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31
Year Ended December 31, 2011 Compared to Year Ended December 31, 2010
Consolidated Operations
The following table sets forth our consolidated results of operation for the years ended December 31, 2011 and 2010 (dollars
in millions, except per share data).
For the Year Ended December 31,
2011 2010 Percentage
Dollars Percent Dollars Percent Change
Net sales $ 5,903 100.0% $ 5,636 100.0% 5%
Cost of sales 2,485 42.1 2,243 39.8
Gross profit 3,418 57.9 3,393 60.2 1
Selling, general and administrative expenses 2,257 38.3 2,233 39.6
Depreciation and amortization 126 2.1 127 2.3
Other operating expense, net 11 0.2 8 0.1
Income from operations 1,024 17.3 1,025 18.2 —
Interest expense 114 1.9 128 2.3
Interest income (3)(0.1)(3)(0.1)
Loss on early extinguishment of debt — — 100 1.8
Other income, net (12)(0.2)(21)(0.4)
Income before provision for income taxes and equity in
earnings of unconsolidated subsidiaries 925 15.7 821 14.6 13
Provision for income taxes 320 5.5 294 5.3
Income before equity in earnings of unconsolidated
subsidiaries 605 10.2 527 9.4
Equity in earnings of unconsolidated subsidiaries, net of tax 1 — 1 —
Net income $ 606 10.3% $ 528 9.4% 15%
Earnings per common share:
Basic $ 2.77 NM $ 2.19 NM 26%
Diluted 2.74 NM 2.17 NM 26%
Volume (BCS). Volume (BCS) decreased 1% for the year ended December 31, 2011, compared with the year ended December
31, 2010. In the U.S. and Canada, volume decreased 1% and in Mexico and the Caribbean, volume increased 4% compared with
the year ago period. CSD volume remained flat, while NCB volume decreased 2%. In CSDs, Sun Drop increased 9 million cases
compared with the year ago period due to the national launch of the brand. As a result of growth in our Latin America Beverages
segment, Peñafiel and Squirt increased 4% and 3%, respectively. Dr Pepper volume was flat as sales volume in the prior year was
driven by higher volumes a year ago caused by low holiday and summer pricing by a national account that did not recur in 2011
and higher retail pricing in the second half of 2011, which was offset in part by the impact of additional fountain availability and
the launch of Dr Pepper TEN in the fourth quarter of 2011. Crush declined 9% compared with the year ago period due to decreased
promotional activity. Canada Dry, 7UP, A&W and Sunkist soda (our "Core 4 brands") were down 2% compared to the year ago
period as a double-digit decline in Sunkist soda, mid single-digit decline in 7UP and low single-digit decline in A&W were partially
offset by a double-digit increase in Canada Dry due to targeted marketing programs. Decreases in NCBs were driven by a 9%
decrease in Mott's due to larger-than-normal price increases as a result of the significant increase in the cost of apple juice
concentrate, promotional activities that did not recur in 2011 and a 5% decrease for Hawaiian Punch as a result of the impact from
higher pricing that was partially offset by increased sales volume from package innovation. These decreases were partially offset
by a 7% increase for Snapple as a result of distribution gains and package innovation and an 11% increase for Clamato driven
primarily by growth in our Latin America Beverages segment.