Ms. Jones: In general, it was consistent with my initial expectations, but cost inflation was far more pronounced than I had expected at the beginning of 2007. The names that I expected to benefit from the operating environment did benefit, but the extremes in costs were more than I had anticipated.
TWST: What drove inflation during the year and got it above where you expected
it to be?
Ms. Jones: Commodities, specifically wheat and vegetable oils. Fuel oil also
accelerated later in 2007. Corn also took off late in the year, but it had
already risen dramatically going into 2007. Coming into 2007, wheat had
stabilized somewhat, but in the second half it surged well beyond what I
expected. Soybean oil and other food oils took off as well, registering year-
over-year increases well north of 100%.
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