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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
56
1. Business and Basis of Presentation
References in this Annual Report on Form 10-K to "we", "our", "us", "DPS" or "the Company" refer to Dr Pepper Snapple
Group, Inc. and all entities included in our Audited Consolidated Financial Statements. Cadbury plc and Cadbury Schweppes plc
are hereafter collectively referred to as "Cadbury" unless otherwise indicated. Kraft Foods Inc., which acquired Cadbury on
February 2, 2010, is hereafter referred to as "Kraft".
This Annual Report on Form 10-K refers to some of DPS' owned or licensed trademarks, trade names and service marks,
which are referred to as the Company's brands. All of the product names included in this Annual Report on Form 10-K are either
DPS' registered trademarks or those of the Company's licensors.
Nature of Operations
DPS is a leading integrated brand owner, manufacturer and distributor of non-alcoholic beverages in the United States ("U.S."),
Canada, and Mexico with a diverse portfolio of flavored (non-cola) carbonated soft drinks ("CSDs") and non-carbonated beverages
("NCBs"), including ready-to-drink teas, juices, juice drinks and mixers. The Company’s brand portfolio includes popular CSD
brands such as Dr Pepper, Canada Dry, 7UP, Squirt, Crush, A&W, Sunkist soda, Peñafiel, Schweppes, and Sun Drop, and NCB
brands such as Snapple, Hawaiian Punch, Mott's, Clamato, Rose’s and Mr & Mrs T mixers.
We were incorporated in Delaware on October 24, 2007. In 2008, Cadbury separated its beverage business in the U.S., Canada,
Mexico and the Caribbean (the "Americas Beverages business") from its global confectionery business by contributing the
subsidiaries that operated its Americas Beverages business to us.
Principles of Consolidation
DPS consolidates all wholly-owned subsidiaries. The Company uses the equity method to account for investments in companies
if the investment provides the Company with the ability to exercise significant influence over operating and financial policies of
the investee. Consolidated net income includes DPS' proportionate share of the net income or loss of these companies. Judgment
regarding the level of influence over each equity method investment includes considering key factors such as ownership interest,
representation on the board of directors, participation in policy-making decisions and material intercompany transactions.
The Company eliminates all significant intercompany transactions, including the intercompany portion of transactions with
equity method investees, from the financial results.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP"). In the opinion of management, all adjustments, consisting principally
of normal recurring adjustments, considered necessary for a fair presentation have been included. The preparation of financial
statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported
in the financial statements and the accompanying notes. Actual results could differ from these estimates.
The consolidated financial statements may not be indicative of the Company's future performance and may not reflect what
its consolidated results of operations, financial position and cash flows would have been had the Company operated as an
independent company during all of the periods presented. To the extent that an asset, liability, revenue or expense is directly
associated with the Company, it is reflected in the accompanying consolidated financial statements.
The Company has evaluated subsequent events through the date of issuance of the Company's Audited Consolidated Financial
Statements.
Reclassifications
The prior year accounts payable and other current liabilities have been reclassified in the Consolidated Balance Sheets to
conform to the current year's presentation with corresponding changes in prior years' Consolidated Statements of Cash Flows with
no impact to total cash provided by (used in) operating, investing or financing activities. The reclassifications to the Consolidated
Balance Sheets also resulted in changes to certain items in prior years' Notes 7, 8, 9 and 20. Other changes have been made to
Consolidated Statements of Cash Flows for prior years to reflect changes made in the fourth quarter of 2011 with no impact to
total cash provided by (used in) operating, investing or financing activities.