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 June 30, 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	826,691,529	June 30, 2023

PART I.    FINANCIAL INFORMATION

COLGATE-PALMOLIVE COMPANY

Condensed Consolidated Statements of Income

(Dollars in Millions Except Per Share Amounts)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net sales	$	4,822	$	4,484	$	9,592	$	8,883
Cost of sales	2,035		1,930		4,093		3,757
Gross profit	2,787		2,554		5,499		5,126
Selling, general and administrative expenses	1,768		1,657		3,526		3,298
Other (income) expense, net	45		13		90		84
Operating profit	974		884		1,883		1,744
Non-service related postretirement costs	29		12		323		50
Interest (income) expense, net	58		31		112		58
Income before income taxes	887		841		1,448		1,636
Provision for income taxes	353		202		500		394
Net income including noncontrolling interests	534		639		948		1,242
Less: Net income attributable to noncontrolling interests	32		36		74		80
Net income attributable to Colgate-Palmolive Company	$	502	$	603	$	874	$	1,162
Earnings per common share, basic	$	0.61	$	0.72	$	1.05	$	1.39
Earnings per common share, diluted	$	0.60	$	0.72	$	1.05	$	1.38

See Notes to Condensed Consolidated Financial Statements.

2

COLGATE-PALMOLIVE COMPANY

Condensed Consolidated Statements of Comprehensive Income

(Dollars in Millions)

(Unaudited)

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net income including noncontrolling interests	$	534	$	639	$	948	$	1,242
Other comprehensive income (loss), net of tax:
Cumulative translation adjustments	27		(146)		70		(66)
Retirement plans and other retiree benefit adjustments	6		13		13		28
Gains (losses) on cash flow hedges	(10)		61		(4)		102
Total Other comprehensive income (loss), net of tax	23		(72)		79		64
Total Comprehensive income including noncontrolling interests	557		567		1,027		1,306
Less: Net income attributable to noncontrolling interests	32		36		74		80
Less: Cumulative translation adjustments attributable to noncontrolling interests	(25)		(14)		(41)		(16)
Total Comprehensive income attributable to noncontrolling interests	7		22		33		64
Total Comprehensive income attributable to Colgate-Palmolive Company	$	550	$	545	$	994	$	1,242

See Notes to Condensed Consolidated Financial Statements.

3

COLGATE-PALMOLIVE COMPANY

Condensed Consolidated Balance Sheets

(Dollars in Millions)

(Unaudited)

	June 30, 2023		December 31, 2022
Assets
Current Assets
Cash and cash equivalents	$	819	$	775
Receivables (net of allowances of $82 and $70, respectively)	1,656		1,504
Inventories	2,039		2,074
Other current assets	923		760
Total current assets	5,437		5,113
Property, plant and equipment:
Cost	9,988		9,583
Less: Accumulated depreciation	(5,557)		(5,276)
	4,431		4,307
Goodwill	3,373		3,352
Other intangible assets, net	1,901		1,920
Deferred income taxes	186		135
Other assets	899		904
Total assets	$	16,227	$	15,731
Liabilities and Shareholders’ Equity
Current Liabilities
Notes and loans payable	$	19	$	11
Current portion of long-term debt	16		14
Accounts payable	1,544		1,551
Accrued income taxes	453		317
Other accruals	2,600		2,111
Total current liabilities	4,632		4,004
Long-term debt	8,954		8,741
Deferred income taxes	363		383
Other liabilities	1,963		1,797
Total liabilities	15,912		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	3,688		3,546
Retained earnings	24,258		24,573
Accumulated other comprehensive income (loss)	(3,935)		(4,055)
Unearned compensation	—		(1)
Treasury stock, at cost	(25,541)		(25,128)
Total Colgate-Palmolive Company shareholders’ equity	(64)		401
Noncontrolling interests	379		405
Total equity	315		806
Total liabilities and equity	$	16,227	$	15,731

See Notes to Condensed Consolidated Financial Statements.

4

COLGATE-PALMOLIVE COMPANY

Condensed Consolidated Statements of Cash Flows

(Dollars in Millions)

(Unaudited)

	Six Months Ended
	June 30,
	2023		2022
Operating Activities
Net income including noncontrolling interests	$	948	$	1,242
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operations:
Depreciation and amortization	273		276
ERISA litigation matter	267		—
Restructuring and termination benefits, net of cash	(8)		73
Stock-based compensation expense	37		45
Deferred income taxes	(156)		(16)
Cash effects of changes in:
Receivables	(112)		(191)
Inventories	54		(332)
Accounts payable and other accruals	153		(167)
Other non-current assets and liabilities	1		(16)
Net cash provided by (used in) operations	1,457		914
Investing Activities
Capital expenditures	(347)		(300)
Purchases of marketable securities and investments	(225)		(126)
Proceeds from sale of marketable securities and investments	146		35
Payment for acquisitions, net of cash acquired	—		(90)
Other investing activities	(12)		(1)
Net cash provided by (used in) investing activities	(438)		(482)
Financing Activities
Short-term borrowing (repayment) less than 90 days, net	(415)		988
Principal payments of debt	(903)		—
Proceeds from issuance of debt	1,497		14
Dividends paid	(847)		(814)
Purchases of treasury shares	(551)		(791)
Proceeds from exercise of stock options	259		236
Other financing activities	5		(18)
Net cash provided by (used in) financing activities	(955)		(385)
Effect of exchange rate changes on Cash and cash equivalents	(20)		(21)
Net increase (decrease) in Cash and cash equivalents	44		26
Cash and cash equivalents at beginning of the period	775		832
Cash and cash equivalents at end of the period	$	819	$	858
Supplemental Cash Flow Information
Income taxes paid	$	450	$	477
Interest paid	$	129	$	65

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 June 30, 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, March 31, 2023	$	1,466	$	3,603	$	—	$	(25,245)	$	24,153	$	(3,983)	$	431
Net income	—		—		—		—		502		—		32
Other comprehensive income (loss), net of tax	—		—		—		—		—		48		(25)
Dividends ($0.48 per share)	—		—		—		—		(397)		—		(59)
Stock-based compensation expense	—		23		—		—		—		—		—
Shares issued for stock options	—		62		—		77		—		—		—
Shares issued for restricted stock units	—		(1)		—		1		—		—		—
Treasury stock acquired	—		—		—		(371)		—		—		—
Other	—		1		—		(3)		—		—		—
Balance, June 30, 2023	$	1,466	$	3,688	$	—	$	(25,541)	$	24,258	$	(3,935)	$	379

Three Months Ended June 30, 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, March 31, 2022	$	1,466	$	3,355	$	—	$	(24,401)	$	24,149	$	(4,248)	$	407
Net income	—		—		—		—		603		—		36
Other comprehensive income (loss), net of tax	—		—		—		—		—		(58)		(14)
Dividends ($0.47 per share)	—		—		—		—		(410)		—		(42)
Stock-based compensation expense	—		16		—		—		—		—		—
Shares issued for stock options	—		31		—		44		—		—		—
Shares issued for restricted stock units	—		(1)		—		1		—		—		—
Treasury stock acquired	—		—		—		(381)		—		—		—
Other	—		1		—		1		—		—		3
Balance, June 30, 2022	$	1,466	$	3,402	$	—	$	(24,736)	$	24,342	$	(4,306)	$	390

(1) Accumulated other comprehensive income (loss) includes cumulative translation losses of $3,381 at June 30, 2023 ($3,398 at June 30, 2022) and $3,431 at March 31, 2023 ($3,269 at March 31, 2022), respectively, and unrecognized retirement plan and other retiree benefits costs of $618 at June 30, 2023 ($1,015 at June 30, 2022) and $624 at March 31, 2023 ($1,030 at March 31, 2022), respectively.

See Notes to Condensed Consolidated Financial Statements.

6

COLGATE-PALMOLIVE COMPANY

Condensed Consolidated Statements of Changes in Shareholders’ Equity

(Dollars in Millions)

(Unaudited)

Six Months Ended June 30, 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	—		—		—		—		874		—		74
Other comprehensive income (loss), net of tax	—		—		—		—		—		120		(41)
Dividends ($1.43 per share)*	—		—		—		—		(1,189)		—		(59)
Stock-based compensation expense	—		37		—		—		—		—		—
Shares issued for stock options	—		116		—		127		—		—		—
Shares issued for restricted stock units	—		(14)		—		14		—		—		—
Treasury stock acquired	—		—		—		(551)		—		—		—
Other	—		3		1		(3)		—		—		—
Balance, June 30, 2023	$	1,466	$	3,688	$	—	$	(25,541)	$	24,258	$	(3,935)	$	379

Six Months Ended June 30, 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	—		—		—		—		1,162		—		80
Other comprehensive income (loss), net of tax	—		—		—		—		—		80		(16)
Dividends ($1.39 per share)*	—		—		—		—		(1,170)		—		(42)
Stock-based compensation expense	—		45		—		—		—		—		—
Shares issued for stock options	—		108		—		121		—		—		—
Shares issued for restricted stock units	—		(23)		—		23		—		—		—
Treasury stock acquired	—		—		—		(791)		—		—		—
Other	—		3		1		—		—		—		6
Balance, June 30, 2022	$	1,466	$	3,402	$	—	$	(24,736)	$	24,342	$	(4,306)	$	390

(1) Accumulated other comprehensive income (loss) includes cumulative translation losses of $3,381 at June 30, 2023 ($3,398 at June 30, 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 $618 at June 30, 2023 ($1,015 at June 30, 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.

7

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 roll-forward information. The guidance was effective for the Company beginning on January 1, 2023, except for the roll-forward 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 the 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

8

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 to apply a new reference rate, primarily the Secured Overnight Financing Rate (SOFR). The guidance has not had a material impact on the Company’s Consolidated Financial Statements.

9

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.

10

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 June 30, 2023, charges resulting from the 2022 Global Productivity Initiative were $21 pretax ($16 aftertax). For the three months ended June 30, 2022, charges resulting from the 2022 Global Productivity Initiative were $8 pretax ($5 aftertax).

For the six months ended June 30, 2023 and June 30, 2022, charges resulting from the 2022 Global Productivity Initiative are reflected in the income statement as follows:

	Six Months Ended June 30,
	2023		2022
Selling, general and administrative expenses	$	2	$	3
Other (income) expense, net	21		73
Non-service related postretirement costs	4		14
Total 2022 Global Productivity Initiative charges, pretax	$	27	$	90
Total 2022 Global Productivity Initiative charges, aftertax	$	21	$	70

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.

11

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

Total charges incurred for the 2022 Global Productivity Initiative relate to initiatives undertaken by the following reportable operating segments:

	Six Months Ended June 30,				Program-to-date Accumulated Charges
	2023		2022
North America	14	%	10	%	11	%
Latin America	2	%	17	%	15	%
Europe	26	%	16	%	20	%
Asia Pacific	22	%	10	%	11	%
Africa/Eurasia	2	%	11	%	9	%
Hill's Pet Nutrition	15	%	10	%	12	%
Corporate	19	%	26	%	22	%
Total	100	%	100	%	100	%

Since the inception of the 2022 Global Productivity Initiative, the Company has incurred cumulative pretax charges of $137 ($108 aftertax) in connection with the implementation of various projects as follows:

	Cumulative Charges
	as of June 30, 2023
Employee-Related Costs	$	124
Incremental Depreciation	—
Asset Impairments	1
Other	12
Total	$	137

The following tables summarize the activity for the restructuring and related implementation charges discussed above and the related accruals:

	Six Months Ended June 30, 2023
	Employee-Related Costs		Incremental Depreciation		Asset Impairments		Other		Total
Balance at December 31, 2022	$	30	$	—	$	1	$	3	$	34
Charges	22		—		—		5		27
Cash Payments	(28)		—		—		(7)		(35)
Charges against assets	(4)		—		(1)		—		(5)
Foreign exchange	6		—		—		—		6
Balance at June 30, 2023	$	26	$	—	$	—	$	1	$	27

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 $4 for the six months ended June 30, 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.

12

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

6.    Inventories

Inventories by major class were as follows:

	June 30, 2023		December 31, 2022
Raw materials and supplies	$	632	$	666
Work-in-process	47		48
Finished goods	1,481		1,508
Total Inventories, net	$	2,160	$	2,222
Non-current inventory, net	$	(121)	$	(148)
Current Inventories, net	$	2,039	$	2,074

13

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 June 30, 2023 and 2022, earnings per share were as follows:

	Three Months Ended
	June 30, 2023					June 30, 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	$	502	829.4	$	0.61	$	603	836.8	$	0.72
Stock options and restricted stock units			1.9					2.6
Diluted EPS	$	502	831.3	$	0.60	$	603	839.4	$	0.72

For the three months ended June 30, 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 6,268,944 and 3,835,115, respectively.

For the six months ended June 30, 2023 and 2022, earnings per share were as follows:

	Six Months Ended
	June 30, 2023					June 30, 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	$	874	830.4	$	1.05	$	1,162	838.7	$	1.39
Stock options and restricted stock units			1.7					2.8
Diluted EPS	$	874	832.1	$	1.05	$	1,162	841.5	$	1.38

For the six months ended June 30, 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 13,482,312 and 4,136,899, 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.

14

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 June 30, 2023 and 2022 were as follows:

	2023				2022
	Pretax		Net of Tax		Pretax		Net of Tax
Cumulative translation adjustments	$	57	$	52	$	(70)	$	(132)
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		7		19		13
Retirement plans and other retiree benefit adjustments	7		6		19		13
Cash flow hedges:
Unrealized gains (losses) on cash flow hedges	(17)		(13)		83		66
Reclassification of (gains) losses into net earnings on cash flow hedges (2)	3		3		(6)		(5)
Gains (losses) on cash flow hedges	(14)		(10)		77		61
Total Other comprehensive income (loss)	$	50	$	48	$	26	$	(58)

(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.

Additions to and reclassifications out of Accumulated other comprehensive income (loss) attributable to the Company for the six months ended June 30, 2023 and 2022 were as follows:

	2023				2022
	Pretax		Net of Tax		Pretax		Net of Tax
Cumulative translation adjustments	$	106	$	111	$	26	$	(50)
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)	16		13		37		28
Retirement plans and other retiree benefit adjustments	16		13		37		28
Cash flow hedges:
Unrealized gains (losses) on cash flow hedges	—		—		141		111
Reclassification of (gains) losses into net earnings on cash flow hedges (2)	(6)		(4)		(11)		(9)
Gains (losses) on cash flow hedges	(6)		(4)		130		102
Total Other comprehensive income (loss)	$	116	$	120	$	193	$	80

(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 OCI attributable to Noncontrolling interests.

15

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

9.    Retirement Plans and Other Retiree Benefits

Components of Net periodic benefit cost for the three and six months ended June 30, 2023 and 2022 were as follows:

	Three Months Ended June 30,
	Pension Benefits								Other Retiree Benefits
	United States				International
	2023		2022		2023		2022		2023		2022
Service cost	$	—	$	1	$	3	$	3	$	2	$	6
Interest cost	25		16		8		—		11		9
Expected return on plan assets	(21)		(27)		(5)		1		—		(1)
Amortization of actuarial loss (gain)	11		12		1		1		(4)		6
Net periodic benefit cost	$	15	$	2	$	7	$	5	$	9	$	20
Other postretirement charges	3		4		—		(2)		—		(7)
Total pension cost	$	18	$	6	$	7	$	3	$	9	$	13

	Six Months Ended June 30,
	Pension Benefits								Other Retiree Benefits
	United States				International
	2023		2022		2023		2022		2023		2022
Service cost	$	—	$	1	$	6	$	8	$	4	$	11
Interest cost	48		32		16		6		22		19
Expected return on plan assets	(41)		(52)		(9)		(5)		—		(1)
Amortization of actuarial loss (gain)	22		23		2		3		(8)		11
Net periodic benefit cost	$	29	$	4	$	15	$	12	$	18	$	40
Other postretirement charges	4		13		—		—		—		1
ERISA litigation matter	267		—		—		—		—		—
Total pension cost	$	300	$	17	$	15	$	12	$	18	$	41

Other postretirement charges for the three months ended June 30, 2023 included pension and other charges amounting to $3 and for the three months ended June 30, 2022 included an adjustment of $5, in each case incurred pursuant to the 2022 Global Productivity Initiative. Other postretirement charges for the six months ended June 30, 2023 and 2022 included pension and other charges of $4 and $14, respectively incurred pursuant to the 2022 Global Productivity Initiative.

For the three and six months ended June 30, 2023 and 2022, the Company made no voluntary contributions to its U.S. postretirement plans.

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 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. 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

16

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

of the plan amendment. The actuarial gain was recorded in Accumulated other comprehensive income and is being 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 $275 (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 $132. 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.

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 and two cases have progressed 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

17

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

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 $58, 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 June 30, 2023 of such competition law matters pending against the Company during the six months ended June 30, 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 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 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, which the Court denied in the three months ended June 30, 2023. In the three months ended June 30, 2023, the Company decided not to pursue a further appeal of this matter, and it is now closed.

As of June 30, 2023, there were 251 individual cases pending against the Company in state and federal courts throughout the United States, as compared to 248 cases as of March 31, 2023 and 227 cases as of December 31, 2022. During the three months ended June 30, 2023, 57 new cases were filed and 54 cases were resolved by voluntary dismissal or settlement. During the six months ended June 30, 2023, 103 new cases were filed and 79 cases were resolved by voluntary dismissal, settlement or dismissal by the court. The value of the settlements in the periods presented was not material, either individually or in the aggregate, to such periods’ 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.

18

COLGATE-PALMOLIVE COMPANY

 Notes to Condensed Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

(Unaudited)

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. In June 2023, the Company filed a petition for certiorari to the United States Supreme Court requesting permission for an appeal to that court, and the plaintiffs filed a motion to enter a revised final judgment in the District Court to address certain unresolved calculation issues, which the Company opposed.

19

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				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net sales
Oral, Personal and Home Care
North America	$	978	$	965	$	1,936	$	1,891
Latin America	1,178		1,019		2,253		1,973
Europe	678		639		1,328		1,293
Asia Pacific	664		696		1,402		1,422
Africa/Eurasia	268		256		556		523
Total Oral, Personal and Home Care	3,766		3,575		7,475		7,102
Pet Nutrition	1,056		909		2,117		1,781
Total Net sales	$	4,822	$	4,484	$	9,592	$	8,883

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).

20

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				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net sales
Oral Care	42	%	44	%	42	%	44	%
Personal Care	19	%	19	%	19	%	19	%
Home Care	17	%	17	%	17	%	17	%
Pet Nutrition	22	%	20	%	22	%	20	%
Total Net sales	100	%	100	%	100	%	100	%

Operating profit by segment was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Operating profit
Oral, Personal and Home Care
North America	$	227	$	196	$	420	$	359
Latin America	363		264		678		529
Europe	134		133		250		283
Asia Pacific	169		164		371