FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
----------------------- --------------------
COMMISSION FILE NUMBER 1-644
COLGATE-PALMOLIVE COMPANY
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-1815595
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
300 PARK AVENUE, NEW YORK, NEW YORK 10022
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(Address of principal executive offices) (Zip Code)
(212) 310-2000
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(Registrant's telephone number, including area code)
NO CHANGES
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(Former name, former address, and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
------- -------
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date:
Class Shares Outstanding Date
- ----------------------- ------------------ ------------------
Common, $1.00 par value 145,583,432 September 30, 1995
Total number of sequentially numbered pages in this filing, including
exhibits thereto:
1
PART I. FINANCIAL INFORMATION
COLGATE-PALMOLIVE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
----------------------------------------------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
- -------------------------------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------- -----------------------
1995 1994 1995 1994
---- ---- ---- ----
Net sales $ 2,134.4 $ 1,930.7 $ 6,205.4 $ 5,591.8
Cost of sales 1,109.7 978.9 3,230.8 2,875.2
--------- --------- --------- ---------
Gross profit 1,024.7 951.8 2,974.6 2,716.6
--------- --------- --------- ---------
Selling, general and administrative
expenses 785.8 696.1 2,185.5 1,978.5
Provision for restructured operations 460.5 -- 460.5 --
Interest expense 61.8 33.1 172.2 87.8
Interest income (8.5) (6.7) (26.3) (25.0)
--------- --------- --------- ---------
1,299.6 722.5 2,791.9 2,041.3
--------- --------- --------- ---------
(Loss)income before income taxes (274.9) 229.3 182.7 675.3
Income tax (benefit) provision (24.7) 78.3 133.2 232.2
--------- --------- --------- ---------
Net(loss)income $ (250.2) $ 151.0 $ 49.5 $ 443.1
========= ========= ========= =========
(Loss)earnings per common share:
Primary (1.76) $ 1.00 $ .23 $ 2.91
========= ========= ========= =========
Assuming full dilution $ (1.76) $ .93 $ .23 $ 2.72
========= ========= ========= =========
Dividends declared per common share: $ .47 $ .41 $ 1.29 $ 1.13
========= ========= ========= =========
See Notes to Condensed Consolidated Financial Statements.
2
COLGATE-PALMOLIVE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
----------------------------------------
(DOLLARS IN MILLIONS)
(UNAUDITED)
- -------------------------------------------------------------------------------
ASSETS
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------ ------------
Current Assets:
Cash and cash equivalents $ 224.0 $ 169.9
Marketable securities 53.1 47.6
Receivables (less allowance for
doubtful accounts of $32.9 and
$23.1) 1,205.1 1,049.6
Inventories 846.6 713.9
Other current assets 250.1 196.7
---------- ----------
2,578.9 2,177.7
---------- ----------
Property, Plant and Equipment:
Cost 3,510.6 3,103.4
Less: Accumulated depreciation 1,469.6 1,115.3
---------- ----------
2,041.0 1,988.1
---------- ----------
Goodwill and other intangible assets
(less accumulated amortization
of $271.8 and $207.6) 2,715.4 1,671.8
Other assets 369.8 304.8
---------- ----------
$ 7,705.1 $ 6,142.4
========== ==========
See Notes to Condensed Consolidated Financial Statements.
3
COLGATE-PALMOLIVE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
----------------------------------------
(DOLLARS IN MILLIONS)
(UNAUDITED)
- -------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
--------------------------------------
SEPTEMBER 30, DECEMBER 31,
1995 1994
------------- ------------
Current Liabilities:
Notes and loans payable $ 255.9 $ 181.9
Current portion of long-term debt 52.9 26.0
Accounts payable 741.4 694.9
Accrued income taxes 86.7 85.1
Other accruals 704.7 541.3
---------- ----------
1,841.6 1,529.2
Long-term debt 3,010.7 1,751.5
Deferred income taxes 233.3 295.4
Other liabilities 961.8 743.4
Shareholders' Equity:
Preferred Stock 404.5 408.4
Common Stock 183.2 183.2
Additional paid-in capital 1,027.8 1,020.4
Retained earnings 2,348.2 2,496.7
Cumulative foreign currency
translation adjustments (484.4) (439.3)
---------- ----------
3,479.3 3,669.4
Unearned compensation (378.4) (384.1)
Treasury stock, at cost (1,443.2) (1,462.4)
---------- ----------
1,657.7 1,822.9
---------- ----------
$ 7,705.1 $ 6,142.4
========== ==========
See Notes to Condensed Consolidated Financial Statements.
4
COLGATE-PALMOLIVE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------------
(DOLLARS IN MILLIONS)
(UNAUDITED)
- -------------------------------------------------------------------------------
NINE MONTHS ENDED
-----------------
SEPTEMBER 30,
-------------
1995 1994
---- ----
OPERATING ACTIVITIES:
- ---------------------
Net cash provided by operating activities $ 513.8 $ 528.2
---------- --------
INVESTING ACTIVITIES:
- ---------------------
Capital expenditures (297.5) (261.5)
Payments for acquisitions, net of cash
acquired (1,265.0) (75.8)
(Purchase)sale of marketable securities,
net (5.8) 17.8
Other, net (46.2) 20.6
---------- --------
Net cash used for investing activities (1,614.5) (298.9)
---------- --------
FINANCING ACTIVITIES:
- ---------------------
Principal payments on debt (8.2) (72.6)
Proceeds from issuance of debt, net 1,315.9 362.6
Purchase of common stock (9.0) (306.0)
Dividends paid (197.8) (177.3)
Proceeds from outside investors 32.4 --
Other, net 22.9 .1
---------- --------
Net cash provided by (used for)
financing activities 1,156.2 (193.2)
Effect of exchange rate changes on
cash and cash equivalents (1.4) .7
---------- --------
Net increase in cash and cash equivalents 54.1 36.8
Cash and cash equivalents at beginning of
period 169.9 144.1
---------- --------
Cash and cash equivalents at
end of period $ 224.0 $ 180.9
========== ========
See Notes to Condensed Consolidated Financial Statements.
5
COLGATE-PALMOLIVE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
- -------------------------------------------------------------------------------
1. The condensed consolidated financial statements reflect all normal
recurring adjustments which, in management's opinion, are necessary for a
fair presentation of the results for interim periods. Results of
operations for the interim periods may not be representative of results to
be expected for a full year.
2. Provision for certain expenses, including income taxes, media advertising,
consumer promotion and new product introductory costs, are based on full
year assumptions. Such expenses are charged to operations in the year
incurred and are included in the accompanying condensed consolidated
financial statements in proportion with the passage of time or with
estimated annual tax rates or annual sales.
3. Inventories by major classes were as follows:
September 30, December 31,
1995 1994
------------- ------------
Raw material and supplies $ 335.4 $ 280.3
Work-in-process 45.6 38.4
Finished goods 465.6 395.2
--------- --------
$ 846.6 $ 713.9
========= ========
4. Primary earnings per share are determined by dividing net income, after
deducting dividends on preferred stock, net of related tax benefits, by
the weighted average number of common shares outstanding. Fully diluted
earnings per common share are calculated assuming the conversion of all
potentially dilutive securities, including convertible preferred stock and
outstanding options. This calculation also assumes reduction of available
income by pro forma ESOP replacement funding, net of income taxes.
5. On January 10, 1995, the Company acquired the worldwide Kolynos oral care
business ("Kolynos") from American Home Products Corporation for $1,040.0
in cash. Kolynos is a multinational oral care business operating primarily
in South America and having a presence in Greece, Taiwan and Hungary. The
acquired assets of the Kolynos business, located principally in Argentina,
Brazil, Colombia, Ecuador, Peru and Uruguay, include trademarks and other
intellectual property, accounts receivable, inventories, and property,
plant and equipment that is utilized in the production of toothpaste,
toothbrushes, dental floss and oral rinses. The acquisition is currently
being reviewed by antitrust regulatory authorities in Brazil.
The transaction was structured as a multinational acquisition of assets
and stock, financed with the proceeds of commercial bank borrowings, and
was accounted for under the purchase method of accounting, with the
results of the operations of Kolynos included with the results of the
Company from January 10, 1995. The net book value of Kolynos's assets was
approximately $50.0. The purchase price was allocated to the acquired
assets based upon preliminary determination of their respective fair
values and is subject to adjustment. The cost in excess of the fair value
of acquired assets is being amortized over 40 years.
6
COLGATE-PALMOLIVE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
- -------------------------------------------------------------------------------
The following unaudited pro forma summary combines the results of the
operations of the Company and Kolynos as if the acquisition had occurred
as of the beginning of 1994 after giving effect to certain adjustments,
including amortization of goodwill, increased interest expense on the
acquisition debt incurred and the related income tax effects.
Summarized Pro Forma Combined Results of Operations
---------------------------------------------------
Three Months Ended Nine Months Ended
September 30, 1994 September 30, 1994
------------------ ------------------
Net Sales $ 2,009.3 $ 5,792.3
Income before income taxes 218.1 636.6
Net income 143.6 417.6
Primary earnings per share .95 2.74
Fully diluted earnings per share .89 2.56
The pro forma financial information is not necessarily indicative of
either the results of operations that would have occurred had the Company
and Kolynos actually been combined during the three and nine month periods
in 1994, or the future results of operations of the combined companies.
Although the Company intends to operate Kolynos in Brazil as a separate
operation, there are certain other benefits that are anticipated to be
realized from the implementation of the Company's integration plans which
are not included in the pro forma information. The Company believes that
future growth opportunities, as well as the benefits of such integration
plans when fully implemented, will reduce and eventually more than offset
any dilutive impact on earnings per share.
6. In September 1995, the Company announced a major worldwide restructuring
of its manufacturing and administrative operations designed to further
enhance profitable growth over the next several years by generating
significant efficiencies and improving competitiveness. As a result of
this rationalization, 24 of the 112 factories worldwide will be closed or
significantly reconfigured. The worldwide workforce will be reduced by
approximately 3,000 employees or 8.5%. The changes are expected to be
completed over the next twenty four months in facilities around the world,
but primarily in North America and Europe. Hill's Pet Nutrition and
locations in Asia/Africa and certain Latin American countries, including
Mexico, are also affected. The charge includes employee termination costs
and expenses associated with activities that will be discontinued. The
worldwide restructuring program resulted in a 1995 third quarter pretax
charge of $460.5 ($369.2 net of tax), or $2.54 per share for the 1995
third quarter and $2.55 per share for the nine month period.
7
COLGATE-PALMOLIVE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------------------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
- -------------------------------------------------------------------------------
The components of this charge are summarized in the following table.
Utilization of the reserve since the September 20th announcement date was
not considered material.
Work force related $210.0
Closing/reconfiguring manufacturing plants 204.1
Settlement of contractual obligations 46.4
------
Total restructuring charge $460.5
======
7. Reference is made to the Company's Annual Report on Form 10-K filed with
the Securities and Exchange Commission for the year 1994 for a complete
set of financial notes including the Company's significant accounting
policies.
8
COLGATE-PALMOLIVE COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
---------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
- -------------------------------------------------------------------------------
RESULTS OF OPERATIONS
- ---------------------
Worldwide sales reached $2,134.4 in the third quarter of 1995, an 11%
increase over the 1994 third quarter, reflecting overall unit volume gains
of 9% including the January 1995 acquisition of the Kolynos Latin American
oral care business. Sales and unit volume would have increased 7% and 5%,
respectively, if Kolynos and non-core 1994 divestitures are excluded.
Sales in the Oral, Personal and Household Care segment were $1,934.2 up 12%
from $1,725.4 in 1994 on volume growth of 11% including acquisitions.
Sales increases across all geographic regions contributed to the growth.
Colgate-Asia/Africa sales increased 17% to $423.5 on volume gains of 12%.
Contributing to this region's growth were strong volume gains in Malaysia,
China, India and the Philippines.
Colgate-Europe sales increased 11% to $561.6 on volume gains of 3% and
favorable currency gains. The United Kingdom, France, Greece, Holland,
Italy and Portugal achieved volume gains.
Colgate-Latin America sales grew 8% to $479.6 on volume gains of 16%.
Excluding Kolynos, sales decreased 8% and volume remained flat. Mexico's
severe recession negatively impacted third quarter results and, although
Colgate's market share continued strong, unit volume declined
significantly. Excluding Mexico and the Kolynos acquisition, Colgate-Latin
America sales and unit volume each increased 15%.
Colgate-North America sales grew 13% to $469.5 on volume gains of 13%.
Market success of several new products, such as Colgate Baking Soda &
Peroxide toothpaste and Irish Spring Waterfall Clean soap, contributed to
the sales growth.
Sales in the Specialty Marketing segment declined 2% to $200.2. Hill's Pet
Nutrition experienced a 1% decrease in sales while unit volume was down 7%
from the exceptionally strong third quarter of 1994, as Hill's is
completing its program to bring its domestic distribution system in-house.
However, unit volume rose significantly from the first and second quarters
of 1995. Sales comparisons to the prior year are also impacted by the 1994
sale of Princess House and VCA.
Worldwide sales for the first nine months of 1995 increased 11% to $6,205.4
from $5,591.8 in the same period of 1994, on 8% volume growth. Excluding
Kolynos and 1994 divestitures, sales and unit volume increased 9% and 5%,
respectively.
Oral, Personal and Household Care sales increased 14% to $5,655.0 in the
first nine months of 1995, on volume gains of 10%. Within this segment,
Colgate-Asia/Africa sales increased 18% on volume growth of 12%. Colgate-
Europe sales increased 11% primarily due to favorable currency gains.
Colgate-Latin America sales grew 16% on volume gains of 23%. Excluding
Kolynos, Latin American sales were flat despite volume gains of 6% as a
result of the economic downturn in Mexico. Colgate-North America sales grew
10% on volume gains of 9% as a result of new product introductions.
9
COLGATE-PALMOLIVE COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
----------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
- -------------------------------------------------------------------------------
Specialty Marketing sales for the first nine months of 1995 decreased 10%
as compared to 1994 and was impacted by the sale of non-core businesses in
June of 1994. Sales from continuing operations increased 2% despite volume
declines of 4% due to Hill's program to buy out domestic distributors.
Worldwide gross profit margin for the 1995 third quarter declined to 48.0%
from 49.3% primarily due to increases in raw materials and packaging costs.
Gross profit margin for the first nine months declined to 47.9% from 48.6%.
Selling, general and administrative expenses in the third quarter increased
as a percentage of sales to 36.8% in 1995 from 36.1% in 1994 primarily
resulting from the increase in amortization of goodwill due to the Kolynos
acquisition. Selling, general and administrative expenses as a percentage
of sales varied little for the first nine months of 1995 as compared to the
same period in 1994.
In September 1995, the Company announced a major worldwide restructuring of
its manufacturing and administrative operations designed to further enhance
profitable growth over the next several years by generating significant
efficiencies and improving competitiveness. As a result of this
rationalization, 24 of the 112 factories worldwide will be closed or
significantly reconfigured. The worldwide workforce will be reduced by
approximately 3,000 employees or 8.5%. The changes are expected to be
completed over the next twenty four months in facilities around the world,
but primarily in North America and Europe. Hill's Pet Nutrition, locations
in Asia/Africa and certain Latin American countries, including Mexico, are
also affected. The charge includes employee termination costs and expenses
associated with activities that will be discontinued. The worldwide
restructuring program resulted in a 1995 third quarter pretax charge of
$460.5 ($369.2 net of tax), or $2.54 per share for the 1995 third quarter
and $2.55 per share for the nine months.
Earnings before interest and taxes (EBIT) for the 1995 third quarter and
nine month period amounted to a loss of $221.6 and income of $328.6,
respectively, compared to income of $255.7 and $738.1 for the same periods
in the prior year. Excluding the restructuring charge, EBIT decreased 7%
to $238.9, and increased 7% to $789.1 for the 1995 third quarter and nine
month period, respectively.
Interest expense, net of interest income, increased to $53.3 in the 1995
third quarter from $26.4 in 1994, and to $145.9 in the 1995 first nine
months from $62.8 in 1994, primarily reflecting the increased level of debt
incurred in connection with the acquisition of Kolynos.
The effective tax rate for the 1995 third quarter and nine month period was
a benefit of 9.0% and an expense of 72.9%, respectively, compared with an
expense of 34.1% and 34.4% for the same periods in the previous year. The
change in the rate primarily results from the impact of the one-time
restructuring charge, the tax benefit of which was 20% due to the effect of
tax benefits in certain jurisdictions not expected to be realized.
Excluding the charge, the effective income tax rate increased to 35.9% and
34.9% for the 1995 third quarter and nine months, respectively.
Net loss for the 1995 third quarter was $250.2 compared to income of $151.0
in the prior year. Net income for the nine months was $49.5 compared to
$443.1 in 1994. Excluding the worldwide restructuring charge, net income
and primary earnings per
10
COLGATE-PALMOLIVE COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
---------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-------------------------------------
(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)
- -------------------------------------------------------------------------------
common share decreased to $119.0 and $.78 in the 1995 third quarter and
$418.7 and $2.78 for the first nine months. Net income and earnings per
common share for the third quarter of 1995 were negatively impacted by
reduced profits in Mexico, due to the current slowdown in the Mexican
economy, Hill's transition to a direct sales force and by the acquisition
of Kolynos which had a dilutive effect of approximately $.05 per share for
the three months and $.17 per share for the nine months ended September 30,
1995. The 1994 year to date results also included a one-time charge of
$5.2 related to the sale of Princess House.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Net cash provided by operations decreased to $513.8 compared with the prior
year reflecting increased working capital investment to sustain growth.
Working capital, which also increased as a result of acquisitions, was
$737.3 at September 30, 1995 as compared with $648.5 at December 31, 1994.
At September 30, 1995, commercial paper outstanding was $1,386.4 which is
classified as long-term due to the Company's intent and ability to
refinance these obligations on a long-term basis. The overall increase in
long-term debt since year-end relates to the January 1995 acquisition of
Kolynos.
Reference should be made to the 1994 Annual Report on Form 10-K for
additional information regarding available sources of liquidity and
capital.
11
COLGATE-PALMOLIVE COMPANY
PART II. OTHER INFORMATION
- -------------------------------------------------------------------------------
ITEM 1. LEGAL PROCEEDINGS
Reference is made to Note 13 to the consolidated financial statements
on page 29 of the registrant's Annual Report on Form 10- K for the
year ended December 31, 1994.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 11. Computation of Earnings per Common Share.
Exhibit 12. Ratio of Earnings to Fixed Charges.
Exhibit 27. Financial Data Schedule.
(b) Reports on Form 8-K:
A report on Form 8-K dated September 21, 1995 was filed by the
Company reporting a restructuring of its worldwide
manufacturing and administrative operations.
12
SIGNATURE
-----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COLGATE-PALMOLIVE COMPANY
----------------------------------
(Registrant)
November 2, 1995 /s/ Stephen C. Patrick
----------------------------------
Stephen C. Patrick
Vice President
Corporate Controller
13
EXHIBIT 11
-----------
PAGE 1 OF 2
COLGATE-PALMOLIVE COMPANY
COMPUTATION OF EARNINGS PER COMMON SHARE
------------------------------------------
DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS
(UNAUDITED)
- -------------------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
PRIMARY 1995 1994 1995 1994
---- ---- ---- ----
EARNINGS:
Net (loss) income $ (250.2) $ 151.0 $ 49.5 $ 443.1
Deduct: Dividends on preferred
shares, net of income taxes 5.4 5.5 16.2 16.3
-------- ------- -------- -------
Net (loss) income applicable to
common shares $ (255.6) $ 145.5 $ 33.3 $ 426.8
======== ======= ======== =======
SHARES (IN MILLIONS):
Weighted average common shares
outstanding 145.5 45.6 145.0 146.7
======== ======= ======== =======
(Loss) earnings per common share,
primary $ (1.76) $ 1.00 $ .23 $ 2.91
======== ======= ======== =======
14
EXHIBIT 11
-----------
PAGE 2 OF 2
COLGATE-PALMOLIVE COMPANY
COMPUTATION OF EARNINGS PER COMMON SHARE
------------------------------------------
DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS
(UNAUDITED)
- -----------------------------------------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1995 1994 1995 1994
---- ---- ---- ----
ASSUMING FULL DILUTION
EARNINGS:
Net (loss) income $ (250.2) $ 151.0 $ 49.5 $ 443.1
Deduct:
Dividends on preferred shares 5.4 .2 16.2 .4
Replacement funding resulting from
assumed conversion of Series B
Convertible Preference Stock, net of tax -- 1.8 -- 6.1
-------- -------- -------- --------
Net income applicable to common shares $ (255.6) $ 149.0 $ 33.3 $ 436.6
======== ======== ======== ========
SHARES (IN MILLIONS):
Weighted average number of common shares
outstanding 145.5 145.6 145.0 146.7
Assumed conversion of options
reduced by the number of shares which
could have been purchased with the
proceeds from the exercise of such
options -- 1.8 2.2 1.8
Assumed conversion of Series B
Convertible Preference Stock -- 12.2 -- 12.2
-------- -------- -------- --------
Weighted average number of common shares
outstanding, as adjusted 145.5 159.6 147.2 160.7
======== ======== ======== ========
(Loss)earnings per common share,
assuming full dilution $ (1.76) $ .93 $ .23 $ 2.72
======== ======== ======== ========
The calculation of fully diluted earnings per share excludes the effect of
anti-dilutive securities for the third quarter and the nine months of 1995,
respectively.
15
Exhibit 12
COLGATE-PALMOLIVE COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
---------------------------------------------------
DOLLARS IN MILLIONS (UNAUDITED)
- -------------------------------------------------------------------------------
NINE MONTHS ENDED
SEPTEMBER 30, 1995
------------------
Income before income taxes $ 182.7
ADD:
Interest on indebtedness and amortization of debt
expense and discount or premium 172.2
Portion of rents representative of interest
factor 20.9
Interest on ESOP debt, net of dividends 1.5
LESS:
Income of less than fifty-percent-owned
subsidiaries (2.4)
--------
Income as adjusted $ 374.9
========
FIXED CHARGES:
Interest on indebtedness and amortization of
debt expense and discount or premium $ 172.2
Portion of rents representative of interest
factor 20.9
Interest on ESOP debt, net of dividends 1.5
Capitalized interest 9.8
Total fixed charges $ 204.4
========
Ratio of earnings to fixed charges 1.8
========
In June 1989, the Company's leveraged employee stock ownership plan (ESOP)
issued $410.0 of long-term notes due through 2009 bearing an average
interest rate of 8.6%. These notes are guaranteed by the Company.
Interest expense on the ESOP's notes was $25.4. This interest is funded
through preferred and common stock dividends as well as Company
contributions. The fixed charges presented above include interest on ESOP
indebtedness to the extent it is not funded through preferred and common
stock dividends.
16
5
1,000,000
9-Mos
Dec-31-1995
Jan-01-1995
Sep-30-1995
224
53
1,238
33
847
2,579
3,510
1,469
7,705
1,841
3,011
183
0
405
1,070
7,705
6,205
6,205
3,231
2,185
460
0
146
183
133
50
0
0
0
50
.23
.23
