PLANO, Texas, April 27, 2016 /PRNewswire/ -- Dr Pepper
Snapple Group, Inc. (NYSE: DPS) reported first quarter 2016 EPS of
$0.96 compared to $0.81 in the prior year period. Core EPS were
$0.94, up 16%, compared to
$0.81 in the prior year period.
For the quarter, reported net sales increased 2% on favorable
product and package mix of 3%, price increases of 1% and a 1%
increase in sales volumes. These increases were partially offset by
2 percentage points of unfavorable foreign currency translation.
Net sales growth was also partially offset by unfavorable segment
mix, as well as higher discounts, which were primarily
related to our fountain foodservice business. Reported segment
operating profit (SOP) increased 11%, or $36
million, on net sales growth, commodity deflation and
planned lower marketing costs, partially offset by inflationary
increases in certain operating expenses.
Reported income from operations for the quarter was $313 million, including $7
million in unrealized commodity mark-to-market gains.
Reported income from operations was $270
million in the prior year period, including a $1 million unrealized commodity mark-to-market
loss. Core income from operations for the quarter was $306 million, up 13%, representing 20.6% of net
sales compared to 18.7% in the prior year period.
DPS President and CEO Larry Young
said, "We're off to a good start this year. Our teams stayed
focused on our strategy of unlocking growth across our priority
brands through integrated communication and execution. We gained
dollar share in both CSDs and sparkling waters in Nielsen measured
markets and delivered both product and package innovation to meet
consumers' evolving needs. Rapid Continuous Improvement (RCI)
continues to enhance growth and productivity across the
business."
EPS
reconciliation
|
First
Quarter
|
2016
|
2015
|
Percent
Change
|
Reported
EPS
|
$0.96
|
$0.81
|
19
|
|
|
|
|
Unrealized commodity
mark-to-market gain
|
(0.02)
|
-
|
|
|
------
|
------
|
------
|
Core EPS
|
$0.94
|
$0.81
|
16
|
Net sales and SOP in the tables and commentary below are
presented on a currency neutral basis. Beginning in the second
quarter of 2015, we excluded the impact of realized gains and
losses on foreign currency transactions from our currency neutral
calculation. Refer to the Definitions section of this press release
for details on how the company calculates currency neutral metrics.
For a reconciliation of non-GAAP to GAAP measures see pages A-5
through A-8 accompanying this release.
Summary of 2016
results
(Percent
change)
|
First
Quarter
|
|
As
Reported
|
Currency
Neutral
(Translation)
|
|
|
BCS Volume
|
2
|
2
|
|
|
Sales
Volume
|
1
|
1
|
|
|
Net Sales
|
2
|
4
|
|
|
SOP
|
11
|
11
|
|
|
BCS Volume
For the quarter, BCS volume increased 2%, with both carbonated
soft drinks (CSDs) and non-carbonated beverages (NCBs) increasing
2%.
By geography, U.S. and Canada
volume increased 2%, and Mexico
and the Caribbean volume increased
6%.
In CSDs, brand Dr Pepper increased 4% driven by growth in our
fountain foodservice business. Schweppes and Crush grew 10% and 6%,
respectively, on increased promotional activity at a large
retailer. Peñafiel grew 5%, and Squirt grew 3%. These increases
were partially offset by our Core 4 brands, which decreased 3%, as
a mid-single-digit increase in Canada Dry was more than offset by a
double-digit decrease in 7UP, a mid-single-digit decrease in
Sunkist soda and a low-single-digit decrease in A&W. Fountain
foodservice volume increased 10% in the quarter, partially impacted
by the timing of orders for a large customer.
In NCBs, our water category grew 22% on strong growth in Bai
brands, Aguafiel and FIJI. Snapple
grew 4%, while Clamato grew 10% primarily on increased promotional
activity. Hawaiian Punch decreased 7% on higher single serve
pricing, while Mott's declined 4% in the quarter.
Sales Volume
Sales volumes increased 1% in the quarter.
2016 Segment
results
(Percent
Change)
|
First
Quarter
|
|
|
As
Reported
|
Currency
Neutral
(Translation)
|
Sales
Volume
|
Net
Sales
|
SOP
|
Net
Sales
|
SOP
|
Beverage
Concentrates
|
1
|
1
|
2
|
1
|
3
|
Packaged
Beverages
|
(1)
|
4
|
24
|
4
|
24
|
Latin America
Beverages
|
6
|
(9)
|
(12)
|
6
|
-
|
Total
|
1
|
2
|
11
|
4
|
11
|
Beverage Concentrates
Net sales increased 1% in the quarter driven by concentrate
price increases taken at the beginning of the year and a 1%
increase in concentrate shipments, which were partially offset by
higher discounts, primarily related to our fountain foodservice
business. SOP increased 3% on net sales growth and planned lower
marketing costs, which were partially offset by increases in
certain operating costs.
Packaged Beverages
Net sales increased 4% in the quarter on favorable product and
package mix and price increases, partially offset by a 1% decline
in sales volumes. SOP increased 24% on net sales growth and lower
commodity, logistics and marketing costs, which were partially
offset by increases in certain operating expenses.
Latin America Beverages
Net sales increased 6% in the quarter on a 6% increase in sales
volumes. SOP was flat in the quarter, as net sales growth, lower
commodity costs and ongoing productivity improvements were
partially offset by the higher cost of certain U.S. dollar
denominated input costs as a result of the strengthening U.S.
dollar.
Furthermore, a $4 million
arbitration award related to our Mexican joint venture reduced SOP
growth by 24 percentage points in the quarter.
Corporate and Other Items
For the quarter, corporate costs totaled $64 million, which included $7 million in unrealized commodity mark-to-market
gains. Corporate costs in the prior year period were $71 million, which included a $1 million unrealized commodity mark-to-market
loss.
Net interest expense increased $6
million in the quarter primarily driven by higher debt
balances and refinancing of certain debt in the prior year.
For the quarter, the reported effective tax rate was 35.2%. The
effective tax rate in the prior year period was 35.7%.
Cash Flow
For the quarter, the company generated $177 million of cash from operating activities
compared to $101 million in the prior
year. Capital spending totaled $27
million compared to $20
million in the prior year period. The company returned
$269 million to shareholders in the
form of stock repurchases ($179
million) and dividends ($90
million).
2016 Full Year Guidance
The company now expects full year reported net sales to be up
approximately 2% and core EPS to be at the high end of the
previously communicated $4.20 to
$4.30 range. Collectively, foreign currency translation and
transaction are now expected to negatively impact net sales by
approximately 1% and core EPS growth by about 2.5%.
Packaging and ingredient costs are now expected to decrease COGS
by approximately 0.5% on a constant volume/mix basis.
The company continues to expect its core tax rate to be
approximately 35.5%.
The company continues to expect capital spending to be
approximately 3% of net sales.
The company continues to expect to repurchase $650 million to $700 million of its common
stock.
Definitions
Bottler case sales (BCS) volume: Sales of finished beverages, in
equivalent 288 fluid ounce cases, sold by the company and its
bottling partners to retailers and independent distributors and
excludes contract manufacturing volume. Volume for products sold by
the company and its bottling partners is reported on a monthly
basis, with the first quarter comprising January, February and
March.
Sales volume: Sales of concentrates and finished beverages, in
equivalent 288 fluid ounce cases, shipped by the company to its
bottlers, retailers and independent distributors and includes
contract manufacturing volume.
Pricing refers to the impact of list price changes.
Unrealized mark-to-market: We recognize the change in the fair
value of open commodity derivative positions between periods in
corporate unallocated expenses, as these instruments do not qualify
for hedge accounting treatment. As the underlying commodity is
delivered, the realized gains and losses are subsequently reflected
in the segment results.
EPS represents diluted earnings per share.
Core financial measures are determined utilizing reported
financial numbers adjusted for the unrealized mark-to-market impact
of commodity derivatives and certain items that are excluded for
comparison to prior year periods.
Core metrics are determined based on the core financial
measures.
Net sales and Segment Operating Profit, as adjusted to currency
neutral: Net sales and Segment Operating Profit are calculated on a
currency neutral basis by converting our current-period local
currency financial results using the prior-period foreign currency
exchange rates. Beginning in the second quarter of 2015, we
excluded the impact of realized gains and losses on foreign
currency transactions from our currency neutral calculation.
Forward-Looking Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
including, in particular, statements about future events, future
financial performance including earnings estimates, plans,
strategies, expectations, prospects, competitive environment,
regulation, and cost and availability of raw materials.
Forward-looking statements include all statements that are not
historical facts and can be identified by the use of
forward-looking terminology such as the words "may," "will,"
"expect," "anticipate," "believe," "estimate," "plan," "intend" or
the negative of these terms or similar expressions. These
forward-looking statements have been based on our current views
with respect to future events and financial performance. Our actual
financial performance could differ materially from those projected
in the forward-looking statements due to the inherent uncertainty
of estimates, forecasts and projections, and our financial
performance may be better or worse than anticipated. Given these
uncertainties, you should not put undue reliance on any
forward-looking statements. All of the forward-looking statements
are qualified in their entirety by reference to the factors
discussed under "Risk Factors" in Part I, Item 1A of our Annual
Report on Form 10-K for the year ended December 31, 2015, and our other filings with the
Securities and Exchange Commission. Forward-looking statements
represent our estimates and assumptions only as of the date that
they were made. We do not undertake any duty to update the
forward-looking statements, and the estimates and assumptions
associated with them, after the date of this release, except to the
extent required by applicable securities laws.
Conference Call
At 9 a.m. (CDT) today, the company
will host a conference call with investors to discuss first quarter
results and the outlook for 2016. The conference call and slide
presentation will be accessible live through DPS's website at
http://www.drpeppersnapple.com and will be archived for replay for
a period of 14 days.
In discussing financial results and guidance, the company may
refer to certain non-GAAP measures. Reconciliations of any such
non-GAAP measures to the most directly comparable financial
measures in accordance with GAAP can be found on pages A-5 through
A-8 accompanying this release and under "Financial News" on the
company's website at http://www.drpeppersnapple.com in the
"Investors" section.
For additional information about Dr Pepper Snapple Group, please
reference the "DPS Overview" presentation slideshow under "Events
and Presentations" on the company's website at
http://www.drpeppersnapple.com in the "Investors" section.
About Dr Pepper Snapple Group
Dr Pepper Snapple Group (NYSE: DPS) is a leading producer of
flavored beverages in North
America and the Caribbean.
Our success is fueled by more than 50 brands that are synonymous
with refreshment, fun and flavor. We have 6 of the top 10 non-cola
soft drinks, and 13 of our 14 leading brands are No. 1 or No. 2 in
their flavor categories. In addition to our flagship Dr Pepper and
Snapple brands, our portfolio includes 7UP, A&W, Canada Dry,
Clamato, Crush, Hawaiian Punch, Mott's, Mr & Mrs T mixers,
Peñafiel, Rose's, Schweppes, Squirt and Sunkist soda. To learn more
about our iconic brands and Plano,
Texas-based company, please visit www.DrPepperSnapple.com.
For our latest news and updates, follow us at
www.Facebook.com/DrPepperSnapple or
www.Twitter.com/DrPepperSnapple.
Contacts:
|
Media
Relations
|
|
Chris Barnes, (972)
673-5539
|
|
|
|
Investor
Relations
|
|
Heather Catelotti,
(972) 673-5869
|
DR PEPPER SNAPPLE
GROUP, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
For the Three
Months Ended March 31, 2016 and 2015
|
(Unaudited, in
millions, except per share data)
|
|
|
For
the
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
Net
sales
|
$
|
1,487
|
|
|
$
|
1,451
|
|
Cost of
sales
|
602
|
|
|
602
|
|
Gross
profit
|
885
|
|
|
849
|
|
Selling, general and
administrative expenses
|
546
|
|
|
552
|
|
Depreciation and
amortization
|
26
|
|
|
27
|
|
Other operating
expense, net
|
—
|
|
|
—
|
|
Income from
operations
|
313
|
|
|
270
|
|
Interest
expense
|
33
|
|
|
27
|
|
Interest
income
|
—
|
|
|
—
|
|
Other income,
net
|
(1)
|
|
|
(1)
|
|
Income before
provision for income taxes and equity in earnings of unconsolidated
subsidiaries
|
281
|
|
|
244
|
|
Provision for income
taxes
|
99
|
|
|
87
|
|
Income before equity
in earnings of unconsolidated subsidiaries
|
182
|
|
|
157
|
|
Equity in earnings of
unconsolidated subsidiaries, net of tax
|
—
|
|
|
—
|
|
Net
income
|
$
|
182
|
|
|
$
|
157
|
|
Earnings per
common share:
|
|
|
|
Basic
|
$
|
0.97
|
|
|
$
|
0.82
|
|
Diluted
|
0.96
|
|
|
0.81
|
|
Weighted average
common shares outstanding:
|
|
|
|
Basic
|
187.6
|
|
|
193.0
|
|
Diluted
|
189.0
|
|
|
194.6
|
|
|
A-1
|
DR PEPPER SNAPPLE
GROUP, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
As of March 31,
2016 and December 31, 2015
|
(Unaudited, in
millions, except share and per share data)
|
|
|
March
31,
|
|
December
31,
|
|
2016
|
|
2015
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
275
|
|
|
$
|
911
|
|
Accounts
receivable:
|
|
|
|
Trade, net
|
576
|
|
|
570
|
|
Other
|
53
|
|
|
58
|
|
Inventories
|
235
|
|
|
209
|
|
Prepaid expenses and
other current assets
|
144
|
|
|
69
|
|
Total current
assets
|
1,283
|
|
|
1,817
|
|
Property, plant and
equipment, net
|
1,136
|
|
|
1,156
|
|
Investments in
unconsolidated subsidiaries
|
36
|
|
|
31
|
|
Goodwill
|
2,988
|
|
|
2,988
|
|
Other intangible
assets, net
|
2,662
|
|
|
2,663
|
|
Other non-current
assets
|
193
|
|
|
150
|
|
Non-current deferred
tax assets
|
66
|
|
|
64
|
|
Total
assets
|
$
|
8,364
|
|
|
$
|
8,869
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
357
|
|
|
$
|
277
|
|
Deferred
revenue
|
64
|
|
|
64
|
|
Short-term borrowings
and current portion of long-term obligations
|
8
|
|
|
507
|
|
Income taxes
payable
|
59
|
|
|
27
|
|
Other current
liabilities
|
688
|
|
|
708
|
|
Total current
liabilities
|
1,176
|
|
|
1,583
|
|
Long-term
obligations
|
2,907
|
|
|
2,875
|
|
Non-current deferred
tax liabilities
|
797
|
|
|
787
|
|
Non-current deferred
revenue
|
1,166
|
|
|
1,181
|
|
Other non-current
liabilities
|
216
|
|
|
260
|
|
Total
liabilities
|
6,262
|
|
|
6,686
|
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred stock,
$0.01 par value, 15,000,000 shares authorized, no shares
issued
|
—
|
|
|
—
|
|
Common stock, $0.01
par value, 800,000,000 shares authorized, 186,694,160 and
187,841,509 shares issued and outstanding for 2016 and 2015,
respectively
|
2
|
|
|
2
|
|
Additional paid-in
capital
|
93
|
|
|
211
|
|
Retained
earnings
|
2,194
|
|
|
2,165
|
|
Accumulated other
comprehensive loss
|
(187)
|
|
|
(195)
|
|
Total stockholders'
equity
|
2,102
|
|
|
2,183
|
|
Total liabilities and
stockholders' equity
|
$
|
8,364
|
|
|
$
|
8,869
|
|
|
A-2
|
DR PEPPER SNAPPLE
GROUP, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
For the Three
Months Ended March 31, 2016 and 2015
|
(Unaudited, in
millions)
|
|
|
For
the
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
Operating
activities:
|
|
|
|
Net income
|
$
|
182
|
|
|
$
|
157
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation
expense
|
48
|
|
|
48
|
|
Amortization
expense
|
8
|
|
|
8
|
|
Amortization of
deferred revenue
|
(16)
|
|
|
(16)
|
|
Employee stock-based
compensation expense
|
11
|
|
|
9
|
|
Deferred income
taxes
|
16
|
|
|
15
|
|
Other, net
|
(25)
|
|
|
(17)
|
|
Changes in assets and
liabilities, net of effects of acquisition:
|
|
|
|
Trade accounts
receivable
|
(5)
|
|
|
(19)
|
|
Other accounts
receivable
|
1
|
|
|
(4)
|
|
Inventories
|
(25)
|
|
|
(26)
|
|
Other current and
non-current assets
|
(82)
|
|
|
(81)
|
|
Other current and
non-current liabilities
|
(70)
|
|
|
(99)
|
|
Trade accounts
payable
|
81
|
|
|
67
|
|
Income taxes
payable
|
53
|
|
|
59
|
|
Net cash provided by
operating activities
|
177
|
|
|
101
|
|
Investing
activities:
|
|
|
|
Purchase of property,
plant and equipment
|
(27)
|
|
|
(20)
|
|
Investment in
unconsolidated subsidiaries
|
(6)
|
|
|
—
|
|
Purchase of cost
method investment
|
—
|
|
|
(15)
|
|
Proceeds from
disposals of property, plant and equipment
|
1
|
|
|
1
|
|
Other, net
|
(8)
|
|
|
(6)
|
|
Net cash used in
investing activities
|
(40)
|
|
|
(40)
|
|
Financing
activities:
|
|
|
|
Repayment of senior
unsecured notes
|
(500)
|
|
|
—
|
|
Repurchase of shares
of common stock
|
(179)
|
|
|
(135)
|
|
Dividends
paid
|
(90)
|
|
|
(79)
|
|
Tax withholdings
related to net share settlements of certain stock awards
|
(31)
|
|
|
(26)
|
|
Proceeds from stock
options exercised
|
7
|
|
|
19
|
|
Excess tax benefit on
stock-based compensation
|
20
|
|
|
19
|
|
Capital lease
payments
|
(2)
|
|
|
(1)
|
|
Other, net
|
—
|
|
|
1
|
|
Net cash used in
financing activities
|
(775)
|
|
|
(202)
|
|
Cash and cash
equivalents — net change from:
|
|
|
|
Operating, investing
and financing activities
|
(638)
|
|
|
(141)
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
2
|
|
|
(3)
|
|
Cash and cash
equivalents at beginning of period
|
911
|
|
|
237
|
|
Cash and cash
equivalents at end of period
|
$
|
275
|
|
|
$
|
93
|
|
|
A-3
|
DR PEPPER SNAPPLE
GROUP, INC.
|
OPERATIONS BY
OPERATING SEGMENT
|
For the Three
Months Ended March 31, 2016 and 2015
|
(Unaudited,
in millions)
|
|
|
For the Three
Months Ended
March
31,
|
|
2016
|
|
2015
|
Segment Results –
Net sales
|
|
|
|
Beverage
Concentrates
|
$
|
287
|
|
$
|
285
|
Packaged
Beverages
|
1,097
|
|
1,053
|
Latin America
Beverages
|
103
|
|
113
|
Net
sales
|
$
|
1,487
|
|
$
|
1,451
|
|
|
|
For the Three
Months Ended
March
31,
|
|
2016
|
|
2015
|
Segment Results –
SOP
|
|
|
|
Beverage
Concentrates
|
$
|
187
|
|
$
|
183
|
Packaged
Beverages
|
175
|
|
141
|
Latin America
Beverages
|
15
|
|
17
|
Total SOP
|
377
|
|
341
|
Unallocated corporate
costs
|
64
|
|
71
|
Other operating
expense, net
|
—
|
|
—
|
Income from
operations
|
313
|
|
270
|
Interest expense,
net
|
33
|
|
27
|
Other income,
net
|
(1)
|
|
(1)
|
Income before
provision for income taxes and equity in earnings of unconsolidated
subsidiaries
|
$
|
281
|
|
$
|
244
|
|
A-4
|
DR PEPPER SNAPPLE GROUP,
INC.
RECONCILIATION OF GAAP AND NON-GAAP
INFORMATION
(Unaudited)
The company reports its financial results in accordance with
U.S. GAAP. However, management believes that certain non-GAAP
measures that reflect the way management evaluates the business may
provide investors with additional information regarding the
company's results, trends and ongoing performance on a comparable
basis. Specifically, investors should consider the following with
respect to our quarterly results:
Net sales and Segment Operating Profit, as adjusted to
currency neutral: Net sales and Segment Operating Profit are
calculated on a currency neutral basis by converting our
current-period local currency financial results using the
prior-period foreign currency exchange rates. Beginning in the
second quarter of 2015, we excluded the impact of realized gains
and losses on foreign currency transactions from our currency
neutral calculation.
Free Cash Flow: Free cash flow is defined as net cash
provided by operating activities adjusted for capital spending and
certain items excluded for comparison to prior year periods. For
the three months ended March 31, 2016
and 2015, there were no certain items excluded for comparison to
prior year periods.
Core earnings: Core earnings is defined as net income
adjusted for the unrealized mark-to-market impact of commodity
derivatives and certain items that are excluded for comparison to
prior year periods. For the three months ended March 31, 2016 and 2015, there were no items
other than mark-to-market excluded for comparison to prior year
periods.
The tables on the following pages provide these
reconciliations.
A-5
|
|
|
|
RECONCILIATION OF
NET SALES AND SOP
|
AS REPORTED TO AS
ADJUSTED TO CURRENCY NEUTRAL
|
(Unaudited)
|
|
|
|
For the Three
Months Ended March 31, 2016
|
|
|
Beverage
|
|
Packaged
|
|
Latin
America
|
|
|
Percent
change
|
|
Concentrates
|
|
Beverages
|
|
Beverages
|
|
Total
|
Reported net
sales
|
|
1
|
%
|
|
4
|
%
|
|
(9)
|
%
|
|
2
|
%
|
Impact of foreign
currency
|
|
—
|
%
|
|
—
|
%
|
|
15
|
%
|
|
2
|
%
|
Net sales, as
adjusted to currency neutral
|
|
1
|
%
|
|
4
|
%
|
|
6
|
%
|
|
4
|
%
|
|
|
|
|
|
For the Three
Months Ended March 31, 2016
|
|
|
Beverage
|
|
Packaged
|
|
Latin
America
|
|
|
Percent
change
|
|
Concentrates
|
|
Beverages
|
|
Beverages
|
|
Total
|
Reported
SOP
|
|
2
|
%
|
|
24
|
%
|
|
(12)
|
%
|
|
11
|
%
|
Impact of foreign
currency
|
|
1
|
%
|
|
—
|
%
|
|
12
|
%
|
|
—
|
%
|
SOP, as adjusted
to currency neutral
|
|
3
|
%
|
|
24
|
%
|
|
—
|
%
|
|
11
|
%
|
RECONCILIATION OF
NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH
FLOW
|
(Unaudited, in
millions)
|
|
|
|
For
the
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
March
31,
|
|
|
|
|
2016
|
|
2015
|
|
Change
|
Net cash provided
by operating activities
|
|
$
|
177
|
|
|
$
|
101
|
|
|
$
|
76
|
|
Purchase of property,
plant and equipment
|
|
(27)
|
|
|
(20)
|
|
|
|
Free Cash
Flow
|
|
$
|
150
|
|
|
$
|
81
|
|
|
$
|
69
|
|
|
A-6
|
RECONCILIATION OF
NET INCOME TO CORE EARNINGS
|
(Unaudited, in
millions, except per share data)
|
|
|
For the Three
Months Ended March 31, 2016
|
|
Reported
|
|
Mark to
Market
|
|
Core
|
|
FX
Translation
|
|
Currency
Neutral
Core
|
Net sales
|
$
|
1,487
|
|
|
$
|
—
|
|
|
$
|
1,487
|
|
|
$
|
21
|
|
|
$
|
1,508
|
|
Cost of
sales
|
602
|
|
|
3
|
|
|
605
|
|
|
9
|
|
|
614
|
|
Gross
profit
|
885
|
|
|
(3)
|
|
|
882
|
|
|
12
|
|
|
894
|
|
Selling, general and
administrative expenses
|
546
|
|
|
4
|
|
|
550
|
|
|
9
|
|
|
559
|
|
Depreciation and
amortization
|
26
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
Other operating
expense, net
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Income from
operations
|
313
|
|
|
(7)
|
|
|
306
|
|
|
3
|
|
|
309
|
|
Interest
expense
|
33
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
Interest
income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other income,
net
|
(1)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(1)
|
|
Income before
provision for income taxes and equity in earnings of unconsolidated
subsidiaries
|
281
|
|
|
(7)
|
|
|
274
|
|
|
3
|
|
|
277
|
|
Provision for income
taxes
|
99
|
|
|
(2)
|
|
|
97
|
|
|
1
|
|
|
98
|
|
Income before equity
in earnings of unconsolidated subsidiaries
|
182
|
|
|
(5)
|
|
|
177
|
|
|
2
|
|
|
179
|
|
Equity in earnings of
unconsolidated subsidiaries, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net income
|
$
|
182
|
|
|
$
|
(5)
|
|
|
$
|
177
|
|
|
$
|
2
|
|
|
$
|
179
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
$
|
0.96
|
|
|
$
|
(0.02)
|
|
|
$
|
0.94
|
|
|
$
|
0.01
|
|
|
$
|
0.95
|
|
Effective tax
rate
|
35.2
|
%
|
|
|
|
35.4
|
%
|
|
|
|
35.4
|
%
|
Operating
margin
|
21.0
|
%
|
|
|
|
20.6
|
%
|
|
|
|
20.5
|
%
|
|
A-7
|
RECONCILIATION OF
NET INCOME TO CORE EARNINGS - (Continued)
|
(Unaudited, in
millions, except per share data)
|
|
|
For the Three
Months Ended March 31, 2015
|
|
Reported
|
|
Mark to
Market
|
|
Core
|
Net sales
|
$
|
1,451
|
|
|
$
|
—
|
|
|
$
|
1,451
|
|
Cost of
sales
|
602
|
|
|
(2)
|
|
|
600
|
|
Gross
profit
|
849
|
|
|
2
|
|
|
851
|
|
Selling, general and
administrative expenses
|
552
|
|
|
1
|
|
|
553
|
|
Depreciation and
amortization
|
27
|
|
|
—
|
|
|
27
|
|
Other operating
expense, net
|
—
|
|
|
—
|
|
|
—
|
|
Income from
operations
|
270
|
|
|
1
|
|
|
271
|
|
Interest
expense
|
27
|
|
|
—
|
|
|
27
|
|
Interest
income
|
—
|
|
|
—
|
|
|
—
|
|
Other income,
net
|
(1)
|
|
|
—
|
|
|
(1)
|
|
Income before
provision for income taxes and equity in earnings of unconsolidated
subsidiaries
|
244
|
|
|
1
|
|
|
245
|
|
Provision for income
taxes
|
87
|
|
|
—
|
|
|
87
|
|
Income before equity
in earnings of unconsolidated subsidiaries
|
157
|
|
|
1
|
|
|
158
|
|
Equity in earnings of
unconsolidated subsidiaries, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
Net income
|
$
|
157
|
|
|
$
|
1
|
|
|
$
|
158
|
|
|
|
|
|
|
|
Diluted earnings per
common share
|
$
|
0.81
|
|
|
$
|
—
|
|
|
$
|
0.81
|
|
Effective tax
rate
|
35.7
|
%
|
|
|
|
35.5
|
%
|
Operating
margin
|
18.6
|
%
|
|
|
|
18.7
|
%
|
|
A-8
|
Logo -
http://photos.prnewswire.com/prnh/20150701/227684LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/dr-pepper-snapple-group-reports-first-quarter-2016-results-300257791.html
SOURCE Dr Pepper Snapple Group, Inc.