SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2013

SEGMENT INFORMATION

SEGMENT INFORMATION

15. SEGMENT INFORMATION

The Company has two reportable segments, namely Direct Store Delivery (“DSD”), whose principal products comprise energy drinks, and Warehouse (“Warehouse”), whose principal products comprise juice-based and soda beverages.  The DSD segment develops, markets and sells products primarily through an exclusive distributor network, whereas the Warehouse segment develops, markets and sells products primarily direct to retailers. Corporate and unallocated amounts that do not relate to DSD or Warehouse segments have been allocated to “Corporate & Unallocated.”

The net revenues derived from the DSD and Warehouse segments and other financial information related thereto are as follows:

	Three-Months Ended September 30, 2013
	DSD			Warehouse			Corporate and Unallocated			Total
Net sales	$	566,768		$	23,654		$		-	$	590,422
Contribution margin	194,915			(2,193)			-			192,722
Corporate and unallocated expenses	-			-			(41,293)			(41,293			)
Operating income										151,429
Other (expense) income	180			-			(886)			(706			)
Income before provision for income taxes										150,723
Depreciation and amortization	(5,069)			(67)			(960)			(6,096			)
Trademark amortization	-			(11)			(1)			(12			)
	Three-Months Ended September 30, 2012
	DSD			Warehouse			Corporate and Unallocated			Total
Net sales	$		516,268	$		25,672	$	-		$		541,940
Contribution margin	170,096			41			-			170,137
Corporate and unallocated expenses	-			-			(29,452)			(29,452			)
Operating income										140,685
Other (expense) income	147			-			406			553
Income before provision for income taxes										141,238
Depreciation and amortization	(3,884)			(38)			(1,233)			(5,155			)
Trademark amortization	-			(11)			(1)			(12			)

Revenue is derived from sales to external customers.  Operating expenses that pertain to each segment are allocated to the appropriate segment.

Corporate and unallocated expenses were $41.3 million for the three-months ended September 30, 2013 and included $19.8 million of payroll costs, of which $7.2 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $10.9 million attributable to professional service expenses, including accounting and legal costs, and $10.6 million of other operating expenses.  Corporate and unallocated expenses were $29.5 million for the three-months ended September 30, 2012 and included $19.8 million of payroll costs, of which $7.9 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $4.5 million attributable to professional service expenses, including accounting and legal costs, $1.2 million of depreciation and $4.0 million of other operating expenses.

Coca-Cola Refreshments USA Inc. (“CCR”), a customer of the DSD segment, accounted for approximately 29% and 28% of the Company’s net sales for the three-months ended September 30, 2013 and 2012, respectively.

Net sales to customers outside the United States amounted to $121.1 million and $114.5 million for the three-months ended September 30, 2013 and 2012, respectively.

The net revenues derived from the DSD and Warehouse segments and other financial information related thereto are as follows:

	Nine-Months Ended September 30, 2013
	DSD		Warehouse		Corporate and Unallocated		Total
Net sales	$	1,627,936	$	77,643	$	-	$	1,705,579
Contribution margin	548,906		(682)		-		548,224
Corporate and unallocated expenses	-		-		(110,064)		(110,064		)
Operating income							438,160
Other (expense) income	468		(1)		(6,476)		(6,009		)
Income before provision for income taxes							432,151
Depreciation and amortization	(14,091)		(168)		(2,149)		(16,408		)
Trademark amortization	-		(33)		(3)		(36		)
	Nine-Months Ended September 30, 2012
	DSD		Warehouse		Corporate and Unallocated		Total
Net sales	$	1,515,476	$	73,709	$	-	$	1,589,185
Contribution margin	515,010		3,817		-		518,827
Corporate and unallocated expenses	-		-		(82,085)		(82,085		)
Operating income							436,742
Other (expense) income	414		-		426		840
Income before provision for income taxes							437,582
Depreciation and amortization	(11,577)		(93)		(3,558)		(15,228		)
Trademark amortization	-		(33)		(3)		(36		)

Revenue is derived from sales to external customers.  Operating expenses that pertain to each segment are allocated to the appropriate segment.

Corporate and unallocated expenses were $110.1 million for the nine-months ended September 30, 2013 and included $60.6 million of payroll costs, of which $21.6 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $27.9 million attributable to professional service expenses, including accounting and legal costs, and $21.6 million of other operating expenses.  Corporate and unallocated expenses were $82.1 million for the nine-months ended September 30, 2012 and included $55.4 million of payroll costs, of which $21.6 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $11.6 million attributable to professional service expenses, including accounting and legal costs, $3.6 million of depreciation and $11.5 million of other operating expenses.

Coca-Cola Refreshments USA Inc. (“CCR”), a customer of the DSD segment, accounted for approximately 29% of the Company’s net sales for both the nine-months ended September 30, 2013 and 2012, respectively.

Net sales to customers outside the United States amounted to $354.9 million and $318.0 million for the nine-months ended September 30, 2013 and 2012, respectively.

The Company’s net sales by product line were as follows:

	Three-Months Ended				Nine-Months Ended
	September 30,				September 30,
Product Line	2013		2012		2013		2012
Energy drinks	$	548,109	$	498,563	$	1,577,034	$	1,468,036
Non-carbonated (primarily juice based beverages and Peace Tea® iced teas)	30,622		32,453		94,760		86,737
Carbonated (primarily soda beverages)	8,067		8,018		22,732		24,445
Other	3,624		2,906		11,053		9,967
	$	590,422	$	541,940	$	1,705,579	$	1,589,185