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SEGMENT INFORMATION
 3 Months Ended
Mar. 31, 2022
SEGMENT INFORMATION  
SEGMENT INFORMATION

18.          SEGMENT INFORMATION

The Company has four operating and reportable segments: (i) Monster Energy® Drinks segment, which is primarily comprised of the Company’s Monster Energy® drinks, Reign Total Body Fuel® high performance energy drinks and True North® Pure Energy Seltzers, (ii) Strategic Brands segment, which is primarily comprised of the various energy drink brands acquired from TCCC in 2015 as well as the Company’s affordable energy brands, (iii) Alcohol Brands segment, which is primarily comprised of the various craft beers and hard seltzers purchased as part of the CANarchy Transaction on February 17, 2022 and (iv) Other segment, which is comprised of the AFF Third-Party Products.

The Company’s Monster Energy® Drinks segment primarily generates net operating revenues by selling ready-to-drink packaged drinks primarily to bottlers/distributors. In some cases, the Company sells ready-to-drink packaged drinks directly to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, drug stores, foodservice customers, value stores, e-commerce retailers and the military.

The Company’s Strategic Brands segment primarily 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, water and other ingredients to produce ready-to-drink packaged energy drinks. The ready-to-drink packaged energy drinks are then sold by such bottlers to other bottlers/distributors and to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers, drug stores, value stores, e-commerce retailers and the military. To a lesser extent, the Strategic Brands segment generates net operating revenues by selling certain ready-to-drink packaged energy drinks to bottlers/distributors.

Generally, the Monster Energy® Drinks segment generates higher per case net operating revenues, but lower per case gross profit margin percentages than the Strategic Brands segment.

The Company’s Alcohol Brands segment primarily generates operating revenues by selling kegged and canned beer as well as hard seltzers primarily to distributors in the United States.

Generally, the Alcohol Brands segment will have lower gross profit margin percentages than the Monster Energy® Drinks 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 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-months ended March 31, 2022 and 2021 are as follows:

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Three-Months Ended

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March 31, 

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2022

    

2021

Net sales:

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Monster Energy® Drinks1

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$

1,404,847

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$

1,170,280

Strategic Brands

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92,593

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67,809

Alcohol Brands2

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​

15,207

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​

—

Other

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5,927

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5,727

Corporate and unallocated

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—

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—

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$

1,518,574

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$

1,243,816

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Three-Months Ended

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March 31, 

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2022

    

2021

Operating Income:

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Monster Energy® Drinks¹

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$

454,563

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$

464,819

Strategic Brands

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57,195

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45,140

Alcohol Brands2

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(4,953)

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—

Other

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1,127

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1,793

Corporate and unallocated

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(108,443)

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(97,606)

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$

399,489

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$

414,146

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Three-Months Ended

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March 31, 

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2022

    

2021

Income before tax:

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Monster Energy® Drinks¹

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$

455,134

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$

464,968

Strategic Brands

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57,254

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45,140

Alcohol Brands2

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(5,606)

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—

Other

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1,137

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1,793

Corporate and unallocated

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(115,730)

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(98,514)

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$

392,189

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$

413,387

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(1)Includes $10.0 million and $10.4 million for the three-months ended March 31, 2022 and 2021, respectively, related to the recognition of deferred revenue.
(2)Effectively from February 17, 2022 to March 31, 2022.

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Three-Months Ended

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March 31, 

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2022

    

2021

Depreciation and amortization:

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Monster Energy® Drinks

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$

8,159

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$

9,022

Strategic Brands

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233

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264

Alcohol Brands

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2,283

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—

Other

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1,110

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1,126

Corporate and unallocated

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2,814

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2,413

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$

14,599

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$

12,825

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Corporate and unallocated expenses for the three-months ended March 31, 2022 include $68.1 million of payroll costs, of which $16.2 million was attributable to stock-based compensation expenses (see Note 15 “Stock-Based Compensation”), as well as $26.4 million attributable to professional service expenses, including accounting and legal costs, and $13.9 million of other operating expenses.

Corporate and unallocated expenses for the three-months ended March 31, 2021 include $65.1 million of payroll costs, of which $18.3 million was attributable to stock-based compensation expenses (see Note 15 “Stock-Based Compensation”), as well as $20.4 million attributable to professional service expenses, including accounting and legal costs, and $12.1 million of other operating expenses.

Coca-Cola Europacific Partners (formerly Coca-Cola European Partners) accounted for approximately 12% and 11% of the Company’s net sales for the three-months ended March 31, 2022 and 2021, respectively.

Coca-Cola Consolidated, Inc. accounted for approximately 9% and 12% of the Company’s net sales for the three-months ended March 31, 2022 and 2021, respectively.

Reyes Coca-Cola Bottling, LLC accounted for approximately 10% and 9% of the Company’s net sales for the three-months ended March 31, 2022 and 2021, respectively.

Net sales to customers outside the United States amounted to $553.4 million and $459.4 million for the three-months ended March 31, 2022 and 2021, respectively. Such sales were approximately 36% and 37% of net sales for three-months ended March 31, 2022 and 2021, respectively.

Goodwill and other intangible assets for the Company’s reportable segments as of March 31, 2022 and December 31, 2021 are as follows:

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March 31, 

 

December 31, 

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2022

    

2021

Goodwill and other intangible assets:

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Monster Energy® Drinks

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$

1,425,023

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$

1,420,503

Strategic Brands

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979,268

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978,032

Alcohol Brands

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​

235,353

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​

—

Other

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4,397

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5,494

Corporate and unallocated

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—

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—

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$

2,644,041

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$

2,404,029

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