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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table summarizes the weighted-average assumptions used to determine benefit obligations at the plan
measurement dates for foreign plans:
Weighted-average discount rate
Rate of increase in compensation levels
Pension Plans
2010
6.06%
3.83%
2009
6.52%
3.85%
Postretirement Medical
Plans
2010
4.75%
N/A
2009
5.50%
N/A
The following table summarizes the weighted average actuarial assumptions used to determine the net periodic benefit
costs for foreign plans for the years ended December 31, 2010, 2009 and 2008:
Weighted-average discount rate
Expected long-term rate of return on assets
Rate of increase in compensation levels
Pension Plans
2010
7.04%
7.95%
4.10%
2009
6.99%
7.62%
4.06%
2008
7.14%
7.66%
4.23%
Postretirement
Medical Plans
2010
5.50%
N/A
N/A
2009
6.25%
N/A
N/A
2008
5.25%
N/A
N/A
The following table summarizes the health care cost trend rate assumptions used to determine the postretirement medical
plan obligation for U.S. plans:
Health care cost trend rate assumed for 2011 (Initial Rate)
Rate to which the cost trend rate is assumed to decline (Ultimate Rate)
Year that the rate reaches the ultimate trend rate
9.00%
5.00%
2017
The effect of a 1% increase or decrease in health care trend rates on the U.S. and foreign postretirement medical plans
would not significantly change the net periodic benefit costs or the benefit obligation at the end of the year.
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, 2010 and 2009 are as follows:
Asset Category
Equity securities
Fixed income
Total
Target
2011
25%
75%
100%
Actual
2010
34%
66%
100%
2009
50%
50%
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.
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