Snapple 2014 Annual Report Download - page 36

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Year Ended December 31, 2013 Compared to Year Ended December 31, 2012
Consolidated Operations
The following table sets forth our consolidated results of operations for the years ended December 31, 2013 and 2012 (dollars
in millions, except per share data):
For the Year Ended December 31,
2013 2012 Percentage
Dollars Percent Dollars Percent Change
Net sales $ 5,997 100.0% $ 5,995 100.0% — %
Cost of sales 2,499 41.7 2,500 41.7
Gross profit 3,498 58.3 3,495 58.3 —
Selling, general and administrative expenses 2,272 37.9 2,268 37.8
Multi-employer pension plan withdrawal 56 0.9 — —
Depreciation and amortization 115 1.9 124 2.1
Other operating expense, net 9 0.2 11 0.2
Income from operations 1,046 17.4 1,092 18.2 (4)
Interest expense 123 2.0 125 2.1
Interest income (2) — (2) —
Other expense (income), net 383 6.4 (9)(0.2)
Income before (benefit) provision for income taxes and
equity in earnings of unconsolidated subsidiaries 542 9.0 978 16.3 NM
(Benefit) provision for income taxes (81)(1.4) 349 5.8
Income before equity in earnings of unconsolidated
subsidiaries 623 10.4 629 10.5
Equity in earnings of unconsolidated subsidiaries, net of tax 1 — — —
Net income $ 624 10.4% $ 629 10.5% (1)%
Earnings per common share:
Basic $ 3.08 NM $ 2.99 NM 3 %
Diluted $ 3.05 NM $ 2.96 NM 3 %
Volume (BCS). Volume (BCS) decreased 2% for the year ended December 31, 2013 compared with the year ended December
31, 2012. In the U.S. and Canada, volume declined 2%, and in Mexico and the Caribbean, volume increased 3%, compared with
the year ago period. Both CSD volume and NCB volume declined 2%.
In CSDs, volumes were unfavorably impacted by continued category headwinds which included increased consumer concerns
about health and wellness. Dr Pepper volume declined 2%. Our Core 4 brands, which included the impact of the launch of our
Core 4 TEN products, decreased 1% compared to the year ago period. This result was driven by a a 5% decrease in 7UP, a 7%
decline in Sunkist soda and a 2% decrease in A&W, partially offset by a 6% increase in Canada Dry. Crush, Squirt and RC Cola
declined 7%, 4% and 4%, respectively. Sun Drop declined double-digits. Other brands in total declined 3%. These decreases were
partially offset by growth of 11% in Peñafiel as a result of product and package innovation and a 6% increase in Schweppes
reflecting distribution gains in our seltzer water and growth in the ginger ale category.
In NCBs, decreases were driven by a 9% decrease in Hawaiian Punch as a result of lower promotional activity and declines
within the category and an 8% decline in other brands. The decline was partially offset by a 2% increase in Snapple as a result of
package and product innovation and a 3% increase in Mott's due to distribution gains in our juice and sauce categories. Our water
category increased 3%, led by Aguafiel. Clamato increased 6%.
Net Sales. Net sales increased $2 million for the year ended December 31, 2013 compared with the year ended December 31,
2012. The increase was attributable to favorable mix, net pricing increases and favorable foreign currency translation, substantially
offset by lower branded sales volumes and an unfavorable comparison of trade adjustments.