Ladies and gentlemen, thank you for standing by. Welcome to the General Mills third quarter fiscal 2009 results conference call. During the presentation all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. (Operator Instructions) I would now like to turn the conference over to Kris Wenker, Vice President of Investor Relations. Please go ahead ma’am.

Thanks Alex. Good morning everybody. I’m here with Ken Powell our CEO and Don Mulligan our CFO. Before I turn you over to them, I’ve got to cover my few housekeeping items. Our press release and third quarter results, was issued over the wire services earlier this morning and is posted on our website if you still need a copy. We’ve also posted slides on our website that supplement today’s prepared remarks. This conference call will include forward-looking statements that are based on management’s current views and assumptions and the second slide in today’s presentation lists factors that could cause our future results to be different than our current estimates. So, with that I’ll turn you over to Don.

Thanks Kristen and thanks to all of you who’ve joined us today. The third quarter was our toughest quarterly comparison for the year for reasons you are familiar with. We faced a significant year-over-year increase in input costs and we experienced a full quarter’s worth of foreign exchange headwind. Last year’s third quarter results included unusually strong grain merchandising profits, and nonrecurring gains in our joint venture results, and we are lapping last year’s strong top line growth. The results we reported this morning reflect this difficult comparison, but that’s not the complete picture. Underneath the comparison items we’re seeing continued strong operating momentum in our business and with that solid performance through the first nine months we’re raising our earnings guidance for the year in total. Slide five summarizes our results for the quarter. Net sales increased 4% to $3.5 billion; segment operating profit totaled $560 million, below prior year levels, primarily due to lower grain merchandising profits, FX and higher input costs. Earnings after tax were $289 million and diluted earnings per share as reported were $0.85. These results include several items that impact comparability as shown on slide six. Our earnings in both 2008 and 2009 include gains from mark-to-market valuation of certain commodity positions. In 2009, the gain totaled $71 million pretax or $0.13 a share. In last year’s third quarter, the mark-to-market gain was twice as big, $0.27 a share. Our earnings in both years reflect the impact of court decisions on a tax matter. Last year, on the basis of a U.S. District Court ruling, we recorded a $31 million gain or $0.09 a share. This January, a U.S. Court of Appeals ruling reversed the District Court decision. As a result, we reversed the $31 million tax benefit recorded last year, along with $22…

Thanks, Don and good morning to one and all. As we move into the final quarter of our year, we’re pleased to see continued good consumer demand for our products around the world, despite a very challenging operating environment and as we told you at Cagney, we believe we have a portfolio for all seasons. Slide 25 shows you that our top line growth continues to be broad base. For the year-to-date, all of our businesses and segments posted sales growth, with more than half of them up by double digits. Remember that international sales are up double-digit too on a constant currency basis and snack sales would be up 10% if you excluded Pop Secret from last year’s results and the categories where we compete, are good ones to be in. They meet consumer needs for taste, health benefits, convenience and value and as a result, these categories are growing. Slide 26 shows you the category growth in measured channels through the first nine months of this year. You can also see that in most cases, our brands are outpacing category growth and trends in non-measured channels, including supercenters and club stores, are generally stronger than the growth you see here. Our sales growth within our categories is driving good market share performance. We’re not up in every category, but overall performance has been strong with nice share gains in some of our larger categories, including soup, cereal, grain snacks and dinner mixes. Let’s take a closer look at some of these businesses and I’ll start with our Big G cereal division. Big G cereal is having a terrific year and the driver of that performance is baseline growth. As you can see on slide 28, non-promoted sales of Cheerios, Fiber One, Honey Nut and Multi-Grain Cheerios are growing…

Thank you. (Operator Instructions) and our first question comes from the line of David Driscoll with Citi Investments Research. Please proceed with your question.

Thank you. Good morning everyone.

Hi, David. Good morning.

Well certainly, I think these results in context of what we are seeing out there in the environment do look good and that U.S. retail segment, I would call it somewhat amazing. Big G cereals sales up 13%, Ken can you talk to us about really the kind of, if we could peel the onion a little about the factors within Big G, between the category competition, your new products and your promotion? These are, again some of the best numbers that you’ve produced in that particular segment within U.S. retail in quite some time and I think a lot of people are quite interested in how you attribute the success?

Well, thanks David for the question. I mean the category, I think as you know has been pretty solid all throughout the year, a little over 2% year-to-date for us. Recent month, the category trend was a little better than that and that’s in measured channels only. So we think clearly when you include all of our channels, the growth is even better than that. So the categories are very solid I think in this economic climate. People are probably choosing to eat breakfast a little bit more at home, so that’s good, but I think the big, big factor for us is that our execution right now is so strong across the board. We have very solid messages across the Cheerios franchise and I commented on that in our remarks. We had a very, very solid initiative behind Multi-Grain Cheerios this year, which has that brand growing now in the high double digits and so the Banana Nut Cheerios adding almost a full share point. So Cheerios, which is the largest franchise in category, is also one of the fastest growing brands in the category. So that’s a great story. Fiber One continues to perform very well for us and we just launched a shredded version of Fiber One and that’s going to help that franchise. Total cereal now is growing at strong rates. Our kid brand, very good execution there, so it’s really a story of excellent marketing fundamentals with as I said earlier, all eight of our core franchise is growing on a baseline basis, which I think is the best indicator of that good execution across the board.

When you look forward and you think about sort of the next 12 months and you think about private-label and commodities, is there any significant negative in terms of competition from private-label that you would call out for us right now? I mean obviously the strength here is amazing and so I acknowledge that, but always on a go forward basis, we’re trying to be sensitive to this economic environment and what might happen because of the decline in the grain costs?

Yes. Well, what I’d say on that David is that we’ve had a year of higher inflation. If you look at the decade, inflation is probably averaged a little better than 5%, input cost inflation. Last year for us it was 7%; this year as we said, it will be 9% and we’ve offset a lot of that with productivity, so our pricing has lagged that. Actually private label cereals in aggregate in this environment have increased their prices a little bit faster than we have. So we’re sitting at maybe 6% or 7% now for all our categories and private-label is probably closer to 9%. So we see private-label pricing a little bit ahead of us and we don’t see any evidence as we look in a lot of detail at the tracking data of private-label prices coming down. I think the reason for that is that they’re in the same commodity environment that we are and as they look forward, they probably see the same thing we see, which is less inflation next year and today we guess it will below single-digit inflation, but we’re probably still going to see some input cost inflation next year and so I think we’re all living in that environment. We expect a sort of price balance between our cereals and private-label cereals to stay pretty constant as we go forward and we pay attention to that balance, but that coupled with all the other great brand advantages that we offer in terms of price and quality and health benefits, we think will hold us in good stead.

Great, that was very helpful. Thank you.

And our next question comes from the line of Eric Katzman with Deutsche Bank; please proceed with your question.

Hi, good morning everybody.

Hi, Eric.

Good morning Eric.

I guess my first question has to do with the argument that the gross margin is going to expand so much in the fourth quarter. Stock is down pre-market 4% or 5%, so I guess investors are somewhat concerned as to your visibility on that. So Don, maybe could you go through that a little bit in more detail and then I have a follow-up.

Sure. As you know Eric, at the beginning of the year we said that we would have 9% inflation in the course of the year and we’re still tracking to that number. At the beginning of the year, just based on the flow at the time, we expect that to be more frontload in the first half of the year, but actually the way our positions worked out, it ended up that Q3 was our highest inflation quarter. Clearly, we now have a line of sight on where those costs are going to come in for Q4 and while we’re still going see inflation, it’s going to be materially down from what we’ve seen year-to-date, given the pricing and the mix plus that we’ve had year-to-date that will hold in the fourth quarter. The algorithm of those increases combined with the decelerating inflation from our current commodity position; get us that gross margin expansion in the fourth quarter. So, it’s really a matter of the flow of inflation being different than what we had anticipated the beginning of the year, the total year being the same, but being a little bit more evenly spread through the first three quarters as opposed to just in the first half of the year.

Is HMM contributing more to the gross margin expansion in the fourth quarter or is that pretty much on a similar run rate to what we’ve had during the year?

Yes, it’s pretty constant. Obviously, the savings build there in course of the year; we’re also building over a base of last year as well. So it’s fairly constant, the movement you’ll see in the fourth quarter will be primarily driven by the fact of lower cost positions on the commodities.

Okay, and then Ken, what I understood was that the industry and the trade loaded a bit in the fourth quarter, the December quarter I should say and on some decent deals and then the consumer decided to pantry de-load, and then in January order trends were just surprisingly weak versus history, but then kind of February and March have comeback to a more normalized environment. Is that a fair description of what you think happened in the industry over the last few months?

Well, let me just comment on General Mills. I mean I can’t really speak for the industry and sort of the inside workings of loading and de-loading for each of our inventory adjustments, for each of our competitors. What I will tell you is that inventory adjustments at end of year sort of positions for our major customers. We see that virtually every year for the customers whose fiscal years end in December, January and February, and frankly it’s very predictable and we didn’t see anything this year that was outside of the norm in that context of inventory de-loading and certainly nothing that I would call out to you as a factor in our performance. So I guess to summarize, our customers typically will do a little bit of that adjusting at the end of the year. There was nothing unusual this year and it wasn’t a factor in our performance over the last quarter.

Okay, I’ll pass it on. Thank you.

And our next question comes from the line of Terry Bivens with JP Morgan. Please proceed with your question.

Good morning, everyone.

Hi, Terry.

Good morning, Terry.

Two things this morning; Ken, in terms of the cereal business, as we look at it as you go through the second half of the calendar year, I guess your first half, it looks like Kellogg is lapping some fairly easy comparisons, you guys are lapping some tougher ones and I think Kellogg has been pretty clear that they are going to promote more. So, the question is this; two things. You mentioned that your trade promotion per case is going to be down in this fiscal year. Would you expect it to be up next year as you match or may match what Kellogg is going to do and do you think you can hold onto that market share that you got in cereal this year?

Well, Terry, we did have this year in the second quarter, as we had that comparison to the right size, right price initiative in the previous year, we did have strong merchandising in the second quarter in that comp and strong share gains. As we move into the second half of our fiscal year, our trade spends as we predicted and forecast for you, our trade spending is moderating and will be down as you’ve just said, on a cost per case basis for the year. As we plan the next year, our plan is to continue to grow our share incrementally. That share growth will be driven by baseline strength. We think that really is the story of Big G right now, is the full price sales that we’re getting across all of our core franchises, so we’re going to focus on the baseline. Our goal is to continue to reduce our trade cost per case and I would expect that that would be our goal again in cereal next year. We will have those comparisons that you highlighted as we move from quarter-to-quarter, but we’ll be planning in the context of the whole year and in gaining incremental share over the course of the year and I’m pretty confident that we’ll be able to do that again next year.

Okay, fair enough. Just a quick one on soup and I think this kind of dove tails into Eric Katzman’s question. February seemed to be just an awful month for soup, both for you guys and Campbell and I have spoken to Campbell; I didn’t really get an explanation there. Was there anything trade wise going on in the month of February? It just looked like both, you and Campbell had a very tough month. I didn’t quite understand that.

Yes, well again, looking at it on a one-month basis Terry, I don’t know how productive that is. As we look at our soup business over the first nine months of the year and as we wrap up the season and as we look ahead to next year, we’re quite happy with our soup performance. We’ve got sales growth; we continued to gain sharing again this year, I think as you have seen a very, very competitive environment and, so I don’t think one-month doesn’t a soup season make. Overall we’re quite happy with how our soup business is unfolding for this year and I’m very happy as we start to close in on our innovation and our initiatives for next year. So, we continue to be very bullish about this business.

Okay, well I didn’t want to get too near term. It’s just that it kind of surprised me with the depth of it, but maybe it was January pantry loading by consumers. I don’t know we’ll see, but anyway thank you very much.

Okay thank you, Terry.

Our next question comes from the line of Judy Hong with Goldman Sachs. Please proceed with your question.

Thanks, good morning more.

Hi, Judy.

Just more clarity about the fourth quarter outlook, first off, just in terms of the extra week, is it still your intention to reinvest all of that extra week upside into marketing?

Judy this is Don. No, actually as we look at the fourth quarter now, we do anticipate flowing some of that profit through to the full year.

Okay and then secondly, if I take your midpoint of your full year guidance, I think it implies EPS growth in the fourth quarter of about 5% and I’m wondering, just given the strong sales momentum that you have in your business, you’ve got the margin expanding in the fourth quarter, now you’re talking about some of that the extra week flowing to the bottom line. I’m just wondering why you’re not expecting even stronger growth than that 5% number that’s implied by your guidance?

A couple of headwinds that we mentioned in the third quarter carry into the fourth quarter. In particular Forex will continue to be a headwind in the fourth quarter. We also have the majority of our restructuring costs now falling in the fourth quarter. As I said, year-to-date our restructuring costs versus last year has been down quite significantly, but we are still guiding to a number of comparable to prior year’s in that $30 million to $40 million rang, which means the majority of that is going to fall in the fourth quarter last year, where last year’s fourth quarter restructuring charge is actually quite low. So you’re going to have both the Forex and the restructuring headwinds. The underlying business, to your point continues to perform very well and we’re very bullish on the sales and the operating profit growth in the fourth quarter.

Okay and then can you just give us some broad comment about fiscal ‘10 outlook? I think that Cagney you’ve talked about underline EPS growth, sort of in line with your high single digit target, even with the currency headwind that we should expect to see. Maybe just give us some perspectives, as we look out into fiscal ‘10, some of the headwinds and the tailwinds that we should think about as it relates to meeting or exceeding that long term target.

We’ll talk about F‘10 in June more completely and we don’t want to start giving pieces of guidance today, but as we talked about at Cagney, we had committed a year ago, probably actually three years ago to an F‘10 target that we raised last year to $4.05 a share. As we look at that number, as we issue in these number, we would look to be ahead of that as well next year and the factors are going to be the underlying strength of the business, but obviously some new external factors in place, particularly around foreign exchange that will create a headwind, which had not in the previous couple years and next year as we think about Forex, it is both the translation, as well as the transaction, which we have hedged this year, which has protect us, but we’ll see some of that drag into next year as well. That’s probably the fundamental environmental shift that we’ll be seeing as we look at next year, but we’ll take you through the more complete guidance with F‘10 with our June earnings release.

Okay and just finally on Bakery and Foodservice, I think your prior guidance of this year has been kind of flat EBIT goal, is that still the case?

Flat EBIT verse prior year, yes. Again as Ken pointed out today, actually when you strip out grain merchandising plus from last year, it actually implies very strong growth in the underlying business, which we’re very pleased with.

Thank you.

Our next question comes from the line of David Palmer with UBS. Please proceed with your question.

Thanks, two quick questions, both kind of theoretical, so hopefully you could give some help here. We’re seeing some increases in promotional activity in some categories and they’re reaching irrational levels in places like frozen entrees, to pick a well publicized example. Do you see unhealthy promotion activity or discounting as a risk to more categories and is it linked perhaps to things where you can inventory the items. For instance, people start to or players start to discount to try to get that in the pantries? Secondly, there has been a lot of dialogue with investors by the food retailers, implying or directly saying that prices will need to be rolled back and that they are going to push private-label harder. I’m wondering, is collaboration dead between the top suppliers and the food retailers to the degree that it feels like it is dying and perhaps you can give some color around that? Thanks.

Hi, David, yes this is Ken. Let me address the second question first on pricing and the need for roll-backs. I can tell that, I haven’t had any major or minor smaller retail customer ask me about that. The question that I’m asked most consistently by the senior executives of our retail partners is, what is our outlook for inflation and what do we think is going to happen in the commodity environment going forward? They are very concerned about that, they appreciate that the environment is very volatile. Many of them have their own private-label businesses and so this is an important factor for them and so our collaboration and partnership with our retailers, I would say has never been stronger. They’re very concerned about the volatility of the input cost in environment when we talk about that and as I said earlier, there are some comments in the media about some customers who may think that prices should or will come down or that their private-label prices will come down, but we are not actually seeing that in any of the data. As I said, private-label prices have increased a little faster than branded prices over the course of the year and we don’t really see any evidence that they will come down and I think the reason for that is because our retail partners are probably anticipating some level of inflation next year in their input cost, even if it’s a significantly lower level, there will be some and so that’s my take-on that conversation. On the promotional side, I don’t really see in any of our categories, as you I think you called it unhealthy promotional activity emerging in cereal. I think the promotional environment is very consistent right now and as we said for our business, if anything, our promotional levels are moderating and that’s a category that’s being driven by baseline now. We saw a little bit of promotion earlier in the calendar year in yogurt, but as we move further into the year, it appears that that category is moving in a direction that it consistently has over the last two decades, which is new product innovation and brand building advertising and so I think that category will continue to be driven by fundamentals. So in our categories, we are not seeing that right now.

Thanks very much.

And our next question comes from the line of Ken Zaslow with BMO Capital Markets. Please proceed with your question.

Hey, good morning everyone.

Good morning Ken.

There’s been a lot of discussion about promotional activity in the cereal category. Can you just frame for us and give us a discussion of how General Mills magnitude versus efficiency has played out in trade spending in cereal, because it seems like that’s a big controversy out there. So, if you can just give us some color around those two; one is the size versus the efficiency of what you are doing?

Well, I’ll try Ken. I think that the general sort of merchandising program in cereal as I said has tended to be very consistent. We usually enter the year with a very solid program of events that we can merchandise around and we have a very disciplined approach on price points that we want to shoot for and I think you are all familiar with those. I mean going back several years, we were two for four and we moved that up to better mixes over the last several years. So, we enter the year with a very comprehensive plan in terms of the number of events and frequency. What we are seeing, I think in the current environment, is that our promotions are more efficient. There is a little bit more pull against the promotion and I think that’s a reflection of value seeking on the part of consumers. From our standpoint that’s a good thing, because there are a lot of fixed costs that go into these promotions. There is a cost with retail partners to set them up and to build them and execute them in-store. Often we have so called consumer overlays around these promotions to add some consumer interest and appeal and so there are fixed costs and if we can get a little bit more movements off of them; that in fact lower our cost per case for us. So, there is a little more efficiency in this environment and I think it reflects consumer value seeking, but I would say it’s nothing that we didn’t anticipate or haven’t built into our model going forward.

Ken this is Don. The only thing I would add to that is, on the consumer pull part that Ken referenced is, one of the reasons that we’re seeing better effectiveness from our merchandising is because we are running such strong baseline, which speaks to the new product strength that we’ve had and the consumer support that we’ve put behind it and we have baseline growth that has doubled the category growth and that then makes all of our merchandising more effective as well.

That’s a very good point. Whenever we have strong baselines, we basically see the merchandising programs work a little bit better.

My next question or my last question as well; I understood from the Cagney presentation that it seems like you guys were pretty comfortable with your long term growth target even in 2010. What would prevent General Mills from generating their long term growth targets for 2010? Are there some of that change since Cagney or you’re just being cautious on the call?

Well it’s a little premature to talk in detail about F ‘10, but again as I mentioned Forex has become a little bit more of a headwind and we are now flowing a little bit of the 53 week into this year. So, the base to grow from this year becomes a bit higher, which again we’re delivering over our growth model this fiscal year. So those are a couple of factors, but again the underlying business remains very strong and if you look at where our U.S. business is, if you look at our international business on a constant currency business, if you look at Bakeries and Foodservice, ex-grain merchandising, all those businesses are on track, not only to exceed our internal plans for the year, but also their longer term trajectory as well. So, we feel very good about the sound as to the underlying business.

Great, thank you.

And our next question comes from the line of Jonathan Feeney with Janney Montgomery Scott; please proceed.

Good morning. Thank you.

Hey, Jon.

Hey, Jonathan.

Just a couple questions; first, just to clarify on volumes, sort of big picture, but I know there’s some comparisons in here, but it’s striking to me that Q3 ‘08 sales at U.S. retail were 9% and that was almost all volume and Q3 ‘09 sales were 8%, and that’s almost all price. Could you highlight maybe where the sort of outliers were as far as comparisons within the U.S. retail, on the volume versus price/mix side within the U.S. retail business that sort of drove that change in sort of algorithm?

I think Jonathan; you have in your question highlighted the key factor, which is that we had unusually strong volume growth in the third quarter of last year, 8%. For the total year, fiscal ‘08, our volume growth was 3%. So that third quarter was very, very high. It was a difficult time and frankly we’re happy to have some volume growth on top of that this year. Year-to-date, in U.S. retail, through nine months, our volume growth is actually ahead of last year. I think it’s closer to 4% through nine months and last year at this point in time, we were at 3%. So that measure as we’ve said in the past, it’s kind of a lumpy measure and it moves around a little bit and I think the key factor it that it was unusually big in the third quarter of last year and it will even out as we move on through the end of the year.

So, is it safe to say going into Q4 with that easier 3% comparison, you would expect volume to accelerate off the plus 1% number?

I think we’ll have volume growth in the fourth quarter, yes.

Okay and just one other question, the detail on Bakeries and Foodservice. I remember from your Cagney presentation, restaurants are a little less than half, it looks like of your business and you’ve talked about them actually performing better than the 12% volume decline in Q3 and being more profitable. I look at some of these other venues, like K-12 and colleges and healthcare and whatever, I see a lot of places that are probably volume wise holding up better than restaurants. Do you have a negative margin mix issue currently or sort of coming in Bakeries and Foodservice? I understand focusing on the more profitable customers, but what if those more profitable customers are declining more? Do you see that as a risk and are you seeing that in the numbers right now?

Well, we are not seeing that in the numbers right now, just to clarify the split of the business. A little less than 50% is restaurant and food service; within that is the K-12 schools and the business offices, etc. We actually see quite a healthy mix in Bakeries and Foodservice, for example in our c-store business, which is about 10%, growing with our branded and products; we see it on our foodservice distributors, which get to those K-12 and hotels and other distribution points and as we grow sales there, we actually see he a positive mix in our Bakeries and Foodservice business.

But broadly speaking is it such that the business you do, take institutions broadly, is lower margin business…

Jonathan, how are you defining institutions, as schools and universities?

Yes, schools, universities, businesses, industry, military, like that sort of thing, versus say restaurants. I’m thinking discretionary versus nondiscretionary expenditures. I’m happy to be enlightened as to how you define it because I don’t really have a great idea, either.

Yes, well the schools and the universities and the healthcare institutions, the places that are serviced by foodservice distributors, that is the healthy higher margin, more stable part of our business and so that’s where we’re really moving the business overtime. I mean that’s why we’ve taken these restructuring actions that we’ve taken really over the last four or five years. Those channels, schools, universities, hospitals, we’re selling branded cereal, branded yogurt, branded snacks, which are all our high margin cost and we’re selling them through the foodservice distributor, which is the high margin distribution channel. So that’s really the positive mix play for us.

I see and the part that’s really sort of disappointing and probably disappointing versus expectations too is the sort of bakeries business that you are trying to maybe emphasize a little less than some of that other business.

That’s right.

Okay, thank you very much.

And our next question comes from the line of Alexia Howard with Sanford Bernstein.

Hello. Okay, a couple on quick ones; still coming back to the U.S. Retail segment and the promotional activity in there. First of all, you talked a lot about trade spending efficiencies kicking in. Can you tell us a little bit about what the Genesis of that was? Is it IP based? Was there some particular factor that has allowed you to get that much more efficient on the trade spending program? I guess linked to that, I’m just looking at the price increases that you got on average, across the U.S. Retail. I think it was about 7% this quarter, which it’s similar to other packaged food companies in this environment and I look at the consumer price data and I’m seeing much lower price flows to the consumer for the General Mills portfolio and U.S. Retail, generally below sort of 4.5% to 5% where price increases for many other companies, are up at sort of 8%, 9%, 10% level. Is there something going on there maybe to do with the trade promotion improvements that you’ve made that’s enabling you to drive share gains and volume growth because of that?

Let me answer the first question first and then I think we may have to come back for just some clarification on the second question, but on the trade spend and the trade efficiency side Alexia, we continuously evaluate and study all of our trade promotional offerings with all of our customers. So, we evaluate the effectiveness of different price points and how they work and their attractiveness to the consumer. We evaluate the effectiveness the effectiveness of different consumer overlays that we might associate with these promotions. We look very closely at the mix and the promotion of the proper size and all of these factors overtime allow us to continue to refine our trade spending, so that we have the most effective price points on the most effective SKUs, combined with the most effective sort of in store consumer programs and all of that over time has allowed us to pretty consistently reduce our trade spending per case. So it’s kind of an ongoing program of testing and measurement and refinement and learning and it’s really paid tremendous dividends to us going back over the last four to five years. Now, I didn’t fully understand your question on consumer pricing and maybe if you would restate it for us.

Sure. I guess it’s just quite simply, when I look at the IRI data that gives us an indication on consumer pricing, it seems as though across the portfolio, the consumer price inflation that the retailers are setting is lower year-on-year than the price realization that you are getting across the U.S. retail portfolio. Maybe you can’t answer the question, because I presume it’s to do with the choices on the retail side, of how they treat the pass through pricing to the consumer, but I wondered if there was anything within perhaps the price promotional budget that was enabling to see that.

I don’t think so Alexia. The way we look at this is in our category, so we just look at where we compete and we look at aggregate measures either across our brands and competitive brands and what we’re seeing consistently this year is that our pricing has lagged a little bit behind our major branded competitors, and it’s also lagged as I said earlier in this discussion, it’s lagged behind private-label as well. The reason for that is the same reason that’s allowed us to lag for the last several years and that is our focus on productivity. We are able to absorb some of the input cost pressures that we’ve had this year and that means that we’ve had to take a little less pricing a little later than many of our competitors, including private-label. So that’s our strategy and it’s again played out that way for us this year, albeit with levels of inflation and pricing that were higher than what we had seen in the previous five years.

Okay, great, thank you very much.

Alright, thank you.

And operator we’re up to time here, but let’s sneak in one more.

Okay. So, our final question will be coming from the line of Andrew Lazar with Barclays Capital. Please proceed with your question.

Good morning. Thanks very much.

Hi, Andrew.

Good morning Andrew.

Quick one; I guess with less incremental pricing likely as we ahead into 2010 for fiscal for you, there was still obviously some inflation, albeit not a significant as the past several years, it really does put I guess that much more owness on sort of the incremental productivity programs that you’ve got and I’m just wondering and seeing the stock, frankly, on the open; as we look out to 2010, is there anyway to help better quantify in some way what the sort of incremental amount of productivity coming that you might have left on these programs? A number of companies kind of put out different metrics, whether it’s incremental productivities, percentage of cost of goods or things like that, and the only reason I ask for that type of clarity is just obviously given the reaction in the stock this morning, I think part of this has much more to do about frankly the outlook around fiscal 2010 and some of your preliminary comments on than it does about the quarter per say?

Well, productivity and HMM activities continue to be a huge focus for us Andrew, and without going today into too much detail on metrics, I will tell you that in the U.S., we continue to have a multiyear pipeline going forward of productivity initiatives and we’ve grown the level of productivity consistently over the last several years and I’m sure we will be able to do that again in U.S. retail next year. The other thing I would say is that, remember that we didn’t start these initiatives internationally until later in the game and so that is a very significant opportunity for us as we ramp up HMM and all those productivity ideas outside the U.S. I mean we think that we have a lot to go for there. So, I think overall for the company, this continues to be a very key part of our strategy and so I’m very confident that we are going to be able to use productivity to expand margins and invest in our brands, into the foreseeable future.

Thanks very much.

Alright. Thanks everybody. There are some follow-up questions no doubt. You know where to find us. Give us a shout. I appreciate your time this morning.

Ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.