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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The estimated fair values of other financial liabilities not measured at fair value on a recurring basis at December 31, 2010
and 2009, are as follows (in millions):
Long term debt — 2011 Notes(1)
Long term debt — 2012 Notes(1)
Long term debt — 2013 Notes
Long term debt — 2018 Notes
Long term debt — 2038 Notes(1)
Long term debt — Revolving credit facility
December 31, 2010
Carrying Amount
$ 404
455
250
724
248
—
Fair Value
$ 403
460
276
861
308
—
December 31, 2009
Carrying Amount
$ 396
446
250
1,200
250
405
Fair Value
$ 400
451
273
1,349
291
405
____________________________
(1) The carrying amount includes adjustments related to the change in the fair value of interest rate swaps designated as fair value
hedges on the 2011, 2012 and 2038 Notes. See Note 10 for further information regarding derivatives.
Capital leases have been excluded from the calculation of fair value for both 2010 and 2009.
The fair value amounts for cash and cash equivalents, accounts receivable, net and accounts payable and accrued expenses
approximate carrying amounts due to the short maturities of these instruments. The fair value of long term debt as of December 31,
2010 and 2009 was estimated based on quoted market prices for publicly traded securities. The difference between the fair value
and the carrying value represents the theoretical net premium or discount that would be paid or received to retire all debt at such
date.
15. Employee Benefit Plans
Pension and Postretirement Plans
Overview
The Company has U.S. and foreign pension and postretirement medical plans which provide benefits to a defined group of
employees. The Company has several non-contributory defined benefit plans and postretirement medical plans, each having a
measurement date of December 31. To participate in the defined benefit plans, eligible employees must have been employed by
the Company for at least one year. The postretirement benefits are limited to qualified expenses and are subject to deductibles,
co-payment provisions, and other provisions. Employee benefit plan obligations and expenses included in our Audited
Consolidated Financial Statements are determined using actuarial analyses based on plan assumptions including employee
demographic data such as years of service and compensation, benefits and claims paid and employer contributions, among
others. The Company also participates in various multi-employer defined benefit plans.
Prior to the separation from Cadbury, certain employees of the Company participated in various defined benefit plans as
well as a postretirement medical plan sponsored by Cadbury, which included participants of both DPS and other Cadbury
global companies. Effective January 1, 2008, the Company separated these commingled plans into separate single employer
plans sponsored by DPS. As a result, the Company re-measured the projected benefit obligation of the stand alone pension and
postretirement medical plans and recorded the assumed liabilities and assets based on the number of participants associated
with DPS. The separation of the commingled plans into stand alone plans resulted in an increase of approximately $71 million
to other non-current liabilities and a decrease of approximately $66 million to AOCL, a component of stockholders’ equity for
the year ended December 31, 2009.
In 2008, DPS’ Compensation Committee approved the suspension of two of the Company’s principal defined benefit
pension plans, which are cash balance plans. The cash balance plans maintain individual recordkeeping accounts for each
participant which are annually credited with interest credits equal to the 12-month average of one-year U.S. Treasury Bill rates,
plus 1%, with a required minimum rate of 5%. Effective December 31, 2008, participants in the plans will not earn additional
benefits for future services or salary increases. However, effective January 1, 2009, current participants were eligible for an
enhanced defined contribution (the “EDC”) within DPS’ Savings Incentive Plan (the “SIP”).
During 2010, the Company approved and communicated various changes to certain U.S. postretirement medical plans.
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