View Filing Data

Print Document View Excel Document

Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2018	Feb. 20, 2019	Jun. 30, 2018
Document and Entity Information
Entity Registrant Name	Monster Beverage Corp
Entity Central Index Key	0000865752
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 28,771,940,302
Entity Common Stock, Shares Outstanding		543,148,169
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
CURRENT ASSETS:
Cash and cash equivalents	$ 637,513	$ 528,622
Short-term investments	320,650	672,933
Accounts receivable, net	484,562	449,476
Inventories	277,705	255,745
Prepaid expenses and other current assets	44,909	40,877
Prepaid income taxes	38,831	138,724
Total current assets	1,804,170	2,086,377
INVESTMENTS		2,366
PROPERTY AND EQUIPMENT, net	243,051	230,276
DEFERRED INCOME TAXES	85,687	92,333
GOODWILL	1,331,643	1,331,643
OTHER INTANGIBLE ASSETS, net	1,045,878	1,034,085
OTHER ASSETS	16,462	13,932
Total Assets	4,526,891	4,791,012
CURRENT LIABILITIES:
Accounts payable	248,760	245,910
Accrued liabilities	112,507	87,475
Accrued promotional allowances	145,741	137,998
Accrued distributor terminations		91
Deferred revenue	44,045	43,236
Accrued compensation	39,903	34,996
Income taxes payable	10,189	10,645
Total current liabilities	601,145	560,351
DEFERRED REVENUE	312,224	334,354
OTHER LIABILITIES	2,621	1,095
COMMITMENTS AND CONTINGENCIES (Note 11)
STOCKHOLDERS' EQUITY:
Common stock - $0.005 par value; 1,250,000 shares authorized; 630,970 shares issued and 543,676 shares outstanding as of December 31, 2018; 629,255 shares issued and 566,298 shares outstanding as of December 31, 2017	3,155	3,146
Additional paid-in capital	4,238,170	4,150,628
Retained earnings	3,914,645	2,928,226
Accumulated other comprehensive loss	(32,864)	(16,659)
Common stock in treasury, at cost; 87,294 shares and 62,957 shares as of December 31, 2018 and December 31, 2017, respectively	(4,512,205)	(3,170,129)
Total stockholders' equity	3,610,901	3,895,212
Total Liabilities and Stockholders' Equity	$ 4,526,891	$ 4,791,012

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2018	Dec. 31, 2017
CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.005	$ 0.005
Common stock, shares authorized	1,250,000	1,250,000
Common stock, shares issued	630,970	629,255
Common stock, shares outstanding	543,676	566,298
Common stock in treasury, shares	87,294	62,957

CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED STATEMENTS OF INCOME
NET SALES	$ 3,807,183	$ 3,369,045	$ 3,049,393
COST OF SALES	1,511,808	1,231,355	1,107,393
GROSS PROFIT	2,295,375	2,137,690	1,942,000
OPERATING EXPENSES	1,011,756	938,903	856,662
OPERATING INCOME	1,283,619	1,198,787	1,085,338
OTHER INCOME (EXPENSE), NET	9,653	2,836	(5,653)
INCOME BEFORE PROVISION FOR INCOME TAXES	1,293,272	1,201,623	1,079,685
PROVISION FOR INCOME TAXES	300,268	380,945	367,000
NET INCOME	$ 993,004	$ 820,678	$ 712,685
NET INCOME PER COMMON SHARE:
Basic (in dollars per share)	$ 1.78	$ 1.45	$ 1.21
Diluted (in dollars per share)	$ 1.76	$ 1.42	$ 1.19
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS :
Basic (in shares)	557,166	566,782	587,874
Diluted (in shares)	564,254	577,141	599,819

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income, as reported	$ 993,004	$ 820,678	$ 712,685
Other comprehensive (loss) income:
Change in foreign currency translation adjustment, net of tax	(16,957)	7,238	(1,178)
Available-for-sale investments:
Change in net unrealized gains (losses)	752	(648)	(193)
Net change in available-for-sale investments	752	(648)	(193)
Other comprehensive (loss) income	(16,205)	6,590	(1,371)
Comprehensive income	$ 976,799	$ 827,268	$ 711,314

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury stock	Total
Balance at Dec. 31, 2015	$ 3,105	$ 3,989,787	$ 1,394,863	$ (21,878)	$ (556,467)	$ 4,809,410
Balance (in shares) at Dec. 31, 2015	621,057				(12,357)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		45,848				45,848
Exercise of stock options	$ 11	16,441				16,452
Exercise of stock options (in shares)	2,144
Unrealized loss on available-for-sale securities				(193)		(193)
Excess tax benefits from share based payment arrangements		(831)				(831)
Repurchase of common stock					$ (2,252,484)	(2,252,484)
Repurchase of common stock (in shares)					(44,278)
Foreign currency translation				(1,178)		(1,178)
Net income			712,685			712,685
Balance at Dec. 31, 2016	$ 3,116	4,051,245	2,107,548	(23,249)	$ (2,808,951)	3,329,709
Balance (in shares) at Dec. 31, 2016	623,201				(56,635)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		52,282				52,282
Exercise of stock options	$ 30	52,596				52,626
Exercise of stock options (in shares)	6,054
Unrealized loss on available-for-sale securities				(648)		(648)
Excess tax benefits from share based payment arrangements		(5,495)				(5,495)
Repurchase of common stock					$ (361,178)	(361,178)
Repurchase of common stock (in shares)					(6,322)
Foreign currency translation				7,238		7,238
Net income			820,678			820,678
Balance at Dec. 31, 2017	$ 3,146	4,150,628	2,928,226	(16,659)	$ (3,170,129)	3,895,212
Balance (in shares) at Dec. 31, 2017	629,255				(62,957)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		57,111				57,111
Exercise of stock options	$ 9	27,843				27,852
Exercise of stock options (in shares)	1,715
Unrealized loss on available-for-sale securities				752		752
Adjustment to excess tax benefits from prior periods		2,588				2,588
Cumulative effect on adoption of ASU No. 2016-16 \| ASU 2016-16			(6,585)			(6,585)
Repurchase of common stock					$ (1,342,076)	(1,342,076)
Repurchase of common stock (in shares)					(24,337)
Foreign currency translation				(16,957)		(16,957)
Net income			993,004			993,004
Balance at Dec. 31, 2018	$ 3,155	$ 4,238,170	$ 3,914,645	$ (32,864)	$ (4,512,205)	$ 3,610,901
Balance (in shares) at Dec. 31, 2018	630,970				(87,294)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 993,004	$ 820,678	$ 712,685
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	56,979	48,887	40,845
Gain on disposal of property and equipment	(783)	(1,161)	(204)
Stock-based compensation	57,111	52,282	45,848
Deferred income taxes	(510)	67,935	(19,092)
Effect on cash of changes in operating assets and liabilities, net of acquisitions and divestitures:
Accounts receivable	(48,370)	11,822	(86,382)
TCCC Transaction receivable		125,000
Distributor receivables	9,958	4,716	(19,981)
Inventories	(26,146)	(88,867)	20,875
Prepaid expenses and other current assets	(6,682)	(2,396)	(6,682)
Prepaid income taxes	98,716	(71,332)	(48,023)
Accounts payable	9,852	29,579	45,340
Accrued liabilities	18,145	(4,499)	(2,852)
Accrued promotional allowances	11,719	21,135	(3,939)
Accrued distributor terminations	(91)	(8,172)	(3,328)
Accrued compensation	5,477	4,491	8,051
Income taxes payable	1,943	(3,590)	4,375
Other liabilities	1,526	1,095
Deferred revenue	(19,967)	(19,872)	13,819
Net cash provided by operating activities	1,161,881	987,731	701,355
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of held-to-maturity investments			868,304
Sales of available-for-sale investments	1,181,484	533,183	120,987
Purchases of AFF Assets, net			(688,485)
Proceeds from sale of property and equipment	4,295	1,416	807
Purchases of held-to-maturity investments			(152,050)
Purchases of available-for-sale investments	(826,084)	(971,813)	(300,426)
Purchases of property and equipment	(61,941)	(83,435)	(99,819)
Decrease (Increase) in intangibles	(12,984)	(9,693)	(5,518)
(Increase) decrease in other assets	(11,814)	(1,199)	7
Net cash provided by (used in) investing activities	272,956	(531,541)	(256,193)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt	(1,886)	(2,583)	(2,359)
Issuance of common stock	27,851	52,626	16,405
Purchases of common stock held in treasury	(1,342,076)	(361,178)	(2,252,437)
Net cash used in financing activities	(1,316,111)	(311,135)	(2,238,391)
Effect of exchange rate changes on cash and cash equivalents	(9,835)	5,985	(4,606)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	108,891	151,040	(1,797,835)
CASH AND CASH EQUIVALENTS, beginning of year	528,622	377,582	2,175,417
CASH AND CASH EQUIVALENTS, end of year	637,513	528,622	377,582
Cash paid during the year for:
Interest	60	75	68
Income taxes	$ 200,767	$ 389,490	$ 431,273

CONSOLIDATED STATEMENTS OF CASH FLOWS SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED STATEMENTS OF CASH FLOWS NON-CASH SUPPLEMENTAL DATA
Capital lease for acquisition of promotional vehicles	$ 1.5	$ 2.7	$ 2.6
Accounts payable for property and equipment	0.7	2.3	0.1
Accrued liabilities for property and equipment	0.0	3.8	4.6
Accrued liabilities for other intangible assets	$ 10.8	$ 3.7	$ 3.8

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

12 Months Ended

Dec. 31, 2018

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICES

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization – Monster Beverage Corporation (the “Company”) was incorporated in the state of Delaware. The Company is a holding company and has no operating business except through its consolidated subsidiaries.

Nature of Operations – The Company develops, markets, sells and distributes energy drink beverages and concentrates for energy drink beverages, primarily under the following brand names: Monster Energy®, Monster Energy Ultra®, Monster Rehab®, Monster MAXX®, Java Monster®, Muscle Monster®, Punch Monster®, Juice Monster®, Monster Hydro®, Espresso Monster®, Caffé Monster®, Nalu®, NOS®, Full Throttle®, Burn®, Mother®, Ultra Energy®, Play® and Power Play(stylized)®, Relentless®, BPM®, Predator®, Mutant®, BU® and Live+.

Basis of Presentation – The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of the Company and its consolidated subsidiaries.

Principles of Consolidation – The Company consolidates all entities that it controls by ownership of a majority voting interest. All intercompany balances and transactions have been eliminated in consolidation.

Business Combinations – Business acquisitions are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805 “Business Combinations”. FASB ASC 805 requires the reporting entity to identify the acquirer, determine the acquisition date, recognize and measure the identifiable tangible and intangible assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity, and recognize and measure goodwill or a gain from the purchase. The acquiree’s results are included in the Company’s consolidated financial statements from the date of acquisition. Assets acquired and liabilities assumed are recorded at their fair values and the excess of the purchase price over the amounts assigned is recorded as goodwill. Adjustments to fair value assessments are recorded to goodwill over the measurement period (not longer than twelve months). The acquisition method also requires that acquisition-related transaction and post-acquisition restructuring costs be charged to expense and requires the Company to recognize and measure certain assets and liabilities including those arising from contingencies and contingent consideration in a business combination.

Cash and Cash Equivalents – The Company considers all highly liquid investments with an original maturity of three months or less from date of purchase to be cash equivalents. Throughout the year, the Company has had amounts on deposit at financial institutions that exceed the federally insured limits. The Company has not experienced any loss as a result of these deposits and does not expect to incur any losses in the future.

Investments – The Company’s investments in debt securities are classified as either held-to-maturity, available-for-sale or trading, in accordance with FASB ASC 320. Held-to-maturity securities are those securities that the Company has the positive intent and ability to hold until maturity. Trading securities are those securities that the Company intends to sell in the near term. All other securities not included in the held-to-maturity or trading category are classified as available-for-sale. Held-to-maturity securities are recorded at amortized cost which approximates fair market value. Trading securities are carried at fair value with unrealized gains and losses charged to earnings. Available-for-sale securities are carried at fair value with unrealized gains and losses recorded within accumulated other comprehensive loss as a separate component of stockholders’ equity. FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available (See Note 4). Under FASB ASC 320-10-35, a security is considered to be other-than-temporarily impaired if the present value of cash flows expected to be collected are less than the security’s amortized cost basis (the difference being defined as the “Credit Loss”) or if the fair value of the security is less than the security’s amortized cost basis and the investor intends, or will be required, to sell the security before recovery of the security’s amortized cost basis. If an other-than-temporary impairment exists, the charge to earnings is limited to the amount of Credit Loss if the investor does not intend to sell the security, and will not be required to sell the security, before recovery of the security’s amortized cost basis. Any remaining difference between fair value and amortized cost is recognized in other comprehensive loss, net of applicable taxes. The Company evaluates whether the decline in fair value of its investments is other-than-temporary at each quarter-end. This evaluation consists of a review by management, and includes market pricing information and maturity dates for the securities held, market and economic trends in the industry and information on the issuer’s financial condition and, if applicable, information on the guarantors’ financial condition. Factors considered in determining whether a loss is temporary include the length of time and extent to which the investment’s fair value has been less than its cost basis, the financial condition and near-term prospects of the issuer and guarantors, including any specific events which may influence the operations of the issuer and the Company’s intent and ability to retain the investment for a reasonable period of time sufficient to allow for any anticipated recovery of fair value.

Accounts Receivable – The Company evaluates the collectability of its trade accounts receivable based on a number of factors. In circumstances where the Company becomes aware of a specific customer’s inability to meet its financial obligations to the Company, a specific reserve for bad debts is estimated and recorded, which reduces the recognized receivable to the estimated amount the Company believes will ultimately be collected. In addition to specific customer identification of potential bad debts, bad debt charges are recorded based on the Company’s recent loss history and an overall assessment of past due trade accounts receivable outstanding. In accordance with FASB ASC 210-20-45, in its consolidated balance sheets, the Company has presented accounts receivable, net of promotional allowances, only for those customers that it allows net settlement. All other accounts receivable and related promotional allowances are shown on a gross basis.

Inventories – Inventories are valued at the lower of first-in, first-out, cost or market value (net realizable value).

Property and Equipment – Property and equipment are stated at cost. Depreciation of furniture and fixtures, office and computer equipment, computer software, equipment, and vehicles is based on their estimated useful lives (three to ten years) and is calculated using the straight-line method. Amortization of leasehold improvements is based on the lesser of their estimated useful lives or the terms of the related leases and is calculated using the straight-line method. Normal repairs and maintenance costs are expensed as incurred. Expenditures that materially increase values or extend useful lives are capitalized. The related costs and accumulated depreciation of disposed assets are eliminated and any resulting gain or loss on disposition is included in net income.

Goodwill – The Company records goodwill when the consideration paid for an acquisition exceeds the fair value of net tangible and intangible assets acquired, including related tax effects. Goodwill is not amortized; instead goodwill is tested for impairment on an annual basis, or more frequently if the Company believes indicators of impairment exist. The Company first assesses qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying value. If the Company determines that the fair value is less than the carrying value, the Company will use a two-step process to determine the amount of goodwill impairment. The first step requires comparing the fair value of the reporting unit to its net book value, including goodwill. A potential impairment exists if the fair value of the reporting unit is lower than its net book value. The second step of the process, performed only if a potential impairment exists, involves determining the difference between the fair value of the reporting unit's net assets, other than goodwill, and the fair value of the reporting unit. An impairment charge is recognized for the excess of the carrying value of goodwill over its implied fair value. For the years ended December 31, 2018, 2017 and 2016 there were no impairments recorded.

Other Intangibles – Other Intangibles are comprised primarily of trademarks that represent the Company’s exclusive ownership of the Monster Energy®, ®, Monster Energy Ultra®, Unleash the Beast!®, Monster Rehab®, Mutant®, Java Monster®, Monster Hydro®, Monster MAXX®, Muscle Monster®, Punch Monster®, Juice Monster®, Espresso Monster®, Caffé Monster®, M3(stylized)®, BU®, Nalu®, NOS®, Full Throttle®, Burn®, Mother®, Ultra Energy®, Play® and Power Play(stylized)®, Predator®, Gladiator®, Relentless®, Samurai® and BPM® trademarks, all used in connection with the manufacture, sale and distribution of beverages. The Company also owns a number of other trademarks, flavors and formulas in the United States, as well as in a number of countries around the world. In accordance with FASB ASC 350, intangible assets with indefinite lives are not amortized but instead are measured for impairment at least annually, or when events indicate that an impairment exists. The Company calculates impairment as the excess of the carrying value of its indefinite-lived assets over their estimated fair value. If the carrying value exceeds the estimate of fair value a write-down is recorded. The Company amortizes its trademarks with finite useful lives over their respective useful lives. For the years ended December 31, 2018, 2017 and 2016 there were no impairments recorded.

Long-Lived Assets – Management regularly reviews property and equipment and other long-lived assets, including certain definite-lived intangible assets, for possible impairment. This review occurs annually, or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. If there is indication of impairment, management then prepares an estimate of future cash flows (undiscounted and without interest charges) expected to result from the use of the asset and its eventual disposition. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized to write down the asset to its estimated fair value. The fair value is estimated using the present value of the future cash flows discounted at a rate commensurate with management’s estimates of the business risks. Preparation of estimated expected future cash flows is inherently subjective and is based on management’s best estimate of assumptions concerning expected future conditions. For the years ended December 31, 2018, 2017 and 2016, there were no impairment indicators identified. Long-lived assets held for sale are recorded at the lower of their carrying amount or fair value less cost to sell.

Foreign Currency Translation and Transactions – The accounts of the Company’s foreign subsidiaries are translated in accordance with FASB ASC 830. Foreign currency transaction gains and losses are recognized in other expense, net, at the time they occur. Net foreign currency exchange gains or losses resulting from the translation of assets and liabilities of foreign subsidiaries whose functional currency is not the U.S. dollar are recorded as a part of accumulated other comprehensive loss in stockholders’ equity. Unrealized foreign currency exchange gains and losses on certain intercompany transactions that are of a long-term investment nature (i.e., settlement is not planned or anticipated in the foreseeable future) are also recorded in accumulated other comprehensive loss in stockholders’ equity. During the years ended December 31, 2018, 2017 and 2016, the Company entered into forward currency exchange contracts with financial institutions to create an economic hedge to specifically manage a portion of the foreign exchange risk exposure associated with certain consolidated subsidiaries non-functional currency denominated assets and liabilities. All foreign currency exchange contracts outstanding as of December 31, 2018 have terms of three months or less. The Company does not enter into forward currency exchange contracts for speculation or trading purposes.

The Company has not designated its foreign currency exchange contracts as hedge transactions under FASB ASC 815. Therefore, gains and losses on the Company’s foreign currency exchange contracts are recognized in other expense, net, in the consolidated statements of income, and are largely offset by the changes in the fair value of the underlying economically hedged item. For the years ended December 31, 2018, 2017 and 2016, aggregate foreign currency transaction losses, including the gains or losses on forward currency exchange contracts, amounted to $4.0 million, $3.3 million and $9.7 million, respectively, and have been recorded in other income (expense), net, in the accompanying consolidated statements of income.

Revenue Recognition – The Company has three operating and reportable segments, (i) Monster Energy® Drinks segment (“Monster Energy® Drinks”), which is primarily comprised of the Company’s Monster Energy® drinks, (ii) Strategic Brands segment (“Strategic Brands”), which is primarily comprised of the various energy drink brands acquired from TCCC in 2015 as well as the Company’s Predator® energy drinks, and (iii) Other segment (“Other”), which is comprised of certain products sold by American Fruits & Flavors LLC, a wholly-owned subsidiary of the Company, to independent third-party customers.

The Company’s Monster Energy® Drinks segment generates net operating revenues by selling ready-to-drink packaged energy drinks primarily to bottlers and full service beverage distributors. In some cases, the Company sells directly to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, drug stores, foodservice customers and the military.

The Company’s Strategic Brands segment primarily generates net operating revenues by selling “concentrates” and/or “beverage bases” to authorized bottling and canning operations. Such bottlers generally combine the concentrates and/or beverage bases with sweeteners, water and other ingredients to produce ready-to-drink packaged energy drinks. The ready-to-drink packaged energy drinks are then sold to other bottlers and full service distributors and to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers, drug stores and the military. To a lesser extent, our Strategic Brands segment generates net operating revenues by selling certain ready-to-drink packaged energy drinks to bottlers and full service beverage distributors.

The majority of the Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. Certain of the Company’s bottlers/distributors may also perform a separate function as a co-packer on the Company’s behalf. In such cases, control of the Company’s products passes to such bottlers/distributors when they notify the Company that they have taken possession or transferred the relevant portion of the Company’s finished goods. The Company’s general payment terms are short-term in duration. The Company does not have significant financing components or payment terms. The Company did not have any material unsatisfied performance obligations as of December 31, 2018 or December 31, 2017.

The Company excludes from revenues all taxes assessed by a governmental authority that are imposed on the sale of its products and collected from customers.

Distribution expenses to transport the Company’s products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses.

Promotional and other allowances (variable consideration) recorded as a reduction to net sales, primarily include consideration given to the Company’s bottlers/distributors or retail customers including, but not limited to the following:

discounts granted off list prices to support price promotions to end-consumers by retailers;

reimbursements given to the Company’s bottlers/distributors for agreed portions of their promotional spend with retailers, including slotting, shelf space allowances and other fees for both new and existing products;

the Company’s agreed share of fees given to bottlers/distributors and/or directly to retailers for advertising, in-store marketing and promotional activities;

the Company’s agreed share of slotting, shelf space allowances and other fees given directly to retailers;

incentives given to the Company’s bottlers/distributors and/or retailers for achieving or exceeding certain predetermined sales goals;

discounted or free products;

contractual fees given to the Company’s bottlers/distributors related to sales made directly by the Company to certain customers that fall within the bottlers’/distributors’ sales territories; and

commissions paid to TCCC based on the Company’s sales to the TCCC Subsidiaries and/or the TCCC Related Parties.

The Company’s promotional allowance programs with its bottlers/distributors and/or retailers are executed through separate agreements in the ordinary course of business. These agreements generally provide for one or more of the arrangements described above and are of varying durations, ranging from one week to one year. The Company’s promotional and other allowances are calculated based on various programs with bottlers/distributors and retail customers, and accruals are established during the year for its anticipated liabilities. These accruals are based on agreed upon terms as well as the Company’s historical experience with similar programs and require management’s judgment with respect to estimating consumer participation and/or distributor and retail customer performance levels. Differences between such estimated expenses and actual expenses for promotional and other allowance costs have historically been insignificant and are recognized in earnings in the period such differences are determined.

Amounts received pursuant to new and/or amended distribution agreements entered into with certain distributors, relating to the costs associated with terminating the Company’s prior distributors, are accounted for as revenue ratably over the anticipated life of the respective distribution agreements, generally 20 years.

The Company also enters into license agreements that generate revenues associated with third-party sales of non-beverage products bearing our trademarks including, but not limited to, clothing, hats, t-shirts, jackets, helmets and automotive wheels.

Management believes that adequate provision has been made for cash discounts, returns and spoilage based on the Company’s historical experience.

Cost of Sales – Cost of sales consists of the costs of flavors, concentrates and/or beverage bases, the costs of raw materials utilized in the manufacture of beverages, co-packing fees, repacking fees, in-bound freight charges, as well as internal transfer costs, warehouse expenses incurred prior to the manufacture of the Company’s finished products and certain quality control costs. In addition, the Company includes in costs of sales certain costs such as depreciation, amortization and payroll costs that relate to the direct manufacture by the Company of certain flavors and concentrates. Raw materials account for the largest portion of cost of sales. Raw materials include cans, bottles, other containers, flavors, ingredients and packaging materials.

Operating Expenses – Operating expenses include selling expenses such as distribution expenses to transport products to customers and warehousing expenses after manufacture, as well as expenses for advertising, sampling and in-store demonstration costs, costs for merchandise displays, point-of-sale materials and premium items, sponsorship expenses, other marketing expenses and design expenses. Operating expenses also include such costs as payroll costs, travel costs, professional service fees including legal fees, termination payments made to certain of the Company’s prior distributors, depreciation and other general and administrative costs.

Freight-Out Costs – For the years ended December 31, 2018, 2017 and 2016, freight-out costs amounted to $128.5 million, $91.9 million and $83.6 million, respectively, and have been recorded in operating expenses in the accompanying consolidated statements of income.

Advertising and Promotional Expenses – The Company accounts for advertising production costs by expensing such production costs the first time the related advertising takes place. A significant amount of the Company’s promotional expenses result from payments under endorsement and sponsorship contracts. Accounting for endorsement and sponsorship payments is based upon specific contract provisions. Generally, endorsement and sponsorship payments are expensed on a straight-line basis over the term of the contract after giving recognition to the periodic performance compliance provisions of the contracts. Advertising and promotional expenses, including, but not limited to, production costs amounted to $353.9 million, $324.0 million and $270.6 million for the years ended December 31, 2018, 2017 and 2016, respectively. Advertising and promotional expenses are included in operating expenses in the accompanying consolidated statements of income.

Income Taxes – The Company utilizes the liability method of accounting for income taxes as set forth in FASB ASC 740. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In determining the need for valuation allowances the Company considers projected future taxable income and the availability of tax planning strategies. If in the future the Company determines that it would not be able to realize its recorded deferred tax assets, an increase in the valuation allowance would be recorded, decreasing earnings in the period in which such determination is made.

The Company assesses its income tax positions and records tax benefits for all years subject to examination based upon the Company’s evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, the Company has recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements.

Stock-Based Compensation – The Company accounts for stock-based compensation under the provisions of FASB ASC 718. The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes-Merton option pricing formula. The Company records compensation expense for non-employee stock options based on the estimated fair value of the options as of the earlier of (1) the date at which a commitment for performance by the non-employee to earn the stock option is reached or (2) the date at which the non-employee’s performance is complete, using the Black-Scholes-Merton option pricing formula. Stock-based compensation cost for restricted stock awards and restricted stock units is measured based on the closing fair market value of the Company’s common stock at the date of grant. In the event that the Company has the option and intent to settle a restricted stock unit in cash, the award is classified as a liability and revalued at each balance sheet date. (See Note 14).

Net Income Per Common Share – In accordance with FASB ASC 260, net income per common share, on a basic and diluted basis, is presented for all periods. Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during each period. Diluted net income per share is computed by dividing net income by the weighted average number of common and dilutive common equivalent shares outstanding. The calculation of common equivalent shares assumes the exercise of dilutive stock options, net of assumed treasury share repurchases at average market prices, as applicable.

Concentration of Risk – Certain of the Company’s products utilize components (raw materials and/or co-packing services) from a limited number of sources. A disruption in the supply of such components could significantly affect the Company’s revenues from those products, as alternative sources of such components may not be available at commercially reasonable rates or within a reasonably short time period. The Company continues to endeavor to secure the availability of alternative sources for such components and minimize the risk of any disruption in production.

The Coca-Cola Company (“TCCC”), through certain wholly-owned subsidiaries (the “TCCC Subsidiaries”), accounted for approximately 3%, 18% and 41% of the Company’s net sales for the years ended December 31, 2018, 2017 and 2016, respectively. As part of TCCC’s North America Refranchising initiative (the “North America Refranchising”), the territories of certain TCCC Subsidiaries have been transitioned to certain independent/non wholly-owned TCCC bottlers/distributors. Accordingly, the Company’s percentage of net sales classified as sales to the TCCC Subsidiaries decreased for the years ended December 31, 2018 and 2017.

CCBCC Operations, LLC accounted for approximately 13%, 13% and 9% of the Company’s net sales for the years ended December 31, 2018, 2017 and 2016, respectively.

Reyes Coca-Cola Bottling accounted for approximately 12%, 6% and 2% of the Company’s net sales for the years ended December 31, 2018, 2017 and 2016, respectively.

Coca-Cola European Partners accounted for approximately 10%, 9% and 9% of the Company’s net sales for the years ended December 31, 2018, 2017 and 2016, respectively.

Credit Risk – The Company sells its products nationally and internationally, primarily to full service beverage distributors, retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains and foodservice customers. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company maintains reserves for estimated credit losses, and historically, such losses have been within management’s expectations.

Fair Value of Financial Instruments – The carrying value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to the relatively short maturity of the respective instruments.

Use of Estimates – The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

In August 2018, the FASB issued ASU No. 2018-15, “Intangibles–Goodwill and Other–Internal–Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.” ASU No. 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. ASU No. 2018-15 is effective for the Company on a prospective or retrospective basis beginning on January 1, 2020, with early adoption permitted. The Company is currently evaluating the impact of ASU No. 2018-15 on its financial position, results of operations and liquidity.

In August 2018, the FASB issued ASU No. 2018-14, “Compensation–Retirement Benefits–Defined Benefit Plans–General (Topic 715): Disclosure Framework–Changes to the Disclosure Requirements for Defined Benefit Plans.” ASU No. 2018-14 removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and requires certain additional disclosures. ASU No. 2018-14 is effective for the Company on a retrospective basis beginning in the year ending December 31, 2020, with early adoption permitted. The Company is currently evaluating the impact of ASU No. 2018-14 on its financial position, results of operations and liquidity.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” ASU No. 2018-13 removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. ASU No. 2018-13 disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. ASU No. 2018-13 is effective for the Company beginning on January 1, 2020, with early adoption permitted. Certain disclosures in the new guidance will need to be applied on a retrospective basis and others on a prospective basis. The Company is currently evaluating the impact of ASU No. 2018-13 on its financial position, results of operations and liquidity.

In February 2018, the FASB issued ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220)”, which amends the previous guidance to allow for certain tax effects “stranded” in accumulated other comprehensive income, which are impacted by the Tax Cuts and Jobs Act (the “Tax Reform Act”), to be reclassified from accumulated other comprehensive income into retained earnings. This amendment pertains only to those items impacted by the new tax law and will not apply to any future tax effects stranded in accumulated other comprehensive income. This standard is effective for fiscal years beginning after December 15, 2018, and allows for early adoption. The Company has completed its evaluation of the impact of ASU No. 2018-02 and determined that there are no “stranded” tax effects in accumulated other comprehensive income to be reclassified.

In January 2017, the FASB issued ASU No. 2017-04, "Intangibles and Other (Topic 350): Simplifying the Test for Goodwill Impairment", which eliminates the requirement to calculate the implied fair value of goodwill, but rather requires an entity to record an impairment charge based on the excess of a reporting unit's carrying value over its fair value. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact of ASU No. 2017-04 on its financial position, results of operations and liquidity.

In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments". The accounting standard changes the methodology for measuring credit losses on financial instruments and the timing when such losses are recorded. ASU No. 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company is currently evaluating the impact of ASU No. 2016-13 on its financial position, results of operations and liquidity.

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)". This update is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This update is effective for annual and interim reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company will adopt ASU No. 2016-02 in the first quarter of 2019 utilizing the modified retrospective transition method. In July 2018, the FASB further amended ASU No. 2016-02 and the Company will elect the transition provision permitting it to record existing operating leases on the Consolidated Balance Sheet without adjusting comparative periods. Further, the Company intends to elect the package of practical expedients allowing it to not reassess prior conclusions related to expired or existing contracts that are or that contain leases, lease classification and the accounting for initial direct costs. These practical expedients must be elected as a package and applied consistently. Operating leases with a term of 12 months or less will not be recorded on the Consolidated Balance Sheet. The Company does not expect that the adoption of ASU No. 2016-02 will have a material impact on its financial position, results of operations and liquidity. In conjunction with the adoption of ASU No. 2016-02, the Company is implementing a software solution to manage and account for leases as well as updating business processes and internal controls.

Recently adopted accounting pronouncements

In October 2016, the FASB issued ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory”, in an effort to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Previous GAAP prohibited the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset had been sold to an outside party. FASB ASU No. 2016-16 established the requirement that an entity recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. ASU No. 2016-16 was effective for financial statements issued for annual periods beginning after December 15, 2017 and interim periods within those annual periods. The Company adopted ASU No. 2016-16 effective January 1, 2018 on a modified retrospective basis, resulting in a $6.6 million reclassification of the unrecognized income tax effects related to assets transfers that occurred prior to the adoption from deferred income taxes to opening retained earnings.

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, which superseded previous revenue recognition guidance. ASU No. 2014-09 and its amendments were included in Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”. ASC 606 requires that a company recognizes revenue at an amount that reflects the consideration to which the company expects to be entitled in exchange for transferring goods or services to a customer. The Company adopted ASC 606 effective January 1, 2018, using the modified retrospective approach, with no impact to the opening retained earnings. Results for periods beginning on or after January 1, 2018 are presented under ASC 606, while prior periods are not adjusted and continue to be reported in accordance with the prior accounting guidance under ASC 605, “Revenue Recognition”. See Note 2.

REVENUE RECOGNITION

12 Months Ended

Dec. 31, 2018

REVENUE RECOGNITION

REVENUE RECOGNITION

2. REVENUE RECOGNITION

Upon adoption of ASC 606, commissions paid to TCCC based on sales to certain of the Company’s bottlers/distributors who are (i) consolidated subsidiaries of TCCC (the “TCCC Subsidiaries”), (ii) accounted for under the equity method by TCCC (the “TCCC Related Parties”) and (iii) those not included in (i) or (ii) (the “TCCC Independent Bottlers”) are accounted for as follows:


	Year Ended December 31, 2018
		Without Adoption of
Commissions Related To:	As Reported	ASC 606
TCCC Subsidiaries	Reduction to net sales	Reduction to net sales
TCCC Related Parties	Reduction to net sales	Operating expenses
TCCC Independent Bottlers	Operating expenses	Operating expenses

The impact of the adoption of ASC 606 on the Company’s consolidated statement of income for the year ended December 31, 2018 was as follows:


	Year Ended December 31, 2018
					Decrease due to
			Without Adoption		Adoption of ASC
	As Reported		of ASC 606		606
Net Sales	$	3,807,183	$	3,849,424	$	(42,241)	1
Operating Expenses	$	1,011,756	$	1,053,997	$	(42,241)	1

1 TCCC commissions based on sales to the TCCC Related Parties. There were no other identified changes to our revenue recognition policies as a result of the adoption of ASC 606.

Disaggregation of Revenue

The following table disaggregates the Company’s revenue by geographical markets and reportable segments:


	Year Ended December 31, 2018
							Latin
							America
	U.S. and						and
Net Sales	Canada		EMEA2		Asia Pacific		Caribbean		Total
Monster Energy® Drinks	$	2,627,000	$	500,826	$	225,172	$	145,429	$	3,498,427
Strategic Brands		179,677		77,841		26,254		2,064		285,836
Other		22,920		—		—		—		22,920
Total Net Sales	$	2,829,597	$	578,667	$	251,426	$	147,493	$	3,807,183

2Europe, Middle East and Africa (“EMEA”)

Contract Liabilities

Amounts received from certain bottlers/distributors at inception of their distribution contracts or at the inception of certain sales/marketing programs are accounted for as deferred revenue. As of December 31, 2018, the Company had $356.3 million of deferred revenue, which is included in current and long-term deferred revenue in the Company’s consolidated balance sheet. As of December 31, 2017, the Company had $377.6 million of deferred revenue, which is included in current and long-term deferred revenue in the Company’s consolidated balance sheet. During the years ended December 31, 2018 and 2017, $44.3 million and $43.4 million, respectively, of deferred revenue, was recognized in net sales. See Note 18.

INVESTMENTS

12 Months Ended

Dec. 31, 2018

INVESTMENTS

INVESTMENTS

3. INVESTMENTS

The following table summarizes the Company’s investments at:


									Continuous		Continuous
			Gross		Gross				Unrealized		Unrealized
			Unrealized		Unrealized				Loss Position		Loss Position
	Amortized		Holding		Holding		Fair		less than 12		greater than 12
December 31, 2018	Cost		Gains		Losses		Value		Months		Months
Available-for-sale
Short-term:
Commercial paper	$	52,838	$	—	$	—	$	52,838	$	—	$	—
Certificates of deposit		14,075		—		—		14,075		—		—
Municipal securities		151,690		16		62		151,644		62		—
U.S. government agency securities		19,943		—		12		19,931		12		—
U.S. treasuries		78,189		—		32		78,157		32		—
Variable rate demand notes		4,005		—		—		4,005		—		—
Total	$	320,740	$	16	$	106	$	320,650	$	106	$	—


									Continuous		Continuous
			Gross		Gross				Unrealized		Unrealized
			Unrealized		Unrealized				Loss Position		Loss Position
	Amortized		Holding		Holding		Fair		less than 12		greater than 12
December 31, 2017	Cost		Gains		Losses		Value		Months		Months
Available-for-sale
Short-term:
Commercial paper	$	81,026	$	—	$	—	$	81,026	$	—	$	—
Certificates of deposit		11,869		—		—		11,869		—		—
Municipal securities		469,604		1		740		468,865		740		—
U.S. government agency securities		61,307		—		88		61,219		88		—
Variable rate demand notes		49,954		—		—		49,954		—		—
Long-term:
U.S. government agency securities		2,369		—		3		2,366		3		—
Total	$	676,129	$	1	$	831	$	675,299	$	831	$	—

During the years ended December 31, 2018 and 2017, realized gains or losses recognized on the sale of investments were not significant.

The Company’s investments at December 31, 2018 and 2017 in commercial paper, certificates of deposit, municipal securities, U.S. government agency securities, U.S. treasuries and/or variable rate demand notes (“VRDNs”) carried investment grade credit ratings. VRDNs are floating rate municipal bonds with embedded put options that allow the bondholder to sell the security at par plus accrued interest. All of the put options are secured by a pledged liquidity source. While they are classified as marketable investment securities, the put option allows the VRDNs to be liquidated at par on a same day, or more generally, on a seven-day settlement basis.

The following table summarizes the underlying contractual maturities of the Company’s investments at:


	December 31, 2018				December 31, 2017
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Less than 1 year:
Commercial paper	$	52,838	$	52,838	$	81,026	$	81,026
Municipal securities		151,690		151,644		469,604		468,865
U.S. government agency securities		19,943		19,931		61,307		61,219
Certificates of deposit		14,075		14,075		11,869		11,869
U.S. treasuries		78,189		78,157		—		—
Due 1 - 10 years:
U.S. government agency securities		—		—		2,369		2,366
Variable rate demand notes		—		—		6,366		6,366
Due 11 - 20 years:
Variable rate demand notes		—		—		28,377		28,377
Due 21 - 30 years:
Variable rate demand notes		4,005		4,005		15,211		15,211
Total	$	320,740	$	320,650	$	676,129	$	675,299

FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES

12 Months Ended

Dec. 31, 2018

FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES

FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES

4. FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES

FASB ASC 820 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The three levels of inputs required by the standard that the Company uses to measure fair value are summarized below.

Level 1: Quoted prices in active markets for identical assets or liabilities.

Level 2: Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

FASB ASC 820 requires the use of observable market inputs (quoted market prices) when measuring fair value and requires a Level 1 quoted price to be used to measure fair value whenever possible.

The following tables present the Company’s financial assets that are recorded at fair value on a recurring basis, segregated among the appropriate levels within the fair value hierarchy at:


December 31, 2018	Level 1		Level 2		Level 3		Total
Cash	$	393,936	$	—	$	—	$	393,936
Money market funds		191,358		—		—		191,358
Certificates of deposit		—		14,075		—		14,075
Commercial paper		—		60,422		—		60,422
Variable rate demand notes		—		4,005		—		4,005
Municipal securities		—		177,118		—		177,118
U.S. government agency securities		—		39,092		—		39,092
U.S. treasuries		—		78,157		—		78,157
Foreign currency derivatives		—		(492)		—		(492)
Total	$	585,294	$	372,377	$	—	$	957,671

Amounts included in:
Cash and cash equivalents	$	585,294	$	52,219	$	—	$	637,513
Short-term investments		—		320,650		—		320,650
Accounts receivable, net		—		43		—		43
Investments		—		—		—		—
Accrued liabilities		—		(535)		—		(535)
Total	$	585,294	$	372,377	$	—	$	957,671


December 31, 2017	Level 1		Level 2		Level 3		Total
Cash	$	310,885	$	—	$	—	$	310,885
Money market funds		112,848		—		—		112,848
Certificates of deposit		—		15,720		—		15,720
Commercial paper		—		99,903		—		99,903
Variable rate demand notes		—		49,954		—		49,954
Municipal securities		—		529,984		—		529,984
U.S. government agency securities		—		81,230		—		81,230
U.S. treasuries		—		3,397		—		3,397
Foreign currency derivatives		—		(1,484)		—		(1,484)
Total	$	423,733	$	778,704	$	—	$	1,202,437

Amounts included in:
Cash and cash equivalents	$	423,733	$	104,889	$	—	$	528,622
Short-term investments		—		672,933		—		672,933
Accounts receivable, net		—		95		—		95
Investments		—		2,366		—		2,366
Accrued liabilities		—		(1,579)		—		(1,579)
Total	$	423,733	$	778,704	$	—	$	1,202,437

All of the Company’s short-term investments are classified within Level 1 or Level 2 within the fair value hierarchy. The Company’s valuation of its Level 1 investments, which include money market funds, is based on quoted market prices in active markets for identical securities. The Company’s valuation of its Level 2 investments, which include municipal securities, commercial paper, U.S. treasuries, certificates of deposit, VRDNs and U.S. government agency securities, is based on other observable inputs, specifically a market approach which utilizes valuation models, pricing systems, mathematical tools and other relevant information for the same or similar securities. The Company’s valuation of its Level 2 foreign currency exchange contracts is based on quoted market prices of the same or similar instruments, adjusted for counterparty risk. There were no transfers between Level 1 and Level 2 measurements during the years ended December 31, 2018 and 2017, and there were no changes in the Company’s valuation techniques.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

12 Months Ended

Dec. 31, 2018

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

5. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to foreign currency exchange rate risks related primarily to its foreign business operations. During the years ended December 31, 2018, 2017 and 2016, respectively, the Company entered into forward currency exchange contracts with financial institutions to create an economic hedge to specifically manage a portion of the foreign exchange risk exposure associated with certain consolidated subsidiaries’ non-functional currency denominated assets and liabilities. All foreign currency exchange contracts entered into by the Company that were outstanding as of December 31, 2018 have terms of three months or less. The Company does not enter into forward currency exchange contracts for speculation or trading purposes.

The notional amount and fair value of all outstanding foreign currency derivative instruments in the consolidated balance sheets consist of the following at:


December 31, 2018
Derivatives not designated as
hedging instruments under	Notional		Fair
FASB ASC 815-20	Amount		Value		Balance Sheet Location
Assets:
Foreign currency exchange contracts:
Receive SGD/pay USD	$	8,341	$	30	Accounts receivable, net
Receive NOK/pay USD		902		13	Accounts receivable, net

Liabilities:
Foreign currency exchange contracts:
Receive USD/pay GBP	$	40,648	$	(323)	Accrued liabilities
Receive USD/pay AUD		15,124		(105)	Accrued liabilities
Receive USD/pay ZAR		8,618		(68)	Accrued liabilities
Receive USD/pay COP		2,931		(33)	Accrued liabilities
Receive USD/pay NZD		2,952		(4)	Accrued liabilities
Receive USD/pay EUR		6,894		(2)	Accrued liabilities


December 31, 2017
Derivatives not designated as
hedging instruments under	Notional		Fair
FASB ASC 815-20	Amount		Value		Balance Sheet Location
Assets:
Foreign currency exchange contracts:
Receive CAD/pay USD	$	4,892	$	61	Accounts receivable, net
Receive SGD/pay USD		223		2	Accounts receivable, net
Receive NOK/pay USD		1,534		18	Accounts receivable, net
Receive USD/pay BRL		1,806		1	Accounts receivable, net
Receive USD/pay COP		2,803		13	Accounts receivable, net

Liabilities:
Foreign currency exchange contracts:
Receive USD/pay GBP	$	31,342	$	(334)	Accrued liabilities
Receive USD/pay EUR		65,131		(642)	Accrued liabilities
Receive USD/pay AUD		17,238		(177)	Accrued liabilities
Receive USD/pay ZAR		21,311		(222)	Accrued liabilities
Receive USD/pay MXN		7,720		(126)	Accrued liabilities
Receive USD/pay NZD		1,826		(18)	Accrued liabilities
Receive USD/pay TRY		5,483		(52)	Accrued liabilities
Receive USD/pay CLP		1,112		(8)	Accrued liabilities

The net gain (loss) on derivative instruments in the consolidated statements of income were as follows:


		Amount of gain (loss)
		recognized in income on
		derivatives
Derivatives not designated as	Location of gain (loss)	Year ended
hedging instruments under	recognized in income on	December 31,		December 31,		December 31,
FASB ASC 815-20	derivatives	2018		2017		2016
Foreign currency exchange contracts	Other income (expense), net	$	9,737	$	(13,733)	$	1,819

INVENTORIES

12 Months Ended

Dec. 31, 2018

INVENTORIES

INVENTORIES

6. INVENTORIES

Inventories consist of the following at December 31:


	2018		2017
Raw materials	$	94,421	$	78,834
Finished goods		183,284		176,911
	$	277,705	$	255,745

PROPERTY AND EQUIPMENT, Net

12 Months Ended

Dec. 31, 2018

PROPERTY AND EQUIPMENT, Net

PROPERTY AND EQUIPMENT, Net

7. PROPERTY AND EQUIPMENT, Net

Property and equipment consist of the following at December 31:


	2018		2017
Land	$	44,261	$	47,373
Leasehold improvements		5,909		3,109
Furniture and fixtures		6,932		6,461
Office and computer equipment		18,717		14,506
Computer software		3,278		3,650
Equipment		183,727		148,434
Building		115,242		107,374
Vehicles		39,026		38,179
		417,092		369,086
Less: accumulated depreciation and amortization		(174,041)		(138,810)
	$	243,051	$	230,276

Total depreciation and amortization expense recorded was $45.0 million, $37.0 million and $30.2 million for the years ended December 31, 2018, 2017 and 2016, respectively.

GOODWILL AND OTHER INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2018

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

8. GOODWILL AND OTHER INTANGIBLE ASSETS

The following is a roll-forward of goodwill for the years ended December 31, 2018 and 2017 by reportable segment:


	Monster
	Energy®		Strategic
	Drinks		Brands		Other		Total
Balance at December 31, 2017	$	693,644	$	637,999	$	—	$	1,331,643
Acquisitions		—		—		—		—
Balance at December 31, 2018	$	693,644	$	637,999	$	—	$	1,331,643


	Monster
	Energy®		Strategic
	Drinks		Brands		Other		Total
Balance at December 31, 2016	$	693,644	$	637,999	$	—	$	1,331,643
Acquisitions		—		—		—		—
Balance at December 31, 2017	$	693,644	$	637,999	$	—	$	1,331,643

Intangible assets consist of the following at:


	December 31,		December 31,
	2018		2017
Amortizing intangibles	$	71,350	$	71,400
Accumulated amortization		(38,311)		(26,383)
		33,039		45,017
Non-amortizing intangibles		1,012,839		989,068
	$	1,045,878	$	1,034,085

Amortizing intangibles primarily consist of customer relationships. All amortizing intangibles have been assigned an estimated finite useful life and such intangibles are amortized on a straight-line basis over the number of years that approximate their respective useful lives, generally five to seven years. Total amortization expense recorded was $11.9 million, $11.9 million and $10.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.

The following is the future estimated amortization expense related to amortizing intangibles as of December 31, 2018:


Year Ending December 31:
2019	$	11,847
2020		7,965
2021		4,722
2022		4,697
2023		1,404
2024 and thereafter		2,404
	$	33,039

At December 31, 2018, non-amortizing intangibles primarily consist of indefinite-lived tradenames, flavors and formulas.

DISTRIBUTION AGREEMENTS	12 Months Ended
DISTRIBUTION AGREEMENTS	Dec. 31, 2018
DISTRIBUTION AGREEMENTS
DISTRIBUTION AGREEMENTS	9. DISTRIBUTION AGREEMENTS In accordance with FASB ASC No. 420 “Exit or Disposal Cost Obligations”, the Company expenses distributor termination costs in the period in which the written notification of termination occurs. As a result, the Company incurred termination costs of $26.6 million, $35.4 million and $79.8 million for the years ended December 31, 2018, 2017 and 2016, respectively. Such termination costs have been expensed in full and are included in operating expenses for the years ended December 31, 2018, 2017 and 2016, respectively. In the normal course of business, amounts received pursuant to new and/or amended distribution agreements entered into with certain distributors, relating to the costs associated with terminating agreements with the Company’s prior distributors, are accounted for as deferred revenue and are recognized as revenue ratably over the anticipated life of the respective distribution agreement, generally 20 years. Revenue recognized was $21.9 million, $22.3 million and $26.1 million for the years ended December 31, 2018, 2017 and 2016, respectively.

DEBT	12 Months Ended
DEBT	Dec. 31, 2018
DEBT
DEBT	10. DEBT The Company entered into a credit facility with Comerica Bank (“Comerica”) consisting of a revolving line of credit, which was amended in June 2017, under which the Company may borrow up to $10.0 million of non-collateralized debt. The revolving line of credit is effective through June 1, 2020. Interest on borrowings under the line of credit is based on Comerica’s base (prime) rate minus 1% to 1.5%, or London Interbank Offered Rates plus an additional percentage of 1.25% to 1.75%, depending upon certain financial ratios maintained by the Company. The Company had no outstanding borrowings on this line of credit at December 31, 2018. Under this revolving line of credit, the Company may also issue standby Letters of Credit with an aggregate amount of up to $4.0 million. The fee on the standby Letters of Credit ranges from 1.00% to 1.50% depending upon certain financial ratios maintained by the Company. The Company had no outstanding standby Letters of Credit at December 31, 2018. In December 2016, the Company entered into a credit facility with HSBC Bank (China) Company Limited, Shanghai Branch consisting of a non-collateralized working capital line of credit. In February 2018, the working capital line limit was increased to $15.0 million. At December 31, 2018, the interest rate on borrowings under the line of credit was 5.5%. As of December 31, 2018, the Company had $11.7 million outstanding on this line of credit, including interest, which is included in accounts payable in the consolidated balance sheet. The Company’s debt of $0.8 million and $1.3 million at December 31, 2018 and 2017, respectively, consisted of capital leases, collateralized by vehicles, payable over 12 months in monthly installments at various effective interest rates, with final payments ending on or before December 31, 2018. At December 31, 2018 and 2017, the assets acquired under capital leases had a net book value of $4.9 million and $5.3 million, net of accumulated depreciation of $4.6 million and $4.2 million, respectively. Interest expense for capital lease obligations amounted to $0.06 million, $0.08 million and $0.07 million for the years ended December 31, 2018, 2017 and 2016, respectively.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2018

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

11. COMMITMENTS AND CONTINGENCIES

The Company is obligated under various non-cancellable lease agreements providing for office space, warehouse space, and automobiles that expire at various dates through the year 2033.

Rent expense under operating leases was $6.1 million, $10.7 million and $9.9 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Future minimum rental payments at December 31, 2018 under the operating leases referred to above are as follows:


Year Ending December 31:
2019	$	3,954
2020		2,949
2021		2,410
2022		2,114
2023		1,681
2024 and thereafter		14,860
	$	27,968

Contractual obligations – The Company has the following contractual obligations related primarily to sponsorships and other commitments as of December 31, 2018:


Year Ending December 31:
2019	$	99,004
2020		51,572
2021		23,577
2022		12,628
2023		3,405
2024 and thereafter		—
	$	190,186

Purchase Commitments – The Company has purchase commitments aggregating approximately $49.8 million at December 31, 2018, which represent commitments made by the Company and its subsidiaries to various suppliers of raw materials for the production of its products. These obligations vary in terms, but are generally satisfied within one year.

The Company purchases various raw material items, including, but not limited to, flavors, ingredients, dietary ingredients, containers, milk, glucose, sucralose, cream and protein, from a limited number of suppliers. An interruption in supply from any of such resources could result in the Company’s inability to produce certain products for limited or possibly extended periods of time. The aggregate value of purchases from suppliers of such limited resources described above for the years ended December 31, 2018, 2017 and 2016 was $289.6 million, $273.6 million and $205.9 million, respectively.

Guarantees – The Company from time to time enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily relate to: (i) certain agreements with the Company’s officers, directors and employees under which the Company may be required to indemnify such persons for liabilities arising out of their employment relationship, (ii) certain distribution or purchase agreements under which the Company may have to indemnify the Company’s customers from any claim, liability or loss arising out of any actual or alleged injury or damages suffered in connection with the consumption or purchase of the Company’s products or the use of Company trademarks, and (iii) certain real estate leases, under which the Company may be required to indemnify property owners for liabilities and other claims arising from the Company’s use of the applicable premises. The terms of such obligations vary and typically, a maximum obligation is not explicitly stated. Generally, the Company believes that its insurance coverage is adequate to cover any resulting liabilities or claims.

Litigation – The Company, TCCC and certain affiliates are parties to various agreements setting forth, among other things, provisions relating to TCCC’s equity holding in the Company and the terms on which the Company’s energy products are distributed globally by members of TCCC’s distribution network. Among other provisions, the agreements restrict TCCC from competing in the energy drink category in certain territories prior to the termination of the applicable distribution coordination agreement with TCCC, with certain exceptions.

TCCC has developed three energy products that it believes it may market under the exception relating to the Coca-Cola brand. The Company believes that the exception does not apply to this situation. By mutual agreement to obtain clarification, the issue was submitted to the American Arbitration Association on October 31, 2018. We expect a decision will be reached during the second quarter of 2019. TCCC has indicated that it has suspended the proposed launch of such products until April 2019. As the relief sought is limited, no reasonable possible range of losses, if any, can be estimated.

The Company is currently a defendant in a number of personal injury lawsuits, claiming that the death or other serious injury of the plaintiffs was caused by consumption of Monster Energy® brand energy drinks. The plaintiffs in these lawsuits allege strict product liability, negligence, fraudulent concealment, breach of implied warranties and wrongful death. The Company believes that each complaint is without merit and plans a vigorous defense. The Company also believes that any damages, if awarded, would not have a material adverse effect on the Company’s financial position or results of operations.

Furthermore, from time to time in the normal course of business, the Company is named in other litigation, including consumer class actions, intellectual property litigation and claims from prior distributors. Although it is not possible to predict the ultimate outcome of such litigation, based on the facts known to the Company, management believes that such litigation in the aggregate will likely not have a material adverse effect on the Company’s financial position or results of operations.

The Company evaluates, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of the liability that is accrued, if any, or in the amount of any related insurance reimbursements recorded. As of December 31, 2018, the Company’s consolidated balance sheet includes accrued loss contingencies of approximately $0.06 million.

ACCUMULATED OTHER COMPREHENSIVE LOSS

12 Months Ended

Dec. 31, 2018

ACCUMULATED OTHER COMPREHENSIVE LOSS

ACCUMULATED OTHER COMPREHENSIVE LOSS

12. ACCUMULATED OTHER COMPREHENSIVE LOSS

The components of accumulated other comprehensive loss are as follows at December 31:


	2018		2017
Accumulated net unrealized loss on available-for-sale securities	$	89	$	841
Foreign currency translation adjustments, net of tax		32,775		15,818
Total accumulated other comprehensive loss	$	32,864	$	16,659

TREASURY STOCK PURCHASE	12 Months Ended
TREASURY STOCK PURCHASE	Dec. 31, 2018
TREASURY STOCK PURCHASE
TREASURY STOCK PURCHASE	13. TREASURY STOCK PURCHASE On February 28, 2017, the Company’s Board of Directors authorized a share repurchase program for the purchase of up to $500.0 million of the Company’s outstanding common stock (the “February 2017 Repurchase Plan”). During the year ended December 31, 2018, the Company purchased 4.3 million shares of common stock at an average purchase price of $57.74 per share, for a total amount of $249.9 million (excluding broker commissions), under the February 2017 Repurchase Plan, which exhausted the availability under the February 2017 Repurchase Plan. Such shares are included in common stock in treasury in the accompanying consolidated balance sheet at December 31, 2018. On February 27, 2018, the Company’s Board of Directors authorized a share repurchase program for the purchase of up to $250.0 million of the Company’s outstanding common stock (the “February 2018 Repurchase Program”). During the year ended December 31, 2018, the Company purchased 5.0 million shares of common stock at an average purchase price of $49.81 per share, for a total amount of $249.9 million (excluding broker commissions), which exhausted the availability under the February 2018 Repurchase Program. Such shares are included in common stock in treasury in the accompanying consolidated balance sheet at December 31, 2018. On May 29, 2018, the Company’s Board of Directors authorized a share repurchase program for the purchase of up to $500.0 million of the Company’s outstanding common stock (the “May 2018 Repurchase Plan”). During the year ended December 31, 2018, the Company purchased 9.0 million shares of common stock at an average purchase price of $55.55 per share, for a total amount of $499.9 million (excluding broker commissions), under the May 2018 Repurchase Plan, which exhausted the availability under the May 2018 Repurchase Plan. Such shares are included in the common stock in treasury in the accompanying consolidated balance sheet at December 31, 2018. On August 7, 2018, the Company’s Board of Directors authorized a share repurchase program for the purchase of up to $500.0 million of the Company’s outstanding common stock (the “August 2018 Repurchase Plan”). During the year ended December 31, 2018, the Company purchased 6.0 million shares of common stock at an average purchase price of $57.11 per share, for a total amount of $340.3 million (excluding broker commissions), under the August 2018 Repurchase Plan. Such shares are included in the common stock in treasury in the accompanying consolidated balance sheet at December 31, 2018. As of February 26, 2019, $20.6 million remained available for repurchase under the August 2018 Repurchase Plan. During the year ended December 31, 2018, 34,976 shares of common stock were purchased from employees in lieu of cash payments for options exercised or withholding taxes due for a total amount of $2.1 million. While such purchases are considered common stock repurchases, they are not counted as purchases against our authorized share repurchase programs. Such shares are included in common stock in treasury in the accompanying consolidated balance sheet at December 31, 2018.

STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2018

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

14. STOCK-BASED COMPENSATION

The Company has two stock-based compensation plans under which shares were available for grant at December 31, 2018: the Monster Beverage Corporation 2011 Omnibus Incentive Plan (the “2011 Omnibus Incentive Plan”), including the Monster Beverage Deferred Compensation Plan (the “Deferred Compensation Plan”) as a sub plan thereunder, and the Monster Beverage Corporation 2017 Compensation Plan for Non-Employee Directors (the “2017 Directors Plan”), including the Monster Beverage Deferred Compensation Plan for Non-Employee Directors as a sub plan thereunder.

The 2011 Omnibus Incentive Plan permits the granting of options, stock appreciation rights, restricted stock, restricted stock units, performance awards and other stock-based awards up to an aggregate of 43,500,000 shares of the common stock of the Company to employees or consultants of the Company and its subsidiaries. Shares authorized under the 2011 Omnibus Incentive Plan are reduced by 2.16 shares for each share granted or issued with respect to a Full Value Award. A Full Value Award is an award other than an incentive stock option, a non-qualified stock option, or a stock appreciation right, which is settled by the issuance of shares. Options granted under the 2011 Omnibus Incentive Plan may be incentive stock options under Section 422 of the Internal Revenue Code, as amended, or non-qualified stock options. The Compensation Committee of the Board of Directors (the “Compensation Committee”) has sole and exclusive authority to grant stock awards to all employees who are not new hires and to all new hires who are subject to Section 16 of the Exchange Act. The Compensation Committee and the Executive Committee of the Board of Directors (the “Executive Committee”) each independently has the authority to grant stock awards to new hires who are not Section 16 employees. Awards granted by the Executive Committee are not subject to approval or ratification by the Board of Directors or the Compensation Committee. Options granted under the 2011 Omnibus Incentive Plan generally vest over a five-year period from the grant date and are generally exercisable up to 10 years after the grant date. As of December 31, 2018, 22,740,597 shares of the Company’s common stock have been granted, net of cancellations, and 16,611,623 shares (as adjusted for Full Value Awards) of the Company’s common stock remain available for grant under the 2011 Omnibus Incentive Plan.

In 2016, the Company adopted the Deferred Compensation Plan (as a sub plan to the 2011 Omnibus Incentive Plan), pursuant to which eligible employees may elect to defer cash and/or equity based compensation and to receive the deferred amounts, together with an investment return (positive or negative), either at a pre-determined time in the future or upon termination of their employment with the Company or its subsidiaries or affiliates that are participating employers under the Deferred Compensation Plan, as provided under the Deferred Compensation Plan and in relevant deferral elections. Deferrals under the Deferred Compensation Plan are unfunded and unsecured. As of December 31, 2018, deferrals under the Deferred Compensation Plan are solely comprised of cash compensation and equity compensation . Future amounts due are not material in the aggregate.

In 2017, the Company adopted the 2017 Directors Plan, a successor plan to the 2009 Monster Beverage Corporation Stock Incentive Plan for Non-Employee Directors. The 2017 Directors Plan permits the granting of stock options, stock appreciation rights, restricted shares or restricted stock units, deferred awards, dividend equivalents, and other share based-awards up to an aggregate of 1,250,000 shares of common stock of the Company to non-employee directors of the Company.

Each calendar year, a non-employee director will receive an annual retainer and annual equity award, as provided for in the 2017 Directors Plan, which may be modified from time to time. Currently, with respect to equity awards, each non-employee director receives an award of restricted stock units at each annual meeting of the Company’s stockholders or promptly thereafter. A non-employee director’s annual award of restricted stock units will generally vest on the earliest to occur of: (a) the last business day immediately preceding the annual meeting of the Company’s stockholders in the calendar year following the calendar year in which the grant date occurs, (b) a Change of Control (as defined in the 2017 Directors Plan), (c) the non-employee director’s death, or (d) the date of the non-employee director’s separation from service due to disability, so long as the non-employee director remains a non-employee director through such date. The Board of Directors may in its discretion award non-employee directors stock options, stock appreciation rights, restricted stock, and other share-based awards in lieu of or in addition to restricted stock units. The Board of Directors may amend or terminate the 2017 Directors Plan at any time, subject to certain limitations set forth in the 2017 Directors Plan. As of December 31, 2018, 47,880 shares of the Company’s common stock had been granted under the 2017 Directors Plan, and 1,202,120 shares of the Company’s common stock remain available for grant.

In 2017, the Company adopted the Deferred Compensation Plan for Non-Employee Directors (as a sub plan to the 2017 Directors Plan), pursuant to which the Board of Directors may permit non-employee directors to elect, at such times and in accordance with rules and procedures (or sub-plan) adopted by the Board of Directors (which are intended to comply with Code Section 409A, as applicable), to receive all or any portion of such non-employee director’s compensation, whether payable in cash or in equity, on a deferred basis. Deferrals under the Deferred Compensation Plan for Non-Employee Directors are unfunded and unsecured. As of December 31, 2018, deferrals under the Deferred Compensation Plan for Non-Employee Directors are solely comprised of cash compensation and equity compensation . Future amounts due are not material in the aggregate. The 2017 Directors Plan was adopted to effectuate any such deferrals. The 2017 Directors Plan is administered by the Board of Directors. Each award granted under the 2017 Directors Plan will be evidenced by a written agreement and will contain the terms and conditions that the Board of Directors deems appropriate.

Under the 2017 Directors Plan, the Board of Directors requires each non-employee director to satisfy the share ownership guidelines set forth below, as may be amended by the Board of Directors from time to time. The current share ownership guidelines provide that non-employee directors of the Company must:

Hold at least 9,000 shares of Company common stock. For this purpose, deferred shares or deferred restricted stock units will be deemed held, to the extent vested.

The minimum stock ownership level must be achieved by each non-employee director by the third (3rd) anniversary of such non-employee director’s initial appointment to the Board of Directors.

Once achieved, ownership of the guideline amount should be maintained for so long as the non-employee director retains his or her seat on the Board of Directors.

There may be rare instances where these guidelines would place a hardship on a non-employee director. In these cases or in similar circumstances, the Board of Directors will make the final decision as to developing an alternative stock ownership guideline for a non-employee director that reflects the intention of these guidelines and his or her personal circumstances.

The Company recorded $57.1 million, $52.3 million and $45.8 million of compensation expense relating to stock options, restricted stock awards and restricted stock units during the years ended December 31, 2018, 2017 and 2016, respectively.

The excess tax benefit realized for tax deductions from non-qualified stock option exercises, disqualifying dispositions of incentive stock options and vesting of restricted stock units for the years ended December 31, 2018, 2017 and 2016 was $8.5 million, $96.7 million and $20.8 million, respectively.

Stock Options

Under the Company’s stock-based compensation plans, all stock options granted through December 31, 2018 were granted at prices based on the fair value of the Company’s common stock on the date of grant. The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes-Merton option pricing formula with the assumptions included in the table below. The Company records compensation expense for non-employee stock options based on the estimated fair value of the options as of the earlier of (1) the date at which a commitment for performance by the non-employee to earn the stock option is reached or (2) the date at which the non-employee’s performance is complete, using the Black-Scholes-Merton option pricing formula with the assumptions included in the table below. The Company uses historical data to determine the exercise behavior, volatility and forfeiture rate of the options.

The following weighted-average assumptions were used to estimate the fair value of options granted during:


	2018		2017		2016
Dividend yield	0.0	%	0.0	%	0.0	%
Expected volatility	34.7	%	36.5	%	36.2	%
Risk-free interest rate	2.81	%	2.11	%	1.57	%
Expected term	6.0 Years		6.1 Years		6.3 Years

Expected Volatility: The Company uses historical volatility as it provides a reasonable estimate of the expected volatility. Historical volatility is based on the most recent volatility of the stock price over a period of time equivalent to the expected term of the option.

Risk-Free Interest Rate: The risk-free interest rate is based on the U.S. treasury zero coupon yield curve in effect at the time of grant for the expected term of the option.

Expected Term: The Company’s expected term represents the weighted-average period that the Company’s stock options are expected to be outstanding. The expected term is based on expected time to post-vesting exercise of options by employees. The Company uses historical exercise patterns of previously granted options to derive employee behavioral patterns used to forecast expected exercise patterns.

The following table summarizes the Company’s activities with respect to its stock option plans as follows:


				Weighted-
		Weighted-		Average
		Average		Remaining
	Number of	Exercise		Contractual	Aggregate
	Shares (In	Price Per		Term (In	Intrinsic
Options	thousands)	Share		years)	Value
Outstanding at January 1, 2018	17,819	$	29.62	6.1	$	600,032
Granted 01/01/18 - 03/31/18	2,615	$	58.76
Granted 04/01/18 - 06/30/18	360	$	51.72
Granted 07/01/18 - 09/30/18	11	$	58.77
Granted 10/01/18 - 12/31/18	194	$	55.91
Exercised	(1,450)	$	19.20
Cancelled or forfeited	(659)	$	45.22
Outstanding at December 31, 2018	18,890	$	34.61	5.8	$	303,627
Vested and expected to vest in the future at December 31, 2018	18,052	$	33.83	5.7	$	301,723
Exercisable at December 31, 2018	10,432	$	23.10	4.1	$	272,636

The following table summarizes information about stock options outstanding and exercisable at December 31, 2018:


					Options Outstanding				Options Exercisable
						Weighted
						Average	Weighted		Number	Weighted
					Number	Remaining	Average		Exercisable	Average
Range of Exercise					Outstanding	Contractual	Exercise		(In	Exercise
Prices ($)					(In Thousands)	Term (Years)	Price ($)		Thousands)	Price ($)
$	5.94	-	$	5.94	3,086	0.9	$	5.94	3,086	$	5.94
$	6.02	-	$	17.99	2,109	4.0	$	16.13	2,109	$	16.13
$	18.64	-	$	23.68	2,227	5.0	$	22.77	1,970	$	22.71
$	36.05	-	$	43.64	1,932	7.2	$	41.59	683	$	40.41
$	43.99	-	$	43.99	2,325	7.2	$	43.99	856	$	43.99
$	44.73	-	$	45.01	623	7.1	$	44.94	225	$	44.94
$	45.16	-	$	45.16	1,998	6.1	$	45.16	1,183	$	45.16
$	45.55	-	$	55.20	1,899	8.4	$	48.24	313	$	46.81
$	56.08	-	$	57.36	81	9.6	$	57.16	1	$	56.08
$	58.73	-	$	67.93	2,610	9.1	$	58.89	6	$	62.92
					18,890	5.8	$	34.61	10,432	$	23.10

The weighted-average grant-date fair value of options granted during the years ended December 31, 2018, 2017 and 2016 was $22.37 per share, $18.29 per share and $16.90 per share, respectively. The total intrinsic value of options exercised during the years ended December 31, 2018, 2017 and 2016 was $56.8 million, $285.8 million and $70.6 million, respectively.

Cash received from option exercises under all plans for the years ended December 31, 2018, 2017 and 2016 was $25.9 million, $52.6 million and $16.4 million, respectively.

At December 31, 2018, there was $98.7 million of total unrecognized compensation expense related to non-vested options granted to employees under the Company’s share-based payment plans. That cost is expected to be recognized over a weighted-average period of 2.6 years.

Restricted Stock Units

Stock-based compensation cost for restricted stock units is measured based on the closing fair market value of the Company’s common stock at the date of grant. In the event that the Company has the option and intent to settle a restricted stock unit in cash, the award is classified as a liability and revalued at each balance sheet date.

The following table summarizes the Company’s activities with respect to non-vested restricted stock units as follows:


		Weighted
	Number of	Average
	Shares (in	Grant-Date
	thousands)	Fair Value
Non-vested at January 1, 2018	530	$	45.09
Granted 01/01/18 - 03/31/18	221	$	58.75
Granted 04/01/18 - 06/30/18	48	$	52.31
Granted 07/01/18 - 09/30/18	1	$	58.72
Granted 10/01/18 - 12/31/18	1	$	56.19
Vested	(265)	$	45.26
Forfeited/cancelled	(7)	$	33.60
Non-vested at December 31, 2018	529	$	51.55

The weighted-average grant-date fair value of restricted stock units granted during the years ended December 31, 2018, 2017 and 2016 was $57.59, $46.74 and $44.71 per share, respectively. As of December 31, 2018, 0.5 million of restricted stock units are expected to vest.

At December 31, 2018, total unrecognized compensation expense relating to non-vested restricted stock units was $15.7 million, which is expected to be recognized over a weighted‑average period of 1.6 years.

Employee and Non-Employee Share-Based Compensation Expense

The table below shows the amounts recognized in the consolidated financial statements for the years ended December 31, 2018, 2017 and 2016 for share-based compensation related to employees and non-employees. Employee and non-employee share-based compensation expense of $57.1 million for the year ended December 31, 2018 is comprised of $10.0 million relating to incentive stock options and $47.1 million relating to non-qualified stock options and restricted units. Employee and non-employee share-based compensation expense of $52.3 million for the year ended December 31, 2017 is comprised of $8.7 million relating to incentive stock options and $43.6 million relating to non-qualified stock options and restricted units. Employee and non-employee share‑based compensation expense of $45.8 million for the year ended December 31, 2016 is comprised of $8.0 million relating to incentive stock options and $37.8 million relating to non-qualified stock options and restricted units.


	2018		2017		2016
Operating expenses	$	57,111	$	52,282	$	45,848
Total employee and non-employee share-based compensation expense included in income, before income tax		57,111		52,282		45,848
Less: Amount of income tax benefit recognized in earnings		(14,892)		(100,635)		(34,909)
Amount charged against net income	$	42,219	$	(48,353)	$	10,939

INCOME TAXES

12 Months Ended

Dec. 31, 2018

INCOME TAXES

INCOME TAXES

15. INCOME TAXES

On December 22, 2017, the President of the United States signed into law the Tax Reform Act. The legislation significantly changes U.S. tax law by, among other things, lowering corporate income tax rates, implementing a territorial tax system and imposing a repatriation tax on deemed repatriated earnings of foreign subsidiaries. The Tax Reform Act permanently reduces the U.S. corporate income tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. The SEC staff issued Staff Accounting Bulletin No. 118 to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Reform Act. A company may select between one of three scenarios to determine a reasonable estimate for certain income tax effects arising from the Tax Reform Act. Those scenarios are (i) a final estimate which effectively closes the measurement window; (ii) a reasonable estimate leaving the measurement window open for future revisions; and (iii) no estimate as the law is still being analyzed. The Company was able to provide a reasonable estimate for the revaluation of deferred taxes and the effects of the toll charge on undistributed foreign subsidiary earnings and profits (“E&P”). As a result of the reduction in the U.S. corporate income tax rate from 35% to 21% under the Tax Reform Act, the Company revalued its net deferred tax assets at December 31, 2017, resulting in a provisional $39.8 million charge included in the provision for income taxes for the year ended December 31, 2017. The Tax Reform Act also provided for a one-time deemed mandatory repatriation of post-1986 E&P through the year ended December 31, 2017. As a result, the Company recognized a provisional $2.1 million charge in the provision for income taxes for the year ended December 31, 2017 related to such deemed mandatory repatriation. The Company completed its analysis of the Tax Reform Act during 2018 and adjusted the 2017 provisional estimate to the final amounts in accordance with Staff Accounting Bulletin No. 118. The measurement window begins in the reporting period that includes the enactment date and ends when an entity has obtained, prepared and analyzed the information needed in order to complete the accounting requirements under ASC 740. For the year ended December 31, 2018, the Company made an adjustment to the provisional amount and recognized an additional $1.8 million provision for income tax related to the deemed mandatory repatriation.

The Company has not made additional measurement window adjustments to these items during the year ended December 31, 2018.

The Company evaluated the various provisions of the Tax Reform Act, including, the global intangible low-taxed income (“GILTI”) and the foreign derived intangible income provisions. The Company will treat any U.S. tax on foreign earnings under GILTI as a current period expense when incurred.

The domestic and foreign components of the Company’s income before provision for income taxes are as follows:


	Year Ended December 31,
	2018		2017		2016
Domestic*	$	1,100,487	$	1,062,713	$	1,029,763
Foreign*		192,785		138,910		49,922
Income before provision for income taxes	$	1,293,272	$	1,201,623	$	1,079,685

*After intercompany royalties, management fees and interest charges from the Company’s domestic to foreign entities of $40.5 million, $42.5 million and $25.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Components of the provision for income taxes are as follows:


	Year Ended December 31,
	2018		2017		2016
Current:
Federal	$	209,147	$	243,127	$	212,283
State		41,934		43,252		35,756
Foreign		42,541		27,522		17,171
		293,622		313,901		265,210

Deferred:
Federal		9,804		61,797		87,360
State		1,644		3,062		15,254
Foreign		(8,778)		(4,579)		(9,709)
		2,670		60,280		92,905

Valuation allowance		3,976		6,764		8,885
	$	300,268	$	380,945	$	367,000

A reconciliation of the total provision for income taxes after applying the U.S. federal statutory rate of 21% for 2018 and 35% for 2017 and 2016 to income before provision for income taxes to the reported provision for income taxes are as follows:


	Year Ended December 31,
	2018		2017		2016
U.S. Federal tax expense at statutory rates	$	271,587	$	420,568	$	377,599
State income taxes, net of federal tax benefit		36,312		27,569		33,148
Permanent differences		3,606		10,356		954
Stock based compensation		(370)		(79,687)		(13,654)
Domestic production deduction		—		(22,229)		(21,447)
Deferred tax asset reduction (Tax Reform Act)		—		39,763		—
Other		(8,438)		3,736		(8,765)
Foreign rate differential		(6,405)		(25,895)		(9,720)
Valuation allowance		3,976		6,764		8,885
	$	300,268	$	380,945	$	367,000

Major components of the Company’s deferred tax assets (liabilities) at December 31, 2018 and 2017 are as follows:


	2018		2017
Deferred Tax Assets:
Reserve for sales returns	$	137	$	159
Reserve for inventory obsolescence		2,836		522
Reserve for marketing development fund		4,666		6,360
Capitalization of inventory costs		1,210		1,598
State franchise tax - current		2,663		2,050
Accrued compensation		574		1,473
Accrued other liabilities		5,276		3,917
Deferred revenue		87,573		93,321
Stock-based compensation		25,439		21,119
Foreign net operating loss carryforward		28,030		28,965
Prepaid supplies		7,476		7,273
Termination payments		71,918		70,637
Gain on intercompany transfer		—		6,793
Other deferred tax assets		11,010		3,449
Total gross deferred tax assets	$	248,808	$	247,636

Deferred Tax Liabilities:
Amortization of trademarks	$	(31,445)	$	(21,657)
Intangibles		(82,544)		(84,867)
State franchise tax - deferred		(7,093)		(7,617)
Other deferred tax liabilities		(99)		(62)
Depreciation		(5,123)		(8,260)
Total gross deferred tax liabilities		(126,304)		(122,463)

Valuation Allowance		(36,816)		(32,840)

Net deferred tax assets	$	85,688	$	92,333

During the years ended December 31, 2018, 2017 and 2016, the Company established full valuation allowances against certain deferred tax assets, resulting from cumulative net operating losses incurred by certain foreign subsidiaries of the Company. The effect of the valuation allowances and the subsequent related impact on the Company’s overall tax rate was to increase the Company’s provision for income taxes by $4.0 million, $6.8 million and $8.9 million for the years ended December 31, 2018, 2017 and 2016, respectively. At December 31, 2018, the Company had net operating loss carryforwards of approximately $102.6 million. Of this amount, $74.7 million may be carried forward indefinitely. The remaining $27.9 million of net operating loss carryforwards will begin to expire in 2019.

The following is a roll-forward of the Company’s total gross unrecognized tax benefits, not including interest and penalties, for the years ended December 31, 2018, 2017 and 2016:


	Gross Unrealized Tax
	Benefits
Balance at January 1, 2016	$	471
Additions for tax positions related to the current year		—
Additions for tax positions related to the prior year		—
Decreases for tax positions related to prior years		(462)
Balance at December 31, 2016	$	9
Additions for tax positions related to the current year		—
Additions for tax positions related to the prior year		6,540
Decreases for tax positions related to prior years		(9)
Balance at December 31, 2017	$	6,540
Additions for tax positions related to the current year		—
Additions for tax positions related to the prior year		1,159
Decreases for tax positions related to prior years		(2,664)
Balance at December 31, 2018	$	5,035

The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Company’s consolidated financial statements. As of December 31, 2018, the Company had accrued approximately $0.9 million in interest and penalties related to unrecognized tax benefits. If the Company were to prevail on all uncertain tax positions it would not have a significant impact on the Company’s effective tax rate.

It is expected that the amount of unrecognized tax benefit change within the next 12 months will not be significant.

The Company is subject to U.S. federal income tax as well as to income tax in multiple state and foreign jurisdictions.

On October 18, 2016, the IRS began its examination of the Company’s U.S. federal income tax return for the year ended December 31, 2014. On March 27, 2017, the IRS began its examination of the Company’s U.S. federal income tax return for the year ended December 31, 2015.

The Company is in various stages of examination with certain states and certain foreign jurisdictions. The Company’s 2014 through 2017 U.S. federal income tax returns are subject to examination by the IRS. The Company’s state income tax returns are subject to examination for the 2013 through 2017 tax years.

EARNINGS PER SHARE

12 Months Ended

Dec. 31, 2018

EARNINGS PER SHARE

EARNINGS PER SHARE

16. EARNINGS PER SHARE

A reconciliation of the weighted average shares used in the basic and diluted earnings per common share computations for the years ended December 31, 2018, 2017 and 2016 is presented below (in thousands):


	2018	2017	2016
Weighted-average shares outstanding:
Basic	557,166	566,782	587,874
Dilutive securities	7,088	10,359	11,945
Diluted	564,254	577,141	599,819

For the years ended December 31, 2018, 2017 and 2016, options and awards outstanding totaling 3.2 million shares, 7.9 million shares and 5.7 million shares, respectively, were excluded from the calculations as their effect would have been antidilutive.

EMPLOYEE BENEFIT PLAN	12 Months Ended
EMPLOYEE BENEFIT PLAN	Dec. 31, 2018
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN	17. EMPLOYEE BENEFIT PLAN Employees of the Company may participate in the Monster Beverage Corporation 401(k) Plan, a defined contribution plan, which qualifies under Section 401(k) of the Internal Revenue Code. Participating employees may contribute up to 15% of their pretax salary up to statutory limits. The Company contributes 50% of the employee contribution, up to 6% of each employee’s earnings, which vest 25% each year for four years after the first anniversary date. Matching contributions were $2.9 million, $2.5 million and $2.0 million for the years ended December 31, 2018, 2017 and 2016, respectively.

SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2018

SEGMENT INFORMATION

SEGMENT INFORMATION

18. SEGMENT INFORMATION

The Company has three operating and reportable segments, (i) Monster Energy® Drinks segment, which is primarily comprised of the Company’s Monster Energy® drinks, (ii) Strategic Brands segment, which is primarily comprised of the various energy drink brands acquired from TCCC in 2015 as well as the Company’s Predator® energy drinks, and (iii) Other segment, which is comprised of certain products sold by AFF, a wholly-owned subsidiary of the Company, to independent third-party customers.

The Company’s Monster Energy® Drinks segment generates net operating revenues by selling ready-to-drink packaged drinks primarily to bottlers and full service beverage distributors. In some cases, the Company sells directly to retail grocery and specialty chains, wholesalers, club stores, drug stores, mass merchandisers, convenience chains, foodservice customers and the military.

The Company’s Strategic Brands segment primarily generates net operating revenues by selling “concentrates” and/or “beverage bases” to authorized bottling and canning operations. Such bottlers generally combine the concentrates and/or beverage bases with sweeteners, water and other ingredients to produce ready-to-drink packaged energy drinks. The ready-to-drink packaged energy drinks are then sold to other bottlers, full service distributors or retailers, including, retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice customers, drug stores and the military. To a lesser extent, the Company’s Strategic Brands segment generates net operating revenues by selling ready-to-drink packaged energy drinks to bottlers and full service beverage distributors.

Generally, the Monster Energy® Drinks segment generates higher per case net operating revenues, but lower per case gross profit margins than the Strategic Brands segment.

Corporate and unallocated amounts that do not relate to a reportable segment have been allocated to “Corporate and unallocated.” No asset information, other than goodwill and other intangible assets, has been provided for in the Company’s reportable segments as management does not measure or allocate such assets on a segment basis.

The net revenues derived from the Company’s reportable segments and other financial information related thereto for the years ended December 31, 2018, 2017 and 2016 are as follows:


	2018		2017		2016
Net sales:
Monster Energy® Drinks(1)	$	3,498,427	$	3,047,596	$	2,759,862
Strategic Brands		285,836		299,844		272,520
Other		22,920		21,605		17,011
Corporate and unallocated		—		—		—
	$	3,807,183	$	3,369,045	$	3,049,393


	2018		2017		2016
Operating Income:
Monster Energy® Drinks(1) (2)	$	1,371,062	$	1,264,579	$	1,148,427
Strategic Brands		176,520		174,458		163,121
Other		5,362		5,583		2,295
Corporate and unallocated		(269,325)		(245,833)		(228,505)
	$	1,283,619	$	1,198,787	$	1,085,338


	2018		2017		2016
Income before tax:
Monster Energy® Drinks(1) (2)	$	1,372,001	$	1,264,555	$	1,148,640
Strategic Brands		176,540		174,442		163,084
Other		5,362		5,583		2,295
Corporate and unallocated		(260,631)		(242,957)		(234,334)
	$	1,293,272	$	1,201,623	$	1,079,685

(1)

Includes $44.3 million, $43.4 million and $40.3 million for the years ended December 31, 2018, 2017 and 2016, respectively, related to the recognition of deferred revenue.

(2)

Includes $26.6 million, $35.4 million and $79.8 million for the years ended December 31, 2018, 2017 and 2016, respectively, related to distributor termination costs.


	2018		2017		2016
Depreciation and amortization:
Monster Energy® Drinks	$	36,387	$	29,591	$	24,048
Stategic Brands		7,774		7,443		7,113
Other		4,657		4,608		3,457
Corporate and unallocated		8,161		7,245		6,227
	$	56,979	$	48,887	$	40,845

Corporate and unallocated expenses were $269.3 million for the year ended December 31, 2018 and included $174.9 million of payroll costs, of which $57.1 million was attributable to stock-based compensation expense (See Note 14, "Stock-Based Compensation"), $53.6 million of professional service expenses, including accounting and legal costs, $6.0 million of insurance costs and $34.8 million of other operating expenses.

Corporate and unallocated expenses were $245.8 million for the year ended December 31, 2017 and included $156.3 million of payroll costs, of which $52.3 million was attributable to stock-based compensation expense (See Note 14, “Stock-Based Compensation”), $51.8 million of professional service expenses, including accounting and legal costs, $6.0 million of insurance costs and $31.7 million of other operating expenses.

Corporate and unallocated expenses were $228.5 million for the year ended December 31, 2016 and included $128.0 million of payroll costs, of which $45.8 million was attributable to stock-based compensation expense (See Note 14, “Stock-Based Compensation”), $66.3 million of professional service expenses, including accounting and legal costs, $6.0 million of insurance costs and $28.2 million of other operating expenses.

TCCC, through the TCCC Subsidiaries, accounted for approximately 3%, 18% and 41% of the Company's net sales for the years ended December 31, 2018, 2017 and 2016, respectively. As part of the North America Refranchising, the territories of certain TCCC Subsidiaries have been transitioned to certain independent/non wholly-owned TCCC bottlers/distributors. Accordingly, the Company's percentage of net sales classified as sales to the TCCC Subsidiaries decreased for the years ended December 31, 2018 and 2017.

CCBCC Operations, LLC accounted for approximately 13%, 13% and 9% of the Company’s net sales for the years ended December 31, 2018, 2017 and 2016, respectively.

Reyes Coca-Cola Bottling accounted for approximately 12%, 6% and 2% of the Company’s net sales for the years ended December 31, 2018, 2017 and 2016, respectively.

Coca-Cola European Partners accounted for approximately 10%, 9% and 9% of the Company’s net sales for the years ended December 31, 2018, 2017 and 2016, respectively.

Net sales to customers outside the United States amounted to $1.09 billion, $909.3 million and $733.7 million for the years ended December 31, 2018, 2017 and 2016, respectively. Such sales were approximately 29%, 27% and 24% of net sales for the years ended December 31, 2018, 2017 and 2016, respectively.

Goodwill and other intangible assets for the Company’s reportable segments as of December 31, 2018 and 2017 are as follows:


	2018		2017
Goodwill and other intangible assets:
Monster Energy® Drinks	$	1,368,620	$	1,346,648
Strategic Brands		989,944		995,582
Other		18,957		23,498
Corporate and unallocated		—		—
	$	2,377,521	$	2,365,728

RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2018

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

19. RELATED PARTY TRANSACTIONS

TCCC controls approximately 19% of the voting interests of the Company. The TCCC Subsidiaries, the TCCC Related Parties and the TCCC Independent Bottlers, purchase and distribute certain of the Company’s products in certain domestic and international markets. The Company also pays TCCC a commission based on certain sales within the TCCC distribution network.

TCCC commissions, based on sales to the TCCC Subsidiaries and the TCCC Related Parties, for the year ended December 31, 2018 were $48.0 million, and are included as a reduction to net sales. TCCC commissions, based on sales to the TCCC Independent Bottlers for the year ended December 31, 2018 were $14.8 million, and are included in operating expenses.

TCCC commissions, based on sales to the TCCC Subsidiaries, for the year ended December 31, 2017 were $9.8 million, and are included as a reduction to net sales. TCCC commissions, based on sales to the TCCC Related Parties and the TCCC Independent Bottlers, for the year ended December 31, 2017 were $45.0 million, and are included in operating expenses.

Upon adoption of ASC 606, commissions paid to TCCC, based on sales to the TCCC Related Parties, are included as a reduction to net sales. Prior to January 1, 2018, such commissions, based on sales to the TCCC Related Parties, were included in operating expenses.

Net sales to the TCCC Subsidiaries for the years ended December 31, 2018 and 2017 were $132.5 million and $594.1 million, respectively. As part of the North America Refranchising, the territories of certain TCCC Subsidiaries have been transitioned to certain independent TCCC bottlers/distributors and/or TCCC Related Parties. Accordingly, the Company’s net sales classified as sales to the TCCC Subsidiaries significantly decreased for the year ended December 31, 2018.

The Company also purchases concentrates from TCCC which are then sold to certain of the Company's bottlers/distributors. Concentrate purchases from TCCC were $27.5 million, $26.2 million and $26.2 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Certain TCCC Subsidiaries also contract manufacture certain of the Company’s Monster Energy® brand energy drinks. Such contract manufacturing expenses were $22.8 million, $11.8 million and $9.6 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Accounts receivable, accounts payable and accrued promotional allowances related to the TCCC Subsidiaries are as follows at:


	December 31,		December 31,
	2018		2017
Accounts receivable, net	$	25,312	$	32,607
Accounts payable	$	(54,430)	$	(45,465)
Accrued promotional allowances	$	(4,044)	$	(5,884)

Two directors and officers of the Company and their families are principal owners of a company that provides promotional materials to the Company. Expenses incurred with such company in connection with promotional materials purchased during the years ended December 31, 2018, 2017 and 2016 were $1.8 million, $2.2 million and $1.5 million, respectively.

In December 2018, the Company and a director of the Company entered into a 50-50 partnership that purchased land in Kona, Hawaii for the purpose producing coffee products. The Company’s $1.9 million 50% contribution is accounted for as an equity investment and is included in other long-term assets in the accompanying consolidated balance sheet at December 31, 2018.

SUBSEQUENT EVENTS	12 Months Ended
SUBSEQUENT EVENTS	Dec. 31, 2018
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	20. SUBSEQUENT EVENTS On February 26, 2019, the Company’s Board of Directors authorized a new share repurchase program for the purchase of up to $500.0 million of the Company’s outstanding common stock. As of February 26, 2019 $20.6 million remained available for grant under the August 2018 Repurchase Plan. The aggregate amount available to repurchase the Company’s common stock is currently $520.6 million.

QUARTERLY FINANCIAL DATA (Unaudited)

12 Months Ended

Dec. 31, 2018

QUARTERLY FINANCIAL DATA (Unaudited)

QUARTERLY FINANCIAL DATA (Unaudited)

21. QUARTERLY FINANCIAL DATA (Unaudited)


							Net Income per Common
							Share
	Net Sales		Gross Profit		Net Income		Basic		Diluted
Quarter ended:
March 31, 2018	$	850,921	$	515,257	$	216,050	$	0.38	$	0.38
June 30, 2018		1,015,873		620,258		270,116	$	0.48	$	0.48
September 30, 2018		1,016,160		607,659		267,733	$	0.48	$	0.48
December 31, 2018		924,229		552,201		239,105	$	0.43	$	0.43
	$	3,807,183	$	2,295,375	$	993,004
Quarter ended:
March 31, 2017	$	742,146	$	480,874	$	177,980	$	0.31	$	0.31
June 30, 2017		907,068		583,497		222,633	$	0.39	$	0.39
September 30, 2017		909,476		569,709		218,744	$	0.39	$	0.38
December 31, 2017		810,355		503,610		201,321	$	0.36	$	0.35
	$	3,369,045	$	2,137,690	$	820,678

Certain of the figures reported above may differ from previously reported figures for individual quarters due to rounding.

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

12 Months Ended

Dec. 31, 2018

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS


	Balance at		Charged to				Balance at
	beginning		cost and				end of
Description	of period		expenses		Deductions		period
Allowance for doubtful accounts, sales returns and cash discounts:

2018	$	1,105	$	7,890	$	(7,406)	$	1,589
2017	$	1,121	$	8,364	$	(8,380)	$	1,105
2016	$	1,248	$	7,389	$	(7,516)	$	1,121

Allowance on Deferred Tax Assets and Unrecognized Tax Benefits:

2018	$	40,680	$	2,068	$	—	$	42,748
2017	$	26,086	$	14,594	$	—	$	40,680
2016	$	17,846	$	8,240	$	—	$	26,086

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2018

ADDITIONS TO SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Principles of Consolidation

Business Combinations

Cash and Cash Equivalents

Investments

Accounts Receivable

Inventories

Inventories – Inventories are valued at the lower of first-in, first-out, cost or market value (net realizable value).

Property and Equipment

Goodwill

Other Intangibles

Long-Lived Assets

Foreign Currency Translation and Transactions

Revenue Recognition

The Company excludes from revenues all taxes assessed by a governmental authority that are imposed on the sale of its products and collected from customers.

Distribution expenses to transport the Company’s products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses.

discounts granted off list prices to support price promotions to end-consumers by retailers;

the Company’s agreed share of fees given to bottlers/distributors and/or directly to retailers for advertising, in-store marketing and promotional activities;

the Company’s agreed share of slotting, shelf space allowances and other fees given directly to retailers;

incentives given to the Company’s bottlers/distributors and/or retailers for achieving or exceeding certain predetermined sales goals;

discounted or free products;

commissions paid to TCCC based on the Company’s sales to the TCCC Subsidiaries and/or the TCCC Related Parties.

Management believes that adequate provision has been made for cash discounts, returns and spoilage based on the Company’s historical experience.

Cost of Sales

Operating Expenses

Freight-Out Costs

Advertising and Promotional Expenses

Income Taxes

Stock-Based Compensation

Net Income Per Common Share

Concentration of Risk

CCBCC Operations, LLC accounted for approximately 13%, 13% and 9% of the Company’s net sales for the years ended December 31, 2018, 2017 and 2016, respectively.

Reyes Coca-Cola Bottling accounted for approximately 12%, 6% and 2% of the Company’s net sales for the years ended December 31, 2018, 2017 and 2016, respectively.

Coca-Cola European Partners accounted for approximately 10%, 9% and 9% of the Company’s net sales for the years ended December 31, 2018, 2017 and 2016, respectively.

Credit Risk

Fair Value of Financial Instruments

Use of Estimates

Recent Accounting Pronouncements

Recently issued accounting pronouncements not yet adopted

Recently adopted accounting pronouncements

REVENUE RECOGNITION (Tables)

12 Months Ended

Dec. 31, 2018

Schedule of disaggregation of revenue by geographical markets


	Year Ended December 31, 2018
							Latin
							America
	U.S. and						and
Net Sales	Canada		EMEA2		Asia Pacific		Caribbean		Total
Monster Energy® Drinks	$	2,627,000	$	500,826	$	225,172	$	145,429	$	3,498,427
Strategic Brands		179,677		77,841		26,254		2,064		285,836
Other		22,920		—		—		—		22,920
Total Net Sales	$	2,829,597	$	578,667	$	251,426	$	147,493	$	3,807,183

2Europe, Middle East and Africa (“EMEA”)

Accounting Standards Update 2014-09

Schedule of impact of adoption of ASC 606


	Year Ended December 31, 2018
					Decrease due to
			Without Adoption		Adoption of ASC
	As Reported		of ASC 606		606
Net Sales	$	3,807,183	$	3,849,424	$	(42,241)	1
Operating Expenses	$	1,011,756	$	1,053,997	$	(42,241)	1

1 TCCC commissions based on sales to the TCCC Related Parties. There were no other identified changes to our revenue recognition policies as a result of the adoption of ASC 606.

INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2018

INVESTMENTS

Summary of investments in available-for-sale


									Continuous		Continuous
			Gross		Gross				Unrealized		Unrealized
			Unrealized		Unrealized				Loss Position		Loss Position
	Amortized		Holding		Holding		Fair		less than 12		greater than 12
December 31, 2018	Cost		Gains		Losses		Value		Months		Months
Available-for-sale
Short-term:
Commercial paper	$	52,838	$	—	$	—	$	52,838	$	—	$	—
Certificates of deposit		14,075		—		—		14,075		—		—
Municipal securities		151,690		16		62		151,644		62		—
U.S. government agency securities		19,943		—		12		19,931		12		—
U.S. treasuries		78,189		—		32		78,157		32		—
Variable rate demand notes		4,005		—		—		4,005		—		—
Total	$	320,740	$	16	$	106	$	320,650	$	106	$	—


									Continuous		Continuous
			Gross		Gross				Unrealized		Unrealized
			Unrealized		Unrealized				Loss Position		Loss Position
	Amortized		Holding		Holding		Fair		less than 12		greater than 12
December 31, 2017	Cost		Gains		Losses		Value		Months		Months
Available-for-sale
Short-term:
Commercial paper	$	81,026	$	—	$	—	$	81,026	$	—	$	—
Certificates of deposit		11,869		—		—		11,869		—		—
Municipal securities		469,604		1		740		468,865		740		—
U.S. government agency securities		61,307		—		88		61,219		88		—
Variable rate demand notes		49,954		—		—		49,954		—		—
Long-term:
U.S. government agency securities		2,369		—		3		2,366		3		—
Total	$	676,129	$	1	$	831	$	675,299	$	831	$	—

Summary of the underlying contractual maturities of investments


	December 31, 2018				December 31, 2017
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Less than 1 year:
Commercial paper	$	52,838	$	52,838	$	81,026	$	81,026
Municipal securities		151,690		151,644		469,604		468,865
U.S. government agency securities		19,943		19,931		61,307		61,219
Certificates of deposit		14,075		14,075		11,869		11,869
U.S. treasuries		78,189		78,157		—		—
Due 1 - 10 years:
U.S. government agency securities		—		—		2,369		2,366
Variable rate demand notes		—		—		6,366		6,366
Due 11 - 20 years:
Variable rate demand notes		—		—		28,377		28,377
Due 21 - 30 years:
Variable rate demand notes		4,005		4,005		15,211		15,211
Total	$	320,740	$	320,650	$	676,129	$	675,299

FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES (Tables)

12 Months Ended

Dec. 31, 2018

FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES

Schedule of financial assets and liabilities recorded at fair value on a recurring basis


December 31, 2018	Level 1		Level 2		Level 3		Total
Cash	$	393,936	$	—	$	—	$	393,936
Money market funds		191,358		—		—		191,358
Certificates of deposit		—		14,075		—		14,075
Commercial paper		—		60,422		—		60,422
Variable rate demand notes		—		4,005		—		4,005
Municipal securities		—		177,118		—		177,118
U.S. government agency securities		—		39,092		—		39,092
U.S. treasuries		—		78,157		—		78,157
Foreign currency derivatives		—		(492)		—		(492)
Total	$	585,294	$	372,377	$	—	$	957,671

Amounts included in:
Cash and cash equivalents	$	585,294	$	52,219	$	—	$	637,513
Short-term investments		—		320,650		—		320,650
Accounts receivable, net		—		43		—		43
Investments		—		—		—		—
Accrued liabilities		—		(535)		—		(535)
Total	$	585,294	$	372,377	$	—	$	957,671


December 31, 2017	Level 1		Level 2		Level 3		Total
Cash	$	310,885	$	—	$	—	$	310,885
Money market funds		112,848		—		—		112,848
Certificates of deposit		—		15,720		—		15,720
Commercial paper		—		99,903		—		99,903
Variable rate demand notes		—		49,954		—		49,954
Municipal securities		—		529,984		—		529,984
U.S. government agency securities		—		81,230		—		81,230
U.S. treasuries		—		3,397		—		3,397
Foreign currency derivatives		—		(1,484)		—		(1,484)
Total	$	423,733	$	778,704	$	—	$	1,202,437

Amounts included in:
Cash and cash equivalents	$	423,733	$	104,889	$	—	$	528,622
Short-term investments		—		672,933		—		672,933
Accounts receivable, net		—		95		—		95
Investments		—		2,366		—		2,366
Accrued liabilities		—		(1,579)		—		(1,579)
Total	$	423,733	$	778,704	$	—	$	1,202,437

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2018

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Schedule of notional amount and fair value of all outstanding foreign currency derivative instruments in the consolidated balance sheets


December 31, 2018
Derivatives not designated as
hedging instruments under	Notional		Fair
FASB ASC 815-20	Amount		Value		Balance Sheet Location
Assets:
Foreign currency exchange contracts:
Receive SGD/pay USD	$	8,341	$	30	Accounts receivable, net
Receive NOK/pay USD		902		13	Accounts receivable, net

Liabilities:
Foreign currency exchange contracts:
Receive USD/pay GBP	$	40,648	$	(323)	Accrued liabilities
Receive USD/pay AUD		15,124		(105)	Accrued liabilities
Receive USD/pay ZAR		8,618		(68)	Accrued liabilities
Receive USD/pay COP		2,931		(33)	Accrued liabilities
Receive USD/pay NZD		2,952		(4)	Accrued liabilities
Receive USD/pay EUR		6,894		(2)	Accrued liabilities


December 31, 2017
Derivatives not designated as
hedging instruments under	Notional		Fair
FASB ASC 815-20	Amount		Value		Balance Sheet Location
Assets:
Foreign currency exchange contracts:
Receive CAD/pay USD	$	4,892	$	61	Accounts receivable, net
Receive SGD/pay USD		223		2	Accounts receivable, net
Receive NOK/pay USD		1,534		18	Accounts receivable, net
Receive USD/pay BRL		1,806		1	Accounts receivable, net
Receive USD/pay COP		2,803		13	Accounts receivable, net

Liabilities:
Foreign currency exchange contracts:
Receive USD/pay GBP	$	31,342	$	(334)	Accrued liabilities
Receive USD/pay EUR		65,131		(642)	Accrued liabilities
Receive USD/pay AUD		17,238		(177)	Accrued liabilities
Receive USD/pay ZAR		21,311		(222)	Accrued liabilities
Receive USD/pay MXN		7,720		(126)	Accrued liabilities
Receive USD/pay NZD		1,826		(18)	Accrued liabilities
Receive USD/pay TRY		5,483		(52)	Accrued liabilities
Receive USD/pay CLP		1,112		(8)	Accrued liabilities

Schedule of net gain (loss) on derivative instruments in the consolidated statements of income


		Amount of gain (loss)
		recognized in income on
		derivatives
Derivatives not designated as	Location of gain (loss)	Year ended
hedging instruments under	recognized in income on	December 31,		December 31,		December 31,
FASB ASC 815-20	derivatives	2018		2017		2016
Foreign currency exchange contracts	Other income (expense), net	$	9,737	$	(13,733)	$	1,819

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2018

INVENTORIES

Schedule of inventories


	2018		2017
Raw materials	$	94,421	$	78,834
Finished goods		183,284		176,911
	$	277,705	$	255,745

PROPERTY AND EQUIPMENT, Net (Tables)

12 Months Ended

Dec. 31, 2018

PROPERTY AND EQUIPMENT, Net

Schedule of property and equipment


	2018		2017
Land	$	44,261	$	47,373
Leasehold improvements		5,909		3,109
Furniture and fixtures		6,932		6,461
Office and computer equipment		18,717		14,506
Computer software		3,278		3,650
Equipment		183,727		148,434
Building		115,242		107,374
Vehicles		39,026		38,179
		417,092		369,086
Less: accumulated depreciation and amortization		(174,041)		(138,810)
	$	243,051	$	230,276

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2018

GOODWILL AND OTHER INTANGIBLE ASSETS

Schedule of goodwill


	Monster
	Energy®		Strategic
	Drinks		Brands		Other		Total
Balance at December 31, 2017	$	693,644	$	637,999	$	—	$	1,331,643
Acquisitions		—		—		—		—
Balance at December 31, 2018	$	693,644	$	637,999	$	—	$	1,331,643


	Monster
	Energy®		Strategic
	Drinks		Brands		Other		Total
Balance at December 31, 2016	$	693,644	$	637,999	$	—	$	1,331,643
Acquisitions		—		—		—		—
Balance at December 31, 2017	$	693,644	$	637,999	$	—	$	1,331,643

Schedule of intangible assets


	December 31,		December 31,
	2018		2017
Amortizing intangibles	$	71,350	$	71,400
Accumulated amortization		(38,311)		(26,383)
		33,039		45,017
Non-amortizing intangibles		1,012,839		989,068
	$	1,045,878	$	1,034,085

Schedule of future estimated amortization expense related to amortizing intangibles

The following is the future estimated amortization expense related to amortizing intangibles as of December 31, 2018:


Year Ending December 31:
2019	$	11,847
2020		7,965
2021		4,722
2022		4,697
2023		1,404
2024 and thereafter		2,404
	$	33,039

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2018

COMMITMENTS AND CONTINGENCIES

Schedule of future minimum rental payments under the operating leases

Future minimum rental payments at December 31, 2018 under the operating leases referred to above are as follows:


Year Ending December 31:
2019	$	3,954
2020		2,949
2021		2,410
2022		2,114
2023		1,681
2024 and thereafter		14,860
	$	27,968

Schedule of contractual obligations related primarily to sponsorships and other commitments

The Company has the following contractual obligations related primarily to sponsorships and other commitments as of December 31, 2018:


Year Ending December 31:
2019	$	99,004
2020		51,572
2021		23,577
2022		12,628
2023		3,405
2024 and thereafter		—
	$	190,186

ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

12 Months Ended

Dec. 31, 2018

ACCUMULATED OTHER COMPREHENSIVE LOSS

Schedule of components of accumulated other comprehensive loss


	2018		2017
Accumulated net unrealized loss on available-for-sale securities	$	89	$	841
Foreign currency translation adjustments, net of tax		32,775		15,818
Total accumulated other comprehensive loss	$	32,864	$	16,659

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2018

STOCK-BASED COMPENSATION

Schedule of weighted-average assumptions used to estimate the fair value of options granted


	2018		2017		2016
Dividend yield	0.0	%	0.0	%	0.0	%
Expected volatility	34.7	%	36.5	%	36.2	%
Risk-free interest rate	2.81	%	2.11	%	1.57	%
Expected term	6.0 Years		6.1 Years		6.3 Years

Summary of activities with respect to its stock option plans


				Weighted-
		Weighted-		Average
		Average		Remaining
	Number of	Exercise		Contractual	Aggregate
	Shares (In	Price Per		Term (In	Intrinsic
Options	thousands)	Share		years)	Value
Outstanding at January 1, 2018	17,819	$	29.62	6.1	$	600,032
Granted 01/01/18 - 03/31/18	2,615	$	58.76
Granted 04/01/18 - 06/30/18	360	$	51.72
Granted 07/01/18 - 09/30/18	11	$	58.77
Granted 10/01/18 - 12/31/18	194	$	55.91
Exercised	(1,450)	$	19.20
Cancelled or forfeited	(659)	$	45.22
Outstanding at December 31, 2018	18,890	$	34.61	5.8	$	303,627
Vested and expected to vest in the future at December 31, 2018	18,052	$	33.83	5.7	$	301,723
Exercisable at December 31, 2018	10,432	$	23.10	4.1	$	272,636

Summary of information about stock options outstanding and exercisable


					Options Outstanding				Options Exercisable
						Weighted
						Average	Weighted		Number	Weighted
					Number	Remaining	Average		Exercisable	Average
Range of Exercise					Outstanding	Contractual	Exercise		(In	Exercise
Prices ($)					(In Thousands)	Term (Years)	Price ($)		Thousands)	Price ($)
$	5.94	-	$	5.94	3,086	0.9	$	5.94	3,086	$	5.94
$	6.02	-	$	17.99	2,109	4.0	$	16.13	2,109	$	16.13
$	18.64	-	$	23.68	2,227	5.0	$	22.77	1,970	$	22.71
$	36.05	-	$	43.64	1,932	7.2	$	41.59	683	$	40.41
$	43.99	-	$	43.99	2,325	7.2	$	43.99	856	$	43.99
$	44.73	-	$	45.01	623	7.1	$	44.94	225	$	44.94
$	45.16	-	$	45.16	1,998	6.1	$	45.16	1,183	$	45.16
$	45.55	-	$	55.20	1,899	8.4	$	48.24	313	$	46.81
$	56.08	-	$	57.36	81	9.6	$	57.16	1	$	56.08
$	58.73	-	$	67.93	2,610	9.1	$	58.89	6	$	62.92
					18,890	5.8	$	34.61	10,432	$	23.10

Summary of activities with respect to non-vested restricted stock units


		Weighted
	Number of	Average
	Shares (in	Grant-Date
	thousands)	Fair Value
Non-vested at January 1, 2018	530	$	45.09
Granted 01/01/18 - 03/31/18	221	$	58.75
Granted 04/01/18 - 06/30/18	48	$	52.31
Granted 07/01/18 - 09/30/18	1	$	58.72
Granted 10/01/18 - 12/31/18	1	$	56.19
Vested	(265)	$	45.26
Forfeited/cancelled	(7)	$	33.60
Non-vested at December 31, 2018	529	$	51.55

Schedule of employee and non-employee share-based compensation expense


	2018		2017		2016
Operating expenses	$	57,111	$	52,282	$	45,848
Total employee and non-employee share-based compensation expense included in income, before income tax		57,111		52,282		45,848
Less: Amount of income tax benefit recognized in earnings		(14,892)		(100,635)		(34,909)
Amount charged against net income	$	42,219	$	(48,353)	$	10,939

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

INCOME TAXES

Schedule of domestic and foreign components of the income before provision for income taxes


	Year Ended December 31,
	2018		2017		2016
Domestic*	$	1,100,487	$	1,062,713	$	1,029,763
Foreign*		192,785		138,910		49,922
Income before provision for income taxes	$	1,293,272	$	1,201,623	$	1,079,685

Components of the provision for income taxes


	Year Ended December 31,
	2018		2017		2016
Current:
Federal	$	209,147	$	243,127	$	212,283
State		41,934		43,252		35,756
Foreign		42,541		27,522		17,171
		293,622		313,901		265,210

Deferred:
Federal		9,804		61,797		87,360
State		1,644		3,062		15,254
Foreign		(8,778)		(4,579)		(9,709)
		2,670		60,280		92,905

Valuation allowance		3,976		6,764		8,885
	$	300,268	$	380,945	$	367,000

Schedule of reconciliation of income taxes computed at statutory federal rate to total income taxes


	Year Ended December 31,
	2018		2017		2016
U.S. Federal tax expense at statutory rates	$	271,587	$	420,568	$	377,599
State income taxes, net of federal tax benefit		36,312		27,569		33,148
Permanent differences		3,606		10,356		954
Stock based compensation		(370)		(79,687)		(13,654)
Domestic production deduction		—		(22,229)		(21,447)
Deferred tax asset reduction (Tax Reform Act)		—		39,763		—
Other		(8,438)		3,736		(8,765)
Foreign rate differential		(6,405)		(25,895)		(9,720)
Valuation allowance		3,976		6,764		8,885
	$	300,268	$	380,945	$	367,000

Components of the deferred tax assets (liabilities)


	2018		2017
Deferred Tax Assets:
Reserve for sales returns	$	137	$	159
Reserve for inventory obsolescence		2,836		522
Reserve for marketing development fund		4,666		6,360
Capitalization of inventory costs		1,210		1,598
State franchise tax - current		2,663		2,050
Accrued compensation		574		1,473
Accrued other liabilities		5,276		3,917
Deferred revenue		87,573		93,321
Stock-based compensation		25,439		21,119
Foreign net operating loss carryforward		28,030		28,965
Prepaid supplies		7,476		7,273
Termination payments		71,918		70,637
Gain on intercompany transfer		—		6,793
Other deferred tax assets		11,010		3,449
Total gross deferred tax assets	$	248,808	$	247,636

Deferred Tax Liabilities:
Amortization of trademarks	$	(31,445)	$	(21,657)
Intangibles		(82,544)		(84,867)
State franchise tax - deferred		(7,093)		(7,617)
Other deferred tax liabilities		(99)		(62)
Depreciation		(5,123)		(8,260)
Total gross deferred tax liabilities		(126,304)		(122,463)

Valuation Allowance		(36,816)		(32,840)

Net deferred tax assets	$	85,688	$	92,333

Schedule of roll-forward of the total gross unrecognized tax benefits, not including interest and penalties


	Gross Unrealized Tax
	Benefits
Balance at January 1, 2016	$	471
Additions for tax positions related to the current year		—
Additions for tax positions related to the prior year		—
Decreases for tax positions related to prior years		(462)
Balance at December 31, 2016	$	9
Additions for tax positions related to the current year		—
Additions for tax positions related to the prior year		6,540
Decreases for tax positions related to prior years		(9)
Balance at December 31, 2017	$	6,540
Additions for tax positions related to the current year		—
Additions for tax positions related to the prior year		1,159
Decreases for tax positions related to prior years		(2,664)
Balance at December 31, 2018	$	5,035

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2018

EARNINGS PER SHARE

Schedule of reconciliation of the weighted average shares used in the basic and diluted earnings per common share computations


	2018	2017	2016
Weighted-average shares outstanding:
Basic	557,166	566,782	587,874
Dilutive securities	7,088	10,359	11,945
Diluted	564,254	577,141	599,819

SEGMENT INFORMATION (Tables)

12 Months Ended

Dec. 31, 2018

SEGMENT INFORMATION

Schedule of net revenues and other financial information by segment


	2018		2017		2016
Net sales:
Monster Energy® Drinks(1)	$	3,498,427	$	3,047,596	$	2,759,862
Strategic Brands		285,836		299,844		272,520
Other		22,920		21,605		17,011
Corporate and unallocated		—		—		—
	$	3,807,183	$	3,369,045	$	3,049,393


	2018		2017		2016
Operating Income:
Monster Energy® Drinks(1) (2)	$	1,371,062	$	1,264,579	$	1,148,427
Strategic Brands		176,520		174,458		163,121
Other		5,362		5,583		2,295
Corporate and unallocated		(269,325)		(245,833)		(228,505)
	$	1,283,619	$	1,198,787	$	1,085,338


	2018		2017		2016
Income before tax:
Monster Energy® Drinks(1) (2)	$	1,372,001	$	1,264,555	$	1,148,640
Strategic Brands		176,540		174,442		163,084
Other		5,362		5,583		2,295
Corporate and unallocated		(260,631)		(242,957)		(234,334)
	$	1,293,272	$	1,201,623	$	1,079,685

(1)

Includes $44.3 million, $43.4 million and $40.3 million for the years ended December 31, 2018, 2017 and 2016, respectively, related to the recognition of deferred revenue.

(2)

Includes $26.6 million, $35.4 million and $79.8 million for the years ended December 31, 2018, 2017 and 2016, respectively, related to distributor termination costs.


	2018		2017		2016
Depreciation and amortization:
Monster Energy® Drinks	$	36,387	$	29,591	$	24,048
Stategic Brands		7,774		7,443		7,113
Other		4,657		4,608		3,457
Corporate and unallocated		8,161		7,245		6,227
	$	56,979	$	48,887	$	40,845

Schedule of goodwill and other intangible assets for the reportable segments


	2018		2017
Goodwill and other intangible assets:
Monster Energy® Drinks	$	1,368,620	$	1,346,648
Strategic Brands		989,944		995,582
Other		18,957		23,498
Corporate and unallocated		—		—
	$	2,377,521	$	2,365,728

RELATED PARTY TRANSACTIONS (Tables)

12 Months Ended

Dec. 31, 2018

RELATED PARTY TRANSACTIONS

Schedule of related party transactions


	December 31,		December 31,
	2018		2017
Accounts receivable, net	$	25,312	$	32,607
Accounts payable	$	(54,430)	$	(45,465)
Accrued promotional allowances	$	(4,044)	$	(5,884)

QUARTERLY FINANCIAL DATA (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2018

QUARTERLY FINANCIAL DATA (Unaudited)

QUARTERLY FINANCIAL DATA (Unaudited)


							Net Income per Common
							Share
	Net Sales		Gross Profit		Net Income		Basic		Diluted
Quarter ended:
March 31, 2018	$	850,921	$	515,257	$	216,050	$	0.38	$	0.38
June 30, 2018		1,015,873		620,258		270,116	$	0.48	$	0.48
September 30, 2018		1,016,160		607,659		267,733	$	0.48	$	0.48
December 31, 2018		924,229		552,201		239,105	$	0.43	$	0.43
	$	3,807,183	$	2,295,375	$	993,004
Quarter ended:
March 31, 2017	$	742,146	$	480,874	$	177,980	$	0.31	$	0.31
June 30, 2017		907,068		583,497		222,633	$	0.39	$	0.39
September 30, 2017		909,476		569,709		218,744	$	0.39	$	0.38
December 31, 2017		810,355		503,610		201,321	$	0.36	$	0.35
	$	3,369,045	$	2,137,690	$	820,678

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) - Property and Equipment	12 Months Ended
	Dec. 31, 2018
Minimum
Property and equipment, net
Estimated useful lives (in years)	3 years
Maximum
Property and equipment, net
Estimated useful lives (in years)	10 years

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies
Impairment of Goodwill	$ 0.0	$ 0.0	$ 0.0

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Other Intangibles (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies
Impairment of intangible assets	$ 0.0	$ 0.0	$ 0.0

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Foreign Currency Translation and Transactions (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies
Foreign currency transaction losses	$ (4.0)	$ (3.3)	$ (9.7)

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details)	12 Months Ended
	Dec. 31, 2018 segment
Accounting Policies
Number of operating segments	3
Number of reportable segments	3
Distribution agreement, revenue recognition period	20 years

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Freight-Out Costs (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies
Freight-out costs	$ 128.5	$ 91.9	$ 83.6

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising and Promotional Expenses (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies
Advertising and promotional expenses	$ 353.9	$ 324.0	$ 270.6

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentration of Risk (Details) - Customer concentration - Net Sales	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
TCCC
Concentration of risk
Percentage of net sales	3.00%	18.00%	41.00%
CCBCC Operations, LLC
Concentration of risk
Percentage of net sales	13.00%	13.00%	9.00%
Reyes Coca-Cola Bottling
Concentration of risk
Percentage of net sales	12.00%	6.00%	2.00%
Coca-Cola European Partners
Concentration of risk
Percentage of net sales	10.00%	9.00%	9.00%

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Deferred income tax	$ 2,670	$ 60,280	$ 92,905
Retained earnings	3,914,645	$ 2,928,226
ASU 2016-16 \| Adjustment
Deferred income tax	(6,600)
Retained earnings	$ 6,600

REVENUE RECOGNITION - Impact of adoption of ASC 606 (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
NET SALES	$ 924,229	$ 1,016,160	$ 1,015,873	$ 850,921	$ 810,355	$ 909,476	$ 907,068	$ 742,146	$ 3,807,183	$ 3,369,045	$ 3,049,393
Operating Expenses									1,011,756	$ 938,903	$ 856,662
Without 606 Adoption of ASC 606
NET SALES									3,849,424
Operating Expenses									1,053,997
Decrease due to Adoption of ASC606
NET SALES									(42,241)
Operating Expenses									$ (42,241)

REVENUE RECOGNITION - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Total Net Sales	$ 924,229	$ 1,016,160	$ 1,015,873	$ 850,921	$ 810,355	$ 909,476	$ 907,068	$ 742,146	$ 3,807,183	$ 3,369,045	$ 3,049,393
Contract Liabilities
Deferred revenue	$ 356,300				$ 377,600				356,300	377,600
Deferred revenue recognized in net sales									44,300	$ 43,400
U.S. And Canada
Total Net Sales									2,829,597
EMEA
Total Net Sales									578,667
Asia Pacific
Total Net Sales									251,426
Latin America And Caribbean
Total Net Sales									147,493
Monster Energy Drinks
Total Net Sales									3,498,427
Monster Energy Drinks \| U.S. And Canada
Total Net Sales									2,627,000
Monster Energy Drinks \| EMEA
Total Net Sales									500,826
Monster Energy Drinks \| Asia Pacific
Total Net Sales									225,172
Monster Energy Drinks \| Latin America And Caribbean
Total Net Sales									145,429
Strategic Brands
Total Net Sales									285,836
Strategic Brands \| U.S. And Canada
Total Net Sales									179,677
Strategic Brands \| EMEA
Total Net Sales									77,841
Strategic Brands \| Asia Pacific
Total Net Sales									26,254
Strategic Brands \| Latin America And Caribbean
Total Net Sales									2,064
Other
Total Net Sales									22,920
Other \| U.S. And Canada
Total Net Sales									$ 22,920

INVESTMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Available-for-sale
Amortized Cost	$ 320,740	$ 676,129
Gross Unrealized Holding Gains	16	1
Gross Unrealized Holding Losses	106	831
Fair Value	320,650	675,299
Continuous Unrealized Loss Position less than 12 Months	106	831
Short-term \| Commercial paper
Available-for-sale
Amortized Cost	52,838	81,026
Fair Value	52,838	81,026
Short-term \| Certificates of deposit
Available-for-sale
Amortized Cost	14,075	11,869
Fair Value	14,075	11,869
Short-term \| Municipal securities
Available-for-sale
Amortized Cost	151,690	469,604
Gross Unrealized Holding Gains	16	1
Gross Unrealized Holding Losses	62	740
Fair Value	151,644	468,865
Continuous Unrealized Loss Position less than 12 Months	62	740
Short-term \| U.S. government agency securities
Available-for-sale
Amortized Cost	19,943	61,307
Gross Unrealized Holding Losses	12	88
Fair Value	19,931	61,219
Continuous Unrealized Loss Position less than 12 Months	12	88
Short-term \| U.S. Treasuries
Available-for-sale
Amortized Cost	78,189
Gross Unrealized Holding Losses	32
Fair Value	78,157
Continuous Unrealized Loss Position less than 12 Months	32
Short-term \| Variable rate demand notes
Available-for-sale
Amortized Cost	4,005	49,954
Fair Value	$ 4,005	49,954
Long-term \| U.S. government agency securities
Available-for-sale
Amortized Cost		2,369
Gross Unrealized Holding Losses		3
Fair Value		2,366
Continuous Unrealized Loss Position less than 12 Months		$ 3

INVESTMENTS - Maturity Period (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Investments
Amortized Cost	$ 320,740	$ 676,129
Fair Value	320,650	675,299
Commercial paper \| Less than 1 year
Investments
Amortized Cost	52,838	81,026
Fair Value	52,838	81,026
Municipal securities \| Less than 1 year
Investments
Amortized Cost	151,690	469,604
Fair Value	151,644	468,865
U.S. government agency securities \| Less than 1 year
Investments
Amortized Cost	19,943	61,307
Fair Value	19,931	61,219
U.S. government agency securities \| Due 1 - 10 years
Investments
Amortized Cost		2,369
Fair Value		2,366
Certificates of deposit \| Less than 1 year
Investments
Amortized Cost	14,075	11,869
Fair Value	14,075	11,869
U.S. Treasuries \| Less than 1 year
Investments
Amortized Cost	78,189
Fair Value	78,157
Variable rate demand notes \| Due 1 - 10 years
Investments
Amortized Cost		6,366
Fair Value		6,366
Variable rate demand notes \| Due 11 - 20 years
Investments
Amortized Cost		28,377
Fair Value		28,377
Variable rate demand notes \| Due 21 - 30 years
Investments
Amortized Cost	4,005	15,211
Fair Value	$ 4,005	$ 15,211

FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES - Assets - Recurring Basis (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Fair value of certain financial assets and liabilities
Cash and cash equivalents	$ 637,513	$ 528,622	$ 377,582	$ 2,175,417
Short-term investments	320,650	672,933
Investments		2,366
Asset transfers between Level 1 and Level 2 measurements	0	0
Total fair value
Fair value of certain financial assets and liabilities
Cash	393,936	310,885
Assets measured at fair value	957,671	1,202,437
Cash and cash equivalents	637,513	528,622
Short-term investments	320,650	672,933
Accounts receivable, net	43	95
Investments		2,366
Accrued liabilities	(535)	(1,579)
Foreign currency derivatives	(492)	(1,484)
Total fair value \| Money market funds
Fair value of certain financial assets and liabilities
Assets measured at fair value	191,358	112,848
Total fair value \| Certificates of deposit
Fair value of certain financial assets and liabilities
Assets measured at fair value	14,075	15,720
Total fair value \| Commercial paper
Fair value of certain financial assets and liabilities
Assets measured at fair value	60,422	99,903
Total fair value \| Variable rate demand notes
Fair value of certain financial assets and liabilities
Assets measured at fair value	4,005	49,954
Total fair value \| Municipal securities
Fair value of certain financial assets and liabilities
Assets measured at fair value	177,118	529,984
Total fair value \| U.S. government agency securities
Fair value of certain financial assets and liabilities
Assets measured at fair value	39,092	81,230
Total fair value \| U.S. Treasuries
Fair value of certain financial assets and liabilities
Assets measured at fair value	78,157	3,397
Level 1
Fair value of certain financial assets and liabilities
Cash	393,936	310,885
Assets measured at fair value	585,294	423,733
Cash and cash equivalents	585,294	423,733
Level 1 \| Money market funds
Fair value of certain financial assets and liabilities
Assets measured at fair value	191,358	112,848
Level 2
Fair value of certain financial assets and liabilities
Assets measured at fair value	372,377	778,704
Cash and cash equivalents	52,219	104,889
Short-term investments	320,650	672,933
Accounts receivable, net	43	95
Investments		2,366
Accrued liabilities	(535)	(1,579)
Foreign currency derivatives	(492)	(1,484)
Level 2 \| Certificates of deposit
Fair value of certain financial assets and liabilities
Assets measured at fair value	14,075	15,720
Level 2 \| Commercial paper
Fair value of certain financial assets and liabilities
Assets measured at fair value	60,422	99,903
Level 2 \| Variable rate demand notes
Fair value of certain financial assets and liabilities
Assets measured at fair value	4,005	49,954
Level 2 \| Municipal securities
Fair value of certain financial assets and liabilities
Assets measured at fair value	177,118	529,984
Level 2 \| U.S. government agency securities
Fair value of certain financial assets and liabilities
Assets measured at fair value	39,092	81,230
Level 2 \| U.S. Treasuries
Fair value of certain financial assets and liabilities
Assets measured at fair value	$ 78,157	$ 3,397

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Notional Amount and Fair Value (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Foreign currency exchange contracts \| Maximum
Derivative Instruments and Hedging Activities
Term of derivative instrument	3 months
Not designated as hedging instruments \| Accounts receivable, net \| Receive SGD/pay USD
Derivative Instruments and Hedging Activities
Notional amount, Assets	$ 8,341	$ 223
Fair Value, Assets	30	2
Not designated as hedging instruments \| Accounts receivable, net \| Receive NOK/pay USD
Derivative Instruments and Hedging Activities
Notional amount, Assets	902	1,534
Fair Value, Assets	13	18
Not designated as hedging instruments \| Accounts receivable, net \| Receive USD/pay COP
Derivative Instruments and Hedging Activities
Notional amount, Assets		2,803
Fair Value, Assets		13
Not designated as hedging instruments \| Accounts receivable, net \| Receive CAD/pay USD
Derivative Instruments and Hedging Activities
Notional amount, Assets		4,892
Fair Value, Assets		61
Not designated as hedging instruments \| Accounts receivable, net \| Receive USD/pay BRL
Derivative Instruments and Hedging Activities
Notional amount, Assets		1,806
Fair Value, Assets		1
Not designated as hedging instruments \| Accrued liabilities \| Receive USD/pay GBP
Derivative Instruments and Hedging Activities
Notional amount, Liabilities	40,648	31,342
Fair Value, Liabilities	(323)	(334)
Not designated as hedging instruments \| Accrued liabilities \| Receive USD/pay AUD
Derivative Instruments and Hedging Activities
Notional amount, Liabilities	15,124	17,238
Fair Value, Liabilities	(105)	(177)
Not designated as hedging instruments \| Accrued liabilities \| Receive USD/pay ZAR
Derivative Instruments and Hedging Activities
Notional amount, Liabilities	8,618	21,311
Fair Value, Liabilities	(68)	(222)
Not designated as hedging instruments \| Accrued liabilities \| Receive USD/pay COP
Derivative Instruments and Hedging Activities
Notional amount, Liabilities	2,931
Fair Value, Liabilities	(33)
Not designated as hedging instruments \| Accrued liabilities \| Receive USD/pay NZD
Derivative Instruments and Hedging Activities
Notional amount, Liabilities	2,952	1,826
Fair Value, Liabilities	(4)	(18)
Not designated as hedging instruments \| Accrued liabilities \| Receive USD/pay EUR
Derivative Instruments and Hedging Activities
Notional amount, Liabilities	6,894	65,131
Fair Value, Liabilities	$ (2)	(642)
Not designated as hedging instruments \| Accrued liabilities \| Receive USD/pay MXN
Derivative Instruments and Hedging Activities
Notional amount, Liabilities		7,720
Fair Value, Liabilities		(126)
Not designated as hedging instruments \| Accrued liabilities \| Receive USD/pay TRY
Derivative Instruments and Hedging Activities
Notional amount, Liabilities		5,483
Fair Value, Liabilities		(52)
Not designated as hedging instruments \| Accrued liabilities \| Receive USD/pay CLP
Derivative Instruments and Hedging Activities
Notional amount, Liabilities		1,112
Fair Value, Liabilities		$ (8)

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - Nonhedging Designation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Not designated as hedging instruments \| Foreign currency exchange contracts \| Other income (expense), Net
Net (losses) gains on derivative instruments
Amount of (loss) gain recognized in income on derivatives	$ 9,737	$ (13,733)	$ 1,819

INVENTORIES (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
INVENTORIES
Raw materials	$ 94,421	$ 78,834
Finished goods	183,284	176,911
Inventories	$ 277,705	$ 255,745

PROPERTY AND EQUIPMENT, Net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property and equipment, net
Property and equipment, gross	$ 417,092	$ 369,086
Less: accumulated depreciation and amortization	(174,041)	(138,810)
Property and equipment, net	243,051	230,276
Total depreciation and amortization expense	45,000	37,000	$ 30,200
Land
Property and equipment, net
Property and equipment, gross	44,261	47,373
Leasehold improvements
Property and equipment, net
Property and equipment, gross	5,909	3,109
Furniture and fixtures
Property and equipment, net
Property and equipment, gross	6,932	6,461
Office and computer equipment
Property and equipment, net
Property and equipment, gross	18,717	14,506
Computer software
Property and equipment, net
Property and equipment, gross	3,278	3,650
Equipment
Property and equipment, net
Property and equipment, gross	183,727	148,434
Buildings
Property and equipment, net
Property and equipment, gross	115,242	107,374
Vehicles
Property and equipment, net
Property and equipment, gross	$ 39,026	$ 38,179

GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Goodwill
Goodwill, Beginning Balance	$ 1,331,643	$ 1,331,643
Goodwill, Ending Balance	1,331,643	1,331,643
Monster Energy Drinks
Goodwill
Goodwill, Beginning Balance	693,644	693,644
Goodwill, Ending Balance	693,644	693,644
Strategic Brands
Goodwill
Goodwill, Beginning Balance	637,999	637,999
Goodwill, Ending Balance	$ 637,999	$ 637,999

GOODWILL AND OTHER INTANGIBLE ASSETS - Intangible assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Intangible assets
Amortizing intangibles	$ 71,350	$ 71,400
Accumulated amortization	(38,311)	(26,383)
Amortizing intangibles, net	33,039	45,017
Non-amortizing intangibles	1,012,839	989,068
Intangibles, net	1,045,878	1,034,085
Amortization expense	$ 11,900	$ 11,900	$ 10,600
Minimum
Intangible assets
Useful life of intangible assets	5 years
Maximum
Intangible assets
Useful life of intangible assets	7 years

GOODWILL AND OTHER INTANGIBLE ASSETS - Amortization expense (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Future estimated amortization expense related to amortizing intangibles
2019	$ 11,847
2020	7,965
2021	4,722
2022	4,697
2023	1,404
2024 and thereafter	2,404
Amortizing intangibles, net	$ 33,039	$ 45,017

DISTRIBUTION AGREEMENTS (Details) - USD ($) $ in Millions	12 Months Ended
DISTRIBUTION AGREEMENTS (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
DISTRIBUTION AGREEMENTS
Termination costs	$ 26.6	$ 35.4	$ 79.8
Distribution agreement (in years)	20 years
Revenue recognized	$ 21.9	$ 22.3	$ 26.1

DEBT (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
DEBT (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Feb. 28, 2019
Capital lease obligations
DEBT
Company debt consisting of capital leases		$ 800	$ 1,300
Assets acquired under capital leases
Interest expenses for capital lease obligations		60	80	$ 70
Capital lease obligations \| Assets acquired under capital leases
Assets acquired under capital leases
Net book value		4,900	5,300
Accumulated depreciation		4,600	$ 4,200
Comerica \| Line of credit
DEBT
Maximum borrowing capacity	$ 10,000
Outstanding borrowings		0
Comerica \| Line of credit \| Base (prime) rate \| Minimum
DEBT
Percentage to be subtracted to compute the variable rate on the debt instrument	1.00%
Comerica \| Line of credit \| Base (prime) rate \| Maximum
DEBT
Percentage to be subtracted to compute the variable rate on the debt instrument	1.50%
Comerica \| Line of credit \| London Interbank Offered Rates \| Minimum
DEBT
Percentage that needs to be added to compute the variable rate on the debt instrument	1.25%
Comerica \| Line of credit \| London Interbank Offered Rates \| Maximum
DEBT
Percentage that needs to be added to compute the variable rate on the debt instrument	1.75%
Comerica \| Standby letters of credit
DEBT
Maximum borrowing capacity	$ 4,000
Amount outstanding		0
Comerica \| Standby letters of credit \| Minimum
DEBT
Fee (as a percent)	1.00%
Comerica \| Standby letters of credit \| Maximum
DEBT
Fee (as a percent)	1.50%
HSBC China \| Line of credit
DEBT
Maximum borrowing capacity					$ 15,000
Amount outstanding		$ 11,700
Interest rate (as a percent)		5.50%

COMMITMENTS AND CONTINGENCIES - Rent Expense (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
COMMITMENTS AND CONTINGENCIES
Rental expense under operating leases	$ 6.1	$ 10.7	$ 9.9

COMMITMENTS AND CONTINGENCIES - Future Payments (Details) $ in Thousands	Dec. 31, 2018 USD ($)
COMMITMENTS AND CONTINGENCIES
2019	$ 3,954
2020	2,949
2021	2,410
2022	2,114
2023	1,681
2024 and thereafter	14,860
Total	$ 27,968

COMMITMENTS AND CONTINGENCIES - Contractual obligations (Details) $ in Thousands	Dec. 31, 2018 USD ($)
COMMITMENTS AND CONTINGENCIES
2019	$ 99,004
2020	51,572
2021	23,577
2022	12,628
2023	3,405
Total	$ 190,186

COMMITMENTS AND CONTINGENCIES - Purchase Commitments (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Purchase Commitments
Aggregate value of raw material purchases	$ 289.6	$ 273.6	$ 205.9
Raw materials
Purchase Commitments
Purchase commitments	$ 49.8
Obligation term ( in years)	1 year

COMMITMENTS AND CONTINGENCIES - Litigation (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($) product
Commitments and contingencies
Accrued loss contingencies \| $	$ 60
TCCC
Commitments and contingencies
Number of energy products developed \| product	3

ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Components of accumulated other comprehensive loss:
Accumulated net unrealized loss on available-for-sale securities	$ 89	$ 841
Foreign currency translation adjustments, net of tax	32,775	15,818
Total accumulated other comprehensive loss	$ 32,864	$ 16,659

TREASURY STOCK PURCHASE (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2018	Feb. 28, 2019	Feb. 26, 2019	Aug. 07, 2018	May 29, 2018	Feb. 27, 2018	Feb. 28, 2017
Treasury Stock Purchase
Number of shares repurchased of common stock from employees in lieu of cash or withholding taxes due	34,976
Cash payment for repurchase of common stock from employees in lieu of cash or withholding taxes due	$ 2.1
Subsequent event
Treasury Stock Purchase
Share repurchase program, authorized amount		$ 520.6	$ 500.0
February 2017 Repurchase Plan
Treasury Stock Purchase
Share repurchase program, authorized amount							$ 500.0
Common stock repurchased (in shares)	4,300,000
Average purchase price (in dollars per share)	$ 57.74
Repurchase price of stock	$ 249.9
February 2018 Repurchase Program
Treasury Stock Purchase
Share repurchase program, authorized amount						$ 250.0
Common stock repurchased (in shares)	5,000,000
Average purchase price (in dollars per share)	$ 49.81
Repurchase price of stock	$ 249.9
May 2018 Repurchase Plan
Treasury Stock Purchase
Share repurchase program, authorized amount					$ 500.0
Common stock repurchased (in shares)	9,000,000
Average purchase price (in dollars per share)	$ 55.55
Repurchase price of stock	$ 499.9
August 2018 Repurchase Plan
Treasury Stock Purchase
Share repurchase program, authorized amount				$ 500.0
Common stock repurchased (in shares)	6,000,000
Average purchase price (in dollars per share)	$ 57.11
Repurchase price of stock	$ 340.3
August 2018 Repurchase Plan \| Subsequent event
Treasury Stock Purchase
Share repurchase program, authorized remaining amount			$ 20.6

STOCK-BASED COMPENSATION - Plans (Details) $ in Millions	3 Months Ended				12 Months Ended
STOCK-BASED COMPENSATION - Plans (Details) $ in Millions	Dec. 31, 2018 shares	Sep. 30, 2018 shares	Jun. 30, 2018 shares	Mar. 31, 2018 shares	Dec. 31, 2018 USD ($) plan shares	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
STOCK-BASED COMPENSATION
Number of Stock Based Compensation Plans \| plan					2
Compensation expense on share-based plans \| $					$ 57.1	$ 52.3	$ 45.8
Excess tax benefit realized for tax deductions from non-qualified stock option exercises and disqualifying dispositions of incentive stock options \| $					$ 8.5	$ 96.7	$ 20.8
Stock options
STOCK-BASED COMPENSATION
Common stock granted, net of cancellations (in shares)	194,000	11,000	360,000	2,615,000
2011 Omnibus Incentive Plan
STOCK-BASED COMPENSATION
Aggregate amount of common stock authorized (in shares)	43,500,000				43,500,000
Reduction in number of shares for each share granted					2.16
Vesting period					5 years
Expiration period (in years)					10 years
Common stock granted, net of cancellations (in shares)					22,740,597
Shares available for grant	16,611,623				16,611,623
2017 Directors plan
STOCK-BASED COMPENSATION
Aggregate amount of common stock authorized (in shares)	1,250,000				1,250,000
Common stock granted, net of cancellations (in shares)					47,880
Shares available for grant	1,202,120				1,202,120
Number of common shares held and expected to vest for eligibility under plan	9,000				9,000

STOCK-BASED COMPENSATION - Fair Value Assumptions (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Weighted-average assumptions used to estimate the fair value of options granted
Dividend yield (as a percent)					0.00%	0.00%	0.00%
Expected volatility (as a percent)					34.70%	36.50%	36.20%
Risk-free interest rate (as a percent)					2.81%	2.11%	1.57%
Expected term					6 years	6 years 1 month 6 days	6 years 3 months 18 days
Stock Options, Number of Shares
Balance at the beginning of the period (in shares)				17,819	17,819
Granted (in shares)	194	11	360	2,615
Exercised (in shares)					(1,450)
Cancelled or forfeited (in shares)					(659)
Balance at the end of the period (in shares)	18,890				18,890	17,819
Vested and expected to vest in the future at the end of the period (in shares)	18,052				18,052
Exercisable at the end of the period (in shares)	10,432				10,432
Stock options, Weighted-Average Exercise Price Per Share
Balance at the beginning of the period (in dollars per share)				$ 29.62	$ 29.62
Granted (in dollars per share)	$ 55.91	$ 58.77	$ 51.72	$ 58.76
Exercised (in dollars per share)					19.20
Cancelled or forfeited (in dollars per share)					45.22
Balance at the end of the period (in dollars per share)	34.61				34.61	$ 29.62
Vested and expected to vest in the future at the end of the period (in dollars per share)	33.83				33.83
Exercisable at the end of the period (in dollars per share)	$ 23.10				$ 23.10
Weighted-Average Remaining Contractual Term (In years)
Balance at the beginning of the period					5 years 9 months 18 days	6 years 1 month 6 days
Balance at the end of the period					5 years 9 months 18 days	6 years 1 month 6 days
Vested and expected to vest in the future at the end of the period					5 years 8 months 12 days
Exercisable at the end of the period					4 years 1 month 6 days
Aggregate Intrinsic Value
Balance at the beginning of the period				$ 600,032	$ 600,032
Balance at the end of the period	$ 303,627				303,627	$ 600,032
Vested and expected to vest in the future at the end of the period	301,723				301,723
Exercisable at the end of the period	$ 272,636				$ 272,636

STOCK-BASED COMPENSATION - Exercise Prices (Details) shares in Thousands	12 Months Ended
	Dec. 31, 2018 $ / shares shares
Stock options outstanding and stock options exercisable
Number Outstanding (in shares) \| shares	18,890
Options Outstanding, Weighted Average Remaining Contractual Term (Years)	5 years 9 months 18 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 34.61
Options Exercisable (in shares) \| shares	10,432
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 23.10
Range of Exercise Prices $5.94 - $5.94
Stock options outstanding and stock options exercisable
Stock options, range of exercise prices, low end of range (in dollars per share)	5.94
Stock options, range of exercise prices, high end of range (in dollars per share)	$ 5.94
Number Outstanding (in shares) \| shares	3,086
Options Outstanding, Weighted Average Remaining Contractual Term (Years)	10 months 24 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 5.94
Options Exercisable (in shares) \| shares	3,086
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 5.94
Range of Exercise Prices $6.02 - $17.99
Stock options outstanding and stock options exercisable
Stock options, range of exercise prices, low end of range (in dollars per share)	6.02
Stock options, range of exercise prices, high end of range (in dollars per share)	$ 17.99
Number Outstanding (in shares) \| shares	2,109
Options Outstanding, Weighted Average Remaining Contractual Term (Years)	4 years
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 16.13
Options Exercisable (in shares) \| shares	2,109
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 16.13
Range of Exercise Prices $18.64 - $23.68
Stock options outstanding and stock options exercisable
Stock options, range of exercise prices, low end of range (in dollars per share)	18.64
Stock options, range of exercise prices, high end of range (in dollars per share)	$ 23.68
Number Outstanding (in shares) \| shares	2,227
Options Outstanding, Weighted Average Remaining Contractual Term (Years)	5 years
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 22.77
Options Exercisable (in shares) \| shares	1,970
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 22.71
Range of Exercise Prices $36.05 - $43.64
Stock options outstanding and stock options exercisable
Stock options, range of exercise prices, low end of range (in dollars per share)	36.05
Stock options, range of exercise prices, high end of range (in dollars per share)	$ 43.64
Number Outstanding (in shares) \| shares	1,932
Options Outstanding, Weighted Average Remaining Contractual Term (Years)	7 years 2 months 12 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 41.59
Options Exercisable (in shares) \| shares	683
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 40.41
Range of Exercise Prices $43.99 - $43.99
Stock options outstanding and stock options exercisable
Stock options, range of exercise prices, low end of range (in dollars per share)	43.99
Stock options, range of exercise prices, high end of range (in dollars per share)	$ 43.99
Number Outstanding (in shares) \| shares	2,325
Options Outstanding, Weighted Average Remaining Contractual Term (Years)	7 years 2 months 12 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 43.99
Options Exercisable (in shares) \| shares	856
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 43.99
Range of Exercise Prices $44.73 - $45.01
Stock options outstanding and stock options exercisable
Stock options, range of exercise prices, low end of range (in dollars per share)	44.73
Stock options, range of exercise prices, high end of range (in dollars per share)	$ 45.01
Number Outstanding (in shares) \| shares	623
Options Outstanding, Weighted Average Remaining Contractual Term (Years)	7 years 1 month 6 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 44.94
Options Exercisable (in shares) \| shares	225
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 44.94
Range of Exercise Prices $45.16 - $45.16
Stock options outstanding and stock options exercisable
Stock options, range of exercise prices, low end of range (in dollars per share)	45.16
Stock options, range of exercise prices, high end of range (in dollars per share)	$ 45.16
Number Outstanding (in shares) \| shares	1,998
Options Outstanding, Weighted Average Remaining Contractual Term (Years)	6 years 1 month 6 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 45.16
Options Exercisable (in shares) \| shares	1,183
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 45.16
Range of Exercise Prices $45.55- $55.20
Stock options outstanding and stock options exercisable
Stock options, range of exercise prices, low end of range (in dollars per share)	45.55
Stock options, range of exercise prices, high end of range (in dollars per share)	$ 55.20
Number Outstanding (in shares) \| shares	1,899
Options Outstanding, Weighted Average Remaining Contractual Term (Years)	8 years 4 months 24 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 48.24
Options Exercisable (in shares) \| shares	313
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 46.81
Range of Exercise Prices $56.08- $57.36
Stock options outstanding and stock options exercisable
Stock options, range of exercise prices, low end of range (in dollars per share)	56.08
Stock options, range of exercise prices, high end of range (in dollars per share)	$ 57.36
Number Outstanding (in shares) \| shares	81
Options Outstanding, Weighted Average Remaining Contractual Term (Years)	9 years 7 months 6 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 57.16
Options Exercisable (in shares) \| shares	1
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 56.08
Range of Exercise Prices $58.73- $67.93
Stock options outstanding and stock options exercisable
Stock options, range of exercise prices, low end of range (in dollars per share)	58.73
Stock options, range of exercise prices, high end of range (in dollars per share)	$ 67.93
Number Outstanding (in shares) \| shares	2,610
Options Outstanding, Weighted Average Remaining Contractual Term (Years)	9 years 1 month 6 days
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$ 58.89
Options Exercisable (in shares) \| shares	6
Options Exercisable, Weighted Average Exercise Price (in dollars per share)	$ 62.92

STOCK-BASED COMPENSATION - Equity Awards (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Compensation cost charged against income
Operating expenses					$ 57,111	$ 52,282	$ 45,848
Total employee and non-employee share-based compensation expense included in income, before income tax					57,111	52,282	45,848
Less: Amount of income tax benefit recognized in earnings					(14,892)	(100,635)	(34,909)
Amount charged against net income					42,219	(48,353)	10,939
Operating expense
Compensation cost charged against income
Total employee and non-employee share-based compensation expense included in income, before income tax					$ 57,100	$ 52,300	$ 45,800
Stock options
STOCK-BASED COMPENSATION
Weighted-average grant-date fair value of options granted (in dollars per share)					$ 22.37	$ 18.29	$ 16.90
Total intrinsic value of options exercised					$ 56,800	$ 285,800	$ 70,600
Cash received from option exercises					25,900	$ 52,600	$ 16,400
Total unrecognized compensation expense related to non-vested shares granted to employees	$ 98,700				$ 98,700
Cost expected to be recognized over a weighted-average period					2 years 7 months 6 days
Stock units expected to vest (in shares)	18,052				18,052
Restricted stock units
STOCK-BASED COMPENSATION
Total unrecognized compensation expense related to non-vested shares granted to employees	$ 15,700				$ 15,700
Cost expected to be recognized over a weighted-average period					1 year 7 months 6 days
Stock units expected to vest (in shares)	500				500
Number of Shares
Non-vested at the beginning of the period (in shares)				530	530
Granted (in shares)	1	1	48	221
Vested (in shares)					(265)
Forfeited/cancelled (in shares)					(7)
Non-vested at the end of the period (in shares)	529				529	530
Weighted Average Grant-Date Fair Value
Non-vested at the beginning of the period (in dollars per share)				$ 45.09	$ 45.09
Granted (in dollars per share)	$ 56.19	$ 58.72	$ 52.31	$ 58.75	57.59	$ 46.74	$ 44.71
Vested (in dollars per share)					45.26
Forfeited/cancelled (in dollars per share)					33.60
Non-vested at the end of the period (in dollars per share)	$ 51.55				$ 51.55	$ 45.09
ISO
Compensation cost charged against income
Total employee and non-employee share-based compensation expense included in income, before income tax					$ 10,000	$ 8,700	$ 8,000
NSO
Compensation cost charged against income
Total employee and non-employee share-based compensation expense included in income, before income tax					$ 47,100	$ 43,600	$ 37,800

INCOME TAXES - Tax Cuts and Jobs Act (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
INCOME TAXES
Federal statutory rate (as a percent)	21.00%	35.00%	35.00%
Provisional charge, revaluated net deferred tax assets		$ 39,763
Provision related to deemed mandatory repatriation	$ 1,800	$ 2,100

INCOME TAXES - Classification and Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Domestic and foreign components of company's income before income taxes
Domestic	$ 1,100,487	$ 1,062,713	$ 1,029,763
Foreign	192,785	138,910	49,922
INCOME BEFORE PROVISION FOR INCOME TAXES	1,293,272	1,201,623	1,079,685
Intercompany royalties, management fees and interest charges from the Company's domestic to foreign entities	40,500	42,500	25,600
Current:
Federal	209,147	243,127	212,283
State	41,934	43,252	35,756
Foreign	42,541	27,522	17,171
Total current provision	293,622	313,901	265,210
Deferred:
Federal	9,804	61,797	87,360
State	1,644	3,062	15,254
Foreign	(8,778)	(4,579)	(9,709)
Total deferred provision	2,670	60,280	92,905
Valuation allowance	3,976	6,764	8,885
Total provision for income taxes	$ 300,268	$ 380,945	$ 367,000
Federal statutory rate (as a percent)	21.00%	35.00%	35.00%
Reconciliation of income tax expense
U.S. Federal tax expense at statutory rates	$ 271,587	$ 420,568	$ 377,599
State income taxes, net of federal tax benefit	36,312	27,569	33,148
Permanent differences	3,606	10,356	954
Stock based compensation	(370)	(79,687)	(13,654)
Domestic production deduction		(22,229)	(21,447)
Deferred tax asset reduction (Tax Reform Act)		39,763
Other	(8,438)	3,736	(8,765)
Foreign rate differential	(6,405)	(25,895)	(9,720)
Valuation allowance	3,976	6,764	8,885
Total provision for income taxes	$ 300,268	$ 380,945	$ 367,000

INCOME TAXES - Deferred Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Deferred Tax Assets:
Reserve for sales returns	$ 137	$ 159
Reserve for inventory obsolescence	2,836	522
Reserve for marketing development fund	4,666	6,360
Capitalization of inventory costs	1,210	1,598
State franchise tax - current	2,663	2,050
Accrued compensation	574	1,473
Accrued other liabilities	5,276	3,917
Deferred revenue	87,573	93,321
Stock-based compensation	25,439	21,119
Foreign net operating loss carryforward	28,030	28,965
Prepaid supplies	7,476	7,273
Termination payments	71,918	70,637
Gain on intercompany transfer		6,793
Other deferred tax assets	11,010	3,449
Total gross deferred tax assets	248,808	247,636
Deferred Tax Liabilities:
Amortization of trademarks	(31,445)	(21,657)
Intangibles	(82,544)	(84,867)
State franchise tax - deferred	(7,093)	(7,617)
Other deferred tax liabilities	(99)	(62)
Depreciation	(5,123)	(8,260)
Total gross deferred tax liabilities	(126,304)	(122,463)
Valuation Allowance	(36,816)	(32,840)
Net deferred tax assets	85,688	92,333
Increase to provision for income taxes	4,000	$ 6,800	$ 8,900
Net operating loss carryforwards	102,600
Net operating loss carryforwards subject to indefinite carryforward	74,700
Net operating loss carryforwards that begin to expire in 2019	$ 27,900

INCOME TAXES - Unrecognized Tax Benefit Rollforward (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Gross unrecognized tax benefits, roll forward
Balance at the beginning of the period	$ 6,540	$ 9	$ 471
Additions for tax positions related to the prior years	1,159	6,540
Decreases for tax positions related to the prior years	(2,664)	(9)	(462)
Balance at the end of the period	5,035	$ 6,540	$ 9
Accrued interest and penalties related to unrecognized tax benefits	$ 900

EARNINGS PER SHARE (Details) - shares shares in Thousands	12 Months Ended
EARNINGS PER SHARE (Details) - shares shares in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Weighted-average shares outstanding:
Basic	557,166	566,782	587,874
Dilutive secuirties	7,088	10,359	11,945
Diluted	564,254	577,141	599,819
Options and awards outstanding excluded from the calculations as their effect would have been antidilutive (in shares)	3,200	7,900	5,700

EMPLOYEE BENEFIT PLAN (Details) - Employee 401(k) Plan - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Employee Benefit Plant
Annual employee contribution limit as a percent of compensation	15.00%
Employer matching contribution as a percentage of the employee's contribution	50.00%
Percent of employee's earnings eligible for employer matching contribution	6.00%
Percentage of contribution vested each year	25.00%
Vesting period of contribution by the company	4 years
Matching contributions by the company	$ 2.9	$ 2.5	$ 2.0

SEGMENT INFORMATION - Net Revenues (Details) $ in Thousands	3 Months Ended								12 Months Ended
SEGMENT INFORMATION - Net Revenues (Details) $ in Thousands	Dec. 31, 2018 USD ($)	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2018 USD ($) segment	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Segment information
Number of reportable segments \| segment									3
Number of operating segments \| segment									3
Total Net Sales	$ 924,229	$ 1,016,160	$ 1,015,873	$ 850,921	$ 810,355	$ 909,476	$ 907,068	$ 742,146	$ 3,807,183	$ 3,369,045	$ 3,049,393
Operating income									1,283,619	1,198,787	1,085,338
Income before tax									1,293,272	1,201,623	1,079,685
Recognition of deferred revenue									21,900	22,300	26,100
Corporate and unallocated
Segment information
Operating income									(269,325)	(245,833)	(228,505)
Income before tax									(260,631)	(242,957)	(234,334)
Monster Energy Drinks
Segment information
Total Net Sales									3,498,427
Monster Energy Drinks \| Operating segment
Segment information
Total Net Sales									3,498,427	3,047,596	2,759,862
Operating income									1,371,062	1,264,579	1,148,427
Income before tax									1,372,001	1,264,555	1,148,640
Recognition of deferred revenue									44,300	43,400	40,300
Distribution Agreements Termination Cost									26,600	35,400	79,800
Strategic Brands
Segment information
Total Net Sales									285,836
Strategic Brands \| Operating segment
Segment information
Total Net Sales									285,836	299,844	272,520
Operating income									176,520	174,458	163,121
Income before tax									176,540	174,442	163,084
Other
Segment information
Total Net Sales									22,920
Other \| Operating segment
Segment information
Total Net Sales									22,920	21,605	17,011
Operating income									5,362	5,583	2,295
Income before tax									$ 5,362	$ 5,583	$ 2,295

SEGMENT INFORMATION - Depreciation and Amortization (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment information
Depreciation and amortization	$ 56,979	$ 48,887	$ 40,845
Corporate and unallocated
Segment information
Depreciation and amortization	8,161	7,245	6,227
Monster Energy Drinks \| Operating segment
Segment information
Depreciation and amortization	36,387	29,591	24,048
Strategic Brands \| Operating segment
Segment information
Depreciation and amortization	7,774	7,443	7,113
Other \| Operating segment
Segment information
Depreciation and amortization	$ 4,657	$ 4,608	$ 3,457

SEGMENT INFORMATION - Expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment information
Operating income	$ 1,283,619	$ 1,198,787	$ 1,085,338
Stock-based compensation expense	57,100	52,300	45,800
Corporate and unallocated
Segment information
Operating income	(269,325)	(245,833)	(228,505)
Payroll costs	174,900	156,300	128,000
Stock-based compensation expense	57,100	52,300	45,800
Professional service expenses	53,600	51,800	66,300
Insurance costs	6,000	6,000	6,000
Other operating expenses	$ 34,800	$ 31,700	$ 28,200

SEGMENT INFORMATION - Concentration Risk (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Segment information
Total Net Sales	$ 924,229	$ 1,016,160	$ 1,015,873	$ 850,921	$ 810,355	$ 909,476	$ 907,068	$ 742,146	$ 3,807,183	$ 3,369,045	$ 3,049,393
Outside United States
Segment information
Percentage of net sales									29.00%	27.00%	24.00%
Total Net Sales									$ 1,090,000	$ 909,300	$ 733,700
TCCC \| Net Sales \| Customer concentration
Segment information
Percentage of net sales									3.00%	18.00%	41.00%
CCBCC Operations, LLC \| Net Sales \| Customer concentration
Segment information
Percentage of net sales									13.00%	13.00%	9.00%
Coca-Cola European Partners \| Net Sales \| Customer concentration
Segment information
Percentage of net sales									10.00%	9.00%	9.00%
Reyes Coca-Cola Bottling \| Net Sales \| Customer concentration
Segment information
Percentage of net sales									12.00%	6.00%	2.00%

SEGMENT INFORMATION - Goodwill and other intangible assets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Segment information
Goodwill and other intangible assets	$ 2,377,521	$ 2,365,728
Monster Energy Drinks \| Operating segment
Segment information
Goodwill and other intangible assets	1,368,620	1,346,648
Strategic Brands \| Operating segment
Segment information
Goodwill and other intangible assets	989,944	995,582
Other \| Operating segment
Segment information
Goodwill and other intangible assets	$ 18,957	$ 23,498

RELATED PARTY TRANSACTIONS (Details) $ in Thousands	12 Months Ended
RELATED PARTY TRANSACTIONS (Details) $ in Thousands	Dec. 31, 2018 USD ($) director	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
TCCC
Related party transactions
Voting interest (as a percent)	19.00%
Net sales	$ 132,500	$ 594,100
Purchases from related party	27,500	26,200	$ 26,200
TCCC Subsidiaries and TCCC Related parties
Related party transactions
Commission expenses	48,000
TCCC Independent Bottlers
Related party transactions
Commission expenses	14,800
TCCC Subsidiaries
Related party transactions
Commission expenses		9,800
Accounts receivable, net	25,312	32,607
Accounts payable	(54,430)	(45,465)
Accrued promotional allowances	$ (4,044)	(5,884)
TCCC Related parties and TCCC Independent Bottlers \| Operating expense
Related party transactions
Commission expenses		45,000
Principal owners
Related party transactions
Number of directors who are principal owners of a company that provides promotional materials \| director	2
Expenses incurred in connection with materials or services provided by a related party	$ 1,800	2,200	1,500
Partnership with Director
Related party transactions
Partnership contribution	$ 1,900
Ownership percentage	50.00%
Monster Energy Drinks \| TCCC Subsidiaries
Related party transactions
Contract manufacturing expenses	$ 22,800	$ 11,800	$ 9,600

SUBSEQUENT EVENTS (Details) - USD ($) $ in Millions	Feb. 28, 2019	Feb. 26, 2019	Aug. 07, 2018
Subsequent event
Subsequent Events
Share repurchase program, authorized amount	$ 520.6	$ 500.0
August 2018 Repurchase Plan
Subsequent Events
Share repurchase program, authorized amount			$ 500.0
August 2018 Repurchase Plan \| Subsequent event
Subsequent Events
Share repurchase program, authorized remaining amount		$ 20.6

QUARTERLY FINANCIAL DATA (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
QUARTERLY FINANCIAL DATA (Unaudited)
Total Net Sales	$ 924,229	$ 1,016,160	$ 1,015,873	$ 850,921	$ 810,355	$ 909,476	$ 907,068	$ 742,146	$ 3,807,183	$ 3,369,045	$ 3,049,393
Gross Profit	552,201	607,659	620,258	515,257	503,610	569,709	583,497	480,874	2,295,375	2,137,690	1,942,000
Net income	$ 239,105	$ 267,733	$ 270,116	$ 216,050	$ 201,321	$ 218,744	$ 222,633	$ 177,980	$ 993,004	$ 820,678	$ 712,685
EARNINGS PER SHARE
Basic (in dollars per share)	$ 0.43	$ 0.48	$ 0.48	$ 0.38	$ 0.36	$ 0.39	$ 0.39	$ 0.31	$ 1.78	$ 1.45	$ 1.21
Diluted (in dollars per share)	$ 0.43	$ 0.48	$ 0.48	$ 0.38	$ 0.35	$ 0.38	$ 0.39	$ 0.31	$ 1.76	$ 1.42	$ 1.19

- Definition

The amount of net income (loss) from continuing operations per each share of common stock or unit outstanding during the reporting period.

+ References + Details

- Definition

The amount of net income (loss) derived from continuing operations during the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References + Details

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Allowance for doubtful accounts, sales returns and cash discounts
Changes to valuation allowance
Balance at beginning of period	$ 1,105	$ 1,121	$ 1,248
Charged to cost and expenses	7,890	8,364	7,389
Deductions	(7,406)	(8,380)	(7,516)
Balance at end of period	1,589	1,105	1,121
Allowance on Deferred Tax Assets and Unrecognized Tax Benefits
Changes to valuation allowance
Balance at beginning of period	40,680	26,086	17,846
Charged to cost and expenses	2,068	14,594	8,240
Balance at end of period	$ 42,748	$ 40,680	$ 26,086