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ACQUISITIONS AND DIVESTITURES | 3 Months Ended
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Mar. 31, 2016
ACQUISITIONS AND DIVESTITURES |
ACQUISITIONS AND DIVESTITURES | 2.ACQUISITIONS AND DIVESTITURES On June 12, 2015, the Company completed the transactions contemplated by the definitive agreements entered into with The Coca-Cola Company (“TCCC”) on August 14, 2014, which provided for a long-term strategic relationship in the global energy drink category (the “TCCC Transaction”). In consequencet of the TCCC Transaction, (1) the Company issued to TCCC 34,040,534 newly issued Company common shares representing approximately 16.7% of the total number of outstanding Company common shares (after giving effect to such issuance) and TCCC appointed two individuals to the Company’s Board of Directors, (2) TCCC transferred all of its rights in and to TCCC’s worldwide energy drink business (“KO Energy”) to the Company, (3) the Company transferred all of its rights in and to its non-energy drink business to TCCC, (4) the Company and TCCC amended the distribution coordination agreements previously existing between them to govern the transition of third parties’ rights to distribute the Company’s energy products in most territories in the U.S. to members of TCCC’s distribution network, which consists of owned or controlled bottlers/distributors and independent bottling/distribution partners, and (5) TCCC and one of its subsidiaries made an aggregate net cash payment to the Company of $2.15 billion, $125.0 million of which is currently held in escrow subject to release upon the achievement of milestones relating to the transition of distribution rights to TCCC’s distribution network. The following unaudited pro forma condensed combined financial information is presented as if the TCCC Transaction had closed on January 1, 2015:
|  | Three-Months Ended March 31, 2015 |
|  |  |  |  |  | Pro Forma Adjustments |  |  |
|  | Monster Beverage Corporation as reported |  | KO Energy |  | Disposal of Monster Non- Energy |  | Other |  | Pro Forma Combined |
Net sales |  | $ | 626,791 |  | $ | 80,705 |  | $ | (31,308) |  | $ | 4,923 |  | $ | 681,111 |
Net income |  | 4,414 |  | 59,439 | 1 | (1,229) |  | (23,159) |  | 39,465 |
1 The $59.4 million of net income for KO Energy for the three-months ended March 31, 2015 is presented before tax. The associated estimated provision for income taxes is included in the “Other” category. Pro-Forma Adjustments – Other include the following:
|  | Three-Months Ended March 31, 2015 |
Net sales: |  |  |
Amortization of deferred revenue |  | $ | 4,923 |
Net income: |  |  |
Amortization of deferred revenue |  | $ | 4,923 |
To record sales commissions |  | (9,043) |
To record amortization of definite lived KO Energy intangibles |  | (1,726) |
To eliminate TCCC Transaction expenses |  | 3,597 |
Estimated provision for income taxes on pro forma adjustments |  | 1,974 |
Estimated provision for income taxes on KO Energy income |  | (22,884) |
Total |  | $ | (23,159) |
For purposes of the unaudited pro forma financial information, a combined U.S. Federal and state statutory tax rate of 38.5% has been used. This rate does not reflect the Company’s expected effective tax rate, which includes other tax charges and benefits, and does not take into account any historical or possible future tax events that may impact the combined company. The unaudited pro forma financial information is presented for information purposes only and is not intended to represent or be indicative of the combined results of operations that the Company would have reported had the TCCC Transaction been completed as of the date and for the periods presented, and should not be taken as representative of the Company’s consolidated results of operations following the completion of the TCCC Transaction. In addition, the unaudited pro forma financial information is not intended to project the future financial results of operations of the combined company. The unaudited pro forma combined financial information does not reflect any cost savings, operational synergies or revenue enhancements that the combined company may achieve as a result of the TCCC Transaction or the costs to combine the operations or costs necessary to achieve cost savings, operating synergies and revenue enhancements.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References No definition available. + Details
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