Snapple 2009 Annual Report Download - page 101

All obligations under the senior unsecured credit facility are guaranteed by substantially all of the Company’s
existing and future direct and indirect domestic subsidiaries.
The senior unsecured credit facility contains customary negative covenants that, among other things, restrict
the Company’s ability to incur debt at subsidiaries that are not guarantors; incur liens; merge or sell, transfer, lease
or otherwise dispose of all or substantially all assets; make investments, loans, advances, guarantees and
acquisitions; enter into transactions with affiliates; and enter into agreements restricting its ability to incur liens
or the ability of subsidiaries to make distributions. These covenants are subject to certain exceptions described in the
senior credit agreement. In addition, the senior unsecured credit facility requires the Company to comply with a
maximum total leverage ratio covenant and a minimum interest coverage ratio covenant, as defined in the senior
credit agreement. The senior unsecured credit facility also contains certain usual and customary representations and
warranties, affirmative covenants and events of default. As of December 31, 2009, the Company was in compliance
with all financial covenant requirements.
Senior Unsecured Notes
The 2011 and 2012 Notes
In December 2009, the Company completed the issuance of $850 million aggregate principal amount of senior
unsecured notes consisting of the 2011 and 2012 Notes. The discount associated with the 2011 and 2012 Notes was
less than $1 million. The weighted average interest rate of the 2011 and 2012 Notes was 2.0% for the year ended
December 31, 2009. The net proceeds from the sale of the debentures were used for repayment of existing
indebtedness under the Term Loan A. Interest on the 2011 and 2012 Notes is payable semi-annually on June 21 and
December 21. Interest expense was $1 million for the year ended December 31, 2009, including amortization of
deferred financing costs of less than $1 million.
The Company utilizes interest rate swaps designated as fair value hedges, effective December 21, 2009, to
convert fixed interest rates to variable rates. See Note 10 for further information regarding derivatives.
The indenture governing the 2011 and 2012 Notes, among other things, limits the Company’s ability to incur
indebtedness secured by principal properties, to enter into certain sale and leaseback transactions and to enter into
certain mergers or transfers of substantially all of DPS’ assets. The 2011 and 2012 Notes are guaranteed by
substantially all of the Company’s existing and future direct and indirect domestic subsidiaries. As of December 31,
2009, the Company was in compliance with all financial covenant requirements.
The 2013, 2018 and 2038 Notes
During 2008, the Company completed the issuance of $1,700 million aggregate principal amount of senior
unsecured notes consisting of the 2013, 2018 and 2038 Notes. The weighted average interest rate of the 2013, 2018
and 2038 Notes was 6.8% for both years ended December 31, 2009 and 2008. Interest on the senior unsecured notes
is payable semi-annually on May 1 and November 1 and is subject to adjustment. Interest expense was $117 million
and $78 million, which included amortization of deferred financing costs of $1 million each for the years ended
December 31, 2009 and 2008, respectively.
The indenture governing the senior unsecured notes, among other things, limits the Company’s ability to incur
indebtedness secured by principal properties, to enter into certain sale and lease back transactions and to enter into
certain mergers or transfers of substantially all of DPS’ assets. The senior unsecured notes are guaranteed by
substantially all of the Company’s existing and future direct and indirect domestic subsidiaries. As of December 31,
2009, the Company was in compliance with all covenant requirements.
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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)