COLGATE PALMOLIVE CO

Condensed Consolidated Statements of Comprehensive Income

Condensed Consolidated Balance Sheets

Condensed Consolidated Statements of Cash Flows

Condensed Consolidated Statements of Changes in Shareholders’ Equity

(1) Accumulated other comprehensive income (loss) includes cumulative translation losses of $3,343 at March 31, 2026 ($3,575 at March 31, 2025) and $3,351 at December 31, 2025 ($3,687 at December 31, 2024), and unrecognized retirement plan and other retiree benefits costs of $589 at March 31, 2026 ($600 at March 31, 2025) and $583 at December 31, 2025 ($605 at December 31, 2024).

Notes to Condensed Consolidated Financial Statements

1. Basis of Presentation

The Condensed Consolidated Financial Statements reflect all normal recurring adjustments which, in management’s opinion, are necessary for a fair statement of the results for interim periods. Results of operations for interim periods may not be representative of results to be expected for a full year. Note that certain columns and rows may not sum due to rounding. Colgate-Palmolive Company (together with its subsidiaries, the “Company” or “Colgate”) reclassifies certain prior year amounts, as applicable, to conform to the current year presentation.

For a complete set of financial statement notes, including the Company’s significant accounting policies, refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”).

2. Use of Estimates

Provisions for certain expenses, including income taxes, advertising and consumer promotion, are based on full year assumptions and are included in the accompanying Condensed Consolidated Financial Statements in proportion with estimated annual tax rates, the passage of time or estimated annual sales, as applicable.

3. Recent Accounting Pronouncements

There have been no accounting pronouncements issued or effective during 2026 that have had, or are expected to have, a material impact on the Company’s Consolidated Financial Statements.

4. Acquisitions

On April 30, 2025, the Company acquired Care TopCo Pty Ltd, the owner of the Prime100 pet food business, for cash consideration of AU $471 (approximately $301). This acquisition provides the Company’s Hill’s Pet Nutrition segment with an entry into the fast-growing fresh pet food category in Australia. The acquisition was financed with a combination of debt and cash and was accounted for as a business combination in accordance with ASC 805.

The total purchase price of $301 has been allocated to the net assets acquired based on their respective estimated fair values as follows:

Goodwill of $207 was allocated to the Hill’s Pet Nutrition segment. The Company expects that goodwill will be deductible for tax purposes. Other intangible assets acquired include trademarks, customer relationships and product formulations, which have useful lives ranging from five to 20 years.

The preliminary estimates of the fair value of identifiable assets acquired and liabilities assumed are subject to revisions, which may result in adjustments to the preliminary values discussed above. The Company expects to finalize the purchase price allocation in the second quarter of 2026.

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

5. Restructuring and Related Implementation Charges

Strategic Growth and Productivity Program

On July 31, 2025, the Company’s Board of Directors (the “Board”) approved athree-year productivity program to drive future growth and support the Company’s 2030 strategy (the “Strategic Growth and Productivity Program”). The program includes initiatives to better align the Company’s organizational structure to support its strategic initiatives, optimize the Company’s global supply chain to drive agility and efficiencies and simplify and streamline its organizational structure to reduce overhead costs.

Building on the successful implementation of the Strategic Growth and Productivity Program to date, on April 30, 2026, the Company's Board approved an expansion of the program to continue to align the Company's operations to drive future growth and support the Company’s 2030 strategy.

The Strategic Growth and Productivity Program is now estimated to result in cumulative pre-tax charges, once all initiatives are approved and implemented, totaling between $350 and $550, increased from $200 to $300. These pre-tax charges are currently estimated to be comprised of the following: employee-related costs, including severance and other termination benefits (70% to 80%) and asset-related costs and other charges (20% to 30%), which include accelerated depreciation, asset write-downs, contract termination and other exit costs. It is estimated that approximately 80% to 90% of the charges will result in cash expenditures and substantially all charges resulting from the program will be incurred by December 31, 2028.

It is now estimated that the cumulative pre-tax charges, once all projects are approved and implemented, will relate to initiatives undertaken in North America (5% to 10%), Latin America (15% to 20%), Europe, Middle East & Africa (“EMEA”) (25% to 30%), Asia Pacific (10% to 15%), Hill’s Pet Nutrition (10% to 15%) and Corporate (20% to 25%).

For the three months ended March 31, 2026, charges resulting from the Strategic Growth and Productivity Program are reflected in the income statement as follows:

Restructuring and related implementation charges 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 Strategic Growth and Productivity Program relate to initiatives undertaken by the following reportable operating segments and Corporate:

Since the inception of the Strategic Growth and Productivity Program, the Company has incurred cumulative pre-tax charges of $189 ($149 after-tax) in connection with the implementation of various projects as follows:

The following table summarizes the activity for the restructuring accrual:

Employee-Related Costs primarily include severance and other termination benefits and are calculated based on long-standing benefit practices, written severance policies, local statutory requirements and, in certain cases, voluntary termination arrangements. Employee-Related Costs also include postretirement benefit enhancements of $5 for the three months ended March 31, 2026, which are reflected as Charges against assets and liabilities within Employee-Related Costs in the preceding table as the corresponding balance sheet amounts are reflected as an increase in postretirement liabilities.

6. Inventories

Inventories by major class were as follows:

7. Earnings Per Share

For the three months ended March 31, 2026 and 2025, earnings per share were as follows:

For the three months ended March 31, 2026 and 2025, the average number of stock options and restricted stock units that were anti-dilutive and not included in diluted earnings per share calculations were 1,311,562 and 1,091,727, respectively.

8. Other Comprehensive Income (Loss)

Additions to and reclassifications out of Accumulated other comprehensive income (loss) attributable to the Company for the three months ended March 31, 2026 and 2025 were as follows:

(1)These components of Other comprehensive income (loss) are included in the computation of total pension cost. Refer to Note 9, Retirement Plans and Other Retiree Benefits for additional details.

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

9. Retirement Plans and Other Retiree Benefits

Components of Net periodic benefit cost for the three months ended March 31, 2026 and 2025 were as follows:

(1) Refer to Note 10, Contingencies for information regarding the ERISA litigation matter.

Other postretirement charges for the three months ended March 31, 2026 included other charges of $5, incurred pursuant to the Strategic Growth and Productivity Program.

The U.S. pension plans will require immaterial cash contributions by the Company in 2026. Refer to Note 10, Contingencies for additional information.

10. Contingencies

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, labor and employment, pension and benefits, data privacy and security, environmental and tax matters and consumer class actions. In addition, 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 does not accrue for legal defense costs, which are recognized as incurred when the legal services are provided.

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 reasonably possible 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 $225 (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 range 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 $103. 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.

Following adverse administrative decisions, the Company filed five cases in the Lower Federal Courts in the City of São Paulo (the “Lower Federal Court”) in October 2015, March 2017, October 2018, June 2019 and September 2020. Of those five cases, currentlyone case is pending in the Lower Federal Court andfour cases have been appealed to the Federal Court of Appeals. Of thefour cases pending in the Federal Court of Appeals, one case was appealed by the Brazilian federal government following a ruling in favor of the Company in the Lower Federal Court andthree were appealed by the Company following rulings against the Company in the Lower Federal Court. In December 2025, inone of these three cases, the Federal Court of Appeals ruled against the Company with respect to the deductibility of the corporate income tax for the years 1999 through 2001. The amount at issue in this case, with interest and any court-mandated fees, at the current exchange rate, is approximately $19. The Company filed a motion for clarification with the Federal Court of Appeals, which was denied in April 2026. The Company will seek a further appeal to the Superior Court of Justice. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that it has strong legal grounds to contest these matters, and it is more likely than not that the Company will ultimately prevail. The Company is challenging these matters vigorously.

In July 2002, the Brazilian Federal Public Attorney filed a case against the federal government of Brazil, Laboratorios Wyeth-Whitehall Ltda. (the Brazilian subsidiary of the Seller) and the Company’s Brazilian subsidiary in the Lower Federal Court, 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 case 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 it has strong legal grounds to contest this matter and it is more likely than not that the Company will ultimately prevail. The Company is challenging this matter vigorously.

In December 2005, the Brazilian internal revenue authority issued to the Company’s Brazilian subsidiary a tax assessment with interest and any court-mandated fees of approximately $28, 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. Following adverse administrative decisions, in January 2016, the Company filed a case in the Lower Federal Court. In the event the Company is unsuccessful in this case, further appeals are available. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal counsel, that it has strong legal grounds to contest this matter and it is more likely than not that the Company will ultimately prevail. The Company is challenging this matter vigorously.

Talcum Powder Matters

The Company has been named as a defendant in civil actions alleging that certain of its talcum powder products were contaminated with asbestos and/or caused mesothelioma and other cancers. Many of these actions involve a number of co-defendants from a variety of different industries, including suppliers of asbestos and manufacturers of products that, unlike the Company’s products, were designed to contain asbestos.

As of March 31, 2026, there were 484 individual cases pending against the Company in state and federal courts throughout the United States, as compared to 453 cases as of December 31, 2025. During the three months ended March 31, 2026,74 new cases were filed and 43 cases were resolved by voluntary dismissal, settlement or judgment in favor of the Company. The value of the settlements in the periods presented was not material, either individually or in the aggregate, to such period's results of operations.

The Company and its legal counsel believe that the Company has strong legal grounds to contest these cases and is challenging them vigorously. Given the inherent uncertainties of litigation, the Company cannot predict the outcome of all individual cases pending against it, and is only able to make an estimate for those cases that have advanced to the later stages of legal proceedings. For the remaining cases, the Company includes in the range of reasonably possible losses in excess of accrued liabilities stated above an aggregated amount that takes into account historical outcomes of the Company’s cases.

As of March 31, 2026, a portion of the Company’s costs incurred in defending and resolving these claims has been, and the Company believes will continue to be, covered by insurance policies issued by several primary, excess and umbrella insurance carriers, subject to exhaustion, deductibles, exclusions, retentions, policy limits and insurance carrier insolvencies.

ERISA Matter

In June 2016, a lawsuit was filed in the United States District Court for the Southern District of New York (the “District Court”) against the Colgate-Palmolive Company Employees’ Retirement Income Plan (the “Retirement Plan”), the Company and certain individuals claiming that residual annuity payments associated with a 2005 residual annuity amendment to the Retirement Plan were improperly calculated for certain Retirement Plan participants in violation of the Employee Retirement Income Security Act. The relief sought included recalculation of benefits, pre- and post-judgment interest and attorneys’ fees.

Following adverse decisions by the District Court and the United States Court of Appeals for the Second Circuit, the Company recorded charges to earnings of $267 in the quarter ended March 31, 2023 and $65 in the quarter ended March 31, 2025 to reflect the then current estimated increase in pension plan liability and other related costs. In the three months ended September 30, 2025, the parties entered into a settlement agreement to fully resolve the litigation for $332, inclusive of attorneys’ fees and costs. In January 2026, the District Court granted final approval of the settlement. In February 2026, the District Court granted plaintiffs’ request to allocate $99 of the settlement amount to plaintiffs’ attorneys’ fees and costs. These attorneys’ fees and costs have been paid by the Company, while the remainder of the settlement amount will be funded by the Plan. The litigation resulted in an increase in the obligations of the Retirement Plan and, based on the current funded status of the Retirement Plan, required immaterial cash contributions by the Company in 2025 and will require additional immaterial cash contributions by the Company in 2026.

11. Segment Information

The Company operates intwo product segments: Oral, Personal and Home Care; and Pet Nutrition.

The operations of the Oral, Personal and Home Care product segment are managed geographically infour reportable operating segments: North America, Latin America, EMEA and Asia Pacific.

As part of the Strategic Growth and Productivity Program, to further optimize and leverage the operating scale and drive growth within the Europe and Africa/Eurasia regions, the Company realigned its reportable operating segments effective for the quarter ended March 31, 2026. As a result, the Company combined the results of its Europe and Africa/Eurasia (excluding Russia and Belarus) reportable operating segments and its skin health business (previously within the North America reportable operating segment) into a new EMEA reportable operating segment. In conjunction with this realignment, Russia and Belarus, which were previously reported within the Africa/Eurasia reportable operating segment, are reported within the Asia Pacific reportable operating segment. This reportable operating segment realignment did not impact the Company’s historical consolidated results of operations, financial position or cash flows. The Company has recast its historical geographic segment information to conform to the new reporting structure. As a result of this reporting structure realignment, the Company reallocated goodwill of approximately $19 from the EMEA segment to the Asia Pacific segment. In conjunction with this reporting structure realignment, the Company completed an assessment indicating no goodwill impairment existed as a result of this new segment reporting structure.

The Company evaluates segment performance based on several factors, including Operating profit. The Company uses Operating profit as a measure of operating segment performance because it excludes the impact of Corporate-driven decisions related to interest expense and income taxes. The Chairman of the Board, President and Chief Executive Officer has been determined to be the Company’s Chief Operating Decision Maker and he uses Operating Profit to assess performance and to allocate resources for each of the reportable operating segments in the budgeting and forecasting process. Asset information by segment is not utilized for purposes of assessing performance or allocating resources, and therefore such information has not been presented.

The accounting policies of the operating segments are generally the same as those described in Note 2, Summary of Significant Accounting Policies to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Intercompany sales have been eliminated. Corporate operations include costs related to stock options and restricted stock units, research and development costs, Corporate overhead costs, restructuring and related implementation charges and gains and losses on sales of non-core product lines and assets. The Company reports these items within Corporate operations as they relate to Corporate-based responsibilities and decisions and are not included in the internal measures of segment operating performance used by the Company to measure the underlying performance of the operating segments.

Approximately two-thirds of the Company’s Net sales are generated from markets outside the U.S., with approximately 45% of the Company’s Net sales coming from emerging markets (which consist of Latin America, Asia (excluding Japan), Africa, the Middle East and Eastern and Central Europe).

Corporate Operating profit (loss) for the three months ended March 31, 2026 included charges resulting from the Strategic Growth and Productivity Program of $171. Corporate Operating profit (loss) for the three months ended March 31, 2025 included charges resulting from the ERISA litigation matter of $15.

The Company’s Net sales, significant segment expenses and operating profit, by reportable segment were:

(1)Other (income) expense, net primarily includes amortization of intangible assets and equity income.

(1)Other (income) expense, net primarily includes amortization of intangible assets and equity income.

The Company’s Net sales of Oral, Personal and Home Care and Pet Nutrition products accounted for the following percentages of the Company’s Net sales:

Capital expenditures and depreciation and amortization expense by segment were:

12. Fair Value Measurements and Financial Instruments

The Company uses available market information and other valuation methodologies in assessing the fair value of financial instruments. Judgment is required in interpreting market data to develop the estimates of fair value and, accordingly, changes in assumptions or the estimation methodologies may affect the fair value estimates. The Company is exposed to the risk of credit loss in the event of nonperformance by counterparties to financial instrument contracts; however, nonperformance is considered unlikely and any nonperformance is unlikely to be material, as it is the Company’s policy to contract only with diverse, credit-worthy counterparties based upon both strong credit ratings and other credit considerations.

The Company is exposed to market risk from foreign currency exchange rates, interest rates and commodity price fluctuations. Volatility relating to these exposures is managed on a global basis by utilizing a number of techniques, including working capital management, sourcing strategies, selling price increases, selective borrowings in local currencies and entering into selective derivative instrument transactions, issued with standard features, in accordance with the Company’s treasury and risk management policies, which prohibit the use of derivatives for speculative purposes and leveraged derivatives for any purpose. The Company’s policy is to enter into derivative instrument contracts with terms that match the underlying exposure being hedged.

The Company’s derivative instruments include foreign currency contracts and commodity contracts. The Company utilizes foreign currency contracts, including forward and swap contracts, local currency deposits and local currency borrowings to hedge portions of its foreign currency purchases, assets and liabilities arising in the normal course of business and the net investment in certain foreign subsidiaries. These contracts are valued using observable market rates (Level 2 valuation). Commodity futures contracts are utilized to hedge the purchases of raw materials used in production. These contracts are measured using quoted commodity exchange prices (Level 1 valuation). The duration of foreign currency and commodity contracts generally does not exceed 12 months.

The following table summarizes the fair value of the Company’s derivative instruments and other financial instruments which are carried at fair value in the Company’s Condensed Consolidated Balance Sheets at March 31, 2026 and December 31, 2025:

The carrying amount of cash, cash equivalents, marketable securities and accounts receivable approximated fair value as of March 31, 2026 and December 31, 2025. The estimated fair value of the Company’s total debt as of March 31, 2026 and December 31, 2025, was $7,453 and $7,518, respectively, and the related carrying value was $7,973 and $7,988, respectively. The estimated fair value of long-term debt was derived principally from quoted prices on the Company’s outstanding fixed-term notes (Level 2 valuation).

The following tables present the notional values as of:

The amount of gain (loss) recognized in income associated with fair value hedges did not have a material impact on the Company’s Condensed Consolidated Financial Statements during the three months ended March 31, 2026 and 2025.

The amount of gain (loss) recognized in income and Accumulated Other Comprehensive Income (AOCI) associated with cash flow hedges did not have a material impact on the Company’s Condensed Consolidated Financial Statements during the three months ended March 31, 2026 and 2025.

The following table presents the amount of gain (loss) on net investment hedges recognized in the Company’s AOCI for the three months ended March 31, 2026 and 2025:

13. Supplier Finance Program

The Company has agreements to provide supplier finance programs which facilitate participating suppliers’ ability to finance payment obligations of the Company with designated third-party financial institutions. Participating suppliers may, at their sole discretion, elect to finance one or more payment obligations of the Company prior to their scheduled due dates at a discounted price to participating financial institutions. The Company’s obligations to its suppliers, including amounts due and scheduled payment dates, are not impacted by suppliers’ decisions to finance amounts under these arrangements. The outstanding payment obligations under the Company’s supplier finance programs are included in Accounts payable in the Condensed Consolidated Balance Sheets and were $201 and $177 as of March 31, 2026 and December 31, 2025, respectively.

14. Income Taxes

The effective income tax rate was 23.6% for the first quarter of 2026 as compared to 23.7% for the first quarter of 2025. The quarterly provision for income taxes is determined based on the Company’s estimated full year effective income tax rate adjusted by the amount of tax attributable to infrequent or unusual items that are separately recognized on a discrete basis in the income tax provision in the quarter in which they occur. The Company’s current estimate of its full year effective income tax rate before discrete period items is 23.6%, as compared to 23.7% in the comparable period of 2025.

On July 4, 2025, U.S. tax legislation was signed into law (known as the “One Big Beautiful Bill Act” or “OBBBA”) which made permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the OBBBA made changes to certain U.S. corporate tax provisions, many of which were effective beginning January 1, 2026. The OBBBA did not have a material effect on the Company’s Consolidated Financial Statements for the quarter ended March 31, 2026.

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

On December 15, 2022, the 27 member states of the European Union (“EU”) reached an agreement to establish a minimum level of taxation for certain large corporations by paying a minimum corporate tax rate of 15% in every jurisdiction in which they operate. This agreement, which is part of the Pillar II Model Rules initiative (“Pillar II”) agreed by all members of the Organization for Economic Cooperation and Development (“OECD”) and its Inclusive Framework (“IF”), was transposed into the laws of most EU member states by December 31, 2023. Subsequently, many other jurisdictions outside the EU have enacted similar minimum tax regimes consistent with the policy of Pillar II.

Based on current legislation and available guidance, apart from the significant additional time and resources required to comply, Pillar II did not have a material impact to the Company’s Consolidated Financial Statements for the quarter ended March 31, 2026 and the Company does not believe it will have a material impact going forward.

On January 5, 2026, IF reached an agreement known as the “Side-by-Side Package” that modifies key aspects of Pillar II and was effective beginning January 1, 2026. The Company is currently evaluating the potential impact of the Side-by-Side Package on its future tax liability and compliance burden. The Side-by-Side Package introduces various new safe harbors that the Company is expected to be eligible for and that, when fully enacted, should result in a reduction of compliance costs of Pillar II, among other benefits. However, as these rules and related regulations are revised and implemented, the Company will evaluate the impact, if any, on its Consolidated Financial Statements.

The Company has ongoing federal, state and international income tax audits in various jurisdictions and evaluates uncertain tax positions that may be challenged by local tax authorities and not fully sustained. All U.S. federal income tax returns through December 31, 2013 have been audited by the IRS and there are limited matters which the Company plans to appeal for years 2010 through 2013. One such matter relates to the IRS assessment of taxes on the Company by imputing income on certain activities within one of our international operations, which is also under audit for the years 2014 through 2018. There were U.S. Tax Court rulings during 2023 in favor of the IRS against two unrelated third parties on similar matters. In October 2025, in one of those cases, the applicable U.S. Court of Appeals reversed the U.S. Tax Court’s decision and ruled in favor of the taxpayer. The case involving the other third party is still pending. The Company continues to believe that the tax assessment against the Company is without merit. While there can be no assurances, the Company believes this matter will ultimately be decided in favor of the Company. The amount of tax plus interest for the years 2010 through 2021 is estimated to be approximately $168, which is not included in the Company’s uncertain tax positions. In May 2024, the IRS initiated an audit for the years 2019 through 2021, which is still ongoing.

Executive Overview

Business Organization

Colgate-Palmolive Company (together with its subsidiaries, “we,” “us,” “our,” the “Company” or “Colgate-Palmolive”) is a caring, innovative growth company united behind our purpose to reimagine a healthier future for all people, their pets and our planet. To achieve our business and financial objectives and deliver peer-leading performance and total shareholder return, we are focused on driving organic sales growth; delivering consistent, compounded earnings per share growth; achieving operational efficiencies; and driving growth in free cash flow along with the efficient use of our balance sheet.

We are tightly focused on two product segments: Oral, Personal and Home Care; and Pet Nutrition. Within these segments, we follow a closely defined business strategy to grow our key product categories and increase our overall market share. Within the categories in which we compete, we prioritize our efforts based on their capacity to maximize the use of the organization’s core competencies and strong global equities and to deliver sustainable, profitable long-term growth.

Operationally, we are organized along geographic lines with management teams having responsibility for the business and financial results in each region. We compete in more than 200 countries and territories worldwide with established businesses in all regions contributing to our sales and profitability. Approximately two-thirds of our Net sales are generated from markets outside the United States, with approximately 45% of our Net sales coming from emerging markets (which consist of Latin America, Asia (excluding Japan), Africa, the Middle East and Eastern and Central Europe). This geographic diversity and balance help to reduce our exposure to business and other risks in any one country or part of the world.

The Oral, Personal and Home Care product segment is managed geographically in four reportable operating segments: North America, Latin America, Europe, Middle East & Africa (“EMEA”) and Asia Pacific, all of which sell primarily to a variety of retailers, wholesalers, distributors, dentists and, in some geographies, skin health professionals. Through Hill’s Pet Nutrition, we also compete on a worldwide basis in the pet nutrition market, selling products principally through authorized pet supply retailers, veterinarians and eCommerce retailers. We also sell certain of our products direct-to-consumer. We are engaged in manufacturing and sourcing of products and materials on a global scale and have major manufacturing facilities, warehousing facilities and distribution centers in every region around the world.

As part of the Strategic Growth and Productivity Program, to further optimize and leverage the operating scale and drive growth within the Europe and Africa/Eurasia regions, we realigned our reportable operating segments effective for the quarter ended March 31, 2026. As a result, we have combined the results of our Europe and Africa/Eurasia (excluding Russia and Belarus) reportable operating segments and our skin health business (previously within the North America reportable operating segment) into a new EMEA reportable operating segment in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026. In conjunction with this realignment, Russia and Belarus, which were previously reported within the Africa/Eurasia reportable operating segment, are reported within the Asia Pacific reportable operating segment. This reportable operating segment realignment did not impact our historical consolidated results of operations, financial position or cash flows. We have recast our historical geographic segment information to conform to the new reporting structure.

On an ongoing basis, management focuses on a variety of key indicators to monitor business health and performance. These indicators include net sales (including volume, pricing and foreign exchange components), organic sales growth (net sales growth excluding the impact of foreign exchange, acquisitions and divestments), a non-GAAP financial measure, and gross profit margin, selling, general and administrative expenses, operating profit, net income and earnings per share, in each case, on a GAAP and a non-GAAP basis, as well as measures used to optimize the management of working capital, capital expenditures, cash flow and return on capital. In addition, we review market share, household penetration and other data to assess how our brands are performing within their categories on a global and regional basis. The monitoring of these indicators and our Code of Conduct and corporate governance practices help to maintain business health and strong internal controls. For additional information regarding non-GAAP financial measures and the Company’s use of market share data and the limitations of such data, see “Non-GAAP Financial Measures” and “Market Share Information” below.

Global Trade Relations

Major developments in trade relations, including the imposition of new or increased tariffs by the United States and/or other countries, such as China and Ecuador, have contributed to and are expected to continue to contribute to inflationary pressures, geopolitical tensions and macroeconomic and market volatility. These developments have also impacted and may continue to impact consumer sentiment, consumption, discretionary spending and/or purchasing patterns. In addition, they have impacted and may continue to impact the cost and/or availability of raw and packaging materials and the price of our products. While we have made and will continue to make efforts to mitigate the impact of these and any additional tariffs imposed by the United States and/or other countries or shifts in trade agreements, they or our mitigating actions could have a material effect on our business, results of operations, cash flows and financial condition. For additional information, see “Outlook” below.

The War in Ukraine

The war in Ukraine, and the related geopolitical tensions, have had and continue to have a significant impact on our operations in Ukraine and Russia, though it has not been material to our Consolidated Financial Statements. We have experienced, and expect to continue to experience, risks related to the impact of the war in Ukraine, including increases in the costs and, in certain cases, limitations on the availability of certain raw and packaging materials and commodities (including oil and natural gas), supply chain and logistics challenges, import restrictions, foreign currency volatility and reputational concerns. We also have faced and continue to face challenges to our ability to repatriate cash from Russia and identify banking partners to support our Russian operations and we may face challenges to our ability to protect our assets in Russia. We also continue to monitor the impact of sanctions, export controls and import restrictions.

The Conflict in the Middle East

The conflict in the Middle East, including between the United States and Iran, has had and may continue to have macroeconomic impacts, such as heightened inflationary pressures and increased capital markets and foreign exchange volatility. It did not have a material impact on our Consolidated Financial Statements for the quarter ended March 31, 2026. The conflict has negatively impacted and/or may in the future negatively impact, among other things, supply chain and logistics, the availability and price of raw and packaging materials and commodities (particularly oil, resin and agricultural products), consumer sentiment and consumption and category growth rates. The full impact of the conflict on our business may not be fully realized for some time due to, among other things, our mitigation efforts, contingency plans and procurement processes.

For more information about factors that could impact our business, including with respect to global trade relations, the war in Ukraine and the conflict in the Middle East, refer to Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025.

Business Strategy

Our 2030 strategy, which builds on the success of our 2025 strategy that concluded last year, is intended to deliver consistent, compounded earnings per share growth over the long term and to accelerate Net sales and organic sales growth through several key initiatives. These initiatives include leveraging the global reach and penetration of our brands; building the incremental benefit of superior, science-based innovation supported by an agile and resilient supply chain; harnessing the power of best-in-class omni-channel demand generation; leading in capabilities such as data, analytics and artificial intelligence (“AI”); and evolving our high-impact, inclusive culture.

Additionally, on July 31, 2025, our Board of Directors (the “Board”) approved a three-year productivity program to drive future growth and support our 2030 strategy (the “Strategic Growth and Productivity Program”). The program includes initiatives to better align our organizational structure to support our strategic initiatives, optimize our global supply chain to drive agility and efficiencies and simplify and streamline our organizational structure to reduce overhead costs. Building on the successful implementation of the Strategic Growth and Productivity Program to date, on April 30, 2026, our Board approved an expansion of the program to continue to align our operations to drive future growth and support our 2030 strategy. The Strategic Growth and Productivity Program is now estimated to result in cumulative pre-tax charges, once all initiatives are approved and implemented, of between $350 and $550, increased from $200 to $300. It is estimated that substantially all charges will be incurred by December 31, 2028. Annualized pre-tax savings are projected to be in the range of $200 to $300, once all projects are approved and implemented. For more information regarding the Strategic Growth and Productivity Program, see “Restructuring and Related Implementation Charges” below.

The investments needed to drive growth are also supported through continuous, company-wide initiatives to lower costs and increase effective asset utilization. Through these initiatives, which are referred to as our funding-the-growth initiatives, we seek to become even more effective and efficient throughout our businesses. These initiatives are designed to reduce costs associated with direct materials, indirect expenses, distribution and logistics and advertising and promotional materials, among other things, and encompass a wide range of projects, examples of which include raw material substitution, reduction of packaging materials, consolidating suppliers to leverage volumes and increasing manufacturing efficiency through SKU reductions and formulation simplification.

We believe strong free cash flow performance is a key priority to invest for future growth and superior total shareholder return. We achieve this through increasing net income, optimizing working capital and through high return capital expenditures focused on growth and profitability.

The efficient use of our balance sheet, including prudent management of our capital structure, is also critical. We continue to prioritize our investments in high growth and high margin segments within our Oral Care, Personal Care and Pet Nutrition businesses and to make careful decisions about our brand portfolio. Finally, we drive additional value to shareholders by returning cash through dividends and ongoing share repurchases.

Significant Items Impacting Comparability

On July 31, 2025, our Board approved the Strategic Growth and Productivity Program, which the Board approved an expansion of on April 30, 2026 to continue to align our operations to drive future growth and support our 2030 strategy. In the three months ended March 31, 2026, we incurred pre-tax costs of $176 (after-tax costs of $138) resulting from the Strategic Growth and Productivity Program. Refer to “Restructuring and Related Implementation Charges” below and Note 5, Restructuring and Related Implementation Charges to the Condensed Consolidated Financial Statements for additional information.

On April 30, 2025, we acquired Care TopCo Pty Ltd, the owner of the Prime100 pet food business, for cash consideration of AU $471 (approximately $301). This acquisition provides our Hill’s Pet Nutrition segment with an entry into the fast-growing fresh pet food category in Australia. Refer to Note 4, Acquisitions to the Condensed Consolidated Financial Statements for additional information.

During the quarter ended March 31, 2025, we recorded a charge of $65 following a decision of the United States Court of Appeals for the Second Circuit affirming the ruling of the United States District Court for the Southern District of New York (the “District Court”) on certain calculation issues related to the District Court’s earlier grant of summary judgment to the plaintiffs in a lawsuit under the Employee Retirement Income Security Act (“ERISA”), seeking the recalculation of benefits and other relief associated with a 2005 residual annuity amendment to the Colgate-Palmolive Company Employees’ Retirement Income Plan (the “Retirement Plan”). The decision resulted in an increase in the obligations of the Retirement Plan. Refer to Note 10, Contingencies to the Condensed Consolidated Financial Statements for additional information.

Outlook

Looking forward, we expect global macroeconomic, geopolitical and market conditions to remain challenging, including as a result of the conflict in the Middle East and developments in trade relations (such as the imposition of new or increased tariffs and the ongoing implementation and potential renegotiation of the United States-Mexico-Canada Agreement). We expect these conditions to impact, or to continue to impact, among other things, supply chain and logistics, the availability and price of raw and packaging materials and commodities (particularly oil, resin and agricultural products), consumer sentiment and purchasing patterns, consumption and category growth rates. We also expect these conditions to continue to contribute to inflationary pressures and macroeconomic and market volatility. We continue to follow these situations closely, to take actions in an effort to mitigate their negative impacts and to evaluate their impact on our business, results of operations, cash flows and financial condition.

In this uncertain and challenging macroeconomic and geopolitical environment, we anticipate consumers may forgo purchasing certain of our products or switch to “private label” or to our lower-priced product offerings. Although we continue to devote significant resources to support our brands and market our products at multiple price points, demand for and sales volumes of our categories and/or our products may decline or shift from higher margin to lower margin product offerings. We expect the softness across our categories that we witnessed in 2025 to continue into 2026.

Given that approximately two-thirds of our Net sales originate in markets outside the United States, we have experienced and will likely continue to experience volatile foreign currency fluctuations. This is particularly acute in hyper-inflationary economies, including Argentina, Nigeria and Türkiye.

We continue to experience higher raw and packaging material costs, including the impact of transactional foreign exchange. We have taken, and will continue to take, measures to mitigate the effect of these conditions, such as our funding-the-growth and revenue growth management initiatives and the Strategic Growth and Productivity Program. However, in the current environment it may become increasingly difficult to implement certain of these mitigation strategies. Additionally, inflation has impacted the broader economy with consumers in many geographies around the world facing widespread rising prices as well as high interest rates. Should these conditions persist, they could adversely affect our future results.

We face vigorous competition worldwide, including from strong local competitors (including private label competitors) and from other companies, some of which have greater resources than we do. In addition, the substantial growth of eCommerce and the emergence and adoption of social commerce and AI have encouraged the entry of new competitors, some of which sell products direct-to-consumer. We face competition in several aspects of our business, including pricing, promotional activities, new product introductions and expansion into new geographies and channels.

Our products are sold in a highly competitive omni-channel marketplace that is increasingly defined by the integration of traditional and digital retail operations and evolving consumer purchasing behavior and preferences, as consumers continue to shop online and increasingly through social commerce and with the assistance of AI. The increased presence of alternative retail channels, such as subscription services and direct-to-customer businesses, has also intensified competition for consumer attention. While we continue to sell our products to a variety of customers, including large-format retailers, discounters and eCommerce retailers, our growth is increasingly dependent on our ability to generate consumer demand across key touchpoints in the omni-channel ecosystem whether through traditional retail, eCommerce, social media or digital. We are also increasingly dependent upon certain key retailers, some of which exercise greater bargaining strength than we do, including the exclusive access to valuable first-party consumer data and analytics.

We continue to closely monitor the impact of geopolitical events and tensions, wars and military conflicts, including in Ukraine and the Middle East, developments in trade relations and the challenging market conditions discussed above on our business and the related uncertainties and risks. While we have taken, and will continue to take, measures to mitigate the effects of these events and conditions, we cannot estimate with certainty the full extent of their impact on our business, results of operations, cash flows and/or financial condition. For more information about factors that could impact our business, see “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

Looking forward, we believe our new 2030 business strategy and the Strategic Growth and Productivity Program will help ensure that we have the right capabilities and support to achieve our goals in the near term and deliver consistent, compounded earnings per share growth over the long term. We believe our 2030 strategic priorities of leveraging the global reach and penetration of our brands; building the incremental benefit of superior, science-based innovation supported by an agile and resilient supply chain; harnessing the power of best-in-class omni-channel demand generation; leading in capabilities such as data, analytics and AI; and evolving our high-impact, inclusive culture are the keys to accelerating growth going forward. Our commitment to these priorities, the strength of our brands, our resilient global supply chain, the breadth of our global footprint and a commitment to profitability and driving efficiency in cash generation should position us well to manage through the challenges we face and increase shareholder value over time.