Snapple 2009 Annual Report Download - page 62

On April 11, 2008, these arrangements were amended and restated. The amended and restated arrangements
consist of a $2.7 billion senior unsecured credit agreement that provided a $2.2 billion Term Loan A facility and a
$500 million revolving credit facility (collectively, the “senior unsecured credit facility”) and a 364-day bridge
credit agreement that provided a $1.7 billion bridge loan facility.
On May 7, 2008, in connection with the Company’s separation from Cadbury, $3,019 million was repaid to
Cadbury. Prior to separation from Cadbury, the Company had a variety of debt agreements with other wholly-owned
subsidiaries of Cadbury that were unrelated to DPS’ business.
During 2008, the Company completed the issuance of $1.7 billion aggregate principal amount of senior
unsecured notes consisting of $250 million aggregate principal amount of 6.12% senior notes due May 1, 2013 (the
“2013 Notes”), $1.2 billion aggregate principal amount of 6.82% senior notes due May 1, 2018 (the “2018 Notes”),
and $250 million aggregate principal amount of 7.45% senior notes due May 1, 2038 (the “2038 Notes”).
During 2008, the Company repaid the $1.7 billion bridge loan facility and made combined mandatory and
optional repayments toward the Term Loan A principal totaling $395 million.
The following is a description of the senior unsecured credit facility and the senior unsecured notes. The
summaries of the senior unsecured credit facility and the senior unsecured notes are qualified in their entirety by the
specific terms and provisions of the senior unsecured credit agreement and the indenture governing the senior
unsecured notes, respectively, copies of which are included as exhibits to this Annual Report on Form 10-K.
Senior Unsecured Credit Facility
The Company’s senior unsecured credit agreement provides senior unsecured financing of up to $2.7 billion,
consisting of:
• the Term Loan A in an aggregate principal amount of $2.2 billion with a term of five years, which was fully
repaid in December 2009 prior to its maturity; and
• the Revolver in an aggregate principal amount of $500 million with a maturity in 2013. The balance of
principal borrowings under the Revolver was $405 million and $0 as of December 31, 2009 and 2008,
respectively. Up to $75 million of the Revolver is available for the issuance of letters of credit, of which
$41 million and $38 million was utilized as of December 31, 2009 and 2008, respectively. $54 million was
available for additional borrowings or letters of credit as of December 31, 2009.
Borrowings under the senior unsecured credit facility bear interest at a floating rate per annum based upon the
London interbank offered rate for dollars (“LIBOR”) or the alternate base rate (“ABR”), in each case plus an
applicable margin which varies based upon the Company’s debt ratings, from 1.00% to 2.50%, in the case of LIBOR
loans and 0.00% to 1.50% in the case of ABR loans. The alternate base rate means the greater of (a) JPMorgan
Chase Bank’s prime rate and (b) the federal funds effective rate plus one half of 1%. Interest is payable on the last
day of the interest period, but not less than quarterly, in the case of any LIBOR loan and on the last day of March,
June, September and December of each year in the case of any ABR loan. The average interest rate for the years
ended December 31, 2009 and 2008 was 4.9% for each year. Interest expense was $129 million and $85 million,
which included amortization of deferred financing costs of $16 million and $10 million, for the years ended
December 31, 2009 and 2008, respectively. Deferred financing costs of $30 million were expensed when the Term
Loan A was terminated upon repayment in December 2009.
The Company utilizes interest rate swaps to convert variable interest rates to fixed rates. See Note 10 of the
Notes to our Audited Consolidated Financial Statements for further information regarding derivatives.
An unused commitment fee is payable quarterly to the lenders on the unused portion of the commitments in
respect of the Revolver equal to 0.15% to 0.50% per annum, depending upon the Company’s debt ratings. The
Company incurred $1 million in unused commitment fees in each year ended December 31, 2009 and 2008.
Additionally, interest expense included $3 million and $2 million for amortization of deferred financing costs
associated with the Revolver for the years ended December 31, 2009 and 2008, respectively.
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