Dr Pepper Snapple Group Reports Fourth Quarter and Full Year 2012 Results and Raises Quarterly Dividend

Wed Feb 13, 2013 8:00am EST

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Net sales increased 2% for the quarter and the year.

Reported EPS were $0.81 for the quarter. Core EPS were $0.82 for the quarter.

For the full year, the company repurchased $400 million of its common stock.

The company raises quarterly dividend 12% from $0.34 to $0.38 per common share.
PLANO, Texas--(Business Wire)--
Dr Pepper Snapple Group, Inc. (NYSE: DPS) reported fourth quarter 2012 EPS of
$0.81 compared to $0.77 in the prior year period. Excluding unrealized commodity
mark-to-market losses in both years and certain items affecting comparability in
the prior year period, Core EPS were $0.82 compared to $0.84 in the prior year. 

For the quarter, reported net sales increased 2% reflecting favorable price/mix,
partially offset by a 1% decline in sales volumes. Foreign currency added
approximately 1 percentage point to net sales growth. Reported segment operating
profit (SOP) increased 5%, or $19 million, as the contributions from net sales
growth, ongoing productivity improvements and lower marketing investments were
partially offset by planned increases in labor and benefits and a higher LIFO
inventory provision of $6 million. The year ago quarter included an $18 million
provision for a certain legal matter. Reported income from operations for the
quarter was $292 million, including $1 million of unrealized commodity
mark-to-market losses. Reported income from operations was $271 million in the
prior year period, including $7 million of unrealized commodity mark-to-market
losses and the previously disclosed legal provision. 

For the year, reported net sales increased 2%. Reported income from operations
was $1,092 million, compared to $1,024 million in the prior year period. For the
year, the company reported earnings of $2.96 per diluted share compared to $2.74
per diluted share in the prior year period. Excluding a $17 million unrealized
commodity mark-to-market gain in the current year and a $23 million unrealized
commodity mark-to-market loss in the prior year period and certain items
affecting comparability in both years, Core EPS were $2.92 compared to $2.85 in
the prior year period. 

DPS President and CEO Larry Young said, "As I look back on 2012, I am proud of
the team`s continuing ability to outperform the CSD category, growing dollar
share as measured by Nielsen and closing distribution gaps across CSDs, teas and
juices." 

Young continued, "Our employees have embraced Rapid Continuous Improvement
(RCI), and it continues to drive tangible operational and financial
improvements. Moving forward, nothing is more important than reinvigorating the
CSD category and giving lapsed consumers a reason to come back to the brands
they know and love. Our new TEN platform provides consumers the great taste and
full mouth-feel of a regular CSD, but with only 10 calories per 12 ounce
serving. These products have been well-received by both consumers and our retail
and bottling partners and, collectively with Dr Pepper TEN, give us great
confidence that we can bring excitement and lapsed users back to the category."

 EPS reconciliation                                     Fourth Quarter                                     Full Year                                
                                                        2012              2011              Percent        2012            2011            Percent  
                                                                                            Change                                         Change   
 Reported EPS                                           $0.81             $0.77             5              $2.96           $2.74           8        
                                                                                                                                                    
 Unrealized commodity mark-to-market net (gain)/loss    0.01              0.02                             (0.04)          0.06                     
                                                                                                                                                    
 Items affecting comparability                                                                                                                      
 - Depreciation adjustment on capital lease             -                 -                                0.02            -                        
 - Foreign deferred tax benefit                         -                 -                                (0.02)          -                        
                                                                                                                                                    
 - Legal Provision                                      -                 0.05                             -               0.05                     
                                                        ------            ------            ------         ------          ------          ------   
 Core EPS                                               $0.82             $0.84             (2)            $2.92           $2.85           2        


EPS - earnings per share 

Net sales and SOP in the tables and commentary below are presented on a currency
neutral basis.For a reconciliation of non-GAAP to GAAP measures see pages A-5
through A-10 accompanying this release.

 Summary of 2012 results    As Reported                          Currency Neutral                   
 (Percent change)                                                                                   
                            Fourth              Full Year        Fourth                  Full Year  
                            Quarter                              Quarter                            
 BCS Volume                 -                   (1)              -                       (1)        
 Sales Volume               (1)                 (2)              (1)                     (2)        
 Net Sales                  2                   2                1                       2          
 SOP                        5                   2                5                       3          


BCS - bottler case sales 

BCS Volume

For the quarter, both carbonated soft drinks (CSDs) and non-carbonated beverages
(NCBs) BCS volume was flat. 

In CSDs, Dr Pepper volume decreased 1% as we cycled the national rollout of Dr
Pepper TEN in the prior year period. Our Core 5 brands increased 3% led by a
high-single digit increase in Canada Dry. Sunkist soda and A&W increased
low-single digits, while Sun Drop declined by a mid-single digit. 7UP was flat
in the quarter. All other CSD brands increased 1% for the quarter. Fountain
foodservice volume grew 1%, cycling 5% volume growth in the prior year period. 

In NCBs, Clamato grew 34%, Aguafiel increased 6% and Mott`s posted a 2% increase
in volume. Snapple grew 1% in the quarter, cycling 10% growth in the prior year.
These increases were offset by an 8% decline in Hawaiian Punch volumes. 

By geography, U.S. and Canada volume was flat and Mexico and the Caribbean
volume increased 8%. 

For the year, BCS volume decreased 1%. CSD volume was flat and NCBs declined 5%.
Dr Pepper volumes were flat, as growth from the 2011 launch of Dr Pepper TEN and
new availabilities in fountain foodservice offset declines in the base business.
The Core 5 brands were flat as a mid-single digit increase in Canada Dry was
offset by a double-digit decline in Sun Drop and low-single digit declines in
7UP and Sunkist soda. A&W volume was flat for the year. All other CSD brands
were flat for the year. Fountain foodservice volume grew 3% cycling a mid-single
digit increase in the prior year. In NCBs, Hawaiian Punch declined 17% and
Mott`s volume declined 7% as retail pricing increased on both brands. These
declines were partially offset by a 15% increase in Clamato and a 3% increase in
Snapple driven by both packaging and product innovation. By geography, U.S. and
Canada volume decreased 1% and Mexico and Caribbean volume increased 2%. 

Sales volume

Sales volume decreased 1% for the quarter and 2% for the year.

 2012 Segment results       As Reported                                                                              
 (Percent Change)                                                                                                    
                            Fourth Quarter                                     Full Year                             
                            Sales              Net               SOP           Sales            Net             SOP  
                            Volume             Sales                           Volume           Sales                
 Beverage Concentrates      (2)                2                 5             (2)              2               (1)  
 Packaged Beverages         (1)                -                 2             (2)              2               4    
 Latin America Beverages    8                  11                56            2                -               19   
 Total                      (1)                2                 5             (2)              2               2    
                                                                                                                     


 2012 Segment results       Currency Neutral                                                                         
 (Percent Change)                                                                                                    
                            Fourth Quarter                                     Full Year                             
                            Sales              Net               SOP           Sales            Net             SOP  
                            Volume             Sales                           Volume           Sales                
 Beverage Concentrates      (2)                2                 5             (2)              2               (1)  
 Packaged Beverages         (1)                -                 3             (2)              2               4    
 Latin America Beverages    8                  7                 56            2                5               50   
 Total                      (1)                1                 5             (2)              2               3    
                                                                                                                     


Beverage Concentrates

Net sales for the quarter increased 2% as concentrate price increases taken
earlier in the year and favorable mix were offset by a 2% volume decline with
lower concentrate buy-in ahead of the 2013 price increase. SOP increased 5%
reflecting net sales growth and lower marketing investments as we cycled the
national launch of Dr Pepper TEN in the prior year period. 

Packaged Beverages

Net sales were flat for the quarter as a 1% volume decline and higher trade
spending were offset by favorable product and package mix. SOP increased 3% on a
favorable legal provision comparison and ongoing productivity improvements that
were partially offset by certain increases in labor and benefits costs and a
higher LIFO inventory provision of $6 million. 

Latin America Beverages

Net sales for the quarter increased 7% reflecting an 8% increase in sales
volumes. SOP increased 56% reflecting net sales growth and favorable operating
leverage from ongoing RCI productivity improvements partially offset by higher
commodity costs. 

Corporate and other items

For the quarter, corporate costs totaled $73 million, including a $1 million
unrealized commodity mark-to-market loss. Corporate costs in the prior year
period were $76 million, including a $7 million unrealized commodity
mark-to-market loss. 

For the year, corporate costs totaled $261 million, including $17 million of
unrealized commodity mark-to-market gains. Corporate costs in the prior year
period were $306 million, including a $23 million unrealized commodity
mark-to-market loss. 

Net interest expense increased $2 million for the quarter compared to the prior
year, as the company refinanced low floating rate debt in November 2011. 

For the quarter, the effective tax rate was 35.4%. For the year, the effective
tax rate was 35.7% compared to 34.6% in the prior year, which included a $19
million benefit related to the PepsiCo, Inc. (PepsiCo) and The Coca-Cola Company
(Coca-Cola) transactions. 

Cash flow

For the year, the company generated $458 million of cash from operating
activities, after making tax payments of $531 million related to the PepsiCo and
Coca-Cola licensing agreements. Capital spending totaled $193 million compared
to $215 million in the prior year period. The company returned $684 million to
shareholders in the form of stock repurchases ($400 million) and dividends ($284
million). 

Dividend Increase

Today the company announced that its Board of Directors declared a quarterly
dividend of $0.38 per share on the company`s common stock - a 12% increase in
the dividend rate. The dividend is payable in U.S. dollars on April 5, 2013, to
shareholders of record as of close of business on March 15, 2013. 

2013 full year guidance

The company expects full year reported net sales growth of approximately 3% and
diluted earnings per share to be in the $3.04 to $3.12 range, excluding the
impact of commodity mark-to-market gains and losses. 

Brand investments associated with the launch of our TEN platform are expected to
exceed $30 million. 

Packaging and ingredient costs are expected to increase COGS by 2%, on a
constant volume/mix basis. 

The company expects its effective tax rate to be approximately 37%. 

The company expects capital spending to be approximately 3.5% of net sales. 

Definitions

Bottler case sales (BCS) volume: Sales of finished beverages, in equivalent 288
fluid ounce cases, sold by the company and its bottling partners to retailers
and independent distributors and excludes contract manufacturing volume. Volume
for products sold by the company and its bottling partners is reported on a
monthly basis, with the fourth quarter comprising October, November and
December. 

Sales volume: Sales of concentrates and finished beverages, in equivalent 288
fluid ounce cases, shipped by the company to its bottlers, retailers and
independent distributors and includes contract manufacturing volume. 

Pricing refers to the impact of list price changes. 

Unrealized mark-to-market: We recognize the change in the fair value of open
commodity derivative positions between periods in corporate unallocated
expenses, as these instruments do not qualify for hedge accounting treatment. As
the underlying commodity is delivered, the realized gains and losses are
subsequently reflected in the segment results. 

EPS represents diluted earnings per share. 

Core Earnings is defined as earnings adjusted for the unrealized mark-to-market
impact of commodity derivatives and certain items that are excluded for
comparison to prior year periods. 

Core EPS represents core earnings per share. 

Forward-looking statements

This release contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including, in particular, statements about
future events, future financial performance including earnings estimates, plans,
strategies, expectations, prospects, competitive environment, regulation, and
cost and availability of raw materials. Forward-looking statements include all
statements that are not historical facts and can be identified by the use of
forward-looking terminology such as the words "may," "will," "expect,"
"anticipate," "believe," "estimate," "plan," "intend" or the negative of these
terms or similar expressions. These forward-looking statements have been based
on our current views with respect to future events and financial performance.
Our actual financial performance could differ materially from those projected in
the forward-looking statements due to the inherent uncertainty of estimates,
forecasts and projections, and our financial performance may be better or worse
than anticipated. Given these uncertainties, you should not put undue reliance
on any forward-looking statements. All of the forward-looking statements are
qualified in their entirety by reference to the factors discussed under "Risk
Factors" in Part I, Item 1A of our Annual Report on Form 10-K for the year ended
December 31, 2011, and our other filings with the Securities and Exchange
Commission. Forward-looking statements represent our estimates and assumptions
only as of the date that they were made. We do not undertake any duty to update
the forward-looking statements, and the estimates and assumptions associated
with them, after the date of this release, except to the extent required by
applicable securities laws. 

Conference Call

At 10 a.m. (CST) today, the company will host a conference call with investors
to discuss fourth quarter and full year results and the outlook for 2013. The
conference call and slide presentation will be accessible live through DPS`s
website at http://www.drpeppersnapple.com and will be archived for replay for a
period of 14 days. 

In discussing financial results and guidance, the company may refer to certain
non-GAAP measures. Reconciliations of any such non-GAAP measures to the most
directly comparable financial measures in accordance with GAAP can be found on
pages A-5 through A-10 accompanying this release and under "Financial Press
Releases" on the company's website at http://www.drpeppersnapple.com in the
"Investors" section. 

About Dr Pepper Snapple Group

Dr Pepper Snapple Group (NYSE: DPS) is a leading producer of flavored beverages
in North America and the Caribbean. Our success is fueled by more than 50 brands
that are synonymous with refreshment, fun and flavor. We have 6 of the top 10
non-cola soft drinks, and 13 of our 14 leading brands are No. 1 or No. 2 in
their flavor categories. In addition to our flagship Dr Pepper and Snapple
brands, our portfolio includes 7UP, A&W, Canada Dry, Clamato, Crush, Hawaiian
Punch, Mott's, Mr & Mrs T mixers, PeƱafiel, Rose's, Schweppes, Squirt and
Sunkist soda. To learn more about our iconic brands and Plano, Texas-based
company, please visit www.DrPepperSnapple.com. For our latest news and updates,
follow us at www.Facebook.com/DrPepperSnapple or
www.Twitter.com/DrPepperSnapple.

                                                                                                                                                                                                 
 DR PEPPER SNAPPLE GROUP, INC.                                                                                                                                                                   
 CONSOLIDATED STATEMENTS OF INCOME                                                                                                                                                               
 For the Three and Twelve Months Ended December 31, 2012 and 2011                                                                                                                                
 (Unaudited, in millions except per share data)                                                                                                                                                  
                                                                                                                                                                                                 
                                                                                                   For the                                           For the                                     
                                                                                                   Three Months Ended                                Twelve Months Ended                         
                                                                                                   December 31,                                      December 31,                                
                                                                                                   2012                       2011                   2012                       2011             
 Net sales                                                                                         $    1,484                 $    1,461             $    5,995                 $    5,903       
 Cost of sales                                                                                          605                        604                    2,500                      2,485       
 Gross profit                                                                                           879                        857                    3,495                      3,418       
 Selling, general and administrative expenses                                                           555                        553                    2,268                      2,257       
 Depreciation and amortization                                                                          29                         31                     124                        126         
 Other operating expense, net                                                                           3                          2                      11                         11          
 Income from operations                                                                                 292                        271                    1,092                      1,024       
 Interest expense                                                                                       31                         29                     125                        114         
 Interest income                                                                                        (1     )                   (1     )               (2     )                   (3     )    
 Other income, net                                                                                      (1     )                   (3     )               (9     )                   (12    )    
 Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries         263                        246                    978                        925         
 Provision for income taxes                                                                             93                         80                     349                        320         
 Income before equity in earnings of unconsolidated subsidiaries                                        170                        166                    629                        605         
 Equity in earnings of unconsolidated subsidiaries, net of tax                                          -                          -                      -                          1           
 Net income                                                                                        $    170                   $    166               $    629                   $    606         
 Earnings per common share:                                                                                                                                                                      
 Basic                                                                                             $    0.82                  $    0.78              $    2.99                  $    2.77        
 Diluted                                                                                                0.81                       0.77                   2.96                       2.74        
 Weighted average common shares outstanding:                                                                                                                                                     
 Basic                                                                                                  207.6                      216.0                  210.6                      218.7       
 Diluted                                                                                                209.4                      218.2                  212.3                      221.2       
 Cash dividends declared per common share                                                          $    0.34                  $    0.32              $    1.36                  $    1.21        
                                                                                                                                                                                                 
 A-1                                                                                                                                                                                             
                                                                                                                                                                                                 


                                                                                                                                                                                                         
 DR PEPPER SNAPPLE GROUP, INC.                                                                                                                                                                           
 CONSOLIDATED BALANCE SHEETS                                                                                                                                                                             
 As of December 31, 2012 and 2011                                                                                                                                                                        
 (Unaudited, in millions except share and per share data)                                                                                                                                                
                                                                                                                                                                                                         
                                                                                                                                                           December 31,             December 31,         
                                                                                                                                                           2012                     2011                 
 Assets                                                                                                                                                                                                  
 Current assets:                                                                                                                                                                                         
 Cash and cash equivalents                                                                                                                                 $      366               $      701           
 Accounts receivable:                                                                                                                                                                                    
 Trade, net                                                                                                                                                       552                      585           
 Other                                                                                                                                                            50                       50            
 Inventories                                                                                                                                                      197                      212           
 Deferred tax assets                                                                                                                                              66                       96            
 Prepaid expenses and other current assets                                                                                                                        104                      113           
 Total current assets                                                                                                                                             1,335                    1,757         
 Property, plant and equipment, net                                                                                                                               1,202                    1,152         
 Investments in unconsolidated subsidiaries                                                                                                                       14                       13            
 Goodwill                                                                                                                                                         2,983                    2,980         
 Other intangible assets, net                                                                                                                                     2,684                    2,677         
 Other non-current assets                                                                                                                                         580                      573           
 Non-current deferred tax assets                                                                                                                                  130                      131           
 Total assets                                                                                                                                              $      8,928             $      9,283         
 Liabilities and Stockholders' Equity                                                                                                                                                                    
 Current liabilities:                                                                                                                                                                                    
 Accounts payable                                                                                                                                          $      283               $      265           
 Deferred revenue                                                                                                                                                 65                       65            
 Current portion of long-term obligations                                                                                                                         250                      452           
 Income taxes payable                                                                                                                                             45                       530           
 Other current liabilities                                                                                                                                        589                      603           
 Total current liabilities                                                                                                                                        1,232                    1,915         
 Long-term obligations                                                                                                                                            2,554                    2,256         
 Non-current deferred tax liabilities                                                                                                                             630                      586           
 Non-current deferred revenue                                                                                                                                     1,386                    1,449         
 Other non-current liabilities                                                                                                                                    846                      814           
 Total liabilities                                                                                                                                                6,648                    7,020         
 Commitments and contingencies                                                                                                                                                                           
 Stockholders' equity:                                                                                                                                                                                   
 Preferred stock, $.01 par value, 15,000,000 shares authorized, no shares issued                                                                                  -                        -             
 Common stock, $.01 par value, 800,000,000 shares authorized, 205,292,657 and 212,130,239 shares issued and outstanding for 2012 and 2011, respectively           2                        2             
 Additional paid-in capital                                                                                                                                       1,308                    1,631         
 Retained earnings                                                                                                                                                1,080                    740           
 Accumulated other comprehensive loss                                                                                                                             (110   )                 (110   )      
 Total stockholders' equity                                                                                                                                       2,280                    2,263         
 Total liabilities and stockholders' equity                                                                                                                $      8,928             $      9,283         
                                                                                                                                                                                                         
 A-2                                                                                                                                                                                                     
                                                                                                                                                                                                         


                                                                                                                                    
 DR PEPPER SNAPPLE GROUP, INC.                                                                                                      
 CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                              
 For the Twelve Months Ended December 31, 2012 and 2011                                                                             
 (Unaudited, in millions)                                                                                                           
                                                                                                                                    
                                                                                         For the                                    
                                                                                         Twelve Months Ended                        
                                                                                         December 31,                               
                                                                                         2012                      2011             
 Operating activities:                                                                                                              
 Net income                                                                              $    629                  $    606         
 Adjustments to reconcile net income to net cash provided by operating activities:                                                  
 Depreciation expense                                                                         203                       198         
 Amortization expense                                                                         37                        34          
 Amortization of deferred revenue                                                             (65   )                   (65    )    
 Employee stock-based compensation expense                                                    35                        34          
 Deferred income taxes                                                                        91                        (498   )    
 Other, net                                                                                   (18   )                   24          
 Changes in assets and liabilities:                                                                                                 
 Trade accounts receivable                                                                    36                        (55    )    
 Other accounts receivable                                                                    1                         (18    )    
 Inventories                                                                                  17                        29          
 Other current and non-current assets                                                         (21   )                   (21    )    
 Other current and non-current liabilities                                                    (29   )                   1           
 Trade accounts payable                                                                       10                        (30    )    
 Income taxes payable                                                                         (468  )                   521         
 Net cash provided by operating activities                                                    458                       760         
 Investing activities:                                                                                                              
 Purchase of property, plant and equipment                                                    (193  )                   (215   )    
 Purchase of intangible assets                                                                (7    )                   (3     )    
 Investments in unconsolidated subsidiaries                                                   -                         (2     )    
 Proceeds from disposals of property, plant and equipment                                     7                         3           
 Net cash used in investing activities                                                        (193  )                   (217   )    
 Financing activities:                                                                                                              
 Proceeds from senior unsecured notes and senior unsecured credit facility                    500                       1,000       
 Repayment of senior unsecured notes and senior unsecured credit facility                     (450  )                   (400   )    
 Repurchase of shares of common stock                                                         (400  )                   (522   )    
 Dividends paid                                                                               (284  )                   (251   )    
 Proceeds from stock options exercised                                                        22                        20          
 Excess tax benefit on stock-based compensation                                               16                        10          
 Deferred financing charges paid                                                              (4    )                   (6     )    
 Other, net                                                                                   (3    )                   (3     )    
 Net cash used in financing activities                                                        (603  )                   (152   )    
 Cash and cash equivalents - net change from:                                                                                       
 Operating, investing and financing activities                                                (338  )                   391         
 Effect of exchange rate changes on cash and cash equivalents                                 3                         (5     )    
 Cash and cash equivalents at beginning of year                                               701                       315         
 Cash and cash equivalents at end of year                                                $    366                  $    701         
 Supplemental cash flow disclosures of non-cash investing and financing activities:                                                 
 Capital expenditures included in other current liabilities                              $    73                   $    53          
 Dividends declared but not yet paid                                                          70                        68          
 Capital lease additions                                                                      49                        -           
 Supplemental cash flow disclosures:                                                                                                
 Interest paid                                                                           $    115                  $    104         
 Income taxes paid                                                                            724                       278         
                                                                                                                                    
 A-3                                                                                                                                
                                                                                                                                    


                                                                                                                                                                                                               
 DR PEPPER SNAPPLE GROUP, INC.                                                                                                                                                                                 
 OPERATIONS BY OPERATING SEGMENT                                                                                                                                                                               
 For the Three and Twelve Months Ended December 31, 2012 and 2011                                                                                                                                              
 (Unaudited, in millions)                                                                                                                                                                                      
                                                                                                                                                                                                               
                                                                                                     For the Three Months Ended                              For the Twelve Months Ended                       
                                                                                                     December 31,                                            December 31,                                      
                                                                                                     2012                           2011                     2012                           2011               
 Segment Results - Net sales                                                                                                                                                                                   
 Beverage Concentrates                                                                               $     333                      $     325                $     1,221                    $     1,193        
 Packaged Beverages                                                                                        1,044                          1,040                    4,358                          4,292        
 Latin America Beverages                                                                                   107                            96                       416                            418          
 Net sales                                                                                           $     1,484                    $     1,461              $     5,995                    $     5,903        
                                                                                                                                                                                                               
                                                                                                                                                                                                               
                                                                                                     For the Three Months Ended                              For the Twelve Months Ended                       
                                                                                                     December 31,                                            December 31,                                      
                                                                                                     2012                           2011                     2012                           2011               
 Segment Results - SOP                                                                                                                                                                                         
 Beverage Concentrates                                                                               $     223                      $     212                $     774                      $     779          
 Packaged Beverages                                                                                        131                            128                      539                            519          
 Latin America Beverages                                                                                   14                             9                        51                             43           
 Total SOP                                                                                                 368                            349                      1,364                          1,341        
 Unallocated corporate costs                                                                               73                             76                       261                            306          
 Other operating expense, net                                                                              3                              2                        11                             11           
 Income from operations                                                                                    292                            271                      1,092                          1,024        
 Interest expense, net                                                                                     30                             28                       123                            111          
 Other income, net                                                                                         (1     )                       (3     )                 (9     )                       (12    )     
 Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries      $     263                      $     246                $     978                      $     925          
                                                                                                                                                                                                               
 A-4                                                                                                                                                                                                           
                                                                                                                                                                                                               


DR PEPPER SNAPPLE GROUP, INC.
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION
(Unaudited)

The company reports its financial results in accordance with U.S. GAAP. However,
management believes that certain non-GAAP measures, that reflect the way
management evaluates the business, may provide investors with additional
information regarding the company's results, trends and ongoing performance on a
comparable basis. Specifically, investors should consider the following with
respect to our quarterly results: 

Net sales and Segment Operating Profit, as adjusted: Net sales and Segment
Operating Profit are on a currency neutral basis. 

Free Cash Flow: Free cash flow is defined as net cash provided by operating
activities adjusted for capital spending and certain items excluded for
comparison to prior year periods. The certain item excluded for the twelve
months ended December 31, 2012 and 2011, relates to the tax payments resulting
from the licensing agreements with PepsiCo and Coca-Cola. 

Core Earnings: Core Earnings is defined as Reported Earnings adjusted for the
unrealized mark-to-market impact of commodity derivatives and certain items that
are excluded for comparison to prior year periods. The certain items excluded
for the twelve months ended December 31, 2012, are (i) a separation-related
foreign deferred tax benefit and (ii) a depreciation adjustment associated with
the reassessment of a capital lease executed prior to the separation from
Cadbury. The certain item excluded for the twelve months ended December 31,
2011, is a legal provision related to a previously disclosed legal matter. 

The tables on the following pages provide these reconciliations. 

A-5

                                                                                                                                 
 RECONCILIATION OF NET SALES AND SOP                                                                                             
 AS REPORTED TO AS ADJUSTED                                                                                                      
 (Unaudited)                                                                                                                     
                                                                                                                                 
                                            For the Three Months Ended December 31, 2012                                         
                                            Beverage                    Packaged                 Latin                           
                                                                                                 America                         
 Percent change                             Concentrates                Beverages                Beverages                Total  
 Reported net sales                         2%                          -                        11%                      2%     
 Impact of foreign currency                 -                           -                        (4)%                     (1)%   
 Net sales, as adjusted                     2%                          -                        7%                       1%     
                                                                                                                                 
                                                                                                                                 
                                            For the Three Months Ended December 31, 2012                                         
                                            Beverage                    Packaged                 Latin                           
                                                                                                 America                         
 Percent change                             Concentrates                Beverages                Beverages                Total  
 Reported segment operating profit          5%                          2%                       56%                      5%     
 Impact of foreign currency                 -                           1%                       -                        -      
 Segment operating profit, as adjusted      5%                          3%                       56%                      5%     
                                                                                                                                 
                                                                                                                                 
                                            For the Twelve Months Ended December 31, 2012                                        
                                            Beverage                    Packaged                 Latin                           
                                                                                                 America                         
 Percent change                             Concentrates                Beverages                Beverages                Total  
 Reported net sales                         2%                          2%                       -                        2%     
 Impact of foreign currency                 -                           -                        5%                       -      
 Net sales, as adjusted                     2%                          2%                       5%                       2%     
                                                                                                                                 
                                                                                                                                 
                                            For the Twelve Months Ended December 31, 2012                                        
                                            Beverage                    Packaged                 Latin                           
                                                                                                 America                         
 Percent change                             Concentrates                Beverages                Beverages                Total  
 Reported segment operating profit          (1)%                        4%                       19%                      2%     
 Impact of foreign currency                 -                           -                        31%                      1%     
 Segment operating profit, as adjusted      (1)%                        4%                       50%                      3%     
                                                                                                                                 


                                                                                                                                                      
 RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW                                                                        
 (Unaudited, in millions)                                                                                                                             
                                                                                                                                                      
                                                                                        For the                                                       
                                                                                        Twelve Months Ended                                           
                                                                                        December 31,                                                  
                                                                                        2012                      2011                Change          
 Net Cash Provided by Operating Activities                                              $    458                  $    760            $    (302  )    
 Purchase of property, plant and equipment                                                   (193  )                   (215  )                        
 Tax payments resulting from the licensing arrangements with PepsiCo and Coca-Cola           531                       54                             
 Free Cash Flow                                                                         $    796                  $    599            $    197        
                                                                                                                                                      
 A-6                                                                                                                                                  
                                                                                                                                                      


                                                                                                                                                                                      
 RECONCILIATION OF NET INCOME TO CORE EARNINGS                                                                                                                                        
 (Unaudited, in millions except per share data)                                                                                                                                       
                                                                                                                                                                                      
                                                                                                   For the Three Months Ended December 31, 2012                                       
                                                                                                   Reported                       Mark to Market                   Core               
 Net sales                                                                                         $     1,484                    $      -                         $     1,484        
 Cost of sales                                                                                           605                             -                               605          
 Gross profit                                                                                            879                             -                               879          
 Selling, general and administrative expenses                                                            555                             (1     )                        554          
 Depreciation and amortization                                                                           29                              -                               29           
 Other operating expense, net                                                                            3                               -                               3            
 Income from operations                                                                                  292                             1                               293          
 Interest expense                                                                                        31                              -                               31           
 Interest income                                                                                         (1     )                        -                               (1     )     
 Other income, net                                                                                       (1     )                        -                               (1     )     
 Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries          263                             1                               264          
 Provision for income taxes                                                                              93                              -                               93           
 Income before equity in earnings of unconsolidated subsidiaries                                         170                             1                               171          
 Equity in earnings of unconsolidated subsidiaries, net of tax                                           -                               -                               -            
 Net income                                                                                        $     170                      $      1                         $     171          
 Earnings per common share:                                                                                                                                                           
 Diluted                                                                                           $     0.81                     $      0.01                      $     0.82         
                                                                                                                                                                                      
 A-7                                                                                                                                                                                  
                                                                                                                                                                                      


                                                                                                                                                                                                                
 RECONCILIATION OF NET INCOME TO CORE EARNINGS - (Continued)                                                                                                                                                    
 (Unaudited, in millions except per share data)                                                                                                                                                                 
                                                                                                                                                                                                                
                                                                                                   For the Three Months Ended December 31, 2011                                                                 
                                                                                                   Reported                   Mark to Market                 Legal Provision                   Core             
 Net sales                                                                                         $    1,461                 $      -                       $       -                         $    1,461       
 Cost of sales                                                                                          604                          (8     )                        -                              596         
 Gross profit                                                                                           857                          8                               -                              865         
 Selling, general and administrative expenses                                                           553                          1                               (18     )                      536         
 Depreciation and amortization                                                                          31                           -                               -                              31          
 Other operating expense, net                                                                           2                            -                               -                              2           
 Income from operations                                                                                 271                          7                               18                             296         
 Interest expense                                                                                       29                           -                               -                              29          
 Interest income                                                                                        (1     )                     -                               -                              (1     )    
 Other income, net                                                                                      (3     )                     -                               -                              (3     )    
 Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries         246                          7                               18                             271         
 Provision for income taxes                                                                             80                           3                               7                              90          
 Income before equity in earnings of unconsolidated subsidiaries                                        166                          4                               11                             181         
 Equity in earnings of unconsolidated subsidiaries, net of tax                                          -                            -                               -                              -           
 Net income                                                                                        $    166                   $      4                       $       11                        $    181         
 Earnings per common share:                                                                                                                                                                                     
 Diluted                                                                                           $    0.77                  $      0.02                    $       0.05                      $    0.84        
                                                                                                                                                                                                                
 A-8                                                                                                                                                                                                            
                                                                                                                                                                                                                


                                                                                                                                                                                                                                                                                 
 RECONCILIATION OF NET INCOME TO CORE EARNINGS - (Continued)                                                                                                                                                                                                                     
 (Unaudited, in millions except per share data)                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                 
                                                                                                   For the Twelve Months Ended December 31, 2012                                                                                                                                 
                                                                                                   Reported                 Mark to Market               Depreciation Adjustment               Foreign Deferred Tax               Total Adjustments               Core           
 Net sales                                                                                         $    5,995               $      -                     $         -                           $        -                         $       -                       $   5,995      
 Cost of sales                                                                                          2,500                      15                              (2        )                          -                                 13                          2,513      
 Gross profit                                                                                           3,495                      (15    )                        2                                    -                                 (13     )                   3,482      
 Selling, general and administrative expenses                                                           2,268                      2                               -                                    -                                 2                           2,270      
 Depreciation and amortization                                                                          124                        -                               (6        )                          -                                 (6      )                   118        
 Other operating expense, net                                                                           11                         -                               -                                    -                                 -                           11         
 Income from operations                                                                                 1,092                      (17    )                        8                                    -                                 (9      )                   1,083      
 Interest expense                                                                                       125                        -                               -                                    -                                 -                           125        
 Interest income                                                                                        (2     )                   -                               -                                    -                                 -                           (2     )   
 Other income, net                                                                                      (9     )                   -                               -                                    -                                 -                           (9     )   
 Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries         978                        (17    )                        8                                    -                                 (9      )                   969        
 Provision for income taxes                                                                             349                        (6     )                        3                                    4                                 1                           350        
 Income before equity in earnings of unconsolidated subsidiaries                                        629                        (11    )                        5                                    (4       )                        (10     )                   619        
 Equity in earnings of unconsolidated subsidiaries, net of tax                                          -                          -                               -                                    -                                 -                           -          
 Net income                                                                                        $    629                 $      (11    )              $         5                           $        (4       )                $       (10     )               $   619        
 Earnings per common share:                                                                                                                                                                                                                                                      
 Diluted                                                                                           $    2.96                $      (0.04  )              $         0.02                        $        (0.02    )                $       (0.04   )               $   2.92       
                                                                                                                                                                                                                                                                                 
 A-9                                                                                                                                                                                                                                                                             
                                                                                                                                                                                                                                                                                 


                                                                                                                                                                                                                
 RECONCILIATION OF NET INCOME TO CORE EARNINGS - (Continued)                                                                                                                                                    
 (Unaudited, in millions except per share data)                                                                                                                                                                 
                                                                                                                                                                                                                
                                                                                                   For the Twelve Months Ended December 31, 2011                                                                
                                                                                                   Reported                   Mark to Market                 Legal Provision                   Core             
 Net sales                                                                                         $    5,903                 $      -                       $       -                         $    5,903       
 Cost of sales                                                                                          2,485                        (22    )                        -                              2,463       
 Gross profit                                                                                           3,418                        22                              -                              3,440       
 Selling, general and administrative expenses                                                           2,257                        (1     )                        (18     )                      2,238       
 Depreciation and amortization                                                                          126                          -                               -                              126         
 Other operating expense, net                                                                           11                           -                               -                              11          
 Income from operations                                                                                 1,024                        23                              18                             1,065       
 Interest expense                                                                                       114                          -                               -                              114         
 Interest income                                                                                        (3     )                     -                               -                              (3     )    
 Other income, net                                                                                      (12    )                     -                               -                              (12    )    
 Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries         925                          23                              18                             966         
 Provision for income taxes                                                                             320                          9                               7                              336         
 Income before equity in earnings of unconsolidated subsidiaries                                        605                          14                              11                             630         
 Equity in earnings of unconsolidated subsidiaries, net of tax                                          1                            -                               -                              1           
 Net income                                                                                        $    606                   $      14                      $       11                        $    631         
 Earnings per common share:                                                                                                                                                                                     
 Diluted                                                                                           $    2.74                  $      0.06                    $       0.05                      $    2.85        
                                                                                                                                                                                                                
 A-10                                                                                                                                                                                                           


Dr Pepper Snapple Group, Inc.
Media Relations:
Tina Barry, 972-673-7931
or
Greg Artkop, 972-673-8470
or
Investor Relations:
Carolyn Ross, 972-673-7935 

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