Jon Moeller - CFO.

Wendy Nicholson - Citi Chris Ferrara - Wells Fargo John Faucher - JPMorgan Lauren Lieberman - Barclays Olivia Tong - Bank of America Merrill Lynch Dara Mohsenian - Morgan Stanley Bill Schmidt - Deutsche Bank Steve Powers - UBS Nik Modi - RBC Capital Markets Javier Escalante - Consumer Edge Research Michael Steib - Credit Suisse Connie Maneaty - BMO Capital Markets Joe Altobello - Raymond James Bill Chappell - SunTrust Ali Dibadj - Sanford C.

Bernstein Jon Andersen - William Blair.

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 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. Adjusted free cash flow represents operating cash flow, less capital expenditures and excluding tax payments for the pet care divestiture.

Adjusted free cash flow productivity is the ratio of adjusted free cash flow to net earnings adjusted for impairment charges. Any measure described as core refers to the equivalent GAAP measure adjusted for certain items. Currency neutral refers to the equivalent GAAP measure excluding the impact of foreign exchange rate changes.

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..

October and December was another challenging quarter from a macro standpoint with significant foreign exchange headwinds, modest market growth and continued political and economic volatility.

Against this backdrop, we were able to deliver organic top line growth and currency neutral core earnings growth that were in-line with our going in expectations. Organic sales grew 2% in 4 or 5 business segments, Baby, Feminine and Family Care, Grooming, Healthcare and Fabric and Home Care reported growth versus the prior year.

Top line growth trends improved as we move sequentially through the quarter finishing with mid-single digit organic sales growth in December. Organic volume was in-line with the prior year.

Organic volume was up one point in developed markets; developing market volume was down slightly as we took pricing to offset foreign exchange devaluation across several countries. Pricing and mix each added a point to sales growth.

Overall, we held or grew worldwide share on businesses representing about half of company sales and about 60% of sales in the home U.S. market. We continue to grow share in Latin America and held share in Europe and India, Middle East and Africa. We lost some share in Asia, principally in China and Japan.

As we reported at the analyst meeting in November, we're growing share on more of our category leading brands in countries where it matters most, Pampers, Tide, Gillette and Pantene in the United States for example. We have opportunities on other important businesses like Family Care in the U.S. and in countries like China.

On a constant currency basis, core [inaudible] share were up 6%, in-line with our expectations keeping us on track for double-digit constant currency core earnings per share growth for the fiscal year. Virtually every currency in the world devalued versus the dollar with the Russian ruble leading the way.

While we continue to make steady progress on strategic business and company brand and product initiatives and continue to increase and accelerate productivity savings, the progress has not been sufficient enough to offset FX.

All-in sales were down 4% versus the prior year including a 5 point headwind from foreign exchange and a 1 point reduction from minor brand divestitures. Including FX which was a 14 percentage-point drag on the quarter, core earnings per share were $1.06 down 8% versus the prior year.

Given the magnitude of the impact, I thought it might be helpful to briefly recount how FX impacts reported results. I'll use the example of the ruble which depreciated 53% versus the dollar during the quarter and was down 78% for the first half of the fiscal year.

The declining ruble impacts reported earnings in three ways for a total fiscal year hurt of about $550 million after-tax. Here are the building blocks and how they break down. First, transaction impacts increased the cost of non-ruble denominated inputs. We import as an example Gillette blades and razors into Russia from Germany.

Widening of the cross-rate between the euro and the ruble increases the Russian units cost of razors and reduces profit. Similarly, the local cost of plastic bottles which are denominated in euros and imported into Russia for the production of Fabric Care and Hair Care products have increased significantly.

This transaction cost impact affects all manufacturers, multi-national and local, whose materials or finished products are imported from similar sources and are similarly denominated.

We attempt to recover these cost increases through pricing when local legal requirements and market realities allow it though there is a lag between the time the currency devalues, the costs are incurred and the pricing is taken and executed through our channels of distribution.

Second, we need to revalue transaction related foreign currency working capital balances. This includes the revaluation of working capital balances related to transactions between P&G legal entities that operate in different currencies.

To continue the prior example while razors produced in Germany are being transported and are moving through the customs process into Russia, our Russian books hold a euro-denominated payable. At the end of every quarter, working capital balances are revalued at current spot rates.

Gains or losses from revaluing transactional working capital balances typically flow through SG&A and are included in core earnings per share. The only exception is the case of a fixed exchange rate currency that is also hyperinflationary.

In this case, we need to revalue not just the foreign currency transactional balances, but also the local currency working capital balances. All of these impacts are reported in non-core earnings. The Venezuelan bolivar is the only currency that currently fits this definition.

Third, income statements of foreign subsidiaries like Russia that did not use the U.S. dollar as their functional currency are translated back to U.S. dollars at new exchange rates.

Just the Russian ruble transaction, balance sheet revaluation and translation impacts have been and are projected to be significant at about $150 million, $100 million and $300 million after-tax, respectively for a total as I said earlier, of $550 million after-tax for the year.

Across all currencies, foreign exchange hurts totaled $450 million after-tax in the December quarter, $650 million fiscal year-to-date and are forecast to be at $1.4 billion after-tax profit curve [ph] over the course of the fiscal year. This is the most significant fiscal year currency impact we have ever incurred.

The currencies of six countries, Russia, the Ukraine, Venezuela, Argentina, Japan and now Switzerland account for over $1 billion of the $1.4 billion after-tax headwind from FX.

In the first five of these markets, we have larger businesses than nearly all of our multi-national competitors and we have a large Swiss franc exposure from our European headquarters in Geneva. In aggregate we have more than $8.8 billion of sales in these markets, 2 to 3 times our next largest competitor.

Of the $1.4 billion hurt, about 30% is from transaction, about 20% is from balance sheet revaluation and the remaining 50% is from translation, because of these impacts the outlook for the fiscal year will remain challenging. We have and will continue to offset as much of this currency impact as we can through pricing and productivity cost savings.

At the same time, we will continue to invest in our businesses, brands, product innovation and capabilities because it's the right thing to do for the mid and long term. We'll adjust fiscal year targets accordingly as I'll cover when we get to guidance. Now as these FX impacts flow through the income statement they obviously impact margins.

Core gross margin was down 20 basis points in the December quarter, excluding foreign exchange it was up 40 basis points.

Cost savings of approximately 190 basis points and 60 basis points of improvement from higher pricing were offset by 110 basis points of mix, 50 points from innovation and capacity investments and 50 basis points from commodity cost increases.

While we're beginning to benefit from lower fuel prices which reduced transportation costs, the costs of materials such as resin and other specialty chemicals were still higher in the December quarter than in the prior year. Pulp is also up year-on-year.

If oil stays at or around current levels, these material costs headwinds should turn to tailwinds by the fourth quarter of the fiscal year. Core SG&A costs as a percentage of sales increased about 30 basis points excluding FX they were down 80 basis points.

70 basis points of overhead savings and 70 basis points of marketing savings mainly from non-media cost efficiencies were more than offset by 120 basis points of foreign exchange impact and 50 basis points of organizational capability investments in R&D and sales.

Productivity savings and cost of goods sold and SG&A totaled 330 basis points as we continue to meet or beat all of our productivity objectives. Core operating margin was down 60 basis points versus the prior year including FX and was up 120 basis points excluding FX.

The effective tax rate on core earnings was 22.3%, 130 basis points above last year's rate. This keeps us on track with our fiscal year outlook of about 21%.

December quarter all-in GAAP earnings per share were $0.82 which include approximately $0.03 per share of non-core restructuring charges and a $0.06 per share benefit from earnings of the discontinued batteries and pet care operations.

Also included was a $0.26 per share one-time, non-core, non-cash charge as we explained during our analyst day in November to adjust the carrying value of the battery business. It was a strong cash quarter, we generated $3.4 billion in operating cash flow and $3 billion in adjusted free cash flow with 95% adjusted free cash flow productivity.

We returned $3.7 billion of cash to shareholders, $1.8 billion in dividends and $1.9 billion in share repurchase. Fiscal year-to-date we have returned $7.9 billion to shareholders, $3.6 billion in dividends and $4.3 billion in share repurchase.

In summary, second quarter organic sales and constant currency core earnings growth were in-line with going-in expectations. Productivity savings continued at or ahead of plans with constant currency growth and operating margins well ahead of year ago and we continued our strong track record of cash productivity and cash return to shareholders.

We're maintaining investments necessary to support our brands and product innovations.

These include continuous strategic investment in breakthrough product innovations like Gillette ProGlide Flexball and our entry into the adult incontinence category with Always Discreet as well as investments to restore the competitive value equation of leading brands like Bounty and Charmin.

We will strike what we believe to be the appropriate balance between short-term FX cost recovery and investment to support the mid and long term health of our business. We will continue our efforts to focus our portfolio, to lead business model and product innovation to become ever more productive and cost efficient and to execute with excellence.

As we announced in August, we're taking a significant and strategic step forward to streamline, simplify and strengthen the company's business and brand portfolio. We will become a simpler, more focused company of 70 to 80 category-leading competitively advantaged brands organized into about a dozen business units in four industry based sectors.

We will compete in businesses that are structurally attractive and that play to P&G strengths where we can achieve sustainable advantage.

Every brand we plan to keep is strategic with the potential to grow and create value with 70 to 80 brands are leaders in their industries, categories or segments brand shoppers buy, consumers use and customers support. They are leaders in brand equity, awareness, trial, purchase and loyalty.

They are leaders in product performance and product innovation and leaders in growth and value creation. Within these brands, we will operate with more efficient brand product line and SKU offerings, reducing SKUs 15% to 20% over the next two years. We will create a faster growing, more profitable company that is far simpler to operate.

We have been progressing this work at a healthy pace. In November, we announced plans to exit the Duracell business through a split transaction in which we will exchange a recapitalized Duracell company for Berkshire Hathaway's shares of P&G stock. We expect to complete the deal in the second half of this calendar year.

While we're progressing very well, those of you who have built your fiscal 2016 models assuming a July 1st closing and related share count reduction are probably a quarter or two too aggressive. In late December, we closed the divesture of the European pet care business and respective brands.

We also signed and communicated a deal to divest Camay and Zest soap brands. To-date we have divested, discontinued or consolidated 35 brands. As we continue to strengthen our category and brand portfolio, we will focus our brand building and product innovation, support and investment against the biggest consumer and market opportunities.

We're committed to be or become the brand and product innovation leader in the categories in which we compete. Year-after-year, decade-after-decade successful brand building and product innovation have grown our categories, created entirely new categories, built our business and have been a major source of value creation.

Innovation combats commoditization, stimulates category growth and builds the cumulative advantage of our brands over time. Our biggest business by far is Baby Care and the Pampers brand. Our biggest country is the United States.

As first reported last month at analyst day, we continue to stimulate category growth at 2% to 3% over the last year, reversing a multi-year decline.

The Pampers business model that focuses on stimulating point-of-market entry demand and trade up to mom preferred, better performing and premium-priced products like the unique Swaddlers innovation and better performing better value point-of-entry products from Luvs have resulted in broad and sustainable category growth that benefits retailers, suppliers and manufacturers and has grown share for P&G.

Our U.S. diaper share is now 44%, up 2 points versus a year ago. We've turned a 10 point share disadvantage into an 8-point category leadership advantage over the past five years. Both Pampers and Luvs are growing share. Pampers Swaddlers share is up 3 points to an absolute category share of 12%. We're bringing diaper pants to market.

We just introduced Pampers Premium Care Pants in Russia where the [inaudible] accounts for 23% of the market. Pampers Pants provide exceptional skin comfort and dryness benefits in an underwear-like design. The Russia launch is off to a very good start with shipments about 50% ahead of target.

We'll be bringing Pants to China this month and Latin America next quarter. Achieving a fair share of the global diaper pant market represents up to a $2 billion growth opportunity. Our strategy for Fabric Care in the U.S., our second biggest business, is having a similar positive impact for P&G and for category growth.

It begins with creating and delivering a consumer preferred mix of brands, products and values. Nearly a year ago, we introduced a strengthened Fabric Care brand and product lineup that significantly broadened consumer appeal.

Essentially, we offered shoppers a full range of brands and products priced from about $0.15 to $0.28 a laundry load, including broadened POD offerings, new and improved liquid detergent options and Tide Simply Clean and Fresh, a preferred brand and product for consumers interested in value at an affordable price.

As a result, Tide and Gain have both grown market share over the past 52, 26, 13 and 4-week periods. Tide now holds a 40 share. Gain is the number two brand at a 16 share. PODS have reached an 11 share of the U.S. market and P&G's share of that segment has grown above 80.

We're seeing the first indication of category sales stability and even growth in recent weeks which is good for retailers, suppliers and manufacturers. This is the first category growth in seven years.

We continue to expand PODS around the world and to developed and developing markets and we expect unit [inaudible] to reach $1.5 billion in retail sales this fiscal year. We're following a similar strategy in the fabric conditioner category, a smaller, but even faster growing core strategic business.

The business model stimulates category growth by trading more consumers into the discretionary fabric conditioner product category be a meaningful product like scent beads and liquid products that deliver better, functional and sensory benefits. Beads alone will deliver $400 million in global sales this fiscal year.

We continue to grow our Downy and Lenor brands in established markets, while we expand effectively into new countries where the size of the prize and the value creation return are attractive. P&G fabric conditioners are growing at about a 7% compound average growth rate, approaching $3 billion in global sales.

We're growing the grooming category and P&G's share behind the Gillette Flexball innovation. The male razor segment is up 17% on a unit volume basis over the last six months. Gillette's razor volume share was up 7% in the December quarter.

As expected, we're beginning to see strong razor sales translate into an improved blade or cartridge share which was up 2 points in the December quarter. We're expanding Flexball right now to Europe, the Middle East and Africa and we're extending this breakthrough to women with Venus Swirl which began shipping in the U.S. this month.

Women and men are telling us that they significantly prefer these products. It looks like Flexball may be the biggest most consumer-obvious new shaving system innovation ever introduced by Gillette. Our Hair Care business is now growing share in both the U.S. and China. Pantene has now grown share seven months in a row in the U.S.

and Head & Shoulders is up about 0.5 point in both markets, both brands are responding to improved products and better brand building. These brands in this category have a full pipeline of product innovation that will come to market this year and in the years ahead.

Pantene is shipping its new product line with formulations that work from the inside out to deliver on Pantene's promise of delivering the most beautiful, healthy hair so you shine. Head & Shoulders new product line delivers 100% dandruff free results and an improved in-use experience that enables consumers to feel the product working instantly.

We're accelerating the growth of the adult incontinence category with Always Discreet. Women are not fully satisfied with current category product offerings. One in three women over 18 years old suffers from incontinence, but only one in nine uses an incontinence product.

Always Discreet pad and pant-style offerings deliver significantly better fit and protection from Always, a brand that women trust and prefer. We begin shipments of Always Discreet in the UK in July and the U.S., Canada and France in August. In the UK, the adult incontinence category is growing double digits, roughly 50% faster since our entry.

In the U.S., the category growth rate has more than doubled to around 9% and our shipments are running ahead of target in both markets with value share a little over 7% in each. We're continuing the expansion of Always Discreet with launches in Germany, Switzerland and Austria this quarter.

We're committed to be the innovation leader in our categories, to drive category growth and the growth of our businesses. And we're increasing investment where we have consumer preferred brands and products. In addition to innovation, productivity will continue to drive total shareholder return.

The best companies in any industry find a way to lead both innovation and productivity. We're turning productivity into a core strength at P&G making it a systemic, enduring value creation pillar alongside innovation. We have significantly accelerated and will significantly exceed the $10 billion cost savings goal we set 2.5 years ago.

We're driving cost of goods savings well above the original target run-rate of $1.2 billion a year, with $1.6 billion of savings this fiscal year. We expect to improve manufacturing productivity by at least 6% again this year, reducing staffing even as we add capacity and start up new production modules.

We've begun work on what is probably the biggest supply chain redesign in the company's history. We're transforming our distribution network in the United States, consolidating customer shipments into fewer distribution centers.

These centers are strategically located closer to key customers in key population centers, enabling 80% of the business to be within one day of the store shelf and the shopper.

All six of the new mixing centers will be operational by the end of February, on or ahead of schedule and we expect to complete the conversion out of legacy locations this calendar year.

The distribution network projects will allow both P&G and our retail partners to optimize inventory levels, while still improving service and on-shelf availability and reducing in-store out of stocks. We have established a $1 billion to $2 billion value creation target from the global supply chain reinvention effort.

We're targeting to deliver $400 million to $600 million in annual cost savings building to this level over the next three to five years. These savings are incremental to the $6 billion of cost of goods savings we originally communicated and are on track to exceed. We expect additional top and bottom-line benefits from improved service levels.

We continue to invest strategically in additional capacity for critical developing markets and we continue to rationalize our manufacturing processes so that common, simpler and more global standard making and packing platforms support accelerated product innovation at lower cash, capital and operating costs.

This enables not only better and cheaper, but also more agile, flexible and faster. We have reduced non-manufacturing or overhead enrollment, by nearly 18%, 80% more than we initially envisioned when we launched our restructuring program.

We continue to evolve the organization design so that is business focused starting with consumers and customers and so that it is simpler, more effective, more responsive and more efficient. We've organized around industry-based sectors. We're streamlining and de-duplicating the work of the business units and selling operations.

We've consolidated four brand building functions into one. Each of these changes reduces complexity and each creates clear accountability for performance and results, a more focused portfolio of brands and businesses will enable further changes.

We should be close to the high end of our estimated 16% to 22% non-manufacturing enrollment reduction range by the end of this fiscal year, more than a year ahead of plan. We have additional opportunity to improve marketing efficiency in both media and non-media areas while increasing overall marketing effectiveness and the strength of our programs.

We continue to drive marketing productivity through an optimized mix driven by new, more efficient digital media. We have quietly strengthened and invested in all of our digital capabilities including mobile, search and social with a wide range of partners. More than 30% of our working media is now digital.

We have developed proprietary systems to target digital media more precisely and more efficiently. Three of our brand communications designed specifically for digital were among the top 10 YouTube viewings in 2014. These efficiencies are enabling us to maintain strong media weights despite the cost pressure we're facing from foreign exchange.

We're focused on driving productivity improvement up and down the income statement and across the balance sheet, disciplined working capital management, strong execution of our supply chain financing program and the scarcity mentality and capital spending are driving cash flow results.

One of the productivity related questions we often hear concerns developing market margins. We're growing constant currency earnings margins in developing markets. Constant currency earnings grew two times faster than sales in 2013, four times faster than sales in 2014 and are forecast to grow four times faster than sales again this year.

Over those three years, we will have grown constant currency earnings 12%, 26% and 26%, respectively. Even with the unprecedented FX impact, we're making progress. Our margin all-in in Latin America is forecast to be up more than a point this year.

In the BRIC markets, Brazil and India should each be up about 4 points and China should hold its industry leading margin. Russia is forecast to be done a few points because the pricing intended to recover the FX impacts will not be fully in place until the spring.

In total, though, we're forecasting developing market margins including FX to be up about 60 basis points for the year. The final priority area I'll touch on this morning is execution, the only strategy our consumers and customers actually see.

For many of our big brands, building trial is still a huge opportunity; for example, repurchase rates on unit dose laundry detergents are over 50%, but trial rates are barely double-digits. We have a number of programs underway to increase trial on our brands.

In several categories in many countries, we have an opportunity to improve coverage, dedication and in-store merchandising of our brands. We're investing selectively in dedicated sales coverage of merchandising to improve execution for shoppers in-store and online.

This should lead to improved distribution, shelving, merchandising and pricing execution to consistently win at the first moment of truce. We're also continuing to grow our e-Commerce business with omnichannel and pure-play e-tailers as shoppers evolve their shopping preferences and habits.

As we look beyond the January-March quarter, we're hopeful that industry and company tailwinds will begin to improve. Productivity should continue to grow. The benefits from portfolio strengthening and simplification should continue to build. Pricing should help. Oil-based commodity costs should become a tailwind by the fourth quarter.

Beyond the cost-benefit lower energy prices will hopefully become a stimulant to demand in petroleum importing countries. The world's Top 15 oil importing countries which include the U.S., China, Japan and many Western European markets, account for nearly 2/3rds of P&G's global sales and an even higher share of profits.

Interest rates should remain low and we hold out hope for a sequentially stronger economy in the United States, our largest market. But there will continue to be headwinds.

Foreign exchange is obviously at the top of the list and has a significant short-term impact, pricing to recover that impact, taken by both P&G and other industry players is likely to result in some market contraction and reduced consumption in several countries.

Lower commodity costs will create a consumption headwind in energy producing countries and political instability will continue to result on some ongoing amount of market level disruption. In a time of unprecedented currency devaluation that impacts our company more than any other in our industry, it's important to stay balanced.

We need to balance doing what's right for the short, mid and long term. We need to balance the focus on delivering operating cash flow in the short term and continuing to deliver good returns for shareholders with continuing to invest in our businesses, brands, products, capabilities and people for the mid- and long term health of the company.

We're maintaining our forecast for organic sales growth of low- to mid-single digits for the fiscal year. We delivered 2% organic sales growth in the first half of the year and we could see a modest acceleration in the second half.

Pricing should be a larger contributor to sales growth in the second half as price increases are more fully reflected in our results. We're seeing positive trends in big core businesses like U.S.

Baby Care, Fabric Care and Grooming and Hair Care and we're continuing to expand several important product innovations, pants, PODS, beads, Flexball and Swirl, upgraded hair care products, Always Discreet. We're also maintaining our outlook for double-digit constant currency core earnings per share growth for the fiscal year.

We expect foreign exchange to have a 12-point impact on core earnings per share growth for the year. This is more than double what we had estimated last quarter and more than five times the impact we expected at the beginning of the fiscal year.

Including FX, we now expect core earnings per share to be in-line to down low-single-digits versus last year core earnings per share of $4.09. We're now forecasting all-in sales to be down 3% to 4% for the fiscal year. This includes a 5 point drag from foreign exchange and a 1-point impact from minor brand divestitures.

We expect all-in GAAP earnings per share to be down mid-teens versus the fiscal year -- prior fiscal year. Essentially all of the year-to-year reduction in GAAP earnings per share is due to the $0.58 of one-time, non-cash battery impairments. In total, current year GAAP earnings per share includes $0.67 per share of non-core items.

In addition to impairments, the other main items are $0.20 per share of restructuring costs and about $0.14 of gains in discontinued operations from the combination of the Duracell and pet businesses. We're currently forecasting 96% adjusted free cash flow productivity, above guidance of at least 90%.

We're maintaining our outlook for cash return to shareholders. We plan to return cash to share owners through dividend payments of about $7 billion and share repurchase in the range of $5 billion to $7 billion, $10 billion to $12 billion all-in. This forecasting guidance range assumes mid-January spot rates for foreign exchange.

Further, significant currency weakness, including Venezuela, is not anticipated within our guidance range. Our outlook is based on current market growth rates which we're monitoring closely, especially in markets where we taking large price increases to offset currency impacts.

We also continue to monitor unrest in several markets in the Middle East, Russia and the Ukraine and we continue to closely monitor markets like Venezuela and Argentina where pricing controls, import restrictions and access to dollars can present risk. On the flip side, our guidance does not reflect some potential tailwinds.

Our results can improve if currencies ease, if markets begin to expand in a sustainable way or if U.S. economic growth accelerates. There are a few things you should keep in mind as you construct your models for the second half of the year.

Our organic sales comps ease a bit in the back half of the year and we're taking significant pricing to offset foreign exchange impacts.

We expect significant top and bottom line headwinds from foreign exchange in the back half of the year, including a large negative impact from balance sheet revaluation related to the Swiss franc in the March quarter.

There is also a quarterly translation hit to earnings as we're operationally net short to Swiss franc due to the significant local cost structure related to our Europe and India, Middle East and Africa headquarters in Geneva.

Productivity savings will build as the year progresses and we expect sequential improvement in commodity costs as we go through the remainder of the year.

Stepping back, we're not only investing in our brands and products, but also in critical company capabilities that will enable much better consumer and customer responsiveness with systems that are more agile, faster, better and cheaper.

We have talked about the supply chain, the overall goal is a seamless and synchronized flow of information and product with shoppers, customers, retailers and e-tailers. Our strategies continue to sharpen. Our category and brand business models continue to improve. Our product innovation pipeline continues to fill.

Our productivity yield continues to grow with several more years of significant cash and cost savings ahead. We're operationalizing plans more consistently and executing them more broadly and reliably.

We continue to invest strategically in additional capacity for critical developing markets and we continue to rationalize our manufacturing processes, so that common, simpler and more globally standard making and packing platforms support accelerated product innovation at a lower cash, capital and operating costs.

We continue to evolve the organization design so that it is business focused, starting with consumers and customers, simpler more effective, more responsive and more efficient.

We continue to invest selectively in sales coverages and merchandising to improve execution for shoppers in stores and online and we continue to invest in product innovation technologies and product initiative acceleration.

Through this transformation, we're creating a more in touch, agile, coordinated and integrated organization that puts winning with the consumer first. We're sharpening our strategies and business models. We're operationalizing plans and executing with more consistency and excellence.

These are the choices and capabilities that enable balanced growth and value creation in the mid and long term as we work our way through the currency devaluations in the short term. That concludes our prepared remarks for this morning.

As a reminder, business segment information is provided in our press release and will be available in slides which we posted on our website, www.pg.com, following the call. With that, I would be happy to take questions..

[Operator Instructions]. Your first question comes from the line of Wendy Nicholson from Citi..

My question has to do with the multiplier effect between the currency pressure on your top line and bottom line because it's just so much bigger than we see at any other company and my question is how much of that I've how much of that is going to go away and this is sort of a long term strategic issue how much that is going to go away as you get your new plans any manufacturing facilities online and emerging markets is that just a structural thing whenever going to have more three raises in place plans disproportionate significantly on our earnings..

Clearly as it is apparent you understand from your question, the difference between the top line and bottom line impact FX is driven by sourcing. And were product is being manufactured and imported two. And it also has to do with where we're disproportionately sized versus our competitors just in terms of our business footprint.

We disproportionately impacted due to our business size and market position in countries that have seen some of the highest levels of devaluations.

In Venezuela, Russia, the Ukraine and Japan, we have significant businesses and we estimate that in those markets our top and bottom I impacts are more than double our top multinational competitors and then we're also importing significant amount of product in the markets like Venezuela into markets like Argentina into markets like Russia and Japan.

We're working as we rightly point out to further localize our manufacturing supply chain over time and that should help as we go forward. We're building roughly 20 new manufacturing facilities, all of which are in developing markets which are the ones that have been most impacted by foreign exchange.

As we do that and even with our existing manufacturing platforms, we're working to localize our suppliers with us.

As I mentioned in the example on the ruble, this is both a cost in terms of importation product but also importing materials and the more that we can localize both of those components of the supply chain the better off we're going to be in terms of being operationally hedged to FX. The issue will never go away and its entirety.

Again, think you mentioned a very good example on blades and razors. We're not going to have 180 blades and razors manufacturing facilities but we're localizing to a greater extent even that supply chain. With significant investments we made for example in Mexico.

So, hopefully, this will continue to reduce as we move forward but it is not likely to ever completely disappear..

Your next question comes from the line of Chris Ferrara with Wells Fargo..

Jon, I guess obviously FX drives and need for pricing. Jon, I think you said you're going to be more aggressively taking pricing in the back half.

But I guess the question is with crude at 45, was there a risk that we get into a situation like '08 - '09 where you can price more than peers and ended up losing share?.

Fair question and that's, obviously, something we're going to watch very carefully. The good news if you want to call it that is in markets where the most significant pricing is needed, the currency impacts far overwhelmed the energy costs impacts.

So again going back to our example of Russia with 78% currency devaluation we might not be able to recover all of that and certainly we're going to have to take into account both competitive consumer dynamics which will reflect the commodity cost environment as well. So we'll watch that carefully.

That's also why as I talk about the efforts to offset FX, I always mentioned as well productivity and cost savings. There is going to have to be a higher component of that this time around for the reason you cite as well as for the simple reason that our euro and yen domicile competitors don't have as much of a headwind as we have.

So we're going to have to approach this very deliberately, very carefully. But still I think there is a significant opportunity for pricing..

Your next question comes from the line of John Faucher with JPMorgan..

Want to talk a little bit about the organic revenue growth guidance here and you talked about an improving trends in the second quarter, can you talk about what you are seeing? Potentially what you're seeing in the third? And then going back to -- looking at this -- why not just take it down to low-singles, I guess from that standpoint.

Not that I think many people are pricing in it but it seems a little overly optimistic and then, sort of looking at Chris's question here, what's the outlook if you look at things getting better sequentially in terms of the volume versus pricing breakdown? Is it all going to be pricing as things get better in the back half of the year? Do you think you can get volumes improving? Thanks..

So first of all, low single-digit organic sales growth is as you know covered within our guidance range and we're going to have to -- there is both tailwinds and headwinds going forward here. We have seen some pickup in the U.S.

market as I mentioned in our prepared remarks, volume was up two points in the developed markets in the quarter and we have seen an increase in the market growth rate in the U.S. And if that continues, that's obviously our biggest market and our most profitable market that could be a real benefit to the top line.

We have several businesses where we have admittedly struggled recently but where we believe the fix is right around the corner. I mentioned in our prepared remarks the family care business, that's a big business for us in North America where we've been losing share.

We've adjusted pricing on that business and are starting to see both volume and sales respond. So, hopefully, that picks up for us. Another big business that I didn't mention in the prepared remarks is Mexico. If we look at sales in Mexico were down almost 20% on the quarter, it constitutes almost a full point of organic sales growth.

So if it were not for Mexico we would've rounded it to 3%. And the driver there is a combination of three things. There is a consumption tax increase which was put in place January a year ago. So that's annualizing on the consumption impacts of that are annualizing.

We also took pricing to deal with the value in peso and we changed some of our trade terms to pricing transparency in the marketplace. All of that should begin to annualize here very shortly.

So if we continue to make progress, if we continue the growth that we have on some of our big brands, if we can address a few of the admitted challenges that we have, I mentioned China as another example, there is no reason we couldn't get up into pick up another point of growth.

And then we will have to see what happens as we price as Chris mentioned as you rightly mentioned to market sizes in some of these other markets. I would say quite honestly there is more uncertainty in the top line and there has been in sometimes because of all these variables. But there is both positive variables and variables to watch out for..

Your next question comes from the line of Lauren Lieberman with Barclays..

I guess two things.

One was just to clarify that last point, Jon, that when you say pick up another point of growth that you meant another point in the back half not another point on the full-year from the 2% run-rate?.

Yes..

Perfect. The other thing was on the other promotional environment in the U.S. I think Unilever's comments were pretty direct around their savings be it on commodities or obviously currency benefits being reinvested in past back to the consumer. So was curious about your view of the promotional environment particularly in the U.S.

and then also specifically looking at beauty. It just feels like there is -- this is anecdotal, but it feels like the year has started off in a very, very promotional way. So I was just curious about particularly on beauty that would be great..

Okay let me start way on macro and then I will get down to micro including beauty. In general as you know, promotion is the last place we would like in most cases to spend a dollar, we would rather spend it on equity or innovation and if you just look at the drivers of our top line growth over time, I think that it bears that out.

So in the quarter that we just completed pricing inclusive of promotion was a one point benefit to the top line, it's been a benefit for 16 consecutive quarters, it's been a benefit for 10 consecutive years.

So it doesn't mean that we won't have individual product categories that are up and down at a given time given both the trial needs of innovation we're putting into the market and the competitive situation but broadly that is not our game. Reflecting just on the U.S.

market, so the first point of your question, if we look at the indices for percentage of volume sold a promotion over the last four quarters, the indices sequentially have been a one-to-one, this is all business category business not just P&G, 101, 103, 101 and 98. So broadly, that's not indicative of an environment that's heavily promotional.

Now, again within individual product categories of course there are differences. And to be fair those figures that I just provided you don't include couponing, but they don't include couponing at the base period either. So they are kind of free of that.

On P&G Beauty we did increased promotion a little bit particularly on hair care behind some of the product I mentioned that are driving share growth on Pantene and Head & Shoulders.

It's very important particularly on Pantene given some of the struggle that we went through prior to the last that seven months that we give opportunities to consumers to experience and re-experience and retry our brands.

So there has been some level of promotional increase but again most of our spending is on equity building and innovation and will remain that way..

Your next question comes from the line of Olivia Tong with Bank of America Merrill Lynch..

On M&A and the pairing down of your portfolio, do the current market dynamics change your thinking anyway a brand brands or businesses that might be up for divesture or harvesting including the time of [inaudible]? And conversely as you speak with potential inquirers I suspect some of them might be overseas without going into specifics, have your discussions have been impacted in any way as map [ph] changes for that?.

We view the strategic were making on the portfolio as a long-term strategic move and so the impact of one year in FX either positive or negative doesn't dramatically change that. And in my conversations with potential buyers, they seem to be similarly oriented. They're looking at longer periods of time.

Now you can imagine that there are specific situations where let's say you have a large component of the business that happens to be operating in Russia or the Ukraine or name a couple of markets, that certainly -- I wouldn't say that it affects buyers strategic interests but it affects, obviously, the tone of the overall conversation as it should but I view that really as on a margin on the whole as the years of all and as the currency situation has worsened.

Honestly I can't think of one conversation that we've been holding with potential buyers that has changed dramatically in terms of its tone as a result of currency. So I think we're full steam ahead..

Your next question comes from the line of Dara Mohsenian with Morgan Stanley.

Jon, you highlighted the recent volume pickup in the U.S. and it looks clearly like retail sales growth has accelerated the last couple of months in the scanner data including through mid-January release today. That being said, the two year average look relatively stable given easier comps the last couple of months in the scanner data.

I just want to get a sense from you on how much of the recent U.S. top line rebound in your mind is due to a more sustainable U.S.

consumer recovery or is it more easier comps? And then second on pricing can you give us a bit more granularity on how much of the FX pressure this you think you can eventually recover through pricing and also from a commodity standpoint given its expected return to a tailwind by Q4, do you expect to get a margin windfall at some point looking out to fiscal 2016 or do you think that will be priced back to the marketplace? Thanks..

Sorry, I was struggling there to remember all components of this. I'm going to start from the back and go to the front. On commodities, if oil stayed at current prices we would expect an annualized benefit of about $600 million before tax that should start flowing through in the fourth quarter.

If you look at the combination of our contractual lags and our inventories, on average they are six to seven weeks, so the recent moves should start coming through really by the very end of this quarter, but more fully in the fourth quarter and we will just have to see what happens in terms of what competitors do relative to pricing.

Having the FX issues at the same time, though, directionally moves us in a position of expecting more pricing rather than less. But you're right to point it out as something that we need to watch.

Historically in FX moves like this, not identical to this because this is one of the bigger ones we've ever seen, but historically, we've been able to recover over time about 50% to 2/3rds of the impact through pricing and then we get the balance through productivity savings.

My sense is we're going to have to move that balance and maybe this time we will get 40% or 50%. We'll see. We're going to have to depend more on productivity savings to get there. The good news is we've got a very strong productivity program that we have visibility on for a couple of years going out. So that's how I look at pricing in general.

On your question on the U.S., of how much of that is just better comps and how much of its market, again, I would just point to the market growth rates which are up about 0.5 point in the U.S.

So at least that portion of it is due to the market and then I mentioned that we're holding or building share in businesses representing more than 60% of sales. So there is an element there of share growth as well, all of that combined with the easier comps driving the data..

Your next question comes from the line of Bill Schmidt with Deutsche Bank..

Three questions. The first is there a concrete turnaround plan in China? Because it seems like it's been two or three years now with share losses in a lot of big categories and I know you guys understand that there is a problem there but I haven't really heard anything concretely what you are going to do to turn it around.

And then on the divestitures, I know you said 35 brands have been sold. Can you tell us what percentage of the 10% of sales you're done with there? And then the last one, which is more technical, how big magnitude-wise is going to be the Swiss franc impact in the March quarter? Thanks..

So again I'll start with the last one. There should be about an $80 million after-tax balance sheet revaluation impact from the Swiss franc in the third quarter and then we will have the translation issue as well. As I mentioned, we're short the franc overall and that's driven by the fact that we have a very large cost base there.

Our European and Eastern European, Middle East, Africa headquarters are there and Switzerland is a small country so we have proportionately less volume. So that will be an impact from a balance sheet evaluation in the third quarter and from a translation standpoint in both the third and the fourth quarters. On China, we've built that business.

We've grown about 50% over the last four years; it's now our second largest business in both sales and profit. There are two things that we're working to improve in China. One, quite frankly is the amount of price transparency that exists in the marketplace.

I think the market in general has become over the last year or so, last two years, a little bit too promotional in nature which tends to happen when you have major changes in consumption patterns. But it's created a degree of opacity in terms of consumers and customers understanding the true value equation that exists and we need to fix that.

I think in general the industry is working to fix that and that's why you see some of the impacts that you've seen from some of the other manufacturers in terms of their results in China as well and I would say that we're in the fifth inning in terms of getting that squared around.

And then as I mentioned in several categories discussions previously, there is just a massive opportunity in China as that market [inaudible].

If you look at that market by price tier, the premium and super premium price tier, so the top two price tiers now represent 50% of consumption in the market, so across competitors and those tiers are growing at 11%. The balance of the market is flat.

In some categories, we haven't followed the consumer as quickly as we needed to up that price ladder, that's part of the issue on Olay. We're not yet where we want to be for instance, on Pampers. Though as I mentioned, the premium pant product coming to market this month will help significantly.

So those are really two of the areas generally that we're focused on, on dealing with China, but again, there is huge opportunity in that market.

Your next question comes from the line of Steve Powers from UBS.

Jon, a question on Beauty, maybe following up a little bit about your comments there just on Olay. I guess it continues to be a work in progress with organic growth negative despite successes like Pantene domestically.

Can you talk just a little bit more about the key initiatives there and what is likely to change versus stay the same given David Taylor's new appointment to that segment? Thanks..

I mentioned the progress on Pantene and the Hair Care portfolio broadly which we're very encouraged by. On Olay, we actually did fairly well in the U.S. in the last quarter. I think we were up about 3%, John, can get that number right for you afterwards, but I think that's pretty close.

But we're still working in several other parts of the world as I mentioned to increase the salience of the brand in terms of both the channels, the price tiers and the product benefits that consumers are looking for in skin care products and that's work that takes some time. I would say we're still in the early days there.

We have people working on that business who have deep experience in skin care have been associated historically with the better days on Olay and so we continue to be very hopeful that will come around. David, frankly, brings a new set of eyes which can only help and has tremendous brand building experience across many of our product categories.

He's managed in the beauty business before, he managed our hair care business in China when he and I were working in China together in the mid-90s and so that's only good..

Your next question comes from the line of Nik Modi, RBC Capital Markets..

Most of my questions were asked but I was curious, Jon, if you can talk about pricing analytics at P&G and over the last couple of years if you've seen an evolution or increased sophistication, more accuracy because if you go back the last couple of years on the pricing, it really led to a multi-quarter kind of string of share losses.

So I'm just curious if you kind of sharpened some of the analytics on the pricing side? Thanks..

Yes, the first thing I would say, Nik, is the primary metric that we're looking at as we analyze pricing choices both up and down is value creation and that may mean and I don't want to overstate this that there may be such situations where it's right to accept some share loss to get the structural economics to an attractive place in our brands.

In terms of, though knowing if value creation is the primary metric, whether we're delivering that or not on a real-time basis, we have been constantly working to improve our analytical capability.

I won't say that we're all the way to where we need to be and I mentioned that's an investment in capabilities and this is one of the area, analytics in general that we're investing in, but simple things like our sales force being in the field as opposed to being in the office working on brand work will only help in terms of understanding what's happening on a real-time basis.

Also as I mentioned, I think in response to John's question we're going to be depending just as much on productivity as we're pricing to try to deal with this FX issue and that was not the case in the years that John mentioned. We didn't have the productivity program and certainly didn't have it at the level that we have it now.

So we were more dependent on pricing as a way to restore those structural economics. But this is obviously something that we have to stay close to as you rightly point out and as several others have and is something that we will. We will not get it right every time.

We cannot predict competitive behavior; we can't completely predict consumer behavior and so there will be some steps forward and some steps backward. But hopefully, the net is forward as it has been historically..

Your next question comes from the line of Javier Escalante with Consumer Edge Research..

My question is on Beauty and particularly on Prestige.

It seems like it led the decline of the [inaudible] this quarter and more broadly when you talk about the portfolio you basically said it's structurally attractive categories that play to Proctor's strength and I wonder whether you would say that channel source specific Prestige Beauty and professional hair care do you think that plays to Proctor's strength or not? Thank you..

A large part of the trend in Prestige is driven by a very strong base period where we had a very strong innovation program. So that's primarily what's going on there. I think your question on fit with P&G's core capabilities and strengths is a good question and an appropriate question.

I'll just provide a quick refresher on those capabilities and strengths because they do provide along with structural attractiveness and track record, the screens through which we look at our portfolio strategy and those core strengths are branding, innovation, consumer understanding, go-to-market and benefiting where appropriate from our scale.

And I've given the example before on our pharmaceuticals business where if you go across those capabilities, consumer understanding not terribly relevant, brand building, advertising, only legally permissible in three countries in the world, innovation challenged just because of the model in the industry, go-to-market, grocery stores, mass merchants, doctors.

That's a clear example of a business that doesn't benefit from our core capabilities. Our job in that case becomes to find somebody who does have those capabilities who can create more value than we can create and then monetize some of that value for our shareholders. We have gotten out of businesses because of channel fit in the past.

I would argue that the pet care choice was in part related to that. There was a specialty pet channel; there was an influencer channel with both the breeders and veterinarians that we did not have broader company expertise in. So those are the kinds of things that we will be looking at as we finalize portfolio choices..

Your next question comes from the line of Michael Steib with Credit Suisse..

My question relates to how you expect mix to impact earnings going forward in the second half in particular? It was obviously a tailwind on the top line growth this quarter but a drag on gross margin.

I wonder why that is and how you expect that to drive earnings going forward?.

Basically in a scenario where we have relatively similar growth rates between developed and developing markets and where we have relatively similar growth rates across our product segments. So in other words, Beauty grows faster than it did in the last quarter, but the mix impact is not significant.

In quarters where one of those -- two things aren't true, so where developing markets grow disproportionately or where our higher margin businesses like Beauty don't grow as fast as the rest of the portfolio.

We will have a mix impact on the bottom line and so it really comes down to your estimation of those two drivers going forward as to what the mix impact is going to be..

Your next question comes from the line of Connie Maneaty with BMO Capital..

I do have a question on Venezuela.

I appreciated your commentary about all the components in FX impact and in that context I'm wondering why you're still reporting your results at the official rate given where SICAD 2 is and where the parallel rate is? So can you quantify for us the move of your Venezuela results from SICAD 1 to SICAD 2?.

We provide all of our exposures in our disclosures because we know this is an important item for investors.

I haven't actually done the math, but you can, the reason that we continue to translate our results at a combination of SICAD 1, which is 11 to 12 and then the 6.3 official rate is simply because those are the rates at which we're transacting business in Venezuela.

We're getting dollars at those rates for imports of both finished product and raw materials. We're told that dividends and royalties would be paid for example, at the SICAD 1 rate, right now as I think you may be aware, the Government of Venezuela's working through as I understand it modifications to the exchange regime.

I don't have transparency or visibility into that. Obviously, we will look at that and understand really what's the rate at which we're going to be transacting business and that's the rate that we should be translating our results at.

Importantly, I'm in no way suggesting that others will come to different outcomes or are doing anything that's wrong or incorrect. For them it should reflect what rates they are transacting business at..

Your next question comes from the line of Joe Altobello with Raymond James..

Just two quick ones, I guess.

First, how much of the pricing you've taken so far or announced to the trade has been matched by competitors? And here I'm specifically talking about the developed world not developing and then, secondly was there anything unusual in the month of December organic growth of 5% because previous to that, if you look at October-November it looks like your flat to modestly down going into that month and I would imagine there was probably some pre-buying or pull forward ahead of some price increases? Thanks..

Joe, broadly without going into detail because we can't do that, our pricing is going to be centered on the developing markets. There is not a lot of developed market pricing that is planned.

As a result and because of the timing of certain moves, it is still early days in terms of understanding both what the competitive and what the consumer dynamics are going to be. Maybe we will have an update for you at CAGNY, but even that will probably be too soon.

We're in the early days there, but again, the main point is most of this we focused on developing markets not on developed markets..

Your next question comes from the line of Bill Chappell with SunTrust..

Just actually following up on Bill Schmidt's question which I'm not sure I got the answer to, percentage of sales that the 35 brands that you've divested or consolidated represents of kind of that total 10% and whether that 10% number is actually change as you have started to look at the portfolio a little bit closer? And then also with regard to -- I didn't really understand what you're saying in terms of the timing of the shares coming back in a little bit later from the Duracell divesture, so maybe can you help me understand that too?.

Yes, all helpful and thanks for reminding me of the other part of Bill's question. You know what the Duracell sales are, you know what the pet sales are, they have all been moved to discontinued operations and we've given you the amounts of those moves that have been made and those are the two largest. And then, there is a bunch of smaller things.

I think you can get pretty close to an estimate with a little bit of thumb in the air on where we're at. The number is not a static number, it does change. We have said very clearly that we intend to create value as we exit businesses.

It doesn't make any sense to exit a business if we can't create value in the process and so by definition, we haven't made definitive choices on what goes and what stays as we're still working to negotiate terms and see if we can in fact, create sufficient value in some instances.

So that's not a static figure that was a figure that was designed to get us close. Oh shares, thank you.

I mentioned that -- as I've read several of your updates from the sell side, we obviously haven't given you a lot of direction other than saying sometime in the second half we will close the transaction with Berkshire Hathaway on Duracell and retire those shares.

And so I've seen a number of the estimates, understandably picking different time points and one of them being July 1st and my only point is while we're making good progress, I don't expect that this will be complete by July 1st.

I do expect it will be completed in the second half of the calendar year, but I think July 1st is aggressive as you model the retiring of those shares..

Your next question comes from the line of Ali Dibadj with Sanford C. Bernstein..

So believe it or not I still have a question around FX and I get that you're guiding everything organically effectively the same and you're attributing the guide down to FX alone.

But I guess, why is that good enough? So why aren't we seeing things like some of your peers are doing that's more aggressive internally to offset some of those impacts? We've talked a little bit about pricing, but productivity, it doesn't seem like it's ramping up, at least it doesn't look like it yet.

It certainly looks like your investing in some areas in SG&A and I'm certainly mindful of the word that you used earlier, balance.

But what are you doing internally to pull in the belt a little bit more given the headwinds from currency that you are facing?.

First of all, I think if we step back and look at constant currency earnings growth that we're forecasting for the year and guiding to, it's double-digit.

So that's not an insignificant number and I get asked just as frequently and I think appropriately, if that isn't too much as I do if that isn't too little and it all comes back to this balance point.

If you look at our competitors, I mentioned in response to Wendy's question whether we like it or not our impacts from FX are more significant than some of our competitors simply because of our footprint and obviously we have others that are as you know either euro or yen domiciled or have largely a U.S. focus of their footprint.

And so even with that double-digit constant currency earnings per share growth, we end up at or slightly below a year ago. We will pull forward not necessarily -- we will execute any smart cost savings program.

I mentioned the fact that we're going to be close to the top end of our range on overhead reduction by the end of this year, that's more than a year ahead of pace. And again, is at the top of a 6 point range. So we're continuing to move pretty aggressively.

But as you rightly point out and as we have tried to communicate, we need to do that in a balanced way.

We just have so many things that present opportunity, both in the way that we operate in our long-term cost structure in delighting consumers with some of our brands, products and technologies that it would be the wrong answer to pull back from those. So we will continue to be balanced.

We will continue to be diligent and aggressive in terms of the identification of savings opportunities.

Another one for example that we've talked about, granted it doesn't happen all this year, but getting those six mixing centers set up and operational by the end of February that was acceleration of a project that we did specifically to help deal with the current reality and we'll look for more opportunities like that..

Your final question comes from the line of Jon Andersen with William Blair..

Jon, I think you mentioned earlier that volume actually declined in developing markets in the quarter.

And I'm wondering if you could just talk a little bit about that, is that a reflection of further slowing in consumption in developing markets? Or do you attribute it to this FX related pricing that you discussed and what your expectations are there going forward?.

Quarter-to-quarter there was no significant change in developing market growth from a market standpoint. The one exception to that which is very difficult to sort out is Russia, which when you look at it actually the growth rate increased, but I think that's a large part purchase ahead of pricing that people know are coming.

But I would say the market is not a big driver of the small volume reduction we had in developing markets. One driver is one that you rightly point out which is foreign exchange.

Where we haven't priced yet on some of the most recent moves like the big ruble move, we have been pricing in places like the Ukraine, Mexico, Argentina, Brazil, Venezuela obviously when that was legally allowed and so that is having some impact.

And typically we see that having an impact in most cases for about a 12-month period, in more significant cases like Russia maybe a longer period of time. The other impact is what I indicated which is some issues we've had in both Mexico that was, sales were down 20%.

I'm not sure what the volume was but it was significant and in China, where we’ve been kind of flattish. So those are two situations where we're working to improve. But really, markets with the exception of the unknown in Russia are pretty much holding quarter-to-quarter..

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