Good day and welcome to today's Colgate-Palmolive Company first quarter 2007 earnings conference call. Today's calling is being recorded and is being simulcast live at www.colgate.com. Just as a reminder, there may be a slight delay before the question-and-answer session begins, due to the web simulcast. At this time for opening remarks, I would like to turn the call over to the Vice President of Investor Relations, Ms. Bina Thompson. Please go ahead.

Good morning, everybody and welcome to our first quarter 2007 earnings release conference call. With me this morning are Reuben Mark, Chairman and CEO; Ian Cook, President and COO, and soon to be CEO; Steve Patrick, CFO; Dennis Hickey, Corporate Controller; and Ed Filusch, Treasurer. We will discuss the results for the first quarter this morning excluding charges related to the 2004 restructuring program, as well as three other items consisting of a gain in the first quarter on the previously announced sale of our Latin American bleach business; a charge related to the limited voluntary recall of certain Hills Pet Nutrition feline products; and an income tax benefit consisting primarily of the reduction of the tax loss carry-forward valuation allowance in Brazil following the successful development in the quarter of the previously disclosed legal and tax contingencies the country. These items were included in the reported numbers contained in this morning's press release and accompanying financial statements. The report GAAP results with reconciliations to the results excluding these items are included in the press release and posted on the investor relations page of our website at www.colgate.com. Comments about expectations will also exclude these and comparable items. During the Q&A, we will answer any questions, including or excluding these items as you may wish. Naturally we're very pleased with how we started out the year. As outlined in detail in this morning's press release, our sales growth was very strong and very broad, generated primarily by excellent unit volumes. A healthy gross margin increase gave us the funds to increase advertising in every operating division absolutely and as a percent of sales while still delivering strong double-digit operating profit growth in every division as well. So let's turn to the divisions. North America -- we're delighted with the strong…

(Operator Instructions) Your first question comes from Chris Ferrara - Merrill Lynch. Chris Ferrara - Merrill Lynch : Good morning, guys. Reuben, congratulations on retirement and Ian, congratulations on becoming the CEO. I wanted to start out on this weekly toothpaste, the weekly cleaning that you guys are launching in Europe. How new is this concept? I assume it will eventually get to the U.S. Could you just provide a little more color on that?

Yes, it is a very new concept in the toothpaste field. You will have seen it in other personal care categories like hair and skin care where a weekly regime is added to the daily regimes to strengthen the performance of the respective products. That is the case with this Total product in Europe. So it's a very new concept. It promotes a very strong “just left the dental office” cleaning. It is a new usage on top of your daily toothbrushing. The testing was very, very positive and as you read, it is moving to the marketplace first in Europe, and we have high hopes.

I'm sure you know that regime is the non-American way of saying regiment. Chris Ferrara - Merrill Lynch : Yes.

There will be a glossary in July, Chris. Chris Ferrara - Merrill Lynch : I imagine that you will have a lot of trial building exercises going on in Europe. What is the launch date again? I mean, is it out there already at this point?

It is moving to the market right now, and of course, yes, there will be the trial building techniques you would expect and likewise the professional trial building and educational techniques that you would expect as well. Chris Ferrara - Merrill Lynch : More on the technical side, just looking at your corporate line within your segment reporting, it looks like if you back out the charges and the one-time items on a year-over-year basis the other on the corporate side was up about 36%, because obviously the margins in the individual segments showed more improvement than did the overall operating margins ex charges. Is that right and what is driving that?

That is right but as frequently happens, you have to go behind the numbers to understand it. First of all, as you well know, Chris, our strategy is to while driving gross margin up, drive overhead down -- what we call overhead, which is the combined overhead at the corporation and the subsidiaries. Just to take a macro look at it, in this quarter, it was precisely the same as the percentage of sales as it was last first quarter. The expectation for the full year is that we'll be down several tenths, as I recall. Several unusual sets of circumstances. Number one is there are some timing aspects in the IT area in the global and the timing expense which accounts for a meaningful portion of it. Also, there was some compensation aspects because last year turned out to be a very good year and they were there, which of course won't be repeated, and there were some miscellaneous aspects. And there were some transfers in from the innovation centers which we have established which are being paid for in the subs that were transferred into the corporation, and that is not a net gain or loss. So if we look, Chris, at the whole year, that we do expect our worldwide overhead to be down as a percentage of sale by at least 20 basis points. So basically what is happening is that we are able to afford this considerably more expensive innovation set of techniques, and various mechanics that as previously explained to you, by finding savings elsewhere in overhead, and slight bump is really only a timing aspect. The CFO is smiling at me, I must confess, because when he said a week or so ago when we were looking at this, my response, pardon the expression was, that’s bullshit. But it turns out not to be. Chris Ferrara - Merrill Lynch : So it sounds like you did have some expenses pushed to the corporate side from the individual segments?

That is correct. Chris Ferrara - Merrill Lynch : Can you quantify that?

It would be, I would guess, about one-third of that amount. A third of the amount, and then the compensation is a piece. I mean, you will see that does fluctuate and I think you will see in subsequent quarters or at least a couple of the quarters it will be below last year.

Your next question comes from Amy Chasen – Goldman Sachs. Amy Chasen – Goldman Sachs: Hi, a couple of things. By the way, Reuben and Ian, I am not going to congratulate you because this has been such a long time in coming, so you already hopefully have my congratulations.

Should we take that in any way but a positive way? Amy Chasen – Goldman Sachs: Absolutely not. First of all, can we just talk a little bit about CBP, which I think you know I am a little bit obsessed with. Are there any initial readings now that you are starting to implement it? Was the improved pricing we saw in North America because of that, or was there something else that drove that?

Well I will give you my reaction and Ian can give his. I don’t think we are seeing a lot of it yet, which is very encouraging. It is encouraging from the point of view we get 110 basis points in price. The U.S., our actual prices are higher; our shelf prices are higher. We do a lot of research on that. It is offset a little by gross to net, so the net was zero. The encouraging thing in the U.S. that is expected to continue and in North America in the second half, we should be positive on that pricing level and basically we will continue to be flat or slightly up in the second quarter and then move hopefully up in the second half. So that is good, and the gross profit is reflective of that because a lot of the restructuring savings fell into North America. Amy Chasen – Goldman Sachs: On CBP, if you are not seeing it yet in the numbers, can you give us just a little bit of color on – I guess the tests are largely behind you, you are rolling it out – so some early read on how that roll out is going?

I have a number of pages here on how it is going and how the Essentials are. Let me give that to Ian.

It is rolling out to plan, Amy. We are rolling it out to 17 markets this year, each of them still on time. 17 markets account for about 60% of our trade spending, and we are across the first half of the year doing deep dives in several other markets, which is sending a team in in advance of the SAP driven CBP being in place and essentially doing a manual look at promotional ROI with key customers. That is moving very, very well. There is a world of training that goes behind that. I think to the earlier discussion, our expectation would be to see the benefits of that start emerging more in the second half of this year and into 2008. I think we said on the last call that the benefits we were expecting pre-tax were order of magnitude $50 million this year and probably the double of that next year as we expand it and get better on the ground, working experience with it. Amy Chasen – Goldman Sachs: That is very helpful.

Amy, let me elaborate a bit on what Ian said. As you know, we are a very focused company and we have a narrow line of products and we have worldwide efforts. I can tell you that even though it is difficult to track, just the cognizance of people in every country around the world having received the training and gotten the tools means that they are focusing on it more. It doesn’t necessarily mean that we can show that the use of this tool led to that, or that tool led to this. But so far, simply the focus on return on investment on promotional spending has had a salutary effect, which of course in turn allows us, when we say advertising is up, that is media so that we are able to do precisely the things we had wanted to do. Very encouraging. Amy Chasen – Goldman Sachs: That’s great. In the press release you talked about an incremental $50 million in savings from the restructuring. Can you give us the timing of when we should see that, realizing it might not all flow to the bottom line?

Increasingly the restructuring will flow to the bottom line this year and next, because this level of spending in advertising as a percentage increase will decline. That is our current plan and we will undoubtedly follow the plan. I think you will see as we go through the year, by the end of the year the overall advertising increase will be less than it is in the first quarter by a fair margin. In general, the answer is that the restructuring will begin to flow more fully to the bottom line. The thrust of that extra $50 million after tax will be towards 2008, because there are some additional factory closings, some additional consolidation of specifically a couple of product categories, the establishment of another toothbrush factory in Asia and so on. But it is all spaced out and we are now slightly ahead of where we had told the board and you guys we were going to be at this stage with the original restructuring and this will be on top of it. Amy Chasen – Goldman Sachs: But the savings this year are still about $100 million? Steve Patrick : The answer is yes.

Just going back, to show you the difficulty in tracking, whereas you can track very easily the savings that come from closing down a factory in Jeffersonville, Indiana and opening up a new one in Tennessee, from the whole promotional area, it is very difficult to track it. To give you an example, I had said originally that it was my sense that the savings from the Colgate business planning, after tax, was going to be roughly equivalent to the restructuring. So when we were preparing for the board presentation on that increase, on the savings increase, I naturally asked the financial people, can I also commit to a corresponding increase in Colgate’s business planning, and they wouldn’t let me do it. Not because it is not going to be there but because they can’t really track it that closely. I don’t mean to go on, my apologies Amy. I have said in the last few meetings, last few conference calls, that the fundamentals of Colgate are better than I have seen them in my recollection and I truly believe that is true, and I think that this quarter and the next few quarters are going to be demonstrating that.

Your next question comes from Bill Schmidt – Deutsche Bank. Bill Schmidt – Deutsche Bank: Good morning. Reuben, I think you are probably regretting selling that Mission Hills golf course now.

Why is that? Bill Schmidt – Deutsche Bank: Well now that you are retiring, you will have free time.

Therein lies the whole tale, but number one I am not a golfer and number two, a consumer goods company has no business owning a golf course. Bill Schmidt – Deutsche Bank: I was just kidding, of course. Can you just talk about what the pretax savings are from the inception of the program to date?

I am sorry, say that again, Bill. Bill Schmidt – Deutsche Bank: The cumulative savings from the restructuring program since it was started in the fourth quarter of 2004 until now?

The savings until now are a total of $100 million, plus what had been previously which was about $150 million to $160 million after tax. Bill Schmidt – Deutsche Bank: So the cumulative is $250 million?

No, the $150 million to $160 million includes this quarter. That doesn’t sound right. Hang on, I am getting handed a piece of paper.

From inception to the end of this quarter.

It is from inception to the end of this quarter, it was right. Bill Schmidt – Deutsche Bank: So about $150 million, okay. This might sound like a totally random question, but you will see where I am going. Are you guys switching sorbitol with glycerine?

Excuse me for interrupting, Bill, but just a general comment since this is my last conference call. When you say “just a random question” my response – I don’t mean from you, but just generally – is, compared to what? Bill Schmidt – Deutsche Bank: Are you starting to migrate sorbitol out of toothpaste into glycerine given the big spike in corn prices? Because that could be a big gross margin driver.

We have different formulas around the world, Bill. We use sorbitol and glycerine often in mixtures, sometimes singly, depending on the marketplace. We are always evaluating switches. I must say I don’t know off the top of my head a specific initiative in that area, but we are very, very cautious in making those changes because clearly flavor in a toothpaste is one of the most vital aspects of consumer preference. Bill Schmidt – Deutsche Bank: Just because sorbitol prices are way up and glycerine prices are way down.

We make a lot of our own glycerine, because it is a byproduct of the soap-making process. Believe me, given the margins in the toothpaste business and given our, as Ian says, our real caution and care about arbitrarily changing formulas, there is one heck of a lot of testing that would be done before you would make a switch for short-term cost reasons.

Your next question comes from Javier Escalante – Morgan Stanley. Javier Escalante – Morgan Stanley: Good morning. I am trying to clarify an earlier comment with regard to how advertising spending, you are expected to come down progressively for the year. Should we expect then greater efficiencies from Colgate’s business planning to maintain this strong growth? Is that the thought, that the promotional spending is going to become more efficient as you roll out CBP and that is how you maintain the strong volume growth going forward? As you scale back the growth in advertising?

I think it is important that you look at what I mean by that. Last year advertising was up about 11% for the full year. The first quarter, as the press release reads, it was up 20%. It will not be up 20% for the year but it will be up more than 10%. I mean, it is working and it is still being accelerated but it will not, in going back to Amy’s, the advertising will not chew up as much of the restructuring and all of the other savings. Javier Escalante – Morgan Stanley: The acceleration that we saw this quarter, I know that is very difficult to flesh out, given that you increased advertising by 20%, you are starting to roll out CBP. Is your data showing anything with regard to the underlying industry growth, say in emerging markets and also in Western Europe? Do you see any acceleration, or is it just the acceleration in volume is your own initiatives like CBP and higher advertising?

A tough question to answer. The first of your question, the thrust of my answer will be throughout Asia and Latin America, without question, we are seeing a marked movement – that is to say the overall markets in which we compete – improving. There is more money in the hands of the consumers, and that combined with market share gains, are a very good sign. Throughout Latin America, my recollection is we have about a 73% or 75% market share, so as we move so moves the market, or vice versa, and our business there is very good. On a worldwide basis though, you should know I normally give somebody the breakdown of our major businesses. Sales growth by category. Over many years we have been talking to you about oral care growing very much faster than the rest, but being slowed down by detergents. Well that continues, if you look at sales growth in this quarter, oral care was up 16%, personal care was up 10%, and home care was up about 8%. One would expect and I think we have been saying for years, as oral and personal become a larger and larger portion of our business that we may very well see a pick up in volume trends, which is why we raised last year our projection ongoing from 4 to 7 to 5 to 8. Nobody is saying we are going to be at the very top of that range all the time, but the outlook and volume is quite good, and as I think Bina said, everyone is planning to have a very good volume year this year, and spending is laid in to do it and all expectations right up until today are that it will continue. Javier Escalante – Morgan Stanley: The gross margin composition in the quarter, I know you guys always have it. It is very helpful for us if you can decompose the 110 basis points of gross margin into the different components like raw materials and savings, that would be very helpful. Thank you very much.

First quarter of last year was 56.3 and [inaudible] added 0.3; restructuring added 0.7; our internal funding the growth savings, which you have heard a lot about over time, generated 1.1; material prices as I am sure you know and several of the analysts have commented, material prices in these categories are up somewhat more than anticipated so they were negative 1.3 so the subtotal on net savings was plus 0.5 and then all the other changes, mix and so on, were up 0.3 so that makes the 1.1.

Your next question comes from Wendy Nicholson – Citigroup. Wendy Nicholson – Citigroup: Can you give us a sense for where advertising went up the most or the range? I know it went up in every region, but to be up 20% globally was obviously a very big number, so I am trying to understand was it up 50% in one region and only 10% in others?

I am not sure how much of this I can give out. How much do we give out, Bina?

Not a lot.

But however, interestingly it is astoundingly flat. That is to say that within 100 or 150 basis points of that 20%, every division went up. I mean literally. So the range is from 21 something to a low of 18 something. Wendy Nicholson – Citigroup: Wow, interesting. But my follow-on on that is in terms of lesser increases, if you will, as we go through the year, I mean every year over the last couple of years we have seen a 30, 40, 50 basis point increase in advertising as a percentage of your revenues. Is it fair to say that if you looked out over the next three, four, five years you would expect that trend to continue?

Not indefinitely, but don’t forget the whole strategy is Wendy, as you know well, to drive gross margin up and drive overhead down and spend half of it in advertising and let the rest drop. That when gross margin is growing so well and top line volume is growing so well, we will continue to get that. After it gets beyond 12% or so, who knows, because that may be sufficient and the money may go elsewhere or drop. Last year advertising and sales was 10.8 up from the previous year. This year in the first quarter it was 120 basis points up versus – I don’t know if I can give this, but anyway – 120 basis points up over last year in the first quarter, but for the year it will be about half that or so. Wendy Nicholson – Citigroup: The reason I ask is because one of your competitors is talking more and more about advertising as a percentage of sales as being not necessarily the right metric to look at in terms of how much you should spend and there is more to advertising effectiveness and all of these sorts of things. But it seems like, at least when I look at your business, there is a very good correlation with an increase of advertising dollars as a percentage of sales seems to impact the top line.

I don’t know what competitor you are talking about, I am sure they are very formidable, but nonetheless, just think if you are able to increase the advertising effectiveness at the same time you are increasing the absolute amount of advertising? Wouldn’t that be great? So yes I think it is a very important measure and we spend an enormous amount of time on it, and the Colgate business planning is the look on the promotional side and clearly, we have similar initiatives on the media side, but by definition if you are spending on the wrong advertising or the advertising that isn’t appropriate the return may be marginal. Again, the efforts of hopefully a successful business is to spend increasing amounts of money behind the right stuff. Wendy Nicholson – Citigroup: Absolutely, and obviously your top line is going great, so no complaints here. My last question was in terms of the transition to come in the management team –

What transition? Wendy Nicholson – Citigroup: I know, it is a subtle evolution here. The question though is, what happens to the COO and the President role, and are we going to see a slew of reshuffling or promotions? Are people going to be promoted up in the organization? How is that all going to work so that there isn’t a gap in the guys who sit in New York here?

In some ways, Wendy, if you go back through this methodical and well-planned transition, at one stage there was a creation of a level in the company that we did not have previously at a time when there were three senior executives with responsibilities in the company, those were, in essence, created positions. So they have gone away over time and therefore the organization is flatter. But I think it would be fair to say from an operating point of view with a very strong bench, some of the names you have mentioned, there will be organizational progress which will take advantage of that strong bench.

Wendy, just philosophically I don’t think you’ve seen over many years any abrupt movements or jerks back and forth or shake ups or anything like this, because we do things on a planned basis; witness this particular transition which has been going on for a long time. I don’t think you’ll see them going forward. I think the board is expecting a methodical process in every area to continue to develop and promote really good people, and you will see it as a very logical extension of what is going on. Wendy Nicholson – Citigroup: Terrific, congratulations. Thank you very much.

Your next question comes from Linda Bolton-Weiser – Oppenheimer. Linda Bolton-Weiser – Oppenheimer: Thanks very much. It was such a high quality quarter, I don’t want to pick too much at it. Can you just explain, it looked like the receivables were up quite a bit year over year. Is there some particular reason for that?

Receivables were up and inventories were up, Linda, although working capital because of payables was actually down as a percentage of sales. There is, I think, a very appropriate and legitimate explanation for it; let me briefly give you that. On the receivables part it really has to do primarily with Europe and the exchange trend. There are two factors, but the first is the exchange trend. During this first quarter, the euro was going up in value so the end of the month at which time the receivables are valued was considerably higher than it was during the average. Don’t forget that the days are averaged and the month end, quarter end figure is an absolute. Last year it was going the other way. That is a meaningful portion of it. Secondly, March was a very strong month worldwide and when there is a very strong month and DSOs are 60, you are relative to the receivables that you have on that day, it is more. Our expectation is that receivables will be in the appropriate spot as we go through the year, and our projection for year end working capital is actually an improvement over last year. Inventories, a couple of the people who wrote about it this morning came up with the right answer. The right answer is essentially that we, in conjunction with the restructuring, there are a number of factories that have gone down and are going down so that is a combination of building inventories in a number of locations. Importantly, in several big locations: one in the United States where there is a new, greenfield factory that is busily producing goods and not shipping any. For example, the factory in Tennessee which replaced our biggest factory in the United States in Jeffersonville, Indiana which closed last year. That is producing and not shipping. Again, I think you will see as we go on, Linda, that it is under control and the ratios will – I don’t know if we have a projection – but it is basically going to end up at or better than last year’s levels by then. Linda Bolton-Weiser – Oppenheimer: Thank you. Can I also ask about Hills? It seems that some of the cost inputs are still providing some pressure. How do you expect the Hills operating margin to improve in the remaining quarters? Can you just give a little more color as to how you are going to get double-digit operating profit growth for the rest of the year?

Sure. You are right in that the Hills expectation had been for about 3% or thereabouts increase in raw packing materials and it is a multiple of that. So it is higher and you have seen the corn prices. At the same time, their volume is expected, throughout the year, to be actually slightly better than it was in the first quarter. Their operating profit is expected to be up double-digit and interestingly, their gross profit will be, for the year, very slightly we think below last year but not by much. They have an enormous savings program, they have a number of various things; they took price increases in January and so on. We have very considerable confidence in Hills’ estimates, borne out by history, and I think that indeed will happen. Linda Bolton-Weiser – Oppenheimer: Thank you and congratulations.

Your next question comes from Lauren Lieberman – Lehman Brothers. Lauren Lieberman – Lehman Brothers: Thanks. Pretty clear that the quarter was great, so I am just going to ask you to maybe tell us what in the business isn’t going quite as well as you had hoped? There has got to be spots for improvement.

Even though Colgate is simpler than most, these are big, complex organizations and there is always a creep here or a creep there. I can’t really pick out anything that would really trouble me, because as I say, look around. The share trends, the volume trends and the gross margin trends are good. Interestingly, even though there has been some note of a point or two of market share in the United States, that I must say that first of all they are doing very well and continuing to do well in terms of the actual business and the takeaway and the actual volume. Importantly, this is after someone who we have enormous respect for, our major competitor, threw everything but the kitchen sink at that. I shouldn’t say that. Put a very aggressive program behind a new product and the fact that we have basically lost 1.5 share points, and I think are going to have regained that by the end of this year is a pretty good outcome. That is in a country where that competitor is very, very strong; has the strongest toothpaste franchise worldwide that they have, and so that to me is a very good part. I can perceive that to be positive and certainly our U.S. company is not considering it as a given, and I think they will get that market share back. Interestingly, the volume trends do not reflect that. Some of the mechanisms for measuring those trends may not be as good as everybody had thought. Lauren Lieberman – Lehman Brothers: On China, pretty significant improvement in volume trends there. I know in Bina’s script there were some new product launches mentioned. What changed there this quarter? Is this a change in trend, is it stepping up with the selling efforts on the ground there really starting to kick in? It is a dramatic shift. If you can give us any color on that it would be great.

I think it is all of the above. I am not sure if Bina gave out these precise figures, but in Greater China sales were up 12% and volume was up 10%. A significant part of that, as you know, I mean it is our brands and it is also our partners since 1985. Let me just give you a projection, if I could. I guess we don’t have it for Greater China. We are, at the same time, our volume is going up we are containing our profitability. That is to say, we are making sure that we are continuing to reinvest and those numbers are included in the overall macro numbers that you have seen, Lauren. But it is going well.

Obviously mechanically we have the two new products and as we have said before, we have a very deliberate province by province program where we are increasing our merchandising capability in the A and B cities to make sure we have the visibility and promotional merchandising behind the brands as we are putting the new products to the marketplace. So just those two specifics to add, but in general terms, exactly what Reuben said.

Your next question comes from Nick Modi – UBS. Nick Modi – UBS: Good morning, everyone. Just a quick question on share, globally. Are you seeing more pressure coming from larger multinational players, or is this more of the tertiary, regional players in emerging markets?

I am not sure what numbers you are looking at but our global market share when we do a Scan Track, WorldView it is called, sorry – I don’t remember the names of these things. Where we look at all of the countries and our market share is up quite meaningfully. Nick Modi – UBS: That is what I am talking about. I am wondering what the source of share is.

I think it is a combination. Since multinationals represent in those 60 markets the bulk of the market, it almost by definition is coming from them. There are no real remaining powerful local brands that I can recall, virtually anywhere, with the exception of China, perhaps. But it is coming essentially in the same proportion as market share. Nick Modi – UBS: In terms of the Colgate franchise, and I guess we can start in the U.S. and you can comment globally, but is there an effort in place to make it a more holistic brand proposition? I know you have mouthwash in the U.S. I am just curious on your thoughts around that.

I think you have seen a very conscientious and disciplined approach to try and expand the equity; the two largest markets globally are toothpaste and manual toothbrushes. As Reuben said, we have a growing worldwide toothpaste leadership share by quite a wide margin and we have systematically built our manual toothbrush share to a global leadership position now. Outside the U.S. we have quite strong rinse market positions and we continue to invest behind that and grow share there as well. So in terms of expanding our representation in the complete oral care category, yes we are focused on that. We have prioritized behind the two biggest global segments, but we are growing in the other segments as well, which you would see more outside the U.S. than here. Nick Modi – UBS: Thanks a lot and congratulations to you both.

We will take our next question from John Faucher with J.P. Morgan.

Good morning, everyone. I wanted to see if I could ask a question about margin progression throughout the year because you talk about the corporate expense and then you talked about the growth to sales leveling off a little bit. So assuming we do not see a dramatic reduction in the top line, that implies that we should see operating margin by division sort of ramp up a little bit over the balance of the year. While we do have some difference in comps in North America and greater Asia, Africa over the balance of the year, is that the right way to look at it, from that standpoint if we adjust for the comps, that this is going to be the low point relative to divisional margin performance?

Are you talking about operating margin or gross margin?

Operating margin.

Operating margin -- well, it is right except for one caveat that I will put in a moment, but if you look through each division, it would appear that all of them will be better than last year and that the way the current expectations are, that ascending trend in percentage of sales will happen in North America. It will happen in Europe. It will happen in Asia and it will happen in -- on this piece of paper, it does not happen in Latin America, but it will. Latin America always does better than the projections, or historically has always done better and so it does not show it now but it will happen. So the answer is, I’m sorry for that little episode of an inside joke in the room, but nonetheless, John, the answer is that is a very reasonable thought. It is not -- it is logical as well because since we are taking ratios here, if the A to S is moderated a bit and the savings increment, that is a very logical conclusion.

Okay, great. Thank you very much.

We will go next to Justin Hott with Bear Stearns.

Thanks. Most of my questions have been answered, just a couple of quick ones; could you give us, maybe you did already but I don’t remember hearing it, the China market share trends and the pricing excluding FX?

In terms of the China market share, up progression from the fourth quarter last year. I think we are at about a 30.5, 31 share in China. The second competitor is around a 23, 24 share in China. As was mentioned earlier, with the two new products that we have taken to market, with the growth we have seen in the first quarter and the expansion of our merchandising efforts, I think we will see the share continuing to grow across 2007. What was your second question?

Before I go on with that, Ian, how much has that market share grown year over year, or quarter over quarter?

I think from the fourth quarter to the first, it is about a share point.

Thanks. The second was you gave 12% sales, 10% volumes. I would assume there is some FX involved in the --

Some what?

There’s some foreign exchange involved in the pricing. Could you give us some -- I guess how much pricing went up in local currency terms?

FX in price combined with China, I am not sure we normally give this out, but there is obviously two by difference.

I’m just wondering if there is discounting. Secondly --

It’s also that there is a different exchange rate because it includes Taiwan, which has a different exchange than China and so on and so forth, so it is probably a slight appreciation in China and maybe a negative in Taiwan.

Okay, but there is not discounting going on?

No what?

Discounting of product. That’s what I’m wondering.

I doubt it. Do we have an actual pricing for -- we will get back to you, Justin, but I don’t think so. They are undertaking the business planning as well. I think you are going to see --

Secondly, are you seeing any sort of potential trade-down in U.S. pet food after the Menu foods incident? Anything at all?

Trade down in what?

U.S. pet food.

U.S. pet food?

Yes.

We are not, and I think that they are very pleased with their volume to date. During this month it is right on track. Interestingly, as I think Peter may have mentioned, that the sales to [inaudible], which is the great measure, are running ahead, well ahead of last year and ahead of expectation. I think part of that is Bina told you about how we really I think reacted well. I assume other people did as well, but we reacted well to this and really contacted all the veterinarians and made sure we covered the testing cost for any consumer that was involved and so on. And then I think that is coming back to us robust sales.

Lastly, if advertising is growing at a little slightly lower rate and more of the savings flows down to the bottom line, could you be or have you been thinking any differently at all about repurchases and your stance on that?

Repurchasing shares?

Yes.

We will continue with our share repurchase. We will probably repurchase by the end of the year somewhat more than last year, and we resume it. We are in a bit of a blackout period since we got the results 10 days or so ago and we will recommence it. We are in the market every day buying.

Thanks. All the best, Reuben.

We will go next to Connie Maneaty with Prudential.

Good morning. I would like to go back to Colgate weekly, please. It sounds like this is more than a test market, and if that is so, which countries in Europe is it going in? You rarely do this sort of thing without a worldwide rollout planned, so when would you introduce it into the U.S.?

Yes.

Connie, it’s Ian. The answer is we have actually started indeed in lead markets in Europe. It is a new concept. There is a new behavior to be learned by consumers. We do not want to be presumptive on changing people’s behaviors. We started in the United Kingdom and we do have plans to expand in Australia outside of the European markets, but we will probably learn our way in terms of the behavior and progress here before we transfer the product to other markets, possibly including the United States. So there is still some learning to be done.

Is this a technology that you have patented or developed in-house or licensed in?

It is technology that we have developed very much in-house and it is patented.

And I assume that the price premium would put this at a margin that is above the toothpaste average?

It is an accretive product, yes.

Okay, great. I also have a question from the earlier conversation when you were describing all the North American marketing, the in-store loyalty program, TV, Brooke Shields and all of that, the concert sponsorship. Is this part of Colgate business planning? Secondly, where in the P&L do you book the expenses for these things?

At this stage, Connie, it is not part of Colgate business planning. That is still thus far very focused on trade spending only, which is in the gross to net line. These initiatives, as Reuben was indicating earlier, are part of other themed initiatives that we have. In the case of most of these to consumer marketing activities, they come under integrated marketing communications, or if they are executed at the store level directly to the consumer, under an initiative that we are calling shopper marketing; in other words, marketing directly to the shopper in different channels. The majority of those expenses come in advertising, in the promotion line of advertising below the line.

I know the call has run long, but I do have one more question for each of Reuben and Ian. Reuben, as you look back over the last 20-some years, could you comment on one or two highlights that really stand out? Ian, as you look forward over the next five years, what do you think Colgate’s biggest challenge is once the restructuring is completed?

At the risk of being glib and humorous, since you commented that the meeting was running long, the discussion was running long, the first thing that pops into my mind is that his high point and my high point may be the same thing, which is July 1. I’m sorry, no. Actually, it is less important what has been historically than what, if you want to comment on the future.

Yes. Again, I think Connie that -- you say challenges. I think it is continuing to focus on executing the business strategy that we are putting in place, have been putting in place over the last couple of years. Like Reuben, I believe that Colgate business planning is a platform for future efficiency and future growth. I think the initiatives we have in integrated marketing communications, shopper marketing and those areas, along with the very clear focus we have on innovation can continue to sustain the company’s profitable growth into the future. I am excited to continue to work with Reuben and obviously the great cadre of people we have in the company to keep delivering that, so it is focusing on the same business strategy in a very deliberate and methodical way.

We will take our next question from Joseph Altobello with CIBC World Markets.

Good afternoon. Actually, this is Henry for Joseph. Just a very quick question; with Colgate Total Advance Clean, I know it might be early but do you think you are taking market share from Crest Pro Health or are you cannibalizing other Colgate-branded toothpaste?

It is too early to say. On the competitive comparison, we literally are starting our trial building activities right now. Our testing says this is one of the lowest cannibalizing Colgate Total variants we have in terms of taking share from existing Colgate businesses, so we are expecting to source from competitors but we do not yet have data to definitively show which ones.

Okay, great. Last question, I know you took pricing on Science Diet and Prescription Diet earlier this quarter. I was wondering if you had seen any resistance in light of the pet recall that also happened in the quarter.

Let me comment. The answer is the price increase took place before that, but the entire pet industry is aware of the changes in raw packing material, especially raw material, and I think the best example of that is how volume turned out for the quarter and how it turned out, how it is coming in right now as we are in the third week of the month following. So the answer is it does not appear that there is resistance. The price increases were, as I recall, between 3% and 4.5%, in that range. They were modest. One more, or -- two more. We have two more questions.

We will go next to Alice Longley of Buckingham Research.

Mine is really fast; you have referenced China. How fast is the market growing there for toothpaste?

I think, Alice, from memory -- we can confirm it after, but I think it is high-single digits.

Okay, and that has been pretty steady over the last 12 months?

Yes, I mean -- again, compared to some of the more explosively growing areas, in China one has to remember that here you are changing people’s behavior, pursuing the middle class and I think we can expect that growth rate, which outpaces the world average but nonetheless to stay fairly consistently in that range.

Okay, great, and my only other question is on pricing in Europe. That is the only place where pricing was negative. What would the outlook for the year be on that line?

On pricing?

Pricing in Europe.

Hang on one sec. I will tell you specifically. Europe, in our projections, although Europe’s gross profit was up, although pricing was down, they are expected to be about that level of 100, 150 basis points down throughout the whole year, and that has been taken into account with our expectations that we as a total company will have pricing up about a percent or slightly more for the full year.

Excellent. Thanks a lot.

Thank you, Alice, appreciate it. Last question, please.

The last question will come from Alec Patterson with RCM.

Reuben, on the addition on the restructuring program, and cut me off if you have already answered this, I wanted to get a read on the impact on the CapEx for this year and next.

Okay. Alec, the CapEx this year, with the 648 is the -- with restructuring. We are expecting to spend $650 million. The regular program is about $500 million. Does that include the incremental? There is not much incremental this year. It will be primarily in the beginning of 2008, but it is expected that our spending this year will be in the, give or take a little, $650 million range.

And the benefits of the $50 million additional savings expected --

I did cover that. I said it is primarily coming in 2008.

The savings side of it as well?

Yes.

Okay, great. Thanks very much, Reuben. I appreciate the years of constructive dialog.

Alec, I think it is -- what? There is one more question but I was going to say that I think it is very appropriate that you and I talked last, that is great. One more question.

We will take our last question from Jason Gere with A.G. Edwards. Your line is open. Please check the mute switch on your phone.

Okay, many thanks. I do appreciate all the involvement over all the period of time. It has been great fun working with all of you guys, and for the three people that are left on the call, Ian and the entire group will continue the effort into the future. Thanks a lot.

That does conclude today’s call. You may disconnect your lines at any time.