Snapple 2011 Annual Report Download - page 85

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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
5. Investments in Unconsolidated Subsidiaries
The Company has an investment in a 50% owned Mexican joint venture with Acqua Minerale San Benedetto which gives it
the ability to exercise significant influence over operating and financial policies of the investee. The joint venture is not a variable
interest entity and the investment represents a noncontrolling ownership interest and is accounted for under the equity method of
accounting. The carrying value of the investment was $11 million as of December 31, 2011 and 2010. The Company's equity
investment does not have a readily determinable fair value as the joint venture is not publicly traded. The Company's proportionate
share of the net income resulting from its investment in the joint venture is reported under the line item captioned equity in earnings
of unconsolidated subsidiaries, net of tax, in the Consolidated Statements of Income. During the fourth quarter of 2009, the
Company received $5 million from the joint venture as its share of dividends declared by the Board of Directors of the Mexican
joint venture. The dividends received were recorded as a reduction of the Company's investment in the joint venture, consistent
with the equity method of accounting.
Additionally, the Company maintains certain investments accounted for under the cost method of accounting that have a zero
cost basis in companies that it does not control and for which it does not have the ability to exercise significant influence over
operating and financial policies.
During the third quarter of 2010, the Company contributed approximately $1 million to one of those investments, Hydrive
Energy, LLC ("Hydrive"), a beverage manufacturer, whose co-founder and significant equity holder is a member of the Company's
Board of Directors (the "Board"). As a result of this contribution, the Company increased its interest from 13.4% as of December 31,
2009 to 20.4%, thereby causing the investment to be accounted for under the equity method of accounting. There was no retroactive
impact to retained earnings as a result of the change in the method of accounting. During the fourth quarter of 2011, the Company
contributed an additional $2 million, which increased its interest in Hydrive to 40.4% as of December 31, 2011. The carrying value
of the investment was $2 million and zero as of December 31, 2011 and 2010, respectively. The Company's equity investment
does not have a readily determinable fair value as Hydrive is not publicly traded. The Company's proportionate share of the net
loss resulting from its investment is reported under the line item captioned equity in earnings of unconsolidated subsidiaries, net
of tax, in the Consolidated Statements of Income.
6. Goodwill and Other Intangible Assets
Changes in the carrying amount of goodwill for the years ended December 31, 2011, and 2010, by reporting unit are as follows
(in millions):
Balance as of December 31, 2009
Goodwill
Accumulated impairment losses
Foreign currency impact
Balance as of December 31, 2010
Goodwill
Accumulated impairment losses
Foreign currency impact
Balance as of December 31, 2011
Goodwill
Accumulated impairment losses
Beverage
Concentrates
$ 1,732
—
1,732
—
1,732
—
1,732
—
1,732
—
$ 1,732
WD
Reporting
Unit(1)
$ 1,220
—
1,220
—
1,220
—
1,220
—
1,220
—
$ 1,220
DSD
Reporting
Unit(1)
$ 180
(180)
—
—
180
(180)
—
—
180
(180)
$ —
Latin America
Beverages
$ 31
—
31
1
32
—
32
(4)
28
—
$ 28
Total
$ 3,163
(180)
2,983
1
3,164
(180)
2,984
(4)
3,160
(180)
$ 2,980
____________________________
(1) The Packaged Beverages segment is comprised of two reporting units, the Direct Store Delivery ("DSD") system and the
Warehouse Direct ("WD") system.
65