Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | COLGATE PALMOLIVE CO |
Entity Central Index Key | 21,665 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2018 |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Trading Symbol | CL |
Entity Common Stock, Shares Outstanding | 872,320,741 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018USD ($)Dividend$ / shares | Mar. 31, 2017USD ($)Dividend$ / shares | |||
Income Statement [Abstract] | ||||
Net sales | $ 4,002 | $ 3,762 | [1] | |
Cost of sales | 1,594 | 1,493 | [1] | |
Gross profit | 2,408 | 2,269 | [1] | |
Selling, general and administrative expenses | 1,392 | 1,336 | [1] | |
Other (income) expense, net | 33 | 21 | [1] | |
Operating profit | 983 | 912 | [1] | |
Non-service related postretirement costs | 24 | 27 | [1] | |
Interest (income) expense, net | 35 | 23 | [1] | |
Income before income taxes | 924 | 862 | [1] | |
Provision for income taxes | 246 | 251 | [1] | |
Net income including noncontrolling interests | 678 | 611 | [1] | |
Less: Net income attributable to noncontrolling interests | 44 | 41 | [1] | |
Net income attributable to Colgate-Palmolive Company | $ 634 | $ 570 | [1] | |
Earnings per common share, basic (in dollars per share) | $ / shares | $ 0.72 | $ 0.64 | [1] | |
Earnings per common share, diluted (in dollars per share) | $ / shares | 0.72 | 0.64 | [1] | |
Dividends declared per common share (in dollars per share) | $ / shares | [2] | $ 0.82 | $ 0.79 | [1] |
Number of dividends declared per quarter (in dividends) | Dividend | 2 | 2 | ||
[1] | Prior year amounts have been reclassified to conform to the current year presentation as a result of the adoption of Accounting Standards Update (“ASU”) No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” For further information regarding the impact of the reclassification, see Note 1, Basis of Presentation, Note 3, Recent Accounting Pronouncements and Updated Accounting Policies and Note 13, Segment Information to the Condensed Consolidated Financial Statements. | |||
[2] | Two dividends were declared in the first quarter of 2018 and 2017. |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Statement of Comprehensive Income [Abstract] | |||
Net income including noncontrolling interests | $ 678 | $ 611 | [1] |
Other comprehensive income (loss), net of tax: | |||
Cumulative translation adjustments | 108 | 132 | |
Retirement plans and other retiree benefit adjustments | 14 | 13 | |
Gains (losses) on cash flow hedges | (1) | (10) | |
Total Other comprehensive income (loss), net of tax | 121 | 135 | |
Total Comprehensive income including noncontrolling interests | 799 | 746 | |
Less: Net income attributable to noncontrolling interests | 44 | 41 | [1] |
Less: Cumulative translation adjustments attributable to noncontrolling interests | 3 | 7 | |
Total Comprehensive income attributable to noncontrolling interests | 47 | 48 | |
Total Comprehensive income attributable to Colgate-Palmolive Company | $ 752 | $ 698 | |
[1] | Prior year amounts have been reclassified to conform to the current year presentation as a result of the adoption of Accounting Standards Update (“ASU”) No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” For further information regarding the impact of the reclassification, see Note 1, Basis of Presentation, Note 3, Recent Accounting Pronouncements and Updated Accounting Policies and Note 13, Segment Information to the Condensed Consolidated Financial Statements. |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 851 | $ 1,535 |
Receivables (net of allowances of $85 and $77, respectively) | 1,644 | 1,480 |
Inventories | 1,312 | 1,221 |
Other current assets | 485 | 403 |
Total current assets | 4,292 | 4,639 |
Property, plant and equipment: | ||
Cost | 8,648 | 8,460 |
Less: Accumulated depreciation | (4,561) | (4,388) |
Property, plant and equipment, net | 4,087 | 4,072 |
Goodwill | 2,572 | 2,218 |
Other intangible assets, net | 1,782 | 1,341 |
Deferred income taxes | 187 | 188 |
Other assets | 224 | 218 |
Total assets | 13,144 | 12,676 |
Current Liabilities | ||
Notes and loans payable | 159 | 11 |
Current portion of long-term debt | 0 | 0 |
Accounts payable | 1,209 | 1,212 |
Accrued income taxes | 432 | 354 |
Other accruals | 2,180 | 1,831 |
Total current liabilities | 3,980 | 3,408 |
Long-term debt | 6,550 | 6,566 |
Deferred income taxes | 249 | 204 |
Other liabilities | 2,264 | 2,255 |
Total liabilities | 13,043 | 12,433 |
Shareholders’ Equity | ||
Common stock | 1,466 | 1,466 |
Additional paid-in capital | 2,047 | 1,984 |
Retained earnings | 20,581 | 20,531 |
Accumulated other comprehensive income (loss) | (3,900) | (3,855) |
Unearned compensation | (2) | (5) |
Treasury stock, at cost | (20,441) | (20,181) |
Total Colgate-Palmolive Company shareholders’ equity | (249) | (60) |
Noncontrolling interests | 350 | 303 |
Total equity | 101 | 243 |
Total liabilities and equity | $ 13,144 | $ 12,676 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 85 | $ 77 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Operating Activities | |||
Net income including noncontrolling interests | $ 678 | $ 611 | [1] |
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operations: | |||
Depreciation and amortization | 129 | 109 | |
Restructuring and termination benefits, net of cash | (25) | (9) | |
Stock-based compensation expense | 28 | 35 | |
Deferred income taxes | 13 | (51) | |
Voluntary benefit plan contributions | 0 | (57) | |
Cash effects of changes in: | |||
Receivables | (211) | (52) | |
Inventories | (33) | 9 | |
Accounts payable and other accruals | 33 | 98 | |
Other non-current assets and liabilities | 4 | (2) | |
Net cash provided by operations | 616 | 691 | |
Investing Activities | |||
Capital expenditures | (118) | (121) | |
Purchases of marketable securities and investments | (38) | (85) | |
Proceeds from sale of marketable securities and investments | 0 | 48 | |
Payment for acquisitions, net of cash acquired | (727) | 0 | |
Other | 2 | 0 | |
Net cash used in investing activities | (881) | (158) | |
Financing Activities | |||
Principal payments on debt | (2,079) | (805) | |
Proceeds from issuance of debt | 2,226 | 738 | |
Dividends paid | (352) | (345) | |
Purchases of treasury shares | (351) | (333) | |
Proceeds from exercise of stock options | 119 | 225 | |
Net cash used in financing activities | (437) | (520) | |
Effect of exchange rate changes on Cash and cash equivalents | 18 | 19 | |
Net increase (decrease) in Cash and cash equivalents | (684) | 32 | |
Cash and cash equivalents at beginning of the period | 1,535 | 1,315 | |
Cash and cash equivalents at end of the period | 851 | 1,347 | |
Supplemental Cash Flow Information | |||
Income taxes paid | $ 163 | $ 186 | |
[1] | Prior year amounts have been reclassified to conform to the current year presentation as a result of the adoption of Accounting Standards Update (“ASU”) No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” For further information regarding the impact of the reclassification, see Note 1, Basis of Presentation, Note 3, Recent Accounting Pronouncements and Updated Accounting Policies and Note 13, Segment Information to the Condensed Consolidated Financial Statements. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Condensed Consolidated Financial Statements reflect all normal recurring adjustments which, in management’s opinion, are necessary for a fair statement of the results for interim periods. Results of operations for interim periods may not be representative of results to be expected for a full year. Colgate-Palmolive Company (together with its subsidiaries, the “Company” or “Colgate”) reclassifies certain prior year amounts, as applicable, to conform to the current year presentation. The Company adopted Accounting Standards Update (“ASU”) No. 2017-07, “Compensation–Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost” on January 1, 2018. For further information regarding the impact of the adoption of ASU No. 2017-07, refer to Note 3 , Recent Accounting Pronouncements and Updated Accounting Policies and Note 13 , Segment Information . For a complete set of financial statement notes, including the Company’s significant accounting policies, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 , filed with the Securities and Exchange Commission (the “SEC”). |
Use of Estimates
Use of Estimates | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates Provisions for certain expenses, including income taxes, advertising and consumer promotion, are based on full year assumptions and are included in the accompanying Condensed Consolidated Financial Statements in proportion with estimated annual tax rates, the passage of time or estimated annual sales. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements and Updated Accounting Policie | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements and Updated Accounting Policies | Recent Accounting Pronouncements and Updated Accounting Policies Recent Accounting Pronouncements In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”), which permits the reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act (the “TCJA” or “U.S. tax reform”) from Accumulated other comprehensive income (loss) to Retained earnings. This new guidance is effective for the Company beginning on January 1, 2019, with early adoption permitted, and must be applied either in the period of adoption or retrospectively to periods in which the effects of the TCJA are recognized. The Company elected to adopt this new guidance early, beginning on January 1, 2018, and reclassified $163 in the current period. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” amending the eligibility criteria for hedged items and transactions to expand an entity’s ability to hedge nonfinancial and financial risk components. The new guidance eliminates the requirement to separately measure and present hedge ineffectiveness and aligns the presentation of hedge gains and losses with the underlying hedge item. The new guidance also simplifies the hedge documentation and hedge effectiveness assessment requirements. The new guidance is effective for the Company beginning on January 1, 2019, with early adoption permitted. The amended presentation and disclosure requirements must be adopted on a prospective basis, while any amendments to cash flow and net investment hedge relationships that exist on the date of adoption must be applied on a “modified retrospective” basis, meaning a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the year of adoption. While the Company is currently assessing the impact of the new standard, this new guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting,” clarifying when a change to the terms or conditions of a stock-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. The new guidance was effective for the Company on a prospective basis beginning on January 1, 2018 and did not impact the Company’s Consolidated Financial Statements as it is not the Company’s practice to change either the terms or conditions of stock-based payment awards once they are granted. In March 2017, the FASB issued ASU No. 2017-07, “Compensation–Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” changing the presentation of the net periodic benefit cost on the Statement of Income and limiting the amount of net periodic benefit cost eligible for capitalization to assets. The new guidance permits only the service cost component of net periodic benefit cost to be eligible for capitalization. The new guidance also requires entities to present the service cost component of net periodic benefit cost together with compensation costs arising from services rendered by employees during the period. The non-service related components of net periodic benefit cost, which include interest, expected return on assets, amortization of prior service costs and actuarial gains and losses, are required to be presented outside of Operating profit. The line item or items used to present the other components of net periodic benefit cost must be disclosed in the Notes to the Consolidated Financial Statements, if not separately described on the Statement of Income. The new presentation requirement is required to be adopted on a “full retrospective” basis, meaning the standard is applied to all of the periods presented in the financial statements, while the limitation on capitalization can only be adopted on a prospective basis. Effective January 1, 2018, as required, the Company adopted this standard on a retrospective basis. As permitted by the new guidance, the Company used the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the basis for applying the retrospective presentation requirements. As a result, for all periods presented, only the service related component of pension and other postretirement benefit costs is included in Operating profit. The non-service related components are included in a new line item, “Non-service related postretirement costs,” which is below Operating profit. For the quarter ended March 31, 2017, the Company reclassified $26 and $1 of non-service related components of pension and other postretirement benefit costs from Selling, general and administrative expenses and Other (income) expense, net, respectively, to Non-service related postretirement costs. Adoption of this standard had no effect on Net income attributable to Colgate-Palmolive Company, Earnings per common share or Cash flow. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” eliminating the requirement to calculate the implied fair value, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard is effective for the Company on a prospective basis beginning on January 1, 2020, with early adoption permitted. This new guidance is not expected to have an impact on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which provides additional guidance on evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The guidance requires an entity to evaluate if substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the new guidance would define this as an asset acquisition; otherwise, the entity then evaluates whether the asset meets the requirement that a business include, at a minimum, an input and substantive process that together significantly contribute to the ability to create outputs. The guidance was effective for the Company on a prospective basis beginning on January 1, 2018. This new guidance did not have an impact on the Company’s Consolidated Financial Statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which clarifies how certain cash receipts and payments are to be presented in the statement of cash flows. The guidance was effective for the Company on January 1, 2018. This new guidance did not have an impact on the Company’s Consolidated Financial Statements. In February 2016, the FASB issued its final standard on lease accounting, ASU No. 2016-02, “Leases (Topic 842),” which supersedes Topic 840, “Leases.” The new accounting standard requires the recognition of right-of-use assets and lease liabilities for all long-term leases, including operating leases, on the balance sheet. The new standard also provides additional guidance on the measurement of the right-of-use assets and lease liabilities and will require enhanced disclosures about the Company’s leasing arrangements. Under current accounting standards, substantially all of the Company’s leases are considered operating leases and, as such, are not recognized on the Consolidated Balance Sheet. This new standard is effective for the Company beginning on January 1, 2019, with early adoption permitted. The standard requires a “modified retrospective” adoption, meaning the standard is applied to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently assessing the impact of the new standard on its Consolidated Financial Statements. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments–Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The updated guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The amendment to the standard was effective for the Company beginning on January 1, 2018 and did not have an impact on the Company’s Consolidated Financial Statements. In May 2014, the FASB and the International Accounting Standards Board issued their final converged standard on revenue recognition. The standard, issued as ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” by the FASB, provides a comprehensive revenue recognition model for all contracts with customers and supersedes current revenue recognition guidance. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to its customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The new standard also includes enhanced disclosures. During 2016, the FASB issued several accounting updates (ASU No. 2016-08, 2016-10 and 2016-12) to clarify implementation guidance and correct unintended application of the guidance. The standard allows for either full retrospective adoption or modified retrospective adoption. The Company adopted the new standard on January 1, 2018, on a “modified retrospective” basis, which did not have a material impact on the Company’s Consolidated Financial Statements. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the 2018 opening balance of retained earnings. Results for periods beginning on or after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the prior accounting guidance under Topic 605, “Revenue Recognition.” The new accounting standard changes only the timing of when certain of the Company’s sales are recorded and does not change the amount at which sales are recorded. The application of the new accounting standard did not have a material impact on the Company’s Consolidated Financial Statements for the period ended March 31, 2018 and is not expected to have a material impact on the Company’s Consolidated Financial Statements in future periods. Updated Accounting Policies Revenue Recognition Accounting Policy The Company’s revenue contracts represent a single performance obligation to sell its products to trade customers. Sales are recorded at the time control of the products is transferred to trade customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the products. Control is the ability of trade customers to direct the “use of” and “obtain” the benefit from our products. In evaluating the timing of the transfer of control of products to trade customers, the Company considers several control indicators, including significant risks and rewards of products, the Company’s right to payment and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to trade customers. Net sales reflect the transaction prices for contracts, which include units shipped at selling list prices reduced by variable consideration. Variable consideration includes expected sales returns and the cost of current and continuing promotional programs. Current promotional programs primarily include product listing allowances and co-operative advertising arrangements. Continuing promotional programs are predominantly consumer coupons and volume-based sales incentive arrangements. The cost of promotional programs is estimated using the expected value method considering all reasonably available information, including the Company’s historical experience and its current expectations, and is reflected in the transaction price when sales are recorded. Adjustments to the cost of promotional programs in subsequent periods are generally not material, as the Company’s promotional programs are typically of short duration, thereby reducing the uncertainty inherent in such estimates. Sales returns are generally accepted at the Company’s discretion and are not material to the Company’s Consolidated Financial Statements. The Company’s contracts with trade customers do not have significant financing components or non-cash consideration and the Company does not have unbilled revenue or significant amounts of prepayments from customers. The Company records Net sales excluding taxes collected on its sales to its trade customers. Shipping and handling activities are accounted for as contract fulfillment costs and classified as Selling, general and administrative expenses. |
Acquisitions and Divestitures
Acquisitions and Divestitures | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions In January 2018, the Company acquired all of the outstanding equity interests of Physicians Care Alliance, LLC (“PCA”) and Elta MD Holdings, Inc. (“Elta”), professional skin care businesses, for aggregate cash consideration of approximately $730 . With these acquisitions, the Company has entered the professional skin care category, which complements its existing global personal care businesses and resulted in the recognition of additional goodwill. Total purchase price consideration of $730 has been allocated on a preliminary basis to the net assets acquired based on their respective estimated fair values at January 2018, as follows: Recognized amounts of assets acquired and liabilities assumed: Inventories $ 7 Other current assets 9 Other intangible assets 438 Goodwill 332 Other current liabilities (6 ) Deferred income taxes (50 ) Fair value of net assets acquired $ 730 Based on the Company’s preliminary purchase price allocation, other intangible assets acquired include trademarks of $292 with useful lives of 25 years and customer relationships of $146 with useful lives ranging from 12 to 13 years . Goodwill of $332 was allocated to the North America segment. The Company expects that approximately 40% of the goodwill will be deductible for tax purposes. The preliminary estimates of the fair value of identifiable assets acquired and liabilities assumed are subject to revisions, which may result in adjustments to the preliminary values discussed above. Pro forma results of operations have not been presented as the impact on the Company’s Condensed Consolidated Financial Statements is not material. The Company expects to finalize the purchase price allocation prior to the end of 2018. |
Restructuring and Related Imple
Restructuring and Related Implementation Charges | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Implementation Charges | Restructuring and Related Implementation Charges In the fourth quarter of 2012, the Company commenced a restructuring program (the “Global Growth and Efficiency Program”) for sustained growth. The program was expanded in 2014 and expanded and extended in 2015. Building on the Company’s successful implementation of the program, on October 26, 2017, the Board approved an expansion of the Global Growth and Efficiency Program and an extension of the program through December 31, 2019 to take advantage of additional opportunities to streamline the Company’s operations. Initiatives under the Global Growth and Efficiency Program continue to fit within the program’s three focus areas of expanding commercial hubs, extending shared business services and streamlining global functions and optimizing the global supply chain and facilities. Including the most recent expansion, cumulative pretax charges resulting from the Global Growth and Efficiency Program, once all phases are approved and implemented, are estimated to be in the range of $1,730 to $1,885 ( $1,280 to $1,380 aftertax). The Company anticipates that pretax charges for 2018 will approximate $100 to $175 ( $75 to $125 aftertax). It is expected that substantially all charges resulting from the Global Growth and Efficiency Program will be incurred by December 31, 2019 . The pretax charges resulting from the Global Growth and Efficiency Program are currently estimated to be comprised of the following categories: Employee-Related Costs, including severance, pension and other termination benefits ( 50% ); asset-related costs, primarily Incremental Depreciation and Asset Impairments ( 10% ); and Other charges, which include contract termination costs, consisting primarily of related implementation charges resulting directly from exit activities ( 20% ) and the implementation of new strategies ( 20% ). Over the course of the Global Growth and Efficiency Program, it is currently estimated that approximately 80% of the charges will result in cash expenditures. The Company expects that the cumulative pretax charges, once all projects are approved and implemented, will relate to initiatives undertaken in North America ( 15% ), Latin America ( 5% ), Europe ( 20% ), Asia Pacific ( 5% ), Africa/Eurasia ( 5% ), Hill’s Pet Nutrition ( 10% ) and Corporate ( 40% ), which includes substantially all of the costs related to the implementation of new strategies, noted above, on a global basis. The Company expects that, when it has been fully implemented, the Global Growth and Efficiency Program will have contributed a net reduction of approximately 3,800 to 4,400 positions from the Company’s global employee workforce. For the three months ended March 31, 2018 and 2017 , restructuring and related implementation charges are reflected in the Condensed Consolidated Statements of Income as follows: Three Months Ended March 31, 2018 2017 Cost of sales $ 6 $ 14 Selling, general and administrative expenses 5 21 Other (income) expense, net 13 10 Non-service related postretirement costs 4 1 Total Global Growth and Efficiency Program charges, pretax $ 28 $ 46 Total Global Growth and Efficiency Program charges, aftertax $ 20 $ 31 Restructuring and related implementation charges in the preceding table are recorded in the Corporate segment as these initiatives are predominantly centrally directed and controlled and are not included in internal measures of segment operating performance. Total charges incurred for the Global Growth and Efficiency Program relate to initiatives undertaken by the following reportable operating segments: Three Months Ended Program-to-date March 31, Accumulated Charges 2018 2017 North America 37 % 37 % 19 % Latin America 12 % 6 % 4 % Europe 2 % 2 % 21 % Asia Pacific 18 % 2 % 3 % Africa/Eurasia 2 % 4 % 6 % Hill ’ s Pet Nutrition 19 % 7 % 7 % Corporate 10 % 42 % 40 % Total 100 % 100 % 100 % Since the inception of the Global Growth and Efficiency Program in the fourth quarter of 2012, the Company has incurred cumulative pretax charges of $1,589 ( $1,173 aftertax) in connection with the implementation of various projects as follows: Cumulative Charges as of March 31, 2018 Employee-Related Costs $ 646 Incremental Depreciation 91 Asset Impairments 36 Other 816 Total $ 1,589 The majority of costs incurred since inception relate to the following projects: the implementation of the Company’s overall hubbing strategy; the extension of shared business services and streamlining of global functions; the consolidation of facilities; the closing of the Morristown, New Jersey personal care facility; the simplification and streamlining of the Company’s research and development capabilities and oral care supply chain, both in Europe; redesigning the European commercial organization; restructuring how the Company will provide future retirement benefits to substantially all of the U.S.-based employees participating in the Company’s defined benefit retirement plan by shifting them to the Company’s defined contribution plan; and the implementation of a Corporate efficiencies program. The following table summarizes the activity for the restructuring and related implementation charges discussed above and the related accruals: Three Months Ended March 31, 2018 Employee-Related Costs Incremental Depreciation Asset Impairments Other Total Balance at December 31, 2017 $ 127 $ — $ — $ 107 $ 234 Charges 18 1 — 9 28 Cash payments (39 ) — — (16 ) (55 ) Charges against assets (4 ) (1 ) — — (5 ) Foreign exchange 2 — — — 2 Balance at March 31, 2018 $ 104 $ — $ — $ 100 $ 204 Employee-Related Costs primarily include severance and other termination benefits and are calculated based on long-standing benefit practices, local statutory requirements and, in certain cases, voluntary termination arrangements. Employee-Related Costs also include pension and other retiree benefit enhancements amounting to $4 for the three months ended March 31, 2018 , which are reflected as Charges against assets within Employee-Related Costs in the preceding table as the corresponding balance sheet amounts are reflected as a reduction of pension assets or an increase in pension and other retiree benefit liabilities. See Note 10 , Retirement Plans and Other Retiree Benefits for additional information. Incremental Depreciation is recorded to reflect changes in useful lives and estimated residual values for long-lived assets that will be taken out of service prior to the end of their normal service period. Asset Impairments are recorded to write down assets held for sale or disposal to their fair value based on amounts expected to be realized. Charges against assets within Asset Impairments are net of cash proceeds pertaining to the sale of certain assets. Other charges consist primarily of charges resulting directly from exit activities and the implementation of new strategies as a result of the Global Growth and Efficiency Program. These charges for the three months ended March 31, 2018 include third-party incremental costs related to the development and implementation of new business and strategic initiatives of $ 8 and contract termination costs and charges resulting directly from exit activities of $ 1 . These charges were expensed as incurred. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventory, Net, Items Net of Reserve Alternative [Abstract] | |
Inventories | Inventories Inventories by major class are as follows: March 31, December 31, Raw materials and supplies $ 258 $ 267 Work-in-process 49 42 Finished goods 1,005 912 Total Inventories $ 1,312 $ 1,221 |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Changes in the components of Shareholders’ Equity for the three months ended March 31, 2018 are as follows: Colgate-Palmolive Company Shareholders’ Equity Noncontrolling Interests Common Stock Additional Paid-in Capital Unearned Compensation Treasury Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Balance, December 31, 2017 $ 1,466 $ 1,984 $ (5 ) $ (20,181 ) $ 20,531 $ (3,855 ) $ 303 Net income 634 44 Other comprehensive income (loss), net of tax 118 3 Dividends (718 ) Stock-based compensation expense 28 Shares issued for stock options 48 77 Shares issued for restricted stock units (12 ) 12 Treasury stock acquired (351 ) Other (1 ) 3 2 134 (163 ) (1) Balance, March 31, 2018 $ 1,466 $ 2,047 $ (2 ) $ (20,441 ) $ 20,581 $ (3,900 ) $ 350 (1) As a result of the early adoption of ASU 2018-02, the Company reclassified the stranded tax effects in Accumulated other comprehensive income (loss) resulting from the TCJA to Retained earnings. See Note 3, Recent Accounting Pronouncements and Updated Accounting Policies for additional information. Accumulated other comprehensive income (loss) includes cumulative translation losses of $ 2,832 and $ 2,927 at March 31, 2018 and December 31, 2017 , respectively, and unrecognized retirement plan and other retiree benefits costs of $ 1,062 and $ 923 at March 31, 2018 and December 31, 2017 , respectively. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share For the three months ended March 31, 2018 and 2017 , earnings per share were as follows: Three Months Ended March 31, 2018 March 31, 2017 Net income attributable to Colgate-Palmolive Company Shares (millions) Per Share Net income attributable to Colgate-Palmolive Company Shares (millions) Per Share Basic EPS $ 634 875.4 $ 0.72 $ 570 884.7 $ 0.64 Stock options and restricted stock units 4.5 6.3 Diluted EPS $ 634 879.9 $ 0.72 $ 570 891.0 $ 0.64 For the three months ended March 31, 2018 and 2017 , the average number of stock options and restricted stock units that were anti-dilutive and not included in diluted earnings per share calculations were 16,287,263 and 9,182,150 , respectively. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) Additions to and reclassifications out of Accumulated other comprehensive income (loss) attributable to the Company for the three months ended March 31, 2018 and 2017 were as follows: 2018 2017 Pretax Net of Tax Pretax Net of Tax Cumulative translation adjustments $ 96 $ 105 $ 103 $ 125 Retirement plans and other retiree benefits: Net actuarial gain (loss) and prior service costs arising during the period — — — — Amortization of net actuarial loss, transition and prior service costs (1) 18 14 18 13 Retirement plans and other retiree benefits adjustments 18 14 18 13 Cash flow hedges: Unrealized gains (losses) on cash flow hedges (8 ) (6 ) (13 ) (8 ) Reclassification of (gains) losses into net earnings on cash flow hedges (2) 6 5 (3 ) (2 ) Gains (losses) on cash flow hedges (2 ) (1 ) (16 ) (10 ) Total Other comprehensive income (loss) $ 112 $ 118 $ 105 $ 128 (1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 10 , Retirement Plans and Other Retiree Benefits for additional details. (2) These (gains) losses are reclassified into Cost of sales. See Note 14 , Fair Value Measurements and Financial Instruments for additional details. There were no tax impacts on Other comprehensive income (loss) attributable to Noncontrolling interests. |
Retirement Plans and Other Reti
Retirement Plans and Other Retiree Benefits | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Retirement Plans and Other Retiree Benefits | Retirement Plans and Other Retiree Benefits Components of Net periodic benefit cost for the three months ended March 31, 2018 and 2017 were as follows: Pension Benefits Other Retiree Benefits United States International Three Months Ended March 31, 2018 2017 2018 2017 2018 2017 Service cost $ — $ — $ 4 $ 4 $ 4 $ 4 Interest cost 21 24 6 5 10 11 Expected return on plan assets (29 ) (27 ) (6 ) (5 ) — — Amortization of transition and prior service costs (credits) — — — — — — Amortization of actuarial loss (gain) 12 12 2 2 4 4 Net periodic benefit cost $ 4 $ 9 $ 6 $ 6 $ 18 $ 19 For the three months ended March 31, 2018 and 2017 , the Company made voluntary contributions to its U.S. postretirement plans of $ 0 and $57 , respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the TCJA was enacted, which, among other things, lowered the U.S. corporate income tax rate to 21% from 35% and established a modified territorial system requiring a mandatory deemed repatriation tax on undistributed earnings of foreign subsidiaries. Beginning in 2018, the TCJA also requires a minimum tax on certain earnings generated by foreign subsidiaries while providing for tax-free repatriation of such earnings through a 100% dividends-received deduction. The Company’s effective income tax rate in 2017 included a provisional charge of $275 , recorded in the fourth quarter of 2017, related to the TCJA using information and estimates available as of February 15, 2018, the date on which the Company filed its Annual Report on Form 10-K for the year ended December 31, 2017. Given the significant complexity of the TCJA, recent and anticipated further guidance from the U.S. Treasury about implementing the TCJA and the potential for additional guidance from the SEC or the FASB related to the TCJA or additional information becoming available, the Company’s provisional charge may be adjusted during 2018 and is expected to be finalized no later than the fourth quarter of 2018. The aforementioned guidance and additional information regarding the TCJA may also impact the Company’s 2018 effective income tax rate, exclusive of any adjustment to the provisional charge. As a result of the early adoption of ASU 2018-02, the Company reclassified $163 of stranded tax effects in Accumulated other comprehensive income (loss) resulting from the TCJA to Retained earnings in the current period. See Note 3, Recent Accounting Pronouncements and Updated Accounting Policies for additional information. The Company has taken a tax position in a foreign jurisdiction since 2002 that has been challenged by the local tax authorities. In May 2015, the Company became aware of several rulings by the Supreme Court in this foreign jurisdiction disallowing certain tax deductions, which had the effect of reversing prior decisions. The Company had taken deductions in prior years similar to those disallowed by such court and, as a result, as required, reassessed its tax position and increased its unrecognized tax benefits in 2015. In 2016, the Supreme Court in the foreign jurisdiction decided the matter in the Company’s favor for the years 2002 through 2005. Also in 2016, the Administrative Court in the foreign jurisdiction decided the matter in the Company’s favor for the years 2008 through 2011 by acknowledging the Supreme Court’s ruling for the years 2002 through 2005, which eliminated the possibility of future appeals. As a result, the Company recorded a tax benefit of $30 , including interest, in 2016. In March 2018, the lower courts ruled in the Company’s favor for the years 2006, 2007 and 2012 through 2014. Although the lower courts ruled in the Company’s favor, it is possible that the rulings will be appealed to the Supreme Court. If such appeals are resolved in the Company’s favor, the Company will record additional tax benefits of approximately $15 at current exchange rates. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Loss Contingency [Abstract] | |
Contingencies | Contingencies As a global company serving consumers in more than 200 countries and territories, the Company is routinely subject to a wide variety of legal proceedings. These include disputes relating to intellectual property, contracts, product liability, marketing, advertising, foreign exchange controls, antitrust and trade regulation, as well as labor and employment, pension, privacy, environmental and tax matters and consumer class actions. Management proactively reviews and monitors the Company’s exposure to, and the impact of, environmental matters. The Company is party to various environmental matters and, as such, may be responsible for all or a portion of the cleanup, restoration and post-closure monitoring of several sites. The Company establishes accruals for loss contingencies when it has determined that a loss is probable and that the amount of loss, or range of loss, can be reasonably estimated. Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances. The Company also determines estimates of reasonably possible losses or ranges of reasonably possible losses in excess of related accrued liabilities, if any, when it has determined that a loss is reasonably possible and it is able to determine such estimates. For those matters disclosed below for which the amount of any potential losses can be reasonably estimated, the Company currently estimates that the aggregate range of reasonably possible losses in excess of any accrued liabilities is $0 to approximately $250 (based on current exchange rates). The estimates included in this amount are based on the Company’s analysis of currently available information and, as new information is obtained, these estimates may change. Due to the inherent subjectivity of the assessments and the unpredictability of outcomes of legal proceedings, any amounts accrued or included in this aggregate amount may not represent the ultimate loss to the Company. Thus, the Company’s exposure and ultimate losses may be higher or lower, and possibly significantly so, than the amounts accrued or the range disclosed above. Based on current knowledge, management does not believe that the ultimate resolution of loss contingencies arising from the matters discussed herein will have a material effect on the Company’s consolidated financial position or its ongoing results of operations or cash flows. However, in light of the inherent uncertainties noted above, an adverse outcome in one or more matters could be material to the Company’s results of operations or cash flows for any particular quarter or year. Brazilian Matters There are certain tax and civil proceedings outstanding, as described below, related to the Company ’ s 1995 acquisition of the Kolynos oral care business from Wyeth (the “ Seller ” ). The Brazilian internal revenue authority has disallowed interest deductions and foreign exchange losses taken by the Company’s Brazilian subsidiary for certain years in connection with the financing of the Kolynos acquisition. The tax assessments with interest, penalties and any court-mandated fees, at the current exchange rate, are approximately $165 . This amount includes additional assessments received from the Brazilian internal revenue authority in April 2016 relating to net operating loss carryforwards used by the Company’s Brazilian subsidiary to offset taxable income that had also been deducted from the authority’s original assessments. The Company has been disputing the disallowances by appealing the assessments since October 2001. Appeals are currently pending at the administrative level. In the event the Company is ultimately unsuccessful in its administrative appeals, further appeals are available within the Brazilian federal courts. In September 2015, the Company lost one of its appeals at the administrative level and filed a lawsuit in Brazilian federal court. In February 2017, the Company lost an additional administrative appeal and filed a lawsuit in Brazilian federal court. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the disallowances are without merit and that the Company should ultimately prevail. The Company is challenging these disallowances vigorously. In July 2002, the Brazilian Federal Public Attorney filed a civil action against the federal government of Brazil, Laboratorios Wyeth-Whitehall Ltda. (the Brazilian subsidiary of the Seller) and the Company, as represented by its Brazilian subsidiary, in the 6th. Lower Federal Court in the City of São Paulo, seeking to annul an April 2000 decision by the Brazilian Board of Tax Appeals that found in favor of the Seller’s Brazilian subsidiary on the issue of whether it had incurred taxable capital gains as a result of the divestiture of Kolynos. The action seeks to make the Company’s Brazilian subsidiary jointly and severally liable for any tax due from the Seller’s Brazilian subsidiary. The case has been pending since 2002, and the Lower Federal Court has not issued a decision. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the Company should ultimately prevail in this action. The Company is challenging this action vigorously. In December 2005, the Brazilian internal revenue authority issued to the Company’s Brazilian subsidiary a tax assessment with interest, penalties and any court-mandated fees of approximately $74 , at the current exchange rate, based on a claim that certain purchases of U.S. Treasury bills by the subsidiary and their subsequent disposition during the period 2000 to 2001 were subject to a tax on foreign exchange transactions. The Company had been disputing the assessment within the internal revenue authority’s administrative appeals process. However, in November 2015, the Superior Chamber of Administrative Tax Appeals denied the Company’s final administrative appeal and the Company has filed a lawsuit in the Brazilian federal court. In the event the Company is unsuccessful in this lawsuit, further appeals are available within the Brazilian federal courts. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the tax assessment is without merit and that the Company should ultimately prevail. The Company is challenging this assessment vigorously. Competition Matters Certain of the Company’s subsidiaries have historically been subject to investigations, and, in some cases, fines, by governmental authorities in a number of countries related to alleged competition law violations. Substantially all of these matters also involved other consumer goods companies and/or retail customers. The Company’s policy is to comply with antitrust and competition laws and, if a violation of any such laws is found, to take appropriate remedial action and to cooperate fully with any related governmental inquiry. The status of pending competition law matters as of March 31, 2018 is set forth below. ▪ In December 2014, the French competition law authority found that 13 consumer goods companies, including the Company’s French subsidiary, exchanged competitively sensitive information related to the French home care and personal care sectors, for which the Company’s French subsidiary was fined $57 . In addition, as a result of the Company’s acquisition of the Sanex personal care business in 2011 from Unilever N.V. and Unilever PLC (together with Unilever N.V., “Unilever”), pursuant to a Business and Share Sale and Purchase Agreement (the “Sale and Purchase Agreement”), the French competition law authority found that the Company’s French subsidiary, along with Hillshire Brands Company (formerly Sara Lee Corporation (“Sara Lee”)), were jointly and severally liable for fines of $25 assessed against Sara Lee’s French subsidiary. The Company is entitled to indemnification for this fine from Unilever as provided in the Sale and Purchase Agreement. The fines were confirmed by the Court of Appeal in October 2016. The Company is appealing the decision of the Court of Appeal on behalf of the Company and Sara Lee in the French Supreme Court. ▪ In July 2014, the Greek competition law authority issued a statement of objections alleging a restriction of parallel imports into Greece. The Company responded to this statement of objections. In July 2017, the Company received the decision from the Greek competition law authority in which the Company was fined $11 . The Company is appealing the decision to the Greek courts. Talcum Powder Matters The Company has been named as a defendant in civil actions alleging that certain talcum powder products that were sold prior to 1996 were contaminated with asbestos. Most of these actions involve a number of co-defendants from a variety of different industries, including suppliers of asbestos and manufacturers of products that, unlike the Company’s products, were designed to contain asbestos. As of March 31, 2018 , there were 199 individual cases pending against the Company in state and federal courts throughout the United States, as compared to 193 cases as of December 31, 2017 . During the three months ended March 31, 2018 , 25 new cases were filed and 19 cases were resolved by voluntary dismissal, summary judgment granted in the Company’s favor or settlement. The value of settlements was not material, either individually or in the aggregate, to the Company’s results of operations for the quarter ended March 31, 2018 . The Company believes that a significant portion of its costs incurred in defending and resolving these claims will be covered by insurance policies issued by several primary and excess insurance carriers, subject to deductibles, exclusions, retentions and policy limits. While the Company and its legal counsel believe that these cases are without merit and intend to challenge them vigorously, there can be no assurances regarding the ultimate resolution of these matters. Since the amount of any potential losses from these cases currently cannot be reasonably estimated, the range of reasonably possible losses in excess of accrued liabilities disclosed above does not include any amount relating to these cases. N8 The Company was a defendant in a lawsuit that was brought in Utah federal court by N8 Medical, Inc. (“N8 Medical”), Brigham Young University (“BYU”) and N8 Pharmaceuticals, Inc. (“N8 Pharma”). The complaint, originally filed in November 2013, alleged breach of contract and other torts arising out of the Company’s evaluation of a technology owned by BYU and licensed, at various times, to Ceragenix Pharmaceuticals, Inc., now in bankruptcy, N8 Medical and N8 Pharma. In 2016, the Company resolved the claims brought by BYU and N8 Medical. These claims were each resolved in an amount that is not material to the Company’s results of operations. In the first quarter of 2017, the trial court dismissed the claims of N8 Pharma and, in the third quarter of 2017, N8 Pharma appealed the decision. In March 2018, the appellate court upheld the trial court’s dismissal of N8 Pharma’s claim. ERISA Matter In June 2016, a putative class action claiming that residual annuity payments made to certain participants in the Colgate-Palmolive Company Employees’ Retirement Income Plan (the “ Plan ” ) did not comply with the Employee Retirement Income Security Act was filed against the Plan, the Company and certain individuals in the United States District Court for the Southern District of New York. This action has been certified as a class action. The relief sought includes recalculation of benefits, pre- and post-judgment interest and attorneys’ fees. The Company is contesting this action vigorously. Since the amount of any potential loss from this case currently cannot be reasonably estimated, the range of reasonably possible losses in excess of accrued liabilities disclosed above does not include any amount relating to the case. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates in two product segments: Oral, Personal and Home Care; and Pet Nutrition. The operations of the Oral, Personal and Home Care product segment are managed geographically in five reportable operating segments: North America, Latin America, Europe, Asia Pacific and Africa/Eurasia. The Company evaluates segment performance based on several factors, including Operating profit. The Company uses Operating profit as a measure of operating segment performance because it excludes the impact of Corporate-driven decisions related to interest expense and income taxes. Effective January 1, 2018, as required, the Company adopted ASU No. 2017-07, “Compensation–Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”), on a retrospective basis. To conform to the current year’s presentation, for the three months ended March 31, 2017, the Company reclassified $27 of non-service related components of pension and other postretirement costs, which was previously deducted from Operating profit, to a new line item, “Non-service related postretirement costs,” which is below Operating profit. The impact of the reclassification from Operating profit by segment is as follows: North America $14 , Latin America $2 , Europe $2 , Asia Pacific $0 , Africa/Eurasia $1 , Pet Nutrition $6 and Corporate $2 . The reclassification had no effect on Net income attributable to Colgate-Palmolive Company, Earnings per common share or Cash flow. The accounting policies of the operating segments are generally the same as those described in Note 2, Summary of Significant Accounting Policies to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Intercompany sales have been eliminated. Corporate operations include costs related to stock options and restricted stock units, research and development costs, Corporate overhead costs, restructuring and related implementation charges and gains and losses on sales of non-core product lines and assets. The Company reports these items within Corporate operations as they relate to Corporate-based responsibilities and decisions and are not included in the internal measures of segment operating performance used by the Company to measure the underlying performance of the operating segments. Net sales by segment was as follows: Three Months Ended March 31, 2018 2017 Net sales Oral, Personal and Home Care North America $ 827 $ 760 Latin America 929 924 Europe 648 558 Asia Pacific 759 720 Africa/Eurasia 255 246 Total Oral, Personal and Home Care 3,418 3,208 Pet Nutrition 584 554 Total Net sales $ 4,002 $ 3,762 Approximately 75% of the Company’s Net sales are generated from markets outside the U.S., with approximately 50% of the Company’s Net sales coming from emerging markets (which consist of Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe). The Company’s Net sales of Oral, Personal and Home Care and Pet Nutrition products accounted for the following percentages of the Company’s Net sales: Three Months Ended March 31, 2018 2017 Net sales Oral Care 49 % 49 % Personal Care 19 % 18 % Home Care 17 % 18 % Pet Nutrition 15 % 15 % Total Net sales 100 % 100 % Operating profit by segment was as follows: Three Months Ended March 31, 2018 2017 Operating profit Oral, Personal and Home Care North America $ 257 $ 247 Latin America 273 271 Europe 162 142 Asia Pacific 226 219 Africa/Eurasia 50 46 Total Oral, Personal and Home Care 968 925 Pet Nutrition 164 163 Corporate (149 ) (176 ) Total Operating profit $ 983 $ 912 For the three months ended March 31, 2018 , and 2017, Corporate Operating profit (loss) included charges of $24 and $45 , respectively, resulting from the Global Growth and Efficiency Program. For further information regarding the Global Growth and Efficiency Program, refer to Note 5 , Restructuring and Related Implementation Charges. |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments and Fair Value Measurements [Abstract] | |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments The Company uses available market information and other valuation methodologies in assessing the fair value of financial instruments. Judgment is required in interpreting market data to develop the estimates of fair value and, accordingly, changes in assumptions or the estimation methodologies may affect the fair value estimates. The Company is exposed to the risk of credit loss in the event of nonperformance by counterparties to financial instrument contracts; however, nonperformance is considered unlikely and any nonperformance is unlikely to be material, as it is the Company’s policy to contract only with diverse, credit-worthy counterparties based upon both strong credit ratings and other credit considerations. The Company is exposed to market risk from foreign currency exchange rates, interest rates and commodity price fluctuations. Volatility relating to these exposures is managed on a global basis by utilizing a number of techniques, including working capital management, sourcing strategies, selling price increases, selective borrowings in local currencies and entering into selective derivative instrument transactions, issued with standard features, in accordance with the Company’s treasury and risk management policies, which prohibit the use of derivatives for speculative purposes and leveraged derivatives for any purpose. It is the Company’s policy to enter into derivative instrument contracts with terms that match the underlying exposure being hedged. Hedge ineffectiveness, if any, is not material for any period presented. The Company’s derivative instruments include interest rate swap contracts, foreign currency contracts and commodity contracts. The Company utilizes interest rate swap contracts to manage its targeted mix of fixed and floating rate debt, and these swaps are valued using observable benchmark rates (Level 2 valuation). The Company utilizes foreign currency contracts, including forward and swap contracts, option contracts, local currency deposits and local currency borrowings to hedge portions of its foreign currency purchases, assets and liabilities arising in the normal course of business and the net investment in certain foreign subsidiaries. These contracts are valued using observable market rates (Level 2 valuation). Commodity futures contracts are utilized to hedge the purchases of raw materials used in production. These contracts are measured using quoted commodity exchange prices (Level 1 valuation). The duration of foreign currency and commodity contracts generally does not exceed 12 months. The following table summarizes the fair value of the Company’s derivative instruments and other financial instruments which are carried at fair value in the Company’s Consolidated Balance Sheets at March 31, 2018 and December 31, 2017 : Assets Liabilities Account Fair Value Account Fair Value Designated derivative instruments 3/31/18 12/31/17 3/31/18 12/31/17 Interest rate swap contracts Other current assets $ — $ — Other accruals $ 6 $ — Interest rate swap contracts Other assets — — Other liabilities 11 7 Foreign currency contracts Other current assets 5 25 Other accruals 23 20 Foreign currency contracts Other assets — — Other liabilities 57 46 Commodity contracts Other current assets — — Other accruals — — Total designated $ 5 $ 25 $ 97 $ 73 Other financial instruments Marketable securities Other current assets $ 51 $ 14 Total other financial instruments $ 51 $ 14 The carrying amount of cash, cash equivalents, accounts receivable and short-term debt approximated fair value as of March 31, 2018 and December 31, 2017 . The estimated fair value of the Company’s long-term debt, including the current portion, as of March 31, 2018 and December 31, 2017 , was $6,659 and $6,799 , respectively, and the related carrying value was $6,550 and $6,566 , respectively. The estimated fair value of long-term debt was derived principally from quoted prices on the Company’s outstanding fixed-term notes (Level 2 valuation). Fair Value Hedges The Company has designated all interest rate swap contracts and certain foreign currency forward and option contracts as fair value hedges, for which the gain or loss on the derivative and the offsetting gain or loss on the hedged item are recognized in current earnings. The impact of foreign currency contracts is primarily recognized in Selling, general and administrative expenses and the impact of interest rate swap contracts is recognized in Interest (income) expense, net. Activity related to fair value hedges recorded during the three months ended March 31, 2018 and 2017 was as follows: 2018 2017 Foreign Interest Total Foreign Interest Total Notional Value at March 31, $ 530 $ 1,000 $ 1,530 $ 246 $ 850 $ 1,096 Three months ended March 31, Gain (loss) on derivatives (13 ) (10 ) (23 ) 2 (2 ) — Gain (loss) on hedged items 13 10 23 (2 ) 2 — Cash Flow Hedges All of the Company’s commodity contracts and certain foreign currency forward contracts have been designated as cash flow hedges, for which the effective portion of the gain or loss is reported as a component of Other comprehensive income ( “ OCI ” ) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Activity related to cash flow hedges recorded during the three months ended March 31, 2018 and 2017 was as follows: 2018 2017 Foreign Currency Contracts Commodity Contracts Total Foreign Currency Contracts Commodity Contracts Total Notional Value at March 31, $ 754 $ — $ 754 $ 667 $ 4 $ 671 Three months ended March 31, Gain (loss) recognized in OCI (8 ) — (8 ) (13 ) — (13 ) Gain (loss) reclassified into Cost of sales 6 — 6 3 — 3 The net gain (loss) recognized in OCI for both foreign currency contracts and commodity contracts is generally expected to be recognized in Cost of sales within the next twelve months. Net Investment Hedges The Company has designated certain foreign currency forward and option contracts and certain foreign currency-denominated debt as net investment hedges, for which the gain or loss on the instrument is reported as a component of Cumulative translation adjustments within OCI, along with the offsetting gain or loss on the hedged items. Activity related to net investment hedges recorded during the three months ended March 31, 2018 and 2017 was as follows: 2018 2017 Foreign Currency Contracts Foreign Currency Debt Total Foreign Currency Contracts Foreign Currency Debt Total Notional Value at March 31, $ 541 $ 1,233 $ 1,774 $ 655 $ 1,206 $ 1,861 Three months ended March 31, Gain (loss) on instruments (18 ) (19 ) (37 ) (18 ) (16 ) (34 ) Gain (loss) on hedged items 18 19 37 20 16 36 Other Financial Instruments Other financial instruments are classified as Other current assets or Other assets. Other financial instruments classified as Other current assets include marketable securities consisting of bank deposits of $51 with original maturities greater than 90 days carried at fair value (Level 1 valuation) and the current portion of bonds issued by the Argentinian government in the amount of $4 classified as held-to-maturity and carried at amortized cost. Through its subsidiary in Argentina, the Company has invested in U.S. dollar-linked, devaluation-protected bonds and Argentinian peso-denominated bonds issued by the Argentinian government. As of March 31, 2018 , the amortized cost was $4 and their approximate fair value was $4 (Level 2 valuation). |
Use of Estimates (Policies)
Use of Estimates (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Provisions for certain expenses, including income taxes, advertising and consumer promotion, are based on full year assumptions and are included in the accompanying Condensed Consolidated Financial Statements in proportion with estimated annual tax rates, the passage of time or estimated annual sales. |
Recent Accounting Pronouncements | In February 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income” (“ASU 2018-02”), which permits the reclassification of stranded tax effects resulting from the Tax Cuts and Jobs Act (the “TCJA” or “U.S. tax reform”) from Accumulated other comprehensive income (loss) to Retained earnings. This new guidance is effective for the Company beginning on January 1, 2019, with early adoption permitted, and must be applied either in the period of adoption or retrospectively to periods in which the effects of the TCJA are recognized. The Company elected to adopt this new guidance early, beginning on January 1, 2018, and reclassified $163 in the current period. In August 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities,” amending the eligibility criteria for hedged items and transactions to expand an entity’s ability to hedge nonfinancial and financial risk components. The new guidance eliminates the requirement to separately measure and present hedge ineffectiveness and aligns the presentation of hedge gains and losses with the underlying hedge item. The new guidance also simplifies the hedge documentation and hedge effectiveness assessment requirements. The new guidance is effective for the Company beginning on January 1, 2019, with early adoption permitted. The amended presentation and disclosure requirements must be adopted on a prospective basis, while any amendments to cash flow and net investment hedge relationships that exist on the date of adoption must be applied on a “modified retrospective” basis, meaning a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the year of adoption. While the Company is currently assessing the impact of the new standard, this new guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In May 2017, the FASB issued ASU No. 2017-09, “Compensation–Stock Compensation (Topic 718): Scope of Modification Accounting,” clarifying when a change to the terms or conditions of a stock-based payment award must be accounted for as a modification. The new guidance requires modification accounting if the fair value, vesting condition or the classification of the award is not the same immediately before and after a change to the terms and conditions of the award. The new guidance was effective for the Company on a prospective basis beginning on January 1, 2018 and did not impact the Company’s Consolidated Financial Statements as it is not the Company’s practice to change either the terms or conditions of stock-based payment awards once they are granted. In March 2017, the FASB issued ASU No. 2017-07, “Compensation–Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” changing the presentation of the net periodic benefit cost on the Statement of Income and limiting the amount of net periodic benefit cost eligible for capitalization to assets. The new guidance permits only the service cost component of net periodic benefit cost to be eligible for capitalization. The new guidance also requires entities to present the service cost component of net periodic benefit cost together with compensation costs arising from services rendered by employees during the period. The non-service related components of net periodic benefit cost, which include interest, expected return on assets, amortization of prior service costs and actuarial gains and losses, are required to be presented outside of Operating profit. The line item or items used to present the other components of net periodic benefit cost must be disclosed in the Notes to the Consolidated Financial Statements, if not separately described on the Statement of Income. The new presentation requirement is required to be adopted on a “full retrospective” basis, meaning the standard is applied to all of the periods presented in the financial statements, while the limitation on capitalization can only be adopted on a prospective basis. Effective January 1, 2018, as required, the Company adopted this standard on a retrospective basis. As permitted by the new guidance, the Company used the amounts disclosed in its pension and other postretirement benefit plan note for the prior comparative periods as the basis for applying the retrospective presentation requirements. As a result, for all periods presented, only the service related component of pension and other postretirement benefit costs is included in Operating profit. The non-service related components are included in a new line item, “Non-service related postretirement costs,” which is below Operating profit. For the quarter ended March 31, 2017, the Company reclassified $26 and $1 of non-service related components of pension and other postretirement benefit costs from Selling, general and administrative expenses and Other (income) expense, net, respectively, to Non-service related postretirement costs. Adoption of this standard had no effect on Net income attributable to Colgate-Palmolive Company, Earnings per common share or Cash flow. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” eliminating the requirement to calculate the implied fair value, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard is effective for the Company on a prospective basis beginning on January 1, 2020, with early adoption permitted. This new guidance is not expected to have an impact on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805): Clarifying the Definition of a Business,” which provides additional guidance on evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The guidance requires an entity to evaluate if substantially all of the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets. If this threshold is met, the new guidance would define this as an asset acquisition; otherwise, the entity then evaluates whether the asset meets the requirement that a business include, at a minimum, an input and substantive process that together significantly contribute to the ability to create outputs. The guidance was effective for the Company on a prospective basis beginning on January 1, 2018. This new guidance did not have an impact on the Company’s Consolidated Financial Statements. In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which clarifies how certain cash receipts and payments are to be presented in the statement of cash flows. The guidance was effective for the Company on January 1, 2018. This new guidance did not have an impact on the Company’s Consolidated Financial Statements. In February 2016, the FASB issued its final standard on lease accounting, ASU No. 2016-02, “Leases (Topic 842),” which supersedes Topic 840, “Leases.” The new accounting standard requires the recognition of right-of-use assets and lease liabilities for all long-term leases, including operating leases, on the balance sheet. The new standard also provides additional guidance on the measurement of the right-of-use assets and lease liabilities and will require enhanced disclosures about the Company’s leasing arrangements. Under current accounting standards, substantially all of the Company’s leases are considered operating leases and, as such, are not recognized on the Consolidated Balance Sheet. This new standard is effective for the Company beginning on January 1, 2019, with early adoption permitted. The standard requires a “modified retrospective” adoption, meaning the standard is applied to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Company is currently assessing the impact of the new standard on its Consolidated Financial Statements. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments–Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The updated guidance enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation and disclosure. The amendment to the standard was effective for the Company beginning on January 1, 2018 and did not have an impact on the Company’s Consolidated Financial Statements. In May 2014, the FASB and the International Accounting Standards Board issued their final converged standard on revenue recognition. The standard, issued as ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” by the FASB, provides a comprehensive revenue recognition model for all contracts with customers and supersedes current revenue recognition guidance. The revenue standard contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognized. The underlying principle is that an entity will recognize revenue to depict the transfer of goods or services to its customers at an amount that the entity expects to be entitled to in exchange for those goods or services. The new standard also includes enhanced disclosures. During 2016, the FASB issued several accounting updates (ASU No. 2016-08, 2016-10 and 2016-12) to clarify implementation guidance and correct unintended application of the guidance. The standard allows for either full retrospective adoption or modified retrospective adoption. The Company adopted the new standard on January 1, 2018, on a “modified retrospective” basis, which did not have a material impact on the Company’s Consolidated Financial Statements. The Company recognized the cumulative effect of initially applying the new revenue standard as an adjustment to the 2018 opening balance of retained earnings. Results for periods beginning on or after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted and continue to be reported in accordance with the prior accounting guidance under Topic 605, “Revenue Recognition.” The new accounting standard changes only the timing of when certain of the Company’s sales are recorded and does not change the amount at which sales are recorded. The application of the new accounting standard did not have a material impact on the Company’s Consolidated Financial Statements for the period ended March 31, 2018 and is not expected to have a material impact on the Company’s Consolidated Financial Statements in future periods. Updated Accounting Policies Revenue Recognition Accounting Policy The Company’s revenue contracts represent a single performance obligation to sell its products to trade customers. Sales are recorded at the time control of the products is transferred to trade customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the products. Control is the ability of trade customers to direct the “use of” and “obtain” the benefit from our products. In evaluating the timing of the transfer of control of products to trade customers, the Company considers several control indicators, including significant risks and rewards of products, the Company’s right to payment and the legal title of the products. Based on the assessment of control indicators, sales are generally recognized when products are delivered to trade customers. Net sales reflect the transaction prices for contracts, which include units shipped at selling list prices reduced by variable consideration. Variable consideration includes expected sales returns and the cost of current and continuing promotional programs. Current promotional programs primarily include product listing allowances and co-operative advertising arrangements. Continuing promotional programs are predominantly consumer coupons and volume-based sales incentive arrangements. The cost of promotional programs is estimated using the expected value method considering all reasonably available information, including the Company’s historical experience and its current expectations, and is reflected in the transaction price when sales are recorded. Adjustments to the cost of promotional programs in subsequent periods are generally not material, as the Company’s promotional programs are typically of short duration, thereby reducing the uncertainty inherent in such estimates. Sales returns are generally accepted at the Company’s discretion and are not material to the Company’s Consolidated Financial Statements. The Company’s contracts with trade customers do not have significant financing components or non-cash consideration and the Company does not have unbilled revenue or significant amounts of prepayments from customers. The Company records Net sales excluding taxes collected on its sales to its trade customers. Shipping and handling activities are accounted for as contract fulfillment costs and classified as Selling, general and administrative expenses. |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | Total purchase price consideration of $730 has been allocated on a preliminary basis to the net assets acquired based on their respective estimated fair values at January 2018, as follows: Recognized amounts of assets acquired and liabilities assumed: Inventories $ 7 Other current assets 9 Other intangible assets 438 Goodwill 332 Other current liabilities (6 ) Deferred income taxes (50 ) Fair value of net assets acquired $ 730 |
Restructuring and Related Imp23
Restructuring and Related Implementation Charges (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | For the three months ended March 31, 2018 and 2017 , restructuring and related implementation charges are reflected in the Condensed Consolidated Statements of Income as follows: Three Months Ended March 31, 2018 2017 Cost of sales $ 6 $ 14 Selling, general and administrative expenses 5 21 Other (income) expense, net 13 10 Non-service related postretirement costs 4 1 Total Global Growth and Efficiency Program charges, pretax $ 28 $ 46 Total Global Growth and Efficiency Program charges, aftertax $ 20 $ 31 |
Schedule of Percent of Total Restructuring Charges Related To Segment for the period | Total charges incurred for the Global Growth and Efficiency Program relate to initiatives undertaken by the following reportable operating segments: Three Months Ended Program-to-date March 31, Accumulated Charges 2018 2017 North America 37 % 37 % 19 % Latin America 12 % 6 % 4 % Europe 2 % 2 % 21 % Asia Pacific 18 % 2 % 3 % Africa/Eurasia 2 % 4 % 6 % Hill ’ s Pet Nutrition 19 % 7 % 7 % Corporate 10 % 42 % 40 % Total 100 % 100 % 100 % |
Schedule of Restructuring and Related Costs Incurred to Date | Since the inception of the Global Growth and Efficiency Program in the fourth quarter of 2012, the Company has incurred cumulative pretax charges of $1,589 ( $1,173 aftertax) in connection with the implementation of various projects as follows: Cumulative Charges as of March 31, 2018 Employee-Related Costs $ 646 Incremental Depreciation 91 Asset Impairments 36 Other 816 Total $ 1,589 |
Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the activity for the restructuring and related implementation charges discussed above and the related accruals: Three Months Ended March 31, 2018 Employee-Related Costs Incremental Depreciation Asset Impairments Other Total Balance at December 31, 2017 $ 127 $ — $ — $ 107 $ 234 Charges 18 1 — 9 28 Cash payments (39 ) — — (16 ) (55 ) Charges against assets (4 ) (1 ) — — (5 ) Foreign exchange 2 — — — 2 Balance at March 31, 2018 $ 104 $ — $ — $ 100 $ 204 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory, Net, Items Net of Reserve Alternative [Abstract] | |
Inventories By Major Class | Inventories by major class are as follows: March 31, December 31, Raw materials and supplies $ 258 $ 267 Work-in-process 49 42 Finished goods 1,005 912 Total Inventories $ 1,312 $ 1,221 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' Equity | Changes in the components of Shareholders’ Equity for the three months ended March 31, 2018 are as follows: Colgate-Palmolive Company Shareholders’ Equity Noncontrolling Interests Common Stock Additional Paid-in Capital Unearned Compensation Treasury Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Balance, December 31, 2017 $ 1,466 $ 1,984 $ (5 ) $ (20,181 ) $ 20,531 $ (3,855 ) $ 303 Net income 634 44 Other comprehensive income (loss), net of tax 118 3 Dividends (718 ) Stock-based compensation expense 28 Shares issued for stock options 48 77 Shares issued for restricted stock units (12 ) 12 Treasury stock acquired (351 ) Other (1 ) 3 2 134 (163 ) (1) Balance, March 31, 2018 $ 1,466 $ 2,047 $ (2 ) $ (20,441 ) $ 20,581 $ (3,900 ) $ 350 (1) As a result of the early adoption of ASU 2018-02, the Company reclassified the stranded tax effects in Accumulated other comprehensive income (loss) resulting from the TCJA to Retained earnings. See Note 3, Recent Accounting Pronouncements and Updated Accounting Policies for additional information. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | For the three months ended March 31, 2018 and 2017 , earnings per share were as follows: Three Months Ended March 31, 2018 March 31, 2017 Net income attributable to Colgate-Palmolive Company Shares (millions) Per Share Net income attributable to Colgate-Palmolive Company Shares (millions) Per Share Basic EPS $ 634 875.4 $ 0.72 $ 570 884.7 $ 0.64 Stock options and restricted stock units 4.5 6.3 Diluted EPS $ 634 879.9 $ 0.72 $ 570 891.0 $ 0.64 |
Other Comprehensive Income (L27
Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of Comprehensive Income (Loss) | Additions to and reclassifications out of Accumulated other comprehensive income (loss) attributable to the Company for the three months ended March 31, 2018 and 2017 were as follows: 2018 2017 Pretax Net of Tax Pretax Net of Tax Cumulative translation adjustments $ 96 $ 105 $ 103 $ 125 Retirement plans and other retiree benefits: Net actuarial gain (loss) and prior service costs arising during the period — — — — Amortization of net actuarial loss, transition and prior service costs (1) 18 14 18 13 Retirement plans and other retiree benefits adjustments 18 14 18 13 Cash flow hedges: Unrealized gains (losses) on cash flow hedges (8 ) (6 ) (13 ) (8 ) Reclassification of (gains) losses into net earnings on cash flow hedges (2) 6 5 (3 ) (2 ) Gains (losses) on cash flow hedges (2 ) (1 ) (16 ) (10 ) Total Other comprehensive income (loss) $ 112 $ 118 $ 105 $ 128 (1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 10 , Retirement Plans and Other Retiree Benefits for additional details. (2) These (gains) losses are reclassified into Cost of sales. See Note 14 , Fair Value Measurements and Financial Instruments for additional details. |
Retirement Plans and Other Re28
Retirement Plans and Other Retiree Benefits (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Components Of Net Periodic Benefit Cost | Components of Net periodic benefit cost for the three months ended March 31, 2018 and 2017 were as follows: Pension Benefits Other Retiree Benefits United States International Three Months Ended March 31, 2018 2017 2018 2017 2018 2017 Service cost $ — $ — $ 4 $ 4 $ 4 $ 4 Interest cost 21 24 6 5 10 11 Expected return on plan assets (29 ) (27 ) (6 ) (5 ) — — Amortization of transition and prior service costs (credits) — — — — — — Amortization of actuarial loss (gain) 12 12 2 2 4 4 Net periodic benefit cost $ 4 $ 9 $ 6 $ 6 $ 18 $ 19 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Net Sales and Operating Profit by Segment | The Company’s Net sales of Oral, Personal and Home Care and Pet Nutrition products accounted for the following percentages of the Company’s Net sales: Three Months Ended March 31, 2018 2017 Net sales Oral Care 49 % 49 % Personal Care 19 % 18 % Home Care 17 % 18 % Pet Nutrition 15 % 15 % Total Net sales 100 % 100 % Operating profit by segment was as follows: Three Months Ended March 31, 2018 2017 Operating profit Oral, Personal and Home Care North America $ 257 $ 247 Latin America 273 271 Europe 162 142 Asia Pacific 226 219 Africa/Eurasia 50 46 Total Oral, Personal and Home Care 968 925 Pet Nutrition 164 163 Corporate (149 ) (176 ) Total Operating profit $ 983 $ 912 Net sales by segment was as follows: Three Months Ended March 31, 2018 2017 Net sales Oral, Personal and Home Care North America $ 827 $ 760 Latin America 929 924 Europe 648 558 Asia Pacific 759 720 Africa/Eurasia 255 246 Total Oral, Personal and Home Care 3,418 3,208 Pet Nutrition 584 554 Total Net sales $ 4,002 $ 3,762 |
Fair Value Measurements and F30
Fair Value Measurements and Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments and Fair Value Measurements [Abstract] | |
Schedule of derivative instruments | The following table summarizes the fair value of the Company’s derivative instruments and other financial instruments which are carried at fair value in the Company’s Consolidated Balance Sheets at March 31, 2018 and December 31, 2017 : Assets Liabilities Account Fair Value Account Fair Value Designated derivative instruments 3/31/18 12/31/17 3/31/18 12/31/17 Interest rate swap contracts Other current assets $ — $ — Other accruals $ 6 $ — Interest rate swap contracts Other assets — — Other liabilities 11 7 Foreign currency contracts Other current assets 5 25 Other accruals 23 20 Foreign currency contracts Other assets — — Other liabilities 57 46 Commodity contracts Other current assets — — Other accruals — — Total designated $ 5 $ 25 $ 97 $ 73 Other financial instruments Marketable securities Other current assets $ 51 $ 14 Total other financial instruments $ 51 $ 14 |
Activity related to fair value hedges | Activity related to fair value hedges recorded during the three months ended March 31, 2018 and 2017 was as follows: 2018 2017 Foreign Interest Total Foreign Interest Total Notional Value at March 31, $ 530 $ 1,000 $ 1,530 $ 246 $ 850 $ 1,096 Three months ended March 31, Gain (loss) on derivatives (13 ) (10 ) (23 ) 2 (2 ) — Gain (loss) on hedged items 13 10 23 (2 ) 2 — |
Activity related to cash flow hedges | Activity related to cash flow hedges recorded during the three months ended March 31, 2018 and 2017 was as follows: 2018 2017 Foreign Currency Contracts Commodity Contracts Total Foreign Currency Contracts Commodity Contracts Total Notional Value at March 31, $ 754 $ — $ 754 $ 667 $ 4 $ 671 Three months ended March 31, Gain (loss) recognized in OCI (8 ) — (8 ) (13 ) — (13 ) Gain (loss) reclassified into Cost of sales 6 — 6 3 — 3 |
Activity related to net investment hedges | Activity related to net investment hedges recorded during the three months ended March 31, 2018 and 2017 was as follows: 2018 2017 Foreign Currency Contracts Foreign Currency Debt Total Foreign Currency Contracts Foreign Currency Debt Total Notional Value at March 31, $ 541 $ 1,233 $ 1,774 $ 655 $ 1,206 $ 1,861 Three months ended March 31, Gain (loss) on instruments (18 ) (19 ) (37 ) (18 ) (16 ) (34 ) Gain (loss) on hedged items 18 19 37 20 16 36 |
Recent Accounting Pronounceme31
Recent Accounting Pronouncements and Updated Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Selling, general and administrative expenses | $ 1,392 | $ 1,336 | [1] |
Other (income) expense, net | 33 | 21 | [1] |
Accounting Standards Update 2018-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Tax reform, reclassification from AOCI to retained earnings, tax effect | $ 163 | ||
Reclassifying Adjustment | Accounting Standards Update 2017-07 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Selling, general and administrative expenses | 26 | ||
Other (income) expense, net | $ 1 | ||
[1] | Prior year amounts have been reclassified to conform to the current year presentation as a result of the adoption of Accounting Standards Update (“ASU”) No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” For further information regarding the impact of the reclassification, see Note 1, Basis of Presentation, Note 3, Recent Accounting Pronouncements and Updated Accounting Policies and Note 13, Segment Information to the Condensed Consolidated Financial Statements. |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | ||
Jan. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 2,572 | $ 2,218 | |
PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Payments to acquire business | $ 730 | ||
Other intangible assets | $ 438 | ||
Useful life | 25 years | ||
Goodwill | $ 332 | ||
North America | PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 332 | ||
Percent of goodwill deductible for tax purposes | 40.00% | ||
Trademarks | PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Other intangible assets | $ 292 | ||
Customer Relationships | PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Other intangible assets | $ 146 | ||
Minimum | PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Useful life | 12 years | ||
Maximum | PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Useful life | 13 years |
Acquisitions and Divestitures33
Acquisitions and Divestitures - Schedule of Recognized Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Jan. 31, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||
Goodwill | $ 2,572 | $ 2,218 | |
PCA Skin and Elta MD | |||
Business Acquisition [Line Items] | |||
Inventories | $ 7 | ||
Other current assets | 9 | ||
Other intangible assets | 438 | ||
Goodwill | 332 | ||
Other current liabilities | (6) | ||
Deferred income taxes | (50) | ||
Fair value of net assets acquired | $ 730 |
Restructuring and Related Imp34
Restructuring and Related Implementation Charges - Narrative (Details) - Global Growth and Efficiency Program $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)position | Mar. 31, 2017USD ($) | |
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total charges resulting in cash expenditure | 80.00% | |
Total Global Growth and Efficiency Program charges, pretax | $ 28 | $ 46 |
Pet Nutrition | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 10.00% | |
Corporate | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 40.00% | |
North America | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 15.00% | |
Europe | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 20.00% | |
Latin America | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 5.00% | |
Asia Pacific | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 5.00% | |
Africa/Eurasia | ||
Restructuring Cost and Reserve [Line Items] | ||
Expected percent of total restructuring charges related to segment for the duration of the program | 5.00% | |
Employee-Related Costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated percent of total cumulative pretax charges of implementing restructuring program by category | 50.00% | |
Total Global Growth and Efficiency Program charges, pretax | $ 18 | |
Incremental Depreciation And Asset Impairment | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated percent of total cumulative pretax charges of implementing restructuring program by category | 10.00% | |
Charges Resulting Directly From Exit Activities | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated percent of total cumulative pretax charges of implementing restructuring program by category | 20.00% | |
Implementation Of New Strategies | ||
Restructuring Cost and Reserve [Line Items] | ||
Estimated percent of total cumulative pretax charges of implementing restructuring program by category | 20.00% | |
Third party Incremental Cost | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | $ 8 | |
Contract Termination | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | 1 | |
Minimum | Expected Completion Date 2019 | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring program expected cost before tax | 1,730 | |
Restructuring program expected cost after tax | 1,280 | |
Restructuring program expected cost, current fiscal year, before tax | 100 | |
Restructuring program expected cost, current fiscal year, after tax | $ 75 | |
Restructuring and related cost, expected number of positions eliminated (in positions) | position | 3,800 | |
Maximum | Expected Completion Date 2019 | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring program expected cost before tax | $ 1,885 | |
Restructuring program expected cost after tax | 1,380 | |
Restructuring program expected cost, current fiscal year, before tax | 175 | |
Restructuring program expected cost, current fiscal year, after tax | $ 125 | |
Restructuring and related cost, expected number of positions eliminated (in positions) | position | 4,400 |
Restructuring and Related Imp35
Restructuring and Related Implementation Charges - Summary of Restructuring and Related Costs (Details) - Global Growth and Efficiency Program - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | $ 28 | $ 46 |
Total Global Growth and Efficiency Program charges, aftertax | 20 | 31 |
Cost of sales | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | 6 | 14 |
Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | 5 | 21 |
Other (income) expense, net | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | 13 | 10 |
Non-service related postretirement costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | $ 4 | $ 1 |
Restructuring and Related Imp36
Restructuring and Related Implementation Charges - Restructuring Charges Incurred, by Segment (Details) - Global Growth and Efficiency Program | 3 Months Ended | 66 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 100.00% | 100.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 100.00% | ||
Pet Nutrition | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 19.00% | 7.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 7.00% | ||
Corporate | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 10.00% | 42.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 40.00% | ||
North America | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 37.00% | 37.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 19.00% | ||
Latin America | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 12.00% | 6.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 4.00% | ||
Europe | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 2.00% | 2.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 21.00% | ||
Asia Pacific | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 18.00% | 2.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 3.00% | ||
Africa/Eurasia | |||
Restructuring Cost and Reserve [Line Items] | |||
Percent of Total Restructuring Charges Related to Segment | 2.00% | 4.00% | |
Percent of Restructuring Charges Related to Segment, Program-to-date Accumulated Charges | 6.00% |
Restructuring and Related Imp37
Restructuring and Related Implementation Charges - Summary of Restructuring Charges, Cumulative to Date (Details) - Global Growth and Efficiency Program $ in Millions | Mar. 31, 2018USD ($) |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | $ 1,589 |
Aftertax charges related to the Restructuring Program to date | 1,173 |
Employee-Related Costs | |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | 646 |
Incremental Depreciation | |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | 91 |
Asset Impairments | |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | 36 |
Other | |
Restructuring Cost and Reserve [Line Items] | |
Pretax charges related to the Restructuring Program to date | $ 816 |
Restructuring and Related Imp38
Restructuring and Related Implementation Charges - Restructuring Activity and Related Accruals (Details) - Global Growth and Efficiency Program - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | $ 234 | |
Charges | 28 | $ 46 |
Cash payments | (55) | |
Charges against assets | (5) | |
Foreign exchange | 2 | |
Ending Balance | 204 | |
Employee-Related Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 127 | |
Charges | 18 | |
Cash payments | (39) | |
Charges against assets | (4) | |
Foreign exchange | 2 | |
Ending Balance | 104 | |
Incremental Depreciation | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Charges | 1 | |
Cash payments | 0 | |
Charges against assets | (1) | |
Foreign exchange | 0 | |
Ending Balance | 0 | |
Asset Impairments | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Charges | 0 | |
Cash payments | 0 | |
Charges against assets | 0 | |
Foreign exchange | 0 | |
Ending Balance | 0 | |
Other | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 107 | |
Charges | 9 | |
Cash payments | (16) | |
Charges against assets | 0 | |
Foreign exchange | 0 | |
Ending Balance | $ 100 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory, Net, Items Net of Reserve Alternative [Abstract] | ||
Raw materials and supplies | $ 258 | $ 267 |
Work-in-process | 49 | 42 |
Finished goods | 1,005 | 912 |
Total Inventories | $ 1,312 | $ 1,221 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | ||
Changes in Shareholders' Equity [Roll Forward] | ||||
Beginning balance | $ 243 | |||
Net income | 678 | $ 611 | [1] | |
Other comprehensive income (loss), net of tax | 121 | 135 | ||
Ending balance | 101 | |||
Accumulated other comprehensive income (loss), cumulative translation losses | 2,832 | $ 2,927 | ||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefits costs | 1,062 | $ 923 | ||
Common Stock | ||||
Changes in Shareholders' Equity [Roll Forward] | ||||
Beginning balance | 1,466 | |||
Ending balance | 1,466 | |||
Additional Paid-in Capital | ||||
Changes in Shareholders' Equity [Roll Forward] | ||||
Beginning balance | 1,984 | |||
Stock-based compensation expense | 28 | |||
Shares issued for stock options | 48 | |||
Shares issued for restricted stock units | (12) | |||
Other | (1) | |||
Ending balance | 2,047 | |||
Unearned Compensation | ||||
Changes in Shareholders' Equity [Roll Forward] | ||||
Beginning balance | (5) | |||
Other | 3 | |||
Ending balance | (2) | |||
Treasury Stock | ||||
Changes in Shareholders' Equity [Roll Forward] | ||||
Beginning balance | (20,181) | |||
Shares issued for stock options | 77 | |||
Shares issued for restricted stock units | 12 | |||
Treasury stock acquired | (351) | |||
Other | 2 | |||
Ending balance | (20,441) | |||
Retained Earnings | ||||
Changes in Shareholders' Equity [Roll Forward] | ||||
Beginning balance | 20,531 | |||
Net income | 634 | |||
Dividends | (718) | |||
Other | 134 | |||
Ending balance | 20,581 | |||
Accumulated Other Comprehensive Income (Loss) | ||||
Changes in Shareholders' Equity [Roll Forward] | ||||
Beginning balance | (3,855) | |||
Other comprehensive income (loss), net of tax | 118 | $ 128 | ||
Other | (163) | |||
Ending balance | (3,900) | |||
Noncontrolling Interests | ||||
Changes in Shareholders' Equity [Roll Forward] | ||||
Beginning balance | 303 | |||
Net income | 44 | |||
Other comprehensive income (loss), net of tax | 3 | |||
Ending balance | $ 350 | |||
[1] | Prior year amounts have been reclassified to conform to the current year presentation as a result of the adoption of Accounting Standards Update (“ASU”) No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” For further information regarding the impact of the reclassification, see Note 1, Basis of Presentation, Note 3, Recent Accounting Pronouncements and Updated Accounting Policies and Note 13, Segment Information to the Condensed Consolidated Financial Statements. |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Net income attributable to Colgate-Palmolive Company | |||
Basic EPS | $ 634 | $ 570 | |
Diluted EPS | $ 634 | $ 570 | |
Shares | |||
Basic EPS (in shares) | 875,400,000 | 884,700,000 | |
Stock options and restricted stock units (in shares) | 4,500,000 | 6,300,000 | |
Diluted EPS (in shares) | 879,900,000 | 891,000,000 | |
Per Share | |||
Basic EPS (in dollars per share) | $ 0.72 | $ 0.64 | [1] |
Diluted EPS (in dollars per share) | $ 0.72 | $ 0.64 | [1] |
Antidilutive securities excluded from computation of earnings per share (in shares) | 16,287,263 | 9,182,150 | |
[1] | Prior year amounts have been reclassified to conform to the current year presentation as a result of the adoption of Accounting Standards Update (“ASU”) No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” For further information regarding the impact of the reclassification, see Note 1, Basis of Presentation, Note 3, Recent Accounting Pronouncements and Updated Accounting Policies and Note 13, Segment Information to the Condensed Consolidated Financial Statements. |
Other Comprehensive Income (L42
Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total Other comprehensive income (loss), net of tax | $ 121 | $ 135 |
Cumulative translation adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss), Pretax | 96 | 103 |
Total Other comprehensive income (loss), net of tax | 105 | 125 |
Retirement plans and other retiree benefits adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss), before reclassifications, Pretax | 0 | 0 |
Reclassification from AOCI, Pretax | 18 | 18 |
Other comprehensive income (loss), Pretax | 18 | 18 |
Other comprehensive income (loss), before reclassifications, Net of Tax | 0 | 0 |
Reclassification from AOCI, Net of Tax | 14 | 13 |
Total Other comprehensive income (loss), net of tax | 14 | 13 |
Cash flow hedges: | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss), before reclassifications, Pretax | (8) | (13) |
Reclassification from AOCI, Pretax | 6 | (3) |
Other comprehensive income (loss), Pretax | (2) | (16) |
Other comprehensive income (loss), before reclassifications, Net of Tax | (6) | (8) |
Reclassification from AOCI, Net of Tax | 5 | (2) |
Total Other comprehensive income (loss), net of tax | (1) | (10) |
Total Other comprehensive income (loss) | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Other comprehensive income (loss), Pretax | 112 | 105 |
Total Other comprehensive income (loss), net of tax | $ 118 | $ 128 |
Retirement Plans and Other Re43
Retirement Plans and Other Retiree Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other Retiree Benefits | ||
Components of net periodic benefit cost | ||
Service cost | $ 4 | $ 4 |
Interest cost | 10 | 11 |
Expected return on plan assets | 0 | 0 |
Amortization of transition and prior service costs (credits) | 0 | 0 |
Amortization of actuarial loss (gain) | 4 | 4 |
Net periodic benefit cost | 18 | 19 |
United States | Pension Benefits | ||
Components of net periodic benefit cost | ||
Service cost | 0 | 0 |
Interest cost | 21 | 24 |
Expected return on plan assets | (29) | (27) |
Amortization of transition and prior service costs (credits) | 0 | 0 |
Amortization of actuarial loss (gain) | 12 | 12 |
Net periodic benefit cost | 4 | 9 |
Voluntary benefit plan contribution | 0 | 57 |
International | Pension Benefits | ||
Components of net periodic benefit cost | ||
Service cost | 4 | 4 |
Interest cost | 6 | 5 |
Expected return on plan assets | (6) | (5) |
Amortization of transition and prior service costs (credits) | 0 | 0 |
Amortization of actuarial loss (gain) | 2 | 2 |
Net periodic benefit cost | $ 6 | $ 6 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Contingency [Line Items] | |||
Tax reform, provisional charge | $ 275 | ||
Tax benefit from foreign Supreme Court decision | $ 30 | ||
Tax benefit from prior year tax positions currently being challenged | $ 15 | ||
Accounting Standards Update 2018-02 | |||
Income Tax Contingency [Line Items] | |||
Tax reform, reclassification from AOCI to retained earnings, tax effect | $ 163 |
Contingencies (Details)
Contingencies (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |||
Sep. 30, 2015appeal | Dec. 31, 2014USD ($)company | Mar. 31, 2018USD ($)casecountry_and_territory | Dec. 31, 2017case | Jul. 21, 2017USD ($) | |
Loss Contingencies [Line Items] | |||||
Minimum number of countries and territories serving consumers (more than) (in countries and territories) | country_and_territory | 200 | ||||
Brazilian internal revenue authority, matter 1 | $ 165 | ||||
Loss contingency, number of appeals lost (in appeals) | appeal | 1 | ||||
Brazilian internal revenue authority, matter 2 | $ 74 | ||||
Number of consumer goods companies | company | 13 | ||||
Fine imposed french competition authority | $ 57 | ||||
Fine imposed french competition authority - as a result of Sanex acquisition | $ 25 | ||||
Fine imposed by greek competition authority | $ 11 | ||||
Loss contingency, pending claims, number (in cases) | case | 199 | 193 | |||
Loss contingency, new claims filed, number (in cases) | case | 25 | ||||
Loss contingency, claims dismissed or settled, number (in cases) | case | 19 | ||||
Minimum | |||||
Loss Contingencies [Line Items] | |||||
Range of reasonably possible losses | $ 0 | ||||
Maximum | |||||
Loss Contingencies [Line Items] | |||||
Range of reasonably possible losses | $ 250 |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | ||
Segment Reporting Information [Line Items] | |||
Number of product segments (in segments) | segment | 2 | ||
Number of operating segments (in segments) | segment | 5 | ||
Non-service related postretirement costs | $ 24 | $ 27 | [1] |
Operating Segments | Pet Nutrition | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 6 | ||
Corporate | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 2 | ||
North America | Operating Segments | Oral, Personal and Home Care | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 14 | ||
Latin America | Operating Segments | Oral, Personal and Home Care | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 2 | ||
Europe | Operating Segments | Oral, Personal and Home Care | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 2 | ||
Asia Pacific | Operating Segments | Oral, Personal and Home Care | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 0 | ||
Africa/Eurasia | Operating Segments | Oral, Personal and Home Care | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 1 | ||
Sales Revenue, Net | |||
Segment Reporting Information [Line Items] | |||
Percentage of consolidated Net sales represented by sales outside US | 75.00% | ||
Percentage of consolidated Net sales coming from emerging markets | 50.00% | ||
Global Growth and Efficiency Program | |||
Segment Reporting Information [Line Items] | |||
Total Global Growth and Efficiency Program charges, pretax | $ 28 | 46 | |
Global Growth and Efficiency Program | Corporate | Included in Operating profit (loss) | |||
Segment Reporting Information [Line Items] | |||
Total Global Growth and Efficiency Program charges, pretax | $ 24 | $ 45 | |
[1] | Prior year amounts have been reclassified to conform to the current year presentation as a result of the adoption of Accounting Standards Update (“ASU”) No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” For further information regarding the impact of the reclassification, see Note 1, Basis of Presentation, Note 3, Recent Accounting Pronouncements and Updated Accounting Policies and Note 13, Segment Information to the Condensed Consolidated Financial Statements. |
Segment Information - Schedule
Segment Information - Schedule of Segment Information (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | ||
Segment Reporting Information [Line Items] | |||
Number of product segments (in segments) | segment | 2 | ||
Number of operating segments (in segments) | segment | 5 | ||
Number of reportable segments (in segments) | segment | 5 | ||
Non-service related postretirement costs | $ 24 | $ 27 | [1] |
Total Net sales | 4,002 | 3,762 | |
Total Operating profit | $ 983 | 912 | [1] |
Sales Revenue, Net | |||
Segment Reporting Information [Line Items] | |||
Percentage of consolidated Net sales represented by sales outside US | 75.00% | ||
Percentage of consolidated Net sales coming from emerging markets | 50.00% | ||
Operating Segments | Oral, Personal and Home Care | |||
Segment Reporting Information [Line Items] | |||
Total Net sales | $ 3,418 | 3,208 | |
Total Operating profit | 968 | 925 | |
Operating Segments | Oral, Personal and Home Care | North America | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 14 | ||
Total Net sales | 827 | 760 | |
Total Operating profit | 257 | 247 | |
Operating Segments | Oral, Personal and Home Care | Latin America | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 2 | ||
Total Net sales | 929 | 924 | |
Total Operating profit | 273 | 271 | |
Operating Segments | Oral, Personal and Home Care | Europe | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 2 | ||
Total Net sales | 648 | 558 | |
Total Operating profit | 162 | 142 | |
Operating Segments | Oral, Personal and Home Care | Asia Pacific | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 0 | ||
Total Net sales | 759 | 720 | |
Total Operating profit | 226 | 219 | |
Operating Segments | Oral, Personal and Home Care | Africa/Eurasia | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 1 | ||
Total Net sales | 255 | 246 | |
Total Operating profit | 50 | 46 | |
Operating Segments | Pet Nutrition | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 6 | ||
Total Net sales | 584 | 554 | |
Total Operating profit | 164 | 163 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Non-service related postretirement costs | 2 | ||
Total Operating profit | $ (149) | $ (176) | |
Product Concentration Risk | Sales Revenue, Net | |||
Segment Reporting Information [Line Items] | |||
Percent of net sales | 100.00% | 100.00% | |
Product Concentration Risk | Oral Care | Sales Revenue, Net | |||
Segment Reporting Information [Line Items] | |||
Percent of net sales | 49.00% | 49.00% | |
Product Concentration Risk | Personal Care | Sales Revenue, Net | |||
Segment Reporting Information [Line Items] | |||
Percent of net sales | 19.00% | 18.00% | |
Product Concentration Risk | Home Care | Sales Revenue, Net | |||
Segment Reporting Information [Line Items] | |||
Percent of net sales | 17.00% | 18.00% | |
Product Concentration Risk | Pet Nutrition | Sales Revenue, Net | |||
Segment Reporting Information [Line Items] | |||
Percent of net sales | 15.00% | 15.00% | |
[1] | Prior year amounts have been reclassified to conform to the current year presentation as a result of the adoption of Accounting Standards Update (“ASU”) No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” For further information regarding the impact of the reclassification, see Note 1, Basis of Presentation, Note 3, Recent Accounting Pronouncements and Updated Accounting Policies and Note 13, Segment Information to the Condensed Consolidated Financial Statements. |
Fair Value Measurements and F48
Fair Value Measurements and Financial Instruments - Fair Value of Derivative Instruments and Other Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Designated derivative instruments | ||
Derivative assets, designated | $ 5 | $ 25 |
Derivative liabilities, designated | 97 | 73 |
Other financial instruments | ||
Total other financial instruments | 51 | 14 |
Other current assets | ||
Other financial instruments | ||
Marketable securities | 51 | 14 |
Other current assets | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative assets, designated | 0 | 0 |
Other current assets | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative assets, designated | 5 | 25 |
Other current assets | Commodity contracts | ||
Designated derivative instruments | ||
Derivative assets, designated | 0 | 0 |
Other assets | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative assets, designated | 0 | 0 |
Other assets | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative assets, designated | 0 | 0 |
Other accruals | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 6 | 0 |
Other accruals | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 23 | 20 |
Other accruals | Commodity contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 0 | 0 |
Other liabilities | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 11 | 7 |
Other liabilities | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | $ 57 | $ 46 |
Fair Value Measurements and F49
Fair Value Measurements and Financial Instruments - Carrying Value and Estimated Fair Value of Long-term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Carrying Value | ||
Debt Instrument [Line Items] | ||
Carrying value of long-term debt | $ 6,550 | $ 6,566 |
Fair Value, Inputs, Level 2 | ||
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt | $ 6,659 | $ 6,799 |
Fair Value Measurements and F50
Fair Value Measurements and Financial Instruments - Schedule of Fair Value Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | $ 1,530 | $ 1,096 |
Activity related to fair value hedges [Abstract] | ||
Gain (loss) on derivatives | (23) | 0 |
Gain (loss) on hedged items | 23 | 0 |
Fair Value Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 530 | 246 |
Activity related to fair value hedges [Abstract] | ||
Gain (loss) on derivatives | (13) | 2 |
Gain (loss) on hedged items | 13 | (2) |
Fair Value Hedges | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 1,000 | 850 |
Activity related to fair value hedges [Abstract] | ||
Gain (loss) on derivatives | (10) | (2) |
Gain (loss) on hedged items | 10 | 2 |
Cash Flow Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 754 | 671 |
Activity related to cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | (8) | (13) |
Gain (loss) reclassified into Cost of sales | 6 | 3 |
Cash Flow Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 754 | 667 |
Activity related to cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | (8) | (13) |
Gain (loss) reclassified into Cost of sales | 6 | 3 |
Cash Flow Hedges | Commodity Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 0 | 4 |
Activity related to cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | 0 | 0 |
Gain (loss) reclassified into Cost of sales | 0 | 0 |
Net Investment Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 1,774 | 1,861 |
Activity related to net investment hedges [Abstract] | ||
Gain (loss) on instruments | (37) | (34) |
Gain (loss) on hedged items | 37 | 36 |
Net Investment Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 541 | 655 |
Activity related to net investment hedges [Abstract] | ||
Gain (loss) on instruments | (18) | (18) |
Gain (loss) on hedged items | 18 | 20 |
Net Investment Hedges | Foreign Currency Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional value | 1,233 | 1,206 |
Activity related to net investment hedges [Abstract] | ||
Gain (loss) on instruments | (19) | (16) |
Gain (loss) on hedged items | $ 19 | $ 16 |
Fair Value Measurements and F51
Fair Value Measurements and Financial Instruments - Other Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Other current assets | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Marketable securities | $ 51 | $ 14 |
Other current assets | Bonds Issued By Argentinian Government | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Marketable securities | 4 | |
Assets | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Held-to-maturity securities | 4 | |
Fair Value, Inputs, Level 1 | Other current assets | Deposits | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Marketable securities | 51 | |
Fair Value, Inputs, Level 2 | Assets | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Held-to-maturity securities, fair value | $ 4 |