Snapple 2008 Annual Report Download - page 54

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(1) UOP for the year ended December 31, 2007, for the Bottling Group and Finished Goods segment has been
recast to reallocate $54 million of intersegment profit to conform to the change in 2008 management reporting
of segment UOP.
(2) Adjustments consist of the following:
2008 2007
For the Year Ended
December 31,
Restructuring costs ............................................... $ (57) $ (76)
Transaction costs and other one time separation costs(1) ................... (33) —
Unallocated general and administrative expenses ......................... (39) (36)
Stock-based compensation expense ................................... (9) (21)
Amortization expense related to intangible assets ......................... (28) (30)
Impairment of goodwill and intangible assets............................ (1,039) (6)
Incremental pension costs . . ........................................ (3) (11)
Other operating (expense) income(2) .................................. (4) 58
Other ......................................................... (7) 2
Total ........................................................ $(1,219) $(120)
(1) In connection with our separation from Cadbury, we incurred transaction costs and other one time separation
costs of $33 million for the year ended December 31, 2008.
(2) In 2007, $58 million of the $71 million gain on termination of the glaceau distribution agreement is included as
an adjustment. The balance of the gain ($13 million) is reflected in the Bottling Group UOP.
Beverage Concentrates
The following table details our Beverage Concentrates segment’s net sales and UOP for 2008 and 2007 (dollars
in millions):
2008 2007
Amount
Change
Percentage
Change
For the Year Ended
December 31,
Net sales ..................................... $1,354 $1,342 $12 0.9%
UOP........................................ 778 731 47 6.4%
Net sales for 2008 increased $12 million compared with 2007 primarily due to price increases and a favorable
timing change of concentrate sales as bottlers purchased more concentrate in advance of planned concentrate price
increases. Concentrate price increases will be effective in January 2009 compared with price increases which were
effective in February 2008. These increases were partially offset by a decline in volumes and an increase in fountain
food service channel discounts. Volumes declined 1%, primarily resulting from lower intersegment sales partially
offset by a 1% increase in fountain food service sales volumes and additional volumes gains due to the change in
timing of concentrate prices.
UOP increased $47 million for 2008 as compared with 2007 driven by lower personnel costs, primarily due to
savings generated from restructuring initiatives, lower marketing costs and the increase in net sales.
Volume (BCS) declined 2% in 2008. Dr Pepper declined 1% driven primarily by continued declines in the
“Soda Fountain Classics” line. The “Core 4” brands, which include 7UP, Sunkist, A&W and Canada Dry, decreased
2%, driven primarily by 7UP as the brand cycled the final stages of launch support for 7UP with 100% Natural
Flavors and the re-launch of Diet 7UP, partially offset by a 3% increase in Canada Dry resulting from the launch of
Canada Dry Green Tea.
30