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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
55
1. Business and Basis of Presentation
References in the Notes to Audited Consolidated Financial Statements to "DPS" or "the Company" refer to Dr Pepper Snapple
Group, Inc. and all entities included in the Audited Consolidated Financial Statements. Cadbury plc and Cadbury Schweppes plc
are hereafter collectively referred to as "Cadbury" unless otherwise indicated. Kraft Foods Inc. acquired Cadbury on February 2,
2010 and on October 1, 2012, Kraft Foods Inc. spun-off its North American grocery business to its shareholders and changed its
name to International, Inc.
The Notes to Audited Consolidated Financial Statements refer 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 herein 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, mixers and water. The Company's brand portfolio includes popular
CSD brands such as Dr Pepper, Canada Dry, 7UP, Squirt, Crush, A&W, Peñafiel, Sunkist soda, Schweppes and Sun Drop, and
NCB brands such as Snapple, Hawaiian Punch, Mott's, Clamato, Mr & Mrs T mixers and Rose's.
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 Company has evaluated subsequent events through the date of issuance of the Company's Audited Consolidated Financial
Statements.
Correction of Prior Period Amounts
Subsequent to the issuance of the Company's 2012 Consolidated Financial Statements, management determined that an error
resulted from the Company improperly determining the amount related to purchases of property and equipment included in accounts
payable and other current liabilities. As a result, such amounts in the Consolidated Statements of Cash Flows for the years ended
December 31, 2012 and 2011 have been corrected from the amounts previously reported to properly reflect cash purchases of
property and equipment and the net change in operating assets and liabilities.