Ladies and gentlemen, and thank you for standing by. Welcome to the General Mills Q4 2014 Earnings 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) As a reminder, this conference is being recorded Wednesday, June 25, 2014. I would now like to turn the conference over to Kris Wenker, Senior Vice President, Investor Relations. Please go ahead.

Thank you, operator. Hello, everyone. I’m here with Ken Powell, our Chairman and CEO; and Don Mulligan, our CFO, and I’ll turn the microphone over to them in just a minute. First, I got to cover my usual housekeeping items. Our press release was issued over the wire services earlier this morning. It’s also posted on our Web site, if you need a copy. You can also find slides on our Web site that supplement our remarks this morning and our remarks will include forward-looking statements that are based on management’s current views and assumption. The second slide in the presentation lists factors that could cause our future results to be different than our current estimates. And with that, I’ll turn the call over to Don.

In the fourth quarter, promotional spending in developed markets was less effective than we planned and input cost inflation was a bit above our forecast. Net sales and adjusted gross margin fell short of our targets. Our fourth quarter results are summarized on Slide 5. Net sales totaled $4.3 billion, down 3% versus last year. On a constant-currency basis, net sales were down 1%. Adjusted segment operating profit, which excludes a charge associated with Venezuelan currency devaluation, totaled $733 million essentially even with year ago results. Net earnings and diluted earnings per share were both up double-digits as reported. As we indicated on the third quarter call a significantly lower tax rate and lower shares outstanding were strong contributors to EPS growth in the final quarter. Our reported results also include a $0.09 per share charge for the Venezuelan currency devaluation, a $0.06 per share gain on the sale of several Idaho grain elevators and a $0.01 gain for mark-to-market valuation of certain commodity positions. Adjusted diluted EPS which excludes these and certain other items affecting comparability, increased 24% to $0.67 per share. Slide 6, use of the components of our fourth quarter net sales growth. Foreign exchange reduced sales growth by two points. Pound volume was 2% below last year levels. And sales mix and net price realization added one point to sales growth. Slide 7, shows fourth quarter net sales results by segment. For U.S. Retail, net sales declined 1% overall. Pound volume for U.S. Retail grew by 1%. This was offset by negative price and mix. International segment net sales declined 7% as reported and 2% on a constant currency basis. Pound volume declined 6% from last year’s levels, which included one extra month of results for Europe and Australia. Price and mix added 4 points to…

Okay. Well, thank you, Don and good morning to one and all. As we move into fiscal 2015, our number one priority is to accelerate top line growth. We’ll do that by sharpening our consumer first mindset with particular focus on four growing consumer groups: the growing middle class in emerging markets, U.S. multicultural families, Millennials and consumers over age 55. With these growing consumer groups and our broad portfolio there are plenty of growth opportunities and our plan is to go out and get them. In U.S. Retail we expect mid single-digit growth in net sales for 2015, including the benefit from the 53rd week. We expect segment operating profit will grow roughly in line with sales, with benefits coming from top line growth, HMM and new cost reduction efforts, partially offset by investments in product innovation and advertising. We’ve made several leadership changes in this business as we start the New Year. Jeff Harmening became Chief Operating Officer for U.S. Retail as of May 1. David Clark now leads the Yoplait division, changing places with Becky O’Grady who now is in charge of our international Häagen-Dazs Business Unit. Jon Nudi has moved from our U.S. Snacks division to run our Europe business, prompting some additional moves within our U.S. divisions. You’ll notice some familiar faces in new jobs. The new face is Liz Nordlie who is promoted to President of Small Planet Foods. I have great confidence in this team. They’ve each established a lengthy resume of results across a wide variety of General Mills’ businesses and I’m enthusiastic about the fresh thinking they are already bringing to the businesses. So at the risk of stealing a bit of thunder from Jeff’s presentation at our Investor Day in a couple of weeks. Let me share his team’s priorities…

Thank you. (Operator Instructions) And our first question comes from the line of Eric Katzman with Deutsche Bank. Please go ahead. Eric Katzman – Deutsche Bank Securities, Inc.: Hi, good morning, everybody.

Hi, Eric. Eric Katzman – Deutsche Bank Securities, Inc.: Two questions, I guess. Ken, you clearly have stated with all the details on the new products that top line is the focus. It looks like promotional spending just for pretty much everybody, including yourself, has not been as effective. So could you kind of talk a little bit about the comment that like media spending is going to be up, I think you said greater than sales? Kind of how does promo fit into that? And then I have a follow-up on the cost savings restructuring effort.

Okay. Well, good morning, Eric and thanks for the questions. Let me make a few comments. We continue to be very focused, as you point out, on innovation, new products, renovation of core brands and of course the advertising that’s necessary to really communicate those ideas to consumer and of course when we get that combination right that’s when we see top line growth, clear benefits coupled with very compelling advertising. So that is core to our plan and continues to be core and I described I think a number of instances of how we’ll play that out. On the merchandising side of your question, I’d make a couple of points about sort of what we saw in the fourth quarter and our focus going forward. First of all, while we did not see the efficiency that we’d hope for I just want to underscore we’ve seen relatively stable merchandising price points. So it’s not a question of that price point erosion or more aggressive levels of promotion. It really for us related to execution. We just see more and more of the players interested in getting merchandising. There are limited number of places in the store to get that high quality that we want, which is really good placement on end-aisle displays coupled with the feature support that we know drives efficient merchandising. So as we look at those metrics and variables, particularly in the second half and fourth quarter of year, we saw some slippage there. So we look at it as why we are quite disappointed, we kind to analyze and think our way through these things. We think it’s an executional issue. We just have to make sure that we’ve got our customers focused on the right big brands and executing in the right way with high quality display support in store and the right level of communication. So we’re going to – and recognize it’s more competitive, focus on execution. We’ve got very good sales capability and that’s sort of how we’ll approach that as we go into 2015. Does that get at it for you, Eric? Eric Katzman – Deutsche Bank Securities, Inc.: Yes. That’s helpful. Thank you. And then, I guess on the review on the cost side of things, obviously, kind of similar, everybody is looking at what is the right cost structure, capacity utilization. I guess it’s early days, but it just seems that $40 million relative to your EBIT, which is kind of approaching $3 billion, is kind of relatively modest. Should we think about this as being a much bigger kind of program or is this really kind of just adjusting some utilization rates in select businesses?

So, Eric, I mean, let me make a comment and then I think Don wants to jump in. I mean you should think of that number as a partial year number and I think as we’ve noted we’ll expect that to grow in out years. Beyond that in terms of more detail on how we’re approaching this and what we’re thinking, we don’t have those to share with you today and so we’ll come back at those later, but I think it would be correct to say that’s a partial year that we’re capturing there and we expect that to increase going forward.

Yes, Eric. What I’d add is as you’re well aware we have been under HMM discipline for close to a decade now. That has allowed us to continue to drive efficiencies in both our supply chain as well as our overheads, which has avoided the need to take a lot of large scale restructuring actions. That said, on a very target basis we do think we see some opportunities. To Ken’s point, we expect to be back to you in 90 days or so with more specifics on portions of it. It will play out beginning this year. Think about those savings falling more in the back half and then they will expand in F16 and we’ll give you a line of sight on that when we’re revealing out more specifics. Eric Katzman – Deutsche Bank Securities, Inc.: Okay. I’ll pass on. Thank you.

Our next question comes from the line of David Palmer with RBC Capital Markets. Please go ahead.

Hi, David. David Palmer – RBC Capital Markets LLC: Good morning. U.S. Retail has been at the center of the shortfall in the last few years versus your high single-digit targets. It seems to be key to the turn in your fiscal 2015 guidance in addition to the impact from cost reductions and the extra week. Assuming that is fair, what areas of U.S. Retail do you expect to improve the most into the next year and why would those be the areas that you expect to improve? Thanks.

David, thank you for the question. There are three focused areas in U.S. Retail. One area focuses to continue really and accelerate our very strong momentum in snacks. We’ve had great success there. We have a very strong innovation pipeline. You’ll see more of that innovation in the first half. I will tell you there is more good innovation coming in the second half. So first things first is to keep the momentum going in a very, very successful part of our portfolio. The next two priorities Yoplait yogurt and cereal. Let me talk about each of those a little bit. In the yogurt category, I would say that the dynamics of that category are shifting in our favor right now. While Greek yogurt is obviously a very big part of the category now, it’s been stable at 46%, 47% of the category now for 6 months or 7 months. And that means a couple of things, I mean first of all we have terrific Greek offering now. We have a full slate of Greek products in many styles and formats. We introduced a number in the second half of last year. We are introducing 20 more in the first half of this year. And we are seeing – and these are very, very good products, consumers like them. We are seeing our share expand, and so we’re finally getting real traction in that large Greek segment. On the other hand, the fact that the growth of the Greek segment has stabilized, it really means that there is room for these other segments, I think to get traction now. And so, we are clearly seeing that in our core cup business on these Yoplait brands. We saw Yoplait Original grow last year. We’re seeing that momentum continue behind reformulation, and…

Our next question comes from the line of Andrew Lazar with Barclays. Please go ahead. Andrew Lazar – Barclays Capital, Inc.: Good morning, everyone.

Hi, Andrew.

Andrew. Andrew Lazar – Barclays Capital, Inc.: Ken, I want to come back just for a minute to the promotional efficiency question from before. I’m trying to get a sense of whether this is other sort of companies in the grocery space having up their game in terms of sort of in store selling capabilities that’s allowed them to be more successful in getting some high quality space or is it just that, in the environment we’re in, they’re just pushing with more, let’s say moneys are spending to get some of it, which will fade at some point. And have you seen something like this dynamic sort of in your experience before? And then I’ve got a follow-up.

Okay. Andrew, I mean I would say, look we have a very good competitive set in our space. And so, as you know very well. Our view is just the sheer number of new items and number of new competitors certainly in a – for instance in yoghurt space, just lots of people coming in with new items. And so the competition for a limited number of quality display options, I would say is increasing. And so we continue to have very, very high confidence in our sales capability. We’re really good at what we do there, and we think we know the ingredients to successful execution. I mean it always boils down to getting the right, really category driving products on display in the right way at the right price point, which we know what that is, and again those are, we’re not pressing harder. We know what the right price point is; and with the right kind of feature support. So we know what to do. We’ve diagnosed that Q4, and we think we can go out and get it. There is just more competition and demand. So we’ll have to up our exceptional game. Andrew Lazar – Barclays Capital, Inc.: Okay, that’s helpful. I appreciate that. And then, with respect to pricing in yogurt moving forward, I guess particularly in Greek, you’ve got a couple of things you’ve got, obviously higher dairy prices or costs. You’ve got a financial owner that now has a stake in one of your competitors. You’ve got perhaps some of the growth in Greek, filling out some of – all of this significant capacity that’s come on stream over the last couple of years. Those factors would suggest to me the opportunity for pricing to stabilize or kind of move in the right direction as we move forward. And I think there have been some moves already to that effect by some players in Greek. Some of you may have suggested that, maybe they’ve taken pricing and General Mills has not yet moved in that regard. So trying to get a sense on, would you expect that to kind of move in the right direction, and is that part and parcel of how General Mills thinks about it too?

Well, Let me just say that, I would agree with your observation that we’re seeing price stability. Obviously we don’t comment prospectively on pricing and that sort of thing, but I agree with your observation. We also of course are seeing some moderating dairy inflation; and it’s always hazardous to predict what commodity prices are going to do as well, as you know. But we’re encouraged by what we are seeing on that front. So dairy inflation will be a key variable for us next year. And we like the direction it’s going in now, and I think we’re observing price stability in that Greek segment right now.

Yes. I think Andrew, I just add a few, if you look at the Nielsen in the fourth quarter, pricing in Greek was stable and we were very much in line with that on both the movement in $1 per cup basis. So we feel good about our pricing competitiveness, and where it is, and the stability in the category. Andrew Lazar – Barclays Capital, Inc.: Thanks very much.

Our next question comes from the line of Alexia Howard from Sanford Bernstein. Please go ahead. Alexia Jane Howard – Sanford C. Bernstein & Co., LLC: Good morning, everyone.

Hey Alexia, how are you? Alexia Jane Howard – Sanford C. Bernstein & Co., LLC: Good, thank you. I’ve two questions. Firstly, it looks as though comparing the third quarter results with the data that came out today is, those cereals and the Frozen Foods have declined quite sharply over the last quarter. Given that you’re expecting to get back to growth at least in cereals, how quickly do you expect that to happen during the course of fiscal 2015. And then, I have a follow-up.

Okay. I don’t know that I have sort of quarter-by-quarter outlook for you right now, Alexia. Again going back to fundamentals, we feel encouraged by the fact that we were able to grow that business this year in the down category, and I won’t repeat for you the litany of innovation that we’re bringing fundamentally. We think that these things are – they work and that’s why we are doing more of them. I mean they effective for us. So we are going to stay on that game of product renovation, we’ll be very focused on advertising that works and all these things that I’ve talk about and we expect over the course of the year to see that business grow. And as I talk with merchandising support, we’ll sharpen our focus on execution there. And our goal is to grow that business again in 2015. Alexia Jane Howard – Sanford C. Bernstein & Co., LLC: And then just hopping back to Eric’s question about the promotional effectiveness declining this quarter, do you think it’s partly to do with some consumer shifting to less heavily processed products, and if so, what do you do with the promotions on that brand, those brands, do you step it up and try to chase more volume even if the volume response isn’t there or should you maybe be taking the prices upwards, and using that extra cash to channel into products that you are seeing grow like the snacks area?

Well, I think your last point, Alexia, let me sort of address several of the points, certainly we’re observing where the growth is coming across our portfolio. And we continue to increase the pace of innovation and the level of support behind our snacking business because that’s a real growth opportunity. Having said that though, again, we have – we know where the growth is in the cereal category right now, and we think we know how to get it. And just to repeat myself, high taste indulgent products are performing very nicely for us. And so we are going to add support to those. So, Honey Nut Cheerios are the biggest brand in the category grew for us, this year. Lucky Charms and Cinnamon Toast grew, so we will keep renovating these highly differentiated products and we will support them well and we will add to them, because they work. But to your other point, we also know that consumers are interested in more protein, and we do see more breakfast going to for instance Greek Yogurt, as an example, or our other protein based breakfast. That’s why we were expanding our range of protein based cereal offerings. Nature Valley protein granola has been quite successful for us. So, we are going to shift resources to that kind of innovation. It’s early days and I mean, literally we are just weeks into this, but it looks like Cheerios protein will strike a chord. So, to your point Alexia we are – we do really study the market closely. We look to see how consumer preferences are shifting and our innovation plan and approach is very coherent and how it follows those trends and those preferences, and which I think is the core of your question. So, thank you.

And Alexia the only thing I would add to that is you touched on median and where we are going to put our investments. And you had mentioned and you noted that it is going to be up faster than sales next year. But I think you’ll also see it, be more differentially put against those ideas U.S our old businesses for example that Ken touched on behind cereal, behind snacking, behind yogurt to potentially more differentiated step than we had in past years. Alexia J. Howard – Sanford C. Bernstein & Co., LLC: Thank you, very much, I will pass it on.

Our next question comes from the line of Matthew Granger with Morgan Stanley. Please go ahead. Matthew C. Granger – Morgan Stanley & Co. LLC: Hi, good morning everyone. Thanks for the question.

Hi, Matthew.

Good morning, Matt. Matthew C. Granger – Morgan Stanley & Co. LLC: Hi, just one clarification, I guess on the guidance for operating profit growth. First, you highlighted an expectation of mid single-digit segment operating profit growth, but you’re also coming off a fairly significant decline this year in corporate expense. Can you just walk through some of the drivers of lower corporate expense this year and whether some of those might revert going into 2015?

Yes, first of all to be clear obviously the corporate items of the unallocated are outside of the segment operating profit, segment operating profit will grow in line with sales. It’s going to be –it’s going to improve off the growth rate this year, driven partially by the higher sales growth that we are projecting for next year. And the lower inflation, so greater gross margin expansion. So that is the fundamental driver in next year’s number. In terms of this year, our corporate unallocated was corporate items was down for a few reasons, compensation incentive was down year-over-year that is surprising given the results. And then there was the miscellaneous other corporate items benefit rate et cetera, that were beneficial – that were captured in F14 numbers. Matthew C. Granger – Morgan Stanley & Co. LLC: Okay. Thanks, Don. And just one question on Yoplait, I mean China specifically. I know you’ve talked a few months ago about breaking ground on a manufacturing facility there and planning a gradual roll out. Just wanted to see if you could give any update on what type of progress you’re expecting for this year. And whether there is any prospect of having a product to commercialize at some point later in the year?

Yes, it’ll be Matthew it’ll be later in the year. I mean we’re making – we were building a plant. I mean we’ve been very clear on that and we are – this is an exciting multibillion dollar category. In China we’ve great capability to bring there and we will obviously have more details to share with you as we get closer to the launch. But we’ll have very good capability and we intend to launch very high quality, very competitive offerings into that market. And we will start as we always do in the specific region in China and prove out the business model and make sure that we’ve got our capabilities aligned the right way and then we will expand. But we are obviously very enthusiastic about this opportunity and I think it’s a great growth platform for General Mills in China. Matthew C. Granger – Morgan Stanley & Co. LLC: Okay, all right, thanks very much, Ken.

Our next question comes from the line of David Driscoll with City Research. Please go ahead. David C. Driscoll – Citigroup Global Markets Inc.: Thank you, good morning everyone.

Hi, David.

Good morning, David. David C. Driscoll – Citigroup Global Markets Inc.: Don, I wanted to go to the gross margins in the fourth quarter. In late March on the third quarter call, you laid out an expectation of pretty substantial fourth quarter gross margin improvement, and I thought you were pretty clear back then about strong expectations for HMM delivery and favorable input cost. Today it seems like the miss is being more explained like it was a revenue issue because of these promotional items kind of what happened and why did the gross profit margin miss your expectations by so much?

Thanks for the question and that was where the miss was in the quarter. It was not HMM or productivity that came in as expected. It was inflation came in a bit higher and our trade expense related to the promotions that we talked about the promotion efficiency or inefficiency obviously not only hits the top line but impacts gross margin as well. So there is really those two items which didn’t play out in the quarter as we had expected in March. And they’re probably both responsible about half of the miss those two items are equally responsible for the miss in the quarter. David C. Driscoll – Citigroup Global Markets Inc.: Okay, can you give us some color on the drivers of inflation in fiscal 2015?

Yes, we have 3% inflation as you know we have a fairly broad market basket, I guess one thing to note, it probably was highlighted by the fact that we identified dairy is the driver of the F14 variances. Dairy is becoming a larger piece of our basket not quite as large as grains, but in that same 5% to 10% range. Yes, we looked and because of that breadth of input cost and again, we talked about inflation is really all of COGS that we’re talking about. It’s very broad grains of 5% to 10%, dairy 5% to 10% many other products in the 5% range including energy both from packaging and distribution. And so we’re seeing some favorable movements on grains, whether it’s energy, sugar, even dairy, as of today versus a year ago are still higher and we see them driving that inflation for next year. David C. Driscoll – Citigroup Global Markets Inc.: Final quick one, sorry thank you. Final quick question 53rd week is that – is it correct to say, it’s two points to the revenue line no impact to the profit line and as a consequence of that second statement, we should not have any negative issues related to this particular 53rd week affecting F16 because always we have to deal with that right now, so is that all fair?

Yes, we expected the extra week will generate about $0.05 of EPS which as we said we’re investing back this year to help drive top line growth. David C. Driscoll – Citigroup Global Markets Inc.: So, no impact to profit and then that would be true then on the F16 there is no reason to call that out as a factor affecting that particular year?

We expect to reinvest this year. Yes David C. Driscoll – Citigroup Global Markets Inc.: Okay, thank you.

Our next question comes from the line of Ken Goldman with JPMorgan. Please go ahead. Ken B. Goldman – JPMorgan Securities LLC: Hey, thanks for the question. Not just for Mills, but across a lot of larger US-based food names, we are in a bit of a challenging cycle here. I guess I am wondering in your view how do you break this trend? What is the smoking gun? Do we need better innovation, stronger marketing, more efficient promos? Is it all of the above I guess? I am just trying to understand, Ken, in your review, what is the main problem we are all experiencing across packaged food at the moment and maybe how you go about fixing it?

Can I – I wish there was one silver bullet, it would make it easier for us, but I think it depends on the category, I mean clearly snacking is a trend, a positive trend, and so maybe that is a key factor of that and we’re very focused on the snacking trend, and it’s not just the snacks in our snack businesses, we see yogurt becoming more and more of a snack food and in fact one of the reasons for the resurgence of our core Yoplait businesses is that we’re seeing more snack usage and we’re actually talking about the product and its snack versatility in advertising. And so we’re seeing it play out there, we are seeing our hot snack products, Totino’s do very well. We are seeing our natural and organic snack. So I think that there is a snacking play. I think that as I said I think that consumer definitions of wellbeing or health are changing, and so we need to be very in tuned to that, and we’ve talked about the protein trend not just in yogurt, but across the number of categories and how that’s playing out and how we are looking to capitalize on that. And we talked about how consumers are look to avoid some different things and some things that maybe weren’t on their radar several years ago with gluten being exhibit one. So, we are in changing times. We are marketing company so our job is to understand the change and capitalize on it, find opportunity there, and so I think it’s more than one change, as I tried to say. But it’s more snacking, it’s changing definitions of health and wellness, but as we get clear, I think, understanding of those and better understanding of what exactly the consumer wants there, we will get better at giving them, giving those products to her and these again should become opportunities for us. Ken B. Goldman – JPMorgan Securities LLC: Thanks and then one really quick follow-up. Advertising spending in the fourth quarter, very basic math here and this easily could be wrong. Was it down low double digits, high single digits? Could you just confirm that it was down fairly meaningfully in the fourth quarter?

Yes, that’s right. We had some add-ins last year, late last year that we are rolling over and just from an accrual base ends up catching up with you in the quarter. The full year numbers are more important number to look at it. It was not about if 3% and that also included within our U.S. business some shift for media to other consumer like sampling behind our yogurt business, which had a fairly significant impact on that number. Ken B. Goldman – JPMorgan Securities LLC: Thanks, we will see in a couple of weeks.

Operator, can we sneak one last one in here.

Certainly, our final question comes from the line of Ken Zaslow with Bank of Montreal. Please go ahead. Kenneth B. Zaslow – BMO Capital Markets: Hey, good morning everyone.

Hey, Ken.

Hey, Ken. Kenneth B. Zaslow – BMO Capital Markets: Ken, you changed up the leadership in North America. So my question to you is what are you looking to accomplish under the changes and what will be the greatest strategic changes? Are we going to start to see something different? And just kind of putting it all together is moving people around versus inserting new talent from outside, what was the thinking on this because it seems to be maybe a strategic evolution here. Is there something going on? Can you help us out?

Yes, so what I’m looking for thank you for the question. I think what you will see is greater focus, greater prioritization, more fluid allocation of resources, and some of your the earlier questions on the call alluded to that, and higher pace of activity. I mean it’s clear that, it’s just its more competitive out there with innovation and ideas coming from both small, very small companies and big companies and so. So along with the way we focus and prioritize, it’s important for us to just pick up the pace and so of innovation and so, you will see all of those things. Kenneth B. Zaslow – BMO Capital Markets: Was there any thought about bringing in outside talent or anything like that or do you think you have the right team for this North American leadership?

Yes, we have quite a strong team and we are developing and moving and promoting people based on the results that they have achieved over time, and so we have a very effective leadership team in North America well led and I think you will see these points that I made just a minute ago. Kenneth B. Zaslow – BMO Capital Markets: And my last question, usually you talk about acquisitions where there is priority using cash flow. You didn’t talk about that at all. Can you just – I know last year you guys said that you were not thinking about acquisitions. Is it back on the table? Just talk about it broadly. Obviously you are not going to give exact examples, but I just want to know broadly.

I’m happy to talk about it and you are right we are not going to give exact examples, but yes, M&A is still part of our strategy. We were clear that F14 was the year of consolidating some large acquisitions we done, and then returning cash to shareholders, and if we did both of those things very effectively. We have continued to work during F14 to look at new opportunities in the same markets, the same areas that we have talked about previously getting deeper in emerging markets and better -- snacking in the U.S. or in developed markets more broadly, and as things eventuate we will certainly share with you. Kenneth B. Zaslow – BMO Capital Markets: Great, thank you.

Thank you, everybody. Give me a shout if you still have questions. I appreciate it.

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.