Snapple 2009 Annual Report Download - page 93

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the Company’s Consolidated Statement of Operations at the time of the estimate change. In addition, pursuant to the
terms of the Tax Indemnity Agreement, if DPS breaches certain covenants or other obligations or DPS is involved in
certain change-in-control transactions, Cadbury may not be required to indemnify the Company for any of these
unrecognized tax benefits that are subsequently realized. See Note 12 for further information regarding the tax
impact of the separation.
Items Impacting Equity
In connection with the Company’s separation from Cadbury, the following transactions were recorded as a
component of Cadbury’s net investment in DPS as of May 7, 2008 (in millions):
Contributions Distributions
Legal restructuring to purchase Canada operations from Cadbury ...... $ — $ (894)
Legal restructuring relating to Cadbury confectionery operations,
including debt repayment ................................. — (809)
Legal restructuring relating to Mexico operations ................. — (520)
Contributions from parent ................................... 318 —
Tax reserve provided under FIN 48 as part of separation, net of
indemnity ............................................. — (19)
Other .................................................. (59) —
Total ................................................ $ 259 $ (2,242)
Prior to the May 7, 2008, separation date, the Company’s total invested equity represented Cadbury’s interest
in the recorded assets of DPS. In connection with the distribution of DPS’ stock to Cadbury plc shareholders on
May 7, 2008, Cadbury’s total invested equity was reclassified to reflect the post-separation capital structure of
$3 million par value of outstanding common stock and contributed capital of $3,133 million.
4. Inventories
Inventories as of December 31, 2009 and 2008 consisted of the following (in millions):
December 31,
2009
December 31,
2008
Raw materials ............................................ $ 105 $ 78
Work in process .......................................... 4 4
Finished goods ........................................... 193 231
Inventories at FIFO cost .................................. 302 313
Reduction to LIFO cost..................................... (40) (50)
Inventories ............................................ $ 262 $ 263
73
DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)