Pepsi 2014 Annual Report Download - page 40

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In addition, we operate globally, which requires us to comply with numerous local regulations, including,
without limitation, anti-corruption laws, competition laws and tax laws and regulations of the jurisdictions
in which our products are made, manufactured, distributed or sold. In the event that our employees engage
in improper activities, we may be subject to enforcement actions, litigation, loss of sales or other consequences,
which may cause us to suffer damage to our reputation in the United States or abroad. Failure to comply with
local laws and regulations, to maintain an effective system of internal controls or to provide accurate and
timely financial information could also hurt our reputation. In addition, water is a limited resource in many
parts of the world and demand for water continues to rise. Our reputation could be damaged if we or others
in our industry do not act, or are perceived not to act, responsibly with respect to water use.
Further, the rising popularity of social media and other consumer-oriented technologies has increased the
speed and accessibility of information dissemination. As a result, negative or inaccurate posts or comments
about us, our products, policies, practices or advertising campaigns and marketing programs, our use of social
media or of posts or other information disseminated by us or our employees, agents, customers, suppliers,
bottlers, distributors, joint venture partners or other third parties, or consumer perception of any of the
foregoing, may also generate adverse publicity that could damage our reputation.
Damage to our reputation or brand image or loss of consumer confidence in our products for any of these or
other reasons could result in decreased demand for our products and could adversely affect our business,
financial condition or results of operations, as well as require additional resources to rebuild our reputation.
See also “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.”, “Imposition of new taxes, disagreements with tax authorities or additional
tax liabilities could adversely affect our business, financial condition or results of operations.” and “Our
business, financial condition or results of operations may be adversely affected by increased costs, disruption
of supply or shortages of raw materials and other supplies.
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.
We regularly review our portfolio of businesses and evaluate potential acquisitions, joint ventures,
divestitures, refranchisings and other strategic transactions. Potential issues associated with these activities
could include, among other things: our ability to realize the full extent of the benefits or cost savings that we
expect to realize as a result of the completion of an acquisition, divestiture or refranchising, or the formation
of a joint venture, within the anticipated time frame, or at all; receipt of necessary consents, clearances and
approvals in connection with an acquisition, joint venture, divestiture or refranchising; and diversion of
management’s attention from day-to-day operations.
With respect to acquisitions, the following also pose potential risks: our ability to successfully combine our
businesses with the business of the acquired company, including integrating the manufacturing, distribution,
sales and administrative support activities and information technology systems between us and the acquired
company and our ability to successfully operate in new categories or territories; motivating, recruiting and
retaining executives and key employees; conforming standards, controls (including internal control over
financial reporting, environmental compliance and health and safety compliance), procedures and policies,
business cultures and compensation structures between us and the acquired company; consolidating and
streamlining corporate and administrative infrastructures; consolidating sales and marketing operations;
retaining existing customers and attracting new customers; identifying and eliminating redundant and
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