Snapple 2013 Annual Report Download - page 25

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Litigation or legal proceedings could expose us to significant liabilities and damage our reputation.
We are party to various litigation claims and legal proceedings which may include employment, tort, real estate, commercial
and other litigation. From time to time we are a defendant in class action litigation, including litigation regarding employment
practices, product labeling, and wage and hour laws. Plaintiffs in class action litigation may seek to recover amounts which are
large and may be indeterminable for some period of time. We evaluate litigation claims and legal proceedings to assess the likelihood
of unfavorable outcomes and estimate, if possible, the amount of potential losses. We will establish a reserve as appropriate based
upon assessments and estimates in accordance with our accounting policies. We base our assessments, estimates and disclosures
on the information available to us at the time and rely on legal and management judgment. Actual outcomes or losses may differ
materially from assessments and estimates. Costs to defend litigation claims and legal proceedings and the cost of actual settlements,
judgments or resolutions of these claims and legal proceedings may negatively affect our business and financial performance. Any
adverse publicity resulting from allegations made in litigation claims or legal proceedings may also adversely affect our reputation,
which in turn could adversely affect our results.
Certain raw materials we use are available from a limited number of suppliers and shortages could occur.
Some raw materials we use, such as aluminum cans and ends, glass bottles, PET bottles, sweeteners, fruit, juice and other
ingredients, are sourced from industries characterized by a limited supply base. If our suppliers are unable or unwilling to meet
our requirements, we could suffer shortages or substantial cost increases. Changing suppliers can require long lead times. The
failure of our suppliers to meet our needs could occur for many reasons, including fires, natural disasters, weather, manufacturing
problems, disease, crop failure, strikes, transportation interruption, government regulation, political instability and terrorism. A
failure of supply could also occur due to suppliers' financial difficulties, including bankruptcy. Some of these risks may be more
acute where the supplier or its plant is located in riskier or less-developed countries or regions. Any significant interruption to
supply or cost increase could substantially harm our business and financial performance.
Substantial disruption to production at our manufacturing and distribution facilities could occur.
A disruption in production at our beverage concentrates manufacturing facility, which manufactures almost all of our
concentrates, could have a material adverse effect on our business. In addition, a disruption could occur at any of our other facilities
or those of our suppliers, bottlers or distributors. The disruption could occur for many reasons, including fire, natural disasters,
weather, water scarcity, manufacturing problems, disease, strikes, transportation or supply interruption, government regulation or
terrorism. Alternative facilities with sufficient capacity or capabilities may not be available, may cost substantially more or may
take a significant time to start production, each of which could negatively affect our business and financial performance.
We may fail to comply with applicable government laws and regulations.
We are subject to a variety of federal, state and local laws and regulations in the U.S., Canada, Mexico and other countries
in which we do business. These laws and regulations apply to many aspects of our business including the manufacture, safety,
labeling, transportation, advertising and sale of our products. See "Regulatory Matters" in Item 1, "Business," of this Annual Report
on Form 10-K for more information regarding many of these laws and regulations.
Violations of these laws or regulations in the manufacture, safety, labeling, transportation and advertising of our products
could damage our reputation and/or result in regulatory actions 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, are or could become applicable to our products.
Weather, climate change legislation and the availability of water 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"). 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 in which 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.