Snapple 2009 Annual Report Download - page 121

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The pension assets of DPS’ U.S. plans represent approximately 93% of the total pension plan assets. The asset
allocation for the U.S. defined benefit pension plans for December 31, 2009 and 2008 are as follows:
Asset Category
Target
2010 2009 2008
Actual
Equity securities .................................................... 35% 50% 49%
Fixed income ...................................................... 65% 50% 51%
Total ........................................................... 100% 100% 100%
Investment Policy and Strategy
DPS has established formal investment policies for the assets associated with defined benefit plans. The
Company’s investment policy and strategy are mandated by the Company’s Investment Committee. The overriding
investment objective is to provide for the availability of funds for pension obligations as they become due, to
maintain an overall level of financial asset adequacy, and to maximize long-term investment return consistent with a
reasonable level of risk. DPS’ pension plan investment strategy includes the use of actively-managed securities. The
Investment Committee periodically reviews investment performance both by investment manager and asset class, as
well as overall market conditions with consideration of the long-term investment objectives. None of the plan assets
are invested directly in equity or debt instruments issued by DPS. It is possible that insignificant indirect
investments exist through its equity holdings. The equity and fixed income investments under DPS sponsored
pension plan assets are currently well diversified across all areas of the equity market and consist of both corporate
and U.S. government bonds. The pension plans do not currently invest directly in any derivative investments.
The Plan’s asset allocation policy is reviewed at least annually. Factors considered when determining the
appropriate asset allocation include changes in plan liabilities, an evaluation of market conditions, tolerance for risk
and cash requirements for benefit payments. The investment policy contains allowable ranges in asset mix as
outlined in the table below:
Asset Category Target Range
Equity securities:
U.S. Large Cap equities . . .................................................. 25%-40%
U.S. Small-Mid Cap equities ................................................. 4%-12%
International securities ........................................................ 15%-25%
U.S. fixed income ........................................................... 30%-50%
Based on the increase in funded status and reduction in plan liabilities during 2009 as compared to 2008, the
Investment Committee changed the target asset allocation to approximately 35% equity securities and 65% fixed
income securities in order to protect the existing assets and generate a guaranteed return sufficient to meet the
aforementioned investment objectives.
101
DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)