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 and nine months ended September 30, 2017, the Company reclassified $30 and $82, respectively, 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 for the three months ended September 30, 2017 is as follows: North America $15, Latin America $2, Europe $1, Asia Pacific $0, Africa/Eurasia $0, Pet Nutrition $6 and Corporate $6. The impact of the reclassification from Operating profit by segment for the nine months ended September 30, 2017 is as follows: North America $43, Latin America $5, Europe $4, Asia Pacific $1, Africa/Eurasia $1, Pet Nutrition $18 and Corporate $10. 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 were as follows:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net sales
Oral, Personal and Home Care
North America	$	858	$	795	$	2,509	$	2,319
Latin America	856		985		2,718		2,911
Europe	640		642		1,908		1,784
Asia Pacific	673		728		2,106		2,111
Africa/Eurasia	236		251		734		738
Total Oral, Personal and Home Care	3,263		3,401		9,975		9,863
Pet Nutrition	582		573		1,758		1,699
Total Net sales	$	3,845	$	3,974	$	11,733	$	11,562

Approximately 70% 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:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Net sales
Oral Care	47	%	48	%	47	%	48	%
Personal Care	20	%	20	%	20	%	19	%
Home Care	18	%	18	%	18	%	18	%
Pet Nutrition	15	%	14	%	15	%	15	%
Total Net sales	100	%	100	%	100	%	100	%

Operating profit by segment was as follows:



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2018			2017			2018			2017
Operating profit
Oral, Personal and Home Care
North America	$	259		$	264		$	780		$	766
Latin America	222			303			757			883
Europe	162			163			480			451
Asia Pacific	191			220			620			645
Africa/Eurasia	41			44			133			135
Total Oral, Personal and Home Care	875			994			2,770			2,880
Pet Nutrition	163			167			492			499
Corporate	(164		)	(204		)	(459		)	(632		)
Total Operating profit	$	874		$	957		$	2,803		$	2,747

For the three and nine months ended September 30, 2018, Corporate Operating profit (loss) included charges of $25 and $107, respectively, resulting from the Global Growth and Efficiency Program.

For the three and nine months ended September 30, 2017, Corporate Operating profit (loss) included charges of $47 and $233, 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.