Good morning and welcome to Procter & Gamble’s Quarter End Conference Call. Today's discussion will include a number of forward-looking statements. If you will refer to P&G's most recent 10-K, 10-Q, and 8-K reports, you will see a discussion of factors that could cause the company’s actual results to differ materially from these projections. As required by Regulation G, P&G needs to make you aware that during the call the company will make a number of references to non-GAAP and other financial measures. Management believes 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 adjusted for after-tax impact of major divestitures. Adjusted free cash flow productivity is the ratio of adjusted free cash flow to net earnings including divestiture gains. Any measure described as Core refers to the equivalent GAAP measure adjusted for certain items you have 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&Gs Chief Financial Officer, Jon Moeller.

Thanks. Good morning, everyone. Joining me this morning are Bob McDonald and Teri List. Today we are going to share fourth quarter results, we will also discuss our commitment to deliver leadership levels and total shareholders return. Behind the time tested business model and stronger more focused plans. I’ll begin today’s call with a summary of our fourth quarter results and guidance for fiscal 2013 and the September quarter. We are going to skip the detailed business-by-business discussion. All of this information is provided in our press release and will be available in slides which we posted on our website, www.PG.com. During this we will get time for Bob to provide his thoughts on our strategy, our commitment to winning and to leadership levels of shareholder return. We will of course, take questions after our prepared remarks and we will be available after the call to provide additional perspective as needed. With that let me move to fourth quarter results. We grew top line organic sales 3%. Progress was broad based with organic sales up in four or five reporting segments. P&G averaged 4% organic sales growth over the past three years achieving 3 to 5% organic sales growth for the past 11 consecutive quarters. Over this period we have added organic sales of $8.5 billion an amount that equates to the sales of a Fortune 300 company. We effectively created an energizer and (inaudible) in three years. Growth continues to be very strong in developing markets. Developing markets now generate nearly 40% of sales and 45% of our unit volume. It's a $32 billion the largest developing market business of any consumer products company. We see significant remaining growth opportunities as our business in developing markets is still lower as a percentage of sales than some of our competitors.…

Thanks, Jon. The whole P&G organization is committed to generating superior levels of shareholder return. We intend to do this through our commitment to win with consumers for offering branded products and superior quality and value, and by focusing on our largest and most profitable businesses. And through our $10 billion cost savings program. We have continued to grow our business during the most difficult economic periods since the great depression. We have done exceptionally well growing our top line and developing markets, but they have come up short on top line growth in developed markets and on bottom line growth overall. We have implemented three meaningful changes to address our shortfalls. The first is our 40-20-10 focus. Focusing resources on the 40 largest and most profitable businesses, many of which are in developed markets. On our 20 largest innovation and on the ten most important developing markets. As a first priority we are ensuring that we have sufficient plans to achieve our objectives in the 40 largest category country combinations. We have to make certain that we have offerings that provide superior performance and value, that our pricing is right. That our innovation is strong, and that the marketing effectively communicates a superiority of our offerings and there is sufficient marketing support, and we have done this. The second change is a deliberate refocus on discontinuous innovation. Innovation that obsoletes current offerings and creates new categories and new brands. Items like Tide PODS, Swiffer Crest White Strips or [zequel]. This of course comes on top of our commitment to ongoing innovation on our base business. In 2012, we spent more than $2 billion on innovation. 45% more than our next largest competitor. Innovation is at the heart of our business model and at the heart of our company. We…

(Operator Instructions) Your first question comes from the line of Chris Ferrara from Bank of America. You may proceed.

Can we talk about the mix a little bit? Obviously, you've talked, I think about long-term you think what the mix effect is on the top line. But bottom line or gross margin I should say, it’s hit you guys by about 200 basis points a quarter. This quarter it dropped to 100 basis points. I was wondering if you could try to frame a little bit. Put a little color around, first that drop from 200 to 100, right, in this period. I am trying to understand how high that wall is that you have to climb on cost savings to get to EBIT growth. And can you talk a little about; try to take a shot at what you think the long run kind of negative margin mix would be on product and geography? Thanks.

Part of the reason for the improvement in the last quarter is that we got full pricing for devaluation into the developing markets and so that that mix impact on that disproportionate growth in developing markets was less negative, than it would've been prior to that pricing being fully reflected. But also -- it also reflects, and this should be something that we continue to see going forward, improved progress and profitability in developing markets, behind the things we’ve been talking about for quite a while. Getting local sourcing in place, benefiting from the full scale of the portfolio as it gets put in place. And then we continue to see really significant trade-up in developing markets which is also improving margins. So, as those margins improve, the mix impact of disproportionate developing market growth also improves. I don’t have the specific number for you Chris in terms of what to expect going forward, but we will try to work on that and give you some dimensionalization of it.

Your next question comes from the line of Bill Schmitz from Deutsche Bank. You may proceed.

Just wanted to ask one question if I could, would you guys be able to give us the productivity savings in that 10 billion, either every quarter or every year. So I think that’s kind of important thing to track. And then my main question is, so I guess about 32% of the portfolio had market share flat or up in the quarter, which obviously was nice little uptick in June. Can you give us that metrics for the U.S. and then tell us what the U.S. growth was and sort of leaving the quarter, did you see any good signs of progress in the U.S. market share trend.

So, first Bill, on tracking the 10 billion of course, we will definitely do that. It will probably be more of annual or every six month report back as appose to every quarter, but we will definitely do that. And you can imagine we are doing that internally, it's part of our performance metrics. So, we should have that ability. Bob, do you want to comment on market share?

You are right Bill, we said that market share was about 33% one-third for the quarter, but ticked up to about 45% over the last month, and Jon covered some of the progress that we are seeing in market share gains in the U.S. in the categories where we have taken the corrective pricing action.

Moreover we strengthened our plans.

We strengthened our plans.

(Inaudible) with the Tide PODS addition for example.

Yes, in Tide PODS as you recall we added 2.5 points to the share PODS.

Your next question is from the line of Dara Mohsenian from Morgan Stanley. You may proceed.

First, can you give us your commodity and tax rate assumptions for fiscal 2013 and do you have a total cost savings number for fiscal 2012, maybe I missed it? And then the real question, I was hoping for more detail on organic sales growth guidance in Q1, because you sounded pretty enthusiastic that some of the recent strategy changes and price adjustments you have made paid off in terms of improved market share in June, but if you have already made those adjustments and have an Olympic boost, I guess why is top line decelerating in Q1 despite the easier comp and then why do you think it will reaccelerate in the balance of the year beyond Q1?

So first, tax rate for next year think of kind of 25 to 26%. And as I mentioned in my remarks we currently see commodities up modestly so flat to up probably less than $100 million next year. Relative to top line sales growth versus the quarter we just completed we will have less pricing -benefit as we start to annualize some of the price increases that we have taken. So, that's the primary reason you are seeing that deceleration and then as we go through the year and the 40-20-10 plans are fully implemented, we will start to see stronger momentum in out period. It's not we go from zero to 2 to 3 to 4, so it's not a massive acceleration. But those are the two underlying dynamics that are driving those trends.

Your next question is from the line of John Faucher from JP Morgan. You may proceed.

In looking at the relative success in emerging markets and the problems in developing markets, particularly what appears to be an overreliance on the U.S. from a profit growth standpoint? Can you talk a little bit about how you view the role of the GBU and if you look at most of your multinational competitors they do have more of a regional basis for the P&L. How do you guys look at ensuring that all the GBU is not run into the same side of the boat so to speak in terms of over relying on the U.S. from a profit growth standpoint?

First of all, I think it's important to understand how our GBUs are organized. We are really organized as regional business units that report up to a global head and so we try to maintain that presence at a regional level. And in terms of making sure that everybody run to the same side of the boat, we have very specific portfolio roles for geographies, both top and bottom-line, just as we do with business units and we manage it that way.

Also, John, it’s important to know that the whole focus on the 40-20-10 plan is about making sure we invest and resource our business where it matters most. And that is what a GBU President does and then of course there's oversight by the Vice Chairman of GBUs, Dimitri Panayotopoulos, and Jon and I as we meet with the GBU presidents. So in terms of a pendulum from one side to the other or exploiting one geography or another, it’s unlikely that would happen.

And your next question is from the line of Lauren Lieberman from Barclays Capital. You may proceed.

I just want to ask a little bit about mid-tier innovation. Because I know that as you started talking about refocusing on discontinuous and that I think we will start to see flow through in fiscal ’14, one piece that felt kind of missing to me versus your plan laid out a few years ago was more mid-year innovation but particularly in developed markets. I know there has been a lot in developing. So can you talk about how that may or may not be playing a role in your plans at the top 40 going forward? Thanks.

Thanks, Lauren. It still is strategic for us to have a full vertical portfolio of offerings in every category. So that is part of our strategic plan and it is part of our innovation program. So, for example in laundry in the United States you would go from Tide TOTALCARE or Tide PODS on the high end. Tide TOTALCARE being priced about 160 versus average Tide, down to Gain at maybe 85 index or Era at 65 index, in pricing versus average Tide. So the same would be true, for example, in Skin Care with Olay, you can buy a product for as much as $6, or you can buy a professional product for as much as $45. So, we want to have a full vertical portfolio and we'll innovate at each one of those price points for the consumers that those products serve.

And you will see entries, Lauren, in the mid-tier, in the year that's coming up in developed markets.

Your next question is from the line of Nik Modi from UBS. You may proceed.

Just wanted to talk about category growth. A lot of focus on market share, given the fact that you guys are so big in your categories and typically the leading brand, just wanted to get your perspective on kind of how you’re thinking about category growth philosophically as you look to kind of recover the top line?

We think it's our responsibility, Nik, to grow the categories for exactly the reason you said. Our retail partners, if you look at the Advantage Survey or the Cannondale Study, they recognize us having a comparative advantage versus our competition for growing category sales. So something like Tide PODS, for example, which is the most concentrated form of laundry detergent you can buy. Because of that concentration, it grows the category. And since we've launched Tide PODS, we've not only grown the share of Tide and grown the share of our laundry category, but we've also significantly increased category growth. Another example would be the Febreze car strip, which is a new kind of air freshener in the auto category which has grown the category substantially. When we innovate, when we introduce new items, when we improve the items that are in the market, we work hard to make sure we grow the category.

And you'll remember, back to CAGNY, Nik, we showed a couple of slides about our philosophy on developing markets and how it's all about category growth as a much more important component of overall growth. And that continues to be what we're seeing as well as we bring innovation into developing markets, the majority of the growth is sourced through market growth.

Your next question is from the line of Wendy Nicholson from Citi Research. You may proceed.

My first question is just a little bit of a follow-up. If you're focusing on the 40 largest businesses and that only represents 50% of your sales, isn't it logical to assume that the other 50% of your sales is probably going to continue to underperform and so maybe us all focusing on that market share metric, the 45% of the business or 55% of the business. Maybe that's not a fair indication of how your business is doing because I would imagine 50% is going to continue to really kind of lag. But then my other real question is, I remember when AG announced his strategy and I think his was top ten customers, top ten countries, and top ten categories. And I remember at the time, the customer, there was a big differential between how much money P&G made or how profitable the business was with some of the top customers as opposed to the smaller customers. And I'm wondering if that should be a focus now or is there not so much of a spread maybe between what you make in various types of retail channels? Thank you.

Thanks, Wendy. The top 40, top 20, top 10 process while encompassing or comprising 50% of our sales and 70% of our profit, there is no intention to just simply disregard the rest of the business. And when you include the top 40, then you include the top 10 developing markets, you've got a pretty good swath of our business. In comparison to the program you talked about with AG which is really big customers, big brands, big countries. It’s the same approach, which is to make sure we focus on where our business matters most, and that’s what we’re doing. In terms of profitability of customers, there's really not a difference by customer. What you really see, if anything, is a difference by channel. But we treat the customers the same and support, consistent with Robinson-Patman Act, and support them consistent with our innovations. In fact, right now if you went into virtually any store in the United States, you would see a large number of displays of Olympic featured Procter & Gamble products. We’re in about 4 million stores with displays right now all over the world. And obviously we work with retailers to support those displays and to sell as much product as we can.

Your next question comes from the line of Joe Altobello from Oppenheimer. You may proceed.

I guess first question, could you outline some of the changes that you have made internally on the innovation front in order to bring more impactful innovation, more discontinuous innovation to the market quicker? And then secondly you talked about the increase in advertising investment next year, just rough estimates, if you could quantify what we’re looking at in terms of the year-over-year increase in advertising next year. Thanks.

Relative to the discontinuous innovation, Joe, we've taken a number of steps. One is we've created a new business creation organization, call it NBC, reporting to Dimitri, the Vice Chairman of GBUs and also with the lot of oversight from my myself. And the whole idea there is to have people working on innovating in the seams in places that would fall between the organization boundaries. So, for example, a product like Swiffer would involve chemistry, would involve paper technology, would involve apparatus technology. No single GBU would develop that. It falls between the seams, so we need people working on that. Secondly, we put an experienced Group President in charge of that organization. It's Jorge Mesquita. Jorge has a track record of having developed a number of discontinuous innovations. When he worked with me I ran fabric and Home Care and he led our Home Care business and grew Febreze, grew Swiffer to significant pieces of business for us. Third is we have funded all of this activity and we focused the organization on it. Fourth is we have done training the organization on discontinuous innovation. We worked with Clayton Christensen from Harvard Business School who has helped us. And I think that's about it. There are more things, but they are more minor.

And in terms of the increase in advertising, Joe, obviously that's something that's somewhat fluid depending on how plans work or don’t work, but I’d think of it for now as up 30 to 50 basis points.

There’s one other thought and it wasn’t, we didn't knew it just for discontinuous innovation, but as an evidence of our scale of the Procter & Gamble company, we have taken a new approach in research and development called transformative platform technologies where we have identified nine technologies that span our business units. Think of these as technologies that are so breakthrough that no individual business unit could afford to invest in them on their own; but on the other hand, the corporation can invest in them. These are like 10 year, 20 year technologies that change the face of our business. One example of this that you would be familiar with is something called solid state technology. This of this as two metal roles that take a substrate between them and change the physical properties of that substrate as that substrate passes between them and provide either stretch properties so you would see that in Baby Care, you would see that in Feminine Care and always on Pampers. But you would also see that in Glad trash bags, the new stretchable Glad trash bags and the new stretchable Glad household bags. This [surfing] technology is a technology that no single business unit could create, but by creating it corporately and then putting it out to the business units, it's a great example of the scale benefit derived from our investment in research and development.

And just one clarification point for those who might be confused, we are in a joint venture with Clorox on the Glad business which is why Bob mentioned that.

And your next question comes from the line of Ali Dibadj from Bernstein. You may proceed.

A couple of things. One is, just want to explore the prudence of saying fiscal year ‘13 is going to be back half weighted and the fiscal year ‘14 will return to the long-term growth rate which would be great, but just trying to understand the prudence of that. I guess, I just, I don't get it. I don't get kind of the bullishness around it given some of fits and starts you had to face for the past several years and especially you got to obviously give credit for the track record over 20 year and 10 year of the company, but that's a different time it was a different company. I think you need to do different things than you had done before. So, first question is, do you agree that there are different things you have to do. So you have to be more value oriented that’s to be more in developing market. You have to sell beauty which you didn’t really be doing that whole timeframe and I don’t really know the solution is for Beauty. And you have the cost cut and if I were to focus on cost cutting for the second part, from all your numbers that you presented, you’re very reliant on cost cutting to deliver your numbers and look at the $10 billion restructuring which is great, the strong as you know, it was little late. But that was based on a 5% top line growth assumption, so that’s not happening and I’m trying to understand given you reliance there and given kind of first question, so you have to think really differently. How you’re going to make up that difference? Have you found big new buckets of cost saving because a couple hundred million dollars here and there won’t do it or you are expecting kind of a hockey stick of top line growth to get your 5%? So, are things different? Number one, and you have to do things differently. Number two is, how you’re going to plug the hole in 10 billion bucks given your top-line is not growing the way it was, expected to grow?

We believe that the Procter & Gamble Company has a time tested business model. It involves superior products, based on superior consumer insight. It involves the five strengths of the company, branding, go-to market, scale, innovation, consumer knowledge. We think those are enduring just like we think the purpose of the company is enduring. What we're doing now is we’re becoming more focused and more fit to win in this current environment. That’s what our 40-20-10 plans are about, that’s what our $10 billion cost savings and productivity improvement plan is about. That will be the fuel to growth and the fuel to profit, and that's what our discontinuous innovation focus is about. So we think this time-tested business model makes the Procter & Gamble Company an outstanding long-term investment.

And relative to a couple of the other points, Ali, on prudence of first quarter guidance, I don't generally consider whether something is prudent or not or consider whether it's accurate or not, and that's where we find ourselves and we try to explain why. In terms of the $10 billion program, I'd say a couple of things. First of all, we've tried to very transparently lay out exactly how that number was calculated, and you've rightly described how that's calculated. So, if you have a different view in terms of what happens with the top line or any component of it, we've given you all the pieces and you can model that any way that suits yourself. I mentioned in my remarks that we have found, as we've gone through this, additional opportunities to reduce cost. I mentioned that I expected us to be, or that we would be, more than 10% below June 2011 levels on enrollment when we're all done. So, it's not like we're looking at the $10 billion figure and saying, that's it. This is about a culture and a mindset that, as Bob said, it puts us in a position to be more fit to win in a very difficult economic environment.

And your next question is from the line of Javier Escalante from Consumer Edge Research. You may proceed.

I just would like to understand again better the fiscal '13 plan, basically the financial side and how that guides with your long-term financial and strategic goal? So you left 2012 gaining share, or holding or gaining share on 45% of the portfolio. Your strategic target is to gain share on 65%, if I recall correctly. Are you planning to get there by the end of fiscal '13? If so, is the expanding to get there budgeted in your plan? And also if you can explain this change in the share repurchase issue? You halted it in May and now you're buying it again. You attributed to a debt rating issue but I don't think that it changed that much in a month and a half. So, if you can explain better why is it that now you're restarting share repurchases that you consider a structural change in the portfolio and now you're not considering it? If you can explain the share repurchase issue also as well it would be very helpful.

Sure. Let me start with the math for next year, if you will, and how it squares with both the end of the year we just completed as well as the subsequent year. We have, as I mentioned, funded increases in marketing support and we have, as I mentioned, funded investments in pricing. So the investments that are required to deliver that growth acceleration are baked in. And that's one of the reasons that the first quarter is what it is and it's one of the reasons that the overall guidance is what it is. If you exclude foreign exchange from the guidance as we mentioned in the comments, we would be at about 2% to 7% earnings per share growth in 2013. That's not significantly off the bottom-end of the range that I described for 2014 of kind of 8%. And as we get a full year of cost savings in place, for instance from enrollment, as we gain the acceleration in the restarted plans in the developed markets etcetera, and as we don't have the significant one time hurts that we have in the current year due to pension revaluation and due to the Venezuela pricing thing, we should get there.

And your next question is from the line of Connie Maneaty from BMO Capital. You may proceed.

Some time ago, we had calculated that Procter’s overhead cost per employee was about 40% higher than what we saw as an industry average. I’m wondering if you have benchmarked yourselves against the industry and what you think the right metric there would be and relatedly, it also seem to me as we’re evaluating this that it led to some internal gridlock. So, as personnel count is being reduced, what are the changes in processes or responsibilities that will make the organization more nimble?

Connie, our core SG&A is around 14.5% of sales which based on our benchmarking puts us in the bottom half of 15 company global competitive peer group. Now within that, there is some diversity. In general, the global beauty companies skew very high on this metric. Some is high as 24% of sales and the mainly domestic household care companies skewed at the low end of 9 to 10% of sales. The beauty companies because they have counters, they have beauty counselors, that’s why they are high. The household companies, some of them go through brokers and don't have sales forces, that's why they are low, but based on our mix of business, which is about 53% household care, 33% Beauty and Grooming, 14% health care, we compare well with the weighted average of our peers. However, considering our company scale, we expect to be better than the competitive weighted average. So getting the core SG&A of around 12% of sales, we think puts us in a top third of our competitors on an absolute basis, and about 350 basis points below the weighted average based on business mix. As we go about this work, as you properly pointed out, this is not just about reducing the number of heads it's about finding ways to do the work differently in order to be more agile. That's one of the reasons we've reduced the number of levels within the organization, the hierarchy we’ve talked before about reducing the number of Vice Chairman by 50%, reducing the number of Vice President by 15%, reducing the number of Directors. And while we’ve done that, we’ve digitized the organization to allow them to operate effectively with less overhead. We have also been working to make the process from the creation of the product to selling it in the market more linear. During the time of many acquisitions in the past, we became less linear, we had too many (inaudible), too many people you had to check with, and we are going through a process now in our brand building organization of making that much more linear. Those are two examples. The third example is obviously the creation of global business services, which has saved us about billion dollars in back office activities from 2000 to 2012.

And your next question is from the line of Bill Chappell from SunTrust. You may proceed.

Just one quick housekeeping; Jon, I don't remember if you said, but for the Venezuela, Argentina and the pension issue, is there any one quarter that impacts or is it all four quarters? And then second just, on kind of looking at the simple changes, any thoughts on another round of compaction. That seems like that will be the easiest way to kind of cut costs and drive sales. It would affect a big part of your organization. And I ask that because this seems like the time of the year that if you are going to do it for next year, you would start announcing it?

So, first on the housekeeping question, the pension impact is ratably spread across the quarters. The Venezuela Argentina thing is more a front half issue because we anniversary the new law in February in Venezuela.

Bill, as you would imagine, compaction is always on our radar screen in our innovation program. It's good for consumers because it helps them reduce the amount of space product takes, it reduces fillers and it's good for retailers because it reduces the amount of shelf space they have to use. It's good for the environment. It reduces carbon emissions from trucks carrying it around. It reduces ethylene in the environment. So, we are always looking at compaction and every one of our innovation programs has some kind of compaction within it. I’d encourage you when you think about compaction to think about Tide PODS. It's the most compact laundry detergent available. It's got the highest percentage of actives of any laundry detergent in the market and it cleans as well, if not better, than six competitive products at the same time. So, we've just begun the launch. We're going to be rolling it out around the world and that would be a great example of the benefits of compaction.

And your next question is from the line of Jason Gere from RBC Capital Markets. You may proceed.

Just one thing, looking through your slide deck when you talk about some of the assumptions for the year, you're talking about global market growth of 4% to 5%. Hopefully, I'm not wrong here but I think you guys were talking about 4% over the last couple of months when you gave that number. So when most of your peers are talking more cautiously about Western Europe and even the U.S., it seems like this numbers actually elevated a little bit. So I was just wondering if you can reconcile that?

You know if you think about -- if we just break it down into pieces, what we’re seeing before was developed market growth of about 1.5 points, developing market growth of about 8 points which got us to 4 on a global basis. What we've seen more recently is a slight uptick in developed, primarily in June and that's growing now at 2 points, developing -- we've actually seen some acceleration, but it’s up at about 10 points right now. So that’s how you get to the 5. But these numbers are very volatile. They move around all the time and that’s why we’re describing it as a range of 4 to 5. So we’ve seen 5 recently. I don't know what that necessarily is representative of the future. We expect it to be somewhere between 4 and 5.

This is exactly why the productivity program is so important because should that marker growth slip, we still need to have the fuel to invest in innovation and to invest in growth and that's why we’ve got the $10 billion productivity program.

Your next question is from the line of Alice Longley from Buckingham Research. You may proceed.

Could you tell us what the U.S. alone look like in the fourth quarter? Was volume still down to single digits and value sales down, say 2% to 3% here? And then going into the first quarter, is our value sales likely to be down more because of less pricing? And the second part of my question is, could you comment on the quality of what you’re doing to improve your share. And as an example, in blades, it looks like your share is improving because of improvement with disposables and much heavier promotional activity. And I'm wondering if that's how you want to gain share?

Our U.S. business is strengthening, as Jon talked about in his remarks. Some of the activity is correcting price disequilibrium. But it's important that much of it also is innovation. And the innovation is also what's driving the improved shares. An example of that would be continued growth on ProGlide, for example, in blades and razors. And we have future innovation coming, so we're expecting the U.S. business to continue to strengthen.

Your next question is from the line of Mark Astrachan from Stifel Nicolaus. You may proceed.

I was wondering why do you think the decision to focus on your ten largest developing markets or, as you said, not going into other new markets, is the right decision for the long-term? Why is it not shortsighted where it gives competitors an opportunity to develop a beachhead, so to speak, and ultimately put you at a disadvantage where you have to play catch up again?

So, fully, fully agree with developing markets being a priority and a strategic imperative as we look forward. We have significant opportunity in those ten large markets. And by markets, you shouldn't confuse the word market with country. These are often times regions or country clusters where we go to market very similarly. So we refer to them as one market. If you look at what's ahead of us in developing markets, I think it's an incredibly exciting thing for both consumer products companies in general, and particularly Procter & Gamble. We're looking at population growth to 2020 of 700 million people globally, 95% of which are going to be in developing markets. We're looking at the addition of 1.5 billion middle income consumers, 98% of which are going to be in developing markets. We are I think at the precipice of one of the biggest trade-up cycles that we’ve ever seen. You have got growing populations, growing income levels and very aspirational consumers. So, we couldn’t agree more with the need to be fully present and we feel comfortable with the top 10 as being actually the way to maximize our presence in those markets and we will get to the others as time and funding allow.

Your next question is from the line of Linda Bolton Weiser from Caris & Company. You may proceed.

I was wondering, Bob, if you could address this company culture a little bit, because I remember when you first became CEO, sitting in meetings with you and you talked a little bit about it and how you felt. There are needed to be some tweaking of the culture and you sounded like a tough guy quite frankly that there needed to be, I forgot your exact words, but ramifications for non-delivery etcetera. Can you talk about how the culture has been tweaked a little since you have been CEO and in what ways you have been happy with the cultural change or not happy or maybe you think there needs to be more or just talk about that issue a little bit?

Well, I think we are making progress in strengthening the culture and what I mean by that is, I’ve talked about in my remarks accountability. We hold people accountable to Procter & Gamble Company. If you remember in my remarks, I talked about bonus programs paying roughly on average 35% payout. That's a lone number, that's painful. I also mentioned accountability in terms of leadership. If you compare the leadership that we have today versus the leadership we had three years ago, you would see substantive changes particularly in the Beauty business. I also talked about the need to establish our cultural productivity something that Procter & Gamble hasn’t had during my 32 year career. We’ve had periods of productivity improvement, but they tend to be one-off or episodic and what we are trying to create now is the productivity constancy where we constantly work to improve the organization, the organization effectiveness, the leadership of the organization, the way we do our work, so that we can constantly be turning up the money that we need to invest even in slow macroeconomic environments. So, we’re working very hard on the culture, we’re working very hard on the leadership of the company and frankly we just all got together a couple weeks ago and I’m very encouraged by leadership team we have now. In many ways, I think that I just wish I'd done it three years ago, I think we've got the right team.

And your next question is from the line of Victoria Collin from Atlantic Equities. You may proceed.

I’d just like to ask a question about the steps that you’re going to be taking to improve and hopefully we accelerate the volumes in the Beauty category. I assume lot of it down to the skin care, particularly in developed markets, but just what steps are being taken? Is it simply trying to capture the consumer or the other productivity or execution issues that you are taking on as well that you hope to improve things? And then secondly, I guess I want to congratulate you on the Olympics advertising. I think P&G has done really excellent job aligning themselves with the competition. And do you see this is making contribution to sales in the first half of next year, will there be a second lag of advertising now to link P&G or link your name to the brands and get the sales up. And is it one of the ways that you're looking to raise advertising and also regenerate sales in the developed markets?

Relative to Beauty, Beauty is one of the primary focuses of our 40-20-10 focus program. There are parts of our Beauty business globally that we’re very happy with. But there are also parts that we’re unhappy with. We’ve talked for some time about Pantene North America. We’ve talked for some time about Olay North America. And we’re working through innovation, through better consumer insights, through better advertising to improve the results of those brands. Secondly on the Olympics, thank you very much for your comments. The Olympics sponsorship is really a terrific example of Procter & Gamble scale brought to life. It's the largest multi-brand commercial program that we’ve ever done. We've got 34 brands, and we’ve got displays right now in more than 4 million stores around the world, and that last for six-month period. It started last March, April as you know, probably with Mum's Day in London, and it's going to continue after the Olympics this week. In fact, after the Olympics and in the next couple of weeks, we start the Paralympics which is part of our sponsorship as well. The program has got a 50% higher return on investment versus our typical single brand program. We've generated a lot of awareness through social media with 6 million views of advertising online so far. And the benefits of the program extend well beyond the London Olympics as I said. We still expect to fully deliver about $0.5 billion in incremental sales over a 12-month period, and we've consistently demonstrated a 5% to a 20% increase in sales when retailers run Olympic displays. We also have seen a tremendous advantage when our brands are linked back to our company, the Procter & Gamble Company. While this looks like something new, it really isn't all that new. When I worked on the new brand in Procter & Gamble in 1980, we were allowed to put, this is from Procter & Gamble, on the brand for six months during the first six months of launch. When I was living in Asia from 1991 and 2001, we ended every ad that we had in Asia with a placard that talked about Procter & Gamble and improving lives. And we have experienced throughout the world that Procter & Gamble is the glue that pulls all the brands together enabling these massive multi-brand merchandising and displays, but also leading to the credibility of the brands and the credibility of the company. As you can imagine, we've researched this in many countries around the world and this is a positive connection. So, we will continue it, and obviously we will review our Olympic effort afterwards and we'll improve it the next time.

And your next question is from the line of Leigh Ferst from Wellington Shield. You may proceed.

My question is about how you're managing your focus on the ten emerging markets. What changes have you made since you've announced this focus, and to what extent are they managed differently from established markets?

It's a great question, Leigh. What we do is, we get the leaders of the company together, the GBU leaders and the geography leaders. And we work to put together a total company plan. So, for example, if we were to introduce a new category in the country, we would look at what other categories space up against the consumer, against the retailer, against the competitor, and make sure that the plan we put in place in that country is synchronized amongst all the business units. We make sure that the strategies are consistent across business units and it's really a matter of trying to bring Procter & Gamble scale to bear to win in that market.

Your next question is from the line of Tim Conder from Wells Fargo Securities. You may proceed.

I wanted to circle back to the restructuring tracking just more from a housekeeping item here. It would be helpful rather than every six months or year if we could get that on a quarterly basis. Several other companies much smaller than Procter do provide that that we’re familiar with. The main question though that I have, would be related to part of your guidance here and if you could just maybe expand upon it. The share repurchase when you gave guidance a quarter ago, basically you had no share repurchase for fiscal ‘13 when you gave some updates before. Now you do yet the EPS is in essence unchanged. Jon, is something changed on the expense outlook here to work that dynamic? Is that the part of the investment that you’ve talked about earlier here? If you could just expand on that, maybe give a little reconciliation.

Good question, Tim. Basically we haven't built-in any significant benefit from share repurchase because we haven't finalized the timing of share repurchase. And that timing will have an impact on how much earnings per share, actually earnings per share benefit is there for the year. But, obviously, that provides some degree of flexibility from a lot to a little depending on when we do it. There is nothing that's changed in the expense environment. If anything, things have probably improved a little bit. We've talked about commodities being essentially flat, whereas when we were talking in Paris, for example, we were talking about more of a headwind in commodities. So, we probably have a little bit more flexibility than we had when we were speaking in June.

Your final question comes from the line of Caroline Levy from CLSA. You may proceed.

I think one of the more interesting question or focuses was on management, because some of the problems that have happened over the last several years have been related to maybe who was running various businesses and so on. Can you just run us through if you think at this point in each of your divisions where you need to be already, are there still going to be some tweaks to leadership? And when you talk about bonuses and compensation, how much do people feel that what they do within their existing business is going to drive their comp versus the total P&G performance, and that sort of talks to the benefit of being one large company versus you are competing against some people who just do Oral Care or they just do Diapers, or they just do Prestige Beauty. So, how do you get management to everything they need to do if they feel that maybe the whole compensation structure doesn’t (inaudible)?

I’m happy with the leadership team that we have in place today, very happy. And as I said, I think if you compare the leadership team we have today versus the one we had three years ago, you’d see significant differences. Number two, the compensation systems of the company very much favors the shareholder. Most of us have over 95% of our net worth in Procter & Gamble stock. This company has been a company that in the early days of the company created a profit sharing trust program. Basically, all of my retirement is based in Procter & Gamble stock. I have no pension other than Procter & Gamble stock. Our Medical Care is supported by Procter & Gamble stock. Our bonus programs are based on Procter & Gamble stock. So, our leadership is very, very much focused on total shareholder return and Procter & Gamble stock and that's why the comment I made about the payout being only averagely 35% that's still going to be paid in Procter & Gamble stock and restricted shares. So, that's significant. Secondly, while it is true that part of the compensation program is a mixture of business unit performance as well as company performance, even when we do that metric, we have a company factor in there. And when the leadership team got together last week, we suggested and we all agreed that we focus on seven metrics for the entire organization and we are doing that. So, we are united more than ever before, as I have said in my remarks, on those metrics that matter most to total shareholder return and every leader of the company is focused on that.

Just one other point Caroline, when you were talking about the challenges of managing a big company as opposed to smaller focused company. I think it's important to understand how we actually manage the business which is actually very focused. The daily business of the company is managed by leaders of individual business units. They are focused on only one thing, they have one job; growing sales and profit of their business and they get to do that with all of the assets of the Procter & Gamble Company behind them. And unlike many of their competitors, they don’t have to concern themselves with back office activities, treasury, tax, investor calls. They have got one job. So, it's actually a very focused approach and more focused than even some of their smaller competitors.

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