Snapple 2011 Annual Report Download - page 36

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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.
In addition, taxes imposed on the sale of certain of our products by federal, state, local and foreign governments could cause
consumers to shift away from purchasing our products.
Our intellectual property rights could be infringed or we could infringe the intellectual property rights of others and adverse
events regarding licensed intellectual property, including termination of distribution rights, could harm our business.
We possess intellectual property that is important to our business. This intellectual property includes ingredient formulas,
trademarks, copyrights, patents, business processes and other trade secrets. See “Intellectual Property and Trademarks” in Item 1,
“Business,” of this Annual Report on Form 10-K for more information. We and third parties, including competitors, could come
into conflict over intellectual property rights. Litigation could disrupt our business, divert management attention and cost a
substantial amount to protect our rights or defend ourselves against claims. We cannot be certain that the steps we take to protect
our rights will be sufficient or that others will not infringe or misappropriate our rights. If we are unable to protect our intellectual
property rights, our brands, products and business could be harmed.
We also license various trademarks from third parties and license our trademarks to third parties. In some countries, other
companies own a particular trademark which we own in the U.S., Canada or Mexico. For example, the Dr Pepper trademark and
formula is owned by Coca-Cola in certain other countries. Adverse events affecting those third parties or their products could
affect our use of the trademark and negatively impact our brands.
In some cases, we license products from third parties which we distribute. The licensor may be able to terminate the license
arrangement upon an agreed period of notice, in some cases without payment to us of any termination fee. The termination of any
material license arrangement could adversely affect 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.
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.
There is growing political and scientific sentiment that increased concentrations of carbon dioxide and other greenhouse gases
in the atmosphere are influencing global weather patterns ("global warming"). Changing weather patterns, along with the increased
frequency or duration of extreme weather conditions, could negatively impact the availability or increase the cost of key raw
materials that we use to produce our products. Additionally, the sale of our products can be negatively impacted by weather
conditions.
Concern over climate change, including global warming, has led to legislative and regulatory initiatives directed at limiting
greenhouse gas (GHG) emissions. For example, proposals that would impose mandatory requirements on GHG emissions continue
to be considered by policy makers in the countries that we operate. Laws enacted that directly or indirectly affect our production,
distribution, packaging, cost of raw materials, fuel, ingredients, and water could all negatively impact our business and financial
results.
Changes in accounting standards could affect our reported financial results.
The number of new accounting standards or pronouncements is increasing as the Financial Accounting Standards Board and
the International Accounting Standards Board work towards a convergence of accounting standards. Certain standards may become
applicable for us and change the interpretation of existing standards and pronouncements, which could have a significant effect
on our reported results or financial position for the affected periods.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.