Good day everyone and welcome to today's Colgate-Palmolive Company Fourth Quarter 2016 Earnings Conference Call. This call is being recorded and is being simulcast live at www.colgatepalmolive.com. Today's conference call will include forward-looking statements. Actual results could differ materially from these statements. Please refer to the earnings press release and the most recent Form 10-K and subsequent SEC filings, all available on Colgate's website, for a discussion of the factors that could cause actual results to differ materially from these statements. This conference call will also include a discussion of non-GAAP financial measures, including those identified in Tables 8 and Table 9 of the earnings press release. A full reconciliation with the corresponding GAAP measures is included in the earnings press release and is available on Colgate's website. Now, for opening remarks, I would like to turn the conference over to Senior Vice President of Investor Relations, John Faucher. Please go ahead, John.

Thanks, Alicia. Good morning, and welcome to our fourth quarter earnings release conference call. This is John Faucher, Senior Vice President for Investor Relations. Joining me this morning are Ian Cook, Chairman, President and CEO; Dennis Hickey, CFO; Victoria Dolan, Corporate Controller; Elaine Paik, Treasurer; and, Bina Thompson, Chief Investor Relations Officer. On a reported basis, our net sales were down 4.5% in the fourth quarter primarily due to foreign exchange and the impact of the Venezuelan deconsolidation. Organic sales were up 1.5% in the fourth quarter. The organic sales growth in the quarter was driven by improvement and pricing while volume excluding the impact of the deconsolidation of Venezuela was down 1%. Pricing was up 2.5% in the quarter. Latin America was the driver of our organic sales growth this quarter posting continued volume growth, excluding the impact of the deconsolidation of Venezuela and strong pricing. In other regions, we saw headwinds in several of our markets, some of which were driven by one-time factors like Indian demonetization and some distribution challenges in certain of our African businesses. We also did see a slowdown in category growth later in the quarter in some markets. For the year, reported net sales declined 5%, while our organic sales grew 4%, driven by a combination of pricing and volume growth. For the full-year, organic sales grew in every division except Europe which is flat. Excluding the items testified in table eight of our press release, gross profit margin was up 180 basis points in the fourth quarter of 2016 versus fourth quarter of 2015 led by cost savings from our funding and growth initiatives and our restructuring program. On a GAAP basis our growth profit margin was up 160 basis points in the fourth quarter 2016 from fourth quarter 2015. Excluding the…

Thanks, John. And good morning everyone and let me wish you all a happy and healthy 2017. What I'd like to accomplish this morning is two things. 1) Reflect a little bit on 2016 and 2) then talk more specifically about our plans for 2017 in the context of the fourth quarter we have just completed. I think it is safe to say that 2016 has been a year of growing uncertainty filled with unpredictable and disruptive events, especially in the fourth quarter when we saw significant foreign exchange volatility following the U.S. elections, the unexpected demonetization activity in India and category slowdown in several of our key markets. Against that I would say, overall for 2016, we delivered solid performance overall. Topline organic sales growth up 4%, broadly healthy market shares as John has exampled in his remarks good gross margin progress up 160 basis points to 60.3% and just over 3.1 billion net operating cash flow up 7%. As we move into 2017, I think it's safe to say that the uncertainty continues and indeed there is likelihood of more events unpredicted occurring as the year unfolds. So how are we planning for 2017 in the context of how we ended 2016 in the fourth quarter? From a high level point of view, I think we feel confident that the strategy we have been deploying for over a decade, a strategy that focuses on engaging with consumers developing a steady stream of innovation for those consumers focusing on the efficiencies that allow us to fund our growth and perhaps most importantly continuing to develop a cadre of talented leaders that we can deploy around the world to keep focusing on winning on the ground. Secondly I would say that our discipline and focus on the fundamentals has served…

[Operator Instruction] We will go first to Caroline Levy of CLSA Americas LLC.

Thank you very much. Could you just quickly tell us what your thinking is on the currency hit to EBIT and earnings and then as I always do ask, Ian if you could talk a little bit about the climate in China and Brazil those two countries which seems to, Brazil seem to deteriorated meaningfully for the first time for you China the bricks and motor business maybe has deteriorated as well, so if could just touch on those two that would be great?

Yes I think, the foreign exchange from a ForEx point of view when I was estimating it was about 3% obviously the bottom line impact is more so the change from the guidance we provided, preliminary guidance we provided before entering our budgeting process is really composed of two factors. One is the foreign exchange and the second is based on the assumptions I just went through the fact that we have recognized slow market growth into our planning for next year. Turning to China and Brazil, I would say two cases, Brazil is indeed in challenging economic times as John said overall in Latin America we have been very pleased with our performance. We note that several companies have been negative on Brazil I think half of you would be our market shares continue to be strong in that country and indeed growing as John said. We have taken pricing necessary to offset foreign exchange in part and we have seen some slow down in category growth with negative volumes from time to time. So we are just going to keep focusing on growing our market shares in Brazil and overall in Latin America expect a healthy business there to continue. Regarding China again we were pleased that the fourth quarter show us make sequential improvement which had been our plan. We were particularly pleased to see volume growth come back positive. Our market shares are holding well. You are correct that our e-commerce business has loads of potential. We grew dramatically in China. We have a completely standalone team that focuses on driving that business in China. But we do have opportunity to increase our market share further because in China our market share is not in line with our brick and motor share yet on e-commerce so that gives us plenty of opportunity to grow. So, we remain I must say overall very committed to the emerging markets. We see a strong consumer base there. We have strong brand loyalty there and we continue to see good opportunity for growth there.

Thank you.

We will go next to Wendy Nicholson of Citi.

Hi, good morning. My first question is really just the follow-up I mean when you talked us in late October it didn't sound like the world is falling off as much as it clearly did for your business and other than the India demonetization which is an extraordinary event, I am surprised things all decelerated as they did. So I guess my first question is on with your guidance to planning to see sequential improvement in 2017 what’s your confidence kind of where we are set here end of January that the first quarter will impact show an improvement from 1.5% and then kind of tucked on to that and sorry for the long question but Colgate has long had this 4% to 7% organic growth target and you haven't been there for a while and I am just wondering if it's time to look at that reset that at least take maybe six and seven part of that guidance off the table and if you were to do that would you be able to take another hard look at your cost structure and maybe have another restructuring program? Thanks.

Good. Well thanks for the question Wendy. Yes, we feel confident in sequential improvement which is why we say it and why we went through the divisions making the comments we have made. And you are right that we’re a collection evidence that impacted us in the fourth quarter one has to say that the foreign exchange aspect of things was a surprise to most surely, the India demonetization was a surprise but what gives us confidence are the reasons I have laid out in my prepared remarks in terms of we understood what needed to be addressed. We are in the process of addressing them. And therefore, the plan we have is precisely that wondered sees us sequentially improving in the first quarter and sees us driving full growth at the low end of that 4% to 7% range. Another restructuring Wendy I think the way I would rather comment that is understand the intensity behind the language when we say that we are going to be relentless in driving the last year of our current restructuring program which clearly focuses on structural cost and as again we have said in a world that is slowing even more that it had. So, we recognize the challenge and we are being and will continue to be relentless on taking advantage of the opportunity of this last year of the restructuring program to address that structural cost.

And when you think about what happened in the fourth quarter, sort of the zigs and zags, I mean, one of the markets that I think is most interesting to me is France, not that it's all that large or what but not it strikes me as a very stable market generally and for it to turn negative in terms of category growth surprises me and I just wonder maybe on forgetting history and developed markets have always been so economically sensitive when it comes to toothpaste. But can you make any comments on that whether that is "Oh yes, not a surprise" or "Oh yes, that's kind of something new and different that we haven’t seen before?"

Well clearly, France category is turning negative was not a pleasant or expected event. I think there is public information out there that says that some retailers in France have suffered from the same problem which is to say consumer purchasing weakness in France. So, you're certainly seeing deflation in France and indeed in some categories, volume reduction. So, the focus has to be to right that with your customer partners on two things. 1) Is innovation that is price accretive, so that you can grow the category volume and hopefully the volume and 2) the brand marketing and in-store customer marketing to drive consumption at the retail level? So, the sharpness of the slowdown was a surprise.

Got it. Thank you.

We'll go next to Dara Mohsenian of Morgan Stanley.

Hi, Dara.

Hi, how are you?

Wonderful.

It sounds like guidance for 2017 assumes a lower level of pricing growth. I'm just trying to get a sense of you expecting a significant change in pricing, obviously you mentioned North America, but are there any issues with price gaps in other regions and then we talk to more about tweaks to promotional levels or could there be less price changes. And then the second part of that is you also mentioned higher marketing spending in 2017, how comfortable are you that you get a tangible topline payback from the higher marketing as well as the incremental promotion given it seems like from an industry perspective the volume payback in those areas is less than it's been historically recently. Thanks.

Okay, Dara. Well, so on pricing, when we talk SPI selling price increases, we simply had in our plan less pricing and because commodity pressures are more benign and transaction impact have lessened. A large part of that pricing is indeed carryover pricing from year-to-year. When you talk promotion and tweaking promotional level that has been for us largely in North America where we did see stepped up promotional activity in the fourth quarter and we have made some pricing gap adjustments in China on our business which has returned us to the volume growth, which we plan to build on in 2017. But beyond that, I would also know broad scale observation. On marketing spend, again the focus here is growth. We have like everybody else, return on investment model. I think when you talk about in-store activity or shorter marketing if you will, you're talking more about what can you do to induce purchase of higher priced products with less reliance on price at retails. So, I think that needs to be the focus rather than diminishing return. And on the advertising side of things, given the strength of our advertising, of our brand and given the strength of their innovation, we see that it's a very good return particularly with the effectiveness of advertising but I tried to elude to earlier and the continuity of advertising overtime. And of course, from an e-commerce point-of-view that has very good return and from a digital marketing point-of-view that has very good return as well. So, we're quite comfortable with the return side of things, I think what one has to try and guard against is a devolution into zero sum promotion pricing, so we're reaching where we need to but it's certainly not something we're looking to leap.

Great, thanks.

Good, Dara.

We'll go next to Stephen Powers of UBS.

Great, thanks. First just a follow-up on France. I know you said that the category slowdowns in that market at least on toothpaste according to the Nielsen data that I'm looking at. This is appear more company specific than category? I think Nielsen has Colgate volumes down 30% December period relative to flat for the category with Unilever, Glaxo and Han hold the beneficiary. So, just some more commentary on that will be great. And like a tuck on, a forward looking question. I know, John cited category dissolvation and dissolvations and effects really explain the lower EPS outlook. But I was somewhat surprised not to hear elevated competition in that algorithm as well. So, just any thoughts there would be appreciated because your gross margin outlook doesn't apply significant competitive pressure either. So, again just your outlook on a competitor pressure and how that changed all since your October outlook. Thanks.

Yes. First let's start with the comment on France. And I was trying to be shall we say broad based in my remarks earlier. The fact of the matter is we have had an issue with a retailer in the French environment which is resolved and will see us back where we were before in the first half of the year. So, that's the specificity to the Colgate aspect of France, but it takes nothing away from the fact that on the other categories, the category declines were sharp and meaningful. But on the Colgate brand specifically, there was a customer issue which is now being addressed in a mutually exemptible fashion and we'll see business trading return to normal in the first half of this year. Now, as we got competitive pressure, the one that we have spilled out is frankly the only one that we see between beyond what has been normative in our markets and that is in North America and that is one that we have stepped up to address within our planning guidelines for 2017. Hello?

Oh, that's great. I didn’t know my, I didn’t know it's still opened. Thank you very much for that. If I am open, could I just have you comment on the tax scenarios that you had run and just the range of impact that your scenarios point to?

Yes. I'm not open, Steve.

Okay.

No. The answer would be, I don’t think that's time well spent, which is why we try to frame our comments in the holistic sense. I mean, nothing is firm, you all know what the range is out there are and that's why we try to give the headline that from a holistic point-of-view, plus minus we would expect the net benefit to be favorable. And really I think that's enough to say at this stage.

Alright thank you very much.

We will go next to Ali Dibadj of Sanford Bernstein.

So, I guess the stock reaction would suggest that there is still a debate about what you are saying and kind of brief in acceleration and what I am really hearing from investors just to going some of the previous question is that investor really want to understand and to figurate your top line organic slowdown and expect acceleration further than they have done so far. So just thinking on that a little bit can you tell us kind of what your precise number what percentage of deceleration category in yours would you attribute to macro versus kind of one time like in France versus competition and if you say the bulk is not competition like I think you did to seize the question. Second ago I would want to know that the list of countries you are losing share has grown so Mexico, India, China, France, U.K. now over the years it's definitely grown and as you look forward what you are expecting to change from either macro or competition or one time to see the top line acceleration or is it really just your own activities to improve and get deceleration?

Yes, I mean just aggregating all of that, I mean particularly the competitive activity piece is almost impossible. And in fact, we don't break it down that way. So the largest change that shapes our top-line projection for 2017 was the reduction on category growth, the lessening in category growth that we are seeing that we have simply re-planned against and we see our top-line growing for the reasons I have said. When you come to the competitive activities the kind of shares you are talking about is I mean take Mexico which I think John talked to our share is about 81 and in the prior it was just over 81 that's on a value basis. Our market shares in general Ali, if you go through them if there are slippages they are quite modest slippages and they are not accelerating in any way with the exception of the French matter on Colgate that I just described. So I mean what we think will build our business is innovation, is the advertising that we are committing to including the in-store advertising but with a commitment to the brand advertising and the manner that I have described. A focus on the fundamentals that at retail and I think from a competitive activity point of view we will be responsive where we need to be responsive from a competitive point of view but we don't want to do it in a zero sum game fashion.

So that's helpful. Thank you. The reason I am well maybe what’s behind kind of the question I had got a little bit is that if you really been able to leverage even the lower end of the 4% to 7% organic sales growth target that you have been delivering, question for the past few years the lower end of that, into double digit EPS growth ex-currencies. But for 2017 it's surely doesn't seem like that is something you are able to do suggesting you are going to have to spend more back and I am trying to kind of get underneath that in terms of but you’re not getting those details for this year but your top-line is roughly you are saying what it's going to be well what it has been so you are spending more back why? Right so is it that you are feeling when I’m buying on China being more aggressive Procter or PATANJALI whoever have you lost a little bit of the mojo, like why are you spending more back if it's not competition I guess what I am trying to get at? A – Ian Cook: I guess the answer would be and I think what we are beginning to see through this earning cycle is that growth in many places has indeed slowed further. And so, what we are saying is what is a reasonable growth objective in uncertain times and how do we ensure that we build our brands to deliver that growth at this unique point in time. And so, we are saying I mean I think the gross margin expansion is quite strong. I think from a top-line point of view organic sales growth at the low end of our range will certainly put us in a good comparison group and the focus on the restructuring that I mentioned earlier and further driving down on structural cost will equip us to be leaner going forward if this rate of growth in the will doesn't reaccelerate and so I am saying we are saying that we think it is right at this point in time to overweight focus on growth and but it is growth of our businesses at a time when sure all competitors are looking to do the same thing in a slowing world everyone is still looking to grow. So from the big picture point of view it's always a competitive environment what I am trying to delineate against is we believe in the quality of our innovation to drive our business against competitors when I talk promotion it's more in-store pricing promotion which we would rather put against trial for new innovation but we will be competitive where we need to be competitive and I think that's the year we are looking at.

Okay. Thank you very much.

We will go next to Nik Modi of RBC Capital Markets.

Yes. Thanks and good morning. The question is on category growth. So can you give any context of clarity on in fact what’s driving some of the down drop in the category growth? Is this trade down? Is this frequency? Is it inventory outside of obviously which you talked about South Africa? Any context around that would be really helpful?

Yes. I think there are few elements to this. And it's not a generalized statement for the world. Obviously, there are – there in some parts of the world particularly Europe deflation as pricing comes down to stimulate volume in some categories we have seen that for several years and that remains unabated. From a consumer behavior point of view, they don't go away from the behavior of brushing their teeth. They will exhaust pantry inventories so which is to say people have more than one toothpaste at home they may try and scratch that tube before they reload their own pantry. There is as we have seen sort of a subtle inventory correlation to a slowdown in categories. So these are all components factors I mean from the pent off study Colgate is in two thirds of the households on the planet and we are very disciplined and very focused on in making sure our in-home penetration stays that elevated levels. So if there is any sort term slowdown from a volume point of view due to pantry destocking in the like that will bounce back afterwards. So, I wouldn't point to anything Nik that says there is down the line behavioral change here that is of concern.

We will go to our next question from William Schmitz of Deutsche Bank.

Hi, good morning.

Hi Bill.

Can you just bridge the gap between the old sort of 10% local currency EPX as growth to five because maybe a point of it is some sort of category growth but where is the other 4% shortfall coming from the follow-up?

It’s foreign exchange Bill, I mean the two principal elements are now this is against the preliminary guidance we gave in October to where we are now so it is simply the foreign exchange and the lower category growth which is reflected in our growth target for the year. It's those two things.

I thought before 10% local currency growth and it seems like the implied guidance now is 5% local currency growth. Am I incorrect?

No. No. sorry I was misunderstanding. no. no. the implied currency guidance is 5% and that is structurally driven by the income statement I mean the growth we have the margin expansion and the investment we choose to make behind the business.

Okay. Was it not 10% before? Am I off? I thought it was like you thought 10% local currency was the right number and now it's five.

Yes. It was 10% in -- now. And we are saying that the two differences are foreign exchange and volume.

We will take our next question from Olivia Tong of Bank of America Merrill Lynch.

Thanks. So, on the advertising margin change because is your view to get back to sort of a historical levels about 100 basis points higher as a percentage of sales and where you said now because assuming there isn't something really different below the line it would seem to suggest the fairly move upwards in operating expense to our outlook, your EPS outlook and then on the other hand it turns out that you need to spend more to drive top-line improvement how willing are you to do that if it does end up impacting EPS?

I think for 2017 we have stepped up our advertising quite meaningfully from 2016 and we believe in uncertain time with clearly slowing category growth with the innovation pipeline we have it is to our advantage in 2017 to invest that advertising deliver that growth and keep consumers with our brands. So we think it's a good level Olivia I mean we have planned due diligently and we are very satisfied with the advertising level we have as I said it includes a sharp uptake in sampling as well. And these are all into the programs that we have on the ground behind brands and the new products that we have. So we think the plan holistically is an appropriate plan for 2017.

We will go to next to Jonathan Feeney of Consumer Edge Research.

Good morning. Thank you very much. Just a couple of questions. First on Hill, some work around the channel it looks as we have been hearing anyways that at least one of your brands has been dealers in yield one maybe fall through as a major specialty channel but also hearing that there is some innovation on the pipeline potentially so any comment you could make around the Hill business as it relates to that new products or just progress there I would appreciate it. Secondly, in India I know great business for you historically you mentioned the behavior doesn't really change and it's quite a bit of inventory in anybody pantry of Colgate product. Does this mean that you are going to restock in India and you get better performance at this point in the next six months? Thank you very much.

On your second point, I would love to think so Jonathan but I wouldn't count on it. The purpose we have in India right now is simply rebuilding the pipeline over the first half of the year if we get a rebound then wonderful. On the Hill let me sort of paint a broader context here. The strategic decision that we have taken based on consumer behavior is to keep our brands specialty which is obviously a brick and motor channel and go where our consumers are going and our consumers are going e-commerce. And they are going to the traditional places you would expect, the Amazons and the [indiscernible] of this world and their rate of adaption of buying our products on e-commerce is very elevated so we are moving there. The brick and motor retailers that you principal pet specialty retailers we have not been delisted from either retailer. We have good plans with one and we are in discussion with the other and the one short term difficulty we have with the second retailer is that our shelf location and the number of SKUs we have in the store have been both reduced and moved to another position. And we believe that we can together develop a win, win solution for that to rebuild the business in the brick and motor at the same time as we are driving it online and on Hills innovation we have considerable innovation in Hill's for confidentiality reasons I prefer not to talk about it but that's the story on Hills in the U.S. John.

We will go to next to Lauren Rae Lieberman of Barclays.

Thanks. Good morning.

Good morning Lauren.

Two things one was just on the two and half things the conversation around category growth, Ian it was great when you walk through kind of your outlook by broad region but I am not sure with the changes like you asset to Europe at flattish number market of 5 kind of feel like where we have been so I am just curious what’s change. Second thing was on the build from kind of double-digit in dollars to lose single digit in dollar for EPS, Fx and volume, is it more pricing because I am hard pressed to think that you were previously forecasting volume growth as six and now it's four given you said it's going to be more volume than price leading so it is your outlook on pricing perhaps has changed more than volume. And then, finally just SG&A was actually up quite a bit and I was just curious on the percentage of sales, given your commentary on focused on restructuring and taking cost out was there anything particular in the quarter on SG&A to be mindful of? Thanks.

Yes. So on the category growth yes it has changed actually Lauren. In the U.S. we were seeing two to three and you may remember me commenting I was getting widely exuberant that it was moving to three so that has now come down by a percentage point. Europe was always flat to modestly up. The range of Europe is now negative to modestly up therefore flat overall. And in the emerging markets well I used to talk mid single digits the reason I talked 5% now is the single included a number with a six in front of it and that is now off the table. So those shifts are real and that is what is build into our planning. So, if I go back on your second point if I go back to our planning, indeed is it is all volume because pricing is more or less at the same level we had in the original plans slightly higher in fact. So it's all volume. And then, finally your point on SG&A up that's still a leverage. So deleverage rather the actually a dollar overhead is down but with the impact on the top-line and the amount of dollar denominated over, we have we don't benefit from a ratio basis which is why we talked about relentlessly focusing on our cost structure in this last year of the restructure, I think those two or three questions.

We will go to next to Jason Gere of KeyBanc Capital Markets.

Okay. Thanks. I will just make this really quick. I guess first just in terms of the re-acceleration on the volume. Can you maybe talk a little bit about how excited you are about some of the innovation coming out? I know there is innovation every year but certainly with this kind of 1.5% volume which in the third quarter put aside challenges of the fourth quarter but sounds like you are getting back to 3% range. How much of this can you contribute to really the innovation the step up innovation what’s coming out with obviously giving away any trade secrets and then the second question just on pricing being just a small contributor this year can you just talk maybe about where you are still taking pricing? I know a lot of it is roll over from last year, maybe how we should think about Latin America contributing versus where you are still going to have price investment such as Europe so obviously the two will offset each other just on the grey. Thanks.

Yes. The trouble is that Jason, if I was to display enthusiasm you wouldn't notice the difference. So in terms of volume acceleration re-acceleration part of it is building back from the onetime events that we mentioned. So that’s an important part of it and the strengthened plans we have in place as I detailed earlier and innovation is the strong part of it. We tend to be fairly low key in terms of talking about innovation and I plan to continue that tradition but John mentioned some I would just say we have a broad array of good innovation and we will be driving that starting in the first quarter across the year but I wouldn't lay innovation as the out-sized re-accelerate growth in the first quarter. It will part of it but it certainly won’t be all of it and on pricing I mean I think the way you should think about it is that in the main, much about pricing has been to offset the transaction impact of foreign exchange and therefore you can assume that the pricing taken or being deployed now is in regions that says face those kinds of challenges but I repeat our focus for 2017 is on growth and our focus within growth is on profitable volume growth.

Great. Thank you.

We will go to next to Linda Bolton Weiser of B. Riley.

Yes. Thanks. I just had a question of on the pet care area. Can you just explain why the e-commerce penetration is higher in Europe? Is it just as the brick and motor is less developed there or is there an actual difference in how consumers are approaching the market? And then, secondly can you explain if does the trend towards immunization, is it disconnected from the general economic strength and high consumer confidence like in the U.S. in the pet care or is it actually linked to it? So as the economy strengthens is it actually easier to get premiumization or get consumers interested in spending more on their pets in the U.S.? Thanks.

Yes. Frankly Europe and I don't mean anything political by this, Europe is a smaller geography than the U.S. and more urbanized and when you think of the literal volume of those bags the convenience factor for e-commerce in Europe is much higher for the consumer and that is the big driver of why the adaption for bulky products is so high. And premiumization look people pay for value and what they perceive as value is not just price. And therefore, and we have said this before the reason your focus is on innovation is to create value that the consumer believes is good value even if the price is a premium price to what he or she may otherwise buy.

We will go next to Stephanie Benjamin of SunTrust Investment Bank.

Hi, this is actually Stephanie on for Bill Chapel, just a quick question. Do you really expect any impact to your pet veterinary business from the recent mars acquisition of BCA? Thanks.

I think the short answer is no. You may know that Mars also own another group called Banfield we have very strong shares in both BCA and Banfield with that Hill's business Mars have said, they’ve owned Banfield for coming on a decade Mars have said that they will let BCA run as an independent group and you should know for BCA pet nutrition products are about 5% of their sales. So that's not really their business. So the headline answer would be no.

We will go next to Mark Astrachan of Stifel.

Yes. Thanks. And good afternoon guys. I wanted to ask about growth by category sort of a different way versus what we were talking about from country standpoint. Anything notable specific to home care, personal care, oral care in terms of your own expectations and perhaps even so how are you thinking about that now versus maybe three to six months ago and then just quickly on something different expectations for spend in EPS. How are you thinking about the assumptions for category and competition meaning your expectations for the increased ads spend out in the percent of sales, is that assume the competition is greater than equal or less than where you were in 2016 will be helpful?

Yes. In terms of your spending question I mean that's a very complicated question. We build spend based on what we see by market from competitors. Now these days you don't see everything because some of the online spending is not tracked. So there is an estimated components of it. And so you structure the spend to be adequately competitive. I am not talking the traditional advertising spend. And as I have said we plan it then to be continuous for the year behind innovation, behind the brand and sometimes behind our community programs where you see the greatest short term changes and I commented on North America is more in promotion than in the traditional advertising. So, we have built a plan for 2017 that we think is adequately competitive and strong enough to drive the innovation we have and the brand equity is that we have around the world. Now when you get into categories we have a very clear strategic view which doesn't change depending on what happens in a quarter. So our strategic view is that we focus in order of priority behind oral care, pet nutrition, personal care, and home care in that order. That has been our focus because of the continuing underlying growth rates of the categories even if they slowed and because of the margin profile of each of the businesses. So our category decisions strategically are informed by the categories not by quarterly events.

We will go next to Jason English of Goldman Sachs & Co.

Hey guys thanks for squeezing me in.

Hi Jason.

Happy Friday to you.. Quick question on the Africa-Eurasia distributor I thought you had to work through I apologize I missed in prepared remarks but I don't think I heard a lot of detail. Can you walk us through what happened there? And then second question is on capital allocation. Your share repurchase activity was a bit less – a bit more this past year. You are sitting on more cash than usually and you are –

Let me talk again about Africa-Eurasia. It was distributor issues with a select number small number of distributors. It had to do with liquidity because cash liquidity because of foreign exchange moves and it was moving business away from distributors and indeed bringing back some inventory. I guess the tailing point about we made in our prepared remarks was that the division growth would have been positive from an organic sales point of view without that event and that we expect organic sales progress to recommence in the first quarter of 2017. Relative to capital allocation it our current thinking going into the year is that our share repurchase will be broadly in-line with the share repurchase since we made in 2016.

At this time we have no further questions.

Okay. Well good afternoon to everyone and to any of the Colgate people listening we are in the first quarter. Thank you.

That does conclude our conference for today. We thank you for your participation.