Colgate-Palmolive Company (NYSE:CL) today reported worldwide Net
sales of $3,721 million in fourth quarter 2016, a decrease of 4.5%
versus fourth quarter 2015. Global unit volume decreased 5.5%,
pricing increased 2.5% and foreign exchange was negative 1.5%.
Excluding the impact of the deconsolidation of the Company’s
Venezuelan operations, unit volume decreased 1.0%. Organic sales
(Net sales excluding the impact of foreign exchange, acquisitions,
divestments and the deconsolidation of the Company’s Venezuelan
operations) grew 1.5%.
Net income and Diluted earnings per share in fourth quarter 2016
were $606 million and $0.68, respectively. Net income in fourth
quarter 2016 included $54 million ($0.06 per diluted share) of
aftertax charges resulting from the Company’s Global Growth and
Efficiency Program (the “2012 Restructuring Program”) and an
aftertax charge of $7 million ($0.01 per diluted share) for a
previously disclosed litigation matter.
Net income (loss) and Diluted earnings (loss) per share in
fourth quarter 2015 were $(458) million and $(0.51), respectively.
Net income (loss) in fourth quarter 2015 included a $1,058 million
($1.18 per diluted share) aftertax charge resulting from the
deconsolidation of the Company’s Venezuelan operations, $41 million
($0.04 per diluted share) of aftertax charges resulting from the
2012 Restructuring Program and an aftertax charge of $14 million
($0.02 per diluted share) for a previously disclosed litigation
matter.
Excluding charges resulting from the 2012 Restructuring Program
and previously disclosed litigation matters in both periods and the
charge for the deconsolidation of the Company’s Venezuelan
operations in 2015, Net income in fourth quarter 2016 was $667
million, an increase of 2% versus fourth quarter 2015, and Diluted
earnings per share in fourth quarter 2016 was $0.75, an increase of
3% versus fourth quarter 2015. Excluding these items in both
periods, as applicable, and excluding Venezuela’s operating results
in both periods, Diluted earnings per share increased
high-single-digit on a currency-neutral basis.
Gross profit margin was 60.4% in fourth quarter 2016 versus
58.8% in fourth quarter 2015. Excluding charges from the 2012
Restructuring Program in both periods, Gross profit margin was
60.8% in fourth quarter 2016, an increase of 180 basis points
versus the year ago quarter. This increase was primarily driven by
cost savings from the Company’s funding-the-growth initiatives and
the 2012 Restructuring Program, and higher pricing, partially
offset by higher raw and packaging material costs, which included
foreign exchange transaction costs and the impact of the
deconsolidation of the Company’s Venezuelan operations effective
December 31, 2015.
Selling, general and administrative expenses were 33.7% of Net
sales in fourth quarter 2016 versus 33.0% of Net sales in fourth
quarter 2015. Excluding charges from the 2012 Restructuring Program
in both periods, Selling, general and administrative expenses
increased by 40 basis points to 32.9% of Net sales in fourth
quarter 2016, primarily due to higher overhead expenses, partially
offset by a decrease in advertising investment, in part reflecting
a shift in advertising investment to in-store promotional
activities. Worldwide advertising investment decreased 8% to $297
million versus $323 million in the year ago quarter.
Operating profit (loss) increased to $955 million in fourth
quarter 2016 compared to $(139) million in fourth quarter 2015.
Excluding charges resulting from the 2012 Restructuring Program and
previously disclosed litigation matters in both periods and the
charge for the deconsolidation of the Company’s Venezuelan
operations in 2015, Operating profit was $1,038 million in fourth
quarter 2016, an increase of 2% versus fourth quarter 2015.
Operating profit margin was 25.7% in fourth quarter 2016 versus
(3.6)% in fourth quarter 2015. Excluding the above noted items in
both periods, as applicable, Operating profit margin was 27.9% in
fourth quarter 2016, an increase of 190 basis points versus the
year ago quarter.
Net cash provided by operations year-to-date was $3,141 million
compared to $2,949 million in the comparable 2015 period,
reflecting strong operating earnings and the timing of income tax
payments, partially offset by the impact of the deconsolidation of
the Company’s Venezuelan operations effective December 31, 2015 and
a voluntary contribution to an employee postretirement plan.
Working capital as a percentage of Net sales was negative 2.2%
compared to 0.5% in the year ago period, reflecting the Company’s
continued tight focus on working capital and the impact of
reclassifying current deferred tax assets to noncurrent deferred
tax assets upon the early adoption of a new accounting
standard.
For the full year 2016, worldwide Net sales were $15,195
million, a decrease of 5.0% versus full year 2015. Global unit
volume decreased 3.0%, pricing increased 2.5% and foreign exchange
was negative 4.5%. Excluding divested businesses and the impact of
the deconsolidation of the Company’s Venezuelan operations, unit
volume increased 1.5%. Organic sales grew 4.0%.
Net income and Diluted earnings per share for full year 2016
were $2,441 million and $2.72, respectively. Full year 2016 results
include $168 million ($0.19 per diluted share) of aftertax charges
resulting from the 2012 Restructuring Program, a $63 million ($0.07
per diluted share) aftertax gain on the sale of land in Mexico, $35
million ($0.04 per diluted share) of benefits from previously
disclosed tax matters and aftertax charges of $11 million ($0.01
per diluted share) from a previously disclosed litigation
matter.
Net income and Diluted earnings per share for full year 2015
were $1,384 million and $1.52, respectively. Full year 2015 results
included aftertax charges of $1,292 million ($1.42 per diluted
share) and an aftertax gain of $120 million ($0.13 per diluted
share) resulting from the items described in Table 9.
Excluding the above noted items in both periods, as applicable,
Net income for full year 2016 decreased 1% versus full year 2015,
and Diluted earnings per share were even with full year 2015.
Excluding the above noted items in both periods, as applicable, and
excluding Venezuela’s operating results in both periods, Diluted
earnings per share for full year 2016 increased double digit on a
currency-neutral basis.
Gross profit margin was 60.0% for full year 2016 versus 58.6%
for full year 2015. Excluding the above noted items in both
periods, as applicable, Gross profit margin was 60.3% in full year
2016, an increase of 160 basis points versus full year 2015. This
increase was primarily driven by cost savings from the Company’s
funding-the-growth initiatives and the 2012 Restructuring Program,
and higher pricing, partially offset by higher raw and packaging
material costs, which included foreign exchange transaction costs
and the impact of the deconsolidation of the Company’s Venezuelan
operations effective December 31, 2015.
Ian Cook, Chairman, President and Chief Executive Officer,
commented on the fourth quarter results, “In the face of continued
challenging macroeconomic conditions worldwide, foreign currency
headwinds accelerating versus expectations, slowing category growth
in several key markets and India’s demonetization, we achieved
another quarter of organic sales growth. While net sales declined
4.5%, worldwide organic sales grew 1.5% led by emerging markets
where organic sales grew 4.5%.
“Colgate’s leadership of the global toothpaste market continued
during the quarter with its global market share now at 44.0%
year-to-date. Our global leadership in manual toothbrushes also
continued with Colgate’s global market share in that category now
at 33.1% year-to-date.
“Pleasingly, gross profit margin, operating profit margin and
net income as a percent to sales all increased versus the year ago
period.
“As we look ahead, uncertainty in global markets and foreign
exchange volatility remain challenging, which sees us redoubling
our focus on profitable growth. While based on current spot rates,
we expect a low-single-digit net sales increase for 2017, we
anticipate another year of solid organic sales growth driven by a
full new product pipeline, engaging marketing programs and strong
advertising support.
“On a GAAP basis, based on current spot rates, we are planning
for a year of gross margin expansion and expect earnings per share
on a dollar basis to be flat.
“Excluding charges related to the 2012 Restructuring Program and
the other 2016 one-time items noted above, based on current spot
rates, we are planning for a year of strong operating cash flow,
gross margin expansion and increased advertising investment and
expect low-single-digit earnings per share growth on a dollar
basis.”
At 11:00 a.m. ET today, Colgate will host a conference call to
elaborate on fourth quarter results. To access this call as a
webcast, please go to Colgate’s website at
http://www.colgatepalmolive.com.
The following are comments about divisional performance for
fourth quarter 2016 versus the year ago period. See attached
Geographic Sales Analysis Percentage Changes and Segment
Information tables for additional information on divisional net
sales and operating profit.
North America (21% of Company
Sales)
North America Net sales, unit volume, pricing, foreign exchange
and organic sales were all even with fourth quarter 2015.
Operating profit in North America decreased 3% in fourth quarter
2016 to $268 million, or 100 basis points to 33.9% of Net sales.
This decrease in Operating profit as a percentage of Net sales was
primarily due to an increase in Selling, general and administrative
expenses partially offset by an increase in Gross profit, both as a
percentage of Net sales. This increase in Gross profit was
primarily driven by cost savings from the Company’s
funding-the-growth initiatives, which were partially offset by
higher raw and packaging material costs. This increase in Selling,
general and administrative expenses was due to higher overhead
expenses.
In the U.S., market share gains year-to-date were seen in
toothpaste, manual toothbrushes, mouthwash, liquid hand soap, body
wash and liquid cleaners. Colgate’s share of the toothpaste market
strengthened to 35.5% year-to-date, up 0.2 share points versus the
year ago period, driven by strong sales of Colgate Max Fresh
Knockout, Colgate Total Daily Repair, Colgate Optic White Platinum
High Impact White, Colgate Sensitive Smart White and Tom’s of Maine
Rapid Relief Sensitive toothpastes. In manual toothbrushes, Colgate
strengthened its brand market leadership in the U.S. with its
market share in that category at 41.4% year-to-date, up 0.2 share
points versus the year ago period, driven by strong sales of
Colgate Total 360° 4 Zone manual toothbrush.
New products succeeding in other categories include Colgate
Total Daily Repair and Colgate Kids mouthwashes, Colgate Total 360°
Whole Mouth Clean battery toothbrush, Softsoap Pure foaming hand
soap, Softsoap Luminous Oils and Irish Spring Signature For Men
body washes and Palmolive Fusion Clean dish liquid.
Latin America (24% of Company
Sales)
Latin America Net sales decreased 10.5% in fourth quarter 2016.
Unit volume decreased 16.5% with 9.0% higher pricing, while foreign
exchange was negative 3.0%. Excluding the impact of the
deconsolidation of the Company’s Venezuelan operations, unit volume
increased 1.5%, driven by volume gains in Mexico. Organic sales for
Latin America increased 10.5%.
Operating profit in Latin America increased 8% in fourth quarter
2016 to $303 million, or 550 basis points to 32.2% of Net sales.
This increase in Operating profit as a percentage of Net sales was
primarily due to an increase in Gross profit, partially offset by
an increase in Selling, general and administrative expenses, both
as a percentage of Net sales. This increase in Gross profit was
primarily driven by cost savings from the Company’s
funding-the-growth initiatives and higher pricing, partially offset
by higher costs, which included foreign exchange transaction costs
and the impact of the deconsolidation of the Company’s Venezuelan
operations effective December 31, 2015. This increase in Selling,
general and administrative expenses was due to higher overhead
expenses and increased advertising investment.
Colgate strengthened its leadership in toothpaste in Latin
America during the quarter, driven by market share gains in Brazil,
Peru, Uruguay, Paraguay, Puerto Rico, Nicaragua and Costa Rica.
Strong sales of Colgate Luminous White Advanced Expert, Colgate
Sensitive Pro-Alivio, Colgate Total Professional Daily Repair and
Colgate Triple Action Extra Whitening toothpastes contributed to
volume growth throughout the region. Colgate’s leadership in the
manual toothbrush category continued throughout the region, driven
by strong sales of Colgate Triple Action and Colgate 360° Gold
manual toothbrushes.
Products in other categories contributing to growth throughout
the region include Colgate Plax Ice Glacial mouthwash, Protex
Pro-Hidrata shower gel, bar soap and liquid hand soap, Protex for
Men 3 in 1 shower gel and bar soap, Palmolive Natural Secrets
shower gel and bar soap, Suavitel Sweet Pleasures fabric
conditioner, Axion Complete dish liquid and Fabuloso Pure Cleaning
liquid cleaner.
Europe (16% of Company
Sales)
Europe Net sales decreased 7.5% in fourth quarter 2016. Unit
volume decreased 2.0%, pricing decreased 1.5% and foreign exchange
was negative 4.0%. Volume declines in France were partially offset
by volume gains in the United Kingdom. Organic sales for Europe
decreased 3.5%.
Operating profit in Europe decreased 5% in fourth quarter 2016
to $142 million, while as a percentage of Net sales, it increased
70 basis points to 26.3% of Net sales. This increase in Operating
profit as a percentage of Net sales was primarily due to a decrease
in Selling, general and administrative expenses, partially offset
by a decrease in Gross profit, both as a percentage of Net sales.
This decrease in Gross profit was primarily driven by higher costs,
primarily driven by higher raw and packaging material costs, which
included foreign exchange transaction costs, and lower pricing due
to increased in-store promotional activities, partially offset by
cost savings from the Company’s funding-the-growth initiatives and
the 2012 Restructuring Program. This decrease in Selling, general
and administrative expenses was due to decreased advertising
investment, in part reflecting a shift in advertising investment to
in-store promotional activities, and lower overhead expenses.
Colgate maintained its oral care leadership in Europe during the
quarter, driven by toothpaste market share gains in Spain, Italy,
Germany, Belgium, Austria, Hungary, Czech Republic, Bulgaria,
Bosnia and Latvia. Premium products succeeding in oral care include
Colgate Max White Optic, Colgate Total Proof and meridol Parodont
Expert toothpastes, Colgate Max White Expert White Toothbrush +
Built-In Whitening Pen, Colgate 360° Advanced Health manual
toothbrush and Colgate Smiles and Colgate Minions™ toothpaste and
manual toothbrushes for kids.
Premium innovations succeeding in other product categories
include Sanex Advanced shower oils and body balms, Palmolive
Gourmet shower gels, Paic Extreme dish liquid, Sanex Men shower gel
and deodorant, a range of Ajax specialist kitchen spray cleaners
and Soupline Complete Care fabric conditioner.
Asia Pacific (18% of Company
Sales)
Asia Pacific Net sales decreased 4.0% during fourth quarter
2016. Unit volume was even with the year ago quarter while pricing
decreased 2.0% and foreign exchange was negative 2.0%. Volume
declines in India, driven by the demonetization, were offset by
volume gains in the Philippines and the Greater China region.
Organic sales for Asia Pacific decreased 2.0%.
Operating profit in Asia Pacific increased 3% in fourth quarter
2016 to $219 million, or 240 basis points to 34.6% of Net sales.
This increase in Operating profit as a percentage of Net sales was
primarily due to a decrease in Selling, general and administrative
expenses, partially offset by a decrease in Gross profit, both as a
percentage of Net sales. This decrease in Gross profit was
primarily driven by higher costs, primarily driven by higher raw
and packaging material costs, which included foreign exchange
transaction costs, and lower pricing due to increased in-store
promotional activities, partially offset by cost savings from the
Company’s funding-the-growth initiatives and sales mix. This
decrease in Selling, general and administrative expenses was due to
lower overhead expenses and decreased advertising investment, in
part reflecting a shift in advertising investment to in-store
promotional activities.
Colgate continued its toothpaste leadership in the Asia Pacific
region during the quarter with market share gains in the
Philippines, Vietnam and Pakistan. New products succeeding in the
region include Colgate Sensitive Salt Minerals, Colgate Total Pro
Breath Health, Colgate Cibaca Vedshakti, Colgate Herbal, Colgate
Enamel Health, Colgate Fresh Confidence Bamboo Charcoal and Colgate
Minions™ toothpastes.
New products succeeding in other categories in the region
include Colgate Slim Soft Charcoal Spiral, Colgate Zig Zag
Charcoal, Colgate Super Flexi Black and Colgate Minions™ manual
toothbrushes, Colgate Plax Ice Infinity and Colgate Plax Spicy
Fresh mouthwash, Palmolive Oil Infusions body wash, liquid hand
soap and body lotions, Protex Thai Therapy bar soap, Ajax Divine
Blends liquid cleaner and Palmolive Fusion Clean dish liquid.
Africa/Eurasia (6% of Company
Sales)
Africa/Eurasia Net sales decreased 1.5% during fourth quarter
2016. Unit volume decreased 12.0%, pricing increased 10.0% and
foreign exchange was positive 0.5%. Volume declines in South Africa
and the Sub Saharan Africa region were partially offset by volume
gains in the North Africa/Middle East region. Organic sales for
Africa/Eurasia decreased 2.0%.
Operating profit in Africa/Eurasia decreased 4% in fourth
quarter 2016 to $48 million, or 50 basis points to 20.0% of
Net sales. This decrease in Operating profit as a percentage of Net
sales was primarily due to an increase in Selling, general and
administrative expenses, partially offset by an increase in Gross
profit, both as a percentage of Net sales. This increase in Gross
profit was mainly driven by cost savings from the Company’s
funding-the-growth initiatives and higher pricing, partially offset
by higher raw and packaging material costs, which included foreign
exchange transaction costs. The increase in Selling, general and
administrative expenses was due to higher overhead expenses and
increased advertising investment.
Colgate continued its toothpaste leadership in Africa/Eurasia
during the quarter, with market share gains in Turkey, Saudi
Arabia, South Africa, the United Arab Emirates, Tunisia, Kuwait,
Kazakhstan, Israel, Qatar, Oman and Bahrain. Successful products
contributing to sales in the region include Colgate Total Pro
Breath Health, Colgate Optic White Lasting White and Colgate Total
Pro Gum Health toothpastes, Colgate 360° Charcoal Gold and Colgate
Slim Soft Sensitive Gum Care manual toothbrushes and Palmolive
Luminous Oils shower gel.
Hill’s Pet Nutrition (15% of Company
Sales)
Hill’s Net sales increased 0.5% in fourth quarter 2016. Unit
volume decreased 2.5% with 2.5% higher pricing, while foreign
exchange was positive 0.5%. Volume declines in the United States,
Western Europe and Japan were partially offset by volume gains in
the rest of Asia, Latin America, Russia and South Africa. Hill’s
organic sales were even with the year ago quarter.
Hill’s Operating profit increased 7% in fourth quarter 2016 to
$174 million, or 200 basis points to 30.1% of Net sales. This
increase in Operating profit as a percentage of Net sales was due
to an increase in Gross profit and a decrease in Other (income)
expense, net, partially offset by an increase in Selling, general
and administrative expenses, all as a percentage of Net sales. This
increase in Gross profit was mainly driven by cost savings from the
Company’s funding-the-growth initiatives and higher pricing,
partially offset by higher costs, primarily driven by higher raw
and packaging material costs, which included foreign exchange
transaction costs. This increase in Selling, general and
administrative expenses was due to higher overhead expenses and
increased advertising investment. This decrease in Other (income)
expense, net was in part due to a foreign sales tax benefit.
Successful products contributing to sales in the U.S. include
Hill’s Prescription Diet z/d for skin and food sensitivities,
Hill’s Prescription Diet i/d for digestive care, Hill’s
Prescription Diet Derm Defense for environmental sensitivities,
Hill’s Science Diet Urinary and Hairball Control, Hill’s Science
Diet Perfect Weight stews, Hill’s Science Diet Healthy Cuisine and
Hill’s Science Diet Sensitive Stomach and Skin Small & Toy
Breed.
Successful products contributing to sales internationally
include Hill’s Prescription Diet Metabolic + Mobility and Metabolic
+ Urinary, Hill’s Prescription Diet Derm Defense, Hill’s
Prescription Diet z/d and Hill’s Prescription Diet i/d.
***
About Colgate-Palmolive: Colgate-Palmolive is a leading global
consumer products company, tightly focused on Oral Care, Personal
Care, Home Care and Pet Nutrition. Colgate sells its products in
over 200 countries and territories around the world under such
internationally recognized brand names as Colgate, Palmolive, Speed
Stick, Lady Speed Stick, Softsoap, Irish Spring, Protex, Sorriso,
Kolynos, elmex, Tom’s of Maine, Sanex, Ajax, Axion, Fabuloso,
Soupline and Suavitel, as well as Hill’s Science Diet, Hill’s
Prescription Diet and Hill’s Ideal Balance. For more information
about Colgate’s global business, visit the Company’s website at
http://www.colgatepalmolive.com. To learn more about Colgate Bright
Smiles, Bright Futures® oral health education program, please visit
http://www.colgatebsbf.com. CL-E
The Company’s annual meeting of shareholders is currently
scheduled for Friday, May 12, 2017.
Market Share Information
Management uses market share information as a key indicator to
monitor business health and performance. References to market share
in this press release are based on a combination of consumption and
market share data provided by third-party vendors, primarily
Nielsen, and internal estimates. All market share references
represent the percentage of the dollar value of sales of our
products, relative to all product sales in the category in the
countries in which the Company competes and purchases data
(excluding Venezuela from all periods). The Company measures
year-to-date market shares from January 1 of the relevant year
through the most recent period for which market share data is
available, which typically reflects a lag time of one or two
months. The Company believes that the third-party vendors it uses
to provide data are reliable, but it has not verified the accuracy
or completeness of the data or any assumptions underlying the data.
In addition, market share information calculated by the Company may
be different from market share information calculated by other
companies due to differences in category definitions, the use of
data from different countries, internal estimates and other
factors.
Cautionary Statement on Forward-Looking
Statements
This press release and the related webcast may contain
forward-looking statements. Such statements may relate, for
example, to sales or volume growth, organic sales growth, profit or
profit margin growth, earnings per share growth (including on a
currency-neutral basis), financial goals, the impact of foreign
exchange volatility, cost-reduction plans including the 2012
Restructuring Program, tax rates, new product introductions or
commercial investment levels, among other matters. These statements
are made on the basis of our views and assumptions as of this time
and we undertake no obligation to update these statements except as
required by law. We caution investors that any such forward-looking
statements are not guarantees of future performance and that actual
events or results may differ materially from those statements.
Investors should consult the Company’s filings with the Securities
and Exchange Commission (including the information set forth under
the caption “Risk Factors” in the Company’s Annual Report on Form
10-K for the year ended December 31, 2015) for information about
certain factors that could cause such differences. Copies of these
filings may be obtained upon request from the Company’s Investor
Relations Department or on the Company’s website at
http://www.colgatepalmolive.com.
Non-GAAP Financial Measures
The following provides information regarding the non-GAAP
financial measures used in this earnings release and/or the related
webcast:
This release discusses Net sales growth (GAAP) and organic sales
growth, which is Net sales growth excluding the impact of foreign
exchange, acquisitions, divestments and the deconsolidation of the
Company’s Venezuelan operations (non-GAAP). Management believes the
organic sales growth measure provides investors and analysts with
useful supplemental information regarding the Company’s underlying
sales trends by presenting sales growth excluding the external
factor of foreign exchange as well as the impact from acquisitions,
divestments and the deconsolidation of the Company’s Venezuelan
operations. See “Geographic Sales Analysis Percentage Changes” for
the three and twelve months ended December 31, 2016 vs 2015
included with this release for a comparison of organic sales growth
to Net sales growth in accordance with GAAP.
To supplement Colgate’s Condensed Consolidated Statements of
Income presented in accordance with GAAP, the Company has disclosed
non-GAAP measures of operating results that exclude certain items.
Worldwide Gross profit, Gross profit margin, Selling, general and
administrative expenses, Selling, general and administrative
expenses as a percentage of Net sales, Other (income) expense, net,
Operating profit, Operating profit margin, Effective income tax
rate, Net income attributable to Colgate-Palmolive Company and
Diluted earnings per common share are discussed both as reported
(on a GAAP basis) and, as applicable, excluding charges resulting
from the 2012 Restructuring Program, a gain on the sale of land in
Mexico, benefits from previously disclosed tax matters, a charge
from a previously disclosed tax matter, charges from previously
disclosed litigation matters, a gain on the sale of the Company’s
South Pacific laundry detergent business, charges related to
effective devaluations in Venezuela and a charge for the
deconsolidation of the Company’s Venezuelan operations (non-GAAP).
These non-GAAP financial measures exclude items that, either by
their nature or amount, management would not expect to occur as
part of the Company’s normal business on a regular basis, such as
restructuring charges, charges for certain litigation and tax
matters, gains and losses from certain divestitures and certain
unusual, non-recurring items. Investors and analysts use these
financial measures in assessing the Company’s business performance,
and management believes that presenting these financial measures on
a non-GAAP basis provides them with useful supplemental information
to enhance their understanding of the Company’s underlying business
performance and trends. These non-GAAP financial measures also
enhance the ability to compare period-to-period financial results.
See “Non-GAAP Reconciliations” for the three and twelve months
ended December 31, 2016 and 2015 included with this release for a
reconciliation of these financial measures to the related GAAP
measures.
The Company uses these financial measures internally in its
budgeting process, to evaluate segment and overall operating
performance and as factors in determining compensation. While the
Company believes that these financial measures are useful in
evaluating the Company’s underlying business performance and
trends, this information should be considered as supplemental in
nature and is not meant to be considered in isolation or as a
substitute for the related financial information prepared in
accordance with GAAP. In addition, these non-GAAP financial
measures may not be the same as similar measures presented by other
companies.
The Company defines free cash flow before dividends as Net cash
provided by operations less Capital expenditures. As management
uses this measure to evaluate the Company’s ability to satisfy
current and future obligations, repurchase stock, pay dividends and
fund future business opportunities, the Company believes that it
provides useful information to investors. Free cash flow before
dividends is not a measure of cash available for discretionary
expenditures since the Company has certain non-discretionary
obligations such as debt service that are not deducted from the
measure. Free cash flow before dividends is not a GAAP measurement
and may not be comparable to similarly titled measures reported by
other companies. See “Condensed Consolidated Statements of Cash
Flows” for the twelve months ended December 31, 2016 and 2015 for a
comparison of free cash flow before dividends to Net cash provided
by operations as reported in accordance with GAAP.
Explanatory Note Regarding
Currency-Neutral Calculations
Diluted earnings per share growth for fourth quarter 2016, on a
currency-neutral basis, eliminates from Diluted earnings per share
growth (GAAP) charges resulting from the 2012 Restructuring
Program, charges from previously disclosed litigation matters, a
charge related to the deconsolidation of the Company’s Venezuelan
operations, 2015 and 2016 Venezuela results and period-over-period
changes in foreign exchange rates in the translation of local
currency results into U.S. dollars. Accordingly, for purposes of
calculating Diluted earnings per share growth for fourth quarter
2016, on a currency-neutral basis, fourth quarter 2016 local
currency results, which include the impact of foreign currency
transaction gains and losses, are translated into U.S. dollars
using average foreign exchange rates for fourth quarter 2015.
Diluted earnings per share growth for full year 2016, on a
currency-neutral basis, eliminates from Diluted earnings per share
growth (GAAP) charges resulting from the 2012 Restructuring
Program, charges for previously disclosed litigation matters, a
charge related to the deconsolidation of the Company’s Venezuelan
operations, 2015 and 2016 Venezuela results, a gain on the sale of
land in Mexico, benefits from previously disclosed tax matters, a
charge from a previously disclosed tax matter, charges related to
effective devaluations in Venezuela, a gain on the sale of the
Company’s South Pacific laundry detergent business and
period-over-period changes in foreign exchange rates in the
translation of local currency results into U.S. dollars.
Accordingly, for purposes of calculating Diluted earnings per share
growth for full year 2016, on a currency-neutral basis, full year
2016 local currency results, which include the impact of foreign
currency transaction gains and losses, are translated into U.S.
dollars using 2015 average foreign exchange rates by quarter.
Management’s estimate of Diluted earnings per share growth on a
currency-neutral basis for full year 2017 eliminates from Diluted
earnings per share growth (GAAP) the impact of the 2016 items
described in Table 9, the 2012 Restructuring Program and
period-over-period changes in foreign exchange rates in the
translation of local currency results into U.S. dollars.
Accordingly, for purposes of estimating Diluted earnings per share
growth for full year 2017, on a currency-neutral basis, estimated
full year 2017 local currency results, which include the impact of
foreign currency transaction gains and losses, are translated into
U.S. dollars using 2016 average foreign exchange rates by
quarter.
(See attached tables for fourth quarter and
full year results.)
Table 1 Colgate-Palmolive Company Condensed
Consolidated Statements of Income For the Three
Months Ended December 31, 2016 and 2015 (Dollars in
Millions Except Per Share Amounts) (Unaudited)
2016 2015 Net sales $ 3,721 $ 3,899 Cost of
sales 1,474 1,606 Gross profit 2,247 2,293 Gross
profit margin 60.4 % 58.8 % Selling, general and
administrative expenses 1,253 1,286 Other (income) expense,
net 39 62 Charge for Venezuela accounting change — 1,084
Operating profit (loss) 955 (139 ) Operating profit
margin 25.7 %
(3.6)
%
Interest (income) expense, net 21 7 Income (loss)
before income taxes 934 (146 ) Provision for income taxes
306 275 Effective tax rate 32.8 %
(188.4)
%
Net income (loss) including noncontrolling interests 628
(421 ) Less: Net income attributable to noncontrolling
interests 22 37 Net income (loss) attributable to
Colgate-Palmolive Company $ 606 $ (458 ) Earnings (loss) per
common share Basic $ 0.68 $ (0.51 ) Diluted (1) $ 0.68 $ (0.51 )
Average common shares outstanding Basic 887.7 896.5 Diluted
(1) 893.2 896.5
Note:(1)The computation for Diluted (loss) per common share for
the three months ended December 31, 2015 excludes 6.6 million of
incremental common shares outstanding during the period as they are
anti-dilutive.
Table 2 Colgate-Palmolive Company
Condensed Consolidated Statements of Income For
the Twelve Months Ended December 31, 2016 and 2015
(Dollars in Millions Except Per Share Amounts) (Unaudited)
2016 2015 Net sales $ 15,195 $ 16,034
Cost of sales 6,072 6,635 Gross profit 9,123 9,399
Gross profit margin 60.0 % 58.6 % Selling, general
and administrative expenses 5,249 5,464 Other (income)
expense, net 37 62 Charge for Venezuela accounting change —
1,084 Operating profit 3,837 2,789 Operating profit
margin 25.3 % 17.4 % Interest (income) expense, net 99 26
Income before income taxes 3,738 2,763 Provision for
income taxes 1,152 1,215 Effective tax rate 30.8 % 44.0 %
Net income including noncontrolling interests 2,586 1,548
Less: Net income attributable to noncontrolling interests
145 164 Net income attributable to Colgate-Palmolive Company
$ 2,441 $ 1,384 Earnings per common share Basic $ 2.74 $
1.53 Diluted $ 2.72 $ 1.52 Average common shares outstanding
Basic 891.8 902.2 Diluted 898.4 909.7
Table 3
Colgate-Palmolive Company Condensed Consolidated
Balance Sheets As of December 31, 2016 and December
31, 2015 (Dollars in Millions) (Unaudited)
December 31, December 31, 2016 2015 Cash and cash
equivalents $ 1,315 $ 970 Receivables, net 1,411 1,427 Inventories
1,171 1,180 Other current assets 441 807 Property, plant and
equipment, net 3,840 3,796 Other assets, including goodwill and
intangibles* 3,945 3,755 Total assets $ 12,123
$ 11,935 Total debt* $ 6,533 $ 6,548 Other current
liabilities 3,292 3,232 Other non-current liabilities 2,281
2,199 Total liabilities 12,106 11,979 Total
Colgate-Palmolive Company shareholders' equity (243 ) (299 )
Noncontrolling interests 260 255 Total liabilities
and shareholders' equity $ 12,123 $ 11,935
Supplemental Balance Sheet Information Debt less cash, cash
equivalents and marketable securities** $ 5,147 $ 5,476 Working
capital % of sales
(2.2)
%
0.5 %
*To conform to the current year presentation required by the
FASB Accounting Standards Update No. 2015-03 “Simplifying the
Presentation of Debt Issuance Costs,” prior period balances of debt
issuance costs have been reclassified from Other assets, including
goodwill and intangibles, and are now presented as a direct
deduction to Total debt.
**Marketable securities of $71 and $102 as of December 31, 2016
and 2015, respectively, are included in Other current assets.
Table 4 Colgate-Palmolive Company
Condensed Consolidated Statements of Cash Flows
For the Twelve Months Ended December 31, 2016 and 2015
(Dollars in Millions) (Unaudited) 2016
2015
Operating Activities Net income including
noncontrolling interests $ 2,586 $ 1,548 Adjustments to reconcile
net income including noncontrolling interests to net cash provided
by operations: Depreciation and amortization 443 449 Restructuring
and termination benefits, net of cash (9 ) 69 Venezuela
remeasurement charges — 34 Stock-based compensation expense 123 125
Gain on sale of land in Mexico (97 )
— Gain on sale of South Pacific laundry detergent business — (187 )
Charge for Venezuela accounting change — 1,084 Deferred income
taxes 56 (51 ) Voluntary benefits plan contributions (53 ) — Cash
effects of changes in: Receivables (17 ) (75 ) Inventories (4 ) (13
) Accounts payable and other accruals 100 (67 ) Other non-current
assets and liabilities 13 33 Net cash provided by
operations 3,141 2,949
Investing Activities Capital
expenditures (593 ) (691 ) Sale of property and non-core products —
9 Purchases of marketable securities and investments (336 ) (742 )
Proceeds from sale of marketable securities and investments 378 599
Proceeds from sale of land in Mexico 60 — Proceeds from sale of
South Pacific laundry detergent business — 221 Payment for
acquisitions, net of cash acquired (5 ) (13 ) Reduction in cash due
to Venezuela accounting change — (75 ) Other (3 ) 7 Net cash
used in investing activities (499 ) (685 )
Financing
Activities Principal payments on debt (7,274 ) (9,181 )
Proceeds from issuance of debt 7,438 9,602 Dividends paid (1,508 )
(1,493 ) Purchases of treasury shares (1,335 ) (1,551 ) Proceeds
from exercise of stock options and excess tax benefits 446
347 Net cash used in financing activities (2,233 ) (2,276 )
Effect of exchange rate changes on Cash and cash equivalents
(64 ) (107 ) Net increase (decrease) in Cash and cash equivalents
345 (119 ) Cash and cash equivalents at beginning of the period 970
1,089 Cash and cash equivalents at end of the period
$ 1,315 $ 970
Supplemental Cash Flow
Information Free cash flow before dividends (Net cash provided
by operations less Capital expenditures) Net cash provided by
operations $ 3,141 $ 2,949 Less: Capital expenditures (593 ) (691 )
Free cash flow before dividends $ 2,548 $ 2,258
Income taxes paid $ 932 $ 1,259
Table 5
Colgate-Palmolive Company Segment Information
For the Three and Twelve Months Ended December 31, 2016
and 2015 (Dollars in Millions) (Unaudited)
Three Months Ended December 31, Twelve Months Ended
December 31, 2016 2015 2016 2015
Net Sales
Oral, Personal and Home Care North America $ 790 $ 789 $
3,183 $ 3,149 Latin America 940 1,050 3,650 4,327 Europe 539 582
2,342 2,411 Asia Pacific 633 658 2,796 2,937 Africa/Eurasia 240
244 960 998 Total Oral, Personal
and Home Care 3,142 3,323 12,931 13,822 Pet Nutrition 579
576 2,264 2,212
Total Net
Sales $ 3,721 $ 3,899 $ 15,195 $ 16,034
Three Months Ended December 31, Twelve Months
Ended December 31, 2016 2015 2016 2015
Operating Profit
(Loss) Oral, Personal and Home Care North America $ 268
$ 275 $ 1,030 $ 974 Latin America 303 280 1,132 1,209 Europe 142
149 579 615 Asia Pacific 219 212 887 888 Africa/Eurasia 48
50 186 178 Total Oral, Personal and
Home Care 980 966 3,814 3,864 Pet Nutrition 174 162 653 612
Corporate(1) (199 ) (1,267 ) (630 ) (1,687 )
Total
Operating Profit (Loss) $ 955 $ (139 ) $ 3,837 $
2,789
Note:(1) Corporate operations include costs related to stock
options and restricted stock units, research and development costs,
Corporate overhead costs, restructuring and related implementation
costs and gains and losses on sales of non-core product lines and
assets.
Corporate Operating profit (loss) for the three months ended
December 31, 2016 includes charges of $72 related to the 2012
Restructuring Program and a charge of $11 for a previously
disclosed litigation matter. For the three months ended December
31, 2015, Corporate Operating profit (loss) included a charge of
$1,084 related to the deconsolidation of the Company’s Venezuelan
operations, charges of $56 related to the 2012 Restructuring
Program and a charge of $14 for a previously disclosed litigation
matter.
Corporate Operating profit (loss) for the twelve months ended
December 31, 2016 includes charges of $228 related to the 2012
Restructuring Program, charges of $17 for a previously disclosed
litigation matter and a gain of $97 resulting from the sale of land
in Mexico. For the twelve months ended December 31, 2015, Corporate
Operating profit (loss) included a charge of $1,084 related to the
deconsolidation of the Company’s Venezuelan operations, charges of
$254 related to the 2012 Restructuring Program, charges of $34
related to the remeasurement of the Company’s Venezuelan
subsidiary's local currency-denominated net monetary assets as a
result of effective devaluations, a charge of $14 for a previously
disclosed litigation matter and a gain of $187 on the sale of the
Company’s laundry detergent business in the South Pacific.
Table 6 Colgate-Palmolive Company
Geographic Sales Analysis Percentage Changes For
the Three Months Ended December 31, 2016 and 2015
(Unaudited) COMPONENTS OF SALES
CHANGE Pricing
Coupons Sales Consumer & Change
Organic As Reported Organic Ex-Divested
Trade Foreign
Region
As
Reported
Sales
Change
Volume(1)
Volume
Volume(2)
Incentives
Exchange
Total Company (4.5)% 1.5% (5.5)% (1.0)% (1.0)% 2.5%
(1.5)%
Europe (7.5)% (3.5)% (2.0)% (2.0)% (2.0)%
(1.5)% (4.0)%
Latin America(3) (10.5)% 10.5%
(16.5)% 1.5% 1.5% 9.0% (3.0)%
Asia Pacific (4.0)%
(2.0)% —% —% —% (2.0)% (2.0)%
Africa/Eurasia (1.5)%
(2.0)% (12.0)% (12.0)% (12.0)% 10.0% 0.5%
Total
International (7.0)% 2.5% (8.0)% (1.0)% (1.0)% 3.5% (2.5)%
North America —% —% —% —% —% —% —%
Total CP
Products (5.5)% 2.0% (6.5)% (1.0)% (1.0)% 3.0% (2.0)%
Hill's 0.5% —% (2.5)% (2.5)% (2.5)% 2.5% 0.5%
Emerging Markets (4) (7.0)% 4.5% (10.0)% (1.0)%
(1.0)% 5.5% (2.5)%
Developed Markets (2.0)% (1.5)%
(1.5)% (1.5)% (1.5)% —% (0.5)%
Notes:(1) As Reported Volume includes the impact of
acquisitions, divestments and the deconsolidation of the Company’s
Venezuelan operations, as applicable.
(2) Ex-Divested Volume excludes the impact of divestments and
the deconsolidation of the Company’s Venezuelan operations, as
applicable.
(3) Effective December 31, 2015, the Company concluded it no
longer met the accounting criteria for consolidation of its
Venezuelan subsidiary (“CP Venezuela”) and began accounting for CP
Venezuela using the cost method of accounting. As a result,
effective December 31, 2015, CP Venezuela’s net assets and results
are no longer included in the Company’s Consolidated Financial
Statements. The impact of the deconsolidation of the Company’s
Venezuelan operations on three months sales and volume was 4.5% for
the Total Company.
(4) Emerging Markets include Latin America, Asia (excluding
Japan), Africa/Eurasia and Central Europe.
Table 7 Colgate-Palmolive Company
Geographic Sales Analysis Percentage Changes For
the Twelve Months Ended December 31, 2016 and 2015
(Unaudited) COMPONENTS OF SALES
CHANGE Pricing
Coupons Sales Consumer & Change
Organic As Reported Organic Ex-Divested
Trade Foreign
Region
As
Reported
Sales
Change
Volume(1)
Volume
Volume(2)
Incentives
Exchange
Total Company (5.0)% 4.0% (3.0)% 1.5% 1.5% 2.5%
(4.5)%
Europe (3.0)% —% 2.5% 2.5% 2.5% (2.5)% (3.0)%
Latin America(3) (15.5)% 10.0% (14.0)% 1.5%
1.5% 8.5% (10.0)%
Asia Pacific(4) (5.0)% 2.0%
(1.0)% 2.0% 2.0% —% (4.0)%
Africa/Eurasia (4.0)% 5.5%
(4.0)% (4.0)% (4.0)% 9.5% (9.5)%
Total International
(8.5)% 5.0% (5.5)% 1.5% 1.5% 3.5% (6.5)%
North
America 1.0% 1.5% 2.5% 2.5% 2.5% (1.0)% (0.5)%
Total
CP Products (6.5)% 4.0% (4.0)% 1.5% 1.5% 2.5% (5.0)%
Hill's 2.5% 2.5% —% —% —% 2.5% —%
Emerging
Markets (5) (9.5)% 6.5% (7.0)% 1.0% 1.0% 5.5% (8.0)%
Developed Markets (1.0)% 1.0% 0.5% 1.5% 1.5% (0.5)%
(1.0)%
Notes:(1) As Reported Volume includes the impact of
acquisitions, divestments and the deconsolidation of the Company’s
Venezuelan operations, as applicable.
(2) Ex-Divested Volume excludes the impact of divestments and
the deconsolidation of the Company’s Venezuelan operations, as
applicable.
(3) Effective December 31, 2015, the Company concluded it no
longer met the accounting criteria for consolidation of its
Venezuelan subsidiary (“CP Venezuela”) and began accounting for CP
Venezuela using the cost method of accounting. As a result,
effective December 31, 2015, CP Venezuela’s net assets and results
are no longer included in the Company’s Consolidated Financial
Statements. The impact of the deconsolidation of the Company’s
Venezuelan operations on twelve months sales and volume was 4.5%
and 4.0%, respectively, for the Total Company.
(4) The sale of the Company’s laundry detergent business in the
South Pacific was completed on August 31, 2015. The impact of the
sale of the Company’s laundry detergent business in the South
Pacific on twelve months sales and volume was 0.5% for the Total
Company.
(5) Emerging Markets include Latin America, Asia (excluding
Japan), Africa/Eurasia and Central Europe.
Table 8 Colgate-Palmolive Company
Non-GAAP Reconciliations For the Three Months
Ended December 31, 2016 and 2015 (Dollars in Millions
Except Per Share Amounts) (Unaudited) Gross
Profit 2016 2015 Gross
profit, GAAP $ 2,247 $ 2,293 2012 Restructuring Program 15 9
Gross profit, non-GAAP $ 2,262 $ 2,302
Basis Point Gross Profit Margin 2016
2015 Change Gross profit margin, GAAP 60.4 % 58.8 %
160 2012 Restructuring Program 0.4 % 0.2 % Gross
profit margin, non-GAAP 60.8 % 59.0 % 180
Selling, General and Administrative Expenses 2016
2015 Selling, general and administrative expenses, GAAP $
1,253 $ 1,286 2012 Restructuring Program (28 ) (20 ) Selling,
general and administrative expenses, non-GAAP $ 1,225 $
1,266
Basis Point Selling, General and
Administrative Expenses as a Percentage of Net Sales
2016 2015 Change Selling, general and
administrative expenses as a percentage of Net sales, GAAP 33.7 %
33.0 % 70 2012 Restructuring Program (0.8 )% (0.5 )%
Selling, general and administrative expenses as a percentage of Net
sales, non-GAAP 32.9 % 32.5 % 40
Other
(Income) Expense, Net 2016 2015 Other (income)
expense, net, GAAP $ 39 $ 62 2012 Restructuring Program (29 ) (27 )
Charges for previously disclosed litigation matters (11 ) (14 )
Other (income) expense, net, non-GAAP $ (1 ) $ 21
Operating Profit (Loss) 2016 2015 %
Change Operating profit (loss), GAAP $ 955 $ (139 ) 787 % 2012
Restructuring Program 72 56 Charges for previously disclosed
litigation matters 11 14 Venezuela deconsolidation — 1,084
Operating profit, non-GAAP $ 1,038 $
1,015 2 %
Basis Point Operating Profit
Margin 2016 2015 Change Operating profit
margin, GAAP 25.7 % (3.6 )% 2930 2012 Restructuring Program 1.9 %
1.4 % Charges for previously disclosed litigation matters 0.3 % 0.4
% Venezuela deconsolidation — % 27.8 % Operating
profit margin, non-GAAP 27.9 % 26.0 % 190
Table
8 Continued Colgate-Palmolive Company
Non-GAAP Reconciliations For the Three Months
Ended December 31, 2016 and 2015 (Dollars in Millions
Except Per Share Amounts) (Unaudited) 2016
Income BeforeIncome
Taxes
Provision ForIncome
Taxes(1)
Net
IncomeIncludingNoncontrollingInterests
Net IncomeAttributable
ToColgate-PalmoliveCompany
Effective IncomeTax
Rate(2)
Diluted EarningsPer
Share(3)
As Reported GAAP $ 934 $ 306 $ 628 $ 606 32.8 % $ 0.68 2012
Restructuring Program 72 18 54 54 (0.5 )% 0.06 Charge for a
previously disclosed litigation matter 11 4 7
7 — % 0.01 Non-GAAP $ 1,017 $ 328 $ 689
$ 667 32.3 % $ 0.75
2015
Income (Loss)BeforeIncome
Taxes
Provision ForIncome
Taxes(1)
Net
Income(Loss)IncludingNoncontrollingInterests
Net
Income(Loss)Attributable
ToColgate-PalmoliveCompany
EffectiveIncomeTax
Rate(2)
DilutedEarnings(Loss)
PerShare(3) (4)
As Reported GAAP $ (146 ) $ 275 $ (421 ) $ (458 ) (188.4 )% $ (0.51
) Venezuela deconsolidation 1,084 26 1,058 1,058 220.4 % 1.18 2012
Restructuring Program 56 15 41 41 (0.3 )% 0.04 Charge for a
previously disclosed litigation matter 14 — 14
14 (0.4 )% 0.02 Non-GAAP $ 1,008 $ 316
$ 692 $ 655 31.3 % $ 0.73
Notes:(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.
(3) The impact of non-GAAP adjustments on Diluted earnings per
share may not necessarily equal the difference between “GAAP” and
“non-GAAP” as a result of rounding.
(4) The computation for Diluted (loss) per common share, GAAP
for the three months ended December 31, 2015 excludes 6.6 million
of incremental common shares outstanding during the period as they
are anti-dilutive. These incremental common shares are included in
the computation for Diluted earnings per common share,
non-GAAP.
Table 9 Colgate-Palmolive Company
Non-GAAP Reconciliations For the Twelve Months
Ended December 31, 2016 and 2015 (Dollars in Millions
Except Per Share Amounts) (Unaudited) Gross
Profit 2016 2015 Gross profit, GAAP
$ 9,123 $ 9,399 2012 Restructuring Program 46 20
Gross profit, non-GAAP $ 9,169 $ 9,419
Basis Point Gross Profit Margin 2016
2015 Change Gross profit margin, GAAP 60.0 % 58.6 %
140 2012 Restructuring Program 0.3 % 0.1 % Gross
profit margin, non-GAAP 60.3 % 58.7 % 160
Selling,
General and Administrative Expenses 2016 2015
Selling, general and administrative expenses, GAAP $ 5,249 $ 5,464
2012 Restructuring Program (77 ) (64 ) Selling, general and
administrative expenses, non-GAAP $ 5,172 $ 5,400
Basis Point Selling, General and Administrative
Expenses as a Percentage of Net Sales 2016 2015
Change Selling, general and administrative expenses as a
percentage of Net sales, GAAP 34.5 % 34.1 % 40 2012 Restructuring
Program (0.5 )% (0.4 )% Selling, general and
administrative expenses as a percentage of Net sales, non-GAAP 34.0
% 33.7 % 30
Other (Income) Expense, Net
2016 2015 Other (income) expense, net, GAAP $ 37 $ 62
2012 Restructuring Program (105 ) (170 ) Gain on sale of land in
Mexico 97 — Charges for previously disclosed litigation matters (17
) (14 ) Venezuela remeasurement charges — (34 ) Gain on sale of
South Pacific laundry detergent business — 187 Other
(income) expense, net, non-GAAP $ 12 $ 31
Operating Profit 2016 2015 % Change
Operating profit, GAAP $ 3,837 $ 2,789 38 % 2012 Restructuring
Program 228 254 Gain on sale of land in Mexico (97 ) — Charges for
previously disclosed litigation matters 17 14 Venezuela
deconsolidation — 1,084 Venezuela remeasurement charges — 34 Gain
on sale of South Pacific laundry detergent business — (187 )
Operating profit, non-GAAP $ 3,985 $ 3,988
— %
Basis Point Operating Profit Margin
2016 2015 Change Operating profit margin, GAAP
25.3 % 17.4 % 790 2012 Restructuring Program 1.5 % 1.6 % Gain on
sale of land in Mexico (0.7 )% — % Charges for previously disclosed
litigation matters 0.1 % 0.1 % Venezuela deconsolidation — % 6.8 %
Venezuela remeasurement charges — % 0.2 % Gain on sale of South
Pacific laundry detergent business — % (1.2 )%
Operating profit margin, non-GAAP 26.2 % 24.9 % 130
Table 9 Continued Colgate-Palmolive Company
Non-GAAP Reconciliations For the Twelve
Months Ended December 31, 2016 and 2015 (Dollars in
Millions Except Per Share Amounts) (Unaudited)
2016
IncomeBeforeIncomeTaxes
ProvisionForIncomeTaxes(1)
Net
IncomeIncludingNon-controllingInterests
Less:IncomeAttributable
ToNon-controllingInterests
Net IncomeAttributable
ToColgate-PalmoliveCompany
EffectiveIncomeTax
Rate(2)
DilutedEarningsPer
Share(3)
As Reported GAAP $ 3,738 $ 1,152 $ 2,586 $ 145 $ 2,441 30.8 % $
2.72 2012 Restructuring Program 228 59 169 1 168 (0.3 )% 0.19 Gain
on sale of land in Mexico (97 ) (34 ) (63 ) — (63 ) (0.1 )% (0.07 )
Benefits from previously disclosed
taxmatters
— 35 (35 ) — (35 ) 0.9 % (0.04 )
Charges for a previously
disclosedlitigation matter
17 6 11 — 11 — % 0.01
Non-GAAP $ 3,886 $ 1,218 $ 2,668 $ 146
$ 2,522 31.3 % $ 2.81
2015
IncomeBeforeIncomeTaxes
ProvisionForIncomeTaxes(1)
Net
IncomeIncludingNon-controllingInterests
Less:IncomeAttributable
To Non-controllingInterests
Net IncomeAttributable
ToColgate-PalmoliveCompany
EffectiveIncomeTax
Rate(2)
DilutedEarningsPer
Share(3)
As Reported GAAP $ 2,763 $ 1,215 $ 1,548 $ 164 $ 1,384 44.0 % $
1.52 Venezuela deconsolidation 1,084 26 1,058 — 1,058 (11.7 )% 1.16
2012 Restructuring Program 254 69 185 2 183 (0.3 )% 0.20 Venezuela
remeasurement charges 34 12 22 — 22 — % 0.02
Gain on sale of South Pacific
laundrydetergent business
(187 ) (67 ) (120 ) — (120 ) (0.2 )% (0.13 )
Charge for a previously
disclosedlitigation matter
14 — 14 — 14 (0.1 )% 0.02
Charge for a previously disclosed
taxmatter
— (15 ) 15 — 15 (0.4 )% 0.02
Non-GAAP $ 3,962 $ 1,240 $ 2,722 $ 166
$ 2,556 31.3 % $ 2.81
Notes:(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.
(3) The impact of non-GAAP adjustments on Diluted earnings per
share may not necessarily equal the difference between “GAAP” and
“non-GAAP” as a result of rounding.
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Colgate-Palmolive CompanyJohn Faucher, 212-310-3653orHope
Spiller, 212-310-2291
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