Pepsi 2013 Annual Report Download - page 32

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revenues and profit margins. See also “Unfavorable economic conditions may have an adverse impact on
our business results or financial condition.”
Our financial performance could be adversely affected if we are unable to grow our business in emerging
and developing markets or as a result of unstable political conditions, civil unrest or other developments
and risks in the markets where our products are sold.
Our operations outside of the United States, particularly in Russia, Mexico, Canada, the United Kingdom
and Brazil, contribute significantly to our revenue and profitability, and we believe that these countries and
emerging and developing markets, particularly China and India, and the Latin America, Africa and Middle
East regions, present important future growth opportunities for us. However, there can be no assurance that
our existing products, variants of our existing products or new products that we make, manufacture, market
or sell will be accepted or successful in any particular emerging or developing market, due to local or global
competition, product price, cultural differences or otherwise. If we are unable to expand our businesses in
emerging and developing markets, or achieve the return on capital we expect as a result of our investments
as a result of economic and political conditions, increased competition, reduced demand for our products, a
slow down in growth in these markets and the related impact on other countries who export to these markets,
imposition of new or increased sanctions against, or other regulations restricting contact with, countries in
these markets, an inability to acquire or form strategic business alliances or to make necessary infrastructure
investments or for any other reason, our financial performance could be adversely affected. Unstable economic
or political conditions, civil unrest or other developments and risks in the markets where our products are
sold, including in Mexico, Venezuela, the Middle East, including Egypt, could also have an adverse impact
on our business results or financial condition. Factors that could adversely affect our business results in these
markets include: foreign ownership restrictions; nationalization of our assets; restrictions on the import of
ingredients used in our products; restrictions on the import or export of our products; regulations on the
transfer of funds to and from foreign countries, which, from time to time, result in significant cash balances
in foreign countries such as Venezuela, and on the repatriation of funds currently held in foreign jurisdictions
to the United States; highly inflationary currency, devaluation or fluctuation, such as the devaluation of the
Venezuelan bolivar, Argentine peso or Turkish lira; the lack of well-established or reliable legal systems;
imposition of new or increased labeling, product or production requirements, or other restrictions; and
increased costs of business due to compliance with complex foreign and United States laws and regulations
that apply to our international operations, including the Foreign Corrupt Practices Act, the U.K. Bribery Act
and the Trade Sanctions Reform and Export Enhancement Act, and adverse consequences, such as the
assessment of fines or penalties, for failing to comply with these laws and regulations. In addition, disruption
in these markets due to political instability or civil unrest could result in a decline in consumer purchasing
power, thereby reducing demand for our products. See also “Item 1. Business - Regulatory Environment and
Environmental Compliance.”, “Demand for our products may be adversely affected by changes in consumer
preferences or any inability on our part to innovate or market our products effectively.”, “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.”, “Our financial performance could suffer if we are unable
to compete effectively.”, “Disruption of our supply chain could have an adverse impact on our business,
financial condition and results of operations.” and “Failure to successfully complete or integrate acquisitions
and joint ventures into our existing operations, or to complete or manage divestitures or refranchisings, could
have an adverse impact on our business, financial condition and results of operations.”