XML 49 R24.htm IDEA: XBRL DOCUMENT v3.3.0.814
SEGMENT INFORMATION
 9 Months Ended
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.