Snapple 2013 Annual Report Download - page 75

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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
65
4. Inventories
Inventories as of December 31, 2013 and 2012 consisted of the following (in millions):
December 31, December 31,
2013 2012
Raw materials $ 86 $ 114
Spare parts 22 20
Work in process 45
Finished goods 122 131
Inventories at first in first out cost 234 270
Reduction to last in first out cost (34)(73)
Inventories $ 200 $ 197
5. Property, Plant and Equipment
Net property, plant and equipment consisted of the following as of December 31, 2013 and 2012 (in millions):
December 31, December 31,
2013 2012
Land $ 73 $ 72
Buildings and improvements 483 465
Machinery and equipment 1,302 1,275
Cold drink equipment 310 308
Software 221 195
Construction in progress 63 50
Gross property, plant and equipment 2,452 2,365
Less: accumulated depreciation and amortization (1,279)(1,163)
Net property, plant and equipment $ 1,173 $ 1,202
Buildings and improvements included $49 million of assets at cost under capital lease as of December 31, 2013 and 2012.
Machinery and equipment included $7 million and $6 million of assets at cost under capital lease as of December 31, 2013 and
2012, respectively. The net book value of assets under capital lease was $50 million and $52 million as of December 31, 2013 and
2012, respectively.
Depreciation expense amounted to $196 million, $203 million and $198 million for the years ended December 31, 2013, 2012
and 2011, respectively. Depreciation expense was comprised of $86 million, $84 million and $81 million in cost of sales and $110
million, $119 million and $117 million in depreciation and amortization on the Consolidated Statements of Income in 2013, 2012
and 2011, respectively. The depreciation expense above also includes the charge to income resulting from amortization of assets
recorded under capital leases.
Capitalized interest was $1 million, $2 million and $3 million during 2013, 2012 and 2011, respectively.
6. Investment 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 $14 million and $12 million as of December 31, 2013 and 2012, respectively.