maturing in March 2014 (2014 Notes), as described below, with the remainder used for general corporate purposes, including the repayment of commercial paper. In the third quarter of 2013, we exercised our option to redeem all of the above 2014 Notes, using approximately $1 billion of the net proceeds from the 2015 Notes and 2019 Notes issued in the quarter.

In the second quarter of 2013, we entered into a new five-year unsecured revolving credit agreement (Five-Year Credit Agreement) which expires on June 10, 2018. The Five-Year Credit Agreement enables us and our borrowing subsidiaries to borrow up to $2.925 billion, subject to customary terms and conditions. We may request that commitments under this agreement be increased up to $3.5 billion. Additionally, we may, once a year, request renewal of the agreement for an additional one-year period.

Also, in the second quarter of 2013, we entered into a new 364-day unsecured revolving credit agreement (364-Day Credit Agreement) which expires on June 9, 2014. The 364-Day Credit Agreement enables us and our borrowing subsidiaries to borrow up to $2.925 billion, subject to customary terms and conditions. We may request that commitments under this agreement be increased up to $3.5 billion. We may request renewal of this facility for an additional 364-day period or convert any amounts outstanding into a term loan for a period of up to one year, which would mature no later than the then effective termination date.

The Five-Year Credit Agreement and the 364-Day Credit Agreement together replaced our $2.925 billion Four-Year Credit Agreement dated as of June 14, 2011 and our $2.925 billion 364-Day Credit Agreement dated as of June 14, 2011. Funds borrowed under the Five-Year Credit Agreement and the 364-Day Credit Agreement may be used for general corporate purposes of PepsiCo and our subsidiaries.

In addition, as of December 28, 2013, our international debt of $151 million was related to borrowings from external parties including various lines of credit. These lines of credit are subject to normal banking terms and conditions and are fully committed at least to the extent of our borrowings.

Long-Term Contractual Commitments ^(a)

The following table summarizes our long-term contractual commitments by period:



	Payments Due by Period
	Total		2014		2015 – 2016		2017 – 2018		2019 and beyond
Long-term debt obligations^(b)	$	23,878	$	—	$	7,198	$	4,497	$	12,183
Interest on debt obligations^(c)	8,107		807		1,411		1,221		4,668
Operating leases	2,014		441		631		375		567
Purchasing commitments^(d)	2,347		798		1,122		196		231
Marketing commitments^(d)	2,149		326		605		485		733
	$	38,495	$	2,372	$	10,967	$	6,774	$	18,382


(a)	Based on year-end foreign exchange rates. Reserves for uncertain tax positions are excluded from the table above as we are unable to reasonably predict the ultimate amount or timing of any settlements.


(b)	Excludes $2,224 million related to current maturities of long-term debt, $237 million related to the fair value step-up of debt acquired in connection with our acquisitions of PBG and PAS and $218 million related to the increase in carrying value of long-term debt representing the gains on our fair value interest rate swaps.


(c)	Interest payments on floating-rate debt are estimated using interest rates effective as of December 28, 2013.


(d)	Primarily reflects non-cancelable commitments as of December 28, 2013.

Most long-term contractual commitments, except for our long-term debt obligations, are not recorded on our balance sheet. Operating leases primarily represent building leases. Non-cancelable purchasing commitments are primarily for oranges and orange juice and packaging materials. Non-cancelable marketing commitments are primarily for sports marketing. Bottler funding to independent bottlers is not reflected in our long-term contractual commitments as it is negotiated on an annual basis. Accrued liabilities for pension and retiree medical plans are not reflected in our long-term contractual commitments because they do not represent expected future cash outflows. See Note 7 for additional information regarding our pension and retiree medical obligations.

Off-Balance-Sheet Arrangements

It is not our business practice to enter into off-balance-sheet arrangements, other than in the normal course of business. See Note 8 regarding contracts related to certain of our bottlers.

See “Our Liquidity and Capital Resources” in Management’s Discussion and Analysis of Financial Condition and Results of Operations for further unaudited information on our borrowings.