SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2022

SEGMENT INFORMATION

SEGMENT INFORMATION

20.        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, Monster® Tour Water^TM 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 as well as The Beast Unleashed^TM FMBs 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 ready-to-drink canned beers, hard seltzers and FMBs primarily to beer 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 years ended December 31 are as follows:

	2022		2021		2020
Net sales:
Monster Energy® Drinks1	$	5,833,211	$	5,220,673	$	4,305,246
Strategic Brands		353,490		294,762		266,354
Alcohol Brands2		101,405		—		—
Other		22,944		25,917		27,038
Corporate and unallocated		—		—		—
	$	6,311,050	$	5,541,352	$	4,598,638

	2022		2021		2020
Operating Income:
Monster Energy® Drinks1	$	1,850,053	$	1,990,785	$	1,820,346
Strategic Brands		197,709		173,660		155,047
Alcohol Brands2		(31,502)		—		—
Other		3,040		6,935		5,930
Corporate and unallocated		(434,579)		(373,913)		(348,170)
	$	1,584,721	$	1,797,467	$	1,633,153

	2022		2021		2020
Income before tax:
Monster Energy® Drinks1	$	1,853,011	$	1,992,185	$	1,820,625
Strategic Brands		197,843		173,739		155,047
Alcohol Brands2		(31,772)		—		—
Other		3,041		6,935		5,933
Corporate and unallocated		(450,159)		(371,440)		(355,448)
	$	1,571,964	$	1,801,419	$	1,626,157

(1) Includes $40.0 million, $41.5 million and $42.1 million for the years ended December 31, 2022, 2021 and 2020, respectively, related to the recognition of deferred revenue.

(2) Effectively from February 17, 2022 to December 31, 2022.

	2022		2021		2020
Depreciation and amortization:
Monster Energy® Drinks	$	31,957	$	34,532	$	38,277
Strategic Brands		924		1,085		4,178
Alcohol Brands		13,440		—		—
Other		4,461		4,485		4,631
Corporate and unallocated		10,459		10,053		9,944
	$	61,241	$	50,155	$	57,030

Corporate and unallocated expenses were $434.6 million for the year ended December 31, 2022 and included $278.7 million of payroll costs, of which $63.1 million was attributable to stock-based compensation expense (See Note 16, “Stock-Based Compensation”), $87.1 million of professional service expenses, including accounting and legal costs, $10.5 million of insurance costs and $58.3 million of other operating expenses.

Corporate and unallocated expenses were $373.9 million for the year ended December 31, 2021 and included $258.6 million of payroll costs, of which $70.3 million was attributable to stock-based compensation expense (See Note 16, “Stock-Based Compensation”), $77.9 million of professional service expenses, including accounting and legal costs, $9.3 million of insurance costs and $28.1 million of other operating expenses.

Corporate and unallocated expenses were $348.2 million for the year ended December 31, 2020 and included $234.1 million of payroll costs, of which $69.9 million was attributable to stock-based compensation expense (See Note 16, “Stock-Based Compensation”), $67.6 million of professional service expenses, including accounting and legal costs, $7.5 million of insurance costs and $39.0 million of other operating expenses.

Coca-Cola Consolidated, Inc. accounted for approximately 11%, 12% and 12% of the Company’s net sales for the years ended December 31, 2022, 2021 and 2020, respectively.

Reyes Coca-Cola Bottling, LLC accounted for approximately 9%, 10% and 11% of the Company’s net sales for the years ended December 31, 2022, 2021 and 2020, respectively.

Coca-Cola Europacific Partners accounted for approximately 13%, 12% and 10% of the Company’s net sales for the years ended December 31, 2022, 2021 and 2020, respectively.

Net sales to customers outside the United States amounted to $2.36 billion, $2.04 billion and $1.51 billion for the years ended December 31, 2022, 2021 and 2020, respectively. Such sales were approximately 37%, 37% and 33% of net sales for the years ended December 31, 2022, 2021 and 2020, respectively.

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

	2022		2021
Goodwill and other intangible assets:
Monster Energy® Drinks	$	1,424,212	$	1,420,503
Strategic Brands		979,896		978,032
Alcohol Brands		233,140		—
Other		1,103		5,494
Corporate and unallocated		—		—
	$	2,638,351	$	2,404,029