Pepsi 2013 Annual Report Download - page 27

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Changes in the legal and regulatory environment could limit our business activities, increase our operating
costs, reduce demand for our products or result in litigation.” and “Item 1A. Risk Factors – Imposition of
new taxes, disagreements with tax authorities or additional tax liabilities could adversely affect our financial
performance.”
The cost of compliance with U.S. and foreign laws does not have a material financial impact on our results
of operations.
We are also subject to national and local environmental laws in the United States and in foreign countries in
which we do business, including laws related to water consumption and treatment, wastewater discharge and
air emissions. In the United States, our facilities must comply with the Comprehensive Environmental
Response, Compensation and Liability Act, the Resource Conservation and Recovery Act and other federal
and state laws regarding handling, storage, release and disposal of wastes generated on-site and sent to third-
party owned and operated off-site licensed facilities. Our policy is to meet all applicable environmental
compliance requirements, and we have internal programs in place to enhance our global environmental
compliance. We and our subsidiaries are subject to environmental remediation obligations in the normal
course of business, as well as remediation and related indemnification obligations in connection with certain
historical activities and contractual obligations, including those of businesses acquired by our subsidiaries.
While these environmental and indemnification obligations cannot be predicted with certainty, environmental
compliance costs have not had, and are not expected to have, a material impact on our capital expenditures,
earnings or competitive position. See also “Item 1A. Risk Factors – Changes in the legal and regulatory
environment could limit our business activities, increase our operating costs, reduce demand for our products
or result in litigation.”
The Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRA) requires disclosure of certain
activities relating to Iran by PepsiCo or its affiliates that occurred during our 2013 fiscal year. As previously
disclosed, one of our foreign subsidiaries historically maintained a small office in Iran, which provided sales
support to independent bottlers in Iran in connection with in-country sales of foreign-owned beverage brands,
and which was not in contravention of any applicable U.S. sanctions laws. In 2012, our foreign subsidiary
took steps to close its office in Iran, including terminating all three of its employees, and the office has ceased
all commercial activity since the enactment of ITRA. During 2013, our foreign subsidiary continued the
process of winding down its office in Iran pursuant to a general license from the U.S. Treasury Department’s
Office of Foreign Assets Control (OFAC) until the expiration of such license in March 2013. The subsidiary
did not engage in any activities in Iran other than wind-down activities in 2013, or have any revenues or
profits attributable to activities in Iran during 2013. The office of the subsidiary continues to have one local
bank account, containing aggregate deposits of approximately $180, with a bank identified on the list of
“Specially Designated Nationals” maintained by OFAC. The subsidiary has applied for a license from OFAC
to authorize continuation and completion of wind-down, including closing the bank account, and plans to
resume and complete such wind-down activities upon receipt thereof.
Employees
As of December 28, 2013, we employed approximately 274,000 people worldwide, including approximately
106,000 people within the United States. Our employment levels are subject to seasonal variations. We or
our subsidiaries are a party to numerous collective bargaining agreements. We expect that we will be able
to renegotiate these collective bargaining agreements on satisfactory terms when they expire. We believe
that relations with our employees are generally good.