<PAGE>
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 June 30, 1999.
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
----------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
300 PARK AVENUE, NEW YORK, NEW YORK 10022
------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(212) 310-2000
------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NO CHANGES
------------------------------------------------------------------------------
(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 issuers classes of
common stock, as of the latest practical date:
Class Shares Outstanding Date
- ----------------------- ---------------------- --------------
Common, $1.00 par value 582,994,532 July 31, 1999
<PAGE>
PART I. FINANCIAL INFORMATION
- ------- ---------------------
COLGATE-PALMOLIVE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
__________________________________________________________________________________________________________________________
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales $ 2,285.0 $ 2,256.5 $ 4,460.3 $ 4,416.0
Cost of sales 1,063.7 1,083.9 2,073.1 2,119.9
---------- ---------- ---------- ----------
Gross profit 1,221.3 1,172.6 2,387.2 2,296.1
Selling, general and administrative
expenses 831.5 824.7 1,632.5 1,605.8
Interest expense 54.5 51.0 108.5 101.3
Interest income (10.3) (6.9) (18.4) (14.0)
---------- ---------- ---------- ----------
Income before income taxes 345.6 303.8 664.6 603.0
Provision for income taxes 117.5 100.3 227.6 203.5
---------- ---------- ---------- ----------
Net income $ 228.1 $ 203.5 $ 437.0 $ 399.5
========== ========== ========== ==========
Earnings per common share:
Basic $ .38 $ .34 $ .73 $ .66
========== ========== ========== ==========
Diluted $ .36 $ .31 $ .68 $ .61
========== ========== ========== ==========
Dividends declared per common share* $ - $ - $ .275 $ .275
========== ========== ========== ==========
</TABLE>
* Includes two dividend declarations in the first quarter periods.
See Notes to Condensed Consolidated Financial Statements.
2
<PAGE>
COLGATE-PALMOLIVE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(Dollars in Millions)
(Unaudited)
________________________________________________________________________________
<TABLE>
<CAPTION>
ASSETS
------
June 30, December 31,
1999 1998
----------- -----------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 198.1 $ 181.7
Marketable securities 53.8 12.8
Receivables (net of allowances of
$34.4 and $35.9) 1,173.1 1,085.6
Inventories 743.0 746.0
Other current assets 220.4 218.8
----------- -----------
2,388.4 2,244.9
Property, plant and equipment, at cost: 4,051.8 4,127.3
Less: Accumulated depreciation 1,565.0 1,538.1
----------- -----------
2,486.8 2,589.2
Goodwill and other intangible assets
(net of accumulated amortization
of $549.0 and $556.7) 2,212.6 2,524.1
Other assets 326.6 327.0
----------- -----------
$ 7,414.4 $ 7,685.2
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
COLGATE-PALMOLIVE COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
(Unaudited)
________________________________________________________________________________
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
June 30, December 31,
1999 1998
--------- ---------
<S> <C> <C>
Current Liabilities:
Notes and loans payable $ 211.2 $ 175.3
Current portion of long-term debt 504.9 281.6
Accounts payable 694.2 726.1
Accrued income taxes 51.5 74.2
Other accruals 880.2 857.2
--------- ---------
2,342.0 2,114.4
Long-term debt 2,128.9 2,300.6
Deferred income taxes 505.5 448.0
Other liabilities 676.5 736.6
Shareholders' equity:
Preferred stock 370.7 376.2
Common stock 732.9 732.9
Additional paid-in capital 876.4 824.6
Retained earnings 3,906.5 3,641.0
Cumulative foreign currency
translation adjustments (1,077.2) (799.8)
--------- ---------
4,809.3 4,774.9
Unearned compensation (352.2) (355.5)
Treasury stock, at cost (2,695.6) (2,333.8)
--------- ---------
1,761.5 2,085.6
--------- ---------
$ 7,414.4 $ 7,685.2
========= =========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
COLGATE-PALMOLIVE COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Dollars in Millions)
(Unaudited)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Six Months Ended
----------------
June 30,
--------
1999 1998
-------- ---------
<S> <C> <C>
Operating Activities:
- --------------------
Net cash provided by operating activities $ 551.5 $ 480.9
Investing Activities:
- --------------------
Capital expenditures (145.9) (157.5)
Payments for acquisitions, net of cash acquired (19.6) (.7)
Sale of non-core product lines 89.7 5.0
Investments in marketable securities and other
investments (39.5) (6.4)
Other (6.7) (8.9)
---------- ----------
Net cash used for investing activities (122.0) (168.5)
Financing Activities:
- --------------------
Principal payments on debt (303.1) (315.3)
Proceeds from issuance of debt 378.4 346.5
Dividends paid (171.5) (174.6)
Purchase of common stock (302.0) (173.7)
Other (12.1) (2.1)
---------- -----------
Net cash used for financing activities (410.3) (319.2)
Effect of exchange rate changes on
cash and cash equivalents (2.8) (.2)
---------- -----------
Net increase (decrease) in cash and cash equivalents 16.4 (7.0)
Cash and cash equivalents at beginning of period 181.7 183.1
---------- ----------
Cash and cash equivalents at end of period $ 198.1 $ 176.1
========== ==========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
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:
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------- ------------
<S> <C> <C>
Raw material and supplies $ 206.2 $ 257.9
Work-in-process 32.9 32.9
Finished goods 503.9 455.2
-------- --------
$ 743.0 $ 746.0
======== ========
</TABLE>
4. Earnings Per Share:
<TABLE>
<CAPTION>
For the Three Months Ended
--------------------------
June 30, 1999 June 30, 1998
------------- -------------
Per Per
Income Shares Share Income Shares Share
------ ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
Net income $228.1 $203.5
Preferred dividends (5.1) (5.1)
------ ------
Basic EPS 223.0 584.1 $.38 198.4 592.1 $.34
==== ====
Stock options 12.2 14.3
ESOP conversion 4.4 44.1 4.6 45.2
------ ----- ------ -----
Diluted EPS $227.4 640.4 $.36 $203.0 651.6 $.31
====== ===== ==== ====== ===== ====
</TABLE>
6
<PAGE>
COLGATE-PALMOLIVE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
For the Six Months Ended
------------------------
June 30, 1999 June 30, 1998
------------- -------------
Per Per
Income Shares Share Income Shares Share
------ ------ ----- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
Net income $437.0 $399.5
Preferred dividends (10.3) (10.5)
------ ------
Basic EPS 426.7 583.9 $.73 389.0 591.6 $.66
==== ====
Stock options 12.5 14.6
ESOP conversion 9.1 44.1 9.2 45.2
------ ----- ------ ------
Diluted EPS $435.8 640.5 $.68 $398.2 651.4 $.61
====== ===== ==== ====== ====== ====
</TABLE>
5. Comprehensive income
Comprehensive income is comprised primarily of net earnings and currency
translation gains and losses. Total comprehensive income for the three
months and six months ended June 30, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
1999 1998 1999 1998
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net income $ 228.1 $ 203.5 $ 437.0 $ 399.5
Foreign currency translation adjustment due to
devaluation of Brazilian Real (12.5) - (236.5) -
Other foreign currency translation adjustments (14.6) (22.4) (40.9) (18.5)
---------- --------- --------- ---------
Total comprehensive income $ 201.0 $ 181.1 $ 159.6 $ 381.0
========== ========= ========= =========
</TABLE>
The charge to cumulative translation adjustment resulting from the
devaluation of the Brazilian Real in the three months and six months ended
June 30, 1999 related to foreign currency denominated goodwill and
property, plant and equipment and did not include economic losses on
monetary assets.
7
<PAGE>
COLGATE-PALMOLIVE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
- --------------------------------------------------------------------------------
6. Segment Information -
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Sales
North America $ 534.9 $ 523.7 $ 1,068.2 $ 1,009.8
Latin America 613.6 609.1 1,148.1 1,187.1
Europe 495.4 517.1 996.9 1,021.1
Asia/Africa 377.8 363.6 738.8 724.0
----------- ----------- ----------- -----------
Total Oral, Personal and Household Care 2,021.7 2,013.5 3,952.0 3,942.0
Total Pet Nutrition 263.3 243.0 508.3 474.0
----------- ----------- ----------- -----------
Net Sales $ 2,285.0 $ 2,256.5 $ 4,460.3 $ 4,416.0
=========== =========== =========== ===========
Earnings by Business Segment
North America $ 103.1 $ 99.6 $ 216.1 $ 189.7
Latin America 129.8 122.9 258.0 260.7
Europe 82.4 74.6 172.0 155.0
Asia/Africa 42.9 40.7 85.3 83.1
----------- ----------- ----------- -----------
Total Oral, Personal and Household Care 358.2 337.8 731.4 688.5
Total Pet Nutrition 51.0 39.3 95.5 79.1
Corporate (19.4) (29.2) (72.2) (77.3)
----------- ----------- ----------- -----------
Earnings before interest and taxes 389.8 347.9 754.7 690.3
Interest expense, net (44.2) (44.1) (90.1) (87.3)
----------- ----------- ----------- -----------
Income before income taxes $ 345.6 $ 303.8 $ 664.6 $ 603.0
=========== =========== =========== ===========
</TABLE>
7. On May 5, 1999, the Company's Board of Directors approved a two-for-one
common stock split effected in the form of a 100% stock dividend. As a
result of the split, shareholders received one additional share of common
stock for each share they held as of May 19, 1999, which was distributed
June 30, 1999. Par value remained at $1 per share. All share and per share
amounts contained in the Condensed Consolidated Financial Statements and
Exhibits have been restated to give effect to the stock split.
8
<PAGE>
COLGATE-PALMOLIVE COMPANY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Dollars in Millions Except Per Share Amounts)
(Unaudited)
- --------------------------------------------------------------------------------
8. In June 1999, the Financial Accounting Standards Board deferred the
effective date of Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities" to fiscal
years beginning after June 15, 2000. The statement establishes accounting
and reporting standards requiring that every derivative instrument be
recorded in the balance sheet as either an asset or liability measured at
its fair value. The statement requires that changes in the derivative's
fair value be recognized currently in earnings unless specific hedge
accounting criteria are met. The statement is not expected to have a
material impact on the Company's financial position, results of operations
or cash flows.
9. Reference is made to the Company's Annual Report on Form 10-K filed with
the Securities and Exchange Commission for the year 1998 for a complete set
of financial notes including the Company's significant accounting policies.
9
<PAGE>
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 $2,285.0 in the second quarter of 1999, a 1% increase
over the 1998 second quarter, reflecting unit volume gains of 4% partially
offset by a decline in foreign currency translation. Sales would have risen 7%,
excluding the effect of foreign exchange declines.
Sales in the Oral, Personal and Household Care segment were $2,021.7, up
slightly as compared to 1998 sales of $2,013,5, on volume growth of 3%.
Colgate-Latin America sales increased 1% to $613.6 on volume gains of 4%, led by
strong volume growth in Mexico, Brazil, and Chile. The success of products, such
as Colgate Double Cool Stripe toothpaste, Colgate Sensation whitening
toothpaste, as well as the herbal toothpaste under the Sorriso and Kolynos brand
names strengthened the region's market shares.
Colgate-North America sales reached $534.9 in the second quarter of 1999. Sales,
excluding divested businesses, grew 3% on volume gains of 5% primarily driven by
new products in all core categories. These new products included the launch of
Colgate Total Fresh Stripe toothpaste in late March and toothpaste and
toothbrush entries for youngsters. Other strong performers included Speed Stick
Ultimate deodorant, Lady Speed Stick gel, and Palmolive baking soda fresh scent
dishwasher detergent.
Colgate-Europe second quarter sales decreased 4% to $495.4 on a volume decrease
of 1%. Excluding Russia, volume would have risen 1% largely due to volume
increases in the United Kingdom, Switzerland and the Nordic Group. Volume gains
in the quarter reflected the successful relaunch of Colgate Total toothpaste and
new varieties of Palmolive shower gel.
Colgate-Asia/Africa second quarter sales increased 4% to $377.8 largely as a
result of increased sales in China and India, recovery in the ASEAN group and
continued growth in Australia and Vietnam. Volume increased 7%. China
experienced significant growth through continued geographic expansion as well as
new product launches. Colgate is now the leading toothpaste company in China.
Hill's Pet Nutrition segment experienced an 8% increase in sales to $263.3 with
unit volume gains of 8%. Hill's-International benefited from new products,
increased media advertising in Japan and in-clinic marketing programs in Europe.
Hill's has experienced new product momentum particularly with Science Diet
Hairball Control for cats and new Prescription Diet formulas for the dietary
management of liver and renal disease.
Sales in the Oral, Personal and Household Care segment for the six months ended
June 30, 1999 were up modestly at $3,952.0 from the comparable period in 1998 as
volume growth of 3% was offset by a decline in foreign currencies. Within this
segment, Colgate-Latin America sales decreased 3% on flat volumes, Colgate-North
America sales excluding divested businesses increased 7% on volume growth of 9%,
Colgate-Europe sales decreased 2% on volume declines of 2% and
Colgate-Asia/Africa sales increased 2% on volume growth of 4%.
10
<PAGE>
COLGATE-PALMOLIVE COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
(Dollars in Millions Except Per Share Amounts)
- --------------------------------------------------------------------------------
Worldwide gross profit margin for the second quarter of 1999 increased to 53.4%
from 52.0%. The Company continues to benefit from product mix, manufacturing
cost reduction initiatives, global sourcing and other cost reduction programs.
Selling, general and administrative (SG&A) expenses were generally level with
prior periods as a percentage of sales, decreasing to 36.4% in the second
quarter of 1999 from 36.5% in 1998, and increasing to 36.6% in the first half of
1999 from 36.4% for the comparable period in 1998.
During the quarter, as part of the Company's ongoing program of product
standardization and organization redesign, the Company incurred one-time charges
related to the exiting of certain activities, such as the manufacture of
aluminum tubes in Brazil, all of which will be implemented before the end of
1999. These charges were offset by a gain of $17.6 million recorded on the sale
of the U.S. Baby Magic brand.
Earnings before interest and taxes (EBIT) increased 12.0% to $389.8 in the 1999
second quarter, and reached a level of 17.1% of sales versus 15.4% in second
quarter 1998. For the first half of 1999 EBIT increased 9.3% to $754.7, a level
of 16.9% of sales as compared to 15.6% in 1998.
Interest expense, net of interest income, remained level at $44.2 in the 1999
second quarter as compared with $44.1 in 1998. For the first half of 1999
interest expense increased to $90.1 compared with $87.3 in 1998 primarily as a
result of increased levels of debt incurred in connection with stock
repurchases.
The effective tax rate for the second quarter 1999 was 34.0% versus 33.0% for
the second quarter 1998. The effective rate for the first half of 1999 was 34.2%
versus 33.7% for the same period in 1998. The 34.2% rate reflects the company's
current estimate of its full year effective income tax rate which is slightly
higher than the 1998 full year rate. The rate in 1998 benefited from global tax
planning strategies, including the realization of tax credits.
Net income for the second quarter 1999 increased 12.1% to $228.1 or $.38 per
share compared with $203.5 or $.34 per share in the prior year. For the first
half of 1999, net income increased 9.4% to $437.0 or $.73 per share compared
with $399.5 or $.66 per share in the prior year.
Liquidity and Capital Resources
- -------------------------------
Net cash provided by operations increased 14.7% to $551.5 in the 1999 first half
compared with $480.9 in the 1998 first half. The improvement was primarily
generated by the increase in operating profit. At June 30, 1999, $588.6 of
commercial paper was classified as long-term debt in accordance with the
Company's intent and ability to refinance these obligations on a long-term
basis. The ratio of net debt to total capitalization (defined as the ratio of
the book values of debt less cash and marketable securities ["net debt"] to net
debt plus equity) at June 30, 1999 was 59.5%.
Reference should be made to the Company's 1998 Annual Report on Form 10-K for
additional information regarding liquidity and capital resources.
11
<PAGE>
COLGATE-PALMOLIVE COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
(Dollars in Millions Except Per Share Amounts)
- --------------------------------------------------------------------------------
Year 2000 Update
- ----------------
The Company has developed plans to address the possible exposures related to the
year 2000 on the Company's operations as outlined in the 1998 Form 10-K. The
Company is converting to SAP, which is year 2000 compliant. At June 30, 1999,
computer systems supporting 97% of the Company's operations have either been
converted to SAP or remediated to be year 2000 compliant.
The year 2000 project plan has not materially changed and is progressing in
accordance with previously identified time schedules outlined in the 1998 Form
10-K. Specifically, the first three phases of the plan are complete and the
fourth phase is substantially completed with respect to the system testing,
remediation, certification and contingency plans for critical internal systems.
In addition, we have been working closely with our business critical suppliers
to ensure that we can continue to meet consumer demand. Progress against project
plan timelines is monitored through a system of internal reporting and is
presented to senior management and the Audit Committee of the Board of Directors
or the full Board on a frequent basis.
The Company currently estimates the total incremental cost, including external
contractor costs, costs to modify existing systems and costs of internal
resources dedicated to preparing for the year 2000, to be approximately $30
million, of which over 75% has been spent to date. These costs are charged to
expense as incurred and are incremental to the investment in SAP systems.
Readers are cautioned that forward-looking statements made in the Year 2000
Update are based on management's estimates, assumptions and projections. Some of
the factors that could cause actual results to differ materially from
expectations expressed in the Company's forward-looking statements are described
in the Company's Form 8-K filed with the Securities and Exchange Commission on
November 13, 1998 under the caption "Cautionary Statement on Forward-Looking
Statements". These factors include, but are not limited to, the risks associated
with international operations, the activities of competitors, retail trade
practices, the success of new product introductions, cost pressures and
manufacturing and environmental matters.
12
<PAGE>
COLGATE-PALMOLIVE COMPANY
PART II. OTHER INFORMATION
- -------- -----------------
- --------------------------------------------------------------------------------
Item 1. Legal Proceedings
- ------- -----------------
For information regarding legal matters refer to Note 16 to the
consolidated financial statements on page 37 of the registrant's
Annual Report on Form 10-K for the year ended December 31, 1998.
Item 4. Submission of Matters to a Vote of Security Holders
- ------- ---------------------------------------------------
The Company's annual meeting of stockholders was held on May 5, 1999.
The matters voted on and the results of the vote were as follows:
(a) Jill K. Conway, Ronald E. Ferguson, Ellen M. Hancock, David W.
Johnson, John P. Kendall, Richard J. Kogan, Delano E. Lewis,
Reuben Mark and Howard B. Wentz, Jr. were elected directors of
the Company. The results of the vote were as follows:
Votes Received Votes Withheld
-------------- --------------
Jill K. Conway 262,961,810 3,830,115
Ronald E. Ferguson 263,011,729 3,780,196
Ellen M. Hancock 263,007,162 3,784,763
David W. Johnson 263,039,891 3,752,034
John P. Kendall 262,844,409 3,947,516
Richard J. Kogan 263,094,876 3,697,049
Delano E. Lewis 262,993,460 3,798,465
Reuben Mark 262,961,766 3,830,159
Howard B. Wentz, Jr. 262,907,635 3,884,290
(b) The ratification of the selection of Arthur Andersen LLP as
auditors for the year ending December 31, 1999 was approved. The
results of the vote were as follows:
Votes For Votes Against Abstentions
----------- ------------- -----------
262,906,227 2,496,457 1,389,241
(c) Reapproval of the Executive Incentive Compensation Plan, in an
amended and updated form, was approved. The results of the vote
were as follows:
Votes For Votes Against Abstentions
----------- ------------- -----------
246,816,570 16,659,042 3,316,313
13
<PAGE>
COLGATE-PALMOLIVE COMPANY
PART II. OTHER INFORMATION (continued)
- -------- -----------------
- --------------------------------------------------------------------------------
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits:
Exhibit 12 Ratio of Earnings to Fixed Charges.
Exhibit 27 Financial Data Schedule.
(b) Reports on Form 8-K.
None.
The exhibits indicated above which are not included with the Form 10-Q are
available upon request and payment of a reasonable fee approximating the
registrant's cost of providing and mailing the exhibits. Inquiries should be
directed to:
Colgate-Palmolive Company
Office of the Secretary (10-Q Exhibits)
300 Park Avenue
New York, NY 10022-7499
14
<PAGE>
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)
Principal Financial Officer:
August 12, 1999 /s/ Stephen C. Patrick
--------------------------
Stephen C. Patrick
Chief Financial Officer
Principal Accounting Officer:
August 12, 1999 /s/ Dennis J. Hickey
-------------------------------
Dennis J. Hickey
Vice President and
Corporate Controller
15
<PAGE>
Exhibit 12
----------
COLGATE-PALMOLIVE COMPANY
-------------------------
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
-------------------------------------------------
Dollars in Millions (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1999
-------------
<S> <C>
Income before income taxes $ 664.6
Add:
Interest on indebtedness and amortization of debt expense and
discount or premium 108.5
Portion of rents representative of interest factor 17.1
Interest on ESOP debt, net of dividends 1.9
Less:
Income of less than fifty-percent-owned subsidiaries (2.9)
--------
Income as adjusted $ 789.2
========
Fixed Charges:
Interest on indebtedness and amortization of debt expense and
discount or premium $ 108.5
Portion of rents representative of interest factor 17.1
Interest on ESOP debt, net of dividends 1.9
Capitalized interest 3.0
--------
Total fixed charges $ 130.5
========
Ratio of earnings to fixed charges 6.0
========
</TABLE>
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 8.7%. These notes are guaranteed by the Company. Interest incurred on
the ESOP's notes during the first half of 1999 was $16.2. This interest is
funded through preferred and common stock dividends. The fixed charges presented
above include interest on ESOP indebtedness to the extent it is not funded
through preferred and common stock dividends.
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FORM THE
QUARTERLY REPORT ON FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 198
<SECURITIES> 54
<RECEIVABLES> 1,207
<ALLOWANCES> 34
<INVENTORY> 743
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0
371
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</TABLE>
