Net sales were up 2% for the quarter.
Reported EPS were
Year-to-date, the company repurchased
Company reaffirms full year 2012 Core EPS in the
For the quarter, reported net sales increased 2% reflecting 4 percentage
points of price/mix, partially offset by lower branded volumes, a
reclassification of certain customer transportation allowances that were
previously recorded as selling, general and administrative expenses and
foreign currency translation. Reported segment operating profit (SOP)
decreased 4%, or
DPS President and CEO
|EPS reconciliation||First Quarter|
|Items affecting comparability|
- Unrealized commodity mark-to-market net loss (gain)
EPS — earnings per share
Net sales and SOP in the tables and commentary below are presented on a currency neutral basis. For a reconciliation of non-GAAP to GAAP measures see page A-5 accompanying this release.
Summary of 2012 results
BCS - bottler case sales
For the quarter, BCS volume was flat with carbonated soft drinks (CSDs) growing 2% and non-carbonated beverages (NCBs) declining 7%.
In CSDs, Dr Pepper volume increased 2%. Canada Dry, A&W and Sunkist soda
all grew mid-single digits, while 7UP increased low-single digits.
Peñafiel and Squirt also posted solid gains, while Crush declined
mid-single digits and
In NCBs, Hawaiian Punch volume declined 21% and Mott's volume declined 16% due to cycling price increases that were taken in mid-year 2011. Clamato increased 27% and Snapple volume grew 5%, cycling 10% growth in the prior year period.
By geography, U.S. and
For the quarter, sales volume decreased 1%. Branded volume declined just over 1%, while contract manufacturing volume increased.
2012 Segment results
|As Reported||Currency Neutral|
|Latin America Beverages||4||0||14||6||60|
Net sales for the quarter were flat as 4 percentage points of concentrate pricing were offset by a 3% volume decline and higher discounts. SOP decreased 10% principally due to increased marketing investments and higher ingredient costs.
Net sales for the quarter were up 3% reflecting favorable mix and 2 percentage points of pricing, partially offset by the reclassification of certain customer transportation allowances that were previously recorded in selling, general and administrative expenses. SOP increased 3% as the benefits of higher sales were partially offset by cost inflation in packaging and ingredients and other operating costs.
Latin America Beverages
Net sales for the quarter increased 6% reflecting favorable product mix and a 4% increase in volume. Net sales growth was partially offset by the reclassification of certain customer transportation allowances that were previously recorded as selling, general and administrative expenses. SOP increased 60% reflecting net sales growth and favorable operating leverage, partially offset by higher packaging, ingredient and manufacturing costs.
Corporate and other items
For the quarter, corporate costs totaled
Net interest expense increased
For the quarter, the effective tax rate was 37.4% compared to 36.0% last year, as last year's rate included certain one-time tax benefits related to the PepsiCo, Inc. and The Coca-Cola Company licensing agreements.
For the quarter, the company used
2012 full year guidance
The company continues to expect full year reported net sales growth near
the low end of its long-term 3% to 5% range and Core EPS to be in the
Packaging and ingredient costs are expected to increase COGS between 2% and 3%, on a constant volume/mix basis.
The company expects its tax rate to be approximately 37%.
The company expects capital spending to be approximately 4.0% of net sales.
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 EPS is defined as EPS adjusted for the unrealized mark-to-market impact of commodity derivatives and certain items that are excluded for comparison to prior year periods.
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
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 page A-5 accompanying this release and under "Financial Press Releases" on the company's website at http://www.drpeppersnapple.com in the "Investors" section.
|CONDENSED CONSOLIDATED STATEMENTS OF INCOME|
For the Three Months Ended
|(Unaudited, in millions except per share data)|
|Three Months Ended|
|Cost of sales||584||547|
|Selling, general and administrative expenses||553||547|
|Depreciation and amortization||31||33|
|Other operating expenses||2||2|
|Income from operations||192||202|
|Other income, net||(3||)||(2||)|
|Income before provision for income taxes and equity in earnings of unconsolidated subsidiaries||163||178|
|Provision for income taxes||61||64|
|Income before equity in earnings of unconsolidated subsidiaries||102||114|
|Equity in earnings of unconsolidated subsidiaries, net of tax||—||—|
|Earnings per common share:|
|Weighted average common shares outstanding:|
|Cash dividends declared per common share||$||0.34||$||0.25|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(Unaudited, in millions except share and per share data)|