For Investors: Financial Information

Q. How has Colgate continued its strong volume growth and profitability gains?
A. Reuben Mark:  Colgate's strong growth continues. This is due to our focus on market leadership in our global core categories. Unit volume rose 6 percent in 2000 and was consistently strong each quarter. Every Colgate division contributed, led by North America and Asia/Africa, which grew 8 percent and 7 percent, respectively. We are particularly proud of our earnings per share increase of 16 percent. Other new records achieved were our highest-ever gross profit margin, earnings before interest and taxes, and return on capital.
     We drive top-line growth by developing innovative new products, bringing them quickly to global markets and supporting them effectively. And we constantly identify and achieve new savings opportunities. Moreover, the Company's broad geographic base — our global brands are sold in over 200 countries and territories — gives us a sustainable competitive advantage.

Q. How are the Company's new products succeeding?
A. Bill Shanahan:  Innovation is where Colgate truly shines. A record-setting 38 percent of our 2000 sales came from new products introduced just in the past five years. And in the U.S., which is a major source for global new products, it was 61 percent of sales. We have made our new product process faster and more profitable, significantly reducing the time from idea to shelf. For Colgate Fresh Confidence toothpaste, this meant launching in 48 countries within 12 months.
     Strong incremental sales from new products added to our leadership. For instance, our global toothpaste share set a new record for the sixth consecutive year, bolstered by strong gains in the US and China. Notable too was our record 39.7 percent global share in dishwashing liquid, up almost two points from 1999.

Q. Colgate has called its financial strategy both "simple" and "powerful." Please explain this strategy and how it contributes to the Company's growth.
A. Reuben Mark: Our financial strategy is designed to increase gross profit margin and reduce overhead on a continuous basis. The savings enable us to reinvest in growth-building activities, including R&D and advertising, while also delivering incremental profitability. The strategy is simple and very powerful when pursued relentlessly by 38,000 Colgate people around the world. Little by little, it has enabled Colgate to increase our leadership positions, deliver earnings growth and build shareholder value.

Q. Will Colgate's ad budget continue to grow? How is the Company reaching consumers differently?
A. Bill Shanahan: Because advertising drives growth, we increased our investment in advertising in 2000. And we are budgeting an increase in 2001. In addition to traditional TV and print advertising, we are utilizing a variety of innovative programs to reach consumers in all aspects of their daily lives.

Q. How will Colgate continue the trend of improving its gross profit margin, from 39.2 percent in 1984 to 54.4 percent today?
A. Reuben Mark: We see considerable opportunity ahead. We have consistently met or exceeded our target to increase gross margin by 50 to 100 basis points every year. We are now ahead of plan to reach our near-term goal of 55 percent by 2002. Further out, we are targeting a 60 percent margin by 2008.
     Gains are the result of new products that bring greater benefit to consumers and a myriad of cost-reduction programs. Savings are facilitated by the powerful enterprise-wide SAP software. SAP now supports 80 percent of Colgate operations worldwide, and the benefits accruing from our newly installed SAP applications are highly encouraging.

Q. How is Colgate investing its growing cash flow?
A. Reuben Mark: Colgate generated record cash flow of $1.5 billion in 2000, up 19 percent from last year. It was our fifth consecutive year of growth in cash generation. Driving these increases are Colgate's increasingly profitable operations and tight control of working capital. We utilize our strong cash flow to fund capital expenditures that will drive future growth and cost savings, pay dividends and repurchase Colgate shares, and maintain our balance sheet ratios in the optimum range. During 2000, we repurchased 19.1 million common shares at a cost of $1,040.6 million.

Q. What impact are external factors, such as rising oil prices and the weak euro, having on Colgate's profitability?
A. Reuben Mark: Many companies, including Colgate, experienced cost increases in fuel and raw and packaging materials. The euro also had an impact, although our European division performed well in 2000 with unit volume growing 4 percent. These external negatives were offset by our strong volume growth and cost savings.

Q. What are Colgate's prospects for achieving growth in developing regions?
A. Bill Shanahan: Colgate's strong presence in the developing world, created over the last 80 years, continues to serve us well. Providing a healthy balance, approximately 45 percent of our sales comes from developing markets.
     Our brands are leaders throughout Latin America and much of Asia, Africa and Central Europe - regions with the majority of the world's population. We foresee stronger growth trends in these markets as low per capita consumption for core consumer products continues to build. We have positioned Colgate to fully participate in this growth by offering consumers a range of affordable products.

Q. How does Colgate attract and retain the best people?
A. Reuben Mark: No mission is more important to Colgate's future. That is why "Making Colgate the Best Place to Work" is one of three strategic priorities. We have outstanding people. We provide terrific opportunities for global careers, a motivating environment based on our values of managing with respect, a chance to share in our financial success through pay for performance and consistent support for personal growth through global training. We believe these key elements will help us continue to grow outstanding leaders - so critical to our business success. For more on this vital subject, please see pages 14-17.

Q. How is Colgate taking advantage of technology and e-business opportunities?
A. Bill Shanahan: We have only scratched the surface in achieving benefits from new technologies. This process began in 1995 when we first installed SAP real-time enterprise software in North America and reengineered the supply chain. The benefits to both efficiency and customer service have been substantial. We now have extended SAP to most parts of the world. A second generation of SAP applications is enabling Colgate's suppliers to automatically replenish supplies to our factories as needed, further reducing working capital devoted to inventory.
     We also are moving quickly on Internet opportunities - from direct receipt of orders on-line by veterinarians and dentists, to purchasing raw materials in Internet auctions. Our first tests of on-line purchasing achieved significant savings.

Q. What is the outlook for Hill's?
A. Bill Shanahan: Hill's Pet Nutrition had a good year. Unit volume increased 5 percent, with especially strong growth in Europe and Asia. Superior new products continue to build this business. Most recently, Hill's relaunched the entire Science Diet line with a superior antioxidant formula to help protect the immune systems of cats and dogs. New innovative products are benefiting both the Science Diet and Prescription Diet brands. As the world leader in specialty pet food, Hill's has an enviable franchise and is committed to continued growth, serving veterinarians, pet shops and breeders, the channels where it is a strong Number One.

Q. Please comment on the Company's outlook for 2001.
A. Reuben Mark: We set many new records this past year and are confident that Colgate's strong growth will continue. Our global market shares are strong and growing. Our new product pipeline is full. We are still at the early stages of profiting from all aspects of technology. Collectively we are becoming better and better at what we do, gaining strength from the commitment of 38,000 talented Colgate people. All of this gives us much confidence about our ability to continue delivering strong shareholder value.

Thank you.



Reuben Mark
Chairman and Chief Executive Officer





William S. Shanahan
President

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