Excellent Top-Line Growth Across All Divisions NEW YORK, Jan. 30,
2007 /PRNewswire-FirstCall/ -- Colgate-Palmolive Company (NYSE:CL)
today announced excellent worldwide sales and unit volume growth
for fourth quarter 2006. Worldwide sales grew 10.5% to $3,209.1
million and unit volume grew 7.0%, as reported. Excluding
divestments, worldwide sales and unit volume grew 11.5% and 8.0%,
respectively. Global pricing increased 1.0%, and foreign exchange
added 2.5%. The very strong top- line growth was supported by a
double-digit increase in worldwide advertising spending to a record
level. Fourth quarter 2006 results include $65.1 million of
aftertax charges related to the 2004 Restructuring Program. As
previously disclosed, effective January 1, 2006, the Company
adopted SFAS 123R related to stock-based compensation, which
resulted in an incremental $8.8 million non-cash, aftertax charge
in the fourth quarter, with no such charge in 2005. Also as
previously disclosed and consistent with its focused business
strategy, the Company sold its household bleach business in Canada
at the end of the fourth quarter for an aftertax gain of $38.2
million which, as previously announced, was offset in its entirety
by restructuring charges. In the year ago quarter, restructuring
charges and Other Items totaled $19.4 million aftertax (see Table 3
for 2005 details). As reported, gross profit margin was 55.4% in
the quarter and 54.8% in the full year 2006. Excluding
restructuring charges, gross profit margin for the quarter was
56.6%, the highest quarter of the year and an all-time record. As
planned, the 60 basis point increase in the quarter came on top of
the very strong 100 basis point improvement in the year ago period.
Also excluding restructuring charges, for the full year 2006 gross
profit margin grew 110 basis points, and is expected to increase
that amount or more in 2007. Reported net income and diluted
earnings per share in fourth quarter 2006 were $401.2 million and
$.73, respectively, including restructuring charges ($.12 per
share), incremental stock-based compensation charges ($.02 per
share) and the gain on sale of the Company's household bleach
business in Canada ($.07 per share). Excluding the above noted
items in both periods, net income in the quarter increased 15%
versus fourth quarter 2005 to an all-time record $436.9 million,
and diluted earnings per share increased 16% to $.80, also an
all-time record. In fourth quarter 2005, reported net income and
diluted earnings per share were $361.2 million and $.65,
respectively, and net income and diluted earnings per share
excluding restructuring charges and Other Items noted above were
$380.6 million and $.69, respectively. Operating profit as reported
increased 10% versus fourth quarter 2005. Excluding the above noted
items in both periods, operating profit rose 15% to an all-time
record level. On the same basis, operating profit margin grew from
20.3% to 21.1% of sales. Net cash provided by operations year to
date increased by 2% to $1,821.5 million after absorbing $115
million higher aftertax restructuring cash spending and building
working capital to support the business during factory closings
related to the 2004 Restructuring Program. Reuben Mark, Chairman
and CEO said, "We are especially pleased to have ended our 200th
anniversary year so strongly. The combination of extraordinary
top-line growth, higher margins, increased advertising spending and
significantly higher net profit during the quarter is an indication
that the basics of our business are strong and getting stronger.
"The increase in gross profit margin and other savings programs
funded a double-digit increase in advertising supporting Colgate
brands while still delivering higher than expected operating profit
and earnings per share growth for the quarter. We expect the
positive gross profit momentum to continue into 2007 as a result of
our ongoing savings programs, the growing benefits from
restructuring and the continuing shift toward higher margin
products. Also, most of the benefit from our worldwide drive to
increase promotional efficiency is yet to come." Ian Cook,
President, COO and CEO designate further commented, "Every
operating division had higher advertising spending, which drove
market share gains across categories. Toothpaste market shares
strengthened in key countries around the world including Mexico,
Brazil, India, the United Kingdom and Russia, and are at a record
high here in the U.S. Colgate's worldwide share of the manual
toothbrush market also increased during the quarter to another
record high bringing Colgate new global leadership in this
category. "Building on this success, we are excited to be entering
2007 with a very full pipeline of new products around the world and
an array of very strong integrated marketing campaigns to support
them. Our excellent top and bottom line trends should continue
through 2007." For the full year 2006, worldwide sales as reported
increased 7.5% to $12,237.7 million, an all-time high, including
5.5% unit volume growth, 1.5% higher pricing and 0.5% positive
foreign exchange. Global sales and global unit volume grew 9.0% and
7.0%, respectively, excluding divestments. As reported, net income
and diluted earnings per share for the full year 2006 were $1,353.4
million and $2.46, respectively. Full year 2006 results include
$286.3 million of aftertax charges related to the 2004
Restructuring Program ($.52 per share), an incremental aftertax,
non-cash charge of $48.1 million resulting from the Company's
adoption of SFAS 123R related to stock- based compensation ($.09
per share) and a $38.2 million gain on the sale of the Company's
household bleach business in Canada ($.07 per share). Excluding the
above items in both periods, net income and diluted earnings per
share for full year 2006 increased 12% and 14%, respectively. At
11:00 a.m. ET today, Colgate will host a conference call to
elaborate on fourth quarter results. To access this call as a
webcast, please go to Colgate's web site at
http://www.colgate.com/. The following are comments about
divisional performance. See attached Geographic Sales Analysis and
Segment Information schedules for additional information on
divisional sales and operating profit. The information regarding
Europe/South Pacific and Greater Asia/Africa reflects the modified
geographic reporting structure implemented by Colgate effective
January 1, 2006, as previously disclosed. North America (21% of
Company Sales) Positive growth continued in North America, fueled
by new product sales and market share gains. Sales rose 7.0% on
8.5% volume growth during the quarter, on top of strong growth in
the year ago period. Positive foreign exchange added 0.5% while
pricing declined 2.0%. As planned, very strong commercial spending
this quarter affected both pricing and operating profit, which
declined 1%. North American operating profit is planned to show
good growth in first quarter 2007, and continue positively
throughout the year. Colgate's leadership of the U.S. toothpaste
market continues to grow, with its ACNielsen market share reaching
37.3% year to date, up 50 basis points versus the year ago period
and nearly three share points ahead of the nearest competitor. The
strong growth was led by Colgate Total toothpaste which reached an
all-time record high market share of 14.3% for the year. Colgate's
share of the manual toothbrush market is also at a record high at
23.8% year to date, up 140 basis points versus year ago. In the
separately measured Naturals channel, Tom's of Maine toothpaste
continued its leadership with its year to date share of that market
at 49.7%. In the U.S., new product activity is contributing to
growth across categories. Successful new products include Colgate
Luminous Mint Twist toothpaste, Colgate 360 degree manual
toothbrush, Softsoap Brand Decorative Collection liquid hand soap,
Irish Spring MoistureBlast bar soap, Softsoap Brand Pure Cashmere
moisturizing body wash and liquid hand soap, and Fabuloso
multi-purpose spray cleaner. Positive growth momentum in the U.S.
is expected to continue into 2007 driven by a full pipeline of new
product launches. Recent introductions include Palmolive Scrub
Buster with Micro Beads dish liquid, Irish Spring body wash for
men, Softsoap Brand Nutra-Oil body wash, Colgate MaxFresh BURST
toothpaste with 50% more mini breath strips and Colgate Total
Advanced Clean toothpaste which helps maintain a dentist clean
between dentists visits. Latin America (25% of Company Sales) Latin
American sales grew 14.0% in the fourth quarter to an all-time
record level. Unit volume for the region grew 12.0%. Every country
in the region contributed to the very strong volume gains, led by
Brazil, Mexico, Venezuela, Central America, Colombia, Argentina and
Ecuador. Higher pricing contributed 2.0% and foreign exchange was
flat with year ago. Latin American operating profit increased 20%,
to an all-time record level even after a strong double-digit
increase in advertising behind Colgate brands during the quarter.
Colgate continues to build its strong leadership in oral care
throughout Latin America with its regional toothpaste market share
at a record 73.8% year to date. Toothpaste share gains were
achieved in nearly every country driven by strong sales of Colgate
Total, Colgate Sensitive and Colgate Max Fresh toothpastes. Colgate
also expanded its recently acquired leadership in manual
toothbrushes during the quarter with its regional market share
reaching 37.2%, nearly three share points ahead of the nearest
competitor. The recent launch of Colgate 360 degree manual
toothbrush contributed to this success. In other categories,
Palmolive Nutri-Milk, Protex Oats and Protex Propolis bar soaps,
Lady Speed Stick Double Defense deodorant and Palmolive Hydra
Natura ActiFirm and Extra Dry body lotions contributed to market
share gains in the region. Europe/South Pacific (24% of Company
Sales) As reported, Europe/South Pacific sales increased 12.5%
versus year ago, and unit volume grew 3.5%. Pricing was positive
0.5% and foreign exchange added 8.5%. Volume gains in Australia,
the United Kingdom, Denmark, Spain, Italy, Switzerland, Greece,
Ireland, Poland, Hungary, Romania and the GABA business more than
offset a volume decline in Germany due to challenging economic
conditions. Operating profit for the region grew 25% to an all-time
record level even after a significant increase in advertising
during the quarter. Colgate maintained its oral care leadership in
Europe/South Pacific led by toothpaste market share gains in the
United Kingdom, Spain, Greece, Austria, Norway, Poland, Ireland,
Australia and New Zealand. Successful new products driving these
gains include Colgate Time Control, Colgate Max Fresh and Colgate
Sensitive Multi Protection toothpastes. Recent innovations
contributing to gains in other categories include Colgate 360
degree manual toothbrush, Colgate Plax Whitening mouth rinse,
Palmolive Pure Cashmere and Palmolive BodYogurt shower gels and
Ajax Professional Degreaser and Ajax Professional Double Power
spray cleaners. Greater Asia/Africa (16% of Company Sales) Greater
Asia/Africa sales and unit volume, as reported, increased 5.5% and
2.5%, respectively. Excluding the 2005 divestment of the detergent
business in Southeast Asia, sales and unit volume for the division
grew 10.0% and 7.0%, respectively. Strong volume gains were
achieved in nearly every country in the region led by Malaysia,
Thailand, Philippines, Vietnam, India, Russia and the rest of the
CIS countries, the Gulf States and South Africa. Unit volume in
Greater China increased 1% during the quarter, excluding
divestments. For the division as a whole, pricing increased 1.0%
and foreign exchange added 2.0%. Operating profit for the region
increased 16% to an all-time record level, despite increased
advertising supporting Colgate brands during the quarter. Excluding
divested businesses, operating profit increased 24%. Colgate
strengthened its oral care leadership in the Greater Asia region
with 10 out of 14 countries reporting toothpaste market share gains
led by India, Thailand, Russia and the CIS countries. Colgate's
share of the manual toothbrush market also strengthened throughout
the region with nearly every country achieving record high shares
in the category. Successful new products driving the oral care
growth include Colgate Max Fresh, Colgate Sensitive Multi
Protection, Colgate Total Propolis and Darlie Tea Care Mint
toothpastes and Colgate 360 degree manual toothbrush. New products
contributing to growth in other categories in the region include
Palmolive Nutri-Milk bar soap, Palmolive Naturals shampoo and
conditioner, Protex Deo 12 bar soap and shower gel, and Lady Speed
Stick Aloe deodorant. Hill's (14% of Company Sales) Innovative new
products and veterinary recommendations continue to drive growth at
Hill's, a world leader in specialty pet food. Hill's sales and unit
volume grew 11.5% and 6.5%, respectively, to an all-time record
level. Pricing increased 3.5% and positive foreign exchange added
1.5%. Operating profit increased 15% to an all-time record level
during the quarter after a strong increase in advertising. Strong
sales of Science Diet Indoor Cat food continued to drive growth in
the U.S. specialty retail channel during the quarter. In the U.S.
veterinary channel, Prescription Diet j/d Canine, a food clinically
proven to improve mobility in dogs with arthritis, the relaunch of
Prescription Diet d/d Canine and Feline foods, which address a
range of inflammatory skin conditions, and a new chicken variety
for Prescription Diet Feline r/d and w/d foods representing the
first launch of flavors in the therapeutic weight category
contributed to growth. Internationally, growth was strong led by
Belgium, Germany, Denmark, Italy, the United Kingdom, Australia,
Brazil, Taiwan and Russia. New pet food products contributing to
the international growth include Prescription Diet j/d Canine,
Prescription Diet Feline Chunks in Gravy pouches and Science Plan
Neutered Cat, a new veterinary exclusive product. Other Matters In
December 2006, as required, the Company adopted Statement of
Financial Accounting Standards No. 158, "Employers' Accounting for
Defined Benefit Pension and Other Post-retirement Plans" (SFAS
158). SFAS 158 requires companies to fully recognize the funded
status of defined benefit pension, retiree healthcare and other
post-retirement plans in its financial statements. The impact of
adopting SFAS 158 resulted in a decrease in total shareholders'
equity of $361.5 million, with a corresponding decrease in total
assets of $316.9 million, and an increase in total liabilities of
$44.6 million. The adoption of SFAS 158 had no effect on the
Company's net income, cash flows or financing agreements as none of
the underlying debt covenants were impacted. * * * About
Colgate-Palmolive: Colgate-Palmolive is a leading global consumer
products company, tightly focused on Oral Care, Personal Care, Home
Care and Pet Nutrition. Colgate sells its products in over 200
countries and territories around the world under such
internationally recognized brand names as Colgate, Palmolive,
Mennen, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, Elmex,
Tom's of Maine, Ajax, Axion, Soupline, and Suavitel, as well as
Hill's Science Diet and Hill's Prescription Diet pet foods. For
more information about Colgate's global business, visit the
Company's web site at http://www.colgate.com/. The Company's annual
meeting of shareholders is currently scheduled for Thursday, May 3,
2007. This press release and the related webcast (other than
historical information) may contain forward-looking statements.
Actual events or results may differ materially from those
statements. Investors should consult the Company's filings with the
Securities and Exchange Commission (including the information set
forth under the captions "Risk Factors" and "Cautionary Statement
on Forward-Looking Statements" in the Company's Form 10-K for the
year ended December 31, 2005) for information about factors that
could cause such differences. Copies of these filings may be
obtained upon request from the Company's Investor Relations
Department or the Company's web site at http://www.colgate.com/.
Non-GAAP Financial Measures The following provides information
regarding the non-GAAP measures used in this earnings release: To
supplement Colgate's condensed consolidated financial statements
presented in accordance with accounting principles generally
accepted in the United States of America (GAAP), the Company has
disclosed non-GAAP measures of operating results that exclude
certain items. Gross profit margin, operating profit, operating
profit margin, effective tax rate, net income, and earnings per
share are discussed in this release both as reported (on a GAAP
basis) and excluding the impact of certain items reported in the
corporate segment, as explained below: -- The restructuring charges
relate to the restructuring program that began in the fourth
quarter of 2004 and is expected to be substantially completed by
2008 (the "2004 Restructuring Program"). These restructuring
charges include separation-related costs, incremental depreciation
and asset write-downs, and other costs related to the
implementation of the 2004 Restructuring Program. In light of their
nature and magnitude, the Company believes these items should be
presented separately to enhance an investor's overall understanding
of its ongoing operations. -- The incremental stock-based
compensation charge, which pertains only to 2006, reflects an
incremental non-cash charge associated with the Company's adoption
of Financial Accounting Standards Board Statement of Financial
Accounting Standards (SFAS) No. 123R, "Share-Based Payment" (SFAS
123R). The Company adopted SFAS 123R effective January 1, 2006
using the modified prospective transition method and therefore has
not restated prior periods' results. However, as required by SFAS
123R, the Company recorded an incremental stock- based compensation
charge related to the expensing of stock options and the
accelerated expense recognition of restricted stock awards granted
to retirement eligible individuals in the results for the three and
twelve months ended December 31, 2006. To enhance an investor's
ability to make period over period comparisons, the Company
believes this item should be presented separately for as long as
the prior period does not include the charge. -- The 2006 gain on
the sale of the Company's household bleach business in Canada. To
enhance an investor's ability to make period over period
comparisons, the Company believes this item should be presented
separately since the prior period does not include the gain. -- The
three Other Items, which pertain only to 2005, are comprised of the
gain on sale of the Company's heavy-duty laundry detergent business
in North America, an income tax charge for incremental repatriation
of foreign earnings related to the American Jobs Creation Act and a
pension charge associated with the remeasurement of certain pension
obligations as required by SFAS No. 88, "Employers' Accounting for
Settlement and Curtailments of Defined Benefit Pension Plans and
for Termination Benefits". The pension charge was a result of the
conversion of one of the Company's international pension plans to a
defined contribution plan for all eligible participants and a lump
sum payment of normal retirement benefits associated with a
retirement plan in the United States. The amount of each such
excluded item for the three and twelve months ended December 31,
2005 is set forth in the table entitled "Supplemental Consolidated
Income Statement Information - Restructuring and Other Items"
included with this release. In light of their nature and magnitude,
the Company believes that these three Other Items should be
presented separately to enhance an investor's overall understanding
of its ongoing operations. Management believes these non-GAAP
financial measures provide useful information to investors
regarding the underlying business trends and performance of the
Company's ongoing operations and are useful for period over period
comparisons of such operations. The Company uses these financial
measures internally in its budgeting process and as factors in
determining compensation. While the Company believes that these
financial measures are useful in evaluating the Company's business,
this information should be considered as supplemental in nature and
is not meant to be considered in isolation or as a substitute for
the related financial information prepared in accordance with GAAP.
In addition, these non-GAAP financial measures may not be the same
as similar measures presented by other companies. See "Consolidated
Income Statement and Supplemental Information - Reconciliation
Excluding the 2004 Restructuring Program and Other Items" for the
three months ended December 31, 2006 and 2005 and the twelve months
ended December 31, 2006 and 2005 included with this release for a
reconciliation of these financial measures to the related GAAP
measures. Sales and unit volume growth, both worldwide and in
relevant geographic divisions, and operating profit in certain
geographic divisions are discussed in this release both as reported
and excluding divestments. Management believes this provides useful
information to investors as it allows comparisons of sales growth
and volume growth and operating profit from ongoing operations. See
"Geographic Sales Analysis, Percentage Changes - Fourth Quarter
2006 vs. 2005" for a comparison of sales excluding divestments to
sales as reported in accordance with GAAP. The Company defines free
cash flow before dividends as net cash provided by operations less
capital expenditures. As management uses this measure to evaluate
the Company's ability to satisfy current and future obligations,
repurchase stock, pay dividends and fund future business
opportunities, the Company believes that it provides useful
information to investors. Free cash flow before dividends is not a
measure of cash available for discretionary expenditures since the
Company has certain non-discretionary obligations such as debt
service that are not deducted from the measure. Free cash flow
before dividends is not a GAAP measurement and may not be
comparable to similarly titled measures reported by other
companies. (See attached tables for fourth quarter results.) Table
1 Colgate-Palmolive Company Consolidated Income Statement and
Supplemental Information Reconciliation Excluding the 2004
Restructuring Program and Other Items For the Three Months Ended
December 31, 2006 and 2005 (in Millions Except Per Share Amounts)
(Unaudited) 2006 Excluding Restruct- Gain on Adoption uring, As
Restruct- Bleach Impact of Gain and Reported uring Sale SFAS 123R
SFAS 123R Net sales $3,209.1 $- $- $- $3,209.1 Cost of sales
1,432.5 39.4 - - 1,393.1 Gross profit 1,776.6 (39.4) - - 1,816.0
Gross profit margin 55.4% 56.6% Selling, general and administrative
expenses 1,145.0 15.5 - 12.4 1,117.1 Other (income) expense, net
(1.1) 22.8 (46.5) - 22.6 Operating profit 632.7 (77.7) 46.5 (12.4)
676.3 Operating profit margin 19.7% 21.1% Interest expense, net
38.9 - - - 38.9 Income before income taxes 593.8 (77.7) 46.5 (12.4)
637.4 Provision for income taxes 192.6 (12.6) 8.3 (3.6) 200.5
Effective tax rate 32.4% 31.5% Net income 401.2 (65.1) 38.2 (8.8)
436.9 Earnings per common share Basic $0.77 $(0.13) $0.08 $(0.02)
$0.84 Diluted $0.73 $(0.12) $0.07 $(0.02) $0.80 Average common
shares outstanding Basic 514.4 514.4 514.4 514.4 514.4 Diluted
549.6 549.6 549.6 549.6 549.6 Table 1 Colgate-Palmolive Company
Consolidated Income Statement and Supplemental Information
Reconciliation Excluding the 2004 Restructuring Program and Other
Items For the Three Months Ended December 31, 2006 and 2005 (in
Millions Except Per Share Amounts) (Unaudited) 2005 Excluding
Restructuring Restructuring As Reported & Other (a) & Other
Net sales $2,904.6 $- $2,904.6 Cost of sales 1,319.9 40.7 1,279.2
Gross profit 1,584.7 (40.7) 1,625.4 Gross profit margin 54.6% 56.0%
Selling, general and administrative expenses 1,010.3 1.3 1,009.0
Other (income) expense, net (2.6) (30.3) 27.7 Operating profit
577.0 (11.7) 588.7 Operating profit margin 19.9% 20.3% Interest
expense, net 36.7 - 36.7 Income before income taxes 540.3 (11.7)
552.0 Provision for income taxes 179.1 7.7 171.4 Effective tax rate
33.1% 31.1% Net income 361.2 (19.4) 380.6 Earnings per common share
Basic $0.68 $(0.04) $0.72 Diluted $0.65 $(0.04) $0.69 Average
common shares outstanding Basic 517.2 517.2 517.2 Diluted 552.8
552.8 552.8 (a) See Supplemental Consolidated Income Statement
Information - Restructuring and Other Items for details. Note:
Basic and diluted earnings per share for the "As Reported" and
"Excluding Restructuring, Gain on Bleach Sale and SFAS 123R" are
computed independently for each quarter and the year to date
presented. As a result of changes in shares outstanding during the
year and rounding, the sum of the four quarters' earnings per share
may not necessarily equal the earnings per share for the year to
date. In addition, the impact of "Restructuring", "Gain on Bleach
Sale" and the "Adoption Impact of SFAS 123R" in 2006 on the basic
and diluted earnings per share may not necessarily equal the
earnings per share if calculated independently as a result of
rounding. Table 2 Colgate-Palmolive Company Consolidated Income
Statement and Supplemental Information Reconciliation Excluding the
2004 Restructuring Program and Other Items For the Twelve Months
Ended December 31, 2006 and 2005 (in Millions Except Per Share
Amounts) (Unaudited) 2006 Excluding Restruct- Gain on Adoption
uring, As Restruct- Bleach Impact of Gain and Reported uring Sale
SFAS 123R SFAS 123R Net sales $12,237.7 $- $- $- $12,237.7 Cost of
sales 5,536.1 196.2 - - 5,339.9 Gross profit 6,701.6 (196.2) - -
6,897.8 Gross profit margin 54.8% 56.4% Selling, general and
administrative expenses 4,355.2 46.1 - 69.8 4,239.3 Other (income)
expense, net 185.9 153.1 (46.5) - 79.3 Operating profit 2,160.5
(395.4) 46.5 (69.8) 2,579.2 Operating profit margin 17.7% 21.1%
Interest expense, net 158.7 - - - 158.7 Income before income taxes
2,001.8 (395.4) 46.5 (69.8) 2,420.5 Provision for income taxes
648.4 (109.1) 8.3 (21.7) 770.9 Effective tax rate 32.4% 31.8% Net
income 1,353.4 (286.3) 38.2 (48.1) 1,649.6 Earnings per common
share Basic $2.57 $(0.56) $0.07 $(0.09) $3.15 Diluted $2.46 $(0.52)
$0.07 $(0.09) $3.00 Average common shares outstanding Basic 515.2
515.2 515.2 515.2 515.2 Diluted 550.5 550.5 550.5 550.5 550.5 Table
2 Colgate-Palmolive Company Consolidated Income Statement and
Supplemental Information Reconciliation Excluding the 2004
Restructuring Program and Other Items For the Twelve Months Ended
December 31, 2006 and 2005 (in Millions Except Per Share Amounts)
(Unaudited) 2005 Excluding Restructuring Restructuring As Reported
& Other (a) & Other Net sales $11,396.9 $- $11,396.9 Cost
of sales 5,191.9 100.2 5,091.7 Gross profit 6,205.0 (100.2) 6,305.2
Gross profit margin 54.4% 55.3% Selling, general and administrative
expenses 3,920.8 1.8 3,919.0 Other (income) expense, net 69.2
(33.1) 102.3 Operating profit 2,215.0 (68.9) 2,283.9 Operating
profit margin 19.4% 20.0% Interest expense, net 136.0 - 136.0
Income before income taxes 2,079.0 (68.9) 2,147.9 Provision for
income taxes 727.6 46.3 681.3 Effective tax rate 35.0% 31.7% Net
income 1,351.4 (115.2) 1,466.6 Earnings per common share Basic
$2.54 $(0.22) $2.76 Diluted $2.43 $(0.21) $2.64 Average common
shares outstanding Basic 520.5 520.5 520.5 Diluted 556.5 556.5
556.5 (a) See Supplemental Consolidated Income Statement
Information - Restructuring and Other Items for details. Note:
Basic and diluted earnings per share for the "As Reported" and
"Excluding Restructuring, Gain on Bleach Sale and SFAS 123R" are
computed independently for each quarter and the year to date
presented. As a result of changes in shares outstanding during the
year and rounding, the sum of the four quarters' earnings per share
may not necessarily equal the earnings per share for the year to
date. In addition, the impact of "Restructuring", "Gain on Bleach
Sale" and the "Adoption Impact of SFAS 123R" in 2006 on the basic
and diluted earnings per share may not necessarily equal the
earnings per share if calculated independently as a result of
rounding. Table 3 Colgate-Palmolive Company Supplemental
Consolidated Income Statement Information Restructuring and Other
Items For the Three and Twelve Months Ended December 31, 2005
(Dollars in Millions) (Unaudited) Three Months Ended December 31,
2005 Tax on Post- Incre- 2004 retirement mental Total Restruct-
Gain on Remeasure- Remit- Restruct- uring Detergent ment tances
uring Program Sales Charges (AJCA) & Other Net sales $- $- $-
$- $- Cost of sales 40.7 - - - 40.7 Gross profit (40.7) - - -
(40.7) Selling, general and administrative expenses 1.3 - - - 1.3
Other (income) expense, net 15.3 (54.8) 9.2 - (30.3) Operating
profit (57.3) 54.8 (9.2) - (11.7) Interest expense, net - - - - -
Income before income taxes (57.3) 54.8 (9.2) - (11.7) Provision for
income taxes (15.4) 21.9 (3.2) 4.4 7.7 Net income (41.9) 32.9 (6.0)
(4.4) (19.4) Year Ended December 31, 2005 Tax on Post- Incre- 2004
retirement mental Total Restruct- Gain on Remeasure- Remit-
Restruct- uring Detergent ment tances uring Program Sales Charges
(AJCA) & Other Net sales $- $- $- $- $- Cost of sales 100.2 - -
- 100.2 Gross profit (100.2) - - - (100.2) Selling, general and
administrative expenses 1.8 - - - 1.8 Other (income) expense, net
80.8 (147.9) 34.0 - (33.1) Operating profit (182.8) 147.9 (34.0) -
(68.9) Interest expense, net - - - - - Income before income taxes
(182.8) 147.9 (34.0) - (68.9) Provision for income taxes (37.7)
54.4 (11.3) 40.9 46.3 Net income (145.1) 93.5 (22.7) (40.9) (115.2)
Table 4 Colgate-Palmolive Company Condensed Consolidated Balance
Sheets As of December 31, 2006 and 2005 (Dollars in Millions)
(Unaudited) December 31, December 31, 2006 2005 Cash and cash
equivalents $489.5 $340.7 Receivables, net 1,523.2 1,309.4
Inventories 1,008.4 855.8 Other current assets 279.9 251.2
Property, plant and equipment, net 2,696.1 2,544.1 Other assets,
including goodwill and intangibles 3,140.9 3,205.9 Total assets
$9,138.0 $8,507.1 Total debt 3,671.2 3,446.2 Other current
liabilities 2,518.3 2,214.8 Other non-current liabilities 1,537.6
1,496.0 Total liabilities 7,727.1 7,157.0 Total shareholders'
equity 1,410.9 1,350.1 Total liabilities and shareholders' equity
$9,138.0 $8,507.1 Supplemental Balance Sheet Information Debt less
cash and marketable securities* $3,170.2 $3,095.2 Working capital %
of sales 2.3% 1.7% * Marketable securities of $11.5 and $10.3 as of
December 31, 2006 and 2005, respectively, are included in Other
current assets. Table 5 Colgate-Palmolive Company Condensed
Consolidated Statements of Cash Flows For the years ended December
31, 2006 and 2005 (Dollars in Millions) (Unaudited) 2006 2005
Operating Activities Net income $1,353.4 $1,351.4 Adjustments to
reconcile net income to net cash provided by operations:
Restructuring, net of cash 145.4 111.6 Depreciation and
amortization 328.7 329.3 Gain before tax on sale of non-core
product lines (46.5) (147.9) Stock-based compensation expense 116.9
41.1 Cash effects of changes in: Receivables (116.0) (24.1)
Inventories (118.5) (46.8) Accounts payable and other accruals
149.9 152.7 Other non-current assets and liabilities 8.2 17.1 Net
cash provided by operations 1,821.5 1,784.4 Investing Activities
Capital expenditures (476.4) (389.2) Payment for acquisitions, net
of cash acquired (200.0) (38.5) Sale of non-core product lines 55.0
215.6 Other 1.0 (8.6) Net cash used in investing activities (620.4)
(220.7) Financing Activities Principal payments on debt (1,332.0)
(2,100.3) Proceeds from issuance of debt 1,471.1 2,021.9 Payments
to outside investors - (89.7) Dividends paid (677.8) (607.2)
Purchases of treasury shares (884.7) (796.2) Proceeds from exercise
of stock options and excess tax benefits 364.4 47.1 Net cash used
in financing activities (1,059.0) (1,524.4) Effect of exchange rate
changes on cash and cash equivalents 6.7 (18.2) Net increase in
Cash and cash equivalents 148.8 21.1 Cash and cash equivalents at
beginning of period 340.7 319.6 Cash and cash equivalents at end of
period $489.5 $340.7 Supplemental Cash Flow Information Free cash
flow before dividends (net cash provided by operations less capital
expenditures) Net cash provided by operations $1,821.5 $1,784.4
Less: Capital expenditures (476.4) (389.2) Free cash flow before
dividends $1,345.1 $1,395.2 Income taxes paid $647.9 $584.3 Table 6
Colgate-Palmolive Company Segment Information For the Three and
Twelve Months Ended December 31, 2006 and 2005 (Dollars in
Millions) (Unaudited) Three Months Ended Twelve Months Ended
December 31, December 31, 2006 2005 2006 2005 Net sales Oral,
Personal and Home Care North America $657.7 $614.6 $2,590.8
$2,509.8 Latin America 816.4 714.9 3,019.5 2,623.8 Europe/South
Pacific 759.6 674.9 2,952.3 2,845.9 Greater Asia/Africa 516.4 489.2
2,006.0 1,897.2 Total Oral, Personal and Home Care $2,750.1
$2,493.6 $10,568.6 $9,876.7 Pet Nutrition 459.0 411.0 1,669.1
1,520.2 Total Net sales $3,209.1 $2,904.6 $12,237.7 $11,396.9 Three
Months Ended Twelve Months Ended December 31, December 31, 2006
2005 2006 2005 Operating profit Oral, Personal and Home Care North
America $131.4 $133.0 $550.1 $545.7 Latin America 221.0 183.7 872.9
698.0 Europe/South Pacific 186.1 149.2 681.2 619.8 Greater
Asia/Africa 79.4 68.3 278.7 245.5 Total Oral, Personal and Home
Care $617.9 $534.2 $2,382.9 $2,109.0 Pet Nutrition 129.5 113.1
447.9 412.8 Corporate (114.7) (70.3) (670.3) (306.8) Total
Operating profit $632.7 $577.0 $2,160.5 $2,215.0 Effective January
1, 2006, the Company modified the geographic reporting structure of
its Oral, Personal and Home Care segment in order to address
evolving markets and more closely align countries with similar
consumer needs and retail trade structures. Management
responsibility for Eastern European operations including Russia,
Turkey, Ukraine and Belarus, transferred to Greater Asia management
and responsibility for countries in the South Pacific, including
Australia, was transferred to European management. The financial
information for 2005 has been reclassified to conform to the new
reporting structure. The Company evaluates segment performance
based on several factors, including Operating profit. The Company
uses Operating profit as a measure of operating segment performance
because it excludes the impact of corporate- driven decisions
related to interest expense and income taxes. Corporate operations
include research and development costs, unallocated overhead costs,
stock-based compensation related to stock options and restricted
stock awards, restructuring and related implementation costs, and
gains and losses on sales of non-core brands and assets. Corporate
operating expenses for the three and twelve months ended December
31, 2006 include $77.7 and $395.4 of charges related to the
Company's 2004 Restructuring Program, respectively. Corporate
operating expenses for the three and twelve months ended December
31, 2006 include an incremental charge of $12.4 and $69.8 related
to the adoption of SFAS 123R, respectively. Additionally, Corporate
operating expenses for the three and twelve months ended December
31, 2006 were reduced by a $46.5 gain related to the sale of the
Company's Household Bleach Business in Canada. Corporate operating
expenses for the three and twelve months ended December 31, 2005
include $57.3 and $182.8 of charges related to the Company's 2004
Restructuring Program, respectively. Additionally, Corporate
operating expenses for the three and twelve months ended December
31, 2005 were reduced by $54.8 and $147.9 of gains related to the
sales of the Company's detergent brands in North America and
Southeast Asia, respectively, and the twelve months ended December
31, 2005 were increased by FAS 88 pension charges of $24.8. Latin
American operating profit for the three and twelve months ended
December 31, 2005 were reduced by a one-time charge of $9.2
associated with a postretirement obligation. Table 7
Colgate-Palmolive Company Geographic Sales Analysis Percentage
Changes - Fourth Quarter 2006 vs 2005 December 31, 2006 (Unaudited)
COMPONENTS OF SALES CHANGE FOURTH QUARTER Pricing 4th Qtr 4th Qtr
Coupons Sales Sales Consumer & Change Change Ex-Divested Trade
Region As Reported Ex-Divestment Volume Incentives Exchange Total
Company 10.5% 11.5% 8.0% 1.0% 2.5% Europe/ South Pacific 12.5%
12.5% 3.5% 0.5% 8.5% Latin America 14.0% 14.0% 12.0% 2.0% 0.0%
Greater Asia/Africa 5.5% 10.0% 7.0% 1.0% 2.0% Total International
11.5% 12.5% 7.5% 1.5% 3.5% North America 7.0% 7.0% 8.5% -2.0% 0.5%
Total CP Products 10.5% 11.0% 7.5% 0.5% 3.0% Hill's 11.5% 11.5%
6.5% 3.5% 1.5% Table 7 Colgate-Palmolive Company Geographic Sales
Analysis Percentage Changes - Fourth Quarter 2006 vs 2005 December
31, 2006 (Unaudited) COMPONENTS OF SALES CHANGE TWELVE MONTHS
Pricing 12 Months 12 Months Coupons Sales Sales Consumer &
Change Change Ex-Divested Trade Region As Reported Ex-Divestment
Volume Incentives Exchange Total Company 7.5% 9.0% 7.0% 1.5% 0.5%
Europe/ South Pacific 3.5% 4.5% 5.0% -1.0% 0.5% Latin America 15.0%
15.0% 10.0% 4.0% 1.0% Greater Asia/Africa 5.5% 10.5% 7.5% 2.0% 1.0%
Total International 8.5% 9.5% 7.0% 1.5% 1.0% North America 3.0%
6.5% 7.0% -1.0% 0.5% Total CP Products 7.0% 9.0% 7.0% 1.0% 1.0%
Hill's 10.0% 10.0% 6.0% 4.5% -0.5% NOTE: The impact of the May 2006
acquisition of Tom's of Maine on North American sales and volume
was 2.0% and 1.0% in the fourth quarter and twelve months,
respectively. DATASOURCE: Colgate-Palmolive Company CONTACT: Bina
Thompson, +1-212-310-3072, or Hope Spiller, +1-212-310-2291, both
of Colgate-Palmolive Web site: http://www.colgate.com/
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