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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000950130-01-500364.txt : 20010329
<SEC-HEADER>0000950130-01-500364.hdr.sgml : 20010329
ACCESSION NUMBER: 0000950130-01-500364
CONFORMED SUBMISSION TYPE: 10-K405
PUBLIC DOCUMENT COUNT: 7
CONFORMED PERIOD OF REPORT: 20001231
FILED AS OF DATE: 20010328
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: COLGATE PALMOLIVE CO
CENTRAL INDEX KEY: 0000021665
STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844]
IRS NUMBER: 131815595
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K405
SEC ACT:
SEC FILE NUMBER: 001-00644
FILM NUMBER: 1582539
BUSINESS ADDRESS:
STREET 1: 300 PARK AVE
CITY: NEW YORK
STATE: NY
ZIP: 10022
BUSINESS PHONE: 2123102000
MAIL ADDRESS:
STREET 1: 300 PARK AVE
STREET 2: 14TH FLOOR
CITY: NEW YORK
STATE: NY
ZIP: 10022
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K405
<SEQUENCE>1
<FILENAME>d10k405.txt
<DESCRIPTION>FORM 10-K FOR PERIOD ENDING 12/31/2000
<TEXT>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2000
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
----------------
[LOGO] 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 (Zip Code)
offices)
Registrant's telephone number, including area code 212-310-2000
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
registered
$4.25 Preferred Stock, without par
value,cumulative dividend New York Stock Exchange
Common Stock, $1.00 par value New York Stock Exchange
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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
At February 28, 2001 the aggregate market value of stock held by non-
affiliates was $33.3 billion. There were 563,630,696 shares of Common Stock
outstanding as of February 28, 2001.
DOCUMENTS INCORPORATED BY REFERENCE:
Documents Form 10-K Reference
Portions of Proxy Statement for the Part III, Items 10 through 13
2001 Annual Meeting
<PAGE>
PART I
ITEM 1. BUSINESS
(a) General Development of the Business
Colgate-Palmolive Company (together with its subsidiaries, the "Company"),
which was organized under the laws of the State of Delaware in 1923, is a
leading consumer products company whose products are marketed in over 200
countries and territories throughout the world.
For recent business developments, refer to the information set forth under
the captions "Results of Operations", "Liquidity and Capital Resources" and
"Outlook" in Part II, Item 7 of this report.
(b) Financial Information About Industry Segments
Worldwide net sales and earnings by business segment and geographic region
during the last three years appear under the caption "Results of Operations"
in Part II, Item 7 of this report on pages 6 and 7.
(c) Narrative Description of the Business
The Company manages its business in two distinct product segments: Oral,
Personal and Household Care, and Pet Nutrition. Colgate is a global leader in
Oral Care with the leading toothpaste brand in the U.S. and throughout many
parts of the world. Colgate's Oral Care products include toothbrushes,
toothpaste, mouth rinses and dental floss, and pharmaceutical products for
dentists and other oral health professionals. Significant recent product
launches in this segment include Colgate Fresh Confidence, Colgate Sparkling
White and Colgate Total Plus Whitening toothpastes, and the Colgate Actibrush
battery-powered toothbrush.
Colgate leads many segments of the Personal Care market with several
products including bar and liquid soaps, shampoos, conditioners, deodorants
and antiperspirants and shave products. Colgate is the market leader in liquid
soaps in the U.S. and globally is the market leader in male deodorant sticks.
Strong brands in this segment include Irish Spring, Softsoap brand liquid soap
and Palmolive, which is available as a soap and, in many countries, as a
shampoo and conditioner. Colgate also manufactures and markets Mennen
deodorants and men's toiletries.
Colgate manufactures and markets a wide array of products for Household
Care. Major products include Palmolive and Ajax dishwashing liquid and
antibacterial hand soaps and new Palmolive Spring Sensations dishwashing
liquid. Colgate also markets other household names in cleaning and laundry
products such as Fab, Ajax and Murphy's oil soap which is North America's
leading wood floor cleaner. In the Company's major markets outside the U.S.,
Colgate is number one in fabric softeners with leading brands Suavitel in
Latin America, Soupline in Europe and Softlan in Asia.
Sales of Oral, Personal, Household and Fabric Care products accounted for
34%, 24%, 16% and 14% of total worldwide sales in 2000, respectively.
Geographically, Oral Care is a significant part of the Company's business in
Asia/Africa, comprising approximately 54% of sales in that region for 2000.
See also Note 1 to the Consolidated Financial Statements.
Colgate, through its Hill's Pet Nutrition subsidiary, is the world leader in
specialty pet nutrition products for dogs and cats. Hill's markets pet foods
primarily under two trademarks: Science Diet, which is sold by authorized pet
supply retailers, breeders and veterinarians for every day nutritional needs,
and Prescription Diet for dogs and cats with disease conditions. Hill's
recently relaunched the entire Science Diet line and added several innovative
products to both the Science Diet and Prescription Diet brands. Hill's sells
its products in 85 countries and leads the premium pet food segment in Japan.
Sales of Pet Nutrition products accounted for 12% of total worldwide sales in
2000.
2
<PAGE>
Research and Development
Strong research and development capabilities enable Colgate to support its
many brands with technologically sophisticated products for consumers'
personal needs and pet nutrition needs. During 2000, the Company spent $176.1
million on research and development activities.
Distribution; Competition; Trademarks and Patents
The Company's products are generally marketed by a direct sales force at
each individual operating subsidiary or business unit. In some instances,
distributors or brokers are used. No single customer accounts for as much as
10% of the Company's sales.
Most raw materials are purchased from other companies and are available from
several sources. While it is generally the Company's policy to streamline
supply chain sources, raw materials used in the manufacture of the Company's
products are generally available in adequate supply. Raw material commodities
such as tallow and essential oils are subject to wide price variations. No one
raw material represents a significant portion of the Company's total material
requirements.
The Company's products are marketed under highly competitive conditions.
Products similar to those produced and sold by the Company are available from
competitors in the U.S. and overseas. Certain of the Company's competitors are
larger and have greater resources than the Company. Product quality, brand
recognition and acceptance and marketing capability largely determine success
in the Company's business segments.
Trademarks are considered to be of material importance to the Company's
business. The Company follows a practice of seeking trademark protection by
all available means in the United States and throughout the world where the
Company's products are sold. Principal global trademarks include Colgate,
Palmolive, Mennen, Protex, Ajax, Soupline, Suavitel, Fab, Science Diet and
Prescription Diet in addition to several regional trademarks. These trademarks
are of significant importance to the Company and its subsidiaries within their
markets. The Company's rights in these trademarks endure for as long as they
are used and registered. Although the Company owns a number of patents, no one
patent is considered significant to the business as a whole.
Employees
At year-end, the Company employed approximately 38,300 employees of which
approximately 80% were located outside the United States.
Environmental Matters
Compliance with environmental rules and regulations has not significantly
affected the Company's earnings or competitive position. Capital expenditures
for environmental control facilities totaled $15.3 million for 2000. For
future years, expenditures are expected to be in the same range. The Company
has programs that are designed to ensure that its operations and facilities
meet or exceed applicable rules and regulations. Please refer to Note 14 to
the Consolidated Financial Statements.
(d) Financial Information About Foreign and Domestic Operations and Export
Sales
For information concerning geographic area financial data refer to the
information set forth under the caption "Results of Operations" in Part II,
Item 7 of this report.
3
<PAGE>
ITEM 2. PROPERTIES
The Company owns and leases a total of 280 manufacturing, distribution,
research and office facilities worldwide. Corporate headquarters is housed in
leased facilities at 300 Park Avenue, New York, New York.
In the United States, the Company operates 43 facilities, of which 21 are
owned. Major U.S. manufacturing and warehousing facilities used by the Oral,
Personal and Household Care segment are located in Kansas City, Kansas;
Morristown, New Jersey; Jeffersonville, Indiana, and Cambridge, Ohio. The Pet
Nutrition segment has major facilities in Bowling Green, Kentucky; Topeka,
Kansas; Commerce, California; and Richmond, Indiana. Research facilities are
located throughout the world with the primary research center for Oral,
Personal and Household Care products located in Piscataway, New Jersey and the
primary research center for Pet Nutrition products located in Topeka, Kansas.
Overseas, the Company operates 237 facilities, of which 92 are owned, in
over 70 countries. Major overseas facilities used by the Oral, Personal and
Household Care segment are located in Australia, Brazil, Canada, China,
Colombia, France, Italy, Mexico, Thailand, the United Kingdom and elsewhere
throughout the world. In some areas outside the United States, products are
either manufactured by independent contractors under Company specifications or
are imported from the United States or elsewhere.
All facilities operated by the Company are, in general, well maintained and
adequate for the purpose for which they are intended. The Company conducts
continuing reviews of its facilities with the view to modernization and cost
reduction.
ITEM 3. LEGAL PROCEEDINGS
In 1995, the Company acquired the Kolynos oral care business from American
Home Products, as described in the Company's Form 8-K dated January 10, 1995.
On September 8, 1998, the Company's Brazilian subsidiary received notice of an
administrative proceeding from the Central Bank of Brazil primarily taking
issue with certain filings made with the Central Bank in connection with the
financing of this strategic transaction, but in no way challenging or seeking
to unwind the acquisition. The Central Bank of Brazil in January 2001 notified
the Company of its decision in this administrative proceeding to impose a fine
which, at current exchange rates, approximates $125 million. The Company has
appealed the decision to the Brazilian Monetary System Appeals Council,
thereby suspending the fine pending the decision of the Council. Further
appeals are available within the Brazilian federal courts. Management
believes, based on the opinion of its Brazilian legal counsel and other
experts, that the filings challenged by the Central Bank fully complied with
Brazilian law and that the Company will prevail on appeal. The Company intends
to challenge this fine vigorously.
For information regarding other legal matters refer to Note 14 of the
Consolidated Financial Statements included herein.
4
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following is a list of executive officers as of March 28, 2001:
<TABLE>
<CAPTION>
Date First
Elected
Name Age Officer Present Title
---- --- ---------- -------------
<C> <C> <C> <S>
Reuben Mark.......... 62 1974 Chairman of the Board and Chief
Executive Officer
William S. Shanahan.. 60 1983 President
Lois D. Juliber...... 52 1991 Chief Operating Officer
Javier G. Teruel..... 50 1996 Chief Growth Officer
Ian M. Cook.......... 48 1996 Executive Vice President
President, Colgate-North America
Stephen C. Patrick... 51 1990 Chief Financial Officer
Andrew D. Hendry..... 53 1991 Senior Vice President
General Counsel and Secretary
Michael J. Tangney... 56 1993 Executive Vice President
President, Colgate-Latin America
Robert J. Joy........ 54 1996 Vice President
Global Human Resources
Dennis J. Hickey..... 52 1998 Vice President and
Corporate Controller
Robert C. Wheeler.... 59 1991 Chief Executive Officer
Hill's Pet Nutrition, Inc.
Steven R. Belasco.... 54 1991 Vice President
Taxation and Real Estate
Brian J. Heidtke..... 60 1986 Vice President
Finance and Corporate Treasurer
Ronald T. Martin..... 52 2001 Vice President
Global Business Practices & Public
Affairs
Michele C. Mayes..... 51 2001 Vice President
Legal and Assistant Secretary
Peter D. McLeod...... 60 1984 Vice President
Manufacturing Engineering Technology
Barrie M. Spelling... 57 1994 President
Global Oral Care
</TABLE>
Each of the executive officers listed above has served the registrant or its
subsidiaries in various executive capacities for the past five years.
The Company By-Laws, paragraph 38, states: The officers of the corporation
shall hold office until their respective successors are chosen and qualified
in their stead, or until they have resigned, retired or been removed in the
manner hereinafter provided. Any officer elected or appointed by the board of
directors may be removed at any time by the affirmative vote of a majority of
the whole board of directors.
5
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER MATTERS
Refer to the information regarding the market for the Company's Common Stock
and the quarterly market price information appearing under the caption "Market
and Dividend Information" included herein; the information under "Capital
Stock and Stock Compensation Plans" in Note 5 to the Consolidated Financial
Statements included herein; and the "Number of shareholders of record" and
"Cash dividends declared and paid per common share" under the caption
"Historical Financial Summary" included herein.
ITEM 6. SELECTED FINANCIAL DATA
Refer to the information set forth under the caption "Historical Financial
Summary" included herein.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
(Dollars in Millions Except Per Share Amounts)
Results of Operations
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Worldwide Net Sales by Business Segment and
Geographic Region
Oral, Personal and Household Care
North America(/1/)............................ $2,310.0 $2,143.7 $2,047.5
Latin America................................. 2,507.5 2,356.7 2,407.9
Europe........................................ 1,890.1 2,028.8 2,067.7
Asia/Africa................................... 1,532.0 1,519.7 1,452.6
-------- -------- --------
Total Oral, Personal and Household Care......... 8,239.6 8,048.9 7,975.7
Total Pet Nutrition(/2/)........................ 1,118.3 1,069.3 995.9
-------- -------- --------
Total Net Sales............................... $9,357.9 $9,118.2 $8,971.6
======== ======== ========
</TABLE>
- --------
(/1/Net)sales in the United States for Oral, Personal and Household Care were
$2,025.7, $1,880.8 and $1,799.6 in 2000, 1999 and 1998, respectively.
(/2/Net)sales in the United States for Pet Nutrition were $736.0, $709.2 and
$688.6 in 2000, 1999 and 1998, respectively.
Net Sales and Earnings Before Interest and Taxes (EBIT)
Worldwide net sales increased 3% to $9,357.9 in 2000 on volume growth of 6%.
Net sales would have grown 7% excluding foreign currency translation. Net
sales in the Oral, Personal and Household Care segment increased 2% on 6%
volume growth, while net sales and volume in Pet Nutrition increased by 5%. In
1999, worldwide net sales increased 2% to $9,118.2 on volume growth of 5%,
reflecting the negative impact of foreign currency translation.
EBIT rose from $1,566.2 in 1999 to $1,740.5 in 2000. The 11% increase
reflected the Company's strong volume growth and cost-control initiatives that
were effective in increasing margins. EBIT increased 10% in 1999 to $1,566.2
from $1,423.0 in 1998.
Gross Profit
Gross profit margin increased to 54.4%, above both the 1999 level of 53.7%
and the 1998 level of 52.2%. This favorable trend continues to reflect the
Company's financial strategy to improve all aspects of its supply
6
<PAGE>
(Dollars in Millions Except Per Share Amounts)
chain through global sourcing, restructuring and other cost-reduction
initiatives, as well as its emphasis on higher margin products.
Selling, General and Administrative Expenses
Selling, general and administrative expenses as a percentage of sales were
35% in 2000, 36% in 1999 and 36% in 1998. The overall spending as a percentage
of sales declined slightly as a result of the Company's continued focus on
expense containment, offset by higher advertising costs.
Other Expense, Net
Other expense, net, consists principally of amortization of goodwill and
other intangible assets, minority interest in earnings of less-than-100%-owned
consolidated subsidiaries, earnings from equity investments, gains on sale of
real estate and non-core product lines, and other miscellaneous gains and
losses. Other expense, net, decreased in 2000 from $73.6 to $52.3 primarily
due to unrealized gains of $15.4 on foreign currency contracts.
Items included in other expense, net during 2000 were one-time charges of
$92.7 ($61.2 aftertax), including a restructuring charge recorded in the
fourth quarter related to the realignment of certain manufacturing operations
and the exiting of our business in Nigeria. Also included are one-time gains
of $102.0 ($60.9 aftertax) recorded on the sale of real estate and the sale of
our Viva detergent brand in Mexico.
During 1999 the Company incurred one-time charges related to the exiting of
certain activities, such as the manufacture of aluminum tubes in Brazil. These
charges were offset by a gain of $33.0 ($17.6 aftertax) recorded on the sale
of the U.S. Baby Magic brand and a gain of $17.4 ($11.4 aftertax) on the sale
of real estate.
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Worldwide Earnings by Business Segment and
Geographic Region
Oral, Personal and Household Care
North America.............................. $ 482.4 $ 413.0 $ 395.5
Latin America.............................. 603.1 535.7 502.0
Europe..................................... 320.0 342.0 317.5
Asia/Africa................................ 194.0 166.7 158.6
-------- -------- --------
Total Oral, Personal and Household Care...... 1,599.5 1,457.4 1,373.6
Total Pet Nutrition.......................... 243.5 219.9 173.8
Corporate Overhead and Other................. (102.5) (111.1) (124.4)
-------- -------- --------
Earnings Before Interest and Taxes........... 1,740.5 1,566.2 1,423.0
Interest Expense, Net........................ (173.3) (171.6) (172.9)
-------- -------- --------
Income Before Income Taxes................... $1,567.2 $1,394.6 $1,250.1
======== ======== ========
</TABLE>
Segment Results
North America
North America achieved strong results for the year. Net sales grew 8% to
$2,310.0 as unit volume rose 8% driven by the introduction of new products in
all core categories. These new products included the battery-powered Colgate
Actibrush toothbrush, Colgate 2in1 toothpaste & mouthwash, and Colgate
Sensitive Maximum Strength and Colgate Sparkling White toothpastes. In the
Personal Care category, the launch of Softsoap Fruit Essentials body wash and
hand soap and Softsoap 2-in-1 with moisturizing lotion boosted sales and
market shares as well. In 1999, North America achieved overall sales growth
excluding divestments of 6% to $2,143.7 on volume growth of 8%.
7
<PAGE>
(Dollars in Millions Except Per Share Amounts)
EBIT for North America was up 17% to $482.4. The region achieved earnings
growth through volume gains, higher gross profit margins and continued focus
on cost control. EBIT in 1999 was up 4% to $413.0.
Latin America
Net sales in Latin America increased 6% to $2,507.5 on 6% volume growth led
by strong growth in Mexico, Brazil, Venezuela and Central America. The
regional introduction of Colgate Fresh Confidence gel toothpaste as well as
Palmolive Botanicals shampoo and soap strengthened market shares in the Oral
and Personal Care categories. In 1999, Latin America net sales decreased 2% to
$2,356.7 on 3% volume growth.
EBIT in Latin America increased 13% to $603.1 as a result of continued
efforts in cost reduction, selective selling price increases and higher
margins. EBIT in 1999 was up 7% to $535.7 due to selective selling price
increases and lower advertising expenditures in Brazil.
Europe
Net sales in Europe declined 7% to $1,890.1 as unit volume gains of 4% were
offset by the weakened euro. Germany, Italy, the Nordic Group and the
Netherlands achieved the strongest volume increases in the region. The Colgate
Actibrush, and Colgate Fresh Confidence and Colgate Whitening toothpastes led
Oral Care market growth in the region. Market share growth in the Personal and
Household Care categories coupled with the introduction of new products such
as Ajax Shower Power cleaner, Palmolive Actif men's shower gel and Palmolive
Spring Sensations dishwashing liquid contributed to increased volumes in
Europe. In 1999, Europe net sales declined 2% to $2,028.8, due primarily to
the weakened euro, while volume grew 2%.
EBIT for Europe decreased 6% to $320.0 as a result of foreign currency
weakness. EBIT in 1999 rose 8% to $342.0 due to higher margins and higher
volumes.
Asia/Africa
Net sales in the Asia/Africa region excluding divestments increased 2% to
$1,532.0 as volume grew 7% with the strongest performance in China, India and
the Philippines. China continued to experience significant growth through
introduction of new products such as Softlan fabric softener and Palmolive
Naturals shampoo as well as its newly formed majority-owned joint venture with
China's leading toothbrush manufacturer. Throughout the region the Company
continues to benefit from the success of products such as the Colgate
Actibrush toothbrush and Colgate Fresh Confidence and Colgate Herbal
toothpastes. In 1999, net sales in the Asia/Africa region increased 5% to
$1,519.7 as volume increased 7%.
EBIT grew 16% in Asia/Africa to $194.0 driven by increased volumes across
the region. EBIT in 1999 grew 5% to $166.7.
Pet Nutrition
Net sales for Hill's Pet Nutrition increased 5% to $1,118.3 on 5% volume
growth. North American sales increased due to the introduction of new products
including Science Diet products for sensitive skin and sensitive stomach, as
well as the relaunch of the entire Science Diet line with a proprietary
antioxidant formulation. Strong growth occurred in Japan, Europe and Latin
America due to the introduction of new feline varieties and improvements in
the entire dry cat food line, complemented by increased advertising. In 1999,
net sales for the Pet Nutrition segment increased 7% to $1,069.3 on 8% volume
gains.
EBIT in the Pet Nutrition segment grew 11% to $243.5 driven by volume and
cost-improvement initiatives. EBIT in 1999 increased 27% to $219.9 on both
higher volumes and lower raw material costs.
8
<PAGE>
(Dollars in Millions Except Per Share Amounts)
Interest Expense, Net
Interest expense, net, was $173.3 compared with $171.6 in 1999 and $172.9 in
1998. The increase in net interest expense in 2000 reflected increased average
debt levels related to increased share repurchases during the year compared
with 1999.
Income Taxes
The effective tax rate on income was 32.1% in 2000 versus 32.8% in 1999 and
32.1% in 1998. Global tax planning strategies, including the realization of
tax credits, benefited the effective tax rate in all three years presented.
Net Income
Net income was $1,063.8 in 2000 or $1.70 per share on a diluted basis
compared with $937.3 in 1999 or $1.47 per share and $848.6 in 1998 or $1.30
per share.
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Identifiable Assets
Oral, Personal and Household Care
North America................................... $2,122.8 $2,076.5 $2,101.5
Latin America................................... 2,091.3 2,151.4 2,314.7
Europe.......................................... 1,369.4 1,469.1 1,554.1
Asia/Africa..................................... 1,013.0 1,061.3 1,031.3
-------- -------- --------
Total Oral, Personal and Household Care........... 6,596.5 6,758.3 7,001.6
Total Pet Nutrition............................... 478.5 476.1 502.6
Total Corporate................................... 177.3 188.7 181.0
-------- -------- --------
Total Identifiable Assets(/1/).................... $7,252.3 $7,423.1 $7,685.2
======== ======== ========
</TABLE>
- --------
(/1/Long-lived)assets in the United States, primarily fixed assets and
goodwill, represented approximately one-third of total long-lived assets
of $4,813.3, $4,952.3 and $5,330.0 in 2000, 1999 and 1998, respectively.
Liquidity and Capital Resources
Net cash provided by operations increased 19% to $1,536.2 compared with
$1,292.7 in 1999 and $1,178.8 in 1998. The increases reflect the Company's
improved profitability and working capital management. Cash generated from
operations was used to fund capital spending, increase dividends and
repurchase common shares.
During 2000, long-term debt increased to $2,857.1 from $2,582.2 and total
debt increased to $2,978.2 from $2,789.5 primarily due to increased share
repurchases.
As of December 31, 2000, $436.1 of domestic and foreign commercial paper was
outstanding. These borrowings carry a Standard & Poor's rating of A1 and a
Moody's rating of P1. The commercial paper as well as other short-term
borrowings are classified as long-term debt at December 31, 2000, as it is the
Company's intent and ability to refinance such obligations on a long-term
basis. The Company has additional sources of liquidity available in the form
of lines of credit maintained with various banks. At December 31, 2000, such
unused lines of credit amounted to $1,398.1. In addition, at December 31,
2000, the Company had $438.2 available under a shelf registration filed in
2000.
As of December 31, 1999, $477.3 of domestic and foreign commercial paper was
outstanding. An unused line of credit of approximately $1,527.9 was available.
9
<PAGE>
(Dollars in Millions Except Per Share Amounts)
The ratio of EBITDA (defined as earnings before interest, income taxes,
depreciation and amortization) to interest expense increased to 10.4 in 2000
from 9.0 in 1999 and 8.6 in 1998. The ratio has increased each year consistent
with the Company's trend of higher earnings.
<TABLE>
<CAPTION>
2000 1999 1998
------ ------ ------
<S> <C> <C> <C>
Capital Expenditures
North America......................................... $ 91.8 $ 97.6 $ 90.1
Latin America......................................... 121.3 118.2 99.2
Europe................................................ 41.7 60.8 83.7
Asia/Africa........................................... 45.8 57.0 80.5
------ ------ ------
Total Oral, Personal and Household Care................. 300.6 333.6 353.5
Total Pet Nutrition..................................... 29.2 21.1 20.7
Total Corporate......................................... 36.8 18.1 15.4
------ ------ ------
Total Capital Expenditures.......................... $366.6 $372.8 $389.6
====== ====== ======
Depreciation and Amortization
North America......................................... $ 99.3 $ 97.4 $ 95.6
Latin America......................................... 74.9 69.0 75.6
Europe................................................ 67.8 75.9 67.9
Asia/Africa........................................... 47.0 46.6 42.1
------ ------ ------
Total Oral, Personal and Household Care................. 289.0 288.9 281.2
Total Pet Nutrition..................................... 30.6 32.5 32.5
Total Corporate......................................... 18.2 18.8 16.6
------ ------ ------
Total Depreciation and Amortization................. $337.8 $340.2 $330.3
====== ====== ======
</TABLE>
Capital expenditures were 4% of net sales for 2000, 1999 and 1998. Capital
spending continues to be focused primarily on projects that yield high
aftertax returns. Capital expenditures for 2001 are expected to continue at
the current rate of approximately 4% of net sales.
Other investing activities in 2000, 1999 and 1998 included strategic
acquisitions and divestitures around the world. The aggregate purchase price
of all 2000, 1999 and 1998 acquisitions was $64.9, $46.4 and $22.6,
respectively. The Mexico Viva detergent brand was sold in 2000, U.S. Baby
Magic brand was sold in 1999 and the HandiWipes brand was sold in 1998. The
aggregate sale price of all 2000, 1999 and 1998 sales of brands was $102.5,
$94.7 and $57.4, respectively.
In 1993, the Company participated in the formation of a financing subsidiary
with outside investors. The Company consolidated this entity and reported the
amounts invested by outside investors as a minority interest. During 2000 this
subsidiary ceased operations resulting in a cash payment of $113.9 to the
outside investors.
The Company repurchases common shares in open market and private
transactions for employee benefit plans and to maintain its targeted capital
structure. Aggregate repurchases for 2000 were 19.1 million shares, with a
total purchase price of $1,040.6. In 1999, 12.8 million shares were
repurchased, with a total purchase price of $624.4.
Dividend payments were $382.4, up from $366.0 in 1999 and $345.6 in 1998.
Common stock dividend payments increased to $.63 per share in 2000 from $.59
per share in 1999 and $.55 per share in 1998. The Series B Preference Stock
dividends were declared and paid at the rate of $5.04 per share in 2000, $4.96
per share in 1999 and $4.88 in 1998.
10
<PAGE>
(Dollars in Millions Except Per Share Amounts)
Internally generated cash flows are adequate to support currently planned
business operations, acquisitions and capital expenditures. Significant
acquisitions would require external financing.
The Company is a party to various superfund and other environmental matters
and is contingently liable with respect to lawsuits, taxes and other matters
arising out of the normal course of business. Management proactively reviews
and manages its exposure to, and the impact of, environmental matters. While
it is possible that the Company's cash flows and results of operations in a
particular quarter or year could be affected by the one-time impacts of the
resolution of such contingencies, it is the opinion of management that the
ultimate disposition of these matters, to the extent not previously provided
for, will not have a material impact on the Company's financial position or
ongoing cash flows and results of operations.
Restructuring Reserves
In December 2000 the Company recorded a charge of $63.9 ($42.5 aftertax)
associated with the realignment of three manufacturing locations in Latin
America and the exiting of our business in Nigeria. The charge recorded
included $14.2 for termination costs and $49.7 for exiting of manufacturing
operations. At December 31, 2000, the remaining reserve of $7.2 is classified
as a current liability representing termination costs for 979 employees to be
paid during 2001.
In September 1995, a reserve of $460.5 was established to cover a worldwide
restructuring of manufacturing and administrative operations. The cost of
completing the restructuring activities approximated the original estimate.
The planned restructuring projects, primarily in North America and Europe but
also affecting Hill's Pet Nutrition and Colgate locations in Asia/Africa and
certain Latin America locations, were completed as of December 31, 2000.
Managing Foreign Currency and Interest Rate Exposure
The Company is exposed to market risk from foreign currency exchange rate
fluctuations and interest rates. To manage the volatility relating to foreign
currency exposures on a consolidated basis, the Company utilizes a number of
techniques, including selective borrowings in local currencies, purchases of
forward foreign currency exchange contracts, balance sheet management and
increases in selling prices.
The Company operates in over 200 countries and territories and is exposed to
currency fluctuation related to manufacturing and selling its products in
currencies other than the U.S. dollar. The major foreign currency exposures
involve the markets in the European Union, Mexico and Brazil, which represent
13%, 11% and 5%, respectively, of 2000 worldwide sales. The Company actively
monitors its foreign currency exposures in these markets and has been able to
offset the impact of foreign currency rate movements through a combination of
selling price increases, cost-containment measures and foreign currency
hedging activities. The Company primarily utilizes forward exchange and
currency swap contracts to hedge portions of its exposures relating to foreign
currency purchases and sales, as well as assets and liabilities created in the
normal course of business.
The Company utilizes simple instruments such as interest rate swaps to
manage the Company's mix of fixed and floating rate debt. The Company's target
floating rate obligations as a percentage of the Company's global debt is set
by policy.
It is the Company's policy to enter into foreign exchange and interest rate
swap contracts with diversified and reputable counterparties and as such, the
Company does not anticipate non-performance by any counterparty.
Value at Risk
The Company's risk management procedures include the monitoring of interest
rate and foreign exchange exposures and the Company's offsetting hedge
positions utilizing statistical analyses of cash flows, market value,
11
<PAGE>
(Dollars in Millions Except Per Share Amounts)
sensitivity analysis and value-at-risk estimations. However, the use of these
techniques to quantify the market risk of such instruments should not be
construed as an endorsement of their accuracy or the accuracy of the related
assumptions. The Company utilizes a Value-at-Risk (VAR) model and an Earnings-
at-Risk (EAR) model that are intended to measure the maximum potential loss in
its interest rate and foreign exchange financial instruments assuming adverse
market conditions occur, given a 95% confidence level. The models utilize a
variance/covariance modeling technique. Historical interest rates and foreign
exchange rates from the preceding year are used to estimate the volatility and
correlation of future rates.
The estimated maximum potential one-day loss in fair value of interest rate
or foreign exchange rate instruments, calculated using the VAR model, is not
material to the consolidated financial position, results of operations or cash
flows of the Company. The estimated maximum yearly loss in earnings due to
interest rate or foreign exchange rate instruments, calculated utilizing the
EAR model, is not material to the Company's results of operations. Actual
results in the future may differ materially from these projected results due
to actual developments in the global financial markets.
A discussion of the Company's accounting policies for financial instruments
is included in the Summary of Significant Accounting Policies in the notes to
the Consolidated Financial Statements, and further disclosure relating to
financial instruments is included in the Fair Value of Financial Instruments
note.
Accounting Changes
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS 133, as amended,
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 or other
comprehensive income depending on whether a derivative is designated as part
of a hedge transaction. The adoption of SFAS 133 on January 1, 2001 did not
result in a material impact on the Company's financial position, results of
operations or cash flows.
In July 2000, the FASB's Emerging Issues Task Force (EITF) reached a
consensus on Issue No. 00-14, "Accounting for Certain Sales Incentives." This
issue addresses the recognition, measurement and income statement
classification for various types of sales incentives including discounts,
coupons, rebates and free products. The Company will adopt this consensus
effective April 1, 2001 and it is not expected to have a material impact on
the Company's financial position, results of operations or cash flows. The
effect of adoption will result in the reclassification of approximately
$150.6, $129.1 and $117.5 for the years ending December 31, 2000, 1999 and
1998, respectively, from selling, general and administrative expenses to a
reduction of net sales.
Conversion to the Euro Currency
On January 1, 1999, certain member countries of the European Union
established fixed conversion rates between their existing currencies and
adopted the euro as their new common legal currency. As of that date, the euro
began trading on currency exchanges and the legacy currencies were to remain
legal tender in the participating countries for a transition period between
January 1, 1999 and January 1, 2002.
The Company is addressing the issues involved with the introduction of the
euro through its worldwide conversion to the SAP system and other measures.
The more important issues facing the Company include reassessing currency risk
and processing tax and accounting records.
Based upon progress to date, the Company believes that use of the euro will
not have a significant impact on the manner in which it conducts its business
affairs and processes its business and accounting records. Accordingly,
conversion to the euro is not expected to have a material effect on the
Company's financial position, cash flows or results of operations.
12
<PAGE>
(Dollars in Millions Except Per Share Amounts)
Outlook
Looking forward into 2001, the Company is well positioned for continued
growth in most of its markets. However, movements in foreign currency exchange
rates can impact future operating results as measured in U.S. dollars. In
particular, economic uncertainty in some countries in Latin America and
changes in the value of the euro may impact the overall results of Latin
America and Europe.
The Company expects the continued success of Colgate Total toothpaste, using
patented proprietary technology, to bolster worldwide oral care leadership and
expects new products in Oral Care and other categories to add potential for
further growth. Overall, subject to global economic conditions, the Company
does not expect the 2001 market conditions to be materially different from
those experienced in 2000 and the Company expects its positive momentum to
continue. Historically, the consumer products industry has been less
susceptible to changes in economic growth than many other industries, and
therefore the Company constantly evaluates projects that will focus operations
on opportunities for enhanced growth potential. Over the long term, Colgate's
continued focus on its consumer products business and the strength of its
global brand names, its broad international presence in both developed and
developing markets, and its strong capital base all position the Company to
take advantage of growth opportunities and to continue to increase
profitability and shareholder value.
Forward-Looking Statements
Readers are cautioned that the Results of Operations and other sections of
this report contain forward-looking statements that are based on management's
estimates, assumptions and projections. A description of some of the factors
that could cause actual results to differ materially from expectations
expressed in the Company's forward-looking statements set forth 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," together with any future such filings made with the Securities
and Exchange Commission, are incorporated herein by reference. 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, manufacturing and environmental
matters.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See the "Index to Financial Statements" which is located on page 17 of this
report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information regarding directors and executive officers of the registrant set
forth in the Proxy Statement for the 2001 Annual Meeting is incorporated
herein by reference, as is the text in Part I of this report under the caption
"Executive Officers of the Registrant".
ITEM 11. EXECUTIVE COMPENSATION
The information set forth in the Proxy Statement for the 2001 Annual Meeting
is incorporated herein by reference.
13
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security ownership of management set forth in the Proxy Statement for the
2001 Annual Meeting is incorporated herein by reference.
(b) There are no arrangements known to the registrant that may at a
subsequent date result in a change in control of the registrant.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set forth in the Proxy Statement for the 2001 Annual Meeting
is incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Financial Statements and Financial Statement Schedules
See the "Index to Financial Statements" which is located on page 17 of this
report.
(b) Exhibits. See the exhibit index which is included herein.
(c) Reports on Form 8-K
None.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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)
By: /s/ Reuben Mark
---------------------------------
Reuben Mark
Chairman of the Board and Chief
Executive Officer
Date: March 28, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on March 28, 2001 by the following persons on
behalf of the registrant and in the capacities indicated.
(a) Principal Executive Officer
(c) Principal Accounting Officer
/s/ Reuben Mark /s/ Dennis J. Hickey
- ------------------------------------- -------------------------------------
Reuben Mark Dennis J. Hickey
Chairman of the Board Vice President and
and Chief Executive Officer Corporate Controller
(b) Principal Financial Officer
(d) Directors:
/s/ Stephen C. Patrick Jill K. Conway, Ronald E. Ferguson,
- ------------------------------------- Ellen M. Hancock, David W. Johnson,
Stephen C. Patrick John P. Kendall, Richard J. Kogan,
Chief Financial Officer Reuben Mark, Howard B. Wentz, Jr.
/s/ Andrew D. Hendry
-------------------------------------
Andrew D. Hendry
as Attorney-in-Fact
15
<PAGE>
United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-K
FINANCIAL STATEMENTS
For The Year Ended December 31, 2000
COLGATE-PALMOLIVE COMPANY
NEW YORK, NEW YORK 10022
16
<PAGE>
Index to Financial Statements
<TABLE>
<CAPTION>
Page
----
<S> <C>
Financial Statements
Consolidated Statements of Income for the years
ended December 31, 2000, 1999, and 1998................................... 18
Consolidated Balance Sheets at December 31, 2000 and 1999.................. 19
Consolidated Statements of Retained Earnings, Comprehensive Income
and Changes in Capital Accounts for the years ended
December 31, 2000, 1999 and 1998.......................................... 20
Consolidated Statements of Cash Flows for the years
ended December 31, 2000, 1999 and 1998.................................... 21
Notes to Consolidated Financial Statements................................. 22
Market and Dividend Information............................................ 38
Financial Statement Schedules for the years ended
December 31, 2000, 1999 and 1998:
Schedule II--Valuation and Qualifying Accounts............................. 39
Report of Independent Public Accountants................................... 42
Selected Financial Data
Historical Financial Summary............................................... 43
</TABLE>
All other financial statements and schedules not listed have been omitted
since the required information is included in the financial statements or the
notes thereto or is not applicable or required.
17
<PAGE>
COLGATE-PALMOLIVE COMPANY
Consolidated Statements of Income
(Dollars in Millions Except Per Share Amounts)
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
Net sales............................................ $9,357.9 $9,118.2 $8,971.6
Cost of sales........................................ 4,265.5 4,224.0 4,290.3
-------- -------- --------
Gross profit....................................... 5,092.4 4,894.2 4,681.3
Selling, general and administrative expenses......... 3,299.6 3,254.4 3,197.1
Other expense, net................................... 52.3 73.6 61.2
Interest expense, net................................ 173.3 171.6 172.9
-------- -------- --------
Income before income taxes........................... 1,567.2 1,394.6 1,250.1
Provision for income taxes........................... 503.4 457.3 401.5
-------- -------- --------
Net income......................................... $1,063.8 $ 937.3 $ 848.6
======== ======== ========
Earnings per common share, basic..................... $ 1.81 $ 1.57 $ 1.40
======== ======== ========
Earnings per common share, diluted................... $ 1.70 $ 1.47 $ 1.30
======== ======== ========
</TABLE>
See Notes to Consolidated Financial Statements.
18
<PAGE>
COLGATE-PALMOLIVE COMPANY
Consolidated Balance Sheets
(Dollars in Millions Except Per Share Amounts)
<TABLE>
<CAPTION>
2000 1999
--------- ---------
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents.............................. $ 206.6 $ 199.6
Marketable securities.................................. 5.9 35.6
Receivables (less allowances of $39.8 and $37.2,
respectively)......................................... 1,195.4 1,100.8
Inventories............................................ 686.6 783.7
Other current assets................................... 252.7 235.1
--------- ---------
Total current assets................................. 2,347.2 2,354.8
Property, plant and equipment, net...................... 2,528.3 2,551.1
Goodwill and other intangibles, net..................... 2,096.4 2,185.4
Other assets............................................ 280.4 331.8
--------- ---------
<CAPTION>
$ 7,252.3 $ 7,423.1
========= =========
<S> <C> <C>
Liabilities and Shareholders' Equity
Current Liabilities
Notes and loans payable................................ $ 121.1 $ 207.3
Current portion of long-term debt...................... 320.2 338.9
Accounts payable....................................... 738.9 764.8
Accrued income taxes................................... 163.7 116.6
Other accruals......................................... 900.2 845.9
--------- ---------
Total current liabilities............................ 2,244.1 2,273.5
Long-term debt........................................... 2,536.9 2,243.3
Deferred income taxes.................................... 447.3 398.6
Other liabilities........................................ 555.9 674.0
Shareholders' Equity
Preferred stock........................................ 354.1 366.5
Common stock, $1 par value (1,000,000,000 shares
authorized, 732,853,180 shares issued)................ 732.9 732.9
Additional paid-in capital............................. 1,144.9 1,063.2
Retained earnings...................................... 4,893.7 4,212.3
Cumulative translation adjustments..................... (1,269.7) (1,136.2)
--------- ---------
<CAPTION>
5,855.9 5,238.7
<S> <C> <C>
Unearned compensation.................................. (344.4) (348.6)
Treasury stock, at cost................................ (4,043.4) (3,056.4)
--------- ---------
Total shareholders' equity........................... 1,468.1 1,833.7
--------- ---------
$ 7,252.3 $ 7,423.1
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
19
<PAGE>
COLGATE-PALMOLIVE COMPANY
Consolidated Statements of Retained Earnings, Comprehensive Income and Changes
in Capital Accounts
(Dollars in Millions Except Per Share Amounts)
<TABLE>
<CAPTION>
Common Shares Additional Treasury Shares Cumulative Compre-
------------------- Paid-in --------------------- Retained Translation hensive
Shares Amount Capital Shares Amount Earnings Adjustment Income
----------- ------ ---------- ----------- -------- -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1,
1998................... 590,805,390 $732.9 $ 660.9 142,047,790 $1,680.3 $3,138.0 $(693.7)
Net income.............. 848.6 $ 848.6
Other comprehensive
income:
Cumulative translation
adjustment............ (106.1) (106.1)
--------
Total comprehensive
income................. $ 742.5
========
Dividends declared:
Series B Convertible
Preference Stock, net
of income taxes....... (20.4)
Preferred stock........ (.5)
Common stock........... (324.7)
Shares issued for stock
options................ 6,714,850 129.0 (6,714,850) 145.1
Treasury stock acquired. (14,298,912) 14,298,912 542.5
Other................... 2,198,152 34.7 (2,198,152) (34.1)
----------- ------ -------- ----------- -------- -------- ---------
Balance, December 31,
1998................... 585,419,480 $732.9 $ 824.6 147,433,700 $2,333.8 $3,641.0 $(799.8)
----------- ------ -------- ----------- -------- -------- ---------
Net income.............. 937.3 $ 937.3
Other comprehensive
income:
Cumulative translation
adjustment............ (336.4) (336.4)
--------
Total comprehensive
income................. $ 600.9
========
Dividends declared:
Series B Convertible
Preference Stock, net
of income taxes....... (20.5)
Preferred stock........ (.5)
Common stock........... (345.0)
Shares issued for stock
options................ 6,894,907 128.0 (6,894,907) 132.5
Treasury stock acquired. (12,849,744) 12,849,744 624.4
Other................... (601,597) 110.6 611,087 (34.3)
----------- ------ -------- ----------- -------- -------- ---------
Balance, December 31,
1999................... 578,863,046 $732.9 $1,063.2 153,999,624 $3,056.4 $4,212.3 $(1,136.2)
----------- ------ -------- ----------- -------- -------- ---------
Net income.............. 1,063.8 $1,063.8
Other comprehensive
income:
Cumulative translation
adjustment............ (133.5) (133.5)
--------
Total comprehensive
income................. $ 930.3
========
Dividends declared:
Series B Convertible
Preference Stock, net
of income taxes....... (20.3)
Preferred stock........ (.4)
Common stock........... (361.7)
Shares issued for stock
options................ 4,796,186 96.7 (4,796,186) 54.3
Treasury stock acquired. (19,099,681) 19,099,681 1,040.6
Other................... 2,096,323 (15.0) (2,084,163) (107.9)
----------- ------ -------- ----------- -------- -------- ---------
Balance, December 31,
2000................... 566,655,874 $732.9 $1,144.9 166,218,956 $4,043.4 $4,893.7 $(1,269.7)
=========== ====== ======== =========== ======== ======== =========
</TABLE>
See Notes to Consolidated Financial Statements.
20
<PAGE>
COLGATE-PALMOLIVE COMPANY
Consolidated Statements of Cash Flows
(Dollars in Millions Except Per Share Amounts)
<TABLE>
<CAPTION>
2000 1999 1998
--------- -------- --------
<S> <C> <C> <C>
Operating Activities
Net income.................................... $ 1,063.8 $ 937.3 $ 848.6
Adjustments to reconcile net income to net
cash provided by operations:
Restructured operations..................... (14.9) (35.6) (34.8)
Depreciation and amortization............... 337.8 340.2 330.3
Income taxes and other, net................. 69.7 122.3 60.7
Cash effects of changes in:
Receivables............................... (91.9) (81.3) (15.2)
Inventories............................... 59.0 (82.8) (19.5)
Payables and accruals..................... 112.7 92.6 8.7
--------- -------- --------
Net cash provided by operations........... 1,536.2 1,292.7 1,178.8
--------- -------- --------
Investing Activities
Capital expenditures.......................... (366.6) (372.8) (389.6)
Payment for acquisitions, net of cash
acquired..................................... (64.9) (44.1) (22.6)
Sale of non-core product lines................ 102.5 89.9 57.4
Sale of marketable securities and investments. 137.4 22.7 18.7
Other......................................... (17.0) (27.2) (15.8)
--------- -------- --------
Net cash used for investing activities...... (208.6) (331.5) (351.9)
--------- -------- --------
Financing Activities
Principal payments on debt.................... (739.4) (491.0) (677.5)
Proceeds from issuance of debt................ 925.4 555.5 762.9
Payments to outside investors................. (113.9) -- --
Dividends paid................................ (382.4) (366.0) (345.6)
Purchase of common stock...................... (1,040.6) (624.4) (542.5)
Other......................................... 34.9 (14.2) (27.3)
--------- -------- --------
Net cash used for financing activities...... (1,316.0) (940.1) (830.0)
--------- -------- --------
Effect of exchange rate changes on cash and cash
equivalents.................................... (4.6) (3.2) 1.7
--------- -------- --------
Net increase (decrease) in cash and cash equiva-
lents.......................................... 7.0 17.9 (1.4)
Cash and cash equivalents at beginning of year.. 199.6 181.7 183.1
--------- -------- --------
Cash and cash equivalents at end of year........ $ 206.6 $ 199.6 $ 181.7
========= ======== ========
Supplemental Cash Flow Information
Income taxes paid............................... $ 306.3 $ 292.4 $ 273.8
Interest paid................................... 203.0 210.9 202.8
Principal payments on ESOP debt, guaranteed by
the Company.................................... 8.8 6.7 6.1
</TABLE>
See Notes to Consolidated Financial Statements.
21
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements
(Dollars in Millions Except Per Share Amounts)
1. Nature of Operations
The Company manufactures and markets a wide variety of products in the U.S.
and around the world in two distinct business segments: Oral, Personal and
Household Care, and Pet Nutrition. Oral, Personal and Household Care products
include toothpaste, oral rinses and toothbrushes, bar and liquid soaps,
shampoos, conditioners, deodorants and antiperspirants, shave products,
laundry and dishwashing detergents, fabric softeners, cleansers and cleaners,
bleaches and other similar items. These products are sold primarily to
wholesale and retail distributors worldwide. Pet Nutrition products include
pet food products manufactured and marketed by Hill's Pet Nutrition. The
principal customers for Pet Nutrition products are veterinarians and specialty
pet retailers. Principal global trademarks include Colgate, Palmolive, Mennen
Speed Stick, Protex, Ajax, Soupline, Suavitel, Fab, Science Diet and
Prescription Diet in addition to various regional trademarks.
The Company's principal classes of products accounted for the following
percentages of worldwide sales for the past three years:
<TABLE>
<CAPTION>
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
Oral Care................................................ 34% 32% 32%
Personal Care............................................ 24 24 24
Household Surface Care................................... 16 16 16
Fabric Care.............................................. 14 14 15
Pet Nutrition............................................ 12 12 11
</TABLE>
2. Summary of Significant Accounting Policies
Principles of Consolidation
The Consolidated Financial Statements include the accounts of Colgate-
Palmolive Company and its majority-owned subsidiaries. Intercompany
transactions and balances have been eliminated. Investments in companies in
which the Company's interest is between 20% and 50% are accounted for using
the equity method. The Company's share of the net income from such investments
is recorded as equity earnings and is classified as Other expense, net, in the
Consolidated Statements of Income.
Revenue Recognition
Sales are recorded at the time products are shipped to trade customers. Net
sales reflect units shipped at selling list prices reduced by promotion
allowances.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent gains and losses at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Accounting Changes
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS 133, as
22
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
amended, 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 or other
comprehensive income depending on whether a derivative is designated as part
of a hedge transaction. The adoption of SFAS 133 on January 1, 2001 did not
result in a material impact on the Company's financial position, results of
operations or cash flows.
In July 2000, the FASB's Emerging Issues Task Force (EITF) reached a
consensus on Issue No. 00-14, "Accounting for Certain Sales Incentives." This
issue addresses the recognition, measurement and income statement
classification for various types of sales incentives including discounts,
coupons, rebates and free products. The Company will adopt this consensus
effective April 1, 2001. The effect of adoption will result in the
reclassification of approximately $150.6, $129.1 and $117.5 for the years
ending December 31, 2000, 1999 and 1998, respectively, from selling, general
and administrative expenses to a reduction of net sales.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three
months or less when purchased to be cash equivalents. Investments in short-
term securities that do not meet the definition of cash equivalents are
classified as marketable securities. Marketable securities are reported at
cost, which approximates market.
Inventories
Inventories are valued at the lower of cost or market. The first-in, first-
out (FIFO) method is used to value most inventories. The remaining inventories
are valued using the last-in, first-out (LIFO) method.
Property, Plant and Equipment
Land, buildings, and machinery and equipment are stated at cost.
Depreciation is provided, primarily using the straight-line method, over
estimated useful lives ranging from 3 to 40 years.
Goodwill and Other Intangibles
Intangible assets principally consist of goodwill, which is amortized on the
straight-line method, generally over a period of 40 years. Other intangible
assets, principally non-compete agreements and customer lists, are amortized
on the straight-line method over periods ranging from 5 to 20 years depending
on their useful lives.
The recoverability of the carrying values of intangible assets is evaluated
periodically based on a review of forecasted operating cash flows and the
profitability of the related business. For the three-year period ended
December 31, 2000, there were no material adjustments to the carrying values
of intangible assets resulting from these evaluations.
Shipping and Handling Costs
Shipping and handling costs are classified as selling, general and
administrative expenses and were $619.9, $590.0 and $575.9 for the years ended
December 31, 2000, 1999 and 1998, respectively.
Advertising
Advertising costs are expensed in the year incurred.
23
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
Income Taxes
Deferred taxes are recognized for the expected future tax consequences of
temporary differences between the amounts carried for financial reporting and
tax purposes. Provision is made currently for taxes payable on remittances of
overseas earnings; no provision is made for taxes on overseas retained
earnings that are deemed to be permanently reinvested.
Translation of Overseas Currencies
The assets and liabilities of subsidiaries, other than those operating in
highly inflationary environments, are translated into U.S. dollars at year-end
exchange rates, with resulting translation gains and losses accumulated in a
separate component of shareholders' equity. Income and expense items are
converted into U.S. dollars at average rates of exchange prevailing during the
year.
For subsidiaries operating in highly inflationary environments, inventories,
goodwill and property, plant and equipment are translated at the rate of
exchange on the date the assets were acquired, while other assets and
liabilities are translated at year-end exchange rates. Translation adjustments
for these operations are included in net income.
In 1999, due to the devaluation of the Brazilian real, $242.4 was charged to
cumulative translation adjustments which was, in effect, a write-down of
foreign-currency-denominated assets (primarily goodwill and property, plant
and equipment). This will be accompanied by lower amortization and
depreciation expense in future periods.
Financial Instruments
The net effective cash payment of the interest rate swap contracts combined
with the related interest payments on the debt that they hedge are accounted
for as interest expense. Those interest rate instruments that do not qualify
as hedge instruments for accounting purposes are marked to market and recorded
at fair value.
Gains and losses from foreign exchange contracts that hedge the Company's
investments in its foreign subsidiaries are shown in the cumulative
translation adjustments account included in shareholders' equity. Gains and
losses from contracts that hedge firm commitments are recorded in the balance
sheets as a component of the related receivable or payable until realized, at
which time they are recognized in the statements of income. The contracts that
hedge anticipated sales and purchases do not qualify as hedges for accounting
purposes. Accordingly, the related gains and losses are calculated using the
current forward rates and are recorded in the Consolidated Statements of
Income as Other expense, net.
Segment Information
The Company operates in two product segments: Oral, Personal and Household
Care, and Pet Nutrition. The operations of the Oral, Personal and Household
Care segment are managed geographically in four reportable operating segments:
North America, Latin America, Europe and Asia/Africa.
Management measures segment profit as operating income, which is defined as
income before interest expense and income taxes. The accounting policies of
the operating segments are the same as those described in the summary of
significant accounting policies. Corporate operations include research and
development costs, unallocated overhead costs, and gains and losses on sales
of non-strategic brands and assets. Corporate assets include primarily benefit
plan assets.
24
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
The financial and descriptive information on the Company's geographic area
and industry segment data, appearing in the tables contained in management's
discussion of this report, is an integral part of these financial statements.
Reclassifications
Certain prior year balances have been reclassified to conform with current
year presentation.
3. Acquisitions and Divestitures
During 2000, 1999 and 1998, the Company made several acquisitions totaling
$64.9, $46.4 and $22.6, respectively. Individually, none of these acquisitions
were significant.
The acquisitions were accounted for as purchases, and accordingly, the
purchase prices were allocated to the net tangible and intangible assets
acquired based on estimated fair values at the dates the acquisitions were
consummated. The results of operations of the acquired businesses have been
included in the Consolidated Financial Statements since the respective
acquisition dates. The inclusion of pro forma financial data for all
acquisitions would not have materially affected the financial information
included herein.
The aggregate sale price of all 2000, 1999 and 1998 divestitures was $102.5,
$94.7 and $57.4, respectively. These divestitures included the Mexico Viva
detergent brand in 2000, the U.S. Baby Magic brand in 1999 and the HandiWipes
brand in 1998.
4. Long-Term Debt and Credit Facilities
Long-term debt consists of the following at December 31:
<TABLE>
<CAPTION>
Weighted
Average
Interest
Rate Maturities 2000 1999
-------- ---------- -------- --------
<S> <C> <C> <C> <C>
Notes................................. 7.3% 2001-2028 $1,458.4 $1,423.5
Commercial paper and other short-term
borrowings, reclassified............. 6.3 2001 436.1 477.3
ESOP notes, guaranteed by the Company. 8.7 2001-2009 358.1 366.9
Payable to banks...................... 5.4 2001-2007 603.5 313.7
Capitalized leases.................... 1.0 .8
-------- --------
2,857.1 2,582.2
Less: current portion of long-term
debt................................. 320.2 338.9
-------- --------
$2,536.9 $2,243.3
======== ========
</TABLE>
Commercial paper and certain other short-term borrowings are classified as
long-term debt as it is the Company's intent and ability to refinance such
obligations on a long-term basis. Scheduled maturities of debt outstanding at
December 31, 2000, excluding short-term borrowings reclassified, are as
follows: 2001--$320.2; 2002--$358.0; 2003--$623.4; 2004--$123.3; 2005--$77.2,
and $918.9 thereafter. The Company has entered into interest rate swap
agreements and foreign exchange contracts related to certain of these debt
instruments (see Note 11).
25
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
At December 31, 2000, the Company had unused credit facilities amounting to
$1,398.1. Commitment fees related to credit facilities are not material. The
weighted average interest rate on short-term borrowings, excluding amounts
reclassified, as of December 31, 2000 and 1999, was 7.6% and 7.8%,
respectively.
The Company's long-term debt agreements include various restrictive
covenants and require the maintenance of certain defined financial ratios with
which the Company is in compliance.
5. Capital Stock and Stock Compensation Plans
Preferred Stock
Preferred Stock consists of 250,000 authorized shares without par value. It
is issuable in series, of which one series of 125,000 shares, designated $4.25
Preferred Stock, with a stated and redeemable value of $100 per share, has
been issued. The $4.25 Preferred Stock is redeemable only at the option of the
Company. At December 31, 2000 and 1999, 103,350 and 115,510 shares of $4.25
Preferred Stock, respectively, were outstanding.
Preference Stock
In 1988, the Company authorized the issuance of 50,000,000 shares of
Preference Stock, without par value. The Series B Convertible Preference
Stock, which is convertible into eight shares of common stock, ranks junior to
all series of the Preferred Stock. At December 31, 2000 and 1999, 5,254,847
and 5,446,442 shares of Series B Convertible Preference Stock, respectively,
were outstanding and issued to the Company's Employee Stock Ownership Plan.
Shareholder Rights Plan
Under the Company's Shareholder Rights Plan, each share of the Company's
common stock carries with it one Preference Share Purchase Right ("Rights").
The Rights themselves will at no time have voting power or pay dividends. The
Rights become exercisable only if a person or group acquires 15% or more of
the Company's common stock or announces a tender offer, the consummation of
which would result in ownership by a person or group of 15% or more of the
common stock. When exercisable, each Right entitles a holder to buy one two-
hundredth of a share of a new series of preference stock at an exercise price
of $220.00, subject to adjustment.
If the Company is acquired in a merger or other business combination, each
Right will entitle a holder to buy, at the Right's then current exercise
price, a number of the acquiring company's common shares having a market value
of twice such price. In addition, if a person or group acquires 15% or more of
the Company's common stock, each Right will entitle its holder (other than
such person or members of such group) to purchase, at the Right's then current
exercise price, a number of shares of the Company's common stock having a
market value of twice the Right's exercise price.
Further, at any time after a person or group acquires 15% or more (but less
than 50%) of the Company's common stock, the Board of Directors may, at its
option, exchange part or all of the Rights (other than Rights held by the
acquiring person or group) for shares of the Company's common stock on a one-
for-one basis.
The Company, at the option of its Board of Directors, may amend the Rights
or redeem the Rights for $.01 at any time before the acquisition by a person
or group of beneficial ownership of 15% or more of its common stock. The Board
of Directors is also authorized to reduce the 15% threshold to not less than
10%. Unless redeemed earlier, the Rights will expire on October 31, 2008.
26
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
Stock Repurchases
During 1998, the Company entered into a series of forward purchase
agreements on its common stock. These agreements are settled on a net basis in
shares of the Company's common stock. To the extent that the market price of
the Company's common stock on a settlement date is higher/(lower) than the
forward purchase price, the net differential is received/(paid) by the
Company. As of December 31, 2000, agreements were in place covering
approximately $509.8 of the Company's common stock (7.9 million shares) that
had forward prices averaging $64.55 per share. During 2000 and 1999,
settlements resulted in the Company delivering 217,574 shares and receiving
2,322,701 shares, respectively, which were recorded as treasury stock
transactions.
Incentive Stock Plan
The Company has a plan that provides for grants of restricted stock awards
for officers and other executives of the Company and its major subsidiaries. A
committee of non-employee members of the Board of Directors administers the
plan. During 2000 and 1999, 667,090 and 692,238 shares, respectively, were
awarded to employees in accordance with the provisions of the plan.
Stock Option Plans
The Company's Stock Option Plans ("Plans") provide for the issuance of non-
qualified stock options to officers and key employees. Options are granted at
prices not less than the fair market value on the date of grant and vest over
three years. At 2000 year-end, 25,691,772 shares of common stock were
available for future grants.
The Plans contain a feature that provides for the grant of new options when
previously owned shares of Company stock are used to exercise existing
options. The number of new options granted under this feature is equal to the
number of shares of previously owned Company stock used to exercise the
original options and to pay the related required U.S. income tax. The new
options are granted at a price equal to the fair market value on the date of
the new grant and have the same expiration date as the original options
exercised.
Stock option plan activity is summarized below:
<TABLE>
<CAPTION>
2000 1999 1998
-------------------------- --------------------------- ---------------------------
Weighted Weighted Weighted
Average Average Average
Shares Exercise Price Shares Exercise Price Shares Exercise Price
---------- -------------- ----------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Options outstanding,
January 1.............. 39,196,097 $36 42,786,246 $28 45,534,784 $23
Granted................. 9,761,712 53 11,414,328 53 12,537,288 39
Exercised............... (9,361,403) 32 (14,586,597) 26 (14,917,508) 22
Canceled or expired..... (453,519) 40 (417,880) 49 (368,318) 21
---------- ----------- -----------
Options outstanding,
December 31............ 39,142,887 41 39,196,097 36 42,786,246 28
========== =========== ===========
Options exercisable,
December 31............ 24,839,562 $35 23,813,363 $28 26,688,764 $23
========== =========== ===========
</TABLE>
27
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
The following table summarizes information relating to currently outstanding
and exercisable options as of December 31, 2000:
<TABLE>
<CAPTION>
Weighted Average Weighted Weighted
Remaining Options Average Options Average
Range of Exercise Prices Contractual Life in Years Outstanding Exercise Price Exercisable Exercise Price
------------------------ ------------------------- ----------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
$10.64-$20.31........... 4 7,036,460 $17 7,036,460 $17
$20.79-$31.08........... 4 5,116,003 27 4,876,003 27
$31.33-$44.59........... 7 6,565,573 36 4,539,054 36
$44.61-$52.19........... 9 6,789,775 48 1,205,781 48
$52.31-$55.66........... 8 8,771,756 55 3,556,606 54
$55.72-$64.75........... 5 4,863,320 59 3,625,658 58
---------- ----------
6 39,142,887 $41 24,839,562 $35
========== ==========
</TABLE>
The Company applies Accounting Principles Board Opinion No. 25, "Accounting
for Stock Issued to Employees," and related interpretations in accounting for
options granted under the Plans. Accordingly, no compensation expense has been
recognized. Had compensation expense been determined based on the
Black-Scholes option pricing model value at the grant date for awards in 2000,
1999 and 1998 consistent with the provisions of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" (SFAS
123), the Company's net income, basic earnings per common share and diluted
earnings per common share would have been $1,006.1, $1.71 per share and $1.60
per share, respectively, in 2000; $891.9, $1.49 per share and $1.40 per share,
respectively, in 1999; and $803.5, $1.33 per share and $1.25 per share,
respectively, in 1998.
The weighted average Black-Scholes value of grants issued in 2000, 1999 and
1998 was $10.95, $8.61 and $6.24, respectively. The Black-Scholes value of
each option granted is estimated using the Black-Scholes option pricing model
with the following assumptions: option term until exercise ranging from 2 to 7
years, volatility ranging from 22% to 41%, risk-free interest rate ranging
from 5.0% to 6.2% and an expected dividend yield of 2.5%. The Black-Scholes
model used to determine the option values shown above was developed to
estimate the fair value of short-term freely tradable, fully transferable
options without vesting restrictions and was not designed to value reloads,
all of which significantly differ from the Company's stock option awards. The
value of this model is also limited by the inclusion of highly subjective
assumptions which greatly affect calculated values.
6. Employee Stock Ownership Plan
In 1989, the Company expanded its Employee Stock Ownership Plan ("ESOP")
through the introduction of a leveraged ESOP covering certain employees who
have met certain eligibility requirements. The ESOP issued $410.0 of long-term
notes due through 2009 bearing an average interest rate of 8.7%. The long-term
notes, which are guaranteed by the Company, are reflected in the accompanying
Consolidated Balance Sheets. The ESOP used the proceeds of the notes to
purchase 6.3 million shares of Series B Convertible Preference Stock from the
Company. The Stock has a minimum redemption price of $65 per share and pays
semiannual dividends equal to the higher of $2.44 or the current dividend paid
on eight common shares for the comparable six-month period. During 2000, the
ESOP entered into a loan agreement with the Company under which the benefits
of the ESOP may be extended through 2035.
Dividends on these preferred shares, as well as common shares also held by
the ESOP, are paid to the ESOP trust and, together with contributions, are
used by the ESOP to repay principal and interest on the outstanding
28
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
notes. Preferred shares are released for allocation to participants based upon
the ratio of the current year's debt service to the sum of total principal and
interest payments over the life of the loan. At December 31, 2000, 1,654,219
shares were allocated to participant accounts and 3,600,628 shares were
available for future allocation. Each allocated share may be converted by the
trustee into eight common shares but preferred shares generally convert only
after the employee ceases to work for the Company.
Dividends on these preferred shares are deductible for income tax purposes
and, accordingly, are reflected net of their tax benefit in the Consolidated
Statements of Retained Earnings, Comprehensive Income and Changes in Capital
Accounts.
Annual expense related to the leveraged ESOP, determined as interest
incurred on the notes, less employee contributions and dividends received on
the shares held by the ESOP, plus the higher of either principal repayments on
the notes or the cost of shares allocated, was $3.4 in 2000, $9.2 in 1999 and
$2.4 in 1998. Similarly, unearned compensation, shown as a reduction in
shareholders' equity, is reduced by the higher of principal payments or the
cost of shares allocated.
Interest incurred on the ESOP's notes was $31.4 in 2000, $32.0 in 1999 and
$32.5 in 1998. The Company paid dividends on the stock held by the ESOP of
$28.6 in 2000, $29.1 in 1999 and $29.3 in 1998. Company contributions to the
ESOP were $4.8 in 2000, $9.3 in 1999 and $0 in 1998. Employee contributions to
the ESOP were $0 in 2000, $.6 in 1999 and $9.4 in 1998.
7. Retirement Plans and Other Retiree Benefits
Retirement Plans
The Company, its U.S. subsidiaries and some of its overseas subsidiaries
maintain defined benefit retirement plans covering substantially all of their
employees. Benefits are based primarily on years of service and employees'
career earnings. In the Company's principal U.S. plans, funds are contributed
to the trusts in accordance with regulatory limits to provide for current
service and for any unfunded projected benefit obligation over a reasonable
period. Assets of the plans consist principally of common stocks, guaranteed
investment contracts with insurance companies, investments in real estate
funds and U.S. Government and corporate obligations. Domestic plan assets also
include investments in the Company's common stock representing 11% and 10% of
plan assets at December 31, 2000 and 1999, respectively.
Other Retiree Benefits
The Company and certain of its subsidiaries provide health care and life
insurance benefits for retired employees to the extent not provided by
government-sponsored plans. The Company utilizes a portion of its leveraged
ESOP, in the form of future retiree contributions, to reduce its obligation to
provide these postretirement benefits and offset its current service cost.
Postretirement benefits otherwise are not currently funded.
29
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
Summarized information of the Company's defined benefit retirement plans and
postretirement plans are as follows:
<TABLE>
<CAPTION>
Other
Pension Benefits Retiree Benefits
------------------------------------ ------------------
2000 1999 2000 1999 2000 1999
-------- -------- ------- ------- -------- --------
North America International
------------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Change in Benefit
Obligation
Benefit obligation at
beginning of year...... $ 919.2 $ 998.3 $ 311.0 $ 329.6 $ 156.1 $ 153.0
Service cost............ 28.7 29.4 11.5 12.4 (5.5) (5.0)
Interest cost........... 70.7 65.9 19.5 19.0 16.6 14.5
Participant's
contribution........... 3.0 3.1 2.3 2.3 -- --
Acquisitions/plan
amendments............. -- .2 4.2 .1 -- (.2)
Actuarial loss/(gain)... 39.0 (96.7) 2.5 3.5 11.3 5.4
Foreign exchange impact. (1.9) (.7) (22.7) (38.3) (2.2) (.2)
Benefits paid........... (83.0) (80.3) (20.7) (17.6) (12.1) (11.4)
-------- -------- ------- ------- -------- --------
Benefit obligation at
end of year............ $ 975.7 $ 919.2 $ 307.6 $ 311.0 $ 164.2 $ 156.1
-------- -------- ------- ------- -------- --------
Change in Plan Assets
Fair value of plan
assets at beginning of
year................... $1,075.1 $ 962.8 $ 224.7 $ 215.0 $ -- $ --
Actual return on plan
assets................. (33.5) 179.7 4.5 35.6 -- --
Company contributions... 6.0 7.7 14.1 13.6 12.1 11.4
Plan participant
contributions.......... 3.0 3.1 2.3 2.3 -- --
Foreign exchange impact. (.1) 2.1 (16.0) (25.1) -- --
Acquisitions/plan
amendments............. -- -- -- .9 -- --
Benefits paid........... (83.0) (80.3) (20.7) (17.6) (12.1) (11.4)
-------- -------- ------- ------- -------- --------
Fair value of plan
assets at end of year.. $ 967.5 $1,075.1 $ 208.9 $ 224.7 $ -- $ --
-------- -------- ------- ------- -------- --------
Funded Status
Funded status at end of
year................... $ (8.2) $ 155.9 $ (98.7) $ (86.3) $(164.2) $(156.1)
Unrecognized net
transition
liability/(asset)...... .3 .8 (2.7) .5 -- --
Unrecognized net
actuarial (gain)/loss.. (2.6) (176.1) 13.6 (1.0) (7.9) (17.7)
Unrecognized prior
service costs.......... 27.3 33.8 7.6 4.0 (6.5) (7.5)
-------- -------- ------- ------- -------- --------
Net amount recognized... $ 16.8 $ 14.4 $ (80.2) $(82.8) $(178.6) $(181.3)
======== ======== ======= ======= ======== ========
Amounts Recognized in
Balance Sheet
Other assets............ $ 107.8 $ 97.7 $ 31.0 $ 34.4 $ -- $ --
Other liabilities....... (91.0) (83.3) (111.2) (117.2) (178.6) (181.3)
-------- -------- ------- ------- -------- --------
Net amount recognized... $ 16.8 $ 14.4 $ (80.2) $ (82.8) $(178.6) $(181.3)
======== ======== ======= ======= ======== ========
Weighted Average
Assumptions
Discount rate........... 7.75% 8.00% 7.30% 7.04% 7.75% 8.00%
Long-term rate of return
on plan assets......... 9.25% 9.25% 9.31% 8.75% -- --
Long-term rate of
compensation increase.. 5.00% 5.00% 4.48% 4.54% -- --
ESOP growth rate........ -- -- -- -- 10.00% 10.00%
</TABLE>
30
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
<TABLE>
<CAPTION>
Other Retiree
Pension Benefits Benefits
---------------------------------------------- --------------------
2000 1999 1998 2000 1999 1998 2000 1999 1998
------ ------ ------ ------ ------ ------ ----- ----- ------
North America International
---------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Components of Net
Periodic Benefit Costs
Service cost............ $ 28.7 $ 29.4 $ 28.1 $ 11.5 $ 12.4 $ 17.7 $ 3.7 $ 3.4 $ 4.0
Interest cost........... 70.7 65.9 68.9 19.5 19.0 18.2 16.6 14.5 14.7
Annual ESOP allocation.. -- -- -- -- -- -- (9.2) (8.4) (15.0)
Expected return on plan
assets................. (95.8) (85.5) (80.8) (16.2) (13.3) (13.9) -- -- --
Amortization of
transition/prior
service costs.......... 7.0 (1.0) (.9) .2 -- .1 (1.0) (.9) (.6)
Amortization of
actuarial (gain)/loss.. (6.7) 1.7 1.5 .4 .7 .5 .2 (.4) (1.0)
------ ------ ------ ------ ------ ------ ----- ----- ------
Net periodic benefit
cost................... $ 3.9 $ 10.5 $ 16.8 $ 15.4 $ 18.8 $ 22.6 $10.3 $ 8.2 $ 2.1
====== ====== ====== ====== ====== ====== ===== ===== ======
</TABLE>
The accumulated benefit obligation and fair value of plan assets for the
pension plans with accumulated benefit obligations in excess of plan assets
were $202.0 and $5.4, respectively, as of December 31, 2000, and $203.7 and
$9.7, respectively, as of December 31, 1999. These amounts represent non-
qualified domestic plans and plans at foreign locations that are primarily
unfunded, as such book reserves equal to the unfunded amount have been
recorded.
The projected benefit obligation and fair value of plan assets for the
pension plans with projected benefit obligations in excess of plan assets were
$291.7 and $50.4, respectively, as of December 31, 2000, and $271.6 and $42.9,
respectively, as of December 31, 1999.
The assumed medical cost trend rate used in measuring the postretirement
benefit obligation was 7.0% for 2001, 6.0% for 2002 and 5.0% for years
thereafter. Changes in this rate can have a significant effect on amounts
reported. The effect of a 1% increase/decrease in the assumed medical cost
trend rate would change the accumulated postretirement benefit obligation by
approximately $15.5; annual expense would change by approximately $1.8.
8. Income Taxes
The provision for income taxes consists of the following for the three years
ended December 31:
<TABLE>
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
United States..................................... $ 150.9 $ 130.5 $ 122.6
International..................................... 352.5 326.8 278.9
-------- -------- --------
$ 503.4 $ 457.3 $ 401.5
======== ======== ========
The components of income before income taxes are as follows for the three
years ended December 31:
<CAPTION>
2000 1999 1998
-------- -------- --------
<S> <C> <C> <C>
United States..................................... $ 483.3 $ 406.3 $ 362.0
International..................................... 1,083.9 988.3 888.1
-------- -------- --------
$1,567.2 $1,394.6 $1,250.1
======== ======== ========
</TABLE>
31
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
The difference between the statutory U.S. federal income tax rate and the
Company's global effective tax rate as reflected in the Consolidated
Statements of Income is as follows:
<TABLE>
<CAPTION>
Percentage of Income Before Tax 2000 1999 1998
------------------------------- ------ ------ -------
<S> <C> <C> <C>
Tax at U.S. statutory rate.......................... 35.0% 35.0% 35.0%
State income taxes, net of federal benefit.......... .4 .9 .7
Earnings taxed at other than U.S. statutory rate.... (1.7) (1.4) (2.6)
Reversal of valuation allowance..................... -- (.2) (2.7)
Other, net.......................................... (1.6) (1.5) 1.7
------ ------ -------
Effective tax rate.................................. 32.1% 32.8% 32.1%
====== ====== =======
In addition, net tax benefits/(costs) of $91.6 in 2000, $169.0 in 1999 and
$(18.5) in 1998 were recorded directly through equity which included tax
benefits related to employee benefit plans. The 1999 amount also reflects tax
benefits related to currency devaluation in Brazil whereas the 1998 amount
reflects tax adjustments recorded upon the change in accounting for Brazil as
no longer highly inflationary.
Differences between accounting for financial statement purposes and
accounting for tax purposes result in taxes currently payable being lower than
the total provision for income taxes as follows:
<CAPTION>
2000 1999 1998
------ ------ -------
<S> <C> <C> <C>
Excess of tax over book depreciation................ $ (3.2) $(11.6) $ (40.0)
Net restructuring spending.......................... 6.9 (14.1) (13.6)
Tax credit utilization.............................. (89.1) (39.0) (10.2)
Other, net.......................................... 29.0 16.0 (37.0)
------ ------ -------
$(56.4) $(48.7) $(100.8)
====== ====== =======
</TABLE>
The components of deferred tax assets (liabilities) are as follows at
December 31:
<TABLE>
<CAPTION>
2000 1999
-------- -------
<S> <C> <C>
Deferred Taxes--Current:
Accrued liabilities..................................... $ 65.3 $ 69.5
Restructuring........................................... 6.9 --
Other, net.............................................. 40.8 39.7
-------- -------
Total deferred taxes current............................ 113.0 109.2
======== =======
Deferred Taxes--Long-term:
Intangible assets....................................... (270.1) (275.9)
Property, plant and equipment........................... (257.4) (254.2)
Postretirement benefits................................. 54.7 57.0
Tax loss and tax credit carryforwards................... 81.4 140.4
Other, net.............................................. 18.8 71.1
Valuation allowance..................................... (74.7) (137.0)
-------- -------
Total deferred taxes long-term.......................... (447.3) (398.6)
-------- -------
Net deferred taxes.................................... $ (334.3) $(289.4)
======== =======
</TABLE>
32
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
The major component of the 2000 and 1999 valuation allowance relates to tax
benefits in certain jurisdictions not expected to be realized. The net change
in the valuation allowance for deferred taxes resulted from tax credits
utilized.
Applicable U.S. income and foreign withholding taxes have not been provided
on approximately $752.0 of undistributed earnings of foreign subsidiaries at
December 31, 2000. These earnings are currently considered to be permanently
invested and are not subject to such taxes. Determining the tax liability that
would arise if these earnings were remitted is not practicable.
9. Supplemental Income Statement Information
<TABLE>
<CAPTION>
Other Expense, Net 2000 1999 1998
- ------------------ ------ ------ ------
<S> <C> <C> <C>
Amortization of intangibles............................. $ 72.1 $ 75.6 $ 81.7
Earnings from equity investments........................ (2.2) (5.3) (5.3)
Minority interest....................................... 32.6 30.4 28.1
Other, net.............................................. (50.2) (27.1) (43.3)
------ ------ ------
$ 52.3 $ 73.6 $ 61.2
====== ====== ======
<CAPTION>
Interest Expense, Net 2000 1999 1998
- --------------------- ------ ------ ------
<S> <C> <C> <C>
Interest incurred....................................... $203.5 $224.0 $216.8
Interest capitalized.................................... (3.8) (11.8) (12.3)
Interest income......................................... (26.4) (40.6) (31.6)
------ ------ ------
$173.3 $171.6 $172.9
====== ====== ======
Research and development................................ $176.1 $169.2 $166.0
Media advertising....................................... 550.9 575.6 592.2
</TABLE>
10. Supplemental Balance Sheet Information
<TABLE>
<CAPTION>
Inventories 2000 1999
- ----------- ------ ------
<S> <C> <C>
Raw materials and supplies........................................ $206.2 $259.6
Work-in-process................................................... 30.7 33.2
Finished goods.................................................... 449.7 490.9
------ ------
$686.6 $783.7
====== ======
</TABLE>
Inventories valued under LIFO amounted to $133.0 and $137.3 at December 31,
2000 and 1999, respectively. The excess of current cost over LIFO cost at the
end of each year was $34.4 and $37.2, respectively. The liquidations of LIFO
inventory quantities had no effect on income in 2000 and 1999, and increased
income by $1.3 in 1998.
33
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
<TABLE>
<CAPTION>
Property, Plant and Equipment, Net 2000 1999
- ---------------------------------- --------- ---------
<S> <C> <C>
Land...................................................... $ 129.0 $ 128.4
Buildings................................................. 716.2 708.0
Machinery and equipment................................... 3,442.1 3,329.6
--------- ---------
4,287.3 4,166.0
Accumulated depreciation.................................. (1,759.0) (1,614.9)
--------- ---------
$ 2,528.3 $ 2,551.1
========= =========
<CAPTION>
Goodwill and Other Intangible Assets, Net 2000 1999
- ----------------------------------------- --------- ---------
<S> <C> <C>
Goodwill and other intangibles............................ $ 2,747.4 $ 2,764.3
Accumulated amortization.................................. (651.0) (578.9)
--------- ---------
$ 2,096.4 $ 2,185.4
========= =========
<CAPTION>
Other Accruals 2000 1999
- -------------- --------- ---------
<S> <C> <C>
Accrued payroll and employee benefits..................... $ 286.9 $ 341.4
Accrued advertising....................................... 267.1 268.3
Accrued interest.......................................... 53.0 52.5
Accrued taxes other than income taxes..................... 69.9 52.8
Restructuring accrual..................................... 7.2 5.4
Other..................................................... 216.1 125.5
--------- ---------
$ 900.2 $ 845.9
========= =========
<CAPTION>
Other Liabilities 2000 1999
- ----------------- --------- ---------
<S> <C> <C>
Minority interest......................................... $ 117.2 $ 226.3
Pension and other benefits................................ 380.8 381.8
Other..................................................... 57.9 65.9
--------- ---------
$ 555.9 $ 674.0
========= =========
</TABLE>
11. Fair Value of Financial Instruments
The Company utilizes interest rate swap contracts and foreign currency
exchange contracts to manage interest rate and foreign currency exposures.
(See Management's Discussion and Analysis--Managing Foreign Currency and
Interest Rate Exposure for further discussion.) In assessing the fair value of
financial instruments at December 31, 2000 and 1999, the Company has used
available market information and other valuation methodologies. Some judgment
is necessarily required in interpreting market data to develop the estimates
of fair value, and, accordingly, the estimates are not necessarily indicative
of the amounts that the Company could realize in a current market exchange.
34
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
The carrying amounts of cash and cash equivalents, marketable securities,
long-term investments and short-term debt approximated fair value as of
December 31, 2000 and 1999. The estimated fair value of the Company's
remaining financial instruments at December 31 are summarized as follows:
<TABLE>
<CAPTION>
2000 1999
-------------------- --------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
(Liabilities)/Assets
Long-term debt, including current
portion......................... $(2,857.1) $(2,906.6) $(2,582.2) $(2,616.5)
(including foreign exchange
contracts)
Other (liabilities)/assets:
Interest rate contracts.......... -- 3.7 -- (3.9)
Foreign exchange contracts....... 16.8 21.5 (4.1) (6.8)
Equity:
Foreign exchange contracts....... 1.5 1.4 .4 .6
(to hedge investment in
subsidiaries)
</TABLE>
As of December 31, 2000 and 1999, the Company had interest rate agreements
outstanding with an aggregate notional amount of $824.6 and $965.9,
respectively, with maturities through 2018.
As of December 31, 2000 and 1999, the Company had approximately $728.6 and
$431.6, respectively, of outstanding foreign exchange contracts. At December
31, 2000, approximately 3% of outstanding foreign exchange contracts served to
hedge net investments in foreign subsidiaries, 35% hedged intercompany loans,
35% hedged third-party debt and other firm commitments, and 27% represented
contracts used to redenominate foreign-currency debt into U.S. dollars.
The Company is exposed to credit loss in the event of nonperformance by
counterparties on interest rate agreements and foreign exchange contracts;
however, nonperformance by these counterparties is considered remote as it is
the Company's policy to contract with diversified counterparties that have a
long-term debt rating of A or higher.
12. Restructured Operations
In September 1995, a reserve of $460.5 was established to cover a worldwide
restructuring of manufacturing and administrative operations. The cost of
completing the restructuring activities approximated the original estimate.
The planned restructuring projects, primarily in North America and Europe but
also affecting Hill's Pet Nutrition and Colgate locations in Asia/Africa and
certain Latin America locations, were completed as of December 31, 2000. As
planned, the restructuring has produced savings that increase pretax earnings
by over $150.0 annually.
35
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
A summary of the changes in the restructuring reserve is as follows:
<TABLE>
<CAPTION>
Manufacturing Contractual
Workforce Plants Settlements Total
--------- ------------- ----------- -------
<S> <C> <C> <C> <C>
Original reserve................... $ 210.0 $ 204.1 $ 46.4 $ 460.5
Charges prior to 1998.............. (142.6) (173.8) (44.9) (361.3)
1998 charges....................... (37.1) (22.5) -- (59.6)
1999 charges....................... (24.9) (7.8) (1.5) (34.2)
------- ------- ------ -------
Balance at December 31, 1999....... $ 5.4 $ -- $ -- $ 5.4
2000 charges....................... (5.4) -- -- (5.4)
------- ------- ------ -------
Balance at December 31, 2000....... $ -- $ -- $ -- $ --
======= ======= ====== =======
</TABLE>
The headcount reductions resulting from the restructuring projects totaled
4,869. Factory closures and/or reconfigurations totaled 25. The headcount and
factory totals were increased by 727 and 1, respectively, as a result of
refinements of original estimates.
In December 2000 the Company recorded a charge of $63.9 ($42.5 aftertax)
associated with the realignment of three manufacturing locations in Latin
America and the exiting of our business in Nigeria. The charge, recorded in
Other expense, net, included $14.2 for termination costs and $49.7 for exiting
of manufacturing operations. At December 31, 2000, the remaining reserve of
$7.2 is classified as a current liability representing termination costs for
979 employees to be paid during 2001.
13. Earnings Per Share
<TABLE>
<CAPTION>
For the Year Ended 2000 For the Year Ended 1999 For the Year Ended 1998
-------------------------- ------------------------ ------------------------
Income Shares Per Share Income Shares Per Share Income Shares Per Share
-------- ------ --------- ------ ------ --------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net income.............. $1,063.8 $937.3 $848.6
Preferred dividends..... (20.7) (21.0) (20.9)
-------- ------ ------
Basic EPS............... 1,043.1 574.9 $1.81 916.3 583.1 $1.57 827.7 590.0 $1.40
===== ===== =====
Stock options........... 9.8 11.7 13.6
ESOP conversion......... 20.3 42.6 19.7 44.0 18.4 44.8
-------- ----- ------ ----- ------ -----
Diluted EPS............. $1,063.4 627.3 $1.70 $936.0 638.8 $1.47 $846.1 648.4 $1.30
======== ===== ===== ====== ===== ===== ====== ===== =====
</TABLE>
14. Commitments and Contingencies
Minimum rental commitments under noncancellable operating leases, primarily
for office and warehouse facilities, are $70.3 in 2001, $63.9 in 2002, $55.1
in 2003, $47.2 in 2004, $44.6 in 2005 and $57.1 thereafter. Rental expense
amounted to $90.6 in 2000, $102.4 in 1999 and $102.7 in 1998. Contingent
rentals, sublease income and capital leases, which are included in fixed
assets, are not significant.
The Company has various contractual commitments to purchase raw materials,
products and services totaling $137.9 that expire through 2003.
The Company is a party to various superfund and other environmental matters
and is contingently liable with respect to lawsuits, taxes and other matters
arising out of the normal course of business. Management proactively reviews
and manages its exposure to, and the impact of, environmental matters and
other contingencies.
36
<PAGE>
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements--(continued)
(Dollars in Millions Except Per Share Amounts)
In 1995, the Company acquired the Kolynos oral care business from American
Home Products, as described in the Company's Form 8-K dated January 10, 1995.
On September 8, 1998, the Company's Brazilian subsidiary received notice of an
administrative proceeding from the Central Bank of Brazil primarily taking
issue with certain filings made with the Central Bank in connection with the
financing of this strategic transaction, but in no way challenging or seeking
to unwind the acquisition. The Central Bank of Brazil in January 2001 notified
the Company of its decision and imposed a fine which has subsequently been
appealed. During the appeal, the imposition of the fine is suspended. Further
appeals are available within the Brazilian federal courts. Management
believes, based on the opinion of its Brazilian legal counsel and other
experts, that the filings challenged by the Central Bank fully complied with
Brazilian law. The Company intends to challenge this fine vigorously and
believes that ultimately it will prevail on appeal.
While it is possible that the Company's cash flows and results of operations
in particular quarterly or annual periods could be affected by the one-time
impacts of the resolution of the above contingencies, it is the opinion of
management that the ultimate disposition of these matters, to the extent not
previously provided for, will not have a material impact on the Company's
financial condition or ongoing cash flows and results of operations.
15. Quarterly Financial Data (Unaudited)
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
-------- -------- -------- --------
<S> <C> <C> <C> <C>
2000
Net sales.................................. $2,241.8 $2,336.7 $2,366.5 $2,412.9
Gross profit............................... 1,221.2 1,270.9 1,293.5 1,306.8
Net income................................. 239.9 261.9 275.3 286.7
Earnings per common share:
Basic.................................... .41 .45 .47 .49
Diluted.................................. .38 .42 .44 .46
1999
Net sales.................................. $2,175.3 $2,285.0 $2,314.0 $2,343.9
Gross profit............................... 1,165.9 1,221.3 1,253.6 1,253.4
Net income................................. 208.9 228.1 239.7 260.6
Earnings per common share:
Basic.................................... .35 .38 .40 .44
Diluted.................................. .32 .36 .38 .41
</TABLE>
37
<PAGE>
COLGATE-PALMOLIVE COMPANY
Market and Dividend Information
The Company's common stock and $4.25 Preferred Stock are listed on the New
York Stock Exchange. The trading symbol for the common stock is CL. Dividends
on the common stock have been paid every year since 1895 and the amount of
dividends paid per share has increased for 38 consecutive years.
<TABLE>
<CAPTION>
Market Price Common Stock $4.25 Preferred Stock
--------------------------- ---------------------------
Quarter Ended 2000 1999 2000 1999
- ------------- ------------- ------------- ------------- -------------
High Low High Low High Low High Low
------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
March 31............... $64.81 $42.75 $47.06 $37.53 $89.00 $86.00 $89.50 $86.75
June 30................ 62.63 52.63 52.41 45.78 88.00 86.00 87.50 85.50
September 30........... 59.88 43.06 58.38 45.75 88.00 85.75 88.00 86.00
December 31............ 64.56 46.50 65.00 47.81 88.50 86.50 91.00 87.00
Closing Price.......... $64.55 $65.00 $87.75 $87.00
Dividends Paid Per Share
<CAPTION>
Quarter Ended 2000 1999 2000 1999
- ------------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
March 31............... $.1575 $.1375 $1.0625 $1.0625
June 30................ .1575 .1375 1.0625 1.0625
September 30........... .1575 .1575 1.0625 1.0625
December 31............ .1575 .1575 1.0625 1.0625
------ ------ ------- -------
Total................ $ .63 $ .59 $ 4.25 $ 4.25
====== ====== ======= =======
</TABLE>
38
<PAGE>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
For the Year Ended December 31, 2000
(Dollars in Millions Except Per Share Amounts)
<TABLE>
<CAPTION>
Column B Column C Column D Column E
---------- ---------------- ---------- ---------
Column A Additions
-------- ----------------
Balance at Charged to Balance
Beginning Costs and at End
Description of Period Expenses Other Deductions of Period
----------- ---------- ---------- ----- ---------- ---------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts................... $ 37.2 $10.3 $ -- $ 7.7(/1/) $ 39.8
====== ===== ===== ===== ======
Accumulated amortization of
goodwill and other
intangibles................ $578.9 $72.1 $ -- $ -- $651.0
====== ===== ===== ===== ======
Valuation allowance for
deferred tax assets........ $137.0 $ -- $ -- $62.3(/2/) $ 74.7
====== ===== ===== ===== ======
</TABLE>
- --------
NOTES:
(/1/) Uncollectible accounts written off and cash discounts allowed.
(/2/) Decrease in allowance due to utilization of tax credits and net operating
loss carryforwards.
39
<PAGE>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
For the Year Ended December 31, 1999
(Dollars in Millions Except Per Share Amounts)
<TABLE>
<CAPTION>
Column B Column C Column D Column E
---------- ---------------- ---------- ---------
Column A Additions
-------- ----------------
Balance at Charged to Balance
Beginning Costs and at End
Description of Period Expenses Other Deductions of Period
----------- ---------- ---------- ----- ---------- ---------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts............... $ 35.9 $10.2 $ -- $ 8.9(/1/) $ 37.2
====== ===== ===== ===== ======
Accumulated amortization
of goodwill and other
intangibles............ $556.7 $75.6 $ -- $53.4(/2/) $578.9
====== ===== ===== ===== ======
Valuation allowance for
deferred tax assets.... $122.8 $ -- $52.3(/3/) $38.1(/3/) $137.0
====== ===== ===== ===== ======
</TABLE>
- --------
NOTES:
(/1/) Uncollectible accounts written off and cash discounts allowed.
(/2/) Primarily due to the impact of exchange rate changes in Brazil.
(/3/) Increase/decrease in allowance for tax loss and tax credit carryforward
benefits that are likely not to be utilized in the future.
40
<PAGE>
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
For the Year Ended December 31, 1998
(Dollars in Millions Except Per Share Amounts)
<TABLE>
<CAPTION>
Column B Column C Column D Column E
---------- ---------------- ---------- ---------
Column A Additions
-------- ----------------
Balance at Charged to Balance
Beginning Costs and at End
Description of Period Expenses Other Deductions of Period
----------- ---------- ---------- ----- ---------- ---------
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts............... $ 35.8 $12.3 $ -- $12.2(/1/) $ 35.9
====== ===== ===== ===== ======
Accumulated amortization
of goodwill and other
intangibles............ $475.0 $81.7 $ -- $ -- $556.7
====== ===== ===== ===== ======
Valuation allowance for
deferred tax assets.... $124.3 $ -- $69.6(/2/) $71.1(/2/) $122.8
====== ===== ===== ===== ======
</TABLE>
- --------
NOTES:
(/1/) Uncollectible accounts written off and cash discounts allowed.
(/2/) Increase/decrease in allowance for tax loss and tax credit carryforward
benefits that are likely not to be utilized in the future.
41
<PAGE>
Report of Independent Public Accountants
To the Board of Directors and Shareholders of
Colgate-Palmolive Company:
We have audited the accompanying consolidated balance sheets of Colgate-
Palmolive Company (a Delaware corporation) and subsidiaries as of December 31,
2000 and 1999, and the related consolidated statements of income, retained
earnings, comprehensive income and changes in capital accounts, and cash flows
for each of the three years in the period ended December 31, 2000. These
financial statements and the schedules referred to below are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Colgate-Palmolive Company
and subsidiaries as of December 31, 2000 and 1999 and the results of their
operations and their cash flows for each of the three years in the period
ended December 31, 2000, in conformity with accounting principles generally
accepted in the United States.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedules listed in the index to
financial statements are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. These schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
/s/ Arthur Andersen LLP
New York, New York
January 30, 2001
42
<PAGE>
COLGATE-PALMOLIVE COMPANY
Historical Financial Summary(/1/)
Dollars in Millions Except Per Share Amounts
<TABLE>
<CAPTION>
2000 1999 1998 1997 1996 1995 1994 1993 1992 1991
-------- -------- -------- -------- -------- -------- -------- ------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Continuing
Operations
Net sales......... $9,357.9 $9,118.2 $8,971.6 $9,056.7 $8,749.0 $8,358.2 $7,587.9 $7,141.3 $7,007.2 $6,060.3
Results of
operations:
Net income........ 1,063.8 937.3 848.6 740.4 635.0 172.0(/2/) 580.2(/3/) 189.9(/4/) 477.0 124.9(/5/)
Per share, basic.. 1.81 1.57 1.40 1.22 1.05 .26(/2/) .96(/3/) .27(/4/) .73 .19(/5/)
Per share, diluted 1.70 1.47 1.30 1.13 .98 .25(/2/) .89(/3/) .26(/4/) .68 .19(/5/)
Depreciation and
amortization
expense........... 337.8 340.2 330.3 319.9 316.3 300.3 235.1 209.6 192.5 146.2
Financial Position
Current ratio...... 1.0 1.0 1.1 1.1 1.2 1.3 1.4 1.5 1.5 1.5
Property, plant and
equipment, net.... 2,528.3 2,551.1 2,589.2 2,441.0 2,428.9 2,155.2 1,988.1 1,766.3 1,596.8 1,394.9
Capital
expenditures...... 366.6 372.8 389.6 478.5 459.0 431.8 400.8 364.3 318.5 260.7
Total assets....... 7,252.3 7,423.1 7,685.2 7,538.7 7,901.5 7,642.3 6,142.4 5,761.2 5,434.1 4,510.6
Long-term debt..... 2,536.9 2,243.3 2,300.6 2,340.3 2,786.8 2,992.0 1,751.5 1,532.4 946.5 850.8
Shareholders'
equity............ 1,468.1 1,833.7 2,085.6 2,178.6 2,034.1 1,679.8 1,822.9 1,875.0 2,619.8 1,866.3
Share and Other
Book value per
common share...... 2.57 3.14 3.53 3.65 3.42 2.84 3.12 3.10 4.05 3.13
Cash dividends
declared and
paid per common
share............. .63 .59 .55 .53 .47 .44 .39 .34 .29 .26
Closing price...... 64.55 65.00 46.44 36.75 23.06 17.56 15.84 15.59 13.94 12.22
Number of common
shares
outstanding (in
millions)......... 566.7 578.9 585.4 590.8 588.6 583.4 577.6 597.0 641.0 589.4
Number of
shareholders of
record:
$4.25 Preferred... 247 275 296 320 350 380 400 450 470 460
Common............ 42,300 44,600 45,800 46,800 45,500 46,600 44,100 40,300 36,800 34,100
Average number of
employees......... 38,300 37,200 38,300 37,800 37,900 38,400 32,800 28,000 28,800 24,900
</TABLE>
- -------
(/1/) All share and per share amounts have been restated to reflect the 1999,
1997 and the 1991 two-for-one stock splits.
(/2/) Income in 1995 includes a net provision for restructured operations of
$369.2. (Excluding this charge, earnings per share would have been $.89,
basic and $.84, diluted.)
(/3/) Income in 1994 includes a one-time charge of $5.2 for the sale of a non-
core business, Princess House.
(/4/) Income in 1993 includes a one-time impact of adopting new mandated
accounting standards, effective in the first quarter of 1993, of $358.2.
(Excluding this charge, earnings per share would have been $.84, basic
and $.79, diluted.)
(/5/) Income in 1991 includes a net provision for restructured operations of
$243.0. (Excluding this charge, earnings per share would have been $.64,
basic and $.60, diluted.)
43
<PAGE>
COLGATE-PALMOLIVE COMPANY
EXHIBITS TO FORM 10-K
YEAR ENDED DECEMBER 31, 2000
Commission File No. 1-644
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
3-A Restated Certificate of Incorporation, as amended. (Registrant
hereby incorporates by reference Exhibit 1 to its Form 8-K dated
October 17, 1991, File No. 1-644-2.)
3-B By-laws.
4-A Rights Agreement dated as of October 23, 1998 between registrant
and First Chicago Trust Company of New York. (Registrant hereby
incorporates by reference Exhibit 1 to its Form 8-A dated
October 23, 1998, File No. 1-644-2.)
4-B(a) Other instruments defining the rights of security holders,
including indentures.*
(b) Colgate-Palmolive Company Employee Stock Ownership Trust Note
Agreement dated as of June 1, 1989, as amended. (Registrant hereby
incorporates by reference Exhibit 4-B (b) to its Quarterly Report
on Form 10-Q for the quarter ended June 30, 2000, File No. 1-644-
2.)
(c) Form of Colgate-Palmolive Company's Medium Term Notes, Series D,
designated Euro Bull Indexed Notes Due November 21, 2001.
10-A(a) Colgate-Palmolive Company Executive Incentive Compensation Plan,
amended and restated as of March 11, 1999. (Registrant hereby
incorporates by reference Appendix A to its 1999 Notice of Meeting
and Proxy Statement.)
(b) Colgate-Palmolive Company Executive Incentive Compensation Plan
Trust, as amended. (Registrant hereby incorporates by reference
Exhibit 10-B (b) to its Annual Report on Form 10-K for the year
ended December 31, 1987, File No. 1-644-2.)
10-B(a) Colgate-Palmolive Company Supplemental Salaried Employees
Retirement Plan. (Registrant hereby incorporates by reference
Exhibit 10-E (Plan only) to its Annual Report on Form 10-K for the
year ended December 31, 1984, File No. 1-644-2.)
(b) Colgate-Palmolive Company Supplemental Salaried Employees
Retirement Plan Trust. (Registrant hereby incorporates by
reference Exhibit 10-C (b) to its Annual Report on Form 10-K for
the year ended December 31, 1987, File No. 1-644-2.)
10-C(a) Colgate-Palmolive Company Executive Severance Plan, as amended and
restated. (Registrant hereby incorporates by reference Exhibit 10-
E (a) to its Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998, File No. 1-644.)
(b) Colgate-Palmolive Company Executive Severance Plan Trust.
(Registrant hereby incorporates by reference Exhibit 10-E (b) to
its Annual Report on Form 10-K for the year ended December 31,
1987, File No. 1-644-2.)
10-D Colgate-Palmolive Company Pension Plan for Outside Directors, as
amended and restated. (Registrant hereby incorporates by reference
Exhibit 10-D to its Annual Report on Form 10-K for the year ended
December 31, 1999, File No. 1-644-2.)
10-E Colgate-Palmolive Company Stock Plan for Non-Employee Directors.
(Registrant hereby incorporates by reference Exhibit 10-G to its
Annual Report on Form 10-K for the year ended December 31, 1997,
File No. 1-644.)
10-F Colgate-Palmolive Company Restated and Amended Deferred
Compensation Plan for Non-Employee Directors, as amended.
(Registrant hereby incorporates by reference Exhibit 10-H to its
Annual Report on Form 10-K for the year ended December 31, 1997,
File No. 1-644.)
10-G Career Achievement Plan. (Registrant hereby incorporates by
reference Exhibit 10-I to its Annual Report on Form 10-K for the
year ended December 31, 1986, File No. 1-644-2.)
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10-H Colgate-Palmolive Company 1987 Stock Option Plan, as amended.
(Registrant hereby incorporates by reference Exhibit 10-J to its
Annual Report on Form 10-K for the year ended December 31, 1997,
File No. 1-644.)
10-I(a) Stock Incentive Agreement between Colgate-Palmolive Company and
Reuben Mark, Chairman and Chief Executive Officer, dated January
13, 1993, pursuant to the Colgate-Palmolive Company 1987 Stock
Option Plan, as amended. (Registrant hereby incorporates by
reference Exhibit 10-N to its Annual Report on Form 10-K for the
year ended December 31, 1993, File No. 1-644-2.)
(b) Stock Incentive Agreement between Colgate-Palmolive Company and
Reuben Mark, Chairman and Chief Executive Officer, dated November
7, 1997, pursuant to the Colgate-Palmolive Company 1997 Stock
Option Plan. (Registrant hereby incorporates by reference Exhibit
10-K(b) to its Annual Report on Form 10-K for the year ended
December 31, 1997, File No. 1-644.)
10-J Colgate-Palmolive Company Non-Employee Director Stock Option Plan,
as amended. (Registrant hereby incorporates by reference Exhibit
10-L to its Annual Report on Form 10-K for the year ended December
31, 1997, File No. 1-644.)
10-K(a) U.S. $800,000,000 Five Year Credit Agreement dated as of May 30,
1997. (Registrant hereby incorporates by reference Exhibit 10-N to
its Quarterly Report on Form 10-Q for the quarter ended June 30,
1997, File No. 1-644.)
(b) Amendment dated as of April 1, 1998 to the Five Year Credit
Agreement dated as of May 30, 1997. (Registrant hereby
incorporates reference Exhibit 10-M(b) to its Quarterly Report on
Form 10-Q for the quarter ended March 31, 1998, File No. 1-644.)
10-L Colgate-Palmolive Company 1996 Stock Option Plan, as amended.
(Registrant hereby incorporates by reference Exhibit 10-N to its
Annual Report on Form 10-K for the year ended December 31, 1997,
File No. 1-644.)
10-M Colgate-Palmolive Company 1997 Stock Option Plan. (Registrant
hereby incorporates by reference appendix A to its 1997 Notice of
Meeting and Proxy Statement.)
12 Statement re Computation of Ratio of Earnings to Fixed Charges.
21 Subsidiaries of the Registrant.
23 Consent of Independent Public Accountants.
24 Powers of Attorney.
</TABLE>
- --------
* Registrant hereby undertakes upon request to furnish the Commission with a
copy of any instrument with respect to long-term debt where the total amount
of securities authorized thereunder does not exceed 10% of the total assets
of the registrant and its subsidiaries on a consolidated basis.
The exhibits indicated above that are not included with the Form 10-K 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-K
Exhibits)
300 Park Avenue
New York, New York 10022-7499
45
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.B
<SEQUENCE>2
<FILENAME>dex3b.txt
<DESCRIPTION>COLGATE PALMOLIVE BY-LAWS
<TEXT>
<PAGE>
Exhibit 3(B)
February 8, 2001
COLGATE-PALMOLIVE COMPANY
BY-LAWS
OFFICES.
1. The registered office shall be in the City of Wilmington, County of
New Castle, State of Delaware, and the name of the registered agent in charge
thereof is THE CORPORATION TRUST COMPANY.
The corporation may also have offices at such other places within or
without the State of Delaware as the board of directors may from time to time
determine or the business of the corporation may require.
SEAL.
2. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "CORPORATE SEAL,
DELAWARE".
STOCKHOLDERS' MEETINGS.
3. Meetings of stockholders may be held at such place within or without
the State of Delaware as shall be determined from time to time by the board of
directors.
4. The annual meeting of the stockholders shall be held on the fourth
Wednesday of April in each year, if not a legal holiday, and if a legal holiday,
then on the next secular day following, at ten o'clock in the forenoon (or on
such other date or at such other time as the board of directors may determine)
when they shall elect by plurality vote by ballot a board of directors and
transact such other business as may properly be brought before the meeting.
5. Written notice of the annual meeting shall be mailed to each
stockholder entitled to vote thereat at such address as appears on the books of
the corporation, at least ten (but not more than fifty) days prior to the
meeting.
6. Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute or by the certificate of incorporation,
may be called by the chief executive officer of the corporation, and shall be
called by the president or secretary upon resolution of a majority of the entire
board of directors, or at the request in writing of a majority of the entire
board of directors. Such request shall state the purpose or purposes of the
proposed meeting. Special meetings of holders of preferred stock held pursuant
to the provisions of Section 10 of Article Fourth of the certificate of
incorporation may be called in accordance with the provisions of paragraph (c)
of said Section 10.
7. Written notice of a special meeting of stockholders, including a
special meeting for the purpose of amending the certificate of incorporation,
stating the time and place and purposes thereof shall be mailed, postage
prepaid, at least ten but not more than fifty days
<PAGE>
before such meeting, to each stockholder entitled to vote thereat at such
address as appears on the books of the corporation.
8. (A) At an annual meeting of the stockholders, only such business
shall be conducted as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be (l) specified in the
notice of meeting (or any supplement thereto) given by or at the direction of
the board of directors, (2) otherwise properly brought before the meeting by or
at the direction of the board of directors, or (3) otherwise properly brought
before the meeting by a stockholder. For business to be properly brought before
an annual meeting by a stockholder, the stockholder must have given timely
notice thereof in writing to the secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at the
principal executive offices of the corporation, not less than 60 days nor more
than 90 days prior to the meeting; provided, however, that in the event that
less than 70 days' notice or prior public disclosure of the date of the meeting
is given or made to stockholders, notice by the stockholder to be timely must be
so received not later than the close of business on the 10th day following the
day on which such notice of the date of the annual meeting was mailed or such
public disclosure was made. A stockholder's notice to the secretary shall set
forth as to each matter the stockholder proposes to bring before the annual
meeting (1) a brief description of the business desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (2) the name and address, as they appear on the corporation's books, of
the stockholder proposing such business, (3) the class and number of shares of
the corporation which are beneficially owned by the stockholder, and (4) any
material interest of the stockholder in such business. Notwithstanding anything
in the by-laws to the contrary, no business shall be conducted at an annual
meeting except in accordance with the procedures set forth in this by-law 8(A).
In the event that a stockholder seeks to bring one or more matters before an
annual meeting, the board of directors shall establish a committee consisting of
non-management directors for the purpose of reviewing compliance with this by-
law 8(A); provided, however, that if the business to be brought before the
meeting by a stockholder relates to the removal, replacement or election of one
or more directors, the secretary of the corporation shall appoint two or more
inspectors, who shall not be affiliated with the corporation, to act in lieu of
such committee to review compliance with this by-law 8(A). If the committee or
the inspectors (as the case may be) shall determine that a stockholder has not
complied with this by-law 8(A), the committee or the inspectors (as the case may
be) shall direct the chairman of the annual meeting to declare to the meeting
that business was not properly brought before the meeting in accordance with the
provisions of this by-law 8(A); and the chairman shall so declare to the meeting
and any such business not properly brought before the meeting shall not be
transacted.
(B) Only persons who are nominated in accordance with the procedures set
forth in this by-law 8(B) shall be eligible for election as directors.
Nominations of persons for election to the board of directors of the corporation
may be made at a meeting of stockholders by or at the direction of the board of
directors or by any stockholder of the corporation entitled to vote for the
election of directors at the meeting who complies with the notice procedures set
forth in this by-law 8(B). Such nominations, other than those made by or at the
direction of the board of directors, shall be made pursuant to timely notice in
writing to the secretary of the corporation. To be timely, a stockholder's
notice shall be delivered to or mailed and received at the principal executive
offices of the corporation not less than 60 days nor more than 90 days prior to
the meeting; provided, however, that in the event that less than 70 days' notice
or prior public disclosure of the date of the meeting is given or made to
stockholders, notice by
2
<PAGE>
the stockholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date of
the meeting was mailed or such public disclosure was made. Such stockholder's
notice shall set forth (l) as to each person whom the stockholder proposes to
nominate for election or re-election as a director, (a) the name, age, business
address and residence address of such person, (b) the principal occupation or
employment of such person, (c) the class and number of shares of the corporation
which are beneficially owned by such person and (d) any other information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(including without limitation such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected); and
(2) as to the stockholder giving the notice, (a) the name and address, as they
appear on the corporation's books, of such stockholder and (b) the class and
number of shares of the corporation which are beneficially owned by such
stockholder. At the request of the board of directors, any person nominated by
the board of directors for election as a director shall furnish to the secretary
of the corporation that information required to be set forth in a stockholder's
notice of nomination which pertains to the nominee. No person shall be eligible
for election as a director of the corporation unless nominated in accordance
with the procedures set forth in this by-law 8(B). In the event that a
stockholder seeks to nominate one or more directors, the secretary shall appoint
two inspectors, who shall not be affiliated with the corporation, to determine
whether a stockholder has complied with this by-law 8(B). If the inspectors
shall determine that a stockholder has not complied with this by-law 8(B), the
inspectors shall direct the chairman of the meeting to declare to the meeting
that a nomination was not made in accordance with the procedures prescribed by
the by-laws; and the chairman shall so declare to the meeting and the defective
nomination shall be disregarded.
(C) (l) Whenever any action is required or permitted to be taken at any
meeting of stockholders of the corporation, unless the certificate of
incorporation otherwise provides, and subject to the provisions of clauses (2)
and (3) of this by-law 8(C), the action may be taken without a meeting, without
prior notice and without a vote, if a written consent setting forth the action
so taken shall have been signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize such
action at a meeting at which all shares entitled to vote thereon were present
and voted; provided, however, that prompt notice of the taking of corporate
action without a meeting and by less than unanimous written consent must be
given to those stockholders who have not consented in writing.
(2) The record date for determining stockholders entitled to express
consent to corporate action in writing without a meeting shall be fixed by the
board of directors of the corporation. Any stockholder of record seeking to have
the stockholders authorize or take corporate action by written consent without a
meeting shall, by written notice, request the board of directors to fix a record
date. Upon receipt of such a request, the secretary shall place such request
before the board of directors at its next regularly scheduled meeting, provided,
however, that if the stockholder represents in such request that he intends, and
is prepared, to commence a consent solicitation as soon as is permitted by the
Securities Exchange Act of 1934 and the regulations thereunder and other
applicable law, the secretary shall, as promptly as practicable, call a special
meeting of the board of directors, which meeting shall be held as promptly as
practicable. At such regular or special meeting, the board of directors shall
fix a record date as provided in Section 213(a) (or its successor provision) of
3
<PAGE>
the Delaware General Corporation Law. Should the board fail to fix a record date
as provided for in this clause (2), then the record date shall be the day on
which the first written consent is expressed.
(3) In the event of the delivery to the corporation of a written
consent or consents purporting to represent the requisite voting power to
authorize or take corporate action and/or related revocations, the secretary of
the corporation shall provide for the safekeeping of such consents and
revocations and shall, as promptly as practicable, engage nationally recognized
independent inspectors of elections for the purpose of promptly performing a
ministerial review of the validity of the consents and revocations. No action by
written consent and without a meeting shall be effective until such inspectors
have completed their review, determined that the requisite number of valid and
unrevoked consents has been obtained to authorize or take the action specified
in the consents, and certified such determination for entry in the records of
the corporation kept for the purpose of recording the proceedings of meetings of
stockholders.
9. At any meeting of the stockholders, every stockholder entitled to
vote may vote in person or by proxy authorized by an instrument in writing or by
a transmission permitted by law. Any copy, facsimile telecommunication or other
reliable reproduction of the writing or transmission created pursuant to this
paragraph may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used, provided that such copy, facsimile telecommunication
or other reproduction shall be a complete reproduction of the entire original
writing or transmission. Each stockholder shall have one vote for each share of
stock having voting power, registered in his name on the books of the
corporation on the record date fixed for such meeting, or, if no record date has
been fixed, on such date as may be provided for by law. The vote for directors
and, upon the demand of any stockholder, the vote upon any question before the
meeting, shall be by ballot.
10. The holders of a majority of the stock issued and outstanding, and
entitled to vote thereat, present in person or represented by proxy, shall be
requisite and shall constitute a quorum at all meetings of the stockholders for
the transaction of business except as otherwise provided by law, by the
certificate of incorporation, or by these by-laws. If, however, such majority
shall not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or by proxy, shall have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until the requisite amount of voting stock shall be
present. At such adjourned meeting at which the requisite amount of voting stock
shall be represented, any business may be transacted which might have been
transacted at the meeting as originally noticed.
11. At each meeting of stockholders the presence or lack of a quorum
shall be ascertained and all voting by ballot shall be conducted by two
inspectors appointed for the purpose by the board of directors or, if not so
appointed, designated by the meeting. If for any reason any of the inspectors
previously appointed shall fail to attend or be unable to serve, a replacement
shall be appointed in like manner. The inspectors shall decide upon the
qualifications of the voters and the validity of proxies, report on the presence
or lack of a quorum, take charge of the ballots at said meeting, and after the
balloting thereat on any question shall count the ballots cast thereon and shall
report the result in writing to the secretary of the corporation or to the
chairman of the meeting.
4
<PAGE>
12. A complete list of the stockholders entitled to vote at any
meeting, arranged in alphabetical order, giving the address of each, and the
number of voting shares held by each, shall be prepared by the treasurer. Such
list shall be open to the examination of any stockholder for any purpose germane
to the meeting during ordinary business hours for a period of at least ten days
prior to the meeting, either at a place within the city where the meeting is to
be held and which place shall be specified in the notice of meeting or, if not
so specified, at the place where said meeting is to be held, and the list shall
be produced and kept at the time and place of meeting during the whole time
thereof, and subject to the inspection of any stockholder who may be present.
DIRECTORS.
13. (A) The property and business of this corporation shall be managed
by its board of directors. The number of directors shall be no less than seven
nor more than twelve, as determined from time to time by the board of directors,
but no reduction in the number of directors shall terminate the office of any
director prior to the first annual meeting of the stockholders subsequent to his
election at which directors are elected except with the written consent of such
director, and provided further that the number of directors may be increased by
action of the holders of preferred stock as contemplated in by-law 13(B), and
that no reduction in the number of directors shall be in violation of the
provisions of by-law 13(B). Except to the extent otherwise provided in the
certificate of incorporation or the by-laws, they shall be elected at the annual
meeting of the stockholders, and each director shall be elected to serve until
his successor shall be elected and shall qualify. No person who has attained the
age of sixty-five shall be initially elected to the board of directors. No
director shall be re-elected as a member of the Board after he or she has
reached his or her 72nd birthday, except if his or her nomination for re-
election has been approved in each instance by a majority of the other directors
of the corporation. Additionally, no former Chief Executive Officer of the
corporation shall be re-elected as a member of the Board after he or she has
reached his or her 65th birthday, except if his or her nomination for re-
election has been approved in each instance by a majority of the other directors
of the corporation, and in no event shall he or she be re-elected after he or
she has reached his or her 68th birthday.
(B) So long as any preferred stock shall be outstanding and there shall
exist a "default period" as defined in paragraph (a) of Section 10 of Article
Fourth of the certificate of incorporation, the holders of the preferred stock,
voting as a class, irrespective of series, shall have the voting right set forth
in said Section 10. At any meeting at which the holders of preferred stock shall
exercise such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect directors to fill such
vacancies in the board of directors, if any, as may then exist up to such number
of directors as amounts to the "required proportion" as defined in paragraph (a)
of said Section 10, and if the number which may be so elected does not amount to
the required proportion, to make such increase in the number of directors as
shall be necessary to permit the election by them of the required proportion but
no greater increase than shall be necessary for that purpose, and to elect
directors to the offices so created. An increase in the number of directors by
the holders of preferred stock shall not prevent a subsequent increase or
decrease in the number of directors made in any manner provided herein by the
board of directors or the holders of preferred and common stock voting
irrespective of classes, provided that during a default period no such amendment
shall (l) reduce the number of directors elected by the holders of preferred
stock to less than the
5
<PAGE>
required proportion or (2) terminate the office of a director prior to the first
annual meeting of stockholders subsequent to his election at which directors are
elected, except with the written consent of such director.
14. The directors may hold their meetings and have one or more offices,
and keep the books of the corporation outside of Delaware, at the office of the
corporation in the City of New York, or at such other places as they may from
time to time determine.
15. In addition to the powers and authority by these by-laws expressly
conferred upon it, the board may exercise all such powers of the corporation and
do all such lawful acts and things as are not by statute or by the certificate
of incorporation or by these by-laws directed or required to be exercised or
done by the stockholders.
COMMITTEES.
16. The board of directors shall appoint such committees as are
required by these by-laws, and may appoint such committees as are permitted by
these by-laws, from among their members.
17. Appointment of committees shall be by the affirmative vote of a
majority of the whole board.
18. The board may, but need not, designate one member of each committee
as the chairman thereof.
19. The board of directors shall appoint a personnel and organization
committee consisting of at least five members, with not less than three members
who are not eligible for stock options or incentive awards either at the time
when discretion is to be exercised by such committee or at any time within one
year prior thereto. Such committee shall consider and monitor the corporation's
organization, personnel and compensation policies, practices and implementation.
In addition, such committee shall review the compensation of the officers of the
company and senior management. Such committee shall also administer such plans
under which stock of the corporation is issuable to employees upon exercise of
stock options, and all executive incentive compensation plans. The board of
directors may provide for an executive incentive compensation committee and a
stock option committee. Each such committee shall consist of members of the
personnel and organization committee who are not eligible for incentive awards
or stock options either at the time when discretion is to be exercised by the
members of the said committee or at any time within one year prior thereto, and
the chairman of the personnel and organization committee, provided he is not and
has not been so eligible. From and after December 14, 1978, all such plans are
amended to reflect their administration by such committees. The executive
incentive compensation committee and the stock option committee shall have the
powers and duties provided in the respective plans and be subject to such
provisions and limitations as the board of directors shall from time to time
determine.
20. The board of directors shall appoint an audit committee consisting
of not less than three members. Such committee shall review internal and
external audit conditions, procedures and results and formulate and report to
the board of directors policies with regard thereto.
6
<PAGE>
21. The board of directors shall appoint a finance committee consisting
of not less than four members. Such committee, if and when appointed, shall
consider and take account of the financial affairs of the corporation, and
formulate and suggest the financial policies of the corporation for submission
to the board of directors.
22. The board of directors may in its discretion appoint from time to
time other committees for other purposes or assign additional duties to the
existing committees.
23. Each committee shall have the right to determine its own rules of
procedure, not inconsistent with the action of the board of directors, or with
these by-laws, or with the certificate of incorporation.
24. Vacancies in the committees shall be filled by the board of
directors.
25. The time and place of regular meetings of the committees shall be
fixed by the board of directors, or if not so fixed, then by the committee, and
prompt notice thereof shall be given to each member of the committee, provided
however, that the board may authorize the committee or the chairman thereof to
postpone any such committee meeting upon two days notice to each member of the
committee. Special meetings of the committee may be called by the chairman of
the committee or the chief executive officer upon two days notice to each member
of the committee. Each such committee may meet at such stated times and places
and otherwise upon notice and at such places as it shall provide, except that
the finance committee shall meet at least once in each calendar quarter.
26. A majority of the members of each such committee shall constitute a
quorum; and in each instance the affirmative vote of a majority of the members
of the committee present at the meeting shall be necessary for the adoption of
any resolution, except that, upon request of the chief executive officer or the
chairman of the committee, any action required or permitted to be taken at any
meeting of such committee may be taken without a meeting, if prior to such
action a written consent thereto is signed by all members of such committee, and
such written consent is filed with the minutes of the committee. The committee
may designate one of its members as secretary of the committee, and may in
addition, call upon the secretary or one of the assistant secretaries of the
corporation, or any other person, as may be determined by the committee, to
perform all or part of the duties of secretary of the committee; and minutes
shall be kept of all meetings and proceedings of the committee, which shall be
reduced to writing by either the secretary of the committee or the secretary or
one of the assistant secretaries of the corporation, or such other person, as
the committee shall direct.
27. Each member of each such committee shall continue to be a member
thereof at the pleasure of the board of directors and, unless otherwise ordered
by the board of directors or otherwise specified in the plan providing for such
committee, until such time as he ceases to be a member of the board of
directors.
28. The minutes and proceedings of each such committee shall from time
to time be reported to the board of directors, as by the board of directors
required.
7
<PAGE>
COMPENSATION OF DIRECTORS.
29. The compensation of directors as such shall be fixed by the board
of directors but no additional compensation shall be paid to regular employees
of the corporation for service as directors or as members of any committee of
the board. Nothing herein contained shall be construed to preclude any director
from serving the corporation as an officer or in any other capacity and
receiving compensation therefor.
30. Pursuant to resolution of the board of directors, members of any
one or more committees may receive fixed fees or other compensation for their
services.
MEETINGS OF THE BOARD.
31. The newly elected board may meet at such place and time as shall be
fixed by the vote of the stockholders at the annual meeting, for the purpose of
organization or otherwise, and no notice of such meeting shall be necessary to
the newly elected directors, in order legally to constitute the meeting,
provided, a majority of the whole board shall be present; or they may meet at
such place and time as shall be fixed by the consent in writing of all the
directors.
32. Regular meetings of the board may be held without notice at such
time and place as shall from time to time be determined by resolution of the
board.
33. Special meetings of the board may be called by the chairman of the
board or the chief executive officer on three days' notice to each director,
either personally or by mail or by telegram; and special meetings shall be
called by the president or secretary in like manner and on like notice on the
written request of two directors.
34. At all meetings of the board the presence of a majority of the
directors then in office shall be necessary and sufficient to constitute a
quorum for the transaction of business, and the act of a majority of the
directors present at any meeting at which there is a quorum, shall be the act of
the directors, except as may be otherwise specifically provided by statute, or
by the certificate of incorporation, or by these by-laws. If a quorum shall not
be present at any meeting the directors present thereat may adjourn the meeting
from time to time, without notice, other than at the meeting, until a quorum
shall be present.
OFFICERS.
35. At its first meeting after each annual meeting of the stockholders
the board of directors shall choose a chairman of the board and a president, who
shall be directors of the corporation and one of whom shall be designated by the
board as chief executive officer of the corporation. At the same meeting the
board shall also choose a vice president or vice presidents, one or more of whom
may be designated as executive vice presidents, a secretary, a treasurer and a
controller. Any two offices other than those of president and secretary may be
held by the same person. The chairman of the board shall not be deemed to be a
corporate officer unless designated by the board as chief executive officer or
otherwise designated by the board as an officer of the corporation.
36. The board of directors may also create and provide for additional
offices and prescribe the duties of the respective incumbents thereof and
appoint such further officers and agents as it shall deem necessary or
advisable, such as assistant secretaries and assistant treasurers, who shall
hold their respective offices for such term and shall exercise such powers
8
<PAGE>
and perform such duties as shall be determined from time to time by the chief
executive officer or the board of directors. By direction of the chief executive
officer, other personnel may be designated by titles, such as "assistant vice
president," "divisional vice president," "assistant treasurer" or "assistant
controller" but only persons elected by the board of directors shall be deemed
officers of the corporation.
37. Except as provided in employee benefit or incentive plans approved
by the board of directors or the stockholders, the compensation of all officers
of the corporation shall be fixed by the board of directors or by any committee
of the board of directors as the board of directors designates.
38. The officers of the corporation shall hold office until their
respective successors are chosen and qualified in their stead, or until they
have resigned, retired or been removed in the manner hereinafter provided. Any
officer elected or appointed by the board of directors may be removed at any
time by the affirmative vote of a majority of the whole board of directors.
CHAIRMAN OF THE BOARD.
39. When so designated by the board of directors, the chairman of the
board shall be the chief executive officer of the corporation with the powers
and duties hereinafter specified for such office. He shall preside at all
meetings of the board of directors and shall perform such other duties as may be
specified in the by-laws.
THE PRESIDENT.
40. When so designated by the board of directors, the president shall
be the chief executive officer of the corporation with the powers and duties
hereinafter specified for such office. When not serving as chief executive
officer he shall have such powers and duties as may be specified in the by-laws,
prescribed by the board of directors or delegated by the chief executive
officer.
CHIEF EXECUTIVE OFFICER.
41. The chief executive officer may be either the chairman of the board
or the president. The person so designated by the board of directors shall have
the general and active management of the business, property and affairs of the
corporation, subject to the control of the board of directors, and shall have
the powers and perform the duties customarily exercised by the chief executive
officer of a business corporation, including the authority to sign on behalf of
the corporation deeds, leases, contracts, powers of attorney and other
documents, and the duty to execute all directions and resolutions of the board
of directors. He shall preside at all meetings of the stockholders, and shall
perform such other duties as may be specified in the by-laws.
ALTERNATE PRESIDING OFFICER.
42. In the absence from any meeting of the stockholders or directors of
the person designated in the by-laws to preside if present at such meeting, the
chief executive officer, the chairman of the board or the president (in that
order of precedence) shall preside at such meeting.
9
<PAGE>
THE VICE PRESIDENT.
43. Whenever there is not more than one vice president, the vice
president shall perform all such duties and exercise all such powers as may be
delegated to him by the chief executive officer, and such vice president shall
in the event of the absence or disability of the chief executive officer perform
such duties and exercise such powers of such officers as may be designated by
the board of directors.
44. If provision shall be made by the board of directors for more than
one vice president, each such vice president, including any designated as
executive vice president, shall perform such duties and exercise such powers as
may be delegated to him by the chief executive officer, and shall perform such
further duties and exercise such further powers as the board of directors shall
prescribe; and in the absence or disability of the president his duties shall be
performed and his powers shall be exercised by one or more vice presidents to
the extent designated by the chief executive officer or by the board of
directors.
THE SECRETARY.
45. (a) The secretary shall attend all sessions of the board of
directors and all meetings of the stockholders and record all votes and minutes
of all proceedings in a book to be kept for that purpose; and shall perform like
duties for other committees as required. He shall give, or cause to be given,
notice of all meetings of the stockholders and of the board of directors, and
shall perform such other duties as shall be prescribed by the board of directors
or chief executive officer.
(b) Such assistant secretary or assistant secretaries as may be
appointed by the board of directors, shall, to the extent authorized by the
board of directors, participate with the secretary and assist him in the
performance of his duties, and exercise all the powers and discharge all the
duties of the secretary to the extent prescribed by the board of directors; and
in the event of the absence or disability of the secretary or any assistant
secretary the duties of the secretary or of such assistant secretary shall be
performed by the assistant secretary designated by the chief executive officer
or the board of directors.
THE TREASURER.
46. (a) The treasurer shall perform such duties in relation to the
finances of the corporation as shall be prescribed by the board of directors,
and in relation to such duties shall be subject to the supervision and direction
of the board of directors and the chief executive officer, as circumstances may
require.
(b) Such assistant treasurer or assistant treasurers as may be
appointed by the board of directors shall, to the extent authorized by the board
of directors, participate with the treasurer and assist him in the performance
of his duties, and exercise all the powers and discharge all the duties of the
treasurer to the extent prescribed by the board of directors; and in the event
of the absence or disability of the treasurer or of any assistant treasurer, the
duties of the treasurer or of such assistant treasurer shall be performed by the
assistant treasurer designated by the chief executive officer or the board of
directors.
10
<PAGE>
THE CONTROLLER.
47. It shall be the duty of the controller, subject and pursuant to the
authority of the board of directors and of the chief executive officer, to
provide for the keeping of full and accurate records and accounts of receipts,
disbursements and all other transactions of the corporation, to make proper
report thereof as required and to perform such other duties as may be designated
by the board of directors or the chief executive officer.
VACANCIES.
48. If the office of any director or officer becomes vacant by reason
of death, resignation, retirement, disqualification, removal from office or
otherwise, or if the authorized number of directors be increased, the resulting
vacancy or vacancies may be filled by a majority of the directors then in
office, although less than a quorum, provided notice of intention to fill a
vacancy in the board shall have been included in the notice of the meeting. The
persons so chosen shall hold office until the next annual election and until
their successors are duly elected and qualified, unless sooner displaced. The
provisions of this by-law with respect to the filling of vacancies in the office
of any director are subject to the provisions of Section 10 of Article Fourth of
the certificate of incorporation.
DUTIES OF OFFICERS MAY BE DELEGATED.
49. In case of the absence of any officer of the corporation, or for
any other reason that the board of directors may deem sufficient, the board may
delegate, for the time being, the powers or duties, or any of them, of such
officer to any other officer, or to any directors.
CERTIFICATES OF STOCK.
50. The certificates of stock of the corporation shall be numbered and
entered in the books of the corporation as they are issued. They shall exhibit
the holder's name and number of shares and shall be signed by the chairman of
the board or the president or a vice president and by the treasurer or an
assistant treasurer or the secretary or an assistant secretary. Where a
certificate is countersigned by (1) a transfer agent other than the corporation
or its employee, or (2) a registrar other than the corporation or its employee,
the signature of any such officers may be facsimile. In case any officer or
officers who shall have signed or whose facsimile signature shall have been used
on any such certificate or certificates shall cease to be such officer or
officers of the corporation because of death, resignation or otherwise, before
such certificate or certificates shall have been delivered by the corporation,
such certificate or certificates may be issued and delivered as though the
person who signed such certificate or certificates or whose facsimile signature
shall have been used thereon had not ceased to be an officer of the corporation.
TRANSFERS OF STOCKS.
51. Transfers of stock shall be made on the books of the corporation
only by the person named in the certificate or by attorney, lawfully constituted
in writing, and upon surrender of the certificate therefor.
11
<PAGE>
FIXING RECORD DATE.
52. The board of directors shall have power to fix in advance a date,
not exceeding sixty nor less than ten days preceding the date of any meeting of
stockholders or the date for the payment of any dividend, or the date for the
allotments of rights, or the date when any redemption, selection for redemption,
or change or conversion or exchange of capital stock shall go into effect, or
the date in connection with obtaining such consent, as a record date for the
determination of the stockholders entitled to notice of, and to vote at, any
such meeting and any adjournment thereof, or entitled to receive payment of any
such dividend, or to any such allotment of rights, or to exercise the rights in
respect of any such redemption, selection for redemption, change, conversion or
exchange of capital stock, or to give the consent of stockholders for any
purpose or for the purpose of any other lawful action and in such case only such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting and any adjournment
thereof, or to receive payments of such dividend, or to receive such allotment
of rights, or to exercise such rights, or to give such consent, as the case may
be, notwithstanding any transfer of any stock on the books of the corporation
after any such record date fixed as aforesaid; and such power shall be
applicable to both preferred and common stocks together or to either separately.
REGISTERED STOCKHOLDERS.
53. The corporation shall be entitled to treat the holder of record of
any share or shares of stock as the holder in fact thereof, and accordingly
shall not be bound to recognize any equitable or other claim to or interest in
such share on the part of any other person, whether or not it shall have express
or other notice thereof, save as expressly provided by the laws of Delaware.
LOST CERTIFICATE.
54. Any person claiming a certificate of stock to be lost, stolen or
destroyed shall furnish the corporation with such evidence of the ownership
thereof and of such loss, theft or destruction as shall be satisfactory to the
corporation and shall, unless the board of directors shall waive the same, give
to the corporation a bond of indemnity with one or more sureties satisfactory to
the board, in such an amount as the board may require, to indemnify the
corporation against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of a
new certificate in lieu thereof; and thereupon the board or any officer or
officers designated by the board may cause a new certificate to be issued of the
same tenor and for the same number of shares as the one alleged to be lost,
stolen or destroyed.
INSPECTION OF BOOKS.
55. To the extent permitted by law, the directors shall determine from
time to time whether, and if allowed, when and under what conditions and
regulations, the accounts and books of the corporation (except such as may by
statute be specifically open to inspection) or any of them shall be open to the
inspection of the stockholders, and the stockholders' rights in this respect are
and shall be restricted and limited accordingly.
CHECKS.
56. Notes of the corporation shall be signed by such officer or
officers and checks or demands for money shall be signed by such officer or
officers or such other person or persons as the board of directors may from time
to time designate.
12
<PAGE>
FISCAL YEAR.
57. The fiscal year shall begin the first day of January in each year.
DIVIDENDS.
58. Dividends upon the capital stock of the corporation, when earned,
may be declared by the board of directors at any regular or special meeting.
Before payment of any dividend or making any distribution of profits,
there may be set aside out of the surplus or net profits of the corporation such
sum or sums as the directors from time to time, in their absolute discretion,
think proper as a reserve fund to meet contingencies or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conducive to the interests
of the corporation.
NOTICES.
59. Whenever under the provisions of these by-laws notice is required
to be given to any director, officer or stockholder, it shall not be construed
necessarily to mean personal notice, but such notice may be given in writing,
either personally or by mail by depositing the same in the post office or a
letter-box, in a post-paid, sealed wrapper, addressed to such stockholder,
officer or director at his, her or its address as appears on the books of the
corporation, or, in default of other address, to such director, officer or
stockholder at the General Post Office in the City of Wilmington, Delaware, or
in the General Post Office in the City of New York, and such notice shall be
deemed to be given at the time when the same shall be thus mailed; provided,
however, that in the case of any stockholder or director who is an officer or
employee of this corporation and engaged actively in the discharge of his duties
at one of the offices or places of business of this corporation, it shall be a
sufficient mailing of notice to his address to mail such notice to such officer
or employee at the office or place of business aforesaid. Any stockholder,
director or officer may waive any notice required to be given under these by-
laws.
AMENDMENTS.
60. These by-laws of the corporation may be altered or amended by the
affirmative vote of a majority of the stock issued and outstanding and entitled
to vote thereat, at any regular meeting of the stockholders, without notice of
the proposed alteration or amendment, and at any special meeting of the
stockholders, if notice of the proposed alteration or amendment be contained in
the notice of the meeting, or by the affirmative vote of a majority of the board
of directors at any regular meeting of the board, or at any special meeting of
the board, provided notice of the proposed amendment shall have been included in
the notice of such regular or special meeting. At no time shall the by-laws be
amended so as to be inconsistent with the rights of the holders of the preferred
stock set forth in Section 10 of Article Fourth of the certificate of
incorporation.
13
<PAGE>
EMERGENCY PROVISIONS.
61. In the event of a disaster of sufficient severity to prevent the
business and affairs of the corporation from being managed and its corporate
powers from being exercised by the board of directors in accordance with the
foregoing by-laws, whether by reason of multiple deaths or incapacity of
directors and officers, destruction of property, failure of communications or
other catastrophe, then, notwithstanding any other provision of the by-laws, the
following provisions shall apply:
(a) An emergency meeting or meetings of the board of directors or of
the surviving members thereof shall be called by the chief executive officer, if
available, and otherwise by one or more directors; such meetings to be held at
such times and places and upon such notice, if any, as the person or persons
calling the meeting shall deem proper. The board may take any action at such
meetings which it deems necessary and appropriate to meet the emergency.
(b) Vacancies in the board of directors shall be filled as soon as
practicable in the manner specified in Article 48 of the by-laws. In filling
vacancies consideration shall be given to senior officers of the corporation.
(c) The presence of the smallest number of directors permitted by law
to constitute a quorum, but not less than three, shall be sufficient for the
transaction of business at emergency meetings of the board of directors, except
that if there be less than three surviving directors, the surviving director or
directors, although less than a quorum, may fill vacancies in the board.
(d) The by-laws may be amended by the board of directors without notice
of the proposed amendment being given in the notice of the meeting.
(e) Without limiting the generality of the foregoing, the board of
directors is authorized to make all necessary determinations of fact regarding
the extent and severity of the disaster and the availability of members thereof;
to designate and replace officers, agents and employees of the corporation and
otherwise provide for continuity of management; and to elect a chairman, adopt
rules of procedure, and fill vacancies.
(f) The emergency powers provided in this by-law 61 shall be in
addition to any powers provided by law.
14
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.B(C)
<SEQUENCE>3
<FILENAME>dex4bc.txt
<DESCRIPTION>COLGATE PALMOLIVE MEDIUM TERM NOTE
<TEXT>
<PAGE>
EXHIBIT 4-B (c)
[FACE OF NOTE]
IF THE REGISTERED OWNER OF THIS NOTE (AS INDICATED BELOW) IS THE DEPOSITORY
TRUST COMPANY OR A NOMINEE OF THE DEPOSITORY TRUST COMPANY, THIS NOTE IS A
GLOBAL NOTE AND THE FOLLOWING LEGENDS APPLY:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY AND ANY PAYMENT
IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
REGISTERED CUSIP No:194 16 QCU2 PRINCIPAL
No. FXR- AMOUNT:
$100,000,000
COLGATE-PALMOLIVE COMPANY
MEDIUM-TERM NOTE, SERIES D
(Indexed Note)
ORIGINAL ISSUE DATE: INTEREST RATE: N/A STATED MATURITY
November 21, 2000 DATE: November 21,
2001
INTEREST PAYMENT DATE(S) [ ] CHECK IF DISCOUNT NOTE
[ ] N/A and N/A Issue Price: %
[ ] Other:
INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION
DATE: N/A PERCENTAGE: % PERCENTAGE
REDUCTION: %
HOLDER'S OPTIONAL REPAYMENT
DATE(S): N/A
AUTHORIZED DENOMINATION: SPECIFIED CURRENCY: U.S.
[ ] $1,000 and integral Dollars
multiples thereof
<PAGE>
[X] Other: $100,000 and
integral multiples of $10,000
in excess thereof
ADDENDUM ATTACHED OTHER / ADDITIONAL PROVISIONS:
[ ] Yes N/A
[X] No
2
<PAGE>
Colgate-Palmolive Company, a Delaware corporation (the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to CEDE & CO., or registered
assigns, on the Stated Maturity Date specified above (or any earlier date of
acceleration of maturity) (each such date being hereinafter referred to as the
"Maturity Date" with respect to the principal repayable on such date) the
Indexed Principal Amount calculated by the Determination Agent (as defined
below) in accordance with the formula set forth below (the "Indexed Principal
Amount") and to pay interest on any overdue Indexed Principal Amount (to the
extent legally enforceable) at the interest rate per annum specified below,
until the Indexed Principal Amount is paid or duly made available for payment.
The Indexed Principal Amount payable in respect of this Note on the
Maturity Date will be determined by Goldman, Sachs & Co., or its duly appointed
successor (the "Determination Agent"), in accordance with the following formula:
IPA=FA[0.9500+2.30[USD/EUR End Rate-0.8850]
[ [-----------------------]
[ [ 0.8850 ]
where "IPA" refers to the Indexed Principal Amount; "FA" refers to the Face
Amount of this Note and "USD/EUR End Rate" refers to the average of the daily
Federal Reserve Bank of New York fixing rates for the U.S. Dollar per Euro for
the five consecutive business days up to and including November 16, 2001, or if
such day is not a Business Day, the immediately preceding day which is a
Business Day (the "Determination Date"). The Federal Reserve fixing rate is
posted daily at approximately 10:00 a.m. New York City time on Reuters Page 1
FED under the caption "10 A.M. Midpoints". If the Federal Reserve fixing rate is
not available on any of the five Business Days prior to and including the
Determination Date, the Determination Agent will determine the fixing rate for
that date for the purpose of calculating the USD/EUR End Rate and the Indexed
Principal Amount in a commercially reasonable manner. The payment in respect of
the Indexed Principal Amount will in no event be less than 95.000% of the Face
Amount or greater than 132.864% of the Face Amount. In calculating the USD/EUR
End Rate and the Indexed Principal Amount, the Determination Agent will round to
the nearest one-thousandth of a percentage point, with five ten-thousandth of a
percentage point rounded upwards (e.g., 79.9995%) (or 0.799995) would be rounded
to 80.000% (or 0.80000), and all dollar amounts used in or resulting from any
calculation in respect of the Notes will be rounded to the nearest cent (with
one-half cent being rounded upward).
Payment of the Indexed Principal Amount due on the Maturity Date will
be made in immediately available funds upon presentation and surrender of this
Note at the office of the Trustee maintained for that purpose in the Borough of
Manhattan, The City of New York, New York in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.
If any Maturity Date falls on a day that is not a Business Day, the
required payment of the Indexed Principal Amount shall be made on the next
succeeding Business Day with the same force and effect as if made on such
Maturity Date, and no interest shall accrue with respect to
<PAGE>
such payment for the period from and after such Maturity Date, to the date of
such payment on the next succeeding Business Day.
As used herein, "Business Day" means, unless otherwise specified above,
any day, other than a Saturday or Sunday, that is neither a legal holiday nor a
day on which commercial banks are authorized or required by law, regulation or
executive order to close in New York City, Frankfurt and London.
Any overdue payment in respect of the Indexed Principal Amount of this
Note on the Maturity Date shall bear interest until the date upon which all sums
due in respect of this Note are received by or on behalf of the relevant holder,
at the rate per annum which is the rate for deposits in U.S. Dollars for a
period of six months which appears on the Reuters Screen LIBO Page as of 11:00
a.m., London time, on the first Business Day following the failure to pay. The
applicable rate shall be determined by the Determination Agent. If interest is
required to be calculated for a period of less than one year, it shall be
calculated on the basis of a 360-day year consisting of 12 months of 30 days
each, and, in the case of an incomplete month, the number of days elapsed.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall have the same force
and effect as if set forth on the face hereof.
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature of one of its authorized officers, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
2
<PAGE>
IN WITNESS WHEREOF, Colgate-Palmolive Company has caused this Note to
be duly executed by one of its duly authorized officers.
COLGATE-PALMOLIVE COMPANY
By: ________________________________
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Debt Securities
of the series designated therein referred
to in the within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By____________________________
Authorized Signatory
3
<PAGE>
[REVERSE OF NOTE]
COLGATE-PALMOLIVE COMPANY
MEDIUM-TERM NOTE, SERIES D
(Fixed Rate)
This Note is one of a duly authorized series of Debt Securities (the
"Debt Securities") of the Company issued and to be issued under a Senior
Indenture, dated as of November 15, 1992, as amended, modified or supplemented
from time to time (the "Indenture"), between the Company and The Bank of New
York, as trustee (the "Trustee", which term includes any successor trustee under
the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Debt Securities, and of the terms upon which the Debt Securities
are, and are to be, authenticated and delivered. This Note is one of the series
of Debt Securities designated as "Medium-Term Notes, Series D, Due One Year or
More From Date of Issue" (the "Notes"). All terms used but not defined in this
Note or in an Addendum hereto shall have the meanings assigned to such terms in
the Indenture or on the face hereof, as the case may be.
Except as otherwise provided in the Indenture and as set forth below,
the Notes will be issued in global form only, registered in the name of the
Depositary or its nominee and ownership of the Notes shall be maintained in
book-entry form by the Depositary for the accounts of participating
organizations of the Depositary. If this Note is a global Note, this Note is
exchangeable only if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for this global Note and a
successor depositary is not appointed by the Company within 60 days after the
Depositary notifies the Company, (ii) the Company in its sole discretion
determines that this global Note shall be exchangeable for certificated Notes of
this series in registered form or (iii) an Event of Default with respect to the
Notes represented hereby has occurred and is continuing.
This Note will not be subject to any sinking fund and will not be
redeemable or repayable prior to the Stated Maturity Date.
If an Event of Default shall occur and be continuing, the Indexed
Principal Amount may be accelerated in the manner and with the effect provided
herein and in the Indenture. Any declaration of acceleration of this Note must
specify an acceleration date that in no case shall be less than 20 Business Days
subsequent to the date of any such declaration of acceleration. Upon
acceleration prior to the Stated Maturity Date, the Indexed Principal Amount
payable in respect of this Notes will be an amount determined by the
Determination Agent based on the USD/EUR End Rate at the time of acceleration
and the period of time remaining to the Stated Maturity Date, which would have
the effect of preserving for the holder of this Note the economic equivalent on
the acceleration date of the Company's obligation to make the payment of the
Indexed Principal Amount which, absent the acceleration of this Note, would have
been payable on the Stated Maturity Date.
4
<PAGE>
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of any series of Debt Securities to be
adversely affected thereby at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of each
series of Debt Securities at the time outstanding, adversely affected thereby.
The Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the outstanding Debt Securities of
each series, on behalf of the Holders of Debt Securities of such series, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay principal, premium, if any, and interest in
respect of this Note at the times, places and rate or formula, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Security Register
of the Company upon surrender of this Note for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or by his attorney duly authorized in writing, and thereupon
one or more new Notes of Authorized Denominations and for the same aggregate
principal amount with the same terms and provisions, will be issued by the
Company to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons and only
in denominations of U.S.$100,000 and any integral multiple of U.S. $10,000 in
excess thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Notes of this series are exchangeable for a like aggregate
principal amount of Notes of this series of a different authorized denomination,
as required by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Holder as the owner hereof for all purposes, whether or not this Note be
overdue, and neither the Company, the Trustee nor any such agent shall be
affected by notice to the contrary, except as required by law.
THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PRINCIPLES.
5
<PAGE>
Capitalized terms used herein without definition which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.
6
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<CAPTION>
<S> <C> <C>
TEN COM - as tenants in common UNIF GIFT MIN - -------- Custodian
ACT
------
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of Under Uniform Gifts to
survivorship and not as tenants Minors Act
in common
---------------------------------
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
----------------------------------
7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]
- --------------------------------------------------------------------------------
(Please print or typewrite name and address including postal
zip code of assignee)
- --------------------------------------------------------------------------------
this Note and all rights thereunder hereby irrevocably constituting
and appointing
- --------------------------------------------------------------------------------
Attorney to transfer this Note on the books of the Company, with full power of
substitution in the premises.
Dated:
----------------------------- --------------------------------
----------------------------- --------------------------------
Notice: The signature(s) on
this Assignment must correspond
with the name(s) as written upon
the face of this Note in every
particular, without alteration
or enlargement or any change
whatsoever.
8
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>4
<FILENAME>dex12.txt
<DESCRIPTION>COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TEXT>
<PAGE>
EXHIBIT 12
COLGATE-PALMOLIVE COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Dollars in Millions Except Per Share Amounts
<TABLE>
<CAPTION>
Year Ended
December 31, 2000
-----------------
<S> <C>
Income before income taxes................................... $1,567.2
Add:
Interest on indebtedness and amortization of debt expense and
discount or premium......................................... 199.7
Portion of rents representative of interest factor........... 30.2
Interest on ESOP debt, net of dividends...................... 2.8
Less:
Income of less than fifty-percent-owned subsidiaries......... (2.2)
--------
Income as adjusted........................................... $1,797.7
========
Fixed Charges:
Interest on indebtedness and amortization of debt expense and
discount or premium......................................... 199.7
Portion of rents representative of interest factor........... 30.2
Interest on ESOP debt, net of dividends...................... 2.8
Capitalized interest......................................... 3.8
--------
Total fixed charges.......................................... $ 236.5
========
Ratio of earnings to fixed charges........................... 7.6
========
</TABLE>
In June 1989, the Company's leveraged employee stock ownership plan (ESOP)
issued $410.0 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 was $31.4 in 2000. 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.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>5
<FILENAME>dex21.txt
<DESCRIPTION>SUBSIDIARIES OF THE REGISTRANT
<TEXT>
<PAGE>
EXHIBIT 21
Page 1 of 6
SUBSIDIARIES OF THE REGISTRANT
------------------------------
<TABLE>
<CAPTION>
State in which
Incorporated or Country
Name of Company in which Organized
- --------------- ------------------
<S> <C>
Alexandril S.A. Uruguay
Arkay Pty Limited Australia
Asia Pioneer Co., Ltd. Hong Kong
Baser Kimya Sanayii Ve Ticaret Anonim Sirketi Turkiye
Baser Turketim Pazarlama Ve Ticaret Anonim Sirketi Turkiye
Bella, S.A. France
Camelot Investments Co. Ltd. India
Chemtech (BVI) Co. Ltd British Virgin Islands
Chet (Chemicals) (Proprietary) Limited South Africa
CKS, Inc. Delaware
Cleaning Dimensions, Inc. Delaware
Colgalive, S.A. Dominica Republic
Colgate (BVI) Limited British Virgin Islands
Colgate (Guangzhou) Co. Ltd. China
Colgate (U.K.) Limited United Kingdom
Colgate Flavors and Fragrances, Inc. Delaware
Colgate Holdings Limited United Kingdom
Colgate, Inc. Delaware
Colgate Music Direct Delaware
Colgate Oral Pharmaceuticals, Inc. Delaware
Colgate Sports Foundation, Inc. The Philippines
Colgate Venture Company, Inc. Delaware
Colgate-Palmolive France
Colgate-Palmolive & Cia Colombia
Colgate-Palmolive A.B. Sweden
Colgate-Palmolive A.G. Switzerland
Colgate-Palmolive Adria d.o.o. Slovenia
Colgate-Palmolive (America), Inc. Delaware
Colgate-Palmolive A/S Denmark
Colgate-Palmolive Belgium S.A. Belgium
Colgate-Palmolive Beteiligungsverwaltungs mbH Germany
Colgate-Palmolive (B) Sdn. Bhd. Brunei
Colgate-Palmolive (Blantyre) Limited Malawi
Colgate-Palmolive Bolivia, Ltda Bolivia
Colgate-Palmolive (Borzesti) SRL Romania
Colgate-Palmolive (Botswana) (Proprietary) Ltd Botswana
Colgate-Palmolive (Bulgaria) Ltd Bulgaria
Colgate-Palmolive (C.A.) Inc. y Compania Limitada Guatemala
Colgate-Palmolive Cameroun S.A. Cameroon
Colgate-Palmolive Canada, Inc. Canada
</TABLE>
<PAGE>
EXHIBIT 21
Page 2 of 6
<TABLE>
<CAPTION>
State in which
Incorporated or Country
Name of Company in which Organized
- --------------- ------------------
<S> <C>
Colgate-Palmolive (Caribbean), Inc. Delaware
Colgate-Palmolive (Central America), Inc. Delaware
Colgate-Palmolive Central European Management Inc. Delaware
Colgate-Palmolive (Centro America) S.A. Guatemala
Colgate-Palmolive (Ceylon) Limited Sri Lanka
Colgate-Palmolive Charitable Foundation Delaware
Colgate-Palmolive Chile S.A. Chile
Colgate-Palmolive, Cia. Delaware
Colgate-Palmolive Co. (Jamaica) Ltd. Jamaica
Colgate-Palmolive Compania Anonima Venezuela
Colgate-Palmolive Company, Distr. Puerto Rico
Colgate-Palmolive (Costa Rica), S.A. Costa Rica
Colgate-Palmolive Cote d'Ivoire, S.A. Ivory Coast
Colgate-Palmolive Czech Republic spol. s.r.o. Czechoslovakia
Colgate-Palmolive de Paraguay, S.A. Paraguay
Colgate-Palmolive de Puerto Rico, Inc. Delaware
Colgate-Palmolive del Ecuador, S.A. Ecuador
Colgate-Palmolive del Peru (Delaware) Inc. Delaware
Colgate-Palmolive Deutschland Holding GmbH Germany
Colgate-Palmolive Development Corp. Delaware
Colgate-Palmolive Distribution Co. (Pty) Ltd Botswana
Colgate-Palmolive (Dominica), Inc. Delaware
Colgate-Palmolive (Dominican Republic), Inc. Delaware
Colgate-Palmolive (East Africa) Limited Kenya
Colgate-Palmolive (Eastern) Pte. Ltd Singapore
Colgate-Palmolive (Egypt) S.A.E. Egypt
Colgate-Palmolive Enterprises, Inc. Delaware
Colgate-Palmolive Espana, S.A Spain
Colgate-Palmolive Europe S.A. Belgium
Colgate-Palmolive (Far East) Sdn Bhd Malaysia
Colgate-Palmolive (Fiji) Limited Fiji Islands
Colgate-Palmolive (Finance) (Pty) Limited South Africa
Colgate-Palmolive G.m.b.H. Germany
Colgate-Palmolive (Gabon) S.A. Gabon
Colgate-Palmolive Gesellschaft G.m.b.H. Austria
Colgate-Palmolive Global Trading Company Delaware
Colgate-Palmolive (Gulf States) Ltd. British Virgin Islands
Colgate-Palmolive (Guyana) Ltd Guyana
Colgate-Palmolive (H.K.) Limited Hong Kong
Colgate-Palmolive (Hellas) S.A. I.C. Greece
Colgate-Palmolive Holding Argentina S.A. Argentina
Colgate-Palmolive Holding Inc. Delaware
Colgate-Palmolive Hungary Trading Unlimited Partnership Hungary
Colgate-Palmolive (Hungary) Manufacturing, Limited Liability Company Hungary
</TABLE>
<PAGE>
EXHIBIT 21
Page 3 of 6
<TABLE>
<CAPTION>
State in which
Incorporated or Country
Name of Company in which Organized
- --------------- ------------------
<S> <C>
Colgate-Palmolive, Inc. Delaware
Colgate-Palmolive (India) Limited India
Colgate-Palmolive Industries (Private) Ltd Zimbabwe
Colgate-Palmolive International Incorporated Delaware
Colgate-Palmolive Investment Co., Inc. Delaware
Colgate-Palmolive Investments (BVI) Ltd. British Virgin Islands
Colgate-Palmolive Investments, Inc. Delaware
Colgate-Palmolive Investments (PNG) Pty Ltd Papua New Guinea
Colgate-Palmolive Italia S.r.l. Italy
Colgate-Palmolive (Latvia) SIA Latvia
Colgate-Palmolive Limited New Zealand
Colgate-Palmolive, Ltda Brazil
Colgate-Palmolive (Malaysia) Sdn Bhd Malaysia
Colgate-Palmolive Manufacturing (Barbados) Limited Barbados
Colgate-Palmolive (Marketing) Sdn Bhd Malaysia
Colgate-Palmolive Mennen Limited United Kingdom
Colgate-Palmolive (Middle East Exports) Ltd. British Virgin Islands
Colgate-Palmolive (Mocambique) Limitada Mozambique
Colgate-Palmolive Morocco Morocco
Colgate-Palmolive Nederland B.V. Netherlands
Colgate-Palmolive (Nepal) Private Limited Nepal
Colgate-Palmolive (New York), Inc. Delaware
Colgate-Palmolive (Nigeria) Services Ltd. Nigeria
Colgate-Palmolive NJ, Inc. New Jersey
Colgate-Palmolive Norge A/S Norway
Colgate-Palmolive Senegal (ex NSOA) S.A. Senegal
Colgate-Palmolive Participacoes e Investimentos Imobiliarios, S.A. Portugal
Colgate-Palmolive Philippines, Inc. The Philippines
Colgate-Palmolive Peru S.A. Peru
Colgate-Palmolive Papua New Guinea Pty Ltd Papua New Guinea
Colgate-Palmolive (Poland) Sp. z 0.0. Poland
Colgate-Palmolive Pty Limited Australia
Colgate-Palmolive (Pty) Limited South Africa
Colgate-Palmolive (Research & Development), Inc. Delaware
Colgate-Palmolive (Romania) SRL Romania
Colgate-Palmolive, S.A. Portugal
Colgate-Palmolive, S.A. de C.V. Mexico
Colgate-Palmolive (Slovakia) sro Slovakia
Colgate-Palmolive Sociedad Anonima Industrial y Commercial Argentina
Colgate-Palmolive Son Hai Limited Vietnam
Colgate-Palmolive S.p.A. Italy
Colgate-Palmolive SP Ukraine
Colgate-Palmolive Support Services Ireland
Colgate-Palmolive Temizlik Urunleri Sanayi ve Ticart S.A. Turkiye
Colgate-Palmolive (Thailand) Ltd. Thailand
Colgate-Palmolive Transnational Inc. Delaware
</TABLE>
<PAGE>
EXHIBIT 21
Page 4 of 6
<TABLE>
<CAPTION>
State in which
Incorporated or Country
Name of Company in which Organized
- --------------- ------------------
<S> <C>
Colgate-Palmolive (Uganda) Limited Uganda
Colgate-Palmolive (Ukraine) A/O Ukraine
Colgate-Palmolive (U.K.) Limited United Kingdom
Colgate-Palmolive (Zambia) Inc. Delaware
Colgate-Palmolive (Zimbabwe), Inc. Delaware
Colgate-Palmolive (Zimbabwe) (Private) Limited Zimbabwe
Consumer Viewpoint Center, Inc. New Jersey
Cosmeticos Grasse Ltda. Chile
Cotelle S.A. France
CP Adina S.A. Colombia
CP Australia Employee Share Scheme Pty Limited Australia
CP Super Management Pty Ltd Australia
CPC Funding Company Delaware
CPIF Venture, Inc. Delaware
Delpha, S.A. France
Dental Pack Industria E Comercio Ltda Brazil
Dentatech (BVI) Co. Ltd British Virgin Islands
DF Soap Co. Delaware
DFW Co. Cayman Islands
Dimac Development Corp. Delaware
Direct Development, Inc. Massachusetts
Dominica Coconut Products Limited Dominica
EKIB, Inc. Delaware
ELM Company Limited Bermuda
Empresa de Maquilas, S.A. de C.V. Mexico
Estrellas Colgate Mexico
Fundacion Colgate-Palmolive Dominicana, N/A, Inc. Dominican Republic
Gamma Development Company Limited Thailand
Global Trading and Supply Company Delaware
Hamol B.V. Netherlands
Hamol, Ltd Delaware
Hawley & Hazel (BVI) Company Ltd British Virgin Islands
Hawley & Hazel (Malaysia) Sdn Bhd Malaysia
Hawley & Hazel Chemical Co. (H.K.) Ltd. Hong Kong
Hawley & Hazel Chemical Co. Singapore (Pte.) Ltd. Singapore
Hawley & Hazel Chemical Company (Zhongshou) Limited China
Hawley & Hazel Chemical (Taiwan) Corporation Ltd. Taiwan
Hawley & Hazel China Investment Limited China
Hawley & Hazel Investment Co., Ltd. Hong Kong
Hawley & Hazel Investment Co. (H.K.) Ltd Hong Kong
Hawley & Hazel Taiwan Corporation Taiwan
Herrick International Limited British Virgin Islands
Hill's Funding Company Delaware
Hill's Pet Nutrition B.V. Netherlands
Hill's International Sales FSC B.V. Netherlands
Hill's Pet Nutrition Canada Inc. Canada
Hill's Pet Nutrition de Argentina, S.A. Argentina
</TABLE>
<PAGE>
EXHIBIT 21
Page 5 of 6
<TABLE>
<CAPTION>
State in which
Incorporated or Country
Name of Company in which Organized
- --------------- ------------------
<S> <C>
Hill's Pet Nutrition de Puerto Rico, Inc. Puerto Rico
Hill's Pet Nutrition Espana, S.L. Spain
Hill's Pet Nutrition GmbH Germany
Hill's Pet Nutrition, Inc. Delaware
Hill's Pet Nutrition Ltd. United Kingdom
Hill,s Pet Nutrition Manufacturing, B.V. Netherlands
Hill's Pet Nutrition Pty Limited Australia
Hill's Pet Nutrition Sales, Inc. Delaware
Hill's Pet Products (Benelux) S.A. Belgium
Hill's Pet Products de Mexico, S.A. de C.V. Mexico
Hill,s Pet Nutrition (NZ) Limited New Zealand
Hill,s Pet Nutrition Manufacturing, B.V. Netherlands
Hill's Pet Nutrition S.p.A. Italy
Hill's Pet Nutrition SNC France
Hill's Pet Products, Inc. Delaware
Hill's-Colgate (Japan) Ltd. Japan
HL Soap Co. Delaware
HLP Co. Cayman Islands
Hopro Liquidating Corp. Ohio
Hygiene Systems et Services S.A. Tunisia
Industrial Jabonera Ecuatoriana S.A. Ecuador
Industrias Quimicas Associadas Multiquim, S.A. Ecuador
Inmobiliara Hills, S.A. de C.V. Mexico
Innovacion Creativa, S.A. de C.V. Mexico
Inter-Hamol, S.A. Luxembourg
Jigs Investments, Ltd. India
JG Soap Co. Delaware
JGP Co. Cayman Islands
JPK Co. Cayman Islands
JP Soap Co. Delaware
Kolynos Corporation Delaware
Kolynos do Brasil Ltda Brazil
Lournay Sales, Inc. Delaware
Mennen de Chile, Ltd. Delaware
Mennen de Nicaragua, S.A. Delaware
Mennen Guatemala, S.A. Guatemala
Mennen Interamerica Limited Delaware
Mennen Investments Inc. Delaware
Mennen Limited Delaware
Mennen Products (Pty) Ltd South Africa
Mennen South Africa, Ltd Delaware
Mission Hill's Property Corporation Delaware
Mission Hills, S.A. de C.V. Mexico
Multimint Leasing & Finance Ltd. India
Newgrange Financial Services Company Ireland
New Science, Inc. Delaware
Norwood International Incorporated Delaware
</TABLE>
<PAGE>
EXHIBIT 21
Page 6 of 6
<TABLE>
<CAPTION>
State in which
Incorporated or Country
Name of Company in which Organized
- --------------- ------------------
<S> <C>
ODOL Sociedad Anonima Industrial y Commercial Argentina
Olive Music Publishing Corporation Delaware
Oraltech Company, Limited British Virgin Islands
Palmolive (Guangzhou) Co. Ltd. China
Paramount Research, Inc. Delaware
Passion Trading & Investment Co., Ltd. India
Penny, LLC Delaware
Pet Chemicals Inc. Florida
Polyana S.A. Uruguay
Princess House de Mexico, S.A. de C.V. Mexico
Productors Halogenados Copalven, C.A. Venezuela
P.T. Colgate-Palmolive Indonesia Indonesia
P.T. Hawley & Hazel Indonesia Indonesia
Purity Holding Company Delaware
Purity Music Publishing Corporation Delaware
Puterang Sdn Bhd Malaysia
Refresh Company Limited Dominica
SDBX, Inc. Delaware
Samuel Taylor Holdings B.V. Netherlands
Siam Purity Distribution Co. Ltd. Thailand
Siam Regal Co., Inc. Thailand
Societe Generale de Negoce et de Services S.A. Tunisia
Societe Industriale de Bourbon, S.I.B. Reunion
Softsoap Enterprises, Inc. Massachusetts
Somerset Collections Inc. Massachusetts
Southhampton-Hamilton Company Delaware
The Lournay Company, Inc. Delaware
The Murphy-Phoenix Company Ohio
VCA, Inc. Delaware
Veterinary Companies of America, Inc. Delaware
Village Bath Products, Inc. Minnesota
Vipont Pharmaceutical, Inc. Delaware
XEB, Inc New Jersey
ZAO Colgate-Palmolive (Russia) Russia
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>6
<FILENAME>dex23.txt
<DESCRIPTION>CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
<TEXT>
<PAGE>
EXHIBIT 23
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation of
our report, dated January 30, 2001, included in this Form 10-K, into the
Company's previously filed Registration Statement File Nos. 2-76922, 2-96982,
33-17136, 33-27227, 33-34952, 33-15515, 33-48832, 33-48840, 33-58746, 33-61038,
33-78424,33-58887, 33-58231, 33-64753, 333-38251, 333-45679, 333-79411 and 333-
33644.
/s/ Arthur Andersen LLP
New York, New York
March 28, 2001
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>7
<FILENAME>dex24.txt
<DESCRIPTION>POWER OF ATTORNEY
<TEXT>
<PAGE>
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, Jill K. Conway, do hereby make, constitute and appoint
Andrew D. Hendry and Michele C. Mayes, and each of them, as my attorneys-in-fact
and agents with full power of substitution for me and in my name, place and
stead, in any and all capacities, to execute for me and on my behalf the Annual
Report of Colgate-Palmolive Company on Form 10-K for the year ended December 31,
2000, and any and all amendments thereto and any other documents in connection
therewith, and to file the same with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing necessary and
proper to be done in and about the premises, as fully to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents and/or either of them may lawfully do or
cause to be done by virtue hereof.
In witness whereof, I have executed this Power of Attorney
this 8th day of March, 2001.
/s/ JILL K. CONWAY
---------------------------------
Name: Jill K. Conway
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, Ronald E. Ferguson, do hereby make, constitute and appoint
Andrew D. Hendry and Michele C. Mayes, and each of them, as my attorneys-in-fact
and agents with full power of substitution for me and in my name, place and
stead, in any and all capacities, to execute for me and on my behalf the Annual
Report of Colgate-Palmolive Company on Form 10-K for the year ended December 31,
2000, and any and all amendments thereto and any other documents in connection
therewith, and to file the same with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing necessary and
proper to be done in and about the premises, as fully to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents and/or either of them may lawfully do or
cause to be done by virtue hereof.
In witness whereof, I have executed this Power of Attorney
this 8th day of March, 2001.
/s/ RONALD E. FERGUSON
----------------------------------
Name: Ronald E. Ferguson
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, Ellen M. Hancock, do hereby make, constitute and appoint
Andrew D. Hendry and Michele C. Mayes, and each of them, as my attorneys-in-fact
and agents with full power of substitution for me and in my name, place and
stead, in any and all capacities, to execute for me and on my behalf the Annual
Report of Colgate-Palmolive Company on Form 10-K for the year ended December 31,
2000, and any and all amendments thereto and any other documents in connection
therewith, and to file the same with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing necessary and
proper to be done in and about the premises, as fully to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents and/or either of them may lawfully do or
cause to be done by virtue hereof.
In witness whereof, I have executed this Power of Attorney
this 8th day of March, 2001.
/s/ ELLEN M. HANCOCK
-----------------------------
Name: Ellen M. Hancock
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, David W. Johnson, do hereby make, constitute and appoint
Andrew D. Hendry and Michele C. Mayes, and each of them, as my attorneys-in-fact
and agents with full power of substitution for me and in my name, place and
stead, in any and all capacities, to execute for me and on my behalf the Annual
Report of Colgate-Palmolive Company on Form 10-K for the year ended December 31,
2000, and any and all amendments thereto and any other documents in connection
therewith, and to file the same with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing necessary and
proper to be done in and about the premises, as fully to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents and/or either of them may lawfully do or
cause to be done by virtue hereof.
In witness whereof, I have executed this Power of Attorney
this 8th day of March, 2001.
/s/ DAVID W. JOHNSON
-------------------------
Name: David W. Johnson
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, John P. Kendall, do hereby make, constitute and appoint
Andrew D. Hendry and Michele C. Mayes, and each of them, as my attorneys-in-fact
and agents with full power of substitution for me and in my name, place and
stead, in any and all capacities, to execute for me and on my behalf the Annual
Report of Colgate-Palmolive Company on Form 10-K for the year ended December 31,
2000, and any and all amendments thereto and any other documents in connection
therewith, and to file the same with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing necessary and
proper to be done in and about the premises, as fully to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents and/or either of them may lawfully do or
cause to be done by virtue hereof.
In witness whereof, I have executed this Power of Attorney
this 8th day of March, 2001.
/s/ JOHN P. KENDALL
--------------------------
Name: John P. Kendall
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, Richard J. Kogan, do hereby make, constitute and appoint
Andrew D. Hendry and Michele C. Mayes, and each of them, as my attorneys-in-fact
and agents with full power of substitution for me and in my name, place and
stead, in any and all capacities, to execute for me and on my behalf the Annual
Report of Colgate-Palmolive Company on Form 10-K for the year ended December 31,
2000, and any and all amendments thereto and any other documents in connection
therewith, and to file the same with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing necessary and
proper to be done in and about the premises, as fully to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents and/or either of them may lawfully do or
cause to be done by virtue hereof.
In witness whereof, I have executed this Power of Attorney
this 8th day of March, 2001.
/s/ RICHARD J. KOGAN
--------------------------
Name: Richard J. Kogan
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, Howard B. Wentz, Jr., do hereby make, constitute and
appoint Andrew D. Hendry and Michele C. Mayes, and each of them, as my
attorneys-in-fact and agents with full power of substitution for me and in my
name, place and stead, in any and all capacities, to execute for me and on my
behalf the Annual Report of Colgate-Palmolive Company on Form 10-K for the year
ended December 31, 2000, and any and all amendments thereto and any other
documents in connection therewith, and to file the same with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
necessary and proper to be done in and about the premises, as fully to all
intents and purposes as I might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents and/or either of them may
lawfully do or cause to be done by virtue hereof.
In witness whereof, I have executed this Power of Attorney
this 8th day of March, 2001.
/s/ HOWARD B. WENTZ, JR.
--------------------------
Name: Howard B. Wentz, Jr.
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
I, Reuben Mark, do hereby make, constitute and appoint Andrew
D. Hendry and Michele C. Mayes, and each of them, as my attorneys-in-fact and
agents with full power of substitution for me and in my name, place and stead,
in any and all capacities, to execute for me and on my behalf the Annual Report
of Colgate-Palmolive Company on Form 10-K for the year ended December 31, 2000,
and any and all amendments thereto and any other documents in connection
therewith, and to file the same with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing necessary and
proper to be done in and about the premises, as fully to all intents and
purposes as I might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents and/or either of them may lawfully do or
cause to be done by virtue hereof.
In witness whereof, I have executed this Power of Attorney
this 8th day of March, 2001.
/s/ REUBEN MARK
---------------------------
Name: Reuben Mark
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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