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Coca-Cola (KO) Earnings Report: Q1 2016 Conference Call Transcript

Company's first-quarter 2016 earnings results conference call. Today's call is being recorded. If you have any objections, please disconnect at this time. (Operator Instructions) I would like to remind everyone that the purpose of this conference is to talk with investors, and therefore questions from the media will not be addressed. Media participants should contact Coca-Cola's Media Relations department if they have questions. I would now like to introduce Tim Leveridge, Vice President and Investor Relations Officer. Mr. Leveridge, you may begin. Tim Leveridge (VP and IR Officer): Good morning. Thank you for being with us today. I'm joined by Muhtar Kent, our Chairman and Chief Executive Officer; James Quincy, our President and Chief Operating Officer; and Kathy Waller, our Chief Financial Officer. Before we begin, I would like to inform you that you can find webcast materials in the Investors section of our Company website at www.Coca-ColaCompany.com that support the prepared remarks by Muhtar, James, and Kathy this morning. I would also like to note that we have posted schedules under the Financial Reports and Information tab in the Investors section of our Company website. These schedule reconcile certain non-GAAP financial measures, which may be referred to by our senior executives during this morning's discussions to the results as reported under Generally Accepted Accounting Principles. Please look on our website for this information. In addition, this conference call may contain forward-looking statements, including statements concerning the long-term earnings objectives, and should be considered in conjunction with cautionary statements contained in our earnings release and in the Company's most recent periodic SEC report. Following prepared remarks this morning, we will turn the call over to your questions. In order to allow as many people to ask questions as possible, we ask that you limit yourself to one question. If you have multiple questions, please ask your most pressing question first, and then re-enter the queue in order to ask any additional ones. Now I would like to turn the call over to Muhtar. Muhtar Kent (Chairman and CEO): Thank you, Tim. Good morning, everyone. 18 months ago I communicated a clear five-point plan to reinvigorate our growth and increase profitability. In February we reported a successful transition year in 2015, where we made tangible progress on our plan, and delivered the full-year expectations we laid out. I'm pleased to report that in the quarter -- first quarter of 2016, we took another positive step in the macro environment that continues to be challenging. Today, I will touch briefly on a few key highlights in the quarter before handing off to James to provide a more detailed review of our operational performance. We're in the midst of transforming The Coca-Cola


Company is becoming stronger, more efficient, and more focused on our core strengths of marketing and brand building, customer value creation, and leading our franchise bottling system. We're making progress implementing our disciplined global revenue growth management strategy. We're also building new growth opportunities with still and sparkling brands that we develop internally, we acquire from the outside, and we invest in through partnerships. Our franchise bottling system is also getting stronger, faster, more nimble, and more closely aligned. In short, my colleagues and I are getting up every single day with a fresh passion for doing the things that will create long-term sustainable value.

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I'll now hand the call over to James, who is going to provide you with a more detailed look at our operating performance in the first quarter. James Quincy (President and COO): Thank you, Muhtar. Good morning, everyone. From an industry perspective, we gained global value share in NERTD beverages in the quarter, with increases in both sparkling and still beverages worldwide. We gained value share in all but one of the sub-categories in stills, where there we maintained value share. We delivered 2% unit case volume growth, as solid performance in many of our developed markets was partially offset by challenges in emerging markets suffering from the worst of the macro slow-down. This had a disproportionate effect on sparkling volume growth, as the non-alcoholic beverage industry in many of these markets is more weighted towards sparkling beverages. Consolidated price mix grew 1%, cycling 3%, as solid underlying pricing was partially offset by 1 point of segment mix. We accelerated our price mix across every operating segment except Asia-Pacific versus the first quarter last year. Given the geographic footprint of our own bottling investment group, our consolidated price mix was lower. Given the scale of our pending re-franchising, as you consider the sustainability of our distilling pricing strategy, I think it's helpful to exclude BIG and focus instead on our core business, which delivered 2 points of global price realization. Results were also impacted by one less day in our fiscal quarter compared to the same period last year, which reduced organic revenue growth by roughly 1 point. As a result, we delivered 2% organic revenue growth, including 1 point head wind from one less day. In the quarter, structurally adjusted comparable currency-neutral income before tax grew a solid 9%, with the underlying margin expansion reflecting our focus on productivity, as well as the timing of operating expenses. Notably, this expansion occurred alongside the continued growth in our marketing investments. Now to describe more clearly our operating performance, let me briefly describe our results in three groupings of our markets. First, in markets where our strategies are in place and being executed fairly well, we are seeing strong results. This cluster is led by North America, Latin America, also includes Japan and India. Here, strong marketing, disciplined revenue management, and improving execution are driving results. For example, specifically in North America, we delivered 2% organic revenue growth, with one less day, 3 points of price realization, led by 3% sparkling price mix, and good operating leverage in the quarter. North America also grew value share again this quarter, and continued to successfully implement its accelerated re-franchising program. Latin America delivered double-digit organic revenue growth, due to a strong focus on consumer and customer segmentation, despite worsening conditions in Brazil, Venezuela, and Argentina. In Mexico, brand investments, including new products such as del Valle Nada, a sparkling fruit drink, as well as Ciel mineral water and Ciel flavored water, helped increase unit volume by 5%, with growth across all major categories.


Our Japan business unit had a very strong start to the year, supported by several recent innovations, such as I Lohas Peach, an extension of our premium water brand, and a premium-priced Georgia coffee bottle can.

We also leveraged innovation from China, launching Lemon Plus C, which is seeing strong early results. These products enabled our value share to out-perform volume share as they skew higher to higher revenue single-serve packaging. Finally, India. Here we delivered strong performance in the quarter due to the rapid scaling of a new price pack architecture across sparkling and juice segments, coupled with brand marketing and execution efforts. In addition, we expanded our still beverage portfolio in India, with the launch of Vio, our latest value-added dairy beverage. These positive results give us confidence our strategies are working. While we are making progress in these markets, we also recognize there is more work to be done, and the opportunity for improvement in these good, performing markets continues to be significant. The second group is comprised of markets where we are taking action to positively transform our Business for the future. Here I would include Europe, where we continue to make progress to the establishments of our newly integrated Western European bottler. Here, several key markets performed very well, led by Spain, up 3%, Germany up 1%, and in the Central and Southern


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Before I hand over to Kathy, let me conclude by saying we are resolutely focused on evolving our growth strategies, and transforming our business to deliver sustainable shareholder value.

With the challenges around the world, we will focus on what we can control in order to deliver solid revenue growth and strong underlying operating margin expansion through the effective management of our portfolio, price mix, and productivity efforts. With that, I'll turn the call over to Kathy. Kathy Waller (CFO): Thank you, James. Good morning, everyone. I would like to touch upon a few areas of our financial performance in the quarter before providing our full-year outlook. Starting at the top line, as James mentioned, our 2% organic revenue growth was impacted by one less day in the quarter, as well as by our segment mix, as our Bottling Investments Group grew at a slightly slower rate than our core business. Let me take a moment to explain what we mean by segment mix, and why the impacts will be more pronounced in 2016 and 2017, until we have finished our previously announced re-franchising actions. Starting in the first quarter, we revised our operating segments so that our Company-owned bottling operations in North America are now reported within our Bottling Investments Group. This greatly increases the relative size of the bottling segment to the rest of our geographic segments. Since our bottling operations earns significantly higher revenues per case than concentrate operations, slower growth among our Company-owned bottling operations results in negative pressure on our consolidated price mix, regardless of the underlying pricing in either the bottling operations or our core business. However, due to the relatively lower profitability of our bottling business, slower growth among our bottling operations has an opposite effect on our consolidated margins. At gross profit, our comparable margin declined, as we were impacted by currency head winds, the effects from North America re-franchising, and the sale of our legacy energy brand to Monster. Excluding the year-over-year effects of these items, we would have seen gross margin expansion driven by a benign cost environment, benefits from productivity, and segment mix. As you think about the downhill, keep in mind that the cost environment becomes more difficult to cycle in the second quarter and beyond, due to the timing of when commodity prices eased last year. Our comparable operating margin improved about 25 basis points on a consolidated basis. Similar to gross margin, currency head winds, the North America re-franchising, and the sale of our legacy energy brands to Monster impacted our operating margins. Comparable currency-neutral operating margins increased 140 basis points in the quarter. Excluding these effects, we achieved strong operating leverage in the quarter, driven by the benefits of our productivity initiatives, the timing of certain expenses, and segment mix. Looking at our productivity initiatives, the first quarter benefited from the timing of when certain productivity initiatives were implemented last year. For example, the majority of the head count reductions began in April, with Europe's implementation closer to the mid-year, so the associated expense savings began in the second quarter. As you think about the remainder of this year, while we expect solid currency-neutral ex-structural operating leverage, we expect some of these drivers to moderate as we begin to cycle more difficult comparisons. This was reflected in our previously provided full-year guidance. Let me stop here and touch briefly on an ongoing structural impact to provide additional clarity based on some of the questions I have received from you. At CAGNY, we noted that by the time we complete our re-franchising, we will see significant increases in both gross and operating margins. While that is the case, I want to remind you that until we would get to increase the transfer of our production operations in North America, the existing re-franchising of the distribution business actually has a dilutive effect to both growth and operating margins. Given that we do not expect the sale of production assets to significantly increase until 2017, our margins will continue to be affected by this dynamic this year. Moving to cash flow, we generated $1.1 billion in cash from operations before making a nearly half-billion dollar contribution to our pension plan. Looking ahead to the remainder of the year, we expect our cash flow growth rate to be more in line with our earnings growth rate. For 2016, we increased our annual dividend by 6% to $1.40 per share, our 54th consecutive annual dividend increase. Our net share repurchases during the quarter totaled approximately $150 million.


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For the full year, we expect to achieve the $2-billion to $2.5-billion range that we communicated during our last earnings call.

Turning to outlook, the first quarter reflected more challenging operating environments in markets like China and Brazil. We see that our strategies are working, however, in key markets like North America, Japan, and India. Further, our strategies allow us to scenario plan to adjust to market dynamics. Therefore, we are maintaining our currency-neutral outlook we previously provided. However, we are updating the expected impact from currency. We expect organic revenue growth of 4% to 5%, and comparable currency-neutral EPS growth of 4% to 6%, inclusive of a 3- to 4-point structural head wind to income before tax. Moving to currency, while current spot rates have improved since our fourth quarter call, these rates have been extremely volatile, as well. Therefore I will caveat our currency outlook, knowing that it is definitely subject to change. We will update you accordingly as we move through the year. Based on current spot rates, hedging activity, and what we are cycling, we now expect the full-year impact of currency to be a 2- to 3-point head wind on net revenue versus our previous expectation of 4 points. Relative to income before tax, we now expect an 8- to 9-point head wind, as compared to our previous expectation of a 9-point head wind. As you model the second quarter, there are a couple of items to consider. We expect the net impact of acquisitions, divestitures, and other structural items to be a 2- to 3-point head wind on net revenue, and a 3-point head wind on income before tax. Based on current spot rates, hedging activity, and what we are cycling, we expect that currency will be a 2- to 3-point head wind on net revenue, and a 6-point head wind on operating income. In addition, we will be cycling the Euro debt re-measurement gain we recorded in Other Income during the second quarter of 2015. For this reason, we expect an 11-point currency head wind on income before tax as we cycle this gain. In closing, we are working diligently to deliver our commitment for 2016. We continue to focus on our core capabilities of building brands, driving customer value, and leading the system, so that when we complete our re-franchising, we will be a lower-risk, higher-return business, with even greater confidence to achieve our long-term growth target. Operator, we are now ready for questions. QUESTIONS & ANSWERS Operator: (Operator Instructions) John Faucher of JPMorgan


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I think we're very satisfied with our portfolio. Certainly we've got more work to do, as we have said in the call and in the remarks; but right now we feel that we've -- our portfolio is being transformed very well, and transitioned very well, and we are in a pretty good place -- and more work to continue. James?

James Quincy (President and COO): Let me add one last thought, perhaps, John. At CAGNY, we talked about we have a 50 share of sparkling, and a 15 share of the stills. I think it's worth remembering that over the last 15 years we've gone from stills being less a single-digit part of our portfolio to now over 25% of our portfolio. I think there's a long-term track record of generating growth and value in stills. Even given today our market position, we expect to continue to grow faster in stills. As we said in the call, we are gaining share in every sub-category apart from one where we held it. We'll continue to look for bolt-on acquisitions to accelerate our growth. I think it's going to continue to be a faster-growing part of the business. Muhtar Kent (Chairman and CEO): Also, just on the sparkling you asked, we certainly see also continued growth opportunities in our sparkling portfolio. That is naturally with the focus on revenues, it will skew more towards revenues, but certainly also as we have demonstrated and with our new campaign for Taste The Feeling campaign just being launched, and everything else that we are doing in terms of the investments with our aligned partners, we see growth opportunities in revenue, and also in volume in our sparkling beverage portfolio. Operator: Steve Powers of UBS. Steve Powers (Analyst - UBS): Great, thanks. Good morning. Maybe sticking with the top line, I just want to better understand where you expect to source top-line acceleration from over the remainder of the year, against a difficult macro environment, and increasingly difficult year-over-year compares. I get that you were probably closer to 4% organic growth this quarter excluding the calendar shift and the price mix drag of BIG, but BIG will be with you over the balance of the year. In that context, is there truly enough in your control to have confidence in sequential improvement, or are you expecting the macros to improve? Alongside all that, is it fair to say you're guiding us more towards the lower end of 4% to 5% at this point versus the mid-point? Muhtar Kent (Chairman and CEO): Hi, Steve, it's Muhtar. First, I think we did expect the first quarter to trend slightly below the full year, driven by a couple of things. One, the macros are trending to the bottom -- toward the bottom in the first quarter, recognizing that the environment continues to be challenging, but we will continue to monitor that closely. The launch of our new campaign in the first quarter will certainly benefit the back half of the year. The benefit of Olympics marketing as we move into the second and third quarter, one less selling day which certainly you also mentioned. I think we are confident definitely in the strategy and initiatives in place to support our growth targets over the course of the year, and believe that we will land again in the corridor that we have stayed at in the past in February. James or Kathy, do you want to add anything? Kathy Waller (CFO): No. Muhtar Kent (Chairman and CEO): All right. Operator: Mark Schwartzberg of Stifel. Mark Swartzberg (Analyst - Stifel Nicolaus): Thanks. Good morning, everyone. A question on North America. We now have the filings you've given us, and we can therefore see the level of profitability here in CCR, which is pretty low. I think when you back out the numbers, you get a 2% operating margin. I'm sure there's some accounting matters in there that this isn't the forum to go into, but it does raise the question of what really has been going on in terms of profitability for CCR here in North America. Could we -- if you think it's appropriate, I think it would be helpful to talk a little bit about the trends in that business as you have seen them, now that we're seeing a level -- the margin I'm getting is a 2% operating margin. Can you talk a little bit about the trends and what you think they reflect?


It certainly speaks well to what you get left behind, if you will, but it raises questions about what someone might pay for that kind of business?

Kathy Waller (CFO): Sure, Mark. There are really -- we look at the margins in CCR, the three primary drivers for what you're seeing. First of all, we have shifted some of the territories. We have transitioned some territories to date. We did that obviously before we put the financials out there earlier this quarter. Then if you remember, we incurred back in early 2010, 2011, 2012 time period, there was a significant hit to us from a run-up in commodity prices that certainly adversely impacted margins. Then the third thing I would say was we had to incur incremental costs to prepare that business for now being ready to be franchised and to strengthen that business. I think what we're seeing is improvement in the results that I would say today. Those three things really are impacting what you saw in the financials that we put out there. Operator: Bryan Spillane of Bank of America


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There is an ongoing mechanical effect that creates a negative price mix for this group, which you can see over the years in Asia-Pacific. In 2013 full year it was minus 4%. In 2014, it was minus 2%. In 2015, it was minus 2%. In the first quarter of 2016 obviously it was minus 5%, but it was cycling a very atypical plus 3% in the first quarter of last year.

I think what you will see is in the future quarters, it is a little volatile and bumpy, but the long-term trend is for a negative price mix in Asia, because of the dynamic of the fast growth of the emerging markets versus Japan and Australia. Operator: Ali Dibadj of Bernstein. Ali Dibadj (Analyst - Bernstein): Hi, guys. I'm still getting a lot of skepticism from investors about the 4% to 5% organic revenue growth target for the year. Openly, you don't sound 100% confident, and it feels likes there's a lot of kind of messiness and moving parts. Can you try again? Can you talk about what specifically you're seeing right now that gives you confidence in the 4% to 5% organic sales growth for the year? Clearly whether it's a 3% or a 4%, you delivered a 3% in some sense this quarter, so you're below pace. Maybe in that you can tackle what you expect Eurasia, Africa to get to, why do you expect it to get better? Europe, you mentioned you're going to invest more and you hope that to get better, but we've sometimes heard that before. Why is it going to be better in Europe? Then maybe as a jumping-off point as well, you can talk about what you're learning in North America, because that seems to be doing better for sure. A footnote, I'm not quite sure where you grow organically North America, because you want us to add 3 points back for concentrated sales up to unit case sales for one day missing. I'm not quite sure how to get there, so some explanation would be great. But just more specifics, very clearly on what gives you the confidence in your top-line target for the year? Thanks. Muhtar Kent (Chairman and CEO): Ali, I'll start just by saying, as I indicated, first on the core, with one less selling day and on the core price mix of the core business without BIG, we certainly did get to the 4% in this quarter. What we feel looking at the downhill comparisons and looking at also all the programs in place, looking at how our business performance in all the different quarters and different groups, we feel confident that we still will achieve what we have said in February in terms of the top line for the full year. The marketing program, the additional marketing, the new marketing program that has just been launched, and then not having the one less selling day. Then also the continued franchising and all the programs that the bottlers have in place. Our US business is performing very well with its revenue growth, with its price mix, with its brands, with its portfolio. That will continue in -- we have every confidence that it will continue. Then we will see -- we do believe that macros have -- are at the bottom, and that there will be in the second half a certain degree of improvement in the macros. Even if they do not -- if they stay the same, we feel confident with the current macro situation that we will get to the corridor that we have specified, we have indicated and shared with you in February. Any other comments, James, Kathy? James Quincy (President and COO): No, I think the one thing I would add, Ali, is obviously there's a strong momentum in the North America business. We called that out as the place where the strategies are working. Then the other countries I put in the other two buckets, there's degrees of implementation of the strategy. You can go to around the world. There were places which were struggling in 2014, and maybe even in 2015. As we've been executing the strategy, the momentum is starting to come back to some of those countries, and it's starting to build over time. I think, as Muhtar said, the first quarter was within the envelope of expectation for our guidance, and we can see based on what we are doing within our control, within a reasonable scenario of macros, we will stay within that corridor for the rest of the year. But in the end, only results will answer the questions.


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Brett Cooper of Consumer Edge Research. Brett Cooper (Analyst - Consumer Edge Research): Thanks. The re-franchising that you announced today includes the creation of a new bottler from outside the industry. You have spoken a lot about the collective willingness of your existing bottlers to invest and a desire for more territory. Can you help us understand why you went outside of the existing system for this re-franchising? Is there something you're seeing from other new bottlers that makes this more appealing to you guys? Muhtar Kent (Chairman and CEO): I think on that, predominantly we have existing bottlers that are expanding, if you look at the percentages of territories that have been franchised. Then we have, in order to ensure that we can get to the right level of diversity in our bottling business and the right level of also representation, we have also selected some new partners like in Florida, like in Chicago, and like now, the most recent one announced. We feel that is a healthy mix and that's also a healthy balance, and we have the right -- very much the right approach and the right alignment with our expanding bottling partners, whether they are just entering our system, or they are proven expanding bottlers like the ones that we have mostly franchised new distribution to in the past year. Operator: Bill Schmitz of Deutsche Bank. Bill Schmitz (Analyst - Deutsche Bank): Hi, good morning. Can you guys give us a little bit more granular bridge on the gross margin decline this quarter, and then maybe some broad-stroke outlook for the rest of the year? I know the comps get easier as the year progresses, but it would be really helpful to aggregate the FX impacts, some of the re-franchise impacts, then what you're thinking for the rest of the year? Kathy Waller (CFO): Certainly, Bill. Really, the gross margin decline is really impacted by two things, really. It's currency and it's the structural impact. Currency, I think like 80 basis points, would have added 80 basis points back to our gross margin. The structural impact actually would add significantly more than that. It's really as simple as that. It's really about currency and our structural adjustments. Operator: Kevin Grundy of Jefferies. Kevin Grundy (Analyst - Jefferies & Company): Thanks, good morning. Question, how much of the slow-down in the top line in the quarter was macro slowing in the NARTD category versus execution? You spoke to share gains in both stills and sparkling, so it would certainly seem to be broader slowing in the category? Then of course there's been a lot of discussion on the top line. It would seem like the lower end of your 4% to 5% organic sales outlook would be prudent at this point. A follow-up question on that. How much visibility do you have on productivity and other levers to deliver the high end of the ES growth guidance range, should you come in toward the lower end on the top line? Thank you. James Quincy (President and COO): Let me take a bite of that, Kevin. I think the answer on the slow-down, we don't get all the category numbers necessarily. Clearly, as we're gaining share in that top-line number, there's got to be some weakness in the category versus the long-term target of 5%. I think we talked a little bit about that at CAGNY, about how our expectations for 2016 and 2017 were below the long-term 5% dollar value for any RTD. There's definitely some of that. I think you can see the macros influencing the industry in the sense that a number of the emerging markets, particularly the commodity ones, where we have had the slow-down, and that's clearly flowing through into the industry. I think what I would highlight is we're going to focus on what we can control. We have a long-standing game plan of what to do in countries that are in crisis, focusing on really gaining a lot of share to set ourselves up profitably for the long-term, as we did in a lot of countries in the past. It seems to be working now as we gain share in the Chinas and the Russias and Brazils. It will pay off in the end. I think the visibility, look, we are managing to our corridors at the top and the bottom line. We feel that this quarter was within the envelope. Clearly the macros slightly better, slightly worse, will be an influence in where we end up; but we've got a lot of management left to do in the balance of the year.


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Bill Chappell of SunTrust. Bill Chappell (Analyst - SunTrust Robinson Humphrey): Thanks, good morning. Can you just -- Kathy Waller (CFO): Good morning. Muhtar Kent (Chairman and CEO): Good morning, Bill. Bill Chappell (Analyst - SunTrust Robinson Humphrey): Talk a little bit more about, now that you've unveiled the one-brand packaging -- I guess it's being launched in Mexico -- expectations for that, and maybe what you've learned as you've tested it out? I say that just -- I understand it's certainly going to be more efficient from an advertising, marketing front on the one brand strategy, but didn't know if you expected a sales lift, or if there's been any confusion from consumers as they have seen it? Thoughts as we've started to launch that? Muhtar Kent (Chairman and CEO): Bill, this is Muhtar. We've said from the beginning first that the new campaign is not just a new campaign, but also it's a new strategy in terms of the one-brand strategy, and that it's got many advantages. We expect it to give us significant efficiencies and effectiveness. But also in terms of how we communicate with our consumers, it will certainly play into that as we execute the strategy, and we've now launched the new campaign. Then I'll let James comment in terms of you asked the Mexico specific example, but also there's also many other places where it's been tested, and tested favorably. Go ahead, James. James Quincy (President and COO): Yes, Bill, a few thoughts. One, the initial pilot markets, the two sources of very clear impact were one, it helped us expand and grow the zero-calorie variant of Coca-Cola


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Thank you. Muhtar Kent (Chairman and CEO): One point I would just add, Amit, would be that the US compared to the rest of the world, the prevalence of small packages was much less in the United States three or four years ago compared to the rest of the world. If you look at Europe and places like Spain, or if you look at many countries in Latin America, you had much more prevalence of smaller packages then in the United States. In a way, the United States in the last four or five years, but particularly last two and a half years, has moved very rapidly to the 12-ounce glass to the 8-ounce glass to the 7.5-ounce can, to the 8.5-ounce aluminum bottle. That has really worked. Those are all growing double digits in the United States because of two -- the consumer customer preferences, and also benefiting our system because they have a higher price per liter. That's in a way playing out from what was already prevailing in many parts of the world in the past. Operator: Vivien Azer of Cowen and Company. Vivien Azer (Analyst - Cowen and Company): Good morning. Kathy Waller (CFO): Good morning. Vivien Azer (Analyst - Cowen and Company): I was hoping we could talk a little bit more about the health of brand Coca-Cola


Company is well-positioned to deliver long-term value to our shareholders. As always, we thank you for your interest, your investment in our Company, and for joining us this morning. Operator: Thank you, speakers. That concludes today's conference. All rights reserved (c) 2014 TheStreet, Inc. Please feel free to quote up to 200 words per transcript. Any quote should be accompanied by "Provided by TheStreet" and a link to the complete transcript and www.thestreet.com. Any other use or method of distribution is strictly prohibited. THE INFORMATION CONTAINED IN EACH WRITTEN OR AUDIO TRANSCRIPT (the "TRANSCRIPT") IS A REPRODUCTION OF A PARTICULAR COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION. THE TRANSCRIPTS ARE PROVIDED "AS IS" AND "AS AVAILABLE" AND THESTREET IS NOT RESPONSIBLE IN ANY WAY NOR DOES IT MAKE ANY REPRESENTATION OR WARRANTY REGARDING THE ACCURACY OR COMPLETENESS OF THE TRANSCRIPTS AS PRODUCED, NOR THE SUBSTANCE OF A PARTICULAR COMPANY'S INFORMATION. THE TRANSCRIPTS ARE PROVIDED FOR INFORMATIONAL PURPOSES ONLY. THESTREET IS NOT PROVIDING ANY INVESTMENT ADVICE OR ENDORSING ANY PARTICULAR COMPANY.