Snapple 2009 Annual Report Download - page 49

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
Consolidated Operations
The following table sets forth our consolidated results of operation for the years ended December 31, 2009 and
2008 (dollars in millions).
Dollars Percent Dollars Percent
Percentage
Change
2009 2008
For the Year Ended December 31,
Net sales ...................................... $ 5,531 100.0% $ 5,710 100.0% (3.1)%
Cost of sales ................................... 2,234 40.4 2,590 45.4 (13.7)
Gross profit .................................... 3,297 59.6 3,120 54.6 5.7
Selling, general and administrative expenses . ........... 2,135 38.6 2,075 36.3 2.9
Depreciation and amortization ...................... 117 2.1 113 2.0 3.5
Impairment of goodwill and intangible assets ........... — — 1,039 18.2 NM
Restructuring costs............................... — — 57 1.0 NM
Other operating (income) expense ................... (40) 0.7 4 0.1 NM
Income (loss) from operations ...................... 1,085 19.6 (168) (3.0) 745.8
Interest expense ................................. 243 4.4 257 4.5 (5.4)
Interest income ................................. (4) (0.1) (32) (0.6) (87.5)
Other income, net ............................... (22) (0.4) (18) (0.3) 22.2
Income (loss) before provision for income taxes and equity
in earnings of unconsolidated subsidiaries . ........... 868 15.7 (375) (6.6) 331.5
Provision for income taxes ......................... 315 5.7 (61) (1.1) 616.4
Income (loss) before equity in earnings of unconsolidated
subsidiaries .................................. 553 10.0 (314) (5.5) 276.1
Equity in earnings of unconsolidated subsidiaries, net of
tax......................................... 2 — 2 — NM
Net income (loss) ............................... $ 555 10.0% $ (312) (5.5)% 277.9%
Volume
Volume (BCS) increased 3% for the year ended December 31, 2009 compared with the year ended Decem-
ber 31, 2008. CSDs increased 4% and NCBs increased 2%. The absence of Hansen sales following the contract
termination settlement in the United States and Mexico negatively impacted both total volumes and CSD volumes
by 1% for the year ended December 31, 2009. In CSDs, Dr Pepper increased 2% led by the launch of the Cherry line
extensions and strength in Diet Dr Pepper. 7UP, Sunkist soda, A&W and Canada Dry (collectively, our “Core 4
brands”) remained flat while Squirt decreased 8%. Driven by expanded distribution, the Crush brand grew 198%,
which added an additional 48 million cases in 2009 in Beverage Concentrates and Latin America Beverages. In
NCBs, 14% growth in Hawaiian Punch and 8% growth in Mott’s were partially offset by declines of 11% in Snapple
and 1% in both Aguafiel and Clamato. Aguafiel declined 1% reflecting price increases and a more competitive
environment. Snapple volumes declined primarily due to higher net pricing associated with the Snapple premium
product restage and the impact of a continued slowdown in consumer spending on premium beverage products. In
2009, we extended and repositioned our Snapple offerings to support the long term health of the brand.
In North America volume increased 3% and in Mexico and the Caribbean volume increased 2%.
Net Sales
Net sales decreased $179 million, or 3%, for the year ended December 31, 2009 compared with the year ended
December 31, 2008. The impact of the contract termination settlement with Hansen reduced net sales for the year
ended December 31, 2009 by $218 million. Additionally, the impact of foreign currency reduced net sales by
approximately $77 million. These decreases were partially offset by price increases and an increase in volumes,
primarily driven by the expanded distribution of Crush.
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