Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2020shares | |
Entity Information [Line Items] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2020 |
Document Transition Report | false |
Entity File Number | 1-644 |
Entity Registrant Name | COLGATE-PALMOLIVE COMPANY |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 13-1815595 |
Entity Address, Address Line One | 300 Park Avenue |
Entity Address, City or Town | New York, |
Entity Address, State or Province | NY |
Entity Address, Postal Zip Code | 10022 |
City Area Code | 212 |
Local Phone Number | 310-2000 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 856,528,455 |
Entity Central Index Key | 0000021665 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Common Stock | |
Entity Information [Line Items] | |
Title of 12(b) Security | Common Stock, $1.00 par value |
Trading Symbol | CL |
Security Exchange Name | NYSE |
0.000% Notes due 2021 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 0.000% Notes due 2021 |
Trading Symbol | CL21A |
Security Exchange Name | NYSE |
0.500% Notes Due 2026 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 0.500% Notes due 2026 |
Trading Symbol | CL26 |
Security Exchange Name | NYSE |
1.375% Notes Due 2034 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 1.375% Notes due 2034 |
Trading Symbol | CL34 |
Security Exchange Name | NYSE |
0.875% Notes due 2039 | |
Entity Information [Line Items] | |
Title of 12(b) Security | 0.875% Notes due 2039 |
Trading Symbol | CL39 |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net sales | $ 4,097 | $ 3,884 |
Cost of sales | 1,632 | 1,597 |
Gross profit | 2,465 | 2,287 |
Selling, general and administrative expenses | 1,473 | 1,365 |
Other (income) expense, net | 40 | 43 |
Operating profit | 952 | 879 |
Non-service related postretirement costs | 21 | 25 |
Interest (income) expense, net | 36 | 40 |
Income before income taxes | 895 | 814 |
Provision for income taxes | 147 | 214 |
Net income including noncontrolling interests | 748 | 600 |
Less: Net income attributable to noncontrolling interests | 33 | 40 |
Net income attributable to Colgate-Palmolive Company | $ 715 | $ 560 |
Earnings per common share, basic (in dollars per share) | $ 0.83 | $ 0.65 |
Earnings per common share, diluted (in dollars per share) | $ 0.83 | $ 0.65 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Net income including noncontrolling interests | $ 748 | $ 600 |
Other comprehensive income (loss), net of tax: | ||
Cumulative translation adjustments | (355) | 26 |
Retirement plans and other retiree benefit adjustments | 16 | 12 |
Gains (losses) on cash flow hedges | 18 | (5) |
Total Other comprehensive income (loss), net of tax | (321) | 33 |
Total Comprehensive income including noncontrolling interests | 427 | 633 |
Less: Net income attributable to noncontrolling interests | 33 | 40 |
Less: Cumulative translation adjustments attributable to noncontrolling interests | (16) | 5 |
Total Comprehensive income attributable to noncontrolling interests | 17 | 45 |
Total Comprehensive income attributable to Colgate-Palmolive Company | $ 410 | $ 588 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash and cash equivalents | $ 854 | $ 883 |
Receivables (net of allowances of $84 and $76, respectively) | 1,551 | 1,440 |
Inventories | 1,301 | 1,400 |
Other current assets | 542 | 456 |
Total current assets | 4,248 | 4,179 |
Property, plant and equipment: | ||
Cost | 8,167 | 8,580 |
Less: Accumulated depreciation | (4,680) | (4,830) |
Property, plant and equipment, net | 3,487 | 3,750 |
Goodwill | 3,559 | 3,508 |
Other intangible assets, net | 2,822 | 2,667 |
Deferred income taxes | 179 | 177 |
Other assets | 775 | 753 |
Total assets | 15,070 | 15,034 |
Current Liabilities | ||
Notes and loans payable | 255 | 260 |
Current portion of long-term debt | 255 | 254 |
Accounts payable | 1,216 | 1,237 |
Accrued income taxes | 485 | 370 |
Other accruals | 2,232 | 1,917 |
Total current liabilities | 4,443 | 4,038 |
Long-term debt | 7,336 | 7,333 |
Deferred income taxes | 415 | 507 |
Other liabilities | 2,535 | 2,598 |
Total liabilities | 14,729 | 14,476 |
Shareholders’ Equity | ||
Common stock | 1,466 | 1,466 |
Additional paid-in capital | 2,623 | 2,488 |
Retained earnings | 22,481 | 22,501 |
Accumulated other comprehensive income (loss) | (4,578) | (4,273) |
Unearned compensation | (1) | (2) |
Treasury stock, at cost | (22,104) | (22,063) |
Total Colgate-Palmolive Company shareholders’ equity | (113) | 117 |
Noncontrolling interests | 454 | 441 |
Total equity | 341 | 558 |
Total liabilities and equity | $ 15,070 | $ 15,034 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 84 | $ 76 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Activities | ||
Net income including noncontrolling interests | $ 748 | $ 600 |
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operations: | ||
Depreciation and amortization | 133 | 128 |
Restructuring and termination benefits, net of cash | (30) | 5 |
Stock-based compensation expense | 16 | 17 |
Deferred income taxes | (99) | 53 |
Voluntary benefit plan contributions | 0 | (102) |
Cash effects of changes in: | ||
Receivables | (211) | (145) |
Inventories | 29 | (32) |
Accounts payable and other accruals | 220 | 44 |
Other non-current assets and liabilities | (38) | 37 |
Net cash provided by operations | 768 | 605 |
Investing Activities | ||
Capital expenditures | (82) | (71) |
Purchases of marketable securities and investments | (42) | (27) |
Proceeds from sale of marketable securities and investments | 16 | 0 |
Payment for acquisitions, net of cash acquired | (351) | 0 |
Net cash used in investing activities | (459) | (98) |
Financing Activities | ||
Principal payments on debt | (1,200) | (1,774) |
Proceeds from issuance of debt | 1,188 | 2,076 |
Dividends paid | (373) | (366) |
Purchases of treasury shares | (220) | (399) |
Proceeds from exercise of stock options | 297 | 71 |
Net cash provided by (used in) financing activities | (308) | (392) |
Effect of exchange rate changes on Cash and cash equivalents | (30) | 2 |
Net increase (decrease) in Cash and cash equivalents | (29) | 117 |
Cash and cash equivalents at beginning of the period | 883 | 726 |
Cash and cash equivalents at end of the period | 854 | 843 |
Supplemental Cash Flow Information | ||
Income taxes paid | $ 128 | $ 149 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Unearned Compensation | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | [1] | Noncontrolling Interests | |
Changes in Shareholders' Equity [Roll Forward] | ||||||||||
Accumulated other comprehensive loss, cumulative translation losses | $ 3,155 | |||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | 1,038 | |||||||||
Beginning balance at Dec. 31, 2018 | $ 1,466 | $ 2,204 | $ (3) | $ (21,196) | $ 21,615 | $ (4,188) | $ 299 | |||
Changes in Shareholders' Equity [Roll Forward] | ||||||||||
Net income | 600 | 560 | 40 | |||||||
Other comprehensive income (loss), net of tax | 33 | 28 | 5 | |||||||
Dividends | [2] | (734) | (2) | |||||||
Stock-based compensation expense | 17 | |||||||||
Shares issued for stock options | 33 | 49 | ||||||||
Shares issued for restricted stock units | (13) | 13 | ||||||||
Treasury stock acquired | (399) | |||||||||
Other | 1 | (5) | ||||||||
Ending balance at Mar. 31, 2019 | 1,466 | 2,241 | (3) | (21,532) | 21,436 | (4,160) | 342 | |||
Changes in Shareholders' Equity [Roll Forward] | ||||||||||
Accumulated other comprehensive loss, cumulative translation losses | 3,134 | |||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | 1,026 | |||||||||
Accumulated other comprehensive loss, cumulative translation losses | 3,128 | |||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | 1,138 | |||||||||
Beginning balance at Dec. 31, 2019 | 558 | 1,466 | 2,488 | (2) | (22,063) | 22,501 | (4,273) | 441 | ||
Changes in Shareholders' Equity [Roll Forward] | ||||||||||
Net income | 748 | 715 | 33 | |||||||
Other comprehensive income (loss), net of tax | (321) | (305) | (16) | |||||||
Dividends | [2] | (738) | (4) | |||||||
Stock-based compensation expense | 16 | |||||||||
Shares issued for stock options | 133 | 164 | ||||||||
Shares issued for restricted stock units | (15) | 15 | ||||||||
Treasury stock acquired | (220) | |||||||||
Other | 1 | 1 | 3 | |||||||
Ending balance at Mar. 31, 2020 | 341 | $ 1,466 | $ 2,623 | $ (1) | $ (22,104) | $ 22,481 | $ (4,578) | $ 454 | ||
Changes in Shareholders' Equity [Roll Forward] | ||||||||||
Accumulated other comprehensive loss, cumulative translation losses | 3,467 | |||||||||
Accumulated other comprehensive income (loss), unrecognized retirement plan and other retiree benefit costs | $ 1,122 | |||||||||
[1] | Accumulated other comprehensive income (loss) includes cumulative translation losses of $3,467 at March 31, 2020 ( $3,134 at March 31, 2019 ) and $3,128 at December 31, 2019 ( $3,155 at December 31, 2018), respectively, and unrecognized retirement plan and other retiree benefits costs of $ 1,122 at March 31, 2020 ( $1,026 at March 31, 2019 ) and $1,138 at December 31, 2019 ( $1,038 at December 31, 2018), respectively. | |||||||||
[2] | Two dividends were declared in each of the first quarters of 2020 and 2019 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) | 3 Months Ended | |
Mar. 31, 2020Dividend$ / shares | Mar. 31, 2019Dividend$ / shares | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared per common share (in dollars per share) | $ / shares | $ 0.87 | $ 0.85 |
Number of dividends declared per quarter | Dividend | 2 | 2 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The Condensed Consolidated Financial Statements reflect all normal recurring adjustments which, in management’s opinion, are necessary for a fair statement of the results for interim periods. Results of operations for interim periods may not be representative of results to be expected for a full year. Colgate-Palmolive Company (together with its subsidiaries, the “Company” or “Colgate”) reclassifies certain prior year amounts, as applicable, to conform to the current year presentation. For a complete set of financial statement notes, including the Company’s significant accounting policies, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 , filed with the Securities and Exchange Commission (the “SEC”). |
Use of Estimates
Use of Estimates | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates Provisions for certain expenses, including income taxes, advertising and consumer promotion, are based on full year assumptions and are included in the accompanying Condensed Consolidated Financial Statements in proportion with estimated annual tax rates, the passage of time or estimated annual sales, as applicable. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This new guidance is effective upon issuance of this ASU for contract modifications and hedging relationships on a prospective basis. While the Company is currently assessing the impact of the new guidance, it is not expected to have a material impact on the Company’s Consolidated Financial Statements. In March 2020, FASB issued ASU No. 2020-03, "Codification to Financial Instruments." This ASU improves and clarifies various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016. The ASU includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments related to Issue 1, Issue 2, Issue 4, and Issue 5 were effective upon issuance of this update. The amendments related to Issue 3, Issue 6 and Issue 7 were effective for the Company beginning on January 1, 2020. The new guidance did not have a material impact on the Company’s Consolidated Financial Statements. In January 2020, the FASB issued ASU No. 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323) and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. This new guidance is effective for the Company beginning on January 1, 2021, with early adoption permitted. This new guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In December 2019, the FASB issued ASU No. 2019-12, “Income taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. This new guidance is effective for the Company beginning on January 1, 2021, with early adoption permitted. This new guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In April 2019, the FASB issued ASU No. 2019-04, “Codification Improvements to Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Financial Instruments (Topic 825).” This ASU clarifies three topics related to financial instruments accounting. This new guidance was effective for the Company beginning on January 1, 2020. The new guidance did not have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This new guidance removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This new guidance was effective for the Company beginning on January 1, 2020 and did not have a material impact on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” eliminating the requirement to calculate implied fair value, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard was effective for the Company on a prospective basis beginning on January 1, 2020 and did not have a material impact on the Company’s Consolidated Financial Statements. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Hello Products LLC On January 31, 2020, the Company acquired Hello Products LLC, an oral care business, for cash consideration of $351 . The acquisition was financed with a combination of debt and cash. This acquisition is part of the Company’s strategy to focus on high growth segments within its Oral Care, Personal Care and Pet Nutrition businesses. The total purchase price consideration of $351 has been allocated to the net assets acquired based on their respective preliminary estimated fair values as follows: Receivables $ 11 Inventories 13 Other assets and liabilities, net (4 ) Other intangible assets 200 Goodwill 131 Fair value of net assets acquired $ 351 Other intangible assets acquired include trademarks of $155 , which are considered to have an indefinite useful life, and customer relationships of $45 , which have a finite useful life. Goodwill of $131 was allocated to the North America segment. 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. The Company expects to finalize the purchase price allocation no later than the first quarter of 2021. Pro forma results of operations have not been presented as the impact on the Company’s Condensed Consolidated Financial Statements is not material. Laboratoires Filorga Cosmétiques (“Filorga”) On September 19, 2019 (the “Acquisition Date”), the Company acquired the Filorga skin health business for cash consideration of €1,516 (approximately $1,674 ), which included interest on the equity purchase price, plus additional consideration of €32 (approximately $38 ), the majority of which related to repayment of loans from former shareholders of Filorga. Filorga is a premium anti-aging skin health brand focused primarily on facial care. This acquisition is part of the Company’s strategy to focus on high growth segments within its Oral Care, Personal Care and Pet Nutrition businesses, including by expanding its portfolio in premium skin health. The total purchase price consideration of $1,712 has been allocated to the net assets acquired based on their respective preliminary estimated fair values as follows: Cash $ 30 Receivables 53 Inventories 70 Other current assets 18 Other intangible assets 1,051 Goodwill 923 Other current liabilities (67 ) Deferred income taxes (276 ) Noncontrolling interests (90 ) Fair value of net assets acquired $ 1,712 Other intangible assets acquired include trademarks of $774 , which are considered to have an indefinite useful life, and customer relationships of $277 , which have an estimated life of 14 years . Goodwill of $923 was allocated to the Europe segment. The Company expects that goodwill will not 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. The Company continues to evaluate potential contingencies that may have existed as of the acquisition date and expects to finalize the purchase price allocation no later than the third quarter of 2020. Pro forma results of operations have not been presented as the impact on the Company’s Condensed Consolidated Financial Statements is not material. Nigeria Joint Venture On August 15, 2019, the Company acquired a 51% controlling interest in Colgate Tolaram Pte. Ltd., a joint venture which owns the Nigeria-based Hypo Homecare Products Limited, for $31 . Pro forma results of operations have not been presented as the impact on the Company’s Condensed Consolidated Financial Statements is not material. |
Restructuring and Related Imple
Restructuring and Related Implementation Charges | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Implementation Charges | Restructuring and Related Implementation Charges The Company’s restructuring program (the "Global Growth and Efficiency Program"), which commenced in the fourth quarter of 2012, concluded on December 31, 2019. Initiatives under the Global Growth and Efficiency Program 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. There were no restructuring and implementation-related charges incurred for the three months ended March 31, 2020. For the three months ended March 31, 2019 restructuring and implementation-related charges are reflected in the income statement as follows: Three Months Ended March 31, 2019 Cost of sales $ 11 Selling, general and administrative expenses 4 Other (income) expense, net 13 Non-service related postretirement costs 1 Total Global Growth and Efficiency Program charges, pretax $ 29 Total Global Growth and Efficiency Program charges, aftertax $ 22 Restructuring and implementation-related charges in the preceding table were recorded in the Corporate segment as these decisions were predominantly centrally directed and controlled and were not included in internal measures of segment operating performance. The following table summarizes the activity for restructuring accrual: Three Months Ended March 31, 2020 Employee-Related Incremental Asset Other Total Balance at December 31, 2019 $ 26 $ — $ — $ 74 $ 100 Charges — — — — — Cash payments (15 ) — — (15 ) (30 ) Charges against assets — — — — — Foreign exchange (1 ) — — — (1 ) Other — — — — — Balance at March 31, 2020 $ 10 $ — $ — $ 59 $ 69 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
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 $ 329 $ 305 Work-in-process 46 49 Finished goods 976 1,056 Total Inventories, net $ 1,351 $ 1,410 Non-current inventory, net $ (50 ) $ (10 ) Current Inventories, net $ 1,301 $ 1,400 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share For the three months ended March 31, 2020 and 2019 , earnings per share were as follows: Three Months Ended March 31, 2020 March 31, 2019 Net income attributable to Colgate-Palmolive Company Shares (millions) Per Share Net income attributable to Colgate-Palmolive Company Shares (millions) Per Share Basic EPS $ 715 856.9 $ 0.83 $ 560 862.0 $ 0.65 Stock options and restricted stock units 1.5 1.2 Diluted EPS $ 715 858.4 $ 0.83 $ 560 863.2 $ 0.65 For the three months ended March 31, 2020 and 2019 , the average number of stock options and restricted stock units that were anti-dilutive and not included in diluted earnings per share calculations were 20,965,110 and 21,980,033 , respectively. |
Other Comprehensive Income (Los
Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 and 2019 were as follows: 2020 2019 Pretax Net of Tax Pretax Net of Tax Cumulative translation adjustments $ (320 ) $ (339 ) $ 27 $ 21 Retirement plans and other retiree benefits: Net actuarial gain (loss) and prior service costs arising during the period 2 1 (1 ) (1 ) Amortization of net actuarial loss, transition and prior service costs (1) 17 15 17 13 Retirement plans and other retiree benefits adjustments 19 16 16 12 Cash flow hedges: Unrealized gains (losses) on cash flow hedges 25 20 (2 ) (2 ) Reclassification of (gains) losses into net earnings on cash flow hedges (2) (3 ) (2 ) (4 ) (3 ) Gains (losses) on cash flow hedges 22 18 (6 ) (5 ) Total Other comprehensive income (loss) $ (279 ) $ (305 ) $ 37 $ 28 (1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 9 , Retirement Plans and Other Retiree Benefits for additional details. (2) These (gains) losses are reclassified into Cost of sales. See Note 13 , Fair Value Measurements and Financial Instruments for additional details. There were no tax impacts on Other comprehensive income (loss) (“OCI”) attributable to Noncontrolling interests. |
Retirement Plans and Other Reti
Retirement Plans and Other Retiree Benefits | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 and 2019 were as follows: Three Months Ended March 31, Pension Benefits Other Retiree Benefits United States International 2020 2019 2020 2019 2020 2019 Service cost $ — $ — $ 4 $ 4 $ 6 $ 4 Interest cost 19 23 5 5 11 11 Expected return on plan assets (27 ) (26 ) (4 ) (5 ) — (1 ) Amortization of actuarial loss (gain) 11 13 1 2 5 2 Net periodic benefit cost $ 3 $ 10 $ 6 $ 6 $ 22 $ 16 For the three months ended March 31, 2020 and 2019 , the Company made voluntary contributions to its U.S. postretirement plans of $ 0 and $102 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes for the quarter ended March 31, 2020 includes $71 of income tax benefits recorded on a discrete period basis of which $45 relates to previously recorded foreign withholding taxes and $26 relates to a previously recorded valuation allowance against a deferred tax asset. As more fully described below, both items were previously recorded in connection with the charge recorded by the Company in 2017 and revised in 2018 related to the Tax Cuts and Jobs Acts (the "TCJA"). As part of the previously recorded charge for the TCJA, the Company had provided for foreign withholding taxes expected to be paid on the remittance of earnings from certain overseas subsidiaries no longer deemed indefinitely reinvested. As a result of a recent reorganization of the ownership structure of certain foreign subsidiaries, the Company has now determined that no withholding taxes will be due on the remittance by certain subsidiaries of earnings previously deemed reinvested and, accordingly, reversed $45 of previously recorded foreign withholding taxes. Also as part of the previously recorded charge for the TCJA, the Company provided a valuation allowance against a deferred tax asset related to foreign tax credit carry-forwards that the Company did not expect to be able to use due to changes made by the TCJA. As a result of a new operating structure being implemented within one of the Company's divisions, the Company now believes the use of these foreign tax credit carry-forwards will not be limited in the future and, accordingly, reversed the previously recorded valuation allowance of $26 |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Loss Contingency [Abstract] | |
Contingencies | Contingencies As a global company serving consumers in more than 200 countries and territories, the Company is routinely subject to a wide variety of legal proceedings. These include disputes relating to intellectual property, contracts, product liability, marketing, advertising, foreign exchange controls, antitrust and trade regulation, as well as labor and employment, pension, data privacy and security, environmental and tax matters and consumer class actions. Management proactively reviews and monitors the Company’s exposure to, and the impact of, environmental matters. The Company is party to various environmental matters and, as such, may be responsible for all or a portion of the cleanup, restoration and post-closure monitoring of several sites. The Company establishes accruals for loss contingencies when it has determined that a loss is probable and that the amount of loss, or range of loss, can be reasonably estimated. Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances. The Company also determines estimates of reasonably possible losses or ranges of reasonably possible losses in excess of related accrued liabilities, if any, when it has determined that a loss is reasonably possible and it is able to determine such estimates. For those matters disclosed below for which the amount of any potential losses can be reasonably estimated, the Company currently estimates that the aggregate range of reasonably possible losses in excess of any accrued liabilities is $0 to approximately $175 (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 $118 . This amount includes additional assessments received from the Brazilian internal revenue authority in April 2016 relating to net operating loss carryforwards used by the Company’s Brazilian subsidiary to offset taxable income that had also been deducted from the authority’s original assessments. The Company has been disputing the disallowances by appealing the assessments since October 2001. There is one case currently on appeal at the administrative level. In the event the Company is ultimately unsuccessful in this administrative appeal, further appeals are available within the Brazilian federal courts. In September 2015, the Company lost one of its appeals at the administrative level and filed a lawsuit in Brazilian federal court. In February 2017, the Company lost an additional administrative appeal and filed a lawsuit in Brazilian federal court. In April 2019, the Company lost another administrative appeal and filed a lawsuit in Brazilian federal court. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the disallowances are without merit and that the Company should ultimately prevail. The Company is challenging these disallowances vigorously. In July 2002, the Brazilian Federal Public Attorney filed a civil action against the federal government of Brazil, Laboratorios Wyeth-Whitehall Ltda. (the Brazilian subsidiary of the Seller) and the Company, as represented by its Brazilian subsidiary, in the 6th. Lower Federal Court in the City of São Paulo, seeking to annul an April 2000 decision by the Brazilian Board of Tax Appeals that found in favor of the Seller’s Brazilian subsidiary on the issue of whether it had incurred taxable capital gains as a result of the divestiture of Kolynos. The action seeks to make the Company’s Brazilian subsidiary jointly and severally liable for any tax due from the Seller’s Brazilian subsidiary. The case has been pending since 2002, and the Lower Federal Court has not issued a decision. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the Company should ultimately prevail in this action. The Company is challenging this action vigorously. In December 2005, the Brazilian internal revenue authority issued to the Company’s Brazilian subsidiary a tax assessment with interest, penalties and any court-mandated fees of approximately $49 , at the current exchange rate, based on a claim that certain purchases of U.S. Treasury bills by the subsidiary and their subsequent disposition during the period 2000 to 2001 were subject to a tax on foreign exchange transactions. The Company had been disputing the assessment within the internal revenue authority’s administrative appeals process. However, in November 2015, the Superior Chamber of Administrative Tax Appeals denied the Company’s final administrative appeal, and the Company has filed a lawsuit in the Brazilian federal court. In the event the Company is unsuccessful in this lawsuit, further appeals are available within the Brazilian federal courts. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the tax assessment is without merit and that the Company should ultimately prevail. The Company is challenging this assessment vigorously. Competition Matter Certain of the Company’s subsidiaries have historically been subject to investigations, and, in some cases, fines, by governmental authorities in a number of countries related to alleged competition law violations. Substantially all of these matters also involved other consumer goods companies and/or retail customers. The Company’s policy is to comply with antitrust and competition laws and, if a violation of any such laws is found, to take appropriate remedial action and to cooperate fully with any related governmental inquiry. The status as of March 31, 2020 of such competition law matters pending against the Company during the three months ended March 31, 2020 is set forth below. ▪ In July 2014, the Greek competition law authority issued a statement of objections alleging a restriction of parallel imports into Greece. The Company responded to this statement of objections. In July 2017, the Company received the decision from the Greek competition law authority in which the Company was fined $11 . The Company appealed the decision to the Greek courts. In April 2019, the Greek courts affirmed the judgment against the Company’s Greek subsidiary, but reduced the fine to $10.5 and dismissed the case against Colgate-Palmolive Company. The Company’s Greek subsidiary and the Greek competition authority have appealed the decision to the Greek Supreme Court. Talcum Powder Matters The Company has been named as a defendant in civil actions alleging that certain talcum powder products that were sold prior to 1996 were contaminated with asbestos. 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, 2020 and December 31, 2019, there were 121 individual cases pending against the Company in state and federal courts throughout the United States. During the three months ended March 31, 2020 , five new cases were filed and five cases were resolved by voluntary dismissal or settlement. The value of the settlements in the quarter presented was not material, either individually or in the aggregate, to the period’s results of operations. The Company believes that a significant portion of its costs incurred in defending and resolving these claims will be covered by insurance policies issued by several primary, excess and umbrella insurance carriers, subject to deductibles, exclusions, retentions and policy limits. While the Company and its legal counsel believe that these cases are without merit and intend to challenge them vigorously, there can be no assurances regarding the ultimate resolution of these matters. With the exception of one case where the Company received an adverse jury verdict in the second quarter of 2019 that the Company has appealed, the range of reasonably possible losses in excess of accrued liabilities disclosed above does not include any amount relating to these cases because the amount of any possible losses from such cases currently cannot be reasonably estimated. ERISA Matter In June 2016, a putative class action claiming that residual annuity payments made to certain participants in the Colgate-Palmolive Company Employees’ Retirement Income Plan (the “Plan”) did not comply with the Employee Retirement Income Security Act was filed against the Plan, the Company and certain individuals in the United States District Court for the Southern District of New York. This action has been certified as a class action. The relief sought includes recalculation of benefits, pre- and post-judgment interest and attorneys’ fees. The Company is contesting this action vigorously. Since the amount of any potential loss from this case currently cannot be reasonably estimated, the range of reasonably possible losses in excess of accrued liabilities disclosed above does not include any amount relating to the case. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company operates in two product segments: Oral, Personal and Home Care; and Pet Nutrition. The operations of the Oral, Personal and Home Care product segment are managed geographically in five reportable operating segments: North America, Latin America, Europe, Asia Pacific and Africa/Eurasia. The Company evaluates segment performance based on several factors, including Operating profit. The Company uses Operating profit as a measure of operating segment performance because it excludes the impact of Corporate-driven decisions related to interest expense and income taxes. The accounting policies of the operating segments are generally the same as those described in Note 2, Summary of Significant Accounting Policies to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 . Intercompany sales have been eliminated. Corporate operations include costs related to stock options and restricted stock units, research and development costs, Corporate overhead costs and gains and losses on sales of non-core product lines and assets. The Company reports these items within Corporate operations as they relate to Corporate-based responsibilities and decisions and are not included in the internal measures of segment operating performance used by the Company to measure the underlying performance of the operating segments. Net sales by segment were as follows: Three Months Ended March 31, 2020 2019 Net sales Oral, Personal and Home Care North America $ 929 $ 853 Latin America 889 889 Europe 675 602 Asia Pacific 633 700 Africa/Eurasia 252 240 Total Oral, Personal and Home Care 3,378 3,284 Pet Nutrition 719 600 Total Net sales $ 4,097 $ 3,884 Approximately 70% of the Company’s Net sales are generated from markets outside the U.S., with approximately 45% of the Company’s Net sales coming from emerging markets (which consist of Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe). 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, 2020 2019 Net sales Oral Care 44 % 48 % Personal Care 20 % 19 % Home Care 18 % 18 % Pet Nutrition 18 % 15 % Total Net sales 100 % 100 % Operating profit by segment was as follows: Three Months Ended March 31, 2020 2019 Operating profit Oral, Personal and Home Care North America $ 258 $ 249 Latin America 248 232 Europe 154 151 Asia Pacific 161 189 Africa/Eurasia 56 46 Total Oral, Personal and Home Care 877 867 Pet Nutrition 203 164 Corporate (128 ) (152 ) Total Operating profit $ 952 $ 879 Corporate Operating profit (loss) for the three months ended March 31, 2020 included a charge for acquisition-related costs of $ 6 . Corporate Operating profit (loss) for the three months ended March 31, 2019, included charges of $ 28 resulting from the Global Growth and Efficiency Program, which ended on December 31, 2019. |
Fair Value Measurements and Fin
Fair Value Measurements and Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments The Company uses available market information and other valuation methodologies in assessing the fair value of financial instruments. Judgment is required in interpreting market data to develop the estimates of fair value and, accordingly, changes in assumptions or the estimation methodologies may affect the fair value estimates. The Company is exposed to the risk of credit loss in the event of nonperformance by counterparties to financial instrument contracts; however, nonperformance is considered unlikely and any nonperformance is unlikely to be material, as it is the Company’s policy to contract only with diverse, credit-worthy counterparties based upon both strong credit ratings and other credit considerations. The Company is exposed to market risk from foreign currency exchange rates, interest rates and commodity price fluctuations. Volatility relating to these exposures is managed on a global basis by utilizing a number of techniques, including working capital management, sourcing strategies, selling price increases, selective borrowings in local currencies and entering into selective derivative instrument transactions, issued with standard features, in accordance with the Company’s treasury and risk management policies, which prohibit the use of derivatives for speculative purposes and leveraged derivatives for any purpose. It is the Company’s policy to enter into derivative instrument contracts with terms that match the underlying exposure being hedged. The Company’s derivative instruments include interest rate swap contracts, foreign currency contracts and commodity contracts. The Company utilizes interest rate swap contracts to manage its targeted mix of fixed and floating rate debt, and these swaps are valued using observable benchmark rates (Level 2 valuation). The Company utilizes foreign currency contracts, including forward and swap contracts, option contracts, local currency deposits and local currency borrowings to hedge portions of its foreign currency purchases, assets and liabilities arising in the normal course of business and the net investment in certain foreign subsidiaries. These contracts are valued using observable market rates (Level 2 valuation). Commodity futures contracts are utilized to hedge the purchases of raw materials used in production. These contracts are measured using quoted commodity exchange prices (Level 1 valuation). The duration of foreign currency and commodity contracts generally does not exceed 12 months. The 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, 2020 and December 31, 2019 : Assets Liabilities Account Fair Value Account Fair Value Designated derivative instruments March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Interest rate swap contracts Other current assets $ — $ — Other accruals $ — $ — Interest rate swap contracts Other assets 16 4 Other liabilities — — Foreign currency contracts Other current assets 58 6 Other accruals 8 15 Foreign currency contracts Other assets — — Other liabilities 9 14 Commodity contracts Other current assets — — Other accruals 1 — Total designated $ 74 $ 10 $ 18 $ 29 Other financial instruments Marketable securities Other current assets $ 43 $ 23 Total other financial instruments $ 43 $ 23 The carrying amount of cash, cash equivalents, marketable securities, accounts receivable and short-term debt approximated fair value as of March 31, 2020 and December 31, 2019 . The estimated fair value of the Company’s long-term debt, including the current portion, as of March 31, 2020 and December 31, 2019 , was $7,909 and $8,056 , respectively, and the related carrying value was $7,591 and $7,587 , respectively. The estimated fair value of long-term debt was derived principally from quoted prices on the Company’s outstanding fixed-term notes (Level 2 valuation). The following amounts were recorded on the Condensed Consolidated Balance Sheet related to cumulative basis adjustment for fair value hedges as of: March 31, 2020 December 31, 2019 Long-term debt: Carrying amount of hedged item $ 415 $ 403 Cumulative hedging adjustment included in the carrying amount 16 4 The following tables present the notional values as of: March 31, 2020 Foreign Currency Contracts Foreign Currency Debt Interest Rate Swaps Commodity Contracts Total Fair Value Hedges $ 535 $ — $ 400 $ — $ 935 Cash Flow Hedges 718 — — 21 739 Net Investment Hedges 473 3,752 — — 4,225 December 31, 2019 Foreign Currency Contracts Foreign Currency Debt Interest Rate Swaps Commodity Contracts Total Fair Value Hedges $ 388 $ — $ 400 $ — $ 788 Cash Flow Hedges 761 — — 20 781 Net Investment Hedges 478 3,856 — — 4,334 The following table presents the location and amount of gains (losses) recognized on the Company’s Condensed Consolidated Statements of Income: Three Months Ended March 31, 2020 2019 Cost of sales Selling, general and administrative expenses Interest (income) expense, net Cost of sales Selling, general and administrative expenses Interest (income) expense, net Gain (loss) on hedges recognized in income: Interest rate swaps designated as fair value hedges: Derivative instrument $ — $ — $ (12 ) $ — $ — $ (3 ) Hedged items — — 12 — — 3 Foreign currency contracts designated as fair value hedges: Derivative instrument — 24 — — (1 ) — Hedged items — (24 ) — — 1 — Foreign currency contracts designated as cash flow hedges: Amount reclassified from OCI 2 — — 3 — — Commodity contracts designated as cash flow hedges: Amount reclassified from OCI 1 — — 1 — — Total gain (loss) on hedges recognized in income $ 3 $ — $ — $ 4 $ — $ — The following table presents the location and amount of unrealized gains (losses) included in OCI: Three Months Ended March 31, 2020 2019 Foreign currency contracts designated as cash flow hedges: Gain (loss) recognized in OCI $ 25 $ (3 ) Commodity contracts designated as cash flow hedges: Gain (loss) recognized in OCI — 1 Foreign currency contracts designated as net investment hedges: Gain (loss) on instruments 25 6 Gain (loss) on hedged items (25 ) (6 ) Foreign currency debt designated as net investment hedges: Gain (loss) on instruments 65 29 Gain (loss) on hedged items (65 ) (29 ) Total unrealized gain (loss) on hedges recognized in OCI $ 25 $ (2 ) |
Use of Estimates (Policies)
Use of Estimates (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates | Provisions for certain expenses, including income taxes, advertising and consumer promotion, are based on full year assumptions and are included in the accompanying Condensed Consolidated Financial Statements in proportion with estimated annual tax rates, the passage of time or estimated annual sales, as applicable. |
Recent Accounting Pronouncements | In March 2020, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” The ASU provides optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This new guidance is effective upon issuance of this ASU for contract modifications and hedging relationships on a prospective basis. While the Company is currently assessing the impact of the new guidance, it is not expected to have a material impact on the Company’s Consolidated Financial Statements. In March 2020, FASB issued ASU No. 2020-03, "Codification to Financial Instruments." This ASU improves and clarifies various financial instruments topics, including the current expected credit losses (CECL) standard issued in 2016. The ASU includes seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications. The amendments related to Issue 1, Issue 2, Issue 4, and Issue 5 were effective upon issuance of this update. The amendments related to Issue 3, Issue 6 and Issue 7 were effective for the Company beginning on January 1, 2020. The new guidance did not have a material impact on the Company’s Consolidated Financial Statements. In January 2020, the FASB issued ASU No. 2020-01, “Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323) and Derivatives and Hedging (Topic 815) - Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” The guidance provides clarification of the interaction of rules for equity securities, the equity method of accounting and forward contracts and purchase options on certain types of securities. This new guidance is effective for the Company beginning on January 1, 2021, with early adoption permitted. This new guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In December 2019, the FASB issued ASU No. 2019-12, “Income taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This ASU simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC 740 and also clarifies and amends existing guidance to improve consistent application. This new guidance is effective for the Company beginning on January 1, 2021, with early adoption permitted. This new guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In April 2019, the FASB issued ASU No. 2019-04, “Codification Improvements to Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Financial Instruments (Topic 825).” This ASU clarifies three topics related to financial instruments accounting. This new guidance was effective for the Company beginning on January 1, 2020. The new guidance did not have a material impact on the Company’s Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This new guidance removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This new guidance was effective for the Company beginning on January 1, 2020 and did not have a material impact on the Company’s Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-04, “Intangibles–Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” eliminating the requirement to calculate implied fair value, essentially eliminating step two from the goodwill impairment test. The new standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value. The impairment charge will be limited to the amount of goodwill allocated to that reporting unit. The standard was effective for the Company on a prospective basis beginning on January 1, 2020 and did not have a material impact on the Company’s Consolidated Financial Statements. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326)” Codification Improvements to Financial Instruments-Credit Losses (Topic 326). Subsequent updates were released in November 2018 (ASU No. 2018-19), November 2019 (ASU No. 2019-10 and 2019-11) and February 2020 (ASU No. 2020-02) that provided additional guidance on this Topic. This ASU introduces the current expected credit loss (CECL) model, which will require an entity to measure credit losses for certain financial instruments and financial assets, including trade receivables. Under this update, on initial recognition and at each reporting period, an entity will be required to recognize an allowance that reflects the entity’s current estimate of credit losses expected to be incurred over the life of the financial instrument. The Company adopted the new standard, which primarily impacts the Company’s trade receivables and related methodology for assessing the collectability of its customer accounts, on January 1, 2020, on a “modified retrospective” basis. The adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The total purchase price consideration of $1,712 has been allocated to the net assets acquired based on their respective preliminary estimated fair values as follows: Cash $ 30 Receivables 53 Inventories 70 Other current assets 18 Other intangible assets 1,051 Goodwill 923 Other current liabilities (67 ) Deferred income taxes (276 ) Noncontrolling interests (90 ) Fair value of net assets acquired $ 1,712 The total purchase price consideration of $351 has been allocated to the net assets acquired based on their respective preliminary estimated fair values as follows: Receivables $ 11 Inventories 13 Other assets and liabilities, net (4 ) Other intangible assets 200 Goodwill 131 Fair value of net assets acquired $ 351 |
Restructuring and Related Imp_2
Restructuring and Related Implementation Charges (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Related Costs | For the three months ended March 31, 2019 restructuring and implementation-related charges are reflected in the income statement as follows: Three Months Ended March 31, 2019 Cost of sales $ 11 Selling, general and administrative expenses 4 Other (income) expense, net 13 Non-service related postretirement costs 1 Total Global Growth and Efficiency Program charges, pretax $ 29 Total Global Growth and Efficiency Program charges, aftertax $ 22 |
Schedule of Restructuring Reserve by Type of Cost | The following table summarizes the activity for restructuring accrual: Three Months Ended March 31, 2020 Employee-Related Incremental Asset Other Total Balance at December 31, 2019 $ 26 $ — $ — $ 74 $ 100 Charges — — — — — Cash payments (15 ) — — (15 ) (30 ) Charges against assets — — — — — Foreign exchange (1 ) — — — (1 ) Other — — — — — Balance at March 31, 2020 $ 10 $ — $ — $ 59 $ 69 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 $ 329 $ 305 Work-in-process 46 49 Finished goods 976 1,056 Total Inventories, net $ 1,351 $ 1,410 Non-current inventory, net $ (50 ) $ (10 ) Current Inventories, net $ 1,301 $ 1,400 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | For the three months ended March 31, 2020 and 2019 , earnings per share were as follows: Three Months Ended March 31, 2020 March 31, 2019 Net income attributable to Colgate-Palmolive Company Shares (millions) Per Share Net income attributable to Colgate-Palmolive Company Shares (millions) Per Share Basic EPS $ 715 856.9 $ 0.83 $ 560 862.0 $ 0.65 Stock options and restricted stock units 1.5 1.2 Diluted EPS $ 715 858.4 $ 0.83 $ 560 863.2 $ 0.65 |
Other Comprehensive Income (L_2
Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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, 2020 and 2019 were as follows: 2020 2019 Pretax Net of Tax Pretax Net of Tax Cumulative translation adjustments $ (320 ) $ (339 ) $ 27 $ 21 Retirement plans and other retiree benefits: Net actuarial gain (loss) and prior service costs arising during the period 2 1 (1 ) (1 ) Amortization of net actuarial loss, transition and prior service costs (1) 17 15 17 13 Retirement plans and other retiree benefits adjustments 19 16 16 12 Cash flow hedges: Unrealized gains (losses) on cash flow hedges 25 20 (2 ) (2 ) Reclassification of (gains) losses into net earnings on cash flow hedges (2) (3 ) (2 ) (4 ) (3 ) Gains (losses) on cash flow hedges 22 18 (6 ) (5 ) Total Other comprehensive income (loss) $ (279 ) $ (305 ) $ 37 $ 28 (1) These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 9 , Retirement Plans and Other Retiree Benefits for additional details. (2) These (gains) losses are reclassified into Cost of sales. See Note 13 , Fair Value Measurements and Financial Instruments for additional details. |
Retirement Plans and Other Re_2
Retirement Plans and Other Retiree Benefits (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Retirement Benefits [Abstract] | |
Components Of Net Periodic Benefit Cost | Components of Net periodic benefit cost for the three months ended March 31, 2020 and 2019 were as follows: Three Months Ended March 31, Pension Benefits Other Retiree Benefits United States International 2020 2019 2020 2019 2020 2019 Service cost $ — $ — $ 4 $ 4 $ 6 $ 4 Interest cost 19 23 5 5 11 11 Expected return on plan assets (27 ) (26 ) (4 ) (5 ) — (1 ) Amortization of actuarial loss (gain) 11 13 1 2 5 2 Net periodic benefit cost $ 3 $ 10 $ 6 $ 6 $ 22 $ 16 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Net Sales and Operating Profit by Segment | Net sales by segment were as follows: Three Months Ended March 31, 2020 2019 Net sales Oral, Personal and Home Care North America $ 929 $ 853 Latin America 889 889 Europe 675 602 Asia Pacific 633 700 Africa/Eurasia 252 240 Total Oral, Personal and Home Care 3,378 3,284 Pet Nutrition 719 600 Total Net sales $ 4,097 $ 3,884 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, 2020 2019 Net sales Oral Care 44 % 48 % Personal Care 20 % 19 % Home Care 18 % 18 % Pet Nutrition 18 % 15 % Total Net sales 100 % 100 % Operating profit by segment was as follows: Three Months Ended March 31, 2020 2019 Operating profit Oral, Personal and Home Care North America $ 258 $ 249 Latin America 248 232 Europe 154 151 Asia Pacific 161 189 Africa/Eurasia 56 46 Total Oral, Personal and Home Care 877 867 Pet Nutrition 203 164 Corporate (128 ) (152 ) Total Operating profit $ 952 $ 879 |
Fair Value Measurements and F_2
Fair Value Measurements and Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of derivative instruments | The following table summarizes the fair value of the Company’s derivative instruments and other financial instruments which are carried at fair value in the Company’s Consolidated Balance Sheets at March 31, 2020 and December 31, 2019 : Assets Liabilities Account Fair Value Account Fair Value Designated derivative instruments March 31, 2020 December 31, 2019 March 31, 2020 December 31, 2019 Interest rate swap contracts Other current assets $ — $ — Other accruals $ — $ — Interest rate swap contracts Other assets 16 4 Other liabilities — — Foreign currency contracts Other current assets 58 6 Other accruals 8 15 Foreign currency contracts Other assets — — Other liabilities 9 14 Commodity contracts Other current assets — — Other accruals 1 — Total designated $ 74 $ 10 $ 18 $ 29 Other financial instruments Marketable securities Other current assets $ 43 $ 23 Total other financial instruments $ 43 $ 23 |
Schedule of hedged item and cumulative adjustment to carrying amount | The following amounts were recorded on the Condensed Consolidated Balance Sheet related to cumulative basis adjustment for fair value hedges as of: March 31, 2020 December 31, 2019 Long-term debt: Carrying amount of hedged item $ 415 $ 403 Cumulative hedging adjustment included in the carrying amount 16 4 |
Schedule of notional values | The following tables present the notional values as of: March 31, 2020 Foreign Currency Contracts Foreign Currency Debt Interest Rate Swaps Commodity Contracts Total Fair Value Hedges $ 535 $ — $ 400 $ — $ 935 Cash Flow Hedges 718 — — 21 739 Net Investment Hedges 473 3,752 — — 4,225 December 31, 2019 Foreign Currency Contracts Foreign Currency Debt Interest Rate Swaps Commodity Contracts Total Fair Value Hedges $ 388 $ — $ 400 $ — $ 788 Cash Flow Hedges 761 — — 20 781 Net Investment Hedges 478 3,856 — — 4,334 |
Schedule of gains (losses) recognized in Statements of Income | The following table presents the location and amount of gains (losses) recognized on the Company’s Condensed Consolidated Statements of Income: Three Months Ended March 31, 2020 2019 Cost of sales Selling, general and administrative expenses Interest (income) expense, net Cost of sales Selling, general and administrative expenses Interest (income) expense, net Gain (loss) on hedges recognized in income: Interest rate swaps designated as fair value hedges: Derivative instrument $ — $ — $ (12 ) $ — $ — $ (3 ) Hedged items — — 12 — — 3 Foreign currency contracts designated as fair value hedges: Derivative instrument — 24 — — (1 ) — Hedged items — (24 ) — — 1 — Foreign currency contracts designated as cash flow hedges: Amount reclassified from OCI 2 — — 3 — — Commodity contracts designated as cash flow hedges: Amount reclassified from OCI 1 — — 1 — — Total gain (loss) on hedges recognized in income $ 3 $ — $ — $ 4 $ — $ — |
Schedule of gains (losses) included in Other Comprehensive Income | The following table presents the location and amount of unrealized gains (losses) included in OCI: Three Months Ended March 31, 2020 2019 Foreign currency contracts designated as cash flow hedges: Gain (loss) recognized in OCI $ 25 $ (3 ) Commodity contracts designated as cash flow hedges: Gain (loss) recognized in OCI — 1 Foreign currency contracts designated as net investment hedges: Gain (loss) on instruments 25 6 Gain (loss) on hedged items (25 ) (6 ) Foreign currency debt designated as net investment hedges: Gain (loss) on instruments 65 29 Gain (loss) on hedged items (65 ) (29 ) Total unrealized gain (loss) on hedges recognized in OCI $ 25 $ (2 ) |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) € in Millions, $ in Millions | Jan. 31, 2020USD ($) | Sep. 19, 2019USD ($) | Sep. 19, 2019EUR (€) | Aug. 15, 2019USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 3,559 | $ 3,508 | ||||
Hello Product LLC | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire business, cash | $ 351 | |||||
Purchase price consideration | 351 | |||||
Other intangible assets | 200 | |||||
Goodwill | 131 | |||||
Hello Product LLC | North America | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 131 | |||||
Hello Product LLC | Trademarks | ||||||
Business Acquisition [Line Items] | ||||||
Other intangible assets | 155 | |||||
Hello Product LLC | Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Other intangible assets | $ 45 | |||||
Laboratoires Filorga Cosmétiques | ||||||
Business Acquisition [Line Items] | ||||||
Payments to acquire business, cash | $ 1,674 | € 1,516 | ||||
Purchase price consideration | 1,712 | |||||
Other intangible assets | 1,051 | |||||
Goodwill | 923 | |||||
Additional purchase price consideration | 38 | € 32 | ||||
Laboratoires Filorga Cosmétiques | Europe | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 923 | |||||
Laboratoires Filorga Cosmétiques | Trademarks | ||||||
Business Acquisition [Line Items] | ||||||
Other intangible assets | 774 | |||||
Laboratoires Filorga Cosmétiques | Customer Relationships | ||||||
Business Acquisition [Line Items] | ||||||
Other intangible assets | $ 277 | |||||
Useful life | 14 years | 14 years | ||||
Nigeria Joint Venture | ||||||
Business Acquisition [Line Items] | ||||||
Purchase price consideration | $ 31 | |||||
Controlling interest acquired (in percent) | 51.00% |
Acquisitions - Schedule of Reco
Acquisitions - Schedule of Recognized Identifiable Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | Sep. 19, 2019 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 3,559 | $ 3,508 | ||
Hello Product LLC | ||||
Business Acquisition [Line Items] | ||||
Receivables | $ 11 | |||
Inventories | 13 | |||
Other assets and liabilities, net | (4) | |||
Other intangible assets | 200 | |||
Goodwill | 131 | |||
Fair value of net assets acquired | $ 351 | |||
Laboratoires Filorga Cosmétiques | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 30 | |||
Receivables | 53 | |||
Inventories | 70 | |||
Other current assets | 18 | |||
Other intangible assets | 1,051 | |||
Goodwill | 923 | |||
Other current liabilities | (67) | |||
Deferred income taxes | (276) | |||
Noncontrolling interests | (90) | |||
Fair value of net assets acquired | $ 1,712 |
Restructuring and Related Imp_3
Restructuring and Related Implementation Charges - Narrative (Details) - Global Growth and Efficiency Program - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Charges | $ 0 | $ 29,000,000 |
Restructuring and Implementation-Related Charges | ||
Restructuring Cost and Reserve [Line Items] | ||
Charges | $ 0 |
Restructuring and Related Imp_4
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, 2020 | Mar. 31, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | $ 0 | $ 29 |
Total Global Growth and Efficiency Program charges, aftertax | 22 | |
Cost of sales | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | 11 | |
Selling, general and administrative expenses | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | 4 | |
Other (income) expense, net | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | 13 | |
Non-service related postretirement costs | ||
Restructuring Cost and Reserve [Line Items] | ||
Total Global Growth and Efficiency Program charges, pretax | $ 1 |
Restructuring and Related Imp_5
Restructuring and Related Implementation Charges - Restructuring Activity and Related Accruals (Details) - Global Growth and Efficiency Program - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | $ 100 | |
Charges | 0 | $ 29 |
Cash payments | (30) | |
Charges against assets | 0 | |
Foreign exchange | (1) | |
Other | 0 | |
Ending Balance | 69 | |
Employee-Related Costs | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 26 | |
Charges | 0 | |
Cash payments | (15) | |
Charges against assets | 0 | |
Foreign exchange | (1) | |
Other | 0 | |
Ending Balance | 10 | |
Incremental Depreciation | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 0 | |
Charges | 0 | |
Cash payments | 0 | |
Charges against assets | 0 | |
Foreign exchange | 0 | |
Other | 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 | |
Other | 0 | |
Ending Balance | 0 | |
Other | ||
Restructuring Reserve [Roll Forward] | ||
Beginning Balance | 74 | |
Charges | 0 | |
Cash payments | (15) | |
Charges against assets | 0 | |
Foreign exchange | 0 | |
Other | 0 | |
Ending Balance | $ 59 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory, Net, Items Net of Reserve Alternative [Abstract] | ||
Raw materials and supplies | $ 329 | $ 305 |
Work-in-process | 46 | 49 |
Finished goods | 976 | 1,056 |
Total Inventories, net | 1,351 | 1,410 |
Non-current inventory, net | (50) | (10) |
Current Inventories, net | $ 1,301 | $ 1,400 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net income attributable to Colgate-Palmolive Company | ||
Basic EPS | $ 715 | $ 560 |
Diluted EPS | $ 715 | $ 560 |
Shares | ||
Basic EPS (in shares) | 856,900,000 | 862,000,000 |
Stock options and restricted stock units (in shares) | 1,500,000 | 1,200,000 |
Diluted EPS (in shares) | 858,400,000 | 863,200,000 |
Per Share | ||
Basic EPS (in dollars per share) | $ 0.83 | $ 0.65 |
Diluted EPS (in dollars per share) | $ 0.83 | $ 0.65 |
Antidilutive securities excluded from computation of earnings per share (in shares) | 20,965,110 | 21,980,033 |
Other Comprehensive Income (L_3
Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Total Other comprehensive income (loss), net of tax | $ (321) | $ 33 | |
Cumulative translation adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), pretax | (320) | 27 | |
Total Other comprehensive income (loss), net of tax | (339) | 21 | |
Retirement plans and other retiree benefits adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), before reclassifications, pretax | 2 | (1) | |
Reclassification from AOCI, pretax | 17 | 17 | |
Other comprehensive income (loss), pretax | 19 | 16 | |
Other comprehensive income (loss), before reclassifications, net of tax | 1 | (1) | |
Reclassification from AOCI, net of tax | 15 | 13 | |
Total Other comprehensive income (loss), net of tax | 16 | 12 | |
Gains (losses) on cash flow hedges | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), before reclassifications, pretax | 25 | (2) | |
Reclassification from AOCI, pretax | (3) | (4) | |
Other comprehensive income (loss), pretax | 22 | (6) | |
Other comprehensive income (loss), before reclassifications, net of tax | 20 | (2) | |
Reclassification from AOCI, net of tax | (2) | (3) | |
Total Other comprehensive income (loss), net of tax | 18 | (5) | |
Total Other comprehensive income (loss) | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other comprehensive income (loss), pretax | (279) | 37 | |
Total Other comprehensive income (loss), net of tax | [1] | $ (305) | $ 28 |
[1] | Accumulated other comprehensive income (loss) includes cumulative translation losses of $3,467 at March 31, 2020 ( $3,134 at March 31, 2019 ) and $3,128 at December 31, 2019 ( $3,155 at December 31, 2018), respectively, and unrecognized retirement plan and other retiree benefits costs of $ 1,122 at March 31, 2020 ( $1,026 at March 31, 2019 ) and $1,138 at December 31, 2019 ( $1,038 at December 31, 2018), respectively. |
Retirement Plans and Other Re_3
Retirement Plans and Other Retiree Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Other Retiree Benefits | ||
Components of net periodic benefit cost | ||
Service cost | $ 6 | $ 4 |
Interest cost | 11 | 11 |
Expected return on plan assets | 0 | (1) |
Amortization of actuarial loss (gain) | 5 | 2 |
Net periodic benefit cost | 22 | 16 |
United States | Pension Benefits | ||
Components of net periodic benefit cost | ||
Service cost | 0 | 0 |
Interest cost | 19 | 23 |
Expected return on plan assets | (27) | (26) |
Amortization of actuarial loss (gain) | 11 | 13 |
Net periodic benefit cost | 3 | 10 |
Voluntary benefit plan contribution | 0 | 102 |
International | Pension Benefits | ||
Components of net periodic benefit cost | ||
Service cost | 4 | 4 |
Interest cost | 5 | 5 |
Expected return on plan assets | (4) | (5) |
Amortization of actuarial loss (gain) | 1 | 2 |
Net periodic benefit cost | $ 6 | $ 6 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Income Tax Disclosure [Abstract] | |
Provisional income tax benefit | $ 71,000,000 |
Foreign withholding income tax | 45,000,000 |
Valuation allowance against deferred tax asset | 26,000,000 |
Withholding tax due | $ 0 |
Contingencies (Details)
Contingencies (Details) $ in Millions | 1 Months Ended | 3 Months Ended | |||||
Sep. 30, 2015appeal | Mar. 31, 2020USD ($)casecountry_and_territory | Jun. 30, 2019case | Dec. 31, 2019case | Apr. 30, 2019USD ($) | Jul. 31, 2017USD ($) | Dec. 31, 2005USD ($) | |
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 | $ | $ 118 | ||||||
Loss contingency, number of cases on appeal | case | 1 | ||||||
Loss contingency, number of appeals lost (in appeals) | appeal | 1 | ||||||
Brazilian internal revenue authority, matter 2 | $ | $ 49 | ||||||
Fine imposed by Greek competition authority | $ | $ 10.5 | $ 11 | |||||
Loss contingency, pending claims, number (in cases) | case | 121 | 121 | |||||
Loss contingency, new claims filed, number (in cases) | case | 5 | ||||||
Loss contingency, claims dismissed or settled, number (in cases) | case | 5 | ||||||
Loss contingency, number of cases resulting in adverse jury verdict | case | 1 | ||||||
Minimum | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, possible loss | $ | $ 0 | ||||||
Maximum | |||||||
Loss Contingencies [Line Items] | |||||||
Loss contingency, possible loss | $ | $ 175 |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||
Number of product segments (in segments) | segment | 2 | |
Number of reportable segments (in segments) | segment | 5 | |
Number of operating segments (in segments) | segment | 5 | |
Corporate | Included in Operating profit (loss) | ||
Segment Reporting Information [Line Items] | ||
Acquisition related costs | $ | $ 6 | |
Sales Revenue, Net | ||
Segment Reporting Information [Line Items] | ||
Percentage of consolidated Net sales represented by sales outside US | 70.00% | |
Percentage of consolidated Net sales coming from emerging markets | 45.00% | |
Global Growth and Efficiency Program | ||
Segment Reporting Information [Line Items] | ||
Charges | $ | $ 0 | $ 29 |
Global Growth and Efficiency Program | Corporate | Included in Operating profit (loss) | ||
Segment Reporting Information [Line Items] | ||
Charges | $ | $ 28 |
Segment Information - Schedule
Segment Information - Schedule of Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Total Net sales | $ 4,097 | $ 3,884 |
Total Operating profit | 952 | 879 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Total Operating profit | $ (128) | $ (152) |
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 | 44.00% | 48.00% |
Product Concentration Risk | Personal Care | Sales Revenue, Net | ||
Segment Reporting Information [Line Items] | ||
Percent of net sales | 20.00% | 19.00% |
Product Concentration Risk | Home Care | Sales Revenue, Net | ||
Segment Reporting Information [Line Items] | ||
Percent of net sales | 18.00% | 18.00% |
Product Concentration Risk | Pet Nutrition | Sales Revenue, Net | ||
Segment Reporting Information [Line Items] | ||
Percent of net sales | 18.00% | 15.00% |
Oral, Personal and Home Care | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | $ 3,378 | $ 3,284 |
Total Operating profit | 877 | 867 |
Pet Nutrition | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 719 | 600 |
Total Operating profit | 203 | 164 |
North America | Oral, Personal and Home Care | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 929 | 853 |
Total Operating profit | 258 | 249 |
Latin America | Oral, Personal and Home Care | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 889 | 889 |
Total Operating profit | 248 | 232 |
Europe | Oral, Personal and Home Care | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 675 | 602 |
Total Operating profit | 154 | 151 |
Asia Pacific | Oral, Personal and Home Care | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 633 | 700 |
Total Operating profit | 161 | 189 |
Africa/Eurasia | Oral, Personal and Home Care | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total Net sales | 252 | 240 |
Total Operating profit | $ 56 | $ 46 |
Fair Value Measurements and F_3
Fair Value Measurements and Financial Instruments - Fair Value of Derivative Instruments and Other Financial Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Designated derivative instruments | ||
Derivative assets, designated | $ 74 | $ 10 |
Derivative liabilities, designated | 18 | 29 |
Other financial instruments | ||
Total other financial instruments | 43 | 23 |
Other current assets | ||
Other financial instruments | ||
Marketable securities | 43 | 23 |
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 | 58 | 6 |
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 | 16 | 4 |
Other assets | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative assets, designated | 0 | 0 |
Other accruals | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 0 | 0 |
Other accruals | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 8 | 15 |
Other accruals | Commodity contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 1 | 0 |
Other liabilities | Interest rate swap contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | 0 | 0 |
Other liabilities | Foreign currency contracts | ||
Designated derivative instruments | ||
Derivative liabilities, designated | $ 9 | $ 14 |
Fair Value Measurements and F_4
Fair Value Measurements and Financial Instruments - Carrying Value and Estimated Fair Value of Long-term Debt (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Long-term Debt | ||
Debt Instrument [Line Items] | ||
Carrying amount of hedged item | $ 415 | $ 403 |
Cumulative hedging adjustment included in the carrying amount | 16 | 4 |
Carrying Value | ||
Debt Instrument [Line Items] | ||
Carrying value of long-term debt | 7,591 | 7,587 |
Fair Value, Inputs, Level 2 | ||
Debt Instrument [Line Items] | ||
Estimated fair value of long-term debt | $ 7,909 | $ 8,056 |
Fair Value Measurements and F_5
Fair Value Measurements and Financial Instruments - Schedule of Notional Values (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | $ 935 | $ 788 |
Fair Value Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 535 | 388 |
Fair Value Hedges | Foreign Currency Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Fair Value Hedges | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 400 | 400 |
Fair Value Hedges | Commodity Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Cash Flow Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 739 | 781 |
Cash Flow Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 718 | 761 |
Cash Flow Hedges | Foreign Currency Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Cash Flow Hedges | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Cash Flow Hedges | Commodity Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 21 | 20 |
Net Investment Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 4,225 | 4,334 |
Net Investment Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 473 | 478 |
Net Investment Hedges | Foreign Currency Debt | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 3,752 | 3,856 |
Net Investment Hedges | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | 0 | 0 |
Net Investment Hedges | Commodity Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Notional values | $ 0 | $ 0 |
Fair Value Measurements and F_6
Fair Value Measurements and Financial Instruments - Schedule of Gain (Loss) on Hedges Recognized in Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gain (loss) on hedges recognized in income | $ 3 | $ 4 |
Cost of sales | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivative instrument | 0 | 0 |
Gain (loss) on hedged items | 0 | 0 |
Cost of sales | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivative instrument | 0 | 0 |
Gain (loss) on hedged items | 0 | 0 |
Amount reclassified from OCI | 2 | |
Cost of sales | Commodity contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | 1 | |
Cost of sales | Cash Flow Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | 3 | |
Cost of sales | Cash Flow Hedges | Commodity contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | 1 | |
Selling, general and administrative expenses | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gain (loss) on hedges recognized in income | 0 | 0 |
Selling, general and administrative expenses | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivative instrument | 0 | 0 |
Gain (loss) on hedged items | 0 | 0 |
Selling, general and administrative expenses | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivative instrument | 24 | (1) |
Gain (loss) on hedged items | (24) | 1 |
Amount reclassified from OCI | 0 | |
Selling, general and administrative expenses | Commodity contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | 0 | |
Selling, general and administrative expenses | Cash Flow Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | 0 | |
Selling, general and administrative expenses | Cash Flow Hedges | Commodity contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | 0 | |
Interest (income) expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Total gain (loss) on hedges recognized in income | 0 | 0 |
Interest (income) expense, net | Interest Rate Swaps | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivative instrument | (12) | (3) |
Gain (loss) on hedged items | 12 | 3 |
Interest (income) expense, net | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) on derivative instrument | 0 | 0 |
Gain (loss) on hedged items | 0 | 0 |
Amount reclassified from OCI | 0 | |
Interest (income) expense, net | Commodity contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | $ 0 | |
Interest (income) expense, net | Cash Flow Hedges | Foreign Currency Contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | 0 | |
Interest (income) expense, net | Cash Flow Hedges | Commodity contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount reclassified from OCI | $ 0 |
Fair Value Measurements and F_7
Fair Value Measurements and Financial Instruments - Schedule of Gain (Loss) Included in OCI (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | $ 25 | $ (2) |
Foreign Currency Contracts | ||
Cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | 25 | (3) |
Net investment hedges [Abstract] | ||
Gain (loss) on instruments | 25 | 6 |
Gain (loss) on hedged items | (25) | (6) |
Commodity Contracts | ||
Cash flow hedges [Abstract] | ||
Gain (loss) recognized in OCI | 0 | 1 |
Foreign Currency Debt | ||
Net investment hedges [Abstract] | ||
Gain (loss) on instruments | 65 | 29 |
Gain (loss) on hedged items | $ (65) | $ (29) |