UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________

FORM 10-Q

________________________

 (Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from________ to________ .

Commission File Number: 1-644

COLGATE-PALMOLIVE COMPANY

(Exact name of registrant as specified in its charter)

Delaware	13-1815595
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

	300 Park Avenue
	New York,	New York	10022
(Address of principal executive offices)			(Zip Code)

(212) 310-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value	CL	New York Stock Exchange
0.500% Notes due 2026	CL26	New York Stock Exchange
0.300% Notes due 2029	CL29	New York Stock Exchange
1.375% Notes due 2034	CL34	New York Stock Exchange
0.875% Notes due 2039	CL39	New York Stock Exchange

NO CHANGES

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes ☒  No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

Class	Shares Outstanding	Date
Common stock, $1.00 par value	829,568,199	March 31, 2023

PART I.    FINANCIAL INFORMATION

COLGATE-PALMOLIVE COMPANY

Condensed Consolidated Statements of Income

(Dollars in Millions Except Per Share Amounts)

(Unaudited)

	Three Months Ended
	March 31,
	2023		2022
Net sales	$	4,770	$	4,399
Cost of sales	2,058		1,827
Gross profit	2,712		2,572
Selling, general and administrative expenses	1,758		1,641
Other (income) expense, net	45		71
Operating profit	909		860
Non-service related postretirement costs	294		38
Interest (income) expense, net	54		27
Income before income taxes	561		795
Provision for income taxes	147		192
Net income including noncontrolling interests	414		603
Less: Net income attributable to noncontrolling interests	42		44
Net income attributable to Colgate-Palmolive Company	$	372	$	559
Earnings per common share, basic	$	0.45	$	0.67
Earnings per common share, diluted	$	0.45	$	0.66

See Notes to Condensed Consolidated Financial Statements.

2

COLGATE-PALMOLIVE COMPANY

Condensed Consolidated Statements of Comprehensive Income

(Dollars in Millions)

(Unaudited)

	Three Months Ended
	March 31,
	2023		2022
Net income including noncontrolling interests	$	414	$	603
Other comprehensive income (loss), net of tax:
Cumulative translation adjustments	43		80
Retirement plans and other retiree benefit adjustments	7		14
Gains (losses) on cash flow hedges	6		41
Total Other comprehensive income (loss), net of tax	56		135
Total Comprehensive income including noncontrolling interests	470		738
Less: Net income attributable to noncontrolling interests	42		44
Less: Cumulative translation adjustments attributable to noncontrolling interests	(16)		(2)
Total Comprehensive income attributable to noncontrolling interests	26		42
Total Comprehensive income attributable to Colgate-Palmolive Company	$	444	$	696

See Notes to Condensed Consolidated Financial Statements.

3

COLGATE-PALMOLIVE COMPANY

Condensed Consolidated Balance Sheets

(Dollars in Millions)

(Unaudited)

	March 31, 2023		December 31, 2022
Assets
Current Assets
Cash and cash equivalents	$	867	$	775
Receivables (net of allowances of $81 and $70, respectively)	1,590		1,504
Inventories	2,110		2,074
Other current assets	899		760
Total current assets	5,466		5,113
Property, plant and equipment:
Cost	9,815		9,583
Less: Accumulated depreciation	(5,452)		(5,276)
	4,363		4,307
Goodwill	3,375		3,352
Other intangible assets, net	1,918		1,920
Deferred income taxes	179		135
Other assets	872		904
Total assets	$	16,173	$	15,731
Liabilities and Shareholders’ Equity
Current Liabilities
Notes and loans payable	$	22	$	11
Current portion of long-term debt	15		14
Accounts payable	1,609		1,551
Accrued income taxes	297		317
Other accruals	2,498		2,111
Total current liabilities	4,441		4,004
Long-term debt	8,870		8,741
Deferred income taxes	421		383
Other liabilities	2,016		1,797
Total liabilities	15,748		14,925
Shareholders’ Equity
Common stock, $1 par value (2,000,000,000 shares authorized, 1,465,706,360 shares issued)	1,466		1,466
Additional paid-in capital	3,603		3,546
Retained earnings	24,153		24,573
Accumulated other comprehensive income (loss)	(3,983)		(4,055)
Unearned compensation	—		(1)
Treasury stock, at cost	(25,245)		(25,128)
Total Colgate-Palmolive Company shareholders’ equity	(6)		401
Noncontrolling interests	431		405
Total equity	425		806
Total liabilities and equity	$	16,173	$	15,731

See Notes to Condensed Consolidated Financial Statements.

4

COLGATE-PALMOLIVE COMPANY

Condensed Consolidated Statements of Cash Flows

(Dollars in Millions)

(Unaudited)

	Three Months Ended
	March 31,
	2023		2022
Operating Activities
Net income including noncontrolling interests	$	414	$	603
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operations:
Depreciation and amortization	128		138
ERISA litigation matter	267		—
Restructuring and termination benefits, net of cash	(7)		81
Stock-based compensation expense	14		29
Deferred income taxes	(20)		(7)
Cash effects of changes in:
Receivables	(57)		(197)
Inventories	(24)		(215)
Accounts payable and other accruals	(2)		(28)
Other non-current assets and liabilities	22		(18)
Net cash provided by (used in) operations	735		386
Investing Activities
Capital expenditures	(163)		(122)
Purchases of marketable securities and investments	(112)		(36)
Proceeds from sale of marketable securities and investments	14		14
Other investing activities	(3)		3
Net cash provided by (used in) investing activities	(264)		(141)
Financing Activities
Short-term borrowing (repayment) less than 90 days, net	(927)		413
Principal payments of debt	(500)		—
Proceeds from issuance of debt	1,495		5
Dividends paid	(390)		(378)
Purchases of treasury shares	(180)		(410)
Proceeds from exercise of stock options	122		171
Other financing activities	5		(5)
Net cash provided by (used in) financing activities	(375)		(204)
Effect of exchange rate changes on Cash and cash equivalents	(4)		4
Net increase (decrease) in Cash and cash equivalents	92		45
Cash and cash equivalents at beginning of the period	775		832
Cash and cash equivalents at end of the period	$	867	$	877
Supplemental Cash Flow Information
Income taxes paid	$	171	$	155

See Notes to Condensed Consolidated Financial Statements.

5

COLGATE-PALMOLIVE COMPANY

Condensed Consolidated Statements of Changes in Shareholders’ Equity

(Dollars in Millions)

(Unaudited)

Three Months Ended March 31, 2023
	Colgate-Palmolive Company Shareholders’ Equity
	Common Stock		Additional Paid-in Capital		Unearned Compensation		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)(1)		Noncontrolling Interests
Balance, December 31, 2022	$	1,466	$	3,546	$	(1)	$	(25,128)	$	24,573	$	(4,055)	$	405
Net income	—		—		—		—		372		—		42
Other comprehensive income (loss), net of tax	—		—		—		—		—		72		(16)
Dividends ($0.95 per share) *	—		—		—		—		(792)		—		—
Stock-based compensation expense	—		14		—		—		—		—		—
Shares issued for stock options	—		54		—		50		—		—		—
Shares issued for restricted stock units	—		(13)		—		13		—		—		—
Treasury stock acquired	—		—		—		(180)		—		—		—
Other	—		2		1		—		—		—		—
Balance, March 31, 2023	$	1,466	$	3,603	$	—	$	(25,245)	$	24,153	$	(3,983)	$	431

Three Months Ended March 31, 2022
	Colgate-Palmolive Company Shareholders’ Equity
	Common Stock		Additional Paid-in Capital		Unearned Compensation		Treasury Stock		Retained Earnings		Accumulated Other Comprehensive Income (Loss)(1)		Noncontrolling Interests
Balance December 31, 2021	$	1,466	$	3,269	$	(1)	$	(24,089)	$	24,350	$	(4,386)	$	362
Net income	—		—		—		—		559		—		44
Other comprehensive income (loss), net of tax	—		—		—		—		—		137		(2)
Dividends ($0.92 per share) *	—		—		—		—		(760)		—		—
Stock-based compensation expense	—		29		—		—		—		—		—
Shares issued for stock options	—		77		—		77		—		—		—
Shares issued for restricted stock units	—		(22)		—		22		—		—		—
Treasury stock acquired	—		—		—		(410)		—		—		—
Other	—		2		1		(1)		—		1		3
Balance, March 31, 2022	$	1,466	$	3,355	$	—	$	(24,401)	$	24,149	$	(4,248)	$	407

(1) Accumulated other comprehensive income (loss) includes cumulative translation losses of $3,431 at March 31, 2023 ($3,269 at March 31, 2022) and $3,491 at December 31, 2022 ($3,349 at December 31, 2021), respectively, and unrecognized retirement plan and other retiree benefits costs of $624 at March 31, 2023 ($1,030 at March 31, 2022) and $631 at December 31, 2022 ($1,044 at December 31, 2021), respectively.

* Two dividends were declared in each of the first quarters of 2023 and 2022.

See Notes to Condensed Consolidated Financial Statements.

6

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

1.    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, 2022, filed with the Securities and Exchange Commission (the “SEC”).

2.     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.

3.    Recent Accounting Pronouncements

In March 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-01, “Leases (Topic 842): Common Control Arrangements.” This ASU clarified the accounting for leasehold improvements for leases under common control. The guidance is effective for the Company beginning on January 1, 2024 and is not expected to have a material impact on the Company's Consolidated Financial Statements.

In September 2022, the FASB issued ASU No. 2022-04, “Liabilities-Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations.” This ASU requires a buyer that uses supplier finance programs to make annual disclosures about the programs’ key terms, the balance sheet presentation of related amounts, the confirmed amount outstanding at the end of the period and associated rollforward information. The guidance was effective for the Company beginning on January 1, 2023, except for the rollforward information, which is effective beginning on January 1, 2024. This guidance has not had and is not expected to have a material impact on the Company’s Consolidated Financial Statements. See Note 13, Supplier Finance Programs for additional information.

In March 2022, the FASB issued ASU No. 2022-02, “Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” This ASU eliminates the accounting guidance for troubled debt restructurings by creditors while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors made to borrowers experiencing financial difficulty. The amendments also require disclosure of current-period gross write-offs by year of origination for financing receivables. This guidance was effective for the Company beginning on January 1, 2023 and did not have a material impact on the Company’s Consolidated Financial Statements.

In March 2022, the FASB issued ASU No. 2022-01, “Derivatives and Hedging (Topic 815): Fair Value Hedging-Portfolio Layer Method.” This ASU clarifies the accounting and promotes consistency in reporting for hedges where the portfolio layer method is applied. This guidance was effective for the Company beginning on January 1, 2023 and did not have an impact on the Company’s Consolidated Financial Statements.

In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This ASU requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606).” This guidance was effective for the Company beginning on January 1, 2023 and did not have an impact on the Company’s Consolidated Financial Statements.

In March 2020, the FASB issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,” which provides optional expedients and exceptions for applying generally accepted accounting principles (“GAAP”) to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848): Scope,” which clarified that certain optional expedients and

7

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

exceptions in Topic 848 apply to derivatives that are affected by the discounting transition due to reference rate reform. In December 2022, the FASB issued ASU No. 2022-06,“Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848,” which defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief under Topic 848. The Company has completed its evaluation of significant contracts under this ASU. Certain of the reviewed contracts have been modified and the remaining reviewed contracts will be modified, where necessary, to apply a new reference rate, primarily the Secured Overnight Financing Rate (SOFR). Accordingly, the guidance has not had and is not expected to have a material impact on the Company’s Consolidated Financial Statements.

8

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

4. Acquisitions

Red Collar Pet Foods

On September 30, 2022, the Company acquired a business that operates three dry pet food manufacturing plants in the United States from Red Collar Pet Foods Holdings, Inc. and Red Collar Pet Foods Holdings, L.P. (collectively, “Red Collar Pet Foods”) for cash consideration of $719 to further support the global growth of its Hill’s Pet Nutrition business. The acquisition was financed with a combination of debt and cash and accounted for as a business combination in accordance with ASC 805.

During the fourth quarter of 2022, the Company finalized its purchase price allocation and the final purchase price of $719 was allocated to the net assets acquired based on their respective estimated fair values as follows:

Inventories	$	33
Property, plant and equipment	362
Goodwill	418
Current liabilities	(5)
Intangible liability	(16)
Deferred income taxes	(73)
Fair value of net assets acquired	$	719

Goodwill of $418 was allocated to the Pet Nutrition segment. Goodwill will not be deductible for tax purposes.

Pro forma results of operations have not been presented as the impact on the Company’s Consolidated Financial Statements is not material.

Nutriamo S.r.l.

On April 28, 2022, the Company acquired a business that operates a pet food manufacturing plant from Nutriamo S.r.l., a canned pet food manufacturer based in Italy, which gives the Company additional capacity for the Hill’s wet pet nutrition diets, particularly in Europe. This acquisition was accounted for as a business combination in accordance with ASC 805. The impact of this acquisition on the Company’s Consolidated Financial Statements was not material.

9

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

5.    Restructuring and Related Implementation Charges

On January 27, 2022, the Company’s Board of Directors (the “Board”) approved a targeted productivity program (the “2022 Global Productivity Initiative”). The program is intended to reallocate resources towards the Company’s strategic priorities and faster growth businesses, drive efficiencies in the Company’s operations and streamline the Company’s supply chain to reduce structural costs.

Implementation of the 2022 Global Productivity Initiative, which is expected to be substantially completed by mid-year 2024, is estimated to result in cumulative pretax charges, once all phases are approved and implemented, in the range of $200 to $240 ($170 to $200 aftertax), which is currently estimated to be comprised of the following: employee-related costs, including severance, pension and other termination benefits (80%); asset-related costs, primarily accelerated depreciation and asset write-downs (10%); and other charges (10%), which include contract termination costs, consisting primarily of implementation-related charges resulting directly from exit activities and the implementation of new strategies. It is estimated that approximately 80% to 90% of the charges will result in cash expenditures.

It is expected that the cumulative pretax charges, once all projects are approved and implemented, will relate to initiatives undertaken in North America (5%), Latin America (10%), Europe (45%), Asia Pacific (5%), Africa/Eurasia (10%), Hill’s Pet Nutrition (10%) and Corporate (15%).

For the three months ended March 31, 2023, charges resulting from the 2022 Global Productivity Initiative were $6 pretax ($5 aftertax). For the three months ended March 31, 2022, charges resulting from the 2022 Global Productivity Initiative were $82 pretax ($65 aftertax).

	Three Months Ended March 31,
	2023		2022
Other (income) expense, net	$	5	$	63
Non-service related postretirement costs	1		19
Total 2022 Global Productivity Initiative charges, pretax	$	6	$	82
Total 2022 Global Productivity Initiative charges, aftertax	$	5	$	65

Restructuring and related implementation charges in the preceding table were 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 2022 Global Productivity Initiative relate to initiatives undertaken by the following reportable operating segments:

	Three Months Ended March 31,				Program-to-date Accumulated Charges
	2023		2022
North America	7	%	13	%	10	%
Latin America	11	%	15	%	18	%
Europe	15	%	18	%	18	%
Asia Pacific	6	%	11	%	9	%
Africa/Eurasia	13	%	4	%	11	%
Hill's Pet Nutrition	16	%	9	%	12	%
Corporate	32	%	30	%	22	%
Total	100	%	100	%	100	%

10

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

Since the inception of the 2022 Global Productivity Initiative, the Company has incurred cumulative pretax charge of $116 ($92 aftertax) in connection with the implementation of various projects as follows:

	Cumulative Charges
	as of March 31, 2023
Employee-Related Costs	$	108
Incremental Depreciation	—
Asset Impairments	1
Other	7
Total	$	116

The following table summarizes the activity for the restructuring and related implementation charges discussed above and the related accruals:

	Three Months Ended March 31, 2023
	Employee-Related Costs		Incremental Depreciation		Asset Impairments		Other		Total
Balance at December 31, 2022	$	30	$	—	$	1	$	3	$	34
Charges	6		—		—		—		6
Cash Payments	(13)		—		—		(1)		(14)
Charges against assets	(1)		—		—		—		(1)
Foreign exchange	—		—		—		—		—
Balance at March 31, 2023	$	22	$	—	$	1	$	2	$	25

Employee-Related Costs primarily include severance and other termination benefits and are calculated based on long-standing benefit practices, written severance policies, local statutory requirements and, in certain cases, voluntary termination arrangements. Employee-Related Costs also include pension enhancements of $1 for the three months ended March 31, 2023, 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 liabilities.

6.    Inventories

Inventories by major class are as follows:

	March 31, 2023		December 31, 2022
Raw materials and supplies	$	653	$	666
Work-in-process	55		48
Finished goods	1,536		1,508
Total Inventories, net	$	2,244	$	2,222
Non-current inventory, net	$	(134)	$	(148)
Current Inventories, net	$	2,110	$	2,074

11

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

7.    Earnings Per Share

For the three months ended March 31, 2023 and 2022, earnings per share were as follows:

	Three Months Ended
	March 31, 2023					March 31, 2022
	Net income attributable to Colgate-Palmolive Company		Shares (millions)	Per Share		Net income attributable to Colgate-Palmolive Company		Shares (millions)	Per Share
Basic EPS	$	372	831.4	$	0.45	$	559	840.6	$	0.67
Stock options and restricted stock units			1.6					3.1
Diluted EPS	$	372	833.0	$	0.45	$	559	843.7	$	0.66

For the three months ended March 31, 2023 and 2022, the average number of stock options and restricted stock units that were anti-dilutive and not included in diluted earnings per share calculations were 13,671,978 and 4,107,848, respectively.

12

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

8.    Other Comprehensive Income (Loss)

Additions to and reclassifications out of Accumulated other comprehensive income (loss) attributable to the Company for the three months ended March 31, 2023 and 2022 were as follows:

	2023				2022
	Pretax		Net of Tax		Pretax		Net of Tax
Cumulative translation adjustments	$	49	$	59	$	96	$	82
Retirement plans and other retiree benefits:
Net actuarial gain (loss) and prior service costs arising during the period	1		1		—		—
Amortization of net actuarial loss, transition and prior service costs (1)	8		6		18		14
Retirement plans and other retiree benefit adjustments	9		7		18		14
Cash flow hedges:
Unrealized gains (losses) on cash flow hedges	17		13		58		45
Reclassification of (gains) losses into net earnings on cash flow hedges (2)	(9)		(7)		(5)		(4)
Gains (losses) on cash flow hedges	8		6		53		41
Total Other comprehensive income (loss)	$	66	$	72	$	167	$	137

(1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 9, Retirement Plans and Other Retiree Benefits for additional details.

(2) These (gains) losses are reclassified into Cost of sales. See Note 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.

9.    Retirement Plans and Other Retiree Benefits

Components of Net periodic benefit cost for the three months ended March 31, 2023 and 2022 were as follows:

	Three Months Ended March 31,
	Pension Benefits								Other Retiree Benefits
	United States				International
	2023		2022		2023		2022		2023		2022
Service cost	$	—	$	—	$	3	$	5	$	2	$	5
Interest cost	23		16		8		6		11		10
Expected return on plan assets	(20)		(25)		(4)		(6)		—		—
Amortization of actuarial loss (gain)	11		11		1		2		(4)		5
Net periodic benefit cost	$	14	$	2	$	8	$	7	$	9	$	20
Other postretirement charges	1		9		—		2		—		8
ERISA litigation matter	267		—		—		—		—		—
Total pension cost	$	282	$	11	$	8	$	9	$	9	$	28

Other postretirement charges for the three months ended March 31, 2023 and 2022 included pension and other charges amounting to $1 and $19, respectively, incurred pursuant to the 2022 Global Productivity Initiative.

For the three months ended March 31, 2023 and 2022, the Company made no voluntary contributions to its U.S. postretirement plans.

13

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

In the first quarter of 2023, the Company recorded a charge of $267 as a result of a decision of the United States Court of Appeals for the Second Circuit (the “Second Circuit”) affirming a grant of summary judgment to the plaintiffs in a lawsuit under the Employee Retirement Income Security Act seeking the recalculation of benefits and other relief associated with a 2005 residual annuity amendment to the Colgate-Palmolive Company Employees’ Retirement Income Plan (the “Retirement Plan”). The decision will result in an increase in the obligations of the Retirement Plan, which based on the current funded status of the Retirement Plan will require no immediate cash contribution by the Company. The Company intends to seek further review by the United States Supreme Court. See Note 10, Contingencies for additional information.

In the third quarter of 2022, the Company amended its domestic postretirement plan to limit eligibility for certain existing employees and change the way medical coverage and subsidies are delivered for certain current and future retirees. As required, the Company remeasured the obligation for the domestic postretirement plan, which resulted in the reduction of the projected benefit obligation and a corresponding actuarial gain of $398. The reduction of the projected benefit obligation and actuarial gain were primarily due to an increase in the discount rate since December 31, 2021 and the impact of the plan amendment. The actuarial gain was recorded in Accumulated other comprehensive income and will be amortized over future periods.

10.    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 $250 (based on current exchange rates). The estimates included in this amount are based on the Company’s analysis of currently available information and, as new information is obtained, these estimates may change. Due to the inherent subjectivity of the assessments and the unpredictability of outcomes of legal proceedings, any amounts accrued or included in this aggregate range 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 $123. 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

14

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

deducted from the authority’s original assessments. The Company has been disputing the disallowances by appealing the assessments since October 2001.

In each of September 2015, February 2017, September 2018, April 2019 and August 2020, the Company lost an administrative appeal and subsequently challenged these assessments in the Brazilian federal courts. Currently, there are three lawsuits pending in the Lower Federal Court, one case has progressed to the Federal Court of Appeals, and another case is expected to be remitted to the Federal Court of Appeals. 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 $54, at the current exchange rate, based on a claim that certain purchases of U.S. Treasury bills by the subsidiary and their subsequent disposition during the period 2000 to 2001 were subject to a tax on foreign exchange transactions. The Company had been disputing the assessment within the internal revenue authority’s administrative appeals process. However, in November 2015, the Superior Chamber of Administrative Tax Appeals denied the Company’s final administrative appeal, and the Company has filed a lawsuit in the Brazilian federal court. In the event the Company is unsuccessful in this lawsuit, further appeals are available within the Brazilian federal courts. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the tax assessment is without merit and that the Company should ultimately prevail. The Company is challenging this assessment vigorously.

Competition Matter

Certain of the Company’s subsidiaries were historically subject to actions and, in some cases, fines, by governmental authorities in a number of countries related to alleged competition law violations. Substantially all of these matters also involved other consumer goods companies and/or retail customers. The Company’s policy is to comply with antitrust and competition laws and, if a violation of any such laws is found, to take appropriate remedial action and to cooperate fully with any related governmental inquiry. The status as of March 31, 2023 of such competition law matters pending against the Company during the three months ended March 31, 2023 is set forth below.

▪In July 2014, the Greek competition law authority issued a statement of objections alleging a restriction of parallel imports into Greece. The Company responded to this statement of objections. In July 2017, the Company received the decision from the Greek competition law authority in which the Company was fined $11. The Company appealed the decision to the Greek courts. In April 2019, the Greek courts affirmed the judgment against the Company’s Greek subsidiary, but reduced the fine to $10.5 and dismissed the case against Colgate-Palmolive Company. The Company’s Greek subsidiary and the Greek competition authority have appealed the decision to the Greek Supreme Court.

Talcum Powder Matters

The Company has been named as a defendant in civil actions alleging that certain talcum powder products that were sold prior to 1996 were contaminated with asbestos and/or caused mesothelioma and other cancers. Many 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. In the three months ended December 31, 2022, the Company lost an appeal in one case that, in the second quarter of 2019, had resulted in an adverse jury verdict

15

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

after a trial, and accrued an immaterial amount for this loss. During the three months ended March 31, 2023, the Company filed a petition with the California Supreme Court seeking to further appeal the decision. On April 12, 2023, the California Supreme Court denied the Company’s petition for review. The Company is assessing its options, including seeking further review by the United States Supreme Court. As of March 31, 2023, there were 248 individual cases pending against the Company in state and federal courts throughout the United States, as compared to 227 cases as of December 31, 2022. During the three months ended March 31, 2023, 46 new cases were filed and 25 cases were resolved by voluntary dismissal, settlement or dismissal by the court. The value of the settlements in the period presented was not material, either individually or in the aggregate, to such period’s results of operations.

A significant portion of the Company’s costs incurred in defending and resolving these claims has been, and the Company believes that a portion of the costs will continue to be, covered by insurance policies issued by several primary, excess and umbrella insurance carriers, subject to deductibles, exclusions, retentions, policy limits and insurance carrier insolvencies.

While the Company and its legal counsel believe that these cases are without merit and intend to challenge them vigorously, there can be no assurances regarding the ultimate resolution of these matters.

ERISA Matter

In June 2016, a lawsuit was filed in the United States District Court for the Southern District of New York (the “District Court”) against the Retirement Plan, the Company and certain individuals (the “Company Defendants”) claiming that residual annuity payments associated with a 2005 residual annuity amendment to the Retirement Plan were improperly calculated for certain Retirement Plan participants in violation of the Employee Retirement Income Security Act. The relief sought included recalculation of benefits, pre- and post-judgment interest and attorneys’ fees. This action was certified as a class action in July 2017. In July 2020, the Court dismissed certain claims, and in August 2020 granted the plaintiffs' motion for summary judgment on the remaining claims. In September 2020, the Company appealed to the Second Circuit. In March 2023, the Second Circuit affirmed the grant of summary judgment to the plaintiffs.

In light of the Second Circuit decision, the Company recorded a charge to earnings of $267 in the quarter ended March 31, 2023, which is comprised of the recalculation of benefits and interest. Possible additional charges associated with this matter are expected to be immaterial and, where estimable, are reflected in the range of reasonably possible losses disclosed above. The impact of the decision will result in an increase in the obligations of the Retirement Plan, which based on the current funded status of the Retirement Plan will require no immediate cash contribution by the Company. The Company intends to seek further review by the United States Supreme Court.

16

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

11.    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, 2022. Intercompany sales have been eliminated. Corporate operations include costs related to stock options and restricted stock units, research and development costs, Corporate overhead costs, restructuring and related implementation charges and gains and losses on sales of non-core product lines and assets. The Company reports these items within Corporate operations as they relate to Corporate-based responsibilities and decisions and are not included in the internal measures of segment operating performance used by the Company to measure the underlying performance of the operating segments.

Net sales by segment were as follows:

	Three Months Ended
	March 31,
	2023		2022
Net sales
Oral, Personal and Home Care
North America	$	958	$	926
Latin America	1,075		954
Europe	650		654
Asia Pacific	738		726
Africa/Eurasia	288		267
Total Oral, Personal and Home Care	3,709		3,527
Pet Nutrition	1,061		872
Total Net sales	$	4,770	$	4,399

Approximately two-thirds of the Company’s Net sales are generated from markets outside the U.S., with approximately 45% of the Company’s Net sales coming from emerging markets (which consist of Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe).

17

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

The Company’s Net sales of Oral, Personal and Home Care and Pet Nutrition products accounted for the following percentages of the Company’s Net sales:

	Three Months Ended
	March 31,
	2023		2022
Net sales
Oral Care	43	%	45	%
Personal Care	18	%	18	%
Home Care	17	%	17	%
Pet Nutrition	22	%	20	%
Total Net sales	100	%	100	%

Operating profit by segment was as follows:

	Three Months Ended
	March 31,
	2023		2022
Operating profit
Oral, Personal and Home Care
North America	$	193	$	163
Latin America	315		265
Europe	116		150
Asia Pacific	202		206
Africa/Eurasia	68		44
Total Oral, Personal and Home Care	894		828
Pet Nutrition	183		204
Corporate	(168)		(172)
Total Operating profit	$	909	$	860

Corporate Operating profit (loss) for the three months ended March 31, 2023 included product recall costs of $25 and charges resulting from the 2022 Global Productivity Initiative of $5. Corporate Operating profit (loss) for the three months ended March 31, 2022 included charges resulting from the 2022 Global Productivity Initiative of $63.

18

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

12.    Fair Value Measurements and Financial Instruments

The Company uses available market information and other valuation methodologies in assessing the fair value of financial instruments. Judgment is required in interpreting market data to develop the estimates of fair value and, accordingly, changes in assumptions or the estimation methodologies may affect the fair value estimates. The Company is exposed to the risk of credit loss in the event of nonperformance by counterparties to financial instrument contracts; however, nonperformance is considered unlikely and any nonperformance is unlikely to be material, as it is the Company’s policy to contract only with diverse, credit-worthy counterparties based upon both strong credit ratings and other credit considerations.

The Company is exposed to market risk from foreign currency exchange rates, interest rates and commodity price fluctuations. Volatility relating to these exposures is managed on a global basis by utilizing a number of techniques, including working capital management, sourcing strategies, selling price increases, selective borrowings in local currencies and entering into selective derivative instrument transactions, issued with standard features, in accordance with the Company’s treasury and risk management policies, which prohibit the use of derivatives for speculative purposes and leveraged derivatives for any purpose. It is the Company’s policy to enter into derivative instrument contracts with terms that match the underlying exposure being hedged.

The Company’s derivative instruments include interest rate swap contracts, forward-starting interest rate swaps, foreign currency contracts and commodity contracts. The Company utilizes interest rate swap contracts to manage its targeted mix of fixed and floating rate debt, and these swaps are valued using observable benchmark rates (Level 2 valuation). The Company utilizes forward-starting interest rate swaps to mitigate the risk of variability in interest rate for future debt issuances and these swaps are valued using observable benchmark rates (Level 2 valuation). The Company utilizes foreign currency contracts, including forward and swap contracts, option contracts, local currency deposits and local currency borrowings to hedge portions of its foreign currency purchases, assets and liabilities arising in the normal course of business and the net investment in certain foreign subsidiaries. These contracts are valued using observable market rates (Level 2 valuation). Commodity futures contracts are utilized to hedge the purchases of raw materials used in production. These contracts are measured using quoted commodity exchange prices (Level 1 valuation). The duration of foreign currency and commodity contracts generally does not exceed 12 months.

19

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

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 Condensed Consolidated Balance Sheets at March 31, 2023 and December 31, 2022:

	Assets					Liabilities
	Account	Fair Value				Account	Fair Value
Designated derivative instruments		March 31, 2023		December 31, 2022			March 31, 2023		December 31, 2022
Foreign currency contracts	Other current assets	$	19	$	19	Other accruals	$	18	$	15
Commodity contracts	Other current assets	—		4		Other accruals	—		—
Total designated		$	19	$	23		$	18	$	15
Other financial instruments
Marketable securities	Other current assets	$	276	$	175
Total other financial instruments		$	276	$	175

The carrying amount of cash, cash equivalents, marketable securities, accounts receivable and short-term debt approximated fair value as of March 31, 2023 and December 31, 2022. The estimated fair value of the Company’s long-term debt, including the current portion, as of March 31, 2023 and December 31, 2022, was $8,466 and $8,184, respectively, and the related carrying value was $8,885 and $8,755, respectively. In August 2022, the Company issued $500 of three-year Senior Notes at a fixed coupon rate of 3.100%, $500 of five-year Senior Notes at a fixed coupon rate of 3.100% and $500 of ten-year Senior Notes at a fixed coupon rate of 3.250%. In March 2023, the Company issued $500 of three-year Senior Notes at a fixed coupon rate of 4.800%, $500 of five-year Senior Notes at a fixed coupon rate of 4.600% and $500 of ten-year Senior Notes at a fixed coupon rate of 4.600%. 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).

20

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

The following tables present the notional values as of:

	March 31, 2023
	Foreign Currency Contracts		Foreign Currency Debt		Commodity Contracts		Total
Fair Value Hedges	$	1,101	$	—	$	—	$	1,101
Cash Flow Hedges	875		—		49		924
Net Investment Hedges	262		3,979		—		4,241

December 31, 2022
Foreign Currency Contracts	Foreign Currency Debt	Commodity Contracts	Total