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Restructuring and Related Implementation Charges | 6 Months Ended
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Jun. 30, 2017
Restructuring and Related Activities [Abstract] |
Restructuring and Related Implementation Charges | Restructuring and Related Implementation Charges In the fourth quarter of 2012, the Company commenced a Global Growth and Efficiency Program (as expanded in 2014 and 2015 as described below, the “2012 Restructuring Program”) for sustained growth. The program’s initiatives are expected to help Colgate ensure sustained solid worldwide growth in unit volume, organic sales and earnings per share and enhance its global leadership positions in its core businesses. On October 23, 2014, the Company’s Board of Directors (the “Board”) approved an expansion of the 2012 Restructuring Program to take advantage of additional savings opportunities. On October 29, 2015, the Board approved the reinvestment of the funds from the sale of the Company’s laundry detergent business in the South Pacific to expand the 2012 Restructuring Program and extend it for one year through December 31, 2017. The Board approved the implementation plan for this expansion on March 10, 2016. Initiatives under the 2012 Restructuring Program continue to 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. The Company continually seeks new projects and ways to advance the implementation of existing projects in order to accelerate savings under the program and, given the challenging market conditions and slowing category growth experienced in the first six months of 2017, it has identified additional opportunities and now estimates charges to be at the upper end of its previously disclosed range. Cumulative pretax charges resulting from the 2012 Restructuring Program, once all phases are approved and implemented, are now estimated to be $1,500 to $1,585 ($1,120 to $1,170 aftertax) as compared to the previous estimate of $1,405 to $1,585 ($1,050 to $1,170 aftertax). The pretax charges resulting from the 2012 Restructuring Program are currently estimated to be comprised of the following categories: Employee-Related Costs, including severance, pension and other termination benefits (45%); asset-related costs, primarily Incremental Depreciation and Asset Impairments (10%); and Other charges, which include contract termination costs, consisting primarily of related implementation charges resulting directly from exit activities (20%) and the implementation of new strategies (25%). Over the course of the 2012 Restructuring Program, it is currently estimated that approximately 75% of the charges will result in cash expenditures. Anticipated pretax charges for 2017 are now expected to approximate $275 to $360 ($210 to $260 aftertax) as compared to the previous estimate of $180 to $360 ($140 to $260 aftertax). It is expected that substantially all charges resulting from the 2012 Restructuring Program will be incurred by December 31, 2017. It is currently expected that the cumulative pretax charges, once all projects are approved and implemented, will relate to initiatives undertaken in North America (15%), Europe (25%), Latin America (5%), Asia Pacific (5%), Africa/Eurasia (5%), Hill’s Pet Nutrition (5%) and Corporate (40%), which includes substantially all of the costs related to the implementation of new strategies, noted above, on a global basis. It is expected that, when it has been fully implemented, the 2012 Restructuring Program will contribute a net reduction of approximately 3,300 to 3,800 positions from the Company’s global employee workforce. For the three and six months ended June 30, 2017 and 2016, restructuring and related implementation charges are reflected in the Condensed Consolidated Statements of Income as follows:
| Three Months Ended |  | Six Months Ended
| June 30, |  | June 30,
| 2017 |  | 2016 |  | 2017 |  | 2016
Cost of sales | $ | 21 |  |  | $ | 12 |  |  | $ | 35 |  |  | $ | 20 |
Selling, general and administrative expenses | 17 |  |  | 14 |  |  | 38 |  |  | 40 |
Other (income) expense, net | 104 |  |  | 33 |  |  | 115 |  |  | 54 |
Total 2012 Restructuring Program charges, pretax | $ | 142 |  |  | $ | 59 |  |  | $ | 188 |  |  | $ | 114 |
Total 2012 Restructuring Program charges, aftertax | $ | 115 |  |  | $ | 44 |  |  | $ | 146 |  |  | $ | 82 |
Restructuring and related implementation charges in the preceding table are recorded in the Corporate segment as these initiatives are predominantly centrally directed and controlled and are not included in internal measures of segment operating performance. Total charges incurred for the 2012 Restructuring Program relate to initiatives undertaken by the following reportable operating segments:
| Three Months Ended |  | Six Months Ended |  | Program-to-date
| June 30, |  | June 30, |  | Accumulated Charges
| 2017 |  | 2016 |  | 2017 |  | 2016 |  |
North America | 17 | % |  | 23 | % |  | 22 | % |  | 32 | % |  | 17 | %
Latin America | 3 | % |  | 6 | % |  | 3 | % |  | 7 | % |  | 4 | %
Europe | 55 | % |  | 6 | % |  | 42 | % |  | 7 | % |  | 24 | %
Asia Pacific | 3 | % |  | 9 | % |  | 3 | % |  | 6 | % |  | 3 | %
Africa/Eurasia | 2 | % |  | 22 | % |  | 2 | % |  | 15 | % |  | 6 | %
Hill’s Pet Nutrition | 2 | % |  | 17 | % |  | 4 | % |  | 9 | % |  | 7 | %
Corporate | 18 | % |  | 17 | % |  | 24 | % |  | 24 | % |  | 39 | %
Since the inception of the 2012 Restructuring Program in the fourth quarter of 2012, the Company has incurred cumulative pretax charges of $1,416 ($1,053 aftertax) in connection with the implementation of various projects as follows:
| Cumulative Charges
| as of June 30, 2017
Employee-Related Costs | $ | 573 |
Incremental Depreciation | 86 |
Asset Impairments | 29 |
Other | 728 |
Total | $ | 1,416 |
The majority of costs incurred since inception relate to the following projects: the implementation of the Company’s overall hubbing strategy; the extension of shared business services and streamlining of global functions; the consolidation of facilities; the closing of the Morristown, New Jersey personal care facility; the simplification and streamlining of the Company’s research and development capabilities and oral care supply chain, both in Europe; redesigning the European commercial organization; and restructuring how the Company will provide future retirement benefits to substantially all of the U.S.-based employees participating in the Company’s defined benefit retirement plan by shifting them to the Company’s defined contribution plan. The following tables summarize the activity for the restructuring and related implementation charges discussed above and the related accruals:
|  | Three Months Ended June 30, 2017
|  | Employee-Related Costs |  | Incremental Depreciation |  | Asset Impairments |  | Other |  | Total
Balance at March 31, 2017 |  | $ | 44 |  |  | $ | — |  |  | $ | — |  |  | $ | 123 |  |  | $ | 167 |
Charges |  | 100 |  |  | 4 |  |  | — |  |  | 38 |  |  | 142 |
Cash payments |  | (8 | ) |  | — |  |  | — |  |  | (46 | ) |  | (54 | )
Charges against assets |  | (1 | ) |  | (4 | ) |  | — |  |  | — |  |  | (5 | )
Foreign exchange |  | 3 |  |  | — |  |  | — |  |  | 1 |  |  | 4 |
Balance at June 30, 2017 |  | $ | 138 |  |  | $ | — |  |  | $ | — |  |  | $ | 116 |  |  | $ | 254 |
|  | Six Months Ended June 30, 2017
|  | Employee-Related Costs |  | Incremental Depreciation |  | Asset Impairments |  | Other |  | Total
Balance at December 31, 2016 |  | $ | 56 |  |  | $ | — |  |  | $ | — |  |  | $ | 125 |  |  | $ | 181 |
Charges |  | 108 |  |  | 6 |  |  | 2 |  |  | 72 |  |  | 188 |
Cash payments |  | (27 | ) |  | — |  |  | — |  |  | (82 | ) |  | (109 | )
Charges against assets |  | (2 | ) |  | (6 | ) |  | (2 | ) |  | — |  |  | (10 | )
Foreign exchange |  | 3 |  |  | — |  |  | — |  |  | 1 |  |  | 4 |
Balance at June 30, 2017 |  | $ | 138 |  |  | $ | — |  |  | $ | — |  |  | $ | 116 |  |  | $ | 254 |
Employee-Related Costs primarily include severance and other termination benefits and are calculated based on long-standing benefit practices, local statutory requirements and, in certain cases, voluntary termination arrangements. Employee-Related Costs also include pension and other retiree benefit enhancements amounting to $1 and $2 for the three and six months ended June 30, 2017, respectively, which are reflected as Charges against assets within Employee-Related Costs in the preceding tables as the corresponding balance sheet amounts are reflected as a reduction of pension assets or an increase in pension and other retiree benefit liabilities (see Note 9, Retirement Plans and Other Retiree Benefits). Incremental Depreciation is recorded to reflect changes in useful lives and estimated residual values for long-lived assets that will be taken out of service prior to the end of their normal service period. Asset Impairments are recorded to write down assets held for sale or disposal to their fair value based on amounts expected to be realized. Charges against assets within Asset Impairments are net of cash proceeds pertaining to the sale of certain assets. Other charges consist primarily of charges resulting directly from exit activities and the implementation of new strategies as a result of the 2012 Restructuring Program. These charges for the three and six months ended June 30, 2017 include third-party incremental costs related to the development and implementation of new business and strategic initiatives of $37 and $70, respectively, and contract termination costs and charges resulting directly from exit activities of $1 and $2, respectively. These charges were expensed as incurred.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 5.P.4) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140904-122747 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 5.P.3) -URI http://asc.fasb.org/extlink&oid=27011515&loc=d3e140864-122747 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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