高露潔 (CL) 2006 Q2 法說會逐字稿

Good day and welcome to today's Colgate-Palmolive Company second-quarter 2006 earnings conference call.

Today's call is being recorded and being simulcast live at www.Colgate.com.

Just as a reminder, there may be a slight delay before the question-and-answer session begins, due to the Web simulcast.

At this time, for opening remarks and introductions, I would like to turn the conference over to the Vice President of Investor Relations, Ms. Bina Thompson.

Thanks, Erica, good morning, everybody, and welcome to our second-quarter earnings release conference call.

With me this morning are Reuben Mark, Chairman and CEO, Ian Cook, President and COO, Javier Tereul, Vice Chairman, Steve Patrick, see though, Dennis Hickey, Corporate Controller, and Ed Filusch, Treasurer.

Our remarks this morning on the second quarter will refer to our results excluding 115.9 million of after-tax charges related to the 2004 restructuring program and an 8.3 million non-cash after-tax charge, or less than $0.02 per share, in incremental stock compensation expenses due to the adoption of FASB 123R.

These items were included in the reported numbers contained in this morning's press release and accompanying financial statements.

The reported GAAP results (inaudible) a reconciliation to the result excluding these items are included in the press release and posted on the Investor Relations page of our Web site at www.Colgate.com.

Comments about expectations will also exclude comparable charges.

We're very pleased with the strong quarter which was detailed in this morning's press release.

I will spend just a few moments on some highlights overall and then review the divisions.

But before we turn it over to Q&A, Ian Cook would like to make a few remarks concerning our outlook going forward.

Good volume growth across all divisions was supported by strong increases in advertising.

Advertising was up absolutely and as a percent of sales in North America, Latin America, greater Asia-Africa, and Hill's.

Our gross margin increase of 100 basis points was the result of our continued funding the growth program, as well as the incremental benefits now being realized by our restructuring and the start of returns from our promotional efficiency building program.

As Reuben mentioned in the press release, we were able to increase advertising and profitability in the face of significant raw material cost pressures.

Our restructuring program remains on track, and we're beginning to see a ramp-up in the savings associated with it, as we had indicated to you previously.

Overall charges from the program remain in the range of 550 to 650 million after-tax, while the expected overall long-term savings remain in the range of 250 to 300 million after-tax.

As you can imagine, we are pleased with the double-digit operating profit and EPS increases, and as Reuben said in the press release, we expect double-digit profit growth for the remainder of this year and also for next year.

While we continue with our share repurchase program, our average diluted share count did not decline year-over-year in the second quarter as much as it usually does.

Our diluted share count actually increased slightly from the first quarter.

As you know, Colgate's share price has performed well recently, which resulted in a higher diluted share count.

So, let's turn to the divisions.

North America -- we are very encouraged by the continued strong momentum in North America and specifically in the U.S.

Volume growth, excluding divestitures, continues to be very strong and is broadly based across categories with particularly good growth in our high-margin businesses such as toothbrushes and toothpaste.

Our all-outlet national share of the toothpaste category, as measured by ACNielsen, for year-to-date is at 37.3%, up 20 basis points versus the prior year.

In manual toothbrushes, our share continues to build and reached another quarterly record of 23.6%, up 70 basis points from the year ago.

More new products are being launched as we speak to help maintain this good growth.

In toothpaste, we are launching a new variant in the Luminous line, Mint Twist, and for Max Fresh, a new exciting Kiss Me Mint flavor.

A new entry in the dish liquid category, Palmolive Oxy Foam, will be shipping in August.

This is a [solid] dish liquid which removes tough grease on contact.

In the fabric conditioner category, where we continue to grow share with the national share now over 11%, we are launching Suavitel Ultra with a positioning of three times the power for clothes soft as a mother's love.

One of the initial phases of our worldwide effort to increase the efficiency of our consumer and trade spending, under the name of Colgate Business Planning, was to roll out our return on (indiscernible) to all subsidiaries.

Much of the work on this initial ROI application was done here in the U.S.

The results are just beginning to bear fruit, the start of what we see as a very productive long-term business process.

Regular meetings to analyze promotion spending have been implemented across all our multifunctional selling teams in the U.S.

We are now sharing Best Practices to the Colgate world through our intranet and have also begun to incorporate our ROI analytics in our forward planning.

Our 2007 budgeting will be based solidly on our Best Practice in the promotional ROI area.

All of this has established a solid foundation and momentum for our full transition to CBP here in the U.S., driven by our SAP software by the end of this year.

Our acquisition of Tom's of Maine is proceeding well.

The health and specialty trade channel continues to grow double digits, and Tom's, as the clear oral care market leader in that segment, is benefiting from that.

While the transaction only just closed on May 1, we are already leveraging our strategic partnership in terms of sharing marketing and sales expertise and beginning to leverage distribution expansion capabilities in the traditional food, drug and mass channel.

So looking ahead, volume in North America should continue strong for the balance of year.

Operating profit should be up in both the third and fourth quarters and for the full year.

Europe/South Pacific -- macroeconomic conditions in Western Europe continue to be difficult.

While there is a very modest growth in GDP, consumer confidence in our biggest subsidiaries of France, Germany and Italy still remains very low.

Despite these macro problems, our volume in Western Europe, excluding divestitures, was up modestly, and as you would expect grew strongly in Central Europe.

As in other parts of the world, new products in Western Europe play an important role in growing our business.

We've already told you about Colgate Time Control and Sensitive Multi Protection, which continued to drive volume and margin.

Colgate's 360 Degree toothbrush is another premium-priced product which has resulted in share increases in virtually every subsidiary where it has been launched.

In the Homecare category, our expanded line of Ajax Professional, which has added a double-powered spray in addition to a degreaser spray, has allowed us to maintain share leadership.

Importantly, our restructuring activities, many of which are centered across Europe, are beginning to bear fruit and deliver the savings necessary to support our business with increased advertising.

In Australia, our toothpaste share is up almost 3 full points on a year-to-date basis at 67.6 with the most recent reading at 68.9.

Manual toothbrushes continue to reinforce their strong market-leading position with a 21.8 gap to the nearest competitor.

At 42.8%, our share is up almost 4 points versus the prior year due to better shelf positioning in certain retailers, as well as the continued success of Colgate's 360 Degree toothbrush.

Looking ahead, volume in Europe is expected to be up again in the low to mid single digits in both the third and fourth quarters.

Operating profit growth should accelerate somewhat in the first half of the year.

Latin America -- business in Latin America is strong across the region.

As you know, one of our key strategies associated with our worldwide business-building program has been to increase advertising investment, professional detailing, and in-store activity to ensure continued strong volume growth.

This has been very successfully implemented across the region, where we've increased all aspects of advertising meaningfully (inaudible) absolutely and as a percent of sales.

Increasingly, production of our products has been moved to our world-class factories in Brazil and Mexico.

The commercial hubbing model implemented a number of years ago in Central America is now been replicated in the Andean region, as well as in the (indiscernible) region allowing for more effective focused go-to-market initiatives.

In Mexico, volume increased with dollar sales growing even stronger, aided by selling-price increases.

Our toothpaste share is up year-over-year with a particularly strong leaning in the most recent period as well, over 80%.

This is the result of a focus on our premium products, such as Colgate Total and Colgate Max Fresh, which drive profitability as well as share.

In toothbrushes, our share reached near-record levels, almost 34% in the most recent period.

New products in the Personal Care category will contribute to continued good growth as well.

In the second quarter, we just introduced two new variants in our hand and body lotion, ActiFirm and Extra Dry.

In the Hair Care category we just launched four variants of combing creams to complement our shampoo and conditioner business, all completely incremental to this category.

Volume in Brazil increased very nicely on top of almost a 20% increase in the year-ago quarter.

Marketshares in that country are up in virtually every category with strong increases in toothpaste and toothbrushes.

Key to our toothpaste growth was the success of Colgate Total, which as elsewhere in the region was supported with a strong marketing plan, including national media, fast-lane in-store execution, and professional activities with dentists.

While the shower gel segment is quite new to this and other Latin American countries, it is fast-growing, and we've established clear leadership, achieving over 26% of the market in the most recent period.

Using the successful Brazilian model, we expect to grow this category in other countries through the balance of year.

Other highlights around the region include record toothbrush areas in Ecuador, Peru and the Dominican Republic of 61.9%, 66.9% and 72.9%, respectively.

Continued growth in toilet helped market share across the region, and maintenance of our over-70% share of the fabric conditioner market in Colombia, Central America, Dominican Republic and Peru, where we pursue an aggressive -- (technical difficulty) -- program.

This program includes sampling and consumer education on product usage and benefits, incentives for the indirect trade, educating the trade in order to increase category space on store shelf and portfolio promotional strategies to trade up consumers to larger sizes.

Looking ahead, volume growth in Latin America should continue at current levels for the balance of the year.

Operating profit is expected to grow strong double digits in the second half.

Greater Asia-Africa -- business results for this division were excellent, showing good momentum and volume growth in the first quarter, up 9.5% versus the year-ago quarter, including divestitures, as compared with a 7% growth in the first quarter.

Of particular note is the strength of greater Asia itself, up double digit in volume on the same basis and as elsewhere, fueled by good increases in advertising, both absolutely and as a percent of sales.

As noted in the press release, sales in Greater China increased 4%, and operating profit increased substantially faster.

We've sustained our market leadership position in both toothpaste and toothbrushes with particularly good results in the toothbrush category and a broadening of the market share gap between us and our nearest competitor to toothpaste.

As we continue to expand our distributions throughout that vast country, we expect to capitalize on the fast-growing secondary cities through the balance of this year.

Across greater Asia, our toothpaste market share grew 120 basis points to almost 39% with record toothpaste shares being posted in Russia and Turkey.

In Russia, our share is up more than 7 full points year-over-year as we consolidate our recently achieved leadership position.

In toothbrushes, the launch of our very successful 360 Degree toothbrush has contributed to an increase across the region of 190 basis points for the Colgate equity.

Every country reported share gains for the Colgate equity in the period.

In the Personal Care category, our new product program has helped increase volume as well.

In the Philippines and Vietnam, the relaunch of our Palmolive Naturals shampoo line has delivered strong end-market results.

In Russia, we've launched Palmolive Aromatherapy Propolis shower gel, building on our learnings from our successful Propolis toothpaste and the importance the Russian consumer attaches to this ingredient.

In Thailand, we have begun our deep dive with Colgate business planning, our new initiative to increase the efficiency and return on consumer and trade spending.

Here, we are able to focus more closely on the indirect trade, which accounts for a much bigger piece of our business than some of our other product countries.

We're working with wholesalers and distributors to understand how we can increase throughput and expand even further our distribution.

Looking ahead, volume in Asia should grow mid to high single digits in the second half with operating profit growing double digits.

Hill's -- those new products and strengths in the base business contributed to an excellent second quarter for Hill's.

In the U.S., new testimonial advertising for the Science Diet line is now on air.

In addition, we continue to support the business by increasing in-store demonstration programs, as well as veterinary sampling programs and sponsorship of veterinary conferences and symposiums.

Consumption in the superstore channels is growing considerably faster than the market as a whole and in addition, the percentage of pet food shoppers buying in the specialty channel has reached an all-time high, which bodes well for continued strength in our business.

Business in the U.S. veterinary channel is also doing well with continued success behind our fourth-quarter launch of d/d diets.

Our results in the second quarter behind this new line of diets which helps dermatological problems exceeded our estimates by over 40%.

Our international business continued strong as well with particularly good growth in some of our newer markets such as Russia.

While we're still in the early stages of building our distribution in that vast country, we are already the number one recommended pet food by Russian vets.

So looking ahead, volume growth at Hill's should be at second-quarter levels for the third and fourth quarter.

Operating profit is expected to grow double digits.

I'd like to now turn the call over to Ian Cook, our President and Chief Operating Officer, to sum up briefly and talk about our prospects going forward.

Ian?

Thanks, Bina.

We're all very pleased with the excellent results this quarter and expect continued momentum during the second half of the year and into next year.

As I have visited many international Colgate subsidiaries this year, I have seen firsthand the business results which our focused strategy is delivering.

This gives me further encouragement for our continued success.

Of particular note is the sustained, healthy expansion in gross profit despite continued raw material cost pressures.

The restructuring program, our traditional funding of growth initiatives, specific pricing action and product mix, have all contributed to the increases in the gross profit.

The higher gross profit has funded increased advertising support behind new products and marketing programs, which have driven continued, broad-based organic volume growth.

Importantly, we are increasing not only the amount but also the efficiency and effectiveness of our advertising and of all of our marketing activities.

We are encouraged that our worldwide effort to even further increase spending efficiency with Colgate Business Planning is making good progress.

Because of all the interest expressed in Colgate Business Planning, or CBP, let me give you a brief update on this important initiative.

Remember, the objectives of the program are to set goals and plans for both our brands and accounts, to measure performance against those goals and plans, and to drive efficient commercial investment and therefore market share and margin growth.

Every subsidiary has appointed a Colgate Business Planning leader. 60 countries have started using our CBP ROI toolkit, and so far, over 1,000 managers in many different functions have gone through our workshop and online training.

What we call deep dives, intensive analytical reviews of promotional activity in selected customers, is nearing completion in the U.S., Mexico, Spain and Thailand.

These will help verify the magnitude of savings and the incremental growth opportunities we can expect from CBP.

Transition to the full CBP process supported by SAP software, which fits into our existing global SAP system, is well underway with Mexico and Canada starting their go-live program in August.

Six more countries, including the U.S., will start go-live programs in October of this year, and we expect to cover 80% of our worldwide business within the next -- (technical difficulty) -- our results to date and the strategic initiatives in place, we are confident of delivering good volume growth for the balance of the year with a simultaneous gross profit increase and with advertising up in absolute dollars and as a percentage of sales.

As Reuben noted, this should lead to double-digit EPS increase both this year and next.

We look forward to sharing our progress as we go through the remainder of the year.

This concludes our prepared remarks, so let me turn the call back to Erica and we can proceed to the Q&A section.

Thank you.

The question-and-answer session will be conducted electronically. (OPERATOR INSTRUCTIONS).

Wendy Nicholson, Citigroup Investment Research.

One moment.

My first question has to do with China and the topline growing only 4%.

I had expected the quarter to be much stronger because I thought it was an easy comp to last year with the [Treikle San] issues.

So can you explain kind of what was happening there?

Is it just that the category is not growing?

I heard you say your shares sound good, but 4% just came in a lot lower than I had thought.

Yes.

Actually, I thought, Wendy, that you would be pleased, considering there was considerable concern that our business in the previous quarter was flat to down.

It was up.

What's happening in China is, as I think the notation in the press release or the write-up that Bina just went through, is that the gap between us and our nearest competitor has widened.

There is plenty of price competition and some of the local brands are fighting back.

Our business is healthy.

I think the projection for the next few quarters are up more than that, and we did a review of while back, both here and in China, and it's looking quite good.

As you saw, Asia is up very significantly and is expected to continue to be up significantly for the rest of the year, going into next year.

So, to just clarify, can you -- I mean it sounds like -- is there a price war going on?

I mean, how bad is the pricing?

Can you give us a sense of what the category grew in the quarter?

I don't know the category growth.

The category growth was about in dollars about what we grew, in mid single digits.

I mean, it's a very competitive situation, has been and will continue to be.

Our EBIT is up in China and will be up again in the next quarters and budgeted for next year.

Okay.

My second question just has to do with pricing generally.

I think we're getting into the part of the year here where we are anniversarying some of the big price increases you took last year.

With raw materials where they are, can you talk about the pricing outlook for the overall company in the back half?

Yes, hang on one sec.

The price per percentage of course as you know, Wendy, has been going up.

I'm looking for my worldwide pricing folder.

I'm not finding it so I would do it from memory.

Okay, so that you recall that, last year, that on total Company, it was negative in the first two quarters, started going positive in the third and was positive in the fourth.

It was positive 170 basis points in the first quarter and again positive in the second quarter.

We expect it to be positive for the third and fourth quarters as well, for a year -- nicely above 100 basis points.

Okay but still -- I mean it sounds like it's going to be up less in the back half -- because my real question is do you have incremental price increases that you plan to take from here on out?

Answer, yes -- again, we're talking about 200 countries.

The price trend is good, and that will be assisted by increasing reductions in gross to net on a worldwide basis.

You may have seen that our gross-to-net went down.

It's led by the United States and Latin America, which are the two areas that are most advanced on what Ian was telling you telling about, the Colgate Business Planning, the promotional efficiency aspect.

So that -- it will be helped by actual price increases and a reduction in gross-to-net.

Fair enough.

Thanks very much.

I appreciate it.

It felt to us like a pretty good quarter.

Do you have anything encouraging to say?

You know, you came in exactly where I thought you would on the EPS line, so I think that's pretty darn good.

I think that's all I want to say!

Okay, good.

Amy Chasen, Goldman Sachs.

The volume trends were actually much better than I had expected.

Can you tell us how they were relative to your own internal expectations, and how much of that upside -- if there was some relative to your expectations -- was due to the more efficient promotional programs that you've talk about?

Amy, yes, volume was very good, somewhat better in certain areas than we had expected.

We had an aggressive budget but nonetheless, we exceeded that from a volume and sales point of view.

I think it's a little early to see much volume coming from this promotional efficiency plan.

We saw some gross to net go down which was good, which pushed the gross to net worldwide down, which was also good, but I think it's a function of the strategy that Javier and Ian developed a couple of years ago and promulgated to the organization, which is basically spending increased money on classic marketing activities, increasing sampling levels around the world, increasing professional relations programs, and improving the quality of in-store work, market research and the actual commercial advertising that we do.

It's a classic back-to-basics kind of a strategy and it appears to be working quite well.

Okay, great.

Can you quantify for us, within the gross margin increase, how much was from all the things that you usually quantify, including this promotional program?

Yes, the promotional program is a little tough, and let me give you the normal quantification, Amy, that I would give you, and then let me talk about the promotional aspect.

So that if you look at the second quarter, and this is a comparison versus the previous year's second quarter, the gross profit is, on pricing, 0.7; restructuring -- I might add that in the first quarter, it was up 0.7 as well; restructuring, 0.4, which is somewhat above what it was in the first quarter; our classic funding the growth savings, 1.3, which is again better; material pricing, -1.4, and that altogether adds to the 100 basis points improvement.

Okay.

One last question -- just, well, first of all, within that, you didn't talk about the promotional programs.

Is that because it was 0 or just because it is too hard for you to break that out?

No, it's just because I was pausing and ready to go on.

Sorry!

Actually, it's going to be difficult to measure precisely that number because it gets mixed up.

Some of it ends up driving a volume up; some of it ends up driving price up.

So that it's going to be a little complex.

The only thing I can say is we are at the very early stages of that.

As you know, Ian and Javier are very excited about that, as are our people around the world.

I am, too.

To give you an idea that the first time in a considerable period of time, the gross/net percentage went down worldwide.

That was a result of, as I said earlier, of Latin America and the U.S. gross-to-net percentage going down and many of the countries that are involved.

I think you'll see that becoming more pronounced as we go forward in both of those divisions and in the rest of the world.

If you simply take -- and this was an attempt to quantify it even though it's -- if you take the reduction in worldwide gross-to-net and basically multiply it time sales and it's under a percentage point is the X number of basis points, you come up with an amount which is equivalent to about $0.01 a share or so, that probably that contributed overall.

I've got to say that that will continue to grow and as we've said before, we would think that the ultimate savings are in the range of the restructuring, which is, as you know, several hundred million dollars.

Ian made the point earlier which I think is very important and Javier keeps stressing this when he is pursuing his program around the world, which is that this is not just a savings program; it is genuinely to get more efficient savings so the same amount of money or less money will drive volume even more.

I think you're seeing that in Latin America; you are seeing it early stages in the U.S.

So, when we say that the business is robust and the fundamentals are as good or better than they've ever been in my knowledge, a part of it is this program and to a certain extent, I think you ain't seen nothing yet.

Wonderful.

Thank you.

Bill Chappell, SunTrust.

On the Tom's of Maine acquisition, how much does that add in terms of U.S. market share on the oral category?

About 1.5 share points.

In the quarter, we only had a partial quarter; it was under $10 million in sales.

So the share was still up year-over-year, even excluding that?

Yes, that's right.

Actually, their share was constant year-to-year, and when you take the (indiscernible) our share was up and we get weekly shares, which we're not actually allowed to put out, but we just got a fantastic weekly share.

We are working on daily shares.

With that in mind, is there a timeline for expanding the distribution be it within the U.S. or outside the U.S.?

There is a strategy group that's participating up there right now, and that is in the process of being developed.

Then also just looking at kind of the acquisition out there, obviously you took a pass on the Pfizer business.

Did that preclude you from repurchasing shares?

If not, are you looking to take the cash and put more share repurchases or other acquisitions or kind of what's your thought going forward?

We are at $16.6 billion.

We could have bought about 40% of our capitalization, but interestingly, yes, two things are going on.

We did lay out about $100 million for the Tom's of Maine, number one.

Number two, we are keeping our powder dry and being conservative on the one chance you know who knows how many that we would have gone ahead with the Listerine portion of that business.

So as a result, our share repurchase in the quarter was lower than it has been, and actually, we are going to, as soon as the quite period ends, we are going to about double our purchase (indiscernible) back to -- certainly above the rate that we're going at, at about $1 billion a year rate. (multiple speakers).

Great.

Also, just as an aside, I think Bina mentioned this -- is that there's an interesting calculation that, for the first time in a long time, in the quarter, the shares went up rather than down from the previous quarter because, number one, we didn't buy back as much as we normally do but well beyond that, because of the fact that the stock has done pretty well, the diluted calculation, which of course figures out the number of shares and the money and all of this very complex thing, but as a result, the diluted shares outstanding went up.

Great.

Then just one last question -- any -- and you might have commented on this, you know, thoughts on [Crisco] Health and their expansion plans over the next six months, how that will affect your oral care share?

Well, I guess I'm going to react the only way that I can react.

We have -- you know, our strategy is narrow, that we are in only a few categories, and our job is to improve our world and country market leadership.

We've -- are constantly -- there are constant attacks by various competitors around the world to try to change that balance, and we historically, I think without exception, have met that challenge.

I can't remember a situation -- and I'm looking around the room for the people who would know better than I -- where we have -- our market leadership has been damaged or lost appreciably in recent years.

I would think that the U.S. is no different.

You know, Bill, we will talk as we go along.

I would say six months from now and a year from now, we will see that we remain the strong market leader in this country.

Great.

Well, nice quarter.

Bill Pecoriello, Morgan Stanley.

Good morning, everyone.

First question -- just on advertising spend, in the past quarters, you've given us the absolute amount of the percentage it's gone up.

Advertising -- (technical difficulty) -- 9% as I recall, and will go up for the year probably that much or more.

Okay, great.

Then just --.

(multiple speakers) between 9 and 10 somebody was saying.

Could you also give us some more color on Russia?

You had given some details on China.

Was it up double digit?

How did it compare to the first-quarter growth?

It was up double digit, very strong.

The first-quarter growth was excellent, in the '20s.

Second-quarter growth is excellent in the '30s.

I don't think that progression will continue, but it's expected up very well for the year, strong third and fourth quarter is anticipated.

And the EBIT grew very substantially during the quarter in Russia and is expected up very materially for the -- business is good in Russia and continues.

So as you know that Russia was transferred when we realigned the divisions a while back -- within the last few months -- it ended up in greater Asia.

I can never remember the name.

It ended up in greater Asia, so that it had been in Europe, and basically what that means is that the growth in Europe, had it been historically comparable, although we have adjusted for the previous years, would have been a point or to higher, because of Russia.

But from a marketing and administrative point of view, it's right where it should be.

Great.

Then, just following up on the components of the gross margin change as we look out the balance of the year, the charge in the quarter, the 116 million was a little bit greater than we've seen the last couple of quarters, greater than we were expected, so should we see that savings contribution accelerate in the back half from the 40 BIPs?

Bill, the reason for the greater amount was that you remember that we told you we had a number of many, many smaller personnel programs and for a number of pretty valid reasons, they didn't go ahead when they were planned but instead we put in a -- and it was fully announced and everything else during the first quarter or earlier -- a voluntary retirement program for a big quantity of domestic employees.

So, the charge came all at once rather than spread out over a period of time.

It is -- basically the deadline has now past.

It has come out very well, as I think Bina may have mentioned, and actually a bit better than we had expected.

Those savings will start coming in in the fourth quarter and next year, which means that our savings for those periods should be a bit more than we had originally thought.

Great.

Just one last one -- on the U.S. pipeline, should we expect some more news balance of the year relative to what you've mentioned in the release?

You have some new products that you announced in Europe, like this MicroSonic toothbrush and the Colgate Time Control.

Should we expect those in the U.S. eventually?

Well, not necessarily those specifically, but there is an aggressive new products program in the second half.

Okay, great.

Thank you.

Chris Ferrara, Merrill Lynch.

I just want to ask about funding the growth.

It seemed like after it might have slowed a little bit last quarter, you came back pretty strongly.

I'm trying to get a sense for what that outlook might be going forward as it's a pretty big component of your gross margin savings.

I mean, do you see it continuing at this kind of rate?

Well, again, the breakdown is -- the precise breakdown is difficult to project, but from a projection of gross margin -- hang on one second.

We do expect the second half to be continuing at (indiscernible) the same rate as the first half, maybe a bit better but who knows?

Can I just -- sorry, go ahead.

The components won't be very different, except that, as I said earlier, that it's probable that the amount that comes from gross-to-net reduction may accelerate and certainly will accelerate into next year.

Got it.

Then I guess along those lines, I mean if you look at Latin American pricing obviously continued to be extremely strong.

Can you talk a little bit about what the breakdown might be on that pricing line, between list and improved gross-to-net, and then also a little color as to how long you are going to sustain that kind of level of improvement?

Okay, well, the price increase, I guess that's part of the stuff we should announce, right?

It was 5%.

We expected up in the third quarter and the fourth quarter, even though that laps strong quarters last year.

It's being driven as pricing is positive in all major countries.

Don't forget, as you know, Chris, that, for many years, we've had a division policy is to increase prices in line with local inflation wherever possible, and the economies are doing well down there.

There's also, again, an early focus on the gross-to-net reduction, and a lot of proactive SKU-by-SKU analysis to identify specific opportunities.

So, we are hitting on if not all certainly most cylinders in Latin America.

The expectation is that we will have positive price for the next two quarters.

I would guess that we will be budgeting positive price for next year as well.

Thanks.

Then just one other one -- in the more troublesome markets in Western Europe, you know, France, Germany and Italy, can you talk about where your marketshare is staking out right now?

How is it year-over-year?

Obviously, the economies are a little bit tough but how are you doing relative to your competition there?

Basically, we've got some real success in increasing marketshare in liquid cleaners, which are basically the only remnant of the homecare business that we have and where we are one of the leaders in Europe.

The oral care shares are essentially flat to slightly up.

Gaba is increasing their shares and we have increased in a couple of countries.

The UK is up and a couple of others.

Something that's positive about Europe is that the negative price in Europe, which you've seen from us and everybody for a number of quarters, is less than it has been.

That is to say, last year was negative, price was negative 2%, a little over 2%.

It was negative 2% in the first quarter, and this quarter, it was negative less than 1%.

So again, the trend is good.

Also, from a volume point of view, I think we will be disappointed if we don't -- because a lot of new product reasons and other reasons -- if we don't see some better volumes, although there was nothing wrong with this volume in the second half, in Europe specifically.

Right, got it.

Is the improvement in pricing at all related to the fact that your share, although you didn't gain share -- I mean, obviously you cited a bunch of markets in Europe where you gain share and those three, France, Germany, Italy, were not cited.

I mean, does that have something to do with easing off on pricing and maybe more so than your peers were?

I don't think so, Chris.

Normally, we just -- if a share is flat or slightly up, we don't, I don't think Bina mentions it.

I think it's just the ones that are -- there's a meaningful movement.

Thanks a lot.

Alice Longley, Buckingham Research.

My first question is to ask about more specifics for North America going into the second half of the year.

Can you tell us what pricing might look like?

It has been flat recently.

Will it be up or down in the second half?

Also, you said operating profits would be up in the third and fourth quarters.

Will they be up more or less than sales?

Yes.

No, I mean I assume that was a series of questions.

The SBIs were basically flat so far, and we shall see what happens but they are expected to be essentially flat for the rest of the year.

On the other hand, while they are as flat, we again are getting the benefit of the gross to net reduction, which means that, on a percentage basis, the amount given [trade] is somewhat lower.

That was true in the second quarter and I think will be true going out, but we shall see.

At the same time, in response to an earlier question about one of the competitor's launch, obviously, by definition, there is an aggressive plan that we have already planned on and budgeted and is included in the estimates, so that will reflect whatever happens on pricing that certainly we will participate.

That being said, and that's been built into the estimate, the EBIT chart in the U.S. -- hang on one sec -- is we were up in the second quarter, as you see.

We were up.

We expect to be up in the third quarter and expect to be up in the fourth quarter and up for the year, but as you would expect, what we're doing is we are making sure that the U.S. has sufficient money to meet any competitive challenges, and that's being funded elsewhere.

So that was really what I was trying to get at.

So even net of maybe more couponing, your pricing you think is going to be flattish and your EBIT is going to be up at maybe minimally in the second half.

Is that fair?

It will be up modestly by design.

We planned it that way and all of our estimates and our comfort with the external estimates are built around a very stout and robust plan in the second half.

Obviously, we should get some real volume benefits out of that as well, but the answer, yes.

As you would expect, we tend to plan ahead and so there is a plan, an aggressive plan, in the U.S. company, which has been funded within the estimate.

Okay.

My other question is on the gross margin breakout.

Don't the comparisons get easier in the second half for raw material costs, so that maybe negative, like the -1.4 in the second quarter for materials might be reduced in the second half?

It might be, except that in the first half, oil wasn't $78, but let me give you that.

Hang on a sec.

I'm reading it upside down but now I'm reading it right side up.

Okay, so let me go through the raw materials for a moment.

We had budgeted, in the Colgate part of the business, a 1.7% cost increase on [raw] packing materials, and for the whole company, it was a weighted average of about the same.

The latest estimate is that we are up a tenth -- that is 1.8 to 1.9% for (indiscernible) for the year, and similarly for the overall company.

So, that, versus our budget, we are up somewhat, so one would expect that that will have the same sort of objective in terms of finding mechanisms or using the funds generated by the business to offset the cost.

That's all been factored in, and our expectation is, with the higher level of cost -- because (indiscernible) has gone up, some of our other cost of going down, and our overhead has gone down -- we do expect to get the positive gross profit in both the third and fourth quarter and to be budgeting it up next year.

Is it fair to have gross margins up about 100 basis points in the second half, or do you think you can do more than that?

Well, we've set a goal, as you remember, Alice, between 75 and 125.

We have been in there.

That was an increase from our historic 50 to 100, and I think we will continue to be in there, hopefully at the upper end.

Bill Schmitz, Deutsche Bank.

Is there any way you could break out volume and mix from the numbers?

Because it looks like you've done an amazing job trading folks off to things like 360 Degree and Luminous and Total.

It's very tough to do, and all of the financial wizards around the table are shaking their heads negatively.

But the mix is good; it's good for the fact that we don't have a bunch of the detergents that we used to have.

At the same time, it depends very much on how the mix comes in also by division and by country, and so -- but the answer is yes.

There is a part of the strategy that I said that Javier and Ian put together.

It is very clearly to increase our efforts to trade up, and that is indeed happening.

Great, thanks.

Then just on the acquisition front, I think you prudently didn't get the Pfizer business.

Obviously, that was a big multiple.

But is there other stuff on the docket now?

Should we expect further acquisitions in the future?

There is nothing currently being looked at.

As you know, there's not many things out there.

All of our growth historically, or most of it, has come organically and will continue to.

The volume projections that Ian and Bina gave you assume no acquisitions.

Okay, great.

Then lastly, maybe I'm splitting hairs here, but the detergent divestiture -- is that benefiting the funding of the growth piece, the 130 basis points you talked about?

No.

It's not in there.

Okay, where is it?

When you kind of do that gross margin bridge?

That would be in the mix.

That would not be in the actual funding the growth savings.

Funding the growth savings are a list of dozens if not hundreds -- hundreds of specific projects around the world in each subsidiary and in corporate that are measured and clocked and measured against a projected rate of return.

So that's not an amorphous thing; it's a very project-oriented, highly detailed, highly followed mechanism.

Okay.

What would that detergent piece be in terms of gross margin expansion -- the divestiture?

In low to mid single digits, i.e. somewhere between 0 and 50 basis points.

Linda Bolton Weiser, Oppenheimer.

Thank you.

Can I just ask you about capital spending?

I think I had projected it to be up in dollars for the year, and yet it was down for the quarter and first half.

Can you just talk about that?

Is there any additional spending related to the restructuring?

Well, it is going to be up for the year.

Last year, our regular program was $335 million, and 390 -- I'm rounding -- with restructuring.

This year, we had told you that the regular program was going up from 335 to 360, and the total program, including restructuring, is up to between 530 and 540.

So on both bases, they are indeed up, Linda.

So why was it down in the first half?

Timing.

Timing?

Timing.

These are projects that (indiscernible) in and the whole formality and everything else.

What was it on percent?

It really is -- I am looking at the budget here and what the update is, which was updated in our mid-year estimates.

Those numbers are the numbers that we expect.

So, in both cases, they will be up.

Okay.

I just wanted to ask about the inventory.

I mean, it looked pretty good but it was up 8% year-over-year on a 6% build increase.

Is there anything going on there with inventory?

Well, inventory on a worldwide basis -- again, I'm looking -- may be looking at different numbers, just because I don't look at it on a percentage increase basis.

We look at it on a days -- I guess that would -- so you would subtract your 6% from your 8%, and get a 2% -- yes, because on a days outstanding basis, it was -- in the similar quarter last year, it was 66 (indiscernible) 66 or 67 days, and now it's about 67, 69 days.

So there's about a two or three-day difference.

The answer is yes, that is (indiscernible).

I don't think any thing is going on there.

The specific explanation for it is that we are, as part of the restructuring, closing factories and relocating factories in many parts of the world, and a bit of inventory has been built to ensure that.

For example, we're moving, as you know, to a new site, to a base site in the United States and moving some of that production out of the country.

And that's the primary reason.

The secondary reason is -- and we've tracked it down pretty carefully -- it's promotional timing and new products timing and so on.

As you heard, there was some more aggressive product plans in the second half in Europe, and that's where some of it (inaudible).

I guess, Linda, my conclusion is we -- as you can imagine, we are very sensitive to the balance sheet and very -- always making sure that the ratios are where they should be.

That is not a concerning thing to us.

Okay.

And just --.

Let me -- (multiple speakers) -- and as you know, on a percentage of sales basis, the working capital, of which of course inventories are a major component, went down as a percentage of sales worldwide from over 4.2 or 4.3, as I recall, to 3.9.

Okay.

Is there any effect from Wal-Mart or any other retailers just reducing and pushing back a little bit on your inventory?

Is there any of that going on?

Pushing back?

You don't really push back too hard on Wal-Mart.

But if you will be interested to know that I have an analysis here which shows the top ten U.S. accounts, and the top three accounts were all up over -- which includes Wal-Mart, Target and Sam's, were all up at least double digit and the top ten were up 16%.

So, the business in those accounts in the United States, the top ten accounts, is terrific.

Great, very good.

Can I just ask one last thing?

In Asia-Africa, I think you had said that almost all of the countries were up in toothpaste marketshare except for five countries.

Just which ones were those that were not up?

For five countries -- I didn't say that.

In the press release, it said 9 to 14.

Pardon me? 9 of 14.

Can we get back on -- with you, Linda?

I'm not sure if it's there.

It might be Fiji; it might be New Zealand, I don't know.

China is not -- is also not up, right?

China is down.

Okay.

As we said earlier, Linda.

Okay, very good.

Thank you.

Joe Altobello, CIBC World Markets.

Thanks, good morning.

What does your name mean again?

(LAUGHTER) Tall and beautiful, from what I understand.

Anyway, in terms of restructuring, I just want to go back to that for one second.

Obviously, you guys alluded to this a little bit earlier, but it seems like that's running pretty well ahead of where you had originally anticipated it would, given that your guidance was a high end of your gross margin expansion range, despite the fact that oil is I guess it $10 above where you had budgeted, and I think, for about every $2 in oil, it's about $0.01 off your EPS.

So I was curious if there's anything beyond the gross-to-net savings that is really basically trending above where you had planned coming into '06.

It's interesting.

Let me refine what you said.

What you are saying is true, but -- and it's the entire savings package that goes into gross-to-net, that goes into gross profit, that is higher than anticipated.

But as we discussed a couple of times in previous conference calls, the restructuring program was slightly behind -- now it is catching up rapidly -- because of those human programs that we were unable to do as planned and did it on a voluntary basis instead.

So -- but those -- any shortfall there, which is timing shortfall because it just simply comes in a somewhat-later quarter, has been more than made up by the funding the growth and the other savings programs.

I'm looking for the (indiscernible).

I think that's quite accurate.

So that we are very pleased that there's enough flexibility within the organization to -- because of a very real administrative concern, we couldn't move as we wanted to.

We now have moved on the human front, and we have been able to offset that and keep gross profit going anyway.

So that the good part about that is is that, even though there was a modest shortfall to date, as that shortfall is filled in and actually we have some additional savings, that will help us going forward.

So, we are quite pleased with (inaudible).

So yes, you're right from an overall point of view, but the pieces of it are slightly different.

Okay, so to date, is the plan better or worse than you expected?

Because it sounded like you were a little bit inconsistent there, that's all.

Okay, the plan to date has somewhat more spending because we spent it all -- some of the people think in a lump, and the savings are a little behind to begin catching up fourth quarter and next year.

Got you; okay.

Then second --

Mark means short and bald, right?

(LAUGHTER)

Everybody is frowning at me because it's such an old -- okay, go on.

Secondly, in terms of '07 guidance, obviously this is the time of year last year when you talked about '06.

I was curious what the broad outlines are in terms of your expectations for volumes and pricing next year.

Where does visibility stand today on next year versus where it did a year ago, for example?

Well, we did say in the press release, which is scrutinized pretty carefully as you can imagine by legal and SEC experts and everything else, and we did say that we expect a double-digit EPS after all the restructuring and all the stuff that (inaudible) -- for next year.

We really do think that.

We have reason to think that the volume momentum that we have been seeing will continue.

Certainly, we will be -- while the budgets of course have not been made yet, will be spending at substantial levels one would expect to see and this is barring anything -- any major thing unforeseen -- a growth in gross profit in our target range, an increase in EPS in the double-digit range, as we've said, and EBIT up at least in the high-single, double-digit range, probably double-digit.

We haven't made up the budgets yet, but I have got to say that, as I've said before, Joe, that in the many years that I've been doing this, the business is as robust or in my opinion better and more robust than it has ever been.

I think that's a great credit to the strategy that Javier and Ian put together and have basically been in the process of implementing.

We are getting, I think, at all the things we're doing, better and better.

One of the values of Colgate -- it sounds what motherhood, but it's continuous improvement and I think we're going to continue to improve even further.

Sorry for the speech, but I really believe that.

Constance Maneaty, Prudential.

Good morning.

Could you talk a little bit on the buyback?

Did you say you would get back to $1 billion for the full year, or $1 billion annual rate? (multiple speakers).

A rate of.

A rate of.

When you -- I just didn't catch what you said about what the -- how much you bought in the second quarter.

Yes, I have that.

We bought in the second quarter -- no, that's -- we bought in the second quarter 2 million shares, average price of $59.74.

In the first quarter, we bought 3.7 million shares, average price of $55.31.

Okay.

You also mentioned, in the earlier remarks, something about a program in Central America that's being expanded into the (indiscernible) and Andean regions.

What program is that?

(inaudible).

It's the regionalization program that we first did in Central America, where we took six countries and essentially operated them as one unit.

So we centralized support functions and strengthened our on-the-ground capability of selling and distribution and merchandising.

We are applying the same to the Southern cone part of Latin America and also the (indiscernible) part of Latin America.

So it's the same structure now taken into South America.

Is this part of the restructuring program?

Yes, it is.

Okay.

How far along are you in this, and what might the impact of it be?

Again, it's included in those big numbers of long-term savings.

Javier reported to me a couple of weeks ago that it looks like we have some additional opportunities within the same expenditure to get more savings, which is why the reference (indiscernible) is right up about some possibility of increasing those savings, that 2008 plus savings, and that is indeed happening.

I don't think we would break it out specifically, and also obviously that is not yet in the process of being implemented but will be in the next six to nine months.

Okay, thank you very much.

John Faucher, JPMorgan.

Yes, good morning, everybody, or good afternoon now.

A quick philosophical question on the marketing side -- we continue to see the advertising grow faster than sales.

I was wondering.

Can you give us an idea?

You seem to have caught up.

Is most of this advertising growing faster than sales?

Do you think that is sort of normalizing, getting back to where you need to be?

How much of it is taking sort of opportunistic advertising, and how much of it would you say is related to competitive pressure, if that question makes sense?

It makes sense.

Let me -- my sense is that we're going to see that be 2 or 3 or 400 basis points of spending above sales levels will decline.

I think that will start right in the second half and probably next year.

Given the fact that our business is so robust, we will be able to afford very substantial advertising without (indiscernible) necessarily being driven further.

So yes, it was a -- there should be a normalizing process going on.

Also, John, I think that a lot of elements of what's being done now around the world (indiscernible) this part of the strategy that I mentioned several times is how we get more efficiency out of each dollar of market research -- I mean classic stuff but some very interesting kinds of things.

So I think you will see that without raising (indiscernible) quite as strongly, we will see good volume.

Does that --?

Okay, thank you.

What does your last name mean again?

We're going through that?

It means to not have any money. (LAUGHTER).

Lauren Lieberman, Lehman Brothers.

This is actually [Ryan Bennett] sitting in for Lauren today.

Hello, everyone.

Just a quick question or two -- when we take a look at Hill's margins, it's kind of contracted a little bit this quarter versus last year.

I was just wondering if that was a rise in the commodity costs for that particular division.

No.

Actually, there is an increase in commodity costs (indiscernible) overall costs, (indiscernible) materials for Hill's of about 1.7, 1.8, which is about the same as we had for the rest of the Company, but there are two things.

First of all, you do know that margin and operating profit in Hill's are well above the normal Company.

That is to say it's in the high 60s as compared to the mid 50s.

So that -- I don't know if we give that out, but it's a very, very good number.

What specifically is going on is there has been a packaging change basically from paper to plastic, which at least short-term cost a tad more and they are getting it back in volume but they will probably drive the costs down.

Secondly, that the Japanese -- pardon me -- and Japanese packaging became more expensive because we changed that as well.

So it's really not a meaningful thing.

The gross profit in last year was 60 -- well, it's (inaudible).

Anyway, the gross profit for the year this year is expected to be up at least 40 or 50 basis points versus last year.

Okay.

You mentioned that oral care sales were up 12%.

Could you tell us if volumes were up?

Volumes were up 8.5, I believe, right. (multiple speakers) -- pardon me?

Nine.

Somebody is holding up nine fingers, and that means nine.

So actually --

9.5.

Yes, I will give you, if you want it, that oral care all together.

This is volume growth -- 9.5% for the second quarter, of which that's -- toothbrushes were up slightly more; toothpaste was up about that, slightly less; and other oral was up, which is floss and rinse, was up more than down.

So very good.

Then, the year-to-date is about the same.

All right.

Then, in terms of the A&P spend, I know that has been discussed quite a bit already but just understand there was a little bit of a deceleration in terms of a percentage to sales as opposed to the first quarter.

We were thinking maybe it would be back-end loaded this year in the face of new product launches and in Crest ProHealth.

But just understand, should we be expecting further deceleration, or --?

Well, as I said, I think that you'll see a growth in advertising in the second half, but going back to I guess it was John's question I guess, that the [8S] growth will not be as much. [8S] may grow slightly but it will be more or less on with sales growth.

Okay.

That's it for me.

Thank you, everyone.

Alec Patterson, RCM.

Good morning.

Just a couple of quick nonoperating items and then another one -- the interest rate expense line seemed to tick up a bit, and it looks like you turned over a fair amount of debt.

Have we locked in some higher rates here?

We are holding our floating and fixed rates at -- within our policy guidelines, so most of the increase is just really due to rates going up significantly during the quarter around the world.

Which is last year's summer.

Last year.

About 95 basis points.

Yes, and the interest costs were about $11 million I recall, higher than last year, essentially all of which was rate change rather than -- (multiple speakers).

That was down.

(multiple speakers) -- actually was down slightly.

Okay.

Then, you had a slew of options exercised in the quarter, and it seemed to be well above the trendline.

Is there some sort of event that caused that?

Then looking into the rest of the year, should we expect that to then create sort of an empty bucket effect where we shouldn't see nearly as much?

Well, I think the only event was that the stock is over $60.

People have historically, over time, exercised and held stock, owning stock and are doing it now.

That also provides us with a couple of hundred million dollars of extra cash on the year.

My guess is that it depends obviously what happens (inaudible) stock price, which we don't determine but you guys do -- that I would be surprised to see a -- I would expect to see continual option exercises.

But in other words, Reuben, there wasn't sort of like a window of opportunity which created this stock-price opportunity to exercise -- (multiple speakers)?

No, I mean, there's nothing different than --

-- the rest of the year?

The rest of the year.

There's a window period after each for 15 (indiscernible) people; there's a window period after each earnings report, but most of the options exercises were during the quarter, not by 15 (inaudible) people.

Okay.

Then just lastly, with oil, as you pointed out, in the mid 70s, potentially sustaining there, what are you guys doing in the area of raw material substitution on oil?

I mean, there's been talk about maybe vegetable oils or some other sources for plastics and glycerin compounds and things like that maybe sourced from non-petrochemical-based areas.

I was wondering if there was anything going on there.

Basically, we have an ongoing program of raw material substitution in some of our products, primarily agricultural-based between various kinds of natural oils.

As you know, our oils component is not terribly high and therefore -- and we are also covered through the end of the third quarter.

Our expectation is that if prices remain where they are, i.e. in the mid to high 70s, is that there will have to be another round next year of price increases in various locations, but I think that's to be expected.

So in other words, the oil prices are at a level which would have an impact on your pricing policy, but it's not at a level which will open up the door to substitutions for oil?

Well, the impact of -- on our situation is more in transportation costs.

I mean, it's an interesting and little-paid-attention-to kind of thing.

It's our freight costs are more dependent upon oil than any other single element of our costs and that that is not (indiscernible) within our control, but yes, there are switchings to rail transport and ship transport and so on, so there's substitution in that sense.

So it's more of an impact on freight and distribution than it is on packaging is what you are saying?

Yes.

Okay, and that flows to the shipping and handling line?

Yes.

It ends up affecting obviously gross profit.

Okay.

People are shaking their heads -- SG&A, I'm sorry.

SG&A, yes.

Okay, great.

Thank you.

Jason Gere, A.G. Edwards.

Good morning, actually now good afternoon.

Just a quick question -- you talked about the products that you have and the geographic expansion, obviously the oral care you are in over 200 markets.

I mean, can you talk about, you know, what I guess you're most excited looking to or three years down the road, which of your product maybe has a lot more expansion opportunities?

Well, we have a list, as you know, Jason, of product categories in which we are quite strong or very strong, depending on the category, and that methodically we're going around the world with them.

For example, liquid soap, where we are the world market leader and leader in this country with 40-plus share with Softsoap, the leader in Europe and elsewhere -- we are progressively going around the world.

Latin America is enjoying a considerable success with that now, and Asia (inaudible) Asia.

Similarly, we have a number of other categories we are doing the same thing.

There's a major series of launches on different kinds of men's and ladies' Speed Stick, even though it's not a stick in some places, and there's a whole list of things.

That's basically how the business development people in the Company plan out the grids for each division and each subsidiary.

Okay.

I mean, because oral care is, you know, 40% of your sales and obviously you guys are the global leader in this category, so I guess I know you've been asked questions about acquisitions and looking -- I think the docket right now looks kind of empty, or I think that's how you said it.

But just looking at the portfolio, you've gone down in detergents.

I mean, would you use the next couple of years really to expand that portfolio into more of the higher-growth categories?

I guess I'm just trying to look at more geographic expansion along the same lines?

Well, again, the organic growth is pretty good.

I mean, we are getting dollar growth in the 8 to 9% range, which is what this quarter was in volume and the 6 to 7% range; that's pretty good.

And that I think the expectations without acquisitions are that we will be able to -- perhaps not at the precise level but have very, very robust topline growth and that when opportunities present themselves, either locally or more broadly, we always examine.

However, as you say, there's nothing on the burners right now, nor do we expect there to be, but at the same time, we do expect this very strong volume to continue.

For example, I gave, a few moments ago, the numbers showing -- saying that we grew around 12% in sales in oral care during the quarter; we also grew 8% if you take our home care business, which is brands like Softsoap and so on, including detergents; that grew about 8%, so that's not too shabby, either.

That's terrific.

Can we have, say, one more question, if that's okay?

If there's not too long a queue?

Our final question will come from [Ursula Morran], Bear Stearns Asset Management.

I will keep this very quick.

It's a follow-up on Hill's.

I thought that you said at the beginning that consumption in supermarkets was outpacing other channels.

I just wanted some detail on that if that in fact is true.

No, I think the comment was specialty channels rather than supermarkets.

Okay, sorry for the misunderstanding and thanks.

Okay, great.

All right, I guess that brings us to the close.

Thanks so much.

We are pleased with what's going on.

I hope you are and we look forward to continuing the good results into the next year or two.

Thanks so much.

That does conclude today's conference.

We thank you for your participation.

Have a great day.