UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 27, 2005
COLGATE-PALMOLIVE COMPANY
(Exact name of registrant as specified in its charter)
| Delaware | 1-644-2 | 13-1815595 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 300 Park Avenue, New York, NY | 10022 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code (212) 310-2000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. Results of Operations and Financial Condition.
On July 27, 2005, Colgate-Palmolive Company issued a press release announcing its earnings for the quarter ended June 30, 2005. This press release is attached as Exhibit 99 and is incorporated herein by reference.
The information in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits. The following exhibit is filed with this document:
| Exhibit Number |
Description | |
| 99 | Press release, dated July 27, 2005, issued by Colgate-Palmolive Company |
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EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99 | Press release, dated July 27, 2005, issued by Colgate-Palmolive Company |
3
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 hereunto duly authorized.
| COLGATE-PALMOLIVE COMPANY | ||||
| Date: July 27, 2005 |
By: |
/s/ Stephen C. Patrick | ||
| Name: |
Stephen C. Patrick | |||
| Title: |
Chief Financial Officer | |||
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Exhibit 99.1
Bina Thompson 212-310-3072
Hope Spiller 212-310-2291
FOR IMMEDIATE RELEASE…
Colgate’s Worldwide Sales and Unit Volume Up Strongly
2nd Quarter Profits at Expectation
New York, New York, July 27, 2005… Colgate-Palmolive Company (NYSE:CL) today announced strong worldwide sales and unit volume growth for second quarter 2005, with every operating division reporting top-line increases. Worldwide sales rose 10.5%, the largest quarterly growth in almost ten years. The robust sales reflected unit volume growth of 8.0%, positive foreign exchange of 2.5% and worldwide pricing that was even with the year ago quarter. Excluding the recently acquired GABA oral care business, sales rose 9.0% and volume rose 6.5% in the quarter.
Second quarter 2005 results include $28.7 million of aftertax charges related to the previously disclosed 2004 Restructuring Program. Reported net income and diluted earnings per share were $342.9 million and $.62, respectively, including this restructuring charge. Excluding the restructuring charge, net income in the quarter declined 1% versus second quarter 2004 to $371.6 million and diluted earnings per share increased 2% to $.67. In second quarter 2004, reported net income and diluted earnings per share were $373.9 million and $.66, respectively.
As reported, gross profit margin was 54.2%. Excluding restructuring charges, gross profit margin was 55.1% versus 55.4% in the year ago record quarter. The expected effect on gross profit from increases in raw and packing material costs and higher business-building commercial spending was largely offset by the Company’s aggressive savings programs and an accelerated shift toward higher-margin oral and personal care products.
Including the restructuring charge, operating profit declined 7%. Excluding the charge, operating profit declined 1% versus second quarter 2004 after a 16% increase in total advertising worldwide in the current quarter. Global advertising supporting Colgate’s brands of $292.3 million was at an all-time record level led by a strong double-digit global increase in media spending.
Net cash provided by operations increased to $728.4 million, up 13% versus the year ago period while working capital was even with the year ago period at 4.3% of sales.
Reuben Mark, Chairman and CEO said, “We enjoyed outstanding top-line growth this quarter, particularly in North America, Latin America, Eastern Europe and Africa. Also, we are encouraged by volume growth in Western Europe, excluding the GABA acquisition, despite the challenging retail environment in that region.
“Toothpaste market shares are strong and getting stronger in the U.S. and abroad, reaching a record high worldwide. Colgate’s global leadership in manual toothbrushes also expanded during the quarter with manual toothbrush market shares reaching record highs in the U.S., Mexico, Venezuela, France and other key countries around the world.
“We’re delighted that in addition to market share growth, it appears that our heavier level of advertising spending has accelerated the growth of the toothpaste market in a considerable number of overseas countries.
“We are pleased that gross profit margin, excluding the restructuring charge, was only slightly below the prior year record level despite the significant rise in raw and packaging material costs. Although the cost environment is expected to remain difficult, our ongoing focus on cost savings, the benefits of restructuring and the impact of the recently announced sale of our North American detergent business should allow gross margin expansion in the balance of the year.
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“We are also very encouraged that pricing was even with last year on a worldwide basis after being negative for six consecutive quarters.”
Mr. Mark continued, “This more positive pricing trend, which is expected to continue in the second half, combined with an apparent moderation in the amount of commercial spending required, bodes well for further increases in profitability.
“We are optimistic the strong sales momentum and excellent results from our cost-saving initiatives should enable us to achieve our expectations of high single-digit E.P.S. growth for this year and allow us to return to double-digit E.P.S. growth in 2006, before restructuring charges.”
As previously disclosed, the 2004 Restructuring Program is projected to result in cumulative aftertax charges of between $550 and $650 million by 2008. Annual aftertax savings are expected to be in the range of $250 to $300 million also by 2008, with the majority of the current year’s projected savings expected to be realized in second half 2005. First half 2005 restructuring projects have been implemented as expected.
At 11:00 a.m. ET today, Colgate will host a conference call to elaborate on second quarter results. To access this call as a webcast, please go to Colgate’s web site at http://www.colgate.com.
The following are comments about divisional performance. See attached Geographic Sales Analysis and Segment Information schedules for additional information on divisional sales and operating profit.
North America (22% of Company Sales)
Strong growth momentum continued in North America, fueled by new product sales and market share gains. Sales rose 9.0% during the quarter to an all-time record level and unit volume grew 8.0%, the strongest volume growth seen in ten quarters. Positive foreign exchange added 1.0% while pricing was even with the year ago period. As expected, North American operating profit declined 1% as volume growth was offset by increased commercial investment and higher freight and raw material costs.
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Colgate’s leadership of the U.S. toothpaste market continues to grow, with its ACNielsen market share reaching 35.6% year to date, up 150 basis points versus the year ago period and over three share points ahead of the number two competitor.
In the U.S., new products and increased commercial investment are generating strong volume and market share growth. Key categories continuing to gain market share year to date versus prior year include toothpaste, manual and powered toothbrushes, hand dishwashing liquid, bar soap and fabric conditioners. In oral care, new testimonial advertising for Colgate Total toothpaste, and the recently launched Colgate Max Fresh Cinnamint toothpaste and Colgate 360° manual toothbrush contributed to the share gains. Other new products contributing to growth in other categories include Palmolive Oxy Plus Citrus Purity dishwashing liquid, new Mennen Speed Stick and Lady Speed Stick 24/7 multiform deodorants with Micro-Absorber technology, Irish Spring Micro Clean bar soap and Fabuloso Orange Burst liquid cleaner.
Top-line growth in the U.S. is expected to continue in the balance of the year driven by a full pipeline of new product launches supported by higher commercial spending. Recent announcements planned for second half 2005 include Colgate Luminous toothpaste, Palmolive with Bleach Alternative dishwashing liquid and Softsoap Kitchen Fresh Hands liquid hand soap.
Latin America (23% of Company Sales)
Latin American dollar sales and unit volume, excluding divestments, grew 19.5% and 11.0%, respectively, in second quarter 2005. This is the strongest quarterly volume growth for the region in almost eight years and the strongest quarterly sales growth in nearly ten years. All 18 countries in the region contributed to the strong volume gains led by Brazil, Mexico, Colombia, Venezuela, Central America and Argentina. Sales and volume, as reported, increased 18.0% and 9.5%, respectively, with 5.0% positive foreign exchange and 3.5% higher pricing. Latin American operating profit increased 12% to
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an all-time record level as volume growth and the positive impact of foreign exchange more than offset the increased level of commercial spending behind Colgate brands during the quarter.
Colgate continues to build its extremely strong leadership in oral care throughout Latin America with toothpaste market share gains seen in nearly every country in the region, reaching record highs in Venezuela and Central America. New products contributing to these gains include Colgate Triple Action Mild Mint and Colgate Sensitive toothpastes, and the relaunch of Colgate Total toothpaste with new packaging and strong advertising highlighting the toothpaste’s ability to provide complete 12 hour protection while actively fighting 12 teeth and gum problems. New products succeeding in other categories are Colgate MicroSonic battery-powered toothbrush, Palmolive Citrus and Cream and Protex Oats bar soaps, Palmolive Hydra Natura hand and body lotion, and Lady Speed Stick Aloe multiform deodorants.
Europe (25% of Company Sales)
European dollar sales and unit volume grew 11.5% and 10.5%, respectively, during the quarter. The GABA acquisition added 6.0% to both sales and volume growth for the region while foreign exchange added 3.5% and pricing was 2.5% lower. Volume gains were achieved in the United Kingdom, Denmark, France, Greece, Italy, Spain, Ireland, Russia, Ukraine, Adria, Romania, and Czech Republic. Dollar operating profit increased 6% to a record level as volume growth and the positive impact of foreign exchange more than offset a double-digit increase in commercial spending during the quarter.
Colgate strengthened its oral care leadership in Western Europe with regional market shares in toothpaste and manual toothbrushes both increasing year to date. Successful new products driving these gains include Colgate Oxygen and Colgate Sensitive toothpastes, Colgate 360° manual toothbrush and Colgate MicroSonic battery-powered toothbrush. Recent innovations contributing to gains in personal care include Palmolive multiform deodorants, and Palmolive Aroma Creme and Palmolive Naturals with Shea Butter shower gels.
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Throughout Central Europe and Russia, Colgate’s toothpaste market share continues to grow, now exceeding 26% and reaching record highs during the quarter in Russia, Ukraine, Kazakhstan, Slovenia and Croatia. Share gains in the region were driven by strong sales of Colgate Propolis Whitening, Colgate Cavity Protection, Colgate Total and Colgate Sensitive toothpastes. Colgate 360° manual toothbrush, Lady Speed Stick 24/7 multiform deodorants and Palmolive Aroma Creme shower gel contributed to gains in other categories.
Asia/Africa (17% of Company Sales)
Asia/Africa sales and unit volume, as reported, grew 4.5% and 4.0%, respectively, on top of double-digit growth in the year ago quarter. Healthy volume gains were achieved in the China region, Australia, India, Philippines and South Africa. Positive foreign exchange of 2.5% was offset by lower pricing of 2.0%. After a significant increase in commercial spending, dollar operating profit for the region declined 7% versus the record level achieved in second quarter 2004.
Colgate strengthened its oral care leadership in the Asia Pacific region led by toothpaste market share gains in India, the Philippines, New Zealand and Australia. Regional toothbrush market shares for the Colgate equity reached a record high during the quarter. Successful new products driving the oral care growth include Colgate Max Fresh, Colgate Propolis, and Darlie Tea Care toothpastes. In the South Pacific, the recently launched Colgate 360° manual toothbrush and Colgate MicroSonic battery-powered toothbrush continue to perform ahead of expectations.
New products contributing to growth in other categories throughout the region include Palmolive Aroma Creme shower gel and liquid hand soap, Palmolive Naturals shampoo and conditioner, and Palmolive Naturals Sun Care bar soap.
Hill’s (13% of Company Sales)
Innovative new products and veterinary endorsements continue to drive growth at Hill’s, the world leader in specialty pet food. Unit volume grew 3.5% in the second quarter and dollar sales rose 6.0% reflecting favorable 2.0% foreign exchange and the effect of price increases taken in 2004. Dollar operating profit increased 3% despite a double-digit increase in commercial spending.
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Innovative new products contributing to growth in the U.S. specialty retail channel during the quarter include Science Diet Canine Senior Large Breed and Science Diet Canine Light Large Breed dog food. In the U.S. veterinary channel, sales of new Prescription Diet Canine j/d, a food clinically proven to reduce pain and improve mobility in dogs with arthritis, continue to exceed expectations.
Internationally, growth was strong led by Spain, Russia, the United Kingdom, Italy, France and Japan. New products driving this growth include Science Diet Canine Senior Large Breed and Prescription Diet Canine j/d.
* * *
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, Ajax, Axion, Soupline, Suavitel and Fab, as well as Hill’s Science Diet and Hill’s Prescription Diet pet foods. For more information about Colgate’s global business, visit the Company’s web site at http://www.colgate.com.
This press release and the related webcast (other than historical information) may contain forward-looking statements. 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 caption “Cautionary Statement on Forward-Looking Statements” in the Company’s Form 10-K for the year ended December 31, 2004) for information about 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.
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Non-GAAP Financial Measures
The following provides information regarding the non-GAAP measures used in this earnings release:
Net income, gross profit margin, operating profit and earnings per share are discussed in this release both as reported (on a GAAP basis) and excluding charges related to the restructuring program that began in the fourth quarter of 2004 and that is expected to be substantially completed by 2008 (the “2004 Restructuring Program”). Such charges, which are reported in the corporate segment, include or will include separation-related costs, incremental depreciation and asset write-downs and other costs related to the 2004 Restructuring Program. Management believes these financial measures on an ex-restructuring basis 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 not 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 Income Statement and Supplemental Information Reconciliation Excluding the “2004 Restructuring Program” for the three months ended June 30, 2005 and 2004 and for the six months ended June 30, 2005 and 2004 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, 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 and volume growth from ongoing operations. See Geographic Sales Analysis, Percentage Changes – Second Quarter 2005 vs. 2004 for a comparison of sales excluding divestments to sales as reported in accordance with GAAP.
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The Company defines free cash flow before dividends as net cash provided by operations less capital expenditures. As management uses this measure to evaluate the Company’s ability to satisfy current and future obligations, repurchase stock, pay dividends and fund future business opportunities, the Company believes that it provides useful information to investors. Free cash flow before dividends is not a measure of cash available for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure. Free cash flow before dividends is not a GAAP measurement and may not be comparable to similarly titled measures reported by other companies.
(See attached tables for second quarter results.)
9
Colgate-Palmolive Company
Consolidated Income Statement and Supplemental Information
Reconciliation Excluding the “2004 Restructuring Program”
For the three months ended June 30, 2005 and 2004
(Dollars in Millions Except Per Share Amounts) (Unaudited)
| 2005 |
2004 |
|||||||||||||||
| As Reported |
Restructuring |
Excluding Restructuring |
As Reported |
|||||||||||||
| Net sales |
$ | 2,837.5 | $ | — | $ | 2,837.5 | $ | 2,571.7 | ||||||||
| Cost of sales |
1,298.4 | (23.1 | ) | 1,275.3 | 1,148.1 | |||||||||||
| Gross profit |
1,539.1 | 23.1 | 1,562.2 | 1,423.6 | ||||||||||||
| Gross profit margin |
54.2 | % | 55.1 | % | 55.4 | % | ||||||||||
| Selling, general and administrative expenses |
959.1 | — | 959.1 | 848.1 | ||||||||||||
| Other (income) expense, net |
38.9 | (12.9 | ) | 26.0 | (9.3 | ) | ||||||||||
| Operating profit |
541.1 | 36.0 | 577.1 | 584.8 | ||||||||||||
| Operating profit margin |
19.1 | % | 20.3 | % | 22.7 | % | ||||||||||
| Interest expense, net |
30.9 | — | 30.9 | 29.3 | ||||||||||||
| Income before income taxes |
510.2 | 36.0 | 546.2 | 555.5 | ||||||||||||
| Provision for income taxes |
167.3 | 7.3 | 174.6 | 181.6 | ||||||||||||
| Effective tax rate |
32.8 | % | 32.0 | % | 32.7 | % | ||||||||||
| Net income |
342.9 | 28.7 | 371.6 | 373.9 | ||||||||||||
| Earnings per common share |
||||||||||||||||
| Basic |
$ | 0.64 | $ | 0.06 | $ | 0.70 | $ | 0.69 | ||||||||
| Diluted |
$ | 0.62 | $ | 0.05 | $ | 0.67 | $ | 0.66 | ||||||||
| Average common shares outstanding |
||||||||||||||||
| Basic |
521.4 | 521.4 | 521.4 | 531.4 | ||||||||||||
| Diluted |
557.4 | 557.4 | 557.4 | 570.6 | ||||||||||||
10
Colgate-Palmolive Company
Consolidated Income Statement and Supplemental Information
Reconciliation Excluding the “2004 Restructuring Program”
For the six months ended June 30, 2005 and 2004
(Dollars in Millions Except Per Share Amounts) (Unaudited)
| 2005 |
2004 |
|||||||||||||||
| As Reported |
Restructuring |
Excluding Restructuring |
As Reported |
|||||||||||||
| Net sales |
$ | 5,580.5 | $ | — | $ | 5,580.5 | $ | 5,085.2 | ||||||||
| Cost of sales |
2,537.8 | (33.8 | ) | 2,504.0 | 2,262.0 | |||||||||||
| Gross profit |
3,042.7 | 33.8 | 3,076.5 | 2,823.2 | ||||||||||||
| Gross profit margin |
54.5 | % | 55.1 | % | 55.5 | % | ||||||||||
| Selling, general and administrative expenses |
1,903.5 | — | 1,903.5 | 1,692.4 | ||||||||||||
| Other (income) expense, net |
105.5 | (51.9 | ) | 53.6 | 14.7 | |||||||||||
| Operating profit |
1,033.7 | 85.7 | 1,119.4 | 1,116.1 | ||||||||||||
| Operating profit margin |
18.5 | % | 20.1 | % | 21.9 | % | ||||||||||
| Interest expense, net |
62.5 | — | 62.5 | 57.6 | ||||||||||||
| Income before income taxes |
971.2 | 85.7 | 1,056.9 | 1,058.5 | ||||||||||||
| Provision for income taxes |
328.2 | 12.4 | 340.6 | 346.1 | ||||||||||||
| Effective tax rate |
33.8 | % | 32.2 | % | 32.7 | % | ||||||||||
| Net income |
643.0 | 73.3 | 716.3 | 712.4 | ||||||||||||
| Earnings per common share |
||||||||||||||||
| Basic |
$ | 1.20 | $ | 0.14 | $ | 1.34 | $ | 1.31 | ||||||||
| Diluted |
$ | 1.15 | $ | 0.13 | $ | 1.28 | $ | 1.25 | ||||||||
| Average common shares outstanding |
||||||||||||||||
| Basic |
523.1 | 523.1 | 523.1 | 532.2 | ||||||||||||
| Diluted |
559.5 | 559.5 | 559.5 | 571.5 | ||||||||||||
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Colgate-Palmolive Company Condensed Consolidated Balance Sheets
As of June 30, 2005, December 31, 2004 and June 30, 2004
(Dollars in Millions) (Unaudited)
| June 30, 2005 |
December 31, 2004 |
June 30, 2004 |
||||||||||
| Cash and cash equivalents |
$ | 392.1 | $ | 319.6 | $ | 417.3 | ||||||
| Receivables, net |
1,315.4 | 1,319.9 | 1,277.2 | |||||||||
| Inventories |
915.7 | 845.5 | 843.4 | |||||||||
| Other current assets |
306.2 | 254.9 | 297.0 | |||||||||
| Property, plant and equipment, net |
2,548.6 | 2,647.7 | 2,502.7 | |||||||||
| Other assets, including goodwill and intangibles |
3,189.2 | 3,285.3 | 3,092.8 | |||||||||
| Total assets |
$ | 8,667.2 | $ | 8,672.9 | $ | 8,430.4 | ||||||
| Total debt |
3,889.1 | 3,675.1 | 3,962.4 | |||||||||
| Other current liabilities |
2,031.2 | 2,145.1 | 1,941.0 | |||||||||
| Other non-current liabilities |
1,552.0 | 1,607.3 | 1,495.6 | |||||||||
| Total shareholders’ equity |
1,194.9 | 1,245.4 | 1,031.4 | |||||||||
| Total liabilities and shareholders’ equity |
$ | 8,667.2 | $ | 8,672.9 | $ | 8,430.4 | ||||||
| Supplemental Balance Sheet Information: |
||||||||||||
| Debt less cash and marketable securities* |
$ | 3,487.7 | $ | 3,338.2 | $ | 3,522.8 | ||||||
| Working capital % of sales |
4.3 | % | 2.4 | % | 4.3 | % | ||||||
| * | Marketable securities of $9.3, $17.3 and $22.3 as of June 30, 2005, December 31, 2004 and June 30, 2004, respectively, are included in Other current assets. |
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Colgate-Palmolive Company Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2005 and 2004
(Dollars in Millions) (Unaudited)
| 2005 |
2004 |
|||||||
| Operating Activities: |
||||||||
| Net income |
$ | 643.0 | $ | 712.4 | ||||
| Adjustments to reconcile net income to net cash provided by operations: |
||||||||
| Restructuring, net of cash |
61.8 | (4.8 | ) | |||||
| Depreciation and amortization |
165.2 | 159.7 | ||||||
| Deferred income taxes |
3.0 | 22.6 | ||||||
| Cash effects of changes in: |
||||||||
| Receivables |
(26.8 | ) | (32.3 | ) | ||||
| Inventories |
(95.7 | ) | (115.9 | ) | ||||
| Accounts payable and other accruals |
(20.3 | ) | (57.4 | ) | ||||
| Other non-current assets and liabilities |
(1.8 | ) | (40.3 | ) | ||||
| Net cash provided by operations |
728.4 | 644.0 | ||||||
| Investing Activities: |
||||||||
| Capital expenditures |
(159.2 | ) | (117.6 | ) | ||||
| Payment for acquisition, net of cash acquired |
— | (714.8 | ) | |||||
| Other |
(4.9 | ) | 52.4 | |||||
| Net cash used in investing activities |
(164.1 | ) | (780.0 | ) | ||||
| Financing Activities: |
||||||||
| Principal payments on debt |
(1,119.9 | ) | (235.5 | ) | ||||
| Proceeds from issuance of debt |
1,432.5 | 1,103.7 | ||||||
| Dividends paid |
(291.2 | ) | (268.6 | ) | ||||
| Purchases of treasury shares |
(513.5 | ) | (358.2 | ) | ||||
| Proceeds from exercise of stock options |
19.3 | 57.2 | ||||||
| Net cash (used in) provided by financing activities |
(472.8 | ) | 298.6 | |||||
| Effect of exchange rate changes on cash and cash equivalents |
(19.0 | ) | (10.6 | ) | ||||
| Net increase in Cash and cash equivalents |
72.5 | 152.0 | ||||||
| Cash and cash equivalents at beginning of period |
319.6 | 265.3 | ||||||
| Cash and cash equivalents at end of period |
$ | 392.1 | $ | 417.3 | ||||
| Supplemental Cash Flow Information: |
||||||||
| Free cash flow before dividends (net cash provided by operations less capital expenditures) |
||||||||
| Net cash provided by operations |
$ | 728.4 | $ | 644.0 | ||||
| Less: Capital expenditures |
(159.2 | ) | (117.6 | ) | ||||
| Free cash flow before dividends |
$ | 569.2 | $ | 526.4 | ||||
| Income taxes paid |
$ | 298.3 | $ | 335.4 | ||||
13
Colgate-Palmolive Company Segment Information
For the three and six months ended June 30, 2005 and 2004
(Dollars in Millions) (Unaudited)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2005 |
2004 |
2005 |
2004 |
|||||||||||||
| Net Sales |
||||||||||||||||
| Oral, Personal and Home Care |
||||||||||||||||
| North America |
$ | 632.1 | $ | 578.9 | $ | 1,241.8 | $ | 1,147.4 | ||||||||
| Latin America |
651.4 | 552.4 | 1,239.9 | 1,085.9 | ||||||||||||
| Europe |
691.4 | 618.8 | 1,378.8 | 1,225.8 | ||||||||||||
| Asia/Africa |
487.1 | 467.0 | 985.1 | 935.2 | ||||||||||||
| Total Oral, Personal and Home Care |
$ | 2,462.0 | $ | 2,217.1 | $ | 4,845.6 | $ | 4,394.3 | ||||||||
| Total Pet Nutrition |
375.5 | 354.6 | 734.9 | 690.9 | ||||||||||||
| Total Net Sales |
$ | 2,837.5 | $ | 2,571.7 | $ | 5,580.5 | $ | 5,085.2 | ||||||||
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2005 |
2004 |
2005 |
2004 |
|||||||||||||
| Operating Profit |
||||||||||||||||
| Oral, Personal and Home Care |
||||||||||||||||
| North America |
$ | 135.3 | $ | 136.4 | $ | 272.1 | $ | 271.8 | ||||||||
| Latin America |
179.3 | 159.8 | 342.4 | 318.1 | ||||||||||||
| Europe |
139.0 | 131.1 | 274.3 | 260.8 | ||||||||||||
| Asia/Africa |
73.8 | 79.0 | 155.7 | 163.1 | ||||||||||||
| Total Oral, Personal and Home Care |
527.4 | 506.3 | 1,044.5 | 1,013.8 | ||||||||||||
| Total Pet Nutrition |
102.6 | 99.4 | 200.8 | 194.8 | ||||||||||||
| Total Corporate |
(88.9 | ) | (20.9 | ) | (211.6 | ) | (92.5 | ) | ||||||||
| Total Operating Profit |
$ | 541.1 | $ | 584.8 | $ | 1,033.7 | $ | 1,116.1 | ||||||||
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, restructuring costs, and gains and losses on sales of non-strategic brands and assets.
Corporate operating expenses for the three and six months ended June 30, 2005 include $36.0 and $85.7 of charges related to the Company’s 2004 Restructuring Program, respectively. Additionally, Corporate operating expenses for the three and six months ended June 30, 2004 were reduced by a $26.7 gain related to the sale of the Company’s detergent businesses in Ecuador and Peru.
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Colgate-Palmolive Company - Geographic Sales Analysis
Percentage Changes - Second Quarter 2005 vs 2004
June 30, 2005
(Unaudited)
| 2nd Qtr |
2nd Qtr Sales Change |
COMPONENTS OF SALES 2ND QUARTER |
6 months |
6 months Sales Change |
COMPONENTS OF SALES CHANGE SIX MONTHS |
|||||||||||||||||||||||||
| Region |
Ex-Divested Volume |
Pricing, Coupons, Consumer & Trade Incentives |
Exchange |
Ex-Divested Volume |
Pricing, Coupons, Consumer & Trade Incentives |
Exchange |
||||||||||||||||||||||||
| Total Company |
10.5 | % | 10.5 | % | 8.0 | % | 0.0 | % | 2.5 | % | 9.5 | % | 10.0 | % | 8.0 | % | -0.5 | % | 2.5 | % | ||||||||||
| Europe |
11.5 | % | 11.5 | % | 10.5 | % | -2.5 | % | 3.5 | % | 12.5 | % | 12.5 | % | 10.0 | % | -2.0 | % | 4.5 | % | ||||||||||
| Latin America |
18.0 | % | 19.5 | % | 11.0 | % | 3.5 | % | 5.0 | % | 14.0 | % | 15.5 | % | 10.0 | % | 2.5 | % | 3.0 | % | ||||||||||
| Asia/Africa |
4.5 | % | 4.5 | % | 4.0 | % | -2.0 | % | 2.5 | % | 5.5 | % | 5.5 | % | 5.5 | % | -2.5 | % | 2.5 | % | ||||||||||
| Total International |
11.5 | % | 12.0 | % | 9.0 | % | -0.5 | % | 3.5 | % | 11.0 | % | 11.5 | % | 8.5 | % | -0.5 | % | 3.5 | % | ||||||||||
| North America |
9.0 | % | 9.0 | % | 8.0 | % | 0.0 | % | 1.0 | % | 8.0 | % | 8.0 | % | 8.0 | % | -0.5 | % | 0.5 | % | ||||||||||
| Total CP Products |
11.0 | % | 11.5 | % | 8.5 | % | 0.0 | % | 3.0 | % | 10.5 | % | 10.5 | % | 8.0 | % | -0.5 | % | 3.0 | % | ||||||||||
| Hill’s |
6.0 | % | 6.0 | % | 3.5 | % | 0.5 | % | 2.0 | % | 6.5 | % | 6.5 | % | 3.0 | % | 1.0 | % | 2.5 | % | ||||||||||
NOTE:
GABA was acquired June 1, 2004.
The impact of GABA on Total Company sales and volume was 1.5% in the second quarter and 2.0% in the six month period.
The impact of GABA on European sales and volume was 6.0% in the second quarter and 8.5% in the six month period.
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