For Investors: Financial Information

Reuben Mark:
“We are pleased to have ended 2006, our 200th year, so strongly. Colgate people, linked globally by our common values of Caring, Continuous Improvement and Global Teamwork, are at the foundation of this success and remain committed to further strengthening our growth worldwide.”

Ian Cook:
“We made significant progress on our strategic initiatives in 2006 as evidenced by our strengthening market shares worldwide, strong sales and volume growth, and growing profitability. As we look to 2007, Colgate people remain sharply focused on our global business priorities and I am optimistic that our excellent top and bottom line trends will continue.”

Q. Please comment on the Company’s 2006 global business results.

A. Reuben Mark: We are delighted that Colgate’s strong performance continued in 2006, our 200th year. All of the Company’s fundamentals are strong and getting stronger. Global sales rose 7.5% to an all-time record level and global unit volume from continuing businesses grew 7.0% with every operating division contributing to the strong volume gains. Advertising spending supporting the Company’s brands rose 11% to an all-time record level on top of double-digit growth in 2005, contributing to widespread market share gains in all of our core categories.

Profits in 2006 include $286.3 million of aftertax charges associated with our previously disclosed 2004 Restructuring Program and the net aftertax impact of certain Other Items that reduced net income by $9.9 million. Excluding these items, net income, operating profit and diluted earnings per share were at record-high levels for the year. A complete reconciliation between reported results and results excluding the 2004 Restructuring Program and Other Items, including a description of such Other Items, is available on Colgate’s web site.

Cash flow was also strong with operating cash flow reaching a record $1,821.5 million in 2006. The Company’s strong cash generation and positive growth momentum led the Board of Directors to authorize a 10% increase in the quarterly dividend rate effective in the second quarter of 2006.

Q. Colgate’s market shares continue to increase in key categories around the world. What is driving these increases and do you expect the positive momentum to continue into 2007?

A. Ian Cook: Indeed, our market shares are improving steadily. These increases are driven by our tight focus on the consumer, increasing our marketing spending, using new types of communication vehicles and conducting consumption-building activities in emerging markets around the world.

At the core of our market share growth is a steady stream of innovative new products. For example, the global rollout of Colgate 360° manual toothbrush during 2006 drove significant market share gains and new leadership positions in this category around the world. Our tight focus on our core categories and global equities, on innovation and on understanding the way we relate to consumers is keeping our market shares on an upward trend that we expect to continue throughout 2007 and beyond.

Q. What is the Company’s innovation strategy?

A. Ian Cook: Our innovation strategy encompasses initiatives touching all of the Company’s business functions and processes. We have established a Global Innovation Fund that allocates seed money to employees who recommend innovative ideas in any area of the business. At the same time, we are continuing to establish partnerships with outside experts, suppliers that are technical leaders, the academic community and leading research firms, to develop ideas for new products and processes.

We have also established a new Global Big Hits process that identifies new product opportunities that are of the highest strategic value for Colgate based on a combination of criteria including: size of opportunity, which projects have the most incremental potential to reach new consumers, which are truly new to the market and which have potential for global expansion. Once identified, these projects are provided additional resources, including ongoing senior management involvement, to get them to market faster. The Ajax Professional line of cleaning products in Europe is just one example of several successful introductions already nurtured by this process.

Q. How is the 2004 Restructuring Program progressing?

A. Reuben Mark: We are very pleased with what we have accomplished thus far. As you know, the four-year restructuring and business-building program that was announced in December 2004 was designed to accelerate growth and generate additional savings throughout the income statement. Now at the halfway mark, the Program is already generating sizable savings and remains on track to meet projections. The savings are being used to increase marketing spending, accelerate innovation and increase profitability. In 2006, we saw significant gross profit margin improvement, up 110 basis points, excluding restructuring charges, which is at the high end of the Company’s targeted range of 75-125 basis points. Including these charges, gross profit margin was up 40 basis points.

A. Reuben Mark: The more savings we achieve, the more committed we become to finding even more opportunities to further improve the way we do business and generate additional savings. With Continuous Improvement as one of our global values, we are implementing projects as resources permit from a lengthy list. Among the initiatives under way promising significant savings are globalizing procurement, moving toward a truly global supply chain and a new global process that will result in more efficient promotional spending, which we call Colgate Business Planning.

We are also centralizing business support functions into regional and global shared-service centers, a move that is expected to generate significant savings and increase operational effectiveness for a range of support services.

All this makes us confident that we will achieve our gross profit margin goal of 60% by 2010.

A. Ian Cook: Colgate Business Planning is a planning and execution process designed to grow both market share and margins through more efficient and effective consumer and trade spending. Supported by customized SAP software, this process ensures a consistent approach to commercial investment worldwide and a global focus on maximizing the return on that investment. It allows us to set goals 18 months out by customer and by brand, then measure our performance against those goals and make adjustments where indicated.

While it is still in its early days, we anticipate Colgate Business Planning will generate sizable savings in 2007 and even more in 2008, helping to accelerate our margin and top-line growth and ultimately contribute to increasing market shares worldwide for both Colgate and our trade partners.

Q. Recently, Colgate has stressed the importance of its professional and trade relationships. What is the Company doing to strengthen these relationships and how are they contributing to growth?

A. Ian Cook: Strong relationships with the profession and the trade are important components of our growth strategy. With dental professionals, for example, we have developed a 10-point plan to encourage more usage and recommendations of Colgate brands because such endorsements drive trial of products as well as long-term loyalty. Country-by-country, we are implementing the plan, which sets guidelines and objectives for professional sales, sampling, obtaining dental seals of approval, attending dental conventions and participating in Oral Health Month among others. Today, we have plans in place in countries representing more than 80% of Colgate’s toothpaste sales.

Equally important are Colgate’s multifunctional selling teams that support all of our customers worldwide. These customer-focused, cross-functional teams collaborate to develop more efficient ways of growing the categories where we compete, using resources better and sharing their expertise. As a result, the right products get to the right place with the right price and promotional plan, faster and more efficiently for a win-win experience for both Colgate and our customers. In Mexico, for example, these efforts contributed to Wal-Mart naming Colgate its 2006 Logistics Supplier of the Year out of over 11,000 suppliers.

Q. What is Colgate doing to develop its next generation of leaders around the world?

A. Reuben Mark: We recognize that the long-term success of Colgate is dependent upon the depth and breadth of management. The Company uses a formal process to identify next-generation leaders early in their careers. Their career paths are laid out to build an array of required skills and prepare them for leadership roles, ranging from global assignments to short-term projects to recommending courses from Colgate’s global curriculum of 150 training programs that teach leadership and functional skills. As their careers progress, they are given broad in-market experience across geographies and functions plus training that instills Colgate’s values and culture.

Q. Please comment on the Company’s outlook.

A. Ian Cook: Colgate ended 2006 with excellent business momentum. We have clearly defined strategies in place with a tight focus on our higher margin priority businesses of oral care, personal care and pet nutrition. We are firmly committed to getting closer to consumers everywhere, to strengthening our partnerships with the profession and our customers, to fostering innovation in all areas of our business and to getting more effective and efficient in everything we do.

As we look to the future, we are confident that our positive business momentum will continue and enable Colgate to deliver excellent quality, double-digit earnings per share growth in 2007, excluding restructuring charges.