CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
CURRENT ASSETS:
Cash and cash equivalents	$ 354,842	$ 328,349
Short-term investments	244,649	18,487
Trade accounts receivable, net	101,222	104,206
Distributor receivables	413	4,699
Inventories	153,241	108,143
Prepaid expenses and other current assets	17,022	11,270
Prepaid income taxes	9,992
Deferred income taxes	16,772	10,350
Total current assets	898,153	585,504
INVESTMENTS	44,189	80,836
PROPERTY AND EQUIPMENT, net	34,551	33,314
DEFERRED INCOME TAXES	58,475	65,678
INTANGIBLES, net	43,316	33,512
OTHER ASSETS	3,447	1,226
Total Assets	1,082,131	800,070
CURRENT LIABILITIES:
Accounts payable	85,674	48,863
Accrued liabilities	23,811	14,174
Deferred revenue	10,140	9,125
Accrued distributor terminations	407	2,977
Accrued compensation	7,603	7,623
Current portion of debt	274	206
Income taxes payable	925	761
Total current liabilities	128,834	83,729
DEFERRED REVENUE	124,899	131,388
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS' EQUITY:
Common stock - $0.005 par value; 120,000 shares authorized; 98,731 shares issued and 88,980 outstanding as of December 31, 2010; 97,285 shares issued and 88,159 outstanding as of December 31, 2009	494	486
Additional paid-in capital	187,040	137,040
Retained earnings	882,425	670,396
Accumulated other comprehensive income (loss)	281	(4,667)
Common stock in treasury, at cost; 9,751 shares and 9,126 shares as of December 31, 2010 and 2009, respectively	(241,842)	(218,302)
Total stockholders' equity	828,398	584,953
Total Liabilities and Stockholders' Equity	$ 1,082,131	$ 800,070

CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
NET SALES	$ 1,303,942	$ 1,143,299	$ 1,033,780
COST OF SALES	623,702	530,983	494,986
GROSS PROFIT	680,240	612,316	538,794
OPERATING EXPENSES	332,426	275,007	375,203
OPERATING INCOME	347,814	337,309	163,591
OTHER INCOME (EXPENSE):
Interest and other income, net	2,246	2,273	10,413
Loss on investments and put option, net (Note 2)	(758)	(3,887)	(527)
Total other income (expense)	1,488	(1,614)	9,886
INCOME BEFORE PROVISION FOR INCOME TAXES	349,302	335,695	173,477
PROVISION FOR INCOME TAXES	137,273	126,979	65,445
NET INCOME	$ 212,029	$ 208,716	$ 108,032
NET INCOME PER COMMON SHARE:
Basic (in dollars per share)	$ 2.40	$ 2.32	$ 1.17
Diluted (in dollars per share)	$ 2.28	$ 2.21	$ 1.11
WEIGHTED AVERAGE NUMBER OF SHARES OF COMMON STOCK AND COMMON STOCK EQUIVALENTS:
Basic (in shares)	88,514	89,967	92,515
Diluted (in shares)	93,021	94,643	97,530

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) In Thousands, unless otherwise specified	Total	Common stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury stock
Balance at Dec. 31, 2007	$ 422,167	$ 479	$ 96,749	$ 353,648	$ (47)	$ (28,662)
Balance (in shares) at Dec. 31, 2007		95,849				(2,658)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	13,771		13,771
Exercise of stock options	2,257	5	2,252
Exercise of stock options (in shares)		1,002
Excess tax benefits from share based payment arrangements	4,334		4,334
Repurchase of common stock	(103,467)					(103,467)
Repurchase of common stock (in shares)						(3,865)
Foreign currency translation	(2,118)				(2,118)
Change in unrealized loss on available-for-sale securities, net of tax	(8,660)				(8,660)
Net income	108,032			108,032
Balance at Dec. 31, 2008	436,316	484	117,106	461,680	(10,825)	(132,129)
Balance (in shares) at Dec. 31, 2008		96,851				(6,523)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	14,303		14,303
Exercise of stock options	2,502	2	2,500
Exercise of stock options (in shares)		434
Excess tax benefits from share based payment arrangements	3,131		3,131
Repurchase of common stock	(86,173)					(86,173)
Repurchase of common stock (in shares)						(2,603)
Foreign currency translation	2,087				2,087
Change in unrealized loss on available-for-sale securities, net of tax	4,071				4,071
Net income	208,716			208,716
Balance at Dec. 31, 2009	584,953	486	137,040	670,396	(4,667)	(218,302)
Balance (in shares) at Dec. 31, 2009		97,285				(9,126)
Increase (Decrease) in Stockholders' Equity
Stock-based compensation	16,810		16,810
Exercise of stock options	20,824	8	20,816
Exercise of stock options (in shares)		1,446
Excess tax benefits from share based payment arrangements	12,374		12,374
Repurchase of common stock	(23,540)					(23,540)
Repurchase of common stock (in shares)						(625)
Foreign currency translation	1,837				1,837
Change in unrealized loss on available-for-sale securities, net of tax	3,111				3,111
Net income	212,029			212,029
Balance at Dec. 31, 2010	$ 828,398	$ 494	$ 187,040	$ 882,425	$ 281	$ (241,842)
Balance (in shares) at Dec. 31, 2010		98,731				(9,751)

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 212,029	$ 208,716	$ 108,032
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of trademark	48	68	55
Depreciation and amortization	11,728	5,839	3,417
Loss (gain) on disposal of property and equipment	194	(144)	101
Stock-based compensation	16,862	14,040	13,899
Gain on put option	(3,768)
Loss on investments, net	4,526	3,887	527
Deferred income taxes	(1,361)	(3,163)	(44,594)
Tax benefit from exercise of stock options	(12,374)	(3,131)	(4,334)
Provision (benefit) for doubtful accounts	1,659	671	(33)
Effect on cash of changes in operating assets and liabilities:
Accounts receivable	2,031	(59,418)	30,609
Distributor receivables	4,286	86,023	(85,348)
Inventories	(44,973)	8,545	(19,671)
Prepaid expenses and other current assets	(2,774)	(2,872)	(4,686)
Prepaid income taxes	(9,992)	4,977	(4,977)
Accounts payable	37,096	(15,786)	7,517
Accrued liabilities	9,432	9,341	3,272
Accrued distributor terminations	(2,570)	(99,332)	98,082
Accrued compensation	(66)	838	956
Income taxes payable	12,505	3,892	(1,960)
Deferred revenue	(5,474)	(6,799)	98,632
Net cash provided by operating activities	229,044	156,192	199,496
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of held-to-maturity investments	107,992	79,919	4,997
Sales of available-for-sale investments	13,201	17,254	283,241
Sales of trading investments	7,400
Purchases of held-to-maturity investments	(257,474)	(74,976)	(24,938)
Purchases of available-for-sale investments	(59,907)		(106,685)
Purchases of property and equipment	(12,545)	(23,554)	(6,718)
Proceeds from sale of property and equipment	115	877	159
Additions to trademarks	(9,852)	(5,215)	(4,354)
(Increase) Decrease in other assets	(1,440)	1,226	(1,720)
Net cash provided by (used in) investing activities	(212,510)	(4,469)	143,982
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on debt	(420)	(1,539)	(1,170)
Tax benefit from exercise of stock options	12,374	3,131	4,334
Issuance of common stock	20,824	2,502	2,257
Purchases of common stock held in treasury	(23,540)	(86,173)	(103,467)
Net cash provided by (used in) financing activities	9,238	(82,079)	(98,046)
Effect of exchange rate changes on cash and cash equivalents	721	1,904	(1,071)
NET INCREASE IN CASH AND CASH EQUIVALENTS	26,493	71,548	244,361
CASH AND CASH EQUIVALENTS, beginning of year	328,349	256,801	12,440
CASH AND CASH EQUIVALENTS, end of year	354,842	328,349	256,801
Cash paid during the year for:
Interest	13	50	49
Income taxes	$ 136,369	$ 125,838	$ 118,338

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2010

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization – Hansen Natural Corporation (the “Company” or “Hansen”) was incorporated in Delaware on April 25, 1990. 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 “alternative” beverage category beverages primarily under the following brand names: Monster Energy®, Java Monster™, Monster Energy® Extra Strength, Nitrous Technology™, Monster Rehab™, Peace Tea™, Hansen’s®, Hansen’s Natural Sodas®, Junior Juice®, Blue Sky®, X-Presso Monster™, Vidration™, Worx Energy™, Admiral™, Lost® Energy™, Hubert’s™, Rumba®, Samba and Tango. The “alternative” beverage category combines non-carbonated ready-to-drink iced teas, lemonades, juice cocktails, single-serve juices and fruit beverages, ready-to-drink dairy and coffee drinks, energy drinks, sports drinks, and single-serve still water (flavored, unflavored and enhanced) with “new age” beverages, including sodas that are considered natural, sparkling juices and flavored sparkling beverages.

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. The Company has reclassified $9.1 million of current deferred revenue from accrued liabilities on the consolidated balance sheet as of December 31, 2009 in order to conform to the current year presentation as a separate line item.

Subsequent Events – Management has reviewed and evaluated subsequent events and transactions occurring after the balance sheet date through the filing of this annual report on Form 10-K on March 1, 2011.

Principles of Consolidation – The Company consolidates all entities that it controls by ownership of a majority voting interest as well as variable interest entities for which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation.

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 the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“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 income (loss) as a separate component of stockholders’ equity. 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. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available (see Note 3). Under 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 income (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 our 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.

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.

Capitalized Software Costs – In accordance with ASC 350-40, the Company capitalizes certain costs incurred in connection with developing or obtaining internal use software. Costs incurred in the preliminary project stage are expensed. All direct external costs incurred to develop internal use software during the development stage are capitalized and amortized using the straight-line method over the remaining useful lives. Costs such as maintenance and training are expensed as incurred.

Intangibles – Intangibles are comprised of trademarks representing the Company’s exclusive ownership of the Hansen’s® trademark in connection with the manufacture, sale and distribution of beverages and the Monster Energy® trademark in connection with the manufacture, sale and distribution of supplements and beverages. The Company also owns a number of other trademarks in the United States as well as in a number of countries around the world. In addition, the Company owns the Blue Sky® trademark, which was acquired in September 2000, and the Junior Juice® trademark, which was acquired in May 2001. In accordance with 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, which range from 1 to 25 years. For the fiscal years ended December 31, 2010, 2009 and 2008, 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 fiscal years ended December 31, 2010, 2009 and 2008, there were no impairment indicators identified.

Foreign Currency Translation and Transactions – The accounts of the Company’s foreign subsidiaries are translated in accordance with ASC 830. Foreign currency transaction gains and losses are recognized in interest and other income, 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 income (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 income (loss) in stockholders’ equity.

Revenue Recognition – The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. Generally, ownership of and title to the Company’s products passes to customers upon delivery of the products to customers. Certain of the Company’s distributors may also perform a separate function as a co-packer on the Company’s behalf. In such cases, ownership of and title to the Company’s products that are co-packed on the Company’s behalf by those co-packers who are also distributors, passes to such distributors when the Company is notified by them that they have taken transfer or possession of the relevant portion of the Company’s finished goods. Net sales have been determined after deduction of promotional and other allowances in accordance with ASC 605-50. 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 agreement, generally 20 years.

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 raw materials utilized in the manufacture of products, co-packing fees, repacking fees, in-bound freight charges, as well as certain internal transfer costs, warehouse expenses incurred prior to the manufacture of the Company’s finished products and certain quality control costs. Raw materials account for the largest portion of the cost of sales. Raw materials include cans, bottles, other containers, 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, 2010, 2009 and 2008, freight-out costs amounted to $47.4 million, $39.8 million and $45.1 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 periodic performance compliance provisions of the contracts. Advertising and promotional expenses, including but not limited to production costs, amounted to $104.9 million, $86.7 million and $84.6 million for the years ended December 31, 2010, 2009 and 2008, 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 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 ASC 718. ASC 718 requires the fair value of all stock option awards issued to employees to be recorded as an expense over the related vesting period. Generally, the Company recognizes these compensation costs net of an estimated forfeiture rate on a straight-line basis over the requisite service period of the reward, which is typically the vesting term of five years.

Net Income Per Common Share – In accordance with 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 take steps on an ongoing basis to secure the availability of alternative sources for such components and minimize the risk of any disruption in production.

On October 2, 2010, The Coca-Cola Company (“TCCC”) completed its acquisition of the North American business operations of Coca-Cola Enterprises, Inc. (“CCE”), through a merger with a wholly owned subsidiary of TCCC. The surviving wholly owned subsidiary was subsequently renamed Coca-Cola Refreshments (“CCR”), and currently distributes the Company’s products in those portions of the United States in which CCE previously distributed our products. Concurrently with this acquisition, a new entity, which retained the name Coca-Cola Enterprises, Inc. (“New CCE”) was formed which is currently the Company’s distributor in Great Britain, France, Belgium, the Netherlands, Luxembourg, Monaco and Sweden (added during the first quarter of 2011).

CCE (including the Coca-Cola Bottling Company up to September 30, 2010) (CCE replaced by New CCE from October 1, 2010), a customer of the Direct Store Delivery segment (“DSD”) with sales within specific markets in the United States, Canada, the United Kingdom and certain countries in Europe, accounted for approximately 28% and 27% of the Company’s net sales for the years ended December 31, 2010 and 2009, respectively. The Dr. Pepper Snapple Group (“DPS”), a former customer of the DSD segment, accounted for approximately 13% of the Company’s net sales for the year ended December 31, 2008. Wal-Mart, Inc. (including Sam’s Club), a customer of both the DSD and Warehouse segments, accounted for approximately 11% of our net sales for the year ended December 31, 2008.

Credit Risk – The Company sells its products nationally and internationally, primarily to full service beverage distributors, retail grocery and specialty chains, wholesalers, club stores, drug chains, mass merchandisers, convenience chains, health food distributors and food service 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 – In January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06, “Improving Disclosures about Fair Value Measurements”. ASU 2010-06 requires additional disclosures about fair value measurements including transfers in and out of Levels 1 and 2, and a higher level of disaggregation for the different types of financial instruments. In addition, with respect to the reconciliation of Level 3 fair value measurements, information on purchases, sales, issuances and settlements, requires separate presentation. The guidance also requires disclosure of valuation techniques and inputs used for fair value measurement of the Company’s Level 3 financial assets. The Company adopted the new guidance as of March 31, 2010, except for disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements, which are required for fiscal years beginning after December 15, 2010. The new guidance requires expanded disclosures only, and did not and is not expected to have a material effect on the Company’s financial position, results of operations and liquidity.

In September 2009, the FASB issued Update No. 2009-13, which updates the existing guidance regarding multiple-element revenue arrangements currently included under ASC 605-25. The revised guidance primarily provides two significant changes: 1) eliminates the need for objective and reliable evidence of the fair value for the undelivered element in order for a delivered item to be treated as a separate unit of accounting, and 2) eliminates the residual method to allocate the arrangement consideration. The guidance also expands the disclosure requirements for revenue recognition and will be effective for the first annual reporting period beginning on or after June 15, 2010, with early adoption permitted, provided that the revised guidance is retroactively applied to the beginning of the year of adoption. The Company is currently evaluating the effect of this update on its financial position, results of operations and liquidity.

INVESTMENTS

12 Months Ended

Dec. 31, 2010

INVESTMENTS

INVESTMENTS

2. INVESTMENTS

The following table summarizes the Company’s investments at:

December 31, 2010	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value		Continuous Unrealized Loss Position less than 12 Months		Continuous Unrealized Loss Position greater than 12 Months
Held to Maturity
Short-term:
U.S. treasuries	$	66,521	$	-	$	2	$	66,519	$	2	$	-
Certificates of deposit	7,004		-		-		7,004		-		-
Municipal securities	71,266		-		15		71,251		15		-
U.S. government agencies	19,688		-		8		19,680		8		-
Available-for-sale
Short-term:
Variable rate demand notes	56,107		-		-		56,107		-		-
Long-term:
Auction rate securities	27,790		-		2,408		25,382		-		2,408
Total	$	248,376	$	-	$	2,433	245,943		$	25	$	2,408
Trading
Short-term:
Auction rate securities							24,063
Long-term:
Auction rate securities							18,807
Total							$	288,813

December 31, 2009	Amortized Cost		Gross Unrealized Holding Gains		Gross Unrealized Holding Losses		Fair Value		Continuous Unrealized Loss Position less than 12 Months		Continuous Unrealized Loss Position greater than 12 Months
Held to Maturity
Short-term:
U.S. treasuries	$	14,998	$	-	$	-	$	14,998	$	-	$	-

Available-for-sale
Short-term:
Auction rate securities	3,651		-		162		3,489		-		162
Long-term:
Auction rate securities	88,334		-		7,498		80,836		-		7,498
Total	$	106,983	$	-	$	7,660	$	99,323	$	-	$	7,660

During the years ended December 31, 2010, 2009 and 2008, realized gains or losses recognized on the sale of investments were not significant.

All of the Company’s investments at December 31, 2010 in U.S. treasuries, certificates of deposit, municipal securities, U.S. government agency securities and variable rate demand notes (“VRDNs” see Note 3) carry investment grade or better credit ratings. The majority of the Company’s investments at December 31, 2010 in municipal, educational or other public body securities with an auction reset feature (“auction rate securities” see Note 3) also carry investment grade or better credit ratings.

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

	December 31, 2010				December 31, 2009

	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Less than 1 year:
U.S. Treasuries	$	66,521	$	66,519	$	14,998	$	14,998
Certificates of deposit	7,004		7,004		-		-
Municipal securities	71,266		71,251		-		-
U.S. government agencies	19,688		19,680		-		-
Auction rate securities	-		-		400		393
Due 1 - 10 years:
Variable rate demand notes	3,001		3,001		-		-
Auction rate securities	-		-		300		282
Due 11 - 20 years:
Variable rate demand notes	11,002		11,002		-		-
Auction rate securities	10,305		9,819		8,201		7,674
Due 21 - 30 years
Variable rate demand notes	30,426		30,426		-		-
Auction rate securities	48,779		46,857		58,925		53,570
Due 31 - 40 years
Variable rate demand notes	11,678		11,678		-		-
Auction rate securities	11,576		11,576		24,159		22,406
Total	$	291,246	$	288,813	$	106,983	$	99,323

- Definition

This item represents the entire disclosure related to Investments in Certain Debt and Equity Securities (and certain other trading assets) which include all debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values. Other trading assets include assets that are carried on the balance sheet at fair value and held for trading purposes. A debt security represents a creditor relationship with an enterprise that is in the form of a security. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities (and other trading assets).

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FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES

12 Months Ended

Dec. 31, 2010

FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES

FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES

3. FAIR VALUE OF CERTAIN FINANCIAL ASSETS AND LIABILITIES

ASC 820 provides a framework for measuring fair value and requires expanded disclosures regarding fair value measurements. 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. 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.

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 fair value of the Company’s financial assets recorded at fair value on a recurring basis, segregated among the appropriate levels within the fair value hierarchy at:

December 31, 2010	Level 1		Level 2		Level 3		Total
Cash	$	50,202	$	-	$	-	$	50,202
Money market funds	242,001		-		-		242,001
U.S. Treasuries	85,521		-		-		85,521
Certificates of deposit	-		40,010		-		40,010
Municipal securities	-		81,899		-		81,899
U.S. government agencies	-		19,688		-		19,688
Variable rate demand notes	-		56,107		-		56,107
Auction rate securities	-		-		68,252		68,252
Put option related to auction rate securities	-		-		3,768		3,768
Total	$	377,724	$	197,704	$	72,020	$	647,448

Amounts included in:
Cash and cash equivalents	$	311,202	$	43,640	$	-	$	354,842
Short-term investments	66,522		154,064		24,063		244,649
Investments	-		-		44,189		44,189
Prepaid expenses and other current assets	-		-		2,983		2,983
Other assets	-		-		785		785
Total	$	377,724	$	197,704	$	72,020	$	647,448

December 31, 2009	Level 1		Level 2		Level 3		Total
Cash	$	16,474	$	-	$	-	$	16,474
Money market funds	266,877		-		-		266,877
U.S. Treasuries	59,996		-		-		59,996
Auction rate securities	-		-		84,325		84,325
Total	$	343,347	$	-	$	84,325	$	427,672

Amounts included in:
Cash and cash equivalents	$	328,349	$	-	$	-	$	328,349
Short-term investments	14,998		-		3,489		18,487
Investments	-		-		80,836		80,836
Total	$	343,347	$	-	$	84,325	$	427,672

A large portion of the Company’s short-term investments are classified within Level 1 or Level 2 of the fair value hierarchy as they are valued using quoted market prices, market prices for similar securities, or alternative pricing sources with reasonable levels of price transparency. The types of instruments valued based on quoted market prices in active markets include the Company’s investment in money market funds, U.S. government notes and bills. The types of instruments valued based on other observable inputs include the Company’s certificates of deposit, municipal securities, U.S. government agency securities and VRDNs. Such instruments are classified within Level 2 of the fair value hierarchy. 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 generally, on a seven day settlement basis.

The following table provides a summary of changes in fair value of the Company’s Level 3 financial assets as of December 31, 2010:

	Level 3 Auction Rate Securities		Level 3 Put Option
Balance at December 31, 2009	$	84,325	$	-
Transfers to Level 3	-		-
Recognized (loss) gain included in income	(4,526)		3,768
Unrealized gain included in other comprehensive loss	5,253		-
Net Settlements	(16,800)		-
Balance at December 31, 2010	$	68,252	$	3,768

The Company’s Level 3 assets are comprised of auction rate securities. A large portion of these notes carry an investment grade or better credit rating and are additionally backed by various federal agencies and/or monoline insurance companies. The applicable interest rate is reset at pre-determined intervals, usually every 7 to 35 days. Liquidity for these auction rate securities was typically provided by an auction process which allowed holders to sell their notes at periodic auctions. During the years ended December 31, 2010, 2009 and 2008, the auctions for these auction rate securities failed. The auction failures have been attributable to inadequate buyers and/or buying demand and/or the lack of support from financial advisors and sponsors. In the event that there is a failed auction, the indenture governing the security in some cases requires the issuer to pay interest at a default rate that may be above market rates for similar instruments. The securities for which auctions have failed will continue to accrue and/or pay interest at their pre-determined rates and be auctioned every 7 to 35 days until their respective auction succeeds, the issuer calls the securities, they mature or the Company is able to sell the securities to third parties. As a result, the Company’s ability to liquidate and fully recover the carrying value of its auction rate securities in the near term may be limited. Consequently, these securities, except those that were redeemed at par after December 31, 2010 and December 31, 2009, or those that the Company intends to sell prior to December 31, 2011 as a result of the agreement described below, are classified as long-term investments in the accompanying consolidated balance sheets.

In March 2010, the Company entered into an agreement (the “ARS Agreement”), related to $54.2 million in par value auction rate securities (“ARS Securities”). Under the ARS Agreement, the Company has the right, but not the obligation, to sell these ARS Securities including all accrued but unpaid interest (the “Put Option”) as follows: (i) on or after March 22, 2011, up to $13.6 million aggregate par value; and (ii) semi-annual or annual installments thereafter with full sale rights available on or after March 22, 2013. The ARS Securities will continue to accrue interest until redeemed through the Put Option, or as determined by the auction process or the terms outlined in the prospectus of the respective ARS Securities when the auction process fails. During the year ended December 31, 2010, $7.4 million of par value ARS Securities were redeemed at par through normal market channels.

The ARS Agreement represents a firm commitment in accordance with ASC 815, which defines a firm commitment with an unrelated party, binding on both parties and usually legally enforceable, with the following characteristics: (i) the commitment specifies all significant terms, including the quantity to be exchanged, the fixed price, and the timing of the transaction; and (ii) the commitment includes a disincentive for nonperformance that is sufficiently large to make performance probable. The enforceability of the ARS Agreement results in a Put Option and should be recognized as a separate freestanding asset and is accounted for separately from the Company’s auction rate securities. The Put Option does not meet the definition of a derivative instrument under ASC 815. Therefore, the Company elected the fair value option under ASC 825-10 in accounting for the Put Option. As of December 31, 2010, the Company recorded $3.8 million as the fair market value of the Put Option ($3.0 million current portion included in prepaid expenses and other current assets and $0.8 million long-term portion included in other assets) in the consolidated balance sheet, with a corresponding gain of $3.8 million recorded in other income (expense) in the consolidated statement of income for the year ended December 31, 2010. The valuation of the Put Option utilized a mark-to-model approach which included estimates for interest rates, timing and amount of cash flows, adjusted for any bearer risk associated with the put issuer’s ability to repurchase the ARS Securities in installments as indicated above beginning March 22, 2011, and expected holding periods for the Put Option. These assumptions are typically volatile and subject to change as the underlying data sources and market conditions evolve. The Put Option will continue to be adjusted on each balance sheet date based on its then fair value, with changes in fair value recorded in earnings.

At December 31, 2010, the Company held auction rate securities with a face value of $79.6 million (amortized cost basis of $70.7 million). A Level 3 valuation was performed on the Company’s auction rate securities as of December 31, 2010 resulting in a fair value of $25.4 million for the Company’s available-for-sale auction rate securities (after a $7.4 million impairment) and $42.9 million for the Company’s trading auction rate securities, which are included in short- and long-term investments. This valuation utilized a mark-to-model approach which included estimates for interest rates, timing and amount of cash flows, credit and liquidity premiums, and expected holding periods for the auction rate securities. These assumptions are typically volatile and subject to change as the underlying data sources and market conditions evolve.

ASC 320-10-35 indicates that an other-than-temporary impairment must be recognized through earnings if an investor has the intent to sell the debt security or if it is more likely than not that the investor will be required to sell the debt security before recovery of its amortized cost basis. However, even if an investor does not expect to sell a debt security, it must compare the present value of cash flows expected to be collected from the security with the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis of the security, the entire amortized cost basis of the security will not be recovered (that is, a “Credit Loss” exists), and an other-than-temporary impairment shall be considered to have occurred. In the event of a Credit Loss and absent the intent or requirement to sell a debt security before recovery of its amortized cost, only the amount associated with the Credit Loss is recognized as a loss in the income statement. The amount of loss relating to other factors is recorded in accumulated other comprehensive income (loss). ASC 320-10-35 also requires additional disclosures regarding the calculation of the Credit Loss and the factors considered in reaching a conclusion that an investment is not other-than-temporarily impaired.

In connection with the ARS Agreement, during the first fiscal quarter of 2010, the Company reclassified $54.2 million of auction rate securities from available-for-sale to trading in accordance with ASC 320, as the Company has the ability and intent to exercise the related Put Option beginning March 22, 2011. The Company recognized a net loss through earnings on its trading securities of $3.9 million during the year ended December 31, 2010.

The Company determined that of the $7.4 million impairment of its available-for-sale auction rate securities at December 31, 2010, $2.4 million was deemed temporary and $5.0 million was deemed other-than-temporary. The other-than-temporary impairment was deemed Credit Loss related. The Company recorded a net charge through earnings of $0.6 million of other-than-temporary impairment that was deemed Credit Loss during the year ended December 31, 2010 ($3.9 million and $0.5 million had been previously deemed other-than-temporary Credit Loss related and were charged through earnings for the years ended December 31, 2009 and 2008, respectively). At December 31, 2010, $2.4 million of temporary impairment has been recorded, less a tax benefit of $1.0 million, as a component of accumulated other comprehensive income (loss). The factors evaluated to differentiate between temporary impairment and other-than-temporary impairment included the projected future cash flows, credit ratings actions, and assessment of the credit quality of the underlying collateral, as well as the other factors included in the valuation model for debt securities described above.

The net effect of (i) the acquisition of the Put Option during the first fiscal quarter of 2010; (ii) the revaluation of the Put Option as of December 31, 2010; (iii) the transfer from available-for-sale to trading of the ARS Securities during the first fiscal quarter of 2010; (iv) the revaluation of trading ARS Securities as of December 31, 2010; (v) the redemption at par of certain ARS Securities; (vi) a recognized gain resulting from the redemption at par of a previously other-than-temporary impaired security during the first fiscal quarter of 2010; and (vii) an increase in the other-than-temporary impairment of certain auction rate securities, resulted in losses of $0.8 million, included in other income (expense) for the year ended December 31, 2010. The net effect of an other-than-temporary impairment of certain auction rate securities, resulted in losses of $3.9 million and $0.5 million, included in other income (expense) for the years ended December 31, 2009 and 2008, respectively.

The Company holds additional auction rate securities that do not have a related put option. These auction rate securities continue to be classified as available-for-sale securities. The Company intends to retain its investment in the issuers until the earlier of the anticipated recovery in market value or maturity.

Based on the Company’s ability to access cash and cash equivalents and other short-term investments and based on the Company’s expected operating cash flows, the Company does not anticipate that the current lack of liquidity of these investments will have a material adverse effect on its liquidity or working capital. If uncertainties in the credit and capital markets continue, or uncertainties in the expected performance of the issuer of the Put Option arise, or there are rating downgrades on the auction rate securities held by the Company, the Company may be required to recognize additional impairments on these investments.

- Definition

This item represents certain of the disclosures concerning the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value.

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2010

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

9. COMMITMENTS AND CONTINGENCIES

Operating Leases – In October 2006, the Company entered into a lease agreement pursuant to which the Company leased 346,495 square feet of warehouse and distribution space located in Corona, California. This lease commitment provides for minimum rental payments for 120 months, commencing March 2007, excluding renewal options. The monthly rental payments are $167,586 at the commencement of the lease and increase over the lease term by 7.5% at the end of each 30 month period. In September 2007, the Company relocated its corporate offices to newly leased offices in Corona, California.

The Company also rents additional warehouse space on a short-term basis from time to time in the countries in which it operates.

Rent expense under operating leases was $3.8 million, $3.8 million and $3.5 million for the years ended December 31, 2010, 2009 and 2008, respectively.

Future minimum rental payments at December 31, 2010 under the operating leases referred to above are as follows:

Year ending December 31:

2011	$	3,366
2012	3,221
2013	3,039
2014	3,027
2015 and thereafter	6,535
	$	19,188

Purchase Commitments – The Company has purchase commitments aggregating approximately $27.4 million, which represent commitments made by the Company and its subsidiaries to various suppliers of raw materials for the manufacturing and packaging of its products. These obligations vary in terms.

The Company purchases various raw material items, including, but not limited to, flavors, ingredients, containers, milk and cream, from a limited number of resources. An interuption 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, 2010, 2009 and 2008 was $186.4 million, $168.6 million and $116.2 million, respectively.

Contractual obligations – The Company has contractual obligations aggregating approximately $57.1 million related primarily to sponsorships and other commitments, payable over within one to four years.

Licensing Agreements – The Company produces, sells and distributes Lost® Energy™ drinks under an exclusive license with Lost International LLC. The license agreement requires certain royalty payments to be made related to the sale of Lost® brand products. Royalty expense under this agreement for the years ended December 31, 2010, 2009 and 2008 was $0.1 million, $0.1 million, and $0.3 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, 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. Consequently, the Company does not believe the fair value of these guarantees is material to the Company’s consolidated financial statements.

Litigation – In September 2006, Christopher Chavez purporting to act on behalf of himself and a certain class of consumers filed an action in the Superior Court of the State of California, County of San Francisco, against the Company and its subsidiaries for unfair business practices, false advertising, violation of California Consumers Legal Remedies Act (“CLRA”) fraud, deceit and/or misrepresentation alleging that the Company misleadingly labels its Blue Sky beverages as manufactured and canned/bottled wholly in Santa Fe, New Mexico. Defendants removed this Superior Court action to the United States District Court for the Northern District of California (the “District Court”) under the Class Action Fairness Act and filed motions for dismissal or transfer. On June 11, 2007, the District Court granted the Company’s motion to dismiss Chavez’s complaint with prejudice. On June 23, 2009, the United States Court of Appeals for the Ninth Circuit (“Ninth Circuit”) filed a memorandum opinion reversing the decision of the District Court and remanded the case to the District Court for further proceedings. The Company filed a motion to dismiss the CLRA claims; the plaintiff filed a motion for a decision on a preemption issue; and the plaintiff filed a motion for class certification. The hearing for all three motions occurred on May 27, 2010. On June 18, 2010, the District Court entered an order certifying the class, ruled that there was no preemption by federal law, and denied the Company’s motion to dismiss. The class that the District Court certified initially consists of all persons who purchased any beverage bearing the Blue Sky mark or brand in the United States at any time between May 16, 2002 and June 30, 2006. The Company subsequently filed a petition with the Ninth Circuit seeking permission to file an appeal to reverse the decision to certify a class. On August 27, 2010, the Ninth Circuit denied the Company’s petition. On September 9, 2010, the District Court approved the form of the class notice and its distribution plan; and set an opt-out date of December 10, 2010 and a trial date for March, 2011. On September 28, 2010, the Company filed a Request for Leave to file a motion for reconsideration of the order certifying the class action. On November 11, 2010, the Company filed two dispositive motions: a motion to decertify the class and a motion for summary judgment. The plaintiff filed his motion for partial summary judgment. The District Court took all motions under submission without oral argument. The District Court judge assigned to the case, Judge Vaughn Walker, recently announced his retirement from the bench, with such retirement effective February, 2011. On January 31, 2011, Judge Jeffrey S. White was assigned to the case and subsequently vacated all pending hearing dates. A case management conference has been set for March 18, 2011 and the pending motions have been rescheduled to be heard on April 1, 2011. The Company believes it has meritorious defenses to all the allegations and plans a vigorous defense.

On August 28, 2008, the Company initiated an action against Oppenheimer Holdings Inc., Oppenheimer & Co. Inc., and Oppenheimer Asset Management Inc., in the United States District Court, Central District of California, for violations of federal securities laws and the Investment Advisers Act of 1940, as amended, arising out of the Company’s purchase of auction rate securities. The Company stipulated to arbitration before the Financial Industry Regulatory Authority (“FINRA”), where the matter is now proceeding and a hearing has been scheduled for June, 2011. The Company has voluntarily dismissed, without prejudice, its claims against Oppenheimer Asset Management, Inc. The FINRA panel denied Oppenheimer Holdings, Inc.’s motion to be dismissed from the proceeding.

In May 2009, Avraham Wellman, purporting to act on behalf of himself and a class of consumers in Canada, filed a putative class action in the Ontario Superior Court of Justice, in the City of Toronto, Ontario, Canada, against the Company and its former Canadian distributor, Pepsi-Cola Canada Ltd., as defendants. The plaintiff alleges that the defendants misleadingly packaged and labeled Monster Energy® products in Canada by not including sufficiently specific statements with respect to contra-indications and/or adverse reactions associated with the consumption of the energy drink products. The plaintiff’s claims against the defendants are for negligence, unjust enrichment, and making misleading/false representations in violation of the Competition Act (Canada), the Food and Drugs Act (Canada) and the Consumer Protection Act, 2002 (Ontario). The plaintiff claims general damages on behalf of the putative class in the amount of CDN $20 million, together with punitive damages of CDN$5 million, plus legal costs and interest. The plaintiff’s certification motion materials have not yet been filed. In accordance with class action practices in Ontario, the Company will not file an answer to the complaint until after the determination of the certification motion. The Company believes that the plaintiff’s complaint is without merit and plans a vigorous defense.

In addition to the above matters, the Company is subject to litigation from time to time in the normal course of business, including claims from terminated distributors. Although it is not possible to predict the outcome of such litigation, based on the facts known to the Company and after consultation with counsel, 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.

Securities Litigation — On September 11, 2008, a federal securities class action complaint styled Cunha v. Hansen Natural Corp., et al. was filed in the United States District Court for the Central District of California (the “District Court”). On September 17, 2008, a second federal securities class action complaint styled Brown v. Hansen Natural Corp., et al. was also filed in the District Court.

On July 14, 2009, the District Court entered an order consolidating the actions and appointing lead counsel and the Structural Ironworkers Local Union #1 Pension Fund as lead plaintiff. On August 28, 2009, lead plaintiff filed a Consolidated Complaint for Violations of Federal Securities Laws (the “Consolidated Class Action Complaint”). The Consolidated Class Action Complaint purported to be brought on behalf of a class of purchasers of the Company’s stock during the period November 9, 2006 through November 8, 2007 (the “Class Period”). It named as defendants the Company, Rodney C. Sacks, Hilton H. Schlosberg, and Thomas J. Kelly. Plaintiff principally alleged that, during the Class Period, the defendants made false and misleading statements relating to the Company’s distribution coordination agreements with Anheuser-Busch, Inc. (“AB”) and its sales of “Allied” energy drink lines, and engaged in sales of shares in the Company on the basis of material non-public information. Plaintiff also alleged that the Company’s financial statements for the second quarter of 2007 did not include certain promotional expenses. The Consolidated Class Action Complaint alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, and sought an unspecified amount of damages.

On November 16, 2009, the defendants filed their motion to dismiss the Consolidated Class Action Complaint pursuant to Federal Rules of Civil Procedure 12(b)(6) and 9(b), as well as the Private Securities Litigation Reform Act. On July 12, 2010, following a hearing, the District Court granted the defendants’ motion to dismiss the Consolidated Class Action Complaint, with leave to amend, on the grounds, among others, that it failed to specify which statements Plaintiff claimed were false or misleading, failed adequately to allege that certain statements were actionable or false or misleading, and failed adequately to demonstrate that defendants acted with scienter.

On August 27, 2010, Plaintiff filed a Consolidated Amended Class Action Complaint for Violations of Federal Securities Laws (the “Amended Class Action Complaint”). While similar in many respects to the Consolidated Class Action Complaint, the Amended Class Action Complaint drops certain of the allegations set forth in the Consolidated Class Action Complaint and makes certain new allegations, including that the Company engaged in “channel stuffing” during the Class Period that rendered false or misleading the Company’s reported sales results and certain other statements made by the defendants. In addition, it no longer names Thomas J. Kelly as a defendant. The Amended Class Action Complaint continues to allege violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, and seeks an unspecified amount of damages. Defendants filed a motion to dismiss the Amended Class Action Complaint on November 8, 2010. Plaintiff’s opposition to defendants’ motion was filed on January 14, 2011, and defendants’ reply brief was filed on February 11, 2011. A hearing on defendants’ motion to dismiss the Amended Class Action Complaint is currently scheduled for April 14, 2011.

Derivative Litigation — On October 15, 2008, a derivative complaint was filed in the United States District Court for the Central District of California (the “District Court”), styled Merckel v. Sacks, et al. On November 17, 2008, a second derivative complaint styled Dislevy v. Sacks, et al. was a

CONSOLIDATED STATEMENTS OF CASH FLOWS NON-CASH SUPPLEMENTAL DATA (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008
SUPPLEMENTAL DISCLOSURE OF NON-CASH ITEMS
Capital leases for the acquisition of promotional vehicles	$ 0.5	$ 0.8	$ 1.4
Accounts payable for equipment purchased	$ 0.2	$ 0.7	$ 1.5

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Dec. 31, 2010	Dec. 31, 2009
CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.005	$ 0.005
Common stock, shares authorized	120,000	120,000
Common stock, shares issued	98,731	97,285
Common stock, shares outstanding	88,980	88,159
Common stock in treasury, shares	9,751	9,126