At this time, I would like to welcome everyone to The Coca-Cola 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. All participants will be in a listen-only mode until the formal question-and-answer portion of this call. 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. Timothy K. Leveridge - Vice President & Investor Relations Officer: Good morning and thank you for being with us today. I'm joined by: Muhtar Kent, our Chairman and Chief Executive Officer; James Quincey, our President and Chief Operating Officer; and Kathy Waller, our Chief Financial Officer. Before we begin, I'd 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 & Information tab in the Investors section of our company website. These schedules 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…

Thank you. We will now begin the question-and-answer session. Our first question is from John Faucher of JPMorgan. Your line is now open.

Thank you. Good morning, everyone. Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Morning. Kathy N. Waller - Chief Financial Officer & Executive Vice President: Morning.

Morning. So as I look at your revenue performance this quarter, I guess it highlights a concern that maybe the portfolio is still a little too CSD heavy, despite some of the great results on the non-carb side. And James talked about this at CAGNY, 5% NARTD dollar growth longer-term, but given the fact that you guys still under-index on the non-carb side, that's providing really the majority of the growth in both dollars and volume for the category, don't you need to, I guess, further accelerate the shift in the portfolio away from CSDs, sparkling, into non-carb, and is there a way to move that faster? And I guess on top of that, obviously the weakness in the CSD side this quarter with flat volumes, what do you think is really the right volume number on the CSD side going forward that gets you to your algorithm? Thank you. Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Hi, John. It's Muhtar here. I'll just preface just by saying the following and then pass over to James, but first, you know how much we've done and how much we focus on creating successful brands in our still portfolio. And of the 20 $1 billion brands we have now, 14 of them are still brands. And our still business is performing well. And whether we take value-added dairy or enhanced hydration, or juices and nectars, or juice drinks, we play in all of those categories. In 2015, we gained share in all of those categories. And if you look at whether it's in developed markets or emerging or developing, our still beverage portfolio is being enhanced all the time and even in the case of waters and premium waters from Japan all the way through to Latin America, performing very…

Thank you. Our next question is from Steve Powers of UBS. Your line is now open.

Great. Thanks. Good morning. Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Morning. Kathy N. Waller - Chief Financial Officer & Executive Vice President: 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. So in that context, is there truly enough in your control to have confidence in sequential improvement, or are you expecting the macros to improve? And I guess, alongside all that, is it fair to say that you're guiding us more towards the lower end of 4% to 5% at this point, versus the midpoint? Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Hi, Steve. It's Muhtar. Well, 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 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; and 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 stated in the past, in February. James or Kathy, you want to add anything? James Quincey - President & Chief Operating Officer: No. Kathy N. Waller - Chief Financial Officer & Executive Vice President: No.

Thank you. Our next question is from Mark Swartzberg of Stifel. Your line is now open. Mark Swartzberg - Stifel, Nicolaus & Co., Inc.: Thanks. Good morning, everyone. 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 kind of like a 2% operating margin. And 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. 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've seen them, now that we're seeing a level – the margin I'm getting is a 2% operating margin. So can you just 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 N. Waller - Chief Financial Officer & Executive Vice President: So sure, Mark. We look at the margins and CCR, there are three primary drivers of what you're seeing. First of all, we have shifted some of the territories, so we have transitioned some territories to-date. And 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. And then I guess the third thing I'd say was we had to incur incremental costs to prepare that business for now being ready to be refranchised and to strengthen that business. And I think what we are seeing is improvement in the results that I would say today. But those three things really are impacting what you saw in the financials that we put out there.

Thank you. Our next question is from Bryan Spillane of Bank of America. Your line is now open.

Hi. Good morning, everyone. I just wanted to go back and tie, I guess, a couple of comments that have been made about the effect that BIG had on organic sales growth for the quarter. So I just want to make sure I understand it correctly. If we look at sales excluding BIG and we add back the effect of the extra day, organic sales growth was around 4%. Is that correct? James Quincey - President & Chief Operating Officer: It's James here. Look, volume grew 2%. Core price/mix was 2%. So that's the right answer. Kathy N. Waller - Chief Financial Officer & Executive Vice President: Yes.

Thank you. Our next question is from Judy Hong of Goldman Sachs. Your line is now open. Judy E. Hong - Goldman Sachs & Co.: Thank you. Good morning. So I guess one of the markets where you pointed out you were taking more actions is Europe, and certainly, from a top line perspective, continues to be a pretty challenged market, deflationary pressure there. So wanted to just get a little bit more color, just really what are some of the more tangible actions that we can see? And how much dollars are really going in in terms of the marketing investments that we should expect to see some of that improvement really coming through and how long that would sort of take as you think about for the balance of the year? James Quincey - President & Chief Operating Officer: Yeah, Judy. It's James here. A couple of things on Europe, one, it is worth noting that in this quarter, there was a disruption to the business in GB due to the supply chain. So there's a one-off impact that we expect to see not recurring in the balance of the year. So I think that's worth taking into account. And it was a material impact. Now, as looking for the rest of the year, you will see in the numbers we had pretty decent price/mix in Europe in this quarter. And we are also looking to see volume improving versus the first (34:40) quarter, not just because of the supply situation, but also the new programs, the launch of the new marketing campaign, the launch of a new Coke Zero variant starting in GB, plus the Europe Cup, which will be in France this year. And, of course, shortly, we will hopefully complete Coca-Cola European Partners, where there are very strong plans being put in place to drive that forward. So I think some temporary factors and the buildup of our ongoing investments should drive a better result in Europe in the balance of the year.

Thank you. Our next question is from Dara Mohsenian of Morgan Stanley. Your line is now open. Dara W. Mohsenian - Morgan Stanley & Co. LLC: Hi. Good morning. I wanted to delve a bit more into the Asia Pacific pricing number in the quarter, a negative 5%. Can you run through how much of that was due to geographic or product mix or other factors and thoughts going forward in the remainder of the year on if that pricing pressure will moderate and how mix should trend in that segment? James Quincey - President & Chief Operating Officer: Sure, James here. I'll come to the numerical piece. Let me start off with the conceptual. (35:54) The Asia Pacific price/mix is always a little bit of an oddity, because it's a group that brings together Japan and Australia, which are very high revenue markets that don't grow as quickly, along with a lot of emerging markets, not just China but India, Indonesia and the Philippines, which grow much faster. So there's a kind of an ongoing mechanical effect that creates a negative price/mix for this group, which you can see over the years in Asia Pacific. So 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. So 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.

Thank you. Our next question is from Ali Dibadj of Bernstein. Your line is now open. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Hey, guys. So I'm still getting a lot of skepticism from investors about the 4% to 5% organic revenue growth target for the year. And openly, you don't sound 100% confident and it feels like there's a lot of kind of messiness and moving parts. So 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? I mean, clearly, whether it's a 3% or a 4%, you kind of delivered a 3% in some sense this quarter, so you're below pace, so maybe in that you can tackle where you expect Eurasia Africa to get to, why you'd 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. So why is it going be better in Europe? And 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. And a footnote, I'm not quite sure what you grow organically North America because you want us to add three points back for concentrate sales up to unit case sales for one day missing. I'm not quite sure how to get there, so some explanation there would be great. But just more specifics very clearly on what gives you the confidence in your top-line target for the year. Thanks. Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Ali, I'll start just by saying, as I indicated, first, on the core, with one less…

Thank you. Our next question is from Brett Cooper of Consumer Edge Research. Your line is now open.

Thanks. The refranchising that you announced today includes a creation of a new bottler from outside the industry. You've spoken a lot about the collective willingness of your existing bottlers to invest and a desire for more territories. So can you help us understand why you went outside of the existing system for this refranchising? And is there something you're seeing from other new bottlers that makes this more appealing to you guys? Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Yeah. I think on that, predominantly, we have existing bottlers that are expanding, if you look at the percentages of territories that have been franchised. And then we have, in order to ensure that we can get 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. And we feel that that is a healthy mix and that that's also a healthy balance. And we have, 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've mostly franchised new distribution to in the past year.

Thank you. Our next question is from Bill Schmitz of Deutsche Bank. Your line is now open.

Hi. Good morning. Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Morning. James Quincey - President & Chief Operating Officer: Morning, Bill.

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 sort of get easier as the year progresses, but it'd be really helpful to just aggregate the FX impacts, some of the refranchise impacts and then kind of what you're thinking for the rest of the year. Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Kathy? Kathy N. Waller - Chief Financial Officer & Executive Vice President: Yeah. Certainly, Bill. So really, the gross margin decline is really impacted by just two things really. It's currency and it's the structural impact. Currency, I think added like 80 basis points – would have added 80 basis points back to our gross margin and the structural impact actually would have added significantly more than that. So it's really as simple as that. It's really about currency and our structural adjustments.

Thank you. Our next question is from Kevin Grundy of Jefferies. Your line's now open.

Thanks. Good morning. So question, how much slip-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 sparklings, so it would certainly seem to be just broader slowing in the category. And 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. So a follow-up question on that, how much visibility do you have on productivity and other levers to deliver the high end of the EPS growth guidance range, should you come in toward the lower end on the top line? Thank you. James Quincey - President & Chief Operating Officer: Let me take a bite of that, Kevin. I think the answer on the slowdown, we don't get all the category numbers necessarily. And but 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 NARTD. So there's definitely some of that. And I think you can see the macros influencing the industry in the sense that it's the number of the emerging markets, particularly the commodity ones, where we've had the slowdown, 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. It's worked in a lot of countries in the past, and it seems to be working now as we gain share in the Chinas and the Russias and the Brazils. It'll pay off in the end. I think the visibility, look, we're 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 on where we end up. But we've got a lot of management left to do in the balance of the year.

Thank you. Our next question is from Bill Chappell of SunTrust. Your line is now open.

Thanks. Good morning. Kathy N. Waller - Chief Financial Officer & Executive Vice President: Morning. Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Morning, Bill.

Could you just talk a little bit more about, now that you've unveiled kind of the one brand packaging in, I guess it's being launched in Mexico, expectations for that, and maybe what you've learned as you've tested it out? And I say that just – I understand it's certainly going to be more efficient from an advertising, marketing front to kind of, 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've seen it, just kind of thoughts as we start to launch that? Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Yeah, Bill, this is Muhtar. We 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. And 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. And 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 being tested, and tested favorably. Go ahead, James. James Quincey - President & Chief Operating Officer: Yeah, 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 by driving availability and driving trial. So we would expect to see benefits on the zero sugar variants. The second big area of benefit is, it helps us create what we would call corporate blocking. In other words, we execute in stores all the variants of Coca-Cola together as one big block, has a much greater store impact, visual impact, engagement with people who are shopping the stores. I think slightly more strategically, and back to Muhtar's point, this is an implementation of a strategic idea. I'm sure we'll evolve it. I'm sure we'll make it better, but it's the strategic idea that's important. It's not just about the efficiency in the advertising. It's about helping consumers join and stay in the Coca-Cola franchise, whatever of the ingredients they want to manage, including their management of added sugars, whether that's in drinks or any other categories that have added sugar in. So this has a number of benefits that are going to play out strategically, and we will keep improving the execution.

Thank you. Our next question is from Amit Sharma of BMO Capital Markets. Your line is now open.

Hi. Good morning, everyone. Kathy N. Waller - Chief Financial Officer & Executive Vice President: Morning. James Quincey - President & Chief Operating Officer: Morning, Amit.

James, I just wanted to, as we look to the rest of the year and 2017 as well, can you also talk about the progress of the small pack architecture? Like, we've heard a lot about that in North America, but if you can give us a little bit more detail as, where are we with that in rest of your divisions? And is that a source of incremental growth or price/mix as we go forward? James Quincey - President & Chief Operating Officer: Yes. A few thoughts then. Clearly, North America has had a lot of traction in pushing forward smaller packages, away from the traditional two-liter and multi-pack of cans. It is worth noting that some of those packages are premium packages, and some of those are intended to create affordability or low price point entry points for the category, whether it be the mini cans. And that combination does generally help price/mix. You can see that starting to roll out across other parts of the world. I think Latin America's traditionally been very good at that. You do see more of it coming in to Asia Pacific and Eurasia on a global basis. The immediate consumption packages outpaced general volume growth. So it is part of our strategy to push more into smaller packages. Just this last month, India launched a new technology, a very small package with a special technology that allows a much longer shelf life in ambient environment of rural India, so it will be able to get to many more places. So, a lot of innovation in the technology, a lot of innovation in the package, in the sizes and the occasions and the channels, so that we can bring down the price points for affordability, take advantage of premiumization, and also offer people the right amount of any beverage that they want to actually consume.

Thank you. Ahmet Muhtar Kent - Chairman & Chief Executive Officer: One point I'd just add, Amit, would be that the U.S. compared to the rest of the world, the prevalence of small packages was much less in the United States three, 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 than in the United States. So in a way, the United States in the last four, five years, but particularly the 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. And that has really worked and those are all growing double digits in the United States because the consumer and customer preferences, and also benefiting our system because they have a higher price per liter. And so that's in a way playing out from what was already prevailing in many parts of the world in the past.

Thank you. Our next question is from Vivien Azer of Cowen & Company. Your line is now open. Vivien Azer - Cowen & Co. LLC: Good morning. Kathy N. Waller - Chief Financial Officer & Executive Vice President: Good morning. Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Morning. James Quincey - President & Chief Operating Officer: Morning. Vivien Azer - Cowen & Co. LLC: I was hoping we could talk a little bit more about the health of brand Coca-Cola. In your press release, you called out softness either around the total brand family or Trademark Coca-Cola in a number of geographies. And while I appreciate that you have a lot of new initiatives, between Taste the Feeling and new packaging. In the past, you guys have said that it does take time for some of those advertising initiatives to actually gain traction and show up in brand health and volume. So how should we think about the trajectory of Trademark Coca-Cola as you roll out these new initiatives, please? Thank you. James Quincey - President & Chief Operating Officer: Yeah, Vivien, I think a couple of things. One, obviously most of our campaigns are weighted into the second, third and fourth quarters. So those are the biggest quarters. And even Taste the Feeling, we announced it this quarter, but it's only really hitting at towards the end of the quarter and rolling out in the rest of the year, as with the Euro Cup and the Olympics. So I think a lot of the programs are going in later this year. They, obviously, the execution is there. So we would expect to see better performance from Trademark Coca-Cola going into the downhill. I would make one other note, which is the relative change in where global growth is coming from, or industry growth is coming from, a little more in developed and developing, a little less in emerging, tends to create a kind of a portfolio effect that weighs a little more against sparkling and, therefore, Coca-Cola, because those emerging markets tend to be more sparkling orientated. And so you see North America, Latin America, Japan, with stronger stills growth. So we do expect to see growth. We would expect to see it coming back. There is a geographic mix impact, but when we look at the markets, we believe we will be back on track with Coca-Cola.

Thank you. Our next question is from Robert Ottenstein of Evercore ISI. Your line is now open.

Great. Thank you very much. I wanted to follow up on the questions on the one brand strategy and specifically ask when you look at, let's say, the full implementation of that two, three years from now, do you think the benefit will be 50%-50% between cost savings and efficiency and greater demand or how do you see that breaking out? And specifically also in terms of the answer to the prior question on that, how exactly is this strategy helping drive trial and availability for Coke Zero? Thank you. Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Yeah, Robert, it's Muhtar here. I think, first, in terms of the efficiencies, the most important benefit will be simpler and less fragmented communication with the consumer. That will be the biggest benefit, but also it will certainly help create more efficiencies and effectiveness in our non-working EME (55:32) and, therefore, will also provide some productivity in that respect. But the most important benefit will certainly be a less cluttered and better and more direct communication with the consumer base. And in terms of the trial of product, that will certainly come as a result of that, of what James mentioned in terms of better presence in the store, in terms of better merchandising, in terms of better interruptions in the store and also in terms of the communication piece. And we believe that the most important benefit of this will ensue and will come to brands like Coca-Cola Zero with more availability, better communication and have the broad perspective of the global campaign as opposed to the every different brand under the Coca-Cola trademark having their own campaigns. That will be how I think the benefits will come. And we trialed and pilots so far have proven that in Europe and other parts of the world.

Thank you. I would now like to turn the call back to Muhtar Kent for closing remarks. Ahmet Muhtar Kent - Chairman & Chief Executive Officer: Thank you, James, Kathy and Tim. We're in the midst of transforming The Coca-Cola Company to one that's even more focused on our core value creation model of building strong brands, enhancing customer value and leading our franchise system. At the same time, we continue to evolve and strengthen our global bottling system as we accelerate refranchising and as we return to a predominantly concentrate-driven model with significantly higher margins and returns. We remain confident that the long-term dynamics of our industry are promising. And we absolutely believe that The Coca-Cola Company is well-positioned to deliver long-term value to our shareowners. As always, we thank you for your interest, your investment in our company and for joining us this morning.

Thank you, speakers. That concludes today's conference. Thank you for participating. You may now disconnect.