Snapple 2010 Annual Report Download - page 62

2008
Net cash flow used in financing activities for the year ended December 31, 2008 consisted primarily of net debt borrowings
of $456 million.
On March 10, 2008, we entered into arrangements with a group of lenders to provide an aggregate of $4.4 billion in senior
financing. The arrangements consisted of a term loan A facility, a revolving credit facility and a bridge loan facility.
On April 11, 2008, these arrangements were amended and restated. The amended and restated arrangements consist of a
$2.7 billion senior unsecured credit facility, which provided the $2.2 billion Term Loan A, access to the $500 million Revolver,
and a 364-day bridge credit agreement that provided a $1.7 billion bridge loan facility.
On May 7, 2008, in connection with our separation from Cadbury, $3,019 million was repaid to Cadbury. Prior to
separation from Cadbury, we had a variety of debt agreements with other wholly-owned subsidiaries of Cadbury that were
unrelated to our business.
On April 30, 2008, we completed the issuance of $1.7 billion aggregate principal amount of senior unsecured notes
consisting of $250 million aggregate principal amount of the 2013 Notes, $1.2 billion aggregate principal amount of the 2018
Notes, and $250 million aggregate principal amount of the 2038 Notes.
During 2008, we repaid the $1.7 billion bridge loan facility and made combined mandatory and optional repayments
toward the Term Loan A principal totaling $395 million.
Debt Ratings
As of December 31, 2010, our debt ratings were Baa2 with a positive outlook from Moody’s Investor Service ("Moody's")
and BBB with a stable outlook from Standard & Poor’s ("S&P"). Our commercial paper ratings were A-2/P-2 from Moody's
and S&P.
These debt and commercial paper ratings impact the interest we pay on our financing arrangements. A downgrade of one or
both of our debt and commercial paper ratings could increase our interest expense and decrease the cash available to fund
anticipated obligations.
Cash Management
Prior to separation, our cash was available for use and was regularly swept by Cadbury operations in the United States at
its discretion. Cadbury also funded our operating and investing activities as needed. We earned interest income on certain
related party balances. Our interest income has been reduced due to the settlement of the related party balances upon separation
and, accordingly, we expect interest income for 2011 to be minimal.
Post separation, we fund our liquidity needs from cash flow from operations and amounts available under financing
arrangements.
Capital Expenditures
Capital expenditures were $246 million, $317 million and $304 million for 2010, 2009 and 2008, respectively. Capital
expenditures for all periods primarily consisted of expansion of our capabilities in existing facilities, cold drink equipment and
IT investments for new systems. The decrease in expenditures for 2010 compared with 2009 was primarily related to the absence
of costs associated with the Victorville, California facility, partially offset by expansion and replacement of existing cold drink
equipment. The increase in 2009 compared with 2008 was primarily related to costs of a new manufacturing and distribution center
in Victorville, California. Beginning in 2011, we expect to incur discretionary annual capital expenditures, net of proceeds from
disposals, in an amount equal to approximately 4.5% of our net sales which we expect to fund through cash provided by operating
activities.
Restructuring
In 2008 and prior, we have implemented restructuring programs from time to time and have incurred costs that are
designed to improve operating effectiveness and lower costs. These programs have included closure of manufacturing plants,
reductions in force, integration of back office operations and outsourcing of certain transactional activities. We recorded
$57 million of restructuring costs for 2008. There were no significant restructuring costs in 2009 or 2010. Refer to Note 13 of
the Notes to our Audited Consolidated Financial Statements for further information.
42