Pepsi 2014 Annual Report Download - page 36

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Our business, financial condition or results of operations could be adversely affected if we are unable to
grow our business in developing and emerging markets or as a result of unstable political conditions, civil
unrest or other developments and risks in the markets where our products are made, manufactured,
distributed or 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
developing and emerging markets, particularly China, 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, distribute
or sell will be accepted or be successful in any particular developing or emerging market, due to local or
global competition, product price, cultural differences, consumer preferences or otherwise. The following
factors could reduce demand for our products, or otherwise adversely affect our business, financial condition
or results of operations: unstable economic, political or social conditions, acts of war, terrorist acts, and civil
unrest in areas where our products are sold, including Russia, Ukraine, Venezuela and the Middle East;
increased competition; a slowdown in growth and the related impact on other countries who export to these
markets; our inability to acquire businesses, form strategic business alliances or to make necessary
infrastructure investments; our inability to complete divestitures or refranchisings; imposition of new or
increased sanctions against, or other regulations restricting contact with, countries in markets in which our
products are made, manufactured, distributed or sold, such as Russia, or imposition of new or increased
sanctions against U.S. multinational corporations operating in these markets; foreign ownership restrictions;
nationalization of our assets; restrictions on the import or export of our products or ingredients or substances
used in 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; regulations 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 Russian ruble, Venezuelan bolivar, Argentine peso, Ukrainian
hryvnia and 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 doing 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
any failure to comply with these laws and regulations. If we are unable to expand our businesses in developing
and emerging markets, or achieve the return on capital we expect from our investments, our business, financial
condition or results of operations could be adversely affected. 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
and any significant reduction in demand could adversely affect our business, financial condition or results
of operations.”, “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 business, financial condition
or results of operations could suffer if we are unable to compete effectively.”, “Business disruptions could
have an adverse impact on our business, financial condition or 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 adversely affect our business, financial condition or results
of operations.”
Unfavorable economic conditions may have an adverse impact on our business, financial condition or
results of operations.
Many of the countries in which we operate, including the United States and certain countries in Europe and
Latin America, have experienced and continue to experience unfavorable economic conditions. Our business
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