XML 98 R18.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Retirement Plans and Other Retiree Benefits | 12 Months Ended
--- | ---
Dec. 31, 2019
Retirement Benefits [Abstract] |
Retirement Plans and Other Retiree Benefits | Retirement Plans and Other Retiree Benefits Retirement Plans The Company and certain of its U.S. and foreign subsidiaries maintain defined benefit retirement plans. Benefits under these plans are based primarily on years of service and employees’ earnings. In the U.S., effective January 1, 2014, the Company provides virtually all future retirement benefits through the Company’s defined contribution plan. As a result, service after December 31, 2013 is not considered for participants in the Company’s principal U.S. defined benefit retirement plan. Participants in the Company’s principal U.S. defined benefit retirement plan whose retirement benefit was determined under the cash balance formula continue to earn interest credits on their vested balances as of December 31, 2013 but no longer receive pay credits. Participants whose retirement benefit was determined under the final average earnings formula or career average earnings formula continue to have their accrued benefit adjusted for pay increases until termination of employment. In the Company’s principal U.S. plans and certain funded foreign plans, funds are contributed to trusts in accordance with regulatory limits to provide for current service and for any unfunded projected benefit obligation over a reasonable period. The target asset allocation for the Company’s defined benefit plans is as follows:
|  | United States |  | International
Asset Category |  |  |  |
Equity securities |  | 24 | % |  | 38 | %
Fixed income securities |  | 68 | % |  | 45 | %
Real estate and other investments |  | 8 | % |  | 17 | %
Total |  | 100 | % |  | 100 | %
At December 31, 2019 the allocation of the Company’s plan assets and the level of valuation input, as applicable, for each major asset category were as follows:
|  | Level of Valuation Input |  | Pension Plans |  |
|  |  | United States |  | International |  | Other Retiree Benefit Plans
Cash and cash equivalents |  | Level 1 |  | $ | 41 |  |  | $ | 15 |  |  | $ | 1 |
U.S. common stocks |  | Level 1 |  | 49 |  |  | 3 |  |  | 1 |
International common stocks |  | Level 1 |  | — |  |  | 3 |  |  | — |
Pooled funds(1) |  | Level 1 |  | 29 |  |  | 104 |  |  | 2 |
Fixed income securities(2) |  | Level 2 |  | 1,067 |  |  | 14 |  |  | 20 |
Guaranteed investment contracts(3) |  | Level 2 |  | 1 |  |  | 42 |  |  | — |
|  |  |  | 1,187 |  |  | 181 |  |  | 24 |
Investments valued using NAV per share(4) |  |  |  |  |  |  |  |  |  |  |
Domestic, developed and emerging markets equity funds |  |  |  | 328 |  |  | 165 |  |  | 7 |
Fixed income funds(5) |  |  |  | 177 |  |  | 196 |  |  | 3 |
Hedge funds(6) |  |  |  | 3 |  |  | 17 |  |  | — |
Multi-Asset funds(7) |  |  |  | 155 |  |  | 2 |  |  | 2 |
Real estate funds(8) |  |  |  | 41 |  |  | 25 |  |  | 1 |
|  |  |  | 704 |  |  | 405 |  |  | 13 |
Other assets and liabilities, net(9) |  |  |  | (85 | ) |  | — |  |  | — |
Total Investments |  |  |  | $ | 1,806 |  |  | $ | 586 |  |  | $ | 37 |
At December 31, 2018 the allocation of the Company’s plan assets and the level of valuation input, as applicable, for each major asset category were as follows:
|  | Level of Valuation Input |  | Pension Plans |  |
|  |  | United States |  | International |  | Other Retiree Benefit Plans
Cash and cash equivalents |  | Level 1 |  | $ | 29 |  |  | $ | 9 |  |  | $ | 1 |
U.S. common stocks |  | Level 1 |  | 75 |  |  | 3 |  |  | 3 |
International common stocks |  | Level 1 |  | — |  |  | 4 |  |  | — |
Pooled funds(1) |  | Level 1 |  | 106 |  |  | 82 |  |  | 4 |
Fixed income securities(2) |  | Level 2 |  | 865 |  |  | 24 |  |  | 28 |
Guaranteed investment contracts(3) |  | Level 2 |  | 1 |  |  | 51 |  |  | — |
|  |  |  | 1,076 |  |  | 173 |  |  | 36 |
Investments valued using NAV per share(4) |  |  |  |  |  |  |  |  |  |  |
Domestic, developed and emerging markets equity funds |  |  |  | 229 |  |  | 134 |  |  | 8 |
Fixed income funds(5) |  |  |  | 116 |  |  | 173 |  |  | 4 |
Hedge funds(6) |  |  |  | 56 |  |  | 6 |  |  | 2 |
Multi-Asset funds(7) |  |  |  | 94 |  |  | 2 |  |  | 3 |
Real estate funds(8) |  |  |  | 39 |  |  | 22 |  |  | 1 |
|  |  |  | 534 |  |  | 337 |  |  | 18 |
Other assets and liabilities, net(9) |  |  |  | (42 | ) |  | — |  |  | — |
Total Investments |  |  |  | $ | 1,568 |  |  | $ | 510 |  |  | $ | 54 |
_______
(1) | Pooled funds primarily invest in U.S. and foreign equity securities, debt and money market securities.
(2) | The fixed income securities are traded over the counter and certain of these securities lack daily pricing or liquidity and as such are classified as Level 2. As of both December 31, 2019 and 2018, approximately 50% of the U.S. pension plan fixed income portfolio was invested in U.S. treasury or agency securities, with the remainder invested in other government bonds and corporate bonds.
(3) | The guaranteed investment contracts (“GICs”) represent contracts with insurance companies measured at the cash surrender value of each contract. The Level 2 valuation reflects that the cash surrender value is based principally on a referenced pool of investment funds with active redemption.
(4) | Investments that are measured at fair value using net asset value (“NAV”) per share as a practical expedient have not been classified in the fair value hierarchy. The NAV is based on the value of the underlying investments owned, minus its liabilities, divided by the number of shares outstanding. There are no unfunded commitments related to these investments. Redemption notice period primarily ranges from 0-3 months and redemption frequency windows range from daily to quarterly.
(5) | Fixed income funds primarily invest in U.S. government and investment grade corporate bonds.
(6) | Consists of investments in underlying hedge fund strategies that are primarily implemented through the use of long and short equity and fixed income securities and derivative instruments such as futures and options.
(7) | Multi-Asset funds primarily invest across a variety of asset classes, including global stocks and bonds, as well as alternative strategies.
(8) | Real estate is valued using the NAV per unit of funds that are invested in real estate property. The investment value of the real estate property is determined quarterly using independent market appraisals as determined by the investment manager.
(9) | This category primarily includes unsettled trades for investments purchased and sold and dividend receivables.
Equity securities in the U.S. plans include investments in the Company’s common stock representing 3% and 5% of U.S. plan assets at December 31, 2019 and December 31, 2018, respectively. In 2019 and 2018, the U.S. plans sold 588,334 and 384,004 shares, respectively, of the Company’s common stock to the Company. No shares of the Company’s stock were purchased by the U.S. plans in 2019 or 2018. The plans received dividends on the Company’s common stock of $2 in 2019 and $3 in 2018. Other Retiree Benefits The Company and certain of its subsidiaries provide health care and life insurance benefits for retired employees to the extent not provided by government-sponsored plans. The Company uses a December 31 measurement date for its defined benefit and other retiree benefit plans. Summarized information for the Company’s defined benefit and other retiree benefit plans is as follows:
|  | Pension Plans |  | Other Retiree Benefit Plans
|  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018
|  | United States |  | International |  |  |  |
Change in Benefit Obligations |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligations at beginning of year |  | $ | 2,147 |  |  | $ | 2,363 |  |  | $ | 787 |  |  | $ | 847 |  |  | $ | 876 |  |  | $ | 960 |
Service cost |  | 1 |  |  | 1 |  |  | 14 |  |  | 14 |  |  | 15 |  |  | 16 |
Interest cost |  | 90 |  |  | 86 |  |  | 22 |  |  | 21 |  |  | 41 |  |  | 38 |
Participants’ contributions |  | — |  |  | — |  |  | 2 |  |  | 2 |  |  | — |  |  | — |
Acquisitions/plan amendments |  | — |  |  | — |  |  | 3 |  |  | 4 |  |  | — |  |  | — |
Actuarial loss (gain) |  | 181 |  |  | (139 | ) |  | 82 |  |  | (11 | ) |  | 166 |  |  | (88 | )
Foreign exchange impact |  | — |  |  | — |  |  | 8 |  |  | (40 | ) |  | 1 |  |  | (5 | )
Termination benefits (1) |  | 7 |  |  | 9 |  |  | — |  |  | — |  |  | — |  |  | — |
Curtailments and settlements |  | — |  |  | (4 | ) |  | (9 | ) |  | (7 | ) |  | — |  |  | — |
Benefit payments |  | (154 | ) |  | (169 | ) |  | (35 | ) |  | (42 | ) |  | (49 | ) |  | (45 | )
Other |  | — |  |  | — |  |  | 2 |  |  | (1 | ) |  | — |  |  | — |
Benefit obligations at end of year |  | $ | 2,272 |  |  | $ | 2,147 |  |  | $ | 876 |  |  | $ | 787 |  |  | $ | 1,050 |  |  | $ | 876 |
Change in Plan Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 1,568 |  |  | $ | 1,812 |  |  | $ | 510 |  |  | $ | 575 |  |  | $ | 54 |  |  | $ | — |
Actual return on plan assets |  | 262 |  |  | (101 | ) |  | 76 |  |  | (16 | ) |  | 8 |  |  | (1 | )
Company contributions |  | 130 |  |  | 30 |  |  | 30 |  |  | 27 |  |  | 24 |  |  | 100 |
Participants’ contributions |  | — |  |  | — |  |  | 2 |  |  | 3 |  |  | — |  |  | — |
Foreign exchange impact |  | — |  |  | — |  |  | 12 |  |  | (29 | ) |  | — |  |  | — |
Settlements and acquisitions |  | — |  |  | (4 | ) |  | (9 | ) |  | (7 | ) |  | — |  |  | — |
Benefit payments |  | (154 | ) |  | (169 | ) |  | (35 | ) |  | (42 | ) |  | (49 | ) |  | (45 | )
Other |  | — |  |  | — |  |  | — |  |  | (1 | ) |  | — |  |  | — |
Fair value of plan assets at end of year |  | $ | 1,806 |  |  | $ | 1,568 |  |  | $ | 586 |  |  | $ | 510 |  |  | $ | 37 |  |  | $ | 54 |
Funded Status |  |  |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligations at end of year |  | $ | 2,272 |  |  | $ | 2,147 |  |  | $ | 876 |  |  | $ | 787 |  |  | $ | 1,050 |  |  | $ | 876 |
Fair value of plan assets at end of year |  | 1,806 |  |  | 1,568 |  |  | 586 |  |  | 510 |  |  | 37 |  |  | 54 |
Net amount recognized |  | $ | (466 | ) |  | $ | (579 | ) |  | $ | (290 | ) |  | $ | (277 | ) |  | $ | (1,013 | ) |  | $ | (822 | )
Amounts Recognized in Balance Sheet |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncurrent assets |  | $ | — |  |  | $ | — |  |  | $ | 13 |  |  | $ | 6 |  |  | $ | — |  |  | $ | — |
Current liabilities |  | (28 | ) |  | (26 | ) |  | (13 | ) |  | (12 | ) |  | (13 | ) |  | (46 | )
Noncurrent liabilities |  | (438 | ) |  | (553 | ) |  | (290 | ) |  | (271 | ) |  | (1,000 | ) |  | (776 | )
Net amount recognized |  | $ | (466 | ) |  | $ | (579 | ) |  | $ | (290 | ) |  | $ | (277 | ) |  | $ | (1,013 | ) |  | $ | (822 | )
Amounts Recognized in Accumulated Other Comprehensive Income (Loss) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Actuarial loss |  | $ | 910 |  |  | $ | 940 |  |  | $ | 238 |  |  | $ | 226 |  |  | $ | 388 |  |  | $ | 239 |
Transition/prior service cost |  | 1 |  |  | 1 |  |  | 7 |  |  | 6 |  |  | (1 | ) |  | (1 | )
|  | $ | 911 |  |  | $ | 941 |  |  | $ | 245 |  |  | $ | 232 |  |  | $ | 387 |  |  | $ | 238 |
Accumulated benefit obligation |  | $ | 2,236 |  |  | $ | 2,090 |  |  | $ | 816 |  |  | $ | 731 |  |  | $ | — |  |  | $ | — |
|  | Pension Plans |  | Other Retiree Benefit Plans
|  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018
|  | United States |  | International |  |  |  |
Weighted-Average Assumptions Used to Determine Benefit Obligations |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 3.40 | % |  | 4.38 | % |  | 2.06 | % |  | 2.80 | % |  | 3.56 | % |  | 4.43 | %
Long-term rate of return on plan assets |  | 6.30 | % |  | 6.60 | % |  | 3.38 | % |  | 4.06 | % |  | 6.30 | % |  | 6.60 | %
Long-term rate of compensation increase |  | 3.50 | % |  | 3.50 | % |  | 2.83 | % |  | 2.86 | % |  | 3.50 | % |  | 3.50 | %
ESOP growth rate |  | — | % |  | — | % |  | — | % |  | — | % |  | 10.00 | % |  | 10.00 | %
Medical cost trend rate of increase |  | — | % |  | — | % |  | — | % |  | — | % |  | 6.00 | % |  | 6.00 | %
Interest Crediting Rate |  | 3.21 | % |  | 4.38 | % |  | 0.85 | % |  | 0.85 | % |  | — | % |  | — | %
_________
(1) | Represents pension and other retiree benefit enhancements incurred in 2019 and 2018 pursuant to the Global Growth and Efficiency Program.
The actuarial losses incurred during 2019 were primarily driven from a decrease in discount rates applied against future expected benefit payments and resulted in an increase in the benefit obligation for both the U.S. pension and Other retiree benefit plans. The actuarial gains recorded during 2018 for both the U.S. pension and other retiree benefit plans were primarily a result of an increase in discount rates applied against future estimated benefit payments. Additionally, other retiree benefit plans were positively impacted as a result of lower medical cost increases. The company adopted ASU No. 2018-14, “Compensation-Retirement Benefits-Defined Benefit Plans- General (Topic 715): Disclosure Framework–Changes to the Disclosure Requirements for Defined Benefit Plans.” beginning on January 1, 2020. Refer to Note 3, Recent Accounting Pronouncements. The overall investment objective of the plans is to balance risk and return so that obligations to employees are met. The Company evaluates its long-term rate of return on plan assets on an annual basis. In determining the long-term rate of return, the Company considers the nature of the plans’ investments and the historical rates of return. The assumed rate of return as of December 31, 2019 for the U.S. plans was 6.30%. Average annual rates of return for the U.S. plans for the most recent 1-year, 5-year, 10-year, 15-year and 25-year periods were 17%, 6%, 8%, 7%, and 8%, respectively. Similar assessments were performed in determining rates of return on international pension plan assets to arrive at the Company’s 2019 weighted-average rate of return of 3.38%. The medical cost trend rate of increase assumed in measuring the expected cost of benefits is projected to decrease from 6.00% in 2020 to 4.75% by 2025, remaining at 4.75% for the years thereafter. Pension plans with projected benefit obligations in excess of plan assets and plans with accumulated benefit obligations in excess of plan assets as of December 31 consisted of the following:
|  | Years Ended December 31,
|  | 2019 |  | 2018
Benefit Obligation Exceeds Fair Value of Plan Assets |  |  |  |
Projected benefit obligation |  | $ | 2,862 |  |  | $ | 2,882 |
Fair value of plan assets |  | 2,094 |  |  | 2,007 |
Accumulated benefit obligation |  | 875 |  |  | 2,689 |
Fair value of plan assets |  | 166 |  |  | 1,924 |
Other Retiree Benefit plans with accumulated postretirement benefit obligation in excess of plan assets as of December 31 consisted of the following:
|  | Years Ended December 31,
|  | 2019 |  | 2018
Benefit Obligation Exceeds Fair Value of Plan Assets |  |  |  |
Accumulated postretirement benefit obligation |  | $ | 958 |  |  | $ | 807 |
Fair value of plan assets |  | 37 |  |  | 54 |
Summarized information regarding the net periodic benefit costs for the Company’s defined benefit and other retiree benefit plans is as follows:
|  | Pension Plans |  | Other Retiree Benefit Plans
|  | 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017
|  | United States |  | International |  |  |  |  |  |
Components of Net Periodic Benefit Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 1 |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | 14 |  |  | $ | 14 |  |  | $ | 16 |  |  | $ | 15 |  |  | $ | 16 |  |  | $ | 13 |
Interest cost |  | 90 |  |  | 86 |  |  | 94 |  |  | 22 |  |  | 21 |  |  | 22 |  |  | 41 |  |  | 38 |  |  | 40 |
Annual ESOP allocation |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Expected return on plan assets |  | (103 | ) |  | (115 | ) |  | (111 | ) |  | (19 | ) |  | (21 | ) |  | (22 | ) |  | (3 | ) |  | (2 | ) |  | — |
Amortization of transition and prior service costs (credits) |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Amortization of actuarial loss |  | 51 |  |  | 47 |  |  | 48 |  |  | 9 |  |  | 8 |  |  | 10 |  |  | 11 |  |  | 14 |  |  | 13 |
Net periodic benefit cost |  | $ | 39 |  |  | $ | 19 |  |  | $ | 32 |  |  | $ | 27 |  |  | $ | 22 |  |  | $ | 26 |  |  | $ | 64 |  |  | $ | 66 |  |  | $ | 66 |
Other postretirement charges |  | 7 |  |  | 9 |  |  | 24 |  |  | 1 |  |  | 2 |  |  | 4 |  |  | — |  |  | — |  |  | (3 | )
Total pension cost |  | $ | 46 |  |  | $ | 28 |  |  | $ | 56 |  |  | $ | 28 |  |  | $ | 24 |  |  | $ | 30 |  |  | $ | 64 |  |  | $ | 66 |  |  | $ | 63 |
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate |  | 4.38 | % |  | 3.73 | % |  | 4.27 | % |  | 2.80 | % |  | 2.53 | % |  | 2.59 | % |  | 4.43 | % |  | 3.80 | % |  | 4.41 | %
Long-term rate of return on plan assets |  | 6.60 | % |  | 6.60 | % |  | 6.80 | % |  | 4.06 | % |  | 4.04 | % |  | 4.14 | % |  | 6.60 | % |  | 6.60 | % |  | 6.80 | %
Long-term rate of compensation increase |  | 3.50 | % |  | 3.50 | % |  | 3.50 | % |  | 2.86 | % |  | 2.79 | % |  | 2.58 | % |  | — | % |  | — | % |  | — | %
ESOP growth rate |  | — | % |  | — | % |  | — | % |  | — | % |  | — | % |  | — | % |  | 10.00 | % |  | 10.00 | % |  | 10.00 | %
Medical cost trend rate of increase |  | — | % |  | — | % |  | — | % |  | — | % |  | — | % |  | — | % |  | 6.00 | % |  | 6.00 | % |  | 6.33 | %
Interest Crediting Rate |  | 4.26 | % |  | 3.73 | % |  | 4.27 | % |  | 0.85 | % |  | 0.85 | % |  | 0.65 | % |  | — | % |  | — | % |  | — | %
Effective January 1, 2018, as required, the Company adopted ASU No. 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” on a retrospective basis. As a result, for all periods presented, only the service related component of pension and other postretirement benefit costs is included in Operating profit. The non-service related components (interest cost, expected return on assets and amortization of actuarial gains and losses) are included in a new line item, “Non-service related postretirement costs,” which is below Operating profit. Adoption of this standard had no effect on Net income attributable to Colgate-Palmolive Company, Earnings per common share or Cash flow. See Note 2, Summary of Significant Accounting Policies to the Consolidated Financial Statements for additional information. Other postretirement charges in 2019, 2018 and 2017 include pension and other benefit enhancements amounting to $7, $9 and $21 respectively, incurred pursuant to the Global Growth and Efficiency Program. Other postretirement charges in 2019 and 2018 also include charges of $1 and $2, respectively, in part due to retirements under the Global Growth and Efficiency Program. The Company made voluntary contributions of $113, $67 and $81 in 2019, 2018 and 2017, respectively, to its U.S. retirement plans. Expected Contributions and Benefit Payments The Company does not expect to make any voluntary contributions to its U.S. postretirement plans for the year ending December 31, 2020. Actual funding may differ from current estimates depending on the variability of the market value of the assets as compared to the obligation and other market or regulatory conditions. Benefit payments expected to be paid from the Company's assets to participants in unfunded plans are estimated to be approximately $55 for the year ending December 31, 2020. Total benefit payments expected to be paid to participants in both funded and unfunded plans are estimated as follows:
|  | Pension Plans |  |  |  |
Years Ended December 31, |  | United States |  | International |  | Other Retiree Benefit Plans |  | Total
2020 |  | $ | 146 |  |  | $ | 36 |  |  | $ | 49 |  |  | $ | 231 |
2021 |  | 147 |  |  | 37 |  |  | 50 |  |  | 234 |
2022 |  | 151 |  |  | 37 |  |  | 51 |  |  | 239 |
2023 |  | 149 |  |  | 39 |  |  | 52 |  |  | 240 |
2024 |  | 152 |  |  | 42 |  |  | 53 |  |  | 247 |
2025-2029 |  | 722 |  |  | 219 |  |  | 272 |  |  | 1,213 |

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration