Bina H. Thompson - Former Senior Vice President of Investor Relations Ian M. Cook - Chairman, Chief Executive Officer and President

Wendy Nicholson - Citigroup Inc, Research Division Jason English - Goldman Sachs Group Inc., Research Division Ali Dibadj - Sanford C. Bernstein & Co., LLC., Research Division Dara W. Mohsenian - Morgan Stanley, Research Division Alice Beebe Longley - The Buckingham Research Group Incorporated Christopher Ferrara - Wells Fargo Securities, LLC, Research Division William B. Chappell - SunTrust Robinson Humphrey, Inc., Research Division William Schmitz - Deutsche Bank AG, Research Division John A. Faucher - JP Morgan Chase & Co, Research Division Olivia Tong - BofA Merrill Lynch, Research Division Michael Steib - Crédit Suisse AG, Research Division Brian Doyle - CLSA Limited, Research Division Constance Marie Maneaty - BMO Capital Markets U.S. Lauren R. Lieberman - Barclays Capital, Research Division Javier Escalante - Consumer Edge Research, LLC Stephen Powers - UBS Investment Bank, Research Division Alec Patterson Mark S. Astrachan - Stifel, Nicolaus & Company, Incorporated, Research Division

Good day, everyone, and welcome to today's Colgate-Palmolive Company Second Quarter 2014 Earnings Conference Call. 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 the company's views and assumptions as of this time and are not guarantees of future performance. Actual events or results may differ materially from these statements. For information about certain factors that could cause such differences, investors should consult the company's most recent annual report on Form 10-K filed with the Securities and Exchange Commission and available on the company's website, including the information set forth under the captions Risk Factors and Cautionary Statement on Forward-looking Statements. This conference call will also include a discussion of non-GAAP financial measures, which differ from the company's results prepared in accordance with GAAP. The company will discuss organic sales growth, which is not net sales growth, excluding foreign exchange, acquisitions and divestitures. The company will also discuss gross profit, gross profit margin, 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 these items described in the press release. A full reconciliation with the corresponding GAAP measures is included in the press release and is posted in the For Investors section of the company's website at www.colgatepalmolive.com. Just as a reminder, there will be a slight delay before the question-and-answer session begins due to the web simulcast. Now for the opening remarks, I'd like to turn the call over to the Senior Vice President of Investor Relations, Bina Thompson. Please go ahead, Bina. Bina H. Thompson: Thank you, Angela. Good morning, and welcome to our second quarter 2014 earnings conference call. With me this morning are Ian Cook, President, Chairman and CEO; Dennis Hickey, CFO; Victoria Dolan, Corporate Controller; and Elaine Paik, Treasurer. We're happy to report another quarter of good organic sales growth with every division participating. Consistent with other companies in our industry, we are facing increased macroeconomic pressure in certain areas of the world. Category growth has slowed somewhat in geographies such as Asia, a factor which we actually referenced last quarter. On the other hand, we see some encouraging signs of slow recovery in some European markets. Competition remains healthy and promotional battles continue. However, our new product pipeline is as full as ever and our commercial investment behind our launches has increased worldwide, a careful balance between media spending and in-store activity, and this has resulted in solid market shares, many categories and geographies and showing positive trends in the most recent periods. Our Global Growth and Efficiency Program is on track and savings from that are supplementing our ongoing Funding the Growth initiatives, which are as healthy as ever. Both of these contributed to our 20 basis point increase in gross margin. Offsetting these savings were increases in raw and packaging material costs, as well as continued foreign currency transaction pressure. Our 3 business service centers around the world are now up and running, in Warsaw, Mexico City and Mumbai. The hubbing activities are complete in Europe and are well underway elsewhere in the world, which will make us even more nimble and effective winning on the ground. And of course, our balance sheet is strong and cash generation is solid. So let's turn to the divisions, starting with North America. Organic sales growth in North America was modest. The volume growth of 2.5% was of course on top of the very robust increase in the year-ago quarter of 6%, reflecting the initial launch of Colgate Total Mouthwash. We have an exciting innovation launching as we speak, which I'll discuss in a moment. Pleasingly, versus the second quarter of 2013, our 2014 second quarter shares increased in toothpaste, toothbrushes, deodorants, body wash and fabric conditioners, and our mouthwash shares have steadied at about 6.5%. Trial and repeat numbers for Colgate Total Mouthwash are above previous recent competitive launches and the product has been instrumental in driving overall category growth. Our recent launch of Suavitel Fast Dry fabric conditioner has also met with success. Our quarterly national share is at a record 18.6%, up 170 basis points versus the second quarter of 2013. And this is a product which is largely sold in Hispanic markets, where it holds a 36.2% share on a year-to-date basis, fast closing the gap between us and the leading competitor. So looking ahead, our latest toothpaste innovation here in the U.S. is Colgate enamel health toothpaste. The enamel strengthening segment is the fastest-growing in the toothpaste category, with 54% of consumers concerned about enamel. This new product replenishes natural calcium and other minerals back into weakened enamel, filling in rough spots while at the same time, polishing the enamel surface so germs are less likely to stick on the teeth. The formula has an active fluoride system, along with gentle on enamel silica and the product comes in 2 variance, whitening and sensitivity relief. In addition, the impact for packaging is interactive with a touch-and-feel demo showing acid soft in rough enamel and healthy smooth enamel. So as you would imagine, we have a very robust integrated marketing campaign planned, including television, print, public relations, professional, digital, social, mobile and in-store activities. Turning to Europe/South Pacific. We're very encouraged with our progress in Europe and are cautiously optimistic that some of the macroeconomic headwinds we have been facing are beginning to die down. Our organic sales growth of 2.5% reflects the balance between volume and price where we have had strong promotional activities across the region to support new product launches. And this has paid off in terms of market share. Our Oral Care shares are strong across the category and is showing good momentum in toothpaste. Our year-to-date market share is at 35.2%, up 70 basis points from the year-ago period, with the most recent share at 35.4%. And of particular note is the U.K. where despite an ongoing competitive battle, our year-to-date share is just shy of 50%, up a full point with the most recent lead over 51%, a record high. In manual toothbrushes, our year-to-date regional share is up 90 basis points to 23.5%, with the most recent lead at 24%, consolidating our #1 position. And this was in part fueled by excellent progress in the U.K. where we've achieved a record 37.5% share year-to-date. And in mouthwash, our share is up 10 basis points to 16.4% on a year-to-date basis, with the most recent lead at 16.9%. We're very excited about the launch of Colgate Maximum Cavity Protection with Sugar Acid Neutralizer across Europe and the South Pacific. First quarter launches in Australia and Norway have achieved 3.7% and 3.5% shares, respectively, in the most recent period. We've only just launched in the U.K. where, as I mentioned, we are reaching record market share levels and we'll introduce the product across the Rest of Europe in the balance of the year. In Germany, where our share is up 140 basis points to 41.2% on a year-to-date basis, we've launched it under the elmex brand. More new products are planned for the second half of this year as well. We'll continue the rollout of Colgate Max White One Optic. Whitening is the second-biggest segment in toothpaste in Europe and we hold the #1 position. Similarly, in manual toothbrushes, we will continue the rollout of Colgate Slim Soft Charcoal toothbrush, a product which, as you know, was developed in Asia but is met with great success in other parts of the world. And innovation in the mouthwash category is Colgate Plax Deep Clean mouthwash, which provides a deep effective clean even in hard-to-reach areas. The product contains 2 natural ingredients, eucalyptol and propolis, that are well known to the consumer. Eucalyptus is known for cooling and antibacterial properties and propolis for its protective properties. Turning then to Latin America. We're very pleased with the continued strong organic sales growth in this region. This growth was broadly based. One exception was Brazil, where our consumers were glued to their televisions during the World Cup and not spending time in stores, a temporary condition which we expect should reverse itself in the second half of this year. Market shares continue to climb. In the press release, we cited record toothpaste shares in a number of countries. Our year-to-date manual toothbrush shares also achieved record highs in Brazil, Chile, Peru, Puerto Rico and Uruguay. In Brazil, Colgate Maximum Cavity Protection with Sugar Acid Neutralizer toothpaste has achieved a 2.3% share year-to-date, lifting our overall share to a record 71.9%. In Mexico, our toothpaste share has been over 80% for the last 3 months, and while we don't have readings yet in national Nielsen shares, Colgate Maximum Cavity Protection with Sugar Acid Neutralizer toothpaste in Mexico has registered a 3 point share in ScanTrack. And as in other regions around the world, the launch of Colgate Slim Soft toothbrush has met with success in Latin America. In Brazil, our share is up 80 basis points to 32.8% year-to-date on the strength of both Colgate 360º and Colgate Slim Soft, both of which are superpremium priced, helping to increase margins. In Mexico, our manual toothbrush leadership share climbed to a record 44.9% in the most recent period. And our mouthwash share across the region is up 30 basis points to 36.3%, while our principal competitor is down almost a full point to 38.8%. In the Personal Care category, we've increased our underarm share in Mexico as a result of new products such as Men's and Lady Speed Stick stress. We're now the leader in bar soaps across Latin America with Protex and Palmolive holding the #1 and 2 positions, respectively. And in fabric conditioners, our regional share is up over 2 points to 50.8% year-to-date, with the most recent lead at 51%. And more innovation is planned for the second half. During the third quarter, we will be launching Colgate Total Professional Breath Health toothpaste. Dentists advise their patients that bad breath can be caused not just by food odors, but also by the accumulation of bacteria in the mouth. This breath-freshening toothpaste formula with breakthrough neutral odor technology is scientifically proven to fight and neutralize bad breath-causing bacteria. Next month, we are introducing Colgate Luminous White Instant toothpaste. Its exclusive formula with optic brighteners activates while you brush for a visibly whiter smile instantly. And in the Personal Care category, this month, we're launching Lady Speed Stick Aclarado Perfecto with Vitamin E. Its formula was, with Vitamin E and pearl extract, was perceived in a consumer test to help restore the skin's natural tone, while also providing sweat protection for up to 48 hours. Turning then to Asia. While organic sales growth in this region slowed from the first quarter pace, this quarter was compared to the strongest quarter of last year, which saw organic sales growth at a very strong 13%. Macroeconomic factors in China affected our results, and we told you on our last call about some categories slowing and, in fact, that did happen. However, as referenced in the press release, we continued to see strong growth in other countries in the region, such as India, and innovation continues to help drive market share increases. In toothpaste, our market share in India is up 70 basis points on a year-to-date basis to 54.8%, with the most recent period at 55.1% and this in the face of recent competitive entries. The revitalization of Colgate Active Salt, a toothpaste with a unique salt formula that gives deep clean feeling and helps fight germs for strong teeth and healthy gums, helps drive these results. In Malaysia, our share increased 50 basis points to 73.5% year-to-date, with the most recent lead at 74.5%. This was our first Asian market to launch Colgate Maximum Cavity Protection with Sugar Acid Neutralizer toothpaste. And in just 6 months, it's achieved almost a 4% share of the market. Our toothbrush share across the division is up to 30.6% year-to-date, fueled by increases in India, Thailand, Philippines, Malaysia, Singapore and Taiwan. In India, new product such as Colgate Super Flexi have resulted in an increase of 240 basis points to 43.5% year-to-date, with the most recent lead at 43.7%. Our mouthwash business is solid as well, with a regional share year-to-date of 21.8%, up 110 basis points. Colgate Plax Jasmine Tea, a mouthwash which provides long-lasting fresh breath with a pleasant jasmine tea flavor, has contributed to very good results in Thailand and the Philippines, where total mouthwash shares are up year-over-year 170 basis points and 380 basis points, respectively. Colgate Plax Herbal Salt mouthwash, which was launched in Malaysia and Singapore and contributed 80 basis points and 250 basis points, respectively, in the initial lead, will launch in India as Colgate Plax Active Salt during the fourth quarter. As you may know, the Indian consumer habit is to rinse one's mouth with salt water, so this innovation should resonate well in this market. Of course, more innovation is planned for the second half of this year. We will continue to roll out Colgate Maximum Cavity Protection with Sugar Acid Neutralizer toothpaste. In China, we'll be launching Colgate Tea health toothpaste, which provides refreshing breath with a pleasant longjing tea flavor. Longjing is a popular and premium type of tea in China, which is associated with multiple types of benefits, including healthy teeth and refreshing breath. We will also be launching the Colgate HT1 toothbrush, with 7-way cleaning, with the following benefits: Cleans teeth surface, removes bacteria, is gentles on gums, cleans in between the teeth, absorbs brushing pressure and is easy to maneuver. And in Thailand, we will be launching Colgate Plax Tartar Control mouthwash, an exciting addition to our strong mouthwash portfolio in that country. This mouthwash provides the dual benefit of tartar control and breath freshening all at once. Turning then to Africa/Eurasia. We're encouraged with the continued solid organic sales growth in this region. Of particular note was Russia, where despite an uncertain political and macroeconomic environment, new products such as Colgate Altai Herbs toothpaste, Colgate Total interdental toothpaste and Colgate Optic White Instant toothpaste helped drive strong growth. Toothpaste and toothbrush shares remained solid across the region. Innovation in the mouthwash category has delivered good share results. In Russia, we told you last quarter about Colgate Altai Herbs mouthwash, which contains an ingredient well known to the local consumer, a comparison product -- companion product to the previously mentioned toothpaste. Our mouthwash share in Russia is up year-to-date 170 basis points to 27.5%. In Turkey, our newly launched Colgate Plax Green mouthwash has resulted in a market share increase of 120 basis points to 20.5% year-to-date. And we're also very pleased with the continued success in our shower gel business across the region, where we hold a leadership position of 22%, up almost 2 full point’s year-over-year. Palmolive Gourmet Spa has driven increases of 220 basis points and 400 basis points in Russia and Turkey, respectively. And the recent launch of Palmolive Thermal Skin Renewal resulted in an increase of 5 points in South Africa. More innovation is planned. In the Eurasian markets, we are introducing Colgate Total Pro Whitening toothpaste. And here, as elsewhere, the premium price whitening segment is very important to the overall toothpaste category. In Russia, consumers believe in the power of natural ingredients and traditional recipes to improve oral health. Accordingly, we're launching the Colgate Natural Extracts toothbrush, containing pine tree bristles, with premium differentiated and impactful packaging designed to stand out on shelf. As I mentioned earlier, our Palmolive Gourmet Spa line of shower gels has been very successful, and we hope to build on that success with 2 new variants to be added to the existing chocolate, vanilla and strawberry. The new creamy coffee and peach sorbet variants are infused with natural extracts and their creamy formulas smooths the skin. As you would expect, we will have a very strong integrated marketing campaign to support this launch. Then turning to Hill's. Hill's business continues to be solid. General softness in the pet superstores has been affecting us and others as well here in the U.S. However, we're encouraged by our continued stream of innovation, which we expect to drive growth going forward. Our rollout of Hill's Ideal Balance continues to meet with success. Here in the U.S., our share of the naturals category continues to grow. And in addition to the regular Ideal Balance, we launched Ideal Balance Slim & Healthy in the second quarter for both dogs and cats. Support activities included features and coupon brochure handouts, brand ambassador coupons and nutritional consultant coupons. In Europe, we launched in the U.K. and Germany in April and May, respectively. And so far, we've seen very good trade acceptance, with listing in the major accounts supported by promotional activities, as well as secondary placements. In the store, we activated with branded gondola ends, demonstrators in key accounts and indoor and outdoor posters and point-of-sale materials. And in addition, we featured the product at consumer pet shows and through testimonial campaigns. On the therapeutic side of the business, our 2013 launch of Prescription Diet metabolic continues to do well both here and abroad. In the U.S., our sales are exceeding our expectations. Our commercial support includes before and after imagery, along with videos online. And this quarter, we've globally launched an antioxidant upgrade to the product. In greater Europe, we've widened the gap between our nearest competitor from 2 points to 8, establishing a clear leadership share of 47% year-to-date in the weight category. Another important therapeutic category is feline urinary, a category where we were underrepresented until the launch of Prescription Diet c/d. New platforms such as efficacy, stress, ocean fish and stew were added in the second quarter here in the U.S., all supported with in-clinic sampling and messaging at professional conferences. Similar activities in Europe have resulted in a 130 basis point increase in our share of the category to almost 30% year-to-date. Looking forward, this quarter, we will continue the rollout of Ideal Balance Slim & Healthy and Science Diet Perfect Weight, our new wellness weight-loss products in markets outside the U.S. And for the fourth quarter, we have more exciting news, which we will share with you soon. So in summary, we're pleased that we continue to drive organic sales around the world with good bottom line growth. Our new product pipeline is as full as ever and our market shares are healthy and growing in many regions. Colgate people everywhere are working hard to keep us winning on the ground. We look forward to sharing our results with you as we go forward through the balance of the year. And now before with turn it over to Q&A, Ian would like to make a few remarks. Ian? Ian M. Cook: Thanks, Bina. Many of you may remember that on the first quarter call, as we began the Q&A, I took the time to make some preliminary remarks on the shape of this year and it seems appropriate to open by doing the same in this quarter. Clearly, we saw a slowdown in the top line pace of the company in the second quarter, and that really began towards the very end of the quarter. And as you break that down, one contributing factor is further emerging market weakness in our categories as we see the macro economic weaknesses finally come more sharply to our categories. You will recall on the first quarter call that we revised the category growth rates for the emerging markets down to a 5% to 7% range from the previous 6% to 8%. And based on what we saw in the second quarter, we see for the balance of the year those emerging markets still posting good growth but at the lower end of that range. In the developed markets, for the Colgate businesses, category growth continues at 1% to 2%, with some growing optimism, I would say, in Europe. Hill's, as you heard, experienced channel-specific slowdown here in the U.S., which we are already seeing recover as this quarter begins. As you heard very clearly from Bina, our market shares around the world continue to be strong and accelerating in Mexico and the U.S., 2 particular geographies that we were focusing on since the beginning of the year. And our innovation pipeline is deep and rich, not just for the balance of 2014 but into 2015 as well. We continue to feel that the strategy we have been deploying for several years, a strategy that focuses on building brands with our consumers, creating innovation that drives growth, maintaining the efficiency and effectiveness that funds that growth and developing a cadre of leadership to continue to manage the company, continue to be the right strategy, as does our execution on the fundamentals of our business around the world. We believe both remain correct, and that is what we are redoubling our focus on for the balance of this year. So with that as a backdrop, while we continue to expect organic growth for the company this year to be in that 5% to 7% range, albeit towards the lower end of that range given the current world environment. On the material cost side, we have seen further increases in material costs, including topical oils and several of the agricultural commodities that affect the Hill's business and, of course, the continued transaction headwinds due to foreign exchange. And because of that, we now see gross margin expectations for the year move to a 30 to 50 basis point range, with Funding the Growth maintained at historically strong levels, as you will see when I go through the gross margin roll forward and, of course, more pricing across the balance of the year. Behind that strong innovation stream, advertising and the increasingly important commercial investment of in-store work will both be up. The restructuring program remains on track, and we continue to expect after-tax savings of between $90 million and $110 million, and that tax rate, as you would expect, remains in the 31% to 32% range. As you saw in the press release, we remain comfortable with our 4% to 5% dollar EPS range and you may recall the walk-through that we provided on our first quarter call, which guided to the middle of that range guidance that I would reiterate. So in summary, we believe the strategy that we are deploying and the focus on the fundamentals that we have remain the right ones. Our market shares are strong. Our innovation is robust, and I think we can continue to demonstrate the agility and the flexibility to react to the volatile world that we are all doing business in. So with those as introductory remarks, Angela, perhaps we could now open the lines to questions.

[Operator Instructions] And we will now go to Wendy Nicholson with Citi Research. Wendy Nicholson - Citigroup Inc, Research Division: I guess a couple of things. There's a lot there, Ian, in your final comments. But in terms of the macro slowdown, I think you commented that it happened very late in the second quarter and I guess that concerns me because outside of Brazil, every region saw I think a deceleration in your organic sales growth and at least came in below my expectations. And I have a hard time believing that, that all happened very late in the quarter. And in terms of kind of going forward from here, how quickly do you expect a pickup? How quickly do you expect a reacceleration? I guess, specifically, with regard to pricing and what you mentioned about commodity inflation, how quickly can you put some pricing in place so that even that tempered top line growth outlook is achievable at this point? Ian M. Cook: Yes. Well, obviously, Wendy, that is why I tried to make the introductory remarks because clearly, from the early notes, those are exactly the questions on people's minds. If you track through the organic and focus on the emerging markets, we were actually quite pleased with the organic growth that we sustained in Latin America. The big variation, of course, is in Asia. And clearly, the world macros out there have been volatile and weak in some cases for a time. But beyond the adjustment we made in the first quarter, we had not seen that come through to our categories and it did so in the second quarter and it did late in the second quarter. The other factor, as I mentioned, was related to Hill's. And as I just said in my remarks, we've already seen that -- Hill's bounce back. The important point to make is that the underlying category growths are in that mid-single-digit range, as I said. What you get from a volume point of view is that in large geographies, like a China for example, with a very complex distribution system, you get an inventory reaction that works its way through the system that has a short-term impact. That was the impact we felt in the second quarter as we look forward at the consumption rates, in other words, the consumer purchase rates with them in the mid-single-digits area. And with the pricing plans we have clearly in place for the second half of the year, we feel comfortable with that more tempered organic volume growth for the entire company at the lower end of that 5% to 7% range. So it's the underlying consumer purchasing that gives us confidence.

And we will now go to Jason English with Goldman Sachs. Jason English - Goldman Sachs Group Inc., Research Division: Ian, you're now expecting sales at the low end of where you were, gross margins moving a little bit lower. Maybe you can just walk us through a couple of the offsets that help you keep EPS sort of the midpoint of where you were still intact? Ian M. Cook: Well, we obviously have the restructuring program, which we have underway. I talked about advertising for the year. As I said, the total commercial spend will be up and the advertising will be up on the year on a ratio basis. It will be more in line with the strong levels of last year. And when you work all of that through, with the guidance we provided in the first quarter on the EPS that brings in the year.

And we will now go to Ali Dibadj with Bernstein. Ali Dibadj - Sanford C. Bernstein & Co., LLC., Research Division: So it's a little -- I mean, I think it's unusual, Ian, for you to do one of these prepared remarks. I'm just trying to figure out the severity of things. Was it really that bad of a slowdown in the emerging markets? And even if it is, you've historically been relatively immune to slowdowns as we've seen in the past. I wanted to know, you think that's changed for your business? Or is that much worse? In that context, secondarily, if you could talk about the double-digit constant currency earnings target for this year. It sounds like you're not going to make that. I just want confirmation of that. And if it changes your view, given what you're seeing in the emerging markets right now, about this company being a double-digit earnings company over the next few years. Ian M. Cook: Okay. So to answer your second question, the growth this year is not double digits. So I confirm that in a constant currency basis. But it does not change our view, our strategic view, that for the longer term, this is a double-digit earnings company. As far as your comment on the prepared remarks and the slowdown on the top line, frankly, the only reason we elected to do it this way was because otherwise what you do is you usurp somebody's question in order to make some opening comments, which seemed unfair. So we simply thought it was cleaner to do it this way. So I apologize if trying to be proper in the presentation created a sense that things were somehow bad, which we do not believe they are. We do see a volatile world. We have tried consistently in that volatile world to deliver the agility and the flexibility necessary to keep driving our business ahead of the market growth, which is why Bina spent so much time on the market shares, because our market shares are strong and growing in key markets. So this is us just reacting to a deceleration in our marketplaces in order to outperform what we see now as the probable growth rate in our categories for the balance of this year. And we just wanted to be as clear as possible about that.

And we will now go to Dara Mohsenian with Morgan Stanley. Dara W. Mohsenian - Morgan Stanley, Research Division: Ian, can you discuss your market share performance so far for the SAC anti-cavity toothpaste where it's been launched and incrementality to your business? And then also on a related note, given the healthy innovation pipeline you pointed to, do you think you're investing enough in marketing here or will you temper the marketing a bit given the top line dynamics out there? Ian M. Cook: Yes. I think Bina went through quite a few. In fact, almost all of the market shares we have so far on superior anti-cavity. And indeed, it has been predominantly incremental in the marketplaces we have gone to. So you're seeing share performance, I would say, in broad terms, depending on when the markets were entered, between 1.5% and 5% Turkey, 1.5% Brazil, as Bina quoted, Malaysia, 4%; Australia, 4%; New Zealand, approaching 5%; Greece, over 2%; Norway, 3.5%, as Bina said; and Mexico, 3%, albeit that, that is ScanTrack data. And you heard that the Mexico shares are back up over 80 and the Brazil share is at an all-time high of 72. So the more important breeding for us on superior anti-cavity, frankly, is that the trial rate is building very, very nicely. We have now 6 months data in, and it is significantly ahead of the category average and the repeat rates are dead in line with premium category entries in the category. So we're seeing it in the share. But more importantly, we're seeing it in the consumer behavior. And on the support behind the new products, no, the levels of advertising spend, and I'm now talking the traditional below-the-line advertising, are at compared to our history, elevated levels. They're in line with the strong levels we had last year. They are clearly focused behind the innovation in terms of building awareness, getting recommendation. And we keep trying to stress this point, but it sometimes is difficult, I guess, to make the impression that part of our investment to build brands with consumers and generate trial of new products comes in activity that we do at the store level, and that activity is captured in trade spending. So it doesn't go into the traditional advertising line. But when you think of consumer purchasing behavior and the techniques available to you today at retail, it's an enormously important part of building brand and provoking trial purchase. So we're managing very carefully between those 2 investment buckets, the traditional advertising and the overall commercial spending, to make sure, the example I just gave on superior anti-cavity, that we're generating trial above category norms so the repeat multiplies on a higher than normal trial base. So the answer is, we continue to believe we have a very well balanced plan behind the innovation for the year.

And we will now go to Alice Longley with Buckingham Research Brokerage. Alice Beebe Longley - The Buckingham Research Group Incorporated: With your guidance for the year that organic sales growth will be at the lower end of 5% to 7%, it looks like you have to get some acceleration from the 4% in the second quarter to get there. And you already talked about Hill's. Where else might we see some improvement, maybe Latin America because people won't be so glued to their TV sets and maybe the U.S. on innovation. But if you could just tell us more where we get improvement in the second half versus the second quarter that would be good. Ian M. Cook: Well, first, Alice, I would say that the prevailing rate you have to get to in the second half is pretty much what you would have delivered in the first half. So yes, there is the second quarter 4%. And as we look at the balance of the year, given the underlying consumption rate that I mentioned in the emerging markets and, particularly, in Asia, that would clearly be a business area where we would expect the organic growth to come back. And as I commented on the Hill's business with the specific channel issue in the second quarter which we're already seeing come back, we would expect to see that in Hill's as well. So if you were pointing to 2 particular areas, it would be those areas. And who knows, we may get wild optimism in Europe.

And we will now go to Chris Ferrara with Wells Fargo. Christopher Ferrara - Wells Fargo Securities, LLC, Research Division: I guess the question is, how do you -- how does your new view on the category growth dynamic affect your decisions on pricing, if at all, all right? Because I know at least one of your major global competitors has said that competitive levels in the markets are affecting their ability to price for currency. You said that you expect more pricing in the back half. But how does that work for you guys? Would you now take less pricing than you would've thought than before? Ian M. Cook: Well, remember, Chris, when you think about pricing, what you're actually trying to do is to get the average selling price up. So there are many ways of doing that. List price is clearly part of it. But there are many other techniques that we deploy strategically and tactically to elevate the ASP, premiumization, changes in your promotional activity. So there are many techniques that we deploy. And the reason we made the comment about the market shares in Mexico and the U.S. is, we got 1.5 pricing on the quarter and we have those market shares moving in the right direction. Bina went through a whole host of other market shares that are moving in the right direction. And we think we have the ability to continue to take pricing, create pricing in the second half of the year without impinging on that mid-single-digit organic growth rate. And innovation is an important part of that.

And we will now go to Bill Chappell with SunTrust. William B. Chappell - SunTrust Robinson Humphrey, Inc., Research Division: Ian, just kind of talking about capital allocation and looking with where the stock is today and going forward. I mean, is the EPS guidance, I assume, just assumes only the kind of $3 million a quarter share repurchase. But would you look at deploying more in this environment and from -- or are there other things out there that you're looking that have a better return at this point? Ian M. Cook: Well, that's a very broad question, Bill. I guess the way we have thought about capital allocation over the years, obviously, one pays the dividend. Obviously, one has internal capital expenditure programs, which deliver consistently, in our case, beyond a 33% hurdle rate of return. And of course, that capital investment is elevated in periods when we go through restructuring. So right now, we're deploying a little bit more in capital expenditure than we have done historically quite purposely. And then of course, we buy back shares, as we have done, and I would say our target is still in that $1.5 billion gross range for this year. And obviously, should an acquisition candidate present itself or should we find one in various parts of the world, then we would prefer to allocate the capital in that direction. And I don't think, at least, so far, our thinking has changed in that regard.

And we will now go to Bill Schmitz with Deutsche Bank. William Schmitz - Deutsche Bank AG, Research Division: I don't know, probably a tough question to answer, but did you figure out like what is the source of the volume shortfall? I mean, is it people buying less? Is it fewer people in the category? Is it sort of the mix mechanisms you've used in the past aren't work as effectively? Is there any way to kind of triangulate those 3? Ian M. Cook: Yes. I -- it's difficult, Bill. As we have, over time, got under the hood of that, you see what people do is they exhaust their own personal pantries. They literally try and squeeze the tube and make it last a little bit longer so that they can extend the time between purchase cycles. And as we have seen, sometimes, for cash outlay reasons, instead of buying a bigger tube at a certain channel of trade, they will go and buy a smaller tube in a different channel outlet. So in terms of the consumer purchase that is what we have historically seen has been the behaviors they adopt. The direct correlation to volume, and the point I was trying to make specific to Asia on this quarter is, from a selling in volume point of view, you then have the dislocation that, that slowdown brings to a very complicated and interrelated distribution network, which sees some inventory adjustment, which is a short-term effect as everybody readjusts to the now lower consumer purchasing rate. So you see it more sharply on the company volume in the short term, even though the underlying purchase that you will go back to, as I said, is still in that mid-single-digit range.

And we will now go to John Faucher with JPMorgan. John A. Faucher - JP Morgan Chase & Co, Research Division: A little bit of a follow-up on Chris' question. If we look at your pricing in Latin America and, it's a lot lower than what we're seeing from a lot of these other companies. I'm not asking you to comment on their pricing as much, but can you talk about sort of how you're viewing sort of real pricing in Latin America as we look forward? And is this something where you're just not going to move as much relative to some of the FX pieces? And then sort of further delving down into Venezuela on this, we have seen some companies talk about the margin caps, et cetera. Can you talk about sort of where you feel you are from a margin standpoint in Venezuela and if we look to map that out ourselves. Ian M. Cook: Yes. Well, let me start with Venezuela. We've read all of the transcripts on the pricing caps, obviously, in Venezuela. In our situation, virtually all of our business is capped, if you will, by the government's 2012 policy that prevents us from taking pricing in the marketplace. And therefore, because of that, the pricing cap doesn't really apply to us -- margin cap, I mean. So that would be the simple summary on Venezuela. You probably saw or you will see that we posted a modest profit this quarter and, indeed, for the half, which we had not done last quarter, which is pleasing, and we continue to manage that business with the diligence that you would expect. And there have been quite a few press reports and, indeed, we are in very constructive discussion with the government about the opportunity for us to realize pricing on products as we continue forward in this year, and we'll have to see where that ends up. But we do spend a lot of constructive time in discussion. In terms of pricing in Latin America, actually, we're quite pleased with the pricing balance that we have been taking in Latin America at this time, remembering that there is no pricing in Venezuela. So the overall pricing we're taking, we think, is both consistent. You look at the first and the second quarter, 6 and 5. And of course, that will continue in the back half of the year. And of course, for our gross margin to improve across the year, we will have to see a light gross margin improvement in divisions, including in Latin America, so that is very much in our plan. And I think the market shares talk to the fact that I think we're finding the right balance between the 2.

And we will now go to Olivia Tong with Bank of America Merrill Lynch. Olivia Tong - BofA Merrill Lynch, Research Division: You talked a lot about increased in-store activity, but obviously volume was a little bit light of expectations. So do your analytics suggest that consumers are just not as responsive to in-store activity as they used to be? Or was it effective and volume would have been worse if not for the promotional activity? And then also, it sounds like you're quite pleased with the Funding the Growth and cost saves progress overall. So what drove overhead up this quarter? Ian M. Cook: The -- okay, a couple of answers then. In terms of in-store activity, again, as I try to example, I think you have to try and separate out, depending on the part of the world you're talking about, the slowdown in overall consumption and the short-term impact that has on company volume. So as I described before, you can have a situation where as the consumer consumption slows overall, you're still connecting with that consumer, let's pick the emerging market mid-single-digit growth rate now that we are talking about. But behind that, given the distribution system, as the volume readjusts to that lower level, you see company volumes slow in a shorter timeframe. The consumer is just as responsive at the purchasing end to the in-store trial activity. So the in-store activity continues to be effective from a consumption point of view. And in terms of the overhead increase, it largely relates to distribution decisions we have taken in various parts of the world, either to take our products to market directly and not through a distributor, or to extend our distribution depth and, therefore, incur more logistic cost in order to get that distribution depth, both of those things being good in terms of building our brands over the medium term. So very conscious choices. The underlying overhead is actually flat.

And we will now go to Michael Steib with Crédit Suisse. Michael Steib - Crédit Suisse AG, Research Division: Can I ask a question, just a follow-up question on the Latin American margin, please, it was down over 20 basis points in the quarter. Given your comments on sort of the temporary effect on Brazil volumes in the quarter but also pricing, do you expect to be able to reverse that in the second half, at least partially? Ian M. Cook: Yes. I mean, as I was trying to explain a little bit before, obviously, when you look at the impact in the second quarter, a part of it is Venezuela and part of it is the lead lag between the very sharp increase in transaction impact on product cost and the ability to keep feathering pricing into the marketplace. So as I tried to answer with the earlier question, we do have more pricing planned for the balance of the year. And as we look at our gross margin ambitions for the company, that will see gross margins expand in our divisions, including in Latin America. So to your point, we will indeed see improvement in gross margin as the year unfolds in Latin America, as indeed we saw improvement second quarter to first.

And we will now go to Caroline Levy with CLSA. Brian Doyle - CLSA Limited, Research Division: This is Brian Doyle in for Caroline. We were just wondering how long destocking usually lasts and if it is limited to China at the moment or if there are other areas where it's affecting you? Ian M. Cook: It's predominantly China. It tends to be relatively short term. I would say, overall, 60 to 90 days.

And we'll take our next question from Connie Maneaty with BMO Capital Markets. Constance Marie Maneaty - BMO Capital Markets U.S.: I know it's a small market for you, but this morning, there are headlines that Argentina is defaulting. What impact would that have on you? Ian M. Cook: Yes. Don't cry for me, Argentina. Argentina, as you may know, Connie, is less than 1% of the company sales. We manage these geographies as if they are a hyperinflationary, so we do all the things even though we don't book it as hyper because it has not yet crossed the 100. So we hold little cash. We have de minimis cash in Argentina. We don't have any debt outstanding, and we don't believe we have a need for any external funding. We make most of our product locally. So as a direct impact of the default, no impact for us. Now of course, what the knock-on effects are in terms of inflation and foreign exchange, we'll have to see how it unfolds and react accordingly, but I come back to the first point that it is less than 1% of our sales.

And we will now go to Lauren Lieberman with Barclays. Lauren R. Lieberman - Barclays Capital, Research Division: Just 2 quick things, 1 was just following up on the 60 to 90 days for how long the destocking usually lasts. You said some of the weakness popped up at the end of the quarter, so should I interpret that as there's still a little bit more to go in 3Q or that continues in July but you would expect as you get into August, September, things start to improve? Ian M. Cook: That would be a correct assessment. Lauren R. Lieberman - Barclays Capital, Research Division: Okay. Great. And then the final thing would just be if you could run through the gross margin bridge for us that would be great. Ian M. Cook: I thought you'd never ask. So in terms of gross profit, prior year gross profit was 58.6%. With the pricing we took, we got 50 basis points from that. Between our Funding the Growth savings and the modest contribution as in the first quarter from restructuring, our total Funding the Growth in restructuring was 220 basis points, actually slightly ahead of the 210 we got in the prior year. Material prices were a headwind of 2 50. And so with the pricing and the Funding the Growth, that's what leads you to the 58.8% or 20 basis point increase year-on-year.

And we will now go to Javier Escalante with Consumer Edge Research. Javier Escalante - Consumer Edge Research, LLC: Question, I don't think that you clarify the situation with Hill's in the specialty stores. If you can elaborate what was this temporary dislocation. And you mentioned that it was resolved, but I'm just curious if you can tell us what happened there. And then on pricing again, shall we expect pricing to improve in emerging markets or is just a reduction of promotional activity in Europe given the strong volumes? Ian M. Cook: To answer your latter point, first, Javier, no, it is not a reduction in promotion in Europe, which drives that. It is pricing and it is pricing across the world with a heavy emphasis on the emerging markets and continued emphasis on Hill's. And in terms of Hill's, I'm sorry if I made it sound like some sort of untoward event, they had a traffic slowdown in their stores. And as we have come into this quarter, with our innovation and with the activity we have behind our innovation, that, for us, has gone away and we have kicked off to a nice start in the third quarter. So just a temporary blip.

And we will now go to Steve Powers with UBS. Stephen Powers - UBS Investment Bank, Research Division: Ian, I was wondering if you could just break apart the drivers of the change in your gross margin outlook between January and July, really I guess between April and July? How much of the reduction has been driven by a decision to move demand building dollars from ad spend to trade spend versus some of the other factors you mentioned like FX, commodity inflation, the general slowdown that you experience, et cetera? That would help. Ian M. Cook: Yes. I don't really want to get into that sort of level of detail. And I would say, in terms of rebuilding our gross margin, it's basically between the materials and the transactions. So that's where our focus is.

And we will now go to Alec Patterson with AGI.

Ian, I need to follow up on that last question. Just trying to understand, you're saying that material costs, are the material -- is the main change versus where you were in April? Or is it more a function of promo spending that's up to offset, I presume, increased pressure on the categories, especially in emerging markets? Ian M. Cook: Well, clearly, when you do the investment at store, that investment at store brings pressure on gross margin. But we have had that thinking in our plan. So the new aspect is an increase in material prices and, a, shall we say, heightened impact from transaction.

And we will take our final question from Mark Astrachan with Stifel. Mark S. Astrachan - Stifel, Nicolaus & Company, Incorporated, Research Division: Curious on your thoughts on Hill's given the slowdown you talked about in the specialty stores. Do you think there's an opportunity to expand distribution and is there even a benefit in doing so beyond just that channel? And then just more broadly curious, your thoughts on growth rates in that business or in Pet Nutrition sort of broadly in Europe, U.S. and sort of your views on longer-term opportunity in developing markets is something that eventually will be bigger than it is today? Ian M. Cook: Yes. The answer to the distribution question, which has been asked many times, is given the model we have for that business, we do not believe that, that would be to advantage but rather the recommendation we cultivate with veterinary professionals is best maintained in a controlled environment, whether it's a pet store, a PetSmart or a PETCO, where the assistants can advise or indeed directly with the vet. That is part of the connection that brand has with the consumer. If you were then to liberalize that and take it more broadly into, if you will, a grab-and-go environment, you lose that connection. To your second point, you are absolutely right, Hill's today is predominantly a developed world business. We have a very clear focus on a handful of emerging markets where we are seeing a most immediate potential for that growth. But indeed, part of the attractiveness of the business is the long runway we see in terms of emerging markets coming into the fold and providing sustainable growth for the long term. So those are all the questions for today. I thank everyone very much for joining. I thank all the Colgate people for contributing so hard to the results that we deliver. And we look forward to catching up with everybody again after the third quarter.

Ladies and gentlemen, this does conclude today's conference. We thank you for your participation.