Good day, ladies and gentlemen, and welcome to the Monster Beverage Corporation Fourth Quarter and Year-end 2014 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to introduce your host for today's conference, Mr. Rodney Sacks, Chairman and CEO. Sir, you may begin.

Good afternoon, ladies and gentlemen. Thank you for attending this call. I'm Rodney Sacks. Hilton Schlosberg, our Vice Chairman and President, is with me today; as is Tom Kelly, our Senior Vice President of Finance. Before we begin, I would like to remind listeners that certain statements made during this call may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended, and which are based on currently available information regarding the expectations of management with respect to revenues, profitability, future business, future events, financial performance and trends. Management cautions that these statements are based on our current knowledge and expectations and are subject to certain risks and uncertainties, many of which are outside the control of the company that may cause actual results to differ materially from the forward-looking statements made during this call. Please refer to our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K filed March 3, 2014 as well as our most recent report on Form 10-Q filed November 7, 2014, including the sections contained therein entitled risk factors and forward-looking statements, for a discussion on specific risks and uncertainties that may affect our performance. The company assumes no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. An explanation of the non-GAAP measure of gross sales and certain expenditures, which may be mentioned during the course of this call, is provided in the notes designated with asterisks in the condensed consolidated statements of income and other information attached to the earnings release dated February 26, 2015. A copy of this information is also available on our website at monsterbevcorp.com in…

[Operator Instructions] Our first question comes from Bill Chappell with SunTrust.

Just trying to understand some of the drivers on the top line and sustainability, I think you alluded to at the Analyst Day that lower gas prices were having a benefit, but didn't know if there was seeing that accelerate as we move through the quarter and into this quarter, are if there's anything else? And then also on the Coke partnership now that you've sent out the termination letters, can you kind of give us an idea around the world, are you largely going with a Coke by network, are there some exceptions. Is it 80-20? Just trying to get an idea about that?

Just to deal with the gas prices. I don't think there's been a change since we really discussed it last time. And in fact, you're seeing a little bit of an increase in gas prices. For us -- to say anything more, just be speculative. With regard to the transition, I think it's premature for us at this stage to go -- I think that all would be to ready to say that we have sent out notices to probably the majority, of the AB distributors in the U.S., it's not to all the distributors. We are still negotiating with a number of international distributors and I just think at this point, it would be sensitive and premature to go into more detail on that. But obviously, the idea as we've indicated, in general, when there will be exceptions, will be to move to the Coke system.

Our next question comes from John Faucher with JPMorgan.

Quick question. If you can give us an idea, I guess, 2 questions. If you can give us an idea in terms of the impact of FX on the international numbers in the fourth quarter, and then it seems as though FX is probably fully baked in the January numbers. So it would seem as though that the underlying growth actually probably accelerated a little bit if you exclude FX, so can you give us a little bit of an idea in terms of how the FX is impacting the top line numbers? And then can you talk a little bit about the change in the international profitability levels, how much of that is coming from, let's say more local production versus how much is coming from the more efficient spending that you guys have talked about over the last 12 months internationally?

I think that the earnings change, impact has probably been -- overall probably being about a percent or a little less. We think that again, it's probably going to be of that order going in the first quarter. But again, we're not sure. I just -- I think that at this point, we should speculate on the first quarter going forward, more on that. So your second question?

Our next question comes from Amit Sharma with BMO Capital.

Quick question on operating leverage. We saw a pretty solid operating leverage, favorable leverage here. Can you talk about what's driving that and as you absorb some of Coca-Cola's Energy brand, should we expect that to accelerate even more from this level?

I didn't hear the last part, did we expect?

As you absorb Coca-Cola's Energy brands, are you expect it to be even higher from our operating leverage perspective? And then a tax rate question as well. As you grow profitability in the international market, should we continue to expect tax rate to come down?

So the acquisition of the Coca-Cola brand will be a concentrated model. So it'll be very different to the finished goods model that the company operates at this time. And the Coca-Cola brand that coming into the company will be shown as a separate segment in our financials. So when you talk about operating leverage, the basis of the structure of the income statement will be very different between the 2 entities, because in one case, we sell the finished goods. And in the other case, Coke sells a concentrate, which we'll continue selling the concentrate.

Our next question comes from Judy Hong with Goldman Sachs.

I think John's question was really more my question, which is really related to the international profitability ramp up that you've seen in the last few quarters. Is there way you can give us a little bit color on how much of that is coming from the local production versus some of the selling expense leverage that you're seeing from the investments that you've made and the scale that you're getting in those markets? And then my second question is specific to Asia. I think your sales were up 11.4%. You talked about positive performance in Japan. It is a slowdown from the last quarter, where I think you had 70% plus growth. So a little bit more color just in terms of specifically to Asia was FX a big impact. What are you seeing in terms of the underlying performance in Japan and any other major markets in Asia that you're seeing some traction?

I think that the improved profitability is coming from both, and I don't think -- we don't have the breakup available to provide to you at this point, Judy. With regard to Asia, the results in Japan continued to do well. We did have some slowdown in some of the other countries. In the last quarter, Australia was lower, and that offset the increase somewhat. Just to add a little bit of color, Judy, on your first question. Remember that in Europe, improvement in operating performance there is -- there has been no change because we have been producing locally for some time. So it's only in Japan that we have recommenced production that has obviously impacted positively the numbers in Japan.

Our next question comes from Kevin Grundy with Jefferies.

So 2 quick ones for me. The acceleration in the category that we're seeing in the U.S., can you kind of point to what you think, other than lower oil prices, might be driving some of the balance that we see in the category? And then second unrelated question. Cash investments is building on the balance sheet. You guys haven't bought back stock recently, but I guess, that's sort of the expectation once the Coke deal closes. Can you talk about your decision not to buyback stock and what we should expect?

I think that the acceleration is really -- there is a slightly improved feeling generally in the U.S. and petrol prices are down, the gas prices are down. But other than that, we've just seen that, that bounce back and as we've indicated, it doesn't seem to be followed through in all categories of beverages.

On the second point, Kevin. We with the inflow of funds from the Coca-Cola transaction, the board is examining or will be examining various ways to return that cash to stockholders. And we've been pretty consistent about that for some time since the deal was announced.

Our next question comes from Mark Astrachan with Stifel. Mark S. Astrachan - Stifel, Nicolaus & Company, Incorporated, Research Division: I wanted to ask about the disruption in the business from a transition of distribution standpoint. So you sent out the letters earlier this month, so it's been a few weeks since then. So I'm curious what you're -- or what the reaction has been in terms of in-stock out-of-stock that sort of thing? And then broadly before that, obviously, a lot of the distributors knew it was coming. And so could you talk about whether there was any impact in the December, quarter month of January, has it accelerated, as speculation has mounted in sort of not just what the impact has been, but how do you maintain the focus here as you go into end of March on a transition?

We took steps at the offset to communicate with the AB Distributors, and gave them certain assurances regarding inventory purchases that we would repurchase, they wouldn't get stuck with inventory. Also, you will appreciate that their are severance fee is dependent on their sales in the 12 months, immediately preceding the termination. So it is in their interest, obviously, to continue increasing their sales out in order to maximizing their own severance payments, and we felt that by giving them the assurance that we would pick up all or buyback all several inventories that there was no reason for them to start trying to rationalize their inventory or try and cut down and only focus on the main SKUs and not carry the supporting brands. And we've had -- we think we had a good effect. This correspondence had a good effect. And we've really not experienced any noticeable disruption from the AB Distributors as compared to our other distributors. I think that continued to perform nicely, you can see that from the results and we are not seeing any despair or differences between the AB Distributors on the one side and Coke distributors or some of the independence on the other side. The trend that we had from these distributors before the notice has continued into the fourth quarter and continued even in the first couple of 2 months of this year. So we aren't seeing that, we are being able to manage that reasonably comfortably. Going forward, obviously, we will see how that goes. We're hoping that by giving the AB Distributors quite a lot of notice, being able to manage these inventory issues and pick up issues, will enable us to also make sure inventory is in place at the Coke plants and at the Coke branches so that when the change over occurs, they will be ready to go with the inventory as well. So we obviously are trying to minimize the disruption that will occur at that point in time. And it will occur slightly, at a slightly different dates, it's not -- the lot of principal dates are probably closer to the early April, there are dates that take place at different times. Mark S. Astrachan - Stifel, Nicolaus & Company, Incorporated, Research Division: Hilton, can I just ask one follow-up? You said that the board is going to make a determination, about what to do with the cash at some point in time. Is that going to be before or after you have 2 Coke appointees on the board?

Well, the board can't make a decision, I would believe, until the cash comes into the company. So we have to wait for the close to make a final decision, a final determination. And I imagine that the 2 Coke appointees will be part of that decision. The board's been considering it and continues to do so.

Our next question comes from Caroline Levy with CLSA.

A couple of questions. The fourth quarter profits in the United States were bigger than the third quarter for the first time I've ever seen. And I'm just wondering if there was any sort of overshipment of anticipation of any other change over that happened at that point? Or, in fact, you had the acceleration in growth rate in the fourth quarter and if you look at 11% in January, that's actually a slight deceleration. So was there anything going on in the fourth quarter that inflated U.S. profits?

Just lower expenses. There were no, there were absolutely -- there's no issue with product in any quarter not been related to that quarter.

And would the -- is the lower profit, there wasn't anything onetime -- I'm sorry, the lower expense, there's nothing onetime about that, that we're going to have to lack next year?

I'm just looking right now.

And then while you're looking, if I might just ask, when you -- when Coke's deal is finished, and you look at territories where you already have full distribution, like CCE or the U.S. where you are fully distributed, but now you'll be a Coke brand and a Coke system, do you anticipate an acceleration of growth just as a result of the whole system being firmly behind you? Are there opportunities for an acceleration and growth from that?

We've been consistent, we've actually said there would be.

Can you tell us how?

Well, we think that there is an alignment, there's an alignment with them on their own brands in each country now as we go forward. There is a -- a longer term, I think commitment where we will be -- our brands, and we as a company, I think will be viewed as part of the group and as part of the longer term, the brands are also will be viewed as more. As part of the longer-term plans. I think outside of the system, I think even the bottlers and distributors have a much shorter horizon for -- vision for the brands. And so I think, they restrict some of their capital investments and efforts, because they just have a different attitude to the brand. We think that we will have a for -- mal focus on cooler programs and vending on those are the things and some of the specialty accounts where they go into key accounts, we will be part of that now those were things that we really didn't ever really participate in before.

And I think one of the big things as well, if I may just add one comment to what Rodney said, which is correct, was the fact that we now control their inventory brand. I think will enable us to prevent a certain degree of duplication, a certain degree of possible retaliation from one brand to the other. So we'll be able to manage those brands as a system. And then, Karen, I looked at your -- we quickly did a review, Tom and I, and I can't see anything that particularly hits as a one-off issue in the quarter. There seemed to be numbers that really pretty consistent there. Obviously, the only thing that comes up from time-to-time but there's nothing material that I could even put my finger on.

This concludes our question-and-answer session. I would now like to hand the call back to Rodney Sacks for any closing remarks.

On behalf of Monster, I'd like to thank everyone for their continued interest in the company. We continue to believe in the company and our growth strategy and remain committed to continue to develop and differentiate our brands and to expand the company both at home and abroad. We are particularly excited by the new opportunities that we have going forward with a robust portfolio of energy drink products comprised of our Monster Energy drink line, together with The Coca-Cola Company's Energy brands, and in particular, NOS, which grew its sales and market share in the United States in 2014. We believe that our agreement with The Coca-Cola Company will enable us to focus on our core energy business, while leveraging the strength of The Coca-Cola Company's powerful distribution and bottling system on a worldwide scale. Thank you very much for your attendance.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program. You may all disconnect. Everyone, have a great day.