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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 (FEE REQUIRED)
For the fiscal year ended December 31, 1993
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ___________ to ____________.
Commission File Number 1-644-2
__________
COLGATE-PALMOLIVE COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 13-1815595
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
300 PARK AVENUE, NEW YORK, NEW YORK 10022
(Address of principal executive offices) (Zip Code)
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, 1994 the aggregate market value of stock held by non-affiliates
was $9,597.7 million. There were 147,374,048 shares of Common Stock outstanding
as of February 28, 1994.
DOCUMENTS INCORPORATED BY REFERENCE:
Documents Form 10-K Reference
Portions of Proxy Statement for the 1994
Annual Meeting Part III, Items 10 through 13
Total number of sequentially numbered pages in this filing, including
exhibits thereto: 66.
The exhibit index is located on page 47.
1
PART I
ITEM 1. BUSINESS
(a) General Development of the Business
Colgate-Palmolive Company (the "Company") is a corporation which was
organized under the laws of the State of Delaware in 1923. The Company
manufactures and markets a wide variety of products throughout the world for
use by consumers. For recent business developments, refer to the
information set forth under the captions "Results of Operations" and
"Liquidity and Capital Resources" in Part II, Item 7 of this report.
(b) Financial Information About Industry Segments
For information about industry segments see Note 1 to the Consolidated
Financial Statements included on page 22 of this report.
(c) Narrative Description of the Business
For information regarding description of the business refer to the caption
"Scope of Business" on page 13; "Average number of employees" appearing
under "Historical Financial Summary" on page 45; and "Research and
development" expenses appearing in Note 13 to the Consolidated Financial
Statements on page 31 of this report.
The Company's products are generally marketed by a sales force employed by
each individual subsidiary or business unit. In some instances outside jobbers
and brokers are used. Most raw materials used worldwide are purchased from
others, are available from several sources and are generally available in
adequate supply. Products and commodities such as tallow and essential oils are
subject to wide price variations. No one of the Company's raw materials
represents a significant portion of total material requirements.
Trademarks are considered to be of material importance to the Company's
business; consequently the practice is followed of seeking trademark
protection by all available means. Although the Company owns a number of
patents, no one patent is considered significant to the business taken as a
whole.
The Company has programs for the operation and design of its facilities
which meet or exceed applicable environmental rules and regulations.
Compliance with such rules and regulations has not significantly affected
the Company's capital expenditures, earnings or competitive position.
Capital expenditures for environmental control facilities totaled $9.4
million in 1993 and are budgeted at $13.9 million for 1994. For future
years, expenditures are expected to be in the same range.
(d) Financial Information About Foreign and Domestic Operations and
Export Sales
For information concerning geographic area financial data see Note 1 to
the Consolidated Financial Statements on page 22 of this report.
ITEM 2. PROPERTIES
The Company owns and leases a total of 266 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 68 facilities, of which 29 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 Company is transforming its former facilities in Jersey City, New
Jersey into a mixed-use complex with the assistance of developers and other
investors. The Specialty Marketing segment has major facilities in Bowling
Green, Kentucky; Topeka, Kansas; and Richmond, Indiana. Research facilities
are located throughout the world, with the research center for Oral, Personal
and Household Care products located in Piscataway, New Jersey.
2
Overseas, the Company operates 198 facilities, of which 81 are owned, in
over 50 countries. Major overseas facilities used by the Oral, Personal and
Household Care segment are located in Australia, Brazil, Canada, Colombia,
France, Germany, 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
For information regarding legal matters see Note 15 to the Consolidated
Financial Statements included on page 33 of this report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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" on page 15; the information under "Common
Stock" in Note 6 to the Consolidated Financial Statements on page 24; and
the "Number of shareholders of record" and "Cash dividends declared per
common share" under the caption "Historical Financial Summary" on page 45 of
this report.
ITEM 6. SELECTED FINANCIAL DATA
Refer to the information set forth under the caption "Historical Financial
Summary" on page 45 of this report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Net Sales
Worldwide sales in 1993 increased 2% to $7,141.3 from $7,007.2 in 1992.
Sales would have grown 7%, excluding the negative effects of foreign
currency declines. Volume increased 5% for the year, including 1%
resulting from increased ownership of the Company's Indian operation to
majority control.
Sales in the Oral, Personal and Household Care segment were $6,243.2,
up 1% from $6,162.0 in 1992, and would have increased 7%, excluding the
impact of unfavorable currency translation. Sales in the Asia/Africa
region grew 20% on particularly strong volume gains led by Malaysia,
Thailand and Hong Kong along with the volume contribution from the
Indian consolidation. This sales increase was tempered by results in
Australia/New Zealand and the Philippines, which were impacted by
foreign currency declines, and in Africa, which was affected by poor
economic conditions. Sales in the European region decreased 12%
primarily due to currency translation. Volume declines of 3% in
Western Europe, due to difficult economic conditions, were offset by
volume increases in Central Europe led by Poland, Romania, and Turkiye.
Latin America sales increased 16% due to selling price increases and
overall volume growth of 7%. Sales increased in every country in Latin
America with particularly strong increases in Mexico, Colombia, Ecuador
and Central America. United States and Canada sales were down 4% due
primarily to the effects of disinflationary pricing in the United
States.
3
Sales in the Specialty Marketing segment increased 6% to $898.1 versus
$845.2 in 1992. Most of this growth came from Hill's Pet Nutrition,
where sales increased 11% on volume growth of 8% reflecting continued
growth in pet foods in both the domestic and international markets,
particularly in Europe and Japan. Hill's accounts for over 80% of the
Specialty Marketing segment's sales. Sales relating to non-core
businesses continued to decline in 1993.
Colgate's 1992 sales reflected a 16% increase over 1991 sales. The
increase reflects sales growth in both industry segments. Overall unit
volume increased 11%, including 5% contributed by the Mennen
acquisition. Sales in the Oral, Personal and Household Care segment
grew 17% with all geographic regions contributing to this growth. In
the Asia/Africa region, sales increased 18% versus 1991. Sales in
Europe, despite recessionary conditions, grew 10%, including expansion
into Central Europe. Latin America and USA/Canada sales increased over
20% through internally generated new product activity and the addition
of the Mennen personal care business. Sales in the Specialty Marketing
segment were 6% higher than 1991, reflecting an 8% sales increase at
Hill's Pet Nutrition.
Gross Profit
Gross profit margin improved to 47.8% from 47.1% in 1992 and 45.6% in
1991. The continuing improvement in gross profit reflects the
Company's strategy to shift product mix to higher margin personal care
product categories, reduce overhead and improve manufacturing
efficiency by focusing investments in high-return capital projects.
Improvement in the profitability of sales enables the Company to
generate more cash from operations to reinvest in its existing
businesses in the form of research and development and advertising,
to launch new products, to expand geographically, to invest in strategic
acquisitions within its core businesses, and to pay dividends.
Selling, General and Administrative Expenses
Selling, general and administrative expenses as a percent of sales
decreased to 34% in 1993 as compared with 36% in 1992 and 35% in 1991.
The decrease in 1993 expenditures reflects the continued efforts of the
Company to reduce overhead expenses, offset in part by higher
advertising and product promotion spending as well as increased
research and development activity. The increase in 1992 reflects
increases in advertising and research and development as these
expenditures support current business growth levels and are investments
to maintain the Company's competitive advantage in introducing new and
improved products in its strategic core businesses.
In September 1991, the Company announced a manufacturing and
organizational restructuring program designed to capitalize on
opportunities created by movement to common markets in Europe and North
America, more sophisticated and efficient manufacturing techniques, and
consolidation opportunities created by several acquisitions around the
world. The program included organizational realignments, manufacturing
reconfigurations and the write-down of certain property, plant and
equipment. As a result, the Company recorded a pretax charge of $340.0
($243.0 aftertax or $1.80 per share) in 1991.
Other Expense and Income
Other expense and income consists principally of earnings from equity
investments, amortization of goodwill and other intangible assets, and
minority interest in earnings of less-than-100%-owned consolidated
subsidiaries. Amortization expense in 1993 and 1992 increased from
1991 due to higher levels of intangible assets stemming from the
Company's recent acquisitions, most notably Mennen, which continued the
Company's expansion into high-margin personal care businesses. The
decrease in equity earnings and increase in minority interest primarily
results from increased ownership in the Company's Indian operation to
majority control.
4
Earnings Before Interest and Taxes
Earnings before interest and taxes (EBIT) increased 14% to $883.0 in
1993 as compared with $777.9 in the prior year. The Oral, Personal and
Household Care segment reported 12% growth in EBIT to $731.5 versus
$653.2 in 1992, with gains in the developing regions offsetting
declines in the developed world, which were impacted by difficult
business climates. Within this segment, United States and Canada EBIT
decreased 5% to $177.8 as compared with the prior year primarily due to
lower selling prices. EBIT in Europe decreased 9% due to the negative
impact of foreign currency translation and difficult economic
conditions. In Latin America, EBIT improved 30% to $249.6 in 1993
versus the prior year while Asia/Africa increased 50%, including the
consolidation of India. Overall, the higher margin product mix and
reduced selling, general and administrative expenses allowed for
increased investment in advertising and product promotion and in
research and development, as well as the achievement of a higher level
of EBIT. In the Specialty Marketing segment, EBIT was $156.9 in 1993
as compared with $142.9 in 1992. The improvement results principally
from higher domestic unit volume growth and expanded international
distribution at Hill's Pet Nutrition, particularly in Europe and Japan.
EBIT was $777.9 in 1992 as compared with $282.6 in 1991, which included
the effects of a restructuring charge. Excluding the impact of the
1991 restructuring charge, EBIT increased 25%. The Oral, Personal and
Household Care segment reported EBIT of $653.2 versus $202.8 in 1991.
EBIT in this segment improved 32%, excluding the effects of the 1991
charge, with all geographic regions contributing to this increase. The
17% increase in sales and the move to a higher margin product mix
allowed for increased advertising and the achievement of a higher level
of EBIT. In the Specialty Marketing segment, EBIT was $142.9 in 1992
as compared with $100.4 in 1991, which included the effects of the
restructuring charge. Excluding the 1991 provision for restructuring,
results in this segment improved 11%, principally from higher unit
volume growth and expanded European distribution at Hill's Pet
Nutrition.
Net Interest Expense
Interest expense, net of interest income, was $46.8 in 1993 compared
with $50.0 in 1992 and $64.7 in 1991. The decrease in net interest
expense in 1993 in spite of higher debt, primarily to finance share
repurchases, reflects a general decline in interest rates and the
Company's refinancing of higher rate long-term debt during the year.
The decrease in net interest expense in 1992 included the effect of the
Company's equity offering late in the fourth quarter of 1991, the
proceeds of which were used to reduce borrowings, as well as a decline
in interest rates and the Company's refinancings early in 1992 of
higher rate long-term debt.
Income Taxes
In 1993 and 1992, the effective tax rate on income was 34.5%. The
increase in the U.S. statutory tax rate in 1993 was in part offset by
statutory rate reductions in several overseas jurisdictions. In 1991,
the effective tax rate was 43%, which reflected the lower tax benefits
recognized on certain elements of the restructuring provision outside
the United States. Excluding the effect of the restructuring
provision, the effective tax rate in 1991 was 34%. Global tax savings
strategies benefited the effective rate in 1993, 1992 and 1991.
Net Income
Net income was $189.9 in 1993 or $1.08 per share on a primary basis
compared with $477.0 or $2.92 per share in 1992. Included in 1993 net
income and per share amounts is the cumulative one-time impact on prior
years of adopting new mandated accounting standards effective January
1, 1993 for income taxes, other postretirement benefits and
postemployment benefits. Before the changes in accounting, 1993 income
increased 15% to $548.1 or $3.38 per share on a primary basis. Net
income was $124.9 or $.77 per share in 1991. Included in 1991 net
income and per share amounts is the provision for restructuring of
$243.0 net of tax or $1.80 per share on a primary basis.
Return on sales was 7.7% in 1993 (excluding the impact of accounting
changes) compared with 6.8% in 1992 and 6.1% in 1991 (2.1% including the
restructuring charge), reflecting the Company's shift to higher margin
categories and focus on cost containment.
5
Liquidity and Capital Resources
Net cash provided by operations increased to $710.4 in 1993 compared
with $542.7 in 1992 and $485.7 in 1991. The improvement in cash
generated by operating activities from 7.7% of sales in 1992 to 9.9% of
sales in 1993 reflects the Company's improving profitability and
continued management emphasis on working capital. Cash generated from
operations was used to finance acquisitions, repurchase shares and fund
an increased dividend level.
The Company has additional sources of liquidity available in the form
of lines of credit maintained with various banks. Such lines of credit
amounted to $1,303.2 at December 31, 1993. The Company also has the
ability to issue commercial paper at favorable interest rates to meet
short-term liquidity needs. These borrowings carry a Standard & Poor's
rating of A1 and a Moody's rating of P1.
During the 1993 first quarter, the Company repaid outstanding debt
totaling $85.7 which included $50.0 of 8.9% Swiss franc notes due in
1993. During the third quarter, the Company redeemed $79.0 of its
9.625% debentures issue due 2017.
During 1992, the Company increased the amount available under its shelf
registration from $150.0 to $400.0. In the fourth quarter of 1993,
$230.0 of medium term notes were issued under this registration in
addition to $169.2 issued in the fourth quarter of 1992. These notes
are rated A1/A+ by Moody's and Standard & Poor's, respectively.
During the third quarter of 1993, the Company participated in the
formation of a business which purchases receivables, including Company
receivables. Outside institutions invested $60.0 in this entity. The
Company consolidates this entity and the amounts invested by the
outside institutions are classified as a minority interest.
Colgate's reputation, global presence and strong capital position
afford it access to debt and equity markets around the world, enabling
the Company to raise funds with a low effective cost. The Company
manages its exposure related to foreign currency borrowings through the
use of various currency agreements. The Company also actively manages
its debt position to optimize the maturities of debt issues as well as
the mix of fixed and floating rate debt. At December 31, 1993, the
Company had in place interest rate agreements with banks having a
notional principal amount of $447.0.
Capital expenditures in 1993 were $364.3 or 5.1% of sales as compared
with $318.5 in 1992 and $260.7 in 1991. The increase in 1993 spending
was focused primarily on projects that yield high aftertax returns,
thereby reducing the Company's cost structure. Capital expenditures
for 1994 are expected to continue at or slightly above the current rate
of approximately 5% of sales.
Other investing activities in 1993, 1992 and 1991 included strategic
acquisitions and equity investments worldwide. In October 1993, the
Company acquired the liquid hand and body soap brands of S.C. Johnson
Wax in Europe, the South Pacific and other international locations.
During the year the Company also acquired the Cristasol glass cleaner
business in Spain, increased ownership of its Indian operation to
majority control and made other investments. The aggregate purchase
price of all 1993 acquisitions was $222.5.
Acquisitions totaled $718.4 in 1992 and $339.4 in 1991 and included
businesses in the household care, fabric care, personal care and oral
care categories. In March 1992, the Company acquired The Mennen
Company for an aggregate purchase price of approximately $670.0. The
purchase price was paid with 11.6 million unregistered shares of the
Company's common stock and $127.0 in cash. Other acquisitions included
significant ownership positions in joint ventures in China and Eastern
Europe, The Murphy-Phoenix Company and the Plax worldwide business
excluding the United States, Canada and Puerto Rico. Goodwill and
other intangible assets increased as a result of these acquisitions.
6
During 1993, the Company repurchased common shares in the open market
and private transactions to provide for employee benefit plans and to
maintain its target capital structure. Aggregate repurchases for the
year approximated 12 million shares with a total purchase price of
$673.0. In the first quarter of 1994, the Board of Directors
authorized the repurchase of up to an additional five million shares.
The ratio of debt to total capitalization (defined as the ratio of debt
to debt plus equity) increased to 48% during 1993 from 30% in 1992.
The return on average shareholders' equity, before accounting changes,
increased to 24% from 21% during the same period as this shift towards
targeted capitalization benefited overall shareholder return. The
decrease in debt to total capitalization in 1992 from the 1991 level of
36% reflects the issuance of shares in connection with the acquisition
of The Mennen Company.
Dividend payments were $240.8 in 1993 ($231.4 aftertax), up from $211.1
($200.7 aftertax) in 1992, reflecting a 16% increase in the common
dividend effective in the third quarter of 1993. Common dividend
payments increased to $1.34 per share in 1993 from $1.15 per share in
1992. The Series B Preference Stock dividends were declared and paid
at the stated rate of $4.88 per share. The increase in dividend
payments in 1992 over 1991 reflects a 17% increase in the common
dividend effective in the third quarter of 1992.
Internally generated cash flows appear to be adequate to support
currently planned business operations and capital expenditures.
However, certain events, such as significant acquisitions, could
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. 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 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 condition or ongoing cash flows and results of
operations.
New Accounting Standards
In May 1993, the Financial Accounting Standards Board issued Statement
No. 115, "Accounting for Certain Investments in Debt and Equity
Securities," which addresses the accounting and reporting for
investments in equity securities that have readily determinable fair
values and for all investments in debt securities. The Company will
adopt the provisions of this new standard effective January 1, 1994,
and prior periods will not be restated. The effect of adoption will
not be material to financial condition, results of operations or cash
flows.
Outlook
As the Company enters 1994, continued recessionary conditions in
certain major markets present some uncertainty in the near term while
further expansion into the markets of the developing world presents
strong opportunity for growth. The global economic situation for 1994
is not expected to be materially different from that experienced in
1993. Historically, the consumer products industry has been less
susceptible to changes in economic growth than many other industries.
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.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See the "Index to Financial Statements" which is located on page 12 of
this report in the section entitled "Financial Statements for the year
ended December 31, 1993 and Other Supplementary Data".
7
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 1994 Annual Meeting is incorporated
herein by reference.
The following is a list of executive officers as of March 24, 1994:
Date First
Elected
Name Age Officer Present Title
Reuben Mark 55 1974 Chairman of the Board and
Chief Executive Officer
William S. Shanahan 53 1983 President and Chief
Operating Officer
Robert M. Agate 58 1985 Senior Executive Vice
President and Chief
Financial Officer
William G. Cooling 49 1981 Chief of Operations, Specialty
Marketing and International
Business Development
Lois D. Juliber 45 1991 Chief Technological Officer
Silas M. Ford 56 1983 Executive Vice President
Office of the Chairman
Andrew D. Hendry 46 1991 Senior Vice President
General Counsel and
Secretary
Douglas M. Reid 59 1990 Senior Vice President
Global Human Resources
John E. Steel 64 1991 Senior Vice President
Global Business Development
Edgar J. Field 54 1991 President, International
Business Development
Edward T. Fogarty 57 1991 President, Colgate-
USA/Canada/Puerto Rico
David A. Metzler 51 1991 President, Colgate-Europe
Michael J. Tangney 49 1993 President, Colgate-Latin
America
Craig B. Tate 48 1989 President, Colgate-Asia
Robert C. Wheeler 52 1991 President, Hill's Pet
Nutrition, Inc.
8
Date First
Elected
Name Age Officer Present Title
Steven R. Belasco 47 1991 Vice President
Taxation
Brian J. Heidtke 53 1986 Vice President
Finance and Corporate
Treasurer
Peter D. McLeod 53 1984 Vice President
Manufacturing Engineering
Technology
Stephen C. Patrick 44 1990 Vice President
Corporate Controller
Michael S. Roskothen 57 1993 Vice President
Global Business Development -
Oral Care
Each of the executive officers listed above has served the registrant or
its subsidiaries in various executive capacities for the past five years,
except Douglas M. Reid and Andrew D. Hendry. Douglas M. Reid served as
Senior Vice President and Senior Staff Officer at Xerox prior to joining the
Company in 1990. Andrew D. Hendry was Vice President, General Counsel for
UNISYS prior to joining the Company in 1991.
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.
ITEM 11. EXECUTIVE COMPENSATION
The information set forth in the Proxy Statement for the 1994 Annual
Meeting is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
(a) Security ownership of management set forth in the Proxy Statement
for the 1994 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 under the caption "Election of Directors" in the
Proxy Statement for the 1994 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 12 of this
report in the section entitled "Financial Statements for the year ended
December 31, 1993 and Other Supplementary Data".
(b) Exhibits. See the exhibit Index which is located on Page 47.
(c) Reports on Form 8-K . None.
9
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)
Date March 24, 1994 By /s/ REUBEN MARK
Reuben Mark
Chairman of the Board
and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
(a) Principal Executive Officer (c)Principal Accounting Officer
/s/ REUBEN MARK /s/ STEPHEN C. PATRICK
Reuben Mark Stephen C. Patrick
Chairman of the Board Vice President
and Chief Executive Officer Corporate Controller
Date March 24, 1994 Date March 24, 1994
(b) Principal Financial Officer (d)Directors:
/s/ ROBERT M. AGATE Vernon R. Alden, Jill K. Conway,
Robert M. Agate Ronald E. Ferguson, Ellen M. Hancock,
Senior Executive Vice President David W. Johnson, John P. Kendall,
and Chief Financial Officer Delano E. Lewis, Reuben Mark,
Howard B. Wentz, Jr.
Date March 24, 1994 By /s/ ANDREW D. HENDRY
Andrew D. Hendry
as Attorney-in-Fact
Date March 24, 1994
10
United States
Securities and Exchange Commission
Washington , D.C. 20549
FORM 10-K
FINANCIAL STATEMENTS
For The Year Ended December 31, 1993
and Other Supplementary Data
COLGATE-PALMOLIVE COMPANY
NEW YORK, NEW YORK 10022
11
COLGATE-PALMOLIVE COMPANY
Index to Financial Statements
Page
Supplementary Data
Scope of Business 13
Geographic Area Data 13
Industry Segment Data 14
Market and Dividend Information 15
Quarterly Financial Data 16
Financial Statements
Consolidated Statement of Income for the years
ended December 31, 1993, 1992 and 1991 17
Consolidated Balance Sheet at December 31, 1993
and 1992 18
Consolidated Statement of Retained Earnings and
Changes in Capital Accounts for the years ended
December 31, 1993, 1992 and 1991 19
Consolidated Statement of Cash Flows for the years
ended December 31, 1993, 1992 and 1991 20
Notes to Consolidated Financial Statements 21 - 33
Financial Statement Schedules for the years ended
December 31, 1993, 1992 and 1991:
V Property, Plant and Equipment 34 - 36
VI Accumulated Depreciation of Property,
Plant and Equipment 37 - 39
VIII Valuation and Qualifying Accounts 40 - 42
IX Short-Term Borrowings 43
Report of Independent Public Accountants 44
Selected Financial Data
Historical Financial Summary 45
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.
12
COLGATE-PALMOLIVE COMPANY
Scope of Business
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 Specialty Marketing. Oral, Personal and Household Care
products include toothpastes, oral rinses and toothbrushes, bar and liquid
soaps, shampoos, conditioners, deodorants and antiperspirants, baby and
shave products, laundry and dishwashing detergents, fabric softeners,
cleansers and cleaners, bleach, and other similar items. Specialty
Marketing products include pet dietary care products, crystal tableware,
and portable fuel for warming food. Principal global trademarks and
tradenames include Colgate, Palmolive, Mennen, Ajax, Fab and Science Diet
in addition to various regional tradenames.
The Company's principal classes of products accounted for the following
percentages of worldwide sales for the past three years:
1993 1992 1991
Oral Care 25% 23% 22%
Personal Care 24% 23% 18%
Household Surface Care 17% 18% 20%
Fabric Care 19% 20% 23%
Pet Dietary Care 11% 10% 11%
Company 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. Product quality, brand
recognition and acceptance, and marketing capability largely determine
success in the Company's business segments.
As shown in the geographic area data that follow, more than half of the
Company's net sales, operating profit and identifiable assets are
attributable to overseas operations. Export sales and transfers between
geographic areas are not significant.
Geographic Area Data
Dollars in Millions 1993 1992 1991
Net sales:*
United States and Canada $2,533.1 $2,556.2 $2,195.9
Europe 1,903.7 2,168.4 1,968.7
Latin America 1,525.8 1,315.2 1,075.4
Asia and Africa 1,178.7 967.4 820.3
$7,141.3 $7,007.2 $6,060.3
Operating profit:
United States and Canada $332.3 $324.5 $98.8**
Europe 171.8 189.3 25.8**
Latin America 249.6 191.6 113.4**
Asia and Africa 134.7 90.7 65.2**
$888.4 $796.1 $303.2**
Identifiable assets:
United States and Canada $2,861.0 $2,673.9 $1,942.8
Europe 1,197.1 1,313.7 1,243.6
Latin America 804.4 682.1 526.0
Asia and Africa 698.4 471.4 454.5
$5,560.9 $5,141.1 $4,166.9
___________________________________________________________________________
*Certain amounts have been reclassified to conform with the 1993
presentation.
**Operating profit for geographic area data in 1991 includes the effect of
the charge for restructured operations of $340.0. The effects on
geographic area data in 1991 were to reduce the operating profit of USA/
Canada, Europe, Latin America and Asia/Africa by $154.0, $131.9, $19.4
and $14.4, respectively.
13
COLGATE-PALMOLIVE COMPANY
Industry Segment Data
Dollars in Millions 1993 1992 1991
Net sales:
Oral, Personal and Household Care $6,243.2 $6,162.0 $5,260.6
Specialty Marketing 898.1 845.2 799.7
$7,141.3 $7,007.2 $6,060.3
Operating profit:
Oral, Personal and Household Care $731.5 $653.2 $202.8*
Specialty Marketing 156.9 142.9 100.4*
888.4 796.1 303.2*
Earnings from equity investments 7.4 21.7 20.9
Unallocated expenses, net (59.6)** (89.9)** (106.2)**
Income before income taxes $836.2 $727.9 $217.9*
Identifiable assets:
Oral, Personal and Household Care $5,053.0 $4,664.8 $3,695.7
Specialty Marketing 507.9 476.3 471.2
5,560.9 5,141.1 4,166.9
Corporate assets 200.3 293.0 343.7
Total assets $5,761.2 $5,434.1 $4,510.6
Capital expenditures:
Oral, Personal and Household Care $339.5 $290.8 $208.9
Specialty Marketing 24.8 27.7 51.8
$364.3 $318.5 $260.7
Depreciation and amortization:
Oral, Personal and Household Care $187.6 $172.2 $133.7
Specialty Marketing 22.0 20.3 12.5
$209.6 $192.5 $146.2
___________________________________________________________________________
*Operating profit for industry segment data in 1991 includes the effect of
the charge for restructured operations of $340.0. The operating profit
of the Oral, Personal and Household Care and Specialty Marketing segments
were reduced by $291.8 and $27.9, respectively.
**Net unallocated expenses include general corporate expense and income,
net interest and a $20.3 charge in 1991 related to restructured
operations.
14
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 31 consecutive years.
Market Price
Common Stock $4.25 Preferred Stock
1993 1992 1993 1992
Quarter
Ended High Low High Low High Low High Low
March 31 $67.25 $54.25 $50.75 $45.13 $75.50 $63.50 $64.00 $61.00
June 30 66.38 52.63 53.50 45.63 77.00 73.00 64.50 60.75
September 30 59.00 46.75 58.00 50.25 77.50 73.50 66.50 62.75
December 31 62.75 52.50 60.63 55.63 76.50 72.00 65.50 63.00
Closing Price $62.38 $55.75 $73.50 $64.50
Dividends Paid Per Share
Quarter Ended 1993 1992 1993 1992
March 31 $.310 $.265 $1.0625 $1.0625
June 30 .310 .265 1.0625 1.0625
September 30 .360 .310 1.0625 1.0625
December 31 .360 .310 1.0625 1.0625
Total $1.34 $1.15 $4.25 $4.25
15
COLGATE-PALMOLIVE COMPANY
Quarterly Financial Data (Unaudited)
Dollars in Millions
Except Per Share Amounts
First Second Third Fourth
Quarter Quarter Quarter Quarter Year
1993
Net sales $1,702.7 $1,775.1 $1,823.1 $1,840.4 $7,141.3
Gross profit 814.8 851.2 870.1 875.3 3,411.4
Income before
changes in
accounting 140.8 142.4 142.8 122.1 548.1
Net (loss)income (1) (217.4) 142.4 142.8 122.1 189.9
Earnings per
common share
before changes
in accounting:
Primary .85 .86 .89 .78 3.38
Assuming full
dilution .79 .81 .82 .73 3.15
(Loss)earnings
per common
share:(2)
Primary (1.39) .86 .89 .78 1.08
Assuming full
dilution (1.25) .81 .82 .73 1.05
1992
Net sales $1,600.5 $1,799.6 $1,835.8 $1,771.3 $7,007.2
Gross profit 755.1 848.0 864.8 830.9 3,298.8
Net income 113.8 124.4 128.8 110.0 477.0
Earnings per
common share:(2)
Primary .74 .75 .78 .66 2.92
Assuming full
dilution .68 .70 .73 .62 2.74
(1)Reflects a first quarter 1993 charge for changes in accounting for
Other Postretirement Benefits, Postemployment Benefits and Income Taxes
of $358.2.
(2)The sum of the quarterly earnings per share amounts in 1993 and 1992 is
not equal to the full year because the computations of the weighted
average number of shares outstanding and the potential impact of
dilutive securities for each quarter and for the full year are made
independently.
16
COLGATE-PALMOLIVE COMPANY
Consolidated Statement of Income
Dollars in Millions Except Per Share Amounts
1993 1992 1991
Net sales $7,141.3 $7,007.2 $6,060.3
Cost of sales 3,729.9 3,708.4 3,296.3
Gross profit 3,411.4 3,298.8 2,764.0
Selling, general and administrative
expenses 2,457.1 2,500.2 2,142.4
Provision for restructured
operations - - 340.0
Other expense (income) 71.3 20.7 (1.0)
Interest expense, net of interest
income of $22.7, $28.1 and $33.4,
respectively 46.8 50.0 64.7
Income before income taxes 836.2 727.9 217.9
Provision for income taxes 288.1 250.9 93.0
Income before changes in accounting 548.1 477.0 124.9
Cumulative effect on prior years of
accounting changes (358.2) - -
Net income $189.9 $477.0 $124.9
Earnings per common share, primary:
Income before changes in accounting $3.38 $2.92 $.77
Cumulative effect on prior years of
accounting changes (2.30) - -
Net income $1.08 $2.92 $.77
Earnings per common share,
assuming full dilution:
Income before changes in accounting $3.15 $2.74 $.75
Cumulative effect on prior years of
accounting changes (2.10) - -
Net income $1.05 $2.74 $.75
See Notes to Consolidated Financial Statements.
17
COLGATE-PALMOLIVE COMPANY
Consolidated Balance Sheet
Dollars in Millions Except Per Share Amounts
1993 1992
Assets
Current Assets
Cash and cash equivalents $144.1 $117.9
Marketable securities 67.1 102.6
Receivables, net 988.3 876.5
Inventories 678.0 695.6
Other current assets 192.9 202.5
Total current assets 2,070.4 1,995.1
Property, plant and equipment, net 1,766.3 1,596.8
Goodwill and other intangible
assets, net 1,589.0 1,430.5
Other assets 335.5 411.7
$5,761.2 $5,434.1
Liabilities and Shareholders' Equity
Current Liabilities
Notes and loans payable $169.4 $132.0
Current portion of long-term debt 15.5 59.4
Accounts payable 599.3 563.0
Accrued income taxes 59.4 33.9
Other accruals 550.4 571.2
Total current liabilities 1,394.0 1,359.5
Long-term debt 1,532.4 946.5
Deferred income taxes 266.2 171.3
Other liabilities 693.6 337.0
Shareholders' Equity
Preferred stock 414.3 418.3
Common stock, $1 par value
(500,000,000 shares authorized,
183,213,295 shares issued) 183.2 183.2
Additional paid-in capital 1,000.9 985.3
Retained earnings 2,163.4 2,204.9
Cumulative translation adjustments (372.9) (308.5)
3,388.9 3,483.2
Unearned compensation (389.9) (396.1)
Treasury stock, at cost (1,124.0) (467.3)
Total shareholders' equity 1,875.0 2,619.8
$5,761.2 $5,434.1
See Notes to Consolidated Financial Statements.
18
COLGATE-PALMOLIVE COMPANY
Consolidated Statement of Retained Earnings
Dollars in Millions 1993 1992 1991
Balance, January 1 $2,204.9 $1,928.6 $1,960.8
Add:
Net income 189.9 477.0 124.9
2,394.8 2,405.6 2,085.7
Deduct:
Dividends declared:
Series B Convertible Preference
Stock, net of income taxes 21.1 20.2 20.3
Preferred stock .5 .5 .5
Common stock 209.8 180.0 136.3
231.4 200.7 157.1
Balance, December 31 $2,163.4 $2,204.9 $1,928.6
Consolidated Statement of Changes in Capital Accounts
Additional
Common Stock Paid-In Treasury Stock
Dollars in Shares Amount Capital Shares Amount
Millions
Balance, January
1, 1991 133,207,216 $171.1 $123.6 37,940,242 $706.5
Shares issued
through public
offering 11,500,000 - 230.9 (11,500,000) (214.6)
Shares issued in
connection with
acquisitions 1,571,730 - 33.3 (1,571,730) (29.3)
Shares issued
for stock options 1,238,377 .4 14.6 (827,203) (15.4)
Treasury stock
acquired (188,245) - - 188,245 .2
Other 14,258 - 9.0 (14,258) .3
Balance,
December 31, 1991 147,343,336 171.5 411.4 24,215,296 447.7
Shares issued in
connection with
acquisition 11,648,693 11.7 532.4 - -
Shares issued
for stock options 2,441,044 - 9.5 (2,441,044) (46.6)
Treasury stock
acquired (976,983) - - 976,983 54.0
Other (215,686) - 32.0 221,656 12.2
Balance,
December 31, 1992 160,240,404 183.2 985.3 22,972,891 467.3
Shares issued
for stock options 1,408,105 - 9.6 (1,408,105) (34.7)
Treasury stock
acquired (12,610,423) - - 12,610,423 698.1
Other 218,517 - 6.0 (218,517) (6.7)
Balance,
December 31, 1993 149,256,603 $183.2 $1,000.9 33,956,692 $1,124.0
See Notes to Consolidated Financial Statements.
19
COLGATE-PALMOLIVE COMPANY
Consolidated Statement of Cash Flows
Dollars in Millions
1993 1992 1991
Operating Activities
Net Income $189.9 $477.0 $124.9
Adjustments to reconcile net
income to net cash provided by
operations:
Cumulative effect on prior
years of accounting changes 358.2 - -
Restructured operations, net (77.0) (92.0) 319.0
Depreciation and amortization 209.6 192.5 146.2
Deferred income taxes and
other liabilities 53.6 (25.8) (38.4)
Cash effects of changes in:
Receivables (103.6) (38.0) (58.2)
Inventories 31.7 28.4 45.8
Other current assets (4.6) 10.6 (11.9)
Payables and accruals 52.6 (10.0) (41.7)
Net cash provided by
operations 710.4 542.7 485.7
Investing Activities
Capital expenditures (364.3) (318.5) (260.7)
Payment for acquisitions, net of
cash acquired (171.2) (170.1) (269.6)
Sale of marketable securities
and other investments 33.8 79.9 36.8
Investments in less-than-majority-
owned companies and other (12.5) (6.6) (12.7)
Other, net 61.7 17.4 (30.1)
Net cash used for investing
activities (452.5) (397.9) (536.3)
Financing Activities
Principal payments on debt (200.8) (250.1) (311.4)
Proceeds from issuance of debt, net 782.1 262.6 51.0
Proceeds from outside investors 60.0 - -
Dividends paid (231.4) (200.7) (157.1)
Purchase of common stock (657.2) (20.5) (.2)
Proceeds from issuance of common
stock - - 445.5
Proceeds from exercise of stock
options 21.8 22.6 30.4
Net cash (used for) provided by
financing activities (225.5) (186.1) 58.2
Effect of exchange rate changes on
cash and cash equivalents (6.2) (9.3) (5.5)
Net increase (decrease) in cash
and cash equivalents 26.2 (50.6) 2.1
Cash and cash equivalents at
beginning of year 117.9 168.5 166.4
Cash and cash equivalents at end
of year $144.1 $117.9 $168.5
See Notes to Consolidated Financial Statements.
20
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements
Dollars in Millions Except Per Share Amounts
1. 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
income in the Consolidated Statement 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 trade
promotion allowances.
Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of
three months or less when purchased to be cash equivalents for purposes
of the Consolidated Balance Sheet and the Consolidated Statement of Cash
Flows. Investments in short-term securities that do not meet the
definition of cash equivalents are classified as marketable securities in
the Consolidated Balance Sheet. Marketable securities are reported at
cost, which approximates market.
Inventories
Inventories are valued at the lower of cost or market. The last-in,
first-out (LIFO) method is used to value substantially all inventories in
the U.S. as well as in certain overseas locations. The remaining
inventories are valued using the first-in, first-out (FIFO) 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
Goodwill represents the excess of purchase price over the fair value of
identifiable tangible and intangible net assets of businesses acquired.
Goodwill and other intangibles are amortized on a straight-line basis
over periods not exceeding 40 years.
Income Taxes
Effective January 1, 1993, 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.
Postretirement and Postemployment Benefits
Effective January 1, 1993, the cost of postretirement health care and
other benefits is actuarially determined and accrued over the service
period of covered employees.
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.
21
For subsidiaries operating in highly inflationary environments,
inventories 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.
Geographic Areas and Industry Segments
The financial and descriptive information on the Company's geographic
area and industry segment data, appearing on pages 13 and 14 of this report,
is an integral part of these financial statements.
2. Acquisitions
In October 1993, the Company acquired the liquid hand and body soap
brands of S.C. Johnson Wax in Europe, the South Pacific and other
international locations. During the year, the Company also acquired the
Cristasol glass cleaner business in Spain, increased ownership of its
Indian operation to majority control and made other investments. The
aggregate purchase price of all 1993 acquisitions was $222.5.
In March 1992, the Company acquired The Mennen Company ("Mennen") for an
aggregate purchase price of $670.0, paid with 11.6 million unregistered
shares of the Company's common stock and $127.0 in cash. The acquisition
included Mennen's personal care products business and businesses held for
sale that were sold in August 1992. The results of operations of Mennen
have been included in the Consolidated Financial Statements since March
27, 1992.
During 1992, the Company also acquired the remaining interest in Viset,
an Italian manufacturer of consumer products, and established significant
ownership positions in joint ventures in China and Eastern Europe. The
aggregate purchase price of all 1992 acquisitions was $718.4.
During 1991, the Company acquired the Murphy-Phoenix Company, which owned
an all-purpose cleaner business. Internationally, the Company acquired
the Plax antiplaque mouthwash business for worldwide markets excluding
the U.S., Canada and Puerto Rico, the remaining interest in the Unisol
Group of Companies in Portugal, the personal care business of ICI in
Australia, a majority interest in Haci Sakir, a soap and body care
business in Turkiye, and the Brazilian Pinesol household cleaner
business. The aggregate purchase price of 1991 acquisitions was $339.4.
All of these acquisitions have been 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 of
the respective acquisitions. The results of operations have been
included in the Consolidated Financial Statements since the respective
acquisition dates. The inclusion of pro forma financial data for these
acquisitions prior to the dates of acquisition would not have materially
affected reported results.
3. Restructured Operations
In September 1991, the Company announced a manufacturing and
organizational restructuring program designed to capitalize on
opportunities created by movement to common markets in Europe and North
America, more sophisticated and efficient manufacturing techniques, and
consolidation opportunities created by several acquisitions around the
world. The program included organizational realignments, manufacturing
reconfigurations and the write-down of certain property, plant and
equipment. As a result, the Company recorded a pretax charge of $340.0
($243.0 aftertax or $1.80 per share) in 1991.
22
4. Long-Term Debt and Credit Facilities
Long-term debt consists of the following at December 31:
1993 1992
ESOP serial notes, guaranteed by the
Company, due from 2001 through 2009
at interest rates ranging from 8.2%
to 8.9% $398.6 $402.0
Medium term notes due from 1995
through 2003 at interest rates
ranging from 5.5% to 7.2% 397.2 168.3
Commercial paper at interest rates
ranging from 3.2% to 3.3% 586.1 90.2
9.98% debentures due 2017 32.0 106.1
12.43% Canadian dollar notes due 2030 67.6 76.2
8.9% Swiss franc notes - 50.0
Other 66.4 113.1
1,547.9 1,005.9
Less: Current portion of long-term debt 15.5 59.4
$1,532.4 $946.5
Other debt consists of capitalized leases and individual fixed and
floating rate issues of less than $50.0 with various maturities.
Scheduled maturities of debt outstanding at December 31, 1993, exclusive
of capitalized lease obligations, are as follows: 1994 - $13.5; 1995 -
$37.5; 1996 - $38.1; 1997 - $46.8, and 1998 - $52.4. Commercial paper is
classified as long-term debt in accordance with the Company's intent and
ability to refinance such obligations on a long-term basis.
At December 31, 1993, the Company had unused credit facilities amounting
to $1,303.2. Included in this total is a $460.0 revolving credit
facility that provides for general corporate borrowings and expires in
March 1995. Interest on borrowings under the agreement is based on Base
(Prime) rates, Certificate of Deposit rates or Eurodollar rates. No
borrowings were outstanding under this credit agreement at December 31,
1993. Commitment fees related to credit facilities are not material.
The Company has entered into various foreign exchange contracts to hedge
currency exposures associated with its net investment in foreign
operations, intercompany loans and other foreign currency transactions.
At December 31, 1993, the outstanding net face amounts of these contracts
totaled approximately $440.7.
The Company has also entered into a series of interest rate swap
agreements with banks having a total notional principal amount of $447.0
with maturity dates through 2023. The contracts enable the Company to
change the effective interest rate on its debt according to corporate
needs and market conditions.
23
5. Leases
At December 31, 1993, future minimum rental payments under capital and
operating leases were as follows:
Year Ending December 31, Capital Operating
1994 $2.5 $63.7
1995 2.0 55.1
1996 1.7 45.9
1997 .8 37.0
1998 .4 32.8
Later years .9 63.7
Total minimum lease payments 8.3 298.2
Less: Minimum sublease rental income - 19.7
Net minimum lease payments 8.3 $278.5
Less: Interest and executory costs 1.2
Present value of net minimum lease payments $7.1
Rent expense for all operating leases totaled $91.5 in 1993 and $80.3 in
1992 and 1991.
6 Capital Stock and Stock Option 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 and is outstanding. Dividends on the
$4.25 Preferred Stock are cumulative. Under the provisions of the
Certificate of Incorporation, the Preferred Stock is subject to
redemption only at the option of the Company.
Preference Stock
In 1988, the Company's Certificate of Incorporation was amended to
authorize the issuance of a new class of preferred stock consisting of
50,000,000 shares of Preference Stock, without par value. The Preference
Stock, which is convertible into two shares of common stock, ranks junior
to all series of the Preferred Stock with respect to the payment of
dividends and the distribution of assets of the Company. At December 31,
1993 and 1992, 6,181,480 and 6,242,765 shares of Preference Stock,
respectively, were outstanding and issued to the Company's ESOP.
Common Stock
In March 1992, the Company issued 11,648,693 unregistered shares of its
common stock in connection with acquiring Mennen. Certain registration
rights were granted for a portion of the shares issued in connection with
the transaction.
In November 1991, the Company issued an additional 11,500,000 common
shares through a public offering and simultaneously retired 11,500,000
shares of treasury stock. In connection with acquiring The Murphy-Phoenix
Company, the Company also issued 1,571,730 shares of its common stock.
At December 31, 1993 and 1992, 507,855 and 476,185 shares, respectively,
were held for distribution under the Executive Incentive Compensation
Plan, which provides for cash and common stock awards for officers and
other executives of the Company and its major subsidiaries. The cost of
these shares totaled $22.7 at December 31, 1993 and $17.0 at December 31,
1992.
In October 1988, the Board of Directors authorized the redemption of the
then outstanding common stock purchase rights for a total of $6.9. A new
rights plan was adopted, and stockholders received a distribution of one
Preference Share Purchase Right ("Right") for each outstanding share of
the Company's common stock. Each Right entitles stockholders to buy one
two-hundredth interest in a share of a new series of preference stock at
an exercise price of $87.50. Each interest is designed to make it the
economic equivalent of one share of common stock. A Right is exercisable
only if a person or group acquires 20% 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 20% or more of the common stock.
24
If the Company is acquired in a merger or other business combination
transaction, each Right will entitle its holder to purchase, at the
Right's then current exercise price, a number of the acquiring company's
common shares having a market value at that time of twice the Right's
exercise price. In addition, if a person or group acquires 30% or more
of the Company's outstanding common stock, otherwise than pursuant to a
cash tender offer for all shares in which such person or group increases
its stake from below 20% to 80% or more of the outstanding shares, 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 30% or more (but less than 50%) of the Company's outstanding
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.
Prior to the acquisition by a person or group of beneficial ownership of
20% or more of the Company's common stock, each Right is redeemable at
the option of the Board of Directors at a price of $.005.
The Board of Directors is also authorized to reduce the 20% and 30%
thresholds referred to above to not less than 15%. The new Rights will
expire on October 24, 1998. There were 149,256,603 Preference Share
Purchase Rights outstanding at December 31, 1993 and 160,240,404 at
December 31, 1992.
Stock Option Plans
The Company's 1987 Stock Option Plan provides for the issuance of non-
qualified stock options to officers and key employees. The non-qualified
stock options permit optionees to acquire common stock of the Company
upon payments of cash or stock.
Options are granted at prices not less than the fair market value on the
date of grant. At December 31, 1993, 6,726,478 shares were available for
future grants. The Company's 1977 Stock Option Plan terminated during
1987, except as to options granted.
During 1992, an Accelerated Ownership feature was added to the 1987 Stock
Option Plan. The Accelerated Ownership feature 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:
1993 1992
Options outstanding, January 1 8,204,191 8,284,229
Granted 2,925,639 2,441,173
Exercised (1,408,105) (2,441,044)
Canceled or expired (95,331) (80,167)
Options outstanding, December 31 9,626,394 8,204,191
Options exercisable at December 31 5,381,106 4,998,140
Option price range at exercise $10.03 to $56.31 $9.34 to $42.56
Option price range at December 31 $11.88 to $99.79 $10.03 to $60.13
25
7. Employee Stock Ownership Plan
In 1989, the Company expanded its employee stock ownership plan (ESOP)
through the introduction of a leveraged ESOP covering 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 8.6%.
The long-term notes, which are guaranteed by the Company, are recorded on
the accompanying Consolidated Balance Sheet. 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 semi-annual dividends equal to the higher
of $2.44 or the current dividend paid on two common shares for the
comparable six-month period. Each share may be converted by the Trustee
into two shares of common stock.
Dividends on these preferred shares, as well as common shares also held
by the ESOP, are paid to the ESOP trust and, together with Company
contributions, are used by the ESOP to repay principal and interest on
the outstanding 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, 1993, 860,469 shares were allocated to participant
accounts.
Dividends on these preferred shares are deductible for income tax
purposes and, accordingly, are reflected net of their tax benefit in the
Consolidated Statement of Retained Earnings.
Annual expense related to the leveraged ESOP, determined as interest
incurred on the notes, less 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 $7.9 in 1993, $8.1 in 1992 and $6.9 in
1991. 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 amounted to $34.5 in 1993, $35.1 in
1992 and $35.3 in 1991. The Company paid dividends on the stock held by
the ESOP of $32.7 in 1993, $32.8 in 1992 and $34.0 in 1991. Company
contributions to the ESOP were $5.7 in 1993, $5.6 in 1992 and $4.9 in
1991.
8. Retirement Plans and Other Postretirement Benefits
Retirement Plans
The Company, its U.S. subsidiaries and a majority of its overseas
subsidiaries maintain pension plans covering substantially all of their
employees. Most plans provide pension benefits that are based primarily
on years of service and employees' career earnings. In the Company's
principal U.S. plans, funds are contributed to trustees as necessary to
provide for current service and for any unfunded projected benefit
obligation over a reasonable period. To the extent these requirements
are exceeded by plan assets, a contribution may not be made in a
particular year. Plan assets consist principally of common stocks,
deposit administration contracts with insurance companies, investments in
real estate funds and U.S. Government obligations.
26
Net periodic pension expense includes the following components:
1993 1992 1991
U.S. Overseas U.S. Overseas U.S. Overseas
Plans Plans Plans Plans Plans Plans
Service cost -
benefits earned
during the period $18.7 $12.3 $17.9 $12.4 $15.7 $10.5
Interest cost on
projected benefit
obligation 64.2 15.4 62.0 16.7 56.4 15.3
Actual return on
plan assets (95.2) (15.2) (87.6) (12.0) (65.9) (14.9)
Net amortization
and deferral 19.5 7.1 9.6 2.7 (10.9) 6.3
Net pension
expense (income) $7.2 $19.6 $1.9 $19.8 $(4.7) $17.2
The following table sets forth the funded status of the plans at December
31:
1993 1992
U.S. Overseas U.S. Overseas
Plans Plans Plans Plans
Plan assets at fair value $809.2 $126.6 $771.1 $112.1
Actuarial present value of
benefit obligations:
Vested obligation 744.6 170.1 637.2 149.4
Nonvested obligation 54.5 19.0 53.7 20.0
Accumulated benefit obligation 799.1 189.1 690.9 169.4
Additional benefits related
to assumed future
compensation levels 112.8 38.5 108.4 37.1
Projected benefit obligation 911.9 227.6 799.3 206.5
Plan assets (less than)
projected benefit
obligation (102.7) (101.0) (28.2) (94.4)
Deferral of net actuarial
changes and other, net 182.2 11.6 104.3 6.8
Unrecognized prior
service cost 26.8 2.0 30.9 2.2
Unrecognized transition
asset (45.6) (4.9) (49.0) (7.3)
Additional liability (6.2) (1.2) - -
Prepaid (accrued) pension
cost recognized in the
Consolidated Balance Sheet $54.5 $(93.5) $58.0 $(92.7)
27
The actuarial assumptions used to determine the above data were as
follows:
U.S. Plans Overseas Plans
1993 1992 1991 1993 1992 1991
Settlement
rates 7.25% 8.25% 8.25% 6.5% to 14.5% 7.5% to 16.0% 7.5% to 16.0%
Long-term
rates of
compensation
increase 5.75% 6.0% 6.0% 4.0% to 13.0% 5.0% to 14.5% 5.0% to 14.5%
Rates of
return on
plan assets 9.25% 9.75% 10.0% 7.5% to 15.0% 7.5% to 16.5% 7.5% to 16.0%
Other Postretirement and Postemployment Benefits
The Company and certain of its subsidiaries provides health care and life
insurance benefits for retired employees to the extent not provided by
government-sponsored plans.
Effective January 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions" (SFAS 106). SFAS 106 requires the Company to change its method of
accounting for its postretirement life and health care benefits provided to
retirees from the "pay-as-you-go" basis to accruing such costs over the working
lives of the employees. The Company elected to recognize this change in
accounting on the immediate recognition basis and utilizes a portion of its
leveraged ESOP, in the form of future retiree contributions, to reduce its
obligation to provide these postretirement benefits. Postretirement benefits
currently are not funded. The Company also adopted SFAS 112, "Employers'
Accounting for Postemployment Benefits." SFAS 112 requires accrual accounting
for the estimated cost of benefits provided to former or inactive employees
after employment but before retirement.
The cumulative effect on prior years of adopting SFAS 106 and 112 as of
January 1, 1993 resulted in a pretax charge of $195.7 ($129.2 aftertax or
$.83 per share) of which $189.5 related to SFAS 106 and $6.2 related to SFAS
112. This non-cash charge represents the accumulated benefit obligation net
of related accruals previously recorded by the Company.
Postretirement benefits expense for 1993 included the following components:
Service cost-benefits earned
during the period $ 3.7
Annual ESOP allocation (6.2)
Interest cost on accumulated
postretirement benefit
obligation 16.4
Net postretirement expense $13.9
The cash cost to the Company for postretirement benefits in 1992 and 1991,
excluding acquisitions, approximated $11.2 and $11.8, respectively. The
pro forma effects of retroactive application of this mandated change in
accounting were not determinable.
28
The postretirement benefit obligation included in Other liabilities in the
Consolidated Balance Sheet at December 31, 1993 was comprised of the
following components:
Actuarial present value of postretirement benefit
obligations:
Retirees $155.2
Active participants eligible
for retirement 11.3
Other active participants 25.1
Accumulated postretirement
benefit obligation 191.6
Unrecognized net gain 14.2
Accrued postretirement
benefit liability $205.8
The principal actuarial assumptions used in the measurement of the
accumulated benefit obligation were as follows:
Discount rate 7.25%
Current medical cost trend rate 10.00%
Ultimate medical cost trend rate 5.00%
Medical cost trend rate decreases
ratably to ultimate in year 2001
ESOP growth rate 10.00%
The cost of these postretirement medical benefits is dependent upon a number
of factors, the most significant of which is the rate at which medical costs
increase in the future. The effect of a 1% increase in the assumed medical
cost trend rate would increase the accumulated postretirement benefit
obligation by approximately $20.2; annual expense would not be materially
affected.
9. Income Taxes
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109).
The one-time non-cash charge for the recalculation of income taxes was
$229.0 ($1.47 per share), primarily as a result of the 1992 acquisition
of Mennen. Prior years' financial statements have not been restated to
apply the provisions of SFAS 109.
The provision for income taxes on income before changes in accounting
consists of the following for the years ended December 31:
1993 1992 1991
United States $ 75.9 $ 70.3 $ (.2)
Overseas 212.2 180.6 93.2
$288.1 $250.9 $93.0
29
Differences between accounting for financial statement purposes and
accounting for tax purposes result in taxes currently payable (lower)
higher than the total provision for income taxes as follows:
1993 1992 1991
Excess of tax over book
depreciation $(18.7) $(18.0) $(19.8)
Net restructuring
(spending) accrual (24.2) (22.0) 86.0
Other, net (13.8) (9.4) (9.4)
$(56.7) $(49.4) $56.8
In addition, tax benefits of $21.3 in 1993 were recorded directly through
equity.
The components of income before income taxes are as follows for the three
years ended December 31:
1993 1992 1991
United States $256.9 $247.6 $51.3
Overseas 579.3 480.3 166.6
$836.2 $727.9 $217.9
The difference between the statutory United States federal income tax
rate and the Company's global effective tax rate as reflected in the
Consolidated Statement of Income is as follows:
% of Income Before Tax 1993 1992 1991
Tax at U.S. statutory rate 35.0% 34.0% 34.0%
State income taxes, net of
federal benefit .7 1.0 .1
Restructured operations - - 8.6
Earnings taxed at other than
U.S. statutory rate (.2) .3 .9
Other, net (1.0) (.8) (.9)
Effective tax rate 34.5% 34.5% 42.7%
The components of deferred taxes at December 31, 1993 are as follows:
1993
Current assets:
Accrued liabilities $74.9
Other (net) 16.2
91.1
Noncurrent assets (liabilities):
Intangible assets (213.6)
Property, plant and
equipment (165.7)
Postretirement and
postemployment
benefits 73.5
Restructuring 33.3
Tax loss and tax credit
carryforwards 63.3
Other (net) (28.7)
(237.9)
Less: valuation allowance (28.3)
(266.2)
Deferred taxes, net $(175.1)
30
10. Foreign Currency Translation
Cumulative translation adjustments, which represent the effect of
translating assets and liabilities of the Company's non-U.S. entities,
except those in highly inflationary economies, were as follows:
1993 1992 1991
Balance, January 1 $(308.5) $(216.9) $(200.6)
Effect of balance sheet
translations (64.4) (91.6) (16.3)
Balance, December 31 $(372.9) $(308.5) $(216.9)
Foreign currency charges, resulting from the translation of balance
sheets of subsidiaries operating in highly inflationary environments and
from foreign currency transactions, were not material in 1993, 1992 and
1991.
11. Earnings Per Share
Primary earnings per share are determined by dividing net income, after
deducting preferred stock dividends net of related tax benefits ($21.6
net in 1993, $20.7 net in 1992 and $20.8 net in 1991), by the weighted
average number of common shares outstanding (155.9 million in 1993, 156.5
million in 1992 and 135.3 million in 1991).
Fully diluted earnings per common share are calculated assuming the
conversion of all potentially dilutive securities, including convertible
preferred stock and outstanding options, unless the effect of such
conversion is antidilutive. This calculation also assumes, if
applicable, reduction of available income by pro forma ESOP replacement
funding, net of income taxes.
12. Supplemental Cash Flow Information
1993 1992 1991
Income taxes paid $216.4 $178.1 $122.7
Interest paid $59.1 $68.7 $88.3
Non-cash consideration in
payment for acquisitions $36.3 $859.8 $75.9
ESOP debt, guaranteed by the
Company $(3.4) $(3.0) $(2.5)
13. Other Income Statement Information
Other expense (income), consists of the following for the years ended
December 31:
1993 1992 1991
Amortization of intangibles $51.2 $47.7 $23.9
Earnings from equity
investments (7.4) (21.7) (20.9)
Minority interest 27.5 2.1 3.3
Other - (7.4) (7.3)
$71.3 $20.7 $(1.0)
The following is a comparative summary of certain expense information for
the years ended December 31:
1993 1992 1991
Interest incurred $81.3 $86.5 $114.2
Interest capitalized 11.8 8.4 16.1
Interest expense $69.5 $78.1 $98.1
Research and development $139.9 $125.8 $114.2
Maintenance and repairs $107.8 $108.2 $99.1
Media advertising costs $508.3 $516.6 $428.7
31
14. Balance Sheet Information
Supplemental balance sheet information is as follows:
1993 1992
Receivables, Net
Receivables $1,013.2 $898.3
Allowance for doubtful accounts (24.9) (21.8)
$988.3 $876.5
Inventories 1993 1992
Raw materials and supplies $250.0 $307.2
Work-in-process 28.7 24.9
Finished goods 399.3 363.5
$678.0 $695.6
Inventories valued under LIFO amounted to $170.8 at December 31, 1993 and
$207.3 at December 31, 1992. The excess of current cost over LIFO cost
at the end of each year was $23.1 and $28.5, respectively. In 1993,
certain inventory quantities were reduced, which resulted in liquidations
of LIFO inventory quantities. The effect was to increase income by $1.7.
1993 1992
Other Current Assets
Prepaid income taxes $91.1 $111.1
Other 101.8 91.4
$192.9 $202.5
Property, Plant and Equipment, Net 1993 1992
Land $82.6 $83.3
Buildings 491.3 461.6
Machinery and equipment 2,246.3 2,037.5
2,820.2 2,582.4
Accumulated depreciation (1,053.9) (985.6)
$1,766.3 $1,596.8
Goodwill and Other Intangibles, Net 1993 1992
Goodwill and other intangibles $1,740.2 $1,530.5
Accumulated amortization (151.2) (100.0)
$1,589.0 $1,430.5
Other Accruals 1993 1992
Accrued payroll and employee benefits $223.8 $200.1
Accrued advertising 121.0 130.8
Accrued interest 19.3 20.4
Accrued taxes, other than income taxes 35.9 25.5
Other 150.4 194.4
$550.4 $571.2
Fair Value of Financial Instruments
The Company estimates that the aggregate fair value of all financial
instruments at December 31, 1993 does not differ materially from the
aggregate carrying values of its financial instruments recorded in the
Consolidated Balance Sheet. The estimated fair value amounts have been
determined by the Company using available market information and
appropriate valuation methodologies. Considerable 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.
In May 1993, the Financial Accounting Standards Board issued Statement
No. 115, "Accounting for Certain Investments in Debt and Equity Securities,"
which addresses the accounting and reporting for investments in equity
securities that have readily determinable fair values and for all investments
in debt securities. The Company will adopt the provisions of this new standard
effective January 1, 1994, and prior periods will not be restated. The
effect of adoption will not be material to financial condition, results of
operations or cash flows.
32
15. Commitments and Contingent Liabilities
The Company has various contractual commitments to purchase raw
materials, products and services totaling $282.4 million which expire
through 1998.
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. 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 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 condition or ongoing cash flows and results of
operations.
33
COLGATE-PALMOLIVE COMPANY
SCHEDULE V-PROPERTY, PLANT AND EQUIPMENT
For the Year Ended December 31, 1993
(Dollars in Millions)
Column A Column B Column C Column D Column E Column F
Balance at Other Balance
Beginning Additions Changes at End
Description (1) of Period at Cost Retirements Add(Deduct) of Period
Land and land
improvements $83.3 $ 3.5 $ 3.4 $(3.0)(2) $ 82.6
3.0 (3)
( .8)(4)
Buildings 461.6 31.6 3.6 (10.5)(2) 491.3
9.9 (3)
2.3 (4)
Machinery and
equipment 2,037.5 329.2 90.1 (63.3)(2) 2,246.3
36.1 (3)
(3.1)(4)
Total $2,582.4 $364.3 $ 97.1 $(29.4) $2,820.2
NOTES:
(1)Reference is made to Note 1 to the Consolidated Financial Statements
included in this report with respect to the basis upon which property,
plant and equipment is stated and with respect to depreciation policies.
(2)Adjustments arising from translation of asset balances at year-end
exchange rates.
(3)Property, plant and equipment of acquired companies and entities in which
ownership was increased to majority control.
(4)Other adjustments.
34
COLGATE-PALMOLIVE COMPANY
SCHEDULE V-PROPERTY, PLANT AND EQUIPMENT
For the Year Ended December 31, 1992
(Dollars in Millions)
Column A Column B Column C Column D Column E Column F
Balance at Other Balance
Beginning Additions Changes at End
Description (1) of Period at Cost Retirements Add(Deduct) of Period
Land and land
improvements $ 77.3 $ 7.3 $ 3.9 $ (4.0)(2) $ 83.3
11.1 (3)
(4.5)(4)
Buildings 420.2 37.3 10.9 (12.9)(2) 461.6
35.9 (3)
(8.0)(4)
Machinery and
equipment 1,863.1 273.9 68.7 (84.5)(2) 2,037.5
50.2 (3)
3.5 (4)
Total $2,360.6 $318.5 $83.5 $(13.2) $2,582.4
NOTES:
(1)Reference is made to Note 1 to the Consolidated Financial Statements
included in this report with respect to the basis upon which property,
plant and equipment is stated and with respect to depreciation policies.
(2)Adjustments arising from translation of asset balances at year-end
exchange rates.
(3)Property, plant and equipment of acquired companies.
(4)Other adjustments.
35
COLGATE-PALMOLIVE COMPANY
SCHEDULE V-PROPERTY, PLANT AND EQUIPMENT
For the Year Ended December 31, 1991
(Dollars in Millions)
Column A Column B Column C Column D Column E Column F
Balance at Other Balance
Beginning Additions Changes at End
Description (1) of Period at Cost Retirements Add(Deduct) of Period
Land and land
improvements $64.0 $ 12.1 $ .5 $ (.1)(2) $ 77.3
1.8 (5)
Buildings 355.0 66.8 1.8 (1.9)(2) 420.2
2.1 (5)
Machinery and
equipment 1,705.3 181.8 32.0 (12.1)(2) 1,863.1
23.8 (3)
(16.8)(4)
13.1 (5)
Total $2,124.3 $260.7 $34.3 $ 9.9 $2,360.6
NOTES:
(1)Reference is made to Note 1 to the Consolidated Financial Statements
included in this report with respect to the basis upon which property,
plant and equipment is stated and with respect to depreciation policies.
(2)Adjustments arising from translation of asset balances at year-end
exchange rates.
(3)Property, plant and equipment of acquired companies.
(4)Relates to the provision for restructuring of certain manufacturing
operations.
(5)Other adjustments.
36
COLGATE-PALMOLIVE COMPANY
SCHEDULE VI-ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
For the Year Ended December 31, 1993
(Dollars in Millions)
Column A Column B Column C Column D Column E Column F
Additions
Balance at Charged to Other Balance
Beginning Costs and Changes at End of
Description (1) of Period Expenses Retirements Add(Deduct) Period
Land and land
improvements $ 9.6 $ 1.7 $ .5 $ (.3)(2) $ 10.5
Buildings 115.5 12.8 .9 (4.6)(2) 128.2
2.3 (3)
3.1 (4)
Machinery and
equipment 860.5 143.9 77.7 (25.3)(2) 915.2
9.7 (3)
4.1 (4)
Total $985.6 $158.4 $79.1 $(11.0) $1,053.9
NOTES:
(1)Reference is made to Note 1 to the Consolidated Financial Statements
included in this report with respect to depreciation policies.
(2)Adjustments arising from translation of accumulated depreciation balances
at year-end exchange rates.
(3)Accumulated depreciation of property, plant and equipment for entities in
which ownership was increased to majority control.
(4)Other adjustments.
37
COLGATE-PALMOLIVE COMPANY
SCHEDULE VI-ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
For the Year Ended December 31, 1992
(Dollars in Millions)
Column A Column B Column C Column D Column E Column F
Additions
Balance at Charged to Other Balance
Beginning Costs and Changes at End of
Description (1) of Period Expenses Retirements Add(Deduct) Period
Land and land
improvements $ 6.9 $ 1.5 $ - $ (.5)(2) $ 9.6
1.7 (3)
Buildings 124.9 11.9 6.7 (5.8)(2) 115.5
(8.8)(3)
Machinery and
equipment 833.9 131.4 62.4 (44.7)(2) 860.5
2.3 (3)
Total $965.7 $144.8 $69.1 $(55.8) $985.6
NOTES:
(1)Reference is made to Note 1 to the Consolidated Financial Statements
included in this report with respect to depreciation policies.
(2)Adjustments arising from translation of accumulated depreciation at year-
end exchange rates.
(3)Other adjustments.
38
COLGATE-PALMOLIVE COMPANY
SCHEDULE VI-ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT
For the Year Ended December 31, 1991
(Dollars in Millions)
Column A Column B Column C Column D Column E Column F
Additions
Balance at Charged to Other Balance
Beginning Costs and Changes at End of
Description (1) of Period Expenses Retirements Add(Deduct) Period
Land and land
improvements $ 6.2 $ .5 $ - $ .2 (4) $ 6.9
Buildings 113.9 11.1 .2 (.5)(2) 124.9
.6 (4)
Machinery and
equipment 641.8 110.6 22.4 (3.6)(2) 833.9
99.2 (3)
8.3 (4)
Total $ 761.9 $122.2 $22.6 $104.2 $965.7
NOTES:
(1)Reference is made to Note 1 to the Consolidated Financial Statements
included in this report with respect to depreciation policies.
(2)Adjustments arising from translation of accumulated depreciation balances
at year-end exchange rates.
(3)Relates to provision for restructuring of certain manufacturing operations.
(4)Other adjustments.
39
COLGATE-PALMOLIVE COMPANY
SCHEDULE VIII-VALUATION AND QUALIFYING ACCOUNTS
For the Year Ended December 31, 1993
(Dollars in Millions)
Column A Column B Column C Column D Column E
Additions
------------------
Balance at Charged to Balance
Beginning Costs and at End of
Description of Period Expenses Other Deductions Period
$ 1.2(1)
9.1(2)
.2(4)
Allowance for doubtful
accounts $ 21.8 $13.6 $ - $10.5 $ 24.9
Accumulated amortization
of goodwill and other
intangibles $100.0 $51.2 $ - $ - $151.2
Valuation allowance for
deferred tax assets $ - $22.0(3) $ 6.3(3) $ - $ 28.3
NOTES:
(1)Adjustments arising from translation of reserve balances at year-end
exchange rates.
(2)Uncollectible accounts written off and cash discounts allowed.
(3)Allowance for tax loss and tax credit carryforward benefits which more
likely than not will not be utilized in the future. The $22.0 charged
to costs and expenses was included in the 1993 cumulative one-time charge
for the adoption of SFAS 109, "Accounting for Income Taxes."
(4)Other adjustments.
40
COLGATE-PALMOLIVE COMPANY
SCHEDULE VIII-VALUATION AND QUALIFYING ACCOUNTS
For the Year Ended December 31, 1992
(Dollars in Millions)
Column A Column B Column C Column D Column E
Additions
------------------
Balance at Charged to Balance
Beginning Costs and at End of
Description of Period Expenses Other Deductions Period
$ 2.0(2)
10.6(3)
.9(4)
Allowance for doubtful
accounts $ 21.5 $12.3 $ 1.5 (1) $13.5 $ 21.8
Accumulated amortization
of goodwill and other
intangibles $ 53.3 $47.7 $(1.0)(4) - $100.0
NOTES:
(1)Balances of acquired companies.
(2)Adjustments arising from translation of reserve balances at year-end
exchange rates.
(3)Uncollectible accounts written off and cash discounts allowed.
(4)Other adjustments.
41
COLGATE-PALMOLIVE COMPANY
SCHEDULE VIII-VALUATION AND QUALIFYING ACCOUNTS
For the Year Ended December 31, 1991
(Dollars in Millions)
Column A Column B Column C Column D Column E
Additions
------------------
Balance at Charged to Balance
Beginning Costs and at End of
Description of Period Expenses Other Deductions Period
$ .3(1) $ .3(2)
.5(4) 5.7(3)
Allowance for doubtful
accounts $ 19.6 $ 7.1 $ .8 $ 6.0 $21.5
Accumulated amortization
of goodwill and other
intangibles $ 29.3 $23.9 $ .1(4) - $53.3
NOTES:
(1)Balances of acquired companies.
(2)Adjustments arising from translation of reserve balances at year-end
exchange rates.
(3)Uncollectible accounts written off and cash discounts allowed.
(4)Other adjustments.
42
COLGATE-PALMOLIVE COMPANY
SCHEDULE IX-SHORT-TERM BORROWINGS
For the Three Years Ended December 31, 1993
(Dollars in Millions)
Column A Column B Column C Column D Column E Column F
Weighted
Average
Maximum Average Interest
Weighted Amount Amount Rate
Balance Average Outstanding Outstanding During
Category of Aggregate at End Interest During During the Period
Short-term Borrowings of Period Rate (4) the Period the Period(2) (3)(4)
Year 1993 (1) $ 169.4 6.6% $182.0 $ 150.8 9.1%
Year 1992 (1) $ 132.0 9.3% $223.9 $ 160.4 10.9%
Year 1991 (1) $ 137.1 10.3% $203.6 $ 128.4 11.2%
NOTES:
(1)Amounts are payable to banks, principally overseas.
(2)Average borrowings were determined based on average quarter-end amounts
outstanding.
(3)The weighted average interest rate during the year was computed by
dividing actual short-term interest expense in each year by average short-
term borrowings in such year.
(4)The weighted average interest rates exclude the impact of interest rates
in hyperinflationary countries because their impact is distortive.
43
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, 1993 and 1992, and the related consolidated statements of income,
retained earnings, changes in capital accounts and cash flows for each of
the three years in the period ended December 31, 1993. 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 generally accepted auditing
standards. 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, 1993 and 1992, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1993, in conformity with generally accepted
accounting principles.
As discussed in the accompanying notes to the consolidated financial
statements, in 1993, the Company adopted three new accounting standards
promulgated by the Financial Accounting Standards Board, changing its methods
of accounting for income taxes, postretirement benefits other than pensions,
and postemployment benefits.
Our audit was for the purpose of forming an opinion on the basic financial
statements taken as a whole. The schedules listed in the index to the
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.
New York, New York /s/ ARTHUR ANDERSEN & CO.
February 2, 1994
44
COLGATE-PALMOLIVE COMPANY
Historical Financial Summary (1)
Dollars in Millions Except Per Share Amounts
1993 1992 1991 1990 1989
Operations
Net sales 7,141.3 7,007.2 6,060.3 5,691.3 5,038.8
Income from
continuing
operations:
Amount 189.9(2) 477.0 124.9(3) 321.0 280.0
Per share,
primary 1.08(2) 2.92 .77(3) 2.28 1.98
Assuming
full dilution 1.05(2) 2.74 .75(3) 2.12 1.90
Depreciation and
amortization
expense 209.6 192.5 146.2 126.2 97.0
Financial
Position
Working capital 676.4 635.6 596.0 516.0 907.5
Ratio of current
assets to current
liabilities 1.5 1.5 1.5 1.4 1.9
Property, plant
and equipment,
net 1,766.3 1,596.8 1,394.9 1,362.4 1,105.4
Capital
expenditures 364.3 318.5 260.7 296.8 210.0
Total assets 5,761.2 5,434.1 4,510.6 4,157.9 3,536.5
Long-term debt 1,532.4 946.5 850.8 1,068.4 1,059.5
Shareholders'
equity 1,875.0 2,619.8 1,866.3 1,363.6 1,123.2
Share and Other
Book value per
common share 12.40 16.21 12.54 10.12 8.39
Cash dividends
declared per
common share 1.34 1.15 1.02 .90 .78
Cash dividends
paid per common
share 1.34 1.15 1.02 .90 .78
Closing price 62.38 55.75 48.88 36.88 31.75
Number of common
shares outstanding
(in millions) 149.3 160.2 147.3 133.2 132.2
Number of
shareholders of
record:
$4.25 Preferred 450 470 460 500 500
Common 40,300 36,800 34,100 32,000 32,400
Average number of
employees 28,000 28,800 24,900 24,800 24,100
- ---------------------------------------------------------------------------
1988 1987 1986 1985 1984
Operations
Net sales 4,734.3 4,365.7 3,768.7 3,488.5 3,415.9
Income from
continuing
operations:
Amount 152.7(4) .9(5) 114.8 122.5 28.5(7)
Per share,
primary 1.11(4) .01(5) .81 .78 .17(7)
Assuming
full dilution 1.10(4) .01(5) .81 .77 .17(7)
Depreciation and
amortization
expense 82.0 70.1 60.3 49.7 42.1
Financial
Position
Working capital 710.9 439.5 428.7 518.0 806.8
Ratio of current
assets to current
liabilities 1.7 1.3 1.4 1.5 2.0
Property, plant
and equipment,
net 1,021.6 1,201.8 1,113.7 978.3 814.8
Capital
expenditures 238.7 285.8 220.9 208.6 243.8
Total assets 3,217.6 3,227.7 2,845.9 2,814.0 2,568.3
Long-term debt 674.3 694.1 522.0 529.3 282.4
Shareholders'
equity 1,150.6 941.1 979.9 907.0 1,232.0
Share and Other
Book value per
common share 8.24 6.77 6.91 6.33 7.34
Cash dividends
declared per
common share .55(6) .695 .68 .66 .64
Cash dividends
paid per common
share .74 .695 .68 .65 .64
Closing Price 23.50 19.63 20.44 16.38 12.44
Number of common
shares
outstanding (in
millions) 138.1 137.2 140.1 141.3 166.0
Number of
shareholders of
record:
$4.25 Preferred 550 600 600 700 700
Common 33,200 33,900 35,900 39,600 45,300
Average number of
employees 24,700 37,400 37,900 40,600 42,800
(1)All share and per share amounts have been restated to reflect the
1991 two-for-one stock split.
(2)Income in 1993 includes a one-time impact of adopting new mandated
accounting standards, effective in the first quarter of 1993, of
$358.2 ($2.30 per share on a primary basis or $2.10 on a fully
diluted basis).
(3)Income in 1991 includes a net provision for restructured
operations of $243.0 ($1.80 per share on a primary basis or $1.75
per share on a fully diluted basis).
(4)Income in 1988 includes Hill's service agreement renegotiation net
charge of $42.0 ($.30 per share on both a primary and fully diluted
basis).
(5)Income in 1987 includes a net provision for restructured
operations of $144.8 ($1.06 per share on a primary basis or $1.05
per share on a fully diluted basis).
(6)Due to timing differences, 1988 includes three dividend
declarations while all other years include four dividend
declarations.
(7)Income in 1984 includes a net provision for restructured
operations of $89.0 ($.54 per share on both a primary and fully
diluted basis).
45
COLGATE-PALMOLIVE COMPANY
EXHIBITS TO FORM 10-K
YEAR ENDED DECEMBER 31, 1993
Commission File No. 1-644-2
46
COLGATE-PALMOLIVE COMPANY
INDEX TO EXHIBITS
Exhibit Description Page No.
No.
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. (Registrant hereby incorporates by -
reference Exhibit 3-B to its Annual Report on Form
10-K for the year ended December 31, 1989, File No.
1-644-2.)
4-A Rights agreement dated as of October 13, 1988 -
between registrant and Morgan Shareholder Services
Trust Company. (Registrant hereby incorporates by
reference Exhibit I to its Form 8-A dated October
21, 1988, 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.
(Registrant hereby incorporates by reference
Exhibit 4-B(b) to its Annual Report on Form 10-K
for the year ended December 31, 1989, File No.
1-644-2.)
10-A Colgate-Palmolive Company 1977 Stock Option Plan, -
as amended. (Registrant hereby incorporates by
reference Exhibit 10-A to its Annual Report on Form
10-K for the year ended December 31, 1986, File No.
1-644-2.)
10-B a) Colgate-Palmolive Company Executive Incentive -
Compensation Plan. (Registrant hereby incorporates
by reference Exhibit 10-B(a) to its Annual Report
on Form 10-K for the year ended December 31, 1987,
File No. 1-644-2.)
b) Colgate-Palmolive Company Executive Incentive -
Compensation Plan Trust. (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-C 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 Spouse's -
Benefit 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-D Lease dated August 15, 1978 between Harold Uris, -
d/b/a Uris Holding Company, and Colgate-Palmolive
Company. (Registrant hereby incorporates by
reference Exhibit 2(b) to its Annual Report on Form
10-K for the year ended December 31, 1978, File No.
1-644-2.)
10-E a) Colgate-Palmolive Company Executive Severance Plan. -
(Registrant hereby incorporates by reference
Exhibit 10-E(a) to its Annual Report on Form 10-K
for the year ended December 31, 1989, File No.
1-644-2.)
47
Exhibit Description Page No.
No.
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-F Colgate-Palmolive Company Pension Plan for Outside -
Directors. (Registrant hereby incorporates by
reference Exhibit 10-F to its Annual Report on Form
10-K for the year ended December 31, 1988, File No.
1-644-2.)
10-G Colgate-Palmolive Company Stock Purchase 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, 1988, File No. 1-644-2.)
10-H Colgate-Palmolive Company Restated and Amended -
Deferred Compensation Plan for Non-Employee
Directors. (Registrant hereby incorporates by
reference Exhibit 10-H to its Annual Report on Form
10-K for the year ended December 31, 1991, File No.
1-644-2.)
10-I 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.)
10-J 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, 1992, File No.
1-644-2.)
10-K Sale agreement between Colgate-Palmolive Company -
and CDK Holding Company dated September 13, 1988
relating to the sale of The Kendall Company.
(Registrant hereby incorporates by reference
Exhibit 2 to its Form 8-K dated September 23, 1988,
File No. 1-644-2.)
10-L U.S. $460,000,000 Credit Agreement dated as of -
March 30, 1990. (Registrant hereby incorporates by
reference Exhibit 10-M to its Annual Report on Form
10-K for the year ended December 31, 1990, File No.
1-644-2.)
10-M Colgate-Palmolive Company Stock Compensation Plan -
for Non-Employee Directors, as amended.
(Registrant hereby incorporates by reference
Exhibit A to its Proxy Statement dated March 30,
1990, File No. 1-644-2.)
10-N Stock incentive agreement between Colgate-Palmolive 50-51
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.
11 Statement re Computation of Earnings Per Common 52-53
Share.
12 Statement re Computation of Ratio of Earnings to 54
Fixed Charges.
21 Subsidiaries of the Registrant. 55-56
23 Consent of Independent Public Accountants. 57
24 Power of Attorney. 58-66
48
*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 hereunder does not exceed 10% of the total assets
of the registrant and its subsidiaries on a consolidated
basis.
Exhibits 3-A through 10-M inclusive, indicated above,
are not included with the Form 10-K. They 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
49
EXHIBIT 10-N
Page 1 of 2
STOCK INCENTIVE AGREEMENT
COLGATE-PALMOLIVE COMPANY
NON-QUALIFIED STOCK OPTION
Date: January 13, 1993
Mr. Reuben Mark
Colgate-Palmolive Company
300 Park Avenue
New York, NY 10022-7499
Dear Mr. Mark:
This will confirm the following Agreement made today
between you and the Colgate-Palmolive Company (the
"Company") pursuant to the Company's 1987 Stock Option Plan
as amended (the "Plan"). If you have not received copies of
the Plan and the Plan Prospectus, they are available from
the Company at 300 Park Avenue, New York, NY 10022,
Attention: Mr. Andrew D. Hendry, Senior Vice President,
General Counsel and Secretary.
The Company hereby grants you non-qualified options
(the "Options") to purchase from the Company up to a total
of one million (1,000,000) shares of common stock of the
Company in the amounts and at the exercise prices set forth
below. Groups 1 through 6 of the Options, as set forth
below, shall each become exercisable as follows: (a) on and
after January 13, 1994, with respect to a total for that
Group of 33,333 shares, (b) on and after January 13, 1995,
with respect to a total for that Group of 66,666 shares, and
(c) on and after January 13, 1996, with respect to a total
for that Group of 100,000 shares. Group 7 of the Options,
as set forth below, shall become exercisable as follows:
(a) on and after January 13, 1994, with respect to a total for
that Group of 133,333 shares, (b) on and after January 13,
1995, with respect to a total for that Group of 266,666
shares, and (c) on and after January 13, 1996, with respect
to a total for that Group of 400,000 shares.
The Options will be exercisable as set forth above in
the following amounts, at the following prices:
Group 1 100,000 shares at $60.98125 per share;
Group 2 100,000 shares at $66.525 per share;
Group 3 100,000 shares at $72.06875 per share;
Group 4 100,000 shares at $77.6125 per share;
Group 5 100,000 shares at $83.15625 per share;
Group 6 100,000 shares at $88.70 per share; and
Group 7 400,000 shares at $99.7875 per share.
The Options shall expire at 11:59 p.m. (Eastern
Standard Time) on January 12, 2003, or possibly sooner (for
example, in the event of your death or termination of employment)
as provided in the Plan or under the circumstances set forth herein.
In order to encourage you further to promote the growth
of the Company and, consequently, more rapid growth in the
value of the common stock of the Company, this option shall
expire prior to January 12, 2003 as follows:
50
EXHIBIT 10-N
Page 2 of 2
(a) If the closing price per share of common stock of
the Company shall not have exceeded $88.70 (as such price
may be adjusted from time to time, as set forth herein,
the "60% Hurdle") at some time prior to January 13, 1999,
then on such date the term of the Options, to the extent
then unexercised, shall automatically expire, without any
further action on your part or the part of the Company.
(b) If the closing price per share of common stock of the
Company shall not have exceeded $99.7875 (as such
price may be adjusted from time to time, as set forth
herein, the "80% Hurdle") at some time prior to January
13, 2001, then on such date the term of the Options,
to the extent then unexercised, shall automatically expire,
without any further action on your part or the part of the
Company.
For the purpose of determining the 60% Hurdle and the 80% Hurdle, closing
price shall mean the daily closing price, as reported by the New York
Stock Exchange Composite Transactions or other reporting system acceptable
to the Personnel and Organization Committee of the Board of Directors of
the Company.
The Options may be exercised only in accordance with the terms and
conditions of the Plan, as supplemented by this Agreement, and not
otherwise.
Nothing herein contained shall obligate the Company or any
subsidiary of the Company to continue your employment for any particular
period or on any particular basis of compensation.
This Agreement is subject to all terms, conditions,limitations
and restrictions contained in the Plan and may not be assigned or
transferred in whole or in part except as therein provided. You shall
not have any rights of a shareholder with respect to any of the shares
which are the subject of this Agreement until such shares are actually
issued to you.
The number of shares and the exercise price per share are subject
to adjustment as provided in the Plan. In the event of any
recapitalization, reclassification, stock dividend, stock split or
extraordinary distribution with respect to the common stock of the
Company or other change in corporate structure affecting the common
stock of the Company, the Committee shall make an appropriate adjustment
to the 60% Hurdle and the 80% Hurdle to reflect the effect of such
transaction on the market price of the common stock of the Company.
You assume all risks incident to any change hereafter in the
applicable laws or regulations or incident to any change in the market
value of the stock after the exercise of these incentives in whole or
in part.
To confirm the foregoing, kindly sign and return one copy of this
Agreement as soon as possible.
Very truly yours,
COLGATE-PALMOLIVE COMPANY
By:/s/ ANDREW D. HENDRY
Andrew D. Hendry
Senior Vice President and Secretary
CONFIRMED:
/s/ REUBEN MARK
Reuben Mark
51
EXHIBIT 11
Page 1 of 2
COLGATE-PALMOLIVE COMPANY
COMPUTATION OF EARNINGS PER COMMON SHARE
Dollars in Millions Except Per Share Amounts (Unaudited)
Year Ended December 31,
1993 1992 1991
PRIMARY
Earnings:
Income before changes in accounting $548.1 $477.0 $124.9
Deduct: Dividends on preferred shares, net of
income taxes 21.6 20.7 20.8
Income applicable to common shares before
cumulative effect on prior years of accounting
changes 526.5 456.3 104.1
Cumulative effect on prior years of accounting
changes (358.2) - -
Net income applicable to common shares $168.3 $456.3 $104.1
Shares (in millions):
Weighted average shares outstanding 155.9 156.5 135.3
Earnings per common share, primary:
Income before changes in accounting $ 3.38 2.92 $ .77
Cumulative effect on prior years of accounting
changes (2.30) - -
Net income $ 1.08 $ 2.92 $ .77
52
EXHIBIT 11
Page 2 of 2
COLGATE-PALMOLIVE COMPANY
COMPUTATION OF EARNINGS PER COMMON SHARE
Dollars in Millions Except Per Share Amounts (Unaudited)
Year Ended December 31,
1993 1992 1991
ASSUMING FULL DILUTION
Earnings:
Income before changes in accounting $548.1 $477.0 $124.9
Deduct: Dividends on preferred shares, net of
income taxes .5 .5 20.8
Deduct: Replacement funding 9.5 5.8 -
Income applicable to common shares before
cumulative effect on prior years of accounting
changes 538.1 470.7 104.1
Cumulative effect on prior years of accounting
changes (358.2) - -
Net income applicable to common shares $179.9 $470.7 $104.1
Shares (in millions):
Weighted average shares outstanding 155.9 156.5 135.3
Add: Assumed exercise of options reduced by the
number of shares purchased with the proceeds 2.5 3.1 3.6
Add: Assumed conversion of Series B Convertible
Preference Stock 12.4 12.5 -
Adjusted weighted average shares outstanding 170.8 172.1 138.9
Earnings per common share, assuming full
dilution:
Income before changes in accounting $ 3.15 $ 2.74 $ .75
Cumulative effect on prior years of accounting
changes (2.10) - -
Net income $ 1.05 $ 2.74 $ .75
NOTE: The calculation of fully diluted earnings per share excludes the effect
of antidilutive securities for 1991.
53
EXHIBIT 12
COLGATE-PALMOLIVE COMPANY
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Dollars in Millions (Unaudited)
Year Ended
December 31,
1993
Income before income taxes and cumulative effect on prior
years of accounting changes $836.2
Add:
Interest on indebtedness and amortization of debt expense
and discount or premium 69.5
Portion of rents representative of interest factor 30.5
Interest on ESOP debt, net of dividends 1.8
Less:
Income of less than fifty-percent-owned subsidiaries (2.2)
Income as adjusted $935.8
Fixed Charges:
Interest on indebtedness and amortization of debt expense
and discount or premium 69.5
Portion of rents representative of interest factor 30.5
Interest on ESOP debt, net of dividends 1.8
Capitalized interest 11.8
Total fixed charges $113.6
Ratio of earnings to fixed charges 8.2
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 8.6%. These notes are guaranteed by the Company. Interest incurred
on the ESOP's notes was $34.5 in 1993. 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.
54
EXHIBIT 21
Page 1 of 2
SUBSIDIARIES OF THE REGISTRANT
State in
which
Incorporated
or Country
in which
Name of Company Organized
Colgate Juncos, Inc. Delaware
Colgate-Palmolive, Inc. Delaware
Colgate-Palmolive (Caribbean), Inc. Delaware
Colgate-Palmolive (Central America), Inc. Delaware
Colgate-Palmolive Cia. Delaware
Colgate-Palmolive Development Corp. Delaware
Colgate-Palmolive (Dominican Republic), Inc. Delaware
Colgate-Palmolive Global Trading Company Delaware
Colgate-Palmolive International Incorporated Delaware
Colgate-Palmolive (P.R.) Inc. Delaware
Colgate Oral Pharmaceuticals, Inc. Delaware
CPC Funding Company Delaware
Southampton-Hamilton Company Delaware
Purity Holding Company Delaware
Hill's Pet Nutrition, Inc. Delaware
Mennen Limited Delaware
Mennen de Puerto Rico, Ltd Delaware
Mission Hill's Property Corporation Delaware
Norwood International Incorporated Delaware
Vipont Pharmaceutical, Inc. Delaware
Princess House, Inc. Massachusetts
Softsoap Enterprises, Inc. Minnesota
The Mennen Company New Jersey
Veterinary Companies of America, Inc. New York
The Murphy-Phoenix Company Ohio
Colgate-Palmolive Sociedad Anonima Industrial Y
Commercial Argentina
Colgate-Palmolive Pty. Limited Australia
Hill's Pet Products Pty. Ltd. Australia
Colgate-Palmolive Gesellschaft m.b.H. Austria
Colgate-Palmolive Belgium S.A. Belgium
Colgate-Palmolive Europe S.A. Belgium
Hill's Pet Products (Benelux) S.A. Belgium
ELM Company Limited Bermuda
Colgate-Palmolive (Botswana) (Proprietary) Ltd. Botswana
Colgate-Palmolive, Ltda. Brazil
CP Textil Industria e Comercia Ltd. Brazil
Hawley & Hazel (BVI) Company Ltd British Virgin Islands
Colgate-Palmolive Cameroun S.A. Cameroon
Colgate-Palmolive Canada, Inc. Canada
Hill's Distribution Services Ltd. Canada
Mennen Canada, Inc. Canada
Mennen de Chile Limitada Chile
Colgate (Guangzhou) Limited China
Mennen de Costa Rica, S.A. Costa Rica
Colgate-Palmolive (Czechoslovakia) SRO Czech Republic
Colgate-Palmolive A/S Denmark
Colgate-Palmolive del Ecuador, S.A. Ecuador
Colgate-Palmolive (Egypt) S.A.E. Egypt
Colgate-Palmolive (Fiji) Limited Fiji Islands
Colgate-Palmolive France
Cotelle, S.A. France
Hill's Pet Products SNC France
Colgate-Palmolive G.m.b.H. Germany
Hill's Pet Products G.m.b.H. Germany
Colgate-Palmolive (Hellas) S.A. Greece
55
EXHIBIT 21
Page 2 of 2
SUBSIDIARIES OF THE REGISTRANT
State in
which
Incorporated
or Country
in which
Name of Company Organized
Colgate-Palmolive (Centro America) S.A. Guatemala
Mennen Guatemala, S.A. Guatemala
Colgate-Palmolive (H.K.) Limited Hong Kong
Colgate-Palmolive (Hungary) Kft. Hungary
Colgate-Palmolive (India) Limited India
P.T. Colgate-Palmolive Indonesia Indonesia
Colgate-Palmolive (Ireland) Limited Ireland
Newgrange Financial Services Company Ireland
Colgate-Palmolive S.p.A. Italy
Hill's Pet Products S.p.A. Italy
Viset S.A.L. Italy
Colgate-Palmolive Cote. d'lvoire, S.A. Ivory Coast
Colgate-Palmolive Co. (Jamaica) Ltd. Jamaica
Hill's-Colgate (Japan) Ltd. Japan
Colgate-Palmolive (East Africa) Limited Kenya
Colgate-Palmolive (Malaysia) SDN. BHD. Malaysia
Colgate-Palmolive (Malaysia) Marketing SDN. BHD. Malaysia
Colgate-Palmolive, S.A. de C.V. Mexico
Hill's Pet Products de Mexico, S.A. de C.V. Mexico
Mennen de Mexico, S.A. Mexico
Colgate-Palmolive Morocco
Colgate-Palmolive (Mocambique) Limitada Mozambique
CKR Nederland B.V. Netherlands
Hill's International Sales FSC B.V. Netherlands
Colgate-Palmolive Limited New Zealand
Colgate-Palmolive Investments (PNG) Pty Ltd. Papua, New Guinea
Colgate-Palmolive Philippines, Inc. Philippines
Colgate-Palmolive (Poland) Sp.z O.O. Poland
Colgate-Palmolive, S.A. Portugal
Sonadel - Sociedad Nacional de Detergents, S.A. Portugal
Colgate-Palmolive (Romania) Ltd. Romania
A/O Colgate-Palmolive (Russia) Russia
Societe Africaine de Detergents, S.A. Senegal
Colgate-Palmolive (Eastern) Pte. Ltd. Singapore
Colgate-Palmolive (Pty) Limited South Africa
Colgate-Palmolive, S.A.E. Spain
Cristasol S.A. Spain
Colgate-Palmolive A.G. Switzerland
Colgate-Palmolive (Tanzania) Limited Tanzania
Siam Purity Distribution (Thailand) Ltd. Thailand
Colgate-Palmolive (Thailand) Ltd. Thailand
Colgate-Palmolive Haci Sakir Sabun Sanayi ve Ticaret
Anonim Sirketi Turkiye
Colgate-Palmolive (Uganda) Limited Uganda
Colgate-Palmolive SP Ukraine
Colgate-Palmolive (Ukraine) A/O Ukraine
Colgate Holdings (U.K.) Limited United Kingdom
Colgate-Palmolive Limited United Kingdom
Colgate-Palmolive Mennen Limited United Kingdom
Hill's Pet Products Limited United Kingdom
Hill's Pet Nutrition Ltd. United Kingdom
Alexandril S.A. Uruguay
Colgate-Palmolive Compania Anonima Venezuela
Mennen Venezolana, S.A. Venezuela
Colgate-Palmolive (Zambia) Ltd. Zambia
Colgate-Palmolive (Zimbabwe) (Private) Limited Zimbabwe
56
EXHIBIT 23
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation
of our report 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,
33-48832, 33-48840, 33-58746 and 33-61038.
New York, New York /s/ ARTHUR ANDERSEN & CO.
March 24, 1994
57
EXHIBIT 24
Page 1 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities
and Exchange Commission its Annual Report on Form 10-K for the year ended
December 31, 1993 ("Annual Report") pursuant to Section 13 of the
Securities Exchange Act of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or
officer, or both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK,
ANDREW HENDRY and ROBERT AGATE, and each of them severally, his true and
lawful attorneys or attorney with power to act with or without the other
and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange
Commission. Each of said attorneys shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done in the
premises, as fully to all intents and purposes as the undersigned might or
could do in person. The undersigned hereby ratifies and approves the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on February 17, 1994.
/s/ VERNON R. ALDEN
Vernon R. Alden
58
EXHIBIT 24
Page 2 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities
and Exchange Commission its Annual Report on Form 10-K for the year ended
December 31, 1993 ("Annual Report") pursuant to Section 13 of the
Securities Exchange Act of 1934;
NOW, THEREFORE, the undersigned in her capacity as a director or
officer, or both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK,
ANDREW HENDRY and ROBERT AGATE, and each of them severally, her true and
lawful attorneys or attorney with power to act with or without the other
and with full power of substitution and resubstitution, to execute in her
name, place and stead, in her capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange
Commission. Each of said attorneys shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done in the
premises, as fully to all intents and purposes as the undersigned might or
could do in person. The undersigned hereby ratifies and approves the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on February 17, 1994.
/s/ JILL K. CONWAY
Jill K. Conway
59
EXHIBIT 24
Page 3 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities
and Exchange Commission its Annual Report on Form 10-K for the year ended
December 31, 1993 ("Annual Report") pursuant to Section 13 of the
Securities Exchange Act of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or
officer, or both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK,
ANDREW HENDRY and ROBERT AGATE, and each of them severally, his true and
lawful attorneys or attorney with power to act with or without the other
and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange
Commission. Each of said attorneys shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done in the
premises, as fully to all intents and purposes as the undersigned might or
could do in person. The undersigned hereby ratifies and approves the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on February 16, 1994.
/s/ RONALD E. FERGUSON
Ronald E. Ferguson
60
EXHIBIT 24
Page 4 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities
and Exchange Commission its Annual Report on Form 10-K for the year ended
December 31, 1993 ("Annual Report") pursuant to Section 13 of the
Securities Exchange Act of 1934;
NOW, THEREFORE, the undersigned in her capacity as a director or
officer, or both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK,
ANDREW HENDRY and ROBERT AGATE, and each of them severally, her true and
lawful attorneys or attorney with power to act with or without the other
and with full power of substitution and resubstitution, to execute in her
name, place and stead, in her capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange
Commission. Each of said attorneys shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done in the
premises, as fully to all intents and purposes as the undersigned might or
could do in person. The undersigned hereby ratifies and approves the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on February 17, 1994.
/s/ ELLEN M. HANCOCK
Ellen M. Hancock
61
EXHIBIT 24
Page 5 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities
and Exchange Commission its Annual Report on Form 10-K for the year ended
December 31, 1993 ("Annual Report") pursuant to Section 13 of the
Securities Exchange Act of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or
officer, or both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK,
ANDREW HENDRY and ROBERT AGATE, and each of them severally, his true and
lawful attorneys or attorney with power to act with or without the other
and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange
Commission. Each of said attorneys shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done in the
premises, as fully to all intents and purposes as the undersigned might or
could do in person. The undersigned hereby ratifies and approves the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on February 17, 1994.
/s/ DAVID W. JOHNSON
David W. Johnson
62
EXHIBIT 24
Page 6 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities
and Exchange Commission its Annual Report on Form 10-K for the year ended
December 31, 1993 ("Annual Report") pursuant to Section 13 of the
Securities Exchange Act of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or
officer, or both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK,
ANDREW HENDRY and ROBERT AGATE, and each of them severally, his true and
lawful attorneys or attorney with power to act with or without the other
and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange
Commission. Each of said attorneys shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done in the
premises, as fully to all intents and purposes as the undersigned might or
could do in person. The undersigned hereby ratifies and approves the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on February 17, 1994.
/s/ JOHN P. KENDALL
John P. Kendall
63
EXHIBIT 24
Page 7 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities
and Exchange Commission its Annual Report on Form 10-K for the year ended
December 31, 1993 ("Annual Report") pursuant to Section 13 of the
Securities Exchange Act of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or
officer, or both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK,
ANDREW HENDRY and ROBERT AGATE, and each of them severally, his true and
lawful attorneys or attorney with power to act with or without the other
and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange
Commission. Each of said attorneys shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done in the
premises, as fully to all intents and purposes as the undersigned might or
could do in person. The undersigned hereby ratifies and approves the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on February 17, 1994
/s/ DELANO E. LEWIS
Delano E. Lewis
64
EXHIBIT 24
Page 8 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities
and Exchange Commission its Annual Report on Form 10-K for the year ended
December 31, 1993 ("Annual Report") pursuant to Section 13 of the
Securities Exchange Act of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or
officer, or both, of COLGATE-PALMOLIVE COMPANY hereby appoints ANDREW
HENDRY and ROBERT AGATE, and each of them severally, his true and lawful
attorneys or attorney with power to act with or without the other and with
full power of substitution and resubstitution, to execute in his name,
place and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange
Commission. Each of said attorneys shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done in the
premises, as fully to all intents and purposes as the undersigned might or
could do in person. The undersigned hereby ratifies and approves the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on February 17, 1994.
/s/ REUBEN MARK
Reuben Mark
65
EXHIBIT 24
Page 9 of 9
COLGATE-PALMOLIVE COMPANY
ANNUAL REPORT ON FORM 10-K
POWER OF ATTORNEY
WHEREAS, COLGATE-PALMOLIVE COMPANY is filing with the Securities
and Exchange Commission its Annual Report on Form 10-K for the year ended
December 31, 1993 ("Annual Report") pursuant to Section 13 of the
Securities Exchange Act of 1934;
NOW, THEREFORE, the undersigned in his capacity as a director or
officer, or both, of COLGATE-PALMOLIVE COMPANY hereby appoints REUBEN MARK,
ANDREW HENDRY and ROBERT AGATE, and each of them severally, his true and
lawful attorneys or attorney with power to act with or without the other
and with full power of substitution and resubstitution, to execute in his
name, place and stead, in his capacity as a director, officer, or both, of
COLGATE-PALMOLIVE COMPANY, its Annual Report and any and all amendments
thereto and all instruments necessary or incidental in connection
therewith, and to file the same with the Securities and Exchange
Commission. Each of said attorneys shall have full power and authority to
do and perform in the name and on behalf of the undersigned, in any and all
capacities, every act whatsoever necessary or desirable to be done in the
premises, as fully to all intents and purposes as the undersigned might or
could do in person. The undersigned hereby ratifies and approves the acts
of said attorneys and each of them.
IN WITNESS WHEREOF, the undersigned has executed this instrument
on February 17, 1994.
/s/ HOWARD B. WENTZ, JR.
Howard B. Wentz, Jr.
66