Pepsi 2014 Annual Report Download - page 44

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change, we may also be subjected to decreased availability of water, deteriorated quality of water or less
favorable pricing for water, which could adversely impact our manufacturing and distribution operations. In
addition, natural disasters and extreme weather conditions may disrupt the productivity of our facilities or
the operation of our supply chain.
The increasing concern over climate change also may result in new or increased regional, federal and/or
global legal and regulatory requirements to reduce or mitigate the effects of greenhouse gases. In the event
that such regulation is more aggressive than the measures that we are currently undertaking to monitor our
emissions and improve our energy efficiency, we may experience significant increases in our costs of operation
and delivery and we may be required to make additional investments in facilities and equipment. In particular,
increasing regulation of fuel emissions could substantially increase the cost of energy, including fuel, required
to operate our facilities or transport and distribute our products, thereby substantially increasing the
distribution and supply chain costs associated with our products. As a result, the effects of climate change
could negatively affect our business and operations. 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.”, “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.” and “Business disruptions could have an adverse impact on
our business, financial condition or results of operations.”
A portion of our workforce belongs to unions. Failure to successfully negotiate collective bargaining
agreements, or strikes or work stoppages could cause our business to suffer.
Many of our employees are covered by collective bargaining agreements and other employees may seek to
be covered by collective bargaining agreements. Strikes or work stoppages or other business interruptions
could occur if we are unable to renew these agreements on satisfactory terms or enter into new agreements
on satisfactory terms, which could impair manufacturing and distribution of our products or result in a loss
of sales, which could adversely impact our business, financial condition or results of operations. The terms
and conditions of existing, renegotiated or new collective bargaining agreements could also increase our
costs or otherwise affect our ability to fully implement future operational changes to enhance our efficiency
or to adapt to changing business needs or strategy.
Our intellectual property rights could be infringed or challenged and reduce the value of our products
and brands and have an adverse impact on our business, financial condition or results of operations.
We possess intellectual property rights that are important to our business. These intellectual property rights
include ingredient formulas, trademarks, copyrights, patents, business processes and other trade secrets that
are important to our business and relate to a variety of our products, their packaging, the processes for their
production and the design and operation of various equipment used in our businesses. We protect our
intellectual property rights globally through a combination of trademark, copyright, patent and trade secret
laws, third-party assignment and nondisclosure agreements and monitoring of third-party misuses of our
intellectual property. If we fail to obtain or adequately protect our ingredient formulas, trademarks, copyrights,
patents, business processes and other trade secrets, or if there is a change in law that limits or removes the
current legal protections of our intellectual property, the value of our products and brands could be reduced
and there could be an adverse impact on our business, financial condition or results of operations. See also
“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.”
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