DR PEPPER SNAPPLE GROUP PLANO, Texas, July 23, 2015 /PRNewswire/ -- Dr Pepper Snapple Group, Inc. (NYSE: DPS) reported second quarter 2015 EPS of $1.14 compared to $1.06 in the prior year period. Core EPS were $1.13, up 7%, compared to $1.06 in the prior year period. Year-to-date, the company reported earnings of $1.95 per diluted share compared to $1.84 per share in the prior year period. Core EPS were $1.94, up 8%, compared to $1.80 in the prior year period.
For the quarter, reported net sales increased 1%, which included favorable product, package and segment mix and a 1% increase in sales volumes, partially offset by 2 percentage points of unfavorable foreign currency translation. Reported segment operating profit (SOP) increased 6%, or $24 million, on net sales growth, ongoing productivity improvements and favorable commodity costs, partially offset by 1 percentage point of unfavorable foreign currency translation.
Reported income from operations for the quarter was $369 million, including $5 million in unrealized commodity mark-to-market gains. Reported income from operations was $348 million in the prior year period. Core income from operations was $365 million, up 5% compared to the prior year period.
Year-to-date, reported net sales increased 3%, and reported income from operations was $639 million, including $4 million of unrealized commodity mark-to-market gains. Foreign currency translation negatively impacted reported net sales by 1% and reported income from operations by 2%. Reported income from operations was $608 million in the prior year period, including $12 million of unrealized commodity mark-to-market gains. Core income from operations was $636 million, up 7% compared to the prior year period.
DPS President and CEO Larry Young said, "We've had a good start to the year, and I'm proud of what our teams have been able to accomplish in this competitive environment. They remained focused on our strategy and continued to deliver against our key priorities. Year-to-date, we grew volume and dollar share in both the CSD and shelf-stable juice categories in Nielsen measured markets and gained or held distribution and availability across our portfolio."
Young continued, "We've brought innovation to the market that addresses consumers' evolving needs, and Rapid Continuous Improvement (RCI) continues to drive growth and productivity across the business. I'm confident that our teams will continue to execute against our plans for the balance of the year."
EPS reconciliation Second Quarter Year-to-Date
------------------ -------------- ------------
2015 2014 Percent 2015 2014 Percent
Change Change
--- ------ ------ ------
Reported EPS $1.14 $1.06 8 $1.95 $1.84 6
Unrealized commodity
mark-to-market net
gain (0.01) - (0.01) (0.04)
Items affecting
comparability - - - -
- Litigation provision
Core EPS $1.13 $1.06 7 $1.94 $1.80 8
-------- ----- ----- --- ----- ----- ---
EPS - earnings per share
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-10 accompanying this release.
Summary of 2015 results As Reported Currency
Neutral
(Translation)
(Percent change)
--------------- ---
Second YTD Second YTD
Quarter Quarter
------- ------- ---
BCS Volume 1 2 1 2
---------- --- --- --- ---
Sales Volume 1 1 1 1
------------ --- --- --- ---
Net Sales 1 3 3 4
--------- --- --- --- ---
SOP 6 6 7 8
--- --- --- --- ---
BCS - bottler case sales
BCS Volume
For the quarter, BCS volume increased 1% with carbonated soft drinks (CSDs) increasing 1% and non-carbonated beverages (NCBs) increasing 3%.
By geography, U.S. and Canada volume increased 1%, and Mexico and the Caribbean volume increased 7%.
In CSDs, Peñafiel increased 12% in the quarter on increased promotional activity and distribution gains. Squirt increased 6%, while Schweppes increased 8%. Brand Dr Pepper grew 1% in the quarter. Our Core 4 brands decreased 1%, as a mid-single-digit increase in Canada Dry was more than offset by mid-single-digit declines in 7UP, Sunkist soda and A&W. Crush declined 4%, and fountain foodservice volume grew 4% in the period.
In NCBs, Snapple increased 11% driven primarily by product innovation. Our water category grew 6% primarily on growth in Bai 5 and FIJI, and Clamato increased 8% on increased promotional activity. Hawaiian Punch increased 2% in the quarter, and Mott's declined 7%, driven primarily by declines in juice.
Sales Volume
For the quarter and year-to-date, sales volumes increased 1%.
2015
Segment
results
(Percent
Change) As Reported
-------- -----------
Second Quarter Year-to-Date
-------------- ------------
Sales
Volume Net Sales SOP Sales Volume Net Sales SOP
------ ---------- --- ------------ ---------- ---
Beverage
Concentrates (1) 1 4 (2) 1 4
------------ --- --- --- --- --- ---
Packaged
Beverages 1 3 7 2 4 7
--------- --- --- --- --- --- ---
Latin
America
Beverages 7 (9) 13 10 (4) 19
--------- --- --- --- --- --- ---
Total 1 1 6 1 3 6
----- --- --- --- --- --- ---
2015
Segment
results
(Percent
Change) Currency Neutral (Translation)
-------- -----------------------------
Second Quarter Year-to-Date
-------------- ------------
Sales
Volume Net Sales SOP Sales Volume Net Sales SOP
------ ---------- --- ------------ ---------- ---
Beverage
Concentrates (1) 2 5 (2) 2 5
------------ --- --- --- --- --- ---
Packaged
Beverages 1 3 8 2 4 8
--------- --- --- --- --- --- ---
Latin
America
Beverages 7 5 29 10 9 32
--------- --- --- --- --- --- ---
Total 1 3 7 1 4 8
----- --- --- --- --- --- ---
Beverage Concentrates
Net sales increased 2% in the quarter driven by favorable product mix and concentrate prices taken earlier in the year, which were partially offset by a 1% decline in concentrate shipments and higher discounts. SOP increased 5% on net sales growth and lower marketing and information technology costs.
Packaged Beverages
Net sales for the quarter increased 3% on favorable price/mix of 2% and a 1% increase in sales volumes. SOP increased 8% on net sales growth, ongoing productivity improvements and favorable commodity costs, partially offset by the cost of U.S. sourced products sold in Canada. Due to the strengthening of the U.S. dollar, the cost of those U.S. sourced products sold in Canada decreased SOP 2%.
Latin America Beverages
Net sales for the quarter increased 5% on a 7% increase in sales volumes, which was partially offset by increased promotional activity. SOP increased 29% on net sales growth, ongoing productivity improvements and favorable commodity and manufacturing costs, which were partially offset by the higher cost of certain U.S. dollar denominated input costs as a result of the strengthening U.S. dollar and higher logistics costs.
Corporate and Other Items
For the quarter, corporate costs totaled $70 million, which included $5 million in unrealized commodity mark-to-market gains and increases in certain operating expenses. Corporate costs in the prior year period were $70 million.
Net interest expense was flat in the quarter.
For the quarter, the reported effective tax rate was 35.5%. The effective tax rate in the prior year period was 35.1%.
Cash Flow
Year-to-date, the company generated $349 million of cash from operating activities compared to $438 million in the prior year. Capital spending totaled $42 million compared to $71 million in the prior year period. The company returned $423 million to shareholders in the form of stock repurchases ($251 million) and dividends ($172 million).
2015 Full-Year Guidance
The company now expects full-year reported net sales to be up just over 1% and core EPS to be in the $3.85 to $3.93 range. Collectively, foreign currency translation and transaction are now expected to negatively impact net sales and core EPS growth by approximately 2% and 4%, respectively.
Packaging and ingredient costs are now expected to decrease COGS by approximately 1.5% 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 $500 million to $550 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 second quarter comprising April, May and June.
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, 2014, 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 10 a.m. (CDT) today, the company will host a conference call with investors to discuss second quarter results and the outlook for 2015. 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-10 accompanying this release and under "Financial News" 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.
DR PEPPER SNAPPLE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three and Six Months Ended June 30, 2015 and 2014
(Unaudited, in millions, except per share data)
For the For the
Three Months Ended Six Months Ended
June 30, June 30,
2015 2014 2015 2014
---- ---- ---- ----
Net sales $1,655 $1,631 $3,106 $3,029
Cost of sales 674 665 1,276 1,219
--- --- ----- -----
Gross profit 981 966 1,830 1,810
Selling, general and
administrative expenses 586 592 1,138 1,146
Depreciation and
amortization 26 29 53 58
Other operating income, net - (3) - (2)
--- --- --- ---
Income from operations 369 348 639 608
Interest expense 28 27 55 53
Interest income (1) - (1) (1)
Other expense (income), net 1 (1) - (2)
--- --- --- ---
Income before provision for
income taxes and equity in
earnings of unconsolidated
subsidiaries 341 322 585 558
Provision for income taxes 121 113 208 194
--- --- --- ---
Income before equity in
earnings of unconsolidated
subsidiaries 220 209 377 364
Equity in earnings of
unconsolidated
subsidiaries, net of tax - 1 - 1
--- --- --- ---
Net income $220 $210 $377 $365
==== ==== ==== ====
Earnings per common share:
Basic $1.15 $1.07 $1.96 $1.85
Diluted 1.14 1.06 1.95 1.84
Weighted average common shares outstanding:
Basic 191.4 196.6 192.2 197.3
Diluted 192.4 197.8 193.5 198.6
A-1
DR PEPPER SNAPPLE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2015 and December 31, 2014
(Unaudited, in millions, except share and per share data)
June 30, December 31,
2015 2014
---- ----
Assets
Current assets:
Cash and cash
equivalents $127 $237
Accounts receivable:
Trade, net 630 556
Other 63 61
Inventories 217 204
Deferred tax
assets 63 67
Prepaid
expenses and
other current
assets 159 86
--- ---
Total current
assets 1,259 1,211
Property,
plant and
equipment,
net 1,095 1,141
Investments in
unconsolidated
subsidiaries 13 14
Goodwill 2,989 2,990
Other
intangible
assets, net 2,679 2,684
Other non-
current
assets 165 159
Non-current
deferred tax
assets 67 74
--- ---
Total assets $8,267 $8,273
====== ======
Liabilities and Stockholders' Equity
Current liabilities:
Accounts
payable $305 $289
Deferred
revenue 64 64
Short-term
borrowings
and current
portion of
long-term
obligations 505 3
Income taxes
payable 58 10
Other current
liabilities 631 672
--- ---
Total current
liabilities 1,563 1,038
Long-term
obligations 2,097 2,588
Non-current
deferred tax
liabilities 831 801
Non-current
deferred
revenue 1,216 1,250
Other non-
current
liabilities 298 302
--- ---
Total
liabilities 6,005 5,979
Commitments and contingencies
Stockholders' equity:
Preferred
stock, $0.01
par value,
15,000,000
shares
authorized,
no shares
issued - -
Common stock,
$0.01 par outstanding
value, for 2015 and
800,000,000 2014,
shares respectively
authorized,
190,925,830
and
192,957,696
shares issued
and 2 2
Additional
paid-in
capital 447 658
Retained
earnings 1,962 1,771
Accumulated
other
comprehensive
loss (149) (137)
---- ----
Total
stockholders'
equity 2,262 2,294
----- -----
Total
liabilities
and
stockholders'
equity $8,267 $8,273
====== ======
A-2
DR PEPPER SNAPPLE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2015 and 2014
(Unaudited, in millions)
For the
Six Months Ended
June 30,
--------
2015 2014
---- ----
Operating activities:
Net income $377 $365
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation expense 96 99
Amortization expense 16 18
Amortization of
deferred revenue (32) (32)
Employee stock-based
compensation expense 21 22
Deferred income taxes 19 22
Other, net (21) (23)
Changes in assets and liabilities,
net of effects of acquisition:
Trade accounts
receivable (78) (25)
Other accounts
receivable (2) 5
Inventories (16) (13)
Other current and
non-current assets (77) (53)
Other current and
non-current
liabilities (41) (24)
Trade accounts
payable 18 48
Income taxes payable 69 29
--- ---
Net cash provided by
operating activities 349 438
Investing activities:
Purchase of property,
plant and equipment (42) (71)
Purchase of
intangible assets (1) (1)
Purchase of cost
method investment (15) -
Proceeds from
disposals of
property, plant and
equipment 11 7
Other, net - (3)
Net cash used in
investing activities (47) (68)
Financing activities:
Net issuance of
commercial paper - 5
Repurchase of shares
of common stock (251) (206)
Cash paid for shares
not yet received - (50)
Dividends paid (172) (157)
Tax withholdings
related to net share
settlements of
certain stock awards (27) (16)
Proceeds from stock
options exercised 22 28
Excess tax benefit on
stock-based
compensation 20 8
Other, net (1) -
Net cash used in
financing activities (409) (388)
Cash and cash equivalents -net
change from:
Operating, investing
and financing
activities (107) (18)
Effect of exchange
rate changes on cash
and cash equivalents (3) -
Cash and cash
equivalents at
beginning of period 237 153
--- ---
Cash and cash
equivalents at end
of period $127 $135
==== ====
A-3
DR PEPPER SNAPPLE GROUP, INC.
OPERATIONS BY OPERATING SEGMENT
For the Three and Six Months Ended June 30, 2015 and 2014
(Unaudited, in millions)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------- --------
2015 2014 2015 2014
---- ---- ---- ----
Segment Results - Net sales
Beverage Concentrates $330 $327 $615 $608
Packaged Beverages 1,188 1,154 2,241 2,160
Latin America Beverages 137 150 250 261
--- --- --- ---
Net sales $1,655 $1,631 $3,106 $3,029
====== ====== ====== ======
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------- --------
2015 2014 2015 2014
---- ---- ---- ----
Segment Results - SOP
Beverage Concentrates $222 $214 $405 $388
Packaged Beverages 190 177 331 308
Latin America Beverages 27 24 44 37
--- --- --- ---
Total SOP 439 415 780 733
Unallocated corporate costs 70 70 141 127
Other operating income, net - (3) - (2)
--- --- --- ---
Income from operations 369 348 639 608
Interest expense, net 27 27 54 52
Other expense (income), net 1 (1) - (2)
--- --- --- ---
Income before provision for
income taxes and equity in
earnings of unconsolidated
subsidiaries $341 $322 $585 $558
==== ==== ==== ====
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 six months ended June 30,
2015 and 2014, 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. The certain item excluded for the
three and six months ended June 30, 2015 is
an adjustment to a previously disclosed
legal provision. For the three and six
months ended June 30, 2014, there were no
certain items 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 June 30, 2015
----------------------------------------
Beverage Packaged Latin
America
Percent change Concentrates Beverages Beverages Total
-------------- ------------ --------- --------- -----
Reported net sales 1% 3% (9)% 1%
Impact of foreign
currency 1% -% 14% 2%
--- --- --- ---
Net sales, as adjusted
to currency neutral 2% 3% 5% 3%
=== === === ===
For the Three Months Ended June 30, 2015
----------------------------------------
Beverage Packaged Latin
America
Percent change Concentrates Beverages Beverages Total
-------------- ------------ --------- --------- -----
Reported SOP 4% 7% 13% 6%
Impact of foreign
currency 1% 1% 16% 1%
--- --- --- ---
SOP, as adjusted to
currency neutral 5% 8% 29% 7%
=== === === ===
For the Six Months Ended June 30, 2015
--------------------------------------
Beverage Packaged Latin
America
Percent change Concentrates Beverages Beverages Total
-------------- ------------ --------- --------- -----
Reported net sales 1% 4% (4)% 3%
Impact of foreign
currency 1% -% 13% 1%
--- --- --- ---
Net sales, as adjusted
to currency neutral 2% 4% 9% 4%
=== === === ===
For the Six Months Ended June 30, 2015
--------------------------------------
Beverage Packaged Latin
America
Percent change Concentrates Beverages Beverages Total
-------------- ------------ --------- ---------
Reported SOP 4% 7% 19% 6%
Impact of foreign
currency 1% 1% 13% 2%
--- --- --- ---
SOP, as adjusted to
currency neutral 5% 8% 32% 8%
=== === === ===
RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW
(Unaudited, in millions)
For the
Six Months Ended
June 30,
--------
2015 2014 Change
---- ---- ------
Net cash provided by
operating activities $349 $438 $(89)
Purchase of property,
plant and equipment (42) (71)
Free Cash Flow $307 $367 $(60)
==== ====
A-6
RECONCILIATION OF NET INCOME TO CORE EARNINGS
(Unaudited, in millions, except per share data)
For the Three Months Ended June 30, 2015
----------------------------------------
Reported Mark to Market Litigation
Provision Total Adjustments Core
-------- -------------- ----------- ----------------- ----
Net sales $1,655 $ - $ - $ - $1,655
Cost of sales 674 (2) - (2) 672
Gross profit 981 2 - 2 983
Selling, general and
administrative
expenses 586 7 (1) 6 592
Depreciation and
amortization 26 - - - 26
Other operating
income, net - - - - -
Income from operations 369 (5) 1 (4) 365
Interest expense 28 - - - 28
Interest income (1) - - - (1)
Other expense
(income), net 1 - - - 1
Income before
provision for income
taxes and equity in
earnings of
unconsolidated
subsidiaries 341 (5) 1 (4) 337
Provision for income
taxes 121 (2) - (2) 119
Income before equity
in earnings of
unconsolidated
subsidiaries 220 (3) 1 (2) 218
Equity in earnings of
unconsolidated
subsidiaries, net of
tax - - - - -
Net income $220 $(3) $1 $(2) $218
Diluted earnings per
common share $1.14 $(0.01) $ - $(0.01) $1.13
Effective tax rate 35.5% 35.3%
Operating margin 22.3% 22.1%
A-7
RECONCILIATION OF NET INCOME TO CORE EARNINGS - (Continued)
(Unaudited, in millions, except per share data)
For the Three Months Ended June 30, 2014
----------------------------------------
Reported Mark to Market Core
-------- -------------- ----
Net sales $1,631 $ - $1,631
Cost of sales 665 (1) 664
Gross profit 966 1 967
Selling, general and
administrative
expenses 592 1 593
Depreciation and
amortization 29 - 29
Other operating
income, net (3) - (3)
Income from operations 348 - 348
Interest expense 27 - 27
Interest income - - -
Other expense
(income), net (1) - (1)
Income before
provision for income
taxes and equity in
earnings of
unconsolidated
subsidiaries 322 - 322
Provision for income
taxes 113 - 113
Income before equity
in earnings of
unconsolidated
subsidiaries 209 - 209
Equity in earnings of
unconsolidated
subsidiaries, net of
tax 1 - 1
Net income $210 $ - $210
Diluted earnings per
common share $1.06 $ - $1.06
Effective tax rate 35.1% 35.1%
Operating margin 21.3% 21.3%
A-8
RECONCILIATION OF NET INCOME TO CORE EARNINGS - (Continued)
(Unaudited, in millions, except per share data)
For the Six Months Ended June 30, 2015
--------------------------------------
Reported Mark to Market Litigation Total
Provision Adjustments Core
-------- -------------- ----------- ------------ ----
Net sales $3,106 $ - $ - $ - $3,106
Cost of sales 1,276 (4) - (4) 1,272
Gross profit 1,830 4 - 4 1,834
Selling, general and
administrative
expenses 1,138 8 (1) 7 1,145
Multi-employer
pension plan
withdrawal - - - - -
Depreciation and
amortization 53 - - - 53
Other operating
income, net - - - - -
Income from operations 639 (4) 1 (3) 636
Interest expense 55 - - - 55
Interest income (1) - - - (1)
Other expense
(income), net - - - - -
Income before
provision for income
taxes and equity in
earnings of
unconsolidated
subsidiaries 585 (4) 1 (3) 582
Provision for income
taxes 208 (2) - (2) 206
Income before equity
in earnings of
unconsolidated
subsidiaries 377 (2) 1 (1) 376
Equity in earnings of
unconsolidated
subsidiaries, net of
tax - - - - -
Net income $377 $(2) $1 $(1) $376
Diluted earnings per
common share $1.95 $(0.01) $ - (0.01) $1.94
Effective tax rate 35.6% 35.4%
Operating margin 20.6% 20.5%
A-9
RECONCILIATION OF NET INCOME TO CORE EARNINGS - (Continued)
(Unaudited, in millions, except per share data)
For the Six Months Ended June 30, 2014
--------------------------------------
Reported Mark to Market Core
-------- -------------- ----
Net sales $3,029 $ - $3,029
Cost of sales 1,219 11 1,230
Gross profit 1,810 (11) 1,799
Selling, general and
administrative
expenses 1,146 1 1,147
Multi-employer
pension plan
withdrawal - - -
Depreciation and
amortization 58 - 58
Other operating
income, net (2) - (2)
Income from operations 608 (12) 596
Interest expense 53 - 53
Interest income (1) - (1)
Other expense
(income), net (2) - (2)
Income before
provision for income
taxes and equity in
earnings of
unconsolidated
subsidiaries 558 (12) 546
Provision for income
taxes 194 (4) 190
Income before equity
in earnings of
unconsolidated
subsidiaries 364 (8) 356
Equity in earnings of
unconsolidated
subsidiaries, net of
tax 1 - 1
Net income $365 $(8) 357
Diluted earnings per
common share $1.84 $(0.04) $1.80
Effective tax rate 34.8% 34.8%
Operating margin 20.1% 19.7%
A-10
Contacts: Media Relations
Chris Barnes, (972)
673-5539
Investor Relations
Heather Catelotti, (972)
673-5869
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To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/dr-pepper-snapple-group-reports-second-quarter-2015-results-300117357.html
SOURCE Dr Pepper Snapple Group, Inc.
