Bina Thompson, Vice President, Investor Relations Reuben Mark, Chairman of the Board, Chief Executive Officer Ian Cook, President, Chief Operating Officer

Wendy Nicholson, Citigroup Amy Chasen. Goldman Sachs Lauren Lieberman, Lehman Brothers Chris Ferrara, Merrill Lynch Bill Pecoriello, Morgan Stanley Bill Schmitz, Deutsche Bank Linda Bolton Weiser, Oppenheimer Co. Justin Hott, Bear Stearns Joe Altobello, CIBC World Markets John Faucher, JP Morgan Alec Patterson, Dresdner RCM Gloval Investors Elana Mills, Atlantic Equities Alice Longley, Buckingham Research

Good day and welcome to today's Colgate-Palmolive Co. fourth quarter and year end 2005 earnings conference call. Today's call is being recorded and is being simulcast live at www.Colgate.com. Just as a reminder there may be a slight delay for 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. Bina Thompson, Vice President, Investor Relations: Good morning. Welcome to our fourth-quarter and year end conference call. With me this morning are Reuben Mark, Chairman and CEO; Ian Cook, President and Chief Operating Officer; Javier Teruel, Vice Chairman, Stephen Patrick, CFO, Dennis Hickey, Corporate Controller, and Ed Filusch, Treasurer. Our remarks this morning on the fourth quarter will refer to our results excluding the following items, a 32.9 million after-tax gain on the sale of our Southeast Asian detergent business, a 41.9 million after-tax charge for restructuring and 10.4 million after-tax for other charges. Each of these items was included in the as reported numbers contained in this morning's press release and accompanying financial statements. The reported GAAP results with reconciliation 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. During the Q&A we will answer any specific questions including or excluding these items as you may wish. We are delighted with this quarters results, which show a strong finish to the year and set the stage for another good year in 2006. It is a strong P&L with all the ratios moving in the right direction. Our financial strategy, with which you are very familiar, is back on track. Soft line sales in unit volume are up, gross margin increased strongly, overhead expenses are down. This has allowed meaningful increases in worldwide advertising while operating margin, net income and earnings per share have grown. Our businesses and marketshares are strong around the world. Also in the quarter we announced the sale of our Asian detergent business consistent with our focus on the higher margin categories of oral care, personal care and pet nutrition. So let's focus first on the worldwide P&L. Excluding divestitures, sales increased 5.5% and volume increased 4.5% on top of a 10% sales and 9% volume growth in the fourth quarter of last year. Pricing increased 2%, was up in all geographic division except Europe. This is very encouraging and is a good indication that our global focus on more efficient trade spending is beginning to bear fruit. Foreign exchange was negative 1%. Gross profit margin increased 100 basis points. As Rubin said in the press release, above our expectations. This excellent performance is particularly notable in light of the commodity cost increases which all companies experienced in 2005 and which escalated in the second half. Gross margins benefited from five factors. One, our ongoing funding the growth program. Two, savings from the 2004 restructuring. Three, improving product mix. Four, favorable pricing. And five, our newest element the increasing savings coming from our improving efficiency in promotion spending. These factors helped to offset the sharp rise and will impact material costs. And we expect this good gross profit momentum to continue into 2006 and we budgeted and fully expect to achieve further meaningful gross margin increases this year. Looking at SG&A on an absolute basis, SG&A increased slightly and since sales were up SG&A was down 100 basis points as a percent of sales. Very importantly to us the overhead component of SG&A went down very nicely while the advertising component increased 6% to 10.5% of sales, up 20 basis points from the year-ago quarter. As we go through the divisions you'll hear how this continued focus on increased spending in advertising has helped both volume and market share. As I said overhead expenses were down as a percent of sales reflecting our ongoing emphasis on cost containment and driving efficiencies around the world. Operating profit decreased 10% in absolute terms and increase as a percentage of sales by a 110 basis points. Our tax rate was 31.1%. This brings us to 31.7% for the full year, toward the high end of our announced target of 31 to 32%, and reflects increased benefits from the European business of realignment we have previously discussed with you as well as other global tax savings initiatives. Net income increased 14% from 11.9% of sales in the fourth quarter of last year to 13.1% of sales this year. And diluted EPS increased 17% to a record $0.69. Cash flow and balance sheet are solid as well. Our working capital is at a record low of 1.7% to sales down from 2.4% last year with both inventory and receivable days down nicely. So we feel it is a very good finish to the year which gets us firmly on track and positions us well as we enter 2006. Before I turn to the divisions, effective January 1, 2006 the Company as required will adopt the statement of financial accounting standards 123R share-based payments. The new accounting for stock-based compensation will result in incremental expense which for the full year 2006 is currently estimated to be in the range of $0.0 to $0.10 per share. However, as most of the Company's equity awards are generally granted in the first and third quarters this charge will not be spread evenly throughout the year. The projected incremental impact to the first quarter of this year is approximately $0.03 per share. So let's turn to the divisions starting with North America. Excluding divestitures volume in North America increased 6% in the quarter driven by even stronger volume growth in the United States portion of the division. The U.S. was up 7.5% in volume and 10% in sales. For North America as a whole pricing increased 2% and exchange added 0.5% resulting in a total sales growth of 8.5%. As you know we are undertaking a worldwide initiative to increase the efficiency of our trade spending. The pilot program for this is here in the U.S. and in Mexico, and our positive pricing momentum reflects the early successes we are achieving. Advertising increased both absolutely and as a percent of sales and operating profit increased just under 10% and up on a percentage of sales basis as well. Our very healthy volume growth is reflected in good market share performance here in the U.S. Our national shares as measured by Nielsen are up year-over-year in toothpaste, toothbrushes, dishwashing liquid, fabric conditioners and bar soap with an all-time high level being reached in all but the dishwashing category. In the toothpaste category our share was up almost half a point year-over-year. New products such as Colgate Max Fresh and Luminous continue to perform well as does Colgate Total. Total's full year share was 14% with sales increasing 14% year-over-year. Our domestic manual toothbrush share was up over a full point. Colgate's 360-degree toothbrush launched early in the year has been a significant driver to the marketshare gain as it has in other markets as well. In bar soap our share is up over half a point and essentially tied for the number one positioning in the deodorant bar soap category. Our latest entry, Irish Spring MicroClean, helped build share and we expect some more new news in the Irish Spring line later this year. Looking ahead we expect volume in North America ex divestitures to be up at least mid-single digits in the first quarter and full year. Operating profit should be up high-single digit in the quarter and year. Turning to Europe, excluding divestitures volume in Europe increased 2.5%. Pricing was down 1.5% which while the only negative pricing number in the whole Colgate world is a sequential improvement from the third quarter. Currency was -6.5% all resulting in a sales decline of 5.5%. Advertising was down slightly in the quarter as a result of timing of new products and more importantly as compared to a record fourth quarter in 2004 when advertising was up 45% from the prior year. On a full-year basis our European advertising was up both absolutely and as a percent of sales. Operating profit declined 7.6% largely due to currency. Unit volume was down in Western Europe while Central and Eastern Europe posted strong double-digit growth. As has been the case for most of 2005 macroeconomic conditions in Western Europe have been very challenging particularly in countries such as Germany, France and Italy. However, more recent economic data are beginning to show some signs of economic improvement. The third-quarter GDP growth rate was the highest since the first quarter of 2004. Inflation is expected to decline in December and the unemployment rate has also come down somewhat. So as a consequence consumer confidence in our key markets improved significantly in December which should bode well for 2006. And we are seeing some better volume trends in Western Europe more recently. Two new products in the toothpaste category have just been launched in Western Europe which should rollout across the region over the next year. Building on the success of Colgate Sensitive toothpaste we have introduced Colgate Sensitive Multi-protection toothpaste, this has a dual action formula which provides not only unbeatable sensitivity relief but also protects teeth and gums, thanks to a clinically proven bacteria fighting system. In addition, we have introduced Colgate Time Control toothpaste with active vitamin E. This new product is targeted to the aging population that tends to experience receding gums. Receding gums are one of the main causes of root cavities and can lead to further problems. Colgate Time Control's clinically proven formula protects the exposed root area against cavities and contains a gum protection system with active vitamin E which helps invigorate gum tissues and prevents them from receding further. Our GABA business had an excellent fourth quarter capping off a very good year. GABA's volume grew double-digit. You may recall that our expansion strategy with GABA is to work with dental professionals and academics to build brand awareness and recommendations and to enter a new market first in the pharmacy channels to build market share. We have done this very successfully in Italy where our share in the pharmacy channels is in the high teens and we are the most recommended brand. As mentioned in the press release, our market shares across Central and Eastern Europe are establishing new records. Our shares are up in seven of ten categories with over a 3 point gain in toothpaste and over a 2 point gain in toothbrushes. In the bar soap and shower gels categories we have maintained our number one position across the region. And further new product activity in 2006 should maintain these excellent results. So looking ahead unit volume in Europe excluding divestments should be up low to mid-single digit for the first quarter and at least that for the full year. Operating profit is expected to be up modestly for the first quarter and up mid-single digit for the full year. Turning then to Latin America. Latin American volume increased 5%, pricing increased 5.5% and currency added 6% resulting in a sales growth of 16.5%. Advertising was up very strongly, up absolutely and as a percent to sales. Operating profit increased 16%. Business is strong across the region and marketshares reflect this. In Mexico our most recent toothpaste share is back over 81% despite intense competitive activity. The launch of Colgate Max Fresh has contributed to the excellent performance and in addition, a recent program called Red Storm designed to strengthen our presence with our exclusive distributors has delivered good results. New products in the personal care category, Palmolive's Nutri-Milk bar soap has also met with success. This is a premium product, our first entry into the moisturizing segment. In Mexico it already has almost a two share and has been incremental to the franchise. Our Mexican shampoo business is also doing well. Palmolive's Optim has been the first brand to launch a shampoo, conditioner and treatment line to enhance the color of natural or tinted hair. The line comes in four variance for different hair colors and was launched in September with complete media and in-store support. Initial acceptance was excellent. It appears this will be largely incremental to our existing business. Our Brazilian business is also very strong. Marketshares are up in seven of nine categories including toothpaste, toothbrushes and mouthwash. Our Colgate brand reached record share levels. Contributing to this good performance is our relaunch of Colgate Total, Total 12. As in other parts of the world this has been accompanied by very powerful testimonial advertising. In Brazil the share of Total toothpaste has doubled since the relaunch. In the liquid soap category we also achieved outstanding results in Brazil. Strong growth from Palmolive's Aroma Therapy, Protex and Palmolive's Natural resulted in Colgate obtaining leadership in this segment with a 23.6% share up almost 7 points from the year ago period. Across the region our toothbrush business is doing very well driven by market share growth in key markets such as Brazil, Mexico, Colombia and Venezuela. Colgate is now the number one brand. Our Colgate 360-degree toothbrush will be throughout the region in 2006. As you know it has been extremely successful in markets where it is already introduced, so this bodes well for the continued growth of our toothbrush business in Latin America. Looking ahead volume in Latin America is expected to be up at least mid-single digit for the first quarter and full year, and operating profit is expected to be up double-digit for both the first quarter and full year. Asia/Africa; volume in Asia/Africa increased 6%. Pricing was positive half a percent, while exchange was negative at 1.5%, resulting in a sales increase of 5%. Advertising increased double-digit up absolutely and as a percent of sales and operating profit increased 13%. And as elsewhere new products played a critical role in the solid performance in the region and this is reflected in good market share performance. In India, Colgate sustained its leadership position in toothpaste with 47.5% share in December. For the full year our share increased to 47.4%, a growth of 80 basis points versus last year. A new product, Colgate Active Salt toothpaste achieved very strong share results, 2% in just the fourth month of launch which was supported with a nationwide 360 program including a very successful advertising campaign which achieved good recall and has helped to grow the Colgate equity image. In the Indian toothbrush market Colgate strengthened its leadership with a 32.9% share in December reaching record high share for the second consecutive readings. Across the country great progress has been made in further expanding our rural distribution offering, further opportunities for growth. In China, we increased our toothpaste leadership with our full-year share at 32.8%, up half a point from the year ago. This strong performance was led by the premium segments and the launch of Colgate Max Fresh accompanied by a regional 360-degree program which included advertising. In the personal care category we have achieved excellent results in the Philippines with the relaunch of Palmolive's Natural shampoo. Palmolive now has the highest share in the last ten years, almost 22%. Part of our success was driven by using small sachets which has resulted in much better distribution across the many small stores in this country. Our business in the more developed country of Australia is also strong. Our toothpaste share is up a full point, 65.4%. Colgate Total itself grew to the number one toothpaste sub brand with a 22% share, up 2.5 points. In toothbrushes the launch of Colgate 360-degree toothbrush resulted in a share gain of 5.6 share points bringing our manual brush market share to 40.1% on a full-year basis. Looking ahead volume in Asia/Africa is expected to be up mid-single digit for the first quarter and the full year. Operating profit is expected to be up modestly in the first quarter and should be up high-single digit the full year. Finally, Hill's. Hill's volume increased 5% with good growth both domestically and overseas. Pricing increased 2.5% offset by a comparable decrease in resulting in a 5% sales increase. Advertising increased maintaining it's high-level as a percent of sales and operating profit increased 5%. As for the Colgate business new products played an important role in the quarter for Hill's. One of the most successful ones is our Prescription Diet j/d, a diet which helps dogs with arthritis. In the U.S. our volume shipments of j/d exceeded our estimate by 50% and we were able to roll it out globally in less than six months. Similar results are being achieved overseas. Two other new products, Prescription Diet d/d and z/d for dogs and cats were also launched. D/d addresses all types of inflammatory skin conditions and z/d is now considered the gold standard in diets which helps with adverse food reactions. Here in the U.S. we have expanded our very successful shelter program. This program provides ongoing nutrition training for the staff of not-for-profit animal shelters, as well as informative e-mails with nutrition topics and helpful retail merchandising tips and a variety of in shelter signage. The objective of this activity is to stress the importance of clinical nutrition to pet owners at a key time in their decision-making process while encouraging trial of Hill's products. In addition, specific programs from the pet channel have driven consumption and it looks as though that momentum is continuing into this year and several of our large accounts are off to a good start. Our international business continues to grow especially in the higher growth markets which are sustaining strong double-digit volume increases. Looking ahead volume at Hill's is expected to be up mid-single digit for the first quarter and full year. Operating profit is expected to be up high-single digit for the first quarter and full year. So in summary we are delighted with the strong finish to 2005 and are excited about the prospects for 2006. As you know, gross margin increases are a key element of our financial strategy and our ability to deliver good consistent results. It is very encouraging that all the programs we have in place to increase gross margin are delivering good results and also offer further potential. In particular, our worldwide effort to increase our commercial spending efficiency shows great promise. In our pilot countries such as the U.S. we are already seeing excellent results as evidenced by a solid increase in pricing, but this is just the beginning. As we roll this program out globally we should see further savings around the world. So we look forward to sharing our results with you as we go throughout the year. And now, Sheila, I think we are ready to open it up to questions. Questions & Answers:

Q - Wendy Nicholson: My first question has to do with Europe and the profit margins you are seeing there. It doesn't look like you're looking for much expansion next year, but if I'm not mistaken that has been where the lion's share of your restructuring initiatives have been. Can you comment on whether you're just reinvesting more money or whether there is a mix shift there? What is driving the lack of margin expansion in that region? A - Reuben Mark: I don't think, Wendy, that the majority of the restructuring efforts is really in Europe. We have a very major effort in this country and elsewhere; you may recall we announced the closure within the last six months at one of them in the last two months of our two biggest plants in the United States. But looking specifically at Europe the expectation for next year is that it will be a plus volume year as this was. As you know our volume was up about 6.5%. In terms of operating profit, operating profit was up this year overall in Europe and is expected to be up more next year. We believe starting in the first quarter. As I think Bina mentioned in her write up that the volume trends in Western Europe which were I think for everybody are not as robust as one would want, have most recently picked up a bit and they have started off the year it would appear quite well with Eastern Europe continuing there very strongly. Q - Wendy Nicholson: I thought and I may be mistaken but I thought looking at the 10-Qs last year that the lion's share of the charges you had taken at least through the first nine months, were related to the Western European operation that you were shutting plants there. Is that not right? A - Reuben Mark: That is right; but again it continues to move through. Don't forget this year, late this year we took the charge for our Jeffersonville plant which is the biggest plant in the United States, and that process is literally going on now, we just got union agreement and so on. And I think you will see more of the same. Q - Wendy Nicholson: My second question has to do with that plant closure in the U.S. Where are you going to move the oral care manufacturing? And if you end up moving some of that to Mexico, is there hope that some of the pressure you have seen on the Mexican margins from all of the competitive activity, you have got light at the end of the tunnel because there is going to be more volume in that market or what is the thinking there? A - Reuben Mark: First, there is an elaborate process as you would imagine to determine whether we open up the new greenfield site in the State of Indiana or in other states, and we have been engaged in that process for a number of months. I don't know if the announcement has, the announcement has in fact been made and amazingly it is going to be, we have a big plant in Morristown, New Jersey. This is going to be in Morristown, Tennessee and everybody knows I got a nice letter from the Governor of Indiana yesterday where we saw the big Hill's plant of course. But it is going to be, the bulk of the production is going to be moved to Tennessee with some very significant onetime and ongoing savings. And the production in Mexico will not be obviously for Mexico, it will be for some areas outside of Mexico. But when you say the margin pressure in Latin America, my sense is that our EBIT in Mexico on an ongoing basis is 7 or 8 points, i.e. 800 basis points higher than our total company, that is about 30% and we are budgeting at 31% makes year. So I don't think again, you may know more or different than I do, Wendy, but we do have a very good margin in Mexico on an operative profit level. Q - Wendy Nicholson: I'm sorry, you said operating margin and I'm done, sorry, the operating margin in Mexico is budgeted for 31 in '06? Is that what you said? A - Reuben Mark: Yes, I said it is running now at about 30%. Q - Wendy Nicholson: 30% for '05? A - Reuben Mark: 30% to sales which as you know our total company is 20, 21, 22. So it is 800 basis points better and as budgeted up, on a percentage basis slightly and more significantly, on an absolute basis. Q - Wendy Nicholson: Terrific. A - Reuben Mark: I'm not sure that, Wendy, I was trying to say something. One of the notes out this morning talked about Colgate as a defensive situation, and I just wanted you to know that that A) that is really true, and B) all you have to do is say something critical and you will see how defensive I will be. Q - Wendy Nicholson: Somehow there is no doubt about that. Thanks, Reuben. Bye-bye.

We will take our next question from Amy Chasen with Goldman Sachs. Q - Amy Chasen: First of all you guys sound much more excited about this reduction in trade promotion strategy than I have heard you since you first discussed this last December, December of '04. Number one, am I reading that right? And number two, are you ready yet to quantify what that opportunity may be now that you have a couple of quarters of this under your belt and you're actually starting to see it flowthrough in the P&L? A - Reuben Mark: You are reading it correctly. We are probably not ready to quantify it although I have been saying and I think I may have said in the last conference call, that as we are getting a better look at it, it looks like it conceivably could have the magnitude of the value we are going to get out of the restructuring or even more. I checked this morning with both the chief financial officer of the company and the chief legal officer of the company, because I told them what I was going to say and that from what we have seen so far my strong belief is that we have got a tiger by the tail on this half, and we will be seeing over the next several years some very exciting stuff coming out. Q - Amy Chasen: That is great. Just turning to the restructuring, can you just walk us through what the savings were in '05, what you expect them to be in '06 and what you expect them to be in '07? Because I believe last we spoke some of those numbers had moved around from your original expectations a bit. A - Reuben Mark: They are the same as we talked about last time; that is they have not moved since we talked about them last time. In 2005, Amy, we took a charge of $145 million in total, and generated savings of about $35 million. The expectation in 2006 is that we will have charges of about 228 million, with savings of 70 plus million. 2007, a little further out, 90 million in the savings and 110 in charge. You understand, Amy, that those sound precise, but of course as those projects are actually put into effect, some of them cost more or cost less and the savings are more or less as I am sure you are familiar with that. Q - Amy Chasen: Right, but I think originally the savings in '06 was going to be 100 million so is it fair to say that the savings are more backend loaded because of the point you just made which is timing of projects? A - Reuben Mark: Slightly. The overall savings we expect are slightly higher. The charges are somewhat less and there is that, what we view is relatively small difference in timing because of some changes required in the scheduling of some closings. However, I have to say from my own perspective relative to the conversation we just had about other areas of margin growth, gross margin growth within the Company, I am more comfortable than I have been. Q - Amy Chasen: Okay, great. Last but not least a quick one, is there any way that you could give us volume guidance on a reported basis in addition to the numbers that Bina gave by region excluding divestitures? Because I think that might help us when you guys ultimately report your numbers? A - Reuben Mark: Okay, let me take a crack at that. We don't really have that, you're talking about volume ex divestitures. Q - Amy Chasen: No, I'm actually talking volume including divestitures just as you reported what you're expectations are. A - Reuben Mark: I don't have that, but I do have, Amy, for each quarter of next year what the sales as reported and sales ex divested are, and there is more or less a starting off the year, a 200 basis point difference, declining obviously somewhat as the year goes through to less than 100 basis points difference in the fourth quarter. And I'm looking at the financial people but basically you could transfer that pretty clearly to volume. That is as much as I can give you because we haven't worked it out on that basis. Q - Amy Chasen: Okay. I will follow-up with Bina on that. A - Reuben Mark: Did you follow that? What was not clear? Q - Amy Chasen: It was clear. I just was hoping for a little bit more specificity but I will just do it off-line because I have asked enough questions. A - Reuben Mark: No, that is okay. We are expecting, as you know our targets are normally 4 to 7% volume and this year, or total year we had 6.3, last year we had about the same. We are expecting the first half of next year to be more or less in line with that range. Good solid volume. We would hope some positive price, in fact we are planning on it, and good gross margin growth. Q - Amy Chasen: So in other words you would expect volume excluding divestitures in that 4 to 7% range in the first half but more like 2 to 5 on a reported basis? A - Reuben Mark: Yes, yes. Yes, but the 4 is unlikely but, yes. Q - Amy Chasen: Okay. Great, thank you.

We will take our next question from Lauren Lieberman with Lehman Brothers. Q - Lauren Lieberman: First I was hoping we could go through the breakdown, the puts and takes of gross margin this quarter? A - Reuben Mark: Say again, I'm sorry. Q - Lauren Lieberman: If we could go through the puts and takes to gross margin, I know Bina listed what the benefits were but if we just could quantify it. A - Reuben Mark: Sure. And again, for everyone we go through this normally each quarter. As you know in the quarter the gross profit was up 100 basis points. In that we got plus 70 from pricing and going back to Amy's question this may give you a little bit of guidance of how potentially potent this promotional SAP enabled promotional ROI kind of thing is. About 50 basis points of the 70 in pricing came from actual price increases around the world and 20 points came from gross to net reductions, i.e. promotional efficiency. And we only have the program really going in the United States and Mexico. Continuing, Lauren, restructuring gave us 50 basis points. Our funding the growth savings which are our whole panel fee of internal savings programs including our capital expense budget and all the other programs we have gave us 130 basis points which is very good and gives us a very strong year in that savings area. Material prices was a -200 and then all other mix changes and so on were .5, 50 basis points up. So you add those all up together that comes up to 100 basis points. Just as an aside, as those of you who follow Colgate for sometime know that historically we have looked for and gotten in a range of 50 to 100 basis points a year. And that has even with sales level, some years that were modest, that has allowed us to, that combined with a drop in overhead, has allowed us to increase advertising and deliver double-digit profit. For the last couple of years what has happened is the increased promotional spending in the market, plus largely loyal driven raw packing material cost price increases have not allowed us actually or anybody else to get that. We are very encouraged to the point that we can say that we think that going forward, we will still be able to again be able to get on a regular basis 50 to 100 basis points. Because number one, our business is becoming less and less dependent on any oil source; as you know our most oil intensive business was detergents and as you see we are exiting those businesses. And secondly, our own cost savings combined with these promotional costs savings will allow us to shoot for that 50 to 100 basis points range. Q - Lauren Lieberman: Okay. What was the contribution, I'm assuming it is a mix of exiting the detergent businesses this quarter? A - Reuben Mark: Okay. Q - Lauren Lieberman: And if you also have that for the third quarter. A - Reuben Mark: What you have this quarter is of course two aspects. Hang on one second. I have prepared something on that. In North American, the North American business on a full-year basis was $170 million or so; just interestingly again it makes the point about mix change and about what businesses do we want to be in and so on. The margin was 34% as compared to the total U.S. company including detergents at about 20 points, 2000 basis points higher. Operating profit was 13.5% with operating profit of the division including the detergent number, about 1000, 10 percentage points higher. In 2004 it represented about 6% of the division sales, this year 3.3 and next year zero. Similar, and as you know, we announced the Asia/Africa more recently the numbers are virtually…. Q - Lauren Lieberman: Okay. A - Reuben Mark: Except that…… Q - Lauren Lieberman: Okay. And then with the impact bigger though in the fourth quarter than it was in the third, because it certainly was on the top line. I'm just trying to understand how big of a driver of gross margin was that? A - Reuben Mark: Next year we would expect our gross margin worldwide to be improved by the existing sales of detergent, that is to say a couple of quarters or however many it is of the U.S., and basically four quarters of Asia will be between we would hope between 30 and 40 basis points. Q - Lauren Lieberman: Okay, great. A - Reuben Mark: Gross profit right off the top. Q - Lauren Lieberman: Right. A - Reuben Mark: By getting to the top, let me say. Q - Lauren Lieberman: Then one more thing was trying to pick which one I want to ask. On Latin America seeing pricing and currency both up so strongly and moving in the same direction, I know we have seen it one or two quarters before, but I just wanted to go into a little bit more detail on why and basically how that is possible. I mean to be raising prices when currency is also a positive and is that a dynamic we should expect to continue? A - Reuben Mark: Yes, in Latin America my recollection is that the breakdown of the pricing is like, let me give you that, the total change in pricing as you see from the chart you have before you, was 550 basis points, 5.5%. Of that lower promotion, largely in Mexico but throughout the division as well, was 2.3%, 230 basis points and the price increases per se were 3.1. That is not a typical, a 3% price increase is not atypical for Latin America and clearly it has to be handled on a category-by-category basis. But some of the competitive threats in some of our categories that were really quite excellent a year or two ago have receded somewhat. Who knows? We went back over 81% of the toothpaste market in Mexico, Venezuela about the same and so on and so forth. And our division wide toothpaste share is at an all-time high, so that allows a bit more flexibility. But as always we will be very cautious. Our expectations going forward for Latin America are interesting. We expect volume in the mid to high single digits throughout next year with probably Brazil and Venezuela leading the way, Mexico slightly behind those, but still they're quite positive. So volume looks to be a lot of spending in there. We had a lot of spending this year and yet operating profit is expected up next year double-digit, it was a double-digit this year as well. Q - Lauren Lieberman: So advertising spending keeps rising ahead of sales? A - Reuben Mark: This year advertising spending was, even though sales were up 16%, our advertising spending was ahead of that primarily in media, and next year it is budgeted ahead of sales. Q - Lauren Lieberman: Okay, great. Thank you.

We will take our next question from Chris Ferrara with Merrill Lynch. Q - Chris Ferrara: I was wondering if you guys can talk a little bit about the difference in the U.S. and growth between the Wal-Marts and club stores of the world and the track channel. Because obviously the U.S. growth is huge and the IRI data, which again we know is limited, is showing somewhat of a different story and the diversion seems to be bigger than ever. Is there any color you can give to that? A - Reuben Mark: The color I can give you is what I believe are the facts, but you have to decide that for yourself. We periodically, when asked, give how our top ten accounts, which are obviously Wal-Mart, Target, Sam's, Kroger, Costco, Dollar General, Family Swiss and so on, compare with the rest of the country. And for the quarter the top ten were up 10% in volume and about the same, slightly more in sales, or up actually 11% in sales and the other was up 3 or 4% in volume. So that's how we get the total 7% volume increase, case increase and volume increase in the United States. I think Bina mentioned in her write up that actually our volume, as shown there, excluding there, in the United States portion of North America, the higher end is up, as I recall, 8% or so versus say a 10% quarter last year. So good volume. Inventories haven't changed either, so it looks quite good. Q - Chris Ferrara: And then I also wanted to dig into that a little bit. Obviously you're doing a lot of things with more efficient gross to net and just marketing in general looks better, advertising is up. But is there a way to think about that in the context of the new product pipeline? And do you view, is new product vitality in the U.S. much better than it was say a year ago or a year and a half ago? Or is it really sort of similar and you're just marketing your new products better than you were before? A - Reuben Mark: I don't know that there's any difference. Again, we focus, everybody is going to yell at me when I say this, but we focus less on, we launch a lot of new products around the year and each of the product groups in our creative innovation centers, the acronym is CIC and I never remember what it stands for, but they are creative innovation centers, really are doing a very good job and the pipeline is full. But again, volume is a function of everything going on, a lot of new products around the world, a lot of new products in the United States. Our marketshares are generally quite good. We're ahead in toothpaste, we're ahead in fabric softener, we're ahead in toothbrushes and so on and so forth, which I think Bina told you. I don't think anything is different being done except that we have more money to spend, number one, because of the increases in gross margin. And number two, as you remember a couple years ago we, and again, I took the responsibility for it, we chased Simply White whitening gel a bit and took some money away from the big guys and that's been….. Q - Chris Ferrara: And then just on Latin America, I think in Bina's prepared comments you described heavy competition there and then I guess Red Storm which is I guess your promotional program. Can you talk about that a little bit more? A - Reuben Mark: Yes, I think each divisional president and marketing director came up with wonderful names to describe and they're always dynamic and robust as that is. But Colgate toothpaste around the world, to the people who have been in the Company a long time it's known as Big Red. So this is the Big Red Storm and actually it has been quite successful in getting our share, as I said, in Mexico back to 81. Latin American shares are quite strong, for example, and volume, overall. I can read you in 2003 our overall Latin American share, and I think its 16 countries, was 72% of the market. 2004 when there was a slight erosion in Mexico and we were down to 72, we were-- our year-to-date is 72.9 and the latest share was 73.4 throughout Latin America. So it's a good trend and whatever name they put behind, Red Storm or Purple Tempest, it seems to be working. Q - Chris Ferrara: Thank you very much.

We will take our next question from Bill Pecoriello with Morgan Stanley. Q - Bill Pecoriello: A question on the gross margin outlook for '06. You gave us the 30 to 40 basis point contribution from the divestiture. What are you budgeting on the raw material, pricing the other components of that in terms of that long-term 50 to 100 basis point improvement? A - Reuben Mark: Okay. To reprise the information we've been giving you, just to bring it up to date, this year we budgeted a cost increase which was basically an increase, a substantial increase in the Colgate part of the business and a decrease in the agricultural commodities. But taking them all together we budgeted a 1.7% increase in all packing materials. The way it's turning out or has turned out, because the year is done obviously, it was 3.8%, so 200 basis points more than we expected and, as we told you, the mix changed the volume and the gross profit savings more than offset that which we're quite proud of. Next year the budgeted number, equivalent to the 3.8, is 2.5% and that assumes that Hill's turns around a bit, instead of their costs going down they're going to go up slightly, but that the consumer products, the Colgate area is only going to go up between 2.5 and 3 as compared to 5 this year. That's our expectation. Who knows? We are less dependent on oil than most, but any movement in oil, obviously either way, helps or hurts us at least slightly. Q - Bill Pecoriello: And then overall you'd expect the gross margin up on the higher end of the 50 to 100 because of the 30 to 40 basis points from the divestiture benefit? A - Reuben Mark: Financial people are nodding, yes, but my sense is I would rather be conservative. We will be in the 50 to 100 basis points. Since the operating people are in the room, I would be very disappointed if it was not on the high-end. But, yes. Q - Bill Pecoriello: And also if you can comment on the competitive environment. You had mentioned some of the competitive threats in Latin America had receded a bit. Anything elsewhere in the world including North America where, again, we have that limited view of the measure channels where we saw increased promotions from the competition, anywhere else in the world that you're seeing that? A - Reuben Mark: I guess you have to get competitive data from the competition. But for example, in the United States there, as you saw, in effect by more efficient promotion spending the price went up slightly and very affectively and yet we didn't lose any market share as a result of it. So that would indicate that we remain competitive. It's tough to say. A, it's tough to say it and, B, all you have to do is say that hey, it's diminishing in country X or country Y and they may dial it up just to prove you wrong. But at any rate, as always our job is to take our own destiny in our own hands and the whole concept underlying with what we call the Colgate business plan, CB, another acronym, CBP, which is the SAP-enabled promotional efficiency improvement, plus a lot of other things, the concept there is to find ways to build market share while still getting more efficient with our spending. Q - Bill Pecoriello: And then just finally, on the U.S. innovation pipeline, the release didn't mention anything in oral care in terms of products. Are you still planning Colgate Oxygen in the U.S. and, if not, are there other products in the oral care pipeline for the U.S. in '06? A - Reuben Mark: There are certainly other products, perhaps including that one, in the pipeline. But you would know, Bill, that we could not tell you if they have not yet been announced to the trade. Our oral care business in the United States and around the world is healthy. I usually give a U.S. questioner or if somebody else asks the question of how our core businesses have done, and in the quarter our oral care business is up 8% worldwide in volume and personal care is up 4% and home care is up a percent or whatever, 1%, just exactly the way you would prioritize them, and Hill's of course is up about 5% as well. So the priorities that we have talked to you about are indeed working. And on an oral care basis we have a budget that's quite healthy and with the spending to support it for 2006. Q - Bill Pecoriello: Great, thank you very much.

(Operator Instructions) A - Reuben Mark: Sheila, could you talk a bit louder or get closer to the mike or something.

We will take our next question from Bill Schmitz with Deutsche Bank. Q - Bill Schmitz: Can you just comment on what your FX assumptions are for the year? The reason I asked the question is that I think in the press release you blamed a lot of the profit decline in Europe, which is obviously correct, on the currency decline. But how much of the Latin American profit enhancement was from currency as well and then just kind of some of the assumptions for next year? A - Reuben Mark: Okay. I don't know that we blamed it, it was in local currency, it was what it was and then translated it's a fact of life. Our assumptions for next year versus today's spot are that on a Europe basis, let's take a euro, that we are assuming that our budget is $1.23 per euro and this morning it was $1.227. Again, there's a lot of things that can happen between now and the end of the year, but that's in Europe we're at least on currently. We are assuming in Latin America appreciation in the currencies. Mexico versus the current rate of 10.50 we're assuming 11.30 which is down 6% for, Venezuela has held up at fairly rigid. Brazil we're assuming 11%, Columbia down, and so on. So that has been factored into our calculations. Whether or not it happens we shall see. If it's worse than that we'll have to find a way to cover it, if it's better than that, which so far it is, that will give us a little extra tailwind. Q - Bill Schmitz: And then this is my last question. How far along are you on moving the supply chain from a regional supply chain to a global one? I know there's a pretty tremendous profit opportunity there and I just want to try to understand how far along you are on that process? A - Reuben Mark: I think the restructuring is one part of that and that is moving along well and it is expected to be completed by 2008. So you could take that as a guidepost. But the savings come in not precisely on a linear basis as we talked earlier in response to Amy's question. But there are a lot of other things that are going on and some of them will be very quick and some of them will be a little longer. Interestingly enough since this Colgate business, as an SAP enabled Colgate business planning, an important element of which is promotion efficiency, has other supply chain implications which are going to be working themselves out over the next several years. It has a lot of cascading effect. Q - Bill Schmitz: Just get an update on this, the way I understand it there are seven different instances of SAP at Colgate and you are trying to combine that into one, unified global SAP platform. Is that done yet or is that still work in progress? A - Reuben Mark: I guess I am not able to, Steve (ph) you want to talk? (Steve - Unidentified Member) (inaudible - microphone inaccessible) A - Reuben Mark: Javier just said that we have seven variations of SAP which can be run together I understand. Those are going to be cut; everybody, essentially everybody will and is on SAP and they are interchangeable and but those variations are going to be cut to four. We are linked without question universally, I mean literally Ian and Javier are sitting in the room, and if they want to dial up what our sales were this morning in whatever division they can do that, get a consolidation, get a by sub analysis and everything else. That exists today and will continue. And that is one of the things that allows us to expand this model that is being developed in the United States and Mexico on the promotional efficiency. You should know that there is a fully dedicated group with salespeople, finance people, IT people and whatever else and distribution people working on this and it is led by Seamus McBride who is a very experienced executive who is also president of our U.S. company, since they basically pioneered it. He is leading it around the world. And we have a whole schedule of rollout and everything else. Each quarter we will be reporting to you on that. Q - Bill Schmitz: Great, thank you very much.

We will take our next question from Linda Bolton Weiser with Oppenheimer. Q - Linda Bolton Weiser: Maybe I missed this but did you give some information about the next regions or countries where the trade efficiency program will be rolled out? A - Reuben Mark: I didn't and that is a little premature because people are basically landing in airplanes now to take them through it. There was a trip that Seamus made to Asia, the Far East actually with Ian, and I was just coincidentally talking to him last night and he was delighted with the reception. He took a team out there and they made presentations to several more countries. His response was when you are in New York you get people, well, how about this and is this good or is this not good. And then you get out in the subsidiaries and they really, really want to grab hold of it. We are going to have to do it I think as it goes rather than in advance. But I would guess that by the end of this year we will have, I would say 40% of our business at least beginning the program. Then over the next year or so it will be completed. Q - Linda Bolton Weiser: Okay. And one more thing. You had mentioned some higher costs for Hill's in '06. What are those, are those the corn related costs? A - Reuben Mark: No, I think it was simply this. It was that as you know agricultural commodities in 2004 skyrocket. This year they came down a little, they came down substantially off those historic highs, and now they are going back to their normal levels. It simply means that the normal kind of cost increase for agricultural prices, so you won't get that onetime benefit. However, Hill's has a lot of gross margin stuff going on and their gross margin so you, I will tell you what the impact of that is. Their gross profit this year, whereas the total Company all being said, was up 10 or 20 basis points. Hill's was up almost 100 basis points and is expecting it to go up again next year, despite the couple percent increase in cost. They had some price increases this year which will get the full year effect next year. Q - Linda Bolton Weiser: Okay. Thank you, very much. A - Reuben Mark: Why don't we say a couple more questions.

We will take our next question from Justin Hott with Bear Stearns. A - Reuben Mark: There are apparently six more questions. Why don't we take the six, and then call it quits.

Yes sir. Justin Hott, Bear Stearns. A - Reuben Mark: You don't have to call me sir although that isn't bad. Q - Justin Hott: That wasn't me, Reuben. Can you maybe give us a little more color, you are talking about a tiger on the tail on this promotional spending; how once you roll it out into a market, maybe some of the learnings you have had, in the initial markets and how it becomes a sustainable multiyear reduction in costs? A - Reuben Mark: First of all there is some proprietary aspects do it. A lot of proprietary aspects to it, and I think that as we go along we will be doing that. I don't think we can do it now I was just joking earlier because I perceived several presentations on both the concept and the execution, and I am not particularly dumb and I still don't fully understand it. So it would be difficult for me to pass along. But nonetheless it is a quite interesting, complicated mechanism. I don't mean to be mysterious, seriously Justin, but we're just at the early stages. We have some surprisingly strong results back and we think that will continue. Now don't forget we're coming off a period where everyone escalated their promotion spending quite dramatically so it is coming off a high-level. Of all times that is the great time to be implementing this. I think we are able to do it because with our kind of focus we are not in any new businesses, we have a pretty tight focus and once, all the history of Colgate says, once there is an effective model developed and it goes out into each country it grinds away and really generates results over time. This is going to be an ongoing story and we will tell you a lot about it. Q - Justin Hott: The key thing though it is just not a, you just don't roll it out in a market and then it works for a year and then the growth stops? A - Reuben Mark: One would hope not. It is designed basically to in a sophisticated way to supplement our original and continuing strategy which was we have to find ways to put more money into media advertising and sampling, by driving margin up and driving overhead down. That was eroded by the period when promotion spending went up just a cost of doing business. Now whether or not competition does anything or not we are going to try to find a way worldwide to spend less money but get at least the same effect. It may sound like alchemy and maybe it turns out to be but I really don't think so. Q - Justin Hott: Can you comment on your market share gaps in oral care versus your main competitor in China, Brazil, India? Or should we do that off-line? A - Reuben Mark: No, we can do it online. Q - Justin Hott: Are they growing? A - Reuben Mark: I didn't know that we had a gap versus our in China and I didn't….. Q - Justin Hott: Leadership is it expanding…. A - Reuben Mark: India our market share is 49%. And touching 50 in toothpaste and about 70 as I recall in powder. The nearest competitor which is a worldwide competitor has in the 20s. A - Ian Cook: Nearest competitor has just over 30. A - Reuben Mark: Nearest competitor has just over 30. Brazil, my recollection is we have a 62 share and the nearest competitor in China we are the, we have 33 and I think Procter & Gamble has, got to get it from them, but our nearest competitor has in the mid-20s. I'm not exactly sure what you mean by….. Q - Justin Hott: I just want to know if your gap, if your leadership positions are widening versus competition or…… A - Reuben Mark: They are in certain countries, and it is China is obviously a continuing battle. Russia our gap we actually took over the number one position during this last quarter and that I think gap will widen. The gap in Europe is widening, as a result of our own share gains in GABA. We haven't talked about GABA but GABA is doing extremely well with market share gains in each of their countries. And as you know they dominate the pharmacy channel, so our lead is widening in Latin America. In Europe, India, Australia again we can do it off-line, but I can give you a country by country analysis. Q - Justin Hott: That is perfect, thank you very much.

We will take our next question from Joe Altobello with CIBC World Markets. Q - Joe Altobello: Have you guys announced any price freezes in Argentina? A - Reuben Mark: Not to everybody is concerned is shaking their heads, we have not. Q - Joe Altobello: Is there a risk that the government could come to you next? A - Reuben Mark: Don't forget and actually, Joe, I learned earlier today, being a Swedish Italian and she said I didn't realize I thought from Spanish I thought Altobello means meant tall bell, but it really means tall and handsome. Q - Joe Altobello: Indeed. Little ironic though. But as you know in countries and I believe it is true in Latin America and I am looking, Ian, tell me, that we have a list price which is very much above the actual set, what we actually sell it for with a series of discounts so that if a price freeze comes along we can basically remove one or more of those if we so choose. But as yet our business in Argentina is actually quite good and Argentina, someone just wrote a note to me, Argentina price actually was up 130 basis points in the quarter. Q - Joe Altobello: Secondly, in Europe have you guys had any discussions with hard discounters about placing product there? A - Ian Cook: As you know Joe, this is Ian, as you know the European discount scene is split between the hard discounters like the Audi's and Needle's and the soft discounters like Padillos and Mettos. We are quite well-established with the soft discounters and have begun in certain markets, beginning with Germany discussion with the hard discounters who now on a selective basis appear more open to branded goods. Q - Joe Altobello: So is there a chance by second half of this year maybe you get some product there? A - Ian Cook: We will see how the negotiations go but that is the objective. Q - Joe Altobello: Okay. And finally on the stock buyback you guys I guess bought back about 800 million in '05, should we expect a similar number in '06? A - Reuben Mark: We budgeted $600 million of buyback versus the 774 this year, 2005. Yes, 774 but my sense it may be more than that. Q - Joe Altobello: Okay, great. Thank you.

We will take our next question from John Faucher with JP Morgan. Q - John Faucher: I will give you five bucks if you can tell me what my name means in French. So it certainly doesn't mean tall and handsome I can tell you that. A - Reuben Mark: Interestingly in an obscure full Testament language the name Mark means short and bald. Q - John Faucher: Was wondering if you can give us an idea just on a run rate basis, now that we have gone through a year of significant reinvestments from a marketing standpoint on the advertising and media lines, how do you feel about that basin and what do you think is the appropriate run rate going forward from that standpoint after the big increases we have seen over the past year? A - Reuben Mark: Fortunately at least in the budget we have sufficient aspirations in the gross profit area and the containment of overhead and the various savings programs, that we are able to look at and increase a further increase in total advertising especially in media. For example, our advertising as it appears in the annual report grew in 2004 10% weighted heavily towards the second half as you remember. This year that is 2005, it grew 12.5 or thereabouts and next year in the budget we have a further growth a bit higher than the 12% and yet still delivering the double-digit EPS growth. Now that depends obviously on our making the savings goals, making the promotion savings goals, getting the gross margin, so one and so forth but that looks quite good. What we found is we are getting good mileage out of that money, especially as we spend it more efficiently and it is working. A - Reuben Mark: It means broke as in having no money. Q - John Faucher: That is exactly right. I will drop the five bucks off later today, I will come across the street. A - Reuben Mark: Actually it demonstrates the efficiency we sent out for and got it. What was I saying? Oh, yes, so that if everything goes as planned we will be able to keep increasing advertising, at least reasonably so and that hopefully should lead to more market share gains. That after all is the strategy of dominance that we believe in. That is how we get there. Q - John Faucher: Okay, thanks. A - Reuben Mark: Don't forget, John, that we long ago said that we are trying to change the ratios of the business so that again gross profit gets up to the '60s, overhead keeps going down as a percentage of sales, and the advertising line specifically, the media keeps growing driving topline again. It is reasonably consistent with what we have always done.

We will take our next question from Alec Patterson with RCM. Q - Alec Patterson: Just wanted to circle around on the gross margin outlook and more on the longer-term thought process behind it. When you announced the restructuring over a year ago I think you were suggesting that the longer-term trend would migrate from the 50 to 100 basis point increase to the 75 to 125 basis point increase benefiting from that restructuring program. So I wanted to circle back to that because I don't hear that 75 to 125 talked about as much anymore and just wanted to get a sense on that from you? A - Reuben Mark: It is a good question but that is inadvertent. I think that the 75 to 125 was after the second or third year of the restructuring when all those savings took hold. I would reiterate that that is a problem. If you really want to know the truth which is not a great If actual budget for gross profit for next year is in the 75 to 150 range, not the 50 to 100 range but again that was why I was saying that everybody was nodding and I was being cautious. I would be again very surprised if we're not in that range next year. Q - Alec Patterson: Just trying to look at this from the components that you guys lay out every quarter, materials cost increases, savings programs, funding the growth, the restructuring program, pricing, the program you have got going, I mean even if you assume material cost increases about 100 basis points negative to gross margin, you still are looking at some significant increases over the next few years. Is there something else offsetting that that would keep it, I mean frankly less than 150 basis points a year for the next couple of years? A - Reuben Mark: You are saying it'll be higher than we are saying? Q - Alec Patterson: I am putting the numbers together of funding the growth that is 100 to 150 basis points a year, restructuring of 50 plus a year, pricing that is probably on the order of 25 to 50 a year if you have got high raw material cost. The program sounds like it is 25 to 50 a year; so you put all of those together we are talking at least 150 basis points a year gross margin expansion. And obviously I am missing something because you seem to be suggesting less than that. A - Reuben Mark: Yes, you have been around a long time Alec as I have been and many people sitting around this table and other tables that are listening. We may very well get more than that, but you know that if we say 150 basis points and it comes out 148 we are in trouble. And that we're running this on a systematic basis over time to increase the gross margin we pay for advertising. I am more, when we started the whole thing with a 39% margin, I am more optimistic now with a 56% margin that we can go up the next 500 basis points than I was originally. Simply because we have tapped into some very interesting far more sophisticated kinds of programs. Maybe we are being conservative but as you would expect as a shareholder that that is a desirable thing. Historically we have been. Q - Alec Patterson: So my being around a long time is not a senility thing in your mind, in terms of the numbers? A - Reuben Mark: I didn't address that. Q - Alec Patterson: Okay, fair enough. Just quickly CapEx, 390 for '05, I thought it was going to be ticking up faster than that with the restructuring program which has pushed off a little bit, so I am just wondering and looking for '06 CapEx guidance? A - Reuben Mark: '06 including the restructuring the budget is 524 which is higher than virtually any year on there. Without the restructuring it is 382 which at 3.2% sales which is about online with history. Q - Alec Patterson: 382, do you just call that a maintenance type level or does that include the savings programs? A - Reuben Mark: That includes the savings programs, which again as you know we do this in some detail. The savings projects about slightly more than half of the 382 is for in a regular program are savings projects. And the average after-tax rate of return on the figures says 43 7, is about what it has been as your remember about 40% historically. Q - Alec Patterson: So by '09 when the restructuring program is over, we revert back to kind of this 382 run rate as a percent of sales? A - Reuben Mark: Yes, except that tying back to an earlier question about the global sourcing almost by definition when you have more limited number of plants, the percentage to sales doesn't have to hold because you get more efficiencies out of one or two big plants than seven little plants. But, yes, we have historically for many years run between 3 and 4% usually on the low side of 3, 1.3, 2.3, 3, 4, of sales and that on an ongoing basis I would expect to continue. Q - Alec Patterson: So the 524 being such a big step-up explains the lower share repurchase program thought process? A - Reuben Mark: In the budget, yes. A couple hundred million dollars less than this year but or $150 million less but what history says is that we generate more cash than we budget and we use that opportunistically to buy back shares. Q - Alec Patterson: And given your enthusiasm for this restructuring program, the gross margin outlook, your Robie program and the eventual rollover and the CapEx levels, why wouldn't you lever up a little bit and buy back more shares now for the potential payoff down the road? A - Reuben Mark: It is conceivable, actually that is conceivable. Q - Alec Patterson: Okay. A - Reuben Mark: We prize our AA rating but maybe that is a good idea, and certainly as always when we examine that on a regular basis with our Board, we will talk about that. Q - Alec Patterson: Thanks very much, Reuben.

We will take our next question from Elana Mills with Atlantic Equities. Q - Elana Mills: Just a question on Europe please. I was wondering if you could elaborate a little bit more on what you are seeing in that market because this was the one area of the business where pricing was still negative. Could you talk a bit about the competitive dynamics in your key categories and perhaps whether you see opportunities for pricing going forward? A - Reuben Mark: In terms of our key categories in Europe, interestingly we had in the fourth quarter good volume growth in oral care. We had an 8% volume growth in oral care and everything else was a little bit lighter which led to the 2.5% volume that you saw earlier. They are budgeting a continuation of that simply because it is a market share increase which generates it. The markets are difficult. Ian mentioned the both the hard and soft discounter. Pricing is difficult and economic conditions are difficult. Although in preparing for this call I didn't notice that the big three or four countries France, Germany and Italy are prophesying somewhat better GDP growth this year than last and we are seeing as I say a slight uptick in our business momentum. There is no doubt that Europe is a difficult market for everyone. We are pleased that on the year our operating profit was up and our volume was up essentially. Western Europe is of course booming and Eastern Europe is of course booming and we balance between them. Q - Elana Mills: Would it be fair to say that your pricing was actually up in oral care but down in household categories? A - Reuben Mark: I don't have it broken down that way but I would guess on a calculated basis it would be because GABA grew very well faster than the rest of the business even though the rest of the business grew nicely, and that on a mix basis would probably push the price up. Q - Elana Mills: Great, that is very helpful. Just one final clarification question; I am sorry to come back to this because you did go through it earlier, could you just confirm that the restructuring savings that you mentioned earlier on the call, that the figures that you quoted referred to the incremental progression annually and not to absolute figures? A - Reuben Mark: Yes, confirm that. Q - Elana Mills: Okay, great. Thanks very much and congratulations on a solid quarter.

We will take our last question from Alice Longley with Buckingham Research. Q - Alice Longley: My question is back on this promotional efficiencies, I know you are really excited about it and they are coming in better than expected, but still it is sort of nebulous as to what the efficient are. Can you give me an example of how you're doing things differently with promotions that is working so well? A - Reuben Mark: We can go from very simple to very complex. Because what happens is coming into the SAP system are all the measurements from both the syndicated services, the accounts and our own data. So that I'm looking around, there is actually some people in the room who know a lot about this so I am really on ice here, but, nonetheless, and so that essentially you take a promotion, X, Y, Z, whatever it is and you are able to determine how much, first of all what the takeaway is, how much repeat business you get out of it, what the cost of that repeat business was, what the rate of return is, whether or not you want to do it again, with what frequency, do you want to and so on. That is a very simplified example but that multiplied many, many, many fold and the development of best practice for that particular marketplace then becomes the guideline for the future. Q - Alice Longley: I have heard you talk about this before I mean three years ago getting more efficient in terms of promotional spending. Why is it suddenly accelerating and getting a lot better, just better systems? A - Reuben Mark: Number one is that the whole line itself got much, much bigger in the competitive battle over the last few years so it is a far bigger target. Number two, 3 years ago we weren't united by SAP; we were just getting to the worldwide footprint that we now have. And three we were fighting other battles and we have now focused on this for the last I would say, year, and it is exciting as you say. Q - Alice Longley: My one other toped is dog food. Clearly you keep growing nicely; can you give us overall data on I guess the volume growth of the dog food market in America; it's growing faster than the population I guess? A - Reuben Mark: It is, the pet food market, the dog and cat food market is growing faster than the population and there has been a bit of a resurgence because it moved away from pet stores couple of years ago and now it is moving back. We are looking for volume next year which parallels the market growth of about 5% domestically and generally I think I have the actual numbers here. This says the market growth in the specialty market which is where we compete is 5.3% internationally and in North America 5. The total pet food market is much smaller growth, 0.8%, that includes all of the supermarket brands and everything domestically 0.8, and internationally 0.3. If you take the market in which we compete it is about 5% in the United States and somewhat higher overseas. Our consumption for 2005 was actually slightly more than that internationally and about the same domestically. Q - Alice Longley: Great, thanks a lot. Reuben Mark, Chairman of the Board, Chief Executive Officer: Thank you everybody. I appreciate the interest and the time and we will continue to do our best to live up to your expectations.

And that does conclude today's presentation. We thank you for your participation and you may disconnect at this time.