RISKS RELATED TO OUR OPERATIONS
−Removed: Widespread health developments and economic uncertainty resulting from the ongoing COVID-19 pandemic could materially and adversely affect our business, financial condition and results of operations.
−Removed: Our business has been, and may continue to be, adversely impacted by the response to the ongoing COVID-19 pandemic in countries where we operate or our customers and suppliers are located, due to recommendations or mandates from governmental and local authorities to require vaccinations, close businesses, limit travel, avoid large gatherings or self-quarantine, as well as temporary closures or decreased operations of the facilities of our customers, distributors or suppliers.
−Removed: These impacts include, but are not limited to:
−Removed: • Significant reductions in demand or significant volatility in demand for one or more of our products, as a result of, among other things:
−Removed: the temporary inability of consumers to purchase our products due to illness, quarantine or other restrictions, store closures, or financial hardship, shifts in demand away from one or more of our higher priced products to lower priced products, or stockpiling or similar activity, reduced options for marketing and promotion of products or other restrictions in connection with the COVID-19 pandemic;
−Removed: such impacts could further increase the difficulty of operating our business during the pandemic, including accurately planning and forecasting customer demand;
−Removed: • Inability to meet our consumers' and customers’ needs and achieve cost targets due to disruptions in our manufacturing and supply arrangements such as the loss or disruption of essential raw materials or purchased finished goods, disruption of logistics, reduction or loss of workforce due to the insufficiency or failure of our safety protocols, or disruption of other manufacturing and distribution capability;
−Removed: • Failure of third parties, including those located in international locations, on which we rely, including our suppliers, bottlers, distributors, contract manufacturers, third-party service providers, contractors, commercial banks and external business partners, to meet their obligations to us or to timely meet those obligations, or significant disruptions in their ability to do so, which may be caused by their own financial or operational difficulties;
−Removed: • Significant changes in the conditions in markets in which we manufacture, sell or distribute our products, including quarantines, governmental or regulatory actions, closures or other restrictions that limit or close our operating and manufacturing facilities, restrict our employees’ ability to perform necessary business functions, restrict or prevent consumers from having access to our products, or otherwise prevent our third-party bottlers, distributors, partners, suppliers, or customers from sufficiently staffing operations, including operations necessary for the production, distribution, sale, and support of our products.
−Removed: All of these impacts could place limitations on our ability to execute on our business plan and materially and adversely affect our business, financial condition and results of operations.
−Removed: We continue to monitor the situation, have actively implemented policies and procedures to address the situation, and as the pandemic continues to further unfold, we may adjust our current policies and procedures as regulations or governmental orders are implemented or more information and guidance become available.
−Removed: The impact of COVID-19 may also exacerbate other risks discussed herein, any of which could have a material effect on us.
−Removed: As this situation continues to evolve, new risks or uncertainties may arise that we are not aware of currently.
Costs and supply for inputs to our products, including raw materials and transportation, may change substantially and shortages have occurred and may continue to occur.
−Removed: The ongoing COVID-19 pandemic and its resulting impacts on the global economy, particularly supply chain constraints and labor shortages, have led to inflation in input costs, logistics, manufacturing and labor costs.
−Removed: We have experienced supply chain disruptions and significant inflation, which have impacted our results of operations in the current year and may continue to do so in the future.
+Added: We have been, and may continue to be, affected by supply chain constraints and labor shortages driven by overall macroeconomic and geopolitical uncertainty, largely caused by the COVID-19 pandemic and the Russian invasion of Ukraine.
+Added: The resulting impacts on the global economy have led to supply chain disruptions and significant inflation in input costs, logistics, manufacturing and labor costs, which have impacted our results of operations in the current year and may continue to do so in the future.
Our raw materials are sourced from industries characterized by a limited supply base, and their cost can fluctuate substantially.
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The supply and price of crops we purchase, such as coffee, apples, and corn, can also be affected by multiple factors in the producing countries, including weather, natural disasters, crop disease (such as coffee rust), general cost increases in farm inputs and costs of production, inventory levels and political and economic conditions, as well as the actions of certain organizations and associations that have historically attempted to influence prices of various commodities through agreements establishing export quotas or by restricting supplies.
−Removed: Speculative trading in commodities, such as coffee, has and may continue to influence prices.
+Added: Ongoing speculation in global trading of commodities, such as coffee, has and may continue to influence prices.
If we are unable to purchase sufficient quantities of our commodities due to any of the factors described herein or a worldwide or regional shortage, we may not be able to fulfill the demand for our products, which could have an adverse impact on our business and financial results.
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Changing suppliers can require long lead times.
−Removed: 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 disruption, government regulation, political instability, cybersecurity attacks and terrorism.
+Added: The failure of our suppliers to meet our needs could occur for many reasons, including fires, natural disasters, weather, manufacturing problems, disease, widespread illness (such as the COVID-19 pandemic), crop failure, strikes, transportation disruption, government regulation, political instability, cybersecurity attacks and terrorism.
A failure of supply could also occur due to suppliers’ financial difficulties, including bankruptcy.
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In addition, we use a significant amount of energy in our business, and therefore may be significantly impacted by changes in fuel costs due to the large truck fleet we operate in our distribution business and our use of third-party carriers.
+Added: An increase in the price, disruption of supply, or shortage in fuel and other energy sources could also increase our suppliers’ operating costs and indirectly impact our results of operations.
We operate in intensely competitive categories.
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If we do not succeed in continuing to reduce the costs of manufacturing Keurig brewers or differentiating Keurig brewers from our competitors in the coffeemaker category, based on technology, quality of products, desired brands or otherwise, or our competitors adopt their respective strategies, our competitive position may be weakened.
−Removed: Product safety and quality concerns could negatively affect our business.
−Removed: The success of our business depends in part on our ability to maintain consumer confidence in the safety and quality of all of our products, including beverage products and our brewers.
+Added: Concerns about the safety, quality, or health effects of our products could negatively affect our business.
+Added: The success of our business depends in part on our ability to maintain consumer confidence in the safety and quality of all of our products, including beverage products, their ingredients and packaging, and our brewers.
We have various quality, environmental, health and safety supply chain standards.
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Moreover, negative publicity may result from false, unfounded or nominal liability claims or limited recalls.
+Added: In addition, adverse public opinion, third-party studies or other allegations, whether or not valid, regarding the perceived or potential negative health effects of ingredients in our beverage products, or substances in our packaging materials may lead to additional government regulation, new or increased taxes on our products, actual or threatened legal action against us, and a negative consumer perception of our products, any of which could result in decreased demand for our products or reformulations of existing products to remove such ingredients or substances, which may be costly and reduce their appeal.
Any or all of these events may lead to a loss of consumer confidence and trust, could damage the goodwill associated with our brands and may cause consumers to choose other products and could negatively affect our business and financial performance.
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For example, consumers are increasingly concerned about health and wellness, focusing on the caloric intake associated with regular CSDs, the use of artificial sweeteners in diet CSDs, and the use of natural, organic or simple ingredients in beverages.
−Removed: The demand for CSDs has therefore decreased as consumers have shifted towards NCBs, such as water, ready-to-drink coffee and teas, and sports drinks.
+Added: The demand for CSDs has therefore decreased as consumers have shifted towards NCBs, such as water, RTD coffee and teas, and sports drinks.
If we do not effectively anticipate and respond to these changing trends and consumer beverage preferences, our sales and growth could suffer.
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If we are unable to meet the consumer where and when they desire their products or if we are unable to respond to changes in distribution channels (including e-commerce), our financial results could be adversely impacted.
+Added: We have been, and may continue to be, adversely impacted by significant reductions in demand or significant volatility in demand for one or more of our products, as a result of, among other things:
+Added: the temporary inability of consumers to purchase our products due to illness, quarantine or other restrictions, store closures, or financial hardship, shifts in demand away from one or more of our higher priced products to lower priced products, or stockpiling or similar activity, reduced options for marketing and promotion of products or other restrictions in connection with widespread illness such as the COVID-19 pandemic;
+Added: such impacts could further increase the difficulty of operating our business during the pandemic, including accurately planning and forecasting customer demand.
If we do not innovate rapidly and successfully to respond to shifting consumer demands, our business may suffer.
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If we do not successfully manage our investments in new business strategies or integrate and manage our acquired businesses or brands, our operating results may adversely be affected.
−Removed: From time to time, we expect to acquire businesses or brands, invest in emerging companies and/or form joint ventures, and enter into various licensing and distribution agreements to expand our product portfolio.
−Removed: In evaluating such endeavors, we will be required to make difficult judgments regarding the value of business strategies, opportunities, technologies and other assets, and the risks and cost of potential liabilities.
+Added: From time to time, we acquire businesses or brands, invest in emerging companies and/or form joint ventures, and enter into various licensing and distribution agreements to expand our product portfolio.
+Added: In evaluating such endeavors, we are required to make difficult judgments regarding the value of business strategies, opportunities, technologies and other assets, and the risks and cost of potential liabilities.
Furthermore, we may incur unforeseen liabilities and obligations in connection with any such transaction, including in connection with the integration or management of the acquired businesses or brands and may encounter unexpected difficulties and costs in integrating them into our operating and internal control structures.
We may also experience delays in extending our respective internal control over financial reporting to newly acquired businesses, which may increase the risk of failure to prevent misstatements in our financial records and in our consolidated financial statements.
−Removed: We also regularly pursue productivity initiatives, which are focused on strategic opportunities in procurement, manufacturing, and logistics, as well as cost savings and tax initiatives.
+Added: We also regularly pursue productivity initiatives, which are focused on cost savings and tax strategies in procurement, manufacturing, and logistics.
These strategic initiatives may include investments in new technologies and optimization and relocation of our manufacturing and distribution footprint.
New ventures and investments are inherently risky and may not be successful, and we may face challenges in achieving strategic objectives and other benefits expected from such investments or ventures.
−Removed: Any acquisitions, investments or ventures may also result in the diversion of management attention and resources from other initiatives and operations.
+Added: Any acquisitions, investments or ventures may also disrupt ongoing business activity or result in the diversion of management attention and resources from other initiatives and operations.
Our financial performance will depend in large part on how well we can manage and improve the performance of acquired businesses or brands and the success of our other investments and ventures.
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If we are unable to achieve such objectives, our consolidated results could be negatively affected.
−Removed: Our facilities and operations may require substantial investment and upgrading.
−Removed: We have programs to invest and upgrade our manufacturing, distribution and other facilities, including expansive investments in manufacturing facilities in Spartanburg, South Carolina;
+Added: Our facilities and operations will require substantial investment and upgrading, and those investments may not achieve the intended financial benefits of such investment.
+Added: We continue to incur significant costs to upgrade or keep up-to-date various facilities and equipment or restructure our operations, including closing existing facilities or opening new ones.
+Added: Additionally, we rely on third parties for the construction and renovation of our facilities and manufacturing of our production equipment.
+Added: We have ongoing programs to invest and upgrade our manufacturing, distribution and other facilities, including expansive investments in manufacturing facilities in Spartanburg, South Carolina;
Newbridge, Ireland;
and Allentown, Pennsylvania.
−Removed: In 2020 and 2021, as a result of the COVID-19 pandemic, we have experienced delays in the construction of our new facilities and the production equipment contained within, and we may continue to experience such delays.
−Removed: We may continue to incur significant costs to upgrade or keep up-to-date various facilities and equipment or restructure our operations, including closing existing facilities or opening new ones.
−Removed: Additionally, we rely on third parties for the construction and renovation of our facilities and manufacturing of our production equipment.
If our investment and restructuring costs are higher than anticipated, the investments and upgrades are not sufficient to meet our near-term future business needs, our business does not develop as anticipated to appropriately utilize new or upgraded facilities, or third parties fail to complete the construction or renovation of facilities or production equipment in a timely manner or in accordance with our specifications, our costs and financial performance could be negatively affected.
+Added: As a result of the COVID-19 pandemic and other business disruptions, we have experienced delays in the construction of certain of our new facilities and the production equipment contained within, and we may continue to experience such delays.
Substantial disruption at our manufacturing and distribution facilities could occur.
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In addition, a disruption could occur at the facilities of our suppliers, bottlers, contract manufacturers or distributors.
−Removed: The disruption could occur for many reasons, including fire, natural disasters, weather, water scarcity, manufacturing problems, disease, epidemics, strikes, labor shortages, transportation or supply interruption, contractual dispute, government regulation, cybersecurity attacks or terrorism.
+Added: The disruption could occur for many reasons, including fire, natural disasters, weather, water scarcity, manufacturing problems, disease, widespread illness (such as the COVID-19 pandemic), strikes, labor shortages, transportation or supply interruption, contractual dispute, government regulation, cybersecurity attacks or terrorism.
Moreover, if demand increases beyond our production capabilities, we would need to either expand our capabilities internally or acquire additional capacity.
Alternative facilities with sufficient capacity or capabilities may not be available, may cost substantially more than existing facilities or may take a significant time to start production, each of which could negatively affect our business and financial performance.
−Removed: 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.
+Added: 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 a third party’s termination of distribution rights licensed to us, could harm our business.
We possess intellectual property that is important to our business.
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The impairment tests require us to make an estimate of the fair value of our reporting units and other intangible assets.
−Removed: An impairment could be recorded as a result of changes in assumptions, estimates or circumstances, some of which are beyond our control.
+Added: An impairment was recently recorded and could be recorded again as a result of changes in assumptions, estimates or circumstances, some of which are beyond our control.
Factors which could result in an impairment include, but are not limited to:
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(iv) not achieving forecasted productivities;
−Removed: (v) significant disruptions to our operations as a result of both internal and external events, such as the ongoing COVID-19 pandemic;
+Added: (v) significant disruptions to our operations as a result of both internal and external events;
and (vi) changes in our discount rates, which could change due to factors such as movement in risk free interest rates, changes in general market interest rates and market beta volatility and changes to management's view of forecasted risk, among others.
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In addition, a significant downgrade in our credit ratings may reduce flexibility of our business to engage in certain transactions, such as the execution and renewal of certain leases.
−Removed: The agreements that govern the indebtedness contain various covenants that impose restrictions on us and may affect our ability to operate our business.
−Removed: The agreements that govern our indebtedness contain various affirmative and negative covenants that may, subject to certain significant exceptions, restrict our ability, including certain subsidiaries, to incur debt and our ability, including certain subsidiaries, to, among other things, have liens on our property, and/or merge or consolidate with any other person or sell or convey certain of our assets to any one person, and engage in certain sale and leaseback transactions.
−Removed: Our ability, including certain subsidiaries, to comply with these provisions may be affected by events beyond our control.
−Removed: Failure to comply with these covenants could result in an event of default, which, if not cured or waived, could accelerate our repayment obligations and could result in a default and acceleration under other agreements containing cross-default provisions.
−Removed: Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our obligations.
+Added: We negotiate with our suppliers to extend our payment terms to decrease our cash conversion cycle and manage our working capital, and If suppliers are unwilling to meet our customary payment terms, it may limit the pool of potential suppliers.
+Added: Further, if a reduction in our payment terms with our suppliers occurs, our liquidity may be adversely affected.
+Added: As part of ongoing efforts to decrease our cash conversion cycle and maximize our working capital, we negotiate with our suppliers to optimize our terms and conditions, which includes the consideration of payment terms.
+Added: As part of this process, we strive to seek 360 day payment terms in commercial negotiations with potential suppliers.
+Added: Excluding our suppliers who require cash at date of purchase or sale, our current payment terms with our suppliers generally range from 10 to 360 days.
+Added: If a potential supplier is unwilling to accept 360 day payment terms as a part of the commercial negotiation, we may remove them from consideration, which could limit the overall pool of potential suppliers for selection.
+Added: If, during the procurement process, suppliers are either replaced or a supplier’s contract is renegotiated, our payment terms may be reduced.
+Added: If our payment terms are reduced, our ability to maintain our cash conversion cycle to maximize our working capital, as well as our liquidity, may be adversely affected.
+Added: Additionally, due to these replacements or renegotiations, we may need to utilize various financing arrangements for short-term liquidity.
We cannot guarantee that our share repurchase program will be fully consummated or that our share repurchase program will enhance long-term stockholder value, and share repurchases could increase the volatility of the price of our stock and reduce our free cash flow.
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We cannot guarantee that we will repurchase shares or conduct future share repurchase programs, and we cannot guarantee that any such programs will result in long-term increases to shareholder value.
+Added: Additionally, significant changes in laws or regulations, including the Inflation Reduction Act of 2022, effective August 16, 2022, which imposes a 1% excise tax on share repurchases that occur after December 31, 2022, may reduce our ability to take advantage of our share repurchase program.
+Added: The agreements that govern our indebtedness contain various covenants that impose restrictions on us and may affect our ability to operate our business.
+Added: The agreements that govern our indebtedness contain various affirmative and negative covenants that may, subject to certain significant exceptions, restrict our ability, including certain subsidiaries, to incur debt and our ability, including certain subsidiaries, to, among other things, have liens on our property, and/or merge or consolidate with any other person or sell or convey certain of our assets to any one person, and engage in certain sale and leaseback transactions.
+Added: Our ability, including certain subsidiaries, to comply with these provisions may be affected by events beyond our control.
+Added: Failure to comply with these covenants could result in an event of default, which, if not cured or waived, could accelerate our repayment obligations and could result in a default and acceleration under other agreements containing cross-default provisions.
+Added: Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our obligations.
RISKS RELATING TO LABOR AND EMPLOYMENT
−Removed: We could lose key personnel or may be unable to recruit and retain qualified personnel.
+Added: Failure to recruit and retain qualified personnel, or failure to effectively manage changes in our workforce such as labor shortages, employee turnover, and increases in wages, could significantly impact our operations.
Our future success depends upon the continued contributions of senior management and other key personnel and the ability to retain and motivate them.
If we are unable to recruit, retain and motivate the senior management team and other key personnel sufficiently to support the projected growth and initiatives of our business, our business and financial performance may be adversely affected.
−Removed: Labor shortages, employee turnover, and increases in wages could significantly impact our operations.
−Removed: The ongoing COVID-19 pandemic and its resulting impacts on the global economy have exacerbated employee turnover and led to labor shortages, particularly in the market for frontline employees in the production and distribution environments.
−Removed: The labor force has been and may continue to be impacted by a number of factors related to the ongoing COVID-19 pandemic, including government actions, such as vaccination mandates, unemployment benefits and subsidies, and laws and regulations related to employee health and safety.
+Added: Disruption in the global economy has exacerbated employee turnover and led to continued labor shortages, particularly in the market for frontline employees in the production and distribution environments.
+Added: The labor force has been and may continue to be impacted by a number of factors related to macroeconomic and geopolitical uncertainty.
Additionally, competition in the labor marketplace for qualified employees has led to increased costs, such as higher wages in order to recruit and retain employees.
−Removed: A prolonged labor shortage or inflation in labor costs could have a significant impact on our results of operations.
+Added: A prolonged labor shortage or inflation in labor costs could have a significant impact on our business and financial performance.
We may not be able to renew collective bargaining agreements on satisfactory terms, or we could experience union activity, including labor disputes or work stoppages.
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We depend on third-party bottling and distribution companies for a significant portion of our business.
+Added: We license rights to third parties to bottle and distribute our products.
Net sales from our Beverage Concentrates segment represent sales of beverage concentrates to third-party bottling companies that we do not own.
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The majority of these bottlers’ business comes from selling either their own products or our competitors’ products.
−Removed: In addition, some of the products we manufacture are distributed by third parties.
+Added: In addition, some of the finished products we manufacture are distributed by third parties.
As independent companies, these bottlers and distributors make their own business decisions.
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In most cases, they are able to terminate their bottling and distribution arrangements with us without cause.
−Removed: We may need to increase support for our brands in their territories to protect our route to market and may not be able to pass price increases through to them.
+Added: In some cases, the license agreements include buy-out rights that allow us to exit for a fee, and we may have additional limited termination rights.
+Added: The termination of any material license arrangement could adversely affect our business and financial performance, and any disputes could be costly and divert management attention.
+Added: We may need to increase support for our brands in certain territories to maintain our route to market and may not be able to pass price increases through to them.
Their financial condition could also be adversely affected by conditions beyond their control, and their business could suffer as a result.
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We rely on the performance of a limited number of suppliers, manufacturers and order fulfillment companies for our brewers.
−Removed: A small number of companies manufacture the vast majority of our brewers, with a majority of the brewers we sell procured from one third-party brewer manufacturer.
−Removed: If these manufacturers are not able to scale their manufacturing operations to match increasing consumer demand for our brewers at competitive costs, our overall results will be negatively affected.
+Added: A small number of companies, located primarily in Asia, manufacture the vast majority of our brewers, with a majority of the brewers we sell procured from one third-party brewer manufacturer.
+Added: If these manufacturers are not able to perform, whether as a result of natural disaster, information technology failure, commercial or international trade dispute, or otherwise, or are not able to scale their manufacturing operations to match increasing consumer demand for our brewers at competitive costs, our overall results will be negatively affected.
GENERAL RISK FACTORS
Our financial results may be negatively impacted by recession, financial and credit market disruptions and other economic conditions.
−Removed: Changes in economic and financial conditions in the U.S., Canada, Mexico, the Caribbean or other geographies where we do business may negatively impact consumer confidence and consumer spending, which could result in a reduction in our sales volume and/or switching to lower price offerings.
+Added: Changes in economic and financial conditions in the U.S., Canada, Mexico or other geographies where we do business may negatively impact consumer confidence and consumer spending, which could result in a reduction in our sales volume and/or switching to lower price offerings.
We may be impacted by consumer price sensitivity associated with many of our products.
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Additionally, these disruptions could have a negative effect on our ability to raise capital through the issuance of unsecured commercial paper or senior notes.
+Added: Although we have no operations in Russia or Ukraine, we have experienced supply chain constraints and inflation in input costs, logistics, manufacturing and labor costs due to the impact of the conflict on the global economy.
+Added: If continued, the conflict between Russia and Ukraine could result in additional supply chain disruptions, volatility in fuel and commodity prices, and significant fluctuations in foreign exchange rates and interest rates, any of which could adversely impact our results of operations.
We also face counterparty risk for our cash investments and derivative instruments.
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While our operations are predominately in the U.S., we are exposed to foreign currency exchange rate risk with respect to our sales, expenses, profits, assets and liabilities denominated in the Mexican peso, the Canadian dollar and the Euro, as well as other foreign currencies in which we transact business.
−Removed: We may continue to hedge a small portion of our exposure to foreign currency fluctuations by utilizing derivative instruments for certain transactions.
−Removed: However, we are not protected against most foreign currency fluctuations.
As a result, our financial performance may be affected by changes in foreign currency exchange rates.
Moreover, any favorable or unfavorable impacts to gross profit, gross margin and income from operations from fluctuations in foreign currency exchange rates are likely to be inconsistent year over year.
−Removed: We continue to be exposed to foreign currency exchange rate risk that we may not be able to manage through derivative instruments and may incur material losses from such transactions utilizing derivative instruments.
Weather, natural disasters, water availability, and climate change or related legislation could adversely affect our business.
−Removed: Unseasonable or unusual weather, natural disasters or long-term climate changes are expected to add volatility to commodity prices and have the potential to disrupt the availability of raw materials, energy and fuel, our ability to produce and demand for our products.
−Removed: Unusually cool weather during the summer months or unusually warm weather during the winter months may result in reduced demand for our products and have a negative effect on our business and financial performance.
−Removed: Global climate change poses a serious threat to communities, businesses, farmers and ecosystems across the world.
+Added: Unseasonable or unusual weather, natural disasters or long-term climate changes could add volatility to commodity prices and have the potential to disrupt the availability of raw materials, energy and fuel, our ability to produce our products and may result in reduced demand for our products, which may have a negative effect on our business and financial performance.
+Added: Global climate change poses a threat to communities, businesses, farmers and ecosystems across the world.
Climate change is already affecting the agricultural sector, and disruptions to crop growing conditions are expected to increase with extreme weather events, increasing temperatures, and changing water availability.
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These laws and regulations apply to many aspects of our business including the manufacture, safety, sourcing, labeling, storing, transportation, marketing, advertising, distribution and sale of our products.
−Removed: Other laws and regulations that may impact our business relate to the environment, relations with distributors and retailers, employment, privacy, health and trade practices.
+Added: Other laws and regulations that may impact our business relate to competition, the environment, relations with distributors and retailers, employment, privacy, health and trade practices.
Our expanding international business will also expose us to economic factors, regulatory requirements, increasing competition and other risks associated with doing business in foreign countries.
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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 or significant challenges to our ability to continue to produce and sell products that generate a significant portion of our sales and profits.
−Removed: For example, changes in packaging laws or special taxes on soft drinks or ingredients could increase our costs.
+Added: For example, changes in laws related to packaging materials or the use or disposal of plastics or special taxes on soft drinks or ingredients could increase our costs.
In addition, changes in legislation imposing tariffs on or restricting the importation of our products or raw materials required to make our products, restricting the sale of K-Cup pods, requiring compostability of K-Cup pods, limiting the ability of consumers to put K-Cup pods into municipal waste or recycling streams could, at least for some period of time, cut off a significant source of our sales and profits.
−Removed: Changes in bottle deposit and recycling laws, including requiring manufacturers of K-Cup pods to pay responsible producer or other fees to either governmental or non-governmental entities in connection with the collection, recycling, or disposition of K-Cup pods, which may support our corporate responsibility objectives and goals, but could increase our costs.
+Added: Changes in bottle deposit and recycling laws, including requiring manufacturers of K-Cup pods to pay responsible producer or other fees to either governmental or non-governmental entities in connection with the collection, recycling, or disposition of K-Cup pods, may support our corporate responsibility objectives and goals, but could increase our costs.
We depend on key information systems and third-party service providers.
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We rely on third-party providers for a number of key information systems and business processing services, including hosting, collecting, storing and transmitting our primary data center and processing various accounting and transactional services.
−Removed: An offshore shared service center managed by third parties provides lower cost services to conduct our business, including a number of accounting, tax, and computing functions.
+Added: An offshore shared service center managed by third parties provides lower cost services to conduct our business, including a number of accounting, tax, IT programming and monitoring services, and computing functions.
If any of these third-party service providers or vendors do not perform effectively, or if we fail to adequately monitor their performance (including compliance with service level agreements or regulatory or legal requirements), we may have to incur additional costs to correct errors made by such service providers, our reputation could be harmed or we could be subject to litigation, claims, legal or regulatory proceedings, inquiries or investigations.
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and executing various digital marketing and consumer promotion activities.
−Removed: Global shared service centers managed by third parties provide an increasing amount of services to conduct our business, including a number of accounting, internal control, human resources and computing functions.
+Added: Global shared service centers managed by third parties provide an increasing amount of services to conduct our business, including a number of accounting, internal control, information technology, human resources and computing functions.
Continuity of business applications and services has been, and may in the future be, disrupted by events such as infection by viruses or malware.
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Litigation or legal proceedings could expose us to significant liabilities and damage our reputation.
−Removed: We have been, and in the future may be, a party to various litigation claims and legal proceedings that may include employment, tort, real estate, antitrust, environmental, recycling/sustainability, intellectual property, commercial, securities, false advertising, packaging, product labeling, consumer protection and other claims.
+Added: We have been, and in the future may be, a party to various litigation claims and legal proceedings that may include employment, tort, real estate, antitrust, environmental, recycling/sustainability, intellectual property, commercial, securities, false advertising, packaging, product labeling, consumer protection, discriminatory pricing and other claims.
We have been, and in the future may be, a defendant in class action litigation, including litigation regarding employment practices, product labeling, including under California’s “Proposition 65,” public statements and disclosures under securities laws, antitrust, advertising, consumer protection and wage and hour laws.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.