Snapple 2008 Annual Report Download - page 41

with substantial penalties. In addition, any significant change in such laws or regulations or their interpretation, or
the introduction of higher standards or more stringent laws or regulations could result in increased compliance costs
or capital expenditures. For example, changes in recycling and bottle deposit laws or special taxes on soft drinks or
ingredients could increase our costs. Regulatory focus on the health, safety and marketing of food products is
increasing. Certain state warning and labeling laws, such as California’s “Prop 65,” which requires warnings on any
product with substances that the state lists as potentially causing cancer or birth defects, could become applicable to
our products. Some local and regional governments and school boards have enacted, or have proposed to enact,
regulations restricting the sale of certain types of soft drinks in schools. Any violations or changes of regulations
could have a material adverse effect on our profitability, or disrupt the production or distribution of our products,
and negatively affect our business and financial performance.
We may not realize benefits of acquisitions.
We have recently acquired various bottling and distribution businesses and are integrating their operations into
our business. We may pursue further acquisitions of independent bottlers, distributors and distribution rights to
complement our existing capabilities and further expand the distribution of our brands. We may also pursue
acquisition of brands and products to expand our brand portfolio. The failure to successfully identify, make and
integrate acquisitions may impede the growth of our business. The timing or success of any acquisition and
integration is uncertain, requires significant expenses, and diverts financial and managerial resources away from our
existing businesses. We also may not be able to raise the substantial capital or debt required for acquisitions and
integrations on satisfactory terms, if at all. In addition, even after an acquisition, we may not be able to successfully
integrate an acquired business or brand or realize the anticipated benefits of an acquisition, all of which could have a
negative effect on our business and financial performance.
We could lose key personnel or may be unable to recruit qualified personnel.
Our performance significantly depends upon the continued contributions of our executive officers and key
employees, both individually and as a group, and our ability to retain and motivate them. Our officers and key
personnel have many years of experience with us and in our industry and it may be difficult to replace them. If we
lose key personnel or are unable to recruit qualified personnel, our operations and ability to manage our business
may be adversely affected. We do not have “key person” life insurance for any of our executive officers or key
employees.
We depend on key information systems and third party service providers.
We depend on key information systems to accurately and efficiently transact our business, provide information
to management and prepare financial reports. We rely on third party providers for a number of key information
systems and business processing services, including hosting our primary data center and processing various
accounting, order entry and other transactional services. These systems and services are vulnerable to interruptions
or other failures resulting from, among other things, natural disasters, terrorist attacks, software, equipment or
telecommunications failures, processing errors, computer viruses, hackers, other security issues or supplier
defaults. Security, backup and disaster recovery measures may not be adequate or implemented properly to avoid
such disruptions or failures. Any disruption or failure of these systems or services could cause substantial errors,
processing inefficiencies, security breaches, inability to use the systems or process transactions, loss of customers or
other business disruptions, all of which could negatively affect our business and financial performance.
Weather and climate changes could adversely affect our business.
Unseasonable or unusual weather or long-term climate changes may negatively impact the price or availability
of raw materials, energy and fuel, and demand for our products. Unusually cool weather during the summer months
may result in reduced demand for our products and have a negative effect on our business and financial
performance.
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