5 unchanged sentences
Based on our management’s evaluation under the framework in Internal Control - Integrated Framework (2013) , our management concluded that our internal control over financial reporting was effective as of December 31, 2022.
−Removed: Our internal control over financial reporting as of December 31, 2021 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their attestation report, which is included herein.
+Added: Our internal control over financial reporting as of December 31, 2022 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their attestation.
Changes in Internal Control Over Financial Reporting – There were no changes in the Company’s internal controls over financial reporting during the quarter ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
6 unchanged sentences
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
−Removed: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2021, of the Company and our report dated February 28, 2022, expressed an unqualified opinion on those financial statements.
+Added: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2022, of the Company and our report dated March 1, 2023, expressed an unqualified opinion on those financial statements.
Basis for Opinion
16 unchanged sentences
Costa Mesa, California
−Removed: February 28, 2022
+Added: March 1, 2023
OTHER INFORMATION
67 unchanged sentences
Monster Beverage Corporation 2020 Omnibus Incentive Plan (incorporated by reference to Appendix A to our Definitive Proxy Statement on Schedule 14A, filed April 21, 2020).
−Removed: Monster Beverage Corporation 2017 Compensation Plan for Non-Employee Directors (incorporated by reference to Exhibit 4.1 to our Form S-8 dated June 21, 2017).
+Added: Monster Beverage Corporation 2017 Compensation Plan for Non-Employee Directors as Amended and Restated on February 23, 2022 (incorporated by reference to Exhibit 1 0 .1 to our Form 10- Q dated May 6, 2022).
Monster Beverage Corporation Deferred Compensation Plan for Non-Employee Directors (incorporated by reference to Exhibit 4.2 to our Form S-8 dated June 21, 2017).
4 unchanged sentences
Form of Restricted Stock Unit Award Agreement for grants under the Monster Beverage Corporation 2020 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.4 to our Form 10-Q dated May 7, 2021).
+Added: Letter from Deloitte & Touche LLP to the Securities and Exchange Commission dated January 13, 2023 (incorporated by reference to Exhibit 16.1 to our Form 8-K dated January 13, 2023).
Consent of Independent Registered Public Accounting Firm
16 unchanged sentences
/s/ RODNEY C.
−Removed: February 28, 2022
+Added: March 1, 2023
Chairman of the Board of
2 unchanged sentences
/s/ HILTON H.
−Removed: February 28, 2022
+Added: March 1, 2023
Vice Chairman of the Board of
4 unchanged sentences
Chairman of the Board of
−Removed: February 28, 2022
+Added: March 1, 2023
Directors and Co-Chief Executive
2 unchanged sentences
Vice Chairman of the Board of Directors
−Removed: February 28, 2022
+Added: March 1, 2023
and Co-Chief Executive Officer (principal
2 unchanged sentences
Chief Financial Officer (principal financial
−Removed: February 28, 2022
+Added: March 1, 2023
officer, principal accounting officer)
/s/ ANA DEMEL
−Removed: February 28, 2022
−Removed: February 28, 2022
−Removed: February 28, 2022
−Removed: February 28, 2022
+Added: March 1, 2023
+Added: March 1, 2023
+Added: March 1, 2023
+Added: March 1, 2023
/s/ TIFFANY M.
−Removed: February 28, 2022
+Added: March 1, 2023
/s/ JEANNE P.
−Removed: February 28, 2022
+Added: March 1, 2023
/s/ STEVEN G.
−Removed: February 28, 2022
−Removed: /s/ BENJAMIN M.
−Removed: February 28, 2022
−Removed: February 28, 2022
+Added: March 1, 2023
+Added: March 1, 2023
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
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In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.
−Removed: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 28, 2022, expressed an unqualified opinion on the Company’s internal control over financial reporting.
+Added: We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 1, 2023, expressed an unqualified opinion on the Company’s internal control over financial reporting.
Basis for Opinion
16 unchanged sentences
These accruals are based on agreed-upon terms as well as the Company’s historical experience with similar programs and require management’s judgment with respect to estimating consumer participation and/or bottler/distributor and retail customer performance levels.
−Removed: Promotional and other allowances primarily include consideration given to bottlers/distributors or retail customers, including, but not limited to, the following:
+Added: Promotional and other allowances for the Company’s energy drink products primarily include consideration given to its non-alcohol bottlers/distributors or retail customers, including, but not limited to, the following:
(i) discounts granted off list prices to support price promotions to end consumers by retailers;
6 unchanged sentences
and (viii) certain commissions paid based on sales to bottlers/distributors.
−Removed: The promotional programs are of varying durations, typically ranging from one week to one year based on the agreed-upon terms.
+Added: The promotional programs for the Company’s energy drink products are of varying durations, typically ranging from one week to one year based on the agreed-upon terms.
The nature of such programs is determined on a per retail customer basis, and in certain instances, the same program is set for multiple retail customers.
1 unchanged sentence
Total promotional expenditures included as a reduction to net sales were $990.6 million for the year ended December 31, 2022, and accrued promotional allowances were $255.6 million as of December 31, 2022.
−Removed: We identified accrued promotional allowances as a critical audit matter because of the extent and subjective nature of management judgment required with respect to estimating consumer participation and/or distributor and retail customer performance levels and future promotional claims.
+Added: We identified accrued promotional allowances as a critical audit matter because of the extent and subjective nature of management judgment required with respect to estimating consumer participation and/or distributor and retail customer performance levels and future promotional claims, which required a high degree of auditor judgement and an increased extent of effort.
How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our audit procedures over accrued promotional allowances, with respect to management’s judgment regarding levels of consumer participation and/or distributor and retail customer performance levels and future promotional claims, included the following, among others:
+Added: Our audit procedures over accrued promotional allowances for energy drink products, with respect to management’s judgment regarding levels of consumer participation and/or distributor and retail customer performance levels and future promotional claims, included the following, among others:
● We tested the effectiveness of controls over accrued promotional allowances, including those controls pertaining to management’s estimation of future promotional claims.
8 unchanged sentences
Costa Mesa, California
−Removed: February 28, 2022
+Added: March 1, 2023
We have served as the Company’s auditor since 1991.
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Retained earnings
−Removed: Accumulated other comprehensive (loss) income
+Added: Accumulated other comprehensive loss
Common stock in treasury, at cost;
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OPERATING INCOME
−Removed: OTHER INCOME (EXPENSE), NET
+Added: OTHER (EXPENSE) INCOME , NET
INCOME BEFORE PROVISION FOR INCOME TAXES
7 unchanged sentences
Net income, as reported
−Removed: Other comprehensive (loss) income:
+Added: Other comprehensive income (loss):
Change in foreign currency translation adjustment, net of tax
Available-for-sale investments:
−Removed: Change in net unrealized gains (losses)
+Added: Change in net unrealized losses
Reclassification adjustment for net gains included in net income
Net change in available-for-sale investments
−Removed: Other comprehensive (loss) income
+Added: Other comprehensive income (loss)
Comprehensive income
7 unchanged sentences
Paid-in Capital
+Added: (Loss) Income
Balance, January 1, 2020
2 unchanged sentences
Exercise of stock options
−Removed: Unrealized gain on available-for-sale securities
−Removed: Adjustment to excess tax benefits from prior periods
+Added: Unrealized loss on available-for-sale securities
Repurchase of common stock
28 unchanged sentences
Deferred income taxes
−Removed: Effect on cash of changes in operating assets and liabilities:
+Added: Effect on cash of changes in operating assets and liabilities net of acquisition:
Accounts receivable
11 unchanged sentences
Sales of available-for-sale investments
−Removed: Proceeds from sale of property and equipment
Purchases of available-for-sale investments
2 unchanged sentences
( 1,299,981 )
+Added: Acquisition of CANarchy, net of cash
Purchases of property and equipment
+Added: Proceeds from sale of property and equipment
Additions to intangibles
5 unchanged sentences
Purchases of common stock held in treasury
−Removed: Net cash provided by (used in) financing activities
+Added: Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
−Removed: NET INCREASE IN CASH AND CASH EQUIVALENTS
+Added: NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, beginning of year
8 unchanged sentences
Included in accrued liabilities as of December 31, 2022, 2021 and 2020 were $ 9.4 million, $ 14.0 million and $ 9.8 million, respectively, related to net additions to other intangible assets.
−Removed: Accounts payable included purchases of available-for-sale short-term investments of $ 8.7 million as of December 31, 2019.
−Removed: No purchases of available-for-sale investments were included in accounts payable as of December 31, 2021 and December 31, 2020.
+Added: Accounts payable included equipment purchases of $ 2.9 million, $ 0.6 million and $ 0.6 million as of December 31, 2022, 2021 and 2020, respectively.
+Added: Accounts receivable included sales of available-for-sale short-term investments of $ 15.2 million as of December 31, 2022.
+Added: No sales of available-for-sale investments were included in accounts receivable as of December 31, 2021 and 2020.
See accompanying notes to consolidated financial statements.
6 unchanged sentences
Nature of Operations – The Company develops, markets, sells and distributes energy drink beverages and concentrates for energy drink beverages, primarily under the following brand names:
−Removed: Monster Energy®, Monster Energy Ultra®, Rehab® Monster, Java Monster®, Muscle Monster®, Espresso Monster®, Punch Monster®, Juice Monster®, Monster Hydro® Energy Water, Monster Hydro® Super Sport, Monster HydroSport Super Fuel®, Monster Super Fuel®, Monster Dragon Tea®, Reign Total Body Fuel®, Reign Inferno® Thermogenic Fuel, NOS®, Full Throttle®, Burn®, Mother®, Nalu®, Ultra Energy®, Play® and Power Play® (stylized), Relentless®, BPM®, BU®, Gladiator®, Samurai®, Live+®, Predator®, Fury® and True North®.
+Added: Monster Energy®, Monster Energy Ultra®, Monster Rehab®, Monster Energy® Nitro, Java Monster®, Punch Monster®, Juice Monster®, Monster Hydro® Energy Water, Monster Hydro® Super Sport, Monster Super Fuel®, Monster Dragon Tea®, Reign Total Body Fuel®, Reign Inferno® Thermogenic Fuel, Reign Storm®, NOS®, Full Throttle®, Burn®, Mother®, Nalu®, Ultra Energy®, Play® and Power Play® (stylized), Relentless®, BPM®, BU®, Gladiator®, Samurai®, Live+®, Predator®, Fury® and True North®.
+Added: The Company also develops, markets, sells and distributes craft beers, flavored malt beverages (“FMBs”) and hard seltzers under a number of brands, including Jai Alai® IPA, Florida Man TM IPA, Dale’s Pale Ale®, Wild Basin TM Hard Seltzers, Dallas Blonde®, Deep Ellum TM IPA, Perrin Brewing Company TM Black Ale, Hop Rising® Double IPA, Wasatch® Apricot Hefeweizen, The Beast Unleashed TM and a host of other brands.
Basis of Presentation – The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its consolidated subsidiaries.
+Added: Amounts previously classified in certain property and equipment balances totaling $ 20.1 million as of December 31, 2021 have been reclassified to assets under construction to conform to presentation as of December 31, 2022.
Principles of Consolidation – The Company consolidates all entities that it controls by ownership of a majority voting interest.
40 unchanged sentences
The related costs and accumulated depreciation of disposed assets are eliminated and any resulting gain or loss on disposition is included in net income.
+Added: Goodwill – The Company records goodwill when the consideration paid for an acquisition exceeds the fair value of net tangible and intangible assets acquired, including related tax effects.
+Added: Goodwill is not amortized;
+Added: instead, goodwill is
MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
1 unchanged sentence
(Tabular Dollars in Thousands, Except Per Share Amounts)
−Removed: Goodwill – The Company records goodwill when the consideration paid for an acquisition exceeds the fair value of net tangible and intangible assets acquired, including related tax effects.
−Removed: Goodwill is not amortized;
−Removed: instead, goodwill is tested for impairment on an annual basis, or more frequently if the Company believes indicators of impairment exist.
+Added: tested for impairment on an annual basis, or more frequently if the Company believes indicators of impairment exist.
The Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value.
1 unchanged sentence
The Company will recognize an impairment for the amount by which the carrying amount exceeds a reporting unit’s fair value.
−Removed: For the years ended December 31, 2021, 2020 and 2019 there were no impairments recorded and there are no accumulated impairment balances.
−Removed: Other Intangibles – Other Intangibles are comprised primarily of trademarks that represent the Company’s exclusive ownership of the Monster Energy®, ®, Monster Energy Ultra®, Monster Dragon Tea®, Unleash the Beast!®, Rehab® Monster, Java Monster®, Muscle Monster®, Espresso Monster®, Punch Monster®, Juice Monster®, Monster Hydro®, Monster HydroSport Super Fuel®, Monster Super Fuel®, Reign Total Body Fuel®, Reign Inferno®, Predator®, Fury®, True North®, NOS®, Full Throttle®, Burn®, Mother®, Nalu®, Ultra Energy®, Play® and Power Play® (stylized), Relentless®, BPM®, BU®, Gladiator®, and Samurai® trademarks, all used in connection with the manufacture, sale and distribution of beverages.
+Added: For the years ended December 31, 2022, 2021 and 2020 there were no goodwill impairments recorded and there are no accumulated impairment balances.
+Added: Other Intangibles – Other Intangibles are comprised primarily of trademarks that represent the Company’s exclusive ownership of the Monster Energy®, ®, Monster Energy Ultra®, Monster Dragon Tea®, Unleash the Beast!®, Monster Rehab®, Java Monster®, Muscle Monster®, Espresso Monster®, Punch Monster®, Juice Monster®, Monster Hydro®, Monster HydroSport Super Fuel®, Monster Super Fuel®, Reign Total Body Fuel®, Reign Inferno®, Predator®, Fury®, True North®, NOS®, Full Throttle®, Burn®, Mother®, Nalu®, Ultra Energy®, Play® and Power Play® (stylized), Relentless®, BPM®, BU®, Gladiator®, Samurai®, Oskar Blues Brewery®, Cigar City®, Deep Ellum Brewing Co®, Perrin Brewing Company®, Squatters®, Wasatch®, Jai Alai®, Dale’s Pale Ale®, Dallas Blonde®, Wild Basin®, Dale’s®, Mama’s Little Yella Pils®, Hop Rising® and The Beast Unleashed TM trademarks, all used in connection with the manufacture, sale and distribution of beverages.
The Company also owns a number of other trademarks, flavors and formulas in the United States, as well as in a number of countries around the world.
3 unchanged sentences
The Company amortizes its trademarks with finite useful lives over their respective useful lives.
−Removed: For the years ended December 31, 2021 and 2019 no impairments were recorded.
−Removed: For the year ended December 31, 2020, an impairment charge of $ 8.7 million was recorded to intangibles.
+Added: For the years ended December 31, 2022 and 2020, impairment charges of $ 2.2 million and $ 8.7 million, respectively, were recorded to indefinite-lived intangibles.
+Added: For the year ended December 31, 2021, no impairments were recorded.
+Added: We presently have more than 17,500 registered trademarks and pending applications in various countries worldwide, and we apply for new trademarks on an ongoing basis.
+Added: We regard our trademarks, service marks, copyrights, domain names, trade dress and other intellectual property as very important to our business.
+Added: We consider Monster®, Monster Energy®, ®, Monster Energy Ultra®, Monster Dragon Iced Tea®, Unleash the Beast!®, Rehab® Monster®, Java Monster®, Muscle Monster®, Punch Monster®, Juice Monster®, Hydro® (stylized), Monster HydroSport Super Fuel®, Hydro Super Sport®, Monster Super Fuel®, Espresso Monster®, Monster Energy® Nitro, Reign Total Body Fuel®, Reign Inferno®, True North®, BU®, Nalu®, NOS®, Full Throttle®, Burn®, Mother®, Ultra Energy®, Play® and Power Play® (stylized), Relentless®, Predator®, Fury®, Live+®, BPM®, Gladiator®, Samurai®, Oskar Blues Brewery®, Cigar City®, Deep Ellum Brewing Co®, Perrin Brewing Company®, Squatters®, Wasatch®, Jai Alai®, Dale’s Pale Ale®, Dallas Blonde®, Wild Basin®, Dale’s®, Mama’s Little Yella Pils®, Hop Rising® and The Beast Unleashed TM to be our core trademarks.
+Added: We also own the intellectual property of our most important flavors for certain of our Monster Energy® Brand energy drinks in perpetuity.
Leases – See Note 4.
3 unchanged sentences
If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value.
−Removed: The fair value is estimated using the present value of the future cash flows discounted at a rate commensurate with management’s estimates of the business risks.
−Removed: Preparation of estimated expected future cash flows is inherently subjective and is based on management’s best estimate of assumptions concerning expected future conditions.
−Removed: For the years ended December 31, 2021, 2020 and 2019, there were no impairment indicators identified.
−Removed: Long-lived assets held for sale are recorded at the lower of their carrying amount or fair value less cost to sell.
+Added: The fair value is estimated
MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
1 unchanged sentence
(Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: using the present value of the future cash flows discounted at a rate commensurate with management’s estimates of the business risks.
+Added: Preparation of estimated expected future cash flows is inherently subjective and is based on management’s best estimate of assumptions concerning expected future conditions.
+Added: For the years ended December 31, 2022, 2021 and 2020, there were no impairment indicators identified.
+Added: Long-lived assets held for sale are recorded at the lower of their carrying amount or fair value less cost to sell.
Foreign Currency Translation and Transactions – The accounts of the Company’s foreign subsidiaries are translated in accordance with FASB ASC 830.
7 unchanged sentences
The Company has not designated its foreign currency exchange contracts as hedge transactions under FASB ASC 815.
−Removed: Therefore, gains and losses on the Company’s foreign currency exchange contracts are recognized in other income, net, in the consolidated statements of income, and are largely offset by the changes in the fair value of the underlying economically hedged item.
−Removed: For the years ended December 31, 2021, 2020 and 2019, aggregate foreign currency transaction gains (losses), including the gains or losses on forward currency exchange contracts, amounted to $ 0.3 million, ($ 11.2 ) million and ($ 4.1 ) million, respectively, and have been recorded in other income, net, in the accompanying consolidated statements of income.
+Added: Therefore, gains and losses on the Company’s foreign currency exchange contracts are recognized in other (expense) income, net, in the consolidated statements of income, and are largely offset by the changes in the fair value of the underlying economically hedged item.
+Added: For the years ended December 31, 2022, 2021 and 2020, aggregate foreign currency transaction gains (losses), including the gains or losses on forward currency exchange contracts, amounted to ($ 37.9 ) million, $ 0.3 million and ($ 11.2 ) million, respectively, and have been recorded in other (expense) income, net, in the accompanying consolidated statements of income.
Revenue Recognition – See Note 3.
57 unchanged sentences
If early adopted, the amendments are applied retrospectively to all business combinations for which the acquisition date occurred during the fiscal year of adoption.
−Removed: The Company is currently evaluating the impact of ASU No.
−Removed: 2021-08 on its financial position, results of operations and liquidity.
+Added: The Company adopted ASU No.
+Added: 2021-08 on January 1, 2023, which did not have a material impact on the Company’s financial position, results of operations and liquidity.
MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
1 unchanged sentence
(Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: On February 17, 2022, the Company completed its acquisition of CANarchy Craft Brewery Collective LLC (“CANarchy”), a craft beer and hard seltzer company, for $ 329.5 million in cash (net of cash acquired), after certain working capital adjustments (the “CANarchy Transaction”).
+Added: The CANarchy Transaction facilitates the Company’s entry into the alcohol beverage sector and brings the Cigar City TM family of brands including Jai Alai® IPA and Florida Man TM IPA, the Oskar Blues TM family of brands including Dale’s Pale Ale®, Wild Basin TM Hard Seltzers, the Deep Ellum TM family of brands including Dallas Blonde® and Deep Ellum TM IPA, the Perrin Brewing Company TM family of brands including Black Ale, the Squatters® family of brands including Hop Rising® Double IPA, the Wasatch® family of brands including Apricot Hefeweizen, as well as certain other brands (collectively the “CANarchy Brands”) to the Company’s beverage portfolio.
+Added: The transaction did not include CANarchy’s stand-alone restaurants.
+Added: The Company’s organizational structure for its existing energy beverage business remains unchanged.
+Added: CANarchy is functioning independently, retaining its own organizational structure and team.
+Added: The Company accounted for the CANarchy Transaction in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations”.
+Added: The following table summarizes the final fair value allocations of the CANarchy Transaction:
+Added: Assets Acquired
+Added: and Liabilities
+Added: Consideration
+Added: Intangibles - trademarks (non-amortizing)
+Added: Intangibles - customer relationships (amortizing)
+Added: Intangibles - permits (non-amortizing)
+Added: Property and equipment
+Added: Right-of-use assets
+Added: Operating lease liabilities
+Added: Working capital (excluding inventory)
+Added: During the fourth quarter of 2022, the Company identified a measurement period adjustment to the Company’s previous purchase accounting estimates for the CANarchy Transaction.
+Added: The adjustments to the estimated values previously disclosed, resulted from the completed assessment of certain trademarks.
+Added: As a result, Intangibles – trademarks (non-amortizing) decreased and Goodwill increased by $ 5.0 million, respectively, from amounts previously reported.
+Added: The Company determined the fair values as follows:
+Added: ● Trademarks – relief-from-royalty method of the income approach
+Added: ● Customer relationships – distributor method of the income approach
+Added: ● Permits – with-and-without method of the income approach
+Added: ● Property and equipment – cost approach
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: ● Inventory – comparative sales method and replacement cost method
+Added: The book value of the working capital (excluding inventory) approximates fair value due to the short-term nature of the accounts.
+Added: The Company has determined goodwill in accordance with ASC 805, which requires the recognition of goodwill for the excess of the aggregate consideration over the net amounts of identifiable assets acquired and liabilities assumed as of the acquisition date.
+Added: For tax purposes, the CANarchy Transaction was recorded as an asset purchase.
+Added: As such, the Company received a step-up in tax basis of the CANarchy assets, net, equal to the purchase price.
+Added: In accordance with Regulation S-X, pro forma unaudited condensed financial information for the CANarchy Transaction has not been provided as the impact of the transaction on the Company’s financial position, results of operations and liquidity was not material.
+Added: On May 5, 2022, the Company acquired certain real property and equipment in Norwalk, California for a purchase price of $ 62.5 million.
+Added: The acquisition was treated as an asset acquisition for accounting purposes.
+Added: The fair value allocations include $ 50.6 million for land, $ 10.0 million for building and $ 1.9 million for equipment.
+Added: The Company intends to utilize the property as a manufacturing facility for certain of its products.
REVENUE RECOGNITION
Revenues are accounted for in accordance with ASC 606 “Revenue from Contracts with Consumers”.
−Removed: The Company has three operating and reportable segments:
−Removed: (i) Monster Energy® Drinks segment (“Monster Energy® Drinks”), 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 (“Strategic Brands”), which is primarily comprised of the various energy drink brands acquired from The Coca-Cola Company (“TCCC”) in 2015 as well as the Company’s affordable energy brands, and (iii) Other segment (“Other”), which is comprised of certain products sold by American Fruits and Flavors, LLC, a wholly-owned subsidiary of the Company, to independent third-party customers (the “AFF Third-Party Products”).
−Removed: The Company’s Monster Energy® Drinks segment generates net operating revenues by selling ready-to-drink packaged energy drinks primarily to bottlers and full service beverage bottlers/distributors (“bottlers/distributors”).
+Added: The Company has four operating and reportable segments:
+Added: (i) Monster Energy® Drinks segment (“Monster Energy® Drinks”), 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 (“Strategic Brands”), which is primarily comprised of the various energy drink brands acquired from The Coca-Cola Company (“TCCC”) in 2015 as well as the Company’s affordable energy brands, (iii) Alcohol Brands segment (“Alcohol Brands”), 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 (“Other”), which is comprised of certain products sold by American Fruits and Flavors, LLC, a wholly-owned subsidiary of the Company, to independent third-party customers (the “AFF Third-Party Products”).
+Added: The Company’s Monster Energy® Drinks segment primarily generates net operating revenues by selling ready-to-drink packaged energy drinks primarily to bottlers and full service beverage bottlers/distributors (“bottlers/distributors”).
In some cases, the Company sells ready-to-drink packaged energy 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.
3 unchanged sentences
To a lesser extent, the Strategic Brands segment generates net operating revenues by selling certain ready-to-drink packaged energy drinks to bottlers/distributors.
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: 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.
The majority of the Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products to a customer.
4 unchanged sentences
The Company does not have significant financing components or payment terms.
−Removed: The Company did not have any material unsatisfied performance obligations as of December 31, 2021 and December 31, 2020.
+Added: The Company did not have any material unsatisfied performance obligations as of December 31, 2022 and 2021.
The Company excludes from revenues all taxes assessed by a governmental authority that are imposed on the sale of its products and collected from customers.
−Removed: Distribution expenses to transport the Company’s products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses in the consolidated statements of income.
−Removed: Promotional and other allowances (variable consideration) recorded as a reduction to net sales, primarily include consideration given to the Company’s bottlers/distributors or retail customers including, but not limited to the following:
+Added: Distribution expenses to transport the Company’s products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses.
+Added: Promotional and other allowances (variable consideration) recorded as a reduction to net sales for the Company’s energy drink products, primarily include consideration given to the Company’s non-alcohol bottlers/distributors or retail customers including, but not limited to the following:
● discounts granted off list prices to support price promotions to end-consumers by retailers;
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
● reimbursements given to the Company’s bottlers/distributors for agreed portions of their promotional spend with retailers, including slotting, shelf space allowances and other fees for both new and existing products;
5 unchanged sentences
● commissions to TCCC based on the Company’s sales to wholly-owned subsidiaries of TCCC (the “TCCC Subsidiaries”) and/or to TCCC bottlers/distributors accounted for under the equity method by TCCC (the “TCCC Related Parties”).
−Removed: The Company’s promotional allowance programs with its bottlers/distributors and/or retailers are executed through separate agreements in the ordinary course of business.
+Added: The Company’s promotional allowance programs with its non-alcohol bottlers/distributors and/or retailers are executed through separate agreements in the ordinary course of business.
These agreements generally provide for one or more of the arrangements described above and are of varying durations, typically ranging from one week to one year.
−Removed: The Company’s promotional and other allowances are calculated based on various programs with bottlers/distributors and retail customers, and accruals are established at the time of initial product sale for the Company’s anticipated liabilities.
+Added: The Company’s promotional and other allowances for its energy drink products are calculated based on various programs with bottlers/distributors and retail customers, and accruals are established at the time of initial product sale for the Company’s anticipated liabilities.
These accruals are based on agreed upon terms as well as the Company’s historical experience with similar programs and require management’s judgment with respect to estimating consumer participation and/or bottler/distributor and retail customer performance levels.
−Removed: Differences between such estimated expenses and actual expenses for promotional and other allowance costs have historically been insignificant and are recognized in earnings in the period such differences are determined.
−Removed: Amounts received pursuant to new and/or amended distribution agreements entered into with certain bottlers/distributors relating to the costs associated with terminating the Company’s prior distributors, are accounted for as deferred revenue and recognized as revenue ratably over the anticipated life of the respective distribution agreements, generally over 20 years .
−Removed: The Company also sells and/or enters into license agreements that generate revenues associated with third-party sales of non-beverage products bearing the Company’s trademarks including, but not limited to, clothing, backpacks, hats, t-shirts, jackets, helmets and automotive wheels.
−Removed: Management believes that adequate provision has been made for cash discounts, returns and spoilage based on the Company’s historical experience.
+Added: Differences between such estimated expenses and actual expenses
MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
1 unchanged sentence
(Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: for promotional and other allowance costs have historically been insignificant and are recognized in earnings in the period such differences are determined.
+Added: Promotional and other allowances for our Alcohol Brands segment primarily include price promotions where permitted.
+Added: Amounts received pursuant to new and/or amended distribution agreements entered into with certain bottlers/distributors relating to the costs associated with terminating the Company’s prior distributors, are accounted for as deferred revenue and recognized as revenue ratably over the anticipated life of the respective distribution agreements, generally over 20 years .
+Added: The Company also enters into license agreements that generate revenues associated with third-party sales of non-beverage products bearing the Company’s trademarks including, but not limited to, clothing, hats, t-shirts, jackets, helmets and automotive wheels.
+Added: Management believes that adequate provision has been made for cash discounts, returns and spoilage based on the Company’s historical experience.
Disaggregation of Revenue
3 unchanged sentences
Strategic Brands
+Added: Alcohol Brands 2
Total Net Sales
3 unchanged sentences
Total Net Sales
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
Year Ended December 31, 2020
3 unchanged sentences
1 Europe, Middle East and Africa (“EMEA”)
+Added: 2 Effectively from February 17, 2022 to December 31, 2022
Contract Liabilities
Amounts received from certain bottlers/distributors at inception of their distribution contracts or at the inception of certain sales/marketing programs are accounted for as deferred revenue.
−Removed: As of December 31, 2021 and 2020, the Company had $ 285.8 million and $ 309.9 million of deferred revenue, respectively, which is included in current and long-term deferred revenue in the Company’s consolidated balance sheet.
+Added: As of December 31, 2022 and 2021, the Company had $ 267.1 million and $ 285.8 million of deferred revenue, respectively, which is included in current and long-term deferred revenue in the Company’s accompanying consolidated balance sheet.
During the years ended December 31, 2022, 2021 and 2020, $ 40.0 million, $ 41.5 million and $ 42.1 million, respectively, of deferred revenue, was recognized in net sales.
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
−Removed: The Company leases identified assets comprising real estate and equipment.
+Added: The Company leases identified assets comprised of real estate and equipment.
Real estate leases consist primarily of office and warehouse space and equipment leases consist of vehicles and warehouse equipment.
11 unchanged sentences
Certain of the Company’s real estate leases contain variable lease payments, including payments based on an index or rate.
−Removed: Variable lease payments based on an index or rate are initially measured using the index or rate in effect at the lease commencement date.
+Added: Variable lease payments based on an index or rate are initially measured using the index or rate in effect at the lease
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: commencement date.
Additional payments based on the change in an index or rate, or payments based on a change in the Company’s portion of real estate taxes and insurance, are recorded as a period expense when incurred.
1 unchanged sentence
Lease expense for finance leases consists of the amortization of the ROU asset on a straight-line basis over the asset’s estimated useful life and is included in operating expenses in the consolidated statement of income.
−Removed: Interest expense on finance leases is calculated using the amortized cost basis and is included in other income (expense), net in the consolidated statement of income.
+Added: Interest expense on finance leases is calculated using the amortized cost basis and is included in other (expense) income, net in the consolidated statement of income.
The Company’s leases have remaining lease terms of less than one year to 11 years , some of which include options to extend the leases for up to five years , and some of which include options to terminate the leases within one year .
The Company has elected not to recognize ROU assets and lease liabilities for short-term operating leases that have a term of 12 months or less.
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were as follows:
7 unchanged sentences
Total lease cost
−Removed: Supplemental cash flow information for leases for the years ended December 31, 2021, 2020 and 2019 were as follows:
+Added: Supplemental cash flow information for the years ended December 31, 2022, 2021 and 2020 were as follows:
Cash paid for amounts included in the measurement of lease liabilities:
5 unchanged sentences
Operating leases
−Removed: ROU assets for operating and finance leases recognized in the consolidated balance sheets were comprised of the following at:
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: ROU assets for operating and finance leases recognized in the accompanying consolidated balance sheets were comprised of the following at:
December 31, 2022
8 unchanged sentences
Property and Equipment, net
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
Operating and finance lease liabilities recognized in the consolidated balance sheets were as follows at:
20 unchanged sentences
Weighted-average discount rate
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
The following table reconciles the undiscounted future lease payments for operating and finance leases to the operating and finance leases recorded in the consolidated balance sheet at December 31, 2022:
5 unchanged sentences
Less imputed interest
−Removed: As of December 31, 2021, the Company did not have any significant additional operating or finance leases that had not yet commenced.
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: As of December 31, 2022, the Company had an additional operating lease for office and warehouse space that had not yet commenced of $ 1.1 million.
+Added: This operating lease will commence in 2023 with a term of four years .
+Added: As of December 31, 2022, the Company did not have any significant additional finance leases that had not yet commenced.
The following table summarizes the Company’s investments at:
1 unchanged sentence
Loss Position
−Removed: greater than 12
December 31, 2022
5 unchanged sentences
government agency securities
+Added: Variable rate demand notes
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
Loss Position
Loss Position
−Removed: greater than 12
December 31, 2021
7 unchanged sentences
The Company’s investments at December 31, 2022 and 2021 carried investment grade credit ratings.
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: Variable rate demand notes (“VRDNs”) are floating rate municipal bonds with embedded put options that allow the bondholder to sell the security at par plus accrued interest.
+Added: All of the put options are secured by a pledged liquidity source.
+Added: While they are classified as marketable investment securities, the put option allows the VRDNs to be liquidated at par on a same day, or more generally, on a seven-day settlement basis.
The following table summarizes the underlying contractual maturities of the Company’s investments at:
10 unchanged sentences
government agency securities
+Added: Variable rate demand notes
+Added: Due 11 - 20 years:
+Added: Variable rate demand notes
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES
−Removed: FASB ASC 820 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements.
−Removed: FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
−Removed: FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available.
+Added: ASC 820, “Fair Value Measurement”, provides a framework for measuring fair value and requires disclosures regarding fair value measurements.
+Added: ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available.
The three levels of inputs required by the standard that the Company uses to measure fair value are summarized below.
4 unchanged sentences
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
−Removed: FASB ASC 820 requires the use of observable market inputs (quoted market prices) when measuring fair value and requires a Level 1 quoted price to be used to measure fair value whenever possible.
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: ASC 820 requires the use of observable market inputs (quoted market prices) when measuring fair value and requires a Level 1 quoted price to be used to measure fair value whenever possible.
The following tables present the fair value of Company’s financial assets and liabilities that are recorded at fair value on a recurring basis, segregated among the appropriate levels within the fair value hierarchy at:
3 unchanged sentences
Commercial paper
+Added: Variable rate demand notes
Municipal securities
6 unchanged sentences
Accrued liabilities
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
December 31, 2021
10 unchanged sentences
Accrued liabilities
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
All of the Company’s short-term and long-term investments are classified within Level 1 or Level 2 of the fair value hierarchy.
6 unchanged sentences
During the years ended December 31, 2022, 2021 and 2020, the Company entered into forward currency exchange contracts with financial institutions to create an economic hedge to specifically manage a portion of the foreign exchange risk exposure associated with certain consolidated subsidiaries’ non-functional currency denominated assets and liabilities.
−Removed: All foreign currency exchange contracts entered into by the Company that were outstanding as of December 31, 2021 have terms of three months or less.
+Added: All foreign currency exchange contracts of the Company that were outstanding as of December 31, 2022 have terms of three months or less.
The Company does not enter into forward currency exchange contracts for speculation or trading purposes.
−Removed: The Company has not designated its foreign currency exchange contracts as hedge transactions under FASB ASC 815.
−Removed: Therefore, gains and losses on the Company’s foreign currency exchange contracts are recognized in other income, net, in the consolidated statements of income, and are largely offset by the changes in the fair value of the underlying economically hedged item.
+Added: The Company has not designated its foreign currency exchange contracts as hedge transactions under ASC 815, “Derivatives and Hedging”.
+Added: Therefore, gains and losses on the Company’s foreign currency exchange contracts are recognized in other (expense) income, net, in the consolidated statements of income, and are largely offset by the changes in the fair value of the underlying economically hedged item.
MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
5 unchanged sentences
hedging instruments under
−Removed: FASB ASC 815-20
Balance Sheet Location
2 unchanged sentences
Accounts receivable, net
−Removed: Receive USD/pay COP
+Added: Receive CAD/pay USD
Accounts receivable, net
+Added: Receive USD/pay MXN
+Added: Accounts receivable, net
+Added: Receive USD/pay GBP
+Added: Accounts receivable, net
Receive RSD/pay USD
Accounts receivable, net
−Removed: Receive USD/pay RUB
+Added: Receive GBP/pay USD
Accounts receivable, net
+Added: Receive GBP/pay USD
+Added: Accounts receivable, net
+Added: Receive USD/pay COP
+Added: Accounts receivable, net
Foreign currency exchange contracts:
−Removed: Receive USD/pay GBP
+Added: Receive USD/pay CLP
Accrued liabilities
−Removed: Receive USD/pay AUD
+Added: Receive USD/pay EUR
Accrued liabilities
1 unchanged sentence
Accrued liabilities
+Added: Receive USD/pay EUR
+Added: Accrued liabilities
Receive USD/pay NZD
Accrued liabilities
−Removed: Receive USD/pay EUR
+Added: Receive USD/pay AUD
Accrued liabilities
1 unchanged sentence
Accrued liabilities
−Removed: Receive USD/pay DKK
−Removed: Accrued liabilities
December 31, 2021
1 unchanged sentence
hedging instruments under
−Removed: FASB ASC 815-20
Balance Sheet Location
2 unchanged sentences
Accounts receivable, net
+Added: Receive USD/pay COP
+Added: Accounts receivable, net
Receive RSD/pay USD
Accounts receivable, net
+Added: Receive USD/pay RUB
+Added: Accounts receivable, net
Foreign currency exchange contracts:
−Removed: Receive EUR/pay USD
−Removed: Accrued liabilities
Receive USD/pay GBP
2 unchanged sentences
Accrued liabilities
−Removed: Receive USD/pay ZAR
−Removed: Accrued liabilities
−Removed: Receive USD/pay COP
−Removed: Accrued liabilities
Receive USD/pay CNY
Accrued liabilities
−Removed: Receive USD/pay RUB
−Removed: Accrued liabilities
−Removed: Receive NOK/pay USD
−Removed: Accrued liabilities
Receive USD/pay NZD
Accrued liabilities
−Removed: Receive SEK/pay USD
+Added: Receive USD/pay EUR
Accrued liabilities
+Added: Receive USD/pay ZAR
+Added: Accrued liabilities
Receive USD/pay DKK
3 unchanged sentences
(Tabular Dollars in Thousands, Except Per Share Amounts)
−Removed: The net gain (loss) on derivative instruments in the consolidated statements of income was as follows:
−Removed: Amount of gain (loss)
+Added: The net loss on derivative instruments in the consolidated statements of income was as follows:
+Added: Amount of loss
recognized in income on
Derivatives not designated as
−Removed: Location of gain (loss)
+Added: Location of loss
hedging instruments under
recognized in income on
−Removed: FASB ASC 815-20
Foreign currency exchange contracts
−Removed: Other income (expense), net
+Added: Other (expense) income, net
Inventories consist of the following at December 31:
Raw materials
+Added: Work in process
Finished goods
5 unchanged sentences
Computer software
+Added: Assets under construction
accumulated depreciation and amortization
Total depreciation and amortization expense recorded was $ 53.7 million, $ 45.7 million and $ 49.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: Assets under construction are not depreciated until in service date.
MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
12 unchanged sentences
Amortizing intangibles primarily consist of customer relationships.
−Removed: All amortizing intangibles have been assigned an estimated finite useful life and such intangibles are amortized on a straight-line basis over the number of years that approximate their respective useful lives, generally five to seven years .
+Added: All amortizing intangibles have been assigned an estimated finite useful life and such intangibles are amortized on a straight-line basis over the number of years that approximate their respective useful lives, generally five to fifteen years .
Total amortization expense recorded was $ 7.6 million, $ 4.4 million and $ 7.7 million for the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: No impairment was recorded for the years ended December 31, 2021 and 2019.
−Removed: Total impairment recorded was $ 8.7 million for the year ended December 31, 2020.
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: For the years ended December 31, 2022 and 2020, impairment charges of $ 2.2 million and $ 8.7 million, respectively, were recorded to non-amortizing intangibles.
+Added: For the year ended December 31, 2021, no intangible impairments were recorded.
The following is the future estimated amortization expense related to amortizing intangibles as of December 31, 2022:
1 unchanged sentence
2028 and thereafter
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
At December 31, 2022, non-amortizing intangibles primarily consist of indefinite-lived tradenames, flavors and formulas.
DISTRIBUTION AGREEMENTS
−Removed: In accordance with FASB ASC 420 “Exit or Disposal Cost Obligations”, the Company expenses distributor termination costs in the period in which the written notification of termination occurs.
−Removed: As a result, the Company incurred termination costs of $ 5.3 million, $ 0.2 million and $ 11.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.
+Added: In accordance with ASC 420 “Exit or Disposal Cost Obligations”, the Company expenses distributor termination costs in the period in which the written notification of termination occurs.
+Added: The Company incurred no termination costs for the year ended December 31, 2022.
+Added: The Company incurred termination costs of $ 5.3 million and $ 0.2 million for the years ended December 31, 2021 and 2020, respectively.
Such termination costs have been expensed in full and are included in operating expenses in the consolidated statements of income for the years ended December 31, 2021 and 2020.
15 unchanged sentences
COMMITMENTS AND CONTINGENCIES
−Removed: Contractual Obligations – The Company had the following contractual obligations related primarily to sponsorships, other marketing activities and AFF new production facility construction costs as of December 31, 2021:
+Added: Contractual Obligations – The Company had the following contractual obligations related primarily to sponsorships and other marketing activities as of December 31, 2022:
Year Ending December 31:
2028 and thereafter
−Removed: Purchase Commitments – The Company had purchase commitments aggregating approximately $ 273.4 million at December 31, 2021, which represent commitments made by the Company and its subsidiaries to various suppliers of raw materials for the production of its products.
+Added: Purchase Commitments – The Company had purchase commitments aggregating approximately $ 328.0 million at December 31, 2022, which represented commitments made by the Company and its subsidiaries to various suppliers of raw materials for the production of its products.
These obligations vary in terms, but are generally satisfied within one year .
−Removed: The Company purchases various raw material items, including, but not limited to, flavors, ingredients, supplement ingredients, containers, milk, glucose, sucralose, cream and protein, from a limited number of suppliers.
+Added: The Company purchases various raw material items, including, but not limited to, flavors, ingredients, supplement ingredients, containers, milk, glucose, sucralose and cream, from a limited number of suppliers.
An interruption in supply from any of such resources could result in the Company’s inability to produce certain products for limited or possibly extended periods of time.
8 unchanged sentences
The Company evaluates, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of the liability that is accrued, if any, and any related insurance reimbursements.
−Removed: As of December 31, 2021, no loss contingencies were included in the Company’s consolidated balance sheet.
+Added: As of December 31, 2022 and 2021, no loss contingencies were included in the Company’s accompanying consolidated balance sheets.
MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
1 unchanged sentence
(Tabular Dollars in Thousands, Except Per Share Amounts)
−Removed: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
−Removed: The components of accumulated other comprehensive income (loss) are as follows at December 31:
−Removed: Accumulated net unrealized (loss) gain on available-for-sale securities
+Added: On September 29, 2022, a jury in the U.S.
+Added: District Court for the Central District of California (the “District Court”) awarded Monster Energy Company (“MEC”) approximately $ 293 million in damages in its false advertising and trade secrets case against Vital Pharmaceuticals, Inc.
+Added: (“VPX”), the maker of Bang Energy.
+Added: The jury found VPX and its chief executive officer to have falsely advertised the “Super Creatine” ingredient of Bang Energy and to have acted willfully and deliberately in violating the federal Lanham Act.
+Added: The jury also found that VPX stole trade secrets and interfered with MEC’s contracts over shelf space with certain key vendors.
+Added: The parties are currently briefing post-verdict issues, including MEC’s motion for a permanent injunction relating to “Super Creatine” and request for enhanced and punitive damages.
+Added: In April 2022, MEC and Orange Bang, Inc.
+Added: (“Orange Bang”) filed a joint motion in the District Court to confirm a final arbitration award against VPX that awarded MEC and Orange Bang $ 175.0 million and a 5 % royalty on all future sales of VPX’s Bang Energy drink and other Bang-branded products as well as certain fees and costs.
+Added: Pursuant to the terms of the agreement between MEC and Orange Bang, the award and future royalties will, after accounting for MEC’s expended fees and costs, be shared equally between MEC and Orange Bang.
+Added: The arbitration arose from a settlement agreement that VPX entered into in 2010 with Orange Bang, a family-owned beverage business.
+Added: Pursuant to the terms of that agreement, VPX is only permitted to use the Bang mark on “creatine-based” products or on Bang products that are marketed and sold only in the vitamin and dietary supplement sections of stores.
+Added: On September 29, 2022, the District Court entered final judgment confirming the award.
+Added: On October 28, 2022, VPX filed a notice of appeal of the District Court’s final judgment confirming the award.
+Added: On October 10, 2022, VPX, along with certain of its domestic subsidiaries and affiliates, filed for protection under Chapter 11 of the Bankruptcy Code in the Southern District of Florida.
+Added: Due to such ongoing proceedings, VPX’s appeal of the District Court’s final judgment confirming the final arbitration award is stayed.
+Added: While reserving all rights to appeal, VPX made its first royalty payment of $ 3.6 million on February 14, 2023, which is for sales of Bang Energy drink and other Bang-branded products from October 10, 2022 through December 31, 2022.
+Added: This payment is subject to potential claw back if, among other things, the judgment and final arbitration award are overturned on appeal or VPX becomes administratively insolvent.
+Added: In addition, per ASC 450 “Contingencies”, the Company will not recognize the September 2022 jury award or April 2022 arbitration award until the awards are realized or realizable.
+Added: As of March 1, 2023, the proceedings have yet to progress to a stage where there is sufficient information for an accurate timeline of when the awards, including any royalty payments received, will be realized or realizable, if at all.
+Added: ACCUMULATED OTHER COMPREHENSIVE LOSS
+Added: The components of accumulated other comprehensive loss are as follows at December 31:
+Added: Accumulated net unrealized loss on available-for-sale securities
Foreign currency translation adjustments, net of tax
−Removed: Total accumulated other comprehensive (loss) income
+Added: Total accumulated other comprehensive loss
TREASURY STOCK PURCHASE
On March 13, 2020, the Company’s Board of Directors authorized a new share repurchase program for the purchase of up to $ 500.0 million of the Company’s outstanding common stock (the “March 2020 Repurchase Plan”).
−Removed: During the year ended December 31, 2021, no shares were purchased under the March 2020 Repurchase Plan.
−Removed: As of February 28, 2022, $ 441.5 million remained available for repurchase under the March 2020 Repurchase Plan.
+Added: During the year ended December 31, 2022, the Company purchased approximately 5.1 million shares of common stock at an average purchase price of $ 86.89 per share, for a total amount of approximately $ 441.5 million (excluding broker commissions), which exhausted the availability under the March 2020 Repurchase Plan.
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: On June 14, 2022, the Company’s Board of Directors authorized a share repurchase program for the purchase of up to an additional $ 500.0 million of the Company’s outstanding common stock (the “June 2022 Repurchase Plan”).
+Added: During the year ended December 31, 2022, the Company purchased approximately 3.6 million shares of common stock at an average purchase price of $ 88.73 per share, for a total amount of approximately $ 317.2 million (excluding broker commissions), under the June 2022 Repurchase Plan.
+Added: As of March 1, 2023, $ 182.8 million remained available for repurchase under the June 2022 Repurchase Plan.
+Added: On November 2, 2022, the Company’s Board of Directors authorized a share repurchase program for the purchase of up to an additional $ 500.0 million of the Company’s outstanding common stock (the “November 2022 Repurchase Plan”).
+Added: During the year ended December 31, 2022, no shares were repurchased under the November 2022 Repurchase Plan.
+Added: As of March 1, 2023, $ 500.0 million remained available for repurchase under the November 2022 Repurchase Plan.
+Added: The aggregate amount of the Company’s outstanding common stock that remains available for repurchase under all previously authorized repurchase plans is $ 682.8 million as of March 1, 2023.
During the year ended December 31, 2022, 0.2 million shares of common stock were purchased from employees in lieu of cash payments for options exercised or withholding taxes due for a total amount of $ 12.5 million.
3 unchanged sentences
The Company has two stock-based compensation plans under which shares were available for grant at December 31, 2022:
−Removed: (i) the Monster Beverage Corporation 2020 Omnibus Incentive Plan (the “2020 Omnibus Incentive Plan”), which includes the Monster Beverage Corporation Deferred Compensation Plan as a sub plan thereunder, and (ii) the Monster Beverage Corporation 2017 Compensation Plan for Non-Employee Directors, which includes the Monster Beverage Corporation Deferred Compensation Plan for Non-Employee Directors as a sub plan thereunder.
+Added: (i) the Monster Beverage Corporation 2020 Omnibus Incentive Plan (the “2020 Omnibus Incentive Plan”), which includes the Monster Beverage Corporation Deferred Compensation Plan as a sub plan thereunder, and (ii) the Monster Beverage Corporation 2017 Compensation Plan for Non-Employee Directors (the “2017 Directors Plan”), which includes the Monster Beverage Corporation Deferred Compensation Plan for Non-Employee Directors as a sub plan thereunder.
The 2020 Omnibus Incentive Plan was approved by the Board of Directors on April 14, 2020 and approved by the stockholders of the Company at the annual meeting of the Company’s stockholders held on June 3, 2020 (the “Effective Date”).
The 2020 Omnibus Incentive Plan replaced the Monster Beverage Corporation 2011 Omnibus Incentive Plan (the “2011 Omnibus Incentive Plan”).
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
The 2020 Omnibus Incentive Plan provides for the granting of stock options, stock appreciation rights, restricted stock, restricted stock units, performance awards, and other share-based awards up to an aggregate of 46,169,367 shares of the Company’s common stock, comprised of 32,000,000 new shares of common stock reserved under the 2020 Omnibus Incentive Plan, which were authorized on the Effective Date, and 14,169,367 shares of common stock that were available for grant under the 2011 Omnibus Incentive Plan as of December 31, 2019 and prior to the Effective Date.
2 unchanged sentences
Options granted under the 2020 Omnibus Incentive Plan may be incentive stock options under Section 422 of the Internal Revenue Code, as amended (the “Code”), or non-qualified stock options.
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
Shares previously granted under the 2011 Omnibus Incentive Plan after December 31, 2019 and prior to the Effective Date of the 2020 Omnibus Incentive Plan reduced the number of shares available for grant under the 2020 Omnibus Incentive Plan.
11 unchanged sentences
The 2017 Directors Plan permits the granting of stock options, stock appreciation rights, restricted shares or restricted stock units, deferred awards, dividend equivalents, and other share based-awards up to an aggregate of 1,250,000 shares of common stock of the Company to non-employee directors of the Company.
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
Each calendar year, a non-employee director will receive an annual retainer and annual equity award, as provided for in the 2017 Directors Plan, which may be modified from time to time.
−Removed: Currently, with respect to equity awards, each non-employee director receives an award of restricted stock units at each annual meeting of the Company’s stockholders or promptly thereafter.
+Added: In February 2022, the Board of Directors amended and restated the 2017 Directors Plan to provide for increases to the annual cash retainer and annual equity retainer that non-employee directors are entitled to receive.
+Added: Currently, non-employee directors receive an annual equity retainer of approximately $ 175,000 in the form of restricted stock units at each annual meeting of the Company’s stockholders or promptly thereafter.
A non-employee director’s annual award of restricted stock units will generally vest on the earliest to occur of:
3 unchanged sentences
As of December 31, 2022, 116,791 shares of the Company’s common stock had been granted under the 2017 Directors Plan, and 1,133,209 shares of the Company’s common stock remain available for grant.
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
In 2017, the Company adopted the Deferred Compensation Plan for Non-Employee Directors (as a sub plan to the 2017 Directors Plan), pursuant to which the Board of Directors may permit non-employee directors to elect, at such times and in accordance with rules and procedures (or sub-plan) adopted by the Board of Directors (which are intended to comply with Section 409A of the Code, as applicable), to receive all or any portion of such non-employee director’s compensation, whether payable in cash or in equity, on a deferred basis.
4 unchanged sentences
Each award granted under the 2017 Directors Plan will be evidenced by a written agreement and will contain the terms and conditions that the Board of Directors deems appropriate.
−Removed: In February 2022, the Board of Directors amended and restated the 2017 Directors Plan to require each non-employee director to satisfy the share ownership guidelines set forth below, as may be modified by the Board of Directors from time to time.
+Added: In February 2022, as part of the Board of Directors’ amendment and restatement of the 2017 Directors Plan, such amendment and restatement also introduced the requirement for each non-employee director to satisfy the share ownership guidelines set forth below, as may be modified by the Board of Directors from time to time.
The current share ownership guidelines provide that non-employee directors of the Company must:
6 unchanged sentences
The Company recorded $ 64.1 million, $ 70.5 million and $ 70.3 million of compensation expense relating to outstanding options, restricted stock units, performance share units and other share-based awards during the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
The tax benefit for tax deductions from non-qualified stock option exercises, disqualifying dispositions of incentive stock options and vesting of restricted stock units and performance share units for the years ended December 31, 2022, 2021 and 2020 was $ 9.1 million, $ 6.8 million and $ 10.5 million, respectively.
2 unchanged sentences
The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes-Merton option pricing formula with the assumptions included in the table below.
−Removed: The Company records compensation expense for non-employee stock options based on the estimated fair value of the options as of the earlier of (1) the date at which a commitment for performance by the non-employee to earn the stock option is reached or (2) the date at which the non-employee’s performance is complete, using the Black-Scholes-Merton option pricing formula with the assumptions included in the table below.
+Added: The Company records compensation expense for non-employee stock options based on the estimated fair value of the options as of the earlier of (1) the date at which a commitment for performance by the non-employee to earn the stock option is reached or (2) the date at which the non-employee’s performance is complete, using the Black-Scholes-Merton option pricing formula with the
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: assumptions included in the table below.
The Company uses historical data to determine the exercise behavior, volatility and forfeiture rate of the options.
14 unchanged sentences
The Company uses historical exercise patterns of previously granted options to derive employee behavioral patterns used to forecast expected exercise patterns.
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
The following table summarizes the Company’s activities with respect to its stock option plans as follows:
9 unchanged sentences
Exercisable at December 31, 2022
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
The following table summarizes information about stock options outstanding and exercisable at December 31, 2022:
7 unchanged sentences
Cash received from option exercises under all plans for the years ended December 31, 2022, 2021 and 2020 was $ 64.0 million, $ 45.7 million and $ 72.9 million, respectively.
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
At December 31, 2022, there was $ 69.5 million of total unrecognized compensation expense related to non-vested options granted to employees under the Company’s share-based payment plans.
3 unchanged sentences
In the event that the Company has the option and intent to settle a restricted stock unit or performance share unit in cash, the award is classified as a liability and revalued at each balance sheet date.
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
The following table summarizes the Company’s activities with respect to non-vested restricted stock units and performance share units as follows:
7 unchanged sentences
1 The grant activity for performance share units is recorded based on the target performance level earning 100 % of target performance share units.
−Removed: The actual number of performance share units earned could range from 0 % to 200 % of target dependent on the pre-established performance goals.
+Added: The actual number of performance share units earned could range from 0 % to 200 % of target depending on the achievement of pre-established performance goals.
The weighted-average grant-date fair value of restricted stock units and/or performance share units granted during the years ended December 31, 2022, 2021 and 2020 was $ 74.26 , $ 89.12 and $ 62.97 per share, respectively.
5 unchanged sentences
At December 31, 2022, other share-based awards outstanding included grants that vest over three years payable in the first quarters of 2023, 2024 and 2025.
+Added: At December 31, 2022, there was $ 0.1 million of total unrecognized compensation expense related to nonvested other share-based awards granted to employees under the Company’s stock-based compensation plans.
+Added: That cost is expected to be recognized over a weighted-average period of 1.0 years.
MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
1 unchanged sentence
(Tabular Dollars in Thousands, Except Per Share Amounts)
−Removed: At December 31, 2021, there was $ 0.7 million of total unrecognized compensation expense related to nonvested other share-based awards granted to employees under the Company’s stock-based compensation plans.
−Removed: That cost is expected to be recognized over a weighted-average period of 1.0 years.
Employee and Non-Employee Share-Based Compensation Expense
The table below shows the amounts recognized in the consolidated financial statements for the years ended December 31, 2022, 2021 and 2020 for share-based compensation related to employees and non-employees.
−Removed: Employee and non-employee share-based compensation expense of $ 70.5 million for the year ended December 31, 2021 is comprised of $ 8.3 million relating to incentive stock options, $ 1.6 million relating to other share-based awards and $ 60.6 million relating to non-qualified stock options, restricted units and performance units.
−Removed: Employee and non-employee share-based compensation expense of $ 70.3 million for the year ended December 31, 2020 is comprised of $ 9.4 million relating to incentive stock options, $ 2.7 million relating to other share-based awards and $ 58.2 million relating to non-qualified stock options, restricted units and performance units.
−Removed: Employee and non-employee share-based compensation expense of $ 63.4 million for the year ended December 31, 2019 is comprised of $ 10.0 million relating to incentive stock options and $ 53.4 million relating to non-qualified stock options and restricted units.
+Added: Employee and non-employee share-based compensation expense of $ 64.1 million for the year ended December 31, 2022 is comprised of $ 9.4 million relating to incentive stock options, $ 0.7 million relating to other share-based awards and $ 54.0 million relating to non-qualified stock options, restricted stock units and performance share units.
+Added: Employee and non-employee share-based compensation expense of $ 70.5 million for the year ended December 31, 2021 is comprised of $ 8.3 million relating to incentive stock options, $ 1.6 million relating to other share-based awards and $ 60.6 million relating to non-qualified stock options, restricted stock units and performance share units.
+Added: Employee and non-employee share-based compensation expense of $ 70.3 million for the year ended December 31, 2020 is comprised of $ 9.4 million relating to incentive stock options, $ 2.7 million relating to other share-based awards and $ 58.2 million relating to non-qualified stock options, restricted stock units and performance share units.
Operating expenses
58 unchanged sentences
During the years ended December 31, 2022, 2021 and 2020, the Company established full valuation allowances against certain deferred tax assets, resulting from cumulative net operating losses incurred by certain foreign subsidiaries of the Company.
−Removed: The effect of the valuation allowances and the subsequent related impact on the Company’s overall tax rate was to decrease the Company’s provision for income taxes by $ 8.1 million and $ 5.4 million for the years ended December 31, 2021 and 2020, respectively, and increase the Company’s provision for income taxes $ 3.7 million for the year ended December 31, 2019.
+Added: The effect of the valuation allowances and the subsequent related impact on the Company’s overall tax rate was to increase the Company’s provision for income taxes by $ 2.7 million for the year ended December 31, 2022, decrease the Company’s provision for income taxes by $ 8.1 million for the year ended December 31, 2021 and decrease the Company’s provision for income taxes by $ 5.4 million for the year ended December 31, 2020.
At December 31, 2022, the Company had net operating loss carryforwards of approximately $ 92.1 million.
25 unchanged sentences
The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Company’s consolidated financial statements.
−Removed: As of December 31, 2021, the Company had no unrecognized tax benefits.
+Added: As of December 31, 2022, the Company had accrued approximately $ 0.4 million in interest and penalties related to unrecognized tax benefits.
+Added: If the Company were to prevail on all uncertain tax positions, it would not have a significant impact on the Company’s effective tax rate.
It is expected that any change in the amount of unrecognized tax benefit change within the next 12 months will not be significant.
9 unchanged sentences
EARNINGS PER SHARE
−Removed: A reconciliation of the weighted average shares used in the basic and diluted earnings per common share computations for the years ended December 31, 2021, 2020 and 2019 is presented below (in thousands):
+Added: A reconciliation of the weighted average shares used in the basic and diluted earnings per common share computations for the years ended December 31, 2022, 2021 and 2020 is presented below:
Weighted-average shares outstanding:
7 unchanged sentences
SEGMENT INFORMATION
−Removed: The Company has three operating and reportable segments:
−Removed: (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, and (iii) Other segment, which is comprised of the AFF Third-Party Products.
+Added: The Company has four operating and reportable segments:
+Added: (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.
8 unchanged sentences
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.
+Added: 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.
+Added: 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.
2 unchanged sentences
Strategic Brands
+Added: Alcohol Brands 2
Corporate and unallocated
2 unchanged sentences
Strategic Brands
+Added: Alcohol Brands 2
Corporate and unallocated
2 unchanged sentences
Strategic Brands
+Added: Alcohol Brands 2
Corporate and unallocated
(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.
+Added: (2) Effectively from February 17, 2022 to December 31, 2022 .
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
Depreciation and amortization:
1 unchanged sentence
Strategic Brands
+Added: Alcohol Brands
Corporate and unallocated
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
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.
7 unchanged sentences
Such sales were approximately 37 %, 37 % and 33 % of net sales for the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
Goodwill and other intangible assets for the Company’s reportable segments as of December 31, 2022 and 2021 are as follows:
2 unchanged sentences
Strategic Brands
+Added: Alcohol Brands
Corporate and unallocated
3 unchanged sentences
The Company also pays TCCC a commission based on certain sales within the TCCC distribution network.
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
TCCC commissions, based on sales to the TCCC Subsidiaries and the TCCC Related Parties, for the year ended December 31, 2022 were $ 49.3 million, and are included as a reduction to net sales.
9 unchanged sentences
Such contract manufacturing expenses were $ 30.6 million, $ 31.5 million and $ 17.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.
−Removed: Accounts receivable, accounts payable and accrued promotional allowances related to the TCCC Subsidiaries are as follows at:
+Added: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: Accounts receivable, accounts payable, accrued promotional allowances and accrued liabilities related to the TCCC Subsidiaries are as follows at:
Accounts receivable, net
2 unchanged sentences
Accrued liabilities
−Removed: In 2021, TCCC exercised its contract rights and began an examination in accordance with those rights for the years ended December 31, 2015 through December 31,2020.
One director of the Company through certain trusts, and a family member of one director are principal owners of a company that provides promotional materials to the Company.
Expenses incurred with such company in connection with promotional materials purchased during the years ended December 31, 2022, 2021 and 2020 were $ 6.0 million, $ 3.6 million and $ 2.1 million, respectively.
−Removed: MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: (Tabular Dollars in Thousands, Except Per Share Amounts)
+Added: During the year ended December 31, 2022, the Company occasionally chartered a private aircraft that is indirectly owned by Mr.
+Added: Sacks, Co-Chief Executive Officer and Chairman of the Board of Directors.
+Added: On certain occasions, Mr.
+Added: Sacks was accompanied by guests and other Company personnel when using such aircraft for business travel.
+Added: During the year ended December 31, 2022, the Company incurred costs of $ 0.08 million, amounts the Company believes are commensurate with market rates for comparable travel.
In December 2018, the Company and a director of the Company entered into a 50-50 partnership that purchased land, and real property thereon, in Kona, Hawaii for the purpose of producing coffee products.
−Removed: The Company’s initial 50 % contribution of $ 1.9 million was accounted for as an equity investment.
−Removed: During the year ended December 31, 2021, the Company recorded an equity loss of $ 0.2 million.
−Removed: As of December 31, 2021, the Company’s equity investment is $ 1.4 million and is included in other assets (non-current) in the accompanying consolidated balance sheet at December 31, 2021.
+Added: This partnership meets the definition of a Variable Interest Entity (“VIE”) for which the Company has determined that it is the primary beneficiary.
+Added: Therefore, the Company consolidates the VIE in the accompanying consolidated financial statements.
+Added: The aggregate carrying values of the VIE’s assets and liabilities, after elimination of any intercompany transactions and balances, as well as the results of operations for all periods presented, are not material to the Company’s consolidated financial statements.
SUBSEQUENT EVENTS
−Removed: On February 17, 2022, the Company completed its acquisition of CANarchy Craft Brewery Collective LLC (“CANarchy”), a craft beer and hard seltzer company, for $ 330.0 million in cash, subject to adjustments.
−Removed: The transaction allows us to enter the alcohol beverage sector and brings the Cigar City family of brands including Jai Alai IPA and Florida Man IPA, the Oskar Blues family of brands including Dale’s Pale Ale and Wild Basin Hard Seltzers, the Deep Ellum family of brands including Dallas Blonde and Deep Ellum IPA, the Perrin Brewing family of brands including Black Ale, the Squatters family of brands including Hop Rising Double IPA and Juicy IPA and the Wasatch family of brands including Apricot Hefeweizen to our beverage portfolio.
−Removed: The transaction does not include CANarchy’s stand-alone restaurants.
−Removed: The Company’s organizational structure for its existing energy beverage business will remain unchanged.
−Removed: CANarchy will function independently, retaining its own organizational structure and team.
+Added: On February 28, 2023, the Company announced that its Board of Directors has approved and declared a 2 -for-1 split of its common stock that will be effected in the form of a 100 % stock dividend.
+Added: Each stockholder of record on March 13, 2023 will receive a dividend of one additional share of common stock for each then-held share, to be distributed after close of trading on March 27, 2023.
+Added: The Company anticipates its common stock to begin trading at the split-adjusted price on March 28, 2023.
MONSTER BEVERAGE CORPORATION AND SUBSIDIARIES
4 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.