Greetings, and welcome to McCormick's Fourth Quarter 2010 Conference Call. [Operator Instructions] It is now my pleasure to introduce your host, Joyce Brooks, Vice President Investor Relations for McCormick. Thank you Ms. Brooks, you may begin.

Good morning to everyone on today's call and to those joining us by webcast. The purpose of our call is to review McCormick's fourth quarter financial results, 2010 accomplishments and 2011 outlook. In the room with me are Alan Wilson, Chairman President and CEO; and Gordon Stetz, Executive Vice President and CFO. Paul Beard who has participated in many past calls is not with us today due to his recent appointment as President Asia/Pacific. I know you join me in wishing him continued success in his new role. We’ve posted a set of slides to accompany today's call at our website ir.mccormick.com. As a reminder, our presentation today contains projections and other forward-looking statements, and actual results could differ materially from those projected. The company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or other factors. Please refer to our slides in this morning's press release for more information concerning forward-looking statements. In addition, certain information that we will present today are non-GAAP financial measures. This includes information which excludes the impact of a significant tax accrual reversal recorded in the third quarter of 2010 and restructuring charges recorded in 2009. We present this non-GAAP information for comparative purposes alongside the most directly comparable GAAP measures. Reconciliations of GAAP to non-GAAP measures can be found in this morning's press release and in the presentation slides for our call. It is now my pleasure to turn the discussion over to Alan.

Thanks, Joyce. Good morning, everyone, and thanks for joining our call. We delivered a fourth quarter performance that was a strong finish to McCormick's record 2010 results. At the top line, our sales growth was driven by 6% increase in volume and product mix, demonstrating the underlying strength of our key categories and products in a still difficult economy. At the bottom line, our actions to repatriate cash from foreign subsidiaries led to a favorable tax rate. This lifted earnings per share to $0.99 which was above our initial projections for the quarter. Let's talk about the key initiatives that drove sales, beginning with the Consumer business in the Americas. We had a record level of holiday support and for the first time in the U.S., distinctive advertising for Thanksgiving and for Christmas. Recipe Inspirations also received incremental advertising this quarter and we continued to benefit from new distribution in the warehouse club channel and for our Billy Bee Honey brand in Canada. The results were impressive. In the U.S., unit sales of branded herbs and spices were up double digits. Gourmet and extract products grew more than 20% and our dry seasoning mixes rose 8%. Sales of Lawry’s and Zatarain's were both up more than 5%. In fact the primary areas of weakness in this part of our business were private label and economy products, which both declined in the fourth quarter. Consumer sales in Canada also grew at a double-digit pace. The net result was a 9% increase in consumer sales in the Americas. Clearly, consumers regard our brand as a good value and rely on McCormick to deliver great flavor, especially for their holiday meals and baking. As we indicated in our press release, our fourth quarter unit sales growth in the U.S. exceeded the increase in…

Thanks, Alan, and good morning, everyone. As Alan indicated, we were pleased with our fourth quarter performance which included strong sales growth in many parts of our business. It demonstrates the effectiveness of our key growth initiatives even in markets where consumers remain under pressure. For the total company, fourth quarter sales rose 6% from favorable volume and product mix. Price and foreign currency exchange rates each had a slightly negative impact this period. Let's take a look at our two business segments by region beginning on Slide 16, with the Consumer business. In the Americas region, we grew sales 9% with most of the increase in volume and product mix. As Alan shared, we had impressive results in our core products in the Lawry’s and Zatarain’s brands, along with incremental sales from Recipe Inspirations and other new products. Distribution gains in the U.S. warehouse club channel and with Billy Bee Honey in Canada also added to sales volume and product mix. Consumer sales in EMEA declined 10% from the year-ago quarter and were down 5% in local currency. This decrease occurred outside of our primary markets and was due to poor economies and more competitive conditions in our smaller markets. These markets, including Spain, Portugal, Italy, the Netherlands and Belgium have been weak throughout 2010 and we expect this situation to persist into 2011. Our business has been stronger in our primary markets, France and the U.K. Sales in France remain strong this period for both Ducros spice and seasonings and Vahiné dessert items. While volumes in the U.K. were up, we also increased promotions and allowances to our customers. In both of these markets, we had incremental brand support to drive sales growth into 2011. Sales in the Asia/Pacific region included the strong result in China that Alan…

Thanks, Gordon. Heading into 2011, we remain cautious as we continue to operate in an uncertain environment. While we've taken pricing actions to offset the increase in raw and packaging materials, these costs remain volatile. Food service trends in the U.S. have started to level out but still have areas of weakness. And while Consumer sales in our major markets in Europe have been strong, we expect many of the smaller markets there to remain difficult. We also faced a headwind related to our tax rate. Gordon shared our guidance for a 31% tax rate in 2011. This compares to 28 1/2% in 2010, which excludes the reversal of the significant tax accrual but includes a number of favorable items that we do not expect to repeat in 2011. The increased rate from 28 1/2% to 31% is expected to lower 2011 EPS by about 3%. At this time, we are projecting 2011 EPS in a $2.80 to $2.85 range. This is an increase of 6% to 8% on a comparable basis from $2.65 per share in 2010. Excluding the 3% impact of the higher tax rate, our range is right in line with our long-term 9% to 11% objective for EPS growth. Behind this projected profit increase are our plans to grow sales 5% to 7% in local currency. Based on current rates, we expect foreign exchange rates to add another 1% in 2011. Pricing across both our Consumer and Industrial businesses is forecast to increase sales approximately 3%. Our key growth initiatives are expected to deliver another 2% to 4% of growth from favorable volume and product mix. Keep in mind that this range accounts for the $10 million shift in Consumer business sales from the first quarter of 2011 into the fourth quarter of 2010, as well…

[Operator Instructions] Our first question is from the line of Alexia Howard of Sanford Bernstein.

I want to ask about the pace of innovation here. It does feel as though the rate of innovation is really stepped up and as we go into 2011, that's obviously going to be a big driver here. Do you have a number for the percentage of sales from new products that you're at right now? And can we expect this pace of innovation to be a new level that will continue for some years to come?

The way we look at it, first I'll answer the first question, we are seeing increased activity in innovation, both driven by our customers, both our food service customers as well as our food manufacturer customers, and we are certainly stepping up our innovation activity. There's a recognition clearly across the industry that we have to innovate to grow. And I'd say the one question mark on that is the impact of increased pricing and whether that will impact our customers' willingness to really go forward with a lot of the innovation as planned. But I’ll say the activity really is picked up. We generate about 8% of sales from products that have been introduced in the last three years and that's been a fairly consistent number year-to-year. It ranges between about 8% to 10%.

And just a quick follow-up on the commodity comp side, it looks as though from the graph on Page 27 that the material cost increase in 2011 is going to be maybe around $100 million. Is that the right ballpark? And how locked in is that at this point given the way everything is bouncing around right now?

You're about right. It's about 7% to 8% off of our raw material or cost of goods sold so that's in the ballpark. I'm sorry, I didn't get your second question, Alexia.

How locked in is that for 2011 given your forward-buying practices?

We tend not to try and divulge too much about our forward position, but we try to establish coverage to mitigate any of this volatility. So we do try to lock in as much as we can so we don't experience this as we go throughout the rest of the year.

Our next question is from the line of Ken Goldman of JPMorgan Chase. Kenneth Goldman - JP Morgan Chase & Co: So the New York Post reported that Wal-Mart, to combat competition from dollar stores, is pressuring suppliers to provide products that are smaller and at lower price points. So if that's the case, is it reasonable to assume that your wider range of products, like you sell plenty of A to Z spices already, and the naturally low price points of spice bottles will somewhat immunize you to Wal-Mart's efforts? Or is it too early to know exactly what the impact might be?

Yes, without commenting specifically on specific customers, we already sell a variety of sizes of spices at different price points as you all know. We cover everything from economy products all the way through to gourmet, and certainly what we saw last year was a recovery in more of the higher-end stuff, the gourmet. And if you recall what happened a couple of years ago, we saw consumers trading more to DSMs. We're watching to see what actually happens. But the specific initiative to take products out of bottles, that's not something we've historically done. Kenneth Goldman - JP Morgan Chase & Co: Just one other question, given the high volatility in your input costs, I think this is worth asking but although it may be kind of from left field, some of the protein industry have been talking about growing their own corn. And clearly you're not facing the volatility in your input costs to that level. But I can see a scenario maybe, it's already happening where the acreage battle starts to affect some of your inputs, too. So I guess I'm asking how volatile would your inputs have to be? How dire would the situation have to become? Not that we're anywhere near there yet, but for you to start going backward in the supply chain to avoid some unpredictability in your costs. I guess could you even do that? Could you, if you wanted to, grow some your own cinnamon or vanilla or is that just too difficult from an operational standpoint? I guess I'm just wondering how to think about the old make or buy decision that for some manufacturers seems to be leaning more toward make lately.

For us, because of the wide variety of different products that we source; we source more than 70 individuals spices and then when you add in all the regions that we source from, it's a couple of hundred; it's just too complicated and too complex that would drive us back. Now we've got strong long-term relationships with growers of different products and so while we're not backward integrated, our long-term relationships and the supply stability that we've had helps us in terms of supply assurance and quality. It doesn't necessarily immunize us from the cost volatility, but it certainly does help us. The complexity of everything we’re doing would say we’re not driving backward to agriculture.

Our next question is coming from the line of Alex Bisson from Northcoast Research.

Maybe just one question on marketing. It looks like going forward, it's not going to be the same headwind that it was in fiscal '10. But could you talk about any changes in how those dollars will be allocated either among geographies or behind new products versus kind of older existing products, things along those lines? Different parts of the portfolio, also.

Sure. Every year, we look at our marketing mix to determine what the best, most effective spends are. And this past year, we've had a combination, if you've seen them, of driving core products with our antioxidant advertising in the U.S., new products like Recipe Inspirations and then our more image building holiday ads that we ran in Thanksgiving and Christmas. We're continuing to really increase at a pretty high percentage rate, our spend against social and digital media because that is becoming a very effective spend and where the consumers are getting our message. We're still going to continue to support our products in France and the U.K. as well as in our other consumer markets like China. And we've got a healthy mix of core products and new product advertising in the U.S. We've got some really good new products that we're introducing in the U.S. that we want to make sure we support as well. But I think just like everybody else, you'll see more of a mix driving to social media because that's where the consumer is getting their information.

And maybe just one question on product mix: It sounded like the branded piece of the portfolio has picked up in terms of growth and that private label has slowed or maybe even declined a little bit. What do you think is going on there? Do you think consumers are trading up to the branded part of the portfolio or are you losing some customers altogether out of the category?

We've certainly seen healthy category performance and I would say we've seen more of a return to brand as consumers have developed more confidence. The other thing is we're driving that with our product innovation and our promotion programs. That has really helped. Obviously, we're cautious on what we think will happen in 2011 given the difficulty the consumers face.

And then one final question. Can you just talk about the level of coupon activity in the fourth quarter versus last year?

Coupon activity, it was heavier in the U.K. and that's what drove that pricing decline that you saw from the U.K. In the U.S., coupon activity was pretty similar to last year.

Our next question is from Robert Moskow of Crédit Suisse Group. Robert Moskow - Crédit Suisse AG: Just a little back of the envelope math, it looked like when I took that $100 million inflation number and put it on your -- just on the materials part of your cost of goods, you're talking about something in the mid-teens in terms of inflation. And I'm just wondering if you're looking at that way, first of all, Gordon. And have you ever gone into a year with that kind of a headwind to make up foreign pricing? And if so, how do you know that there's not going to be some kind of negative elasticity of demand? You're assuming volume growth in a year when you're taking up pricing, it seems like quite a bit.

We'll have to work through this math a bit, maybe off-line, but we're looking at more about of a 7% to 8% off the raw material base. That is still a significant increase to your point. So I don't want to say that this is not an event that is unusual. We have not historically seen increases at this level. Last time we talked about this was 2008. From an elasticity standpoint, the price increase that we took is 3%. That's not too out of line from our experience in previous years. That is the question mark that we, I think, the industry in general is looking at as we go into 2011. We do have support behind our brand as Alan talked about to make that we continue to innovate and drive the consumer, but that is something that we have factored into our thinking as we've given you the guidance for next year.

And as you see on Slide 27, it's really a combination of the pricing and our CCI savings, both together that are going to offset that or project it to offset that cost inflation.

Yes, we didn't feel that we could price completely to the inflation that we need the CCI savings to help offset it as well. Robert Moskow - Crédit Suisse AG: Just to show you how I got there, I just took 40% of your cost of goods. I assume that's the percent that's. . .

No, it's a much higher. It's closer to 80% on raw and packaging of cost and goods.75% to 80%, yes. Robert Moskow - Crédit Suisse AG: A quick follow-up. In 2010 you had a lot of distribution gains in China and the wet markets and I think that was a good selling point of the stock. I didn't see any follow-up in your 2011 outlook. You've mentioned distribution gains in a lot of places but not China. Are there more gains to be had in just the consumer sector there?

Absolutely. We're still pretty concentrated in a few significant cities and we've got product distribution pretty broadly. But the penetration in the mid-tier, which are still huge populations, continues to grow and we're really encouraged by our introduction of condiments, especially things like Thai Sweet Chili Sauce which is doing very well there. Robert Moskow - Crédit Suisse AG: Lastly on gross margins, should we factor in kind of dilution in the first half of the year and then building up towards accretion in the back half as the pricing moves its way through?

Well, I'd be careful to try to get into the quarter because a lot of these things are driven by mix of our portfolio. I understand your thought process. Our pricing is executed, so we will start to accrue those benefits into the first quarter. So I'm expecting generally that the gross margins should be -- not a volatile quarter-to-quarter thing but a lot of it can be impacted by industrial versus consumer mix in each of those quarters. So I'd be careful of that type of thinking. Robert Moskow - Crédit Suisse AG: And then lastly, just short-term, you’re two months into your first quarter, you mentioned that a lot of customers took a lot of inventory in fourth. Do you expect a pretty weak sales number in first quarter, the full $10 million? And how confident are you that it’s not more than $10 million in terms of how much was pulled forward?

Well, obviously we're still in the quarter and we're reading this as we go forward. We still have some big events ahead of us and particularly U.S. We have Super Bowl and we have Mardi Gras, we have had big promotions. We are still trying to get a determination as to exactly how the sales will impact first quarter. But in general, if you look at the take away versus what we shipped, it does appear that there was a $10 million shift out of Q1 and to Q4 and it's a difficult read right at this moment.

Our next question is from the line of Ann Gurkin from Davenport and Company. Ann Gurkin - Davenport & Company, LLC: Two questions. One, can we start with Zatarain’s. Can you talk about opportunities to expand Zatarain’s and the outlook for the growth of that product line over the next several years?

Yes, we're very excited about what we're seeing at Zatarain’s. We had very strong growth in both our boxed rice mixes this past year and we've introduced frozen products. We've had those out there in very limited distribution for a couple of years and we are seeing that expand pretty well, and it's becoming a very nice growth story for the business. And we're doing things like Blackened Chicken Alfredo and Jambalaya in frozen and we've got, I think seven or eight products now that we’re continuing to expand distribution on. So that's one that we are pretty excited about. We’re also hopeful for a return to Louisiana Seafood with our breaders and Crab Boils as we get past last year's oil spill and people get more confidence in the shrimp and fish industry coming out of the Gulf. Ann Gurkin - Davenport & Company, LLC: So high single-digit growth looks reasonable?

Yes. Ann Gurkin - Davenport & Company, LLC: And then secondly in terms of acquisition, can you update at all on the volume or potential for acquisition, valuation, any change in that profile?

I'd say it's a pretty active environment right now. And so it looks more active, I think than it has for us, at least in the last couple of years. And as you've seen, we've done a very good job of paying down our debt from the Lawry’s acquisition and so we have a pretty good pipeline that we are working against.

Our next question is from the line of Eric Katzman with Deutsche Bank.

First, was the account that you mentioned in terms of the win, was that Sam's Club? Because I know that you've talked about the potential to take that account out of test market during 2010.

No, there's no new update on that particular customer but we do continue to have new product and distribution wins.

So if Sam's Club was to go your way, which would be a first half event given the timing of the seasoning -- of the business, that would be incremental to whatever you put out today.

Yes, and I can't speculate specifically on what an individual customer is going to do. But we do factor in some distribution wins as part of our sales guidance, but I wouldn't necessarily say that they were commenting that they've made a decision.

And then one of the things that I thought was kind of interesting in terms of the charts that you put up on inflation, most of your commodities, there is no futures or liquid market and yet you are seeing significant increases. And so I'm just kind of wondering maybe just from a broader perspective Alan, I mean do you think because there really isn't that like financial speculation, like a lot of times the companies in the industry will say that investor speculation is what's spurring the growth in the commodities but that doesn't really exist in your market. So it seems like -- would you agree with that? And is that -- so the increases that you're seeing are really fundamental-based.

Yes, I think the increases we’re seeing are more fundamental-based. I would say that there is some opportunity by speculators to take pepper inventory because it can be held for a very long time without degrading before it's ground. So there may be some of that, but it's not like we see in soybean oil or wheat or some of the other commodities where it's really driven by speculators. I think the thing we do see is competition for acreage because as farmers move more into corn to take advantage of this ethanol subsidy, they don't plant other things. And so that will impact us to some degree.

Well, I guess I went to Ken's question about backward integration and stuff. But based on Bob's comment about Madagascar, I'm not sure -- maybe that place would be better off if you took it over.

I'm not going there.

And then just last question, in all seriousness, the private label decline that you saw in the fourth quarter, I mean that's really quite surprising. Do you attribute that to just the retailers more focused on brands, your advertising, consumer confidence. Kind of how would you break it down? Because it seems to go against what has been the trend.

Yes. Now to comment on the private label products that we supply. And some of it is driven by rationalization of the products that are being offered so there's more of a focus on some efficient assortment. The second thing is where you may see on some of the scanner data where private label is growing, it may be from retailers who produce their own products or we don't supply. But we certainly had a lot of activity behind our brands in the fourth quarter and as we went into the Christmas season. And I think we're benefiting from that. We're aggressive on promotion, we're aggressive on advertising and we typically do see consumers respond at the holiday period to our brands.

Our next question is coming from the line of Chris Growe of Stifel, Nicolaus. Christopher Growe - Stifel, Nicolaus & Co., Inc.: I had two questions for you. The first one is, and forgive me if I missed this, but just a question regarding product mix and how that performed in the quarter. My modeling of the Consumer business, given the revenue growth, was a little lighter than I expected. Was mix a factor in that, especially that division?

Mix was a positive factor given the strength of the brand in the division. Obviously, the offset to that positive mix as you saw in the gross margin was the increase in the raw material cost that we experienced and the pricing had not yet been implemented until very late in the quarter. Christopher Growe - Stifel, Nicolaus & Co., Inc.: So I underestimated the cost inflation. Would the fourth quarter run rate been more, in terms of cost inflation, more like what you're going to see in 2011? I know not every quarter is perfectly aligned, but was it up to that sort of level in the fourth quarter?

Yes, I think you could expect that although, as Gordon said, there was no pricing impact -- negligible pricing impact in the fourth quarter. And as we go through 2011, we'll see the impact of pricing to help offset that. Christopher Growe - Stifel, Nicolaus & Co., Inc.: And then I had two questions related to Europe and particularly the Europe Consumer business which was weak this quarter. I guess I'm just trying to understand first of all, is it mostly the U.K. that's driving that weakness? I think you mentioned the other kind of 20% of sales. Do you see that as a risk to 2011, that those other 20% are going to be weak? Or is it the U.K. ? And I guess in relation to the U.K., I'm wondering if there's still some more investment from the standpoint of promotion or price discounting to try and better battle private label on that market.

Yes. The U.K. specifically had very heavy promotion and discounts in the quarter and that's why you saw the impact specifically on pricing. Volumes actually did grow but not enough to offset the heavy promotions that we ran there. And I think that's something that we're seeing pretty broadly across the industry and not just our category. And we think the way to win there is to make sure we're offering the right value for the consumers as well as the right mix of innovation. I wouldn't expect to see those smaller markets to impact us to the degree that they have in 2010. One, were up against softer comps and we are again aggressively trying to build and grow those smaller markets as well. But I wouldn't expect those to have the same kind of impact in 2011 than they've had in 2010. Christopher Growe - Stifel, Nicolaus & Co., Inc.: An effect of lapping essentially more than anything else, right?

Right. Christopher Growe - Stifel, Nicolaus & Co., Inc.: They're not that getting better, I guess is what I'm getting at.

I don't think we’re going to see a strong recovery, but we’re lapped in some of those lousy comparables. Christopher Growe - Stifel, Nicolaus & Co., Inc.: One final one, if I could. Your joint venture earnings you’re projecting to be down a little bit for the year. I have built-in, from what little I know, some benefits from India, some benefits from Turkey and I was getting obviously profits to grow. So I guess I'm understanding, is it the Mexico piece? Is it soybean oil cost? Is that the main factor we should watch for, kind of hurting that profitability for that business as you see it today?

Yes, the primary driver is the Mexican joint venture which is by far the largest and most profitable venture we have. And it is soybean oil and the increase there that's driving that.

Our next question is from Eric Serrota with Wells Fargo.

I'm hoping you could provide a little bit more color on the 2011 outlook. If I sort of normalize for the tax rate, and then the $10 million shift in Consumer America sales, you sort of get to some pretty hefty growth rates on the low end, sort of the 9% to 11% range, which I know is in line with your long-term targets. But given the lower cost saves, the lower non-consolidated income, the flat to down gross margins, could you give us a little bit of color as to how you expect the top line to translate into that kind of earnings growth?

Well, the guidance we’ve given is 2% to 4% organic and roughly 3% pricing on the top line. So that's obviously one of the factors that you'll have to consider in your model. You're right in that the gross margin would be flattish and then beyond that, we've indicated that our advertising and promotion would rise roughly in line with sales. And the past few years, we've been growing that in excess of the sales growth rate, and this year we’re looking at growing it more in line with sales. So, given all those factors, we come back to the guidance that we’ve provided you.

And then with the fourth quarter, you didn't see much operating leverage in response to very strong volume. I know that raw materials were up and that squeezed your gross margins. But it also looks like SG&A was up pretty sharply, well more than the $7 million increase in brand spending. What else is in that SG&A line that constrained profit growth in the quarter?

Well, obviously you mentioned the $7 million in advertising and promotion. As we indicated at the beginning of 2010, we're still experiencing the impact of higher pension costs, and that was close to $3 million in Q4. So those two alone are $10 million. The rest of that is generally going to be variable things that rose in line with the healthy sales growth rates.

And then lastly, I wanted to just circle back to Rob Moskow's question in terms of demand elasticity, it seems like you're looking for some pretty hefty volume growth in 2011, notwithstanding the pricing that you've taken. I guess what gives you the confidence that your elasticity models are reasonable here? Could you provide a little bit more color? It just seems that with 3% pricing to get at the upper end, 4% volume growth despite the $10 million headwind seems like a tall order.

Yes, remember what's happening in the markets. As we take 3% pricing and on different products it's higher and lower than that. 3% is just where it averages out. But the percentage increase on private label products is actually a lot higher. And not only are we -- and because it's really cost driven, we’re not the only ones that are passing through those increased products or those increased prices. So we’re seeing the gap, the price gap between private label and brand really close as these price increases take effect. The other thing that gives us confidence in the buying growth is our new product activity and the distribution wins that we talked about.

Our next question is from Mitch Pinheiro of Janney Montgomery Scott.

Within your organic sales growth, how do you balance that between the Consumer and the Industrial side?

The 5% to 7% guidance?

On the organic, the non-pricing part of your. . .

For 2011?

Yes.

It's going to be roughly equal.

And as far as cap spending $90 million to $100 million, is there any major projects in that number?

Yes, we've got some plant expansion, specifically significant expansion of our Guangzhou plant in China and then there's a number of investments that we're making in increased capacity as we've won some of this new business.

Final question for Gordon, you mentioned obviously you're going to start reworking on your inventory, but I'm not sure, what can you do to improve that? I mean your cost, your input costs are up, where is that improvement, where does that lie?

That's a fair question. Obviously, there's going to be pressure on our targets given the input costs. But underneath that, the teams are still working very hard on systems and processes, mainly in demand planning and sales and operations planning which relates to safety stocks, finished goods turns and the level of inventories that we need in the pipeline. So you're right in that we’re going to have some pressure due to raw material cost challenges, but I know the teams are very focused also on underneath all that, executing against some investments that we've made in technology and processes.

What would it take for additional price increases in fiscal '11?

Well, we're certainly watching the commodity environment pretty closely and we took the pricing that we had to take for the current environment, certainly just like we saw in 2008 with all the volatility. We'll be prepared to respond if we have to, and we think the consumer can bear it. We'll do what we have to do. We certainly have tried to take a very responsible conservative approach with pricing and just do what we have to do. And in fact in this case, we have a combination of our CCI and our pricing to try to offset the impacts that we have.

So you're not fully covered for fiscal '11 with your major items.

We have a variety of coverage on our items and it just varies based on the specific commodities.

Has any of your core or key customers helped you or given you some guidance as far as you taking out coverage maybe specifically for a key customer?

Well, specifically with our Industrial customers, we collaborate on what coverage to take and when we're going to take it and at what kind of pricing. So the Industrial business, we feel pretty confident that we'll be able to work our way through this and I would see price changes in Industrial as more fluid. In Consumer, specific to that, we make those decisions pretty well based on what we see from a volume demand and pricing standpoint as well, so we’re kind of making those decisions ourselves.

Our next question is from Andrew Lazar, Barclays Capital.

You talked about the combination of pricing and productivity being used obviously to cover some of the cost increases and perhaps that's the prudent approach, given where the consumer is at. And I apologize, I can't remember, back in '07 and '08 with some of the pricing that you took, was that on its own able to cover, or more on its own able to cover the inflation that you saw then? Whereas in productivity it was a bit more incremental to the bottom line, or was it fairly similar as this time around?

Yes, in 2007 and 2008 when we took pricing, we were dealing with cost increases but we weren't seeing the kind of runaway inflation in spice commodities that we're seeing now. It was limited in certain areas and we were pricing and generally that's been our philosophy. We want to try to price to cover commodity costs and then use productivity to offset all the other things that we have to deal with like pension costs and wage inflation and those sorts of things. In this case, because the commodities have been so much higher, we're taking what we think is a more moderate approach to that.

And then in terms of some of the cost increases you've seen, the way that those came about, was it equally as volatile as we might have seen a lot of commodities back in '08? Or were there cost increases that you kind of see coming in the way you do your procurement and such that you can plan a bit for it or is it tougher this time around?

No. We've been able to plan for it because we've seen. It's just been a kind of a steady escalation and some of it driven if there'd been any surges, it's been more because of specific weather events as opposed to something that we've seen like in soybean oil where over night things just changed. We've seen a steady increase in pepper, really over the last three years. Garlic is one of those that’s had the highest volatility and that's more driven by specific weather events that we think are more like a one time, one year in nature.

And then last thing just some of the other non-commodity costs you mentioned pension, things like that. I know that was a headwind in 2010 not mentioned this year, perhaps it's not as big a deal. Any other things we should sort of watch out for or that you’d call out in the cost structure outside of commodities for this year?

Now pension should be roughly the same Andrew, and obviously we indicated on the tax line, tax costs would be up relative to this year. But other than that, commodities are the issue.

Ladies and gentlemen, we have time for one more question. That question is from Robert Dickerson of Consumer Edge Research.

Just a couple of easy questions. I guess one, just a follow-up from Andrew's on the gross margin. I know I can't remember. I think it's slide 27. It does look like there is some gross margin pressure expected in '11 from that other bucket. So please explain, I guess what's in that other bucket.

Yes, that's a small number. I think that would represent our labor and overhead increases.

And that's just wage inflation or that's just employee count?

I can get back to you on that. It's a small increase and I don't. . .

It’d probably be more wage inflation. We're not expecting any kind of major surge or anything like that in hiring.

And then on the pricing side, should we expect to be somewhat balanced between the consumer and Industrial segments or do you think it's more weight towards the consumer?

I think there will be higher pricing in the Industrial segments based on the commodity pastures and the way that we deal with those. The Consumer segment we tend to price usually once a year and then lock that. Again, given the volatility, we may have to re-evaluate that. But with industrial it's more on a real-time basis since we’re passing through different commodity positions.

And then I'm just curious, obviously there's a lot of talk around will pricing be passed through, and some food companies are able to take pricing but you don't necessarily see it at retail. Is there any way to give us any feel as to, just conversations that you've had with retailers whether, you know, obviously you're expecting pricing to be up for you, but do you think that we should or should we expect to see that in the scanner or at retail?

I think we'll expect to see it at the shelf.

And then lastly, housekeeping. I know you said before that you expected to pay down the short-term debt, the $100 million in fiscal year '11, I'm assuming that's fully paid.

I'm sorry?

You just stated before that you have a $100 million in short-term debt and you. . .

The $100 million that we list on our balance sheet is short-term debt, it's actually long-term debt that's gone current that will come due in July.

I believe it was in Q3, you said that you expected to pay that down with cash. I just wondered. . .

I'm sorry. We'll let that obviously mature into commercial paper and then operating cash will be used to pay down whatever commercial paper is outstanding.

I would now like to turn the floor back over to Ms. Brooks for closing comments.

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