Good morning, everybody. Hi, all. It's 10 o'clock, the webcast is up and running, so we're going to get underway. For those I haven't had a chance to meet, I'm Kris Wenker, I'm the Investor Relations Officer for General Mills. And I really want to welcome you and thank you for joining us here at the Exchange, also people who are listening on the webcast. We have a very full program planned today and our remarks definitely will include forward-looking statements, which are based on management's current views and assumptions. The slide behind me is included in your materials and it cites factors that could cause future results to be different than our estimates. We'll have opportunities to take questions from attendees here at the Exchange, that will happen a couple of times in the meeting, please wait for a microphone so the folks on the webcast can hear your questions. Thanks very much for that. And I'll turn you over to Ken Powell.

Okay, well, thank you, Kris. Good morning to one and all, every single one of you. We're very delighted to have you with us for an in-depth discussion of General Mills 2014 growth plans. We will be building on a strong track record of annual growth. Over the past five years our net sales have grown at roughly a 5.5% compound rate, segment operating profits have compounded at 6% and adjusted diluted earnings per share have increased at a 9% average annual rate. Our business portfolio gives us confidence that we can keep growing at an attractive rate. In recent years we've taken important strategic actions to focus and enhance our business mix. We now compete in five global product categories where sales are growing at a healthy clip. We've got a $4 billion cereal business worldwide, that's including our half of CPW sales. We're the world's second largest yoghurt company with nearly $3 billion in net sales worldwide. We've built a large and fast growing snacks business that generates $3 billion in net sales. We've got a terrific assortment of convenient meal choices for consumers across the globe and we market one of the world's best loved ice cream brands, Super Premium or otherwise. We also hold leading brand positions in select categories here in the US markets. Our categories are on trend with consumer demand for great tasting, nutritious and convenient food all at a great value and our brands hold leading positions in these advantaged categories. We've changed the geographic mix of our business to add international markets, and particularly, emerging markets. Just five years ago barely a quarter of our total sales came from markets outside the United States. Today it's more than one-third. And when you tally up our cereal joint venture sales in markets…

Thanks, Ken, and good morning, everyone. It's a pleasure to be back in New York with you. Over the past year we've seen slow but steady improvement in the operating environment for U.S. food at home. Let me give you a quick recap of our U.S. Retail performance last year and then get into the details of our growth plans for 2014. U.S. Retail sales grew 1% last year to $10.6 billion, reflecting higher pound volume. We exited fiscal 2013 with momentum. In the fourth quarter, consumer takeaway improved sequentially in eight of our 10 largest categories. Here are the highlights for 2013. We introduced a strong line-up of new products. Items launched in the last 12 months contributed 5% of net sales in fiscal 2013. We increased average points of distribution 200 basis points. We maintained a high level of brand building support, including leading share of voice in key categories like Yogurt, grain snacks and baking products. And segment operating profit grew 4% to expand operating profit margin 60 basis points. Turning to 2014, across the food at home retail landscape, pricing and unit volume trends have stabilized. Consumers are starting to feel better too. We have a strong line-up of consumer focused product news and innovation plans including new cereal, new yogurt items and robust plans for other categories including dinner mixes, baking products and snacks. We expect input cost inflation to be manageable and HMM savings to be strong. So our plans call for low-single-digit growth with faster operating profit growth and margin expansion for the year. We are confident about our growth plans in part that because we compete in categories that are on trend and with consumer demand for great tasting foods that are nutritious, affordable and easy to prepare. In the U.S., the…

Thanks, Ian, and good morning, everyone. I'm really pleased to have the opportunity to tell you about our meals business and the strong growth plans we have in place for 2014. As part of the reorganization we announced last year our Meals division is now solely focused on our key incentive store meal items. In 2013 net sales for this business increased 2% to nearly $1.5 billion. Our three largest businesses Progresso soup, dry dinners and Old El Paso Mexican food comprised the majority of the Meals division sales and profit. Looking at our results over the last few years our performance has admittedly been a bit mixed. We've delivered strong net sales and share growth in soup, maintained share in Mexican foods and have lost share in dry dinners. We are confident we can generate growth across our meals portfolio in 2014, in part that's because demand for convenient meal offering is growing. Today consumers devote less than 30 minutes to prepare and cook the eating meal, so convenience is very important right after taste in deciding what to make the dinner. And demand for convenience is greatest amongst Millennials and Boomers. The two demographic groups projected to led US population growth over the balance of the current decade. More importantly our confidence for 2014 lies in the strong plans we have in place to drive growth in each of our meals businesses in 2014. Let me walk you through our plans in detail starting with soup. We entered this category when we acquired the Progresso brand in 2002. Over the past decade we have led growth in the ready-to-serve segment with great tasting flavors, the launch of our juice calorie foods and fantastic advertising. As a result we've added 14 points of market share reaching 40% of segments…

Good morning. In my remarks today I will provide you with a brief look at our sales organization and touch on a few of the key elements that we focused on to deliver executional excellence. Well we leveraged our sales capabilities and relationships worldwide and my comments today will focus on how we support our U.S. Retail business. We employ nearly 2000 sales professionals across the U.S. Our organizations include cross-functional teams at Poland customer headquarters, our retail organization that delivers its impact in store and at the shelf and a centralized support group that provides advantaged capabilities to our teams. We have expertise across 25 different categories and all three temperature states. And if you go into a typical grocery store, you will find about 650 of our items in distribution. We partner with more than 200 retail customers who operate well over a 100,000 stores of all shape and size across the U.S. About half of our business is with traditional groceries like Kroger, Safeway and Publix. Supercenters like Walmart and Target represent about a third of our business and other channels like Club, Drug, Dollar, Online and Natural Organic outlets represent the remaining 20%. The mission of our sales organization is to lead profitable growth both for General Mills and for our customers. We work with all of our customers big and small to provide the brands, the capabilities and the customized solutions that drive growth in their stores. As Ian mentioned earlier, we compete in a broad array of categories that are on trend with consumers today and importantly we hold number one or number two share positions in all of them. Retailers like our brands for several reasons. First of all, there are staples with many consumers with 97% of U.S. households buying at least…

…one in the back. So if you could raise your hand I'll get a mic to you for this.

Andrew, go ahead.

Thank you. Shawn showed us a slide around - in cereals specifically with velocity has been up nicely, points of distribution up nicely as well. I know that you pointed out earlier, share this past year where it was off a bit. So I'm just trying to square some of those things, what was it I guess specifically as you look back on the year, you were here last year talking about a lot of new products in yogurt, but elsewhere as well. So first off, I guess just squaring that in cereal and then was there a common theme in some of the areas where share wasn't what you wanted it to be this past year around some of the new product efforts was not enough against the core versus incrementally new items, if there was a common theme there it would be helpful. Thanks.

Thanks, Andrew. I'll hand but part of that and maybe Shawn will want to add in. Yeah, I think our biggest problem last year on cereal was really quite early in the year where our merchandising pressure in our first quarter was extraordinarily low and that had something to do with the Olympics which our competitor was tied into it had something to do with some of the smaller players in that category who had been less active in merchandising, picked up their activity and sort of that confluence of events caused our first quarter to be low. And so by the end of the year, we had cut off then all our merchandising that we wanted in cereal. But it's not as healthy to have it concentrated in those last three quarters, even two quarters. So, much better to have it even throughout the year for the efficiency of it, which is what you'll see this year. But I'd say that was our biggest issue in cereal last year early on in the year. Shawn, I don't know, if there's anything you wanted to add to that part?

The only thing I'd add is that our innovation strengthened throughout the year as well. The Cheerios, Honey Nut Medley was received really well by customers and that helped build back some of the innovation that we wanted on the category and that in combination with the merchandising strengthened the back half and kind of left us in a much better position by the end of the year.

And on your question as it relates to innovation that may not have lived up to expectation you know you sort of have that every year new products are like that. The ones Juliana touched on was recipe starters which we had thought it did all right but we thought would be quite a bit larger, but what we found is the concept took more explanation and so she showed the packaging change in the pivot and we are marketing that in the different way and we think we still have very high hopes for that but we've learned that it needed to be marketed and packaged a little bit differently. And some of our items in the freezer case, ultimately the freezer case itself had very slow traffic last year and I'd say those items underperformed relative to our expectations. On the plus side our snack items did terrific and in many cases greatly exceeded our expectations as I mentioned in my remarks Yoplait we had very high hopes for Yoplait Greek 100 but that too has greatly exceeded our expectations, our new cereal items that were launched in January are doing quite well. So it's always a mixed bag but that would be how I would highlight some of the ones that were less than we were expecting.

The only other thing I would add to that Andrew and you asked you know our assessment in terms of common themes going over the course of the year just to point out something that we've discussed many times we did a year ago at this point in time our merchandise price points were really not where we needed them to be across a number of a categories and so we entered and unit volumes as you all know not only for our business but for many players in the category were low. And so as we addressed the price value issues over the course of the year we saw across our categories baseline strengthened sequentially and unit volume strengthened sequentially. So as we stand here before you today we feel much better about the value equation that we have across all of our core brands and we feel very much better about the base line that we are seeing on our businesses as we go into F14 so I think that was another important sort of underlying theme.

Raise your hands if you are looking for this here. Alexia Howard – Sanford Bernstein: Can I ask about the yoghurt category, I know we've spent a lot of time focusing on that this time last year, I think the plan in fiscal '13 was to see sales growth in that category and I think you fell a little short at that. Given the slowdown in innovation they were a boatload of new products last year, what do you see is the outlook there in fiscal '14? And then just secondly touching, we talked about promotional activity and how displays are up across the portfolio, do you anticipate continued increase in promotional activity as we go forward. Thank you.

So Ian, I think –

Sorry, I had a hard time hearing it, so I'm hoping I'm answering what you asked. First question was on yoghurt and our outlook for the next year. And the category now is growing really robustly and our projection for next year is certainly a return to category, I shouldn't say category but for sales growth. And we'll have to see what that means in terms of share. It's been hard to peg what the yoghurt category was exactly going to grow. But we think we're going to, we're definitely going to have a positive sales growth here. The elements are now in place between our core is solidifying. We have a very strong player in the Greek segment now and we have a great new product coming to Greek and we're getting a new capacity which has constrained us to some degree on the Greek which will allow us to go to different sizes and formats. So it will be an interesting dynamic category without a doubt. I think the category is going to grow well and I think we're going to grow well on the yoghurt side. Your other question was on our forecast for the promotional environment. Our outlook which was in our remarks and Don I think touches on it a little bit later as well is that next year on the input side is inflationary. And you know not too different actually than this year. It's a manageable level of inflation but it is inflation and I generally put a pretty good discipline on promotional activity. The ones, the years that are – that have been proven to be trickier is actually the deflationary years. But we don't foresee that and we have a pretty good line of sight on a good chunk of the year and so my projection is going to be very competitive as it always is but I wouldn't characterize it as too different than the last few years.

So I would just add to that. Alexia, I think you commented on or made a comment on the relative level of the innovation in Yogurt this year versus last year, we're quite enthusiastic about the innovation that we have going in to the category this year. You know, first of all, we only started advertising Yoplait Greek 100 I think in October. So we look at that product, it's very early in the trial phase and well ahead of what we thought it would do and so the fact that and our customers now are saying, guys, this thing is turning. We need multi-packs to satisfy the heavy using customers and so actually that's a very promising sign for us. So we're going to ship those which, you know, will help us to continue to expand shelf space on that product and we know that light yogurt from our experience in the category is a very compelling benefit. So we think there is an opportunity to continue to build that and then we just love having a blended full calorie offering, we think consumers will respond very well to that. We think it has a very different and very positive taste profile in comparison to other products in the category. So we think that that's going to be a winner. Our customers are very happy and then we continue to expand Liberté, which is a, we're doing -- marketing that in a different way to millennials and digitally but it's turning well, it's expanding. We're going to have more distribution on that. So we actually feel we've got I think more arrows in the quiver this year as we continue to proliferate innovation primarily in the Greek segment.

I have a question for you, a follow up on yogurt if I could as well. In this past year, you had very good unit turns on your base business. You did lose some distribution as well. So that, so I'm just curious if you look at 2014 and the next year or so, do you expect that your core yogurt business would have stabilized it's distribution in the category, maybe can even grow a little bit because you had such good turns in the existing business? And then my other related question would be, do you need to gain share in Greek this year to grow your sales in yogurt. Is that an important component of your yogurt growth expectations?

Yeah, you're quite right, our unit turns on our core yogurt have been quite strong and yet that was on a base of distribution losses as you can just imagine how significant the [fee] [ph] change has been in the yogurt category as Greek is now well over 40% of the category dollar wise. In fact, there's been a lot of shelf shift. And the most important thing to get going is to get that turns number positive, and high single digit positive, and we've been doing that now for quite a long time and eventually that's what really - I would characterize next year as probably stabilizing our core cup distributions. I think the action is still going to be pretty heavily in the Greek segment and indeed we do expect to gain as we did this year share in the Greek segment. We obviously have less of a base than the market leader in that segment. So there is share to be gained and that is an important but not the only part of our plan.

Back there?

Ian, hi, just wanted to come back to the cereal category again and the issue of demographics. So you have a broad range of innovation out this year including some items like gluten-free and granola offerings, that I think do seem directly geared toward adults but given what seems to be some ongoing headwinds for the category among the adult demographic, specifically do you think you or your competitors, the category in totality is doing enough to try and revitalize consumption among older cereal consumers?

Yes. I actually see there that the destiny of both the category and adult consumption is entirely within the players in the category's hand. I don't think there is any underlying issue with adult consumption of cereal if we innovate right, bring meaningful benefit and support the brand. Last year had an atypical decline, pretty significant one in total support for the cereal category and it's one of the most supported dry food categories in the store. So we have to make sure that all of us in the industry are increasing our support behind the category in innovating and I think the innovation lineup not just for us but across the category is stronger this year than last year. And there is more than enough benefits. It's ironic that one of our biggest growth drivers is - this past year was on Lucky Charms advertising to adults. So, I just don't buy into that adults still want to eat Cinnamon toasts or Lucky Charms or adult cereals, it's really are we doing things that are exciting and meaningful brand by brand. And when we do that well we do, the cereal category has seen this for a 100 years and it will respond to good innovation and good marketing support.

I've got the next one over here.

Thank you. Shawn you mentioned trade cost per case was up, what looks like about 4% the last fiscal year, it seems like that increase in trade spending has driven some pretty nice improvement in what have been some weaker volume as Ken alluded to, are we still in that place where the higher than normal or this higher than normal responsiveness to trade spending? And how are competitors across the portfolio responding to sharpening up those merchandise price point as Ken alluded to?

First of all I think, in many ways the increase in trade cost per case for us was heavily getting our yogurt business, our core yogurt business back to the spot we felt like it needed to get to and in that category, in yogurt, we have really seen a response to that; for the most part Greek has traded above a dollar and regular yogurts have been pretty stable with the exception of us getting our product back into the right spot. Overall, we're in, like I said we're in 25 categories. If you ask me what is that merchandising environment looked like, either proactively or reactively I would say it looks pretty stable as Ian indicated before. We are seeing an increase in the number of displays that we see in store. And as I mentioned through our retail organization, we've been able to outperform in that area. But overall the kind of the price pressure piece of it seems very stable.

I'm going to sneak one last one in here and then we'll switch.

Hi, question for Juliana. Just in the Dry meals category, I guess you've seen some more competition or new competition in that arena over the last year or so; Velveeta has kind of encroached on what was traditionally I guess Helper's sort of domain, you're introducing a Mac & Cheese, and my understanding is, well I guess my question is just how the competitive, how competitive in the nature of the competition in that dry meal segment now, I was under the understanding the Kraft has responded in Mac & Cheese with some sharper price points to try to sort of address the new competitive threats, so if you could just talk about the dynamics in that category and how competitive it actually has been?

Sure, well great question, basically what we have seen is our response into Mac & Cheese, but we know that, what's been critical is that we drive innovation to drive total growth within the category. And I think Kraft did a good job with their introduction to the add to make segment with the Velveeta offering and we are responding with the innovation that we are bringing out this year and we know that with us driving gross with innovation within the segment that we are the dominant leader within that we can drive different requests within that segment. So there's been no question that there has been competitive response to our interim Mac & Cheese and but as I said, I think innovation is what's going to fundamentally drive growth within the category and that's where we're really focused.

So please join me and thanking this group and we're going to switch to group number two here.

The statements in - you can kick this after so you want me to just jump --

No we're just going to jump right in.

Right now?

Oh, everybody is just - a moment (inaudible).

Okay, let me get (inaudible).

(Inaudible) so let me join you at some point (inaudible) Q&A okay. All right, we're going to start up again, so Dave?

You're ready?

Go crazy.

Yeah, well good morning everyone, it's a pleasure to be here with you today. I am going to kick off the second part of our meeting with an update on our Bakeries and Food Service Business segment. Let me start with the reminder of how we've transformed this business over the past five years. We've sold or exited lower margin product lines, streamlined our supply chain and implemented a direct sales force. We've also focused our resources on a highest margin product in the most resilience channels. As a result of these efforts we significantly improved the profitability of this business. Since 2008 segment operating profit is increased at a 14% compound growth rate and our profit margin is expanded nearly 600 basis point, this is top tier industry performance. Our momentum continued in 2013 net sales decline modestly driven by lower pound volume but operating profit increased by 10% driven by favorable product mix, lower input cost and grain merchandizing earnings. Our operating profit margin exceeded 16% for the year. We're pleased with our strong performance last year and here are few of the highlights. Sales for our snack items increase to the mid single digit rate lead by strong new product performance and distribution gains in the convenience channel. We expanded distribution of our bulk yogurt business into to new products and new channels driving high single digit growth in net sales and our net sales of our frozen breakfast portfolio that's lead by our lineup of Pillsbury branded, Waffles, French Toast and pancakes grew at a the strong double digit rate. Our business is focused on the product lines and away from home channels that offer the best opportunities for top line and bottom line growth. In fact we recently changed the name our organization to convenient…

Thanks, Dave and good morning to everyone. I'm pleased to be here to review the growth opportunities we see for our international businesses. We compete in great categories around the world and we are bringing strong level of innovation to our categories which will contribute to sales growth and margin expansion for our international segment in fiscal 2014. In the past two years we have made significant acquisitions most notably, Yoplait Int'l in fiscal 2012 and Yoki in 2013 that have accelerated our overall sales growth. But our base business has been growing too, excluding acquisitions our net sales have increased at a high single digit compound rate over the past six years. And if you include our proportionate share of revenue from joint ventures our total international sales reached $6.5 million in 2013. We're focusing on five global growth platforms that Ken mentioned earlier. These categories represent approximately 75% of our international sales if you include our joint ventures. These categories are on trend with consumer demand in both developed and in emerging markets. Let me describe how we're building these categories around the world and I will start with cereal. Cereal Partners Worldwide, our joint venture with Nestle is in its 23rd year. This business generates more than $2 billion in annual sales. CPW operates in more than 130 countries and holds a 22% value share in the markets in which they compete. Developed markets still represents a majority of CPW sales but emerging markets now account for 40% of the total. In 2013 CPW sales in emerging markets grew 11% and CPW holds a leading market positions in many of these fast growing markets from Indonesia to Russia to Turkey. This isn't just a percentage growth story. Many of these emerging cereal markets are generating the largest…

Thank you, Chris, and hello, everybody. So you heard a great deal this morning about our plans for increasing General Mills' sales and operating profits in 2014. We also reaffirm our goal of extending margin this year. Let me say a bit more about the efforts supporting that objective. Without a doubt the single biggest challenge in food companies' profit targets in recent years is the input cost inflation and volatility. As the slide behind me shows, our input cost inflation has average between 4% and 5% in recent years, but that's been with tremendous volatility around that longer term average. And that's made for some uneven performance across the food industry over that same time period. Our response to these rising costs and volatility is been HMM, we worked on business mix and we've taken some pricing as part of our efforts to protect margins. But the primary focus of our HMM efforts has been to identify non-value adding cost in our manufacturing processes and other activities across the company. Then we've eliminated these cost and used the savings to offset higher input cost and to reinvest in advertising, R&D and other activities to drive sales growth and keep the virtuous cycle going. We're confident we can keep HMM savings flowing for years to come, as approach isn't based on one time cost cuts, didn't come from closing plants in eliminating jobs, our approach is innovation process, fueled by our great people and their ingenuity. We set a $4 billion target cumulative target for HMM savings this decade across our worldwide supply chain. And I am happy to report that we're tracking solidly on pace for this target. Cumulative savings from 2010 to 2013 sold roughly $1.4 billion and estimate for this year HMM savings represents a record annual…

Okay. I'll just be, I'll be very brief and make a few closing comments on the growth plans that we've established which are very for 2014, which are very consistent with our long term model and I think you're all familiar with our model. It calls for low single digit growth in net sales, mid single-digit growth in operating profit and high single-digit growth in adjusted diluted earnings per share. We expect this earnings growth to translate into high-single-digit price appreciation for General Mills stock and this price appreciation coupled with an attractive dividend yield should result in double-digit returns to our shareholders over time. As we've noted many times this model doesn't reflect the absolute best we can do in any given year. Instead it outlines the kind of healthy growth we expect to deliver consistently for shareholders year end and year out. We reinforced this growth model with our compensation system. Annual incentive pay at General Mills is driven by a corporate rating for the year. That rating is determined by our performance against these four key metrics equally weighted. We measure our results against our own plan targets and against the performance of our peer group of large cap consumer staples companies. We believe these four metrics are the key drivers of value creation and General Mills people do well in years when all shareholders do well. The last five years have been a period of healthy growth and value creation for General Mills. Over this period the average annual return to holders of GIS has been 13% more than double the overall market's return. All of us at General Mills are working together to extend this winning streak into the future. Let me wrap up our comments to you this morning. At General Mills we pursued growth plans and strategic actions in recent years that have made us a bigger company with a stronger, more focused portfolio built for healthy growth in the years ahead. In 2014, we plan to generate growth across our business fueled by strong levels of product and marketing innovation. We have a robust plan of HMM initiatives that will help us protect and grow margins for our businesses. So we see a good year ahead in 2014 and our prospects for healthy growth over the longer term are excellent. So with that, we will open up again for additional questions from you and Kris I think you are going to do the navigating with the microphone.

I am.

A question for Ken. I think it was a few years ago that you established a fiscal '15 EPS goal of $3.38 and you know I think the company is tracking a little bit behind that maybe a little bit ahead and other measures. I just wanted to know how seriously does management take that goal, is it at all involved in your executive compensation or not and is it possible the next couple of years that if performance starts to improve that you might be able to catch up to it? Thanks.

You've kind of asked and answered the question away. We are very committed to the goal. You are right we are ahead of it on our top line measure as a result of some of the acquisitions that we've made so we are well ahead on top line and on margin, we are a little behind on EPS. The way we look at it and we are still committed to that goal. We've got a couple of years to go to still get there and so we would very, very much like to do that. Executive comp really is tied to the grid that you saw you know that annual grid which is very closely benchmarked to a set of I think Don is it 20 peer companies. And if you look at, if you ever looked at our disclosures in the proxy, our compensation moves very closely with the performance of the company over time. This is very much a pay for performance company, it's almost entirely externally benchmarked to what really constitutes top tier in any given year. And as a result you know the ratings vary quite significantly year to year as they should. And so we think that that is well calibrated and have had many positive comments externally on the transparency of that approach and also the variability of the approach from year-to-year which I think is what you really need to see to be convinced that it's truly pay for performance.

I'll just add maybe two points there, I think Ken if the operating lines well in terms of sales and operating profit, EPS has been dragged down by pension expense which has been driven down by lower interest rates that we've seen in the marketplace since we set that target. So to get I would say it get all the way back to the 3.38 target would require some normalization of those rates and the resulting benefit on our pension expense. But if you strip that out, it tends that we are very – still very committed to the underlying target. The other thing I would reference is our cash flow per share. We thought about EPS, earnings per share but cash flow per share which I showed on one of the charts has risen dramatically faster than earnings. And if you think about value creation, you know, that's something I would actually take a look at. If you look at our cash flow per share back in 2010, we set the target and grew our earnings rate, would be something in the high $2 per share for operating cash flow per share and our results last year actually close to $3.50. So while EPS because of the accounting of our pension expense may not get to the 3.38, our cash flow per share is dramatically ahead of whatever expectation I think it would have been had held internally or externally in 2010.

Dave, question for you in terms of the USDA's (inaudible) push international school program. How do you see that evolving and how does Mills participate, given a lot of the innovation has been around low calorie versus kids varieties. I think, Chris, that is the follow up, in terms of China. Wanchai Ferry, Häagen-Dazs good local brands are growing well, don't hear a lot about yogurt and we've seen the non-launch of joint venture, the category is growing, focus on premium, (inaudible) about the buying efficiencies, nice premium yogurt. What happens in more of a push in yogurt in China?

Let me jump in on the yogurt question, the Greek Yogurt question and K-12 as well. I think that store is still being written because I think they are right now still playing with the idea. There is a lot of folks in the Senate that are pushing that angle. Here is what I think you will see moving forward. I think yogurt will continue to be a very important piece of the diet for K-12 schools and the question will be around cost because we all know how strapped K-12 programs are. And if you look at the cost, then the angle they are pushing is protein. So you are trying to compare it to a chicken paddy or something. It's actually much more expensive Greek Yogurt no matter how you cut it than the chicken paddy, than peanut butter and a lot of other options. So it's going to be interesting to see how they go about it and now they are looking at pushing it under commodity program, which is kind of an odd deal because usually that's something that is relegated to more commodity items, not branded items. So we're still waiting on that one. We're poised if they do make a move. We think we're well positioned because we're actually drafting up at Ian's team success and some of their new products and right now we're the yogurt leader in K-12, pretty dominant leader. So we take down seriously but we will see how that plays out.

And in terms of China, you are right to point out, we've been very focused on our frozen foods business and our ice cream business and why we've been focused on that is because we see such tremendous opportunity there. But remember we're still only in 50 cities with Häagen-Dazs and we're in 100 cities with Wanchai Ferry and we are over 200 cities with our snacks business. So there is a lot of inherent growth, but you are right to point out that yogurt is a big category in China, we know that and it is growing very nicely, we know that. And two years ago when we purchased Yoplait, we did it with the notion of expanding it more around the world. So number two global yogurt business, then Olds got about a 20 shares, the Yoplait mix with the 7. There is a lot of room between seven and 20 and by the way, seven and 20 ends up with 27. So there is a lot of room for the multinationals to grow share around the world. China is a market we had looked at. We're looking at it aggressively over the last year and a half, you know first six months we are getting. I just have nothing to report right now but it is a very attractive market.

Don, a question for you on cash. I think you highlighted the strength of your cash flow which is indeed quite impressive last year. A good chunk of that came from working capital inflow. Can you help us understand what the drivers for that working capital inflow and how we should think of that cash flow impact to working capital this year and beyond?

Sure, working capital has been a contributor for the last few years. We expect to continue to contribute in the near term. Two things that have really driven it. One is inventories. You know part of HMM and carrying apart a process to seeing what wasted is not on the cost side, it's also have been how much inventory you have to carry, your production capabilities. So we've seen the abilities inventory out of system by better understanding the processes of where we produce, where we ship our internal warehouse, and where we ship to customers' warehouses and as a result we all take our inventory levels down, the unit levels down. That's one, the other and more recent one has been in our accounts payable, we've been successful in extending terms with our vendors, and we've extended our terms to the point where I think, this past year we had about a $200 million of benefit in our accounts payable from extending the terms with our suppliers and that's an ongoing effort, because we're still only a minority the way into our entire supplier base. So that still has room to grow again and I think the inventory piece, still has some opportunities we continue to mine that through our HMM tools.

Great thank, you. Two questions the first one is going to go on CPW, so you laid out, Chris, some nice growth plans, but when we see the guidance for fiscal '14, I think that the joint venture line is indicating just comparable earnings growth versus the earlier. So maybe can you explain perhaps why CPW isn't going to be stronger in terms of earnings growth within that line, perhaps it has something to do with the other joint venture you have, your Japanese joint venture, I don't know, but maybe there is an explanation there? And then the second question would go to Don, and just relates to Yoplait Canada and Yoki, you talked about the 80 basis points of margin impact that those businesses had, how significant is the margin improvement story for those operations in 2014 and beyond can you dimensionalize what that opportunity is for us?

I'll let Chris answer the JV, question, first just one thing to clarify our guidance for the joint venture income, it's actually up high single-digits, but then we have ForEx offsetting that so the comparables this year is ForEx driven it's not operating driven. Operating earnings are quite strongly next year, on a local currency basis, we driven through very step by CPW, so basically... Chris O’Leary: Yeah. So CPW, thanks for the clarification on that, how you guys are seeing the earnings number, the core operating business is growing, it's doing well, we would like to see a growth faster in western Europe, but it is growing in these two key markets, France, and the UK. We're actually gaining share but the category there is quite depressed and that still 60% of the total on the emerging market side as I mentioned in my remarks this growing double-digit and we are very pleased with that. So it's a balance of that and the other joint venture Häagen-Dazs Japan, coming off a superb 2013, we are just entering the key summer months there. But we anticipated and having another solid year not at the record, [you rip it] Europe at high single-digit that's not to happen every year, I mean we wish it would, but [we are not in Japan], we're here. But I think we will have solid operating performance there, so it is this foreign exchange thing that's dampening the total (inaudible), but thank you.

As far as the gross margin in fact of Yoplait Canada and Yoki and it was the reason that we saw the decrease in our gross margin this year based business essentially flat. We will see that, obviously we will see gross margin total spend next year, Yoplait Canada and Yoki will be contributed to that couple of reasons, one is there are some kind of year 1 or transition costs embedded that number for example, the cost we had with our former licensee and our co-packer in Canada that hit us an (inaudible) will not obviously reappear in F14, and as Chris alluded to we're going to implement our HMM practices in both of those business and we will start seeing benefits from that next year as well. So they will be contributed to the margin expansion in ‘14.

(inaudible) have you got it?

Yes. Good morning I have a two part question on Brazil, if I may, that the starts one for Chris. Chris, you sounded rather optimistic on Brazil despite the fact that it looks like food inflation is running at twice the rates from last year that, and that we may have a second year of well below trend line in GDP growth in the country, so is your optimism is predicated on category growth is it on gaining market share, is it new product introductions? Chris O’Leary: Yeah. So thanks for that and yes, I would say all of the above. We are seeing, we are not seeing food categories, we're watching obviously the same numbers you are in terms of total GDP et cetera, but the food categories, the once we are competing and we're not seeing dramatic slowdown, we're seeing mid single-digit growth rates and we're able them to grow frankly double-digit on top of that. So we're seeing that within that even though we bought (inaudible) food business there and the big food company, we are under developed in the North East part of Brazil you know as I mentioned our distribution on the supply strength in southern we have taken that up north, so we're actually, we've seen an acceleration of growth in first nine months and I can tell you we're off to a great start because that Festa Junina big promotion season, we are starting to see early returns on that and we are able to drive increased display coverage which is accelerated volume. Innovation is up and then remember we've got this holistic margin management, so I feel good about the top line, I feel good about the bottom line and I am watching the macro environment, we are not seeing if the past food growth as we sit here today.

And then my second part of the question is actually for Don, Don you reiterated again that's for fiscal 14 M&A is not going to be a part of your algorithm, yet with the Bovespa down almost 26% year-to-date, I would imagine that valuations in your sector also coming down in brazil, would there be a point in time, where you say look the valuations become so attractive and we remain optimistic on the potential for the country, that you actually might start looking again that opportunities if there are any in that country?

Fair question, I would say two responses to it. One is it, we just bought a big business less than a year ago, as Chris has talked about the we're bringing in -- up our practices and our operating principals to bear to improve its performance and we're building on what was already a very strong base, so our focus is in brazil right now is very much by integration and [getting] down the business. And the other on the currencies at end of the day if you business in Brazil if the real is 26% lower you may make the purchase price lower but also makes the earnings and the cash you generate lower in dollar terms. So we don't necessarily try to time the market with currency standpoint when we get in.

(Inaudible) back here, do you have something to ask?

Did you say that the HMM will actually fully offset the cost inflation is here and then second have you seen any returns on HMM plateau in any regions around the world, just to trying to get some color on that?

Yeah, what we said is we're going to expand margins this year and we have about 3% inflation and we think about HMM is the productivity is the mix management, if pricing in years where we needed or where we have certainly – product benefits, we can bring forward and get pricing on. This year as we look at the business it's going to be primarily a volume driven topline year, we will be little bit of mix plus and certainly we'll see some of that of that in our margins I think in Dave's business probably most notably as we he discussed, so our product mix will play a beneficial role as well our ongoing productivity. In terms of that ongoing productivity as I mentioned we see another record year in 2014 and we treat that it is an innovation process and we treat it just like our new product innovation process, and what I mean by that is, we look at each of the businesses continue to develop multiyear our pipelines of ideas, that are going to help drive margins and we review it, just like we do on new product pipeline. And so as a result of that we do have a pretty good understanding, I want to say in the near term in next couple of years, so how that were unfold, and that's what gives us confident that only in what we'll be able to generate in 2014 but also to reiterate our decade long goal of driving $4 billion in supply chain savings.

So we don't just like any innovation process with the right tools and the right people and their creativity, there's still a lot to go further, so I think what I would add to that or the only thing I would add to that is in terms of the orchards, so we can look for HMM, there is lot of course there is what we can do within our on four walls and we talked about Don commented on and Chris commented on some initiatives within our production sites and also our administrative focus internally on HMM, so we can also push upward into our supply chain is over $10 billion of year of stuff, that we're buying in around the world and there is a best as the huge opportunity for us to partner with our many suppliers to figure out where the waste is in their supply chain, and so we do that and there is obviously a big place for us to look for, and to look from margin opportunities. We also and Shawn commented a little bit on the search that we have with our retail partners and to figure out ways that we can take out cost that between our joint supply chain and logistic supply chain as we're moving products from our warehouses to their store shelf, there's is a lot of cost there. And so, we have developed capability to be able to really look in detail where the cost is added there, where value is created and not created and we're looking to take that out there as well to the benefit of both of us. So, there are a lot of places to look. And we're sort of mapping out, we're looking at all times have a three year sort of time flow and as Don said it's pretty visible. And so that's why we're so confident in regularly giving these numbers and with Chris's operation so much larger, there is a lot to go for internationally. So we feel pretty good about the HMM Prognosis.

So, let me jump in here and do just a little bit of housekeeping we're at the end of our web cast window. So we're going to say stay well to people who were listening to the meeting. Thank you very much for that. Then I'm going to give you a little bit of how lunch is going to work. So first, so join me in thanking group number two here. So let me say I appreciate the fact that some of you may not be able to stay for lunch, we hope you can, but if you can't, don't forget to take a goody bag on your way out the door