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 and Member of Executive Committee

Kaumil S. Gajrawala - UBS Investment Bank, Research Division Judy E.

Hong - Goldman Sachs Group Inc., Research Division Caroline S. Levy - Credit Agricole Securities (USA) Inc., Research Division William B.

Chappell - SunTrust Robinson Humphrey, Inc., Research Division Mark S. Astrachan - Stifel, Nicolaus & Co., Inc., Research Division

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, 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 on February 29, 2012, and our most recent quarterly report on Form 10-Q filed on November 9, 2012, 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 27, 2013. A copy of this information is also available on our website www.monsterbevcorp.com, in the Financial Information section.

Once again, we reiterate that our products are safe based on both our and the industry's long track record and the scientific evidence supporting the safety of our ingredients. We estimate that about 50 billion cans of energy drinks have been sold and safely consumed worldwide over the past 25 years, including more than 8 billion Monster Energy drinks over the past 11 years.

Based on a third-party report, it is estimated that Red Bull sold more than 5 billion cans of energy drinks in 165 countries in 2012. In 2012, we sold some 2 billion-plus cans of Monster Energy drinks in approximately 90 countries.

To the best of our knowledge, the FDA's position is that it continues to believe that there is a long history of safe use of products containing caffeine in the U.S., and that the average amount of caffeine consumed by the U.S. population has not increased in spite of the entry of energy drinks into the marketplace.

The FDA has confirmed that available studies do not indicate any new previously unknown risks associated with caffeine consumption. Unfortunately, inaccurate and speculative articles continue to be published in the media regarding energy drinks.

We have endeavored to respond to those inaccuracies when practical by providing accurate and scientific facts to the media as has the American Beverage Association. By way of illustration, we compare the caffeine levels in Monster Energy drinks from all sources to the caffeine levels of coffeehouse coffee, such as for example Starbucks or Caribou, as this comparison is more easily understood by and meaningful to consumers.

Coffee has been and continues to be extensively and safely consumed everyday in the U.S. by many tens of millions of consumers.

Some publications have erroneously suggested that energy drinks contain up to 500 milligrams of caffeine and have compared them to a 5-ounce cup of coffee that contains about 100 milligrams of caffeine. Monster Energy drinks do not contain anywhere near 500 milligrams of caffeine.

A 16-ounce Monster Energy drink contains approximately 160 milligrams of caffeine. We do not believe that any of the leading coffeehouses sell 5-ounce cups of coffee, including Starbucks.

A small Starbucks contains 12 ounces of coffee, a medium-sized Starbucks contains 16 ounces of coffee, and its large size, 20 ounces. While Starbucks also sells an 8-ounce size, we believe the size has very limited sales.

We note that Starbucks also sells an extra large 31-ounce size. In making a comparison to coffee, we believe that it is appropriate to use Starbucks' 16-ounce medium-size coffee, which is the same size as a regular 16-ounce Monster Energy drink.

Starbucks' 16-ounce coffee contains approximately 330 milligrams of caffeine, which is double the approximate 160 milligrams of caffeine in the same size Monster Energy drink and a 16-ounce Caribou coffee contains between 305 and 370 milligrams of caffeine. Some have criticized our comparison on the ground that coffee is bitter, hot and consumed by adults.

These criticisms are misplaced. Coffeehouses provide free sugar and cream.

A significant number of items listed on their menus are sweet and indulgent and available hot and cold. Adolescents do in fact, drink coffee extensively.

One only needs to visit Starbucks, Caribou or any other coffeehouse store to confirm this. It is estimated that around 350 million cups of coffee are drunk every day in the U.S., equates to about 128 billion cups per year.

According to a study done by the research firm NPD, some 13% of coffee consumers are under 18. That translates to about 45 million cups of coffee that are drunk everyday by teenagers under 18 or approximately 17 billion cups per year.

We estimate that the size of the energy drink market in the U.S. is about 5 billion cans a year.

In other words, the coffee market is about 25x bigger than the energy drink market. Even if one were to consume -- were to assume that a higher percentage of teenagers under 18 consume energy drinks than coffee, which we do not believe is accurate, coffee consumption in the U.S.

by teens under 18 is dramatically higher than energy drinks. The National Coffee Association of the USA in its 2012 national coffee drinks -- drinkers trends advise that more than 50% of coffee drinkers said they began drinking coffee at least once a week between the ages of 13 and 19.

We also do not accept that consumers tend to drink coffee more slowly than energy drinks, which has also been suggested. On the contrary, coffee cools quickly and consumers generally prefer to drink their coffee before it becomes lukewarm.

Additionally, a large percentage of coffeehouse coffees are not consumed hot and are positioned as cold drinks, i.e., Frappuccino, iced coffee, mochas, et cetera. As an aside, the caffeine levels of coffeehouse coffees, which are generally double that of energy drinks are also not listed on menu boards or cups.

Even McDonald's, one of the largest restaurant chains in the U.S., has been remodeling their stores to provide coffee drinks, both hot and cold, in many flavors, varieties and efficacy. Monster Energy drinks have traditionally been marketed as dietary supplements as defined under the Federal Food, Drug, and Cosmetic Act.

However, as communicated in the past, Monster Energy drinks could also be marketed as conventional beverages because their ingredients are either FDA-approved food or color additives or substances that are Generally Recognized As Safe or GRAS at the levels used in the products. We confirm that the company has made the decision to transition its Monster Energy drinks to conventional foods for a number of business reasons, including: To eliminate our competitive disadvantage in certain states, where energy drinks labeled as conventional food, like Red Bull, are exempt from sales tax and are also eligible for redemption with food stamps, while energy drinks labeled as dietary supplements like Monster are not.

This change will have the effect of leveling the playing field with our major competitors. The company saw no reason to continue being subjected to the erroneous and misguided criticism that its Monster Energy drinks are being marketed as dietary supplements to avoid FDA regulation.

As we have always said, dietary supplements are subject to as much if not more FDA oversight than are conventional foods and Monster Energy drinks could equally satisfy the regulatory requirements applicable to both regulatory categories. Finally, we recently joined the American Beverage Association and will follow their recommendations to label energy drinks as conventional foods and to list the caffeine amounts on labels.

The change will be put into effect as and when new packaging is manufactured and new products are introduced. The ingredients currently in Monster Energy drinks will continue to be included in those drinks in the future, save for some inconsequential changes in minor products.

Following completion of this labeling change, we anticipate that only our Worx Energy products, which are packaged in 2-ounce bottles, will continue to be labeled as dietary supplements in accordance with the FDA regulations. Discovery is continuing in the Fournier case.

This is a very sad situation for the family, and we sympathize with them. However, the production of additional medical records and documents continues to confirm that there was no causal connection between Ms.

Fournier's alleged consumption of a Monster Energy drink and her death. In addition to Ms.

Fournier's serious hereditary heart condition, Ehlers-Danlos syndrome, she also suffered from other significant structural defects of her heart, including mitral valve prolapse, fibrosis and myocarditis. Heart defects of these types are commonly known to cause cardiac arrest and sudden death.

It is believed that these conditions, either independently or in concert with one another, caused her arrhythmia and ultimately her sad and untimely death. Caffeine does not appear to have been in any way connected with or the cause of Ms.

Fournier's arrhythmia and cardiac arrest. Indeed, we believe that Ms.

Fournier was accustomed to drinking a cup of coffee every morning. Again, we point out that no caffeine blood level test was ever performed, and there is no scientific evidence of the level of caffeine in Ms.

Fournier's system at the time of her cardiac arrest, if any. We repeat that the levels of caffeine contained in our Monster Energy drinks are safe.

On December 20, 2012, the company responded to the letter received by it on October 31, 2012, from the City Attorney of San Francisco questioning the safety of our energy products and the marketing claims made by the company with respect thereto. On February 8, the company responded to the letter received by the company from Senators Durbin and Blumenthal and Representative Markey regarding the safety, labeling and marketing of the energy drink products sold by the company.

In both responses, we provided citations to numerous examples of third-party scientific documentation substantiating the safety of our products. As we have previously stated, we will continue to provide appropriate responses to any regulatory or similar inquiries that we receive.

The company has also received miscellaneous demands and/or complaints over the past few months regarding the labeling and/or safety of our energy drink product from various unscrupulous plaintiff's lawyers, and which the company believes to be without substance. The company intends to vigorously defend against those claims.

The company assumes no obligation to update any statements made with respect to ongoing litigation and regulatory matters, including with respect to the afore-going disclosures, whether as a result of new information, future events or otherwise, other than as required by law. Given the current litigation and pending regulatory requests, I hope you understand that we will refrain from answering questions or commenting further on these specific subjects.

We are happy, of course, to answer questions you may have about our products in general or about our fourth quarter results as best we can after we have concluded our discussion on the business. Let me now turn to a discussion on the business.

We believe that the softness in the energy drink market in the U.S. over the past few months may be due in part to the ongoing negative publicity and comments that continue to appear in the media questioning the safety of energy drinks and suggesting limitations on their ingredients, including caffeine and/or the levels thereof and/or imposing minimum age restrictions for consumers.

In the face of these challenges, the company nevertheless continued to make good progress in the fourth quarter and achieved record fourth quarter gross sales, up 16.6% to $545 million, net sales up 15% to $471.5 million and operating income up 10.1% to $113.9 million. Our tax rate was higher this quarter at 39.1% versus 38.3% in the same quarter last year.

Diluted earnings per share increased 10.6%, from $0.35 per share in the fourth quarter of 2011 to $0.39 per share in the fourth quarter of 2012. While we are pleased with the results we achieved in the fourth quarter, our revenues were somewhat affected by less robust growth for the energy category as a whole and Monster Energy in our principal market, the United States, particularly in the latter half of the quarter.

Lower sales of certain of our energy drinks, primarily our Monster Energy Extra Strength Nitrous Technology energy drinks and Worx Energy shots and flat sales in our Warehouse division. As discussed on previous conference calls, we will be reporting on Nielsen's extended sample of outlets, which includes Wal-Mart; dollar stores such as Family Dollar, Dollar General and Fred's; DeCA military stores; and club stores, namely Sam's and BJ's, but excluding Costco.

According to the Nielsen report for the 13 weeks through February 16, 2013, for all outlets combined, namely convenience, grocery, drug and mass merchandisers, on the expanded basis I just described, sales in dollars in the energy drink category, including shots, increased by 5.7% versus the same period a year ago. Sales of Monster grew 8.1% in the 13-week period, while sales of Red Bull increased by 10.8%.

Sales of Rockstar increased by 4.1% and sales of 5-Hour decreased by 7.7%. Sales of AMP were down 17.6%.

NOS increased 11.7% and sales of Full Throttle decreased 2.3%. According to the Nielsen report for the 4 weeks ended February 16, 2013, sales of energy drinks in the convenience and gas channel, in dollars, increased by 3.8% over the comparable 4-week period in 2012.

Sales of Monster increased by 7.5% over the comparable period last year, while sales of Red Bull increased by 7.2% over the same period. Rockstar was up 4.4%, while 5-Hour was down 9.5%.

According to Nielsen, for the 4 weeks ended February 16, 2013, Monster's market share of the energy drink category in the convenience and gas channel, including energy shots, in dollars, increased by 1.1 points over the comparable period a year ago to 31.9% against Red Bull's share of 34.9%, Rockstar's share of 8.5% and 5-Hour's share of 10.6%. According to Nielsen in the 13 weeks ended February 16, 2013, for all outlets combined, sales of energy plus coffee drinks, in dollars, increased 11.7% over the same period last year.

Java Monster was 18.6% higher than in the comparable period last year, while Starbucks Double Shot Energy was up 7.4%. Sales of Java Monster exceed -- exceeded sales of Starbucks Double Shot Energy drinks.

According to Nielsen, in the convenience and gas channel in Canada, for the 12 weeks ended January 12, 2013, the energy drink category grew 1%. Monster sales increased 8%, and our market share at 26.4% increased 1.8 points over the comparable period last year.

While Red Bull sales increased 2%, and its market share increased 0.5 point to 37.9%. Rockstar sales decreased 6%, and its market share decreased 1 point to 14%.

According to Nielsen in the 4 weeks ended January 12, 2013, sales of energy drinks in Canada for the convenience and gas channel grew 2%. Over this period, sales of Red Bull increased 6%, sales of Monster increased 12%, while sales of Rockstar decreased by 12%.

According to Nielsen, in all outlets combined in Mexico for the month of December 2012, the energy drink category grew 5.1%. Monster sales increased 11.9%, and our market share increased 2.1 points over the comparable period last year to 35%, while Red Bull sales decreased 2.8%, and its market share decreased 2.8 points to 34.2%.

Boost sales increased 26.4%, and its market share increased 2.4 points to 14.5%. Net sales for the company's DSD segment increased 15.7% to $451 million for the 3 months ended December 31, 2012, from $389.8 million in the same period in 2011 and operating income for the company's DSD segment increased 12.4% from $129.6 million to $145.6 million.

Sales of our Monster Original green energy drink continued to grow in the quarter as did sales of Java Monster. However, the increase in sales of these products was partially offset by lower sales of certain Monster SKUs, including our Monster Energy Extra Strength Nitrous Technology line, which was repositioned from 12-ounce cap-cans to 12-ounce sleek flat top cans and was priced in line with our regular 16-ounce drinks beginning September 2012.

It will take some time for the effect of such repositioning to be realized. Sales of Worx were also substantially lower in the fourth quarter than in the same period last year.

Net sales for the company's Warehouse segment increased 1.9% to $20.5 million for the 3 months ended December 31, 2012 due to increased sales of Hubert's Lemonades, but which was partially offset by reduced sales of apple juice. The Warehouse division experienced an operational loss of $320,000 in this quarter compared to an operating income of $750,000 for the same quarter last year, largely as a result of lower gross profit due to the impact of increased costs of apple juice concentrate and higher distribution and selling expenses.

For the 3 months ended December 31, 2012, gross sales to retail, grocery, specialty chains and wholesalers represented 3% of gross sales, down from 4% in the comparable period in 2011. Gross sales to club stores, drug chains and mass merchandisers represented 9% of sales, the same as in the comparable period in 2011.

Gross sales to full-service distributors represented 65% of sales, down from 66% in the comparable period in 2011. Gross sales internationally increased to 21% from 19% in the same period in 2011.

Other sales were 2% for the period, which was the same as the comparable period last year. Gross sales to customers outside the United States in the fourth quarter of 2012 amounted to $115.2 million compared to $88.9 million in the same quarter in 2011.

Included in such sales are sales to the company's military customers, which are delivered in the United States and transshipped to the military and their customers overseas. Net sales in Europe, the Middle East and Africa in the fourth quarter of 2012, in dollars, were 27.1% higher than in the same period last year.

Excluding the effect of the strengthening dollar, such sales would have been 31.7% higher. Monster is continuing to gain momentum and market share in Europe.

In particular in the U.K., Spain, Germany, Benelux and South Africa, Monster achieved substantial sales gains, as well as substantially increased its market share. In the United Kingdom, according to Nielsen, Monster's market share is now approximately 10%.

Overall, our Western European and African operations are now operating well, and we have generally made good strides in increasing distribution levels and sales. The Central and Eastern European region is still incurring operating losses, although we are continuing to see improving benefits from the strategic changes we began to implement last year.

The launch of Monster Zero Ultra in 16-ounce cans in the third quarter of 2012 was very successful. We continue to believe in our growth strategy, particularly internationally, including entering new markets in which the company's products are not yet being sold.

We launched Monster Energy in Slovenia, Peru, Chile, Korea and Singapore in the fourth quarter of 2012 and beginning of 2013, and are continuing with our plans to launch Monster in India, Romania, Albania and Croatia and in additional countries in Central and Eastern Europe later in 2013. We are reevaluating if and when to launch Monster Energy in Argentina in light of the low value chain available in that country for energy drinks.

Additional positive news is that the sales in Japan in the fourth quarter of 2012 continue to exceed our expectations. Although damages and resulting product losses in relation to the production and shipping of products for Korea and Japan were substantially reduced in the fourth quarter, such losses still negatively affected our gross margins during the quarter.

Our strategy to secure local production in certain of our international markets will help us improve gross margins, mitigate the effects of exchange rate fluctuations, as well as reduce damages. Sales of Peace Tea ready-to-drink iced tea continue to progress well.

In the fourth quarter of 2012, gross sales of Peace Tea increased 10.8% over the same period in 2011. We are continuing with our plan to introduce additional packages and container sizes for the Peace Tea brand during the first half of 2013, and in fact, introduced new take-home multipacks of Peace Tea containing 8.4-ounce cans during the first quarter of 2013.

We are continuing to sell and market Worx Energy shots, although we have continued to experience a substantial drop-off in sales in this product line. Although we still have a long way to go, we achieved reduced operating losses in Australia in the fourth quarter as compared to the same quarter last year.

We have entered into a distribution agreement with Ambev for the distribution of Monster Energy drinks in Brazil. Ambev commenced selling our products at the end of January 2013.

We recorded a distributor termination expense of $0.9 million in the quarter following the termination of our previous distributor in Brazil. Gross profit margins achieved in the fourth quarter of 2012 were 51.7% versus 52.3% in the comparable quarter in 2011.

The decrease in gross profit as a percentage of net sales was largely attributable to geographic mix, product and production variances and product damages, primarily in Europe and Asia, including production cost increases passed on to us by our co-factory in the United Kingdom during the first half of 2012 and increased promotional and other allowances as a percentage of net sales. Gross profit margins achieved in North America overall were higher than in the comparable quarter last year.

Distribution expenses as a percentage of net sales were 4.7% and 4.4% in the fourth quarters of 2012 and 2011, respectively. Selling expenses as a percentage of net sales were 12.5% for both the 2012 and 2011 fourth quarters.

For the fourth quarter of 2012, selling expenses included increases in sponsorship and endorsements, trade development programs, marketing fees and merchandise displays. These increases were partially offset by decreases in commissions and royalty payments paid to noncustomers, premiums and advertising in the fourth quarter of 2012 as compared to the same quarter in 2011.

For the 12 months ended December 31, 2012, selling expenses as a percentage of net sales decreased to 11.9% from 12.9% in 2011. Sponsorship and endorsement costs and allocated trade development programs were higher than in 2011.

Selling expenses were also higher due to increased marketing fees and merchandise display costs. The increase in selling expenses was partially offset by reduced selling expenses for advertising, commissions and royalty payments paid to noncustomers.

General and administrative expenses increased 17.6% in the quarter. The increase in general and administrative cost was partially attributable to increased professional services, including legal and payroll expenses, which includes stock-based compensation expense.

Stock-based compensation expense were $6.8 million for the quarter compared to $6.6 million for the same period last year, and $28.4 million for the 12 months ended December 31, 2012, compared to $19.4 million for the 12-month period last year. In 2012, cost of goods in Western Europe were higher on a per case basis, while selling, general and administrative expenses were lower on a per case basis in local currencies than in 2011.

We invested extensively in Central and Eastern Europe in 2012, particularly in newer markets throughout the region. Selling, general and administrative expenses in that region were lower on a per case basis in local currencies.

We have successfully concluded agreements with our principal distributor in Central and Eastern Europe, which will result in a more equitable allocation of the value chain between us. As a result, we reduced our operating losses in Central and Eastern Europe in 2012, and we intend to build on those arrangements to continue to reduce operating cost and improve our operating results in 2013.

We are continuing to work with our Australian distributor to increase their contribution towards promotional costs going forward and have also reduced our overall cost of goods and operating costs in local currency in that market. We will continue to work towards achieving improved results in Australia in 2013.

Operating income was negatively affected by combined operating losses of $10.1 million for the year ended December 31, 2012, from our operations in Europe, the Middle East, Africa, Australia, South America and Asia. Following the strength of the U.S.

dollar, we recorded a foreign-currency loss of $2.7 million for the quarter. Our effective tax rate in the 2012 fourth quarter was 39.1% compared to 38.3% in the 2011 fourth quarter.

The increase in the 2012 fourth quarter effective tax rate was primarily the result of increased losses in certain foreign subsidiaries for which there is no tax benefit. Our effective tax rate for the year ended December 31, 2012, was 38.1% compared to 37.4% for the year ended December 31, 2011.

The increase in effective tax rate for the year was also primarily the result of increased losses in certain foreign subsidiaries for which there is no tax benefit, the establishment of full valuation allowances against the deferred tax assets of certain foreign subsidiaries, as well as a higher effective combined state tax rate. During the 2012 fourth quarter, the company purchased 6.7 million shares of common stock at an average purchase price of $50.86 per share for a total amount of $339.6 million, this excludes broker commissions.

Over the full 2012 year, the company purchased a total of 13.5 million shares of common stock at an average purchase price of $54.47 per share for a total amount of $737.1 million, also excluding broker commissions. Subsequent to December 31, 2012, the company purchased an additional 300,000 shares of its stock at an average purchase price of $51.99 per share, which exhausted the availability under the current repurchase plan.

Turning to the balance sheet, cash and cash equivalents amounted to $222.5 million compared to $359.3 million at December 31, 2011. Short-term investments were $97 million compared to $411 million at December 31, 2011.

Long-term investments decreased from $23.2 million at December 31, 2011 to $21.4 million. Included in short and long-term investments are auction rate securities of $23.2 million.

Days outstanding for trade accounts receivables were 39.2 days at December 31, 2012, and 42.4 days at December 31, 2011, compared to 38.7 days at December 30, 2011. Inventories increased to $203.1 million from $155.6 million at December 31, 2011.

Average days of inventory was 80 days, which was higher than the 72 days of inventory at December 31, 2011. Following the positive response that we received from consumers to the launch of Zero Ultra, we have decided to launch a new Ultra Blue line extension in the first half of 2013 and to defer the launch of the proposed Ultra Pink line extension for now.

We are continuing with our plans to introduce Kona Cappuccino in the first half of this year, as well as a new line of 3, 15-ounce energy shakes called Muscle Monster that will contain 25 grams of protein per can. The Monster mini take-home multipacks containing 8-ounce cans were launched in the first quarter of 2013.

Initial reception to those products, as well as the Peace Tea multipacks from both retailers and consumers has been positive. We will be launching an additional Monster Rehab line extension, Pink Lemonade + Tea + Energy during the first quarter of 2013.

Gross sales in January 2013 were approximately 9.5% higher than in January 2012. We caution again that sales in a single month and over a short period are often disproportionately impacted by various factors, such as for example selling days, days in the week in which holidays fall and the timing of promotions in retail stores, and should not necessarily be imputed to or be regarded as indicative of results in the full quarter or any future period.

In regard to January, we do want to point out that January faced a more difficult prior year comp, which was plus 34% last year. In conclusion, I would like to summarize some recent positive points.

North American gross margins remain healthy. Our 2012 fourth quarter gross margins for North America were actually higher than in the comparable 2011 fourth quarter.

U.S. Nielsen market statistics show that Monster Energy's growth is still outpacing the growth of the category as a whole.

We have entered into a distribution agreement with Big Geyser effective April 1, 2013, for distribution of Monster products in the Greater New York area, which is the second-largest energy drink market in the U.S. We plan to launch exciting new additions to the Monster family.

Turning to international markets, we are satisfied with the performance of our international expansion and investment. Our market share continues to increase in almost all of our international markets.

International gross sales for 2012 topped $0.5 billion. In 2012, our European business achieved improved operating results.

Net sales in euros were up 56% for the year. It is noteworthy that even though the energy drink category has been in existence in Europe for over 25 years, our EMEA markets on average are still experiencing double-digit growth.

According to Nielsen, for the 4 weeks ended December 29, 2012, our market share in the United Kingdom increased to approximately 10% from 6.8% the previous year. And in the 4 weeks ended December 31, 2012, in Spain, we more than doubled our market share and are now the #2 brand with 18% market share, and in South Africa nearly tripled our market share to 15.2%.

According to Nielsen, Monster Energy has the leading market share in value in Mexico. We are excited about our expansion into Asia-Pacific.

Monster sales in Japan remain encouraging and are exceeding our expectations. The brand has already achieved an estimated 27% value share of the energy drink market in the modern convenience trade channel, according to internal estimates by our distribution partner.

The shipping issues we experienced in 2012 have been significantly reduced. We have launched Monster Energy in Korea, having overcome the product approval and labeling issues we had experienced, and we have achieved authorizations in 3 of the 4 largest modern convenience chains in Korea.

We also commenced distribution in Brazil at the end of January with Ambev, our new distribution partner. I would like to open the floor to questions about the quarter.

Thank you.

I know you're happy with the successes of Zero Ultra, can you talk a little bit about the incrementality of the product? And maybe how much is cannibalizing Lo-Carb or Absolute Zero or maybe even green can?

I think that -- we don't think that it's cannibalizing the green can, let's start off with that. That is still up nicely.

And that is the largest product, so that is up quite nicely. We have seen some cannibalization against basically the Lo-Carb and our Absolute Zero.

We are seeing some cannibalization against those 2 products, that is to be expected. They're all basically playing in that 0 or low-carb category.

The actual sales we saw, we reached about 72% distribution in convenience. We still have some distribution to gain, and we think also quality of distribution.

In some cases, it's been squeezed onto shelves, so we think that there is some room for expansion in both numbers and quality. And it is already pretty much our second best-selling SKU on a per point basis in the stores it's in.

So it has been very, very successful.

And just quickly to make sure I understood, you said green can was up. Did you give a number?

Did you say it was up strongly? I don't have that number.

Let me give a number, it's up 4.4% in the 13 weeks.

Okay, got it. And then the last thing on shots, this is your second go-around on the shots business.

Sounds like it's down substantially. It also seems like it's a very different consumer that drinks -- that uses shots versus the energy drink consumers.

Is it a category that maybe just doesn't fit the profile of your playbook or is it something that you feel that over time has a place...

We don't know. We know that there is a category there.

We know that it has slowed. But there definitely is -- a category exists.

It is a category, in which the basically the only player is still earning very good margins. We believe it is a slightly different consumer, but it does -- a demographic, but it does -- it is related.

We're in the beverage category. We believe there still is business.

We believe there is room for a competitor, but so far nobody's been able to really crack the code. But it doesn't mean we shouldn't continue trying whether it's in -- with Worx in its present form, its present flavors, its present size, its present pricing.

I think we're going to continue to look at and evaluate, but we do believe there is still some opportunity that as a beverage company, we shouldn't walk away from and take off the table. But it does have an effect obviously in looking at comps, and that's why we break it out and deal with it.

But we still haven't made final decisions on what to do exactly with Worx or what direction to take in that category.

Rodney and Hilton, first just in international market, so fourth quarter slowed down a little bit if I look at your sales growth x currency. So maybe can you talk about some of the markets where you saw a little bit of a softness or is this just really more of a shipment versus kind of a consumer takeaway volatility issue?

And from a profitability perspective, it sounds like you are pretty much breakeven in the fourth quarter in your international market. So do you think we're close to now at an inflection point where all of your international markets collectively start to turn profitable?

I think that one of the things that did negatively effect our sales in Europe was that CCE in particular went through a realignment of some of their inventories, which decreased, I think, purchases that would ordinarily have been expected from them. And I think -- we think that had a little bit of a dampening effect.

I don't want to go into each of the countries. I don't have them handy as to what we did in each of them.

We did highlight the major countries, in which we did experience good growth, and those are the main markets in Europe, which is, I think, just about everywhere I think we've grown. I mean, there may be 1 or 2 anomalies, but some of them are -- we still grew.

We may not have grown in sell-in, but we did grow in sell-through, but those are the small markets, and they sort of just -- it's just a question of timing. So basically, the main markets, we continue to grow quite nicely, which is the U.K., Germany, Spain, South Africa, Benelux, were good markets this year as well.

Then just in terms of profitability, 2-part question, one, can you talk about Brazil and how the launch in Brazil could impact your profitability in your international markets? Presumably, those are a more profitable market than perhaps some of your other markets.

And I believe you said 9.5% in January sales, but you started to ship into Brazil at the end of January. So can you broadly talk about kind of Brazil and how you think that, that market will contribute to your international business in 2013?

I'm not sure -- while we began to ship to Ambev, also there was transfer of existing inventories, I think, from our existing distributor to Ambev, so I'm not sure what the net incremental sales were. But the initial response from Ambev has been positive.

We're positive. They are a powerful organization.

They have extensive distribution. It is rolling out on a sort of a gradual basis, in a region by region basis.

It wasn't an immediate hit right through Brazil. But we do believe that there is good growth potential in Brazil.

We also believe that while we are continuing to pack our product at an independent third-party packer, we are -- we don't get the benefit of a number of tax breaks and other things. Some of those benefits we believe we will be able to achieve and improve our margins as we realign our packaging with Ambev and take other steps to improve our margins.

So we are quite happy. The value chain is acceptable.

The value chain, particularly in some of the -- most of the other South American countries we've gone into has also -- has also been quite positive for us. And we will basically -- we will anticipate some costs of trade, MDF slotting, et cetera, as we continue to list product in basically chains in Brazil.

We really didn't have very extensive distribution before. So we do look at some upside coming from the South American region.

Once we get some of the costs in local production going in Japan and Korea particularly, we do believe those countries will also start contributing profitably. So I think that overall, we were slightly negative on international.

But we are looking forward this year to turning the corner. But again, there's a big mix of international that goes into that whole pot, and I can't be more definite than that.

Just I was wondering if you could help us understand proportionately the makeup of the international sales. I mean, Mexico and Canada both in there if I'm not mistaken.

Are they the lion's share or is the U.K., Europe, just helping us really understand that.

I can try and get some of those sort of totals. Europe is -- overall is clearly far bigger.

But I don't -- I'll try and get some of the information to give you some idea of that breakup, while I'm talking and come back to that.

That sounds great. In that context, I was just wondering if the margins in Mexico and Canada are much closer to the U.S.

And that it's the all other dragging it down or was Europe getting toward -- just to understand how the time in each market leads to margin expansion over time.

We think the margins in Canada are certainly more closely aligned to the U.S. and Mexico's a little lower.

But also still reasonably aligned to the U.S. Europe has sort of pretty decent margins.

Asia-Pacific is where we are suffering from low margins at this point in time, and we believe that will be -- start being corrected as we go forward operationally. And in South America sort of in between, but again, we hope that we'll be able to improve margins in South America as in when we start producing with Ambev in Brazil and also in other regions in South America.

In the dollars, while -- if you look at the U.K., as an individual country the U.K. is our biggest country after the U.S.

It's larger than Canada or Mexico. And Spain, basically in the quarter, Spain, Japan, South Africa, Australia and Germany are the next largest, and they are reasonably close to each other after that.

Oh, interesting.

Just to give you a sort of order of how it goes.

Sorry?

To give you an order of how they're sort of coming in dollar terms sales.

May I also just clarify, you said sales were up 9.5% lapping 32%. What were you referring to in that number in January?

I was referring to the increase last year, January over the January the year before.

Is this U.S. Nielsen data?

It's our sales.

No. It's our sales.

And does it include international?

Yes.

Yes. This is growth.

Growth, yes.

Looking at the U.S. market over the, I guess, the past few months, it's not that you've been losing a ton of share, but it seems like Red Bull has been gaining more than most.

And just trying to see if you look at that, is that coming the Red Bull, from space jump and better marketing or do you think they haven't been quite as tainted by some of the negative press as you have? And was that something you think that will continue or is it just more of a short term?

I think what happened was, you saw initially I think the negative press seemed to have been directed sort of focused more on our brand as opposed to the category. And then more recent times, it's becoming a whole category issue.

So we think that was probably one factor. We also think if you look at the individual sales, what has happened in Red Bull is they've really -- what has happened, the one package that has grown for them has been their 12-ounce package, which has become their leading package, and that's where they've seen quite a big bump and basically based on not so much -- not on units, but on value because they really were trading up from a 8-ounce size at $2 to a 12-ounce size at $2.49 or whatever it is, or $2.90 or whatever the price is.

The average price of their -- I'll give you the 2, the pricing from $2.17 up to the average price of $2.89. So that's largely where they have picked up and continued to pick up market share in dollar terms.

That's accounted for that. They've also we think -- what we've seen is substantially a substantial pick up in marketing, not only in the U.S., but around the world.

And that clearly also has probably had some effect on their sales.

And is that something you need to react to or you feel very comfortable with...

A lot of that is -- a lot of it is when you time your marketing programs. We're looking at the markets, they've executed very well in the markets.

That's an issue which I think we need to get our distribution partners to perhaps step up their distribution capabilities and the presence on shelf. They are executing very well in store, which is important.

And then I think if you do look at the last 4 weeks, we've sort of tended to catch up and we've now -- we're actually slightly ahead of them in convenience. I think it's going to be growth in convenience and gas.

So it will take -- it will start catching up and then I think as we sort of start to get into our promotional cycle, we think things will improve. They did introduce some line extensions also during the period through one of their -- they had exclusive I think on some line extensions with 7-Eleven, but what our experience has been overseas that those line extensions ultimately haven't been particularly incremental.

But we don't know how they will ultimately pan out in the U.S. Again, we think that, that won't be a driver going forward for them, but they overall have improved their share.

A couple of housekeeping questions. What were Rehab sales in the quarter?

Japan, Korea cost in the quarter? How does that compare to the magnitude of the cost that you incurred there in the second and third quarter?

Rehab was a little bit difficult. We've seen some softness in some of the Rehab SKUs.

We haven't been able to really get fully under the numbers because last year, we did have the line extensions, which went into -- were listed in the fourth quarter. So there was clearly some sell-in and then -- it's really just been difficult to really compare them.

There has been a mixed bag of up and down and that effect. We also think there is possibly some seasonality that is starting to show up more in the Rehab line more than perhaps our other lines because of the fact that it is a tea and it's a non-carbonated tea product.

So we think that there also has been some seasonality impact. Can you repeat your second question to us?

Yes, the second question one is the cost incurred for the rollout in Japan and Korea in the fourth quarter, were they of similar magnitude to what you incurred in the second and third quarter? And then just a follow-up to the Rehab, do you have a net sales number overall?

Were Rehab sales up in the fourth quarter on your the reported numbers, not the scanner data?

Retail sales on gross dollars are not up in the fourth quarter of '12 versus '11. They are down somewhat.

But again, we've not really been able to tell with any real certainty how we've taken out the effect -- to back out the effect of the sell-in. We believe that if you'd back out the effect for sell-in, there's not much difference.

But again, that's something we just haven't been able to get fully into. On the costs, I'm not sure I'm able to give you an answer on the phone on the costs in Asia, fourth quarter versus the third at this point.

I think it's just -- I just don't have them handy.

All right, fine. Just lastly then on share repurchase, so is this something that we need to wait for the board to convene to re-up another authorization or is there something you want to talk about regarding that?

This is -- we really have no -- we cannot give you any update. This is something that we're going to -- we'll put on the agenda.

We have a board meeting on Friday. We'll put it on -- have it on the agenda.

But we're not sure what we want to at this point in time. And just really hard for me to speculate now as to whether we'll introduce an additional program, certainly immediately we've just spent a lot of money expanding, so we may relook at it.

But we will evaluate at the board meeting on Friday.

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