Margaret R. Nollen - VP, IR Arthur B. Winkleblack - CFO and EVP Edward J. McMenamin - Sr. VP, Finance

Alexia Howard - Sanford Bernstein & Co. Eric Katzman - Deutsche Bank David Driscoll - Citigroup Investment Research Eric Serotta - Merrill Lynch Terry Bivens - Bear Sterns Ann Gurkin - Davenport & Company Christopher Growe - A. G. Edwards & Sons, Inc. Pablo Zuanic - J. P. Morgan Edgar Roesch - Banc of America Securities

Good morning. My name is Cynthia and I will be your conference operator today. At this time, I would like to welcome everyone to H. J. Heinz Company Fiscal Year 2007 First Quarter Earnings Release Conference Call. This call is being recorded at the request of H. J. Heinz Company. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions]. I would now like to turn the call over to Meg Nollen, Vice President, Investor Relations. Mr. Nollen, you may begin your conference.

Thank you Cynthia and good morning everyone. I am Meg Nollen as you mentioned VP of Investor Relations for Heinz, and I want to welcome you this call. Copies of the slides used in today's presentation are currently available on our website at heinz.com. Joining me on today’s call are Arth Winkleblack, EVP and CFO and Ed McMenamin, SVP of Finance and Corporate Controller. Before I being with our prepared remarks, I would like to refer you the forward-looking statements that is currently displayed, which also available on this morning’s earning release and in our 10-K dated May 2, 2007 on file with the SEC. To summarize, during our presentation, we may make predictive statements about our business that are intended to clarify results for your understanding. We ask you to refer to our May 2, 2007 Form 10-K, which lists some of the factors that could cause actual results to differ materially from those in our predictions. Heinz undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law. We may also use non-GAAP financial measures in our presentation as the Company believes such measures allow for consistent period-to-period comparison of the business. The most directly comparable GAAP financial measures and reconciliation to these non-GAAP measures are available in the company's earnings release today. I would now like to turn call over to Arth Winkleblack, Executive Vice President and Chief Financial Officer. Arth?

Thank you, Meg and good morning everyone. We appreciate you joining in us on a Friday morning and late August. We felt that today was better than any day of next week. This morning we are here to confirm the results that we preannouncement August 15 and update you on the progress we made on our superior value and growth plan. Overall we had another great quarter and we are off to a very strong start for the fiscal year. The quarter was lead by a terrific performance in the Asia Pacific businesses and accelerating turnaround in Europe and continuing momentum in North American consumer products. These excellent results more than offset lower profitability in U. S. Food Service, which was down was in line with our expectations. Company’s highlights for the quarter were 9% top line growth driven by strong organic sales increases. Operating income, up 15% even after double-digit increases in our marketing investments and EPS higher by 9% despite a significant increase in the year-over-year tax rate. Net-net we are after a strong start for the year. Our results for this quarter represent the continuation of strong momentum that began a couple of years ago. In terms of organic sales growth, which is simply the combination of volume and net pricing, we generated positive growth every quarter over the last nine quarters after adjusting for the noise of the extra week in the fourth quarter of fiscal 2006. And we have generated five quarters in a row of organic growth exceeding the 4% target risk established for the Company this year. We believe this strengthening sales momentum reflects our more focused portfolio as well as increased investment in our people and product and in marketing and R&D. As you can see we have increased our consumer marketing…

Thanks, Art and good morning everyone. As I go through the results for Q1, I think you will appreciate a strong performance this quarter, as well as the improved clarity with our special items in either period. First, let me start by taking a look at our P&L scorecard. We can see that building on a very strong quarter last year, we have significantly improved our performance on virtually every metric during the quarter. Net sales exceeded last year by over 9%, led by the growth in our top 15 brands, which were 11% inline with our focus on reducing trade spending as a percentage of gross sales, we have cut spending by 160 basis points to 15.8% this quarter. This has been accomplished by reducing spending on less efficient promotions and by realignment of some coolest, some list prices. In response to commodity costs and capacity constraints in some areas, we pulled back on promotions this quarter. So, although, we will continue to make progress on reducing trade spending going forward, we are targeting around a 30 basis points annual improvement. We continued our investment in consumer marketing, which increased by 25% or 50 basis points as a percentage of revenue. Operating income exceeded last year by almost 15%, primarily driven by strong sales growth and tight SG&A management. EPS at $0.63 was up almost 9% as operating income growth and fewer shares outstanding more than compensated for a higher tax rate. Now let’s take a deeper look at the income statement. As you saw on the scorecard, the P&L was extremely strong this quarter. Touching on several of the lines that weren’t on the scorecard, you can see that gross profit increased 9%. SG&A was virtually flat despite the strong top line growth and net income was up…

Thanks Ed. Now let’s wrap up with the outlook for the year and a few final comments before we open it for questions. As I mentioned, we have raised our sights for the full year and now anticipate sales to grow at least 6% to 7% versus our original 4% target. Operating income growth at the upper end of the 7% to 9% growth range we provided in May. EPS growth projected at the upper end of our 254, 260 range, representing growth of 8% to 9%. As part of this we still expect the tax rate to be between 31% and 32%. And finally, we forecast operating free cash flow to be around $825 million, with higher capital spending for capacity related projects and systems investments along with higher inventory in advance of additional capacity coming online. Importantly we feel very good about our prospects for the year, despite commodity cost inflation is significantly higher than originally planned. We also have a number of terrific new product ideas and capability building projects that we are planning to invest in to sustain our momentum for the long-term. And just to summarize, we are after a great start for the year with our key operating and financial methods tracking well. We are confident in our full year outlook for both the top line and the bottom line. We are going to continue to aggressively launch and support consumer relevant innovation and will press hard on net pricing and productivity to offset the very difficult commodity environment. And lastly, we are committed to investing in the business in order to sustain long-term momentum. With that, let’s open it up to your questions. Question and Answer

[Operator Instructions]. We will pause for just a moment to compile the Q&A roaster. Your first question comes from the Alexia Howard with Sanford Bernstein. Alexia Howard - Sanford Bernstein & Co. : Hello guys.

Hello, Alexia. Alexia Howard - Sanford Bernstein & Co. : Good morning. Couple of quick questions. I noticed that… I mean Europe seems to be coming pretty more strongly at the moment and I was wondering whether you could speak to the prices as far as and also what’s happening with the U. K. pricing environment? It seems to me that’s reading a lot about the U. K. retail is getting a little bit tougher on pricing again and also wonder on the sales demand whether you are seeing weather having an impact on the soups and sauces of this business out there?

Yes, good questions, Alexia. Overall Europe, we had some great top line growth in every major market, we had almost 6% organic growth. That was about 2.5% volume, pricing is about 3.5%, and that driven by the consumer marketing up about 40%, about half of the company increase, we’ve got strong new products as I mentioned. They were able to offset some tough commodity inflation. So, continued pricing is key to your point. G&A savings were very strong in Europe, so that’s certainly helped their results and really right now, the key is keeping up with demand from a supply standpoint. But in terms of the U. K. pricing, it is a difficult environment having said that, if you bring the innovation that consumers are willing to pay forward, we are finding that we are able to pass along appropriate price increases and its necessary given the commodity environment, I think you mentioned weather also, the weather did impact the sales in U. K. with soup benefiting from that, but on the flip side of it, our sauces business, you know was hurt by the weather as it came out. So net, net we are just very pleased with Europe and we believe that’s… that turnaround is setting and moving on. Alexia Howard - Sanford Bernstein & Co. : All right. Thank you very much.

Your next question comes from Eric Katzman with Deutsche Bank.

Hi, good morning everybody.

Hi, Eric.

Good morning.

I guess my question goes to first in North American segment, I think at the last Analyst meeting in New York, I kind of questioned Bill about the… I think it was like 9% to 10% kind of EBIT growth projection for North American consumer this year. You started out lower than that. What gives you confidence in this cost environment that you can still make what I thought was a fairly aggressive target to begin with?

Yes, Eric. We feel like we are on track in consumer products, the numbers came in right in line with our plan. We’ve got great volume momentum and a number of products, products like Smart Ones, Boston market continue to fire of the shows, Heinz, the Heinz brand had an exceptionally good quarter to strong top line results, clearly commodities are top headwinds then and more than what we had planned. Having said that, we are working hard on price increases and we are getting those through and they are sticking, I mean if you might recall Q1 of last year was one of the strongest that CP had, so this was probably our toughest overlap. So, that’s not to say it’s a lay down. But we feel very confident and we like the momentum or seeing in consumer products.

Okay. It’s a fair point. And then I guess second you indicated that there is going to be five plant closures this year maybe you already did one in the quarter. Is there a like upfront cost that you absorbed in the quarter within the numbers? And how much would that be for the full year, or was it in the past restructuring?

No. There is…

No, there is… Eric to that point there, there’s no material with one-time cost in there with fully covered any associated cost within the algorithm. So, we don’t expect anything significant going forward.

Okay. And then my last question quickly, corporate expense, I guess why was it down so much and would you expect the number to be for the full year?

Yes, we… I think as I mentioned we had some proxy contest costs last in the first quarter that we obviously didn’t have this quarter, so that certainly helped. But even beyond that we have been trekking a very hard line on G&A expenses and you see that globally those G&A expenses were very favorable in the quarter. I wouldn’t expect them to continue to be as favorable as what we seen this quarter but we feel good about where we’re going for the full year.

Okay. Very thanks.

Yes.

And Eric I just want to throw away in… I was looking back, Dave's comment was 7% and 9% expected OI growth for the year not 9% to 10%.

Your next question comes from David Driscoll with Citi Investment Research.

Hi good morning.

Hi David.

Congratulations on the nice start to the year. My question would be in Europe, how much of the sales growth was driven by the reduced trade promotion in Europe? I think you said the overall number for the Company but I apologize I didn’t hear the European ones specifically.

Yes we don’t typically talk too directly about each of the segments but the bulk of the reductions came out of Europe. So, that as you remember last year was more oriented toward reductions in the U. S. This year its much more about reducing trade spending in Europe and we are off to a head of a good start.

But would you expect that is where the bulk of these benefits will continue to come from, the trade reductions from Europe?

Yes for this fiscal year the bulk of those savings are coming out of Europe. So… but here again we wouldn’t anticipate that we will see that strong a reduction over the balance of the year. But as I mentioned we’re tracking well through our plan.

And then if I could pick this a little bit more because you have made a lot of comments on trade reduction and what the possibilities were in Europe. Can you just talk to us a little bit about the geographies and I am really trying to drive to the difference between the United Kingdom and your baby food base business and Italy. Was it… was the trade reduction… is it really due to one of those geographies and if so, which one?

No, I think we saw very good reductions in the U. K. and Italy as I recall. So, good progress there. That’s probably the toughest market for us from that and I regard as continental Europe particularly Northern Europe. So, I think if you think about the savings primarily U. K. and primarily in Italy.

On the new product front, that’s’ also a big portion for the story for Europe, can you talk to me a little bit about the impact of new products on a quarterly pattern? Is there anything… is it even throughout the year. Was the first quarter, perhaps the most important one from the new product standpoint noted in your release? Then you talked a lot about the new soup offerings in the United Kingdom, can you give us a little bit of guidance here on… sometimes it hard to really understand. You a launching like a 100 new products I think in Europe over all. But its hard to understand precisely the… how the quarterly pattern might layout from a dollar perspective. Is one quarter much more important than another?

No, not really I think as I recall across the Company, its pretty well level set across the business. Some you want to make sure that you want to get off early in the year if you got sorting the paper or something like that. But we have got very strong programs laid out for the second, third and fourth quarter. So, pretty much even I would think, David. And by the way congratulations to you.

Thank you very much I appreciate that. I have a few more fast questions for you if I might?

Okay.

First question is the marketing dollars, were they concentrated in any one particular geography? And then the second question is in your sales guidance what’s the embedded implication for foreign exchange within the sales guidance?

Yes, the marketing spending was up from across most of all of our segments that is we mentioned… primarily in Europe, I think about 50% increase was from Europe from a marketing standpoint. But all the other markets up as well. And you last question was?

Foreign exchange, what's the… given the sales guidance that the total number. Just give us a ballpark here. What’s your expectation for the benefit from that FX?

Yes, well we would expect FX to be around where it is now for the balance of the year. I think that’s roughly what we have forecast. I mean as I recall, let’s add it couple of points, 200 points or so to the sales forecast. Good news is that we are up on the organic business as well but and then getting a boost out of foreign exchange. Having said that, the boost form foreign exchange is dwarfed by the higher than planned commodity cost. So, it’s some external factors some dwarf and some minor.

Really appreciate the information guys. Great quarter. Thank you.

Thanks.

For those of you that don’t know David just got back from his honeymoon so thanks for joining us David.

Just for you guys.

Your next question comes from Eric Serotta with Merrill Lynch.

Good morning.

Hey Eric good morning.

Couple of quick questions here. First you mentioned some supply constraints or capacity constraints earlier. Could you give us some idea about what categories those were in? And whether there is any change to your capital spending plan as the results exposed to high class problem to have. But could you give us some detail on that?

Yes, I mean given competitive reasons I probably won’t get specific. But as you are seeing, we are generating much stronger volume momentum through the business across all of our segments. So, with that momentum comes a different problem and the problem is keeping up with demand. So, again a high class problem. And so, what we are working to do is to make sure that we are ready to meet that demand in an umber of markets. In particular, in the U. S. and in Europe we have got some areas where we want to quickly get some capacity and plates. Our capital spending will be… I think we have mentioned all along… will be higher than it has been over the past few years. Having said that, I think the 3% to 3.5% guidance on capital spending is probably still about ripe. Spending against both capacity related capital and for continuing systems investment.

Okay. And in another area, could you go into a little more detail about the competitive environment in the Italian infant feeding market? And I hate to kind of be the dead horse on this one it seems to come up on every call. But given the continued consolidation and the global infant feeding business, are you guys looking at that category any differently these days than you have been in the past?

Yes, good question. In terms of the competition and infant feeding, Numico with Mellon is obviously, a tough competitor in Italy. And we are appropriately battling back and forth on that. I think we have seen up until very recently some very, very aggressive promotional tactics on those parts. For a number of weeks, we have chosen not to match some of those very deep competitive price points. Choosing rather to compete on a consumer basis in terms of innovation and in terms of marketing. Having said that, if that kind of deep discounting continues, we will need to do. So, it’s a competitive environment, but hey everybody has got heavy competitors. And in terms of nutrition in general, I mean just stepping back we are the number three player in baby food worldwide when it comes to food even after the recently announced deals. Infant nutrition is open of the fastest growing categories on the food industry on a global basis. We have got leading share positions and a bunch of markets around the world. So, we remain very excited and very committed to the baby food business. And frankly, we welcome the competition.

Great. Well, good luck. Thank you.

Thanks.

Your next question comes from Terry Bivens with Bear Sterns.

Hi good everyone.

Hi good morning.

Two quick questions. Art, The gross margin I guess slipped a little bit. I was looking at the pricing, the volume is there, what would you say… how would you allocate kind of the head wind you saw in the gross margin sorted?

As you said the gross margin was slightly lower than prior year. And I think as we look for the full year, I wouldn’t expect a lot of growth in gross profit margin. Given the commodity head wind, I can just do the math on commodity headwind versus pricing. As we price up the cover, that will change our gross margin expectation. But if you think about the commodity in our headwinds as Ed mentioned, dairy and oils up over 20%. Sweeteners were double digit, tomatoes, packaging, beans all very significant increases. So, commodity cost increase in first quarter are probably around $50 million. So, it’s a very sizeable impact for the quarter.

Okay. So that’s really the delta there, right?

Yes.

Overhead?

Yes, Yes. I mean to be quite honest, I think we have all over the past number of weeks as this year has gone on. We’ve seen much higher tomato inflation than originally anticipated. Good news is we have it fully factored and covered.

Okay. And one on Foodservice. I’d like to get just a little bit better idea of where the portion pack weakness is. We were checking with our restaurant guys, the Quick Service seemed to be doing pretty good. If you can give us a little bit more color on where that weak spot seems to be?

Yes. I think just stepping back from Foodservice. Our organic sales in the business were up about half points. Overall, we look pretty good at the top line. We had strong branded results and ketchup was up almost 9% as I recall. To your point, the softer results were really in PPI and some of our smaller subs. I mean that relates to more of the product label business and we pack for the mid scale family restaurants and the casual dining segments, and those segments of Foodservice are having a little tougher time than some of the other areas. QSRT your point is quite positive, but as we look at the profitability in Foodservice it’s really very heavy commodity costs that disproportionably hit us in Foodservice. They basically have the same dollar impact to commodity costs as did the consumer products business and as you recall consumer product is a lot bigger. So, Foodservice impacted by diary, oil and film, and we probably had our toughest cost overlap in the first quarter from a supply chain standpoint. So net, net Foodservice is about as we expected.

Over time do you think you could get out of some of those co-packing contracts or do you kind of need those to help recover overhead?

Well, I think we continue to look at the profitability of our skews and of our customers and we’ll make whatever decisions are required. You might recall over the past six months or so we have got out of few of those unprofitable customers. So, we are continuing to take a hard look at it. The other thing as I step back from, I am excited about the long-term outlook for Foodservice. We clearly have some work to do in that business as we integrate not only within Foodservice, some of the subs that were acquired over a number of years we still got some integration work to do there. And as we integrate under David Moran’s leadership between Foodservice and CP. But there’s some teething pains as we do that, but I think that will be an important project as we get more cost competitive in that arena.

Okay. Great, and Thanks a lot.

Yes.

Your next question comes from Ann Gurkin with Davenport. Ann Gurkin - Davenport & Company: Good Morning.

Good Morning, Ann. Ann Gurkin - Davenport & Company: We saw a nice pick up and growth for the top 15 brands. Can you come on the biggest driver? Is it increased support for this brand innovation?

You know Ann, I think it’s all of the above. The answer is that we had some great innovation going on as I profiled. We’ve got some very strong, just, good strong sales executions, so good momentum in the business as we adopt greater talent. We have increased the marketing support across a number of our brands and keep continuing to do that. Ann, it’s all based again as I mentioned on better consumer insight. I think we’ve done much better job of really understanding the consumer, doing our homework, doing the analytics and then launching the right product and the right initiative and the right marketing, frankly behind those insights. Ann Gurkin - Davenport & Company: And well marketing expense is going to be a double digit behind the brands in ’08?

Yes, as we mentioned for the full year it will be up, double digit. Ann Gurkin - Davenport & Company: Okay. And then in terms of commodity cost I did not see meat listed. Is that because it’s not as much of a pressure as the others or we have you, a not realizing higher cost on that front. Can you comment on that?

Yes as I recall it’s up, but it just doesn’t make the radar screen in terms of one of those top six or seven items that are up. We’ve got so many different commodities that are up significantly but it is more impact but not huge. Ann Gurkin - Davenport & Company: And will sweetener cost be up in the same magnitude they were up in ’07 versus ’06.

So far, as I recall sweeteners were up. We’re looking at about 10% increase in sweeteners.

Yes. I think that will hold for the full year. Ann Gurkin - Davenport & Company: And you have taken an average of 2.8% in terms of price increases or are you going to need to increase prices in 2008.

What was that? Ann Gurkin - Davenport & Company: When you combine your commodity costs?

We have taken price increases and we plan to take additional price increases in certain markets, its just absolutely critical to cover this kind of commodity inflation. So, its just part of the business equation. Ann Gurkin - Davenport & Company: What’s the timing on some of those price increases

It will be throughout the year, there’s no specific timeframe that varies very much by market depending upon the customer and depending upon the country. Ann Gurkin - Davenport & Company: Okay. That’s great. Thank you.

Your next question comes from Chris Growe with A. G. Edwards. Christopher Growe - A. G. Edwards & Sons, Inc. : Good morning.

Hi Chris. Good morning. Christopher Growe - A. G. Edwards & Sons, Inc. : Hi. Just had a couple of questions for you to follow up here. First one. It looks like in the first quarter trade spending generated essentially all of your pricing. I think you said it was down 160 basis points and prices were 138 plus point benefit in the quarter. Is that… I’m starting to get… Is that correct.

It’s a portion of it Chris, you can’t completely directly correlate it, because in some cases we’re adjusting list prices, so you’ve got a lot of moving parts there. But it was clearly a significant portion of the pricing that we got. Christopher Growe - A. G. Edwards & Sons, Inc. : It was well beyond what you expect for the year. is it…, as adjusting your full year offset, but is there… is there something like in the back half of the year that could have altered that reduction in trade spending.

I think we will sort of reserve the right or the opportunity to go deep if certain competitors choose to go at us from a heavy discount standpoint. So we’re not going to count out any particular competitive approach that we have. Christopher Growe - A. G. Edwards & Sons, Inc. : Understood. And the last question that I have, just on your operation cash flow. We have it at the… was below the year ago in the first quarter, and you have it at the lower end of your range, everything else is at the upper end of the range. Its been encouraging, but is there again is that a drag for working capital through the year maybe or what would be the kind of the main items dragging operating cash flow down.

Yes. I think clearly cash taxes were up, but we’re looking to make sure that we spend the right amount of capital to support the stronger growth at the top line and I think inventory will run a bit high if we expect that to feather down over the year. But the reality is, where there’s much growth as we have, where there’s much new product activity as we have. I am waiting for the capacity to come on line in certain cases we’re going to compensate by a little bit more inventory. So that… it will be a main focus for us through the year. But, we expect again to be so that the end, lower end of our range there around the 825 mark. But we got a good strong track record there and we got some work to do. But we’re up for it. Christopher Growe - A. G. Edwards & Sons, Inc. : Okay. Great. Thank you.

Your next question comes from Pablo Zuanic with JP Morgan.

Good morning, everyone.

Hello, Pablo.

Good morning.

A couple of questions, Arthur. First just can you walk us through what’s going on in the frozen dinner category. We’ve heard from ConAgra, they are launching also new product. Hence, clearly, I understand because you got more promotional from a price standpoint. Just describe the environment in that category. I mean are you seeing a more price competition than normal or less, are you seeing a bigger ramp up on innovation or… just more color there both on frozen dinners and frozen potatoes.

Yes. We’re extremely pleased with what’s going on in the frozen products. Smart Ones continues to have tremendous growth and there’s no hidden secret there. It is just about better quality and executing better. It’s good effective marketing and operating and executing on the basics. So, we’ve got some new products, we’ve got better quality, better tasting food. They are right down the sweet spot in terms of the healthy and convenient things that we talked about. So, Smart Ones is running well. Boston Market is running extremely well and we had a solid quarter on Ore-Ida. The big news on Ore-Ida there is that we’ll be out of trans fat by year end. Again just like every other category not easy, but, if we’re doing the right thing, we’re executing our game, we’re doing quite well.

And just in terms of the space in the frozen aisle. When I look it seems that all the sales are coming from obviously more turnover. But are you garnering more space on the frozen aisle. I don’t see that going on or is it happening.

I’m probably not the best to ask on that. I don’t recall any major gains in terms of footage, but I think what we’re doing is, is getting better turnover out of the space we have primarily by better products that meet consumer needs. So, it’s probably more of a story of optimizing the space we have rather than adding spaces as best I know it.

Okay. And just a follow-up. Operating margins in Asia-Pacific, I mean, the jump there is quite good compared to that was in previous quarters. Is that type of jump sustainable, I mean, this type of 14% margins we saw this quarter?

On Asia Pacific? Yes. It was a heck of a quarter, no doubt about it. We saw just great results in India, Australia and a number of other markets. I wouldn’t count on that kind of growth going forward, but we feel very good about that segment and things that Chris Warmoth is doing. It is good blocking and track on back to the basics and we expect strong performance going forward.

Okay. And one last one. Just on the core infant food, remind us how big is Italy as a percentage of your total global sales of infant feeding? How big is Italy as a percentage? And then when we talk about China, how big is China for you guys right now? And put China in perspective, I mean, are we talking about the Infant feeding in general or is it just cereal, is it a very niche category? What about Dierberg [ph]? What about other competitors in China? Just walk us through the opportunity in China market share wise and category wise?

Yes, in terms of Italy, we don’t tend to breakout country’s specific data very much, but it is clearly our largest baby food business. I would say, probably less than half of the total roughly, but that would give you the sense… the magnitude. In China, so far we are leading player in the cereal business. That’s the strength of our business there in that category. We obviously are looking to play on a broader basis and given the magnitude that market, we think there is just some huge opportunities there. And we’ve got, unlike many of our competitors we’ve got a very strong distribution platform that goes past baby food into frozen foods and so we feel like we’ve got the platform, we’ve got the infrastructure and the critical mass in order to significantly grow that business and with Chris Warmoth and the team over there leading that I feel good about the prospects.

Right. Thank you.

And the other thing to keep in mind is that our biggest competitor in many of these markets is still homemade, and so it’s less of a share grab and more of how do you grow the category and how do you convince mom that she should be saving some effort and going with prepared foods.

All right. We are running out of time, one more please.

Your final question comes from Ed Roesch with Banc of America Securities.

Hi, good Morning.

Hi, Ed.

A lot of my questions they covered here. Just wanted to ask you, Arth, about the productivity initiatives you have, I mean you are closing these plants plant and you are well on track for your fiscal ’08 targets. But it seems like you are going to have some pretty good carryover from some of these initiatives into fiscal ’09, having savings on that carryover in the next fiscal year. So, if you could comment on that and then also maybe on how you are thinking beyond fiscal ’08? How on an ongoing basis each year? You want to have productivity play into your long-term targets.

Yes. Well, obviously we are… Edward having to run fast on the productivity side, given the commodity inflation and usually you would like to see productivity off setting commodity inflation. Unfortunately in this environment that’s just frankly not possible. I think that’s true of not only us, but our competitors as well. So pricing and productivity need to go hand in hand. I feel good about the various initiatives that are underway. We have got this supply chain task force under the leadership of Scott O’Hara working. And we are doing a lot of diagnostics there to understand our biggest opportunities and where to focus our time and attention. and I think the outcome of that will pay significant dividends in ’09 and beyond. Having said that we don’t expect the commodity headwinds to stop any time soon. So we have got to keep doing that in order to foot the numbers and the algorithm going forward.

And some of the actions that you are taking on plant closing and you should see some spillover in the next year where those savings will be incremental, I would suspect that?

Yes. I mean we are seeing savings from those in some cases are not large plants. So, it’s not real large, but the other key benefit and its hard to quantify is just the simplicity that it adds by reducing the supply chain footprint. We have less things that people need to keep track of, less distractions and we can focus on big plants in the big distribution lines, just try to optimize those. So, fish, where the fish are.

Makes sense. Thanks very much.

Thanks Ed.

Okay. Just before we close, I do want to give you a head ups and an opportunity to mark your calendars. Arth will be presenting at the upcoming Lehman Brother Back-To-School Conference in Boston on Thursday September 5. We got a 2:15 slot that’s Eastern. Of course and then Bill will be presenting at B/A conference in San Francisco on Wednesday September 19 at 8:30 AM and that’s Pacific West Coast Time. So, hopefully, we will see you there or you can dial in. We will be available for questions today in Investor Relations otherwise have a great day and a great weekend.

Thank you for participating in today’s H. J. Heinz Company conference call. This call will be available for reply beginning on 11:30 AM Eastern Standard Time today through August 31, 2007 at 11:59 PM Eastern Standard Time. The conference ID number for the reply is 7166147. Again the conference ID number 7166147. The number to dial for the reply is 800-642-1687 or 706-6459-291 internationally. This concludes today’s conference call. You may now disconnect.