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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
64
Recently Adopted Provisions of U.S. GAAP
In accordance with U.S. GAAP, the following provisions, which had no material impact on the Company's financial position,
results of operations or cash flows, were effective as of January 1, 2013:
• The requirement to provide disclosures related to offsetting assets and liabilities, specifically as it relates to offsetting
disclosures, wherein an entity must now make separate disclosures regarding the gross assets/liabilities, the offsetting amounts
and the net assets/liabilities. Refer to Note 10 for additional information.
• The requirement to present significant amounts reclassified out of AOCL by the respective line items of net income. Refer
to Note 18 for additional information.
In accordance with U.S. GAAP, the following provision, which had no material impact on the Company's financial position,
results of operations or cash flows, was effective as of July 17, 2013:
• The ability to use the Fed Funds Effective Swap Rate as a U.S. benchmark interest rate for hedge accounting purposes
under U.S. GAAP.
3. Acquisition
On February 25, 2013, the Company acquired certain assets of Dr. Pepper/7-Up Bottling Company of the West ("DP/7UP
West") to strengthen the Company's route-to-market in the U.S. and support efforts to build and enhance our leading brands. The
fair value of the consideration paid for this acquisition was $23 million, consisting of the issuance by the Company of 313,105
shares of common stock to DP/7UP West and $10 million in cash. The fair value of the common stock issued was determined
using the closing stock price on the acquisition date.
The following table summarizes the allocation of fair value of the assets acquired and liabilities assumed by major class for
the acquisition (in millions):
Fair Value Useful Life
Property, plant & equipment $ 7 3 - 40 years
Distribution rights: definite-lived 2 5 - 15 years
Distribution rights: indefinite-lived 10 —
Goodwill 5 —
Current liabilities, net of current assets assumed (1) —
Total $ 23
The acquisition was accounted for as a business combination, and the identifiable assets acquired and liabilities assumed were
recorded at their estimated fair values at the date of acquisition. The excess of the purchase price over the estimated fair values
was recorded as goodwill.
In connection with this acquisition, the Company recorded goodwill of $5 million, which is not deductible for tax purposes.
The Company also recorded $12 million in intangible assets related to distribution rights. DP/7UP West has 41,785 shares of the
Company's common stock remaining in an escrow account to satisfy certain working capital adjustments and applicable
indemnification claims, pursuant to the terms of the purchase agreement.
The Company has not presented pro forma results of operations for the acquisition because it is not material to the Company's
Consolidated Financial Statements.