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SEGMENT INFORMATION | 9 Months Ended
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Sep. 30, 2015
SEGMENT INFORMATION |
SEGMENT INFORMATION | 17.SEGMENT INFORMATION In the second quarter of 2015, as a result of the acquisitions and divestitures in connection with the TCCC Transaction, the Company revised its reportable segments to reflect managements’ current view of the business and to align its external financial reporting with its new operating and internal financial reporting model. Historical segment information has been revised to reflect the effect of this change. The Company has three operating and reportable segments, (i) Finished Products, which is comprised of the Company’s Monster Energy® drink products (previously comprising the majority of the former Direct Store Delivery segment) (“Finished Products”), (ii) Concentrate, the principal products of which include the various energy drink brands acquired from TCCC as a result of the TCCC Transaction (“Concentrate”) and (iii) Other, the principal products of which include the brands disposed of as a result of the TCCC Transaction (previously comprising the majority of the former Warehouse segment and the Peace Tea® brand). The Company’s Finished Product segment generates net operating revenues by selling finished energy drinks to full service beverage distributors, retail grocery and specialty chains, wholesalers, club stores, drug chains, mass merchandisers, convenience chains, health food distributors, food service customers and the military. The Company’s Concentrate segment generates net operating revenues by selling “concentrates” and/or “beverage bases” to authorized bottling and canning operations. Such bottlers generally combine the concentrates and/or beverage bases with sweeteners and water to produce finished beverages. The finished energy drinks are packaged in authorized containers bearing the Company’s respective trademarks, such as cans and bottles, and are then sold to retailers directly or, in some cases, through wholesalers or other bottlers. Generally, the Finished Products segment generates higher net operating revenues but lower gross profit margins than the Concentrate segment. Corporate and unallocated amounts that do not relate to a reportable segment have been allocated to “Corporate & Unallocated.” No asset information, other than goodwill and other intangible assets, has been provided for in the Company’s reportable segments as management does not measure or allocate such assets on a segment basis. The net revenues derived from the Company’s reportable segments and other financial information related thereto for the three- and nine-months ended September 30, 2015 and 2014 are as follows:
|  | Three-Months Ended |  | Nine-Months Ended |
|  | September 30, |  | September 30, |
|  | 2015 |  | 2014 |  | 2015 |  | 2014 |
Net sales: |  |  |  |  |  |  |  |  |
Finished Products(1) |  | $ | 686,684 |  | $ | 594,348 |  | $ | 1,933,467 |  | $ | 1,739,693 |
Concentrate |  | 69,935 |  | - |  | 82,913 |  | - |
Other |  | - |  | 41,624 |  | 60,751 |  | 119,608 |
Corporate and unallocated |  | - |  | - |  | - |  | - |
|  | $ | 756,619 |  | $ | 635,972 |  | $ | 2,077,131 |  | $ | 1,859,301 |
|  | Three-Months Ended |  | Nine-Months Ended |
|  | September 30, |  | September 30, |
|  | 2015 |  | 2014 |  | 2015 |  | 2014 |
Operating Income: |  |  |  |  |  |  |  |  |
Finished Products(1) (2) |  | $ | 289,544 |  | $ | 231,032 |  | $ | 596,716 |  | $ | 670,349 |
Concentrate |  | 45,291 |  | - |  | 54,375 |  | - |
Other(3) |  | (283) |  | 2,238 |  | 165,377 |  | 7,152 |
Corporate and unallocated |  | (43,114) |  | (43,363) |  | (151,263) |  | (122,917) |
|  | $ | 291,438 |  | $ | 189,907 |  | $ | 665,205 |  | $ | 554,584 |
|  | Three-Months Ended |  | Nine-Months Ended |
|  | September 30, |  | September 30, |
|  | 2015 |  | 2014 |  | 2015 |  | 2014 |
Income before tax: |  |  |  |  |  |  |  |  |
Finished Products(1) (2) |  | $ | 289,649 |  | $ | 231,263 |  | $ | 597,084 |  | $ | 670,878 |
Concentrate |  | 45,275 |  | - |  | 54,359 |  | - |
Other(3) |  | (284) |  | 2,237 |  | 165,376 |  | 7,151 |
Corporate and unallocated |  | (46,564) |  | (44,631) |  | (154,758) |  | (124,152) |
|  | $ | 288,076 |  | $ | 188,869 |  | $ | 662,061 |  | $ | 553,877 |
| (1) |  | Includes $8.2 million and $3.8 million for the three-months ended September 30, 2015 and 2014, respectively, related to the recognition of deferred revenue. Includes $54.7 million and $11.2 million for the nine-months ended September 30, 2015 and 2014, respectively, related to the recognition of deferred revenue.
| (2) |  | Includes $2.5 million and ($0.7) million for the three-months ended September 30, 2015 and 2014, respectively, related to distributor termination costs. Includes $220.7 million and ($0.2) million for the nine-months ended September 30, 2015 and 2014, respectively, related to distributor termination costs.
| (3) |  | Includes $161.5 million gain on the sale of Monster Non-Energy for the nine-months ended September 30, 2015.
|  | Three-Months Ended |  | Nine-Months Ended |
|  | September 30, |  | September 30, |
|  | 2015 |  | 2014 |  | 2015 |  | 2014 |
Depreciation and amortization |  |  |  |  |  |  |  |  |
Finished Products |  | $ | 5,366 |  | $ | 4,576 |  | $ | 15,514 |  | $ | 14,446 |
Concentrate |  | 1,759 |  | - |  | 2,103 |  | - |
Other |  | - |  | 135 |  | 232 |  | 390 |
Corporate and unallocated |  | 1,382 |  | 1,419 |  | 3,908 |  | 4,288 |
|  | $ | 8,507 |  | $ | 6,130 |  | $ | 21,757 |  | $ | 19,124 |
|  | September 30, 2015 |  | December 31, 2014 |
Goodwill and other intangible assets: |  |  |  |  |
Finished Products |  | $ | 841,373 |  | $ | 50,748 |
Concentrate |  | 874,605 |  | - |
Other |  | - |  | 18,079 |
Corporate and unallocated |  | - |  | - |
|  | $ | 1,715,978 |  | $ | 68,827 |
Corporate and unallocated expenses for the three-months ended September 30, 2015 include $27.1 million of payroll costs, of which $8.9 million was attributable to stock-based compensation expense (see Note 14, “Stock-Based Compensation”), as well as $10.0 million attributable to professional service expenses, including accounting and legal costs, and $6.0 million of other operating expenses. Corporate and unallocated expenses for the three-months ended September 30, 2014 include $21.9 million of payroll costs, of which $7.4 million was attributable to stock-based compensation expense (see Note 14, “Stock-Based Compensation”), as well as $10.1 million attributable to professional service expenses, including accounting and legal costs, and $11.4 million attributable to other operating expenses. Corporate and unallocated expenses for the nine-months ended September 30, 2015 include $83.9 million of payroll costs, of which $23.7 million was attributable to stock-based compensation expense (see Note 14, “Stock-Based Compensation”), as well as $31.2 million attributable to professional service expenses, including accounting and legal costs, and $36.2 million attributable to other operating expenses. Corporate and unallocated expenses for the nine-months ended September 30, 2014 include $64.6 million of payroll costs, of which $22.5 million was attributable to stock-based compensation expense (see Note 14, “Stock-Based Compensation”), as well as $30.2 million attributable to professional service expenses, including accounting and legal costs, and $28.1 million attributable to other operating expenses. Coca-Cola Refreshments USA Inc. (“CCR”) accounted for approximately 41% and 28% of the Company’s net sales for the three-months ended September 30, 2015 and 2014, respectively. CCR accounted for approximately 41% and 29% of the Company’s net sales for the nine-months ended September 30, 2015 and 2014, respectively. Net sales to customers outside the United States amounted to $170.6 million and $136.3 million for the three-months ended September 30, 2015 and 2014, respectively. Net sales to customers outside the United States amounted to $435.1 million and $400.4 million for the nine-months ended September 30, 2015 and 2014, respectively.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 + Details
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