In 1999, as a result of the bottling transactions, $717 million of pension benefit obligation and $205 million of postretirement benefit obligations were assumed by bottling affiliates. In addition, bottling affiliate plans assumed ownership of $659 million of pension assets. The net gain on the bottling transactions includes a curtailment/settlement net loss of $52 million.

Weighted-average pension assumptions at end of year:

The discount rate assumption used to compute the postretirement benefit obligation at year end was 7.5% in 2001 and 7.8% in 2000.

Pension Assets
The pension plan assets are principally invested in stocks and bonds. These assets include approximately 4.7 million shares of PepsiCo common stock with a fair value of $227 million in 2001 and $214 million in 2000. Subsequent to the measurement date of September 30, 2001, 0.8 million shares of PepsiCo common stock were purchased and, during 2000, 1.8 million shares were sold. A one-percentage point decrease in our expected return on assets would have increased our net periodic pension cost by approximately $31 million in 2001.

Health Care Cost Trend Rates
An average increase of 7.5% in the cost of covered postretirement medical benefits is assumed for 2002. This average increase is then projected to decline gradually to 4.5% in 2008 and thereafter. Generally, our costs are capped at a specified dollar amount.

Assumed health care cost trend rates have a significant effect on the amounts reported for postretirement medical plans. A one-percentage point change in assumed health care costs would have the following effects:

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