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Latin America Beverages
The following table details our Latin America Beverages segment’s net sales and SOP for 2009 and 2008 (in millions):
Net sales
SOP
For the Year Ended
December 31,
2009
$ 357
54
2008
$ 422
86
Amount
Change
$(65)
(32)
Sales volumes increased 2% for the year ended December 31, 2009 compared with the year ended December 31, 2008. The
increase in volumes was driven by additional distribution routes, gains in Crush with the introduction of new flavors in a 2.3 liter
value offering which added an incremental 4 million cases in 2009, and gains in Peñafiel, which benefited from a new marketing
campaign, partially offset by declines in Squirt.
Net sales decreased $65 million for the year ended December 31, 2009 compared with the year ended December 31, 2008
primarily due to the impact of changes in foreign currency, the termination of Hansen’s distribution agreement early in the first
quarter of 2009, and an unfavorable impact related to product mix, partially offset by increases in sales volumes. The termination
of the Hansen agreement reduced net sales by approximately $18 million.
SOP decreased $32 million for the year ended December 31, 2009 compared with the year ended December 31, 2008 primarily
due to the devaluation of the Mexican peso, Hansen’s termination which had a net impact of $5 million, a shift to value products
and an increase in costs associated with distribution route expansion, partially offset by increased sales volume.
Accounting for the Separation from Cadbury
Upon separation, effective May 7, 2008, we became an independent company, which established a new consolidated reporting
structure. For the periods prior to May 7, 2008, our consolidated financial information has been prepared on a “carve-out” basis
from Cadbury’s consolidated financial statements using the historical results of operations, assets and liabilities, attributable to
Cadbury’s Americas Beverages business and including allocations of expenses from Cadbury. The results may not be indicative
of our future performance and may not reflect our financial performance had we been an independent publicly-traded company
during those prior periods.
Items Impacting the Consolidated Statements of Operations
The following transactions related to our separation from Cadbury were included in the Consolidated Statements of Operations
for the year ended December 31, 2009 and 2008 (in millions):
Transaction costs and other one time separation costs(1)
Costs associated with the bridge loan facility(2)
Incremental tax (benefit) expense related to separation, excluding indemnified taxes
Impact of Cadbury tax election
2009
$—
—
(5)
—
2008
$33
24
11
5
____________________________
(1) DPS incurred transaction costs and other one time separation costs of $33 million for the year ended December 31, 2008.
These costs are included in SG&A expenses in the Consolidated Statements of Operations.
(2) The Company incurred $24 million of costs for the year ended December 31, 2008, associated with the $1.7 billion bridge
loan facility which was entered into to reduce financing risks and facilitate Cadbury’s separation of the Company. Financing
fees of $21 million, which were expensed when the bridge loan facility was terminated on April 30, 2008, and $5 million
of interest expense were included as a component of interest expense, partially offset by $2 million in interest income while
in escrow.
37