Pepsi 2014 Annual Report Download - page 47

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Item 3. Legal Proceedings.
As previously disclosed, on January 6, 2011, Wojewodzka Inspekcja Ochrony Srodowiska, the Polish
environmental control authority (the Polish Authority), began an audit of a bottling plant of our subsidiary,
Pepsi-Cola General Bottlers Poland SP, z.o.o. (PCGB), in Michrow, Poland. On February 18, 2011, the Polish
Authority alleged that in 2009 the plant was not in compliance with applicable regulations requiring the use
of approved laboratories for the analysis of the plant’s waste and sought monetary sanctions of $700,000.
As previously disclosed, PCGB appealed this decision and, on January 15, 2013, the Supreme Administrative
Court issued a final, non-appealable decision finding that the sanctions against PCGB were imposed in
violation of applicable environmental law and released PCGB from all liability with respect to such sanctions.
On July 30, 2013, the Polish Authority alleged that the plant was not in compliance in 2009 with applicable
regulations governing the taking of water samples for analysis of the plant’s waste and sought monetary
sanctions of $650,000. PCGB has appealed this decision and the appeal is pending.
Also as previously disclosed, on May 8, 2011, Kozep-Duna-Volgyi Kornyezetvedelmi, Termeszetvedelmi
es Vizugyi Felugyeloseg (Budapest), the regional Hungarian governmental authority (the Hungarian
Authority), notified our subsidiary, Fovarosi Asvanyviz-es Uditoipari Zrt. (FAU), that it assessed monetary
sanctions of approximately $220,000 for alleged violation of applicable wastewater discharge standards in
2010. Also as previously disclosed, on August 9, 2012, the Hungarian Authority notified FAU that it assessed
monetary sanctions of approximately $153,000 for alleged violation of applicable wastewater discharge
standards in 2011. Following an appeal of this decision by FAU, the Orszagos Kornyezetvedelmi,
Termeszetvedelmi es Vizugyi Felugyeloseg (Budapest) increased the 2011 sanctions to $320,000 and the
2012 sanctions to $196,000, on the grounds that certain pollutant factors had not been taken into account by
the Hungarian Authority. FAU has appealed these decisions and the appeals are pending at the Fovarosi
Kozigazgatasi es Munkaugyi Birosag (Budapest).
In addition, we and our subsidiaries are party to a variety of legal, administrative, regulatory and government
proceedings, claims and inquiries arising in the normal course of business. While the results of these
proceedings, claims and inquiries cannot be predicted with certainty, management believes that the final
outcome of the foregoing will not have a material adverse effect on our consolidated financial statements,
results of operations or cash flows. See also “Item 1. Business – Regulatory Environment and Environmental
Compliance.” and “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.”,
“Item 1A. Risk Factors – Imposition of new taxes, disagreements with tax authorities or additional tax
liabilities could adversely affect our business, financial condition or results of operations.”, “Item 1A. Risk
Factors – 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.” and “Item 1A. Risk Factors – Potential liabilities and costs from litigation or legal
proceedings could have an adverse impact on our business, financial condition or results of operations.”
Item 4. Mine Safety Disclosures.
Not applicable.
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