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This morning’s prepared remarks will be made by John Brock, our CEO, and Bill Douglas, our CFO. Hubert Patricot, President of our European Group is also with us on the call this morning. Following the prepared remarks, we will open the call for your questions. In order to give as many people as possible the opportunity to ask questions, please limit yourself to one question, and we will take follow-up questions as time permits.Now, I will turn the call over to John Brock. John F. Brock Thank you, Thor and we thank each of you for joining us, particularly on a Monday rather than our traditional mid week day. We’re in London in conjunction with our Board of Directors meeting and the upcoming London Olympics. I can tell you this is a city filled with excitement in anticipation of the London Olympic and Paralympic Games and we’re proud to have a significant role in the games. I will have more on this in a few moments. Turning to our second quarter results, overall the quarter was very challenging as we work through a combination of bad weather, economic and market factors as well as comparisons to strong growth in the same quarter one-year ago. Regarding weather, while we’re always reluctant to cite it as a factor in our results, we faced extraordinary weather related second quarter pressures in all of our territories. For example, this was the wettest second quarter in the United Kingdom in over 100 years and the wettest April in France in over 50 years. Reflecting these factors, our second quarter earnings per share totaled $0.73. Operating income was down 2% and net sales were flat, both on a comparable and currency neutral basis. Our net sales figure also includes a 2% gain from the French excise tax increase.
Let me note that our long-term prospects for growth remained solid and the recent weather challenges are temporary. We are focused on the opportunities we see ahead, our business fundamentals remain solid and we’re committed to continuing to manage each aspect of our business to deliver long-term value building growth.In fact, despite the difficulties in the second quarter, currency translation and ongoing weak macroeconomic conditions, the full-year guidance we’re providing today for both earnings per share and operating income is essentially the same as the guidance that we initially provided last December. We plan to deliver these results by managing the leverage of our business, including outstanding marketplace execution, customer service, cost control and our strong balance sheet. Now let’s look more closely at our second quarter results and the factors that contributed to them. As you saw in our release this morning, volume declined 6%, primarily driven by overall unfavorable weathers throughout the quarter as well as the impact of the French tax increase and comparison to strong growth in the same quarter a year-ago. Looking ahead we expect to return to volume growth as we have strong marketing plans and initiatives and importantly our brands continue to provide value and resonate with both our customers and our consumers. During the quarter, we continue to make important gains in the energy category, with our energy portfolio up more than 16% in the quarter. Our multi-brand energy strategy continues to allow us to seize opportunities with fast growing Monster brands, while gaining additional presence with Burn, Nalu, and Relentless. The continued success of the Coke Zero brand was also evident during the quarter as the brand achieved low single-digit volume growth. The brand grew in Continental Europe during the quarter and grew an encouraging mid single-digit in Great Britain. For the quarter our cost of sales per case increased 3%, while net pricing per case increased 4%, both excluding – that is excluding the impact of the French excise tax increase. Operating expenses were essentially flat due to market initiatives, cost controls, volume declines and timing that Bill will discuss with you shortly. Read the rest of this transcript for free on seekingalpha.com