Monster Beverage (MNST) 10-K risk factor changes: FY2019 vs FY2018

In addition to the other information in this [removed: report,] [added: Annual Report on Form 10-K, including Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and related notes,] you should carefully consider the following risks.

If any of the following risks actually [added: occur or continue to] occur, our business, [added: reputation,] financial condition and/or operating results could be materially adversely affected.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may also materially adversely affect our business, [added: reputation,] financial condition and/or operating results.

[removed: _The] [added: The] Company and TCCC have extensive commercial arrangements and, as a result, the Company’s future performance is substantially dependent on the success of its relationship with [removed: TCCC._][added: TCCC.]

We have transitioned [removed: certain] [added: all] third parties’ rights to distribute the Company’s products in [removed: most territories in] the U.S. to members of TCCC’s distribution network, which largely consists of independent bottlers/distributors.

[removed: In addition, if] [added: As] TCCC proceeds [removed: with the] [added: to] launch [removed: of such products, there can be no assurances that] [added: Coca-Cola Energy in additional territories,] we [removed: will not] [added: may] encounter difficulties in maintaining [removed: our current revenues,] [added: distributor attention,] market share or position in the energy drink category in such territories, which could adversely affect our business and operating results.

[removed: _We] [added: We] derive virtually all of our revenues from energy drinks, and competitive pressure in the energy drink category could adversely affect our business and operating [removed: results._][added: results.]

Virtually all of our sales are derived from our energy drinks, including our Monster Energy® brand energy [added: drinks, our Reign Total Body FuelTM energy] drinks and our Strategic [removed: Brand] [added: Brands] energy drinks [removed: acquired from TCCC in 2015.][added: (including our affordable brand energy drinks, principally Predator®).]

Domestically, our energy drinks compete directly with Red Bull, Rockstar, Amp, Venom, VPX Redline, Xenergy, [added: Xyience,] MiO Energy, Rip It, Starbucks Doubleshot, Starbucks Doubleshot Energy Plus Coffee, [added: Starbucks Tripleshot, Costa Coffee, Nescafe,] Rockstar Roasted, [removed: 5-Hour Energy Shots, Stacker 2,] VPX Bang, V8+ Energy, UPTIME, hi*ball, CELSIUS, [removed: C4] [added: C4, Quake, Adrenaline Shoc, Coca-Cola Energy, 5-Hour Energy Shots, Stacker 2,] and many other brands.

In addition, certain large companies, such as PepsiCo, market and/or distribute products in that market segment, such as Pepsi Max, [added: Gatorade Bolt 24,] Mountain [added: Dew, Mountain] Dew [added: Amp Game Fuel] and Mountain Dew Kickstart.

Internationally, our energy drinks compete with Red [removed: Bull,] [added: Bull (including non-carbonated Red Bull in China and Asia),] Rockstar, V-Energy, [removed: Lucozade] [added: Lucozade, Coca-Cola Energy] and numerous local and private-label brands that usually differ from country to country, such as HELL, [added: Amper,] Shock, Tiger, Boost, Speed, TNT, Shark, Hot 6, Shark Energy, Dragon, Score, Sting, Battery, Bullit, Flash Up, Black, Non-Stop, Bomba, Semtex, Vive 100, Dark Dog, [removed: Guaraná,] [added: Guarana,] M-150, Lipovitan, Bacchus, Volt, Bolt, Mr. Big, Boom, Raptor, Amp, Fusion, Hi-Tiger, [added: Eastroc Super Drink, Carabao, Power Horse, XL, Crazy Tiger, Effect, Missile, NOCCO, Adrenaline Rush, Real Gold, War Horse, BLU and a host of other international brands.]

Our Java Monster®, Espresso Monster® and Caffé Monster® product lines compete directly with Starbucks Frappuccino, Starbucks Doubleshot, Starbucks Doubleshot Energy Plus [removed: Coffee] [added: Coffee, Starbucks Tripleshot] and other Starbucks coffee drinks, [added: Costa Coffee, Nescafe, Douwe Egberts Coffee, Emmi CAFFÈ, Bang Keto Coffee,] Rockstar Roasted, Dunkin Donuts, Gold Peak Tea, Stok, High Brew, McCafé, hi*ball and International Delight.

Our Muscle Monster® product line competes directly with Muscle Milk, Core Power, Premier Protein, Kellogg’s Special K Protein, Bolthouse Farms Protein, EAS AdvantEDGE, EAS Myoplex, Gatorade G Series 03 [removed: Recover, 5-Hour] [added: Recover] and PowerBar.

Our Monster Hydro® [added: and Monster HydroSport Super Fuel®] product [removed: line competes] [added: lines compete] directly with Vitamin Water, Sparkling Ice, Bai, Propel, Vita Coco, [removed: Lucozade] [added: Lucozade, Powerade, Gatorade Bolt 24] and BODYARMOR.

[removed: _The] [added: The] Company, in several markets, owns multiple potentially competing brands in the energy drink [removed: category._][added: category, which could adversely impact our business and results of operations in those markets.]

[removed: In] [added: Our various Monster Energy® brand energy drinks compete with one another, and, in] several [removed: markets] [added: markets,] our Monster Energy® brand energy drinks and Strategic Brands compete with each other.

[removed: Although we continue to integrate the Strategic Brands with our broader energy drink portfolio, we] [added: We] may encounter difficulties managing different and potentially competing brands in such shared markets, which could adversely impact our business and results of operations.

[removed: _TCCC] [added: TCCC] is a significant shareholder of the Company and may have interests that are different from the Company’s other shareholders (including current shareholders of the [removed: Company)._][added: Company).]

As of February 20, [removed: 2019,] [added: 2020,] TCCC owned common shares of the Company representing approximately 19% of the total number of the Company’s outstanding common shares.

TCCC has also nominated [removed: two directors] [added: one director] to the Company’s board of directors.

Moreover, TCCC’s ownership of a significant amount of the Company’s outstanding common shares could result in downward pressure on the trading price of the Company’s common shares if TCCC were to sell a large portion of its shares [removed: (when permitted to sell)] or as a result of the perception that such a sale might occur.

[removed: _Changes] [added: Changes] in government regulation, or failure to comply with existing regulations, could adversely affect our business, financial condition and results of [removed: operations._][added: operations.]

[removed: Public health officials and health advocates are increasingly focused on the] public health consequences associated with obesity, especially as it affects children, and are seeking legislative change to reduce the consumption of sweetened beverages.

There also has been [removed: an] increased focus on caffeine content in [removed: beverages.][added: beverages, and we are seeing some attention to other ingredients in energy drinks.]

If a regulatory authority finds that a current or future product, its label, or a production run is not in compliance with any of these regulations, we may be fined, or [removed: such] [added: the] products [added: in question] may have to be recalled, [added: removed from the market,] reformulated and/or have the packaging changed, which could adversely affect our business, financial condition and results of operations.

[removed: _We] [added: We] cannot predict the effect of [added: possible] inquiries from and/or actions by attorneys general, other government [removed: agencies_ _and/or] [added: agencies and/or] quasi-government agencies into the production, advertising, marketing, promotion, labeling, ingredients, usage and/or sale of our energy drink [removed: products._][added: products.]

We are subject to the risks of investigations and/or enforcement actions by state attorneys general and/or other government and/or quasi-governmental agencies relating to the advertising, marketing, promotion, ingredients, usage and/or sale of our energy [removed: drinks.][added: drinks, and we are a party, from time to time, to various government and regulatory inquiries and/or proceedings.]

[removed: _Litigation] [added: Litigation] regarding our products, and related unfavorable media attention, could expose us to significant liabilities and reduce demand for our [removed: products._][added: products, thus negatively affecting our financial results.]

[removed: We] [added: In particular, we] have been and are currently named as a defendant in personal injury lawsuits which allege that consumption of our products has been responsible for wrongful deaths and/or injuries.

[removed: Several other] [added: Other] lawsuits have been filed against us claiming that certain statements made in our advertisements and/or on the labels of our products were false and/or misleading or otherwise not in compliance with food standards under local law, and/or that our products are not safe.

Putative class action lawsuits have also [removed: recently] been filed against certain of our competitors asserting that certain claims in their advertisements amount to false advertising.

Any of the foregoing matters or other litigation, the threat thereof, or unfavorable media attention arising from pending or threatened product-related litigation could consume significant financial and managerial resources and result in decreased demand for our products, significant monetary awards against [removed: us] [added: us, an injunction barring the sale of any of our products] and injury to our reputation.

[removed: _Criticism] [added: Criticism] of our energy drink products and/or criticism or a negative perception of energy drinks generally, could adversely affect [removed: us._][added: us.]

[removed: _Increased] [added: Increased] competition [added: in the beverage industry and changing retail landscape] could hurt our [removed: business._][added: business.]

The rapid growth in sales through e-commerce retailers, e-commerce websites, mobile commerce applications and subscription services, [added: and closures of physical retail operations,] may result in a shift away from physical retail operations to digital [removed: channels.][added: channels and a reduction in impulse purchases.]

[removed: _Our] [added: Our] inability to innovate successfully and to provide new cutting edge products could adversely affect our business and financial [removed: results._][added: results.]

[removed: _Uncertainty] [added: Uncertainty] in the financial markets and other adverse changes in general economic or political conditions in any of the major countries in which we do business could adversely affect our industry, business and results of [removed: operations._][added: operations.]

Unfavorable economic conditions and financial uncertainties in our major international [removed: markets, including uncertainties surrounding the United Kingdom’s impending withdrawal from the European Union, commonly referred to as “Brexit,” and increases in tariffs that may result,] [added: markets] and unstable political conditions, including civil unrest and governmental changes, in certain of our other international markets could undermine global consumer confidence and reduce consumers’ purchasing power, thereby reducing demand for our products.

[removed: _Changes] [added: Changes] in consumer [added: product and shopping] preferences may reduce demand for some of our [removed: products._][added: products.]

This may reduce demand for our [removed: non-diet] beverages, which could reduce our revenues and adversely affect our results of operations.

In October 2018, the Company and TCCC mutually agreed to submit to arbitration before the American Arbitration Association the issue of whether TCCC is permitted to manufacture, market, sell or distribute three energy drink products it developed.

On June 28, 2019, the arbitration tribunal issued a final award in favor of TCCC.

TCCC launched Coca-Cola Energy in Europe in 2019 and in the United States in 2020.

Our Reign Total Body FuelTM and Reign InfernoTM Thermogenic Fuel high performance energy drinks compete with VPX Bang, Adrenaline Shoc, C4, Quake, Rockstar XDURANCE and CELSIUS in the performance energy category.

The increasing number of competitive products and limited amount of shelf space in retail stores may adversely impact our ability to gain or maintain our share of sales in the marketplace.

In addition, certain actions of our competitors, including unsubstantiated and/or misleading claims, false advertising claims and tortious interference in our business, as well as competitors selling misbranded products, could impact our sales.

For instance, on January 1, 2020, a reform to a Mexican excise tax went into effect that expanded the definition of an “energy drink” subject to this tax to include products with any amount of caffeine (the prior version of the tax required a threshold of 20 milligrams of caffeine per 100 millimeters for the tax to be applicable) and “taurine or glucuronolactone or thiamine and/or any other substance that produces similar stimulating effects.” Public health officials and health advocates are increasingly focused on the

As we build our e-commerce capabilities, we may not be able to develop and maintain successful relationships with existing and new e-commerce retailers without experiencing a deterioration of our relationships with key customers operating physical retail channels.

Further, the ability of consumers to compare prices on a real-time basis using digital technology puts additional pressure on us to maintain competitive prices.

Sales in gas chains may also be affected by improvements in fuel efficiency and increased consumer preferences for electric or alternative fuel-powered vehicles, which may result in fewer trips by consumers to gas stations and a corresponding reduction in purchases by consumers in convenience gas retailers.

If we are unable to successfully adapt to the rapidly changing retail landscape, our share of sales, volume growth and overall financial results could be negatively affected.

Included in the foregoing are uncertainties surrounding the United Kingdom’s withdrawal from the European Union on January 31, 2020 (commonly referred to as “Brexit”) and any resulting increases in tariffs, importation restrictions, out of stocks, volatility in currency exchange rates, including the valuation of the euro and the British pound in particular, changes in the laws and regulations applied in the United Kingdom or impacts on economic and market conditions in the United Kingdom, the European Union and its member states and elsewhere.

There is increasing awareness of and concern for health, wellness and nutrition considerations, including concerns regarding caloric intake associated with sugar-sweetened beverages and the perceived undesirability of artificial ingredients.

The beverages we currently

Materials and/or personnel may need to mobilize to other locations.

Our headquarters and a large part of our operations are located in California, a state at greater risk of earthquakes and wildfires.

Some of the raw materials we use, including certain sizes of cans, are available from limited suppliers, and a regional catastrophic event impacting such suppliers could adversely impact our operations.

_Our business and operations, and the operations of our suppliers, may be adversely affected by the recent coronavirus (or COVID-19) outbreak._

We and our suppliers currently globally source certain ingredients for our products from third-party manufacturers in Wuhan (Hubei Province) and other parts of China, manufacture finished goods through third-party bottlers and co-packers

in China and have employees in China.

The recent outbreak of respiratory illness caused by the coronavirus (or COVID-19), and other adverse public health developments, could adversely affect our business and cause disruptions due to the closure or suspension of activities at such third-party manufacturers as well as at our co-packing facilities and our China office.

Certain aspects of our operations currently in China may need to be moved, even temporarily, to other locations.

In addition, the outbreak, together with any accompanying special government measures, including general movement restrictions, travel restrictions and business closures imposed to slow its spread, could adversely impact the growth of our business in China and affect demand for our products, negatively impacting our results of operations and financial condition.

term capacity may not be available for such products either at commercially reasonable rates and/or costs and/or within a reasonably short time period, if at all.

As TCCC proceeds to launch Coca-Cola Energy in additional territories, we may encounter difficulties in maintaining distributor attention, market share or position in the energy drink category in such territories, which could adversely affect our business and operating results.

Our third-party flavor suppliers

These changes in the prices we pay

In 2019, Vital Pharmaceuticals, Inc. (“VPX”) announced its intention to launch its own line of “Reign”-branded energy drinks in 16-ounce cans to be sold in convenience stores.

We filed an expedited motion for a preliminary injunction to stop this product launch and to prevent this infringement of our trademarks, and in January 2020 the magistrate judge issued a report and recommendation that the injunction be granted in our favor.

A number of proceedings are currently ongoing to adjudicate claims, including claims for false advertising and trademark infringement, brought by the Company against VPX and by VPX against the Company.

Certain proceedings could result in an injunction barring us from selling “Reign Total Body Fuel” branded energy drinks and/or require changes to be made to our current trade dress.

Consumer demand for our products could diminish significantly if we, our employees, bottlers/distributors, suppliers or business partners fail to preserve the quality of our products, act or are perceived to act in an unethical, illegal, discriminatory, unequal or socially irresponsible manner, including with respect to the sourcing, content or sale of our products, service and treatment of our customers, or the use of customer data.

Negative postings or comments on social media or networking websites about the Company or any one of our brands, even if inaccurate or malicious, could generate adverse publicity that could damage the reputation of our brands or the Company.

Business incidents, whether isolated or recurring and whether originating from us, our bottlers/distributors, suppliers or business partners, that erode consumer trust can significantly reduce brand value or potentially trigger boycotts of our products and can have a negative impact on our reputation and financial results.

The impact of such incidents may be exacerbated if they receive considerable publicity, including rapidly through social or digital media (including for malicious reasons) or result in litigation.

These public policy debates can occasionally be the subject of backlash from advocacy groups

We have made a number of commitments to respect human rights, including the policies and initiatives described in our California Transparency in Supply Chains Act & United Kingdom Modern Slavery Act statement, available on our website at www.monsterbevcorp.com/sr-transparency.php.

We, our bottlers and our

contract packers use a number of key ingredients in the manufacture of our beverage products that are derived from agricultural commodities such as sugar, coffee, tea and cocoa.

Increased demand for food products and decreased agricultural productivity in certain regions of the world as a result of changing weather patterns and other factors may limit the availability or increase the cost of such agricultural commodities and could impact the food security of communities around the world.

In any such case, our operating results could suffer and the value of the Company’s common shares could be adversely affected.

On October 31, 2018, the Company and TCCC mutually agreed to submit an issue to the American Arbitration Association (“AAA”) in order to obtain clarification of an exception to a provision under various agreements preventing TCCC from competing in the energy drink category.

TCCC has developed three energy products that it believes it may market under such exception, relating to the Coca-Cola brand.

We expect a decision will be reached during the second quarter of 2019.

In addition, TCCC has indicated that it has suspended the proposed launch of such products until April 2019.

While we believe that the exception does not apply to this situation, there can be no assurances that the arbitration will resolve in our favor.

As the relief sought is limited, no reasonable possible range of losses, if any, can be estimated.

Our Monster Energy® brand energy drinks and Strategic Brands represented 91.7% and 7.5% of net sales, respectively, for the year ended December 31, 2018.

Eastroc Super Drink, Carabao, Power Horse, XL, Crazy Tiger, Effect, Missile, NOCCO, Adrenaline Rush and a host of other international brands.

The Strategic Brands acquired from TCCC in 2015 represented 7.5% of consolidated net sales for the year ended December 31, 2018.

The number of directors that TCCC is entitled to nominate is subject to reduction in certain circumstances.

In March 2018, we entered into an agreement extending TCCC’s right to nominate two directors to serve until June 2019.

There is increasing awareness of and concern for the health consequences of obesity.

packages may be limited to a few years before consumers’ preferences change.

TCCC, through the TCCC Subsidiaries, accounted for approximately 3%, 18% and 41% of our net sales for the years ended December 31, 2018, 2017 and 2016, respectively.

In addition, some of these raw materials, including certain sizes of cans, are available from limited suppliers.

commodities for a reasonable period.

We have made a number of commitments to respect human rights, including through our Human Rights Policy, Supplier Code of Conduct, Code of Business Conduct and Ethics and our grievance procedures.

On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Reform Act”) which imposes broad and complex changes to the U.S. tax code.

We completed our 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.

_Our cash flow may not be sufficient to fund our long-term goals._

Although we currently have sufficient cash to support our planned operating activities in the current year, we may be unable to generate sufficient cash flow to support our capital expenditure plans and general operating activities in the future.

In addition, the terms and/or availability of our credit facility and/or the activities of our debtors and/or creditors could affect the financing of our future growth.

_Litigation, legal proceedings, arbitrations, government and regulatory inquiries and/or proceedings could expose us to significant liabilities and thus negatively affect our financial results._

Material legal proceedings are described more fully in, “Part I, Item 3 – Legal Proceedings” and in “Part II, Item 8, Note 11” to our consolidated financial statements contained in this Form 10-K.

[removed: ·] [added: | | ● |] _Our Business_ – a general description of our business, the value drivers of our business, and opportunities and risks facing our Company, stock repurchases, acquisitions and divestitures; [added: |]

[removed: ·] [added: | | ● |] _Results of Operations_ – an analysis of our consolidated results of operations for the three years presented in our financial statements; [added: |]

[removed: ·] [added: | | ● |] _Sales_ – details of our sales measured on a quarterly basis in both dollars and cases; [added: |]

[removed: ·] [added: | | ● |] _Inflation_ – information about the impact that inflation may or may not have on our results; [added: |]

[removed: ·] [added: | | ● |] _Liquidity and Capital Resources_ – an analysis of our cash flows, sources and uses of cash and contractual obligations; [added: |]

[removed: ·] [added: | | ● |] _Accounting Policies and Pronouncements_ – a discussion of accounting policies that require critical judgments and estimates including newly issued accounting pronouncements; [added: |]

[removed: ·] [added: | | ● |] _Forward-Looking Statements_ – cautionary information about forward-looking statements and a description of certain risks and uncertainties that could cause our actual results to differ materially from the Company’s historical results or our current expectations or projections; and [added: |]

[removed: ·] [added: | | ● |] _Market Risks_ – information about market risks and risk management. [added: (See “Forward-Looking Statements” and “Part II, Item 7A – Quantitative and Qualitative Disclosures About Market Risks”). |]

[removed: Our Business][added: Our Business]

[removed: _Overview_][added: Overview]

| [removed: ·] [added: ●] Monster Energy® [removed: ·] [added: ●] Monster Energy Ultra® [removed: ·] [added: ●] Monster Rehab® [removed: ·] [added: ●] Monster MAXX® [removed: ·] [added: ●] Java Monster® [removed: ·] [added: ●] Muscle Monster® [removed: ·] [added: ●] Espresso Monster® [removed: ·] [added: ●] Punch Monster® [removed: ·] [added: ●] Juice Monster® [removed: ·] [added: ●] Monster Hydro® [removed: ·] [added: ● Monster HydroSport Super Fuel® ● Monster Dragon Tea® ●] Caffé Monster® [removed: · Predator® · Live+] [added: ● Reign Total Body FuelTM ● Reign InfernoTM Thermogenic Fuel] | | [removed: ·] [added: ●] NOS® [removed: ·] [added: ●] Full Throttle® [removed: ·] [added: ●] Burn® [removed: ·] [added: ●] Mother® [removed: ·] [added: ●] Nalu® [removed: ·] [added: ●] Ultra Energy® [removed: ·] [added: ●] Play® and Power [removed: Play(stylized)® ·] [added: Play® (stylized) ●] Relentless® [removed: ·] [added: ●] BPM® [removed: ·] [added: ●] BU® [removed: ·] [added: ●] Gladiator® [removed: ·] [added: ●] Samurai® [removed: · Mutant®] [added: ● Live+® ● Predator®] |

Our net sales of [removed: $3.81] [added: $4.20] billion for the year ended December 31, [removed: 2018] [added: 2019] represented record annual net sales.

Net sales of our Monster Energy® [removed: brand energy drinks] [added: Drinks segment] were [removed: $3.49] [added: $3.90] billion for the year ended December 31, [removed: 2018.][added: 2019.]

Net sales of our Strategic Brands [added: segment] were [removed: $285.8] [added: $274.9] million for the year ended December 31, [removed: 2018.][added: 2019.]

[removed: Net] sales for the [added: Strategic Brands segment for the] year ended December 31, 2018 were negatively impacted by approximately [removed: $42.2] [added: $24.9] million as a result of the adoption of [removed: Accounting Standards Codification (“ASC”)] [added: ASC] 606.

Net changes in foreign currency exchange rates had [removed: a favorable] [added: an unfavorable] impact on net sales in the Monster Energy® Drinks segment of approximately [removed: $14.6] [added: $59.6] million for the year ended December 31, [removed: 2018.][added: 2019.]

Net changes in foreign currency exchange rates had [removed: a favorable] [added: an unfavorable] impact on net sales in the Strategic Brands segment of approximately [removed: $0.2] [added: $9.6] million for the year ended December 31, [removed: 2018.][added: 2019.]

Gross sales to customers outside the United States amounted to [removed: $1.36] [added: $1.62] billion, [removed: $1.09] [added: $1.36] billion and [removed: $888.7 million] [added: $1.09 billion] for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively.

Such sales were approximately [removed: 31%, 28%] [added: 33%, 31%] and [removed: 25%] [added: 28%] of gross sales for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively.

Our customers are primarily full service beverage bottlers/distributors, retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, foodservice [removed: customers and the military.][added: customers, value stores, e-commerce]

Percentages of our gross sales to our various customer types for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016] [added: 2017] are reflected below.

| [added: ​] | | [removed: 2018] [added: 2019] | | [removed: 2017] | [added: 2018] | [removed: 2016] | [added: | 2017 | | | 2016 | | | 2015 | |]

| U.S. full service bottlers/distributors | | [removed: 61%] [added: 58%] | [added: ​] | [removed: 63%] [added: 61%] | [added: ​] | [removed: 65%] [added: 63%] |

| International full service bottlers/distributors | | [removed: 31%] [added: 33%] | [added: ​] | [removed: 28%] [added: 31%] | [added: ​] | [removed: 25%] [added: 28%] |

| Club [removed: stores and] [added: stores,] mass merchandisers [added: and e-commerce retailers] | | [removed: 6%] [added: 7%] | [added: ​] | [removed: 7%] [added: 6%] | [added: ​] | [removed: 8%] [added: 7%] |

| Retail grocery, specialty chains and wholesalers | | 1% | [added: ​] | 1% | [added: ​] | 1% |

| Other | | 1% | [added: ​] | 1% | [added: ​] | 1% |

Our customers include Coca-Cola [removed: Refreshments USA, Inc., Coca-Cola Refreshments] Canada [removed: Company (Coca-Cola Canada] Bottling [removed: Limited from September 28, 2018),] [added: Limited,] Coca-Cola [removed: Bottling Company, CCBCC Operations, LLC, United] [added: Consolidated, Inc., Coca-Cola] Bottling [removed: Contracts Company, LLC,] [added: Company United, Inc.,] Reyes Coca-Cola Bottling, [added: LLC,] Great Lakes Coca-Cola [removed: Bottling,] [added: Distribution, LLC,] Coca-Cola Southwest Beverages LLC, [added: The] Coca-Cola [added: Bottling Company] of Northern New England, [added: Inc.,] Swire [removed: Coca-Cola, USA,] [added: Pacific Holdings, Inc. (USA),] Liberty Coca-Cola Beverages, [added: LLC,] Coca-Cola European Partners, Coca-Cola Hellenic, Coca-Cola FEMSA, Coca-Cola Amatil, Swire Coca-Cola (China), COFCO Coca-Cola, Coca-Cola Beverages Africa, Coca-Cola İçecek and certain other TCCC network bottlers, Asahi Soft Drinks, Co., Ltd., Kalil Bottling [removed: Group,] [added: Group (until March 5, 2019), Big Geyser, Inc. (until April 5, 2019),] Wal-Mart, Inc. (including Sam’s [removed: Club),] [added: Club) and] Costco Wholesale [removed: Corporation and Big Geyser, Inc. A decision by any large customer to decrease amounts purchased from us or to cease carrying our products could have a material negative effect on our financial condition and consolidated results of operations.][added: Corporation.]

TCCC, through [removed: certain consolidated subsidiaries (the “TCCC Subsidiaries”),] [added: the TCCC Subsidiaries,] accounted for approximately [removed: 3%, 18%] [added: 2%, 3%] and [removed: 41%] [added: 18%] of our net sales for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively.

As part of TCCC’s North America [removed: Refranchising initiative (the “North America Refranchising”),] [added: Refranchising,] the territories of certain TCCC Subsidiaries have been transitioned to certain independent TCCC bottlers/distributors and/or TCCC Related Parties.

Accordingly, our percentage of net sales to the TCCC Subsidiaries significantly decreased for the [removed: year] [added: years] ended December 31, [removed: 2018.][added: 2019, 2018 and 2017.]

[removed: CCBCC Operations, LLC] [added: Coca-Cola Consolidated, Inc.] accounted for approximately [removed: 13%,] 13% [removed: and 9%] of our net sales for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016, respectively.][added: 2017.]

Reyes Coca-Cola [removed: Bottling] [added: Bottling, LLC] accounted for approximately [removed: 12%, 6%] [added: 11%, 12%] and [removed: 2%] [added: 6%] of the Company’s net sales for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively.

Coca-Cola European Partners accounted for approximately 10%, [removed: 9%] [added: 10%] and 9% of the Company’s net sales for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] respectively.

[removed: _Value] [added: Value] Drivers of our [removed: Business_][added: Business]

[removed: ·] [added: | | ● |] _International Growth_ – The introduction, development and sustained profitability of our Monster Energy® brand internationally remains a key value driver for our corporate growth. [added: One or more of our products are distributed in approximately 153 countries and territories worldwide. |]

[added: | | ● | _Profitable Growth_ –] We [added: believe “functional” value-added brands supported by marketing and innovation and targeted to a diverse consumer base, drive profitable growth. We continue to broaden our family of products to provide more alternatives to consumers and launched Reign Total Body FuelTM high performance energy drinks in the first quarter of 2019. We] are focused on increasing the profit margins for both our Monster Energy® Drinks segment and our Strategic Brands segment, and believe that tailored branding, packaging, pricing and distribution channel strategies help achieve profitable growth. [added: We are implementing these strategies with a view to continuing profitable growth. |]

[removed: ·] [added: | | ● |] _Cost Management_ – The principal focus of cost management will continue to be on reducing input procurement and production costs on a per-case basis, including raw material costs and co-packing fees, as well as reducing freight costs by securing additional co-packing facilities strategically localized. [added: Another key area of focus is to decrease promotional allowances, selling and general and administrative costs, including sponsorships, sampling, promotional and marketing expenses, as a percentage of net sales. |]

[added: | | ● | _Efficient Capital Structure_ – Our capital structure is designed to optimize our working capital in order to finance expansion, both domestically and internationally.] We believe that with our strong capital position, our ability to raise funds, if necessary, at a relatively low effective cost of borrowings, provides a competitive advantage. [added: The reduction of days outstanding for accounts receivable and inventory days on hand will remain an area of focus. |]

These measurements will continue to be a key management focus in [removed: 2019] [added: 2020] and beyond (See “Part II, Item 7 – Results of Operations – Results of Operations for the Year Ended December 31, [removed: 2018,] [added: 2019,] Compared to the Year Ended December 31, [removed: 2017”).][added: 2018”).]

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Net sales for the year ended December 31, 2019 were positively impacted by approximately $101.9 million as a result of a price increase effective from November 1, 2018 in the United States (“the U.S. Price Increase”) and effective from February 1, 2019 in Canada (the “Canada Price Increase”), on certain of our Monster Energy® brand energy drinks.

Net changes in foreign currency exchange rates had an unfavorable impact on net sales of approximately $69.2 million for the year ended December 31, 2019.

The vast majority of our net sales are derived from our Monster Energy® Drinks segment.

Our Monster Energy® Drinks segment represented 92.9% and 91.9% of our net sales for the years ended December 31, 2019 and 2018, respectively.

Our Strategic Brands segment represented 6.5% and 7.5% of our net sales for the year ended December 31, 2019 and 2018, respectively.

Our Other segment represented 0.5% and 0.6% of our net sales for the years ended December 31, 2019 and 2018, respectively.

retailers and the military.

| ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| ​ | | 2019 | | 2018 | | 2017 |

A decision by any large customer to decrease amounts purchased from us or to cease carrying our products could have a material negative effect on our financial condition and consolidated results of operations.

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certain product labeling disclosures and/or warnings, impose taxes, limit product sizes or impose age restrictions for the sale of energy drinks.

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| | ● | the impact of TCCC’s bottlers/distributors distributing Coca-Cola brand energy drinks; |

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(See “Forward-Looking Statements” and “Part II, Item 7A – Qualitative and Quantitative Disclosures About Market Risks”).

Under ASC 606, commissions paid to TCCC, based on sales to certain of the Company’s TCCC bottlers/distributors that TCCC consolidates, or to the TCCC Related Parties, are included as a reduction to net sales.

Prior to January 1, 2018, commissions based on sales to the TCCC Related Parties, were included in operating expenses.

One or more of our products are distributed in approximately 155 countries and territories worldwide.

· _Profitable Growth_ – We believe “functional” value-added brands supported by marketing and innovation and targeted to a diverse consumer base, drive profitable growth.

We continue to broaden our family of products to provide more alternatives to consumers.

We are implementing these strategies with a view to continuing profitable growth.

Another key area of focus is to decrease promotional allowances, selling and general and administrative costs, including sponsorships, sampling, promotional and marketing expenses, as a percentage of net sales.

· _Efficient Capital Structure_ – Our capital structure is designed to optimize our working capital in order to finance expansion, both domestically and internationally.

The reduction of accounts receivable and inventory days on hand will remain an area of focus.

· the relationship risks associated with the arbitration with TCCC;

· the outcome of our arbitration proceedings with TCCC, including TCCC developing and distributing additional energy products;

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_2_ _Net sales were negatively impacted by approximately $42.2 million for the year ended December 31, 2018 as a result of the adoption of ASC 606._

_4_ _Without the adoption of ASC 606, an additional $42.2 million of commissions would have been included in operating expenses for the year ended December 31, 2018 (such commissions are included as a reduction to net sales)._

The increase in net sales of our Monster Energy® brand energy drinks represented approximately $287.4 million of the overall increase in net sales.

Net sales of our AFF Third-Party Products were $21.6 million for the year ended December 31, 2017, an increase of $4.6 million, or 27.0% higher than net sales of $17.0 million (effectively from April 1, 2016 to December 31, 2016) for the year ended December 31, 2016.

No other individual product line contributed either a material increase or decrease to net sales for the year ended December 31, 2017.

The lower average net sales price per case was primarily attributable to the changes in geographic sales mix.

The decrease in gross profit as a percentage of net sales was primarily attributable to geographical sales mix (our foreign operations generally have lower gross profit margins) and to certain increases in other costs, which were partially offset by raw material cost savings from the AFF Transaction and changes in domestic product sales mix.

The decrease in the effective tax rate was primarily due to the increase in profits earned by foreign subsidiaries in lower tax jurisdictions relative to the United States as well as to the increase in equity compensation deductions, due in part to the increase in the related excess tax benefits recorded in net income.

The decrease in the effective tax rate was partially offset by the recognition of $39.8 million of tax expense related to the revaluation of the U.S. net deferred tax asset at December 31, 2017, from 35% to the newly enacted U.S. corporate income tax rate of 21% due to the Tax Reform Act enacted on December 22, 2017.

The increase in net income was primarily due to the $195.7 million increase in gross profit.

Gross sales of our Monster Energy® brand energy drinks increased partially due to increased sales by volume as a result of increased domestic and international consumer demand.

Gross sales of our AFF Third-Party Products were $22.9 million for the year ended December 31, 2018, an increase of $1.3 million, or 6.1% higher than gross sales of $21.6 million for the year ended December 31, 2017.

The increase in gross sales of our Monster Energy® brand energy drinks represented approximately $345.1 million of the overall increase in gross sales.

Gross sales of our Strategic Brands were $318.5 million for the year ended December 31, 2017, an increase of $23.8 million, or 8.1% higher than gross sales of $294.6 million for the year ended December 31, 2016.

Gross sales of our AFF Third-Party Products were $21.6 million for the year ended December 31, 2017, an increase of $4.4 million, or 25.7% higher than gross sales of $17.2 million for the year ended December 31, 2016.

No other individual product line contributed either a material increase or decrease to gross sales for the year ended December 31, 2017.

Sales

| Unit Case Volume / Sales (in Thousands) | | | | | | | | | | | | | | | |

| | | 2018 | | | 2017 | | | 2016 | | | 2015 | | | 2014 | |

| Net sales | | $ | 3,807,183 | | $ | 3,369,045 | | $ | 3,049,393 | | $ | 2,722,564 | | $ | 2,464,867 |

_2__Without the adoption of ASC 606, the overall average net sales per case increased to $9.31 for year ended December 31, 2018, as compared to average net sales per case of $9.30 for the year ended December 31, 2017._

accrued compensation and a $4.7 million decrease in distributor receivables.

We do not currently intend, nor do we foresee a need, to repatriate undistributed earnings of our foreign subsidiaries, other than to repay certain intercompany debt owed to our U.S. operations.

| Contractual Obligations¹ | | $ | 190,186 | | $ | 99,004 | | $ | 75,149 | | $ | 16,033 | | $ | \- |

| Capital Leases | | 836 | | | 836 | | | \- | | | \- | | | \- | |

| Operating Leases | | 27,968 | | | 3,954 | | | 5,359 | | | 3,795 | | | 14,860 | |

Our gross sales to customers outside of the United States were approximately [removed: 31%] [added: 33%] and [removed: 28%] [added: 31%] of consolidated gross sales for the years ended December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] respectively.

[removed: During the year] ended December 31, [removed: 2018,] [added: 2019,] we 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 us as of December 31, [removed: 2018] [added: 2019] have terms of three months or less.

Therefore, gains and losses on our foreign currency exchange contracts are recognized in other [removed: expense,] [added: income,] net, in the consolidated statements of income, and are largely offset by the changes in the fair value of the underlying economically hedged item.

We do not consider the potential loss resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates as of December 31, [removed: 2018] [added: 2019] to be significant.

As of December 31, [removed: 2018,] [added: 2019,] we had [removed: $637.5] [added: $798.0] million in cash and cash equivalents and [removed: $320.7] [added: $546.0] million in short-term [added: and long-term] investments including certificates of deposit, commercial paper, U.S. government agency securities, U.S. treasuries, variable rate demand notes and municipal securities (which may have an auction reset feature).

During the year

[removed: Overview][added: Overview]

| [removed: ·] [added: ●] Monster Energy® [removed: ·] [added: ●] Monster Energy Ultra® [removed: ·] [added: ●] Monster Rehab® [removed: ·] [added: ●] Monster MAXX® [removed: ·] [added: ●] Java Monster® [removed: ·] [added: ●] Muscle Monster® [removed: ·] [added: ●] Espresso Monster® [removed: ·] [added: ●] Punch Monster® [removed: ·] [added: ●] Juice Monster® [removed: ·] [added: ●] Monster Hydro® [removed: ·] [added: ● Monster HydroSport Super Fuel® ● Monster Dragon Tea® ●] Caffé Monster® [removed: · Predator® · Live+] [added: ● Reign Total Body FuelTM ● Reign InfernoTM Thermogenic Fuel] | | [removed: ·] [added: ●] NOS® [removed: ·] [added: ●] Full Throttle® [removed: ·] [added: ●] Burn® [removed: ·] [added: ●] Mother® [removed: ·] [added: ●] Nalu® [removed: ·] [added: ●] Ultra Energy® [removed: ·] [added: ●] Play® and Power [removed: Play(stylized)® ·] [added: Play® (stylized) ●] Relentless® [removed: ·] [added: ●] BPM® [removed: ·] [added: ●] BU® [removed: ·] [added: ●] Gladiator® [removed: ·] [added: ●] Samurai® [removed: · Mutant®] [added: ● Live+® ● Predator®] |

[removed: Industry Overview][added: Industry Overview]

According to Beverage Marketing Corporation, domestic U.S. wholesale sales in [removed: 2018] [added: 2019] for the “alternative” beverage category of the market are estimated at approximately [removed: $55.5] [added: $58.6] billion, representing an increase of approximately [removed: 6.7%] [added: 5.7%] over estimated domestic U.S. wholesale sales in [removed: 2017] [added: 2018] of approximately [removed: $52.0] [added: $55.5] billion.

[removed: Reportable Segments][added: Reportable Segments]

We have three operating and reportable [removed: segments:] [added: segments;] (i) Monster Energy® Drinks segment (“Monster Energy® Drinks”), which is [added: primarily] comprised of our Monster Energy® [added: drinks and Reign Total Body FuelTM high performance energy] drinks, (ii) Strategic Brands segment (“Strategic Brands”), which is comprised primarily of the various energy drink brands acquired from The Coca-Cola Company (“TCCC”) in [removed: 2015] [added: 2015,] as well as our [removed: Predator®] [added: affordable] energy [removed: drinks] [added: brands,] and (iii) Other segment (“Other”), which is comprised of certain products sold by American Fruits and [removed: Flavors] [added: Flavors,] LLC [removed: (“AFF”) (a] [added: (“AFF”), a] wholly-owned [removed: subsidiary of the Company)] [added: subsidiary,] to independent third-party customers [removed: (“AFF] [added: (the “AFF] Third-Party Products”).

In some cases, we sell directly to retail grocery and specialty chains, wholesalers, club stores, mass merchandisers, convenience chains, drug stores, foodservice [removed: customers] [added: customers, value stores, e-commerce retailers] and the military.

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 [removed: stores] [added: stores, value stores, e-commerce retailers] and the military.

[removed: Corporate History][added: Corporate History]

In 2015, we acquired [removed: the Strategic Brands] [added: various energy brands] from TCCC and disposed of our non-energy drink business.

[removed: 2018] [added: 2019] Product [removed: Introductions][added: Introductions]

During [removed: 2018,] [added: 2019,] we continued to expand our existing portfolio of drinks and further develop our distribution markets.

During [removed: 2018,] [added: 2019,] we introduced the following products:

[removed: · Caffé] [added: | | ● | Espresso] Monster® Salted Caramel [added: |]

[removed: ·] [added: | | ● |] Java Monster® Swiss Chocolate [added: (U.S. national launch) |]

[removed: ·] [added: | | ● |] Monster MAXX® [removed: Eclipse][added: Mango Matic |]

[removed: ·] [added: | | ● |] Monster MAXX® [removed: Solaris][added: Rad Red |]

[removed: ·] [added: | | ● |] Monster [removed: Rehab® White] Dragon [added: Tea® Green] Tea [removed: + Energy][added: |]

[removed: ·] [added: | | ● | Monster Energy] Ultra [removed: Energy® Mango][added: Paradise® |]

Those products or product lines discontinued in [removed: 2018,] [added: 2019,] either individually or in aggregate, did not have a material adverse impact on our financial position, results of operations or liquidity.

[removed: Products] [added: Products] – Monster Energy® Drinks [removed: Segment][added: Segment]

Our Monster Energy® drinks contain vitamins, minerals, nutrients, herbs and other [removed: dietary] ingredients (collectively, [removed: “dietary] [added: “supplement] ingredients”) and are marketed through our full service distributor network.

We offer the following energy drinks under the Monster Energy® drink product line: Monster Energy®, Lo-Carb Monster Energy®, Monster Assault®, Monster Energy® Fury®, Juice Monster® Khaos®, Juice Monster® Ripper®, Juice Monster® Pipeline Punch®, Juice Monster® Mango [removed: LocoTM,] [added: Loco®,] Juice Monster® Pacific [removed: PunchTM,] [added: Punch®,] Monster Energy® Absolutely Zero, Monster Energy® Import, Monster Energy® Export, Punch Monster® Baller’s Blend®, Punch Monster® Mad Dog, M3(stylized)®, Monster Energy® Super Concentrate, Monster [removed: MuleTM,] [added: Mule®,] Monster Cuba [removed: LibreTM,] [added: Libre®,] Monster Energy Zero Ultra®, Monster Energy Ultra Blue®, Monster Energy Ultra Red®, Monster Energy Ultra Black®, Monster Energy Ultra [added: Paradise®, Monster Energy Ultra] Sunrise®, Monster Energy Ultra Citron®, Monster Energy Ultra Violet®, Monster Energy® Gronk, Monster Energy® Valentino Rossi and Monster Energy® Lewis Hamilton 44.

_Caffé [removed: Monster__®_ _Energy] [added: Monster® Energy] Coffee Drinks –_ a line of non-carbonated, 100% Arabica coffee, reduced fat, dairy based energy coffee drinks.

We offer the following espresso + energy drinks under the Espresso Monster® product line: Espresso and [removed: Cream] [added: Cream, Salted Caramel] and Vanilla Espresso.

We offer the following coffee + energy drinks under the Java Monster® product line: Java Monster® [added: Farmer's Oats, Java Monster® Irish Blend®, Java Monster®] Kona Blend, Java Monster® Loca Moca®, Java Monster® Mean Bean®, Java Monster® [removed: Vanilla Light, Java Monster® Irish Blend®,] [added: Salted Caramel,] Java Monster® [removed: Salted Caramel] [added: Swiss Chocolate] and Java Monster® [removed: Swiss Chocolate.][added: Vanilla Light.]

_Muscle [removed: Monster_® _Energy Shakes_ –] [added: Monster® Energy Shakes –_] a line of non-carbonated energy shakes containing [removed: 25-grams] [added: 27-grams] of protein.

We offer the following energy shakes under the Muscle Monster® Energy Shakes product line: [removed: Vanilla] [added: Chocolate] and [removed: Chocolate.][added: Vanilla.]

_Monster MAXX® Energy [removed: Drinks_ –] [added: Drinks –_] a line of carbonated energy drinks containing nitrous oxide.

We offer the following energy drinks under the Monster MAXX® product line: [removed: Super Dry, Eclipse] [added: Eclipse, Mango Matic, Rad Red, Solaris] and [removed: Solaris.][added: Super Dry.]

We offer the following tea + energy drinks under the Monster Rehab® drink line: Monster Rehab® Tea + Lemonade + Energy, Monster Rehab® [removed: Raspberry] Tea + [added: Orangeade +] Energy, Monster Rehab® [added: Peach] Tea + [removed: Orangeade +] Energy, Monster Rehab® [removed: Peach] [added: Raspberry] Tea + Energy and Monster Rehab® White Dragon Tea + Energy.

_Monster [removed: Hydro®_ –] [added: Hydro® –_] a line of non-carbonated, lightly sweetened refreshment + energy drinks.

We offer the following refreshment + energy drinks under the Monster Hydro® product line: [removed: Tropical Thunder®, Mean Green®,] [added: Blue Ice®,] Manic Melon®, [added: Mean Green®,] Purple Passion®, [removed: Blue Ice®] [added: Tropical Thunder®] and Zero Sugar.

[removed: _Mutant® Energy_] [added: _Predator®_] – a line of affordable carbonated energy drinks.

We offer the following [removed: affordable] energy drinks under the [removed: Mutant® Energy] [added: Predator®] product line: [removed: Mutant® Energy Drink, Mutant® Energy Drink –] Gold [removed: Strike®] [added: Strike, Mean Green, Purple Rain] and [removed: Mutant® Energy Drink –] Red [removed: Dawn®.][added: Dawn.]

[removed: Products] [added: Products] – Strategic Brands [removed: Segment][added: Segment]

We offer the following energy drinks under the BPM® product line: Focus Berry Red, Hydrate Citrus [removed: Green] [added: Green, Sour Twist] and Zero Orange.

We offer the following energy drinks under the [removed: BU_®_] [added: BU®] product line: [added: Island Punch and] Original.

[removed: _Burn__®_] [added: _Burn®_] – a line of carbonated energy drinks.

We offer the following energy drinks under the Burn® product line: [removed: Original,] [added: Apple Kiwi,] Blue, [removed: Zero,] Cherry, Lemon Ice, [removed: Apple Kiwi, Mango and] [added: Mango, Original,] Passion [removed: Punch.][added: Punch, Sour Twist and Zero.]

| | ● | BPM® Sour Twist |

| | ● | BU® Island Punch |

| | ● | Burn® Sour Twist |

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| | ● | Java Monster® Farmer’s Oats |

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| | ● | Monster Dragon Tea® Yerba Mate |

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| | ● | Monster HydroSport Super Fuel® Charge |

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| | ● | Monster HydroSport Super Fuel® Hang Time |

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| | ● | Monster HydroSport Super Fuel® Striker |

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| | ● | Monster Mule® (U.S. national launch) |

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| | ● | Mother® Epic Swell |

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| | ● | Mother® Tropical Blast |

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| | ● | Nalu® Frost |

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| | ● | Nalu® Refresh |

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| | ● | NOS® Power Punch |

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| | ● | NOS® Sonic Sour |

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| | ● | Predator® Mean Green |

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| | ● | Predator® Red Dawn |

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| | ● | Reign Total Body FuelTM Carnival Candy |

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Our Monster Energy® brand energy drinks, which represented 91.7%, 90.1% and 90.1% of our net sales for the years ended December 31, 2018, 2017 and 2016, respectively, primarily include the following energy drinks1:

| · Monster Energy® · Lo-Carb Monster Energy® · Monster Assault® · Monster Energy Absolutely Zero® · Juice Monster® Khaos® · Juice Monster® Ripper® · Juice Monster® Pipeline Punch® · Juice Monster® Mango LocoTM · Juice Monster® Pacific PunchTM · Punch Monster® Baller’s Blend® · Monster Cuba LibreTM · Monster Energy® Import · Monster Energy® Export · Monster Rehab® Tea + Lemonade + Energy · Monster Rehab® Raspberry Tea + Energy · Monster Rehab® Tea + Orangeade + Energy · Monster Rehab® Peach Tea + Energy · Monster Rehab® White Dragon Tea + Energy · Muscle Monster® Vanilla | | · Java Monster® Kona Blend · Java Monster® Loca Moca® · Java Monster® Mean Bean® · Java Monster® Vanilla Light · Java Monster® Irish Blend® · Java Monster® Salted Caramel · Java Monster® Swiss Chocolate · Monster MAXX® Super Dry · Monster MAXX® Eclipse · Monster MAXX® Solaris · Monster Energy® Fury® · M3(stylized)® Monster Energy® Super Concentrate · Monster Energy Zero Ultra® · Monster Energy Ultra Blue® · Monster Energy Ultra Red® · Monster Energy Ultra Black® · Monster Energy Ultra Sunrise® · Monster Energy Ultra Citron® |

| · Muscle Monster® Chocolate · Monster Hydro® Mean Green® · Monster Hydro® Manic Melon® · Monster Hydro® Tropical Thunder® · Monster Hydro® Purple Passion® · Monster Hydro® Blue Ice® · Monster Hydro® Zero Sugar® · Monster Energy® Gronk · Monster MuleTM | | · Monster Energy Ultra Violet® · Monster Energy® Valentino Rossi · Monster Energy® Lewis Hamilton 44 · Caffé Monster® Vanilla · Caffé Monster® Salted Caramel · Caffé Monster® Mocha · Espresso Monster® Espresso and Cream · Espresso Monster® Vanilla Espresso |

_1__Discontinued products have been omitted._

· BPM® Zero Orange

· Burn® Mango

· Caffé Monster® Mocha

· Caffé Monster® Vanilla

· Juice Monster® Pacific Punch Energy + Juice

· Live+ Ascend®

· Live+ Ignite®

· Live+ Persist®

· Monster Cuba LibreTM (Japan)

· Monster Hydro® Blue Ice®

· Monster Hydro® Purple Passion®

· Monster Hydro® Zero Sugar

· Monster MuleTM (limited distribution)

· Mother® Passion

· Mutant® Energy Drink

· Mutant® Energy Drink – Gold Strike®

· Mutant® Energy Drink – Red Dawn®

· Nalu® Passion

· Play® Mango

· Predator® Gold Strike®

· Relentless® Mango

Monster Energy® Brand Energy Drinks:

Monster Hydro®:

Mutant® Energy:

Strategic Brands Energy Drinks:

_Ultra Energy__®_ – a line of carbonated energy drinks.

We offer the following energy drinks under the Ultra Energy® product line: Original, Fury®, Passion Punch and Mango.

AFF Third-Party Products:

As of March 1, 2018, all of the territory previously falling under the Amended and Restated Distribution Agreement with CCR has been assigned by CCR to various TCCC network bottlers in the United States, including CCBCC Operations, LLC and Reyes Coca-Cola Bottling.

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BU®, Nalu®, Burn®, Mother®, Play®, Power Play(stylized)®, Relentless®, Ultra Energy® and BPM® are registered outside of the United States in certain jurisdictions.

These changes will go into effect on January 1, 2020.

Similar measures have been enacted but are not yet enforced in, for example, Ireland, South Africa and the United Kingdom.

For instance, Hungary has instituted an excise tax to which our products are subject.

[removed: 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 [removed: the] aggregate will likely not have a material adverse effect on the Company’s financial position or results of operations.

As of December 31, [removed: 2018,] [added: 2019,] the Company’s consolidated balance sheet [removed: includes] [added: included] accrued loss contingencies of approximately [removed: $0.06] [added: $15.5] million.

Although it is not possible to

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 AAA arbitration 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.

[removed: \[ X\]] [added: ☒] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

For the fiscal year ended December 31, [removed: 2018][added: 2019]

[removed: \[ \]] [added: ☐] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

[removed: MONSTER] [added: MONSTER] BEVERAGE [removed: CORPORATION][added: CORPORATION]

| (State or other jurisdiction of | [added: ​] | (I.R.S. Employer |

| incorporation or organization) | [added: ​] | Identification No.) |

Registrant’s telephone number, including area code: (951) 739 [removed: -] [added: \-] 6200

| Title of [removed: Each Class] [added: each class] | | [added: Trading Symbol(s) | |] Name of each exchange on which registered |

| Common Stock, $0.005 par value per share | [added: ​] | [added: MNST | ​ |] Nasdaq Global Select Market |

[removed: Yesþ No¨][added: Yes þ No ◻]

[removed: Yes¨ Noþ][added: Yes ◻ No þ]

Yes þ No [removed: ¨][added: ◻]

| Large accelerated filer þ | | Accelerated filer [removed: ¨] [added: ◻] |

| Non-accelerated filer [removed: ¨] [added: ◻] | [added: ​] | Smaller reporting company [removed: ¨] [added: ☐] |

| [added: ​ | ​ |] Emerging growth company [removed: ¨ | |] [added: ☐] |

Yes [removed: ¨ No] þ [added: No ◻]

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was [removed: $28,771,940,302] [added: $31,534,998,627] computed by reference to the closing sale price for such stock on the [removed: NASDAQ] [added: Nasdaq] Global Select Market on June [removed: 30, 2018,] [added: 28, 2019,] the last business day of the registrant’s most recently completed second fiscal quarter.

The number of shares of the registrant’s common stock, $0.005 par value per share (being the only class of common stock of the registrant), outstanding on February 20, [removed: 2019] [added: 2020] was [removed: 543,148,169] [added: 536,896,142] shares.

Portions of the registrant’s Definitive Proxy Statement to be filed subsequent to the date hereof with the Commission pursuant to Regulation 14A in connection with the registrant’s [removed: 2019] [added: 2020] Annual Meeting of Stockholders are incorporated by reference into Part III of this Report.

Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission no later than 120 days after the conclusion of the registrant’s fiscal year ended December 31, [removed: 2018.][added: 2019.]

[removed: FORM 10-K][added: FORM 10-K]

[removed: TABLE] [added: TABLE] OF [removed: CONTENTS][added: CONTENTS]

| Item Number | | [added: |] Page Number |

| [added: ​] | [added: |] [PART [removed: I](#PARTI_104913 "Click to goto ")] [added: I](#PARTI)] | [added: ​] |

| [removed: [1A.](#ITEM1A_RISKFACTORS_110925)] [added: [1A.](#ITEM1ARISKFACTORS)] | [added: ​ |] [Risk [removed: Factors](#ITEM1A_RISKFACTORS_110925)] [added: Factors](#ITEM1ARISKFACTORS)] | 18 |

| [removed: [1B.](#ITEM1B_UNRESOLVEDSTAFFCOMMENTS_111828)] [added: [1B.](#ITEM1BUNRESOLVEDSTAFFCOMMENTS)] | [added: ​ |] [Unresolved Staff [removed: Comments](#ITEM1B_UNRESOLVEDSTAFFCOMMENTS_111828)] [added: Comments](#ITEM1BUNRESOLVEDSTAFFCOMMENTS)] | [removed: 32] [added: 33] |

| [removed: [4.](#ITEM4_MINESAFETYDISCLOSURES_111854)] [added: [4.](#ITEM4MINESAFETYDISCLOSURES)] | [added: ​ |] [Mine Safety [removed: Disclosures](#ITEM4_MINESAFETYDISCLOSURES_111854)] [added: Disclosures](#ITEM4MINESAFETYDISCLOSURES)] | [removed: 33] [added: 34] |

| [added: ​] | [added: ​ |] [PART [removed: II](#PARTII_111855 "Click to goto ")] [added: II](#PARTII)] | [added: ​] |

| [removed: [5.](#ITEM5__112030)] [added: [5.](#ITEM5MARKETFORTHEREGISTRANTSCOMMON)] | [added: ​ |] [Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#ITEM5__112030)] [added: Securities](#ITEM5MARKETFORTHEREGISTRANTSCOMMON)] | [removed: 33] [added: 34] |

| [removed: [6.](#ITEM6_SELECTEDFINANCIALDATA_113548)] [added: [6.](#ITEM6SELECTEDFINANCIALDATA)] | [added: ​ |] [Selected Financial [removed: Data](#ITEM6_SELECTEDFINANCIALDATA_113548)] [added: Data](#ITEM6SELECTEDFINANCIALDATA)] | [removed: 36] [added: 37] |

| [removed: [7.](#ITEM7__113948)] [added: [7.](#ITEM7MANAGEMENTSDISCUSSIONANDANALYSIS)] | [added: ​ |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ITEM7__113948)] [added: Operations](#ITEM7MANAGEMENTSDISCUSSIONANDANALYSISOFF)] | [removed: 37] [added: 38] |

| [removed: [7A.](#ITEM7A_QUANTITATIVEANDQUALITATIV_124235)] [added: [7A.](#ITEM7AQUANTITATIVEANDQUALITATIVE)] | [added: ​ |] [Quantitative and Qualitative Disclosures about Market [removed: Risk](#ITEM7A_QUANTITATIVEANDQUALITATIV_124235)] [added: Risk](#ITEM7AQUANTITATIVEANDQUALITATIVE)] | 62 |

| [removed: [8.](#ITEM8_FINANCIALSTATEMENTSANDSUPP_124246)] [added: [8.](#ITEM8FINANCIALSTATEMENTSANDSUPPLEM)] | [added: ​ |] [Financial Statements and Supplementary [removed: Data](#ITEM8_FINANCIALSTATEMENTSANDSUPP_124246)] [added: Data](#ITEM8FINANCIALSTATEMENTSANDSUPPLEM)] | 63 |

| [removed: [9.](#ITEM9__124249)] [added: [9.](#ITEM9CHANGESINANDDISAGREEMENTS)] | [added: ​ |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#ITEM9__124249)] [added: Disclosure](#ITEM9CHANGESINANDDISAGREEMENTS)] | 63 |

| [removed: [9A.](#ITEM9A_CONTROLSANDPROCEDURES_124253)] [added: [9A.](#ITEM9ACONTROLSANDPROCEDURES)] | [added: ​ |] [Controls and [removed: Procedures](#ITEM9A_CONTROLSANDPROCEDURES_124253)] [added: Procedures](#ITEM9ACONTROLSANDPROCEDURES)] | 63 |

| [removed: [9B.](#ITEM9B_OTHERINFORMATION_124452)] [added: [9B.](#ITEM9BOTHERINFORMATION)] | [added: ​ |] [Other [removed: Information](#ITEM9B_OTHERINFORMATION_124452)] [added: Information](#ITEM9BOTHERINFORMATION)] | 66 |

| [added: ​] | [added: ​ |] [PART [removed: III](#PARTIII_124503 "Click to goto ")] [added: III](#PARTIII)] | [added: ​] |

| [removed: [10.](#ITEM10_DIRECTORSEXECUTIVEOFFICER_124504)] [added: [10.](#ITEM10DIRECTORSEXECUTIVEOFFICERS)] | [added: ​ |] [Directors, Executive Officers and Corporate [removed: Governance](#ITEM10_DIRECTORSEXECUTIVEOFFICER_124504)] [added: Governance](#ITEM10DIRECTORSEXECUTIVEOFFICERS)] | 66 |

| [removed: [11.](#ITEM11_EXECUTIVECOMPENSATION_124519)] [added: [11.](#ITEM11EXECUTIVECOMPENSATION)] | [added: ​ |] [Executive [removed: Compensation](#ITEM11_EXECUTIVECOMPENSATION_124519)] [added: Compensation](#ITEM11EXECUTIVECOMPENSATION)] | 66 |

| [removed: [12.](#ITEM12_SECURITYOWNERSHIPOFCERTAI_124521)] [added: [12.](#ITEM12SECURITYOWNERSHIPOFCERTAIN)] | [added: ​ |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ITEM12_SECURITYOWNERSHIPOFCERTAI_124521)] [added: Matters](#ITEM12SECURITYOWNERSHIPOFCERTAIN)] | 66 |

| --- | --- | --- | --- | --- |

Yes ☐ No þ

| ​ | ​ | | ​ |

| --- | --- | --- | --- |

| ​ | ​ | ​ | ​ |

| [1.](#ITEM1BUSINESS) | ​ | [Business](#ITEM1BUSINESS) | 3 |

| [2.](#ITEM2PROPERTIES) | ​ | [Properties](#ITEM2PROPERTIES) | 33 |

| [3.](#ITEM3LEGALPROCEEDINGS) | ​ | [Legal Proceedings](#ITEM3LEGALPROCEEDINGS) | 33 |

| ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ |

| ​ | ​ | [Signatures](#SIGNATURES) | 70 |

10-K 1 a19-30117_110k.htm 10-K

| --- | --- | --- |

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.

| | | |

| [1.](#ITEM1_BUSINESS_104914) | [Business](#ITEM1_BUSINESS_104914) | 3 |

| [2.](#ITEM2_PROPERTIES_111830) | [Properties](#ITEM2_PROPERTIES_111830) | 32 |

| [3.](#ITEM3_LEGALPROCEEDINGS_111832) | [Legal Proceedings](#ITEM3_LEGALPROCEEDINGS_111832) | 32 |

| | [Signatures](#SIGNATURES_012222 "Click to goto ") | 70 |

Our owned corporate [removed: headquarters are] [added: facilities] located at 1 Monster Way, Corona, California 92879, [removed: consisting] [added: consist] of (i) an approximately 141,000 square-foot, free-standing, six-story building (ENERGY STAR certified), (ii) an approximately 147,625 square-foot three-story parking structure and storage facility, which houses our approximately 14,000 square-foot quality control laboratory, [removed: and] (iii) an [removed: adjacent] approximately 75,426 square foot, free-standing, three-story building (pursuing ENERGY STAR [removed: certification).][added: certification), (iv) an approximately 20,661 square-foot, free-standing, single-story building and (v) an approximately 49,617 square-foot, free-standing, two-story building.]

Our owned Southern California warehouse [added: and distribution center] is located in Rialto, California, consisting of an approximately 1,000,000 square-foot building which is LEED certified.

During 2019, we acquired a manufacturing plant and adjoining land in Athy, County Kildare, Ireland.

We intend to utilize the facility to produce and supply ingredients for certain of our international markets.

During 2019, we purchased approximately 7.66 acres of land in San Fernando, California.

We intend to construct a new production facility on such land in order to consolidate AFF’s operations into a single location.

[removed: PART II][added: PART II]

[removed: Principal Market][added: Principal Market]

As of February 20, [removed: 2019,] [added: 2020,] there were [removed: 543,148,169] [added: 536,896,142] shares of the Company’s common stock outstanding held by approximately [removed: 198] [added: 193] holders of record.

[removed: Stock] [added: Stock] Price and Dividend [removed: Information][added: Information]

On February [removed: 28, 2017,] [added: 26, 2019,] 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 [removed: 2017] [added: 2019] Repurchase Plan”).

During the year ended December 31, [removed: 2018,] [added: 2019,] the Company purchased [removed: 4.3] [added: 2.9] million shares of common stock at an average purchase price of [removed: $57.74] [added: $54.68] per share, for a total amount of [removed: $249.9] [added: $159.6] million (excluding broker commissions), [removed: under the February 2017 Repurchase Plan,] which exhausted the availability under the [removed: February 2017] [added: August 2018] Repurchase Plan.

Such shares are included in common stock in treasury in the accompanying consolidated balance sheet at December 31, [removed: 2018.][added: 2019.]

On [removed: February 27, 2018,] [added: November 6, 2019,] the Company’s Board of Directors authorized a [added: new] share repurchase program for the purchase of up to [removed: $250.0] [added: $500.0] million of the Company’s outstanding common stock (the [removed: “February 2018] [added: “November 2019] Repurchase [removed: Program”).][added: Plan”).]

During the year ended December 31, [removed: 2018,] [added: 2019,] the Company purchased [removed: 5.0] [added: 8.1] million shares of common stock at an average purchase price of [removed: $49.81] [added: $57.16] per share, for a total amount of [removed: $249.9] [added: $463.3] million (excluding broker commissions), [removed: which exhausted the availability] under the February [removed: 2018] [added: 2019] Repurchase [removed: Program.][added: Plan.]

Such shares are included in [removed: the] common stock in treasury in the accompanying consolidated balance sheet at December 31, [removed: 2018.][added: 2019.]

As [removed: a result] of [removed: purchases of our common stock in January 2019 and] February [removed: 2019, as of February 26, 2019, $20.6] [added: 28, 2020, $36.6] million remained available for repurchase under the [removed: August 2018] [added: February 2019] Repurchase Plan.

During the year ended December 31, [removed: 2018, 34,976] [added: 2019, 1.4 million] 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 [removed: $2.1] [added: $84.5] million.

The following tabular summary reflects the Company’s repurchase activity during the quarter ended December 31, [removed: 2018:][added: 2019:]

[removed: Performance Graph][added: Performance Graph]

[removed: ][added: ]

Cumulative total return assumes an initial investment of $100 on December 31, [removed: 2013.][added: 2014.]

The Company’s self-selected peer group is comprised of TCCC, [removed: Dr] [added: Dr.] Pepper Snapple Group, Inc. (through July 9, 2018), [added: Keurig Dr. Pepper Inc. (after July 10, 2018),] National Beverage Corporation, Jones Soda Company and [removed: PepsiCo.][added: PepsiCo, Inc.]

No shares were purchased during the year ended December 31, 2019 under the November 2019 Repurchase Plan.

As of February 28, 2020, $500.0 million remained available for repurchase under the November 2019 Repurchase Plan.

Such shares are included in common stock in treasury in the accompanying consolidated balance sheet at December 31, 2019.

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| ​ | | ​ | | ​ | ​ | | ​ | | Maximum Number (or | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Approximate Dollar | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | Total Number of | ​ | Value) of Shares that | |

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | Shares Purchased | ​ | May Yet Be Purchased | |

| ​ | ​ | Total Number | ​ | ​ | ​ | ​ | as Part of Publicly | ​ | Under the Plans or | |

| ​ | ​ | of Shares | ​ | Average Price | | ​ | Announced Plans | ​ | Programs (In | |

| Period | ​ | Purchased | ​ | per Share¹ | | ​ | or Programs | ​ | thousands)² | |

| Oct 1 – Oct 31, 2019 | ​ | 3,138,415 | ​ | $ | 55.67 | ​ | 3,138,415 | ​ | $ | 91,479 |

| November 6, 2019 Authorization | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | $ | 500,000 |

| Nov 1 – Nov 30, 2019 | | 979,601 | ​ | $ | 56.00 | | 979,601 | ​ | $ | 536,606 |

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.

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.

| Period | | Total Number of Shares Purchased | | Average Price per Share¹ | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs (In thousands)² | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Nov 1 – Nov 30, 2018 | | 4,812,896 | | $ | 57.41 | | 4,812,896 | | $ | 420,288 | |

| Dec 1 – Dec 31, 2018 | | 4,607,630 | | $ | 56.56 | | 4,607,630 | | $ | 159,612 | |

The consolidated statements of operations data set forth below with respect to each of the fiscal years ended December 31, [removed: 2016] [added: 2017] through [removed: 2018] [added: 2019] and the balance sheet data as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] are derived from our audited consolidated financial statements included herein, and should be read in conjunction with those financial statements and notes thereto, and with Management’s Discussion and Analysis of Financial Condition and Results of Operations included as Part II, Item 7 of this Annual Report on Form 10-K.

The consolidated statements of operations data for the fiscal years ended December 31, 2015 and 2014 and the balance sheet data as of December 31, [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] are derived from the Company’s audited consolidated financial statements not included herein.

| (in thousands, except per share information) | [added: ​] | [removed: 2018] [added: ​] | [added: 2019] | [added: ​] | [removed: 2017] [added: ​] | [added: 2018] | [added: ​] | [removed: 2016] [added: ​] | [added: 2017] | [added: ​] | [removed: 2015] [added: ​] | [added: 2016] | [added: ​] | [removed: 2014] [added: ​] | [added: 2015] |

| Net [removed: sales1,2] [added: sales1] | [added: ​] | $ | [removed: 3,807,183] [added: 4,200,819] | [added: ​] | $ | [removed: 3,369,045] [added: 3,807,183] | [added: ​] | $ | [removed: 3,049,393] [added: 3,369,045] | [added: ​] | $ | [removed: 2,722,564] [added: 3,049,393] | [added: ​] | $ | [removed: 2,464,867] [added: 2,722,564] |

| Gross [removed: profit1,2] [added: profit1] | [added: ​] | $ | [removed: 2,295,375] [added: 2,518,585] | [added: ​] | $ | [removed: 2,137,690] [added: 2,295,375] | [added: ​] | $ | [removed: 1,942,000] [added: 2,137,690] | [added: ​] | $ | [removed: 1,632,301] [added: 1,942,000] | [added: ​] | $ | [removed: 1,339,810] [added: 1,632,301] |

| Gross profit as a percentage to net sales | [added: ​] | [removed: 60.3%] [added: ​] | [added: 60.0%] | [added: ​] | [removed: 63.5%] [added: ​] | [added: 60.3%] | [added: ​] | [removed: 63.7%] | [added: 63.5%] | [added: ​] | [removed: 60.0%] | [added: 63.7%] | [added: ​] | [removed: 54.4%] | [added: 60.0%] |

| Operating [removed: income1,3] [added: income1,2] | [added: ​] | $ | [removed: 1,283,619] [added: 1,402,939] | [added: ​] | $ | [removed: 1,198,787] [added: 1,283,619] | [added: ​] | $ | [removed: 1,085,338] [added: 1,198,787] | [added: ​] | $ | [removed: 893,653] [added: 1,085,338] | [added: ​] | $ | [removed: 747,505] [added: 893,653] |

| Net [removed: income1,3] [added: income1,2] | [added: ​] | $ | [removed: 993,004] [added: 1,107,835] | [added: ​] | $ | [removed: 820,678] [added: 993,004] | [added: ​] | $ | [removed: 712,685] [added: 820,678] | [added: ​] | $ | [removed: 546,733] [added: 712,685] | [added: ​] | $ | [removed: 483,185] [added: 546,733] |

| Net income per common share: | [added: ​] | | | [added: ​] | | | [added: ​] | | | [added: ​] | | | [added: ​] | | |

| Basic | [added: ​] | $ | [removed: 1.78] [added: 2.04] | [added: ​] | $ | [removed: 1.45] [added: 1.78] | [added: ​] | $ | [removed: 1.21] [added: 1.45] | [added: ​] | $ | [removed: 0.97] [added: 1.21] | [added: ​] | $ | [removed: 0.96] [added: 0.97] |

| Diluted | [added: ​] | $ | [removed: 1.76] [added: 2.03] | [added: ​] | $ | [removed: 1.42] [added: 1.76] | [added: ​] | $ | [removed: 1.19] [added: 1.42] | [added: ​] | $ | [removed: 0.95] [added: 1.19] | [added: ​] | $ | [removed: 0.92] [added: 0.95] |

| Cash, cash equivalents and investments | [added: ​] | $ | [removed: 958,163] [added: 1,343,925] | [added: ​] | $ | [removed: 1,203,921] [added: 958,163] | [added: ​] | $ | [removed: 600,530] [added: 1,203,921] | [added: ​] | $ | [removed: 2,935,375] [added: 600,530] | [added: ​] | $ | [removed: 1,194,397] [added: 2,935,375] |

| Total assets | [added: ​] | $ | [removed: 4,526,891] [added: 5,150,352] | [added: ​] | $ | [removed: 4,791,012] [added: 4,526,891] | [added: ​] | $ | [removed: 4,153,471] [added: 4,791,012] | [added: ​] | $ | [removed: 5,571,277] [added: 4,153,471] | [added: ​] | $ | [removed: 1,938,875] [added: 5,571,277] |

| Stockholders’ equity | [added: ​] | $ | [removed: 3,610,901] [added: 4,171,281] | [added: ​] | $ | [removed: 3,895,212] [added: 3,610,901] | [added: ​] | $ | [removed: 3,329,709] [added: 3,895,212] | [added: ​] | $ | [removed: 4,809,410] [added: 3,329,709] | [added: ​] | $ | [removed: 1,515,150] [added: 4,809,410] |

[removed: _¹_ _Includes] [added: _¹ Includes $46.3 million,] $44.3 million, $43.4 million, $40.3 [removed: million, $62.8] million and [removed: $15.0] [added: $62.8] million for the years ended December 31, [added: 2019,] 2018, 2017, [removed: 2016, 2015] [added: 2016] and [removed: 2014,] [added: 2015,] respectively, related to the recognition of deferred revenue._

[removed: _3_] [added: 2] _Includes [added: $11.3 million,] $26.6 million, $35.4 million, $79.8 [removed: million, $224.0] million and [removed: ($0.2)] [added: $224.0] million for the years ended December 31, [added: 2019,] 2018, 2017, [removed: 2016, 2015] [added: 2016] and [removed: 2014,] [added: 2015,] respectively, related to expenditures attributable to the costs associated with [removed: terminating existing distributors._][added: terminating_ _existing distributors__._]

| ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ |

*​*

_2_ _Net sales and gross profit were negatively impacted by approximately $42.2 million for the year ended December 31, 2018 as a result of the adoption of ASC 606._

The information required to be furnished in response to this Item 8 follows the signature page and Index to Exhibits hereto at pages [removed: 72] [added: 71] through [removed: 115.][added: 118.]

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] based on the framework in _Internal Control – Integrated Framework (2013)_ issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on our management’s evaluation under the framework in _Internal Control - Integrated Framework (2013)_, our management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2018.][added: 2019.]

Our internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their attestation report, which is included herein.

_Changes in Internal Control Over Financial Reporting_ – There were no changes in the Company’s internal controls over financial reporting during the quarter ended December 31, [removed: 2018,] [added: 2019,] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

[removed: REPORT] [added: REPORT] OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING [removed: FIRM][added: FIRM]

[removed: Opinion] [added: Opinion] on Internal Control over Financial [removed: Reporting][added: Reporting]

We have audited the internal control over financial reporting of Monster Beverage Corporation and subsidiaries (the “Company”) as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in _Internal Control —Integrated Framework (2013)_ issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2018,] [added: 2019,] based on criteria established in _Internal Control — Integrated Framework (2013)_ issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, [removed: 2018,] [added: 2019,] of the Company and our report dated February 28, [removed: 2019,] [added: 2020,] expressed an unqualified opinion on those financial statements and financial statement schedule.

[removed: Basis] [added: Basis] for [removed: Opinion][added: Opinion]

[removed: Definition] [added: Definition] and Limitations of Internal Control over Financial [removed: Reporting][added: Reporting]

February 28, 2020

February 28, 2019

[removed: PART III][added: PART III]

None.

On February 26, 2019, our 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 (the “February 2019 Repurchase Plan”).

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.

The information required by this item regarding our directors is included under the caption “Proposal One – Election of Directors” in our Proxy Statement for our [removed: 2019] [added: 2020] Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, [removed: 2018] [added: 2019] (the [removed: “2019] [added: “2020] Proxy Statement”) and is incorporated herein by reference.

Information concerning compliance with Section 16(a) of the Exchange Act is included under the caption [removed: “Section] [added: “Delinquent Section] 16(a) [removed: Beneficial Ownership Reporting Compliance”] [added: Reports”] in our [removed: 2019] [added: 2020] Proxy Statement and is incorporated herein by reference.

Information concerning the Audit Committee and the Audit Committee Financial Expert is reported under the caption “Audit Committee; Report of the Audit Committee; Duties and Responsibilities” in our [removed: 2019] [added: 2020] Proxy Statement and is incorporated herein by reference.

[removed: Code] [added: Code] of Business Conduct and [removed: Ethics][added: Ethics]

Information concerning the compensation of our directors and executive officers and Compensation Committee Interlocks and Insider Participation is reported under the captions “Compensation Discussion and Analysis,” and “Compensation Committee,” respectively, in our [removed: 2019] [added: 2020] Proxy Statement and is incorporated herein by reference.

Information concerning the beneficial ownership of the Company’s Common Stock of (a) those persons known to the Company to be the beneficial owners of more than 5% of the Company’s common stock; (b) each of the Company’s directors and nominees for director; and (c) the Company’s executive officers and all of the Company’s current directors [removed: and executive officers as a group is reported under the caption “Principal Stockholders and Security Ownership of Management” in our 2019 Proxy Statement and is incorporated herein by reference.]

and executive officers as a group is reported under the caption “Principal Stockholders and Security Ownership of Management” in our 2020 Proxy Statement and is incorporated herein by reference.

Information concerning shares of the Company’s Common Stock authorized for issuance under the Company’s equity compensation plans is reported under the caption “Employee Equity Compensation Plan Information” in our 2020 Proxy Statement and is incorporated herein by reference.

Information concerning certain relationships and related transactions is reported under the caption “Certain Relationships and Related Transactions and Director Independence” in our [removed: 2019] [added: 2020] Proxy Statement and is incorporated herein by reference.

Information concerning our accountant fees and our Audit Committee’s pre-approval of audit and permissible non-audit services of independent auditors is reported under the captions “Principal Accounting Firm Fees” and “Pre-Approval of Audit and Non-Audit Services,” respectively, in our [removed: 2019] [added: 2020] Proxy Statement and is incorporated herein by reference.

[removed: PART IV][added: PART IV]

| [removed: (a)] | [added: (a)] | The following documents are filed as a part of this Form 10-K: | [removed: | |]

| [added: ​] | [added: ​] | [Report of Independent Registered Public Accounting [removed: Firm](#REPORTOFINDEPENDENTREGISTEREDPUB_012629 "Click to goto ")] [added: Firm](#REPORTOFINDEPENDENTREGISTEREDPUBLIC)] | [added: ​] | 72 |

| [added: ​] | [added: ​] | Financial Statements: | [added: ​] | [added: ​] |

| [added: ​] | [added: ​] | [Consolidated Balance Sheets as of December 31, [removed: 2018] [added: 2019] and [removed: 2017](#CONSOLIDATEDBALANCESHEETS_012647 "Click to goto ")] [added: 2018](#CONSOLIDATEDBALANCESHEETS)] | [added: ​] | [removed: 73] [added: 75] |

| [added: ​] | [added: ​] | [Consolidated Statements of Income for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#CONSOLIDATEDSTATEMENTSOFINCOME_012707 "Click to goto ")] [added: 2017](#CONSOLIDATEDSTATEMENTSOFINCOME)] | [added: ​] | [removed: 74] [added: 76] |

| [added: ​] | [added: ​] | [Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#CONSOLIDATEDSTATEMENTSOFCOMPREHE_012729 "Click to goto ")] [added: 2017](#CONSOLIDATEDSTATEMENTSOFCOMPREHENSIVE)] | [added: ​] | [removed: 75] [added: 77] |

| [added: ​] | [added: ​] | [Consolidated Statements of Stockholders’ Equity for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#CONSOLIDATEDSTATEMENTSOFSTOCKHOL_013802 "Click to goto ")] [added: 2017](#CONSOLIDATEDSTATEMENTSOFSTOCKHOLDERS)] | [added: ​] | [removed: 76] [added: 78] |

| [added: ​] | [added: ​] | [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#CONSOLIDATEDSTATEMENTSOFCASHFLOW_012840 "Click to goto ")] [added: 2017](#CONSOLIDATEDSTATEMENTSOFCASHFLOWS)] | [added: ​] | [removed: 77] [added: 79] |

| [added: ​] | [added: ​] | [Notes to Consolidated Financial [removed: Statements](#NOTESTOCONSOLIDATEDFINANCIALSTAT_015017 "Click to goto ")] [added: Statements](#ORGANIZATIONANDSUMMARY)] | [added: ​] | [removed: 79] [added: 81] |

| [added: ​] | [added: ​] | [removed: [Financial Statement Schedule: Valuation] [added: [Valuation] and Qualifying Accounts for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016](#SCHEDULEIIVALUATIONANDQUALIFYING_040036 "Click to goto ")] [added: 2017](#SCHEDULE)] | [added: ​] | [removed: 115] [added: 118] |

| [added: ​] | [added: ​] | Exhibits: | [added: ​] | [added: ​] |

| [added: ​] | [added: ​] | The Exhibits listed in the Index of Exhibits, which appears immediately preceding the signature page and is incorporated herein by reference, as filed as part of this Form 10-K. | [added: ​] | [added: ​] |

| --- | --- | --- |

| ​ | ​ | | ​ | |

| ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | ​ | ​ | ​ |

| ​ | ​ | Financial Statement Schedule: | ​ | ​ |

| ​ | ​ | ​ | ​ | ​ |

| | | | | |

[removed: INDEX] [added: INDEX] TO [removed: EXHIBITS][added: EXHIBITS]

| 2.2 | [Asset Transfer Agreement, dated as of August 14, 2014, by and among Monster Beverage Corporation, New Laser Corporation and The Coca-Cola Company [removed: Refreshments] (incorporated by reference to Exhibit 2.2 to our Form 8-K dated August 18, 2014).](http://www.sec.gov/Archives/edgar/data/865752/000110465914061722/a14-19122_2ex2d2.htm) |

| 3.1 | [Certificate of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to our Form [removed: 10-Q] [added: 10-K] dated November 7, 2016).](http://www.sec.gov/Archives/edgar/data/865752/000110465916155163/a16-20895_1ex3d1.htm) |

| 3.2 | [Second Amended and Restated [removed: Bylaws] [added: By-laws] of the Company (incorporated by reference to Exhibit 3.2 to our Form 8-K dated April 16, 2018).](http://www.sec.gov/Archives/edgar/data/865752/000110465918024237/a18-10038_1ex3d2.htm) |

| 10.1 | [Amended and Restated Distribution Coordination Agreement, dated as of June 12, 2015, between Monster Energy Company and The Coca-Cola Company (incorporated by reference to Exhibit 10.1 to our [added: Form] 10-Q dated August 10, 2015).](http://www.sec.gov/Archives/edgar/data/865752/000110465915058216/a15-11963_1ex10d1.htm) |

| 10.2 | [Amended and Restated International Distribution Coordination Agreement, dated as of June 12, 2015, between Monster Energy Ltd. and Monster Energy Company and The Coca-Cola Company (incorporated by reference to Exhibit 10.2 to our [added: Form] 10-Q dated August 10, 2015).](http://www.sec.gov/Archives/edgar/data/865752/000110465915058216/a15-11963_1ex10d2.htm) |

| 10.3 | [Form of Indemnification Agreement (to be provided by [removed: Hansen Natural] [added: Monster Beverage] Corporation to its [removed: directors)] [added: directors and officers)] (incorporated by reference to Exhibit 10.1 to our Form 8-K dated [removed: November 14, 2005).](http://www.sec.gov/Archives/edgar/data/865752/000086575205000089/e101.htm)] [added: June 11, 2019).](http://www.sec.gov/Archives/edgar/data/865752/000110465919034816/a19-11405_1ex10d1.htm)] |

| 10.5+ | [Form of Restricted Stock Unit Agreement pursuant to the 2009 Hansen Natural Corporation Stock Incentive Plan for Non-Employee Directors (incorporated by reference to Exhibit 10.1 to our Form [removed: 10-Q] [added: 10-K] dated August 5, 2016).](http://www.sec.gov/Archives/edgar/data/865752/000110465916137481/a16-15122_1ex10d1.htm) |

| 21* | [removed: [Subsidiaries](https://www.sec.gov/Archives/edgar/data/865752/000110465919011581/a19-30117_1ex21.htm#EXHIBIT21_121546 "Click to goto ")] [added: [Subsidiaries](https://www.sec.gov/Archives/edgar/data/865752/000110465920027209/ex-21.htm)] |

| 23* | [Consent of Independent Registered Public Accounting [removed: Firm](https://www.sec.gov/Archives/edgar/data/865752/000110465919011581/a19-30117_1ex23.htm#EXHIBIT23_040516 "Click to goto ")] [added: Firm](https://www.sec.gov/Archives/edgar/data/865752/000110465920027209/ex-23.htm)] |

| 31.1* | [Certification by CEO pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 [removed: *](https://www.sec.gov/Archives/edgar/data/865752/000110465919011581/a19-30117_1ex31d1.htm#EXHIBIT31_1_033200 "Click to goto ")] [added: *](https://www.sec.gov/Archives/edgar/data/865752/000110465920027209/ex-31d1.htm)] |

| 31.2* | [Certification by CFO pursuant to Rule 13A-14(a) or 15D-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 [removed: *](https://www.sec.gov/Archives/edgar/data/865752/000110465919011581/a19-30117_1ex31d2.htm#EXHIBIT31_2_033815 "Click to goto ")] [added: *](https://www.sec.gov/Archives/edgar/data/865752/000110465920027209/ex-31d2.htm)] |

| 32.1* | [Certification by CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 [removed: *](https://www.sec.gov/Archives/edgar/data/865752/000110465919011581/a19-30117_1ex32d1.htm#EXHIBIT32_1_033937 "Click to goto ")] [added: *](https://www.sec.gov/Archives/edgar/data/865752/000110465920027209/ex-32d1.htm)] |

| 32.2* | [Certification by CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 [removed: *](https://www.sec.gov/Archives/edgar/data/865752/000110465919011581/a19-30117_1ex32d2.htm#EXHIBIT32_2_034452 "Click to goto ")] [added: *](https://www.sec.gov/Archives/edgar/data/865752/000110465920027209/ex-32d2.htm)] |

| 101* | The following materials from Monster Beverage Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2018] [added: 2019] are furnished herewith, formatted in [removed: XBRL (eXtensible] [added: iXBRL (Inline eXtensible] Business Reporting Language): (i) [removed: the] Consolidated Balance Sheets as of December 31, [removed: 2018] [added: 2019] and [removed: 2017,] [added: 2018,] (ii) [removed: the] Consolidated Statements of Income for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] (iv) [removed: the] Consolidated Statements of Stockholders’ Equity for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] (v) Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2018, 2017] [added: 2019, 2018] and [removed: 2016,] [added: 2017,] and (vi) [removed: the] Notes to Consolidated Financial Statements. |