Question-and-Answer Session
Operator
(Operator Instructions) We’ll go first to Lauren Torres with HSBC.
Lauren Torres - HSBC Global Research
Good afternoon. I was hoping you could talk a little bit more about any signs of improvement that you are seeing in the U.S. Looking at this last quarter, you were helped by rate improvements, but looking into next year, if pricing isn’t as favorable in the market, what gives you the confidence that we’ll see a pick-up in your U.S. performance?
Kenneth E. Keiser
Let me comment on that. First of all, as you look at 2007, we guided that we would be down flat to down one, and we are slightly off that rate but I can say looking at 2007, I think we feel pretty good about our CSD performance when you consider the cost environment and the ultimate pricing impact that that had on retail pricing.
I would say as well that I think that says a lot about the pricing power and resiliency of our brands, in that given all that price in the marketplace, our CSD trends in particular stayed consistent with past trends.
Going forward, we have said that we expect our U.S. volume growth to be in the 1% growth range, and when you couple that with 3% to 3.5% pricing, which is lower than what we’ve had in the last couple of years, we’re okay with that top line algorithm, particularly as we get into a moderating cost environment. So we feel that U.S. growth algorithm will produce a growing and consistent and stable cash flows.
But that moderate growth outlook is exactly why, as Bob articulated in his comments, why we have diversified our company to a higher growth profile with our international business.
So I think that again, given what we see as the future innovation potential for next year, given a moderating cost and pricing environment, I think given what our historical growth rates have been, I think we feel fairly good about the fact that we can guide ourselves to that 1% volume range for next year.
Lauren Torres - HSBC Global Research
I guess you are still thinking about getting a little bit more aggressive, I guess, promoting obviously your non-carb platform and also single-serve. I guess that’s still something that you are focused on at this point.
Kenneth E. Keiser
That’s correct. As you look at the big new platforms for next year, of course our hydration strategy, a much improved energy platform, and again with a great three tea strategy, we think that will continue to have even bigger impacts on our growth rates.
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