Snapple 2008 Annual Report Download - page 127

applicable California wage and hour law. The cases have been filed as class actions. The classes, which have not yet
been certified, consist of employees who have held a merchandiser or delivery driver position in California in the
past three years. The potential class size could be substantially higher due to the number of individuals who have
held these positions over the three year period. On behalf of the classes, the plaintiffs claim lost wages, waiting time
penalties and other penalties for each violation of the statute. The Company believes it has meritorious defenses to
the claims asserted and will defend itself vigorously. However, there is no assurance that the outcome of this matter
will be in its favor.
The Company has been requested to conduct an audit of its meal and rest periods for all non-exempt employees
in California at the direction of the California Department of Labor. At this time, the Company has declined to
conduct such an audit until there is judicial clarification of the intent of the statute. The Company cannot predict the
outcome of such an audit.
Environmental, Health and Safety Matters
The Company operates many manufacturing, bottling and distribution facilities. In these and other aspects of
the Company’s business, it is subject to a variety of federal, state and local environment, health and safety laws and
regulations. The Company maintains environmental, health and safety policies and a quality, environmental, health
and safety program designed to ensure compliance with applicable laws and regulations. However, the nature of the
Company’s business exposes it to the risk of claims with respect to environmental, health and safety matters, and
there can be no assurance that material costs or liabilities will not be incurred in connection with such claims. The
Company is not currently named as a party in any judicial or administrative proceeding relating to environmental,
health and safety matters which would materially affect its operations.
Compliance Matters
The Company is currently undergoing state audits for the years 1981 through 2008 and spanning nine states
and seven of the Company’s entities within the Bottling Group. The Company has accrued an estimated liability
based on current facts and circumstances. However, there is no assurance of the outcome of the audits.
23. Segments
Due to the integrated nature of DPS’ business model, the Company manages its business to maximize
profitability for the Company as a whole. Prior to DPS’ separation from Cadbury, it maintained its books and
records, managed its business and reported its results based on International Financial Reporting Standards
(“IFRS”). DPS’ segment information has been prepared and presented on the basis which management uses to
assess the performance of the Company’s segments, which is principally in accordance with IFRS. In addition, the
Company’s current segment reporting structure is largely the result of acquiring and combining various portions of
its business over the past several years. As a result, profitability trends in individual segments may not be consistent
with the profitability of the company as a whole or comparable to DPS’ competitors.
The Company presents segment information in accordance with SFAS No. 131, Disclosures about Segments of
an Enterprise and Related Information, which established reporting and disclosure standards for an enterprise’s
operating segments. Operating segments are defined as components of an enterprise that are businesses, for which
separate financial information is available, and for which the financial information is regularly reviewed by the
Company leadership team.
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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)