PANAMCO
                             MODERATOR: CRAIG JUNG
                               FEBRUARY 5, 2003
                                10:00 A.M. EST



OPERATOR:

On January 30, 2003, Panamerican Beverages, Inc. filed with the Securities and
Exchange Commission a preliminary proxy statement regarding the proposed
business combination transaction referred to in the foregoing information. In
addition, Panamerican Beverages, Inc. will prepare and file with the SEC a
definitive proxy statement and other documents regarding the proposed
transaction. Investors and security holders are urged to read the definitive
proxy statement, when it becomes available, because it will contain important
information. The definitive proxy statement will be sent to shareholders of
Panamerican Beverages, Inc. seeking their approval of the proposed
transaction. Investors and security holders may obtain a free copy of the
definitive proxy statement (when it is available) and other documents filed
with the SEC by Panamerican Beverages, Inc. at the SEC's website at
www.sec.gov. The definitive proxy statement (when it is available) and these
other documents may also be obtained for free from Panamerican Beverages, Inc.
by directing a request to Laura I. Maydon (lmaydon@panamcollc.com).

A detailed list of names, affiliations and interests of participants in the
solicitation of proxies of Panamerican Beverages, Inc. to approve the proposed
business combination is included in the preliminary proxy statement.

Good morning, Ladies and Gentlemen, and welcome to the Panamco conference
call.

Before we get started, I've been asked to read the following statement. During
the course of this call, the company may make certain forward-looking
statements within the meaning of U.S. Federal Securities Laws, including
statements related to anticipated future earnings and costs statements.

It is important to note that these statements involve a number of risks,
uncertainties, and other factors that could cause Panamco's actual results to
differ materially from those included in such forward-looking statements.
Information concerning such factors is contained in Panamco's Annual Report on
Form 10K for the year ended December 31, 2001, and other documents filed by
Panamco with the U.S. Securities and Exchange Commission, all of which are
available from the SEC.

This call will be followed by a question and answer session. Now, I would like
to turn the call over to Mr. Craig Jung, President and Chief Executive Officer
of Panamco. Mr. Jung?

CRAIG JUNG, PRESIDENT AND CEO, PANAMCO: Thank you, Operator. Good morning and
thank you for joining us.

With me on the call this morning are Annette Franqui, our Chief Financial
Officer, Carlos Hernandez , our General Counsel, Ruben Pietropaolo from
Panamco NOLAD, and Laura I. Maydon, our Investor Relations Manager.

Let me begin by saying that this has been an historic quarter for Panamco
marked by several significant milestones and achievements. As you probably
know by now, on December 23, 2002, Panamco announced that it had entered into
an agreement to sell the company to Coca-Cola FEMSA for a total consideration
$3.6 billion, including the assumption of net debt. We believe this is a
win-win transaction, and we are progressing smoothly towards its completion.

Last week, Panamco filed a preliminary proxy statement regarding this
transaction with the Securities and Exchange Commission, and both companies
have already made the requisite, regulatory filings. We have also started our
integration process, kicked off with a joint meeting between Coke-FEMSA and
Panamco



teams in Mexico last week that, I believe, left both sides energized and
positive about the opportunities this combination will create. Following these
developments, we still expect the transaction to close in the second quarter
of 2003.

During the fourth quarter, Panamco made significant progress in several key
markets, allowing it to report operating and net results in line with
guidance, despite the unfortunate events in Venezuela and a weaker foreign
exchange environment than originally anticipated. A continued focus on
execution and on channel and mix management drove positive volume growth in
all markets, except Venezuela, with total unit case volumes increasing 5.1
percent in NOLAD, 0.6 percent in Colombia, and 7.6 percent in Brazil versus
prior year.

At the same time, tighter cost and expense controls improved operating
profitability, particularly in Mexico, where Cash Operating Profit grew 22.9
percent, driving NOLAD's recurring Cash Operating Profit growth of 18.5
percent. Mexico and NOLAD's Cash Operating Margins reached 26.7 percent and
25.5 percent, respectively. Cash Operating Margin in Colombia improved 289
basis points to 22 percent, despite a significantly weaker exchange rate.

On a consolidated basis, recurring Cash Operating Profit for the quarter
reached $95.5 million, within our original guidance of $95 million to $105
million. This is an important achievement, given the $12.2 million loss booked
in Venezuela, primarily as a result of the general strike. Net income reached
$17.6 million, or $15 cents per share, also within our guidance.

For the year excluding facilities, reorganization, and other charges, Panamco
reported Cash Operating Profit of $416.7 million and net income of $76.6
million. Also, during the fourth quarter, we successfully concluded the tender
offer for shares of Coca-Cola de Panama through our ownership in CA Beverages.
The acceptance rate of the offer was approximately 95 percent, and we expect
to begin consolidating this operation in the first quarter.

For purposes of this report, we are accounting for the acquisition under the
equity method, incorporating into our Other Income line the positive results
achieved by the soft drink company, as well as the negative earnings from the
proportion of the beer company owned by CA Beverages. Once we fully
consolidate Coca-Cola de Panama, only the results from the soft drink
operation will be included in our results.

I'd now like to turn to some of the developments we are seeing in the first
quarter. After 60 consecutive days of a general strike in Venezuela, we are
happy to report that we gradually started distribution in some areas of the
country this past Monday and are now gradually resuming production.

As a matter of background on December 2, 2002, a general strike began in
Venezuela that effectively halted our production and distribution
capabilities. During that period, Panamco maintained a strictly apolitical
position and kept as a priority the safety of our employees, our assets, and
the Coca-Cola(R) trademark. We have worked closely with The Coca-Cola Company,
as well as with CAVIDEA , the food manufacturer's association in Venezuela, to
resolve this situation.

While it is impossible to predict the speed at which we will return to
normalcy or the exact financial results our operations will yield in the short
term, please rest assured that our team in Venezuela, with the help of both
our corporate team and The Coca-Cola Company, have developed a plan for a
limited return to operations that maximizes results while still protecting
employees in what are still very difficult circumstances.

Finally, some of you saw on our preliminary proxy statement, Panamco's
projected Cash Operating Profit of $470 million and net income of $115 million
for full-year 2003. We are confident of achieving these numbers on a
standalone basis with the caveat of Venezuelan operations, where we have not
yet updated our projections.

I'd like to now highlight Panamco's fourth quarter and full-year results. For
the fourth quarter, 2002, Panamco reported consolidated net revenues of $546.5
million, a decline of 20.4 percent versus prior year.




Additionally, consolidated net revenue per unit case in U.S. dollars, declined
19.9 percent compared to a year ago, primarily as a result of year-over-year
currency depreciation across the region.

Country by country, and on a currency-neutral basis, net revenue per unit case
declined 1.4 percent in Mexico and increased 1.5 percent in Central America,
1.7 percent in Colombia, and 10.6 percent in Brazil versus prior year. In
Venezuela, net revenue per case was flat compared to a year ago. Panamco
reported consolidating recurring Cash Operating Profit for the quarter of
$95.5 million, representing a recurring Cash Operating Margin of 17.5 percent,
flat from a year ago. Cash Operating Profit reflected improvements in key
markets, as well as the negative impact of events in Venezuela.

During the quarter, operating income reached $53.4 million, 14.8 percent below
last year. Income before taxes was $37.5 million, representing 30.8 percent
growth versus prior year. Our effective tax rate for the quarter increased
versus prior year, primarily due to Venezuela's use of tax loss carry-forwards
in 2001, which affects the comparison, as well as because a majority of the
earnings are to arrive this year by fully tax-paying countries, such as Mexico
and Central America.

Based on the above, Panamco reported consolidated, full year, recurring Cash
Operating Profit of $416.7 million in line with our previously announced
guidance of $415 million to $425 million. Full year net income, excluding
facilities reorganization and other charges, and the one-time sale of Kaiser,
was $76.6 million, ahead of our guidance of $60 million to $70 million.
Improvements below the operating line resulted from a reduction of 20.1
percent net interest expense, given the lower rates and our debt reduction of
$78.4 million versus prior year and an increase in other income mainly related
to the gains from the sale of Kaiser.

Now, before I turn it over to the Operator, let me emphasize that while we
have started our integration process with Coca-Cola FEMSA, we also continue to
focus on the day-to-day management of our business with a view to facilitating
a smooth transition and continuing to deliver value to our shareholders. Now,
I'd like to turn it over to the Operator for questions and answers. Operator?

OPERATOR: Thank you. The floor is now open for questions. If you do have a
question, or a comment, you may press the numbers one, followed by four on
your touch-tone phone. Once your question has been answered, you may remove
yourself from the queue by pressing the pound key. Please hold while we poll
for questions.

Our first question is coming from Lore Serra of Morgan Stanley. Please state
your question.

LORE SERRA, MORGAN STANLEY: Good morning. My question is about Mexico. Craig,
if I interpreted your filing correctly, your projections from Mexico this year
are about 287 million of EBITDA, which is about a 12 percent increase from
where I think you had for 2002, and I'm just wondering if you could walk us
through your views on revenue, currency and margins that would get you to that
kind of growth in Mexico this year.

ANNETTE FRANQUI, CHIEF FINANCIAL OFFICER: Lore, this is Annette. Listen, yes,
if you extrapolate from the numbers that are in the proxy statement, you do
get to those numbers. However, as you know, we do not give projections on a
country-by-country basis, and we do not give very detailed projections in
volume and revenue. So, unfortunately I'm not going to be able to expand much
more than that.

LORE SERRA: Ok. Well, maybe I could then just ask about the quarter. Could you
give us a sense of, you know, when you were talking about the 1.4 percent
decrease in revenue per case, is that total cases or is that just soft drink
cases, and could you comment a bit more on the pricing you talked about in
your press release for this year?

ANNETTE FRANQUI: It is total cases, and I'm going to let Ruben talk a little
bit about the pricing.



RUBEN PIETROPAOLO, General Manager, NOLAD: Lore, the strategy has been, as you
know, to have a sustainable pricing architecture. Of course, with new
competitor Big Cola in the market, we have been dealing with them in the last
six to eight months with the price of the 2L Ref Pet with success because we
have been able to reduce their market share in the last four or five months.
So, from now on, and with, I would say, Big Cola with a certain level in the
market, I think that we will be able, and we are exploring possibilities of
increasing the price of the 2L Ref Pet in order to be better positioned for
profitability of the business.

LORE SERRA: Ok, thank you.

OPERATOR: Thank you. Our next question comes from Jeff Kanter of Prudential
Securities. Please state your question or your comment.

JEFF KANTER, PRUDENTIAL SECURITIES: Good morning, everybody. Craig, did I
understand correctly, cash operating profit '03 of 470, and net income of 115?

CRAIG JUNG: Yes, Jeff.

JEFF KANTER: Ok. Could you just give us a sense of how, as we look into 2003,
here, what the pricing architecture is, or the pricing environment is like in
Brazil? If you could kind of go into that a little bit. Secondly, your results
in Colombia were a little bit better than what I was expecting. Is there
something, you know, can you dive into your quarterly results in that market,
please? Thank you.

CRAIG JUNG: Sure, let me first address your question about Brazil. I think
from a price-environment standpoint, I'm comfortable that the pricing
environment continues to be positive in Brazil. You know, as I mentioned, we
had over 10 percent pricing in local currency terms, and that was on all cases
averaged. Ok?

JEFF KANTER: Mm hmm.

CRAIG JUNG: As we look forward, obviously, you know, the key factor in Brazil
is being able to moderate pricing relative to inflation, recognizing right now
that devaluation is running higher than the rate of inflation. We continue to
see some improvements in the Brazilian currency. I think the market is
responding favorably to President Lula's choice of cabinet and his fiscal
policy, so far. So, we're continuing to execute our strategic plan.

We view Brazil, you know, being in an envelope. We don't have significant
downside risk, I caution though, we also don't believe we'll have significant
upside risk in Brazil. You know, that's how we structured our strategic plan
and our Annual Operating Plan for 2003.

Relative to Colombia, I'm very proud of the Colombia team. You know, Felipe
Alvira , who's our new president in Colombia really took the reins early
December in the transition with Roberto Ortiz. And in the quarter, they fully
delivered on their commitment to restore control of their cash operating
expenses. And we think that's outstanding.

On the other hand, I'd say we saw improvements in volume for the first time in
three years in Colombia. And that was a function on one hand of getting our
price architecture more rational. We have not taken significant prices in
Colombia. We will not take significant prices on returnable presentations in
2003. We will seek to get price increases through on one-way presentations.

I'd add a small amount of the volume increase in Colombia was due to some
exported volume, you know, largely to third parties in Venezuela, being quite
frank. But that was not a significant number relative to their total volume
performance.

JEFF KANTER: Fair enough. So -- and just so I understand with Brazil, you do
expect to take a little bit of prices into 2003 or not.



CRAIG JUNG: Yes.

JEFF KANTER: And it was asked and answered with respect to Mexico. So -- OK.
Thank you very much.

CRAIG JUNG: You bet.

OPERATOR: Thank you. Our next question comes from Chris Edwards of Fabian,
Pictet & Partners . Please pose your question or your comment?

CHRIS EDWARDS, FABIAN PICTET AND PARTNERS: Hi. Good afternoon -- I mean
morning to you. On just looking at the Venezuela particularly, I see that in
the merger agreement, you singled out Venezuela as a, sort of, area of unique
concern. And it's good to hear there's some sense of normality there.

But I just wondered if you could elaborate a bit on the provisions you have
about Venezuela in the merger agreement, particularly in the extent that that
relates to the exchange controls that may or not be being introduced there and
what effect that has on you and on the deal.

And if you could put Venezuela in, sort of, proportion to the deal for me, how
much of an importance to getting all the business closed and done by Q2 as
relates to Venezuela and what effect it could have.

ANNETTE FRANQUI: Yes. Hi, Chris . This is Annette Franqui. Listen, as you
know, the merger agreement has some material adverse effect conditions that
looks at changes in Panamco and its subsidiaries that's taken as a whole from
September 30th, 2002 until the closing of the merger.

For purposes of determining the MAE on Panamco and its subsidiaries taken as a
whole, other than with events related to Venezuela, certain things are
excluded whether they took place before or after the signing of the merger
agreement.

The events, as you probably know from the proxy, include changes in U.S. GAAP,
general downturns in the economy not specifically relating to Panamco, changes
in the industries in which Panamco operates and the imposition of exchange
controls or other currency fluctuations, as well as any actions that are taken
or not taken by the Coca Cola Company.

There's no specific MAE with respect to Venezuela. However, what there is, is
a different standard for events in Venezuela. There are no general exceptions
for economic or political events in Venezuela taking place after the signing
of the merger agreement although changes in U.S. GAAP and the impositionof
exchange controls or currency fluctuation are excluded from the MAE.

Additionally, for purposes of determining whether there is an MAE on Panamco
and its subs taken as a whole arising out of events in Venezuela, the analysis
starts from a baseline for the Venezuela operations that, in effect, is not
September 30th but that takes into account the anticipated affect on Panamco
of the deterioration in the Venezuelan operations from September 30th to the
signing of the merger agreement and whatever we thought was going to be the
deterioration that we anticipated at that time. As you know, when we signed
the merger agreement, the strike was already taking place.

CHRIS EDWARDS:  Sure.

ANNETTE FRANQUI: If events deteriorated beyond that base line, at that point
in time, it would have to be determined whether whatever exceeds the baseline
is material for Panamco as a whole.

But I think that that explains how Venezuela differs. Anything more than that,
we really cannot get into.

CHRIS EDWARDS: OK.

ANNETTE FRANQUI: OK.



CHRIS EDWARDS: Thanks very much.

ANNETTE FRANQUI: You're welcome.

OPERATOR: Thank you. Our next question comes from Steven Hanson of Millennium
Partners. Please pose your question or your comment.

STEVEN HANSON, MILLENNIUM PARTNERS: I have no questions, actually. Sorry.

OPERATOR: Our next question comes from Marco Vera, of Deutsche Bank.

MARCO VERA, DEUTSCHE BANK: Hi. Good morning. My first question relates to
Mexico. And I just wanted to learn more about the execution of the water
transition in Mexico, not only from a brand switch perspective but from a
re-balancing of the packaging strategy and where you are with that.

ANNETTE FRANQUI: Hi, Marco. This is Annette. In terms of the actual
transaction, as you know, we had a transaction in October of last year. We are
pending the majority of the payment in the first quarter.

In terms of where we are in the transition, I'm going to pass it over to Ruben
so that he can talk about the packaging strategy, et cetera.

RUBEN PIETROPAOLO, GENERAL MANAGER, NOLAD, PANAMERICAN BEVERAGES: Yes. Hi,
Marco.

MARCO VERA: Hi.

RUBEN PIETROPAOLO: We are -- we started the last week of January. And we are
converting in Morelia and Celaya, the personal sizes from Risco to Ciel. And
we have a program in order to convert the whole company, trying to achieve
specially that, in the next 12 to 18 months.

So this is what we have been doing accordingly with the actual situation. And
then, we are working with the Coca Colacompany in order to establish future
strategies for Ciel that has to be linked probably to the whole country since
this a nationwide brand.

MARCO VERA: Sure. OK. My second question also relates to Mexico, Ruben. Is
there -- are there any markets that you hold currently where you are selling
flavors at a premium versus Pepsi flavors in Mexico?

RUBEN PIETROPAOLO: That we are selling our flavors as a premium versus Pepsi
flavors?

MARCO VERA: Yes. Is there any market in Panamco that does that?

RUBEN PIETROPAOLO: No. No. The only thing that -- no. The answer is no. And
GEUPEC in the Morelia territory, they have their own brand, as far as I know
that doesn't belong to PepsiCo., but they have a really low price that they
position as a B brand, and we are over them. But this is a different brand.
It's not the PepsiCo brand.

MARCO VERA: Sure.

CRAIG JUNG: I'd also emphasize, Marco, I don't think our strategy on flavor
pricing is any different, by the way than Coca-Cola FEMSA's.

MARCO VERA: No. I mean I just asked because Coca-Cola FEMSA has just recently
closed that gap in flavors.

CRAIG JUNG: Right.



MARCO VERA: My final question relates to Venezuela. Should we expect any asset
write offs there prior to the change in control or are these going to have to
be assessed by the new owner? I mean, I realize you right sized the value of
assets in October. But things have deteriorated there.

CRAIG JUNG: The short answer is no. You know, we've done and updated our
testing relative to FAS 142 provisions. And at this time, we see no need to
make any further write-offs.

MARCO VERA: Thank you.

OPERATOR: Thank you. Our next question comes from Mike Branca of Lehman
Brothers. Please pose your question or your comments.

MIKE BRANCA, LEHMAN BROTHERS: Thank you and good morning. I have two questions
for you. First, I was hoping you could shed some light on your new product
activities across the broader geographies.

And what programs in terms of new CSD loan extensions you might have on the
table for 2003, if you could provide us some color there, specifically on the
-- in the Cola CSD category.

And second maybe, Craig, if you could maybe give some thoughts around the new
Coca-Cola global bottle or consortium for joint procurement best practices and
shared manufacturing and maybe give us some clarity as to the implication on
Panamco's cost structure, let's say on a three-year basis.

CRAIG JUNG: Yes, Mike. I guess let me say first, our new products in the
fourth quarter, we did launch new products in Costa Rica, Fanta Limon and also
a separate flavor. In Brazil, we launched two SKUs of beer. And in Guatemala,
we launched 1.5 liter returnable Pet of Fanta Naranja Orange.

Beyond that, we do have some new products planned for 2003. But I'm sure you
can appreciate that for competitive reasons, we just simply will not disclose
that.

Relative to the system initiative on purchasing in the bottler consortium, I'd
add that that is also, you know, not only the top bottlers participating but
also The Coca-Cola Company is supporting and participating in that program.

We and I, in particular, view that as a very positive move. We are not, at
this point in time, factoring in the planned savings. We have a very good
estimate of what we can realize as savings.

But I would add that that consortium is really now coming up to speed. And it
will focus against three different classes of materials for purchasing. But I
personally view it as a tremendous system initiative and one that has full
support from all of the top bottlers.

MIKE BRANCA: OK. Thank you very much.

OPERATOR: Just as a reminder, if you do have a question, please press the
number one followed by four on your touch-tone phone at this time. Once again,
that's one followed by four on your touch-tone phone at this time.

We have a follow-up question coming -- we have a question coming from Roy
Behren of Westchester Capital Management. Please pose your question or your
comment.

UNKNOWN MALE #1: ... proxy, the language from the proxy.

UNKNOWN MALE #2: Hello.



ROY BEHREN WESTCHESTER CAPITAL MANAGEMENT: Oh, I'm sorry. Did somebody just
call on me for a question? I stepped out of my office for a minute.

CRAIG JUNG: Yes.

ROY BEHREN: Sorry. This is Roy Behren from Westchester Capital. You referred
to currency moves with regard to the material adverse change clause. In
Venezuela, it was not an exception to the material adverse change. I was
wondering if the same would apply for Mexico? Because it appears that the
financing was just a dollar price translating into pesos.

ANNETTE FRANQUI: No. You misunderstood it. It is an exception both for
Venezuela and for the rest of the country.

ROY BEHREN: Got it. So the peso...

ANNETTE FRANQUI: No. Currency fluctuations are excluded for the material
adverse effect calculation.

ROY BEHREN: Super. Thank you very much.

OPERATOR: Thank you. We have a follow-up question coming from Lore Serra of
Morgan Stanley. Please pose your question.

LORE SERRA: Yes. I'm just wondering if you could talk a little bit more about
the situation in Venezuela. You talk in the press release about the loss in
December being eight million but the loss for the quarter being 12 million.

So you were obviously losing a bit of money into the beginning part of the
quarter. And you're talking about a burn rate of around five-and-a-half,
six-and-a-half million. I'm not sure what's included in that, you know, you're
scaling up production and distribution right now. I'm not sure if that's
realistic, or you'll do better than that. Can you just give us a sense of, you
know, what your expectations are with the caveat that I understand that the
visibility is not very great here.

ANNETTE FRANQUI: Lore, let me explain a little bit why the numbers for the
fourth quarter may look a little bit odd. Essentially there's one thing that
somewhat distorts the numbers a little bit in Venezuela which is that because
we use the U.S. dollar as the functional currency and we have a net liability
position in Bolivares, the effects devaluation actually creates a gain in the
balance sheet that is then allocated to the P&L account. OK. So that in it
self creates a distortion. If you excluded the FX, essentially you were at
much better numbers in October and November than in December. And pretty much
all of the loss would be due to December. When you take in to consideration
the FX, then the loss in December is less than the 12.2 that we show for the
quarter. And if you wanted to call me after the call I can walk through with
you, you know, what the adjustments are.

In terms of what we're looking for January, what we did was we had calculated
an estimate and actually the numbers that are coming out of January are pretty
similar to that. What we would lose is based essentially on the fixed expenses
because we have done some adjustments, for example, with third parties
etcetera, and that loss is about five-and-a-half to six-and-a-half million
dollars that excludes FX fluctuations. It is very possible because the
currency has devalued that you may have a number that is much better than that
at the COP level. But the number if you want to call is between
five-and-a-half and six-and-a-half.

LORE SERRA: That's assuming no production or is ...

ANNETTE FRANQUI: That is, for the month of January, assuming no production. In
the month of December it was higher than that because we had actually produced
some product that we didn't sell or we sold on a very limited basis. In the
case of January, there is really no production.



We are now working -- and I'll let Craig, you know, explain through some of
the plans, but we are now working, and we have been working for the last 60
days on different types of projections for when we resume our production how
the numbers are going to look.

CRAIG JUNG: Yes, Lore, this is Craig. Let me also add, I've tried to emphasize
both in our quarterly release, and also in our opening comments, that
Venezuela will be a very gradual resumption of business. OK. One of the large
issues facing the country is because PDVSA the Venezuelan oil company was on
strike and production is still only at about one third of the normal levels,
there is not gasoline broadly available in the country.

So I've tried to emphasize, from the time that the oil company resumes full
production, we would anticipate that it would take probably 45 to 90 days
before you see the pipeline refill with gasoline that would assure that we
could resume our normal distribution activities. Until then, we do have some
inventories of gasoline. We have about six days of inventory left. We do have
product in warehouses. We are manufacturing a limited number of SKUs at three
of our plants as we speak.

So it's going to be what I would call an environment of starts and stops. OK.
Now relative to our burn-rate, one of the reasons that we continue to have
operating expenses throughout the strike is because we continue to pay our
employees. We are committed to Venezuela. We have been. We remain committed.
And we will remain committed.

Now beyond that I would also say that obviously with the exchange rate being
frozen today and looking forward, you know, it will place some pressure on the
industry to be able to realize pricing. And I would note, you know, Pepsi in
Venezuela has also been on strike since December second. They , along with us
under the CAVIDEA, the manufacturers association umbrella, plan to return to
limited work on Monday.

Now Kola Real has operated in Venezuela largely throughout the strike. I will
tell you one of the things we believe is a positive that is that Kola Real has
executed two price increases from December second onward, one on January third
and the second this past Monday, February third. If you benchmark February
third versus where their pricing was in December second, they've increased
their 600 ml single serve Pet bottle 133 percent from 300 to 700 bolivars.
They've increased their 1.5 liter Pet package, 133 percent from 600 to 1,400
bolivars. And they've increased their 2.6 liter Pet package, 122 percent from
900 to 2,000 bolivars.

Now as we execute our gradual return to market, for the existing inventory, we
are selling it at our old list prices, and that is for legal reasons. Once we
put new product, new production in the marketplace, we will be taking out a
new price list. And obviously, that new price list will be geared towards
ensuring that we can offset the impact of the devaluation on the business,
because there are raw material components that are U.S. dollar denominated.

Now having said that, I'll also emphasize, we're the only manufacturer in
Venezuela that has a large returnable infrastructure and we will fully
leverage that returnable infrastructure as we resume operations.

LORE SERRA: Terrific. Thank you very much.

CRAIG JUNG: Sure. More than you needed to know.

OPERATOR: Thank you. Our next question is coming from Ana Zacapa of Bear
Sterns. Please pose your question or your comment.

ANA ZACAPA, BEAR STERNS: Yes, good morning. This is Ana Zacapa from Bear
Sterns. I was wondering if you could provide more detail on the Mexico
performance in the fourth quarter? Especially on what measures were taken that
resulted in the reduction in both cost of goods and the operating expenses.
Thank you.



RUBEN PIETROPAOLO: We -- as you know, we have been working for the first nine
months of the year reducing expenses, trying to reduce overhead and improving
productivity measures. All of this was reflected in the last quarter of the
year. We'll have reduced over 500 people in overhead improving productivity.
We have improved our distribution center. We have reduced six distribution
centers during the year. We have reduced route sales in the number of 20,
while increasing our volume by over five percent.

And so we have been able to really implement all of these kinds of savings in
the cash operating expenses line. That was reflected in the quarter.

On the other side, also we have been working with discounts and with some
pricing. And even though the prices for the quarter did not an increase, the
net effect of all of these things, really impact that. So if you consider what
we have been doing in the last quarter and thinking that we are really in a
position to start increasing some pricing next year, we see the future
reasonable good.

ANA ZACAPA: OK. Thank you very much.

OPERATOR: Thank you. Our next question is coming from Jose Yordan of UBS
Warburg.

JOSE YORDAN, UBS WARBURG: Good morning everybody. I just had a couple of
questions. One about your guidance of 469 million for the year I was wondering
what FX assumptions you're using for Mexico for the peso for the average or
year end or both for Mexico this year.

And then my second question was if you could just give us a little bit more
detail on unit case volume growth for Mexico. We had that in the press
release, but any color you can give on Mexico would be welcome.

ANNETTE FRANQUI: Yes, Jose, this is Annette, we are using a 10.42 exchange
rate for year end '03. OK.

JOSE YORDAN: OK.

ANNETTE FRANQUI: OK. And in terms of volume growth we have for the fourth
quarter for Mexico total unit case volume growth 4.6 and soft drinks of 4.8.

JOSE YORDAN: Great. Thanks a lot.

ANNETTE FRANQUI: OK.

OPERATOR: Thank you. Our next question is coming from Robert Ford of Merrill
Lynch. Please pose your question or your comment.

ROBERT FORD, MERRILL LYNCH: Hi, good morning everybody. This is Bob Ford with
Merrill can I get you to discuss your current operating trends across all of
the major territories?

And then when you discuss cash burn, I would assume you're talking about cash
flow. But what does that mean in something that I could see on the income
statement with respect to operating income or EBITDA?

And then when you mention that you're beginning to introduce Ciel in
Morelia/Celaya, what are you seeing in terms of acceptance of the brand of
Ciel versus Risco in those two markets? And what do you expect going forward,
as you roll it out in to the bigger presentations across the rest of the
franchise territory.

And also you had mentioned, I think the closure of six distribution facilities
and you said you reduced or eliminated 20 routes. Is that correct? Just 20
individual routes or were you referring to a percentage in terms of routes,
because I was uncertain.



And then lastly, Annette, could you give us the rest of your foreign exchange
assumptions for the remainder of the territories for 2003, please. Thank you.

ANNETTE FRANQUI: OK. Ruben why don't you answer the Ciel part, and on the
consumer customer acceptance.

RUBEN PIETROPAOLO: OK. We started, as I mentioned, last week of January to
change the personal sizes, half liter, of Ciel in Morelia and Celaya
territories. I would say that it's too early to tell but the first reaction,
the first 10 days we had not real changes. We explained to the customers, what
we have been doing. And here is a brand that is known nationwide because they
have national advertising.

So I think it's too early to tell but we don't foresee any real downside, on
the contrary. I think that our expectation is that with the whole
infrastructure that the core of our company has we will be able to push much
more of thesebrands.

ROBERT FORD: Great.

ANNETTE FRANQUI: Yes, Bob, let me give you the exchange rates. For year-end,
we have as I said, 10.42 for Mexico, 3.4 for Brazil, 3,003 for Colombia, 1,700
for Venezuela, and then 413 for Costa Rica, 15.3 for Nicaragua, and 8.4 for
Guatemala.

In terms of the cash burn, that is essentially cash operating expenses. It is
primarily the fixed cost and expense that we have in Venezuela. And as I said
that number of five-and-a-half to six-and-a-half is the number that is not
adjusted for any FX impact on the balance sheet.

ROBERT FORD: OK. Great. And then the -- just current operating trends the
first month. And then also the one question for Ruben, the number of routes
that you eliminated in Mexico, I just wanted to clarify that, because you
mentioned 20, but I -- is that what it was just you eliminated 20 routes?

RUBEN PIETROPAOLO: Yes, what we did is we started with semi-dynamic
dispatching. So for one pre-seller who used to have one route, one truck
delivered where the pre-seller sold the previous day. And now we are working
trying to have less routes, utilizing the maximum capacity of the truck. So
this way we were able to reduce 20 routes from the total routes that we used
to have. So 20 trucks I would say. And even though we have sold five percent
more during last year. This is the comment.

ROBERT FORD: And right now, what's the average number of cases per day per
truck in Mexico?

RUBEN PIETROPAOLO: I don't have this number in my mind. So I have an average
but this is by territory. I can give you this number later, if you like.

ROBERT FORD: Great. Thank you very much.

CRAIG JUNG: Yes, Bob relative to, you know, what we see as operating results
kind of out of the gates in 2003, what I would tell you is we're continuing to
execute our Annual Operating Plan. We believe it's still valid, particularly,
as I would emphasize relative to operating, OK. Volumes in Mexico in the month
of January have been a little bit softer than we have seen in the fourth
quarter. I would say relative to other bottlers in Mexico, I wouldn't say
that's unusual. OK. The one thing I would say in Mexico that we're keeping an
eye on we're going to be doing some work later this week is just, making sure
we understand the impact of the exchange rate. That devaluation is running a
little bit faster than we have in our plan, you know, owing concerns
internationally about the potential for a war in Iraq.

So we'll keep an eye on that. We may -- you know, we reserve the right to be
able to modify our pricing plans. But we keep it in perspective. OK. Again, to
the consumer what they see is inflation. They don't see the rate of
devaluation. However, I'd emphasize both Pepsi bottlers in general and Kola
Real have a larger share of their business tied in packages that are U.S.
dollar denominated or raw materials.



So, you know, my belief is that the market will be open and receptive to
seeing more favorable pricing in the first quarter.

Central America clicking. OK. Paco Vasquez is our General Manager there, is
outstanding. He is just having a great run. We're very proud of him. Colombia
staying right on track, again currency is a little bit faster than we thought.
But we believe we will have the opportunity to see some pricing on multi-serve
packages, the Pet packages.

And Brazil, again, sticking to the Annual Operating Plan. Devaluation a little
bit faster, but the guys, again know-how to make those trade-offs on pricing
and mix management. So I'm very comfortable with where we're headed in the
first quarter. Venezuela we've covered, I think pretty well.

ROBERT FORD: Great. And then with the FX move that you've had so far in
Mexico, we continue to see a weaker FX rate in Mexico than you're forecasting.
Would that have any implications for you packaging mix? Do you start pushing
more of the returnable assortments and taking advantage of the glass that you
do have in the marketplace there, to a larger extent?

CRAIG JUNG: Well I'd say yes, as much as the consumer and the customer will
accept that. OK. There are some limits and constraints when you get into
supermarket trade accepting returnable packages in Mexico. But yes, that's
part of our channel and package mix management strategy.

ROBERT FORD: But I guess I'm just trying to understand if it makes sense at
more modest movements in the FX rate to push Ref Pet, or a glass presentation
over one-way. And I guess I don't understand the economics to the degree that
you may in that determination.

CRAIG JUNG: Well again, as we said earlier, the bottom line is we think we
have been very effective in competing against Kola Real. Their shares in our
territories, what we have seen is that they tend in any market they've gone
into, they tend to peak in month four and then decline. And the peak shares
they've had in our territories were 2.8 percent of aggregate across our
territories. They're now down to 1.6 percent and continuing to fall -- two to
three-tenths each month.

The basis and what we really believe has been very effective was meeting their
pricing upfront, but then executing a very specific program at point of sale,
that is merchandising based and leverage on our call frequency on the
customers.

So the net is that on 2 liter returnable Pet you know, I personally believe
we've got the opportunity to realize some modest pricing on that package, OK,
and that's just the marginal contribution play.

Relative to Pet, yes, we're going to be leveraging our returnable
presentations. But at the same time, you know, I recognize we do have a large
Pet business one-way. And devaluation is currently in January running at about
16 percent year-over-year. So, you know, we're not seeing fully the pricing to
offset you know, the internal rate of inflation particularly on the cost of
goods line.

So we'll assess whether or not we have the opportunity to take pricing, the
team is going through that work today and we'll have a decision within the
next two weeks.

ROBERT FORD: Great, thanks Craig. One last question, and that is are you
seeing any other presentations that are in the market with the 2.6 liter, but
have you seen any smaller personal sized presentations from Big Cola?

CRAIG JUNG: No, to date . No.

ROBERT FORD: Great. Thank you very much.

CRAIG JUNG: Sure.



OPERATOR: Thank you. Our next question comes from Jeff Kanter of Prudential
Securities. Please pose your question or your comment.

JEFF KANTER: Hi, just a quick question, it seems as though you're looking for
about a six percent volume growth as we head in to 2003 relative to '02. And I
was just hopeful that you could kind of walk through where, you know, where
the delta is going? Now where the delta is going to come from with particular
attention, again to the Mexico and Brazil. But where do you think the biggest
swing is going to be in that volume growth component?

CRAIG JUNG: You know, Jeff, I guess what I would say is we're not going to
give guidance on a country-by-country basis. But obviously, if Venezuela has
been out of market and out of pocket, you know, we do expect as we return --
and we had a tough year in Venezuela last year. So you may recall throughout
almost the first five to six months we were at a 20 percent premium in prices
relative to Pepsi. So as we see a resumption of activity in Venezuela, we
think that will give us volume growth in that country.

JEFF KANTER: Yes.

CRAIG JUNG: Both relative to easy comps a year ago as well as by the time we
get to December lapping no sales. We only had two half days of sales to
supermarkets only in December.

JEFF KENTER: Right.

CRAIG JUNG: Beyond that, you know, what I'd really emphasize with our folks as
we develop the 2003 Annual Operating Plan is reasonable volume growth trends,
on a country-by-country basis and rational pricing relative to inflation. OK.

JEFF KANTER: That works for me. Thank you very much.

OPERATOR: Thank you. Our next question comes from Mike Branca of Lehman
Brothers. Please pose your question or your comment.

MIKE BRANCA: Thank you again. Just three quick questions dealing specifically
in Mexico and with a new Pepsi bottling system in place, the first question
relates to large format stores. I'm wondering what new behavior do you see in
terms of pricing? Or more clearly, linkage between the Pepsi product portfolio
and the Sabritas portfolio in the large format storage?

Second, in terms of any suspicion you have or changes in capacity within the
old GEMEX territories in terms of shifting production capabilities,
returnables and the like revisiting kind of the story eight years ago.

And then number three actions by the new Pepsi team in the water category. Any
color on that, Craig would be very helpful for us, thanks.

CRAIG JUNG: Yes, well let me first maybe talk about the large format piece.
You know, I'm at least relatively familiar with Pepsi Bottling Group. Number
one I would emphasis the large format stores in Mexico tend to really
represent about six to eight percent of our total volume. OK? In any given
month, it is not the U.S.

Second piece because of my experience with PBG and the programs that I had
done in Wal-Mart when I was there, we'd been very proactive in all of the
major change in Mexico, and particularly against, you know, working with
Wal-Mart and Comercial Mexicana, you know, at a store level as well as a
headquarters level on putting into place merchandising strategies that really
create not only volume, but create value for customers as well. And you know I
would welcome you to come down and spend some time going through a Wal-Mart or
a Comercial Mexicana with us and you can see it for yourself.



Relative to power of one, yes, I'm sure that Sabritas and PBG will try to
execute some power of one events. Again, you know I think the Coca-Cola system
understands how to develop and executes promotions as well.

The one thing I guess I would say in the large format is for us, you know, PBG
represents a competitor. They cover 20 percent of our territories. They do not
cover the other 80 percent of our territories. So we have taken all
appropriate actions, but we're not going to really revamp our business.

The other piece I'd say in large format, by the way, is you know there's been
speculation about Big Colas moving to that channel, or Cott moving to that
channel. The reality is if you go through those stores there have been price
brands. There will continue to be price brands. That is a fact of life in any
major large format channel in any developed country. OK?

Relative to PBG moves in water, to date, haven't seen anything of significance
that is worth mentioning. Would they launch Aquafina? I've been very upfront,
you know, over time that they've got a great brand in electro-pura, but I
suspect they'll probably leverage the Aquafina name as well. OK?

MIKE BRANCA: And how about on the manufacturing side? Any sense that you might
have in terms of capital, what he needs for the business, leaning more,
gearing more towards returnables. What would be your guess?

CRAIG JUNG: Well I haven't seen anything that would say, you know, capital
investments against returnable presentations. I'm sure they will reserve the
right, and particularly if the macros are troubling, I'm sure they will
reserve the right to be able to take a look at their returnable mix. In
near-term because of the lead times involved to do that, I suspect they'd
probably be trying to think about how to offset the internal rate of
inflation, driven by the rate of devaluation and the impact that has on Pet
packages and aluminum cans. OK?

The other side, again, what I would say is I think their focus in the
near-term will be productivity within their plants and their warehouses, and
beyond that the capital investment that we have seen them coming to market
with is more on the cold drink side. But that wasn't unexpected. And again, in
our Leon territories and our territories we've continued our investments
against cold drink and expanding our presence and upsizing coolers and our
paretto accounts from one door to three doors.

MIKE BRANCA: Thank you very much. I appreciate it.

CRAIG JUNG: Sure.

OPERATOR: Thank you. Our next question is coming from Alan Greenberg of CIBC
World Markets . Please pose your question or your comment.

ALAN GREENBERG, CIBC WORLD MARKETS: Yes, hi, good morning. In the proxy you
put forth the $469 million in cash flow number. Can you give us what Venezuela
would represent when you put forth that projection?

ANNETTE FRANQUI: Hi, this is Annette Franqui. As I said before we do not give
projections out in a country-by-country basis. Having said that as you have
probably heard from some of your colleagues if you go through the proxy you
can extrapolate some of the countries, so you can go ahead and do that.

ALAN GREENBERG: And is there, has there been a schedule put forth for
beginning the syndication of the credit facilities?

ANNETTE FRANQUI: That is a question that is probably better asked from Coke
FEMSA, but it is our understanding that they have already prepared the
bankbook and are starting soon the process of syndication.



ALAN GREENBERG: OK.

ANNETTE FRANQUI: The lead banks as you know are JP Morgan and Morgan Stanley.

ALAN GREENBERG: Right, right, and as, have you had any additional
conversations with the rating agencies just as a result of, you know, the
developments in Venezuela or the currency issues that are starting to develop
in Mexico?

ANNETTE FRANQUI: Again what I would say is that is something that you should
ask Coca-Cola FEMSA. The developments in Venezuela other than what we have
said today are no different than when we signed the merger agreement. And it
is my understanding that the rating agencies, you know, were fully aware at
that time. And in terms of the currency you would have to ask Coke FEMSA
whether they have had a conversation.

ALAN GREENBERG: Thank you.

OPERATOR: Thank you. Our next question comes from Yang Xiang of HLM. Please
pose your question or your comment.

YANG XIANG, HLM: Hi good morning. This is Yang Xiang from HLM management. I
have questions on Mexico please and first on the supermarket side you
mentioned the increased competition over there. Wonder maybe you can shed some
light on it whether that refers to the Colasentrance to maybe Comercial. And
secondly on the supermarkets again, wonder what's the current gap between the
pricing over there versus the mom and pop stores in your territory. And lastly
under pricing outlook in Mexico and wonder what's your view of maybe it's too
early to ask and wonder if you have a view already? What's your view on the
outlook in year 2003 relative to inflation? Thank you.

RUBEN PIETROPAOLO: Could you repeat the first question please?

YANG XIANG: Sure, the first one is on Mexico pricing, supermarkets. Wonder,
you had mentioned the increased competition in the press release and thought
for this reason why there was some pricing activities over there. I wonder
whether you can shed some light on it? Say like specifically who are
competitors you refer to or what all is happening over there?

RUBEN PIETROPAOLO: The supermarket represents about six percent of our volume
in our territories. Of course you have always the price brands in supermarkets
and we have been dealing with that for the last five or six years. The only
thing that is happening now is that Big Cola is coming also as a price brand
and at a supermarket has on a weekly basis we have been dealing with these
kind of price promotions, one week off and then they come back again. So we
don't see any major changes in what have been happening in the last three or
four years in Mexican supermarkets in our territories, so we don't foresee any
major problem on that.

CRAIG JUNG: I would add by the way, and this is not only true in Mexico but in
any Panamco territories, you know, I've worked very closely with our folks in
terms of really trying to make sure they think about inter-pricing
architectures, about cross channel migration. You know we work actively to try
to make sure that our prices, when we structure promotions in supermarkets,
whether it's Mexico or whether it's Brazil or any other country that we don't
see promoted price points on any SKU that would be below the list price that
we sell our products for off of our route trucks and other channels. The
minute you do that you end up having significant cross channel migration with
small format customers buying from large format customers. That obviously
hammers our march.

Now that's been part of our success in Brazil by the way in managing our
business there from a channel and package mix management standpoint. The same
is true in Mexico. I think what you saw in December was just, you know, a
little bit heavier than ordinary competitive pressure in the month of
December. You know the larger question as I said and I think it's a question
not only for Panamco but for the industry as you see the rate of devaluation
go at 16, 18 percent in Mexico, you know, that has an impact on the cost of



Pet bottles and the cost of aluminum cans. And your internal rate of inflation
and your cost of goods start creeping you need to be able to offset that.

You can do a certain amount within cash operating expense controls. You can do
a certain amount within channel and package mix management, but at the end of
the day you're going to have to see some pricing improvement to offset that.
And you've got to balance that against the rate of inflation that the consumer
is seeing. So it's artwork, you know, we're doing that work at this point in
time.

YANG XIANG: Thanks.

OPERATOR: Thank you. Our next question is coming from Pablo Zuanic of JP
Morgan. Please pose your question or your comment.

PABLO ZUANIC, JP MORGAN: Good morning everyone. My first question is for Mr.
Pietropaolo. For any, if I look at EBITDA margin of Coca-Cola FEMSA in
Mexico/NOLAD I'm looking pretty much around 30 percent. If I look at the
Panamco I'm looking around 22 percent. I mean simplistically one would think
well Coca-Cola FEMSA management with more than 22 percent to 30 percent in a
heartbeat. What would be wrong about that assumption? I mean I understand
there are issues about the treatment of PTU. There are distribution issues,
mix issues, but give me some color in terms of how those numbers, the way
those numbers are comparable and if not, you know, what at world we should be
doing to those numbers?

RUBEN PIETROPAOLO: Yes, Pablo good morning. We have two or three different
things. One is we report in U.S. GAAP and Mexico with the Mexican GAAP and
there is a difference between these two accounting principles. Second we have
....

PABLO ZUANIC: How much, I'm sorry, on that first point, how much would you
quantify that at? I mean is it two points, three points?

RUBEN PIETROPAOLO: It's like one and half percent roughly.

PABLO ZUANIC: Right.

RUBEN PIETROPAOLO: One and a half percentage points. Second we have water that
is in our volume, like 40 percent. So this means that the marginal
contribution or the COP from soft drinks is much larger in our territories
than as a whole with water. So if we extrapolate that, we also have a better,
I will say soft drink would be a better margin alone, than with jug water, not
in personal sizes. And on the other side if you compare and if you can see
because of the concentration of that the FEMSA had in the beer and if you
compare what they have in the southeast we, with exception of Leon and maybe
Puebla, we need more distribution centers, we need more trucks and our
efficiency productivity per truck is lower because of the size of the city. So
I would say that these are the three things that are affecting our
profitability as well as in the last quarter the pricing strategy with Ref
Petin Puebla and Veracruz because Big Cola has their plant in Puebla and
they've started in Puebla and they have much easier distribution over there.

PABLO ZUANIC: Right, and that's very good. Now on the third point that you
mentioned, how much would you quantify that at? Are we talking, is it 100
basis points, 200? What would be your best estimate?

RUBEN PIETROPAOLO: You mean on the concentration?

PABLO ZUANIC: Yes.

RUBEN PIETROPAOLO: This is what I would do is very easy. We can have, I would
say the difference between, I don't know southeast, the southeast of FEMSA I
would be much more comparable with that. But it is very difficult really to
....

PABLO ZUANIC: Yes, OK.



RUBEN PIETROPAOLO: ... I don't have the response at this question (ph).

CRAIG JUNG: Yes, note for what I would tell you, and this is, you know, this
is from having spent a little bit of time at looking at it and also I think
from just outtakes from our integration kickoff meetings in Mexico, I think
Coca-Cola FEMSA from my perspective they're outstanding operators. They really
work their distribution network hard. There are obviously synergies to be had
because there's the opportunity to rationalize the number of plants, the
number of warehouse where our territories are contiguous. They already have
those, you know, clearly on their radar screen as a priority, and in fact I
would tell you the integration of Mexico is the number one priority in the
entire integration work. So they will be going after that. I think they've got
a very realistic, you know, and meaning very conservative assumption on
synergies that they can derive by integrating their two operations.

PABLO ZUANIC: That's a good point. I appreciate the color you gave us there.
One more question, Ruben, and I'm sorry to come back to the issue of pricing.
When I'm looking at your revenue per case in dollars, quarter-by-quarter and I
convert it into pesos, pretty much from December to December the peso price
was flat. That means about a four percent decline in real peso terms compared
to the people who had two percent increases. I'm assuming that that has to be
because of the competitive environment that you face compared to other
bottlers. Like for example Coca-Cola FEMSA in Mexico City.

That necessarily from my point of view is not going away. I understand that
Big Cola has doubled their capacity. They are running at full capacity. So
just give me -- what I'm trying to understand first of all is why do you think
the competitive environment will allow you to increase prices? That's the
first question. And on the same topic, what would be the price differences
between your Bajio region and your Gulf region if I'm trying to, if I'm
walking around Celaya, Leon, Morelia, what would be the price difference I
would be looking at? Are they very similar or are you getting better prices in
the Bajio and if so is it because the competitive environment there is
healthier, i.e. Big Cola hasn't arrived? Any color there would be appreciated,
Ruben.

RUBEN PIETROPAOLO: OK, Pablo first as you know in December of 2001 we had a
very aggressive pricing for the last, for 2000/2001 we have been pricing up
ahead of inflation and ahead of the devaluation. So we're coming really from a
very highly competitive pricing that was ahead of our main competitor and also
ahead of other Coke bottlers neighbors o us. So this is why we have been
restructuring our price architecture and now we are in a, I would say, good
position to keep growing again. This is why we came down. We didn't increase.
On the other side, yes is correct that in Golfo due to Big Cola we have been
pricing down the two liter Ref Pet, but on the side and as Craig mentioned
before because of the devaluation that the -- the 16, 17 percent devaluation
-- this will be affecting Big Cola also. So, they will not be able to really
keep making money if the devaluation stays where we are.

So, we think that we will be able, and because of the execution, to increase
price in the Gulf area where Big Cola is stronger. We have a difference
between Gulf that is Puebla Veracruz Xalapa and Bajioby one and two pesos. We
have the Ref Pet at 11 and 12 pesos. We have 12 pesos in Leon where we have a
very healthy profitability. So, what we have been doing is trying defending
Gulf and at the same time trying to be maximizing profitability in Bajio. This
is the situation and in Bajio Big Cola is really not -- it's really starting
to come in the recent months.

So, this is why I think that with the execution that we have been having and
with the results and dropping the market share of Big Cola we will be able to
have some pricing in two liter Ref Pet in order to restore profitability in
Gulf area.

PABLO ZUANIC: OK, thank you. And just one last question, Craig. In Venezuela,
if you remember, at the end of November you guys had to cut prices because
Polar cut prices. And I don't recall if it was over 20 percent on the
two-liter presentations. I assume that because in December there were no sales
we're not seeing the impact of that price cut in your fourth quarter numbers
of Venezuela.  Is that correct?



CRAIG JUNG: Yes, that's correct. Bottom line, what I would tell you I think
some people have blown what I did in Venezuela, and I emphasize I personally
did, way out of proportion. Right. December 2nd we changed the price on
two-liter PET packages in Venezuela from 1,200 bolivars to 1,000 bolivars.
That was all a pricing architecture decision. The Pepsi Venezuela operation
had priced their primary package 1.5 liter at the time, if I recall, were
about 800 bolivars for their package. They're effectively on a per-liter
basis, discounting at nine to 10 percent relative to our two liter PET
package. I sent a very clear signal and said I am going to remain competitive
during the peak volume consumption period in the year, December. All right.
That's all it was, matching the competition.

Now, bottom line, the strike happened December 2nd. There was no effect and we
are now in the process of revamping our pricing architecture relative to what
we've seen Kola Real come out, which is a benchmark. We will restore a premium
to Kola Real, reflecting our brand equity and preference, but I want to make
sure that we've got a healthy pricing architecture in Venezuela and one that
will maximize our profitability and also deliver volume growth in that country
as we resume operations.

PABLO ZUANIC: But does that mean that then if Polar do not increase prices on
that format you will increase prices anyway?

CRAIG JUNG: Well, I want to see what Polar does. I always reserve the right to
make any adjustments or corrections so that we ensure that we balance what
we're trying to achieve financially and what we're trying to achieve from a
market share position. But, again, if you just think about the math, the rate
of devaluation is 118 percent year over year. We have much more of a
returnable infrastructure in Venezuela than our competition has. Kola Real is
100 percent and Pepsi I don't know their exact number, but I can assure you we
have well over twice the returnable volumes that they have in the country. So,
if you work the math from their perspective, unless they are finding a way to
procure PET bottles at lower rates than the market leader in Venezuela, I have
to believe that they're going to be in a position where they need to take
pricing and take it aggressively in order to continue to deliver a rational
level of marginal contribution.

PABLO ZUANIC: Right. That's very good. Thank you very much.

CRAIG JUNG: Sure.

OPERATOR: Thank you. Our next question is coming from Simon Roosevelt of
Kushman Capital. Please pose your question or your comment.

SIMON ROOSEVELT, KUSHMAN CAPITAL: Good morning to you all. Just a quick
question or two on the merger agreement.

I noticed that you skipped Venezuela in your definition of antitrust laws. I
was just wondering if you could comment a little bit to the extent you know
what sort of regulatory approval processes are necessary there and how if at
all you expect those to be impacted by the government's obvious distraction
with other events there.

The second question is, if I understood you correctly, essentially what the
MAC clause does with regards to Venezuela is use December 23rd as a baseline
instead of September 30th. If you would just confirm that my understanding of
that is correct, I'd appreciate it. Thank you.

ANNETTE FRANQUI: Yes. Let me clarify that. The baseline is in indeed the
events that we have seen up to December 23rd as well as what at the time we
forecast would happen from the signing of the merger agreement to the closing.
OK. And, as you remember, on December 23rd we had already been on a strike for
three weeks and we did not see that there was a resolution in the short term.

CRAIG JUNG: Yes. Let me also comment on the regulatory approvals that have
been filed, and Carlos Hernandez, who's our general counsel, is with me, so he
can correct me if I stumble here.



But the regulatory filings that we have to place are in the U.S., Mexico and
Brazil, and they have been made. OK. And there's more information on that in
the preliminary proxy statement. Brazil was filed on January 14th. There's a
statutory time there of 120 days. Mexico was filed on January 20th, with a
statutory time of 80 days. U.S. was filed on January 22nd with a statutory
time of 30 days. I would add Mexico and Brazil regulations do not prevent the
transaction from closing if the regulatory approvals are pending. And as an
aside, the U.S. granted regulatory approval yesterday, last night. So, that
one's already cleared. Venezuela there is no requirement for us to do any
regulatory filing for antitrust.

SIMON ROOSEVELT: So, there are -- if I understood you correctly, you just told
me that there are no regulatory filings as far as you're aware that need to be
made in Venezuela in order to complete the transaction.

CRAIG JUNG: That's correct.

SIMON ROOSEVELT: OK. Thank you very much.

OPERATOR: Thank you. Our next question comes from Brett Patelsky of Tiedemann.
Please pose your question or your comment.

BRETT PATELSKY, TIEDEMANN MANAGEMENT: Yes. I wondered if you could in
Venezuela just give us any guidance as to what the EBITDA numbers would be
going forward, what the expectations are.

CRAIG JUNG: Brett, I would tell you again we do not provide guidance on a
country-by-country basis. And as we tried to stress earlier, right now I think
it's very difficult for anyone to be able to forecast any results in the near
term in Venezuela. We have a very good handle on what our cash operating
expense's burn rate is. We've taken some steps to address that. We have
continued to pay our employees. We have taken several managers out of the
organization, either because we had planned to do that on performance related
issues or in concert with consolidating down from eight sales regions to four,
which is already in our plan.

BRETT PATELSKY: The -- when -- with the expropriation of the products at the
warehouse, has there been any feedback as to whether you'd be compensated for
that? What's your understanding of that if it happens again? And are you
insured at all?

CRAIG JUNG: Well, Brett, let me state, number one, for the incident that
happened at our plant in Valencia, Venezuela on January, if I recall, 17th,
the trucks that were taken out by the National Guard that were loaded with
product were all returned and, interestingly, were returned with all product
on them. OK. So, there have been no losses of vehicles, have been no losses of
products.

What I would secondly say is we have secured working with CAVIDEA, the
Venezuela Food Manufacturer's Association, and similar to other major food
manufacturers, we currently have three court order injunctions in Venezuela.
One is within Valencia, the city itself, that protects our plant, our vehicles
and our inventories. The other two are national court injunctions that prevent
seizure of plants, seizure of vehicles, seizure of inventories. OK?

BRETT PATELSKY: OK.

OPERATOR: Thank you. Our last and final question comes from Steven Hanson of
Millennium Partners. Please pose your question or your comment.

STEVEN HANSON, MILLENNIUM PARTNERS: Hi. You stated earlier in the call that
you expect no further write down of assets in Venezuela. But do you expect any
write up or write down of assets in any country as it relates to merger
accounting on the close?

ANNETTE FRANQUI: That is a question that you need to ask Coca-Cola FEMSA (ph).
That is their purchase accounting and that's something that I'm sure at the
appropriate time they will talk about.



STEVEN HANSON: OK. Have you already done that analysis on your own and just
can't state it, or is that still part of the integration efforts?

ANNETTE FRANQUI: No. It is not relevant to us. It is the responsibility of the
purchaser to do that analysis. As we said before, we have done the analysis
that we need to do for purpose of FAS-142 in Venezuela, and we're fine there.
And in the rest of the countries it's not an issue. But, as I said, Coke FEMSA
will have to do that analysis themselves.

STEVEN HANSON: OK, thank you.

CRAIG JUNG: Operator?

OPERATOR: Mr. Jung, that's all the questions we do show for today.

CRAIG JUNG: OK. Well, thank you very much. And, again, I thank all of you for
your continuing interest in Panamco. And I want to assure you that we will
keep you apprised of any important developments as we proceed through the
first quarter towards the close of the Coca-Cola FEMSA transaction. Thank you
very much.

OPERATOR: Thank you. This does conclude today's teleconference. You may
disconnect your lines at this time, and have a wonderful afternoon.

END