Stephen Powers: Hey, good morning. Thank you. Actually, I want to squeeze in two topics, but I want to pick up first on, James, what you were just talking about in the broader total company context. In the quarter, the top line was obviously strong. But I think relative to external expectations, we saw a bit more margin flow through and SG&A leverage than was expected, especially in regions like North America, where the margin was exceptionally strong relative to history. So I’m curious in terms of how to think about the balance of managing top line growth versus continued margin expansion as you think about the back half. But then also more broadly, just in the context of your top line-led algo, is there may be more cost efficiency opportunities that we should be thinking about longer term?
Or is what we see in the quarter maybe more just a matter of timing? I also, John, if I could, I just want to loop back to a question I asked last quarter on below-the-line dynamics. You came into the year talking about below-the-line deleverage, interest expense and so on. We haven’t seen that again this quarter, especially with the lower tax rate. So I’m just curious if that has changed in the full year and is that factored in to the full year guidance raise. Thanks for both.
John Murphy: Steve, let me take the second piece first. It’s fairly straightforward. In the quarter, we benefited from higher equity income and from interest that we earned on our overseas cash, which was in both cases ahead of what we had assumed when we guided at the start of the year. And for the second half of the year, I don’t expect either of those two to be as strong. So I do think we’ll have a little bit of deleverage in the second half of the year but modest, not a significant variable for your consideration in the second half of the year.
James Quincey: Yeah, back to the margin element of the question. North America, in a way, is a fluid side of what we just talked about in Asia Pacific. Obviously, the results came in very strong in North America on the top line and on the margin. Again, there are a number of timing factors that kind of flatter the second quarter margin structure in the case of North America, including, for example, the — a bit like the Costa UK bit as it was a much faster growth rate in the Away-From-Home than the At-Home in the North American marketplace. And obviously, that’s margin accretive. That should be seen as, in a way, more completing the play of the recovery versus COVID. So the completion of the reopening of restaurants, cafes, theme parks, et cetera, et cetera.
And so that channel mix, if you like, flatters the operating income in the short-term. There’s a number of timings of other things that impact that, BODYARMOR integration, et cetera. I think the way to think about margin going forward by segment and most importantly for the company overall is, firstly, not to overrotate on any one quarter. Remember that there are a number of expense items and deduction items that we accrue on the basis of sales curve, not just what actually happened in the quarter. So timing is a feature. And that’s why I’m very strong and let’s take four quarters in a row and look at that relative to history. And when you do that, whether in North America or Asia Pacific or more importantly, the company in the overall, what you’re going to see is us sticking to our strategy, which is to drive the growth from the top line and then to look for modest or moderate increments of the operating margin, which we deliver not just by effective strategies to allocate resources, whether they be marketing or operating expenses so that we are efficient and get a little bit of leverage there.
