Snapple 2009 Annual Report Download - page 109

Deferred tax assets (liabilities), as determined under U.S. GAAP, were comprised of the following as of
December 31, 2009 and 2008 (in millions):
December 31,
2009
December 31,
2008
Deferred income tax assets:
Pension and postretirement benefits.......................... $ 19 $ 36
Accrued liabilities ...................................... 54 56
Compensation ......................................... 15 27
Other ................................................ 81 85
$ 169 $ 204
Deferred income tax liabilities:
Intangible assets ........................................ $ (842) $ (816)
Fixed assets ........................................... (120) (115)
Other ................................................ (23) —
$ (985) $ (931)
Valuation allowance ....................................... (18) (21)
Net deferred income tax liability ............................. $ (834) $ (748)
The Company’s Canadian deferred tax assets included a separation related balance of $147 million that was
offset by a liability due to Cadbury of $126 million driven by the Tax Indemnity Agreement. Anticipated legislation
in Canada could result in a future partial write down of tax assets which would be offset to some extent by a partial
write down of the liability due to Cadbury.
As of December 31, 2009, the Company had $15 million in tax effected credit carryforwards and net operating
loss carryforwards. Net operating loss and credit carryforwards of $1 million expire in the next five years while the
remainder expire in greater than five years.
The Company had a deferred tax valuation allowance of $18 million and $21 million as of December 31, 2009
and 2008, respectively. The valuation allowance is primarily related to a foreign operation and was established as
part of the separation transaction.
Undistributed earnings considered to be permanently reinvested in non-U.S. subsidiaries totaled approxi-
mately $115 million and $124 million as of December 31, 2009 and 2008, respectively. Deferred income taxes have
not been provided on this income as the Company believes these earnings to be permanently reinvested. It is not
practicable to estimate the amount of additional tax that might be payable on these undistributed foreign earnings.
The Company files income tax returns for U.S. federal purposes and various state jurisdictions. The Company
also files income tax returns in various foreign jurisdictions, principally Canada and Mexico. The U.S. and most
state income tax returns for years prior to 2006 are considered closed to examination by applicable tax authorities.
In the third quarter of 2009, the Internal Revenue Service (“IRS”) concluded its audit of our 2003-2005 federal
income tax returns. Federal income tax returns for 2006, 2007 and 2008 are currently under examination by the IRS.
Canadian income tax returns are open for audit for tax years 2008 and forward and Mexican income tax returns are
open for tax years 2000 and forward.
Under the Tax Indemnity Agreement, Cadbury agreed to indemnify DPS for net unrecognized tax benefits and
other tax related items of $402 million. This balance increased by $16 million during 2009 and was offset by
indemnity income recorded as a component of other income in the Consolidated Statements of Operations. In
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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)