Pepsi 2015 Annual Report Download - page 26

Table of Contents
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ingredients. In addition, a number of other jurisdictions in the United States and outside the United States
are considering similar measures. Regulators may also restrict the use of benefit programs, such as the
Supplemental Nutrition Assistance Program, to purchase certain beverages and foods. In addition, legislation
has been enacted in certain U.S. states and in certain other countries where our products are sold that requires
collection and recycling of containers or that prohibits the sale of our beverages in certain non-refillable
containers, unless a deposit or other fee is charged. It is possible that similar or more restrictive legal
requirements may be proposed or enacted in the future. In addition, as our products are made, manufactured,
distributed and sold in more than 200 countries and territories, we are subject to tax laws and regulations in
the United States and numerous foreign jurisdictions. Economic and political conditions may result in changes
in tax rates, and existing laws on how U.S. multinational corporations are taxed on foreign earnings are
subject to changes in interpretation and enforcement, which could affect our financial performance. The cost
of compliance with such U.S. and foreign laws has not had a material financial impact on our consolidated
results of operations.
We are also subject to national and local environmental laws in the United States and in foreign countries in
which we do business, including laws related to water consumption and treatment, wastewater discharge and
air emissions. In the United States, our facilities must comply with the Clean Air Act, the Clean Water Act,
the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation
and Recovery Act and other federal and state laws regarding handling, storage, release and disposal of wastes
generated on-site and sent to third-party owned and operated off-site licensed facilities and our facilities
outside the United States must comply with similar laws and regulations. Our policy is to abide by all
applicable environmental compliance requirements, and we have internal programs in place to enhance our
global environmental compliance. We have made, and plan to continue making, necessary expenditures for
compliance with applicable laws. While these expenditures have not had a material impact on our business,
financial condition or results of operations, changes in environmental compliance requirements, and any
expenditures necessary to comply with such requirements, could affect our financial performance. In addition,
we and our subsidiaries are subject to environmental remediation obligations arising in the normal course
of business, as well as remediation and related indemnification obligations in connection with certain
historical activities and contractual obligations, including those of businesses acquired by us or our
subsidiaries. While these environmental and indemnification obligations cannot be predicted with certainty,
environmental compliance costs have not had, and are not expected to have, a material impact on our capital
expenditures, earnings or competitive position.
In addition to the discussion in this section, see under “Item 1A. Risk Factors” below “Changes in, or failure
to comply with, laws and regulations applicable to our products or our business operations could adversely
affect our business, financial condition or results of operations.”, “Imposition of new taxes, disagreements
with tax authorities or additional tax liabilities could adversely affect our business, financial condition or
results of operations.”, “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 “Climate change or water scarcity, or legal, regulatory or market
measures to address climate change or water scarcity, may negatively affect our business and operations or
damage our reputation.”
The Iran Threat Reduction and Syria Human Rights Act of 2012 (ITRA) requires disclosure of certain
activities relating to Iran by PepsiCo or its affiliates that occurred during our 2015 fiscal year. As previously
disclosed, one of our foreign subsidiaries historically maintained a small office in Iran, which provided sales
support to independent bottlers in Iran in connection with in-country sales of foreign-owned beverage brands,
and which was not in contravention of any applicable U.S. sanctions laws. The office ceased all commercial
activity since the enactment of ITRA. During our 2015 fiscal year, our foreign subsidiary received a license