We are also identifying new opportunities through acquisitions, alliances, and innovation. These investments will be in consumer-driven categories in which we can use our core competencies. These are categories in which we can leverage our brands, supply chain, and in- novation expertise with grains and fruit. They also can build on our existing customer relationships and channel and aisle focus. In 2003, for example, we extended Eggo ® into the related syrup category, and  Nutri-Grain ® into granola. These required very little capital investment and they leverage existing brands. and accounts payable). The improvements we have made in this area are remarkable, and we will continue to enhance our working-capital efficiency in 2004. We’ll also remain disciplined on capital expenditure, prioritiz- ing resources for the highest-return projects and using existing assets whenever possible. With greater cash flow, we can improve our financial flexibility over time by paying down debt, making contributions to our ben- efit plans, making small tack-on acquisitions, or return- ing cash to share owners through share repurchases and dividend increases.  We continue to manage our business based on two sim- ple operating principles:  Volume to Value and  Manage for Cash . These principles are designed to create sustainable financial performance, and they are under- stood by the entire organization.  While Volume to Value enhances and sustains our earn- ings growth,  Manage for Cash ensures discipline over our capital base. Together, these principles increase our return on invested capital. Another element of our financial model is realistic finan- cial targets. When earnings growth targets are unrealis- tically aggressive, business managers are inevitably com- pelled to make short-term decisions that may hurt their business over the long term. Such decisions could include cutting brand-building investment, over- shipping to customers, or relying on price promotion. Our goal is sustainable growth, even if it means target- ing a more modest earnings growth rate. Our long-term growth targets are low single-digit net sales growth, mid-single-digit operating profit growth, and high single-digit EPS growth, and we will stick to these targets in 2004. We believe having these realistic targets empowers and motivates our employees, and gives us the flexibility to invest for sustainable growth in the future. Volume to Value means adding value for consumers through branded, differentiated products – and getting paid for that added value. It means focusing on sales dollars and not tonnage volume. It requires improving our gross profit margin so that we may invest more in brand building and innovation, drive our most valuable brands, and grow our net sales. In 2003, we achieved all but one of the underlying  Volume to Value  metrics. The exception was gross profit margin expansion, and that was because we incurred investment costs related to future productivity initiatives. We expect to achieve all of the  Volume to Value  targets – including improved gross profit margin – in 2004. Manage for Cash is the principle that focuses our Company on generating cash flow. Each of our businesses is working to reduce the amount of cash tied up in working capital (accounts receivable, inventory, Earning Our Stripes 6 • Adhering to our Financial Model The entire organization is intensely focused on executing our plans, earning our stripes each and every day.