Good day, everyone, and welcome to today's Colgate-Palmolive Company's Second Quarter 2015 Earnings Conference. This call is being recorded and is being simulcast live at www.colgatepalmolive.com. Today's conference call will include forward-looking statements. These statements are made on the basis of our views and assumptions as of this time and are not guarantees of future performance. Actual events or results may differ materially from these statements. So for information about certain factors that could cause such differences, investors should consult our reports filed with the Securities and Exchange Commission and available on our website, including the information set forth under the captions Risk Factors and Cautionary Statements on Forward-looking Statements. This conference call will also include a discussion of non-GAAP financial measures, which differ from our results prepared in accordance with GAAP. We will discuss organic sales growth, which is net sales growth excluding foreign exchange, acquisitions and divestitures. We will also discuss gross profit, gross profit margin, SG&A, SG&A as a percent of net sales, operating profit, operating profit margin, net income, and earnings-per-share on a diluted basis excluding the impact of the items described in the press release. A full reconciliation with corresponding GAAP measures is included in the press release and is posted in the For Investors section of our website at www.colgatepalmolive.com. Just a reminder, there may be a slight delay before the question-and-answer session begin due to the web simulcast. Now for opening remarks, I'd like to turn the call over to the Senior Vice President of Investor Relations, Bina Thompson. Please go ahead, Bina.

Thank you, Jessica. Good morning, everybody, and welcome to our second quarter 2015 earnings release conference call. With me this morning are Ian Cook, Chairman, President and CEO; Dennis Hickey, CFO; Victoria Dolan, Corporate Controller; and Elaine Paik, Treasurer. We're very pleased with the continued strong organic sales growth in our business across all divisions. In fact, the pace of such growth has accelerated nearly everywhere. Innovation continues to play an important role in our successful array of new products across categories has resulted in strong and growing market shares. As Ian said in the press release, our robust organic sales growth is particularly notable in the face of challenging macroeconomic conditions in many markets; however, foreign exchange continues to be an even more significant headwind, and that is continuing into the third quarter. And as you know, we're diligent in taking pricing to offset currency-related transaction costs and are pleased that even with the pricing we have taken, there is still a good balance with volumes. Our savings programs are delivering excellent results both our ongoing Funding the Growth initiatives as well as our Global Growth and Efficiency program. Cash generation is solid and our working capital is low, down year-over-year. So, we think we're making good progress in 2015 and have good plans in place to keep up the momentum. So, let's turn to the divisions; starting with North America; we're pleased with the solid organic sales growth in North America this quarter and acceleration from the first quarter 2015 growth, driven by a solid volume increase of 3%. And as mentioned in the press release, U.S. market shares are strong across many categories. Innovation continues to play a critical role; although, we also see strengths in the base business. For instance, Colgate Total toothpaste continues to maintain…

Thank you. Today's question-and-answer session will be conducted electronically for the telephone audience. We ask as well that you limit yourself to one question in return that to the queue to allow everyone the opportunity to ask their questions. We'll now go to Jason English with Goldman Sachs. Sir, your line is open. Jason M. English - Goldman Sachs & Co.: Hey. Good morning, folks. Thanks for the question. Ian M. Cook - Chairman, President & Chief Executive Officer: Good morning, Jason. Jason M. English - Goldman Sachs & Co.: Bina, you kind of closed at your prepared remarks talking about continue to focus on driving solid sales growth in market shares and certainly as you ran through the market shares performance, it's indeed impressive. But looking through the belly of the P&L and particularly gross profit, the leakage of cost inflation, which I know includes FX, and I suspect it's predominantly FX-related remains sizable. How do you wrestle with the balance of getting more price to cover some of that, even if it comes at the expense of some near-term market share versus continue to drive the market share? And do you think you're at the right balance right now? Or should you be leaning a little more towards price? Ian M. Cook - Chairman, President & Chief Executive Officer: Well, thanks for the question, Jason. We didn't rehearse this, but it's a perfect lead-in to some remarks I was wanting to make to put the gross profit in context, tell you to exactly your question, how we are thinking about that balance over the rest of the year and then probably I'll just go through the gross margin roll forward to save time, somebody else asking the question. I think to begin with, it goes without saying that…

We'll now go to Steve Powers with UBS.

Great. Thank you. A question on Venezuela, actually, Ian, following up on some of things you just mentioned. Clearly it's a topic that comes up every time you visit with us in one form or another. You obviously continue to account for CP Venezuela at the SICAD rate. Many others have either shifted to SIMADI or else chosen to deconsolidate, as we saw from P&G this morning. So I know there are legal and accounting guidelines that dictate the appropriate treatment of Venezuela, but I'm wondering how much discretion there is on those matters because, at some level, it feels like kind of taking the hit, so to speak, and moving on would provide some benefit, especially if your access to dollars is decelerating, as you mentioned in response to Jason's question. Ian M. Cook - Chairman, President & Chief Executive Officer: Yeah, I wasn't necessarily expecting it as the second question, but I think we were expecting a remark or two on Venezuela. I think the first thing I would say in terms of the breadth of information that we provide on Venezuela, we have I think over time been providing increasing disclosure in our Qs and Ks. And I think you will find that continues to be the case when you read the Q on this quarter. As may know or you will now know, for the first six months of this year, Venezuela represented about 4% of our revenue and 2% of base business operating profit for the six months ended in June. And we do provide in the Q the detail of the net monetary assets that we hold of just over $600 million and the non-monetary assets that we hold of just under $300 million that could be subject to impairment. We also provide information…

And we'll now take a question from Bill Schmitz with Deutsche Bank.

Hi, Bina and Ian. Good morning. Ian M. Cook - Chairman, President & Chief Executive Officer: How easily they forget.

Can you just talk about structurally how you view advertising? Because it seems like your market shares aren't impacted at all by the pullback, and maybe it's like a share of voice issue because maybe the guys are pulling back as well. But maybe structurally could that advertising ratio be lower going forward because it's not having much of an impact on your market share trends? Ian M. Cook - Chairman, President & Chief Executive Officer: Yeah, I'll resist repeating the last man standing comment, Bill. But in terms of advertising, as I have said before, we build our programs from the ground up, and we're very much focused on what it takes to maintain awareness of our base business, build awareness of new innovations and build trial and go on and repeat, given the quality of our products for the new products that we bring to the marketplace. As you rightly say or suggest, and we have seen and we talked about it on the last call, we have seen many competitors in several significant markets around the world substantially pull back on traditional advertising and, therefore, we can accomplish our strategic objectives and not lose competitive presence on the ground. And as we've tried to express before, a lot of what you can do at the retail level today is far more sophisticated and strategic than maybe 10 years ago. And we make no apology for choosing to construct our marketing programs with good reliance on both. We talk about integrated marketing communications and we talk about reaching consumers at all touch points, which of course does, yes, include traditional television and digital, but also includes the retail, dental professional, veterinary professional environments that shape their purchasing decisions. I would not project seeing our advertising levels decline meaningfully. In fact, as we think about this year, we expect to be up on a local currency basis and probably at about the same level as last year on a ratio basis. But we'll obviously again as we go forward look at what it takes to build the engagement without consumers to keep growing market share and therefore our brands and therefore the top line of the company.

Great. Thanks. And then, can I just ask you, are you shipping to consumption now in most of the markets? So, is it stocking largely done? Ian M. Cook - Chairman, President & Chief Executive Officer: Thank you for the one question. The...

It's a short one. Ian M. Cook - Chairman, President & Chief Executive Officer: In China, as we said on the last call, in fact, the consumption was mid-single-digits. We suggested, I think, that the second quarter was off to a good start in China and that we expected to be back to consumption. You, I think, can see that in the Asia numbers. China is back to consumption, and as Bina mentioned, we saw a bounce back in Brazil, and when we look at our categories in Latin America, including Brazil, the growth rates of the categories is around that mid-single-digits level; so we would say, you know, that's the expected environment going forward. In fact, to comment for the emerging markets, mid-single-digits for the U.S., about 2% on average or the spread is 1% to 3% depending on the categories; and Europe at the same, 0% to 2% range bound level it's been in for some time.

Thank you.

We'll now take a question from Chris Ferrara with Wells Fargo.

Thank you. Good morning. Ian M. Cook - Chairman, President & Chief Executive Officer: Hey, Chris.

Ian, I guess that's a perfect transition to Brazil. The last time we were talking about Brazil intra-quarter and in last quarter's call, you weren't particularly optimistic about it. The recovery there, though, your volumes, your organic was up nicely. I guess can you talk about what's changed? Has it been the category growth rates or is it – it doesn't look like it was an acceleration of share based on what you said, but I'd just love any commentary you can offer up there? Ian M. Cook - Chairman, President & Chief Executive Officer: Our share is up. I mean, Bina talked about the year-to-date. The latest period is over 72%, as I said last time, who's looking? I think, fundamentally, Chris, it has to do with the category. I think we were prudent the last time we spoke, because the country was in a state of short-term dislocations; and in fact I had just come back from Brazil and so felt it up close and personal, and we thought it was better to take a more prudent stance for the balance of the year, until we saw the category growth rates come through. I would say that has now stabilized. We expected to provide an update at the end of the second quarter, and we're able to do so, and I think we can say that the underlying consumer consumption now in our categories in Brazil is back to that broad mid-single-digits growth rates. So, it traces specifically to the category growth.

Thank you.

And we'll now go to Bill Chappell with SunTrust.

Thanks. Good morning. Ian M. Cook - Chairman, President & Chief Executive Officer: Hey, Bill.

Hey. Just going back to Latin America, just wanted to – and maybe I can't do the algebra; but on unit growth, it looks like it was flat excluding, I guess, the acquisitions year-over-year, and it said it was partially hurt by Venezuela. I mean, would it have been up meaningfully without Venezuela? And do you expect unit growth to kind of start to bounce back as we move through the year? Ian M. Cook - Chairman, President & Chief Executive Officer: Well, again, I think we were very pleased with the organic growth, to save Ali the trouble when he comes on, we don't break out Venezuela; but our volume growth in Latin America, we see as coming back, but we were quite happy with the trade-off we made to price relative to volume in this quarter to an earlier question. The volume ex-Venezuela was indeed more positive than you see for the division, but by a multiple. Did we lose everybody?

No, your line is still open. Ian M. Cook - Chairman, President & Chief Executive Officer: Do we have no more questions?

I guess, Mr. Chappell, your line is still open.

Oh, I'm sorry. I thought that was – yeah. So, it was just to clarify, you do expect unit growth. It's just a matter – and Venezuela did kind of wipe away all of the unit growth this quarter? Ian M. Cook - Chairman, President & Chief Executive Officer: Venezuela depressed the division's unit growth, yes.

Okay. And but even with incremental price increases, unit growth should bounce back going forward? Ian M. Cook - Chairman, President & Chief Executive Officer: Yes.

Perfect. Thank you.

We'll now go to Caroline Levy with CLSA.

Thank you so much. Good morning. I'm just wondering... Ian M. Cook - Chairman, President & Chief Executive Officer: Hey, Caroline.

Could you dig in a little bit on Russia, where P&G had really, really awful June results, I believe, I think down 57%, just very difficult times? And also comment generally on whether some of your foreign competitors are behaving differently, given they don't have the dollar currency issues you have? Ian M. Cook - Chairman, President & Chief Executive Officer: Well, I really don't want to start getting into detail by countries; but suffice it to say, we did not have the declines in Russia that some others are quoting. Our market shares in Russia are strong and growing. And we, of course, have taken some fairly significant pricing across that division, but very specifically to Russia, given the foreign exchange impact, actually, our toothbrush here in Russia was up two points. So, is back to the opening remarks, really, and that is, yes, we are taking pricing as we need to. We're focusing on Funding the Growth, we're focusing on the Global Growth and Efficiency program, but we're also focusing on building our brands and building our market shares. And I would say the progress in Russia fits that model.

And just on foreign competitors, are you seeing them, you know, enter any markets anew or do anything differently, the ones you don't have a dollar exposure? Ian M. Cook - Chairman, President & Chief Executive Officer: I think most everybody is hurt a little bit by the Russian circumstance. We certainly don't see any irrational behavior the other way, no.

Sorry. I didn't mean specific to Russia. I mean, in general. Ian M. Cook - Chairman, President & Chief Executive Officer: Oh. You know, again, you see pockets of increased activity. You see pockets of decreased activity. I would characterize the global landscape as business as usual.

Thank you.

And our next question will come from Ali Dibadj from Bernstein. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Hey, guys. Ian M. Cook - Chairman, President & Chief Executive Officer: Ali, Ali, Ali, don't shout at me. Ali Dibadj - Sanford C. Bernstein & Co. LLC: Why? Do I shout? Ian M. Cook - Chairman, President & Chief Executive Officer: No, no, no. Ali Dibadj - Sanford C. Bernstein & Co. LLC: You're listening to our previous call? Ian M. Cook - Chairman, President & Chief Executive Officer: I was reading the transcript. Yeah. Ali Dibadj - Sanford C. Bernstein & Co. LLC: I just state the truth. That's all I try to do. So, on advertising spend, you know, it's the fifth quarter in a row where we've seen it down. What we see, at least, understand the gross to net, but what we see in particular is down in Latin America and Africa/Eurasia, and I can't pretend to say that if you decline, you know, reduce advertising spend in those regions you'll get an immediate response, but you did see flat volume in Latin America understanding on the price/mix that you got or the price parts you got. Africa/Eurasia was down 3%, which is some of the worst we've seen. And I get the share of voice comments. Our share voice isn't lower. It's actually higher and that's why we're gaining share. As your senior brethren are feeling quite some pain as well. But what's happened to the category? So, what's the category responsibility? I mean, maybe share voices isn't the right metric, because the category itself should be, could be growing a little bit faster going forward. So, I wanted to get your thoughts on that a little bit. And I know it's only one…

Thank you. We'll now take John Faucher with JPMorgan.

Thanks. Good morning, everyone. Ian, if you look at the gross margin reconciliation that you did, obviously a huge hit on the raw material standpoint. You talked about raw materials sort of beginning to trend more favorably in June, I think you said in your commentary. So, as we look at the transactional piece of that versus the general, let's say, dollar-based raw material inflation, how should we see those things changing as we look out over the next six months to 12 months and that starts to flow in? So, I guess can you give us some direction in terms of how much of that transactional piece you'll be able to offset just with the more favorable moves in the underlying raw material rates? Thanks. Ian M. Cook - Chairman, President & Chief Executive Officer: Well, I think depending on your view on foreign exchange, we've just given you our view on foreign exchange, that unfortunately is likely to continue. So the benefit will come in the material costs, the commodity costs, over the balance of the year and the increased pricing that we will be taking. So if I give a general view, that's really the way it breaks down.

Got it. So, I guess I was looking for a little bit more of a directional view in terms of excluding the FX, excluding the productivity, just how big can the swing in the raw material benefit be, even if it's just directional over the next several quarters? Ian M. Cook - Chairman, President & Chief Executive Officer: Yeah, that was the detail I didn't want to and still don't want to give.

Okay. Thank you.

We'll now go to Olivia Tong with Bank of America.

Thanks. First just following up on John's question. The gross margin outlook, while down from prior expectations implies a very big acceleration in the second half. And you mentioned plans for more pricing, so that's part of it. But can you talk through some of the other key drivers like Funding the Growth and some of the cost savings programs that will help drive that meaningful improvement in the back half margins? Ian M. Cook - Chairman, President & Chief Executive Officer: Yeah, Olivia, clearly it really is a combination of the factors that I raised before, which is more pricing, more Funding the Growth, more favorable underlying commodity pricing and maybe a little bit of Global Growth and Efficiency as well. And then you've maybe got the mix aspect of our business that could provide a factor as well. But the real drivers will be pricing, will be Funding the Growth, underlying commodity costs and maybe a touch from Global Growth and Efficiency, as we have seen before.

Thanks. And then on North America, why does there seem to be more volatility on pricing in North American than all your other regions? Because results last quarter and then it reversed to be down this quarter. So, what's driving that difference? Ian M. Cook - Chairman, President & Chief Executive Officer: Yeah, the biggest single difference, Olivia, is couponing. Couponing is a very effective draw mechanism in the U.S., used more in the U.S. than any other geography around the world, and of course, goes into trade spending. Bina mentioned some of the new products that we have been introducing, and we have obviously been trying to build trial of those new products and, therefore, you invest in couponing and you see it in the volume growth of the business. So you're always going to see North America is a little bit more lumpy quarter-on-quarter because of that difference in the go-to-market.

Thank you.

We'll now take our next question from Mark Astrachan with Stifel. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc.: Thanks. Good morning, everybody. Ian M. Cook - Chairman, President & Chief Executive Officer: Hey, Mark. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc.: I wanted to ask, as you go around the world, which geographies are you seeing the most impact from local or regional competition? And how do you think about changes in go-to-market strategy to compensate, if any? And thoughts or current updates on a different way of actually going to market? How are you embracing internet, where applicable, and so forth? Ian M. Cook - Chairman, President & Chief Executive Officer: Yeah, I would say local competitors are a factor around the world. I guess they've been often discussed by several folk in China. Certainly, we see them in Latin America. And your best way of responding and the way we try to respond is to understand the consumer and make sure that the innovation we're providing is competitive against the benefit or the product offering the local competitor is providing. And then secondly when you mention go-to-market, it is often the case with the local competitor that they have a particular infrastructure that can build downtrade distribution and a lot of activity, again, at retail level, and you just need to be effective in making sure that your products are available at an equal weight to that competitor and that you have the same degree of activity at retail level to compete with them. Now, China is an interesting example where our market share over the last several years has gone up from 29% to 34%. One of our principal competitors has come down from 25% to under 14%. And another has come down from 12% to high-single digit and the local competitor has really taken the difference. So without making one example a predictor for the world, I think it demonstrates we have managed to defend and continue to grow our business quite well. But, it comes down to product offering, and the strength of your go-to-market, particularly down trade and particularly activity at retail.

We'll now go to Javier Escalante with Consumer Edge Research.

Good morning, everyone, Ian, Bina. Ian M. Cook - Chairman, President & Chief Executive Officer: Hey, Javier.

A quick question with regards to Hill's. Very good number, the 7%. It seems like the growth at least in your 10-Q, you say that the Prescription Diet category, more like the veterinary side of the business, it was the most meaningful contribution. I had expected because last year we had this problem at the PetSmart specialty stores kind of outlets that it would be the other way around. So, if you can explain the dynamics of the pet food market with the entry of this Blue Buffalo as a publicly traded company, are they promoting more how – what is happening in the specialty stores? And how sustainable this growth is in the veterinarian channel? Thank you. Ian M. Cook - Chairman, President & Chief Executive Officer: I guess, the simple answer is they both grew. And the reason for the growth was driven by innovation, both on the Prescription Diet line and the Science Diet line. The appearance of Blue Buffalo in the pet super stores is not a new thing. They have been there for a long while. And our presence in those stores, our activities in those stores has not been affected. So, we saw very good growth, and as we have tried to say several times on calls, one of the big differences we were striving for was a stream of innovation on Hill's, so that it was not episodic, but that we had a flow of innovation both on the Science Diet business and the Prescription Diet business, and we think we have that. I mean, who couldn't love innovation that has Enhanced Appetite Trigger built into it? I bet the Petco for that. So, it's driven by innovation. Now where Blue Buffalo will be new is in the more therapeutic side of the business. They have announced two entries in only two segments. One is gastrointestinal. You'll remember from Bina's remarks that we are going to market with a very compelling gastrointestinal product right now with the Prescription Diet line, so I come back to the innovation. We think it's strong, and we think it will see us well with our very elevated share with the vets, which as you rightly say, continue to grow in the second quarter. So, we think we're well-positioned with both, Javier.

We'll now take a question from Lauren Lieberman with Barclays.

Great. Thank you. Ian M. Cook - Chairman, President & Chief Executive Officer: Hey, Lauren.

Hello. I was just, a couple of things. One is on – I know it's very clear mathematically that the SG&A have to be sort of the plug with the lower gross margin outlook, but I was wondering if that is really sourced from the restructuring savings, if it's an acceleration, what you're tapping into to kind of be able to offset some of the gross margin impact. And then the second thing was, is it reasonable to assume that some of the gross margin impact, it's just the timing issue like the pricing that will be coming through to the balance of the year, as you get into 2016 will kind of make up some of this incremental pressure you're seeing on commodities because of FX? Ian M. Cook - Chairman, President & Chief Executive Officer: Could you repeat the second question, Lauren?

Yeah. Sorry. I realized as I was talking I was getting really unclear. So, the transactional impact on commodity costs, which I think is sort of what you were saying in Venezuela, is the timing of the pricing the issue? That it's not that you're not going to price to recover this incremental pressure, it's just we can't get it in fast enough to cover the impact this year, but as you go into next year, it starts to catch up? Ian M. Cook - Chairman, President & Chief Executive Officer: Well, I mean, correct. We've always had this situation. I tried to say earlier in response to a question, in some cases, Russia would be a classic example where a crisis emerges. You take very aggressive pricing and accept the fallout on the volume just to stabilize the business. In other cases, you simply can't take pricing quickly enough, and intelligently manage the balance between volume price and therefore the top line growth in response to transaction, which hits you the minute you exchange slides. So, our pricing benefit from that will be progressive over the balance of the year, and you are correct, will continue into 2016. So, as we look at the balance of the year, yes, it is to do with the Global Growth and Efficiency program; and as I said, advertising will be broadly in line with last year. You may recall the last time we spoke from a ratio point of view, you may recall the last time we talked about it being up. So, heavily led by Global Growth and Efficiency, and I think you could say a moderation, again, we still think by our share and our top line delivery competitive for the moderation and the advertising over the back half.

And we'll now take Iain Simpson from SocGen. Go ahead. Iain E. Simpson - Société Générale SA (Broker): Thank you very much. We've seen increased commodity, volatility and also increased currency volatility of late. And you've sort of talked about how your attitudes took pricing and trade spend change in response to that. Have you seen anything unusual from any of your global competitors and how they prioritize the balance of their spending? Is the landscape moving more towards trade spend or advertising? Or if you could just give us some color on the dynamics there? Thank you very much. Ian M. Cook - Chairman, President & Chief Executive Officer: Yeah. Well, first of all, it's a great name. But in response to the question, as we answered the previous question, I would say from a global point of view, no, you know, no substantial difference. I mean, if you go country-by-country around the world, you see different approaches from different competitors that you have to react to, but no overarching strategy that sees a significant change, no.

And that was our final question. I would like to turn the conference back to the speakers for any additional or closing remarks. Ian M. Cook - Chairman, President & Chief Executive Officer: No. Thank you very much, Jessica. Thank you all who joined the call and your interest in the company, and as we always say at this time, thank you especially to the Colgate people who make it all happen. Bye-bye.

This does conclude today's conference. Thank you for your participation.