David Moran - Executive Vice President, Chief Executive Officer of Heinz Europe and President of Heinz Europe Bob Ostryniec - Chief Supply Chain Officer and Senior Vice President Margaret Nollen - Senior Vice President of Investor Relations, Global Program Management Officer and Office of the Chairman Michael Milone - Executive Vice President of Heinz Rest of World & Global Erm Ehs Quality and Infant & Nutrition Christopher Warmoth - Executive Vice President of Asia Pacific business Arthur Winkleblack - Chief Financial Officer and Executive Vice President Bill Johnson - Executive Chairman, Chief Executive Officer, President and Chairman of Executive Committee Scott O'Hara -

Alexia Howard - Sanford C. Bernstein & Co., Inc. Andrew Lazar - Barclays Capital Vincent Andrews - Morgan Stanley Christopher Growe - Stifel, Nicolaus & Co., Inc. Jonathan Feeney - Janney Montgomery Scott LLC Terry Bivens - JP Morgan Chase & Co Robert Moskow - Crédit Suisse AG Bryan Spillane - BofA Merrill Lynch Unknown Analyst -

Good morning, everyone. Shall we get started? I'm Meg Nollen, Senior Vice President of Investor Relations and Global Program Management Officer for the H.J. Heinz Company. I'd like to welcome everyone to our 2011 Analyst and Investor Day. For those in the room, all of your conference materials are included in the folder in front of you. We have fun little gift in the front of the folder, a magnifying sheet. And I'm sure it's sustainability that's driving the tiny font these days, not my eyes. But you can always be sure to see the details with Heinz. So each speaker's presentation is separated by tabs. The agenda for the day is on the flip side of my page, also up on screen. Updated financials, statistical summaries are also in the back of your packet. We've got a 5-year financial and sales history for you. For those of you on the simultaneous listen-only call or webcast, the presentation and stat pages are also available on our website at heinz.com, in the Investor Relations section. Of course, you have to attend our meetings to get all these fun gifts. Please note our 10-K will be filed in a couple of weeks, so cash flow and balance sheet pages won't be updated until that time. We've got a great morning planned for you, starting with a strategic overview by Bill Johnson. Art Winkleblack will then provide a financial walk-through of our F '11 results, our FY '12 plans and the resulting FY '13 targets. Bob Ostryniec will take us through our global supply chain and productivity plan, while our Regional EVPs will focus on growth, innovation and productivity in their respective areas. Our schedule today is, as usual, very tight, so let me lay out the parameters, so you can be prepared…

Thank you, Meg. Good morning to all of you, and welcome to our 2011 Investor Conference and Analyst Meeting. Our purpose today is to update you on our performance and provide a detailed overview of our plans to drive strong, sustainable and profitable growth over the next 2 years and beyond. As most of you know, I'm a son of a head coach, or was, before he passed away. One of the things my dad used to say to me is when people think you're just going to keep going right, do something different. Today, what we're going to show you is a little different, designed to continue to create the kind of value that we've created. So I'm going to review the record performance the company had in fiscal 2011, our plan and financial outlook for both 2012 and 2013 and the long-term vision for Heinz, which is designed to build on the great success we've had over the last 5 years. Looking first at the fourth quarter, we finished a record year on a good note. We posted constant currency growth of almost 3% in sales, 9% in operating income and 12% in EPS. We achieved the double-digit EPS growth, while absorbing a $0.01 hit from the strike in Venezuela and $0.02 of costs related to closing the Quero acquisition earlier than we anticipated. As they were all year, Emerging Markets were again the primary growth engine in the quarter, delivering organic sales growth of almost 12%, despite a significant reduction in Venezuela. The company's top 15 brands also continue to do very well, with organic sales growth of almost 3% led by Complan, ABC and Smart Ones. Encouragingly, the U.S. Foodservice business returned to growth for the first time in 6 quarters, a hopeful sign that restaurant…

Thanks, Bill. Good morning, everyone. Now this morning, I'll take you through our Q4 annual results, which capped off a very strong year and an excellent 5-year run. After that, we'll review our plans for continued growth over the next 2 years. Let's focus first on our strong finish to fiscal '11. For the quarter, we delivered $2.9 billion of revenue and EPS of $0.69. On a constant-currency basis, sales increased about 3%, gross margin gained 100 basis points, operating income rose approximately 9% and EPS improved nearly 12%. These strong results were leveraged to even better reported results, as currency turned in our favor at the end of the fiscal year. Marketing was down in the quarter but in line with our expectations. And remember that we lapped a very high increase in marketing spending in Q4 of last year. Overall, we're pleased with our Q4 results, particularly in light of the costs we incurred for closing the Quero deal in Brazil and the strike-related impact in Venezuela. Now speaking of Quero, this chart outlines the impact of the acquisition on our Q4 results. We closed the deal on April 1 and incurred closing costs out of $11 million and a few weeks worth of foregone interest income on the cash we used to buy the business. We recognized no sales or operating costs during the quarter, as we were consolidating the business on a one-month lag basis. Now turning to Q4 sales drivers, the company delivered its 24th consecutive quarter of organic sales growth, up 1.6%. Net pricing was up almost 2%, which is our highest level of pricing in 1.5 years. Volume decreased slightly, as Venezuela negatively impacted total company volume growth by 80 basis points, largely reflecting the impact of our labor disruption in that country.…

Thanks, Art. Good morning, everybody. As Bill has once said, one of the keys to driving sustainable growth will be our ability to leverage our global scale and drive productivity across our portfolio. We have significant Global Supply Chain initiatives underway, including Project Keystone and the productivity initiatives that I will discuss further. Heinz is taking a truly global approach to reducing costs and growing margin to become even more competitive. Frankly, this is a step change for our company. And it's an important one that we believe will produce tangible improvements in costs and margin and rapid return on investment. With that in mind, my remarks today will focus primarily on 4 topics: our success in driving productivity, margins and cash in fiscal 2011; our outlook for commodities; our Global Supply Chain structure, and how it is evolving to support growth in Emerging Markets and our strategic goals; and our key initiatives to drive productivity on a global scale. Turning first to our performance in fiscal 2011. Supply chain delivered an excellent results. We drove 3.5% productivity. We increased our gross margins by 70 basis points, and generated record operating cash flow of $1.2 billion. Turning to commodities. There's no question that productivity was a major factor in our ability to grow margins despite rising commodity inflation. As you can see in fiscal '11, the CRB Index jumped by 1/3, driven by a combination of higher commodity costs and decreased packaging supply capacity. Heinz was not immune to this trend, as we experienced inflation in dairy, resin, sweeteners and oils last year. However, those increases were partially offset by lower cost of tomatoes and potatoes and mitigated by our accelerating focus on supply chain productivity. Looking ahead, we expect higher inflation rate of 7% in fiscal 2012 for our…

Thanks, Bob. It's great to be here today to share our growth story in North America. Despite a tough economic environment, we continue to deliver profitable growth, with solid underlying business performance, a robust innovation pipeline focused on our 5 strategic mega brands. We are implementing pricing as needed, given commodity inflation. And we have expanded our focus on capabilities and platforms across our entire North American business. Here's a quick snapshot of Heinz North America, which includes the U.S. and Canada. Overall, North America represents about $4.7 billion of sales, 8,500 employees and 24 factories. And as you can see, most of our sales were generated by 2 categories: Ketchup, condiments and sauces, and meals and snacks. The Infant Nutrition sales you see here are highlighted from Canada. The North American Consumer Products represents about 70% of our sales for the region. Our 5 strategic mega brands are led by the Heinz brand, which includes our flagship ketchup, in addition to Ore-Ida, Smart Ones, Classico and TGI Friday's. Overall, these brands generated more than 70% of our sales. Our core brands in Heinz North America -- Consumer Products are powerful. We're strong #1 or #2 brand positions. Together, these brands accounted for about 75% of our retail sales. In addition to our brands -- in addition, our brands continued to perform very well. In the latest 52 weeks, our 5 largest brands in the U.S. are growing share, and in Canada, 90% of our brands and products are also growing share. North American Consumer Products continued to achieve excellent results in fiscal '11, with profitable growth in sales and operating income in a challenging environment. And in Foodservice, despite continued softness in the top line, operating income was up almost 17%, driven by a 180 basis point improvement in…

Welcome back, everyone. I'm very excited to talk a little bit about the European business and a pretty exciting transformation that we have going on in Europe. But we are confident that this substantial redesign will improve our structure, our work processes and importantly, dramatically increase our results as we go forward. The good news is we're making these changes from a position of strength. As you heard from Bill and Art earlier, the results in Europe last year were really strong. We grew sales, we cut our deals and allowances, we grew our gross profit margin by 180 basis points, we increased our marketing by 6%, we grew our operating income by $50 million or 9% year-on-year, and importantly, we increased our ROIC by 120 basis points, all in the very difficult European environment. I'm also pleased to report that our brands are healthy, and the team is fully aligned in the new plan that you're going to hear today. The plan you'll see today should produce substantially improved results over the next 3 years. Volume from NPV will increase from our historic 1% to 5%. Deals will continue to decline, our gross profit margin will expand by hundreds of basis points, operating income will increase in a very high single digits and ROIC will grow by over 500 basis points over this period of time. The change elements you're going to hear about are quite expansive, but I believe they're worth the effort given the financial return. Before I go deeper on the agenda, I do want to comment on the trading environment in Europe because it is very challenging. We expect to see an uneven recovery around the globe and even in Europe, but our silver lining is in Eastern Europe, where both Russia and Poland have…

Thanks, Dave. The Emerging Market opportunity is big it actually takes 2 of us to present, but I'll kick it off. You can see from the map that these markets span a wide geographic territory. In FY '11, they accounted for $1.7 billion in sales for Heinz, and it's not unreasonable to expect they could grow to $5 billion by FY '16. The reasons for our optimism are simple. First, the emerging markets are more demographically advantaged. Starting with the basics, they have a greater population and more births. We enjoy a rapidly growing middle-class, estimated to grow 70% over the next 5 years. This amounts to an additional 460 million new middle-class consumers or nearly 2 times the adult spending population in the United States today, age 14 plus. These fundamentals translate to a higher GDP growth and economic development and more opportunities to sell our products to more people in more markets. The macroeconomic forecasts are startling. Everyone's heard reports that China will soon be the largest economy in the world. But taking a look at 2050, it's expected that 6 out of the top 10, really 6 out of the 8 top economies will be those that are considered emerging today. Heinz is well-positioned for this future. Emerging Markets are also attractive from several operating considerations. For one thing they have a highly fragmented trade environment. This chart shows the concentration of the top 5 retailers in a number of developed markets in the red and Emerging Markets in green. This will of course change overtime, but with less trade concentration, there's more of a mutual balance of power between suppliers and retailers in Emerging Markets. Not only is the trade environment more fragmented, so is the competitive environment. You can see from this slide that there's…

As Mike has just said, India and China are indeed critical for Infant Nutrition. And the positive news is that in both countries, we have real momentum and see major potential going forward. In India, Complan is a great growth story, up 3.5x over 5 years, with sales in FY '12 expected to approach $200 million. Complan has high applicability or relevance through its excellent advertising campaign which started in FY '05. We've now made over 20 spots in this campaign. We've also had a constant stream of new products, the biggest being the saffron and almond version, Complan Kesar Badam. More recently, we've introduced Complan Nutri-Gro and Complan Memory. Both are now in the middle of national expansion and adding significant extra volume. Memory goes on a clinically proven fact that kids with insufficient nutrition have poorer cognitive responses. Nutri-Gro is a down-age Complan targeted at kids 2 to 4 versus the base of 4 to 14. The advertising builds on a common Indian concern that young kids don't look their age with a nutritionist explaining that sickness and fussy eating can impede growth. [Video Presentation] Complan, along with our second brand in India, Glucon-D, has also grown through deep and ever-improving availability. The left axis here shows the number of stores carrying the brands, with Glucon-D with over 1 million and Complan now nearly 600,000. The percentage above the bars shows year-on-year distribution increases. And that's significant on both base products and especially new ones. Moving to our Chinese Infant business, FY '11 was a very good year. We're making consistent progress on infant formula. A critical measure is how much our distributors sell to retailers, and it's growing very steadily. Distribution is in line with our target, and we're learning over time. For example, we were surprised…

As you're likely aware, we've completed the acquisition of Quero in April after reaching an agreement to buy the company just a month earlier. Quero is a leading brand of tomato products, ketchup, condiments, vegetables and seasonings in Brazil, with annual sales of approximately $325 million in 2010. We are extremely excited about this acquisition, as it's our first meaningful position in Brazil. As you can see, Brazil is an incredibly important market, an opportunity for Heinz in Latin America based both on population and GDP. Beyond Latin America it's the fifth largest market by population and ninth largest by GDP globally. Quero was founded 26 years ago in São Paulo and has been growing at a rate of 13% between 2005 and 2009. Sales were basically flat in 2010 due to capacity constraints. This is well on the way to being rectified and is just one reason for our confidence in the growth opportunities in Brazil. Sales product mix is an area that are very well known and familiar at Heinz. Tomato products and condiments represent 55% of the business and vegetable products, the remainder. We feel that Quero and Heinz are a terrific match. You'll see that whether it's branding, capabilities and organizing or executing the 3 As, this is a great fit, truly buy-and-build in action. Touching briefly on each of these points. There's are leading local brand holding the number one or number 2 position in each of its key product categories. Note the small and growing position that Heinz has established in Brazil with ketchup. In fact, our FY '11 exported tonnage of the Heinz brand in Brazil was up 71% and net sales more than doubled. This was achieved although focusing only on the modern trade, with a very premium-priced product. Quero brings great…

Thanks Mike. The addition of Foodstar has nicely rounded out our portfolio in China. We now have substantial entries in all 3 of the company's core categories. Foodstar has 2 brands; in soy sauce, Master or Weishida in Chinese and fermented bean curd, Guanghe. Soy is a huge market. And in FY '12, this business should be approaching a $150 million. Master soy sauce competes in a premium segment called Weijixian. But it's still affordable with a small bottle costing under USD 1 and significant sales coming from the 1.6 liter value pack. Guanghe bean curd will last many weeks and costs just $0.72. We completed this acquisition in November, and it's off to a very fast start. In the 12 months prior to the acquisition, sales were growing 12% per year. In our 6 months, this has accelerated to 22% with all key segments growing strongly. This accelerated growth reflects the benefits of various activities we've undertaken: organization, efficiency builders, distribution, and advertising. On organization, we moved to integrate Foodstar quickly but did so carefully. The management team today is a healthy mix. The Managing Director comes from Heinz Russia. We have several people from other Heinz businesses in China. We made a couple of external hires in China, and the biggest group is those who came with the acquisition. Foodstar's heartland is the 2 provinces of Guangdong and Fujian. In both, we've already significantly increased our distribution and our promoter penetration with plans to increase further in FY '12. We've also just started to advertise Master using the insights of the little boy so proud of his mom's cooking that he invites his little girlfriend home to taste it. [Video Presentation] For FY ’12, we have 5 key priorities to ensure we maintain healthy growth. First, the modern…

Just a few comments. I think, in general takeaways, solid fiscal ’11, increasing the dividend, great strength in emerging markets, enormous talent including some people you haven’t seen today that many of you were exposed to last year and very optimistic about the future, both in our developed markets and our emerging markets. I mean, we feel this company is hitting on every cylinder. In restructuring or the initiatives that we're calling productivity initiatives. You noticed, by the way, there is no name. There will be no name. These are just individual productivity initiatives, will set us up for what we see as a really good run over the next 3 to 5 years. So, I think, you've been exposed to a very capable team, probably in my view, certainly the best in the industry. And certainly, the deepest and most experienced and more importantly, the most stable. We've had very few changes in our senior team over the last 5 or 6 years. So I think with that, we'll open it up to Q&A. We've kept you right on time. As you can imagine, Meg is a big reason for that. I think she broke 7 sticks this week, beating us all over the head. And you all see the nice side of Meg. You don’t see the other side of Meg.

All right. [Indiscernible]

Jon Feeney at Janney. Mike, in your emerging market presentation, you gave the -- off the gross margin for the emerging markets versus the Heinz average. I just was kind of wondering if you could give us some sense of what the operating margin looks like, some of the SG&A differences between the 2 businesses? And related to that, tying it back into with Art's comments, I mean, it looks like capital expenditure by the end of fiscal '12 in your guidance will have about tripled going into emerging markets. Kind of what sort of return profile are we looking at in an aggregate basis and going forward? So, operating margins and returns in those emerging markets versus the rest of the business?

Well, it's tough to generalize because some of our markets are as high as profitability in any other market. Indonesia and India, for example, are extremely profitable. We've been there for a while, but in general, once you get below the gross profit margin line, we're obviously spending more on marketing. We are spending a little bit more on sales and distribution. I think, on the whole, G&A is on about par, maybe a little bit higher. We expect to be able to get some efficiencies there over time. I think, if you look at the history, there is no question that the operating margins are lower, but they've been increasing at the same kind of pace. I think that shows in some of our aggregate numbers from the regions. So, good prospects for continued improvements. In terms of the return, we have a new asset base. So the assets aren't as fully depreciated in some of the other markets, but they're high.

Generally, our returns are higher in emerging markets, because we got growth. I mean I'm -- always, when I go out with investors one of the questions we always get is are these markets profitable? Well, you don't grow the way we've grown at the bottom line without these markets being profitable. And they are very profitable, but in some cases, we've opted to invest more aggressively than in others. But certainly in the case of the 2 markets Mike mentioned that I had preferred he not mention, those are very profitable markets. If we look at a couple of others, we've been very clear on Russia, for example, over the last few years that we're investing to make sure we win in ketchup. And we are winning in ketchup. We now have a very strong number one position in ketchup and condiments and in ketchup itself. We're number one in dry baby food and we're number one or are going to soon be number one in beans. And so I think as we look at these markets, we will continue to invest differentially because we're getting different growth out of them. We're getting much better growth, disproportionate, but we are making money in all these markets. We are cash flow positive in all these markets. The margins over time will equilibrate with our developed markets. If you look at our portfolio and you break it into parts, you look at it in 3 parts. We have 3 segments of gross margin. You obviously have the United States, the U.K., Italy and a few other markets that have top tier margins. Then we have our emerging markets. Then we have some of our other developed markets below those emerging markets. So I’m always amused by the question, are emerging markets pulling your margins down? If anything, it's the markets where we struggle more with the consolidated customer base. So I think over time, the emerging markets in terms of driving profit and in terms of driving growth will far surpass anything we have ever seen in the developed world.

Keep in mind, these capital projects all stand on their own. So they each have a discounted cash flow model behind them. And so if they don’t return well better than the weighted average cost of capital of the company, we don’t do the project.

Yes, one more comment on capital, I don’t want to leave anybody with a misimpression we're only investing in emerging markets. You've got huge investment, one of the largest capital investments we have ever made in the aseptic launch in Italy and the U.K. It’s huge investment. In fact, I’m going over there in 2 weeks to look at the investment in Latina. We've got the opening of the factory in South Carolina in Florence to support frozen, which is the most expensive factory the company has ever built, opens in a couple of weeks. We've just filled the employment and the factory is shaping up pretty well. The keystone investments being made predominantly in developed markets are significant investments of capital and then, obviously, Dip & Squeeze, where as Scott mentioned, we are out of capacity. We're at 2 machines now, soon to add a third machine because if we don’t we will not literally be able to keep up with demand. So we spread our bets as carefully as we can against opportunities that will give us the greatest return, and I think the team has done a pretty good job. Now put yourself in my position with all these guys in my office asking for marketing and capital, it makes for some pretty interesting discussions. We've got some dents in the wall from where my shoes missed them and hit the wall. We've got a few other areas of opportunities that all these guys would like to invest in, but I think generally we do a pretty good job of diversifying our investments across the portfolio.

Terry? Terry Bivens - JP Morgan Chase & Co: My question is for Chris and Bill. It kind of leverages off your comment about some of the developed markets with the lower margins. Clearly, a lot of enthusiasm for the stock is based on some of the growth that we expect to see out of Asia, but at the same time, we have this anchor in Australia. Can you bring us up-to-date on what's the latest with the Coles-Woolworth price war? And I think more importantly, how do you guys -- if this thing keeps going on, how do you plan to change the business model there to adapt to that?

Terry, I think we assume the climate will continue. It is a very tough climate for the reason you said. And we are now reshaping our whole business to succeed in that environment where innovation is going to be critical, bringing new insights to the retailers. I think we've learned a lot from our U.S. colleagues in terms of techniques and tools, whereby you actually bring the retailers' shopper insights, category insights, which may give discipline, but also ensure they come up with the right answers. And we announced this morning the restructuring projects, we said some would be in the Pacific. That would include Australia. So we're sharpening our cost base. We operate that region as Australia, New Zealand and Japan together. There is a lot of mutual supply interdependency. So we can actually become quite a lot more efficient by taking that one step further. So we're well down the path on all of that. I think, we're assuming the situation will continue, and Metcash is the number 3 retailer, and they're pretty small. We don’t see Coles and Woolworths going anywhere, so we’re adapting to that environment. We have a very strong brand in Heinz. We have a very strong brand in Golden Circle. We have an organization with a long history. We've put in quite a lot of talents from other markets. I think, as these things come through, Australia can be a good market for us.

Yes, I think, the 2 other things to keep in mind, one is factored into our outlook. And we don’t look for a turnaround in Australia, and it's factored into our outlook. I think, the second thing to note is we put the individual in charge successfully in charge of New Zealand in charge of Australia. He is used to dealing with a consolidated customer market of 2 customers, including Woolies, which is one of those customers, but there is no doubt that in terms of retail environment, the Australian market is the worst market, and ultimately the people that will pay the price over there are the consumers because products will ultimately be devalued to address the price points that customers are asking us to address. So the consumer is going to ultimately be the big loser in Australia. But we have factored in mediocre results from our Australian portfolio. And you got to remember, we're talking about 7% of our sales. And basically, over time, probably 6% or 5% of our sales. So we’re not talking about a big piece. The portfolio is very profitable in terms of the bottom line. It's just not an opportunity anymore because of the fight that's broken out between Coles and Woolworths. And it's really a shame because, again, I think ultimately, the people who will pay the price is the Australian consumer, who will be served in a poor way, I think, with poor product selection long term.

Chris? Christopher Growe - Stifel, Nicolaus & Co., Inc.: Question for you regarding Europe. I guess, it's also for Dave. I was curious, 2 aspects to Europe, one being, there is a planned reduction in D&A spending, which I think you've tried before. I know, it's a tough market for that to occur. So I was curious how you see that playing out over the next several years. And then also to understand the operating profit growth there, which is a very robust growth rate over the next several years. I assume part of that's cost-saving driven, but also you are expecting some strong top-line growth as well. So I'm just trying to understand those 2 pieces of the Europe outlook over the next several years.

Okay. You've heard me say this before that I believe retailers put manufacturers in 2 buckets. The bucket of I'm going to negotiate dollars and cents and pennies and extract money from you, or we're going to use you to help grow our category. And we are trying to move some of our businesses away from the former to the latter, which is done via innovation and new ideas. The innovation pipeline for Europe is growing. It's not perfect yet, I think when we get the innovation center up and running, it will be a fabulous addition. But the teams are already responding beautifully to the mantra. And we're making great progress there. We've been pretty open with our retailers. We've had these types of conversations of you view us in this bucket, we want to move to this bucket, and here is what the benefits are. And we're being pretty successful. Last year, especially Q2, Q3 and Q4 in terms of D&A, was down very substantially across Europe. We had a bad first quarter, so that moderated the year, but we took out roughly 100 basis points, give or take a bit, on a full year basis last year. This year, we're looking for about the same, maybe a little bit less. And that will grow as we replace deals with ideas, concepts, and new innovations. So we sell more product off the shelf at full price. The operating income is really a function of that. We're blessed with glorious brands. We have a couple of businesses that have epic status, 80% share, 70% share, wonderful gross margins. The consumer loves our brands, they’re very responsive, and we’re pumping more and more marketing money into the European environment trying to sell more product off the shelf at full price, I mean, that really is the backbone of raising the operating income on an ongoing basis. And I do think the team is really terrific at managing the middle of that P&L. SG&A has kind of been directionally flat for a long period of time. I think, with some of the supply chain changes in distribution, that will even improve as we go forward.

Well, I think, the other thing you are getting is a huge pick-up in sales mix. You've seen the growth in ketchup across Europe, one of our most profitable businesses. The Italian Baby Food business has done well over the last couple of years, driven by innovation. So we're getting a real mix shift in Europe that I think will benefit us long term. And I think -- I want to echo one of Dave’s points. I will stack our European management team up against anybody’s. They are all locals. They understand the consumer. They understand the customer. And Dave Woodward, in particular, in the U.K. and Roel van Neerbos and his team and Stefano Clini, who runs Italy, who’s actually sitting in the back of the room, absorbing all of this. For what purpose, I’m not sure. But he asked if he could come, and he was in the country, and I said sure. But I think generally, we just have a terrific team, who's done a very good job of managing in a difficult situation. And one last thing, no one has a greater passion for efficient deal spending than Dave. He proved it in the United States, he’s proving it there. With commitment and focus, you can manage this process. It does take great brands. And where we don’t have strong brands in Europe, we've lost some distribution. So it is a function of having great brands, but with passionate leadership, who are committed to making this happen. And I think the European team has done a damn good job of rising from the ashes and driving pretty darn good performance.

Definitely. Okay. David?

Well, I have 2 small questions. In the stores where you've already removed Boston Market, and I think there have been some, what have you seen in terms of the shelving and where you sense the consumers are making substitute purchases? Obviously the implication is that, that 2 points may not end up being 2 points because you get your stuff in front of the consumer. The inflation last year -- a separate question on inflation, you said it was 5%, but really to Heinz, it was 1% because of some -- this year, it's 7%, but really, to Heinz, what is it this year?

You want me to start with Boston Market?

Sure.

So the Boston Market distribution -- as we made the decision to exit the relationship has -- you've seen it start to lose distribution over really the last 9 months. And it sort of stabilized where it is today. And then we'll exit that relationship completely on June 30. So until we launch T.G.I. single-serve entrees, the other full-calorie meals were taking that space. And the retailers were making that choice with those other suppliers. Clearly, with T.G.I. Friday’s going into that space, there's an opportunity for us to look at the entire area, and we're doing that. So over the past 9 months, not a lot of it came to Heinz because we weren't really competing there other than in our multi-serve, which is typically merchandised in another area. As we bring out our new single-serve product then that may be an opportunity.

Yes, I want to clarify that. We are not taking the product off the shelf. We are exiting the license. The retailer is taking the product off the shelf. We are not going in, withdrawing the product from the market. That is the retail decision as we exit the license, somebody else has assumed the license, and we wish them good luck with it. But we are not, we are not forcibly removing the product from the shelf.

In terms of the commodity costs, to your point, Bob and his team did a great job in fiscal '11 taking that 5% of market inflation. And really for us the net impact was around 1%. As we look forward in the next year, we're looking at market inflation of around 7%. We hope to beat that a bit. And we'll see how that goes. But I wouldn't expect such a big gap as we look forward as we got in fiscal ‘11. But we'll keep you posted as that unfolds.

Okay. Rob? Robert Moskow - Crédit Suisse AG: Rob Moskow, Credit Suisse. Two very different questions. The first, really for Bill. This is the most progress I think I have heard about moving away from the country model and into more of a centralized type of management style. You have an overlay of management now in Eastern Europe and also in China. And I wanted to know, do you feel like the organization is responding well to that shift? And how will you keep track about the cultural change there? And then secondly, just kind of tactically, Walmart is probably moving faster and faster towards organic products, environmental sustainability. And I think we brought a lot of their suppliers with them and the relationship you have with Coke sounds like it's right down the heart of that. When you launched this product in first quarter, how are you using that to expand your merchandising with Walmart, and are they embracing it like you probably hoped they would?

Let me talk about the transition of the company or the evolution of the company to more of an integrated model. If you caught the 2 comments I made in my opening statement, it was basically about globalization and scale. We are now a global company with a global supply chain. We have global procurement. We are moving talented people, the appointment of Dan Milich in Eastern Europe and Hein Schumacher in China into position, leveraging experiences to do 2 things: one, help the company continue to assimilate and grow in these markets; and 2, to help the individuals continue to grow and develop as they become opportunities for long-term management in the organization. I would say, generally, I was in China, Vietnam and Indonesia recently. I was in Turkey a couple of weeks ago. I'm heading for Europe in a couple of weeks. The way I measure it, I go visit them, and I talk to them and I talk to the people. And I did a town hall meeting with the Foodstar and Baby Food employees in China. I'm doing a town hall meeting in Italy in 2 weeks, 3 weeks. So, I go and I talk to the people. The other thing that my CEO Academy has done much to the chagrin of everybody sitting up here, I bring 3 or 4 times a year 9 mid-level, incredibly promising people to an offsite location, me and them. And I have an HR person there, whose job is fundamentally to facilitate and make sure we stay on time. And we did 2.5 days. What that has done is opened a live pipeline of communication between me and the mid-levels of this Company that is truly extraordinary. And as I said, tends to drive these guys nuts because I…

Rob, on the PlantBottle, a couple of things. Number one, obviously, we're working closely with our partner, Coke, on that, and they're building out capacity to produce more of the resin that we need to make the PlantBottle. And they're expanding that within their own product portfolio, as well as us within ours. So we're going to start with one SKU in retail and one SKU in Foodservice. On the Walmart-specific question, it's important to them. Sustainability is important to Walmart. It’s also important to many other of our larger customer. So they're all excited about it. It will be one SKU in the range to start. It will grow over time as the raw material has availability. We had a choice to do more SKUs in retail and exclude Foodservice. But we really felt like, strategically, it was important to get into the Foodservice environment. If you think about it, you'd have this great Heinz ketchup bottle on all of these restaurant tables, creating all of these impressions, communicating the PlantBottle story. And so it's going to create a lot of awareness. Coke is excited about that exposure that we can provide. And so that's the plan, ultimately though, it will grow over time. And the trade has been great. They really love it. It ties into the things they're doing. And quite frankly, the things that we're doing and Coke is doing. But beyond that we've got the mineral tray for Smart Ones, where we have breakthrough technology. We've got lots of opportunities in sustainability. We set out specific goals about 3 or 4 years ago. We're among the first to set them out. We're surpassing all of them. We've got a lot of activity going on sustainability, and in the whole area of organic in terms of the way it relates to greenhouse gas emissions and water and so forth. I mean, one of the things we do is we try to measure water. We try to measure utility usage, we measure waste. We measure all this stuff at the plant level around the Company. And we have made enormous progress. In fact, I would stack us up against anybody. Mike Milone leads this initiative for us globally. It has been an extraordinary success, something the Board is very excited about. This morning, for example, on our Micronutrient Campaign, Lucy Liu was on -- who represents us was on -- I guess she was on the Fox News this morning. And she's been on Good Morning America. And just last night, she did something very unique, which I won't -- we'll show you later -- I don't think we'll show you today, but we'll show you later with -- I guess it was Crosby and Nash on the Fallon show. The Fallon show has been very good to us. You saw the Bagel Bite spot, Meat Loaf, apparently, loves Bagel Bites. So we'll send him a supply just to keep him excited about the business, so...

If I could, one other comment on sustainability. A lot of the stuff that we're doing may not be obvious. For example, that package in front of you, it's not just the package, it's also what's in it. We have a very extensive seed program that develops our own proprietary seeds that are highly water efficient, high-yielding, and it makes a very large impact that our customers are well aware of.

All right. Andrew?

Bill, 2 questions, one with respect to the earnings growth rate, the long term growth rate going to 7% to 10%, what’s the underlying rate of organic top line growth embedded in that? In other words, is the increase in long term earnings growth driven by now a higher level of expected organic sales growth? And then the second one would be, the industry, as well as Heinz, has moved away over the last 5, 10 years from a lot of the big bang kind of restructuring charges to more of the metering it through and absorbing in the P&L. You've gone away from that with this more recent productivity measure. But my sense is there's a lot behind that. And I’d love your perspective on it. Is it just the new normal or a new reality around where we're at? And we need to kind of ramp up and accelerate cost saves? I'm sure there's perspective that would be helpful to get behind that thinking.

Well, let me take the second one first. We tend to lead things. We tend to get beaten up a bit for leading them, and then eventually everybody else follows. And if you go back to emerging markets, emerging markets, the question from everybody, why in the world would you go into Indonesia, why China or why India? 20%-plus of our sales next year. And I want to make that clear, it is 20% plus of our sales in this year. And I'll get to the organic sales underlying the earnings. So my own view is that all you have to do is look around the sales around the globe, particularly in developed markets to understand what's supporting that sales growth. Demand looks for capacity, capacity looks for demand. We, as a company -- I won’t speak for the industry, we, as a company, think we can do more productivity. We can do better. We can supply the needs of our customers without the capacity we have, and rather than extend this over 3 or 4 years like we have been doing over the past couple of years, we've been taking a factory or 2 out every year. Felt the opportunity was now to make a quantum leap in productivity by freeing up the capacity that we don't need and moving it into other areas. The second thing that you are seeing, the world is shifting. And I sort of sit back and I reflect on this. I have been in this job a long time, and I have made more than my fair share of mistakes. But the one thing that I think we have seen very well is this shift that's occurring from the developed world to the developing world. Now we can all fight it. We can…

For the M&A.

Andrew one final thought on the why now in terms of the productivity initiatives, the other thing we wanted to not do was as we roll out Keystone, I’d rather not spend the money to put Keystone into plants that we don't want long-term. And so to the extent we can simplify and streamline the footprint now, that will help us in terms of the Keystone process going forward.

Bryan?

All right. Just a follow up on Andrew's question. In terms of the long-term growth algorithm, especially since it's going up on EPS as well, are you expecting that the contribution to operating profit, to earnings from developing markets to accelerate over that time period, is that part of the logic between to raising the long-term earnings?

Absolutely, I mean, this year, operating profit from the emerging markets outpaced that from the developed markets. So, over time, as our investments start paying off and as the capital gets in, allows us to automate and improve efficiencies in those market, drive returns, and as our marketing continues to drive growth, we are absolutely expecting profit growth out of the emerging markets to outpace those of the developed markets. But we're also getting a lot of the productivity benefits from Keystone and some of the initiatives that we'll outline more fully over the coming months in the developed markets. But absolutely, we're looking for disproportionate -- and I said it in my comments, disproportionate sales and profit growth from the emerging markets.

How much did it contribute to the growth this year?

Operating income, cutting through everything in emerging markets grew between 8% and 10%. And we've said 8% as a base, but it grew between 8% and 10%. Well, the company's operating income was up about 7% on a constant-currency basis, give or take, so you can see the benefits we're getting out of emerging markets relative to the developed markets. And part of that, as you saw, what Scott is doing, you saw what Dave is doing, but you also saw that the impact we're getting on Australia and New Zealand where we've been down a bit, so I think generally, the outlook is guided greatly by our success in emerging markets. I have to tell all of you and again, I know you get tired of hearing from me, and I've been preaching some of this on for 14 years. Don't underestimate these emerging markets. And I still think it's being underestimated by a lot of the market. And if you look at one of the things we have done choicefully that, I think, differentiates us from everybody else, we are almost equally spread among the 5 BRIC markets and Indonesia. We have not made one huge bet in any of these individual markets purposefully. And while everyone may be chasing Russia or China or India, we're chasing them all because the opportunities in these markets are significant. And like anything else in life, we're going to be right in many of them. We'll be wrong occasionally in one of them. And so we want to diversify and spread our bets. But I will tell you that over time, we've got the 30% algorithm over the next 5 years. We'll be every bit of that. And emerging markets are the growth, I mean, I tell my children to tell…

Okay, Alexia? Alexia Howard - Sanford C. Bernstein & Co., Inc.: Two quick questions. First of all, on the U.S. supply chain. It seems as though a lot of the growth in the market now is coming through smaller-box retailers, and that the retail environment is changing over here. Is that impacting the way that you're thinking about the supply chain over here and how is that affecting you?

Yes, Alexia, the first -- I have mentioned in my presentation, we're underdeveloped in that channel. So the first thing we need to do is sell something, right? And then we'll work through the supply chain implications. But in all fairness, we really don't have a big business there today. We think it's a massive opportunity. There is no question that those -- that that channel and a number of those retailers are doing exceptionally well. We have some presence in them today, but it's typically with our core range that would be in any other retailer, and what we've found is we benchmarked ourselves against other companies that we believe are doing better in those channels is they've tailored their offering to that channel. And there are some supply chain implications of that for sure. And we'll balance that additional complexity with the opportunity. But the first thing we need to do is actually create some critical mass in that channel, which we're very focused on for fiscal ’12. Alexia Howard - Sanford C. Bernstein & Co., Inc.: Then just real quickly, you've mentioned an appetite for acquisitions. How do you think about the criteria of what you're looking for? And about the pace in managing the risks associated with that, just in terms of how many you can digest in what period of time?

Well, it depends on where they are geographically, and what -- how they fit with our business and whether we have management capability on the ground. But certainly the priority is the emerging markets. But I also want to be clear, we're not opposed to making a developed market acquisition, we just haven’t seen any. And we certainly haven’t seen any that would give returns to our shareholders that would be acceptable to them. So I think that the prices and the costs in the developed markets, because of the size of the businesses are one. And I think, most of the industry has not yet recognized that their portfolios may not be consistent with their aspirations. I'll let you draw your own conclusions on who I’m referring to. I think the other thing, Alexia, is we try to spread these as best we can. We did Foodstar in November. We did Quero in April, and a lot of the negotiating team is the same team, and so we try to spread the big ones. Now in a smaller one, we let the local teams pretty much handle that. But we’re looking for things that create value over time. Now, I mean, I’m really excited about Foodstar, 6 months into it, we’re doing well, but it’s still early. Quero I’m really enthused about. But we’re 2 months into it, and it’s still early, and as Mike can tell you, I wear a path to his door every day, asking how we’re doing, and he said you just asked me that at 5 o’clock last night, and I had lunch with the partner -- the seller, the CEO, and his wife 2 weeks ago. And he’s very enthused about being part of the Heinz company, he still owns a big piece of it. But we will spread these out in terms of the capabilities we have. Now putting Dan Milich in Europe, we've added a resource in Asia, we've added resources in the U.S. in terms of the way we look at it. So we're adding resources because the opportunities right now frankly are stretching our capabilities, but we're not going to do anything that breaks us. So we'll continue to parse these as carefully as we can, as selectively as we can, and I've got to tell you that the line I'm looking at, as I said as long as my arm, are all in emerging markets. I don't think there's a single exception.

If I can add on risk, we have a lot of debates about it internally, there's a difference between informed and calculated risks and risks. There's a strong argument that could be made inaction or not taking some risks will be more risky than taking a perceived risk as well.

Interestingly Mike runs our risk management program in the company, too. So coming from him, I'm glad -- I wish -- did we tape that?

Vincent, go ahead.

Bill, this is the first packaged food presentation I've seen with the -- I guess, back in the CIVETS in it. And so I just want to ask on EM, how you are thinking about balancing, going further into the markets that you are already in, in EMs versus maybe trying to establish some positions in these other markets where according to this chart you are not very well established and maybe there's a difference in valuations in these new markets or not, but how are you broadly thinking about that?

Well, going back to Alexia's question, we look for opportunities and we try to balance them. We have a very good business in South Africa with a partnership with Pioneer Foods. We have a very good business in Egypt, which is again, I've said to certainly a number of you that we think is a huge opportunity for supplying tomato paste long term. It's the only place in the world you grow the tomato crop 2 times in a year. And we've got a very good business there. We've got our Egyptian partner last year, it's growing and we feel very good about it. It's still relatively small, and no, we weren't terribly affected by the problems in Egypt. And as we look, I've been in Vietnam. Vietnam is a real opportunity, but it also worries me. And the dong has done nothing but depreciate. The government is still quite working through how it manifests itself in terms of working with business, but we're looking at opportunities there. We're looking at opportunities in Turkey and I just came back from Turkey as I said, and we continue to explore opportunities. What we tend to do and we've done in Vietnam and in Turkey, we’ve opened small offices there, and we've put -- what do we have, 4 or 5 people on the ground in Vietnam. We’re going to have 4 or 5 people in the ground in Turkey. They start building out distribution, they start building out the introduction of the Heinz brand, and if we see something that can create additional infrastructure or give us an accelerated pace of growth, then we move into those markets in a bigger way. It’s what we did in Brazil. You saw in Mike’s comment about how much we’ve grown the Heinz brand…

David?

I want to follow up on some of the margin questions. So, when you said that you expected equilibration in the margins over the course of time, were you referring to the gross margins or the operating margins? And as a related question, total company segment margins are about 17.5%, the Asia Pac margins are about 9.5%. There is an enormous differential here between these. In this higher algorithm that you've given, this 8% -- 7% to 10% EPS growth, what is the expectation particularly of that Asia-Pac operating margin over the course of time within the next 5 years, give or take?

It will grow. And you've got to remember, in Asia-Pac, we've launched formula in China. We are spending a great deal of money to try to get formulas ceded. So, we made a conscious decision that we would forego operating profit, gross margins are still very good, in order to invest back in the growth opportunity, and it's all factored into the numbers you've seen this year into our outlook going forward. But again, back to Mike's point, we have a couple of markets that are every bit the 17% and the debate we have is very different than the debate and the questions you ask me, the debate we have is led usually by Art interestingly enough, is are we pulling too much money out of these markets, are we not capitalizing on the growth, and by the way, if the Board has any pushback with us that's the question they ask. Gee, it's great you want to be 15%, 16% operating margins in these markets, but are we making moves too soon? Are we not investing aggressively enough because they recognize that's where the growth is coming long term also? So, I think over time the margins will equilibrate. Now what time period that's going to be; 5, 10 years? Time will tell, but I think you've got those in Russia. I have been very clear. I said it earlier, we've made a conscious decision. We are going to be number one in ketchup, period. We missed Japan in the '70s and '80s. We are not going to miss Russia. If that means we take a smaller operating margin out of Russia to drive disproportionate growth and establish an impenetrable share position, we'll do it. But all that’s factored in. When you run a portfolio of businesses, not…

Can I just sneak one more in?

Obviously.

It's a related question to the margin question and you started to answer it, but marketing spending for the company as a percent of net sales, even with an FY '12 growth of high single digits to the budget will still put it around approximately 4% of net sales, the industry leaders within U.S. packaged foods are double that number, your growth opportunities are undeniable in the emerging markets, so sometimes when I step back and think about it, the percentage seems kind of backwards to me, it almost feels as if you guys should be spending much more than the peer group because you have these opportunities in the emerging markets.

Now which one of your guys talked to him? That's -- we have this debate all the time, and again it's a balance. I mean, I could spend a lot on marketing. To quote Herman Cain's comment a couple weeks ago about how the politicians in D.C. are working out. I think his question was, how is that working out for you? How is the marketing spend working out for some others? We balance it against the opportunities we see in the businesses. I mean, we could quadruple spending in some of these businesses, but because we're 97% penetrated, we're not going to see a huge lift that gets us a return, and that's why we are very enthused about things like Dip & Squeeze. I don't know how many of you caught Scott's comment on the research we've done, 60% incremental, 60%. We're going to sell 10 of those things for $1.99, that's $0.20 a piece for one of those little Dip & Squeeze pouches, and I'll bet you, we sell a bunch of it at retail, and we won't have to spend a whole heck of a lot of marketing beyond what we're doing on Facebook and on YouTube, and so there are ways to go about this. I mean, most of you have heard my comments about marketing spend over my entire career, and I'm a marketing guy, and I think, I could easily double the spending on this business, I won't give you a return on it, and so we're trying to parse it out as carefully as we can. Dave showed you we're up significantly in the U.K. because we've got plans now that are giving us a return. We are up significantly in the emerging markets, because it seems to be every dollar we…

We've only got time for couple more. Eric? Pass it back, David. Thanks.

I can’t see that far.

It's still me.

I couldn't neither at first. I need my magnifier.

Okay. I guess 2 questions. One is, I was kind of surprised that given the inflation and your desire to take pricing that in the U.S. and Europe, your both segments are looking for gross margin expansion. During the last wave of inflation most of the companies showed gross margin declines and at best was flat. So I am wondering how does that gross margin expansion jive with retailers' views of pricing? Like why wouldn't they be like, 'why are you taking pricing if you are actually going to be showing gross margin expansion?'

For us on gross margins, we have grown gross margins, and there is a big difference now between 2008 and today. 2008 was the last period of huge inflation and last the time the industry took pricing, and I will tell you the trade was far more receptive in 2008 than they are now, generally. You’ve got other things working for you now. You’ve got at least ostensibly growing employment, although the report today I don’t know if you've seen it came out in the U.S., it was not good. You’ve got a better economy, growing financial markets, you’ve got from a consumer standpoint consumers at least willing to sample or to buy proven products, and we’ve seen that. We have not seen the elasticity issues yet that others have, but it’s still early. My view is that when you have 60%, 70% market share, you should have the capability of taking price, and we have underpriced relative to commodity costs over the last few years and I think it’s an opportunity. There is no doubt we get pushed back. Dave is getting enormous pushback now. Scott is getting pushback. We have to do what’s right long term for our business and I'll give you an example. One of the things that you saw is our top 15 brands growing at about 4 points of organic growth, but the Company didn't grow at 4 points of organic growth; that’s because we’ve taken price in a few areas and lost distribution, Sonnen Bassermann in Germany is one. We’re trying to pick it back up. We have tuna in Australia where we took price. Coles delisted us. We're trying to get it back. So we’ve got some of these issues, we're balancing, but fundamentally in our strong brands, we’ve been fairly successful in the ability to get price through and if we don’t try to grow margins, how are we going to support -- back to David’s question -- the marketing spend that we need to drive the growth in these businesses?

Yes, Eric, let me add on that, that we're trying to price to cover the commodity inflation. So we’re not really pricing ahead of commodity inflation. What we’re using is, through Bob’s group, the very, very strong productivity to then try to drive the gross margins up. So if you can basically cover the commodity inflation with pricing and then you can make your aggressive productivity on top of that, that’s how ultimately you end up growing gross margins.

Then a follow-up maybe on the productivity. You’ve raised your target, but what I wasn't clear about is the Project Keystone and the expansion of SAP linked to that productivity ramp-up? And if it isn't, I’m just kind of wondering about the returns on Project Keystone. It looks like you are spending an extra $0.08 this coming year and then it’s going to be a run-rate I guess on $0.16 in fiscal 2013. So what kind of -- most of the companies that have rolled out SAP in the industry have benefited significantly from them. What does that mean and is that part of the 7 to 10 change on the bottom-line?

Sure. I mean over time Keystone will be a key enabler to all that we do frankly. I mean it’s just how a great business is run. Now to your point there is some additional spending that we’ve got to do here as we get the system rolled out more fully and it will be a while until we get to breakeven, but over the long-term, Keystone is a critical enabler and a key foundational piece to increasing both productivity and ultimately then the EPS growth target to the 7 to 10.

Yes, and I think the thing you have to keep in mind is from a procurement standpoint, certainly in indirect, we've got it rolled out across two-thirds of the company already, and we're getting big benefits out of that, and the other big benefit in productivity is going to be from the value engineering. We will get returns from Keystone later on. As Art said, we cross the line in about fiscal '15 give or take. Fiscal '15 sounds like a pretty good year for me to sort of cross the lines with Keystone. I think the other thing you got to keep in mind regardless of the kinds of returns we get on SAP, we don't have a choice. We don't have a global ERP system. We're operating with individual ERP systems. Now some of you can say, 'well gee, you are behind the industry,' and I'd say, 'yeah.' The other side of that is we're behind the industry and look how well we've performed without doing what the rest of the industry is already banking into their outlook. So, I feel pretty good about where we're going. As Art can tell you, Art and I are the longest running tandem CEO-CFO in this industry by a long ways. Art and I agree on 99.9% of everything. The one thing as Art can tell you, he has scars on his back from is Keystone. And I am a CEO, I hate systems projects. I hate systems. I can barely turn my iPad on, and in fact we've got the Board on iPads now. Just we've got everybody on iPads, now I will tell you this has been a real experience. If any of you are on Boards that want to shift to iPads argue vigorously to stay with paper, and so we are, but we're not going to see returns on those for another 3 or so years and then we will get incremental returns that hopefully will allow Bob and us to keep maintain that productivity outlook going forward, so we're not getting much benefit over the next three years, Eric.

Guys, I apologize. We are out of time. So with that, I think we'll thank everyone for listening in today and cut off the webcast. I do want to thank the entire IR team who has worked very hard to make this event possible today, so for those of you who don’t know Mary Ann Bell, Jessica Hollern, Jeff Strine, and Kelly, so thank you so much and have a great day.