Operating and Net Profit Up Double-Digit NEW YORK, July 25, 2007
/PRNewswire-FirstCall/ -- Colgate-Palmolive Company (NYSE:CL) today
announced excellent worldwide sales and unit volume growth together
with double-digit earnings growth for second quarter 2007.
Worldwide sales grew 13.0% to $3,405.4 million and unit volume grew
8.0%, as reported. Excluding divestments, worldwide sales and unit
volume grew 13.5% and 8.5%, respectively. Global pricing increased
0.5%, and foreign exchange added 4.5%. The very strong top-line
growth was supported by a 22% increase in worldwide advertising
spending to an all-time record level. Second quarter 2007 results
include $41.7 million of aftertax charges related to the 2004
Restructuring Program. In the year ago quarter, restructuring
charges were $115.9 million aftertax. As reported, gross profit
margin increased 180 basis points to 56.0%. Excluding restructuring
charges, gross profit margin increased 100 basis points to a record
57.1%. Operating profit as reported increased 43% versus second
quarter 2006. Excluding restructuring charges, operating profit
rose 13% to $713.0 million. On the same basis, operating profit
margin was 20.9% of sales, even with the year ago period. Reported
net income and diluted earnings per share in second quarter 2007
were $415.8 million and $.76, respectively. Excluding restructuring
charges, net income in the quarter increased 15% versus second
quarter 2006 to a record $457.5 million, and diluted earnings per
share increased 17% to $.84, also a record. In second quarter 2006,
reported net income and diluted earnings per share were $283.6
million and $.51, respectively, and net income and diluted earnings
per share excluding restructuring charges were $399.5 million and
$.72, respectively. Net cash provided by operations year to date
increased by 29% to $899.0 million after building selected
inventories to support the business during factory closings related
to the 2004 Restructuring Program. End of second quarter 2007
working capital improved to 3.3% of sales versus 3.9% in the
comparable 2006 period. Ian Cook, President and CEO commented, "We
are delighted that our excellent growth momentum continued this
quarter on both the top and bottom lines. This is the third
consecutive quarter of double-digit sales and earnings per share
growth, and the 17% increase in earnings per share, excluding
restructuring charges, is the highest quarterly increase we have
seen in over a year. We are especially encouraged that every
operating division achieved record sales and operating profit for
the second quarter. "Pleasingly, the strong improvement in gross
profit margin worldwide and other savings programs funded a
significant increase in advertising supporting Colgate brands while
still meeting or beating recently upwardly revised external
expectations for earnings per share growth for the quarter. "We
believe these very strong results reflect our continued focus on
our strategic initiatives which include getting closer to consumers
everywhere, strengthening our partnerships with the dental and
veterinary professions and our customers, fostering innovation in
all areas of our business and getting more effective and efficient
in everything we do." Every operating division had meaningfully
higher advertising spending, which drove market share gains across
categories. Colgate's global toothpaste leadership strengthened
during the quarter with market share gains in key countries around
the world including Mexico, Brazil, China, India, France and
Russia. Colgate's leading share of the worldwide manual toothbrush
market also strengthened during the quarter to another record high.
Reuben Mark, Chairman said, "This excellent quality quarter is
further evidence that Ian and the new generation of Colgate leaders
around the world are sharply focused as they pursue the strategic
initiatives they established more than two years ago. I believe we
will continue to see the power of these strategies to further build
Colgate's sales and profits." Mr. Cook further commented, "As we
look to the balance of the year we are confident that the strong
top-line growth will continue, driven by our very full new product
pipeline around the world with an array of impactful integrated
marketing campaigns to support them. We expect gross profit margin,
excluding restructuring charges, to be up within our targeted range
of 75 to 125 basis points for this year and next year as well, as a
result of our ongoing cost-savings initiatives, the benefits from
restructuring, efficiencies in promotional programs and a continued
shift towards higher- margin products. "All this combined with this
quarter's strong results adds to our confidence that we will
deliver double-digit earnings per share growth for 2007." At 11:00
a.m. ET today, Colgate will host a conference call to elaborate on
second 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. North America
(20% of Company Sales) Positive growth continued in North America,
fueled by new product sales and market share gains. As reported,
sales and unit volume grew 3.5% and 3.0%, respectively. Excluding
the divestiture of the Canadian household bleach business, sales
and unit volume grew 5.0% and 4.5%, respectively, driven by strong
oral care volume growth in the United States, up 7% in the quarter.
Pricing added 0.5% and foreign exchange was flat with the year ago
period. North American operating profit increased 13% even after a
significant increase in advertising during the quarter. In the
U.S., new product launches in the super-premium category are
contributing to market share gains in oral care. Colgate Total
Advanced Clean toothpaste, supported by a new integrated marketing
campaign featuring Brooke Shields, helped drive market share for
Colgate Total toothpaste up 1.1 share points versus year ago to
15.0% in the second quarter. Colgate Max Fresh BURST toothpaste,
infused with 50% more mini breath strips, is also off to a strong
start helping to drive market share for the Max Fresh equity to a
record 4.0% in the second quarter. Colgate's share of the manual
toothbrush market is 25.7% year to date, up 2.4 share points versus
year ago, fueled by the continued success of Colgate 360 degree
manual toothbrush. Successful new products contributing to growth
in other categories include Irish Spring body wash for men,
Softsoap brand Nutra-Oil moisturizing body wash, Mennen Speed Stick
Gametime deodorant and Palmolive Scrub Buster with Micro Beads dish
liquid. Fabuloso liquid cleaner and Suavitel fabric conditioner
each achieved record high market shares during the quarter.
Positive growth momentum in the U.S. is expected to continue. New
products planned for launch in the third quarter include Suavitel
Aroma Sensations fabric conditioner, Softsoap brand Nutra-Oil and
Softsoap brand Black Raspberry and Vanilla liquid hand soaps, and
Softsoap brand Fresh Pear and Apple Blossom body wash. Latin
America (25% of Company Sales) As reported, Latin American sales
and unit volume grew 16.0% and 10.5%, respectively, in the second
quarter. Excluding the divested bleach businesses, sales and unit
volume grew 18.0% and 12.5%, respectively. This is the fourth
consecutive quarter of double-digit volume growth for Latin
America. Every market in the region contributed to the very strong
volume gains, led by Mexico, Brazil, Venezuela, Central America,
Dominican Republic, Colombia, Argentina, Chile, Peru and Ecuador.
Higher pricing added 1.0% and foreign exchange added 4.5%. Latin
American operating profit increased 12%, to an all-time record
level even after a strong double-digit increase in advertising
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 high year to date. Toothpaste
share gains were achieved in nearly every country driven by strong
sales of Colgate Total Professional Clean and Colgate Max Fresh
Citrus toothpastes and the launch of Colgate Max White toothpaste
during the quarter. Colgate's leading share of the manual
toothbrush market for the region reached another record high during
the quarter and is nearly four share points ahead of the nearest
competitor. Strong sales of Colgate 360 degree manual toothbrush
throughout the region contributed to this success. In other product
categories, Plax Alcohol Free and Plax Ice mouthwashes, Palmolive
Naturals Mint & Eucalyptus, Palmolive Nutri-Milk, Protex Deo 12
and Protex Propolis bar soaps, Lady Speed Stick Double Defense
deodorant, Palmolive Caprice shampoo and Palmolive Nutri-Milk
shower gel contributed to market share gains in the region.
Europe/South Pacific (25% of Company Sales) Europe/South Pacific
sales increased 17.0% to a record level, and unit volume grew 9.5%.
Pricing was negative 1.5% and foreign exchange added 9.0%. Volume
gains were very strong throughout the region led by the Gaba
business, France, the United Kingdom, the Nordic region, Germany,
Greece, Spain, Belgium, Holland, Poland, Adria, Romania, Australia
and New Zealand. Operating profit for the region grew 15% even
after a significant increase in advertising during the quarter.
Colgate increased its oral care leadership in Europe/South Pacific
led by toothpaste market share gains in France, Germany, Italy,
Spain, Greece, Austria, Norway, Romania, Denmark, Belgium, Poland
and Australia. Successful premium products driving these share
gains in both the therapeutic and sensorial segments include
Colgate Total, Colgate Time Control, Colgate Sensitive Multi
Protection and Colgate Max Fresh toothpastes. Gaba's toothpaste
market share also grew in many markets across the region, in both
the food and pharmacy channels. In the manual toothbrush category,
strong sales of Colgate 360 degree, Colgate 360 degree Sensitive
and Colgate Max Fresh toothbrushes strengthened Colgate's market
leadership in this category for the region. Recent premium
innovations contributing to gains in other product categories
include Palmolive Pure Cashmere and Palmolive BodYogurt body
washes, Colgate Plax Gentle Care mouth rinse, and Ajax Professional
bucket dilutable and Ajax Professional glass cleaners. Greater
Asia/Africa (17% of Company Sales) Greater Asia/Africa sales and
unit volume increased 15.5% and 9.0%, respectively. The strong
volume gains were led by Thailand, India, Philippines, Vietnam,
Russia, Turkey and South Africa, and unit volume in Greater China
increased 20% during the quarter. For the division as a whole,
pricing increased 1.0% and foreign exchange added 5.5%. Operating
profit for the region increased 28%, even after a sizable increase
in advertising spending during the quarter. Colgate strengthened
its oral care leadership in the Greater Asia region with 10 out of
14 countries reporting toothpaste market share gains versus year
ago led by China, India, Philippines, Ukraine, Russia and the rest
of the CIS countries. Colgate's share of the manual toothbrush
market also strengthened throughout the region with many countries
achieving record high shares in the category. Successful new
products driving the oral care growth include Colgate Herbal
Seabuckthorn, Colgate Max Fresh Citrus Blast and Colgate Max White
toothpastes and Colgate 360 degree and Colgate Twister Fresh manual
toothbrushes. New products contributing to growth in other
categories in the region include Palmolive Thermal Spa Seabuckthorn
shower gel, bar soap and liquid hand soap, Palmolive Pure Cashmere
shower cream and bar soap, Protex Icy Cool bar soap and Lady Speed
Stick Invisible Dry deodorant. Hill's (13% 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 4.5%, respectively,
during the quarter. Pricing increased 5.5% and foreign exchange
added 1.5%. Operating profit increased 13% during the quarter.
Consumption growth continued in key specialty pet channel accounts,
with particular strength around Science Diet Canine Small Bites and
Science Diet Canine Lamb & Rice Small Bites. Science Diet
Indoor Cat and Science Diet Light were strong performers in feline.
In the U.S. veterinary channel, the relaunch of Prescription Diet
c/d Multicare Feline, a diet for the nutritional management of cats
with feline lower urinary tract disease, and Prescription Diet r/d
and w/d Feline and Canine in the therapeutic weight category
contributed to growth. Internationally, growth was strong led by
the Nordic region, Russia, South Africa, the United Kingdom, Italy,
the Benelux countries, Spain, Portugal and France. New pet food
products contributing to the international growth include
Prescription Diet Feline Chunks in Gravy pouches, Prescription Diet
c/d Feline in new chicken and seafood flavors, Science Plan Feline
Chunks in Gravy pouches and Science Plan Neutered Cat, a new
veterinary exclusive product. * * * 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. For more information about Colgate's global
business, visit the Company's web site at http://www.colgate.com/.
Unless otherwise indicated, all market share data included in this
press release is as measured by ACNielsen. This press release and
the related webcast (other than historical information) may contain
forward-looking statements. Such statements may relate, for
example, to sales or volume growth, profit growth, earnings growth,
financial goals, cost-reduction plans, estimated charges and
savings associated with the 2004 Restructuring Program and new
product introductions. These statements are made on the basis of
our views and assumptions as of this time and we undertake no
obligation to update these statements. We caution investors that
any such forward-looking statements are not guarantees of future
performance and that 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, 2006) for
information about certain 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. Net sales, cost of
sales, gross profit margin, selling, general and administrative
expenses, operating profit, operating profit margin, other (income)
expense, provision for income taxes and the 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 three Other
Items, which pertained to the first quarter of 2007, are comprised
of the gain on sale of the Company's household bleach business in
Latin America, a charge related to the limited voluntary product
recall of certain Hill's feline products, and tax adjustments which
consist of the reduction of a tax loss carryforward valuation
allowance in Brazil, partially offset by tax provisions for the
recapitalization of certain overseas subsidiaries. The amount of
each such excluded item for the six months ended June 30, 2007 is
set forth in the table entitled "Supplemental Consolidated Income
Statement Information - 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 and six months ended June 30, 2007 and 2006 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 - Second quarter 2007 vs. 2006" 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 second quarter results.)
Table 1 Colgate-Palmolive Company Consolidated Income Statement and
Supplemental Information Reconciliation Excluding the 2004
Restructuring Program For the Three Months Ended June 30, 2007 and
2006 (in Millions Except Per Share Amounts) (Unaudited) 2007
Excluding As Reported Restructuring Restructuring Net sales
$3,405.4 $- $3,405.4 Cost of sales 1,497.0 34.7 1,462.3 Gross
profit 1,908.4 (34.7) 1,943.1 Gross profit margin 56.0% 57.1%
Selling, general and administrative expenses 1,223.7 10.0 1,213.7
Other (income) expense, net 27.1 10.7 16.4 Operating profit 657.6
(55.4) 713.0 Operating profit margin 19.3% 20.9% Interest expense,
net 40.4 - 40.4 Income before income taxes 617.2 (55.4) 672.6
Provision for income taxes 201.4 (13.7) 215.1 Effective tax rate
32.6% 32.0% Net income 415.8 (41.7) 457.5 Earnings per common share
Basic $0.80 $(0.08) $0.88 Diluted $0.76 $(0.08) $0.84 Average
common shares outstanding Basic 511.0 511.0 511.0 Diluted 544.2
544.2 544.2 Table 1 Colgate-Palmolive Company Consolidated Income
Statement and Supplemental Information Reconciliation Excluding the
2004 Restructuring Program For the Three Months Ended June 30, 2007
and 2006 (in Millions Except Per Share Amounts) (Unaudited) 2006
Excluding As Reported Restructuring Restructuring Net sales
$3,014.3 $- $3,014.3 Cost of sales 1,381.2 57.7 1,323.5 Gross
profit 1,633.1 (57.7) 1,690.8 Gross profit margin 54.2% 56.1%
Selling, general and administrative expenses 1,052.3 14.1 1,038.2
Other (income) expense, net 119.9 96.1 23.8 Operating profit 460.9
(167.9) 628.8 Operating profit margin 15.3% 20.9% Interest expense,
net 41.3 - 41.3 Income before income taxes 419.6 (167.9) 587.5
Provision for income taxes 136.0 (52.0) 188.0 Effective tax rate
32.4% 32.0% Net income 283.6 (115.9) 399.5 Earnings per common
share Basic $0.54 $(0.22) $0.76 Diluted $0.51 $(0.21) $0.72 Average
common shares outstanding Basic 515.8 515.8 515.8 Diluted 551.4
551.4 551.4 Table 2 Colgate-Palmolive Company Consolidated Income
Statement and Supplemental Information Reconciliation Excluding the
2004 Restructuring Program and Other Items For the Six Months Ended
June 30, 2007 and 2006 (in Millions Except Per Share Amounts)
(Unaudited) 2007 Excluding As Other Restructuring Reported
Restructuring Items (a) & Other Items Net sales $6,619.3 $-
$(2.1) $6,621.4 Cost of sales 2,898.7 66.4 (1.1) 2,833.4 Gross
profit 3,720.6 (66.4) (1.0) 3,788.0 Gross profit margin 56.2% 57.2%
Selling, general and administrative expenses 2,393.9 21.1 - 2,372.8
Other (income) expense, net 18.0 13.8 (36.0) 40.2 Operating profit
1,308.7 (101.3) 35.0 1,375.0 Operating profit margin 19.8% 20.8%
Interest expense, net 83.1 - - 83.1 Income before income taxes
1,225.6 (101.3) 35.0 1,291.9 Provision for income taxes 323.2
(29.7) (60.4) 413.3 Effective tax rate 26.4% 32.0% Net income 902.4
(71.6) 95.4 878.6 Earnings per common share Basic $1.74 $(0.14)
$0.19 $1.69 Diluted $1.65 $(0.13) $0.17 $1.61 Average common shares
outstanding Basic 511.8 511.8 511.8 511.8 Diluted 545.5 545.5 545.5
545.5 (a) See Table 3 "Supplemental Consolidated Income Statement
Information - Other Items" for details. Table 2 Colgate-Palmolive
Company Consolidated Income Statement and Supplemental Information
Reconciliation Excluding the 2004 Restructuring Program and Other
Items For the Six Months Ended June 30, 2007 and 2006 (in Millions
Except Per Share Amounts) (Unaudited) 2006 Excluding As Reported
Restructuring Restructuring Net sales $5,884.9 $- $5,884.9 Cost of
sales 2,688.3 109.8 2,578.5 Gross profit 3,196.6 (109.8) 3,306.4
Gross profit margin 54.3% 56.2% Selling, general and administrative
expenses 2,069.9 19.1 2,050.8 Other (income) expense, net 148.3
104.8 43.5 Operating profit 978.4 (233.7) 1,212.1 Operating profit
margin 16.6% 20.6% Interest expense, net 78.6 - 78.6 Income before
income taxes 899.8 (233.7) 1,133.5 Provision for income taxes 291.7
(71.0) 362.7 Effective tax rate 32.4% 32.0% Net income 608.1
(162.7) 770.8 Earnings per common share Basic $1.15 $(0.32) $1.47
Diluted $1.10 $(0.30) $1.40 Average common shares outstanding Basic
515.5 515.5 515.5 Diluted 550.8 550.8 550.8 Table 3
Colgate-Palmolive Company Supplemental Consolidated Income
Statement Information Other Items For the Six Months Ended June 30,
2007 (Dollars in Millions) (Unaudited) Six Months Ended June 30,
2007 Gain on Hill's Product Bleach Voluntary Tax Total Other Sale
Recall Adjustments* Items Net sales $- $(2.1) $- $(2.1) Cost of
sales - (1.1) - (1.1) Gross profit - (1.0) - (1.0) Selling, general
and administrative expenses - - - - Other (income) expense, net
(48.6) 12.6 - (36.0) Operating profit 48.6 (13.6) - 35.0 Interest
expense, net - - - - Income before income taxes 48.6 (13.6) - 35.0
Provision for income taxes 18.9 (5.4) (73.9) (60.4) Net income 29.7
(8.2) 73.9 95.4 Earnings per common share Basic $0.06 $(0.02) $0.15
$0.19 Diluted $0.05 $(0.02) $0.14 $0.17 * Reduction of tax loss
carryforward valuation allowances in Brazil of $94.6, partially
offset by tax provisions for the recapitalization of certain
overseas subsidiaries. Table 4 Colgate-Palmolive Company Condensed
Consolidated Balance Sheets As of June 30, 2007, December 31, 2006
and June 30, 2006 (Dollars in Millions) (Unaudited) June 30,
December 31, June 30, 2007 2006 2006 Cash and cash equivalents
$546.9 $489.5 $430.4 Receivables, net 1,666.5 1,523.2 1,380.7
Inventories 1,135.4 1,008.4 986.7 Other current assets 355.1 279.9
321.8 Property, plant and equipment, net 2,774.8 2,696.1 2,504.5
Other assets, including goodwill and intangibles 3,201.9 3,140.9
3,337.1 Total assets $9,680.6 $9,138.0 $8,961.2 Total debt 3,740.9
3,671.2 3,613.4 Other current liabilities 2,687.9 2,518.3 2,202.8
Other non-current liabilities 1,480.5 1,537.6 1,549.5 Total
liabilities 7,909.3 7,727.1 7,365.7 Total shareholders' equity
1,771.3 1,410.9 1,595.5 Total liabilities and shareholders' equity
$9,680.6 $9,138.0 $8,961.2 Supplemental Balance Sheet Information
Debt less cash and marketable securities* $3,163.6 $3,170.2
$3,162.4 Working capital % of sales 3.3% 2.3% 3.9% * Marketable
securities of $30.4, $11.5 and $20.6 as of June 30, 2007, December
31, 2006 and June 30, 2006, respectively, are included in Other
current assets. Table 5 Colgate-Palmolive Company Condensed
Consolidated Statements of Cash Flows For the Six Months Ended June
30, 2007 and 2006 (Dollars in Millions) (Unaudited) 2007 2006
Operating Activities Net income $902.4 $608.1 Adjustments to
reconcile net income to net cash provided by operations:
Restructuring, net of cash (7.7) 153.4 Depreciation and
amortization 161.1 162.4 Gain before tax on sale of non-core
product lines (48.6) - Stock-based compensation expense 52.3 51.0
Deferred Income Taxes (79.6) (37.5) Cash effects of changes in:
Receivables (105.5) (58.3) Inventories (101.5) (116.7) Accounts
payable and other accruals 151.5 (92.9) Other non-current assets
and liabilities (25.4) 26.4 Net cash provided by operations 899.0
695.9 Investing Activities Capital expenditures (199.6) (136.7)
Sale of non-core product lines 66.3 - Payment for acquisitions, net
of cash acquired - (104.2) Other 2.1 (11.1) Net cash used in
investing activities (131.2) (252.0) Financing Activities Principal
payments on debt (1,356.7) (932.3) Proceeds from issuance of debt
1,421.1 1,044.3 Dividends paid (364.2) (329.9) Purchases of
treasury shares (602.2) (335.7) Proceeds from exercise of stock
options and excess tax benefits 185.2 200.0 Net cash used in
financing activities (716.8) (353.6) Effect of exchange rate
changes on Cash and cash equivalents 6.4 (0.6) Net increase in Cash
and cash equivalents 57.4 89.7 Cash and cash equivalents at
beginning of period 489.5 340.7 Cash and cash equivalents at end of
period $546.9 $430.4 Supplemental Cash Flow Information Free cash
flow before dividends (Net cash provided by operations less capital
expenditures) Net cash provided by operations $899.0 $695.9 Less:
Capital expenditures (199.6) (136.7) Free cash flow before
dividends $699.4 $559.2 Income taxes paid $312.0 $392.1 Table 6
Colgate-Palmolive Company Segment Information For the Three and Six
Months Ended June 30, 2007 and 2006 (Dollars in Millions)
(Unaudited) Three Months Ended Six Months Ended June 30, June 30,
2007 2006 2007 2006 Net sales Oral, Personal and Home Care North
America $671.5 $647.4 $1,333.9 $1,265.0 Latin America 860.9 741.1
1,651.2 1,433.8 Europe/South Pacific 844.9 721.2 1,626.5 1,412.9
Greater Asia/Africa 570.3 493.8 1,118.8 977.1 Total Oral, Personal
and Home Care $2,947.6 $2,603.5 $5,730.4 $5,088.8 Pet Nutrition
457.8 410.8 888.9 796.1 Total Net sales $3,405.4 $3,014.3 $6,619.3
$5,884.9 Three Months Ended Six Months Ended June 30, June 30, 2007
2006 2007 2006 Operating profit Oral, Personal and Home Care North
America $161.6 $142.9 $313.8 $275.2 Latin America 246.9 219.9 492.2
431.1 Europe/South Pacific 187.1 163.1 365.8 315.6 Greater
Asia/Africa 87.0 68.0 168.4 133.4 Total Oral, Personal and Home
Care $682.6 $593.9 $1,340.2 $1,155.3 Pet Nutrition 122.0 107.9
237.6 211.7 Corporate (147.0) (240.9) (269.1) (388.6) Total
Operating Profit $657.6 $460.9 $1,308.7 $978.4 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. For the three months ended June 30,
2007 and 2006, Corporate operating expenses include $55.4 and
$167.9 of charges related to the Company's 2004 Restructuring
Program, respectively. For the six months ended June 30, 2007 and
2006, Corporate operating expenses include $101.3 and $233.7 of
charges related to the Company's 2004 Restructuring Program,
respectively. Additionally, Corporate operating expenses for the
six months ended June 30, 2007 were reduced by a $48.6 gain related
to the sale of the Company's household bleach business in Latin
America. As a result of a limited voluntary recall of Hill's
product in March 2007, Pet Nutrition Net sales for the six months
ended June 30, 2007 were reduced by $2.1 and Corporate operating
expenses increased by $13.6. Table 7 Colgate-Palmolive Company
Geographic Sales Analysis Percentage Changes - Second Quarter 2007
vs 2006 June 30, 2007 (Unaudited) COMPONENTS OF SALES CHANGE SECOND
QUARTER Pricing 2nd Qtr 2nd Qtr Coupons Sales Sales Consumer &
Change As Change Ex-Divested Trade Region Reported Ex-Divestment
Volume Incentives Exchange Total Company 13.0% 13.5% 8.5% 0.5% 4.5%
Europe/South Pacific 17.0% 17.0% 9.5% (1.5%) 9.0% Latin America
16.0% 18.0% 12.5% 1.0% 4.5% Greater Asia/Africa 15.5% 15.5% 9.0%
1.0% 5.5% Total International 16.5% 17.0% 10.5% 0.0% 6.5% North
America 3.5% 5.0% 4.5% 0.5% 0.0% Total CP Products 13.0% 14.0% 9.0%
0.0% 5.0% Hill's 11.5% 11.5% 4.5% 5.5% 1.5% Table 7
Colgate-Palmolive Company Geographic Sales Analysis Percentage
Changes - Second Quarter 2007 vs 2006 June 30, 2007 (Unaudited)
COMPONENTS OF SALES CHANGE SIX MONTHS Pricing 6 Months 6 Months
Coupons Sales Sales Consumer & Change As Change Ex-Divested
Trade Region Reported Ex-Divestment Volume Incentives Exchange
Total Company 12.5% 13.0% 8.5% 0.5% 4.0% Europe/South Pacific 15.0%
15.0% 7.0% (1.5%) 9.5% Latin America 15.0% 16.0% 13.0% 1.0% 2.0%
Greater Asia/Africa 14.5% 14.5% 9.0% 1.0% 4.5% Total International
15.0% 15.5% 10.0% 0.0% 5.5% North America 5.5% 6.5% 6.5% 0.0% 0.0%
Total CP Products 12.5% 13.5% 9.5% 0.0% 4.0% Hill's 11.5% 11.5%
5.0% 5.0% 1.5% DATASOURCE: Colgate-Palmolive Company CONTACT: Bina
Thompson, +1-212-310-3072, or Hope Spiller, +1-212-310-2291, both
of Colgate-Palmolive Company Web site: http://www.colgate.com/
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