þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009 | ||
or
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Delaware
|
98-0517725 | |
(State or other jurisdiction
of
incorporation or organization) |
(I.R.S. Employer
Identification Number) |
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|
COMMON STOCK, $0.01 PAR VALUE | NEW YORK STOCK EXCHANGE |
Large Accelerated Filer þ | Accelerated Filer o | Non-Accelerated Filer o | Smaller Reporting Company o |
i
| the highly competitive markets in which we operate and our ability to compete with companies that have significant financial resources; | |
| changes in consumer preferences, trends and health concerns; | |
| maintaining our relationships with our large retail customers; | |
| dependence on third party bottling and distribution companies; | |
| recession, financial and credit market disruptions and other economic conditions; | |
| future impairment of our goodwill and other intangible assets; | |
| the need to service a substantial amount of debt; | |
| our ability to comply with, or changes in, governmental regulations in the countries in which we operate; | |
| maintaining our relationships with our allied brands; | |
| litigation claims or legal proceedings against us; | |
| increases in the cost of employee benefits; | |
| increases in cost of materials or supplies used in our business; | |
| shortages of materials used in our business; | |
| substantial disruption at our manufacturing or distribution facilities; | |
| the need for substantial investment and restructuring at our production, distribution and other facilities; | |
| strikes or work stoppages; | |
| our products meeting health and safety standards or contamination of our products; | |
| infringement of our intellectual property rights by third parties, intellectual property claims against us or adverse events regarding licensed intellectual property; | |
| our ability to retain or recruit qualified personnel; | |
| disruptions to our information systems and third-party service providers; | |
| weather and climate changes; and | |
| other factors discussed in Item 1A under Risks Related to Our Business and elsewhere in this Annual Report on Form 10-K. |
ii
3
38
47
116
117
121
122
123
124
125
126
133
134
135
ITEM 1.
BUSINESS
#1 flavored CSD company in the United States
Approximately 75% of our volume from brands that are
either #1 or #2 in their category
#3 North American liquid refreshment beverage business
$5.5 billion of net sales in 2009 from the United States
(90%), Canada (4%) and Mexico and the Caribbean (6%)
On May 1, 2008, Cadbury plc (Cadbury plc)
became the parent company of Cadbury Schweppes. Cadbury plc and
Cadbury Schweppes are hereafter collectively referred to as
Cadbury unless otherwise indicated.
On May 7, 2008, Cadbury plc transferred its Americas
Beverages business to us and we became an independent
publicly-traded company listed on the New York Stock Exchange
under the symbol DPS. In return for the transfer of
the Americas Beverages business, we distributed our common stock
to Cadbury plc shareholders. As of the date of distribution, a
total of 800 million shares of our common stock, par value
$0.01 per share, and 15 million shares of our undesignated
preferred stock were authorized. On the date of distribution,
253.7 million shares of our common stock were issued and
outstanding and no shares of preferred stock were issued.
1
Table of Contents
#1 in its flavor category and #2 overall flavored CSD in the
United States
Distinguished by its unique blend of 23 flavors and loyal
consumer following
Flavors include regular, diet and cherry
Oldest major soft drink in the United States, introduced in 1885
#1 orange CSD in the United States
Flavors include orange, diet and other fruits
Licensed to us as a CSD by the Sunkist Growers Association since
1986
#2 lemon-lime CSD in the United States
Flavors include regular, diet and cherry antioxidant
The original Un-Cola, created in 1929
#1 root beer in the United States
Flavors include regular, diet and cream soda
A classic all-American beverage first sold at a veterans
parade in 1919
#1 ginger ale in the United States and Canada
Brand includes club soda, tonic, green tea ginger ale and other
mixers
Created in Toronto, Canada in 1904 and introduced in the United
States in 1919
#2 orange CSD in the United States
Flavors include orange, diet and other fruits
Brand began as the all-natural orange flavor drink in 1906
2
Table of Contents
#2 ginger ale in the United States and Canada
Brand includes club soda, tonic and other mixers
First carbonated beverage in the world, invented in 1783
#1 grapefruit CSD in the United States and a leading grapefruit
CSD in Mexico
Founded in 1938
#1 carbonated mineral water brand in Mexico
Brand includes Flavors, Twist and Naturel
Mexicos oldest mineral water
A leading ready-to-drink tea in the United States
A full range of tea products including premium, super premium
and value teas
Brand also includes premium juices and juice drinks
Founded in Brooklyn, New York in 1972
#1 apple juice and #1 apple sauce brand in the United States
Juice products include apple and other fruit juices, Motts
Plus and Motts for Tots
Apple sauce products include regular, unsweetened, flavored and
organic
Brand began as a line of apple cider and vinegar offerings in
1842
#1 fruit punch brand in the United States
Brand includes a variety of fruit flavored and reduced calorie
juice drinks
Developed originally as an ice cream topping known as
Leos Hawaiian Punch in 1934
A leading spicy tomato juice brand in the United States, Canada
and Mexico
Key ingredient in Canadas popular cocktail, the Bloody
Caesar
Created in 1969
#1 portfolio of mixer brands in the United States
#1 Bloody Mary brand (Mr & Mrs T) in the United States
Leading mixers (Margaritaville and Roses) in their flavor
categories
Table of Contents
4
Table of Contents
5
Table of Contents
6
Table of Contents
7
Table of Contents
8
Table of Contents
9
Table of Contents
10
Table of Contents
11
Table of Contents
12
Table of Contents
ITEM 1A.
RISK
FACTORS
13
Table of Contents
14
Table of Contents
requiring a portion of our cash flow from operations to make
interest payments on this debt; and
increasing our vulnerability to general adverse economic and
industry conditions.
15
Table of Contents
16
Table of Contents
17
Table of Contents
18
Table of Contents
ITEM 1B.
UNRESOLVED
STAFF COMMENTS
ITEM 2.
PROPERTIES
ITEM 3.
LEGAL
PROCEEDINGS
ITEM 4.
SUBMISSION
OF MATTERS TO A VOTE OF SECURITY HOLDERS
ITEM 5.
MARKET
FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
19
Table of Contents
20
Table of Contents
Assumes Initial Investment of $100
December 2009
21
Table of Contents
ITEM 6.
SELECTED
FINANCIAL DATA
Fiscal Year
2009
2008
2007
2006
2005
$
5,531
$
5,710
$
5,695
$
4,700
$
3,205
3,297
3,120
3,131
2,741
2,085
1,085
(168
)
1,004
1,018
906
$
555
$
(312
)
$
497
$
510
$
477
$
2.18
$
(1.23
)
$
1.96
$
2.01
$
1.88
$
2.17
$
(1.23
)
$
1.96
$
2.01
$
1.88
$
0.15
$
$
$
$
$
8,776
$
8,638
$
10,528
$
9,346
$
7,433
126
708
404
2,960
3,522
2,912
3,084
2,858
1,775
1,708
1,460
1,321
1,013
3,187
2,607
5,021
3,250
2,426
$
865
$
709
$
603
$
581
$
583
(251
)
1,074
(1,087
)
(502
)
283
(554
)
(1,625
)
515
(72
)
(815
)
(1)
The 2008 loss from operations and net loss reflect non-cash
impairment charges of $1,039 million and $696 million
($1,039 million net of tax benefit of $343 million),
respectively. Refer to Note 7 of the Notes to our Audited
Consolidated Financial Statements for further information.
(2)
Earnings (loss) per share (EPS) are computed by
dividing net income (loss) by the weighted average number of
common shares outstanding for the period. For all periods prior
to May 7, 2008, the number of basic shares used is the
number of shares outstanding on May 7, 2008, as no common
stock of DPS was traded prior to May 7, 2008 and no DPS
equity awards were outstanding for the prior periods. Subsequent
to May 7, 2008, the number of basic shares includes
approximately 500,000 shares related to former Cadbury
Schweppes benefit plans converted to DPS shares on a daily
volume weighted average.
22
Table of Contents
ITEM 7.
MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
23
Table of Contents
Strengthens our
route-to-market
by creating a third consolidated bottling system in addition to
the
Coca-Cola
Company
(Coca-Cola)
and PepsiCo, Inc. (PepsiCo) affiliated systems. In
addition, by owning a significant portion of our manufacturing
and distribution network we are able to improve focus on our
owned and licensed brands, especially brands such as 7UP,
Sunkist soda, A&W and Snapple, which do not have a large
presence in the
Coca-Cola
and PepsiCo affiliated bottler systems.
Provides opportunities for net sales and profit growth through
the alignment of the economic interests of our brand ownership
and our manufacturing and distribution businesses. For example,
we can focus on maximizing profitability for our company as a
whole rather than focusing on profitability generated from
either the sale of concentrates or the manufacturing and
distribution of our products.
Enables us to be more flexible and responsive to the changing
needs of our large retail customers, including by coordinating
sales, service, distribution, promotions and product launches.
Allows us to more fully leverage our scale and reduce costs by
creating greater geographic manufacturing and distribution
coverage.
Changes in economic factors.
We believe
changes in economic factors could impact consumers
purchasing power which may result in a decrease in purchases of
our premium beverages and single-serve packages.
Increased health consciousness.
We believe the
main beneficiaries of this trend include diet drinks,
ready-to-drink
teas and bottled waters.
24
Table of Contents
Changes in lifestyle.
We believe changes in
lifestyle will continue to drive increased sales of single-serve
beverages, which typically have higher margins.
Growing demographic segments in the United
States.
We believe marketing and product
innovations that target fast growing population segments, such
as the Hispanic community in the United States, will drive
further market growth.
Product and packaging innovation.
We believe
brand owners and bottling companies will continue to create new
products and packages such as beverages with new ingredients and
new premium flavors, as well as innovative convenient packaging
that address changes in consumer tastes and preferences.
Changing retailer landscape.
As retailers
continue to consolidate, we believe retailers will support
consumer product companies that can provide an attractive
portfolio of products, a strong value proposition and efficient
delivery.
Recent volatility in raw material costs.
The
costs of a substantial portion of the raw materials used in the
beverage industry are dependent on commodity prices for
aluminum, natural gas, resins, corn, pulp and other commodities.
Commodity prices volatility has exerted pressure on industry
margins.
25
Table of Contents
26
Table of Contents
Net sales totaled $5,531 million for the year ended
December 31, 2009, a decrease of $179 million, or 3%,
from the year ended December 31, 2008, largely due to the
termination of our distribution agreement with Hansen Natural
Corporation (Hansen) and unfavorable foreign
currency rates in Mexico.
Net income for the year ended December 31, 2009, was
$555 million, compared to a net loss of $312 million
for the year ended December 31, 2008, an increase of
$867 million, or 278%, primarily due to the absence of
impairment of goodwill and intangible assets and favorable
commodity costs in the current year.
Diluted earnings per share was $2.17 for the year ended
December 31, 2009, compared with a diluted loss per share
of $1.23 the prior year.
27
Table of Contents
During the fourth quarter of 2009, the Companys Board of
Directors (the Board) declared DPS first
dividend of $0.15 per share, payable in the first quarter of
2010. Subsequent to December 31, 2009, the Board declared
another dividend of $0.15 per share, payable in the second
quarter of 2010.
During the fourth quarter of 2009, the Board authorized the
repurchase of up to $200 million of the Companys
outstanding common stock. Subsequent to December 31, 2009,
the Board authorized the repurchase of an additional
$800 million of the Companys outstanding common
stock, for a total of $1 billion authorized.
DPS agreed to license certain brands to PepsiCo as a result of
PepsiCos acquisitions of PBG and PepsiAmericas, Inc in
February 2010. As part of the transaction, DPS received a
one-time cash payment of $900 million, which will be
recorded as deferred revenue in 2010 and recognized as net sales
ratably over the estimated
25-year
life
of the customer relationship.
DPS completed the issuance of $850 million aggregate
principal amount of senior unsecured notes consisting of
$400 million of 1.70% senior notes (the 2011
Notes) and $450 million of 2.35% senior notes
(the 2012 Notes) due December 21, 2011 and
December 21, 2012, respectively. Proceeds from the
issuance, as well as funds from the revolving credit facility
(the Revolver), were used to make optional
repayments of $1,805 million, which represented the
remaining principal balance on the senior unsecured term loan A
(Term Loan A) for the year ended December 31,
2009.
Subsequent to December 31, 2009, the Company made optional
repayments of $405 million, which represented the
outstanding principal balance on the Revolver as of
December 31, 2009.
28
Table of Contents
For the Year Ended December 31,
2009
2008
Percentage
Dollars
Percent
Dollars
Percent
Change
$
5,531
100.0
%
$
5,710
100.0
%
(3.1
)%
2,234
40.4
2,590
45.4
(13.7
)
3,297
59.6
3,120
54.6
5.7
2,135
38.6
2,075
36.3
2.9
117
2.1
113
2.0
3.5
1,039
18.2
NM
57
1.0
NM
(40
)
0.7
4
0.1
NM
1,085
19.6
(168
)
(3.0
)
745.8
243
4.4
257
4.5
(5.4
)
(4
)
(0.1
)
(32
)
(0.6
)
(87.5
)
(22
)
(0.4
)
(18
)
(0.3
)
22.2
868
15.7
(375
)
(6.6
)
331.5
315
5.7
(61
)
(1.1
)
616.4
553
10.0
(314
)
(5.5
)
276.1
2
2
NM
$
555
10.0
%
$
(312
)
(5.5
)%
277.9
%
29
Table of Contents
30
Table of Contents
For the Year Ended
December 31,
2009
2008
$
1,063
$
983
4,111
4,305
357
422
$
5,531
$
5,710
For the Year Ended
December 31,
2009
2008
$
683
$
622
573
483
54
86
1,310
1,191
265
259
1,039
57
(40
)
4
1,085
(168
)
(239
)
(225
)
22
18
$
868
$
(375
)
31
Table of Contents
For the Year Ended
December 31,
Amount
2009
2008
Change
$
1,063
$
983
$
80
683
622
61
For the Year Ended
December 31,
Amount
2009
2008
Change
$
4,111
$
4,305
$
(194
)
573
483
90
32
Table of Contents
For the Year Ended
December 31,
Amount
2009
2008
Change
$
357
$
422
$
(65
)
54
86
(32
)
33
Table of Contents
2009
2008
$
$
33
24
(5
)
11
5
(1)
DPS incurred transaction costs and other one time separation
costs of $33 million for the year ended December 31,
2008. These costs are included in SG&A expenses in the
statement of operations.
(2)
The Company incurred $24 million of costs for the year
ended December 31, 2008, associated with the
$1.7 billion bridge loan facility which was entered into to
reduce financing risks and facilitate Cadburys separation
of the Company. Financing fees of $21 million, which were
expensed when the bridge loan facility was terminated on
April 30, 2008, and $5 million of interest expense
were included as a component of interest expense, partially
offset by $2 million in interest income while in escrow.
(3)
The Company incurred a charge to net income of $5 million
($9 million tax charge offset by $4 million of
indemnity income) caused by a tax election made by Cadbury in
December 2008.
34
Table of Contents
For the Year Ended December 31,
2008
2007
Percentage
Dollars
Percent
Dollars
Percent
Change
$
5,710
100.0
%
$
5,695
100.0
%
0.3
%
2,590
45.4
2,564
45.0
1.0
3,120
54.6
3,131
55.0
(0.4
)
2,075
36.3
2,018
35.5
2.8
113
2.0
98
1.7
15.3
1,039
18.2
6
0.1
NM
57
1.0
76
1.3
(25.0
)
4
0.1
(71
)
(1.2
)
NM
(168
)
(3.0
)
1,004
17.6
NM
257
4.5
253
4.4
1.6
(32
)
(0.6
)
(64
)
(1.1
)
(50.0
)
(18
)
(0.3
)
(2
)
NM
(375
)
(6.6
)
817
14.3
NM
(61
)
(1.1
)
322
5.6
NM
(314
)
(5.5
)
495
8.7
NM
2
2
$
(312
)
(5.5
)%
$
497
8.7
%
NM
35
Table of Contents
36
Table of Contents
For the Year Ended
December 31,
2008
2007
$
983
$
984
4,305
4,295
422
416
$
5,710
$
5,695
37
Table of Contents
For the Year Ended
December 31,
2008
2007
$
622
$
608
483
564
86
96
1,191
1,268
259
253
1,039
6
57
76
4
(71
)
(168
)
1,004
(225
)
(189
)
18
2
$
(375
)
$
817
For the Year Ended
December 31,
Amount
2008
2007
Change
$
983
$
984
$
(1
)
622
608
14
Table of Contents
For the Year Ended
December 31,
Amount
2008
2007
Change
$
4,305
$
4,295
$
10
483
564
(81
)
For the Year Ended
December 31,
Amount
2008
2007
Change
$
422
$
416
$
6
86
96
(10
)
39
Table of Contents
$
11
1,375
(70
)
(140
)
(2,909
)
$
(1,733
)
Contributions
Distributions
$
$
(894
)
(809
)
(520
)
318
(19
)
(59
)
$
259
$
(2,242
)
40
Table of Contents
changes in economic factors could impact consumers
purchasing power;
we have substantial third party debt as of December 31,
2009; and
we will continue to make capital expenditures to complete our
new manufacturing capacity, upgrade our existing plants and
distribution fleet of trucks, replace and expand our cold drink
equipment and make investments in IT systems in order to improve
operating efficiencies and lower costs.
On February 26, 2010, the Company received a one-time cash
payment of $900 million for licensing certain brands to
PepsiCo, on completion of PepsiCos acquisition of PBG and
PAS.
41
Table of Contents
the Term Loan A in an aggregate principal amount of
$2.2 billion with a term of five years, which was fully
repaid in December 2009 prior to its maturity; and
the Revolver in an aggregate principal amount of
$500 million with a maturity in 2013. The balance of
principal borrowings under the Revolver was $405 million
and $0 as of December 31, 2009 and 2008, respectively. Up
to $75 million of the Revolver is available for the
issuance of letters of credit, of which $41 million and
$38 million was utilized as of December 31, 2009 and
2008, respectively. $54 million was available for
additional borrowings or letters of credit as of
December 31, 2009.
42
Table of Contents
43
Table of Contents
44
Table of Contents
For the Year Ended December 31,
2009
2008
2007
$
865
$
709
$
603
(251
)
1,074
(1,087
)
(554
)
(1,625
)
515
45
Table of Contents
For the Year Ended
December 31,
2009
2008
$
$
2,200
405
850
1,700
1,700
1,255
5,600
(1,805
)
(395
)
(1,700
)
(4
)
(5
)
(1,809
)
(2,100
)
$
(554
)
$
3,500
(1)
The carrying amount includes an adjustment of $8 million
related to the change in the fair value of interest rate swaps
designated as fair value hedges on the 2011 and 2012 Notes. See
Note 10 to our Audited Consolidated Financial Statements
for further information regarding derivatives.
46
Table of Contents
For the Year Ended
December 31,
2009
2008
$
$
1,615
(4,664
)
$
$
(3,049
)
Table of Contents
Payments Due in Year
After
Total
2010
2011
2012
2013
2014
2014
$
2,550
$
$
400
$
450
$
250
$
$
1,450
405
405
16
3
3
4
4
2
1,399
144
158
157
115
101
724
363
72
64
50
44
32
101
629
356
109
70
58
17
19
201
16
17
18
20
20
110
127
15
7
7
7
7
84
$
5,690
$
606
$
758
$
756
$
903
$
179
$
2,488
(1)
Amounts represent capitalized lease obligations, net of
interest. Interest in respect of capital leases is included
under the caption Interest payments on this table.
(2)
Amounts represent our estimated interest payments based on:
(a) projected interest rates for floating rate debt,
(b) the impact of interest rate swaps which convert
variable interest rates to fixed rates, (c) specified
interest rates for fixed rate debt, (d) capital lease
amortization schedules and (e) debt amortization schedules.
(3)
Amounts represent minimum rental commitment under non-cancelable
operating leases.
(4)
Amounts represent payments under agreements to purchase goods or
services that are legally binding and that specify all
significant terms, including capital obligations and long-term
contractual obligations.
(5)
Amounts represent estimated pension and postretirement benefit
payments for U.S. and
non-U.S.
defined benefit plans.
(6)
Additional amounts payable to Kraft of approximately
$3 million are excluded from the table above. Due to
uncertainty regarding the timing of payments associated with
these liabilities, we are unable to make a reasonable estimate
of the amount and period in which these liabilities might be
paid.
(7)
Subsequent to December 31, 2009, the Company made optional
repayments of $405 million which represented the outstanding
principal balance on the Revolver as of December 31, 2009.
Interest payments associated with the Revolver assumed repayment
of the principal balance in 2013 at its maturity. As such,
$58 million of interest payments should be subsequently
excluded.
48
Table of Contents
49
Table of Contents
50
Table of Contents
For the Year Ended December 31, 2008
Impairment
Income Tax
Impact on Net
Charge
Benefit
Income
$
278
$
(112
)
$
166
581
(220
)
361
180
(11
)
169
$
1,039
$
(343
)
$
696
(1)
Included within the WD reporting unit.
(2)
Includes the DSD reporting units distribution rights,
brand franchise rights, and bottler agreements which convey
certain rights to DPS, including the rights to manufacture,
distribute and sell products of the licensor within specified
territories.
(3)
Includes all goodwill recorded in the DSD reporting unit which
related to our bottler acquisitions in 2006 and 2007.
3.2
%
2.5
%
8.9
%
2.1
%
(1)
Represents the operating income growth rate used to determine
terminal value.
(2)
Represents our targeted weighted average discount rate of 7.0%
plus the impact of a specific reporting unit risk premiums to
account for the estimated additional uncertainty associated with
our future cash flows. The risk premium primarily reflects the
uncertainty related to: (1) the continued impact of the
challenging marketplace and difficult macroeconomic conditions;
(2) the volatility related to key input costs; and
(3) the consumer, customer, competitor, and supplier
reaction to our marketplace pricing actions. Factors inherent in
determining our weighted average discount rate are: (1) the
volatility of our common stock; (2) expected interest costs
on debt and debt market conditions; and (3) the amounts and
relationships of targeted debt and equity capital.
(3)
Represents a charge as a percent of revenues to the estimated
future cash flows attributable to our distribution rights for
the estimated required economic returns on investments in
property, plant, and equipment, net working capital, customer
relationships, and assembled workforce.
51
Table of Contents
Useful Life
5 to 15 years
5 to 15 years
5 to 10 years
52
Table of Contents
53
Table of Contents
ITEM 7A.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
54
Table of Contents
55
ITEM 8.
FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA
57
59
60
61
62
63
56
Table of Contents
57
Table of Contents
58
Table of Contents
For the Year Ended December 31,
2009
2008
2007
(In millions, except per share data)
$
5,531
$
5,710
$
5,695
2,234
2,590
2,564
3,297
3,120
3,131
2,135
2,075
2,018
117
113
98
1,039
6
57
76
(40
)
4
(71
)
1,085
(168
)
1,004
243
257
253
(4
)
(32
)
(64
)
(22
)
(18
)
(2
)
868
(375
)
817
315
(61
)
322
553
(314
)
495
2
2
2
$
555
$
(312
)
$
497
$
2.18
$
(1.23
)
$
1.96
$
2.17
$
(1.23
)
$
1.96
254.2
254.0
253.7
255.2
254.0
253.7
59
Table of Contents
60
Table of Contents
For the Year Ended December 31,
2009
2008
2007
(In millions)
$
555
$
(312
)
$
497
167
141
120
40
54
49
17
13
30
21
1,039
6
3
5
11
19
9
21
103
(241
)
55
(39
)
12
(71
)
(18
)
8
10
(3
)
(6
)
5
(4
)
(6
)
11
(57
)
3
57
(14
)
(23
)
(20
)
(1
)
(35
)
(5
)
(8
)
80
(48
)
(5
)
(70
)
12
(2
)
48
10
(50
)
(6
)
(10
)
865
709
603
(30
)
(8
)
(1
)
(2
)
69
98
(317
)
(304
)
(230
)
5
4
6
(165
)
(1,937
)
1,540
1,008
(251
)
1,074
(1,087
)
1,615
2,845
850
1,700
1,700
1
405
2,200
(1,805
)
(395
)
(4,664
)
(3,455
)
(1,700
)
(2
)
(106
)
(2,065
)
(213
)
94
1,334
(3
)
(4
)
4
(554
)
(1,625
)
515
60
158
31
6
(11
)
1
214
67
35
$
280
$
214
$
67
61
Table of Contents
Accumulated
Additional
Retained
Other
Common Stock Issued
Paid-In
Earnings
Cadburys Net
Comprehensive
Comprehensive
Shares
Amount
Capital
(Deficit)
Investment
Income (Loss)
Total Equity
Income (Loss)
(In millions)
$
$
$
$
5,001
$
20
$
5,021
$
516
(430
)
118
(312
)
(312
)
259
259
(2,242
)
(2,242
)
253.7
3
3,133
(3,136
)
7
7
(43
)
(43
)
(43
)
(2
)
(2
)
(20
)
(20
)
(20
)
(61
)
(61
)
(61
)
253.7
3
3,140
(430
)
(106
)
2,607
(436
)
0.4
555
555
555
(38
)
(38
)
16
16
7
7
7
18
18
18
22
22
22
254.1
$
3
$
3,156
$
87
$
$
(59
)
$
3,187
$
602
62
Table of Contents
1.
Business
and Basis of Presentation
63
Table of Contents
2.
Significant
Accounting Policies
64
Table of Contents
2009
2008
2007
$
13
$
20
$
14
3
5
11
(9
)
(12
)
(5
)
$
7
$
13
$
20
Useful Life
40 years
10 years
5 years
4 to 7 years
3 to 5 years
65
Table of Contents
Useful Life
5 to 15 years
5 to 15 years
5 to 10 years
66
Table of Contents
67
Table of Contents
68
Table of Contents
69
Table of Contents
End of Year Rates
Annual Average Rates
13.07
13.61
13.67
11.07
10.91
10.91
End of Year Rates
Annual Average Rates
1.05
1.15
1.22
1.06
1.00
1.07
The portion of the fair value update to U.S. GAAP deferred
by the FASB in February 2008 for all non-financial assets and
non-financial liabilities, except those that are recognized or
disclosed at fair value in the financial statements on a
recurring basis (at least annually).
70
Table of Contents
The establishment of accounting and reporting standards for the
noncontrolling interest in a subsidiary and the deconsolidation
of a subsidiary, including disclosure requirements that clearly
identify and distinguish between the controlling and
noncontrolling interests and that separate the disclosure of
income attributable to the controlling and noncontrolling
interests.
The change in the factors that should be considered in
developing assumptions about renewal or extension used in
estimating the useful life of a recognized intangible asset with
a finite life under U.S. GAAP. The update is intended to
improve the consistency between the useful life of a recognized
intangible asset and the period of expected cash flows used to
measure the fair value of the asset. The measurement provisions
of this update applied only to intangible assets acquired after
January 1, 2009.
The change in the disclosure requirements for derivative
instruments and hedging activities, requiring enhanced
disclosures about how and why an entity uses derivative
instruments, how derivative instruments and related hedged items
are accounted for, and how derivative instruments and related
hedged items affect an entitys financial position,
financial performance and cash flows. The enhanced disclosure
requirements are included within Note 10.
The change in accounting for business acquisitions, including
the impact on financial statements both on the acquisition date
and in subsequent periods. The Company will apply the guidance
on all future business combinations subsequent to
January 1, 2009.
The establishment of general standards regarding the accounting
for and disclosure of events that occur after the balance sheet
date but before financial statements are issued or are available
to be issued. The additional disclosures are included within the
section
Basis of Presentation
in Note 1.
The change in the disclosure requirements about the fair value
of financial instruments in interim financial statements as well
as in annual financial statements. The additional disclosures
are included within Note 14.
The change in the disclosure requirements, which require
enhanced annual disclosures about the plan assets of a
companys defined benefit pension and other postretirement
plans intended to provide users of financial statements with a
greater understanding of: (1) how investment allocation
decisions are made, including the factors that are pertinent to
an understanding of investment policies and strategies;
(2) the major categories of plan assets; (3) the
inputs and valuation techniques used to measure the fair value
of plan assets, including those using the net asset value per
share to estimate the fair value of an alternative investment;
(4) the effect of fair value measurements using significant
unobservable inputs (Level 3) on changes in plan
assets for the period; and (5) significant concentrations
of risk within plan assets. The additional disclosures are
included within Note 15.
3.
Accounting
for the Separation from Cadbury
71
Table of Contents
$
11
1,375
(70
)
(140
)
(2,909
)
$
(1,733
)
2009
2008
$
$
33
24
(5
)
11
5
(1)
DPS incurred transaction costs and other one time separation
costs of $33 million for the year ended December 31,
2008. These costs are included in selling, general and
administrative expenses in the Consolidated Statement of
Operations.
(2)
The Company incurred $24 million of costs for the year
ended December 31, 2008, associated with the
$1.7 billion bridge loan facility which was entered into to
reduce financing risks and facilitate Cadburys separation
of the Company. Financing fees of $21 million, which were
expensed when the bridge loan facility was terminated on
April 30, 2008, and $5 million of interest expense
were included as a component of interest expense, partially
offset by $2 million in interest income while in escrow.
(3)
The Company incurred a charge to net income of $5 million
($9 million tax charge offset by $4 million of
indemnity income) caused by a tax election made by Cadbury in
December 2008.
72
Table of Contents
Contributions
Distributions
$
$
(894
)
(809
)
(520
)
318
(19
)
(59
)
$
259
$
(2,242
)
4.
Inventories
December 31,
December 31,
2009
2008
$
105
$
78
4
4
193
231
302
313
(40
)
(50
)
$
262
$
263
73
Table of Contents
5.
Property,
Plant and Equipment
December 31,
December 31,
2009
2008
$
90
$
84
341
272
995
911
201
157
136
111
135
141
1,898
1,676
(789
)
(686
)
$
1,109
$
990
6.
Investments
in Unconsolidated Subsidiaries
74
Table of Contents
7.
Goodwill
and Other Intangible Assets
Beverage
WD Reporting
DSD Reporting
Latin America
Concentrates
Unit(3)
Unit(3)
Beverages
Total
$
1,731
$
1,220
$
195
$
37
$
3,183
1,731
1,220
195
37
3,183
(8
)
(8
)
(180
)
(180
)
2
(7
)
(7
)
(12
)
1,733
1,220
180
30
3,163
(180
)
(180
)
1,733
1,220
30
2,983
(1
)
1
1,732
1,220
180
31
3,163
(180
)
(180
)
$
1,732
$
1,220
$
$
31
$
2,983
(1)
The Company acquired Southeast-Atlantic Beverage Corporation
(SeaBev) on July 11, 2007. The Company
completed its fair value assessment of the assets acquired and
liabilities assumed of this acquisition during the first quarter
2008, resulting in a $1 million increase in the DSD
reporting units goodwill. During the second quarter of
2008, the Company made a tax election related to the SeaBev
acquisition which resulted in a decrease of $9 million to
the DSD reporting units goodwill.
(2)
DPS annual impairment analysis, performed as of
December 31, 2008, resulted in non-cash impairment charges
of $180 million for the year ended December 31, 2008,
which are reported in the line item impairment of goodwill and
intangible assets in the Companys Consolidated Statements
of Operations.
(3)
The Packaged Beverages segment is comprised of two reporting
units, DSD and the Warehouse Direct System (WD).
75
Table of Contents
December 31, 2009
December 31, 2008
Gross
Accumulated
Net
Gross
Accumulated
Net
Amount
Amortization
Amount
Amount
Amortization
Amount
$
2,652
$
$
2,652
$
2,647
$
$
2,647
4
4
8
8
29
(22
)
7
29
(21
)
8
76
(45
)
31
76
(33
)
43
21
(17
)
4
24
(14
)
10
2
(2
)
2
(2
)
$
2,788
$
(86
)
$
2,702
$
2,782
$
(70
)
$
2,712
(1)
In 2009, intangible brands with indefinite lives increased due
to a $5 million change in foreign currency.
(2)
In 2009, the Company sold indefinite lived bottler agreements
and acquired indefinite lived distribution rights as well as
terminated a finite-lived agreement to distribute a third
partys branded beverages. The Company recorded one-time
gains of $62 million in 2009 as a component of other
operating income in the audited Consolidated Statement of
Operations.
$
17
8
4
4
4
76
Table of Contents
For the Year Ended December 31, 2008
Impairment
Income Tax
Impact on
Charge
Benefit
Net Income
$
278
$
(112
)
$
166
581
(220
)
361
180
(11
)
169
$
1,039
$
(343
)
$
696
(1)
Included within the WD reporting unit.
(2)
Includes the DSD reporting units distribution rights,
brand franchise rights, and bottler agreements which convey
certain rights to DPS, including the rights to manufacture,
distribute and sell products of the licensor within specified
territories.
(3)
Includes all goodwill recorded in the DSD reporting unit which
related to our bottler acquisitions in 2006 and 2007.
77
Table of Contents
3.2
%
2.5
%
8.9
%
2.1
%
(1)
Represents the operating income growth rate used to determine
terminal value.
(2)
Represents the Companys targeted weighted average discount
rate of 7.0% plus the impact of specific reporting unit risk
premiums to account for the estimated additional uncertainty
associated with DPS future cash flows. The risk premium
primarily reflects the uncertainty related to: (1) the
continued impact of the challenging marketplace and difficult
macroeconomic conditions; (2) the volatility related to key
input costs; and (3) the consumer, customer, competitor,
and supplier reaction to the Companys marketplace pricing
actions. Factors inherent in determining DPS weighted
average discount rate are: (1) the volatility of DPS
common stock; (2) expected interest costs on debt and debt
market conditions; and (3) the amounts and relationships of
targeted debt and equity capital.
(3)
Represents a charge as a percent of revenues to the estimated
future cash flows attributable to the Companys
distribution rights for the estimated required economic returns
on investments in property, plant, and equipment, net working
capital, customer relationships, and assembled workforce.
8.
Accounts
Payable and Accrued Expenses
December 31,
December 31,
2009
2008
$
252
$
234
209
177
126
86
68
59
24
58
171
182
$
850
$
796
78
Table of Contents
9.
Long-term
Obligations
December 31,
December 31,
2009
2008
$
2,542
$
1,700
405
1,805
2,947
3,505
13
17
$
2,960
$
3,522
(1)
The carrying amount includes an adjustment of $8 million
related to the change in the fair value of interest rate swaps
designated as fair value hedges on the 2011 and 2012 Notes. See
Note 10 for further information regarding derivatives.
79
Table of Contents
the Term Loan A facility in an aggregate principal amount of
$2,200 million with a term of five years, which was fully
repaid in December 2009 prior to its maturity; and
the Revolver in an aggregate principal amount of
$500 million with a maturity in 2013. The balance of
principal borrowings under the Revolver was $405 million
and $0 as of December 31, 2009 and 2008, respectively. Up
to $75 million of the Revolver is available for the
issuance of letters of credit, of which $41 million and
$38 million was utilized as of December 31, 2009 and
2008, respectively. $54 million was available for
additional borrowings or letters of credit as of
December 31, 2009.
80
Table of Contents
81
Table of Contents
$
400
450
655
1,450
10.
Derivatives
interest rates;
foreign exchange rates; and
commodity prices, affecting the cost of raw materials.
82
Table of Contents
83
Table of Contents
84
Table of Contents
December 31,
December 31,
Balance Sheet Location
2009
2008
Prepaid expenses and other current assets
$
6
$
Other non-current assets
Prepaid expenses and other current assets
1
Other non-current assets
9
$
16
$
Accounts payable and accrued expenses
$
$
32
Accounts payable and accrued expenses
2
Other non-current liabilities
14
Accounts payable and accrued expenses
3
Accounts payable and accrued expenses
8
$
19
$
40
(1)
The fair value of foreign exchange forward contracts recorded
under Other non-current assets was less than $1 million as
of December 31, 2009. There were no foreign exchange
forward contracts recorded under Other non-current assets as of
December 31, 2008.
(2)
The fair value of commodity futures recorded under Accounts
payable and accrued expenses was less than $1 million as of
December 31, 2009.
85
Table of Contents
Amount of (Loss) Gain
Location of (Loss) Gain
Amount of (Loss) Gain
Reclassified from AOCL
Reclassified from AOCL
Recognized in OCI
into Net Income
into Net Income
$
(14
)
$
(46
)
Interest expense
(6
)
(3
)
Cost of sales
$
(20
)
$
(49
)
Amount of Gain (Loss)
Location of Gain (Loss)
Recognized in Income
Recognized in Income
December 31, 2009:
$
5
Cost of sales
2
Selling, general and administrative
Interest expense
$
7
(1)
The interest rate swap that was utilized to economically hedge
the volatility in floating interest rates associated with
borrowings under the Revolver did not generate gains or losses
during 2009.
(2)
The total loss recognized for the year ended December 31,
2009, includes a realized $11 million loss which represents
contracts that settled during the year ended December 31,
2009, and an unrealized $18 million gain which represents
the change in fair value of outstanding contracts.
86
Table of Contents
11.
Other
Non-Current Assets and Other Non-Current Liabilities
December 31,
December 31,
2009
2008
$
402
$
386
23
66
84
83
34
29
$
543
$
564
December 31,
December 31,
2009
2008
$
115
$
112
534
515
49
89
39
11
$
737
$
727
12.
Income
Taxes
For the Year Ended December 31,
2009
2008
2007
$
784
$
(534
)
$
650
84
159
167
$
868
$
(375
)
$
817
87
Table of Contents
For the Year Ended December 31,
2009
2008
2007
$
194
$
111
$
199
22
43
33
12
37
41
228
191
273
71
(223
)
29
(1
)
(36
)
4
17
7
16
87
(252
)
49
$
315
$
(61
)
$
322
For the Year Ended December 31,
2009
2008
2007
$
304
$
(131
)
$
287
30
(1
)
26
(14
)
(8
)
(2
)
53
17
19
27
(22
)
7
(16
)
$
315
$
(61
)
$
322
36.3
%
16.3
%
39.4
%
(1)
Amounts represent tax expense recorded by the Company for which
Kraft is obligated to indemnify DPS under the Tax Indemnity
Agreement.
(2)
Included in other items is $(5) million and
$16 million of non-indemnified tax (benefit) expense the
Company recorded in the years ended December 31, 2009 and
2008, respectively, driven by separation related transactions.
There was no non-indemnified tax expense driven by separation
related transactions for the year ended December 31, 2007.
88
Table of Contents
December 31,
December 31,
2009
2008
$
19
$
36
54
56
15
27
81
85
$
169
$
204
$
(842
)
$
(816
)
(120
)
(115
)
(23
)
$
(985
)
$
(931
)
(18
)
(21
)
$
(834
)
$
(748
)
89
Table of Contents
$
70
30
11
(9
)
(4
)
98
396
23
(27
)
(7
)
483
5
21
(14
)
(4
)
(8
)
$
483
90
Table of Contents
13.
Restructuring
Costs
For the Year Ended
December 31,
2008
2007
$
39
$
32
10
21
7
4
1
6
6
3
4
$
57
$
76
Workforce
Reduction
External
Closure
Costs
Consulting
Costs
Other
Total
$
2
$
$
$
$
2
47
10
5
14
76
(22
)
(13
)
(5
)
(12
)
(52
)
2
4
(2
)
4
29
1
30
30
3
1
23
57
(37
)
(4
)
(1
)
(15
)
(57
)
(16
)
(6
)
(22
)
6
2
8
(4
)
(4
)
$
2
$
$
$
2
$
4
91
Table of Contents
Costs For the Year Ended
December 31,
Cumulative
2008
2007
Costs to Date
$
19
$
15
$
34
9
10
19
1
1
2
10
6
16
$
39
$
32
$
71
Costs For the Year Ended
December 31,
Cumulative
2008
2007
Costs to Date
$
8
$
12
$
26
2
9
17
6
$
10
$
21
$
49
92
Table of Contents
14.
Fair
Value of Financial Instruments
Fair Value Measurements at Reporting Date Using
Quoted Prices in
Significant Other
Significant
Active Markets for
Observable
Unobservable
Identical Assets
Inputs
Inputs
Level 1
Level 2
Level 3
$
280
$
$
10
6
$
280
$
16
$
$
$
17
$
2
$
$
19
$
93
Table of Contents
December 31, 2009
December 31, 2008
Carrying Amount
Fair Value
Carrying Amount
Fair Value
$
396
$
400
$
$
446
451
250
273
250
248
1,200
1,349
1,200
1,184
250
291
250
249
405
405
1,805
1,606
(1)
The carrying amount includes an adjustment of $8 million
related to the change in the fair value of interest rate swaps
designated as fair value hedges on the 2011 and 2012 Notes. See
Note 10 for further information regarding derivatives.
15.
Employee
Benefit Plans
94
Table of Contents
95
Table of Contents
For the Year Ended December 31,
2009
2008
2007
$
11
$
31
$
3
2
8
4
26
$
22
$
37
$
26
(1)
Effective January 1, 2008, the Company separated commingled
pension and postretirement plans which contained participants of
both the Company and other Cadbury companies into separate stand
alone plans sponsored by DPS. The net periodic benefit costs
associated with these plans for the year ended December 31,
2007 are reflected as multi-employer plan expense in the table
above.
(2)
During the fourth quarter of 2009, the Company recorded a
pension settlement loss of approximately $3 million due to
lump-sum distributions that occurred during 2009. The Company
recorded approximately $17 million in 2008 related to
pension plan settlements that resulted from the organizational
restructuring program initiated in the fourth quarter of 2007.
Additionally, the Company recorded a pension curtailment gain of
less than $1 million for the year ended December 31,
2008.
96
Table of Contents
Postretirement
Pension Plans
Benefit Plans
2009
2008
2009
2008
$
230
$
66
$
25
$
9
254
17
(1
)
(1
)
1
11
1
1
15
19
2
1
24
(27
)
(2
)
2
(7
)
(8
)
(3
)
(3
)
2
(4
)
1
(1
)
(35
)
(12
)
(45
)
$
253
$
230
$
24
$
25
$
162
$
70
$
4
$
194
6
(5
)
37
(67
)
1
(2
)
43
26
2
2
1
1
(7
)
(8
)
(3
)
(3
)
(3
)
(12
)
(45
)
$
223
$
162
$
5
$
4
$
(30
)
$
(68
)
$
(19
)
$
(21
)
$
2
$
2
$
$
(32
)
(70
)
(19
)
(21
)
$
2
$
2
$
$
(1
)
(1
)
(1
)
(1
)
(31
)
(69
)
(18
)
(20
)
$
(30
)
$
(68
)
$
(19
)
$
(21
)
(1)
Effective January 1, 2008, the Company separated commingled
pension and postretirement plans which contained participants of
both the Company and other Cadbury companies into separate stand
alone plans sponsored by DPS. As a result, the Company
re-measured the projected benefit obligation.
(2)
In accordance with U.S. GAAP, the Company elected the transition
method under which DPS re-measured the plan obligations and plan
assets as of January 1, 2008, the first day of the
2008 year, for plans that previously had a measurement date
other than December 31.
97
Table of Contents
2009
2008
$
253
$
228
252
228
223
158
Benefit Plans
Pension Plans
Postretirement
For the Year Ended December 31,
2009
2008
2007
2009
2008
2007
$
1
$
11
$
2
$
1
$
1
$
15
19
4
2
1
(13
)
(19
)
(5
)
5
3
1
(1
)
(1
)
3
17
$
11
$
31
$
$
3
$
2
$
$
$
(34
)
$
$
$
$
(1
)
(3
)
(16
)
1
60
(6
)
(3
)
5
1
(4
)
(3
)
(1
)
$
(7
)
$
6
$
(5
)
$
(3
)
$
5
$
(1)
Effective January 1, 2008, the Company separated commingled
pension and post retirement plans which contained participants
of both the Company and other Cadbury companies into separate
stand alone plans sponsored by DPS. The net periodic benefit
costs associated with these plans prior to the separation are
detailed below as a component of multi-employer plan costs for
2007.
98
Table of Contents
Postretirement
Pension Plans
Benefit Plans
2009
2008
2009
2008
$
1
$
1
$
(1
)
$
(1
)
64
71
5
8
$
65
$
72
$
4
$
7
Projected
Actual
2010
2009
2008
$
12
$
43
$
26
2
2
2
$
14
$
45
$
28
2010
2011
2012
2013
2014
2015-2019
$
14
$
15
$
16
$
18
$
18
$
102
2
2
2
2
2
8
99
Table of Contents
Postretirement
Pension Plans
Benefit Plans
2009
2008
2009
2008
5.90
%
6.50
%
5.90
%
6.50
%
3.50
%
3.50
%
N/A
N/A
Postretirement
Pension Plans
Benefit Plans
2009
2008
2007
2009
2008
2007
6.50
%
6.00
%
5.90
%
6.50
%
6.00
%
5.90
%
7.30
%
7.30
%
7.30
%
7.30
%
7.30
%
N/A
3.50
%
3.50
%
N/A
N/A
N/A
N/A
Pension Plans
Postretirement Benefit Plans
2009
2008
2009
2008
6.52
%
6.98
%
5.50
%
6.25
%
3.85
%
3.90
%
N/A
N/A
Postretirement
Pension Plans
Benefit Plans
2009
2008
2007
2009
2008
2007
6.99
%
7.14
%
6.06
%
6.25
%
5.25
%
5.25
%
7.62
%
7.66
%
7.56
%
N/A
N/A
N/A
4.06
%
4.23
%
3.81
%
N/A
N/A
3.50
%
9.00
%
5.00
%
2016
100
Table of Contents
Target
Actual
2010
2009
2008
35
%
50
%
49
%
65
%
50
%
51
%
100
%
100
%
100
%
Target Range
25% - 40%
4% - 12%
15% - 25%
30% - 50%
101
Table of Contents
Fair Value Measurements at December 31, 2009
Quoted Prices in
Significant
Significant
Active Markets for
Observable
Unobservable
Identical Assets
Inputs
Inputs
Total
(Level 1)
(Level 2)
(Level 3)
(In millions)
$
7
$
7
$
$
51
51
14
14
42
42
1
1
3
3
80
80
25
20
5
$
223
$
125
$
98
$
(1)
Equity securities are comprised of common stock and actively
managed U.S. index funds and Europe, Australia, Far East (EAFE)
index funds. Investments in common stocks are valued using
quoted market prices multiplied by the number of shares held.
(2)
Fixed income securities are comprised of U.S. Treasuries, U.S.
Municipal bonds, investment grade U.S. and
non-U.S.
fixed income securities which are valued using a broker quote in
an active market; actively managed fixed income investment
vehicles are valued at NAV.
(3)
The NAV is based on the fair value of the underlying assets
owned by the equity index fund or fixed income investment
vehicle per share multiplied by the number of units held as of
the measurement date and are classified as Level 2 assets.
102
Table of Contents
Fair Value Measurements at December 31, 2009
Quoted Prices in
Significant
Significant
Active Markets for
Observable
Unobservable
Identical Assets
Inputs
Inputs
Total
(Level 1)
(Level 2)
(Level 3)
(in millions)
$
1
$
$
1
$
1
1
2
2
1
1
$
5
$
3
$
2
$
(1)
Equity securities are comprised of common stock and actively
managed U.S. index funds and Europe, Australia, Far East (EAFE)
index funds. Investments in common stocks are valued using
quoted market prices multiplied by the number of shares held.
(2)
Fixed income securities are comprised of U.S. Treasuries, U.S.
Municipal bonds, investment grade U.S. and
non-U.S.
fixed income securities which are valued using a broker quote in
an active market, and actively managed fixed income investment
vehicles which are valued at NAV.
(3)
The NAV is based on the fair value of the underlying assets
owned by the equity index fund or fixed income investment
vehicle per share multiplied by the number of units held as of
the measurement date and are classified as Level 2 assets.
Postretirement
Pension Plans
Benefit Plans
2007
2007
$
13
$
1
17
1
(13
)
(1
)
5
$
22
$
1
103
Table of Contents
16.
Stock-Based
Compensation
104
Table of Contents
For the Year Ended December 31,
2009
2008
2007
$
$
3
$
21
19
6
19
9
21
(7
)
(2
)
(8
)
$
12
$
7
$
13
105
Table of Contents
For the Year Ended December 31,
2009
2008
$ 3.57
$ 7.37
2.23
%
3.27
%
6.1 years
5.8 years
%
%
21.46
%
22.26
%
(1)
During the fourth quarter of 2009, the Company declared a
dividend. Dividend yield will be included as a valuation
assumption for future stock based compensation awards.
Weighted Average
Stock Options
Exercise Price
1,159,619
$
25.30
1,242,494
$
13.48
(37,292
)
$
22.64
(186,610
)
$
20.96
2,178,211
$
18.97
337,819
$
25.29
Weighted Average
Remaining
Number
Contractual Term
Outstanding
(years)
Aggregate Intrinsic Value
2,178,211
8.79
$
20
Weighted Average
Remaining
Number
Contractual Term
Exercisable
(years)
Aggregate Intrinsic Value
337,819
8.36
$
1
106
Table of Contents
Weighted-Average
Stock Options
Grant-Date Fair Value
1,159,619
$
7.36
1,242,494
$
3.57
(375,111
)
$
7.28
(186,610
)
$
5.97
1,840,392
$
4.96
Weighted Average
Restricted Stock Units
Grant-Date Fair Value
1,028,609
$
24.83
1,909,601
$
13.78
(81,056
)
$
24.96
(168,603
)
$
18.12
2,688,551
$
17.43
Weighted Average
Number
Remaining
Outstanding
Contractual Term (years)
Aggregate Intrinsic Value
2,688,551
1.91
$
76
107
Table of Contents
108
Table of Contents
2007
BSRP
LTIP
ISAP
N/A
15%
N/A
3 years
3 years
1 - 3 years
5.5%
N/A
4.9% to 5.8%
2.5%
2.5%
2.5% to 3.0%
185.5%
92.8% UEPS
91.8% to 99.3%
45.1% TSR
40%
70%
100%
109
Table of Contents
17.
Earnings
Per Share
For the Year Ended December 31,
2009
2008
2007
$
555
$
(312
)
$
497
254.2
254.0
253.7
$
2.18
$
(1.23
)
$
1.96
For the Year Ended December 31,
2009
2008
2007
$
555
$
(312
)
$
497
254.2
254.0
253.7
1.0
255.2
254.0
253.7
$
2.17
$
(1.23
)
$
1.96
(1)
For all periods prior to May 7, 2008, the date DPS
distributed the common stock of DPS to Cadbury plc shareholders,
the same number of shares is being used for diluted EPS as for
basic EPS as no common stock of DPS was previously outstanding
and no DPS equity awards were outstanding for the prior periods.
Subsequent to May 7, 2008, the number of basic shares
includes approximately 500,000 shares related to former
Cadbury benefit plans converted to DPS shares on a daily volume
weighted average. See Note 16 for further information
regarding the Companys stock-based compensation plans.
(2)
Anti-dilutive stock options and RSUs totaling 1.1 million
shares were excluded from the diluted weighted average shares
outstanding for the year ended December 31, 2009.
Anti-dilutive weighted average options and RSUs totaling
0.8 million shares were excluded from the diluted weighted
average shares outstanding for the year ended December 31,
2008. DPS had no anti-dilutive options and RSUs for the year
ended December 31, 2007.
110
Table of Contents
18.
Accumulated
Other Comprehensive (Loss) Income
December 31,
2009
2008
2007
$
(12
)
$
(34
)
$
27
(45
)
(52
)
(7
)
(2
)
(20
)
$
(59
)
$
(106
)
$
20
(1)
The 2008 activity included a $2 million loss, net of tax,
as a result of changing the measurement date for DPS
defined benefit pension plans from September 30 to December 31
under U.S. GAAP.
111
Table of Contents
19.
Supplemental
Cash Flow Information
For the Year Ended December 31,
2009
2008
2007
$
$
150
$
15
39
48
4
15
22
263
17
35
35
16
27
90
$
152
$
143
$
257
233
120
34
(1)
The following detail represents the initial non-cash financing
and investing activities in connection with the Companys
separation from Cadbury for the year ended December 31,
2008 (in millions):
$
(386
)
334
177
(165
)
(132
)
(71
)
75
28
(7
)
(3
)
$
(150
)
112
Table of Contents
20.
Commitments
and Contingencies
Operating Leases
Capital Leases
$
72
$
5
64
4
50
4
44
5
32
2
101
$
363
20
(4
)
$
16
In 2007, Snapple Beverage Corp. was sued by Stacy Holk in New
Jersey Superior Court, Monmouth County. Subsequent to filing,
the Holk case was removed to the United States District Court,
District of New Jersey. Snapple filed a motion to dismiss the
Holk case on a variety of grounds. In June 2008, the district
court granted Snapples motion to dismiss. The plaintiff
appealed and in August 2009, the appellate court reversed the
judgment and remanded to the district court for further
proceedings.
In 2007, the attorneys in the Holk case also filed a new action
in the United States District Court, Southern District of New
York on behalf of plaintiffs, Evan Weiner and Timothy
McClausland. This case was stayed during the pendency of the
Holk motion to dismiss and appeal. This stay is now lifted, the
Company filed its answer and the case is proceeding.
113
Table of Contents
In April 2009, Snapple Beverage Corp. was sued by Frances Von
Koenig in the United States District Court, Eastern District of
California. A motion to dismiss has been filed in the Von Koenig
case.
In August 2009, Guy Cadwell filed suit against Dr Pepper Snapple
Group, Inc. in the United States District Court, Southern
District of California. This case has been transferred to the
United States District Court, Eastern District of California,
and has been consolidated by that court with the Von Koenig case.
21.
Segments
114
Table of Contents
The Beverage Concentrates segment reflects sales of the
Companys branded concentrates to third party bottlers
primarily in the United States and Canada. Most of the brands in
this segment are CSD brands.
The Packaged Beverages segment reflects sales in the United
States and Canada from the manufacture and distribution of
finished beverages and other products, including sales of the
Companys own brands and third party brands, through both
DSD and WD systems.
The Latin America Beverages segment reflects sales in the Mexico
and Caribbean markets from the manufacture and distribution of
both concentrates and finished beverages.
For the Year Ended December 31,
2009
2008
2007
$
1,063
$
983
$
984
4,111
4,305
4,295
357
422
416
$
5,531
$
5,710
$
5,695
115
Table of Contents
For the Year Ended December 31,
2009
2008
2007
$
683
$
622
$
608
573
483
564
54
86
96
1,310
1,191
1,268
265
259
253
1,039
6
57
76
(40
)
4
(71
)
1,085
(168
)
1,004
(239
)
(225
)
(189
)
22
18
2
$
868
$
(375
)
$
817
For the Year Ended December 31,
2009
2008
2007
$
15
$
18
$
15
20
33
34
35
51
49
5
3
$
40
$
54
$
49
For the Year Ended December 31,
2009
2008
2007
$
14
$
13
$
12
134
109
102
9
10
9
157
132
123
10
9
(1
)
(2
)
$
167
$
141
$
120
Table of Contents
For the Year Ended
December 31,
2009
2008
$
91
$
87
911
842
64
51
1,066
980
43
18
(8
)
1,109
990
1,279
1,237
6,388
6,411
$
8,776
$
8,638
For the Year Ended December 31,
2009
2008
2007
$
4,968
$
5,070
$
5,069
563
640
626
$
5,531
$
5,710
$
5,695
For the Year Ended
December 31,
2009
2008
$
1,044
$
935
65
55
$
1,109
$
990
Table of Contents
22.
Related
Party Transactions
118
Table of Contents
23.
Guarantor
and Non-Guarantor Financial Information
Condensed Consolidating Statement of Operations
For the Year Ended December 31, 2009
Parent
Guarantors
Non-Guarantors
Eliminations
Total
(In millions)
$
$
5,037
$
494
$
$
5,531
2,028
206
2,234
3,009
288
3,297
1,954
181
2,135
114
3
117
(38
)
(2
)
(40
)
979
106
1,085
247
112
(116
)
243
(116
)
(1
)
(3
)
116
(4
)
(23
)
(24
)
25
(22
)
(108
)
892
84
868
(50
)
336
29
315
(58
)
556
55
553
613
57
(670
)
2
2
$
555
$
613
$
57
$
(670
)
$
555
119
Table of Contents
Condensed Consolidating Statement of Operations
For the Year Ended December 31, 2008
Parent
Guarantors
Non-Guarantors
Eliminations
Total
(In millions)
$
$
5,137
$
587
$
(14
)
$
5,710
2,348
256
(14
)
2,590
2,789
331
3,120
1,875
200
2,075
105
8
113
1,039
1,039
55
2
57
6
(2
)
4
(291
)
123
(168
)
192
321
(256
)
257
(132
)
(148
)
(8
)
256
(32
)
(19
)
1
(18
)
(41
)
(464
)
130
(375
)
(24
)
(78
)
41
(61
)
(17
)
(386
)
89
(314
)
(414
)
65
349
2
2
$
(431
)
$
(321
)
$
91
$
349
$
(312
)
120
Table of Contents
Condensed Consolidating Statement of Operations
For the Year Ended December 31, 2007
Parent
Guarantors
Non-Guarantors
Eliminations
Total
(In millions)
$
$
5,131
$
575
$
(11
)
$
5,695
2,336
239
(11
)
2,564
2,795
336
3,131
1,828
190
2,018
91
7
98
6
6
63
13
76
(71
)
(71
)
878
126
1,004
224
29
253
(48
)
(16
)
(64
)
(2
)
(2
)
702
115
817
280
42
322
422
73
495
1
(1
)
2
2
$
$
423
$
75
$
(1
)
$
497
Table of Contents
Condensed Consolidating Balance Sheet
As of December 31, 2009
Parent
Guarantors
Non-Guarantors
Eliminations
Total
(In millions)
$
$
191
$
89
$
$
280
485
55
540
24
8
32
13
4
(17
)
234
28
262
49
4
53
79
10
23
112
92
997
207
(17
)
1,279
1,044
65
1,109
3,085
471
(3,556
)
9
9
2,961
22
2,983
2,624
78
2,702
3,172
434
38
(3,644
)
425
110
8
543
151
151
$
6,774
$
8,641
$
578
$
(7,217
)
$
8,776
$
78
$
710
$
62
$
$
850
13
4
(17
)
4
4
78
723
70
(17
)
854
2,946
14
2,960
434
3,209
1
(3,644
)
1,015
23
1,038
129
595
13
737
3,587
5,556
107
(3,661
)
5,589
3,187
3,085
471
(3,556
)
3,187
$
6,774
$
8,641
$
578
$
(7,217
)
$
8,776
Table of Contents
Condensed Consolidating Balance Sheet
As of December 31, 2008
Parent
Guarantors
Non-Guarantors
Eliminations
Total
(In millions)
$
$
145
$
69
$
$
214
481
51
532
49
2
51
27
619
6
(652
)
240
23
263
12
78
3
93
24
54
6
84
63
1,666
160
(652
)
1,237
935
55
990
2,413
380
(2,793
)
12
12
2,961
22
2,983
2,639
73
2,712
3,989
(3,989
)
451
106
7
564
140
140
$
6,916
$
8,687
$
469
$
(7,434
)
$
8,638
$
78
$
667
$
51
$
$
796
614
28
10
(652
)
5
5
692
695
66
(652
)
801
3,505
17
3,522
3,989
(3,989
)
966
15
981
112
607
8
727
4,309
6,274
89
(4,641
)
6,031
2,607
2,413
380
(2,793
)
2,607
$
6,916
$
8,687
$
469
$
(7,434
)
$
8,638
Table of Contents
Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2009
Parent
Guarantors
Non-Guarantors
Eliminations
Total
(In millions)
$
(215
)
$
1,023
$
57
$
$
865
(8
)
(8
)
63
6
69
(302
)
(15
)
(317
)
5
5
(370
)
(35
)
405
398
(398
)
398
(612
)
(44
)
7
(251
)
370
35
(405
)
850
850
1
1
405
405
(1,805
)
(1,805
)
(398
)
398
(2
)
(2
)
(3
)
(3
)
(181
)
(366
)
(7
)
(554
)
2
45
13
60
(2
)
1
7
6
145
69
214
$
$
191
$
89
$
$
280
Table of Contents
Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2008
Parent
Guarantors
Non-Guarantors
Eliminations
Total
(In millions)
$
(125
)
$
736
$
98
$
$
709
(288
)
(16
)
(304
)
(3,888
)
(776
)
(27
)
4,526
(165
)
1,488
76
(24
)
1,540
3
3
(3,888
)
424
36
4,502
1,074
1,615
1,615
614
3,888
24
(4,526
)
1,700
1,700
1,700
1,700
2,200
2,200
(395
)
(395
)
(4,653
)
(11
)
(4,664
)
(24
)
24
(1,700
)
(1,700
)
(106
)
(106
)
(1,889
)
(82
)
(1,971
)
(4
)
(4
)
4,013
(1,043
)
(93
)
(4,502
)
(1,625
)
117
41
158
(11
)
(11
)
28
39
67
$
$
145
$
69
$
$
214
Table of Contents
Condensed Consolidating Statement of Cash Flows
For the Year Ended December 31, 2007
Parent
Guarantors
Non-Guarantors
Eliminations
Total
(in millions)
$
$
504
$
99
$
$
603
(30
)
(30
)
(2
)
(2
)
98
98
(218
)
(12
)
(230
)
4
2
6
(1,441
)
(496
)
(1,937
)
604
404
1,008
(985
)
(102
)
(1,087
)
2,845
2,845
(3,130
)
(325
)
(3,455
)
4
4
773
348
1,121
492
23
515
11
20
31
2
(1
)
1
16
19
35
$
$
29
$
38
$
$
67
24.
Agreement
with PepsiCo, Inc.
Table of Contents
127
Table of Contents
25.
Selected
Quarterly Financial Data (unaudited)
First
Second
Third
Fourth
Quarter
Quarter
Quarter
Quarter
(In millions, except per share data)
$
1,260
$
1,481
$
1,434
$
1,356
729
885
855
828
132
158
151
114
0.52
0.62
0.59
0.45
0.52
0.62
0.59
0.44
0.00
0.00
0.00
0.15
17.87
23.21
28.75
30.09
11.90
17.40
21.65
26.19
$
1,295
$
1,545
$
1,494
$
1,376
730
851
785
754
95
108
106
(621
)
0.38
0.42
0.41
(2.44
)
0.38
0.42
0.41
(2.44
)
0.00
0.00
0.00
0.00
N/A
26.50
26.52
26.13
N/A
20.98
20.18
13.78
(1)
No common stock of DPS was traded prior to May 7, 2008, and
no DPS equity awards were outstanding for the prior periods. As
of May 7, 2008, the number of basic shares includes
approximately 500,000 shares related to former Cadbury
benefit plans converted to DPS shares on a daily volume weighted
average.
(2)
In connection with the separation from Cadbury on May 7,
2008, DPS distributed to Cadbury shareholders the common stock
of DPS. On the date of the distribution 253.7 million
shares of common stock were issued. As a result, on May 7,
2008, the Company had 253.7 million shares of common stock
outstanding and this share amount is being utilized for the
calculation of basic earnings per common share for all periods
presented prior to the date of the Distribution. The same number
of shares is being used for diluted earnings per common share as
for basic earnings per common share as no common stock of DPS
was traded prior to May 7, 2008, and no DPS equity awards
were outstanding for the prior periods.
128
Table of Contents
26.
SUBSEQUENT
EVENTS
129
Table of Contents
ITEM 9.
CHANGES
IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A.
CONTROLS
AND PROCEDURES
ITEM 9B.
OTHER
INFORMATION
130
Table of Contents
ITEM 15.
EXHIBITS,
FINANCIAL STATEMENT SCHEDULES
Consolidated Statements of Operations for the years ended
December 31, 2009, 2008 and 2007
Consolidated Balance Sheets as of December 31, 2009 and 2008
Consolidated Statements of Cash Flows for the years ended
December 31, 2009, 2008 and 2007
Consolidated Statements of Changes in Stockholders Equity
and Other Comprehensive Income (Loss) for the years ended
December 31, 2009, 2008 and 2007
Notes to Consolidated Financial Statements for the years ended
December 31, 2009, 2008 and 2007
131
Table of Contents
2
.1
Separation and Distribution Agreement between Cadbury Schweppes
plc and Dr Pepper Snapple Group, Inc. and, solely for certain
provisions set forth therein, Cadbury plc, dated as of
May 1, 2008 (filed as Exhibit 2.1 to the
Companys Current Report on
Form 8-K
(filed on May 5, 2008) and incorporated herein by
reference).
3
.1
Amended and Restated Certificate of Incorporation of Dr Pepper
Snapple Group, Inc. (filed as Exhibit 3.1 to the
Companys Current Report on
Form 8-K
(filed on May 12, 2008) and incorporated herein by
reference).
3
.2
Amended and Restated By-Laws of Dr Pepper Snapple Group, Inc. as
of July 14, 2009 (filed as Exhibit 3.1 to the
Companys Current Report on
Form 8-K
(filed on July 16, 2009) and incorporated herein by
reference).
4
.1
Indenture, dated April 30, 2008, between Dr Pepper Snapple
Group, Inc. and Wells Fargo Bank, N.A. (filed as
Exhibit 4.1 to the Companys Current Report on
Form 8-K
(filed on May 1, 2008) and incorporated herein by
reference).
4
.2
Form of 6.12% Senior Notes due 2013 (filed as
Exhibit 4.2 to the Companys Current Report on
Form 8-K
(filed on May 1, 2008) and incorporated herein by
reference).
4
.3
Form of 6.82% Senior Notes due 2018 (filed as
Exhibit 4.3 to the Companys Current Report on
Form 8-K
(filed on May 1, 2008) and incorporated herein by
reference).
4
.4
Form of 7.45% Senior Notes due 2038 (filed as
Exhibit 4.4 to the Companys Current Report on
Form 8-K
(filed on May 1, 2008) and incorporated herein by
reference).
4
.5
Registration Rights Agreement, dated April 30, 2008,
between Dr Pepper Snapple Group, Inc., J.P. Morgan
Securities Inc., Banc of America Securities LLC, Goldman,
Sachs & Co., Morgan Stanley & Co.
Incorporated, UBS Securities LLC, BNP Paribas Securities Corp.,
Mitsubishi UFJ Securities International plc, Scotia Capital
(USA) Inc., SunTrust Robinson Humphrey, Inc., Wachovia Capital
Markets, LLC and TD Securities (USA) LLC (filed as
Exhibit 4.5 to the Companys Current Report on
Form 8-K
(filed on May 1, 2008) and incorporated herein by
reference).
4
.6
Registration Rights Agreement Joinder, dated May 7, 2008,
by the subsidiary guarantors named therein (filed as
Exhibit 4.2 to the Companys Current Report on
Form 8-K
(filed on May 12, 2008) and incorporated herein by
reference).
4
.7
Supplemental Indenture, dated May 7, 2008, among Dr Pepper
Snapple Group, Inc., the subsidiary guarantors named therein and
Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.1 to
the Companys Current Report on
Form 8-K
(filed on May 12, 2008) and incorporated herein by
reference).
4
.8
Second Supplemental Indenture dated March 17, 2009, to be
effective as of December 31, 2008, among Splash Transport,
Inc., as a subsidiary guarantor, Dr Pepper Snapple Group, Inc.,
and Wells Fargo Bank, N.A., as trustee (filed as
Exhibit 4.8 to the Companys Annual Report on
Form 10-K (filed on March 26, 2009) and incorporated herein
by reference).
4
.9
Third Supplemental Indenture, dated as of October 19, 2009,
among 234DP Aviation, LLC, as a subsidiary guarantor, Dr Pepper
Snapple Group, Inc., and Wells Fargo Bank, N.A., as trustee
(filed as Exhibit 4.9 to the Companys Quarterly
Report on
Form 10-Q
(filed on November 5, 2009) and incorporated herein by
reference).
4
.10
Indenture, dated as of December 15, 2009, between Dr Pepper
Snapple Group, Inc. and Wells Fargo Bank, N.A., as trustee
(filed as Exhibit 4.1 to the Companys Current Report
on
Form 8-K
(filed on December 23, 2009) and incorporated herein
by reference).
4
.11
First Supplemental Indenture, dated as of December 21,
2009, among Dr Pepper Snapple Group, Inc., the guarantors party
thereto and Wells Fargo Bank, N.A., as trustee (filed as
Exhibit 4.2 to the Companys Current Report on
Form 8-K
(filed on December 23, 2009) and incorporated herein
by reference).
4
.12
1.70% Senior Notes due 2011 (in global form) (filed as
Exhibit 4.3 to the Companys Current Report on
Form 8-K
(filed on December 23, 2009) and incorporated herein
by reference).
4
.13
2.35% Senior Notes due 2012 (in global form) (filed as
Exhibit 4.4 to the Companys Current Report on
Form 8-K
(filed on December 23, 2009) and incorporated herein
by reference).
10
.1
Transition Services Agreement between Cadbury Schweppes plc and
Dr Pepper Snapple Group, Inc., dated as of May 1, 2008
(filed as Exhibit 10.1 to the Companys Current Report
on
Form 8-K
(filed on May 5, 2008) and incorporated herein by
reference).
132
Table of Contents
10
.2
Tax Sharing and Indemnification Agreement between Cadbury
Schweppes plc and Dr Pepper Snapple Group, Inc. and, solely for
the certain provision set forth therein, Cadbury plc, dated as
of May 1, 2008 (filed as Exhibit 10.2 to the
Companys Current Report on
Form 8-K
(filed on May 5, 2008) and incorporated herein by
reference).
10
.3
Employee Matters Agreement between Cadbury Schweppes plc and Dr
Pepper Snapple Group, Inc. and, solely for certain provisions
set forth therein, Cadbury plc, dated as of May 1, 2008
(filed as Exhibit 10.3 to the Companys Current Report
on
Form 8-K
(filed on May 5, 2008) and incorporated herein by
reference).
10
.4
Agreement, dated June 15, 2004, between Cadbury Schweppes
Bottling Group, Inc. (which was merged into The American
Bottling Group) and CROWN Cork & Seal USA, Inc. (filed
as Exhibit 10.4 to Amendment No. 2 to the
Companys Registration Statement on Form 10 (filed on
February 12, 2008) and incorporated herein by
reference).
10
.5
First Amendment to the Agreement between Cadbury Schweppes
Bottling Group, Inc. (which was merged into The American
Bottling Group) and CROWN Cork & Seal USA, Inc., dated
August 25, 2005 (filed as Exhibit 10.5 to Amendment
No. 2 to the Companys Registration Statement on
Form 10 (filed on February 12, 2008) and
incorporated herein by reference).
10
.6
Second Amendment to the Agreement between Cadbury Schweppes
Bottling Group, Inc. (now known as The American Bottling
Company) and CROWN Cork & Seal USA, Inc., dated
June 21, 2006 (filed as Exhibit 10.6 to Amendment
No. 2 to the Companys Registration Statement on
Form 10 (filed on February 12, 2008) and
incorporated herein by reference).
10
.7
Third Amendment to the Agreement between Cadbury Schweppes
Bottling Group, Inc. (now known as The American Bottling
Company) and CROWN Cork & Seal USA, Inc., dated
April 4, 2007 (filed as Exhibit 10.7 to Amendment
No. 2 to the Companys Registration Statement on
Form 10 (filed on February 12, 2008) and
incorporated herein by reference).
10
.8
Fourth Amendment to the Agreement between Cadbury Schweppes
Bottling Group, Inc. (now known as The American Bottling
Company) and CROWN Cork & Seal USA, Inc., dated
September 27, 2007 (filed as Exhibit 10.8 to Amendment
No. 2 to the Companys Registration Statement on
Form 10 (filed on February 12, 2008) and
incorporated herein by reference).
10
.9
Agreement dated April 8, 2009, between The American
Bottling Company and Crown Cork & Seal USA, Inc.
(filed as Exhibit 10.3 to the Companys Quarterly
Report on
Form 10-Q
(filed on May 13, 2009) and incorporated herein by
reference).
10
.10
Form of Dr Pepper License Agreement for Bottles, Cans and
Pre-mix (filed as Exhibit 10.9 to Amendment No. 2 to
the Companys Registration Statement on Form 10 (filed
on February 12, 2008) and incorporated herein by
reference).
10
.11
Form of Dr Pepper Fountain Concentrate Agreement (filed as
Exhibit 10.10 to Amendment No. 3 to the Companys
Registration Statement on Form 10 (filed on March 20,
2008) and incorporated herein by reference).
10
.12
Executive Employment Agreement, dated as of October 15,
2007, between CBI Holdings Inc. (now known as DPS Holdings Inc.)
and Larry D. Young (1) (filed as Exhibit 10.11 to Amendment
No. 2 to the Companys Registration Statement on
Form 10 (filed on February 12, 2008) and
incorporated herein by reference).
10
.13
First Amendment to Executive Employment Agreement, effective as
of February 11, 2009, between DPS Holdings, Inc. and Larry
D. Young (filed as Exhibit 99.2 to the Companys
Current Report on
Form 8-K
(filed on February 18, 2009) and incorporated herein
by reference).
10
.14
Second Amendment to Executive Employment Agreement, effective as
of August 11, 2009, between DPS Holdings, Inc. and Larry D.
Young (filed as Exhibit 10.3 to the Companys
Quarterly Report on
Form 10-Q
(filed on August 13, 2009) and incorporated herein by
reference).
10
.15
Executive Employment Agreement, dated as of October 13,
2007, between CBI Holdings Inc. (now known as DPS Holdings Inc.)
and John O. Stewart (1) (filed as Exhibit 10.12 to
Amendment No. 2 to the Companys Registration
Statement on Form 10 (filed on February 12,
2008) and incorporated herein by reference).
10
.16
Letter Agreement dated October 26, 2009, between Dr Pepper
Snapple Group, Inc., DPS Holdings, Inc. and John O. Stewart,
(filed as Exhibit 10.1 to the Companys Current Report
on
Form 8-K
(filed on October 27, 2009) and incorporated herein by
reference).
Table of Contents
10
.17*
First Amendment to the Letter Agreement, effective as of
February 26, 2010, between Dr Pepper Snapple Group,
Inc., DPS Holding, Inc. and John O. Stewart.
10
.18
Executive Employment Agreement, dated as of October 15,
2007, between CBI Holdings Inc. (now known as DPS Holdings Inc.)
and Randall E. Gier (1) (filed as Exhibit 10.13 to
Amendment No. 2 to the Companys Registration
Statement on Form 10 (filed on February 12,
2008) and incorporated herein by reference).
10
.19
Executive Employment Agreement, dated as of October 15,
2007, between CBI Holdings Inc. (now known as DPS Holdings Inc.)
and James J. Johnston, Jr. (1) (filed as Exhibit 10.14 to
Amendment No. 2 to the Companys Registration
Statement on Form 10 (filed on February 12,
2008) and incorporated herein by reference).
10
.20*
Letter Agreement, effective as of November 23, 2008,
between Dr Pepper Snapple Group, Inc. and James J. Johnston.
10
.21
Executive Employment Agreement, dated as of October 15,
2007, between CBI Holdings Inc. (now known as DPS Holdings Inc.)
and Pedro Herrán Gacha (1) (filed as Exhibit 10.15 to
Amendment No. 2 to the Companys Registration
Statement on Form 10 (filed on February 12,
2008) and incorporated herein by reference).
10
.22
Executive Employment Agreement, dated as of October 15,
2007, between CBI Holdings Inc. (now known as DPS Holdings Inc.)
and John L. Belsito (1) (filed as Exhibit 10.17 to
Amendment No. 2 to the Companys Registration
Statement on Form 10 (filed on February 12,
2008) and incorporated herein by reference).
10
.23*
Executive Employment Agreement, dated as of October 15,
2007, between CBI Holdings Inc. (now known as DPS Holdings Inc.)
and Lawrence Solomon.
10
.24*
Letter Agreement, effective as of November 23, 2008,
between Dr Pepper Snapple Group, Inc. and Rodger L. Collins.
10
.25*
Letter Agreement, effective as of April 1, 2010, between Dr
Pepper Snapple Group, Inc. and Martin M. Ellen.
10
.26
Dr Pepper Snapple Group, Inc. Omnibus Stock Incentive Plan of
2008 (filed as Exhibit 10.2 to the Companys Current
Report on
Form 8-K
(filed on May 12, 2008) and incorporated herein by
reference).
10
.27
Dr Pepper Snapple Group, Inc. Annual Cash Incentive Plan (filed
as Exhibit 10.3 to the Companys Current Report on
Form 8-K
(filed on May 12, 2008) and incorporated herein by
reference).
10
.28
Dr Pepper Snapple Group, Inc. Employee Stock Purchase Plan
(filed as Exhibit 10.4 to the Companys Current Report
on
Form 8-K
(filed on May 12, 2008) and incorporated herein by
reference).
10
.29
Dr Pepper Snapple Group, Inc. Omnibus Stock Incentive Plan of
2009 approved by the Stockholders on May 19, 2009 (filed as
Exhibit 10.1 to the Companys Current Report on
Form 8-K
(filed May 21, 2009) and incorporated herein by
reference).
10
.30
Dr Pepper Snapple Group, Inc. Management Incentive Plan of 2009
approved by the Stockholders on May 19, 2009 (filed as
Exhibit 10.2 to the Companys Current Report on
Form 8-K
(filed May 21, 2009) and incorporated herein by
reference).
10
.31
Amended and Restated Credit Agreement among Dr Pepper Snapple
Group, Inc., various lenders and JPMorgan Chase Bank, N.A., as
administrative agent, dated April 11, 2008 (filed as
Exhibit 10.22 to Amendment No. 4 to the Companys
Registration Statement on Form 10 (filed on April 16,
2008) and incorporated herein by reference).
10
.32
Amended and Restated Bridge Credit Agreement among Dr Pepper
Snapple Group, Inc., various lenders and JPMorgan Chase Bank,
N.A., as administrative agent, dated April 11, 2008 (filed
as Exhibit 10.23 to Amendment No. 4 to the
Companys Registration Statement on Form 10 (filed on
April 16, 2008) and incorporated herein by reference).
10
.33
Guaranty Agreement, dated May 7, 2008, among the subsidiary
guarantors named therein and JPMorgan Chase Bank, N.A., as
administrative agent (filed as Exhibit 10.1 to the
Companys Current Report on
Form 8-K
(filed on May 12, 2008) and incorporated herein by
reference).
Table of Contents
10
.34
Amendment No. 1 to Guaranty Agreement dated as of
November 12, 2008, among Dr Pepper Snapple Group, Inc., the
subsidiary guarantors named therein and JPMorgan Chase Bank,
N.A., as administrative agent (which amends the Guaranty
Agreement, dated May 7, 2008, referred hereto as
Exhibit 10.24) (filed as Exhibit 10.4 to the
Companys Quarterly Report on
Form 10-Q
(filed on November 13, 2008) and incorporated herein
by reference).
10
.35
Underwriting Agreement dated December 14, 2009, among
Morgan Stanley & Co. Incorporated and UBS Securities
LLC, as managers of the several underwriters named in
Schedule II thereto, and Dr Pepper Snapple Group, Inc.
(filed as Exhibit 10.1 to the Companys Current Report
on
Form 8-K
(filed on December 17, 2009) and incorporated herein
by reference).
10
.36
Dr Pepper Snapple Group, Inc. 2008 Legacy Long Term Incentive
Plan (filed as Exhibit 4.4 to the Companys
Registration Statement on
Form S-8
(filed on September 16, 2008) and incorporated herein
by reference).
10
.37
Dr Pepper Snapple Group, Inc. 2008 Legacy Bonus Share Retention
Plan, dated as of May 7, 2008 (filed as Exhibit 4.5 to
the Companys Registration Statement on
Form S-8
(filed on September 16, 2008) and incorporated herein
by reference).
10
.38
Dr Pepper Snapple Group, Inc. 2008 Legacy International Share
Award Plan, dated as of May 7, 2008 (filed as
Exhibit 4.6 to the Companys Registration Statement on
Form S-8
(filed on September 16, 2008) and incorporated herein
by reference).
10
.39
Dr Pepper Snapple Group, Inc. Change in Control Severance Plan
adopted on February 11, 2009 (filed as Exhibit 99.1 to
the Companys Current Report on
Form 8-K
(filed February 18, 2009) and incorporated herein by
reference).
10
.40*
First Amendment to the Dr Pepper Snapple Group, Inc. Change in
Control Severance Plan, effective as of February 24, 2010.
10
.41
Letter Agreement, dated December 7, 2009, between Dr Pepper
Snapple Group, Inc. and PepsiCo, Inc. (filed as
Exhibit 10.1 to the Companys Current Report on
Form 8-K
(filed on December 8, 2009) and incorporated herein by
reference).
12
.1*
Computation of Ratio of Earnings to Fixed Charges.
21
.1*
List of Subsidiaries (as of December 31, 2009).
23
.1*
Consent of Deloitte & Touche LLP.
31
.1*
Certification of Chief Executive Officer of Dr Pepper Snapple
Group, Inc. pursuant to
Rule 13a-14(a)
or 15d-14(a) promulgated under the Exchange Act.
31
.2*
Certification of Chief Financial Officer of Dr Pepper Snapple
Group, Inc. pursuant to
Rule 13a-14(a)
or 15d-14(a) promulgated under the Exchange Act.
32
.1**
Certification of Chief Executive Officer of Dr Pepper Snapple
Group, Inc. pursuant to
Rule 13a-14(b)
or 15d-14(b) promulgated under the Exchange Act, and
Section 1350 of Chapter 63 of Title 18 of the
United States Code.
32
.2**
Certification of Chief Financial Officer of Dr Pepper Snapple
Group, Inc. pursuant to
Rule 13a-14(b)
or 15d-14(b) promulgated under the Exchange Act, and
Section 1350 of Chapter 63 of Title 18 of the
United States Code.
*
Filed herewith.
**
Furnished herewith.
Portions of this Exhibit have been omitted and filed separately
with the Securities and Exchange Commission as part of an
application for confidential treatment pursuant to the
Securities Exchange Act of 1934, as amended.
Table of Contents
Dr Pepper Snapple Group, Inc.
By:
Name:
John O. Stewart
Title:
Executive Vice President and Chief
Financial Officer
By:
Name:
Larry D. Young
Title:
President, Chief Executive Officer and
Director
By:
Name:
John O. Stewart
Title:
Executive Vice President and Chief
Financial Officer
By:
Name:
Angela A. Stephens
Title:
Senior Vice President and Controller
(Principal Accounting Officer)
By:
Name:
Wayne R. Sanders
Title:
Chairman
By:
Name:
John L. Adams
Title:
Director
By:
Name:
Terence D. Martin
Title:
Director
136
Table of Contents
By:
Name:
Pamela H. Patsley
Title:
Director
By:
Name:
Ronald G. Rogers
Title:
Director
By:
Name:
Jack L. Stahl
Title:
Director
By:
Name:
M. Anne Szostak
Title:
Director
By:
Name:
Mike Weinstein
Title:
Director
137
1. | The Date of Separation section is hereby amended to change the date that Mr. Stewarts employment with the Company will cease from March 31, 2010 to May 21, 2010 and all references to March 31, 2010 in such section are hereby changed to May 21, 2010. | ||
2. | The Equity Awards section is hereby amended to change the date that the vested stock options under the Award Agreements must be exercised from July 31, 2010 to August 19, 2010. | ||
3. | The Retention Bonus section is hereby amended to change (i) the date that the remaining unvested stock options granted on May 7, 2008 will fully vest from March 31, 2010 to May 21, 2010, (ii) the date that such vested stock options must be exercised from July 31, 2010 to August 19, 2010, and (iii) add the following performance requirement to those enumerated in the last paragraph of this section provide support in preparing the Form 10-Q for the quarterly period ending March 31, 2010, which shall also be included as a Retention Bonus Condition. | ||
4. | Exhibit I is hereby deleted in its entirety and replaced with the attached First Amended Exhibit I. |
1
Dr Pepper Snapple Group, Inc. | ||||||||
|
||||||||
By:
|
||||||||
Name:
|
Larry D. Young | John O. Stewart | ||||||
Title:
|
President & Chief Executive Officer | |||||||
|
||||||||
DPS Holdings, Inc. | ||||||||
|
||||||||
By:
|
||||||||
Name:
|
Larry D. Young | |||||||
Title:
|
President |
2
Exercisable | ||||||||||||||||||||
or to | ||||||||||||||||||||
Exercise | become | Window to | ||||||||||||||||||
Grant Date | Plan | Number | Price | Exercisable | Vest Date | Status | Exercise | |||||||||||||
7-May-2008* | DPS08 | 76,892 | $ | 25.36 | 25,632 | 7-May-2009 | Vested | 19-Aug- 2010 | ||||||||||||
|
25,630 | 7-May-2010 | Vested | 19-Aug- 2010 | ||||||||||||||||
|
982 | 21-May-2010 | ** | |||||||||||||||||
Retention Bonus | 24,648 | 21-May-2010 | *** | 19-Aug- 2010 | ||||||||||||||||
2-Mar-2009 | DPS08 | 75,583 | $ | 13.48 | 25,195 | 2-Mar-2010 | **** | 19-Aug- 2010 | ||||||||||||
|
5,493 | 21-May-2010 | ** | 19-Aug- 2010 |
Grant Date | Plan | Number | Grant Price | To be Vested | Vest Date | Status | ||||||||||||
7-May-2008* | DPS08 | 23,659 | | 16,075 | 21-May -2010 | ** | ||||||||||||
|
Retention Bonus | 7,584 | 21-May -2010 | *** | ||||||||||||||
2-Mar-2009 | DPS08 | 46,735 | | 18,975 | 21-May -2010 | ** |
* | Founders grant made on date of demerger. | |
** | Represents prorata portion of options and RSUs that vest as of May 21, 2010. In the case of options it represents only the number of options from and after the last vesting date that will vest on May 21, 2010. | |
*** | Remaining unvested options and RSUs (that would have otherwise terminated on your Date of Separation) will vest on Date of Separation if the Retention Bonus Conditions are satisfied. | |
**** | Employment is required on March 2, 2010 for the first one third of the total option grant to vest. |
3
PO Box 869077 | ||
Plano, TX 75086-9077
|
||
5301 Legacy Drive
|
||
Plano, TX 75024-3109
|
||
Phone 972.673.7000
|
||
Fax 972.673.7976
|
Current Salary | New Salary | $ Increase / % Increase | ||||
$455,000
|
$ | 500,000 | $45,000 / 10% |
| Part 1 is a grant of Restricted Stock Units vesting 100% at the end of three years. | ||
| Part 2 is a Stock Option grant which vests equally over three years. |
Previous ESA | New ESA Effective November 23, 2008 | $ Increase /% Increase | ||||
$14,000
|
$ | 19,000 | $5,000 / 36% |
PO Box 869077 | ||
Plano, TX 75086-9077
|
||
5301 Legacy Drive
|
||
Plano, TX 75024-3109
|
||
Phone 972.673.7000
|
||
Fax 972.673.7976
|
Signature: | /s/ James J. Johnston | |||
Name James J. Johnston | ||||
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
CBI Holdings Inc. | Executive | |||||
By:
|
/s/ James L. Baldwin | /s/ Lawrence Solomon | ||||
|
||||||
|
James L. Baldwin | Lawrence Solomon | ||||
|
Executive Vice President |
27
A-1
A-2
EXECUTIVE | CBI HOLDINGS INC. | |||
|
||||
|
||||
|
By: | |||
|
||||
|
Its: | |||
|
A-3
A-4
PAGE | ||||
1. DEFINITIONS
|
1 | |||
2. TERM
|
5 | |||
3. POSITION AND DUTIES
|
5 | |||
4. COMPENSATION
|
6 | |||
5. TERMINATION
|
7 | |||
6. COMPENSATION UPON TERMINATION OF EMPLOYMENT
|
8 | |||
7. FURTHER BENEFITS
|
18 | |||
8. RIGHT TO TERMINATE; SOURCE OF PAYMENTS
|
18 | |||
9. AMENDMENTS; WAIVER
|
19 | |||
10. BINDING AGREEMENT
|
19 | |||
11. ASSIGNMENT
|
19 | |||
12. NOTICES
|
19 | |||
13. ENTIRE AGREEMENT
|
20 | |||
14. CONFIDENTIALITY
|
20 | |||
15. NON-COMPETITION AND NON-SOLICITATION
|
22 | |||
16. JUDICIAL AMENDMENT
|
23 | |||
17. IRREPARABLE INJURY
|
24 | |||
18. HEADINGS
|
24 | |||
19. WITHHOLDING
|
25 | |||
20. OTHER PLANS
|
25 | |||
21. ARBITRATION
|
25 | |||
22. VALIDITY; APPLICABLE LAW
|
26 |
Americas Beverages
Inter-Office Correspondence |
Date:
|
February 8, 2008 | |
To:
|
Larry Solomon | |
From:
|
Jan Vernon | |
Subject:
|
Relocation |
1. | The cost of Economy Class travel for you and your family to South Africa; | |
2. | Excess personal baggage charges up to 10 kilo weight (per adult); | |
3. | Full costs of shipping and insurance in transit for transporting a reasonable quantity of your household goods and personal effects. |
/s/ Jan Vernon | ||||
Jan Vernon | ||||
PO Box 869077
|
||
Plano, TX 75086-9077
|
||
5301 Legacy Drive
|
||
Plano, TX 75024-3109
|
||
Phone 972.673.7000
|
||
Fax 972.673.7976
|
Page 2
Rodger Collins |
Current Salary | New Salary | $ Increase /% Increase | ||
$464,000
|
$510,000 | $46,000 / 10% |
| Part 1 is a grant of Restricted Stock Units vesting 100% at the end of three years. | ||
| Part 2 is a Stock Option grant which vests equally over three years. |
Current ESA | New ESA | $ Increase/% Increase | ||
$14,000
|
$19,000 | $5,000 / 36% |
Page 3
Rodger Collins |
Page 4
Rodger Collins |
Sincerely yours,
|
||
|
||
/s/ Larry D. Young
|
||
|
||
President and CEO
|
PO Box 869077 | ||
Plano, TX 75086-9077 | ||
5301 Legacy Drive | ||
Plano, TX 75024-3109 | ||
Phone 972.673.7000 | ||
Fax 972.673.7976 |
/s/ Rodger Collins
|
||
|
PO Box 869077 | ||
Plano, TX 75086-9077
|
||
5301 Legacy Drive
|
||
Plano, TX 75024-3109
|
||
Phone 972.673.7000
|
||
Fax 972.673.7976
|
1
PO Box 869077 | ||
Plano, TX 75086-9077
|
||
5301 Legacy Drive
|
||
Plano, TX 75024-3109
|
||
Phone 972.673.7000
|
||
Fax 972.673.7976
|
| Part 1 is a grant of Restricted Stock Units vesting 100% at the end of three years. Note that subject to Compensation Committee approval vesting requirements on restricted stock may change to performance based vesting criteria in the future. | ||
| Part 2 is a Stock Option grant which vests equally over three years. |
2
PO Box 869077 | ||
Plano, TX 75086-9077
|
||
5301 Legacy Drive
|
||
Plano, TX 75024-3109
|
||
Phone 972.673.7000
|
||
Fax 972.673.7976
|
Dollar Value Converted | ||
to Stock/Stock Options | Vesting Schedule | |
$750,000
|
12 months from appointment date | |
$750,000
|
24 months from appointment date | |
$750,000
|
36 months from appointment date | |
$750,000
|
48 months from appointment date | |
$750,000
|
60 months from appointment date |
3
PO Box 869077 | ||
Plano, TX 75086-9077
|
||
5301 Legacy Drive
|
||
Plano, TX 75024-3109
|
||
Phone 972.673.7000
|
||
Fax 972.673.7976
|
w Home Buying Closing Costs | |||
w Home Selling Assistance | |||
w House Hunting Trip(s) | |||
w Temporary Living | |||
w Storage | |||
w Return Trips | |||
w House Hold Goods Movement | |||
w Final Move |
4
PO Box 869077 | ||
Plano, TX 75086-9077
|
||
5301 Legacy Drive
|
||
Plano, TX 75024-3109
|
||
Phone 972.673.7000
|
||
Fax 972.673.7976
|
Sincerely yours,
|
||
|
||
/s/ Larry D. Young
|
||
Larry D. Young
|
||
President & Chief Executive Officer
|
Cc:
|
Larry Solomon
Jan Vernon |
5
|
To:
|
Bill Zeller | |
|
||
Re:
|
Employment Offer |
Name
|
/s/ Martin M. Ellen
|
Date |
February 16, 2010
|
|||||||
|
Martin M. Ellen |
Cc:
|
Larry Solomon
Jan Vernon |
6
POSITION | TIER | SEVERANCE MULTIPLE | ||
Chief Executive Officer
|
Tier I | 3.0 | ||
|
||||
Broadband 0 Executives who are designated
|
Tier II | 2.75 | ||
by the Chief Executive Officer
|
||||
|
||||
Broadband 1 Executives who are designated
|
Tier III | 2.5 | ||
by the Chief Executive Officer
|
||||
|
||||
Broadband 2 Executives who are designated
|
Tier IV | 2.0 | ||
by the Chief Executive Office
|
||||
|
||||
Broadband 3 Executives who are designated
|
Tier V | 1.5 | ||
by the Chief Executive Officer
|
Approved and Adopted by the Board of Directors | ||
of Dr Pepper Snapple Group, Inc. on February 24, | ||
2010. |
For the Fiscal Years | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(in millions) | ||||||||||||||||||||
Calculation of fixed charges ratio:
|
||||||||||||||||||||
Income (loss) before provision (benefit) for income taxes,
equity in earnings of unconsolidated subsidiaries and
cumulative effect of change in accounting policy
|
$ | 868 | $ | (375 | ) | $ | 817 | $ | 805 | $ | 787 | |||||||||
|
||||||||||||||||||||
Add/(deduct):
|
||||||||||||||||||||
Fixed Charges
|
265 | 285 | 274 | 273 | 218 | |||||||||||||||
Amortization of capitalized interest
|
2 | 1 | 1 | 1 | | |||||||||||||||
Capitalized interest
|
(8 | ) | (8 | ) | (6 | ) | (3 | ) | (1 | ) | ||||||||||
|
||||||||||||||||||||
Total earnings available for fixed charges
|
$ | 1,127 | $ | (97 | ) | $ | 1,086 | $ | 1,076 | $ | 1,004 | |||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Fixed charges
:
|
||||||||||||||||||||
Interest expense
|
$ | 243 | $ | 257 | $ | 253 | $ | 257 | $ | 210 | ||||||||||
Capitalized interest
|
8 | 8 | 6 | 3 | 1 | |||||||||||||||
Interest component of rental expense
(1)
|
14 | 20 | 15 | 13 | 7 | |||||||||||||||
|
||||||||||||||||||||
Total fixed charges
|
$ | 265 | $ | 285 | $ | 274 | $ | 273 | $ | 218 | ||||||||||
|
||||||||||||||||||||
|
||||||||||||||||||||
Ratio of earnings to fixed charges
|
4.3x | | 4.0x | 3.9x | 4.6x | |||||||||||||||
|
||||||||||||||||||||
Deficiency in the coverage of earnings to fixed charges
|
$ | | $ | 382 | $ | | $ | | $ | |
(1) | Represents a reasonable estimate of the interest component of rental expense incurred by us. |
Name of Subsidiary | Jurisdiction of Formation | |
1. 234DP Aviation, LLC
|
Delaware | |
2. A&W Concentrate Company
|
Delaware | |
3. Americas Beverages Management GP
|
Nevada | |
4. AmTrans, Inc.
|
Illinois | |
5. Berkeley Square US, Inc.
|
Delaware | |
6. Beverage Investments LLC
|
Delaware | |
7. Beverages Delaware Inc.
|
Delaware | |
8. DP Beverages Inc.
|
Delaware | |
9. DPS Americas Beverages, LLC.
|
Delaware | |
10. DPS Beverages, Inc.
|
Delaware | |
11. DPS Finance II, Inc.
|
Delaware | |
12. DPS Holding Inc.
|
Delaware | |
13. Dr Pepper Company
|
Delaware | |
14. Dr Pepper Snapple Group Employee Relief Fund
|
Texas | |
15. Dr Pepper/Seven Up Beverage Sales Company
|
Texas | |
16. Dr Pepper/Seven Up Manufacturing Company
|
Delaware | |
17. Dr Pepper/Seven Up, Inc.
|
Delaware | |
18. High Ridge Investments US, Inc.
|
Delaware | |
19. International Beverage Investments GP
|
Delaware | |
20. International Investments Management LLC
|
Delaware | |
21. Juice Guys Care, Inc.
|
Massachusetts | |
22. Motts General Partnership
|
Nevada | |
23. Motts LLP
|
Delaware | |
24. MSSI LLC
|
Delaware | |
25. Nantucket Allserve, Inc.
|
Massachusetts | |
26. Nuthatch Trading US, Inc.
|
Delaware | |
27. Pacific Snapple Distributors, Inc.
|
California | |
28. Royal Crown Company, Inc.
|
Delaware | |
29. Snapple Beverage Corp.
|
Delaware | |
30. Snapple Distributors, Inc.
|
Delaware | |
31. Splash Transport, Inc.
|
Delaware | |
32. The American Bottling Company
|
Delaware | |
33. Canada Dry Motts Inc.
|
Canada | |
34. Aguas Minerales International Investments B.V.
|
Netherlands | |
35. Bebidas Americas Investments B.V.
|
Netherlands | |
36. Comercializadora de Bebidas, SA de CV
|
Mexico | |
37. Compania Exportadora de Aguas Minerales, S.A. de C.V.
|
Mexico | |
38. Distribuidora Anahuac, S.A. de C.V.
|
Mexico | |
39. Distribuidora de Aguas Minerales, S.A. de C.V.
|
Mexico | |
40. Peñafiel Aguas Minerales SA de CV
|
Mexico | |
41. Peñafiel Bebidas SA de CV
|
Mexico |
Name of Subsidiary
Jurisdiction of Formation
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
/s/ Larry D. Young | ||||
Date: February 26, 2010 | Larry D. Young | |||
President and Chief Executive Officer of
Dr Pepper Snapple Group, Inc. |
||||
1. | I have reviewed this Annual Report on Form 10-K of Dr Pepper Snapple Group, Inc.; | |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; | |
4. | The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | ||
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
(c) | Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | ||
(d) | Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
/s/ John O. Stewart | ||||
Date: February 26, 2010 | John O. Stewart | |||
Executive Vice President and Chief Financial Officer of
Dr Pepper Snapple Group, Inc. |
||||
(1) | the Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2009, as filed with the Securities and Exchange Commission (the Report), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and | ||
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Larry D. Young | ||||
Dated: February 26, 2010 | Larry D. Young | |||
President and Chief Executive Officer of
Dr Pepper Snapple Group, Inc. |
||||
Dated: February 26, 2010 | /s/ John O. Stewart | |||
John O. Stewart | ||||
Executive Vice President and Chief Financial Officer of Dr Pepper Snapple Group, Inc. | ||||