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DR PEPPER SNAPPLE GROUP, INC.
NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
87
Investment Policy and Strategy
DPS has established formal investment policies for the assets associated with defined benefit plans. The Company's investment
policy and strategy are mandated by the Company's Investment Committee. The overriding investment objective is to provide for
the availability of funds for pension obligations as they become due, to maintain an overall level of financial asset adequacy and
to maximize long-term investment return consistent with a reasonable level of risk. DPS' pension plan investment strategy includes
the use of actively-managed securities. Investment performance both by investment manager and asset class is periodically
reviewed, as well as overall market conditions with consideration of the long-term investment objectives. None of the plan assets
are invested directly in equity or debt instruments issued by DPS. It is possible that insignificant indirect investments exist through
its equity holdings. The equity and fixed income investments under DPS' sponsored pension plan assets are currently well diversified.
The plans' asset allocation policy is reviewed at least annually. Factors considered when determining the appropriate asset
allocation include changes in plan liabilities, an evaluation of market conditions, tolerance for risk and cash requirements for
benefit payments. The investment policy contains allowable ranges in asset mix as outlined in the table below:
Asset Category Target Range
U.S. equity securities 15% - 25%
International equity securities 5% - 10%
U.S. fixed income 65% - 85%
Assets of the Pension and Postretirement Medical Plans
The following tables present the major categories of plan assets for the pension and postretirement medical plan assets as of
December 31, 2013 and 2012 (in millions):
Pension Plans Postretirement Medical Plans
December 31, December 31, December 31, December 31,
2013 2012 2013 2012
Cash and cash equivalents $ 5 $ 4 $ — $ —
Equity securities
U.S. Large-Cap equities 39 42 11
International equities 23 25 ——
Fixed income securities
Derivative financial instruments 18 14 ——
U.S. Municipal bonds 67——
U.S. Corporate bonds 138 152 44
International bonds 26 27 ——
Total assets $ 255 $ 271 $ 5 $ 5
Fixed income securities
Derivative financial instruments $ 18 $ 14 $ — $ —
Total liabilities $ 18 $ 14 $ — $ —
Total net assets $ 237 $ 257 $ 5 $ 5