SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2011

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 the 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 June 30, 2011
	DSD			Warehouse		Corporate and Unallocated			Total
Net sales	$	436,656		$	25,489	$	-		$	462,145
Contribution margin	150,456			1,403		-			151,859
Corporate and unallocated expenses	-			-		(19,377		)	(19,377		)
Operating income									132,482
Other income (expense)	(21		)	-		295			274
Income before provision for income taxes									132,756
Depreciation and amortization	3,072			20		999			4,091
Trademark amortization	-			11		1			12
	Three-Months Ended June 30, 2010
	DSD			Warehouse		Corporate and Unallocated			Total
Net sales	$	341,292		$	24,409	$	-		$	365,701
Contribution margin	129,394			1,832		-			131,226
Corporate and unallocated expenses	-			-		(21,550		)	(21,550		)
Operating income									109,676
Other income (expense)	(4		)	-		325			321
Income before provision for income taxes									109,997
Depreciation and amortization	1,565			12		1,232			2,809
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 $19.4 million for the three-months ended June 30, 2011 and included $12.3 million of payroll costs, of which $4.1 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $3.4 million attributable to professional service expenses, including accounting and legal costs, and $3.7 million of other operating expenses. Corporate and unallocated expenses were $21.5 million for the three-months ended June 30, 2010 and included $11.7 million of payroll costs, of which $3.5 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $4.8 million attributable to professional service expenses, including accounting and legal costs, $1.2 million of depreciation, $1.3 million of bad debt expense and $2.5 million of other operating expenses. Certain items, including operating assets and income taxes, are not allocated to individual segments and therefore are not presented above.

On October 2, 2010, The Coca-Cola Company (“TCCC”) completed its acquisition of the North American business operations of Coca-Cola Enterprises, Inc. (“CCE”), through a merger with a wholly owned subsidiary of TCCC. The surviving wholly owned subsidiary was subsequently renamed Coca-Cola Refreshments (“CCR”), and currently distributes certain of the Company’s products in those portions of the United States in which CCE previously distributed certain of the Company’s products. Concurrently with this acquisition, a new entity, which retained the name Coca-Cola Enterprises, Inc. (“New CCE”) was formed which is currently the Company’s distributor in Great Britain, France, Belgium, the Netherlands, Luxembourg, Monaco and Sweden (added during the first quarter of 2011).

CCR, a customer of the DSD segment, accounted for approximately 30% of the Company’s net sales for the three-months ended June 30, 2011. CCE, a customer of the DSD segment, accounted for approximately 35% of the Company’s net sales for the three-months ended June 30, 2010.

Net sales to customers outside the United States amounted to $78.1 million and $52.5 million for the three-months ended June 30, 2011 and 2010, respectively. Such sales were approximately 16.9% and 14.4% of net sales for the three-months ended June 30, 2011 and 2010, respectively.

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

	Six-Months Ended June 30, 2011
	DSD			Warehouse		Corporate and Unallocated			Total
Net sales	$	771,378		$	47,186	$	-		$	818,564
Contribution margin	260,531			1,063		-			261,594
Corporate and unallocated expenses	-			-		(40,658		)	(40,658		)
Operating income									220,936
Other income (expense)	(8		)	-		584			576
Income before provision for income taxes									221,512
Depreciation and amortization	5,617			37		2,017			7,671
Trademark amortization	-			22		2			24
	Six-Months Ended June 30, 2010
	DSD			Warehouse		Corporate and Unallocated			Total
Net sales	$	558,446		$	45,366	$	-		$	603,812
Contribution margin	202,449			2,098		-			204,547
Corporate and unallocated expenses	-			-		(44,085		)	(44,085		)
Operating income									160,462
Other income (expense)	55			-		1,251			1,306
Income before provision for income taxes									161,768
Depreciation and amortization	3,029			23		2,398			5,450
Trademark amortization	-			22		2			24

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 $40.7 million for the six-months ended June 30, 2011 and included $25.0 million of payroll costs, of which $7.9 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $8.6 million attributable to professional service expenses, including accounting and legal costs, and $7.1 million of other operating expenses. Corporate and unallocated expenses were $44.1 million for the six-months ended June 30, 2010 and included $24.6 million of payroll costs, of which $8.5 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $10.3 million attributable to professional service expenses, including accounting and legal costs, $2.4 million of depreciation, $1.3 million of bad debt expense and $5.5 million of other operating expenses. Certain items, including operating assets and income taxes, are not allocated to individual segments and therefore are not presented above.

CCR, a customer of the DSD segment, accounted for approximately 29% of the Company’s net sales for the six-months ended June 30, 2011. CCE, a customer of the DSD segment, accounted for approximately 36% of the Company’s net sales for the six-months ended June 30, 2010.

Net sales to customers outside the United States amounted to $133.5 million and $81.9 million for the six-months ended June 30, 2011 and 2010, respectively. Such sales were approximately 16.3% and 13.6% of net sales for the six-months ended June 30, 2011 and 2010, respectively.

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

	Three-Months Ended				Six-Months Ended
	June 30,				June 30,
	2011		2010		2011		2010
Energy drinks	$	425,060	$	332,769	$	752,702	$	543,719
Non-carbonated (primarily juice based beverages and Peace Tea™ iced teas)	25,534		20,634		44,478		37,756
Carbonated (primarily soda beverages)	8,616		9,934		15,885		17,701
Other	2,935		2,364		5,499		4,636
	$	462,145	$	365,701	$	818,564	$	603,812