This excerpt taken from the PBG 8-K filed Jun 3, 2009.
Judy Hong - Goldman Sachs - Analyst
Thanks, Goldman Sachs. Can you first confirm whether the special committee is still in discussions with PepsiCo as we speak? And, secondly, some have argued that the PepsiCo really has the unilateral power to raise concentrate prices and essentially get more of your cash flow. Can you just respond to that argument?
Eric Foss - Pepsi Bottling Group, Inc. - Chairman & CEO
Sure, Judy, it's Eric. On the first question, as I mentioned earlier, I am not going to comment on any discussions or negotiations that have or haven't taken place or will or won't take place relative to PepsiCo, so that is going to be our answer on any questions related to that.
I think on your second question, on this idea that the concentrate company controls the bottler's cash flow by raising concentrate pricing we think it's a fairly ridiculous theory quite honestly. If you look at the history here of PBG specifically, we have a very strong track record in terms of our operating profit track record and cash flow track record.
Our operating profit is up over 2.5 times and our operating free cash flow is up threefold, so it certainly hasn't been the case historically. And I don't believe it's the case under any circumstances. The reality is that the concentrate company does establish concentrate price, but the bottler sets the wholesale pricing.
And so in the type of environment that has been hypothesized where the concentrate company is punitive relative to raising concentrate price, the offset of that is our ability to raise pricing at retail. And in that scenario what would happen is Blue System volume could decline, which would have a negative impact on PepsiCo's profit and a negative system scenario.
So I actually think that scenario ends up hurting the concentrate company much more than the bottler. Also, I would add that I think any effort by PepsiCo to depress PBG's earnings as part of its strategy to acquire us would expose PepsiCo to potential litigation if that was an approach that was taken.
Mary Winn Settino - Pepsi Bottling Group, Inc. - VP, IR and Public Relations
Operator, we will take the next question.