Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 16, 2023 | Jun. 30, 2022 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Transition Report | false | ||
Entity File Number | 001-18761 | ||
Entity Registrant Name | MONSTER BEVERAGE CORPORATION | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 47-1809393 | ||
Entity Address, Address Line One | 1 Monster Way | ||
Entity Address, City or Town | Corona | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92879 | ||
City Area Code | 951 | ||
Local Phone Number | 739 - 6200 | ||
Title of 12(b) Security | Common Stock, $0.005 par value per share | ||
Trading Symbol | MNST | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 44,291,170,358 | ||
Entity Common Stock, Shares Outstanding | 522,409,358 | ||
Entity Central Index Key | 0000865752 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | DELOITTE & TOUCHE LLP | ||
Auditor Firm ID | 34 | ||
Auditor Location | Costa Mesa, California |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 1,307,141 | $ 1,326,462 |
Short-term investments | 1,362,314 | 1,749,727 |
Accounts receivable, net | 1,016,203 | 896,658 |
Inventories | 935,631 | 593,357 |
Prepaid expenses and other current assets | 109,823 | 82,668 |
Prepaid income taxes | 33,785 | 33,238 |
Total current assets | 4,764,897 | 4,682,110 |
INVESTMENTS | 61,443 | 99,419 |
PROPERTY AND EQUIPMENT, net | 516,897 | 313,753 |
DEFERRED INCOME TAXES | 177,039 | 225,221 |
GOODWILL | 1,417,941 | 1,331,643 |
OTHER INTANGIBLE ASSETS, net | 1,220,410 | 1,072,386 |
OTHER ASSETS | 134,478 | 80,252 |
Total Assets | 8,293,105 | 7,804,784 |
CURRENT LIABILITIES: | ||
Accounts payable | 444,265 | 404,263 |
Accrued liabilities | 172,991 | 210,964 |
Accrued promotional allowances | 255,631 | 211,461 |
Deferred revenue | 43,311 | 42,530 |
Accrued compensation | 72,463 | 65,459 |
Income taxes payable | 13,317 | 30,399 |
Total current liabilities | 1,001,978 | 965,076 |
DEFERRED REVENUE | 223,800 | 243,249 |
OTHER LIABILITIES | 42,286 | 29,508 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY: | ||
Common stock - $0.005 par value; 1,250,000 shares authorized; 641,844 shares issued and 522,300 shares outstanding as of December 31, 2022; 640,043 shares issued and 529,323 shares outstanding as of December 31, 2021 | 3,209 | 3,200 |
Additional paid-in capital | 4,780,013 | 4,652,620 |
Retained earnings | 9,001,173 | 7,809,549 |
Accumulated other comprehensive loss | (159,073) | (69,165) |
Common stock in treasury, at cost; 119,544 shares and 110,720 shares as of December 31, 2022 and December 31, 2021, respectively | (6,600,281) | (5,829,253) |
Total stockholders' equity | 7,025,041 | 6,566,951 |
Total Liabilities and Stockholders' Equity | $ 8,293,105 | $ 7,804,784 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Common stock, par value (in dollars per share) | $ 0.005 | $ 0.005 |
Common stock, shares authorized | 1,250,000 | 1,250,000 |
Common stock, shares issued | 641,844 | 640,043 |
Common stock, shares outstanding | 522,300 | 529,323 |
Common stock in treasury, shares | 119,544 | 110,720 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF INCOME | |||
NET SALES | $ 6,311,050 | $ 5,541,352 | $ 4,598,638 |
COST OF SALES | 3,136,483 | 2,432,839 | 1,874,758 |
GROSS PROFIT | 3,174,567 | 3,108,513 | 2,723,880 |
OPERATING EXPENSES | 1,589,846 | 1,311,046 | 1,090,727 |
OPERATING INCOME | 1,584,721 | 1,797,467 | 1,633,153 |
OTHER (EXPENSE) INCOME , NET | (12,757) | 3,952 | (6,996) |
INCOME BEFORE PROVISION FOR INCOME TAXES | 1,571,964 | 1,801,419 | 1,626,157 |
PROVISION FOR INCOME TAXES | 380,340 | 423,944 | 216,563 |
NET INCOME | $ 1,191,624 | $ 1,377,475 | $ 1,409,594 |
NET INCOME PER COMMON SHARE: | |||
Basic | $ 2.26 | $ 2.61 | $ 2.66 |
Diluted | $ 2.23 | $ 2.57 | $ 2.64 |
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS: | |||
Basic | 526,779 | 528,763 | 529,639 |
Diluted | 533,221 | 535,639 | 534,807 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income, as reported | $ 1,191,624 | $ 1,377,475 | $ 1,409,594 |
Other comprehensive income (loss): | |||
Change in foreign currency translation adjustment, net of tax | (85,021) | (71,158) | 35,531 |
Available-for-sale investments: | |||
Change in net unrealized losses | (4,887) | (1,041) | (110) |
Net change in available-for-sale investments | (4,887) | (1,041) | (110) |
Other comprehensive income (loss) | (89,908) | (72,199) | 35,421 |
Comprehensive income | $ 1,101,716 | $ 1,305,276 | $ 1,445,015 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Total |
Balance at Dec. 31, 2019 | $ 3,182 | $ 4,397,511 | $ 5,022,480 | $ (32,387) | $ (5,219,505) | $ 4,171,281 |
Balance (in shares) at Dec. 31, 2019 | 636,460 | (99,762) | ||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||
Stock-based compensation | 67,546 | 67,546 | ||||
Exercise of stock options | $ 11 | 72,925 | 72,936 | |||
Exercise of stock options (in shares) | 2,202 | |||||
Unrealized loss on available-for-sale securities | (110) | (110) | ||||
Repurchase of common stock | $ (595,918) | (595,918) | ||||
Repurchase of common stock (in shares) | (10,803) | |||||
Foreign currency translation | 35,531 | 35,531 | ||||
Net income | 1,409,594 | 1,409,594 | ||||
Balance at Dec. 31, 2020 | $ 3,193 | 4,537,982 | 6,432,074 | 3,034 | $ (5,815,423) | 5,160,860 |
Balance (in shares) at Dec. 31, 2020 | 638,662 | (110,565) | ||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||
Stock-based compensation | 68,922 | 68,922 | ||||
Exercise of stock options | $ 7 | 45,716 | 45,723 | |||
Exercise of stock options (in shares) | 1,381 | |||||
Unrealized loss on available-for-sale securities | (1,041) | (1,041) | ||||
Repurchase of common stock | $ (13,830) | (13,830) | ||||
Repurchase of common stock (in shares) | (155) | |||||
Foreign currency translation | (71,158) | (71,158) | ||||
Net income | 1,377,475 | 1,377,475 | ||||
Balance at Dec. 31, 2021 | $ 3,200 | 4,652,620 | 7,809,549 | (69,165) | $ (5,829,253) | 6,566,951 |
Balance (in shares) at Dec. 31, 2021 | 640,043 | (110,720) | ||||
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | ||||||
Stock-based compensation | 63,387 | 63,387 | ||||
Exercise of stock options | $ 9 | 64,006 | 64,015 | |||
Exercise of stock options (in shares) | 1,801 | |||||
Unrealized loss on available-for-sale securities | (4,887) | (4,887) | ||||
Repurchase of common stock | $ (771,028) | (771,028) | ||||
Repurchase of common stock (in shares) | (8,824) | |||||
Foreign currency translation | (85,021) | (85,021) | ||||
Net income | 1,191,624 | 1,191,624 | ||||
Balance at Dec. 31, 2022 | $ 3,209 | $ 4,780,013 | $ 9,001,173 | $ (159,073) | $ (6,600,281) | $ 7,025,041 |
Balance (in shares) at Dec. 31, 2022 | 641,844 | (119,544) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 1,191,624 | $ 1,377,475 | $ 1,409,594 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 61,241 | 50,155 | 57,030 |
Non-cash lease expense | 7,337 | 4,107 | 3,943 |
Gain on disposal of property and equipment | (185) | (1,013) | (350) |
Loss on impairment of intangibles | 2,200 | 0 | 8,700 |
Stock-based compensation | 64,109 | 70,483 | 70,289 |
Deferred income taxes | 48,182 | 16,429 | (156,873) |
Effect on cash of changes in operating assets and liabilities net of acquisition: | |||
Accounts receivable | (128,981) | (254,228) | (119,672) |
Inventories | (347,712) | (277,793) | 30,304 |
Prepaid expenses and other assets | (38,268) | (29,341) | 1,024 |
Prepaid income taxes | (4,439) | (10,919) | 5,516 |
Accounts payable | 49,765 | 114,297 | 18,696 |
Accrued liabilities | (30,419) | 71,586 | 26,113 |
Accrued promotional allowances | 50,821 | 31,498 | 13,762 |
Accrued compensation | 3,729 | 7,950 | 7,501 |
Income taxes payable | (16,860) | 7,221 | 10,422 |
Other liabilities | (4,540) | 492 | (356) |
Deferred revenue | (19,905) | (22,658) | (21,480) |
Net cash provided by operating activities | 887,699 | 1,155,741 | 1,364,163 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Sales of available-for-sale investments | 2,252,355 | 1,488,599 | 920,196 |
Purchases of available-for-sale investments | (1,847,067) | (2,413,143) | (1,299,981) |
Acquisition of CANarchy, net of cash | (329,472) | ||
Purchases of property and equipment | (188,726) | (43,868) | (48,722) |
Proceeds from sale of property and equipment | 1,313 | 1,328 | 993 |
Additions to intangibles | (23,427) | (13,585) | (18,550) |
Increase in other assets | (26,343) | (11,353) | (26,423) |
Net cash used in investing activities | (161,367) | (992,022) | (472,487) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Borrowings (payments) on debt | 75 | 2,928 | (3,086) |
Issuance of common stock | 64,015 | 45,723 | 72,936 |
Purchases of common stock held in treasury | (771,028) | (13,830) | (595,918) |
Net cash (used in) provided by financing activities | (706,938) | 34,821 | (526,068) |
Effect of exchange rate changes on cash and cash equivalents | (38,715) | (52,491) | 16,848 |
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (19,321) | 146,049 | 382,456 |
CASH AND CASH EQUIVALENTS, beginning of year | 1,326,462 | 1,180,413 | 797,957 |
CASH AND CASH EQUIVALENTS, end of year | 1,307,141 | 1,326,462 | 1,180,413 |
Cash paid during the year for: | |||
Interest | 431 | 134 | 44 |
Income taxes | $ 379,998 | $ 420,521 | $ 355,509 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS - SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS | |||
Accrued liabilities for intangible assets | $ 9.4 | $ 14 | $ 9.8 |
Accounts payable for purchases of equipment | 2.9 | 0.6 | 0.6 |
Accounts receivable included sales of available-for-sale short-term investments | $ 15.2 | $ 0 | $ 0 |
ORGANIZATION AND SUMMARY OF SIG
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Nature of Operations 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 TM TM TM TM Basis of Presentation 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. See Note 9. Principles of Consolidation Business Combinations Cash and Cash Equivalents Investments Accounts Receivable – Inventories Property and Equipment three Goodwill 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. If the Company reasonably determines that it is more-likely-than-not that the fair value is less than the carrying value, the Company performs its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The Company will recognize an impairment for the amount by which the carrying amount exceeds a reporting unit’s fair value. For the years ended December 31, 2022, 2021 and 2020 there were no goodwill impairments recorded and there are no accumulated impairment balances. Other Intangibles TM 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. We regard our trademarks, service marks, copyrights, domain names, trade dress and other intellectual property as very important to our business. 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 Leases Long-Lived Assets using the present value of the future cash flows discounted at a rate commensurate with management’s estimates of the business risks. Preparation of estimated expected future cash flows is inherently subjective and is based on management’s best estimate of assumptions concerning expected future conditions. For the years ended December 31, 2022, 2021 and 2020, there were no impairment indicators identified. 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 Company has not designated its foreign currency exchange contracts as hedge transactions under FASB ASC 815. 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. 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 Cost of Sales Operating Expenses Freight-Out Costs Advertising and Promotional Expenses Income Taxes The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon the Company’s evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Stock-Based Compensation Net Income Per Common Share Concentration of Risk – The Coca-Cola Company (“TCCC”), through certain wholly-owned subsidiaries (the “TCCC Subsidiaries”), accounted for approximately 2% of the Company’s net sales for the years ended December 31, 2022, 2021 and 2020. 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. Credit Risk Fair Value of Financial Instruments Use of Estimates Recent Accounting Pronouncements – In October 2021, the FASB issued Accounting Standards Update (“ASU”) No. 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805)”. ASU No. 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU should be applied prospectively. Early adoption is also permitted, including adoption in an interim period. If early adopted, the amendments are applied retrospectively to all business combinations for which the acquisition date occurred during the fiscal year of adoption. The Company adopted ASU No. 2021-08 on January 1, 2023, which did not have a material impact on the Company’s financial position, results of operations and liquidity. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2022 | |
ACQUISITIONS | |
ACQUISITIONS | 2. ACQUISITIONS 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”). 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. The transaction did not include CANarchy’s stand-alone restaurants. The Company’s organizational structure for its existing energy beverage business remains unchanged. CANarchy is functioning independently, retaining its own organizational structure and team. The Company accounted for the CANarchy Transaction in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations”. The following table summarizes the final fair value allocations of the CANarchy Transaction: Identifiable Assets Acquired and Liabilities Consideration Assumed Transferred Intangibles - trademarks (non-amortizing) $ 89,500 $ — Intangibles - customer relationships (amortizing) 54,500 — Intangibles - permits (non-amortizing) 6,000 — Property and equipment 81,285 — Inventory 18,300 — Right-of-use assets 12,836 — Operating lease liabilities (12,836) — Working capital (excluding inventory) (5,640) — Other (770) — Goodwill 86,298 — Cash 3,248 332,721 Total $ 332,721 $ 332,721 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. The adjustments to the estimated values previously disclosed, resulted from the completed assessment of certain trademarks. As a result, Intangibles – trademarks (non-amortizing) decreased and Goodwill increased The Company determined the fair values as follows: ● Trademarks – relief-from-royalty method of the income approach ● Customer relationships – distributor method of the income approach ● Permits – with-and-without method of the income approach ● Property and equipment – cost approach ● Inventory – comparative sales method and replacement cost method The book value of the working capital (excluding inventory) approximates fair value due to the short-term nature of the accounts. 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. For tax purposes, the CANarchy Transaction was recorded as an asset purchase. As such, the Company received a step-up in tax basis of the CANarchy assets, net, equal to the purchase price. 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. On May 5, 2022, the Company acquired certain real property and equipment in Norwalk, California for a purchase price of $62.5 million. The acquisition was treated as an asset acquisition for accounting purposes. The fair value allocations include $50.6 million for land, $10.0 million for building and $1.9 million for equipment. The Company intends to utilize the property as a manufacturing facility for certain of its products. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 3. REVENUE RECOGNITION Revenues are accounted for in accordance with ASC 606 “Revenue from Contracts with Consumers”. The Company has four operating and reportable ® TM TM 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. 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. 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. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. Certain of the Company’s bottlers/distributors may also perform a separate function as a co-packer on the Company’s behalf. In such cases, control of the Company’s products passes to such bottlers/distributors when they notify the Company that they have taken possession or transferred the relevant portion of the Company’s finished goods. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. 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. Distribution expenses to transport the Company’s products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses. 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; ● 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; ● the Company’s agreed share of fees given to bottlers/distributors and/or directly to retailers for advertising, in-store marketing and promotional activities; ● the Company’s agreed share of slotting, shelf space allowances and other fees given directly to retailers, club stores and/or wholesalers; ● incentives given to the Company’s bottlers/distributors and/or retailers for achieving or exceeding certain predetermined sales goals; ● discounted or free products; ● contractual fees given to the Company’s bottlers/distributors related to sales made directly by the Company to certain customers that fall within the bottlers’/distributors’ sales territories; and ● 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”). 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. 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. 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. Promotional and other allowances for our Alcohol Brands segment primarily include price promotions where permitted. 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. 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. Management believes that adequate provision has been made for cash discounts, returns and spoilage based on the Company’s historical experience. Disaggregation of Revenue The following table disaggregates the Company’s revenue by geographical markets and reportable segments: Year Ended December 31, 2022 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 3,806,351 $ 1,105,302 $ 426,800 $ 494,758 $ 5,833,211 Strategic Brands 184,844 123,440 29,386 15,820 353,490 Alcohol Brands 2 101,405 — — — 101,405 Other 22,944 — — — 22,944 Total Net Sales $ 4,115,544 $ 1,228,742 $ 456,186 $ 510,578 $ 6,311,050 Year Ended December 31, 2021 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 3,455,704 $ 1,004,005 $ 446,023 $ 314,941 $ 5,220,673 Strategic Brands 158,390 99,423 26,811 10,138 294,762 Other 25,917 — — — 25,917 Total Net Sales $ 3,640,011 $ 1,103,428 $ 472,834 $ 325,079 $ 5,541,352 Year Ended December 31, 2020 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® $ 3,020,667 $ 675,045 $ 400,317 $ 209,217 $ 4,305,246 Strategic Brands 166,861 70,782 23,475 5,236 266,354 Other 27,038 — — — 27,038 Total Net Sales $ 3,214,566 $ 745,827 $ 423,792 $ 214,453 $ 4,598,638 1 Europe, Middle East and Africa (“EMEA”) 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. 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. See Note 11. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
LEASES | 4. LEASES 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. At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term, and (3) whether the Company has the right to direct the use of the asset. At inception of a lease, the Company allocates the consideration in the contract to each lease and non-lease component based on the component’s relative stand-alone price to determine the lease payments. Lease and non-lease components are accounted for separately. Leases are classified as either finance leases or operating leases based on criteria in ASC 842, “Leases”. The Company’s operating leases are comprised of real estate and warehouse equipment, and the Company’s finance leases are comprised of vehicles. Right-of-use (“ROU”) assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases generally do not provide an implicit rate, the Company uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. ROU assets also include any lease payments made and exclude lease incentives. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Certain of the Company’s real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at the lease 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. Lease expense for operating leases, consisting of lease payments, is recognized on a straight-line basis over the lease term and is included in operating expenses in the consolidated statement of income. 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. 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 extend options terminate The components of lease cost for the years ended December 31, 2022, 2021 and 2020 were as follows: 2022 2021 2020 Operating lease cost $ 8,641 $ 4,614 $ 4,637 Short-term lease cost 3,705 5,218 3,408 Variable lease cost 773 710 719 Finance leases: Amortization of ROU assets 545 546 626 Interest on lease liabilities 24 19 39 Finance lease cost 569 565 665 Total lease cost $ 13,688 $ 11,107 $ 9,429 Supplemental cash flow information for the years ended December 31, 2022, 2021 and 2020 were as follows: 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 8,164 $ 4,123 $ 3,982 Operating cash flows from finance leases 24 19 39 Financing cash flows from finance leases 2,091 2,698 3,086 ROU assets obtained in exchange for lease obligations: Finance leases 1,897 2,878 2,417 Operating leases 22,962 4,313 3,003 ROU assets for operating and finance leases recognized in the accompanying consolidated balance sheets were comprised of the following at: December 31, 2022 Real Estate Equipment Total Balance Sheet Location Operating leases $ 37,682 $ 330 $ 38,012 Other Assets Finance leases — 1,598 1,598 Property and Equipment, net December 31, 2021 Real Estate Equipment Total Balance Sheet Location Operating leases $ 22,518 $ 639 $ 23,157 Other Assets Finance leases — 2,646 2,646 Property and Equipment, net Operating and finance lease liabilities recognized in the consolidated balance sheets were as follows at: December 31, 2022 Operating Leases Finance Leases Accrued liabilities $ 7,747 $ 757 Other liabilities 29,586 41 Total $ 37,333 $ 798 December 31, 2021 Operating Leases Finance Leases Accrued liabilities $ 3,990 $ 960 Other liabilities 17,389 41 Total $ 21,379 $ 1,001 The weighted-average remaining lease terms and weighted-average discount rates for operating and finance leases were as follows at: December 31, 2022 Operating Leases Finance Leases Weighted-average remaining lease term (years) 6.7 0.8 Weighted-average discount rate 3.4 % 3.6 % December 31, 2021 Operating Leases Finance Leases Weighted-average remaining lease term (years) 8.1 0.7 Weighted-average discount rate 3.5 % 1.3 % 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: Undiscounted Future Lease Payments Operating Leases Finance Leases 2023 $ 8,854 $ 769 2024 7,324 23 2025 5,242 17 2026 4,182 2 2027 4,060 — 2028 and thereafter 12,349 — Total lease payments 42,011 811 Less imputed interest (4,678) (13) Total $ 37,333 $ 798 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. This operating lease will commence in 2023 with a term of four years. As of December 31, 2022, the Company did not have any significant additional finance leases that had not yet commenced. |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
INVESTMENTS | |
INVESTMENTS | 5. INVESTMENTS The following table summarizes the Company’s investments at: Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than December 31, 2022 Cost Gains Losses Value Months 12 Months Available-for-sale Short-term: Commercial paper $ 197,712 $ 1 $ 4 $ 197,709 $ 4 $ — Certificates of deposit 10,078 — — 10,078 — — Municipal securities 211,791 60 612 211,239 612 — U.S. government agency securities 109,697 3 715 108,985 715 — U.S. treasuries 838,825 17 4,539 834,303 4,539 — Long-term: U.S. government agency securities 2,016 — 3 2,013 3 — U.S. treasuries 53,215 20 71 53,164 71 — Variable rate demand notes 6,266 — — 6,266 — — Total $ 1,429,600 $ 101 $ 5,944 $ 1,423,757 $ 5,944 $ — Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than December 31, 2021 Cost Gains Losses Value Months 12 Months Available-for-sale Short-term: Commercial paper $ 334,077 $ — $ — $ 334,077 $ — $ — Certificates of deposit 44,502 — — 44,502 — — Municipal securities 666 — — 666 — — U.S. government agency securities 62,687 — 26 62,661 26 — U.S. treasuries 1,308,536 2 717 1,307,821 717 — Long-term: U.S. government agency securities 12,500 — 24 12,476 24 — U.S. treasuries 87,133 — 190 86,943 190 — Total $ 1,850,101 $ 2 $ 957 $ 1,849,146 $ 957 $ — During the years ended December 31, 2022, 2021 and 2020, realized gains or losses recognized on the sale of investments were not significant. The Company’s investments at December 31, 2022 and 2021 carried investment grade credit ratings. 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. All of the put options are secured by a pledged liquidity source. 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: December 31, 2022 December 31, 2021 Amortized Cost Fair Value Amortized Cost Fair Value Less than 1 year: Commercial paper $ 197,712 $ 197,710 $ 334,077 $ 334,077 Municipal securities 211,791 211,239 666 666 U.S. government agency securities 109,697 108,985 62,687 62,661 Certificates of deposit 10,078 10,078 44,502 44,502 U.S. treasuries 838,825 834,302 1,308,536 1,307,821 Due 1 - 10 years: U.S. treasuries 53,215 53,164 87,133 86,943 U.S. government agency securities 2,016 2,013 12,500 12,476 Variable rate demand notes 4,862 4,862 — — Due 11 - 20 years: Variable rate demand notes 1,404 1,404 — — Total $ 1,429,600 $ 1,423,757 $ 1,850,101 $ 1,849,146 |
FAIR VALUE OF CERTAIN FINANCIAL
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | |
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | 6. FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES ASC 820, “Fair Value Measurement”, provides a framework for measuring fair value and requires disclosures regarding fair value measurements. 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. ASC 820 also 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. ● Level 1: Quoted prices in active markets for identical assets or liabilities. ● Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. ● Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. 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: December 31, 2022 Level 1 Level 2 Level 3 Total Cash $ 1,132,509 $ — $ — $ 1,132,509 Money market funds 121,444 — — 121,444 Certificates of deposit — 10,078 — 10,078 Commercial paper — 225,067 — 225,067 Variable rate demand notes — 6,266 — 6,266 Municipal securities — 213,798 — 213,798 U.S. government agency securities — 113,357 — 113,357 U.S. treasuries — 908,379 — 908,379 Foreign currency derivatives — (3,733) — (3,733) Total $ 1,253,953 $ 1,473,212 $ — $ 2,727,165 Amounts included in: Cash and cash equivalents $ 1,253,953 $ 53,188 $ — $ 1,307,141 Short-term investments — 1,362,314 — 1,362,314 Accounts receivable, net — 965 — 965 Investments — 61,443 — 61,443 Accrued liabilities — (4,698) — (4,698) Total $ 1,253,953 $ 1,473,212 $ — $ 2,727,165 December 31, 2021 Level 1 Level 2 Level 3 Total Cash $ 749,089 $ — $ — $ 749,089 Money market funds 440,826 — — 440,826 Certificates of deposit — 44,502 — 44,502 Commercial paper — 335,477 — 335,477 Municipal securities — 2,428 — 2,428 U.S. government agency securities — 75,137 — 75,137 U.S. treasuries — 1,528,149 — 1,528,149 Foreign currency derivatives — (278) — (278) Total $ 1,189,915 $ 1,985,415 $ — $ 3,175,330 Amounts included in: Cash and cash equivalents $ 1,189,915 $ 136,547 $ — $ 1,326,462 Short-term investments — 1,749,727 — 1,749,727 Accounts receivable, net — 654 — 654 Investments — 99,419 — 99,419 Accrued liabilities — (932) — (932) Total $ 1,189,915 $ 1,985,415 $ — $ 3,175,330 All of the Company’s short-term and long-term investments are classified within Level 1 or Level 2 of the fair value hierarchy. The Company’s valuation of its Level 1 investments is based on quoted market prices in active markets for identical securities. The Company’s valuation of its Level 2 investments is based on other observable inputs, specifically a market approach which utilizes valuation models, pricing systems, mathematical tools and other relevant information for the same or similar securities. The Company’s valuation of its Level 2 foreign currency exchange contracts is based on quoted market prices of the same or similar instruments, adjusted for counterparty risk. There were no transfers between Level 1 and Level 2 measurements during the years ended December 31, 2022 and 2021, and there were no changes in the Company’s valuation techniques. |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 7 . DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to foreign currency exchange rate risks related primarily to its foreign business operations. 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. 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. The Company has not designated its foreign currency exchange contracts as hedge transactions under ASC 815, “Derivatives and Hedging”. 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. The notional amount and fair value of all outstanding foreign currency derivative instruments in the consolidated balance sheets consist of the following at: December 31, 2022 Derivatives not designated as hedging instruments under Notional Fair ASC 815 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive SGD/pay USD 15,883 398 Accounts receivable, net Receive CAD/pay USD 34,467 106 Accounts receivable, net Receive USD/pay MXN 12,430 88 Accounts receivable, net Receive USD/pay GBP 43,551 118 Accounts receivable, net Receive RSD/pay USD 3,513 112 Accounts receivable, net Receive GBP/pay USD 34,716 100 Accounts receivable, net Receive GBP/pay USD 4,321 31 Accounts receivable, net Receive USD/pay COP 11,570 12 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive USD/pay CLP $ 43,071 $ (2,549) Accrued liabilities Receive USD/pay EUR 40,592 (1,377) Accrued liabilities Receive USD/pay CNY 12,460 (362) Accrued liabilities Receive USD/pay EUR 34,714 (295) Accrued liabilities Receive USD/pay NZD 4,093 (91) Accrued liabilities Receive USD/pay AUD 1,271 (23) Accrued liabilities Receive USD/pay ZAR 3,124 (1) Accrued liabilities December 31, 2021 Derivatives not designated as hedging instruments under Notional Fair ASC 815 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive SGD/pay USD 16,544 297 Accounts receivable, net Receive USD/pay COP 9,754 296 Accounts receivable, net Receive RSD/pay USD 9,837 46 Accounts receivable, net Receive USD/pay RUB 7,175 15 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive USD/pay GBP $ 29,929 $ (666) Accrued liabilities Receive USD/pay AUD 2,602 (88) Accrued liabilities Receive USD/pay CNY 12,230 (74) Accrued liabilities Receive USD/pay NZD 2,693 (45) Accrued liabilities Receive USD/pay EUR 3,045 (29) Accrued liabilities Receive USD/pay ZAR 4,140 (21) Accrued liabilities Receive USD/pay DKK 1,461 (9) Accrued liabilities The net loss on derivative instruments in the consolidated statements of income was as follows: Amount of loss recognized in income on derivatives Derivatives not designated as Location of loss Year ended hedging instruments under recognized in income on December 31, December 31, December 31, ASC 815 derivatives 2022 2021 2020 Foreign currency exchange contracts Other (expense) income, net $ 6,893 $ 5,445 $ 3,317 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORIES | |
INVENTORIES | 8 . INVENTORIES Inventories consist of the following at December 31: 2022 2021 Raw materials $ 467,392 $ 349,865 Work in process 1,688 — Finished goods 466,551 243,492 $ 935,631 $ 593,357 |
PROPERTY AND EQUIPMENT, Net
PROPERTY AND EQUIPMENT, Net | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT, Net | |
PROPERTY AND EQUIPMENT, Net | 9. PROPERTY AND EQUIPMENT, Net Property and equipment consist of the following at December 31: 2022 2021 Land $ 139,798 $ 85,455 Leasehold improvements 31,327 11,795 Furniture and fixtures 9,286 8,274 Office and computer equipment 22,386 21,601 Computer software 5,906 7,409 Equipment 244,739 189,820 Buildings 163,885 148,971 Vehicles 49,175 45,088 Assets under construction 83,553 20,125 750,055 538,538 Less: accumulated depreciation and amortization (233,158) (224,785) $ 516,897 $ 313,753 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. Assets under construction are not depreciated until in service date. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 10. GOODWILL AND OTHER INTANGIBLE ASSETS The following is a roll-forward of goodwill for the years ended December 31, 2022 and 2021 by reportable segment: Monster Energy® Strategic Alcohol Drinks Brands Brands Other Total Balance at December 31, 2021 $ 693,644 $ 637,999 $ — $ — $ 1,331,643 Acquisitions — — 86,298 — 86,298 Balance at December 31, 2022 $ 693,644 $ 637,999 $ 86,298 $ — $ 1,417,941 Monster Energy® Strategic Alcohol Drinks Brands Brands Other Total Balance at December 31, 2020 $ 693,644 $ 637,999 $ — $ — $ 1,331,643 Acquisitions — — — — — Balance at December 31, 2021 $ 693,644 $ 637,999 $ — $ — $ 1,331,643 Intangible assets consist of the following at: December 31, December 31, 2022 2021 Amortizing intangibles $ 121,378 $ 66,872 Accumulated amortization (68,790) (61,227) 52,588 5,645 Non-amortizing intangibles 1,167,822 1,066,741 $ 1,220,410 $ 1,072,386 Amortizing intangibles primarily consist of customer relationships. 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 The following is the future estimated amortization expense related to amortizing intangibles as of December 31, 2022: Year Ending December 31: 2023 $ 4,745 2024 3,648 2025 3,647 2026 3,647 2027 3,647 2028 and thereafter 33,254 $ 52,588 At December 31, 2022, non-amortizing intangibles primarily consist of indefinite-lived tradenames, flavors and formulas. |
DISTRIBUTION AGREEMENTS
DISTRIBUTION AGREEMENTS | 12 Months Ended |
Dec. 31, 2022 | |
DISTRIBUTION AGREEMENTS | |
DISTRIBUTION AGREEMENTS | 11. DISTRIBUTION AGREEMENTS 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. The Company incurred no termination costs for the year ended December 31, 2022. 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. In the normal course of business, amounts received pursuant to new and/or amended distribution agreements entered into with certain bottlers/distributors, relating to the costs associated with terminating agreements with the Company’s prior distributors, are accounted for as deferred revenue and are recognized as revenue ratably over the anticipated life of the respective distribution agreement, generally 20 years. Revenue recognized was $21.4 million, $21.5 million and $21.4 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
DEBT | |
DEBT | 12. DEBT The Company entered into a credit facility with Comerica Bank (“Comerica”) consisting of a revolving line of credit, which was amended in April 2020, under which the Company may borrow up to $10.0 million of non-collateralized debt. The revolving line of credit is effective through June 1, 2025. Interest on borrowings under the line of credit is based on Comerica’s base (prime) rate minus 1.00% to 1.50%, or London Interbank Offered Rates plus an additional percentage of 1.25% to 1.75%, depending upon certain financial ratios maintained by the Company. The Company had no outstanding borrowings on this line of credit at December 31, 2022. Under this revolving line of credit, the Company may also issue standby Letters of Credit with an aggregate amount of up to $4.0 million. The fee on the standby Letters of Credit ranges from 1.00% to 1.50% depending upon certain financial ratios maintained by the Company. The Company had no outstanding standby Letters of Credit at December 31, 2022. The Company has a credit facility with HSBC Bank (China) Company Limited, Shanghai Branch, of $15.0 million. At December 31, 2022, the interest rate on borrowings under the line of credit was 5.5%. As of December 31, 2022, $7.8 million was outstanding on this line of credit. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 13. COMMITMENTS AND CONTINGENCIES Contractual Obligations Year Ending December 31: 2023 $ 239,350 2024 51,162 2025 14,153 2026 9,586 2027 — 2028 and thereafter — $ 314,251 Purchase Commitments 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. The aggregate value of purchases from suppliers of such limited resources described above for the years ended December 31, 2022, 2021 and 2020 was $666.1 million, $698.0 million and $401.8 million, respectively. Guarantees Litigation 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. As of December 31, 2022 and 2021, no loss contingencies were included in the Company’s accompanying consolidated balance sheets. On September 29, 2022, a jury in the U.S. 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. (“VPX”), the maker of Bang Energy. 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. The jury also found that VPX stole trade secrets and interfered with MEC’s contracts over shelf space with certain key vendors. 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. In April 2022, MEC and Orange Bang, Inc. (“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. 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. The arbitration arose from a settlement agreement that VPX entered into in 2010 with Orange Bang, a family-owned beverage business. 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. On September 29, 2022, the District Court entered final judgment confirming the award. On October 28, 2022, VPX filed a notice of appeal of the District Court’s final judgment confirming the award. 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. Due to such ongoing proceedings, VPX’s appeal of the District Court’s final judgment confirming the final arbitration award is stayed. 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. 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. 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. 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. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE LOSS | 12 Months Ended |
Dec. 31, 2022 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | 14. ACCUMULATED OTHER COMPREHENSIVE LOSS The components of accumulated other comprehensive loss are as follows at December 31: 2022 2021 Accumulated net unrealized loss on available-for-sale securities $ (5,843) $ (956) Foreign currency translation adjustments, net of tax (153,230) (68,209) Total accumulated other comprehensive loss $ (159,073) $ (69,165) |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 16. STOCK-BASED COMPENSATION The Company has two stock-based compensation plans under which shares were available for grant at December 31, 2022: (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”). 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. Shares authorized under the 2020 Omnibus Incentive Plan are reduced by one (1) share for options or stock appreciation rights granted under the 2020 Omnibus Incentive Plan and for any grants after December 31, 2019 under the 2011 Omnibus Incentive Plan, and by 2.6 shares for each share granted or issued with respect to a Full Value Award under either the 2020 Omnibus Incentive Plan or for any shares granted after December 31, 2019 under the 2011 Omnibus Incentive Plan. A “Full Value Award” is an award other than an incentive stock option, a non-qualified stock option, or a stock appreciation right, which is settled by the issuance of shares. 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. 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. As of December 31, 2022, 5,696,341 shares of the Company’s common stock have been granted, net of cancellations, and 38,873,388 shares (as adjusted for Full Value Awards) of the Company’s common stock remain available for grant under the 2020 Omnibus Incentive Plan. The Compensation Committee of the Board of Directors (the “Compensation Committee”) has sole and exclusive authority to grant stock awards to all employees who are not new hires and to all new hires who are subject to Section 16 of the Exchange Act (“Section 16”). Each of the Compensation Committee and the Executive Committee of the Board of Directors (the “Executive Committee”) independently has the authority to grant stock awards to (i) new hires and (ii) employees receiving a promotion, in each case, who are not Section 16 employees. Awards granted by the Executive Committee are not subject to approval or ratification by the Board of Directors or the Compensation Committee. Options granted under the 2020 Omnibus Incentive Plan generally vest over a three three In 2016, the Company adopted the Deferred Compensation Plan (as a sub plan to the 2011 Omnibus Incentive Plan), pursuant to which eligible employees may elect to defer cash and/or equity based compensation and to receive the deferred amounts, together with an investment return (positive or negative), either at a pre-determined time in the future or upon termination of their employment with the Company or its subsidiaries or affiliates that are participating employers under the Deferred Compensation Plan, as provided under the Deferred Compensation Plan and in relevant deferral elections. Deferrals under the Deferred Compensation Plan are unfunded and unsecured. As of December 31, 2022 deferrals under the Deferred Compensation Plan are solely comprised of cash compensation and equity compensation and are not material in the aggregate. In 2017, the Company adopted the 2017 Directors Plan, a successor plan to the 2009 Monster Beverage Corporation Stock Incentive Plan for Non-Employee Directors. 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. 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. 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. 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: (a) the last business day immediately preceding the annual meeting of the Company’s stockholders in the calendar year following the calendar year in which the grant date occurs, (b) a Change of Control (as defined in the 2017 Directors Plan), (c) the non-employee director’s death, or (d) the date of the non-employee director’s separation from service due to disability, so long as the non-employee director remains a non-employee director through such date. The Board of Directors may in its discretion award non-employee directors stock options, stock appreciation rights, restricted stock and other share-based awards in lieu of or in addition to restricted stock units. The Board of Directors may amend or terminate the 2017 Directors Plan at any time, subject to certain limitations set forth in the 2017 Directors Plan. 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. 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. Deferrals under the Deferred Compensation Plan for Non-Employee Directors are unfunded and unsecured. As of December 31, 2021, deferrals under the Deferred Compensation Plan for Non-Employee Directors are solely comprised of cash compensation and equity compensation and are not material in the aggregate. The 2017 Directors Plan was adopted to effectuate any such deferrals. The 2017 Directors Plan is administered by the Board of Directors. 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. 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: ● Hold shares of Company common stock having a total value of five times the annual retainer payable to a non-employee director (excluding any portion of the annual retainer attributable to a non-employee director’s service as a member of a subcommittee, as a chair of a subcommittee or as the lead independent director, as applicable). For this purpose, deferred shares or deferred restricted stock units will be deemed held, to the extent vested. ● The minimum stock ownership level must be achieved by each non-employee director by the fifth anniversary of such non-employee director’s initial appointment to the Board of Directors. ● Once achieved, ownership of the guideline amount should be maintained for so long as the non-employee director retains his or her seat on the Board of Directors. ● There may be rare instances where these guidelines would place a hardship on a non-employee director. In these cases or in similar circumstances, the Board of Directors will make the final decision as to developing an alternative stock ownership guideline for a non-employee director that reflects the intention of these guidelines and his or her personal circumstances. 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. 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. Stock Options Under the Company’s stock-based compensation plans, all stock options granted through December 31, 2022 were granted at prices based on the fair value of the Company’s common stock on the date of grant. 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. 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. The Company uses historical data to determine the exercise behavior, volatility and forfeiture rate of the options. The following weighted-average assumptions were used to estimate the fair value of options granted during: 2022 2021 2020 Dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 27.7 % 28.9 % 30.4 % Risk-free interest rate 2.15 % 0.85 % 0.70 % Expected term 6.1 Years 5.8 Years 5.8 Years Expected Volatility Risk-Free Interest Rate Expected Term The following table summarizes the Company’s activities with respect to its stock option plans as follows: Weighted- Weighted- Average Average Remaining Number of Exercise Contractual Aggregate Shares Price Per Term (in Intrinsic Options (in thousands) Share years) Value Outstanding at January 1, 2022 13,860 $ 48.19 5.1 $ 663,148 Granted 01/01/22 - 03/31/22 2,489 $ 73.96 Granted 04/01/22 - 06/30/22 8 $ 88.05 Granted 07/01/22 - 09/30/22 34 $ 95.72 Granted 10/01/22 - 12/31/22 32 $ 91.10 Exercised (1,411) $ 45.37 Cancelled or forfeited (157) $ 72.15 Outstanding at December 31, 2022 14,855 $ 52.75 5.0 $ 724,651 Vested and expected to vest in the future at December 31, 2022 14,509 $ 52.22 4.9 $ 715,462 Exercisable at December 31, 2022 9,764 $ 42.81 3.4 $ 573,325 The following table summarizes information about stock options outstanding and exercisable at December 31, 2022: Options Outstanding Options Exercisable Weighted Average Remaining Weighted Number Weighted Number Contractual Average Exercisable Average Range of Exercise Outstanding Term Exercise (In Exercise Prices ($) (In Thousands) (Years) Price ($) Thousands) Price ($) $ 15.71 - $ 36.05 2,768 0.8 $ 20.75 2,768 $ 20.75 $ 37.10 - $ 43.99 1,751 3.3 $ 43.43 1,751 $ 43.43 $ 44.92 - $ 46.27 2,189 3.2 $ 45.60 2,189 $ 45.60 $ 48.11 - $ 57.95 529 5.5 $ 53.29 313 $ 52.96 $ 58.73 - $ 58.73 1,818 5.2 $ 58.73 1,310 $ 58.73 $ 58.77 - $ 62.39 2,247 6.6 $ 60.80 1,252 $ 60.53 $ 62.92 - $ 67.42 43 6.1 $ 64.19 26 $ 63.46 $ 73.23 - $ 73.23 2,263 9.2 $ 73.23 — $ — $ 77.92 - $ 97.80 1,237 8.4 $ 88.32 155 $ 89.02 $ 98.49 - $ 98.49 10 9.6 $ 98.49 — $ — 14,855 5.0 $ 52.75 9,764 $ 42.81 The weighted-average grant-date fair value of options granted during the years ended December 31, 2022, 2021 and 2020 was $23.47 per share, $25.80 per share and $18.82 per share, respectively. The total intrinsic value of options exercised during the years ended December 31, 2022, 2021 and 2020 was $68.2 million, $51.2 million and $68.8 million, respectively. 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. 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. That cost is expected to be recognized over a weighted-average period of 2.7 years. Restricted Stock Units and Performance Share Units The cost of stock-based compensation for restricted stock units and performance share units is measured based on the closing fair market value of the Company’s common stock at the date of grant. 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. The following table summarizes the Company’s activities with respect to non-vested restricted stock units and performance share units as follows: Weighted Number of Average Shares (in Grant-Date thousands) Fair Value Non-vested at January 1, 2022 910 $ 69.02 Granted 01/01/22 - 03/31/22 1 484 $ 71.88 Granted 04/01/22 - 06/30/22 15 $ 87.52 Granted 07/01/22 - 09/30/22 6 $ 95.17 Granted 10/01/22 - 12/31/22 1 $ 90.29 Vested (389) $ 64.59 Forfeited/cancelled (14) $ 68.27 Non-vested at December 31, 2022 1,013 $ 72.54 1 The grant activity for performance share units is recorded based on the target performance level earning 100% of target performance share units. 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. As of December 31, 2022, 1.0 million of restricted stock units and performance share units are expected to vest. At December 31, 2022, total unrecognized compensation expense relating to non-vested restricted stock units and performance share units was $36.7 million, which is expected to be recognized over a weighted-average period of 1.7 years. Other Share-Based Awards The Company has granted other share-based awards to certain employees that are payable in cash. These awards are classified as liabilities and are valued based on the fair value of the award at the grant date and are remeasured at each reporting date until settlement, with compensation expense being recognized in proportion to the completed requisite service period up until date of settlement. 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. 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. 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. 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. 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. 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. 2022 2021 2020 Operating expenses $ 64,109 $ 70,483 $ 70,289 Total employee and non-employee share-based compensation expense included in income, before income tax 64,109 70,483 70,289 Less: Amount of income tax benefit recognized in earnings (13,175) (14,228) (15,499) Amount charged against net income $ 50,934 $ 56,255 $ 54,790 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | 17. INCOME TAXES The Company evaluated the various provisions of the Tax Reform Act, including, the global intangible low-taxed income (“GILTI”) and the foreign derived intangible income provisions. The Company will treat any U.S. tax on foreign earnings under GILTI as a current period expense when incurred. The Company currently considers the earnings of its foreign entities (excluding Japan) to be permanently reinvested outside the United States based on estimates that future domestic cash generation will be sufficient to meet future domestic cash needs. Accordingly, deferred income taxes have not been recorded for the undistributed earnings of the Company’s foreign subsidiaries excluding Japan. Deferred income taxes have not been recorded for Japan, as any federal, state, or foreign withholding taxes associated with the repatriation of those earnings would be immaterial. The domestic and foreign components of the Company’s income before provision for income taxes are as follows: Year Ended December 31, 2022 2021 2020 Domestic* $ 1,327,459 $ 1,431,797 $ 1,374,402 Foreign* 244,505 369,622 251,755 Income before provision for income taxes $ 1,571,964 $ 1,801,419 $ 1,626,157 *After intercompany royalties, management fees and interest charges from the Company’s domestic to foreign entities of $85.0 million, $61.1 million and $54.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. Components of the provision for income taxes are as follows: Year Ended December 31, 2022 2021 2020 Current: Federal $ 247,482 $ 273,115 $ 259,073 State 47,255 44,990 43,704 Foreign 37,421 89,410 70,658 332,158 407,515 373,435 Deferred: Federal 19,111 14,750 11,401 State 258 4,689 4,709 Foreign 26,084 5,092 (167,595) 45,453 24,531 (151,485) Valuation allowance 2,729 (8,102) (5,387) $ 380,340 $ 423,944 $ 216,563 A reconciliation of the total provision for income taxes after applying the U.S. federal statutory rate of 21% to income before provision for income taxes to the reported provision for income taxes are as follows for the years ended: Year Ended December 31, 2022 2021 2020 U.S. Federal tax expense at statutory rates $ 330,113 $ 378,298 $ 341,493 State income taxes, net of federal tax benefit 35,848 38,894 37,478 Permanent differences (5,450) (4,168) (1,064) Stock based compensation 3,571 2,790 1,097 Intra-company transfer benefit — — (165,075) Other 1,371 (649) (7,388) Foreign rate differential 12,158 16,881 15,409 Valuation allowance 2,729 (8,102) (5,387) $ 380,340 $ 423,944 $ 216,563 Major components of the Company’s deferred tax assets (liabilities) at December 31, 2022 and 2021 are as follows: 2022 2021 Deferred Tax Assets: Reserve for sales returns $ 2,262 $ 889 Reserve for inventory obsolescence 4,651 3,643 Reserve for marketing development fund 7,487 8,951 Capitalization of inventory costs 6,537 2,533 State franchise tax - current 2,339 2,493 Accrued compensation 10,499 2,854 Accrued other liabilities 1,820 4,634 Deferred revenue 63,196 68,557 Stock-based compensation 25,526 24,635 Foreign net operating loss carryforward 19,896 14,507 Prepaid supplies 7,901 6,317 Termination payments 52,466 58,042 Operating lease liabilities 5,739 4,711 Intangibles 33,603 72,666 Impairment-trademarks and others 2,567 2,047 Other deferred tax assets 33,209 33,013 Total gross deferred tax assets $ 279,698 $ 310,492 Deferred Tax Liabilities: Amortization of trademarks $ (39,237) $ (41,517) State franchise tax - deferred (5,503) (5,505) Operating lease ROU assets (5,739) (4,711) Other deferred tax liabilities (5) (618) Depreciation (22,433) (5,907) Total gross deferred tax liabilities (72,917) (58,258) Valuation Allowance (29,742) (27,013) Net deferred tax assets $ 177,039 $ 225,221 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. 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. Of this amount, $78.8 million may be carried forward indefinitely. The remaining $13.3 million of net operating loss carryforwards will begin to expire in 2023. In October 2020, the Company completed an intra-entity transfer of intangible assets between certain of the Company’s foreign subsidiaries to better align its international structure with its expanding operations. The transfer resulted in a step-up of the tax-deductible basis in the transferred assets in a foreign jurisdiction, and created a temporary difference between the tax basis and book basis for such intangible assets. The Company recognized deferred tax assets of approximately $165.1 million, with a corresponding reduction to the provision for income taxes during the fourth quarter of 2020 in its consolidated financial statements. The tax deductions for the amortization of the deferred tax assets will be recognized in the future and any amortization not deducted for tax purposes will be carried forward indefinitely. The tax impact on the foreign subsidiary transferor was not material. The following is a roll-forward of the Company’s total gross unrecognized tax benefits, not including interest and penalties, for the years ended December 31, 2022, 2021 and 2020: Gross Unrecognized Tax Benefits Balance at December 31, 2019 $ 2,993 Additions for tax positions related to the current year — Additions for tax positions related to the prior year — Decreases for tax positions related to prior years (2,251) Balance at December 31, 2020 $ 742 Additions for tax positions related to the current year — Additions for tax positions related to the prior year — Decreases for tax positions related to prior years (742) Balance at December 31, 2021 $ — Additions for tax positions related to the current year — Additions for tax positions related to the prior year 3,020 Decreases for tax positions related to prior years — Balance at December 31, 2022 $ 3,020 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. As of December 31, 2022, the Company had accrued approximately $0.4 million in interest and penalties related to unrecognized tax benefits. 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. The Company is subject to U.S. federal income tax as well as to income tax in multiple state and foreign jurisdictions. The Company is in various stages of examination with certain states and certain foreign jurisdictions, including the United Kingdom and Ireland. The Company’s 2019 through 2021 U.S. federal income tax returns are subject to examination by the IRS. The Company’s state income tax returns are subject to examination for the 2018 through 2021 tax years. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 18. EARNINGS PER SHARE 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: 2022 2021 2020 Weighted-average shares outstanding: Basic 526,779 528,763 529,639 Dilutive securities 6,442 6,876 5,168 Diluted 533,221 535,639 534,807 For the years ended December 31, 2022, 2021 and 2020, options and awards outstanding totaling 3.0 million shares, 0.8 million shares and 1.8 million shares, respectively, were excluded from the calculations as their effect would have been antidilutive. |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2022 | |
EMPLOYEE BENEFIT PLAN | |
EMPLOYEE BENEFIT PLAN | 19. EMPLOYEE BENEFIT PLAN Employees of the Company may participate in the Monster Beverage Corporation 401(k) Plan, a defined contribution plan, which qualifies under Section 401(k) of the Internal Revenue Code. Participating employees may contribute into a traditional plan with pretax salary or into a Roth plan with after tax salary up to statutory limits. The Company contributes 50% of the employee contribution, up to 8% of each employee’s earnings, which vest over four years (2 years of service = 50%, 3 years of service = 75%, 4 years of service = 100%). Matching contributions were $6.9 million, $5.5 million and $4.7 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | 20. SEGMENT INFORMATION The Company has four operating and reportable ® TM TM 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® Drinks 1 $ 5,833,211 $ 5,220,673 $ 4,305,246 Strategic Brands 353,490 294,762 266,354 Alcohol Brands 2 101,405 — — 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® Drinks 1 $ 1,850,053 $ 1,990,785 $ 1,820,346 Strategic Brands 197,709 173,660 155,047 Alcohol Brands 2 (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® Drinks 1 $ 1,853,011 $ 1,992,185 $ 1,820,625 Strategic Brands 197,843 173,739 155,047 Alcohol Brands 2 (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 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | 21. RELATED PARTY TRANSACTIONS TCCC controls approximately 19.6% of the voting interests of the Company. The TCCC Subsidiaries, the TCCC Related Parties and certain TCCC independent bottlers, purchase and distribute the Company’s products in domestic and certain international markets. The Company also pays TCCC a commission based on certain sales within the TCCC distribution network. 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. TCCC commissions, based on sales to the TCCC Independent Bottlers for the year ended December 31, 2022 were $30.7 million, and are included in operating expenses in the consolidated statements of income. TCCC commissions, based on sales to the TCCC Subsidiaries and the TCCC Related Parties, for the year ended December 31, 2021 were $77.5 million, and are included as a reduction to net sales. TCCC commissions, based on sales to the TCCC Independent Bottlers for the year ended December 31, 2021 were $28.7 million, and are included in operating expenses in the consolidated statements of income. TCCC commissions, based on sales to the TCCC Subsidiaries and the TCCC Related Parties, for the year ended December 31, 2020 were $56.5 million, and are included as a reduction to net sales. TCCC commissions, based on sales to the TCCC Independent Bottlers for the year ended December 31, 2020 were $21.4 million, and are included in operating expenses in the consolidated statements of income. Net sales to the TCCC Subsidiaries for the years ended December 31, 2022, 2021 and 2020 were $129.4 million, $120.4 million and $83.3 million, respectively. The Company also purchases concentrates from TCCC which are then sold to certain of the Company’s bottlers/distributors. Concentrate purchases from TCCC were $27.1 million, $27.2 million and $23.9 million for the years ended December 31, 2022, 2021 and 2020, respectively. Certain TCCC Subsidiaries also contract manufacture certain of the Company’s energy drinks. 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. Accounts receivable, accounts payable, accrued promotional allowances and accrued liabilities related to the TCCC Subsidiaries are as follows at: December 31, December 31, 2022 2021 Accounts receivable, net $ 88,169 $ 94,647 Accounts payable $ (35,467) $ (35,248) Accrued promotional allowances $ (11,222) $ (4,536) Accrued liabilities $ (14,733) $ (26,616) 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. During the year ended December 31, 2022, the Company occasionally chartered a private aircraft that is indirectly owned by Mr. Rodney C. Sacks, Co-Chief Executive Officer and Chairman of the Board of Directors. On certain occasions, Mr. Sacks was accompanied by guests and other Company personnel when using such aircraft for business travel. 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. This partnership meets the definition of a Variable Interest Entity (“VIE”) for which the Company has determined that it is the primary beneficiary. Therefore, the Company consolidates the VIE in the accompanying consolidated financial statements. 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
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2022 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 22. SUBSEQUENT EVENTS 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. 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. The Company anticipates its common stock to begin trading at the split-adjusted price on March 28, 2023. |
SCHEDULE II - VALUATION AND QUA
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | 12 Months Ended |
Dec. 31, 2022 | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | |
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS | Balance at Charged to Balance at beginning cost and end of Description of period expenses Deductions period Allowance for doubtful accounts, sales returns and cash discounts: 2022 $ 4,676 $ 23,177 $ (17,393) $ 10,460 2021 $ 1,878 $ 14,799 $ (12,001) $ 4,676 2020 $ 2,045 $ 9,664 $ (9,831) $ 1,878 Allowance on Deferred Tax Assets and Unrecognized Tax Benefits: 2022 $ 27,013 $ 6,153 $ — $ 33,166 2021 $ 35,993 $ (8,980) $ — $ 27,013 2020 $ 43,853 $ (7,860) $ — $ 35,993 |
ORGANIZATION AND SUMMARY OF S_2
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation 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. See Note 9. |
Principles of Consolidation | Principles of Consolidation |
Business Combinations | Business Combinations |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Investments | Investments |
Accounts Receivable | Accounts Receivable – |
Inventories | Inventories |
Property and Equipment | Property and Equipment three |
Goodwill | Goodwill 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. If the Company reasonably determines that it is more-likely-than-not that the fair value is less than the carrying value, the Company performs its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The Company will recognize an impairment for the amount by which the carrying amount exceeds a reporting unit’s fair value. For the years ended December 31, 2022, 2021 and 2020 there were no goodwill impairments recorded and there are no accumulated impairment balances. |
Other Intangibles | Other Intangibles TM 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. We regard our trademarks, service marks, copyrights, domain names, trade dress and other intellectual property as very important to our business. 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 |
Leases | 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. At the inception of a contract, the Company assesses whether the contract is, or contains, a lease. The Company’s assessment is based on: (1) whether the contract involves the use of a distinct identified asset, (2) whether the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term, and (3) whether the Company has the right to direct the use of the asset. At inception of a lease, the Company allocates the consideration in the contract to each lease and non-lease component based on the component’s relative stand-alone price to determine the lease payments. Lease and non-lease components are accounted for separately. Leases are classified as either finance leases or operating leases based on criteria in ASC 842, “Leases”. The Company’s operating leases are comprised of real estate and warehouse equipment, and the Company’s finance leases are comprised of vehicles. Right-of-use (“ROU”) assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases generally do not provide an implicit rate, the Company uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. ROU assets also include any lease payments made and exclude lease incentives. Lease terms include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Certain of the Company’s real estate leases contain variable lease payments, including payments based on an index or rate. Variable lease payments based on an index or rate are initially measured using the index or rate in effect at the lease 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. Lease expense for operating leases, consisting of lease payments, is recognized on a straight-line basis over the lease term and is included in operating expenses in the consolidated statement of income. 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. 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 extend options terminate |
Long-Lived Assets | Long-Lived Assets using the present value of the future cash flows discounted at a rate commensurate with management’s estimates of the business risks. Preparation of estimated expected future cash flows is inherently subjective and is based on management’s best estimate of assumptions concerning expected future conditions. For the years ended December 31, 2022, 2021 and 2020, there were no impairment indicators identified. 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 | Foreign Currency Translation and Transactions The Company has not designated its foreign currency exchange contracts as hedge transactions under FASB ASC 815. 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. 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 | 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. 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. 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. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. Certain of the Company’s bottlers/distributors may also perform a separate function as a co-packer on the Company’s behalf. In such cases, control of the Company’s products passes to such bottlers/distributors when they notify the Company that they have taken possession or transferred the relevant portion of the Company’s finished goods. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. 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. Distribution expenses to transport the Company’s products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses. 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; ● 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; ● the Company’s agreed share of fees given to bottlers/distributors and/or directly to retailers for advertising, in-store marketing and promotional activities; ● the Company’s agreed share of slotting, shelf space allowances and other fees given directly to retailers, club stores and/or wholesalers; ● incentives given to the Company’s bottlers/distributors and/or retailers for achieving or exceeding certain predetermined sales goals; ● discounted or free products; ● contractual fees given to the Company’s bottlers/distributors related to sales made directly by the Company to certain customers that fall within the bottlers’/distributors’ sales territories; and ● 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”). 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. 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. 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. Promotional and other allowances for our Alcohol Brands segment primarily include price promotions where permitted. 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. 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. Management believes that adequate provision has been made for cash discounts, returns and spoilage based on the Company’s historical experience. |
Cost of Sales | Cost of Sales |
Operating Expenses | Operating Expenses |
Freight-Out Costs | Freight-Out Costs |
Advertising and Promotional Expenses | Advertising and Promotional Expenses |
Income Taxes | Income Taxes The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon the Company’s evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. |
Stock-Based Compensation | Stock-Based Compensation |
Net Income Per Common Share | Net Income Per Common Share |
Concentration of Risk | Concentration of Risk – The Coca-Cola Company (“TCCC”), through certain wholly-owned subsidiaries (the “TCCC Subsidiaries”), accounted for approximately 2% of the Company’s net sales for the years ended December 31, 2022, 2021 and 2020. 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. |
Credit Risk | Credit Risk |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
Use of Estimates | Use of Estimates |
Recent Accounting Pronouncements | Recent Accounting Pronouncements – In October 2021, the FASB issued Accounting Standards Update (“ASU”) No. 2021-08, “Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (Topic 805)”. ASU No. 2021-08 requires an acquirer in a business combination to recognize and measure contract assets and contract liabilities (deferred revenue) from acquired contracts using the revenue recognition guidance in Topic 606. At the acquisition date, the acquirer applies the revenue model as if it had originated the acquired contracts. The ASU is effective for annual periods beginning after December 15, 2022, including interim periods within those fiscal years. Adoption of the ASU should be applied prospectively. Early adoption is also permitted, including adoption in an interim period. If early adopted, the amendments are applied retrospectively to all business combinations for which the acquisition date occurred during the fiscal year of adoption. The Company adopted ASU No. 2021-08 on January 1, 2023, which did not have a material impact on the Company’s financial position, results of operations and liquidity. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACQUISITIONS | |
Summary the fair value allocations of the CANarchy Transaction | Identifiable Assets Acquired and Liabilities Consideration Assumed Transferred Intangibles - trademarks (non-amortizing) $ 89,500 $ — Intangibles - customer relationships (amortizing) 54,500 — Intangibles - permits (non-amortizing) 6,000 — Property and equipment 81,285 — Inventory 18,300 — Right-of-use assets 12,836 — Operating lease liabilities (12,836) — Working capital (excluding inventory) (5,640) — Other (770) — Goodwill 86,298 — Cash 3,248 332,721 Total $ 332,721 $ 332,721 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE RECOGNITION | |
Schedule of disaggregation of revenue by geographical markets | Year Ended December 31, 2022 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 3,806,351 $ 1,105,302 $ 426,800 $ 494,758 $ 5,833,211 Strategic Brands 184,844 123,440 29,386 15,820 353,490 Alcohol Brands 2 101,405 — — — 101,405 Other 22,944 — — — 22,944 Total Net Sales $ 4,115,544 $ 1,228,742 $ 456,186 $ 510,578 $ 6,311,050 Year Ended December 31, 2021 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® Drinks $ 3,455,704 $ 1,004,005 $ 446,023 $ 314,941 $ 5,220,673 Strategic Brands 158,390 99,423 26,811 10,138 294,762 Other 25,917 — — — 25,917 Total Net Sales $ 3,640,011 $ 1,103,428 $ 472,834 $ 325,079 $ 5,541,352 Year Ended December 31, 2020 Latin America U.S. and and Net Sales Canada EMEA 1 Asia Pacific Caribbean Total Monster Energy® $ 3,020,667 $ 675,045 $ 400,317 $ 209,217 $ 4,305,246 Strategic Brands 166,861 70,782 23,475 5,236 266,354 Other 27,038 — — — 27,038 Total Net Sales $ 3,214,566 $ 745,827 $ 423,792 $ 214,453 $ 4,598,638 1 Europe, Middle East and Africa (“EMEA”) 2 Effectively from February 17, 2022 to December 31, 2022 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Schedule of lease cost | 2022 2021 2020 Operating lease cost $ 8,641 $ 4,614 $ 4,637 Short-term lease cost 3,705 5,218 3,408 Variable lease cost 773 710 719 Finance leases: Amortization of ROU assets 545 546 626 Interest on lease liabilities 24 19 39 Finance lease cost 569 565 665 Total lease cost $ 13,688 $ 11,107 $ 9,429 |
Schedule of supplemental cash flow information for leases | 2022 2021 2020 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 8,164 $ 4,123 $ 3,982 Operating cash flows from finance leases 24 19 39 Financing cash flows from finance leases 2,091 2,698 3,086 ROU assets obtained in exchange for lease obligations: Finance leases 1,897 2,878 2,417 Operating leases 22,962 4,313 3,003 |
Schedule of ROU assets for operating and finance leases | December 31, 2022 Real Estate Equipment Total Balance Sheet Location Operating leases $ 37,682 $ 330 $ 38,012 Other Assets Finance leases — 1,598 1,598 Property and Equipment, net December 31, 2021 Real Estate Equipment Total Balance Sheet Location Operating leases $ 22,518 $ 639 $ 23,157 Other Assets Finance leases — 2,646 2,646 Property and Equipment, net |
Summary of operating and finance lease liabilities recognized in the condensed consolidated balance sheets | December 31, 2022 Operating Leases Finance Leases Accrued liabilities $ 7,747 $ 757 Other liabilities 29,586 41 Total $ 37,333 $ 798 December 31, 2021 Operating Leases Finance Leases Accrued liabilities $ 3,990 $ 960 Other liabilities 17,389 41 Total $ 21,379 $ 1,001 |
Schedule of weighted-average remaining lease terms and weighted-average discount rates | December 31, 2022 Operating Leases Finance Leases Weighted-average remaining lease term (years) 6.7 0.8 Weighted-average discount rate 3.4 % 3.6 % December 31, 2021 Operating Leases Finance Leases Weighted-average remaining lease term (years) 8.1 0.7 Weighted-average discount rate 3.5 % 1.3 % |
Schedule of reconciliation of undiscounted future lease payments for operating and finance leases | Undiscounted Future Lease Payments Operating Leases Finance Leases 2023 $ 8,854 $ 769 2024 7,324 23 2025 5,242 17 2026 4,182 2 2027 4,060 — 2028 and thereafter 12,349 — Total lease payments 42,011 811 Less imputed interest (4,678) (13) Total $ 37,333 $ 798 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INVESTMENTS | |
Summary of investments in available-for-sale | Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than December 31, 2022 Cost Gains Losses Value Months 12 Months Available-for-sale Short-term: Commercial paper $ 197,712 $ 1 $ 4 $ 197,709 $ 4 $ — Certificates of deposit 10,078 — — 10,078 — — Municipal securities 211,791 60 612 211,239 612 — U.S. government agency securities 109,697 3 715 108,985 715 — U.S. treasuries 838,825 17 4,539 834,303 4,539 — Long-term: U.S. government agency securities 2,016 — 3 2,013 3 — U.S. treasuries 53,215 20 71 53,164 71 — Variable rate demand notes 6,266 — — 6,266 — — Total $ 1,429,600 $ 101 $ 5,944 $ 1,423,757 $ 5,944 $ — Continuous Continuous Gross Gross Unrealized Unrealized Unrealized Unrealized Loss Position Loss Position Amortized Holding Holding Fair less than 12 greater than December 31, 2021 Cost Gains Losses Value Months 12 Months Available-for-sale Short-term: Commercial paper $ 334,077 $ — $ — $ 334,077 $ — $ — Certificates of deposit 44,502 — — 44,502 — — Municipal securities 666 — — 666 — — U.S. government agency securities 62,687 — 26 62,661 26 — U.S. treasuries 1,308,536 2 717 1,307,821 717 — Long-term: U.S. government agency securities 12,500 — 24 12,476 24 — U.S. treasuries 87,133 — 190 86,943 190 — Total $ 1,850,101 $ 2 $ 957 $ 1,849,146 $ 957 $ — |
Summary of the underlying contractual maturities of investments | December 31, 2022 December 31, 2021 Amortized Cost Fair Value Amortized Cost Fair Value Less than 1 year: Commercial paper $ 197,712 $ 197,710 $ 334,077 $ 334,077 Municipal securities 211,791 211,239 666 666 U.S. government agency securities 109,697 108,985 62,687 62,661 Certificates of deposit 10,078 10,078 44,502 44,502 U.S. treasuries 838,825 834,302 1,308,536 1,307,821 Due 1 - 10 years: U.S. treasuries 53,215 53,164 87,133 86,943 U.S. government agency securities 2,016 2,013 12,500 12,476 Variable rate demand notes 4,862 4,862 — — Due 11 - 20 years: Variable rate demand notes 1,404 1,404 — — Total $ 1,429,600 $ 1,423,757 $ 1,850,101 $ 1,849,146 |
FAIR VALUE OF CERTAIN FINANCI_2
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | |
Schedule of financial assets and liabilities recorded at fair value on a recurring basis | December 31, 2022 Level 1 Level 2 Level 3 Total Cash $ 1,132,509 $ — $ — $ 1,132,509 Money market funds 121,444 — — 121,444 Certificates of deposit — 10,078 — 10,078 Commercial paper — 225,067 — 225,067 Variable rate demand notes — 6,266 — 6,266 Municipal securities — 213,798 — 213,798 U.S. government agency securities — 113,357 — 113,357 U.S. treasuries — 908,379 — 908,379 Foreign currency derivatives — (3,733) — (3,733) Total $ 1,253,953 $ 1,473,212 $ — $ 2,727,165 Amounts included in: Cash and cash equivalents $ 1,253,953 $ 53,188 $ — $ 1,307,141 Short-term investments — 1,362,314 — 1,362,314 Accounts receivable, net — 965 — 965 Investments — 61,443 — 61,443 Accrued liabilities — (4,698) — (4,698) Total $ 1,253,953 $ 1,473,212 $ — $ 2,727,165 December 31, 2021 Level 1 Level 2 Level 3 Total Cash $ 749,089 $ — $ — $ 749,089 Money market funds 440,826 — — 440,826 Certificates of deposit — 44,502 — 44,502 Commercial paper — 335,477 — 335,477 Municipal securities — 2,428 — 2,428 U.S. government agency securities — 75,137 — 75,137 U.S. treasuries — 1,528,149 — 1,528,149 Foreign currency derivatives — (278) — (278) Total $ 1,189,915 $ 1,985,415 $ — $ 3,175,330 Amounts included in: Cash and cash equivalents $ 1,189,915 $ 136,547 $ — $ 1,326,462 Short-term investments — 1,749,727 — 1,749,727 Accounts receivable, net — 654 — 654 Investments — 99,419 — 99,419 Accrued liabilities — (932) — (932) Total $ 1,189,915 $ 1,985,415 $ — $ 3,175,330 |
DERIVATIVE INSTRUMENTS AND HE_2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |
Schedule of notional amount and fair value of all outstanding foreign currency derivative instruments in the consolidated balance sheets | December 31, 2022 Derivatives not designated as hedging instruments under Notional Fair ASC 815 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive SGD/pay USD 15,883 398 Accounts receivable, net Receive CAD/pay USD 34,467 106 Accounts receivable, net Receive USD/pay MXN 12,430 88 Accounts receivable, net Receive USD/pay GBP 43,551 118 Accounts receivable, net Receive RSD/pay USD 3,513 112 Accounts receivable, net Receive GBP/pay USD 34,716 100 Accounts receivable, net Receive GBP/pay USD 4,321 31 Accounts receivable, net Receive USD/pay COP 11,570 12 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive USD/pay CLP $ 43,071 $ (2,549) Accrued liabilities Receive USD/pay EUR 40,592 (1,377) Accrued liabilities Receive USD/pay CNY 12,460 (362) Accrued liabilities Receive USD/pay EUR 34,714 (295) Accrued liabilities Receive USD/pay NZD 4,093 (91) Accrued liabilities Receive USD/pay AUD 1,271 (23) Accrued liabilities Receive USD/pay ZAR 3,124 (1) Accrued liabilities December 31, 2021 Derivatives not designated as hedging instruments under Notional Fair ASC 815 Amount Value Balance Sheet Location Assets: Foreign currency exchange contracts: Receive SGD/pay USD 16,544 297 Accounts receivable, net Receive USD/pay COP 9,754 296 Accounts receivable, net Receive RSD/pay USD 9,837 46 Accounts receivable, net Receive USD/pay RUB 7,175 15 Accounts receivable, net Liabilities: Foreign currency exchange contracts: Receive USD/pay GBP $ 29,929 $ (666) Accrued liabilities Receive USD/pay AUD 2,602 (88) Accrued liabilities Receive USD/pay CNY 12,230 (74) Accrued liabilities Receive USD/pay NZD 2,693 (45) Accrued liabilities Receive USD/pay EUR 3,045 (29) Accrued liabilities Receive USD/pay ZAR 4,140 (21) Accrued liabilities Receive USD/pay DKK 1,461 (9) Accrued liabilities |
Schedule of net loss on derivative instruments in the consolidated statements of income | Amount of loss recognized in income on derivatives Derivatives not designated as Location of loss Year ended hedging instruments under recognized in income on December 31, December 31, December 31, ASC 815 derivatives 2022 2021 2020 Foreign currency exchange contracts Other (expense) income, net $ 6,893 $ 5,445 $ 3,317 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INVENTORIES | |
Schedule of inventories | 2022 2021 Raw materials $ 467,392 $ 349,865 Work in process 1,688 — Finished goods 466,551 243,492 $ 935,631 $ 593,357 |
PROPERTY AND EQUIPMENT, Net (Ta
PROPERTY AND EQUIPMENT, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT, Net | |
Schedule of property and equipment | 2022 2021 Land $ 139,798 $ 85,455 Leasehold improvements 31,327 11,795 Furniture and fixtures 9,286 8,274 Office and computer equipment 22,386 21,601 Computer software 5,906 7,409 Equipment 244,739 189,820 Buildings 163,885 148,971 Vehicles 49,175 45,088 Assets under construction 83,553 20,125 750,055 538,538 Less: accumulated depreciation and amortization (233,158) (224,785) $ 516,897 $ 313,753 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of goodwill | Monster Energy® Strategic Alcohol Drinks Brands Brands Other Total Balance at December 31, 2021 $ 693,644 $ 637,999 $ — $ — $ 1,331,643 Acquisitions — — 86,298 — 86,298 Balance at December 31, 2022 $ 693,644 $ 637,999 $ 86,298 $ — $ 1,417,941 Monster Energy® Strategic Alcohol Drinks Brands Brands Other Total Balance at December 31, 2020 $ 693,644 $ 637,999 $ — $ — $ 1,331,643 Acquisitions — — — — — Balance at December 31, 2021 $ 693,644 $ 637,999 $ — $ — $ 1,331,643 |
Schedule of intangible assets | December 31, December 31, 2022 2021 Amortizing intangibles $ 121,378 $ 66,872 Accumulated amortization (68,790) (61,227) 52,588 5,645 Non-amortizing intangibles 1,167,822 1,066,741 $ 1,220,410 $ 1,072,386 |
Schedule of future estimated amortization expense related to amortizing intangibles | The following is the future estimated amortization expense related to amortizing intangibles as of December 31, 2022: Year Ending December 31: 2023 $ 4,745 2024 3,648 2025 3,647 2026 3,647 2027 3,647 2028 and thereafter 33,254 $ 52,588 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of contractual obligations related primarily to sponsorships and other commitments | Year Ending December 31: 2023 $ 239,350 2024 51,162 2025 14,153 2026 9,586 2027 — 2028 and thereafter — $ 314,251 |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCUMULATED OTHER COMPREHENSIVE LOSS | |
Schedule of components of accumulated other comprehensive loss | 2022 2021 Accumulated net unrealized loss on available-for-sale securities $ (5,843) $ (956) Foreign currency translation adjustments, net of tax (153,230) (68,209) Total accumulated other comprehensive loss $ (159,073) $ (69,165) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION | |
Schedule of weighted-average assumptions used to estimate the fair value of options granted | 2022 2021 2020 Dividend yield 0.0 % 0.0 % 0.0 % Expected volatility 27.7 % 28.9 % 30.4 % Risk-free interest rate 2.15 % 0.85 % 0.70 % Expected term 6.1 Years 5.8 Years 5.8 Years |
Summary of activities with respect to its stock option plans | Weighted- Weighted- Average Average Remaining Number of Exercise Contractual Aggregate Shares Price Per Term (in Intrinsic Options (in thousands) Share years) Value Outstanding at January 1, 2022 13,860 $ 48.19 5.1 $ 663,148 Granted 01/01/22 - 03/31/22 2,489 $ 73.96 Granted 04/01/22 - 06/30/22 8 $ 88.05 Granted 07/01/22 - 09/30/22 34 $ 95.72 Granted 10/01/22 - 12/31/22 32 $ 91.10 Exercised (1,411) $ 45.37 Cancelled or forfeited (157) $ 72.15 Outstanding at December 31, 2022 14,855 $ 52.75 5.0 $ 724,651 Vested and expected to vest in the future at December 31, 2022 14,509 $ 52.22 4.9 $ 715,462 Exercisable at December 31, 2022 9,764 $ 42.81 3.4 $ 573,325 |
Summary of information about stock options outstanding and exercisable | Options Outstanding Options Exercisable Weighted Average Remaining Weighted Number Weighted Number Contractual Average Exercisable Average Range of Exercise Outstanding Term Exercise (In Exercise Prices ($) (In Thousands) (Years) Price ($) Thousands) Price ($) $ 15.71 - $ 36.05 2,768 0.8 $ 20.75 2,768 $ 20.75 $ 37.10 - $ 43.99 1,751 3.3 $ 43.43 1,751 $ 43.43 $ 44.92 - $ 46.27 2,189 3.2 $ 45.60 2,189 $ 45.60 $ 48.11 - $ 57.95 529 5.5 $ 53.29 313 $ 52.96 $ 58.73 - $ 58.73 1,818 5.2 $ 58.73 1,310 $ 58.73 $ 58.77 - $ 62.39 2,247 6.6 $ 60.80 1,252 $ 60.53 $ 62.92 - $ 67.42 43 6.1 $ 64.19 26 $ 63.46 $ 73.23 - $ 73.23 2,263 9.2 $ 73.23 — $ — $ 77.92 - $ 97.80 1,237 8.4 $ 88.32 155 $ 89.02 $ 98.49 - $ 98.49 10 9.6 $ 98.49 — $ — 14,855 5.0 $ 52.75 9,764 $ 42.81 |
Summary of activities with respect to non-vested restricted stock units and performance share units | Weighted Number of Average Shares (in Grant-Date thousands) Fair Value Non-vested at January 1, 2022 910 $ 69.02 Granted 01/01/22 - 03/31/22 1 484 $ 71.88 Granted 04/01/22 - 06/30/22 15 $ 87.52 Granted 07/01/22 - 09/30/22 6 $ 95.17 Granted 10/01/22 - 12/31/22 1 $ 90.29 Vested (389) $ 64.59 Forfeited/cancelled (14) $ 68.27 Non-vested at December 31, 2022 1,013 $ 72.54 |
Schedule of employee and non-employee share-based compensation expense | 2022 2021 2020 Operating expenses $ 64,109 $ 70,483 $ 70,289 Total employee and non-employee share-based compensation expense included in income, before income tax 64,109 70,483 70,289 Less: Amount of income tax benefit recognized in earnings (13,175) (14,228) (15,499) Amount charged against net income $ 50,934 $ 56,255 $ 54,790 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of domestic and foreign components of the income before provision for income taxes | Year Ended December 31, 2022 2021 2020 Domestic* $ 1,327,459 $ 1,431,797 $ 1,374,402 Foreign* 244,505 369,622 251,755 Income before provision for income taxes $ 1,571,964 $ 1,801,419 $ 1,626,157 *After intercompany royalties, management fees and interest charges from the Company’s domestic to foreign entities of $85.0 million, $61.1 million and $54.2 million for the years ended December 31, 2022, 2021 and 2020, respectively. |
Schedule of components of the provision for income taxes | Year Ended December 31, 2022 2021 2020 Current: Federal $ 247,482 $ 273,115 $ 259,073 State 47,255 44,990 43,704 Foreign 37,421 89,410 70,658 332,158 407,515 373,435 Deferred: Federal 19,111 14,750 11,401 State 258 4,689 4,709 Foreign 26,084 5,092 (167,595) 45,453 24,531 (151,485) Valuation allowance 2,729 (8,102) (5,387) $ 380,340 $ 423,944 $ 216,563 |
Schedule of reconciliation of income taxes computed at statutory federal rate to total income taxes | Year Ended December 31, 2022 2021 2020 U.S. Federal tax expense at statutory rates $ 330,113 $ 378,298 $ 341,493 State income taxes, net of federal tax benefit 35,848 38,894 37,478 Permanent differences (5,450) (4,168) (1,064) Stock based compensation 3,571 2,790 1,097 Intra-company transfer benefit — — (165,075) Other 1,371 (649) (7,388) Foreign rate differential 12,158 16,881 15,409 Valuation allowance 2,729 (8,102) (5,387) $ 380,340 $ 423,944 $ 216,563 |
Schedule of components of the deferred tax assets (liabilities) | 2022 2021 Deferred Tax Assets: Reserve for sales returns $ 2,262 $ 889 Reserve for inventory obsolescence 4,651 3,643 Reserve for marketing development fund 7,487 8,951 Capitalization of inventory costs 6,537 2,533 State franchise tax - current 2,339 2,493 Accrued compensation 10,499 2,854 Accrued other liabilities 1,820 4,634 Deferred revenue 63,196 68,557 Stock-based compensation 25,526 24,635 Foreign net operating loss carryforward 19,896 14,507 Prepaid supplies 7,901 6,317 Termination payments 52,466 58,042 Operating lease liabilities 5,739 4,711 Intangibles 33,603 72,666 Impairment-trademarks and others 2,567 2,047 Other deferred tax assets 33,209 33,013 Total gross deferred tax assets $ 279,698 $ 310,492 Deferred Tax Liabilities: Amortization of trademarks $ (39,237) $ (41,517) State franchise tax - deferred (5,503) (5,505) Operating lease ROU assets (5,739) (4,711) Other deferred tax liabilities (5) (618) Depreciation (22,433) (5,907) Total gross deferred tax liabilities (72,917) (58,258) Valuation Allowance (29,742) (27,013) Net deferred tax assets $ 177,039 $ 225,221 |
Schedule of roll-forward of the total gross unrecognized tax benefits, not including interest and penalties | Gross Unrecognized Tax Benefits Balance at December 31, 2019 $ 2,993 Additions for tax positions related to the current year — Additions for tax positions related to the prior year — Decreases for tax positions related to prior years (2,251) Balance at December 31, 2020 $ 742 Additions for tax positions related to the current year — Additions for tax positions related to the prior year — Decreases for tax positions related to prior years (742) Balance at December 31, 2021 $ — Additions for tax positions related to the current year — Additions for tax positions related to the prior year 3,020 Decreases for tax positions related to prior years — Balance at December 31, 2022 $ 3,020 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
Schedule of reconciliation of the weighted average shares used in the basic and diluted earnings per common share computations | 2022 2021 2020 Weighted-average shares outstanding: Basic 526,779 528,763 529,639 Dilutive securities 6,442 6,876 5,168 Diluted 533,221 535,639 534,807 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
SEGMENT INFORMATION | |
Schedule of net revenues and other financial information by segment | 2022 2021 2020 Net sales: Monster Energy® Drinks 1 $ 5,833,211 $ 5,220,673 $ 4,305,246 Strategic Brands 353,490 294,762 266,354 Alcohol Brands 2 101,405 — — 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® Drinks 1 $ 1,850,053 $ 1,990,785 $ 1,820,346 Strategic Brands 197,709 173,660 155,047 Alcohol Brands 2 (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® Drinks 1 $ 1,853,011 $ 1,992,185 $ 1,820,625 Strategic Brands 197,843 173,739 155,047 Alcohol Brands 2 (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 |
Schedule of goodwill and other intangible assets for the reportable segments | 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 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | |
Schedule of related party transactions | December 31, December 31, 2022 2021 Accounts receivable, net $ 88,169 $ 94,647 Accounts payable $ (35,467) $ (35,248) Accrued promotional allowances $ (11,222) $ (4,536) Accrued liabilities $ (14,733) $ (26,616) |
ORGANIZATION AND SUMMARY OF S_3
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 item | Dec. 31, 2021 USD ($) | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Amounts of property and equipment reclassified to assets under construction | $ | $ 20.1 | |
Number of registered trademarks held | item | 17,500 | |
Minimum | Property and Equipment | ||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Estimated useful lives (in years) | 3 years | |
Maximum | Property and Equipment | ||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
Estimated useful lives (in years) | 30 years |
ORGANIZATION AND SUMMARY OF S_4
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Impairment of Goodwill | $ 0 | $ 0 | $ 0 |
ORGANIZATION AND SUMMARY OF S_5
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Other Intangibles (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Impairment charges | $ 2,200 | $ 0 | $ 8,700 |
ORGANIZATION AND SUMMARY OF S_6
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign Currency Translation and Transactions (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Foreign currency transaction gains (losses) | $ (37.9) | $ 0.3 | $ (11.2) |
ORGANIZATION AND SUMMARY OF S_7
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Freight-Out Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Freight-out costs | $ 249.2 | $ 213.9 | $ 134.1 |
ORGANIZATION AND SUMMARY OF S_8
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising and Promotional Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Advertising and promotional expenses | $ 460.7 | $ 417.6 | $ 345.7 |
ORGANIZATION AND SUMMARY OF S_9
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk (Details) - Customer concentration - Sales | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Coca Cola Company | |||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Percentage of net sales | 2% | 2% | 2% |
Coca-Cola Consolidated, Inc | |||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Percentage of net sales | 11% | 12% | 12% |
Reyes Coca-Cola Bottling | |||
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Percentage of net sales | 13% | 12% | 10% |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - CANarchy - USD ($) $ in Thousands | 3 Months Ended | |
Feb. 17, 2022 | Dec. 31, 2022 | |
ACQUISITIONS | ||
Business combination consideration including adjustments transferred | $ 329,500 | |
Consideration Transferred | ||
Cash | 332,721 | |
Total | 332,721 | |
Identifiable Assets Acquired and Liabilities Assumed | ||
Intangibles - trademarks (non-amortizing) | 89,500 | |
Intangibles - customer relationships (amortizing) | 54,500 | |
Intangibles - permits (non-amortizing) | 6,000 | |
Property and equipment, net | 81,285 | |
Inventory | 18,300 | |
Right-of -use assets | 12,836 | |
Operating lease liabilities | (12,836) | |
Working capital (excluding inventory) | (5,640) | |
Other | (770) | |
Goodwill | 86,298 | |
Cash | 3,248 | |
Total | $ 332,721 | |
Decrease in trademarks (non-amortizing) due to measurement period adjustment | $ 5,000 | |
Increase in goodwill due to measurement period adjustment | $ 5,000 |
ACQUISITIONS - Additional infor
ACQUISITIONS - Additional information (Details) - Real property and equipment in Norwalk $ in Millions | May 05, 2022 USD ($) |
ACQUISITIONS | |
Purchase price | $ 62.5 |
Land | |
ACQUISITIONS | |
Purchase price | 50.6 |
Building | |
ACQUISITIONS | |
Purchase price | 10 |
Equipment | |
ACQUISITIONS | |
Purchase price | $ 1.9 |
REVENUE RECOGNITION - (Details)
REVENUE RECOGNITION - (Details) | 12 Months Ended |
Dec. 31, 2022 segment | |
REVENUE RECOGNITION | |
Number of operating segments | 4 |
Number of reportable segments | 4 |
Distribution agreement, revenue recognition period | 20 years |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Total Net Sales | $ 6,311,050 | $ 5,541,352 | $ 4,598,638 |
U.S. and Canada | |||
Total Net Sales | 4,115,544 | 3,640,011 | 3,214,566 |
EMEA | |||
Total Net Sales | 1,228,742 | 1,103,428 | 745,827 |
Asia Pacific | |||
Total Net Sales | 456,186 | 472,834 | 423,792 |
Latin America and Caribbean | |||
Total Net Sales | 510,578 | 325,079 | 214,453 |
Monster Energy Drinks | |||
Total Net Sales | 5,833,211 | 5,220,673 | 4,305,246 |
Monster Energy Drinks | U.S. and Canada | |||
Total Net Sales | 3,806,351 | 3,455,704 | 3,020,667 |
Monster Energy Drinks | EMEA | |||
Total Net Sales | 1,105,302 | 1,004,005 | 675,045 |
Monster Energy Drinks | Asia Pacific | |||
Total Net Sales | 426,800 | 446,023 | 400,317 |
Monster Energy Drinks | Latin America and Caribbean | |||
Total Net Sales | 494,758 | 314,941 | 209,217 |
Strategic Brands | |||
Total Net Sales | 353,490 | 294,762 | 266,354 |
Strategic Brands | U.S. and Canada | |||
Total Net Sales | 184,844 | 158,390 | 166,861 |
Strategic Brands | EMEA | |||
Total Net Sales | 123,440 | 99,423 | 70,782 |
Strategic Brands | Asia Pacific | |||
Total Net Sales | 29,386 | 26,811 | 23,475 |
Strategic Brands | Latin America and Caribbean | |||
Total Net Sales | 15,820 | 10,138 | 5,236 |
Other | |||
Total Net Sales | 22,944 | 25,917 | 27,038 |
Other | U.S. and Canada | |||
Total Net Sales | 22,944 | $ 25,917 | $ 27,038 |
Alcohol Brands | |||
Total Net Sales | 101,405 | ||
Alcohol Brands | U.S. and Canada | |||
Total Net Sales | $ 101,405 |
REVENUE RECOGNITION - Contract
REVENUE RECOGNITION - Contract Liabilities (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Contract Liabilities | |||
Deferred revenue | $ 267.1 | $ 285.8 | |
Deferred revenue recognized in net sales | $ 40 | $ 41.5 | $ 42.1 |
LEASES - Lease Terms (Details)
LEASES - Lease Terms (Details) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Operating leases, lease term (in years) | 4 years |
Operating leases, options to extend | true |
Finance leases, options to extend | true |
Operating leases, options to terminate | true |
Finance leases, options to terminate | true |
Minimum | |
LEASES | |
Operating leases, lease term (in years) | 1 year |
Maximum | |
LEASES | |
Operating leases, lease term (in years) | 11 years |
Operating leases, renewal lease term (in years) | 5 years |
Operating leases, termination period (in years) | 1 year |
LEASES - Lease Cost (Details)
LEASES - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
LEASES | |||
Operating lease cost | $ 8,641 | $ 4,614 | $ 4,637 |
Short-term lease cost | 3,705 | 5,218 | 3,408 |
Variable lease cost | 773 | 710 | 719 |
Finance leases: | |||
Amortization of ROU assets | 545 | 546 | 626 |
Interest on lease liabilities | 24 | 19 | 39 |
Finance lease cost | 569 | 565 | 665 |
Total lease cost | $ 13,688 | $ 11,107 | $ 9,429 |
LEASES - Supplemental cash flow
LEASES - Supplemental cash flow information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from operating leases | $ 8,164 | $ 4,123 | $ 3,982 |
Operating cash flows from finance leases | 24 | 19 | 39 |
Financing cash flows from finance leases | 2,091 | 2,698 | 3,086 |
ROU assets obtained in exchange for lease obligations: | |||
Finance leases | 1,897 | 2,878 | 2,417 |
Operating leases | $ 22,962 | $ 4,313 | $ 3,003 |
LEASES - ROU assets for operati
LEASES - ROU assets for operating and finance leases (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
LEASES | ||
Operating leases | $ 38,012 | $ 23,157 |
Finance leases | $ 1,598 | $ 2,646 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, Plant and Equipment, Net | Property, Plant and Equipment, Net |
Real Estate | ||
LEASES | ||
Operating leases | $ 37,682 | $ 22,518 |
Equipment | ||
LEASES | ||
Operating leases | 330 | 639 |
Finance leases | $ 1,598 | $ 2,646 |
LEASES - Operating and finance
LEASES - Operating and finance leases liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
LEASES | ||
Operating Leases | $ 37,333 | $ 21,379 |
Finance Leases | $ 798 | 1,001 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | |
Accrued liabilities | ||
LEASES | ||
Operating Leases | $ 7,747 | 3,990 |
Finance Leases | $ 757 | 960 |
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Accrued Liabilities, Current | |
Other Liabilities | ||
LEASES | ||
Operating Leases | $ 29,586 | 17,389 |
Finance Leases | $ 41 | $ 41 |
LEASES - Weighted-average remai
LEASES - Weighted-average remaining lease term and weighted-average discount rate (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
LEASES | ||
Weighted-average remaining lease term (years), Operating Leases | 6 years 8 months 12 days | 8 years 1 month 6 days |
Weighted-average remaining lease term (years), Finance Leases | 9 months 18 days | 8 months 12 days |
Weighted-average discount rate, Operating Leases | 3.40% | 3.50% |
Weighted-average discount rate, Finance Leases | 3.60% | 1.30% |
LEASES - Undiscounted future le
LEASES - Undiscounted future lease payments for operating and finance leases (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
2023 | $ 8,854 | |
2024 | 7,324 | |
2025 | 5,242 | |
2026 | 4,182 | |
2027 | 4,060 | |
2028 and thereafter | 12,349 | |
Total lease payments | 42,011 | |
Less imputed interest | (4,678) | |
Operating Lease, Liability, Total | $ 37,333 | $ 21,379 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Accrued Liabilities, Current | |
Finance Leases | ||
2023 | $ 769 | |
2024 | 23 | |
2025 | 17 | |
2026 | 2 | |
Total lease payments | 811 | |
Less imputed interest | (13) | |
Finance Lease, Liability, Total | 798 | $ 1,001 |
Additional operating leases | $ 1,100 | |
Operating leases, lease term (in years) | 4 years |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Available-for-sale | ||
Amortized Cost | $ 1,429,600 | $ 1,850,101 |
Gross Unrealized Holding Gains | 101 | 2 |
Gross Unrealized Holding Losses | 5,944 | 957 |
Fair Value | 1,423,757 | 1,849,146 |
Continuous Unrealized Loss Position less than 12 Months | 5,944 | 957 |
Short-term | Commercial paper | ||
Available-for-sale | ||
Amortized Cost | 197,712 | 334,077 |
Gross Unrealized Holding Gains | 1 | |
Gross Unrealized Holding Losses | 4 | |
Fair Value | 197,709 | 334,077 |
Continuous Unrealized Loss Position less than 12 Months | 4 | |
Short-term | Certificates of deposit | ||
Available-for-sale | ||
Amortized Cost | 10,078 | 44,502 |
Fair Value | 10,078 | 44,502 |
Short-term | Municipal securities | ||
Available-for-sale | ||
Amortized Cost | 211,791 | 666 |
Gross Unrealized Holding Gains | 60 | |
Gross Unrealized Holding Losses | 612 | |
Fair Value | 211,239 | 666 |
Continuous Unrealized Loss Position less than 12 Months | 612 | |
Short-term | U.S. government agency securities | ||
Available-for-sale | ||
Amortized Cost | 109,697 | 62,687 |
Gross Unrealized Holding Gains | 3 | |
Gross Unrealized Holding Losses | 715 | 26 |
Fair Value | 108,985 | 62,661 |
Continuous Unrealized Loss Position less than 12 Months | 715 | 26 |
Short-term | U.S. treasuries | ||
Available-for-sale | ||
Amortized Cost | 838,825 | 1,308,536 |
Gross Unrealized Holding Gains | 17 | 2 |
Gross Unrealized Holding Losses | 4,539 | 717 |
Fair Value | 834,303 | 1,307,821 |
Continuous Unrealized Loss Position less than 12 Months | 4,539 | 717 |
Long-term | U.S. government agency securities | ||
Available-for-sale | ||
Amortized Cost | 2,016 | 12,500 |
Gross Unrealized Holding Losses | 3 | 24 |
Fair Value | 2,013 | 12,476 |
Continuous Unrealized Loss Position less than 12 Months | 3 | 24 |
Long-term | U.S. treasuries | ||
Available-for-sale | ||
Amortized Cost | 53,215 | 87,133 |
Gross Unrealized Holding Gains | 20 | |
Gross Unrealized Holding Losses | 71 | 190 |
Fair Value | 53,164 | 86,943 |
Continuous Unrealized Loss Position less than 12 Months | 71 | $ 190 |
Long-term | Variable rate demand notes | ||
Available-for-sale | ||
Amortized Cost | 6,266 | |
Fair Value | $ 6,266 |
INVESTMENTS - Maturity Period (
INVESTMENTS - Maturity Period (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
INVESTMENTS | ||
Amortized Cost | $ 1,429,600 | $ 1,850,101 |
Fair Value | 1,423,757 | 1,849,146 |
Commercial paper | Less than 1 year | ||
INVESTMENTS | ||
Amortized Cost | 197,712 | 334,077 |
Fair Value | 197,710 | 334,077 |
Municipal securities | Less than 1 year | ||
INVESTMENTS | ||
Amortized Cost | 211,791 | 666 |
Fair Value | 211,239 | 666 |
U.S. government agency securities | Less than 1 year | ||
INVESTMENTS | ||
Amortized Cost | 109,697 | 62,687 |
Fair Value | 108,985 | 62,661 |
U.S. government agency securities | Due 1 - 10 years | ||
INVESTMENTS | ||
Amortized Cost | 2,016 | 12,500 |
Fair Value | 2,013 | 12,476 |
Certificates of deposit | Less than 1 year | ||
INVESTMENTS | ||
Amortized Cost | 10,078 | 44,502 |
Fair Value | 10,078 | 44,502 |
U.S. treasuries | Less than 1 year | ||
INVESTMENTS | ||
Amortized Cost | 838,825 | 1,308,536 |
Fair Value | 834,302 | 1,307,821 |
U.S. treasuries | Due 1 - 10 years | ||
INVESTMENTS | ||
Amortized Cost | 53,215 | 87,133 |
Fair Value | 53,164 | $ 86,943 |
Variable rate demand notes | Due 1 - 10 years | ||
INVESTMENTS | ||
Amortized Cost | 4,862 | |
Fair Value | 4,862 | |
Variable rate demand notes | Due 11 - 20 years | ||
INVESTMENTS | ||
Amortized Cost | 1,404 | |
Fair Value | $ 1,404 |
FAIR VALUE OF CERTAIN FINANCI_3
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Cash and cash equivalents | $ 1,307,141 | $ 1,326,462 |
Short-term investments | 1,362,314 | 1,749,727 |
Investments | 61,443 | 99,419 |
Asset transfers between Level 1 and Level 2 measurements | 0 | 0 |
Total fair value | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Cash | 1,132,509 | 749,089 |
Foreign currency derivatives | (3,733) | (278) |
Assets measured at fair value | 2,727,165 | 3,175,330 |
Cash and cash equivalents | 1,307,141 | 1,326,462 |
Short-term investments | 1,362,314 | 1,749,727 |
Accounts receivable, net | 965 | 654 |
Investments | 61,443 | 99,419 |
Accrued liabilities | (4,698) | (932) |
Total fair value | Money market funds | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 121,444 | 440,826 |
Total fair value | Certificates of deposit | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 10,078 | 44,502 |
Total fair value | Commercial paper | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 225,067 | 335,477 |
Total fair value | Variable rate demand notes | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 6,266 | |
Total fair value | Municipal securities | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 213,798 | 2,428 |
Total fair value | U.S. government agency securities | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 113,357 | 75,137 |
Total fair value | U.S. treasuries | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 908,379 | 1,528,149 |
Level 1 | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Cash | 1,132,509 | 749,089 |
Assets measured at fair value | 1,253,953 | 1,189,915 |
Cash and cash equivalents | 1,253,953 | 1,189,915 |
Level 1 | Money market funds | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 121,444 | 440,826 |
Level 2 | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Foreign currency derivatives | (3,733) | (278) |
Assets measured at fair value | 1,473,212 | 1,985,415 |
Cash and cash equivalents | 53,188 | 136,547 |
Short-term investments | 1,362,314 | 1,749,727 |
Accounts receivable, net | 965 | 654 |
Investments | 61,443 | 99,419 |
Accrued liabilities | (4,698) | (932) |
Level 2 | Certificates of deposit | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 10,078 | 44,502 |
Level 2 | Commercial paper | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 225,067 | 335,477 |
Level 2 | Variable rate demand notes | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 6,266 | |
Level 2 | Municipal securities | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 213,798 | 2,428 |
Level 2 | U.S. government agency securities | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | 113,357 | 75,137 |
Level 2 | U.S. treasuries | ||
FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES | ||
Assets measured at fair value | $ 908,379 | $ 1,528,149 |
DERIVATIVE INSTRUMENTS AND HE_3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Notional amount and fair value (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Foreign currency exchange contracts | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Term of derivative instrument | 3 months | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive SGD/pay USD | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount assets | $ 15,883 | $ 16,544 |
Fair value assets | 398 | 297 |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive CAD Pay USD | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount assets | 34,467 | |
Fair value assets | 106 | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive USD/pay MXN | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount assets | 12,430 | |
Fair value assets | 88 | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive USD/pay GBP | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount assets | 43,551 | |
Fair value assets | 118 | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive RSD/pay USD | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount assets | 3,513 | 9,837 |
Fair value assets | 112 | 46 |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive GBP/pay USD 1 | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount assets | 34,716 | |
Fair value assets | 100 | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive GBP/pay USD 2 | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount assets | 4,321 | |
Fair value assets | 31 | |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive USD/pay COP | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount assets | 11,570 | 9,754 |
Fair value assets | 12 | 296 |
Derivatives not designated as hedging instruments | Accounts receivables, net | Receive USD/pay RUB | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount assets | 7,175 | |
Fair value assets | 15 | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay GBP | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount liabilities | 29,929 | |
Fair value liabilities | (666) | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay CLP | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount liabilities | 43,071 | |
Fair value liabilities | (2,549) | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay EUR | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount liabilities | 3,045 | |
Fair value liabilities | (29) | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay EUR 1 | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount liabilities | 40,592 | |
Fair value liabilities | (1,377) | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay EUR 2 | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount liabilities | 34,714 | |
Fair value liabilities | (295) | |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay CNY | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount liabilities | 12,460 | 12,230 |
Fair value liabilities | (362) | (74) |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay NZD | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount liabilities | 4,093 | 2,693 |
Fair value liabilities | (91) | (45) |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay AUD | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount liabilities | 1,271 | 2,602 |
Fair value liabilities | (23) | (88) |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay ZAR | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount liabilities | 3,124 | 4,140 |
Fair value liabilities | $ (1) | (21) |
Derivatives not designated as hedging instruments | Accrued liabilities | Receive USD/pay DKK | ||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||
Notional amount liabilities | 1,461 | |
Fair value liabilities | $ (9) |
DERIVATIVE INSTRUMENTS AND HE_4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Non hedging designation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | |||
Amount of loss recognized in income on derivatives | $ 6,893 | $ 5,445 | $ 3,317 |
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) | Other Nonoperating Income (Expense) |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
INVENTORIES | ||
Raw materials | $ 467,392 | $ 349,865 |
Work in process | 1,688 | |
Finished goods | 466,551 | 243,492 |
Inventories | $ 935,631 | $ 593,357 |
PROPERTY AND EQUIPMENT, Net (De
PROPERTY AND EQUIPMENT, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
PROPERTY AND EQUIPMENT, Net | |||
Property and equipment, gross | $ 750,055 | $ 538,538 | |
Less: accumulated depreciation and amortization | (233,158) | (224,785) | |
Property and equipment, net | 516,897 | 313,753 | |
Total depreciation and amortization expense | 53,700 | 45,700 | $ 49,300 |
Land | |||
PROPERTY AND EQUIPMENT, Net | |||
Property and equipment, gross | 139,798 | 85,455 | |
Leasehold improvements | |||
PROPERTY AND EQUIPMENT, Net | |||
Property and equipment, gross | 31,327 | 11,795 | |
Furniture and fixtures | |||
PROPERTY AND EQUIPMENT, Net | |||
Property and equipment, gross | 9,286 | 8,274 | |
Office and computer equipment | |||
PROPERTY AND EQUIPMENT, Net | |||
Property and equipment, gross | 22,386 | 21,601 | |
Computer software | |||
PROPERTY AND EQUIPMENT, Net | |||
Property and equipment, gross | 5,906 | 7,409 | |
Equipment | |||
PROPERTY AND EQUIPMENT, Net | |||
Property and equipment, gross | 244,739 | 189,820 | |
Buildings | |||
PROPERTY AND EQUIPMENT, Net | |||
Property and equipment, gross | 163,885 | 148,971 | |
Vehicles | |||
PROPERTY AND EQUIPMENT, Net | |||
Property and equipment, gross | 49,175 | 45,088 | |
Assets under construction | |||
PROPERTY AND EQUIPMENT, Net | |||
Property and equipment, gross | $ 83,553 | $ 20,125 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Goodwill, beginning balance | $ 1,331,643 | $ 1,331,643 |
Acquisitions | 86,298 | |
Goodwill, ending balance | 1,417,941 | 1,331,643 |
Monster Energy Drinks | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Goodwill, beginning balance | 693,644 | 693,644 |
Acquisitions | 0 | 0 |
Goodwill, ending balance | 693,644 | 693,644 |
Strategic Brands | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Goodwill, beginning balance | 637,999 | 637,999 |
Acquisitions | 0 | 0 |
Goodwill, ending balance | 637,999 | $ 637,999 |
Alcohol Brands | ||
GOODWILL AND OTHER INTANGIBLE ASSETS | ||
Acquisitions | 86,298 | |
Goodwill, ending balance | $ 86,298 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
Amortizing intangibles | $ 121,378 | $ 66,872 | |
Accumulated amortization | (68,790) | (61,227) | |
Amortizing intangibles, net | 52,588 | 5,645 | |
Non-amortizing intangibles | 1,167,822 | 1,066,741 | |
Intangibles, net | 1,220,410 | 1,072,386 | |
Amortization expense | 7,600 | 4,400 | $ 7,700 |
Impairment charges | $ 2,200 | $ 0 | $ 8,700 |
Minimum | |||
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
Useful life of intangible assets | 5 years | ||
Maximum | |||
GOODWILL AND OTHER INTANGIBLE ASSETS | |||
Useful life of intangible assets | 15 years |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization expense (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Future estimated amortization expense related to amortizing intangibles | ||
2023 | $ 4,745 | |
2024 | 3,648 | |
2025 | 3,647 | |
2026 | 3,647 | |
2027 | 3,647 | |
2028 and thereafter | 33,254 | |
Amortizing intangibles, net | $ 52,588 | $ 5,645 |
DISTRIBUTION AGREEMENTS (Detail
DISTRIBUTION AGREEMENTS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
DISTRIBUTION AGREEMENTS | |||
Termination costs | $ 0 | $ 5.3 | $ 0.2 |
Distribution agreement (in years) | 20 years | ||
Revenue recognized | $ 21.4 | $ 21.5 | $ 21.4 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Millions | 1 Months Ended | |
Apr. 30, 2020 | Dec. 31, 2022 | |
Comerica Bank | Line of credit | ||
DEBT | ||
Maximum borrowing capacity | $ 10 | |
Outstanding borrowings | $ 0 | |
Comerica Bank | Line of credit | Base (prime) rate | Minimum | ||
DEBT | ||
Percentage to be subtracted to compute the variable rate on the debt instrument | 1% | |
Comerica Bank | Line of credit | Base (prime) rate | Maximum | ||
DEBT | ||
Percentage to be subtracted to compute the variable rate on the debt instrument | 1.50% | |
Comerica Bank | Line of credit | London Interbank Offered Rates | Minimum | ||
DEBT | ||
Percentage that needs to be added to compute the variable rate on the debt instrument | 1.25% | |
Comerica Bank | Line of credit | London Interbank Offered Rates | Maximum | ||
DEBT | ||
Percentage that needs to be added to compute the variable rate on the debt instrument | 1.75% | |
Comerica Bank | Standby letters of credit | ||
DEBT | ||
Maximum borrowing capacity | $ 4 | |
Amount outstanding | 0 | |
Comerica Bank | Standby letters of credit | Minimum | ||
DEBT | ||
Fee (as a percent) | 1% | |
Comerica Bank | Standby letters of credit | Maximum | ||
DEBT | ||
Fee (as a percent) | 1.50% | |
HSBC Bank (China) Company Limited | Line of credit | ||
DEBT | ||
Maximum borrowing capacity | 15 | |
Amount outstanding | $ 7.8 | |
Interest rate (as a percent) | 5.50% |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Contractual obligations (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
COMMITMENTS AND CONTINGENCIES | |
2023 | $ 239,350 |
2024 | 51,162 |
2025 | 14,153 |
2026 | 9,586 |
Total | $ 314,251 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Purchase Commitments (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
COMMITMENTS AND CONTINGENCIES | |||
Aggregate value of raw material purchases | $ 666.1 | $ 698 | $ 401.8 |
Raw material items | |||
COMMITMENTS AND CONTINGENCIES | |||
Purchase commitments | $ 328 | ||
Obligation term ( in years) | 1 year |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES - Litigation (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Dec. 31, 2022 | Sep. 29, 2022 | Apr. 30, 2022 | |
COMMITMENTS AND CONTINGENCIES | |||
Loss contingencies | $ 0 | ||
Amount awarded | $ 293,000 | ||
Amount awarded to the company | $ 175,000 | ||
Percentage of royalty awarded by the court on sales | 5% | ||
First royalty payment | $ 3,600 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Components of accumulated other comprehensive loss: | ||
Accumulated net unrealized loss on available-for-sale securities | $ (5,843) | $ (956) |
Foreign currency translation adjustments, net of tax | (153,230) | (68,209) |
Total accumulated other comprehensive loss | $ (159,073) | $ (69,165) |
TREASURY STOCK (Details)
TREASURY STOCK (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | ||||||
Jan. 01, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Nov. 02, 2022 | Jun. 14, 2022 | Mar. 13, 2020 | |
Treasury Stock Purchase | |||||||
Repurchase price of stock | $ 682,800,000 | ||||||
Amount of shares purchased | $ 771,028,000 | $ 13,830,000 | $ 595,918,000 | ||||
Number of shares repurchased of common stock from employees in lieu of cash or withholding taxes due | 200 | ||||||
Cash payment for repurchase of common stock from employees in lieu of cash or withholding taxes due | $ 12,500,000 | ||||||
March 2020 Repurchase Plan | |||||||
Treasury Stock Purchase | |||||||
Share repurchase program, authorized amount | $ 441,500,000 | ||||||
Common stock repurchased (in shares) | 5,100 | ||||||
Average purchase price (in dollars per share) | $ 86.89 | ||||||
March 2020 Repurchase Plan | Maximum | |||||||
Treasury Stock Purchase | |||||||
Share repurchase program, authorized amount | $ 500,000,000 | ||||||
June 2022 Repurchase Plan | |||||||
Treasury Stock Purchase | |||||||
Common stock repurchased (in shares) | 3,600 | ||||||
Repurchase price of stock | $ 88.73 | ||||||
Amount of shares purchased | $ 317,200,000 | ||||||
June 2022 Repurchase Plan | Subsequent event | |||||||
Treasury Stock Purchase | |||||||
Share repurchase program, authorized remaining amount | 182,800,000 | ||||||
June 2022 Repurchase Plan | Maximum | |||||||
Treasury Stock Purchase | |||||||
Share repurchase program, authorized amount | $ 500,000,000 | ||||||
November 2022 Repurchase Plan | |||||||
Treasury Stock Purchase | |||||||
Common stock repurchased (in shares) | 0 | ||||||
November 2022 Repurchase Plan | Subsequent event | |||||||
Treasury Stock Purchase | |||||||
Share repurchase program, authorized remaining amount | $ 500,000,000 | ||||||
November 2022 Repurchase Plan | Maximum | |||||||
Treasury Stock Purchase | |||||||
Share repurchase program, authorized amount | $ 500,000,000 |
STOCK-BASED COMPENSATION - Plan
STOCK-BASED COMPENSATION - Plans (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) plan shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 shares | |
STOCK-BASED COMPENSATION | ||||
Stock-based compensation plans | plan | 2 | |||
Aggregate amount of common stock authorized (in shares) | 46,169,367 | |||
Compensation expense on share-based plans | $ | $ 64,100 | $ 70,500 | $ 70,300 | |
Excess tax benefit realized for tax deductions from non-qualified stock option exercises and disqualifying dispositions of incentive stock options | $ | 9,100 | $ 6,800 | $ 10,500 | |
Restricted stock units | Non-employee directors | ||||
STOCK-BASED COMPENSATION | ||||
Annual equity retainer in the form of stock units at each annual meeting | $ | $ 175,000 | |||
Omnibus Incentive Plan 2020 [Member] | ||||
STOCK-BASED COMPENSATION | ||||
Aggregate amount of common stock authorized (in shares) | 32,000,000 | |||
Reduction in number of shares for each share granted | 1 | |||
Shares available for grant | 38,873,388 | |||
Omnibus Incentive Plan 2020 [Member] | Restricted Stock Units And Performance Share Units [Member] | Minimum [Member] | ||||
STOCK-BASED COMPENSATION | ||||
Vesting period | 3 years | |||
Omnibus Incentive Plan 2020 [Member] | Restricted Stock Units And Performance Share Units [Member] | Maximum [Member] | ||||
STOCK-BASED COMPENSATION | ||||
Vesting period | 5 years | |||
Omnibus Incentive Plan 2020 [Member] | Employee Stock Option [Member] | ||||
STOCK-BASED COMPENSATION | ||||
Expiration period (in years) | 10 years | |||
Omnibus Incentive Plan 2020 [Member] | Employee Stock Option [Member] | Minimum [Member] | ||||
STOCK-BASED COMPENSATION | ||||
Vesting period | 3 years | |||
Omnibus Incentive Plan 2020 [Member] | Employee Stock Option [Member] | Maximum [Member] | ||||
STOCK-BASED COMPENSATION | ||||
Vesting period | 5 years | |||
Omnibus Incentive Plan 2011 [Member] | ||||
STOCK-BASED COMPENSATION | ||||
Aggregate amount of common stock authorized (in shares) | 14,169,367 | |||
Reduction in number of shares for each share granted | 2.6 | |||
Common stock granted, net of cancellations (in shares) | 5,696,341 | |||
Stock Incentive Plan For Nonemployee Directors 2017 [Member] | ||||
STOCK-BASED COMPENSATION | ||||
Aggregate amount of common stock authorized (in shares) | 1,250,000 | |||
Common stock granted, net of cancellations (in shares) | 116,791 | |||
Shares available for grant | 1,133,209 |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value Assumptions (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted-average assumptions used to estimate the fair value of options granted | |||||||
Dividend yield (as a percent) | 0% | 0% | 0% | ||||
Expected volatility (as a percent) | 27.70% | 28.90% | 30.40% | ||||
Risk-free interest rate (as a percent) | 2.15% | 0.85% | 0.70% | ||||
Expected term | 6 years 1 month 6 days | 5 years 9 months 18 days | 5 years 9 months 18 days | ||||
Employee Stock Option [Member] | |||||||
Stock options, Number of Shares | |||||||
Balance at the beginning of the period (in shares) | 13,860 | 13,860 | |||||
Granted (in shares) | 32 | 34 | 8 | 2,489 | |||
Exercised (in shares) | (1,411) | ||||||
Cancelled or forfeited (in shares) | (157) | ||||||
Balance at the end of the period (in shares) | 14,855 | 14,855 | 13,860 | ||||
Vested and expected to vest in the future at the end of the period (in shares) | 14,509 | 14,509 | |||||
Exercisable at the end of the period (in shares) | 9,764 | 9,764 | |||||
Stock options, Weighted-Average Exercise Price Per Share | |||||||
Balance at the beginning of the period (in dollars per share) | $ 48.19 | $ 48.19 | |||||
Granted (in dollars per share) | $ 91.10 | $ 95.72 | $ 88.05 | $ 73.96 | |||
Exercised (in dollars per share) | 45.37 | ||||||
Cancelled or forfeited (in dollars per share) | 72.15 | ||||||
Balance at the end of the period (in dollars per share) | 52.75 | 52.75 | $ 48.19 | ||||
Vested and expected to vest in the future at the end of the period (in dollars per share) | 52.22 | 52.22 | |||||
Exercisable at the end of the period (in dollars per share) | $ 42.81 | $ 42.81 | |||||
Weighted-Average Remaining Contractual Term (in years) | |||||||
Weighted-Average Remaining Contractual Terms (in years) | 5 years | 5 years 1 month 6 days | |||||
Vested and expected to vest in the future at the end of the period | 4 years 10 months 24 days | ||||||
Exercisable at the end of the period | 3 years 4 months 24 days | ||||||
Aggregate Intrinsic Value | |||||||
Balance at the beginning of the period | $ 663,148 | $ 663,148 | |||||
Balance at the end of the period | $ 724,651 | 724,651 | $ 663,148 | ||||
Vested and expected to vest in the future at the end of the period | 715,462 | 715,462 | |||||
Exercisable at the end of the period | $ 573,325 | $ 573,325 |
STOCK-BASED COMPENSATION - Equi
STOCK-BASED COMPENSATION - Equity Awards (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
STOCK-BASED COMPENSATION | |||||||
Total employee and non-employee share-based compensation expense included in income, before income tax | $ 64,109 | $ 70,483 | $ 70,289 | ||||
Compensation cost charged against income | |||||||
Operating expenses | 64,109 | 70,483 | 70,289 | ||||
Less: Amount of income tax benefit recognized in earnings | (13,175) | (14,228) | (15,499) | ||||
Amount charged against net income | 50,934 | 56,255 | 54,790 | ||||
Operating Expense [Member] | |||||||
STOCK-BASED COMPENSATION | |||||||
Total employee and non-employee share-based compensation expense included in income, before income tax | $ 64,100 | $ 70,500 | $ 70,300 | ||||
Employee Stock Option [Member] | |||||||
STOCK-BASED COMPENSATION | |||||||
Weighted-average grant-date fair value of options granted (in dollars per share) | $ 23.47 | $ 25.80 | $ 18.82 | ||||
Total intrinsic value of options exercised | $ 68,200 | $ 51,200 | $ 68,800 | ||||
Cash received from option exercises | 64,000 | $ 45,700 | $ 72,900 | ||||
Total unrecognized compensation expense related to non-vested shares granted to employees | $ 69,500 | $ 69,500 | |||||
Cost expected to be recognized over a weighted-average period | 2 years 8 months 12 days | ||||||
Stock units expected to vest (in shares) | 14,509 | 14,509 | |||||
Restricted Stock Units [Member] | |||||||
STOCK-BASED COMPENSATION | |||||||
Total unrecognized compensation expense related to non-vested shares granted to employees | $ 36,700 | $ 36,700 | |||||
Cost expected to be recognized over a weighted-average period | 1 year 8 months 12 days | ||||||
Stock units expected to vest (in shares) | 1,000 | 1,000 | |||||
Number of Shares | |||||||
Non-vested at the beginning of the period (in shares) | 910 | 910 | |||||
Granted (in shares) | 1 | 6 | 15 | 484 | |||
Vested (in shares) | (389) | ||||||
Forfeited/cancelled (in shares) | (14) | ||||||
Non-vested at the end of the period (in shares) | 1,013 | 1,013 | 910 | ||||
Weighted Average Grant-Date Fair Value | |||||||
Non-vested at the beginning of the period (in dollars per share) | $ 69.02 | $ 69.02 | |||||
Granted (in dollars per share) | $ 90.29 | $ 95.17 | $ 87.52 | $ 71.88 | 74.26 | $ 89.12 | $ 62.97 |
Vested (in dollars per share) | 64.59 | ||||||
Forfeited/cancelled (in dollars per share) | 68.27 | ||||||
Non-vested at the end of the period (in dollars per share) | $ 72.54 | $ 72.54 | $ 69.02 | ||||
Performance Share Units [Member] | |||||||
STOCK-BASED COMPENSATION | |||||||
Percentage of target performance | 100% | ||||||
Performance Share Units [Member] | Maximum [Member] | |||||||
STOCK-BASED COMPENSATION | |||||||
Percentage of target performance | 200% | ||||||
Performance Share Units [Member] | Minimum [Member] | |||||||
STOCK-BASED COMPENSATION | |||||||
Percentage of target performance | 0% | ||||||
Incentive Stock Options [Member] | |||||||
STOCK-BASED COMPENSATION | |||||||
Total employee and non-employee share-based compensation expense included in income, before income tax | $ 9,400 | $ 8,300 | $ 9,400 | ||||
Non Qualified Stock Options [Member] | |||||||
STOCK-BASED COMPENSATION | |||||||
Total employee and non-employee share-based compensation expense included in income, before income tax | 54,000 | 60,600 | 58,200 | ||||
Other Share-based Awards [Member] | |||||||
STOCK-BASED COMPENSATION | |||||||
Total unrecognized compensation expense related to non-vested shares granted to employees | $ 100 | $ 100 | |||||
Cost expected to be recognized over a weighted-average period | 1 year | ||||||
Total employee and non-employee share-based compensation expense included in income, before income tax | $ 700 | $ 1,600 | $ 2,700 |
STOCK-BASED COMPENSATION - Exer
STOCK-BASED COMPENSATION - Exercise Prices (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2022 $ / shares shares | |
Stock-Based Compensation | |
Number Outstanding (in shares) | shares | 14,855 |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 5 years |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 52.75 |
Options Exercisable (in shares) | shares | 9,764 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 42.81 |
Exercise Price Range One [Member] | |
Stock-Based Compensation | |
Stock options, range of exercise prices, low end of range (in dollars per share) | 15.71 |
Stock options, range of exercise prices, high end of range (in dollars per share) | $ 36.05 |
Number Outstanding (in shares) | shares | 2,768 |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 9 months 18 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 20.75 |
Options Exercisable (in shares) | shares | 2,768 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 20.75 |
Exercise Price Range Two [Member] | |
Stock-Based Compensation | |
Stock options, range of exercise prices, low end of range (in dollars per share) | 37.10 |
Stock options, range of exercise prices, high end of range (in dollars per share) | $ 43.99 |
Number Outstanding (in shares) | shares | 1,751 |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 3 years 3 months 18 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 43.43 |
Options Exercisable (in shares) | shares | 1,751 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 43.43 |
Exercise Price Range Three [Member] | |
Stock-Based Compensation | |
Stock options, range of exercise prices, low end of range (in dollars per share) | 44.92 |
Stock options, range of exercise prices, high end of range (in dollars per share) | $ 46.27 |
Number Outstanding (in shares) | shares | 2,189 |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 3 years 2 months 12 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 45.60 |
Options Exercisable (in shares) | shares | 2,189 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 45.60 |
Exercise Price Range Four [Member] | |
Stock-Based Compensation | |
Stock options, range of exercise prices, low end of range (in dollars per share) | 48.11 |
Stock options, range of exercise prices, high end of range (in dollars per share) | $ 57.95 |
Number Outstanding (in shares) | shares | 529 |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 5 years 6 months |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 53.29 |
Options Exercisable (in shares) | shares | 313 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 52.96 |
Exercise Price Range Five [Member] | |
Stock-Based Compensation | |
Stock options, range of exercise prices, low end of range (in dollars per share) | 58.73 |
Stock options, range of exercise prices, high end of range (in dollars per share) | $ 58.73 |
Number Outstanding (in shares) | shares | 1,818 |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 5 years 2 months 12 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 58.73 |
Options Exercisable (in shares) | shares | 1,310 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 58.73 |
Exercise Price Range Six [Member] | |
Stock-Based Compensation | |
Stock options, range of exercise prices, low end of range (in dollars per share) | 58.77 |
Stock options, range of exercise prices, high end of range (in dollars per share) | $ 62.39 |
Number Outstanding (in shares) | shares | 2,247 |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 6 years 7 months 6 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 60.80 |
Options Exercisable (in shares) | shares | 1,252 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 60.53 |
Exercise Price Range Seven [Member] | |
Stock-Based Compensation | |
Stock options, range of exercise prices, low end of range (in dollars per share) | 62.92 |
Stock options, range of exercise prices, high end of range (in dollars per share) | $ 67.42 |
Number Outstanding (in shares) | shares | 43 |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 6 years 1 month 6 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 64.19 |
Options Exercisable (in shares) | shares | 26 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 63.46 |
Exercise Price Range Eight [Member] | |
Stock-Based Compensation | |
Stock options, range of exercise prices, low end of range (in dollars per share) | 73.23 |
Stock options, range of exercise prices, high end of range (in dollars per share) | $ 73.23 |
Number Outstanding (in shares) | shares | 2,263 |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 9 years 2 months 12 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 73.23 |
Exercise Price Range Nine [Member] | |
Stock-Based Compensation | |
Stock options, range of exercise prices, low end of range (in dollars per share) | 77.92 |
Stock options, range of exercise prices, high end of range (in dollars per share) | $ 97.80 |
Number Outstanding (in shares) | shares | 1,237 |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 8 years 4 months 24 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 88.32 |
Options Exercisable (in shares) | shares | 155 |
Options Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 89.02 |
Exercise Price Range Ten [Member] | |
Stock-Based Compensation | |
Stock options, range of exercise prices, low end of range (in dollars per share) | 98.49 |
Stock options, range of exercise prices, high end of range (in dollars per share) | $ 98.49 |
Number Outstanding (in shares) | shares | 10 |
Options Outstanding, Weighted Average Remaining Contractual Term (Years) | 9 years 7 months 6 days |
Options Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 98.49 |
INCOME TAXES - Classification a
INCOME TAXES - Classification and Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Domestic and foreign components of company's income before income taxes | |||
Domestic | $ 1,327,459 | $ 1,431,797 | $ 1,374,402 |
Foreign | 244,505 | 369,622 | 251,755 |
INCOME BEFORE PROVISION FOR INCOME TAXES | 1,571,964 | 1,801,419 | 1,626,157 |
Intercompany royalties, management fees and interest charges from the Company's domestic to foreign entities | 85,000 | 61,100 | 54,200 |
Current: | |||
Federal | 247,482 | 273,115 | 259,073 |
State | 47,255 | 44,990 | 43,704 |
Foreign | 37,421 | 89,410 | 70,658 |
Total current provision | 332,158 | 407,515 | 373,435 |
Deferred: | |||
Federal | 19,111 | 14,750 | 11,401 |
State | 258 | 4,689 | 4,709 |
Foreign | 26,084 | 5,092 | (167,595) |
Total deferred provision | 45,453 | 24,531 | (151,485) |
Valuation allowance | 2,729 | (8,102) | (5,387) |
Total provision for income taxes | $ 380,340 | $ 423,944 | $ 216,563 |
Federal statutory rate (as a percent) | 21% | 21% | 21% |
Reconciliation of income tax expense | |||
U.S. Federal tax expense at statutory rates | $ 330,113 | $ 378,298 | $ 341,493 |
State income taxes, net of federal tax benefit | 35,848 | 38,894 | 37,478 |
Permanent differences | (5,450) | (4,168) | (1,064) |
Stock based compensation | 3,571 | 2,790 | 1,097 |
Intra-company transfer benefit | (165,075) | ||
Other | 1,371 | (649) | (7,388) |
Foreign rate differential | 12,158 | 16,881 | 15,409 |
Valuation allowance | 2,729 | (8,102) | (5,387) |
Total provision for income taxes | $ 380,340 | $ 423,944 | $ 216,563 |
INCOME TAXES - Deferred Taxes (
INCOME TAXES - Deferred Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Deferred Tax Assets: | ||||
Reserve for sales returns | $ 2,262 | $ 889 | ||
Reserve for inventory obsolescence | 4,651 | 3,643 | ||
Reserve for marketing development fund | 7,487 | 8,951 | ||
Capitalization of inventory costs | 6,537 | 2,533 | ||
State franchise tax - current | 2,339 | 2,493 | ||
Accrued compensation | 10,499 | 2,854 | ||
Accrued other liabilities | 1,820 | 4,634 | ||
Deferred revenue | 63,196 | 68,557 | ||
Stock-based compensation | 25,526 | 24,635 | ||
Foreign net operating loss carryforward | 19,896 | 14,507 | ||
Prepaid supplies | 7,901 | 6,317 | ||
Termination payments | 52,466 | 58,042 | ||
Operating lease liabilities | 5,739 | 4,711 | ||
Intangibles | 33,603 | 72,666 | ||
Impairment-trademarks and others | 2,567 | 2,047 | ||
Other deferred tax assets | 33,209 | 33,013 | ||
Total gross deferred tax assets | 279,698 | 310,492 | ||
Deferred Tax Liabilities: | ||||
Amortization of trademarks | (39,237) | (41,517) | ||
State franchise tax - deferred | (5,503) | (5,505) | ||
Operating lease ROU assets | (5,739) | (4,711) | ||
Other deferred tax liabilities | (5) | (618) | ||
Depreciation | (22,433) | (5,907) | ||
Total gross deferred tax liabilities | (72,917) | (58,258) | ||
Valuation Allowance | (29,742) | (27,013) | ||
Net deferred tax assets | 177,039 | 225,221 | ||
Increase to provision for income taxes | 2,700 | $ 8,100 | $ 5,400 | |
Net operating loss carryforwards | 92,100 | |||
Net operating loss carryforwards subject to indefinite carryforward | 78,800 | |||
Net operating loss carryforwards that begin to expire in 2022 | $ 13,300 | |||
Recognized deferred tax assets | $ 165,100 |
INCOME TAXES - Unrecognized Tax
INCOME TAXES - Unrecognized Tax Benefit Rollforward (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Gross unrecognized tax benefits, roll forward | |||
Balance at the beginning of the period | $ 742 | $ 2,993 | |
Additions for tax positions related to the prior years | $ 3,020 | ||
Decreases for tax positions related to prior years | $ (742) | (2,251) | |
Balance at the end of the period | 3,020 | $ 742 | |
Accrued interest and penalties related to unrecognized tax benefits | $ 400 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Weighted-average shares outstanding: | |||
Basic | 526,779 | 528,763 | 529,639 |
Dilutive securities | 6,442 | 6,876 | 5,168 |
Diluted | 533,221 | 535,639 | 534,807 |
Totaling options and awards outstanding (in shares) | 3,000 | 800 | 1,800 |
EMPLOYEE BENEFIT PLAN (Details)
EMPLOYEE BENEFIT PLAN (Details) - Employee 401(k) Plan - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
EMPLOYEE BENEFIT PLAN | |||
Employer matching contribution as a percentage of the employee's contribution | 50% | ||
Percent of employee's earnings eligible for employer matching contribution | 8% | ||
Vesting period of contribution by the company | 4 years | ||
Matching contributions by the company | $ 6.9 | $ 5.5 | $ 4.7 |
2 years of service | |||
EMPLOYEE BENEFIT PLAN | |||
Percentage of award vesting | 50% | ||
3 years of service | |||
EMPLOYEE BENEFIT PLAN | |||
Percentage of award vesting | 75% | ||
4 years of service | |||
EMPLOYEE BENEFIT PLAN | |||
Percentage of award vesting | 100% |
SEGMENT INFORMATION - Net Reven
SEGMENT INFORMATION - Net Revenues (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
SEGMENT INFORMATION | |||
Number of reportable segments | segment | 4 | ||
Number of operating segments | segment | 4 | ||
Net Sales | $ 6,311,050 | $ 5,541,352 | $ 4,598,638 |
Operating Income: | 1,584,721 | 1,797,467 | 1,633,153 |
Income before tax | 1,571,964 | 1,801,419 | 1,626,157 |
Recognition of deferred revenue | 21,400 | 21,500 | 21,400 |
Corporate and Unallocated | |||
SEGMENT INFORMATION | |||
Operating Income: | 434,579 | 373,913 | 348,170 |
Income before tax | (450,159) | (371,440) | (355,448) |
Monster Energy Drinks | |||
SEGMENT INFORMATION | |||
Net Sales | 5,833,211 | 5,220,673 | 4,305,246 |
Monster Energy Drinks | Operating segment | |||
SEGMENT INFORMATION | |||
Net Sales | 5,833,211 | 5,220,673 | 4,305,246 |
Operating Income: | 1,850,053 | 1,990,785 | 1,820,346 |
Income before tax | 1,853,011 | 1,992,185 | 1,820,625 |
Recognition of deferred revenue | 40,000 | 41,500 | 42,100 |
Strategic Brands | |||
SEGMENT INFORMATION | |||
Net Sales | 353,490 | 294,762 | 266,354 |
Strategic Brands | Operating segment | |||
SEGMENT INFORMATION | |||
Net Sales | 353,490 | 294,762 | 266,354 |
Operating Income: | 197,709 | 173,660 | 155,047 |
Income before tax | 197,843 | 173,739 | 155,047 |
Alcohol Brands | |||
SEGMENT INFORMATION | |||
Net Sales | 101,405 | ||
Alcohol Brands | Operating segment | |||
SEGMENT INFORMATION | |||
Net Sales | 101,405 | ||
Operating Income: | (31,502) | ||
Income before tax | (31,772) | ||
Other | |||
SEGMENT INFORMATION | |||
Net Sales | 22,944 | 25,917 | 27,038 |
Other | Operating segment | |||
SEGMENT INFORMATION | |||
Net Sales | 22,944 | 25,917 | 27,038 |
Operating Income: | 3,040 | 6,935 | 5,930 |
Income before tax | $ 3,041 | $ 6,935 | $ 5,933 |
SEGMENT INFORMATION - Depreciat
SEGMENT INFORMATION - Depreciation and Amortization (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SEGMENT INFORMATION | |||
Depreciation and amortization | $ 61,241 | $ 50,155 | $ 57,030 |
Corporate and Unallocated | |||
SEGMENT INFORMATION | |||
Depreciation and amortization | 10,459 | 10,053 | 9,944 |
Monster Energy Drinks | Operating segment | |||
SEGMENT INFORMATION | |||
Depreciation and amortization | 31,957 | 34,532 | 38,277 |
Strategic Brands | Operating segment | |||
SEGMENT INFORMATION | |||
Depreciation and amortization | 924 | 1,085 | 4,178 |
Alcohol Brands | Operating segment | |||
SEGMENT INFORMATION | |||
Depreciation and amortization | 13,440 | ||
Other | Operating segment | |||
SEGMENT INFORMATION | |||
Depreciation and amortization | $ 4,461 | $ 4,485 | $ 4,631 |
SEGMENT INFORMATION - Expenses
SEGMENT INFORMATION - Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SEGMENT INFORMATION | |||
Stock-based compensation expense | $ 64.1 | $ 70.5 | $ 70.3 |
Corporate and Unallocated | |||
SEGMENT INFORMATION | |||
Payroll costs | 278.7 | 258.6 | 234.1 |
Stock-based compensation expense | 63.1 | 70.3 | 69.9 |
Professional service expenses | 87.1 | 77.9 | 67.6 |
Insurance costs | 10.5 | 9.3 | 7.5 |
Other operating expenses | $ 58.3 | $ 28.1 | $ 39 |
SEGMENT INFORMATION - Concentra
SEGMENT INFORMATION - Concentration Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
SEGMENT INFORMATION | |||
Net Sales | $ 6,311,050 | $ 5,541,352 | $ 4,598,638 |
Sales | Outside United States | |||
SEGMENT INFORMATION | |||
Net Sales | $ 2,360,000 | $ 2,040,000 | $ 1,510,000 |
Coca Cola Company | Sales | Customer concentration | |||
SEGMENT INFORMATION | |||
Percentage of net sales | 2% | 2% | 2% |
Coca Cola Company | Sales | Customer concentration | Outside United States | |||
SEGMENT INFORMATION | |||
Percentage of net sales | 37% | 37% | 33% |
Coca-Cola Consolidated, Inc | Sales | Customer concentration | |||
SEGMENT INFORMATION | |||
Percentage of net sales | 11% | 12% | 12% |
Reyes Coca-Cola Bottling, LLC | Sales | Customer concentration | |||
SEGMENT INFORMATION | |||
Percentage of net sales | 9% | 10% | 11% |
Reyes Coca-Cola Bottling | Sales | Customer concentration | |||
SEGMENT INFORMATION | |||
Percentage of net sales | 13% | 12% | 10% |
SEGMENT INFORMATION - Goodwill
SEGMENT INFORMATION - Goodwill and other intangible assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
SEGMENT INFORMATION | ||
Goodwill and other intangible assets | $ 2,638,351 | $ 2,404,029 |
Monster Energy Drinks | Operating segment | ||
SEGMENT INFORMATION | ||
Goodwill and other intangible assets | 1,424,212 | 1,420,503 |
Strategic Brands | Operating segment | ||
SEGMENT INFORMATION | ||
Goodwill and other intangible assets | 979,896 | 978,032 |
Alcohol Brands | Operating segment | ||
SEGMENT INFORMATION | ||
Goodwill and other intangible assets | 233,140 | |
Other | Operating segment | ||
SEGMENT INFORMATION | ||
Goodwill and other intangible assets | $ 1,103 | $ 5,494 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) director | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Coca Cola Company | |||
RELATED PARTY TRANSACTIONS | |||
Net sales | $ 129,400 | $ 120,400 | $ 83,300 |
Purchases from related party | $ 27,100 | 27,200 | 23,900 |
Coca Cola Company | Voting Interests | |||
RELATED PARTY TRANSACTIONS | |||
Related Party Ownership Interest (as a percent) | 19.60% | ||
TCCC Subsidiaries and TCCC Related parties | |||
RELATED PARTY TRANSACTIONS | |||
Commission expenses | $ 49,300 | 77,500 | 56,500 |
TCCC Subsidiaries and TCCC Related parties | Operating expense | |||
RELATED PARTY TRANSACTIONS | |||
Commission expenses | 28,700 | ||
TCCC Related Parties and TCCC Independent Bottlers | Operating expense | |||
RELATED PARTY TRANSACTIONS | |||
Commission expenses | 30,700 | 21,400 | |
TCCC Subsidiaries | |||
RELATED PARTY TRANSACTIONS | |||
Accounts receivable, net | 88,169 | 94,647 | |
Accounts payable | (35,467) | (35,248) | |
Accrued promotional allowances | (11,222) | (4,536) | |
Accrued liabilities | (14,733) | (26,616) | |
TCCC Subsidiaries | Monster Energy Drinks | |||
RELATED PARTY TRANSACTIONS | |||
Contract manufacturing expenses | $ 30,600 | 31,500 | 17,200 |
Principal Owners | |||
RELATED PARTY TRANSACTIONS | |||
Number of directors | director | 1 | ||
Expenses incurred in connection with materials or services provided by a related party | $ 6,000 | $ 3,600 | $ 2,100 |
Business Travelling Expenses | $ 80 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event | Feb. 28, 2023 shares |
SUBSEQUENT EVENTS | |
Stock split ratio | 2 |
Stock dividend (in percent) | 100% |
Additional share of common stock | 1 |
SCHEDULE II - VALUATION AND Q_2
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for doubtful accounts, sales returns and cash discounts | |||
Changes to valuation allowance | |||
Balance at beginning of period | $ 4,676 | $ 1,878 | $ 2,045 |
Charged to cost and expenses | 23,177 | 14,799 | 9,664 |
Deductions | (17,393) | (12,001) | (9,831) |
Balance at end of period | 10,460 | 4,676 | 1,878 |
Allowance on Deferred Tax Assets and Unrecognized Tax Benefits | |||
Changes to valuation allowance | |||
Balance at beginning of period | 27,013 | 35,993 | 43,853 |
Charged to cost and expenses | 6,153 | (8,980) | (7,860) |
Balance at end of period | $ 33,166 | $ 27,013 | $ 35,993 |