Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (USD $) | ||||
In Millions, except Per Share data | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Net sales | $3,998 | $3,988 | $11,246 | $11,666 |
Cost of sales | 1,631 | 1,752 | 4,665 | 5,090 |
Gross profit | 2,367 | 2,236 | 6,581 | 6,576 |
Selling, general and administrative expenses | 1,403 | 1,415 | 3,885 | 4,187 |
Other (income) expense, net | 38 | 30 | 72 | 65 |
Operating profit | 926 | 791 | 2,624 | 2,324 |
Interest expense, net | 17 | 23 | 59 | 82 |
Income before income taxes | 909 | 768 | 2,565 | 2,242 |
Provision for income taxes | 292 | 246 | 824 | 717 |
Net income including noncontrolling interests | 617 | 522 | 1,741 | 1,525 |
Less: Net income attributable to noncontrolling interests | 27 | 22 | 81 | 65 |
Net income | $590 | $500 | $1,660 | $1,460 |
Earnings per common share, basic | 1.17 | 0.98 | 3.27 | 2.84 |
Earnings per common share, diluted | 1.12 | 0.94 | 3.16 | 2.72 |
Dividends declared per common share | 0.44 | 0.4 | 1.28 | 1.16 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (USD $) | ||
In Millions | Sep. 30, 2009
| Dec. 31, 2008
|
Assets | ||
Cash and cash equivalents | $847 | $555 |
Receivables (net of allowances of $51 and $47, respectively) | 1,780 | 1,592 |
Inventories | 1,241 | 1,197 |
Other current assets | 336 | 366 |
Total current assets | 4,204 | 3,710 |
Property, plant and equipment: | ||
Cost | 6,466 | 5,937 |
Less: Accumulated depreciation | (3,115) | (2,818) |
Property, plant and equipment, net | 3,351 | 3,119 |
Goodwill, net | 2,296 | 2,152 |
Other intangible assets, net | 826 | 834 |
Other assets | 390 | 164 |
Total assets | 11,067 | 9,979 |
Liabilities | ||
Notes and loans payable | 62 | 107 |
Current portion of long-term debt | 318 | 91 |
Accounts payable | 1,084 | 1,061 |
Accrued income taxes | 289 | 272 |
Other accruals | 1,838 | 1,421 |
Total current liabilities | 3,591 | 2,952 |
Long-term debt | 2,883 | 3,585 |
Deferred income taxes | 125 | 82 |
Other liabilities | 1,357 | 1,316 |
Total shareholders' equity | ||
Preference stock | 171 | 181 |
Common stock | 733 | 733 |
Additional paid-in capital | 1,694 | 1,610 |
Retained earnings | 12,761 | 11,760 |
Accumulated other comprehensive income (loss) | (2,125) | (2,477) |
Unearned compensation | (139) | (187) |
Treasury stock, at cost | (10,143) | (9,697) |
Total Colgate-Palmolive Company shareholders' equity | 2,952 | 1,923 |
Noncontrolling interests | 159 | 121 |
Total shareholders' equity | 3,111 | 2,044 |
Total liabilities and shareholders' equity | $11,067 | $9,979 |
1_Condensed Consolidated Statem
Condensed Consolidated Statements of Cash Flows (USD $) | ||
In Millions | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Operating Activities | ||
Net income | $1,660 | $1,460 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Restructuring, net of cash | (14) | (36) |
Depreciation and amortization | 262 | 261 |
Stock-based compensation expense | 97 | 82 |
Deferred income taxes | 16 | 38 |
Cash effects of changes in: | ||
Receivables | (104) | (132) |
Inventories | 10 | (176) |
Accounts payable and other accruals | 355 | 162 |
Other non-current assets and liabilities | 93 | 118 |
Net cash provided by operations | 2,375 | 1,777 |
Investing Activities | ||
Capital expenditures | (347) | (392) |
Sales (purchases) of marketable securities and investments | (147) | 1 |
Other | 10 | 50 |
Net cash used in investing activities | (484) | (341) |
Financing Activities | ||
Principal payments on debt | (3,011) | (1,424) |
Proceeds from issuance of debt | 2,561 | 1,447 |
Dividends Paid | (702) | (627) |
Purchases of treasury shares | (664) | (833) |
Proceeds from exercise of stock options and excess tax benefits | 196 | 224 |
Net cash used in financing activities | (1,620) | (1,213) |
Effect of exchange rate changes on Cash and cash equivalents | 21 | (17) |
Net increase in Cash and cash equivalents | 292 | 206 |
Cash and cash equivalents at beginning of period | 555 | 429 |
Cash and cash equivalents at end of period | 847 | 635 |
Supplemental Cash Flow Information | ||
Income taxes paid | $853 | $662 |
Basis of Presentation
Basis of Presentation | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The Condensed Consolidated Financial Statements reflect all normal recurring adjustments which, in managements 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. Certain prior year amounts have been reclassified to conform to the current year presentation. To conform to the current year presentation required by the Consolidation Topic of the Financial Accounting Standards Board (FASB) Codification, net income attributable to noncontrolling interests in less-than-wholly owned subsidiaries has been reclassified from Other (income) expense, net to a new line below Operating profit called Net income attributable to noncontrolling interests.The reclassification had no effect on Net income or Earnings per common share. Additionally, prior period balances of accumulated undistributed earnings relating to noncontrolling interests in less-than-wholly owned subsidiaries have been reclassified from Other liabilities to a component of Shareholders Equity.For further information regarding the impact of these reclassifications on segments, refer to Note 10. For a complete set of financial notes including the significant accounting policies of Colgate-Palmolive Company (together with its subsidiaries, the Company or Colgate), refer to the Companys Annual Report on Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission. |
Use of Estimates
Use of Estimates | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Use of Estimates [Abstract] | |
Use of Estimates | 2. Use of Estimates Provision for certain expenses, including income taxes, media 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.There have been no material events subsequent to the balance sheet date through October 29, 2009, the filing date of this report, that would have affected these estimates. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Recently Issued Accounting Pronouncements [Abstract] | |
Recently Issued Accounting Pronouncements | 3. Recently Issued Accounting Pronouncements In December 2008, the Retirement Benefits Topic of the FASB Codification was updated to provide guidance on an employers disclosures about plan assets of a defined benefit pension or other postretirement plan. The updated guidance requires an employer to disclose information on the investment policies and strategies as well as on the significant concentrations of risk in plan assets. An employer must also disclose the fair value of each major category of plan assets as of each annual reporting date together with the information on the inputs and valuation techniques used to develop such fair value measurements. The new disclosure requirements will be effective for the Companys financial statements as of December 31, 2009 and will have no impact on the Companys financial position or results of operations. |
Inventories
Inventories | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Inventories [Abstract] | |
Inventories | 4. Inventories Inventories by major class are as follows: September 30, 2009 December 31, 2008 Raw materials and supplies $ 308 $ 297 Work-in-process 53 41 Finished goods 880 859 Total Inventories $ 1,241 $ 1,197 |
Shareholders' Equity
Shareholders' Equity | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Shareholders' Equity [Abstract] | |
Shareholders' Equity | 5. Shareholders Equity Major changes in the components of Shareholders Equity since the beginning of 2009 are as follows: Colgate-Palmolive Company shareholders equity Noncontrolling Interests Accumulated Preference Common Additional Paid-in Unearned Treasury Retained Other Comprehensive Stock Stock Capital Compensation Stock Earnings Income (Loss) Balance, December 31, 2008 $ 181 $ 733 $ 1,610 $ (187 ) $ (9,697 ) $ 11,760 $ (2,477 ) $ 121 Net income 1,660 81 Other comprehensive income 352 Dividends declared: Series B ConvertiblePreference stock, net of taxes (22 ) Common stock (637 ) Noncontrolling interests in Companys subsidiaries (43 ) Stock-based compensation expense 97 Shares issued for stock options 66 123 Treasury stock acquired (664 ) Preference stock conversion (10 ) (41 ) 51 Other (38 ) 48 44 Balance, September 30, 2009 $ 171 $ 733 $ 1,694 $ (139 ) $ (10,143 ) $ 12,761 $ (2,125 ) $ 159 Accumulated other comprehensive income (loss), as reflected in the Condensed Consolidated Balance Sheets, primarily consists of cumulative foreign currency translation adjustments and unrecognized pension and other retiree benefit costs. The following are components of comprehensive income: Three Months Ended Nine Months Ended September30, 2009 September30, 2008 September30, 2009 September30, 2008 Net income $ 590 $ 500 $ 1,660 $ 1,460 Other comprehensive income (loss) Foreign currency translation adjustments 165 (341 ) 332 (149 ) Unrecognized pension and other retiree benefit cost adjustments (12 ) (10 ) 10 (2 ) Gains (losses) on cash flow hedges (1 ) (13 ) 10 (12 ) Other - 10 - 6 Total comprehensive income $ 742 $ 146 $ 2,012 $ 1,303 |
Earnings Per Share
Earnings Per Share | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 6. Earnings Per Share Three Months Ended September 30, 2009 September 30, 2008 Income Shares Per Share Income Shares Per Share Net income $ 590 $ 500 Preferred dividends (7 ) (7 ) Basic EPS 583 499.1 $ 1.17 493 505.5 $ 0.98 Stock options and restricted stock 4.4 6.2 Convertible preference stock 7 21.1 7 22.6 Diluted EPS $ 590 524.6 $ 1.12 $ 500 534.3 $ 0.94 Nine Months Ended September 30, 2009 September 30, 2008 Income Shares Per Share Income Shares Per Share Net income $ 1,660 $ 1,460 Preferred dividends (22 ) (21 ) Basic EPS 1,638 500.2 $ 3.27 1,439 507.2 $ 2.84 Stock options and restricted stock 3.3 6.4 Convertible preference stock 22 21.5 21 23.1 Diluted EPS $ 1,660 525.0 $ 3.16 $ 1,460 536.7 $ 2.72 |
Restructuring And Related Imple
Restructuring And Related Implementation Charges | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Restructuring and Related Implementation Charges [Abstract] | |
Restructuring and Related Implementation Charges | 7. Restructuring and Related Implementation Charges The Companys four-year restructuring and business-building program (the 2004 Restructuring Program) to enhance the Companys global leadership position in its core businesses was finalized as of December 31, 2008 and there were no charges incurred in the nine months ended September 30, 2009. The restructuring accrual decreased from $33 at December 31, 2008 to $19 at September 30, 2009 primarily due to cash payments for termination benefits, exit activities and the implementation of new strategies. For the three and nine months ended September 30, 2008 restructuring and implementation-related charges are reflected in the income statement as follows: Three Months Ended September 30, Nine Months Ended September 30, 2008 2008 Cost of sales $ 11 $ 48 Selling, general and administrative expenses 21 55 Other (income) expense, net 14 22 Total 2004 Restructuring Program charges, pretax $ 46 $ 125 Total 2004 Restructuring Program charges, aftertax $ 31 $ 82 Restructuring and implementation-related charges in the preceding table were recorded in the Corporate segment as these decisions were predominantly centrally directed and controlled and were not included in internal measures of segment operating performance. Charges for the three months ended September 30, 2008 relate to the 2004 Restructuring Program in North America (27%), Europe/South Pacific (21%), Latin America (1%), Greater Asia/Africa (21%) and Corporate (30%).Charges for the nine months ended September 30, 2008 relate to the 2004 Restructuring Program in North America (33%), Europe/South Pacific (19%), Latin America (1%), Greater Asia/Africa (15%), Pet Nutrition (4%) and Corporate (28%). |
Retirement Plans and Other Reti
Retirement Plans and Other Retiree Benefits | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Retirement Plans and Other Retiree Benefits [Abstract] | |
Retirement Plans and Other Retiree Benefits | 8. Retirement Plans and Other Retiree Benefits Components of net periodic benefit cost for the three and nine months ended September 30, 2009 and 2008 were as follows: Pension Benefits Other Retiree Benefits United States International Three Months Ended September 30, 2009 2008 2009 2008 2009 2008 Service cost $ 10 $ 10 $ 4 $ 5 $ 1 $ 3 Interest cost 23 24 10 9 9 9 Annual ESOP allocation - - - - (1 ) (2 ) Expected return on plan assets (21 ) (29 ) (6 ) (7 ) (1 ) (1 ) Amortization of transition prior service costs (credits) 1 1 - - - - Amortization of actuarial loss 14 2 2 1 4 2 Net periodic benefit cost $ 27 $ 8 $ 10 $ 8 $ 12 $ 11 Pension Benefits Other Retiree Benefits United States International Nine Months Ended September 30, 2009 2008 2009 2008 2009 2008 Service cost $ 32 $ 30 $ 12 $ 17 $ 8 $ 8 Interest cost 71 71 27 30 27 25 Annual ESOP allocation - - - - (5 ) (7 ) Expected return on plan assets (67 ) (86 ) (17 ) (26 ) (2 ) (2 ) Amortization of transition prior service costs (credits) 3 3 1 1 - - Amortization of actuarial loss 37 5 4 2 10 7 Net periodic benefit cost $ 76 $ 23 $ 27 $ 24 $ 38 $ 31 |
Contingencies
Contingencies | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Contingencies [Abstract] | |
Contingencies | 9. Contingencies The Company is contingently liable with respect to lawsuits, environmental matters, taxes and other matters arising in the normal course of business. Management proactively reviews and monitors the Companys 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. In June 2009, a Consent Decree was entered by the United States District Court for the District of New Jersey with respect to a superfund site associated with a prior acquisition.Substantially all of the Companys liability with respect to that site was covered by the Companys insurance carriers, which have made all their required payments. As a matter of course, the Company is regularly audited by the IRS and other tax authorities around the world in countries where it conducts business. In this regard, the IRS has completed its examination of the Companys federal income tax returns through 2005 and is currently examining those for 2006 and 2007. The amount of additional tax involved as a result of assessments arising from the IRS examination did not have a material impact on the financial position, results of operations or cash flows of the Company.Estimated incremental tax payments related to potential disallowances for subsequent periods are insignificant. In December 2006, a subsidiary of the Company received an income tax assessment from the Mexican tax authorities for the year 1999 totaling approximately $159, at the current exchange rate, including interest and penalties, challenging the transfer pricing on transactions between that subsidiary and another of the Companys subsidiaries located in the United States. In April 2008, the same subsidiary of the Company received a similar income tax assessment from the Mexican tax authorities for the years 2000 and 2001 totaling approximately $583, at the current exchange rate, including interest and penalties. The Company, through its subsidiary, requested and received in 1999 a written advance ruling from the Mexican tax authorities for income tax matters on which the Company relied in subsequently claiming on its returns the income tax treatment to which these assessments relate. Although the Company believes, based on the advice of outside counsel, that its income tax filings are in full compliance with the written advance ruling and applicable tax law and regulations, in June 2009, the Company entered into a settlement agreement with the Mexican tax authorities which resolves the transfer pricing disputes for the years 1999-2001, as well as any potential disputes which could arise for 2002-2007. As part of the settlement, the Mexican tax authorities withdrew the assessments of tax and interest for the years 1999-2001 and the Company made a payment of tax and interest related to the years 2002-2007. The net impact of the settlement was not material and approximated reserves previously taken by the Company for this matter. In 2001, the Central Bank of Brazil sought to impose a substantial fine on the Companys Brazi |
Segment Information
Segment Information | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Segment Information Abstract] | |
Segment Information | 10. Segment Information 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. Corporate operations include stock-based compensation related to stock options and restricted stock awards, research and development costs, Corporate overhead costs, restructuring and related implementation 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 in order to measure the underlying performance of the business segments. To conform to the current year presentation required by the Consolidation Topic of the FASBCodification, the amounts of Net income attributable to noncontrolling interests in less-than-wholly owned subsidiaries of $22 and $65 for the three and nine months ended September 30, 2008, respectively, which were previously deducted from Greater Asia/Africa Operating profit, have been reclassified to a new line below Operating profit. Net sales and Operating profit by segment were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2009 2008 2009 2008 Net sales Oral, Personal and Home Care North America $ 740 $ 718 $ 2,204 $ 2,142 Latin America 1,136 1,081 3,097 3,092 Europe/South Pacific 896 948 2,406 2,815 Greater Asia/Africa 695 717 1,972 2,043 Total Oral, Personal and Home Care 3,467 3,464 9,679 10,092 Pet Nutrition 531 524 1,567 1,574 Total Net sales $ 3,998 $ 3,988 $ 11,246 $ 11,666 Operating profit Oral, Personal and Home Care North America $ 217 $ 164 $ 608 $ 497 Latin America 346 312 987 887 Europe/South Pacific 219 206 539 600 Greater Asia/Africa 161 138 457 392 Total Oral, Personal and Home Care 943 820 2,591 2,376 Pet Nutrition 136 133 407 391 Corporate (153 ) (162 ) (374 ) (443 ) Total Operating profit $ 926 $ 791 $ 2,624 $ 2,324 |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instrument | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Fair Value Measurements and Financial Instruments [Abstract] | |
Fair Value Measurements and Financial Instruments | 11. 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 credit loss in the event of nonperformance by counterparties to financial instrument contracts; however, nonperformance is considered unlikely as it is the Companys policy to contract with highly rated diverse counterparties. Derivative Instruments The Companys derivative instruments include interest rate swap contracts, 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). Foreign currency contracts consist of forward and swap contracts utilized to hedge a portion of the Companys foreign currency purchases, assets and liabilities created in the normal course of business as well as the net investment in certain foreign subsidiaries. These contracts are valued using observable forward rates (Level 2 valuation). Commodity contracts are utilized to hedge the purchases of raw materials used in the Companys operations. These contracts are measured using quoted commodity exchange prices (Level 1 valuation). The duration of foreign currency and commodity contracts generally does not exceed 18 months. It is the Companys policy to enter into derivative instrument contracts with terms that match the underlying exposure being hedged. As such, the Companys derivative instruments are considered highly effective. Hedge ineffectiveness, if any, is not material for any period presented. Financial Statement Classification The Company holds derivative instruments that are designated as hedging instruments as well as certain instruments not so designated.The following table discloses the fair value as of September30, 2009 for both types of derivative instruments: Asset Derivatives Liability Derivatives Account Fair Value Account Fair Value Designated derivative instruments Interest rate swap contracts Other assets $ 20 Other liabilities $ - Foreign currency contracts Other current assets 3 Other accruals 23 Commodity contracts Other current assets - Other accruals 1 Total designated $ 23 $ 24 Derivatives not designated Foreign currency contracts Other current assets $ 4 Other accruals $ - Total not designated $ 4 $ - Total $ 27 $ 24 Derivatives not designated as hedging instruments consist of a cross-currency swap which serves as an economic hedge of a foreign currency deposit.The cross-currency swap replaced a previous swap with similar terms that settled in June 2009, resulting in a realized gain of $21. For the |
Document Information
Document Information | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Document Period End Date | 2009-09-30 |
Amendment Flag | false |
Entity Information
Entity Information (USD $) | ||
In Billions, except Share data | 9 Months Ended
Sep. 30, 2009 | Jun. 30, 2008
|
Entity Information [Line Items] | ||
Entity Registrant Name | COLGATE PALMOLIVE CO | |
Entity Central Index Key | 0000021665 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well Known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | $34 | |
Entity Common Stock Shares Outstanding | 497,191,128 |