These are my notes on PEP in Feb...as you can see, they know how to deal with
commodity cost...and I doubt they will go back to the larger packages..2-7-08
transcript 5 stars Nymph's Take: Commodity cost off set by "weight outs" and
price increases. USA not drinking Soda. CEO Nooyi- World Economies outside of
emerging countries are expected to slow in 2008. 6% points increase in commodity
cost in 08. Inflation is a reality for all our competitiors. PEPSI
INTERNATIONAL..includes UK< Europe, Asia, Middle East and Africa. Snacks Up 9%,
Beverage 8% Strong growth inc Lipton and Tropicana. M & A of snack companies and
parterships w/Unilever and Starbucks. Australia Pepsi Raw..natural flavors and
real cane sugar. FRITO LAY N. AMERICA and Quaker Foods N. America 3% volume
growth, 7% Revenue and 7% core operating profit growth. Frito-Lay very strong
year. Doritos, Cheetos grew w/ new flavors. Quaker Granala Bites 4% rate
increase on commodity cost. Also Cereals ok. N.AMERICA BEVERAGE.PBNA..7% revenue
and core operating profit. Tropicana margins better even though DRAMATIC orange
inflation. Carbonated Soda Drinks (CSD) DECLINED 3%..Diet Pepsi Max ok. READY to
Drink Tea Biz grew 25%, G2 gatorade 5%. ENHANCED WATER 30%. Lipton Tea and
Energy Drinks double digits. AMP 15% revenue growth, 19% profit growth. Tiger
Woods G2 coming soon. INFLATION problems in grain complex, cooking oils, corn,
oats and wheat. Full tax rate of about 27.5%. Buy Back 4.3B. Metric is Return on
Investment Capital. INTERNATIONAL GROWTH IS THEIR NUMBER ONE FOCUS..they are
hedging for second half for commodity

isnt that just a neutral then? i wouldnt worry that much about the $USD