For Investors: Financial Information

Q. How has Colgate been able to achieve record results year after year?
A. Reuben Mark: Colgate is continuing its record of strong performance through an absolute focus on identifying strategic priorities and executing them quickly and as perfectly as possible. Colgate's strategy includes a strict financial discipline with emphasis on reducing costs and constantly improving how we utilize our assets around the globe. The savings generated fund a multitude of growth-building activities including advertising and promotional support behind a constant stream of innovative new products. As a result, Colgate ended 2001 with the highest ever gross profit margin, operating profit margin, net income, earnings per share and return on capital. Additionally, Colgate's growing profitability and strong cash generation led our Board of Directors to authorize a 14 percent dividend increase in July 2001.

Q. What is driving Colgate's robust volume growth and market share gains?
A. Reuben Mark: Simply put, we are increasingly getting the right new products to the right consumer at the right time. In 2001,unit volume was up 5.0 percent with each operating division contributing strong volume gains. Striving to increase market leadership everywhere, we focus on our core categories and global equities while speeding innovative new products to over 200 countries and territories faster than ever. In the past five years, Colgate has reduced the time from product concept to retail shelf distribution by more than half. The new Colgate Motion value-priced battery-powered toothbrush is an excellent example. Shipments of Colgate Motion began in the U.S. last November, just nine months after we developed the initial product design. Less than six months later, it has now been introduced in more than 50 countries and, building on the success of Colgate Actibrush, has strengthened our global sales leadership in the battery-powered toothbrush segment.

Q. How does Colgate develop so many innovative new products each year?
A. Bill Shanahan: We empower Colgate people to continually look for ways to improve our already successful new product process. In 2001,a record 39 percent of total sales came from new products introduced in the past five years. In the U.S., a leading source for global products, a record 21 new products were launched. Importantly, we significantly enhanced our new product process in 2001 by linking our global R&D, technology and business development functions into one Global Growth Group. This collaborative team develops specific strategies for each product category with priorities agreed upon by all functions and geographies right from the start. As a result, new products are now tested in several countries at once and are rolled out more quickly around the globe. Innovative ideas are also generated by new product innovation groups established in each region as well as from ongoing consumer insight work.

Q. Gross profit has been instrumental in generating advertising funds and increased profits. How will the Company improve gross profit margin further?
A. Reuben Mark: We continue to focus on becoming better and better at everything we do. Colgate's ability to surpass its 2002 year-end gross profit margin goal 18 months early, and end 2001 with a gross profit margin of 55.1 percent, gives us encouragement that we will reach our long-term goal of 60 percent by 2008 or sooner. We see continuing benefits from many new and ongoing cost-saving programs, a disciplined capital spending program, increased efficiencies in global purchasing, and regionalization initiatives in production and packaging. Additional savings will also be generated by greater use of technology and further installation of SAP real-time enterprise software, which will support 94 percent of our business, by mid-2002.

Q. How is Colgate continuing to benefit from its use of SAP technology?
A. Bill Shanahan: Colgate is developing next-generation SAP applications that promise considerable savings in a number of areas. These include a first of its kind material reporting system that tracks raw and packaging material purchases globally, data warehousing capabilities that allow for more efficient transfer of knowledge and expertise from one region of the world to another, and the ability to do real-time collaborative planning of retailer inventory. These new applications are already proving successful in many parts of the world and will be expanded to other regions in 2002.

Q. Colgate's aftertax return on capital (ROC) reached an all-time high of 29.7 percent in 2001.Will this ratio continue to improve in 2002?
A. Reuben Mark: We believe improvements in aftertax return on capital are ongoing and ROC should exceed 30 percent in 2002.This progress is driven by our increasing profitability and efficient use of capital in projects that produce considerable future savings, combined with improved working capital management facilitated by SAP applications.

Q. Colgate has used the term "360-degree " marketing to describe its advertising strategy. Please explain this strategy and how it contributes to growth.
A. Bill Shanahan: Colgate is going beyond traditional forms of media advertising to reach consumers more extensively and to further strengthen our market leadership positions worldwide. We are creating innovative programs and techniques that literally surround consumers with Colgate's message throughout their daily activities, thus the term "360-degree " marketing. These include everything from sampling at movie theaters and rock concerts to offering free dental checkups right in retail stores with the purchase of Colgate products. This strategy is proving especially successful when we partner with large retailers because such highly targeted promotions foster the best display and pricing of our products.

Q. Is the consolidation of the retail trade affecting Colgate's business?
A. Bill Shanahan: As mergers among retailers result in fewer players, the trade also becomes more global. This is an advantage to Colgate because we can utilize our existing partnerships to transfer proven best practices worldwide. We now have global account teams working with our major retail partners and can offer them local market expertise as they expand into new geographies. Importantly, we are equally effective when working with smaller retailers in developing regions where our extensive merchandising programs are developed in close partnership with shop owners.

Q. In recent years, Colgate has stressed its attention to people and business relationships. Why is this important?
A. Reuben Mark: The 38,500 people who make up the Colgate family are our most valuable resource. Colgate people around the world understand that their relationships with one another, our business partners, our consumers, and the communities in which they live and work are vital to the Company's continuing success. Colgate continues to make investments in training to improve the skills of our people and expand their capability to deliver strong business results. For example, every Colgate employee attends a program called "Valuing Colgate People " that stresses Colgate's global values of Caring, Continuous Improvement and Global Teamwork as well as the importance of treating all people with respect. Colgate's ability to grow volume and profits year after year is a direct result of having outstanding employees who live these values every day and are committed to the Company's global growth strategies.

Q. Will the excellent results at Hill's continue in 2002?
A. Bill Shanahan: Hill's Pet Nutrition continues to build upon its strength as the world leader in specialty pet food. Unit volume in 2001 was up an impressive 5.5 percent, with growth well balanced between the U.S. and international. Innovation is key to our success in the specialty pet food market. Strengthening our leadership in the special needs category is the recently launched Science Diet Oral Care line for cats and dogs. Exciting technological advancements in therapeutic pet food include new Prescription Diet Canine and Feline z/d, a diet for allergic animals, and Prescription Diet Canine b/d, a diet clinically proven to reverse the signs of brain aging in dogs. At the same time, Hill's is benefiting from operating efficiencies that have reduced, by more than half, the time it takes to achieve global distribution of a new product.

Q. What are the prospects for Colgate in 2002?
A. Reuben Mark: Colgate set new records in 2001 despite economic slowdown in many regions of the world. The Company's focused business strategy has proven itself over time under many different economic conditions. Our successful new product process keeps our pipeline full and the more savings we achieve, the more opportunities we see for investing in our future growth. Add to this an outstanding group of employees motivated to achieve excellent results, and Colgate has a winning combination that is sure to continue our record of above-average earnings and volume growth, increasing Colgate's value to shareholders.


Thank you.



Reuben Mark
Chairman and Chief Executive Officer





William S. Shanahan
President