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

Good afternoon, ladies and gentlemen. Thank you for attending this call. I'm Rodney Sacks. Hilton Schlosberg, our Vice Chairman and President, is here with me; as is Tom Kelly, our Senior Vice President of Finance. Before we begin, I'd 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 August 8, 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 November 6, 2014. A copy of this information is also available on our website at monsterbevcorp.com in the…

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

Just on the international business. Trying to understand 2 things. One, how much of an impact did the Canadian, I guess, 7-Eleven issue have on the total business? And then two, kind of longer term, as we look at the Coke partnership, does that change your near-term plan? Do you pullback? Do we expect some transition issues until it's signed? Just trying to understand if maybe there were countries that you were planning on going into or planning on expanding that you might, kind of, put on hold until everything is done. And how we should look at that over the next couple of quarters.

I think the Canadian impact was not substantial but it was there during the quarter. And I think you could see from the numbers that we showed for North America in October, that you saw the improvement coming through from Canada. And that's just timing and promotional issues. And we will do a promotion, I think, with 7-Eleven but it didn't fall into the quarter with Ultra Black. That is still -- that is being planned for Canada. With respect to the transition: The markets were not, at this point, major markets or markets that, I think, would really impact the results in -- certainly in the near term, but we just, obviously, felt it was important for at least -- make the disclosure that we had in fact deferred some of those introductions. Going forward, we just believe that we are going to continue to go forward pretty much as planned. There always is, obviously, a little bit of an effect on this -- on our results through the interim stage, because while we, obviously, are encouraging our distributors to continue giving the brand the same level of attention and investment, and we've tried to assure them that we will, obviously, compensate them appropriately, there is still some distributors who will naturally pull back and because of concerns as to whether they will continue to keep the brand and when there will be a transition. So that uncertainty, clearly, will have some effect. Although we don't believe it will be major, we do believe there will be some effect. But we really can't tell more than that. We are obviously starting to make plans for the transition. But again, until the transaction closes, there is -- we are limited in what we can do. But we are looking to close the transaction early in 2015 as we previously have indicated.

Our next question comes from Nik Modi of RBC Capital Markets.

Just 2 quick ones for me. On Rehab, Rodney, I was wondering if you could provide any perspective on that? And are there any plans there to kind of get that brand reinvigorated? And then the second question is our understanding is trends in the energy drink category are really taking off at Walmart and I was just hoping you can provide some context on kind of what's going on there. Is it just more cold cooler placement up by the register? If you could just give us some context on that?

I think that if you look at Rehab, the drop off that we -- or the decrease that we had experienced at the time we introduced -- or pretty much close to the time we introduced the Ultra line, has fallen off and the numbers are looking much better. That's still a major line for us. We have taken steps to just focus consumers on what the product is and to try and communicate better to consumers that it's an iced tea, that it's not carbonated. We are looking at some slight changes to the graphics, probably to align it more with a tea product, as opposed to, sort of, a carbonated energy drink, which has a stronger presence in a black can, traditionally. And we also believe that by some other minor adjustments, which we'll make to the line, we believe that we will have a good prospect of, basically, improving sales going forward. We are also introducing the Peach Tea, which is a nice variant. And so we believe that, that line will continue to grow again, but that's part of what we're doing. There was obviously some impact on that line from the introduction of the Ultra. We are seeing more of a comeback on -- also on our Lo-Carb now in the last quarter, that had dropped off more significantly in previous quarters and the numbers are improving on that product as well. And then finally, with regard to Absolutely Zero, which did have some fall off as well from the -- at that same time as we introduced the Ultra line, we have -- we're also taking steps to redesign the can and do things, and we're actually making some further improvements to the redesigned can. So we are hopeful we'll be able to get those sub lines or -- growing again.

Maybe I just could comment on Walmart. What's happened at Walmart is that they expanded the category both on the warm and on the cold shelf. We've invested in cooler placement with the organization, and I really would encourage you to visit a few stores and see the expanded sets and the positioning that we have now in the Walmart stores. It's actually very, very interesting, and we're excited with it.

Our next question comes from Amit Sharma of BMO Capital Markets.

Hello?

Our next question comes from Steve Powers of UBS.

We're not -- we're hearing silence.

Our next question comes from John Faucher of JP Morgan.

Seems to be something wrong with the line. We are not getting any of the participants. We can't hear anything. [Technical Difficulty] John A. Faucher - JP Morgan Chase & Co, Research Division: So just 2 quick questions here, I hope. One, can you talk a little bit about foreign exchange and the impact on the international business as we look at it? Obviously, there's been a lot of volatility. So can you talk a little bit about -- less so on the top line but more so on the margins, how you feel like you're situated to deal with some of this volatility in terms of transactional FX, et cetera? And then a separate question, which is as you talk about returning some of this cash to shareholders, can you talk about what your criteria are going to be and how we should think about that as we head into 2015?

Hilton will discuss the foreign exchange, John.

John, we hedged our balance sheet transactions in various currencies and the results -- the overall results in the fourth -- in the third quarter was not a material amount, and you'll see that in the Q that will be released, hopefully, tomorrow. Turning on -- turning to the cash that we are -- that we're discussing and we'll be discussing more with the board tomorrow, there are a number of programs that we are looking at and a number of opportunities to return cash to shareholders that is kind of premature at this stage as the board will be in discussions on this point tomorrow. John A. Faucher - JP Morgan Chase & Co, Research Division: Okay. If I can just follow up on the FX piece in terms of -- less so on the balance sheet transactions but more so, let's say, on dollar-based raw materials in foreign countries and finished goods and things like that. Is that something where you think that can have a meaningful impact on some of the international profitability, again, given some of the swings you're having in these currencies?

It hasn't to date, and we don't anticipate that it will to any significant degree. You're talking, in the quarter, of a foreign exchange loss in basically of the order of $1 million that was expensed against the income statement.

Our next question comes from Judy Hong of Goldman Sachs.

[indiscernible] additional growth in the third quarter; 14%, pretty solid. It looks like EMEA was a little bit softer but you had very good growth from Japan, Asia Pacific and Brazil. So can you just talk about maybe some of the underlying market trends that you're seeing in some of your key European markets. And then how much benefit you're seeing in markets like Japan's, where you've had some of the innovations rollout and whether there was any timing benefit in that number. And then I guess on a longer-term basis, I know we've talked about the Coke partnership enabling you to become more profitable in international markets. But just wanted to see if you can give us any, kind of, road map as to how quickly you can envision the profitability ramping up in those markets once the deal closes?

The international markets are quite a mixed bag. While the growth, obviously, was slower in EMEA, overall, there were some markets that were nice and then some markets faced some competition in some cases from some lower-priced entrees, for example, in South Africa. And the same thing even in South America. These results, again, were led by a number of countries, but there were countries within the region that were also softer and some of that is just to do with timing. In the case of France, if you look at the numbers, there was -- if you remember, at the end of last year, there was a buy-in before -- in advance of the introduction of a tax in France. And then during the quarter, there was a lower stockholding this quarter than had been compared to last year, where there was, sort of, an increased larger stockholding. So that affected the French results. So these are things that are making or resulting in our results being quite choppy. We're hoping that as we are able to go forward and as the brands get bigger and more established in these countries, that sort of influence from stockholding -- changes in stockholdings will continue to diminish. Again, some of the stockholding buy-ins and longer delivery times for some of the South American and Asian markets also affected the results, because we were -- if you also look at the stockholding levels and if you look at sales out, they remain healthy in a number of countries. We're positive, but if you look at the sales in at any one quarter, you may find that the results are actually negative. And so you've got to look at the actual underlying business. And while the trends remained solid, we are having this choppiness in some of the results from various countries. So we think that will start getting smoothed out better as we continue to become more -- both effective -- becoming more established in these different countries and also in many countries going into the Coke system. We don't really have a program yet. We're still at the very preliminary stages of actually understanding the Coke system. We need to be able to have discussions and meetings with various Coke bottlers. We need to achieve a consensus and agreement on margin -- the value chains and margins, and making decisions exactly when we're going to switch to which and in which countries. And that, at the moment, is a complicated matrix and we really can't, I think, speculate to that going forward. I don't know if you'd like to add anything on that, Hilton.

I just would like to -- yes, I'd like add to Judy about a comment on Europe, which was spot on, in fact. There was a destocking, we believe, that took place in July in Europe -- with our distribution partners in Europe. And that was quite -- that was quite noticeable.

I think that's all. You can see the numbers, obviously, you gain from the October numbers. Again, it's a single month but yet we have seen a pickup in October in Europe, particularly.

Our next question comes from Vivien Azer from Cowen and Company.

My question has to do with your average net sales per case and the 2.5% growth that you saw in the third quarter. You mentioned price increases on the 24-ounce packaging. So I'm curious whether you could give us a sense for the balance between pricing and mix, in terms of that 2.5% growth in average net sales per case?

It's in the Q. The Q will be released, as I said, hopefully, within next 24 hours, if not, on Monday. So it's all there.

Okay, fair enough. Then maybe a bigger picture question that relates to that metric. It's impressive the growth that you're seeing in your average net sales per case but at the same time, you're seeing consistent deceleration in terms of your net sales growth. So can you talk, kind of, high level how you think about the balance between volumes versus pricing and mix? And how important it is for you guys to generate outsized volume growth because the 5% growth that you saw this quarter is the weakest that we've seen in a number of years.

I think that's actually a situation that is relating to where the market has been and where the market is going. We spoke a little bit about where the October numbers are, and the growth in October. At this time, we're not planning to have any price increases on our major [ph] product lines, but that, in fact, may change as we move forward into next year. So from our perspective on pricing, it's steady as she goes. We'll be absorbing the Coca-Cola transaction early in 2015. That's a concentrate model and that will affect average pricing as well. So I hope that answered your question, but I'm not sure what specific issue you were getting at.

There are no further questions in queue.

On behalf of Monster, I would like to thank everyone for their continued interest in the company. 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 are going -- 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. 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. We reiterate that our products are safe, are properly labeled and the caffeine content of the Monster is approximately 10 milligrams per ounce, less than 0.5 milligrams per ounce of the caffeine labels contained in Starbucks and other coffee house brewed coffee. In other words, a medium Starbucks 16-ounce sized brewed coffee contains approximately 330 milligrams of caffeine, which is more than double the approximately 160 milligrams of caffeine that is contained in the same sized Monster Energy drink. More than 12 billion Monster Energy drinks have been sold and safely consumed around the world over the past 12 years. Thank you very much for your attendance.