The net impact of the refranchising of a portion of our beverage businesses in India and the Middle East had a slight positive impact on operating profit performance. PepsiCo, parent company of Pepsi, Frito-Lay, Tropicana, Gatorade, and Quaker. *, Form of Performance-Based Long-Term Incentive Award Agreement, which is incorporated herein by reference to Exhibit 10.1 to PepsiCo, Inc.'s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 16, 2010. Other comprehensive income or loss results from items deferred from recognition into our income statement. Attestation Report of the Registered Public Accounting Firm. All of these charges were recorded in selling, general and administrative expenses and primarily related to severance and other employee-related costs, asset impairments (all non-cash), and contract termination costs. We account for our employee stock options under the fair value method of accounting using a Black-Scholes valuation model to measure stock option expense at the date of grant. Corporate bonds of U.S.-based companies represent 22% and 23% of total U.S. plan assets for 2016 and 2015 , respectively. In 2015, we recognized a non-cash tax benefit of $ 230 million ($ 0.15 per share) associated with our agreement with the IRS resolving substantially all open matters related to the audits for taxable years 2010 through 2011, which reduced our reserve for uncertain tax positions for the tax years 2010 and 2011. Excludes the impact of acquisitions and divestitures. Organic revenue excludes the impact of the 53 rd reporting week in the fourth quarter of 2016. We define net ROIC, excluding items affecting comparability, as ROIC, adjusted for quarterly average cash, cash equivalents and short-term investments, after-tax interest income and items affecting comparability. We expect to continue to return free cash flow to our shareholders through dividends and share repurchases while maintaining Tier 1 commercial paper access, which we believe will ensure appropriate financial flexibility and ready access to global capital and credit markets at favorable interest rates. Excludes $4,401 million related to current maturities of debt, $145 million related to the fair value adjustments for debt acquired in acquisitions and interest rate swaps and payments of $142 million related to unamortized net discount. Beginning in the fourth quarter of 2015, our financial results have not included the results of our Venezuelan businesses. The interest rates presented reflect weighted-average rates at year-end. PepsiCo Inc.’s accounts and notes receivable, net increased from 2018 to 2019 and from 2019 to 2020. Brand development costs are expensed as incurred. Change in long-lived assets in 2016 primarily reflects appreciation of the Russian ruble. and BANK OF AMERICA, N.A., as Syndication Agent, CITIGROUP GLOBAL MARKETS, INC., JPMORGAN CHASE BANK, N.A. Portions of the Proxy Statement relating to PepsiCo, Inc.'s 2017 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities, Management's Discussion and Analysis of Financial Condition and Results of Operations, Quantitative and Qualitative Disclosures About Market Risk, Financial Statements and Supplementary Data, Changes in and Disagreements with Accountants on Accounting and Financial Disclosure, Directors, Executive Officers and Corporate Governance, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, Certain Relationships and Related Transactions, and Director Independence, Exhibits and Financial Statement Schedules. We also intend to continue to invest in building the new capabilities we will need to succeed in the digital marketplace, including the evolving e-commerce landscape, and to focus on building and sustaining strong relationships with our retail partners. We believe that embracing environmentally responsible business practices, such as water conservation, water replenishment and energy efficiency will help sustain our business. Form of Bottling Group, LLC 5.125% Senior Note 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 filed with the Securities and Exchange Commission on January 20, 2009. Substantially all of the accrual of $29 million at December 31, 2016 is expected to be paid by the end of 2017. Unfavorable foreign exchange reduced net revenue growth by 1 percentage point. The guidance is effective in 2019 with early adoption permitted. Additionally, India experienced low-single-digit growth and Australia experienced mid-single-digit growth. *, Amendment to the PepsiCo Executive Income Deferral Program Document for the 409A Program, adopted June 28, 2010, which is incorporated herein by reference to Exhibit 10.1 to PepsiCo, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended September 4, 2010. NAB, Latin America, ESSA and AMENA, either independently or in conjunction with third parties, make, market, distribute and sell ready-to-drink tea products through a joint venture with Unilever (under the Lipton brand name), and NAB further, either independently or in conjunction with third parties, makes, markets, distributes and sells ready-to-drink coffee products through a joint venture with Starbucks. There are no family relationships among our executive officers. We believe this metric serves as a measure of how well we use our capital to generate returns. Computation of Ratio of Earnings to Fixed Charges. We use derivatives, with terms of no more than three years, to economically hedge price fluctuations related to a portion of our anticipated commodity purchases, primarily for agricultural products, energy and metals. 1, No. Risk Factors" for further discussion. In addition, if we do not have adequate insurance, if we do not have enforceable indemnification from suppliers, bottlers, contract manufacturers, distributors, joint venture partners or other third parties or if indemnification is not available, the liability relating to such product claims or disruption as a result of recall efforts could materially adversely affect our business, financial condition or results of operations. We continue on our multi-year business transformation initiative to migrate certain of our systems, including our financial processing systems, to enterprise-wide systems solutions. what it owns), the liabilities (i.e. The 53 rd reporting week contributed 1.5 percentage points to the operating profit growth. Included in long-lived assets in all other countries as of December 31, 2016 and December 26, 2015 are $166 million and $538 million , respectively, related to our 5% indirect equity interest in TAB. In connection with our 2014 Productivity Plan, we expect to incur pre-tax charges of approximately $990 million , of which approximately $705 million represents cash expenditures, summarized by year as follows: Net revenue and long-lived assets by country are as follows: A summary of our restructuring and impairment charges and other productivity initiatives is as follows: Deferred tax liabilities and assets are comprised of the following: A summary of our valuation allowance activity is as follows: The following table summarizes other supplemental information: Registrant's telephone number, including area code: Pension-related settlement (charge)/benefits, Our discussion and analysis is intended to help the reader understand our results of operations and financial condition and is provided as an addition to, and should be read in connection with, our consolidated financial statements and the accompanying notes. As a result, our annual tax rate reflected in our financial statements is different than that reported in our tax returns (our cash tax rate). In 2014, we recorded a $ 105 million net charge related to our remeasurement of the bolivar for certain net monetary assets of our Venezuelan businesses. We expect this adoption will result in an increase in the assets and liabilities on our balance sheet. Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934: Name of each exchange on which registered, Common Stock, par value 1-2/3 cents per share, Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Curtailments are due to events such as plant closures or the sale of a business resulting in a reduction of future service or benefits. For 2016 and 2015 organic revenue growth, represents the impact of the exclusion of the 2015 and fourth quarter 2014 results of our Venezuelan businesses, respectively, which were deconsolidated effective as of the end of the third quarter of 2015. We are exposed to concentration of credit risk from our major customers, including Wal-Mart. Higher commodity inflation negatively impacted operating profit performance by 5 percentage points, primarily attributable to inflation. In many jurisdictions, compliance with competition laws is of special importance to us due to our competitive position in those jurisdictions, as is compliance with anti-corruption laws, including the U.K. We call this approach Performance with Purpose and it is embedded into our business and our strategy. Additionally, Germany experienced a slight decline. The distribution system used depends on customer needs, product characteristics and local trade practices. Other beverage, food and snack competitors include, but are not limited to, DPSG. Net revenue declined 1%, reflecting unfavorable foreign exchange, which negatively impacted net revenue performance by 5 percentage points, as well as unfavorable net pricing. We have increased our investment in research and development by 45 percent since 2011, investing approximately $3.5 billion on research and development cumulatively over the past five years. Higher commodity inflation reduced operating profit growth by 1 percentage point, primarily attributable to inflation in the Latin America, ESSA and AMENA segments, partially offset by deflation in the NAB, FLNA and QFNA segments. All highly liquid investments with original maturities of three months or less are classified as cash equivalents. These increases were partially offset by unfavorable operating profit performance. In addition, risk to our supply of certain raw materials is mitigated through purchases from multiple geographies and suppliers. *, Form of Annual Long-Term Incentive Award Agreement, which is incorporated herein by reference to Exhibit 10.1 to PepsiCo, Inc.'s Quarterly Report on Form 10-Q for the quarterly period ended March 19, 2016. Business." These policies may require management to make difficult and subjective judgments regarding uncertainties, and as a result, such estimates may significantly impact our financial results. Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses in our income statement as incurred. The volume growth reflects mid-single-digit growth in variety packs and trademark Tostitos, double-digit growth in trademark Smartfood and low-single-digit growth in trademark Doritos. The Company does not have any authorized, but unissued, "blank check preferred stock." Our commitment encompasses the following: Vice Chairman, Executive Vice President and, Report of Independent Registered Public Accounting Firm. Given these consumer and regulatory shifts, we continue to shift our portfolio toward more "good-for-you" and "better-for-you" products, through both organic innovation and strategic mergers and acquisitions. Primarily reflects non-cancelable commitments as of December 31, 2016 . Second Supplemental Indenture, dated as of February 26, 2010, among Pepsi-Cola Metropolitan Bottling Company, Inc., PepsiAmericas, Inc. and The Bank New York Mellon Trust Company, N.A. However, there can be no assurance that our existing products, variants of our existing products or new products that we make, manufacture, distribute or sell will be accepted or be successful in any particular developing or emerging market, due to local or global competition, product price, cultural differences, consumer preferences or otherwise.