Greater variety to fit consumer lifestyles

Whether it is product innovation, package enhancements or targeted promotional efforts, PepsiAmericas is in sync with changing consumer demand. Our non-carbonated portfolio, including waters, teas and juices, now makes up 18 percent of PepsiAmericas' domestic product sales - up from 14 percent a year ago.

This kind of shift requires focus, balance and commitment. We continue to partner closely with PepsiCo to offer our customers an advantaged brand portfolio. We have a robust innovation calendar in 2007 with nearly half in carbonated soft drinks (CSDs). Since this category is more than 80 percent of our U.S. business, having CSD innovation is critical.

More choices. Our U.S. non-carbonated beverage volume was over 18 percent of total U.S. volume mix, up from 14 percent just a year ago. Aquafina, Lipton Iced Tea and Frappuccino brands led the pack.

Growing global portfolio. We have leading brands and exciting innovation across our global portfolio of non-carbonated beverages.

Our 2006 acquisition of the Ardea Beverage Company, makers of airforce Nutrisoda, is also enhancing our relevance with health-conscious consumers. Tagged "good soda," Nutrisoda satisfies these consumers' demand for stylish beverages that taste good.

In our international markets, we continue to add to our portfolio to fully participate in all categories: CSDs, water, teas, juices, juice drinks, sports and energy drinks. Uniquely, all of these categories are growing in our international businesses with tremendous potential for continued growth.

In the months and years ahead, PepsiAmericas will continue to efficiently deliver the brands that consumers want.