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Additionally, the Company maintains certain investments accounted for under the cost method of accounting
that have a zero cost basis in companies that it does not control and for which it does not have the ability to exercise
significant influence over operating and financial policies.
Dr Pepper/Seven Up Bottling Group
Prior to the Company’s acquisition of the remaining 55% of DPSUBG on May 2, 2006, the Company had an
investment of approximately 45% in DPSUBG. Upon the Company’s acquisition of the remaining 55%, DPSUBG
became a fully-owned subsidiary and its results were combined from that date forward. Refer to Note 5 for further
information. The table below summarizes DPSUBG’s reported financial information for 2006 for the period prior to
the Company’s acquisition of the remaining 55% of DPSUBG (in millions):
January 1, 2006 to May 1, 2006
Net sales ............................................... $708
Cost of goods sold ........................................ 469
Gross profit ........................................... $239
Operating income......................................... $ 32
Net income ............................................. $ 2
9. Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill for the year ended December 31, 2008, by reporting unit are as
follows (in millions):
Beverage
Concentrates
Finished
Goods
Bottling
Group
Mexico and the
Caribbean Total
Balance as of December 31, 2006 .... $1,733 $1,222 $ 188 $37 $3,180
Acquisitions .................... — — 7 — 7
Other changes ................... (2) (2) — — (4)
Balance as of December 31, 2007 .... $1,731 $1,220 $ 195 $37 $3,183
Acquisitions(1) .................. — — (8) — (8)
Impairment(2) ................... — — (180) — (180)
Other changes ................... 2 — (7) (7) (12)
Balance as of December 31, 2008 .... $1,733 $1,220 $ — $30 $2,983
(1) The Company acquired SeaBev on July 11, 2007. The Company completed its fair value assessment of the
assets acquired and liabilities assumed of this acquisition during the first quarter 2008, resulting in a $1 million
increase in the Bottling Group’s goodwill. During the second quarter of 2008, the Company made a tax election
related to the SeaBev acquisition which resulted in a decrease of $9 million to the Bottling Group’s goodwill.
(2) DPS’ annual impairment analysis, performed as of December 31, 2008, resulted in non-cash impairment
charges of $180 million for the year ended December 31, 2008, which are reported in the line item impairment
of goodwill and intangible assets in the Company’s consolidated statements of operations. Refer to Note 3 for
further information.
71
DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)