Snapple 2009 Annual Report Download - page 94

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5. Property, Plant and Equipment
Net property, plant and equipment consisted of the following as of December 31, 2009 and 2008 (in millions):
December 31,
2009
December 31,
2008
Land .................................................. $ 90 $ 84
Buildings and improvements................................. 341 272
Machinery and equipment .................................. 995 911
Cold drink equipment...................................... 201 157
Software ............................................... 136 111
Construction in progress .................................... 135 141
Gross property, plant and equipment ......................... 1,898 1,676
Less: accumulated depreciation and amortization.................. (789) (686)
Net property, plant and equipment........................... $ 1,109 $ 990
Land, buildings and improvements included $22 million and $23 million of assets at cost under capital lease as
of December 31, 2009 and 2008, respectively, and machinery and equipment included $1 million of assets at cost
under capital lease as of December 31, 2009 and 2008. The net book value of assets under capital lease was
$16 million and $19 million as of December 31, 2009 and 2008, respectively.
Depreciation expense amounted to $167 million, $141 million and $120 million in 2009, 2008 and 2007,
respectively. Depreciation expense was comprised of $67 million, $53 million and $53 million in cost of sales and
$100 million, $88 million and $67 million in depreciation and amortization on the Consolidated Statements of
Operations in 2009, 2008 and 2007, respectively. The depreciation expense above also includes the charge to
income resulting from amortization of assets recorded under capital leases.
Capitalized interest was $8 million, $8 million and $6 million during 2009, 2008 and 2007, respectively.
6. Investments in Unconsolidated Subsidiaries
The Company has an investment in a 50% owned Mexican joint venture which gives it the ability to exercise
significant influence over operating and financial policies of the investee. The joint venture investment represents a
noncontrolling ownership interest and is accounted for under the equity method of accounting. The carrying value
of the investment was $9 million and $12 million as of December 31, 2009 and 2008, respectively. The Company’s
equity investment does not have a readily determinable fair value as the joint venture is not publicly traded. The
Company’s proportionate share of the net income resulting from its investment in the joint venture is reported under
the line item captioned equity in earnings of unconsolidated subsidiaries, net of tax, in the Consolidated Statements
of Operations. During the fourth quarter of 2009, the Company received $5 million from the joint venture as its
share of dividends declared by the Board of Directors of the Mexican joint venture. The dividends received were
recorded as a reduction of the Company’s investment in the joint venture, consistent with the equity method of
accounting.
Additionally, the Company maintains certain investments accounted for under the cost method of accounting
that have a zero cost basis in companies that it does not control and for which it does not have the ability to exercise
significant influence over operating and financial policies.
74
DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)