At this time, I’d like to welcome everyone to The Coca-Cola Company’s Second Quarter 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 the 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 any questions. I would now like to introduce Mr. Tim Leveridge, Vice President, Investor Relations Officer. Mr. Leveridge, you may now begin.

Good morning and thank you for joining us today. I’m here with James Quincey, our Chairman and Chief Executive Officer; and John Murphy, our Chief Financial Officer. Before we begin, I'd like to inform you that we posted schedules under the Financial Information tab in the Investors section of our company website at www.coca-colacompany.com. These schedules reconcile certain non-GAAP financial measures, which may be referred to by our senior executives during this morning's discussions, to our results as reported under generally accepted accounting principles. I would also like to note that you can find additional materials in the Investors section of our company website that provide the accompanying slides for today’s discussion and an analysis of our margin structure. In addition, this conference call may contain forward-looking statements, including statements concerning 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. We recognize there may be lots of questions, please limit yourself to one question. If you have more than one, please ask your most pressing question first and then re-enter the queue. Now, let me turn the call over to James.

Thanks, Tim, and good morning everyone. We’ve just closed the books on what has arguably been the toughest and most complex quarter in Coca-Cola history. And given the global pandemic, of course, this comes as no surprise. From the initial lockdowns and closures of hundreds of thousands of our customer outlets to the gradual reopening and now another round of spikes in various countries, the impacts have been profound. In this challenging environment, we’ve seen some remarkable actions around the world. And I’d like to express my thanks to the countless people on the frontlines who are working to improve our communities worldwide. And I’d also like to recognize my colleagues across The Coca-Cola Company and our bottling system for their tireless efforts in prioritizing the safety of our people, ensuring the resiliency of our supply chain, supporting our millions of customers globally, and for being a force of good in their communities. As we navigated the quarter, we used a combination of focus and flexibility to manage through what we believe will be the peak levels of global lockdown. John will discuss the results in further detail, but as you think about the quarter and consider the future, I’d like to highlight the strong relationship of our performance with the intersection of two key factors. The trajectory of our business trends in the near term is closely linked to the size of our away-from-home business in any given country and the level of lockdowns in the market. For example, markets like Western Europe, which had high levels of restrictions and a meaningful away-from-home exposures; and in India, which had an intense lockdown, experienced significant impacts. However, many of our Latin American markets with less restrictive measures and a lower away-from-home presence fared better. Further as we went through the…

Thank you, James, and good morning, everyone. I’d like to spend my time this morning focused on three things. One, some commentary on the quarter and the rest of year outlook. Two, thoughts on the broader and longer-term implications to value creation for our company and our system. And, finally, on our capital allocation priorities. As expected, our second quarter was one with significant hurdles to overcome as lockdown and social distancing requirements placed profound pressures on our customers and consumers. In the second quarter, volumes were down 16% driven by declines in higher revenue per case away-from-home channels. Organic revenues declined 26% driven by a 22% decline in concentrate shipments and a 4% decline in price/mix. The gap between concentrate shipments and unit cases this quarter is attributable to cycling the timing of shipments from last year, primarily in EMEA and Latin America, along with rationalization of stock levels after some safety stock building in the first quarter. The majority of the price/mix pressure during the quarter was driven by segment mix from meaningful declines in our cost of business in Global Ventures, as well as Bottling Investments. Underlying gross margin was down approximately 300 basis points, primarily driven by volume declines in capital intensive finished goods businesses like Costa, foodservice in North America and our Bottling Investments, in addition to negative package and channel mix pressure. Despite the significant pressure of top-line and gross margin, in addition to the currency headwinds, comparable operating margins were only slightly lower than last year, given the effective management of our SG&A expenses. While we had a considerable amounts of leverage during the quarter from cost management, part of it is attributable to timing due to modifying our full-year marketing spend forecast, which included an adjustment from the first quarter. As we…

Thank you. [Operator Instructions] Thank you. Our first question comes from Bryan Spillane with Bank of America. Please go ahead. Your line is now open.

Hi, thank you, and good morning, everyone.

Good morning.

I guess my question is just around the balance between efficiency and growth. We’ve come a long way in the last couple of years to exit last year to be at the top end of the revenue growth algorithm. And I guess, now we’re contemplating trying to get back to that level, but at the same time, with a focus on efficiency. So, James, maybe if you could talk a little bit about organizationally how you’re just going to balance, trying to achieve both of those things at the same time.

Yes, thanks. Thanks, Bryan. Look, clearly we've got to do both. If we just aim for top line growth, we – I'm sure we'll get back up to the top end of the algorithm where we were for the last few years. But if we do that without focusing on efficiency, that's not going to work for the company or work for the bottlers or work for the shareholders. And the inverse is true. If we just stop worrying about the top line and focus on efficiency, we'll do well for a year or 2, but then the wheels will come off. So we've got to do both. And the way we're going to approach it is to really attack the priorities we've talked about. In the good years, the pre-COVID years, we got up to the top end of the revenue growth thing. We were doing a lot of innovation. We were curating a lot of brands. We knew we had things that were working really well and other brands that were struggling. And as we were at the top end of the growth, you’ve seen that we need to not just remove the zombie SKUs but prune down some of the explorer brands so you can refocus on those with most potentials. When times are going well, you set a certain pace for that sort of activity. And now in the COVID times and in these more impaired economic times, for at least for the near future, we need to accelerate that. So that's why we said, look, we need to – let's really bring forward the agenda of which every wave of innovation generates, you diverge and then you need to converge on the best – the best product to excel. Let's accelerate that. Let's get really…

Your next question comes from the line of Lauren Lieberman with Barclays. Please go ahead. Your line is now open.

Great, thanks. Good morning. I was hoping -- you touched a bit, of course on revenue growth management, but I think that’s an area where we've all been, I think, well educated on revenue growth management as a great tool to drive growth in, let's call it, roughly economic expansion. And then in an economic downturn, still probably a bit less explored, the price/mix performance in Latin America, and I think you highlighted Mexico in particular in the press release, was really notable. So, if you could talk a little bit about where you are in terms of implementing revenue growth management strategies to benefit you or to help support the business in a downturn, is Mexico simply a lead market and there's much more to come on that front? But additional color there, I think, could be helpful. Thanks.

Sure, sure Lauren. Yes, I mean, interestingly, the whole approach for revenue growth management, certainly in one of its early iterations at the company with the bottlers actually came at times of economic difficulty, particularly in Latin America. So, it is an approach that is a capability, a way of doing things that is just as useful in the good times as it is in the bad times. And so once you see us applying that capability, which the company, together with the bottlers, have spent the last few years refreshing, it's now being directed at the new challenges. And as you say, whereas we might have been putting more emphasis on using it to develop the premium opportunities in the last few years, we're going to have to use it to focus on some of the affordability opportunities. Examples of those is really, for example in Mexico, but also places like Brazil and a number of others, really focusing down on refillable packaging. The benefit of refillable packaging in the context of RGM is, of course, you can – the economics allow you to offer the product at a lower price point. So we can really connect to what is likely to be some economic stress on disposable income, and therefore the need for affordable products, for refillables and that works in Latin America, that works in Africa, that works in a number of different places. But it also can – as a capability, RGM can work in countries like Japan. In Japan, we sell a lot of half-liter PET bottles for something like Coke. And in this current environment, what we're going to do is try and split that up. So have one slightly bigger package and one slightly smaller package. The smaller package, obviously, will allow us to offer a lower price point; and the slightly bigger package will be a sharing package which will offer more advantage per liter. And so we can really use this capability to come in and adapt the portfolio, not just in the emerging markets, but also in the developed markets, knowing that, yes, there will still be people looking for premium products and stock up. But there are also people under a lot of disposable income pressure, and there, the number 1 objective, at least in the beverage category for us, is to bring down the entry price point. What's the lowest price at which you can buy a Coke?

Your next question comes from the line of Dara Mohsenian with Morgan Stanley. Please go ahead. Your line is now open.

Hey, good morning guys.

Good morning.

Just taking a step back, obviously, the June and July to date unit case volume trends showed a significant sequential improvement versus April and May. Do you feel like you have enough visibility that it's reasonable at this point to generally expect sequential progress from those July numbers as we look at the balance of the year and the remainder of the back half? I know you obviously won't give us a specific number, but more conceptually, perhaps you could touch on that. And that's a global question. But within that answer, I was hoping you could parse out thoughts by region a bit more and imagine the answer may be very different in Asia and Europe versus the U.S. and Latin America, just given the relative differences we're seeing in sequential COVID case counts.

Sure. I think the simple answer is no. And by no, what I mean is there are too many, to use the famous Rumsfeld little framework, there are too many known unknowns ahead of us. Because whilst, yes, we have seen sequential improvement through the second quarter and into the beginning of July, in all geographies, all major geographies around the world, the principal unknown is the degree of lockdown going forward. As we talked about it in the second quarter, the biggest variables affecting the business were: One, the degree of lockdown; and two, the degree of away-from-home business in that country with the lockdown. And the simple fact remains that while things have got better undoubtedly, July is better than June, June was better than May, May was better than April, the reality remains that the virus is not completely under control. There have been countries which have repeated lockdowns or cities and states within countries that have repeated lockdowns. And so honestly, I think we could – if we saw the virus starting to be under control, we would imagine, yes, we would see sequential improvement through the months and quarters going forward. But we cannot discount there might be further waves of lockdowns, partial or full. Having said that, I am pretty confident that second quarter will ultimately prove to have been the most difficult and the most impacted quarter, principally because I think the governments are getting smarter about how they apply public health measures and getting things under their control, such that we're unlikely to see the whole world entering a lockdown at the same point in time. I'm not sure that completely helps, but unfortunately, that's the outlook we see, with a strong degree of uncertainty.

Your next question comes from the line of Nik Modi with RBC. Please go ahead. Your line is now open.

Yes, thanks. Good morning everyone. Maybe I could just take another spin on Dara's question and ask specifically on areas where we've seen the virus kind of come back. So you think about Australia, parts of Hong Kong, Texas, et cetera. James, I mean, it's very helpful on understanding kind of the July trends, but things have been moving so quickly. Perhaps you can talk about maybe what you're seeing or just give us some context on some of those markets just so we can get a better understanding of how things have shaped since the end of June.

Sure. I mean, look, the – I think the fairest thing would be to say that those markets where we've seen repeat lockdowns, they have never – or they have not yet gone down at the same sort of degree they went down in the first round of their lockdown, whether that be February, March or April. And on a global basis, obviously, April was the most difficult month. So we are not seeing that round 2 is as bad as round 1. I think that if you take somewhere like Japan, which started off with the lockdown and they opened up a bit then they locked down again, yes, the number started getting negative again, but they weren't really as bad as they had been at the initial stage. So you do get a bit of a wiggly line, so you can't – that's why I made the point on Dara's question, you can't assume, not that I necessarily think you were, you can't assume it was a straight line from where we are now to good. I think there's going to be some variations as you start to look across the months. But the second waves have not yet looked as bad as the first waves, whether I look across any of the countries you really mentioned or some of the other ones.

Your next question comes from the line of Rob Ottenstein with Evercore. Please go ahead. Your line is now open.

Great. Thank you very much. James, I would like to focus on the chart that you had on the 400 master brands, with 50% accounting for 98% of revenue and 50% just 2% of revenue. And I know this is a very big question that you could probably talk about for a long time, but kind of high level, how – what do you think the right mix is? And how do you get to that right mix? Presumably, there were certain incentives, relationships with the bottlers that got you where you are now. How do you see that evolving over time? And what do you – how do you think the financial impact will be when you get to a more optimal mix? Thank you.

Sure. I am not sure there is a destination where there's one right number of the mix between leaders, challengers and explorers. And we will always have a tail of smaller brands. That's not the issue that we're after. And actually, it would probably be a sign of weakness to have no smaller brands in the portfolio because it would mean we're not nurturing the future, we're not nurturing the explorers that will be challengers, that will be leaders in the future. What we want to see is a steady pipeline of progression of creating ever-stronger brands that have real quality leadership. Obviously, they've got to pass through the challengers phase. And therefore, you've got to launch a whole series of explorers, small brands, to try and get there, knowing that most of them will not make it. What we're looking at here is that we have not been as assertive enough and directive enough at weeding out the explorers that have not worked and are unlikely to work so that we can redirect the resources on to the explorers and the challengers that have the most opportunity into the future. So it's not a question of a certain number of explorers are right or wrong, it's a question of, are they succeeding or not? And we – I think we talked at the Investor Day that the success criteria for explorer is very fast growth and starting to gain a core of very engaged and loyal consumers, and that you're really starting to make waves in the category even though small. And that the success criteria for a challenger was being able to gain enough market share that, over time, you could believe you were going to get to leadership. Because at leadership, you have both scale and disproportionately…

Your next question comes from the line of Steve Powers with Deutsche Bank. Please go ahead. Your line is now open.

Yes, hi everyone. Good morning. I guess a question for me on capital allocation. John, you were pretty clear on the priorities and the near-term deemphasis on M&A and share repurchase. But the implication there is that you have high confidence in your ability to both reinvest heavily in the business and also continue to maintain, even grow, the dividend, whereas the market's been increasingly concerned about your ability to do just that in recent weeks and months. So can you maybe expand on what drives your confidence there? And is there any set of circumstances that you can envision in the near to medium term that might better challenge your ability to defend the dividend, again, given the takes in your prioritization?

Thanks, Steve. First and foremost, I think the decisions on capital allocation, we take into account not just the short-term, but also taking a view as to where we think the business will be over the next couple of years. And as we look at that, even though, as James said, there are a number of known unknowns, you got – I think you got to divide the calendar into a few parts. One is what's happening in the here and now, number two is the sort of the length and shape of the recovery and then number three is getting back to some degree of what people are, I think, calling a new normal. So we've got tremendous confidence in the beverage industry in general. We think that the fundamentals for growth going forward longer-term remain the same, albeit with the challenges in the near-term. And we think that we can and we'll get back to the high end of our long-term growth algorithm over time. And so with that context, we're comfortable in maintaining our position around our capital allocation and, first and foremost, continuing to support the business as we go forward in terms of capital and marketing investments; and then number two, continuing to support the dividend in that period. Wrapped around that, of course, is our overall debt strategy. We are confident, with the decisions we've taken year-to-date, that the balance sheet is strong enough to withhold the near-term pressures. And we're – while we may go slightly outside of our range this year, we see that being a short-term blip. So I'll also say we're confident in the industry, in our ability to emerge stronger. And with that in mind, the priorities that we lay out, we think, are achievable. Obviously, as James just said, there are lots of kind of known unknowns, and we will continue to review and adapt as those unknowns become more known.

Your next question comes from the line of Laurent Grandet with Guggenheim. Please go ahead. Your line is now open.

Yes, good morning everyone. James, I'd like to focus my question on the on-premise channel. Can you please unbundle the on-premise performance and trends? So what are you seeing in QSRs versus casual dining, contract caterers or sports/concert venues or travel? Trying to figure out the pace of the recovery by those subchannels. And is it fair to assume that the piece that is recovering the fastest, like QSR, is probably not – less profitable? Thank you.

Sure. I'll try and add a little bit of texture on this one for you. But the first thing to bear in mind is the predominant effect is the degree of lockdown in the country as it relates to those channels. So there isn't really a way to describe the global trends by those different channels because it very much depended – or does depend still on what sorts of measures governments have put in place to – for health reasons. And so there's – the global trend is not really that meaningful. I would just urge you to look more at the degree of lockdown on the total business. If we take one country and look at what we see as to have happened there, and take the U.S., which is the one you're probably most familiar with. If we look at the away-from-home channels, first point to know is there was sequential improvement as we went from April to May to June. And so things got better. Clearly, the biggest determinant of how our channel did was what percent of its business needed people to be inside the building. So you mentioned QSR. Actually, QSR was one of the, in aggregate in the U.S., was at the better end of the impact. Why? Because many of them have well-developed drive-thru and digitally enabled takeaway businesses. So actually, they not only improved but they were not the most affected of the eating-away channels. The sorts of channels that were most impacted by the lockdowns were bars, full-service restaurants, at-work locations. Some of these places were, simply put, there was no foot traffic. And so the declines were significant. And given that many offices are still not going back to full working, if at all. For example, at-work remains one of the most affected channels, much more so than QSR or other casual dining or even bars and restaurants. So the simplest way to think about or to analyze the away-from-home channels is simply to look at the degree that the restrictions in place at any moment in time and how that affects their business, vis-à-vis do they have takeaway or business that can leave the location? And to what extent are they dependent fully on people being in the location?

Your next question comes from the line of Bonnie Herzog with Goldman Sachs. Please go ahead. Your line is now open.

Good morning. I actually had a question on the ramping of your marketing spend in the second half as it sounds like you've started to accelerate spending ahead of the recovery. So I really wanted to understand how quickly you expect the spending to impact the top line, given there's typically a lag. And then I assume there will be a bigger drag on your margins from the stepped-up spending in the second half. But maybe clarify that and then maybe highlight any offsets you might have or levers you can pull to minimize the impact from this? Thanks.

Thanks, Bonnie. Let me take that one. Again, as I mentioned here, I think it's important to kind of divide the calendar up. As you know, for the second quarter, we did take a significant step back from marketing because we didn't think it was going to be that effective. And as we look to the second half of the year, I think the name of the game is to stay flexible and be able to adapt as quickly as possible. With that in mind, as we see the shape of the recovery taking place around the world, there are opportunities to step up, to step back up our investment levels. And I think there's also an opportunity to use this time to completely rethink the amount of investment a market actually needs in an optimal level going forward. So that's very much a key priority for the second half of the year. In terms of specific numbers, I don't have specific numbers to provide because I think it's, again, going back to what I said about being flexible, it's a function of being able to adapt and react as markets demonstrate the trajectory that they're on. But as we go forward and as we go into 2021, a key priority is to emerge stronger, as James alluded to earlier, and to emerge stronger faster. And so with that in mind, it's a key objective in the second half of the year, is to position ourselves well for 2021, and particularly in the markets that are really important to us and the markets where the competitive pressures are strongest. So stepping it up on a case-by-case basis in the second half of the year and being ready for 2021. And for sure, as I said in the script, as we look into the second half of the year, you're not going to potentially see the same cost efficiencies that drove the sort of the operating margin impact in the second quarter in the second half of the year as we continue to look at our marketing needs and take decisions accordingly.

Your next question comes from the line of Bill Chappell with SunTrust. Please go ahead. Your line is now open.

Hey, thanks. Good morning. James, I just wanted to step back, trying to understand like how we should look at the – in the slide deck, the announcements today, because, I mean, on one side, you can say, look, we're trying to be more nimble, we're trying to be stronger coming out. The other side, you can say, look, earnings don't matter this year, they might not really matter this year. Let's – don't waste a good crisis, let's step up all our spending and move forward and we can really accelerate everything over the next year. And if it's the latter, then you didn't really talk about kind of how much this is going to cost and whether it's going to impact this year and next year in terms of costs. So maybe a little more color on which way it is and what you're expecting to spend?

I'm not sure whether you are referring as much the DME or any additional costs because we're changing our product. But let me try a couple of things and then see whether it answers the question. I mean, firstly, let me just underline what John said. We are going to be good stewards of our capital. And yes, of course, we could just pile on the marketing spend because "no one cares about the earnings this year." Yes, but that still comes from our bottom line and our capital available. And if you look – if you ignore calendar years and just think about the business, why would I want to spend money in a period if I can't get the return, particularly if there's a strong lockdown? So we don't take an approach of overly thinking in the calendar years when it comes to marketing. We're about generating momentum for the brands and the business. And as John said, if we see opportunities to invest and generate and accelerate the top line growth, that's what we're going to do, which is the inverse of what we saw in the second quarter. We thought no marketing is going to make much difference in the second quarter, so we pulled back heavily. And then we'll have to gauge and be adaptable as we work through the uncertainty in these known unknowns as to where or which countries and which categories versus which lockdowns is it going to make sense to spend? So we are going to be judicious in our use of marketing, in our use of capital expenditure. We – much as you can see the sales trend improving through the quarter to July, our expectation is that the general direction of travel is sequential improvement, therefore, we expect to come back and spend more marketing. But we're going to be focused on getting that right. But said more generally, if we're going to emerge stronger, we need to get the business back to the right level of investment to drive the top line growth. That's what's going to create the profit growth for the Coca-Cola Company. And that is going to go behind the revamped approach to the portfolio, the revamped approach to how we continue to do marketing. If we do have to let go of some brands, potentially even ones we've acquired, like Odwalla, we may need to take some charges. And even though it wouldn't affect the cash flow because we're using it, perhaps we converted the brand to something else or maybe it wasn't making any money, but there might have to be some charges. Obviously, our intent would be to make those decisions as quickly as possible and recognize them as soon as they're made. I hope that provides something of color to your question.

Your next question comes from the line of Andrea Teixeira with JPMorgan. Please go ahead. Your line is now open.

Thank you. Good morning. So I'm wondering if you can elaborate more on the efficiency and ROI commentary that you guys just made. If you can see operating margins inflect already in the third quarter year-over-year, or more of a fourth quarter aspiration? And a clarification on John's comments about capital allocation. Is there any room to accelerate the divestitures of the Bottling Investments that you've done so far and become even more asset-light to repurpose the funds into dividends and buybacks? Thank you.

So on – thanks, Andrea. On the second question, there's – as we've in previous calls, I think we have a very open book with respect to the balance sheet and rightsizing and optimizing the balance sheet as we go forward. And there's no investment on the balance sheet that does not get a regular review and determination as to whether it should still be there. With respect to that part of the decision-making, our Bottling Investments group is an important piece of the equation. We don't have a timetable for further refranchising, but it certainly is our longer-term goal to be more asset-light, just as we have, I think, stated on previous occasions, and have acted accordingly with previous refranchising efforts. So that will and continues to be a part of the agenda, but not a specific time line on it. And then with respect to the comment on operating margins, I don't have a clear number to give you for either Q3 or Q4. But it goes without saying, is that as we looked at the opportunities that present themselves, we're not necessarily as focused on the months, but we're more focused on building momentum for the business and sustaining it in the – particularly in the markets that have got outsized importance to us. So we'll make those decisions as they come and as they appear to be the right ones to make at the right time, and the consequences will flow through accordingly.

Your next question comes from the line of Carlos Laboy with HSBC. Please go ahead. Your line is now open.

Yes. Good morning, everyone. You note big sparkling declines in India, Western Europe and fountain in the U.S. Have deep structural changes, such as heavy client turnover, in any of those three situations prompted you to move toward a reset of the model in those three businesses?

Carlos, no, I don't think I would describe any of those as a deep structural change that has driven some sort of reset of the model. Again, they're very, very linked to the degree of lockdown that has been mandated because of COVID. And if you just take those three – both, I mean, fountain or food service and on-premise in the U.S. and a lot of EMEA, particularly the Western Europe, has a lot of away-from-home business, the outlets were shut. And what we found is that as the outlets start to open, the business starts to flourish again. And India, simply put, there isn't a modern trade as you'd understand it in the developed markets at a large scale. And so when they had a lockdown, it locked down all the small stores. And so literally, the whole marketplace was closed down at that point in time in what would have been a peak season in India. So it's really lockdown-related. And I think as they come off, you'll see the reopenings. We are social creatures, as humans, and we like experiences. People will want to go out. There will be habits that will have changed, but we will go out and experience the world, and these channels will bounce back. John?

Yes, James, just – if I could just add to that. I think, Carlos, I think what we will see, both in some of the developing markets like India and even here in the United States, is I think there will be a higher turnover, particularly of small customers, in both the sort of more modern away-from-home as well as the traditional away from home. So I think we expect to see that. But that in and of itself, I don't think means a structural reset is necessary. It could just mean there will be more new ones coming along. And for our system, it just – it will be a key area of focus as we come out of the recovery period.

Your next question comes from the line of Kevin Grundy with Jefferies. Please go ahead. Your line is now open.

Hey. Good morning, everyone. And thank you for taking the question. I wanted to come back to investment levels. It was talked about with a couple of different prior questions, but ask it differently and really focus on North America. And my question isn't so much about cadence, but really more about adequacy. And the context being that your key competitor has committed to supporting its brands, this is on the heels of stepped-up investment levels last year. They're now trying to hit an external earnings number, and market share is an increasing focus. If I'm not mistaken, it's also a bigger part of executive comp. And then of course, the snack side of the business is thriving, which gives them some flexibility to lean in on beverages. So setting aside the COVID-related pressures, can you comment on what you're seeing competitively in North America? I think you commented a moment ago that there's also willingness internally at the Coca-Cola Company to forgo any sort of profit targets to lean in and make sure that you're adequately reinvested in key markets, presumably the U.S. would be included in that. Maybe you just can confirm it. And then maybe talk a little bit about some of the governors and key metrics that you guys are looking at: Brand equity, market share, absolute levels of A&M spending, to ensure that your brands are indeed adequately supported and that you don't end up vetted into year-end, and looking out to next year, falling short if you're underinvested? Thank you.

Do you want a go, John? So I'll go ahead. I'll start, then maybe you can jump in. Clearly, we are go – I mean, we've set a North Star: Emerge stronger, which is gain more – engage with more consumers, gain more drinkers, gain share and reestablish system economics for us and the bottling system. So that is where we're headed. And very clearly, that we're going – if we have to choose between investing and not investing in making more money, but damaging the top line, we're going to invest to drive the top line. The fundamentals of the Coke system work when we can get back where we were precrisis, which was the top end of the growth algorithm on the top line, and that then flows through with the leverage into the bottom line. So that is going to be the North Star globally. And in North America, we need to make sure that happens. And clearly, we're going to do that in a flexible way that John talked about the DME. Having said that, we fully expect to be spending sequentially more DME in North America in Q3 and into Q4. Obviously, we have key metrics by brand as to what we expect from each brand and what they're doing and going for that. And what we see in the marketplace is, again, a bit like the total volume performance. In terms of share, what we see is that where the world is open, we've been able to gain share. The predominant negative effect is channel mix. And it's worth remembering that our – we have half as much a gain market share in away-from-home channels as we have in at-home channels. So the closing of the away-from-home, of course, makes a negative impact to our market share. So what we've done – what we're focusing on is in the channels that are open, let's focus on gaining share where the world is still working, knowing that as the reopenings occur, and being social humans, we'll go out for the experiences, that we will structurally have gained share in channels and then we'll be favored as those where we have historically been stronger start their reopening. So that's our approach overall and in North America.

Ladies and gentlemen, this concludes our question-and-answer session. I would now like to turn the call back over to James Quincey for any closing remarks.

Thank you, everyone. So to sum up, we're using the current moment of the pandemic as an opportunity to accelerate the implementation of our strategies. With a portfolio of strong brands, a focus on high-impact marketing innovation and a structure that fits the strategy, we are confident that our system will emerge stronger from this crisis and return to delivering good growth for the years to come. As always, we thank you for your interest, your investment in our company and for joining us today. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.