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Thomas Falk

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These are tough decisions, and ones not made lightly, but we need to remain competitive.

Even though we had to absorb cost inflation of approximately $400 million in 2005 -- more than double the level expected heading into the year -- we stepped up our brand-building efforts, investing about $90 million in incremental marketing and research expenses.

Because of our aggressive actions to reduce costs, we're also generating a higher level of savings than originally planned, and that should help us fully offset the additional inflationary pressure.

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