Colgate-Palmolive (CL) 10-K risk factor changes: FY2021 vs FY2020

- changing macroeconomic conditions in our markets, including as a result of [added: inflation,] volatile commodity [removed: prices, including] [added: prices and increases in] the [removed: price] [added: cost] of [removed: oil;][added: raw and packaging materials, labor, energy and logistics;]

[removed: Brexit continues to pose legal, political] [added: These uncertainties include the impact of the EU-UK Trade] and [removed: economic uncertainty, which could subject us to heightened risks] [added: Cooperation Agreement on businesses] in the [removed: region,] [added: EU and the United Kingdom and how the new relationship between the EU and the United Kingdom will develop over time,] including disruptions to trade and the free movement of goods, services and people to and from the United Kingdom, increased foreign exchange volatility with respect to the British pound [added: and/or the euro] and disruptions to our workforce and that of [removed: our suppliers and business partners.]

In addition, [added: during the COVID-19 pandemic,] we have experienced and may continue to experience [removed: increased] [added: elevated] demand for [removed: many] [added: some] of our products [removed: in response] [added: as compared] to [removed: COVID-19.][added: pre-pandemic levels.]

Increasing dependence on key retailers in developed markets, changes in the policies of our retail trade customers, the emergence of alternative retail channels and the rapidly changing retail landscape [added: and changing consumer preferences] may adversely affect our business.

They have used and may continue to use this leverage to demand higher trade discounts, allowances, slotting fees or increased investment, including through display media, paid search, preparation fees and co-op programs, which [added: have led to and] could [added: continue to] lead to reduced sales or [removed: profitability.][added: profitability in certain markets.]

We also have been and may continue to be negatively affected by changes in the policies or practices of our retail trade customers, such as inventory de-stocking, [added: fulfillment requirements,] limitations on access to shelf space, delisting of our products, or environmental, sustainability, supply chain or packaging [removed: initiatives and other conditions.][added: standards or initiatives.]

[removed: For example, a determination] by a key retailer that any of our ingredients should not be used in certain consumer products or that our packaging does not comply with certain environmental, supply chain or packaging standards or initiatives could adversely impact our business, results of operations, cash flows and financial condition.

[removed: In addition,] [added: Further,] the retail landscape in many of our markets continues to evolve as a result of the rapid growth of eCommerce retailers, changing consumer preferences (as consumers increasingly shop [removed: online)] [added: online] and [added: via mobile and social applications) and] the increased presence of alternative retail channels, such as subscription services and direct-to-customer [added: (DTC)] businesses.

If we are not successful in continuing to adapt or [added: to] effectively react to changes in consumer preferences, purchasing patterns and market dynamics and/or expanding sales through eCommerce retailers and other alternative retail channels, [added: including the profitable expansion of] our [added: own DTC capabilities, our] business, results of operations, cash flows and financial condition could be adversely affected.

Our ability to quickly innovate [removed: and] to adapt and market our products [removed: to meet evolving consumer preferences] and to adapt our packaging to meet evolving [removed: customer] [added: consumer] preferences is an essential part of our business strategy.

- [removed: Volatility] [added: volatility] in the demand for and availability of our products, which may be caused by the temporary inability of our consumers to purchase our products due to illness, financial hardship, quarantine, government actions mandating the closure of our [added: facilities (which impacted some of our production facilities in Asia in 2021),] distributors or retailers [removed: or] [added: and/or] imposing travel or movement restrictions, shifts in demand and consumption away from more discretionary or higher priced products to lower-priced products or pantry-loading activity;

- [removed: Substantial increases] [added: significant volatility] in demand for certain of our [removed: products requiring] [added: products, which may require] us to increase our production capacity or acquire additional capacity at an additional cost and expense;

- [removed: Changes] [added: changes] in purchasing patterns of our consumers, including the [added: nature and/or] frequency of in-store visits by consumers to retailers and dental, veterinary and skin health professionals and a shift to purchasing our products online [removed: from eCommerce retailers;][added: and disruptions in certain channels, including travel retail;]

- [removed: Disruptions] [added: disruptions] to our global supply chain, including the closure of manufacturing and distribution facilities, due to, among other things, the [added: lack of] availability of raw and packaging materials or manufacturing components; a decrease in our workforce or in the efficiency of such workforce, including as a result of illness, travel restrictions, absenteeism or governmental regulations; transportation and logistics challenges, including as a result of port and border closures and other governmental restrictions or [removed: reduced shipping capacity;] [added: volume and capacity restraints;] or the impact of COVID-19 on our retailers, third party suppliers, contract manufacturers, logistics providers or distributors;

- [removed: Volatility] [added: volatility] in foreign exchange rates and [added: increases] in [added: the cost of] raw and packaging materials and [added: transportation and] logistics costs.

Despite our efforts to manage these impacts, their ultimate impact also depends on factors beyond our knowledge or control, including the duration, severity and geographic scope of an outbreak, such as COVID-19, [added: including] the [removed: availability, widespread distribution] [added: emergence] and [removed: use] [added: spread] of [removed: safe] [added: COVID-19 variants, the availability, distribution, acceptance] and [removed: effective] [added: effectiveness of] vaccines and the actions taken [added: by governmental authorities and other third parties] to contain its spread and mitigate its public health and economic [removed: effects.][added: effects, each of which is uncertain, rapidly changing and difficult to predict.]

Accordingly, we devote significant time and resources to programs designed to protect and preserve our reputation, such as our [removed: Ethics and Compliance, Diversity, Equity] [added: ethics] and [removed: Inclusion, Sustainability] [added: compliance, DE&I, sustainability] and [removed: Social Impact, Brand Protection] [added: social impact, brand protection] and [removed: Product Safety, Regulatory] [added: product safety, regulatory] and [removed: Quality] [added: quality] initiatives.

Negative publicity about us, our brands, our products, our supply chain, our ingredients, our packaging, our environmental, social and governance [added: (“ESG”)] practices, including as they relate to [removed: diversity, equity and inclusion,] [added: sustainability, DE&I,] or our employees, whether or not deserved, could jeopardize our reputation.

Such negative publicity could relate to, among other things, health concerns, threatened or pending litigation or regulatory proceedings, environmental [removed: impacts] [added: impact] (including deforestation, packaging, plastic, energy and water use and waste management), our [removed: environmental, social and governance practices,] [added: ESG practices] or [removed: other] [added: our] sustainability [removed: or policy issues.][added: targets.]

In addition, [removed: widespread use] [added: the proliferation] of digital and social media [removed: by consumers] has greatly increased the accessibility of information and the speed of its [removed: dissemination.][added: dissemination and the potential for negative publicity.]

Negative publicity, posts or comments on [added: digital and] social media about us, our brands, our products, our [removed: packaging] [added: sustainability efforts, our environmental and social impact (including our packaging)] or our employees, whether true or untrue, could damage our brands and our reputation.

While we have policies and procedures for managing these relationships, they inherently involve a lesser degree of control over business operations, compliance and [removed: environmental, social and governance] [added: ESG] practices, thereby potentially increasing our reputational and legal risk.

Further, changes in immigration laws and [added: government] policies, including [removed: during] [added: related to] the COVID-19 pandemic, have [removed: made] [added: made,] in certain [removed: circumstances] [added: circumstances,] and may continue to make it more difficult for us to recruit or relocate highly skilled technical, professional and management personnel to meet our business needs.

In addition, we [removed: are working] [added: also continue] to [added: work to] advance culture change through the implementation of [removed: diversity, equity and inclusion] [added: DE&I] initiatives throughout our organization.

We have pursued and may continue to pursue acquisitions of brands, [removed: businesses] [added: businesses, assets] or technologies from third parties.

Acquisitions and their pursuit [removed: involve] [added: have involved, and can involve,] numerous potential risks, including, among other things:

- successfully integrating the operations, technologies, services, products and systems of the acquired [removed: brands] [added: brands, assets] or businesses in an effective, timely and cost-efficient manner;

Moreover, acquisitions have resulted in and could in the future result in substantial additional debt, [removed: exposure to] [added: the assumption of] contingent liabilities, such as litigation or earn-out obligations, [removed: the potential impairment of goodwill] or [removed: other intangible assets, or] transaction costs.

Any of these [removed: risks, should they materialize,] [added: risks] could adversely impact our business, results of operations, cash flows and financial condition.

We are engaged in [removed: manufacturing] [added: the manufacture] and sourcing of products and materials on a global scale.

- the lack of availability of qualified personnel, such as truck [removed: drivers;][added: drivers and production labor;]

- natural disasters, including climatic events (including any potential [removed: effect] [added: effects] of climate change) and earthquakes, acts of war or terrorism, political unrest or uncertainty, fires or explosions, cyber-security incidents and other external factors over which we have no control.

In addition, we purchase certain key raw and packaging materials from single-source suppliers or a limited number of suppliers and new suppliers may have to be qualified under industry, governmental [removed: and] [added: and/or] Colgate standards, which can require additional investment and take a significant period of time.

Nonetheless, a significant disruption to the manufacturing or sourcing of products or materials for any reason, including those mentioned above, [removed: could] [added: have at times interrupted and could, in the future,] interrupt product supply and, if not remedied, could have an adverse impact on our business, results of operations, cash flows and financial condition.

In addition, as a result of our global shared service organizational model, certain of our functions, such as [removed: marketing, payroll,] finance and accounting, customer service and logistics, [removed: and] human resources, [added: global information technology and data analytics] are concentrated in key office facilities.

Raw and packaging material commodities, such as essential oils, resins, [removed: pulp,] tropical oils, [added: pulp,] tallow, corn, poultry and soybeans, are subject to market price variations.

Increases in the costs of and/or a reduction in the availability of commodities, energy and logistics [added: (including trucks] and [added: containers) and] other necessary services, including during the COVID-19 pandemic, have affected and [removed: may] [added: are likely to] continue to adversely affect our profit margins.

[removed: Also, sustained price increases may lead to declines in volume as competitors may not adjust their prices or consumers may] decide not to pay higher prices, which could lead to sales declines and loss of market share and could adversely affect our business, results of operations, cash flows and financial condition.

- collecting, storing, transferring and/or processing customer, consumer, employee, vendor, investor and other stakeholder information and personal data, including, but not limited to, such data from residents of the European Union who are covered by the General Data Protection Regulation, which went into effect on May 25, 2018, and [removed: residents of the State of California who are covered by the California Consumer Privacy Act of 2018, which went into effect on January 1, 2020;]

In addition, although we have policies and procedures in place to ensure that all personal information collected by us or our third-party service providers is securely maintained, data [removed: breaches] [added: leakages] due to human error or intentional or unintentional conduct have occurred and likely will continue to occur.

In addition, there continue to be uncertainties related to the United Kingdom’s exit from the European Union (“EU”) (commonly referred to as Brexit), including the long-term impact of the bilateral trade and cooperation deal governing the future relationship between the United Kingdom and the EU (the “EU-UK Trade and Cooperation Agreement”).

our suppliers and business partners.

For example, a determination

These trends accelerated during the COVID-19 pandemic.

Furthermore, these and other impacts of COVID-19 could also have the effect of heightening many of the other risk factors included in this Item 1A, “Risk Factors.” For additional information regarding how COVID-19 has affected or is expected to affect our business, refer to

Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Executive Overview.”

Our ability to attract and retain talent has been and may continue to be impacted by challenges in the labor market, particularly in the United States, which is experiencing wage inflation, labor shortages, a shift toward remote work and the effects of COVID-19.

We are also implementing new ways of working to, among other things, instill a growth mindset to drive innovation with focus, empowerment, experimentation and digitization.

- achieving distribution expansion related to products, categories and markets;

In addition, to the extent that the economic benefits associated with an acquisition or investment diminish in the future or the performance of an acquired company or business is less robust than expected, we may be required to record additional impairments of intangible assets, including trademarks and goodwill.

In the fourth quarter of 2021, we took a non-cash, aftertax impairment charge of $518 million to adjust the carrying values of goodwill and a trade name intangible asset related to the Filorga skin health business.

If our existing or new suppliers fail to meet such standards or if we are unable to contract with suppliers on favorable terms, our business, results of operations, cash flows and financial condition could be adversely affected.

Inflationary pressures have also increased and may continue to increase the cost of such commodities and services.

Also, sustained price increases may lead to declines in volume as competitors may not adjust their prices or consumers may

We may not realize the benefits that we expect from our 2022 Global Productivity Initiative.

On January 27, 2022, the Board approved a targeted productivity program (the “2022 Global Productivity Initiative”).

The program is intended to reallocate resources toward our strategic priorities and faster growth businesses, drive efficiencies in our operations and streamline our supply chain to reduce structural costs.

The successful implementation of the program may present organizational challenges and, in some cases, may require successful negotiations with third parties.

As a result, we may not be able to realize all of the anticipated benefits from the 2022 Global Productivity Initiative.

Events and circumstances, such as financial or strategic difficulties, delays and unexpected costs may occur that could result in our not realizing all of the anticipated benefits or our not realizing such benefits on our expected timetable.

In addition, changes in foreign exchange rates or in tax, labor or immigration laws may result in our not achieving the anticipated cost savings as measured in U.S. dollars.

If we are unable to realize the anticipated savings from the 2022 Global Productivity Initiative, our ability to fund other initiatives and enhance profitability may be adversely affected.

Any failure to implement the 2022 Global Productivity Initiative in accordance with our expectations could adversely affect our business, results of operations, cash flows and financial condition.

For additional information regarding the 2022 Global Productivity Initiative, refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Restructuring and Related Implementation Charges.”

residents of the State of California who are covered by the California Consumer Privacy Act of 2018, which went into effect on January 1, 2020;

In addition, while we currently maintain insurance coverage that, subject to its terms and conditions, is intended to address costs associated with certain aspects of cyber-security incidents and IT System failures, this insurance coverage may not, depending on the specific facts and circumstances surrounding an incident, cover all losses or all types of claims that arise from an incident, or the damage to our business, reputation or brands that may result from an incident.

Specifically,

Such additional regulation may adversely affect our business, results of operations, cash flows and financial condition by increasing our compliance and manufacturing costs and/or negatively impacting our reputation if we are unable to, or are perceived (whether or not valid) not to, satisfy such requirements.

We are also subject to laws and sanctions imposed by the U.S. (including, without limitation, those imposed by OFAC) and/or by other jurisdictions that may prohibit us or certain of our affiliates from doing business in certain countries, or restrict the kind of business that may be conducted.

Even if a claim is

interest rate, foreign currency or commodity price exposures.

As these and other tax laws and related regulations change, our business, results of operations, cash flows and financial condition could be materially impacted.

In addition, the impact of the United Kingdom’s exit from the European Union (commonly referred to as Brexit) continues to be unclear.

As a result, we have seen and expect to continue to see heightened competitive activity from our competitors in certain of our categories, including more aggressive product claims and marketing challenges and the marketing of new products in high demand categories.

We do this by developing and selling products globally that make people’s [added: and their pets’] lives healthier and more enjoyable and by embracing our sustainability and social impact and [removed: diversity, equity and inclusion] [added: DE&I] strategies across our organization.

In addition, we review market share [added: and other] data to assess how our brands are performing within their categories on a global and regional basis.

The COVID-19 pandemic and government steps to reduce the spread and address the impact of COVID-19 have had and continue to have a profound impact on the way people live, work, interact and shop and have significantly impacted and [removed: will likely] continue to impact economic activity around the world.

During the [removed: year ended December 31, 2020,] [added: COVID-19 pandemic,] many of the communities in which we manufacture, market and sell our products experienced [removed: unprecedented] [added: and in some cases continue to experience] “stay at home” orders, travel or movement restrictions and other government actions to reduce the spread and address the impact of COVID-19, and have implemented varying policies to [added: address the pandemic,] resume economic [removed: activity.][added: activity and vaccinate their populations.]

Because the vast majority of our products (such as oral care products, soaps and other personal hygiene products, home cleaners and pet food) have been deemed essential for the health and well-being of people and their pets, we have, in most instances, been able to continue operating our [removed: business.][added: business, although not always at full capacity.]

[removed: In doing so, the] [added: The] health, safety and well-being of our employees [added: and their families] has been and remains our first priority.

In addition, during the [removed: year ended December 31, 2020,] [added: COVID-19 pandemic,] we [removed: experienced some limited factory closures] [added: have seen increased instances of absenteeism] and, in some cases, we have [removed: seen increased instances of absenteeism.][added: experienced some limited production facility closures and related supply chain disruptions.]

We saw a significant increase in demand across many of our [removed: categories in the year ended December 31, 2020,] [added: categories,] such as liquid hand soap, dish liquid, bar soap and cleaners, [added: during 2020 as a result of the COVID-19 pandemic,] driven by consumer pantry-loading and increased consumption of our products.

We believe that some of [removed: the increase in] [added: this increased] consumption [removed: in these categories] is sustainable [removed: in light of changes in] [added: due to] consumer behavior [added: changes] related to COVID-19.

Across our business, changes in consumer demand for our products vary by product [removed: category] [added: category, channel] and geography depending on, among other things, the severity of the COVID-19 [removed: outbreak] [added: outbreak, the availability of our products at retailers] and [removed: retailer availability.][added: supply chain disruptions.]

While we believe that, in the long-term, consumer demand for the products in our categories will continue to be strong, uncertainties continue surrounding the [removed: timing and extent of the pandemic and the recovery from it.][added: COVID-19 pandemic.]

These uncertainties include: the impact of the timing and scale of changes to travel and movement restrictions in certain geographies, the availability and widespread distribution and use of [removed: safe and effective] COVID-19 [removed: vaccines] [added: vaccines, the emergence] and [removed: when communities will reach herd immunity,] [added: spread of COVID-19 variants,] the timing and impact of consumer pantry-loading and destocking activity in certain markets, product demand trends and the impact of COVID-19 on the global [removed: economy.][added: economy, including as a result of inflation, and supply chain disruptions.]

[removed: Our] [added: COVID-19 has also disrupted our] retail customers, contract manufacturers, logistics providers and other third [removed: parties are also being impacted by the global pandemic;] [added: parties;] their [removed: success in addressing] [added: ability to address] COVID-19 and [removed: maintaining] [added: maintain] their operations [removed: could] [added: at full capacity has impacted and may continue to] impact [added: sales of and] consumer access to [removed: and sales of] our products.

We expect the ongoing economic impact and health concerns associated with COVID-19 to continue to impact consumer behavior, shopping patterns and consumption preferences [removed: despite the lifting of government restrictions and the reopening of economies around the world.][added: during 2022.]

While we currently expect to be able to continue operating our business as described above and we intend to continue to work with government authorities and to follow the necessary protocols to maintain the health and safety of our employees and [removed: contract providers,] [added: third parties,] uncertainty resulting from COVID-19 could result in an unforeseen additional disruption to our business, including our global supply chain and retailer network, and/or require us to incur additional operational costs.

For more information about the anticipated COVID-19 impact, see “Outlook” [removed: below.][added: below.]

We continue to [added: invest behind our brands, including through advertising, and to] develop initiatives to build strong relationships with consumers, dental, veterinary and skin health professionals and traditional and eCommerce retailers.

We are also [removed: working] [added: seeking] to [removed: integrate] [added: maximize the impact of] our [added: ESG programs and leading in the development of human capital, including our] sustainability and social impact and [removed: diversity, equity and inclusion strategies] [added: DE&I strategies, which we are working to integrate] across our organization.

We are also changing the way we work to drive growth and how we approach innovation [added: with focus, empowerment, experimentation and digitization] to respond to the dynamic retail landscape and the evolving preferences of our customers and consumers.

[removed: These] [added: The] investments [added: needed to drive growth] are [removed: developed] [added: supported] through continuous, Company-wide initiatives to lower costs and increase effective asset utilization.

See Note [removed: 3, Acquisitions] [added: 5, Goodwill and Other Intangible Assets] to the Consolidated Financial Statements for [removed: additional] [added: further] information.

[removed: Our restructuring program, known as the “Global] [added: The Global] Growth and Efficiency [removed: Program,”] [added: Program, a multi-year restructuring program,] concluded on December 31, 2019.

For more information regarding the Global Growth and Efficiency Program, see [removed: “Restructuring and Related Implementation Charges” below and] Note 4, Restructuring and Related Implementation Charges to the Consolidated Financial Statements.

As a result of [removed: the] [added: this] favorable judgment, during the fourth quarter of 2019, we filed an application with the Brazilian government to recover value-added tax previously paid and recorded a [removed: benefit of $30 pretax ($20 aftertax).][added: benefit.]

[removed: However, we] [added: We] expect increased volatility across all of our [removed: categories] [added: categories,] and it is therefore difficult to predict category growth rates [removed: over] [added: in] the [removed: next six to twelve months.][added: near term.]

We have been negatively affected by changes in the policies [removed: or] [added: and] practices of our [removed: retail] trade customers in key markets, such as inventory de-stocking, [added: fulfillment requirements,] limitations on access to shelf space, delisting of our products [removed: or] [added: and certain environmental,] sustainability, supply chain [removed: or] [added: and] packaging [added: standards or] initiatives.

In addition, the retail landscape in many of our markets continues to evolve as a result of the rapid growth of [removed: eCommerce retailers,] [added: eCommerce,] changing consumer preferences (as consumers increasingly shop [removed: online)] [added: online] and [added: via mobile and social applications) and] the increased presence of alternative retail channels, such as subscription services and direct-to-consumer businesses.

These trends have been magnified due to COVID-19 in many of our geographies and we plan to continue to invest behind our [removed: eCommerce capabilities.][added: digital and analytics capabilities and higher growth businesses, such as eCommerce.]

[removed: In certain markets, we have] [added: We also] incurred [removed: and are likely to continue to incur] increased logistics costs due to [removed: higher eCommerce demand and] volume and capacity constraints in the shipping and logistics [removed: industry.][added: industry and higher eCommerce demand.]

In addition, given that approximately 70% of our Net sales originate in markets outside the U.S., we have experienced and will likely continue to experience [removed: increasingly] volatile foreign currency [removed: fluctuations and higher raw and packaging material costs.][added: fluctuations.]

While we have taken, and will continue to take, measures to mitigate the effect of these conditions, [added: such as the 2022 Global Productivity Initiative and our funding the growth and revenue growth management initiatives, including additional pricing,] in the current environment, it may become increasingly difficult to implement certain of these mitigation strategies.

Our strategy is based on driving organic sales growth [added: and long-term profitable growth] through innovation within our core businesses, leveraging faster growth in adjacent [removed: categories and] [added: categories,] expanding in [removed: high growth] [added: high-growth] channels and [removed: markets;] [added: markets and] delivering margin expansion through operating leverage and [removed: efficiency; and maximizing the impact of our environmental, social and governance programs; and leading in the development of human capital, including our sustainability and social impact and diversity, equity and inclusion strategies.][added: efficiency.]

Our commitment to these priorities, the strength of our brands, the breadth of our global footprint and a commitment to driving efficiency in cash generation should position us well to manage through [added: the challenges presented by] COVID-19 and increase shareholder value over time.

This section of this Annual Report on Form 10-K generally discusses [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] items and year-to-year comparisons between [removed: 2020] [added: 2021] and [removed: 2019.][added: 2020.]

Discussions of [removed: 2018] [added: 2019] items and year-to-year comparisons between [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, [removed: 2019.][added: 2020.]

[removed: Worldwide] Net sales [removed: were $16,471] in [removed: 2020, up 5.0% from 2019,] [added: Latin America increased 7.0% in 2021 to $3,663,] as volume growth of [removed: 5.5%] [added: 1.0%] and net selling price increases of [removed: 3.0%] [added: 7.0%] were partially offset by negative foreign exchange of [removed: 3.5%.][added: 1.0%.]

Organic sales (Net sales excluding, as applicable, the impact of foreign exchange, acquisitions and divestments), a non-GAAP financial measure as discussed below, increased [removed: 7.0%] [added: 4.5%] in [removed: 2020.][added: 2021.]

Net sales in the Oral, Personal and Home Care product segment were [removed: $13,588] [added: $14,110] in [removed: 2020,] [added: 2021,] up [removed: 3.0%] [added: 4.0%] from [removed: 2019, as volume growth of 4.5% and] [added: 2020, due to] net selling price increases of [removed: 3.5% were partially offset by negative] [added: 2.5% and positive] foreign exchange of [removed: 5.0%.][added: 1.5%, while volume was flat.]

Organic sales in the Oral, Personal and Home Care product segment increased [removed: 6.0%] [added: 2.5%] in [removed: 2020.][added: 2021.]

The increase in organic sales in [removed: 2020] [added: Latin America in 2021] versus [removed: 2019] [added: 2020] was due to increases in Oral Care, Personal Care and Home Care organic sales.

We also sell certain of our products direct-to-consumer.

The situation continues to be uncertain and varies by geography, as the impact of COVID-19 remains significant in many countries throughout the world, including Brazil, China, India, Mexico, Thailand, the U.S. and Vietnam, where we have substantial manufacturing facilities.

While we have reopened most of our offices, in some instances on a limited and voluntary basis, many of our office-based employees globally continue to work from home.

We have implemented additional health and safety measures consistent with government recommendations and/or requirements to help ensure employee safety in our offices, production facilities, warehouses and technology centers, often at additional cost.

These measures may include: health and temperature screening, social distancing and personal protective equipment protocols, hand washing, contact tracing, enhanced cleaning procedures, respiratory hygiene, education and, in some instances, testing and/or vaccination requirements.

While consumer demand for most of these categories declined year-over-year in 2021, most still remained above historical levels, and we believe that some of this increase in consumption is sustainable in light of changes in consumer behavior related to COVID-19.

At the same time, during the COVID-19 pandemic, we have experienced disruptions in certain channels, including travel retail.

To achieve our business and financial objectives, we are focused on driving organic sales growth and long-term profitable growth through innovation on our core businesses; leveraging faster growth in adjacent categories; expanding in high-growth channels and markets and delivering margin expansion through operating leverage and efficiency.

We are strengthening our capabilities in areas such as innovation, digital, eCommerce and data and analytics enabling us to be more responsive in today’s rapidly changing world.

In particular, we believe our digital transformation is of paramount importance to our success going forward.

On January 27, 2022, the Board approved a targeted productivity program (the “2022 Global Productivity Initiative”).

The program is intended to reallocate resources towards our strategic priorities and faster growth businesses, drive efficiencies in our operations and streamline our supply chain to reduce structural costs.

Implementation of the 2022 Global Productivity Initiative, which is expected to be substantially completed by December 31, 2022, is projected to result in cumulative pre-tax charges, once all phases are approved and implemented, totaling between $200 and $240, which are currently estimated to be comprised of the following: employee-related costs, including severance, pension and other termination benefits (80%); asset-related costs, primarily accelerated depreciation and asset write-downs (10%); and other charges (10%), which include contract termination costs, consisting primarily of implementation-related charges resulting directly from exit activities and the implementation of new strategies.

It is estimated that approximately 90% of the charges will result in cash expenditures.

For more information regarding the 2022 Global Productivity Initiative, see “Restructuring and Related Implementation Charges” below.

In the fourth quarter of 2021, we recorded a non-cash charge of $571 pretax ($518 aftertax) to adjust the carrying values of goodwill and indefinite-lived intangible related to the Filorga skin health business.

The impairment was due primarily to the impact of the COVID-19 pandemic on the Filorga business as a result of government restrictions and reduced consumer mobility, which negatively impacted consumption in the duty-free, travel retail and pharmacy channels.

In 1990, our Canadian subsidiary (“CP Canada”), issued C$145 of Canadian dollar-denominated unsecured unsubordinated 12.85% guaranteed notes due October 4, 2030 (the “Canada notes”).

In the third quarter of 2021, CP Canada redeemed the Canada notes and recorded a loss on the early extinguishment of debt of $75 pretax ($55 aftertax), which is included in Interest (income) expense, net in the Consolidated Statements of Income, representing the difference between the redemption price and the carrying amount of the debt extinguished.

In May 2021, the Brazilian Supreme Court issued a clarifying ruling allowing a higher deduction of state value-added tax when determining the taxable base.

In light of this ruling, we recorded an additional benefit of $26 pretax ($20 aftertax) in the year ended December 31, 2021.

During the year ended December 31, 2021, all of our divisions experienced significantly higher raw and packaging material costs.

We expect this difficult cost environment to continue in 2022.

As discussed above, we have also experienced higher raw and packaging material and logistics costs.

During 2020 as a result of the COVID-19 pandemic, we saw a significant increase in demand across many of our categories, such as liquid hand soap, dish liquid, bar soap and cleaners.

While consumer demand for most of these categories declined year-over-year in 2021, most remained above historical levels.

COVID-19 has also disrupted our retail customers, contract manufacturers, logistics providers and other third parties; their ability to address COVID-19 and maintain their operations at full capacity has impacted and may continue to impact sales of and consumer access to our products.

We are also seeking to maximize the impact of our environmental, social and governance programs and leading in the development of human capital, including our sustainability and social impact and DE&I strategies.

Worldwide Net sales were $17,421 in 2021, up 6.0% from 2020, due to volume growth of 1.0%, net selling price increases of 3.5%, and positive foreign exchange of 1.5%.

| | | | | | | 2021 | | | | | | 2020 | | |

| | | | | | | 2021 | | | | | | 2020 | | |

| | | | | | | 2021 | | | | | | 2020 | | |

| | | | | | | 2021 | | | | | | 2020 | | |

Goodwill & Indefinite-Lived Intangible Impairment Charges

The Company made revisions to the internal forecasts relating to its Filorga reporting unit during the fourth quarter of 2021 due primarily to the impact of the COVID-19 pandemic on the Filorga skin health business 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 triggered the need for an interim impairment review of its indefinite-lived trademark and goodwill and, accordingly, performed an interim impairment test for the trademark as of December 31, 2021.

The Company concluded that the carrying value of the trademark exceeded its estimated fair value, and recorded an impairment charge of $204, reducing the carrying value to approximately $588.

After adjusting the carrying value of the trademark, the Company completed a quantitative impairment test for goodwill and recorded a goodwill impairment charge of $367 in the Filorga reporting unit, reducing the carrying value of goodwill to approximately $577.

The Company continues to believe in the strength of the Filorga brand and is confident about its growth opportunities.

Operating profit decreased 14% to $3,332 in 2021 from $3,885 in 2020.

(Dollars in Millions Except Per Share Amounts)

The situation continues to be uncertain and varies by geography, as infection rates of COVID-19 continue to increase in many regions throughout the world, and authorities have taken different approaches to address the pandemic and resume economic activity.

Many of our employees globally continue to work from home.

In those instances where our employees cannot perform their work at home, such as in our factories and in certain of our laboratories, or in geographies where circumstances have allowed us to offer employees the ability to return to the office, often on a voluntary and staggered basis, we have implemented additional health and safety measures and social distancing protocols, consistent with government recommendations and/or requirements, to help to ensure their safety, often at an additional cost.

In other categories, such as oral care and pet food, consumer demand trends continued to normalize in the second half of the year ended December 31, 2020.

At the same time, during the year ended December 31, 2020, we experienced declines in certain channels, including professional sales and travel retail, due to the economic slowdown and restricted consumer movement in many geographies throughout the world.

In some instances during the year ended December 31, 2020, we were not able to keep up with the increased consumer demand for our products, and our products were at times out of stock on retailers’ shelves.

In some cases, we have incurred additional costs as we worked to meet this increased demand.

Despite continuing to significantly ramp up production of in-demand products, we expect that some of our products may continue to be out of stock on retailers’ shelves for a period of time.

To achieve our business and financial objectives, we are focused on innovating our core businesses; improving our brand building activities with an elevated brand purpose model and the use of equity advertising; innovating to gain market share in high growth segments and adjacencies; expanding into new channels and markets; maximizing growth online; and investing to drive consumption in growing populations.

In addition, we continue to invest behind our brands, not just in terms of advertising, but also to build key growth capabilities in areas such as innovation and data and analytics.

The investments needed to drive growth are supported by strong cash flow performance and our disciplined capital allocation strategy.

Initiatives under the Global Growth and Efficiency Program fit within the program’s three focus areas of expanding commercial hubs, extending shared business services and streamlining global functions and optimizing the global supply chain and facilities.

No new restructuring projects were approved for implementation during the year ended December 31, 2020.

During the year ended December 31, 2019, we incurred costs of $132 ($102 aftertax) resulting from the Global Growth and Efficiency Program.

In December 2019, the Swiss government enacted changes to its corporate tax regime, which included, among other items, the repeal of certain preferential tax regimes and an increase to the cantonal tax rate for future periods.

Additionally, the government provided transition rules which allowed companies to record goodwill for tax purposes, partially offsetting the impact on cash taxes of the higher cantonal rate over the next ten years.

As a result of these changes, we recorded a net benefit of $29 to the Provision for income taxes.

In September 2019, we acquired Laboratoires Filorga Cosmétiques S.A. (“Filorga”), a skin health business, for cash consideration of €1,548 (approximately $1,712).

In the third quarter of 2020, we completed the purchase of the outstanding non-controlling interest of Filorga’s joint venture based in Hong Kong and covering the Hong Kong and China markets for approximately €85 (approximately $99) in cash.

The recovery will be utilized to offset corporate income tax payments in Brazil in future periods.

During the COVID-19 pandemic, we have seen improvement in category growth rates due to heightened demand for certain health and hygiene products, particularly liquid hand soap, dish liquid, bar soap and cleaners.

We believe some of this increased consumption is sustainable due to consumer behavior changes resulting from COVID-19.

In the longer term, we expect category growth rates to remain below historical levels.

We have seen increases in promotional activities in certain markets as retailers try aggressively to get consumers back into the stores after prolonged “stay at home” and other government restrictions ease, a trend we expect will continue.

Acquisitions contributed 1.5% to volume.

Acquisitions contributed 2.0% to volume.

Gross profit in 2019 included charges resulting from the Global Growth and Efficiency Program.

| | | | | | | | | | | | | | | |

| | | | | | | 2020 | | | | | | 2019 | | |

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Gross profit margin, non-GAAP | | | | | | 60.8 | | % | | | | 59.5 | | % | | | | 130 | | |

Selling, general and administrative expenses in 2019 included charges resulting from the Global Growth and Efficiency Program.

Other (income) expense, net in both periods included acquisition-related costs.

| Charges for a change in go-to-market strategy in certain countries | | | | | | — | | | | | | 15 | | |

Operating profit increased 9% to $3,885 in 2020 from $3,554 in 2019.

In 2019, Operating profit included charges resulting from the Global Growth and Efficiency Program, acquisition-related costs and a benefit related to a value-added tax matter in Brazil.

Excluding the items described above in both periods, as applicable, Operating profit margin was 23.5% in 2020, an increase of 10 bps from 23.4% in 2019.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

We do this by developing and selling products globally that make people’s [added: and their pets’] lives healthier and more enjoyable and by embracing our sustainability and social impact and diversity, equity and inclusion [added: (“DE&I”)] strategies across our organization.

Sales of Oral, Personal and Home Care products accounted for 44%, [removed: 21%] [added: 20%] and [removed: 18%,] [added: 17%,] respectively, of our total worldwide Net sales in [removed: 2020.][added: 2021.]

Geographically, Oral Care is a significant part of our business in Asia Pacific, comprising approximately 81% of Net sales in that region for [removed: 2020.][added: 2021.]

Sales of Pet Nutrition products accounted for [removed: 17%] [added: 19%] of our total worldwide Net sales in [removed: 2020.][added: 2021.]

Our sales to [removed: Wal-Mart,] [added: Walmart,] Inc. and its affiliates represent approximately 12% of our Net sales in [removed: 2020.][added: 2021.]

The majority of raw and packaging materials used in our products [removed: is] [added: are] purchased from other companies and is available from several sources.

For certain materials, however, new suppliers may have to be qualified under industry, governmental and/or Colgate standards, which can require additional investment and take [removed: some] [added: a significant] period of time.

Raw and packaging material commodities, such as essential oils, resins, [removed: pulp,] tropical oils, [added: pulp,] tallow, corn, poultry and soybeans, are subject to market price variations.

Our products are sold in a highly competitive global marketplace which has experienced increased retail trade concentration, the rapid growth of eCommerce, the integration of traditional and digital operations at key retailers and the growing presence of large-format [removed: retailers] [added: retailers, discounters] and [removed: discounters.][added: eCommerce retailers.]

The retail landscape in many of our markets continues to evolve as a result of the rapid growth of eCommerce retailers, changing consumer preferences (as consumers increasingly shop [removed: online)] [added: online] and [added: via mobile and social applications) and] the increased presence of alternative retail channels, such as subscription services and [removed: direct-to-customer] [added: direct-to-consumer] businesses.

[removed: COVID-19 has accelerated these trends, either on a temporary or permanent basis, and we have witnessed consumers changing their] [added: We also continue to see changes in the] purchasing [removed: patterns,] [added: patterns of our consumers,] including the nature and/or frequency of visits by consumers to retailers and dental, veterinary and skin health professionals as well as a shift, in many markets, to purchasing our products online.

During [removed: 2020,] [added: the COVID-19 pandemic,] many of the communities in which we manufacture, market and sell our products experienced [removed: unprecedented] [added: and in some cases continue to experience] “stay at home” orders, travel or movement restrictions and other government actions to reduce the spread and address the impact of COVID-19, and have implemented varying policies to [added: address the pandemic,] resume economic [removed: activity.][added: activity and vaccinate their populations.]

Because the vast majority of our products (such as oral care products, soaps and other personal hygiene products, home cleaners and pet food) have been deemed essential for the health and well-being of people and their pets, we have, in most instances, been able to continue operating our [removed: business.][added: business, although not always at full capacity.]

In doing so, the health, safety and well-being of our employees [added: and their families] has been and remains our first priority.

In addition, some of our suppliers, customers, [removed: distributors] [added: distributors, logistics providers] and service providers have experienced disruptions to their businesses.

We saw a significant increase in demand across many of our [removed: categories in 2020,] [added: categories, such as liquid hand soap, dish liquid, bar soap and cleaners, during 2020 as a result of the COVID-19 pandemic,] driven by consumer pantry-loading and increased consumption of our [removed: products in response to COVID-19.][added: products.]

[removed: This was particularly true] [added: While consumer demand for most of these categories declined year-over-year] in [removed: certain categories, such as liquid hand soap, dish liquid, bar soap and cleaners,] [added: 2021, most remained above historical levels,] and we believe that some of [removed: the] [added: this] increase in consumption [removed: in these categories] is sustainable in light of changes in consumer behavior related to COVID-19.

[added: The] COVID-19 [added: pandemic] and government steps to reduce the spread and address the impact of COVID-19 have impacted and may continue to impact our consumers’ ability to purchase and our ability to manufacture and distribute our products.

We expect the ongoing economic [removed: impact and] [added: impact,] health concerns associated with COVID-19 [added: and supply chain disruptions] to continue to impact consumer behavior, shopping patterns and consumption preferences [removed: despite the lifting of government restrictions and the reopening of economies around the world.][added: during 2022.]

In [removed: 2020,] [added: 2021,] compliance with these regulations did not have, and we do not expect such compliance in the future to have, a material adverse effect on our capital expenditures, earnings or competitive position.

As of December 31, [removed: 2020,] [added: 2021,] we had approximately [removed: 34,200] [added: 33,800] employees based in over 100 countries.

Approximately 70% of our revenues are generated from markets outside the U.S. and 86% of our employees are located outside the U.S. Approximately 36% of our employees are based in Asia Pacific, 30% are based in Latin America, 15% are based in [removed: North America,] [added: Europe,] 14% are based in [removed: Europe] [added: North America] and 5% are based in Africa/Eurasia.

These values are reflected not only in the quality of our products and reputation, but also in our dedication to serving the communities where we live and work, as reflected in our sustainability and social impact and [removed: diversity, equity and inclusion] [added: DE&I] strategies.

Underlying these values and our strong culture is [removed: a] [added: the] commitment of all Colgate people to maintain the highest ethical standards and demonstrate ethical leadership, including compliance with Colgate policies and our Code of Ethics.

CARING: We care about people — Colgate people, consumers, customers, [removed: stockholders and] [added: stockholders,] business [removed: partners.][added: partners and people in the communities where we live and work.]

As a reflection of Colgate’s caring value, during the COVID-19 pandemic, protecting the health, safety and well-being of Colgate people [added: and their families] has been and remains our first priority.

Combined with the fact that the vast majority of our products have been deemed [removed: “essential”] [added: essential] for the health and well-being of people and their pets, these efforts have, in most instances, enabled us to continue to operate during the pandemic providing consumers with the health and hygiene products they need and want.

GLOBAL TEAMWORK: All Colgate people are part of a global team, committed to working [added: and collaborating] together across [removed: countries] [added: functions] and [removed: throughout the world.][added: countries.]

We continue to [added: drive a continuous learning culture and] transform our learning strategy to better meet the evolving expectations of [removed: the modern workforce and create a continuous learning culture.][added: our people.]

Specifically, we are [removed: focused on] implementing new ways of working and instilling a growth mindset to drive [removed: experimentation, digitization and] innovation with [removed: agility] [added: focus, empowerment, experimentation] and [removed: resilience.][added: digitization.]

We believe our people are crucial to our ongoing business [removed: success.][added: success and aim to recruit, develop and retain strong and diverse talent.]

We celebrate differences, promote an [added: equitable and] inclusive environment and value the contributions of all Colgate people.

As of December 31, [removed: 2020,] [added: 2021,] our global workforce was [added: approximately] 60% male and 40% [removed: female, and women represented 41% of Colgate’s executives.][added: female.]

In the U.S., on an employee self-reported basis, the racial/ethnic composition of our workforce was approximately 67% White, [removed: 11% Hispanic,] 9% [added: Asian, 9%] Black, [removed: 8% Asian] [added: 9% Hispanic, 4% unidentified] and [removed: 5% other.][added: 2% Other.]

We are committed to providing all of our employees with an [added: equitable and] inclusive work environment, learning opportunities and promotion and growth opportunities.

A vital piece of our [removed: diversity, equity and inclusion] [added: DE&I] strategy has been ensuring that our [removed: talent management] [added: succession planning] process incorporates the advancement of women and people of all cultures, including underrepresented communities.

Our global [removed: diversity, equity and inclusion] [added: DE&I] strategy aims to further advance our commitment to become an even more diverse, equitable and inclusive organization.

Consistent with this strategy, we are working to implement policies, learning experiences and processes that promote awareness, empathy, advocacy and opportunity; become an ally for positive change for the underserved in communities in which we live and work; support minority and women-owned suppliers to enable success of diversity-owned businesses; and promote dialogue around [removed: diversity, equity and inclusion] [added: DE&I] to increase awareness and advance the culture change to achieve our vision.

Given the importance of Colgate people to our business success, [removed: attracting,] motivating and retaining [removed: high-quality] [added: critical] talent is a key focus.

For information regarding our compensation philosophy and executive compensation programs, please see our Proxy Statement to be filed with the United States Securities and Exchange Commission (the “SEC”) in connection with the [removed: 2021] [added: 2022] Annual Meeting of Stockholders.

Certain of our products are also sold direct-to-consumer.

We do, however, purchase certain key raw and packaging materials from single-source suppliers or a limited number of suppliers.

These trends have accelerated during the COVID-19 pandemic.

At the same time, during the COVID-19 pandemic, we have experienced disruptions in certain channels, including travel retail.

Across our business, changes in consumer demand for our products vary by product category and geography depending on, among other things, the severity of the COVID-19 outbreak, the availability of our products at retailers and supply chain disruptions.

While we believe that, in the long-term, consumer demand for the products in our categories will continue to be strong, uncertainties continue surrounding the timing and duration of the pandemic and the recovery from it.

COVID-19 has also disrupted our retail customers, contract manufacturers, logistics providers and other third parties; their ability to address COVID-19 and maintain their operations at full capacity has impacted and may continue to impact sales of and consumer access to our products.

In particular, COVID-19 has disrupted, and may continue to disrupt, the travel retail channel.

*Trade Compliance*: We are subject to laws and sanctions imposed by the U.S., including, without limitation, those imposed by the U.S. Treasury Department’s Office of Foreign Asset Control (“OFAC”), and/or by other jurisdictions that may prohibit us or certain of our affiliates from doing business in certain countries or restrict the kind of business that may be conducted.

While we have reopened most of our offices, in some instances on a limited and voluntary basis, many of our office-based employees globally continue to work from home.

We have implemented additional health and safety measures consistent with government recommendations and/or requirements to help ensure employee safety in our offices, production facilities, warehouses and technology centers.

These measures may include: health and temperature screening, social distancing and personal protective equipment protocols, hand washing, contact tracing, enhanced cleaning procedures, respiratory hygiene, education and, in some instances, testing and/or vaccination requirements.

We also leveraged our available technologies to maximize our connectivity and productivity and drew upon new capabilities gained through our focus on digital transformation to help to keep our people connected during the COVID-19 pandemic.

We have also offered Colgate people and their families enhanced mental health and wellness benefit offerings, including counseling, paid leave to care for family members and flexible schedules to adapt to changing circumstances, and have provided ongoing health and safety education, including bringing in experts on infectious diseases and COVID-19 vaccines.

We provide our employees with learning experiences focused on building leadership skills and offer training programs that are closely aligned with our business strategy.

For example, in 2021, we implemented required training for all salaried and clerical employees to support our focus on digital with courses that demonstrate the importance of digital and what it means to have a digital culture.

We are also committed to listening to our employees and seeing how the company is evolving and growing through regular employee engagement surveys.

At Colgate, we are proud of our collaborative spirit – what we call The Power of WE.

Women represented approximately 53% of our salaried and clerical employees, 40% of Colgate’s executives and 33% of senior leadership.

The racial/ethnic composition of our executives was approximately 60% White, 17% Hispanic, 14% Asian, 7% Black, 1% unidentified and 1% Other and the composition of senior leadership was approximately 63% White, 18% Hispanic, 10% Black and 9% Asian.

“Other” refers to American Indian/Alaska Native, two or more races or Native Hawaiian/other Pacific Islander.

In this section, “executives” refers to those employees who are eligible to participate in Colgate’s equity incentive compensation plans and “senior leadership” refers to employees who are Vice Presidents and above.

In 2021, we released our first DE&I Report, which is available on the Colgate website.

In addition, we instituted mandatory allyship and unconscious bias training for all salaried and clerical employees at Colgate to help our employees better understand DE&I concepts and embed allyship as a daily practice.

Our Board, through its Personnel and Organization Committee, receives regular updates from management on our DE&I efforts.

Sustainability

We view sustainability as being critically important to our overall business and growth strategy.

In November 2020, we announced our 2025 Sustainability & Social Impact Strategy, focusing on three key ambitions — preserving our environment by accelerating action on climate change and reducing our environmental footprint; helping millions of homes by empowering people to develop healthier habits; and driving social impact with a commitment to helping to ensure the well-being of all people and their pets.

These ambitions are supported by actionable targets consistent with our continued commitment to building environmental and social consciousness into our decision-making.

In 2021, we made progress on the targets set forth in our 2025 Sustainability & Social Impact Strategy.

*Reduce Plastic Waste:* As a positive step toward achieving our targets to reduce the use of new plastic by a third and make our packaging 100% recyclable, reusable or compostable by 2025, we are working to implement our first-of-its-kind recyclable toothpaste tube across our toothpaste portfolio.

We also launched Colgate Keep, our first-of-its-kind manual toothbrush with a replaceable head and a reusable aluminum handle for 80% less plastic waste compared to similarly sized Colgate toothbrushes.

*Accelerate Action on Climate Change and Conserve Water:* To support our goal to become net zero carbon in our operations by 2040, we have built renewable energy roadmaps at each of our operational sites across the world and have engaged all of our Tier 1 Suppliers in support of our goal to reduce their greenhouse gas emissions by 30% (versus 2018).

With our Save Water campaign, we estimate that our consumers have contributed to an avoidance of approximately 206 billion gallons of water and 10.8 million metric tons of CO2 emissions, since its launch in 2016.

*Ingredient Transparency:* We continue to promote ingredient transparency and seek to follow the highest safety and efficacy standards as we formulate our products.

We have rolled out a new “Fragrance & Flavors Share for Good” ingredient transparency program, which provides additional ingredient information.

*Social Impact:* Colgate Bright Smiles, Bright Futures is our flagship oral health education and well-being initiative.

Since the program was established in 1991, we have reached over 1.4 billion children and their families in more than 80 countries.

During the fourth quarter of 2021, to help support and further our 2025 Sustainability & Social Impact Strategy, the Company issued €500 of eight-year notes at a fixed coupon rate of 0.300% (the “Sustainability Bond”).

An amount equal to the net proceeds of the Sustainability Bond will be used to finance or refinance, in part or in full, new and existing projects and programs with distinct environmental or social benefits pursuant to our Sustainable Financing Framework.

As a result, we have seen and expect to continue to see heightened competitive activity from our competitors in certain categories, including more aggressive product claims and marketing challenges and the marketing of new products in high demand categories.

At the same time, in 2020, we continued to experience declines in certain channels, including professional sales and travel retail, due to the economic slowdown and restricted consumer movement in many geographies throughout the world.

We also continue to see changes in the purchasing patterns of our consumers, including the nature and/or frequency of visits by consumers to retailers and dental, veterinary and skin health professionals and a shift in many markets to purchasing our products online.

Many of our employees globally have worked from home during the pandemic.

We implemented additional health and safety measures and social distancing protocols to help ensure employee safety when work from home is not possible.

We also offered Colgate people and their families enhanced mental health and wellness benefit offerings.

All of our employees worldwide are provided with a series of training programs focused on building leadership skills.

Our focus is to develop the strategic organizational capabilities that will drive current and future growth for Colgate by offering learning experiences that are closely aligned to our business strategy.

| Panagiotis Tsourapas | | | | | | 56 | | | | | | 2019 | | | | | | Group President, Latin America, Asia Pacific & Africa-Eurasia | | |

For information regarding legal proceedings, refer to Note 13, Commitments and Contingencies to the Consolidated Financial Statements included in Part IV, Item 15 of this report.

As a global company serving consumers in more than 200 countries and territories, the Company is routinely subject to a wide variety of legal proceedings.

These include disputes relating to intellectual property, contracts, product liability, marketing, advertising, foreign exchange controls, antitrust and trade regulation, as well as labor and employment, pension, data privacy and security, environmental and tax matters, and consumer class actions.

Management proactively reviews and monitors the Company’s exposure to, and the impact of, environmental matters.

The Company is party to various environmental matters and, as such, may be responsible for all or a portion of the cleanup, restoration and post-closure monitoring of several sites.

The Company establishes accruals for loss contingencies when it has determined that a loss is probable and that the amount of loss, or range of loss, can be reasonably estimated.

Any such accruals are adjusted thereafter as appropriate to reflect changes in circumstances.

The Company also determines estimates of reasonably possible losses or ranges of reasonably possible losses in excess of related accrued liabilities, if any, when it has determined that a loss is reasonably possible and it is able to determine such estimates.

For those matters disclosed below for which the amount of any potential losses can be reasonably estimated, the Company currently estimates that the aggregate range of reasonably possible losses in excess of any accrued liabilities is $0 to approximately $425 million (based on current exchange rates).

The estimates included in this amount are based on the Company’s analysis of currently available information and, as new information is obtained, these estimates may change.

Due to the inherent subjectivity of the assessments and the unpredictability of outcomes of legal proceedings, any amounts accrued or included in this aggregate amount may not represent the ultimate loss to the Company.

Thus, the Company’s exposure and ultimate losses may be higher or lower, and possibly significantly so, than the amounts accrued or the range disclosed above.

Based on current knowledge, management does not believe that the ultimate resolution of loss contingencies arising from the matters discussed herein will have a material effect on the Company’s consolidated financial position or its ongoing results of operations or cash flows.

However, in light of the inherent uncertainties noted above, an adverse outcome in one or more matters could be material to the Company’s results of operations or cash flows for any particular quarter or year.

Brazilian Matters

There are certain tax and civil proceedings outstanding, as described below, related to the Company’s 1995 acquisition of the Kolynos oral care business from Wyeth (the “Seller”).

The Brazilian internal revenue authority has disallowed interest deductions and foreign exchange losses taken by the Company’s Brazilian subsidiary for certain years in connection with the financing of the Kolynos acquisition.

The tax assessments with interest, penalties and any court-mandated fees, at the current exchange rate, are approximately $113 million.

This amount includes additional assessments received from the Brazilian internal revenue authority in April 2016 relating to net operating loss carryforwards used by the Company’s Brazilian subsidiary to offset taxable income that had also been deducted from the authority’s original assessments.

The Company has been disputing the disallowances by appealing the assessments since October 2001.

In each of September 2015, February 2017, June 2018, April 2019 and September 2020, the Company lost an administrative appeal and subsequently filed an appeal in Brazilian federal court.

Currently, there are five appeals pending in the Brazilian federal court.

Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the disallowances are without merit and that the Company should ultimately prevail.

The Company is challenging these disallowances vigorously.

In July 2002, the Brazilian Federal Public Attorney filed a civil action against the federal government of Brazil, Laboratorios Wyeth-Whitehall Ltda.

(the Brazilian subsidiary of the Seller) and the Company, as represented by its Brazilian subsidiary, in the 6th.

Lower Federal Court in the City of São Paulo, seeking to annul an April 2000 decision by the Brazilian Board of Tax Appeals that found in favor of the Seller’s Brazilian subsidiary on the issue of whether it had incurred taxable capital gains as a result of the divestiture of Kolynos.

The action seeks to make the Company’s Brazilian subsidiary jointly and severally liable for any tax due from the Seller’s Brazilian subsidiary.

The case has been pending since 2002, and the Lower Federal Court has not issued a decision.

Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the Company should ultimately prevail in this action.

The Company is challenging this action vigorously.

In December 2005, the Brazilian internal revenue authority issued to the Company’s Brazilian subsidiary a tax assessment with interest, penalties and any court-mandated fees of approximately $50 million, at the current exchange rate, based on a claim that certain purchases of U.S. Treasury bills by the subsidiary and their subsequent disposition during the period 2000 to 2001 were subject to a tax on foreign exchange transactions.

The Company had been disputing the assessment within the internal revenue authority’s administrative appeals process.

However, in November 2015, the Superior Chamber of Administrative Tax Appeals denied the Company’s final administrative appeal and the Company has filed a lawsuit in the Brazilian federal court.

In the event the Company is unsuccessful in this lawsuit, further appeals are available within the Brazilian federal courts.

Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that the tax assessment is without merit and that the Company should ultimately prevail.

The Company is challenging this assessment vigorously.

Competition Matter

Certain of the Company’s subsidiaries were historically subject to actions and, in some cases, fines, by governmental authorities in a number of countries related to alleged competition law violations.

Substantially all of these matters also involved other consumer goods companies and/or retail customers.

The Company’s policy is to comply with antitrust and competition laws and, if a violation of any such laws is found, to take appropriate remedial action and to cooperate fully with any related governmental inquiry.

For the fiscal year ended December 31, [removed: 2020][added: 2021]

[removed: ][added: ]

| [removed: 0.000%] [added: 0.300%] Notes due [removed: 2021] [added: 2029] | | | [removed: CL21A] [added: CL29] | | | New York Stock Exchange | | |

The aggregate market value of Colgate-Palmolive Company Common Stock held by non-affiliates as of June 30, [removed: 2020] [added: 2021] (the last business day of its most recently completed second quarter) was approximately [removed: $62.8] [added: $68.6] billion.

There were [removed: 848,562,678] [added: 840,487,222] shares of Colgate-Palmolive Company Common Stock outstanding as of January 31, [removed: 2021.][added: 2022.]

| Portions of Proxy Statement for the [removed: 2021] [added: 2022] Annual Meeting of Stockholders | | | Part III, Items 10 through 14 | | |

| Item 1. | | | Business | | | [removed: [1](#i41f6955ad64c44db9653c749840c1125_13)] [added: [1](#i56469e1ca2634ba2a61c1417cba99b40_13)] | | |

| Item 1A. | | | Risk Factors | | | [removed: [7](#i41f6955ad64c44db9653c749840c1125_16)] [added: [8](#i56469e1ca2634ba2a61c1417cba99b40_16)] | | |

| Item 1B. | | | Unresolved Staff Comments | | | [removed: [19](#i41f6955ad64c44db9653c749840c1125_19)] [added: [20](#i56469e1ca2634ba2a61c1417cba99b40_19)] | | |

| Item 2. | | | Properties | | | [removed: [20](#i41f6955ad64c44db9653c749840c1125_22)] [added: [21](#i56469e1ca2634ba2a61c1417cba99b40_22)] | | |

| Item 3. | | | Legal Proceedings | | | [removed: [21](#i41f6955ad64c44db9653c749840c1125_25)] [added: [22](#i56469e1ca2634ba2a61c1417cba99b40_25)] | | |

| Item 4. | | | Mine Safety Disclosures | | | [removed: [23](#i41f6955ad64c44db9653c749840c1125_28)] [added: [22](#i56469e1ca2634ba2a61c1417cba99b40_28)] | | |

| Item 5. | | | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | | | [removed: [24](#i41f6955ad64c44db9653c749840c1125_34)] [added: [23](#i56469e1ca2634ba2a61c1417cba99b40_34)] | | |

| Item 7. | | | Management’s Discussion and Analysis of Financial Condition and Results of Operations | | | [removed: [25](#i41f6955ad64c44db9653c749840c1125_40)] [added: [24](#i56469e1ca2634ba2a61c1417cba99b40_40)] | | |

| Item 7A. | | | Quantitative and Qualitative Disclosures About Market Risk | | | [removed: [58](#i41f6955ad64c44db9653c749840c1125_61)] [added: [56](#i56469e1ca2634ba2a61c1417cba99b40_64)] | | |

| Item 8. | | | Financial Statements and Supplementary Data | | | [removed: [59](#i41f6955ad64c44db9653c749840c1125_64)] [added: [57](#i56469e1ca2634ba2a61c1417cba99b40_67)] | | |

| Item 9. | | | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | | | [removed: [59](#i41f6955ad64c44db9653c749840c1125_67)] [added: [57](#i56469e1ca2634ba2a61c1417cba99b40_70)] | | |

| Item 9A. | | | Controls and Procedures | | | [removed: [59](#i41f6955ad64c44db9653c749840c1125_70)] [added: [57](#i56469e1ca2634ba2a61c1417cba99b40_73)] | | |

| Item 9B. | | | Other Information | | | [removed: [59](#i41f6955ad64c44db9653c749840c1125_73)] [added: [57](#i56469e1ca2634ba2a61c1417cba99b40_76)] | | |

| Item 10. | | | Directors, Executive Officers and Corporate Governance | | | [removed: [60](#i41f6955ad64c44db9653c749840c1125_79)] [added: [58](#i56469e1ca2634ba2a61c1417cba99b40_82)] | | |

| Item 11. | | | Executive Compensation | | | [removed: [60](#i41f6955ad64c44db9653c749840c1125_82)] [added: [58](#i56469e1ca2634ba2a61c1417cba99b40_85)] | | |

| Item 12. | | | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | | | [removed: [61](#i41f6955ad64c44db9653c749840c1125_85)] [added: [59](#i56469e1ca2634ba2a61c1417cba99b40_88)] | | |

| Item 13. | | | Certain Relationships and Related Transactions and Director Independence | | | [removed: [61](#i41f6955ad64c44db9653c749840c1125_88)] [added: [59](#i56469e1ca2634ba2a61c1417cba99b40_91)] | | |

| Item 14. | | | Principal Accountant Fees and Services | | | [removed: [61](#i41f6955ad64c44db9653c749840c1125_91)] [added: [59](#i56469e1ca2634ba2a61c1417cba99b40_94)] | | |

| Item 15. | | | Exhibits and Financial Statement Schedules | | | [removed: [62](#i41f6955ad64c44db9653c749840c1125_97)] [added: [60](#i56469e1ca2634ba2a61c1417cba99b40_100)] | | |

| Item 16. | | | Form 10-K Summary | | | [removed: [66](#i41f6955ad64c44db9653c749840c1125_103)] [added: [64](#i56469e1ca2634ba2a61c1417cba99b40_106)] | | |

| Item 6. | | | \[Reserved\] | | | [23](#i56469e1ca2634ba2a61c1417cba99b40_37) | | |

| Item 9C. | | | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | | | [57](#i56469e1ca2634ba2a61c1417cba99b40_2186) | | |

| Signatures | | | | | | [65](#i56469e1ca2634ba2a61c1417cba99b40_109) | | |

| Item 6. | | | Selected Financial Data | | | [24](#i41f6955ad64c44db9653c749840c1125_37) | | |

| Signatures | | | | | | [67](#i41f6955ad64c44db9653c749840c1125_106) | | |

We own or lease approximately [removed: 320] [added: 330] properties, which include manufacturing, distribution, research and office facilities worldwide.

In the U.S., we operate in approximately [removed: 70] [added: 80] properties, of which 13 are owned.

Major overseas manufacturing and warehousing facilities used by the Oral, Personal and Home Care product segment of our business are located in Australia, Brazil, China, Colombia, France, Greece, Guatemala, India, Italy, Mexico, Poland, South Africa, Thailand, [removed: Turkey] [added: Turkey, Venezuela] and [removed: Venezuela.][added: Vietnam.]

The following table shows the share repurchase activity for the three months in the quarter ended December 31, [removed: 2020:][added: 2021:]

(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 [removed: 59,157] [added: 13,159] 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 December 31, [removed: 2020.][added: 2021.]

As of December 31, 2021, the number of common shareholders of record was 18,388.

| October 1 through 31, 2021 | | | | | | 1,141,404 | | | | | | $ | 75.74 | | | | | 1,140,853 | | | | | | 806 | | |

| November 1 through 30, 2021 | | | | | | 1,054,644 | | | | | | $ | 77.44 | | | | | 1,050,501 | | | | | | 725 | | |

| December 1 through 31, 2021 | | | | | | 2,441,785 | | | | | | $ | 81.77 | | | | | 2,433,320 | | | | | | 526 | | |

| Total | | | | | | 4,637,833 | | | | | | $ | 79.30 | | | | | 4,624,674 | | | | | | | | |

For information regarding the number of common shareholders of record, refer to “Historical Financial Summary” included in Part IV, Item 15 of this report.

| October 1 through 31, 2020 | | | | | | 2,379,383 | | | | | | $ | 78.96 | | | | | 2,353,440 | | | | | | 2,527 | | |

| November 1 through 30, 2020 | | | | | | 6,518,404 | | | | | | $ | 84.53 | | | | | 6,494,000 | | | | | | 1,978 | | |

| December 1 through 31, 2020 | | | | | | 1,770,867 | | | | | | $ | 84.85 | | | | | 1,762,057 | | | | | | 1,829 | | |

| Total | | | | | | 10,668,654 | | | | | | $ | 83.34 | | | | | 10,609,497 | | | | | | | | |

Refer to the information set forth under the caption “Historical Financial Summary” included in Part IV, Item 15 of this report.

The Company’s management, under the supervision and with the participation of the Company’s Chairman of the Board, President and Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, [removed: 2020] [added: 2021] (the “Evaluation”).

Management, under the supervision and with the participation of the Company’s Chairman of the Board, President and Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the Company’s internal control over financial reporting based upon the framework in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and concluded that it was effective as of December 31, [removed: 2020.][added: 2021.]

The Company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] and has expressed an unqualified opinion in their report, which appears under “Index to Financial Statements – Report of Independent Registered Public Accounting Firm.”

PART III

Not applicable.

PART III

Additional information required by this Item relating to directors, executive officers and corporate governance of the Company is incorporated herein by reference to the Company’s Proxy Statement for its [removed: 2021] [added: 2022] Annual Meeting of Stockholders (the [removed: “2021] [added: “2022] Proxy Statement”).

The information regarding executive compensation set forth in the [removed: 2021] [added: 2022] Proxy Statement is incorporated herein by reference.

(a)The information regarding security ownership of certain beneficial owners and management set forth in the [removed: 2021] [added: 2022] Proxy Statement is incorporated herein by reference.

(c)Equity compensation plan information as of December 31, [removed: 2020:][added: 2021:]

| Equity compensation plans approved by security holders | | | | | | [removed: 29,278] [added: 28,011] | | | (1) | | | $ | [removed: 72.06] [added: 72.27] | | (2) | | | [removed: 48,564] [added: 37,028] | | | (3) | | |

(1)Consists of [removed: 27,541] [added: 26,095] options outstanding and [removed: 1,737] [added: 1,916] restricted stock units awarded but not yet vested under the Company’s 2013 Incentive Compensation Plan and the Company’s 2019 Incentive Compensation Plan, respectively, as more fully described in Note 8, Capital Stock and Stock-Based Compensation Plans to the Consolidated Financial Statements.

(2)Includes the weighted-average exercise price of stock options outstanding of $72 and restricted stock units of [removed: $73.][added: $76.]

(3)Amount includes [removed: 36,144] [added: 26,038] options available for issuance and [removed: 12,420] [added: 10,990] restricted stock units available for issuance under the Company’s 2019 Incentive Compensation Plan.

| Total | | | | | | 28,011 | | | | | | $ | 72.27 | | | | | 37,028 | | | | | |

| Total | | | | | | 29,278 | | | | | | $ | 72.06 | | | | | 48,564 | | | | | |

The information regarding certain relationships and related transactions and director independence set forth in the [removed: 2021] [added: 2022] Proxy Statement is incorporated herein by reference.

The information regarding auditor fees and services set forth in the [removed: 2021] [added: 2022] Proxy Statement is incorporated herein by reference.

| 3-B | | | | | | [Colgate-Palmolive Company By-laws, Amended and Restated as [removed: of March 11, 2020.] [added: of](https://www.sec.gov/Archives/edgar/data/21665/000002166521000029/colgate-palmolivecompanyby.htm) [December 9, 2021](https://www.sec.gov/Archives/edgar/data/21665/000002166521000029/colgate-palmolivecompanyby.htm)[.] (Registrant hereby incorporates by reference Exhibit 3.01 to its Current Report on Form 8-K filed [removed: on March 11, 2020,] [added: on](https://www.sec.gov/Archives/edgar/data/21665/000002166521000029/colgate-palmolivecompanyby.htm) [December 9](https://www.sec.gov/Archives/edgar/data/21665/000002166521000029/colgate-palmolivecompanyby.htm)[, 202](https://www.sec.gov/Archives/edgar/data/21665/000002166521000029/colgate-palmolivecompanyby.htm)[1](https://www.sec.gov/Archives/edgar/data/21665/000002166521000029/colgate-palmolivecompanyby.htm)[,] File No. [removed: 1-644.)](https://www.sec.gov/Archives/edgar/data/21665/000115752320000334/a52187721ex3_01.htm)] [added: 1-644.)](https://www.sec.gov/Archives/edgar/data/21665/000002166521000029/colgate-palmolivecompanyby.htm)] | | |

| 4 | | | a) | | | [Description of Securities of the [removed: Registrant](https://www.sec.gov/Archives/edgar/data/21665/000002166521000007/exhibit4a12312020.htm)] [added: Registrant](https://www.sec.gov/Archives/edgar/data/21665/000002166522000003/exhibit4a12312021.htm)] | | |

| [removed: 10-D] [added: 10-H] | | | [removed: a)] | | | [Colgate-Palmolive Company [removed: Supplemental Salaried Employees’ Retirement] [added: Deferred Compensation] Plan, amended and restated, effective as [removed: of September 27, 2017.] [added: of](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10b_093021xq32021.htm) [October 28, 2021](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10b_093021xq32021.htm)[.] (Registrant hereby incorporates by reference Exhibit [removed: 10 to] [added: 10-](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10b_093021xq32021.htm)[B](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10b_093021xq32021.htm) [to] its Quarterly Report on Form 10-Q for the quarter ended [removed: March 31, 2018,] [added: September 30, 20](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10b_093021xq32021.htm)[21](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10b_093021xq32021.htm)[,] File No. [removed: 1-644.)*](http://www.sec.gov/Archives/edgar/data/21665/000002166518000008/exhibit10_033118xq118.htm)] [added: 1-644.)*](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10b_093021xq32021.htm)] | | |

| [added: 10-D] | | | [removed: b)] | | | [removed: [Amendment 4Q2020-I, dated December 2, 2020, to the Colgate-Palmolive] [added: [Colgate-Palmolive] Company Supplemental Salaried Employees’ Retirement [removed: Plan*](https://www.sec.gov/Archives/edgar/data/21665/000002166521000007/exhibit10-db12312020.htm) [](https://www.sec.gov/Archives/edgar/data/21665/000002166521000007/exhibit10-db12312020.htm)[](https://www.sec.gov/Archives/edgar/data/21665/000002166521000007/exhibit10-db12312020.htm)] [added: Plan, amended and restated, effective as of January](https://www.sec.gov/Archives/edgar/data/21665/000002166522000003/exhibit10-d12312021.htm) [1, 202](https://www.sec.gov/Archives/edgar/data/21665/000002166522000003/exhibit10-d12312021.htm)[1](https://www.sec.gov/Archives/edgar/data/21665/000002166522000003/exhibit10-d12312021.htm)[.* ](https://www.sec.gov/Archives/edgar/data/21665/000002166522000003/exhibit10-d12312021.htm)] | | |

| [removed: 10-H] [added: 10-L] | | | | | | [removed: [Colgate-Palmolive] [added: [Form of Indemnification Agreement between Colgate-Palmolive] Company [removed: Deferred Compensation Plan, amended] and [removed: restated, effective as of January 1, 2005.] [added: its directors, executive officers and certain key employees.] (Registrant hereby incorporates by reference Exhibit [removed: 10-G] [added: 10-K] to its [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q] [added: 10-K] for the [removed: quarter] [added: year] ended [removed: September 30, 2007,] [added: December 31, 2017,] File No. [removed: 1-644.)*](http://www.sec.gov/Archives/edgar/data/21665/000119312507229631/dex10g.htm)] [added: 1-644.)](http://www.sec.gov/Archives/edgar/data/21665/000002166518000006/exhibit10-k12312017.htm)] | | |

| 10-J | | | | | | [Five Year Credit Agreement, dated as [removed: of November 2, 2018,] [added: of](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm) [August 20, 2021](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm)[,] by and among Colgate-Palmolive Company, as Borrower, Citibank, N.A., as Administrative Agent and Arranger, and the Lenders party thereto.(Registrant hereby incorporates by reference Exhibit [removed: 10-I to its Annual Report] [added: 10-](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm)[A](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm) [to its](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm) [Quarterly](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm) [Report] on Form [removed: 10-K for the year ended December 31, 2018,] [added: 10-](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm)[Q](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm) [for the](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm) [quarter](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm) [ended](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm) [September 30, 2021](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm)[,] File No. [removed: 1-644.)](http://www.sec.gov/Archives/edgar/data/21665/000002166519000003/exhibit10-i12312018.htm)] [added: 1-644.)](https://www.sec.gov/Archives/edgar/data/21665/000002166521000027/exhibit10a_093021xq32021.htm)] | | |

| [removed: 10-L] [added: 10-K] | | | [removed: a)] | | | [Colgate-Palmolive Company Supplemental Savings and Investment Plan, amended and restated, effective as of January 1, [removed: 2020 (Registrant hereby incorporates by reference Exhibit 10-L to its Annual Report on Form 10-K for the year ended December 31, 2019, File No. 1-644.)*](http://www.sec.gov/Archives/edgar/data/21665/000002166520000004/exhibit10-l12312019.htm)] [added: 2021.* ](https://www.sec.gov/Archives/edgar/data/21665/000002166522000003/exhibit10-k12312021.htm)] | | |

| 21 | | | | | | [Subsidiaries of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/21665/000002166521000007/exhibit2112312020.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/21665/000002166522000003/exhibit2112312021.htm)] | | |

| 23 | | | | | | [Consent of Independent Registered Public Accounting [removed: Firm.](https://www.sec.gov/Archives/edgar/data/21665/000002166521000007/exhibit2312312020.htm)] [added: Firm.](https://www.sec.gov/Archives/edgar/data/21665/000002166522000003/exhibit2312312021.htm)] | | |

| 24 | | | | | | [Powers of [removed: Attorney.](https://www.sec.gov/Archives/edgar/data/21665/000002166521000007/exhibit2412312020.htm)] [added: Attorney.](https://www.sec.gov/Archives/edgar/data/21665/000002166522000003/exhibit2412312021.htm)] | | |

| 31-A | | | | | | [Certificate of the Chairman of the Board, President and Chief Executive Officer of Colgate-Palmolive Company pursuant to Rule 13a-14(a) under the Securities Exchange Act of [removed: 1934.](https://www.sec.gov/Archives/edgar/data/21665/000002166521000007/exhibit31a12312020.htm)] [added: 1934.](https://www.sec.gov/Archives/edgar/data/21665/000002166522000003/exhibit31a12312021.htm)] | | |

| 31-B | | | | | | [Certificate of the Chief Financial Officer of Colgate-Palmolive Company pursuant to Rule 13a-14(a) under the Securities Exchange Act of [removed: 1934.](https://www.sec.gov/Archives/edgar/data/21665/000002166521000007/exhibit31b12312020.htm)] [added: 1934.](https://www.sec.gov/Archives/edgar/data/21665/000002166522000003/exhibit31b12312021.htm)] | | |

| 32 | | | | | | [Certificate of the Chairman of the Board, President and Chief Executive Officer and the Chief Financial Officer of Colgate-Palmolive Company pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 U.S.C. § [removed: 1350.*](https://www.sec.gov/Archives/edgar/data/21665/000002166521000007/exhibit3212312020.htm)] [added: 1350.*](https://www.sec.gov/Archives/edgar/data/21665/000002166522000003/exhibit3212312021.htm)] | | |

| 101 | | | | | | The following materials from Colgate-Palmolive Company’s Annual Report on Form 10-K for the year ended December 31, [removed: 2020,] [added: 2021,] formatted in Inline eXtensible Business Reporting Language (Inline XBRL): (i) the Consolidated Statements of Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Changes in Shareholders’ Equity, (iv) the Consolidated Statements of Comprehensive Income, (v) the Consolidated Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements, and (vii) Financial Statement Schedule. | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 10-K | | | | | | [364-day Credit Agreement, dated as of August 21, 2020, among Colgate-Palmolive Company, as Borrower, Citibank, N.A., as Administrative Agent and Arranger, and the Lenders party thereto. (Registrant hereby incorporates by reference Exhibit 10-A to its Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, File No. 1-644.)](http://www.sec.gov/Archives/edgar/data/21665/000002166520000026/exhibit10-a093020q32020.htm) | | |

| | | | b) | | | [Amendment 4Q2020-I, dated December 2, 2020, to the Colgate-Palmolive Company Supplemental Savings and Investment Plan* ](https://www.sec.gov/Archives/edgar/data/21665/000002166521000007/exhibit10-lb12312020.htm) | | |

| 10-M | | | | | | [Form of Indemnification Agreement between Colgate-Palmolive Company and its directors, executive officers and certain key employees. (Registrant hereby incorporates by reference Exhibit 10-K to its Annual Report on Form 10-K for the year ended December 31, 2017, File No. 1-644.)](http://www.sec.gov/Archives/edgar/data/21665/000002166518000006/exhibit10-k12312017.htm) | | |

| 10-N | | | | | | [Separation Agreement between Henning Jakobsen and Colgate-Palmolive Company. (Registrant hereby incorporates by reference Exhibit 10.1 to its Current Report on Form 8-K filed on October 30, 2020, File No. 1-644.)*](http://www.sec.gov/Archives/edgar/data/21665/000115752320001399/a52317130ex10_1.htm) | | |

| Date: February [removed: 18, 2021] [added: 17, 2022] | | | By | | | /s/ Noel R. Wallace | | |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February [removed: 18, 2021,] [added: 17, 2022,] by the following persons on behalf of the registrant and in the capacities indicated.

| (b) Principal Financial Officer | | | | | | John P. Bilbrey, John T. Cahill, Lisa M. Edwards, [removed: Helene D. Gayle,] C. Martin Harris, Martina Hund-Mejean, [added: Kimberly A. Nelson,] Lorrie M. Norrington, Michael B. Polk, Stephen I. Sadove* | | |

| Report of Independent Registered Public Accounting Firm [added: (PCAOB ID 238)] | | | [removed: [69](#i41f6955ad64c44db9653c749840c1125_112)] [added: [67](#i56469e1ca2634ba2a61c1417cba99b40_115)] | | |

| Consolidated Statements of Income for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [72](#i41f6955ad64c44db9653c749840c1125_115)] [added: [70](#i56469e1ca2634ba2a61c1417cba99b40_118)] | | |

| Consolidated Statements of Comprehensive Income for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [73](#i41f6955ad64c44db9653c749840c1125_118)] [added: [71](#i56469e1ca2634ba2a61c1417cba99b40_121)] | | |

| Consolidated Balance Sheets as of December 31, [removed: 2020] [added: 2021] and [removed: 2019] [added: 2020] | | | [removed: [74](#i41f6955ad64c44db9653c749840c1125_121)] [added: [72](#i56469e1ca2634ba2a61c1417cba99b40_124)] | | |

| Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [75](#i41f6955ad64c44db9653c749840c1125_127)] [added: [73](#i56469e1ca2634ba2a61c1417cba99b40_127)] | | |

| Consolidated Statements of Cash Flows for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [76](#i41f6955ad64c44db9653c749840c1125_133)] [added: [74](#i56469e1ca2634ba2a61c1417cba99b40_130)] | | |

| Notes to Consolidated Financial Statements | | | [removed: [77](#i41f6955ad64c44db9653c749840c1125_139)] [added: [75](#i56469e1ca2634ba2a61c1417cba99b40_136)] | | |

| Schedule II - Valuation and Qualifying Accounts for the years ended December 31, [removed: 2020, 2019] [added: 2021, 2020] and [removed: 2018] [added: 2019] | | | [removed: [129](#i41f6955ad64c44db9653c749840c1125_223)] [added: [122](#i56469e1ca2634ba2a61c1417cba99b40_205)] | | |

To the Board of Directors and Shareholders of Colgate-Palmolive [removed: Company:][added: Company]

We also have audited the Company's internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated [removed: Framework] [added: Framework*] (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2020] [added: 2021] and [removed: 2019,] [added: 2020,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2020] [added: 2021] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2020,] [added: 2021,] based on criteria established in [removed: Internal] [added: *Internal] Control - Integrated [removed: Framework] [added: Framework*] (2013) issued by the COSO.

[removed: Goodwill] [added: *Goodwill] and Indefinite-Lived Intangible [removed: Assets Interim] [added: Asset] Impairment Assessments - [removed: Filorga][added: Filorga*]

As described in Notes 2 and 5 to the consolidated financial statements, the Company’s consolidated balance of goodwill and indefinite-lived intangible assets was [removed: $3.8] [added: $3.3] billion and [removed: $1.9 billion respectively] [added: $1.6 billion, respectively,] as of December 31, [removed: 2020.][added: 2021.]

[removed: As disclosed by management, the] [added: The] fair value of the [added: Filorga] reporting [removed: units for goodwill] [added: unit] and [removed: the fair value of its] indefinite-lived [removed: intangible assets] [added: trademark] were determined using an income approach.

The principal considerations for our determination that performing procedures relating to the goodwill and indefinite-lived intangible [removed: assets interim] [added: asset] impairment assessments of Filorga is a critical audit matter are (i) the significant judgment by management when [removed: determining] [added: developing] the fair value [removed: measurements] of the reporting unit and indefinite-lived intangible [removed: assets ;] [added: asset;] (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to [added: the] sales growth [removed: rates,] [added: rates and] discount rate for the goodwill and indefinite-lived intangible [removed: assets,] [added: asset,] and the royalty rate for the indefinite-lived intangible [removed: assets;] [added: asset;] and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

These procedures included testing the effectiveness of controls relating to management’s goodwill and indefinite-lived intangible [removed: assets] [added: asset] impairment [removed: assessment,] [added: assessments,] including controls over the valuation of the Filorga reporting unit and indefinite-lived intangible [removed: assets.][added: asset.]

These procedures also included, among others (i) testing management’s process for [removed: determining] [added: developing] the fair value [removed: measurements] of the reporting unit and indefinite-lived intangible [removed: assets;] [added: asset;] (ii) evaluating the appropriateness of the income [removed: approach based on a discounted cash flow and relief from royalty models;] [added: approach;] (iii) testing the completeness and accuracy of underlying data used in the [removed: models;] [added: income approach;] and (iv) evaluating the reasonableness of significant assumptions used by management related to the sales growth [removed: rates,] [added: rates and] discount rate for the goodwill and indefinite-lived intangible [removed: assets,] [added: asset,] and the royalty rate for the indefinite-lived intangible [removed: assets.][added: asset.]

Evaluating management’s [added: significant] assumptions related to [added: the] sales growth [removed: rates,] [added: rates and] discount rate for the goodwill and indefinite-lived intangible [removed: assets] [added: asset] and [added: the] royalty rate for the indefinite-lived intangible [removed: assets] [added: asset] involved evaluating whether the [added: significant] assumptions used by management were reasonable considering (i) the [added: current and past performance of the reporting unit; (ii) the] consistency with external market and industry data, and [removed: (ii)] [added: (iii)] whether these assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating the appropriateness of the income approach [removed: based on a discounted cash flow] and [removed: relief from royalty models, and] the [added: reasonableness of the] discount rate and royalty rate [added: significant] assumptions.

| New York, New York February [removed: 18, 2021] [added: 17, 2022] | | | | | |

| | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Net sales | | | $ | [removed: 16,471] [added: 17,421] | | | | | $ | [removed: 15,693] [added: 16,471] | | | | | $ | [removed: 15,544] [added: 15,693] | |

| Cost of sales | | | [removed: 6,454] [added: 7,046] | | | | | | [removed: 6,368] [added: 6,454] | | | | | | [removed: 6,313] [added: 6,368] | | |

| Gross profit | | | [removed: 10,017] [added: 10,375] | | | | | | [removed: 9,325] [added: 10,017] | | | | | | [removed: 9,231] [added: 9,325] | | |

| Selling, general and administrative expenses | | | [removed: 6,019] [added: 6,407] | | | | | | [removed: 5,575] [added: 6,019] | | | | | | [removed: 5,389] [added: 5,575] | | |

| Other (income) expense, net | | | [removed: 113] [added: 65] | | | | | | [removed: 196] [added: 113] | | | | | | [removed: 148] [added: 196] | | |

| Operating profit | | | [removed: 3,885] [added: 3,332] | | | | | | [removed: 3,554] [added: 3,885] | | | | | | [removed: 3,694] [added: 3,554] | | |

| Non-service related postretirement costs | | | [removed: 74] [added: 70] | | | | | | [removed: 108] [added: 74] | | | | | | [removed: 87] [added: 108] | | |

| Interest (income) expense, net | | | [removed: 164] [added: 175] | | | | | | [removed: 145] [added: 164] | | | | | | [removed: 143] [added: 145] | | |

| Income before income taxes | | | [removed: 3,647] [added: 3,087] | | | | | | [removed: 3,301] [added: 3,647] | | | | | | [removed: 3,464] [added: 3,301] | | |

| Provision for income taxes | | | [removed: 787] [added: 749] | | | | | | [removed: 774] [added: 787] | | | | | | [removed: 906] [added: 774] | | |

| Net income including noncontrolling interests | | | [removed: 2,860] [added: 2,338] | | | | | | [removed: 2,527] [added: 2,860] | | | | | | [removed: 2,558] [added: 2,527] | | |

| Less: Net income attributable to noncontrolling interests | | | [removed: 165] [added: 172] | | | | | | [removed: 160] [added: 165] | | | | | | [removed: 158] [added: 160] | | |

| Net income attributable to Colgate-Palmolive Company | | | $ | [removed: 2,695] [added: 2,166] | | | | | $ | [removed: 2,367] [added: 2,695] | | | | | $ | [removed: 2,400] [added: 2,367] | |

| Earnings per common share, basic | | | $ | [removed: 3.15] [added: 2.56] | | | | | $ | [removed: 2.76] [added: 3.15] | | | | | $ | 2.76 | |

| Earnings per common share, diluted | | | $ | [removed: 3.14] [added: 2.55] | | | | | $ | [removed: 2.75] [added: 3.14] | | | | | $ | 2.75 | |

| Market Information | | | [123](#i56469e1ca2634ba2a61c1417cba99b40_208) | | |

Given the impact of the COVID-19 pandemic on the Filorga skin health business, during the fourth quarter of 2021, the Company concluded that the changes in circumstances in this reporting unit triggered the need for an interim impairment review of its indefinite-lived trademark and goodwill.

Accordingly, the Company performed an interim impairment test for the trademark as of December 31, 2021.

The Company concluded that the carrying value of the trademark exceeded its estimated fair value, and recorded an impairment charge of $204 million, reducing the carrying value to approximately $588 million.

After adjusting the carrying value of the trademark, the Company completed a quantitative impairment test for goodwill and recorded a goodwill impairment charge of $367 million in the Filorga reporting unit, reducing the carrying value of goodwill to approximately $577 million.

This method incorporates significant judgments and estimates by management regarding several key inputs, including future cash flows, sales growth rates, discount rate, and the selection of royalty rates, among others.

| Goodwill and indefinite-lived intangible impairment charges | | | 571 | | | | | | — | | | | | | — | | |

| Less: Net income attributable to noncontrolling interests | | | 172 | | | | | | 165 | | | | | | 160 | | |

| Net income | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,166 | | | | | | | | | | | | 172 | | |

| Dividends ($1.79)/per share* | | | | | | | | | | | | | | | | | | | | | | | | | | | (1,515) | | | | | | | | | | | | (166) | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance, December 31, 2021 | | | $ | 1,466 | | | | | $ | 3,269 | | | | | $ | (1) | | | | | $ | (24,089) | | | | | $ | 24,350 | | | | | $ | (4,386) | | | | | $ | 362 | |

| Goodwill and indefinite-lived intangible impairment charges | | | 571 | | | | | | — | | | | | | — | | |

| Other investing activities | | | (25) | | | | | | 3 | | | | | | — | | |

| Other financing activities | | | (24) | | | | | | 33 | | | | | | 15 | | |

Some of our products are also sold direct-to-consumer.

In November 2021, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2021-10, “Government Assistance (Topic 832).” This ASU requires increased disclosure on an annual basis about transactions with domestic, foreign, local, regional and national governments, including entities related to those governments and intergovernmental organizations, that are accounted for by applying a grant or contribution accounting model by analogy to other accounting guidance.

In October 2021, the FASB issued ASU No. 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” This ASU requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606).” This guidance is effective for the Company beginning on January 1, 2023 and is not expected to have a material impact on the Company’s Consolidated Financial Statements.

*2022 Global Productivity Initiative*

On January 27, 2022, the Board approved a targeted productivity program (the “2022 Global Productivity Initiative”).

The program is intended to reallocate resources towards the Company’s strategic priorities and faster growth businesses, drive efficiencies in the Company’s operations and streamline the Company’s supply chain to reduce structural costs.

Implementation of the 2022 Global Productivity Initiative, which is expected to be substantially completed by December 31, 2022, is projected to result in cumulative pre-tax charges, once all phases are approved and implemented, totaling between $200 and $240, which are currently estimated to be comprised of the following: employee-related costs, including severance, pension and other termination benefits (80%); asset-related costs, primarily accelerated depreciation and asset write-downs (10%); and other charges (10%), which include contract termination costs, consisting primarily of implementation-related charges resulting directly from exit activities and the implementation of new strategies.

It is estimated that approximately 90% of the charges will result in cash expenditures.

Employee-Related Costs also included pension and other retiree benefit enhancements.

| | | | | | | 2021 | | | | | | 2020 | | |

The change in the amount of Goodwill during 2021 is due to the goodwill impairment charge related to the Filorga reporting unit as more fully described below, and foreign currency translation.

| | | | | | | 2021 | | | | | | | | | | | | | | | | | | 2020 | | | | | | | | | | | | | | |

The change in the net carrying amounts of Other intangible assets during 2021 was primarily due to the impact of impairment charge related to the Filorga indefinite-lived trademark as more fully described below, foreign currency translation and amortization expense of $89.

The Company made revisions to the internal forecasts relating to its Filorga reporting unit during the fourth quarter of 2021 due primarily to the impact of the COVID-19 pandemic on the Filorga skin health business 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 triggered the need for an interim impairment review of its indefinite-lived trademark and goodwill and, accordingly, performed an interim impairment test for the trademark as of December 31, 2021.

The Company concluded that the carrying value of the trademark exceeded its estimated fair value, and recorded an impairment charge of $204, reducing the carrying value to approximately $588.

After adjusting the carrying value of the trademark, the Company completed a quantitative impairment test for goodwill and recorded a goodwill impairment charge of $367 in the Filorga reporting unit, reducing the carrying value of goodwill to approximately $577.

The goodwill and trademark impairment charges are presented as a separate line item in the Consolidated Statements of Income.

| Commercial paper | | | | | | (0.4)% | | | | | | 2022 | | | | | | | | | | | | 1,204 | | | | | | 1,139 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | 7,206 | | | | | | 7,343 | | |

| 2022 | | | $ | 456 | |

| 2026 | | | 566 | | |

| Thereafter | | | 3,431 | | |

An amount equal to the net proceeds of the notes will be used to finance or refinance, in part or in full, new and existing projects and programs with distinct environmental or social benefits.

During the fourth quarter of 2021, the Company redeemed prior to maturity all of its outstanding 0.000% notes due 2021 with a principal amount of €500, originally issued on November 12, 2019.

COLGATE-PALMOLIVE COMPANY

| --- | --- | --- | --- | --- | --- |

| Market Information | | | [130](#i41f6955ad64c44db9653c749840c1125_226) | | |

| Historical Financial Summary | | | [131](#i41f6955ad64c44db9653c749840c1125_229) | | |

*Change in Accounting Principle*

As discussed in Note 15 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

As a result of the COVID-19 Pandemic, in the first quarter of 2020, management determined that a “triggering event” had occurred relative to its recently acquired Filorga skin health business and, as required, performed a quantitative analysis.

The results of the analysis indicated the estimated fair value of the reporting unit and indefinite-life intangible assets continue to exceed their carrying values and were not impaired.

These methods incorporate several estimates and assumptions, the most significant being future cash flows, sales growth rates, discount rate for the goodwill and indefinite-lived intangible assets, and the selection of royalty rates for the indefinite-lived intangible assets.

For the years ended December 31,

(Dollars in Millions Except Per Share Amounts)

(Dollars in Millions Except Share and Per Share Amounts)

| Balance, January 1, 2018 | | | $ | 1,466 | | | | | $ | 1,984 | | | | | $ | (5) | | | | | $ | (20,181) | | | | | $ | 20,531 | | | | | $ | (3,855) | | | | | $ | 303 | |

| Net income | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,400 | | | | | | | | | | | | 158 | | |

| Dividends ($1.66)/per share* | | | | | | | | | | | | | | | | | | | | | | | | | | | (1,448) | | | | | | | | | | | | (143) | | |

| Other | | | | | | | | | 5 | | | | | | 2 | | | | | | 2 | | | | | | 132 | | | | | | (163) | | | (1) | | | | | |

(1) As a result of the early adoption of ASU 2018-02, the Company reclassified the stranded tax effects in Accumulated other comprehensive income (loss) resulting from the Tax Cuts and Jobs Act to Retained earnings.

| Charge for U.S. tax reform | | | — | | | | | | — | | | | | | 80 | | |

Notes to Consolidated Financial Statements (continued)

These tests were performed and did not result in an impairment charge.

In March 2020, the FASB issued ASU No. 2020-03, “Codification to Financial Instruments.” This ASU improves and clarifies various financial instruments topics, including the current expected credit losses (“CECL”) standard issued in 2016.

The ASU addresses seven different issues that describe the areas of improvement and the related amendments to GAAP, intended to make the standards easier to understand and apply by eliminating inconsistencies and providing clarifications.

The amendments related to Issue 1, Issue 2, Issue 4 and Issue 5 were effective upon issuance of this update.

The amendments related to Issue 3, Issue 6 and Issue 7 were effective for the Company beginning on January 1, 2020.

In November 2019, the FASB issued ASU No. 2019-11, “Codification Improvements to Topic 326, Financial Instruments - Credit Losses.” This ASU clarifies and addresses certain items related to amendments in ASU 2016-13.

This guidance was effective for the Company beginning on January 1, 2020 and did not have a material impact on the Company’s Consolidated Financial Statements.

In April 2019, the FASB issued ASU No. 2019-04, “Codification Improvements to Financial Instruments-Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Financial Instruments (Topic 825).” This ASU clarifies three topics related to financial instruments accounting.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement.” This guidance removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements.

The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” eliminating the requirement to calculate implied fair value, essentially eliminating step two from the goodwill impairment test.

The standard requires goodwill impairment to be based upon the results of step one of the impairment test, which is defined as the excess of the carrying value of a reporting unit over its fair value.

The impairment charge will be limited to the amount of goodwill allocated to that reporting unit.

The standard was effective for the Company on a prospective basis beginning on January 1, 2020 and did not have a material impact on the Company’s Consolidated Financial Statements.

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326).” This ASU introduces the current expected credit loss (CECL) model, which requires an entity to measure credit losses for certain financial instruments and financial assets, including trade receivables.

Under this update, on initial recognition and at each reporting period, an entity is required to recognize an allowance that reflects the entity’s current estimate of credit losses expected to be incurred over the life of the financial instrument.

The Company adopted the new standard, which primarily impacts the Company’s trade receivables and related methodology for assessing the collectability of its customer accounts, on January 1, 2020, on a “modified retrospective” basis.

The adoption of this ASU did not have a material impact on the Company’s Consolidated Financial Statements.

The Company expects that goodwill will be deductible for tax purposes.

Pro forma results of operations have not been presented as the impact on the Company’s Consolidated Financial Statements is not material.

*Laboratoires Filorga Cosmétiques (“Filorga”)*