Snapple 2010 Annual Report Download - page 109

Download and view the complete annual report

Please find page 109 of the 2010 Snapple annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 148

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148

DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company will be providing a subsidy to eligible participants who have reached the age of 65, which replaces certain
current retiree medical plans and can be used to help pay for qualified medical expenses. These changes become effective
beginning January 1, 2011, for all Medicare eligible retirees and their Medicare eligible dependents formerly covered by certain
postretirement medical plans sponsored by the Company. As a result of these changes, the Company recognized a one-time
curtailment gain of $8 million, representing the immediate recognition of previously unamortized prior service credits.
During both 2010 and 2009, the total amount of lump sum payments made to participants of various U.S. defined pension
plans exceeded the estimated annual interest and service costs. As a result, non-cash settlement charges of $5 million and $3
million were recognized for the years ended December 31, 2010 and 2009, respectively. The Company recorded approximately
$17 million in 2008 related to pension plan settlements that resulted from the organizational restructuring program initiated in
the fourth quarter of 2007.
U.S. GAAP Changes
On December 31, 2009, the Company adopted the enhanced disclosure requirements required by U.S. GAAP related to
employers’ disclosures about pensions and other postretirement benefits. This requirement includes enhanced disclosures about
the plan assets of a company’s defined benefit pension and other postretirement medical plans. These disclosures are intended
to provide users of financial statements with a greater understanding of: (1) how investment allocation decisions are made,
including the factors that are pertinent to an understanding of investment policies and strategies; (2) the major categories of
plan assets; (3) the inputs and valuation techniques used to measure the fair value of plan assets; (4) the effect of fair value
measurements using significant unobservable inputs (Level 3) on changes in plan assets for the period; and (5) significant
concentrations of credit risk within plan assets. The adoption of the guidance is disclosure related only, therefore it did not
impact the Company’s results of operations or financial position. The plans do not currently hold any assets that are Level 3 and
there are no significant concentrations of credit risk within the plan assets as of December 31, 2010 and 2009. Refer to Note 14
for a description of the fair value hierarchy levels 1, 2, and 3.
Effective December 31, 2009, the Company also adopted the U.S. GAAP guidance on how companies should estimate the
fair value of certain alternative investments and allows companies to use Net Asset Value (NAV) as a practical expedient in
determining fair value. Approximately $87 million and $100 million of pension and postretirement benefit plan assets reflected
were valued using NAV as of December 31, 2010 and 2009, respectively.
On January 1, 2008, the Company adopted the measurement date provisions under U.S. GAAP, which requires that
assumptions used to measure the Company’s annual pension and postretirement medical expenses be determined as of the
balance sheet date and all plan assets and liabilities be reported as of that date. On January 1, 2008, the Company elected the
transition method under which DPS re-measured the defined benefit pension and postretirement plan assets and obligations as
of January 1, 2008, the first day of the 2008 year, for plans that previously had a measurement date other than December 31. As
a result of implementing the measurement date provision, AOCL increased approximately $2 million ($3 million gross, net of
$1 million tax benefit).
The total pension and postretirement defined benefit costs recorded in the Company’s Consolidated Statements of
Operations for the years ended December 31, 2010, 2009 and 2008 were as follows (in millions):
Net Periodic Benefit Costs
Pension plans
Postretirement medical plans
Multi-employer plans
Total
For the Year Ended December 31,
2010
$9
(7)
4
$6
2009
$11
3
8
$22
2008
$31
2
4
$37
89