Snapple 2012 Annual Report Download - page 79

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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
61
3. Inventories
Inventories as of December 31, 2012, and 2011 consisted of the following (in millions):
December 31, December 31,
2012 2011
Raw materials $ 114 $ 91
Work in process 54
Finished goods 151 171
Inventories at first in first out cost 270 266
Reduction to LIFO cost (73)(54)
Inventories $ 197 $ 212
4. Property, Plant and Equipment
Net property, plant and equipment consisted of the following as of December 31, 2012 and 2011 (in millions):
December 31, December 31,
2012 2011
Land $ 72 $ 80
Buildings and improvements 465 422
Machinery and equipment 1,275 1,165
Cold drink equipment 308 284
Software 195 181
Construction in progress 50 58
Gross property, plant and equipment 2,365 2,190
Less: accumulated depreciation and amortization (1,163)(1,038)
Net property, plant and equipment $ 1,202 $ 1,152
Buildings and improvements included $49 million and $21 million of assets at cost under capital lease as of December 31,
2012 and 2011. Machinery and equipment included $6 million and $1 million of assets at cost under capital lease as of December 31,
2012 and 2011. The net book value of assets under capital lease was $52 million and $13 million as of December 31, 2012 and
2011, respectively.
Depreciation expense amounted to $203 million, $198 million and $185 million for the years ended December 31, 2012, 2011
and 2010, respectively. Depreciation expense was comprised of $84 million, $81 million and $74 million in cost of sales and $119
million, $117 million and $111 million in depreciation and amortization on the Consolidated Statements of Income in 2012, 2011
and 2010, respectively. The depreciation expense above also includes the charge to income resulting from amortization of assets
recorded under capital leases.
Capitalized interest was $2 million during 2012, and $3 million during 2011 and 2010.
5. Investment in Unconsolidated Subsidiaries
The Company has an investment in a 50% owned Mexican joint venture with Acqua Minerale San Benedetto which gives it
the ability to exercise significant influence over operating and financial policies of the investee. The joint venture is not a variable
interest entity and the investment represents a noncontrolling ownership interest and is accounted for under the equity method of
accounting. The carrying value of the investment was $12 million and $11 million as of December 31, 2012 and 2011, respectively.