|UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

Form 10-Q

/x/   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 3, 2004


/ /   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number 001-15019


PEPSIAMERICAS, INC.(Exact name of registrant as specified in its charter)
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Delaware                                                                       |  | 13-6167838                                             
|------------------------------------------------------------------------------ |  | -------------------------------------------------------
|(State or other jurisdiction of
                incorporation or organization) |  | (I.R.S. Employer
                Identification Number)

|4000 Dain Rauscher Plaza,
                60 South Sixth Street
                Minneapolis, Minnesota |  | 55402     
|------------------------------------------------------------------------------------------------------ |  | ----------
|(Address of principal executive offices)                                                               |  | (Zip Code)

|Registrant's telephone number, including area code (612) 661-4000


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 | /x/ | NO | / / | 
|--- | --- | -- | --- | 

|Indicate by check mark whether the registrant
is an accelerated filer (as defined in Exchange Act Rule 12b-2).
|--------------------------------------------------------------------------------------------------------------

|YES | /x/ | NO | / / | 
|--- | --- | -- | --- | 

|As of April 30, 2004 the Registrant
had 137,286,290 outstanding  shares
of common  stock,  par value  $0.01 per  share,  the
Registrant's only class of common stock.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------

---

|PEPSIAMERICAS, INC.FORM 10-QFIRST QUARTER 2004
|----------------------------------------------

|TABLE OF CONTENTS
|-----------------

|              |  |                       |                                                                                            |     
|------------- |  | --------------------- | ------------------------------------------------------------------------------------------ | ----
|              |  |                       |                                                                                            | Page
|              |  |                       |                                                                                            |     
|PART I        |  | FINANCIAL INFORMATION
|             
|              |  | Item 1.               | Financial Statements                                                                       |     
|              |  |                       | Condensed Consolidated Statements of Income                                                | 2   
|              |  |                       | Condensed Consolidated Balance Sheets                                                      | 3   
|              |  |                       | Condensed Consolidated Statements of Cash Flows                                            | 4   
|              |  |                       | Notes to Condensed Consolidated Financial Statements                                       | 5   
|             
|              |  | Item 2.               | Managements Discussion and Analysis of Financial Condition
     and Results of Operations | 15  
|             
|              |  | Item 3.               | Quantitative and Qualitative Disclosures About Market Risk                                 | 23  
|             
|              |  | Item 4.               | Controls and Procedures                                                                    | 23  
|             
|PART II       |  | OTHER INFORMATION    
|             
|              |  | Item 1.               | Legal Proceedings                                                                          | 24  
|             
|              |  | Item 6.               | Exhibits and Reports on Form 8-K                                                           | 24  
|             
|SIGNATURE     |  |                       |                                                                                            | 25  
|             
|EXHIBIT INDEX |  |                       |                                                                                            | 26  

|1
|-

---

|CONDENSED CONSOLIDATED STATEMENTS OF INCOME(unaudited
and in millions, except per share data)
|---------------------------------------------------------------------------------------------

|                                                               | First Quarter |       
|-------------------------------------------------------------- | ------------- | ------
|                                                               |               |       
|                                                               |               | 2004  
|                                                               |               |       
|Net sales                                                      | $             | 737.6 
|Cost of goods sold                                             |               | 424.5 
|                                                               |               |       
|Gross profit                                                   |               | 313.1 
|Selling, delivery and administrative
                expenses  |               | 262.8 
|Special charges, net                                           |               | 0.2   
|                                                               |               |       
|Operating income                                               |               | 50.1  
|Interest expense, net                                          |               | ( 15.9
|Other expense, net                                             |               | ( 1.4 
|                                                               |               |       
|Income before income
                taxes                     |               | 32.8  
|Income taxes                                                   |               | 12.3  
|                                                               |               |       
|Net income                                                     | $             | 20.5  
|                                                               |               |       
|Weighted average common shares:                                |               |       
|Basic                                                          |               | 143.7 
|Incremental effect
                of stock options and awards |               | 2.4   
|                                                               |               |       
|Diluted                                                        |               | 146.1 
|                                                               |               |       
|                                                               |               |       
|Net income per share:                                          |               |       
|Basic                                                          | $             | 0.14  
|Diluted                                                        |               | 0.14  
|                                                               |               |       
|Cash dividends per share                                       | $             | 0.075 

|See accompanying notes to condensed
consolidated financial statements.
|----------------------------------------------------------------------

|2
|-

---

|CONDENSED CONSOLIDATED BALANCE SHEETS
            (unaudited and in millions, except per share data)
|----------------------------------------------------------------------------------------------------

|                                                                                                                              |   | End ofFirst Quarter2004 |   |   | End ofFiscal Year2003 |  
|----------------------------------------------------------------------------------------------------------------------------- | - | ----------------------- | - | - | --------------------- | -
|                                                                                                                              |   |                         |   |  
|ASSETS:                                                                                                                       |   |                         |   |   |                       |  
|Current assets:                                                                                                               |   |                         |   |   |                       |  
|Cash and equivalents                                                                                                          | $ | 71.0                    |   | $ | 69.0                  |  
|Receivables                                                                                                                   |   | 228.1                   |   |   | 268.8                 |  
|Inventories                                                                                                                   |   | 190.5                   |   |   | 169.8                 |  
|Other current assets                                                                                                          |   | 77.9                    |   |   | 52.6                  |  
|                                                                                                                              |   |                         |   |  
|Total current assets                                                                                                          |   | 567.5                   |   |   | 560.2                 |  
|Property (at cost)                                                                                                            |   | 2,122.2                 |   |   | 2,115.6               |  
|Accumulated depreciation                                                                                                      |   | ( 1,015.5               | ) |   | ( 985.8               | )
|                                                                                                                              |   |                         |   |  
|Net property                                                                                                                  |   | 1,106.7                 |   |   | 1,129.8               |  
|Goodwill and intangible assets, net                                                                                           |   | 1,785.2                 |   |   | 1,766.6               |  
|Other assets                                                                                                                  |   | 140.7                   |   |   | 124.1                 |  
|                                                                                                                              |   |                         |   |  
|Total assets                                                                                                                  | $ | 3,600.1                 |   | $ | 3,580.7               |  
|                                                                                                                              |   |                         |   |  
|                                                                                                                              |   |                         |   |   |                       |  
|LIABILITIES AND SHAREHOLDERS'
                EQUITY:                                                                         |   |                         |   |   |                       |  
|Current liabilities:                                                                                                          |   |                         |   |   |                       |  
|Short-term debt, including current maturities of long-term debt                                                               | $ | 173.4                   |   | $ | 199.9                 |  
|Payables                                                                                                                      |   | 211.9                   |   |   | 204.1                 |  
|Other current liabilities                                                                                                     |   | 167.0                   |   |   | 195.5                 |  
|                                                                                                                              |   |                         |   |  
|Total current liabilities                                                                                                     |   | 552.3                   |   |   | 599.5                 |  
|Long-term debt                                                                                                                |   | 1,085.5                 |   |   | 1,078.4               |  
|Deferred income taxes                                                                                                         |   | 116.1                   |   |   | 112.7                 |  
|Other liabilities                                                                                                             |   | 224.6                   |   |   | 225.0                 |  
|                                                                                                                              |   |                         |   |  
|Total liabilities                                                                                                             |   | 1,978.5                 |   |   | 2,015.6               |  
|                                                                                                                              |   |                         |   |  
|Shareholder' equity:                                                                                                          |   |                         |   |   |                       |  
|Preferred stock ($0.01 par value, 12.5 million shares authorizedno shares issues)                                             |   |                        |   |   |                      |  
|Common stock ($0.01 par value, 350 million shares authorized;   
                167.6 million shares issued - 2004 and 2003) |   | 1,536.4                 |   |   | 1,534.5               |  
|Retained income                                                                                                               |   | 449.3                   |   |   | 439.8                 |  
|Unearned stock-based compensation                                                                                             |   | ( 15.0                  | ) |   | ( 8.2                 | )
|Accumulated other comprehensive loss:                                                                                         |   |                         |   |   |                       |  
|Cumulative translation adjustment                                                                                             |   | ( 6.4                   | ) |   | ( 0.4                 | )
|Net unrealized investment and hedging gains                                                                                   |   | 9.8                     |   |   |                      |  
|Minimum pension liability                                                                                                     |   | ( 31.2                  | ) |   | ( 29.0                | )
|                                                                                                                              |   |                         |   |  
|Accumulated other comprehensive loss                                                                                          |   | ( 27.8                  | ) |   | ( 29.4                | )
|Treasury stock at cost (20.6 million shares - 2004 and 23.8 million   
                shares - 2003)                         |   | ( 321.3                 | ) |   | ( 371.6               | )
|                                                                                                                              |   |                         |   |  
|Total shareholders' equity                                                                                                    |   | 1,621.6                 |   |   | 1,565.1               |  
|                                                                                                                              |   |                         |   |  
|Total liabilities and shareholders' equity                                                                                    | $ | 3,600.1                 |   | $ | 3,580.7               |  
|                                                                                                                              |   |                         |   |  

|See accompanying notes to condensed
consolidated financial statements.
|----------------------------------------------------------------------

|3
|-

---

|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited and in millions)
|---------------------------------------------------------------------------

|                                                                                               | First Quarter |       
|---------------------------------------------------------------------------------------------- | ------------- | ------
|                                                                                               |               |       
|                                                                                               |               | 2004  
|                                                                                               |               |       
|                                                                                               |               |       
|CASH FLOW FROM OPERATING
                ACTIVITIES:                                           |               |       
|Income from continuing operations                                                              | $             | 20.5  
|Adjustments to reconcile to net cash provided by operating activities:                         |               |       
|Depreciation and amortization                                                                  |               | 44.0  
|Deferred income taxes                                                                          |               | 3.5   
|Special charges, net                                                                           |               | 0.2   
|Cash outlays related to special charges                                                        |               | ( 0.2 
|Other                                                                                          |               | ( 1.9 
|Changes in assets and liabilities,
                exclusive of acquisitions and divestitures: |               |       
|Increase (decrease) in securitized receivables                                                 |               | 25.0  
|Decrease in remaining receivables                                                              |               | 16.8  
|Increase in inventories                                                                        |               | ( 18.9
|Increase in payables                                                                           |               | 8.6   
|Net change in other assets and liabilities                                                     |               | ( 60.3
|                                                                                               |               |       
|Net cash provided by operating activities                                                      |               | 37.3  
|                                                                                               |               |       
|                                                                                               |               |       
|CASH FLOWS FROM INVESTING ACTIVITIES:                                                          |               |       
|Capital investments                                                                            |               | ( 19.8
|Acquisitions, net
                of cash required                                             |               | ( 20.9
|Proceeds from sales of property                                                                |               | 0.7   
|                                                                                               |               |       
|Net cash used in investing activities                                                          |               | ( 40.0
|                                                                                               |               |       
|                                                                                               |               |       
|CASH FLOWS FROM FINANCING ACTIVITIES:                                                          |               |       
|Net borrowings (repayments) of
                short-term debt                                 |               | ( 27.1
|Proceeds from issuance of long-term debt                                                       |               |      
|Repayment of long-term debt                                                                    |               | ( 0.9 
|Treasury stock purchases                                                                       |               |      
|Issuance of common stock                                                                       |               | 43.9  
|Cash dividends                                                                                 |               | ( 11.0
|                                                                                               |               |       
|Net cash provided by (used in) financing activities                                            |               | 4.9   
|                                                                                               |               |       
|                                                                                               |               |       
|Net cash (used in) provided by
                discontinued operations                         |               | ( 0.8 
|Effects of exchange rate changes
                on cash and equivalents                       |               | 0.6   
|                                                                                               |               |       
|Change in cash and equivalents                                                                 |               | 2.0   
|Cash and equivalents at
                beginning of year                                      |               | 69.0  
|                                                                                               |               |       
|Cash and equivalents at end
                of first quarter                                   | $             | 71.0  
|                                                                                               |               |       

|See accompanying notes
to condensed consolidated financial statements.
|----------------------------------------------------------------------

|4
|-

---

|PEPSIAMERICAS, INC.NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(unaudited)
|----------------------------------------------------------------------------------

|1. | Significant Accounting
                Policies
|-- | -----------------------------------------------

| | Quarterly reporting - The Condensed Consolidated Financial Statements included herein have
been prepared by PepsiAmericas, Inc. (collectively referred to as PepsiAmericas, we, our and us) without audit.  Certain information and
disclosures normally included in financial statements prepared in accordance with accounting principles
generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission, although we believe that the disclosures made are
adequate to make the information presented not misleading.  It is suggested that these Condensed Consolidated
Financial Statements be read in conjunction with the financial statements and notes thereto included in
our Annual Report on Form 10-K for the fiscal year 2003.  In the opinion of management, the
information furnished herein reflects all adjustments (consisting only of normal, recurring adjustments)
necessary for a fair statement of results for the interim periods presented.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Our fiscal year consists of 52 or 53 weeks ending on the Saturday closest to December 31.  Our 2003 fiscal year
contained 53 weeks and ended January 3, 2004.  Our first quarters of 2004 and 2003 were based on the thirteen weeks ended
April 3, 2004 and March 29, 2003, respectively.  Our business is highly seasonal; accordingly, the operating results of any
individual quarter may not be indicative of a full years operating results.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Net income per share - Basic net income per share is based upon the weighted-average number of
common shares outstanding.  Diluted net income per share assumes the exercise of all options, which are
dilutive, whether exercisable or not.  The dilutive effects of stock options are measured under the treasury
stock method.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Options to purchase the following shares were
not included in the computation of diluted net income per share because the exercise price was greater than the average
market price of the common shares during the related period:
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                           |  |  | First Quarter | 
| | ----------------------------------------- |  |  | ------------- | 
| |                                           |  |  |               | 
| |                                           |  |  |               | 
| |                                           |  |  |               | 
| |                                           |  |  |               | 
| | Shares under options outstanding          |  |  |               | 
| | Weighted-average exercise price per share |  |  |               | 

| | Reclassifications  Certain amounts in the prior period Condensed Consolidated Financial Statements have been reclassified to conform
to the current year presentation.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|5
|-

---

| | Stock-based compensation  We use the intrinsic value method of
accounting for our stock-based compensation under APB Opinion No. 25, Accounting for Stock Issued to
Employees.  No stock-based employee compensation cost for options is reflected in net income, as all
options granted had an exercise price equal to the market value of the underlying common stock on the date
of grant.  We recognized compensation expense of $1.8 million and $1.3 million in the first quarter of 2004
and 2003, respectively, related to the grants of restricted stock awards, which is included in Net
income, as reported in the table below.  The following table illustrates the effect on net income
and net income per share if we
had applied the fair value recognition provisions of SFAS No. 123, Accounting for Stock-Based
Compensation, to stock-based employee compensation.  The table (in millions, except per share data)
is presented pursuant to
amended disclosure requirements of SFAS No. 148, Accounting for Stock-Based Compensation -
Transition and Disclosure.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                                                                                      |  |  | First Quarter | 
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ------------- | 
|                                                                                                                                                                      |  |  |               | 
|                                                                                                                                                                      |  |  |               | 
|                                                                                                                                                                      |  |  |               | 
|                                                                                                                                                                      |  |  |               | 
|Net income, as reported                                                                                                                                               |  |  |               | 
|Deduct:  total stockbased employee
                   compensation expense determined under   fair value based method for all options,
                   net of tax |  |  |               | 
|                                                                                                                                                                      |  |  |               | 
|Pro forma net income                                                                                                                                                  |  |  |               | 
|                                                                                                                                                                      |  |  |               | 
|Basic:     As reported                                                                                                                                                |  |  |               | 
|                                                                                                                                                                      |  |  |               | 
|Pro forma                                                                                                                                                             |  |  |               | 
|                                                                                                                                                                      |  |  |               | 
|Diluted:  As reported                                                                                                                                                 |  |  |               | 
|                                                                                                                                                                      |  |  |               | 
|Pro forma                                                                                                                                                             |  |  |               | 
|                                                                                                                                                                      |  |  |               | 

| | The Black-Scholes model and the assumptions presented in the following table were used to estimate the fair values of the options
granted for the first quarter 2004 and 2003.  The weighted-average estimated fair values at the dates of grant of options in the
first quarter 2004 and 2003 were $4.66 and $3.28, respectively.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                       |  |  | 2004 |  | 2003  | 
| | ------------------------------------- |  |  | ---- |  | ----- | 
| |                                       |  |  |      |  |       | 
| | Risk-free interest rate               |  |  |      |  | 3.1%  | 
| | Expected dividend yield               |  |  |      |  | 1.6%  | 
| | Expected volatility                   |  |  |      |  | 27.0% | 
| | Estimated lives of options (in years) |  |  |      |  | 5.0   | 

|2. | Special Charges
|-- | ---------------

| | In the first quarter of 2004, we recorded special charges of $0.2 million ($0.1 million after tax) in Central
Europe.  These special charges
were primarily for severance costs and related benefits.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In the first quarter of 2003, we recorded special charges of $6.3 million ($3.9 million after tax).  In the United States
(U.S.), we recorded special charges of $5.8 million ($3.6 million after tax), which consisted mainly of severance-related
costs associated with our announced reduction of our U.S. workforce.  The Central Europe special charge of
$0.5 million
($0.3 million after tax) related to continued changes in the
marketing and distribution strategy in Poland,
the Czech Republic and Republic of Slovakia.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6
|-

---

| | The following table summarizes activity associated with the special charges (in millions):
| | ------------------------------------------------------------------------------------------

| |                                                                                                                                             | 2004Charge |       | 2002Charge |   | 2001Charge |  | Total |    
| | ------------------------------------------------------------------------------------------------------------------------------------------- | ---------- | ----- | ---------- | - | ---------- |  | ----- | ---
| |                                                                                                                                             |            |       |            |   |            |  |       |    
| |                                                                                                                                             |            |       |            |   |            |  |       |    
| | Accrued liabilities as of
                fiscal year end 2003    (employee-related, lease cancellation and
                   other costs) | $          |      |            | $ | 1.0        |  | $     | 0.2
| | Central Europe special charges                                                                                                              |            | 0.2   |            |   |           |  |       |   
| | Expenditures for
                employee-related and other costs                                                                           |            | ( 0.2 | )          |   |           |  |       |   
| |                                                                                                                                             |            |       |            |   |            |  |       |    
| | Accrued liabilities at the
                end of the first quarter of 2004                                                                 | $          |      |            | $ | 1.0        |  | $     | 0.2
| |                                                                                                                                             |            |       |            |   |            |  |       |    

| | The 2004 special charge affected approximately 53 employees of which none remain as of the end of
the first quarter of 2004.  All of the special charges we recorded during 2003 were utilized by the end of fiscal year 2003 and thus are
not reflected in the table above.
The total accrued liabilities remaining as of the end of the first quarter of 2004 are comprised of deferred
severance payments and certain employee benefits, lease cancellation costs and other costs.  We expect to pay a significant
portion of the special charge liability of $1.2 million using cash from operations during the next twelve months; accordingly, such amounts are classified as
other current liabilities.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3. | Interest Expense, Net
|-- | ---------------------

| | Interest expense, net, is comprised of the following (in millions):
| | -------------------------------------------------------------------

| |                       |  |  | First Quarter | 
| | --------------------- |  |  | ------------- | 
| |                       |  |  |               | 
| |                       |  |  |               | 
| |                       |  |  |               | 
| |                       |  |  |               | 
| | Interest expense      |  |  |               | 
| | Interest income       |  |  |               | 
| |                       |  |  |               | 
| | Interest expense, net |  |  |               | 
| |                       |  |  |               | 

| | In the first quarter of 2003, interest expense included $8.8 million related to the loss on the early extinguishment of debt.
| | -----------------------------------------------------------------------------------------------------------------------------

| | Interest income in the first quarter of 2003 included $6.8 million related to the settlement of a tax matter involving our
previously terminated Employee Stock Ownership Plan (ESOP).  See the Income Taxes
note for further discussion.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4. | Income Taxes
|-- | ------------

| | During the first quarter of 2004, our effective income
tax rate was 37.5 percent.  In the first quarter of 2003, we recorded a favorable settlement of a tax refund case for $12.8 million with the Internal Revenue Service that arose from the 1990 termination
of our ESOP plan.  The tax settlement consisted of approximately $6.8 million of interest income ($4.2 million after taxes)
and a tax benefit of $6.0 million recorded in Income taxes.  Subsequently, in the second quarter of 2003, we received
a final settlement amount of $12.4 million, which reflected a reduction of interest income of $0.4 million to $6.4 million ($4.0 million
after tax).
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We also recorded additional tax accruals of $4.3 million for liabilities arising in the first
quarter of 2003.  Excluding this adjustment, as well as the ESOP settlement tax benefit, the effective income tax rate for the
first quarter of 2003 was 38.5 percent.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7
|-

---

|5. | Comprehensive Income
|-- | --------------------

| | Our comprehensive income
was as follows (in millions):
| | ------------------------------------------------------

| |                                                                |  |  | First Quarter | 
| | -------------------------------------------------------------- |  |  | ------------- | 
| |                                                                |  |  |               | 
| |                                                                |  |  |               | 
| |                                                                |  |  |               | 
| |                                                                |  |  |               | 
| | Net income                                                     |  |  |               | 
| | Minimum pension liability adjustment                           |  |  |               | 
| | Foreign currency translation adjustment                        |  |  |               | 
| | Net unrealized investment and hedging
                   gains |  |  |               | 
| |                                                                |  |  |               | 
| | Comprehensive income                                           |  |  |               | 
| |                                                                |  |  |               | 

| | Net unrealized investment and hedging gains are presented net of tax expense of $5.9 million in the first quarter of 2004
and $2.9 million in the first quarter of 2003, respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|6. | Inventory
|-- | ---------

| | As of the end of the first quarter
of 2004, our inventory was comprised of approximately 44 percent raw materials and supplies and 56 percent finished
goods.  This mix is relatively consistent with the mix of inventory at the end of fiscal year 2003.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|7. | Intangible Assets and Goodwill
|-- | ------------------------------

| | The changes in the carrying value
of goodwill by geographic segment for the first quarter of 2004 were as follows (in millions):
| | --------------------------------------------------------------------------------------------------------------------------------

| |                                                         | U.S. |         | CentralEurope |   | Caribbean |   | Total |     
| | ------------------------------------------------------- | ---- | ------- | ------------- | - | --------- | - | ----- | ----
| |                                                         |      |         |               |   |           |   |       |     
| |                                                         |      |         |               |   |           |   |       |     
| | Balance at end of year
                2003             | $    | 1,711.5 |               | $ | 32.2      |   | $     | 17.4
| | Acquisitions                                            |      |        |               |   |          |   |       | 2.3 
| | Cumulative translation adjustment                       |      |        |               |   | ( 1.3     | ) |       |    
| |                                                         |      |         |               |   |           |   |       |     
| | Balance at end of first
                quarter of 2004 | $    | 1,711.5 |               | $ | 30.9      |   | $     | 19.7
| |                                                         |      |         |               |   |           |   |       |     

| |                                                 | As of End of First Quarter 2004      |      | As of End of Fiscal Year 2003            |  
| | ----------------------------------------------- | ------------------------------------ | ---- | ---------------------------------------- | -
| |                                                 |                                      |      |                                          |  
| |                                                 | GrossCarrying
                Amount |      | Accumulated
                Amortization |  
| |                                                 |                                      |      |                                          |  
| | Amortized intangible
                assets     |                                      |      |                                          |  
| | Non-compete agreements                          | $                                    | 1.1  |                                          | $
| | Franchise and distribution agreements           |                                      | 3.7  |                                          |  
| |                                                 |                                      |      |                                          |  
| | Total                                           | $                                    | 4.8  |                                          | $
| |                                                 |                                      |      |                                          |  
| | Unamortized intangible
                assets:  |                                      |      |                                          |  
| | Franchise and distribution agreements           | $                                    | 17.6 |                                          |  
| | Pension intangible asset                        | $                                    | 2.2  |                                          |  
| |                                                 |                                      |      |                                          |  
| | Total                                           | $                                    | 24.6 |                                          |  
| |                                                 |                                      |      |                                          |  
| | Aggregate
                amortization expense: |                                      |      |                                          |  
| | For first quarter ended 2004 and 2003           | $                                    | 0.1  |                                          |  

|8
|-

---

| | We evaluate identified intangible assets with indefinite useful lives for impairment annually.  Impairment is measured as the amount
by which the carrying value of the intangible asset exceeds its estimated fair value.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|8. | Acquisitions
|-- | ------------

| | In January 2004, we completed the acquisition of the Dr Pepper franchise rights for a 13-county area in northeast Arkansas and
certain related assets from Dr Pepper Bottling Company of Paragould, Inc.  We completed the transaction jointly
with Pepsi MidAmerica, which acquired the rights to separate Dr Pepper franchise territories in connection with this transaction.  We
acquired the franchise rights and related assets for $17.7 million, of which $17.6 million was paid in cash in the first quarter of 2004 with an additional $0.1 million to be paid at a
later date.  The franchise rights and related assets, primarily
vending machines, were recorded at their estimated fair values of approximately $17.6 million and $0.1 million, respectively.  The
franchise rights are deemed to have an indefinite useful life, as the franchise and related bottling agreements are granted in perpetuity.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In addition, in March 2004 we acquired 2,000 additional
shares of Pepsi-Cola Bahamas for $3.3 million, which increased our ownership
interest in the Bahamas from 30 percent to 70 percent.  As a result, we have consolidated the Bahamas beginning in the first quarter
of 2004, as the investment was previously accounted for under the equity investment method prior to this transaction.  Our cost to
acquire the Bahamas has been preliminarily allocated to the assets acquired and liabilities assumed according to estimated fair
values and is subject to adjustment when additional information concerning asset and liability valuations is finalized.  The
preliminary allocation has resulted in acquired goodwill of approximately $2.3 million, which we assigned to the Caribbean geographic
segment.  The assets acquired and liabilities assumed consisted primarily of inventory, fixed assets, and long-term
debt.  The acquisition is not material to our consolidated results of operations; therefore, pro-forma financial information is not
included in this note.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9. | Financial Instruments
|-- | ---------------------

| | We use derivative financial instruments to reduce our exposure to adverse fluctuations in commodity prices and interest rates.  These
financial instruments are over-the-counter instruments and were designated at their inception as hedges of underlying exposures. We
do not use derivative financial instruments for speculative or trading purposes.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Cash Flow Hedges  We have hedged a portion of our anticipated aluminum can purchases through November 2004.  As of the end of the
first quarter of 2004 and fiscal year end 2003, we had deferred $5.1 million (net of $3.1 million in deferred income taxes) and $4.3
million (net of $2.5 million in deferred income taxes) of aluminum hedging gains, respectively, in Accumulated other comprehensive
loss.  We will reclassify a majority of the deferred aluminum hedging gains as of first quarter of 2004 into cost of goods sold
during the next 12 months.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In anticipation of the long-term debt issuance in the first quarter of 2003, we entered into a treasury rate lock agreement with an
aggregate notional amount of $150 million.  We accounted for this treasury rate lock as a cash flow hedge, as the treasury rate lock
hedged against the variability of interest payments on the forecasted issuance of fixed-rate debt attributable to changes in interest
rates.  We settled the treasury rate lock for $1.2 million concurrent with our debt issuance in the first quarter of 2003.  At the
end of the first quarter of 2004 and fiscal year 2003, we had deferred approximately $1.7 million (net of $1.0 million in deferred
income taxes) and $1.9 million (net of $1.1 million in deferred income taxes) of losses, respectively, in Accumulated other
comprehensive loss in the Condensed Consolidated Balance Sheets, as the treasury rate locks were considered highly effective in
eliminating the interest rate risk on the forecasted debt issuances.  These amounts also include the deferred losses of the treasury
rate lock settled in fiscal year 2002.  Amounts included in other comprehensive loss are reclassified into earnings commensurate with
the recognition of the interest expense on the newly issued debt.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|9
|-

---

| | In addition, in anticipation of the early extinguishment of $150 million of notes in the first quarter of 2003, we entered into a
reverse treasury rate lock agreement. We accounted for the reverse treasury rate lock as a cash flow hedge, as the reverse treasury
rate lock hedged against the variability of interest rates related to the forecasted extinguishment of debt.  We settled and received
payment for the reverse treasury rate lock in the first quarter of 2003 for $3.2 million.  This amount was recognized in Interest
expense, net in the Condensed Consolidated Statement of Income as a reduction in the loss on the early extinguishment of debt.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Fair Value Hedges  Periodically, we enter into interest rate swap contracts to convert a portion of our fixed rate debt to floating
rate debt, with the objective of reducing overall borrowing costs. We account for these swaps as fair value hedges, since they hedge
against the change in fair value of fixed rate debt resulting from fluctuations in interest rates. The fair value of the interest
rate swaps as of the first quarter of 2004 and fiscal year 2003 was $20.3 million (net of $3.0 million interest receivable), and
$15.3 million (net of $2.3 million interest receivable), respectively, which is reflected in Other long-term assets in the
Condensed Consolidated Balance Sheets.  We record a corresponding increase in Long-term debt representing the change in fair value
of our fixed rate debt. The fair value adjustment had no earnings impact since the swaps are considered highly effective in
eliminating the interest rate risk of the fixed rate debt they are hedging.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10. | Pension and Other Postretirement Benefit Plans
|--- | ----------------------------------------------

| |                                    | First Quarter |      
| | ---------------------------------- | ------------- | -----
| |                                    |               |      
| |                                    | 2004          |      
| |                                    |               |      
| |                                    |               |      
| | Service cost                       | $             | 0.8  
| | Interest cost                      |               | 2.3  
| | Expected return on plan assets     |               | ( 2.8
| | Amortization of prior service cost |               | ( 0.2
| | Amortization of net loss           |               | 0.5  
| |                                    |               |      
| | Net periodic pension cost          | $             | 0.6  
| |                                    |               |      

| | We previously disclosed in our financial statements
for fiscal year end 2003 that we expected to contribute approximately $6.0
million to our pension plans in 2004.  As of the end of the first quarter of 2004, we had not made any contributions to the plans.
We continue to evaluate the plans' funding requirements throughout the year and will fund to levels deemed necessary for each plan.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11. | Stock Options and Awards
|--- | ------------------------

| | In February 2004, we granted 470,375 restricted shares at a weighted-average fair value (at the date of grant) of $18.56 to key
members of management under our Stock Incentive Plan (the Plan).  We recognized compensation expense of $1.7 million and $1.3
million in the first quarter of 2004 and 2003, respectively, related to grants in 2004, 2003 and 2002.  At the end
of the first quarter 2004, there were 1,452,668 unvested restricted shares outstanding under the Plan.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In February 2004, we granted 25,368 restricted shares at a weighted-average fair value (at the date of grant) of $18.56 to members of
the Board of Directors under the Plan. We recognized compensation expense of $0.1 million in the first quarter of 2004 related to
this grant.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12. | Supplemental Cash Flow Information
|--- | ----------------------------------

| | Net cash provided by operating
activities reflected cash payments and receipts for interest and income taxes as follows (in millions):
| | --------------------------------------------------------------------------------------------------------------------------------------

| |                                              | First Quarter |     
| | -------------------------------------------- | ------------- | ----
| |                                              |               |     
| |                                              | 2004          |     
| |                                              |               |     
| |                                              |               |     
| | Interest paid, including debt extinguishment | $             | 21.3
| | Interest received                            |               | 0.1 
| | Income taxes paid, net of refunds            |               | 12.2

|10
|--

---

|13. | Environmental and Other
                Commitments and Contingencies
|--- | ---------------------------------------------------------------------

| | Current Operations.  We maintain a program to
facilitate compliance with federal, state and local laws and regulations relating to
management of wastes, to the discharge or emission of materials used in production, and such other laws and regulations relating to
the protection of the environment. The capital costs of such management and compliance, including the modification of existing plants
and the installation of new manufacturing processes, are not material to our continuing operations.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We are a defendant in lawsuits that arise in the ordinary course of business, none of which is expected to have a material adverse
effect on our financial condition, although amounts recorded in any given period could be material to the result of operations or
cash flows for that period.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Discontinued OperationsRemediation. Under the agreement pursuant to which we sold our subsidiaries Abex Corporation and Pneumo Abex
Corporation (collectively, Pneumo Abex) in 1988 and a subsequent settlement agreement entered into in September 1991, we have
assumed indemnification obligations for certain environmental liabilities of Pneumo Abex, after any insurance recoveries.  Pneumo
Abex has been and is subject to a number of environmental cleanup proceedings, including proceedings under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 regarding release or disposal of wastes at on-site and off-site
locations.  In some proceedings, federal, state and local government agencies are involved and other major corporations have been
named as potentially responsible parties.  Pneumo Abex also is subject to private claims and lawsuits for remediation of properties
owned by Pneumo Abex and its subsidiaries.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | There is an inherent uncertainty in assessing the total cost of remediating a given site.  This is because of the nature of the
remediation and allocation process and the fact that the remediations are at different stages of resolution.  Any assessment of
expenses is speculative until the later stages of remediation and is dependent upon a number of variables beyond the control of any
party.  Furthermore, there are often timing considerations in that a portion of the expense incurred by Pneumo Abex, and any
resulting obligation of ours to indemnify Pneumo Abex, may not occur for a number of years.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In the latter part of 2001, we investigated the use of insurance products to mitigate risks related to indemnification obligations
under the 1988 agreement, as amended.  The insurance carriers required that we employ an outside consultant to perform a
comprehensive review of the former facilities operated or impacted by Pneumo Abex.  Advances in retrospective risk evaluation and
increased experience (and therefore available data) at our former facilities made this comprehensive review possible.  The
consultants review was completed in the fourth quarter of 2001.  It provided a contingent indemnification liability for all known
sites operated or impacted by Pneumo Abex and resulted in the $111.0 million charge, or $71.2 million net of tax, recorded in the
fourth quarter of 2001
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | At the end of the first quarter of 2004, we had $120.4
million accrued to cover potential indemnification obligations, compared to
$119.2 million recorded at the end of fiscal year 2003.  Of the total amount accrued, $20.0 million was classified as current
liabilities at the end of the first quarter of 2004 and at the end of fiscal year 2003.  The amounts exclude possible
insurance recoveries and are determined on an undiscounted cash flow basis.  The estimated indemnification liabilities include
expenses for the remediation of identified sites, payments to third parties for claims and expenses (including product liability and
toxic tort claims), administrative expenses, and the expenses of on-going evaluations and litigation.  We expect a significant
portion of the accrued liabilities will be disbursed during the next 10 years.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Although we have certain indemnification obligations for environmental liabilities at a number of other sites, including Superfund
sites, it is not anticipated that additional expense at any specific site would have a material effect on us.  In the case of some of
the sites, the volumetric contribution for which we have an obligation has in most cases been estimated and other large, financially
viable parties are responsible for substantial portions of the remainder. In our opinion, based upon information currently available,
the ultimate resolution of these claims and litigation, including potential environmental exposures, and considering amounts already
accrued, should not have a material effect on our financial condition, although amounts recorded in a given period could be material
to the results of operations or cash flows for that period.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11
|--

---

| | Discontinued OperationsInsurance.  During the second quarter of 2002, as part of a comprehensive program concerning environmental
liabilities related to the former Whitman Corporation subsidiaries, we purchased new insurance coverage related to the sites
previously owned and operated or impacted by Pneumo Abex and its subsidiaries.  In addition, a trust, which was established in 2000
with the proceeds from an insurance settlement, purchased insurance coverage and funded coverage for remedial and other costs
(Finite Funding) related to the sites previously owned and operated or impacted by Pneumo Abex and its subsidiaries.  In conjunction
with the purchase of the insurance policies, we recorded a charge to discontinued operations of $9.8 million, or $6.0 million after
tax.  This charge represented amounts we expended as well as a reduction of funds in the trust available to pay expenses related to
sites for which we have indemnification obligations.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Essentially all of the assets of the trust were expended by the trust in connection with the purchase of the insurance coverage, the
Finite Funding and related expenses.  These actions were taken to fund remediation and related costs associated with the sites
previously owned and operated or impacted by Pneumo Abex and its subsidiaries and to protect against additional future costs in
excess of our self-insured retention.  The amount of self-insured retention (the amount we must pay before the insurance carrier is
obligated to begin payments) was $114.0 million of which $19.9 million has been eroded, leaving a remaining self-insured retention of
$94.1 million at the end of the first quarter of 2004.  The estimated range of aggregate exposure related only to the remediation
costs of such environmental liabilities is approximately $50 million to $90 million.  We had accrued $70.1 million at the end of the
first quarter of 2004 for remediation costs, which is our best estimate of the contingent liabilities related to these environmental
matters. The Finite Funding may be used to pay a portion of the $70.1 million and thus reduces our future cash obligations.  The
Finite Funding amounts recorded were $23.2 million and $24.2 million at the end of the first quarter of 2004 and fiscal year 2003,
respectively, and are recorded in Other assets, net of $3.0 million, respectively, recorded in Other current assets.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | In addition, we had recorded other receivables of $14.2 million at the end of the first quarter of 2004 and $10.6 million at the end
of fiscal year 2003 for future probable amounts to be received from insurance companies and other responsible parties.  Of this
total, $1.6 million was included in Other current assets at the end of fiscal year 2003.  No amounts were recorded in Other
current assets at the end of the first quarter of 2004.  The $14.2 million and the remaining $9.0 million were recorded in Other
assets in the Condensed Consolidated Balance Sheets as of the end of the first quarter of 2004 and fiscal year 2003, respectively.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Discontinued OperationsProduct Liability and Toxic Tort Claims.  We also have certain indemnification obligations related to product
liability and toxic tort claims, which emanate out of the 1988 agreement with Pneumo Abex.  Other companies not owned by or
associated with us also are responsible to Pneumo Abex for the financial burden of all asbestos product liability claims filed
against Pneumo Abex after a certain date in 1998, except for certain claims indemnified by us.  The sites and product liability and
toxic tort claims included in the aggregate accrued liabilities we have recorded are described more fully in our Annual Report on
Form 10-K for the fiscal year 2003.  No significant changes in the status of those sites or claims occurred and we were not notified
of any significant new sites or claims during the first quarter of 2004.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14. | Segment Reporting
|--- | -----------------

| | We operate in
three geographic areas  the U.S., Central Europe and the Caribbean.  We operate in 18 states
      in the U.S., and, outside the U.S., we operate in Poland, Hungary, the Czech Republic, Republic of Slovakia,
      Puerto Rico, Jamaica, Barbados, the Bahamas and Trinidad and Tobago.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|12
|--

---

| | The following tables present net sales
and operating income (loss) of our geographic segments for the first quarter of 2004 and 2003 (in millions):
| | ---------------------------------------------------------------------------------------------------------------------------------------------------

| |                | First Quarter
| | -------------- | -------------
| |                |              
| |                | Net sales    
| |                |              
| |                | 2004         
| |                |              
| |                |              
| | U.S.           | $            
| | Central Europe |              
| | Caribbean      |              
| |                |              
| | Total          | $            
| |                |              

| | There were no material changes in
total assets by geographic segment since the end of fiscal year 2003.
| | -------------------------------------------------------------------------------------------------------

|15. | Related Party Transactions
|--- | --------------------------

| | We are a licensed producer and distributor of Pepsi carbonated and non-carbonated soft drinks and other
non-alcoholic beverages in the U.S., Central Europe and the Caribbean.  We operate under exclusive franchise
agreements with soft drink concentrate producers, including master bottling and fountain syrup agreements with
PepsiCo, Inc. (PepsiCo) for the manufacture, packaging, sale and distribution of PepsiCo branded products.
The franchise agreements exist in perpetuity and contain operating and marketing commitments and conditions for
termination.  As of the end of the first quarter of 2004, PepsiCo held a 39.0 percent equity interest in our
business.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We purchase concentrate from PepsiCo to be used in the
production of Pepsi carbonated soft drinks and other non-alcoholic beverages.
PepsiCo also provides us with various forms of bottler incentives to promote Pepsis brands. These
bottler incentives cover a variety of initiatives, including direct marketplace, shared media and advertising support, to support
volume and market share growth.  There are no conditions or requirements which could result in the repayment of any support payments we have
received.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | We manufacture and distribute fountain products and provide fountain equipment service to PepsiCo customers in certain territories in
accordance with various agreements. There are other products that we produce and/or distribute through various arrangements with
PepsiCo or partners of PepsiCo. We also purchase finished beverage products from PepsiCo and certain of its affiliates including tea,
concentrate and finished beverage products from a Pepsi/Lipton partnership, as well as finished beverage products from a
Pepsi/Starbucks partnership.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | PepsiCo provides various procurement services under a
shared services agreement.  Under such agreement, PepsiCo negotiates with various suppliers the cost of certain raw materials by
entering into raw material contracts on our behalf.  PepsiCo also collects and remits to us certain rebates from the various
suppliers related to our procurement volume.  In addition, PepsiCo acts as our agent for the execution of derivative contracts associated
with certain anticipated raw material purchases.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Although we did not enter into any new agreements in the first
quarter of 2004, we have from time to time entered into various transactions with Pohlad Companies and its subsidiaries. Robert C. Pohlad, our Chairman and
Chief Executive Officer, is the President and owner of approximately 33 percent of the capital stock of Pohlad Companies
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | See additional
discussion of our related party transactions in our Annual Report on Form 10-K for the fiscal year 2003.
| | -----------------------------------------------------------------------------------------------------------------------

|16. | Subsequent Event
|--- | ----------------

| | On April 30, 2004, we repurchased 10 million shares, or
approximately 6.8 percent, of our common stock at a total cost of
approximately $200 million.  The shares were purchased from an investment bank under an accelerated share repurchase program at
$20.03 per share.  The accelerated share repurchase program permitted us to repurchase the shares immediately, while the investment
bank will purchase shares in the market over time.  The completion of the program will be based on the average daily trading
volume of our shares, and we expect it to be finished within six to nine months.  At the end of the program, we may receive or be required to pay a
price adjustment based on the actual costs of the investment bank's share purchases.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|13
|--

---

|Item 2.      Management's Discussion and Analysis of
Financial Condition and Results of Operations.
|---------------------------------------------------------------------------------------------------

|CRITICAL ACCOUNTING POLICIES
|----------------------------

|The preparation of the Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the
United States requires management to use estimates. These estimates are made using managements best judgment and the information
available at the time these estimates are made, including the advice of outside experts. For a better understanding of our
significant accounting policies used in preparation of the Condensed Consolidated Financial Statements, please refer to our Annual
Report on Form 10-K for the fiscal year 2003. We focus your attention on the following critical accounting policies:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Goodwill Impairment.  Goodwill is tested for impairment at least annually, using a two-step approach at the reporting unit level: U.S., Central Europe
and the Caribbean. First, we estimate the fair value of the reporting units primarily using discounted estimated future cash flows.
If the carrying value exceeds the fair value of the reporting unit, the second step of the goodwill impairment test is performed to
measure the amount of the potential loss. Goodwill impairment is measured by comparing the implied fair value of goodwill with its
carrying amount. The impairment evaluation requires the use of considerable management judgment to determine the fair value of the
reporting units using discounted future cash flows, including estimates and assumptions regarding the amount and timing of cash
flows, cost of capital and growth rates.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Environmental Liabilities.  We continue to be subject to certain indemnification obligations under agreements related to previously sold subsidiaries, including
potential environmental liabilities (see Environmental and Other Commitments and Contingencies note to the Condensed Consolidated
Financial Statements). We have recorded our best estimate of our probable liability under those indemnification obligations, with the
assistance of outside consultants and other professionals. Such estimates and the recorded liabilities are subject to various
factors, including possible insurance recoveries, the allocation of liabilities among other potentially responsible parties, the
advancement of technology for means of remediation, possible changes in the scope of work at the contaminated sites, as well as
possible changes in related laws, regulations, and agency requirements.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Income Taxes.  Our effective income tax rate is based on income, statutory tax rates and tax planning opportunities available to us in the various
jurisdictions in which we operate.  The tax bases of our assets and liabilities reflect managements best estimate of the outcome of
future tax audits.  We have established valuation allowances against substantially all of the nonU.S. net operating losses to
reflect the uncertainty of our ability to fully utilize these benefits given the limited carryforward periods permitted by the
various jurisdictions.  The evaluation of the realizability of our net operating losses requires the use of considerable management
judgment to estimate the future taxable income for the various jurisdictions, for which the ultimate amounts and timing of such
estimates may differ.  The valuation allowance can also be impacted by changes in the tax regulations.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Significant judgment is required in determining our contingent tax liabilities.  We have established contingent tax liabilities using
managements best judgment and adjust these liabilities as warranted by changing facts and circumstances.  A change in our tax
liabilities in any given period could have a significant impact on our results of operations and cash flows for that period.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Casualty Insurance Costs.  Due to the nature of our business, we require insurance coverage for certain
            casualty risks.  We are self-insured for workers compensation, product and general liability up to $1
            million per occurrence and automobile liability up to $2 million per occurrence.  The casualty insurance
            costs for our self-insurance program represent the ultimate net cost of all reported and estimated
            unreported losses incurred during the fiscal year.  We do not discount insurance liabilities.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14
|--

---

| | 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.  These estimates are subject to the effects of trends in loss
severity and frequency and are based on the best data available to us.  These estimates, however, are also subject to a significant
degree of inherent variability, including the relatively recent increases in medical costs.  We evaluate these estimates with our
actuarial advisors on an annual basis and we believe that they are appropriate and within acceptable industry ranges, although an
increase or decrease in the estimates or economic events outside our control could have a material impact on our results of
operations and cash flows.  Accordingly, the ultimate settlement of these costs may vary significantly from the estimates included in
our Condensed Consolidated Financial Statements.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|15
|--

---

|RESULTS OF OPERATIONS2004 FIRST QUARTER COMPARED WITH 2003 FIRST QUARTER
|------------------------------------------------------------------------

|In the discussions of our results of operations below, the number of cases sold is referred to as volume.
Net pricing is net sales
divided by the number of cases and gallons sold for our core businesses, which include bottles and cans (including bottle and can
volume from vending equipment) as well as our food service gallons. Changes in net pricing include the impact of sales price (or rate) changes,
as well as the impact of brand, package and geographic mix. Net pricing and reported volume amounts exclude contract, commissary,
private label, concentrate, and vending (other than bottles and cans) revenue and volume. Contract sales represent sales of
manufactured product to other franchise bottlers and typically decline as excess manufacturing capacity is utilized. Cost of goods
sold per unit is the cost of goods sold for our core businesses divided by the related number of cases and gallons sold.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Our business is highly seasonal; accordingly, the operating results of any individual quarter may not be indicative of a full years
operating results.
|-------------------------------------------------------------------------------------------------------------------------------------------------------

|Volume
|------

|Sales volume growth (declines) for the first quarter of 2004 and 2003 were as follows:
|--------------------------------------------------------------------------------------

| |                |  |  | 2004 |  | 2003  |   | 
| | -------------- |  |  | ---- |  | ----- | - | 
| |                |  |  |      |  |       |   | 
| | U.S.           |  |  |      |  | 2.3%  |   | 
| | Central Europe |  |  |      |  | 11.6% |   | 
| | Caribbean      |  |  |      |  | (4.3% | ) | 
| |                |  |  |      |  |       |   | 
| | Worldwide      |  |  |      |  | 3.1%  |   | 

|First quarter 2004 worldwide volume increased 3.1 percent compared to the prior year first quarter. The growth in worldwide volume
was attributed to volume growth in the U.S. and Central Europe of 2.3 percent and 11.6 percent, respectively.  This volume growth was
offset by a volume decline of 4.3 percent in the Caribbean.  We anticipate worldwide volume growth of approximately one percent in fiscal year 2004.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The increase in U.S. volume of 2.3 percent in the first quarter of 2004 reflected growth in our core trademarks and double-digit
growth in our non-carbonated beverages category.  Trademark Pepsi grew in the low single digits, while Trademark Mountain Dew grew in
the mid single digits.  Growth in our diet category, driven primarily by high single-digit growth in Diet Pepsi and doubledigit
growth in Diet Mountain Dew, drove this growth in our core trademarks.  Non-carbonated beverage growth was driven by double-digit
growth in Aquafina volume and also benefited from the introduction of Tropicana juice drinks in February 2004.  The single-serve
category also grew at a double-digit rate during the first quarter of 2004.  Single-serve is expected to contribute to volume growth
for the balance of the year through continued emphasis on marketing and the introduction of a new 14-ounce single-serve package.  In
addition, we expect new product introductions such as PepsiEdge, a new Mountain Dew line extension in early fall, and the
reintroduction of Mountain Dew LiveWire, to contribute to anticipated volume growth for the balance of the year.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Total volume in Central Europe increased 11.6 percent in the first quarter of 2004.  This
growth was driven primarily from successful promotion efforts, which included a program that provided a
free bottle of water when purchasing a two-liter carbonated soft drink.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Volumes in the Caribbean decreased 4.3 percent compared to the same period last year, primarily reflecting volume declines in Jamaica
and Puerto Rico as we lapped strong prior year performance in Puerto Rico and increased pricing in Jamaica to mitigate the impact of
the devaluation of the Jamaican dollar.  In the Caribbean, the diet category outperformed the prior year first quarter, while overall
Trademark Pepsi volume decreased in
the mid single digits compared to the prior year first quarter.  Trademark Pepsi accounts for almost 60 percent of our business in
the Caribbean, while the remainder of our business is mainly comprised of flavored carbonated soft drinks and Trademark Seven Up.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|16
|--

---

|Net Sales
|---------

|Net sales and net pricing statistics for the first quarter of 2004 and 2003 were as follows (dollar amounts in millions):
|-------------------------------------------------------------------------------------------------------------------------

| | Net Sales                    | 2004 |       | 2003 |   | Change |   | 
| | ---------------------------- | ---- | ----- | ---- | - | ------ | - | 
| |                              |      |       |      |   |        |   | 
| | U.S.                         | $    | 636.3 |      | $ | 590.1  |   | 
| | Central Europe               |      | 60.4  |      |   | 52.9   |   | 
| | Caribbean                    |      | 40.9  |      |   | 39.1   |   | 
| |                              |      |       |      |   |        |   | 
| | Worldwide                    | $    | 737.6 |      | $ | 682.1  |   | 
| |                              |      |       |      |   |        |   | 
| |                              |      |       |      |   |        |   | 
| | Net Pricing Growth (Decline) | 2004 |       | 2003 |   |        |   | 
| |                              |      |       |      |   |        |   | 
| | U.S.                         |      | 5.0%  |      |   | 3.5%   |   | 
| | Central Europe               |      | 4.8%  |      |   | 23.1%  |   | 
| | Caribbean                    |      | 6.9%  |      |   | (2.4%  | ) | 
| |                              |      |       |      |   |        |   | 
| | Worldwide                    |      | 4.6%  |      |   | 5.6%   |   | 

|Net sales increased $55.5 million, or 8.1 percent, to $737.6 million in the first quarter of 2004 compared to $682.1 million the
first quarter of 2003. The increase was driven primarily by increased worldwide net pricing of 4.6 percent and volume growth in the
U.S. and Central Europe, offset by volume declines in the Caribbean.  We anticipate that worldwide net pricing will grow three to four
percent in fiscal year 2004 compared to fiscal year 2003.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Net sales in the U.S. for the first quarter of 2004 increased $46.2 million, or 7.8 percent, to $636.3 million from $590.1 million in
the prior year first quarter.  The increase was primarily the result of a 5.0 percent increase in net pricing along with a 2.3
percent increase in volume. The improvement in net pricing was driven by price increases of 3.2 percent and a package mix
contribution of 1.8 percent.  A favorable change in our can mix, including the introduction of the eight-ounce can late in fiscal
year 2003 and the success of the new Fridge-Mate 12-ounce can package, which utilizes a two-by-six configuration, have driven this
growth.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Net sales in Central Europe for the first quarter of 2004 increased $7.5 million or 14.2 percent to $60.4 million from $52.9 million
in the prior year first quarter.  This increase resulted from an increase in net pricing of 4.8 percent and a volume increase of 11.6
percent driven by the successful water promotion launched in the first quarter of 2004 as well as the lapping of the declining volume
experienced in first quarter
of 2003.  The favorable foreign exchange rates also contributed approximately $4.4 million to Central Europes net sales in the first
quarter of 2004.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Net sales in the Caribbean increased 4.6 percent in the first quarter of 2004 to $40.9 million from $39.1 million in the prior year
first quarter. The increase in net sales resulted primarily from an increase in net pricing offset by volume declines of 4.3 percent
and the unfavorable impact of foreign currency.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Cost of Goods Sold
|------------------

|Cost of goods sold for the first quarter of 2004 and 2003 was as follows (dollar amounts in millions):
|------------------------------------------------------------------------------------------------------

| |                | 2004 |       | 2003 |   | Change |  | 
| | -------------- | ---- | ----- | ---- | - | ------ |  | 
| |                |      |       |      |   |        |  | 
| | U.S.           | $    | 359.3 |      | $ | 335.6  |  | 
| | Central Europe |      | 34.4  |      |   | 30.9   |  | 
| | Caribbean      |      | 30.8  |      |   | 30.1   |  | 
| |                |      |       |      |   |        |  | 
| | Worldwide      | $    | 424.5 |      | $ | 396.6  |  | 
| |                |      |       |      |   |        |  | 

|17
|--

---

|Cost of goods sold increased $27.9 million, or 7.0 percent, to $424.5 million in the first quarter of 2004 from $396.6 million in the
prior year first quarter.  This increase was driven primarily by higher volume and higher aluminum costs.  Overall, we expect that cost of
goods per unit will grow three to four percent during fiscal year 2004 as compared to the prior fiscal year
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In the U.S., cost of goods sold increased $23.7 million, or 7.1 percent, to $359.3 million in the first quarter of 2004 from $335.6
million in the prior year first quarter driven primarily by increased volumes of 2.3 percent and a higher cost of goods sold per
unit.  Cost of goods sold per unit increased 4.8 percent in the U.S., primarily driven by price increases in aluminum and higher
packaging costs related to product mix.   In addition, concentrate costs, which represent approximately 40 percent of total product
costs in the U.S., will continue to be higher, as PepsiCo concentrate prices increased by approximately 0.8 percent on average beginning in
February 2004.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In Central Europe, cost of goods sold increased $3.5 million, or 11.3 percent, to $34.4 million in the
first quarter of 2004,
compared to $30.9 million in the prior year first quarter. Cost of goods sold increased mainly due to increased volumes of 11.6 percent,
the unfavorable impact of
foreign exchange of $2.6 million, and slightly higher raw materials costs.  Cost of goods sold per unit in Central Europe is expected to
increase due to higher sugar prices expected as a result of the European Union (EU) accession of Poland, Hungary, the Czech
Republic and Republic of Slovakia in May 2004.  Upon entry into
the EU, price supports for sugar will be removed and our costs are expected to increase by approximately $6 million to $8 million for the
period May 1, 2004 through December 31, 2004.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In the Caribbean, cost of goods sold increased $0.7 million, or 2.3 percent, to $30.8 million in the first quarter of 2004, compared
to $30.1 million in the first quarter of 2003, driven by a higher cost of goods sold per unit, as volume decreased 4.3 percent.
Cost of goods sold per unit increased mainly due to higher raw material costs, offset by the favorable impact of foreign currency
rates in Jamaica.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Selling, Delivery and Administrative
                Expenses
|-------------------------------------------------------------

|Selling, delivery and administrative expenses for the first quarter of 2004 and 2003 were as follows
(dollar amounts in millions):
|----------------------------------------------------------------------------------------------------------------------------------

| |                | 2004 |       | 2003 |   | Change |  | 
| | -------------- | ---- | ----- | ---- | - | ------ |  | 
| |                |      |       |      |   |        |  | 
| | U.S.           | $    | 217.8 |      | $ | 208.6  |  | 
| | Central Europe |      | 32.9  |      |   | 32.6   |  | 
| | Caribbean      |      | 12.1  |      |   | 11.3   |  | 
| |                |      |       |      |   |        |  | 
| | Worldwide      | $    | 262.8 |      | $ | 252.5  |  | 
| |                |      |       |      |   |        |  | 

|In the first quarter of 2004, selling, delivery and administrative (SD&A)
expenses increased $10.3 million, or 4.1 percent, to
$262.8 million from $252.5 million in the comparable period of the previous year.  As a percentage of net sales, SD&A expenses
decreased to 35.6 percent in the first quarter of 2004, compared to 37.0 percent in the prior year first quarter. The decline in SD&A
expenses as a percentage of net sales was primarily attributed to lower operating costs achieved in the U.S. and Central Europe due to cost
reduction programs implemented during fiscal year 2003.  We expect increases of four to five percent in SD&A expenses for fiscal year 2004,
compared to fiscal year 2003, due to the lapping of cost reductions initiated at the end of the first quarter of 2003 as well
as additional expenses for our new centralized Tel-Sell call center, a telephone sales center that services our small format accounts
in our pre-sell environment.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In the U.S., SD&A expenses increased $9.2 million to $217.8 million in the first quarter of 2004, compared to $208.6 million in the
prior year first quarter.  SD&A expenses as a percentage of net sales improved to 34.2 percent compared to 35.3 percent in the prior
year first quarter, mainly as a result of the realization of our cost containment initiatives, offset by increases in insurance costs.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In Central Europe, SD&A expenses increased $0.3 million, or 0.9 percent, to $32.9 million from $32.6 million in the prior year first
quarter.  Excluding the unfavorable impact of foreign exchange of $1.7 million, SD&A costs decreased by $1.4 million or 4.3 percent, due to
our successful cost management driven by our migration to an alternative sales and distribution strategy in the rural areas of
Central Europe.  With the benefit of centralization from the membership in the EU starting in May 2004, we will implement an
additional cost reduction program in the second quarter of 2004.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|18
|--

---

|In the Caribbean, SD&A expenses increased $0.8 million, or 7.1 percent, to $12.1 million from $11.3 million in the prior year first
quarter due mainly to higher warehousing costs.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Special Charges
|---------------

|In the first quarter of 2004, we recorded special charges of $0.2 million ($0.1 million after tax) in Central Europe primarily for
severance costs and other related benefits.  This compares to special charges of $6.3 million ($3.9 million after tax) in the first
quarter of 2003, which represented special charges of $5.8 million in the U.S. and $0.5 million in Central Europe.  The U.S. special
charge of $5.8 million ($3.6 million after tax) consisted mainly of severance-related costs associated with our announced reduction
in our U.S. workforce.  The Central Europe special charge of $0.5 million ($0.3 million after tax) related to the continuing changes
in the marketing and distribution strategy in Poland, the Czech Republic and Republic of Slovakia.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Operating Income
|----------------

|Operating income for the first quarter of 2004 and 2003 was as follows (dollar amounts in millions):
|----------------------------------------------------------------------------------------------------

| |                | 2004 |       | 2003 |   | Change |   | 
| | -------------- | ---- | ----- | ---- | - | ------ | - | 
| |                |      |       |      |   |        |   | 
| | U.S.           | $    | 59.2  |      | $ | 40.1   |   | 
| | Central Europe |      | ( 7.1 | )    |   | (11.1  | ) | 
| | Caribbean      |      | ( 2.0 | )    |   | ( 2.3  | ) | 
| |                |      |       |      |   |        |   | 
| | Worldwide      | $    | 50.1  |      | $ | 26.7   |   | 
| |                |      |       |      |   |        |   | 

|Operating income increased $23.4 million, or 87.6 percent, to $50.1 million in the first quarter of 2004, compared to
$26.7 million
in the prior year first quarter, driven by a $19.1 million increase in operating income in the U.S. and the reduction of
international operating losses by $4.3 million.  The increase in operating income in the U.S. was primarily attributed to higher gross
margins due
to improved net pricing compared to the prior year, and volume growth, offset, in part, by an increase in operating costs.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Operating losses in Central Europe improved $4.0 million to $7.1 million in the first quarter of 2004, compared to
a loss of $11.1
million in the prior year first quarter, due mainly to volume growth and lower SD&A costs, excluding the unfavorable impact of
our foreign currency rates.  The impact of foreign
currency rates contributed approximately $0.1 million of the $4.0 million overall operating improvement in Central Europe.  Operational performance in the Caribbean improved, as operating losses
in the Caribbean of $2.0 million in the first quarter of 2004 were $0.3 million lower than the operating losses of $2.3 million in the
prior year.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Interest and Other Expenses
|---------------------------

|Net interest expense decreased $3.3 million in the first quarter of 2004 to $15.9 million, compared to $19.2 million in the first
quarter of 2003, due in part to the refinancing of a portion of our fixed-rate debt in the first quarter of 2003 and lower average
balances in our securitization and commercial paper programs in the first quarter of 2004 as compared to the same period in the prior year.
The 2003 amount includes the loss on the early extinguishment of debt in the first quarter of 2003 of
$8.8 million, offset in part, by a $6.8 million increase in interest income due to the favorable resolution of a tax refund case
related to the ESOP.  See the Income Taxes note to the Condensed Consolidated Financial Statements for further discussion.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|We recorded other expense, net, of $1.4 million in the first quarter of 2004 compared to other expense, net, of $2.3 million reported
in the first quarter of 2003 due primarily to gains recorded on foreign currency transactions of $0.4 million in the first quarter
of 2004 compared to losses of $0.5 million in the first quarter of 2003.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|19
|--

---

|Income Taxes
|------------

|The effective income tax rate, which is income tax expense expressed as a percentage of income before income taxes, was 37.5
percent for the first quarter of 2004, compared to 5.8 percent in the first quarter of 2003.  Excluding the additional tax accruals
recorded of $4.3 million, as well as the tax benefit recorded of $6.0 million related to the favorable ESOP settlement, the effective
tax rate for the first quarter of 2003 was 38.5 percent.  See the Income Taxes note to the Condensed Consolidated Financial
Statements for further discussion of the significant items recorded in Income taxes.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Net Income
|----------

|Net income increased $15.6 million to $20.5 million in the first quarter of 2004, compared to $4.9 million in the first quarter of
2003.  The increase can be attributed mainly to improved worldwide net pricing, worldwide volume growth and continued emphasis on cost
savings.  Other operational factors impacting net income were previously discussed.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|LIQUIDITY AND CAPITAL RESOURCES
|-------------------------------

|Operating Activities.  Net cash provided by operating activities increased by $10.3 million to
$37.3 million in the first quarter of 2004, compared to $27.0
million in the first quarter of 2003.  This increase can
mainly be attributed to our $15.6 million improvement in operating performance to $20.5 million and an increase in our accounts
receivable securitization program of $26.7 million, offset by a lower benefit from changes in primary working capital due to increases
in receivables and inventory.  Primary working capital is comprised of inventory,
accounts payable and accounts receivable, excluding securitized receivables.  The increases
in accounts receivable and inventory related primarily to timing issues.  Receivables were higher due to strong sales in the
quarter, and inventory increased due to the timing of the Easter holiday and planned inventory builds.  The changes in primary
working capital are expected to reverse in the second quarter, and benefit our cash flow from operating activities.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Investing Activities.  Investing activities in the first quarter of 2004 included capital investments of $19.8 million, compared to $36.0 million in the
first quarter of 2003.  The decline in capital expenditures was primarily due to timing, as we expect our capital spending to be in the
range of $150 million to $170 million for the full year 2004, compared to capital investments of $158.3 million for the full year 2003.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In January 2004, we completed the acquisition of the Dr Pepper franchise rights for a 13-county area in northeast Arkansas
and certain related assets from Dr Pepper Bottling Company of Paragould, Inc.  We acquired the franchise rights and related assets for
$17.7 million, of which $17.6 million was paid in cash in the first quarter of 2004.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|In addition, in March 2004, we acquired 2,000 additional shares of Pepsi-Cola Bahamas for $3.3 million, which increased our ownership
interest in the Bahamas from 30 percent to 70 percent.  As a result, we have consolidated the Bahamas beginning in the first quarter
of 2004.  The investment was previously accounted for under the equity investment method prior to this transaction.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Financing Activities.  Our total debt decreased $19.4 million to $1,258.9 million at the end of the first quarter of 2004, from $1,278.3 million at the
end of fiscal year 2003.  In the first quarter of 2004, we assumed $3.4 million of debt associated with the Pepsi-Cola Bahamas
transaction.  We made total debt payments of $28.0 million in the first quarter of 2004.  In the first quarter of 2003, we issued $150 million of notes due in March 2013 with a coupon rate
of 4.5 percent.  Net proceeds from these notes were $146.3 million, which reflected the reduction for discount and issuance costs
totaling $2.6 million, as well as a treasury rate lock settlement payment of $1.1 million.  The proceeds were used to redeem
$150 million of notes that were issued in March 2001.  In February 2003, the investors of the $150 million of notes issued in March
2001 notified us that they wanted to exercise their option to purchase and remarket the notes pursuant to the remarketing agreement,
unless we elected to redeem the notes.  In March 2003, we redeemed the notes pursuant to the agreement.  We paid approximately $164.5
million for the fair value of the debt to be extinguished, net of the reverse treasury rate lock settlement of $3.2 million.
In addition, we repaid $125 million 7.25 percent notes that came due during the first quarter of 2003.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|20
|--

---

|We have a revolving credit agreement with maximum borrowings of $500 million, which acts as a back-up as required by our
credit rating agencies for our commercial
paper program.  Accordingly, we have a total of $500 million available under the commercial paper program and revolving credit
facility combined.  There were no commercial paper borrowings at the end of the first quarter of 2004 compared to $181.0 million at
the end of the first quarter of 2003.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|During the first quarter of 2004, we did not repurchase any shares of our common stock.  In the same period in the prior year, we
repurchased approximately 4.3 million shares of our common stock for $56.0 million.  In April 2004, we executed an accelerated
stock repurchase program in which we purchased 10 million shares of our common stock for approximately $200 million.  See the Subsequent
Event note in the Condensed Consolidated Financial Statements for further discussion.  The issuance of common stock, including treasury shares, for the exercise of stock options
resulted in cash inflows of $43.9 million in the first quarter of 2004, compared to $0.3 million in the first quarter of 2003.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|On February 17, 2004, we announced that our Board of Directors declared a quarterly dividend of $0.075 per share on PepsiAmericas
common stock for the first quarter of 2004.  The dividend was payable April 1, 2004 to shareholders of record on March 12, 2004.  We paid cash dividends of $11.0 million
in the first quarter 2004 based on this quarterly cash dividend rate.  On April 28, 2004, we announced that our Board of Directors declared
quarterly dividends of $0.075 per share on PepsiAmericas common stock for the remainder of fiscal year 2004 for an annual dividend of
$0.30 per share.  The remaining quarterly dividends will be paid on July 1, 2004, October 1, 2004, and January 3, 2005 to shareholders of
record on June 15, 2004, September 15, 2004 and December 15, 2004, respectively.  In the first quarter of 2003, we declared cash dividends of $5.8 million based on a dividend rate of
$0.04 a share.  This amount was paid in the second quarter of 2003 and is reflected in Payables on the Condensed Consolidated Balance
Sheet.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|See the Annual Report on Form 10-K for fiscal year 2003 for a summary of our contractual obligations as of the end of fiscal year
2003.  There were no significant changes to such contractual obligations in the first quarter of 2004 except as discussed in the
Subsequent Event note in the Condensed Consolidated Financial Statements.  We believe that our operating
cash flows are sufficient to fund our existing operations for the foreseeable future. In addition, we believe that with our operating
cash flows, available lines of credit, and the potential for additional debt and equity offerings, we will have sufficient resources
to fund our future growth and expansion.  There are a number of options available to us and we continue to examine the optimal uses
of our cash, including repurchasing our stock and reinvesting in the business or acquisitions, assuming a high economic return.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Discontinued operations.  We continue to be subject to certain indemnification obligations, net of insurance,
under agreements related to previously sold subsidiaries, including indemnification expenses for potential environmental and
tort liabilities of these prior subsidiaries.  There is significant uncertainty in assessing our potential expenses for complying
with our indemnification obligations, as the determination of such amounts is subject to various factors, including possible insurance
recoveries and the allocation of liabilities among other potentially responsible and financially viable parties.  Accordingly, the
ultimate settlement and timing of cash requirements related to such indemnification obligations may vary significantly from the estimates included in our financial
statements.  At the end of the first quarter of 2004, we had recorded $120.4 million in liabilities for future remediation and other related
costs arising out of our indemnification obligations.  This amount excludes possible insurance recoveries and is determined on an
undiscounted cash flow basis.  In addition, we have funded coverage pursuant to an insurance policy purchased in fiscal year 2002
(see the Environmental and Other Commitments and Contingencies note to the Condensed Consolidated Financial Statements), which reduces
the cash required to be paid by us for certain environmental sites pursuant to our indemnification obligations.  The Finite Funding amount
recorded was $23.2 million at the end of the first quarter of 2004, of which $3.0 million is expected to be recovered in 2004 based
on our expenditures, and is thus, included as a current asset.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|During the first quarters of 2004 and 2003, we paid approximately $0.8 million and received approximately
$2.4 million, respectively, related to such indemnification obligations, net of insurance settlements of $3.1 million and $5.5 million,
respectively, as well as the benefit of taxes.  We expect to spend approximately $15 million to $25 million in fiscal year
2004 for remediation and other related costs, excluding possible insurance recoveries (see the Environmental and Other
Commitments and Contingencies note to the Condensed Consolidated Financial Statements for further discussion of discontinued
operations and related environmental liabilities).
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21
|--

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|RELATED PARTY TRANSACTIONS
|--------------------------

|We are a licensed producer and distributor of Pepsi carbonated and non-carbonated soft drinks and other
non-alcoholic beverages in the U.S., Central Europe and the Caribbean.  We operate under exclusive franchise
agreements with soft drink concentrate producers, including master bottling and fountain syrup agreements with
PepsiCo for the manufacture, packaging, sale and distribution of PepsiCo branded products.
The franchise agreements exist in perpetuity and contain operating and marketing commitments and conditions for
termination.  As of the end of the first quarter of 2004, PepsiCo held a 39.0 percent equity interest in our
business.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|We purchase concentrate from PepsiCo to be used in the
production of Pepsi carbonated soft drinks and other non-alcoholic beverages.
PepsiCo also provides us with various forms of bottler incentives to promote Pepsis brands. These
bottler incentives cover a variety of initiatives, including direct marketplace, shared media and advertising support, to support
volume and market share growth.  There are no conditions or requirements which could result in the repayment of any support payments we have
received.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|We manufacture and distribute fountain products and provide fountain equipment service to PepsiCo customers in certain territories in
accordance with various agreements. There are other products that we produce and/or distribute through various arrangements with
PepsiCo or partners of PepsiCo. We also purchase finished beverage products from PepsiCo and certain of its affiliates including tea,
concentrate and finished beverage products from a Pepsi/Lipton partnership, as well as finished beverage products from a
Pepsi/Starbucks partnership.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PepsiCo provides various procurement services under a
shared services agreement.  Under such agreement, PepsiCo negotiates with various suppliers the cost of certain raw materials by
entering into raw material contracts on our behalf.  PepsiCo also collects and remits to us certain rebates from the various
suppliers related to our procurement volume.  In addition, PepsiCo acts as our agent for the execution of derivative contracts associated
with certain anticipated raw material purchases.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Although we did not enter into any new agreements in the first
quarter of 2004, we have from time to time entered into various transactions with Pohlad Companies and its subsidiaries. Robert C. Pohlad, our Chairman and
Chief Executive Officer, is the President and owner of approximately 33 percent of the capital stock of Pohlad Companies
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|See additional
discussion of our related party transactions in our Annual Report on Form 10-K for the fiscal year 2003.
|-----------------------------------------------------------------------------------------------------------------------

|FORWARD-LOOKING STATEMENTS
|--------------------------

|This quarterly report on Form 10-Q contains certain forward-looking statements of expected future developments, as defined in the
Private Securities Litigation Reform Act of 1995. The forward-looking statements in this Form 10-Q refer to the expectations
regarding continuing operating improvement and other matters. These forward-looking statements reflect our expectations and are based
on currently available data; however, actual results are subject to future risks and uncertainties, which could materially affect
actual performance. Risks and uncertainties that could affect such future performance include, but are not limited to, the following:
competition, including product and pricing pressures; changing trends in consumer tastes; changes in the our relationship
and/or support programs with PepsiCo and other brand owners; market acceptance of new product offerings; weather conditions; cost and
availability of raw materials; availability of capital; labor and employee benefit costs; unfavorable interest rate and currency
fluctuations; costs of legal proceedings; outcomes of environmental claims and litigation; changing legislation; and general
economic, business and political conditions in the countries and territories where we operate.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|These events and uncertainties are difficult or impossible to predict accurately and many are beyond our control. We assume no
obligation to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or
circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|22
|--

---

|Item 3.      Quantitative and Qualitative Disclosures
About Market Risk.
|------------------------------------------------------------------------

|We are subject to various market risks, including risks
from changes in commodity prices, interest rates and currency
exchange rates.
|-------------------------------------------------------------------------------------------------------------------------------------

|Commodity Prices
|----------------

|The risk from commodity price changes relates to our ability to recover higher product costs through price increases to customers,
which may be limited due to the competitive pricing environment that exists in the soft drink business. We use derivative financial
instruments to hedge price fluctuations for a portion of our aluminum requirements over a specified period of time. Because of the
high correlation between commodity prices and our contractual cost of these products, we consider these hedges to be highly
effective. As of the end of the first quarter of 2004, we hedged a portion of our anticipated aluminum can purchases through November
2004.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Interest Rates
|--------------

|In the first quarter of 2004, the risk from changes in interest rates was not material to our operations because a significant
portion of our debt issues represented fixed rate obligations. Our floating rate exposure relates to changes in the six-month LIBOR
rate and the overnight Federal Funds rate. Assuming consistent levels of floating rate debt with those held at the end of the first
quarter of 2003, a 50 basis point (0.5 percent) change in each of these rates would not have had a significant impact on our first
quarter of 2004 interest expense. We have entered into interest rate swaps to convert a portion of our fixed rate debt to floating
rate debt. We had cash equivalents throughout the first quarter of 2004, principally invested in money market funds and commercial
paper, which were most closely tied to overnight Federal Funds rates. Assuming a change of 50 basis points in the rate of interest
associated with our cash equivalents at the end of the first quarter of 2004, interest income for the first quarter of 2004 would not
have changed by a significant amount.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Currency Exchange Rates
|-----------------------

|Because we operate in international franchise territories, we are subject to exposure resulting from changes in currency exchange
rates.  Currency exchange rates are influenced by a variety of economic factors including local inflation, growth, interest rates and
governmental actions, as well as other factors.  We currently do not hedge the translation risks of investments in our international
operations.  Any positive cash flows generated by international operations have been reinvested in the operations or used to repay
intercompany loans.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|International operations, based on net sales, represented approximately 14 percent of our total operations in the first quarter of
2004. A significant portion of the net sales in the Caribbean markets, specifically Puerto Rico, are denominated in U.S. dollars,
which is Puerto Ricos functional currency. Changes in currency exchange rates impact the translation of the results of certain
international operations from their local currencies into U.S. dollars. If the currency exchange rates had changed by five percent in
the first quarter of 2004, we estimate the impact on reported operating income for those periods would not have been significant. Our
estimate reflects the fact that a portion of the international operations costs are denominated in U.S. dollars, including
concentrate purchases. This estimate does not take into account the possibility that rates can move in opposite directions and that
gains in one category may or may not be offset by losses from another category.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Item 4.      Controls and Procedures.
|-------------------------------------

|We maintain a system of disclosure controls and procedures that is designed to provide reasonable assurance that information, which
is required to be disclosed, is accumulated and communicated to management timely.  At the end of the period covered by this
report, we carried out an evaluation, under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, our Chief Executive
Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective in timely alerting
them to material information relating to us required to be included in our periodic
SEC filings.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|During the first quarter of 2004,
there were no significant changes in our internal control over financial reporting or in other
factors that have materially affected, or are reasonably likely to materially affect, our
internal control over financial reporting.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|23
|--

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|PART II-OTHER INFORMATION
|-------------------------

|Item 1.      Legal Proceedings.
|-------------------------------

|No material changes to be reported for the first quarter of 2004.
|-----------------------------------------------------------------

|Item 6.      Exhibits and Reports on Form 8-K
|---------------------------------------------

|(a).      Exhibits.
|-------------------

|See Exhibit Index.
|--------------------

|(b).      Reports on Form 8-K.
|------------------------------

| | On February 4, 2004, we furnished a Current Report with regards to our press release dated February 4, 2004, PepsiAmericas Reports
21.5 Percent Net Income Growth for the Full Year of 2003.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|24
|--

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|SIGNATURE
|---------

|Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | PEPSIAMERICAS, INC.
| |  | -------------------

|Dated: | May 11, 2004 | By: | /s/ G. MICHAEL DURKIN, JR.                                          
|------ | ------------ | --- | --------------------------------------------------------------------
|       |              |     |                                                                     
|       |              |     | G. Michael Durkin, Jr.                                              
|       |              |     | Executive Vice President
                and Chief Financial Officer
|       |              |     | (As Chief Accounting
                Officer and Duly               
|       |              |     | Authorized Officer
                of PepsiAmericas, Inc.)          

|25
|--

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|EXHIBIT INDEX
|-------------

|ExhibitNumber | Description of Exhibit
|------------- | ----------------------

|31.1 | Chief Executive Officer
        Certification pursuant to Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|31.2 | Chief Financial Officer
        Certification pursuant to Exchange Act Rule 13a-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------

|32.1 | Chief Executive Officer
        Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|32.2 | Chief Financial Officer
        Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------

|26
|--