<PAGE>


                               PEPSIAMERICAS, INC.
                                    FORM 10-Q
                               FIRST QUARTER 2001



                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q
(Mark One)

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

      For the quarterly period ended June 29, 2002
                                     -------------

/ /   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                         (I.R.S. Employer
incorporation or organization)                       Identification Number)


3880 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) 661-3883


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   / /

As of July 31, 2002, the Registrant had 153,811,425 outstanding shares
(excluding treasury shares) of common stock, par value $0.01 per share, the
Registrant's only class of common stock.

<PAGE>

                               PEPSIAMERICAS, INC.
                                    FORM 10-Q
                               SECOND QUARTER 2002

                                    CONTENTS

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                       11
          Item 3. Quantitative and Qualitative Disclosures About
                   Market Risk                                               17

PART II   OTHER INFORMATION
          Item 1. Legal Proceedings                                          19
          Item 4. Submission of Matters to a Vote of Security Holders        19
          Item 5. Other                                                      20
          Item 6. Exhibits                                                   20

SIGNATURE                                                                    21

CERTIFICATIONS                                                               21

                                       1
<PAGE>
                              PEPSIAMERICAS, INC.
                                   FORM 10-Q
                              SECOND QUARTER 2002

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

<TABLE>
<CAPTION>
                                                              Second Quarter                        First Half
                                                        --------------------------         --------------------------
                                                           2002             2001              2002             2001
                                                        ---------        ---------         ---------        ---------
<S>                                                     <C>              <C>               <C>              <C>
Net sales                                               $   884.7        $   856.8         $ 1,621.6        $ 1,562.2
Cost of goods sold                                          524.3            513.8             967.3            942.1
                                                        ---------        ---------         ---------        ---------
   Gross profit                                             360.4            343.0             654.3            620.1
Selling, delivery and administrative expenses               253.0            237.2             487.9            459.5
Amortization expense                                           --             12.2                --             24.5
Special charges                                                --               --                --              4.6
Gain on pension curtailment                                    --               --                --             (8.9)
                                                        ---------        ---------         ---------        ---------
   Operating income                                         107.4             93.6             166.4            140.4
Interest expense, net                                       (19.2)           (24.6)            (37.4)           (49.1)
Other income (expense), net                                   1.6             (1.1)             (0.8)             0.4
                                                        ---------        ---------         ----------       ---------
   Income before income taxes                                89.8             67.9             128.2             91.7
Income taxes                                                 35.0             32.5              50.0             43.5
                                                        ---------        ---------         ---------        ---------
   Income from continuing operations                         54.8             35.4              78.2             48.2
Loss from discontinued operations, after taxes               (6.0)              --              (6.0)              --
                                                        ---------        ---------         ---------        ---------
   Net income                                           $    48.8        $    35.4         $    72.2        $    48.2
                                                        =========        =========         =========        =========

Weighted average common shares:
   Basic                                                    153.8            156.3             153.7            156.1
   Incremental effect of stock options                        1.0              0.7               0.6              0.8
                                                        ---------        ---------         ---------        ---------
   Diluted                                                  154.8            157.0             154.3            156.9
                                                        =========        =========         =========        =========

Income (loss) per share - basic:
   Continuing operations                                $    0.36        $    0.23         $    0.51        $    0.31
   Discontinued operations                                  (0.04)              --             (0.04)              --
                                                        ---------        ---------         ---------        ---------
   Net income                                           $    0.32        $    0.23         $    0.47        $    0.31
                                                        =========        =========         =========        =========

Income (loss) per share - diluted:
   Continuing operations                                $    0.35        $    0.23         $    0.51        $    0.31
   Discontinued operations                                  (0.03)              --             (0.04)              --
                                                        ---------        ---------         ---------        ---------
   Net income                                           $    0.32        $    0.23         $    0.47        $    0.31
                                                        =========        =========         =========        =========

Cash dividends per share                                $      --        $      --         $    0.04        $    0.04
                                                        =========        =========         =========        =========

</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       2
<PAGE>
                              PEPSIAMERICAS, INC.
                                   FORM 10-Q
                              SECOND QUARTER 2002

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      (in millions, except per share data)

<TABLE>
<CAPTION>
                                                                                End of               End of
                                                                            Second Quarter        Fiscal Year
                                                                                 2002                 2001
                                                                              ----------           ----------
                                                                              (unaudited)
<S>                                                                           <C>                  <C>
ASSETS:
Current assets:
   Cash and equivalents                                                       $     82.8           $     64.4
   Receivables                                                                     267.7                197.1
   Inventories                                                                     188.6                173.4
   Other current assets                                                             60.5                 45.9
                                                                              ----------           ----------
     Total current assets                                                          599.6                480.8
Property (at cost)                                                               1,913.1              1,821.0
Accumulated depreciation                                                          (809.1)              (753.9)
                                                                              ----------           ----------
   Net property                                                                  1,104.0              1,067.1
                                                                              ----------           ----------
Intangible assets, net                                                           1,753.3              1,749.3
Investments and other assets                                                       128.9                122.1
                                                                              ----------           ----------
   Total assets                                                               $  3,585.8           $  3,419.3
                                                                              ==========           ==========

LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
   Short-term debt, including current maturities of long-term debt            $    540.6           $    255.2
   Payables                                                                        232.9                216.5
   Other current liabilities                                                       188.7                181.0
                                                                              ----------           ----------
     Total current liabilities                                                     962.2                652.7
                                                                              ----------           ----------
Long-term debt                                                                     819.0              1,083.4
Deferred income taxes                                                               93.8                 68.9
Other liabilities                                                                  205.4                184.0
Shareholders' equity:
   Preferred stock ($0.01 par value, 12.5 million shares authorized;
     no shares issued)                                                                --                   --
   Common stock ($0.01 par value, 350 million shares authorized;
     167.5 million shares issued-2002 and 167.6 million shares
     issued-2001)                                                                1,538.1              1,546.7
   Retained income                                                                 230.5                164.4
   Unearned stock-based compensation                                               (10.8)                (1.1)
   Accumulated other comprehensive loss:
     Cumulative translation adjustment                                             (16.1)               (25.1)
     Net unrealized investment and hedging losses                                   (7.2)                (4.7)
     Minimum pension liability                                                      (4.1)                (4.1)
                                                                              ----------           ----------
       Accumulated other comprehensive loss                                        (27.4)               (33.9)
                                                                              ----------           ----------
   Treasury stock (13.7 million shares - 2002 and 14 million
     shares - 2001)                                                               (225.0)              (245.8)
                                                                              ----------           ----------
Total shareholders' equity                                                       1,505.4              1,430.3
                                                                              ----------           ----------
   Total liabilities and shareholders' equity                                 $  3,585.8           $  3,419.3
                                                                              ==========           ==========
</TABLE>

See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>
                              PEPSIAMERICAS, INC.
                                   FORM 10-Q
                              SECOND QUARTER 2002

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

<TABLE>
<CAPTION>
                                                                                             First Half
                                                                                  -------------------------------
                                                                                     2002                 2001
                                                                                  ----------           ----------
<S>                                                                               <C>                  <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Income from continuing operations                                                 $     78.2           $     48.2
Adjustments to reconcile to net cash provided by operating activities:
   Depreciation and amortization                                                        80.0                 99.0
   Deferred income taxes                                                                25.5                 13.5
   Gain on pension curtailment                                                            --                 (8.9)
   Gain on sale of investment                                                           (3.5)                  --
   Special charges                                                                        --                  4.6
   Cash outlays related to special charges                                              (6.3)               (15.6)
   Other                                                                                 4.5                 (3.5)
Changes in assets and liabilities, exclusive of acquisitions and divestitures:
   Increase in receivables                                                             (70.7)               (44.2)
   Increase in inventories                                                             (15.0)               (27.7)
   Increase in payables                                                                 17.0                 32.6
   Net change in other assets and liabilities                                           (7.8)                 7.0
                                                                                  ----------           ----------
     Net cash provided by operating activities                                         101.9                105.0
                                                                                  ----------           ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
Franchises and companies acquired, net of cash acquired                                 (2.9)                (5.1)
Capital investments, net of proceeds from asset sales                                 (106.1)               (90.2)
Proceeds from investment sale                                                           26.5                  1.9
                                                                                  ----------           ----------
   Net cash used in investing activities                                               (82.5)               (93.4)
                                                                                  ----------           ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) of short-term debt                                          14.4               (182.3)
Proceeds from issuance of long-term debt                                                  --                352.7
Repayment of long-term debt                                                               --               (129.3)
Dividends                                                                               (6.1)                (6.2)
Treasury stock purchases                                                                (3.0)                  --
Issuance of common stock                                                                 4.0                  8.4
                                                                                  ----------           ----------
   Net cash provided by financing activities                                             9.3                 43.3
                                                                                  ----------           ----------

Net cash used in discontinued operations                                               (10.5)                (5.4)
Effects of exchange rate changes on cash and equivalents                                 0.2                   --
                                                                                  ----------           ----------
Change in cash and equivalents                                                          18.4                 49.5
Cash and equivalents at beginning of year                                               64.4                 51.2
                                                                                  ----------           ----------
Cash and equivalents at end of first half                                         $     82.8           $    100.7
                                                                                  ==========           ==========

</TABLE>
See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>
                              PEPSIAMERICAS, INC.
                                   FORM 10-Q
                              SECOND QUARTER 2002

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    The condensed consolidated financial statements included herein have been
      prepared by PepsiAmericas, Inc. (the "Company") without audit. Certain
      information and note 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 the
      Company believes 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 the Company's Annual
      Report on Form 10-K for the fiscal year 2001. 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.

2.    The Company manufactures, packages, sells and distributes carbonated and
      non-carbonated Pepsi-Cola beverages and a variety of other beverages in
      the United States, Central Europe and the Caribbean. The Company is the
      number-two anchor bottler in the Pepsi system and accounts for about 21
      percent of all Pepsi-Cola products sold in the United States. The Company
      operates in a significant portion of an 18 state region, primarily in the
      Central and Midwestern United States. Outside the United States, the
      Company operates in the Central European markets in Poland, Hungary, the
      Czech Republic and the Republic of Slovakia and in the Caribbean markets
      in Puerto Rico, Jamaica, the Bahamas, Trinidad and Tobago, and Barbados.
      The Company serves areas with a total population of more than 117 million
      people, and its business is highly seasonal. PepsiCo, Inc. holds a 37.3
      percent equity interest in the Company.

      Beginning in the second quarter of 2002, the Company began providing a
      further breakdown of information related to its international markets.
      This change was made to provide more insight into the results of both the
      Central European and Caribbean operations.

      The following presents selected financial information related to the
      Company's geographic segments (in millions):
<TABLE>
<CAPTION>

                                                  Second Quarter                           First Half
                                         -------------------------------       -------------------------------
                                              2002               2001              2002               2001
                                         ------------       ------------       ------------       ------------
       <S>                               <C>                <C>                <C>                <C>
       Net sales:
        Domestic                         $      753.6       $      737.8       $    1,394.8       $    1,352.2
        Central Europe                           87.0               75.5              144.4              128.4
        Caribbean                                44.1               43.5               82.4               81.6
                                         ------------       ------------       ------------       ------------
          Total                          $      884.7       $      856.8       $    1,621.6       $    1,562.2
                                         =============      ============       ============       ============

       Operating income (loss):
        Domestic                         $      107.8       $       95.0       $      177.8       $      154.2
        Central Europe                            1.3               (0.3)              (7.4)             (11.7)
        Caribbean                                (1.7)              (1.1)              (4.0)              (2.1)
                                         ------------       ------------       ------------       ------------
          Total                          $      107.4       $       93.6       $      166.4       $      140.4
                                         ============       ============       ============       ============
</TABLE>


                                       5
<PAGE>



                                             End of            End of
                                         Second Quarter      Fiscal Year
                                              2002               2001
                                         -------------      -------------

       Total assets:
         Domestic                        $     3,043.6      $     2,931.9
         Central Europe                          282.9              236.5
         Caribbean                               138.0              139.5
                                         -------------      -------------
        Total operating                        3,464.5            3,307.9
       Non-operating                             121.3              111.4
                                         -------------      -------------
          Total                          $     3,585.8      $     3,419.3
                                         =============      =============


3.    The Company's fiscal year consists of 52 or 53 weeks ending on the
      Saturday closest to December 31; fiscal 2001 ended on December 29, 2001.
      The Company's second quarters of 2002 and 2001 were based on the thirteen
      weeks ended June 29, 2002 and June 30, 2001, respectively.

4.    In July 2001, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other
      Intangible Assets," which changes the accounting for goodwill from an
      amortization method to impairment-only approach. This change applies to
      goodwill and other intangible assets with indefinite lives. The Company
      adopted SFAS No. 142 effective the beginning of 2002 and has ceased
      amortization of substantially all intangible assets beginning in the first
      quarter of 2002. Had SFAS No. 142 been in effect in the beginning of
      fiscal year 2001, the Company estimates that net income would have been
      approximately $49.4 million ($0.31 per diluted share) and $71.7 million
      ($0.46 per diluted share), for the second quarter and first half of 2001,
      respectively. The Company has completed the initial impairment review
      required by SFAS No. 142 and determined that goodwill was not impaired.

      As of the end of second quarter of 2002, goodwill by reportable segment
      was as follows (in millions):

                  Domestic                           $   1,702.0
                  Central Europe                            28.9
                  Caribbean                                 16.9
                                                     -----------
                  Total goodwill                     $   1,747.8
                                                     ===========

      There were no material changes in the carrying amount of goodwill during
      the first half of 2002. Intangible assets include various distribution and
      non-compete agreements, and the pension intangible asset.

5.    During the first quarter of 2001, the Company reached an agreement with
      Crescent Distributing, LLC ("Crescent"), a wholly-owned subsidiary of
      Poydras Street Investors LLC ("Poydras"). Under the agreement, the joint
      venture between the Company and Poydras was terminated with Crescent
      retaining sole ownership of the rights to the beer operations and related
      assets and the Company assuming sole ownership of the rights to the soft
      drink operations and related assets. The results derived from the beer
      operations were not material to the Company's overall business.

                                       6
<PAGE>
6.    The Company's comprehensive income is as follows (in millions):
<TABLE>
<CAPTION>
                                                              Second Quarter                   First Half
                                                        --------------------------    --------------------------
                                                             2002          2001           2002           2001
                                                        -----------    -----------    -----------    -----------
      <S>                                               <C>            <C>            <C>            <C>
      Net income                                        $      48.8    $      35.4    $      72.2    $      48.2
      Foreign currency translation adjustment                  12.0            2.2            9.0            0.5
      Net unrealized investment and cash flow
       hedging gains (losses)                                  (2.8)           3.8           (2.5)           3.3
                                                        -----------    -----------    -----------    -----------
       Comprehensive income                             $      58.0    $      41.4    $      78.7    $      52.0
                                                        ===========    ===========    ===========    ===========
</TABLE>

      Net unrealized investment and cash flow hedging gains (losses) are
      presented net of tax benefit of $1.6 million in the second quarter of 2002
      and $1.2 million in the first half of 2002, respectively, compared to $2.7
      million and $2.3 million tax expense in the comparable periods of 2001.

7.    Interest expense, net, is comprised of the following (in millions):
<TABLE>
<CAPTION>
                                                Second Quarter                             First Half
                                         -------------------------------       --------------------------------
                                              2002               2001               2002               2001
                                         -------------      -------------      -------------      -------------
      <S>                                <C>                <C>                <C>                <C>
      Interest expense                   $       (19.4)     $       (24.8)     $       (37.7)     $       (50.5)
      Interest income                              0.2                0.2                0.3                1.4
                                         -------------      -------------      -------------      -------------
       Interest expense, net             $       (19.2)     $       (24.6)     $       (37.4)     $       (49.1)
                                         =============      =============      =============      =============
</TABLE>

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

                                                             First Half
                                                    --------------------------
                                                      2002              2001
                                                    -------           --------

      Interest paid                                 $  36.8            $  42.6
      Interest received                                 0.3                0.6
      Income taxes paid, net of refunds                19.7                7.4

9.    As of the end of the second quarter of 2002, the components of inventory
      were approximately 45 percent comprised of raw materials and supplies and
      55 percent comprised of finished goods and were consistent with the mix of
      inventory at the end of fiscal year 2001.

10.   In the fourth quarter of 2001, the Company recorded special charges
      totaling $9.2 million primarily for severance costs and other costs
      related to changing the Company's marketing and distribution strategy in
      Hungary, as well as for the write-down of marketing equipment in the U.S.
      The write-down of marketing equipment was recorded in conjunction with the
      start-up of the Ft. Wayne, Indiana refurbishment operations.

      In the first quarter of 2001, the Company recorded a special charge of
      $4.6 million related to further organization changes resulting from the
      transaction with the former PepsiAmericas which was principally composed
      of severance and related benefits.

      The following table summarizes activity associated with the special
      charges (in millions):
<TABLE>
<CAPTION>
                                                                     2001         2000
                                                                   Charges       Charge        Total
                                                                  --------      --------     --------
      <S>                                                         <C>           <C>          <C>
      Accrued liabilities as of fiscal year end 2001              $    6.4      $    1.7     $    8.1
      Expenditures for employee-related costs                         (3.1)         (1.5)        (4.6)
                                                                  --------      --------     --------
      Accrued liabilities at the end of the second
        quarter of 2002                                           $    3.3      $    0.2     $    3.5
                                                                  ========      ========     ========
</TABLE>

                                       7
<PAGE>
       The 2001 and 2000 charges affected approximately 525 employees, of which
       167 remain as of the end of the second quarter of 2002. The accrued
       liabilities remaining as of the end of the second quarter of 2002 are
       primarily comprised of deferred severance payments and certain employee
       benefits. The Company expects to pay a significant portion of the $3.5
       million of employee related costs, using cash from operations, during the
       next 12 months; accordingly, such amounts are classified as other current
       liabilities.

11.   In connection with the integration of former Whitman Corporation and
      former PepsiAmericas domestic benefit plans during the first quarter of
      2001, the Company amended its pension plans to freeze pension benefit
      accruals for all salaried and non-union employees effective December 31,
      2001. Employees age 50 or older with 10 or more years of vesting service
      were grandfathered such that they will continue to accrue benefits after
      December 31, 2001 based on their final average pay as of December 31,
      2001. As a result of the curtailment, the Company recognized a one-time
      curtailment gain of $8.9 million ($5.4 million after taxes). Beginning
      January 1, 2002, the existing domestic salaried and non-union pension
      plans were replaced by an additional Company contribution to the 401(K)
      plan.

12.   In the second quarter of 2002, the Company recorded a $3.5 million gain
      related to the sale of its interest in a parcel of land in downtown
      Chicago. The gain is reflected in "Other income (expense), net." The
      Company received $26.5 million in cash and a $12 million promissory note
      collateralized by a subordinated mortgage related to the sale. An
      additional $1.4 million, otherwise payable to the Company, was held back
      in escrow, a portion of which is expected to be recovered when certain
      conditions are met related to existing environmental matters. The
      promissory note and escrow balance were recorded at their estimated
      realizable value net of reserves of approximately $6.2 million. In
      addition, the Company recorded $2.5 million of liabilities, net, for
      certain indemnifications made pursuant to the sale agreement.

13.   The Company uses financial instruments to hedge against volatility in
      future cash flows on anticipated aluminum can purchases, the prices of
      which are indexed to aluminum market prices. Realized gains and losses on
      aluminum hedge contracts are deferred until the related finished products
      are sold. See "Quantitative and Qualitative Disclosures About Market Risk
      - Commodity Prices." Effective at the beginning of fiscal 2001, the
      Company adopted SFAS No. 133, "Accounting for Derivative Instruments and
      Hedging Activities," as amended by SFAS Nos. 137 and 138. In connection
      with the adoption, the Company recognized an asset for the fair value of
      aluminum hedges of $1.4 million and reclassified $0.4 million of
      previously deferred hedging losses to accumulated other comprehensive
      loss. Accordingly, the impact of adopting SFAS No. 133, as amended, was an
      increase of $1 million in accumulated other comprehensive income, which
      was reclassified into cost of goods sold during fiscal 2001.

      During the fourth quarter of 2001, the Company also began using financial
      instruments to hedge against volatility in future cash flows on
      anticipated fuel purchases, the prices of which are indexed to fuel market
      prices. Realized gains and losses on fuel hedge contracts are deferred
      until the fuel is purchased. See "Quantitative and Qualitative Disclosures
      About Market Risk - Commodity Prices."

      The Company has hedged a portion of its anticipated aluminum can and fuel
      purchases through the fourth quarters of 2004 and 2002, respectively. As
      of the end of the second quarter of 2002, the Company had deferred $2.5
      million of losses in accumulated other comprehensive loss, a majority of
      which will be reclassified into earnings during the next 18 months.

      During the third quarter of 2001, the Company entered into interest rate
      swap contracts with an aggregate notional amount of $200 million to
      convert a portion of its fixed rate debt to floating rate debt, with the
      objective of reducing overall borrowing costs. These swaps are accounted
      for 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 at the end of the second quarter
      of 2002 was $6.9 million, which is reflected in "Other liabilities" on the
      Condensed Consolidated Balance Sheet, with a corresponding decrease in
      "Long-term debt" representing the change in fair value of the 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.

                                      8

<PAGE>
14.   The Company continues 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 the Company's potential expenses for
      complying with its indemnification obligations. The assessment and
      determination of expenses for cleanup at the various sites involved are
      inherently speculative during the early stages, as is the projection of
      future claims. The amount of the expense also is subject to various
      factors, including possible insurance recoveries and the allocation of
      liabilities among many other potentially responsible and financial viable
      parties.

      In the fourth quarter of fiscal year 2001, the Company engaged outside
      consultants to assist in estimating the amount of expense the Company may
      incur due to the environmental liabilities arising from sites owned or
      operated by prior subsidiaries. The outside consultants provided the
      Company with an estimate of the most likely costs of remediating the
      sites. Their estimates were based on their evaluations of the
      characteristics and parameters of the sites, including results from field
      inspections, test borings and water flows. Their estimates are based upon
      the use of current technology and remediation techniques, and do not take
      into consideration any inflationary trends upon such claims or expense.
      Based upon these estimates, the Company recorded a charge to discontinued
      operations in the fourth quarter of 2001 of $111 million ($71 million
      after taxes).

      During the second quarter of 2000, proceeds of a settlement of insurance
      policies issued to a prior subsidiary was placed in a trust (the "Trust").
      The Trust documents specify that funds in the Trust would be used to pay
      future liabilities of the prior subsidiaries. Monies paid by the Trust
      thereby would reduce the indemnification obligations of the Company. As of
      fiscal year end 2001, the Company had $131.2 million accrued to cover
      potential indemnification obligations. As of fiscal year end 2001, the
      Company had $131.2 million accrued to cover potential indemnification
      obligations, which amount excluded expenses for which the Trust was
      expected to be responsive. The amount also excluded any possible insurance
      recoveries under policies that were in place prior to recently purchased
      insurance policies described below. The accrual included estimated
      expenses for the remediation of identified sites, payments to third
      parties for claims and expenses, and the expenses of on-going evaluations
      and litigation. The Company expects a significant portion of the accrued
      liabilities will be disbursed during the next 10 years.

      The significant sites included in the aggregate accrued liabilities the
      Company has recorded are described more fully in the Company's Annual
      Report on Form 10-K for the fiscal year 2001. No significant changes in
      the status of those sites occurred and no significant new sites were
      discovered during the first half of 2002.

      During the second quarter of 2002, as part of a comprehensive program
      concerning environmental liabilities related to the former Whitman
      Corporation subsidiaries, the Company purchased new insurance coverage
      related to the known sites previously owned and operated by Pneumo Abex
      and its subsidiaries, along with other sites which Pneumo Abex or one of
      its subsidiaries may have owned or operated. In addition, the Trust
      purchased insurance coverage and funded coverage for remedial and other
      costs ("finite funding") related to the sites previously owned and
      operated by Pneumo Abex and its subsidiaries. These actions have been
      taken to fund costs associated with the sites previously owned and
      operated by Pneumo Abex and its subsidiaries and to protect against
      additional future costs in excess of a self-insured retention of the
      Company. The amount of self-insured retention (the amount the Company must
      pay before the insurance carrier is obligated to commence payments) is
      $114 million. The Company currently has accrued $90 million which is its
      estimate of the contingent liabilities related to such environmental
      matters. The finite funding of $26 million may be used to pay a portion of
      the $90 million which the Company has accrued, along with previously
      incurred expenses of the Company. Essentially all of the assets of the
      Trust were expended by the Trust in connection with the purchase of the
      insurance coverage and the finite funding and related expenses.

      In conjunction with the purchase of the insurance policies, the Company
      recorded a charge to discontinued operations of $9.8 million, or $6
      million after tax. This charge represented amounts expended by the Company
      and reduction of funds in the Trust available to pay expenses related to
      sites for which the Company has indemnification obligations. Because
      payments by the Trust reduce cash required to be paid by the Company for
      environmental sites for which the Company has indemnification obligations,
      the Company recorded the finite funding in "Investments and other assets."

                                       9
<PAGE>
      The Company has contingent liabilities from various pending claims and
      litigation on a number of matters, including indemnification claims under
      agreements with previously sold subsidiaries for product liability and
      toxic torts. The ultimate liability for these claims cannot be determined.
      In the opinion of management, 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 the Company's financial
      condition, although amounts recorded in a given period could be material
      to the results of operations or cash flows for that period.

      Existing environmental liabilities associated with the Company's
      continuing operations are not material.

15.   Basic earnings per share are based upon the weighted-average number of
      common shares outstanding. Diluted earnings per share assume 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 EPS because the exercise price was greater than the
      average market price of the common shares during the related period:
<TABLE>
<CAPTION>
                                                    Second Quarter                            First Half
                                           -------------------------------        -------------------------------
                                                2002               2001                2002               2001
                                           ------------       ------------        ------------       ------------
   <S>                                     <C>                <C>                 <C>                <C>
      Shares under options outstanding        6,827,446          7,614,439           8,954,450          7,614,439
      Weighted-average exercise price
       per share                           $      18.97       $      18.88        $      17.90       $      18.88
</TABLE>

                                       10
<PAGE>
Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

                          CRITICAL ACCOUNTING POLICIES

      The preparation of the 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 advise of outside experts. For a better understanding of the
Company's significant accounting policies used in preparation of the
Consolidated Financial Statements, please refer to PepsiAmericas annual report
on Form 10-K for the fiscal year 2001. We focus your attention to the following:

      GOODWILL - Beginning in 2002, the Company adopted SFAS No. 142, "Goodwill
and Other Intangible Assets," which changed the accounting for goodwill from an
amortization method to an impairment-only approach. The Company completed its
initial impairment review and determined that goodwill was not impaired. This
review included estimating fair market value using discounted future cash flows
and market multiples, which requires considerable management judgment. A review
of the carrying value of goodwill will be performed on an annual basis, as
required by SFAS No. 142.

      COMMITMENTS AND CONTINGENCIES - The Company continues to be subject to
certain indemnification obligations, under agreements related to previously sold
subsidiaries, including potential environmental liabilities (see Note 14). The
Company has estimated its contingent liability under its indemnification
obligation, which is inherently difficult to estimate. Management has utilized
outside consultants and other professionals to assist with the determination of
its liability.

      INCOME TAXES - Our effective tax rate and the tax bases of our assets and
liabilities reflect our best estimate of the outcome of future tax audits. The
Company has established valuation allowances using management's best judgment
where expected results do not support the realization of deferred tax assets.

                              RESULTS OF OPERATIONS
              2002 SECOND QUARTER COMPARED WITH 2001 SECOND QUARTER

      Due to special charges and other non-recurring items recorded in 2001 and
2002, the Company believes that pro forma results provide a better indication of
current operating trends than reported results. Therefore, included within the
following discussion are explanations of both reported results and pro forma
results. The Company's business is highly seasonal; accordingly, the operating
results of any individual quarter may not be indicative of a full year's
operating results.

      Net sales for the second quarter of 2002 and 2001 were as follows (in
millions):

                                         Reported
                                 -------------------------       Percent
                                    2002           2001          Change
                                 ---------       ---------       ------

      Domestic                   $   753.6       $  737.8           2.1
      Central Europe                  87.0           75.5          15.2
      Caribbean                       44.1           43.5           1.4
                                 ---------       --------
        Total net sales          $   884.7       $  856.8           3.3
                                 =========       ========

      On a reported basis, net sales increased $27.9 million, or 3.3 percent, in
the second quarter of 2002 compared to the second quarter of 2001, primarily
reflecting increased volume in both the domestic and Central Europe markets and
improved pricing in the domestic markets, certain Central European markets and
the Caribbean markets.

                                       11
<PAGE>
      The growth in domestic sales of $15.8 million resulted from improved
pricing, up 1.9 percent, as well as increased volume, up 0.9 percent. The
improved pricing included a 1.6 percent improvement attributed to rate increases
and 0.3 percent associated with changes in package mix. The domestic volume
growth in the second quarter of 2002 was impacted by the timing of the Easter
holiday, which fell in and benefited volume growth in the first quarter of 2002,
compared to similar sales occurring in the second quarter of 2001. This timing
change is estimated to have lowered second quarter volume growth by 1.3 percent.
In the current quarter, trademark Pepsi volume declined 2.9 percent, primarily a
function of the Easter timing. Offsetting the decline in trademark Pepsi was
growth in Aquafina, up nearly 48 percent; trademark Dew, up 1.4 percent due to
incremental growth contributed by Code Red; other flavored soft drinks and new
age beverages, up 14.9 percent, led by Sierra Mist; and Dr Pepper, up in the
strong single-digits. From a package standpoint, growth in the second quarter
was entirely attributed to multi-serve 24 oz. PET packages. Can volume was
essentially flat and total single serve soft drink packages declined. The growth
rates in cans and single serve soft drink packages were adversely impacted by
the timing of the Easter holiday and the poor weather conditions in May
experienced by several domestic markets. From a channel perspective, volume
growth reflected growth in the large format channel, led by supermarkets and
supercenters, offset by declines in the small format and on-premise channels.

      The growth in Central European sales of $11.5 million, or 15.2 percent,
resulted from volume growth of 16.7 percent and improved pricing in certain
markets. Approximately one-third of the revenue improvement was attributable to
the favorable impact from foreign exchange rates. All four markets in Central
Europe experienced double-digit volume growth, and, except for Poland, had
strong double-digit sales growth and improved pricing. Competitive pricing
pressures adversely affected Poland's sales growth and pricing in the quarter.
The Central European sales trends were also affected by essentially unchanged
contract sales in quarter over quarter comparisons.

      The growth in Caribbean sales of $0.6 million, or 1.4 percent, resulted
from improved pricing of 5.4 percent offset by a decline in volume of 3.7
percent. The decline in volume was principally attributed to the operations in
Puerto Rico.

      The consolidated gross profit margin on a reported basis increased 70
basis points to 40.7 percent of sales in the second quarter of 2002 compared
with the second quarter of 2001. The improvement was primarily attributed to
improved margins in the domestic markets, which resulted from improved pricing
and overall flat growth in ingredient and packaging costs. In Central Europe,
the gross profit margin improved 1.1 percent and benefited from a favorable
foreign exchange impact, while in the Caribbean markets the overall gross profit
margin declined slightly.

      Selling, delivery and administrative ("SD&A") expenses represented 28.6
percent of sales in the second quarter of 2002 compared with 27.7 percent in the
second quarter of 2001. The increase in the percentage of SD&A expenses is due,
in part, to costs incurred in the current quarter associated with the labor
strike in the Chicago market. Costs associated with that strike were estimated
to be $2.8 million. SD&A as a percent of sales increased 90 basis points in the
domestic markets to 27.2 percent, again reflecting costs associated with the
strike, which accounted for nearly half of the percentage increase. Other
factors contributing to the increase in SD&A costs included expenses associated
with the next generation selling system implementation and the roll-out of
additional components of the enterprise-wide resource planning system, primarily
inventory and demand planning applications. The increase also reflected higher
depreciation associated with investments in technology and cold drink equipment.
SD&A costs in Central Europe, despite the unfavorable impact of foreign
currency, declined as a percent of sales, while costs in the Caribbean markets
increased as a percent of sales.

      Operating income (loss) for the second quarter of 2002 and 2001 was as
follows (in millions):
<TABLE>
<CAPTION>
                                           Reported                                   Pro Forma
                                    ---------------------      Percent          ---------------------      Percent
                                      2002         2001        Change             2002         2001        Change
                                    --------     --------      ------           --------     --------      ------
      <S>                           <C>          <C>           <C>              <C>          <C>           <C>
      Domestic                      $  107.8     $   95.0       13.5            $  107.8     $  106.8        0.9
      Central Europe                     1.3         (0.3)        --                 1.3         (0.1)        --
      Caribbean                         (1.7)        (1.1)     (54.5)               (1.7)        (0.9)     (88.9)
                                    --------     --------                       --------     --------
        Total operating income      $  107.4         93.6       14.7            $  107.4     $  105.8        1.5
                                    ========     ========                       ========     ========
</TABLE>

                                       12
<PAGE>
      Reconciliation of reported results to pro forma results for the second
quarter of 2001 was as follows (in millions):

<TABLE>
<CAPTION>
                                                            2001
                                       ------------------------------------------------
                                                     Central
                                       Domestic       Europe     Caribbean       Total
                                       --------     ---------    ---------     --------
      <S>                              <C>          <C>          <C>           <C>
      Reported operating income        $    95.0    $    (0.3)   $    (1.1)    $   93.6
      Exclude amortization                  11.8          0.2          0.2         12.2
                                       ---------    ---------    ---------     --------
        Pro forma operating income     $   106.8    $    (0.1)   $    (0.9)    $  105.8
                                       =========    =========    =========     ========
</TABLE>
      Pro forma operating results assume amortization of goodwill and other
intangible assets with indefinite lives ceased as of the beginning of 2001.

      In the second quarter of 2002, reported operating income increased $13.8
million, or 14.7 percent. The improvement in reported domestic and Central
European operating income included the benefit of the change in accounting for
goodwill from an amortization method to an impairment-only approach. The Company
ceased amortizing goodwill and other intangible assets with indefinite lives at
the beginning of fiscal year 2002, while the previous year operating income
included amortization expense of $12.2 million. On a pro forma basis, assuming
the change in accounting for goodwill occurred at the beginning of 2001,
operating income increased $1.6 million, or 1.5 percent, which included the
non-recurring costs associated with the Chicago strike of $2.8 million. On a pro
forma basis, domestic markets increased operating income by $1 million, or 0.9
percent, and Central Europe recorded an operating profit of $1.3 million, or
$1.4 million better than the previous year. The pro forma operating income in
Central Europe reflected the benefits of favorable foreign exchange rates, which
were responsible for about half of the improvement. In the Caribbean markets,
pro forma operating losses increased by $0.8 million reflecting the decline in
volume and increased SD&A costs.

      Net interest expense decreased $5.4 million in the second quarter of 2002
to $19.2 million. This decrease was principally due to lower rates on short-term
borrowings. The Company also adjusted the mix of fixed rate versus floating rate
debt using interest rate swap agreements, which were favorable in the current
quarter.

      The Company reported other income of $1.6 million in the second quarter of
2002 compared to expense of $1.1 million reported in the second quarter of 2001.
Included in other income in the second quarter of 2002 was a $3.5 million pretax
gain related to the sale of a parcel of land in downtown Chicago.

      The Company's effective tax rate in the second quarter of 2002 was 39
percent compared to 47.9 percent in the second quarter of 2001. The decrease in
the effective tax rate in the second quarter of 2002 was primarily due to the
Company ceasing amortization of goodwill and other intangible assets with
indefinite lives. A majority of this amortization expense was not deductible for
tax purposes.

                              RESULTS OF OPERATIONS
                  2002 FIRST HALF COMPARED WITH 2001 FIRST HALF

      Due to the disposition of the beer business, as well as special charges
and other non-recurring items recorded in 2002 and 2001, the Company believes
that pro forma results provide a better indication of current operating trends
than reported results. Therefore, included within the following discussion are
explanations of both reported results and pro forma results. The Company's
business is highly seasonal; accordingly, the operating results for the first
half may not be indicative of a full year's operating results.

                                       13
<PAGE>
      Net sales for the first half of 2002 and 2001 were as follows (in
millions):


                                             Reported
                                    -------------------------       Percent
                                       2002           2001          Change
                                    ---------       ---------       ------

      Domestic                      $ 1,394.8       $ 1,352.2          3.2
      Central Europe                    144.4           128.4         12.5
      Caribbean                          82.4            81.6          1.0
                                    ---------       ---------
        Total net sales             $ 1,621.6       $ 1,562.2          3.8
                                    =========       =========

      Net sales increased $59.4 million, or 3.8 percent, in the first half of
2002 compared to the first half of 2001, primarily reflecting increased volume
in both the domestic and Central European markets and improved pricing in the
domestic markets. Excluding sales of $11 million associated with the beer
business divested in the first quarter of 2001, sales increased $70.4 million,
or 4.5 percent.

      Excluding sales associated with the divested beer business, domestic sales
increased $53.6 million, or 4 percent, resulting from improved pricing, up 2
percent, as well as increased volume of 2.7 percent. The improved pricing
included a 1.7 percent improvement attributed to rate increases and 0.3 percent
associated with package mix. In the first half, trademark Pepsi volume was
essentially flat compared to the previous year, which benefited from incremental
volume associated with Pepsi Twist. Contributing to the domestic volume growth
in the first half of 2002 was growth in Aquafina, up nearly 47 percent;
trademark Dew, up 4.4 percent due to incremental growth contributed by Code Red;
other flavored soft drinks and new age beverages, up 12 percent, led by Sierra
Mist; and Dr Pepper up in the strong single-digits. From a package standpoint,
growth in the first half was entirely attributed to can volume, up 2.6 percent,
and multi-serve 24 oz. PET packages, while volume from single serve soft drinks
declined. The decline in single serve soft drinks was due, in part, to lapping
the introduction of single serve Code Red in the second quarter of 2001. From a
channel perspective, volume growth reflected growth in the large format channel,
led by supermarkets and supercenters, and the small format channel, led by
convenience and gas and drug stores, offset by declines in the on-premise
channel.

      The growth in Central European sales of $16.0 million, or 12.5 percent,
resulted from volume growth of 15.7 percent and improved pricing in certain
markets. As noted previously, results in the second quarter of 2002 benefited
from a favorable foreign exchange impact. Consistent with the second quarter of
2002, all four markets in Central Europe experienced double-digit volume growth
in the first half of 2002, and, except for Poland, had strong double-digit sales
growth and improved pricing. Poland, however, still experienced sales growth in
the first half of 2002 despite the competitive pricing pressures.

      The growth in Caribbean sales of $0.8 million, or one percent, resulted
from improved pricing of 6.0 percent offset by a decline in volume of 4.7
percent. The decline in volume was principally attributed to the adverse impact
of a brief strike in Puerto Rico in the first quarter of 2002, as well as the
impact of a continued decline in tourism in the Caribbean markets since
September 2001.

      The consolidated gross profit margin, excluding results of the divested
beer operations, increased 50 basis points to 40.3 percent of sales in the first
half of 2002 compared with the first half of 2001. The improvement was primarily
attributed to improved margins in the domestic markets, which resulted from
improved pricing and overall moderate growth in ingredient and packaging costs.
In Central Europe, the gross profit margin improved 2.5 percent and benefited
from double-digit volume growth and improved pricing, while in the Caribbean
markets the overall gross profit margin declined slightly.

                                       14
<PAGE>
      SD&A expenses in the first half of 2002 increased $28.4 million, or 6.2
percent, compared to the previous year. Excluding results from the divested beer
business, SD&A represented 30.1 percent of sales in the first half of 2002
compared with 29.6 percent in the first half of 2001. SD&A expenses were
impacted by non-recurring costs of $2.8 million incurred in connection with the
labor strike in the Chicago market. These non-recurring costs represented
approximately one-third of the percentage increase, or 20 basis points. SD&A as
a percent of sales increased 60 basis points in the domestic markets to 28.5
percent, reflecting costs associated with the strike. Other factors contributing
to the increase in SD&A costs included expenses associated with the next
generation selling system implementation and the roll-out of additional
components of the enterprise-wide resource planning system, primarily inventory
and demand planning applications. The increase also reflected higher
depreciation associated with investments in technology and cold drink equipment.
SD&A costs in Central Europe, despite the unfavorable impact of foreign
currency, declined in the first half of 2002, while costs in the Caribbean
markets increased as a percent of sales.

      Operating income (loss) for the first half of 2002 and 2001 was as follows
(in millions):
<TABLE>
<CAPTION>
                                            Reported                                   Pro Forma
                                     ---------------------      Percent          ---------------------      Percent
                                       2002         2001        Change             2002         2001        Change
                                     --------     --------      ------           --------     --------      ------
      <S>                            <C>          <C>           <C>              <C>          <C>           <C>

      Domestic                       $  177.8     $  154.2       15.3            $  177.8     $  173.7         2.4
      Central Europe                     (7.4)       (11.7)      36.8                (7.4)       (11.4)       35.1
      Caribbean                          (4.0)        (2.1)     (90.5)               (4.0)        (1.7)     (135.3)
                                     --------     --------                       --------     --------
        Total operating income       $  166.4        140.4       18.5            $  166.4     $  160.6         3.6
                                     ========     ========                       ========     ========
</TABLE>


      Reconciliation of reported results to pro forma results for the first half
of 2001 was as follows (in millions):
<TABLE>
<CAPTION>
                                                              2001
                                        ------------------------------------------------
                                                      Central
                                        Domestic      Europe      Caribbean       Total
                                        --------     ---------    ---------     --------
      <S>                               <C>          <C>          <C>           <C>

      Reported operating income         $  154.2     $   (11.7)   $    (2.1)    $  140.4
      Exclude amortization                  23.8           0.3          0.4         24.5
      Exclude special charges                4.6            --           --          4.6
      Exclude gain on pension
        curtailment                         (8.9)           --           --          8.9
                                        --------     ---------    ---------     --------
        Pro forma operating income      $  173.7     $   (11.4)   $    (1.7)    $  160.6
                                        ========     =========    =========     ========
</TABLE>

      Pro forma operating results exclude the impact of special charges and
other non-recurring items from the first half of 2001. In addition, to improve
comparability, pro forma results assume amortization of goodwill and other
intangible assets with indefinite lives ceased as of the beginning of 2001.

      In the first half of 2002, reported operating income increased $26
million, or 18.5 percent. The improvement in reported domestic and Central
European operating income included the benefit of the change in accounting for
goodwill from an amortization method to an impairment-only approach. The Company
ceased amortizing goodwill and other intangible assets with indefinite lives at
the beginning of fiscal year 2002, while the previous year operating income
included amortization expense of $24.5 million. On a pro forma basis, operating
income increased $5.8 million, or 3.6 percent, which included the non-recurring
costs associated with the Chicago strike of $2.8 million. On a pro forma basis,
domestic markets increased operating income by $4.1 million, or 2.4 percent, and
Central Europe reduced operating losses by $4 million, or 35.1 percent. The
improvement in Central Europe also reflected the benefits of favorable foreign
exchange rates in those markets which was responsible for about one-fifth of the
improvement. In the Caribbean markets, pro forma operating losses increased by
$2.3 million reflecting the decline in volume and increased SD&A costs. As noted
previously, the Caribbean results were adversely affected by the brief strike in
Puerto Rico and the decline in tourism that began and has continued since
September 2001.

                                       15
<PAGE>
      Net interest expense decreased $11.7 million in the first half of 2002 to
$37.4 million. This decrease was principally due to lower rates on short-term
borrowings. The Company also adjusted the mix of fixed rate versus floating rate
debt using interest rate swap agreements, which were favorable in the first half
of 2002.

      The Company reported other expense of $0.8 million in the first half of
2002 compared to income of $0.4 million reported in the first half of 2001.
Included in the results for the first half of 2002 was a pretax gain of $3.5
million resulting from the sale of a parcel of land in downtown Chicago. Results
for the first half of 2001 included the benefit of real estate tax refunds
associated with the Company's non-operating real estate entities.

      The Company's effective tax rate in the first half of 2002 was 39 percent
compared to 47.4 percent in the first half of 2001. The decrease in the
effective tax rate in 2002 was primarily due to the Company ceasing amortization
of goodwill and other intangible assets with indefinite lives. A majority of
this amortization expense was not deductible for tax purposes.

                         LIQUIDITY AND CAPITAL RESOURCES

      Net cash provided by continuing operations decreased by $3.1 million to
$101.9 million in the first half of 2002. This decrease was primarily due to the
impact from the change in primary working capital, in particular receivables.
The increase in receivables in the first half of 2002 was attributed to an
increase in trade receivables in Central Europe associated with the double-digit
increase in sales in the second quarter of 2002. In addition, the increase in
receivables reflected balances remaining from the pre-bankruptcy sales to Kmart,
as well as increased funding receivable balances from PepsiCo. With respect to
the pre-bankruptcy receivables from Kmart, management believes the allowances
established in conjunction with other accruals adequately cover any potential
exposure.

      Investing activities in the first half of 2002 included $2.9 million of
cash paid to acquire full line vending businesses. Investing activities in the
first half of 2001 included $5.1 million paid to acquire the minority partner's
interest in the soft drink operations in New Orleans, as well as payments
related to the acquisition of Trinidad and Tobago. The Company made capital
investments of $106.1 million, net of proceeds from asset sales, in its
operations in the first half of 2002 compared with $90.2 million in the first
half of 2001. The increase primarily resulted from investments in manufacturing
capacity, both in the domestic and international operations, as well as
investments in cold drink equipment and the development of a next generation
selling system. The Company expects to spend approximately $215 million in 2002
for its capital projects. Proceeds from the sale of investments in the first
half of 2002 were from the sale of a parcel of land in downtown Chicago and in
the first half of 2001 related to other miscellaneous land sales associated with
the Company's non-operating real estate subsidiaries.

      The Company's total debt increased $21 million to $1,359.6 million at the
end of the second quarter of 2002, from $1,338.6 million at the end of fiscal
2001. During February and March 2001, the Company issued $200 million and $150
million of notes with coupon rates of 5.95 percent due 2006 and 5.79 percent due
2013, respectively. The notes issued in March 2001 will be remarketed in March
2003, at which time the notes will either be mandatorily purchased and reissued
by the underwriter or mandatorily redeemed by the Company. These notes are
included in current maturities in the Condensed Consolidated Balance Sheet at
the end of the second quarter of 2002. Proceeds from these notes were used to
repay outstanding commercial paper. Dividends paid during the first half of 2002
were essentially unchanged from the previous year at $6.1 million compared to
$6.2 million in 2001. The dividend rate of $0.04 per share in 2002 was unchanged
from the previous year. During the second quarter of 2002, the Company
repurchased 0.2 million shares for $3 million, while no repurchases were made in
the first half of 2001. The issuance of common stock from treasury shares for
the exercise of stock options resulted in cash inflows of $4 million in the
first half of 2002, compared to $8.4 million in the first half of 2001.

      The Company has a revolving credit agreement with maximum borrowings of
$500 million, which acts as a back-up for the Company's $500 million commercial
paper program; accordingly, the Company has a total of $500 million available
under the commercial paper program and revolving credit facility combined. Total
commercial paper borrowings were $235.3 million at the end of the second quarter
of 2002. The Company believes that with its existing operating cash flows,
available lines of credit, and the potential for additional debt and equity
offerings, it will have sufficient resources to fund its future growth and
expansion.

                                       16
<PAGE>
      On May 3, 2002, the Company announced that shareholders who elected the
contingent payment alternative in the Company's merger with the former
PepsiAmericas will not receive additional shares of PepsiAmericas common stock
based upon adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) of the territories acquired in the merger for fiscal year
2001. The Company's independent auditors issued a report summarizing their
procedures performed on the Company's calculation of adjusted EBITDA for the
fiscal year 2001. The committee reviewed and accepted the Company's calculation.
As a result, the Company's calculation became final and binding on PepsiAmericas
and each of the contingent payment record holders. In addition, the Company
announced that it expects contingent payment record holders will not receive
additional shares based upon expected adjusted EBITDA of such territories for
fiscal year 2002 or for the three-year period which began on January 2, 2000.
Whether such shares are ultimately issued will be determined in accordance with
the terms of the merger agreement.

                           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 management's 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 adversely 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 Company's 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; and general economic, business and political conditions in the
countries and territories where the Company operates. These events and
uncertainties are difficult or impossible to predict accurately and many are
beyond the Company's control. The Company assumes 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.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

      The Company is 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 the Company's 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. The Company uses swap contracts to hedge price fluctuations for a
portion of its aluminum and fuel requirements over a specified period of time.
Because of the high correlation between commodity prices and the Company's
contractual cost of these products, the Company considers these hedges to be
highly effective. As of the end of the second quarter of 2002, the Company has
hedged a portion of its future aluminum and fuel requirements through the fourth
quarters of 2004 and 2002, respectively.

                                       17
<PAGE>
INTEREST RATES

      In the second quarter of 2002, the risk from changes in interest rates was
not material to the Company's operations because a significant portion of the
Company's debt issues were fixed rate obligations. The Company has entered into
interest rate swaps to convert a portion of its fixed rate debt to floating rate
debt. The Company's 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 second quarter of 2002, a
50 basis point (0.5 percent) change in each of these rates would have had a $0.8
million impact on the Company's second quarter 2002 interest expense. The
Company had cash equivalents throughout the second quarter of 2002, 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 the Company's cash equivalents at the end
of the second quarter of 2002, interest income would not have changed by a
significant amount.

CURRENCY EXCHANGE RATES

      Because the Company operates in international franchise territories, it is
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. The Company currently does not hedge the translation risks of
investments in its 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 sales, represented approximately 15
percent of the Company's total operations in the second quarter of 2002. A
significant portion of the sales in the Caribbean markets, specifically Puerto
Rico, are denominated in U.S. dollars, which is its 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 second quarter of
2002, the Company estimates the impact on reported operating income would not
have been significant. 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.

                                       18
<PAGE>

PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.

      No changes to be reported this quarter.

Item 4.  Submission of Matters to a Vote of Security Holders.

(a)   April 25, 2002 Annual Meeting of Shareholders

(b)   Election of Directors

      The following persons were elected at the Annual Meeting of Shareholders
held on April 25, 2002 to serve as directors for the ensuing year:

           Brenda C. Barnes                    Jarobin Gilbert, Jr.
           Herbert M. Baum                     Victoria B. Jackson
           Richard G. Cline                    Matthew M. McKenna
           Pierre S. du Pont                   Lionell L. Nowell III
           Archie R. Dykes                     Robert C. Pohlad
           Charles W. Gaillard


(c)   Matters Voted Upon

Proposal 1:  Election of Directors

      The following votes were recorded with respect to this proposal:
<TABLE>
<CAPTION>
                                                       Votes For                   Votes Withheld
                                                    --------------                 --------------
           <S>                                        <C>                             <C>

           Brenda C. Barnes                           144,806,551                     1,477,910
           Herbert M. Baum                            144,785,860                     1,498,601
           Richard G. Cline                           144,813,367                     1,471,094
           Pierre S. du Pont                          144,963,159                     1,321,302
           Archie R. Dykes                            144,824,769                     1,459,692
           Charles W. Gaillard                        144,198,225                     2,086,236
           Jarobin Gilbert, Jr.                       144,127,117                     2,157,344
           Victoria B. Jackson                        144,169,317                     2,115,144
           Matthew M. McKenna                         144,959,021                     1,325,440
           Lionell L. Nowell III                      144,929,747                     1,354,714
           Robert C. Pohlad                           145,124,576                     1,159,885
</TABLE>

                                       19
<PAGE>
Proposal 2:  Approval of Independent Public Accountants

      The following votes were recorded with respect thereto:

      Votes for                                  141,674,734
      Votes against                                4,464,824
      Broker non-votes                                     0
      Abstentions                                    144,903

Proposal 3:  Shareholder Proposal

      The following votes were recorded with respect thereto:

      Votes for                                   17,977,522
      Votes against                              117,877,928
      Broker non-votes                             9,866,068
      Abstentions                                    562,943

Item 5.  Other.

      Concurrent with the filing of this report, the Company's CEO and CFO filed
      the certifications required by Section 21(a)(1) of the Securities and
      Exchange Act of 1934. Such certifications appear as exhibits to this
      report and are incorporated herein by reference.

Item 6.  Exhibits.

(a)   Exhibits.

      12.   Statement of Calculation of Ratio of Earnings to Fixed Charges.
      99.1  CEO certification pursuant to Section 21(a)(1) of the Securities and
             Exchange Act of 1934.
      99.2  CFO certification pursuant to Section 21(a)(1) of the Securities and
             Exchange Act of 1934.

(b)   Reports on Form 8-K.

      None

                                       20
<PAGE>


                                    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.


Date:  August 13, 2002     By: /s/ G. MICHAEL DURKIN JR.
                               --------------------------------------
                               G. Michael Durkin Jr.
                               Senior Vice President and Chief Financial Officer
                               (As Chief Accounting Officer and Duly Authorized
                               Officer of PepsiAmericas, Inc.)

                                 CERTIFICATIONS


      In connection with the Quarterly Report of PepsiAmericas, Inc. (the
"Company") on Form 10-Q for the quarterly period ended June 29, 2002, as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
the undersigned, in the capacities and on the dates indicated below, hereby
certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

      (1)   the Report fully complies with the requirements of Section 13(a) or
            15(d) of the Securities Exchange Act of 1934: and

      (2)   the information contained in the Report fairly represents, in all
            material respects, the financial condition and results of operations
            of the Company.


Dated: August 13, 2002     By: /s/ ROBERT C. POHLAD
                               -------------------------
                               Robert C. Pohlad
                               Chairman of the Board and Chief Executive Officer


Dated: August 13, 2002     By: /s/ G. MICHAEL DURKIN JR.
                               --------------------------
                               G. Michael Durkin Jr.
                               Senior Vice President and Chief Financial Officer

                                       21