Snapple 2010 Annual Report Download - page 127

Download and view the complete annual report

Please find page 127 of the 2010 Snapple annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 148

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148

DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Major Customer
Wal-Mart represents one of our major customers and accounted for more than 10% of our total net sales. For the years ended
December 31, 2010, 2009 and 2008, we recorded net sales to Wal-Martof $772 million, $733 million and $639 million, respectively.
These represent direct sales from us to Wal-Mart and were reported in our Packaged Beverages and Latin America Beverages
segments.
Additionally, customers in our Beverage Concentrates segment buy concentrate from us which is used in finished goods sold
by our third party bottlers to Wal-Mart. These indirect sales further increase the concentration of risk associated with DPS’
consolidated net sales as it relates to Wal-Mart.
22. Related Party Transactions
Separation from Cadbury
Upon the Company’s separation from Cadbury, the Company settled outstanding receivable, debt and payable balances
with Cadbury except for amounts due under the Separation and Distribution Agreement, Transition Services Agreement, Tax
Indemnity Agreement, and Employee Matters Agreement. Post separation, there were no expenses allocated to DPS from
Cadbury. See Note 3 for information on the accounting for the separation from Cadbury.
Allocated Expenses
Cadbury allocated certain costs to the Company, including costs for certain corporate functions provided for the Company
by Cadbury. These allocations were based on the most relevant allocation method for the services provided. To the extent
expenses were paid by Cadbury on behalf of the Company, they were allocated based upon the direct costs incurred. Where
specific identification of expenses was not practicable, the costs of such services were allocated based upon the most relevant
allocation method to the services provided, primarily either as a percentage of net sales or headcount of the Company. The
Company was allocated $6 million for the year ended December 31, 2008. Beginning January 1, 2008, the Company directly
incurred and recognized a significant portion of these costs, thereby reducing the amounts subject to allocation through the
methods described above.
Receivables
The Company held a note receivable balance with wholly-owned subsidiaries of Cadbury and recorded $19 million of
interest income for the year ended December 31, 2008.
Long-term Obligations
Prior to separation, the Company had a variety of debt agreements with other wholly-owned subsidiaries of Cadbury that
were unrelated to the Company’s business. The Company recorded interest expense of $67 million for the year ended
December 31, 2008 related to interest bearing related party debt.
107