Good day, ladies and gentlemen, and welcome to The Clorox Company Fourth Quarter Fiscal Year 2014 Earnings Release Conference Call. At this time all participants are in a listen-only mode. At the conclusion of our prepared remarks we will conduct a question and answer session. [Operator Instructions] As a reminder, today’s call is being recorded. I would now like to introduce the host for today’s conference call, Mr. Steve Austenfeld, Vice President of Investor Relations for The Clorox Company. Mr. Austenfeld, you may begin your conference.

Thank you. Welcome, everyone, and thank you for joining Clorox’s fourth quarter conference call. On the call with me today are Don Knauss, Clorox’s Chairman and CEO; and Steve Robb, our Chief Financial Officer. We’re broadcasting this call over the Internet, and a replay of the call will be available for seven days at our website, thecloroxcompany.com. Let me remind you that on today’s call, we will refer to certain non-GAAP financial measures including, but not limited to, free cash flow, EBIT margin, debt to EBITDA and economic profit. Management believes that providing insights on these measures enables investors to better understand and analyze our ongoing results of operations. Reconciliation with the most directly comparable financial measures determined in accordance with GAAP can be found in today’s press release, this webcast’s prepared remarks or supplemental information available in the financial results area of our website, as well as in our filings with the SEC. In particular, it may be helpful to refer to tables located at the end of today’s earnings release. Please recognize that today’s discussion contains forward-looking statements. Actual results or outcomes could differ materially from management’s expectations and plans. Please review our most recent 10-K filing with the SEC and our other SEC filings for a description of important factors that could cause results or outcomes to differ materially from management’s expectations and plans. The company undertakes no obligation to publicly update or revise any forward-looking statements. Turning to our prepared remarks. I’ll cover highlights of our fourth quarter business performance by segment. Steve Robb will then address our financial results and financial outlook for fiscal ‘15 and finally, Don will close with his perspective on the business followed by Q&A. So, starting with the fourth quarter, including the impact of negative foreign currencies, sales decreased to…

Well, thanks Steve and welcome everyone. In the fourth quarter, the company delivered diluted earnings per share from continuing operations of a $1.30 versus a $1.38 in the year ago quarter. This quarter’s earnings per share results reflect $20 million of incremental demand building investments as we stepped up our efforts to revitalize our categories and grow our market shares. While it’s going to take time to realize the full impact of our investments we began to see improving share trends in the fourth quarter. As we look to the fiscal year 2015, investing in our brands and categories remains a tough priority. Now I’ll review our fourth quarter and fiscal year results in more detail and then discuss our outlook for fiscal year ‘15. In our fourth quarter, sales were down 2%, reflecting nearly three points of negative foreign currency impact and about a one point higher trade promotions spending, partially offset by the benefit of nearly two points of pricing. On a currency-neutral basis, sales grew a 0.5 percentage point. Gross margin for the quarter declined a 170 basis points to 42.3% compared to 44% in the year ago quarter. The biggest factors contributing to the gross margin decline were about 240 basis points of higher manufacturing and logistics costs and about a 110 basis point of higher commodity costs. For perspective, included in this quarter’s manufacturing and logistics costs increases were more than a 100 basis points of one-time expenses, including higher supply chain costs in order to meet stronger than anticipated customer demand for our charcoal products. These factors were partially offset by about a 110 basis points of cost savings and about 80 basis points of pricing. In the fourth quarter, the company invested in incremental $11 million in advertising spending, an increase of more…

Okay. Thanks Steve and hello everyone on the call. As I reflect on fiscal year ‘14 obviously was a challenging year not only for us but I think the industry in general and our results were significantly impacted as we’ve talked about by the negative impact of foreign currencies about 2.5 points there, price controls in the high inflation markets and softness in our U.S. retail business as people spend more to be competitive and take dollars out of the category and force the commodity cost increases which we do see mitigating somewhat in fiscal ‘15. Now, while we’re disappointed with those results, I mean a pretty tough environment out there. I do feel good about the progress we’re making on our priorities to build back market share get our categories back growing again and get on course to achieve the 20-20 strategy targets. As we said many times and we talked about this in October at the Analyst Day out in pleasant and we’re focused on three growth pillars, our U.S. retail business which is about 75% of our business, our professional products business which makes up about 5% and then of course international which contributes about 20%. Let me take you through a little bit of performance review against those three legs of our stool. So, starting with U.S. retail, as has been mentioned FY14 sales were about flat with lower sales of Clorox Disinfecting Wipes due to the loss of distribution as Steve noted that one of our key club customers. That was offset by gains in the charcoal business. Now that said, we’re going to continue to invest behind our brands as Steve just noted we’ve invested nearly 10% of U.S. retail sales in advertising and sales promotion with total company spending for advertising and sales…

Thank you, Mr. Knauss. (Operator Instructions). Our first question comes from Jason English of Goldman Sachs. Jason English – Goldman Sachs Group Inc., Research Division: Quick sort of housekeeping item. Can you give us the magnitude of the incentive compensation cuts back at the envelope I am getting to around $40 million maybe headwind next year to reload that’s almost $0.20 of EPS. Is that on the right ballpark.

That is right. That’s a pretty close number in terms of the headwind that we’ve got it’s actually a little bit higher than that but that’s pretty close. Jason English – Goldman Sachs Group Inc., Research Division: Thanks for that. And then Don a question for you in terms of brand building A&P support, you run it right at the very bottom of that 9% to 10% target and if we look at A&MP it really hasn’t sort of barged in the last four or five years you’re suffering weaker categories share hasn’t been great. Do you see a need to kind of really up the investment here and throw more money at it to try to get this going?

Yeah. I think we do Jason and I think one of the prove points is that $20 million that’s now in the base for the fourth quarter then the additional more than $30 million we’ve added incrementally into fiscal ‘15. I would say this to Jason we compete in some categories where private label is the primary competitor. We have brands that are spending north of 15% in terms of marketing consumer promotion and advertising spend. So we get a little bit lost in the averages here. But to answer your question, clearly there is significantly more support in the fourth quarter of ‘14 and throughout ‘15. That will be baked into the base as we go forward. We’re striving to get an additional full point and as we go towards the 20-20 strategy. And I would say that in those categories where we compete primarily was private label. We’ve got a 100% share of voice. And we’re seeing two of those three categories now we’re private label as loss share in the last quarter. So bleach we’ve gained share of two quarters in a row, private label is loss share, charcoal we’re gaining share again private label losing share. To add we’ve lost some share but we’re finally seeing private label come up and start to match the price increase. So yes, a lot more spending going on if you will and we’re putting it on those brands that needed the most. Jason English – Goldman Sachs Group Inc., Research Division: Got it, thanks a lot. I’ll pass it on.

Okay.

The next question comes from Steve Powers of UBS. Stephen Powers – UBS Investment Bank: I guess on the same them, Steve or Don I guess of your total demand building spend at this point. Roughly how much is devoted to advertising versus trade spend and how is that changed over the years or it has?

That ratio Steve is fairly even although it’s probably in the 45-55 range in terms of 40 I’d say low 40s to mid-40s on advertising and consumer promotion and the rest being trade.

Yeah let me just build on Don’s comments. We spend about a $0.5 billion a year in advertising and consumer promotion. We spent a bit more than that as you would imagine on the trade spending they go through. So I call it a 60-40, 70-30 split with an emphasis on trade. I think importantly as you look forward to fiscal ‘15, you will see us ramp up the level of demand building investment. We’re going to focus that investment on the vehicles and offer the highest returns. So you’ll likely to see some of that flow into trade spending and some of that flow into advertising and consumer promotions. Stephen Powers – UBS Investment Bank: Okay. Thank you for that. And I guess shifting gears towards Venezuela which you commented upon maybe Argentina as well any updates there. But Venezuela specifically, can you just define a bit more about how much pricing you’ve assumed and if you can or can either way. In your respect of the as the likelihood of pricing gone up down or remain unchanged since April. So I guess sense for your comment at some point, if you don’t get the pricing kind of what the magnitude to your guidance would be or whether or even would come to that it sounds like you’re open to that as you say kind of all options. So at what point would you just decide to exit altogether.

Okay there is a lot of questions embedded in there. Let me take a try at this. So first, as a reminder Venezuela in terms of sales is a little less than 2% of our sales. Looking forward, based on the most recent devaluation that we saw earlier than this calendar year, I would say the business is probably about a little more than 1% of the company sales. We are losing money in Venezuela as I’ve said for quite some time. I think we’re reaching, rapidly reaching the point where we just have to get pricing. You cannot have double-digit inflation going year-after-year and not get some level of pricing. We certainly requested the pricing, I think we’ve had a constructive dialogue about that pricing. But the reality is we haven’t got anything yet and I think we’ve reached the point with the deterioration of the economic environment, the lack of pricing where all options are on the table. I don’t want to get into the level of pricing, it has been assumed at this point or speculate on what the company may or may not do. Other than to say that we will always do what’s in the best interest of our shareholders, but I think it’s prudent at this point to look at all of the options and that’s exactly what we’re doing.

And let me add a little more color to the Steve too. I think in some ways Clorox is a bit uniquely disadvantage in Venezuela. When I look at other CPG companies in Venezuela I can’t find another one where almost two-thirds of their portfolio has been under price controls for almost three years. So it puts us in a bit of a unique spot. I would say to your question do we feel more optimistic, less optimistic? Three months ago we felt more optimistic. We had verbal commitments on pricing in early June that pricing has not been published as of today. That pricing was near what we had requested and I think what other companies have requested. I think the government understands the situation we are in and other companies are in that in Venezuela. But as Steve said, given the operating loss we’ve sustained there over the last 18 months, this cannot go on too much longer before we have to take a decision on what we ultimately do with that business. But I would say today, based on the performance or based on the lack of publishing of that pricing that was verbally agreed to. I’d say I’m more pessimistic than I am optimistic about getting that pricing. Stephen Powers – UBS Investment Bank: Okay, thanks a lot. That’s very helpful.

Thank you.

Next question is from Olivia Tong of Bank of America Merrill Lynch. Olivia Tong – BofA Merrill Lynch: Thanks. On cost savings 110 basis points still solid clearly, but that’s a bit like relative to your typical run rate and you obviously reiterated next year. But what caused the deceleration and the cost savings progression and did you already expect that.

Yeah so Olivia actually we’re coming off of a record cost savings here in fiscal ‘14. The 100 basis points that you’re referencing is the cost savings that flow through gross margin for the quarter. If I just step back and I look at the year, we delivered probably two full points of margin improvement from the cost savings program. Now about a 140 basis points of that flow through of the gross margin but we also had some additional cost savings flow through selling and administrative expenses and other lines of the P&L. So there has not been a deceleration of the cost savings program, the savings are just flowing in different parts of the P&L. I would also just echo that looking forward we continue to feel very good about the 150 basis points of cost savings. Although again as I’ve said many times before, we’re going to look at every line of the P&L. Some of that will go through the gross margin probably with most of it but some can also flow through other lines of the P&L including our SG&A costs.

Olivia the one other thing I would point out is the fourth quarter for us is our largest sales quarter of the year. So although dollar amounts can vary by quarter. You could have consistent dollar performance from a cost saving standpoint in the fourth quarter but have lower basis point benefit just because of the higher sales. Olivia Tong – BofA Merrill Lynch: Got it, that’s really helpful. And then in terms of the businesses. Cleaning it looks like it actually rebounded a bit relative to where you stood in Q3. But households swung down. So how much of that would you attribute to Glad pricing which it just takes a bit of time for that to sort of flow through and you’ll see some buying degradation in the interim versus something that’s a little bit more systemic like the Cat Litter under performance.

Olivia I think you picked up on it. A great portion of the decline in household was due to Glad. And I think I mentioned in my comments, that was something we’d anticipated, we checked the price increase in March. We saw a little bit of accelerated purchases from our retail customers and so coming into the quarter we knew that Glad volume would be down. I don’t think you’ll see that continue to same extent as we move into fiscal ‘15.

I think Olivia now that we’ve seen pricing at some of our largest customers being matched from our branded competition as well as private label starting to move up in most customers. I think we’ll see the glad volume decline start to mitigate now. And in the quarter Charcoal almost offset the entire Glad decline. So I think they’ve played kind of a counter balance, but I think we feel more bullish going forward that the pricing is starting to get matched. Olivia Tong – BofA Merrill Lynch: Got it, and then just lastly in light of Procter’s announcement this morning about pairing back their portfolio. Can you remind us what your M&A priorities are other than obviously getting bigger in the professional business. Are there certain categories that you are more interested in and of course we know about the professional but in the consumer facing business. Thank you.

So we continue to be interested as you said in professional we think that’s an attractive space. We’re also interested in U.S. centric consumer packaged goods companies. We love natural personal care we think that’s interesting. We did a very small acquisition obviously in food additives [sweetening] which is a sauce. So I think any of these mid-sized categories that have good tailwinds attractive margins, U.S. centric would be particularly attractive for us. So, certainly as they look to divest brands it will be something that we take a hard look at as a company to see if there is something that we might be able to extract cost synergies on and accelerate the growth of the company win. Olivia Tong – BofA Merrill Lynch: Thanks guys. Appreciate it.

Thanks Olivia.

The next question is from Ali Dibadj with Bernstein Research. Ali Dibadj – Sanford C. Bernstein & Co., LLC.: Hey guys. So you and a lot of your CPG players do you have a common theme of incremental demand building some people call it different things, the incremental demand building. And I’m trying to understand underneath it why is that necessary right now so clearly there are many drivers consumer macro other competition rates of the bottom type stuff. So just trying to understand why number one. And then how do you think about the returns you’re getting from the incremental demand building both trade and advertising. And Don maybe if you could chime in at some point about that question given your past experiences in carbonated soft drinks and there I think, they are starting to realize that you got to push more on price mix collectively because the volume just isn’t there and I wonder sometimes especially with your private label competition, why that isn’t that going to be more of the case here or to?

Yeah. Let me start Ali and then I’ll ask Steve to jump in as well. I think why it’s necessary I think is to get stronger communication and delivery at shelf on the value of our brands quite frankly I mean we’re calling FY15 for example the year of value for Clorox. And when you look at the value communication, the fact is what we’re doing is an effective job of that like in bleach amount for example like we’ve done in Hidden Valley even though it’s largely most our highly priced premium product we have. We see the positive share results I think the other thing is why it’s so, one reason is just the consumers empowerment if you will and the consumers ability to understand what the best value is out there, and we’ve got to be competitive with that value communication and value delivery at the shelf. The other thing is in the last year or year and a half, we’ve seen a lot more competitive intensity in the U.S market as other multinationals have been focused on this market. So just the level of competitive intensity is there. Third, I think the retailers need to get traffic into the stores, they continue to push their own retail brands harder. So to be competitive, I think the branded manufacturers have to push their innovation harder and push their own marketing harder as well. So it’s kind of a combination of all those reasons that we think it’s necessary and you know we’ve got and I think this is true of most of our competitors we’ve got a pretty sophisticated return of investment models that give us a really good indication of we’re going to getting a return on that investment or not. So I think, but those are the three reasons that I see all day out there, why that incremental spending is necessary and I don’t think when I think about our spending relative to our competitors, I think we’ve been very efficient with our spending anyway.

I would just echo Don’s comments and say if you go back to the 20-20 strategy we had as a company, one of the things we indicated that we wanted to do was to spend an incremental point of sales in our demand building investment programs. I think what we’ve seen over the last years we’re just going to accelerate that so we’re going to put that point in a little bit faster and a little bit harder than we had originally anticipated, but we’ve got very sophisticated tools, we know that when we put a certain amount into trade, we get a pretty nice lift and when you start to emphasize things like feature and display and doing those things together the brands tend to respond very well. The advertising it’s getting a lot harder hitting, we’ve got some pretty good score in advertising that we’re bringing to market and we think again investing behind that makes sense. So these are smart investments they are consistent with our long-term goals and objectives and I think we feel very good about. Ali Dibadj – Sanford C. Bernstein & Co., LLC.: So this is helpful because I always wonder about the marking ROI sophistication, are sophisticated. I am not as sophisticated and all I look at reported results and I don’t see it right so I’m just kind of?

Well, let me give you a few proof points Ali because I think we do have a few. If you look at Bleach we said over a year ago that we would get back to Bleach share growth I mean clearly in the last two quarters we have seen share growth return. We said the same thing on Wipes we said once we got into the June, July period we’d start to see share growth. We’ve had much harder hitting advertising on Wipes, comparative advertising on Wipes and on Bleach. And our packaging is much more declarative on our Wipes business and our Bleach business. So I think where we’re making this focus I think we’re starting to see the share growth that we promised our investors that they would, that we deliver. So I think there is a proof points out there, I think another one is Charcoal, I mean we amped up the spending there and we started to see share growth come back in the Kingsford brand as well. So I think there is a proof points out there that say it’s working. Ali Dibadj – Sanford C. Bernstein & Co., LLC.: Okay. That’s helpful. And two quick ones. All in one manufacturing logistic costs, can you give us a little bit more detail about that being negative 240 and then I guess the 100 which is the one time on Charcoal, so any details there and then I know it’s Green Works pricing up 21%, I’m just curious about that? Thank you.

Well let me start with the manufacturing and logistics cost, because the fourth quarter gross margin was a bit disappointing in one of the biggest surprises I think for us is and it’s a good news, bad news story. Good news is our Charcoal business was a whole lot stronger than we had anticipated, but to meet that consumer demand and what the retailers were asking for we had to redeploy a lot of inventory across the United States and we encouraged some incremental manufacturing costs that cost us a little over employed. We’re happy to have the growth, we’re happy to have the business, we should hadn’t hurt gross margin as much as it did, but it’s really as one time in nature. And I certainly think as we look at our gross margins on a go forward basis, I would not have people take this 240 basis points of manufacturing cost and project that forward. I think it will continue to be a headwind but it’s going to be a headwind consistent with what we’ve seen, which is probably a bit north of a point, but certainly not the level we saw on the fourth quarter.

On Green Works Ali, we’ve had one of our national top 10 mass customers really recommit to that brand and starting in July, we’ve got depending on the region of that customer, we’ve got 10 to 12 new use SKUs of Green Works into that account. And we think that accounts customers line up perfectly with the Green Works brand consumers as well. So we expect good things out of that so that’s what you’re seeing is that initial bump as we go into that customer in a big way. Ali Dibadj – Sanford C. Bernstein & Co., LLC.: Thanks very much.

Okay.

The next question is from Bill Schmitz of Deutsche Bank. William Schmitz – Deutsche Bank AG: Hi. Good morning.

Hello Bill. William Schmitz – Deutsche Bank AG: Hey on the S&A side I know you guys are 14% of sales in 2015. Why isn’t that coming down because obviously question before but you know it’s just a function of lower sales growth I know you’ve all this rate ongoing productivity programs in place, but it sort of stay stubbornly in that 14% level? And then I have a follow up.

Yeah. I think if you go back a couple of years Bill I am actually feeling very good about the discipline we’ve applied to our SG&A cost because at one point I think just a few years ago it’s about 14.6% of sales fiscal ‘13 I remember it was 14.4% obviously this year we got down to 13.7%, but there is two challenges we face as you look at fiscal ‘15. Number one is we’re going to bring these compensation accruals ideally the comp programs payout closer to target levels. So that’s going to put some upward pressure on SG&A cost. The other challenge is just inflation particularly in some of our international markets. Now all of that said we feel very good about the cost savings programs and the productivity programs and so we think that should enable us to offset some of these and net-net we should be at about 14% in fiscal ‘15. And our goal is to get as you know is to get there to 14% ideally less and then take some of those savings and reinvest it back in the business. So I would say we’re very much on track with a multi-year plan to get this to 14% or less.

Bill I think having to reinstate north of $40 million in incentive comp puts a big rock to hurdle and so I think when you think about it going from 13.7% to 14% that’s about $15 million of increase and we’re offsetting over $40 million of comp. So you can rest assure there is some real productivity in there. William Schmitz – Deutsche Bank AG: Got it. No, that’s helpful. And then can you just clarify on the Wipe side you said market share was up, was that just Nielsen or is that include some of your panel data on cost gong some of the club stores?

The nine tenths of a share point gain Bill was in the multi-outlet data, we get are syndicated data which covered about 81% of our volume. So yeah it was a syndicated data. William Schmitz – Deutsche Bank AG: Got you. If you do a stab at that I am sure get – the panel data sort of back in I mean is it flat, is it up you know if you included everything in Wipes?

Yeah it’s hard to say we’ve made up about 35% of anything we lost in that one customer already. So I’d say we’re probably flattish to down slightly if you add them back in, we’ll see how they net out on that experiment as we get through the rest of this year. But what has happened is we’ve picked up distribution in a number of key customers and so that’s enabled us as I said to replace about 35% of what we lost in the first five months or already five months into this, we’ve replaced about 35% of it but on the 81% that’s covered we’re feeling very good about almost the full share point of growth. The interesting thing to Bill if you look at the data if another folks look at the data as we gained share back in the Wipes category the category growth rate accelerates and I think that’s what the retailers are looking at. So for example if you look at the last 52 weeks the category this is ending July the category was up about 13 weeks as we started to gain share it’s up almost 6. So as we gained shared and get back into the game so to speak the category accelerates which you would expect when you get almost a 50 share brand its premium priced. William Schmitz – Deutsche Bank AG: Got you. And then you guys historically when a brand is troubled you sort of when you promised to fix do you fixed it so would you commit to turning Cat Litter around and gaining market share over the next 12 months?

Yeah. That’s certainly in our croziers Bill is that by the time we get into the second half of the fiscal year we want to see much more positive share gain, stabilizing share gains on Litter. I think the initiative with Lightweight starting to ship into two weeks and then you’re going to see revised packaging, you’re also going to see a lot more, what I guess I would call little eye innovation on Litter as we go forward. So, clearly as we get into the second half of ‘15 we expect to see some real improvements in those share results on Litter. And you know it’s interesting Bill to about 45% of our share loss on Litter in Fresh Step in one customer so, we are on it. William Schmitz – Deutsche Bank AG: Okay, great. And then Steve on last one so the leverage ratios are in two turns now I mean it seems like there is not a lot of do really with the cash so, are you contend letting that ratio continue to lied down?

We are going to continue build on what we have been doing which I trying to be disciplined with the allocation of cash. Today what we have been doing last year we had bought $260 million back of shares and obviously increase the dividend 4% I think you will continue to see us focus on keeping a healthy dividend we will probably periodically go back into the market and repurchase shares for no other reasons and then just to offset stock option dilution I think beyond that if cash builds up I am going to look for ways to get that back to the shareholders, the one thing I would remind everyone we do have $575 million worth of debt coming due in January of 2015 so, that’s also something we need to plan for and think for over the next six months. William Schmitz – Deutsche Bank AG: Great, thank you so much.

Thanks Bill.

Our next question is from Chris Ferrara of Wells Fargo. Christopher Ferrara – Wells Fargo Securities: Hey, guys can you I am sorry if you did already but can you just talk about for what fiscal ‘15 what you think the breakout will be on the organic sales between the volume and price?

We do expect we haven’t actually given that specific breakdown but would say that we are expecting positive volume growth in the year and we are expecting a modest level of pricing primarily coming at of our international markets to deal with some of the higher inflationary environments. We did fix some pricing earlier this calendar year on Glad we took about a 6% price increase that I think as Don and Steve had mentioned we have seen certainly the branded folks have followed, private label looks like they are beginning to. So, I think you are going to see a mix but certainly we are expecting positive volume growth more leaning towards the second half of the fiscal year as we get more traction on some of the demand building investments and the innovation. Christopher Ferrara – Wells Fargo Securities: Got it. Thanks. And I guess on other note last quarter you ran the one-time balance sheet devaluation like the balance sheet charge, write down of asset charge that happened from the Venezuela and deval through your core numbers right to get to the 106. And I guess I know you are assuming SICAD 1 for 15 but you are not necessarily assuming SICAD 1 stays at 11. But I guess the question do you have incremental balance sheet devaluation running through your P&L baked into the fiscal ‘15 guidance?

Yeah, so without getting in again too much detail because there is a lot of synergies that we’ve obviously run here what I would say is that we are assuming number one that we continue to use SICAD 1 as the exchange rate mechanism and then second, we expect that there will be as you say ongoing devaluation what we have not assumed in the outlook is that we got to SICAD 2 which again from a perspective SICAD 1 is at about 10.8, SICAD 2 is closer to 50 so, expect them to devalue SICAD 1 but we expect it to happen over the course of the year and you know I think we have to get into the year see how this palace out there out there has been some discussions about moving to a unified exchange rate at call it 25 to 30 and the only thing we know for certain is that there is three official exchange rates and it’s pretty complicated situation right now. Christopher Ferrara – Wells Fargo Securities: Great, that helps. And I guess what I am asking more specifically to is I am not just talking about sort of the ongoing P&L right but just because it’s fairly atypical that you guys took the balance sheet charge into your number into our P&L like report normalized numbers last quarter do you have coincident balance sheet reduction charge baked into your ‘15 numbers as well not just kind of the ongoing P&L effect.

The short answer is yes it is not unusual for companies when you are going through currency devaluations to have both the transaction and translation losses and to referencing but also balance sheet remeasurements so, as our fiscal outlook for both Argentina and Venezuela does anticipate some level of currency devaluation that would include transaction, translation as well as the balance sheet remeasurement component. Again the thing that I continue to emphasize it’s pretty volatile situation with multiple exchange rate so, it gets complicated depending on what the government decide to do but we think we have captured the reasonable place holder for what could occur. Christopher Ferrara – Wells Fargo Securities: Got it, thanks a lot. That’s helpful.

Thanks Chris.

The next question is from Wendy Nicholson of Citigroup. Wendy Nicholson – Citigroup: Hi, two questions if I can. First of all the international business can you give us a sense for what the margins there would be if you didn’t have Venezuela? It used to be kind of low double-digit but it’s not back high or is there are there other markets where you are investing at such a rate either expand Burt’s or something like that that business is just structurally lower margin than it used to be.

Yeah, so what I will say is that without getting into specifics because I don’t think that’s right to do at this point. The Venezuela business is a fairly good sized drag in the total company and certainly on the International business so, if you took hypothetical that wasn’t in the portfolio then you will certainly in International market that margin come up and you would also see an impact to the total company margins but I really don’t want to speculate as to what the impact would be at this point.

Yeah, I think Wendy you not only see I wouldn’t call it significant but you’d see modest increase for the total company you will also see a modest increase on the top line growth rate. Wendy Nicholson – Citigroup: Right, okay. And then that leads a little bit into my second question just embedded in your guidance right now for the full year you have talked a lot about kind of how things are going to kick in back-half FX should be less of a drag some of the effect or the boost from your demand building stuff is more back half and the gross margins are going to be down in the first half. Bust just as I am kind of playing with the model here severance on the same page do you think earnings bottom-line EPS is actually going to be up year-over-year in the first and second quarters I know you don’t like to give too much quarterly guidance but maybe just roll on the same page if you’re going to help us with sort of a range of possibilities?

Yeah, I think as we said actually we said in last earnings call and as we record again today I think you should expect that based on the foreign currency headwinds which are significant in the first half and the incremental demand building investments that we are putting into this business to defend our market share and get the categories back on track. Sales is very likely to be down year-over-year in the first half and I think earnings could very, very well be flat to down and I think we are going to get in and see what really happens with the currencies in the categories but I think both sales and earnings will be challenged in the first half. Wendy Nicholson – Citigroup: Got it, that’s helpful. Thank you.

Thanks Wendy. Thanks.

And the next question is from Connie Maneaty of BMO Capital. Constance Marie Maneaty – BMO Capital Markets" Hi.

Connie good morning. Constance Marie Maneaty – BMO Capital Markets: I have a question on Argentina and I am wondering how you are thinking about it now that there is least in technical default and I am wondering if you think you might need to go to hyper inflationary area accounting sense you know the official rates were inflation of 12%.

Correct. Constance Marie Maneaty – BMO Capital Markets: But the private forecast that are for 40. And just how does the deteriorating situation there fit in to the outlook right now?

Yeah, so a couple of thoughts Wendy – Connie sorry number one, the technical default of the Argentina debt we don’t think that has any near term impact on our business and we are closely monitoring obviously the economy in Argentina and that was to slowdown that could have an impact and we will also managed closing monitoring the foreign exchange environment to find out if that trigger something around devaluation more than other wise expecting. In terms of how we manage that business I would say that we continue to manage this pretty tightly because of the inflationary environment and because of the fact that it is under price controls I’ll be with that to take pricing in that market. So, I think we feel good about the Argentina business today it’s certainly challenging situation that we are going to need to work through but I don’t think the technical default is real issue at this point for as. As far as hyper inflationary accounting that’s really not a determination we would make as a company that is something that you we could be determined by the regulatory bodies and if in fact that happens obviously some of the cost instead of flowing through equity would flow through earnings that is not build into the outlook at this point and I think we just have to wait and see what happens in Argentina over the next one to two years. Constance Marie Maneaty – BMO Capital Markets: Great, that’s helpful. Thank you.

Thanks Connie.

The next call is from Lauren Lieberman of Barclays. Lauren Lieberman – Barclays Capital: Thanks. Good morning.

Hey Lauren. Lauren Lieberman – Barclays Capital: Just a question about the, I know bleach shares are up but I was curious about there has been some more activity overall in bleach liquid type launching an oxy product and so on. Just if you see any traction at all from some of others kind of try to impinge on the core properties bleach?

Yeah, you know it’s interesting if you go back to the last three years Lauren we probably had the strongest growth on blench in the category in the last 25 years I mean FY12 was $105 and FY13 $107, FY14 $104 in the last two years the volume has been at $106 so, we are starting to see a slower bid but these other activities we are seeing you know these things are typically in the two to one share range so, they are really not having much impact and in fact a lot of times they are even shelved in the bleach category in the store. So we’re not seeing a material impact yet on it. The other thing we’re doing and you are going to see this with we’ll be launching a thick bleach for cleaning soon. We’re starting see more and more people use bleach as a cleaning agent which is good news for us I think for the category because you use more bleach when you use it as a cleaning agent. Because laundry, when you look at the laundry the trend in laundry in general the loads are going down. So I think and with the use of et cetera laundry is certainly the most relevant piece of bleach usage but we are starting to see a cleaning pick up and that’s where we are going to focus. But we haven’t seen lot of impact yet from these I’ve called them on the tangent items. Lauren Lieberman – Barclays Capital: Yeah. And how long do you think does the retailer typically give that sort of product to get a meaningful share before it really becomes irrelevant, is it full year?

I think often times you get about six months. It depends on when the modulars are reset but most of the retailers will do a half year check to see if the things has got the unit movement to stay on shelf. I think if you are on the bubble so to speak you are very hard pressed to get a year to stay on the shelf. Lauren Lieberman – Barclays Capital: Okay. Great. All right. That’s it. That’s what I have left. Thank you so much.

Thanks Lauren.

The next question is from Linda Bolton Weiser from B. Riley. Linda Bolton Weiser – B. Riley: Hi. So just going back to your commentary on Venezuela. Unless I misreading your comments it sounds like you are considering as a possible option just completely exiting the market. So I guess if that’s not right what would kind of make you consider that as an option, would it just be a continuation of the losses there? And also some would argue that when you exited Brazil many years ago that, that was actually not the right choice. So maybe you could just I mean Venezuela is of course a different situation entirely. But maybe you could just talk a little bit more about what’s around the decision if you were to exit?

Yeah. I think Linda that when we say all options I think we have to mean all options. I think this as you said Venezuela seems to be a bit of a unique case here. And I do think and I think the Venezuelan government understand that Clorox is uniquely disadvantaged given that they kept about two thirds of our portfolio under price control. So it is a non-sustainable situation. We’ve had very – we believe constructive dialogue with the government over the last six months in particular. And as I said we thought we had pricing committed in early June, we are still waiting for those price increases to be published. But given the situation we’re in that option has to be on the table unfortunately. And we’ve been in Venezuela for decades. And as the government has said they want businesses to make a fair profit that’s all we wanted to do, is make a fair profit and that hasn’t been the case for the last 18 months. So it’s an option that has to be on the table. Linda Bolton Weiser – B. Riley: Okay. Thank you.

Thank you.

This concludes the question and answer session. Mr. Knauss I would now like to turn the program back to you.

Well, thanks everyone. I know it’s been a busy earnings day. We certainly appreciate you hanging in there on a Friday with us and we look forward to talking to you at Halloween next time. Thanks everyone.

This concludes today’s conference. Thank you for your participation.