Snapple 2011 Annual Report Download - page 108

Download and view the complete annual report

Please find page 108 of the 2011 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 140

  • 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

DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
88
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
2011
5.20%
3.80%
2010
6.06%
3.83%
Postretirement
Medical Plans
2011
4.00%
N/A
2010
4.75%
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, 2011, 2010 and 2009:
Weighted-average discount rate
Expected long-term rate of return on assets
Rate of increase in compensation levels
Pension Plans
2011
7.14%
7.91%
4.16%
2010
7.04%
7.95%
4.10%
2009
6.99%
7.62%
4.06%
Postretirement
Medical Plans
2011
4.75%
N/A
N/A
2010
5.50%
N/A
N/A
2009
6.25%
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 2012 (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%
2016
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 94% of the total pension plan assets as of December 31, 2011.
The asset allocation for the U.S. defined benefit pension plans for December 31, 2011 and 2010 are as follows:
Asset Category
Equity securities
Fixed income
Total
Target
2012
25%
75%
100%
Actual
2011
25%
75%
100%
2010
34%
66%
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.