Rodney C. Sacks - Chairman, Chief Executive Officer, Member of Executive Committee and Chairman of Hansen Beverage Company Hilton H. Schlosberg - Vice Chairman, President, Chief Financial Officer, Chief Operating Officer, Principal Accounting Officer, Secretary, Controller and Member of Executive Committee.

William B. Chappell - SunTrust Robinson Humphrey, Inc., Research Division Brian Doyle - CLSA Limited, Research Division Amit Sharma - BMO Capital Markets Canada Judy E. Hong - Goldman Sachs Group Inc., Research Division Kevin M. Grundy - Jefferies LLC, Research Division Mark S.

Astrachan - Stifel, Nicolaus & Company, Incorporated, Research Division Caroline S. Levy - CLSA Limited, Research Division.

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 the Financial Information section. We reiterate that our products are safe. More than 13 billion Monster Energy drinks have been sold and safely consumed around the world over the past 13 years.

In August 2014, Monster Beverage and The Coca-Cola Company entered into definitive agreements for a long-term strategic partnership that we believe will accelerate growth for Monster in the global Energy Drink category.

Under the agreements, The Coca-Cola Company will acquire an approximate 16.7% ownership interest in Monster, following the issuance of shares to The Coca-Cola Company and will transfer ownership with worldwide energy business to Monster, which in turn will transfer its nonenergy business to The Coca-Cola Company.

Monster and The Coca-Cola Company will amend their current distribution coordination agreements to expand distribution with Coca-Cola Bottlers into additional territories. The Coca-Cola Company will become Monster's preferred distribution partner globally, and Monster will become The Coca-Cola Company's exclusive energy play.

We believe that this partnership will strategically align both companies for the long term by combining the strengths of The Coca-Cola Company's worldwide bottling system with Monster's dedicated focus and expertise as a leading energy player globally.

We believe that this distribution arrangement will accelerate Monster's opportunity to grow internationally. We are actively engaged in preparations for the implementation of the contemplated arrangements.

The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 with respect to the transactions expired on October 15 2014, and in addition, all necessary approvals and consents from foreign antitrust authorities have been obtained.

In accordance with this existing agreements with applicable third-party distributors, on February 9, 2015, the company sent notices of termination to certain affected third-party distributors in the U.S. providing for the termination of their respective distribution agreements to be effective at various dates beginning in March 2015.

The associated distribution rights are expected to be transitioned to Coca-Cola's distribution network in each applicable territory as of the effective date of the termination of the applicable third-party's rights in such territory.

We've also commenced negotiations with certain international Coca-Cola Bottlers with a view to transitioning distribution rights from Monster to such bottlers. The closing of the transactions is still subject to customary closing conditions, but is expected to close in the second quarter of 2015.

We're excited by the addition of The Coca-Cola Company energy brands to our Monster portfolio, which will provide us with complementary product offerings in many countries, access to new geographies as well as access to new channels, including vending and specialty accounts.

As previously communicated, we plan to review all options available after the transaction closes, and we receive the funds due to the company in terms of the agreements to return a substantial amount of cash to our shareholders. Turning to the fourth quarter results.

Throughout the fourth quarter and continuing into the 2015, the beverage industry, in general, has continued to show weakness. However, sales in the Energy Drink category appear to have accelerated, particularly in the U.S. towards the end of 2014 and into 2015.

In the fourth quarter, the company achieved record gross sales of $696.3 million, up 12.1% from $621.1 million. Net sales were $605.6 million, up 12% from $540.8 million. Our Original Monster Green energy drink continued to perform well and grew well in excess of the growth of the category in the United States as a whole during the fourth quarter.

Sales of Zero Ultra also continued to show good growth in the United States during the fourth quarter. Zero Ultra has become our second best selling item. At the end of the third quarter, we launched Ultra Sunrise, which was well received by retailers as well as consumers, and quickly became one of our top-performing SKUs.

Sales of Java Monster also grew in the quarter. During 2014, we redesigned the graphics for our juice-based M-80 and Chaos energy drinks. Those products have been repositioned as our Juice Monster line. M-80 was renamed RIPPER, and the juice content was lowered, which has improved their drinkability.

Sales of these products have showed healthy increases since this exercise was completed. Sales of our repositioned Punch Monster line have also increased. Gross profit as a percentage of net sales was up 3.6 percentage points to 54.8% from 51.2% in the fourth quarter of last year.

The increase in gross profit as a percentage of net sales was largely attributable to price increases on our 24-ounce Monster Energy brand energy drinks and our Peace Tea line, changes in product sales mix, lower cost of certain sweetness and other raw material as well as an increase in production efficiencies.

Operating income was up 43.2% to $192.9 million from $134.8 million in the 2013 comparable quarter.

During the fourth quarter, our operating income was positively affected by the operating income contributed by international operations, particularly Europe and Japan, as compared to an operating loss from these operations in the fourth quarter of 2013.

In fact, our operations outside of North America delivered operating income of $13.8 million in the 2014 fourth quarter as compared to an operating loss of $4.4 million in the same quarter in 2013. Consolidated selling expenses in dollars were lower in the quarter than last year.

While sponsorship expenses were marginally higher than last year in dollars, in the quarter, they were lower as a percentage of net sales.

Results for the 2014 fourth quarter continued to be impacted by expenses related to regulatory matters and litigation concerning the advertising, marketing, promotion, ingredients, usage, safety and sales of the company's Monster Energy brand energy drinks.

Such expenses were $2.9 million in the 2014 fourth quarter compared with $4.7 million in the -- for the 2013 fourth quarter. Foreign currency losses during the fourth quarter decreased, primarily due to our foreign currency transactions in Japan and South Africa.

Our effective tax rate decreased from 42.2% to 34.7%, in the fourth quarter, primarily due to profits earned in certain foreign subsidiaries that have no related tax expense as a result of the prior establishment of valuation allowances on their respective deferred tax assets.

Net income was $125.3 million, up 64.7% over net income of $76.1 million earned during the fourth quarter of last year. Diluted earnings per share increased 63.2% to $0.72 from $0.44 in the 2013 comparable quarter. Turning to the full year results.

The company achieved record growth sales of $2.8 billion for the 2014 full year, up 9.3% from $2.6 billion in 2013. Net sales were $2.5 billion, up 9.7% from $2.2 billion. Gross profit as a percentage of net sales increased to 54.4% for the year ended December 31, 2014 from 52.2% for the year ended 2013.

Operating income was up 30.5% to $747.5 million from $572.9 million in 2013. Our operations outside of North America delivered operating income of $37.8 million for the 2014 full year as compared to an operating loss of $13.4 million in the same period the previous year.

In the full year, expenses related to regulatory and litigation concerning our Monster Energy drinks were $20.6 million as compared to $17.9 million in 2013. Our effective tax rate decreased from 39.9% in 2013 to 35.2% for the full 2014 year.

Net income was $483.2 million, up 42.7% of a net income of $338.7 million in 2013, and diluted earnings per share increased 41.9% to $2.77 from $1.95 in 2013.

According to the Nielsen reports, for the 13 weeks through January 24, 2015, all outlets combined, namely, convenience, grocery, drug and mass merchandisers, sales in dollars in the Energy Drink category, including Shots, increased by 7.1% versus the same period a year ago.

Sales of Monster grew 10.8% in the 13-week period, while sales of Red Bull increased by 7.6%; sales of Rockstar decreased by 4.2%; 5-Hour decreased by 3.8%; and AMP decreased by 10%. Sales of NOS increased by 38.8% and Full Throttle increased by 7.1%.

According to Nielsen, for the 4 weeks ended January 24, 2015, sales in the Energy Drink category in the convenience and gas channel, including energy shots in dollars, increased by 8.5% over the comparable period in 2014.

Sales of Monster increased by 11.3% over the comparable period last year, while sales of Red Bull increased by 8.7% and NOS was up 42.4%. Rockstar was down 3.8%, 5-Hour was down 1.4%, and AMP was down 7.4%.

According to the Nielsen reports for the 4 weeks ended January 24, 2015, Monster's market share of the Energy Drink category in the convenience and gas channel, including energy shots in dollars, increased by 0.9 of 1 point over the comparable period last -- a year ago to 34.8% against Red Bull's share, which was level with Monster's at 34.8%.

Rockstar's share was lower at 7.6%, 5-Hour's share was lower than 8.8%, while NOS' share was higher at 4.3%. According to Nielsen, in the 4 weeks ended January 24, 2015, sales of Energy + Coffee Drinks in dollars in the convenience and gas channel increased 14.8% over the same period last year.

Java Monster was 10.6% higher than in the comparable period last year, while Starbucks Doubleshot energy was 22.2% higher. According to Nielsen, in the convenience gas channel in Canada for the 12 weeks ended February 7, 2015, the Energy Drink category increased 3%. Monster sales were flat versus a year ago.

Our market share decreased 1.4 points to 28.2% over the comparable period last year. Red Bull sales increased 1% and its market share decreased by 0.3 of 1 point to 36.2%. Rockstar's sales increased 24% and its market share increased 2.8 points to 18%.

According to Nielsen, for all outlets combined in Mexico, the Energy Drink category grew 9.7% in the month of December 2014. Monster sales increased 1.7% and market share decreased 2.6 points to 32.6% against the comparable period last year. Red Bull sales decreased 8.7% and its market share decreased by 4.8% to 23 -- 9 points to 23.7%.

Drivet100 market share increased 10 points to 17.8%, while Boost's market share decreased by 0.1 of 1 point to 16.4%. Coke's market share represented by Burn and Gladiator together decreased 3.4 points to 6.1%.

The Nielsen statistics for Mexico covers single months, which is a short period that may often be materially influenced positively and/or negatively by sales in the OXXO convenience chain, which dominates the market.

Sales in the OXXO convenience chain in turn can be materially influenced by promotions that may be undertaken in that chain by one or more energy drink brands during a particular month. Consequently, such activities could have a significant impact on the monthly Nielsen statistics for Mexico.

According to Nielsen in the 13-week period ended January 2015, the actual 13-week periods vary by a few weeks between different markets. Monster's retail market share in value as compared to the same period last year grew from 10.5% to 12.8% in Great Britain, and from 17.4% to 18.3% in France.

In the 13-week period ended December 2014, Monster's market share in value as compared to the same period last year increased from 8% to 10.9% in Germany; from 7.4% to 7.9% in Belgium; from 5.2% to 5.9% in The Netherlands; and from 8.1% to 8.7% in Sweden.

Monster's market sharing value for the 13 weeks ended January 2015 as compared to the same period last year decreased from 19.4% to 18% in South Africa, and from 21.7% to 21.2% in Spain. According to IRI, Monster's market share increased for the 13 weeks through December 28, 2014 from 24.5% to 29.2% increase.

I would like to point out that the Nielsen and IRI numbers in EMEA should only be used as a guide because the channels read by Nielsen and IRI in EMEA vary from country to country.

According to Nielsen for the month of January 2015, in Chile, Monster's retail market share in value increased to 14.4% as compared to 9.4% last year, and in Brazil, Monster's market share for the month of January grew from 4.6% to 5.2% as compared to the same period last year.

According to INTAGE which provides tracking and market statistics in Japan, for the month of January 2015, in the convenience store channel in Japan, Monster's market share grew from 29% to 32.6%.

Net sales for the company's DSD segment increased 12.6% to $584.8 million for the 3 months ended December 31, 2014 from $519.4 million in the same period in 2013. Net sales for the company's DSD segment increased 10.3% to $2.4 billion for the year ended December 31, 2014 from $2.1 billion in the same period in 2013.

Contribution margin for the DSD segment increased 31.2% from $177.9 million to $232.5 million in the quarter and from $726.8 million to $908 million for the year.

Net sales for the company's Warehouse segment decreased 3.2% to $20.8 million for the 3 months ended December 31, 2014 from $21.4 million for the same period in 2013 and decreased from $99.1 million for the 2013 year to $95.7 million for the full 2014 year.

For the full year, contribution margin increased from a loss of $1 million in the prior year's fourth quarter to a profit of $0.8 million and from a loss of $1.7 million in 2013 to a profit of $3 million in 2014.

For the 3-month ended December 31, gross sales to retail grocery specialty chains and wholesalers represent a 3% of gross sales, down from 4% in the comparable period in 2013. Gross sales to club stores, drug chains and mass merchandisers represented 8% of sales, the same as in the comparable period in 2013.

Gross sales to full-service distributors represented 64% of sales, the same as in the comparable period in '13. Gross sales internationally represented 23% of sales, up from 22% in the same period a year ago. Other sales are 2% for the period was the same as in the comparable period in 2013.

Gross sales to customers outside the United States in the fourth quarter of 2014 amounted to $160.1 million compared to $137.9 million in the same quarter in 2013. Included in sub-sales are sales to the company's military customers, which are delivered in the United States and transhipped to the military and their customers overseas.

Net sales in Europe, the Middle East and Africa in the fourth quarter of 2014 in dollars were 17.5% higher than in the same period last year. Monster is continuing to gain momentum and increase market share in Europe.

In particular, in Great Britain, Germany, The Netherlands and Greece, Monster achieved sales gains and continue to increase its market share. Overall, our Western European and Africa divisions are now operating well, and we have made good strides in achieving increased distribution levels and in-store execution.

We are continuing to see the benefits of the strategic changes implemented at the end of 2013 and into 2014. Our EMEA division traded profitably during both the third and fourth quarters of 2014, which contributed to the reduction in effective tax rate of the company.

Net sales in Asia-Pacific grew 11.1% versus the comparable quarter last year, while net sales in South America decreased 17.1% over the comparable 2013 fourth quarter, mainly due to foreign exchange differences and competitive price adjustment in Chile to offset an indirect tax and issues with our Columbian distributor.

Japan contributed a meaningful operating profit as sales there continued to increase. We are continuing with our expansion strategy in international markets, although we decided to defer proposed launches in certain countries for the future following the strategic partnership that was entered into with The Coca-Cola Company during the third quarter.

We are continuing with our strategy to secure local production in certain of our international markets in order to improve gross margins, reduce rates, reduce damages and assist in mitigating the effects of exchange rate fluctuations. We are planning to produce Monster in India shortly.

Distribution expenses on a consolidated basis as a percentage of net sales in the fourth quarter were 4.1% versus 4.5% in the comparable quarter in 2013. Other selling expenses as a percentage of net sales were 9.3% in the quarter versus 10.8% in the comparable period in 2013.

While sponsorships and endorsement costs were marginally higher in dollars, they were lower as a percentage of net sales. TDM MAT program costs were lower during the quarter, both in dollars and as a percentage of net sales.

General and administrative expenses decreased 3.3%, although payroll costs were slightly higher, including general and administrative costs in the quarter was $1.2 million related to The Coca-Cola transaction. We are continuing to work towards reducing our overall operating costs in our international markets.

During the 2014 fourth quarter, no share repurchases were made under the board-authorized share repurchase program. Turning to the balance sheet. Cash and cash equivalents amounted to $370.3 million compared to $211.3 million at December 31, 2013. Short-term investments were $781.1 million compared to $402.2 million at December 31, 2013.

Long-term investments increased from $9.8 million to $42.9 million at December 31, 2014. Included in short-term investments are auction rate securities of $3.9 million. Days outstanding for account receivables were 36.4 days at December 31, 2014, and 40.1 days at December 31, 2013 as compared to 40.5 days at September 30, 2014.

Inventories decreased to $174.6 million from $221.4 million at December 31, 2013. Average days of inventory was 57.4 days at December 31, 2014, which was lower than the 75.6 days of inventory at December 31, 2013 and lower than the 62.9 days at September 30, 2014.

As discussed on the last call, we are currently in the process of launching Monster Energy Ultra Citron and Monster Rehab Peach Tea + Energy.

Due to the strong response we received to our 2014 summer promotion of the Monster Energy Valentino Rossi drink in Europe and South Africa, we have converted that item into a permanent SKU in existing countries, in which it is being sold and are planning to launch it in additional European countries in 2015.

Gross sales in January 2015, were 11.2% higher than in January 2014.

We caution again that sales in the single month and over a short period are often disproportionately impacted by various factors such as, for example, selling days, days of the week in which holidays fall and the timing of promotions in retail stores, and should not necessarily be imputed to or regarded as indicative of results for the full quarter or any future period.

In conclusion, I'd like to summarize some recent positive points North American international gross margins are healthy. Our 2014 fourth quarter gross margins in North America as well as internationally, generally were higher than in the comparable quarter in 2013. U.S.

Nielsen market statistics show the Energy category continues to grow and that Monster Energy's growth is still outpacing the growth of the category as a whole. The new additions to the Monster family that were introduced during 2014 are gaining market share and contributing positively to the overall increase in the company's sales.

Our repositioned Punch Monster and Juice Monster lines were positively received by distributors and consumers during 2014 and both distribution and sales of those lines are improving. We believe that Monster Unleaded and Ultra Sunrise lines will continue to increase their contribution to sales throughout 2015. Turning to international markets.

We are pleased with the performance of our international expansion, particularly in Japan, Germany, Great Britain, Greece, The Netherlands and Chile. I'd like to open the floor to questions about the quarter and year. Thank you..

[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..

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..

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..