Pepsi 2015 Annual Report Download - page 37

Table of Contents
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manufacturing, distribution, sales, accounting, financial reporting and administrative support activities and
information technology systems with our company; 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, health and safety compliance
and compliance with other regulations), procedures and policies, business cultures and compensation
structures between us and the acquired company; consolidating and streamlining corporate and administrative
infrastructures and avoiding increased operating expenses; consolidating sales and marketing operations;
retaining existing customers and attracting new customers; identifying and eliminating redundant and
underperforming operations and assets; coordinating geographically dispersed organizations; managing tax
costs or inefficiencies associated with integrating our operations following completion of an acquisition; and
other unanticipated problems or liabilities, such as contingent liabilities and litigation.
With respect to joint ventures, we share ownership and management responsibility with one or more parties
who may or may not have the same goals, strategies, priorities or resources as we do. Joint ventures are
intended to be operated for the benefit of all co-owners, rather than for our exclusive benefit. Business
decisions or other actions or omissions of our joint venture partners may adversely affect the value of our
investment, result in litigation or regulatory action against us or otherwise damage our reputation and brands
and adversely affect our business, financial condition or results of operations. In addition, acquisitions and
joint ventures outside of the United States increase our exposure to risks associated with operations outside
of the United States, including fluctuations in exchange rates and compliance with the Foreign Corrupt
Practices Act and other anti-corruption and anti-bribery laws, and laws and regulations outside the United
States.
With respect to divestitures and refranchisings, we may not be able to complete such transactions on terms
commercially favorable to us or at all and may fail to achieve the anticipated benefits or cost savings from
the divestiture or refranchising. Further, as divestitures and refranchisings may reduce our direct control over
certain aspects of our business, any failure to maintain good relations with divested or refranchised businesses
in our supply or sales chain may adversely impact our sales or business performance.
If an acquisition or joint venture is not successfully completed or integrated into our existing operations, or
if a divestiture or refranchising is not successfully completed or managed or does not result in the benefits
or cost savings we expect, our business, financial condition or results of operations may be adversely affected.
A change in our estimates and underlying assumptions regarding the future performance of our businesses
could result in an impairment charge, which could materially affect our results of operations.
We conduct impairment tests on various components of our portfolio annually, during our third quarter, or
more frequently, if circumstances indicate that the carrying value may not be recoverable or that an other-
than-temporary impairment exists. Any changes in our estimates or underlying assumptions regarding the
future performance of our divisions or in determining the fair value of any such division, including goodwill,
indefinite-lived intangible assets, as well as other investments and other long-lived assets, could adversely
affect our results of operations. Factors that could result in an impairment include, but are not limited to:
significant negative economic or industry trends or competitive operating conditions, significant changes in
the nature and timing of decisions regarding assets or markets that do not perform consistent with our
expectations, including factors we use to estimate future levels of sales, operating profit or cash flows. Future
impairment charges could significantly affect our results of operations in the periods recognized.