Snapple 2008 Annual Report Download - page 112

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The expected long-term rate of return on U.S. pension fund assets held by the Company’s pension trusts was
determined based on several factors, including input from pension investment consultants and projected long-term
returns of broad equity and bond indices. The plans’ historical returns were also considered. The expected long-
term rate of return on the assets in the plans was based on an asset allocation assumption of about 60% with equity
managers, with expected long-term rates of return of approximately 8.5%, and 40% with fixed income managers,
with an expected long-term rate of return of about 5.5%. The actual asset allocation is regularly reviewed and
periodically rebalanced to the targeted allocation when considered appropriate. Actual investment allocations may
vary from the Company’s target investment allocations due to prevailing market conditions.
Multi-employer Plans
Prior to the separation from Cadbury, certain employees of the Company participated in defined benefit plans
and postretirement health care plans sponsored by Cadbury. Effective January 1, 2008, the Company separated these
commingled plans which historically contained participants of both the Company and other Cadbury global
companies into stand alone plans sponsored by DPS. These plans were accounted for as multi-employer plans prior
to 2008. The following table summarizes the components of net periodic benefit cost related to the U.S. multi-
employer plans sponsored by Cadbury recognized in the Consolidated Statements of Operations during 2007 and
2006 (in millions):
2007 2006 2007 2006
Pension Plans
Postretirement
Benefit Plans
Service cost ........................................... $13 $12 $ 1 $ 1
Interest cost ........................................... 17 15 1 1
Expected return on assets . . . .............................. (13) (10) (1) —
Recognition of actuarial gain. .............................. 5 5 — —
Curtailments/settlements .................................. — 2 — —
Net periodic benefit costs . .............................. $22 $24 $ 1 $ 2
Each individual component and the total periodic benefit cost for the foreign multi-employer plans sponsored
by Cadbury were less than $1 million for all periods presented in the table above.
The contributions paid into the U.S. and foreign multi-employer plans on the Company’s behalf by Cadbury
were $30 million each for 2007 and 2006.
The Company participates in a number of trustee-managed multi-employer defined benefit pension plans for
employees under certain collective bargaining agreements. Contributions paid into the multi-employer plans are
expensed as incurred and were approximately $4 million for the year ended December 31, 2008, and approximately
$3 million each for the years ended December 31, 2007 and 2006.
Savings Incentive Plan
The Company sponsors a 401(k) Retirement Plan that covers substantially all employees who meet certain
eligibility requirements. This plan permits both pretax and after-tax contributions, which are subject to limitations
imposed by Internal Revenue Service regulations. The Company matches employees’ contributions up to specified
levels. The Company’s contributions to this plan were approximately $13 million in 2008, $12 million in 2007 and
$6 million in 2006.
88
DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)