##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 14, 2008 (12 weeks)
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 333-80361-01
 BOTTLING GROUP, LLC
  Delaware
    
    13-4042452(State or Other Jurisdiction of 
Incorporation or Organization)
    
    (I.R.S. Employer
Identification No.)One Pepsi Way, Somers, New York
    
    10589(Address of Principal Executive Offices)
    
    (Zip Code)
 
  
  þ o
  Large accelerated filer oAccelerated filer oNon-accelerated filer þ(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



Bottling Group, LLC
Index
 Page No.Part I
    
    Financial InformationItem 1.
    
    Financial StatementsCondensed Consolidated Statements of Operations  12 and 24 weeks ended June 14, 2008 and June 16, 2007
    
    
    2Condensed Consolidated Statements of Cash Flows  24 weeks ended June 14, 2008 and June 16, 2007
    
    
    3Condensed Consolidated Balance Sheets  June 14, 2008 and December 29, 2007
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5-14Item 2.
    
    Managements Financial Review
    
    
    15-22Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4.
    
    Controls and Procedures
    
    
    23Part II
    
    Other InformationItem 1.
    
    Legal Proceedings
    
    
    24Item 1A.
    
    Risk Factors
    
    
    24Item 6.
    
    Exhibits
    
    
    24




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1.
 
 Bottling Group, LLC
Condensed Consolidated Statements of Operations
 12 Weeks Ended
    
    
    24 Weeks EndedJune
    
    
    June
    
    
    June
    
    
    June14, 2008
    
    
    16, 2007
    
    
    14, 2008
    
    
    16, 2007Net revenues
    
    $
    3,522
    
    
    $
    3,360
    
    
    $
    6,173
    
    
    $
    5,826Cost of sales
    
    
    1,916
    
    
    
    1,825
    
    
    
    3,398
    
    
    
    3,168Gross profit
    
    
    1,606
    
    
    
    1,535
    
    
    
    2,775
    
    
    
    2,658Selling, delivery and administrative expenses
    
    
    1,263
    
    
    
    1,215
    
    
    
    2,326
    
    
    
    2,219Operating income
    
    
    343
    
    
    
    320
    
    
    
    449
    
    
    
    439Interest expense
    
    
    52
    
    
    
    55
    
    
    
    99
    
    
    
    108Interest income
    
    
    33
    
    
    
    47
    
    
    
    74
    
    
    
    91Other non-operating income, net
    
    
    (3
    )
    
    
    (3
    )
    
    
    (5
    )
    
    
    (2
    )Minority interest
    
    
    9
    
    
    
    3
    
    
    
    6
    
    
    
    4Income before income taxes
    
    
    318
    
    
    
    312
    
    
    
    423
    
    
    
    420Income tax expense
    
    
    21
    
    
    
    11
    
    
    
    28
    
    
    
    17Net income
    
    $
    297
    
    
    $
    301
    
    
    $
    395
    
    
    $
    403
  2




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##### Table of Contents



Bottling Group, LLC
Condensed Consolidated Statements of Cash Flows
 24 Weeks EndedJune
    
    
    June14, 2008
    
    
    16, 2007Cash Flows  OperationsNet income
    
    $
    395
    
    
    $
    403Adjustments to reconcile net income to net cash provided by operations:Depreciation and amortization
    
    
    306
    
    
    
    300Deferred income taxes
    
    
    4
    
    
    
    (10
    )Share-based compensation
    
    
    27
    
    
    
    29Net other non-cash charges and credits
    
    
    89
    
    
    
    91Changes in operating working capital, excluding effects of acquisitions:Accounts receivable, net
    
    
    (410
    )
    
    
    (435
    )Inventories
    
    
    (191
    )
    
    
    (193
    )Prepaid expenses and other current assets
    
    
    (66
    )
    
    
    41Accounts payable and other current liabilities
    
    
    135
    
    
    
    260Income taxes payable
    
    
    14
    
    
    
    10Net change in operating working capital
    
    
    (518
    )
    
    
    (317
    )Other, net
    
    
    (78
    )
    
    
    (31
    )Net Cash Provided by Operations
    
    
    225
    
    
    
    465Cash Flows  InvestmentsCapital expenditures
    
    
    (398
    )
    
    
    (374
    )Acquisitions, net of cash acquired
    
    
    (22
    )
    
    
    (49
    )Proceeds from sale of property, plant and equipment
    
    
    10
    
    
    
    6Notes receivable from PBG, net
    
    
    (109
    )
    
    
    (331
    )Other investing activities, net
    
    
    4
    
    
    
    6Net Cash Used for Investments
    
    
    (515
    )
    
    
    (742
    )Cash Flows  FinancingShort-term borrowings, net
    
    
    216
    
    
    
    196Payments of long-term debt
    
    
    (6
    )
    
    
    (10
    )Other financing activities
    
    
    8
    
    
    
    Net Cash Provided by Financing
    
    
    218
    
    
    
    186Effect of Exchange Rate Changes on Cash and Cash Equivalents
    
    
    (3
    )
    
    
    4Net Decrease in Cash and Cash Equivalents
    
    
    (75
    )
    
    
    (87
    )Cash and Cash Equivalents  Beginning of Period
    
    
    459
    
    
    
    441Cash and Cash Equivalents  End of Period
    
    $
    384
    
    
    $
    354
  3




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Bottling Group, LLC
Condensed Consolidated Balance Sheets
 (Unaudited)June
    
    
    December14, 2008
    
    
    29, 2007ASSETSCurrent AssetsCash and cash equivalents
    
    $
    384
    
    
    $
    459Accounts receivable, net
    
    
    1,950
    
    
    
    1,520Inventories
    
    
    773
    
    
    
    577Prepaid expenses and other current assets
    
    
    377
    
    
    
    308Total Current Assets
    
    
    3,484
    
    
    
    2,864Property, plant and equipment, net
    
    
    4,173
    
    
    
    4,071Other intangible assets, net
    
    
    4,226
    
    
    
    4,181Goodwill
    
    
    1,536
    
    
    
    1,533Note receivable from PBG
    
    
    3,989
    
    
    
    3,880Other assets
    
    
    187
    
    
    
    183Total Assets
    
    $
    17,595
    
    
    $
    16,712LIABILITIES AND OWNERS EQUITYCurrent LiabilitiesAccounts payable and other current liabilities
    
    $
    1,938
    
    
    $
    1,829Short-term borrowings
    
    
    405
    
    
    
    190Current maturities of long-term debt
    
    
    1,304
    
    
    
    6Total Current Liabilities
    
    
    3,647
    
    
    
    2,025Long-term debt
    
    
    2,481
    
    
    
    3,776Other liabilities
    
    
    846
    
    
    
    832Deferred income taxes
    
    
    461
    
    
    
    471Minority interest
    
    
    428
    
    
    
    379Total Liabilities
    
    
    7,863
    
    
    
    7,483Owners EquityOwners net investment
    
    
    9,840
    
    
    
    9,418Accumulated other comprehensive loss
    
    
    (108
    )
    
    
    (189
    )Total Owners Equity
    
    
    9,732
    
    
    
    9,229Total Liabilities and Owners Equity
    
    $
    17,595
    
    
    $
    16,712
  4




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Notes to Condensed Consolidated Financial Statements
 Note 1Basis of Presentation
      Quarter
    
    U.S. & Canada
    
    Mexico & EuropeFirst Quarter
    
    12 weeks
    
    January and FebruarySecond Quarter
    
    12 weeks
    
    March, April and MayThird Quarter
    
    12 weeks
    
    June, July and AugustFourth Quarter
    
    16 weeks
    
    September, October, November and December
   5




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Note 2Seasonality of Business
  Note 3New Accounting Standards
 SFAS No. 157
   SFAS No. 158
  SFAS No. 141(R)
  SFAS No. 160
  6




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SFAS No. 161
  EITF Issue No. 07-1
  Note 4Share-Based Compensation
     Note 5Balance Sheet Details
 June
    
    
    December14, 2008
    
    
    29, 2007Accounts Receivable, netTrade accounts receivable
    
    $
    1,740
    
    
    $
    1,319Allowance for doubtful accounts
    
    
    (65
    )
    
    
    (54
    )Accounts receivable from PepsiCo
    
    
    198
    
    
    
    188Other receivables
    
    
    77
    
    
    
    67$
    1,950
    
    
    $
    1,520InventoriesRaw materials and supplies
    
    $
    253
    
    
    $
    195Finished goods
    
    
    520
    
    
    
    382$
    773
    
    
    $
    577
 7




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June
    
    
    December14, 2008
    
    
    29, 2007Prepaid Expenses and Other
Current AssetsPrepaid expenses
    
    $
    323
    
    
    $
    256Other current assets
    
    
    54
    
    
    
    52$
    377
    
    
    $
    308Property, Plant and Equipment, netLand
    
    $
    330
    
    
    $
    320Buildings and improvements
    
    
    1,571
    
    
    
    1,484Manufacturing and distribution
equipment
    
    
    4,184
    
    
    
    4,091Marketing equipment
    
    
    2,434
    
    
    
    2,389Capital leases
    
    
    37
    
    
    
    36Other
    
    
    146
    
    
    
    1548,702
    
    
    
    8,474Accumulated depreciation
    
    
    (4,529
    )
    
    
    (4,403
    )$
    4,173
    
    
    $
    4,071
 Industrial Revenue Bonds
  June
    
    
    December14, 2008
    
    
    29, 2007Accounts Payable and Other Current LiabilitiesAccounts payable
    
    $
    668
    
    
    $
    615Accounts payable to PepsiCo
    
    
    369
    
    
    
    255Trade incentives
    
    
    187
    
    
    
    235Accrued compensation and benefits
    
    
    223
    
    
    
    276Other accrued taxes
    
    
    134
    
    
    
    139Accrued interest
    
    
    47
    
    
    
    47Other current liabilities
    
    
    310
    
    
    
    262$
    1,938
    
    
    $
    1,829
 8




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Note 6Other Intangible Assets, net and Goodwill
 Other intangible assets, net
 June
    
    
    December14, 2008
    
    
    29, 2007Intangibles subject to amortization:Gross carrying amount:Customer relationships and lists
    
    $
    57
    
    
    $
    54Franchise and distribution rights
    
    
    46
    
    
    
    46Other identified intangibles
    
    
    34
    
    
    
    30137
    
    
    
    130Accumulated amortization:Customer relationships and lists
    
    
    (17
    )
    
    
    (15
    )Franchise and distribution rights
    
    
    (32
    )
    
    
    (31
    )Other identified intangibles
    
    
    (19
    )
    
    
    (17
    )(68
    )
    
    
    (63
    )Intangibles subject to amortization, net
    
    
    69
    
    
    
    67Intangibles not subject to amortization:Carrying amount:Franchise rights
    
    
    3,241
    
    
    
    3,235Licensing rights
    
    
    315
    
    
    
    315Distribution rights
    
    
    316
    
    
    
    294Trademarks
    
    
    225
    
    
    
    213Other identified intangibles
    
    
    60
    
    
    
    57Intangibles not subject to amortization
    
    
    4,157
    
    
    
    4,114Total other intangible assets, net
    
    $
    4,226
    
    
    $
    4,181
   Intangible asset amortization
  9




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Goodwill
  U.S. &Canada
    
    
    Europe
    
    
    Mexico
    
    
    TotalBalance at December 29, 2007
    
    $
    1,290
    
    
    $
    17
    
    
    $
    226
    
    
    $
    1,533Purchase price allocations relating
to acquisitions
    
    
    
    
    
    
    9
    
    
    
    (1
    )
    
    
    8Impact of foreign currency translation
    
    
    (18
    )
    
    
    0
    
    
    
    13
    
    
    
    (5
    )Balance at June 14, 2008
    
    $
    1,272
    
    
    $
    26
    
    
    $
    238
    
    
    $
    1,536
  Accounting change
  Note 7 Fair Value Measurements
  Level 1
 Level 2 
 Level 3
 10




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##### Table of Contents



Level 2Financial Assets:Cash flow hedges (a)
    
    $
    19Prepaid forward contract (b)
    
    
    15Total
    
    $
    34Financial Liabilities:Unfunded deferred compensation liability (c)
    
    $
    70Foreign currency hedges (d)
    
    
    4Total
    
    $
    74
 
 (a)
    
    The fair value of our cash flow hedges is primarily based on the forward curves of
the specific indices upon which settlement is based.(b)
    
    The fair value of our forward contract is primarily based on the current value of
PBGs stock price.(c)
    
    The fair value of our unfunded deferred compensation liability is primarily based on
the market indices corresponding to employees investment selections for their deferred
compensation accounts.(d)
    
    The fair value of our forward exchange contracts is primarily based on observable
forward foreign exchange rates. Note 8 Pension and Postretirement Medical Benefit Plans
  Components of net pension expense
 12 Weeks Ended
    
    
    24 Weeks EndedJune
    
    
    June
    
    
    June
    
    
    June14, 2008
    
    
    16, 2007
    
    
    14, 2008
    
    
    16, 2007Service cost
    
    $
    11
    
    
    $
    12
    
    
    $
    23
    
    
    $
    25Interest cost
    
    
    23
    
    
    
    21
    
    
    
    46
    
    
    
    42Expected return on plan assets  (income)
    
    
    (26
    )
    
    
    (23
    )
    
    
    (53
    )
    
    
    (47
    )Amortization of net loss
    
    
    4
    
    
    
    9
    
    
    
    7
    
    
    
    18Amortization of prior service costs
    
    
    2
    
    
    
    2
    
    
    
    4
    
    
    
    3Net pension expense for the defined
benefit plans
    
    $
    14
    
    
    $
    21
    
    
    $
    27
    
    
    $
    41
  Components of postretirement medical expense
 12 Weeks Ended
    
    
    24 Weeks EndedJune
    
    
    June
    
    
    June
    
    
    June14, 2008
    
    
    16, 2007
    
    
    14, 2008
    
    
    16, 2007Service cost
    
    $
    1
    
    
    $
    1
    
    
    $
    2
    
    
    $
    2Interest cost
    
    
    5
    
    
    
    4
    
    
    
    10
    
    
    
    9Amortization of net loss
    
    
    1
    
    
    
    1
    
    
    
    2
    
    
    
    2Total postretirement medical expense
    
    $
    7
    
    
    $
    6
    
    
    $
    14
    
    
    $
    13
 11




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Defined contribution expense
  Note 9Income Taxes
  Note 10Segment Information
    12 Weeks Ended
    
    
    24 Weeks EndedJune
    
    
    June
    
    
    June
    
    
    June14, 2008
    
    
    16, 2007
    
    
    14, 2008
    
    
    16, 2007Net RevenuesU.S. & Canada
    
    $
    2,536
    
    
    $
    2,527
    
    
    $
    4,743
    
    
    $
    4,629Europe
    
    
    592
    
    
    
    468
    
    
    
    828
    
    
    
    644Mexico
    
    
    394
    
    
    
    365
    
    
    
    602
    
    
    
    553Worldwide net revenues
    
    $
    3,522
    
    
    $
    3,360
    
    
    $
    6,173
    
    
    $
    5,826Operating Income (Loss)U.S. & Canada
    
    $
    269
    
    
    $
    284
    
    
    $
    403
    
    
    $
    426Europe
    
    
    45
    
    
    
    14
    
    
    
    14
    
    
    
    (11
    )Mexico
    
    
    29
    
    
    
    22
    
    
    
    32
    
    
    
    24Worldwide operating income
    
    
    343
    
    
    
    320
    
    
    
    449
    
    
    
    439Interest expense
    
    
    52
    
    
    
    55
    
    
    
    99
    
    
    
    108Interest income
    
    
    33
    
    
    
    47
    
    
    
    74
    
    
    
    91Other non-operating income, net
    
    
    (3
    )
    
    
    (3
    )
    
    
    (5
    )
    
    
    (2
    )Minority interest
    
    
    9
    
    
    
    3
    
    
    
    6
    
    
    
    4Income before income taxes
    
    $
    318
    
    
    $
    312
    
    
    $
    423
    
    
    $
    420
 12




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June
    
    
    December14, 2008
    
    
    29, 2007Total AssetsU.S. & Canada
    
    $
    13,712
    
    
    $
    13,334Europe
    
    
    2,094
    
    
    
    1,671Mexico
    
    
    1,789
    
    
    
    1,707Worldwide total assets
    
    $
    17,595
    
    
    $
    16,712
 Note 11Comprehensive Income
 12 Weeks Ended
    
    
    24 Weeks EndedJune
    
    
    June
    
    
    June
    
    
    June14, 2008
    
    
    16, 2007
    
    
    14, 2008
    
    
    16, 2007Net income
    
    $
    297
    
    
    $
    301
    
    
    $
    395
    
    
    $
    403Net currency translation adjustment
    
    
    43
    
    
    
    133
    
    
    
    21
    
    
    
    99Cash flow hedge adjustment (a) (b)
    
    
    7
    
    
    
    0
    
    
    
    12
    
    
    
    1Amortization of prior service cost and net
loss in net periodic pension /
postretirement cost to expense
    
    
    6
    
    
    
    12
    
    
    
    12
    
    
    
    23Pension liability adjustment (c)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Comprehensive income
    
    $
    353
    
    
    $
    446
    
    
    $
    440
    
    
    $
    531
 
 (a)
    
    Net of taxes of $0 million and $2 million for the 12 weeks ended June 14, 2008 and
June 16, 2007, respectively.(b)
    
    Net of taxes of $1 million and $0 million for the 24 weeks ended June 14, 2008 and
June 16, 2007, respectively.(c)
    
    Net of taxes of $3 million for the 24 weeks ended June 16, 2007. Note 12Full Service Vending Rationalization and Restructuring Charges
 Full Service Vending Rationalization
   Restructuring Charges
  13




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Note 13Contingencies
  Note 14Supplemental Cash Flow Information
  24 Weeks EndedJune
    
    June14, 2008
    
    16, 2007Interest paid
    
    $
    97
    
    
    $
    111Income taxes paid
    
    
    10
    
    
    
    17Non-cash investing and financing activities:Decrease in accounts payable related to capital expenditures
    
    
    (44
    )
    
    
    (32
    )Capital lease additions
    
    
    2
    
    
    
    2Acquisition of intangible asset
    
    
    
    
    
    
    315Contribution of acquired entity by PBG
    
    
    26
    
    
    
    Liabilities assumed in conjunction with acquisition of bottlers
    
    
    9
    
    
    
    Capital-in-kind contributions(a)
    
    
    24
    
    
    
    
 
 (a)
    
    On March 1, 2007, together with PepsiCo we formed PR Beverages Limited, our Russian venture.
In connection with the formation of this venture, PepsiCo agreed to contribute an additional $83
million plus accrued interest to the venture in the form of property, plant and equipment. During
the first half of 2008, PepsiCo contributed $24 million in regards to this note. The remaining
balance to be contributed to the venture is $48 million as of June 14, 2008. Note 15Guarantees
   14




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Item 2.
 MANAGEMENTS FINANCIAL REVIEW
  OUR BUSINESS
    OUR CRITICAL ACCOUNTING POLICIES
  
    
    Other Intangible Assets, net and Goodwill;
    
    Pension and Postretirement Medical Benefit Plans; and
    
    Income Taxes.
 Critical Accounting Policy UpdateOther Intangible Assets, net and Goodwill
  15




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OUR FINANCIAL RESULTS
 ITEMS AFFECTING COMPARABILITY OF OUR FINANCIAL RESULTS
  12 Weeks Ended June
    
    24 Weeks Ended JuneIncome/(Expense)
    
    14, 2008
    
    14, 2008Gross ProfitPR Beverages
    
    $
    
    
    
    $
    (4
    )Operating incomePR Beverages
    
    
    
    
    
    
    (4
    )Restructuring and Full Service Vending Rationalization charges
    
    
    (2
    )
    
    
    (5
    )
 2008 Items
 PR Beverages Limited (PR Beverages)
   Restructuring Charges
   Full Service Vending Rationalization
  16




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##### Table of Contents



FINANCIAL PERFORMANCE SUMMARY AND WORLDWIDE FINANCIAL HIGHLIGHTS
 12 Weeks Ended
    
    24 Weeks EndedJune
    
    June
    
    %
    
    June
    
    June
    
    %14, 2008
    
    16, 2007
    
    Change
    
    14, 2008
    
    16, 2007
    
    ChangeNet revenues
    
    $
    3,522
    
    
    $
    3,360
    
    
    
    5
    %
    
    $
    6,173
    
    
    $
    5,826
    
    
    
    6
    %Cost of sales
    
    
    1,916
    
    
    
    1,825
    
    
    
    5
    
    
    
    3,398
    
    
    
    3,168
    
    
    
    7Gross profit
    
    
    1,606
    
    
    
    1,535
    
    
    
    5
    
    
    
    2,775
    
    
    
    2,658
    
    
    
    4Selling,
delivery and administrative
expenses
    
    
    1,263
    
    
    
    1,215
    
    
    
    4
    
    
    
    2,326
    
    
    
    2,219
    
    
    
    5Operating income
    
    
    343
    
    
    
    320
    
    
    
    7
    
    
    
    449
    
    
    
    439
    
    
    
    2Net income
    
    
    297
    
    
    
    301
    
    
    
    (1
    )
    
    
    395
    
    
    
    403
    
    
    
    (2
    )
 Worldwide Financial Highlights for the 12 Weeks Ended June 14, 2008
 The impact of foreign currency translation, driven by the strength of all our foreign
functional currencies, contributed approximately three-percentage points of growth in worldwide net
revenues, cost of sales, gross profit and selling, delivery and administrative expenses and
contributed two-percentage points to worldwide operating income.
 Net revenues 
 Cost of sales 
 Gross profit 
 Selling, delivery and administrative (SD&A) expenses 
 Operating income 
 Net income
 17




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##### Table of Contents

\

2008 RESULTS OF OPERATIONS
 Tables and discussion are presented as compared to the similar periods in the prior year.
Growth rates are rounded to the nearest whole percentage.
 Volume
 12 Weeks Ended
    
    24 Weeks EndedJune 14, 2008 vs. June 16, 2007
    
    June 14, 2008 vs. June 16, 2007Worldwide
    
    U.S. & Canada
    
    Europe
    
    Mexico
    
    Worldwide
    
    U.S. & Canada
    
    Europe
    
    MexicoTotal volume change
    
    
    (3
    )%
    
    
    (4
    )%
    
    
    1
    %
    
    
    (3
    )%
    
    
    (1
    )%
    
    
    (2
    )%
    
    
    3
    %
    
    
    (1
    )%
     Net Revenues
 12 Weeks Ended
    
    24 Weeks EndedJune 14, 2008 vs. June 16, 2007
    
    June 14, 2008 vs. June 16, 2007Worldwide
    
    U.S. & Canada
    
    Europe
    
    Mexico
    
    Worldwide
    
    U.S. & Canada
    
    Europe
    
    MexicoVolume impact
    
    
    (3
    )%
    
    
    (4
    )%
    
    
    1
    %
    
    
    (3
    )%
    
    
    (1
    )%
    
    
    (2
    )%
    
    
    3
    %
    
    
    (1
    )%Net price per case
impact (rate/mix)
    
    
    5
    
    
    
    4
    
    
    
    12
    
    
    
    7
    
    
    
    4
    
    
    
    3
    
    
    
    12
    
    
    
    7Currency translation
    
    
    3
    
    
    
    1
    
    
    
    13
    
    
    
    4
    
    
    
    3
    
    
    
    1
    
    
    
    13
    
    
    
    3Total net revenues
change
    
    
    5
    %
    
    
    0
    %*
    
    
    27
    %*
    
    
    8
    %
    
    
    6
    %
    
    
    2
    %
    
    
    29
    %*
    
    
    9
    %
 
 *
    
    Does not add due to rounding to the whole percent.   18




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##### Table of Contents



Cost of Sales
 12 Weeks Ended
    
    24 Weeks EndedJune 14, 2008 vs.
    
    June 14, 2008 vs.June 16, 2007
    

June 16, 2007Worldwide
    
    WorldwideVolume impact
    
    
    (3
    )%
    
    
    (1
    )%Cost per case impact
    
    
    5
    
    
    
    5Currency translation
    
    
    3
    
    
    
    3Total cost of sales change
    
    
    5
    %
    
    
    7
    %
  Selling, Delivery and Administrative Expenses
 12 Weeks Ended
    
    24 Weeks EndedJune 14, 2008 vs.
    
    June 14, 2008 vs.June 16, 2007
    

June 16, 2007Worldwide
    
    WorldwideCost impact
    
    
    1
    %
    
    
    1
    %Restructuring and
Full Service Vending
Rationalization
charges
    
    
    0
    
    
    
    0Currency translation
    
    
    3
    
    
    
    3Total SD&A change
    
    
    4
    %
    
    
    5
    %*
 
 *
    
    Does not add due to rounding to the whole percent.  19




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##### Table of Contents



Operating Income
     Interest Expense
  Interest Income
  Other Non-operating Income, net
  Minority Interest
  20




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##### Table of Contents



Income Tax Expense
   LIQUIDITY AND FINANCIAL CONDITION
 Cash Flows
 24 Weeks Ended June 14, 2008 vs. June 16, 2007
    Liquidity and Capital Resources
    Contractual Obligations
  21




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##### Table of Contents



Off-Balance Sheet Arrangements
  CAUTIONARY STATEMENTS
   22




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##### Table of Contents



Item 3.
 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 Item 4.
 CONTROLS AND PROCEDURES
   23




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 6.
 EXHIBITS
 EXHIBIT NO.
    
    DESCRIPTION OF EXHIBIT3.3
    
    
    Amendment No. 1 to Bottling Group, LLCs Amended and Restated Limited
Liability Company Agreement10.1
    
    
    Insurance Policy between Bottling LLC and Woodlands Insurance Company, Inc.10.2
    
    
    Form of Promissory Note between The Pepsi Bottling Group, Inc. and
Bottling LLC18
    
    
    Letter regarding change in accounting principles31.1
    
    
    Certification by the Principal Executive Officer pursuant to Section 302
of the SarbanesOxley Act of 200231.2
    
    
    Certification by the Principal Financial Officer pursuant to Section 302
of the SarbanesOxley Act of 200232.1
    
    
    Certification by the Principal Executive Officer pursuant to Section 906
of the SarbanesOxley Act of 200232.2
    
    
    Certification by the Principal Financial Officer pursuant to Section 906
of the SarbanesOxley Act of 200299.1
    
    
    The Pepsi Bottling Group, Inc. Form 10-Q for the quarterly period ended
June 14, 2008, as required by the SEC as a result of our guarantee of up
to $1,000,000,000 aggregate principal amount of PBGs 7% Senior Notes due
in 2029
 24




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##### Table of Contents



SIGNATURES
  BOTTLING GROUP, LLC
(Registrant)Date: July 21, 2008
    /s/ Thomas M. LardieriThomas M. LardieriPrincipal Accounting Officer and Managing DirectorDate: July 21, 2008
    /s/ Alfred H. DrewesAlfred H. DrewesPrincipal Financial Officer