Snapple 2013 Annual Report Download - page 52

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Additionally, we recorded an estimated $56 million withdrawal liability for one of the four multi-employer pension plans we
currently participate in as we intend to withdraw from this plan. As we can not estimate the timing or actual amount of payments
until the plan formally assesses us with the withdrawal liability, those payments have been excluded from the table above.
Refer to Note 14 of the Notes to our Audited Consolidated Financial Statements for further information regarding our single
employer and multi-employer plans discussed above.
We have a deferred compensation plan where the assets are maintained in a rabbi trust and the corresponding liability related
to the plan is recorded in other non-current liabilities. We did not include estimated payments related to the deferred compensation
liability as the timing and payment of these amounts are determined by the participants and outside our control. Refer to Note 2
of the Notes to our Audited Consolidated Financial Statements.
In general, we are covered under conventional insurance programs with high deductibles or are self-insured for large portions
of many different types of claims. Our insurance liability for our losses related to these programs are estimated through actuarial
procedures of the insurance industry and by using industry assumptions, adjusted for our specific expectations based on our claim
history. As of December 31, 2013, our insurance liability totaled approximately $136 million. Refer to Notes 8 and 11 of the Notes
to our Audited Consolidated Financial Statements. We did not include estimated payments related to our insurance liability in the
table above.
OFF-BALANCE SHEET ARRANGEMENTS
We currently participate in four multi-employer pension plans. In the event that we withdraw from participation in one of
these plans, the plan will ultimately assess us a withdrawal liability for exiting the plan, and U.S. GAAP would require us to record
the withdrawal charge as an expense in our consolidated statements of income and as a liability on our consolidated balance sheets.
During the second quarter of 2013, the Company recognized a $1 million withdrawal liability for one of the collective bargaining
units under a multi-employer plan based on the trustees' assessment. During the fourth quarter of 2013, the Company recognized
a $56 million withdrawal liability related to Local 710 as we intend to withdraw during our upcoming collective bargaining session.
As a result of these actions, the Company recognized additional multi-employer pension plan expense of $57 million for the year
ended December 31, 2013. There were no additional multi-employer plan expenses recognized during the year ended December
31, 2012. We recognized additional multi-employer plan expense of $1 million during the year ended December 31, 2011.
There are no other off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect
on our results of operations, financial condition, liquidity, capital expenditures or capital resources other than letters of credit
outstanding. Refer to Note 9 of the Notes to our Audited Consolidated Financial Statements for additional information regarding
outstanding letters of credit.
OTHER MATTERS
Agreements with PepsiCo and Coca-Cola
On February 26, 2010, we completed the licensing of certain brands to PepsiCo following PepsiCo's acquisitions of Pepsi
Bottling Group and PepsiAmericas, Inc.. Under the agreements, we received a one-time nonrefundable cash payment of $900
million. The agreements have an initial period of 20 years with automatic 20-year renewal periods, and require PepsiCo to meet
certain performance conditions.
On October 4, 2010, we completed the licensing of certain brands to Coca-Cola following Coca-Cola's acquisition of Coca-
Cola Enterprises' North American Bottling Business and executed separate agreements pursuant to which Coca-Cola began offering
Dr Pepper and Diet Dr Pepper in local fountain accounts and its Freestyle fountain program. Under the agreements, we received
a one-time nonrefundable cash payment of $715 million. The agreements have an initial period of 20 years with automatic 20-
year renewal periods, and require Coca-Cola to meet certain performance conditions.
Under a separate agreement, Coca-Cola has agreed to include Dr Pepper and Diet Dr Pepper brands in its Freestyle fountain
program. The Freestyle fountain program agreement has a period of 20 years.
These payments were recorded as deferred revenue and recognized as net sales ratably over the estimated 25-year life of the
customer relationships.