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## We’re driving growth by protecting margins. 

Holistic Margin Management (HMM) is our unique discipline of leveraging pro- ductivity, product mix, and pricing to off  set cost inflation and protect our margins. Through HMM, we’re challenging ourselves to find the most efficient and eff ective ways to run our businesses. We’re engag- ing the collective efforts of everyone on our business teams to identify costs that don’t add value for our consumers, elimi- nate those costs, and then reinvest the savings back into our businesses in ways that generate sales growth. 

So far, the majority of our productivity savings have come from our U.S. Retail 

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businesses, but we see great opportu- nities across our portfolio. For example, our International businesses are begin- ning to reap the benefits of HMM, with state-of-the-art manufacturing processes and global sourcing of packaging and ingredients. We’re also partnering with our suppliers and customers to identify ways we can work together to elimi- nate costs. 

As we look ahead, we expect costs for commodities and energy to increase, fueled by global demand. That means HMM will remain key to protecting our margins. Our goal is to capture a cumu- lative $1 billion in supply chain HMM savings from fiscal 2010 through fi scal 2012, and we are targeting $4 billion in cumulative savings worldwide over the decade to 2020. 

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Net sales less cost of sales. 

Through our HMM efforts, we’ve been able to offset input cost inflation in recent years and protect our margins. Productivity initiatives, such as a new centralized transportation management system, contributed to margin expansion in 2010. 

## Shipping Products More Efficiently 

With our new central- ized transportation management system, we’ve determined the most efficient shipping confi gura- tions and routes. This reduces shipping costs as we put more products on a truck, which means fewer trucks on the road. 

