QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from________ to________ . |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company |
Class | Shares Outstanding | Date | ||
Common stock, $1.00 par value | June 30, 2019 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||
Cost of sales | |||||||||||||||
Gross profit | |||||||||||||||
Selling, general and administrative expenses | |||||||||||||||
Other (income) expense, net | |||||||||||||||
Operating profit | |||||||||||||||
Non-service related postretirement costs | |||||||||||||||
Interest (income) expense, net | |||||||||||||||
Income before income taxes | |||||||||||||||
Provision for income taxes | |||||||||||||||
Net income including noncontrolling interests | |||||||||||||||
Less: Net income attributable to noncontrolling interests | |||||||||||||||
Net income attributable to Colgate-Palmolive Company | $ | $ | $ | $ | |||||||||||
Earnings per common share, basic | $ | $ | $ | $ | |||||||||||
Earnings per common share, diluted | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income including noncontrolling interests | $ | $ | $ | $ | |||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Cumulative translation adjustments | ( | ) | ( | ) | |||||||||||
Retirement plans and other retiree benefit adjustments | |||||||||||||||
Gains (losses) on cash flow hedges | ( | ) | ( | ) | |||||||||||
Total Other comprehensive income (loss), net of tax | ( | ) | ( | ) | |||||||||||
Total Comprehensive income including noncontrolling interests | |||||||||||||||
Less: Net income attributable to noncontrolling interests | |||||||||||||||
Less: Cumulative translation adjustments attributable to noncontrolling interests | ( | ) | ( | ) | ( | ) | |||||||||
Total Comprehensive income attributable to noncontrolling interests | |||||||||||||||
Total Comprehensive income attributable to Colgate-Palmolive Company | $ | $ | $ | $ |
June 30, 2019 | December 31, 2018 | ||||||
Assets | |||||||
Current Assets | |||||||
Cash and cash equivalents | $ | $ | |||||
Receivables (net of allowances of $87 and $82, respectively) | |||||||
Inventories | |||||||
Other current assets | |||||||
Total current assets | |||||||
Property, plant and equipment: | |||||||
Cost | |||||||
Less: Accumulated depreciation | ( | ) | ( | ) | |||
Goodwill | |||||||
Other intangible assets, net | |||||||
Deferred income taxes | |||||||
Other assets | |||||||
Total assets | $ | $ | |||||
Liabilities and Shareholders’ Equity | |||||||
Current Liabilities | |||||||
Notes and loans payable | $ | $ | |||||
Current portion of long-term debt | |||||||
Accounts payable | |||||||
Accrued income taxes | |||||||
Other accruals | |||||||
Total current liabilities | |||||||
Long-term debt | |||||||
Deferred income taxes | |||||||
Other liabilities | |||||||
Total liabilities | |||||||
Shareholders’ Equity | |||||||
Common stock | |||||||
Additional paid-in capital | |||||||
Retained earnings | |||||||
Accumulated other comprehensive income (loss) | ( | ) | ( | ) | |||
Unearned compensation | ( | ) | ( | ) | |||
Treasury stock, at cost | ( | ) | ( | ) | |||
Total Colgate-Palmolive Company shareholders’ equity | ( | ) | ( | ) | |||
Noncontrolling interests | |||||||
Total equity | ( | ) | |||||
Total liabilities and equity | $ | $ |
Six Months Ended | |||||||
June 30, | |||||||
2019 | 2018 | ||||||
Operating Activities | |||||||
Net income including noncontrolling interests | $ | $ | |||||
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operations: | |||||||
Depreciation and amortization | |||||||
Restructuring and termination benefits, net of cash | ( | ) | |||||
Stock-based compensation expense | |||||||
Deferred income taxes | |||||||
Voluntary benefit plan contributions | ( | ) | |||||
Cash effects of changes in: | |||||||
Receivables | ( | ) | ( | ) | |||
Inventories | ( | ) | ( | ) | |||
Accounts payable and other accruals | ( | ) | ( | ) | |||
Other non-current assets and liabilities | ( | ) | |||||
Net cash provided by operations | |||||||
Investing Activities | |||||||
Capital expenditures | ( | ) | ( | ) | |||
Purchases of marketable securities and investments | ( | ) | ( | ) | |||
Proceeds from sale of marketable securities and investments | |||||||
Payment for acquisitions, net of cash acquired | ( | ) | |||||
Other | |||||||
Net cash used in investing activities | ( | ) | ( | ) | |||
Financing Activities | |||||||
Principal payments on debt | ( | ) | ( | ) | |||
Proceeds from issuance of debt | |||||||
Dividends paid | ( | ) | ( | ) | |||
Purchases of treasury shares | ( | ) | ( | ) | |||
Proceeds from exercise of stock options | |||||||
Net cash used in financing activities | ( | ) | ( | ) | |||
Effect of exchange rate changes on Cash and cash equivalents | ( | ) | |||||
Net increase (decrease) in Cash and cash equivalents | ( | ) | |||||
Cash and cash equivalents at beginning of the period | |||||||
Cash and cash equivalents at end of the period | $ | $ | |||||
Supplemental Cash Flow Information | |||||||
Income taxes paid | $ | $ |
Three Months Ended June 30, 2019 | |||||||||||||||||||||||||||
Colgate-Palmolive Company Shareholders’ Equity | Noncontrolling Interests | ||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Unearned Compensation | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss)(1) | ||||||||||||||||||||||
Balance, March 31, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||
Net income | |||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ) | |||||||||||||||||||||||||
Dividends ($0.43)/per share) | ( | ) | ( | ) | |||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||
Shares issued for stock options | |||||||||||||||||||||||||||
Shares issued for restricted stock units | ( | ) | |||||||||||||||||||||||||
Treasury stock acquired | ( | ) | |||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||
Balance, June 30, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ |
Three Months Ended June 30, 2018 | |||||||||||||||||||||||||||
Colgate-Palmolive Company Shareholders’ Equity | Noncontrolling Interests | ||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Unearned Compensation | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss)(1) | ||||||||||||||||||||||
Balance, March 31, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||
Net income | |||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ) | ( | ) | |||||||||||||||||||||||
Dividends ($0.42)/per share) | ( | ) | ( | ) | |||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||
Shares issued for stock options | |||||||||||||||||||||||||||
Shares issued for restricted stock units | ( | ) | |||||||||||||||||||||||||
Treasury stock acquired | ( | ) | |||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||
Balance, June 30, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ |
Six Months Ended June 30, 2019 | |||||||||||||||||||||||||||
Colgate-Palmolive Company Shareholders’ Equity | Noncontrolling Interests | ||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Unearned Compensation | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss)(1) | ||||||||||||||||||||||
Balance, December 31, 2018 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||
Net income | |||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | |||||||||||||||||||||||||||
Dividends ($1.28)/per share)* | ( | ) | ( | ) | |||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||
Shares issued for stock options | |||||||||||||||||||||||||||
Shares issued for restricted stock units | ( | ) | |||||||||||||||||||||||||
Treasury stock acquired | ( | ) | |||||||||||||||||||||||||
Other | ( | ) | |||||||||||||||||||||||||
Balance, June 30, 2019 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ |
Six Months Ended June 30, 2018 | |||||||||||||||||||||||||||
Colgate-Palmolive Company Shareholders’ Equity | Noncontrolling Interests | ||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Unearned Compensation | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss)(1) | ||||||||||||||||||||||
Balance, December 31, 2017 | $ | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||
Net income | |||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ( | ) | ( | ) | |||||||||||||||||||||||
Dividends ($1.24)/per share)* | ( | ) | ( | ) | |||||||||||||||||||||||
Stock-based compensation expense | |||||||||||||||||||||||||||
Shares issued for stock options | |||||||||||||||||||||||||||
Shares issued for restricted stock units | ( | ) | |||||||||||||||||||||||||
Treasury stock acquired | ( | ) | |||||||||||||||||||||||||
Other | ( | ) | (2) | ||||||||||||||||||||||||
Balance, June 30, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ |
1. | Basis of Presentation |
2. | Use of Estimates |
3. | Recent Accounting Pronouncements |
4. | Restructuring and Related Implementation Charges |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cost of sales | $ | ( | ) | $ | $ | $ | |||||||||
Selling, general and administrative expenses | |||||||||||||||
Other (income) expense, net | |||||||||||||||
Non-service related postretirement costs | |||||||||||||||
Total Global Growth and Efficiency Program charges, pretax | $ | $ | $ | $ | |||||||||||
Total Global Growth and Efficiency Program charges, aftertax | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | Program-to-date | ||||||||||||
June 30, | June 30, | Accumulated Charges | ||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||
North America | % | % | % | % | % | |||||||||
Latin America | % | % | % | % | % | |||||||||
Europe | ( | )% | % | % | % | % | ||||||||
Asia Pacific | % | ( | )% | % | % | % | ||||||||
Africa/Eurasia | ( | )% | % | ( | )% | % | % | |||||||
Hill’s Pet Nutrition | % | % | % | % | % | |||||||||
Corporate | % | % | % | % | % | |||||||||
Total | % | % | % | % | % |
Cumulative Charges | |||
as of June 30, 2019 | |||
Employee-Related Costs | $ | ||
Incremental Depreciation | |||
Asset Impairments | |||
Other | |||
Total | $ |
Three Months Ended June 30, 2019 | ||||||||||||||||||||
Employee-Related Costs | Incremental Depreciation | Asset Impairments | Other | Total | ||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | $ | $ | |||||||||||||||
Charges | ||||||||||||||||||||
Cash payments | ( | ) | ( | ) | ( | ) | ||||||||||||||
Charges against assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
Foreign exchange | ( | ) | ( | ) | ||||||||||||||||
Other | ||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ |
Six Months Ended June 30, 2019 | ||||||||||||||||||||
Employee-Related Costs | Incremental Depreciation | Asset Impairments | Other | Total | ||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | $ | $ | |||||||||||||||
Charges | ||||||||||||||||||||
Cash payments | ( | ) | ( | ) | ( | ) | ||||||||||||||
Charges against assets | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||
Foreign exchange | ( | ) | ( | ) | ||||||||||||||||
Other | ( | ) | ( | ) | ||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | $ | $ |
June 30, 2019 | December 31, 2018 | ||||||
Raw materials and supplies | $ | $ | |||||
Work-in-process | |||||||
Finished goods | |||||||
Total Inventories | $ | $ |
Three Months Ended | |||||||||||||||||||||
June 30, 2019 | June 30, 2018 | ||||||||||||||||||||
Net income attributable to Colgate-Palmolive Company | Shares (millions) | Per Share | Net income attributable to Colgate-Palmolive Company | Shares (millions) | Per Share | ||||||||||||||||
Basic EPS | $ | $ | $ | $ | |||||||||||||||||
Stock options and restricted stock units | |||||||||||||||||||||
Diluted EPS | $ | $ | $ | $ |
Six Months Ended | |||||||||||||||||||||
June 30, 2019 | June 30, 2018 | ||||||||||||||||||||
Net income attributable to Colgate-Palmolive Company | Shares (millions) | Per Share | Net income attributable to Colgate-Palmolive Company | Shares (millions) | Per Share | ||||||||||||||||
Basic EPS | $ | $ | $ | $ | |||||||||||||||||
Stock options and restricted stock units | |||||||||||||||||||||
Diluted EPS | $ | $ | $ | $ |
7. | Other Comprehensive Income (Loss) |
2019 | 2018 | |||||||||||||||
Pretax | Net of Tax | Pretax | Net of Tax | |||||||||||||
Cumulative translation adjustments | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
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) | ||||||||||||||||
Retirement plans and other retiree benefits adjustments | ||||||||||||||||
Cash flow hedges: | ||||||||||||||||
Unrealized gains (losses) on cash flow hedges | ( | ) | ( | ) | ||||||||||||
Reclassification of (gains) losses into net earnings on cash flow hedges (2) | ( | ) | ( | ) | ||||||||||||
Gains (losses) on cash flow hedges | ( | ) | ( | ) | ||||||||||||
Total Other comprehensive income (loss) | $ | $ | $ | ( | ) | $ | ( | ) |
2019 | 2018 | |||||||||||||||
Pretax | Net of Tax | Pretax | Net of Tax | |||||||||||||
Cumulative translation adjustments | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||
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) | ||||||||||||||||
Retirement plans and other retiree benefits adjustments | ||||||||||||||||
Cash flow hedges: | ||||||||||||||||
Unrealized gains (losses) on cash flow hedges | ( | ) | ( | ) | ||||||||||||
Reclassification of (gains) losses into net earnings on cash flow hedges (2) | ( | ) | ( | ) | ||||||||||||
Gains (losses) on cash flow hedges | ( | ) | ( | ) | ||||||||||||
Total Other comprehensive income (loss) | $ | $ | $ | ( | ) | $ | ( | ) |
8. | Retirement Plans and Other Retiree Benefits |
Pension Benefits | Other Retiree Benefits | ||||||||||||||||||||||
United States | International | ||||||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||||
Amortization of actuarial loss (gain) | |||||||||||||||||||||||
Net periodic benefit cost | $ | $ | $ | $ | $ | $ |
Pension Benefits | Other Retiree Benefits | ||||||||||||||||||||||
United States | International | ||||||||||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||
2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||
Interest cost | |||||||||||||||||||||||
Expected return on plan assets | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||||||
Amortization of actuarial loss (gain) | |||||||||||||||||||||||
Net periodic benefit cost | $ | $ | $ | $ | $ | $ |
9. | Income Taxes |
10. | Contingencies |
▪ | In December 2014, the French competition law authority found that |
▪ | 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. | Segment Information |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net sales | |||||||||||||||
Oral, Personal and Home Care | |||||||||||||||
North America | $ | $ | $ | $ | |||||||||||
Latin America | |||||||||||||||
Europe | |||||||||||||||
Asia Pacific | |||||||||||||||
Africa/Eurasia | |||||||||||||||
Total Oral, Personal and Home Care | |||||||||||||||
Pet Nutrition | |||||||||||||||
Total Net sales | $ | $ | $ | $ |
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||
Net sales | |||||||||||
Oral Care | % | % | % | % | |||||||
Personal Care | % | % | % | % | |||||||
Home Care | % | % | % | % | |||||||
Pet Nutrition | % | % | % | % | |||||||
Total Net sales | % | % | % | % |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Operating profit | |||||||||||||||
Oral, Personal and Home Care | |||||||||||||||
North America | $ | $ | $ | $ | |||||||||||
Latin America | |||||||||||||||
Europe | |||||||||||||||
Asia Pacific | |||||||||||||||
Africa/Eurasia | |||||||||||||||
Total Oral, Personal and Home Care | |||||||||||||||
Pet Nutrition | |||||||||||||||
Corporate | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Total Operating profit | $ | $ | $ | $ |
12. | Fair Value Measurements and Financial Instruments |
Assets | Liabilities | ||||||||||||||||||
Account | Fair Value | Account | Fair Value | ||||||||||||||||
Designated derivative instruments | June 30, 2019 | December 31, 2018 | June 30, 2019 | December 31, 2018 | |||||||||||||||
Interest rate swap contracts | Other current assets | $ | $ | Other accruals | $ | $ | |||||||||||||
Interest rate swap contracts | Other assets | Other liabilities | |||||||||||||||||
Foreign currency contracts | Other current assets | Other accruals | |||||||||||||||||
Foreign currency contracts | Other assets | Other liabilities | |||||||||||||||||
Commodity contracts | Other current assets | Other accruals | |||||||||||||||||
Total designated | $ | $ | $ | $ | |||||||||||||||
Other financial instruments | |||||||||||||||||||
Marketable securities | Other current assets | $ | $ | ||||||||||||||||
Total other financial instruments | $ | $ |
June 30, 2019 | December 31, 2018 | ||||||
Long-term debt: | |||||||
Carrying amount of hedged item | $ | $ | |||||
Cumulative hedging adjustment included in the carrying amount | ( | ) |
June 30, 2019 | |||||||||||||||||||
Foreign Currency Contracts | Foreign Currency Debt | Interest Rate Swaps | Commodity Contracts | Total | |||||||||||||||
Fair Value Hedges | $ | $ | $ | $ | $ | ||||||||||||||
Cash Flow Hedges | |||||||||||||||||||
Net Investment Hedges |
December 31, 2018 | |||||||||||||||||||
Foreign Currency Contracts | Foreign Currency Debt | Interest Rate Swaps | Commodity Contracts | Total | |||||||||||||||
Fair Value Hedges | $ | $ | $ | $ | $ | ||||||||||||||
Cash Flow Hedges | |||||||||||||||||||
Net Investment Hedges |
Three Months Ended June 30, | |||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||
Cost of sales | Selling, general and administrative expenses | Interest (income) expense, net | Cost of sales | Selling, general and administrative expenses | Interest (income) expense, net | ||||||||||||||||||
Gain (loss) on hedges recognized in income: | |||||||||||||||||||||||
Interest rate swaps designated as fair value hedges: | |||||||||||||||||||||||
Derivative instrument | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||||||
Hedged items | |||||||||||||||||||||||
Foreign currency contracts designated as fair value hedges: | |||||||||||||||||||||||
Derivative instrument | |||||||||||||||||||||||
Hedged items | ( | ) | ( | ) | |||||||||||||||||||
Foreign currency contracts designated as cash flow hedges: | |||||||||||||||||||||||
Amount reclassified from OCI | ( | ) | |||||||||||||||||||||
Commodity contracts designated as cash flow hedges: | |||||||||||||||||||||||
Amount reclassified from OCI | |||||||||||||||||||||||
Total gain (loss) on hedges recognized in income | $ | $ | $ | $ | ( | ) | $ | $ |
Six Months Ended June 30, | |||||||||||||||||||||||
2019 | 2018 | ||||||||||||||||||||||
Cost of sales | Selling, general and administrative expenses | Interest (income) expense, net | Cost of sales | Selling, general and administrative expenses | Interest (income) expense, net | ||||||||||||||||||
Gain (loss) on hedges recognized in income: | |||||||||||||||||||||||
Interest rate swaps designated as fair value hedges: | |||||||||||||||||||||||
Derivative instrument | $ | $ | $ | ( | ) | $ | $ | $ | ( | ) | |||||||||||||
Hedged items | |||||||||||||||||||||||
Foreign currency contracts designated as fair value hedges: | |||||||||||||||||||||||
Derivative instrument | ( | ) | |||||||||||||||||||||
Hedged items | ( | ) | |||||||||||||||||||||
Foreign currency contracts designated as cash flow hedges: | |||||||||||||||||||||||
Amount reclassified from OCI | ( | ) | |||||||||||||||||||||
Commodity contracts designated as cash flow hedges: | |||||||||||||||||||||||
Amount reclassified from OCI | |||||||||||||||||||||||
Total gain (loss) on hedges recognized in income | $ | $ | $ | $ | ( | ) | $ | $ |
Three Months Ended | |||||||
June 30, | |||||||
2019 | 2018 | ||||||
Foreign currency contracts designated as cash flow hedges: | |||||||
Gain (loss) recognized in OCI | $ | ( | ) | $ | |||
Commodity contracts designated as cash flow hedges: | |||||||
Gain (loss) recognized in OCI | |||||||
Foreign currency contracts designated as net investment hedges: | |||||||
Gain (loss) on instruments | ( | ) | |||||
Gain (loss) on hedged items | ( | ) | |||||
Foreign currency debt designated as net investment hedges: | |||||||
Gain (loss) on instruments | ( | ) | |||||
Gain (loss) on hedged items | ( | ) | |||||
Total unrealized gain (loss) on hedges recognized in OCI | $ | ( | ) | $ |
Six Months Ended | |||||||
June 30, | |||||||
2019 | 2018 | ||||||
Foreign currency contracts designated as cash flow hedges: | |||||||
Gain (loss) recognized in OCI | $ | ( | ) | $ | |||
Commodity contracts designated as cash flow hedges: | |||||||
Gain (loss) recognized in OCI | |||||||
Foreign currency contracts designated as net investment hedges: | |||||||
Gain (loss) on instruments | ( | ) | |||||
Gain (loss) on hedged items | ( | ) | |||||
Foreign currency debt designated as net investment hedges: | |||||||
Gain (loss) on instruments | |||||||
Gain (loss) on hedged items | ( | ) | ( | ) | |||
Total unrealized gain (loss) on hedges recognized in OCI | $ | ( | ) | $ |
Other assets | $ | ||
Other accruals | $ | ||
Other liabilities | |||
Total operating lease liabilities | $ |
Years Ending December 31, | As of June 30, 2019 | As of December 31, 2018 | |||||
2019 | $ | (1) | $ | ||||
2020 | |||||||
2021 | |||||||
2022 | |||||||
2023 | |||||||
Thereafter | |||||||
Total lease commitments | $ | $ | |||||
Less: Interest | ( | ) | |||||
Present value of lease liabilities | $ |
Three Months Ended June 30, 2019 | Six Months Ended June 30, 2019 | ||||||
Operating lease cost | $ | $ | |||||
Short-term lease cost | |||||||
Variable lease cost | |||||||
Sublease income | |||||||
Total lease cost | $ | $ |
▪ | Payments against amounts included in the measurement of lease liabilities: $ |
▪ | Lease assets obtained in exchange for lease liabilities: $ |
▪ | Expanding Commercial Hubs |
▪ | Extending Shared Business Services and Streamlining Global Functions |
▪ | Optimizing Global Supply Chain and Facilities |
Three Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
Gross profit, GAAP | $ | 2,308 | $ | 2,301 | ||||
Global Growth and Efficiency Program | (3 | ) | 5 | |||||
Gross profit, non-GAAP | $ | 2,305 | $ | 2,306 |
Three Months Ended June 30, | |||||||||
2019 | 2018 | Basis Point Change | |||||||
Gross profit margin, GAAP | 59.7 | % | 59.2 | % | 50 | ||||
Global Growth and Efficiency Program | (0.1 | ) | 0.1 | ||||||
Gross profit margin, non-GAAP | 59.6 | % | 59.3 | % | 30 |
Three Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
Selling, general and administrative expenses, GAAP | $ | 1,369 | $ | 1,300 | ||||
Global Growth and Efficiency Program | (10 | ) | (10 | ) | ||||
Selling, general and administrative expenses, non-GAAP | $ | 1,359 | $ | 1,290 |
Three Months Ended June 30, | ||||||||
2019 | 2018 | Basis Point Change | ||||||
Selling, general and administrative expenses as a percentage of Net sales, GAAP | 35.4 | % | 33.5 | % | 190 | |||
Global Growth and Efficiency Program | (0.2 | ) | (0.3 | ) | ||||
Selling, general and administrative expenses as a percentage of Net sales, non-GAAP | 35.2 | % | 33.2 | % | 200 |
Three Months Ended June 30, | |||||||||||
2019 | 2018 | % Change | |||||||||
Operating profit, GAAP | $ | 888 | $ | 946 | (6 | )% | |||||
Global Growth and Efficiency Program | 40 | 58 | |||||||||
Operating profit, non-GAAP | $ | 928 | $ | 1,004 | (8 | )% |
Three Months Ended June 30, | |||||||||
2019 | 2018 | Basis Point Change | |||||||
Operating profit margin, GAAP | 23.0 | % | 24.3 | % | (130 | ) | |||
Global Growth and Efficiency Program | 1.0 | 1.5 | |||||||
Operating profit margin, non-GAAP | 24.0 | % | 25.8 | % | (180 | ) |
Three Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
Non-service related postretirement costs, GAAP | $ | 27 | $ | 23 | ||||
Global Growth and Efficiency Program | (2 | ) | (3 | ) | ||||
Non-service related postretirement costs, non-GAAP | $ | 25 | $ | 20 |
Three Months Ended June 30, 2019 | |||||||||||||||||||
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 | $ | 823 | $ | 205 | $ | 618 | $ | 586 | $ | 0.68 | |||||||||
Global Growth and Efficiency Program | 42 | 11 | 31 | 31 | 0.04 | ||||||||||||||
Non-GAAP | $ | 865 | $ | 216 | $ | 649 | $ | 617 | $ | 0.72 |
Three Months Ended June 30, 2018 | |||||||||||||||||||||||
Income Before Income Taxes | Provision For Income Taxes(1) | Net Income Including Noncontrolling Interests | Less: Income Attributable to Noncontrolling Interests | Net Income Attributable To Colgate-Palmolive Company | Diluted Earnings Per Share(2) | ||||||||||||||||||
As Reported GAAP | $ | 888 | $ | 213 | $ | 675 | $ | 38 | $ | 637 | $ | 0.73 | |||||||||||
Global Growth and Efficiency Program | 61 | 13 | 48 | (3 | ) | 51 | 0.06 | ||||||||||||||||
Benefit from a foreign tax matter | — | 15 | (15 | ) | — | (15 | ) | (0.02 | ) | ||||||||||||||
Non-GAAP | $ | 949 | $ | 241 | $ | 708 | $ | 35 | $ | 673 | $ | 0.77 |
Three Months Ended June 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Net sales | $ | 846 | $ | 824 | 2.5 | % | |||||
Operating profit | $ | 254 | $ | 264 | (4 | ) | % | ||||
% of Net sales | 30.0 | % | 32.0 | % | (200 | ) | bps |
Three Months Ended June 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Net sales | $ | 929 | $ | 933 | (0.5 | ) | % | ||||
Operating profit | $ | 251 | $ | 262 | (4 | ) | % | ||||
% of Net sales | 27.0 | % | 28.1 | % | (110 | ) | bps |
Three Months Ended June 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Net sales | $ | 588 | $ | 620 | (5 | ) | % | ||||
Operating profit | $ | 148 | $ | 156 | (5 | ) | % | ||||
% of Net sales | 25.2 | % | 25.2 | % | — | bps |
Three Months Ended June 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Net sales | $ | 646 | $ | 674 | (4.0 | ) | % | ||||
Operating profit | $ | 174 | $ | 203 | (14 | ) | % | ||||
% of Net sales | 26.9 | % | 30.1 | % | (320 | ) | bps |
Three Months Ended June 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Net sales | $ | 244 | $ | 243 | 0.5 | % | |||||
Operating profit | $ | 47 | $ | 42 | 12 | % | |||||
% of Net sales | 19.3 | % | 17.3 | % | 200 | bps |
Three Months Ended June 30, | |||||||||||
2019 | 2018 | Change | |||||||||
Net sales | $ | 613 | $ | 592 | 3.5 | % | |||||
Operating profit | $ | 167 | $ | 165 | 1 | % | |||||
% of Net sales | 27.3 | % | 27.9 | % | (60 | ) | bps |
Three Months Ended June 30, | ||||||||||
2019 | 2018 | Change | ||||||||
Operating profit (loss) | $ | (153 | ) | $ | (146 | ) | 5 | % |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Net sales | |||||||
Oral, Personal and Home Care | |||||||
North America | $ | 1,699 | $ | 1,651 | |||
Latin America | 1,818 | 1,862 | |||||
Europe | 1,190 | 1,268 | |||||
Asia Pacific | 1,346 | 1,433 | |||||
Africa/Eurasia | 484 | 498 | |||||
Total Oral, Personal and Home Care | 6,537 | 6,712 | |||||
Pet Nutrition | 1,213 | 1,176 | |||||
Total Net sales | $ | 7,750 | $ | 7,888 | |||
Operating profit | |||||||
Oral, Personal and Home Care | |||||||
North America | $ | 503 | $ | 521 | |||
Latin America | 483 | 535 | |||||
Europe | 299 | 318 | |||||
Asia Pacific | 363 | 429 | |||||
Africa/Eurasia | 93 | 92 | |||||
Total Oral, Personal and Home Care | 1,741 | 1,895 | |||||
Pet Nutrition | 331 | 329 | |||||
Corporate | (305 | ) | (295 | ) | |||
Total Operating profit | $ | 1,767 | $ | 1,929 |
Six Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
Gross profit, GAAP | $ | 4,595 | $ | 4,709 | ||||
Global Growth and Efficiency Program | 8 | 11 | ||||||
Gross profit, non-GAAP | $ | 4,603 | $ | 4,720 |
Six Months Ended June 30, | |||||||||
2019 | 2018 | Basis Point Change | |||||||
Gross profit margin, GAAP | 59.3 | % | 59.7 | % | (40 | ) | |||
Global Growth and Efficiency Program | 0.1 | 0.1 | |||||||
Gross profit margin, non-GAAP | 59.4 | % | 59.8 | % | (40 | ) |
Six Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
Selling, general and administrative expenses, GAAP | $ | 2,734 | $ | 2,692 | ||||
Global Growth and Efficiency Program | (14 | ) | (15 | ) | ||||
Selling, general and administrative expenses, non-GAAP | $ | 2,720 | $ | 2,677 |
Six Months Ended June 30, | ||||||||
2019 | 2018 | Basis Point Change | ||||||
Selling, general and administrative expenses as a percentage of Net sales, GAAP | 35.3 | % | 34.1 | % | 120 | |||
Global Growth and Efficiency Program | (0.2 | ) | (0.2 | ) | ||||
Selling, general and administrative expenses as a percentage of Net sales, non- GAAP | 35.1 | % | 33.9 | % | 120 |
Six Months Ended June 30, | |||||||||||
2019 | 2018 | % Change | |||||||||
Operating profit, GAAP | $ | 1,767 | $ | 1,929 | (8 | )% | |||||
Global Growth and Efficiency Program | 68 | 82 | |||||||||
Operating profit, non-GAAP | $ | 1,835 | $ | 2,011 | (9 | )% |
Six Months Ended June 30, | |||||||||
2019 | 2018 | Basis Point Change | |||||||
Operating profit margin, GAAP | 22.8 | % | 24.5 | % | (170 | ) | |||
Global Growth and Efficiency Program | 0.9 | 1.0 | |||||||
Operating profit margin, non-GAAP | 23.7 | % | 25.5 | % | (180 | ) |
Six Months Ended June 30, | ||||||||
2019 | 2018 | |||||||
Non-service related postretirement costs, GAAP | $ | 52 | $ | 47 | ||||
Global Growth and Efficiency Program | (3 | ) | (7 | ) | ||||
Non-service related postretirement costs, non-GAAP | $ | 49 | $ | 40 |
Three Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||
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 | $ | 823 | $ | 205 | 24.9 | % | $ | 888 | $ | 213 | 24.0 | % | ||||||||||
Global Growth and Efficiency Program | 42 | 11 | 0.1 | 61 | 13 | (0.2 | ) | |||||||||||||||
Benefit from a foreign tax matter | — | — | — | — | 15 | 1.6 | ||||||||||||||||
Non-GAAP | $ | 865 | $ | 216 | 25.0 | % | $ | 949 | $ | 241 | 25.4 | % |
Six Months Ended June 30, | ||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||
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 | $ | 1,637 | $ | 419 | 25.6 | % | $ | 1,812 | $ | 459 | 25.3 | % | ||||||||||
Global Growth and Efficiency Program | 71 | 18 | — | 89 | 21 | (0.1 | ) | |||||||||||||||
Benefit from a foreign tax matter | — | — | — | — | 15 | 0.8 | ||||||||||||||||
Non-GAAP | $ | 1,708 | $ | 437 | 25.6 | % | $ | 1,901 | $ | 495 | 26.0 | % |
Six Months Ended June 30, 2019 | ||||||||||||||||||||
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 | $ | 1,637 | $ | 419 | $ | 1,218 | $ | 1,146 | $ | 1.33 | ||||||||||
Global Growth and Efficiency Program | 71 | 18 | 53 | 53 | 0.06 | |||||||||||||||
Non-GAAP | $ | 1,708 | $ | 437 | $ | 1,271 | $ | 1,199 | $ | 1.39 |
Six Months Ended June 30, 2018 | ||||||||||||||||||||||||
Income Before Income Taxes | Provision For Income Taxes(1) | Net Income Including Noncontrolling Interests | Less: Income Attributable To Noncontrolling Interests | Net Income Attributable To Colgate- Palmolive Company | Diluted Earnings Per Share(2) | |||||||||||||||||||
As Reported GAAP | $ | 1,812 | $ | 459 | $ | 1,353 | $ | 82 | $ | 1,271 | $ | 1.45 | ||||||||||||
Global Growth and Efficiency Program | 89 | 21 | 68 | (3 | ) | 71 | 0.08 | |||||||||||||||||
Benefit from a foreign tax matter | — | 15 | (15 | ) | — | (15 | ) | (0.02 | ) | |||||||||||||||
Non-GAAP | $ | 1,901 | $ | 495 | $ | 1,406 | $ | 79 | $ | 1,327 | $ | 1.51 |
▪ | Becoming even stronger on the ground through the continued evolution and expansion of proven global and regional commercial capabilities. |
▪ | 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 | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Cost of sales | $ | (3 | ) | $ | 5 | $ | 8 | $ | 11 | ||||||
Selling, general and administrative expenses | 10 | 10 | 14 | 15 | |||||||||||
Other (income) expense, net | 33 | 43 | 46 | 56 | |||||||||||
Non-service related postretirement costs | 2 | 3 | 3 | 7 | |||||||||||
Total Global Growth and Efficiency Program charges, pretax | $ | 42 | $ | 61 | $ | 71 | $ | 89 | |||||||
Total Global Growth and Efficiency Program charges, aftertax | $ | 31 | $ | 51 | $ | 53 | $ | 71 |
Three Months Ended | Six Months Ended | Program-to-date | ||||||||||||
June 30, | June 30, | Accumulated Charges | ||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||
North America | — | % | 8 | % | 3 | % | 17 | % | 18 | % | ||||
Latin America | 8 | % | 11 | % | 21 | % | 11 | % | 5 | % | ||||
Europe | (3 | )% | 2 | % | 1 | % | 2 | % | 19 | % | ||||
Asia Pacific | 7 | % | (6 | )% | 7 | % | 1 | % | 4 | % | ||||
Africa/Eurasia | (2 | )% | 7 | % | (1 | )% | 6 | % | 5 | % | ||||
Hill’s Pet Nutrition | 1 | % | 22 | % | 6 | % | 21 | % | 8 | % | ||||
Corporate | 89 | % | 56 | % | 63 | % | 42 | % | 41 | % | ||||
Total | 100 | % | 100 | % | 100 | % | 100 | % | 100 | % |
Cumulative Charges | |||
as of June 30, 2019 | |||
Employee-Related Costs | $ | 695 | |
Incremental Depreciation | 102 | ||
Asset Impairments | 58 | ||
Other | 938 | ||
Total | $ | 1,793 |
Three Months Ended June 30, 2019 | ||||||||||||||||||||
Employee-Related Costs | Incremental Depreciation | Asset Impairments | Other | Total | ||||||||||||||||
Balance at March 31, 2019 | $ | 52 | $ | — | $ | — | $ | 94 | $ | 146 | ||||||||||
Charges | 4 | 5 | — | 33 | 42 | |||||||||||||||
Cash payments | (12 | ) | — | — | (14 | ) | (26 | ) | ||||||||||||
Charges against assets | (2 | ) | (5 | ) | — | (27 | ) | (34 | ) | |||||||||||
Foreign exchange | (1 | ) | — | — | — | (1 | ) | |||||||||||||
Other | — | — | — | — | — | |||||||||||||||
Balance at June 30, 2019 | $ | 41 | $ | — | $ | — | $ | 86 | $ | 127 |
Six Months Ended June 30, 2019 | ||||||||||||||||||||
Employee-Related Costs | Incremental Depreciation | Asset Impairments | Other | Total | ||||||||||||||||
Balance at December 31, 2018 | $ | 60 | $ | — | $ | — | $ | 142 | $ | 202 | ||||||||||
Charges | 14 | 10 | 6 | 41 | 71 | |||||||||||||||
Cash payments | (28 | ) | — | — | (22 | ) | (50 | ) | ||||||||||||
Charges against assets | (3 | ) | (10 | ) | (6 | ) | (27 | ) | (46 | ) | ||||||||||
Foreign exchange | (2 | ) | — | — | — | (2 | ) | |||||||||||||
Other | — | — | — | (48 | ) | (48 | ) | |||||||||||||
Balance at June 30, 2019 | $ | 41 | $ | — | $ | — | $ | 86 | $ | 127 |
Three Months Ended June 30, 2019 | Net Sales Growth (GAAP) | Foreign Exchange Impact | Acquisitions and Divestments Impact | Organic Sales Growth (Non-GAAP) |
Oral, Personal and Home Care | ||||
North America | 2.5% | (0.5)% | —% | 3.0% |
Latin America | (0.5)% | (7.5)% | —% | 7.0% |
Europe | (5.0)% | (6.0)% | —% | 1.0% |
Asia Pacific | (4.0)% | (3.0)% | —% | (1.0)% |
Africa/Eurasia | 0.5% | (9.0)% | —% | 9.5% |
Total Oral, Personal and Home Care | (1.5)% | (5.0)% | —% | 3.5% |
Pet Nutrition | 3.5% | (2.5)% | —% | 6.0% |
Total Company | (0.5)% | (4.5)% | —% | 4.0% |
Six Months Ended June 30, 2019 | Net Sales Growth (GAAP) | Foreign Exchange Impact | Acquisitions and Divestments Impact | Organic Sales Growth (Non-GAAP) |
Oral, Personal and Home Care | ||||
North America | 3.0% | (0.5)% | —% | 3.5% |
Latin America | (2.5)% | (9.0)% | —% | 6.5% |
Europe | (6.0)% | (6.5)% | —% | 0.5% |
Asia Pacific | (6.0)% | (4.0)% | —% | (2.0)% |
Africa/Eurasia | (3.0)% | (11.0)% | —% | 8.0% |
Total Oral, Personal and Home Care | (2.5)% | (5.5)% | —% | 3.0% |
Pet Nutrition | 3.0% | (3.0)% | —% | 6.0% |
Total Company | (2.0)% | (5.5)% | —% | 3.5% |
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) | ||||||||||
April 1 through 30, 2019 | 1,156,227 | $ | 68.78 | 1,108,282 | $ | 3,971 | ||||||||
May 1 through 31, 2019 | 1,421,488 | $ | 71.23 | 1,391,000 | $ | 3,872 | ||||||||
June 1 through 30, 2019 | 1,072,296 | $ | 72.63 | 1,042,235 | $ | 3,796 | ||||||||
Total | 3,650,011 | $ | 70.87 | 3,541,517 |
Exhibit No. | Description | |
31-A | ||
31-B | ||
32 | ||
101 | The following materials from Colgate-Palmolive Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2019, 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; (v) Condensed Consolidated Statements of Changes in Shareholders’ Equity and (vi) Notes to Condensed Consolidated Financial Statements. |
COLGATE-PALMOLIVE COMPANY | |
(Registrant) | |
Principal Executive Officer: | |
July 26, 2019 | /s/ Noel R. Wallace |
Noel R. Wallace | |
President and Chief Executive Officer | |
Principal Financial Officer: | |
July 26, 2019 | /s/ Henning I. Jakobsen |
Henning I. Jakobsen | |
Chief Financial Officer | |
Principal Accounting Officer: | |
July 26, 2019 | /s/ Philip G. Shotts |
Philip G. Shotts | |
Vice President and Controller |
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/ Noel R. Wallace |
Noel R. Wallace |
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/ Henning I. Jakobsen |
Henning I. Jakobsen |
Chief Financial Officer |
(1) | the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2019 (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/ Noel R. Wallace |
Noel R. Wallace |
President and |
Chief Executive Officer |
/s/ Henning I. Jakobsen |
Henning I. Jakobsen |
Chief Financial Officer |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
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Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 87 | $ 82 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY $ in Millions |
USD ($)
Dividend
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Common Stock
USD ($)
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Additional Paid-in Capital
USD ($)
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Unearned Compensation
USD ($)
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Treasury Stock
USD ($)
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Retained Earnings
USD ($)
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Accumulated Other Comprehensive Income (Loss)
USD ($)
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Noncontrolling Interests
USD ($)
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Accumulated other comprehensive income (loss), cumulative translation losses | $ 2,927 | |||||||||||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | $ 923 | |||||||||||||||||
Number of dividends declared per quarter | Dividend | 2 | |||||||||||||||||
Beginning balance at Dec. 31, 2017 | $ 1,466 | $ 1,984 | $ (5) | $ (20,181) | $ 20,531 | $ (3,855) | [1] | $ 303 | ||||||||||
Ending balance at Mar. 31, 2018 | 1,466 | 2,047 | (2) | (20,441) | 20,581 | (3,900) | [2] | 350 | ||||||||||
Beginning balance at Dec. 31, 2017 | 1,466 | 1,984 | (5) | (20,181) | 20,531 | (3,855) | [1] | 303 | ||||||||||
Changes in Shareholders' Equity [Roll Forward] | ||||||||||||||||||
Net income | $ 1,353 | 1,271 | 82 | |||||||||||||||
Other comprehensive income (loss), net of tax | (160) | (146) | [1] | (14) | ||||||||||||||
Dividends | [3] | (1,085) | (37) | |||||||||||||||
Stock-based compensation expense | 47 | |||||||||||||||||
Shares issued for stock options | 64 | 104 | ||||||||||||||||
Shares issued for restricted stock units | (14) | 14 | ||||||||||||||||
Treasury stock acquired | (696) | |||||||||||||||||
Other | 0 | 5 | 2 | 134 | (163) | [1],[4] | ||||||||||||
Ending balance at Jun. 30, 2018 | 1,466 | 2,081 | 0 | (20,757) | 20,851 | (4,164) | [1],[2] | 334 | ||||||||||
Accumulated other comprehensive income (loss), cumulative translation losses | 2,832 | |||||||||||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | 1,062 | |||||||||||||||||
Beginning balance at Mar. 31, 2018 | 1,466 | 2,047 | (2) | (20,441) | 20,581 | (3,900) | [2] | 350 | ||||||||||
Changes in Shareholders' Equity [Roll Forward] | ||||||||||||||||||
Net income | 675 | 637 | 38 | |||||||||||||||
Other comprehensive income (loss), net of tax | (280) | (264) | [2] | (16) | ||||||||||||||
Dividends | (367) | (38) | ||||||||||||||||
Stock-based compensation expense | 19 | |||||||||||||||||
Shares issued for stock options | 16 | 27 | ||||||||||||||||
Shares issued for restricted stock units | (2) | 2 | ||||||||||||||||
Treasury stock acquired | (345) | |||||||||||||||||
Other | 1 | 2 | ||||||||||||||||
Ending balance at Jun. 30, 2018 | 1,466 | 2,081 | 0 | (20,757) | 20,851 | (4,164) | [1],[2] | 334 | ||||||||||
Accumulated other comprehensive income (loss), cumulative translation losses | 3,121 | |||||||||||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | 1,048 | |||||||||||||||||
Accumulated other comprehensive income (loss), cumulative translation losses | 3,155 | |||||||||||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | $ 1,038 | |||||||||||||||||
Number of dividends declared per quarter | Dividend | 2 | |||||||||||||||||
Beginning balance at Dec. 31, 2018 | $ 197 | 1,466 | 2,204 | (3) | (21,196) | 21,615 | (4,188) | [1] | 299 | |||||||||
Ending balance at Mar. 31, 2019 | 1,466 | 2,241 | (3) | (21,532) | 21,436 | (4,160) | [2] | 342 | ||||||||||
Beginning balance at Dec. 31, 2018 | 197 | 1,466 | 2,204 | (3) | (21,196) | 21,615 | (4,188) | [1] | 299 | |||||||||
Changes in Shareholders' Equity [Roll Forward] | ||||||||||||||||||
Net income | 1,218 | 1,146 | 72 | |||||||||||||||
Other comprehensive income (loss), net of tax | 69 | 69 | [1] | 0 | ||||||||||||||
Dividends | [3] | (1,103) | (34) | |||||||||||||||
Stock-based compensation expense | 34 | |||||||||||||||||
Shares issued for stock options | 114 | 162 | ||||||||||||||||
Shares issued for restricted stock units | (14) | 14 | ||||||||||||||||
Treasury stock acquired | (664) | |||||||||||||||||
Other | 2 | (5) | ||||||||||||||||
Ending balance at Jun. 30, 2019 | (10) | 1,466 | 2,338 | (3) | (21,682) | 21,653 | (4,119) | [1],[2] | 337 | |||||||||
Accumulated other comprehensive income (loss), cumulative translation losses | 3,134 | |||||||||||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | 1,026 | |||||||||||||||||
Beginning balance at Mar. 31, 2019 | 1,466 | 2,241 | (3) | (21,532) | 21,436 | (4,160) | [2] | 342 | ||||||||||
Changes in Shareholders' Equity [Roll Forward] | ||||||||||||||||||
Net income | 618 | 586 | 32 | |||||||||||||||
Other comprehensive income (loss), net of tax | 36 | 41 | [2] | (5) | ||||||||||||||
Dividends | (369) | (32) | ||||||||||||||||
Stock-based compensation expense | 17 | |||||||||||||||||
Shares issued for stock options | 81 | 113 | ||||||||||||||||
Shares issued for restricted stock units | (1) | 1 | ||||||||||||||||
Treasury stock acquired | (265) | |||||||||||||||||
Other | 1 | |||||||||||||||||
Ending balance at Jun. 30, 2019 | (10) | $ 1,466 | $ 2,338 | $ (3) | $ (21,682) | $ 21,653 | $ (4,119) | [1],[2] | $ 337 | |||||||||
Accumulated other comprehensive income (loss), cumulative translation losses | 3,104 | |||||||||||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | $ 1,013 | |||||||||||||||||
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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Statement of Stockholders' Equity [Abstract] | ||||
Dividends declared per common share (in dollars per share) | $ 0.43 | $ 0.42 | $ 1.28 | $ 1.24 |
Basis of Presentation |
6 Months Ended |
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Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Condensed Consolidated Financial Statements reflect all normal recurring adjustments which, in management’s opinion, are necessary for a fair statement of the results for interim periods. Results of operations for interim periods may not be representative of results to be expected for a full year. Colgate-Palmolive Company (together with its subsidiaries, the “Company” or “Colgate”) reclassifies certain prior year amounts, as applicable, to conform to the current year presentation. For a complete set of financial statement notes, including the Company’s significant accounting policies, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission (the “SEC”).
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Use of Estimates |
6 Months Ended |
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Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates Provisions for certain expenses, including income taxes, advertising and consumer promotion, are based on full year assumptions and are included in the accompanying Condensed Consolidated Financial Statements in proportion with estimated annual tax rates, the passage of time or estimated annual sales, as applicable.
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Recent Accounting Pronouncements |
6 Months Ended |
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Jun. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In April 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-04, Codification Improvements to Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Financial Instruments (Topic 825). This extensive ASU clarifies three topics related to financial instruments accounting. This new guidance is effective for the Company beginning on January 1, 2020, with early adoption permitted. This new guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In October 2018, the FASB issued ASU No. 2018-16, “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as Benchmark Interest Rate for Hedge Accounting Purposes.” The new guidance permits the use of the OIS rate based on the SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815. The new guidance was effective for the Company on a prospective basis beginning on January 1, 2019, concurrently with the adoption of ASU 2017-12, and did not have an impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.” This new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This new guidance is effective for the Company on a prospective or retrospective basis beginning on January 1, 2020, with early adoption permitted. The Company elected to adopt this guidance early, beginning on January 1, 2019 on a prospective basis. The new guidance did not have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-14, “Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans.” This new guidance removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and requires certain additional disclosures. This new guidance is effective for the Company on a retrospective basis beginning on January 1, 2020, with early adoption permitted. While the Company is currently assessing the impact of the new guidance, it is not expected to have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This new guidance removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This new guidance is effective for the Company beginning on January 1, 2020, with early adoption permitted. Certain disclosure requirements in the new guidance will need to be applied on a retrospective basis and others on a prospective basis. While the Company is currently assessing the impact of the new guidance, it is not expected to have a material impact on the Company’s Consolidated Financial Statements. 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 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. The new guidance was effective for the Company on January 1, 2019 and did not have a material impact on the Company’s Consolidated Financial Statements. 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 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 February 2016, the FASB issued its final standard on lease accounting, ASU No. 2016-02, “Leases (Topic 842),” which superseded Topic 840, “Leases,” which was further modified in ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” ASU No. 2018-11, “Leases (Topic 842) Targeted Improvements” and ASU No. 2019-01 “Leases (Topic 842) Codification Improvements” to clarify the implementation guidance. The new accounting standard was effective for the Company beginning on January 1, 2019 and required the recognition on the balance sheet of right-of-use assets and lease liabilities for all long-term leases, including operating leases, on the balance sheet. The Company elected the optional transition method and adopted the new guidance on January 1, 2019, on a modified retrospective basis with no restatement of prior period amounts. As allowed under the new accounting standard, the Company elected to apply practical expedients to carry forward the original lease determinations, lease classifications and accounting of initial direct costs for all asset classes at the time of adoption. The Company also elected not to separate lease components from non-lease components and to exclude short-term leases from its Consolidated Balance Sheet. The Company’s adoption of the new standard resulted in the recognition of right-of-use assets of $458 and liabilities of $574, with no material cumulative effect adjustment to equity as of the date of adoption. In connection with the adoption of this guidance, as required, the Company reclassified certain restructuring reserves incurred in connection with the Global Growth and Efficiency Program (see Note 4, Restructuring and Related Implementation Charges for additional information) and deferred rent liabilities as reductions to lease assets. Adoption of the new standard did not have a material impact on the Company’s Consolidated Statements of Income or Cash Flows. See Note 13, Leases for additional information.
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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”). The program was expanded in 2014 and expanded and extended in each of 2015 and 2017. The program runs through December 31, 2019. 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. 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 $1,820 to $1,870 ($1,350 to $1,380 aftertax). The Company anticipates that pretax charges for 2019 will approximate $100 to $150 ($70 to $100 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 estimated to be comprised of the following categories: Employee-Related Costs, including severance, pension and other termination benefits (40%); 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 (30%) and the implementation of new strategies (20%). Over the course of the Global Growth and Efficiency Program, it is estimated that approximately 75% 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%), Europe (20%), Latin America (5%), 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 4,000 to 4,400 positions from the Company’s global employee workforce. For the three and six months ended June 30, 2019 and 2018, 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 $1,793 ($1,331 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 consolidation of facilities; the extension of shared business services and streamlining of global functions; 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 tables summarize 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 $2 and $3 for the three and six months ended June 30, 2019, respectively, which are reflected as Charges against assets within Employee-Related Costs in the preceding tables 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 8, 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 inventories and 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 and six months ended June 30, 2019 include third-party incremental costs related to the development and implementation of new business and strategic initiatives of $5 and $10, respectively, and contract termination costs and charges resulting directly from exit activities of $0 and $3, respectively. These charges were expensed as incurred. Other charges also included a charge for exit costs related to office space consolidation of $28 for the three and six months ended June 30, 2019. |
Inventories |
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Inventory, Net, Items Net of Reserve Alternative [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories by major class are as follows:
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Earnings Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share For the three months ended June 30, 2019 and 2018, earnings per share were as follows:
For the three months ended June 30, 2019 and 2018, the average number of stock options and restricted stock units that were anti-dilutive and not included in diluted earnings per share calculations were 18,334,488 and 16,303,599, respectively. For the six months ended June 30, 2019 and 2018, earnings per share were as follows:
For the six months ended June 30, 2019 and 2018, the average number of stock options and restricted stock units that were anti-dilutive and not included in diluted earnings per share calculations were 21,751,174 and 16,284,602, respectively. Basic and diluted earnings per share are computed independently for each quarter and any year-to-date period presented. As a result of changes in the number of shares outstanding during the year and rounding, the sum of the quarters’ earnings per share may not necessarily equal the earnings per share for any year-to-date period.
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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 June 30, 2019 and 2018 were as follows:
(1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 8, Retirement Plans and Other Retiree Benefits for additional details. (2) These (gains) losses are reclassified into Cost of sales. See Note 12, Fair Value Measurements and Financial Instruments for additional details. There were no tax impacts on Other comprehensive income (loss) (“OCI”) attributable to Noncontrolling interests. Additions to and reclassifications out of Accumulated other comprehensive income (loss) attributable to the Company for the six months ended June 30, 2019 and 2018 were as follows:
(1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 8, Retirement Plans and Other Retiree Benefits for additional details. (2) These (gains) losses are reclassified into Cost of sales. See Note 12, Fair Value Measurements and Financial Instruments for additional details. There were no tax impacts on OCI attributable to Noncontrolling interests.
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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 and six months ended June 30, 2019 and 2018 were as follows:
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Income Taxes |
6 Months Ended |
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Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (the “TCJA” or “U.S. tax reform”) 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, based on its initial analysis of the TCJA. During 2018, the Company finalized its assessment of the impact of the TCJA and recognized an additional tax expense of $80 reflecting the impact of transition tax guidance issued by the U.S. Treasury and the update of certain estimates and calculations based on information available through the end of 2018. The impact, if any, of further transitional tax guidance that may be issued by the U.S. Treasury would be reflected in the Company’s provision for income tax in the period such guidance is effective.
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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, data privacy and security, environmental and tax matters and consumer class actions. Management proactively reviews and monitors the Company’s exposure to, and the impact of, environmental matters. The Company is party to various environmental matters and, as such, may be responsible for all or a portion of the cleanup, restoration and post-closure monitoring of several sites. The Company establishes accruals for loss contingencies when it has determined that a loss is probable and that the amount of loss, or range of loss, can be reasonably estimated. Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances. The Company also determines estimates of reasonably possible losses or ranges of reasonably possible losses in excess of related accrued liabilities, if any, when it has determined that a loss is reasonably possible and it is able to determine such estimates. For those matters disclosed below for which the amount of any potential losses can be reasonably estimated, the Company currently estimates that the aggregate range of reasonably possible losses in excess of any accrued liabilities is $0 to approximately $225 (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 $158. 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. There is one case currently on appeal at the administrative level. In the event the Company is ultimately unsuccessful in this administrative appeal, 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. In April 2019, the Company lost another 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 $66, 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 as of June 30, 2019 of competition law matters pending against the Company during the six months ended June 30, 2019 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 June 30, 2019, there were 237 individual cases pending against the Company in state and federal courts throughout the United States, as compared to 229 cases as of March 31, 2019 and 239 cases as of December 31, 2018. During the quarter ended June 30, 2019, 25 new cases were filed and 17 cases were resolved by voluntary dismissal, dismissal by the court, judgment in the Company’s favor or settlement. During the quarter ended June 30, 2019, one case resulted in an adverse jury verdict after a trial, which the Company plans to appeal. During the six months ended June 30, 2019, 62 new cases were filed and 64 cases were resolved by voluntary dismissal, dismissal by the court, judgment in the Company’s favor or settlement. The value of the settlements and of the adverse jury verdict in the quarter and the year-to-date period presented was not material, either individually or in the aggregate, to each such period’s results of operations. 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, excess and umbrella 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. With the exception of the case where the Company received an adverse jury verdict, the range of reasonably possible losses in excess of accrued liabilities disclosed above does not include any amount relating to these cases because the amount of any possible losses from such cases currently cannot be reasonably estimated. ERISA Matter 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.
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company operates in two product segments: Oral, Personal and Home Care; and Pet Nutrition. The operations of the Oral, Personal and Home Care product segment are managed geographically in five reportable operating segments: North America, Latin America, Europe, Asia Pacific and Africa/Eurasia. The Company evaluates segment performance based on several factors, including Operating profit. The Company uses Operating profit as a measure of operating segment performance because it excludes the impact of Corporate-driven decisions related to interest expense and income taxes. The accounting policies of the operating segments are generally the same as those described in Note 2, Summary of Significant Accounting Policies to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. 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:
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:
Operating profit by segment was as follows:
For the three and six months ended June 30, 2019, Corporate Operating profit (loss) included charges of $40 and $68, respectively, resulting from the Global Growth and Efficiency Program. For the three and six months ended June 30, 2018, Corporate Operating profit (loss) included charges of $58 and $82, respectively, resulting from the Global Growth and Efficiency Program. |
Fair Value Measurements and Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments The Company uses available market information and other valuation methodologies in assessing the fair value of financial instruments. Judgment is required in interpreting market data to develop the estimates of fair value and, accordingly, changes in assumptions or the estimation methodologies may affect the fair value estimates. The Company is exposed to the risk of credit loss in the event of nonperformance by counterparties to financial instrument contracts; however, nonperformance is considered unlikely and any nonperformance is unlikely to be material, as it is the Company’s policy to contract only with diverse, credit-worthy counterparties based upon both strong credit ratings and other credit considerations. The Company is exposed to market risk from foreign currency exchange rates, interest rates and commodity price fluctuations. Volatility relating to these exposures is managed on a global basis by utilizing a number of techniques, including working capital management, sourcing strategies, selling price increases, selective borrowings in local currencies and entering into selective derivative instrument transactions, issued with standard features, in accordance with the Company’s treasury and risk management policies, which prohibit the use of derivatives for speculative purposes and leveraged derivatives for any purpose. It is the Company’s policy to enter into derivative instrument contracts with terms that match the underlying exposure being hedged. The Company’s derivative instruments include interest rate swap contracts, 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 company adopted ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” beginning on January 1, 2019. Refer to Note 3, Recent Accounting Pronouncements. 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 June 30, 2019 and December 31, 2018:
The carrying amount of cash, cash equivalents, accounts receivable and short-term debt approximated fair value as of June 30, 2019 and December 31, 2018. The estimated fair value of the Company’s long-term debt, including the current portion, as of June 30, 2019 and December 31, 2018, was $6,545 and $6,434, respectively, and the related carrying value was $6,641 and $6,354, respectively. The estimated fair value of long-term debt was derived principally from quoted prices on the Company’s outstanding fixed-term notes (Level 2 valuation). The following amounts were recorded on the Condensed Consolidated Balance Sheet related to cumulative basis adjustment for fair value hedges as of:
The following tables present the notional values as of:
The following tables present the location and amount of gains (losses) recognized on the Company’s Condensed Consolidated Statements of Income:
The following tables present the location and amount of unrealized gains (losses) included in OCI:
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Leases |
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Leases | Leases The Company adopted ASU No. 2016-02 “Leases (Topic 842)” on January 1, 2019, resulting in the recognition of right-of-use assets of $458 and liabilities of $574. The Company enters into leases for land, office space, warehouses and equipment. A number of the leases include one or more options to renew the lease terms, purchase the leased property or terminate the lease. The exercise of these options is at the Company’s discretion and is therefore recognized on the balance sheet when it is reasonably certain the Company will exercise such options. As the Company’s leases typically do not contain a readily determinable implicit rate, the Company determines the present value of the lease liability using its incremental borrowing rate at the lease commencement date. Substantially all of the Company’s leases are considered operating leases. Finance leases were not material as of June 30, 2019 or for the three and six months ended June 30, 2019. As of June 30, 2019, the Company’s right-of use assets and liabilities for operating leases were as follows:
Lease commitments under noncancellable operating leases were as follows:
(1) As of June 30, 2019, $95 represents the lease commitments for the six months remaining until December 31, 2019. The components of the Company’s operating lease cost for the three and six months ended June 30, 2019 were as follows:
Short-term lease cost represents the Company’s cost with respect to leases with a duration of 12 months or less and is not reflected on the Company’s Consolidated Balance Sheets. Variable lease costs are comprised of costs, such as the Company’s proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance that are not included in the lease liability and are recognized in the period in which they are incurred. Supplemental cash flow information related to operating leases for the six months ended June 30, 2019 was as follows:
As of June 30, 2019, the weighted-average remaining lease term for operating leases was 8 years and the weighted-average discount rate for operating leases was 4.0%. |
Subsequent Events |
6 Months Ended |
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Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Event On July 11, 2019, the Company announced that it entered into a Share Purchase Agreement to acquire the Laboratoires Filorga Cosmétiques (“Filorga”) skin care business from Filorga Initiatives (the “Seller”) for an equity purchase price of €1,495.5 (approximately $1,690) in cash. The consummation of the transaction is subject only to the approval of the Austrian Federal Competition Authority, the French Competition Authority and the Federal Antimonopoly Service of the Russian Federation, as well as the absence of any governmental proceeding, order or law that would prohibit the consummation of the transaction. The transaction will be financed with a combination of debt and cash and is currently expected to close in the third quarter of 2019. At the closing of the acquisition, Colgate will acquire Filorga, including cash, debt and working capital it has accrued since January 1, 2019, and the Company will pay the Seller an amount of interest on the purchase price calculated at an annual rate of 2% in respect of the period commencing January 1, 2019 and ending on the closing date of the acquisition.
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Use of Estimates (Policies) |
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Jun. 30, 2019 | |
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, as applicable.
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Recent Accounting Pronouncements | In April 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2019-04, Codification Improvements to Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Financial Instruments (Topic 825). This extensive ASU clarifies three topics related to financial instruments accounting. This new guidance is effective for the Company beginning on January 1, 2020, with early adoption permitted. This new guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In October 2018, the FASB issued ASU No. 2018-16, “Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as Benchmark Interest Rate for Hedge Accounting Purposes.” The new guidance permits the use of the OIS rate based on the SOFR as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815. The new guidance was effective for the Company on a prospective basis beginning on January 1, 2019, concurrently with the adoption of ASU 2017-12, and did not have an impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles-Goodwill and Other-Internal-Use Software (Topic 350): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract.” This new guidance aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. This new guidance is effective for the Company on a prospective or retrospective basis beginning on January 1, 2020, with early adoption permitted. The Company elected to adopt this guidance early, beginning on January 1, 2019 on a prospective basis. The new guidance did not have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-14, “Compensation-Retirement Benefits-Defined Benefit Plans-General (Topic 715): Disclosure Framework-Changes to the Disclosure Requirements for Defined Benefit Plans.” This new guidance removes certain disclosures that are not considered cost beneficial, clarifies certain required disclosures and requires certain additional disclosures. This new guidance is effective for the Company on a retrospective basis beginning on January 1, 2020, with early adoption permitted. While the Company is currently assessing the impact of the new guidance, it is not expected to have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This new guidance removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This new guidance is effective for the Company beginning on January 1, 2020, with early adoption permitted. Certain disclosure requirements in the new guidance will need to be applied on a retrospective basis and others on a prospective basis. While the Company is currently assessing the impact of the new guidance, it is not expected to have a material impact on the Company’s Consolidated Financial Statements. 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 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. The new guidance was effective for the Company on January 1, 2019 and did not have a material impact on the Company’s Consolidated Financial Statements. 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 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 February 2016, the FASB issued its final standard on lease accounting, ASU No. 2016-02, “Leases (Topic 842),” which superseded Topic 840, “Leases,” which was further modified in ASU No. 2018-10, “Codification Improvements to Topic 842, Leases,” ASU No. 2018-11, “Leases (Topic 842) Targeted Improvements” and ASU No. 2019-01 “Leases (Topic 842) Codification Improvements” to clarify the implementation guidance. The new accounting standard was effective for the Company beginning on January 1, 2019 and required the recognition on the balance sheet of right-of-use assets and lease liabilities for all long-term leases, including operating leases, on the balance sheet. The Company elected the optional transition method and adopted the new guidance on January 1, 2019, on a modified retrospective basis with no restatement of prior period amounts. As allowed under the new accounting standard, the Company elected to apply practical expedients to carry forward the original lease determinations, lease classifications and accounting of initial direct costs for all asset classes at the time of adoption. The Company also elected not to separate lease components from non-lease components and to exclude short-term leases from its Consolidated Balance Sheet. The Company’s adoption of the new standard resulted in the recognition of right-of-use assets of $458 and liabilities of $574, with no material cumulative effect adjustment to equity as of the date of adoption. In connection with the adoption of this guidance, as required, the Company reclassified certain restructuring reserves incurred in connection with the Global Growth and Efficiency Program (see Note 4, Restructuring and Related Implementation Charges for additional information) and deferred rent liabilities as reductions to lease assets. Adoption of the new standard did not have a material impact on the Company’s Consolidated Statements of Income or Cash Flows. See Note 13, Leases for additional information.
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Restructuring and Related Implementation Charges (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring and Related Costs | For the three and six months ended June 30, 2019 and 2018, 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 $1,793 ($1,331 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 tables summarize the activity for the restructuring and related implementation charges discussed above and the related accruals:
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory, Net, Items Net of Reserve Alternative [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories By Major Class | Inventories by major class are as follows:
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Earnings Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | For the three months ended June 30, 2019 and 2018, earnings per share were as follows:
For the six months ended June 30, 2019 and 2018, earnings per share were as follows:
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Other Comprehensive Income (Loss) (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 June 30, 2019 and 2018 were as follows:
(1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 8, Retirement Plans and Other Retiree Benefits for additional details. (2) These (gains) losses are reclassified into Cost of sales. See Note 12, Fair Value Measurements and Financial Instruments for additional details. Additions to and reclassifications out of Accumulated other comprehensive income (loss) attributable to the Company for the six months ended June 30, 2019 and 2018 were as follows:
(1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 8, Retirement Plans and Other Retiree Benefits for additional details. (2) These (gains) losses are reclassified into Cost of sales. See Note 12, Fair Value Measurements and Financial Instruments for additional details.
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Retirement Plans and Other Retiree Benefits (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components Of Net Periodic Benefit Cost | Components of Net periodic benefit cost for the three and six months ended June 30, 2019 and 2018 were as follows:
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Segment Information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 were as follows:
|
Fair Value Measurements and Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of derivative instruments | The following table summarizes the fair value of the Company’s derivative instruments and other financial instruments which are carried at fair value in the Company’s Consolidated Balance Sheets at June 30, 2019 and December 31, 2018:
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Schedule of hedged item and cumulative adjustment to carrying amount | The following amounts were recorded on the Condensed Consolidated Balance Sheet related to cumulative basis adjustment for fair value hedges as of:
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Schedule of notional values | The following tables present the notional values as of:
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Schedule of gains (losses) recognized in Statements of Income | The following tables present the location and amount of gains (losses) recognized on the Company’s Condensed Consolidated Statements of Income:
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Schedule of gains (losses) included in Other Comprehensive Income | The following tables present the location and amount of unrealized gains (losses) included in OCI:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Right-of-use Assets and Liabilities for Operating Leases | As of June 30, 2019, the Company’s right-of use assets and liabilities for operating leases were as follows:
|
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Schedule of Minimum Lease Commitments Under Noncancellable Operating Leases | Lease commitments under noncancellable operating leases were as follows:
(1) As of June 30, 2019, $95 represents the lease commitments for the six months remaining until December 31, 2019.
|
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Schedule of Components of Operating Lease Expense | The components of the Company’s operating lease cost for the three and six months ended June 30, 2019 were as follows:
|
Recent Accounting Pronouncements (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Jan. 01, 2019 |
---|---|---|
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease, right-of-use assets | $ 548 | |
Operating lease, liability | $ 683 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease, right-of-use assets | $ 458 | |
Operating lease, liability | $ 574 |
Restructuring and Related Implementation Charges - Summary of Restructuring Charges, Cumulative to Date (Details) - Global Growth and Efficiency Program $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | $ 1,793 |
Aftertax charges related to the Restructuring Program to date | 1,331 |
Employee-Related Costs | |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | 695 |
Incremental Depreciation | |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | 102 |
Asset Impairments | |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | 58 |
Other | |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | $ 938 |
Inventories (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Inventory, Net, Items Net of Reserve Alternative [Abstract] | ||
Raw materials and supplies | $ 258 | $ 253 |
Work-in-process | 42 | 37 |
Finished goods | 1,022 | 960 |
Total Inventories | $ 1,322 | $ 1,250 |
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Net income attributable to Colgate-Palmolive Company | ||||
Basic EPS | $ 586 | $ 637 | $ 1,146 | $ 1,271 |
Diluted EPS | $ 586 | $ 637 | $ 1,146 | $ 1,271 |
Shares | ||||
Basic EPS (in shares) | 859,400,000 | 871,700,000 | 860,700,000 | 873,500,000 |
Stock options and restricted stock units (in shares) | 2,500,000 | 2,300,000 | 2,000,000.0 | 3,500,000 |
Diluted EPS (in shares) | 861,900,000 | 874,000,000.0 | 862,700,000 | 877,000,000.0 |
Per Share | ||||
Basic EPS (in dollars per share) | $ 0.68 | $ 0.73 | $ 1.33 | $ 1.46 |
Diluted EPS (in dollars per share) | $ 0.68 | $ 0.73 | $ 1.33 | $ 1.45 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 18,334,488 | 16,303,599 | 21,751,174 | 16,284,602 |
Retirement Plans and Other Retiree Benefits (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Other Retiree Benefits | ||||
Components of net periodic benefit cost | ||||
Service cost | $ 3 | $ 4 | $ 7 | $ 8 |
Interest cost | 9 | 9 | 20 | 19 |
Expected return on plan assets | 0 | 0 | (1) | 0 |
Amortization of actuarial loss (gain) | 3 | 5 | 5 | 9 |
Net periodic benefit cost | 15 | 18 | 31 | 36 |
United States | Pension Benefits | ||||
Components of net periodic benefit cost | ||||
Service cost | 0 | 1 | 0 | 1 |
Interest cost | 23 | 22 | 46 | 43 |
Expected return on plan assets | (24) | (29) | (49) | (58) |
Amortization of actuarial loss (gain) | 12 | 11 | 25 | 23 |
Net periodic benefit cost | 11 | 5 | 22 | 9 |
Voluntary benefit plan contribution | 102 | 0 | ||
International | Pension Benefits | ||||
Components of net periodic benefit cost | ||||
Service cost | 3 | 3 | 7 | 7 |
Interest cost | 5 | 5 | 10 | 11 |
Expected return on plan assets | (4) | (5) | (9) | (11) |
Amortization of actuarial loss (gain) | 3 | 2 | 5 | 4 |
Net periodic benefit cost | $ 7 | $ 5 | $ 13 | $ 11 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2018 |
|
Income Tax Disclosure [Abstract] | ||
Charge for U.S. tax reform | $ 275 | |
Charge for U.S. tax reform | $ 80 |
Contingencies (Details) $ in Millions |
1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2015
appeal
|
Dec. 31, 2014
USD ($)
company
|
Jun. 30, 2019
USD ($)
case
|
Jun. 30, 2019
USD ($)
case
country_and_territory
|
Apr. 30, 2019
USD ($)
|
Mar. 31, 2019
case
|
Dec. 31, 2018
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 | $ 158.0 | $ 158.0 | ||||||
Loss contingency, number of cases on appeal | case | 1 | |||||||
Loss contingency, number of appeals lost (in appeals) | appeal | 1 | |||||||
Brazilian internal revenue authority, matter 2 | $ 66.0 | $ 66.0 | ||||||
Number of consumer goods companies | company | 13 | |||||||
Fine imposed french competition authority | $ 57.0 | |||||||
Fine imposed french competition authority - as a result of Sanex acquisition | $ 25.0 | |||||||
Fine imposed by greek competition authority | $ 10.5 | $ 11.0 | ||||||
Loss contingency, pending claims, number (in cases) | case | 237 | 237 | 229 | 239 | ||||
Loss contingency, new claims filed, number (in cases) | case | 25 | 62 | ||||||
Loss contingency, claims dismissed or settled, number (in cases) | case | 17 | 64 | ||||||
Minimum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Loss contingency, possible loss | $ 0.0 | $ 0.0 | ||||||
Maximum | ||||||||
Loss Contingencies [Line Items] | ||||||||
Loss contingency, possible loss | $ 225.0 | $ 225.0 |
Segment Information - Narrative (Details) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2018
USD ($)
|
Jun. 30, 2019
USD ($)
segment
|
Jun. 30, 2018
USD ($)
|
|
Segment Reporting Information [Line Items] | ||||
Number of product segments (in segments) | 2 | |||
Number of reportable segments (in segments) | 5 | |||
Number of operating segments (in segments) | 5 | |||
Sales Revenue, Net | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of consolidated Net sales represented by sales outside US | 70.00% | 70.00% | ||
Percentage of consolidated Net sales coming from emerging markets | 50.00% | 50.00% | ||
Global Growth and Efficiency Program | ||||
Segment Reporting Information [Line Items] | ||||
Total Global Growth and Efficiency Program charges, pretax | $ | $ 42 | $ 61 | $ 71 | $ 89 |
Global Growth and Efficiency Program | Corporate | Included in Operating profit (loss) | ||||
Segment Reporting Information [Line Items] | ||||
Total Global Growth and Efficiency Program charges, pretax | $ | $ 40 | $ 58 | $ 68 | $ 82 |
Segment Information - Schedule of Segment Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Segment Reporting Information [Line Items] | ||||
Total Net sales | $ 3,866 | $ 3,886 | $ 7,750 | $ 7,888 |
Total Operating profit | 888 | 946 | 1,767 | 1,929 |
Operating Segments | Oral, Personal and Home Care | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | 3,253 | 3,294 | 6,537 | 6,712 |
Total Operating profit | 874 | 927 | 1,741 | 1,895 |
Operating Segments | Oral, Personal and Home Care | North America | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | 846 | 824 | 1,699 | 1,651 |
Total Operating profit | 254 | 264 | 503 | 521 |
Operating Segments | Oral, Personal and Home Care | Latin America | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | 929 | 933 | 1,818 | 1,862 |
Total Operating profit | 251 | 262 | 483 | 535 |
Operating Segments | Oral, Personal and Home Care | Europe | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | 588 | 620 | 1,190 | 1,268 |
Total Operating profit | 148 | 156 | 299 | 318 |
Operating Segments | Oral, Personal and Home Care | Asia Pacific | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | 646 | 674 | 1,346 | 1,433 |
Total Operating profit | 174 | 203 | 363 | 429 |
Operating Segments | Oral, Personal and Home Care | Africa/Eurasia | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | 244 | 243 | 484 | 498 |
Total Operating profit | 47 | 42 | 93 | 92 |
Operating Segments | Pet Nutrition | ||||
Segment Reporting Information [Line Items] | ||||
Total Net sales | 613 | 592 | 1,213 | 1,176 |
Total Operating profit | 167 | 165 | 331 | 329 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Total Operating profit | $ (153) | $ (146) | $ (305) | $ (295) |
Product Concentration Risk | Sales Revenue, Net | ||||
Segment Reporting Information [Line Items] | ||||
Percent of net sales | 100.00% | 100.00% | 100.00% | 100.00% |
Product Concentration Risk | Oral Care | Sales Revenue, Net | ||||
Segment Reporting Information [Line Items] | ||||
Percent of net sales | 45.00% | 47.00% | 47.00% | 48.00% |
Product Concentration Risk | Personal Care | Sales Revenue, Net | ||||
Segment Reporting Information [Line Items] | ||||
Percent of net sales | 21.00% | 20.00% | 19.00% | 19.00% |
Product Concentration Risk | Home Care | Sales Revenue, Net | ||||
Segment Reporting Information [Line Items] | ||||
Percent of net sales | 18.00% | 18.00% | 18.00% | 18.00% |
Product Concentration Risk | Pet Nutrition | Sales Revenue, Net | ||||
Segment Reporting Information [Line Items] | ||||
Percent of net sales | 16.00% | 15.00% | 16.00% | 15.00% |
Fair Value Measurements and Financial Instruments - Fair Value of Derivative Instruments and Other Financial Instruments (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Designated derivative instruments | ||
Derivative assets, designated | $ 13 | $ 20 |
Derivative liabilities, designated | 30 | 38 |
Other financial instruments | ||
Total other financial instruments | 66 | 10 |
Other current assets | ||
Other financial instruments | ||
Marketable securities | 66 | 10 |
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 | 9 | 20 |
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 | 4 | 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 | 0 | 1 |
Other accruals | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 11 | 8 |
Other accruals | Commodity contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 0 | 0 |
Other liabilities | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 0 | 8 |
Other liabilities | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | $ 19 | $ 21 |
Fair Value Measurements and Financial Instruments - Carrying Value and Estimated Fair Value of Long-term Debt (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Long-term Debt | ||
Debt Instrument [Line Items] | ||
Carrying amount of hedged item | $ 402 | $ 888 |
Cumulative hedging adjustment included in the carrying amount | 4 | (10) |
Carrying Value | ||
Debt Instrument [Line Items] | ||
Carrying value of long-term debt | 6,641 | 6,354 |
Fair Value, Inputs, Level 2 | ||
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt | $ 6,545 | $ 6,434 |
Fair Value Measurements and Financial Instruments - Schedule of Notional Values (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | $ 755 | $ 1,227 |
Fair Value Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 355 | 327 |
Fair Value Hedges | Foreign Currency Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Fair Value Hedges | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 400 | 900 |
Fair Value Hedges | Commodity Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Cash Flow Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 760 | 796 |
Cash Flow Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 744 | 782 |
Cash Flow Hedges | Foreign Currency Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Cash Flow Hedges | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Cash Flow Hedges | Commodity Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 16 | 14 |
Net Investment Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 2,733 | 1,878 |
Net Investment Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 544 | 482 |
Net Investment Hedges | Foreign Currency Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 2,189 | 1,396 |
Net Investment Hedges | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Net Investment Hedges | Commodity Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | $ 0 | $ 0 |
Fair Value Measurements and Financial Instruments - Schedule of Gain (Loss) on Hedges Recognized in Income (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Cost of sales | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain (loss) on hedges recognized in income | $ 1 | $ (2) | $ 5 | $ (8) |
Cost of sales | Interest Rate Swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivative instrument | 0 | 0 | 0 | 0 |
Gain (loss) on hedged items | 0 | 0 | 0 | 0 |
Cost of sales | Foreign Currency Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivative instrument | 0 | 0 | 0 | 0 |
Gain (loss) on hedged items | 0 | 0 | 0 | 0 |
Amount reclassified from OCI | 1 | 4 | ||
Cost of sales | Commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount reclassified from OCI | 0 | 1 | ||
Cost of sales | Cash Flow Hedges | Foreign Currency Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount reclassified from OCI | (2) | (8) | ||
Cost of sales | Cash Flow Hedges | Commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount reclassified from OCI | 0 | 0 | ||
Selling, general and administrative expenses | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain (loss) on hedges recognized in income | 0 | 0 | 0 | 0 |
Selling, general and administrative expenses | Interest Rate Swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivative instrument | 0 | 0 | 0 | 0 |
Gain (loss) on hedged items | 0 | 0 | 0 | 0 |
Selling, general and administrative expenses | Foreign Currency Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivative instrument | 11 | 6 | 10 | (7) |
Gain (loss) on hedged items | (11) | (6) | (10) | 7 |
Amount reclassified from OCI | 0 | 0 | ||
Selling, general and administrative expenses | Commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount reclassified from OCI | 0 | 0 | ||
Selling, general and administrative expenses | Cash Flow Hedges | Foreign Currency Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount reclassified from OCI | 0 | 0 | ||
Selling, general and administrative expenses | Cash Flow Hedges | Commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount reclassified from OCI | 0 | 0 | ||
Interest (income) expense, net | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Total gain (loss) on hedges recognized in income | 0 | 0 | 0 | 0 |
Interest (income) expense, net | Interest Rate Swaps | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivative instrument | (10) | (1) | (13) | (11) |
Gain (loss) on hedged items | 10 | 1 | 13 | 11 |
Interest (income) expense, net | Foreign Currency Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Gain (loss) on derivative instrument | 0 | 0 | 0 | 0 |
Gain (loss) on hedged items | 0 | 0 | 0 | 0 |
Amount reclassified from OCI | 0 | 0 | ||
Interest (income) expense, net | Commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount reclassified from OCI | $ 0 | $ 0 | ||
Interest (income) expense, net | Cash Flow Hedges | Foreign Currency Contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount reclassified from OCI | 0 | 0 | ||
Interest (income) expense, net | Cash Flow Hedges | Commodity contracts | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount reclassified from OCI | $ 0 | $ 0 |
Fair Value Measurements and Financial Instruments - Schedule of Gain (Loss) Included in OCI (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Cash flow hedges [Abstract] | ||||
Gain (loss) recognized in OCI | $ (1) | $ (3) | ||
Gain (loss) recognized in OCI | $ 16 | $ 8 | ||
Foreign Currency Contracts | ||||
Cash flow hedges [Abstract] | ||||
Gain (loss) recognized in OCI | (2) | (5) | ||
Gain (loss) recognized in OCI | 14 | 6 | ||
Net investment hedges [Abstract] | ||||
Gain (loss) on instruments | (7) | (1) | ||
Gain (loss) on instruments | 43 | 25 | ||
Gain (loss) on hedged items | 7 | 1 | ||
Gain (loss) on hedged items | (41) | (23) | ||
Commodity Contracts | ||||
Cash flow hedges [Abstract] | ||||
Gain (loss) recognized in OCI | 1 | 2 | ||
Gain (loss) recognized in OCI | 0 | 0 | ||
Foreign Currency Debt | ||||
Net investment hedges [Abstract] | ||||
Gain (loss) on instruments | (24) | 5 | ||
Gain (loss) on instruments | 78 | 59 | ||
Gain (loss) on hedged items | $ 24 | $ (5) | ||
Gain (loss) on hedged items | $ (78) | $ (59) |
Leases - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jan. 01, 2019 |
|
Lessee, Lease, Description [Line Items] | ||
Operating lease, right-of-use assets | $ 548 | |
Operating lease, liability | 683 | |
Operating cash flows paid for amounts included in the measurement of lease liabilities | 102 | |
Lease assets obtained in exchange for lease liabilities | $ 209 | |
Operating lease, weighted-average remaining lease term | 8 years | |
Operating lease, weighted-average discount rate | 4.00% | |
Accounting Standards Update 2016-02 | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease, right-of-use assets | $ 458 | |
Operating lease, liability | $ 574 |
Leases - Balance Sheet (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
---|---|
Leases [Abstract] | |
Other assets | $ 548 |
Other accruals | 153 |
Other liabilities | 530 |
Total operating lease liabilities | $ 683 |
Leases - Schedule of Minimum Lease Commitments (Details) - USD ($) $ in Millions |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
As of June 30, 2019 | ||
2019 | $ 95 | |
2020 | 155 | |
2021 | 119 | |
2022 | 96 | |
2023 | 60 | |
Thereafter | 275 | |
Total lease commitments | 800 | |
Less: Interest | (117) | |
Present value of lease liabilities | $ 683 | |
As of December 31, 2018 | ||
2019 | $ 193 | |
2020 | 165 | |
2021 | 123 | |
2022 | 102 | |
2023 | 51 | |
Thereafter | 32 | |
Total lease commitments | $ 666 |
Leases - Schedule of Lease Cost (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2019 |
|
Leases [Abstract] | ||
Operating lease cost | $ 38 | $ 83 |
Short-term lease cost | 0 | 2 |
Variable lease cost | 6 | 16 |
Sublease income | 0 | 0 |
Total lease cost | $ 44 | $ 101 |
Subsequent Events (Details) - Subsequent Event - Laboratoires Filorga Cosmétiques € in Millions, $ in Millions |
Jul. 11, 2019
USD ($)
|
Jul. 11, 2019
EUR (€)
|
---|---|---|
Subsequent Event [Line Items] | ||
Payments to acquire business | $ 1,690 | € 1,495.5 |
Annual interest rate | 2.00% | 2.00% |
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