Operating and Net Profit Up Double-Digit NEW YORK, October 30, 2007
/PRNewswire-FirstCall/ -- Colgate-Palmolive Company (NYSE:CL) today
announced excellent worldwide sales and unit volume growth together
with double-digit earnings growth for third quarter 2007. Worldwide
sales grew 12.0% to $3,528.2 million and unit volume grew 5.5%, as
reported. Excluding divestments, worldwide sales and unit volume
grew 13.0% and 6.5%, respectively. Global pricing increased 1.0%,
and foreign exchange added 5.5%. The very strong top-line growth
was supported by a 12% increase in worldwide advertising spending.
Third quarter 2007 results include $36.3 million of aftertax
charges related to the 2004 Restructuring Program and a $10.0
million non-cash, aftertax SFAS 88 pension charge with no such
comparable pension charge in 2006. This SFAS 88 pension charge is a
result of lump sum payments of normal retirement benefits
associated with a nonqualified retirement plan in the United
States. In the year ago quarter, restructuring charges were $58.5
million aftertax. As reported, gross profit margin increased 120
basis points to 56.2%. Excluding restructuring charges, gross
profit margin increased 80 basis points to a record 57.3% on top of
the 140 basis point improvement in the year ago period, despite
significant increases in agricultural commodity costs in the Hill's
division. Operating profit as reported increased 22% versus third
quarter 2006 to $668.8 million, 19.0% of sales. Excluding
restructuring and SFAS 88 charges, operating profit rose 16% to
$735.3 million. On the same basis, operating profit margin was
20.8% of sales, up 70 basis points versus the year ago period.
Reported net income and diluted earnings per share in third quarter
2007 were $420.1 million and $.77, respectively. Excluding
restructuring and SFAS 88 charges, net income in the quarter
increased 16% versus third quarter 2006 to a record $466.4 million,
and diluted earnings per share increased 18% to $.86, also a
record. In third quarter 2006, reported net income and diluted
earnings per share were $344.1 million and $.63, respectively, and
net income and diluted earnings per share excluding restructuring
charges were $402.6 million and $.73, respectively. Net cash
provided by operations year to date increased by 20% to $1,638.7
million after building inventories to support the business during
factory closings related to the 2004 Restructuring Program.
Colgate's strong balance sheet strengthened even further during the
period with key measures improving and net debt declining versus
third quarter 2006 and second quarter 2007. End of third quarter
2007 working capital improved to 2.4% of sales versus 2.6% in the
comparable 2006 period. Ian Cook, President and CEO commented, "We
are delighted that our excellent top and bottom line growth
momentum continued this quarter with every geographic region
delivering sales and profit increases. This is the fourth
consecutive quarter of double-digit sales and profit growth
worldwide, and our 18% increase in earnings per share, excluding
restructuring and SFAS 88 charges, is the highest quarterly
increase we have seen in over four years. "Colgate's market shares
are strong and getting stronger in key markets around the world.
Colgate strengthened its global leadership in toothpaste and manual
toothbrushes during the quarter and our global market share in both
categories increased to all-time record highs. "The gross margin
expansion and other savings programs helped fund higher advertising
spending across all operating divisions while still generating
double-digit operating profit growth worldwide. "We are of course
pleased that the excellent operating profitability delivered higher
than expected net income and earnings per share even after the
significant increase in advertising spending and absorbing a higher
than expected tax rate in the quarter." 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 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 adds to our strong
confidence that we will deliver double-digit earnings per share
growth for the balance of 2007 and full year 2008." At 11:00 a.m.
ET today, Colgate will host a conference call to elaborate on third
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 3.0% and 1.5%, respectively. Excluding
the divestiture of the Canadian household bleach business, sales
and unit volume grew 4.5% and 3.0%, respectively. Pricing increased
0.5% and foreign exchange added 1.0%. North American operating
profit increased 19% during the quarter to an all-time record
level. In the U.S., new product launches in the super-premium
category are contributing to growth in oral care. Colgate Total
Advanced Clean toothpaste, supported by an integrated marketing
campaign featuring Brooke Shields and an expansive professional
sampling program, helped drive market share for Colgate Total
toothpaste to its highest quarterly share ever at 15.3%. Colgate
Max Fresh BURST toothpaste, infused with 50% more mini breath
strips, continues to build incremental market share for the Max
Fresh equity, now at 3.9% year to date. Colgate's share of the
manual toothbrush market is 25.6% year to date, up 2.0 share points
versus year ago, fueled by the continued success of Colgate 360
degree manual toothbrush and its latest variant Colgate 360 degree
Sensitive. Positive growth momentum for both sales and profits in
North America is expected to continue. Successful new products
contributing to growth in other categories include Irish Spring
body wash for men, Softsoap brand Nutra-Oil moisturizing body wash
and Mennen Speed Stick 24/7 Gametime deodorant. Fabuloso liquid
cleaner, Suavitel fabric conditioner and Irish Spring bar soap each
achieved record high market shares year to date. New products
planned for launch in the fourth quarter include Softsoap brand SPA
Radiant body wash and liquid hand soap, Irish Spring Moisture Blast
and Irish Spring Reviving Mint body washes, Softsoap brand Pink
Grapefruit liquid hand soap and Mennen Speed Stick 24/7 Momentum
deodorant. Latin America (25% of Company Sales) As reported, Latin
American sales and unit volume grew 16.0% and 7.5%, respectively,
in the third quarter. Excluding the divested bleach businesses,
sales and unit volume grew 18.0% and 9.5%, respectively. All
significant markets in the region contributed to the very strong
volume gains, led by Mexico, Brazil, Venezuela, Central America,
Argentina and Ecuador. Higher pricing added 3.0% and foreign
exchange added 5.5%. Latin American operating profit increased 13%,
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 driven by market share gains in nearly every country. The
multi-country rollout of Colgate Total Professional Clean
toothpaste helped drive the regional market share for Colgate Total
to an all-time high during the quarter. Colgate Max Fresh and
Colgate Max White toothpastes also achieved share gains year to
date. Colgate's leading share of the manual toothbrush market for
the region is at a record high year to date, up 320 basis points
versus year ago. 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 12.0% to a record level, and
unit volume grew 4.5%. Pricing was negative 2.0% and foreign
exchange added 9.5%. Strong volume gains in the Gaba business, the
United Kingdom, Denmark and Romania more than offset a volume
decline in Germany due to challenging market conditions. Operating
profit for the region grew 11% to an all-time record level, 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, United
Kingdom, Italy, Spain, Greece, Austria, Norway, Romania, Denmark,
Belgium, Poland and Australia. Successful premium products driving
these share gains include Colgate Total, Colgate Total Professional
Weekly Clean 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 shower gel, Colgate Plax Gentle
Care mouth rinse, Soupline Aromatherapy fabric conditioner, 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 18.5% and 9.5%,
respectively. The strong volume gains were led by India, Russia,
Turkey, Ukraine, South Africa, the Gulf States and the Greater
China region, where volume increased 17% during the quarter. For
the division as a whole, pricing increased 1.0% and foreign
exchange added 8.0%. Operating profit for the region increased 38%
to an all-time record level, even after a sizable increase in
advertising spending during the quarter. Colgate strengthened its
oral care leadership in the Greater Asia region with 11 out of 14
countries reporting toothpaste market share gains versus year ago
led by India, China, Philippines, Thailand, 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 Total
Professional Clean, Colgate Herbal Seabuckthorn, Darlie Double
Action and Colgate Max White toothpastes, and Colgate 360 degree,
Colgate 360 degree Sensitive 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, and Palmolive Floral and Odor
Neutralizing liquid hand soap. 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 12.0% and 5.0%, respectively,
during the quarter. Pricing increased 4.0% and foreign exchange
added 3.0%. Operating profit increased 10% even after significantly
higher agricultural commodity costs during the quarter. Consumption
growth and market share gains in the U.S. specialty pet channel
during the quarter were driven by strong sales of Science Diet
Canine Large Breed and Science Diet Canine Lamb & Rice Small
Bites. The relaunch of Science Diet Canine Nature's Best with
upgraded all natural ingredients during the quarter is also off to
a strong start. Science Diet Indoor Cat and Science Diet Light
contributed to growth in feline. Prescription Diet c/d Multicare
Feline, a therapeutic food for the nutritional management of cats
with feline lower urinary tract disease, Prescription Diet d/d
Canine and Prescription Diet j/d Canine drove growth in the U.S.
veterinary channel. Internationally, growth was strong led by
Russia, South Africa, the United Kingdom, Italy, Spain, Germany,
Australia and France. New pet food products contributing to the
international growth include Prescription Diet j/d Canine and
Feline, Science Plan Feline Chunks in Gravy pouches and Science
Plan Neutered Cat, a 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, the provision for
income taxes and 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 four Other Items, which pertained
to the nine months ended September 30, 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, 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, all of which occurred in the
first quarter of 2007, and a third quarter 2007 charge associated
with certain pension obligations in accordance with Statement of
Financial Accounting Standards (SFAS) No. 88, "Employers'
Accounting for Settlement and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits" ("SFAS 88 charge"). The
amount of each such excluded item for the three and nine months
ended September 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 four 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 nine months ended September 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 - Third 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 third 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
September 30, 2007 and 2006 (in Millions Except Per Share Amounts)
(Unaudited) 2007 Excluding Restruc- Other turing & As Restruc-
Items Other Reported turing (a) Items Net sales $3,528.2 $ - $ -
$3,528.2 Cost of sales 1,544.6 37.4 - 1,507.2 Gross profit 1,983.6
(37.4) - 2,021.0 Gross profit margin 56.2% 57.3% Selling, general
and administrative expenses 1,277.7 11.8 - 1,265.9 Other (income)
expense, net 37.1 1.9 15.4 19.8 Operating profit 668.8 (51.1)
(15.4) 735.3 Operating profit margin 19.0% 20.8% Interest expense,
net 38.5 - - 38.5 Income before income taxes 630.3 (51.1) (15.4)
696.8 Provision for income taxes 210.2 (14.8) (5.4) 230.4 Effective
tax rate 33.3% 33.1% Net income 420.1 (36.3) (10.0) 466.4 Earnings
per common share Basic $0.81 $(0.07) $(0.02) $0.90 Diluted $0.77
$(0.07) $(0.02) $0.86 Average common shares outstanding Basic 509.9
509.9 509.9 509.9 Diluted 542.4 542.4 542.4 542.4 2006 Excluding As
Reported Restructuring Restructuring Net sales $3,143.7 $ -
$3,143.7 Cost of sales 1,415.3 47.0 1,368.3 Gross profit 1,728.4
(47.0) 1,775.4 Gross profit margin 55.0% 56.5% Selling, general and
administrative expenses 1,140.3 11.5 1,128.8 Other (income)
expense, net 38.7 25.5 13.2 Operating profit 549.4 (84.0) 633.4
Operating profit margin 17.5% 20.1% Interest expense, net 41.2 -
41.2 Income before income taxes 508.2 (84.0) 592.2 Provision for
income taxes 164.1 (25.5) 189.6 Effective tax rate 32.3% 32.0% Net
income 344.1 (58.5) 402.6 Earnings per common share Basic $0.65
$(0.12) $0.77 Diluted $0.63 $(0.10) $0.73 Average common shares
outstanding Basic 515.3 515.3 515.3 Diluted 550.4 550.4 550.4 (a)
See Table 3 "Supplemental Consolidated Income Statement Information
- Other Items" for details. Note: Basic and diluted earnings per
share for the "As Reported" and "Excluding Restructuring &
Other Items" are computed independently for each quarter and the
nine months presented. As a result of changes in shares outstanding
during the year and rounding, the sum of the three quarters'
earnings per share may not necessarily equal the earnings per share
for the nine months. In addition, the impact of "Restructuring" and
"Other Items" in 2007 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 Nine Months Ended September 30, 2007 and 2006 (in
Millions Except Per Share Amounts) (Unaudited) 2007 Excluding
Restruc- Other turing & As Restruc- Items Other Reported turing
(a) Items Net sales $10,147.5 $ - $(2.1) $10,149.6 Cost of sales
4,443.3 103.8 (1.1) 4,340.6 Gross profit 5,704.2 (103.8) (1.0)
5,809.0 Gross profit margin 56.2% 57.2% Selling, general and
administrative expenses 3,671.6 32.9 - 3,638.7 Other (income)
expense, net 55.1 15.7 (20.6) 60.0 Operating profit 1,977.5 (152.4)
19.6 2,110.3 Operating profit margin 19.5% 20.8% Interest expense,
net 121.6 - - 121.6 Income before income taxes 1,855.9 (152.4) 19.6
1,988.7 Provision for income taxes 533.4 (44.5) (65.8) 643.7
Effective tax rate 28.7% 32.4% Net income 1,322.5 (107.9) 85.4
1,345.0 Earnings per common share Basic $2.55 $(0.21) $0.17 $2.59
Diluted $2.43 $(0.20) $0.16 $2.47 Average common shares outstanding
Basic 511.2 511.2 511.2 511.2 Diluted 544.4 544.4 544.4 544.4 2006
Excluding As Reported Restructuring Restructuring Net sales
$9,028.6 $ - $9,028.6 Cost of sales 4,103.6 156.8 3,946.8 Gross
profit 4,925.0 (156.8) 5,081.8 Gross profit margin 54.5% 56.3%
Selling, general and administrative expenses 3,210.2 30.6 3,179.6
Other (income) expense, net 187.0 130.3 56.7 Operating profit
1,527.8 (317.7) 1,845.5 Operating profit margin 16.9% 20.4%
Interest expense, net 119.8 - 119.8 Income before income taxes
1,408.0 (317.7) 1,725.7 Provision for income taxes 455.8 (96.5)
552.3 Effective tax rate 32.4% 32.0% Net income 952.2 (221.2)
1,173.4 Earnings per common share Basic $1.81 $(0.43) $2.24 Diluted
$1.73 $(0.40) $2.13 Average common shares outstanding Basic 515.4
515.4 515.4 Diluted 550.7 550.7 550.7 (a) See Table 3 "Supplemental
Consolidated Income Statement Information - Other Items" for
details. Note: Basic and diluted earnings per share for the "As
Reported" and "Excluding Restructuring & Other Items" are
computed independently for each quarter and the nine months
presented. As a result of changes in shares outstanding during the
year and rounding, the sum of the three quarters' earnings per
share may not necessarily equal the earnings per share for the nine
months. In addition, the impact of "Restructuring" and "Other
Items" in 2007 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
Other Items For the Three and Nine Months Ended September 30, 2007
(in Millions Except Per Share Amounts) (Unaudited) Three Months
Ended September 30, 2007 Hill's Product Volun- Tax SFAS 88 Total
Gain on tary Adjust- Pension Other Bleach Sale Recall ments*
Charges Items Net sales $ - $ - $ - $ - $ - Cost of sales - - - - -
Gross profit - - - - - Selling, general and administrative expenses
- - - - - Other (income) expense, net - - - 15.4 15.4 Operating
profit - - - (15.4) (15.4) Interest expense, net - - - - - Income
before income taxes - - - (15.4) (15.4) Provision for income taxes
- - - (5.4) (5.4) Net income - - - (10.0) (10.0) Earnings per
common share Basic $ - $ - $ - $(0.02) $(0.02) Diluted $ - $ - $ -
$(0.02) $(0.02) Nine Months Ended September 30, 2007 Hill's Product
Volun- Tax SFAS 88 Total Gain on tary Adjust- Pension Other Bleach
Sale Recall ments* Charges 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 - 15.4 (20.6) Operating profit
48.6 (13.6) - (15.4) 19.6 Interest expense, net - - - - - Income
before income taxes 48.6 (13.6) - (15.4) 19.6 Provision for income
taxes 18.9 (5.4) (73.9) (5.4) (65.8) Net income 29.7 (8.2) 73.9
(10.0) 85.4 Earnings per common share Basic $0.06 $(0.02) $0.15
$(0.02) $0.17 Diluted $0.05 $(0.01) $0.14 $(0.02) $0.16 * 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 September 30, 2007,
December 31, 2006 and September 30, 2006 (Dollars in Millions)
(Unaudited) September 30, December 31, September 30, 2007 2006 2006
Cash and cash equivalents $628.4 $489.5 $502.9 Receivables, net
1,758.0 1,523.2 1,446.3 Inventories 1,167.0 1,008.4 1,001.6 Other
current assets 382.4 279.9 304.5 Property, plant and equipment, net
2,831.7 2,696.1 2,526.4 Other assets, including goodwill and
intangibles 3,316.2 3,140.9 3,386.8 Total assets $10,083.7 $9,138.0
$9,168.5 Total debt 3,608.2 3,671.2 3,577.9 Other current
liabilities 2,927.0 2,518.3 2,409.2 Other non-current liabilities
1,526.4 1,537.6 1,546.8 Total liabilities 8,061.6 7,727.1 7,533.9
Total shareholders' equity 2,022.1 1,410.9 1,634.6 Total
liabilities and shareholders' equity $10,083.7 $9,138.0 $9,168.5
Supplemental Balance Sheet Information Debt less cash and
marketable securities* $2,927.0 $3,170.2 $3,044.9 Working capital %
of sales 2.4% 2.3% 2.6% *Marketable securities of $52.8, $11.5 and
$30.1 as of September 30, 2007, December 31, 2006 and September 30,
2006, respectively, are included in Other current assets. Table 5
Colgate-Palmolive Company Condensed Consolidated Statements of Cash
Flows For the Nine Months Ended September 30, 2007 and 2006
(Dollars in Millions) (Unaudited) 2007 2006 Operating Activities
Net income $1,322.5 $952.2 Adjustments to reconcile net income to
net cash provided by operations: Restructuring, net of cash (3.6)
187.6 Depreciation and amortization 246.4 243.5 Gain before tax on
sale of non- core product lines (48.6) - Stock-based compensation
expense 93.1 91.7 Deferred income taxes (60.2) (24.5) Cash effects
of changes in: Receivables (167.0) (122.9) Inventories (118.4)
(128.9) Accounts payable and other accruals 364.8 122.8 Other
non-current assets and liabilities 9.7 48.4 Net cash provided by
operations 1,638.7 1,369.9 Investing Activities Capital
expenditures (327.1) (251.8) Sale of property and non-core product
lines 106.0 2.9 Payment for acquisitions, net of cash acquired
(26.5) (200.0) Other (56.0) (21.4) Net cash used in investing
activities (303.6) (470.3) Financing Activities Principal payments
on debt (1,635.9) (1,011.3) Proceeds from issuance of debt 1,530.4
1,116.7 Dividends paid (550.4) (497.4) Purchases of treasury shares
(866.6) (601.3) Proceeds from exercise of stock options and excess
tax benefits 313.7 258.5 Net cash used in financing activities
(1,208.8) (734.8) Effect of exchange rate changes on Cash and cash
equivalents 12.6 (2.6) Net increase in Cash and cash equivalents
138.9 162.2 Cash and cash equivalents at beginning of period 489.5
340.7 Cash and cash equivalents at end of period $628.4 $502.9
Supplemental Cash Flow Information Free cash flow before dividends
(Net cash provided by operations less capital expenditures) Net
cash provided by operations $1,638.7 $1,369.9 Less: Capital
expenditures (327.1) (251.8) Free cash flow before dividends
$1,311.6 $1,118.1 Income taxes paid $469.3 $497.9 Table 6
Colgate-Palmolive Company Segment Information For the Three and
Nine Months Ended September 30, 2007 and 2006 (Dollars in Millions)
(Unaudited) Three Months Ended Nine Months Ended September 30,
September 30, 2007 2006 2007 2006 Net sales Oral, Personal and Home
Care North America $687.7 $668.1 $2,021.6 $1,933.1 Latin America
893.7 769.3 2,544.9 2,203.1 Europe/South Pacific 875.3 779.8
2,501.8 2,192.7 Greater Asia/Africa 607.2 512.5 1,726.0 1,489.6
Total Oral, Personal and Home Care $3,063.9 $2,729.7 $8,794.3
$7,818.5 Pet Nutrition 464.3 414.0 1,353.2 1,210.1 Total Net sales
$3,528.2 $3,143.7 $10,147.5 $9,028.6 Three Months Ended Nine Months
Ended September 30, September 30, 2007 2006 2007 2006 Operating
profit Oral, Personal and Home Care North America $171.0 $143.5
$484.8 $418.7 Latin America 250.2 220.8 742.4 651.9 Europe/South
Pacific 199.9 179.5 565.7 495.1 Greater Asia/Africa 90.8 65.9 259.2
199.3 Total Oral, Personal and Home Care $711.9 $609.7 $2,052.1
$1,765.0 Pet Nutrition 116.9 106.7 354.5 318.4 Corporate (160.0)
(167.0) (429.1) (555.6) Total Operating profit $668.8 $549.4
$1,977.5 $1,527.8 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, SFAS
88 pension charges and gains and losses on sales of non-core brands
and assets. For the three months ended September 30, 2007 and 2006,
Corporate operating expenses include $51.1 and $84.0 of charges
related to the Company's 2004 Restructuring Program, respectively.
For the nine months ended September 30, 2007 and 2006, Corporate
operating expenses include $152.4 and $317.7 of charges related to
the Company's 2004 Restructuring Program, respectively.
Additionally, Corporate operating expenses for the three and nine
months ended September 30, 2007 were increased by SFAS 88 pension
charges of $15.4. For the nine months ended September 30, 2007,
Corporate operating expenses 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 nine months
ended September 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 - Third
Quarter 2007 vs. 2006 September 30, 2007 (Unaudited) COMPONENTS OF
SALES CHANGE THIRD QUARTER 3rd Qtr Pricing 3rd Qtr Sales Coupons
Sales Change Ex- Consumer & Change Ex- Divested Trade Region As
Reported Divestment Volume Incentives Exchange Total Company 12.0%
13.0% 6.5% 1.0% 5.5% Europe/South Pacific 12.0% 12.0% 4.5% (2.0%)
9.5% Latin America 16.0% 18.0% 9.5% 3.0% 5.5% Greater Asia/Africa
18.5% 18.5% 9.5% 1.0% 8.0% Total International 15.5% 16.0% 7.5%
1.0% 7.5% North America 3.0% 4.5% 3.0% 0.5% 1.0% Total CP Products
12.0% 13.0% 6.5% 0.5% 6.0% Hill's 12.0% 12.0% 5.0% 4.0% 3.0%
COMPONENTS OF SALES CHANGE NINE MONTHS 9 Months Pricing 9 Months
Sales Coupons Sales Change Ex- Consumer & Change Ex- Divested
Trade Region As Reported Divestment Volume Incentives Exchange
Total Company 12.5% 13.0% 7.5% 1.0% 4.5% Europe/South Pacific 14.0%
14.0% 6.0% (1.5%) 9.5% Latin America 15.5% 17.0% 12.0% 1.5% 3.5%
Greater Asia/Africa 16.0% 16.0% 9.0% 1.5% 5.5% Total International
15.0% 15.5% 9.0% 0.5% 6.0% North America 4.5% 6.0 % 5.5% 0.5% 0.0%
Total CP Products 12.5% 13.0% 8.0% 0.5% 4.5% Hill's 12.0% 12.0%
5.0% 4.5% 2.5% 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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