~~Table~~


▪	changes in exchange rates for foreign currencies, which may reduce the U.S. dollar value of ~~Contents~~ ~~(Dollars~~revenues, profits and cash flows we receive from non-U.S. markets or increase our supply costs, as measured in ~~Millions Except Per Share Amounts)~~ ~~Operating profit~~U.S. dollars, in ~~Latin America decreased 5%~~those markets,


▪	exchange controls and other limits on our ability to repatriate earnings from overseas,


▪	political or economic instability or changing macroeconomic conditions in 2010 to $1,295, as higher raw and packaging material costs, higher advertising spending and increased promotional investments were partially offset by cost-saving initiatives. In 2009, Operating profitour major markets,

▪

lack of well-established or reliable legal systems in ~~Latin America increased 15% to $1,360 as a result of sales growth and cost-saving initiatives.~~

~~Europe/South Pacific~~

~~Net sales in Europe/South Pacific decreased 1.5% in 2010 to $3,220 as volume growth of 2.0% was more than offset by net selling price decreases of 3.0% and a 0.5% negative impact of~~ certain countries where the Company operates,

▪

foreign exchange. Organic sales in Europe/South Pacific declined 1.0% in 2010. Volume gains in the GABA business, the United Kingdom, Australia and Denmark were partially offset by volume declines in Romania, Portugal, Greece and France. Products contributing to growth in oral care included Colgate Sensitive Pro-Relief, Colgate Sensitive Pro-Relief Whitening, elmex Sensitive Professional and Colgate Max White One toothpastes, Colgate 360° ActiFlex manual toothbrush, Colgate 360° ActiFlex Sonic Power battery powered toothbrush and Colgate Plax Ice mouth rinse. Products contributing to growth in other categories included Palmolive Nutra-Fru it shower crèmeownership restrictions and the ~~Natura Verde line~~potential for nationalization or expropriation of ~~home care products. In 2009, Net sales~~property or other resources, and

▪

foreign or domestic legal and regulatory requirements, including those resulting in ~~Europe/South Pacific decreased 8.5% to $3,271 as net selling~~potentially adverse tax consequences or the imposition of onerous trade restrictions, price increases of 0.5% were more than offset by 0.5% in volume declines and an 8.5% negative impact of foreign exchange. The 2008 divestment of a non-core brand in Germany impacted sales growth for 2009 by 0.5% versus 2008. Excluding the impact of this divestment, Net sales decreased 8.0% in 2009 and volume was level with 2008. Organic sales in Europe/South Pacific grew 0.5% in 2009.

Operating profit in Europe/South Pacific decreased 1% in 2010 to $742, as a continued focus on cost-saving initiatives was more than offset by negative sales growth, higher advertising spending and increased promotional investments. In 2009, Operating profit in Europe/South Pacific was level at $748, as a continued focus on cost-saving initiatives, lower advertising spending and lower raw and packaging material costs offset the negative impact of foreign exchange.

~~Greater Asia/Africa~~

Net sales in Greater Asia/Africa increased 13.0% in 2010 to $2,998 as volume growth of 10.5% and a 4.0% positive impact of foreign exchange were partially offset by net selling price decreases of 1.5%. Organic sales in Greater Asia/Africa grew 9.0% in 2010. Volume gains were led by the Greater China region, India, Thailand, Philippines, Malaysia, Turkey and Russia. Products driving oral care growth included Colgate Sensitive Pro-Relief, Colgate Sensitive Pro-Relief Whitening, Colgate Total and Colgate Herbal Salt toothpastes, Colgate 360° ActiFlex, Colgate Massager and Colgate Twister Gum Care manual toothbrushes and Colgate Plax Complete Care mouthwash. Products contributing to growth incontrols or other categories included Lady Speed Stick Breathing Skin and Mennen Speed Stick Breathe and Protect deodorants. In 2009, Net sales in Greater Asi a/Africa were level at $2,655 as volume growth of 2% and net selling prices of 6.0% were offset by a 8.0% negative impact of foreign exchange. Organic sales in Greater Asia/Africa grew 8.0% in 2009.

Operating profit in Greater Asia/Africa increased 22% in 2010 to $767, reflecting higher sales growth and cost-saving initiatives, partially offset by higher advertising spending. In 2009, Operating profit in Greater Asia/Africa increased 20% to $631, reflecting higher pricing, lower raw and packaging material costs and cost-saving initiatives.government controls.

These risks could have a significant impact on our ability to sell our products on a competitive basis in international markets and may have a material adverse effect on our results of operations, cash flows and financial condition.

In an effort to minimize the impact on earnings of foreign currency rate movements, the Company engages in a combination of cost-containment measures, selling price increases and selective hedging of foreign currency transactions. However, these measures may not succeed in offsetting any negative impact of foreign currency rate movements on our business and results of operations.

~~Table of Contents~~

~~(Dollars in Millions Except Per Share Amounts)~~

~~Hill’s Pet Nutrition~~

Net sales for Hill’s Pet Nutrition decreased 2.5% in 2010 to $2,080 as 2.0% volume declines and 1.5% net selling price decreases were partially offset by a 1.0% positive impact of foreign exchange. Organic sales in Hill’s Pet Nutrition declined 3.5% in 2010. Volume declined in the U.S., Russia, Japan, the Nordic countries, France and Germany, while volume gains were achieved in Australia and South Africa. Volume was negatively impacted as a result of heightened competitive activity and in part due to residual effects of price increases taken in late 2008 and early 2009 in response to significantly higher commodity costs. The Company has taken steps to adjust on-shelf product pricing and sizing and this, combined with the introduction of innovative new products, has resulted in increased unit c onsumption towards the end of 2010 as compared to the prior year. Successful new products within the U.S. included Science Diet Small and Toy Breed Canine, Science Diet Healthy Mobility Canine, Science Diet Weight Loss System and Prescription Diet Therapeutic Weight Reduction Program. Successful products contributing to international sales included Science Diet Small and Toy Breed Canine, Science Diet Senior Advanced Canine and Feline, Science Plan Sterilized Cat and Science Plan VetEssentials Canine and Feline. In 2009, Net sales for Hill’s Pet Nutrition decreased 0.5% to $2,132 as 8.5% net selling price increases were more than offset by 7.5% volume declines and a 1.5% negative impact of foreign exchange. Organic sales in Hill’s Pet Nutrition grew 1.0% in 2009.

Operating profit for Hill’s Pet Nutrition increased 1% to $559 in 2010 due to cost-saving initiatives and lower raw and packaging material costs. In 2009, Operating profit increased 2% to $555 due to higher pricing, lower raw and packaging material costs and cost-saving initiatives.

~~Corporate~~

Operating profit (loss) for the Corporate segment was ($758), ($522) and ($584) in 2010, 2009 and 2008, respectively. Corporate operations include Corporate overhead costs, research and development costs, stock-based compensation expense related to stock options and restricted stock awards, restructuring and related implementation costs and gains and losses on sales of non-core product lines and assets. The components of Operating profit (loss) for the Corporate segment are presented below:

2010 2009 2008
Venezuela hyperinflationary transition charge $ (271 ) $ — $ —
Termination benefits
(86 ) — —
Gain on sales of non-core product lines
50 — —
2004 Restructuring Program — — (164 )
Corporate overhead costs and other, net (451 ) (522 ) (420 )
Total Corporate Operating profit (loss) $ (758 ) $ (522 ) $ (584 )

~~Table of Contents~~

~~(Dollars in Millions Except Per Share Amounts)~~

Corporate Operating profit (loss) in 2010 showed an increased loss as compared to 2009, primarily due to the one-time charge related to the transition to hyperinflationary accounting in Venezuela and termination benefits, primarily relating to ongoing overhead reduction initiatives at Hill’s of $48 and in Europe of $29, partially offset by the gain on sales of non-core product lines in Latin America and a decrease in Corporate overhead costs. Corporate Operating profit (loss) in 2009 showed a decreased loss as compared to 2008, primarily due to charges related to the 2004 Restructuring Program in 2008, offset by higher Corporate overhead costs, primarily pension and benefit costs.

~~For additional information regarding the Company’s 2004 Restructuring Program, refer to “Restructuring and Related Implementation Charges” below and Note~~ 4

For example, in 2010 our results of operations were adversely impacted by the designation of Venezuela as hyperinflationary and the subsequent currency devaluations in Venezuela. Also, in November 2011, a new price control law came into effect in Venezuela. While it is not yet clear how the new law will be implemented, it could adversely affect the Company's current pricing strategies in Venezuela. Going forward, additional currency devaluations or continued or worsening foreign exchange or price controls in Venezuela could have an adverse impact on our business and results of operations. For additional information regarding the risks associated with our operations in Venezuela, refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Executive Overview and Outlook” and Note 13 to the Consolidated Financial Statements.

Uncertain global economic conditions and disruptions in the credit markets may adversely affect our business.

Uncertain global economic conditions could adversely affect our business. Recent global economic trends pose challenges to our business and could result in declining revenues, profitability and cash flow. Although we continue to devote significant resources to support our brands, during periods of economic uncertainty consumers may switch to economy brands, which could reduce sales volumes of our products or result in a shift in our product mix from higher margin to lower margin product offerings. Additionally, retailers may increase pressure on our selling prices or increase promotional activity for lower-priced or value offerings as they seek to maintain sales volumes and margins. For example, continuing economic uncertainty in Europe, and a worsening of the debt crisis there, could negatively affect consumer confidence globally.

While we currently generate significant cash flows from our ongoing operations and have access to global credit markets through our various financing activities, any disruption in the credit markets, including in Europe, could limit the availability of credit or the ability or willingness of financial institutions to extend credit, which could adversely affect our liquidity and capital resources or significantly increase our cost of capital. If any financial institutions that are parties to our revolving credit facility supporting our commercial paper program or other financing arrangements, such as interest rate or foreign exchange hedging instruments, were to declare bankruptcy or become insolvent, they may be unable to perform under their agreements with us. This could leave us with reduced borrowing capacity or unhedged against certain interest rate or foreign currency exposures. In addition, tighter credit markets may lead to business disruptions for certain of our suppliers, contract manufacturers or trade customers which could, in turn, adversely impact our business.

Significant competition in our industry could adversely affect our business.

We face vigorous competition around the world, including from other large, multinational companies, some of which have greater resources than we do. We face this competition in several aspects of our business, including, but not limited to, the pricing of products, promotional activities and new product introductions. Such competition also extends to administrative and legal challenges of product claims and advertising. Our ability to compete also depends on the strength of our brands and on our ability to defend our patent, trademark and trade dress rights against legal challenges brought by competitors.

We may be unable to anticipate the timing and scale of such initiatives or challenges by competitors or to successfully counteract them, which could harm our business. In addition, the cost of responding to such initiatives and challenges, both in terms of management time and out-of-pocket expenses, may affect our performance in the relevant period. A failure to compete effectively could adversely affect our growth and profitability.

Changes in the policies of our retail trade customers and increasing dependence on key retailers in developed markets may adversely affect our business.

Our products are sold in a highly competitive global marketplace which has experienced increased trade concentration and the growing presence of large-format retailers and discounters. With the growing trend toward retail trade consolidation, we are increasingly dependent on key retailers, and some of these retailers, including large-format retailers, may have greater bargaining strength than we do. They may use this leverage to demand higher trade discounts, allowances or slotting fees, which could lead to reduced sales or profitability. Also, tighter credit or capital markets could negatively affect our retail customers and as a result, affect our working capital. We may also be negatively affected by changes in the policies of our retail trade customers, such as inventory de-stocking, limitations on access to shelf space, delisting of our products, environmental or sustainability initiatives and other conditions. In addition, private label products sold by retail trade chains, which are typically sold at lower prices than branded products, are a source of competition for certain of our product lines, including liquid hand soaps and shower gels.

The growth of our business depends on the successful development and introduction of innovative new products.

Our growth depends on the continued success of existing products as well as the successful development and introduction of innovative new products and line extensions, which face the uncertainty of retail and consumer acceptance and reaction from competitors. In addition, our ability to create new products and line extensions and to sustain existing products is affected by whether we can successfully:


▪	develop and fund technological innovations,


▪	obtain and maintain necessary patent and trademark protection and avoid infringing intellectual property rights of others,


▪	obtain approvals and registrations of regulated products, including from the U.S. Food and Drug Administration (FDA) and other regulatory bodies in the U.S. and abroad, and


▪	anticipate consumer needs and preferences.

The failure to develop and launch successful new products could hinder the growth of our business and any delay in the development or launch of a new product could result in the Company not being the first to market, which could compromise our competitive position.

Volatility in material and other costs and our increasing dependence on key suppliers could adversely impact our profitability.

Raw and packaging material commodities such as resins, tropical oils, essential oils, tallow, corn and soybeans are subject to wide price variations. Increases in the costs and availability of these commodities and the costs of energy, transportation and other necessary services may adversely affect our profit margins if we are unable to pass along any higher costs in the form of price increases or otherwise achieve cost efficiencies such as in manufacturing and distribution. In addition, our move to global suppliers for materials and other services in order to achieve cost reductions and simplify our business has resulted in an increasing dependence on key suppliers. For certain materials, new suppliers may have to be qualified under industry, government and Colgate standards, which can require additional investment and take some period of time. While we believe that the supplies of raw materials needed to manufacture our products are adequate, global economic conditions, supplier capacity constraints and other factors could affect the availability of, or prices for, those raw materials.

Damage to our reputation could have an adverse effect on our business.

Maintaining our strong reputation with consumers and our trade partners globally is critical to selling our branded products. Accordingly, we devote significant time and resources to programs designed to protect and preserve our reputation, such as our Ethics and Compliance, Sustainability, Brand Protection and Product Safety, Regulatory and Quality initiatives.

In addition, from time to time, third parties sell counterfeit versions of our products, which are inferior or may pose safety risks. As a result, consumers of our brands could confuse our products with these counterfeit products, which could cause them to refrain from purchasing our brands in the future and in turn could impair our brand equity and adversely affect our business.

Similarly, adverse publicity regarding our responses to health concerns, our environmental impacts, including packaging, energy and water use and waste management, or other sustainability issues, whether or not deserved, could jeopardize our reputation. Damage to our reputation or loss of consumer confidence in our products for any of these reasons could have a material adverse effect on our business, as well as require resources to rebuild our reputation.

Our business is subject to product liability claims.

From time to time the Company may be subject to product liability claims alleging, among other things, that its products cause damage to property or persons, provide inadequate instructions or warnings regarding their use or contain design or manufacturing defects or contaminants. For example, the Company has been named in product liability actions alleging that certain talc products it sold prior to 1996 were contaminated with asbestos, causing harm to consumers. In addition, if one of the Company's products, or a raw material contained in our products, is perceived or found to be defective or unsafe, we may need to recall some of our products. Whether or not a product liability claim is successful, or a recall required, such assertions could have an adverse effect on our business and the negative publicity surrounding them could harm our reputation and brand image.

Our business is subject to regulation in the U.S. and abroad.

Our business is subject to extensive regulation in the U.S. and abroad. Such regulation applies to most aspects of our products, including their development, ingredients, manufacture, packaging, labeling, storage, transportation, distribution, export, import, advertising and sale. Also, our selling practices are regulated by competition law authorities in the U.S. and abroad. U.S. federal authorities, including the Food and Drug Administration (FDA), the Federal Trade Commission, the Consumer Product Safety Commission and the Environmental Protection Agency (EPA), regulate different aspects of our business, along with parallel authorities at the state and local level and comparable authorities overseas.

While it is our policy and practice to comply with all regulatory requirements applicable to our business, a finding that we are in violation of, or out of compliance with, applicable laws or regulations could subject us to civil remedies, including fines, damages, injunctions or product recalls, or criminal sanctions, any of which could have a material adverse effect on our business. Even if a claim is unsuccessful, is without merit or is not fully pursued, the negative publicity surrounding such assertions regarding our products, processes or business practices could adversely affect our reputation and brand image. For information regarding our European competition matters, see Item 3, “Legal Proceedings” and Note 12 to the Consolidated Financial Statements.

In addition, new or more stringent regulations, or more restrictive interpretations of existing regulations, could have a material adverse impact on our business. For example, from time to time, various regulatory authorities and consumer groups in Europe, the U.S. and other countries request or conduct reviews of the use of various ingredients in consumer products. Triclosan, an ingredient used primarily in Colgate Total toothpaste as well as certain other oral care products and soaps, is an example of an ingredient that has undergone reviews by various regulatory authorities around the world. A finding by a regulatory authority that triclosan, or any other of our ingredients, should not be used in certain consumer products or should otherwise be newly regulated, could have a material adverse impact on our business, as could negative reactions by our consumers, trade customers or non-governmental organizations to our use of such ingredients. Additionally, an inability to timely obtain regulatory approval of new or reformulated products containing alternative ingredients could likewise have a material adverse effect on our business.

Our business is subject to the risks inherent in global manufacturing and sourcing activities.

The Company is engaged in manufacturing and sourcing of products and materials on a global scale. We are subject to the risks inherent in such activities, including, but not limited to:


▪	industrial accidents or other occupational health and safety issues,


▪	environmental events,


▪	strikes and other labor disputes,


▪	disruptions in logistics,


▪	loss or impairment of key manufacturing sites,


▪	raw material and product quality or safety issues,


▪	the impact on our suppliers of tighter credit or capital markets, and


▪	natural disasters, acts of war or terrorism and other external factors over which we have no control.

While we have business continuity and contingency plans for key manufacturing sites and the supply of raw materials, significant disruption of manufacturing for any of the above reasons could interrupt product supply and, if not remedied, have an adverse impact on our business.

A failure of a key information technology system could adversely impact the Company’s ability to conduct business.

The Company relies extensively on information technology systems, including some which rely on third-party service providers, in order to conduct its business. These systems include, but are not limited to, programs and processes relating to communicating within the Company and with other parties, ordering and managing materials from suppliers, converting materials to finished products, shipping products to customers, processing transactions, summarizing and reporting results of operations, complying with regulatory legal or tax requirements and other processes involved in managing the business. Although the Company has network security measures in place, the systems may be vulnerable to computer viruses,

security breaches and other similar disruptions from unauthorized users. While the Company has business continuity plans in place, if the systems are damaged or cease to function properly due to any number of causes, including the poor performance or failure of third-party service providers, catastrophic events, power outages, security breaches, network outages, failed upgrades or other similar events, and if the business continuity plans do not effectively resolve such issues on a timely basis, the Company may suffer interruptions in the ability to manage or conduct business which may adversely impact the Company’s business.

Our success depends upon our ability to attract and retain key employees and the succession of senior management.

Our success largely depends on the performance of our management team and other key employees. If we are unable to attract and retain talented, highly qualified senior management and other key people, our future operations could be adversely affected. In addition, if we are unable to effectively provide for the succession of senior management, including our Chief Executive Officer, our business may be materially adversely affected. While we follow a disciplined, ongoing succession planning process and have succession plans in place for senior management and other key executives, these do not guarantee that the services of qualified senior executives will continue to be available to us at particular moments in time.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

The Company owns or leases approximately 330 properties which include manufacturing, distribution, research and office facilities worldwide. Our corporate headquarters is located in leased property at 300 Park Avenue, New York, New York.

In the U.S., the Company operates approximately 60 properties, of which 15 are owned. Major U.S. manufacturing and warehousing facilities used by the Oral, Personal and Home Care segment of our business are located in Morristown, New Jersey; Morristown, Tennessee; and Cambridge, Ohio. The Pet Nutrition segment has major facilities in Bowling Green, Kentucky; Topeka, Kansas; Emporia, Kansas; and Richmond, Indiana. The primary research center for Oral, Personal and Home Care products is located in Piscataway, New Jersey and the primary research center for Pet Nutrition products is located in Topeka, Kansas. Our global data center is also located in Piscataway, New Jersey.

Overseas, the Company operates approximately 270 properties, of which 73 are owned, in over 70 countries. Major overseas facilities used by the Oral, Personal and Home Care segment of our business are located in Australia, Brazil, China, Colombia, France, Italy, Mexico, Poland, South Africa, Thailand, Venezuela, Vietnam and elsewhere throughout the world. The Pet Nutrition segment has a major facility in the Czech Republic.

All of the facilities we operate are well maintained and adequate for the purpose for which they are intended.

ITEM 3. LEGAL PROCEEDINGS

As a global company serving consumers in more than 200 countries and territories, the Company is routinely subject to a wide variety of legal proceedings. These include disputes relating to intellectual property, contracts, product liability, marketing, advertising, foreign exchange controls, antitrust and trade regulation, as well as labor and employment, environmental and tax matters. Management proactively reviews and monitors the Company’s exposure to, and the impact of, environmental matters. The Company is party to various environmental matters and, as such, may be responsible for all or a portion of the cleanup, restoration and post-closure monitoring of several sites.

As a matter of course, the Company is regularly audited by the Internal Revenue Service (IRS) and other tax authorities around the world in countries where it conducts business. In this regard, all U.S. federal income tax returns through December 31, 2007 have been audited by the IRS and there are limited matters in administrative appeals for years 2002 through 2007, the settlement of which is not expected to have a material adverse effect on the Company's results of operations, cash flows or financial condition. With a few exceptions, the Company is no longer subject to U.S., state and local income tax examinations for the years prior to 2007. In addition, the Company has subsidiaries in various foreign jurisdictions that have statutes of limitations for tax audits generally ranging from three to six years. Estimated incremental tax payments related to potential disallowances for subsequent periods are not expected to be material.

The Company establishes accruals for loss contingencies when it has determined that a loss is probable and that the amount of loss, or range of loss, can be reasonably estimated. Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances.

The Company also determines estimates of reasonably possible losses or ranges of reasonably possible losses in excess of related accrued liabilities, if any, when it has determined that a loss is reasonably possible and it is able to determine such estimates. For those matters disclosed below, the Company currently estimates that the aggregate range of reasonably possible losses in excess of any accrued liabilities is $0 to approximately $200 million (based on current exchange rates). The estimates included in this amount are based on the Company’s analysis of currently available information and, as new information is obtained, these estimates may change. Due to the inherent subjectivity of the assessments and the unpredictability of outcomes of legal proceedings, any amounts accrued or included in this aggregate amount may not represent the ultimate loss to the Company from the matters in question. Thus, the Company’s exposure and ultimate losses may be higher or lower, and possibly significantly so, than the amounts accrued or the range disclosed above.

Based on current knowledge, management does not believe that the ultimate resolution of loss contingencies arising from the matters discussed herein will have a material effect on the Company’s consolidated financial position or its ongoing results of operations or cash flows. However, in light of the inherent uncertainties noted above, an adverse outcome in one or more of these matters could be material to the Company’s results of operations or cash flows for any particular quarter or year.

Brazilian Matters

In 2001, the Central Bank of Brazil sought to impose a substantial fine on the Company’s Brazilian subsidiary based on alleged foreign exchange violations in connection with the financing of the Company’s 1995 acquisition of the Kolynos oral care business from Wyeth (formerly American Home Products) (the Seller), as described in the Company’s Form 8-K dated January 10, 1995. The Company appealed the imposition of the fine to the Brazilian Monetary System Appeals Council (the Council), and on January 30, 2007, the Council decided the appeal in the Company’s favor, dismissing the fine entirely. However, certain tax and civil proceedings that began as a result of this Central Bank matter are still outstanding as described below.

The Brazilian internal revenue authority has disallowed interest deductions and foreign exchange losses taken by the Company’s Brazilian subsidiary for certain years in connection with the financing of the Kolynos acquisition. The tax assessments with interest, at the current exchange rate, approximate $113 million. The Company has been disputing the disallowances by appealing the assessments within the internal revenue authority’s appellate process with the following results to date:


▪	In June 2005, the First Board of Taxpayers ruled in the Company’s favor and allowed all of the previously claimed deductions for 1996 through 1998. In March 2007, the First Board of Taxpayers ruled in the Company’s favor and allowed all of the previously claimed deductions for 1999 through 2001. The tax authorities appealed these decisions to the next administrative level.


▪	In August 2009, the First Taxpayers’ Council (the next and final administrative level of appeal) overruled the decisions of the First Board of Taxpayers, upholding the majority of the assessments, disallowing a portion of the assessments and remanding a portion of the assessments for further consideration by the First Board of Taxpayers.

The Company has filed a motion for clarification with a special appeals chamber of the Taxpayers’ Council and further appeals are available within the Brazilian federal courts. The Company intends to challenge these assessments vigorously. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel and other advisors, that the disallowances are without merit and that the Company should ultimately prevail on appeal, if necessary, in the Brazilian federal courts.

In 2002, the Brazilian Federal Public Attorney filed a civil action against the federal government of Brazil, Laboratorios Wyeth-Whitehall Ltda. (the Brazilian subsidiary of the Seller) and the Company, as represented by its Brazilian subsidiary, seeking to annul an April 2000 decision by the Brazilian Board of Tax Appeals that found in favor of the Seller’s Brazilian subsidiary on the issue of whether it had incurred taxable capital gains as a result of the divestiture of Kolynos. The action seeks to make the Company’s Brazilian subsidiary jointly and severally liable for any tax due from the Seller’s Brazilian subsidiary. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the Company should ultimately prevail in this action. The Company intends to challenge this action vigorously.

In December 2005, the Brazilian internal revenue authority issued to the Company’s Brazilian subsidiary a tax assessment with interest and penalties of approximately $67 million, at the current exchange rate, based on a claim that certain purchases of U.S. Treasury bills by the subsidiary and their subsequent disposition during the period 2000 to 2001 were subject to a tax on foreign exchange transactions. The Company is disputing the assessment within the internal revenue authority’s administrative appeals process. In October 2007, the Second Board of Taxpayers, which has jurisdiction over these matters, ruled in favor of the internal revenue authority. In January 2008, the Company appealed this decision, and in January 2012, a special appeals chamber of the Taxpayers’ Council denied the Company's appeal. Although there can be no assurances, management believes, based on the advice of its Brazilian legal counsel, that the tax assessment is without merit and that the Company should prevail on appeal, if not at the administrative level, in the Brazilian federal courts. The Company intends to challenge this assessment vigorously.

European Competition Matters

Since February 2006, the Company has learned that investigations relating to potential competition law violations involving the Company’s subsidiaries had been commenced by governmental authorities in a number of European countries and by the European Commission. The Company understands that substantially all of these investigations also involve other consumer goods companies and/or retail customers. The status of the various pending matters is discussed below.

Fines have been imposed on the Company in the following matters, although the Company is appealing these fines:


▪	In December 2009, the Swiss competition law authority imposed a fine of $5 million on the Company’s GABA subsidiary for alleged violations of restrictions on parallel imports into Switzerland. The Company is appealing the fine in the Swiss courts.


▪	In January 2010, the Spanish competition law authority found that four suppliers of shower gel had entered into an agreement regarding product down-sizing, for which Colgate’s Spanish subsidiary was fined $3 million. The Company is appealing the fine in the Spanish courts.


▪	In December 2010, the Italian competition law authority found that 16 consumer goods companies, including the Company’s Italian subsidiary, exchanged competitively sensitive information in the cosmetics sector, for which the Company’s Italian subsidiary was fined $3 million. The Company is appealing the fine in the Italian courts.


▪	In December 2011, the French competition law authority found that four consumer goods companies had entered into agreements on pricing and promotion of heavy duty detergents for which Colgate's French subsidiary was fined $46 million in connection with a divested business. The Company is appealing the fine in the French courts.

Currently, formal claims of violations, or statements of objections, are pending against the Company as follows:


▪	The French competition law authority alleges violations of competition law by three pet food producers, including the Company’s Hill’s France subsidiary, focusing on exclusivity arrangements and parallel trade restrictions.


▪	The German competition law authority alleges that 17 branded goods companies, including the Company’s German subsidiary, exchanged sensitive information related to the German market.

The Company has responded to each of these formal claims of violations. Investigations are ongoing in Belgium, France and Greece, but no formal claims of violations have been filed in these jurisdictions except in France as noted above.

During 2011, the following matters have been resolved:


▪	In April 2011, the investigation by the European Commission was resolved with no formal claims of violations or decisions made against the Company. To the Company’s knowledge, there are no other investigations by the European Commission relating to potential competition law violations involving the Company or its subsidiaries.


▪	In May 2011, the Dutch competition authority closed its investigation and no decision was made against the Company or its Dutch subsidiary.

The Company’s policy is to comply with antitrust and competition laws and, if a violation of any such laws is found, to take appropriate remedial action and to cooperate fully with any related governmental inquiry. The Company has undertaken a comprehensive review of its selling practices and related competition law compliance in Europe and elsewhere and, where the Company has identified a lack of compliance, it has undertaken remedial action. Competition and antitrust law investigations often continue for several years and can result in substantial fines for violations that are found. While the Company cannot predict the final financial impact of these competition law issues as these matters may change, the Company evaluates developments in these matters quarterly and accrues liabilities as and when appropriate.

ERISA Matters

In October 2007, a putative class action claiming that certain aspects of the cash balance portion of the Colgate-Palmolive Company Employees’ Retirement Income Plan (the Plan) do not comply with the Employee Retirement Income Security Act was filed against the Plan and the Company in the United States District Court for the Southern District of New York. Specifically, Proesel, et al. v. Colgate-Palmolive Company Employees’ Retirement Income Plan, et al. alleges improper calculation of lump sum distributions, age discrimination and failure to satisfy minimum accrual requirements, thereby resulting in the underpayment of benefits to Plan participants. Two other putative class actions filed earlier in 2007, Abelman, et al. v. Colgate-Palmolive Company Employees’ Retirement Income Plan, et al., in the United States District Court for the Southern District of Ohio, and Caufield v. Colgate-Palmolive Company Employees’ Retirement Income Plan, in the United States District Court for the Southern District of Indiana, both alleging improper calculation of lump sum distributions and, in the case of Abelman, claims for failure to satisfy minimum accrual requirements, were transferred to the Southern District of New York and consolidated with Proesel into one action, In re Colgate-Palmolive ERISA Litigation. The complaint in the consolidated action alleges improper calculation of lump sum distributions and failure to satisfy minimum accrual requirements, but does not include a claim for age discrimination. The relief sought includes recalculation of benefits in unspecified amounts, pre- and post-judgment interest, injunctive relief and attorneys’ fees. This action has not been certified as a class action as yet. The parties are in discussions via non-binding mediation to determine whether the action can be settled. The Company and the Plan intend to contest this action vigorously should the parties be unable to reach a settlement.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

PART II


ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

For information regarding the market for the Company’s common stock, including quarterly market prices and dividends, refer to “Market and Dividend Information.” For information regarding the number of common shareholders of record refer to “Historical Financial Summary.” For information regarding the securities authorized for issuance under our equity compensation plans, refer to “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” included in Item 12 of this report.

Issuer Purchases of Equity Securities

On September 8, 2011, the Company’s Board of Directors authorized a new share repurchase program (the 2011 Program) that replaced the Company’s previous share repurchase program which had been approved in 2010. The 2011 Program authorizes the repurchase of up to 50 million shares of the Company’s common stock. The Board also has authorized share repurchases on an on-going basis to fulfill certain requirements of the Company’s compensation and benefit programs. The shares will be repurchased from time to time in open market transactions or privately negotiated transactions at the Company’s discretion, subject to market conditions, customary blackout periods and other factors.

The following table shows the stock repurchase activity for each of the three months in the quarter ended

December 31, 2011:



Month	Total Number of Shares Purchased⁽¹⁾	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs⁽²⁾	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
October 1 through 31, 2011	556,000	$	90.00	520,000	48,179,489
November 1 through 30, 2011	2,047,281	$	88.45	2,030,000	46,149,489
December 1 through 31, 2011	2,123,388	$	91.21	2,100,000	44,049,489
Total	4,726,669	$	89.87	4,650,000

_______


⁽¹⁾	Includes share repurchases under the 2011 Program and those associated with certain employee elections under the Company’s compensation and benefit programs.


⁽²⁾	The difference between the total number of shares purchased and the total number of shares purchased as part of publicly announced plans or programs is 76,669 shares, all of which relate to shares deemed surrendered to the Company to satisfy certain employee elections under its compensation and benefit programs.

ITEM 6. SELECTED FINANCIAL DATA

Refer to the information set forth under the caption “Historical Financial Summary.”

(Dollars in Millions Except Per Share Amounts)


ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Overview and Outlook

Colgate-Palmolive Company seeks to deliver strong, consistent business results and superior shareholder returns by providing consumers globally with products that make their lives healthier and more enjoyable.

To this end, the Company is tightly focused on two product segments: Oral, Personal and Home Care; and Pet Nutrition. Within these segments, the Company follows a closely defined business strategy to develop and increase market leadership positions in key product categories. These product categories are prioritized based on their capacity to maximize the use of the organization’s core competencies and strong global equities and to deliver sustainable long-term growth.

Operationally, the Company is organized along geographic lines with management teams having responsibility for the business and financial results in each region. The Company competes in more than 200 countries and territories worldwide with established businesses in all regions contributing to the Company’s sales and profitability. Approximately 80% of our net sales are generated from markets outside the U.S., with approximately 50% of our net sales coming from emerging markets (which consist of Latin America, Greater Asia/Africa (excluding Japan) and Central Europe). This geographic diversity and balance help to reduce the Company’s exposure to business and other risks in any one country or part of the world.

The Oral, Personal and Home Care segment is operated through four reportable operating segments: North America, Latin America, Europe/South Pacific and Greater Asia/Africa, all of which sell to a variety of retail and wholesale customers and distributors. The Company, through Hill’s Pet Nutrition, also competes on a worldwide basis in the pet nutrition market, selling its products principally through specialty pet retailers and the veterinary profession.

On an ongoing basis, management focuses on a variety of key indicators to monitor business health and performance. These indicators include market share, sales (including volume, pricing and foreign exchange components), organic sales growth (Net sales growth excluding the impact of foreign exchange, acquisitions and divestments), gross profit margin, operating profit, net income and earnings per share, as well as measures used to optimize the management of working capital, capital expenditures, cash flow and return on capital. The monitoring of these indicators, and the Company’s corporate governance practices (including the Company’s Code of Conduct), help to maintain business health and strong internal controls.

To achieve its business and financial objectives, the Company focuses the organization on initiatives to drive and fund growth. The Company seeks to capture significant opportunities for growth by identifying and meeting consumer needs within its core categories, through its focus on innovation and the deployment of valuable consumer and shopper insights in the development of successful new products regionally, which are then rolled out on a global basis. To enhance these efforts, the Company has developed key initiatives to build strong relationships with consumers, dental and veterinary professionals and retail customers. Growth opportunities are greater in those areas of the world in which economic development and rising consumer incomes expand the size and number of markets for the Company’s products.

The investments needed to support this growth are developed through continuous, Company-wide initiatives to lower costs and increase effective asset utilization through which the Company seeks to become even more effective and efficient throughout its businesses, which are referred to as the Company’s funding-the-growth initiatives. The Company also continues to prioritize its investments toward its higher margin businesses, specifically Oral Care, Personal Care and Pet Nutrition.

On June 20, 2011, the Company, Colgate-Palmolive Europe Sàrl, Unilever N.V. and Unilever PLC (together with Unilever N.V., “Unilever”) finalized the Company’s acquisition from Unilever of the Sanex personal care business in accordance with a Business and Share Sale and Purchase Agreement for an aggregate purchase price of €676 ($966), subject to certain post-closing purchase price adjustments. The acquisition was financed with available cash, proceeds from the sale of the Company’s Euro-denominated investment portfolio and the issuance of commercial paper.

On July 29, 2011, in connection with the Sanex acquisition, Colgate sold its laundry detergent business in Colombia to Unilever for $215 resulting in a pretax gain of $207 ($135 aftertax gain). This gain was more than offset by pretax costs of $224 ($177 aftertax costs) associated with the implementation of various business realignment and other cost-saving initiatives, the sale of land in Mexico and a competition law matter in France related to a divested detergent business, as discussed further below.

The various business realignment and other cost-saving initiatives include the integration of Sanex, the right-sizing of the Colombia business and the closing of an oral care facility in Mississauga, Canada and a Hill’s facility in Los Angeles, CA.

(Dollars in Millions Except Per Share Amounts)

On September 13, 2011, the Company’s Mexican subsidiary entered into an agreement to sell to the United States of America the Mexico City site on which its commercial operations, technology center and soap production facility are located. The sale price is payable in three installments, with the final installment due upon the transfer of the property, which is expected to occur in 2014. The Company intends to re-invest these payments to relocate its soap production to a new state-of-the-art facility to be constructed at its Mission Hills, Mexico site, to relocate its commercial and technology operations within Mexico City and to prepare the existing site for transfer. As a result, over the next three years, the Company expects to make capital improvements and incur costs to exit the site. These exit costs will primarily be related to staff leaving indemnities, accelerated depreciation and demolition.

As disclosed in Item 1A, “Risk Factors”, with over 80% of its Net sales generated outside of the United States, the Company is exposed to changes in economic conditions and foreign currency exchange rates, as well as political uncertainty in some countries, all of which could impact future operating results. For example, as discussed in detail below, the operating environment in Venezuela is challenging, with economic uncertainty fueled by currency devaluations and high inflation and governmental restrictions in the form of import authorization controls, currency exchange controls, price controls and the possibility of expropriation of property or other resources.

In particular, as a result of the devaluations of the Venezuelan bolivar fuerte described more fully in Note 13 “Venezuela” to the Consolidated Financial Statements, the local currency operations of the Company’s Venezuelan subsidiary (CP Venezuela) now translate into fewer U.S. dollars. The Company has taken, and continues to take, actions to mitigate the impact of both devaluations on its operations, although its ability to do so in the future may be limited due to new price controls instituted by the Venezuelan government. As a result, the Company may be unable to implement its pricing strategy to offset the effects of inflation in Venezuela.

Additionally, the Venezuelan government continues to impose import authorization controls and currency exchange and payment controls. During 2010, a new currency market was established and the government closed the free-floating parallel market. Under existing regulations, CP Venezuela is not permitted to access the new currency market, but continues to have limited access to U.S. dollars at the official rate, and currently only for imported goods. As a result, CP Venezuela funds its requirements for imported goods through a combination of U.S. dollars obtained from the government at the official rate, intercompany borrowings and existing U.S. dollar cash balances, which were obtained previously through parallel market transactions and through the prior liquidation of its U.S. dollar-denominated bond portfolio.

The Company’s business in Venezuela, and the Company's ability to repatriate its earnings, continue to be negatively affected by these difficult conditions and would be further negatively affected by additional devaluations or the imposition of additional or more stringent controls on foreign currency exchange, pricing or imports or other governmental actions. For the year ended December 31, 2011, CP Venezuela represented approximately 5% of the Company’s consolidated Net sales. At December 31, 2011, CP Venezuela’s local currency monetary net asset position was approximately $311.

Looking forward, we expect global macroeconomic and market conditions to remain highly challenging. While the global marketplace in which we operate has always been highly competitive, the Company continues to experience heightened competitive activity in certain markets from other large multinational companies, some of which have greater resources than we do. Such activities have included more aggressive product claims and marketing challenges, as well as increased promotional spending. Additionally, we continue to experience volatile foreign currency fluctuations and high commodity costs. While the Company has taken, and will continue to take, measures to mitigate the effect of these conditions, should they persist, they could adversely affect the Company’s future results.

The Company believes it is well prepared to meet the challenges ahead due to its strong financial condition, experience operating in challenging environments and continued focus on the Company’s recently updated strategic initiatives: engaging to build our brands; innovation for growth; effectiveness and efficiency; and leading to win. This focus, together with the strength of the Company’s global brand names and its broad international presence in both mature and emerging markets, should position the Company well to increase shareholder value over the long term.

Results of Operations

Net Sales

Worldwide Net sales were $16,734 in 2011, up 7.5% from 2010, driven by volume growth of 3.5%, net selling price increases of 1.0% and a positive foreign exchange impact of 3.0%. Excluding the impact of the divestment of the non-core laundry detergent business in Colombia, volume increased 4.0%. The Sanex business contributed 1.0% to worldwide Net sales and volume growth in 2011. Organic sales (Net sales excluding foreign exchange, acquisitions and divestments) increased 4.0%, on organic volume growth of 3.0% in 2011. Organic volume growth excludes the impact of acquisitions and divestments.

(Dollars in Millions Except Per Share Amounts)

Net sales in the Oral, Personal and Home Care segment were $14,562 in 2011, up 8.0% from 2010, driven by volume growth of 4.0%, net selling price increases of 1.0% and a positive foreign exchange impact of 3.0%. Excluding the impact of the divestment of the non-core detergent business in Colombia, volume increased 4.5%. The Sanex business contributed 1.0% to sales and volume growth in 2011. Organic sales in the Oral, Personal and Home Care segment increased 4.5% on organic volume growth of 3.5% in 2011.

Net sales for Hill’s Pet Nutrition increased 4.5% in 2011 to $2,172 driven by net selling price increases of 1.5%, and a positive foreign exchange impact of 3.0%, while volume remained flat. Organic sales in Hill’s Pet Nutrition increased 1.5% in 2011.

Worldwide Net sales were $15,564 in 2010, up 1.5% from 2009 as volume growth of 3.0% and level selling prices were partially offset by a negative foreign exchange impact of 1.5%. Worldwide organic sales increased 3.0% in 2010.

Gross Profit

Worldwide Gross profit margin decreased to 57.3% in 2011 from 59.1% in 2010. Excluding the impact of costs associated with various business realignment and other cost-saving initiatives of 30 basis points (bps), gross profit margin was 57.6% in 2011. The decrease in 2011 was primarily due to higher raw and packaging material costs driven by global commodity cost increases (390 bps), partially offset by cost savings from the Company’s funding-the-growth initiatives (190 bps) and by higher pricing (50 bps).

Worldwide Gross profit margin increased to 59.1% in 2010 from 58.8% in 2009. The increase in 2010 was primarily driven by cost savings from the Company’s funding-the-growth initiatives (170 bps) and by higher pricing (10 bps), partially offset by higher raw and packaging material costs driven by global commodity cost increases (140 bps).

Selling, General and Administrative Expenses

Selling, general and administrative expenses as a percentage of Net sales were 34.4% in 2011, 34.8% in 2010 and 34.5% in 2009. Excluding the impact of costs associated with various business realignment and other cost saving initiatives, Selling, general and administrative expenses were 34.3% in 2011. The 50 bps decrease in 2011 was primarily due to lower advertising spending (20 bps) and lower overhead expenses (30 bps). In 2011, advertising increased 4.7% to $1,734 as compared with $1,656 in 2010, but decreased as a percentage of Net sales from 10.6% in 2010 to 10.4% in 2011. The 30 bps increase in 2010 was primarily due to higher advertising spending (60 bps), partially offset by the impact of cost-saving initiatives.

Other (Income) Expense, Net

Other (income) expense, net was ($9), $301 and $111 in 2011, 2010 and 2009, respectively. The components of Other (income) expense, net are presented below:



Other (income) expense, net	2011			2010			2009
Amortization of intangible assets	$	28		$	22		$	22
Gain on sales of non-core product lines	(207		)	(50		)	(5		)
Business realignment and other cost-saving initiatives	136			—			—
Costs related to the sale of land in Mexico	13			—			—
Charge for a French competition law matter	21			—			—
Sanex acquisition transaction costs	12			—			—
Venezuela hyperinflationary transition charge	—			271			—
Gain from remeasurement of Venezuelan balance sheet	—			(10		)	—
Remeasurement of certain liabilities in Venezuela	—			—			27
Termination benefits	—			86			—
Legal and environmental matters	11			(3		)	27
Asset impairments	—			5			16
Equity (income)	(6		)	(5		)	(5		)
Other, net	(17		)	(15		)	29
Total Other (income) expense, net	$	(9	)	$	301		$	111

(Dollars in Millions Except Per Share Amounts)

Operating Profit

In 2011, Operating profit increased 10% to $3,841 from $3,489 in 2010. In 2010, Operating profit decreased 3% to $3,489 from $3,615 in 2009.

In 2011, Operating profit was impacted by the gain on the sale of the detergent business in Colombia, costs associated with various business realignment and other cost-saving initiatives, costs related to the sale of land in Mexico and a charge for a competition law matter in France related to a divested detergent business. In 2010, Operating profit was impacted by a one-time charge related to the transition to hyperinflationary accounting in Venezuela, termination benefits and the gain on sales of non-core product lines. Excluding these items in both years, Operating profit increased 2% in 2011 and 5% in 2010 as follows:



	2011			2010			% Change		2009		% Change
Operating profit, GAAP	$	3,841		$	3,489		10	%	$	3,615	(3	)%
Gain on sales of non-core product lines	(207		)	(50		)	—		—		—
Business realignment and other cost-saving initiatives	190			—			—		—		—
Costs related to the sale of land in Mexico	13			—			—		—		—
Charge for a French competition law matter	21			—			—		—		—
Venezuela hyperinflationary transition charge	—			271			—		—		—
Termination benefits	—			86			—		—		—
Operating profit, non-GAAP	$	3,858		$	3,796		2	%	$	3,615	5	%

Interest Expense, Net

Interest expense, net was $52 in 2011 compared with $59 in 2010 and $77 in 2009. The decrease in Interest expense, net from 2010 to 2011 was mainly due to lower average interest rates, partially offset by higher debt balances. The decrease in Interest expense, net from 2009 to 2010 was due to lower average interest rates.

Income Taxes

The effective income tax rate was 32.6% in 2011, 32.6% in 2010 and 32.2% in 2009 and all years benefited from global tax strategies. The impact on the Company’s effective income tax rate of the items described above was as follows:



	2011		2010
Effective income tax rate, as reported	32.6	%	32.6	%
Gain on sales of non-core product lines	(0.1	)%	—	%
Business realignment and other cost-saving initiatives	(0.5	)%	—	%
Charge for a French competition law matter	(0.2	)%	—	%
Transition to hyperinflationary accounting in Venezuela	—	%	(2.4	)%
Termination benefits	—	%	(0.1	)%
Reorganization of an overseas subsidiary	—	%	0.8	%
Effective income tax rate, Non-GAAP	31.8	%	30.9	%

The Non-GAAP effective income tax rate of 31.8% in 2011 includes a benefit of 40 bps related to a change in state tax law. The Non-GAAP effective income tax rate of 30.9% in 2010 includes a benefit of 140 bps related to the remeasurement of the Venezuelan balance sheet and lower taxes on unpaid remittances.

Net Income attributable to Colgate-Palmolive Company

Net income attributable to Colgate-Palmolive Company was $2,431, or $4.94 per share on a diluted basis, in 2011 compared with $2,203, or $4.31 per share on a diluted basis, in 2010 and $2,291, or $4.37 per share on a diluted basis, in 2009. In 2011, Net income attributable to Colgate-Palmolive Company included an aftertax gain on the sale of the laundry detergent business in Colombia of $135 ($0.27 per diluted share), which was more than offset by aftertax costs of $177 ($0.36 per diluted share) associated with the implementation of various business realignment and other cost-saving initiatives, the sale of land in Mexico and a competition law matter in France related to a divested detergent business.

(Dollars in Millions Except Per Share Amounts)

In 2010, Net income attributable to Colgate-Palmolive Company included a one-time charge of $271 ($0.53 per diluted share) related to the transition to hyperinflationary accounting in Venezuela, $61 ($0.12 per diluted share) in aftertax charges for termination benefits, a $30 ($0.06 per diluted share) aftertax gain from the sale of non-core product lines in Latin America and a $31 ($0.06 per diluted share) aftertax gain related to the reorganization of an overseas subsidiary.

Excluding the items described above, Net income attributable to Colgate-Palmolive Company in 2011 was $2,473 as compared to $2,474 in 2010 and earnings per common share on a diluted basis increased 4% to $5.03. Excluding the items described above, Net income attributable to Colgate-Palmolive Company in 2010 increased 8% to $2,474 and earnings per share on a diluted basis increased 11% to $4.84.

Segment Results

The Company markets its products in over 200 countries and territories throughout the world in two distinct business segments: Oral, Personal and Home Care; and Pet Nutrition. The Company evaluates segment performance based on several factors, including Operating profit. The Company uses Operating profit as a measure of the operating segment performance because it excludes the impact of corporate-driven decisions related to interest expense and income taxes.

North America



	2011			2010			% Change			2009			% Change
Net sales	$	2,995		$	3,005		(0.5	)	%	$	2,950		2.0	%
Operating profit	$	791		$	884		(11	)	%	$	843		5	%
% of Net sales	26.4		%	29.4		%	(300	)	bps	28.6		%	80	bps

Net sales in North America decreased 0.5% in 2011 to $2,995, as volume growth of 2.0% and a positive foreign exchange impact of 0.5% were more than offset by net selling price decreases of 3.0%. Organic sales in North America decreased 1.0% in 2011.

Net sales in North America increased 2.0% in 2010 to $3,005 as a result of 3.5% volume growth and a 1.0% positive impact of foreign exchange, partially offset by 2.5% net selling price decreases. Organic sales in North America grew 1.0% in 2010.

Operating profit in North America decreased 11% in 2011 to $791, or 26.4% of Net sales. This decrease in Operating profit as a percentage of Net sales was driven by a decrease in Gross profit as a percentage of Net sales and by an increase in Selling, general and administrative expenses as a percentage of Net sales. The decrease in Gross profit as a percentage of Net sales was a result of lower pricing due to increased promotional investments and higher raw and packaging material costs reflecting global commodity cost increases, which were partially offset by cost savings from the Company’s funding-the-growth initiatives. Selling, general and administrative expenses as a percentage of Net sales increased due to higher overhead expenses, which were partially offset by lower advertising expenses as a percentage of Net sales.

Operating profit in North America increased 5% in 2010 to $884, or 29.4% of Net sales. The increase in Operating profit as a percentage of Net sales was driven by a decrease in Selling, general and administrative expenses as a percentage of Net sales due to lower overhead expenses and advertising expenses as a percentage of Net sales. Gross profit as a percentage of Net sales was flat as higher raw and packaging material costs and increased promotional investments were fully offset by cost savings from the Company’s funding-the-growth initiatives.

Latin America



	2011			2010			% Change			2009			% Change
Net sales	$	4,778		$	4,261		12.0		%	$	4,319		(1.5	)	%
Operating profit	$	1,414		$	1,295		9		%	$	1,360		(5	)	%
% of Net sales	29.6		%	30.4		%	(80	)	bps	31.5		%	(110	)	bps

Net sales in Latin America increased 12.0% in 2011 to $4,778, driven by volume growth of 3.0%, net selling price increases of 7.0% and a positive foreign exchange impact of 2.0%. Organic sales in Latin America increased 11.5%. Excluding the impact of the divested detergent business in Colombia, volume increased 4.5% in 2011. Volume gains were led by Mexico, Brazil and Argentina.

(Dollars in Millions Except Per Share Amounts)

Net sales in Latin America decreased 1.5% in 2010 to $4,261, as 2.0% volume growth and net selling price increases of 5.5% were more than offset by a 9.0% negative impact of foreign exchange. Organic sales in Latin America grew 7.5% in 2010.

While Operating profit in Latin America increased 9% in 2011 to $1,414, driven by strong sales growth, it decreased as a percentage of Net sales to 29.6%. This decrease in Operating profit as a percentage of Net sales was due to an increase in Selling, general and administrative expenses as a percentage of Net sales which was partially offset by an increase in Gross profit as a percentage of Net sales. The increase in Gross profit as a percentage of Net sales was driven by higher pricing and cost savings from the Company’s funding-the-growth initiatives, partially offset by higher raw and packaging material costs reflecting global commodity cost increases. The increase in Selling, general and administrative expenses as a percentage of Net sales was primarily due to higher overhead expenses and higher advertising investments supporting volume growth.

Operating profit in Latin America decreased 5% in 2010 to $1,295, or 30.4% as a percentage of Net sales. This decrease in Operating profit as a percentage of Net sales was due to a decrease in Gross profit as a percentage of Net sales and an increase in Selling, general and administrative expenses as a percentage of Net sales. The decrease in Gross profit as a percentage of Net sales was driven by higher raw and packaging material costs, which were partially offset by higher pricing and cost savings from the Company’s funding-the-growth initiatives. The increase in Selling, general and administrative expenses as a percentage of Net sales was due to higher advertising spending and higher overhead expenses, partially offset by cost savings from the Company’s funding-the-growth initiatives.

Europe/South Pacific



	2011			2010			% Change			2009			% Change
Net sales	$	3,508		$	3,220		9.0		%	$	3,271		(1.5	)	%
Operating profit	$	715		$	742		(4	)	%	$	748		(1	)	%
% of Net sales	20.4		%	23.0		%	(260	)	bps	22.9		%	10		bps

Net sales in Europe/South Pacific increased 9.0% in 2011 to $3,508, as volume growth of 5.0% and the positive impact of foreign exchange of 7.0% were partially offset by net selling price decreases of 3.0%. The Sanex business contributed 4.0% to Europe/South Pacific sales and volume growth in 2011. Organic sales in Europe/South Pacific decreased by 2.0% as organic volume growth of 1.0% was more than offset by net selling price decreases of 3.0% in 2011. Volume gains were led by the United Kingdom, Spain, France, Denmark and the GABA business.

Net sales in Europe/South Pacific decreased 1.5% in 2010 to $3,220 as volume growth of 2.0% was more than offset by net selling price decreases of 3.0% and a 0.5% negative impact of foreign exchange. Organic sales in Europe/South Pacific declined 1.0% in 2010.

Operating profit in Europe/South Pacific decreased 4% in 2011 to $715, or 20.4% of Net sales. This decrease in Operating profit as a percentage of Net sales was due to a decrease in Gross profit as a percentage of Net sales and an increase in Selling, general and administrative expenses as a percentage of Net sales. The decrease in Gross profit as a percentage of Net sales was due to lower pricing and higher raw and packaging material costs reflecting global commodity cost increases, which were partially offset by cost savings from the Company’s funding-the-growth initiatives. Selling, general and administrative expenses as a percentage of Net sales increased due to higher overhead expenses and higher advertising investments.

While Operating profit in Europe/South Pacific decreased 1% in 2010 to $742, it increased as a percentage of Net sales to 23.0%. This increase in Operating profit as a percentage of Net sales was driven by an increase in Gross profit as a percentage of Net sales due to a continued focus on cost-saving initiatives, partially offset by increased promotional investments. Selling, general and administrative expenses as a percentage of Net sales remained flat as higher advertising spending as a percentage of Net sales was offset by a reduction of overhead expenses as a percentage of Net sales.

Greater Asia/Africa



	2011			2010			% Change			2009			% Change
Net sales	$	3,281		$	2,998		9.5		%	$	2,655		13.0	%
Operating profit	$	807		$	767		5		%	$	631		22	%
% of Net sales	24.6		%	25.6		%	(100	)	bps	23.8		%	180	bps

(Dollars in Millions Except Per Share Amounts)

Net sales in Greater Asia/Africa increased 9.5% in 2011 to $3,281, driven by volume growth of 6.5%, net selling price increases of 1.0% and a 2.0% positive impact of foreign exchange. The Sanex business contributed 0.5% to Greater Asia/Africa sales and volume growth in 2011. Organic sales in Greater Asia/Africa grew 7.0% on organic volume growth of 6.0% in 2011. Volume gains were led by India, the Greater China region, Russia, and South Africa.

While Operating profit in Greater Asia/Africa increased 5% in 2011 to $807, driven by strong sales growth, it decreased as a percentage of Net sales to 24.6%. This decrease in Operating profit as a percentage of Net sales was due to a decrease in Gross profit as a percentage to Net sales which was partially offset by a decrease in Selling, general and administrative expenses as a percentage of Net sales. The decrease in Gross profit as a percentage of Net sales was due to higher raw and packaging material costs reflecting global commodity cost increases, partially offset by higher pricing and cost savings from the Company’s funding-the-growth initiatives. Selling, general and administrative expenses as a percentage of Net sales decreased due to lower advertising expenses and lower overhead expenses as a percentage of Net sales.

Operating profit in Greater Asia/Africa increased 22% in 2010 to $767, or 25.6% as a percentage of Net sales. This increase in Operating profit as a percentage of Net sales was due to an increase in Gross profit as a percentage to Net sales which was partially offset by an increase in Selling, general and administrative expenses as a percentage of Net sales. The increase in Gross profit as a percentage of Net sales was due to a continued focus on cost-saving initiatives, partially offset by increased promotional investments. Selling, general and administrative expenses as a percentage of Net sales increased due to higher advertising expenses, partially offset by a reduction of overhead expenses as a percentage of Net sales.

Hill's Pet Nutrition



	2011			2010			% Change			2009			% Change
Net sales	$	2,172		$	2,080		4.5		%	$	2,132		(2.5	)	%
Operating profit	$	560		$	559		—		%	$	555		1		%
% of Net sales	25.8		%	26.9		%	(110	)	bps	26.0		%	90		bps

Net sales for Hill’s Pet Nutrition increased 4.5% in 2011 to $2,172. Net selling prices increased 1.5%, foreign exchange was positive 3.0% and volume was flat. Organic sales in Hill’s Pet Nutrition increased 1.5% in 2011. Volume gains, driven by Russia, South Africa, Brazil and Canada, were offset by volume declines in the United States and Japan.

Net sales for Hill's Pet Nutrition decreased 2.5% in 2010 to $2,080, as 2.0% volume declines and 1.5% net selling price decreases were partially offset by a 1.0% positive impact of foreign exchange. Organic sales in Hill's Pet Nutrition declined 3.5% in 2010.

While Operating profit in Hill’s Pet Nutrition was flat in 2011 at $560, it decreased as a percentage of Net sales to 25.8%. This decrease in Operating profit as a percentage of Net sales was due to a decrease in Gross profit as a percentage of Net sales, which was partially offset by a decrease in Selling, general and administrative expenses as a percentage of Net sales. The decrease in Gross profit as a percentage of Net sales was due to higher raw and packaging material costs reflecting global commodity cost increases and increased manufacturing overhead expenses due to increased investments in capacity, partially offset by cost savings from the Company’s funding-the-growth initiatives and higher pricing. Selling, general and administrative expenses decreased as a percentage of Net sales due to lower advertising, partially offset by an increase in overhead expenses as a percentage of Net sales.

Operating profit in Hill’s Pet Nutrition increased 1% in 2010 to $559, or 26.9% of Net sales. This increase in Operating profit as a percentage of Net sales was due to an increase in Gross profit as a percentage of Net sales and a decrease in Selling, general and administrative expenses as a percentage of Net sales. The increase in Gross profit as a percentage of Net sales was due to lower raw and packaging material costs and cost savings from the Company’s funding-the-growth initiatives, partially offset by increased promotional investments. Selling, general and administrative expenses decreased as a percentage of Net sales due to lower overhead and advertising expenses.

Corporate



	2011			2010			% Change			2009			% Change
Operating profit	$	(446	)	$	(758	)	(41	)	%	$	(522	)	45	%

(Dollars in Millions Except Per Share Amounts)

Corporate operations include Corporate overhead costs, research and development costs, stock-based compensation expense related to stock options and restricted stock awards, restructuring and related implementation costs and gains and losses on sales of non-core product lines and assets. The components of Operating profit (loss) for the Corporate segment are presented below:



	2011			2010			2009
Gain on sales of non-core product lines	$	207		$	50		$	—
Business realignment and other cost-saving initiatives	(190		)	—			—
Costs related to the sale of land in Mexico	(13		)	—			—
Charge for a French competition law matter	(21		)	—			—
Sanex acquisition transaction costs	(12		)	—			—
Venezuela hyperinflationary transition charge	—			(271		)	—
Termination benefits	—			(86		)	—
Corporate overhead costs and other, net	(417		)	(451		)	(522		)
Total Corporate Operating profit (loss)	$	(446	)	$	(758	)	$	(522	)

Non-GAAP Financial Measures

Net sales growth, both worldwide and in relevant geographic divisions, is discussed in this Annual Report on Form 10-K both on a GAAP basis and excluding divestments (non-GAAP). Management believes this non-GAAP financial measure provides useful supplemental information to investors as it allows comparisons of Net sales growth from ongoing operations. This Annual Report on Form 10-K ~~also~~ discusses organic sales growth (Net sales growth excluding the impact of foreign exchange, acquisitions and divestments) (non-GAAP). Management believes this measure provides investors with useful supplemental information regarding the Company’s underlying sales trends by presenting sales growth excluding the external factor of foreign exchange, as well as the impact of acquisitions and divestments. A reconciliation of organic sales growth to Net sales growth for the years ended December 31, 2011 and 2010 is provided below.

Worldwide Gross profit margin, Selling, general and administrative expenses, Operating profit, ~~and the~~ effective tax rate, Net income attributable to Colgate-Palmolive Company and earnings per share on a diluted basis are discussed in this Annual Report on Form 10-K both on a GAAP basis and excluding the ~~impact~~impacts of the gains on the sales of non-core product lines, costs associated with various business realignment and other cost-saving initiatives, costs related to the sale of land in Mexico, a charge for a competition law matter in France related to a divested detergent business, the one-time charge related to the transition to hyperinflationary accounting in Venezuela, astermination benefits and the gain related to the reorganization of ~~January 1, 2010, the 2004 Restructuring Program and certain other items described above~~an overseas subsidiary (non-GAAP). Management believes these non-GAAP financial measures provide investors with useful supplemental information regarding the ~~Company’s underlying business trends and~~ performance of the Company’s ongoing ~~operations~~operations. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures for the years ended December 31, 2011 and ~~are useful for period-over-period comparisons of such operations.~~2010 is presented below.

The Company uses the above financial measures internally in its budgeting process and as a factor in determining compensation. While the Company believes that these non-GAAP financial measures are useful in evaluating the Company’s business, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similar measures presented by other companies.

~~Restructuring and Related Implementation Charges~~

The ~~Company’s four-year restructuring and business building program (the 2004 Restructuring Program)~~following table provides a quantitative reconciliation of organic sales growth to ~~enhance the Company’s global leadership position in its core businesses was finalized as~~Net sales growth for each of ~~December 31, 2008. There were no charges incurred in~~ the years ended December 31, 2011 and 2010 ~~and 2009. Charges incurred~~versus the prior year:



Year ended December 31, 2011	Organic Sales Growth (Non-GAAP)	Foreign Exchange Impact	Acquisitions and Divestments Impact	Net Sales Growth (GAAP)
Oral, Personal and Home Care
North America	(1.0)%	0.5%	0.0%	(0.5)%
Latin America	11.5%	2.0%	(1.5)%	12.0%
Europe/South Pacific	(2.0)%	7.0%	4.0%	9.0%
Greater Asia/Africa	7.0%	2.0%	0.5%	9.5%
Total Oral, Personal and Home Care	4.5%	3.0%	0.5%	8.0%
Pet Nutrition	1.5%	3.0%	0.0%	4.5%
Total Company	4.0%	3.0%	0.5%	7.5%

(Dollars in ~~2008 amounted~~Millions Except Per Share Amounts)



Year ended December 31, 2010	Organic Sales Growth (Non-GAAP)	Foreign Exchange Impact	Acquisitions and Divestments Impact	Net Sales Growth (GAAP)
Oral, Personal and Home Care
North America	1.0%	1.0%	0.0%	2.0%
Latin America	7.5%	(9.0)%	0.0%	(1.5)%
Europe/South Pacific	(1.0)%	(0.5)%	0.0%	(1.5)%
Greater Asia/Africa	9.0%	4.0%	0.0%	13.0%
Total Oral, Personal and Home Care	4.0%	(2.0)%	0.0%	2.0%
Pet Nutrition	(3.5)%	1.0%	0.0%	(2.5)%
Total Company	3.0%	(1.5)%	0.0%	1.5%

The following table provides a quantitative reconciliation of various (Non-GAAP) financial measures to ~~$164. The restructuring accrual decreased from $15 at~~the most directly comparable GAAP financial measures for the years ended December 31, ~~2009 to $8 at December 31, 2010, primarily due to cash payments for termination benefits, exit activities~~2011 and ~~the implementation of strategies.~~2010:



	2011																		2010
	As Reported (GAAP)			Gain on Sale of Colombia Detergent Business			Business Realignment Initiatives			Mexico Land Sale			French Competition Law Matter			As Adjusted (Non- GAAP )			As Reported¹ (GAAP)			Venezuela Hyper-inflationary			Termination Benefits			Gain on Sale of Non-Core Product Lines			Tax Initiatives²			As Adjusted(Non-GAAP ¹)
Cost of sales	$	7,144					$	44								$	7,100
Gross profit	9,590						(44		)							9,634
Gross profit margin	57.3		%													57.6		%
Selling, general and administrative expenses	5,758						10									5,748
Other (income) expense, net	(9		)	$	(207	)	$	136		$	13		$	21		28			$	301		$	271		$	86		$	(50	)	$	—		$	(6	)
Operating profit	3,841			207			(190		)	(13		)	(21		)	3,858			3,489			(271		)	(86		)	50			—			3,796
Operating profit margin	23.0		%													23.1		%	22.4		%													24.4		%
Income before income taxes	3,789			207			(190		)	(13		)	(21		)	3,806			3,430			(271		)	(86		)	50			—			3,737
Provision for income taxes	1,235			72			(42		)	(4		)	—			1,209			1,117			—			(25		)	20			(31		)	1,153
Effective tax rate	32.6		%													31.8		%	32.6		%													30.9		%
Net income including noncontrolling interests	2,554			135			(148		)	(9		)	(21		)	2,597			2,313			(271		)	(61		)	30			31			2,584
Net income attributable to Colgate-Palmolive Company	$	2,431		$	135		$	(147	)	$	(9	)	$	(21	)	$	2,473		$	2,203		$	(271	)	$	(61	)	$	30		$	31		$	2,474
Earnings per common share³
Basic	$	4.98		$	0.28		$	(0.30	)	$	(0.02	)	$	(0.04	)	$	5.06		$	4.45		$	(0.56	)	$	(0.13	)	$	0.06		$	0.06		$	5.00
Diluted	$	4.94		$	0.27		$	(0.30	)	$	(0.02	)	$	(0.04	)	$	5.03		$	4.31		$	(0.53	)	$	(0.12	)	$	0.06		$	0.06		$	4.84

Includes a $46 pretax gain ($59 aftertax gain, $0.12 diluted earnings per share) related to the remeasurement of the Venezuelan balance sheet and lower taxes on accrued but unpaid remittances resulting from the currency devaluation in January 2010 and a $36 pretax loss ($2 aftertax gain) related to the remeasurement of the Venezuelan balance sheet and lower taxes on accrued but unpaid remittances resulting from the currency devaluation announced in December 2010.


²	Includes a gain related to a tax initiative involving the reorganization of an overseas subsidiary.


³	The impact of Non-GAAP adjustments on the basic and diluted earnings per share may not necessarily equal the difference between "As Reported (GAAP)" and "As Adjusted (Non-GAAP)" as a result of rounding.

(Dollars in Millions Except Per Share Amounts)

Liquidity and Capital Resources

The Company expects cash flow from operations and debt issuances will be sufficient to meet foreseeable business operating and recurring cash needs (including for debt service, dividends, capital expenditures and ~~planned~~ stock repurchases). The Company believes its strong cash generation and financial position should continue to allow it broad access to global credit and capital markets.

~~Table of Contents~~

~~(Dollars in Millions Except Per Share Amounts)~~

Cash Flow

Net cash provided by operations in ~~2010~~2011 was ~~$3,211~~$2,896 as compared with ~~$3,277~~$3,211 in ~~2009~~2010 and ~~$2,302~~$3,277 in ~~2008.~~2009. The decrease in 2011 as compared to 2010 was primarily due to an increase in voluntary benefit plan contributions. The decrease in 2010 as compared to 2009 was due to increased working capital. The increase in 2009 as compared to 2008 reflects improved profitability, decreased working capital and lower cash spending related to the 2004 Restructuring Program, partially offset by higher tax payments.

The Company defines working capital as the difference between current assets (excluding cash and cash equivalents and marketable securities, the latter of which is reported in Other current assets) and current liabilities (excluding short-term debt). ~~Overall, the~~The Company’s working capital increased to ~~0.3%~~0.7% of Net sales in ~~2010~~2011 as compared with ~~(0.4%)~~0.3% in ~~2009.~~2010. The increase in working capital as a percentage of Net sales in 2011 versus 2010 was primarily due ~~primarily~~ to ~~lower accrued income taxes.~~higher levels of accounts receivable and inventories. Although higher in absolute dollars, accounts receivable and inventory levels were in line with prior year levels of days sales outstanding for receivables and months coverage of inventory.

Investing activities used ~~$658 of cash~~$1,213 in 2011, compared with $658 and $841 during 2010 ~~compared~~and 2009, respectively. The increase was primarily due to the purchase of the Sanex business for $966 which was funded with ~~uses~~available cash, including the proceeds from the sale of ~~$841~~the Company’s Euro-denominated investment portfolio, and ~~$613 during~~the issuance of commercial paper, partially offset by the sale of the Company’s laundry detergent business in Colombia for $215. Additionally, in 2011, the Company’s Mexican subsidiary entered into an agreement to sell the Mexico City site on which its commercial operations, technology center and soap production facility are located. The sale price is payable in three installments, with the final installment due upon the transfer of the property, which is expected to occur in 2014. During 2011, the Company received the first installment of $24. Capital expenditures were $537, $550 and $575 for 2011, 2010 and 2009, ~~and 2008,~~ respectively. Capital expenditures were $550, $575 and $684 for 2010, 2009 and 2008, respectively. Lower capital expenditures in 2010 and 2009 reflected the completion of certain capacity expansions, as well as the completion of the 2004 Restructuring Program at the end of 2008. Capital spending continuescontinue to focus primarily on projects that are expected to yield high aftertax returns. ~~Overall capital~~Capital expenditures for ~~2011~~2012 are expected to ~~represent~~be at an annual rate of approximately 3.5% of Net sales.

Net cash outflows from activity related to marketable securities and other investments were lower in 2010 than in 2009. During 2009, the Company purchased $210 of U.S. dollar-denominated bonds issued by a Venezuelan state-owned corporation and $50 of U.S. dollar-linked, devaluation-protected bonds issued by the Venezuelan government. During 2010, CP Venezuela sold all of the U.S. dollar-denominated bonds to obtain U.S. dollars in order to support current and future operations and purchased an additional $67 of the U.S. dollar-linked, devaluation-protected bonds to reduce the Company’s exposure to the Venezuelan bolivar fuerte. See Notes 7 and 14 to the Consolidated Financial Statements. Separately, during 2010, the Company invested $136 in a portfolio of euro-denominated investment grade fixed incom e securities, including corporate bonds.

Financing activities used ~~$2,624~~$1,242 of cash during ~~2010~~2011 compared to ~~$2,270~~$2,624 and ~~$1,530~~$2,270 during ~~2009~~2010 and ~~2008, respectively.~~2009. This difference was primarily due to higher net proceeds from the issuance of debt and a lower level of share repurchases. The increase in 2010 was primarily due to higher repurchases of common stock and dividends paid, partially offset by higher net proceeds from issuances of debt. ~~The increase in 2009 was primarily due to higher net debt payments and an increase in dividends paid.~~

Long-term debt, including the current portion, increased to ~~$3,376~~$4,776 as of December 31, 2011, as compared to $3,376 as of December 31, 2010, ~~as compared to $3,147 as of December 31, 2009~~ and total debt increased to ~~$3,424~~$4,810 as of December 31, ~~2010~~2011, as compared to ~~$3,182~~$3,424 as of December 31, ~~2009.~~2010. During the fourth quarter of 2011, the Company issued $300 of U.S. dollar-denominated three-year notes at a fixed rate of 0.6%, $400 of U.S. dollar-denominated five-year notes at a fixed rate of 1.3% and $300 of U.S. dollar-denominated ten-year notes at a fixed rate of 2.45% under the Company’s shelf registration statement. Proceeds from the debt issuances were used to reduce commercial paper borrowings and to repay outstanding indebtedness under a €408 credit facility. During the second quarter of 2011, the Company issued $250 of U.S. dollar-denominated three-year notes at a fixed rate of 1.250% and $250 of U.S. dollar-denominated six-year notes at a fixed rate of 2.625% under the Company’s shelf registration statement. During the fourth quarter of 2010, the Company issued $250 of ten-year notes at a fixed rate of 2.95% and $188 of five-year notes at a fixed rate of 1.375% under the Company’s shelf registration statement. ~~Proceeds from the debt issuances were used to reduce commercial paper borrowings.~~ During the third quarter of 2009, the Company issued $300 of U.S. dollar-denominated six-year notes at a fixed rate of 3.15% under the Company’s shelf registration statement. Proceeds from the debt ~~issuance~~issuances in the second quarter of 2011, fourth quarter of 2010 and third quarter of 2009 were used to reduce commercial paper ~~and other~~ borrowings.

At December 31, ~~2010,~~2011, the Company had access to unused domestic and foreign lines of credit of ~~$2,317~~$2,705 (including under the two facilities discussed below) and could also issue medium-term notes pursuant to an effective shelf registration statement. ~~The~~In November 2011, the Company ~~has borrowing capacity under its domestic~~entered into a new five-year revolving credit facility with a capacity of ~~$1,600, and~~$1,850 with a syndicate of banks. The facility, which expires in November 2016, replaced an existing credit facility with a capacity of $1,600 which was due to expire in November 2012. The Company also has the ability to draw $145 from a revolving credit facility ~~has an expiration date of~~ that expires in November ~~2012. These domestic lines~~2012. Commitment fees related to credit facilities are ~~available for general corporate purposes and to support the issuance of commercial paper.~~not material.

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~~(Dollars in Millions Except Per Share Amounts)~~

Domestic and foreign commercial paper outstanding was ~~$214~~$671 and $0$214 as of December 31, ~~2010~~2011 and ~~2009,~~2010, respectively. The average daily balances outstanding for commercial paper in 2011 and 2010 were $1,497 and ~~2009 were~~ $1,146, ~~and $1,144,~~ respectively. The

(Dollars in Millions Except Per Share Amounts)

maximum daily balance outstanding for commercial paper during 2011 and 2010 was $1,897 and ~~2009 was~~ $1,628, ~~and $1,556,~~ respectively. The Company regularly classifies commercial paper and certain current maturities of notes payable as long-term debt as it has the intent and ability to refinance such obligations on a long-term basis, including, if necessary, by utilizing its line of credit that expires in ~~2012.~~2016.

Following is a summary of the Company’s commercial paper and global short-term borrowings as of December 31, ~~2010~~2011 and ~~2009:~~2010:


	2010								2009								2011					2010
	Weighted Average Interest Rate			Maturities		Outstanding			Weighted Average Interest Rate			Maturities		Outstanding			Weighted Average Interest Rate		Maturities	Outstanding		Weighted Average Interest Rate		Maturities	Outstanding
Payable to banks		3.1	%		2011		$	48		0.7	%		2010		$	35	0.9	%	2012	$	34	3.1	%	2011	$	48
Commercial paper		0.2	%		2011			214		—			—			—	0.1	%	2012	671		0.2	%	2011	214
Total							$	262							$	35				$	705				$	262

Certain of the facilities with respect to the Company’s bank borrowings contain financial and other covenants as well as cross-default provisions. Noncompliance with these requirements could ultimately result in the acceleration of amounts owed. The Company is in full compliance with all such requirements and believes the likelihood of noncompliance is remote. See Note 65 to the Consolidated Financial Statements for further information about the Company’s long-term debt and credit facilities.

Dividend payments in ~~2010~~2011 were ~~$1,142,~~$1,203, an increase from ~~$981~~$1,142 in ~~2009~~2010 and ~~$889~~$981 in ~~2008.~~2009. Common stock dividend payments increased to $2.27 per share in 2011 from $2.03 per share in 2010 ~~from~~and $1.72 per share in ~~2009 and $1.56 per share in 2008.~~2009. The Series B Preference stock dividend payments ~~increased to~~were $16.24 per share in 2010 ~~from~~and $13.76 per share in ~~2009 and $12.48 per share in 2008.~~2009. The Series B Preference Stock was converted to common stock on December 29, 2010. On February ~~4, 2010,~~24, 2011, the Company’s Board of Directors increased the quarterly common stock cash dividend to ~~$0.53~~$0.58 per share, effective as of the second quarter ~~2010.~~2011.

The Company repurchases shares of its common stock in the open market and in private transactions to maintain its targeted capital structure and to fulfill certain requirements of its compensation and benefit plans. On ~~February 4, 2010~~September 8, 2011 the Company’s Board of Directors authorized a new share repurchase program (the ~~2010~~2011 Program) that replaced the Company’s previous share repurchase program which had been approved in ~~2008~~2010 (the ~~2008~~2010 Program). The ~~2010~~2011 Program authorizes the repurchase of up to 4050 million shares of the Company’s common stock. The Board also has authorized share repurchases on an ongoing basis to fulfill certain requirements of the Company’s compensation and benefit programs.

Aggregate repurchases in 2011 consisted of 20.4 million common shares under both the 2011 Program and the 2010 Program, and 0.9 million common shares to fulfill the requirements of compensation and benefit plans, for a total purchase price of $1,806. Aggregate repurchases in 2010 ~~included~~consisted of 24.4 million common shares under both the 2010 Program and the 2008 Program, and 1.0 million common shares to fulfill the requirements of compensation and benefit plans, for a total purchase price of $2,020. Aggregate repurchases in 2009 ~~included~~consisted of 13.9 million common shares under the 2008 Program and 1.0 million common shares to fulfill the requirements of compensation and benefit plans, for a total purchase price of $1,063. Aggregate repurchases in 2008 included 13.8 million common shares under the 2008 Program and the repurchase program approved by the Board in 2006, and 0.9 million common shares to fulfill the requirements of compensation and benefit plans, for a total purchase price of $1,073.

~~Table of Contents~~

~~(Dollars in Millions Except Per Share Amounts)~~

The following represents the scheduled maturities of the Company’s contractual obligations as of December 31, ~~2010:~~

Payments Due by Period
Total 2011 2012 2013 2014 2015 Thereafter
Long-term debt including current portion $ 3,376 $ 775 $ 359 $ 268 $ 332 $ 481 $ 1,161
Net cash interest payments on long-term debt(1)
539 84 67 63 55 44 226
Leases 1,225 187 163 137 119 111 508
Purchase obligations(2)
523 317 124 45 24 13 —
Total $ 5,663 $ 1,363 $ 713 $ 513 $ 530 $ 649 $ 1,895

~~____________~~2011:



			Payments Due by Period
	Total		2012		2013		2014		2015		2016		Thereafter
Long-term debt including current portion	$	4,776	$	1,017	$	264	$	882	$	493	$	254	$	1,866
Net cash interest payments on long-term debt⁽¹⁾	618		86		81		72		59		49		271
Leases	1,282		201		174		153		141		123		490
Purchase obligations⁽²⁾	460		196		161		57		31		15		—
Total	$	7,136	$	1,500	$	680	$	1,164	$	724	$	441	$	2,627

_______


⁽¹⁾	Includes the net interest payments on fixed and variable rate debt and associated interest rate swaps. Interest payments associated with floating rate instruments are based on management’s best estimate of projected interest rates for the remaining term of variable rate debt.

⁽²⁾

The Company had outstanding contractual obligations with suppliers at the end of ~~2010~~2011 for the purchase of raw, packaging and other materials and services in the normal course of business. These purchase obligation amounts represent only those items which are based on agreements that are ~~enforceable and~~ legally binding and that specify minimum quantity, price and term and do not represent total anticipated purchases.

(Dollars in Millions Except Per Share Amounts)

Long-term liabilities associated with the Company’s postretirement plans are excluded from the table above due to the uncertainty of the timing of these cash disbursements. The amount and timing of cash funding related to these benefit plans will generally depend on local regulatory requirements, various economic assumptions (the most significant of which are detailed in “Critical Accounting Policies and Use of ~~Estimates,”~~Estimates” below) and voluntary Company contributions. Based on current information, the Company does not anticipate having to make any mandatory contributions to its qualified U.S. pension plan until ~~2012.~~2013. Management’s best estimate of ~~cash requirements~~voluntary contributions to ~~be paid directly from~~ the ~~Company’s assets for its postretirement~~U.S. pension plans for the year ending December 31, ~~2011,~~2012 is ~~approxima tely $208, including~~ approximately ~~$100 of voluntary contributions~~$100. In addition, total benefit payments to ~~our U.S. pension plans.~~be paid to participants for the year ending December 31, 2012 from the Company's assets is estimated to be approximately $87.

Additionally, liabilities for unrecognized income tax benefits are excluded from the table above as the Company is unable to reasonably predict the ultimate amount or timing of a settlement of such liabilities. See Note 1110 to the Consolidated Financial Statements for more information.

As more fully described in Note 1312 to the Consolidated Financial Statements, the Company is contingently liable with respect to lawsuits, environmental matters, taxes and other matters arising in the ordinary course of business.

Off-Balance Sheet Arrangements

The Company does not have off-balance sheet financing or unconsolidated special purpose entities.

~~Table of Contents~~

~~(Dollars in Millions Except Per Share Amounts)~~

Managing Foreign Currency, Interest Rate and Commodity Price Exposure

The Company is exposed to market risk from foreign currency exchange rates, interest rates and commodity price fluctuations. Volatility relating to these exposures is managed on a global basis by utilizing a number of techniques, including working capital management, selling price increases, selective borrowings in local currencies and entering into selective derivative instrument transactions, issued with standard features, in accordance with the Company’s treasury and risk management policies. The Company’s treasury and risk management policies prohibit the use of derivatives for speculative purposes and leveraged derivatives for any purpose.

The sensitivity of our financial instruments to market fluctuations is discussed below. See Notes 2 and 76 to the Consolidated Financial Statements for further discussion of derivatives and hedging policies and fair value measurements.

Foreign Exchange Risk

As the Company markets its products in over 200 countries and territories, it is exposed to currency fluctuations related to manufacturing and selling its products in currencies other than the U.S. dollar. ~~The Company’s foreign currency exposures primarily reflect the Company’s operations in Latin America (27% of Net sales), Europe/South Pacific (21% of Net sales) and Asia/Africa (19% of Net sales).~~ The Company manages its foreign currency exposures through a combination of cost-containment measures, selling price increases and the hedging of certain costs in an effort to minimize the impact on earnings of foreign currency rate movements. See the “Results of Operations” section above for discussion of the foreign exchange impact on Net sales in each segment.

The assets and liabilities of foreign 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 translated into U.S. dollars at average rates of exchange prevailing during the year.

For subsidiaries operating in highly inflationary environments (currently, Venezuela), inventories, ~~prepaids,~~prepaid expenses, goodwill and property, plant and equipment are remeasured at their historical exchange rates, while other assets and liabilities are remeasured at year-end exchange rates. Remeasurement adjustments for these operations are included in Net income attributable to Colgate-Palmolive Company.

The Company primarily utilizes foreign currency contracts, including forward, option and swap contracts, local currency deposits and local currency borrowings to hedge portions of its exposures relating to foreign currency purchases, assets and liabilities created in the normal course of business and the net investment in certain foreign subsidiaries. The duration of foreign currency contracts generally does not exceed 12 months and the contracts are valued using observable market rates.

(Dollars in Millions Except Per Share Amounts)

The Company’s foreign currency forward contracts that qualify for cash flow hedge accounting resulted in net unrealized gains of $1 at December 31, 2011 and net unrealized losses of $3 at December 31, ~~2010 and net unrealized gains of $4 at December 31, 2009.~~2010. Changes in the fair value of cash flow hedges are recorded in Other comprehensive income (loss) and are reclassified into earnings in the same period or periods during which the underlying hedged transaction is recognized in earnings. At the end of ~~2010,~~2011, an unfavorable 10% change in exchange rates would have resulted in a net unrealized loss of ~~$40.~~

~~Table of Contents~~

~~(Dollars in Millions Except Per Share Amounts)~~$42.

Interest Rate Risk

The Company manages its ~~targeted~~ mix of fixed and floating rate debt against its target with debt issuances and by entering into interest rate swaps in order to mitigate fluctuations in earnings and cash flows that may result from interest rate volatility. The notional amount, interest payment and maturity date of the swaps match the principal, interest payment and maturity date of the related debt in all cases, and the swaps are valued using observable benchmark rates.

Based on year-end ~~2010~~2011 variable rate debt levels, a 1-percentage-point increase in interest rates would have increased Interest expense, net by ~~$14~~$18 in ~~2010.~~2011.

Commodity Price Risk

The Company is exposed to price volatility related to raw materials used in production, such as resins, ~~tallow,~~tropical oils, essential oils, ~~tropical oils,~~tallow, corn and soybeans. The Company manages its raw material exposures through a combination of cost containment measures, ongoing productivity initiatives and the limited use of commodity hedging contracts. Futures contracts are used on a limited basis, primarily in the Pet Nutrition segment, to manage volatility related to anticipated raw material inventory purchases of certain traded commodities.

The Company’s open commodity derivative contracts, which qualify for cash flow hedge accounting, resulted in net unrealized losses of $1 and net unrealized gains of $4 ~~and $0~~ for the years ended December 31, ~~2010~~2011 and ~~2009,~~2010, respectively. At the end of ~~2010,~~2011, an unfavorable 10% change in commodity futures prices would have ~~reduced~~increased the net unrealized ~~gain~~loss to ~~$2.~~$3.

Credit Risk

The Company is exposed to the risk of credit loss in the event of nonperformance by counterparties to financial instrument contracts; however, nonperformance is considered unlikely and any nonperformance is unlikely to be material as it is the Company’s policy to contract with highly rated, diverse counterparties.

Recent Accounting Pronouncements

~~No new accounting pronouncement~~In June 2011, the Financial Accounting Standards Board (FASB) issued ~~or which became effective during~~Accounting Standards Update (ASU) No. 2011-05, “Presentation of Comprehensive Income” ASU No. 2011-05 eliminates the ~~fiscal year~~current option to disclose other comprehensive income and its components in the statement of changes in equity. As permitted under ASU No. 2011-05, the Company has ~~had or is expected~~elected to present items of net income and other comprehensive income in two separate consecutive statements beginning in the first quarter of 2012. This standard will not have a material impact on the ~~Consolidated Financial Statements.~~Company's financial position or results of operations.

Critical Accounting Policies and Use of Estimates

The preparation of financial statements requires management to use judgment and make estimates. The level of uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are completed. Actual results could ultimately differ from those estimates. The accounting policies that are most critical in the preparation of the Company’s Consolidated Financial Statements are those that are both important to the presentation of the Company’s financial condition and results of operations and require significant or complex judgments and estimates on the part of management. The Company’s critical accounting policies are reviewed periodically with the Audit Committee of the Board of Directors.

In certain instances, accounting principles generally accepted in the United States of America allow for the selection of alternative accounting methods. The Company’s significant policies that involve the selection of alternative methods are accounting for shipping and handling costs and inventories.

~~Table of Contents~~

~~(Dollars in Millions Except Per Share Amounts)~~

▪

Shipping and handling costs may be reported as either a component of cost of sales or selling, general and administrative expenses. The Company reports such costs, primarily related to warehousing and outbound freight, in the Consolidated Statements of Income as a component of Selling, general and administrative expenses. Accordingly, the Company’s gross profit margin is not comparable with the gross profit margin of those companies that include shipping and handling charges in cost of sales. If such costs had been included in cost of sales, gross profit margin as a

(Dollars in Millions Except Per Share Amounts)

percent of sales would have decreased by 750 bps, from 57.3% to 49.8% in 2011 and decreased by 730 bps ~~from 59.1% to 51.8%,~~ in 2010 and ~~decreased by 730 and 780 bps in~~ 2009, ~~and 2008, respectively,~~ with no impact on reported earnings.

	§
▪	The Company accounts for inventories using both the first-in, first-out (FIFO) method ~~(79%~~(80% of inventories) and the last-in, first-out (LIFO) method ~~(21%~~(20% of inventories). There would have been no material impact on reported earnings for 2011, 2010 ~~2009~~ and ~~2008~~2009 had all inventories been accounted for under the FIFO method.

The areas of accounting that involve significant or complex judgments and estimates are pensions and other postretirement benefits, stock options, asset impairments, uncertain tax positions, tax valuation allowances and legal and other contingencies.

▪

In pension accounting, the most significant actuarial assumptions are the discount rate and the long-term rate of return on plan assets. The discount rate for U.S. defined benefit plans was ~~5.30%~~4.90%, ~~5.75%~~5.30% and ~~6.30%~~5.75% as of December 31, 2011, 2010 ~~2009~~ and ~~2008,~~2009, respectively. The discount rate for other U.S. postretirement plans was ~~5.30%~~5.26%, ~~5.75%~~5.30% and ~~5.80%~~5.75% as of December 31, 2011, 2010 ~~2009~~ and ~~2008,~~2009, respectively. Discount rates used for the U.S. defined benefit and other postretirement plans are based on a yield curve constructed from a portfolio of high-quality bonds for which the timing and amount of cash outflows approximate the estimated payouts of the U.S. plans. For the Company’s international plans, the discount rates are set by benchmarking against investment-grade corporate bonds rated AA. The assumed long-term rate of return on plan assets for U.S. plans was ~~8.0%~~7.75% as of December 31, 2011 and 8.00% as of December 31, 2010 ~~2009~~ and ~~2008.~~2009. In determining the long-term rate of return, the Company considers the nature of the plans’ investments, an expectation for the plans’ investment strategies and the historical rate of return.

Average annual rates of return for the U.S. plans for the most recent 1-year, 5-year, 10-year, 15-year and 25-year periods were ~~12%~~3%, 5%3%, 5%6%, 7%, and 8%, respectively. In addition, the current rate of return assumption for the U.S. plans is based upon a targeted asset allocation of approximately 40% in fixed income securities, 52% in equity securities and 8% in real estate and alternative investments. A 1% change in the assumed rate of return on plan assets of the U.S. pension plans would impact future Net income attributable to Colgate-Palmolive Company by approximately ~~$2.~~$9. A 1% change in the discount rate for the U.S. pension plans would impact future Net income attributable to Colgate-Palmolive Company by approximately ~~$7.~~$5. A third assumption is the long-term rate of compensation increase, a change in which would partially ~~of fset~~offset the impact of a change in either the discount rate or the long-term rate of return. This rate was 4.0% as of December 31, 2011, 2010 ~~2009~~ and ~~2008.~~2009. Refer to Note 109 to the Consolidated Financial Statements for further discussion of the Company’s pension and other postretirement plans.

▪

The assumption requiring the most judgment in accounting for other postretirement benefits is the medical cost trend rate. The Company reviews external data and its own historical trends for health care costs to determine the medical cost trend rate. The assumed rate of increase is ~~8.33%~~8.0% for ~~2011,~~2012, declining to ~~5.00%~~5.0% by ~~2016~~2018 and remaining at ~~5.00%~~5.0% for the years thereafter. The effect of a 1% increase in the assumed long-term medical cost trend rate would ~~reduce~~decrease Net income attributable to Colgate-Palmolive Company by $5.

▪

The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such as stock options and restricted stock, based on the fair value of those awards at the date of grant. The Company uses the Black-Scholes-Merton (Black-Scholes) option pricing model to determine the fair value of stock-option awards. The weighted-average estimated fair value of each stock option granted for the year ended December 31, ~~2010~~2011 was ~~$11.00.~~$11.93. The Black-Scholes model uses various assumptions to determine the fair value of options. These assumptions include the expected term of options, expected volatility, risk-free interest rate and expected dividend yield. While these assumptions do not require significant judgment, as the significant inputs are determined from historical experience or independent third-party sources, changes in these inputs could result in significant ~~chang es~~changes in fair value. A one-year change in term would result in a change in fair value of approximately 7%. A one percent change in volatility would change fair value by approximately 5%6%.

~~Table of Contents~~

~~(Dollars in Millions Except Per Share Amounts)~~

▪

The asset impairment analysis performed for goodwill and intangible assets requires several estimates, including future cash flows, growth rates and the selection of a discount rate. ~~Since~~Except for the intangible assets acquired in the recent Sanex acquisition, the estimated fair value of the Company’s intangible assets substantially exceeds the recorded book value. The estimated fair value of the Company’s reporting units also substantially exceeds the recorded book value. Therefore, it is not reasonably likely that significant changes in these estimates would occur that would result in an impairment charge related to these assets.

	§
▪	The recognition and measurement of uncertain tax positions involves consideration of the amounts and probabilities of various outcomes that could be realized upon ultimate ~~settlement.~~resolution.

(Dollars in Millions Except Per Share Amounts)

	§
▪	Tax valuation allowances are established to reduce deferred tax assets such as tax loss carryforwards, to net realizable value. Factors considered in estimating net realizable value include historical results by tax jurisdiction, carryforward periods, income tax strategies and forecasted taxable income.

▪

Legal and other contingency reserves are based on management’s assessment of the risk of potential loss, which includes consultation with outside legal counsel and advisors. Such assessments are reviewed each period and revised, based on current facts and circumstances, if necessary. While it is possible that the Company’s cash flows and results of operations in a particular quarter or year could be materially affected by the impact of such contingencies, it is the opinion of management that these matters will not have a material impact on the Company’s financial position, or its ongoing results of operations or cash flows. Refer to Note 1312 to the Consolidated Financial Statements for further discussion of the Company’s contingencies.

The Company generates revenue through the sale of well-known consumer products to trade customers under established trading terms. While the recognition of revenue and receivables requires the use of estimates, there is a short time frame (typically less than 60 days) between the shipment of product and cash receipt, thereby reducing the level of uncertainty in these estimates. Refer to Note 2 to the Consolidated Financial Statements for further description of the Company’s significant accounting policies.

Cautionary Statement on Forward-Looking Statements

This Annual Report on Form 10-K may contain ~~“forward-looking statements”~~forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995 or by the SEC in its rules, regulations and releases. Such statements may relate, for example, to sales or ~~unit~~ volume growth, organic sales growth, profit or profit margin growth, earnings growth, financial goals, the impact of currency devaluations and exchange and price controls, ~~in particular,~~including in Venezuela, cost-reduction plans, tax rates, new product introductions or commercial investment levels, among other matters. These statements are made on the basis of the Company’s views and assumptions as of this time and the Company undertakes no obligation to update these statements. Moreover, the Company does not, nor does any other person, assume responsibility for the accuracy ~~a nd~~and completeness of those statements. The Company cautions investors that any such forward-looking statements are not guarantees of future performance and that actual events or results may differ materially from those statements. Actual events or results may differ materially because of factors that affect international businesses and global economic conditions, as well as matters specific to us and the markets we serve, including the uncertain economic environment in different countries and its effect on consumer spending habits, increased competition and evolving competitive practices, currency rate fluctuations, exchange and price controls, changes in foreign or domestic laws or regulations or their interpretation, political and fiscal developments, the availability and cost of raw and packaging materials, our ability to maintain or increase selling prices as needed, changes in the policies of retail trade customers and our ability to continue lowering costs. For information about these and ~~oth er~~other factors that could impact our business and cause actual results to differ materially from forward-looking statements, refer to Item 1A, “Risk Factors” ~~in Item 1A.~~.

~~Table of Contents~~

~~(Dollars in Millions Except Per Share Amounts)~~

~~ITEM~~ ~~7A.~~

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See “Managing Foreign Currency, Interest Rate and Commodity Price Exposure” in Item 7.

~~ITEM~~ 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See “Index to Financial Statements.”


ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

~~Table of Contents~~



DELAWARE	13-1815595
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
300 Park Avenue, New York, New York	10022
(Address of principal executive offices)	(Zip Code)



Title of each class	Name of each exchange on which registered
Common Stock, $1.00 par value 4.75% Notes due 2014	New York Stock Exchange New York Stock Exchange



Large accelerated filer T	Accelerated filer £
Non-accelerated filer £ (Do not check if a smaller reporting company)	Smaller reporting company £



Documents	Form 10-K Reference
Portions of Proxy Statement for the ~~2011~~2012 Annual Meeting of Stockholders	Part III, Items 10 through 14



Part I		Page

Item 1.	Business	1
Item 1A.	Risk Factors	4
Item 1B.	Unresolved Staff Comments	8
Item 2.	Properties	9 8
Item 3.	Legal Proceedings	9 8
Item 4.	~~[Removed and Reserved]~~ Mine Safety Disclosures	12 11

Part II
Item 5.	Market for ~~Registrant~~’sRegistrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	13 12
Item 6.	Selected Financial Data	13 12
Item 7.	~~Management~~’sManagement’s Discussion and Analysis of Financial Condition and Results of Operations	14 13
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	29 27
Item 8.	Financial Statements and Supplementary Data	29 27
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	29 27
Item 9A.	Controls and Procedures	30 28
Item 9B.	Other Information	30 28

Part III
Item 10.	Directors, Executive Officers and Corporate Governance	31 29
Item 11.	Executive Compensation	31 29
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	31 29
Item 13.	Certain Relationships and Related Transactions and Director Independence	32 30
Item 14.	Principal Accountant Fees and Services	32 30

Part IV
Item 15.	Exhibits and Financial Statement Schedules	33 31

Signatures		34 32

T

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

£

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Name	Age	Date First Elected Officer	Present Title
Ian Cook	58	1996	Chairman of the Board
			President and Chief Executive Officer
Michael J. Tangney	66	1993	Vice Chairman
Stephen C. Patrick	61	1990	Vice Chairman
Fabian T. Garcia	51	2003	Chief Operating Officer
			Europe, Global Marketing, Customer Development, Supply Chain and Technology
Franck J. Moison	57	2002	Chief Operating Officer
			Emerging Markets
Dennis J. Hickey	62	1998	Chief Financial Officer
Andrew D. Hendry	63	1991	Senior Vice President
			General Counsel and Secretary
Victoria L. Dolan	51	2011	Vice President and Corporate Controller
Elaine Paik	46	2010	Vice President and Corporate Treasurer
Ronald T. Martin	62	2001	Vice President
			Global Sustainability and Social Responsibility
John J. Huston	56	2002	Senior Vice President
			Office of the Chairman
Delia H. Thompson	61	2002	Senior Vice President
			Investor Relations
Hector I. Erezuma	66	2005	Vice President
			Taxation
Daniel B. Marsili	50	2005	Senior Vice President
			Global Human Resources
Gregory P. Woodson	59	2007	Vice President
			Chief Ethics and Compliance Officer
Alexandre de Guillenchmidt	65	2008	President
			Colgate – Europe
Rosemary Nelson	63	2008	Vice President
			Deputy General Counsel, Operations and South Pacific
Derrick E.M. Samuel	54	2008	President
			Colgate – Greater Asia
P. Justin Skala	51	2008	President
			Colgate – Latin America
Noel R. Wallace	46	2009	President
			Colgate North America and Global Sustainability
Neil Thompson	55	2009	President and Chief Executive Officer
			Hill’s Pet Nutrition, Inc.
Francis M. Williamson	63	2010	Vice President Finance and Strategic Planning Latin America
Katherine Hargrove Ramundo	43	2011	Vice President
			Deputy General Counsel, Specialty Groups and North America and Assistant Secretary

	§
▪	foreign ownership restrictions and the potential for nationalization or expropriation of property or other resources, and

	§
▪	~~receive~~obtain and maintain necessary patent and trademark protection and avoid infringing intellectual property rights of others,

	§
▪	~~In February 2008, the federal competition authority in Germany imposed fines on four of the Company’s competitors, but the Company was not fined due to its cooperation with the German authorities.~~

	§
▪	The French competition ~~authority alleges agreements on pricing and promotion of heavy duty detergents among four consumer goods companies, including the Company’s French subsidiary.~~


ITEM 5.	MARKET FOR ~~REGISTRANT’S~~REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Month	Total Number of Shares Purchased(1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2)		Maximum Number of Shares that May Yet be Purchased Under Publicly Announced Plans or Programs
October 1 through 31, 2010		701,434	$	75.96		650,000		23,929,520
November 1 through 30, 2010		3,743,989	$	77.54		3,700,000		20,229,520
December 1 through 31, 2010		3,767,026	$	79.53		3,695,000		16,534,520
Total		8,212,449	$	78.32		8,045,000


⁽¹⁾	Includes share repurchases under the ~~2010~~2011 Program and those associated with certain employee elections under the Company’s compensation and benefit programs.

~~(2)~~
⁽²⁾	The difference between the total number of shares purchased and the total number of shares purchased as part of publicly announced plans or programs is ~~167,449~~76,669 shares, all of which relate to shares deemed surrendered to the Company to satisfy certain employee elections under its compensation and benefit programs.


ITEM 7.	~~MANAGEMENT’S~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS


						%					%
	2010			2009		Change			2008		Change		2011			2010			% Change		2009		% Change
Operating profit, GAAP	$	3,489		$	3,615		(3%	)	$	3,101		17%	$	3,841		$	3,489		10	%	$	3,615	(3	)%
Gain on sales of non-core product lines													(207		)	(50		)	—		—		—
Business realignment and other cost-saving initiatives													190			—			—		—		—
Costs related to the sale of land in Mexico													13			—			—		—		—
Charge for a French competition law matter													21			—			—		—		—
Venezuela hyperinflationary transition charge		271			—					—			—			271			—		—		—
Termination benefits		86			—					—			—			86			—		—		—
Gain on sales of non-core product lines		(50	)		—					—
2004 Restructuring Program		—			—					164
Operating profit, non-GAAP	$	3,796		$	3,615		5%		$	3,265		11%	$	3,858		$	3,796		2	%	$	3,615	5	%

~~Effective income tax rate, as reported~~	~~32.6~~	%
~~Transition to hyperinflationary accounting in Venezuela~~	~~(2.4~~	)
~~Termination benefits~~	~~(0.1~~	)
~~Sales of non-core product lines~~	~~(0.1~~	)
~~Remeasurement of Venezuelan balance sheet and lower taxes on unpaid remittances~~	~~1.5~~
~~Reorganization of an overseas subsidiary~~	~~0.8~~
~~Effective income tax rate, Non-GAAP~~	~~32.3~~	%


(a)	The information regarding security ownership of certain beneficial owners and management set forth in the ~~2011~~2012 Proxy Statement is incorporated herein by reference.


(b)	The registrant does not know of any arrangements that may at a subsequent date result in a change in control of the registrant.


(c)	Equity compensation plan information as of December 31, ~~2010:~~2011:

	(a)			(b)			(c)
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (in thousands)			Weighted-average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (in thousands)
Equity compensation plans approved by security holders		27,294	(1)	$	62	(2)		23,941	(3)
Equity compensation plans not approved by security holders	Not applicable			Not applicable			Not applicable
Total		27,294		$	62			23,941

~~(1)~~
⁽¹⁾	Consists of ~~24,517~~22,294 options outstanding and ~~2,777~~3,037 restricted shares awarded but not yet vested under the Company’s Stock Option and Executive Incentive ~~Stock~~Compensation Plans, respectively, which are more fully described in Note 87 to the Consolidated Financial Statements.

~~(2)~~
⁽²⁾	Includes the weighted-average exercise price of stock options outstanding of ~~$69~~$76 and restricted shares of $0.

~~(3)~~
⁽³⁾	Amount includes ~~13,723~~9,092 options available for issuance under the Company’s Stock Option Plans and ~~10,218~~9,310 of restricted shares available for issuance under the Company’s Executive Incentive ~~Stock~~Compensation Plan.



	Colgate-Palmolive Company (Registrant)

Date: February ~~24, 2011~~23, 2012	By	/s/ Ian Cook
		Ian Cook Chairman of the Board, President and Chief Executive Officer



(a) Principal Executive Officer		(d) Directors:

/s/ Ian Cook		John T. Cahill, ~~Ian Cook,~~
Ian Cook Chairman of the Board, President and Chief Executive Officer		Helene D. Gayle, Ellen M. Hancock Joseph Jimenez, ~~David W. Johnson~~ Richard J. Kogan Delano E. Lewis, J. Pedro Reinhard
		~~J. Pedro Reinhard,~~ Stephen I. Sadove

(b) Principal Financial Officer

/s/ Dennis J. Hickey		/s/ Andrew D. Hendry
Dennis J. Hickey Chief Financial Officer		Andrew D. Hendry As Attorney-in-Fact

(c) Principal Accounting Officer

/s/ Victoria L. Dolan
Victoria L. Dolan Vice President and Corporate Controller



	Page
Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm	36 34

Consolidated Statements of Income for the years ended December 31, 2011, 2010 ~~2009~~ and ~~2008~~2009	37 35

Consolidated Balance Sheets as of December 31, ~~2010~~2011 and ~~2009~~2010	38 36

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2011, 2010 ~~2009~~ and ~~2008~~2009	39 37

Consolidated Statements of Comprehensive Income for the years ended December 31, 2011, 2010 ~~2009~~ and ~~2008~~2009	40 38

Consolidated Statements of Cash Flows for the years ended December 31, 2011, 2010 ~~2009~~ and ~~2008~~2009	41 39

Notes to Consolidated Financial Statements	42 40

Financial Statement Schedule

Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2011, 2010 ~~2009~~ and ~~2008~~2009	75 72

Selected Financial Data

Market and Dividend Information	76 73

Historical Financial Summary	78 75



	/s/ P~~PricewaterhouseCoopers~~ RICEWATERHOUSECOOPERSLLP
New York, New York February 23, 2012



	2011			2010
Assets
Current Assets
Cash and cash equivalents	$	878		$	490
Receivables (net of allowances of $49 and $53, respectively)	1,675			1,610
Inventories	1,327			1,222
Other current assets	522			408
Total current assets	4,402			3,730
Property, plant and equipment, net	3,668			3,693
Goodwill, net	2,657			2,362
Other intangible assets, net	1,341			831
Deferred income taxes	115			84
Other assets	541			472
Total assets	$	12,724		$	11,172
Liabilities and Shareholders’ Equity
Current Liabilities
Notes and loans payable	$	34		$	48
Current portion of long-term debt	346			561
Accounts payable	1,244			1,165
Accrued income taxes	392			272
Other accruals	1,700			1,682
Total current liabilities	3,716			3,728
Long-term debt	4,430			2,815
Deferred income taxes	252			108
Other liabilities	1,785			1,704
Total liabilities	10,183			8,355
Commitments and contingent liabilities	—			—
Shareholders’ Equity
Common stock, $1 par value (2,000,000,000 shares authorized, 732,853,180 shares issued)	733			733
Additional paid-in capital	1,336			1,132
Retained earnings	15,649			14,329
Accumulated other comprehensive income (loss)	(2,475		)	(2,115		)
	15,243			14,079
Unearned compensation	(60		)	(99		)
Treasury stock, at cost	(12,808		)	(11,305		)
Total Colgate-Palmolive Company shareholders’ equity	2,375			2,675
Noncontrolling interests	166			142
Total shareholders’ equity	2,541			2,817
Total liabilities and shareholders’ equity	$	12,724		$	11,172



	Colgate-Palmolive Company Shareholders’ Equity
	Preference Stock			Common Stock		Additional Paid-In Capital			Unearned Compensation			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests
Balance, January 1, 2009	$	181		$	733	$	1,610		$	(187	)	$	(9,697	)	$	11,760		$	(2,477	)	$	121
Net income															2,291						106
Other comprehensive income, net of tax																		381			1
Dividends declared:
Series B Convertible Preference stock, net of taxes															(30		)
Common stock															(864		)
Noncontrolling interests in Company’s subsidiaries																					(87		)
Stock-based compensation expense						117
Shares issued for stock options						92						175
Shares issued for restricted stock awards						(47		)				47
Treasury stock acquired												(1,063		)
Preference stock conversion	(12		)			(48		)				60
Other						40			54
Balance, December 31, 2009	$	169		$	733	$	1,764		$	(133	)	$	(10,478	)	$	13,157		$	(2,096	)	$	141
Net income															2,203						110
Other comprehensive income, net of tax																		(19		)	2
Dividends declared:
Series B Convertible Preference stock, net of taxes															(34		)
Common stock															(997		)
Noncontrolling interests in Company’s subsidiaries																					(111		)
Stock-based compensation expense						121
Shares issued for stock options						56						153
Shares issued for restricted stock awards						(60		)				60
Treasury stock acquired												(2,020		)
Preference stock conversion	(169		)			(813		)				982
Other						64			34			(2		)
Balance, December 31, 2010	$	—		$	733	$	1,132		$	(99	)	$	(11,305	)	$	14,329		$	(2,115	)	$	142
Net income															2,431						123
Other comprehensive income, net of tax																		(360		)	(7		)
Dividends															(1,111		)				(92		)
Stock-based compensation expense						122
Shares issued for stock options						88						251
Shares issued for restricted stock awards						(53		)				53
Treasury stock acquired												(1,806		)
Other						47			39			(1		)
Balance, December 31, 2011	$	—		$	733	$	1,336		$	(60	)	$	(12,808	)	$	15,649		$	(2,475	)	$	166



	Colgate-Palmolive Company			Noncontrolling Interests			Total
For the year ended December 31, 2009:
Net income	$	2,291		$	106		$	2,397
Other comprehensive income, net of tax:
Cumulative translation adjustment	346			1			347
Retirement Plan and other retiree benefit adjustments	8			—			8
Other	27			—			27
Total Other comprehensive income, net of tax	381			1			382
Total comprehensive income	$	2,672		$	107		$	2,779

For the year ended December 31, 2010:
Net income	$	2,203		$	110		$	2,313
Other comprehensive income, net of tax:
Cumulative translation adjustment	162			2			164
Retirement Plan and other retiree benefit adjustments	(143		)	—			(143		)
Other	(38		)	—			(38		)
Total Other comprehensive income, net of tax	(19		)	2			(17		)
Total comprehensive income	$	2,184		$	112		$	2,296

For the year ended December 31, 2011:
Net income	$	2,431		$	123		$	2,554
Other comprehensive income, net of tax:
Cumulative translation adjustment	(298		)	(7		)	(305		)
Retirement Plan and other retiree benefit adjustments	(108		)	—			(108		)
Other	46			—			46
Total Other comprehensive income, net of tax	(360		)	(7		)	(367		)
Total comprehensive income	$	2,071		$	116		$	2,187



Recognized amounts of assets acquired and liabilities assumed:
Inventories	$	26
Property, plant and equipment, net	3
Other intangible assets, net	596
Goodwill, net	411
Accrued income taxes	(48		)
Long-term deferred income taxes	(18		)
Long-term other liabilities	(4		)
Fair value of net assets acquired	$	966



	2011							2010
	Gross Carrying Amount		Accumulated Amortization			Net		Gross Carrying Amount		Accumulated Amortization			Net
Trademarks	$	457	$	(157	)	$	300	$	545	$	(221	)	$	324
Other finite life intangible assets	205		(18		)	187		35		(16		)	19
Indefinite life intangible assets	854		—			854		488		—			488
Total Other intangible assets	$	1,516	$	(175	)	$	1,341	$	1,068	$	(237	)	$	831