Snapple 2009 Annual Report Download - page 55

Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
Consolidated Operations
The following table sets forth our consolidated results of operation for the years ended December 31, 2008 and
2007 (dollars in millions).
Dollars Percent Dollars Percent
Percentage
Change
2008 2007
For the Year Ended December 31,
Net sales ................................. $ 5,710 100.0% $ 5,695 100.0% 0.3%
Cost of sales .............................. 2,590 45.4 2,564 45.0 1.0
Gross profit ............................. 3,120 54.6 3,131 55.0 (0.4)
Selling, general and administrative expenses ....... 2,075 36.3 2,018 35.5 2.8
Depreciation and amortization ................. 113 2.0 98 1.7 15.3
Impairment of goodwill and intangible assets ...... 1,039 18.2 6 0.1 NM
Restructuring costs ......................... 57 1.0 76 1.3 (25.0)
Other operating expense (income) .............. 4 0.1 (71) (1.2) NM
(Loss) income from operations ............... (168) (3.0) 1,004 17.6 NM
Interest expense ............................ 257 4.5 253 4.4 1.6
Interest income ............................ (32) (0.6) (64) (1.1) (50.0)
Other income, net .......................... (18) (0.3) (2) — NM
(Loss) income before provision for income taxes
and equity in earnings of unconsolidated
subsidiaries ........................... (375) (6.6) 817 14.3 NM
Provision for income taxes .................... (61) (1.1) 322 5.6 NM
(Loss) income before equity in earnings of
unconsolidated subsidiaries.................. (314) (5.5) 495 8.7 NM
Equity in earnings of unconsolidated subsidiaries,
netoftax............................... 2 — 2 — —
Net (loss) income .......................... $ (312) (5.5)% $ 497 8.7% NM
Volume
Volume (BCS) declined 2% for the year ended December 31, 2008 as compared with the year ended
December 31, 2007. CSDs declined 1% and NCBs declined 7%. The absence of glaceau brand (“glaceau”) sales
following the termination of the distribution agreement in 2007 negatively impacted total volumes and NCB
volumes by 1% and 7%, respectively. In CSDs, Dr Pepper declined 1% primarily due to continued declines in the
“Soda Fountain Classics” line. Our Core 4 brands declined 2%, primarily related to a 7% decline in 7UP as the brand
cycled the final stages of launch support for 7UP with 100% Natural Flavors and the re-launch of Diet 7UP, partially
offset by a 3% increase in Canada Dry due to the launch of Canada Dry Green Tea Ginger Ale. In NCBs, 9% growth
in Hawaiian Punch, 6% growth in Clamato and 2% growth in Mott’s were more than offset by declines of 17% in
Aguafiel, 7% in Snapple and the loss of glaceau distribution rights. Aguafiel declined 17% reflecting price increases
and a more competitive environment. Our Snapple volumes were down 7% as the brand overlapped 5% growth in
the prior year driven by aggressive promotional activity that we chose not to repeat in 2008, as well as the impact of
a weakened retail environment on our premium products. In North America volume declined 2% and in Mexico and
the Caribbean volume declined 4%.
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