Snapple 2010 Annual Report Download - page 79

DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Business and Basis of Presentation
References in this Annual Report on Form 10-K to “we”, “our”, “us”, “DPS” or “the Company” refer to Dr Pepper Snapple
Group, Inc. and all entities included in our Audited Consolidated Financial Statements. Cadbury plc and Cadbury Schweppes
plc are hereafter collectively referred to as “Cadbury” unless otherwise indicated. Kraft Foods Inc., which acquired Cadbury on
February 2, 2010, is hereafter referred to as “Kraft”.
This Annual Report on Form 10-K refers to some of DPS’ owned or licensed trademarks, trade names and service marks,
which are referred to as the Company’s brands. All of the product names included in this Annual Report on Form 10-K are
either DPS’ registered trademarks or those of the Company’s licensors.
Nature of Operations
DPS is a leading integrated brand owner, manufacturer and distributor of non-alcoholic beverages in the United States
("U.S."), Canada, and Mexico with a diverse portfolio of flavored (non-cola) carbonated soft drinks (“CSDs”) and non-
carbonated beverages (“NCBs”), including ready-to-drink teas, juices, juice drinks and mixers. The Company’s brand portfolio
includes popular CSD brands such as Dr Pepper, Sunkist soda, 7UP, A&W, Canada Dry, Crush, Squirt, Peñafiel, Schweppes,
and Venom Energy, and NCB brands such as Snapple, Mott’s, Hawaiian Punch, Clamato, Rose’s and Mr & Mrs T mixers.
Principles of Consolidation
DPS consolidates all wholly-owned subsidiaries. The Company uses the equity method to account for investments in companies
if the investment provides the Company with the ability to exercise significant influence over operating and financial policies of
the investee. Consolidated net income includes DPS' proportionate share of the net income or loss of these companies. Judgment
regarding the level of influence over each equity method investment includes considering key factors such as ownership interest,
representation on the board of directors, participation in policy-making decisions and material intercompany transactions.
The Company eliminates all significant intercompany transactions, including the intercompany portion of transactions with
equity method investees, from the financial results.
Formation of the Company and Separation from Cadbury
The Company was formed on October 24, 2007, and did not have any operations prior to ownership of Cadbury’s beverage
business in the U.S., Canada, Mexico and the Caribbean (“the Americas Beverages business”).
On May 7, 2008, Cadbury separated the Americas Beverages business from its global confectionery business by
contributing the subsidiaries that operated its Americas Beverages business to DPS. In return for the transfer of the Americas
Beverages business, DPS distributed its common stock to Cadbury plc shareholders. As of the date of distribution, a total of
800 million shares of common stock, par value $0.01 per share, and 15 million shares of preferred stock, all of which shares of
preferred stock are undesignated, were authorized. On the date of distribution, 253.7 million shares of common stock were
issued and outstanding and no shares of preferred stock were issued. On May 7, 2008, DPS became an independent publicly-
traded company listed on the New York Stock Exchange under the symbol “DPS”.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles
generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, all adjustments, consisting
principally of normal recurring adjustments, considered necessary for a fair presentation have been included. The preparation of
financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the
amounts reported in the financial statements and the accompanying notes. Actual results could differ from these estimates.
Upon separation, effective May 7, 2008, DPS became an independent company, which established a new consolidated
reporting structure. For the periods prior to May 7, 2008, the consolidated financial statements have been prepared on a “carve-
out” basis from Cadbury’s consolidated financial statements using historical results of operations, assets and liabilities
attributable to Cadbury’s Americas Beverages business and including allocations of expenses from Cadbury. The historical
Cadbury’s Americas Beverages information is the Company’s predecessor financial information. The Company eliminates from
its financial results all intercompany transactions between entities included in the consolidation and the intercompany
transactions with its equity method investees.
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