COLGATE PALMOLIVE CO - Annual Report: 2023 (Form 10-K)

Non-Service Related Postretirement Costs

Non-service related postretirement costs were $360 in 2023 compared to $80 in 2022. In 2023, Non-service related postretirement costs included charges related to the ERISA litigation matter and charges resulting from the 2022 Global Productivity Initiative. In 2022, Non-service related postretirement costs included charges resulting from the 2022 Global Productivity Initiative. Excluding these charges in both periods, as applicable, Non-service related postretirement costs were $88 in 2023 compared to $65 in 2022.


	2023		2022
Non-service related postretirement costs, GAAP	$	360	$	80
ERISA litigation matter	(267)		—
2022 Global Productivity Initiative	(5)		(15)
Non-service related postretirement costs, non-GAAP	$	88	$	65

Interest (Income) Expense, Net

Interest (income) expense, net was $232 in 2023 compared to $153 in 2022, primarily due to higher average interest rates on debt.

(Dollars in Millions Except Per Share Amounts)

Income Taxes

The effective income tax rate was 27.6% in 2023 and 26.1% in 2022. As reflected in the table below, the non-GAAP effective income tax rate was 23.6% in 2023 and 23.3% in 2022.


	2023
	Income Before Income Taxes		Provision For Income Taxes(1)		Effective Income Tax Rate(2)
As Reported GAAP	$	3,392	$	937	27.6	%
ERISA litigation matter	267		55		(0.5)	%
Foreign tax matter	—		(126)		(3.4)	%
2022 Global Productivity Initiative	32		6		(0.1)	%
Product recall costs	25		6		—	%
Non-GAAP	$	3,716	$	878	23.6	%


	2022
	Income Before Income Taxes		Provision For Income Taxes(1)		Effective Income Tax Rate(2)
As Reported GAAP	$	2,660	$	693	26.1	%
Goodwill and intangible assets impairment charges	721		101		(2.6)	%
2022 Global Productivity Initiative	110		22		(0.1)	%
Gain on the sale of land in Asia Pacific	(47)		(11)		—	%
Acquisition-related costs	19		3		(0.1)	%
Non-GAAP	$	3,463	$	808	23.3	%

_______

(1) The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.

(2) The impact of non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income before income taxes and Provision for income taxes.

The effective income tax rate in all years benefited from tax planning associated with the Company’s global business initiatives.

In the third quarter of 2023, the Internal Revenue Service (the “IRS”) issued a notice giving taxpayers temporary relief from the effects of certain U.S. tax regulations that were issued in December 2021, which place greater restrictions on foreign taxes that are creditable against U.S. taxes on foreign-source income. This notice allowed taxpayers to defer the application of these new regulations through the end of 2023. In December 2023, the IRS issued further guidance modifying this temporary relief period to the date that a notice or other guidance withdrawing or modifying the temporary relief is issued.

In the second quarter of 2023, the Company reassessed with its legal and tax advisers certain tax deductions taken in prior years by one of its subsidiaries and concluded that it is more likely than not that the deductions would not be sustained by the courts in that jurisdiction. The value of the tax deductions was not material to the Company in any year in which they were taken. The cumulative effect of the change in tax position of $148 was reflected as a discrete item in the second quarter’s income tax expense, partially offset by the reversal of certain prior years’ withholding tax reserves of $22 that are no longer required. The tax liability was paid in the quarter ended September 30, 2023. The current year impact of these changes is included in the Company’s full year effective income tax rate.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted, which among other things, implements a 15% minimum tax on book income of certain large corporations effective for years beginning after December 31, 2022. Based on the Company’s analysis, as well as recently published guidance by the IRS, the IRA, and in particular the 15% minimum tax, did not have an impact on the Company’s Consolidated Financial Statements. The Company will continue to evaluate the potential impact of this law as additional guidance and clarification becomes available.

(Dollars in Millions Except Per Share Amounts)

Additionally, on December 15, 2022, the 27 member states of the European Union (“EU”) reached an agreement on a minimum level of taxation for certain large corporations to pay a minimum corporate tax rate of 15% in every jurisdiction in which they operate. This agreement, which is known as the Minimum Tax Directive (part of the “Pillar II Model Rules”), was supposed to be transposed into the laws of all EU member states by December 31, 2023. Most member states complied while some were granted extensions of time. In addition, many other jurisdictions outside the EU have also committed to implement this Directive while others have implemented a similar minimum tax regime consistent with the policy of the Pillar II Model Rules. The Company is currently evaluating the impact of this Directive and believes that the impact on its Consolidated Financial Statements will not be material.

The Company has ongoing federal, state and international income tax audits in various jurisdictions and evaluates uncertain tax positions that may be challenged by local tax authorities and not fully sustained. All U.S. federal income tax returns through December 31, 2013 have been audited by the IRS and there are limited matters which the Company plans to appeal for years 2010 through 2013. One such matter relates to the IRS assessment of taxes on the Company by imputing income on certain activities within one of our international operations, which is also under audit for the years 2014 through 2018. There were U.S. Tax Court rulings during 2023 in favor of the IRS against unrelated third parties on similar matters. Despite the U.S. Tax Court rulings, the Company continues to believe that the tax assessment against the Company is without merit. While there can be no assurances, the Company believes this matter will ultimately be decided in favor of the Company. The amount of tax plus interest for the years 2010 through 2018 is estimated to be approximately $145, which is not included in the Company’s uncertain tax positions.

(Dollars in Millions Except Per Share Amounts)

Net income attributable to Colgate-Palmolive Company and Earnings per share

Net income attributable to Colgate-Palmolive Company was $2,300, or $2.77 per share on a diluted basis, in 2023, an increase from $1,785, or $2.13 per share on a diluted basis, in 2022. In 2023, Net income attributable to Colgate-Palmolive Company included charges resulting from the ERISA litigation matter, the foreign tax matter, the 2022 Global Productivity Initiative and product recall costs. In 2022, Net income attributable to Colgate-Palmolive Company included goodwill and intangible assets impairment charges, charges resulting from the 2022 Global Productivity Initiative, a gain on the sale of land in Asia Pacific and acquisition-related costs.

Excluding the items described above in both periods, as applicable, Net income attributable to Colgate-Palmolive Company increased 8% to $2,682 in 2023 from $2,493 in 2022, and Earnings per common share on a diluted basis increased 9% to $3.23 in 2023 from $2.97 in 2022.


	2023
	Income Before Income Taxes		Provision For Income Taxes(1)		Net Income Including Noncontrolling Interests		Less: Income Attributable To Noncontrolling Interests		Net Income Attributable to Colgate-Palmolive Company		Diluted Earnings Per Share(2)
As Reported GAAP	$	3,392	$	937	$	2,455	$	155	$	2,300	$	2.77
ERISA litigation matter	267		55		212		—		212		0.26
Foreign tax matter	—		(126)		126		—		126		0.15
2022 Global Productivity Initiative	32		6		26		1		25		0.03
Product recall costs	25		6		19		—		19		0.02
Non-GAAP	$	3,716	$	878	$	2,838	$	156	$	2,682	$	3.23

Gains (losses) on cash flow hedges() Total Other comprehensive income (loss), net of tax ()Total Comprehensive income including noncontrolling interests Less: Net income attributable to noncontrolling interests Less: Cumulative translation adjustments attributable to noncontrolling interests()()()Total Comprehensive income attributable to noncontrolling interests Total Comprehensive income attributable to Colgate-Palmolive Company$ $ $

See Notes to Consolidated Financial Statements.

COLGATE-PALMOLIVE COMPANY

Consolidated Balance Sheets

As of December 31,

(Dollars in Millions Except Share and Per Share Amounts)


	2023	2022
Assets
Current Assets
Cash and cash equivalents	$	$
Receivables (net of allowances of $ and $, respectively)
Inventories
Other current assets
Total current assets
Property, plant and equipment, net
Goodwill
Other intangible assets, net
Deferred income taxes
Other assets
Total assets	$	$
Liabilities and Shareholders’ Equity
Current Liabilities
Notes and loans payable	$	$
Current portion of long-term debt
Accounts payable
Accrued income taxes
Other accruals
Total current liabilities
Long-term debt
Deferred income taxes
Other liabilities
Total liabilities
Commitments and contingent liabilities
Shareholders’ Equity
Common stock, $ par value ( shares authorized, shares issued)
Additional paid-in capital
Retained earnings
Accumulated other comprehensive income (loss)	()	()
Unearned compensation		()
Treasury stock, at cost	()	()
Total Colgate-Palmolive Company shareholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity	$	$

See Notes to Consolidated Financial Statements.

COLGATE-PALMOLIVE COMPANY

Consolidated Statements of Changes in Shareholders’ Equity

(Dollars in Millions)

Colgate-Palmolive Company Shareholders’ Equity

Common Stock

Additional Paid-In Capital

Unearned Compensation

Treasury Stock

Retained Earnings

Accumulated Other Comprehensive Income (Loss)

Noncontrolling Interests

Balance, January 1, 2021

()

Net income

—

Other comprehensive income (loss), net of tax

—

()

Dividends ($)/per share*

—

()

—

()

Stock-based compensation expense

—

Shares issued for stock options

—

Shares issued for restricted stock awards

—

()

—

Treasury stock acquired

—

()

—

Other

—

Balance, December 31, 2021

()

Net income

—

Other comprehensive income (loss), net of tax

—

()

Dividends ($)/per share*

—

()

—

()

Stock-based compensation expense

—

Shares issued for stock options

—

Shares issued for restricted stock awards

—

()

—

Treasury stock acquired

—

()

—

Other

—

Balance, December 31, 2022

()

Net income

—

Other comprehensive income (loss), net of tax

—

()

Dividends ($)/per share*

—

()

—

()

Stock-based compensation expense

—

Shares issued for stock options

—

Shares issued for restricted stock awards

—

()

—

Cash effects of changes in:

Receivables

()

Inventories

()

Accounts payable and other accruals

()

Other non-current assets and liabilities

()

Net cash provided by operations

Investing Activities

Capital expenditures

()

Purchases of marketable securities and investments

()

Proceeds from sale of marketable securities and investments

Restructuring and related implementation charges in the preceding table are recorded in the Corporate segment as these initiatives are predominantly centrally directed and controlled and are not included in internal measures of segment operating performance.

% % %Latin America % % %Europe % % %Asia Pacific % % %Africa/Eurasia % % %Hill's Pet Nutrition % % %Corporate % % %Total % % %

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

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

Incremental Depreciation Asset Impairments Other Total$

$ $ $ $ Charges Cash Payments() ()()Charges against assets() ()Foreign exchange() ()

Balance at December 31, 2022

$ $ $ $ $ Charges Cash Payments () ()()Charges against assets() () ()Foreign exchange

Balance at December 31, 2023

$ $ $ $ $

Employee-Related Costs primarily include severance and other termination benefits and are calculated based on long-standing benefit practices, written severance policies, local statutory requirements and, in certain cases, voluntary termination arrangements. Employee-Related Costs also include pension enhancements of $ for the twelve months ended December 31, 2023, and $ for the twelve months ended December 31, 2022, which are reflected as Charges against assets within Employee-Related Costs in the preceding tables as the corresponding balance sheet amounts are reflected as a reduction of pension assets or an increase in pension liabilities.

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

$ $ $()$ Latin America Europe ()() Asia Pacific () Africa/Eurasia () Total Oral, Personal and Home Care ()() Pet Nutrition () Total Goodwill$ $ $()$()$


	2023
	Beginning Balance	Acquisitions	Impairments	Foreign currency translation	Ending Balance
Oral, Personal and Home Care
North America	$	$	$	$	$
Latin America
Europe
Asia Pacific
Africa/Eurasia				()
Total Oral, Personal and Home Care
Pet Nutrition				()
Total Goodwill	$	$	$	$	$

(1) For information related to the Company's acquisitions, refer to Note 3, Acquisitions

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

$()$ $ $()$ Other finite life intangible assets () () Indefinite life intangible assets — — Total Other intangible assets$ $()$ $ $()$

The change in the net carrying amounts of Other intangible assets during 2023 was due to foreign currency translation and amortization expense of $. Annual estimated amortization expense for each of the next five years is expected to be approximately $. In 2023, the Company re-characterized a certain trademark from an indefinite to a finite life intangible asset based on an assessment of certain macroeconomic conditions, historical performance and demand. The carrying value of this trademark as of December 31, 2023 is $ and is being amortized over its estimated remaining useful life of years.

As of the date of the annual goodwill impairment test, the fair value of the Filorga reporting unit in the Europe segment approximates its carrying value. The carrying value of goodwill associated with this reporting unit is $ as of December 31, 2023. The estimated fair value of the Company’s remaining reporting units substantially exceeds their carrying value.

As of the date of the annual impairment test of indefinite-lived intangible assets, the fair value of one of the Company’s indefinite-lived trademark intangible assets approximates its carrying value. The carrying value of this trademark is $ as of December 31, 2023.

Given the inherent uncertainties of estimating the future impacts of interest rates and inflation on macroeconomic conditions, actual results may differ from management's current estimates which could potentially result in additional impairment charges in future periods.

In the fourth quarter of 2022, the Company made revisions to the internal forecasts relating to its Filorga reporting unit due primarily to the continued impact of the COVID-19 pandemic, particularly in China, as a result of government restrictions and reduced consumer mobility, which negatively impacted consumption in the duty-free, travel retail and pharmacy channels. The Company concluded that the changes in circumstances in this reporting unit and the impact of significantly higher interest rates triggered the need for an interim impairment review of its indefinite-lived trademark, goodwill, and long-lived assets which consists primarily of customer relationships. As a result of the interim impairment test, the Company concluded that the carrying value of the trademark and customer relationships exceeded their estimated fair value, and recorded impairment charges of $ and $, respectively, reducing their carrying values to $ and $, respectively, as of December 31, 2022. After adjusting the carrying values of the trademark and customer relationship intangible assets, the Company completed a quantitative impairment test for goodwill and recorded a goodwill impairment charge of $ in the Filorga reporting unit, reducing the carrying value of goodwill to $ as of December 31, 2022. The goodwill and intangible assets impairment charges are presented as a separate line item in the Consolidated Statements of Income.

The Company used the income approach to determine the fair value of the Filorga reporting unit, indefinite-lived trademark and customer relationships that required significant judgments and estimates by management regarding several key inputs, including future cash flows consistent with management’s plans, sales growth rates, customer attrition rate, and the selection of a royalty rate and a discount rate, among others. Estimating sales growth rates requires significant judgment by management in areas such as future economic conditions, category and industry growth rates, product pricing, consumer tastes and preferences and future expansion expectations.

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

%2024-2078$ $ Commercial paper%2024 Finance Lease ObligationsVarious Less: Current portion of long-term debt()()Total $ $

The Company classifies commercial paper and notes maturing within the next twelve months as long-term debt when it has the intent and ability to refinance such obligations on a long-term basis. 2025 2026 2027 2028 Thereafter

The Company has entered into foreign exchange contracts related to certain of these debt instruments. See Note 7, Fair Value Measurements and Financial Instruments for further information about the Company’s financial instruments.

The Company’s debt issuances and redemptions support its capital structure strategy objectives of funding its business and growth initiatives while minimizing its risk-adjusted cost of capital. In March 2023, the Company issued $ of Senior Notes at a fixed coupon rate of %, $ of Senior Notes at a fixed coupon rate of % and $ of Senior Notes at a fixed coupon rate of %. In August 2022, the Company issued $ of Senior Notes at a fixed coupon rate of %, $ of Senior Notes at a fixed coupon rate of % and $ of Senior Notes at a fixed coupon rate of %.

At December 31, 2023, the Company had access to unused domestic and foreign lines of credit of $ (including under the facility discussed below) and could also issue long-term debt pursuant to an effective shelf registration statement. In November 2022, the Company entered into an amended and restated $ revolving credit facility with a syndicate of banks for a term expiring November 2027, which replaced, on substantially similar terms, the Company’s $ revolving credit facility that was scheduled to expire in August 2026. In November 2023, the Company extended the term of the credit facility for an additional year, expiring in November 2028. Commitment fees related to the credit facility are not material.

Certain agreements with respect to the Company’s bank borrowings contain financial and other covenants as well as cross-default provisions. Noncompliance with these requirements could ultimately result in the acceleration of amounts owed. The Company is in full compliance with all such requirements and believes the likelihood of noncompliance is remote.

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

countries and territories, it is exposed to currency fluctuations related to manufacturing and selling its products in currencies other than the U.S. dollar. The Company manages its foreign currency exposures through a combination of cost containment measures, sourcing strategies, selling price increases and the hedging of certain costs in an effort to minimize the impact on earnings of foreign currency rate movements.

The Company primarily utilizes foreign currency contracts, including forward and swap contracts, option contracts, foreign and 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. The duration of foreign currency contracts generally does not exceed 12 months and the contracts are valued using observable market rates (Level 2 valuation).

Interest Rate Risk

The Company manages its targeted mix of fixed and floating rate debt with debt issuances and by entering into interest rate swaps in order to mitigate fluctuations in earnings and cash flows that may result from interest rate volatility. The Company utilizes forward-starting interest rate swaps to mitigate the risk of variability in interest rate for future debt issuances. The notional amount, interest payment and maturity date of the swaps generally match the principal, interest payment and maturity date of the related debt, and the swaps are valued using observable benchmark rates (Level 2 valuation).

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

Other accruals Commodity contractsOther current assets Other accruals Total designated $ $ $ $

_______

(1)Pooled funds primarily invest in U.S. and foreign equity securities, debt and money market securities.

(2)The fixed income securities are traded over-the-counter and certain of these securities lack daily pricing or liquidity and as such are classified as Level 2. As of December 31, 2023, approximately % and, as of December 31, 2022, approximately % of the U.S. pension plan fixed income portfolio was invested in U.S. treasury or agency securities, with the remainder invested in other government bonds and corporate bonds.

(3)The guaranteed investment contracts (“GICs”) represent contracts with insurance companies measured at the cash surrender value of each contract. The Level 2 valuation reflects that the cash surrender value is based principally on a referenced pool of investment funds with active redemption.

(4)Investments that are measured at fair value using net asset value (“NAV”) per share as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the value of the underlying investments owned, minus its liabilities, divided by the number of shares outstanding. There are no unfunded commitments related to these investments. Redemption notice period primarily ranges from - months and redemption frequency windows range from daily to quarterly.

(5)Fixed income funds primarily invest in U.S. government and investment grade corporate bonds.

(6)Consists of investments in underlying hedge fund strategies that are primarily implemented through the use of long and short equity and fixed income securities and derivative instruments such as futures and options.

(7)Multi-asset funds primarily invest across a variety of asset classes, including global stocks and bonds, as well as alternative strategies.

(8)Real estate is valued using the NAV per unit of funds that are invested in real estate property. The investment value of the real estate property is determined quarterly using independent market appraisals as determined by the investment manager.

100

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

t include any investment in the Company’s common stock at either December 31, 2023 or December 31, 2022. shares of the Company’s stock were purchased by the U.S. plans in 2023 or 2022. The plans received dividends on the Company’s common stock in either 2023 or 2022.

Other Retiree Benefits

The Company and certain of its subsidiaries provide, to the extent not otherwise provided by government-sponsored plans, health and life insurance benefits or subsidies for retired employees who meet applicable eligibility requirements.

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COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

$ $ $ $ $ Service cost Interest cost Participants’ contributions Plan amendments ()()Actuarial loss (gain) () () ()Foreign exchange impact () Termination benefits Curtailments and settlements ()()() Benefit payments()()()()()()ERISA litigation matter Benefit obligations at end of year$ $ $ $ $ $ Change in Plan Assets Fair value of plan assets at beginning of year$ $ $ $ $ $ Actual return on plan assets () () Company contributions Participants’ contributions Foreign exchange impact () Settlements and acquisitions ()()() Benefit payments()()()()()() 20232022Benefit Obligation Exceeds Fair Value of Plan Assets Accumulated postretirement benefit obligation$ $ Fair value of plan assets

104

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

$ $ $ $ $ $ $ $ Interest cost Expected return on plan assets()()()()()() Amortization of transition and prior service costs (credits) ()() Amortization of actuarial loss Net periodic benefit cost$ $ $ $ $ $ $ $ $ Other postretirement charges () ERISA litigation matter Total pension cost$ $ $()$ $ $ $ $ $ Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost Discount rate % % %

% % % % % %Expected long-term rate of return on plan assets % % % % % %N/AN/A %Long-term rate of compensation increase % % % % % % % % %ESOP growth rate % % % % % % % % %Medical cost trend rate of increase % % % % % % % % %Interest Crediting Rate % % % % % % % % %

105

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

incurred pursuant to the 2022 Global Productivity Initiative. The Company made voluntary contributions in 2023, 2022, and 2021.

Expected Contributions and Benefit Payments

At present, the Company does not expect to make any voluntary contributions to its U.S. postretirement plans for the year ending December 31, 2024. Actual funding may differ from current estimates depending on the variability of the market value of the assets, changes in the benefit obligations and other market or regulatory conditions.

Benefit payments expected to be paid from the Company’s assets to participants in unfunded plans are estimated to be approximately $ for the year ending December 31, 2024.

$ $ $ 2025 2026 2027 2028 2029-2033

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COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

11.

$ $ International Total Income before income taxes$ $ $

$ $ International Total Provision for income taxes$ $ $

$ $ Property, plant and equipment() ()Pension and other retiree benefits ()()Stock-based compensation () Right-of-use assets/lease liabilities ()()Tax credits and tax loss carryforwards, net of valuation allowance ()Deferred withholding tax ()Research and Experimentation Capitalization Other, net () Total deferred tax benefit (provision)$ $ $

% % %State income taxes, net of federal benefit() Earnings taxed at other than United States statutory rate

$ Short-term lease cost Variable lease cost Sublease Income()()Total lease cost$ $

Short-term lease cost represents the Company’s cost with respect to leases with a duration of 12 months or less and is not reflected on the Company’s Consolidated Balance Sheets. Variable lease costs are comprised of costs, such as the Company’s proportionate share of actual costs for utilities, common area maintenance, property taxes and insurance, that are not included in the lease liability and are recognized in the period in which they are incurred.

117

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

and $, respectively

▪Lease assets obtained in exchange for lease liabilities: $ and $, respectively.

As of December 31, 2023 and 2022, the weighted-average remaining lease term for operating leases was and years, respectively, and the weighted-average discount rate for operating leases was % and %, respectively.

118

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

16.

119

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

17.

$ $ Equity income()()()2022 Global Productivity Initiative Product recall costs Losses (gains) from marketable securities and other assets ()()Indirect tax payments (refunds) ()()Gain on the sale of land in Asia Pacific () Acquisition-related costs Value-added tax matter in Brazil ()Other, net () Total Other (income) expense, net$ $ $

$ $ Interest capitalized()()()Interest income()()()Loss on early extinguishment of debt Total Interest (income) expense, net$ $ $

$ $ Advertising$ $ $

120

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

18.

$ Work-in-process Finished goods Total Inventories, net$ $ Non-current inventory, net()()Current Inventories, net$ $

Inventories valued under LIFO amounted to $ and $ at December 31, 2023 and 2022, respectively. The excess of current cost over LIFO cost at the end of each year was $ and $, respectively. The liquidations of LIFO inventory quantities had no material effect on income in 2023, 2022 and 2021. Inventory classified as non-current at December 31, 2023 was recorded on the Consolidated Balance Sheets as “Other assets.”

$ Buildings Manufacturing machinery and equipment Other equipment Accumulated depreciation()()Total Property, plant and equipment, net$ $

$ Accrued payroll and employee benefits Accrued taxes other than income taxes Restructuring accrual Pension and other retiree benefits Lease liabilities due in one year Accrued interest Derivatives Other Total Other accruals$ $

$ Long-term lease liabilities Other Total Other liabilities$ $

121

COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Share and Per Share Amounts)

19.

$()$()Tax amounts ()()Cumulative translation adjustments, net of tax ()()Pension and other benefits: Net actuarial gain (loss), prior service costs and settlements
during the period()

Amortization of net actuarial loss, transition and prior service costs(1)

Retirement Plan and other retiree benefit adjustments, pre-tax() Tax amounts ()()Retirement Plan and other retiree benefit adjustments, net of tax () Cash flow hedges: Unrealized gains (losses) on cash flow hedges()

Reclassification of (gains) losses into net earnings on cash flow hedges(2)

()() Gains (losses) on cash flow hedges, pre-tax() Tax amounts ()()Gains (losses) on cash flow hedges net of tax() Total Other comprehensive income (loss), net of tax$ $ $()

_________

(1)These components of Other comprehensive income (loss) are included in the computation of total pension cost. See Note 10, Retirement Plans and Other Retiree Benefits for additional details.

(2)These (gains) losses are reclassified into Cost of sales. See Note 7, Fair Value Measurements and Financial Instruments for additional details.

There were no tax impacts on Other comprehensive income (loss) attributable to Noncontrolling interests.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) is comprised of cumulative foreign currency translation gains and losses, unrecognized pension and other retiree benefit costs and unrealized gains and losses from derivative instruments designated as cash flow hedges. At December 31, 2023 and 2022, Accumulated other comprehensive income (loss) consisted primarily of aftertax unrecognized pension and other retiree benefit costs of $ and $, respectively, and aftertax cumulative foreign currency translation adjustments of $ and $, respectively. Foreign currency translation adjustments in 2023 primarily reflect gains from the Euro, Mexican Peso and Brazilian Real. Foreign currency translation adjustments in 2022 primarily reflect losses from the Euro, Indian Rupee and Colombian Peso.

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COLGATE-PALMOLIVE COMPANY

$ $ $ $ Valuation allowance for deferred tax assets$ $ $ $ $ Year Ended December 31, 2022

Allowance for doubtful accounts and estimated returns

$ $ $ $ $ Valuation allowance for deferred tax assets$ $ $ $ $ Year Ended December 31, 2021

Allowance for doubtful accounts and estimated returns

$ $ $ $ $ Valuation allowance for deferred tax assets$ $ $ $ $

123

COLGATE-PALMOLIVE COMPANY

Market Information

The Company’s common stock is listed on the New York Stock Exchange, and its trading symbol is CL.

Stock Price Performance Graphs

The following graphs compare cumulative total shareholder returns on Colgate-Palmolive Company common stock against the S&P Composite-500 Stock Index and two peer company indices for the twenty-year, ten-year and five-year periods each ended December 31, 2023. The peer company indices are comprised of consumer products companies that have both domestic and international businesses. In 2023, the Company made changes to the peer group to reduce the prevalence of U.S. focused food companies and to add more companies with a significant presence in oral care, personal care and/or home care. For 2023, the peer company index consisted of Church & Dwight Co., Inc., The Clorox Company, The Coca-Cola Company, The Estee Lauder Companies, Inc., General Mills, Inc., Haleon plc, Kellanova (formerly known as Kellogg Company), Kenvue Inc. (from and after its spin-off from Johnson & Johnson), Kimberly-Clark Corporation, The Kraft Heinz Company, Mondelez International, Inc., PepsiCo, Inc., The Procter & Gamble Company, Reckitt Benckiser Group plc and Unilever PLC. This index is identified as the “New Peer Group” on the graphs. For 2022, the peer company index consisted of Campbell Soup Company, The Clorox Company, The Coca-Cola Company, ConAgra Brands, Inc., The Estée Lauder Companies, Inc., General Mills, Inc., Johnson & Johnson, Kellogg Company, Kimberly-Clark Corporation, The Kraft Heinz Company, Mondēlez International, Inc., PepsiCo, Inc., The Procter & Gamble Company, Reckitt Benckiser Group plc and Unilever PLC. The prior year index is identified as the “Old Peer Group” on the graphs.

These performance graphs do not constitute soliciting material, are not deemed filed with the SEC and are not incorporated by reference in any of the Company’s filings under the Securities Act of 1933 or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual Report on Form 10-K and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates these performance graphs by reference therein.

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COLGATE PALMOLIVE CO - Annual Report: 2023 (Form 10-K)

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