|
R
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014
|
or
|
|
£
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
|
Delaware
|
|
98-0517725
|
(State or other jurisdiction of
|
|
(I.R.S. employer
|
incorporation or organization)
|
|
identification number)
|
|
|
|
5301 Legacy Drive, Plano, Texas
|
|
75024
|
(Address of principal executive offices)
|
|
(Zip code)
|
Title of Each Class
|
|
Name of Each Exchange on Which Registered
|
COMMON STOCK, $0.01 PAR VALUE
|
|
NEW YORK STOCK EXCHANGE
|
Large Accelerated Filer
R
|
Accelerated Filer
o
|
Non-Accelerated Filer
o
|
Smaller Reporting Company
o
|
|
|
|
Page
|
|
||
|
||
Item 10.
|
Directors, Executive Officers of the Registrant and Corporate Governance
|
|
Item 11.
|
Executive Compensation
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
|
Item 13.
|
Certain Relationships and Related Transactions and Director Independence
|
|
Item 14.
|
Principal Accounting Fees and Services
|
|
|
||
|
|
|
|
•
|
changes in consumer preferences, trends and health concerns;
|
•
|
the impact of new or proposed beverage taxes or regulations on our business;
|
•
|
the highly competitive markets in which we operate and our ability to compete with companies that have significant financial resources;
|
•
|
maintaining our relationships with our large retail customers;
|
•
|
dependence on third party bottling and distribution companies;
|
•
|
future impairment of our goodwill and other intangible assets;
|
•
|
increases in the cost of employee benefits and withdrawal liabilities associated with multi-employer plans;
|
•
|
changes in the cost of commodities used in our business;
|
•
|
fluctuations in foreign currency exchange rates;
|
•
|
recession, financial and credit market disruptions and other economic conditions;
|
•
|
the need to service our debt;
|
•
|
disruptions to our information systems and third-party service providers;
|
•
|
litigation claims or legal proceedings against us;
|
•
|
shortages of materials used in our business;
|
•
|
substantial disruption at our manufacturing or distribution facilities;
|
•
|
failure to comply with governmental regulations in the countries in which we operate;
|
•
|
weather, climate changes and the availability of water;
|
•
|
our products meeting health and safety standards or contamination of our products;
|
•
|
fluctuations in our tax obligations;
|
•
|
strikes or work stoppages;
|
•
|
infringement of our intellectual property rights by third parties, intellectual property claims against us or adverse events regarding licensed intellectual property;
|
•
|
the need for substantial investment and restructuring at our manufacturing, distribution and other facilities;
|
•
|
maintaining our relationships with our allied brand owners;
|
•
|
our ability to retain or recruit qualified personnel;
|
•
|
changes in accounting standards; and
|
•
|
other factors discussed in Item 1A, "Risk Factors" under "Risks Related to Our Business" and elsewhere in this Annual Report on Form 10-K.
|
|
•
|
#1 flavored CSD company in the U.S.
|
•
|
Approximately 84% of our volume from brands that are either #1 or #2 in their category
|
|
•
|
#3 North American liquid refreshment beverage ("LRB") business
|
|
•
|
$6.1 billion of net sales in 2014 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
|
|
|
|
|
|
|
•
|
#1 ginger ale in the U.S. and Canada, which includes regular, diet and Canada Dry 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, 7UP TEN and cherry
|
|
•
|
The original "Un-Cola," created in 1929
|
|
|
|
|
•
|
#1 root beer in the U.S.
|
•
|
Flavors include regular, diet, A&W TEN and cream soda
|
|
•
|
A classic all-American beverage first sold at a veteran's parade in 1919
|
|
|
|
|
•
|
#1 orange CSD in the U.S.
|
•
|
Flavors include orange, diet, grape, strawberry, 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
|
|
|
|
|
|
|
|
•
|
#1 carbonated mineral water brand in Mexico
|
•
|
Brand also includes Orangeade, Lemonade, Flavors and Twist
|
|
•
|
Mexico's oldest mineral water
|
|
|
|
|
•
|
#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
|
|
|
|
|
•
|
#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, RC TEN and cherry
|
|
|
|
|
|
|
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 clamato shrimp
|
|
•
|
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
|
|
|
9
|
|
|
1
|
|
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
Manufacturing facilities
|
12
|
|
|
6
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
Principal distribution centers and warehouse facilities
|
40
|
|
|
66
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
106
|
|
|
53
|
|
|
81
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
136
|
|
Mexico and Canada:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Office buildings
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
3
|
|
Manufacturing facilities
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
Principal distribution centers and warehouse facilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
9
|
|
|
12
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
11
|
|
|
18
|
|
Total
|
53
|
|
|
82
|
|
|
2
|
|
|
—
|
|
|
6
|
|
|
11
|
|
|
154
|
|
•
|
$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
(2)
|
||||||
October 1, 2014 – October 31, 2014
|
|
129
|
|
|
$
|
64.35
|
|
|
129
|
|
|
$
|
287,803
|
|
November 1, 2014 – November 30, 2014
|
|
574
|
|
|
70.63
|
|
|
574
|
|
|
247,246
|
|
||
December 1, 2014 – December 31, 2014
|
|
1,048
|
|
|
71.95
|
|
|
1,048
|
|
|
171,873
|
|
||
For the quarter ended December 31, 2014
|
|
1,751
|
|
|
70.96
|
|
|
1,751
|
|
|
|
(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, 2014
, there was a remaining balance of
$172 million
authorized for repurchase that had not been utilized.
|
(2)
|
In February 2015, the Board authorized an additional $1,000 million of share repurchases, which is not reflected in the table above.
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
(in millions, except per share data)
|
||||||||||||||||||
Statements of Income Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net sales
|
$
|
6,121
|
|
|
$
|
5,997
|
|
|
$
|
5,995
|
|
|
$
|
5,903
|
|
|
$
|
5,636
|
|
Gross profit
|
3,630
|
|
|
3,498
|
|
|
3,495
|
|
|
3,418
|
|
|
3,393
|
|
|||||
Income from operations
|
1,180
|
|
|
1,046
|
|
|
1,092
|
|
|
1,024
|
|
|
1,025
|
|
|||||
Net income
|
703
|
|
|
624
|
|
|
629
|
|
|
606
|
|
|
528
|
|
|||||
Basic earnings per share
(1)
|
$
|
3.59
|
|
|
$
|
3.08
|
|
|
$
|
2.99
|
|
|
$
|
2.77
|
|
|
$
|
2.19
|
|
Diluted earnings per share
(1)
|
3.56
|
|
|
3.05
|
|
|
2.96
|
|
|
2.74
|
|
|
2.17
|
|
|||||
Dividends declared per share
|
1.64
|
|
|
1.52
|
|
|
1.36
|
|
|
1.21
|
|
|
0.90
|
|
|||||
Statements of Cash Flows Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
(2)
|
$
|
1,022
|
|
|
$
|
866
|
|
|
$
|
482
|
|
|
$
|
783
|
|
|
$
|
2,535
|
|
Investing activities
|
(185
|
)
|
|
(195
|
)
|
|
(217
|
)
|
|
(240
|
)
|
|
(225
|
)
|
|||||
Financing activities
|
(747
|
)
|
|
(880
|
)
|
|
(603
|
)
|
|
(152
|
)
|
|
(2,280
|
)
|
|
As of December 31,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
|
(in millions, except per share data)
|
||||||||||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
$
|
8,273
|
|
|
$
|
8,201
|
|
|
$
|
8,928
|
|
|
$
|
9,283
|
|
|
$
|
8,776
|
|
Short-term borrowings and current portion of long-term obligations
|
3
|
|
|
66
|
|
|
250
|
|
|
452
|
|
|
404
|
|
|||||
Long-term obligations
|
2,588
|
|
|
2,508
|
|
|
2,554
|
|
|
2,256
|
|
|
1,687
|
|
|||||
Other non-current liabilities
(2)
|
2,353
|
|
|
2,386
|
|
|
2,862
|
|
|
2,849
|
|
|
3,375
|
|
|||||
Total stockholders’ equity
|
2,294
|
|
|
2,277
|
|
|
2,280
|
|
|
2,263
|
|
|
2,459
|
|
(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, 2014
,
2013
,
2012
, 2011 and 2010, we repurchased and retired
6.8 million
shares,
8.7 million
shares,
9.5 million
shares,
13.7 million
shares and 30.8 million shares, respectively.
|
(2)
|
The 2010 other non-current liabilities for the 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 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, from time to time, 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
$6,121 million
for the
year ended
December 31, 2014
,
an
in
crease of
$124 million
, or approximately
2%
, from the
year ended
December 31, 2013
.
|
•
|
Net income for the
year ended
December 31, 2014
was
$703 million
, compared to
$624 million
for the
year ended
December 31, 2013
,
an
in
crease of
$79 million
, or approximately
13%
.
|
•
|
Diluted earnings per share was
$3.56
for the
year ended
December 31, 2014
and
$3.05
for the year ago period,
an
in
crease of
$0.51
, or approximately
17%
.
|
•
|
During
2014
, our Board declared aggregate dividends of
$1.64
per share on outstanding common stock, as compared to
$1.52
per share on outstanding common stock during
2013
. Dividends declared per share for the year ended
December 31, 2014
in
creased approximately
8%
.
|
•
|
During the years ended
December 31, 2014
and
2013
, we repurchased
6.8 million
and
8.7 million
shares of our common stock, respectively, valued at approximately
$400 million
for both years.
|
•
|
On October 31, 2014, we acquired certain assets of Davis Beverage Group, Inc. and Davis Bottling Co, Inc. ("Davis") in exchange for
$19 million
in cash and a
$2 million
holdback liability to satisfy any working capital adjustments and applicable indemnification claims, pursuant to the terms of the purchase agreement.
|
•
|
During the first quarter of 2015, our Board declared a dividend of $0.48 per share, which will be paid on April 7, 2015, to shareholders of record as of March 16, 2015. The dividend declared during the first quarter of 2015 increased approximately 17% compared to the dividend declared in the previous quarter.
|
•
|
During the first quarter of 2015, our Board authorized the additional repurchase of an aggregate amount of $1 billion of our outstanding common stock.
|
|
For the Year Ended December 31,
|
|
|
|||||||||||||
|
2014
|
|
2013
|
|
Percentage
|
|||||||||||
|
Dollars
|
|
Percent
|
|
Dollars
|
|
Percent
|
|
Change
|
|||||||
Net sales
|
$
|
6,121
|
|
|
100.0
|
%
|
|
$
|
5,997
|
|
|
100.0
|
%
|
|
2
|
%
|
Cost of sales
|
2,491
|
|
|
40.7
|
|
|
2,499
|
|
|
41.7
|
|
|
|
|||
Gross profit
|
3,630
|
|
|
59.3
|
|
|
3,498
|
|
|
58.3
|
|
|
4
|
|
||
Selling, general and administrative expenses
|
2,334
|
|
|
38.1
|
|
|
2,272
|
|
|
37.9
|
|
|
|
|||
Multi-employer pension plan withdrawal
|
—
|
|
|
—
|
|
|
56
|
|
|
0.9
|
|
|
|
|||
Depreciation and amortization
|
115
|
|
|
1.9
|
|
|
115
|
|
|
1.9
|
|
|
|
|||
Other operating expense, net
|
1
|
|
|
—
|
|
|
9
|
|
|
0.2
|
|
|
|
|||
Income from operations
|
1,180
|
|
|
19.3
|
|
|
1,046
|
|
|
17.4
|
|
|
13
|
|
||
Interest expense
|
109
|
|
|
1.8
|
|
|
123
|
|
|
2.0
|
|
|
|
|||
Interest income
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
|
|||
Other expense (income), net
|
—
|
|
|
—
|
|
|
383
|
|
|
6.4
|
|
|
|
|||
Income before provision (benefit) for income taxes and equity in earnings of unconsolidated subsidiaries
|
1,073
|
|
|
17.5
|
|
|
542
|
|
|
9.0
|
|
|
98
|
|
||
Provision (benefit) for income taxes
|
371
|
|
|
6.0
|
|
|
(81
|
)
|
|
(1.4
|
)
|
|
|
|||
Income before equity in earnings of unconsolidated subsidiaries
|
702
|
|
|
11.5
|
|
|
623
|
|
|
10.4
|
|
|
|
|||
Equity in earnings of unconsolidated subsidiaries, net of tax
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
|
|||
Net income
|
$
|
703
|
|
|
11.5
|
%
|
|
$
|
624
|
|
|
10.4
|
%
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings per common share:
|
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
$
|
3.59
|
|
|
NM
|
|
|
$
|
3.08
|
|
|
NM
|
|
|
17
|
%
|
Diluted
|
$
|
3.56
|
|
|
NM
|
|
|
$
|
3.05
|
|
|
NM
|
|
|
17
|
%
|
•
|
increased people costs, primarily driven by performance-based incentive compensation;
|
•
|
a
$23 million
unfavorable comparison in the mark-to-market activity on commodity derivative contracts;
|
•
|
higher logistics costs from our third party carriers partially driven by tighter than expected overall system capacity; and
|
•
|
pension settlement charges of $16 million, of which $14 million related to the purchase of annuities for certain participants receiving benefits in our U.S. defined benefit pension plans.
|
|
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, 2014
|
||||||||||
Other expense (income), net
|
$
|
383
|
|
|
$
|
(430
|
)
|
|
$
|
38
|
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
Income before provision (benefit) for income taxes and equity in earnings of unconsolidated subsidiaries
|
542
|
|
|
430
|
|
|
(38
|
)
|
|
934
|
|
|
1,073
|
|
|||||
Provision (benefit) for income taxes
|
(81
|
)
|
|
463
|
|
|
(50
|
)
|
|
332
|
|
|
371
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Effective tax rate
|
(14.9
|
)%
|
|
|
|
|
|
35.5
|
%
|
|
34.6
|
%
|
|
For the Year Ended
|
||||||
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Segment Results — Net sales
|
|
|
|
||||
Beverage Concentrates
|
$
|
1,228
|
|
|
$
|
1,229
|
|
Packaged Beverages
|
4,361
|
|
|
4,306
|
|
||
Latin America Beverages
|
532
|
|
|
462
|
|
||
Net sales
|
$
|
6,121
|
|
|
$
|
5,997
|
|
|
|
|
|
||||
|
For the Year Ended
|
||||||
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Segment Results — SOP
|
|
|
|
||||
Beverage Concentrates
|
$
|
790
|
|
|
$
|
778
|
|
Packaged Beverages
|
636
|
|
|
525
|
|
||
Latin America Beverages
|
78
|
|
|
61
|
|
||
Total SOP
|
1,504
|
|
|
1,364
|
|
||
Unallocated corporate costs
|
323
|
|
|
309
|
|
||
Other operating expense, net
|
1
|
|
|
9
|
|
||
Income from operations
|
1,180
|
|
|
1,046
|
|
||
Interest expense, net
|
107
|
|
|
121
|
|
||
Other expense (income), net
|
—
|
|
|
383
|
|
||
Income before provision (benefit) for income taxes and equity in earnings of unconsolidated subsidiaries
|
$
|
1,073
|
|
|
$
|
542
|
|
|
For the Year Ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2014
|
|
2013
|
|
Change
|
||||||
Net sales
|
$
|
1,228
|
|
|
$
|
1,229
|
|
|
$
|
(1
|
)
|
SOP
|
790
|
|
|
778
|
|
|
12
|
|
|
For the Year Ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2014
|
|
2013
|
|
Change
|
||||||
Net sales
|
$
|
4,361
|
|
|
$
|
4,306
|
|
|
$
|
55
|
|
SOP
|
636
|
|
|
525
|
|
|
111
|
|
•
|
higher logistics costs from our third party carriers driven by tighter than expected overall transportation system capacity;
|
•
|
additional operating costs associated with the acquisitions of DP/7UP West and Davis; and
|
•
|
the
$4 million
unfavorable comparison of activity related to a case against the American Bottling Company ("ABC litigation") as we recorded a
$2 million
decrease in our legal provision in the current year versus a
$6 million
reduction in our legal provision in the prior year.
|
|
For the Year Ended
|
|
|
||||||||
|
December 31,
|
|
|
||||||||
|
2014
|
|
2013
|
|
Change
|
||||||
Net sales
|
$
|
532
|
|
|
$
|
462
|
|
|
$
|
70
|
|
SOP
|
78
|
|
|
61
|
|
|
17
|
|
|
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
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
|
|||
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 (benefit) 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
|
|
•
|
our continued repurchases of our outstanding common stock pursuant to our repurchase programs;
|
•
|
continued payment of dividends;
|
•
|
continued capital expenditures;
|
•
|
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
;
|
•
|
acquisitions of regional bottling companies, distributors and distribution rights to further extend our geographic coverage or access to new products; and
|
•
|
our ability to refinance $500 million of our outstanding 2.90% senior notes due January 15, 2016 (the "2016 Notes"). We intend to issue senior notes to refinance the 2016 Notes before the due date.
|
|
Amount Utilized
|
|
Balances Available
|
||||
Revolver
|
$
|
—
|
|
|
$
|
499
|
|
Letters of credit
|
1
|
|
|
74
|
|
||
Swingline advances
|
—
|
|
|
50
|
|
|
For the Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net cash provided by operating activities
|
$
|
1,022
|
|
|
$
|
866
|
|
|
$
|
482
|
|
Net cash used in investing activities
|
(185
|
)
|
|
(195
|
)
|
|
(217
|
)
|
|||
Net cash used in financing activities
|
(747
|
)
|
|
(880
|
)
|
|
(603
|
)
|
|
|
|
Payments Due in Year
|
||||||||||||||||||||||||
|
Total
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
After 2019
|
||||||||||||||
Senior unsecured notes
(1)
|
$
|
2,474
|
|
|
$
|
—
|
|
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
724
|
|
|
$
|
250
|
|
|
$
|
1,000
|
|
Capital leases
(2)
|
129
|
|
|
11
|
|
|
11
|
|
|
11
|
|
|
11
|
|
|
10
|
|
|
75
|
|
|||||||
Operating leases
(3)
|
239
|
|
|
47
|
|
|
40
|
|
|
32
|
|
|
24
|
|
|
21
|
|
|
75
|
|
|||||||
Purchase obligations
(4)
|
764
|
|
|
473
|
|
|
136
|
|
|
51
|
|
|
45
|
|
|
39
|
|
|
20
|
|
|||||||
Interest payments
(5)
|
758
|
|
|
95
|
|
|
94
|
|
|
92
|
|
|
69
|
|
|
42
|
|
|
366
|
|
|||||||
Current tax reserve
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Payable to Mondelēz
|
43
|
|
|
6
|
|
|
6
|
|
|
6
|
|
|
6
|
|
|
19
|
|
|
—
|
|
|||||||
Total
|
$
|
4,408
|
|
|
$
|
633
|
|
|
$
|
787
|
|
|
$
|
192
|
|
|
$
|
879
|
|
|
$
|
381
|
|
|
$
|
1,536
|
|
(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. Additionally, we changed our leasing strategy during the year ended December 31, 2014. As a result of this change, the Company converted a number of operating leases with a term less than twelve months into capital leases, which increased our contractual obligations.
|
(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
|
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) 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, 2014
by approximately
$27 million and $33 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, 2014
by approximately
$1 million and $2 million, respectively.
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, 2014 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, 2014 by approximately $6 million.
|
|
|
|
|
|
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, 2014 would have affected income from operations by approximately
$14 million
for the year ended December 31, 2014.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Judgments and Uncertainties
|
|
Effect if Actual Results Differ from Assumptions
|
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.
|
(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. As LIBOR would not fall below zero, we did not calculate the hypothetical change in the interest rate.
|
Audited Consolidated Financial Statements:
|
|
|
Consolidated Statements of Comprehensive Income for the years ended
December 31, 2014, 2013 and 2012
|
||
Consolidated Statements of Cash Flows for the years ended
December 31, 2014, 2013 and 2012
|
||
Consolidated Statements of Changes in Stockholders' Equity for the years ended
December 31, 2014, 2013 and 2012
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
For the
|
||||||||||
|
Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net sales
|
$
|
6,121
|
|
|
$
|
5,997
|
|
|
$
|
5,995
|
|
Cost of sales
|
2,491
|
|
|
2,499
|
|
|
2,500
|
|
|||
Gross profit
|
3,630
|
|
|
3,498
|
|
|
3,495
|
|
|||
Selling, general and administrative expenses
|
2,334
|
|
|
2,272
|
|
|
2,268
|
|
|||
Multi-employer pension plan withdrawal
|
—
|
|
|
56
|
|
|
—
|
|
|||
Depreciation and amortization
|
115
|
|
|
115
|
|
|
124
|
|
|||
Other operating expense, net
|
1
|
|
|
9
|
|
|
11
|
|
|||
Income from operations
|
1,180
|
|
|
1,046
|
|
|
1,092
|
|
|||
Interest expense
|
109
|
|
|
123
|
|
|
125
|
|
|||
Interest income
|
(2
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|||
Other expense (income), net
|
—
|
|
|
383
|
|
|
(9
|
)
|
|||
Income before provision (benefit) for income taxes and equity in earnings of unconsolidated subsidiaries
|
1,073
|
|
|
542
|
|
|
978
|
|
|||
Provision (benefit) for income taxes
|
371
|
|
|
(81
|
)
|
|
349
|
|
|||
Income before equity in earnings of unconsolidated subsidiaries
|
702
|
|
|
623
|
|
|
629
|
|
|||
Equity in earnings of unconsolidated subsidiaries, net of tax
|
1
|
|
|
1
|
|
|
—
|
|
|||
Net income
|
$
|
703
|
|
|
$
|
624
|
|
|
$
|
629
|
|
Earnings per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
3.59
|
|
|
$
|
3.08
|
|
|
$
|
2.99
|
|
Diluted
|
3.56
|
|
|
3.05
|
|
|
2.96
|
|
|||
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
195.8
|
|
|
202.9
|
|
|
210.6
|
|
|||
Diluted
|
197.4
|
|
|
204.5
|
|
|
212.3
|
|
|
For the
|
||||||||||
|
Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net income
|
$
|
703
|
|
|
$
|
624
|
|
|
$
|
629
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(44
|
)
|
|
(9
|
)
|
|
19
|
|
|||
Net change in pension liability, net of tax of ($4), $12, and ($4)
|
(7
|
)
|
|
23
|
|
|
(8
|
)
|
|||
Net change in cash flow hedges, net of tax of $1, $4, and ($6)
|
2
|
|
|
8
|
|
|
(11
|
)
|
|||
Total other comprehensive income (loss), net of tax
|
(49
|
)
|
|
22
|
|
|
—
|
|
|||
Comprehensive income
|
$
|
654
|
|
|
$
|
646
|
|
|
$
|
629
|
|
|
December 31,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
Assets
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
237
|
|
|
$
|
153
|
|
Accounts receivable:
|
|
|
|
||||
Trade, net
|
556
|
|
|
564
|
|
||
Other
|
61
|
|
|
58
|
|
||
Inventories
|
204
|
|
|
200
|
|
||
Deferred tax assets
|
67
|
|
|
66
|
|
||
Prepaid expenses and other current assets
|
86
|
|
|
78
|
|
||
Total current assets
|
1,211
|
|
|
1,119
|
|
||
Property, plant and equipment, net
|
1,141
|
|
|
1,173
|
|
||
Investments in unconsolidated subsidiaries
|
14
|
|
|
15
|
|
||
Goodwill
|
2,990
|
|
|
2,988
|
|
||
Other intangible assets, net
|
2,684
|
|
|
2,694
|
|
||
Other non-current assets
|
159
|
|
|
127
|
|
||
Non-current deferred tax assets
|
74
|
|
|
85
|
|
||
Total assets
|
$
|
8,273
|
|
|
$
|
8,201
|
|
Liabilities and Stockholders' Equity
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
289
|
|
|
$
|
271
|
|
Deferred revenue
|
64
|
|
|
65
|
|
||
Short-term borrowings and current portion of long-term obligations
|
3
|
|
|
66
|
|
||
Income taxes payable
|
10
|
|
|
33
|
|
||
Other current liabilities
|
672
|
|
|
595
|
|
||
Total current liabilities
|
1,038
|
|
|
1,030
|
|
||
Long-term obligations
|
2,588
|
|
|
2,508
|
|
||
Non-current deferred tax liabilities
|
801
|
|
|
755
|
|
||
Non-current deferred revenue
|
1,250
|
|
|
1,318
|
|
||
Other non-current liabilities
|
302
|
|
|
313
|
|
||
Total liabilities
|
5,979
|
|
|
5,924
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Preferred stock, $0.01 par value, 15,000,000 shares authorized, no shares issued
|
—
|
|
|
—
|
|
||
Common stock, $0.01 par value, 800,000,000 shares authorized, 192,957,696 and 197,979,971 shares issued and outstanding for 2014 and 2013, respectively
|
2
|
|
|
2
|
|
||
Additional paid-in capital
|
658
|
|
|
970
|
|
||
Retained earnings
|
1,771
|
|
|
1,393
|
|
||
Accumulated other comprehensive loss
|
(137
|
)
|
|
(88
|
)
|
||
Total stockholders' equity
|
2,294
|
|
|
2,277
|
|
||
Total liabilities and stockholders' equity
|
$
|
8,273
|
|
|
$
|
8,201
|
|
|
For the
|
||||||||||
|
Year Ended
|
||||||||||
|
December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
703
|
|
|
$
|
624
|
|
|
$
|
629
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation expense
|
199
|
|
|
196
|
|
|
203
|
|
|||
Amortization expense
|
36
|
|
|
38
|
|
|
37
|
|
|||
Amortization of deferred revenue
|
(65
|
)
|
|
(65
|
)
|
|
(65
|
)
|
|||
Employee stock-based compensation expense
|
48
|
|
|
37
|
|
|
35
|
|
|||
Deferred income taxes
|
43
|
|
|
138
|
|
|
91
|
|
|||
Other, net
|
21
|
|
|
35
|
|
|
(18
|
)
|
|||
Changes in assets and liabilities, net of effects of acquisition:
|
|
|
|
|
|
||||||
Trade accounts receivable
|
—
|
|
|
(13
|
)
|
|
36
|
|
|||
Other accounts receivable
|
(5
|
)
|
|
(9
|
)
|
|
1
|
|
|||
Inventories
|
(8
|
)
|
|
(3
|
)
|
|
17
|
|
|||
Other current and non-current assets
|
(25
|
)
|
|
456
|
|
|
(21
|
)
|
|||
Other current and non-current liabilities
|
58
|
|
|
(556
|
)
|
|
(7
|
)
|
|||
Trade accounts payable
|
29
|
|
|
(6
|
)
|
|
12
|
|
|||
Income taxes payable
|
(12
|
)
|
|
(6
|
)
|
|
(468
|
)
|
|||
Net cash provided by operating activities
|
1,022
|
|
|
866
|
|
|
482
|
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Acquisition of business
|
(19
|
)
|
|
(10
|
)
|
|
—
|
|
|||
Purchase of property, plant and equipment
|
(170
|
)
|
|
(179
|
)
|
|
(217
|
)
|
|||
Purchase of intangible assets
|
(1
|
)
|
|
(5
|
)
|
|
(7
|
)
|
|||
Proceeds from disposals of property, plant and equipment
|
8
|
|
|
1
|
|
|
7
|
|
|||
Other, net
|
(3
|
)
|
|
(2
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(185
|
)
|
|
(195
|
)
|
|
(217
|
)
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Proceeds from senior unsecured notes
|
—
|
|
|
—
|
|
|
500
|
|
|||
Repayment of senior unsecured notes
|
—
|
|
|
(250
|
)
|
|
(450
|
)
|
|||
Net (repayment) issuance of commercial paper
|
(65
|
)
|
|
65
|
|
|
—
|
|
|||
Repurchase of shares of common stock
|
(400
|
)
|
|
(400
|
)
|
|
(400
|
)
|
|||
Dividends paid
|
(317
|
)
|
|
(302
|
)
|
|
(284
|
)
|
|||
Tax withholdings related to net share settlements of certain stock awards
|
(16
|
)
|
|
(13
|
)
|
|
—
|
|
|||
Proceeds from stock options exercised
|
41
|
|
|
15
|
|
|
22
|
|
|||
Excess tax benefit on stock-based compensation
|
11
|
|
|
6
|
|
|
16
|
|
|||
Deferred financing charges paid
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||
Other, net
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|||
Net cash used in financing activities
|
(747
|
)
|
|
(880
|
)
|
|
(603
|
)
|
|||
Cash and cash equivalents — net change from:
|
|
|
|
|
|
||||||
Operating, investing and financing activities
|
90
|
|
|
(209
|
)
|
|
(338
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(6
|
)
|
|
(4
|
)
|
|
3
|
|
|||
Cash and cash equivalents at beginning of year
|
153
|
|
|
366
|
|
|
701
|
|
|||
Cash and cash equivalents at end of period
|
$
|
237
|
|
|
$
|
153
|
|
|
$
|
366
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|||||||||||
|
Common Stock
|
|
Additional
|
|
|
|
Other
|
|
|
|||||||||||||
|
Issued
|
|
Paid-In
|
|
Retained
|
|
Comprehensive
|
|
Total
|
|||||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Earnings
|
|
Loss
|
|
Equity
|
|||||||||||
Balance as of January 1, 2012
|
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
|
|
|||||
Shares issued under employee stock-based compensation plans and other
|
1.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
703
|
|
|
—
|
|
|
703
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(49
|
)
|
|
(49
|
)
|
|||||
Dividends declared, $1.64 per share
|
—
|
|
|
—
|
|
|
4
|
|
|
(325
|
)
|
|
—
|
|
|
(321
|
)
|
|||||
Stock options exercised and stock-based compensation, net of tax of ($11)
|
—
|
|
|
—
|
|
|
84
|
|
|
—
|
|
|
—
|
|
|
84
|
|
|||||
Common stock repurchases
|
(6.8
|
)
|
|
—
|
|
|
(400
|
)
|
|
—
|
|
|
—
|
|
|
(400
|
)
|
|||||
Balance as of December 31, 2014
|
193.0
|
|
|
$
|
2
|
|
|
$
|
658
|
|
|
$
|
1,771
|
|
|
$
|
(137
|
)
|
|
$
|
2,294
|
|
1
.
|
Business and Basis of Presentation
|
2
.
|
Significant Accounting Policies
|
|
2014
|
|
2013
|
|
2012
|
||||||
Balance, beginning of the year
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Net charge to costs and expenses
|
1
|
|
|
1
|
|
|
2
|
|
|||
Write-offs and adjustments
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|||
Balance, end of the year
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Type of Asset
|
Useful Life
|
||
Buildings
|
|
|
40 years
|
Building improvements
|
5
|
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
|
8 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
|
||
2014
|
1.16
|
|
|
1.10
|
|
2013
|
1.06
|
|
|
1.03
|
|
2012
|
0.99
|
|
|
1.00
|
|
3
.
|
Acquisition
s
|
|
|
Fair Value
|
|
Useful Life
|
||
Property, plant & equipment
|
|
$
|
10
|
|
|
1 - 10 years
|
Distribution rights: indefinite-lived
|
|
3
|
|
|
—
|
|
Goodwill
|
|
5
|
|
|
—
|
|
Current assets, net of current liabilities assumed
|
|
3
|
|
|
—
|
|
Total
|
|
$
|
21
|
|
|
|
|
|
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,
|
||||
|
2014
|
|
2013
|
||||
Raw materials
|
$
|
92
|
|
|
$
|
86
|
|
Spare parts
|
18
|
|
|
22
|
|
||
Work in process
|
5
|
|
|
4
|
|
||
Finished goods
|
126
|
|
|
122
|
|
||
Inventories at FIFO cost
|
241
|
|
|
234
|
|
||
Reduction to LIFO cost
|
(37
|
)
|
|
(34
|
)
|
||
Inventories
|
$
|
204
|
|
|
$
|
200
|
|
5
.
|
Property, Plant and Equipment
|
|
December 31,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
Land
|
$
|
73
|
|
|
$
|
73
|
|
Buildings and improvements
|
488
|
|
|
483
|
|
||
Machinery and equipment
|
1,389
|
|
|
1,302
|
|
||
Cold drink equipment
|
299
|
|
|
310
|
|
||
Software
|
244
|
|
|
221
|
|
||
Construction in progress
|
49
|
|
|
63
|
|
||
Gross property, plant and equipment
|
2,542
|
|
|
2,452
|
|
||
Less: accumulated depreciation and amortization
|
(1,401
|
)
|
|
(1,279
|
)
|
||
Net property, plant and equipment
|
$
|
1,141
|
|
|
$
|
1,173
|
|
6
.
|
Investments 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, 2013
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
$
|
1,732
|
|
|
$
|
1,220
|
|
|
$
|
180
|
|
|
$
|
31
|
|
|
$
|
3,163
|
|
Accumulated impairment losses
|
—
|
|
|
—
|
|
|
(180
|
)
|
|
—
|
|
|
(180
|
)
|
|||||
|
1,732
|
|
|
1,220
|
|
|
—
|
|
|
31
|
|
|
2,983
|
|
|||||
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
|
|
|||||
Foreign currency impact
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(3
|
)
|
|||||
Acquisition activity
(3)
|
—
|
|
|
2
|
|
|
3
|
|
|
—
|
|
|
5
|
|
|||||
Balance as of December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Goodwill
|
1,732
|
|
|
1,222
|
|
|
188
|
|
|
28
|
|
|
3,170
|
|
|||||
Accumulated impairment losses
|
—
|
|
|
—
|
|
|
(180
|
)
|
|
—
|
|
|
(180
|
)
|
|||||
|
$
|
1,732
|
|
|
$
|
1,222
|
|
|
$
|
8
|
|
|
$
|
28
|
|
|
$
|
2,990
|
|
(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.
|
(3)
|
The acquisition activity represents the goodwill associated with the purchase of Davis. See Note
3
for further information related to the acquisition.
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
|
Gross
|
|
Accumulated
|
|
Net
|
|
Gross
|
|
Accumulated
|
|
Net
|
||||||||||||
|
Amount
|
|
Amortization
|
|
Amount
|
|
Amount
|
|
Amortization
|
|
Amount
|
||||||||||||
Intangible assets with indefinite lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Brands
(1)
|
$
|
2,643
|
|
|
$
|
—
|
|
|
$
|
2,643
|
|
|
$
|
2,652
|
|
|
$
|
—
|
|
|
$
|
2,652
|
|
Distribution rights
(2)
|
27
|
|
|
—
|
|
|
27
|
|
|
24
|
|
|
—
|
|
|
24
|
|
||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Brands
|
29
|
|
|
(28
|
)
|
|
1
|
|
|
29
|
|
|
(27
|
)
|
|
2
|
|
||||||
Distribution rights
|
13
|
|
|
(4
|
)
|
|
9
|
|
|
12
|
|
|
(3
|
)
|
|
9
|
|
||||||
Customer relationships
|
76
|
|
|
(72
|
)
|
|
4
|
|
|
76
|
|
|
(69
|
)
|
|
7
|
|
||||||
Bottler agreements
|
19
|
|
|
(19
|
)
|
|
—
|
|
|
19
|
|
|
(19
|
)
|
|
—
|
|
||||||
Total
|
$
|
2,807
|
|
|
$
|
(123
|
)
|
|
$
|
2,684
|
|
|
$
|
2,812
|
|
|
$
|
(118
|
)
|
|
$
|
2,694
|
|
(1)
|
In
2014
, brands with indefinite lives decreased due to
$9 million
impact of foreign currency translation.
|
(2)
|
In 2014, distribution rights included
$3 million
indefinite-lived distribution rights associated with the purchase of Davis. See Note
3
for further information related to the acquisition.
|
Year
|
Aggregate Amortization Expense
|
||
2015
|
$
|
6
|
|
2016
|
3
|
|
|
2017
|
1
|
|
|
2018
|
1
|
|
|
2019
|
—
|
|
Headroom Percentage
|
|
Fair Value
|
|
Carrying Value
|
||||
0 - 10%
|
|
$
|
—
|
|
|
$
|
—
|
|
11 - 20%
|
|
—
|
|
|
—
|
|
||
21 - 50%
|
|
259
|
|
|
191
|
|
||
> 50%
|
|
14,050
|
|
|
2,458
|
|
||
|
|
$
|
14,309
|
|
|
$
|
2,649
|
|
Headroom Percentage
|
|
Fair Value
|
|
Carrying Value
|
||||
0 - 10%
|
|
$
|
—
|
|
|
$
|
—
|
|
11 - 20%
|
|
—
|
|
|
—
|
|
||
21 - 50%
|
|
918
|
|
|
655
|
|
||
> 50%
|
|
11,034
|
|
|
1,997
|
|
||
|
|
$
|
11,952
|
|
|
$
|
2,652
|
|
8
.
|
Prepaid Expenses and Other Current Assets and Other Current Liabilities
|
|
December 31,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
Prepaid expenses and other current assets:
|
|
|
|
||||
Customer incentive programs
|
$
|
18
|
|
|
$
|
24
|
|
Derivative instruments
|
11
|
|
|
21
|
|
||
Current assets held for sale
|
12
|
|
|
—
|
|
||
Other
|
45
|
|
|
33
|
|
||
Total prepaid expenses and other current assets
|
$
|
86
|
|
|
$
|
78
|
|
Other current liabilities:
|
|
|
|
||||
Customer rebates and incentives
|
$
|
248
|
|
|
$
|
214
|
|
Accrued compensation
|
127
|
|
|
107
|
|
||
Insurance liability
|
46
|
|
|
47
|
|
||
Interest accrual
|
26
|
|
|
26
|
|
||
Dividends payable
|
79
|
|
|
75
|
|
||
Derivative instruments
|
18
|
|
|
13
|
|
||
Other
|
128
|
|
|
113
|
|
||
Total other current liabilities
|
$
|
672
|
|
|
$
|
595
|
|
9
.
|
Long-term Obligations and Borrowing Arrangements
|
|
December 31,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
Senior unsecured notes
(1)
|
$
|
2,505
|
|
|
$
|
2,453
|
|
Capital lease obligations
|
86
|
|
|
56
|
|
||
Subtotal
|
2,591
|
|
|
2,509
|
|
||
Less — current portion
|
(3
|
)
|
|
(1
|
)
|
||
Long-term obligations
|
$
|
2,588
|
|
|
$
|
2,508
|
|
(1)
|
The carrying amount includes the unamortized net discount on debt issuances and adjustments of
$34 million
and
$18 million
as of
December 31, 2014 and 2013
, 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,
|
||||
|
2014
|
|
2013
|
||||
Commercial paper
|
$
|
—
|
|
|
$
|
65
|
|
Current portion of long-term obligations
|
3
|
|
|
1
|
|
||
Short-term borrowings and current portion of long-term obligations
|
$
|
3
|
|
|
$
|
66
|
|
|
|
|
|
|
|
Principal Amount
|
|
Carrying Amount
|
||||||||
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||
Issuance
|
|
Maturity Date
|
|
Rate
|
|
2014
|
|
2014
|
|
2013
|
||||||
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
|
|
|
250
|
|
|
248
|
|
|||
2020 Notes
|
|
January 15, 2020
|
|
2.00%
|
|
250
|
|
|
245
|
|
|
241
|
|
|||
2021 Notes
|
|
November 15, 2021
|
|
3.20%
|
|
250
|
|
|
249
|
|
|
241
|
|
|||
2022 Notes
|
|
November 15, 2022
|
|
2.70%
|
|
250
|
|
|
265
|
|
|
247
|
|
|||
2038 Notes
|
|
May 1, 2038
|
|
7.45%
|
|
250
|
|
|
272
|
|
|
252
|
|
|||
|
|
|
|
|
|
$
|
2,474
|
|
|
$
|
2,505
|
|
|
$
|
2,453
|
|
|
Amount Utilized
|
|
Balances Available
|
||||
Revolver
|
$
|
—
|
|
|
$
|
499
|
|
Letters of credit
|
1
|
|
|
74
|
|
||
Swingline advances
|
—
|
|
|
50
|
|
|
Balance Sheet Location
|
|
December 31,
2014 |
|
December 31,
2013 |
||||
Assets:
|
|
|
|
|
|
||||
Derivative instruments designated as hedging instruments under U.S. GAAP:
|
|
|
|
|
|
||||
Interest rate contracts
(1)
|
Prepaid expenses and other current assets
|
|
$
|
11
|
|
|
$
|
17
|
|
Foreign exchange forward contracts
|
Prepaid expenses and other current assets
|
|
—
|
|
|
3
|
|
||
Interest rate contracts
|
Other non-current assets
|
|
29
|
|
|
—
|
|
||
Derivative instruments not designated as hedging instruments under U.S. GAAP:
|
|
|
|
|
|
||||
Commodity contracts
|
Prepaid expenses and other current assets
|
|
—
|
|
|
1
|
|
||
Total assets
|
|
|
$
|
40
|
|
|
$
|
21
|
|
Liabilities:
|
|
|
|
|
|
||||
Derivative instruments designated as hedging instruments under U.S. GAAP:
|
|
|
|
|
|
||||
Interest rate contracts
|
Other non-current liabilities
|
|
9
|
|
|
34
|
|
||
Derivative instruments not designated as hedging instruments under U.S. GAAP:
|
|
|
|
|
|
||||
Commodity contracts
|
Other current liabilities
|
|
18
|
|
|
13
|
|
||
Commodity contracts
|
Other non-current liabilities
|
|
8
|
|
|
—
|
|
||
Total liabilities
|
|
|
$
|
35
|
|
|
$
|
47
|
|
(1)
|
Interest rate contracts as of
December 31, 2014
did not include any offsetting amounts. Interest rate contracts as of
December 31,
2013
include gross and offsetting amounts of
$19 million
and
$2 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 (Loss) Gain Recognized in Comprehensive Income
|
|
Amount of (Loss) Gain Reclassified from AOCL into Income
|
|
Location of (Loss) Gain Reclassified from AOCL into Income
|
||||
For the year ended December 31, 2014:
|
|
|
|
|
|
||||
Interest rate contracts
(1)
|
$
|
(2
|
)
|
|
$
|
(8
|
)
|
|
Interest expense
|
Foreign exchange forward contracts
|
(2
|
)
|
|
1
|
|
|
Cost of sales
|
||
Total
|
$
|
(4
|
)
|
|
$
|
(7
|
)
|
|
|
|
|
|
|
|
|
||||
For the year ended December 31, 2013:
|
|
|
|
|
|
||||
Interest rate contracts
(1)
|
$
|
—
|
|
|
$
|
(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
|
)
|
|
|
(1)
|
During the fourth quarter of 2011, the Company unwound forward starting swaps associated with the 2019 and 2021 Notes with an aggregate notional amount of
$250 million
. Upon termination, the Company paid
$25 million
to the counterparties, which will be amortized to interest expense over the term of the issued debt. During the fourth quarter of 2012, the Company unwound forward starting swaps associated with the 2020 and 2022 Notes with an aggregate notional amount of
$300 million
. Upon termination, the Company paid
$49 million
to the counterparties, which will be amortized to interest expense over the term of the issued debt.
|
|
|
Amount of Gain
|
|
Location of Gain
|
||
|
|
Recognized in Income
|
|
Recognized in Income
|
||
For the year ended December 31, 2014:
|
|
|
|
|
||
Interest rate contracts
|
|
$
|
16
|
|
|
Interest expense
|
Total
|
|
$
|
16
|
|
|
|
|
|
|
|
|
||
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
|
|
|
|
(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 year ended December 31, 2012, the amortization of this adjustment was
$2 million
.
|
|
|
Amount of (Loss) Gain
|
|
Location of (Loss) Gain
|
||
|
|
Recognized in Income
|
|
Recognized in Income
|
||
For the year ended December 31, 2014:
|
|
|
|
|
||
Commodity contracts
(1)
|
|
$
|
1
|
|
|
Cost of sales
|
Commodity contracts
(1)
|
|
(26
|
)
|
|
SG&A expenses
|
|
Total
|
|
$
|
(25
|
)
|
|
|
|
|
|
|
|
||
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
|
|
|
|
(1)
|
Commodity contracts include both realized and unrealized gains and losses.
|
|
December 31,
|
|
December 31,
|
||||
|
2014
|
|
2013
|
||||
Other non-current assets:
|
|
|
|
||||
Deferred financing costs, net
|
$
|
9
|
|
|
$
|
11
|
|
Customer incentive programs
|
55
|
|
|
59
|
|
||
Marketable securities - trading
|
25
|
|
|
21
|
|
||
Derivative instruments
|
29
|
|
|
—
|
|
||
Assets held for sale
|
—
|
|
|
1
|
|
||
Other
|
41
|
|
|
35
|
|
||
Total other non-current assets
|
$
|
159
|
|
|
$
|
127
|
|
Other non-current liabilities:
|
|
|
|
||||
Long-term payables due to Mondelēz
|
$
|
37
|
|
|
$
|
47
|
|
Long-term pension and post-retirement liability
|
44
|
|
|
26
|
|
||
Multi-employer pension plan withdrawal liability
|
57
|
|
|
56
|
|
||
Insurance liability
|
90
|
|
|
89
|
|
||
Derivative instruments
|
17
|
|
|
34
|
|
||
Deferred compensation liability
|
25
|
|
|
21
|
|
||
Other
|
32
|
|
|
40
|
|
||
Total other non-current liabilities
|
$
|
302
|
|
|
$
|
313
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Current:
|
|
|
|
|
|
|
|
|
|||
Federal
|
$
|
259
|
|
|
$
|
(211
|
)
|
|
$
|
215
|
|
State
|
49
|
|
|
(58
|
)
|
|
32
|
|
|||
Non-U.S.
|
20
|
|
|
50
|
|
|
11
|
|
|||
Total current provision (benefit)
|
328
|
|
|
(219
|
)
|
|
258
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
36
|
|
|
95
|
|
|
72
|
|
|||
State
|
1
|
|
|
10
|
|
|
10
|
|
|||
Non-U.S.
|
6
|
|
|
33
|
|
|
9
|
|
|||
Total deferred provision
|
43
|
|
|
138
|
|
|
91
|
|
|||
Total provision (benefit) for income taxes
|
$
|
371
|
|
|
$
|
(81
|
)
|
|
$
|
349
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Statutory federal income tax of 35%
|
$
|
375
|
|
|
$
|
190
|
|
|
$
|
342
|
|
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
|
32
|
|
|
34
|
|
|
35
|
|
|||
U.S. federal domestic manufacturing benefit
|
(26
|
)
|
|
(23
|
)
|
|
(21
|
)
|
|||
Impact of non-U.S. operations
|
(14
|
)
|
|
(7
|
)
|
|
(9
|
)
|
|||
Indemnified taxes
(2)
|
—
|
|
|
5
|
|
|
8
|
|
|||
Other
|
4
|
|
|
(4
|
)
|
|
(6
|
)
|
|||
Total provision (benefit) provision for income taxes
|
$
|
371
|
|
|
$
|
(81
|
)
|
|
$
|
349
|
|
Effective tax rate
|
34.6
|
%
|
|
(14.9
|
)%
|
|
35.7
|
%
|
(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,
|
||||
|
2014
|
|
2013
|
||||
Deferred income tax assets:
|
|
|
|
|
|
||
Deferred revenue
|
$
|
501
|
|
|
$
|
530
|
|
Accrued liabilities
|
72
|
|
|
70
|
|
||
Pension and postretirement benefits
|
36
|
|
|
29
|
|
||
Net operating loss and credit carryforwards
|
22
|
|
|
24
|
|
||
Compensation
|
34
|
|
|
22
|
|
||
Inventory
|
4
|
|
|
10
|
|
||
Other
|
37
|
|
|
35
|
|
||
|
706
|
|
|
720
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Intangible assets and goodwill
|
(1,116
|
)
|
|
(1,075
|
)
|
||
Fixed assets
|
(198
|
)
|
|
(204
|
)
|
||
Other
|
(21
|
)
|
|
(12
|
)
|
||
|
(1,335
|
)
|
|
(1,291
|
)
|
||
Valuation allowance
|
(31
|
)
|
|
(33
|
)
|
||
Net deferred income tax liability
|
$
|
(660
|
)
|
|
$
|
(604
|
)
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Beginning balance
|
$
|
14
|
|
|
$
|
469
|
|
|
$
|
480
|
|
Increases related to tax positions taken during the current year
|
—
|
|
|
1
|
|
|
—
|
|
|||
Increases related to tax positions taken during the prior year
|
3
|
|
|
6
|
|
|
3
|
|
|||
Decreases related to tax positions taken during the prior year
|
(2
|
)
|
|
(432
|
)
|
|
(4
|
)
|
|||
Decreases related to settlements with taxing authorities
|
(1
|
)
|
|
(27
|
)
|
|
(4
|
)
|
|||
Decreases related to lapse of applicable statute of limitations
|
(1
|
)
|
|
(3
|
)
|
|
(6
|
)
|
|||
Ending balance
|
$
|
13
|
|
|
$
|
14
|
|
|
$
|
469
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Indemnity expense (income) from Mondelēz
|
$
|
—
|
|
|
$
|
387
|
|
|
$
|
(9
|
)
|
Other
|
—
|
|
|
(4
|
)
|
|
—
|
|
|||
Other expense (income), net
|
$
|
—
|
|
|
$
|
383
|
|
|
$
|
(9
|
)
|
|
|
|
Postretirement
|
||||||||||||
|
Pension Plans
|
|
Medical Plans
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Projected Benefit Obligations
|
|
|
|
|
|
|
|
|
|
|
|
||||
As of beginning of year
|
$
|
259
|
|
|
$
|
308
|
|
|
$
|
7
|
|
|
$
|
9
|
|
Service cost
|
2
|
|
|
3
|
|
|
—
|
|
|
—
|
|
||||
Interest cost
|
13
|
|
|
13
|
|
|
—
|
|
|
—
|
|
||||
Actuarial losses (gains), net
|
46
|
|
|
(35
|
)
|
|
1
|
|
|
(1
|
)
|
||||
Benefits paid
|
(8
|
)
|
|
(10
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Currency exchange adjustments
|
(3
|
)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
||||
Settlements
|
(82
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
||||
As of end of year
|
$
|
227
|
|
|
$
|
259
|
|
|
$
|
8
|
|
|
$
|
7
|
|
Fair Value of Plan Assets
|
|
|
|
|
|
|
|
||||||||
As of beginning of year
|
$
|
237
|
|
|
$
|
257
|
|
|
$
|
5
|
|
|
$
|
5
|
|
Actual return on plan assets
|
30
|
|
|
7
|
|
|
1
|
|
|
—
|
|
||||
Employer contributions
|
12
|
|
|
2
|
|
|
—
|
|
|
1
|
|
||||
Benefits paid
|
(8
|
)
|
|
(10
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Currency exchange adjustments
|
(2
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Settlements
|
(82
|
)
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
||||
As of end of year
|
$
|
187
|
|
|
$
|
237
|
|
|
$
|
6
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
||||||||
Funded status of plan / net amount recognized
|
$
|
(40
|
)
|
|
$
|
(22
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
Funded status — overfunded
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Funded status — underfunded
|
(40
|
)
|
|
(23
|
)
|
|
(4
|
)
|
|
(4
|
)
|
||||
Net amount recognized consists of:
|
|
|
|
|
|
|
|
||||||||
Non-current assets
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Current liabilities
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||
Non-current liabilities
|
(40
|
)
|
|
(22
|
)
|
|
(4
|
)
|
|
(4
|
)
|
||||
Net amount recognized
|
$
|
(40
|
)
|
|
$
|
(22
|
)
|
|
$
|
(2
|
)
|
|
$
|
(2
|
)
|
|
2014
|
|
2013
|
||||
Aggregate projected benefit obligation
|
$
|
226
|
|
|
$
|
256
|
|
Aggregate accumulated benefit obligation
|
223
|
|
|
256
|
|
||
Aggregate fair value of plan assets
|
186
|
|
|
234
|
|
|
|
|
Postretirement
|
||||||||||||||||||||
|
Pension Plans
|
|
Medical Plans
|
||||||||||||||||||||
|
For the Year Ended December 31,
|
||||||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
Net Periodic Benefit Costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Service cost
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
13
|
|
|
13
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Expected return on assets
|
(14
|
)
|
|
(14
|
)
|
|
(15
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of actuarial loss
|
3
|
|
|
4
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Amortization of prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
||||||
Curtailments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||||
Settlements
|
16
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net periodic benefit costs
|
$
|
20
|
|
|
$
|
9
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
Changes Recognized in OCI
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Curtailment effects
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
Settlement effects
|
(16
|
)
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Current year actuarial loss (gain)
|
30
|
|
|
(29
|
)
|
|
12
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||||
Recognition of actuarial loss
|
(3
|
)
|
|
(4
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognition of prior service credit
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
2
|
|
||||||
Total recognized in OCI
|
$
|
11
|
|
|
$
|
(36
|
)
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
|
|
Postretirement
|
||||||||||||
|
Pension Plans
|
|
Medical Plans
|
||||||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||||||
Prior service cost (credits)
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
Net losses
|
56
|
|
|
45
|
|
|
3
|
|
|
4
|
|
||||
Amounts in AOCL
|
$
|
58
|
|
|
$
|
47
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
Projected
|
|
Actual
|
||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Pension plans
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
2
|
|
Postretirement medical plans
|
—
|
|
|
—
|
|
|
1
|
|
|||
Total
|
$
|
1
|
|
|
$
|
12
|
|
|
$
|
3
|
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020-2024
|
||||||||||||
Pension plans
|
$
|
11
|
|
|
$
|
11
|
|
|
$
|
12
|
|
|
$
|
12
|
|
|
$
|
13
|
|
|
$
|
72
|
|
Postretirement medical plans
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
3
|
|
|
|
|
Postretirement
|
||||||||
|
Pension Plans
|
|
Medical Plans
|
||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Weighted-average discount rate
|
4.15
|
%
|
|
5.00
|
%
|
|
4.15
|
%
|
|
5.00
|
%
|
Rate of increase in compensation levels
|
3.00
|
%
|
|
3.00
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Pension Plans
|
|
Postretirement Medical Plans
|
||||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
||||
Weighted-average discount rate
|
4.92
|
%
|
|
5.70
|
%
|
|
3.75
|
%
|
|
4.50
|
%
|
Rate of increase in compensation levels
|
3.89
|
%
|
|
3.87
|
%
|
|
N/A
|
|
|
N/A
|
|
|
Target
|
|
Actual
|
|||||
Asset Category
|
2015
|
|
2014
|
|
2013
|
|||
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,
|
|||||||
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|||||||
Cash and cash equivalents
|
10
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities
|
|
|
|
|
|
|
|
|||||||
U.S. Large-Cap equities
|
30
|
|
|
39
|
|
|
1
|
|
|
1
|
|
|||
International equities
|
19
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|||
Fixed income securities
|
|
|
|
|
|
|
|
|||||||
Derivative financial instruments
|
31
|
|
|
18
|
|
|
1
|
|
|
—
|
|
|||
U.S. Treasuries
|
22
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|||
U.S. Municipal bonds
|
5
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|||
U.S. Corporate bonds
|
82
|
|
|
138
|
|
|
4
|
|
|
4
|
|
|||
International bonds
|
19
|
|
|
26
|
|
|
—
|
|
|
—
|
|
|||
Total assets
|
218
|
|
|
255
|
|
|
7
|
|
|
5
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Fixed income securities
|
|
|
|
|
|
|
|
|||||||
Derivative financial instruments
|
31
|
|
|
18
|
|
|
1
|
|
|
—
|
|
|||
Total liabilities
|
31
|
|
|
18
|
|
|
1
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|||||||
Total net assets
|
187
|
|
|
$
|
237
|
|
|
$
|
6
|
|
|
$
|
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,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Multi-employer Plan Expense
|
|
|
|
|
|
|
|
|
|||
Contributions to individually significant multi-employer plans
(1)
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Contributions to all other multi-employer plans
|
3
|
|
|
3
|
|
|
2
|
|
|||
Withdrawal charge for individually significant multi-employer plans
(2)
|
—
|
|
|
56
|
|
|
—
|
|
|||
Withdrawal charge for all other multi-employer plans
(3)
|
—
|
|
|
1
|
|
|
—
|
|
|||
Total
|
$
|
6
|
|
|
$
|
63
|
|
|
$
|
5
|
|
(1)
|
Contributions to individually significant multi-employer plans for the year ended December 31, 2014 include amounts contributed to the Soft Drink Industry Local Union 710 Pension Fund ("Local 710") which the Company fully withdrew and ceased participation in the plan as of December 31, 2014. Local 710 was considered an individually significant multi-employer when the contributions were made to the plan prior to the withdrawal and for the years ended December 31, 2014, 2013 and 2012.
|
(2)
|
During the fourth quarter of 2013, the Company recognized a
$56 million
withdrawal charge for the withdrawal from the Local 710. 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.
|
(3)
|
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
|
|
Central States, Southeast and Southwest Areas Pension Fund ("Central States")
|
Plan's Employer Identification Number
|
|
36-6044243
|
Plan Number
|
|
001
|
Expiration dates of the collective bargain agreements
|
|
January 20, 2015 - September 9, 2018
(2)
|
FIP/RP Status Pending/Implemented
(1)
|
|
Yes
|
PPA zone status as of December 31, 2014
|
|
Red
|
PPA zone status as of December 31, 2013
|
|
Red
|
Surcharge imposed
|
|
Yes
|
(1)
|
FIP/RP Status Pending/Implemented indicates the plan for which a financial improvement plan ("FIP") or a rehabilitation plan ("RP") is either pending or implemented.
|
(2)
|
Central States includes
eight
collective bargaining agreements. The largest agreement, which is set to expire June 21, 2015, covers approximately
48%
of the employees included in Central States. Approximately
72%
of the employees included in Central States are covered by three collective bargaining agreements set to expire during 2015.
|
Year
|
Estimated Contributions
|
||
2015
|
$
|
1
|
|
2016
|
—
|
|
|
2017
|
—
|
|
|
2018
|
—
|
|
|
Fair Value Measurements at December 31, 2014
|
||||||||||
|
Quoted Prices in Active Markets for Identical Assets
|
|
Significant Other Observable Inputs
|
|
Significant Unobservable Inputs
|
||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||
Interest rate contracts
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
Marketable securities - trading
|
25
|
|
|
—
|
|
|
—
|
|
|||
Total assets
|
$
|
25
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Commodity contracts
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
—
|
|
Interest rate contracts
|
—
|
|
|
9
|
|
|
—
|
|
|||
Total liabilities
|
$
|
—
|
|
|
$
|
35
|
|
|
$
|
—
|
|
|
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, 2014
|
||||||||||||||
|
|
|
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
|
$
|
10
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities
(1)
|
|
|
|
|
|
|
|
||||||||
U.S. Large-Cap equities
(2)
|
30
|
|
|
—
|
|
|
30
|
|
|
—
|
|
||||
International equities
(2)
|
19
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
(3)
|
31
|
|
|
—
|
|
|
31
|
|
|
—
|
|
||||
U.S. Treasuries
|
22
|
|
|
22
|
|
|
—
|
|
|
—
|
|
||||
U.S. Municipal bonds
(4)
|
5
|
|
|
—
|
|
|
5
|
|
|
—
|
|
||||
U.S. Corporate bonds
(4)
|
82
|
|
|
—
|
|
|
82
|
|
|
—
|
|
||||
International bonds
(2)
|
19
|
|
|
—
|
|
|
19
|
|
|
—
|
|
||||
Total assets
|
218
|
|
|
32
|
|
|
186
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
(3)
|
31
|
|
|
—
|
|
|
31
|
|
|
—
|
|
||||
Total liabilities
|
31
|
|
|
—
|
|
|
31
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total net assets
|
$
|
187
|
|
|
$
|
32
|
|
|
$
|
155
|
|
|
$
|
—
|
|
|
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
|
|
|
$
|
—
|
|
(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, 2014
|
||||||||||||||
|
|
|
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
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
(4)
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
U.S. Treasuries
|
1
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
U.S. Corporate bonds
(3)
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Total
|
7
|
|
|
1
|
|
|
6
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Fixed income securities
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
(4)
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Total liabilities
|
1
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Total net assets
|
$
|
6
|
|
|
$
|
1
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
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
|
|
|
$
|
—
|
|
(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.
|
(4)
|
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.
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Long-term debt – 2016 Notes
|
$
|
500
|
|
|
$
|
510
|
|
|
$
|
500
|
|
|
$
|
519
|
|
Long-term debt – 2018 Notes
|
724
|
|
|
835
|
|
|
724
|
|
|
856
|
|
||||
Long-term debt – 2019 Notes
(1)
|
250
|
|
|
253
|
|
|
248
|
|
|
252
|
|
||||
Long-term debt – 2020 Notes
(1)
|
245
|
|
|
244
|
|
|
241
|
|
|
236
|
|
||||
Long-term debt – 2021 Notes
(1)
|
249
|
|
|
255
|
|
|
241
|
|
|
241
|
|
||||
Long-term debt – 2022 Notes
(1)
|
265
|
|
|
244
|
|
|
247
|
|
|
226
|
|
||||
Long-term debt – 2038 Notes
(1)
|
272
|
|
|
363
|
|
|
252
|
|
|
317
|
|
(1)
|
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,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Total stock-based compensation expense
|
$
|
48
|
|
|
$
|
37
|
|
|
$
|
35
|
|
Income tax benefit recognized in the income statement
|
(17
|
)
|
|
(12
|
)
|
|
(12
|
)
|
|||
Stock-based compensation expense, net of tax
|
$
|
31
|
|
|
$
|
25
|
|
|
$
|
23
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Fair value of options at grant date
|
|
$
|
5.80
|
|
|
$
|
6.92
|
|
|
$
|
7.05
|
|
Risk free interest rate
|
|
1.25
|
%
|
|
0.68
|
%
|
|
0.87
|
%
|
|||
Expected term of options (in years)
|
|
4.4
|
|
|
4.5
|
|
|
5.1
|
|
|||
Dividend yield
|
|
3.35
|
%
|
|
3.39
|
%
|
|
3.52
|
%
|
|||
Expected volatility
|
|
20.03
|
%
|
|
27.42
|
%
|
|
30.64
|
%
|
|
Stock Options
|
|
Weighted Average Exercise Price
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value (in millions)
|
|||||
Outstanding as of January 1, 2014
|
2,031,833
|
|
|
$
|
37.59
|
|
|
7.65
|
|
$
|
23
|
|
Granted
|
667,139
|
|
|
51.68
|
|
|
|
|
|
|||
Exercised
|
(1,151,479
|
)
|
|
35.40
|
|
|
|
|
24
|
|
||
Forfeited or expired
|
(18,258
|
)
|
|
46.99
|
|
|
|
|
|
|||
Outstanding as of December 31, 2014
|
1,529,235
|
|
|
45.27
|
|
|
8.20
|
|
40
|
|
||
Exercisable as of December 31, 2014
|
284,595
|
|
|
38.58
|
|
|
7.01
|
|
9
|
|
|
RSUs
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value (in millions)
|
|||||
Outstanding as of January 1, 2014
|
2,139,143
|
|
|
$
|
39.15
|
|
|
1.12
|
|
$
|
104
|
|
Granted
|
590,347
|
|
|
51.81
|
|
|
|
|
|
|||
Vested and released
|
(730,285
|
)
|
|
36.53
|
|
|
|
|
38
|
|
||
Forfeited
|
(73,271
|
)
|
|
43.76
|
|
|
|
|
|
|||
Outstanding as of December 31, 2014
|
1,925,934
|
|
|
43.85
|
|
|
1.08
|
|
138
|
|
|
PSUs
|
|
Weighted Average Grant Date Fair Value
|
|
Weighted Average Remaining Contractual Term (Years)
|
|
Aggregate Intrinsic Value (in millions)
|
|||||
Outstanding as of January 1, 2014
|
422,866
|
|
|
$
|
39.88
|
|
|
1.26
|
|
$
|
21
|
|
Granted
|
154,157
|
|
|
51.88
|
|
|
|
|
|
|||
Vested and released
|
(104,165
|
)
|
|
36.42
|
|
|
|
|
5
|
|
||
Forfeited
|
(28,577
|
)
|
|
38.16
|
|
|
|
|
|
|||
Outstanding as of December 31, 2014
|
444,281
|
|
|
44.97
|
|
|
1.07
|
|
32
|
|
|
|
For the Year Ended December 31,
|
||||||||||
|
|
2014
|
|
2013
|
|
2012
|
||||||
Basic EPS:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
703
|
|
|
$
|
624
|
|
|
$
|
629
|
|
Weighted average common shares outstanding
|
|
195.8
|
|
|
202.9
|
|
|
210.6
|
|
|||
Earnings per common share — basic
|
|
$
|
3.59
|
|
|
$
|
3.08
|
|
|
$
|
2.99
|
|
Diluted EPS:
|
|
|
|
|
|
|
||||||
Net income
|
|
$
|
703
|
|
|
$
|
624
|
|
|
$
|
629
|
|
Weighted average common shares outstanding
|
|
195.8
|
|
|
202.9
|
|
|
210.6
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
||||||
Stock options, RSUs, PSUs and dividend equivalent units
|
|
1.6
|
|
|
1.6
|
|
|
1.7
|
|
|||
Weighted average common shares outstanding and common stock equivalents
|
|
197.4
|
|
|
204.5
|
|
|
212.3
|
|
|||
Earnings per common share — diluted
|
|
$
|
3.56
|
|
|
$
|
3.05
|
|
|
$
|
2.96
|
|
|
Foreign Currency Translation Adjustments
|
|
Net Change in Pension Liability
|
|
Net Change in Cash Flow Hedges
|
|
Accumulated Other Comprehensive Loss
|
||||||||
Balance as of January 1, 2012
|
$
|
(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
|
)
|
||||
OCI before reclassifications
|
(44
|
)
|
|
(19
|
)
|
|
(2
|
)
|
|
(65
|
)
|
||||
Amounts reclassified from AOCL
|
—
|
|
|
12
|
|
|
4
|
|
|
16
|
|
||||
Net current year OCI
|
(44
|
)
|
|
(7
|
)
|
|
2
|
|
|
(49
|
)
|
||||
Balance as of December 31, 2014
|
$
|
(61
|
)
|
|
$
|
(40
|
)
|
|
$
|
(36
|
)
|
|
$
|
(137
|
)
|
|
|
|
For the Year Ended December 31,
|
||||||
|
Location of (Loss) Gain Reclassified from AOCL into Net Income
|
|
2014
|
|
2013
|
||||
(Loss) Gain on cash flow hedges:
|
|
|
|
|
|
||||
Interest rate contracts
|
Interest expense
|
|
$
|
(8
|
)
|
|
$
|
(7
|
)
|
Foreign exchange forward contracts
|
Cost of sales
|
|
1
|
|
|
(1
|
)
|
||
Total
|
|
|
(7
|
)
|
|
(8
|
)
|
||
Income tax expense
|
|
|
(3
|
)
|
|
(3
|
)
|
||
Total
|
|
|
$
|
(4
|
)
|
|
$
|
(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
|
|
(3
|
)
|
|
(4
|
)
|
||
Settlement loss
|
Selling, general and administrative expenses
|
|
(16
|
)
|
|
(3
|
)
|
||
Total
|
|
|
(19
|
)
|
|
(6
|
)
|
||
Income tax expense
|
|
|
(7
|
)
|
|
(2
|
)
|
||
Total
|
|
|
$
|
(12
|
)
|
|
$
|
(4
|
)
|
Total reclassifications
|
|
|
$
|
(16
|
)
|
|
$
|
(9
|
)
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Supplemental cash flow disclosures of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Dividends declared but not yet paid
|
$
|
79
|
|
|
$
|
75
|
|
|
$
|
70
|
|
Capital expenditures included in accounts payable and other current liabilities
|
11
|
|
|
21
|
|
|
27
|
|
|||
Holdback liability for acquisition of business
|
2
|
|
|
—
|
|
|
—
|
|
|||
Stock issued for acquisition of business
|
—
|
|
|
13
|
|
|
—
|
|
|||
Capital lease additions
(1)
|
31
|
|
|
1
|
|
|
49
|
|
|||
Supplemental cash flow disclosures:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
94
|
|
|
$
|
107
|
|
|
$
|
115
|
|
Income taxes paid
|
345
|
|
|
310
|
|
|
724
|
|
(1)
|
The Company converted a number of month-to-month operating leases into capital leases which is presented as a non-cash financing activity.
|
|
|
Operating Leases
|
|
Capital Leases
|
||||
2015
|
|
$
|
47
|
|
|
$
|
11
|
|
2016
|
|
40
|
|
|
11
|
|
||
2017
|
|
32
|
|
|
11
|
|
||
2018
|
|
24
|
|
|
11
|
|
||
2019
|
|
21
|
|
|
10
|
|
||
Thereafter
|
|
75
|
|
|
167
|
|
||
Total minimum lease payments
|
|
$
|
239
|
|
|
221
|
|
|
Less imputed interest
|
|
|
|
(135
|
)
|
|||
Present value of minimum lease payments
|
|
|
|
$
|
86
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Segment Results – Net sales
|
|
|
|
|
|
||||||
Beverage Concentrates
|
$
|
1,228
|
|
|
$
|
1,229
|
|
|
$
|
1,221
|
|
Packaged Beverages
|
4,361
|
|
|
4,306
|
|
|
4,358
|
|
|||
Latin America Beverages
|
532
|
|
|
462
|
|
|
416
|
|
|||
Net sales
|
$
|
6,121
|
|
|
$
|
5,997
|
|
|
$
|
5,995
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Segment Results – SOP
|
|
|
|
|
|
||||||
Beverage Concentrates
|
$
|
790
|
|
|
$
|
778
|
|
|
$
|
774
|
|
Packaged Beverages
|
636
|
|
|
525
|
|
|
539
|
|
|||
Latin America Beverages
|
78
|
|
|
61
|
|
|
51
|
|
|||
Total SOP
|
1,504
|
|
|
1,364
|
|
|
1,364
|
|
|||
Unallocated corporate costs
|
323
|
|
|
309
|
|
|
261
|
|
|||
Other operating expense, net
|
1
|
|
|
9
|
|
|
11
|
|
|||
Income from operations
|
1,180
|
|
|
1,046
|
|
|
1,092
|
|
|||
Interest expense, net
|
107
|
|
|
121
|
|
|
123
|
|
|||
Other expense (income), net
|
—
|
|
|
383
|
|
|
(9
|
)
|
|||
Income before provision (benefit) for income taxes and equity in earnings of unconsolidated subsidiaries
|
$
|
1,073
|
|
|
$
|
542
|
|
|
$
|
978
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Amortization expense
|
|
|
|
|
|
||||||
Beverage Concentrates
|
$
|
16
|
|
|
$
|
17
|
|
|
$
|
20
|
|
Packaged Beverages
|
7
|
|
|
7
|
|
|
7
|
|
|||
Latin America Beverages
|
—
|
|
|
—
|
|
|
—
|
|
|||
Segment total
|
23
|
|
|
24
|
|
|
27
|
|
|||
Corporate and other
|
13
|
|
|
14
|
|
|
10
|
|
|||
Total amortization expense
|
$
|
36
|
|
|
$
|
38
|
|
|
$
|
37
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Depreciation expense
|
|
|
|
|
|
||||||
Beverage Concentrates
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
10
|
|
Packaged Beverages
|
165
|
|
|
164
|
|
|
173
|
|
|||
Latin America Beverages
|
15
|
|
|
14
|
|
|
11
|
|
|||
Segment total
|
187
|
|
|
183
|
|
|
194
|
|
|||
Corporate and other
|
12
|
|
|
13
|
|
|
9
|
|
|||
Total depreciation expense
|
$
|
199
|
|
|
$
|
196
|
|
|
$
|
203
|
|
|
|
||||||
|
As of December 31,
|
||||||
|
2014
|
|
2013
|
||||
Total assets
|
|
|
|
|
|
||
Property, plant and equipment, net
|
|
|
|
||||
Beverage Concentrates
|
$
|
71
|
|
|
$
|
73
|
|
Packaged Beverages
|
899
|
|
|
932
|
|
||
Latin America Beverages
|
102
|
|
|
92
|
|
||
Segment total
|
1,072
|
|
|
1,097
|
|
||
Corporate and other
|
69
|
|
|
76
|
|
||
Total property, plant and equipment, net
|
1,141
|
|
|
1,173
|
|
||
Current assets
|
1,211
|
|
|
1,119
|
|
||
All other non-current assets
|
5,921
|
|
|
5,909
|
|
||
Total assets
|
$
|
8,273
|
|
|
$
|
8,201
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net sales
|
|
|
|
|
|
|
|
|
|||
U.S.
|
$
|
5,361
|
|
|
$
|
5,292
|
|
|
$
|
5,341
|
|
International
|
760
|
|
|
705
|
|
|
654
|
|
|||
Total net sales
|
$
|
6,121
|
|
|
$
|
5,997
|
|
|
$
|
5,995
|
|
|
As of December 31,
|
||||||
|
2014
|
|
2013
|
||||
Property, plant and equipment, net
|
|
|
|
|
|
||
U.S.
|
$
|
1,039
|
|
|
$
|
1,081
|
|
International
|
102
|
|
|
92
|
|
||
Total property, plant and equipment, net
|
$
|
1,141
|
|
|
$
|
1,173
|
|
|
Condensed Consolidating Statements of Income
|
||||||||||||||||||
|
For the Year Ended December 31, 2014
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Net sales
|
$
|
—
|
|
|
$
|
5,474
|
|
|
$
|
681
|
|
|
$
|
(34
|
)
|
|
$
|
6,121
|
|
Cost of sales
|
—
|
|
|
2,191
|
|
|
334
|
|
|
(34
|
)
|
|
2,491
|
|
|||||
Gross profit
|
—
|
|
|
3,283
|
|
|
347
|
|
|
—
|
|
|
3,630
|
|
|||||
Selling, general and administrative expenses
|
1
|
|
|
2,106
|
|
|
227
|
|
|
—
|
|
|
2,334
|
|
|||||
Multi-employer pension plan withdrawal
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and amortization
|
—
|
|
|
107
|
|
|
8
|
|
|
—
|
|
|
115
|
|
|||||
Other operating expense, net
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|||||
Income from operations
|
(1
|
)
|
|
1,069
|
|
|
112
|
|
|
—
|
|
|
1,180
|
|
|||||
Interest expense
|
104
|
|
|
51
|
|
|
—
|
|
|
(46
|
)
|
|
109
|
|
|||||
Interest income
|
(40
|
)
|
|
—
|
|
|
(8
|
)
|
|
46
|
|
|
(2
|
)
|
|||||
Other expense (income), net
|
(2
|
)
|
|
(3
|
)
|
|
5
|
|
|
—
|
|
|
—
|
|
|||||
Income (loss) before provision (benefit) for income taxes and equity in earnings of subsidiaries
|
(63
|
)
|
|
1,021
|
|
|
115
|
|
|
—
|
|
|
1,073
|
|
|||||
Provision (benefit) for income taxes
|
(38
|
)
|
|
383
|
|
|
26
|
|
|
—
|
|
|
371
|
|
|||||
Income (loss) before equity in earnings of subsidiaries
|
(25
|
)
|
|
638
|
|
|
89
|
|
|
—
|
|
|
702
|
|
|||||
Equity in earnings of consolidated subsidiaries
|
728
|
|
|
90
|
|
|
—
|
|
|
(818
|
)
|
|
—
|
|
|||||
Equity in earnings of unconsolidated subsidiaries, net of tax
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Net income
|
$
|
703
|
|
|
$
|
728
|
|
|
$
|
90
|
|
|
$
|
(818
|
)
|
|
$
|
703
|
|
|
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
|
|
|||||
Income (loss) before provision (benefit) for income taxes and equity in earnings of subsidiaries
|
(428
|
)
|
|
863
|
|
|
107
|
|
|
—
|
|
|
542
|
|
|||||
Provision (benefit) 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
|
|
|||||
Multi-employer pension plan withdrawal
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Depreciation and amortization
|
—
|
|
|
117
|
|
|
7
|
|
|
—
|
|
|
124
|
|
|||||
Other operating expense (income), 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 (benefit) for income taxes and equity in earnings of subsidiaries
|
(30
|
)
|
|
911
|
|
|
97
|
|
|
—
|
|
|
978
|
|
|||||
Provision (benefit) 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 Comprehensive Income
|
||||||||||||||||||
|
For the Year Ended December 31, 2014
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Net income
|
$
|
703
|
|
|
$
|
728
|
|
|
$
|
90
|
|
|
$
|
(818
|
)
|
|
$
|
703
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
||||||||||
Other comprehensive income impact from consolidated subsidiaries
|
(57
|
)
|
|
(66
|
)
|
|
—
|
|
|
123
|
|
|
—
|
|
|||||
Foreign currency translation adjustments
|
4
|
|
|
15
|
|
|
(63
|
)
|
|
—
|
|
|
(44
|
)
|
|||||
Net change in pension liability, net of tax
|
—
|
|
|
(6
|
)
|
|
(1
|
)
|
|
—
|
|
|
(7
|
)
|
|||||
Net change in cash flow hedges, net of tax
|
4
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
2
|
|
|||||
Total other comprehensive income (loss), net of tax
|
(49
|
)
|
|
(57
|
)
|
|
(66
|
)
|
|
123
|
|
|
(49
|
)
|
|||||
Comprehensive income (loss)
|
$
|
654
|
|
|
$
|
671
|
|
|
$
|
24
|
|
|
$
|
(695
|
)
|
|
$
|
654
|
|
|
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 Balance Sheets
|
||||||||||||||||||
|
As of December 31, 2014
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
186
|
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
237
|
|
Accounts receivable:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade, net
|
—
|
|
|
494
|
|
|
62
|
|
|
—
|
|
|
556
|
|
|||||
Other
|
3
|
|
|
42
|
|
|
16
|
|
|
—
|
|
|
61
|
|
|||||
Related party receivable
|
10
|
|
|
10
|
|
|
—
|
|
|
(20
|
)
|
|
—
|
|
|||||
Inventories
|
—
|
|
|
168
|
|
|
36
|
|
|
—
|
|
|
204
|
|
|||||
Deferred tax assets
|
—
|
|
|
65
|
|
|
3
|
|
|
(1
|
)
|
|
67
|
|
|||||
Prepaid expenses and other current assets
|
218
|
|
|
67
|
|
|
9
|
|
|
(208
|
)
|
|
86
|
|
|||||
Total current assets
|
231
|
|
|
1,032
|
|
|
177
|
|
|
(229
|
)
|
|
1,211
|
|
|||||
Property, plant and equipment, net
|
—
|
|
|
1,039
|
|
|
102
|
|
|
—
|
|
|
1,141
|
|
|||||
Investments in consolidated subsidiaries
|
6,194
|
|
|
612
|
|
|
—
|
|
|
(6,806
|
)
|
|
—
|
|
|||||
Investments in unconsolidated subsidiaries
|
1
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
14
|
|
|||||
Goodwill
|
—
|
|
|
2,971
|
|
|
19
|
|
|
—
|
|
|
2,990
|
|
|||||
Other intangible assets, net
|
—
|
|
|
2,615
|
|
|
69
|
|
|
—
|
|
|
2,684
|
|
|||||
Long-term receivable, related parties
|
3,118
|
|
|
4,647
|
|
|
295
|
|
|
(8,060
|
)
|
|
—
|
|
|||||
Other non-current assets
|
63
|
|
|
90
|
|
|
6
|
|
|
—
|
|
|
159
|
|
|||||
Non-current deferred tax assets
|
23
|
|
|
—
|
|
|
74
|
|
|
(23
|
)
|
|
74
|
|
|||||
Total assets
|
$
|
9,630
|
|
|
$
|
13,006
|
|
|
$
|
755
|
|
|
$
|
(15,118
|
)
|
|
$
|
8,273
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable
|
$
|
—
|
|
|
$
|
258
|
|
|
$
|
31
|
|
|
$
|
—
|
|
|
$
|
289
|
|
Related party payable
|
—
|
|
|
10
|
|
|
10
|
|
|
(20
|
)
|
|
—
|
|
|||||
Deferred revenue
|
—
|
|
|
62
|
|
|
2
|
|
|
—
|
|
|
64
|
|
|||||
Short-term borrowings and current portion of long-term obligations
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Income taxes payable
|
—
|
|
|
212
|
|
|
6
|
|
|
(208
|
)
|
|
10
|
|
|||||
Other current liabilities
|
112
|
|
|
512
|
|
|
49
|
|
|
(1
|
)
|
|
672
|
|
|||||
Total current liabilities
|
112
|
|
|
1,057
|
|
|
98
|
|
|
(229
|
)
|
|
1,038
|
|
|||||
Long-term obligations to third parties
|
2,505
|
|
|
83
|
|
|
—
|
|
|
—
|
|
|
2,588
|
|
|||||
Long-term obligations to related parties
|
4,647
|
|
|
3,413
|
|
|
—
|
|
|
(8,060
|
)
|
|
—
|
|
|||||
Non-current deferred tax liabilities
|
—
|
|
|
824
|
|
|
—
|
|
|
(23
|
)
|
|
801
|
|
|||||
Non-current deferred revenue
|
—
|
|
|
1,216
|
|
|
34
|
|
|
—
|
|
|
1,250
|
|
|||||
Other non-current liabilities
|
72
|
|
|
219
|
|
|
11
|
|
|
—
|
|
|
302
|
|
|||||
Total liabilities
|
7,336
|
|
|
6,812
|
|
|
143
|
|
|
(8,312
|
)
|
|
5,979
|
|
|||||
Total stockholders' equity
|
2,294
|
|
|
6,194
|
|
|
612
|
|
|
(6,806
|
)
|
|
2,294
|
|
|||||
Total liabilities and stockholders' equity
|
$
|
9,630
|
|
|
$
|
13,006
|
|
|
$
|
755
|
|
|
$
|
(15,118
|
)
|
|
$
|
8,273
|
|
|
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 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 Statements of Cash Flows
|
||||||||||||||||||
|
For the Year Ended December 31, 2014
|
||||||||||||||||||
|
Parent
|
|
Guarantors
|
|
Non-Guarantors
|
|
Eliminations
|
|
Total
|
||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash (used in) provided by operating activities
|
$
|
(122
|
)
|
|
$
|
1,055
|
|
|
$
|
89
|
|
|
$
|
—
|
|
|
$
|
1,022
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Acquisition of business
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|||||
Purchase of property, plant and equipment
|
—
|
|
|
(130
|
)
|
|
(40
|
)
|
|
—
|
|
|
(170
|
)
|
|||||
Purchase of intangible assets
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Return of capital
|
—
|
|
|
2
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||||
Proceeds from disposals of property, plant and equipment
|
—
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Issuance of related party notes receivable
|
—
|
|
|
(882
|
)
|
|
(55
|
)
|
|
937
|
|
|
—
|
|
|||||
Other, net
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|||||
Net cash (used in) provided by investing activities
|
(3
|
)
|
|
(1,022
|
)
|
|
(97
|
)
|
|
937
|
|
|
(185
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Proceeds from issuance of related party debt
|
882
|
|
|
55
|
|
|
—
|
|
|
(937
|
)
|
|
—
|
|
|||||
Net (repayment) issuance of commercial paper
|
(65
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(65
|
)
|
|||||
Repurchase of shares of common stock
|
(400
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(400
|
)
|
|||||
Dividends paid
|
(317
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(317
|
)
|
|||||
Tax withholdings related to net share settlements of certain stock awards
|
(16
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(16
|
)
|
|||||
Proceeds from stock options exercised
|
41
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|||||
Excess tax benefit on stock-based compensation
|
—
|
|
|
11
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
Other, net
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Net cash (used in) provided by financing activities
|
125
|
|
|
65
|
|
|
—
|
|
|
(937
|
)
|
|
(747
|
)
|
|||||
Cash and cash equivalents — net change from:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating, investing and financing activities
|
—
|
|
|
98
|
|
|
(8
|
)
|
|
—
|
|
|
90
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
|||||
Cash and cash equivalents at beginning of year
|
—
|
|
|
88
|
|
|
65
|
|
|
—
|
|
|
153
|
|
|||||
Cash and cash equivalents at end of period
|
$
|
—
|
|
|
$
|
186
|
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
237
|
|
|
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
|
)
|
|||||
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
|
)
|
|||||
Net issuance of commercial paper
|
65
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
65
|
|
|||||
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 period
|
$
|
—
|
|
|
$
|
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
|
|
|
First
|
|
Second
|
|
Third
|
|
Fourth
|
||||||||
For the Year Ended December 31,
|
Quarter
|
|
Quarter
|
|
Quarter
|
|
Quarter
|
||||||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net sales
|
$
|
1,398
|
|
|
$
|
1,631
|
|
|
$
|
1,583
|
|
|
$
|
1,509
|
|
Gross profit
|
844
|
|
|
966
|
|
|
925
|
|
|
895
|
|
||||
Net income
|
155
|
|
|
210
|
|
|
188
|
|
|
150
|
|
||||
Earnings per common share — basic
|
$
|
0.78
|
|
|
$
|
1.07
|
|
|
$
|
0.97
|
|
|
$
|
0.77
|
|
Earnings per common share — diluted
|
0.78
|
|
|
1.06
|
|
|
0.96
|
|
|
0.77
|
|
||||
Dividend declared per share
|
0.41
|
|
|
0.41
|
|
|
0.41
|
|
|
0.41
|
|
||||
Common stock price
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
54.46
|
|
|
$
|
60.22
|
|
|
$
|
65.32
|
|
|
$
|
74.00
|
|
Low
|
47.22
|
|
|
51.19
|
|
|
58.41
|
|
|
61.85
|
|
||||
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
|
|
•
|
Consolidated Statements of Income for the
years ended December 31, 2014, 2013 and 2012
|
•
|
Consolidated Statements of Comprehensive Income for the
years ended December 31, 2014, 2013 and 2012
|
•
|
Consolidated Balance Sheets as of
December 31, 2014 and 2013
|
•
|
Consolidated Statements of Cash Flows for the
years ended December 31, 2014, 2013 and 2012
|
•
|
Consolidated Statements of Changes in Stockholders' Equity for the
years ended December 31, 2014, 2013 and 2012
|
•
|
Notes to Consolidated Financial Statements for the
years ended December 31, 2014, 2013 and 2012
|
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 September 17, 2014 (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K (filed September 17, 2014) 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, and re-approved by the Stockholders on May 16, 2013 (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., filed as Exhibit 10.29 to the Company's Annual Report on Form 10-K (filed February 20, 2014) and incorporated herein by this reference.
|
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, filed as Exhibit 10.32 to the Company's Annual Report on Form 10-K (filed February 20, 2014) and incorporated herein by this reference.
|
10.33
|
Amendment to Employment Agreement, effective as of February 11, 2009, between DPS Holdings, Inc. and Derry Hobson (filed as Exhibit 10.33 to the Company's Annual Report on Form 10-K (filed February 20, 2014) and incorporated herein by this reference).
|
10.34*
|
Dr Pepper Snapple Group, Inc. Omnibus Stock Incentive Plan of 2009, as amended and approved by the Stockholders on May 15, 2014.
|
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.
|
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, 2014, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Income for the years ended December 31, 2014, 2013 and 2012, (ii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012, (iii) Consolidated Balance Sheets as of December 31, 2014 and 2013, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013 and 2012, (v) Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2014, 2013 and 2012, and (vi) the Notes to Audited Consolidated Financial Statements.
|
|
Dr Pepper Snapple Group, Inc.
|
||
|
|
|
|
|
By:
|
|
/s/ Martin M. Ellen
|
Date: February 19, 2015
|
|
Name:
|
Martin M. Ellen
|
|
|
Title:
|
Executive Vice President and Chief
Financial Officer
|
|
By:
|
|
/s/ Larry D. Young
|
Date: February 19, 2015
|
|
Name:
|
Larry D. Young
|
|
|
Title:
|
President, Chief Executive Officer and
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Martin M. Ellen
|
Date: February 19, 2015
|
|
Name:
|
Martin M. Ellen
|
|
|
Title:
|
Executive Vice President and Chief
Financial Officer |
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Angela A. Stephens
|
Date: February 19, 2015
|
|
Name:
|
Angela A. Stephens
|
|
|
Title:
|
Senior Vice President and Controller
(Principal Accounting Officer)
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Wayne R. Sanders
|
Date: February 19, 2015
|
|
Name:
|
Wayne R. Sanders
|
|
|
Title:
|
Chairman
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ John L. Adams
|
Date: February 19, 2015
|
|
Name:
|
John L. Adams
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ David E. Alexander
|
Date: February 19, 2015
|
|
Name:
|
David E. Alexander
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Antonio Carillo
|
Date: February 19, 2015
|
|
Name:
|
Antonio Carillo
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Pamela H. Patsley
|
Date: February 19, 2015
|
|
Name:
|
Pamela H. Patsley
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Joyce M. Roché
|
Date: February 19, 2015
|
|
Name:
|
Joyce M. Roché
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Ronald G. Rogers
|
Date: February 19, 2015
|
|
Name:
|
Ronald G. Rogers
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Dunia A. Shive
|
Date: February 19, 2015
|
|
Name:
|
Dunia A. Shive
|
|
|
Title:
|
Director
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ M. Anne Szostak
|
Date: February 19, 2015
|
|
Name:
|
M. Anne Szostak
|
|
|
Title:
|
Director
|
•
|
to select the Employees, Consultants and Nonemployee Directors to be granted Awards under this Plan;
|
•
|
to determine the terms of Awards to be made to each Participant;
|
•
|
to determine the time when Awards are to be granted and any conditions that must be satisfied before an Award is granted;
|
•
|
to establish objectives and conditions for earning Awards;
|
•
|
to determine the terms and conditions of Award Agreements (which shall not be inconsistent with this Plan) and who must sign each Award Agreement;
|
•
|
to determine whether the conditions for earning an Award have been met and whether a Performance Award will be paid at the end of an applicable performance period;
|
•
|
except as otherwise provided in paragraph 13, to modify the terms of Awards made under this Plan;
|
•
|
to determine if, when and under what conditions payment of all or any part of an Award may be deferred;
|
•
|
to determine whether the amount or payment of an Award should be reduced or eliminated;
|
•
|
to determine the guidelines and/or procedures for the payment or exercise of Awards; and
|
•
|
to determine whether a Performance Award should qualify, regardless of its amount, as deductible in its entirety for federal income tax purposes, including whether a Performance Award granted to an Executive Officer should qualify as performance-based compensation.
|
●
|
revenue and income measures (which include revenue, gross margin, income from operations, net income, net sales and earnings per share);
|
●
|
expense measures (which include costs of goods sold, selling, general and administrative expenses and overhead costs);
|
●
|
operating measures (which include volume, margin, breakage and shrinkage, productivity and market share);
|
●
|
cash flow measures (which include net cash flow from operating activities and working capital);
|
●
|
liquidity measures (which include earnings before or after the effect of certain items such as interest, taxes, depreciation and amortization, and free cash flow);
|
●
|
leverage measures (which include debt-to-equity ratio and net debt);
|
●
|
market measures (which include market share, stock price, total shareholder return and market capitalization measures);
|
●
|
return measures (which include return on equity, return on assets, return on invested capital and internally developed total return measures incorporating profit growth and cash flow yield measures, with cash flow yield incorporating cash flow and capital expenditures);
|
●
|
corporate value measures (which include compliance, safety, environmental and personnel matters); and
|
●
|
other measures such as those relating to acquisitions, dispositions or customer satisfaction.
|
DR PEPPER SNAPPLE GROUP, INC.
|
||
|
|
|
|
|
|
By: /s/ James L. Baldwin Jr.
|
||
James L. Baldwin, Jr.
|
||
Title: Executive Vice President,
|
||
General Counsel and Corporate
|
||
Secretary
|
||
|
|
|
|
|
|
|
For the Years Ended December 31,
|
||||||||||||||||||
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||
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)
|
$
|
1,073
|
|
|
$
|
542
|
|
|
$
|
978
|
|
|
$
|
925
|
|
|
$
|
821
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Add/(deduct):
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
|
125
|
|
|
138
|
|
|
142
|
|
|
131
|
|
|
147
|
|
|||||
Amortization of capitalized interest
|
4
|
|
|
4
|
|
|
3
|
|
|
2
|
|
|
2
|
|
|||||
Capitalized interest
|
(2
|
)
|
|
(1
|
)
|
|
(2
|
)
|
|
(2
|
)
|
|
(3
|
)
|
|||||
Total earnings available for fixed charges
|
$
|
1,200
|
|
|
$
|
683
|
|
|
$
|
1,121
|
|
|
$
|
1,056
|
|
|
$
|
967
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed charges
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
109
|
|
|
$
|
123
|
|
|
$
|
125
|
|
|
$
|
114
|
|
|
$
|
128
|
|
Capitalized interest
|
2
|
|
|
1
|
|
|
2
|
|
|
2
|
|
|
3
|
|
|||||
Interest component of rental expense
(1)
|
14
|
|
|
14
|
|
|
15
|
|
|
15
|
|
|
16
|
|
|||||
Total fixed charges
|
$
|
125
|
|
|
$
|
138
|
|
|
$
|
142
|
|
|
$
|
131
|
|
|
$
|
147
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ratio of earnings to fixed charges
|
9.6x
|
|
|
4.9x
|
|
|
7.9x
|
|
|
8.1x
|
|
|
6.6x
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
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, 2015
|
|
|
|
/s/ Larry D. Young
|
|
Date: February 19, 2015
|
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, 2015
|
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, 2014
,
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, 2015
|
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, 2014
,
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, 2015
|
Martin M. Ellen
|
|
|
Executive Vice President and Chief Financial Officer of Dr Pepper Snapple Group, Inc.
|
|