SEGMENT INFORMATION

6 Months Ended

Jun. 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 June 30, 2013
	DSD		Warehouse		Corporate and Unallocated		Total
Net sales	$	600,992	$	29,942	$	-	$	630,934
Contribution margin	215,018		1,130		-		216,148
Corporate and unallocated expenses	-		-		(36,721)		(36,721)
Operating income							179,427
Other income (expense)	99		-		(3,501)		(3,402)
Income before provision for income taxes							176,025
Depreciation and amortization	(4,598)		(53)		(614)		(5,265)
Trademark amortization	-		(11)		(1)		(12)

	Three-Months Ended June 30, 2012
	DSD		Warehouse		Corporate and Unallocated		Total
Net sales	$	568,026	$	24,614	$	-	$	592,640
Contribution margin	195,770		1,621		-		197,391
Corporate and unallocated expenses	-		-		(27,618)		(27,618)
Operating income							169,773
Other income (expense)	167		-		(227)		(60)
Income before provision for income taxes							169,713
Depreciation and amortization	(3,910)		(27)		(1,176)		(5,113)
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 $36.7 million for the three-months ended June 30, 2013 and included $21.4 million of payroll costs, of which $7.4 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $9.3 million attributable to professional service expenses, including accounting and legal costs and $6.0 million of other operating expenses.  Corporate and unallocated expenses were $27.6 million for the three-months ended June 30, 2012 and included $17.9 million of payroll costs, of which $7.1 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $4.4 million attributable to professional service expenses, including accounting and legal costs, and $5.3 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 June 30, 2013 and 2012, respectively.

Net sales to customers outside the United States amounted to $127.6 million and $124.4 million for the three-months ended June 30, 2013 and 2012, 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, 2013
	DSD		Warehouse		Corporate and Unallocated		Total
Net sales	$	1,061,168	$	53,990	$	-	$	1,115,158
Contribution margin	353,991		1,511		-		355,502
Corporate and unallocated expenses	-		-		(68,770)		(68,770)
Operating income							286,732
Other income (expense)	288		-		(5,591)		(5,303)
Income before provision for income taxes							281,429
Depreciation and amortization	(9,019)		(101)		(1,193)		(10,313)
Trademark amortization	-		(22)		(2)		(24)

	Six-Months Ended June 30, 2012
	DSD		Warehouse		Corporate and Unallocated		Total
Net sales	$	999,208	$	48,037	$	-	$	1,047,245
Contribution margin	344,862		3,779		-		348,641
Corporate and unallocated expenses	-		-		(52,582)		(52,582)
Operating income							296,059
Other income (expense)	267		-		19		286
Income before provision for income taxes							296,345
Depreciation and amortization	(7,693)		(55)		(2,321)		(10,069)
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 $68.8 million for the six-months ended June 30, 2013 and included $40.8 million of payroll costs, of which $14.4 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $16.9 million attributable to professional service expenses, including accounting and legal costs and $11.1 million of other operating expenses.  Corporate and unallocated expenses were $52.6 million for the six-months ended June 30, 2012 and included $35.5 million of payroll costs, of which $13.6 million was attributable to stock-based compensation expense (see Note 12, “Stock-Based Compensation”), $7.1 million attributable to professional service expenses, including accounting and legal costs, and $10.0 million of other operating expenses.

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

Net sales to customers outside the United States amounted to $233.9 million and $203.5 million for the six-months ended June 30, 2013 and 2012, respectively.

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

	Three-Months Ended				Six-Months Ended
	June 30,				June 30,
Product Line	2013		2012		2013		2012
Energy drinks	$	582,899	$	550,561	$	1,028,925	$	969,473
Non-carbonated (primarily juice based beverages and Peace Tea® iced teas)	36,166		30,031		64,138		54,284
Carbonated (primarily soda beverages)	8,264		8,765		14,665		16,426
Other	3,605		3,283		7,430		7,062
	$	630,934	$	592,640	$	1,115,158	$	1,047,245