Pepsi 2015 Annual Report Download - page 35

Table of Contents
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Business disruptions could have an adverse impact on our business, financial condition or results of
operations.
Our ability, and that of our suppliers and other third parties, including our independent bottlers, contract
manufacturers, joint venture partners, independent distributors and customers, to make, manufacture,
transport, distribute and sell products in our portfolio is critical to our success. Damage or disruption to our
or their operations due to any of the following factors could impair the ability to make, manufacture, transport,
distribute or sell products in our portfolio: adverse weather conditions or natural disaster, such as a hurricane,
earthquake or flooding; government action; economic or political uncertainties or instability in countries in
which such products are made, manufactured, distributed or sold, which may also affect our ability to protect
the security of our assets and employees; fire; terrorism; outbreak or escalation of armed hostilities; food
safety warnings or recalls, whether related to products in our portfolio or otherwise; health epidemics or
pandemics; unplanned delays or unexpected problems associated with repairs or enhancements of facilities
in which such products are made, manufactured, distributed or sold; cyber incidents; industrial accidents or
other occupational health and safety issues; telecommunications failures; power or water shortages; strikes
and other labor disputes; or other reasons beyond our control or the control of our suppliers and other third
parties. Failure to take adequate steps to mitigate the likelihood or potential impact of such events, or to
effectively manage such events if they occur, could adversely affect our business, financial condition or
results of operations, as well as require additional resources to restore our operations.
Product contamination or tampering or issues or concerns with respect to product quality, safety and
integrity could adversely affect our business, financial condition or results of operations.
Product contamination or tampering, the failure to maintain high standards for product quality, safety and
integrity, including with respect to raw materials and ingredients obtained from suppliers, or allegations
(whether or not valid) of product quality issues, mislabeling, misbranding, spoilage, allergens or
contamination may reduce demand for products in our portfolio, cause production and delivery disruptions
or increase costs, which could adversely affect our business, financial condition or results of operations. If
any of the products in our portfolio are mislabeled or become unfit for consumption or cause injury, illness
or death, or if appropriate resources are not devoted to product quality and safety (particularly as we expand
our portfolio into new categories) or to comply with changing food safety requirements, products in our
portfolio may be subject to a product recall and/or be subject to liability or government action, which could
result in payment of damages or fines, cause certain products in our portfolio to be unavailable for a period
of time or result in adverse publicity, which could reduce consumer demand and brand equity. Our business
could also be adversely affected if consumers lose confidence in product quality, safety and integrity generally,
even if such loss of confidence is unrelated to products in our portfolio. Any of the foregoing could adversely
affect our business, financial condition or results of operations. In addition, if we do not have adequate
insurance, if we do not have contractual indemnification from suppliers, bottlers, distributors, joint venture
partners or other third parties or if indemnification is not available, the liability relating to such product claims
or disruption as a result of recall efforts could materially adversely affect our business, financial condition
or results of operations.
Any damage to our reputation or brand image could adversely affect our business, financial condition or
results of operations.
We are a leading global beverage, food and snack company with brands that are respected household names
throughout the world. Maintaining a good reputation globally is critical to selling our branded products. Our
reputation or brand image could be adversely impacted by any of the following, or by adverse publicity
(whether or not valid) relating thereto: the failure to maintain high ethical, social and environmental practices
for all of our operations and activities, including with respect to human rights and workplace safety, or failure