Campbell Soup Co (NYSE:CPB) recently reported its third quarter earnings and discussed the following topics in its earnings conference call.
Jason English – Goldman Sachs: I wanted to focus on the rest of your business, aside from Soup. I think you’ve addressed some of the weakness in Beverages and Foodservice. I want to focus on the Baking side of the business. Top lines look great, but year-to-date, there’s been no bottom line growth. Can you help us understand some the drivers of the margin weakness there?
B. Craig Owens – SVP, CFO and CAO: Yeah, in the Global Baking and Snacking segment, we have continued to cycle, if you’ll recall, last year, we had a very difficult year in Australia, we essentially reset trade spending levels in that market and through the first three quarters of this year, we have been cycling against that reduction and against lower gross margins. The Pepperidge business has performed at a stronger rate than that, through the first three quarters and we are, I guess we’re probably about flat in gross margin at Pepperidge through the first three quarters of the year.
Jason English – Goldman Sachs: When are you done cycling that Australian trade spend adjustment and also, if you could comment a little bit onto the wheat cost, where your inflation numbers sit and what the outlook is going forward?
B. Craig Owens – SVP, CFO and CAO: Yeah, so we should finish cycling the Australian trade adjustment in the fourth quarter, and if you look at the inflation forecast, this year of course has been a tough one on flours and grains, particularly in the early part of the year. I think, as we look forward, we would expect, although it’s a little early to tell, in terms of timing of crops and what not, we would expect a more normal inflation rate in those businesses next year.
Andrew Lazar – Barclays Capital: I guess in Campbell’s base business excluding Bolthouse perhaps if I am doing the math right, maybe the gross margin was still down a bit in the quarter despite a really strong obviously top line performance from the high-margin Soup business. Final part of, that is obviously, trends in Beverages and Foodservice, but trying to get a bit of additional color maybe on the magnitude of gross margins and the change in the Soup and Simple Meals segment. Just to give us some comfort that the operating leverage that one would expect from that type of sales growth in Soup was what we had expected to be or wasn’t compromised in any way.
B. Craig Owens – SVP, CFO and CAO: Yes. So gross margin on Soup and Simple Meals did show the positive impact of a leverage that you should be looking for, we don’t disclose precisely but it was up over 150 basis points in the quarter. You’re right, the things that were depressing the gross margin ex-Bolthouse would have been NAFs and U.S. Beverage both of which had pretty significant declines in both and gross margin largely related to increased promotional spend.