GNC 2012 Annual Report Download - page 60

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Table of Contents
Results of Operations
(Dollars in millions and percentages expressed as a percentage of total net revenue)
Year Ended December 31,
2011 2010 2009
Revenues:
Retail $ 1,518.5 73.3% $ 1,344.4 73.8% $ 1,256.3 73.6%
Franchise 334.8 16.1% 293.6 16.1% 264.2 15.5%
Manufacturing / Wholesale:
Intersegment revenues(1) 224.1 10.8% 209.5 11.5% 201.3 11.8%
Third Party 218.9 10.6% 184.2 10.1% 186.5 10.9%
Subtotal Manufacturing / Wholesale 443.0 21.4% 393.7 213.6% 387.8 22.7%
Intersegment elimination(1) (224.1) -10.8% (209.5) -11.5% (201.3) -11.8%
Total revenues 2,072.2 100.0% 1,822.2 100.0% 1,707.0 100.0%
Operating expenses:
Cost of sales, including warehousing, distribution and occupancy costs 1,318.4 63.6% 1,179.9 64.8% 1,116.4 65.4%
Compensation and related benefits 291.3 14.1% 273.8 15.0% 263.0 15.4%
Advertising and promotion 52.9 2.5% 51.7 2.8% 50.0 2.9%
Other selling, general and administrative expenses 105.5 5.1% 92.9 5.1% 86.9 5.1%
Transaction and strategic alternative related costs 13.5 0.7% 4.0 0.2% — 0.0%
Amortization expense 8.0 0.4% 7.8 0.4% 9.8 0.6%
Foreign currency gain (loss) 0.1 0.0% (0.3) 0.0% (0.1) 0.0%
Total operating expenses 1,789.7 86.4% 1,609.8 88.3% 1,526.0 89.4%
Operating income:
Retail 243.5 11.8% 181.9 10.0% 153.1 9.0%
Franchise 111.3 5.4% 93.8 5.1% 80.8 4.7%
Manufacturing / Wholesale 82.2 4.0% 69.4 3.8% 73.5 4.3%
Unallocated corporate and other costs:
Warehousing and distribution costs (60.6) -3.0% (55.0) -3.0% (53.6) -3.1%
Corporate costs (80.4) -3.9% (73.7) -4.0% (72.8) -4.3%
Transaction and strategic alternative related costs (13.5) -0.7% (4.0) -0.2% — 0.0%
Subtotal unallocated corporate and other costs, net (154.5) -7.6% (132.7) -7.3% (126.4) -7.4%
Total operating income 282.5 13.6% 212.4 11.7% 181.0 10.6%
Interest expense, net 74.9 65.4 69.9
Income before income taxes 207.6 147.0 111.1
Income tax expense 75.3 50.4 41.6
Net income $ 132.3 $ 96.6 $ 69.5
Intersegment revenues are eliminated from consolidated revenue.
Note: The numbers in the above table have been rounded. All calculations related to the Results of Operations for the year-over-year comparisons below were
derived from unrounded data and could occasionally differ immaterially if you were to use the table above for these calculations.
Comparison of the Years Ended December 31, 2011 and 2010
Revenues
Our consolidated net revenues increased $250.0 million, or 13.7%, to $2,072.2 million for the year ended December 31, 2011 compared to
$1,822.2 million in 2010. The increase was the result of increased sales in each of our segments.
Retail. Revenues in our Retail segment increased $174.1 million, or 13.0%, to $1,518.5 million for the year ended December 31, 2011 compared to
$1,344.4 million in 2010. Domestic retail revenue
57
(1)