☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the quarterly period ended March 31, 2018
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from________ to________ .
|
DELAWARE
|
13-1815595
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
300 Park Avenue, New York, New York
|
10022
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
☒
|
Accelerated filer
☐
|
Non-accelerated filer
☐
(Do not check if a smaller reporting company)
|
Smaller reporting company
☐
|
Emerging growth company
☐
|
Class
|
|
Shares Outstanding
|
|
Date
|
Common stock, $1.00 par value
|
|
872,320,741
|
|
March 31, 2018
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017 (A)
|
||||
Net sales
|
$
|
4,002
|
|
|
$
|
3,762
|
|
Cost of sales
|
1,594
|
|
|
1,493
|
|
||
Gross profit
|
2,408
|
|
|
2,269
|
|
||
Selling, general and administrative expenses
|
1,392
|
|
|
1,336
|
|
||
Other (income) expense, net
|
33
|
|
|
21
|
|
||
Operating profit
|
983
|
|
|
912
|
|
||
Non-service related postretirement costs
|
24
|
|
|
27
|
|
||
Interest (income) expense, net
|
35
|
|
|
23
|
|
||
Income before income taxes
|
924
|
|
|
862
|
|
||
Provision for income taxes
|
246
|
|
|
251
|
|
||
Net income including noncontrolling interests
|
678
|
|
|
611
|
|
||
Less: Net income attributable to noncontrolling interests
|
44
|
|
|
41
|
|
||
Net income attributable to Colgate-Palmolive Company
|
$
|
634
|
|
|
$
|
570
|
|
|
|
|
|
||||
Earnings per common share, basic
|
$
|
0.72
|
|
|
$
|
0.64
|
|
|
|
|
|
||||
Earnings per common share, diluted
|
$
|
0.72
|
|
|
$
|
0.64
|
|
|
|
|
|
||||
Dividends declared per common share *
|
$
|
0.82
|
|
|
$
|
0.79
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net income including noncontrolling interests
|
$
|
678
|
|
|
$
|
611
|
|
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
|
|
||
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
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Assets
|
|
|
|
||||
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
|
)
|
||
|
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
|
|
Liabilities and Shareholders’ Equity
|
|
|
|
|
|
||
Current Liabilities
|
|
|
|
|
|
||
Notes and loans payable
|
$
|
159
|
|
|
$
|
11
|
|
Current portion of long-term debt
|
—
|
|
|
—
|
|
||
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
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2018
|
|
2017
|
||||
Operating Activities
|
|
|
|
||||
Net income including noncontrolling interests
|
$
|
678
|
|
|
$
|
611
|
|
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
|
—
|
|
|
(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
|
—
|
|
|
48
|
|
||
Payment for acquisitions, net of cash acquired
|
(727
|
)
|
|
—
|
|
||
Other
|
2
|
|
|
—
|
|
||
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
.
|
Basis of Presentation
|
2
.
|
Use of Estimates
|
3
.
|
Recent Accounting Pronouncements and Updated Accounting Policies
|
4
.
|
Acquisitions and Divestitures
|
5
.
|
Restructuring and Related Implementation Charges
|
|
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
|
|
|
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
|
%
|
|
Cumulative Charges
|
||
|
as of March 31, 2018
|
||
Employee-Related Costs
|
$
|
646
|
|
Incremental Depreciation
|
91
|
|
|
Asset Impairments
|
36
|
|
|
Other
|
816
|
|
|
Total
|
$
|
1,589
|
|
|
|
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
|
|
|
March 31,
2018 |
|
December 31,
2017 |
||||
Raw materials and supplies
|
$
|
258
|
|
|
$
|
267
|
|
Work-in-process
|
49
|
|
|
42
|
|
||
Finished goods
|
1,005
|
|
|
912
|
|
||
Total Inventories
|
$
|
1,312
|
|
|
$
|
1,221
|
|
|
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
|
|
|
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
|
|
9
.
|
Other Comprehensive Income (Loss)
|
|
|
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
|
|
10
.
|
Retirement Plans and Other Retiree Benefits
|
|
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
|
|
11
.
|
Income Taxes
|
12
.
|
Contingencies
|
▪
|
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.
|
13
.
|
Segment Information
|
|
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
|
|
|
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
|
%
|
|
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
|
|
14
.
|
Fair Value Measurements and Financial Instruments
|
|
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
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
||||||||||||||||||||
|
Foreign
Currency Contracts |
|
Interest
Rate Swaps |
|
Total
|
|
Foreign
Currency Contracts |
|
Interest
Rate Swaps |
|
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
|
|
|
—
|
|
|
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
|
|
|
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
|
|
▪
|
Expanding Commercial Hubs
|
▪
|
Extending Shared Business Services and Streamlining Global Functions
|
▪
|
Optimizing Global Supply Chain and Facilities
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Gross profit, GAAP
|
|
$
|
2,408
|
|
|
$
|
2,269
|
|
Global Growth and Efficiency Program
|
|
6
|
|
|
14
|
|
||
Gross profit, non-GAAP
|
|
$
|
2,414
|
|
|
$
|
2,283
|
|
|
|
Three Months Ended March 31,
|
|||||||
|
|
2018
|
|
2017
|
|
Basis Point Change
|
|||
Gross profit margin, GAAP
|
|
60.2
|
%
|
|
60.3
|
%
|
|
(10
|
)
|
Global Growth and Efficiency Program
|
|
0.1
|
|
|
0.4
|
|
|
|
|
Gross profit margin, non-GAAP
|
|
60.3
|
%
|
|
60.7
|
%
|
|
(40
|
)
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Selling, general and administrative expenses, GAAP
|
|
$
|
1,392
|
|
|
$
|
1,336
|
|
Global Growth and Efficiency Program
|
|
(5
|
)
|
|
(21
|
)
|
||
Selling, general and administrative expenses, non-GAAP
|
|
$
|
1,387
|
|
|
$
|
1,315
|
|
|
|
Three Months Ended March 31,
|
|||||||
|
|
2018
|
|
2017
|
|
Basis Point Change
|
|||
Selling, general and administrative expenses as a percentage of Net sales, GAAP
|
|
34.8
|
%
|
|
35.5
|
%
|
|
(70
|
)
|
Global Growth and Efficiency Program
|
|
(0.1
|
)
|
|
(0.5
|
)
|
|
|
|
Selling, general and administrative expenses as a percentage of Net sales, non-GAAP
|
|
34.7
|
%
|
|
35.0
|
%
|
|
(30
|
)
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Other (income) expense, net, GAAP
|
|
$
|
33
|
|
|
$
|
21
|
|
Global Growth and Efficiency Program
|
|
(13
|
)
|
|
(10
|
)
|
||
Other (income) expense, net, non-GAAP
|
|
$
|
20
|
|
|
$
|
11
|
|
|
|
Three Months Ended March 31,
|
|||||||||
|
|
2018
|
|
2017
|
|
% Change
|
|||||
Operating profit, GAAP
|
|
$
|
983
|
|
|
$
|
912
|
|
|
8
|
%
|
Global Growth and Efficiency Program
|
|
24
|
|
|
45
|
|
|
|
|||
Operating profit, non-GAAP
|
|
$
|
1,007
|
|
|
$
|
957
|
|
|
5
|
%
|
|
|
Three Months Ended March 31,
|
|||||||
|
|
2018
|
|
2017
|
|
Basis Point Change
|
|||
Operating profit margin, GAAP
|
|
24.6
|
%
|
|
24.2
|
%
|
|
40
|
|
Global Growth and Efficiency Program
|
|
0.6
|
|
|
1.2
|
|
|
|
|
Operating profit margin, non-GAAP
|
|
25.2
|
%
|
|
25.4
|
%
|
|
(20
|
)
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Non-service related postretirement costs, GAAP
|
|
$
|
24
|
|
|
$
|
27
|
|
Global Growth and Efficiency Program
|
|
(4
|
)
|
|
(1
|
)
|
||
Non-service related postretirement costs, non-GAAP
|
|
$
|
20
|
|
|
$
|
26
|
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||
|
|
2018
|
|
2017
|
||||||||||||||||||
|
|
Income Before Income Taxes
|
|
Provision For Income Taxes
(1)
|
|
Effective Income Tax Rate
(2)
|
|
Income Before Income Taxes
|
|
Provision For Income Taxes
(1)
|
|
Effective Income Tax Rate
(2)
|
||||||||||
As Reported GAAP
|
|
$
|
924
|
|
|
$
|
246
|
|
|
26.6
|
%
|
|
$
|
862
|
|
|
$
|
251
|
|
|
29.1
|
%
|
Global Growth and Efficiency Program
|
|
28
|
|
|
8
|
|
|
0.1
|
|
|
46
|
|
|
15
|
|
|
0.2
|
|
||||
Non-GAAP
|
|
$
|
952
|
|
|
$
|
254
|
|
|
26.7
|
%
|
|
$
|
908
|
|
|
$
|
266
|
|
|
29.3
|
%
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
Income Before Income Taxes
|
|
Provision For Income Taxes
(1)
|
|
Net Income Including Noncontrolling Interests
|
|
Net Income Attributable To Colgate-Palmolive Company
|
|
Diluted Earnings Per Share
(2)
|
||||||||||
As Reported GAAP
|
$
|
924
|
|
|
$
|
246
|
|
|
$
|
678
|
|
|
$
|
634
|
|
|
$
|
0.72
|
|
Global Growth and Efficiency Program
|
28
|
|
|
8
|
|
|
20
|
|
|
20
|
|
|
0.02
|
|
|||||
Non-GAAP
|
$
|
952
|
|
|
$
|
254
|
|
|
$
|
698
|
|
|
$
|
654
|
|
|
$
|
0.74
|
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
|
Income Before Income Taxes
|
|
Provision For Income Taxes
(1)
|
|
Net Income Including Noncontrolling Interests
|
|
Net Income Attributable To Colgate-Palmolive Company
|
|
Diluted Earnings Per Share
(2)
|
||||||||||
As Reported GAAP
|
$
|
862
|
|
|
$
|
251
|
|
|
$
|
611
|
|
|
$
|
570
|
|
|
$
|
0.64
|
|
Global Growth and Efficiency Program
|
46
|
|
|
15
|
|
|
31
|
|
|
31
|
|
|
0.03
|
|
|||||
Non-GAAP
|
$
|
908
|
|
|
$
|
266
|
|
|
$
|
642
|
|
|
$
|
601
|
|
|
$
|
0.67
|
|
|
Three Months Ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Net sales
|
$
|
827
|
|
|
$
|
760
|
|
|
9.0
|
|
%
|
Operating profit
|
$
|
257
|
|
|
$
|
247
|
|
|
4
|
|
%
|
% of Net sales
|
31.1
|
%
|
|
32.5
|
%
|
|
(140
|
)
|
bps
|
|
Three Months Ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Net sales
|
$
|
929
|
|
|
$
|
924
|
|
|
0.5
|
|
%
|
Operating profit
|
$
|
273
|
|
|
$
|
271
|
|
|
1
|
|
%
|
% of Net sales
|
29.4
|
%
|
|
29.3
|
%
|
|
10
|
|
bps
|
|
Three Months Ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Net sales
|
$
|
648
|
|
|
$
|
558
|
|
|
16.0
|
|
%
|
Operating profit
|
$
|
162
|
|
|
$
|
142
|
|
|
14
|
|
%
|
% of Net sales
|
25.0
|
%
|
|
25.4
|
%
|
|
(40
|
)
|
bps
|
|
Three Months Ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Net sales
|
$
|
759
|
|
|
$
|
720
|
|
|
5.5
|
|
%
|
Operating profit
|
$
|
226
|
|
|
$
|
219
|
|
|
3
|
|
%
|
% of Net sales
|
29.8
|
%
|
|
30.4
|
%
|
|
(60
|
)
|
bps
|
|
Three Months Ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Net sales
|
$
|
255
|
|
|
$
|
246
|
|
|
3.5
|
|
%
|
Operating profit
|
$
|
50
|
|
|
$
|
46
|
|
|
9
|
|
%
|
% of Net sales
|
19.6
|
%
|
|
18.7
|
%
|
|
90
|
|
bps
|
|
Three Months Ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Net sales
|
$
|
584
|
|
|
$
|
554
|
|
|
5.5
|
|
%
|
Operating profit
|
$
|
164
|
|
|
$
|
163
|
|
|
1
|
|
%
|
% of Net sales
|
28.1
|
%
|
|
29.4
|
%
|
|
(130
|
)
|
bps
|
|
Three Months Ended March 31,
|
||||||||||
|
2018
|
|
2017
|
|
Change
|
||||||
Operating profit (loss)
|
$
|
(149
|
)
|
|
$
|
(176
|
)
|
|
(15
|
)
|
%
|
▪
|
Becoming even stronger on the ground through the continued evolution and expansion of proven global and regional commercial capabilities, which have already been successfully implemented in a number of the Company
’
s operations around the world.
|
▪
|
Simplifying and standardizing how work gets done by increasing technology-enabled collaboration and taking advantage of global data and analytic capabilities, leading to smarter and faster decisions.
|
▪
|
Reducing structural costs to continue to increase the Company
’
s gross and operating profit.
|
▪
|
Building on Colgate
’
s current position of strength to enhance its leading market share positions worldwide and ensure sustained sales and earnings growth.
|
▪
|
Expanding Commercial Hubs – Building on the success of the hub structure implemented around the world, streamlining operations in order to drive smarter and faster decision-making, strengthen capabilities available on the ground and improve cost structure.
|
▪
|
Extending Shared Business Services and Streamlining Global Functions – Optimizing the Company
’
s shared service organizational model in all regions of the world and continuing to streamline global functions to improve cost structure.
|
▪
|
Optimizing Global Supply Chain and Facilities – Continuing to optimize manufacturing efficiencies, global warehouse networks and office locations for greater efficiency, lower cost and speed to bring innovation to market.
|
|
Three Months Ended
|
||||||
|
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
|
|
|
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
|
%
|
|
Cumulative Charges
|
||
|
as of March 31, 2018
|
||
Employee-Related Costs
|
$
|
646
|
|
Incremental Depreciation
|
91
|
|
|
Asset Impairments
|
36
|
|
|
Other
|
816
|
|
|
Total
|
$
|
1,589
|
|
|
|
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
|
|
Three Months Ended March 31, 2018
|
Net Sales Growth
(GAAP)
|
Foreign
Exchange
Impact
|
Acquisitions and Divestments
Impact
|
Organic
Sales Growth
(Non-GAAP)
|
Oral, Personal and Home Care
|
|
|
|
|
North America
|
9.0%
|
0.5%
|
3.5%
|
5.0%
|
Latin America
|
0.5%
|
—%
|
—%
|
0.5%
|
Europe
|
16.0%
|
14.5%
|
—%
|
1.5%
|
Asia Pacific
|
5.5%
|
5.5%
|
—%
|
—%
|
Africa/Eurasia
|
3.5%
|
4.5%
|
—%
|
(1.0)%
|
Total Oral, Personal and Home Care
|
6.5%
|
4.5%
|
0.5%
|
1.5%
|
Pet Nutrition
|
5.5%
|
4.0%
|
—%
|
1.5%
|
Total Company
|
6.5%
|
4.5%
|
0.5%
|
1.5%
|
Month
|
|
Total Number of Shares Purchased
(1)
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(2)
|
|
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs
(3)
(in millions)
|
||||||
January 1 through 31, 2018
|
|
830,855
|
|
|
$
|
74.71
|
|
|
782,350
|
|
|
$
|
1,013
|
|
February 1 through 28, 2018
|
|
2,043,811
|
|
|
$
|
70.43
|
|
|
1,867,300
|
|
|
$
|
881
|
|
March 1 through 31, 2018
|
|
1,989,713
|
|
|
$
|
69.83
|
|
|
1,936,900
|
|
|
$
|
746
|
|
Total
|
|
4,864,379
|
|
|
$
|
70.92
|
|
|
4,586,550
|
|
|
|
|
(1)
|
Includes share repurchases under the 2015 Program and those associated with certain employee elections under the Company’s compensation and benefit programs.
|
(2)
|
The difference between the total number of shares purchased and the total number of shares purchased as part of publicly announced plans or programs is
277,829
shares, which represents shares deemed surrendered to the Company to satisfy certain employee elections under the Company’s compensation and benefit programs.
|
(3)
|
Includes approximate dollar value of shares that were available to be purchased under the publicly announced plans or programs that were in effect as of
March 31, 2018
.
|
Exhibit No.
|
|
Description
|
10
|
|
|
|
|
|
12
|
|
|
|
|
|
31-A
|
|
|
|
|
|
31-B
|
|
|
|
|
|
32
|
|
|
|
|
|
101
|
|
The following materials from Colgate-Palmolive Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2018, formatted in eXtensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statements of Income; (ii) the Condensed Consolidated Statements of Comprehensive Income; (iii) the Condensed Consolidated Balance Sheets; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) Notes to Condensed Consolidated Financial Statements.
|
|
COLGATE-PALMOLIVE COMPANY
|
|
(Registrant)
|
|
|
|
Principal Executive Officer:
|
|
|
April 27, 2018
|
/s/ Ian Cook
|
|
Ian Cook
|
|
Chairman of the Board, President and
Chief Executive Officer
|
|
|
|
Principal Financial Officer:
|
|
|
April 27, 2018
|
/s/ Dennis J. Hickey
|
|
Dennis J. Hickey
|
|
Chief Financial Officer
|
|
|
|
Principal Accounting Officer:
|
|
|
April 27, 2018
|
/s/ Henning I. Jakobsen
|
|
Henning I. Jakobsen
|
|
Vice President and Corporate Controller
|
ARTICLE I INTRODUCTION
|
1
|
Section 1.1
|
Name of Plan
1
|
Section 1.2
|
Background and Effective Date
1
|
Section 1.3
|
ERISA and Code Status
2
|
Section 2.1
|
“Actuarial Equivalent”
4
|
Section 2.2
|
“Additional EICP Benefit”
4
|
Section 2.3
|
“Base Plan”
5
|
Section 2.4
|
“Benefit Commencement Date”
5
|
Section 2.5
|
“Determination Date”
5
|
Section 2.6
|
“Eligible Employee”
5
|
Section 2.7
|
“Grandfathered Benefit”
5
|
Section 2.8
|
“Maximum Benefit”
6
|
Section 2.9
|
“Member”
7
|
Section 2.10
|
“Member Eligible for the Additional EICP Benefit”
7
|
Section 2.11
|
“Non-Grandfathered Benefit”
8
|
Section 2.12
|
“Specified Employee”
8
|
ARTICLE III BENEFITS
|
9
|
Section 3.1
|
Participation
9
|
Section 3.2
|
Amount of Member’s Benefit
9
|
Section 3.3
|
Amount of Beneficiary’s Benefit
14
|
Section 3.4
|
Time and Form of Payment
15
|
Section 3.5
|
Effect of Changes in the Maximum Benefit
18
|
Section 3.6
|
Reduction in Benefits for Members in Foreign Service
19
|
Section 3.7
|
Reduction in Benefits for Members Electing to Maintain Prior Plan Benefits
19
|
Section 3.8
|
Reduction in Benefits for FICA Tax Imposed on Plan Benefits
|
|
19
|
Section 3.9
|
Benefits Subject to Withholding
20
|
Section 3.10
|
Beneficiary Designation
20
|
ARTICLE IV PLAN ADMINISTRATION
|
21
|
Section 4.1
|
Employee Relations Committee
21
|
Section 4.2
|
Claims Procedures
21
|
Section 4.3
|
Delegated Responsibilities
23
|
Section 4.4
|
Amendment and Termination 23
|
Section 4.5
|
Payments
23
|
Section 4.6
|
Non-Assignability of Benefits
23
|
Section 4.7
|
Plan Unfunded
24
|
Section 4.8
|
Applicable Law
24
|
Section 4.9
|
No Employment Rights Conferred
24
|
Section 4.10
|
Plan to Comply with Code Section 409A
25
|
Section 1.1
|
Name of Plan
. The name of this Plan is the “Supplemental Salaried Employees’ Retirement Plan”.
|
Section 1.2
|
Background and Effective Date
. The original effective date of the Plan is January 1, 1976. The Base Plan was amended effective July 1, 1989 to,
inter alia
, establish pension retirement accounts and to permit lump sum payments of the amounts credited to such accounts. The Base Plan amendment required changes in the administration and interpretation of this Plan. A prior amendment and restatement of the Plan was generally effective for Members and Beneficiaries whose Benefit Commencement Date was on or after July 1, 1989, and was intended to reflect the administration and operation of the Plan in practice since July 1, 1989, including, with respect to benefits earned and vested as of December
|
Section 1.3
|
ERISA and Code Status
. This Plan is intended to be an unfunded plan for the benefit of a select group of management or highly compensated employees exempt from parts 2, 3 and 4 of Title I of the Employee Retirement Income
|
Section 2.1
|
“Actuarial Equivalent” ” shall mean equality in value of the aggregate benefits expected to be received under different forms of payment. For those Members whose benefit under the Base Plan is not calculated under Appendices B, C, or D of the Base Plan, the underlying actuarial assumptions used as a basis for these calculations are those which are stated in the Base Plan. For those Members whose benefit under the Base Plan is calculated under Appendices B, C, or D of the Base Plan, the underlying actuarial assumptions used for calculating lump sums and the reduction under Section 3.7 are those in effect under the Base Plan prior to January 1, 2000. For all other purposes, the assumptions currently in effect under the Base Plan shall be used.
|
Section 2.2
|
“Additional EICP Benefit” ” shall mean a benefit payable for the life of the surviving spouse of any Member Eligible for the Additional EICP Benefit that is equal to 25% of the retirement benefit that would have been payable to such Member under the Base Plan at Normal Retirement Age or, if later, on the Member’s Benefit Commencement Date, if such benefit had been paid in the form of a life annuity and if the limitations of Code sections 401(a)(17) and 415 were not taken into account in calculating the benefit; provided, however, that in any
|
Section 2.3
|
“Base Plan” shall mean the Colgate-Palmolive Company Employees’ Retirement Income Plan, as amended from time to time.
|
Section 2.4
|
“Benefit Commencement Date” shall mean the first day of the month as of which a Member’s benefit is paid as an annuity or in any other form under this Plan.
|
Section 2.5
|
“Determination Date” shall mean the date as of which benefits commence under the Base Plan.
|
Section 2.6
|
“Eligible Employee” shall mean an “Eligible Employee,” as defined in the Base Plan, who is entitled to a retirement benefit under the Base Plan which is limited by Code sections 401(a)(17) and/or 415, and/or any other Employee who satisfies each of the requirements of Section 2.10.
|
Section 2.7
|
“Grandfathered Benefit” shall mean the lesser of (i) the benefit amount stated in a schedule maintained by the Employee Relations Committee (which represents the present value of the amount to which the Member would have been entitled under
|
Section 2.8
|
“Maximum Benefit” shall mean the maximum annual benefit payable in the form of a straight life annuity or, in the case of a married Member, a qualified joint and survivor annuity as defined in Code section 417(b), which is permitted to be paid to a Member under the Base Plan, as determined under all applicable provisions of the Code and ERISA, specifically taking into account the limitations of Code sections 401(a)(17) and 415, and any applicable regulations thereunder. It is intended that the Maximum Benefit, as defined herein, shall automatically
|
Section 2.9
|
“Member” shall mean an Eligible Employee who participates in this Plan pursuant to Section 3.1. An Eligible Employee shall remain a Member under this Plan until all amounts payable on his behalf from this Plan have been paid.
|
Section 2.10
|
“Member Eligible for the Additional EICP Benefit” shall mean an Employee who (i) is in salary grade 19 or above, (ii) has been credited with ten (10) or more years of vesting service under the Base Plan, (iii) is covered under the Above and Beyond Plan, (iv) is not eligible for the indexation of accrued benefit under Section 1.1 of Appendix H of the Base Plan; (v) effective for Benefit Commencement Dates on or after September 27, 2017, elects to receive his benefit under the Base Plan in a form of annuity other than a Joint Annuitant Option with a 100% survivor feature, (vi) has been married to the same Spouse for at least one year prior to his Benefit Commencement Date, (vii) is married to the person described in (vi) at the time of his death, and (viii) either the person described in (vi) and (vii) above is the Member’s only designated beneficiary under the Base Plan or the Base Plan benefit is paid in the form of an annuity that does not require the designation of a beneficiary. In addition to the foregoing requirements and solely for purposes of Section 3.3(b), the Employee also must have attained age 55 prior to death and the Beneficiary’s benefit under the Base
|
Section 2.11
|
“Non-Grandfathered Benefit” shall mean the portion of the benefit payable under this Plan which exceeds the Grandfathered Benefit, calculated using the actuarial assumptions specified in Section 2.1 as of the Determination Date.
|
Section 2.12
|
“Specified Employee” shall mean a person identified in accordance with procedures adopted by the Company that reflect the requirements of Code section 409A(a)(2)(B)(i).
|
Section 3.1
|
Participation
. An Eligible Employee shall become a Member under this Plan on the earlier of (i) the date his accrued benefit under the Base Plan, determined without regard to the limitations of Code Sections 401(a)(17) and 415, exceeds the Maximum Benefit, or (ii) the date he satisfies each of the requirements of Section 2.10.
|
Section 3.2
|
Amount of Member’s Benefit
.
|
(a)
|
In the case of any Member whose Determination Date is coincident with or immediately following his separation from service, such Member shall be entitled to a benefit under this Plan, the Actuarial Equivalent of which is equal to the difference between:
|
(ii)
|
the benefit actually payable under the Base Plan;
|
(c)
|
In addition to any benefit provided under Section 3.2(a) or (b), an Additional EICP Benefit shall be paid to the surviving spouse of any Member Eligible for the Additional EICP Benefit who dies on or after his Benefit Commencement Date.
|
(d)
|
The benefit amount determined under Sections 3.2(a), (b) and (c) above is subject to reduction as provided in Sections 3.6, 3.7 and 3.8. The benefit amount (after the reductions required under Sections 3.6 and 3.7 but prior to the reduction required under Section 3.8), when expressed as a straight life annuity, and then added to the benefit payable under the Base Plan, when expressed as a straight life annuity (in each case using the actuarial assumptions specified in Section 2.1 which are in effect on the Benefit Commencement Date), shall be limited to 70 percent of the Member’s salary based on the date of separation from service plus the value of the executive incentive compensation (whether or not payable in cash) awarded for services rendered in the calendar year immediately preceding the calendar year containing the separation from service date. For this purpose, executive incentive compensation includes cash and non-cash awards under the Executive Incentive Compensation Plan of the Company. Also for this purpose, restricted stock issued pursuant to the Executive Incentive Compensation Plan shall be valued at its publicly traded value on the New York Stock Exchange at the close of business on the date of grant.
|
(e)
|
The benefit amount determined under Sections 3.2(a), (b) and (c) above (after the reductions required under Sections 3.2(d), 3.6, and 3.7 but prior to the reduction required under Section 3.8) when expressed as a present value
|
Section 3.3
|
Amount of Beneficiary’s Benefit
.
|
(a)
|
Upon the death of a Member whose Beneficiary is eligible for a Beneficiary’s benefit under the Base Plan, such Beneficiary shall be entitled to an annual benefit under this Plan equal to the difference between (i) the benefit that would have been payable to the Beneficiary under the Base Plan if the limitations of Code Sections 401(a)(17) and 415 were not taken into account in calculating the benefit; and (ii) the benefit actually payable to the Beneficiary under the Base Plan.
|
(b)
|
In addition to the benefit provided under Section 3.3(a), an Additional EICP Benefit shall be paid to the surviving spouse of any Member Eligible for the Additional EICP Benefit who dies before his Benefit Commencement Date, provided, however, that the amount of such Additional EICP Benefit shall be reduced by any “Death-In-Service Benefit” payable under the Above and Beyond Plan for so long as such benefit is payable under the Above and Beyond Plan.
|
Section 3.4
|
Time and Form of Payment
.
|
(a)
|
Separation from Service On or After January 1, 2008 – Grandfathered
Benefit
. Payment of the Grandfathered Benefit under this Plan to a Member or Beneficiary shall commence as of the Determination Date and, except as provided in this Section 3.4(a), shall be paid in the same form as the benefit payable under the Base Plan.
|
(i)
|
A Member or Beneficiary whose benefit under the Base Plan is calculated under Appendices B, C or D of the Base Plan may request the Employee Relations Committee to approve payment of his Grandfathered Benefit in a lump sum. Such request must be made at least 90 days prior to his retirement date and will be accepted or denied in the sole discretion of the Employee Relations Committee.
|
(ii)
|
Except for Grandfathered Benefits determined under the Hill’s Plan, a Member or Beneficiary whose benefit under the Base Plan is not
|
(iii)
|
In the case of a Member whose Grandfathered Benefit was determined under the Hill’s Plan, and where the Actuarial Equivalent of such Grandfathered Benefit is $20,000 or less, the Employee Relations Committee in its sole discretion may require that the Grandfathered Benefit be paid in a lump sum.
|
(b)
|
Separation from Service on or After January 1, 2008 – Non-Grandfathered Benefit
.
|
(i)
|
A Member whose benefit under the Base Plan is calculated under Appendices B, C or D of the Base Plan and who is married on the date of his separation from service shall receive payment of the Non-Grandfathered Benefit in the form of a Joint and 50% Survivor Annuity commencing as soon as practicable following the Member’s separation from service. If such Member is not married on the date of his separation from service, payment of the Non-Grandfathered Benefit shall be made in the form of a level monthly annuity for life commencing as soon as practicable following the Member’s separation from service. Payment to a Beneficiary shall be made in the form of a level monthly annuity for life commencing as soon as practicable following the Member’s death.
|
(ii)
|
A Member whose benefit under the Base Plan is not calculated under Appendices B, C or D of the Base Plan shall receive payment of the Non-Grandfathered Benefit in the form of a lump sum as soon as practicable following the Member’s separation from service. Payment to the Beneficiary of such a Member who dies before his Benefit Commencement Date shall be made in the form of a lump sum as soon as practicable following the Member’s death. Payment to the surviving spouse of such a Member who is both a Member Eligible for the Additional EICP Benefit and dies after his Benefit Commencement Date shall be made in accordance with Section 3.2(c).
|
(c)
|
Separation from Service Before January 1, 2008
. See Appendix A.
|
(d)
|
Change of Control – Grandfathered Benefit
. Following the occurrence of a “Change of Control,” as defined under Section 6.02 of the Amended and Restated Trust Agreement, dated August 2, 1990, between the Company and the Bank of New York (the “Trust Agreement”), distribution of a Member’s Grandfathered Benefit (other than Grandfathered Benefits determined under the Hill’s Plan) shall be made in accordance with the provisions of Section 4.02(a) of the Trust Agreement.
|
(e)
|
Change of Control – Non-Grandfathered Benefit
. Upon the occurrence of a transaction which is both a “Change of Control,” as defined under Section 6.02 of the Trust Agreement, and meets the requirements of Code Section 409A(a)(2)(A)(v) and the regulations thereunder, a Member whose benefit under the Base Plan is calculated under Appendices B, C or D of the Base Plan and who terminates employment within two years of the date of such transaction shall receive payment of his Non-Grandfathered Benefit in the form of a lump sum. Payments to other Members shall be made in accordance with Section 3.4(b). The foregoing notwithstanding, in any case where the Member is a Specified Employee, payment of the Non-Grandfathered Benefit under this Section 3.4(e) shall be deferred until the earlier of (i) the date that is six months following the Member’s separation from service, or (ii) the date of the Member’s death.
|
Section 3.5
|
Effect of Changes in the Maximum Benefit
. If, prior to a Member’s Benefit Commencement Date, the benefits payable under the Base Plan increase as a
|
Section 3.6
|
Reduction in Benefits for Members in Foreign Service
. A Member’s benefit under this Plan (including his Beneficiary's benefits) based upon his participation in the Plan subsequent to December 31, 1965 shall be reduced by any foreign retirement benefits which the Member has received or will receive which are attributable to direct or indirect contributions by the Company or any of its Subsidiaries or branches. The amount of this reduction shall be determined in accordance with the provisions of the Base Plan.
|
Section 3.7
|
Reduction in Benefits for Members Electing to Maintain Prior Plan Benefits.
For those Members who elected to make Contributions to Maintain Prior Plan Benefits pursuant to Appendix C of the Base Plan, the benefit otherwise payable under this Plan shall be reduced by an amount determined to be the benefit attributable to the contributions that would have been required of the Member under the Base Plan formula to Maintain Prior Plan Benefits for benefits in excess of the Maximum Benefit, and interest thereon calculated at a rate equal to the interest crediting rate under the Base Plan during the period that such contributions would have been required.
|
Section 3.8
|
Reduction in Benefits for FICA Tax Imposed on Plan Benefits
. Effective for Benefit Commencement Dates on or after January 1, 2005, where the Member’s
|
Section 3.9
|
Benefits Subject to Withholding
. The benefits payable under this Plan shall be subject to the deduction of any federal, state, or local income taxes, employment taxes or other taxes which are required to be withheld from such payments by applicable laws and regulations. Any employment taxes owed by the Member with respect to any deferral, accrual or benefit payable under this Plan which have not been satisfied under Section 3.8 may be withheld from benefits paid under this Plan or any other compensation of the Member.
|
Section 3.10
|
Beneficiary Designation
. The Member's Beneficiary for purposes of any survivor benefits under this Plan will automatically be the same as such Member’s Beneficiary under the Base Plan. Notwithstanding any other provision of this Plan, the consent of the Member's Spouse shall not be required to elect a lump sum payment of the Grandfathered Benefit. In the absence of a Beneficiary who survives the Member, upon the Member’s death, payment of any benefit owed to a Member's Beneficiary, if any, shall be made to the Member's estate in a lump sum as soon as practicable.
|
Section 4.1
|
Employee Relations Committee
. This Plan shall be administered by the Employee Relations Committee which shall have full authority to administer and interpret this Plan, make payments and maintain records hereunder, including but not limited to the power:
|
(i)
|
to determine who are Eligible Employees for purposes of participation in the Plan;
|
(ii)
|
to interpret the terms and provisions of the Plan and to determine any and all questions arising under the Plan, including without limitation, the right to remedy possible ambiguities, inconsistencies, or omissions by a general rule or particular decision; and
|
(iii)
|
to adopt rules consistent with the Plan.
|
Section 4.2
|
Claims Procedures
. Any complaint with regard to benefits under the Plan should be directed to the Secretary of the Employee Relations Committee, Colgate-Palmolive, 300 Park Avenue, New York, NY 10022. Such complaint must be
|
Section 4.3
|
Delegated Responsibilities
. The Employee Relations Committee shall have the authority to delegate any of its responsibilities to such persons as it deems proper.
|
Section 4.4
|
Amendment and Termination
. The Company may amend, modify or terminate this Plan at any time, provided, however, that no such amendment, modification or termination shall reduce any benefit under this Plan to which a Member, or the Member’s Beneficiary, is entitled under Article III prior to the date of such amendment or termination, and in which such Member or Beneficiary would have been vested if such benefit had been provided under the Base Plan, unless the Member or Beneficiary either becomes entitled to an amount equal to the Actuarial Equivalent of such benefit under another plan, including the Base Plan, program or practice adopted by the Company or the Member or Beneficiary consents in writing to such reduction. The Employee Relations Committee may make changes to this Plan which do not materially reduce the value of the benefits paid under this Plan to conform to, or take advantage of, any governmental requirements, statutes, regulations or other authority.
|
Section 4.5
|
Payments
. The Company will pay all benefits arising under this Plan and all costs, charges and expenses relating thereto out of its general assets.
|
Section 4.6
|
Non-Assignability of Benefits
. Except as otherwise required by law, neither any benefit payable hereunder nor the right to receive any future benefit under this Plan may be anticipated, alienated, sold, transferred, assigned, pledged, encumbered, or subjected to any charge or legal process, and if any attempt is made to do so, or a person eligible for any benefits under this Plan becomes
|
Section 4.7
|
Plan Unfunded
. Nothing in this Plan shall be interpreted or construed to require the Company in any manner to fund any obligation to the Members or Beneficiaries hereunder. Nothing contained in this Plan nor any action taken here under shall create, or be construed to create, a trust of any kind, or a fiduciary relationship between the Company and the Members or Beneficiaries. Any funds which may be accumulated in order to meet any obligation under this Plan shall for all purposes continue to be a part of the general assets of the Company. To the extent that any Member or Beneficiary acquires a right to receive payments from the Company under this Plan, such rights shall be no greater than the rights of any unsecured general creditor of the Company.
|
Section 4.8
|
Applicable Law
. All questions pertaining to the construction, validity and effect of this Plan shall be determined in accordance with the laws of the State of Delaware, to the extent not preempted by Federal law.
|
Section 4.9
|
No Employment Rights Conferred
. The establishment of the Plan shall not be construed as conferring any rights upon any Eligible Employee for continuation of employment, nor shall it be construed as limiting in any way the right of the
|
Section 4.10
|
Plan to Comply with Code Section 409A
. Notwithstanding any provision to the contrary in this Plan, each provision in this Plan shall be interpreted to permit the deferral of compensation in accordance with Code section 409A and any provision that would conflict with such requirements shall not be valid or enforceable.
|
(c)
|
Separation from Service Prior to January 1, 2008
.
|
(i)
|
Determination Date Prior to January 1, 2006
. Payment of benefits under this Plan to a Member or Beneficiary whose Determination Date is prior to January 1, 2006 shall commence on the Determination Date and, except as provided in this Section 3.4(c)(i), shall be payable in the same form as the benefit payable under the Base Plan.
|
(A)
|
A Member whose benefit is calculated under Appendices B, C or D of the Base Plan and whose Determination Date is on or before July 27, 2005 may request the Employee Relations Committee to approve payment of his Grandfathered Benefit in a lump sum. Such request must be made at least ninety (90) days prior to his retirement date and will be accepted or denied in the sole discretion of the Employee Relations Committee. In the event a lump sum payment request is approved, the amount of the payment shall be determined based upon the actuarial assumptions specified in Section 2.1 which are in effect on the Benefit Commencement Date.
|
(B)
|
A Member whose benefit is calculated under Appendices B, C or D of the Base Plan and whose Determination Date is on or after July 27, 2005 and before January 1, 2006 may request the Employee
|
(C)
|
Any other Member whose benefit under the Base Plan is payable in the form of a lump sum may, with the Employee Relations Committee approval, receive payment of his entire benefit under the Plan in the form of a lump sum. The approval of any such request shall be deemed a cancellation of amounts deferred under the Plan during 2005 pursuant to Q&A-20(a) of IRS Notice 2005-1.
|
(ii)
|
Determination Date After December 31, 2005
.
|
(A)
|
Grandfathered Benefit
. Payment of the Grandfathered Benefit under this Plan to a Member or Beneficiary shall commence on the Determination Date and, except as provided in this Section 3.4(c)(ii)(A), shall be paid in the same form as the benefit payable under the Base Plan.
|
(I)
|
A Member or Beneficiary whose benefit under the Base Plan is calculated under Appendices B, C or D of the Base Plan may request the Employee Relations Committee to approve payment of his Grandfathered Benefit in a lump sum. Such request must be made at least 90 days prior to his retirement date and will be accepted or denied in the sole discretion of the Employee Relations Committee.
|
(II)
|
A Member or Beneficiary whose benefit under the Base Plan is not calculated under Appendices B, C or D may, with the Employee Relations Committee approval, receive payment of his Grandfathered Benefit in the form of a lump sum.
|
(B)
|
Non-Grandfathered Benefit
. Except as otherwise provided herein,
|
(I)
|
a Member whose benefit under the Base Plan is calculated under Appendices B, C or D of the Base Plan and who is married on the date of his separation from service shall receive payment of the Non-Grandfathered Benefit in the form of a Joint and 50% Survivor Annuity, commencing as soon as practicable following the Member’s separation from service. If such Member is not married on the date of his separation from service, payment of the Non-Grandfathered Benefit shall be made in the form of a level monthly annuity for life commencing as soon as practicable following the Member’s separation from service. Payment to a Beneficiary shall be made in the form of a level monthly annuity for life
|
(II)
|
A Member or Beneficiary whose benefit under the Base Plan is not calculated under Appendices B, C or D of the Base Plan shall receive payment of the Non-Grandfathered Benefit in the form of a lump sum as soon as practicable following the Member’s separation from service. Payment to a Beneficiary shall be made in the form of a lump sum as soon as practicable following the Member’s death.
|
(iii)
|
Members under the Hill’s Plan.
Sections 3.4(a) and (b) shall govern the time and form of payment for benefits earned under the Hill’s Plan.
|
|
Three Months Ended
March 31, 2018
|
||
Earnings:
|
|
||
Income before income taxes
|
$
|
924
|
|
Add:
|
|
||
Fixed charges
|
65
|
|
|
Less:
|
|
||
Income from equity investees
|
(3
|
)
|
|
Capitalized interest
|
—
|
|
|
Income as adjusted
|
$
|
986
|
|
Fixed Charges:
|
|
||
Interest on indebtedness and amortization of debt expense and discount or premium
|
$
|
47
|
|
Rents of one-third representative of interest factor
|
18
|
|
|
Capitalized interest
|
—
|
|
|
Total fixed charges
|
$
|
65
|
|
Ratio of earnings to fixed charges
|
15.2
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Colgate-Palmolive Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Ian Cook
|
Ian Cook
|
Chairman of the Board, President and
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Colgate-Palmolive Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Dennis J. Hickey
|
Dennis J. Hickey
|
Chief Financial Officer
|
(1)
|
the Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2018
(the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
(2)
|
information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Colgate-Palmolive Company.
|
/s/ Ian Cook
|
Ian Cook
|
Chairman of the Board, President and
|
Chief Executive Officer
|
|
/s/ Dennis J. Hickey
|
Dennis J. Hickey
|
Chief Financial Officer
|