Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2021shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2021 |
Document Transition Report | false |
Entity File Number | 1-644 |
Entity Registrant Name | COLGATE-PALMOLIVE COMPANY |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 13-1815595 |
Entity Address, Address Line One | 300 Park Avenue |
Entity Address, City or Town | New York, |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10022 |
City Area Code | 212 |
Local Phone Number | 310-2000 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 845,968,780 |
Entity Central Index Key | 0000021665 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Common Stock | |
Entity Information [Line Items] | |
Title of 12(b) Security | Common Stock, $1.00 par value |
Trading Symbol | CL |
Security Exchange Name | NYSE |
0.000% Notes due 2021 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 0.000% Notes due 2021 |
Trading Symbol | CL21A |
Security Exchange Name | NYSE |
0.500% Notes Due 2026 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 0.500% Notes due 2026 |
Trading Symbol | CL26 |
Security Exchange Name | NYSE |
1.375% Notes Due 2034 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 1.375% Notes due 2034 |
Trading Symbol | CL34 |
Security Exchange Name | NYSE |
0.875% Notes due 2039 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 0.875% Notes due 2039 |
Trading Symbol | CL39 |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Net sales | $ 4,344 | $ 4,097 |
Cost of sales | 1,707 | 1,632 |
Gross profit | 2,637 | 2,465 |
Selling, general and administrative expenses | 1,605 | 1,473 |
Other (income) expense, net | 28 | 40 |
Operating profit | 1,004 | 952 |
Non-service related postretirement costs | 18 | 21 |
Interest (income) expense, net | 29 | 36 |
Income before income taxes | 957 | 895 |
Provision for income taxes | 229 | 147 |
Net income including noncontrolling interests | 728 | 748 |
Less: Net income attributable to noncontrolling interests | 47 | 33 |
Net income attributable to Colgate-Palmolive Company | $ 681 | $ 715 |
Earnings per common share, basic (in dollars per share) | $ 0.80 | $ 0.83 |
Earnings per common share, diluted (in dollars per share) | $ 0.80 | $ 0.83 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income including noncontrolling interests | $ 728 | $ 748 |
Other comprehensive income (loss), net of tax: | ||
Cumulative translation adjustments | (158) | (355) |
Retirement plans and other retiree benefit adjustments | 2 | 16 |
Gains (losses) on cash flow hedges | 43 | 18 |
Total Other comprehensive income (loss), net of tax | (113) | (321) |
Total Comprehensive income including noncontrolling interests | 615 | 427 |
Less: Net income attributable to noncontrolling interests | 47 | 33 |
Less: Cumulative translation adjustments attributable to noncontrolling interests | (3) | (16) |
Total Comprehensive income attributable to noncontrolling interests | 44 | 17 |
Total Comprehensive income attributable to Colgate-Palmolive Company | $ 571 | $ 410 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets | ||
Cash and cash equivalents | $ 995 | $ 888 |
Receivables (net of allowances of $89 and $89, respectively) | 1,402 | 1,264 |
Inventories | 1,676 | 1,673 |
Other current assets | 490 | 513 |
Total current assets | 4,563 | 4,338 |
Property, plant and equipment: | ||
Cost | 8,637 | 8,751 |
Less: Accumulated depreciation | (5,028) | (5,035) |
Property, plant and equipment, net | 3,609 | 3,716 |
Goodwill | 3,701 | 3,824 |
Other intangible assets, net | 2,787 | 2,894 |
Deferred income taxes | 201 | 291 |
Other assets | 940 | 857 |
Total assets | 15,801 | 15,920 |
Current Liabilities | ||
Notes and loans payable | 254 | 258 |
Current portion of long-term debt | 9 | 9 |
Accounts payable | 1,306 | 1,393 |
Accrued income taxes | 422 | 403 |
Other accruals | 2,548 | 2,341 |
Total current liabilities | 4,539 | 4,404 |
Long-term debt | 7,570 | 7,334 |
Deferred income taxes | 415 | 426 |
Other liabilities | 2,614 | 2,655 |
Total liabilities | 15,138 | 14,819 |
Shareholders’ Equity | ||
Common stock | 1,466 | 1,466 |
Additional paid-in capital | 3,011 | 2,969 |
Retained earnings | 23,624 | 23,699 |
Accumulated other comprehensive income (loss) | (4,455) | (4,345) |
Unearned compensation | 0 | (1) |
Treasury stock, at cost | (23,384) | (23,045) |
Total Colgate-Palmolive Company shareholders’ equity | 262 | 743 |
Noncontrolling interests | 401 | 358 |
Total equity | 663 | 1,101 |
Total liabilities and equity | $ 15,801 | $ 15,920 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 89 | $ 89 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Operating Activities | ||
Net income including noncontrolling interests | $ 728 | $ 748 |
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operations: | ||
Depreciation and amortization | 137 | 133 |
Restructuring and termination benefits, net of cash | (13) | (30) |
Stock-based compensation expense | 38 | 16 |
Deferred income taxes | 6 | (99) |
Cash effects of changes in: | ||
Receivables | (170) | (211) |
Inventories | (40) | 29 |
Accounts payable and other accruals | (75) | 220 |
Other non-current assets and liabilities | (13) | (38) |
Net cash provided by (used in) operations | 598 | 768 |
Investing Activities | ||
Capital expenditures | (107) | (82) |
Purchases of marketable securities and investments | (29) | (42) |
Proceeds from sale of marketable securities and investments | 0 | 16 |
Payment for acquisitions, net of cash acquired | 0 | (351) |
Other investing activities | (6) | 0 |
Net cash provided by (used in) investing activities | (142) | (459) |
Financing Activities | ||
Short-term borrowing (repayment) less than 90 days, net | 365 | 17 |
Proceeds from issuance of debt | 25 | 0 |
Dividends paid | (376) | (373) |
Purchases of treasury shares | (372) | (220) |
Proceeds from exercise of stock options | 30 | 297 |
Other financing activities | (6) | (29) |
Net cash provided by (used in) financing activities | (334) | (308) |
Effect of exchange rate changes on Cash and cash equivalents | (15) | (30) |
Net increase (decrease) in Cash and cash equivalents | 107 | (29) |
Cash and cash equivalents at beginning of the period | 888 | 883 |
Cash and cash equivalents at end of the period | 995 | 854 |
Supplemental Cash Flow Information | ||
Income taxes paid | $ 227 | $ 128 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Unearned Compensation | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | [1] | Noncontrolling Interests | |
Changes in Shareholders' Equity [Roll Forward] | ||||||||||
Accumulated other comprehensive loss, cumulative translation losses | $ 3,128 | |||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | 1,138 | |||||||||
Beginning balance at Dec. 31, 2019 | $ 1,466 | $ 2,488 | $ (2) | $ (22,063) | $ 22,501 | $ (4,273) | $ 441 | |||
Changes in Shareholders' Equity [Roll Forward] | ||||||||||
Net income | 748 | 715 | 33 | |||||||
Other comprehensive income (loss), net of tax | (321) | (305) | (16) | |||||||
Dividends | [2] | (738) | (4) | |||||||
Stock-based compensation expense | 16 | |||||||||
Shares issued for stock options | 133 | 164 | ||||||||
Shares issued for restricted stock units | (15) | 15 | ||||||||
Treasury stock acquired | (220) | |||||||||
Other | 1 | 1 | 3 | |||||||
Ending balance at Mar. 31, 2020 | 1,466 | 2,623 | (1) | (22,104) | 22,481 | (4,578) | 454 | |||
Changes in Shareholders' Equity [Roll Forward] | ||||||||||
Accumulated other comprehensive loss, cumulative translation losses | 3,467 | |||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | 1,122 | |||||||||
Accumulated other comprehensive loss, cumulative translation losses | 3,158 | |||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | 1,178 | |||||||||
Beginning balance at Dec. 31, 2020 | 1,101 | 1,466 | 2,969 | (1) | (23,045) | 23,699 | (4,345) | 358 | ||
Changes in Shareholders' Equity [Roll Forward] | ||||||||||
Net income | 728 | 681 | 47 | |||||||
Other comprehensive income (loss), net of tax | (113) | (110) | (3) | |||||||
Dividends | [2] | (756) | ||||||||
Stock-based compensation expense | 38 | |||||||||
Shares issued for stock options | 13 | 22 | ||||||||
Shares issued for restricted stock units | (11) | 11 | ||||||||
Treasury stock acquired | (372) | |||||||||
Other | 2 | 1 | 0 | (1) | ||||||
Ending balance at Mar. 31, 2021 | 663 | $ 1,466 | $ 3,011 | $ 0 | $ (23,384) | $ 23,624 | $ (4,455) | $ 401 | ||
Changes in Shareholders' Equity [Roll Forward] | ||||||||||
Accumulated other comprehensive loss, cumulative translation losses | 3,313 | |||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | $ 1,176 | |||||||||
[1] | Accumulated other comprehensive income (loss) includes cumulative translation losses of $3,313 at March 31, 2021 ($3,467 at March 31, 2020) and $3,158 at December 31, 2020 ($3,128 at December 31, 2019), respectively, and unrecognized retirement plan and other retiree benefits costs of $1,176 at March 31, 2021 ($1,122 at March 31, 2020) and $1,178 at December 31, 2020 ($1,138 at December 31, 2019), respectively. | |||||||||
[2] | Two dividends were declared in each of the first quarters of 2021 and 2020. |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) | 3 Months Ended | ||
Mar. 31, 2021Dividend$ / shares | Mar. 31, 2020Dividend$ / shares | ||
Statement of Stockholders' Equity [Abstract] | |||
Dividends declared per common share (in dollars per share) | $ / shares | [1] | $ 0.89 | $ 0.87 |
Number of dividends declared per quarter | Dividend | 2 | 2 | |
[1] | Two dividends were declared in each of the first quarters of 2021 and 2020. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Condensed Consolidated Financial Statements reflect all normal recurring adjustments which, in management’s opinion, are necessary for a fair statement of the results for interim periods. Results of operations for interim periods may not be representative of results to be expected for a full year. Colgate-Palmolive Company (together with its subsidiaries, the “Company” or “Colgate”) reclassifies certain prior year amounts, as applicable, to conform to the current year presentation. For a complete set of financial statement notes, including the Company’s significant accounting policies, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the “SEC”). |
Use of Estimates
Use of Estimates | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates Provisions for certain expenses, including income taxes, advertising and consumer promotion, are based on full year assumptions and are included in the accompanying Condensed Consolidated Financial Statements in proportion with estimated annual tax rates, the passage of time or estimated annual sales, as applicable. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2021-01, “Reference Rate Reform (Topic 848): Scope.” This ASU clarifies that certain optional expedients and exceptions in Topic 848 apply to derivatives that are affected by the discounting transition due to reference rate reform. This guidance was effective upon issuance and can be applied prospectively for contract modifications and hedging relationships through December 31, 2022. The Company is currently evaluating the impact of the new guidance and does not expect this standard to have a material impact on the Company’s Consolidated Financial Statements. In October 2020, the FASB issued ASU No. 2020-10, “Codification Improvements.” This ASU improves the consistency of the codification topics by including all disclosure guidance in the appropriate disclosure section and also clarifies the application of various provisions in the codification. This guidance was effective for the Company beginning on January 1, 2021 and did not have a material impact on the Company’s Consolidated Financial Statements. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides optional expedients and exceptions for applying generally accepted accounting principles (“GAAP”) to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance was effective upon issuance and can be applied prospectively for contract modifications and hedging relationships through December 31, 2022. The Company is currently evaluating the impact of the new guidance and does not expect this standard to have a material impact on the Company’s Consolidated Financial Statements. In January 2020, the FASB issued ASU No. 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. This guidance was effective for the Company beginning on January 1, 2021 and did not have a material impact on the Company’s Consolidated Financial Statements. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. This guidance was effective for the Company beginning on January 1, 2021 and did not have a material impact on the Company’s Consolidated Financial Statements. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Hello Products LLC (“hello”) On January 31, 2020, the Company acquired hello, an oral care business, for cash consideration of $351. The acquisition was financed with a combination of debt and cash. This acquisition is part of the Company’s strategy to focus on high growth segments within its Oral Care, Personal Care and Pet Nutrition businesses. The total purchase price consideration of $351 was allocated to the net assets acquired based on their respective estimated fair values as follows: Receivables $ 11 Inventories 13 Other assets and liabilities, net (4) Other intangible assets 160 Goodwill 171 Fair value of net assets acquired $ 351 Other intangible assets acquired include trademarks, valued at $115, which are considered to have a finite useful life of 25 years, and customer relationships, valued at $45, which are considered to have a finite useful life of 17 years. Goodwill of $171 was allocated to the North America segment. The Company expects that goodwill will be deductible for tax purposes. Pro forma results of operations have not been presented as the impact on the Company’s Condensed Consolidated Financial Statements is not material. |
Restructuring and Related Imple
Restructuring and Related Implementation Charges | 3 Months Ended |
Mar. 31, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Implementation Charges | Restructuring and Related Implementation Charges The Company’s restructuring program (the “Global Growth and Efficiency Program”), which commenced in the fourth quarter of 2012, concluded on December 31, 2019. Initiatives under the Global Growth and Efficiency Program fit within the program’s three focus areas of expanding commercial hubs, extending shared business services and streamlining global functions and optimizing the global supply chain and facilities. Substantially all initiatives under the Global Growth and Efficiency Program had been implemented as of December 31, 2019 and no new restructuring projects were approved for implementation subsequent to the conclusion of the Global Growth and Efficiency Program. During the three months ended March 31, 2021 and March 31, 2020, the Company made cash payments of $13 and $30, respectively, related to projects approved prior to the conclusion of the Global Growth and Efficiency Program. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2021 | |
Inventory, Net, Items Net of Reserve Alternative [Abstract] | |
Inventories | Inventories Inventories by major class are as follows: March 31, December 31, Raw materials and supplies $ 463 $ 454 Work-in-process 48 45 Finished goods 1,264 1,256 Total Inventories, net $ 1,775 $ 1,755 Non-current inventory, net $ (99) $ (82) Current Inventories, net $ 1,676 $ 1,673 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share For the three months ended March 31, 2021 and 2020, earnings per share were as follows: Three Months Ended March 31, 2021 March 31, 2020 Net income attributable to Colgate-Palmolive Company Shares Per Net income attributable to Colgate-Palmolive Company Shares Per Basic EPS $ 681 848.6 $ 0.80 $ 715 856.9 $ 0.83 Stock options and restricted stock units 2.8 1.5 Diluted EPS $ 681 851.4 $ 0.80 $ 715 858.4 $ 0.83 For the three months ended March 31, 2021 and 2020, the average number of stock options and restricted stock units that were anti-dilutive and not included in diluted earnings per share calculations were 2,721,084 and 20,965,110, respectively. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Additions to and reclassifications out of Accumulated other comprehensive income (loss) attributable to the Company for the three months ended March 31, 2021 and 2020 were as follows: 2021 2020 Pretax Net of Tax Pretax Net of Tax Cumulative translation adjustments $ (99) $ (155) $ (320) $ (339) Retirement plans and other retiree benefits: Net actuarial gain (loss) and prior service costs arising during the period (19) (14) 2 1 Amortization of net actuarial loss, transition and prior service costs (1) 22 16 17 15 Retirement plans and other retiree benefits adjustments 3 2 19 16 Cash flow hedges: Unrealized gains (losses) on cash flow hedges 53 41 25 20 Reclassification of (gains) losses into net earnings on cash flow hedges (2) 3 2 (3) (2) Gains (losses) on cash flow hedges 56 43 22 18 Total Other comprehensive income (loss) $ (40) $ (110) $ (279) $ (305) (1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 9, Retirement Plans and Other Retiree Benefits for additional details. (2) These (gains) losses are reclassified into Cost of sales. See Note 13, Fair Value Measurements and Financial Instruments for additional details. There were no tax impacts on Other comprehensive income (loss) (“OCI”) attributable to Noncontrolling interests. |
Retirement Plans and Other Reti
Retirement Plans and Other Retiree Benefits | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Retirement Plans and Other Retiree Benefits | Retirement Plans and Other Retiree Benefits Components of Net periodic benefit cost for the three months ended March 31, 2021 and 2020 were as follows: Three Months Ended March 31, 2021 Pension Benefits Other Retiree Benefits United States International 2021 2020 2021 2020 2021 2020 Service cost $ — $ — $ 4 $ 4 $ 6 $ 6 Interest cost 15 19 5 5 9 11 Expected return on plan assets (27) (27) (6) (4) — — Amortization of actuarial loss (gain) 13 11 3 1 6 5 Net periodic benefit cost $ 1 $ 3 $ 6 $ 6 $ 21 $ 22 For the three months ended March 31, 2021 and 2020, the Company made no voluntary contributions to its U.S. postretirement plans. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes for the quarter ended March 31, 2020 includes $71 of income tax benefits recorded on a discrete period basis of which $45 relates to previously recorded foreign withholding taxes and $26 relates to a previously recorded valuation allowance against a deferred tax asset. As more fully described below, both items were previously recorded in connection with the charge recorded by the Company in 2017 and revised in 2018 related to the Tax Cuts and Jobs Acts (the “ TCJA ” ). As part of the previously recorded charge for the TCJA, the Company had provided for foreign withholding taxes expected to be paid on the remittance of earnings from certain overseas subsidiaries no longer deemed indefinitely reinvested. As a result of a reorganization of the ownership structure of certain foreign subsidiaries, the Company determined that no withholding taxes would be due on the remittance by certain subsidiaries of earnings previously deemed reinvested and, accordingly, in the first quarter of 2020, reversed $45 of previously recorded foreign withholding taxes. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Loss Contingency [Abstract] | |
Contingencies | Contingencies 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, pension, data privacy and security, environmental and tax matters and consumer class actions. 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. 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 for which the amount of any potential losses can be reasonably estimated, the Company currently estimates that the aggregate range of reasonably possible losses in excess of any accrued liabilities is $0 to approximately $400 (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. 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 matters could be material to the Company’s results of operations or cash flows for any particular quarter or year. Brazilian Matters There are certain tax and civil proceedings outstanding, as described below, related to the Company’s 1995 acquisition of the Kolynos oral care business from Wyeth (the “ Seller ” ). 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, penalties and any court-mandated fees, at the current exchange rate, are approximately $103. This amount includes additional assessments received from the Brazilian internal revenue authority in April 2016 relating to net operating loss carryforwards used by the Company’s Brazilian subsidiary to offset taxable income that had also been deducted from the authority’s original assessments. The Company has been disputing the disallowances by appealing the assessments since October 2001. In each of September 2015, February 2017, June 2018, April 2019 and September 2020, the Company lost an administrative appeal and subsequently filed an appeal in Brazilian federal court. Currently, there are five appeals pending in the Brazilian federal court. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the disallowances are without merit and that the Company should ultimately prevail. The Company is challenging these disallowances vigorously. In July 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, in the 6th. Lower Federal Court in the City of São Paulo, 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. The case has been pending since 2002, and the Lower Federal Court has not issued a decision. 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 is challenging this action vigorously. In December 2005, the Brazilian internal revenue authority issued to the Company’s Brazilian subsidiary a tax assessment with interest, penalties and any court-mandated fees of approximately $45, 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 had been disputing the assessment within the internal revenue authority’s administrative appeals process. However, in November 2015, the Superior Chamber of Administrative Tax Appeals denied the Company’s final administrative appeal, and the Company has filed a lawsuit in the Brazilian federal court. In the event the Company is unsuccessful in this lawsuit, further appeals are available within the Brazilian federal courts. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the tax assessment is without merit and that the Company should ultimately prevail. The Company is challenging this assessment vigorously. Competition Matter Certain of the Company’s subsidiaries were historically subject to actions and, in some cases, fines, by governmental authorities in a number of countries related to alleged competition law violations. Substantially all of these matters also involved other consumer goods companies and/or retail customers. 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 status as of March 31, 2021 of such competition law matters pending against the Company during the three months ended March 31, 2021 is set forth below. ▪ In July 2014, the Greek competition law authority issued a statement of objections alleging a restriction of parallel imports into Greece. The Company responded to this statement of objections. In July 2017, the Company received the decision from the Greek competition law authority in which the Company was fined $11. The Company appealed the decision to the Greek courts. In April 2019, the Greek courts affirmed the judgment against the Company’s Greek subsidiary, but reduced the fine to $10.5 and dismissed the case against Colgate-Palmolive Company. The Company’s Greek subsidiary and the Greek competition authority have appealed the decision to the Greek Supreme Court. Talcum Powder Matters The Company has been named as a defendant in civil actions alleging that certain talcum powder products that were sold prior to 1996 were contaminated with asbestos. Most of these actions involve a number of co-defendants from a variety of different industries, including suppliers of asbestos and manufacturers of products that, unlike the Company’s products, were designed to contain asbestos. As of March 31, 2021, there were 147 individual cases pending against the Company in state and federal courts throughout the United States, as compared to 137 cases as of December 31, 2020. During the three months ended March 31, 2021, 14 new cases were filed and three cases were resolved by voluntary dismissal. In addition, during the three months ended March 31, 2021, the Company won an appeal in one case that, in 2019, resulted in a jury verdict in favor of the Company and, since all of the plaintiff’s appeals have been exhausted, the case is now closed. There were no settlements of pending cases in the three months ended March 31, 2021. A significant portion of the Company’s costs incurred in defending and resolving these claims has been, and the Company believes a portion of such costs will continue to be, covered by insurance policies issued by several primary, excess and umbrella insurance carriers, subject to deductibles, exclusions, retentions, policy limits and insurance carrier insolvencies. While the Company and its legal counsel believe that these cases are without merit and intend to challenge them vigorously, there can be no assurances regarding the ultimate resolution of these matters. With the exception of one case where the Company received an adverse jury verdict in the second quarter of 2019 that the Company has appealed, the range of reasonably possible losses in excess of accrued liabilities disclosed above does not include any amount relating to these cases because the amount of any possible losses from such cases currently cannot be reasonably estimated. ERISA Matter |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates in two product segments: Oral, Personal and Home Care; and Pet Nutrition. The operations of the Oral, Personal and Home Care product segment are managed geographically in five reportable operating segments: North America, Latin America, Europe, Asia Pacific and Africa/Eurasia. The Company evaluates segment performance based on several factors, including Operating profit. The Company uses Operating profit as a measure of operating segment performance because it excludes the impact of Corporate-driven decisions related to interest expense and income taxes. The accounting policies of the operating segments are generally the same as those described in Note 2, Summary of Significant Accounting Policies to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Intercompany sales have been eliminated. Corporate operations include costs related to stock options and restricted stock units, research and development costs, Corporate overhead costs and gains and losses on sales of non-core product lines and assets. The Company reports these items within Corporate operations as they relate to Corporate-based responsibilities and decisions and are not included in the internal measures of segment operating performance used by the Company to measure the underlying performance of the operating segments. Net sales by segment were as follows: Three Months Ended March 31, 2021 2020 Net sales Oral, Personal and Home Care North America $ 923 $ 929 Latin America 907 889 Europe 717 675 Asia Pacific 739 633 Africa/Eurasia 272 252 Total Oral, Personal and Home Care 3,558 3,378 Pet Nutrition 786 719 Total Net sales $ 4,344 $ 4,097 Approximately 70% of the Company’s Net sales are generated from markets outside the U.S., with approximately 45% of the Company’s Net sales coming from emerging markets (which consist of Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe). The Company’s Net sales of Oral, Personal and Home Care and Pet Nutrition products accounted for the following percentages of the Company’s Net sales: Three Months Ended March 31, 2021 2020 Net sales Oral Care 45 % 44 % Personal Care 19 % 20 % Home Care 18 % 18 % Pet Nutrition 18 % 18 % Total Net sales 100 % 100 % Operating profit by segment was as follows: Three Months Ended March 31, 2021 2020 Operating profit Oral, Personal and Home Care North America $ 202 $ 258 Latin America 272 248 Europe 180 154 Asia Pacific 224 161 Africa/Eurasia 54 56 Total Oral, Personal and Home Care 932 877 Pet Nutrition 215 203 Corporate (143) (128) Total Operating profit $ 1,004 $ 952 |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments The Company uses available market information and other valuation methodologies in assessing the fair value of financial instruments. Judgment is required in interpreting market data to develop the estimates of fair value and, accordingly, changes in assumptions or the estimation methodologies may affect the fair value estimates. 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 only with diverse, credit-worthy counterparties based upon both strong credit ratings and other credit considerations. 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, sourcing strategies, 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, which prohibit the use of derivatives for speculative purposes and leveraged derivatives for any purpose. It is the Company’s policy to enter into derivative instrument contracts with terms that match the underlying exposure being hedged. The Company’s derivative instruments include interest rate swap contracts, forward-starting interest rate swaps, foreign currency contracts and commodity contracts. The Company utilizes interest rate swap contracts to manage its targeted mix of fixed and floating rate debt, and these swaps are valued using observable benchmark rates (Level 2 valuation). The Company utilizes forward-starting interest rate swaps to mitigate the risk of variability in interest rate for future debt issuances and these swaps are valued using observable benchmark rates (Level 2 valuation). The Company utilizes foreign currency contracts, including forward and swap contracts, option contracts, local currency deposits and local currency borrowings to hedge portions of its foreign currency purchases, assets and liabilities arising in the normal course of business and the net investment in certain foreign subsidiaries. These contracts are valued using observable market rates (Level 2 valuation). Commodity futures contracts are utilized to hedge the purchases of raw materials used in production. These contracts are measured using quoted commodity exchange prices (Level 1 valuation). The duration of foreign currency and commodity contracts generally does not exceed 12 months. The following table summarizes the fair value of the Company’s derivative instruments and other financial instruments which are carried at fair value in the Company’s Consolidated Balance Sheets at March 31, 2021 and December 31, 2020: Assets Liabilities Fair Value Account Fair Value Designated derivative instruments March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Interest rate swap contracts Other assets $ 11 $ 14 Other liabilities $ — $ — Forward-starting interest rate swaps Other assets 51 5 Other liabilities — — Foreign currency contracts Other current assets 13 7 Other accruals 55 93 Commodity contracts Other current assets 2 3 Other accruals — — Total designated $ 77 $ 29 $ 55 $ 93 Other financial instruments Marketable securities Other current assets $ 62 $ 37 Total other financial instruments $ 62 $ 37 The carrying amount of cash, cash equivalents, marketable securities, accounts receivable and short-term debt approximated fair value as of March 31, 2021 and December 31, 2020. The estimated fair value of the Company’s long-term debt, including the current portion, as of March 31, 2021 and December 31, 2020, was $8,097 and $8,175, respectively, and the related carrying value was $7,579 and $7,343, respectively. The estimated fair value of long-term debt was derived principally from quoted prices on the Company’s outstanding fixed-term notes (Level 2 valuation). The following amounts were recorded on the Condensed Consolidated Balance Sheet related to the cumulative basis adjustment for fair value hedges as of: March 31, 2021 December 31, 2020 Long-term debt: Carrying amount of hedged item $ 411 $ 413 Cumulative hedging adjustment included in the carrying amount 11 14 The following tables present the notional values as of: March 31, 2021 Foreign Currency Contracts Foreign Currency Debt Interest Rate Swaps Forward-Starting Interest Rate Swaps Commodity Contracts Fair Value Hedges $ 527 $ — $ 400 $ — $ — $ 927 Cash Flow Hedges 825 — — 600 19 1,444 Net Investment Hedges 604 4,164 — — — 4,768 December 31, 2020 Foreign Currency Contracts Foreign Currency Debt Interest Rate Swaps Forward-Starting Interest Rate Swaps Commodity Contracts Fair Value Hedges $ 589 $ — $ 400 $ — $ — $ 989 Cash Flow Hedges 854 — — 300 17 1,171 Net Investment Hedges 528 4,523 — — — 5,051 The following tables present the location and amount of gains (losses) recognized on the Company’s Condensed Consolidated Statements of Income: Three Months Ended March 31, 2021 2020 Cost of sales Selling, general and administrative expenses Interest (income) expense, net Cost of sales Selling, general and administrative expenses Interest (income) expense, net Interest rate swaps designated as fair value hedges: Derivative instrument $ — $ — $ 2 $ — $ — $ (12) Hedged items — — (2) — — 12 Foreign currency contracts designated as fair value hedges: Derivative instrument — — — — 24 — Hedged items — — — — (24) — Foreign currency contracts designated as cash flow hedges: Amount reclassified from OCI (6) — — 2 — — Commodity contracts designated as cash flow hedges: Amount reclassified from OCI 3 — — 1 — — Total gain (loss) on hedges recognized in income $ (3) $ — $ — $ 3 $ — $ — The following table presents the location and amount of unrealized gains (losses) included in OCI: Three Months Ended March 31, 2021 2020 Foreign currency contracts designated as cash flow hedges: Gain (loss) recognized in OCI $ 6 $ 25 Forward-starting interest rate swaps designated as cash flow hedges: Gain (loss) recognized in OCI 46 — Commodity contracts designated as cash flow hedges: Gain (loss) recognized in OCI 1 — Foreign currency contracts designated as net investment hedges: Gain (loss) on instruments 23 25 Gain (loss) on hedged items (23) (25) Foreign currency debt designated as net investment hedges: Gain (loss) on instruments 211 65 Gain (loss) on hedged items (211) (65) Total unrealized gain (loss) on hedges recognized in OCI $ 53 $ 25 |
Use of Estimates (Policies)
Use of Estimates (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates Provisions for certain expenses, including income taxes, advertising and consumer promotion, are based on full year assumptions and are included in the accompanying Condensed Consolidated Financial Statements in proportion with estimated annual tax rates, the passage of time or estimated annual sales, as applicable. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2021-01, “Reference Rate Reform (Topic 848): Scope.” This ASU clarifies that certain optional expedients and exceptions in Topic 848 apply to derivatives that are affected by the discounting transition due to reference rate reform. This guidance was effective upon issuance and can be applied prospectively for contract modifications and hedging relationships through December 31, 2022. The Company is currently evaluating the impact of the new guidance and does not expect this standard to have a material impact on the Company’s Consolidated Financial Statements. In October 2020, the FASB issued ASU No. 2020-10, “Codification Improvements.” This ASU improves the consistency of the codification topics by including all disclosure guidance in the appropriate disclosure section and also clarifies the application of various provisions in the codification. This guidance was effective for the Company beginning on January 1, 2021 and did not have a material impact on the Company’s Consolidated Financial Statements. In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides optional expedients and exceptions for applying generally accepted accounting principles (“GAAP”) to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance was effective upon issuance and can be applied prospectively for contract modifications and hedging relationships through December 31, 2022. The Company is currently evaluating the impact of the new guidance and does not expect this standard to have a material impact on the Company’s Consolidated Financial Statements. In January 2020, the FASB issued ASU No. 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)-Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. This guidance was effective for the Company beginning on January 1, 2021 and did not have a material impact on the Company’s Consolidated Financial Statements. In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. This guidance was effective for the Company beginning on January 1, 2021 and did not have a material impact on the Company’s Consolidated Financial Statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The total purchase price consideration of $351 was allocated to the net assets acquired based on their respective estimated fair values as follows: Receivables $ 11 Inventories 13 Other assets and liabilities, net (4) Other intangible assets 160 Goodwill 171 Fair value of net assets acquired $ 351 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory, Net, Items Net of Reserve Alternative [Abstract] | |
Inventories by Major Class | Inventories by major class are as follows: March 31, December 31, Raw materials and supplies $ 463 $ 454 Work-in-process 48 45 Finished goods 1,264 1,256 Total Inventories, net $ 1,775 $ 1,755 Non-current inventory, net $ (99) $ (82) Current Inventories, net $ 1,676 $ 1,673 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | For the three months ended March 31, 2021 and 2020, earnings per share were as follows: Three Months Ended March 31, 2021 March 31, 2020 Net income attributable to Colgate-Palmolive Company Shares Per Net income attributable to Colgate-Palmolive Company Shares Per Basic EPS $ 681 848.6 $ 0.80 $ 715 856.9 $ 0.83 Stock options and restricted stock units 2.8 1.5 Diluted EPS $ 681 851.4 $ 0.80 $ 715 858.4 $ 0.83 |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of Comprehensive Income (Loss) | Additions to and reclassifications out of Accumulated other comprehensive income (loss) attributable to the Company for the three months ended March 31, 2021 and 2020 were as follows: 2021 2020 Pretax Net of Tax Pretax Net of Tax Cumulative translation adjustments $ (99) $ (155) $ (320) $ (339) Retirement plans and other retiree benefits: Net actuarial gain (loss) and prior service costs arising during the period (19) (14) 2 1 Amortization of net actuarial loss, transition and prior service costs (1) 22 16 17 15 Retirement plans and other retiree benefits adjustments 3 2 19 16 Cash flow hedges: Unrealized gains (losses) on cash flow hedges 53 41 25 20 Reclassification of (gains) losses into net earnings on cash flow hedges (2) 3 2 (3) (2) Gains (losses) on cash flow hedges 56 43 22 18 Total Other comprehensive income (loss) $ (40) $ (110) $ (279) $ (305) (1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 9, Retirement Plans and Other Retiree Benefits for additional details. (2) These (gains) losses are reclassified into Cost of sales. See Note 13, Fair Value Measurements and Financial Instruments for additional details. |
Retirement Plans and Other Re_2
Retirement Plans and Other Retiree Benefits (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Retirement Benefits [Abstract] | |
Components Of Net Periodic Benefit Cost | Components of Net periodic benefit cost for the three months ended March 31, 2021 and 2020 were as follows: Three Months Ended March 31, 2021 Pension Benefits Other Retiree Benefits United States International 2021 2020 2021 2020 2021 2020 Service cost $ — $ — $ 4 $ 4 $ 6 $ 6 Interest cost 15 19 5 5 9 11 Expected return on plan assets (27) (27) (6) (4) — — Amortization of actuarial loss (gain) 13 11 3 1 6 5 Net periodic benefit cost $ 1 $ 3 $ 6 $ 6 $ 21 $ 22 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Net Sales and Operating Profit by Segment | Net sales by segment were as follows: Three Months Ended March 31, 2021 2020 Net sales Oral, Personal and Home Care North America $ 923 $ 929 Latin America 907 889 Europe 717 675 Asia Pacific 739 633 Africa/Eurasia 272 252 Total Oral, Personal and Home Care 3,558 3,378 Pet Nutrition 786 719 Total Net sales $ 4,344 $ 4,097 The Company’s Net sales of Oral, Personal and Home Care and Pet Nutrition products accounted for the following percentages of the Company’s Net sales: Three Months Ended March 31, 2021 2020 Net sales Oral Care 45 % 44 % Personal Care 19 % 20 % Home Care 18 % 18 % Pet Nutrition 18 % 18 % Total Net sales 100 % 100 % Operating profit by segment was as follows: Three Months Ended March 31, 2021 2020 Operating profit Oral, Personal and Home Care North America $ 202 $ 258 Latin America 272 248 Europe 180 154 Asia Pacific 224 161 Africa/Eurasia 54 56 Total Oral, Personal and Home Care 932 877 Pet Nutrition 215 203 Corporate (143) (128) Total Operating profit $ 1,004 $ 952 |
Fair Value Measurements and F_2
Fair Value Measurements and Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of derivative instruments | The following table summarizes the fair value of the Company’s derivative instruments and other financial instruments which are carried at fair value in the Company’s Consolidated Balance Sheets at March 31, 2021 and December 31, 2020: Assets Liabilities Fair Value Account Fair Value Designated derivative instruments March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020 Interest rate swap contracts Other assets $ 11 $ 14 Other liabilities $ — $ — Forward-starting interest rate swaps Other assets 51 5 Other liabilities — — Foreign currency contracts Other current assets 13 7 Other accruals 55 93 Commodity contracts Other current assets 2 3 Other accruals — — Total designated $ 77 $ 29 $ 55 $ 93 Other financial instruments Marketable securities Other current assets $ 62 $ 37 Total other financial instruments $ 62 $ 37 |
Schedule of hedged item and cumulative adjustment to carrying amount | The following amounts were recorded on the Condensed Consolidated Balance Sheet related to the cumulative basis adjustment for fair value hedges as of: March 31, 2021 December 31, 2020 Long-term debt: Carrying amount of hedged item $ 411 $ 413 Cumulative hedging adjustment included in the carrying amount 11 14 |
Schedule of notional values | The following tables present the notional values as of: March 31, 2021 Foreign Currency Contracts Foreign Currency Debt Interest Rate Swaps Forward-Starting Interest Rate Swaps Commodity Contracts Fair Value Hedges $ 527 $ — $ 400 $ — $ — $ 927 Cash Flow Hedges 825 — — 600 19 1,444 Net Investment Hedges 604 4,164 — — — 4,768 December 31, 2020 Foreign Currency Contracts Foreign Currency Debt Interest Rate Swaps Forward-Starting Interest Rate Swaps Commodity Contracts Fair Value Hedges $ 589 $ — $ 400 $ — $ — $ 989 Cash Flow Hedges 854 — — 300 17 1,171 Net Investment Hedges 528 4,523 — — — 5,051 |
Schedule of gains (losses) recognized in Statements of Income | The following tables present the location and amount of gains (losses) recognized on the Company’s Condensed Consolidated Statements of Income: Three Months Ended March 31, 2021 2020 Cost of sales Selling, general and administrative expenses Interest (income) expense, net Cost of sales Selling, general and administrative expenses Interest (income) expense, net Interest rate swaps designated as fair value hedges: Derivative instrument $ — $ — $ 2 $ — $ — $ (12) Hedged items — — (2) — — 12 Foreign currency contracts designated as fair value hedges: Derivative instrument — — — — 24 — Hedged items — — — — (24) — Foreign currency contracts designated as cash flow hedges: Amount reclassified from OCI (6) — — 2 — — Commodity contracts designated as cash flow hedges: Amount reclassified from OCI 3 — — 1 — — Total gain (loss) on hedges recognized in income $ (3) $ — $ — $ 3 $ — $ — |
Schedule of gains (losses) included in Other Comprehensive Income | The following table presents the location and amount of unrealized gains (losses) included in OCI: Three Months Ended March 31, 2021 2020 Foreign currency contracts designated as cash flow hedges: Gain (loss) recognized in OCI $ 6 $ 25 Forward-starting interest rate swaps designated as cash flow hedges: Gain (loss) recognized in OCI 46 — Commodity contracts designated as cash flow hedges: Gain (loss) recognized in OCI 1 — Foreign currency contracts designated as net investment hedges: Gain (loss) on instruments 23 25 Gain (loss) on hedged items (23) (25) Foreign currency debt designated as net investment hedges: Gain (loss) on instruments 211 65 Gain (loss) on hedged items (211) (65) Total unrealized gain (loss) on hedges recognized in OCI $ 53 $ 25 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) - USD ($) $ in Millions | Jan. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 3,701 | $ 3,824 | |
Hello Product LLC | |||
Business Acquisition [Line Items] | |||
Payments to acquire business | $ 351 | ||
Purchase price consideration | 351 | ||
Other intangible assets | 160 | ||
Goodwill | 171 | ||
Hello Product LLC | North America | |||
Business Acquisition [Line Items] | |||
Goodwill | 171 | ||
Hello Product LLC | Trademarks | |||
Business Acquisition [Line Items] | |||
Other intangible assets | $ 115 | ||
Useful life | 25 years | ||
Hello Product LLC | Customer Relationships | |||
Business Acquisition [Line Items] | |||
Other intangible assets | $ 45 | ||
Useful life | 17 years |
Acquisitions - Schedule of Reco
Acquisitions - Schedule of Recognized Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Jan. 31, 2020 |
Business Acquisition [Line Items] | |||
Goodwill | $ 3,701 | $ 3,824 | |
Hello Product LLC | |||
Business Acquisition [Line Items] | |||
Receivables | $ 11 | ||
Inventories | 13 | ||
Other assets and liabilities, net | (4) | ||
Other intangible assets | 160 | ||
Goodwill | 171 | ||
Fair value of net assets acquired | $ 351 |
Restructuring and Related Imp_2
Restructuring and Related Implementation Charges - Narrative (Details) - Global Growth and Efficiency Program - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | |||
Payments for restructuring | $ 13 | $ 30 | |
Restructuring reserve | $ 19 | $ 31 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory, Net, Items Net of Reserve Alternative [Abstract] | ||
Raw materials and supplies | $ 463 | $ 454 |
Work-in-process | 48 | 45 |
Finished goods | 1,264 | 1,256 |
Total Inventories, net | 1,775 | 1,755 |
Non-current inventory, net | (99) | (82) |
Current Inventories, net | $ 1,676 | $ 1,673 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Net income attributable to Colgate-Palmolive Company | ||
Basic EPS | $ 681 | $ 715 |
Diluted EPS | $ 681 | $ 715 |
Shares (millions) | ||
Basic EPS (in shares) | 848,600,000 | 856,900,000 |
Stock options and restricted stock units (in shares) | 2,800,000 | 1,500,000 |
Diluted EPS (in shares) | 851,400,000 | 858,400,000 |
Per Share | ||
Basic EPS (in dollars per share) | $ 0.80 | $ 0.83 |
Diluted EPS (in dollars per share) | $ 0.80 | $ 0.83 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,721,084 | 20,965,110 |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Total Other comprehensive income (loss), net of tax | $ (113) | $ (321) | |
Cumulative translation adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), before tax | (99) | (320) | |
Other comprehensive income (loss), pretax | (99) | (320) | |
Total Other comprehensive income (loss), net of tax | (155) | (339) | |
Retirement plans and other retiree benefits adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), before tax | 3 | 19 | |
Other comprehensive income (loss), before reclassifications, pretax | (19) | 2 | |
Reclassification from AOCI, pretax | 22 | 17 | |
Other comprehensive income (loss), pretax | 3 | 19 | |
Other comprehensive income (loss), before reclassifications, net of tax | (14) | 1 | |
Reclassification from AOCI, net of tax | 16 | 15 | |
Total Other comprehensive income (loss), net of tax | 2 | 16 | |
Gains (losses) on cash flow hedges | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), before tax | 56 | 22 | |
Other comprehensive income (loss), before reclassifications, pretax | 53 | 25 | |
Reclassification from AOCI, pretax | 3 | (3) | |
Other comprehensive income (loss), pretax | 56 | 22 | |
Other comprehensive income (loss), before reclassifications, net of tax | 41 | 20 | |
Reclassification from AOCI, net of tax | 2 | (2) | |
Total Other comprehensive income (loss), net of tax | 43 | 18 | |
Total Other comprehensive income (loss) | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), before tax | (40) | (279) | |
Other comprehensive income (loss), pretax | (40) | (279) | |
Total Other comprehensive income (loss), net of tax | [1] | $ (110) | $ (305) |
[1] | Accumulated other comprehensive income (loss) includes cumulative translation losses of $3,313 at March 31, 2021 ($3,467 at March 31, 2020) and $3,158 at December 31, 2020 ($3,128 at December 31, 2019), respectively, and unrecognized retirement plan and other retiree benefits costs of $1,176 at March 31, 2021 ($1,122 at March 31, 2020) and $1,178 at December 31, 2020 ($1,138 at December 31, 2019), respectively. |
Retirement Plans and Other Re_3
Retirement Plans and Other Retiree Benefits (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other Retiree Benefits | ||
Components of net periodic benefit cost | ||
Service cost | $ 6,000,000 | $ 6,000,000 |
Interest cost | 9,000,000 | 11,000,000 |
Expected return on plan assets | 0 | 0 |
Amortization of actuarial loss (gain) | 6,000,000 | 5,000,000 |
Net periodic benefit cost | 21,000,000 | 22,000,000 |
United States | Pension Benefits | ||
Components of net periodic benefit cost | ||
Service cost | 0 | 0 |
Interest cost | 15,000,000 | 19,000,000 |
Expected return on plan assets | (27,000,000) | (27,000,000) |
Amortization of actuarial loss (gain) | 13,000,000 | 11,000,000 |
Net periodic benefit cost | 1,000,000 | 3,000,000 |
Voluntary benefit plan contribution | 0 | 0 |
International | Pension Benefits | ||
Components of net periodic benefit cost | ||
Service cost | 4,000,000 | 4,000,000 |
Interest cost | 5,000,000 | 5,000,000 |
Expected return on plan assets | (6,000,000) | (4,000,000) |
Amortization of actuarial loss (gain) | 3,000,000 | 1,000,000 |
Net periodic benefit cost | $ 6,000,000 | $ 6,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Provisional income tax benefit | $ 71,000,000 | |
Foreign withholding income tax | 45,000,000 | $ 45,000,000 |
Valuation allowance against deferred tax asset | $ 26,000,000 | 26,000,000 |
Withholding tax due | $ 0 |
Contingencies (Details)
Contingencies (Details) $ in Millions | 3 Months Ended | |||||
Mar. 31, 2021USD ($)country_and_territorycase | Dec. 31, 2019case | Dec. 31, 2020case | Apr. 30, 2019USD ($) | Jul. 31, 2017USD ($) | Dec. 31, 2005USD ($) | |
Loss Contingencies [Line Items] | ||||||
Number of countries in which entity operates | country_and_territory | 200 | |||||
Brazilian internal revenue authority, matter 1 | $ | $ 103 | |||||
Loss contingency, number of cases on appeal | 5 | |||||
Brazilian internal revenue authority, matter 2 | $ | $ 45 | |||||
Fine imposed by Greek competition authority | $ | $ 10.5 | $ 11 | ||||
Loss contingency, pending claims, number (in cases) | 147 | 137 | ||||
Loss contingency, new claims filed, number (in cases) | 14 | |||||
Loss contingency, claims dismissed or settled, number (in cases) | 3 | |||||
Loss contingency, claims previously dismissed, number affirmed on appeal | 1 | |||||
Loss contingency, number of cases resulting in adverse jury verdict | 1 | |||||
Minimum | ||||||
Loss Contingencies [Line Items] | ||||||
Range of reasonably possible losses | $ | $ 0 | |||||
Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Range of reasonably possible losses | $ | $ 400 |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2021segment | Mar. 31, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of product segments (in segments) | 2 | |
Number of reportable segments (in segments) | 5 | |
Number of operating segments (in segments) | 5 | |
Corporate | Included in Operating profit (loss) | ||
Segment Reporting Information [Line Items] | ||
Acquisition related costs | $ | $ 6 | |
Net Sales | ||
Segment Reporting Information [Line Items] | ||
Percentage of consolidated Net sales represented by sales outside US | 70.00% | |
Percentage of consolidated Net sales coming from emerging markets | 45.00% |
Segment Information - Schedule
Segment Information - Schedule of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Total Net sales | $ 4,344 | $ 4,097 |
Total operating profit | $ 1,004 | $ 952 |
Product Concentration Risk | Net Sales | ||
Segment Reporting Information [Line Items] | ||
Percent of net sales | 100.00% | 100.00% |
Product Concentration Risk | Net Sales | Oral Care | ||
Segment Reporting Information [Line Items] | ||
Percent of net sales | 45.00% | 44.00% |
Product Concentration Risk | Net Sales | Personal Care | ||
Segment Reporting Information [Line Items] | ||
Percent of net sales | 19.00% | 20.00% |
Product Concentration Risk | Net Sales | Home Care | ||
Segment Reporting Information [Line Items] | ||
Percent of net sales | 18.00% | 18.00% |
Product Concentration Risk | Net Sales | Pet Nutrition | ||
Segment Reporting Information [Line Items] | ||
Percent of net sales | 18.00% | 18.00% |
Operating Segments | Oral, Personal and Home Care | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | $ 3,558 | $ 3,378 |
Total operating profit | 932 | 877 |
Operating Segments | Pet Nutrition | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 786 | 719 |
Total operating profit | 215 | 203 |
Operating Segments | North America | Oral, Personal and Home Care | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 923 | 929 |
Total operating profit | 202 | 258 |
Operating Segments | Latin America | Oral, Personal and Home Care | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 907 | 889 |
Total operating profit | 272 | 248 |
Operating Segments | Europe | Oral, Personal and Home Care | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 717 | 675 |
Total operating profit | 180 | 154 |
Operating Segments | Asia Pacific | Oral, Personal and Home Care | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 739 | 633 |
Total operating profit | 224 | 161 |
Operating Segments | Africa/Eurasia | Oral, Personal and Home Care | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 272 | 252 |
Total operating profit | 54 | 56 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Total operating profit | $ (143) | $ (128) |
Fair Value Measurements and F_3
Fair Value Measurements and Financial Instruments - Fair Value of Derivative Instruments and Other Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Designated derivative instruments | ||
Derivative assets | $ 77 | $ 29 |
Derivative liabilities | 55 | 93 |
Other financial instruments | ||
Total other financial instruments | 62 | 37 |
Other assets | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative assets | 11 | 14 |
Other assets | Forward-starting interest rate swaps | ||
Designated derivative instruments | ||
Derivative assets | 51 | 5 |
Other current assets | ||
Other financial instruments | ||
Marketable securities | 62 | 37 |
Other current assets | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative assets | 13 | 7 |
Other current assets | Commodity contracts | ||
Designated derivative instruments | ||
Derivative assets | 2 | 3 |
Other liabilities | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative liabilities | 0 | 0 |
Other liabilities | Forward-starting interest rate swaps | ||
Designated derivative instruments | ||
Derivative liabilities | 0 | 0 |
Other accruals | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative liabilities | 55 | 93 |
Other accruals | Commodity contracts | ||
Designated derivative instruments | ||
Derivative liabilities | $ 0 | $ 0 |
Fair Value Measurements and F_4
Fair Value Measurements and Financial Instruments - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Carrying Value | ||
Debt Instrument [Line Items] | ||
Carrying value of long-term debt | $ 7,579 | $ 7,343 |
Fair Value, Inputs, Level 2 | ||
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt | $ 8,097 | $ 8,175 |
Fair Value Measurements and F_5
Fair Value Measurements and Financial Instruments - Carrying Value and Estimated Fair Value of Long-term Debt (Details) - Long-term Debt - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Carrying amount of hedged item | $ 411 | $ 413 |
Cumulative hedging adjustment included in the carrying amount | $ 11 | $ 14 |
Fair Value Measurements and F_6
Fair Value Measurements and Financial Instruments - Schedule of Notional Values (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | $ 927 | $ 989 |
Fair Value Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 527 | 589 |
Fair Value Hedges | Foreign Currency Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Fair Value Hedges | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 400 | 400 |
Fair Value Hedges | Forward-starting interest rate swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Fair Value Hedges | Commodity Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Cash Flow Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 1,444 | 1,171 |
Cash Flow Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 825 | 854 |
Cash Flow Hedges | Foreign Currency Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Cash Flow Hedges | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Cash Flow Hedges | Forward-starting interest rate swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 600 | 300 |
Cash Flow Hedges | Commodity Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 19 | 17 |
Net Investment Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 4,768 | 5,051 |
Net Investment Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 604 | 528 |
Net Investment Hedges | Foreign Currency Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 4,164 | 4,523 |
Net Investment Hedges | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Net Investment Hedges | Forward-starting interest rate swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Net Investment Hedges | Commodity Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | $ 0 | $ 0 |
Fair Value Measurements and F_7
Fair Value Measurements and Financial Instruments - Schedule of Gain (Loss) on Hedges Recognized in Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gain (loss) on hedges recognized in income | $ (3) | $ 3 |
Cost of sales | Interest Rate Swaps | Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivative instrument | 0 | 0 |
Gain (loss) on hedged items | 0 | 0 |
Cost of sales | Foreign Currency Contracts | Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivative instrument | 0 | 0 |
Gain (loss) on hedged items | 0 | 0 |
Cost of sales | Foreign Currency Contracts | Cash Flow Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | (6) | 2 |
Cost of sales | Commodity contracts | Cash Flow Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | 3 | 1 |
Selling, general and administrative expenses | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gain (loss) on hedges recognized in income | 0 | 0 |
Selling, general and administrative expenses | Interest Rate Swaps | Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivative instrument | 0 | 0 |
Gain (loss) on hedged items | 0 | 0 |
Selling, general and administrative expenses | Foreign Currency Contracts | Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivative instrument | 0 | 24 |
Gain (loss) on hedged items | 0 | (24) |
Selling, general and administrative expenses | Foreign Currency Contracts | Cash Flow Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | 0 | 0 |
Selling, general and administrative expenses | Commodity contracts | Cash Flow Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | 0 | 0 |
Interest (income) expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gain (loss) on hedges recognized in income | 0 | 0 |
Interest (income) expense, net | Interest Rate Swaps | Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivative instrument | 2 | (12) |
Gain (loss) on hedged items | (2) | 12 |
Interest (income) expense, net | Foreign Currency Contracts | Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivative instrument | 0 | 0 |
Gain (loss) on hedged items | 0 | 0 |
Interest (income) expense, net | Foreign Currency Contracts | Cash Flow Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | 0 | 0 |
Interest (income) expense, net | Commodity contracts | Cash Flow Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | $ 0 | $ 0 |
Fair Value Measurements and F_8
Fair Value Measurements and Financial Instruments - Schedule of Gain (Loss) Included in OCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | $ 53 | $ 25 |
Foreign Currency Contracts | ||
Cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | 6 | 25 |
Net investment hedges [Abstract] | ||
Gain (loss) on instruments | 23 | 25 |
Gain (loss) on hedged items | (23) | (25) |
Forward-starting interest rate swaps | ||
Cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | 46 | 0 |
Commodity Contracts | ||
Cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | 1 | 0 |
Foreign Currency Debt | ||
Net investment hedges [Abstract] | ||
Gain (loss) on instruments | 211 | 65 |
Gain (loss) on hedged items | $ (211) | $ (65) |