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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
77
The Company accrues interest and penalties on its uncertain tax positions as a component of its provision for income taxes.
The amount of interest and penalties recognized in the Consolidated Statements of Income for uncertain tax positions was $16
million, $21 million and $20 million for 2012, 2011 and 2010, respectively. The Company had a total of $105 million and $92
million accrued for interest and penalties for its uncertain tax positions primarily reported as part of other non-current liabilities
as of December 31, 2012, and 2011, respectively.
12. Employee Benefit Plans
PENSION AND POSTRETIREMENT PLANS
Overview
The Company has U.S. and foreign pension and postretirement medical plans which provide benefits to a defined group of
employees. The Company has several non-contributory defined benefit plans and postretirement medical plans, each having a
measurement date of December 31. To participate in the defined benefit plans, eligible employees must have been employed by
the Company for at least one year. The postretirement benefits are limited to qualified expenses and are subject to deductibles, co-
payment provisions, and other provisions. Employee benefit plan obligations and expenses included in the Company's Audited
Consolidated Financial Statements are determined using actuarial analyses based on plan assumptions including employee
demographic data such as years of service and compensation, benefits and claims paid and employer contributions, among others.
The Company also participates in various multi-employer defined benefit plans.
The Company's largest U.S. defined benefit pension plan, which is a cash balance plan, was suspended and the accrued benefit
was frozen effective December 31, 2008. Participants in this plan no longer earned additional benefits for future services or salary
increases. The cash balance plans maintain individual recordkeeping accounts for each participant which are annually credited
with interest credits equal to the 12-month average of one-year U.S. Treasury Bill rates, plus 1%, with a required minimum rate
of 5%.
During 2010, the Company approved and communicated various changes to certain U.S. postretirement medical plans. The
Company provides a subsidy to eligible participants who have reached the age of 65, which replaced certain current retiree medical
plans and could be used to help pay for qualified medical expenses. These changes were 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 during
the year ended December 31, 2010, representing the immediate recognition of previously unamortized prior service credits.
During the years ended December 31, 2012, 2011 and 2010, 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 $3 million and $5 million were recognized for the years ended December 31, 2011 and 2010, respectively. There was
no settlement charge recognized for the year ended December 31, 2012.
U.S. GAAP Changes
Effective December 31, 2011, the Company adopted the additional disclosure requirements required by U.S. GAAP related
to an employer's participation in a multi-employer pension plan. Those additional disclosure requirements provide more detailed
information about multi-employer plans, including: (1) the significant multi-employer plans in which an employer participates;
(2) the level of an employer's participation in the significant multi-employer plans; (3) the financial health of the significant multi-
employer plans; and (4) the nature of the employer commitments to the significant multi-employer plans. The adoption of the
guidance is disclosure related only and, therefore, it did not impact the Company's results of operations or financial position.