Question-and-Answer Session
Operator
(Operator Instructions) We’ll pause for a moment to establish the queue. We’ll take our first question from Bruce Klein with Credit Suisse.
Bruce Klein – Credit Suisse
I didn’t catch the 08 total volumes or what the conventional volume estimate was and what sort of you’re seeing in terms of the CSD market, has there been any shift or change, in 07 has there been much shift in that?
Michael J. Hoffman
Let me start first with the conventional unit volume, the conventional unit volume and I’m focused on the US business with a reduction of just under 10%. Again, that’s primarily the decline in the water volume which is still going in house. But again, I want to restate that in 2007 water unit volume represented just over 17% of our revenue and as I said in my opening comments, it’s now just under 10%. So, we’re getting to a point where some of these are specialty water bottles, they are multi serve water bottles which are not going in house. So, we are very much less dependent on the water revenues as well as the margin coming from that business. The next question as far as other trends, very much the same as what we discussed on the last call. Bruce, the water volume has again pretty much gone in house and we’re down to a very low level and we still anticipate that there could be some more that goes in house but again, at this lower lever the impact on our business is not as significant as what we have seen in the past.
On the CSD side it’s again, the same as we discussed on our last call where we get to where there’s the ability to bring CSD volume in house. Now, that says you have to have the space, that says you have to have the simplicity and the volume, all those factors. It does make sense where you have extraordinary freight costs. So, on a portion of the business it might make sense but you have to have all those factors covered. You have to have that simplicity, you have to have the volume, you have to have space to do it. So, like we discussed last quarter incrementally over time we do anticipate that some of the CSD will go in house but we’re also confident that we’ll be able to take overhead costs out if that were to happen to offset the impact of that.
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