Snapple 2008 Annual Report Download - page 128

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As of December 31, 2008, the Company’s operating structure consisted of the following four operating
segments:
• The Beverage Concentrates segment reflects sales from the manufacture of concentrates and syrup of the
Company’s brands in the United States and Canada. Most of the brands in this segment are carbonated soft
drinks brands.
• The Finished Goods segment reflects sales from the manufacture and distribution of finished beverages and
other products in the United States and Canada. Most of the brands in this segment are non-carbonated
beverages brands.
• The Bottling Group segment reflects sales from the manufacture, bottling and/or distribution of finished
beverages, including sales of the Company’s own brands and third party owned brands.
• The Mexico and the Caribbean segment reflects sales from the manufacture, bottling and/or distribution of
both concentrates and finished beverages in those geographies.
The Company has significant intersegment transactions. For example, the Bottling Group segment purchases
concentrates at an arm’s length price from the Beverage Concentrates segment. In addition, the Bottling Group
segment purchases finished beverages from the Finished Goods segment and the Finished Goods segment purchases
finished beverages from the Bottling Group segment. These sales are eliminated in preparing the Company’s
consolidated results of operations. Intersegment transactions are included in segments’ net sales results.
The Company incurs selling, general and administrative expenses in each of its segments. In the Company’s
segment reporting, the selling, general and administrative expenses of the Bottling Group, and Mexico and the
Caribbean segments relate primarily to those segments. However, as a result of the Company’s historical segment
reporting policies, certain combined selling activities that support the Beverage Concentrates and Finished Goods
segments have not been proportionally allocated between those two segments. The Company also incurs certain
centralized functions and corporate costs that support its entire business, which have not been allocated to its
respective segments but rather have primarily been allocated to the Beverage Concentrates segment.
Net sales and underlying operating profit (loss) (“UOP”) are the significant financial measures used to measure
the operating performance of the Company’s operating segments.
Information about the Company’s operations by operating segment for the years ended December 31, 2008,
2007 and 2006 is as follows (in millions):
2008 2007 2006
For the Year Ended
December 31,
Segment Results — Net Sales
Beverage Concentrates................................... $1,354 $1,342 $1,330
Finished Goods ........................................ 1,624 1,562 1,516
Bottling Group ........................................ 3,102 3,143 2,001
Mexico and the Caribbean ................................ 427 418 408
Intersegment eliminations and impact of foreign currency(1) ....... (797) (770) (555)
Net sales as reported ..................................... $5,710 $5,695 $4,700
(1) Intersegment sales are eliminated in the Consolidated Statement of Operations. Total segment net sales include
Beverage Concentrates and Finished Goods sales to the Bottling Group segment and Bottling Group segment
104
DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)