COLGATE-PALMOLIVE COMPANY 
By PR Newswire/Les Echos/
Colgate Announces Strong 4th Quarter and Year, Exceeding Expectations
Excellent Sales and Volume Growth Worldwide
Operating Profit Up Across All Divisions
Board Authorizes New 30 Million Share Repurchase Program
NEW YORK, Jan. 31, 2008 -- Colgate-Palmolive Company (NYSE: CL) today
announced excellent worldwide sales and unit volume growth together with higher
than expected earnings growth for fourth quarter 2007. Worldwide sales grew
13.5% to $3,642.2 million and unit volume grew 5.0%, as reported. Excluding
divestments, worldwide sales and unit volume grew 14.0% and 5.5%, respectively.
Global pricing increased 2.0% and foreign exchange added 6.5%. The very strong
top-line growth was supported by a 14% increase in worldwide advertising
spending.
Fourth quarter 2007 results include $75.8 million of aftertax charges
related to the 2004 Restructuring Program. The year ago quarter included
restructuring charges of $65.1 million and a gain on the sale of the Company's
household bleach business in Canada of $38.2 million aftertax.
As reported, gross profit margin increased 70 basis points to 56.1%.
Excluding restructuring charges, gross profit margin increased 90 basis points
to a record 57.5% despite significant increases in worldwide commodity costs.
Operating profit as reported increased 7% versus fourth quarter 2006 to
$675.6 million, 18.5% of sales. Excluding restructuring charges and the prior
year gain on the sale of the Company's household bleach business in Canada as
noted above, operating profit rose 18% to $781.7 million. On the same basis,
operating profit margin was 21.5% of sales, up 80 basis points versus the year
ago period.
The tax rate increased by 2.8 percentage points in the fourth quarter due
to the cost of increased remittances from overseas subsidiaries and the one-
time impact of statutory tax rate changes in certain overseas subsidiaries.
Reported net income and diluted earnings per share in fourth quarter 2007
were $414.9 million and $.77, respectively. Excluding restructuring charges
and the prior year gain on the sale of the Company's household bleach business
in Canada, net income in the quarter increased 15% versus fourth quarter 2006
to a record $490.7 million, and diluted earnings per share increased 17% to
$.91, also a record. In fourth quarter 2006, reported net income and diluted
earnings per share were $401.2 million and $.73, respectively, and net income
and diluted earnings per share excluding restructuring charges and the gain on
the sale of the Company's household bleach business in Canada were $428.1
million and $.78, respectively.
Net cash provided by operations year to date increased by 21% to $2,203.7
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 (debt less cash and marketable securities) declining versus
fourth quarter 2006. End of fourth quarter 2007 working capital improved to
2.2% of sales versus 2.3% in the comparable 2006 period.
Ian Cook, President and CEO commented, "We are delighted to have ended the
year so strongly on both the top and bottom lines. The excellent results were
truly across the board with every operating division increasing both sales and
operating profit in the quarter.
"Pleasingly, the 90 basis point improvement in gross profit margin
worldwide and other savings programs allowed for strong levels of advertising
investment behind our global brands while still generating higher than
expected operating profit, net profit and earnings per share for the quarter.
"Consistent with our strategy to present higher value offerings to the
consumer, new premium priced products are driving market share gains across
categories in key countries around the world. Colgate's global market shares
in toothpaste, manual toothbrushes, mouth rinse, bar soaps, shower gels and
fabric conditioners all finished the year at record highs."
Mr. Cook further commented, "Sales have started off well in 2008 across
all divisions, and we are confident that the strong top-line growth momentum
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 the year, 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 confidence that we will again deliver our planned
double-digit earnings per share growth in 2008."
For the full year 2007, worldwide sales as reported increased 12.5% to
$13,789.7 million, an all-time high, including 6.5% unit volume growth, 1.0%
higher pricing and 5.0% positive foreign exchange. Global sales and global
unit volume grew 13.0% and 7.0%, respectively, excluding divestments.
As reported, net income and diluted earnings per share for the full year
2007 were $1,737.4 million and $3.20, respectively. Full year 2007 results
include $183.7 million of aftertax charges related to the 2004 Restructuring
Program, and Other Items totaling to a net gain of $85.4 million aftertax (see
Table 3 for 2007 Other Items details).
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 restructuring charges of $286.3 million and a gain on the sale of the
Company's household bleach business in Canada of $38.2 million aftertax.
Excluding restructuring charges and Other Items in both periods, net income
and diluted earnings per share for full year 2007 increased 15% and 16%,
respectively.
Share Repurchase Program
On January 30, 2008, the Board of Directors authorized a new 30 million
share repurchase program. The Company plans to repurchase the shares of
common stock over the next two years. The shares may be repurchased in open-
market or privately negotiated transactions. As of December 31, 2007, the
Company had approximately 509 million shares of common stock outstanding.
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.
North America (19% of Company Sales)
As reported, North American sales and unit volume grew 6.5% and 4.5%,
respectively, in the fourth quarter. Excluding the divestiture of the
Canadian household bleach business, sales and unit volume grew 7.5% and 5.5%,
respectively. Pricing increased 0.5% and foreign exchange added 1.5%. North
American operating profit increased 39% during the quarter to an all-time
record level, reflecting the benefits from restructuring and other cost saving
programs.
In the U.S., new product launches at the super-premium level 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 15.4%. Colgate Max
Fresh BURST toothpaste continues to build incremental market share for the Max
Fresh equity, reaching a record high of 3.9% for the year. Colgate's share of
the manual toothbrush market is at a record high of 25.6% year to date, up 1.8
share points versus year ago, fueled by the continued success of Colgate
360 degree and Colgate 360 degree Sensitive manual toothbrushes.
Successful new products contributing to growth in the U.S. in other
categories include Irish Spring body wash for men, Softsoap brand Nutra-Oil
moisturizing body wash and Mennen Speed Stick 24/7 deodorant. Fabuloso liquid
cleaner, Suavitel fabric conditioner and Irish Spring bar soap each achieved
record high market shares for the year in the U.S.
New products planned for launch in first quarter 2008 include Colgate
Total Advanced Whitening and Colgate Total Advanced Fresh toothpastes, Colgate
360 degree Deep Clean manual toothbrush, Colgate 360 degree Sonic Power
battery toothbrush, Suavitel Aroma Sensations fabric conditioner and Mennen
Speed Stick 24/7 deodorant with a new upgraded formula.
Latin America (26% of Company Sales)
As reported, Latin American sales and unit volume grew 15.5% and 5.0%,
respectively, in the fourth quarter. Excluding the divested bleach
businesses, sales and unit volume grew 17.0% and 6.5%, respectively, on top of
double-digit sales and volume growth in the year ago period. The strong
volume gains were led by Brazil, Venezuela, Argentina and Central America.
Higher pricing added 4.5% and foreign exchange added 6.0%. Latin American
operating profit increased 19%, to a 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. Strong sales of
premium priced offerings such as Colgate Total Professional Clean, Colgate
Sensitive and Colgate Max White toothpastes drove share gains throughout the
region. In Mexico, for example, Colgate's toothpaste market share reached a
record high at 83.9% year to date, up 230 basis points versus year ago.
Colgate's leading share of the manual toothbrush market for the region is at a
record high year to date at 36.9%, up 270 basis points versus year ago.
Strong sales of Colgate 360 degree and Colgate 360 degree Sensitive manual
toothbrushes throughout the region contributed to this success.
In other product categories, Colgate Plax Alcohol Free and Colgate Plax
Ice mouthwashes, Palmolive Naturals Yogurt and Fruits, Palmolive Nutri-Milk
and Protex Deo 12 bar soaps, Axion Tri-Cloro dish liquid, Lady Speed Stick
Double Defense multi-form deodorant, Palmolive Caprice shampoo and Palmolive
Nutri-Milk shower gel contributed to market share gains in the region.
Europe/South Pacific (24% of Company Sales)
Europe/South Pacific sales increased 16.0% to a record level, and unit
volume grew 7.0% in the fourth quarter. Pricing was negative 3.0% and
foreign exchange added 12.0%. The strong volume gains were led by the Gaba
business, the United Kingdom, France, Denmark, Poland, Spain, Greece,
Switzerland and Australia. Operating profit for the region grew 6% to a
record level, on top of very strong growth in the year ago period and even
after a significant increase in advertising during the quarter.
Colgate increased its oral care leadership in Europe/South Pacific with
its regional toothpaste market share reaching a record high for the year.
These toothpaste share gains were led by Austria, Belgium, Denmark, France,
Germany, Norway, Spain, the United Kingdom, Poland, Romania and Australia.
Successful premium products driving these share gains include Colgate Total
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 Colgate 360 degree Sonic Power battery toothbrush, Colgate
Plax Whitening mouth rinse, Palmolive Pure Cashmere and Palmolive Aromatherapy
Happyful shower gels, Palmolive Soft and Gentle Eden deodorant, 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 6.5%,
respectively. The strong volume gains were led by India, Russia and the rest
of the CIS countries, Malaysia, South Africa, the Gulf States and the Greater
China region, where volume increased double-digit for the third consecutive
quarter. For the division as a whole, pricing increased 3.0% and foreign
exchange added 9.0%. Operating profit for the region increased 30% 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, 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, Colgate
Herbal Gel and Darlie Double Action 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 Vitamins and Oil shower gel, Palmolive Thermal Spa
Seabuckthorn shower gel, bar soap and liquid hand soap, Palmolive Pure
Cashmere shower cream and bar soap, and Lady Speed Stick for Teens multi-form
deodorant.
Hill's (14% of Company Sales)
Hill's sales grew 10% and unit volume declined 0.5% during the quarter on
top of the very strong volume growth in the year ago period. Foreign exchange
added 3.0% and pricing increased 7.5%. Operating profit increased 3% to an
all-time record level, on top of very strong growth in the year ago period and
after significantly higher agricultural commodity costs during the quarter.
Market share gains in the U.S. specialty pet channel during the quarter
were driven by strong sales of Science Diet Adult Large Breed Canine, Science
Diet Lamb Meal & Rice Adult Small Bites Canine and Science Diet Nature's Best
Canine with upgraded all natural ingredients. 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 j/d Canine and new
Prescription Diet Hypoallergenic Treats for dogs and cats drove growth in the
U.S. veterinary channel.
Internationally, growth was strong, led by South Africa, the Nordic
region, Australia, Spain and Russia. New pet food products contributing to
the international growth include Prescription Diet j/d Light Canine, Science
Plan Chunks in Gravy Feline pouches and Prescription Diet c/d Multicare
Feline.
***
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.
The Company's annual meeting of shareholders is currently scheduled for
Thursday, May 8, 2008.
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 income 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 the end of 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 twelve months ended
December 31, 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 twelve months ended December 31, 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.
-- 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 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
twelve months ended December 31, 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 -
Fourth 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 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, 2007 and 2006
(in Millions Except Per Share Amounts) (Unaudited)
2007
Excluding
As Reported Restructuring Restructuring
Net sales $3,642.2 $- $3,642.2
Cost of sales 1,599.0 50.0 1,549.0
Gross profit 2,043.2 (50.0) 2,093.2
Gross profit margin 56.1% 57.5%
Selling, general and administrative
expenses 1,301.4 16.2 1,285.2
Other (income) expense, net 66.2 39.9 26.3
Operating profit 675.6 (106.1) 781.7
Operating profit margin 18.5% 21.5%
Interest expense, net 35.0 - 35.0
Income before income taxes 640.6 (106.1) 746.7
Provision for income taxes 225.7 (30.3) 256.0
Effective tax rate 35.2% 34.3%
Net income 414.9 (75.8) 490.7
Earnings per common share
Basic $0.80 $(0.15) $0.95
Diluted $0.77 $(0.14) $0.91
Average common shares outstanding
Basic 509.9 509.9 509.9
Diluted 542.2 542.2 542.2
2006
Excluding
Gain on Restructuring
As Bleach & Other
Reported Restructuring Sale Items
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 - 1,129.5
Other (income) expense, net (1.1) 22.8 (46.5) 22.6
Operating profit 632.7 (77.7) 46.5 663.9
Operating profit margin 19.7% 20.7%
Interest expense, net 38.9 - - 38.9
Income before income taxes 593.8 (77.7) 46.5 625.0
Provision for income taxes 192.6 (12.6) 8.3 196.9
Effective tax rate 32.4% 31.5%
Net income 401.2 (65.1) 38.2 428.1
Earnings per common share
Basic $0.77 $(0.13) $0.08 $0.82
Diluted $0.73 $(0.12) $0.07 $0.78
Average common shares outstanding
Basic 514.4 514.4 514.4 514.4
Diluted 549.6 549.6 549.6 549.6
Note: Basic and diluted earnings per share for the "As Reported",
"Excluding Restructuring" and "Excluding Restructuring & Other
Items" are computed independently for each quarter and the twelve
months 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
twelve months. In addition, the impact of "Restructuring" and "Gain
on Bleach Sale" 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, 2007 and 2006
(in Millions Except Per Share Amounts) (Unaudited)
2007
Excluding
As Other Restructuring
Reported Restructuring Items(a) & Other Items
Net sales $13,789.7 $- $(2.1) $13,791.8
Cost of sales 6,042.3 153.8 (1.1) 5,889.6
Gross profit 7,747.4 (153.8) (1.0) 7,902.2
Gross profit margin 56.2% 57.3%
Selling, general and
administrative expenses 4,973.0 49.1 - 4,923.9
Other (income) expense, net 121.3 55.6 (20.6) 86.3
Operating profit 2,653.1 (258.5) 19.6 2,892.0
Operating profit margin 19.2% 21.0%
Interest expense, net 156.6 - - 156.6
Income before income taxes 2,496.5 (258.5) 19.6 2,735.4
Provision for income taxes 759.1 (74.8) (65.8) 899.7
Effective tax rate 30.4% 32.9%
Net income 1,737.4 (183.7) 85.4 1,835.7
Earnings per common share
Basic $3.35 $(0.36) $0.17 $3.54
Diluted $3.20 $(0.34) $0.16 $3.38
Average common shares outstanding
Basic 510.8 510.8 510.8 510.8
Diluted 543.7 543.7 543.7 543.7
2006
Gain on Excluding
As Bleach Restructuring
Reported Restructuring Sale & Other Items
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 - 4,309.1
Other (income) expense, net 185.9 153.1 (46.5) 79.3
Operating profit 2,160.5 (395.4) 46.5 2,509.4
Operating profit margin 17.7% 20.5%
Interest expense, net 158.7 - - 158.7
Income before income taxes 2,001.8 (395.4) 46.5 2,350.7
Provision for income taxes 648.4 (109.1) 8.3 749.2
Effective tax rate 32.4% 31.9%
Net income 1,353.4 (286.3) 38.2 1,601.5
Earnings per common share
Basic $2.57 $(0.56) $0.07 $3.06
Diluted $2.46 $(0.52) $0.07 $2.91
Average common shares outstanding
Basic 515.2 515.2 515.2 515.2
Diluted 550.5 550.5 550.5 550.5
(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 twelve months 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 twelve months. In addition, the impact of
"Restructuring", "Other Items" and "Gain on Bleach Sale" 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 Twelve Months Ended December 31, 2007
(in Millions Except Per Share Amounts) (Unaudited)
Twelve Months Ended December 31, 2007
Hill's
Gain on Product SFAS 88 Total
Bleach Voluntary Tax Pension Other
Sale Recall Adjustments* 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 December 31, 2007 and 2006
(Dollars in Millions) (Unaudited)
December 31, December 31,
2007 2006
Cash and cash equivalents $428.7 $489.5
Receivables, net 1,680.7 1,523.2
Inventories 1,171.0 1,008.4
Other current assets 338.1 279.9
Property, plant and equipment, net 3,015.2 2,696.1
Other assets, including goodwill and intangibles 3,478.3 3,140.9
Total assets $10,112.0 $9,138.0
Total debt 3,515.9 3,671.2
Other current liabilities 2,868.7 2,518.3
Other non-current liabilities 1,441.2 1,537.6
Total liabilities 7,825.8 7,727.1
Total shareholders' equity 2,286.2 1,410.9
Total liabilities and shareholders' equity $10,112.0 $9,138.0
Supplemental Balance Sheet Information
Debt less cash and marketable securities* $3,064.6 $3,170.2
Working capital % of sales 2.2% 2.3%
* Marketable securities of $22.6 and $11.5 as of December 31, 2007 and
2006, respectively, are included in Other current assets.
Table 5
Colgate-Palmolive Company
Condensed Consolidated Statements of Cash Flows
For the years ended December 31, 2007 and 2006
(Dollars in Millions) (Unaudited)
2007 2006
Operating Activities
Net income $1,737.4 $1,353.4
Adjustments to reconcile net income to net cash
provided by operations:
Restructuring, net of cash 21.3 145.4
Depreciation and amortization 333.9 328.7
Gain before tax on sale of non-core product lines (48.6) (46.5)
Stock-based compensation expense 110.3 116.9
Deferred income taxes (147.4) (23.2)
Cash effects of changes in:
Receivables (66.5) (116.0)
Inventories (111.5) (118.5)
Accounts payable and other accruals 366.2 149.9
Other non-current assets and liabilities 8.6 31.4
Net cash provided by operations 2,203.7 1,821.5
Investing Activities
Capital expenditures (583.1) (476.4)
Sale of property and non-core product lines 109.7 59.4
Payment for acquisitions, net of cash acquired (26.5) (200.0)
Other (28.4) (3.4)
Net cash used in investing activities (528.3) (620.4)
Financing Activities
Principal payments on debt (1,737.8) (1,332.0)
Proceeds from issuance of debt 1,513.1 1,471.1
Dividends paid (749.6) (677.8)
Purchases of treasury shares (1,269.4) (884.7)
Proceeds from exercise of stock options and
excess tax benefits 489.3 364.4
Net cash used in financing activities (1,754.4) (1,059.0)
Effect of exchange rate changes on cash and cash
equivalents 18.2 6.7
Net (decrease)/increase in Cash and cash equivalents (60.8) 148.8
Cash and cash equivalents at beginning of period 489.5 340.7
Cash and cash equivalents at end of period $428.7 $489.5
Supplemental Cash Flow Information
Free cash flow before dividends (net cash provided
by operations less capital expenditures)
Net cash provided by operations $2,203.7 $1,821.5
Less: Capital expenditures (583.1) (476.4)
Free cash flow before dividends $1,620.6 $1,345.1
Income taxes paid $646.5 $647.9
Table 6
Colgate-Palmolive Company
Segment Information
For the Three and Twelve Months Ended December 31, 2007 and 2006
(Dollars in Millions) (Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
Net sales
Oral, Personal and Home Care
North America $699.2 $657.7 $2,720.8 $2,590.8
Latin America 944.0 816.4 3,488.9 3,019.5
Europe/South Pacific 881.5 759.6 3,383.3 2,952.3
Greater Asia/Africa 611.6 516.4 2,337.6 2,006.0
Total Oral, Personal and Home
Care $3,136.3 $2,750.1 $11,930.6 $10,568.6
Pet Nutrition 505.9 459.0 1,859.1 1,669.1
Total Net sales $3,642.2 $3,209.1 $13,789.7 $12,237.7
Three Months Ended Twelve Months Ended
December 31, December 31,
2007 2006 2007 2006
Operating profit
Oral, Personal and Home Care
North America $182.0 $131.4 $666.8 $550.1
Latin America 263.6 221.0 1,006.0 872.9
Europe/South Pacific 198.1 186.1 763.8 681.2
Greater Asia/Africa 103.6 79.4 362.8 278.7
Total Oral, Personal and Home
Care $747.3 $617.9 $2,799.4 $2,382.9
Pet Nutrition 133.3 129.5 487.8 447.9
Corporate (205.0) (114.7) (634.1) (670.3)
Total Operating profit $675.6 $632.7 $2,653.1 $2,160.5
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 restructuring and related implementation costs, stock-based
compensation related to stock options and restricted stock awards, research
and development costs, Corporate overhead costs, gains and losses on sales of
non-core brands and assets, and SFAS 88 pension charges.
For the three months ended December 31, 2007 and 2006, Corporate operating
expenses include $106.1 and $77.7 of charges related to the Company's 2004
Restructuring Program, respectively. For the twelve months ended December 31,
2007 and 2006, Corporate operating expenses include $258.5 and $395.4 of
charges related to the Company's 2004 Restructuring Program, respectively.
Additionally, Corporate operating expenses for the twelve months ended
December 31, 2007 were increased by SFAS 88 pension charges of $15.4.
For the twelve months ended December 31, 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. For the three and twelve months
ended December 31, 2006, Corporate operating expenses were reduced by a $46.5
gain related to the sale of the Company's household bleach business in Canada.
As a result of a limited voluntary recall of Hill's product in March 2007,
Pet Nutrition Net sales for the twelve months ended December 31, 2007 were
reduced by $2.1 and Corporate operating expenses increased by $13.6.
Table 7
Colgate-Palmolive Company
Geographic Sales Analysis
Percentage Changes - Fourth Quarter 2007 vs 2006
December 31, 2007
(Unaudited)
COMPONENTS OF SALES CHANGE
FOURTH QUARTER
Pricing
4th Qtr 4th Qtr Coupons
Sales Sales Consumer &
Change As Change Ex- Ex-Divested Trade
Region Reported Divestment Volume Incentives Exchange
Total Company 13.5% 14.0% 5.5% 2.0% 6.5%
Europe/South Pacific 16.0% 16.0% 7.0% (3.0%) 12.0%
Latin America 15.5% 17.0% 6.5% 4.5% 6.0%
Greater Asia/Africa 18.5% 18.5% 6.5% 3.0% 9.0%
Total International 16.5% 17.0% 6.5% 1.5% 9.0%
North America 6.5% 7.5% 5.5% 0.5% 1.5%
Total CP Products 14.0% 15.0% 6.5% 1.0% 7.5%
Hill's 10.0% 10.0% (0.5%) 7.5% 3.0%
COMPONENTS OF SALES CHANGE
TWELVE MONTHS
Pricing
12 Months 12 Months Coupons
Sales Sales Consumer &
Change As Change Ex- Ex-Divested Trade
Region Reported Divestment Volume Incentives Exchange
Total Company 12.5% 13.0% 7.0% 1.0% 5.0%
Europe/South Pacific 14.5% 14.5% 6.5% (2.0%) 10.0%
Latin America 15.5% 17.0% 10.5% 2.5% 4.0%
Greater Asia/Africa 16.5% 16.5% 8.5% 1.5% 6.5%
Total International 15.5% 16.0% 8.5% 0.5% 7.0%
North America 5.0% 6.5% 5.5% 0.5% 0.5%
Total CP Products 13.0% 13.5% 7.5% 0.5% 5.5%
Hill's 11.5% 11.5% 3.5% 5.5% 2.5%
SOURCE Colgate-Palmolive Company
-0- 01/31/2008
/CONTACT: Bina Thompson, +1-212-310-3072, Hope Spiller, +1-212-310-2291,
both of Colgate-Palmolive Company/
/Web site: http://www.colgate.com/
(CL)
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information. All information should be checked prior to publication.Colgate Palmolive : Colgate Announces Strong 4th Quarter and Year, Exceeding Expectations
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