☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2018 |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from________ to________ . |
DELAWARE | 13-1815595 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
300 Park Avenue, New York, New York | 10022 |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer ☒ | Accelerated filer ☐ |
Non-accelerated filer ☐ (Do not check if a smaller reporting company) | Smaller reporting company ☐ |
Emerging growth company ☐ |
Class | Shares Outstanding | Date | ||
Common stock, $1.00 par value | 872,320,741 | March 31, 2018 |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 (A) | ||||||
Net sales | $ | 4,002 | $ | 3,762 | |||
Cost of sales | 1,594 | 1,493 | |||||
Gross profit | 2,408 | 2,269 | |||||
Selling, general and administrative expenses | 1,392 | 1,336 | |||||
Other (income) expense, net | 33 | 21 | |||||
Operating profit | 983 | 912 | |||||
Non-service related postretirement costs | 24 | 27 | |||||
Interest (income) expense, net | 35 | 23 | |||||
Income before income taxes | 924 | 862 | |||||
Provision for income taxes | 246 | 251 | |||||
Net income including noncontrolling interests | 678 | 611 | |||||
Less: Net income attributable to noncontrolling interests | 44 | 41 | |||||
Net income attributable to Colgate-Palmolive Company | $ | 634 | $ | 570 | |||
Earnings per common share, basic | $ | 0.72 | $ | 0.64 | |||
Earnings per common share, diluted | $ | 0.72 | $ | 0.64 | |||
Dividends declared per common share * | $ | 0.82 | $ | 0.79 |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Net income including noncontrolling interests | $ | 678 | $ | 611 | |||
Other comprehensive income (loss), net of tax: | |||||||
Cumulative translation adjustments | 108 | 132 | |||||
Retirement plans and other retiree benefit adjustments | 14 | 13 | |||||
Gains (losses) on cash flow hedges | (1 | ) | (10 | ) | |||
Total Other comprehensive income (loss), net of tax | 121 | 135 | |||||
Total Comprehensive income including noncontrolling interests | 799 | 746 | |||||
Less: Net income attributable to noncontrolling interests | 44 | 41 | |||||
Less: Cumulative translation adjustments attributable to noncontrolling interests | 3 | 7 | |||||
Total Comprehensive income attributable to noncontrolling interests | 47 | 48 | |||||
Total Comprehensive income attributable to Colgate-Palmolive Company | $ | 752 | $ | 698 |
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 851 | $ | 1,535 | |||
Receivables (net of allowances of $85 and $77, respectively) | 1,644 | 1,480 | |||||
Inventories | 1,312 | 1,221 | |||||
Other current assets | 485 | 403 | |||||
Total current assets | 4,292 | 4,639 | |||||
Property, plant and equipment: | |||||||
Cost | 8,648 | 8,460 | |||||
Less: Accumulated depreciation | (4,561 | ) | (4,388 | ) | |||
4,087 | 4,072 | ||||||
Goodwill | 2,572 | 2,218 | |||||
Other intangible assets, net | 1,782 | 1,341 | |||||
Deferred income taxes | 187 | 188 | |||||
Other assets | 224 | 218 | |||||
Total assets | $ | 13,144 | $ | 12,676 | |||
Liabilities and Shareholders’ Equity | |||||||
Current Liabilities | |||||||
Notes and loans payable | $ | 159 | $ | 11 | |||
Current portion of long-term debt | — | — | |||||
Accounts payable | 1,209 | 1,212 | |||||
Accrued income taxes | 432 | 354 | |||||
Other accruals | 2,180 | 1,831 | |||||
Total current liabilities | 3,980 | 3,408 | |||||
Long-term debt | 6,550 | 6,566 | |||||
Deferred income taxes | 249 | 204 | |||||
Other liabilities | 2,264 | 2,255 | |||||
Total liabilities | 13,043 | 12,433 | |||||
Shareholders’ Equity | |||||||
Common stock | 1,466 | 1,466 | |||||
Additional paid-in capital | 2,047 | 1,984 | |||||
Retained earnings | 20,581 | 20,531 | |||||
Accumulated other comprehensive income (loss) | (3,900 | ) | (3,855 | ) | |||
Unearned compensation | (2 | ) | (5 | ) | |||
Treasury stock, at cost | (20,441 | ) | (20,181 | ) | |||
Total Colgate-Palmolive Company shareholders’ equity | (249 | ) | (60 | ) | |||
Noncontrolling interests | 350 | 303 | |||||
Total equity | 101 | 243 | |||||
Total liabilities and equity | $ | 13,144 | $ | 12,676 |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Operating Activities | |||||||
Net income including noncontrolling interests | $ | 678 | $ | 611 | |||
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operations: | |||||||
Depreciation and amortization | 129 | 109 | |||||
Restructuring and termination benefits, net of cash | (25 | ) | (9 | ) | |||
Stock-based compensation expense | 28 | 35 | |||||
Deferred income taxes | 13 | (51 | ) | ||||
Voluntary benefit plan contributions | — | (57 | ) | ||||
Cash effects of changes in: | |||||||
Receivables | (211 | ) | (52 | ) | |||
Inventories | (33 | ) | 9 | ||||
Accounts payable and other accruals | 33 | 98 | |||||
Other non-current assets and liabilities | 4 | (2 | ) | ||||
Net cash provided by operations | 616 | 691 | |||||
Investing Activities | |||||||
Capital expenditures | (118 | ) | (121 | ) | |||
Purchases of marketable securities and investments | (38 | ) | (85 | ) | |||
Proceeds from sale of marketable securities and investments | — | 48 | |||||
Payment for acquisitions, net of cash acquired | (727 | ) | — | ||||
Other | 2 | — | |||||
Net cash used in investing activities | (881 | ) | (158 | ) | |||
Financing Activities | |||||||
Principal payments on debt | (2,079 | ) | (805 | ) | |||
Proceeds from issuance of debt | 2,226 | 738 | |||||
Dividends paid | (352 | ) | (345 | ) | |||
Purchases of treasury shares | (351 | ) | (333 | ) | |||
Proceeds from exercise of stock options | 119 | 225 | |||||
Net cash used in financing activities | (437 | ) | (520 | ) | |||
Effect of exchange rate changes on Cash and cash equivalents | 18 | 19 | |||||
Net increase (decrease) in Cash and cash equivalents | (684 | ) | 32 | ||||
Cash and cash equivalents at beginning of the period | 1,535 | 1,315 | |||||
Cash and cash equivalents at end of the period | $ | 851 | $ | 1,347 | |||
Supplemental Cash Flow Information | |||||||
Income taxes paid | $ | 163 | $ | 186 |
1. | Basis of Presentation |
2. | Use of Estimates |
3. | Recent Accounting Pronouncements and Updated Accounting Policies |
4. | Acquisitions and Divestitures |
Recognized amounts of assets acquired and liabilities assumed: | |||
Inventories | $ | 7 | |
Other current assets | 9 | ||
Other intangible assets | 438 | ||
Goodwill | 332 | ||
Other current liabilities | (6 | ) | |
Deferred income taxes | (50 | ) | |
Fair value of net assets acquired | $ | 730 |
5. | Restructuring and Related Implementation Charges |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Cost of sales | $ | 6 | $ | 14 | |||
Selling, general and administrative expenses | 5 | 21 | |||||
Other (income) expense, net | 13 | 10 | |||||
Non-service related postretirement costs | 4 | 1 | |||||
Total Global Growth and Efficiency Program charges, pretax | $ | 28 | $ | 46 | |||
Total Global Growth and Efficiency Program charges, aftertax | $ | 20 | $ | 31 |
Three Months Ended | Program-to-date | |||||||
March 31, | Accumulated Charges | |||||||
2018 | 2017 | |||||||
North America | 37 | % | 37 | % | 19 | % | ||
Latin America | 12 | % | 6 | % | 4 | % | ||
Europe | 2 | % | 2 | % | 21 | % | ||
Asia Pacific | 18 | % | 2 | % | 3 | % | ||
Africa/Eurasia | 2 | % | 4 | % | 6 | % | ||
Hill’s Pet Nutrition | 19 | % | 7 | % | 7 | % | ||
Corporate | 10 | % | 42 | % | 40 | % | ||
Total | 100 | % | 100 | % | 100 | % |
Cumulative Charges | |||
as of March 31, 2018 | |||
Employee-Related Costs | $ | 646 | |
Incremental Depreciation | 91 | ||
Asset Impairments | 36 | ||
Other | 816 | ||
Total | $ | 1,589 |
Three Months Ended March 31, 2018 | ||||||||||||||||||||
Employee-Related Costs | Incremental Depreciation | Asset Impairments | Other | Total | ||||||||||||||||
Balance at December 31, 2017 | $ | 127 | $ | — | $ | — | $ | 107 | $ | 234 | ||||||||||
Charges | 18 | 1 | — | 9 | 28 | |||||||||||||||
Cash payments | (39 | ) | — | — | (16 | ) | (55 | ) | ||||||||||||
Charges against assets | (4 | ) | (1 | ) | — | — | (5 | ) | ||||||||||||
Foreign exchange | 2 | — | — | — | 2 | |||||||||||||||
Balance at March 31, 2018 | $ | 104 | $ | — | $ | — | $ | 100 | $ | 204 |
March 31, 2018 | December 31, 2017 | ||||||
Raw materials and supplies | $ | 258 | $ | 267 | |||
Work-in-process | 49 | 42 | |||||
Finished goods | 1,005 | 912 | |||||
Total Inventories | $ | 1,312 | $ | 1,221 |
Colgate-Palmolive Company Shareholders’ Equity | Noncontrolling Interests | ||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Unearned Compensation | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | ||||||||||||||||||||||
Balance, December 31, 2017 | $ | 1,466 | $ | 1,984 | $ | (5 | ) | $ | (20,181 | ) | $ | 20,531 | $ | (3,855 | ) | $ | 303 | ||||||||||
Net income | 634 | 44 | |||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | 118 | 3 | |||||||||||||||||||||||||
Dividends | (718 | ) | |||||||||||||||||||||||||
Stock-based compensation expense | 28 | ||||||||||||||||||||||||||
Shares issued for stock options | 48 | 77 | |||||||||||||||||||||||||
Shares issued for restricted stock units | (12 | ) | 12 | ||||||||||||||||||||||||
Treasury stock acquired | (351 | ) | |||||||||||||||||||||||||
Other | (1 | ) | 3 | 2 | 134 | (163 | ) | (1) | |||||||||||||||||||
Balance, March 31, 2018 | $ | 1,466 | $ | 2,047 | $ | (2 | ) | $ | (20,441 | ) | $ | 20,581 | $ | (3,900 | ) | $ | 350 |
Three Months Ended | |||||||||||||||||||||
March 31, 2018 | March 31, 2017 | ||||||||||||||||||||
Net income attributable to Colgate-Palmolive Company | Shares (millions) | Per Share | Net income attributable to Colgate-Palmolive Company | Shares (millions) | Per Share | ||||||||||||||||
Basic EPS | $ | 634 | 875.4 | $ | 0.72 | $ | 570 | 884.7 | $ | 0.64 | |||||||||||
Stock options and restricted stock units | 4.5 | 6.3 | |||||||||||||||||||
Diluted EPS | $ | 634 | 879.9 | $ | 0.72 | $ | 570 | 891.0 | $ | 0.64 |
9. | Other Comprehensive Income (Loss) |
2018 | 2017 | |||||||||||||||
Pretax | Net of Tax | Pretax | Net of Tax | |||||||||||||
Cumulative translation adjustments | $ | 96 | $ | 105 | $ | 103 | $ | 125 | ||||||||
Retirement plans and other retiree benefits: | ||||||||||||||||
Net actuarial gain (loss) and prior service costs arising during the period | — | — | — | — | ||||||||||||
Amortization of net actuarial loss, transition and prior service costs (1) | 18 | 14 | 18 | 13 | ||||||||||||
Retirement plans and other retiree benefits adjustments | 18 | 14 | 18 | 13 | ||||||||||||
Cash flow hedges: | ||||||||||||||||
Unrealized gains (losses) on cash flow hedges | (8 | ) | (6 | ) | (13 | ) | (8 | ) | ||||||||
Reclassification of (gains) losses into net earnings on cash flow hedges (2) | 6 | 5 | (3 | ) | (2 | ) | ||||||||||
Gains (losses) on cash flow hedges | (2 | ) | (1 | ) | (16 | ) | (10 | ) | ||||||||
Total Other comprehensive income (loss) | $ | 112 | $ | 118 | $ | 105 | $ | 128 |
10. | Retirement Plans and Other Retiree Benefits |
Pension Benefits | Other Retiree Benefits | ||||||||||||||||||||||
United States | International | ||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
Service cost | $ | — | $ | — | $ | 4 | $ | 4 | $ | 4 | $ | 4 | |||||||||||
Interest cost | 21 | 24 | 6 | 5 | 10 | 11 | |||||||||||||||||
Expected return on plan assets | (29 | ) | (27 | ) | (6 | ) | (5 | ) | — | — | |||||||||||||
Amortization of transition and prior service costs (credits) | — | — | — | — | — | — | |||||||||||||||||
Amortization of actuarial loss (gain) | 12 | 12 | 2 | 2 | 4 | 4 | |||||||||||||||||
Net periodic benefit cost | $ | 4 | $ | 9 | $ | 6 | $ | 6 | $ | 18 | $ | 19 |
11. | Income Taxes |
12. | Contingencies |
▪ | In December 2014, the French competition law authority found that 13 consumer goods companies, including the Company’s French subsidiary, exchanged competitively sensitive information related to the French home care and personal care sectors, for which the Company’s French subsidiary was fined $57. In addition, as a result of the Company’s acquisition of the Sanex personal care business in 2011 from Unilever N.V. and Unilever PLC (together with Unilever N.V., “Unilever”), pursuant to a Business and Share Sale and Purchase Agreement (the “Sale and Purchase Agreement”), the French competition law authority found that the Company’s French subsidiary, along with Hillshire Brands Company (formerly Sara Lee Corporation (“Sara Lee”)), were jointly and severally liable for fines of $25 assessed against Sara Lee’s French subsidiary. The Company is entitled to indemnification for this fine from Unilever as provided in the Sale and Purchase Agreement. The fines were confirmed by the Court of Appeal in October 2016. The Company is appealing the decision of the Court of Appeal on behalf of the Company and Sara Lee in the French Supreme Court. |
▪ | 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 is appealing the decision to the Greek courts. |
13. | Segment Information |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Net sales | |||||||
Oral, Personal and Home Care | |||||||
North America | $ | 827 | $ | 760 | |||
Latin America | 929 | 924 | |||||
Europe | 648 | 558 | |||||
Asia Pacific | 759 | 720 | |||||
Africa/Eurasia | 255 | 246 | |||||
Total Oral, Personal and Home Care | 3,418 | 3,208 | |||||
Pet Nutrition | 584 | 554 | |||||
Total Net sales | $ | 4,002 | $ | 3,762 |
Three Months Ended | |||||
March 31, | |||||
2018 | 2017 | ||||
Net sales | |||||
Oral Care | 49 | % | 49 | % | |
Personal Care | 19 | % | 18 | % | |
Home Care | 17 | % | 18 | % | |
Pet Nutrition | 15 | % | 15 | % | |
Total Net sales | 100 | % | 100 | % |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Operating profit | |||||||
Oral, Personal and Home Care | |||||||
North America | $ | 257 | $ | 247 | |||
Latin America | 273 | 271 | |||||
Europe | 162 | 142 | |||||
Asia Pacific | 226 | 219 | |||||
Africa/Eurasia | 50 | 46 | |||||
Total Oral, Personal and Home Care | 968 | 925 | |||||
Pet Nutrition | 164 | 163 | |||||
Corporate | (149 | ) | (176 | ) | |||
Total Operating profit | $ | 983 | $ | 912 |
14. | Fair Value Measurements and Financial Instruments |
Assets | Liabilities | ||||||||||||||||||
Account | Fair Value | Account | Fair Value | ||||||||||||||||
Designated derivative instruments | 3/31/18 | 12/31/17 | 3/31/18 | 12/31/17 | |||||||||||||||
Interest rate swap contracts | Other current assets | $ | — | $ | — | Other accruals | $ | 6 | $ | — | |||||||||
Interest rate swap contracts | Other assets | — | — | Other liabilities | 11 | 7 | |||||||||||||
Foreign currency contracts | Other current assets | 5 | 25 | Other accruals | 23 | 20 | |||||||||||||
Foreign currency contracts | Other assets | — | — | Other liabilities | 57 | 46 | |||||||||||||
Commodity contracts | Other current assets | — | — | Other accruals | — | — | |||||||||||||
Total designated | $ | 5 | $ | 25 | $ | 97 | $ | 73 | |||||||||||
Other financial instruments | |||||||||||||||||||
Marketable securities | Other current assets | $ | 51 | $ | 14 | ||||||||||||||
Total other financial instruments | $ | 51 | $ | 14 |
2018 | 2017 | ||||||||||||||||||||||
Foreign Currency Contracts | Interest Rate Swaps | Total | Foreign Currency Contracts | Interest Rate Swaps | Total | ||||||||||||||||||
Notional Value at March 31, | $ | 530 | $ | 1,000 | $ | 1,530 | $ | 246 | $ | 850 | $ | 1,096 | |||||||||||
Three months ended March 31, | |||||||||||||||||||||||
Gain (loss) on derivatives | (13 | ) | (10 | ) | (23 | ) | 2 | (2 | ) | — | |||||||||||||
Gain (loss) on hedged items | 13 | 10 | 23 | (2 | ) | 2 | — |
2018 | 2017 | ||||||||||||||||||||||
Foreign Currency Contracts | Commodity Contracts | Total | Foreign Currency Contracts | Commodity Contracts | Total | ||||||||||||||||||
Notional Value at March 31, | $ | 754 | $ | — | $ | 754 | $ | 667 | $ | 4 | $ | 671 | |||||||||||
Three months ended March 31, | |||||||||||||||||||||||
Gain (loss) recognized in OCI | (8 | ) | — | (8 | ) | (13 | ) | — | (13 | ) | |||||||||||||
Gain (loss) reclassified into Cost of sales | 6 | — | 6 | 3 | — | 3 |
2018 | 2017 | ||||||||||||||||||||||
Foreign Currency Contracts | Foreign Currency Debt | Total | Foreign Currency Contracts | Foreign Currency Debt | Total | ||||||||||||||||||
Notional Value at March 31, | $ | 541 | $ | 1,233 | $ | 1,774 | $ | 655 | $ | 1,206 | $ | 1,861 | |||||||||||
Three months ended March 31, | |||||||||||||||||||||||
Gain (loss) on instruments | (18 | ) | (19 | ) | (37 | ) | (18 | ) | (16 | ) | (34 | ) | |||||||||||
Gain (loss) on hedged items | 18 | 19 | 37 | 20 | 16 | 36 |
▪ | Expanding Commercial Hubs |
▪ | Extending Shared Business Services and Streamlining Global Functions |
▪ | Optimizing Global Supply Chain and Facilities |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Gross profit, GAAP | $ | 2,408 | $ | 2,269 | ||||
Global Growth and Efficiency Program | 6 | 14 | ||||||
Gross profit, non-GAAP | $ | 2,414 | $ | 2,283 |
Three Months Ended March 31, | |||||||||
2018 | 2017 | Basis Point Change | |||||||
Gross profit margin, GAAP | 60.2 | % | 60.3 | % | (10 | ) | |||
Global Growth and Efficiency Program | 0.1 | 0.4 | |||||||
Gross profit margin, non-GAAP | 60.3 | % | 60.7 | % | (40 | ) |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Selling, general and administrative expenses, GAAP | $ | 1,392 | $ | 1,336 | ||||
Global Growth and Efficiency Program | (5 | ) | (21 | ) | ||||
Selling, general and administrative expenses, non-GAAP | $ | 1,387 | $ | 1,315 |
Three Months Ended March 31, | |||||||||
2018 | 2017 | Basis Point Change | |||||||
Selling, general and administrative expenses as a percentage of Net sales, GAAP | 34.8 | % | 35.5 | % | (70 | ) | |||
Global Growth and Efficiency Program | (0.1 | ) | (0.5 | ) | |||||
Selling, general and administrative expenses as a percentage of Net sales, non-GAAP | 34.7 | % | 35.0 | % | (30 | ) |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Other (income) expense, net, GAAP | $ | 33 | $ | 21 | ||||
Global Growth and Efficiency Program | (13 | ) | (10 | ) | ||||
Other (income) expense, net, non-GAAP | $ | 20 | $ | 11 |
Three Months Ended March 31, | |||||||||||
2018 | 2017 | % Change | |||||||||
Operating profit, GAAP | $ | 983 | $ | 912 | 8 | % | |||||
Global Growth and Efficiency Program | 24 | 45 | |||||||||
Operating profit, non-GAAP | $ | 1,007 | $ | 957 | 5 | % |
Three Months Ended March 31, | |||||||||
2018 | 2017 | Basis Point Change | |||||||
Operating profit margin, GAAP | 24.6 | % | 24.2 | % | 40 | ||||
Global Growth and Efficiency Program | 0.6 | 1.2 | |||||||
Operating profit margin, non-GAAP | 25.2 | % | 25.4 | % | (20 | ) |
Three Months Ended March 31, | ||||||||
2018 | 2017 | |||||||
Non-service related postretirement costs, GAAP | $ | 24 | $ | 27 | ||||
Global Growth and Efficiency Program | (4 | ) | (1 | ) | ||||
Non-service related postretirement costs, non-GAAP | $ | 20 | $ | 26 |
Three Months Ended March 31, | ||||||||||||||||||||||
2018 | 2017 | |||||||||||||||||||||
Income Before Income Taxes | Provision For Income Taxes(1) | Effective Income Tax Rate(2) | Income Before Income Taxes | Provision For Income Taxes(1) | Effective Income Tax Rate(2) | |||||||||||||||||
As Reported GAAP | $ | 924 | $ | 246 | 26.6 | % | $ | 862 | $ | 251 | 29.1 | % | ||||||||||
Global Growth and Efficiency Program | 28 | 8 | 0.1 | 46 | 15 | 0.2 | ||||||||||||||||
Non-GAAP | $ | 952 | $ | 254 | 26.7 | % | $ | 908 | $ | 266 | 29.3 | % |
Three Months Ended March 31, 2018 | |||||||||||||||||||
Income Before Income Taxes | Provision For Income Taxes(1) | Net Income Including Noncontrolling Interests | Net Income Attributable To Colgate-Palmolive Company | Diluted Earnings Per Share(2) | |||||||||||||||
As Reported GAAP | $ | 924 | $ | 246 | $ | 678 | $ | 634 | $ | 0.72 | |||||||||
Global Growth and Efficiency Program | 28 | 8 | 20 | 20 | 0.02 | ||||||||||||||
Non-GAAP | $ | 952 | $ | 254 | $ | 698 | $ | 654 | $ | 0.74 |
Three Months Ended March 31, 2017 | |||||||||||||||||||
Income Before Income Taxes | Provision For Income Taxes(1) | Net Income Including Noncontrolling Interests | Net Income Attributable To Colgate-Palmolive Company | Diluted Earnings Per Share(2) | |||||||||||||||
As Reported GAAP | $ | 862 | $ | 251 | $ | 611 | $ | 570 | $ | 0.64 | |||||||||
Global Growth and Efficiency Program | 46 | 15 | 31 | 31 | 0.03 | ||||||||||||||
Non-GAAP | $ | 908 | $ | 266 | $ | 642 | $ | 601 | $ | 0.67 |
Three Months Ended March 31, | |||||||||||
2018 | 2017 | Change | |||||||||
Net sales | $ | 827 | $ | 760 | 9.0 | % | |||||
Operating profit | $ | 257 | $ | 247 | 4 | % | |||||
% of Net sales | 31.1 | % | 32.5 | % | (140 | ) | bps |
Three Months Ended March 31, | |||||||||||
2018 | 2017 | Change | |||||||||
Net sales | $ | 929 | $ | 924 | 0.5 | % | |||||
Operating profit | $ | 273 | $ | 271 | 1 | % | |||||
% of Net sales | 29.4 | % | 29.3 | % | 10 | bps |
Three Months Ended March 31, | |||||||||||
2018 | 2017 | Change | |||||||||
Net sales | $ | 648 | $ | 558 | 16.0 | % | |||||
Operating profit | $ | 162 | $ | 142 | 14 | % | |||||
% of Net sales | 25.0 | % | 25.4 | % | (40 | ) | bps |
Three Months Ended March 31, | |||||||||||
2018 | 2017 | Change | |||||||||
Net sales | $ | 759 | $ | 720 | 5.5 | % | |||||
Operating profit | $ | 226 | $ | 219 | 3 | % | |||||
% of Net sales | 29.8 | % | 30.4 | % | (60 | ) | bps |
Three Months Ended March 31, | |||||||||||
2018 | 2017 | Change | |||||||||
Net sales | $ | 255 | $ | 246 | 3.5 | % | |||||
Operating profit | $ | 50 | $ | 46 | 9 | % | |||||
% of Net sales | 19.6 | % | 18.7 | % | 90 | bps |
Three Months Ended March 31, | |||||||||||
2018 | 2017 | Change | |||||||||
Net sales | $ | 584 | $ | 554 | 5.5 | % | |||||
Operating profit | $ | 164 | $ | 163 | 1 | % | |||||
% of Net sales | 28.1 | % | 29.4 | % | (130 | ) | bps |
Three Months Ended March 31, | |||||||||||
2018 | 2017 | Change | |||||||||
Operating profit (loss) | $ | (149 | ) | $ | (176 | ) | (15 | ) | % |
▪ | Becoming even stronger on the ground through the continued evolution and expansion of proven global and regional commercial capabilities, which have already been successfully implemented in a number of the Company’s operations around the world. |
▪ | Simplifying and standardizing how work gets done by increasing technology-enabled collaboration and taking advantage of global data and analytic capabilities, leading to smarter and faster decisions. |
▪ | Reducing structural costs to continue to increase the Company’s gross and operating profit. |
▪ | Building on Colgate’s current position of strength to enhance its leading market share positions worldwide and ensure sustained sales and earnings growth. |
▪ | Expanding Commercial Hubs – Building on the success of the hub structure implemented around the world, streamlining operations in order to drive smarter and faster decision-making, strengthen capabilities available on the ground and improve cost structure. |
▪ | Extending Shared Business Services and Streamlining Global Functions – Optimizing the Company’s shared service organizational model in all regions of the world and continuing to streamline global functions to improve cost structure. |
▪ | Optimizing Global Supply Chain and Facilities – Continuing to optimize manufacturing efficiencies, global warehouse networks and office locations for greater efficiency, lower cost and speed to bring innovation to market. |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Cost of sales | $ | 6 | $ | 14 | |||
Selling, general and administrative expenses | 5 | 21 | |||||
Other (income) expense, net | 13 | 10 | |||||
Non-service related postretirement costs | 4 | 1 | |||||
Total Global Growth and Efficiency Program charges, pretax | $ | 28 | $ | 46 | |||
Total Global Growth and Efficiency Program charges, aftertax | $ | 20 | $ | 31 |
Three Months Ended | Program-to-date | |||||||
March 31, | Accumulated Charges | |||||||
2018 | 2017 | |||||||
North America | 37 | % | 37 | % | 19 | % | ||
Latin America | 12 | % | 6 | % | 4 | % | ||
Europe | 2 | % | 2 | % | 21 | % | ||
Asia Pacific | 18 | % | 2 | % | 3 | % | ||
Africa/Eurasia | 2 | % | 4 | % | 6 | % | ||
Hill’s Pet Nutrition | 19 | % | 7 | % | 7 | % | ||
Corporate | 10 | % | 42 | % | 40 | % | ||
Total | 100 | % | 100 | % | 100 | % |
Cumulative Charges | |||
as of March 31, 2018 | |||
Employee-Related Costs | $ | 646 | |
Incremental Depreciation | 91 | ||
Asset Impairments | 36 | ||
Other | 816 | ||
Total | $ | 1,589 |
Three Months Ended March 31, 2018 | ||||||||||||||||||||
Employee-Related Costs | Incremental Depreciation | Asset Impairments | Other | Total | ||||||||||||||||
Balance at December 31, 2017 | $ | 127 | $ | — | $ | — | $ | 107 | $ | 234 | ||||||||||
Charges | 18 | 1 | — | 9 | 28 | |||||||||||||||
Cash payments | (39 | ) | — | — | (16 | ) | (55 | ) | ||||||||||||
Charges against assets | (4 | ) | (1 | ) | — | — | (5 | ) | ||||||||||||
Foreign exchange | 2 | — | — | — | 2 | |||||||||||||||
Balance at March 31, 2018 | $ | 104 | $ | — | $ | — | $ | 100 | $ | 204 |
Three Months Ended March 31, 2018 | Net Sales Growth (GAAP) | Foreign Exchange Impact | Acquisitions and Divestments Impact | Organic Sales Growth (Non-GAAP) |
Oral, Personal and Home Care | ||||
North America | 9.0% | 0.5% | 3.5% | 5.0% |
Latin America | 0.5% | —% | —% | 0.5% |
Europe | 16.0% | 14.5% | —% | 1.5% |
Asia Pacific | 5.5% | 5.5% | —% | —% |
Africa/Eurasia | 3.5% | 4.5% | —% | (1.0)% |
Total Oral, Personal and Home Care | 6.5% | 4.5% | 0.5% | 1.5% |
Pet Nutrition | 5.5% | 4.0% | —% | 1.5% |
Total Company | 6.5% | 4.5% | 0.5% | 1.5% |
Month | Total Number of Shares Purchased(1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(2) | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(3) (in millions) | ||||||||||
January 1 through 31, 2018 | 830,855 | $ | 74.71 | 782,350 | $ | 1,013 | ||||||||
February 1 through 28, 2018 | 2,043,811 | $ | 70.43 | 1,867,300 | $ | 881 | ||||||||
March 1 through 31, 2018 | 1,989,713 | $ | 69.83 | 1,936,900 | $ | 746 | ||||||||
Total | 4,864,379 | $ | 70.92 | 4,586,550 |
(1) | Includes share repurchases under the 2015 Program and those associated with certain employee elections under the Company’s compensation and benefit programs. |
(2) | The difference between the total number of shares purchased and the total number of shares purchased as part of publicly announced plans or programs is 277,829 shares, which represents shares deemed surrendered to the Company to satisfy certain employee elections under the Company’s compensation and benefit programs. |
(3) | Includes approximate dollar value of shares that were available to be purchased under the publicly announced plans or programs that were in effect as of March 31, 2018. |
Exhibit No. | Description | |
10 | ||
12 | ||
31-A | ||
31-B | ||
32 | ||
101 | The following materials from Colgate-Palmolive Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2018, formatted in eXtensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Income; (ii) the Condensed Consolidated Statements of Comprehensive Income; (iii) the Condensed Consolidated Balance Sheets; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) Notes to Condensed Consolidated Financial Statements. |
COLGATE-PALMOLIVE COMPANY | |
(Registrant) | |
Principal Executive Officer: | |
April 27, 2018 | /s/ Ian Cook |
Ian Cook | |
Chairman of the Board, President and Chief Executive Officer | |
Principal Financial Officer: | |
April 27, 2018 | /s/ Dennis J. Hickey |
Dennis J. Hickey | |
Chief Financial Officer | |
Principal Accounting Officer: | |
April 27, 2018 | /s/ Henning I. Jakobsen |
Henning I. Jakobsen | |
Vice President and Corporate Controller |
ARTICLE I INTRODUCTION | 1 |
Section 1.1 | Name of Plan 1 |
Section 1.2 | Background and Effective Date 1 |
Section 1.3 | ERISA and Code Status 2 |
Section 2.1 | “Actuarial Equivalent” 4 |
Section 2.2 | “Additional EICP Benefit” 4 |
Section 2.3 | “Base Plan” 5 |
Section 2.4 | “Benefit Commencement Date” 5 |
Section 2.5 | “Determination Date” 5 |
Section 2.6 | “Eligible Employee” 5 |
Section 2.7 | “Grandfathered Benefit” 5 |
Section 2.8 | “Maximum Benefit” 6 |
Section 2.9 | “Member” 7 |
Section 2.10 | “Member Eligible for the Additional EICP Benefit” 7 |
Section 2.11 | “Non-Grandfathered Benefit” 8 |
Section 2.12 | “Specified Employee” 8 |
ARTICLE III BENEFITS | 9 |
Section 3.1 | Participation 9 |
Section 3.2 | Amount of Member’s Benefit 9 |
Section 3.3 | Amount of Beneficiary’s Benefit 14 |
Section 3.4 | Time and Form of Payment 15 |
Section 3.5 | Effect of Changes in the Maximum Benefit 18 |
Section 3.6 | Reduction in Benefits for Members in Foreign Service 19 |
Section 3.7 | Reduction in Benefits for Members Electing to Maintain Prior Plan Benefits 19 |
Section 3.8 | Reduction in Benefits for FICA Tax Imposed on Plan Benefits |
19 |
Section 3.9 | Benefits Subject to Withholding 20 |
Section 3.10 | Beneficiary Designation 20 |
ARTICLE IV PLAN ADMINISTRATION | 21 |
Section 4.1 | Employee Relations Committee 21 |
Section 4.2 | Claims Procedures 21 |
Section 4.3 | Delegated Responsibilities 23 |
Section 4.4 | Amendment and Termination 23 |
Section 4.5 | Payments 23 |
Section 4.6 | Non-Assignability of Benefits 23 |
Section 4.7 | Plan Unfunded 24 |
Section 4.8 | Applicable Law 24 |
Section 4.9 | No Employment Rights Conferred 24 |
Section 4.10 | Plan to Comply with Code Section 409A 25 |
Section 1.1 | Name of Plan. The name of this Plan is the “Supplemental Salaried Employees’ Retirement Plan”. |
Section 1.2 | Background and Effective Date. The original effective date of the Plan is January 1, 1976. The Base Plan was amended effective July 1, 1989 to, inter alia, establish pension retirement accounts and to permit lump sum payments of the amounts credited to such accounts. The Base Plan amendment required changes in the administration and interpretation of this Plan. A prior amendment and restatement of the Plan was generally effective for Members and Beneficiaries whose Benefit Commencement Date was on or after July 1, 1989, and was intended to reflect the administration and operation of the Plan in practice since July 1, 1989, including, with respect to benefits earned and vested as of December |
Section 1.3 | ERISA and Code Status. This Plan is intended to be an unfunded plan for the benefit of a select group of management or highly compensated employees exempt from parts 2, 3 and 4 of Title I of the Employee Retirement Income |
Section 2.1 | “Actuarial Equivalent” ” shall mean equality in value of the aggregate benefits expected to be received under different forms of payment. For those Members whose benefit under the Base Plan is not calculated under Appendices B, C, or D of the Base Plan, the underlying actuarial assumptions used as a basis for these calculations are those which are stated in the Base Plan. For those Members whose benefit under the Base Plan is calculated under Appendices B, C, or D of the Base Plan, the underlying actuarial assumptions used for calculating lump sums and the reduction under Section 3.7 are those in effect under the Base Plan prior to January 1, 2000. For all other purposes, the assumptions currently in effect under the Base Plan shall be used. |
Section 2.2 | “Additional EICP Benefit” ” shall mean a benefit payable for the life of the surviving spouse of any Member Eligible for the Additional EICP Benefit that is equal to 25% of the retirement benefit that would have been payable to such Member under the Base Plan at Normal Retirement Age or, if later, on the Member’s Benefit Commencement Date, if such benefit had been paid in the form of a life annuity and if the limitations of Code sections 401(a)(17) and 415 were not taken into account in calculating the benefit; provided, however, that in any |
Section 2.3 | “Base Plan” shall mean the Colgate-Palmolive Company Employees’ Retirement Income Plan, as amended from time to time. |
Section 2.4 | “Benefit Commencement Date” shall mean the first day of the month as of which a Member’s benefit is paid as an annuity or in any other form under this Plan. |
Section 2.5 | “Determination Date” shall mean the date as of which benefits commence under the Base Plan. |
Section 2.6 | “Eligible Employee” shall mean an “Eligible Employee,” as defined in the Base Plan, who is entitled to a retirement benefit under the Base Plan which is limited by Code sections 401(a)(17) and/or 415, and/or any other Employee who satisfies each of the requirements of Section 2.10. |
Section 2.7 | “Grandfathered Benefit” shall mean the lesser of (i) the benefit amount stated in a schedule maintained by the Employee Relations Committee (which represents the present value of the amount to which the Member would have been entitled under |
Section 2.8 | “Maximum Benefit” shall mean the maximum annual benefit payable in the form of a straight life annuity or, in the case of a married Member, a qualified joint and survivor annuity as defined in Code section 417(b), which is permitted to be paid to a Member under the Base Plan, as determined under all applicable provisions of the Code and ERISA, specifically taking into account the limitations of Code sections 401(a)(17) and 415, and any applicable regulations thereunder. It is intended that the Maximum Benefit, as defined herein, shall automatically |
Section 2.9 | “Member” shall mean an Eligible Employee who participates in this Plan pursuant to Section 3.1. An Eligible Employee shall remain a Member under this Plan until all amounts payable on his behalf from this Plan have been paid. |
Section 2.10 | “Member Eligible for the Additional EICP Benefit” shall mean an Employee who (i) is in salary grade 19 or above, (ii) has been credited with ten (10) or more years of vesting service under the Base Plan, (iii) is covered under the Above and Beyond Plan, (iv) is not eligible for the indexation of accrued benefit under Section 1.1 of Appendix H of the Base Plan; (v) effective for Benefit Commencement Dates on or after September 27, 2017, elects to receive his benefit under the Base Plan in a form of annuity other than a Joint Annuitant Option with a 100% survivor feature, (vi) has been married to the same Spouse for at least one year prior to his Benefit Commencement Date, (vii) is married to the person described in (vi) at the time of his death, and (viii) either the person described in (vi) and (vii) above is the Member’s only designated beneficiary under the Base Plan or the Base Plan benefit is paid in the form of an annuity that does not require the designation of a beneficiary. In addition to the foregoing requirements and solely for purposes of Section 3.3(b), the Employee also must have attained age 55 prior to death and the Beneficiary’s benefit under the Base |
Section 2.11 | “Non-Grandfathered Benefit” shall mean the portion of the benefit payable under this Plan which exceeds the Grandfathered Benefit, calculated using the actuarial assumptions specified in Section 2.1 as of the Determination Date. |
Section 2.12 | “Specified Employee” shall mean a person identified in accordance with procedures adopted by the Company that reflect the requirements of Code section 409A(a)(2)(B)(i). |
Section 3.1 | Participation. An Eligible Employee shall become a Member under this Plan on the earlier of (i) the date his accrued benefit under the Base Plan, determined without regard to the limitations of Code Sections 401(a)(17) and 415, exceeds the Maximum Benefit, or (ii) the date he satisfies each of the requirements of Section 2.10. |
Section 3.2 | Amount of Member’s Benefit. |
(a) | In the case of any Member whose Determination Date is coincident with or immediately following his separation from service, such Member shall be entitled to a benefit under this Plan, the Actuarial Equivalent of which is equal to the difference between: |
(ii) | the benefit actually payable under the Base Plan; |
(c) | In addition to any benefit provided under Section 3.2(a) or (b), an Additional EICP Benefit shall be paid to the surviving spouse of any Member Eligible for the Additional EICP Benefit who dies on or after his Benefit Commencement Date. |
(d) | The benefit amount determined under Sections 3.2(a), (b) and (c) above is subject to reduction as provided in Sections 3.6, 3.7 and 3.8. The benefit amount (after the reductions required under Sections 3.6 and 3.7 but prior to the reduction required under Section 3.8), when expressed as a straight life annuity, and then added to the benefit payable under the Base Plan, when expressed as a straight life annuity (in each case using the actuarial assumptions specified in Section 2.1 which are in effect on the Benefit Commencement Date), shall be limited to 70 percent of the Member’s salary based on the date of separation from service plus the value of the executive incentive compensation (whether or not payable in cash) awarded for services rendered in the calendar year immediately preceding the calendar year containing the separation from service date. For this purpose, executive incentive compensation includes cash and non-cash awards under the Executive Incentive Compensation Plan of the Company. Also for this purpose, restricted stock issued pursuant to the Executive Incentive Compensation Plan shall be valued at its publicly traded value on the New York Stock Exchange at the close of business on the date of grant. |
(e) | The benefit amount determined under Sections 3.2(a), (b) and (c) above (after the reductions required under Sections 3.2(d), 3.6, and 3.7 but prior to the reduction required under Section 3.8) when expressed as a present value |
Section 3.3 | Amount of Beneficiary’s Benefit . |
(a) | Upon the death of a Member whose Beneficiary is eligible for a Beneficiary’s benefit under the Base Plan, such Beneficiary shall be entitled to an annual benefit under this Plan equal to the difference between (i) the benefit that would have been payable to the Beneficiary under the Base Plan if the limitations of Code Sections 401(a)(17) and 415 were not taken into account in calculating the benefit; and (ii) the benefit actually payable to the Beneficiary under the Base Plan. |
(b) | In addition to the benefit provided under Section 3.3(a), an Additional EICP Benefit shall be paid to the surviving spouse of any Member Eligible for the Additional EICP Benefit who dies before his Benefit Commencement Date, provided, however, that the amount of such Additional EICP Benefit shall be reduced by any “Death-In-Service Benefit” payable under the Above and Beyond Plan for so long as such benefit is payable under the Above and Beyond Plan. |
Section 3.4 | Time and Form of Payment. |
(a) | Separation from Service On or After January 1, 2008 – Grandfathered Benefit. Payment of the Grandfathered Benefit under this Plan to a Member or Beneficiary shall commence as of the Determination Date and, except as provided in this Section 3.4(a), shall be paid in the same form as the benefit payable under the Base Plan. |
(i) | A Member or Beneficiary whose benefit under the Base Plan is calculated under Appendices B, C or D of the Base Plan may request the Employee Relations Committee to approve payment of his Grandfathered Benefit in a lump sum. Such request must be made at least 90 days prior to his retirement date and will be accepted or denied in the sole discretion of the Employee Relations Committee. |
(ii) | Except for Grandfathered Benefits determined under the Hill’s Plan, a Member or Beneficiary whose benefit under the Base Plan is not |
(iii) | In the case of a Member whose Grandfathered Benefit was determined under the Hill’s Plan, and where the Actuarial Equivalent of such Grandfathered Benefit is $20,000 or less, the Employee Relations Committee in its sole discretion may require that the Grandfathered Benefit be paid in a lump sum. |
(b) | Separation from Service on or After January 1, 2008 – Non-Grandfathered Benefit. |
(i) | A Member whose benefit under the Base Plan is calculated under Appendices B, C or D of the Base Plan and who is married on the date of his separation from service shall receive payment of the Non-Grandfathered Benefit in the form of a Joint and 50% Survivor Annuity commencing as soon as practicable following the Member’s separation from service. If such Member is not married on the date of his separation from service, payment of the Non-Grandfathered Benefit shall be made in the form of a level monthly annuity for life commencing as soon as practicable following the Member’s separation from service. Payment to a Beneficiary shall be made in the form of a level monthly annuity for life commencing as soon as practicable following the Member’s death. |
(ii) | A Member whose benefit under the Base Plan is not calculated under Appendices B, C or D of the Base Plan shall receive payment of the Non-Grandfathered Benefit in the form of a lump sum as soon as practicable following the Member’s separation from service. Payment to the Beneficiary of such a Member who dies before his Benefit Commencement Date shall be made in the form of a lump sum as soon as practicable following the Member’s death. Payment to the surviving spouse of such a Member who is both a Member Eligible for the Additional EICP Benefit and dies after his Benefit Commencement Date shall be made in accordance with Section 3.2(c). |
(c) | Separation from Service Before January 1, 2008. See Appendix A. |
(d) | Change of Control – Grandfathered Benefit. Following the occurrence of a “Change of Control,” as defined under Section 6.02 of the Amended and Restated Trust Agreement, dated August 2, 1990, between the Company and the Bank of New York (the “Trust Agreement”), distribution of a Member’s Grandfathered Benefit (other than Grandfathered Benefits determined under the Hill’s Plan) shall be made in accordance with the provisions of Section 4.02(a) of the Trust Agreement. |
(e) | Change of Control – Non-Grandfathered Benefit. Upon the occurrence of a transaction which is both a “Change of Control,” as defined under Section 6.02 of the Trust Agreement, and meets the requirements of Code Section 409A(a)(2)(A)(v) and the regulations thereunder, a Member whose benefit under the Base Plan is calculated under Appendices B, C or D of the Base Plan and who terminates employment within two years of the date of such transaction shall receive payment of his Non-Grandfathered Benefit in the form of a lump sum. Payments to other Members shall be made in accordance with Section 3.4(b). The foregoing notwithstanding, in any case where the Member is a Specified Employee, payment of the Non-Grandfathered Benefit under this Section 3.4(e) shall be deferred until the earlier of (i) the date that is six months following the Member’s separation from service, or (ii) the date of the Member’s death. |
Section 3.5 | Effect of Changes in the Maximum Benefit. If, prior to a Member’s Benefit Commencement Date, the benefits payable under the Base Plan increase as a |
Section 3.6 | Reduction in Benefits for Members in Foreign Service. A Member’s benefit under this Plan (including his Beneficiary's benefits) based upon his participation in the Plan subsequent to December 31, 1965 shall be reduced by any foreign retirement benefits which the Member has received or will receive which are attributable to direct or indirect contributions by the Company or any of its Subsidiaries or branches. The amount of this reduction shall be determined in accordance with the provisions of the Base Plan. |
Section 3.7 | Reduction in Benefits for Members Electing to Maintain Prior Plan Benefits. For those Members who elected to make Contributions to Maintain Prior Plan Benefits pursuant to Appendix C of the Base Plan, the benefit otherwise payable under this Plan shall be reduced by an amount determined to be the benefit attributable to the contributions that would have been required of the Member under the Base Plan formula to Maintain Prior Plan Benefits for benefits in excess of the Maximum Benefit, and interest thereon calculated at a rate equal to the interest crediting rate under the Base Plan during the period that such contributions would have been required. |
Section 3.8 | Reduction in Benefits for FICA Tax Imposed on Plan Benefits. Effective for Benefit Commencement Dates on or after January 1, 2005, where the Member’s |
Section 3.9 | Benefits Subject to Withholding. The benefits payable under this Plan shall be subject to the deduction of any federal, state, or local income taxes, employment taxes or other taxes which are required to be withheld from such payments by applicable laws and regulations. Any employment taxes owed by the Member with respect to any deferral, accrual or benefit payable under this Plan which have not been satisfied under Section 3.8 may be withheld from benefits paid under this Plan or any other compensation of the Member. |
Section 3.10 | Beneficiary Designation. The Member's Beneficiary for purposes of any survivor benefits under this Plan will automatically be the same as such Member’s Beneficiary under the Base Plan. Notwithstanding any other provision of this Plan, the consent of the Member's Spouse shall not be required to elect a lump sum payment of the Grandfathered Benefit. In the absence of a Beneficiary who survives the Member, upon the Member’s death, payment of any benefit owed to a Member's Beneficiary, if any, shall be made to the Member's estate in a lump sum as soon as practicable. |
Section 4.1 | Employee Relations Committee. This Plan shall be administered by the Employee Relations Committee which shall have full authority to administer and interpret this Plan, make payments and maintain records hereunder, including but not limited to the power: |
(i) | to determine who are Eligible Employees for purposes of participation in the Plan; |
(ii) | to interpret the terms and provisions of the Plan and to determine any and all questions arising under the Plan, including without limitation, the right to remedy possible ambiguities, inconsistencies, or omissions by a general rule or particular decision; and |
(iii) | to adopt rules consistent with the Plan. |
Section 4.2 | Claims Procedures. Any complaint with regard to benefits under the Plan should be directed to the Secretary of the Employee Relations Committee, Colgate-Palmolive, 300 Park Avenue, New York, NY 10022. Such complaint must be |
Section 4.3 | Delegated Responsibilities. The Employee Relations Committee shall have the authority to delegate any of its responsibilities to such persons as it deems proper. |
Section 4.4 | Amendment and Termination. The Company may amend, modify or terminate this Plan at any time, provided, however, that no such amendment, modification or termination shall reduce any benefit under this Plan to which a Member, or the Member’s Beneficiary, is entitled under Article III prior to the date of such amendment or termination, and in which such Member or Beneficiary would have been vested if such benefit had been provided under the Base Plan, unless the Member or Beneficiary either becomes entitled to an amount equal to the Actuarial Equivalent of such benefit under another plan, including the Base Plan, program or practice adopted by the Company or the Member or Beneficiary consents in writing to such reduction. The Employee Relations Committee may make changes to this Plan which do not materially reduce the value of the benefits paid under this Plan to conform to, or take advantage of, any governmental requirements, statutes, regulations or other authority. |
Section 4.5 | Payments. The Company will pay all benefits arising under this Plan and all costs, charges and expenses relating thereto out of its general assets. |
Section 4.6 | Non-Assignability of Benefits. Except as otherwise required by law, neither any benefit payable hereunder nor the right to receive any future benefit under this Plan may be anticipated, alienated, sold, transferred, assigned, pledged, encumbered, or subjected to any charge or legal process, and if any attempt is made to do so, or a person eligible for any benefits under this Plan becomes |
Section 4.7 | Plan Unfunded. Nothing in this Plan shall be interpreted or construed to require the Company in any manner to fund any obligation to the Members or Beneficiaries hereunder. Nothing contained in this Plan nor any action taken here under shall create, or be construed to create, a trust of any kind, or a fiduciary relationship between the Company and the Members or Beneficiaries. Any funds which may be accumulated in order to meet any obligation under this Plan shall for all purposes continue to be a part of the general assets of the Company. To the extent that any Member or Beneficiary acquires a right to receive payments from the Company under this Plan, such rights shall be no greater than the rights of any unsecured general creditor of the Company. |
Section 4.8 | Applicable Law. All questions pertaining to the construction, validity and effect of this Plan shall be determined in accordance with the laws of the State of Delaware, to the extent not preempted by Federal law. |
Section 4.9 | No Employment Rights Conferred. The establishment of the Plan shall not be construed as conferring any rights upon any Eligible Employee for continuation of employment, nor shall it be construed as limiting in any way the right of the |
Section 4.10 | Plan to Comply with Code Section 409A. Notwithstanding any provision to the contrary in this Plan, each provision in this Plan shall be interpreted to permit the deferral of compensation in accordance with Code section 409A and any provision that would conflict with such requirements shall not be valid or enforceable. |
(c) | Separation from Service Prior to January 1, 2008. |
(i) | Determination Date Prior to January 1, 2006. Payment of benefits under this Plan to a Member or Beneficiary whose Determination Date is prior to January 1, 2006 shall commence on the Determination Date and, except as provided in this Section 3.4(c)(i), shall be payable in the same form as the benefit payable under the Base Plan. |
(A) | A Member whose benefit is calculated under Appendices B, C or D of the Base Plan and whose Determination Date is on or before July 27, 2005 may request the Employee Relations Committee to approve payment of his Grandfathered Benefit in a lump sum. Such request must be made at least ninety (90) days prior to his retirement date and will be accepted or denied in the sole discretion of the Employee Relations Committee. In the event a lump sum payment request is approved, the amount of the payment shall be determined based upon the actuarial assumptions specified in Section 2.1 which are in effect on the Benefit Commencement Date. |
(B) | A Member whose benefit is calculated under Appendices B, C or D of the Base Plan and whose Determination Date is on or after July 27, 2005 and before January 1, 2006 may request the Employee |
(C) | Any other Member whose benefit under the Base Plan is payable in the form of a lump sum may, with the Employee Relations Committee approval, receive payment of his entire benefit under the Plan in the form of a lump sum. The approval of any such request shall be deemed a cancellation of amounts deferred under the Plan during 2005 pursuant to Q&A-20(a) of IRS Notice 2005-1. |
(ii) | Determination Date After December 31, 2005. |
(A) | Grandfathered Benefit. Payment of the Grandfathered Benefit under this Plan to a Member or Beneficiary shall commence on the Determination Date and, except as provided in this Section 3.4(c)(ii)(A), shall be paid in the same form as the benefit payable under the Base Plan. |
(I) | A Member or Beneficiary whose benefit under the Base Plan is calculated under Appendices B, C or D of the Base Plan may request the Employee Relations Committee to approve payment of his Grandfathered Benefit in a lump sum. Such request must be made at least 90 days prior to his retirement date and will be accepted or denied in the sole discretion of the Employee Relations Committee. |
(II) | A Member or Beneficiary whose benefit under the Base Plan is not calculated under Appendices B, C or D may, with the Employee Relations Committee approval, receive payment of his Grandfathered Benefit in the form of a lump sum. |
(B) | Non-Grandfathered Benefit. Except as otherwise provided herein, |
(I) | a Member whose benefit under the Base Plan is calculated under Appendices B, C or D of the Base Plan and who is married on the date of his separation from service shall receive payment of the Non-Grandfathered Benefit in the form of a Joint and 50% Survivor Annuity, commencing as soon as practicable following the Member’s separation from service. If such Member is not married on the date of his separation from service, payment of the Non-Grandfathered Benefit shall be made in the form of a level monthly annuity for life commencing as soon as practicable following the Member’s separation from service. Payment to a Beneficiary shall be made in the form of a level monthly annuity for life |
(II) | A Member or Beneficiary whose benefit under the Base Plan is not calculated under Appendices B, C or D of the Base Plan shall receive payment of the Non-Grandfathered Benefit in the form of a lump sum as soon as practicable following the Member’s separation from service. Payment to a Beneficiary shall be made in the form of a lump sum as soon as practicable following the Member’s death. |
(iii) | Members under the Hill’s Plan. Sections 3.4(a) and (b) shall govern the time and form of payment for benefits earned under the Hill’s Plan. |
Three Months Ended March 31, 2018 | |||
Earnings: | |||
Income before income taxes | $ | 924 | |
Add: | |||
Fixed charges | 65 | ||
Less: | |||
Income from equity investees | (3 | ) | |
Capitalized interest | — | ||
Income as adjusted | $ | 986 | |
Fixed Charges: | |||
Interest on indebtedness and amortization of debt expense and discount or premium | $ | 47 | |
Rents of one-third representative of interest factor | 18 | ||
Capitalized interest | — | ||
Total fixed charges | $ | 65 | |
Ratio of earnings to fixed charges | 15.2 |
1. | I have reviewed this quarterly report on Form 10-Q of Colgate-Palmolive Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Ian Cook |
Ian Cook |
Chairman of the Board, President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Colgate-Palmolive Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Dennis J. Hickey |
Dennis J. Hickey |
Chief Financial Officer |
(1) | the Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018 (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and |
(2) | information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Colgate-Palmolive Company. |
/s/ Ian Cook |
Ian Cook |
Chairman of the Board, President and |
Chief Executive Officer |
/s/ Dennis J. Hickey |
Dennis J. Hickey |
Chief Financial Officer |
Document and Entity Information |
3 Months Ended |
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Mar. 31, 2018
shares
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Document and Entity Information [Abstract] | |
Entity Registrant Name | COLGATE PALMOLIVE CO |
Entity Central Index Key | 0000021665 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2018 |
Document Fiscal Year Focus | 2018 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Trading Symbol | CL |
Entity Common Stock, Shares Outstanding | 872,320,741 |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) $ in Millions |
3 Months Ended | ||||||
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Mar. 31, 2018
USD ($)
Dividend
$ / shares
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Mar. 31, 2017
USD ($)
Dividend
$ / shares
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Income Statement [Abstract] | |||||||
Net sales | $ 4,002 | $ 3,762 | [1] | ||||
Cost of sales | 1,594 | 1,493 | [1] | ||||
Gross profit | 2,408 | 2,269 | [1] | ||||
Selling, general and administrative expenses | 1,392 | 1,336 | [1] | ||||
Other (income) expense, net | 33 | 21 | [1] | ||||
Operating profit | 983 | 912 | [1] | ||||
Non-service related postretirement costs | 24 | 27 | [1] | ||||
Interest (income) expense, net | 35 | 23 | [1] | ||||
Income before income taxes | 924 | 862 | [1] | ||||
Provision for income taxes | 246 | 251 | [1] | ||||
Net income including noncontrolling interests | 678 | 611 | [1] | ||||
Less: Net income attributable to noncontrolling interests | 44 | 41 | [1] | ||||
Net income attributable to Colgate-Palmolive Company | $ 634 | $ 570 | [1] | ||||
Earnings per common share, basic (in dollars per share) | $ / shares | $ 0.72 | $ 0.64 | [1] | ||||
Earnings per common share, diluted (in dollars per share) | $ / shares | 0.72 | 0.64 | [1] | ||||
Dividends declared per common share (in dollars per share) | $ / shares | [2] | $ 0.82 | $ 0.79 | [1] | |||
Number of dividends declared per quarter (in dividends) | Dividend | 2 | 2 | |||||
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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions |
3 Months Ended | ||||
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Mar. 31, 2018 |
Mar. 31, 2017 |
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Statement of Comprehensive Income [Abstract] | |||||
Net income including noncontrolling interests | $ 678 | $ 611 | [1] | ||
Other comprehensive income (loss), net of tax: | |||||
Cumulative translation adjustments | 108 | 132 | |||
Retirement plans and other retiree benefit adjustments | 14 | 13 | |||
Gains (losses) on cash flow hedges | (1) | (10) | |||
Total Other comprehensive income (loss), net of tax | 121 | 135 | |||
Total Comprehensive income including noncontrolling interests | 799 | 746 | |||
Less: Net income attributable to noncontrolling interests | 44 | 41 | [1] | ||
Less: Cumulative translation adjustments attributable to noncontrolling interests | 3 | 7 | |||
Total Comprehensive income attributable to noncontrolling interests | 47 | 48 | |||
Total Comprehensive income attributable to Colgate-Palmolive Company | $ 752 | $ 698 | |||
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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
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Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 85 | $ 77 |
Basis of Presentation |
3 Months Ended |
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Mar. 31, 2018 | |
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. The Company adopted Accounting Standards Update (“ASU”) No. 2017-07, “Compensation–Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” on January 1, 2018. For further information regarding the impact of the adoption of ASU No. 2017-07, refer to Note 3, Recent Accounting Pronouncements and Updated Accounting Policies and Note 13, Segment Information. 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, 2017, filed with the Securities and Exchange Commission (the “SEC”). |
Use of Estimates |
3 Months Ended |
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Mar. 31, 2018 | |
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. |
Recent Accounting Pronouncements and Updated Accounting Policie |
3 Months Ended |
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Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements and Updated Accounting Policies | Recent Accounting Pronouncements and Updated Accounting Policies Recent Accounting Pronouncements In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”), which permits the reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act (the “TCJA” or “U.S. tax reform”) from Accumulated other comprehensive income (loss) to Retained earnings. This new guidance is effective for the Company beginning on January 1, 2019, with early adoption permitted, and must be applied either in the period of adoption or retrospectively to periods in which the effects of the TCJA are recognized. The Company elected to adopt this new guidance early, beginning on January 1, 2018, and reclassified $163 in the current period. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” amending the eligibility criteria for hedged items and transactions to expand an entity’s ability to hedge nonfinancial and financial risk components. The new guidance eliminates the requirement to separately measure and present hedge ineffectiveness and aligns the presentation of hedge gains and losses with the underlying hedge item. The new guidance also simplifies the hedge documentation and hedge effectiveness assessment requirements. The new guidance is effective for the Company beginning on January 1, 2019, with early adoption permitted. The amended presentation and disclosure requirements must be adopted on a prospective basis, while any amendments to cash flow and net investment hedge relationships that exist on the date of adoption must be applied on a “modified retrospective” basis, meaning a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the year of adoption. While the Company is currently assessing the impact of the new standard, this new guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting,” clarifying when a change to the terms or conditions of a stock-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. The new guidance was effective for the Company on a prospective basis beginning on January 1, 2018 and did not impact the Company’s Consolidated Financial Statements as it is not the Company’s practice to change either the terms or conditions of stock-based payment awards once they are granted. In March 2017, the FASB issued ASU No. 2017-07, “Compensation–Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” changing the presentation of the net periodic benefit cost on the Statement of Income and limiting the amount of net periodic benefit cost eligible for capitalization to assets. The new guidance permits only the service cost component of net periodic benefit cost to be eligible for capitalization. The new guidance also requires entities to present the service cost component of net periodic benefit cost together with compensation costs arising from services rendered by employees during the period. The non-service related components of net periodic benefit cost, which include interest, expected return on assets, amortization of prior service costs and actuarial gains and losses, are required to be presented outside of Operating profit. The line item or items used to present the other components of net periodic benefit cost must be disclosed in the Notes to the Consolidated Financial Statements, if not separately described on the Statement of Income. The new presentation requirement is required to be adopted on a “full retrospective” basis, meaning the standard is applied to all of the periods presented in the financial statements, while the limitation on capitalization can only be adopted on a prospective basis. Effective January 1, 2018, as required, the Company adopted this standard on a retrospective basis. As permitted by the new guidance, the Company used the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the basis for applying the retrospective presentation requirements. As a result, for all periods presented, only the service related component of pension and other postretirement benefit costs is included in Operating profit. The non-service related components are included in a new line item, “Non-service related postretirement costs,” which is below Operating profit. For the quarter ended March 31, 2017, the Company reclassified $26 and $1 of non-service related components of pension and other postretirement benefit costs from Selling, general and administrative expenses and Other (income) expense, net, respectively, to Non-service related postretirement costs. Adoption of this standard had no effect on Net income attributable to Colgate-Palmolive Company, Earnings per common share or Cash flow. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” eliminating the requirement to calculate the implied fair value, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard is effective for the Company on a prospective basis beginning on January 1, 2020, with early adoption permitted. This new guidance is not expected to have an impact on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which provides additional guidance on evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The guidance requires an entity to evaluate if substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the new guidance would define this as an asset acquisition; otherwise, the entity then evaluates whether the asset meets the requirement that a business include, at a minimum, an input and substantive process that together significantly contribute to the ability to create outputs. The guidance was effective for the Company on a prospective basis beginning on January 1, 2018. This new guidance did not have an impact on the Company’s Consolidated Financial Statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which clarifies how certain cash receipts and payments are to be presented in the statement of cash flows. The guidance was effective for the Company on January 1, 2018. This new guidance did not have an impact on the Company’s Consolidated Financial Statements. In February 2016, the FASB issued its final standard on lease accounting, ASU No. 2016-02, “Leases (Topic 842),” which supersedes Topic 840, “Leases.” The new accounting standard requires the recognition of right-of-use assets and lease liabilities for all long-term leases, including operating leases, on the balance sheet. The new standard also provides additional guidance on the measurement of the right-of-use assets and lease liabilities and will require enhanced disclosures about the Company’s leasing arrangements. Under current accounting standards, substantially all of the Company’s leases are considered operating leases and, as such, are not recognized on the Consolidated Balance Sheet. This new standard is effective for the Company beginning on January 1, 2019, with early adoption permitted. The standard requires a “modified retrospective” adoption, meaning the standard is applied to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently assessing the impact of the new standard on its Consolidated Financial Statements. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments–Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The updated guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The amendment to the standard was effective for the Company beginning on January 1, 2018 and did not have an impact on the Company’s Consolidated Financial Statements. In May 2014, the FASB and the International Accounting Standards Board issued their final converged standard on revenue recognition. The standard, issued as ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” by the FASB, provides a comprehensive revenue recognition model for all contracts with customers and supersedes current revenue recognition guidance. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to its customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The new standard also includes enhanced disclosures. During 2016, the FASB issued several accounting updates (ASU No. 2016-08, 2016-10 and 2016-12) to clarify implementation guidance and correct unintended application of the guidance. The standard allows for either full retrospective adoption or modified retrospective adoption. The Company adopted the new standard on January 1, 2018, on a “modified retrospective” basis, which did not have a material impact on the Company’s Consolidated Financial Statements. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the 2018 opening balance of retained earnings. Results for periods beginning on or after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the prior accounting guidance under Topic 605, “Revenue Recognition.” The new accounting standard changes only the timing of when certain of the Company’s sales are recorded and does not change the amount at which sales are recorded. The application of the new accounting standard did not have a material impact on the Company’s Consolidated Financial Statements for the period ended March 31, 2018 and is not expected to have a material impact on the Company’s Consolidated Financial Statements in future periods. Updated Accounting Policies Revenue Recognition Accounting Policy The Company’s revenue contracts represent a single performance obligation to sell its products to trade customers. Sales are recorded at the time control of the products is transferred to trade customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the products. Control is the ability of trade customers to direct the “use of” and “obtain” the benefit from our products. In evaluating the timing of the transfer of control of products to trade customers, the Company considers several control indicators, including significant risks and rewards of products, the Company’s right to payment and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to trade customers. Net sales reflect the transaction prices for contracts, which include units shipped at selling list prices reduced by variable consideration. Variable consideration includes expected sales returns and the cost of current and continuing promotional programs. Current promotional programs primarily include product listing allowances and co-operative advertising arrangements. Continuing promotional programs are predominantly consumer coupons and volume-based sales incentive arrangements. The cost of promotional programs is estimated using the expected value method considering all reasonably available information, including the Company’s historical experience and its current expectations, and is reflected in the transaction price when sales are recorded. Adjustments to the cost of promotional programs in subsequent periods are generally not material, as the Company’s promotional programs are typically of short duration, thereby reducing the uncertainty inherent in such estimates. Sales returns are generally accepted at the Company’s discretion and are not material to the Company’s Consolidated Financial Statements. The Company’s contracts with trade customers do not have significant financing components or non-cash consideration and the Company does not have unbilled revenue or significant amounts of prepayments from customers. The Company records Net sales excluding taxes collected on its sales to its trade customers. Shipping and handling activities are accounted for as contract fulfillment costs and classified as Selling, general and administrative expenses. |
Acquisitions and Divestitures |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions In January 2018, the Company acquired all of the outstanding equity interests of Physicians Care Alliance, LLC (“PCA”) and Elta MD Holdings, Inc. (“Elta”), professional skin care businesses, for aggregate cash consideration of approximately $730. With these acquisitions, the Company has entered the professional skin care category, which complements its existing global personal care businesses and resulted in the recognition of additional goodwill. Total purchase price consideration of $730 has been allocated on a preliminary basis to the net assets acquired based on their respective estimated fair values at January 2018, as follows:
Based on the Company’s preliminary purchase price allocation, other intangible assets acquired include trademarks of $292 with useful lives of 25 years and customer relationships of $146 with useful lives ranging from 12 to 13 years. Goodwill of $332 was allocated to the North America segment. The Company expects that approximately 40% of the goodwill will be deductible for tax purposes. The preliminary estimates of the fair value of identifiable assets acquired and liabilities assumed are subject to revisions, which may result in adjustments to the preliminary values discussed above. Pro forma results of operations have not been presented as the impact on the Company’s Condensed Consolidated Financial Statements is not material. The Company expects to finalize the purchase price allocation prior to the end of 2018. |
Restructuring and Related Implementation Charges |
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Restructuring and Related Activities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Implementation Charges | Restructuring and Related Implementation Charges In the fourth quarter of 2012, the Company commenced a restructuring program (the “Global Growth and Efficiency Program”) for sustained growth. The program was expanded in 2014 and expanded and extended in 2015. Building on the Company’s successful implementation of the program, on October 26, 2017, the Board approved an expansion of the Global Growth and Efficiency Program and an extension of the program through December 31, 2019 to take advantage of additional opportunities to streamline the Company’s operations. Initiatives under the Global Growth and Efficiency Program continue to 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. Including the most recent expansion, cumulative pretax charges resulting from the Global Growth and Efficiency Program, once all phases are approved and implemented, are estimated to be in the range of $1,730 to $1,885 ($1,280 to $1,380 aftertax). The Company anticipates that pretax charges for 2018 will approximate $100 to $175 ($75 to $125 aftertax). It is expected that substantially all charges resulting from the Global Growth and Efficiency Program will be incurred by December 31, 2019. The pretax charges resulting from the Global Growth and Efficiency Program are currently estimated to be comprised of the following categories: Employee-Related Costs, including severance, pension and other termination benefits (50%); asset-related costs, primarily Incremental Depreciation and Asset Impairments (10%); and Other charges, which include contract termination costs, consisting primarily of related implementation charges resulting directly from exit activities (20%) and the implementation of new strategies (20%). Over the course of the Global Growth and Efficiency Program, it is currently estimated that approximately 80% of the charges will result in cash expenditures. The Company expects that the cumulative pretax charges, once all projects are approved and implemented, will relate to initiatives undertaken in North America (15%), Latin America (5%), Europe (20%), Asia Pacific (5%), Africa/Eurasia (5%), Hill’s Pet Nutrition (10%) and Corporate (40%), which includes substantially all of the costs related to the implementation of new strategies, noted above, on a global basis. The Company expects that, when it has been fully implemented, the Global Growth and Efficiency Program will have contributed a net reduction of approximately 3,800 to 4,400 positions from the Company’s global employee workforce. For the three months ended March 31, 2018 and 2017, restructuring and related implementation charges are reflected in the Condensed Consolidated Statements of Income as follows:
Restructuring and related implementation charges in the preceding table are recorded in the Corporate segment as these initiatives are predominantly centrally directed and controlled and are not included in internal measures of segment operating performance. Total charges incurred for the Global Growth and Efficiency Program relate to initiatives undertaken by the following reportable operating segments:
Since the inception of the Global Growth and Efficiency Program in the fourth quarter of 2012, the Company has incurred cumulative pretax charges of $1,589 ($1,173 aftertax) in connection with the implementation of various projects as follows:
The majority of costs incurred since inception relate to the following projects: the implementation of the Company’s overall hubbing strategy; the extension of shared business services and streamlining of global functions; the consolidation of facilities; the closing of the Morristown, New Jersey personal care facility; the simplification and streamlining of the Company’s research and development capabilities and oral care supply chain, both in Europe; redesigning the European commercial organization; restructuring how the Company will provide future retirement benefits to substantially all of the U.S.-based employees participating in the Company’s defined benefit retirement plan by shifting them to the Company’s defined contribution plan; and the implementation of a Corporate efficiencies program. The following table summarizes the activity for the restructuring and related implementation charges discussed above and the related accruals:
Employee-Related Costs primarily include severance and other termination benefits and are calculated based on long-standing benefit practices, local statutory requirements and, in certain cases, voluntary termination arrangements. Employee-Related Costs also include pension and other retiree benefit enhancements amounting to $4 for the three months ended March 31, 2018, which are reflected as Charges against assets within Employee-Related Costs in the preceding table as the corresponding balance sheet amounts are reflected as a reduction of pension assets or an increase in pension and other retiree benefit liabilities. See Note 10, Retirement Plans and Other Retiree Benefits for additional information. Incremental Depreciation is recorded to reflect changes in useful lives and estimated residual values for long-lived assets that will be taken out of service prior to the end of their normal service period. Asset Impairments are recorded to write down assets held for sale or disposal to their fair value based on amounts expected to be realized. Charges against assets within Asset Impairments are net of cash proceeds pertaining to the sale of certain assets. Other charges consist primarily of charges resulting directly from exit activities and the implementation of new strategies as a result of the Global Growth and Efficiency Program. These charges for the three months ended March 31, 2018 include third-party incremental costs related to the development and implementation of new business and strategic initiatives of $8 and contract termination costs and charges resulting directly from exit activities of $1. These charges were expensed as incurred. |
Inventories |
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Inventories | Inventories Inventories by major class are as follows:
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Shareholders' Equity |
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Shareholders' Equity | Shareholders’ Equity Changes in the components of Shareholders’ Equity for the three months ended March 31, 2018 are as follows:
(1) As a result of the early adoption of ASU 2018-02, the Company reclassified the stranded tax effects in Accumulated other comprehensive income (loss) resulting from the TCJA to Retained earnings. See Note 3, Recent Accounting Pronouncements and Updated Accounting Policies for additional information. Accumulated other comprehensive income (loss) includes cumulative translation losses of $2,832 and $2,927 at March 31, 2018 and December 31, 2017, respectively, and unrecognized retirement plan and other retiree benefits costs of $1,062 and $923 at March 31, 2018 and December 31, 2017, respectively. |
Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share For the three months ended March 31, 2018 and 2017, earnings per share were as follows:
For the three months ended March 31, 2018 and 2017, the average number of stock options and restricted stock units that were anti-dilutive and not included in diluted earnings per share calculations were 16,287,263 and 9,182,150, respectively. |
Other Comprehensive Income (Loss) |
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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, 2018 and 2017 were as follows:
(1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 10, Retirement Plans and Other Retiree Benefits for additional details. (2) These (gains) losses are reclassified into Cost of sales. See Note 14, Fair Value Measurements and Financial Instruments for additional details. There were no tax impacts on Other comprehensive income (loss) attributable to Noncontrolling interests. |
Retirement Plans and Other Retiree Benefits |
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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, 2018 and 2017 were as follows:
For the three months ended March 31, 2018 and 2017, the Company made voluntary contributions to its U.S. postretirement plans of $0 and $57, respectively. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the TCJA was enacted, which, among other things, lowered the U.S. corporate income tax rate to 21% from 35% and established a modified territorial system requiring a mandatory deemed repatriation tax on undistributed earnings of foreign subsidiaries. Beginning in 2018, the TCJA also requires a minimum tax on certain earnings generated by foreign subsidiaries while providing for tax-free repatriation of such earnings through a 100% dividends-received deduction. The Company’s effective income tax rate in 2017 included a provisional charge of $275, recorded in the fourth quarter of 2017, related to the TCJA using information and estimates available as of February 15, 2018, the date on which the Company filed its Annual Report on Form 10-K for the year ended December 31, 2017. Given the significant complexity of the TCJA, recent and anticipated further guidance from the U.S. Treasury about implementing the TCJA and the potential for additional guidance from the SEC or the FASB related to the TCJA or additional information becoming available, the Company’s provisional charge may be adjusted during 2018 and is expected to be finalized no later than the fourth quarter of 2018. The aforementioned guidance and additional information regarding the TCJA may also impact the Company’s 2018 effective income tax rate, exclusive of any adjustment to the provisional charge. As a result of the early adoption of ASU 2018-02, the Company reclassified $163 of stranded tax effects in Accumulated other comprehensive income (loss) resulting from the TCJA to Retained earnings in the current period. See Note 3, Recent Accounting Pronouncements and Updated Accounting Policies for additional information. The Company has taken a tax position in a foreign jurisdiction since 2002 that has been challenged by the local tax authorities. In May 2015, the Company became aware of several rulings by the Supreme Court in this foreign jurisdiction disallowing certain tax deductions, which had the effect of reversing prior decisions. The Company had taken deductions in prior years similar to those disallowed by such court and, as a result, as required, reassessed its tax position and increased its unrecognized tax benefits in 2015. In 2016, the Supreme Court in the foreign jurisdiction decided the matter in the Company’s favor for the years 2002 through 2005. Also in 2016, the Administrative Court in the foreign jurisdiction decided the matter in the Company’s favor for the years 2008 through 2011 by acknowledging the Supreme Court’s ruling for the years 2002 through 2005, which eliminated the possibility of future appeals. As a result, the Company recorded a tax benefit of $30, including interest, in 2016. In March 2018, the lower courts ruled in the Company’s favor for the years 2006, 2007 and 2012 through 2014. Although the lower courts ruled in the Company’s favor, it is possible that the rulings will be appealed to the Supreme Court. If such appeals are resolved in the Company’s favor, the Company will record additional tax benefits of approximately $15 at current exchange rates. |
Contingencies |
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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, privacy, 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 $250 (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 $165. 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. Appeals are currently pending at the administrative level. In the event the Company is ultimately unsuccessful in its administrative appeals, further appeals are available within the Brazilian federal courts. In September 2015, the Company lost one of its appeals at the administrative level and filed a lawsuit in Brazilian federal court. In February 2017, the Company lost an additional administrative appeal and filed a lawsuit in 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 $74, 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 Matters Certain of the Company’s subsidiaries have historically been subject to investigations, 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 of pending competition law matters as of March 31, 2018 is set forth below.
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, 2018, there were 199 individual cases pending against the Company in state and federal courts throughout the United States, as compared to 193 cases as of December 31, 2017. During the three months ended March 31, 2018, 25 new cases were filed and 19 cases were resolved by voluntary dismissal, summary judgment granted in the Company’s favor or settlement. The value of settlements was not material, either individually or in the aggregate, to the Company’s results of operations for the quarter ended March 31, 2018. The Company believes that a significant portion of its costs incurred in defending and resolving these claims will be covered by insurance policies issued by several primary and excess insurance carriers, subject to deductibles, exclusions, retentions and policy limits. 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. Since the amount of any potential losses from these cases currently cannot be reasonably estimated, the range of reasonably possible losses in excess of accrued liabilities disclosed above does not include any amount relating to these cases. N8 The Company was a defendant in a lawsuit that was brought in Utah federal court by N8 Medical, Inc. (“N8 Medical”), Brigham Young University (“BYU”) and N8 Pharmaceuticals, Inc. (“N8 Pharma”). The complaint, originally filed in November 2013, alleged breach of contract and other torts arising out of the Company’s evaluation of a technology owned by BYU and licensed, at various times, to Ceragenix Pharmaceuticals, Inc., now in bankruptcy, N8 Medical and N8 Pharma. In 2016, the Company resolved the claims brought by BYU and N8 Medical. These claims were each resolved in an amount that is not material to the Company’s results of operations. In the first quarter of 2017, the trial court dismissed the claims of N8 Pharma and, in the third quarter of 2017, N8 Pharma appealed the decision. In March 2018, the appellate court upheld the trial court’s dismissal of N8 Pharma’s claim. ERISA Matter In June 2016, a putative class action claiming that residual annuity payments made to certain participants in the Colgate-Palmolive Company Employees’ Retirement Income Plan (the “Plan”) did not comply with the Employee Retirement Income Security Act was filed against the Plan, the Company and certain individuals in the United States District Court for the Southern District of New York. This action has been certified as a class action. The relief sought includes recalculation of benefits, pre- and post-judgment interest and attorneys’ fees. The Company is contesting this action vigorously. Since the amount of any potential loss from this case currently cannot be reasonably estimated, the range of reasonably possible losses in excess of accrued liabilities disclosed above does not include any amount relating to the case. |
Segment Information |
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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. Effective January 1, 2018, as required, the Company adopted ASU No. 2017-07, “Compensation–Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”), on a retrospective basis. To conform to the current year’s presentation, for the three months ended March 31, 2017, the Company reclassified $27 of non-service related components of pension and other postretirement costs, which was previously deducted from Operating profit, to a new line item, “Non-service related postretirement costs,” which is below Operating profit. The impact of the reclassification from Operating profit by segment is as follows: North America $14, Latin America $2, Europe $2, Asia Pacific $0, Africa/Eurasia $1, Pet Nutrition $6 and Corporate $2. The reclassification had no effect on Net income attributable to Colgate-Palmolive Company, Earnings per common share or Cash flow. 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, 2017. Intercompany sales have been eliminated. Corporate operations include costs related to stock options and restricted stock units, research and development costs, Corporate overhead costs, restructuring and related implementation charges 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 was as follows:
Approximately 75% of the Company’s Net sales are generated from markets outside the U.S., with approximately 50% 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:
Operating profit by segment was as follows:
For the three months ended March 31, 2018, and 2017, Corporate Operating profit (loss) included charges of $24 and $45, respectively, resulting from the Global Growth and Efficiency Program. For further information regarding the Global Growth and Efficiency Program, refer to Note 5, Restructuring and Related Implementation Charges. |
Fair Value Measurements and Financial Instruments |
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Financial Instruments and Fair Value Measurements [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. Hedge ineffectiveness, if any, is not material for any period presented. The Company’s 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). 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, 2018 and December 31, 2017:
The carrying amount of cash, cash equivalents, accounts receivable and short-term debt approximated fair value as of March 31, 2018 and December 31, 2017. The estimated fair value of the Company’s long-term debt, including the current portion, as of March 31, 2018 and December 31, 2017, was $6,659 and $6,799, respectively, and the related carrying value was $6,550 and $6,566, 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). Fair Value Hedges The Company has designated all interest rate swap contracts and certain foreign currency forward and option contracts as fair value hedges, for which the gain or loss on the derivative and the offsetting gain or loss on the hedged item are recognized in current earnings. The impact of foreign currency contracts is primarily recognized in Selling, general and administrative expenses and the impact of interest rate swap contracts is recognized in Interest (income) expense, net. Activity related to fair value hedges recorded during the three months ended March 31, 2018 and 2017 was as follows:
Cash Flow Hedges All of the Company’s commodity contracts and certain foreign currency forward contracts have been designated as cash flow hedges, for which the effective portion of the gain or loss is reported as a component of Other comprehensive income (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Activity related to cash flow hedges recorded during the three months ended March 31, 2018 and 2017 was as follows:
The net gain (loss) recognized in OCI for both foreign currency contracts and commodity contracts is generally expected to be recognized in Cost of sales within the next twelve months. Net Investment Hedges The Company has designated certain foreign currency forward and option contracts and certain foreign currency-denominated debt as net investment hedges, for which the gain or loss on the instrument is reported as a component of Cumulative translation adjustments within OCI, along with the offsetting gain or loss on the hedged items. Activity related to net investment hedges recorded during the three months ended March 31, 2018 and 2017 was as follows:
Other Financial Instruments Other financial instruments are classified as Other current assets or Other assets. Other financial instruments classified as Other current assets include marketable securities consisting of bank deposits of $51 with original maturities greater than 90 days carried at fair value (Level 1 valuation) and the current portion of bonds issued by the Argentinian government in the amount of $4 classified as held-to-maturity and carried at amortized cost. Through its subsidiary in Argentina, the Company has invested in U.S. dollar-linked, devaluation-protected bonds and Argentinian peso-denominated bonds issued by the Argentinian government. As of March 31, 2018, the amortized cost was $4 and their approximate fair value was $4 (Level 2 valuation). |
Use of Estimates (Policies) |
3 Months Ended |
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Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
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. |
Recent Accounting Pronouncements | In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”), which permits the reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act (the “TCJA” or “U.S. tax reform”) from Accumulated other comprehensive income (loss) to Retained earnings. This new guidance is effective for the Company beginning on January 1, 2019, with early adoption permitted, and must be applied either in the period of adoption or retrospectively to periods in which the effects of the TCJA are recognized. The Company elected to adopt this new guidance early, beginning on January 1, 2018, and reclassified $163 in the current period. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” amending the eligibility criteria for hedged items and transactions to expand an entity’s ability to hedge nonfinancial and financial risk components. The new guidance eliminates the requirement to separately measure and present hedge ineffectiveness and aligns the presentation of hedge gains and losses with the underlying hedge item. The new guidance also simplifies the hedge documentation and hedge effectiveness assessment requirements. The new guidance is effective for the Company beginning on January 1, 2019, with early adoption permitted. The amended presentation and disclosure requirements must be adopted on a prospective basis, while any amendments to cash flow and net investment hedge relationships that exist on the date of adoption must be applied on a “modified retrospective” basis, meaning a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the year of adoption. While the Company is currently assessing the impact of the new standard, this new guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting,” clarifying when a change to the terms or conditions of a stock-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. The new guidance was effective for the Company on a prospective basis beginning on January 1, 2018 and did not impact the Company’s Consolidated Financial Statements as it is not the Company’s practice to change either the terms or conditions of stock-based payment awards once they are granted. In March 2017, the FASB issued ASU No. 2017-07, “Compensation–Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” changing the presentation of the net periodic benefit cost on the Statement of Income and limiting the amount of net periodic benefit cost eligible for capitalization to assets. The new guidance permits only the service cost component of net periodic benefit cost to be eligible for capitalization. The new guidance also requires entities to present the service cost component of net periodic benefit cost together with compensation costs arising from services rendered by employees during the period. The non-service related components of net periodic benefit cost, which include interest, expected return on assets, amortization of prior service costs and actuarial gains and losses, are required to be presented outside of Operating profit. The line item or items used to present the other components of net periodic benefit cost must be disclosed in the Notes to the Consolidated Financial Statements, if not separately described on the Statement of Income. The new presentation requirement is required to be adopted on a “full retrospective” basis, meaning the standard is applied to all of the periods presented in the financial statements, while the limitation on capitalization can only be adopted on a prospective basis. Effective January 1, 2018, as required, the Company adopted this standard on a retrospective basis. As permitted by the new guidance, the Company used the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the basis for applying the retrospective presentation requirements. As a result, for all periods presented, only the service related component of pension and other postretirement benefit costs is included in Operating profit. The non-service related components are included in a new line item, “Non-service related postretirement costs,” which is below Operating profit. For the quarter ended March 31, 2017, the Company reclassified $26 and $1 of non-service related components of pension and other postretirement benefit costs from Selling, general and administrative expenses and Other (income) expense, net, respectively, to Non-service related postretirement costs. Adoption of this standard had no effect on Net income attributable to Colgate-Palmolive Company, Earnings per common share or Cash flow. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” eliminating the requirement to calculate the implied fair value, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard is effective for the Company on a prospective basis beginning on January 1, 2020, with early adoption permitted. This new guidance is not expected to have an impact on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which provides additional guidance on evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The guidance requires an entity to evaluate if substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the new guidance would define this as an asset acquisition; otherwise, the entity then evaluates whether the asset meets the requirement that a business include, at a minimum, an input and substantive process that together significantly contribute to the ability to create outputs. The guidance was effective for the Company on a prospective basis beginning on January 1, 2018. This new guidance did not have an impact on the Company’s Consolidated Financial Statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which clarifies how certain cash receipts and payments are to be presented in the statement of cash flows. The guidance was effective for the Company on January 1, 2018. This new guidance did not have an impact on the Company’s Consolidated Financial Statements. In February 2016, the FASB issued its final standard on lease accounting, ASU No. 2016-02, “Leases (Topic 842),” which supersedes Topic 840, “Leases.” The new accounting standard requires the recognition of right-of-use assets and lease liabilities for all long-term leases, including operating leases, on the balance sheet. The new standard also provides additional guidance on the measurement of the right-of-use assets and lease liabilities and will require enhanced disclosures about the Company’s leasing arrangements. Under current accounting standards, substantially all of the Company’s leases are considered operating leases and, as such, are not recognized on the Consolidated Balance Sheet. This new standard is effective for the Company beginning on January 1, 2019, with early adoption permitted. The standard requires a “modified retrospective” adoption, meaning the standard is applied to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently assessing the impact of the new standard on its Consolidated Financial Statements. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments–Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The updated guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The amendment to the standard was effective for the Company beginning on January 1, 2018 and did not have an impact on the Company’s Consolidated Financial Statements. In May 2014, the FASB and the International Accounting Standards Board issued their final converged standard on revenue recognition. The standard, issued as ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” by the FASB, provides a comprehensive revenue recognition model for all contracts with customers and supersedes current revenue recognition guidance. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to its customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The new standard also includes enhanced disclosures. During 2016, the FASB issued several accounting updates (ASU No. 2016-08, 2016-10 and 2016-12) to clarify implementation guidance and correct unintended application of the guidance. The standard allows for either full retrospective adoption or modified retrospective adoption. The Company adopted the new standard on January 1, 2018, on a “modified retrospective” basis, which did not have a material impact on the Company’s Consolidated Financial Statements. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the 2018 opening balance of retained earnings. Results for periods beginning on or after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the prior accounting guidance under Topic 605, “Revenue Recognition.” The new accounting standard changes only the timing of when certain of the Company’s sales are recorded and does not change the amount at which sales are recorded. The application of the new accounting standard did not have a material impact on the Company’s Consolidated Financial Statements for the period ended March 31, 2018 and is not expected to have a material impact on the Company’s Consolidated Financial Statements in future periods. Updated Accounting Policies Revenue Recognition Accounting Policy The Company’s revenue contracts represent a single performance obligation to sell its products to trade customers. Sales are recorded at the time control of the products is transferred to trade customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the products. Control is the ability of trade customers to direct the “use of” and “obtain” the benefit from our products. In evaluating the timing of the transfer of control of products to trade customers, the Company considers several control indicators, including significant risks and rewards of products, the Company’s right to payment and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to trade customers. Net sales reflect the transaction prices for contracts, which include units shipped at selling list prices reduced by variable consideration. Variable consideration includes expected sales returns and the cost of current and continuing promotional programs. Current promotional programs primarily include product listing allowances and co-operative advertising arrangements. Continuing promotional programs are predominantly consumer coupons and volume-based sales incentive arrangements. The cost of promotional programs is estimated using the expected value method considering all reasonably available information, including the Company’s historical experience and its current expectations, and is reflected in the transaction price when sales are recorded. Adjustments to the cost of promotional programs in subsequent periods are generally not material, as the Company’s promotional programs are typically of short duration, thereby reducing the uncertainty inherent in such estimates. Sales returns are generally accepted at the Company’s discretion and are not material to the Company’s Consolidated Financial Statements. The Company’s contracts with trade customers do not have significant financing components or non-cash consideration and the Company does not have unbilled revenue or significant amounts of prepayments from customers. The Company records Net sales excluding taxes collected on its sales to its trade customers. Shipping and handling activities are accounted for as contract fulfillment costs and classified as Selling, general and administrative expenses. |
Acquisitions and Divestitures (Tables) |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Total purchase price consideration of $730 has been allocated on a preliminary basis to the net assets acquired based on their respective estimated fair values at January 2018, as follows:
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Restructuring and Related Implementation Charges (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Costs | For the three months ended March 31, 2018 and 2017, restructuring and related implementation charges are reflected in the Condensed Consolidated Statements of Income as follows:
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Schedule of Percent of Total Restructuring Charges Related To Segment for the period | Total charges incurred for the Global Growth and Efficiency Program relate to initiatives undertaken by the following reportable operating segments:
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Schedule of Restructuring and Related Costs Incurred to Date | Since the inception of the Global Growth and Efficiency Program in the fourth quarter of 2012, the Company has incurred cumulative pretax charges of $1,589 ($1,173 aftertax) in connection with the implementation of various projects as follows:
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Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the activity for the restructuring and related implementation charges discussed above and the related accruals:
|
Inventories (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory, Net, Items Net of Reserve Alternative [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories By Major Class | Inventories by major class are as follows:
|
Shareholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Changes in the components of Shareholders’ Equity for the three months ended March 31, 2018 are as follows:
(1) As a result of the early adoption of ASU 2018-02, the Company reclassified the stranded tax effects in Accumulated other comprehensive income (loss) resulting from the TCJA to Retained earnings. See Note 3, Recent Accounting Pronouncements and Updated Accounting Policies for additional information. |
Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | For the three months ended March 31, 2018 and 2017, earnings per share were as follows:
|
Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2018 and 2017 were as follows:
(1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 10, Retirement Plans and Other Retiree Benefits for additional details. (2) These (gains) losses are reclassified into Cost of sales. See Note 14, Fair Value Measurements and Financial Instruments for additional details. |
Retirement Plans and Other Retiree Benefits (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of Net Periodic Benefit Cost | Components of Net periodic benefit cost for the three months ended March 31, 2018 and 2017 were as follows:
|
Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Sales and Operating Profit by Segment | 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:
Operating profit by segment was as follows:
Net sales by segment was as follows:
|
Fair Value Measurements and Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments and Fair Value Measurements [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, 2018 and December 31, 2017:
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Activity related to fair value hedges | Activity related to fair value hedges recorded during the three months ended March 31, 2018 and 2017 was as follows:
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Activity related to cash flow hedges | Activity related to cash flow hedges recorded during the three months ended March 31, 2018 and 2017 was as follows:
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Activity related to net investment hedges | Activity related to net investment hedges recorded during the three months ended March 31, 2018 and 2017 was as follows:
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Recent Accounting Pronouncements and Updated Accounting Policies (Details) - USD ($) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Selling, general and administrative expenses | $ 1,392 | $ 1,336 | [1] | ||
Other (income) expense, net | 33 | 21 | [1] | ||
Accounting Standards Update 2018-02 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Tax reform, reclassification from AOCI to retained earnings, tax effect | $ 163 | ||||
Reclassifying Adjustment | Accounting Standards Update 2017-07 | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Selling, general and administrative expenses | 26 | ||||
Other (income) expense, net | $ 1 | ||||
|
Acquisitions and Divestitures - Narrative (Details) - USD ($) $ in Millions |
1 Months Ended | ||
---|---|---|---|
Jan. 31, 2018 |
Mar. 31, 2018 |
Dec. 31, 2017 |
|
Business Acquisition [Line Items] | |||
Goodwill | $ 2,572 | $ 2,218 | |
PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Payments to acquire business | $ 730 | ||
Other intangible assets | $ 438 | ||
Useful life | 25 years | ||
Goodwill | $ 332 | ||
North America | PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 332 | ||
Percent of goodwill deductible for tax purposes | 40.00% | ||
Trademarks | PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Other intangible assets | $ 292 | ||
Customer Relationships | PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Other intangible assets | $ 146 | ||
Minimum | PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Useful life | 12 years | ||
Maximum | PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Useful life | 13 years |
Acquisitions and Divestitures - Schedule of Recognized Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Jan. 31, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 2,572 | $ 2,218 | |
PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Inventories | $ 7 | ||
Other current assets | 9 | ||
Other intangible assets | 438 | ||
Goodwill | 332 | ||
Other current liabilities | (6) | ||
Deferred income taxes | (50) | ||
Fair value of net assets acquired | $ 730 |
Restructuring and Related Implementation Charges - Narrative (Details) - Global Growth and Efficiency Program $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018
USD ($)
position
|
Mar. 31, 2017
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total charges resulting in cash expenditure | 80.00% | |
Total Global Growth and Efficiency Program charges, pretax | $ 28 | $ 46 |
Pet Nutrition | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 10.00% | |
Corporate | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 40.00% | |
North America | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 15.00% | |
Europe | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 20.00% | |
Latin America | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 5.00% | |
Asia Pacific | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 5.00% | |
Africa/Eurasia | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 5.00% | |
Employee-Related Costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated percent of total cumulative pretax charges of implementing restructuring program by category | 50.00% | |
Total Global Growth and Efficiency Program charges, pretax | $ 18 | |
Incremental Depreciation And Asset Impairment | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated percent of total cumulative pretax charges of implementing restructuring program by category | 10.00% | |
Charges Resulting Directly From Exit Activities | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated percent of total cumulative pretax charges of implementing restructuring program by category | 20.00% | |
Implementation Of New Strategies | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated percent of total cumulative pretax charges of implementing restructuring program by category | 20.00% | |
Third party Incremental Cost | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | $ 8 | |
Contract Termination | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | 1 | |
Minimum | Expected Completion Date 2019 | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring program expected cost before tax | 1,730 | |
Restructuring program expected cost after tax | 1,280 | |
Restructuring program expected cost, current fiscal year, before tax | 100 | |
Restructuring program expected cost, current fiscal year, after tax | $ 75 | |
Restructuring and related cost, expected number of positions eliminated (in positions) | position | 3,800 | |
Maximum | Expected Completion Date 2019 | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring program expected cost before tax | $ 1,885 | |
Restructuring program expected cost after tax | 1,380 | |
Restructuring program expected cost, current fiscal year, before tax | 175 | |
Restructuring program expected cost, current fiscal year, after tax | $ 125 | |
Restructuring and related cost, expected number of positions eliminated (in positions) | position | 4,400 |
Restructuring and Related Implementation Charges - Summary of Restructuring and Related Costs (Details) - Global Growth and Efficiency Program - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | $ 28 | $ 46 |
Total Global Growth and Efficiency Program charges, aftertax | 20 | 31 |
Cost of sales | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | 6 | 14 |
Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | 5 | 21 |
Other (income) expense, net | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | 13 | 10 |
Non-service related postretirement costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | $ 4 | $ 1 |
Restructuring and Related Implementation Charges - Restructuring Charges Incurred, by Segment (Details) - Global Growth and Efficiency Program |
3 Months Ended | 66 Months Ended | |
---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Mar. 31, 2018 |
|
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 100.00% | 100.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 100.00% | ||
Pet Nutrition | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 19.00% | 7.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 7.00% | ||
Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 10.00% | 42.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 40.00% | ||
North America | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 37.00% | 37.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 19.00% | ||
Latin America | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 12.00% | 6.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 4.00% | ||
Europe | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 2.00% | 2.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 21.00% | ||
Asia Pacific | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 18.00% | 2.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 3.00% | ||
Africa/Eurasia | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 2.00% | 4.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 6.00% |
Restructuring and Related Implementation Charges - Summary of Restructuring Charges, Cumulative to Date (Details) - Global Growth and Efficiency Program $ in Millions |
Mar. 31, 2018
USD ($)
|
---|---|
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | $ 1,589 |
Aftertax charges related to the Restructuring Program to date | 1,173 |
Employee-Related Costs | |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | 646 |
Incremental Depreciation | |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | 91 |
Asset Impairments | |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | 36 |
Other | |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | $ 816 |
Restructuring and Related Implementation Charges - Restructuring Activity and Related Accruals (Details) - Global Growth and Efficiency Program - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | $ 234 | |
Charges | 28 | $ 46 |
Cash payments | (55) | |
Charges against assets | (5) | |
Foreign exchange | 2 | |
Ending Balance | 204 | |
Employee-Related Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 127 | |
Charges | 18 | |
Cash payments | (39) | |
Charges against assets | (4) | |
Foreign exchange | 2 | |
Ending Balance | 104 | |
Incremental Depreciation | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Charges | 1 | |
Cash payments | 0 | |
Charges against assets | (1) | |
Foreign exchange | 0 | |
Ending Balance | 0 | |
Asset Impairments | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Charges | 0 | |
Cash payments | 0 | |
Charges against assets | 0 | |
Foreign exchange | 0 | |
Ending Balance | 0 | |
Other | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 107 | |
Charges | 9 | |
Cash payments | (16) | |
Charges against assets | 0 | |
Foreign exchange | 0 | |
Ending Balance | $ 100 |
Inventories (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventory, Net, Items Net of Reserve Alternative [Abstract] | ||
Raw materials and supplies | $ 258 | $ 267 |
Work-in-process | 49 | 42 |
Finished goods | 1,005 | 912 |
Total Inventories | $ 1,312 | $ 1,221 |
Shareholders' Equity (Details) - USD ($) $ in Millions |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
Dec. 31, 2017 |
||||
Changes in Shareholders' Equity [Roll Forward] | ||||||
Beginning balance | $ 243 | |||||
Net income | 678 | $ 611 | [1] | |||
Other comprehensive income (loss), net of tax | 121 | 135 | ||||
Ending balance | 101 | |||||
Accumulated other comprehensive income (loss), cumulative translation losses | 2,832 | $ 2,927 | ||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefits costs | 1,062 | $ 923 | ||||
Common Stock | ||||||
Changes in Shareholders' Equity [Roll Forward] | ||||||
Beginning balance | 1,466 | |||||
Ending balance | 1,466 | |||||
Additional Paid-in Capital | ||||||
Changes in Shareholders' Equity [Roll Forward] | ||||||
Beginning balance | 1,984 | |||||
Stock-based compensation expense | 28 | |||||
Shares issued for stock options | 48 | |||||
Shares issued for restricted stock units | (12) | |||||
Other | (1) | |||||
Ending balance | 2,047 | |||||
Unearned Compensation | ||||||
Changes in Shareholders' Equity [Roll Forward] | ||||||
Beginning balance | (5) | |||||
Other | 3 | |||||
Ending balance | (2) | |||||
Treasury Stock | ||||||
Changes in Shareholders' Equity [Roll Forward] | ||||||
Beginning balance | (20,181) | |||||
Shares issued for stock options | 77 | |||||
Shares issued for restricted stock units | 12 | |||||
Treasury stock acquired | (351) | |||||
Other | 2 | |||||
Ending balance | (20,441) | |||||
Retained Earnings | ||||||
Changes in Shareholders' Equity [Roll Forward] | ||||||
Beginning balance | 20,531 | |||||
Net income | 634 | |||||
Dividends | (718) | |||||
Other | 134 | |||||
Ending balance | 20,581 | |||||
Accumulated Other Comprehensive Income (Loss) | ||||||
Changes in Shareholders' Equity [Roll Forward] | ||||||
Beginning balance | (3,855) | |||||
Other comprehensive income (loss), net of tax | 118 | $ 128 | ||||
Other | (163) | |||||
Ending balance | (3,900) | |||||
Noncontrolling Interests | ||||||
Changes in Shareholders' Equity [Roll Forward] | ||||||
Beginning balance | 303 | |||||
Net income | 44 | |||||
Other comprehensive income (loss), net of tax | 3 | |||||
Ending balance | $ 350 | |||||
|
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
||||
Net income attributable to Colgate-Palmolive Company | |||||
Basic EPS | $ 634 | $ 570 | |||
Diluted EPS | $ 634 | $ 570 | |||
Shares | |||||
Basic EPS (in shares) | 875,400,000 | 884,700,000 | |||
Stock options and restricted stock units (in shares) | 4,500,000 | 6,300,000 | |||
Diluted EPS (in shares) | 879,900,000 | 891,000,000 | |||
Per Share | |||||
Basic EPS (in dollars per share) | $ 0.72 | $ 0.64 | [1] | ||
Diluted EPS (in dollars per share) | $ 0.72 | $ 0.64 | [1] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 16,287,263 | 9,182,150 | |||
|
Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total Other comprehensive income (loss), net of tax | $ 121 | $ 135 |
Cumulative translation adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss), Pretax | 96 | 103 |
Total Other comprehensive income (loss), net of tax | 105 | 125 |
Retirement plans and other retiree benefits adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss), before reclassifications, Pretax | 0 | 0 |
Reclassification from AOCI, Pretax | 18 | 18 |
Other comprehensive income (loss), Pretax | 18 | 18 |
Other comprehensive income (loss), before reclassifications, Net of Tax | 0 | 0 |
Reclassification from AOCI, Net of Tax | 14 | 13 |
Total Other comprehensive income (loss), net of tax | 14 | 13 |
Cash flow hedges: | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss), before reclassifications, Pretax | (8) | (13) |
Reclassification from AOCI, Pretax | 6 | (3) |
Other comprehensive income (loss), Pretax | (2) | (16) |
Other comprehensive income (loss), before reclassifications, Net of Tax | (6) | (8) |
Reclassification from AOCI, Net of Tax | 5 | (2) |
Total Other comprehensive income (loss), net of tax | (1) | (10) |
Total Other comprehensive income (loss) | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss), Pretax | 112 | 105 |
Total Other comprehensive income (loss), net of tax | $ 118 | $ 128 |
Retirement Plans and Other Retiree Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Other Retiree Benefits | ||
Components of net periodic benefit cost | ||
Service cost | $ 4 | $ 4 |
Interest cost | 10 | 11 |
Expected return on plan assets | 0 | 0 |
Amortization of transition and prior service costs (credits) | 0 | 0 |
Amortization of actuarial loss (gain) | 4 | 4 |
Net periodic benefit cost | 18 | 19 |
United States | Pension Benefits | ||
Components of net periodic benefit cost | ||
Service cost | 0 | 0 |
Interest cost | 21 | 24 |
Expected return on plan assets | (29) | (27) |
Amortization of transition and prior service costs (credits) | 0 | 0 |
Amortization of actuarial loss (gain) | 12 | 12 |
Net periodic benefit cost | 4 | 9 |
Voluntary benefit plan contribution | 0 | 57 |
International | Pension Benefits | ||
Components of net periodic benefit cost | ||
Service cost | 4 | 4 |
Interest cost | 6 | 5 |
Expected return on plan assets | (6) | (5) |
Amortization of transition and prior service costs (credits) | 0 | 0 |
Amortization of actuarial loss (gain) | 2 | 2 |
Net periodic benefit cost | $ 6 | $ 6 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2018 |
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Income Tax Contingency [Line Items] | |||
Tax reform, provisional charge | $ 275 | ||
Tax benefit from foreign Supreme Court decision | $ 30 | ||
Tax benefit from prior year tax positions currently being challenged | $ 15 | ||
Accounting Standards Update 2018-02 | |||
Income Tax Contingency [Line Items] | |||
Tax reform, reclassification from AOCI to retained earnings, tax effect | $ 163 |
Contingencies (Details) $ in Millions |
1 Months Ended | 3 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2015
appeal
|
Dec. 31, 2014
USD ($)
company
|
Mar. 31, 2018
USD ($)
case
country_and_territory
|
Dec. 31, 2017
case
|
Jul. 21, 2017
USD ($)
|
|
Loss Contingencies [Line Items] | |||||
Minimum number of countries and territories serving consumers (more than) (in countries and territories) | country_and_territory | 200 | ||||
Brazilian internal revenue authority, matter 1 | $ 165 | ||||
Loss contingency, number of appeals lost (in appeals) | appeal | 1 | ||||
Brazilian internal revenue authority, matter 2 | $ 74 | ||||
Number of consumer goods companies | company | 13 | ||||
Fine imposed french competition authority | $ 57 | ||||
Fine imposed french competition authority - as a result of Sanex acquisition | $ 25 | ||||
Fine imposed by greek competition authority | $ 11 | ||||
Loss contingency, pending claims, number (in cases) | case | 199 | 193 | |||
Loss contingency, new claims filed, number (in cases) | case | 25 | ||||
Loss contingency, claims dismissed or settled, number (in cases) | case | 19 | ||||
Minimum | |||||
Loss Contingencies [Line Items] | |||||
Range of reasonably possible losses | $ 0 | ||||
Maximum | |||||
Loss Contingencies [Line Items] | |||||
Range of reasonably possible losses | $ 250 |
Segment Information - Narrative (Details) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2018
USD ($)
segment
|
Mar. 31, 2017
USD ($)
|
||||
Segment Reporting Information [Line Items] | |||||
Number of product segments (in segments) | segment | 2 | ||||
Number of operating segments (in segments) | segment | 5 | ||||
Non-service related postretirement costs | $ 24 | $ 27 | [1] | ||
Operating Segments | Pet Nutrition | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 6 | ||||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 2 | ||||
North America | Operating Segments | Oral, Personal and Home Care | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 14 | ||||
Latin America | Operating Segments | Oral, Personal and Home Care | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 2 | ||||
Europe | Operating Segments | Oral, Personal and Home Care | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 2 | ||||
Asia Pacific | Operating Segments | Oral, Personal and Home Care | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 0 | ||||
Africa/Eurasia | Operating Segments | Oral, Personal and Home Care | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 1 | ||||
Sales Revenue, Net | |||||
Segment Reporting Information [Line Items] | |||||
Percentage of consolidated Net sales represented by sales outside US | 75.00% | ||||
Percentage of consolidated Net sales coming from emerging markets | 50.00% | ||||
Global Growth and Efficiency Program | |||||
Segment Reporting Information [Line Items] | |||||
Total Global Growth and Efficiency Program charges, pretax | $ 28 | 46 | |||
Global Growth and Efficiency Program | Corporate | Included in Operating profit (loss) | |||||
Segment Reporting Information [Line Items] | |||||
Total Global Growth and Efficiency Program charges, pretax | $ 24 | $ 45 | |||
|
Segment Information - Schedule of Segment Information (Details) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2018
USD ($)
segment
|
Mar. 31, 2017
USD ($)
|
||||
Segment Reporting Information [Line Items] | |||||
Number of product segments (in segments) | segment | 2 | ||||
Number of operating segments (in segments) | segment | 5 | ||||
Number of reportable segments (in segments) | segment | 5 | ||||
Non-service related postretirement costs | $ 24 | $ 27 | [1] | ||
Total Net sales | 4,002 | 3,762 | |||
Total Operating profit | $ 983 | 912 | [1] | ||
Sales Revenue, Net | |||||
Segment Reporting Information [Line Items] | |||||
Percentage of consolidated Net sales represented by sales outside US | 75.00% | ||||
Percentage of consolidated Net sales coming from emerging markets | 50.00% | ||||
Operating Segments | Oral, Personal and Home Care | |||||
Segment Reporting Information [Line Items] | |||||
Total Net sales | $ 3,418 | 3,208 | |||
Total Operating profit | 968 | 925 | |||
Operating Segments | Oral, Personal and Home Care | North America | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 14 | ||||
Total Net sales | 827 | 760 | |||
Total Operating profit | 257 | 247 | |||
Operating Segments | Oral, Personal and Home Care | Latin America | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 2 | ||||
Total Net sales | 929 | 924 | |||
Total Operating profit | 273 | 271 | |||
Operating Segments | Oral, Personal and Home Care | Europe | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 2 | ||||
Total Net sales | 648 | 558 | |||
Total Operating profit | 162 | 142 | |||
Operating Segments | Oral, Personal and Home Care | Asia Pacific | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 0 | ||||
Total Net sales | 759 | 720 | |||
Total Operating profit | 226 | 219 | |||
Operating Segments | Oral, Personal and Home Care | Africa/Eurasia | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 1 | ||||
Total Net sales | 255 | 246 | |||
Total Operating profit | 50 | 46 | |||
Operating Segments | Pet Nutrition | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 6 | ||||
Total Net sales | 584 | 554 | |||
Total Operating profit | 164 | 163 | |||
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Non-service related postretirement costs | 2 | ||||
Total Operating profit | $ (149) | $ (176) | |||
Product Concentration Risk | Sales Revenue, Net | |||||
Segment Reporting Information [Line Items] | |||||
Percent of net sales | 100.00% | 100.00% | |||
Product Concentration Risk | Oral Care | Sales Revenue, Net | |||||
Segment Reporting Information [Line Items] | |||||
Percent of net sales | 49.00% | 49.00% | |||
Product Concentration Risk | Personal Care | Sales Revenue, Net | |||||
Segment Reporting Information [Line Items] | |||||
Percent of net sales | 19.00% | 18.00% | |||
Product Concentration Risk | Home Care | Sales Revenue, Net | |||||
Segment Reporting Information [Line Items] | |||||
Percent of net sales | 17.00% | 18.00% | |||
Product Concentration Risk | Pet Nutrition | Sales Revenue, Net | |||||
Segment Reporting Information [Line Items] | |||||
Percent of net sales | 15.00% | 15.00% | |||
|
Fair Value Measurements and Financial Instruments - Fair Value of Derivative Instruments and Other Financial Instruments (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Designated derivative instruments | ||
Derivative assets, designated | $ 5 | $ 25 |
Derivative liabilities, designated | 97 | 73 |
Other financial instruments | ||
Total other financial instruments | 51 | 14 |
Other current assets | ||
Other financial instruments | ||
Marketable securities | 51 | 14 |
Other current assets | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative assets, designated | 0 | 0 |
Other current assets | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative assets, designated | 5 | 25 |
Other current assets | Commodity contracts | ||
Designated derivative instruments | ||
Derivative assets, designated | 0 | 0 |
Other assets | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative assets, designated | 0 | 0 |
Other assets | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative assets, designated | 0 | 0 |
Other accruals | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 6 | 0 |
Other accruals | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 23 | 20 |
Other accruals | Commodity contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 0 | 0 |
Other liabilities | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 11 | 7 |
Other liabilities | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | $ 57 | $ 46 |
Fair Value Measurements and Financial Instruments - Carrying Value and Estimated Fair Value of Long-term Debt (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Carrying Value | ||
Debt Instrument [Line Items] | ||
Carrying value of long-term debt | $ 6,550 | $ 6,566 |
Fair Value, Inputs, Level 2 | ||
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt | $ 6,659 | $ 6,799 |
Fair Value Measurements and Financial Instruments - Schedule of Fair Value Hedges (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | $ 1,530 | $ 1,096 |
Activity related to fair value hedges [Abstract] | ||
Gain (loss) on derivatives | (23) | 0 |
Gain (loss) on hedged items | 23 | 0 |
Fair Value Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 530 | 246 |
Activity related to fair value hedges [Abstract] | ||
Gain (loss) on derivatives | (13) | 2 |
Gain (loss) on hedged items | 13 | (2) |
Fair Value Hedges | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 1,000 | 850 |
Activity related to fair value hedges [Abstract] | ||
Gain (loss) on derivatives | (10) | (2) |
Gain (loss) on hedged items | 10 | 2 |
Cash Flow Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 754 | 671 |
Activity related to cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | (8) | (13) |
Gain (loss) reclassified into Cost of sales | 6 | 3 |
Cash Flow Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 754 | 667 |
Activity related to cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | (8) | (13) |
Gain (loss) reclassified into Cost of sales | 6 | 3 |
Cash Flow Hedges | Commodity Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 0 | 4 |
Activity related to cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | 0 | 0 |
Gain (loss) reclassified into Cost of sales | 0 | 0 |
Net Investment Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 1,774 | 1,861 |
Activity related to net investment hedges [Abstract] | ||
Gain (loss) on instruments | (37) | (34) |
Gain (loss) on hedged items | 37 | 36 |
Net Investment Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 541 | 655 |
Activity related to net investment hedges [Abstract] | ||
Gain (loss) on instruments | (18) | (18) |
Gain (loss) on hedged items | 18 | 20 |
Net Investment Hedges | Foreign Currency Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 1,233 | 1,206 |
Activity related to net investment hedges [Abstract] | ||
Gain (loss) on instruments | (19) | (16) |
Gain (loss) on hedged items | $ 19 | $ 16 |
Fair Value Measurements and Financial Instruments - Other Financial Instruments (Details) - USD ($) $ in Millions |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Other current assets | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Marketable securities | $ 51 | $ 14 |
Other current assets | Bonds Issued By Argentinian Government | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Marketable securities | 4 | |
Assets | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Held-to-maturity securities | 4 | |
Fair Value, Inputs, Level 1 | Other current assets | Deposits | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Marketable securities | 51 | |
Fair Value, Inputs, Level 2 | Assets | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Held-to-maturity securities, fair value | $ 4 |
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