Kraft Executive Earnings Insights: Payout Ratio, Pricing
Ken Goldman – JPMorgan: Irene, you said previously to expect a higher dividend payout ratio on Grocery Co. and Snack Co. Your total company dividend yield is already higher than the Group average of 51% I think. I realized you are limited in what you can tell us or maybe even have decided but how should we think about that payout ratio on Grocery Co.? Is it 55%, 65%? Is there some range we maybe could use or is it just too early to tell?
Irene Rosenfeld – Chairman and CEO: Well, it’s too for us to talk about that. Obviously that will be part of our conversation as we head into the road show, but I think just to the math is that we have about 51% payout ratio today. What we said is that our dividend will be same as the total for KFT and that our grocery business will provide a competitive dividend and our snacking business a modest dividend and so you can expect that the payout ratios will be higher for the grocery company and somewhat lower than today’s average for the global snacks company , but we’ll give more of that detail as we head into our road show.
Ken Goldman – JPMorgan: On the top line your Power Brands again grew more quickly than the portfolio as a whole, I realized you want to be focused on a select number of brands and not spread yourself to thin and I guess some of this question goes away after the spin but is there anything you can do to migrate some of the learnings from growing these Power Brands over to the rest of the portfolio? I was just wondering whether there is maybe some easy wins so to speak that you don’t really require a lot of company effort of capital to achieve. These manage for cash brands and they have the potential to grow faster some day or is it just not the right way to think about it?
Irene Rosenfeld – Chairman and CEO: I think what you’ll see is underneath the aggregate numbers; clearly our Power Brands around the world grew at 11% rate versus our aggregate revenue up 6.5%. so they are growing disproportionately fast and we are disproportionately focusing our resource there, but clearly all of our businesses are contributing which is enabling us to deliver the 6.5% growth, so the simple answer to your question is yes. We’re learning a lot as we take some of the lessons from one part of the world to another from one category to another and that’s what enabling us to get the whole portfolio to perform at an above average level.
Andrew Lazar – Barclays Capital: I think last quarter, you gave a number, I think it was at CAGNY in the quarter itself, I think about 30% of the portfolio had held or gain share and I think part of that was just the issue of kind of pushing through sort of pricing in some of the larger pass-through categories at grocery and you’re expecting that to kind of start to turnaround a bit and look better this quarter. Is there a way you can give us a sense of how that shaped up this quarter?
Irene Rosenfeld – Chairman and CEO: First of all, I have to tell you we’re feeling quite good that our category growth rates and our volumes have help up as well as they have and now we certainly feel quite good about our market share performance around the world. The number you’re quoting was a North American number and we certainly are seeing improved progress there as we see pricing in a number of big categories. As you know Andrew, we led pricing in a number of our core categories and as other of our competitors deal with the same input cost that we are – we’re starting to see those gaps close. So net, net we are continuing to see some dislocation in a couple of categories, but we feel quite good in aggregate. As we said, our market share performance has been exceptionally strong in Europe with over two-thirds growing in developing markets and North America it’s more of a 40% range, but we’re seeing a very healthy recovery and I think you have a good sense of that as you look at the vol/mix contribution underneath the revenue growth.
Andrew Lazar – Barclays Capital: Just a quick one on – just on FX, I know that your guidance for the full year and from earnings is obviously in a constant currency basis. I guess based on where sort of rates are today and that can certainly change, any big impact one way or the other on the earnings line from FX as you see it based on how your portfolio shapes up?
David Brearton – EVP and CFO: Yeah, I think I don’t want to give any guidance on currency, because it’ll be wrong for sure and that’s why we prefer to talk constant currency. Obviously, the impact this quarter was pretty small. I mean it was actually slightly unfavorable NOI and slightly favorable on EPS and, but the numbers were pretty small. So I think it will move around with the currencies and frankly, to give you a simple formula would be kind of tough, but I don’t see it today as being huge. I think it will continue to be either a headwind or a tailwind depending on how the markets go. Right now we don’t see as being huge.