|
R
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
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FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013
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or
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£
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
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Delaware
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98-0517725
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(State or other jurisdiction of
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(I.R.S. employer
|
incorporation or organization)
|
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identification number)
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5301 Legacy Drive, Plano, Texas
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75024
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(Address of principal executive offices)
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(Zip code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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COMMON STOCK, $0.01 PAR VALUE
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|
NEW YORK STOCK EXCHANGE
|
Large Accelerated Filer
R
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Accelerated Filer
o
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Non-Accelerated Filer
o
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Smaller Reporting Company
o
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Page
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||
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||
Item 10.
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Directors, Executive Officers of the Registrant and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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||
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|
•
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changes in consumer preferences, trends and health concerns;
|
•
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the impact of new or proposed beverage taxes or regulations on our business;
|
•
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the highly competitive markets in which we operate and our ability to compete with companies that have significant financial resources;
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•
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maintaining our relationships with our large retail customers;
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•
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dependence on third party bottling and distribution companies;
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•
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recession, financial and credit market disruptions and other economic conditions;
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•
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increases in the cost of raw materials and energy used in our business;
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•
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increases in the cost of employee benefits and withdrawal liabilities associated with multi-employer plans;
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•
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future impairment of our goodwill and other intangible assets;
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•
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the need to service our debt;
|
•
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litigation claims or legal proceedings against us;
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•
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shortages of materials used in our business;
|
•
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substantial disruption at our manufacturing or distribution facilities;
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•
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failure to comply with governmental regulations in the countries in which we operate;
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•
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weather, climate changes and the availability of water;
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•
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disruptions to our information systems and third-party service providers;
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•
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our products meeting health and safety standards or contamination of our products;
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•
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fluctuations in our tax obligations;
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•
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strikes or work stoppages;
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•
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infringement of our intellectual property rights by third parties, intellectual property claims against us or adverse events regarding licensed intellectual property;
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•
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the need for substantial investment and restructuring at our manufacturing, distribution and other facilities;
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•
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maintaining our relationships with our allied brand owners;
|
•
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our ability to retain or recruit qualified personnel;
|
•
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changes in accounting standards; and
|
•
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other factors discussed in Item 1A, "Risk Factors" under "Risks Related to Our Business" and elsewhere in this Annual Report on Form 10-K.
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•
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#1 flavored CSD company in the U.S.
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•
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Approximately 83% of our volume from brands that are either #1 or #2 in their category
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•
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#3 North American liquid refreshment beverage ("LRB") business
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|
•
|
$6.0 billion of net sales in 2013 from the U.S. (88%), Canada (4%) and Mexico and the Caribbean (8%)
|
CSDs
|
|
|
|
|
|
|
•
|
#1 in its flavor category and #2 overall flavored CSD in the U.S.
|
•
|
Distinguished by its unique blend of 23 flavors and loyal consumer following
|
|
•
|
Flavors include regular, diet, cherry and Dr Pepper TEN
|
|
•
|
Oldest major soft drink in the U.S., introduced in 1885
|
Our Core 4 brands
|
|
|
|
|
|
|
•
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#1 ginger ale in the U.S. and Canada, which includes regular, diet and TEN
|
•
|
Brand also includes club soda, tonic, sparkling seltzer water and other mixers
|
|
•
|
Created in Toronto, Canada in 1904 and introduced in the U.S. in 1919
|
|
|
|
|
•
|
#2 lemon-lime CSD in the U.S.
|
•
|
Flavors include regular, diet, cherry and 7UP TEN
|
|
•
|
The original "Un-Cola," created in 1929
|
|
|
|
|
•
|
#1 root beer in the U.S.
|
•
|
Flavors include regular, diet, cream soda and A&W TEN
|
|
•
|
A classic all-American beverage first sold at a veteran's parade in 1919
|
|
|
|
|
•
|
#1 orange CSD in the U.S.
|
•
|
Flavors include orange, strawberry, grape, diet, Sunkist TEN and other fruits
|
|
•
|
Licensed to us as a CSD by the Sunkist Growers Association since 1986
|
|
|
|
Other CSD brands
|
|
|
|
|
|
|
•
|
#1 grapefruit CSD in the U.S. and a leading grapefruit CSD in Mexico
|
•
|
Founded in 1938
|
|
|
|
|
|
|
|
•
|
#3 orange CSD in the U.S.
|
•
|
Flavors include orange, diet and other fruits
|
|
•
|
Brand began as the all-natural orange flavor drink in 1906
|
|
|
|
|
•
|
#1 carbonated mineral water brand in Mexico
|
•
|
Brand includes Flavors, Twist, Orangeade and Lemonade
|
|
•
|
Mexico's oldest mineral water
|
|
|
|
|
•
|
#2 ginger ale in the U.S. and Canada
|
•
|
Brand includes club soda, tonic, sparkling seltzer water and other mixers
|
|
•
|
First carbonated beverage in the world, invented in 1783
|
|
|
|
|
•
|
Royal Crown Cola originated in Columbus, Georgia in 1905
|
•
|
Flavors include regular, diet, cherry and RC TEN
|
|
|
|
|
|
|
|
•
|
#2 citrus CSD in the U.S.
|
•
|
Flavors include regular, diet and cherry lemon
|
|
•
|
Debuted in 1951
|
|
•
|
Launched as a national brand in 2011
|
NCBs
|
|
|
|
|
|
|
•
|
A leading ready-to-drink tea in the U.S.
|
•
|
A full range of tea products including premium (regular and diet) and value teas
|
|
•
|
Brand also includes premium juices and juice drinks
|
|
•
|
Founded in Brooklyn, New York in 1972
|
|
•
|
#1 branded shelf-stable fruit punch brand in the U.S.
|
•
|
Brand includes a variety of fruit flavored and reduced calorie juice drinks
|
|
•
|
Developed originally as an ice cream topping known as "Leo's Hawaiian Punch" in 1934
|
|
|
|
|
•
|
#1 branded apple juice and #1 apple sauce brand in the U.S.
|
•
|
Juice products include apple and other fruit juices and Mott's for Tots
|
|
•
|
Apple sauce products include regular, unsweetened and flavored
|
|
•
|
Brand began as a line of apple cider and vinegar offerings in 1842
|
|
•
|
A leading spicy tomato juice brand in the U.S., Canada and Mexico
|
•
|
Key ingredient in Canada's popular cocktail, the Bloody Caesar, and mixed with beer in Mexico
|
|
•
|
Brand includes seafood blend and chamoy
|
|
•
|
Created in 1969
|
|
•
|
Brand of water which includes Frutal and Figura
|
•
|
Created in 1993 in Guadalajara, Mexico
|
|
|
|
|
|
|
|
•
|
#1 portfolio of mixer brands in the U.S.
|
•
|
#1 Bloody Mary brand (Mr & Mrs T) in the U.S.
|
|
|
•
|
Leading mixers (Margaritaville and Rose's) in their flavor categories
|
|
|
•
|
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, which could impact our debt maturity profile.
|
|
Packaged
|
|
Beverage
|
|
Latin America
|
|
|
|||||||||||||
|
Beverages
|
|
Concentrates
|
|
Beverages
|
|
|
|||||||||||||
|
Owned
|
|
Leased
|
|
Owned
|
|
Leased
|
|
Owned
|
|
Leased
|
|
Total
|
|||||||
United States:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Office buildings
(1)
|
1
|
|
|
8
|
|
|
1
|
|
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
Manufacturing facilities
|
11
|
|
|
6
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
Principal distribution centers and warehouse facilities
|
42
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
113
|
|
|
54
|
|
|
85
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
141
|
|
Mexico and Canada:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Office buildings
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
3
|
|
Manufacturing facilities
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
Principal distribution centers and warehouse facilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
5
|
|
|
8
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
7
|
|
|
14
|
|
Total
|
54
|
|
|
86
|
|
|
2
|
|
|
—
|
|
|
6
|
|
|
7
|
|
|
155
|
|
•
|
$200 million of share repurchases were authorized on November 20, 2009;
|
•
|
$800 million of share repurchases were authorized on February 24, 2010;
|
•
|
$1 billion of share repurchases were authorized on July 12, 2010; and
|
•
|
$1 billion of share repurchases were authorized on November 17, 2011.
|
Period
|
|
Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(1)
|
|
Maximum Dollar Value of Shares that May Yet be Purchased Under Publicly Announced Plans or Programs
|
||||||
October 1, 2013 – October 31, 2013
|
|
1,103
|
|
|
$
|
44.27
|
|
|
1,103
|
|
|
$
|
680,724
|
|
November 1, 2013 – November 30, 2013
|
|
576
|
|
|
47.63
|
|
|
576
|
|
|
653,295
|
|
||
December 1, 2013 – December 31, 2013
|
|
1,684
|
|
|
48.14
|
|
|
1,684
|
|
|
572,225
|
|
||
For the quarter ended December 31, 2013
|
|
3,363
|
|
|
46.78
|
|
|
3,363
|
|
|
|
(1)
|
As previously disclosed, the Board has authorized us to purchase an aggregate amount of up to $3,000 million of our outstanding common stock. This column discloses the number of shares purchased pursuant to these programs during the indicated time periods. As of
December 31, 2013
, there was a remaining balance of
$572 million
authorized for repurchase that had not been utilized.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
|
(in millions, except per share data)
|
||||||||||||||||||
Statements of Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales
|
$
|
5,997
|
|
|
$
|
5,995
|
|
|
$
|
5,903
|
|
|
$
|
5,636
|
|
|
$
|
5,531
|
|
Gross profit
|
3,498
|
|
|
3,495
|
|
|
3,418
|
|
|
3,393
|
|
|
3,297
|
|
|||||
Income from operations
|
1,046
|
|
|
1,092
|
|
|
1,024
|
|
|
1,025
|
|
|
1,085
|
|
|||||
Net income
|
624
|
|
|
629
|
|
|
606
|
|
|
528
|
|
|
555
|
|
|||||
Basic earnings per share
(1)
|
$
|
3.08
|
|
|
$
|
2.99
|
|
|
$
|
2.77
|
|
|
$
|
2.19
|
|
|
$
|
2.18
|
|
Diluted earnings per share
(1)
|
3.05
|
|
|
2.96
|
|
|
2.74
|
|
|
2.17
|
|
|
2.17
|
|
|||||
Dividends declared per share
|
1.52
|
|
|
1.36
|
|
|
1.21
|
|
|
0.90
|
|
|
0.15
|
|
|||||
Statements of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
(2)
|
$
|
866
|
|
|
$
|
482
|
|
|
$
|
783
|
|
|
$
|
2,535
|
|
|
$
|
865
|
|
Investing activities
|
(195
|
)
|
|
(217
|
)
|
|
(240
|
)
|
|
(225
|
)
|
|
(251
|
)
|
|||||
Financing activities
|
(880
|
)
|
|
(603
|
)
|
|
(152
|
)
|
|
(2,280
|
)
|
|
(554
|
)
|
|
As of December 31,
|
||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||
|
(in millions, except per share data)
|
||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||
Total assets
|
8,201
|
|
|
8,928
|
|
|
$
|
9,283
|
|
|
$
|
8,776
|
|
|
$
|
8,638
|
|
Short-term borrowings and current portion of long-term obligations
|
66
|
|
|
250
|
|
|
452
|
|
|
404
|
|
|
—
|
|
|||
Long-term obligations
|
2,508
|
|
|
2,554
|
|
|
2,256
|
|
|
1,687
|
|
|
2,960
|
|
|||
Other non-current liabilities
(2)
|
2,386
|
|
|
2,862
|
|
|
2,849
|
|
|
3,375
|
|
|
1,775
|
|
|||
Total stockholders’ equity
|
2,277
|
|
|
2,280
|
|
|
2,263
|
|
|
2,459
|
|
|
3,187
|
|
(1)
|
The weighted average number of common shares outstanding used in the calculation of earnings per share ("EPS") was impacted by the repurchase and retirement of DPS common stock. For the years ended
December 31, 2013
,
2012
,
2011
and 2010, we repurchased and retired
8.7 million
shares,
9.5 million
shares,
13.7 million
shares and 30.8 million shares, respectively. No shares were repurchased during the year ended December 31, 2009.
|
(2)
|
The 2010 other non-current liabilities for the fiscal year reflects non-current deferred revenue of $1,515 million due to the receipt of separate one-time nonrefundable cash payments from PepsiCo and Coca-Cola recorded as deferred revenue, which is included within operating activities on the Consolidated Statement of Cash Flows.
|
•
|
Increased health consciousness.
Consumers are increasingly becoming more concerned about health and wellness, focusing on caloric intake and sugar content in both regular CSDs and juices and the use of artificial sweeteners in diet CSDs.
We believe the main beneficiaries of this trend include naturally sweetened, low calorie drinks, all natural and organic beverages, ready-to-drink teas and bottled waters.
|
•
|
Increased government regulation.
Government agencies, as a result of concerns about the public health consequences and health care costs associated with obesity, have been proposing and, in some cases, enacting new taxes or regulations on sugar-sweetened beverages. Any changes of regulations or imposed taxes could reduce demand and/or cause us to raise our prices.
|
•
|
Changes in economic factors.
We believe changes in economic factors, including forms of government assistance such as the Supplemental Nutrition Assistance Program, could impact consumers' purchasing power which may result in a decrease in purchases of our products.
|
•
|
Changes in consumer preferences.
We are impacted by shifting consumer demographics and needs. We believe marketing and product innovations that target fast growing population segments, such as the Hispanic community in the U.S., could drive market growth. Additionally, as more consumers are faced with a busy and on-the-go lifestyle, sales of single-serve beverages could increase, which typically have higher margins.
|
•
|
Increased competition in the LRB market.
A number of our competitors are large corporations with significant financial resources. These competitors can use their resources and scale to rapidly respond to competitive pressures and changes in consumer preferences by introducing new products, reducing prices or increasing promotional activities, which could reduce the demand for our products.
|
•
|
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 and 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.
|
•
|
Volatility in the costs of raw materials.
The costs of a substantial portion of the raw materials used in the beverage industry are dependent on commodity prices for aluminum, corn, resin, diesel, natural gas, pulp and other commodities. We are also dependent on commodity prices for apples related to our applesauce production. Commodity price volatility has exerted pressure on industry margins and operating results.
|
•
|
The Beverage Concentrates segment reflects sales of our branded concentrates and syrup to third party bottlers primarily in the U.S. and Canada. Most of the brands in this segment are CSD brands.
|
•
|
The Packaged Beverages segment reflects sales in the U.S. and Canada from the manufacture and distribution of finished beverages and other products, including sales of our own brands and third party brands, through both DSD and WD.
|
•
|
The Latin America Beverages segment reflects sales in the Mexico, Caribbean and other international markets from the manufacture and distribution of concentrates, syrup and finished beverages.
|
•
|
Net sales totaled
$5,997 million
for the
year ended
December 31, 2013
,
an
in
crease of
$2 million
from the
year ended
December 31, 2012
.
|
•
|
Net income for the
year ended
December 31, 2013
was
$624 million
, compared to
$629 million
for the
year ended
December 31, 2012
,
a
de
crease of
$5 million
, or approximately
1%
.
|
•
|
Diluted earnings per share was
$3.05
for the
year ended
December 31, 2013
and
$2.96
for the year ago period,
an
in
crease of
$0.09
, or approximately
3%
.
|
•
|
Earnings for the
year ended
December 31, 2013
included a $33 million non-cash increase in net income associated with the conclusion of an Internal Revenue Service ("IRS") audit and
a $12 million non-cash reduction in net income associated with a change in Canadian tax law.
These two items increased diluted earnings per share by $0.10 during the
year ended
December 31, 2013
.
|
•
|
Earnings for the
year ended
December 31, 2013
also included a $56 million non-cash charge related to our intention to withdraw from the Soft Drink Industry Local Union 710 Pension Fund ("Local 710"), which decreased diluted earnings per share by $0.17 during the
year ended
December 31, 2013
.
|
•
|
During
2013
, our Board of Directors (our "Board") declared aggregate dividends of
$1.52
per share on outstanding common stock, as compared to
$1.36
per share on outstanding common stock during
2012
. Dividends declared per share for the year ended
December 31, 2013
in
creased approximately
12%
.
|
•
|
On November 13, 2013, Standard & Poor's ("S&P") raised our rating from BBB with a positive outlook to BBB+ with a stable outlook.
|
•
|
During the years ended
December 31, 2013
and
2012
, we repurchased
8.7 million
and
9.5 million
shares of our common stock, respectively, valued at approximately
$400 million
each year.
|
•
|
During the first quarter of 2014, our Board declared a dividend of $0.41 per share, which will be paid on April 4, 2014, to shareholders of record as of March 17, 2014. The dividend declared during the first quarter of 2014 increased approximately 8% compared to the dividend declared in the previous quarter.
|
|
For the Year Ended December 31,
|
|
|
|||||||||||||
|
2013
|
|
2012
|
|
Percentage
|
|||||||||||
|
Dollars
|
|
Percent
|
|
Dollars
|
|
Percent
|
|
Change
|
|||||||
Net sales
|
$
|
5,997
|
|
|
100.0
|
%
|
|
$
|
5,995
|
|
|
100.0
|
%
|
|
—
|
%
|
Cost of sales
|
2,499
|
|
|
41.7
|
|
|
2,500
|
|
|
41.7
|
|
|
|
|||
Gross profit
|
3,498
|
|
|
58.3
|
|
|
3,495
|
|
|
58.3
|
|
|
—
|
|
||
Selling, general and administrative expenses
|
2,272
|
|
|
37.9
|
|
|
2,268
|
|
|
37.8
|
|
|
|
|||
Multi-employer pension plan withdrawal
|
56
|
|
|
2.2
|
|
|
—
|
|
|
—
|
|
|
|
|||
Depreciation and amortization
|
115
|
|
|
1.9
|
|
|
124
|
|
|
2.1
|
|
|
|
|||
Other operating expense, net
|
9
|
|
|
0.2
|
|
|
11
|
|
|
0.2
|
|
|
|
|||
Income from operations
|
1,046
|
|
|
17.4
|
|
|
1,092
|
|
|
18.2
|
|
|
(4
|
)
|
||
Interest expense
|
123
|
|
|
2.0
|
|
|
125
|
|
|
2.1
|
|
|
|
|||
Interest income
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
|
|||
Other expense (income), net
|
383
|
|
|
6.4
|
|
|
(9
|
)
|
|
(0.2
|
)
|
|
|
|||
Income before (benefit) provision for income taxes and equity in earnings of unconsolidated subsidiaries
|
542
|
|
|
9.0
|
|
|
978
|
|
|
16.3
|
|
|
NM
|
|
||
(Benefit) provision for income taxes
|
(81
|
)
|
|
(1.4
|
)
|
|
349
|
|
|
5.8
|
|
|
|
|||
Income before equity in earnings of unconsolidated subsidiaries
|
623
|
|
|
10.4
|
|
|
629
|
|
|
10.5
|
|
|
|
|||
Equity in earnings of unconsolidated subsidiaries, net of tax
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|||
Net income
|
$
|
624
|
|
|
10.4
|
%
|
|
$
|
629
|
|
|
10.5
|
%
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
3.08
|
|
|
NM
|
|
|
$
|
2.99
|
|
|
NM
|
|
|
3
|
%
|
Diluted
|
$
|
3.05
|
|
|
NM
|
|
|
$
|
2.96
|
|
|
NM
|
|
|
3
|
%
|
|
For the Year Ended December 31, 2013
|
|
|
||||||||||||||||
(in millions)
|
As reported
|
|
Completion of the IRS audit in August 2013
|
|
Enactment of the Canadian bill in June 2013
|
|
As reported excluding tax and indemnity items
|
|
For the Year Ended December 31, 2012
|
||||||||||
Other expense (income), net
|
$
|
383
|
|
|
$
|
(430
|
)
|
|
$
|
38
|
|
|
$
|
(9
|
)
|
|
$
|
(9
|
)
|
Income before (benefit) provision for income taxes and equity in earnings of unconsolidated subsidiaries
|
542
|
|
|
430
|
|
|
(38
|
)
|
|
934
|
|
|
978
|
|
|||||
(Benefit) provision for income taxes
|
(81
|
)
|
|
463
|
|
|
(50
|
)
|
|
332
|
|
|
349
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effective tax rate
|
(14.9
|
)%
|
|
|
|
|
|
35.5
|
%
|
|
35.7
|
%
|
|
For the Year Ended
|
||||||
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Segment Results — Net sales
|
|
|
|
||||
Beverage Concentrates
|
$
|
1,229
|
|
|
$
|
1,221
|
|
Packaged Beverages
|
4,306
|
|
|
4,358
|
|
||
Latin America Beverages
|
462
|
|
|
416
|
|
||
Net sales
|
$
|
5,997
|
|
|
$
|
5,995
|
|
|
|
|
|
||||
|
For the Year Ended
|
||||||
|
December 31,
|
||||||
|
2013
|
|
2012
|
||||
Segment Results — SOP
|
|
|
|
||||
Beverage Concentrates
|
$
|
778
|
|
|
$
|
774
|
|
Packaged Beverages
|
525
|
|
|
539
|
|
||
Latin America Beverages
|
61
|
|
|
51
|
|
||
Total SOP
|
1,364
|
|
|
1,364
|
|
||
Unallocated corporate costs
|
309
|
|
|
261
|
|
||
Other operating expense, net
|
9
|
|
|
11
|
|
||
Income from operations
|
1,046
|
|
|
1,092
|
|
||
Interest expense, net
|
121
|
|
|
123
|
|
||
Other expense (income), net
|
383
|
|
|
(9
|
)
|
||
Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries
|
$
|
542
|
|
|
$
|
978
|
|
|
For the Year Ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2013
|
|
2012
|
|
Change
|
||||||
Net sales
|
$
|
1,229
|
|
|
$
|
1,221
|
|
|
$
|
8
|
|
SOP
|
778
|
|
|
774
|
|
|
4
|
|
|
For the Year Ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2013
|
|
2012
|
|
Change
|
||||||
Net sales
|
$
|
4,306
|
|
|
$
|
4,358
|
|
|
$
|
(52
|
)
|
SOP
|
525
|
|
|
539
|
|
|
(14
|
)
|
|
For the Year Ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2013
|
|
2012
|
|
Change
|
||||||
Net sales
|
$
|
462
|
|
|
$
|
416
|
|
|
$
|
46
|
|
SOP
|
61
|
|
|
51
|
|
|
10
|
|
|
For the Year Ended December 31,
|
|
|
|||||||||||||
|
2012
|
|
2011
|
|
Percentage
|
|||||||||||
|
Dollars
|
|
Percent
|
|
Dollars
|
|
Percent
|
|
Change
|
|||||||
Net sales
|
$
|
5,995
|
|
|
100.0
|
%
|
|
$
|
5,903
|
|
|
100.0
|
%
|
|
2
|
%
|
Cost of sales
|
2,500
|
|
|
41.7
|
|
|
2,485
|
|
|
42.1
|
|
|
|
|||
Gross profit
|
3,495
|
|
|
58.3
|
|
|
3,418
|
|
|
57.9
|
|
|
2
|
|
||
Selling, general and administrative expenses
|
2,268
|
|
|
37.8
|
|
|
2,257
|
|
|
38.3
|
|
|
|
|||
Depreciation and amortization
|
124
|
|
|
2.1
|
|
|
126
|
|
|
2.1
|
|
|
|
|||
Other operating expense, net
|
11
|
|
|
0.2
|
|
|
11
|
|
|
0.2
|
|
|
|
|||
Income from operations
|
1,092
|
|
|
18.2
|
|
|
1,024
|
|
|
17.3
|
|
|
7
|
|
||
Interest expense
|
125
|
|
|
2.1
|
|
|
114
|
|
|
1.9
|
|
|
|
|||
Interest income
|
(2
|
)
|
|
—
|
|
|
(3
|
)
|
|
(0.1
|
)
|
|
|
|||
Other income, net
|
(9
|
)
|
|
(0.2
|
)
|
|
(12
|
)
|
|
(0.2
|
)
|
|
|
|||
Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries
|
978
|
|
|
16.3
|
|
|
925
|
|
|
15.7
|
|
|
6
|
|
||
Provision for income taxes
|
349
|
|
|
5.8
|
|
|
320
|
|
|
5.5
|
|
|
|
|||
Income before equity in earnings of unconsolidated subsidiaries
|
629
|
|
|
10.5
|
|
|
605
|
|
|
10.2
|
|
|
|
|||
Equity in earnings of unconsolidated subsidiaries, net of tax
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
|
|||
Net income
|
$
|
629
|
|
|
10.5
|
%
|
|
$
|
606
|
|
|
10.3
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
2.99
|
|
|
NM
|
|
|
$
|
2.77
|
|
|
NM
|
|
|
8
|
%
|
Diluted
|
$
|
2.96
|
|
|
NM
|
|
|
$
|
2.74
|
|
|
NM
|
|
|
8
|
%
|
|
For the Year Ended
|
||||||
|
December 31,
|
||||||
|
2012
|
|
2011
|
||||
Segment Results — Net sales
|
|
|
|
||||
Beverage Concentrates
|
$
|
1,221
|
|
|
$
|
1,193
|
|
Packaged Beverages
|
4,358
|
|
|
4,292
|
|
||
Latin America Beverages
|
416
|
|
|
418
|
|
||
Net sales
|
$
|
5,995
|
|
|
$
|
5,903
|
|
|
|
|
|
||||
|
|
|
|
||||
|
For the Year Ended
|
||||||
|
December 31,
|
||||||
|
2012
|
|
2011
|
||||
Segment Results — SOP
|
|
|
|
||||
Beverage Concentrates
|
$
|
774
|
|
|
$
|
779
|
|
Packaged Beverages
|
539
|
|
|
519
|
|
||
Latin America Beverages
|
51
|
|
|
43
|
|
||
Total SOP
|
1,364
|
|
|
1,341
|
|
||
Unallocated corporate costs
|
261
|
|
|
306
|
|
||
Other operating expense, net
|
11
|
|
|
11
|
|
||
Income from operations
|
1,092
|
|
|
1,024
|
|
||
Interest expense, net
|
123
|
|
|
111
|
|
||
Other income, net
|
(9
|
)
|
|
(12
|
)
|
||
Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries
|
$
|
978
|
|
|
$
|
925
|
|
|
For the Year Ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2012
|
|
2011
|
|
Change
|
||||||
Net sales
|
$
|
1,221
|
|
|
$
|
1,193
|
|
|
$
|
28
|
|
SOP
|
774
|
|
|
779
|
|
|
(5
|
)
|
|
For the Year Ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2012
|
|
2011
|
|
Change
|
||||||
Net sales
|
$
|
4,358
|
|
|
$
|
4,292
|
|
|
$
|
66
|
|
SOP
|
539
|
|
|
519
|
|
|
20
|
|
|
For the Year Ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2012
|
|
2011
|
|
Change
|
||||||
Net sales
|
$
|
416
|
|
|
$
|
418
|
|
|
$
|
(2
|
)
|
SOP
|
51
|
|
|
43
|
|
|
8
|
|
•
|
continued capital expenditures to upgrade our existing plants and fleet of distribution trucks, make investments in IT systems and replace and expand our cold drink equipment;
|
•
|
continued payment of dividends;
|
•
|
seasonality of our operating cash flows could impact short-term liquidity;
|
•
|
our ability to issue unsecured commercial paper notes ("Commercial Paper") on a private placement basis up to a maximum aggregate amount outstanding at any time of
$500 million
;
|
•
|
our continued repurchases of our outstanding common stock pursuant to our repurchase programs; and
|
•
|
acquisitions of regional bottling companies, distributors and distribution rights to further extend our geographic coverage or access to new products.
|
|
Amount Utilized
|
|
Balances Available
|
||||
Revolver
|
$
|
—
|
|
|
$
|
433
|
|
Letters of credit
|
2
|
|
|
73
|
|
||
Swingline advances
|
—
|
|
|
50
|
|
|
For the Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net cash provided by operating activities
|
$
|
866
|
|
|
$
|
482
|
|
|
$
|
783
|
|
Net cash used in investing activities
|
(195
|
)
|
|
(217
|
)
|
|
(240
|
)
|
|||
Net cash used in financing activities
|
(880
|
)
|
|
(603
|
)
|
|
(152
|
)
|
|
|
|
Payments Due in Year
|
||||||||||||||||||||||||
|
Total
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
After 2018
|
||||||||||||||
Senior unsecured notes
(1)
|
$
|
2,474
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
724
|
|
|
$
|
1,250
|
|
Commercial Paper
|
65
|
|
|
65
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Capital leases
(2)
|
87
|
|
|
6
|
|
|
6
|
|
|
6
|
|
|
6
|
|
|
6
|
|
|
57
|
|
|||||||
Operating leases
(3)
|
265
|
|
|
55
|
|
|
44
|
|
|
38
|
|
|
30
|
|
|
22
|
|
|
76
|
|
|||||||
Purchase obligations
(4)
|
634
|
|
|
513
|
|
|
69
|
|
|
30
|
|
|
16
|
|
|
4
|
|
|
2
|
|
|||||||
Interest payments
(5)
|
935
|
|
|
94
|
|
|
96
|
|
|
96
|
|
|
97
|
|
|
78
|
|
|
474
|
|
|||||||
Payable to Mondelēz
|
54
|
|
|
7
|
|
|
7
|
|
|
7
|
|
|
7
|
|
|
7
|
|
|
19
|
|
|||||||
Total
|
$
|
4,514
|
|
|
$
|
740
|
|
|
$
|
222
|
|
|
$
|
677
|
|
|
$
|
156
|
|
|
$
|
841
|
|
|
$
|
1,878
|
|
(1)
|
Amounts represent payment for the senior unsecured notes issued by us. Please refer to
Note 9 of the Notes to our Audited Consolidated Financial Statements
for further information.
|
(2)
|
Amounts represent our contractual payment obligations for our lease arrangements classified as capital leases. These amounts exclude renewal options not yet executed but were included in the lease term to determine the capital lease obligation as the lease imposes a penalty on us in such amount that the renewal appeared reasonably assured at lease inception.
|
(3)
|
Amounts represent minimum rental commitments 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 our estimated interest payments based on specified interest rates for fixed rate debt and the impact of interest rate swaps which convert fixed interest rates to variable interest rates.
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
Revenue Recognition
|
|
|
|
|
We recognize revenue, net of the costs of our customer incentives, at the time risk of loss has been transferred to our customer.
See the discussion above under
Customer Incentives and Marketing Programs
for further information.
|
|
Our revenue recognition accounting methodology contains uncertainties because it requires management to make assumptions and to apply judgment to estimate the amount of shipments where risk of loss has not yet transferred. Our estimates are based primarily on historical transactional experience, which is reviewed annually.
|
|
We have not made any material changes in the accounting methodology we used to measure our estimate for shipments where risk of loss has not yet transferred.
A 10% change in the estimate for shipment where the risk of loss has not yet transferred as of December 31, 2013, would have affected net income by less than $1 million for the year ended December 31, 2013.
|
|
|
|
|
|
Pension and Postretirement Benefits
|
|
|
||
We have several pension and postretirement plans covering employees who satisfy age and length of service requirements. Depending on the plan, pension and postretirement benefits are based on a combination of factors, which may include salary, age and years of service.
Our largest U.S. defined benefit pension plan, which is a cash balance plan, was suspended and the accrued benefit was frozen effective December 31, 2008. Participants in this plan no longer earn additional benefits for future services or salary increases.
Employee benefit plan obligations and expenses included in our Consolidated Financial Statements are determined from actuarial analyses based on plan assumptions, employee demographic data, years of service, compensation, benefits and claims paid and employer contributions.
|
|
The calculation of pension and postretirement plan obligations and related expenses is dependent on several assumptions used to estimate the present value of the benefits earned while the employee is eligible to participate in the plans.
The key assumptions we use in the actuarial methods to determine the plan obligations and related expenses include: (1) the discount rate used to calculate the present value of the plan liabilities; (2) employee turnover, retirement age and mortality; and (3) the expected return on plan assets. Our assumptions reflect our historical experience and our best judgment regarding future performance.
Refer to
Note 14 of the Notes to our Audited Consolidated Financial Statements
for further information about the key assumptions.
|
|
The effect of a 1% increase or decrease in the weighted-average discount rate used to determine the pension benefit obligations for U.S. plans would change the benefit obligation as of
December 31, 2013
, by approximately
$24 million and $28 million
, respectively.
The effect of a 1% increase or decrease in the weighted-average discount rate used to determine the net periodic pension costs would change the costs for the year ended
December 31, 2013
, by approximately
$1 million.
The effect of a 1% increase or decrease in the expected return on plan assets used to determine the net periodic pension costs would change the costs for the year ended
December 31, 2013 by approximately $2 million.
|
|
|
|
|
|
Multi-employer Pension Plan Withdrawal Liability
|
|
|
||
We contribute to a number of multi-employer defined benefit plans under the terms of collective bargaining agreements that cover its union-represented employees. We record liabilities to exit a participating plan when an exit becomes both probable and estimable. The estimated withdrawal liability is determined from actuarial analyses based on historical and anticipated employer contributions.
|
|
The calculation of the multi-employer pension plan withdrawal liability and related expense is dependent on several assumptions used to estimate the present value of the estimated withdrawal liability.
The key assumptions we use in the actuarial methods to determine the estimated withdrawal liability and related expenses include: (1) the amount of the anticipated contributions, which is based upon the timing of the withdrawal liability assessment provided by the trustee; (2) the discount rate used to calculate the present value of the estimated withdrawal liability; and (3) the expected return on plan assets. Our assumptions reflect our best judgment regarding the outcome of the assessment.
|
|
The effect of a 10% increase or decrease in the anticipated contributions used by the trustee to assess the withdrawal liability would change the withdrawal liability as of December 31, 2013, by approximately $6 million.
The effect of a 1% increase or decrease in the discount rate used to determine the withdrawal liability would change the withdrawal liability as of December 31, 2013, by approximately $7 million and $9 million, respectively.
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
Risk Management Programs
|
|
|
||
We retain selected levels of property, casualty, workers' compensation, health and other business risks. Many of these risks are covered under conventional insurance programs with high deductibles or self-insured retentions.
|
|
We believe the use of actuarial methods to estimate our future losses provides a consistent and effective way to measure our self-insured liabilities. However, the estimation of our liability is judgmental and uncertain given the nature of claims involved and length of time until their ultimate cost is known.
Accrued liabilities related to the retained casualty and health risks are calculated based on loss experience and development factors, which contemplate a number of variables including claim history and expected trends. These loss development factors are established in consultation with actuaries.
|
|
We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate our self-insured liabilities. The final settlement amount of claims can differ materially from our estimate as a result of changes in factors such as the frequency and severity of accidents, medical cost inflation, legislative actions, uncertainty around jury verdicts and awards and other factors outside of our control.
A 10% change in our accrued liabilities related to the retained risks as of December 31, 2013, would have affected net income by approximately
$8 million
for the year ended December 31, 2013.
|
|
|
|
|
|
Income Taxes
|
|
|
||
We establish income tax liabilities to remove some or all of the income tax benefit of any of our income tax positions based upon one of the following: (1) the tax position is not “more likely than not” to be sustained, (2) the tax position is “more likely than not” to be sustained, but for a lesser amount, or (3) the tax position is “more likely than not” to be sustained , but not in the financial period in which the tax position was originally taken.
We assess the likelihood of realizing our deferred tax assets. Valuation allowances reduce deferred tax assets to the amount more likely than not to be realized.
|
|
Our liability for uncertain tax positions contains uncertainties because management is required to make assumptions and to apply judgment to estimate the exposures associated with our various tax positions.
We base our judgment of the recoverability of our deferred tax asset primarily on historical earnings, our estimate of current and expected future earnings and prudent and feasible tax planning strategies.
|
|
Our income tax returns, like those of most companies, are periodically audited by domestic and foreign tax authorities. These audits include questions regarding our tax positions, including the timing and amount of deductions and the allocation of income among various tax jurisdictions. As these audits progress, events may occur that cause us to change our liability for uncertain tax positions.
To the extent we prevail in matters for which a liability for uncertain tax positions has been established, or are required to pay amounts in excess of our established liability, our effective tax rate in a given financial statement period could be materially affected. An unfavorable tax settlement generally would require use of our cash and may result in an increase in our effective tax rate in the period of resolution. A favorable tax settlement may be recognized as a reduction in our effective tax rate in the period of resolution.
If results differ from our assumptions, a valuation allowance against deferred tax assets may be increased or decreased which would impact our effective tax rate.
|
Sensitivity Analysis
|
||||||||||
|
|
|
|
Change in Fair Value
|
||||||
Hypothetical Change in Interest Rates
|
|
Annual Impact to Interest Expense
|
|
Other Current and Non-current Assets
|
|
Other Non-current Liabilities
|
|
Total Debt
|
||
1-percent decrease
(1)
|
|
$
|
—
|
|
|
$24 million increase
|
|
$29 million decrease
|
|
$53 million increase
|
1-percent increase
|
|
$7 million increase
|
|
|
$17 million decrease
|
|
$45 million increase
|
|
$62 million decrease
|
(1)
|
We pay an average floating rate, which fluctuates periodically, based on LIBOR and a credit spread, as a result of designated fair value hedges on certain debt instruments. See
Note 9 of the Notes to our Audited Consolidated Financial Statements
for further information. Our weighted average LIBOR rate as of
December 31, 2013
was
0.26%
. As LIBOR has not historically fallen below 0.17%, our estimate of the annual impact to interest expense reflects this assumption if our hypothetical change in the interest rate fell below the historical threshold.
|
Audited Financial Statements:
|
|
Consolidated Statements of Comprehensive Income for the years ended
December 31, 2013, 2012 and 2011
|
|
Consolidated Statements of Cash Flows for the years ended
December 31, 2013, 2012 and 2011
|
|
Consolidated Statements of Changes in Stockholders' Equity for the years ended
December 31, 2013, 2012 and 2011
|
|
|
For the
|
||||||||||
|
Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net sales
|
$
|
5,997
|
|
|
$
|
5,995
|
|
|
$
|
5,903
|
|
Cost of sales
|
2,499
|
|
|
2,500
|
|
|
2,485
|
|
|||
Gross profit
|
3,498
|
|
|
3,495
|
|
|
3,418
|
|
|||
Selling, general and administrative expenses
|
2,272
|
|
|
2,268
|
|
|
2,257
|
|
|||
Multi-employer pension plan withdrawal
|
56
|
|
|
—
|
|
|
—
|
|
|||
Depreciation and amortization
|
115
|
|
|
124
|
|
|
126
|
|
|||
Other operating expense, net
|
9
|
|
|
11
|
|
|
11
|
|
|||
Income from operations
|
1,046
|
|
|
1,092
|
|
|
1,024
|
|
|||
Interest expense
|
123
|
|
|
125
|
|
|
114
|
|
|||
Interest income
|
(2
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|||
Other expense (income), net
|
383
|
|
|
(9
|
)
|
|
(12
|
)
|
|||
Income before (benefit) provision for income taxes and equity in earnings of unconsolidated subsidiaries
|
542
|
|
|
978
|
|
|
925
|
|
|||
(Benefit) provision for income taxes
|
(81
|
)
|
|
349
|
|
|
320
|
|
|||
Income before equity in earnings of unconsolidated subsidiaries
|
623
|
|
|
629
|
|
|
605
|
|
|||
Equity in earnings of unconsolidated subsidiaries, net of tax
|
1
|
|
|
—
|
|
|
1
|
|
|||
Net income
|
$
|
624
|
|
|
$
|
629
|
|
|
$
|
606
|
|
Earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
3.08
|
|
|
$
|
2.99
|
|
|
$
|
2.77
|
|
Diluted
|
3.05
|
|
|
2.96
|
|
|
2.74
|
|
|||
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
202.9
|
|
|
210.6
|
|
|
218.7
|
|
|||
Diluted
|
204.5
|
|
|
212.3
|
|
|
221.2
|
|
|
For the
|
||||||||||
|
Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net income
|
$
|
624
|
|
|
$
|
629
|
|
|
$
|
606
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(9
|
)
|
|
19
|
|
|
(34
|
)
|
|||
Net change in pension liability, net of tax of $12, ($4) and ($9)
|
23
|
|
|
(8
|
)
|
|
(17
|
)
|
|||
Net change in cash flow hedges, net of tax of $4, ($6) and ($20)
|
8
|
|
|
(11
|
)
|
|
(31
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
22
|
|
|
—
|
|
|
(82
|
)
|
|||
Comprehensive income
|
$
|
646
|
|
|
$
|
629
|
|
|
$
|
524
|
|
|
December 31,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Assets
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
153
|
|
|
$
|
366
|
|
Accounts receivable:
|
|
|
|
||||
Trade, net
|
564
|
|
|
552
|
|
||
Other
|
58
|
|
|
50
|
|
||
Inventories
|
200
|
|
|
197
|
|
||
Deferred tax assets
|
66
|
|
|
66
|
|
||
Prepaid expenses and other current assets
|
78
|
|
|
104
|
|
||
Total current assets
|
1,119
|
|
|
1,335
|
|
||
Property, plant and equipment, net
|
1,173
|
|
|
1,202
|
|
||
Investments in unconsolidated subsidiaries
|
15
|
|
|
14
|
|
||
Goodwill
|
2,988
|
|
|
2,983
|
|
||
Other intangible assets, net
|
2,694
|
|
|
2,684
|
|
||
Other non-current assets
|
127
|
|
|
580
|
|
||
Non-current deferred tax assets
|
85
|
|
|
130
|
|
||
Total assets
|
$
|
8,201
|
|
|
$
|
8,928
|
|
Liabilities and Stockholders' Equity
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
271
|
|
|
$
|
283
|
|
Deferred revenue
|
65
|
|
|
65
|
|
||
Short-term borrowings and current portion of long-term obligations
|
66
|
|
|
250
|
|
||
Income taxes payable
|
33
|
|
|
45
|
|
||
Other current liabilities
|
595
|
|
|
589
|
|
||
Total current liabilities
|
1,030
|
|
|
1,232
|
|
||
Long-term obligations
|
2,508
|
|
|
2,554
|
|
||
Non-current deferred tax liabilities
|
755
|
|
|
630
|
|
||
Non-current deferred revenue
|
1,318
|
|
|
1,386
|
|
||
Other non-current liabilities
|
313
|
|
|
846
|
|
||
Total liabilities
|
5,924
|
|
|
6,648
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $.01 par value, 15,000,000 shares authorized, no shares issued
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value, 800,000,000 shares authorized, 197,979,971 and 205,292,657 shares issued and outstanding for 2013 and 2012, respectively
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
970
|
|
|
1,308
|
|
||
Retained earnings
|
1,393
|
|
|
1,080
|
|
||
Accumulated other comprehensive loss
|
(88
|
)
|
|
(110
|
)
|
||
Total stockholders' equity
|
2,277
|
|
|
2,280
|
|
||
Total liabilities and stockholders' equity
|
$
|
8,201
|
|
|
$
|
8,928
|
|
|
For the
|
||||||||||
|
Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
624
|
|
|
$
|
629
|
|
|
$
|
606
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation expense
|
196
|
|
|
203
|
|
|
198
|
|
|||
Amortization expense
|
38
|
|
|
37
|
|
|
34
|
|
|||
Amortization of deferred revenue
|
(65
|
)
|
|
(65
|
)
|
|
(65
|
)
|
|||
Employee stock-based compensation expense
|
37
|
|
|
35
|
|
|
34
|
|
|||
Deferred income taxes
|
138
|
|
|
91
|
|
|
(498
|
)
|
|||
Other, net
|
35
|
|
|
(18
|
)
|
|
24
|
|
|||
Changes in assets and liabilities, net of effects of acquisition:
|
|
|
|
|
|
||||||
Trade accounts receivable
|
(13
|
)
|
|
36
|
|
|
(55
|
)
|
|||
Other accounts receivable
|
(9
|
)
|
|
1
|
|
|
(18
|
)
|
|||
Inventories
|
(3
|
)
|
|
17
|
|
|
29
|
|
|||
Other current and non-current assets
|
456
|
|
|
(21
|
)
|
|
(21
|
)
|
|||
Other current and non-current liabilities
|
(556
|
)
|
|
(7
|
)
|
|
3
|
|
|||
Trade accounts payable
|
(6
|
)
|
|
12
|
|
|
(9
|
)
|
|||
Income taxes payable
|
(6
|
)
|
|
(468
|
)
|
|
521
|
|
|||
Net cash provided by operating activities
|
866
|
|
|
482
|
|
|
783
|
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Acquisition of business
|
(10
|
)
|
|
—
|
|
|
—
|
|
|||
Purchase of property, plant and equipment
|
(179
|
)
|
|
(217
|
)
|
|
(238
|
)
|
|||
Purchase of intangible assets
|
(5
|
)
|
|
(7
|
)
|
|
(3
|
)
|
|||
Investments in unconsolidated subsidiaries
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||
Proceeds from disposals of property, plant and equipment
|
1
|
|
|
7
|
|
|
3
|
|
|||
Other, net
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(195
|
)
|
|
(217
|
)
|
|
(240
|
)
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Proceeds from senior unsecured notes
|
—
|
|
|
500
|
|
|
1,000
|
|
|||
Repayment of senior unsecured notes
|
(250
|
)
|
|
(450
|
)
|
|
(400
|
)
|
|||
Net issuance of commercial paper
|
65
|
|
|
—
|
|
|
—
|
|
|||
Repurchase of shares of common stock
|
(400
|
)
|
|
(400
|
)
|
|
(522
|
)
|
|||
Dividends paid
|
(302
|
)
|
|
(284
|
)
|
|
(251
|
)
|
|||
Tax withholdings related to net share settlements of certain stock awards
|
(13
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from stock options exercised
|
15
|
|
|
22
|
|
|
20
|
|
|||
Excess tax benefit on stock-based compensation
|
6
|
|
|
16
|
|
|
10
|
|
|||
Deferred financing charges paid
|
—
|
|
|
(4
|
)
|
|
(6
|
)
|
|||
Other, net
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|||
Net cash used in financing activities
|
(880
|
)
|
|
(603
|
)
|
|
(152
|
)
|
|||
Cash and cash equivalents — net change from:
|
|
|
|
|
|
||||||
Operating, investing and financing activities
|
(209
|
)
|
|
(338
|
)
|
|
391
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(4
|
)
|
|
3
|
|
|
(5
|
)
|
|||
Cash and cash equivalents at beginning of year
|
366
|
|
|
701
|
|
|
315
|
|
|||
Cash and cash equivalents at end of year
|
$
|
153
|
|
|
$
|
366
|
|
|
$
|
701
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|||||||||||
|
Common Stock
|
|
Additional
|
|
|
|
Other
|
|
|
|||||||||||||
|
Issued
|
|
Paid-In
|
|
Retained
|
|
Comprehensive
|
|
Total
|
|||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Loss
|
|
Equity
|
|||||||||||
Balance as of January 1, 2011
|
223.9
|
|
|
$
|
2
|
|
|
$
|
2,085
|
|
|
$
|
400
|
|
|
$
|
(28
|
)
|
|
$
|
2,459
|
|
Shares issued under employee stock-based compensation plans and other
|
1.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
606
|
|
|
—
|
|
|
606
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(82
|
)
|
|
(82
|
)
|
|||||
Dividends declared, $1.21 per share
|
—
|
|
|
—
|
|
|
4
|
|
|
(266
|
)
|
|
—
|
|
|
(262
|
)
|
|||||
Stock options exercised and stock-based compensation, net of tax of ($10)
|
—
|
|
|
—
|
|
|
64
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|||||
Common stock repurchases
|
(13.7
|
)
|
|
—
|
|
|
(522
|
)
|
|
—
|
|
|
—
|
|
|
(522
|
)
|
|||||
Balance as of December 31, 2011
|
212.1
|
|
|
2
|
|
|
1,631
|
|
|
740
|
|
|
(110
|
)
|
|
2,263
|
|
|||||
Shares issued under employee stock-based compensation plans and other
|
2.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
629
|
|
|
—
|
|
|
629
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends declared, $1.36 per share
|
—
|
|
|
—
|
|
|
4
|
|
|
(289
|
)
|
|
—
|
|
|
(285
|
)
|
|||||
Stock options exercised and stock-based compensation, net of tax of ($16)
|
—
|
|
|
—
|
|
|
73
|
|
|
—
|
|
|
—
|
|
|
73
|
|
|||||
Common stock repurchases
|
(9.5
|
)
|
|
—
|
|
|
(400
|
)
|
|
—
|
|
|
—
|
|
|
(400
|
)
|
|||||
Balance as of December 31, 2012
|
205.3
|
|
|
2
|
|
|
1,308
|
|
|
1,080
|
|
|
(110
|
)
|
|
2,280
|
|
|||||
Shares issued under employee stock-based compensation plans and other
|
1.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Shares issued for acquisition
|
0.3
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
624
|
|
|
—
|
|
|
624
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|
22
|
|
|||||
Dividends declared, $1.52 per share
|
—
|
|
|
—
|
|
|
4
|
|
|
(311
|
)
|
|
—
|
|
|
(307
|
)
|
|||||
Stock options exercised and stock-based compensation, net of tax of ($6)
|
—
|
|
|
—
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
45
|
|
|||||
Common stock repurchases
|
(8.7
|
)
|
|
—
|
|
|
(400
|
)
|
|
—
|
|
|
—
|
|
|
(400
|
)
|
|||||
Balance as of December 31, 2013
|
198.0
|
|
|
$
|
2
|
|
|
$
|
970
|
|
|
$
|
1,393
|
|
|
$
|
(88
|
)
|
|
$
|
2,277
|
|
1
.
|
Business and Basis of Presentation
|
2
.
|
Significant Accounting Policies
|
|
2013
|
|
2012
|
|
2011
|
||||||
Balance, beginning of the year
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
5
|
|
Net charge to costs and expenses
|
1
|
|
|
2
|
|
|
4
|
|
|||
Write-offs and adjustments
|
(1
|
)
|
|
(2
|
)
|
|
(6
|
)
|
|||
Balance, end of the year
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Type of Asset
|
Useful Life
|
||
Buildings
|
|
|
40 years
|
Building improvements
|
3
|
to
|
35 years
|
Machinery and equipment
|
3
|
to
|
23 years
|
Vehicles
|
5
|
to
|
12 years
|
Cold drink equipment
|
3
|
to
|
7 years
|
Computer software
|
3
|
to
|
5 years
|
Type of Intangible Asset
|
Useful Life
|
||
Brands
|
|
|
10 years
|
Customer relationships
|
|
|
10 years
|
Distribution rights
|
5
|
to
|
15 years
|
Canadian Dollar to U.S. Dollar Exchange Rate
|
End of Year Rates
|
|
Annual Average Rates
|
||
2013
|
1.06
|
|
|
1.03
|
|
2012
|
0.99
|
|
|
1.00
|
|
2011
|
1.02
|
|
|
0.99
|
|
3
.
|
Acquisition
|
|
|
Fair Value
|
|
Useful Life
|
||
Property, plant & equipment
|
|
$
|
7
|
|
|
3 - 40 years
|
Distribution rights: definite-lived
|
|
2
|
|
|
5 - 15 years
|
|
Distribution rights: indefinite-lived
|
|
10
|
|
|
—
|
|
Goodwill
|
|
5
|
|
|
—
|
|
Current liabilities, net of current assets assumed
|
|
(1
|
)
|
|
—
|
|
Total
|
|
$
|
23
|
|
|
|
4
.
|
Inventories
|
|
December 31,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Raw materials
|
$
|
86
|
|
|
$
|
114
|
|
Spare parts
|
22
|
|
|
20
|
|
||
Work in process
|
4
|
|
|
5
|
|
||
Finished goods
|
122
|
|
|
131
|
|
||
Inventories at first in first out cost
|
234
|
|
|
270
|
|
||
Reduction to last in first out cost
|
(34
|
)
|
|
(73
|
)
|
||
Inventories
|
$
|
200
|
|
|
$
|
197
|
|
5
.
|
Property, Plant and Equipment
|
|
December 31,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Land
|
$
|
73
|
|
|
$
|
72
|
|
Buildings and improvements
|
483
|
|
|
465
|
|
||
Machinery and equipment
|
1,302
|
|
|
1,275
|
|
||
Cold drink equipment
|
310
|
|
|
308
|
|
||
Software
|
221
|
|
|
195
|
|
||
Construction in progress
|
63
|
|
|
50
|
|
||
Gross property, plant and equipment
|
2,452
|
|
|
2,365
|
|
||
Less: accumulated depreciation and amortization
|
(1,279
|
)
|
|
(1,163
|
)
|
||
Net property, plant and equipment
|
$
|
1,173
|
|
|
$
|
1,202
|
|
6
.
|
Investment in Unconsolidated Subsidiaries
|
7
.
|
Goodwill and Other Intangible Assets
|
|
Beverage Concentrates
|
|
WD Reporting Unit
(1)
|
|
DSD Reporting Unit
(1)
|
|
Latin America Beverages
|
|
Total
|
||||||||||
Balance as of January 1, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
$
|
1,732
|
|
|
$
|
1,220
|
|
|
$
|
180
|
|
|
$
|
28
|
|
|
$
|
3,160
|
|
Accumulated impairment losses
|
—
|
|
|
—
|
|
|
(180
|
)
|
|
—
|
|
|
(180
|
)
|
|||||
|
1,732
|
|
|
1,220
|
|
|
—
|
|
|
28
|
|
|
2,980
|
|
|||||
Foreign currency impact
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|||||
Balance as of December 31, 2012
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
1,732
|
|
|
1,220
|
|
|
180
|
|
|
31
|
|
|
3,163
|
|
|||||
Accumulated impairment losses
|
—
|
|
|
—
|
|
|
(180
|
)
|
|
—
|
|
|
(180
|
)
|
|||||
|
1,732
|
|
|
1,220
|
|
|
—
|
|
|
31
|
|
|
2,983
|
|
|||||
Foreign currency impact
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Acquisition activity
(2)
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Balance as of December 31, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
1,732
|
|
|
1,220
|
|
|
185
|
|
|
31
|
|
|
3,168
|
|
|||||
Accumulated impairment losses
|
—
|
|
|
—
|
|
|
(180
|
)
|
|
—
|
|
|
(180
|
)
|
|||||
|
$
|
1,732
|
|
|
$
|
1,220
|
|
|
$
|
5
|
|
|
$
|
31
|
|
|
$
|
2,988
|
|
(1)
|
The Packaged Beverages segment is comprised of two reporting units, the Direct Store Delivery ("DSD") system and the Warehouse Direct ("WD") system.
|
(2)
|
The acquisition activity represents the goodwill associated with the purchase of DP/7UP West. See Note
3
for further information related to the acquisition.
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
|
|
Net
|
|
Gross
|
|
Accumulated
|
|
Net
|
||||||||||||
|
Amount
|
|
Amortization
|
|
Amount
|
|
Amount
|
|
Amortization
|
|
Amount
|
||||||||||||
Intangible assets with indefinite lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Brands
|
$
|
2,652
|
|
|
$
|
—
|
|
|
$
|
2,652
|
|
|
$
|
2,652
|
|
|
$
|
—
|
|
|
$
|
2,652
|
|
Distribution rights
(1)
|
24
|
|
|
—
|
|
|
24
|
|
|
14
|
|
|
—
|
|
|
14
|
|
||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Brands
|
29
|
|
|
(27
|
)
|
|
2
|
|
|
29
|
|
|
(25
|
)
|
|
4
|
|
||||||
Distribution rights
(1)(2)
|
12
|
|
|
(3
|
)
|
|
9
|
|
|
5
|
|
|
(1
|
)
|
|
4
|
|
||||||
Customer relationships
|
76
|
|
|
(69
|
)
|
|
7
|
|
|
76
|
|
|
(67
|
)
|
|
9
|
|
||||||
Bottler agreements
|
19
|
|
|
(19
|
)
|
|
—
|
|
|
19
|
|
|
(18
|
)
|
|
1
|
|
||||||
Total
|
$
|
2,812
|
|
|
$
|
(118
|
)
|
|
$
|
2,694
|
|
|
$
|
2,795
|
|
|
$
|
(111
|
)
|
|
$
|
2,684
|
|
(1)
|
In
2013
, distribution rights included
$10 million
and
$2 million
in indefinite-lived and finite-lived distribution rights, respectively, associated with the purchase of DP/7UP West. See Note
3
for further information related to the acquisition.
|
(2)
|
In
2013
, distribution rights also included the reacquired distribution rights for Snapple and several other NCB brands in parts of the Asia-Pacific region from Mondelēz.
|
Year
|
Aggregate Amortization Expense
|
||
2014
|
$
|
6
|
|
2015
|
6
|
|
|
2016
|
3
|
|
|
2017
|
1
|
|
|
2018
|
1
|
|
Headroom Percentage
|
|
Fair Value
|
|
Carrying Value
|
||||
0 - 10%
|
|
$
|
—
|
|
|
$
|
—
|
|
11 - 20%
|
|
—
|
|
|
—
|
|
||
21 - 50%
|
|
918
|
|
|
655
|
|
||
> 50%
|
|
11,034
|
|
|
1,997
|
|
||
|
|
11,952
|
|
|
2,652
|
|
Headroom Percentage
|
|
Fair Value
|
|
Carrying Value
|
||||
0 - 10%
|
|
$
|
—
|
|
|
$
|
—
|
|
11 - 20%
|
|
—
|
|
|
—
|
|
||
21 - 50%
|
|
9
|
|
|
8
|
|
||
> 50%
|
|
10,558
|
|
|
2,644
|
|
||
|
|
$
|
10,567
|
|
|
$
|
2,652
|
|
8
.
|
Other Current Liabilities
|
|
December 31,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Customer rebates and incentives
|
$
|
214
|
|
|
$
|
226
|
|
Accrued compensation
|
107
|
|
|
105
|
|
||
Insurance liability
|
47
|
|
|
43
|
|
||
Interest accrual and interest rate swap liability
|
26
|
|
|
27
|
|
||
Dividends payable
|
75
|
|
|
70
|
|
||
Other
|
126
|
|
|
118
|
|
||
Total other current liabilities
|
$
|
595
|
|
|
$
|
589
|
|
9
.
|
Long-term Obligations and Borrowing Arrangements
|
|
December 31,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Senior unsecured notes
(1)
|
$
|
2,453
|
|
|
$
|
2,748
|
|
Revolving credit facility
|
—
|
|
|
—
|
|
||
Capital lease obligations
|
56
|
|
|
56
|
|
||
Subtotal
|
2,509
|
|
|
2,804
|
|
||
Less — current portion
|
(1
|
)
|
|
(250
|
)
|
||
Long-term obligations
|
$
|
2,508
|
|
|
$
|
2,554
|
|
(1)
|
The carrying amount includes the unamortized net discount on debt issuances and adjustments of
$18 million
and
$29 million
as of
December 31, 2013 and 2012
, respectively,
related to the change in the fair value of interest rate swaps designated as fair value hedges.
See Note
10
for further information regarding derivatives.
|
|
December 31,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Commercial paper
|
$
|
65
|
|
|
$
|
—
|
|
Current portion of long-term obligations
(1)
|
$
|
1
|
|
|
$
|
250
|
|
Short-term borrowings and current portion of long-term obligations
|
$
|
66
|
|
|
$
|
250
|
|
(1)
|
Capital lease obligations, primarily related to manufacturing facilities, totaled
$56 million
and
$57 million
as of
December 31, 2013 and 2012
, respectively. Current obligations related to these capital leases were
$1 million
as of
December 31, 2013 and 2012
. The current obligation as of
December 31, 2012
was included as a component of other current liabilities.
|
|
|
|
|
|
|
Principal Amount
|
|
Carrying Amount
|
||||||||
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||
Issuance
|
|
Maturity Date
|
|
Rate
|
|
2013
|
|
2013
|
|
2012
|
||||||
2013 Notes
(1)
|
|
May 1, 2013
|
|
6.12%
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
250
|
|
2016 Notes
|
|
January 15, 2016
|
|
2.90%
|
|
500
|
|
|
500
|
|
|
500
|
|
|||
2018 Notes
|
|
May 1, 2018
|
|
6.82%
|
|
724
|
|
|
724
|
|
|
724
|
|
|||
2019 Notes
|
|
January 15, 2019
|
|
2.60%
|
|
250
|
|
|
248
|
|
|
253
|
|
|||
2020 Notes
|
|
January 15, 2020
|
|
2.00%
|
|
250
|
|
|
241
|
|
|
247
|
|
|||
2021 Notes
|
|
November 15, 2021
|
|
3.20%
|
|
250
|
|
|
241
|
|
|
254
|
|
|||
2022 Notes
|
|
November 15, 2022
|
|
2.70%
|
|
250
|
|
|
247
|
|
|
249
|
|
|||
2038 Notes
|
|
May 1, 2038
|
|
7.45%
|
|
250
|
|
|
252
|
|
|
271
|
|
|||
|
|
|
|
|
|
$
|
2,474
|
|
|
$
|
2,453
|
|
|
$
|
2,748
|
|
(1)
|
The repayment of the 2013 Notes occurred on May 1, 2013 at maturity.
|
|
Amount Utilized
|
|
Balances Available
|
||||
Revolver
|
$
|
—
|
|
|
$
|
433
|
|
Letters of credit
|
2
|
|
|
73
|
|
||
Swingline advances
|
—
|
|
|
50
|
|
|
Balance Sheet Location
|
|
December 31,
2013 |
|
December 31,
2012 |
||||
Assets:
|
|
|
|
|
|
||||
Derivative instruments designated as hedging instruments under U.S. GAAP:
|
|
|
|
|
|
||||
Interest rate contracts
(1)
|
Prepaid expenses and other current assets
|
|
$
|
17
|
|
|
$
|
11
|
|
Foreign exchange forward contracts
|
Prepaid expenses and other current assets
|
|
3
|
|
|
—
|
|
||
Interest rate contracts
|
Other non-current assets
|
|
—
|
|
|
24
|
|
||
Derivative instruments not designated as hedging instruments under U.S. GAAP:
|
|
|
|
|
|
||||
Commodity contracts
|
Prepaid expenses and other current assets
|
|
1
|
|
|
3
|
|
||
Commodity contracts
|
Other non-current assets
|
|
—
|
|
|
2
|
|
||
Total assets
|
|
|
$
|
21
|
|
|
$
|
40
|
|
Liabilities:
|
|
|
|
|
|
||||
Derivative instruments designated as hedging instruments under U.S. GAAP:
|
|
|
|
|
|
||||
Interest rate contracts
|
Other current liabilities
|
|
$
|
—
|
|
|
$
|
1
|
|
Foreign exchange forward contracts
|
Other current liabilities
|
|
—
|
|
|
2
|
|
||
Interest rate contracts
|
Other non-current liabilities
|
|
34
|
|
|
2
|
|
||
Derivative instruments not designated as hedging instruments under U.S. GAAP:
|
|
|
|
|
|
||||
Commodity contracts
|
Other current liabilities
|
|
13
|
|
|
1
|
|
||
Total liabilities
|
|
|
$
|
47
|
|
|
$
|
6
|
|
(1)
|
Interest rate contracts as of
December 31, 2013
include gross and offsetting amounts of
$19 million
and
$2 million
, respectively. Interest rate contracts as of
December 31,
2012
include gross and offsetting amounts of
$12 million
and
$1 million
, respectively. These contracts are subject to a netting provision included within the counterparty agreements whereby the Company pays interest either quarterly or semi-annually and receives interest payments semi-annually. These payables and receivables are netted as appropriate.
|
|
Amount of Gain (Loss) Recognized in Comprehensive Income
|
|
Amount of Loss Reclassified from AOCL into Income
|
|
Location of Loss Reclassified from AOCL into Income
|
||||
For the year ended December 31, 2013:
|
|
|
|
|
|
||||
Interest rate contracts
(1) (2)
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
Interest expense
|
Foreign exchange forward contracts
|
4
|
|
|
(1
|
)
|
|
Cost of sales
|
||
Total
|
$
|
4
|
|
|
$
|
(8
|
)
|
|
|
|
|
|
|
|
|
||||
For the year ended December 31, 2012:
|
|
|
|
|
|
||||
Interest rate contracts
(1)
|
$
|
(19
|
)
|
|
$
|
(3
|
)
|
|
Interest expense
|
Foreign exchange forward contracts
|
(3
|
)
|
|
(2
|
)
|
|
Cost of sales
|
||
Total
|
$
|
(22
|
)
|
|
$
|
(5
|
)
|
|
|
|
|
|
|
|
|
||||
For the year ended December 31, 2011:
|
|
|
|
|
|
||||
Interest rate contracts
|
$
|
(55
|
)
|
|
$
|
—
|
|
|
Interest expense
|
Foreign exchange forward contracts
|
2
|
|
|
(2
|
)
|
|
Cost of sales
|
||
Total
|
$
|
(53
|
)
|
|
$
|
(2
|
)
|
|
|
|
|
Amount of Gain
|
|
Location of Gain
|
||
|
|
Recognized in Income
|
|
Recognized in Income
|
||
For the year ended December 31, 2013:
|
|
|
|
|
||
Interest rate contracts
|
|
$
|
9
|
|
|
Interest expense
|
Total
|
|
$
|
9
|
|
|
|
|
|
|
|
|
||
For the year ended December 31, 2012:
|
|
|
|
|
||
Interest rate contracts
(1)
|
|
$
|
10
|
|
|
Interest expense
|
Total
|
|
$
|
10
|
|
|
|
|
|
|
|
|
||
For the year ended December 31, 2011:
|
|
|
|
|
||
Interest rate contracts
(1)
|
|
$
|
11
|
|
|
Interest expense
|
Total
|
|
$
|
11
|
|
|
|
(1)
|
The gain recognized in interest expense included amortization of the adjustment to the carrying value of the 2012 Notes as a result of the de-designation of a
$450 million
notional interest rate swap related to those Notes in 2010. For the years ended
December 31, 2012
and 2011, the amortization of this adjustment was
$2 million
and
$3 million
, respectively.
|
|
|
Amount of Gain (Loss)
|
|
Location of Gain (Loss)
|
||
|
|
Recognized in Income
|
|
Recognized in Income
|
||
For the year ended December 31, 2013:
|
|
|
|
|
||
Commodity contracts
(1)
|
|
$
|
(24
|
)
|
|
Cost of sales
|
Commodity contracts
(1)
|
|
1
|
|
|
SG&A expenses
|
|
Total
|
|
$
|
(23
|
)
|
|
|
|
|
|
|
|
||
For the year ended December 31, 2012:
|
|
|
|
|
||
Commodity contracts
(1)
|
|
$
|
3
|
|
|
SG&A expenses
|
Total
|
|
$
|
3
|
|
|
|
|
|
|
|
|
||
For the year ended December 31, 2011:
|
|
|
|
|
||
Commodity contracts
(1)
|
|
$
|
(15
|
)
|
|
Cost of sales
|
Commodity contracts
(1)
|
|
2
|
|
|
SG&A expenses
|
|
Total
|
|
$
|
(13
|
)
|
|
|
(1)
|
Commodity contracts include both realized and unrealized gains and losses.
|
|
December 31,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Other non-current assets:
|
|
|
|
||||
Long-term receivables from Mondelēz
(1)
|
$
|
—
|
|
|
$
|
439
|
|
Deferred financing costs, net
|
11
|
|
|
13
|
|
||
Customer incentive programs
|
59
|
|
|
63
|
|
||
Marketable securities - trading
|
21
|
|
|
—
|
|
||
Derivative instruments
|
—
|
|
|
26
|
|
||
Other
|
36
|
|
|
39
|
|
||
Total other non-current assets
|
$
|
127
|
|
|
$
|
580
|
|
Other non-current liabilities:
|
|
|
|
||||
Long-term payables due to Mondelēz
(1)
|
$
|
47
|
|
|
$
|
98
|
|
Liabilities for unrecognized tax benefits and other tax related items
(2)
|
14
|
|
|
574
|
|
||
Long-term pension and post-retirement liability
|
26
|
|
|
55
|
|
||
Multi-employer pension plan withdrawal liability
(3)
|
56
|
|
|
—
|
|
||
Insurance liability
|
89
|
|
|
77
|
|
||
Derivative instruments
|
34
|
|
|
2
|
|
||
Deferred compensation liability
|
21
|
|
|
—
|
|
||
Other
|
26
|
|
|
40
|
|
||
Total other non-current liabilities
|
$
|
313
|
|
|
$
|
846
|
|
(1)
|
Refer to Notes 12 and 13 for additional information on the change in long-term receivables from Mondelēz and long-term payables due to Mondelēz.
|
(2)
|
Refer to Note 12 for additional information on the change in liabilities for unrecognized tax benefits and other tax related items.
|
(3)
|
Refer to Note 14 for additional information on the withdrawal liability recorded related to the Soft Drink Industry Local Union 710 Pension Fund.
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
(211
|
)
|
|
$
|
215
|
|
|
$
|
686
|
|
State
|
(58
|
)
|
|
32
|
|
|
114
|
|
|||
Non-U.S.
|
50
|
|
|
11
|
|
|
18
|
|
|||
Total current provision
|
(219
|
)
|
|
258
|
|
|
818
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
95
|
|
|
72
|
|
|
(425
|
)
|
|||
State
|
10
|
|
|
10
|
|
|
(83
|
)
|
|||
Non-U.S.
|
33
|
|
|
9
|
|
|
10
|
|
|||
Total deferred provision
|
138
|
|
|
91
|
|
|
(498
|
)
|
|||
Total (benefit) provision for income taxes
|
$
|
(81
|
)
|
|
$
|
349
|
|
|
$
|
320
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Statutory federal income tax of 35%
|
$
|
190
|
|
|
$
|
342
|
|
|
$
|
324
|
|
Completion of 2006-2008 IRS audit
|
(463
|
)
|
|
—
|
|
|
—
|
|
|||
Canada amortization law change
|
50
|
|
|
—
|
|
|
—
|
|
|||
Impact of non-taxable indemnity income/non-tax deductible indemnity expense
(1)
|
137
|
|
|
—
|
|
|
—
|
|
|||
State income taxes, net
|
34
|
|
|
35
|
|
|
25
|
|
|||
U.S. federal domestic manufacturing benefit
|
(23
|
)
|
|
(21
|
)
|
|
(30
|
)
|
|||
Impact of non-U.S. operations
|
(7
|
)
|
|
(9
|
)
|
|
(5
|
)
|
|||
Indemnified taxes
(2)
|
5
|
|
|
8
|
|
|
11
|
|
|||
Other
|
(4
|
)
|
|
(6
|
)
|
|
(5
|
)
|
|||
Total (benefit) provision for income taxes
|
$
|
(81
|
)
|
|
$
|
349
|
|
|
$
|
320
|
|
Effective tax rate
|
(14.9
|
)%
|
|
35.7
|
%
|
|
34.6
|
%
|
(1)
|
Due to the resolution of the 2006-2008 IRS audit and the Canada amortization law change in 2013, the Company recognized indemnity expense, net of
$392 million
as a result of the Tax Sharing and Indemnification Agreement ("Tax Indemnity Agreement"). Since the indemnity expense is not deductible for income tax purposes, the benefit for income taxes also included a permanent difference of
$137 million
.
|
(2)
|
Amounts represent tax expense recorded by the Company for which Mondelēz was obligated to indemnify DPS under the Tax Indemnity Agreement but excludes the amounts with respect to the completion of the 2006-2008 IRS audit and the Canada amortization law change as they are separately shown on the rate reconciliation.
|
|
December 31,
|
|
December 31,
|
||||
|
2013
|
|
2012
|
||||
Deferred income tax assets:
|
|
|
|
|
|
||
Deferred revenue
|
$
|
530
|
|
|
$
|
557
|
|
Accrued liabilities
|
70
|
|
|
115
|
|
||
Pension and postretirement benefits
|
29
|
|
|
18
|
|
||
Net operating loss and credit carryforwards
|
24
|
|
|
22
|
|
||
Compensation
|
22
|
|
|
25
|
|
||
Inventory
|
10
|
|
|
12
|
|
||
Other
|
35
|
|
|
57
|
|
||
|
720
|
|
|
806
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Intangible assets and goodwill
|
(1,075
|
)
|
|
(986
|
)
|
||
Fixed assets
|
(204
|
)
|
|
(214
|
)
|
||
Other
|
(12
|
)
|
|
(8
|
)
|
||
|
(1,291
|
)
|
|
(1,208
|
)
|
||
Valuation allowance
|
(33
|
)
|
|
(32
|
)
|
||
Net deferred income tax liability
|
$
|
(604
|
)
|
|
$
|
(434
|
)
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Beginning balance
|
$
|
469
|
|
|
$
|
480
|
|
|
$
|
490
|
|
Increases related to tax positions taken during the current year
|
1
|
|
|
—
|
|
|
—
|
|
|||
Increases related to tax positions taken during the prior year
|
6
|
|
|
3
|
|
|
1
|
|
|||
Decreases related to tax positions taken during the prior year
|
(432
|
)
|
|
(4
|
)
|
|
(7
|
)
|
|||
Decreases related to settlements with taxing authorities
|
(27
|
)
|
|
(4
|
)
|
|
—
|
|
|||
Decreases related to lapse of applicable statute of limitations
|
(3
|
)
|
|
(6
|
)
|
|
(4
|
)
|
|||
Ending balance
|
$
|
14
|
|
|
$
|
469
|
|
|
$
|
480
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Indemnity expense (income) from Mondelēz
|
$
|
387
|
|
|
$
|
(9
|
)
|
|
$
|
(11
|
)
|
Other
|
(4
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Other expense (income), net
|
$
|
383
|
|
|
$
|
(9
|
)
|
|
$
|
(12
|
)
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Total net periodic benefit costs
|
|
|
|
|
|
|
|
|
|||
Pension plans
|
$
|
9
|
|
|
$
|
5
|
|
|
$
|
7
|
|
Postretirement medical plans
|
(1
|
)
|
|
(3
|
)
|
|
(1
|
)
|
|||
Total
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
6
|
|
|
|
|
Postretirement
|
||||||||||||
|
Pension Plans
|
|
Medical Plans
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Projected Benefit Obligations
|
|
|
|
|
|
|
|
|
|
|
|
||||
As of beginning of year
|
$
|
308
|
|
|
$
|
278
|
|
|
$
|
9
|
|
|
$
|
10
|
|
Service cost
|
3
|
|
|
2
|
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
13
|
|
|
14
|
|
|
—
|
|
|
—
|
|
||||
Actuarial (gains) losses, net
|
(35
|
)
|
|
31
|
|
|
(1
|
)
|
|
1
|
|
||||
Benefits paid
|
(10
|
)
|
|
(17
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Currency exchange adjustments
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Curtailments
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Settlements
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
As of end of year
|
$
|
259
|
|
|
$
|
308
|
|
|
$
|
7
|
|
|
$
|
9
|
|
Fair Value of Plan Assets
|
|
|
|
|
|
|
|
||||||||
As of beginning of year
|
$
|
257
|
|
|
$
|
239
|
|
|
$
|
5
|
|
|
$
|
5
|
|
Actual return on plan assets
|
7
|
|
|
32
|
|
|
—
|
|
|
—
|
|
||||
Employer contributions
|
2
|
|
|
2
|
|
|
1
|
|
|
1
|
|
||||
Benefits paid
|
(10
|
)
|
|
(17
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
Currency exchange adjustments
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
Settlements
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
As of end of year
|
$
|
237
|
|
|
$
|
257
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
||||||||
Funded status of plan / net amount recognized
|
$
|
(22
|
)
|
|
$
|
(51
|
)
|
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
Funded status — overfunded
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1
|
|
Funded status — underfunded
|
(23
|
)
|
|
(51
|
)
|
|
(4
|
)
|
|
(5
|
)
|
||||
Net amount recognized consists of:
|
|
|
|
|
|
|
|
||||||||
Non-current assets
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
1
|
|
Current liabilities
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Non-current liabilities
|
(22
|
)
|
|
(51
|
)
|
|
(4
|
)
|
|
(4
|
)
|
||||
Net amount recognized
|
$
|
(22
|
)
|
|
$
|
(51
|
)
|
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
|
2013
|
|
2012
|
||||
Aggregate projected benefit obligation
|
$
|
256
|
|
|
$
|
304
|
|
Aggregate accumulated benefit obligation
|
256
|
|
|
302
|
|
||
Aggregate fair value of plan assets
|
234
|
|
|
253
|
|
|
|
|
Postretirement
|
||||||||||||||||||||
|
Pension Plans
|
|
Medical Plans
|
||||||||||||||||||||
|
For the Year Ended December 31,
|
||||||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||||||||
Net Periodic Benefit Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Service cost
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
13
|
|
|
14
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Expected return on assets
|
(14
|
)
|
|
(15
|
)
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of actuarial loss
|
4
|
|
|
4
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
||||||
Curtailments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||||
Settlements
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit costs
|
$
|
9
|
|
|
$
|
5
|
|
|
$
|
7
|
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
(1
|
)
|
Changes Recognized in OCI
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Curtailment effects
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Settlement effects
|
(3
|
)
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Current year actuarial (gain) loss
|
(29
|
)
|
|
12
|
|
|
27
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||||
Recognition of actuarial loss
|
(4
|
)
|
|
(4
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognition of prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
2
|
|
||||||
Plan merger
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total recognized in OCI
|
$
|
(36
|
)
|
|
$
|
8
|
|
|
$
|
24
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
2
|
|
|
|
|
Postretirement
|
||||||||||||
|
Pension Plans
|
|
Medical Plans
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Prior service cost (credits)
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
$
|
(4
|
)
|
Net losses
|
45
|
|
|
78
|
|
|
4
|
|
|
7
|
|
||||
Amounts in AOCL
|
$
|
47
|
|
|
$
|
81
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
Projected
|
|
Actual
|
||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Pension plans
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Postretirement medical plans
|
—
|
|
|
1
|
|
|
1
|
|
|||
Total
|
$
|
1
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019-2023
|
||||||||||||
Pension plans
|
$
|
16
|
|
|
$
|
18
|
|
|
$
|
17
|
|
|
$
|
19
|
|
|
$
|
18
|
|
|
$
|
101
|
|
Postretirement medical plans
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
2
|
|
|
|
|
Postretirement
|
||||||||
|
Pension Plans
|
|
Medical Plans
|
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Weighted-average discount rate
|
5.00
|
%
|
|
4.05
|
%
|
|
5.00
|
%
|
|
4.05
|
%
|
Rate of increase in compensation levels
|
3.00
|
%
|
|
3.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
|
|
Postretirement
|
||||||||||||||
|
Pension Plans
|
|
Medical Plans
|
||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2013
|
|
2012
|
|
2011
|
||||||
Weighted-average discount rate
|
4.30
|
%
|
|
5.00
|
%
|
|
5.57
|
%
|
|
4.05
|
%
|
|
5.00
|
%
|
|
5.60
|
%
|
Expected long-term rate of return on assets
|
6.00
|
%
|
|
6.50
|
%
|
|
6.50
|
%
|
|
6.00
|
%
|
|
6.50
|
%
|
|
6.50
|
%
|
Rate of increase in compensation levels
|
3.00
|
%
|
|
3.00
|
%
|
|
3.50
|
%
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|
Pension Plans
|
|
Postretirement Medical Plans
|
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||
Weighted-average discount rate
|
5.70
|
%
|
|
4.84
|
%
|
|
4.50
|
%
|
|
4.00
|
%
|
Rate of increase in compensation levels
|
3.87
|
%
|
|
3.86
|
%
|
|
N/A
|
|
|
N/A
|
|
Health care cost trend rate assumed for 2014 (Initial Rate)
|
8.00
|
%
|
Rate to which the cost trend rate is assumed to decline (Ultimate Rate)
|
5.00
|
%
|
Year that the rate reaches the ultimate trend rate
|
2020
|
|
|
Target
|
|
Actual
|
|||||
Asset Category
|
2014
|
|
2013
|
|
2012
|
|||
Equity securities
|
25
|
%
|
|
25
|
%
|
|
25
|
%
|
Fixed income
|
75
|
%
|
|
75
|
%
|
|
75
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
Asset Category
|
Target Range
|
U.S. equity securities
|
15% - 25%
|
International equity securities
|
5% - 10%
|
U.S. fixed income
|
65% - 85%
|
|
Pension Plans
|
|
Postretirement Medical Plans
|
||||||||||||
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Cash and cash equivalents
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities
|
|
|
|
|
|
|
|
||||||||
U.S. Large-Cap equities
|
39
|
|
|
42
|
|
|
1
|
|
|
1
|
|
||||
International equities
|
23
|
|
|
25
|
|
|
—
|
|
|
—
|
|
||||
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
18
|
|
|
14
|
|
|
—
|
|
|
—
|
|
||||
U.S. Municipal bonds
|
6
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||
U.S. Corporate bonds
|
138
|
|
|
152
|
|
|
4
|
|
|
4
|
|
||||
International bonds
|
26
|
|
|
27
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
$
|
255
|
|
|
$
|
271
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
$
|
18
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total liabilities
|
$
|
18
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Total net assets
|
$
|
237
|
|
|
$
|
257
|
|
|
$
|
5
|
|
|
$
|
5
|
|
•
|
Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.
|
•
|
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
|
•
|
If the Company chooses to stop participating in some of its multi-employer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Multi-employer Plan Expense
|
|
|
|
|
|
|
|
|
|||
Contributions to individually significant multi-employer plans
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
2
|
|
Contributions to all other multi-employer plans
|
3
|
|
|
2
|
|
|
3
|
|
|||
Withdrawal charge for individually significant multi-employer plans
(1)
|
56
|
|
|
—
|
|
|
—
|
|
|||
Withdrawal charge for all other multi-employer plans
(2)
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total
|
$
|
63
|
|
|
$
|
5
|
|
|
$
|
6
|
|
(1)
|
During the fourth quarter of
2013
, the Company recognized a
$56 million
withdrawal charge for one of the four multi-employer pension plans it currently participates in as the Company intends to withdraw from the Soft Drink Industry Local Union 710 Pension Fund ("Local 710") during the upcoming collective bargaining session. This item was presented as a multi-employer pension plan withdrawal in the
Consolidated
Statements of Income. As the withdrawal charge represents the Company's best estimate of the potential amount of the quarterly assessment by Local 710 and the anticipated timing of those assessed payments, actual costs may differ from amounts recorded.
|
(2)
|
During the second quarter of 2011, a trustee-approved mass withdrawal under one multi-employer plan was triggered. As a result of this action, the Company paid
$1 million
for the year ended December 31, 2011. During the second quarter of
2013
, the Company recognized a
$1 million
withdrawal charge for one of the collective bargaining units under a multi-employer pension plan based on the trustees' assessment. These charges were recorded as a component of SG&A expenses in the
Consolidated
Statements of Income.
|
Legal name of the plan
|
Soft Drink Industry Local Union 710 Pension Fund
|
|
Central States, Southeast and Southwest Areas Pension Fund ("Central States")
|
Plan's Employer Identification Number
|
36-6051352
|
|
36-6044243
|
Plan Number
|
001
|
|
001
|
Expiration dates of the collective bargain agreements
|
April 30, 2014 - April 30, 2015
(2)
|
|
June 22, 2014 - February 17, 2018
(3)
|
FIP/RP Status Pending/Implemented
(1)
|
Yes
|
|
Yes
|
PPA zone status as of December 31, 2013
|
Red
|
|
Red
|
PPA zone status as of December 31, 2012
|
Red
|
|
Red
|
Surcharge imposed
|
Yes
|
|
Yes
|
(1)
|
FIP/RP Status Pending/Implemented indicate those plans for which a financial improvement plan ("FIP") or a rehabilitation plan ("RP") is either pending or implemented.
|
(2)
|
Local 710 includes two collective bargaining agreements. The first agreement, which is set to expire April 30, 2014, covers
59%
of the employees included in Local 710. The second agreement, which is set to expire April 30, 2015, covers the remainder of the employees included in Local 710.
|
(3)
|
Central States includes
eight
collective bargaining agreements. The largest agreement, which is set to expire June 21, 2015, covers approximately
49%
of the employees included in Central States. Approximately
71%
of the employees included in Central States are covered by three collective bargaining agreements set to expire during 2015.
|
Year
|
Estimated Contributions
|
||
2014
|
$
|
3
|
|
2015
|
1
|
|
|
Fair Value Measurements at December 31, 2013
|
||||||||||
|
Quoted Prices in Active Markets for Identical Assets
|
|
Significant Other Observable Inputs
|
|
Significant Unobservable Inputs
|
||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest rate contracts
|
—
|
|
|
17
|
|
|
—
|
|
|||
Foreign exchange forward contracts
|
—
|
|
|
3
|
|
|
—
|
|
|||
Marketable securities - trading
|
21
|
|
|
—
|
|
|
—
|
|
|||
Total assets
|
$
|
21
|
|
|
$
|
21
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
Interest rate contracts
|
—
|
|
|
34
|
|
|
—
|
|
|||
Total liabilities
|
$
|
—
|
|
|
$
|
47
|
|
|
$
|
—
|
|
|
Fair Value Measurements at December 31, 2012
|
||||||||||
|
Quoted Prices in Active Markets for Identical Assets
|
|
Significant Other Observable Inputs
|
|
Significant Unobservable Inputs
|
||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
Interest rate contracts
|
—
|
|
|
35
|
|
|
—
|
|
|||
Total assets
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Interest rate contracts
|
—
|
|
|
3
|
|
|
—
|
|
|||
Foreign exchange forward contracts
|
—
|
|
|
2
|
|
|
—
|
|
|||
Total liabilities
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
Fair Value Measurements at December 31, 2013
|
||||||||||||||
|
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
Significant Other Observable Inputs
|
|
Significant Unobservable Inputs
|
||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash and cash equivalents
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities
(1)
|
|
|
|
|
|
|
|
||||||||
U.S. Large-Cap equities
(2)
|
39
|
|
|
—
|
|
|
39
|
|
|
—
|
|
||||
International equities
(2)
|
23
|
|
|
—
|
|
|
23
|
|
|
—
|
|
||||
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
(3)
|
18
|
|
|
—
|
|
|
18
|
|
|
—
|
|
||||
U.S. Municipal bonds
(4)
|
6
|
|
|
—
|
|
|
6
|
|
|
—
|
|
||||
U.S. Corporate bonds
(4)
|
138
|
|
|
—
|
|
|
138
|
|
|
—
|
|
||||
International bonds
(2)
|
26
|
|
|
—
|
|
|
26
|
|
|
—
|
|
||||
Total assets
|
$
|
255
|
|
|
$
|
5
|
|
|
$
|
250
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
(3)
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
—
|
|
Total liabilities
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Total net assets
|
$
|
237
|
|
|
$
|
5
|
|
|
$
|
232
|
|
|
$
|
—
|
|
|
Fair Value Measurements at December 31, 2012
|
||||||||||||||
|
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
Significant Other Observable Inputs
|
|
Significant Unobservable Inputs
|
||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Cash and cash equivalents
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities
(1)
|
|
|
|
|
|
|
|
||||||||
U.S. Large-Cap equities
(2)
|
42
|
|
|
—
|
|
|
42
|
|
|
—
|
|
||||
International equities
(2)
|
25
|
|
|
—
|
|
|
25
|
|
|
—
|
|
||||
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
(3)
|
14
|
|
|
—
|
|
|
14
|
|
|
—
|
|
||||
U.S. Municipal bonds
(4)
|
7
|
|
|
—
|
|
|
7
|
|
|
—
|
|
||||
U.S. Corporate bonds
(4)
|
152
|
|
|
—
|
|
|
152
|
|
|
—
|
|
||||
International bonds
(2)
|
27
|
|
|
—
|
|
|
27
|
|
|
—
|
|
||||
Total assets
|
$
|
271
|
|
|
$
|
4
|
|
|
$
|
267
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
(3)
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
Total liabilities
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Total net assets
|
$
|
257
|
|
|
$
|
4
|
|
|
$
|
253
|
|
|
$
|
—
|
|
(1)
|
Equity securities are comprised of actively managed U.S. index funds and Europe, Australia, Far East ("EAFE") index funds.
|
(2)
|
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.
|
(3)
|
Derivative financial instruments consist of U.S Treasury futures. The fair value of these futures is determined by using quoted market prices of the same or similar instruments.
|
(4)
|
U.S. Municipal and Corporate bonds are based on quoted bid prices for comparable securities in the marketplace.
|
|
Fair Value Measurements at December 31, 2013
|
||||||||||||||
|
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
Significant Other Observable Inputs
|
|
Significant Unobservable Inputs
|
||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Equity securities
(1)
|
|
|
|
|
|
|
|
||||||||
U.S. Large-Cap equities
(2)
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
U.S. Corporate bonds
(3)
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Total
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
Fair Value Measurements at December 31, 2012
|
||||||||||||||
|
|
|
Quoted Prices in Active Markets for Identical Assets
|
|
Significant Other Observable Inputs
|
|
Significant Unobservable Inputs
|
||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Equity securities
(1)
|
|
|
|
|
|
|
|
||||||||
U.S. Large-Cap equities
(2)
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
—
|
|
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
U.S. Corporate bonds
(3)
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Total
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
—
|
|
(1)
|
Equity securities are comprised of actively managed U.S. index funds and EAFE index funds.
|
(2)
|
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.
|
(3)
|
U.S. Corporate bonds are based on quoted bid prices for comparable securities in the marketplace.
|
|
December 31, 2013
|
|
December 31, 2012
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Long-term debt – 2013 Notes
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
250
|
|
|
$
|
255
|
|
Long-term debt – 2016 Notes
|
500
|
|
|
519
|
|
|
500
|
|
|
528
|
|
||||
Long-term debt – 2018 Notes
|
724
|
|
|
856
|
|
|
724
|
|
|
919
|
|
||||
Long-term debt – 2019 Notes
(2)
|
248
|
|
|
252
|
|
|
253
|
|
|
256
|
|
||||
Long-term debt – 2020 Notes
(2)
|
241
|
|
|
236
|
|
|
247
|
|
|
245
|
|
||||
Long-term debt – 2021 Notes
(2)
|
241
|
|
|
241
|
|
|
254
|
|
|
253
|
|
||||
Long-term debt – 2022 Notes
(2)
|
247
|
|
|
226
|
|
|
249
|
|
|
250
|
|
||||
Long-term debt – 2038 Notes
(2)
|
252
|
|
|
317
|
|
|
271
|
|
|
366
|
|
(1)
|
The repayment of the 2013 Notes occurred on May 1, 2013 at maturity.
|
(2)
|
The carrying amount includes the unamortized discounts on the issuance of debt and adjustments related to the change in the fair value of interest rate swaps designated as fair value hedges on the 2019, 2020, 2021, 2022 and 2038 Notes.
Refer to Note 10 for additional information
regarding derivatives.
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Total stock-based compensation expense
|
$
|
37
|
|
|
$
|
35
|
|
|
$
|
34
|
|
Income tax benefit recognized in the income statement
|
(12
|
)
|
|
(12
|
)
|
|
(11
|
)
|
|||
Stock-based compensation expense, net of tax
|
$
|
25
|
|
|
$
|
23
|
|
|
$
|
23
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Fair value of options at grant date
|
|
$
|
6.92
|
|
|
$
|
7.05
|
|
|
$
|
6.59
|
|
Risk free interest rate
|
|
0.68
|
%
|
|
0.87
|
%
|
|
2.51
|
%
|
|||
Expected term of options (in years)
(1)
|
|
4.5
|
|
|
5.1
|
|
|
6.0
|
|
|||
Dividend yield
|
|
3.39
|
%
|
|
3.52
|
%
|
|
2.75
|
%
|
|||
Expected volatility
(1)
|
|
27.42
|
%
|
|
30.64
|
%
|
|
22.70
|
%
|
(1)
|
Because the Company lacked a meaningful set of historical data upon which to develop certain valuation assumptions, including expected term and volatility of options granted, DPS elected to develop these valuation assumptions based on information disclosed by similarly-situated companies, including multi-national consumer goods companies of similar market capitalization.
|
|
Stock Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value (in millions)
|
|||||
Outstanding as of January 1, 2013
|
2,001,908
|
|
|
$
|
34.07
|
|
|
7.95
|
|
$
|
20
|
|
Granted
|
580,184
|
|
|
43.82
|
|
|
|
|
|
|||
Exercised
|
(484,281
|
)
|
|
30.24
|
|
|
|
|
8
|
|
||
Forfeited or expired
|
(65,978
|
)
|
|
39.74
|
|
|
|
|
|
|||
Outstanding as of December 31, 2013
|
2,031,833
|
|
|
37.59
|
|
|
7.65
|
|
23
|
|
||
Exercisable as of December 31, 2013
|
826,302
|
|
|
33.78
|
|
|
6.62
|
|
12
|
|
|
RSUs
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value (in millions)
|
|||||
Outstanding as of January 1, 2013
|
2,431,103
|
|
|
$
|
35.36
|
|
|
1.18
|
|
$
|
108
|
|
Granted
|
690,010
|
|
|
43.83
|
|
|
|
|
|
|||
Vested and released
|
(841,635
|
)
|
|
32.02
|
|
|
|
|
37
|
|
||
Forfeited
|
(140,335
|
)
|
|
39.24
|
|
|
|
|
|
|||
Outstanding as of December 31, 2013
|
2,139,143
|
|
|
39.15
|
|
|
1.12
|
|
104
|
|
|
PSUs
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value (in millions)
|
|||||
Outstanding as of January 1, 2013
|
254,013
|
|
|
$
|
37.10
|
|
|
1.64
|
|
$
|
11
|
|
Granted
|
183,233
|
|
|
43.82
|
|
|
|
|
|
|||
Vested and released
|
—
|
|
|
—
|
|
|
|
|
|
|||
Forfeited
|
(14,380
|
)
|
|
40.94
|
|
|
|
|
|
|||
Outstanding as of December 31, 2013
|
422,866
|
|
|
39.88
|
|
|
1.26
|
|
21
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2013
|
|
2012
|
|
2011
|
||||||
Basic EPS:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
624
|
|
|
$
|
629
|
|
|
$
|
606
|
|
Weighted average common shares outstanding
|
|
202.9
|
|
|
210.6
|
|
|
218.7
|
|
|||
Earnings per common share — basic
|
|
$
|
3.08
|
|
|
$
|
2.99
|
|
|
$
|
2.77
|
|
Diluted EPS:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
624
|
|
|
$
|
629
|
|
|
$
|
606
|
|
Weighted average common shares outstanding
|
|
202.9
|
|
|
210.6
|
|
|
218.7
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
||||||
Stock options, RSUs, PSUs and dividend equivalent units
|
|
1.6
|
|
|
1.7
|
|
|
2.5
|
|
|||
Weighted average common shares outstanding and common stock equivalents
|
|
204.5
|
|
|
212.3
|
|
|
221.2
|
|
|||
Earnings per common share — diluted
|
|
$
|
3.05
|
|
|
$
|
2.96
|
|
|
$
|
2.74
|
|
|
Foreign Currency Translation
|
|
Change in Pension Liability
|
|
Cash Flow Hedges
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance as of January 1, 2011
|
$
|
7
|
|
|
$
|
(31
|
)
|
|
$
|
(4
|
)
|
|
$
|
(28
|
)
|
Current year OCI
|
(34
|
)
|
|
(17
|
)
|
|
(31
|
)
|
|
(82
|
)
|
||||
Balance as of December 31, 2011
|
$
|
(27
|
)
|
|
$
|
(48
|
)
|
|
$
|
(35
|
)
|
|
$
|
(110
|
)
|
Current year OCI
|
19
|
|
|
(8
|
)
|
|
(11
|
)
|
|
—
|
|
||||
Balance as of December 31, 2012
|
(8
|
)
|
|
(56
|
)
|
|
(46
|
)
|
|
(110
|
)
|
||||
OCI before reclassifications
|
(9
|
)
|
|
19
|
|
|
3
|
|
|
13
|
|
||||
Amounts reclassified from AOCL
|
—
|
|
|
4
|
|
|
5
|
|
|
9
|
|
||||
Net current year OCI
|
(9
|
)
|
|
23
|
|
|
8
|
|
|
22
|
|
||||
Balance as of December 31, 2013
|
$
|
(17
|
)
|
|
$
|
(33
|
)
|
|
$
|
(38
|
)
|
|
$
|
(88
|
)
|
|
|
|
For the
|
||
|
|
|
Year Ended
|
||
|
Location of Loss Reclassified from AOCL into Income
|
|
December 31, 2013
|
||
Loss on cash flow hedges:
|
|
|
|
||
Interest rate contracts
|
Interest expense
|
|
$
|
(7
|
)
|
Foreign exchange forward contracts
|
Cost of sales
|
|
(1
|
)
|
|
Total
|
|
|
(8
|
)
|
|
Income tax expense
|
|
|
(3
|
)
|
|
Total
|
|
|
$
|
(5
|
)
|
|
|
|
|
||
Defined benefit pension and postretirement plan items:
|
|
|
|
||
Amortization of prior service costs
|
Selling, general and administrative expenses
|
|
$
|
1
|
|
Amortization of actuarial gains/(losses), net
|
Selling, general and administrative expenses
|
|
(4
|
)
|
|
Settlement loss
|
Selling, general and administrative expenses
|
|
(3
|
)
|
|
Total
|
|
|
(6
|
)
|
|
Income tax expense
|
|
|
(2
|
)
|
|
Total
|
|
|
$
|
(4
|
)
|
|
|
|
|
||
Total reclassifications
|
|
|
$
|
(9
|
)
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Supplemental cash flow disclosures of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Dividends declared but not yet paid
|
$
|
75
|
|
|
$
|
70
|
|
|
$
|
68
|
|
Capital expenditures included in accounts payable and other current liabilities
|
21
|
|
|
27
|
|
|
31
|
|
|||
Stock issued for acquisition of business
|
13
|
|
|
—
|
|
|
—
|
|
|||
Capital lease additions
|
1
|
|
|
49
|
|
|
—
|
|
|||
Supplemental cash flow disclosures:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
107
|
|
|
$
|
115
|
|
|
$
|
104
|
|
Income taxes paid
|
310
|
|
|
724
|
|
|
278
|
|
|
|
Operating Leases
|
|
Capital Leases
|
||||
2014
|
|
$
|
55
|
|
|
$
|
6
|
|
2015
|
|
44
|
|
|
6
|
|
||
2016
|
|
38
|
|
|
6
|
|
||
2017
|
|
30
|
|
|
6
|
|
||
2018
|
|
22
|
|
|
6
|
|
||
Thereafter
|
|
76
|
|
|
149
|
|
||
Total minimum lease payments
|
|
$
|
265
|
|
|
179
|
|
|
Less imputed interest at rates ranging from 1.95% to 15.42%
|
|
|
|
(123
|
)
|
|||
Present value of minimum lease payments
|
|
|
|
$
|
56
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Segment Results – Net sales
|
|
|
|
|
|
||||||
Beverage Concentrates
|
$
|
1,229
|
|
|
$
|
1,221
|
|
|
$
|
1,193
|
|
Packaged Beverages
|
4,306
|
|
|
4,358
|
|
|
4,292
|
|
|||
Latin America Beverages
|
462
|
|
|
416
|
|
|
418
|
|
|||
Net sales
|
$
|
5,997
|
|
|
$
|
5,995
|
|
|
$
|
5,903
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Segment Results – SOP
|
|
|
|
|
|
||||||
Beverage Concentrates
|
$
|
778
|
|
|
$
|
774
|
|
|
$
|
779
|
|
Packaged Beverages
|
525
|
|
|
539
|
|
|
519
|
|
|||
Latin America Beverages
|
61
|
|
|
51
|
|
|
43
|
|
|||
Total SOP
|
1,364
|
|
|
1,364
|
|
|
1,341
|
|
|||
Unallocated corporate costs
|
309
|
|
|
261
|
|
|
306
|
|
|||
Other operating expense, net
|
9
|
|
|
11
|
|
|
11
|
|
|||
Income from operations
|
1,046
|
|
|
1,092
|
|
|
1,024
|
|
|||
Interest expense, net
|
121
|
|
|
123
|
|
|
111
|
|
|||
Other expense (income), net
|
383
|
|
|
(9
|
)
|
|
(12
|
)
|
|||
Income before (benefit) provision for income taxes and equity in earnings of unconsolidated subsidiaries
|
$
|
542
|
|
|
$
|
978
|
|
|
$
|
925
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Amortization expense
|
|
|
|
|
|
||||||
Beverage Concentrates
|
$
|
17
|
|
|
$
|
20
|
|
|
$
|
19
|
|
Packaged Beverages
|
7
|
|
|
7
|
|
|
10
|
|
|||
Latin America Beverages
|
—
|
|
|
—
|
|
|
—
|
|
|||
Segment total
|
24
|
|
|
27
|
|
|
29
|
|
|||
Corporate and other
|
14
|
|
|
10
|
|
|
5
|
|
|||
Total amortization expense
|
$
|
38
|
|
|
$
|
37
|
|
|
$
|
34
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Depreciation expense
|
|
|
|
|
|
||||||
Beverage Concentrates
|
$
|
5
|
|
|
$
|
10
|
|
|
$
|
15
|
|
Packaged Beverages
|
164
|
|
|
173
|
|
|
165
|
|
|||
Latin America Beverages
|
14
|
|
|
11
|
|
|
11
|
|
|||
Segment total
|
183
|
|
|
194
|
|
|
191
|
|
|||
Corporate and other
|
13
|
|
|
9
|
|
|
7
|
|
|||
Total depreciation expense
|
$
|
196
|
|
|
$
|
203
|
|
|
$
|
198
|
|
|
|
||||||
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
Total assets
|
|
|
|
|
|
||
Property, plant and equipment, net
|
|
|
|
||||
Beverage Concentrates
|
$
|
73
|
|
|
$
|
67
|
|
Packaged Beverages
|
932
|
|
|
982
|
|
||
Latin America Beverages
|
92
|
|
|
84
|
|
||
Segment total
|
1,097
|
|
|
1,133
|
|
||
Corporate and other
|
76
|
|
|
69
|
|
||
Total property, plant and equipment, net
|
1,173
|
|
|
1,202
|
|
||
Current assets
|
1,119
|
|
|
1,335
|
|
||
All other non-current assets
|
5,909
|
|
|
6,391
|
|
||
Total assets
|
$
|
8,201
|
|
|
$
|
8,928
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Net sales
|
|
|
|
|
|
|
|
|
|||
U.S.
|
$
|
5,292
|
|
|
$
|
5,341
|
|
|
$
|
5,243
|
|
International
|
705
|
|
|
654
|
|
|
660
|
|
|||
Total net sales
|
$
|
5,997
|
|
|
$
|
5,995
|
|
|
$
|
5,903
|
|
|
As of December 31,
|
||||||
|
2013
|
|
2012
|
||||
Property, plant and equipment, net
|
|
|
|
|
|
||
U.S.
|
$
|
1,081
|
|
|
$
|
1,117
|
|
International
|
92
|
|
|
85
|
|
||
Total property, plant and equipment, net
|
$
|
1,173
|
|
|
$
|
1,202
|
|
|
Workforce Reduction Costs
|
||
2013 restructuring costs
|
$
|
7
|
|
Cash payments
|
(7
|
)
|
|
Balance as of December 31, 2013
|
$
|
—
|
|
|
Condensed Consolidating Statements of Income
|
||||||||||||||||||
|
For the Year Ended December 31, 2013
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
5,406
|
|
|
$
|
623
|
|
|
$
|
(32
|
)
|
|
$
|
5,997
|
|
Cost of sales
|
—
|
|
|
2,240
|
|
|
291
|
|
|
(32
|
)
|
|
2,499
|
|
|||||
Gross profit
|
—
|
|
|
3,166
|
|
|
332
|
|
|
—
|
|
|
3,498
|
|
|||||
Selling, general and administrative expenses
|
4
|
|
|
2,048
|
|
|
220
|
|
|
—
|
|
|
2,272
|
|
|||||
Multi-employer pension plan withdrawal
|
—
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
56
|
|
|||||
Depreciation and amortization
|
—
|
|
|
107
|
|
|
8
|
|
|
—
|
|
|
115
|
|
|||||
Other operating expense, net
|
—
|
|
|
9
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|||||
Income from operations
|
(4
|
)
|
|
946
|
|
|
104
|
|
|
—
|
|
|
1,046
|
|
|||||
Interest expense
|
118
|
|
|
89
|
|
|
—
|
|
|
(84
|
)
|
|
123
|
|
|||||
Interest income
|
(77
|
)
|
|
—
|
|
|
(9
|
)
|
|
84
|
|
|
(2
|
)
|
|||||
Other expense (income), net
|
383
|
|
|
(6
|
)
|
|
6
|
|
|
—
|
|
|
383
|
|
|||||
(Loss) income before (benefit) provision for income taxes and equity in earnings of subsidiaries
|
(428
|
)
|
|
863
|
|
|
107
|
|
|
—
|
|
|
542
|
|
|||||
(Benefit) provision for income taxes
|
(16
|
)
|
|
(147
|
)
|
|
82
|
|
|
—
|
|
|
(81
|
)
|
|||||
Income (loss) before equity in earnings of subsidiaries
|
(412
|
)
|
|
1,010
|
|
|
25
|
|
|
—
|
|
|
623
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
1,036
|
|
|
26
|
|
|
—
|
|
|
(1,062
|
)
|
|
—
|
|
|||||
Equity in earnings of unconsolidated subsidiaries, net of tax
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Net income
|
$
|
624
|
|
|
$
|
1,036
|
|
|
$
|
26
|
|
|
$
|
(1,062
|
)
|
|
$
|
624
|
|
|
Condensed Consolidating Statements of Income
|
||||||||||||||||||
|
For the Year Ended December 31, 2012
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
5,451
|
|
|
$
|
575
|
|
|
$
|
(31
|
)
|
|
$
|
5,995
|
|
Cost of sales
|
—
|
|
|
2,265
|
|
|
266
|
|
|
(31
|
)
|
|
2,500
|
|
|||||
Gross profit
|
—
|
|
|
3,186
|
|
|
309
|
|
|
—
|
|
|
3,495
|
|
|||||
Selling, general and administrative expenses
|
—
|
|
|
2,062
|
|
|
206
|
|
|
—
|
|
|
2,268
|
|
|||||
Depreciation and amortization
|
—
|
|
|
117
|
|
|
7
|
|
|
—
|
|
|
124
|
|
|||||
Other operating expense, net
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
Income from operations
|
—
|
|
|
996
|
|
|
96
|
|
|
—
|
|
|
1,092
|
|
|||||
Interest expense
|
122
|
|
|
90
|
|
|
—
|
|
|
(87
|
)
|
|
125
|
|
|||||
Interest income
|
(81
|
)
|
|
(1
|
)
|
|
(7
|
)
|
|
87
|
|
|
(2
|
)
|
|||||
Other (income) expense, net
|
(11
|
)
|
|
(4
|
)
|
|
6
|
|
|
—
|
|
|
(9
|
)
|
|||||
Income (loss) before provision for income taxes and equity in earnings of subsidiaries
|
(30
|
)
|
|
911
|
|
|
97
|
|
|
—
|
|
|
978
|
|
|||||
Provision for income taxes
|
(13
|
)
|
|
342
|
|
|
20
|
|
|
—
|
|
|
349
|
|
|||||
Income (loss) before equity in earnings of subsidiaries
|
(17
|
)
|
|
569
|
|
|
77
|
|
|
—
|
|
|
629
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
647
|
|
|
78
|
|
|
—
|
|
|
(725
|
)
|
|
—
|
|
|||||
Equity in earnings of unconsolidated subsidiaries, net of tax
|
(1
|
)
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
$
|
629
|
|
|
$
|
647
|
|
|
$
|
78
|
|
|
$
|
(725
|
)
|
|
$
|
629
|
|
|
Condensed Consolidating Statements of Income
|
||||||||||||||||||
|
For the Year Ended December 31, 2011
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
5,350
|
|
|
$
|
579
|
|
|
$
|
(26
|
)
|
|
$
|
5,903
|
|
Cost of sales
|
—
|
|
|
2,248
|
|
|
263
|
|
|
(26
|
)
|
|
2,485
|
|
|||||
Gross profit
|
—
|
|
|
3,102
|
|
|
316
|
|
|
—
|
|
|
3,418
|
|
|||||
Selling, general and administrative expenses
|
—
|
|
|
2,037
|
|
|
220
|
|
|
—
|
|
|
2,257
|
|
|||||
Depreciation and amortization
|
—
|
|
|
119
|
|
|
7
|
|
|
—
|
|
|
126
|
|
|||||
Other operating expense (income), net
|
—
|
|
|
13
|
|
|
(2
|
)
|
|
—
|
|
|
11
|
|
|||||
Income from operations
|
—
|
|
|
933
|
|
|
91
|
|
|
—
|
|
|
1,024
|
|
|||||
Interest expense
|
112
|
|
|
80
|
|
|
—
|
|
|
(78
|
)
|
|
114
|
|
|||||
Interest income
|
(74
|
)
|
|
(2
|
)
|
|
(5
|
)
|
|
78
|
|
|
(3
|
)
|
|||||
Other (income) expense, net
|
(12
|
)
|
|
(3
|
)
|
|
3
|
|
|
—
|
|
|
(12
|
)
|
|||||
Income (loss) before provision for income taxes and equity in earnings of subsidiaries
|
(26
|
)
|
|
858
|
|
|
93
|
|
|
—
|
|
|
925
|
|
|||||
Provision for income taxes
|
(14
|
)
|
|
306
|
|
|
28
|
|
|
—
|
|
|
320
|
|
|||||
Income (loss) before equity in earnings of subsidiaries
|
(12
|
)
|
|
552
|
|
|
65
|
|
|
—
|
|
|
605
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
618
|
|
|
66
|
|
|
—
|
|
|
(684
|
)
|
|
—
|
|
|||||
Equity in earnings of unconsolidated subsidiaries, net of tax
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Net income
|
$
|
606
|
|
|
$
|
618
|
|
|
$
|
66
|
|
|
$
|
(684
|
)
|
|
$
|
606
|
|
|
Condensed Consolidating Statements of Comprehensive Income
|
||||||||||||||||||
|
For the Year Ended December 31, 2013
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Net income
|
$
|
624
|
|
|
$
|
1,036
|
|
|
$
|
26
|
|
|
$
|
(1,062
|
)
|
|
$
|
624
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income impact from consolidated subsidiaries
|
11
|
|
|
(19
|
)
|
|
—
|
|
|
8
|
|
|
—
|
|
|||||
Foreign currency translation adjustments
|
6
|
|
|
11
|
|
|
(26
|
)
|
|
—
|
|
|
(9
|
)
|
|||||
Net change in pension liability, net of tax
|
—
|
|
|
19
|
|
|
4
|
|
|
—
|
|
|
23
|
|
|||||
Net change in cash flow hedges, net of tax
|
5
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
8
|
|
|||||
Total other comprehensive income (loss), net of tax
|
22
|
|
|
11
|
|
|
(19
|
)
|
|
8
|
|
|
22
|
|
|||||
Comprehensive income (loss)
|
$
|
646
|
|
|
$
|
1,047
|
|
|
$
|
7
|
|
|
$
|
(1,054
|
)
|
|
$
|
646
|
|
|
Condensed Consolidating Statements of Comprehensive Income
|
||||||||||||||||||
|
For the Year Ended December 31, 2012
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Net income
|
$
|
629
|
|
|
$
|
647
|
|
|
$
|
78
|
|
|
$
|
(725
|
)
|
|
$
|
629
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income impact from consolidated subsidiaries
|
13
|
|
|
24
|
|
|
—
|
|
|
(37
|
)
|
|
—
|
|
|||||
Foreign currency translation adjustments
|
(3
|
)
|
|
(4
|
)
|
|
26
|
|
|
—
|
|
|
19
|
|
|||||
Net change in pension liability, net of tax
|
—
|
|
|
(7
|
)
|
|
(1
|
)
|
|
—
|
|
|
(8
|
)
|
|||||
Net change in cash flow hedges, net of tax
|
(10
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(11
|
)
|
|||||
Total other comprehensive income (loss), net of tax
|
—
|
|
|
13
|
|
|
24
|
|
|
(37
|
)
|
|
—
|
|
|||||
Comprehensive income (loss)
|
$
|
629
|
|
|
$
|
660
|
|
|
$
|
102
|
|
|
$
|
(762
|
)
|
|
$
|
629
|
|
|
Condensed Consolidating Statements of Comprehensive Income
|
||||||||||||||||||
|
For the Year Ended December 31, 2011
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Net income
|
$
|
606
|
|
|
$
|
618
|
|
|
$
|
66
|
|
|
$
|
(684
|
)
|
|
$
|
606
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income impact from consolidated subsidiaries
|
(50
|
)
|
|
(39
|
)
|
|
—
|
|
|
89
|
|
|
—
|
|
|||||
Foreign currency translation adjustments
|
2
|
|
|
2
|
|
|
(38
|
)
|
|
—
|
|
|
(34
|
)
|
|||||
Net change in pension liability, net of tax
|
—
|
|
|
(13
|
)
|
|
(4
|
)
|
|
—
|
|
|
(17
|
)
|
|||||
Net change in cash flow hedges, net of tax
|
(34
|
)
|
|
—
|
|
|
3
|
|
|
—
|
|
|
(31
|
)
|
|||||
Total other comprehensive income (loss), net of tax
|
(82
|
)
|
|
(50
|
)
|
|
(39
|
)
|
|
89
|
|
|
(82
|
)
|
|||||
Comprehensive income (loss)
|
$
|
524
|
|
|
$
|
568
|
|
|
$
|
27
|
|
|
$
|
(595
|
)
|
|
$
|
524
|
|
|
Condensed Consolidating Balance Sheets
|
||||||||||||||||||
|
As of December 31, 2013
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
88
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
153
|
|
Accounts receivable:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade, net
|
—
|
|
|
502
|
|
|
62
|
|
|
—
|
|
|
564
|
|
|||||
Other
|
2
|
|
|
43
|
|
|
13
|
|
|
—
|
|
|
58
|
|
|||||
Related party receivable
|
12
|
|
|
7
|
|
|
—
|
|
|
(19
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
172
|
|
|
28
|
|
|
—
|
|
|
200
|
|
|||||
Deferred tax assets
|
—
|
|
|
63
|
|
|
6
|
|
|
(3
|
)
|
|
66
|
|
|||||
Prepaid expenses and other current assets
|
184
|
|
|
58
|
|
|
4
|
|
|
(168
|
)
|
|
78
|
|
|||||
Total current assets
|
198
|
|
|
933
|
|
|
178
|
|
|
(190
|
)
|
|
1,119
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
1,081
|
|
|
92
|
|
|
—
|
|
|
1,173
|
|
|||||
Investments in consolidated subsidiaries
|
5,438
|
|
|
590
|
|
|
—
|
|
|
(6,028
|
)
|
|
—
|
|
|||||
Investments in unconsolidated subsidiaries
|
1
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
15
|
|
|||||
Goodwill
|
—
|
|
|
2,966
|
|
|
22
|
|
|
—
|
|
|
2,988
|
|
|||||
Other intangible assets, net
|
—
|
|
|
2,616
|
|
|
78
|
|
|
—
|
|
|
2,694
|
|
|||||
Long-term receivable, related parties
|
3,077
|
|
|
3,766
|
|
|
259
|
|
|
(7,102
|
)
|
|
—
|
|
|||||
Other non-current assets
|
32
|
|
|
95
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|||||
Non-current deferred tax assets
|
27
|
|
|
—
|
|
|
85
|
|
|
(27
|
)
|
|
85
|
|
|||||
Total assets
|
$
|
8,773
|
|
|
$
|
12,047
|
|
|
$
|
728
|
|
|
$
|
(13,347
|
)
|
|
$
|
8,201
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
247
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
271
|
|
Related party payable
|
—
|
|
|
12
|
|
|
7
|
|
|
(19
|
)
|
|
—
|
|
|||||
Deferred revenue
|
—
|
|
|
63
|
|
|
2
|
|
|
—
|
|
|
65
|
|
|||||
Short-term borrowings and current portion of long-term obligations
|
65
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
66
|
|
|||||
Income taxes payable
|
—
|
|
|
194
|
|
|
7
|
|
|
(168
|
)
|
|
33
|
|
|||||
Other current liabilities
|
110
|
|
|
448
|
|
|
40
|
|
|
(3
|
)
|
|
595
|
|
|||||
Total current liabilities
|
175
|
|
|
965
|
|
|
80
|
|
|
(190
|
)
|
|
1,030
|
|
|||||
Long-term obligations to third parties
|
2,453
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
2,508
|
|
|||||
Long-term obligations to related parties
|
3,766
|
|
|
3,336
|
|
|
—
|
|
|
(7,102
|
)
|
|
—
|
|
|||||
Non-current deferred tax liabilities
|
—
|
|
|
781
|
|
|
1
|
|
|
(27
|
)
|
|
755
|
|
|||||
Non-current deferred revenue
|
—
|
|
|
1,278
|
|
|
40
|
|
|
—
|
|
|
1,318
|
|
|||||
Other non-current liabilities
|
102
|
|
|
194
|
|
|
17
|
|
|
—
|
|
|
313
|
|
|||||
Total liabilities
|
6,496
|
|
|
6,609
|
|
|
138
|
|
|
(7,319
|
)
|
|
5,924
|
|
|||||
Total stockholders' equity
|
2,277
|
|
|
5,438
|
|
|
590
|
|
|
(6,028
|
)
|
|
2,277
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
8,773
|
|
|
$
|
12,047
|
|
|
$
|
728
|
|
|
$
|
(13,347
|
)
|
|
$
|
8,201
|
|
|
Condensed Consolidating Balance Sheets
|
||||||||||||||||||
|
As of December 31, 2012
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
257
|
|
|
$
|
109
|
|
|
$
|
—
|
|
|
$
|
366
|
|
Accounts receivable:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade, net
|
—
|
|
|
498
|
|
|
54
|
|
|
—
|
|
|
552
|
|
|||||
Other
|
3
|
|
|
36
|
|
|
11
|
|
|
—
|
|
|
50
|
|
|||||
Related party receivable
|
12
|
|
|
8
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
171
|
|
|
26
|
|
|
—
|
|
|
197
|
|
|||||
Deferred tax assets
|
(1
|
)
|
|
63
|
|
|
4
|
|
|
—
|
|
|
66
|
|
|||||
Prepaid and other current assets
|
162
|
|
|
75
|
|
|
21
|
|
|
(154
|
)
|
|
104
|
|
|||||
Total current assets
|
176
|
|
|
1,108
|
|
|
225
|
|
|
(174
|
)
|
|
1,335
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
1,117
|
|
|
85
|
|
|
—
|
|
|
1,202
|
|
|||||
Investments in consolidated subsidiaries
|
4,334
|
|
|
611
|
|
|
—
|
|
|
(4,945
|
)
|
|
—
|
|
|||||
Investments in unconsolidated subsidiaries
|
1
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
14
|
|
|||||
Goodwill
|
—
|
|
|
2,961
|
|
|
22
|
|
|
—
|
|
|
2,983
|
|
|||||
Other intangible assets, net
|
—
|
|
|
2,605
|
|
|
79
|
|
|
—
|
|
|
2,684
|
|
|||||
Long-term receivable, related parties
|
2,999
|
|
|
2,779
|
|
|
204
|
|
|
(5,982
|
)
|
|
—
|
|
|||||
Other non-current assets
|
476
|
|
|
97
|
|
|
7
|
|
|
—
|
|
|
580
|
|
|||||
Non-current deferred tax assets
|
26
|
|
|
—
|
|
|
130
|
|
|
(26
|
)
|
|
130
|
|
|||||
Total assets
|
$
|
8,012
|
|
|
$
|
11,278
|
|
|
$
|
765
|
|
|
$
|
(11,127
|
)
|
|
$
|
8,928
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
253
|
|
|
$
|
30
|
|
|
$
|
—
|
|
|
$
|
283
|
|
Related party payable
|
—
|
|
|
12
|
|
|
10
|
|
|
(22
|
)
|
|
—
|
|
|||||
Deferred revenue
|
—
|
|
|
63
|
|
|
2
|
|
|
—
|
|
|
65
|
|
|||||
Short-term borrowings and current portion of long-term obligations
|
250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
250
|
|
|||||
Income taxes payable
|
—
|
|
|
198
|
|
|
1
|
|
|
(154
|
)
|
|
45
|
|
|||||
Other current liabilities
|
105
|
|
|
436
|
|
|
46
|
|
|
2
|
|
|
589
|
|
|||||
Total current liabilities
|
355
|
|
|
962
|
|
|
89
|
|
|
(174
|
)
|
|
1,232
|
|
|||||
Long-term obligations to third parties
|
2,498
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
2,554
|
|
|||||
Long-term obligations to related parties
|
2,779
|
|
|
3,203
|
|
|
—
|
|
|
(5,982
|
)
|
|
—
|
|
|||||
Non-current deferred tax liabilities
|
—
|
|
|
653
|
|
|
3
|
|
|
(26
|
)
|
|
630
|
|
|||||
Non-current deferred revenue
|
—
|
|
|
1,342
|
|
|
44
|
|
|
—
|
|
|
1,386
|
|
|||||
Other non-current liabilities
|
100
|
|
|
728
|
|
|
18
|
|
|
—
|
|
|
846
|
|
|||||
Total liabilities
|
5,732
|
|
|
6,944
|
|
|
154
|
|
|
(6,182
|
)
|
|
6,648
|
|
|||||
Total stockholders' equity
|
2,280
|
|
|
4,334
|
|
|
611
|
|
|
(4,945
|
)
|
|
2,280
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
8,012
|
|
|
$
|
11,278
|
|
|
$
|
765
|
|
|
$
|
(11,127
|
)
|
|
$
|
8,928
|
|
|
Condensed Consolidating Statements of Cash Flows
|
||||||||||||||||||
|
For the Year Ended December 31, 2013
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
(99
|
)
|
|
$
|
889
|
|
|
$
|
84
|
|
|
$
|
(8
|
)
|
|
$
|
866
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisition of business
|
—
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Purchase of property, plant and equipment
|
—
|
|
|
(154
|
)
|
|
(25
|
)
|
|
—
|
|
|
(179
|
)
|
|||||
Purchase of intangible assets
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Return of capital
|
—
|
|
|
19
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|||||
Proceeds from disposals of property, plant and equipment
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Issuance of related party notes receivable
|
—
|
|
|
(810
|
)
|
|
(80
|
)
|
|
890
|
|
|
—
|
|
|||||
Repayment of related party notes receivable
|
250
|
|
|
65
|
|
|
—
|
|
|
(315
|
)
|
|
—
|
|
|||||
Other, net
|
(3
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Net cash (used in) provided by investing activities
|
247
|
|
|
(893
|
)
|
|
(124
|
)
|
|
575
|
|
|
(195
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Proceeds from issuance of related party debt
|
802
|
|
|
80
|
|
|
8
|
|
|
(890
|
)
|
|
—
|
|
|||||
Repayment of related party debt
|
(65
|
)
|
|
(250
|
)
|
|
—
|
|
|
315
|
|
|
—
|
|
|||||
Repayment of senior unsecured notes
|
(250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(250
|
)
|
|||||
Net issuance of commercial paper
|
65
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|||||
Repurchase of shares of common stock
|
(400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(400
|
)
|
|||||
Dividends paid
|
(302
|
)
|
|
—
|
|
|
(8
|
)
|
|
8
|
|
|
(302
|
)
|
|||||
Tax withholdings related to net share settlements of certain stock awards
|
(13
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13
|
)
|
|||||
Proceeds from stock options exercised
|
15
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|||||
Excess tax benefit on stock-based compensation
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Other, net
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(148
|
)
|
|
(165
|
)
|
|
—
|
|
|
(567
|
)
|
|
(880
|
)
|
|||||
Cash and cash equivalents — net change from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating, investing and financing activities
|
—
|
|
|
(169
|
)
|
|
(40
|
)
|
|
—
|
|
|
(209
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
—
|
|
|
257
|
|
|
109
|
|
|
—
|
|
|
366
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
—
|
|
|
$
|
88
|
|
|
$
|
65
|
|
|
$
|
—
|
|
|
$
|
153
|
|
|
Condensed Consolidating Statements of Cash Flows
|
||||||||||||||||||
|
For the Year Ended December 31, 2012
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
(193
|
)
|
|
$
|
559
|
|
|
$
|
116
|
|
|
$
|
—
|
|
|
$
|
482
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
—
|
|
|
(193
|
)
|
|
(24
|
)
|
|
—
|
|
|
(217
|
)
|
|||||
Purchase of intangible assets
|
—
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
|||||
Return of capital
|
—
|
|
|
21
|
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|||||
Proceeds from disposals of property, plant and equipment
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Issuance of related party notes receivable
|
—
|
|
|
(859
|
)
|
|
(25
|
)
|
|
884
|
|
|
—
|
|
|||||
Repayment of related party notes receivable
|
450
|
|
|
500
|
|
|
—
|
|
|
(950
|
)
|
|
—
|
|
|||||
Net cash (used in) provided by investing activities
|
450
|
|
|
(531
|
)
|
|
(70
|
)
|
|
(66
|
)
|
|
(217
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of related party debt
|
859
|
|
|
25
|
|
|
—
|
|
|
(884
|
)
|
|
—
|
|
|||||
Repayment of related party debt
|
(500
|
)
|
|
(450
|
)
|
|
—
|
|
|
950
|
|
|
—
|
|
|||||
Proceeds from issuance of senior unsecured notes
|
500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
500
|
|
|||||
Repayment of senior unsecured notes
|
(450
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(450
|
)
|
|||||
Repurchase of shares of common stock
|
(400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(400
|
)
|
|||||
Dividends paid
|
(284
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(284
|
)
|
|||||
Proceeds from stock options exercised
|
22
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22
|
|
|||||
Excess tax benefit on stock-based compensation
|
—
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|||||
Deferred financing charges paid
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Other, net
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(257
|
)
|
|
(412
|
)
|
|
—
|
|
|
66
|
|
|
(603
|
)
|
|||||
Cash and cash equivalents — net change from:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating, investing and financing activities
|
—
|
|
|
(384
|
)
|
|
46
|
|
|
—
|
|
|
(338
|
)
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|||||
Cash and cash equivalents at beginning of year
|
—
|
|
|
641
|
|
|
60
|
|
|
—
|
|
|
701
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
—
|
|
|
$
|
257
|
|
|
$
|
109
|
|
|
$
|
—
|
|
|
$
|
366
|
|
|
Condensed Consolidating Statements of Cash Flows
|
||||||||||||||||||
|
For the Year Ended December 31, 2011
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
(156
|
)
|
|
$
|
867
|
|
|
$
|
72
|
|
|
$
|
—
|
|
|
$
|
783
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchase of property, plant and equipment
|
—
|
|
|
(217
|
)
|
|
(21
|
)
|
|
—
|
|
|
(238
|
)
|
|||||
Purchase of intangible assets
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Return of capital
|
—
|
|
|
10
|
|
|
(10
|
)
|
|
—
|
|
|
—
|
|
|||||
Investments in unconsolidated subsidiaries
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Proceeds from disposals of property, plant and equipment
|
—
|
|
|
2
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|||||
Issuance of related party notes receivable
|
—
|
|
|
(916
|
)
|
|
(39
|
)
|
|
955
|
|
|
—
|
|
|||||
Repayment of related party notes receivable
|
400
|
|
|
1,000
|
|
|
—
|
|
|
(1,400
|
)
|
|
—
|
|
|||||
Net cash (used in) provided by investing activities
|
398
|
|
|
(124
|
)
|
|
(69
|
)
|
|
(445
|
)
|
|
(240
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from issuance of related party debt
|
916
|
|
|
39
|
|
|
—
|
|
|
(955
|
)
|
|
—
|
|
|||||
Repayment of related party debt
|
(1,000
|
)
|
|
(400
|
)
|
|
—
|
|
|
1,400
|
|
|
—
|
|
|||||
Proceeds from issuance of senior unsecured notes
|
1,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
|||||
Repayment of senior unsecured notes
|
(400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(400
|
)
|
|||||
Repurchase of shares of common stock
|
(522
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(522
|
)
|
|||||
Dividends paid
|
(251
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(251
|
)
|
|||||
Proceeds from stock options exercised
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20
|
|
|||||
Excess tax benefit on stock-based compensation
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||
Deferred financing charges paid
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|||||
Other, net
|
1
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Net cash (used in) provided by financing activities
|
(242
|
)
|
|
(355
|
)
|
|
—
|
|
|
445
|
|
|
(152
|
)
|
|||||
Cash and cash equivalents — net change from:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating, investing and financing activities
|
—
|
|
|
388
|
|
|
3
|
|
|
—
|
|
|
391
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
1
|
|
|
(6
|
)
|
|
—
|
|
|
(5
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
—
|
|
|
252
|
|
|
63
|
|
|
—
|
|
|
315
|
|
|||||
Cash and cash equivalents at end of year
|
$
|
—
|
|
|
$
|
641
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
701
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
For the Year Ended December 31,
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
||||||||
2013
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales
|
$
|
1,380
|
|
|
$
|
1,611
|
|
|
$
|
1,543
|
|
|
$
|
1,463
|
|
Gross profit
|
790
|
|
|
935
|
|
|
893
|
|
|
880
|
|
||||
Net income
|
106
|
|
|
155
|
|
|
207
|
|
|
156
|
|
||||
Earnings per common share — basic
|
$
|
0.52
|
|
|
$
|
0.76
|
|
|
$
|
1.02
|
|
|
$
|
0.78
|
|
Earnings per common share — diluted
|
0.51
|
|
|
0.76
|
|
|
1.01
|
|
|
0.78
|
|
||||
Dividend declared per share
|
0.38
|
|
|
0.38
|
|
|
0.38
|
|
|
0.38
|
|
||||
Common stock price
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
46.95
|
|
|
$
|
50.36
|
|
|
$
|
48.29
|
|
|
$
|
49.17
|
|
Low
|
42.47
|
|
|
44.98
|
|
|
44.31
|
|
|
43.38
|
|
||||
2012
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales
|
$
|
1,362
|
|
|
$
|
1,621
|
|
|
$
|
1,528
|
|
|
$
|
1,484
|
|
Gross profit
|
778
|
|
|
936
|
|
|
902
|
|
|
879
|
|
||||
Net income
|
102
|
|
|
178
|
|
|
179
|
|
|
170
|
|
||||
Earnings per common share — basic
|
$
|
0.48
|
|
|
$
|
0.84
|
|
|
$
|
0.85
|
|
|
$
|
0.82
|
|
Earnings per common share — diluted
|
0.48
|
|
|
0.83
|
|
|
0.84
|
|
|
0.81
|
|
||||
Dividend declared per share
|
0.34
|
|
|
0.34
|
|
|
0.34
|
|
|
0.34
|
|
||||
Common stock price
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
40.21
|
|
|
$
|
43.75
|
|
|
$
|
45.60
|
|
|
$
|
45.91
|
|
Low
|
37.33
|
|
|
39.14
|
|
|
43.23
|
|
|
42.60
|
|
•
|
Consolidated Statements of Income for the
years ended December 31, 2013, 2012 and 2011
|
•
|
Consolidated Statements of Comprehensive Income for the
years ended December 31, 2013, 2012 and 2011
|
•
|
Consolidated Balance Sheets as of
December 31, 2013 and 2012
|
•
|
Consolidated Statements of Cash Flows for the
years ended December 31, 2013, 2012 and 2011
|
•
|
Consolidated Statements of Changes in Stockholders' Equity for the
years ended December 31, 2013, 2012 and 2011
|
•
|
Notes to Consolidated Financial Statements for the
years ended December 31, 2013, 2012 and 2011
|
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 Company's 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 Company's Current Report on Form 8-K (filed on May 12, 2008) and incorporated herein by reference).
|
3.2
|
Certificate of Amendment to Amended and Restated Certificate of Incorporation of Dr Pepper Snapple Group, Inc. effective as of May 17, 2012 (filed as Exhibit 3.2 to the Company's Quarterly Report on Form 10-Q (filed July 26, 2012) and incorporated herein by reference).
|
3.3
|
Amended and Restated By-Laws of Dr Pepper Snapple Group, Inc. effective as of May 17, 2012 (filed as Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q (filed July 26, 2012) 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 Company's 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 Company's 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 Company's 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 Company's 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 Company's 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 Company's 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 Company's 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 Company's Annual Report on Form 10-K (filed on March 26, 2009) and incorporated herein by reference).
|
4.9
|
Third Supplemental Indenture, dated 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 Company's Quarterly Report on Form 10-Q (filed 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 Company's 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 Company's Current Report on Form 8-K (filed on December 23, 2009) and incorporated herein by reference).
|
4.12
|
2.35% Senior Notes due 2012 (in global form), dated December 21, 2009, in the principal amount of $450 million (filed as Exhibit 4.4 to the Company's Current Report on Form 8-K (filed on December 23, 2009) and incorporated herein by reference.
|
4.13
|
Second Supplemental Indenture, dated as of January 11, 2011, among Dr Pepper Snapple Group, Inc., the guarantors party thereto and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K (filed on January 11, 2011) and incorporated herein by reference).
|
4.14
|
2.90% Senior Note due 2016 (in global form), dated January 11, 2011, in the principal amount of $500 million (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K (filed on January 11, 2011) and incorporated herein by reference).
|
4.15
|
Third Supplemental Indenture, dated as of November 15, 2011, among Dr Pepper Snapple Group, Inc., the guarantors party thereto and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K (filed on November 15, 2011) and incorporated herein by reference).
|
4.16
|
2.60% Senior Note due 2019 (in global form), dated November 15, 2011, in the principal amount of $250 million (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K (filed on November 15, 2011) and incorporated herein by reference).
|
4.17
|
3.20% Senior Note due 2021 (in global form), dated November 15, 2011, in the principal amount of $250 million (filed as Exhibit 4.3 to the Company's Current Report on Form 8-K (filed on November 15, 2011) and incorporated herein by reference).
|
4.18
|
Fourth Supplemental Indenture, dated as of November 20, 2012, among Dr Pepper Snapple Group, Inc., the guarantors party thereto and Wells Fargo Bank, N.A., as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K (filed on November 20, 2012) and incorporated herein by reference).
|
4.19
|
2.00% Senior Note due 2020 (in global form), dated November 20, 2012, in the principal amount of $250 million (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K (filed on November 20, 2012) and incorporated herein by reference).
|
4.20
|
2.70% Senior Note due 2022 (in global form), dated November 20, 2012, in the principal amount of $250 million (filed as Exhibit 4.3 to the Company's Current Report on Form 8-K (filed on November 20, 2012) 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 (initially filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K (filed on May 5, 2008), refiled as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q (filed on May 6, 2010) solely for the purpose of including previously omitted exhibits and incorporated herein by reference).
|
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 (initially filed as Exhibit 10.2 to the Company's Current Report on Form 8-K (initially filed on May 5, 2008), refiled as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q (filed on May 6, 2010) solely for the purpose of including previously omitted exhibits 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 (initially filed as Exhibit 10.3 to the Company's Current Report on Form 8-K (filed on May 5, 2008), refiled as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q (filed on May 6, 2010) solely for the purpose of including previously omitted exhibits and incorporated herein by reference).
|
10.4
|
Agreement dated April 8, 2009, between The American Bottling Company and CROWN Cork & Seal USA, Inc. (filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q (filed on May 13, 2009).
|
10.5
|
Form of Dr Pepper License Agreement for Bottles, Cans and Pre-mix (filed as Exhibit 10.9 to Amendment No. 2 to the Company's Registration Statement on Form 10 (filed on February 12, 2008) and incorporated herein by reference).
|
10.6
|
Form of Dr Pepper Fountain Concentrate Agreement (filed as Exhibit 10.10 to Amendment No. 3 to the Company's Registration Statement on Form 10 (filed on March 20, 2008) and incorporated herein by reference).
|
10.7
|
Executive Employment Agreement, dated as of October 15, 2007, between CBI Holdings Inc. (now known as DPS Holdings Inc.) and Larry D. Young (filed as Exhibit 10.11 to Amendment No. 2 to the Company's Registration Statement on Form 10 (filed on February 12, 2008) and incorporated herein by reference).
|
10.8
|
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 Company's Current Report on Form 8-K (filed on February 18, 2009) and incorporated herein by reference).
|
10.9
|
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 Company's Quarterly Report on Form 10-Q (filed on August 13, 2009) and incorporated herein by reference).
|
10.10
|
Letter Agreement, effective as of November 23, 2008, between Dr Pepper Snapple Group, Inc. and James J. Johnston (filed as Exhibit 10.20 to the Company's Form 10-K (filed on February 26, 2010) and incorporated herein by reference).
|
10.11
|
Executive Employment Agreement, dated as of October 15, 2007, between CBI Holdings Inc. (now known as DPS Holdings Inc.) and Lawrence Solomon (filed as Exhibit 10.23 to the Company's Form 10-K (filed on February 26, 2010) and incorporated herein by reference).
|
10.12
|
Letter Agreement, effective as of November 23, 2008, between Dr Pepper Snapple Group, Inc. and Rodger L. Collins (filed as Exhibit 10.24 to the Company's Form 10-K (filed on February 26, 2010) and incorporated herein by reference).
|
10.13
|
Letter Agreement, effective as of April 1, 2010, between Dr Pepper Snapple Group, Inc. and Martin M. Ellen (filed as Exhibit 10.25 to the Company's Form 10-K (filed on February 26, 2010) and incorporated herein by reference).
|
10.14
|
Dr Pepper Snapple Group, Inc. Omnibus Stock Incentive Plan of 2008 (filed as Exhibit 10.2 to the Company's Current Report on Form 8-K (filed on May 12, 2008) and incorporated herein by reference).
|
10.15
|
Dr Pepper Snapple Group, Inc. Employee Stock Purchase Plan (filed as Exhibit 10.4 to the Company's Current Report on Form 8-K (filed on May 12, 2008) and incorporated herein by reference).
|
10.16
|
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 Company's Current Report on Form 8-K (filed May 21, 2009) and incorporated herein by reference).
|
10.17
|
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 Company's Current Report on Form 8-K (filed May 21, 2009) and incorporated herein by reference).
|
10.18
|
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 Company's Registration Statement on Form 10 (filed on April 16, 2008) and incorporated herein by reference).
|
10.19
|
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 Company's Current Report on Form 8-K (filed on May 12, 2008) and incorporated herein by reference).
|
10.20
|
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 Company's Quarterly Report on Form 10-Q (filed on November 13, 2008) and incorporated herein by reference).
|
10.21
|
Dr Pepper Snapple Group, Inc. Change in Control Severance Plan adopted on February 11, 2009 (filed as Exhibit 99.1 to the Company's Current Report on Form 8-K (filed February 18, 2009) and incorporated herein by reference).
|
10.22
|
First Amendment to the Dr Pepper Snapple Group, Inc. Change in Control Severance Plan, effective as of February 24, 2010 (filed as Exhibit 10.40 to the Company's Form 10-K (filed on February 26, 2010) and incorporated herein by reference).
|
10.23
|
Letter Agreement, dated December 7, 2009, between Dr Pepper Snapple Group, Inc. and PepsiCo, Inc. (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K (filed on December 8, 2009) and incorporated herein by reference).
|
10.24
|
Letter Agreement, dated June 7, 2010, between Dr Pepper/Seven Up, Inc. and The Coca-Cola Company (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K (filed on June 7, 2010) and incorporated herein by reference).
|
10.25
|
Amendment No. 1 to Amended and Restated Credit Agreement, dated as of November 4, 2010, by and among the Loan Parties and the Administrative Agent for itself and on behalf of the Lenders (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K (filed on November 8, 2010) and incorporated herein by reference).
|
10.26
|
Commercial Paper Dealer Agreement between Dr Pepper Snapple Group, Inc. and J.P. Morgan Securities LLC, dated as of December 10, 2010 (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K (filed on December 13, 2010) and incorporated herein by reference). In accordance with Instruction 2 to Item 601 of Regulation S-K, the Company has filed only one Dealer Agreement, as the other Dealer Agreements are substantially identical in all material respects except as to the parties thereto and the notice provisions.
|
10.27
|
Credit Agreement, dated as of September 25, 2012, among the Company, the Lenders and Issuing Banks party thereto; JPMorgan Chase Bank, N.A., as Administrative Agent; Bank of America, N.A. and Deutsche Bank Securities Inc., as Syndication Agents, and Branch Banking and Trust Company, Credit Suisse AG, Cayman Islands Branch, HSBC Bank USA, N.A., Morgan Senior Funding, Inc., UBS Securities LLC and U.S. Bank National Association, as Co-Documentation Agents (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K (filed on September 26, 2012) and incorporated herein by reference).
|
10.28
|
Underwriting Agreement dated November 13, 2012, among J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as joint book-running managers and on behalf of the other underwriters named therein, and Dr Pepper Snapple Group, Inc. (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K (filed on November 14, 2012) and incorporated herein by reference.
|
10.29*†
|
Agreement dated July 22, 2013, among The American Bottling Company, Mott's LLP and CROWN Cork & Seal USA, Inc., being refiled to replace in its entirety the Agreement originally filed on July 24, 2013 as Exhibit 10.1 to Form 10-Q for the quarter ending June 30, 2013.
|
10.30
|
First Amendment to Omnibus Stock Incentive Plan of 2009 approved by the Board of Directors and the Compensation Committee of the Board of Directors of Dr Pepper Snapple Group, Inc. on September 18, 2013 filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q (filed on October 24, 2013) and incorporated herein by reference.
|
10.31
|
Non-Employee Director Deferral Plan approved by the Board of Directors and the Compensation Committee of the Board of Directors of Dr Pepper Snapple Group, Inc. on September 18, 2013 filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q (filed on October 24, 2013) and incorporated herein by this reference.
|
10.32*
|
Agreement, dated as of October 15, 2007, between CBI Holdings Inc. (now known as DPS Holdings Inc.) and Derry Hobson.
|
10.33*
|
Amendment to Employment Agreement, effective as of February 11, 2009, between DPS Holdings, Inc. and Derry Hobson.
|
12.1*
|
Computation of Ratio of Earnings to Fixed Charges.
|
14.1*
|
Dr Pepper Snapple Group, Inc. Code of Conduct approved by the Board of Directors on November 15, 2013.
|
18.1*
|
Preferability letter provided by Deloitte & Touche LLP, the Company's registered public accounting firm to change the measurement date in connection with the Company's annual goodwill impairment test.
|
21.1*
|
List of Subsidiaries (as of December 31, 2012)
|
23.1*
|
Consent of Deloitte and 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.
|
101*
|
The following financial information from Dr Pepper Snapple Group, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Income for the years ended December 31, 2013, 2012 and 2011, (ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2013, 2012 and 2011, (iii) Consolidated Balance Sheets as of December 31, 2013 and 2012, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011, (v) Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2013, 2012 and 2011, and (vi) the Notes to Audited Consolidated Financial Statements.
|
|
Dr Pepper Snapple Group, Inc.
|
||
|
|
|
|
|
By:
|
|
/s/ Martin M. Ellen
|
Date: February 19, 2014
|
|
Name:
|
Martin M. Ellen
|
|
|
Title:
|
Executive Vice President and Chief
Financial Officer
|
|
By:
|
|
/s/ Larry D. Young
|
Date: February 19, 2014
|
|
Name:
|
Larry D. Young
|
|
|
Title:
|
President, Chief Executive Officer and
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Martin M. Ellen
|
Date: February 19, 2014
|
|
Name:
|
Martin M. Ellen
|
|
|
Title:
|
Executive Vice President and Chief
Financial Officer |
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Angela A. Stephens
|
Date: February 19, 2014
|
|
Name:
|
Angela A. Stephens
|
|
|
Title:
|
Senior Vice President and Controller
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Wayne R. Sanders
|
Date: February 19, 2014
|
|
Name:
|
Wayne R. Sanders
|
|
|
Title:
|
Chairman
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ John L. Adams
|
Date: February 19, 2014
|
|
Name:
|
John L. Adams
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ David E. Alexander
|
Date: February 19, 2014
|
|
Name:
|
David E. Alexander
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Pamela H. Patsley
|
Date: February 19, 2014
|
|
Name:
|
Pamela H. Patsley
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Joyce M. Roché
|
Date: February 19, 2014
|
|
Name:
|
Joyce M. Roché
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Ronald G. Rogers
|
Date: February 19, 2014
|
|
Name:
|
Ronald G. Rogers
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Jack L. Stahl
|
Date: February 19, 2014
|
|
Name:
|
Jack L. Stahl
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ M. Anne Szostak
|
Date: February 19, 2014
|
|
Name:
|
M. Anne Szostak
|
|
|
Title:
|
Director
|
TERMS
|
||
Purchaser:
|
The American Bottling Company, a Delaware corporation and Mott’s LLP, a Delaware limited liability company, both with a principal place of business at 5301 Legacy Drive, Plano, Texas 75024.
Purchaser may also order Goods on behalf of their respective affiliates or third party co-packers, but they shall not be deemed third party beneficiaries.
|
|
Supplier:
|
CROWN Cork & Seal USA, Inc., a Delaware corporation having its principal place of business at One Crown Way, Philadelphia, PA 19154-4599.
|
|
Term:
|
Effective Date:
|
January 1, 2014
|
End Date:
|
December 31, 2018
|
|
Goods:
|
Aluminum 12-ounce (202/212 x 413), 8-ounce (202/212 x 307) and 16-ounce (202/211 x 603) beverage cans and ends (“Goods”) as listed on
Exhibit B
, to be delivered to the Delivery Locations as listed in
Exhibit B
,
and printed with up to six color decoration. End units supplied shall be 202 diameter standard “LOE” (large opening end) or Supplier’s 202 diameter “Super-Ends®”. Purchaser will purchase (***) of its Goods requirements for the Delivery Locations listed in
Exhibit B.
If existing volume is moved to different filling location than noted in
Exhibit B
(whether owned by Purchaser, an Affiliate or a co-packer) then Purchaser will ensure that Supplier will maintain that volume during the Term.
|
|
Delivery Locations:
|
Delivery Locations are as specified in the Price List on
Exhibit B
.
|
|
Specifications:
|
The Goods must conform to the drawings attached as
Exhibit C
as well as the Purchaser’s Performance Specifications and Purchaser’s Environmental Policy and Biological Specifications attached hereto and incorporated herein as
Exhibit C
. Any change to the specifications or drawings must be approved by Purchaser.
|
Price:
|
Prices listed on
Exhibit B
are effective (***). Prices are delivered including standard inks with up to 6-color graphics. A pricing table for all sizes of Goods, including Delivery Locations and Prices is set forth on
Exhibit B
.
There shall be an additional charge for color tabs of (***) per thousand units (MEA). The minimum order quantity for color tabs is (***) units.
There shall be an additional charge for white basecoat of (***)/MEA.
Throughout the Term of this Agreement, Prices shall be adjusted based on the Price Adjustment formula set forth below which shall include the (***) metal conversion factors as outlined in the following chart:
|
|
|
|
The invoice Price for Goods shall be adjusted only to reflect changes (increases or decreases) in: (1) aluminum ingot costs affecting the pro-forma price calculation; and (2) conversion costs with a baseline price as set forth in
Exhibit B
.
Aluminum ingot costs to set up Pro-forma pricing:
The ingot component of the price adjustment factor is based on (***)
(***) pricing plus a (***) published settlement prices are used for the purposes of determining the aluminum ingot component of can and end prices and the (***) will be used as the reference for (***).
Monthly aluminum prices (actual monthly price) will be based on the market price for aluminum ingot. The market price is defined as the (***) for (***) on the (***) for the (***) of purchase. To calculate the actual (***) price for (***), the (***) prices for each business day in a (***) will be added to the (***) of the
(***) for each business day in the month as reported by (***).
|
|
|
|
|
Price (continued)
:
|
The can/end pro-forma Price shall be adjusted the first day of each calendar quarter (January, April, July, and October), based on the (***) and
(***) price (***) for the middle-month (***) as set forth in the table below (“(***)”). Supplier shall communicate the (***) to Purchaser on the (***) day of the (***) is effective.
|
|
|
|
Aluminum Ingot Price change mechanism
:
For every (***) per pound increase/decrease of (***) cost, the Price shall change by (***) difference between the middle-month of (***) and the middle-month of the (***).
Example of invoice Price adjustment for Aluminum Ingot Cost:
Assuming (***) 12oz can ex-works price is (***)MEA at (***) of (***)/lb. If (***) middle-month average price is (***)/lb., the difference would be (***)/lb., then (***) (can (***) reference weight (***)/MEA) = (***)/MEA. Then the aluminum portion of the can cost for the period of (***) would (***) by (***)/MEA or be (***)/MEA. ((***)/MEA- (***)/MEA)
Monthly Reconciliation of Aluminum Ingot Cost:
|
|
|
|
|
|
|
|
For example:
Assuming (***) pro-forma pricing for 12oz cans at (***)/MEA ((***)) and an (***)/lb. If (***) daily average price is (***)/lb., the difference would be
(***)lb., then (***) (can (***) weight (***)/MEA)
= (***)/MEA. If April total purchased volume is (***) units, then (***) units x (***)/MEA = (***); which means Supplier will pay Purchaser a reconciliation amount equal to (***) for the month of (***).
Conversion Costs (including ingot can/end conversion):
The conversion cost shall remain firm from (***).
Beginning (***) and for the remainder of the Term of the Agreement,
the conversion cost as stated in
Exhibit B
may be adjusted (***) on
(***) of each year. The conversion Prices for each (***) will be the basis for Price adjustments for the next (***).
The adjustment will reflect (***) of the (***).
The first such adjustment shall
be on (***) based on the (***) average, (***) change
in the (***), compared to (***) and subsequent
adjustments shall be made each (***) thereafter based on the same
(***) average comparisons.
Example:
Assuming (***) for (***) = (***) and (***) for (***) = (***)
Increase in the (***) = ((***))/(***) = (***)
If the (***) conversion cost for 12oz can is (***)/MEA, (***) x (***) x (***)=(***), then the conversion cost increase for (***) would be (***)/MEA.
Except for the Price adjustments set forth above, there will be no other Price adjustments to the ex-works Price.
|
Freight: FSC – Fuel Surcharge
|
Supplier’s freight by can size as stated in
Exhibit B
can be adjusted (***) to reflect changes in fuel surcharge (FSC) only as set forth below. The baseline for the FSC adjustment is (***) as shown in
Exhibit B
.
FSC adjustment mechanism
:
Fuel prices and surcharges will be reviewed (***) and calculated based on
the (***)as published on the (***). The FSC that Supplier charges Purchaser will be based on the table set forth in
Exhibit D.
|
|
|
|
|
Freight: FSC – Fuel Surcharge
|
The agreed base fuel surcharge is (***). The surcharge rate per mile is multiplied by the (***) from the (***) point to the (***) and divided by the cans/ends quantity shipped to each (***). Agreed mileage is set forth in
Exhibit D
. The FSC rate will change once there has been a cumulative change of (***) FSC per (***) using the base (***) per mile. The FSC rate will only be adjusted when the rate is at (***) and any (***) increment below (***) or above (***).
Quarterly fuel surcharge adjustment schedule is as follows:
|
|
|
|
For example (12oz Cans) as set for in
Exhibit D
:
For 12oz cans, the baseline of (***) per mile as stated in
Exhibit D
equates to (***) cans. If the FSC average of (***) is (***) and the weighted average miles for all 12 oz cans from (***) locations to (***) Locations is (***) miles as stated in
Exhibit D
, t
hen the total FSC cost is (***). In order to calculate the FSC cost per (***), the total
FSC cost is divided by the weighted average number of units per (***) for the 12 oz cans (***). Then the freight rate as set forth in
Exhibit B
should be adjusted by (***) per thousand (***) for (***), through (***).
Customer Pick-Up (CPU):
Purchaser reserves the right to provide and pay for freight between the Supplier facilities (plants or warehouses) and Purchaser Delivery Locations. If Purchaser elects to provide and pay for freight between the Supplier facilities and Purchaser Delivery Locations, then all Prices are ex-works Supplier facilities and Supplier will provide CPU rates as set forth on
Exhibit E
which are equal to its cost to deliver the Goods by commercial carrier. The CPU rate will be adjusted quarterly based on FSC change in accordance with the table in
Exhibit D
. The current CPU rate and Supplier’s primary and secondary supplying plants are set forth in
Exhibit E
.
All invoices will be issued at Delivered pricing, if there are Purchaser plant locations that pick up Goods at Supplier locations or Warehouses then Supplier will reconcile all customer pick ups and issue a credit by the10th business day of the next month.
Others:
Beginning (***), the previous year’s delivered freight and CPU freight rates will be reviewed (***) and adjusted on (***) of each (***). For example on the delivered freight in (***) if the rate went up (***) then the adjustment would be on the then current rate of (***) weighted freight costs on 12 oz can in (***). In (***), the base rate that would adjust up or down would be (***).
If Purchaser wishes to change or add to the Delivery Locations, the parties shall negotiate and agree on applicable freight costs and fuel surcharges applicable to any revised or added Delivery Location.
Supplier reserves the right to recalculate the freight component of the Goods Price if Purchaser relocates the Delivery Locations for substantial quantities of Goods or establishes new delivery locations.
|
|
|
|
|
Payment Terms:
|
Purchaser shall pay Supplier for Goods hereunder, net (***) days from shipment date for (***); and net (***) days from shipment date for (***); and (***) (net (***) days) from shipment date for (***).
|
(***)
:
|
The parties agree that during the Term of this Agreement,
(***)
shall, in its sole discretion, have the ability to
(***)
with aluminum suppliers or
(***)
, subject to the processes and terms and conditions that the parties may agree from time to time.
|
(***)
:
|
(***) shall have the (***) for all or a portion of its Goods requirements, so long as (i) there are no (***) (ii) (***) would not (***) to its (***) suppliers. (***) shall advise (***) at least (***) in advance of the date that it proposes to (***) shall notify (***) in writing (via a document signed by (***) General Counsel) whether its (***) will be affected within (***) after it receives notice from (***). If within such (***) does not advise (***) that its (***) will be affected, (***) finalize the (***). If (***) does not finalize its (***) shall continue to (***) shall begin again the procedure above (***) provided to (***) by (***) shall be subject to (***) normal qualification and disqualification procedures.
|
(***):
|
If (***) sells Goods in the (***) to another (***) (taking into consideration (***) net of any (***) made by (***) and the (***))(***), then (***) shall, by written notice, inform (***) of the (***) and (***) shall be entitled to (***) upon the written request of (***). If (***), in good faith, does not inform (***) and subsequently it is determined that (***) under the terms of this Agreement, then (***) shall receive a (***), calculated from the (***) went into effect for the (***). This shall be (***) with regard to (***) under this Agreement. The (***) and (***) supplied hereunder are not subject (***).
|
Warehousing/Storage:
|
To the extent that the Supplier needs to warehouse Goods at a third party facility, the Supplier will bear all cost.
|
(***)
:
|
After
(***)
, in the event
(***)
for (***) of (***), at a (***) then (***) shall notify (***) of (***) and shall provide written evidence thereof, without including the (***) then shall have (***) to advise (***) whether or not it (***). If (***) shall have the right, but not the obligation, (***). Should (***), it shall (***).
|
|
|
|
|
Competitive Technology:
|
Supplier and Purchaser agree that it is of primary importance to Purchaser and Supplier to remain competitive in their respective industries. Should new technology become available to Supplier during the Term that would enable Supplier to pass along to Purchaser a significant competitive advantage in the relevant industry, as long as Supplier’s access to such technology is not restricted by law or otherwise contractually restricted, Supplier shall advise Purchaser, or Purchaser shall advise Supplier, of such technology and the parties shall discuss the possibility of implementation of such technology, including issues relating to timing of implementation, cost sharing and cost savings. To the extent that the parties cannot reach agreement as to timing of implementation, cost sharing and cost savings within (***) of one party’s notice to the other regarding such technology, Purchaser may give Supplier (***) written notice of (***), sent not later than (***). To the extent that Supplier is restricted by law or contractually from offering said technology to Purchaser, Supplier must notify Purchaser within (***) days of Purchaser's notification to Supplier of such technology after which time, Purchaser is (***) upon (***) written notice to Supplier and (***).
|
Inventory Management
|
Supplier must ensure that at all times it will manufacture sufficient stocks of Goods to satisfy all orders which may be submitted by Purchaser in accordance with the terms and conditions of this Agreement. Purchaser shall supply Supplier with a rolling 12 month forecast of Goods requirements to allow Supplier to reasonably plan and schedule its production resources. Such forecast shall be for planning purposes only and shall not be binding on Purchaser. The forecast shall be refreshed the first week of every month. Purchaser shall advise Supplier of or provide Supplier with the correct and current artwork for the Goods ordered by Purchaser. In all events, Purchaser shall be solely responsible for all forecasts and ordered Goods in respect to current copy, artwork and content. Supplier shall ship to the Purchaser any Goods ordered by Purchaser with the most current artwork. Supplier shall manufacture and supply Goods as ordered by the Purchaser(s) and at Supplier’s discretion it may manufacture Goods to build inventory to meet Purchaser’s forecast needs. Supplier shall limit forecast inventory to an amount equal to no more than (***) months expected usage based upon the immediately foregoing (***) months order submitted by Purchaser. Any inventory build in excess of (***) months requires Purchaser’s prior written approval. If Purchaser has provided Supplier with the most current artwork and Supplier prints using out of date or incorrect artwork, Supplier shall be responsible for such Goods.
|
Forecast and slow moving Inventory:
|
The parties agree to work together to mitigate forecast issues and to continually improve forecast accuracy.
Upon written agreement between the parties, Supplier may invoice Purchaser for slow moving inventories of Goods. Should Supplier have inventory of Goods beyond (***) of the production date, Supplier may invoice Purchaser for the production of such Goods, provided that the Goods were ordered by Purchaser through forecasting or purchase orders.
|
Lead Time & Minimum Run Quantity:
|
Lead time and minimum run quantity is as listed in
Exhibit F
. Purchaser will submit release schedules weekly from each Delivery Location to Supplier’s plant (***) for releases the following week.
|
Business Continuity Plan:
|
If any of the Supplier plants encounter difficulties meeting Purchaser’s needs for the Goods required by this Agreement, Supplier will make commercially reasonable efforts to source such Goods from other facilities of Supplier. The obligations of Supplier in the preceding sentence shall not apply in the case of difficulties relating to Force Majeure. Supplier will make commercially reasonable efforts to resume production at the supply facility affected by the Force Majeure event under the terms and conditions of this Agreement in a timely manner.
|
|
|
|
|
Graphics and Artwork:
|
(***).
Supplier will send samples for each color on the can, which must be approved by Purchaser.
|
(***) Savings:
|
The Parties will use commercially reasonable efforts to achieve costs savings and will meet and discuss on a periodic basis potential cost savings initiatives. Any cost savings initiative that would result in a deviation from the specifications/drawings, reduce quality or similarly impact Supplier’s ability to meet all terms and conditions of this Agreement must be approved in writing by Purchaser.
Supplier agrees to reduce (***)/MEA from the (***) Goods Price effective (***). Supplier agrees to (***) through the (***). For example, if the delivered Price in (***) is (***) and the (***) price change is an (***) then the (***) price will be (***)). In (***),(***) will be the base price to be used with the price change mechanism.
|
(***):
|
The parties agree that as of (***), there will be a (***) each year during the Term, payable with respect to purchases of (***) aluminum cans shipped to (***) from (***) Such (***) will be paid quarterly to (***), within (***) after each (***) so long as (***) purchases a minimum of (***) of its annual (***) can requirements from (***) will be based on the quantity of cans purchased by (***) from (***).
|
Force Majeure:
|
Neither party will be liable for any delay or failure to perform hereunder (other than obligations of payment) to the extent caused by natural disaster, fire, explosion, war, terrorism, government actions, or other circumstances beyond its reasonable control and without its fault or negligence. The affected party will immedately notify the other party and must use reasonable commercial efforts to resume performance. If the period continues for more than (***) consecutive days, and results from an event that affects Supplier’s performance, Purchaser may receive supply of Goods from alternate sources for the duration of the event. If such event continues for more than (***).
|
Dunnage Return Program:
|
Pallets, tier sheets and top frames (collectively "dunnage") are the property of Supplier. Dunnage will not be charged to Purchaser and Supplier will arrange pick up and loading of all dunnage at Supplier's own cost. Purchaser shall return all reusable dunnage to Supplier in good condition, normal wear and tear excepted. If dunnage is returned damaged and/or in unusable condition, Purchaser will work to correct the situation and reimburse Supplier for the cost. Supplier will supply documentation of the damage to the dunnage to Purchaser for Purchaser’s approval. Dunnage cost per plastic pallet (***); per plastic divider sheet (***); and plastic top frame (***).
|
Other Terms:
|
Promotional materials:
Supplier acknowledges that Purchaser stipulates that Purchaser’s Direct Store Delivery (DSD) business unit does not change SAP material numbers to accommodate for changes due to promotional items and that promotional items are not reflected in Purchaser’s twelve month rolling forecast, Supplier shall receive from Purchaser a written communication via e-mail from Purchaser’s Manager, Packaging Logistics or centralized planning describing Purchaser’s promotion campaigns (dates, location and quantities), which shall be separate from and in addition or substitution of Purchaser’s twelve month rolling forecast. Purchaser’s promotional notification system is called “Dr Orders”. Supplier must ensure that at all times it will manufacture sufficient stocks of Goods to satisfy all promotional orders which may be submitted by Purchaser. Supplier shall manufacture and supply Goods as ordered by the Purchaser and shall limit forecast inventory to an amount equal to the purchase order. In no event, however, shall Purchaser have any obligation or responsibility for any Goods that Supplier manufactures in excess of the promotional quantity stated in Purchaser’s purchase order or release.
Supplier is required to submit five printed samples from each press run (promotional and new stock graphics) to Purchaser’s Packaging Logistics Manager.
Technical Services:
Supplier shall provide a reasonable amount of the following technical services to Purchaser (***):
Seamer machine training
Seam service training
Line/seamer Audits
Can handling services at the Purchaser’s plant and Purchaser’s warehouse
Filtec MSEs (machine setting evaluation)
Cradle to Grave Audits (complete audit from Supplier's production to delivery to Purchaser's Delivery Location)
Off-site Seamer Training
Lean 6-Sigma Event Participation
|
Other Terms
|
Supplier agrees to provide the following reports to Purchaser:
Shipments Reports (by month and by Delivery Location)
Inventory Reports (on hand, by month)
Quality Reports (defect rate by month, by Delivery Location)
End incising table:
The current Purchaser end incising requirements showing deposit requirements by certain states are included in
Exhibit G
.
|
|
|
GENERAL
|
|
Attachments:
|
This Schedule of Terms outlines the terms upon which Supplier agrees with Purchaser(s) to provide certain specified Goods, and is further subject to and incorporates the terms and conditions of the Attachments listed below (the “
Attachments
”):
Exhibit A: Terms of Business between Supplier and Purchasers
Exhibit B: Goods, Prices and Delivery Locations
Exhibit C: Performance Specifications and Drawings
Exhibit D: Fuel Surcharge
Exhibit E: Current CPU rate and Supplier’s locations
Exhibit F: Lead Time and Minimum Run Quantity
Exhibit G: End Incising Table
|
|
|
|
|
Confidentiality:
|
Neither party will disclose the existence or any terms of this letter and Schedule of Terms to any third party except (1) to its legal, financial and accounting advisers who also agree to preserve such confidentiality, (2) as may be required by law, or (3) with the other’s prior written consent.
|
Entire Agreement:
|
This Schedule of Terms and the Exhibits/Attachments are the complete agreement of the parties, and supersede all prior communications and understandings, regarding these matters. If there is a conflict between the terms of this Schedule of Terms and the Attachments, this Schedule of Terms will control.
|
ACCEPTED AND AGREED:
Purchaser(s):
The American Bottling Company
Mott’s LLP
By:
/s/ Derry Hobson
Name: Derry Hobson
Title: EVP Supply Chain
Date:7-22-2013
Address for Legal Notices:
Dr Pepper Snapple Group
55 Hunter Lane
Elmsford, New York 10523
Attn: Asst. General Counsel
Fax: 914-846-2368
Address for Business Notices:
Dr Pepper Snapple Group
5301 Legacy Drive
Plano Texas 75024
Attn: Vice President, Supply Chain Procurement
Fax: 972-673-6922
|
ACCEPTED AND AGREED:
Supplier:
CROWN Cork & Seal USA, Inc.
By:
/s/ Timothy J. Lorge
Name: Timothy J. Lorge
Title: VP of Sales & Marketing
Date:7-19-2013
Address for Legal Notices:
CROWN Cork & Seal USA, Inc.
One Crown Way
Philadelphia, PA19154-4599
Fax: 215-698-6061
Attn: General Counsel
Address for Business Notices:
CROWN Cork & Seal USA, Inc.
One Crown Way
Philadelphia, PA19154-4599
Fax: 215-856-5568
Attn: Timothy Lorge, VP Sales and Marketing, Crown Beverage Packaging USA
|
▪
|
Facility Audits
. Allow us (together with our representatives) to audit your manufacturing facilities upon reasonable advance notice and during normal business hours to verify compliance with this Agreement; provided you receive reasonable assurances of confidentiality from our representatives and reasonable advance notice. We acknowledge that we are responsible for any unauthorized disclosure or use of your Confidential Information by our representatives.
|
▪
|
Technical Support
. Provide information and assistance to identify and resolve issues relating to the Goods, including:
|
▪
|
Technical support personnel fluent in English.
|
▪
|
Use of laboratories in the U.S. or, as reasonably requested, where Purchaser is located.
|
▪
|
Full cooperation with us (or independent third parties at our request) regarding product performance and regulatory issues, including in making any required disclosures to governmental agencies or the public.
|
▪
|
Information, assistance or a plan of action within 24 hours of our request. If you do not assist us within such period, we may (at your cost) obtain such assistance from a third party.
|
▪
|
Recalls
. If any quality or technical difficulties with any of the Goods are discovered or the Goods otherwise fail to comply with the warranties or other provisions of this Agreement, you agree to:
|
▪
|
Immediately cease distribution, recall and/or withdraw such Goods and their packaging from the territory or subsequent purchasers thereof, and
|
▪
|
In addition to the costs described in the “Failure to Deliver Goods” section above, (***)
|
▪
|
Senior Level Meetings
. Meet (through both parties senior management teams) to discuss opportunities for cost reduction, manufacturing issues, supplier competitiveness, raw material, delivery and freight costs and other issues.
|
▪
|
Supply Chain Improvement
. Establish and participate in supply chain improvement teams with us in order to review, optimize and reduce costs while improving efficiency of the supply chain.
|
▪
|
Account Rep
. Designate (and if necessary remove and replace) an acceptable account representative to manage our account and be available for contact all times on a 24-hour basis.
|
▪
|
Specifications, etc
. Conform to the Specifications, (***), are free from defects, and free from all liens and encumbrances when sold to us;
|
▪
|
Law
. Comply with all applicable Laws;
|
▪
|
Non-Infringement
. Do not infringe, violate or misappropriate any Intellectual Property of any third party;
|
▪
|
Human Consumption
. For Goods intended for human consumption (or ingredients therefore):
|
▪
|
Are fit for human consumption,
|
▪
|
Fully comply with all applicable food and health Laws (including for the Delivery Location),
|
▪
|
Are not contaminated in any way, and
|
▪
|
Do not comprise nor are derived from any genetically modified organisms or products.
|
▪
|
Bioterrorism Act
. You warrant that as applicable all of your facilities relating to any Goods shipped within or to the USA are and at all times during the Term shall remain properly registered under the U.S. Bioterrorism Preparedness and Response Act of 2002, as may be amended, and regulations pursuant to such act (the “
Bioterrorism Act
”), and you shall provide the applicable registration numbers of such facilities to us upon request along with evidence satisfactory to us of such registration (including, without limitation, copies of registration confirmations). You warrant that all necessary actions for the importation of the Goods into the USA under the Bioterrorism Act shall be taken by you in the manner and time periods required by the Bioterrorism Act. You warrant that you are in full compliance with all records maintenance requirements pursuant to the Bioterrorism Act as applicable.
|
▪
|
statutory workers' compensation as required by applicable state or provincial Law;
|
▪
|
Automobile Liability (Bodily Injury and Property Damage Liability) covering all owned, non-owned and hired automobiles with limits of at least $1,000,000 per occurrence; and
|
▪
|
Commercial General Liability, written on an occurrence basis, with limits of (***) per occurrence (such amount may be from combined CGL and Umbrella/Excess Liability). This insurance must (***), to the extent of the combined single limit of liability set forth above, and to the extent the personal injury or property damage insured by such general liability insurance arises from (***).
|
▪
|
The other party breaches any material term, representation, warranty or obligation hereunder, and does not cure such to the terminating party’s reasonable satisfaction within 30 days after notice, or if such breach cannot be cured within such 30 day period, the other party does not commence and diligently pursue such cure within such 30 day period.
|
▪
|
The other party enters Bankruptcy.
|
▪
|
The other party, or any transaction, transfers (or attempts to, purports to, or in effect does so transfer) any rights or obligations hereunder (or control thereof), except as expressly permitted herein.
|
▪
|
The other party (or its employee, contractor, officer or agent) has engaged in fraud, dishonesty or any other serious misconduct in the performance of this Agreement, in the terminating party’s reasonable opinion.
|
▪
|
Any court, tribunal or government agency requires, directly or indirectly, any modification of this Agreement or either party’s performance hereunder to the terminating party’s detriment.
|
▪
|
Such party elects to terminate under any other provision herein that expressly allows it to do so.
|
•
|
Of a party’s (and its Affiliates’) materials and information furnished to or accessed by the other party (or its Representatives) in connection with this Agreement (including, formulae, methods, know how, processes, designs, functional specifications and customer, product, employee, supplier, marketing, sales, financial, pricing, and other information concerning business operations, practices, activities and other information) identified as, or by its nature and content should reasonably be understood as, confidential or proprietary;
|
•
|
analyses, compilations, data or other documents that either party or its Representatives prepare that contain or are based upon any Confidential Information; and
|
•
|
terms of this Agreement.
|
•
|
Assignment/Change in Control
. Neither party may assign, transfer or delegate any of its rights or duties without the other party’s prior written consent, except that any Purchaser may assign or transfer this Agreement or any of its rights hereunder to any of its Affiliates or to any successor by merger or acquisition or any purchaser of all or substantially all of its stock or assets. Supplier must provide notice to Purchaser prior to (1) transferring or selling its stock or any other assets related to this Agreement to a third party, or (2) effecting a change in the majority of its management board. (***).
|
•
|
Binding Agreement
. The parties and their successors and permitted assigns will be bound and benefited.
|
•
|
Third Party Beneficiaries
. No one will be a third party beneficiary (except as the Indemnification Section provides).
|
•
|
Entire Agreement
. The terms of this Agreement shall be deemed accepted by Supplier at Supplier’s written agreement to be bound by these terms. This Agreement, the Schedules and any other documents expressly incorporated by reference constitute the parties’ entire understanding on these matters and supersede any prior understanding or agreement. To the extent of conflict, the provisions of the following documents will control in the following order: the Schedules, these Terms of Business and any other document (including any invoice, billing statement, confirmation, receipt, bill of lading or other similar document relating to any Goods rendered hereunder, subject to the “Ordering” section above). This Agreement and all provisions herein may not be waived, released, discharged, abandoned, or modified in any manner except by a subsequent written instrument duly executed by the parties hereto.
|
•
|
Titles and Headings
. Titles and headings to sections herein are inserted for the convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.
|
•
|
Definitions
.
|
•
|
Expenses
. Except as otherwise stated, the parties will bear their own costs and expenses.
|
•
|
Applicable Law
. The laws of New York will govern construction, interpretation and enforcement of this Agreement, without regard to principles of conflict or choice of law provisions. Each party consents to personal jurisdiction and venue in New York or Delaware federal or Delaware state courts.
|
•
|
Controlling Language
. This Agreement, the Schedules and any other documents expressly incorporated by reference shall be written and construed in the English language. In the event of a discrepancy between the English language version of the Agreement, the Schedules and any translated versions thereof, the English language version shall govern.
|
•
|
Notices
. Notices must be in writing and either (1) hand-delivered, or sent by (2) prepaid certified mail (return receipt requested), (3) nationwide overnight courier or (4) confirmed facsimile transmission, to the attention of the officer signing the Schedule in accordance with the address and facsimile information provided on the signature page herein. Notices will be effective upon receipt.
|
•
|
Parties’ Relationship
. The parties are independent contractors, and shall not be deemed an agent, partner, co-employer, joint employer or employee of the other. Neither party has any right or any other authority to enter into any contract or undertaking in the name of or for the account of the other or to assume or create any obligation of any kind, express or implied, on behalf of the other, nor will the acts or omissions of either party hereto create any liability for the other. Supplier shall have exclusive control and direction of Supplier’s employees engaged in performance hereunder. Supplier assumes full responsibility for the payment of local, state, provincial and federal payroll taxes or contributions or taxes for unemployment insurance, old age pensions, worker’s compensation, or other Social Security and related protection with respect to Supplier’s employees engaged in the performance hereunder and agrees to comply with applicable rules and regulations promulgated under such laws.
|
•
|
Severability
. If any one or more of the provisions contained in this Agreement, in whole or in part, is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the validity of any remaining provision or portion thereof, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had not been contained herein.
|
•
|
Survival
. The following provisions shall survive the termination or expiration of this Agreement: Warranties, Indemnification, Insurance, Intellectual Property, Confidentiality and any other provision of this Agreement or obligation of a party which expressly or by its nature or context arises at, or is intended to continue beyond termination or expiration, will so survive.
|
•
|
Setoff
. Each party may set off any amount owed to it by the other party against any amount it owes to the other party under this Agreement. The right to set off shall not apply to the obligations of any Affiliates of the parties herein.
|
•
|
Cumulative Remedies
. Except where specifically stated otherwise, a party’s rights and remedies under this Agreement or at law or in equity are, to the extent permitted by law, cumulative and not exclusive of any other right or remedy now or hereafter available under this Agreement or at law or in equity. Neither asserting a right nor employing a remedy shall preclude the concurrent assertion of any other right or employment of any other remedy.
|
•
|
Waiver
. The delay in or failure of any party hereto to enforce at any time any of the provisions of this Agreement shall in no way be construed to be a waiver of any such provision, or in any way to affect the validity of this Agreement or any part thereof or the right of any party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement shall be held to be a waiver of any other or subsequent breach.
|
•
|
Counterparts
. This Agreement may be executed in multiple counterparts, each of which will be deemed an original, but all of which will constitute one and the same Agreement. Signature pages from any counterpart may be appended to any other counterpart to assemble fully executed counterparts. Counterparts of this Agreement also may be exchanged via fax, and a faxed signature will be deemed an original for all purposes.
|
•
|
UN Convention on the International Sale of Goods
. The United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement.
|
•
|
LIMITATION OF LIABILITY
. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, SPECIAL, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES UNDER THIS AGREEMENT, EXCEPT WITH RESPECT TO THIRD PARTY CLAIMS IN ACCORDANCE WITH THE INDEMNIFICATION HEREIN.
|
ACCEPTED AND AGREED:
Purchaser(s):
The American Bottling Company
Mott’s LLP
(Purchaser Name)
By:
/s/ Derry Hobson
Name: Derry Hobson
Title: EVP Supply Chain
Date: 7-22-2013
Address for Legal Notices:
Dr Pepper Snapple Group, Inc.
55 Hunter Lane
Elmsford, NY 10523
Fax: 914-846-2368
Attn: Lisa M. Dalfonso, VP Assistant General Counsel
Address for Business Notices:
Dr Pepper Snapple Group, Inc.
5301 Legacy Drive
Plano, TX75024
Fax: 972-673-6922
Attn: Jason Miller, VP Supply Chain Procurement
|
ACCEPTED AND AGREED:
Supplier:
CROWN Cork & Seal USA, Inc.
(Supplier Name)
By:
/s/Timothy J. Lorge
Name: Timothy J. Lorge
Title: VP of Sales & Marketing
Date:7-19-2013
Address for Legal Notices:
CROWN Cork & Seal USA, Inc.
One Crown Way
Philadelphia, PA19154-4599
Fax: 215-698-6061
Attn: General Counsel
Address for Business Notices:
CROWN Cork & Seal USA, Inc.
One Crown Way
Philadelphia, PA19154-4599
Fax: 215-856-5568
Attn: Timothy Lorge, VP Sales and Marketing, Crown Beverage Packaging USA
|
Can Size
|
Ship To
|
Ship Form Plants
|
(***)
lbs/mea
|
(***)
lbs/mea
|
Aluminum
Costs ($/MEA)
|
Conversion
Cost ($/MEA)
|
Exworks Price ($/MEA)
|
Freight ($/MEA)
|
Delivered Price ($/MEA)
|
(***)
Baseline Fuel Surcharg ($/mile)
|
(***)
Baseline Fuel Surcharge ($/TH)
|
8 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
8 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
8 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
8 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
8 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
|
|
|
|
|
|
|
|
|
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
12 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
|
|
|
|
|
|
|
|
|
|
16 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
16 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
16 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
16 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
16 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
16 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
16 oz.
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
|
|
|
|
|
|
|
|
|
|
202 SEnd
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 SEnd
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 SEnd
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 SEnd
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 SEnd
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 SEnd
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 SEnd
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 SEnd
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 SEnd
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 SEnd
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 SEnd
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 LOE
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 LOE
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
202 LOE
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
FSC example
|
|||||||
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
Date
|
U.S No 2 Diesel Retail Sales by All Sellers
(Cents per Gallon)
|
(***)
(cents)
|
(***) (cents)
|
(***)
(cents)
|
(***)
(cents)
|
FSC per mile (cents)
|
|
Jun-2012
|
375.9
|
|
|
|
|
|
|
Jul-2012
|
372.1
|
|
|
|
|
|
|
Aug-2012
|
398.3
|
|
|
|
|
|
|
Sept-2012
|
410.2
|
|
|
|
|
|
|
Oct-2012
|
409.4
|
|
|
|
|
|
|
Nov-2012
|
400
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
Dec-2012
|
396.1
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
Jan-2012
|
390.9
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
Feb-2012
|
411.1
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
Mar-2012
|
406.8
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
Apr-2012
|
393
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
|
|
|
|
|
|
Notes
|
|
|
|
|
|
|
|
(***)
|
|
|
|
|
|
|
|
(***)
|
|
|
|
|
|
|
|
(***)
|
|
|
|
|
|
|
|
(***)
|
|
|
|
|
|
|
|
(***)
|
|
|
|
|
|
|
|
Web page reference for diesel fuel (Department of Energy). http.//www.eia.gov/dnav/pet/pet_pri_dcus_nus_m.htm
|
|
Breakdown on can size, weighted average for FSC
|
|
EXAMPLE: FSC pass-thru mechanish
|
|||||||||||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
Size
|
Plant Name
|
Annual Volume Reference (unit)
|
(***)
|
(***)
|
No of Loads/ Year
|
(***)
|
|
(***)
FSC
(***)
|
(***)
FSC
(***)
|
(***)
FSC
(***)
|
July 1, 2013 FSC
(***)
|
July, 2013 FSC (***)
|
July 1, 2013 FSC (***)
|
July 1, 2013 Increase of
(***)
|
12oz
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
12oz Total
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16oz
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
16oz Total
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8oz
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
8oz Total
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total
|
|
(***)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LOE
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
LOE Total
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SuperEnd
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
||
SuperEnd Total
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
2013 CPU Schedule – 12oz cans & ends
|
||||||
Purchaser
Location
|
CCK
Plant
|
CCK
Warehouse
|
12oz can –
Shipping from
Crown plant
|
12oz can –
Shipping from Crown
warehouse
|
End –
Shipping
From Crown
plant
|
End –
Shipping
From Crown
warehouse
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
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|
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|
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|
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|
(***)
|
Crown's Current Can Supply
|
|||||
|
|
|
|
|
|
DPSG Locations
|
12oz Plant
|
12oz Warehouse
|
12oz Backup
|
8oz Plant
|
16oz Plant
|
|
|
|
|
|
|
(***)
|
(***)
|
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|
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|
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|
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|
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|
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|
(***)
|
(***)
|
|
Lead Time (days)
|
|
|
||
Material Size
|
A Item
|
B Item
|
C Item
|
Pallet Quantity (unit)
|
Truckload Quantity (unit)
|
8oz
|
|
|
(***)
|
(***)
|
(***)
|
12oz
|
(***)
|
(***)
|
(***)
|
(***)
|
(***)
|
16oz
|
|
|
(***)
|
(***)
|
(***)
|
SuperEnd
|
(***)
|
|
|
(***)
|
(***)
|
LOE
|
|
|
(***)
|
(***)
|
(***)
|
Minimum run units are based on agreement between Supplier and Purchaser. Purchaser shall order mixed loads based on pallet quantities in order to fill a truckload.
The truckload quantity and pallet quantity may vary for each plant or product due to weight restrictions, numbers of pallets per truckload etc.
|
|
Purchaser's Plant
|
|
HI & ME 5¢,
CA CRV
|
HI & ME 5¢, CA CRV,
WVA
|
VT, ME, NY, IA, MA, CT
5¢, and WVA
|
IA, MA, ME, OR, VT, NY,
CT, 5¢, MI 10¢, CA CRV
|
IA, MA, ME, OR, VT, NY,
CT, HI, 5¢, MI 10¢, CA CRV
|
IA, MA, ME, OR, VT, NY,
CT, HI, 5¢, MI 10¢, CA CRV,
WVA,
|
Incision
|
Plain
|
3-state
|
4-state
|
7-state
|
9-state
|
10-state
|
11-state
|
(***)
|
(***)
|
(***)
|
(***)
|
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|
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|
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|
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|
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|
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|
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|
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|
(***)
|
CBI Holdings Inc.
|
|
Executive
|
|
|
|
|
|
|
|
|
|
By:
|
/s/
James L. Baldwin
|
|
/s/ Derry Hobson
|
|
James L. Baldwin
|
|
Derry Hobson
|
|
Executive Vice President
|
|
|
EXECUTIVE
|
|
|
CBI HOLDINGS INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
|
|
|
|
|
Its:
|
|
|
|
|
DPS HOLDINGS INC.
|
|
||
|
|
|
|
|
|
|
|
|
|
By:
|
/s/ Larry Solomon
|
|
|
|
|
|
Name:
|
Larry Solomon
|
|
|
|
|
|
Title:
|
Executive Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTIVE
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Derry Hobson
|
|
|
|
|
|
|
Derry Hobson
|
|
|
For the Years Ended December 31,
|
||||||||||||||||||
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
||||||||||
Calculation of fixed charges ratio:
|
|
|
|
|
|
|
|
|
|
||||||||||
Income before provision for income taxes, equity in earnings of unconsolidated subsidiaries and cumulative effect of change in accounting policy
(2)
|
$
|
542
|
|
|
$
|
978
|
|
|
$
|
925
|
|
|
$
|
821
|
|
|
$
|
868
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
138
|
|
|
142
|
|
|
131
|
|
|
147
|
|
|
265
|
|
|||||
Amortization of capitalized interest
|
4
|
|
|
3
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|||||
Capitalized interest
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|
(8
|
)
|
|||||
Total earnings available for fixed charges
|
$
|
683
|
|
|
$
|
1,121
|
|
|
$
|
1,056
|
|
|
$
|
967
|
|
|
$
|
1,127
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
123
|
|
|
$
|
125
|
|
|
$
|
114
|
|
|
$
|
128
|
|
|
$
|
243
|
|
Capitalized interest
|
1
|
|
|
2
|
|
|
2
|
|
|
3
|
|
|
8
|
|
|||||
Interest component of rental expense
(1)
|
14
|
|
|
15
|
|
|
15
|
|
|
16
|
|
|
14
|
|
|||||
Total fixed charges
|
$
|
138
|
|
|
$
|
142
|
|
|
$
|
131
|
|
|
$
|
147
|
|
|
$
|
265
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
4.9x
|
|
|
7.9x
|
|
|
8.1x
|
|
|
6.6x
|
|
|
4.3x
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents a reasonable estimate of the interest component of rental expense incurred by us.
|
(2)
|
Due to the completion of the IRS audit for our 2006-2008 federal income tax returns in August 2013, we recognized $430 million of other expense, net, as we no longer anticipate collecting amounts from Mondelēz. Additionally, in June 2013, a bill was enacted by the Canadian government, which reduced amounts amortized for income tax purposes. As a result, we recognized $38 million of indemnity income due to the reduction of our long-term liability to Mondelēz. Refer to
Note 12 of the Notes to our Audited Consolidated Financial Statements
in Item 8, "Financial Statements and Supplementary Data" of this Annual Report for further information.
|
A Message From Larry D. Young
|
3
|
Our Commitments
|
4
|
Your Personal Responsibility
|
5
|
Compliance
|
5
|
Roadmap for Making Ethical Decisions
|
5
|
Speaking Up!
|
6
|
Reporting
|
6
|
Investigation
|
6
|
Confidentiality
|
6
|
Retaliation/Obstruction
|
6
|
Key Questions
|
7
|
Our Workplace
|
8
|
Diversity
|
8
|
Equal Opportunity and Non-Harassment Policy
|
8
|
Human Rights Policy
|
8
|
Safety
|
8
|
Conflicts of Interest in Working Relationships
|
|
Our Customers, Suppliers & Competitors
|
10
|
Bribery
|
10
|
Bribery & Foreign Corrupt Practices Policy
|
10
|
Competition and Antitrust Laws
|
10
|
Antitrust Policy
|
10
|
Conflicts of Interest
|
11
|
Outside Investments and Business
|
11
|
Gifts and Entertainment
|
11
|
Authority and Expense Policies
|
12
|
Our Investors
|
13
|
Accounting and Financial Reporting
|
13
|
Use of Company Resources
|
13
|
Authority and Expense Policies
|
13
|
IT User Policy
|
13
|
Fraud and Loss
|
13
|
Confidential Information
|
14
|
Disclosure to Investors
|
14
|
Disclosure Policy
|
14
|
Insider Trading
|
14
|
Insider Trading Policy
|
14
|
Political Contributions
|
14
|
Political Contributions Policy
|
15
|
Prohibited Transactions
|
15
|
Related Persons Transaction Policy
|
15
|
Our Consumers
|
16
|
Product Quality
|
16
|
Marketing
|
16
|
Marketing to Children Policy
|
16
|
Our Communities
|
17
|
Environment
|
17
|
Ethical Sourcing
|
17
|
Ethical Sourcing Code of Conduct
|
17
|
Human Rights Policy
|
17
|
Giving Back
|
17
|
•
|
Understanding and complying with our Code and related policies.
|
•
|
Familiarizing yourself with and following the laws and regulations that apply to our business and your job.
|
•
|
Acting with the highest standards of ethics and integrity.
|
•
|
Reporting violations and misconduct.
|
•
|
Is this compliant with our policies and/or well within the spirit of our policies?
|
•
|
What might the impact of my action be? Could it hurt the company’s reputation or my professional reputation?
|
•
|
Would I be comfortable telling my manager about my decision, or seeing my decision reported in the news media?
|
•
|
You have supervisory responsibility or effective control over any aspect of his or her job,
|
•
|
You audit, review or oversee any aspect of his or her job, or
|
•
|
He or she reports up to you, directly or indirectly, within our organizational structure.
|
•
|
Outside Investments and Business.
Sometimes, outside investments and business affiliations or opportunities may create a conflict of interest. Because of the inherent conflict, you may not:
|
◦
|
Own more than a nominal financial or beneficial interest in anyone competing or doing business with us (however, you may own shares in a public company, if you own less than 1 percent of the total equity, or if you own more than 1 percent and you own it through a mutual fund or similar nondiscretionary, undirected arrangement).
|
◦
|
Serve as a director, officer, consultant or employee or in another capacity for any party that is a competitor or conducts or seeks to do business with us, or where such other position interferes or may appear to interfere with your responsibilities.
|
◦
|
Take business opportunities for yourself that are within the scope of our business or that you discover through your position, and you may not direct the opportunity to third parties (unless we have turned the opportunity down and it clearly does not conflict with our business interests). If an activity involves both personal and company benefits, you should seek guidance from the general counsel’s office.
|
•
|
Gifts & Entertainment.
You may not accept gifts or meals, trips, tickets, events and other forms of entertainment that may appear or tend to influence business decisions, compromise independent judgment or create the impression or expectation (perceived or otherwise) that the giver will be rewarded in some way. You must also be sensitive to our customers’ and suppliers’ own rules on gifts and entertainment. Regardless of the motive or actual influence on independent judgment, you may not accept or provide “significant” gifts or entertainment, whether from or to a customer, supplier or anyone attempting to develop a business relationship with us. Modest gifts and reasonable entertainment are acceptable, but should not create an expectation or appearance of special treatment, and should be appropriate and consistent with our other policies. We expect you to use good judgment and common sense and avoid even the appearance of improper behavior. In all cases, any sort of bribery is strictly prohibited. And, in any dealing with government officials, other strict laws and policies apply as explained above and in our
Bribery and Foreign Corrupt Practices Policy.
|
•
|
T-shirts, inexpensive pens, mugs, cups, calendars and the like.
|
•
|
Gifts of our regular products or promotional items made by sales or marketing to generate goodwill.
|
•
|
Event tickets that are generally available to the public, such as local sporting, concert and theatre events.
|
•
|
Entertainment that is a part of a company-sponsored program, such as a sales incentive or a customer marketing promotion.
|
•
|
Any gift more than $300 in value.
|
•
|
Most “elite” or “premiere” event tickets (such as the Olympics, World Cup, Super Bowl, World Series, Wimbledon, Masters, U.S. Open, PGA Championship, Oscars or Grammys) that are not realistically accessible to the general public or available only at a very high premium over face value.
|
•
|
Cash or cash equivalents of any value (such as a pre-loaded debit card or gift certificates).
|
•
|
Forgery, alteration or falsification of documents, records or transactions, including expense reports.
|
•
|
Off-the-record trading, accounts or transactions.
|
•
|
Fraud, regardless of amount, including deceptive or manipulative conduct or violation of corporate loyalty, trust or confidence, whether intentional or reckless.
|
•
|
Attempt to mislead, deceive, manipulate, misstate or engage in deliberate error, including any false or misleading representation or concealment of a material fact.
|
•
|
Reporting of false or misleading information in internal or external financial reports.
|
•
|
Theft, destruction, removal or inappropriate use of corporate property or information.
|
•
|
Receiving property, loans or gifts from the company, except under company service or award plans.
|
•
|
Buy or sell DPS securities or otherwise take any action to take personal advantage, or
|
•
|
Provide the information to any outside party, including family and friends.
|
/s/ Deloitte & Touche LLP
|
|
|
||
|
|
|
|
|
Dallas, Texas
|
|
|
|
|
February 19, 2014
|
|
|
|
|
|
|
|
|
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 Snapple Group Employee Relief Fund
|
Texas
|
14
|
|
Dr Pepper/Seven Up Beverage Sales Company
|
Texas
|
15
|
|
Dr Pepper/Seven Up Manufacturing Company
|
Delaware
|
16
|
|
Dr Pepper/Seven Up, Inc.
|
Delaware
|
17
|
|
High Ridge Investments US, Inc.
|
Delaware
|
18
|
|
International Beverage Investments GP
|
Delaware
|
19
|
|
International Investments Management LLC
|
Delaware
|
20
|
|
Mott's General Partnership
|
Nevada
|
21
|
|
Mott's LLP
|
Delaware
|
22
|
|
MSSI LLC
|
Delaware
|
23
|
|
Nantucket Allserve, Inc.
|
Massachusetts
|
24
|
|
Nuthatch Trading US, Inc.
|
Delaware
|
25
|
|
Pacific Snapple Distributors, Inc.
|
California
|
26
|
|
Royal Crown Company, Inc.
|
Delaware
|
27
|
|
Snapple Beverage Corp.
|
Delaware
|
28
|
|
Splash Transport, Inc.
|
Delaware
|
29
|
|
The American Bottling Company
|
Delaware
|
30
|
|
Canada Dry Mott's Inc.
|
Canada
|
31
|
|
Aguas Minerales International Investments B.V.
|
Netherlands
|
32
|
|
Bebidas Americas Investments B.V.
|
Netherlands
|
33
|
|
CDMI Investments B.V.
|
Netherlands
|
34
|
|
Comercializadora de Bebidas, SA de CV
|
Mexico
|
35
|
|
Peñafiel Aguas Minerales SA de CV
|
Mexico
|
36
|
|
Peñafiel Bebidas SA de CV
|
Mexico
|
37
|
|
Peñafiel Servicios Comerciales, S.A. de C.V.
|
Mexico
|
38
|
|
Peñafiel Servicios S.A. de C.V.
|
Mexico
|
39
|
|
Embotelladora Mexicana de Agua, SA de CV
|
Mexico
|
40
|
|
Industria Embotelladora de Bebidas Mexicanas, SA de CV
|
Mexico
|
41
|
|
Manantiales Penafiel, S.A. de C.V.
|
Mexico
|
42
|
|
Snapple Beverage de Mexico, S.A. de C.V.
|
Mexico
|
/s/ Deloitte & Touche LLP
|
|
|
|
|
|
Dallas, Texas
|
|
|
February 19, 2014
|
|
|
|
/s/ Larry D. Young
|
|
Date: February 19, 2014
|
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 registrant's other certifying officer(s) 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 registrant's 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 registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's 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 registrant's 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 registrant's internal control over financial reporting.
|
|
/s/ Martin M. Ellen
|
|
Date: February 19, 2014
|
Martin M. Ellen
|
|
|
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, 2013
, 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
|
|
Date: February 19, 2014
|
Larry D. Young
|
|
|
President and Chief Executive 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, 2013
, 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/ Martin M. Ellen
|
|
Date: February 19, 2014
|
Martin M. Ellen
|
|
|
Executive Vice President and Chief Financial Officer of Dr Pepper Snapple Group, Inc.
|
|