Jon Moeller - Chief Financial Officer Company Speaker - Teri List - Senior Vice President and Treasurer Robert McDonald - Chairman, Chief Executive Officer and President

Edward Kelly - Crédit Suisse AG Dara Mohsenian - Morgan Stanley William Chappell - SunTrust Robinson Humphrey Capital Markets Constance Maneaty - BMO Capital Markets U.S. Lauren Lieberman - Barclays Capital Mark Astrachan - Stifel, Nicolaus & Co., Inc. Alice Longley - Buckingham Research Group, Inc. John Faucher - JP Morgan Chase & Co Ali Dibadj - Bernstein Research Joseph Altobello - Oppenheimer & Co. Inc. Jason Gere - RBC Capital Markets, LLC William Schmitz - Deutsche Bank AG Timothy Conder - Wells Fargo Securities, LLC Douglas Lane - Jefferies & Company, Inc. Alec Patterson - RCM Jon Andersen - William Blair & Company L.L.C. Andrew Sawyer - Goldman Sachs Group Inc. Linda Weiser - Caris & Company Caroline Levy - Credit Agricole Securities (USA) Inc. Nik Modi - UBS Investment Bank Christopher Ferrara - BofA Merrill Lynch

Good day, ladies and gentlemen. [Operator Instructions] Before we begin, the company has asked the following statement to be read.

Good morning, and welcome to Procter & Gamble's quarter end conference call. Today’s discussion will include a number of forward-looking statements. If you will refer to P&G’s most recent 10-K, 10-Q and 8-K reports, you will see a discussion of factors that could cause the company’s actual results to differ materially from these projections. As required by Regulation G, P&G needs to make you aware that during the call, the company will make a number of references to non-GAAP and other financial measures. Management believes that these measures provide investors valuable information on the underlying growth trends of the business. Organic refers to reported results, excluding the impacts of acquisitions and divestitures and foreign exchange where applicable. Free cash flow represents operating cash flow less capital expenditures. Free cash flow productivity is the ratio of free cash flow to net earnings. Core EPS refers to earnings per share from continuing operations excluding certain items. The effective tax rate on core earnings represents the effective tax rate on continuing operations less noncore impacts. P&G has posted on its website, www.pg.com, a full reconciliation of non-GAAP and other financial measures. Now I will turn the call over to P&G's Chief Financial Officer, Jon Moeller.

Thanks, and good morning, everyone. Bob McDonald and Teri List join me this morning. I'll begin today's call with a summary of our second quarter results, Teri will cover business highlights by operating segment, and I'll conclude the call with guidance for both the fiscal year and the March quarter. Bob, Teri and I will take questions as usual after our prepared remarks. Following the call, we'll be available to provide additional perspective as needed. Our second quarter was another period of solid volume and market share progress. We grew organic sales ahead of market growth rates. We built share broadly, and we delivered core earnings per share growth above the high end of our guidance range. Volume increased 6%. The growth was broad-based with all regions, 16 of our top 17 countries, five of six reporting segments and 19 of our 23 billion-dollar brands delivering volume growth versus the prior year. Global market share, on a constant dollar value basis, grew again this quarter and is now up versus the prior year for the past 12-, six- and three-month periods. Share growth in the quarter was also broad-based. We grew market share in all geographic regions and held our built share in 12 of our top 17 countries and 16 of our 23 billion-dollar brands. Overall, market share is in line or up in businesses representing about 60% of global sales. The strong volume and share progress continues to be driven by innovation and expansion programs that flow from our overarching growth strategy to serve more consumers in more parts of the world more completely. We're expanding our existing category portfolios to reach more consumers, with innovations such as Naturella Feminine Care pads and Head & Shoulders shampoo in Brazil, Gain hand dishwashing liquid in North America, Naturella and the Gillette Fusion shaving system in China and Gillette Guard in India. We're serving consumers in more parts of the world by entering new category country combinations such as the launch of Olay Skin Care in Brazil, Febreze Air Care in Colombia and Brazil and Downy Fabric Care in Indonesia. We're serving consumers more completely by leveraging and expanding recent innovations such as Pampers Dry Max, which we have now expanded to more than 50 countries; Tide Acti-Lift, which is driving solid market share growth in the U.S.; Crest 3D White and Crest Clinical, which have driven U.S. toothpaste market shares to near-record levels of over 38%; and Gillette Fusion ProGlide, which started shipping to Germany and France in December. Organic sales grew more than 3%, about a point ahead of global market growth rates albeit at the low end of our guidance range. Markets for our products continue to grow at a healthy rate in developing markets in the range of 6% to 8%, consistent with our projections. However, developed market growth rates were essentially flat for the quarter compared to our expectation for growth of about 1%. Considering that developed markets account for 2/3 of our sales, this difference in market growth was enough to round our organic sales down to 3% versus being a solid 4%. Pricing and mix reduced sales by two points. Mix reduced sales by approximately two points, and pricing was down only slightly for the quarter. Versus the July-September quarter, price mix improved by more than half a point and price mix improved sequentially each month during the December quarter. The price mix and related organic sales improvement was broad-based. Five of the six reporting segments had a smaller price mix impact in the December quarter than in the September quarter. And five of six segments delivered quarter-to-quarter improvements in organic sales growth. The improvements in price mix came mainly from pricing as we continue to annualize adjustments taken early last fiscal year. Pricing rounded to zero for the quarter and will turn positive in the second half of the fiscal year. We've now lapped the adjustments we made to brands such as Duracell, Cheer and the large sizes of Tide and our multiple brands in the Central and Eastern Europe, Middle East and Africa region. The mix impact was due primarily to geographic mix of about a point as the developed market volume grew 3% and developing market volume grew 10%. Product mix and price tier mix each affected sales growth by about half a point. All-in sales grew 2%. This includes a 2% negative impact from foreign exchange and a modest benefit from the net impact of acquisitions and divestitures. All-in GAAP earnings per share were $1.11, down versus the prior year GAAP earnings per share of $1.49, which included the large gain from the divestiture of the Pharmaceuticals business. Core earnings per share were $1.13, $0.02 above the top end of our guidance range and up 3% versus prior-year core earnings per share of $1.10. Our core earnings per share results benefited from organic sales growth, cost savings, a decline in the effective tax rate and a reduction in shares outstanding, which more than offset negative impacts from higher input costs and higher marketing and portfolio expansion investments. The $0.02 difference between current period GAAP and core earnings per share reflects charges taken to update legal reserve balances, which were largely offset by a noncore tax benefit from the pending settlement of tax litigation primarily related to the deductibility of technology donations. The legal item relates to the inquiries being conducted by competition authorities in Europe including the European Commission, which we and a number of other manufacturers in our industry have previously disclosed. Gross margin decreased 190 basis points due to higher commodity costs. Higher year-on-year commodity costs reduced gross margin by 160 basis points. For perspective, on a weighted average basis, spot prices for our key materials and energy inputs are up more than 20% versus last year's levels. Geographic and product mix reduced gross margin by approximately 100 basis points. The higher input cost, the mix impacts were partially offset by strong savings programs and cost of goods, which contributed roughly 140 basis points positive to gross margin. Operating margin declined 210 basis points due mainly to lower gross margin. SG&A spending as a percentage of sales increased 20 basis points versus prior-year levels due to higher investments to support our innovation and expansion plans. The effective tax rate on all-in earnings was approximately 18%. This includes the benefit of the noncore tax item which reduced the all-in tax rate by about 4½ points. The effective tax rate on core earnings was 22.4%. This rate reflects the benefit of a favorable mix impact from the faster growth of our business in developing markets where tax rates are generally lower and the impact of the two-year extension of U.S. tax laws which passed in late December. Given our fiscal year reporting calendar, the U.S. tax extension causes a catch-up adjustment for the September quarter to get our year-to-date rate in line with average rates expected for the full year. The rate also reflects the successful audit defense of our tax status in several markets. We generated over $2 billion in free cash flow in the quarter. We continue to expect free cash flow productivity of 90% or more of net earnings for the year as operating profit growth increases in the second half. So far this fiscal year, we've returned $6.4 billion of cash to shareholders comprised of over $2.8 billion in dividends and over $3.5 billion in share repurchases. In summary, we're pleased with the progress we've made in the first half of the fiscal year despite slower-than-expected market growth rates and significant increases in commodity costs. We're growing market share broadly behind our innovation and expansion efforts. Volume growth remains very strong and core earnings per share growth for the first half is slightly ahead of our going-in expectations. Now I'll turn the call over to Teri to review highlights of the business segment results.

Thanks, Jon. Starting with Beauty, organic sales increased by 3%. Organic volume contributed six points of growth. Developed markets were flat and developing markets increased double digits, contributing to two points of geographic and product mix, pricing was down one point. Retail Hair Care shipments increased high-single digits, with developed markets growing low-single digits and developing markets growing mid-teens. Asia led the growth, increasing shipments by about 20% and growing share by over a point. Both Pantene and Head & Shoulders shipments grew over 25% in China, the Philippines and India. Latin America also had strong volume growth. Brazil shampoo value share increased over 1½ points with the launch of Head & Shoulders and with Pantene shipments growing more than 50%. Female Skin Care volume grew double digits and market share was up nearly half a point. Olay Skin Care volume in India and the Philippines more than doubled versus a year ago. And Russia shipments increased by about 80%. In Brazil, the Olay expansion continued ahead of expectations. In developed markets, Female Skin Care volume increased high-single digits. U.S. Olay Skin Care shipments increased high-single digits behind strong marketing and sales fundamentals and the launch of Olay Regenerist Night Elixir and the new Olay Pro-X cleansing device. Female Blades and Razors continued to deliver strong results, growing volume by high-single digits in both developed and developing markets and increasing global market share for the third consecutive quarter. Prestige organic shipments increased low-single digits. Prestige Skin Care volume was up double digits led by China where SK-II was up more than 60%. Prestige Fragrance organic shipments were up low-single digits behind the success of recent initiatives including Gucci Guilty and Dolce&Gabbana The One Gentleman. Salon Professional shipments were down double digit due to the decline of nonstrategic businesses and continued streamlining of the portfolio. The Grooming segment organic sales were up 6% on volume growth of 5% and 1% contribution from price increases on Blades and Razors. Male Blades and Razors global shipments increased mid-single digits, developing market volume grew high-single digits led by Asia and Latin America. India Blades and Razors share increased almost four points to over 45% driven by continued strength of the MACH3 brand and the Gillette Guard launch. MACH3 shipments grew over 70% in Mexico and over 20% in Brazil, driven by the launch of Mach3 Sensitive as well as marketing and trade programs to increase consumer awareness. Developed market volume was up low-single digits including the impact from constrained supply of Fusion and Fusion ProGlide. North America shipments were down slightly, with volume and share growth in Fusion offset by softness in MACH3 in line with our trade-up strategy, which delivers positive sales mix. Western Europe volume increased high-single digits driven by strong MACH3 growth in Germany ahead of a price increase in January and some Fusion ProGlide pipeline shipments in Germany and France prior to launch in January. Male Personal Care unit volume increased mid-single digits. North America volume increased high-single digits driven by continued strength of the Old Spice brand, which shipped more than 15% ahead of year ago. Health Care organic sales increased 5%. Volume grew 5% as well, and pricing and mix were neutral. Oral Care grew shipments high-single digits and global value share over half a point. North America Oral Care increased volume double digits and value share by 1½ points to over 38% behind the continued success of Crest 3D White, the Crest Clinical line and the Crest for Me innovations. Western Europe grew volume high-single digits and value share by nearly 1½ points, driven by Oral-B Power Brush and Oral-B toothpaste success in Benelux. Developing market unit volume increased mid-single digits. Latin America shipments grew more than 25% versus year ago. Brazil Oral-B volume was up nearly 50% behind the continued expansion and support of Oral-B toothpaste. Mexico was also very strong with Crest volume up nearly 50%, oral-B up nearly 30% and toothpaste value share increasing over 3½ points. Feminine Care unit volume increased mid-single digits with developing markets up high-single digits. Naturella volume grew above 30% driven by expansion into Brazil in October and China last March. India and the Philippines both increased Always' volume shipments over 25% behind recent initiatives on both mid- and premium-tier products. Developed market shipments grew low-single digits. Western Europe shipments were up low-single digits and value share increased by 1½ points. Always shipments in the U.K. increased over 15% behind the Always Simply Fits mid-tier initiative that launched in January 2010. Personal Health Care shipments were up low-single digits with developing markets growing more than 15% versus year ago. Both Mexico and Brazil Vicks shipments grew over 30% behind strong commercial innovation and expectations of a strong cold and flu season. Snacks and Pet Care organic sales declined 8%. The solid growth in Snacks was more than offset by sharp declines on Pet. Organic volume was down 6% with product and geographic mix down 1%. Snacks shipments grew mid-single digits and with growth across all five geographic regions. Latin America grew volume by about 20% behind the Xtreme Pringles initiatives and holiday-focused commercial innovation. Central and Eastern Europe, Middle East and Africa regions, as well as overall developing markets grew volume nearly 20%. Developed market shipments increased low-single digits with North America returning to share growth behind improved customer support. Pet Care volume was down due to the temporary supply disruption mentioned last quarter. The restructuring and process improvements are nearing completion. We expect to restore full supply and merchandising capability within the next two months. Fabric and Home Care organic sales increased 2%. Organic volume growth was 5% with developed markets up mid-single digits and developing markets up high-single digits. The positive volume was partially offset by three points of geographic and product mix and one point of pricing. Fabric Care grew unit volume mid-single digits, with developing markets up high-single digits. Value share grew across all geographic regions and was up half a point globally. U.S. laundry value share increased over 1½ points with growth in Tide, Gain and Era. U.S. fabric enhancers value share increased over 2½ points with all brands growing. Japan also had strong growth with volume increasing over 15% due to a combination of sustaining and commercial innovations on Bold, Ariel and Lenor. Developing market shipments were strong in many markets. In India, Tide shipments increased about 60% behind the continued growth of Tide Naturals, and total laundry value share increased by two points. In Russia, Tide unit volume was up over 35% due to strong marketing support, and Lenor fabric enhancer unit volume was up over 50% due to a consumption increase from a product compassion introduced in October. In Brazil, Ariel shipments almost doubled behind the growth of liquid detergents, and total laundry value share increased more than 2½ points. The Home Care segment increased organic unit volume high-single digits with all regions growing. Global value share was up over one point to 18%. North America grew shipments mid-single digits and value share over two points behind the success of the recent Gain hand dish brand and Febreze Set & Refresh innovation. Japan grew shipments about 40% and value share over five points to a 20% share, driving overall market growth in the region. With success behind several Febreze product innovations and the launch of Joy Hand Renewal, P&G is now the number one company in both dish care and air care categories in Japan. Home Care developing markets grew organic shipments in the mid-teens. The Central and Eastern Europe, Middle East and Africa region increased organic volume by more than 15% and grew value share two points. Hand dish care was the primary driver of the growth with Russia Fairy shipments increasing about 25% behind the winter hands commercial innovation and with volume continuing to grow in recently expanded markets such as Turkey and Egypt. The Asia region also experienced very strong growth with Philippines hand dish and Korea air care both increasing volume about 30% and share over four points driven by increased levels of marketing support to drive trial and excellent in-store execution. Batteries unit volume increased high-single digits. Developed market shipments grew high-single digits behind a very strong holiday season. In developing markets, volume increased mid-single digits, India shipments of Duracell were up about 70% due to increased distribution to more retail outlets. Baby and Family Care delivered 6% organic sales growth behind volume growth of 8%. Mix reduced sales by two points as developing markets grew about 3x faster than developed market, as well as disproportionate growth of mid-tier and large-sized products. Pricing was neutral. Baby Care shipments were up high-single digits and global value share increased more than a point with all regions growing share. Developed market shipments increased low-single digits. U.S. diaper value share was up nearly one point on a declining market and volume was flat. Luvs volume was up mid-single digits driven by the heavy duty protection initiative. Western Europe increased volume low-single digit and value share over 1½ points behind the Dry Max launch and an overnight dryness initiative on Pampers Baby Dry. Baby Care increased developing market shipments in the mid-teens. India Pampers shipments grew more than 50% and share grew 1½ points in a fast-growing market. Pampers Brazil volume grew over 25% and China volume grew nearly 20% driven by distribution gains, marketing investments and market growth. Family Care grew volume high-single digits and increased value share by almost half a point. Developed market shipments were up high-single digits. U.S. Charmin volume increased over 10% driven by success of recent product improvements, strong marketing support and distribution gains in Charmin Basic. Developing markets shipments increased more than 30% driven primarily by improved value impressions in Mexico. That concludes the business segment review, and I'll hand the call back to Jon to discuss guidance for the fiscal year and the March quarter.

Thanks, Teri. Our guidance for organic sales and earnings per share growth for the fiscal year is unchanged. Our outlook for organic sales growth remains at 4% to 6%. We're also maintaining our guidance for all-in sales growth of 3% to 5%. As we said last quarter, where we land within this range will be driven by two factors: underlying market growth rates and our ability to grow ahead of market rates. As I mentioned earlier, we're delivering growth ahead of the market and we're growing share. However, underlying market growth rates in North America and Western Europe have been lower than expected so far this fiscal year. The core earnings per share guidance range stays at $391 million to $401 million, which equals growth of 7% to 9% versus prior year core earnings per share of $3.67. While we're not changing our core earnings per share guidance, there are two items worth noting. First, we now expect commodity cost will be an earnings headwind of about $1 billion after tax. This is roughly double the impact we expected at the start of the year. Second, we now expect the effective tax rate will likely be below 26% for the year due to the ongoing shift of our geographic mix, the positive progress we've made in resolving outstanding audits and the extension of U.S. tax laws. The volatility we're experiencing in market growth rates, input costs and foreign exchange drive an approach of providing reasonable and appropriately wide guidance ranges for sales and earnings per share growth. As we’ve said on a number of occasions, we will not chase foreign exchange or commodities or back off on investments simply to deliver a top-of-range number or an external estimate. Our actions will continue to be guided by our desire to advance our strategy and by our overriding objective of creating long-term value for shareholders. On the bottom line, all-in GAAP earnings per share range is now $3.89 to $3.99, which includes the $0.02 per share impact from the noncore legal and tax items in the December quarter. Regarding share repurchase, we continue to outlook a range of $6 billion to $8 billion for the year. Before going into the March quarter details, I want to address a few points on front half versus back half trends. Our fiscal year guidance implies acceleration in organic sales growth, operating profit and core earnings per share in the second half. We are comfortable with this guidance for several reasons. On the top line, there are three factors worth noting. First and most important, we have strong momentum in volume and market share growth. And we're confident that our innovation and expansion plans will sustain solid volume growth rates. We will continue to leverage innovations and expansions that first reached the market last year. And we have plans to enter 12 new category country combinations, 40 new category price tier combinations and 25 new category channel combinations in the second half. Second, as I mentioned earlier, we will have a better pricing comparison than we've had over the last four quarters. Pricing will swing from negative to positive by the end of the fiscal year, moving from a one point drag in the first half to up to a one point help in the second half. As we discussed on the call last quarter, if we simply hold the average sales per unit flat at the level we just delivered in the December quarter, the year-on-year price and mix impact should improve by as much as three points by the end of the year from down about 2½ points this quarter to neutral to positive in the June quarter. Third, the supply constraints that created the top line headwind in the first half of the year in Oral Care, Blades and Razors, Body Washes and Pet Care should largely be behind us. We have announced to retailers that we should be back to full supply and merchandising capability on these businesses in the near future. On the bottom line, we're forecasting core earnings per share growth in the range of 10% to 16% in the second half. This rapid EPS acceleration is heavily influenced by dynamics in the base period not by unusual trends in the current year. In fact, the front half versus back half balance of earnings this year is very similar to what we have delivered on average over the past five years. Last fiscal year was the anomaly with lower-than-normal operating profit in the second half. The challenges we face in the second half of last year from higher commodity cost, foreign exchange and increased marketing investments all lead to easier comparisons in the second half of this year. Now moving to the March quarter. We're estimating organic sales growth in the range of 4% to 6%. We expect all-in sales growth of 5% to 7%. Within this, we expect foreign exchange to add about 1% to sales growth and the net impact of acquisitions and divestitures to be roughly neutral to sales growth. On the bottom line, earnings per share is estimated in the range of $0.95 to $1. This translates to core earnings per share growth of 7% to 12% for the quarter versus base period core earnings per share of $0.89. We expect strong operating profit growth in the quarter. In closing, as I said earlier, we're pleased with the progress we have made in the first half of this year. We're touching on improving the lives of more consumers in more parts of the world more completely and we are seeing the results in broad-based volume and market share growth. We are better integrating our plans across categories and geographies to operate more fully as one company, and we are simplifying our operations, reducing costs while increasing our productivity, efficiency and agility. To be clear, there is still more work to do. We need to deliver the price mix improvement we are forecasting while sustaining solid volume growth. We need to grow our market share in more brands and in more markets. We need to improve our demand forecasting and supply planning so we can more fully leverage our new innovations and portfolio expansions. And given the rising input cost environment, we need even more focus on identifying and delivering cost savings in all parts of the business. We're confident that through our growth and operating strategies, we'll deliver the acceleration in top line and bottom line results that we expect. Now Bob, Teri and I will be happy to take your questions.

[Operator Instructions] Your first question comes from the line of Lauren Lieberman with Barclays Capital. Lauren Lieberman - Barclays Capital: I just wanted to ask a bit about the commodity, sort of surprised both for the rest of the year but also particularly in the quarter. So at what point in the quarter were you guys realizing that commodities were a much bigger headwind than expected? I would assume that's the case based on the gross margin performance. And I'd love any commentary you can offer very specifically around pricing initiatives related to the greater gross margin pressure than you had expected before.

Commodities really continued to -- the pricing on commodities continued to accelerate throughout the quarter. But I would tell you that it's more of a year ago comparison than it is a sequential increase in commodities. Commodity costs increased 6% versus the September quarter. But as we said earlier, they're up about 20% versus year ago. You're absolutely right to ask the question on how we plan to manage those increased commodity costs going forward. I mentioned continued focus on cost savings which will clearly be a part of this. We'll also look at pricing in commodity-exposed businesses where that's appropriate. The last thing I would say is as we've talked before, just on a comparative basis, we should have a much better commodity comparison in the second half than we had in the first half as this long run-up that we've been on really started in the second half of last fiscal year.

And your next question comes from the line of Chris Ferrara with Bank of America. Christopher Ferrara - BofA Merrill Lynch: I guess I wanted to get into market growth rates. It seems like maybe U.S. and Western Europe I guess slowed a little bit more than you had expected in the end of the quarter, maybe in December, maybe post Analyst Day. Can you just talk about how the market growth rates progressed and how you see that playing out into the beginning of the calendar year 2011? And then, I guess, whether you think there are going to be tools to sort of get growth going -- to drive growth higher in those categories.

We began the fiscal year expecting global market growth rate of 3% to 4%. This assumed the developed markets grew 1% to 2%, and developing markets grew 6% to 8%. Developing markets have grown as we expected, but developed markets particularly the United States have underperformed. For the first half of fiscal year, developed markets grew only about half a percent, and we continue to expect to grow 1% to 2% above market growth rate levels due to our strong multiyear innovation program, expansion programs, which Jon and Teri talked about. For this specific quarter, in terms of value growth, North America, Western Europe and Japan were all flat. The developing markets were up about 8%. Importantly, we grew share in North America, Western Europe and Japan partly because the markets were flat but also because of our high volume growth rates. In North America, we grew share in December higher than we've grown it in four years. In Western Europe, we've had 12 consecutive months of share growth, and in Japan, we're the only company in our industry growing share and we're growing share on about 90% of our business.

And in terms of the evolution of the market growth through the quarter, Chris, there was a pretty significant drop off towards the end of the quarter. While it's qualitative judgment, it looks like what may have happened is that consumers, as you saw on the retail sales figures, actually spent on Christmas. And by the end of the month, there wasn't a lot left.

And your next question comes from the line of John Faucher with JPMorgan. John Faucher - JP Morgan Chase & Co: Jon, you talked a little bit about the pricing comparisons and how those are going to play out over the course of I guess calendar 2011. It sounds as though you're expecting a similar level of volume share performance in 2011 versus 2010. So despite the fact that you won't have the pricing advantage, can you talk a little bit about the volume comps and the way they play out in a similar way and how you expect your volume share performance to be in 2011 versus 2010?

We do expect similar levels of volume growth in the second half as compared to the first half, so that assumption is correct. It'll really be driven by two things. One, the continued expansion of our investment and expansion program. I talked in my comments about the number of category country, category price tier and channel entries, which is very significant in the second part of the year. So that will be a big driver of continued volume progress. And then I also mentioned – I mentioned it in the sales context, but it's relevant in the volume context that we had, because of more demand than we expected for a number of innovations, we were supply constrained, pretty significantly on a number of categories in the first half. That situation is largely behind us. So as we're able to fully leverage those innovations, we should see more growth. I'll just give you one example, on Fusion ProGlide where demand was much higher than we expected in North America, we effectively had to make significant reductions in merchandising as we went through the back of the year. And we'll essentially be, if you will, relaunching Fusion ProGlide in North America as well as expanding it across the world.

Maybe I'll just comment on Fusion ProGlide if I can, Jon, because if you simply look at the market share, you might get the wrong impression. Fusion ProGlide is performing really well and we're pleased with the initial results after only seven months in market. The Fusion shares in U.S. have reached 34%, which is up three points versus year ago. But regarding comparison to competitive launches, you could see where it looks like we've lost some share on Blades and Razors in the U.S. That's because of the supply constraint and because we've had to cancel merchandising that exists. But we're confident that once we put that merchandising back in place, which we're now doing, that the sales will take off. What we know from our research is that sales of U.S. Fusion ProGlide cartridges have been at the rate of more than 6x the rate of Fusion ProGlide razors, while the competitive replacement cartridges are only selling about two times the razor sales and that's a key metric for us.

And your next question comes from the line of Andrew Sawyer with Goldman Sachs. Andrew Sawyer - Goldman Sachs Group Inc.: I was hoping you guys could just talk a little bit about the Fabric and Home Care numbers, and I guess what's driving the sales slowdown there, and if anything there surprised you. And also if you could shape up how you’re performing from a market share perspective both on the volume and the dollar sales side?

Andy, we're growing market share in Fabric and Home Care. We have a number of terrific innovations in market, things like Ariel and Tide Acti-Lift, things like the line of additive products, which we've now launched in many countries around the world. So we are happy with our share growth in those markets. I think the thing that's probably affecting us more than anything else is the lack of market growth in this market because we are growing share.

Your next question comes from the line of Nik Modi with UBS. Nik Modi - UBS Investment Bank: Just wanted to get a little more context on the developed markets. You talk about market growth rates being lower than you expected. Can you kind of decompose that? Is this from the unit side or is it because there's still a lot of promo spending out there that's been inefficient? Can you just provide any context on the general market growth environment in Japan, Western Europe and North America?

The promotion volumes, Nik, just to answer that part of the question, the promotion levels are actually reducing or narrowing sequentially. So that is not what's driving this. It's more fundamental consumer demand.

I think for example, look at Western Europe and you look at the U.K. for example, which had a negative economic situation, we're still growing share in the U.K. On a large segment of our business in Japan, it's basically a story since the burst of the economic bubble, as you know Japan has had trouble creating macroeconomic growth particularly given the demographic problems they have. But we are growing share. As I said there, 90% of our business we’re growing share and some of the strongest growth rates that we've had in Japan since we entered Japan in 1973. And in North America, as I said, as Jon indicated, we think there was a slowdown in consumer spending on our products after the holidays. We're seeing that pick back up, but the good news is again we had our highest share growth in December in four years in North America. So again we think we're doing the right things, and the innovations we're marketing are selling.

And on the macro level, as Bob indicated, we are seeing and it's early, but in January the markets are improving a little bit, particularly in North America. And we really haven't seen the impact on market growth rates yet of the pretty significant stimulus, if you will, in the context of the income tax extension that happened at the very end of this quarter.

Your next question comes from the line of Bill Schmitz with Deutsche Bank. William Schmitz - Deutsche Bank AG: Did you announce any list price increases? I know you said if you just held the price per unit flat, you’d get three points of growth, which I’m kind of confused about also because if the price per unit is the same this year as last year, I'm not sure how you get that three points. But the other question is do you have any big list price increases? And then just a side question housekeeping wise, can you give us guidance for the tax rate for the March quarter?

On pricing, Bill, we recently announced pricing effective mid-March on Duracell in North America. We've taken foreign exchange-related price increases to protect the structural economics of our business in places such as Venezuela. And we've increased pricing in India on Tide Plus in July, and again we did that in October. In September, we increased prices on Feminine Care and diapers in India to recover changes in excise duties. We're also taking some actions in Oral Care in Western Europe. Some in Baby Care in Central Eastern Europe, Middle East and Africa. And I've talked about India laundry and I've talked about Venezuela. So that's generally the pricing that we've taken. The part of the Duracell pricing is of course returning to the pre-value plan pack sizes on affected AA and AAA packs, and we're increasing the pricing across much of the balance of the Battery portfolio. And this, the battery announcement, affects about 70% of our business.

On the tax rate, Bill, the two items that I mentioned of the three that affected our tax rate in O&D, those are the core items, will carry forward. So to the extent we continue developing disproportionately, growing disproportionately in developing markets, that will continue to have a tax benefit that is sustainable going forward. Obviously, the U.S. tax legislation is sustainable going forward. And we've given you a tax rate on the year, you can get pretty close to the quarter with the actuals and that number. Tax is an area of volatility, but I think you can get pretty close. I just want to dwell on that point for one more minute. If you look at the drivers of the organic tax rate on the quarter, I do want to reiterate the point that we really view two of those as completely sustainable going forward. So really there is, if you will, a one-time item related to successful defense of tax audits, that's $0.03 to $0.04 on the second quarter.

Your next question comes from the line of Joe Altobello with Oppenheimer. Joseph Altobello - Oppenheimer & Co. Inc.: I just wanted to follow up on the answer you gave to Bill Schmitz regarding pricing. Are those pricing changes incremental to your business model? And the reason I ask is because when you're talking about roughly an incremental $0.16 or $0.17 headwind from commodity, I'm trying to figure out how you're making that up. It doesn't sound like your pricing commentary is all that different on a full year basis. So I'm just trying to figure out how those two statements equate to each other.

Well, we haven't taken yet, you're absolutely right, Joe, commodity-related pricing increases to any large extent. And obviously, it would be inappropriate for us to comment on future pricing activities. But we'll continue to stay committed to a healthy economic structure both through cost savings as a way to offset commodities, and where appropriate, we will take price increases.

Your next question comes from the line of Connie Maneaty with BMO Capital Markets. Constance Maneaty - BMO Capital Markets U.S.: Could you talk in some detail about the profit dynamics in the Fabric and Home Care segments again? Because as I'm looking at the quarters, are we headed for another period where the profit will have declined for an extended period of time? And what do you think would start to turn that in a more sustainably healthy direction?

As we tried to explain at a company level, but it's clearly true in Fabric and Home Care, we get into a much better comparative cost situation in the back half across the board. The commodity cost index in the second quarter is much higher than it will be in the back half of the year, again because commodities in the base period started their ramp-up in the back half. You'll recall last year that our marketing expense was significantly back half loaded. This year, it's more evenly distributed. Foreign exchange was a hurt in the first half of this year, is a help at current spot rates in the back half of next year. What you're seeing on the income statement for Fabric and Home Care in the second quarter reflects all of those dynamics but also reflects the fact that Fabric and Home Care is one of our most commodity-exposed businesses. So that commodity increase that occurred has a disproportionate impact on that segment. Typically, where we have commodity-exposed categories at the appropriate levels of commodity price increases, we would look to price to recover.

Your next question comes from the line of Dara Mohsenian with Morgan Stanley. Dara Mohsenian - Morgan Stanley: Clearly, you've sacrificed some profitability here in the short term over the last few quarters as you focused on volume growth, and yet your organic sales growth is coming in at the low end of what you expected and is pretty muted on a year-over-year basis, at the same time, commodity costs are now reinflating. So I'm just wondering if conceptually, we should expect to see more of a focus on profitability and pricing going forward. And if you'd expect any adjustment to that strategy.

Well, Dara, when we started on this strategy back in the April, May, June quarter of 2009, we talked about the fact that we needed to grow market share profitably. And at that time, we were growing market share in about a quarter of our business. And we had suffered one of the worst quarters in a few decades in our company. And what we've been doing is following that glide path toward our guidance for this fiscal year, which is 7% to 9% core EPS growth for the fiscal year and 4% to 6% organic NOS [ph] growth. We're on that glide path. We're now growing market share or holding market share in about 60% of our business globally. And we think the strategies are working.

Just to build on that, we're actually, on an earnings per share standpoint, ahead of the glide path in terms of slightly overdelivering the first half of the year. So just to reiterate Bob's point, we're right on track in terms of what we expect to deliver, which involves a significant amount of earnings per share growth this fiscal year.

Your next question comes from the line of Doug Lane with Jefferies. Douglas Lane - Jefferies & Company, Inc.: Just looking at changes since the September quarter, I noticed that on your market share progress, there's one less of your top 17 countries and one less of your 23 billion-dollar brands growing market share and I'm just wondering if you could update us on the current market share trends accounting for that differential.

What I would say, Doug, is that our market share is stronger today than it even was in the last quarter. Those metrics may look otherwise. But the point that we made, which I think is significant, is for the first time in some time, we are now growing market share over the past 12-month, past nine-month, past six-month, past three-month period. And that's a very difficult thing to do, and past one-month period. And if you go across our regions, every region is growing market share over every one of those time periods. So in other words, let's take North America as an example, past three months, we're up 0.1%; past six months, we’re up 0.1%; past 12 months -- Asia, past three months, up 0.6%; past six months, up 0.6%; past 12 months up 0.4%. So as we look across the regions, the market share growth is strengthening. And as we look across our businesses by business unit, our Household Care market share is strengthening, our Health & Well-Being market share is strengthening and our Beauty market share is strengthening from what we would argue was a pretty unacceptable level over a year ago now. So we feel like the market share is growing and that it's going to continue to grow. And further evidence of that is the fact that private label shares are down versus a year ago for three straight reporting periods in the U.S. and six consecutive periods in Western Europe. And I understand the volume results of some of our competitors have not been very good.

Your next question comes from the line of Ed Kelly with Crédit Suisse. Edward Kelly - Crédit Suisse AG: I'd like to get back on the commodity headwind issue. Could you just discuss your confidence in the ability to pass through commodity-based price increases in an environment where the consumer is clearly a little bit weaker than what you thought? Will the consumer and even the retailer for that matter accept them? And then on the cost saving side, how much of the incremental commodity hit will be absorbed by cost saves? And is that in the COGS, SG&A or both?

In terms of ability to pass through, we're really in a very good position in that regard. You may recall us talking historically about our desire always to link pricing when it's necessary to innovation. And with our focus on innovation and a very strong portfolio of innovation in the second half, we're actually in a pretty good place. These commodity cost increases where they’re occurring are broad-based. In other words, they're affecting not just ourselves but they're affecting private label brands. So we don't expect there to be a surprise in the context of retailer receptivity. They're going to have a need here as well to the extent these trends continue.

And we'll obviously be working to develop substitute materials for those that are rising quickly. Some of them are very, very specific like lauric acid. And we know what those chemicals are, and we'll work to obviate the cost increases, while as Jon says, if we can't offset it, we'll price for it.

To the question of how much we can offset, if you look at the second quarter, we offset almost all of the commodity cost increase. We had 140 basis points of savings that offset most of the 160 basis points of commodity cost increases. And as we talked about in Analyst Day, we will continue focusing on SG&A savings as well. So it will be a combination of all of the above.

Your next question comes from the line of Jason Gere with RBC Capital Markets. Jason Gere - RBC Capital Markets, LLC: Just a question I guess on total marketing spending, really trade spend versus advertising. So if we're hearing right, it sounds like you're saying the promotional spending is starting to narrow a little bit. I was wondering if you could kind of talk about some of the categories where you are starting to see that trend. And then just when we think about the back half, the advertising, I know you have a really tough comparison versus last year and I don't think you were really planning on a major step up and hopefully that plays into some of the stronger operating profit in the third quarter. But it seems like there's a little bit of struggling of demand in North America and your competition, as you pointed out, their volumes have not been good. I'm just wondering about the need to even increase the advertising beyond what you've stated at your Analyst Day.

Jason, the marketing spend that we are seeing around the world and I think North America is similar as well, is we're seeing somewhat of a deceleration of temporary price reduction or discounting. We're also seeing around the world, as Jon mentioned earlier, our comparisons in marketing spend are going to work to our favor in the second half, and certainly that's part of the margin improvement in the second half as we come off of those higher marketing spend levels. Yet, we expect to end the year about where we've ended every other year, which is about 10% or so of sales, which of course will be a higher number than the previous year since the sales number will be higher.

The broad market share progress that Bob talked about, that's I think symptomatic of really having our marketing program where it needs to be. So I don't expect to see significant increases going forward. And as a result, as Bob rightly described, on a comp basis, that should pick us up some earnings tailwind in the back half.

I should say that our marketing effectiveness, we measure marketing ROI on marketing spend. And our marketing effectiveness is at all-time high levels. Part of the reason for that is we're doing a better job operating as one company as we talked at the Analyst Day. And when we operate as one company and take advantage of the full portfolio of brands that we have, it results in greater growth and it results in much better efficiency of our marketing spend.

Your next question comes from the line of Jon Andersen with William Blair. Jon Andersen - William Blair & Company L.L.C.: I was just wondering if you could compare and contrast perhaps the performance of some of your new or premium items versus mid-tier value offerings. I'm just trying to get a sense of whether you're seeing any differences in the strength of your portfolio at a premium versus kind of value end.

Jon, well, we already talked Fusion ProGlide, which I think is a wonderful example of when you innovate at the high end, there's a lot of consumer demand. Just to reiterate, because it's a key metric, the sales of the Fusion ProGlide cartridges have been at a rate that's more than 6x the rate of ProGlide razors. That means that people are coming back and buying more cartridges because they like the shave so much. In fact, as Jon said, we've not been able to supply them all, while our competitor replacement cartridges of their new item are only selling at about 2x the razor sale. Another great example is what we're doing on Crest Clinical Sensitivity and Crest Clinical Gum Protection, both of which are premium priced. They began shipping in August and they’re off to a great start. While early, the current end-market results have doubled our share in the sensitivity space. And as opposed to a competitive product called Pro-Relief, Pro-Health is already FDA approved and therefore, it's in the U.S. now. And with this launch, we have two Sensitivity SKUs in market, both Crest Pro-Health Sensitivity Shield and Crest Clinical Sensitivity and both are doing extremely well despite the fact that they’re premium priced. Pampers Dry Max is another premium-price item. It's holding and are growing share in 13 of our top 17 markets around the world. It's now in more than 50 countries worldwide. The results in Europe had been very strong with cumulative shipments up double digits since launch since last May and value shares are up strongly versus a year ago. Diaper value shares in Western Europe, for example, are 58%, which is up two full points versus a year ago. In the U.S., Pampers shares are up one point to 31% and the vast majority of consumers who have tried Dry Max are very happy with it, with the comfort, with the dryness and with their baby using it, and it's going well. So the premium-priced innovations are doing extremely well, and they're doing well because there's a lot of demand out there when you innovate.

And on the lower end, as Teri had mentioned in some of her discussion, we're seeing significant growth for instance, in India, Fabric Care plus 50%. We're continuing to innovate very successfully at the low end as well. We wouldn't be generating the kind of volume growth, 10% volume growth in developing markets if we weren't being successful really across the portfolio in terms of our innovation efforts.

Your next question comes from the line of Bill Chappell with SunTrust. William Chappell - SunTrust Robinson Humphrey Capital Markets: I'm sorry if I missed this, but you talked a lot about developed markets being below kind of expectation. Did you say anything about developing markets and maybe how they came in versus expectations and maybe how that’s progressed throughout the quarter and into this year?

Bill, just to make sure I'm clear on my articulation. What I said was that the market growth rate of developed markets was not as high as we expected. In terms of developing markets, they're right on. They grew about 8% in value terms and pretty consistently, like Greater China was 8%; Central, Eastern Europe, Middle East, Africa, 6%; Latin America 8%; the ASEAN markets and Korea about 8%. So you see a real consistency there, that average is about 8%. And that is exactly what we projected at the beginning of the year. We said at the beginning of the year 7% to 8%, and it's right about there. It's really in the developed markets where we had projected higher numbers, and we had projected 3% to 4%, and we're basically seeing, well in the last quarter flat – I’m sorry, 1% to 2% is what we had projected, and what we're seeing is flat. Our expectation is that chances are that, that will pick up in the second half because we are seeing an economic recovery in these markets. But there still are some concerns out there, whether it's the fiscal and financial situation in places like Ireland, Spain or Greece and the tax situation in the U.S., which we kind of dodged a bullet in December. But we have to work with the U.S. government to get the U.S. corporate tax rate down. We now have the second highest corporate tax rate in the world. In the spring, when Japan lowers theirs, we'll have the highest. So we're working hard to help the U.S. government understand that U.S. companies, multinationals need to be competitive, lowering their corporate tax rate is one way to do it and moving to a territorial versus a worldwide system is another way to do it.

Just to the question of our own growth trends in developing market, those are accelerating as we bring more of our portfolio to bear. So we're very optimistic in our view for our business in developing markets.

When you look at the number of opportunities that Jon talked about in his message that we're closing in the next half, it speaks to the kind of fundamentals systemic, sustainable growth we're going to create as we enter these new category country combinations around the world. And that's what we've done in the last six months. We're going to continue doing that.

Your next question comes from the line of Tim Conder with Wells Fargo. Timothy Conder - Wells Fargo Securities, LLC: Could you give us a little more color on the developing and emerging markets where you're taking share? Is it coming from local competitors, larger competitors, and just by region, maybe answer that question?

With the kind of share that we're growing right now, Tim, where you're growing across all time periods, across most geographies, across most business units, the answer would have to be all of the above. Because it's taking bits of share from every competitor rather than necessarily targeting a single competitor. While at the same time, we have to say that our accelerated volume growth rate is also because we’re in many categories where there virtually is no competitor. If you think about India diapers, for example, the competitor there largely is the bottom that's not diapered at all. When you think about even hair care in China, getting the consumer to wash their hair more than once a week, there's huge opportunity out there that isn't about just share growth, and that's why the 8% growth in developing markets is so critical.

Your next question comes from the line of Caroline Levy with CLSA. Caroline Levy - Credit Agricole Securities (USA) Inc.: I'm looking at price mix and I'm wondering if you can articulate, and I'm sorry if you have already, but how much of the negative was country driven versus the faster growth in lower-priced items. And I'm also wondering with Wal-Mart's announcement about its desire for more low-price product, if you feel you're already where you need to be or if that's going to put more pressure in the U.S. and other developed markets on you needing to innovate in the lower price points.

First, on the specific question on the components of mix. Mix had a two-point negative impact. Half of that or a point was country mix, the rest was split across other forms of mix. But it's largely country mix given the disproportionate growth in developing markets that we've been talking about this morning. Relative to Wal-Mart, we're growing the business very well in Wal-Mart International and Sam's. The place where we're focusing to help Wal-Mart grow more is in U.S. stores. The issue in U.S. stores for our business is not largely SKU or price or even brand portfolio driven as much as it is sheer execution. We have partnered with Wal-Mart to create Family Movie Nights, which is a great thing, where our feedback from consumers is outstanding on this. They want to have a night they can get the family together and watch a movie and not have to have the remote in their hands to change channels. But our execution of that has not been as good as we would like. There haven't been as many items in the tab as there should be. There haven't been as many displays in-store. Another example of that is Wal-Mart took the decision some years ago to remove battery centers from their stores, and they lost quite a bit of business in the battery business. We're now working with Wal-Mart to reinstitute those battery centers, and not surprisingly, they're gaining back their closure rate and their market share on batteries. So it's really about our execution with Wal-Mart, Wal-Mart's execution with us than it is about introducing a bunch of new low-priced SKUs.

Your next question comes from the line of Ali Dibadj with Bernstein. Ali Dibadj - Bernstein Research: Would love some, I guess some help maybe, because on the one hand I'm hearing you saying that the consumer will actually be able to absorb price increases from commodities. But on the other hand, you painted the picture that the consumer found it difficult to buy shampoo or diapers even after Christmas. So I guess, in that context and in the context of all your peers accelerating their own cost cutting to the level that's in line if not more than yours proportionally, I kind of want to ask about one potential way of plugging a hole, which is acquisitions. And it seems like you've gone more open about acquisitions over the past little while. So 18 months ago, it was, "I'd be more of a seller than a buyer." 12 month ago, it was bolt-on. In December it was, "We would not rule out a big acquisition." It sounds like this morning, correct me if I'm wrong, it sounds like there's more discussion about we're looking to add to our portfolio. So in all of that, how should we think about acquisition risk. And that especially, when we see that your buybacks dropped off last quarter versus this quarter pretty precipitously. So there's a lot in there, but that's what I'm thinking about.

First of all, acquiring to fill a hole implies you have a hole. And as we've been trying to describe we don't see that we have a hole. We're well on track with our plan at the present point. In terms of our general stance to acquisition, we talked probably four years ago about being a net seller. So that was a quite a while ago. We have been focused on acquisitions which allow us to realize our purposes via growth strategy. Ambi Pur is a very good example, allowed us to get from 17 countries in air care to 84 countries, serving more consumers around the world. Those are opportunities that we are open to. I continue to believe that a large acquisition, while you'd never write it off completely, is not a highly probable event. And the buyback pattern really reflects simply our pattern of cash flow across the year. And we expect, as I said in my comments, cash flow to accelerate as operating earnings growth accelerates in the back half of the year. Having said that, we've purchased $3.5 billion of shares against a target of 6% to 8%, which would lead you right to the middle of the range on a prorated basis. So we're largely again on track.

Ali, the way I think of it, and I know Jon shares this, is that we should have growth plans to achieve our goals and our strategies without acquisitions. And that's why one of the things we tried to communicate during the Analyst Day, and I remember you were there sitting about the third or fourth row, is we now have detailed plans to enter 250 new category country white space opportunities, enter 750 new category country price tiers, enter 950 new category country channels by fiscal year 2015. This is not pie in the sky. This is not something we dream about. These are hard and fast plans and we put up copies of those plans during the meeting. So any acquisition we would consider has to be measured as a use of cash against those opportunities that we already have. And that's a relatively high bar because we've been so deliberate in following this strategy and staging those opportunities.

Your next question comes from the line of Alice Longley with Buckingham Research. Alice Longley - Buckingham Research Group, Inc.: I have some follow-up questions on mix, and this is separate from the geographic mix. Can you tell us within the quarter in which regions your mix was negative? Was it negative within all the major regions? Number two, in which regions do you expect mix to improve in the second half? And then thirdly, you said one of the offsets to commodity cost pressures is innovation, and how can this be helpful if the mix is still negative?

Well, first of all, as we just stated, the country price mix being one point. That leaves one point of mix across the geographies. It isn't related to differential sales growths across those geographies. That is fairly consistent across the world. There are major differences in countries that we're seeing in terms of either brand mix or size mix that drives the rest of that. As I mentioned earlier, on our premium items, we've actually been supply constrained, which has held back our ability to fully leverage those initiatives both from a top line and a bottom line standpoint. And we expect that to improve starting now. So that should be a help to price mix going forward.

Your next question comes from Linda Bolton-Weiser with Caris. Linda Weiser - Caris & Company: It just strikes me that your commentary about your earnings performance in general from a big picture perspective really relates a lot more to macro factors these days than it did ten years ago, commodities and overall category growth. On the idea of category growth in developed markets, the only way to do that is through innovation to expand the categories and then you'll have category growth. It seems the innovations you're coming out with are not truly innovations in the sense like when you first came up with Teeth Whitening, that was expanding the Oral Care category. 3D White Express is not really a true innovation, just as an example. Can you kind of give us some comfort that in FY '12 or FY '13, there's going to be more category-expanding innovation that will help the growth in developed markets?

The way we look at it, Linda, is that we need to innovate in everything we do. So many of the innovations we do are category expanding. In other words, if you can get someone to wash their hair one more time a week, for example, Head & Shoulders works better to prevent dandruff and to take care of your scalp the more frequently you use it. So as we advertise Head & Shoulders around the world, the number one selling shampoo around the world, we obviously work to get people to wash their hair more frequently because they get a better end result and the product works better. So we do work in existing categories to expand them. Separately, we work to create new categories, and we said in our analyst day that we're really ramping up our efforts to do more discontinuous innovation. Bruce Brown talked about this. We’ve set up new business development units under each one of the vice chairs. And we're doing a lot of work. In fact, you may have seen the Fortune Magazine article about the $2-a-day consumer in China. We're doing a lot of work to figure out how to create new categories where categories don't exist. And I think frankly, we would all argue with you a little bit as to whether something like Crest Pro-Health or 3D White is an innovation, and I would simply point to the way the consumer votes, which is look at our market share, look at our volume results, look at our profit results in Oral Care, and that's how the consumer’s voting. And I think they’re voting it’s an innovation.

Your next question comes from the line of Mark Astrachan with Stifel Nicolaus. Mark Astrachan - Stifel, Nicolaus & Co., Inc.: Curious whether the supply constraints in the December quarter were more pronounced than they were in the September quarter. And then just unrelatedly, I'm curious how you can effectively balance these rising commodity costs and your need to offset those with cost savings with your focus on going after market share. It would seem like to some extent it sort of constrains one versus the other, so any sort of color there would be helpful.

On the supply constraints, Mark, it would be true that over the time that you are supply constrained, you’re exacerbating the volume versus the potential because you're cutting featuring, you're cutting merchandising, you're cutting displays and that obviously has a cumulative impact. So if we could have, for example, have the features on Fusion ProGlide in the United States, certainly the business in December would have looked much better than it does today. Relative to cost savings, cost savings is endemic in our culture. We talked at the Analyst Day about simplifying the organization. We talked about simplifying the number of SKUs, simplifying the number of colors of plastic, operating in different ways in logistics. So simplification is big for us. The other thing that's big for us is digitization where we're doing more of our R&D using simulation and modeling. We're doing more of our demand planning using simulation and modeling. We're doing a lot more in digitizing our business from end-to-end, from molecule creation to running our plants off of the point-of-sale data of our retailers. So that's critically important to us. And then the third area of cost savings that we're working as well is to get more from the size of our company as operating as one company because there's tremendous synergy in a company this size, and we've not mined at all. And so we're working to do that. So we've got quite a strong program within the company around simplification, around savings and that's enabled by digitization, and we're going to keep after that.

And basically, the way we look at it is those things that Bob described provide the financial fuel to invest in commercializing and marketing our products. So I would not expect us as part of squaring the circle to be reducing investments in that area. We plan to continue to invest very strongly there fueled by cost savings in other areas. One other point that I could give you, Mark, to your question on the supply constraint, just trying to dimensionalize that, we think that was about 30 to 40 basis point impact on the top line in the second quarter. So that is significant. That's the difference between, in our case, a three and a four, and again it should turn into a tailwind in the second half.

Your final question comes from the line of Alec Patterson with RCM. Alec Patterson - RCM: Just as you guys are trying to illustrate how you believe you're succeeding on your long-term goals of growing in excess of the categories and filling out white space and all that, it would be helpful if you could provide some sort of measurement of that success in market share and category growth that aligns with the way you guys report your results. So I was wondering, do you have market share and category growth rates by your GBUs, by the six basic segments that you can share with us.

Alex, we have market share by GBU and I tried to refer to that earlier that it's an improving situation across each one of the GBUs. Household Care, for example, has gone from plus 0.6% over the past 12 months to plus 0.8% over the last three months. Health & Well-Being has gone from flat to plus 0.1%, flat over the past 12 months to plus 0.1% over the last three months. Beauty and Grooming has gone from flat to positive over the past six months, plus 0.1% to about flat now but they’re impacted probably more than the other GBUs by lack of supply. We talked about Fusion ProGlide as an example. So that's becoming more and more positive particularly as I look at the numbers by country around the world. So those are the shares by business unit.

Alex, this is Jon. I think that you asked a good and fair question. And I think that where we can help you and others more in the future is to build in some of the commentary you're suggesting in Teri's segment commentary. There's no reason we can't talk about market sizes and market share in that context. So thanks for raising that as an opportunity and we will follow up on it.

Ladies and gentlemen, that concludes the question-and-answer session. I would like to turn the conference over to Jon Moeller for closing remarks.

I would just reiterate what we've been talking about all morning. In our view, we had a very strong quarter, strong volume and market share momentum, sales growth within our guidance range albeit at the low end. Earnings per share ahead of guidance albeit with some tax help, and we continue to feel we're right on track towards delivering 4% to 6% organic sales growth on the year, 7% to 9% core earnings per share growth and 90% or better free cash flow productivity. Thanks for your time this morning.

Thank you.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect and have a great day.