Colgate:

Global Strategies,
Local Strength
2010 Annual Report
 Colgate:
Global Strategies,
Local Strength
u Succeeding With Consumers,
The Profession And Our

Customers
u Innovating Everywhere

u Effectiveness And Efficiency

In Everything
u Strengthening Leadership

Worldwide
Colgate-Palmolive Company is a $15.6 billion global company
serving people in more than 200 countries and territories with
consumer products that make lives healthier and more enjoyable.
The Company focuses on strong global brands in its core busi-
nesses – Oral Care, Personal Care, Home Care and Pet Nutrition.
Colgate follows a tightly defined strategy to grow market shares
for key products, such as toothpaste, toothbrushes, bar and liquid
soaps, deodorants/antiperspirants, dishwashing detergents,
household cleaners, fabric conditioners and specialty pet food.

Cover: Photo taken in Chengdu City, Sichuan Province, China

Contents:
2 Financial Highlights 20 Colgate’s Corporate
4 Dear Colgate Shareholder Governance Commitment
8 Succeeding With Consumers 21 Your Board Of Directors
10 Succeeding With The Profession 22 Your Management Team
12 Succeeding With Our Customers 23 Non-GAAP Reconciliation
14 Innovating Everywhere Of Financial Measures
16 Effectiveness And Efficiency 24 Global Financial
In Everything Review/Form 10-K
18 Strengthening Leadership IBC Shareholder Information
Worldwide

t Mexico
 Financial Highlights 2006
Net Sales ($ millions)
$12,238
2006
2007 $13,790
2007
2008 $15,330
2008
2009 $15,327
2009
2010 $15,564
2010

Advertising ($ millions)
(Dollars in Millions Except Per Share Amounts) 2010* 2009 Change
2006 $1,320
2005
2007 $1,546
Worldwide Sales 2006 $ 15,564 $ 15,327 +1.5% 2008 $1,650
Unit Volume 2007 +3.0% $1,534
2009
Gross Profit Margin 2008 59.1% 58.8% +30 basis points
2010 $1,656
Operating Profit 2009 $ 3,489 $ 3,615 -3%
Operating Profit Margin 22.4% 23.6% -120 basis points
Net Income Attributable to Colgate-Palmolive Company $ 2,203 $ 2,291 -4%
Dividends Paid (per common share)
Net Income Attributable to Colgate-Palmolive Company Percent to Sales 14.2% 14.9% -70 basis points 2006
2006 $1.25
Diluted Earnings Per Share $ 4.31 $ 4.37 -1% 2007
2007 $1.40
Dividends Paid Per Share $ 2.03 $ 1.72 +18% 2008
2008 $1.56
Operating Cash Flow $ 3,211 $ 3,277 -2% 2009
2009 $1.72
Number of Registered Common Shareholders 29,900 30,600 -2% 2010
2010 $2.03
Number of Common Shares Outstanding (in millions) 495 494 –
Year-end Stock Price $ 80.37 $ 82.15 -2%

Gross Profit Margin and Additional Information* (% of sales)

Highlights
2006 54.8% 56.4%*
u Worldwide sales rose 1.5% to an all-time record level.
u Gross profit margin increased 30 basis points to an all-time u South Africa 2007 56.2% 57.3%*
* Excludes restructuring and implementation-related charges related to the
2008 56.7%*
record high of 59.1%. 56.3% 2004 Restructuring Program. A complete reconciliation between reported
2009 results (GAAP) and results excluding charges under the 2004 Restructuring
u Global advertising increased 8% to $1,656 million. 58.8%
Program and other items (Non-GAAP), including a description of such items,
u Operating cash flow declined only 2% when compared with 2010 59.1% is available on Colgate’s web site and on page 23 of this report.
the record 42% growth achieved in 2009.
u The quarterly dividend rate increased by 20% in 2010.
Operating Profit and Additional Information* ($ millions)
* 2010 excludes a one-time charge related to the transition to
2006 $2,218 $2,566* hyperinflationary accounting in Venezuela and certain other 2010 items.
2007 $2,720 $2,959* Years 2006-2008 exclude restructuring and implementation-related charges
related to the 2004 Restructuring Program and other items that pertain
2008 $3,101 $3,265* only to 2006 and 2007. A complete reconciliation between reported
2009 $3,615
results (GAAP) and results excluding these items (Non-GAAP), including a
description of such items, is available on Colgate’s web site and on page 23
2010 $3,489 $3,796* of this report.

Diluted Earnings Per Share and Additional Information*

* 2010 excludes a one-time charge related to the transition to
2006 $2.46 $2.91* hyperinflationary accounting in Venezuela and certain other 2010 items.
* Net income attributable to Colgate-Palmolive Company and diluted earnings
per share in 2010 include a one-time aftertax charge of $271 million ($0.53 per 2007 $3.20 $3.38*
Years 2006-2008 exclude restructuring and implementation-related charges
share) related to the transition to hyperinflationary accounting in Venezuela as related to the 2004 Restructuring Program and other items that pertain
2008 $3.66 $3.87* only to 2006 and 2007. A complete reconciliation between reported
of January 1, 2010 and certain other items. A complete reconciliation between
reported results (GAAP) and results excluding the Venezuela hyperinflationary results (GAAP) and results excluding these items (Non-GAAP), including a
2009 $4.37
charge and other items (Non-GAAP), including a description of such items, is description of such items, is available on Colgate’s web site and on page 23
available on Colgate’s web site and on page 23 of this report.
2010 $4.31 $4.84* of this report.

2 2010 Annual Report 2010 Annual Report 3

 A. Emerging markets, which now represent half of our global sales, have been
a very important part of our growth for a long time, and we think our history
there positions us well to accelerate that growth going forward. We have

Dear Colgate Shareholder...

been in Latin America for over 75 years and in Greater Asia for over 50
years. By being there early, Colgate has built brand loyalty and, of course,
leading market positions. This is particularly true with toothpaste and
the entire oral care category. Our deep understanding of local tastes
and habits across categories, combined with our proven disciplined
global execution, we believe, gives us a significant competitive edge.
Additionally, as part of our global strategy, we have developed
strong relationships with dental professionals. This strategy has con-
tributed greatly to increasing professional recommendations for our
brands. In Brazil, 77% of professionals are now recommending Colgate
On the following pages, Ian Cook, Chairman, President and CEO, answers ahead of any other brand, in India 81% and in China 85%.
questions often asked by our shareholders regarding our business results, key We are also committed to building consumption in emerging mar-
strategic initiatives and the Company’s prospects for future growth.* kets by educating consumers in these areas of the world about better
oral hygiene and skin cleansing habits because we know that once
Q. Please comment on the Company’s 2010 global business results. people adopt those behaviors they stay with them for a lifetime. Indeed,
A. We are pleased to have achieved another year of double-digit earnings per our “Bright Smiles, Bright Futures” oral health education program has now
share growth in 2010, despite difficult economic conditions and aggressive com- reached over half a billion children in 80 countries since the program began
petitive activity around the world. Global sales rose 1.5% to an all-time record twenty years ago.
level, and global unit volume grew 3.0%. Advertising spending behind the Com-
pany’s brands increased 8%, contributing to widespread market share gains in Q. Amid today’s heightened competitive environment, what is Colgate
all of our core categories with our global leadership in toothpaste and manual doing to better connect with consumers?
toothbrushes increasing to all-time highs in 2010. A. When we think about driving our growth with consumers, we focus on
Operating profit, net income and diluted earnings per share all increased targeting our commercial investment to both build brands with our traditional
versus last year’s record levels. Gross profit margin increased 30 basis points to marketing programs and build trial for the new products that we are bringing to
a record 59.1%, driven primarily by the benefits of our many cost-saving pro- the marketplace.
grams around the world, which enabled us to offset higher material costs and Over the last few years, we’ve found that engaging with consumers must
increased promotional investments. include very powerful and effective in-store shopper marketing activities to com-
We maintained our strong balance sheet and cash flow with working plement our advertising in traditional media outlets. Importantly, our integrated
Ian Cook capital held at a very low 0.3% to sales, and cash from operations declined only marketing campaigns are making much greater use of digital tools, such as the
Chairman, President and Chief Executive Officer 2% when compared with last year’s uniquely strong record level. Internet and social media, and even mobile applications. In some countries,
as much as 15% of our media spending is on digital initiatives. As for in-store
Q. Colgate has a long history of strong operating cash flow. What are your activity, one example is using a demonstrator to explain how Colgate
priorities for uses of cash? Sensitive Pro-Relief toothpaste provides instant and lasting relief from
A. At Colgate we maintain as sharp a focus on generating cash as we do on pain caused by tooth sensitivity, while distributing product samples
achieving our profit goals. That has been the case for a very long time, allow- for consumers to try for themselves.
ing us to make uninterrupted dividend payments to our shareholders every year As a result of these types of activities, Colgate’s long-term
since 1895, with dividend payments increasing each year for the past 48 years. global market shares have strengthened despite periods of
And that trend is continuing. In February 2011, we announced a 9% increase in heightened competitive activity. As we enter 2011, we are planning
the quarterly dividend rate, effective in the second quarter of 2011, on top of the for even greater levels of advertising investment, both in and out of the
20% increase that took effect in 2010. store, behind our base business and a robust pipeline of new products, which
Another priority is maintaining flexibility for acquisitions. As in the past, we should continue to strengthen our worldwide market share positions.
will continue to view acquisitions as a strategic endeavor and follow a strictly
disciplined approach when it comes to valuation. Q. Please comment on the Company’s innovation strategy.
Absent an acquisition, we have returned cash to shareholders by repurchas- A. Colgate’s growth is sparked by the innovative products we bring to market in
ing Colgate shares. A year ago, we authorized the buy back of an additional 40 our key product categories, and we continue to be very focused on making sure
* In the questions and answers provided, the Company’s million shares. By the end of 2010, we had bought back 23 million shares under we have innovation at all price points. This strategy offers consumers a choice of
results and outlook are discussed excluding the 2010 one- this program and that pace should continue in 2011. products from entry level to super premium and allows them the opportunity to
time charge related to the transition to hyperinflationary
accounting in Venezuela and certain other items. A complete trade up as disposable income levels rise.
reconciliation between reported results (GAAP) and results Q. Colgate’s long-time presence in emerging markets has been a distinct com- More than ever before, our nine consumer innovation centers, which are
excluding the Venezuela hyperinflationary charge and other
items (Non-GAAP), including a description of such items, is
petitive advantage. What is Colgate’s strategy to drive further growth in these located close to consumers in different parts of the world, are focused on devel-
available on Colgate’s web site and on page 23 of this report. markets? oping insight-driven innovation. These centers are staffed with marketing and

4 2010 Annual Report 2010 Annual Report 5

 Q. Hill’s performance was less robust in 2010 than in prior years. What are the
Growth Highlights Of Five Divisions prospects for this business going forward?
A. While the Hill’s business indeed had a challenging year in 2010, we are en-
couraged that 2011 will bring a return to growth. Our plan to correct pricing and
sizing in the market is complete, and a stream of innovative new products is be-
North America Latin America Europe/South Pacific Greater Asia/Africa Hill’s Pet Nutrition ing introduced at a rapid pace. The launch of Science Plan VetEssentials in Europe
(19% of sales) (27% of sales) (21% of sales) (19% of sales) (14% of sales) is driving market share gains and increasing veterinary recommendation levels.
And, in the U.S., our recent launch of Science Diet Weight Loss System is being
Sales and unit volume
u Sales declined 1.5% in
u Sales declined 1.5% in
u Sales and unit volume
u Sales and unit volume
u supported by a strong integrated marketing campaign, including television, digital
grew 2.0% and 3.5%, 2010 and unit volume 2010 and unit volume grew 13.0% and 10.5%, declined 2.5% and
respectively, in 2010. grew 2.0%. grew 2.0%. respectively, in 2010. 2.0%, respectively,
media and promotional events, which is helping to build consumption weekly.
Operating profit
u Operating profit
u Operating profit
u Operating profit
u in 2010. Looking longer term, opportunity also exists to continue expanding Hill’s
increased 5%. declined 5%. declined 1%. increased 22%. Operating profit
u geographically. Our focused investments in high-growth markets should continue
Colgate Triple Action
u Colgate Sensitive
u Colgate Sensitive
u Colgate Sensitive
u increased 1%.
to drive strong sales growth in those regions well into the future.
and Colgate Sensi- Pro-Relief and Colgate Pro-Relief, Colgate Pro-Relief, Colgate Total Veterinary recommenda-
u
tive MultiProtection Total toothpastes, Sensitive Pro-Relief Whit- and Colgate Herbal Salt tions for the Hill’s brand
toothpastes and the Colgate 360° ActiFlex ening and Colgate Max toothpastes, Colgate remain high worldwide. Q. Please elaborate on how Colgate is strengthening leadership worldwide.
relaunch of Colgate Total
toothpaste contributed
manual toothbrush,
Colgate Plax Complete
White One toothpastes,
Colgate 360° ActiFlex
360° ActiFlex, Colgate
Massager and Colgate
Innovative new products
u
succeeding in the U.S.
A. We have long believed that our Company’s continuing success as a leading
to strength in oral care. Care mouthwash, Pal- manual toothbrush, Twister Gum Care include Science Diet global consumer products company is closely linked to the personal leadership
Colgate’s share of the
u molive Naturals Perfect Palmolive Nutra·Fruit manual toothbrushes Small and Toy Breed demonstrated by Colgate people at all levels within our organization. We sup-
manual toothbrush mar- Tone bar soap and Lady shower creme and the and Colgate Plax Com- Canine, Science Diet port and encourage leadership in many ways, starting with making sure that
ket in the U.S. reached Speed Stick Waterproof Natura Verde line of plete Care mouthwash Healthy Mobility Canine,
a record 33.4%, up deodorant contributed home care products contributed to growth Science Diet Weight Loss
we communicate our strategy throughout our entire organization. We provide
1.3 share points versus to market share gains contributed to market throughout the region. System and Prescription information and tools to help our people carry out their responsibilities. For
year ago, driven by the throughout the region. share gains throughout Diet Therapeutic Weight instance, our broad training curriculum includes courses on Colgate’s global
success of Colgate 360° the region. Reduction Program.
values of Caring, Continuous Improvement and Global Teamwork, as well as
ActiFlex and Colgate
Wisp mini-brush. courses designed to enhance skills.
You can see examples of Colgate’s leadership in action everywhere, far
beyond delivering superior business results. In China, through donations
and other support, Colgate has been instrumental in building 41 oral care
clinics in cities impacted by earthquakes. These clinics will bring oral care
consumer insight professionals, who identify opportunities based on insights services to over one million people in the Sichuan Province. Additionally, in
into consumer behavior, habits and desires, including local preferences. Such Ethiopia, where the veterinarian to livestock ratio is the lowest in Africa, Hill’s
work led to the introduction in Europe of Palmolive Authentics liquid hand soap veterinarians are volunteering their time working with local veterinary students
containing Mediterranean-inspired fragrances and ingredients. to improve veterinary resources in the region.
Another important element of our innovation strategy is how we make use
of external partnerships to complement our strong internal capability. We have Q. What is the Company’s outlook for 2011?
many such partnerships with a broad array of suppliers, research institutions, A. As we continue to face tough external challenges, we remain confident that
universities and other industry sources. we have the right strategies in place to build on our past successes, and are
committed to executing those strategies with speed and agility. We are sharply
Q. Colgate has often been cited as best in class with respect to generating cost focused on delivering value-added new products at all price points and are
savings in all areas of its business. Can the Company get even more efficient? prepared to spend aggressively to support our global brands and fuel top-line
A. Indeed, we have made great strides in generating cost savings, but we still growth worldwide.
see many more opportunities ahead. Increasing our efficiency to fund growth Although we expect competitive and economic challenges
has been ingrained in our culture for many, many years. One recent area of fo- to continue, we are confident that our market leading positions,
cus is on simplification of the product portfolio that we offer. Over the last three particularly in emerging markets, experienced management team
years, we have reduced the number of formulas that we use around the world and strong financial condition position us well to achieve sustainable
by some 32% and the number of stock-keeping units, known as SKUs, by 23%. growth and another year of solid financial performance in 2011.
Another good example is our new European shared service center in War- I’d like to take this opportunity to thank all Colgate people world-
saw, Poland. The idea is to take away some of the non-operational activities wide for their personal commitment to achieving our goals each year,
from the people building our brands and consolidate that work into a regional or with the highest ethical standards, and express appreciation for the
global center. We have streamlined and standardized accounting procedures and support of our customers, suppliers, shareholders and directors.
processes for all of our 27 European locations, and have leveraged SAP technol-
ogy to deliver more accurate and more timely information back to the subsidiar-
ies. Looking forward, we see further opportunities for standardization and are
finding ways of broadening the scope of that center, which will serve as a model Ian Cook
we can transfer to other geographies. Chairman, President and Chief Executive Officer

6 2010 Annual Report 2010 Annual Report 7

Colgate: Global Strategies, Local Strength

Succeeding With
Consumers
Strengthening Colgate’s connection with consumers is a key part
of the Company’s growth strategy.
To better understand consumers in rural India, for
example, Colgate researchers immersed themselves in the
lives of villagers for two days, observing and discussing their
oral care habits, how they clean their homes and other
daily routines. A key learning was that mothers hope for
a better life for their children through education. Based
on this insight, Colgate implemented a special promotion
that helped build awareness for good oral care habits and
offered scholarships to children.
Another way Colgate connects with today’s consumers
globally is by utilizing integrated marketing communications
that include a mix of traditional and non-traditional media.
The launch of Colgate Sensitive Pro-Relief toothpaste
leveraged multiple digital touch points, including infor-
mative product web sites and online media featur-
ing powerful consumer
testimonials. These
activities, combined with
more traditional media
and promotional events, are
contributing to market share
gains worldwide.

India
p
Driving Sales By Offering Toothpaste Choices
Colgate’s strategy of offering a range of innovative new products at differ-
ent price points has helped drive the Company’s toothpaste market share
in India to a record high of 51.5% for 2010, an increase of 120 basis points
versus the prior year.

t
Guatemala
Staying Close To Consumers
Colgate researchers interact with consumers in their homes to gain a
better understanding of their oral, personal and home care habits. These
insights, combined with traditional research, help Colgate identify oppor-
tunities for new products and create the most effective brand messaging.

2010 Annual Report 9

Colgate: Global Strategies, Local Strength

Succeeding With
The Profession
Colgate’s strong relationships with professionals have contributed to
making Colgate and Hill’s the most recommended brands by dentists
and veterinarians worldwide. Professional endorsements build credibil-
ity for Colgate’s brands and drive product trial.
In the United States, Colgate’s new Oral Health Advisor program
is building partnerships with dental hygienists to further drive profes-
sional recommendations for Colgate products and increase patient
usage. The program includes comprehensive oral health educational q
Hill’s Pet Nutrition - Germany

tools, presence at major dental conventions and an Oral Health Partnering With Veterinarians
Advisory Board comprised of select hygienists. The Board is given the Hill’s Science Plan VetEssentials, a new line of dog and cat foods specifically
opportunity to consult on key issues in dental hygiene and participate formulated to meet pets’ essential health needs at every life stage, is sold
in product evaluation. exclusively through veterinarians. The new line is driving market share gains
Partnerships with veterinary associations are equally across Europe and has helped strengthen professional endorsements for the
important at Hill’s. Hill’s alliance with the American Science Plan brand. Building on this success, a similar product called Science
Animal Hospital Association is raising awareness Diet Healthy Advantage is now being launched in the United States.
among veterinary professionals about the impor-
tance of good nutrition for pets. The AAHA worked
with Hill’s to develop the first ever pet nutritional
assessment guidelines for veterinarians to use dur-
ing checkups, in addition to evaluating such vital
signs as temperature and pulse rate.

u
Russia
Close Relationships With Dental Professionals
By educating the dental community about the science
behind Colgate’s newest products at international conventions,
Colgate helps build professional recommendations for the Colgate
brand, and particularly for Colgate Sensitive Pro-Relief in the important
sensitivity segment.

2010 Annual Report 11

Colgate: Global Strategies, Local Strength

Succeeding With
Our Customers
Working closely with the Company’s retail customers to share exper-
tise and grow category sales has long been a cornerstone of Colgate’s
business strategy.
In the United States, Colgate collaborated with supermarket
chain Kroger to reorganize the oral care aisle. Based on a variety of
shopper insights and customer data, Colgate’s cross-functional com-
mercial team worked closely with the retailer to implement a more
shopper-friendly aisle. The new design attracted more shoppers and
increased category sales.
Reinforcing the importance of customer service,
Colgate has created an innovative, activity-based train-
ing course that focuses on the key role that supply
chain collaboration plays in delivering against
customer expectations. Participants,
who include customer development,
customer service and supply chain
personnel, learn through team ex- p
United Kingdom
ercises how to address supply chain
Collaborating To Support Communities And Grow Category Sales
and other commercial challenges
Colgate is teaming with global retailer Tesco to increase sales of oral care products,
and still deliver best-in-class service
while also benefiting communities. The “Share a Smile” program includes a variety of
to Colgate’s retail partners at the
events that can be tailored to local environments, such as this Brushathon that took
lowest cost.
place outside a Tesco store in the United Kingdom.

t
Vietnam
Optimizing Product Visibility In Small Rural Shops
In small rural shops where space is limited, Colgate representatives work closely with
shop owners to achieve the ideal assortment of Colgate products with the best visibil-
ity. Special packaging that serves as a self-display unit, such as toothbrush dispensers
and hanging sachets, is just one technique that provides merchandising flexibility for
shop owners and superior visibility for Colgate products.

2010 Annual Report 13

 t Greece
Breakthrough Technology Driving Market Share Gains
Providing instant and lasting relief from the pain caused by tooth
sensitivity, Colgate Sensitive Pro-Relief toothpaste is driving wide-
spread market share gains for Colgate in the important, fast-growing
sensitivity segment. Within just a few months of its launch in Greece,
Colgate gained market leadership in the sensitivity segment for the
first time ever.

Colgate: Global Strategies, Local Strength q Global

Innovating Innovative Formula Winning With Consumers

New Speed Stick and Lady Speed Stick Stainguard deodorants fight
the formation of yellow stains on clothing, as well as provide all-day
Everywhere odor and wetness protection, important benefits sought after by
both men and women in their underarm products.
Innovation at Colgate continues to be a key driver of profit-
able growth worldwide.
Insights into consumer behavior and research that identi-
fies unfulfilled consumer wants and needs guide Colgate’s
consumer innovation centers as they develop the next
generation of new products. For example, an insight that
taking a shower is one of the most pleasurable experi-
ences for women each day led to the launch of Palmolive
Nutra·Fruit, a line of shower gels with moisturizing cream
and fruit fragrances. Supported by an integrated marketing
campaign themed “so pleasurable, it’s addictive,” Palmolive Nutra·Fruit
shower gel is driving market share gains throughout Europe and the
South Pacific.
At Hill’s, researchers learned that obesity affects an estimated 45%
of dogs in the U.S. Recognizing that dog owners have difficulty putting
their overweight pets on a diet, Hill’s introduced a complete nutritional
system of pre-measured pet food and biscuit packs. The new line, which
includes Hill’s Prescription Diet Therapeutic Weight Reduction Program,
available only through veterinarians, and Science Diet Weight Loss
System, sold in specialty pet retail outlets, has been very well received by
both veterinarians and consumers.
At Colgate, innovation extends beyond new products to all business
functions. In just one example of process innovation, Colgate developed
an online proprietary tool that helps orchestrate the timing and consistency
of the Company’s marketing messages across all media channels.

2010 Annual Report 15

 Colgate: Global Strategies, Local Strength

Effectiveness And
Efficiency In Everything
Colgate’s focus on efficiency is a key driver for generating funds to invest in
new product development and marketing activities, while still delivering strong
profitability.
One way Colgate is generating significant savings is through business simplifi-
cation, reducing the number of formulas, packaging, ingredients and sizes of our
products. One example is dishwashing liquid, which has been relaunched across
Europe using just one cost-efficient, environmentally friendly bottle design for six
different Colgate brands. In total, the number of bottles used in the category in
Europe was reduced from 21 to 14. In North America, the Company introduced
a more concentrated dishwashing liquid formula and also reduced the number
of bottle sizes used, resulting in significant savings.
A new process technology in Brazil is allowing Colgate to save more than
$2 million annually on purchases of tallow, a key ingredient in
bar soap production. Instead of buying high-quality tal-
low available only from a limited number of suppliers,
Colgate developed the ability and capacity in-house to
upgrade more widely available lower-cost tallow.
As a result, Colgate’s high quality standards are p
United States

maintained at a reduced cost. The process has New Logistics Program Generating Significant Savings
been so successful, it is being considered A new freight and logistics program in the United States is offering retail
by other geographies, as well as being customers flexibility and cost transparency by providing incentives to place
explored for other ingredients. more efficient orders, such as full truckloads. The program is expected
to generate over $5 million in annual savings and will soon be expanded
globally.

t
China
Increasing Efficiency With State-Of-The-Art Plants
Colgate’s highly efficient toothbrush plant in Sanxiao, China, is increas-
ing the flexibility and capacity of the Company’s global supply chain. The
largest toothbrush factory in the world, the new plant produces 1.4 billion
brushes per year and adheres to the highest standards of energy efficiency
and environmental quality.

16 2010 Annual Report

 Colgate: Global Strategies, Local Strength

Strengthening
Leadership Worldwide
At Colgate, the outstanding personal leadership of employees at all levels
of the organization is a significant factor in the Company’s ongoing
success and strong business results.
Incorporating the Company’s global values of Caring, Continu-
ous Improvement and Global Teamwork, Colgate develops leaders
through a formal, multifaceted process that includes thorough
communication of Colgate’s strategies, setting of personal
objectives, periodic one-on-one feedback and an understanding
of how each individual’s work contributes to overall corporate
goals.
Fostering open communication among all Colgate
people, the Company keeps employees involved by reaching
deep into the organization regularly via webcasts, emails,
interactive town hall-style meetings, mentoring and pro-
viding a variety of online and classroom training courses
to strengthen skills.
Leadership also extends to being a
leader in caring for communities where Colgate people
live and work and where Colgate sells its products. In
Argentina, Col-
gate employees volunteer in schools and at commu-
nity events and other gatherings to extend the reach
of Colgate’s “Bright Smiles, Bright Futures” oral health
education program. In Vietnam, Colgate is partnering
with the Vietnam Dental Association to help improve the
oral health of hundreds of thousands of factory employees at
industrial parks across the country. The program offers work-
ers free dental checkups, educational oral health materials and
access to dental health professionals year round. p
Malawi
u
France Increasing Oral Health Awareness
Colgate strives to promote awareness of good oral health throughout
Designed With You And The Environment In Mind the world. In Malawi, Colgate teamed with the Malawi Ministry of
Natura Verde, a cross-category line of home care products, which con- Health during Oral Health Month to help educate children and adults
tain ingredients of natural origin that are packaged in recyclable bottles about good oral care habits. The campaign included a powerful tele-
made of 60% recycled plastic, is winning with environmentally responsible vised message that promoted healthy oral care habits and highlighted
consumers across Europe. The line includes Ajax cleaners, Palmolive hand the Ministry’s support of Colgate products.

18 2010 Annual Report

Colgate’s Corporate Your Board Of Directors
Governance Commitment 1. Ian Cook
Chairman, President and Chief Executive Officer of
4. Ellen M. Hancock, Independent Director 8. Delano E. Lewis, Independent Director
Former President of Jazz Technologies, Inc. and President Interim Dean of International and Border Programs, New
Colgate-Palmolive Company. Mr. Cook joined Colgate in and Chief Operating Officer of its predecessor Acquicor Mexico State University since 2010. From 2006 until July
the United Kingdom in 1976 and progressed through a Technology Inc. from 2005 to 2007. Mrs. Hancock 2010, Mr. Lewis was a Senior Fellow at New Mexico State
series of senior marketing and management roles around previously was the Chairman and Chief Executive Officer University. He served as U.S. Ambassador to South Africa
the world. He became Chief Operating Officer in 2004, of Exodus Communications, Inc. from 2000 to 2001, from December 1999 to July 2001. Mr. Lewis served as
with responsibility for operations in North America, Executive Vice President of R&D and Chief Technology the Chief Executive Officer and President of National
Governance is an ongoing commitment shared by our Board of Directors, our management and all other Colgate people. At Colgate, we be- Europe, Asia and Africa. In 2005, Mr. Cook was promoted Officer at Apple Computer Inc., Executive Vice President Public Radio from 1994 to 1998, and President and Chief
lieve strongly that good corporate governance accompanies and greatly aids our long-term business success. This success has been the direct to President and Chief Operating Officer, responsible and COO at National Semiconductor, and Senior Vice Executive Officer of Chesapeake & Potomac Telephone
result of Colgate’s key business strategies, including its focus on core product categories and global brands, people development programs for all Colgate operations worldwide. He was elected President at IBM. Elected director in 1988. Age 67 Company from 1988 to 1993. Director from 1991 to 1999
President and Chief Executive Officer in 2007. Elected and since 2001. Age 72
emphasizing “pay for performance” and the highest business standards. Colgate’s Board has been at the center of these key strategies, help- director in 2007 and Chairman effective January 1, 2009.
5. Joseph Jimenez, Independent Director
Chief Executive Officer of Novartis AG, a global 9. J. Pedro Reinhard, Independent Director
ing to design and implement them, and seeing that they guide the Company’s operations. Age 58
pharmaceutical company, since 2010. Prior to joining Former Executive Vice President and Chief Financial
2. John T. Cahill, Independent Director Novartis in 2007 as the Head of the Consumer Health Officer of The Dow Chemical Company (“Dow”) from
Industrial Partner, Ripplewood Holdings LLC, a private Division, Mr. Jimenez was President and CEO of H.J. 1995 to 2005. Mr. Reinhard previously held a series of
equity firm, since 2008. Since February 2009, Mr. Cahill Heinz’s North American and European businesses senior international, financial and operating leadership
has also served as Chairman of Hostess Brands Inc. and held senior leadership positions at ConAgra positions at Dow. Since 2006, Mr. Reinhard has served as
Our Board of Directors is independent, experienced and diverse. Established policies guide governance and business integrity.
Previously, Mr. Cahill was Chairman of The Pepsi Bottling Grocery Products. Elected director in 2010. Age 51 President of Reinhard & Associates, a financial advisory
The Board believes that an independent director should be free of First formalized in 1996, Colgate’s “Guidelines on Significant Corporate Group, Inc. (“PBG”). Mr. Cahill joined PepsiCo, Inc. in 1989 practice. Elected director in 2006. Age 65
6. David W. Johnson, Independent Director, Retiring
any relationship with Colgate or its senior management that may in Governance Issues” are reviewed periodically to ensure that they are and held multiple senior financial and operating leadership
Chairman Emeritus of Campbell Soup Company. Mr. 10. Stephen I. Sadove, Independent Director
positions there and at PBG. In 2001, he was named Chief
fact or appearance impair the director’s ability to make independent state-of-the-art. Formal charters define the duties of each Board com- Johnson previously was Chairman of Campbell Soup Chairman and Chief Executive Officer of Saks Incorpo-
Executive Officer of PBG and, from 2003 to 2006, he
judgments, and has adopted strict independence standards based mittee and guide their execution. Colgate’s Corporate Governance Company from 1993 to 1999 and served as its President rated (“Saks”). Mr. Sadove joined Saks as Vice Chairman
served as its Chairman and Chief Executive Officer. He
and Chief Executive Officer from 1990 to 1997 and in 2002, serving as Chief Operating Officer from 2004 to
on this principle. Colgate’s Board of Directors is comprised entirely Guidelines and all Committee Charters are available on Colgate’s web was appointed Executive Chairman of PBG in 2006 and
March 2000 to January 2001. From 1987 to 1989, he 2006. Mr. Sadove has served as Chief Executive Officer of
held that position until 2007. Elected director in 2005.
of outside independent directors, with the exception of Ian Cook, site. Additionally, the Board sponsors the Company’s Code of Con- variously served as Chairman, Chief Executive Officer and Saks since 2006 and was named Chairman in 2007. Prior
Age 53
Chairman, President and CEO. As its present directors exemplify, duct and Business Practices Guidelines, which promote the highest President of Gerber Products Company. Elected director to joining Saks, Mr. Sadove held a series of key positions at
3. Helene D. Gayle, Independent Director in 1991. We sincerely thank Mr. Johnson for two decades Bristol-Myers Squibb Company. Elected director in 2007.
Colgate also values experience in business, education and public ethical standards in all of the Company’s business dealings. President and Chief Executive Officer of CARE USA. Prior of distinguished service to Colgate and extend our best Age 59
service fields, international experience, educational achievement, to joining CARE in 2006, Dr. Gayle directed the HIV, TB wishes for his retirement. Age 78
and Reproductive Health Program at the Bill and Melinda Audit Committee: David W. Johnson, Chair, John T. Cahill, Ellen M.
strong moral and ethical character and diversity. To further enhance Our Board plays an active role overseeing the integrity of the finan- 7. Richard J. Kogan, Independent Director Hancock, Richard J. Kogan
Gates Foundation. Dr. Gayle began her career in public
the Board’s independence, the independent directors of the Board cial statements of the Company. health at the U.S. Centers for Disease Control in 1984 and
Former President and Chief Executive Officer of Schering- Nominating and Corporate Governance Committee: Delano E.
Plough Corporation from 1996 to 2003. Mr. Kogan was Lewis, Chair, Helene D. Gayle, Ellen M. Hancock, Joseph Jimenez,
meet regularly in executive session without the CEO present. These The Board is committed to the quality, integrity and transparency of held positions of increasing responsibility over her twenty- David W. Johnson, Stephen I. Sadove
also Chairman of Schering-Plough Corporation from
sessions are led by a presiding director, whose role is described in Colgate’s financial reports. This commitment is reflected in Colgate’s year tenure there. Elected director in 2010. Age 55 Finance Committee: Ellen M. Hancock, Chair, Joseph Jimenez,
1998 to 2002. Mr. Kogan became President and Chief
Richard J. Kogan, Delano E. Lewis, J. Pedro Reinhard
Colgate’s Corporate Governance Guidelines. Each independent long-standing policies and procedures, including an internal audit Operating Officer of Schering-Plough in 1986. Since 2004,
Mr. Kogan has been a principal of the KOGAN Group LLC, Personnel and Organization Committee: Richard J. Kogan, Chair,
director serves a one-year term as presiding director in accordance group monitoring financial controls worldwide, independent auditors John T. Cahill, Deputy Chair, Helene D. Gayle, David W. Johnson,
which provides consulting services to senior management Delano E. Lewis, J. Pedro Reinhard, Stephen I. Sadove
with an established schedule. who have a broad mandate and an independent Audit Committee in the pharmaceutical and other industries. Elected
overseeing these areas. director in 1996. Age 69
Our Board focuses on key business priorities and
leadership development. Good governance is the responsibility of all Colgate people.
The Board plays a major role in developing Colgate’s business strategy. Colgate people worldwide are committed to living our global values 8 7
10 9
6 1 5
It reviews the Company’s strategic plan and receives detailed briefings of Caring, Continuous Improvement and Global Teamwork in all 4
2 3

throughout the year on critical aspects of its implementation. The aspects of our business. By managing with respect, Colgate people
Board also has extensive involvement in succession planning and peo- create an environment of open communication, teamwork and
ple development with special focus on CEO succession. It discusses personal responsibility. A constant dedication to good governance
potential successors to key executives and examines backgrounds, shapes our Colgate culture and ultimately leads to good business
capabilities and appropriate developmental assignments. results.

Open communication between and among directors and Good governance thrives from continuous improvement.
management fosters effective oversight. Each year, the Board evaluates its performance against criteria that
Both inside and outside the boardroom, Colgate’s directors have the Board has determined are important to its success, including
frequent and direct contact with Colgate’s management. Key senior one or more of the following topics: financial oversight, succession
managers regularly join the directors during Board meetings and planning, executive compensation, strategic planning, corporate
in more informal settings, and together they actively participate in governance, compliance and ethics and Board structure and role.
candid discussions of various business issues. Between scheduled Self-evaluations of the Board’s committees are also conducted annu-
Board meetings, directors are invited to, and often do, contact senior ally. Complementing the Board and committee self-evaluations, the
managers with questions and suggestions. Communication among Board has also developed an individual director evaluation process
the directors is enhanced by the relatively small size of Colgate’s under which directors evaluate their peers every few years. This
Board, which fosters openness and active discussion, and by regular valuable feedback is shared with each director to identify areas of
meetings of the independent directors without the CEO present. strength and areas of focus for enhanced effectiveness.

20 2010 Annual Report 2010 Annual Report 21

 Your Non-GAAP Reconciliation
Management Team Of Financial Measures
* Ian Cook, 58 Manuel Arrese * Hector I. Erezuma Malcolm Jones Debra Nichols Andreas Somers The following is provided to supplement certain non-GAAP financial measures internally in its budgeting process and as a factor in
Chairman, President and VP, Global Supply Chain VP, Taxation VP, Global Finance VP, Hill’s Pet Nutrition VP, Global R&D
Chief Executive Officer measures discussed in the letter to shareholders and the financial determining compensation. While the Company believes that these
Daniel Bagley Bradley Farr Joy D. Klemencic Ed Oblon Rick Spann
(See biographical information VP, Global R&D VP & GM, VP, Hill’s Pet Nutrition VP, Hill’s Pet Nutrition VP, Global Supply Chain highlights section of this report (pages 2-7), both as reported (on a non-GAAP financial measures are useful in evaluating the Compa-
on page 21). Andrea Bernard Colgate-South Africa Raj Kohli Tom O’Brien Neil Stout GAAP basis) and excluding the impact of certain items (non-GAAP), ny’s business, this information should be considered as supplemental
* Michael J. Tangney, 66 VP, Global Legal James S. Figura VP, Global R&D Chief Executive Officer, VP, Global Toothbrush
Vice Chairman VP, Global Consumer Insights Kostas Kontopanos Tom’s of Maine Division
as explained below. Management believes these non-GAAP financial in nature and is not meant to be considered in isolation or as a sub-
Joseph M. Bertolini
Mr. Tangney is responsible for Hill’s VP, Global Finance Jean-Luc Fischer President, * Elaine Paik Robert Tatera measures provide useful supplemental information to investors stitute for the related financial information prepared in accordance
Pet Nutrition and Colgate’s South Mauricio Boscan VP & GM, Colgate-Southern Hill’s Pet Nutrition, U.S. VP & Corporate Treasurer VP, Colgate-Africa/ regarding the underlying business trends and performance of the with GAAP. In addition, these non-GAAP financial measures may not
Pacific businesses, and strategic VP, Division General Counsel, Cone/Latin America Middle East
direction of our important Global
John Kooyman Ellen Park Company’s ongoing operations and are useful for period-over-period be the same as similar measures presented by other companies.
Colgate-Latin America Laura Flavin VP & GM, Colgate-Iberia VP, Global Legal * Bina H. Thompson
Shopper Marketing initiative. Mr. VP, Global Human Resources Wojciech Krol SVP, Investor Relations comparisons of such operations. The Company uses these financial
Tangney joined Colgate in 1971 and Peter Brons-Poulsen Terrell Partee
held various U.S. and international VP & GM, GABA Nadine Flynn VP & GM, Colgate-Central VP, Global R&D * Neil Thompson
management positions in Latin International VP, Global Legal European Region Chris E. Pedersen President & CEO,
America and Europe. He was Don Buchner Stephen J. Fogarty Andrea Lagioia VP & GM, Hill’s Pet Nutrition
appointed to his current position VP, Hill’s Pet Nutrition VP, Global Shopper Marketing VP & GM, Colgate-France Colgate-South Pacific Linda Topping
in 2010, having most recently been VP, Global Supply Chain
Nigel B. Burton Chester P.W. Fong Leo Laitem Brent Peterson
Chief Operating Officer, Colgate-
President, Global Oral Care, VP, Colgate-Greater Asia VP, Global R&D VP, Global R&D, Supply Chain Ann Tracy
Europe, Greater Asia and Africa.
Consumer Insights Diana Geofroy Kim Seng Lim Joan Pierce VP, Hill’s Pet Nutrition
* Fabian Garcia, 51 & Advertising
Chief Operating Officer, Europe,
VP, Colgate-Latin America VP, Colgate-Greater Asia VP, Global Design Paul Trueax (Dollars in Millions Except Per Share Amounts) 2010 2008
Global Marketing, Customer
Marsha Butler Peggy Gerichter Diane Loiselle & Packaging VP, Colgate-North America
VP, Global Oral Care VP & GM, Colgate- VP, Hill’s Pet Nutrition Robert C. Pierce Panagiotis Tsourapas Gross Profit Operating Net Diluted Gross Profit Operating Net Diluted
Development, Supply Chain &
Scott Cain Central American Region VP, Global R&D VP & GM, Margin Profit Income EPS Margin Profit Income EPS
Technology Moira Loten
VP, International Tax Peter Graylin VP, Global Marketing Spencer Pingel Global Toothbrush Division
Mr. Garcia joined Colgate in 2003 as
President, Colgate-Asia Pacific. He Burc Cankat VP, Division General Counsel, William H. Lunderman VP, Global Marketing Patricia Verduin As Reported (GAAP) 59.1% $3,489 $2,203 $4.31 56.3% $3,101 $1,957 $3.66
was appointed to his current position VP & GM, Colgate-Europe VP, Global Design Hans L. Pohlschroeder Chief Technology Officer
in 2010, having most recently been Colgate-Global Export Tom Greene & Packaging VP, Treasury Lucie Claire Vincent Venezuela Hyperinflationary Charge (1) – 271 271 0.53 – – – –
EVP, President, Colgate-Latin America James Capraro VP, Chief Information Officer Louis Mancinelli VP & GM, Colgate-Philippines
& Global Sustainability. Prior to joining Massimo Poli Termination Benefits (2) – 86 61 0.12 – – – –
VP, Global Information Jan Guifarro VP, Colgate-Europe VP & GM, Lefteris Vitalis
Colgate, Mr. Garcia was Senior Vice Technology Gain on Sale of Non-Core Product Lines (3) – (50) (30) (0.06) – – – –
President of International Operations VP, Corporate * Daniel B. Marsili Colgate-Nordic Group VP & GM, Colgate-China
Antonio Caro Communications Tax Initiatives (4) – – (31) (0.06) – – – –
at the Timberland Company. SVP, Global Human Resources Ricardo Ramos Anthony R. Volpe
President, Global Customer John Guiney VP & GM, Colgate-Brazil VP, Global Oral Care Restructuring Charges (5) – – – – 0.4% 164 113 0.21
* Franck J. Moison, 57 Development * Ronald T. Martin
Chief Operating Officer, VP, Colgate-Greater Asia VP, Global Sustainability * Katherine Hargrove * Noel R. Wallace
Emerging Markets Wayne Carter Julian Gutierrez & Social Responsibility Ramundo President, Colgate-
Excluding Items (Non-GAAP) 59.1% $3,796 $2,474 $4.84 56.7% $3,265 $2,070 $3.87
VP, Hill’s Pet Nutrition VP, Colgate-Europe VP, Deputy General Counsel North America &
After joining Colgate in France in Pablo Mascolo
Jay Cassidy & Assistant Secretary Global Sustainability
1978, Mr. Moison advanced through
VP, Audit
Luis Gutierrez VP, Colgate-Latin America 2007 2006
marketing and management VP & GM, Colgate-West Paul McGarry Mary Beth Robles LaVada D. Watson
positions in Europe and at the Constantina Christopoulou Andean Region/Latin America VP, Global Information VP, Global R&D VP, Global R&D Gross Profit Operating Net Diluted Gross Profit Operating Net Diluted
corporate level. He was appointed VP, Global R&D Jack J. Haber Technology Louis Ruggiere Jerome Webb Margin Profit Income EPS Margin Profit Income EPS
to his current position in 2010, Martin J. Collins VP, Global Advertising VP & GM, VP, Division General Counsel,
having most recently been President, Beth McQuillan
VP, Global Human Resources & e-Business VP, Global Legal Hawley & Hazel, Taiwan Colgate-Greater Asia
Global Marketing, Supply Chain & As Reported (GAAP) 56.2% $2,720 $1,737 $3.20 54.8% $2,218 $1,353 $2.46
Technology. Stephen J. Conboy Suzan F. Harrison Maria Fernanda Mejia Robert Russo Richard J. Wienckowski
VP, Colgate-U.S. President, Commercial VP & GM, VP, Global Finance VP, Hill’s Pet Nutrition
*Dennis Hickey, 62
Chief Financial Officer Michael A. Corbo Business Analytics Global Personal Care Bernal Saborio David K. Wilcox Restructuring Charges (5) 1.1% 259 184 0.34 1.6% 395 287 0.52
Mr. Hickey became CFO in January
VP, Global Supply Chain Roland Heincke Cesar Melo VP & GM, VP, Global R&D Gain on Sale of Non-Core Product Lines (3) – (49) (29) (0.05) – (47) (38) (0.07)
VP, Colgate-Europe Colgate-Caribbean Region
2011, having most recently been Mike Crowe VP, Colgate-Europe Cliff Wilkins Hill’s Voluntary Product Recall (6) – 14 8 0.01 – – – –
VP, Global Information Raymond Ho Jeffrey Salguero VP, Division General Counsel,
Colgate’s Vice President and
Technology VP, Colgate-Greater Asia
Richard Mener
VP, Global Advertising Colgate-North America
Tax Adjustments (7) – – (74) (0.14) – – – –
Corporate Controller since 1998. Since President, Colgate-Africa/
joining Colgate in 1977, Mr. Hickey * Alec de Guillenchmidt Bob Holland Middle East * Derrick E.M. Samuel * Francis M. Williamson
Pension Settlement Charges (8) – 15 10 0.02 – – – –
has held key financial positions President, Colgate-Europe VP, Ethics & Compliance President, VP, Colgate-Latin America
for the Company’s European and
Tom Mintel
Colgate-Greater Asia Excluding Items (Non-GAAP) 57.3% $2,959 $1,836 $3.38 56.4% $2,566 $1,602 $2.91
Marianne DeLorenzo Sheila A. Hopkins VP, Global Toothbrush * Greg Woodson
North American business units, the
VP, Global Information VP & GM, Division Alain Semeneri VP, Chief Ethics &
Corporate Audit unit and a variety
Technology Professional Oral Care Andrea Motyka VP, Colgate-Europe Compliance Officer
of business strategy leadership
assignments. Mukul Deoras Al Horning VP, Global R&D Scott Sherwood Ruben Young
VP & GM, VP, Hill’s Pet Nutrition Josue M. Muñoz VP & GM, VP & GM, Colgate-Venezuela
*Andrew D. Hendry, 63
Colgate-South Asia Region Nina Huffman VP, Global Supply Chain Colgate-UK & Ireland Juan Pablo Zamorano 1) In 2010, the Company recorded a $271 million one-time charge related to the transition to hyperinflationary accounting in Venezuela as of January 1, 2010.
Senior Vice President, General
Counsel and Secretary Bill DeVizio VP, Global Legal Phil Shotts VP & GM, 2) In 2010, the Company recorded a $61 million aftertax charge for termination benefits relating to ongoing overhead reduction initiatives.
Francisco Muñoz Ramirez
VP, Global R&D VP, Global Finance Colgate-Global Home Care 3) In 2010, the Company recorded a $30 million aftertax gain on sale of non-core product lines in Latin America. In 2007, the Company recorded a $29 million aftertax gain on sale of
Mr. Hendry joined Colgate in 1991 Traci Hughes-Velez VP & GM, Colgate-Russia
Robert W. Dietz VP, Colgate-Africa/ James C. Shoultz Alberico Zenzola a non-core product line in Latin America. In 2006, the Company recorded a $38 million aftertax gain on sale of a non-core product line in Canada.
from Unisys, where he was Vice Vinod Nambiar
President and General Counsel. A VP, Global Design Middle East VP & GM, Colgate-Mexico VP, Colgate-Latin America 4) In 2010, the Company recorded a $31 million benefit related to the reorganization of an overseas subsidiary.
VP & GM, Colgate-Italy
graduate of Georgetown University & Packaging 5) The restructuring charges relate to the restructuring program that began in the fourth quarter of 2004 and was finalized as of the end of 2008 (the 2004 Restructuring Program).
* John J. Huston James A. Napolitano * Justin Skala Julie A. Zerbe
and NYU Law School, Mr. Hendry has Catherine Dillane SVP, Office of The Chairman VP, Colgate-U.S. President, VP, Global Human Resources These restructuring charges include separation-related costs, incremental depreciation and asset write-downs, and other costs related to the implementation of the 2004 Restruc-
also been a corporate attorney at a VP, Colgate-North America Colgate-Latin America turing Program.
New York law firm and at Reynolds N. Jay Jayaraman Jean-Marc Navez *Corporate Officer 6) In 2007, the Company recorded an $8 million aftertax charge related to the limited voluntary product recall of certain Hill’s feline products.
Metals Company (now part of Alcoa, * Victoria Dolan VP, Global Oral Care VP, Colgate-France Michael Sload
VP & Corporate Controller VP, Colgate-U.S. 7) In 2007, the Company recorded $74 million of net tax adjustments consisting of the reduction of a tax loss carryforward valuation allowance in Brazil, partially offset by tax provi-
Inc.). Scott W. Jeffery, Jr. * Rosemary Nelson sions for the recapitalization of certain overseas subsidiaries.
Philip Durocher President, Colgate-Canada VP, Deputy General Counsel, Scott Smith 8) In 2007, the Company recorded a $10 million aftertax charge associated with certain pension obligations in accordance with the Compensation – Retirement Benefits Topic of the
VP & GM, Colgate-U.S. Operations VP, Hill’s Pet Nutrition
Financial Accounting Standards Board (FASB) Codification.

22 2010 Annual Report 2010 Annual Report 23

Global UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Financial Review WASHINGTON, D.C. 20549

FORM 10-K
(Mark One)
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2010
or
� TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________ to __________________.
Commission File Number 1-644

(Exact name of registrant as specified in its charter)

DELAWARE 13-1815595
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
300 Park Avenue, New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code 212-310-2000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
Common Stock, $1.00 par value New York Stock Exchange
4.75% Notes due 2014 New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. Yes  No 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act. Yes � No 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section
13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes  No �
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate
Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of
Regulation S-T (§232.405) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes  No �
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K
t
Brazil (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. �
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-
accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer  Accelerated filer �
Non-accelerated filer � (Do not check if a smaller reporting company) Smaller reporting company �
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes � No 
The aggregate market value of Colgate-Palmolive Company Common Stock held by non-affiliates as of June 30, 2010
(the last business day of its most recently completed second quarter) was approximately $38.1 billion.
There were 493,871,199 shares of Colgate-Palmolive Company Common Stock outstanding as of January 31, 2011.

DOCUMENTS INCORPORATED BY REFERENCE:

Documents Form 10-K Reference
Portions of Proxy Statement for the 2011 Annual Meeting of Part III, Items 10 through 14
Stockholders

Colgate-Palmolive Company 2010 Annual Report 25

 Colgate-Palmolive Company PART I
Table of Contents ITEM 1. BUSINESS

Page (a) General Development of the Business

Part I
Colgate-Palmolive Company (together with its subsidiaries, the “Company” or “Colgate”) is a leading consumer
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 products company whose products are marketed in over 200 countries and territories throughout the world. Colgate was
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 founded in 1806 and incorporated under the laws of the State of Delaware in 1923.
Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 For recent business developments and other information, refer to the information set forth under the captions
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 “Executive Overview and Outlook,” “Results of Operations” and “Liquidity and Capital Resources” in Part II, Item 7 of this
Item 4. [Removed and Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 report.

Part II (b) Financial Information about Segments

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Worldwide Net sales and Operating profit by business segment and geographic region during the last three years
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 appear under the caption “Results of Operations” in Part II, Item 7 of this report and in Note 15 to the Consolidated
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . 14 Financial Statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 (c) Narrative Description of the Business
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . . . . 29
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 The Company manages its business in two product segments: Oral, Personal and Home Care; and Pet Nutrition.
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Colgate is a global leader in Oral Care with the leading toothpaste and manual toothbrush brands throughout many
parts of the world according to value share data provided by ACNielsen. Colgate’s Oral Care products include Colgate
Part III Total and Colgate Max Fresh toothpastes, Colgate 360° manual toothbrushes and Colgate and Colgate Plax mouth
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 rinses. Colgate’s Oral Care business also includes dental floss and pharmaceutical products for dentists and other oral
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 health professionals.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . . 31
Item 13. Certain Relationships and Related Transactions and Director Independence. . . . . . . . . . . . . . . . . . . . . . . . . . 32 Colgate is a leader in many product categories of the Personal Care market with global leadership in liquid hand soap.
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Colgate’s Personal Care products include Palmolive and Softsoap brand shower gels, Palmolive, Irish Spring and Protex bar
soaps and Speed Stick and Lady Speed Stick deodorants and antiperspirants. Colgate is the market leader in liquid hand
Part IV soap in the U.S. with its line of Softsoap brand products according to value share data provided by ACNielsen. Colgate’s
Item 15. Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Personal Care business outside the U.S. also includes Palmolive and Caprice shampoo and conditioners.

Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Colgate manufactures and markets a wide array of products for Home Care, including Palmolive and Ajax
dishwashing liquids, Fabuloso and Ajax household cleaners and Murphy’s Oil Soap. Colgate is a market leader in fabric
conditioners with leading brands including Suavitel in Latin America and Soupline in Europe.

Sales of Oral, Personal and Home Care products accounted for 43%, 22% and 22%, respectively, of total worldwide
sales in 2010. Geographically, Oral Care is a significant part of the Company’s business in Greater Asia/Africa, comprising
approximately 70% of sales in that region for 2010.

Colgate, through its Hill’s Pet Nutrition segment (Hill’s), is a world leader in specialty pet nutrition products for dogs
and cats with products marketed in over 95 countries around the world. Hill’s markets pet foods primarily under two
trademarks: Hill’s Science Diet, which is sold by authorized pet supply retailers and veterinarians for everyday nutritional
needs; and Hill’s Prescription Diet, a range of therapeutic products sold by veterinarians and authorized pet supply retailers
to help nutritionally manage disease conditions in dogs and cats. Sales of Pet Nutrition products accounted for 13% of the
Company’s total worldwide sales in 2010.

For more information regarding the Company’s worldwide sales by product categories, refer to Notes 1 and 15 to the
Consolidated Financial Statements.

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26 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 27

 Research and Development Executive Officers of the Registrant

Strong research and development capabilities and alliances enable Colgate to support its many brands with The following is a list of executive officers as of February 24, 2011:
technologically sophisticated products to meet consumers’ oral, personal, home care and pet nutrition needs. The
Company’s spending related to research and development activities was $256 million, $256 million and $240 million Date First Elected
Name Age Officer Present Title
during 2010, 2009 and 2008, respectively.
Ian Cook . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 1996 Chairman of the Board
Distribution; Raw Materials; Competition; Trademarks and Patents President and Chief Executive Officer
Michael J. Tangney . . . . . . . . . . . . . . . . . . 66 1993 Vice Chairman
The Company’s products are generally marketed by a direct sales force at individual operating subsidiaries or business Stephen C. Patrick. . . . . . . . . . . . . . . . . . . . 61 1990 Vice Chairman
units. In some instances, distributors or brokers are used. No single customer accounts for 10% or more of the Company’s Fabian T. Garcia . . . . . . . . . . . . . . . . . . . . . 51 2003 Chief Operating Officer
sales. Europe, Global Marketing, Customer Development,
Supply Chain and Technology
Most raw and packaging materials are purchased from other companies and are available from several sources. No Franck J. Moison . . . . . . . . . . . . . . . . . . . . . 57 2002 Chief Operating Officer
single raw or packaging material represents, and no single supplier provides, a significant portion of the Company’s total Emerging Markets
material requirements. For certain materials, however, new suppliers may have to be qualified under industry, government Dennis J. Hickey . . . . . . . . . . . . . . . . . . . . . 62 1998 Chief Financial Officer
and Colgate standards, which can require additional investment and take some period of time. Raw and packaging Andrew D. Hendry . . . . . . . . . . . . . . . . . . . 63 1991 Senior Vice President
material commodities such as resins, tallow, essential oils, tropical oils, corn and soybeans are subject to market price General Counsel and Secretary
variations. Victoria L. Dolan . . . . . . . . . . . . . . . . . . . . . 51 2011 Vice President and Corporate Controller
Elaine Paik . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 2010 Vice President and Corporate Treasurer
The Company’s products are sold in a highly competitive global marketplace, which has experienced increased trade Ronald T. Martin . . . . . . . . . . . . . . . . . . . . . 62 2001 Vice President
concentration and the growing presence of large-format retailers and discounters. Products similar to those produced and Global Sustainability and Social Responsibility
sold by the Company are available from competitors in the U.S. and overseas. Certain of the Company’s competitors are John J. Huston . . . . . . . . . . . . . . . . . . . . . . 56 2002 Senior Vice President
larger and have greater resources than the Company. In addition, private label brands sold by retail trade chains are a Office of the Chairman
source of competition for certain product lines of the Company. Product quality and innovation, brand recognition, Delia H. Thompson . . . . . . . . . . . . . . . . . . 61 2002 Senior Vice President
marketing capability and acceptance of new products largely determine success in the Company’s business segments. Investor Relations
Hector I. Erezuma . . . . . . . . . . . . . . . . . . . . 66 2005 Vice President
Trademarks are considered to be of material importance to the Company’s business. The Company follows a practice Taxation
of seeking trademark protection in the U.S. and throughout the world where the Company’s products are sold. Principal Daniel B. Marsili . . . . . . . . . . . . . . . . . . . . . . 50 2005 Senior Vice President
global and regional trademarks include Colgate, Palmolive, Mennen, Speed Stick, Lady Speed Stick, Softsoap, Irish Spring, Global Human Resources
Protex, Sorriso, Kolynos, Elmex, Tom’s of Maine, Ajax, Axion, Fabuloso, Soupline, Suavitel, Hill’s Science Diet and Hill’s Gregory P. Woodson . . . . . . . . . . . . . . . . . 59 2007 Vice President
Prescription Diet. The Company’s rights in these trademarks endure for as long as they are used and registered. Although Chief Ethics and Compliance Officer
the Company actively develops and maintains a portfolio of patents, no single patent is considered significant to the Alexandre de Guillenchmidt . . . . . . . . . . . 65 2008 President
business as a whole. Colgate – Europe
Rosemary Nelson . . . . . . . . . . . . . . . . . . . . 63 2008 Vice President
Environmental Matters Deputy General Counsel, Operations and South Pacific
Derrick E.M. Samuel . . . . . . . . . . . . . . . . . . 54 2008 President
The Company has programs that are designed to ensure that its operations and facilities meet or exceed standards Colgate – Greater Asia
established by applicable environmental rules and regulations. Capital expenditures for environmental control facilities P. Justin Skala . . . . . . . . . . . . . . . . . . . . . . . 51 2008 President
totaled $24 million for 2010. For future years, expenditures are currently expected to be of a similar magnitude. For Colgate – Latin America
additional information regarding environmental matters refer to Note 13 to the Consolidated Financial Statements. Noel R. Wallace . . . . . . . . . . . . . . . . . . . . . . 46 2009 President
Colgate North America and Global Sustainability
Employees Neil Thompson . . . . . . . . . . . . . . . . . . . . . . 55 2009 President and Chief Executive Officer
Hill’s Pet Nutrition, Inc.
As of December 31, 2010, the Company employed approximately 39,200 employees. Francis M. Williamson . . . . . . . . . . . . . . . . 63 2010 Vice President
Finance and Strategic Planning Latin America
Katherine Hargrove Ramundo . . . . . . . . . 43 2011 Vice President
Deputy General Counsel, Specialty Groups and North
America and Assistant Secretary

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28 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 29

 Each of the executive officers listed above has served the registrant or its subsidiaries in various executive capacities for  lack of well-established or reliable legal systems in certain areas where the Company operates,
the past five years with the exception of Victoria L. Dolan, who joined the Company in 2008 as Vice President, Finance
and Strategic Planning, Colgate Europe. Ms. Dolan joined Colgate from Marriott International, Inc. (“Marriott”), where she  foreign ownership restrictions and the potential for nationalization or expropriation of property or other
served as Executive Vice President, Finance and Chief Financial Officer of its vacation ownership division. Prior to joining resources, and
Marriott in 2000, Ms. Dolan spent nine years at The Coca-Cola Company in several leadership positions that included
Chief Financial Officer and Executive Vice President for the Japan division.  foreign or domestic legal and regulatory requirements, including those resulting in potentially adverse tax
consequences or the imposition of onerous trade restrictions or other government controls.
Stephen C. Patrick retired as Chief Financial Officer as of December 31, 2010 and was succeeded by Dennis J. Hickey
effective January 1, 2011. Prior to becoming Chief Financial Officer, Mr. Hickey served as Vice President and Corporate These risks could have a significant impact on our ability to sell our products on a competitive basis in international
Controller, a position he assumed in 1998. markets and may have a material adverse effect on our results of operations, cash flows and financial condition. We
manage our foreign currency exposure to minimize the impact on earnings of foreign currency rate movements through a
Under the Company’s By-Laws, the officers of the corporation hold office until their respective successors are chosen combination of cost-containment measures, selling price increases and foreign currency hedging. We cannot provide
and qualified or until they have resigned, retired or been removed by the affirmative vote of a majority of the Board of assurances, however, that these measures will succeed in offsetting any negative impact of foreign currency rate
Directors. There are no family relationships between any of the executive officers, and there is no arrangement or movements on our business and results of operations.
understanding between any executive officer and any other person pursuant to which the executive officer was elected.
For example, in 2010 our results of operations were adversely impacted by the designation of Venezuela as
(d) Financial Information about Geographic Areas hyperinflationary and the subsequent currency devaluations in Venezuela. Going forward, another currency devaluation or
continued exchange control limitations in Venezuela could have an adverse impact on our results of operations. For
For financial data by geographic region, refer to the information set forth under the caption “Results of Operations” in additional information regarding the risks associated with our operations in Venezuela, refer to Item 7 “Management’s
Part II, Item 7, of this report and in Note 15 to the Consolidated Financial Statements. For a discussion of risks associated Discussion and Analysis of Financial Condition and Results of Operations – Executive Overview and Outlook” and Note 14
with our international operations, see Item 1A, “Risk Factors.” to the Consolidated Financial Statements.

(e) Available Information Uncertain global economic conditions and disruptions in the credit markets may adversely affect our
business.
The Company’s web site address is www.colgate.com. The information contained on the Company’s web site is not
included as a part of, or incorporated by reference into, this Annual Report on Form 10-K. The Company makes available, Uncertain global economic conditions could adversely affect our business. Recent global economic trends pose
free of charge, on its web site its annual reports on Form 10-K, its quarterly reports on Form 10-Q, its interactive data files challenges to our business and could result in declining revenues, profitability and cash flow. Although we continue to
posted pursuant to Rule 405 of Regulation S-T, its current reports on Form 8-K and amendments to such reports filed or devote significant resources to support our brands, during periods of economic uncertainty consumers may switch to
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the Exchange Act) as soon as economy brands, which could reduce sales volumes of our products or result in a shift in our product mix from higher
reasonably practicable after the Company has electronically filed such material with, or furnished it to, the United States margin to lower margin product offerings. Additionally, retailers may increase pressure on our selling prices or increase
Securities and Exchange Commission (the SEC). Also available on the Company’s web site are the Company’s Code of promotional activity for lower-priced or value offerings as they seek to maintain sales volumes and margins.
Conduct and Corporate Governance Guidelines, the charters of the Committees of the Board of Directors, reports under
Section 16 of the Exchange Act of transactions in Company stock by directors and officers and its proxy statements. While we currently generate significant cash flows from our ongoing operations and have access to global credit
markets through our various financing activities, any disruption in the credit markets could limit the availability of credit or
ITEM 1A. RISK FACTORS the ability or willingness of financial institutions to extend credit, which could adversely affect our liquidity and capital
resources or significantly increase our cost of capital. If any financial institutions that are parties to our revolving credit
Set forth below is a summary of the material risks to an investment in our securities. These risks are not the only ones facility supporting our commercial paper program or other financing arrangements, such as interest rate or foreign
we face. Additional risks not presently known to us or that we currently deem immaterial may also have an adverse effect exchange hedging instruments, were to declare bankruptcy or become insolvent, they may be unable to perform under
on us. If any of the below risks actually occur, our business, results of operations, cash flows or financial condition could their agreements with us. This could leave us with reduced borrowing capacity or unhedged against certain interest rate
suffer, which might cause the value of our securities to decline. or foreign currency exposures. In addition, tighter credit markets may lead to business disruptions for certain of our
suppliers, contract manufacturers or trade customers which could, in turn, adversely impact our business.
We face risks associated with significant international operations.
Significant competition in our industry could adversely affect our business.
We operate on a global basis with approximately 75% of our net sales coming from markets outside the U.S. While
geographic diversity helps to reduce the Company’s exposure to risks in any one country or part of the world, it also We face vigorous competition around the world, including from other large, multinational companies, some of which
means that we are subject to the full range of risks associated with significant international operations, including, but not have greater resources than we do. We face this competition in several aspects of our business, including, but not limited
limited to: to, the pricing of products, promotional activities and new product introductions. Such competition also extends to
administrative and legal challenges of product claims and advertising. Our ability to compete also depends on the
 changes in exchange rates for foreign currencies, which may reduce the U.S. dollar value of revenues, profitability strength of our brands and on our ability to defend our patent, trademark and trade dress rights against legal challenges
and cash flows we receive from non-U.S. markets or increase our labor or supply costs, as measured in U.S. brought by competitors.
dollars, in those markets,

 exchange controls and other limits on our ability to repatriate earnings from overseas,

 political or economic instability or changing macroeconomic conditions in our major markets,

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30 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 31

 We may be unable to anticipate the timing and scale of such initiatives or challenges by competitors or to successfully Damage to our reputation could have an adverse effect on our business.
counteract them, which could harm our business. In addition, the cost of responding to such initiatives and challenges,
both in terms of management time and out-of-pocket expenses, may affect our performance in the relevant period. A Maintaining our strong reputation with consumers and our trade partners globally is critical to selling our branded
failure to compete effectively could adversely affect our growth and profitability. products. Accordingly, we devote significant time and resources to programs designed to protect and preserve our
reputation, such as our Ethics and Compliance, Sustainability, Brand Protection and Product Safety, Regulatory and
Changes in the policies of our retail trade customers and increasing dependence on key retailers in Quality initiatives.
developed markets may adversely affect our business.
Adverse publicity about product safety or quality, or allegations of product contamination or tampering, whether or
Our products are sold in a highly competitive global marketplace which has experienced increased trade not valid, may result in a product recall or reduced demand for our products. A significant product recall could tarnish the
concentration and the growing presence of large-format retailers and discounters. With the growing trend toward retail image of the affected brands and cause consumers to choose other products.
trade consolidation, we are increasingly dependent on key retailers, and some of these retailers, including large-format
retailers, may have greater bargaining strength than we do. They may use this leverage to demand higher trade In addition, from time to time, third parties sell counterfeit versions of our products, which are often inferior or may
discounts, allowances or slotting fees, which could lead to reduced sales or profitability. We may also be negatively pose safety risks. As a result, consumers of our brands could confuse our products with these counterfeit products, which
affected by changes in the policies of our retail trade customers, such as inventory de-stocking, limitations on access to could cause them to refrain from purchasing our brands in the future and in turn could impair our brand equity and
shelf space, delisting of our products, environmental or sustainability initiatives and other conditions. In addition, private adversely affect our business.
label products sold by retail trade chains, which are typically sold at lower prices than branded products, are a source of
competition for certain of our product lines, including liquid hand soap and shower gel. Similarly, adverse publicity regarding our responses to health concerns, our environmental impacts, including
packaging, energy and water use and waste management, or other sustainability issues, whether or not deserved, could
The growth of our business depends on the successful development and introduction of innovative new jeopardize our reputation. Damage to our reputation or loss of consumer confidence in our products for any of these
products. reasons could have a material adverse effect on our business, as well as require resources to rebuild our reputation.

Our growth depends on the continued success of existing products as well as the successful development and Our business is subject to regulation in the U.S. and abroad.
introduction of innovative new products and line extensions, which face the uncertainty of retail and consumer
acceptance and reaction from competitors. In addition, our ability to create new products and line extensions and to Our business is subject to extensive regulation in the U.S. and abroad. Such regulation applies to most aspects of our
sustain existing products is affected by whether we can successfully: products, including their development, ingredients, manufacture, packaging, labeling, storage, transportation,
distribution, export, import, advertising and sale. Also, our selling practices are regulated by competition law authorities in
 develop and fund technological innovations, the U.S. and abroad. U.S. federal authorities, including the Food and Drug Administration (FDA), the Federal Trade
Commission, the Consumer Product Safety Commission and the Environmental Protection Agency (EPA), regulate different
 receive and maintain necessary patent and trademark protection, aspects of our business, along with parallel authorities at the state and local level and comparable authorities overseas.

 obtain approvals and registrations of regulated products, including from the U.S. Food and Drug Administration While it is our policy and practice to comply with all regulatory requirements applicable to our business, a finding that
(FDA) and other regulatory bodies in the U.S. and abroad, and we are in violation of, or out of compliance with, applicable laws or regulations could subject us to civil remedies, including
fines, damages, injunctions or product recalls, or criminal sanctions, any of which could have a material adverse effect on
 anticipate consumer needs and preferences. our business. Even if a claim is unsuccessful, is without merit or is not fully pursued, the negative publicity surrounding
such assertions regarding our products, processes or business practices could adversely affect our reputation and brand
The failure to develop and launch successful new products could hinder the growth of our business and any delay in image. For information regarding our European competition matters, see Item 3, “Legal Proceedings” and Note 13 to the
the development or launch of a new product could result in the Company not being the first to market, which could Consolidated Financial Statements.
compromise our competitive position.
In addition, new or more stringent regulations, or more restrictive interpretations of existing regulations, could have a
Volatility in material and other costs and our increasing dependence on key suppliers could adversely material adverse impact on our business. For example, from time to time, various regulatory authorities and consumer
impact our profitability. groups in Europe, the U.S. and other countries request or conduct reviews of the use of various ingredients in consumer
products. Triclosan, an ingredient used in Colgate Total toothpaste and certain of our liquid and bar soaps, is an example
Raw and packaging material commodities such as resins, tallow, essential oils, tropical oils, corn and soybeans are of an ingredient which has undergone reviews by various regulatory authorities around the world. The reviews by
subject to wide price variations. Increases in the costs and availability of these commodities and the costs of energy, regulatory authorities of triclosan and other ingredients continue to support their current uses in our products. However, a
transportation and other necessary services may adversely affect our profit margins if we are unable to pass along any finding by a regulatory authority that triclosan, or any other of our ingredients, should not be used in certain consumer
higher costs in the form of price increases or otherwise achieve cost efficiencies such as in manufacturing and distribution. products or should otherwise be newly regulated, could have a material adverse impact on our business, as could
In addition, our move to global suppliers for materials and other services in order to achieve cost reductions and simplify negative reactions by our consumers, trade customers or non-governmental organizations to our use of such ingredients.
our business has resulted in an increasing dependence on key suppliers. For certain materials, new suppliers may have to Additionally, an inability to timely obtain regulatory approval of new or reformulated products containing alternative
be qualified under industry, government and Colgate standards, which can require additional investment and take some ingredients could likewise have a material adverse effect on our business.
period of time. While we believe that the supplies of raw materials needed to manufacture our products are adequate,
global economic conditions, supplier capacity constraints and other factors could affect the availability of, or prices for,
those raw materials.

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32 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 33

 Our business is subject to the risks inherent in global manufacturing and sourcing activities. ITEM 2. PROPERTIES

The Company is engaged in manufacturing and sourcing of products and materials on a global scale. We are subject The Company owns or leases approximately 340 properties which include manufacturing, distribution, research and
to the risks inherent in such activities, including, but not limited to: office facilities worldwide. Our corporate headquarters is located in leased property at 300 Park Avenue, New York, New
York.
 industrial accidents or other occupational health and safety issues,
In the U.S., the Company operates approximately 60 properties of which 15 are owned. Major U.S. manufacturing
 environmental events, and warehousing facilities used by the Oral, Personal and Home Care segment of our business are located in Morristown,
New Jersey; Morristown, Tennessee; and Cambridge, Ohio. The Pet Nutrition segment has major facilities in Bowling
 strikes and other labor disputes, Green, Kentucky; Topeka, Kansas; Emporia, Kansas; Commerce, California; and Richmond, Indiana. The primary research
center for Oral, Personal and Home Care products is located in Piscataway, New Jersey and the primary research center
 disruptions in logistics, for Pet Nutrition products is located in Topeka, Kansas. Our global data center is also located in Piscataway, New Jersey.

 loss or impairment of key manufacturing sites, Overseas, the Company operates approximately 280 properties, of which 72 are owned, in over 70 countries. Major
overseas facilities used by the Oral, Personal and Home Care segment of our business are located in Australia, Brazil,
 raw material and product quality or safety issues, China, Colombia, France, Italy, Mexico, Poland, South Africa, Thailand, Venezuela, Vietnam and elsewhere throughout the
world. The Pet Nutrition segment has a major facility in the Czech Republic.
 natural disasters, acts of war or terrorism and other external factors over which we have no control.
All of the facilities we operate are well maintained and adequate for the purpose for which they are intended.
While we have business continuity and contingency plans for key manufacturing sites and the supply of raw
materials, significant disruption of manufacturing for any of the above reasons could interrupt product supply and, if not ITEM 3. LEGAL PROCEEDINGS
remedied, have an adverse impact on our business. In addition, if our products, or raw materials contained in our
products, are found or perceived to be defective or unsafe, we may need to recall some of our products. Such a recall As a global company serving consumers in more than 200 countries and territories, the Company is routinely subject
could cause our reputation and brand image to be diminished and, consequently, we could lose market share or become to a wide range of legal proceedings. These include disputes relating to intellectual property, contracts, product liability,
subject to liability claims, any of which could have a material adverse effect on our business. advertising, foreign exchange controls, antitrust and trade regulation, as well as labor and employment, environmental
and tax matters.
A failure of a key information technology system could adversely impact the Company’s ability to conduct
business. Brazilian Matters

The Company relies extensively on information technology systems, including some which rely on third-party service In 2001, the Central Bank of Brazil sought to impose a substantial fine on the Company’s Brazilian subsidiary
providers, in order to conduct business. These systems include, but are not limited to, programs and processes relating to (approximately $157 million at the current exchange rate) based on alleged foreign exchange violations in connection with
communicating within the Company and with other parties, ordering and managing materials from suppliers, converting the financing of the Company’s 1995 acquisition of the Kolynos oral care business from Wyeth (formerly American Home
materials to finished products, shipping products to customers, processing transactions, summarizing and reporting Products) (the Seller), as described in the Company’s Form 8-K dated January 10, 1995. The Company appealed the
results of operations, complying with regulatory legal or tax requirements and other processes involved in managing the imposition of the fine to the Brazilian Monetary System Appeals Council (the Council), and on January 30, 2007, the
business. Although the Company has network security measures in place, the systems may be vulnerable to computer Council decided the appeal in the Company’s favor, dismissing the fine entirely. However, certain tax and civil proceedings
viruses, security breaches and other similar disruptions from unauthorized users. While the Company has business that began as a result of this Central Bank matter are still outstanding as described below.
continuity plans in place, if the systems are damaged or cease to function properly due to any number of causes,
including the poor performance or failure of third-party service providers, catastrophic events, power outages, security The Brazilian internal revenue authority has disallowed interest deductions and foreign exchange losses taken by the
breaches, network outages, failed upgrades or other similar events, and if the business continuity plans do not effectively Company’s Brazilian subsidiary for certain years in connection with the financing of the Kolynos acquisition. The tax
resolve such issues on a timely basis, the Company may suffer interruptions in the ability to manage or conduct business assessments with interest, at the current exchange rate, approximate $123 million. The Company has been disputing the
which may adversely impact the Company’s business. disallowances by appealing the assessments within the internal revenue authority’s appellate process with the following
results to date:
Our success depends upon our ability to attract and retain key employees and the succession of senior
management.  In June 2005, the First Board of Taxpayers ruled in the Company’s favor and allowed all of the previously claimed
deductions for 1996 through 1998. In March 2007, the First Board of Taxpayers ruled in the Company’s favor and
Our success largely depends on the performance of our management team and other key employees. If we are unable to allowed all of the previously claimed deductions for 1999 through 2001. The tax authorities appealed these
attract and retain talented, highly qualified senior management and other key people, our future operations could be adversely decisions to the next administrative level.
affected. In addition, if we are unable to effectively provide for the succession of senior management, including our Chief
Executive Officer, our business may be materially adversely affected. While we follow a disciplined, ongoing succession planning  In August 2009, the First Taxpayers’ Council (the next and final administrative level of appeal) overruled the
process and have succession plans in place for senior management and other key executives, these do not guarantee that the decisions of the First Board of Taxpayers, upholding the majority of the assessments, disallowing a portion of the
services of qualified senior executives will continue to be available to us at particular moments in time. assessments and remanding a portion of the assessments for further consideration by the First Board of
Taxpayers.
ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

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34 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 35

 The Company has filed a motion for reconsideration with the First Taxpayers’ Council and further appeals are available Currently, formal claims of violations, or statements of objections, are pending against the Company as follows:
within the Brazilian federal courts. The Company intends to challenge these assessments vigorously. Although there can
be no assurances, management believes, based on the opinion of its Brazilian legal counsel and other advisors, that the  The French competition authority alleges agreements on pricing and promotion of heavy duty detergents among
disallowances are without merit and that the Company should ultimately prevail on appeal, if necessary, in the Brazilian four consumer goods companies, including the Company’s French subsidiary.
federal courts.  The French competition authority alleges violations of competition law by three pet food producers, including the
Company’s Hill’s France subsidiary, focusing on exclusivity arrangements.
In 2002, the Brazilian Federal Public Attorney filed a civil action against the federal government of Brazil, Laboratorios  The Dutch competition authority alleges that six companies, including the Company’s Dutch subsidiary, engaged
Wyeth-Whitehall Ltda. (the Brazilian subsidiary of the Seller) and the Company, as represented by its Brazilian subsidiary, in concerted practices and exchanged sensitive information in the cosmetics sector.
seeking to annul an April 2000 decision by the Brazilian Board of Tax Appeals that found in favor of the Seller’s Brazilian  The German competition authority alleges in an investigation related to the one resolved in February 2008 that
subsidiary on the issue of whether it had incurred taxable capital gains as a result of the divestiture of Kolynos. The action 17 branded goods companies, including the Company’s German subsidiary, exchanged sensitive information
seeks to make the Company’s Brazilian subsidiary jointly and severally liable for any tax due from the Seller’s Brazilian related to the German market.
subsidiary. 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 intends to challenge this action The Company has responded, or will have an opportunity to respond, to each of these formal claims of violations.
vigorously. Investigations are ongoing in the EU, Belgium, France and Greece, but no formal claims of violations have been filed in
these jurisdictions except in France as noted above.
In December 2005, the Brazilian internal revenue authority issued to the Company’s Brazilian subsidiary a tax
assessment with interest and penalties of approximately $73 million, at the current exchange rate, based on a claim that The Company’s policy is to comply with antitrust and competition laws and, if a violation of any such laws is found,
certain purchases of U.S. Treasury bills by the subsidiary and their subsequent disposition during the period 2000 to 2001 to take appropriate remedial action and to cooperate fully with any related governmental inquiry. The Company has
were subject to a tax on foreign exchange transactions. The Company is disputing the assessment within the internal undertaken a comprehensive review of its selling practices and related competition law compliance in Europe and
revenue authority’s administrative appeals process. In October 2007, the Second Board of Taxpayers, which has elsewhere and, where the Company has identified a lack of compliance, it has undertaken remedial action. Competition
jurisdiction over these matters, ruled in favor of the internal revenue authority. In January 2008, the Company appealed and antitrust law investigations often continue for several years and can result in substantial fines for violations that are
this decision to the next administrative level. Although there can be no assurances, management believes, based on the found. Such fines, depending on the gravity and duration of the infringement as well as the value of the sales involved,
advice of its Brazilian legal counsel, that the tax assessment is without merit and that the Company should prevail on have amounted, in some cases, to hundreds of millions of dollars. While the Company cannot predict the final financial
appeal either at the administrative level or, if necessary, in the Brazilian federal courts. The Company intends to challenge impact of these competition law issues as these matters may change, the Company has taken and will, as necessary, take
this assessment vigorously. additional reserves as and when appropriate.

European Competition Matters ERISA Matters

Since February 2006, the Company has learned that investigations relating to potential competition law violations In October 2007, a putative class action claiming that certain aspects of the cash balance portion of the Colgate-
involving the Company’s subsidiaries had been commenced by governmental authorities in the European Union (EU), Palmolive Company Employees’ Retirement Income Plan (the Plan) do not comply with the Employee Retirement Income
Belgium, France, Germany, Greece, Italy, The Netherlands, Romania, Spain, Switzerland and the United Kingdom (UK). Security Act was filed against the Plan and the Company in the United States District Court for the Southern District of
The Company understands that many of these investigations also involve other consumer goods companies and/or retail New York. Specifically, Proesel, et al. v. Colgate-Palmolive Company Employees’ Retirement Income Plan, et al. alleges
customers. While several of the investigations are ongoing, there have been the following results to date: improper calculation of lump sum distributions, age discrimination and failure to satisfy minimum accrual requirements,
thereby resulting in the underpayment of benefits to Plan participants. Two other putative class actions filed earlier in
 In February 2008, the federal competition authority in Germany imposed fines on four of the Company’s 2007, Abelman, et al. v. Colgate-Palmolive Company Employees’ Retirement Income Plan, et al., in the United States
competitors, but the Company was not fined due to its cooperation with the German authorities. District Court for the Southern District of Ohio, and Caufield v. Colgate-Palmolive Company Employees’ Retirement
 In November 2009, the UK Office of Fair Trading informed the Company that it was no longer pursuing its Income Plan, in the United States District Court for the Southern District of Indiana, both alleging improper calculation of
investigation of the Company. lump sum distributions and, in the case of Abelman, claims for failure to satisfy minimum accrual requirements, were
 In December 2009, the Swiss competition law authority imposed a fine of $5 million on the Company’s GABA transferred to the Southern District of New York and consolidated with Proesel into one action, In re Colgate-Palmolive
subsidiary for alleged violations of restrictions on parallel imports into Switzerland. The Company is appealing the ERISA Litigation. The complaint in the consolidated action alleges improper calculation of lump sum distributions and
fine in the Swiss courts. failure to satisfy minimum accrual requirements, but does not include a claim for age discrimination. The relief sought
 In January 2010, the Spanish competition law authority found that four suppliers of shower gel had entered into includes recalculation of benefits in unspecified amounts, pre- and post-judgment interest, injunctive relief and attorneys’
an agreement regarding product down-sizing, for which Colgate’s Spanish subsidiary was fined $3 million. The fees. This action has not been certified as a class action as yet. The parties are in discussions via non-binding mediation to
Company is appealing the fine in the Spanish courts. determine whether the action can be settled. The Company and the Plan intend to contest this action vigorously should
 In December 2010, the Italian competition law authority found that 16 consumer goods companies, including the parties be unable to reach a settlement.
the Company’s Italian subsidiary, exchanged competitively sensitive information in the cosmetics sector, for which
the Company’s Italian subsidiary was fined $3 million. The Company is appealing the fine in the Italian courts. While it is possible that the Company’s cash flows and results of operations in a particular quarter or year could be
 While the investigations of the Company’s Romanian subsidiary by the Romanian competition authority have materially affected by the impact of the above-noted contingencies, it is the opinion of management that these matters
been closed since May 2009, a complainant has petitioned the court to reopen one of the investigations. will not have a material impact on the Company’s financial position, ongoing results of operations or cash flows.

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36 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 37

 ITEM 4. [Removed and Reserved]. PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

For information regarding the market for the Company’s common stock, including quarterly market prices and
dividends, refer to “Market and Dividend Information.” For information regarding the number of common shareholders of
record refer to “Historical Financial Summary.” For information regarding the securities authorized for issuance under our
equity compensation plans, refer to “Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters” included in Item 12 of this report.

As a result of recent rules issued by the Internal Revenue Service related to employer stock held in defined contribution
plans, the Company issued a notice of redemption with respect to the 2,405,192 shares of Preference stock outstanding
on December 29, 2010. At the direction of the Company’s Employee Stock Ownership Plan trustee, the preference shares
were converted into 19,241,536 shares of common stock. The common stock for the conversion was issued from treasury
shares.

Issuer Purchases of Equity Securities

On February 4, 2010, the Company’s Board of Directors (the Board) authorized a share repurchase program (the 2010
Program). The 2010 Program authorizes the repurchase of up to 40 million shares of the Company’s common stock. The
Board’s authorization also provides for share repurchases on an ongoing basis to fulfill certain requirements of the
Company’s compensation and benefit programs. The shares are repurchased from time to time in open market
transactions or privately negotiated transactions at the Company’s discretion, subject to market conditions, customary
blackout periods and other factors.

The following table shows the stock repurchase activity for each of the three months in the quarter ended December
31, 2010:

Maximum Number of
Total Number of Shares that May
Shares Purchased as Yet be Purchased
Part of Publicly Under Publicly
Total Number of Average Price Paid Announced Plans Announced Plans or
Month Shares Purchased(1) per Share or Programs(2) Programs
October 1 through 31, 2010 . . . . . . . . . 701,434 $ 75.96 650,000 23,929,520
November 1 through 30, 2010 . . . . . . . 3,743,989 $ 77.54 3,700,000 20,229,520
December 1 through 31, 2010 . . . . . . . 3,767,026 $ 79.53 3,695,000 16,534,520
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,212,449 $ 78.32 8,045,000

(1)
Includes share repurchases under the 2010 Program and those associated with certain employee elections under
the Company’s compensation and benefit programs.
(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 167,449 shares, all of which relate to shares deemed surrendered to the
Company to satisfy certain employee elections under its compensation benefit programs.

ITEM 6. SELECTED FINANCIAL DATA

Refer to the information set forth under the caption “Historical Financial Summary.”

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38 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 39

 (Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF In particular, as a result of the devaluations of the Venezuelan bolivar fuerte, described more fully in Note 14 to the
OPERATIONS Consolidated Financial Statements, the local currency operations of the Company’s Venezuelan subsidiary (CP Venezuela)
now translate into fewer U.S. dollars, which had, and will continue to have, an adverse effect on the Company’s reported
Executive Overview and Outlook results. The Company has taken, and continues to take, actions to mitigate the impact of both devaluations on its
operations. Additionally, the Venezuelan government continues to impose currency exchange controls and during 2010 a
Colgate-Palmolive Company seeks to deliver strong, consistent business results and superior shareholder returns by new currency market was established which replaced the free-floating parallel market. Although CP Venezuela continues
providing consumers on a global basis with products that make their lives healthier and more enjoyable. to have limited access to U.S. dollars at the official rate and currently only for imported goods, under the current
restrictions, it is not permitted to access the new currency market. The Company’s business in Venezuela and our ability
To this end, the Company is tightly focused on two product segments: Oral, Personal and Home Care; and Pet to repatriate its earnings continue to be negatively affected by these difficult conditions and would be further negatively
Nutrition. Within these segments, the Company follows a closely defined business strategy to develop and increase affected by additional devaluations or the imposition of additional currency exchange controls. For the year ended
market leadership positions in key product categories. These product categories are prioritized based on their capacity to December 31, 2010, CP Venezuela represented 4% of the Company’s consolidated Net sales. At December 31, 2010, CP
maximize the use of the organization’s core competencies and strong global equities and to deliver sustainable long-term Venezuela’s monetary local currency net asset position was approximately $200.
growth.
Looking forward, we expect global macroeconomic and market conditions to remain highly challenging. While the
Operationally, the Company is organized along geographic lines with management teams having responsibility for global marketplace in which we operate has always been highly competitive, the Company has recently experienced
the business and financial results in each region. The Company competes in more than 200 countries and territories heightened competitive activity in certain markets from other large multinational companies, some of which may have
worldwide with established businesses in all regions contributing to the Company’s sales and profitability. This geographic greater resources than we do. Such activities have included more aggressive product claims and marketing challenges, as
diversity and balance help to reduce the Company’s exposure to business and other risks in any one country or part of the well as increased promotional spending. Additionally, we have experienced a sharp rise in commodity costs. While the
world. Company has taken, and will continue to take, measures to address the heightened competitive activity and increased
commodity costs, should these conditions persist, they could adversely affect the Company’s future results.
The Oral, Personal and Home Care segment is operated through four reportable operating segments: North America,
Latin America, Europe/South Pacific and Greater Asia/Africa, all of which sell to a variety of retail and wholesale customers The Company believes it is well prepared to meet the challenges ahead due to its strong financial condition, experience
and distributors. The Company, through Hill’s Pet Nutrition, also competes on a worldwide basis in the pet nutrition operating in challenging environments and continued focus on the Company’s strategic initiatives: getting closer to the
market, selling its products principally through specialty pet retailers and the veterinary profession. consumer, the profession and customers; effectiveness and efficiency in everything; innovation everywhere; and
leadership. This focus, together with the strength of the Company’s global brand names and its broad international
On an ongoing basis, management focuses on a variety of key indicators to monitor business health and presence in both mature and emerging markets, should position the Company well to increase shareholder value over the
performance. These indicators include market share, sales (including volume, pricing and foreign exchange components), long-term.
organic sales growth (Net sales growth excluding the impact of foreign exchange, acquisitions and divestments), gross
profit margin, operating profit, net income and earnings per share, as well as measures used to optimize the Results of Operations
management of working capital, capital expenditures, cash flow and return on capital. The monitoring of these indicators,
and the Company’s corporate governance practices (including the Company’s Code of Conduct), help to maintain Net Sales
business health and strong internal controls.
Worldwide Net sales were $15,564 in 2010, up 1.5% from 2009 as volume growth of 3.0% and level selling prices
To achieve its business and financial objectives, the Company focuses the organization on initiatives to drive and fund were partially offset by a negative foreign exchange impact of 1.5%. Worldwide organic sales (Net sales excluding the
growth. The Company seeks to capture significant opportunities for growth by identifying and meeting consumer needs impact of foreign exchange, acquisitions and divestments) grew 3.0% in 2010.
within its core categories, through its focus on innovation and the deployment of valuable consumer and shopper insights
in the development of successful new products regionally, which are then rolled out on a global basis. To enhance these Net sales in the Oral, Personal and Home Care segment were $13,484 in 2010, up 2.0% from 2009, as volume
efforts, the Company has developed key initiatives to build strong relationships with consumers, dental and veterinary growth of 4.0% and level selling prices were partially offset by a negative foreign exchange impact of 2.0%. Organic sales
professionals and retail customers. Growth opportunities are greater in those areas of the world in which economic in the Oral, Personal and Home Care segment grew 4.0% in 2010.
development and rising consumer incomes expand the size and number of markets for the Company’s products.
Net sales in Hill’s Pet Nutrition were $2,080 in 2010, down 2.5% from 2009 as 2.0% volume declines and net selling
The investments needed to fund this growth are developed through continuous, Company-wide initiatives to lower price decreases of 1.5% were partially offset by a 1.0% positive impact of foreign exchange. Organic sales in Hill’s Pet
costs and increase effective asset utilization through which the Company seeks to become even more effective and Nutrition decreased 3.5% in 2010.
efficient throughout its businesses. The Company also continues to prioritize its investments toward its higher margin
businesses, specifically Oral Care, Personal Care and Pet Nutrition. Worldwide Net sales were $15,327 in 2009, level with 2008 as volume growth of 0.5% and net selling price increases
of 6.0% were offset by a negative foreign exchange impact of 6.5%. Worldwide organic sales grew 6.5% in 2009.
As disclosed in “Item 1A. Risk Factors”, with approximately 75% of its Net sales generated outside of the United
States, the Company is exposed to changes in economic conditions and foreign currency exchange rates, as well as
political uncertainty in some countries, all of which could impact future operating results.

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40 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 41

 (Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

Gross Profit Operating Profit

Worldwide gross profit margin was 59.1% in 2010, 58.8% in 2009 and 56.3% in 2008. The gross profit margin In 2010, Operating profit decreased 3% to $3,489 from $3,615 in 2009, reflecting the one-time charge related to the
increase in 2010 was due to a continued focus on cost-saving initiatives, partially offset by rising commodity costs and transition to hyperinflationary accounting in Venezuela, termination benefits, higher advertising spending and the
negative foreign exchange. negative impact of foreign exchange, partially offset by the gain on sales of non-core product lines and a continued focus
on cost-saving initiatives. In 2009, Operating profit increased 17% from $3,101 in 2008. Excluding the impact of the one-
The gross profit margin increase in 2009 was driven by higher pricing, a continued focus on cost-saving initiatives, and time charge related to the transition to hyperinflationary accounting in Venezuela, the 2004 Restructuring Program and
the absence of charges related to the 2004 Restructuring Program, partially offset by a negative foreign exchange impact other items set forth below, Operating profit increased 5% in 2010 and 11% in 2009 as follows:
and costs related to the remeasurement of liabilities related to inventory purchases in Venezuela. During 2008,
restructuring and implementation-related charges incurred under the 2004 Restructuring Program included in Cost of sales % %
2010 2009 Change 2008 Change
were $59. The 2004 Restructuring Program lowered the reported gross profit margin by 40 bps in 2008. Excluding the
impact of the 2004 Restructuring Program, gross profit margin was 56.7% in 2008. Operating profit, GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,489 $ 3,615 (3%) $ 3,101 17%
Venezuela hyperinflationary transition charge . . . . . . . . . . . 271 — —
Selling, General and Administrative Expenses Termination benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 — —
Gain on sales of non-core product lines . . . . . . . . . . . . . . . . . (50) — —
Selling, general and administrative expenses as a percentage of Net sales were 34.8% in 2010, 34.5% in 2009 and 2004 Restructuring Program . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 164
35.4% in 2008. The 30 bps increase in 2010 was primarily due to higher advertising spending (60 bps), partially offset by Operating profit, non-GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,796 $ 3,615 5% $ 3,265 11%
the impact of cost-saving initiatives. The 90 bps decrease in 2009 was driven primarily by the absence of charges related to
the 2004 Restructuring Program in 2009, lower advertising spending (80 bps) and a continued focus on cost-saving Interest Expense, Net
initiatives, partially offset by higher pension and benefit costs. In 2008, Selling, general and administrative expenses
included $81 (0.5% of Net sales) of charges related to the 2004 Restructuring Program. Interest expense, net was $59 in 2010 compared with $77 in 2009 and $96 in 2008. The decrease in Interest
expense, net from 2009 to 2010 was due to lower average interest rates. The decrease in Interest expense, net from 2008
Other (Income) Expense, Net to 2009 was due to lower average interest rates and lower debt levels.

Other (income) expense, net was $301, $111 and $103 in 2010, 2009 and 2008, respectively. The components of Income Taxes
Other (income) expense, net are presented below:
The effective income tax rate was 32.6% in 2010 and 32.2% in both 2009 and 2008 and all years benefited from
Other (income) expense, net 2010 2009 2008 global tax strategies. The impact on the Company’s effective income tax rate of the one-time charge related to the
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22 $ 22 $ 19 transition to hyperinflationary accounting in Venezuela and other items in 2010 was as follows:
Venezuela hyperinflationary transition charge . . . . . . . . . . . . . . . . . 271 — —
Gain from remeasurement of Venezuelan balance sheet . . . . . . . (10) — — Effective income tax rate, as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.6%
Remeasurement of certain liabilities in Venezuela . . . . . . . . . . . . . . — 27 — Transition to hyperinflationary accounting in Venezuela . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.4)
Termination benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 — — Termination benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.1)
Gain on sales of non-core product lines . . . . . . . . . . . . . . . . . . . . . . . (50) (5) — Sales of non-core product lines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.1)
Investment losses (income) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 25 Remeasurement of Venezuelan balance sheet and lower taxes on unpaid remittances . . . . . 1.5
Legal and environmental matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) 27 23 Reorganization of an overseas subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8
Asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 16 — Effective income tax rate, Non-GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.3%
Equity (income) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) (5) (4)
2004 Restructuring Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 24 Net Income attributable to Colgate-Palmolive Company
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15) 29 16
Total Other (income) expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 301 $ 111 $ 103 Net income attributable to Colgate-Palmolive Company was $2,203, or $4.31 per share on a diluted basis in 2010
compared with $2,291, or $4.37 per share on a diluted basis in 2009 and $1,957 or $3.66 per share in 2008. In 2010, Net
income attributable to Colgate-Palmolive Company included the $271 ($0.53 per share) one-time charge related to the
transition to hyperinflationary accounting in Venezuela, $61 in aftertax charges ($0.12 per share) for termination benefits,
a $30 ($0.06 per share) aftertax gain from the sale of non-core product lines in Latin America and a $31 ($0.06 per share)
aftertax gain related to the reorganization of an overseas subsidiary.

Net income attributable to Colgate-Palmolive Company in 2008 included $113 ($0.21 per share) of charges related to
the Company’s 2004 Restructuring Program.

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42 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 43

 (Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

Segment Results Latin America

The Company markets its products in over 200 countries and territories throughout the world in two distinct business Net sales in Latin America decreased 1.5% in 2010 to $4,261, as 2.0% volume growth and net selling price increases
segments: Oral, Personal and Home Care; and Pet Nutrition. The Company evaluates segment performance based on of 5.5% were more than offset by a 9.0% negative impact of foreign exchange. Organic sales in Latin America grew 7.5%
several factors, including Operating profit. The Company uses Operating profit as a measure of the operating segment in 2010. Volume gains achieved in Mexico, Colombia, Ecuador, Dominican Republic and Central America were partially
performance because it excludes the impact of corporate-driven decisions related to interest expense and income taxes. offset by volume declines in Venezuela. Products contributing to growth in oral care included Colgate Sensitive Pro-Relief
and Colgate Total toothpastes, Colgate 360° ActiFlex, Colgate Twister and Colgate Zig Zag manual toothbrushes and
Worldwide Net Sales by Business Segment and Geographic Region Colgate Plax Whitening Tartar Control and Colgate Plax Complete Care mouthwashes. Products contributing to growth in
other categories included Palmolive Naturals Yogurt and Almond Oil and Palmolive Natural Perfect Tone bar soaps, Lady
2010 2009 2008 Speed Stick Waterproof and Speed Stick Extreme deodorants and Protex Propolis bar soap. In 2009, Net sales in Latin
Oral, Personal and Home Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . America increased 5.5% to $4,319 as a result of 3.0% volume growth and net selling price increases of 13.5%, partially
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,005 $ 2,950 $ 2,852 offset by an 11.0% negative impact of foreign exchange. Organic sales in Latin America grew 16.5% in 2009.
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,261 4,319 4,088
Europe/South Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,220 3,271 3,582 Operating profit in Latin America decreased 5% in 2010 to $1,295, as higher raw and packaging material costs,
Greater Asia/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,998 2,655 2,660 higher advertising spending and increased promotional investments were partially offset by cost-saving initiatives. In 2009,
Total Oral, Personal and Home Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,484 13,195 13,182 Operating profit in Latin America increased 15% to $1,360 as a result of sales growth and cost-saving initiatives.
Pet Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,080 2,132 2,148
Total Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,564 $ 15,327 $ 15,330 Europe/South Pacific

Worldwide Operating Profit by Business Segment and Geographic Region Net sales in Europe/South Pacific decreased 1.5% in 2010 to $3,220 as volume growth of 2.0% was more than offset
by net selling price decreases of 3.0% and a 0.5% negative impact of foreign exchange. Organic sales in Europe/South
2010 2009 2008 Pacific declined 1.0% in 2010. Volume gains in the GABA business, the United Kingdom, Australia and Denmark were
Oral, Personal and Home Care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . partially offset by volume declines in Romania, Portugal, Greece and France. Products contributing to growth in oral care
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 884 $ 843 $ 689 included Colgate Sensitive Pro-Relief, Colgate Sensitive Pro-Relief Whitening, elmex Sensitive Professional and Colgate Max
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,295 1,360 1,181 White One toothpastes, Colgate 360° ActiFlex manual toothbrush, Colgate 360° ActiFlex Sonic Power battery powered
Europe/South Pacific. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 742 748 746 toothbrush and Colgate Plax Ice mouth rinse. Products contributing to growth in other categories included Palmolive
Greater Asia/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 767 631 527 Nutra-Fruit shower crème and the Natura Verde line of home care products. In 2009, Net sales in Europe/South Pacific
Total Oral, Personal and Home Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,688 3,582 3,143 decreased 8.5% to $3,271 as net selling price increases of 0.5% were more than offset by 0.5% in volume declines and an
Pet Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559 555 542 8.5% negative impact of foreign exchange. The 2008 divestment of a non-core brand in Germany impacted sales growth
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (758) (522) (584) for 2009 by 0.5% versus 2008. Excluding the impact of this divestment, Net sales decreased 8.0% in 2009 and volume
Total Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,489 $ 3,615 $ 3,101 was level with 2008. Organic sales in Europe/South Pacific grew 0.5% in 2009.

North America Operating profit in Europe/South Pacific decreased 1% in 2010 to $742, as a continued focus on cost-saving initiatives
was more than offset by negative sales growth, higher advertising spending and increased promotional investments. In
Net sales in North America increased 2.0% in 2010 to $3,005 as a result of 3.5% volume growth and a 1.0% positive 2009, Operating profit in Europe/South Pacific was level at $748, as a continued focus on cost-saving initiatives, lower
impact of foreign exchange, partially offset by 2.5% net selling price decreases. Organic sales in North America grew 1.0% advertising spending and lower raw and packaging material costs offset the negative impact of foreign exchange.
in 2010. Products contributing to growth in oral care included Colgate Triple Action, Colgate Sensitive MultiProtection and
Colgate Total toothpastes, Colgate 360° ActiFlex, Colgate Max White and Colgate Extra Clean manual toothbrushes and Greater Asia/Africa
the Colgate Wisp mini-brush. Products contributing to growth in other categories included Softsoap Body Butter Mega
Moisture and Irish Spring Intensify body washes, Speed Stick Stainguard deodorant and Fabuloso Aroma Sensations liquid Net sales in Greater Asia/Africa increased 13.0% in 2010 to $2,998 as volume growth of 10.5% and a 4.0% positive
cleaner. Net sales in North America increased 3.5% in 2009 to $2,950 as a result of 4.0% volume growth and level selling impact of foreign exchange were partially offset by net selling price decreases of 1.5%. Organic sales in Greater Asia/Africa
prices, partially offset by a 0.5% negative impact of foreign exchange. Organic sales in North America grew 4.0% in 2009. grew 9.0% in 2010. Volume gains were led by the Greater China region, India, Thailand, Philippines, Malaysia, Turkey and
Russia. Products driving oral care growth included Colgate Sensitive Pro-Relief, Colgate Sensitive Pro-Relief Whitening,
Operating profit in North America increased 5% to $884 in 2010 due to sales growth and cost-saving initiatives, Colgate Total and Colgate Herbal Salt toothpastes, Colgate 360° ActiFlex, Colgate Massager and Colgate Twister Gum
partially offset by increased promotional investments. In 2009, Operating profit in North America increased 22% to $843 Care manual toothbrushes and Colgate Plax Complete Care mouthwash. Products contributing to growth in other
due to sales growth, cost-saving initiatives and lower raw and packaging material costs. categories included Lady Speed Stick Breathing Skin and Mennen Speed Stick Breathe and Protect deodorants. In 2009,
Net sales in Greater Asia/Africa were level at $2,655 as volume growth of 2% and net selling prices of 6.0% were offset by
a 8.0% negative impact of foreign exchange. Organic sales in Greater Asia/Africa grew 8.0% in 2009.

Operating profit in Greater Asia/Africa increased 22% in 2010 to $767, reflecting higher sales growth and cost-saving
initiatives, partially offset by higher advertising spending. In 2009, Operating profit in Greater Asia/Africa increased 20% to
$631, reflecting higher pricing, lower raw and packaging material costs and cost-saving initiatives.

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44 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 45

 (Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

Hill’s Pet Nutrition Corporate Operating profit (loss) in 2010 showed an increased loss as compared to 2009, primarily due to the one-
time charge related to the transition to hyperinflationary accounting in Venezuela and termination benefits, primarily
Net sales for Hill’s Pet Nutrition decreased 2.5% in 2010 to $2,080 as 2.0% volume declines and 1.5% net selling price relating to ongoing overhead reduction initiatives at Hill’s of $48 and in Europe of $29, partially offset by the gain on sales
decreases were partially offset by a 1.0% positive impact of foreign exchange. Organic sales in Hill’s Pet Nutrition declined of non-core product lines in Latin America and a decrease in Corporate overhead costs. Corporate Operating profit (loss)
3.5% in 2010. Volume declined in the U.S., Russia, Japan, the Nordic countries, France and Germany, while volume gains in 2009 showed a decreased loss as compared to 2008, primarily due to charges related to the 2004 Restructuring
were achieved in Australia and South Africa. Volume was negatively impacted as a result of heightened competitive Program in 2008, offset by higher Corporate overhead costs, primarily pension and benefit costs.
activity and in part due to residual effects of price increases taken in late 2008 and early 2009 in response to significantly
higher commodity costs. The Company has taken steps to adjust on-shelf product pricing and sizing and this, combined For additional information regarding the Company’s 2004 Restructuring Program, refer to “Restructuring and Related
with the introduction of innovative new products, has resulted in increased unit consumption towards the end of 2010 as Implementation Charges” below and Note 4 to the Consolidated Financial Statements.
compared to the prior year. Successful new products within the U.S. included Science Diet Small and Toy Breed Canine,
Science Diet Healthy Mobility Canine, Science Diet Weight Loss System and Prescription Diet Therapeutic Weight Non-GAAP Financial Measures
Reduction Program. Successful products contributing to international sales included Science Diet Small and Toy Breed
Canine, Science Diet Senior Advanced Canine and Feline, Science Plan Sterilized Cat and Science Plan VetEssentials Canine Net sales growth, both worldwide and in relevant geographic divisions, is discussed in this Annual Report on Form
and Feline. In 2009, Net sales for Hill’s Pet Nutrition decreased 0.5% to $2,132 as 8.5% net selling price increases were 10-K both on a GAAP basis and excluding divestments (non-GAAP). Management believes this non-GAAP financial
more than offset by 7.5% volume declines and a 1.5% negative impact of foreign exchange. Organic sales in Hill’s Pet measure provides useful supplemental information to investors as it allows comparisons of Net sales growth from ongoing
Nutrition grew 1.0% in 2009. operations. This Annual Report on Form 10-K also discusses organic sales growth (Net sales growth excluding the impact
of foreign exchange, acquisitions and divestments) (non-GAAP). Management believes this measure provides investors
Operating profit for Hill’s Pet Nutrition increased 1% to $559 in 2010 due to cost-saving initiatives and lower raw and with useful supplemental information regarding the Company’s underlying sales trends by presenting sales growth
packaging material costs. In 2009, Operating profit increased 2% to $555 due to higher pricing, lower raw and packaging excluding the external factor of foreign exchange, as well as the impact of acquisitions and divestments.
material costs and cost-saving initiatives.
Worldwide Gross profit margin, Operating profit and the effective tax rate are discussed in this Annual Report on
Corporate Form 10-K both on a GAAP basis and excluding the impact of the one-time charge related to the transition to
hyperinflationary accounting in Venezuela as of January 1, 2010, the 2004 Restructuring Program and certain other items
Operating profit (loss) for the Corporate segment was ($758), ($522) and ($584) in 2010, 2009 and 2008, respectively. described above (non-GAAP). Management believes these measures provide investors with useful supplemental
Corporate operations include Corporate overhead costs, research and development costs, stock-based compensation information regarding the Company’s underlying business trends and performance of the Company’s ongoing operations
expense related to stock options and restricted stock awards, restructuring and related implementation costs and gains and are useful for period-over-period comparisons of such operations.
and losses on sales of non-core product lines and assets. The components of Operating profit (loss) for the Corporate
segment are presented below: The Company uses the above financial measures internally in its budgeting process and as a factor in determining
compensation. While the Company believes that these non-GAAP financial measures are useful in evaluating the
2010 2009 2008 Company’s business, this information should be considered as supplemental in nature and is not meant to be considered
Venezuela hyperinflationary transition charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (271) $ — $ — in isolation or as a substitute for the related financial information prepared in accordance with GAAP. In addition, these
Termination benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (86) — — non-GAAP financial measures may not be the same as similar measures presented by other companies.
Gain on sales of non-core product lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 — —
2004 Restructuring Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (164) Restructuring and Related Implementation Charges
Corporate overhead costs and other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (451) (522) (420)
Total Corporate Operating profit (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (758) $ (522) $ (584) The Company’s four-year restructuring and business building program (the 2004 Restructuring Program) to enhance
the Company’s global leadership position in its core businesses was finalized as of December 31, 2008. There were no
charges incurred in the years ended December 31, 2010 and 2009. Charges incurred in 2008 amounted to $164. The
restructuring accrual decreased from $15 at December 31, 2009 to $8 at December 31, 2010, primarily due to cash
payments for termination benefits, exit activities and the implementation of strategies.

Liquidity and Capital Resources

The Company expects cash flow from operations and debt issuances will be sufficient to meet foreseeable business
operating and recurring cash needs (including debt service, dividends, capital expenditures and planned stock
repurchases). The Company believes its strong cash generation and financial position should continue to allow it broad
access to global capital markets.

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46 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 47

 (Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

Cash Flow Domestic and foreign commercial paper outstanding was $214 and $0 as of December 31, 2010 and 2009,
respectively. The average daily balances outstanding for commercial paper in 2010 and 2009 were $1,146 and $1,144,
Net cash provided by operations in 2010 was $3,211 as compared with $3,277 in 2009 and $2,302 in 2008. The respectively. The maximum daily balance outstanding for commercial paper during 2010 and 2009 was $1,628 and
decrease in 2010 as compared to 2009 was due to increased working capital. The increase in 2009 as compared to 2008 $1,556, respectively. The Company regularly classifies commercial paper and certain current maturities of notes payable as
reflects improved profitability, decreased working capital and lower cash spending related to the 2004 Restructuring long-term debt as it has the intent and ability to refinance such obligations on a long-term basis, including, if necessary,
Program, partially offset by higher tax payments. by utilizing its line of credit that expires in 2012.

The Company defines working capital as the difference between current assets (excluding cash and cash equivalents Following is a summary of the Company’s commercial paper and global short-term borrowings as of December 31,
and marketable securities, the latter of which is reported in Other current assets) and current liabilities (excluding short- 2010 and 2009:
term debt). Overall, the Company’s working capital increased to 0.3% of Net sales in 2010 as compared with (0.4%) in
2009. The increase in working capital as a percentage of Net sales in 2010 was due primarily to lower accrued income 2010 2009
taxes. Weighted
Weighted Average Average Interest
Interest Rate Maturities Outstanding Rate Maturities Outstanding
Investing activities used $658 of cash during 2010 compared with uses of $841 and $613 during 2009 and 2008,
Payable to banks . . . . . . . . . . . . . . . . . 3.1% 2011 $ 48 0.7% 2010 $ 35
respectively. Capital expenditures were $550, $575 and $684 for 2010, 2009 and 2008, respectively. Lower capital
Commercial paper . . . . . . . . . . . . . . . 0.2% 2011 214 — — —
expenditures in 2010 and 2009 reflected the completion of certain capacity expansions, as well as the completion of the
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 262 $ 35
2004 Restructuring Program at the end of 2008. Capital spending continues to focus primarily on projects that yield high
aftertax returns. Overall capital expenditures for 2011 are expected to represent approximately 3.5% of Net sales.
Certain of the facilities with respect to the Company’s bank borrowings contain financial and other covenants as well
Net cash outflows from activity related to marketable securities and other investments were lower in 2010 than in as cross-default provisions. Noncompliance with these requirements could ultimately result in the acceleration of amounts
2009. During 2009, the Company purchased $210 of U.S. dollar-denominated bonds issued by a Venezuelan state- owed. The Company is in full compliance with all such requirements and believes the likelihood of noncompliance is
owned corporation and $50 of U.S. dollar-linked, devaluation-protected bonds issued by the Venezuelan government. remote. See Note 6 to the Consolidated Financial Statements for further information about the Company’s long-term
During 2010, CP Venezuela sold all of the U.S. dollar-denominated bonds to obtain U.S. dollars in order to support current debt and credit facilities.
and future operations and purchased an additional $67 of the U.S. dollar-linked, devaluation-protected bonds to reduce
the Company’s exposure to the Venezuelan bolivar fuerte. See Notes 7 and 14 to the Consolidated Financial Statements. Dividend payments in 2010 were $1,142, an increase from $981 in 2009 and $889 in 2008. Common stock dividend
Separately, during 2010, the Company invested $136 in a portfolio of euro-denominated investment grade fixed income payments increased to $2.03 per share in 2010 from $1.72 per share in 2009 and $1.56 per share in 2008. The Series B
securities, including corporate bonds. Preference stock dividend payments increased to $16.24 per share in 2010 from $13.76 per share in 2009 and $12.48 per
share in 2008. On February 4, 2010, the Company’s Board of Directors increased the quarterly common stock cash
Financing activities used $2,624 of cash during 2010 compared to $2,270 and $1,530 during 2009 and 2008, dividend to $0.53 per share, effective as of the second quarter 2010.
respectively. The increase in 2010 was primarily due to higher repurchases of common stock and dividends paid, partially
offset by higher net proceeds from issuances of debt. The increase in 2009 was primarily due to higher net debt payments The Company repurchases shares of its common stock in the open market and in private transactions to maintain its
and an increase in dividends paid. targeted capital structure and to fulfill certain requirements of its compensation and benefit plans. On February 4, 2010
the Company’s Board of Directors authorized a new share repurchase program (the 2010 Program) that replaced the
Long-term debt increased to $3,376 as of December 31, 2010 as compared to $3,147 as of December 31, 2009 and Company’s previous share repurchase program which had been approved in 2008 (the 2008 Program). The 2010 Program
total debt increased to $3,424 as of December 31, 2010 as compared to $3,182 as of December 31, 2009. During the authorizes the repurchase of up to 40 million shares of the Company’s common stock.
fourth quarter of 2010, the Company issued $250 of ten-year notes at a fixed rate of 2.95% and $188 of five-year notes at
a fixed rate of 1.375% under the Company’s shelf registration statement. Proceeds from the debt issuances were used to Aggregate repurchases in 2010 included 24.4 million common shares under both the 2010 Program and the 2008
reduce commercial paper borrowings. During the third quarter of 2009, the Company issued $300 of U.S. dollar- Program, and 1.0 million common shares to fulfill the requirements of compensation and benefit plans, for a total
denominated six-year notes at a fixed rate of 3.15% under the Company’s shelf registration statement. Proceeds from the purchase price of $2,020. Aggregate repurchases in 2009 included 13.9 million common shares under the 2008 Program
debt issuance were used to reduce commercial paper and other borrowings. and 1.0 million common shares to fulfill the requirements of compensation and benefit plans, for a total purchase price of
$1,063. Aggregate repurchases in 2008 included 13.8 million common shares under the 2008 Program and the
At December 31, 2010, the Company had access to unused domestic and foreign lines of credit of $2,317 and could repurchase program approved by the Board in 2006, and 0.9 million common shares to fulfill the requirements of
also issue medium-term notes pursuant to an effective shelf registration statement. The Company has borrowing capacity compensation and benefit plans, for a total purchase price of $1,073.
under its domestic revolving credit facility of $1,600, and the facility has an expiration date of November 2012. These
domestic lines are available for general corporate purposes and to support the issuance of commercial paper.

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48 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 49

 (Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

The following represents the scheduled maturities of the Company’s contractual obligations as of December 31, Managing Foreign Currency, Interest Rate and Commodity Price Exposure
2010:
The Company is exposed to market risk from foreign currency exchange rates, interest rates and commodity price
Payments Due by Period fluctuations. Volatility relating to these exposures is managed on a global basis by utilizing a number of techniques,
Total 2011 2012 2013 2014 2015 Thereafter including working capital management, selling price increases, selective borrowings in local currencies and entering into
Long-term debt including selective derivative instrument transactions, issued with standard features, in accordance with the Company’s treasury
current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,376 $ 775 $ 359 $ 268 $ 332 $ 481 $ 1,161 and risk management policies. The Company’s treasury and risk management policies prohibit the use of derivatives for
Net cash interest payments on speculative purposes and leveraged derivatives for any purpose.
long-term debt(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 539 84 67 63 55 44 226
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,225 187 163 137 119 111 508 The sensitivity of our financial instruments to market fluctuations is discussed below. See Notes 2 and 7 to the
Purchase obligations(2) . . . . . . . . . . . . . . . . . . . . . . . . 523 317 124 45 24 13 — Consolidated Financial Statements for further discussion of derivatives and hedging policies and fair value measurements.
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,663 $ 1,363 $ 713 $ 513 $ 530 $ 649 $ 1,895
Foreign Exchange Risk
(1)
Includes the net interest payments on fixed and variable rate debt and associated interest rate swaps. Interest
payments associated with floating rate instruments are based on management’s best estimate of projected interest As the Company markets its products in over 200 countries and territories, it is exposed to currency fluctuations
rates for the remaining term of variable rate debt. related to manufacturing and selling its products in currencies other than the U.S. dollar. The Company’s foreign currency
(2)
The Company had outstanding contractual obligations with suppliers at the end of 2010 for the purchase of raw, exposures primarily reflect the Company’s operations in Latin America (27% of Net sales), Europe/South Pacific (21% of
packaging and other materials and services in the normal course of business. These purchase obligation amounts Net sales) and Asia/Africa (19% of Net sales). The Company manages its foreign currency exposures through a
represent only those items which are based on agreements that are enforceable and legally binding and that combination of cost-containment measures, selling price increases and the hedging of certain costs in an effort to
specify minimum quantity, price and term and do not represent total anticipated purchases. minimize the impact on earnings of foreign currency rate movements. See the “Results of Operations” section above for
discussion of the foreign exchange impact on Net sales in each segment.
Long-term liabilities associated with the Company’s postretirement plans are excluded from the table above due to
the uncertainty of the timing of these cash disbursements. The amount and timing of cash funding related to these The assets and liabilities of foreign subsidiaries, other than those operating in highly inflationary environments, are
benefit plans will generally depend on local regulatory requirements, various economic assumptions (the most significant translated into U.S. dollars at year-end exchange rates with resulting translation gains and losses accumulated in a
of which are detailed in “Critical Accounting Policies and Use of Estimates,” below) and voluntary Company contributions. separate component of shareholders’ equity. Income and expense items are translated into U.S. dollars at average rates of
Based on current information, the Company does not anticipate having to make any mandatory contributions to its exchange prevailing during the year.
qualified U.S. pension plan until 2012. Management’s best estimate of cash requirements to be paid directly from the
Company’s assets for its postretirement plans for the year ending December 31, 2011, is approximately $208, including For subsidiaries operating in highly inflationary environments (currently, Venezuela), inventories, prepaids, goodwill
approximately $100 of voluntary contributions to our U.S. pension plans. and property, plant and equipment are remeasured at their historical exchange rates, while other assets and liabilities are
remeasured at year-end exchange rates. Remeasurement adjustments for these operations are included in Net income
Additionally, liabilities for unrecognized income tax benefits are excluded from the table above as the Company is attributable to Colgate-Palmolive Company.
unable to reasonably predict the ultimate amount or timing of a settlement of such liabilities. See Note 11 to the
Consolidated Financial Statements for more information. The Company primarily utilizes foreign currency contracts, including forward, option and swap contracts, local
currency deposits and local currency borrowings to hedge portions of its exposures relating to foreign currency purchases,
As more fully described in Note 13 to the Consolidated Financial Statements, the Company is contingently liable with assets and liabilities created in the normal course of business and the net investment in certain foreign subsidiaries. The
respect to lawsuits, environmental matters, taxes and other matters arising in the ordinary course of business. duration of foreign currency contracts generally does not exceed 12 months and the contracts are valued using
observable market rates.
Off-Balance Sheet Arrangements
The Company’s foreign currency forward contracts that qualify for cash flow hedge accounting resulted in net
The Company does not have off-balance sheet financing or unconsolidated special purpose entities. unrealized losses of $3 at December 31, 2010 and net unrealized gains of $4 at December 31, 2009. Changes in the fair
value of cash flow hedges are recorded in Other comprehensive income (loss) and are reclassified into earnings in the
same period or periods during which the underlying hedged transaction is recognized in earnings. At the end of 2010, an
unfavorable 10% change in exchange rates would have resulted in a net unrealized loss of $40.

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50 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 51

 (Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

Interest Rate Risk  Shipping and handling costs may be reported as either a component of cost of sales or selling, general and
administrative expenses. The Company reports such costs, primarily related to warehousing and outbound
The Company manages its targeted mix of fixed and floating rate debt with debt issuances and by entering into freight, in the Consolidated Statements of Income as a component of Selling, general and administrative
interest rate swaps in order to mitigate fluctuations in earnings and cash flows that may result from interest rate volatility. expenses. Accordingly, the Company’s gross profit margin is not comparable with the gross profit margin of
The notional amount, interest payment and maturity date of the swaps match the principal, interest payment and those companies that include shipping and handling charges in cost of sales. If such costs had been included in
maturity date of the related debt in all cases, and the swaps are valued using observable benchmark rates. cost of sales, gross profit margin as a percent of sales would have decreased by 730 bps, from 59.1% to 51.8%,
in 2010 and decreased by 730 and 780 bps in 2009 and 2008, respectively, with no impact on reported earnings.
Based on year-end 2010 variable rate debt levels, a 1-percentage-point increase in interest rates would have increased
Interest expense, net by $14 in 2010.  The Company accounts for inventories using both the first-in, first-out (FIFO) method (79% of inventories) and
the last-in, first-out (LIFO) method (21% of inventories). There would have been no material impact on reported
Commodity Price Risk earnings for 2010, 2009 and 2008 had all inventories been accounted for under the FIFO method.

The Company is exposed to price volatility related to raw materials used in production, such as resins, tallow, essential The areas of accounting that involve significant or complex judgments and estimates are pensions and other
oils, tropical oils, corn and soybeans. The Company manages its raw material exposures through a combination of cost postretirement benefits, stock options, asset impairments, uncertain tax positions, tax valuation allowances and legal and
containment measures, ongoing productivity initiatives and the limited use of commodity hedging contracts. Futures other contingencies.
contracts are used on a limited basis, primarily in the Pet Nutrition segment, to manage volatility related to anticipated raw
material inventory purchases of certain traded commodities.  In pension accounting, the most significant actuarial assumptions are the discount rate and the long-term rate of
return on plan assets. The discount rate for U.S. defined benefit plans was 5.30%, 5.75% and 6.30% as of
The Company’s open commodity derivative contracts, which qualify for cash flow hedge accounting, resulted in net December 31, 2010, 2009 and 2008, respectively. The discount rate for other U.S. postretirement plans was
unrealized gains of $4 and $0 for the years ended December 31, 2010 and 2009, respectively. At the end of 2010, an 5.30%, 5.75% and 5.80% as of December 31, 2010, 2009 and 2008, respectively. Discount rates used for the
unfavorable 10% change in commodity futures prices would have reduced the net unrealized gain to $2. U.S. defined benefit and other postretirement plans are based on a yield curve constructed from a portfolio of
high-quality bonds for which the timing and amount of cash outflows approximate the estimated payouts of the
Credit Risk U.S. plans. For the Company’s international plans, the discount rates are set by benchmarking against
investment-grade corporate bonds rated AA. The assumed long-term rate of return on plan assets for U.S. plans
The Company is exposed to the risk of credit loss in the event of nonperformance by counterparties to financial was 8.0% as of December 31, 2010, 2009 and 2008. In determining the long-term rate of return, the Company
instrument contracts; however, nonperformance is considered unlikely as it is the Company’s policy to contract with considers the nature of the plans’ investments, an expectation for the plans’ investment strategies and the
highly rated, diverse counterparties. historical rate of return.

Recent Accounting Pronouncements 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 12%, 5%, 5%, 7%, and 8%, respectively. In addition, the current rate of return assumption for the
No new accounting pronouncement issued or which became effective during the fiscal year has had or is expected to U.S. plans is based upon a targeted asset allocation of approximately 40% in fixed income securities, 52% in
have a material impact on the Consolidated Financial Statements. equity securities and 8% in real estate and alternative investments. A 1% change in the assumed rate of return
on plan assets of the U.S. pension plans would impact future Net income attributable to Colgate-Palmolive
Critical Accounting Policies and Use of Estimates Company by approximately $2. A 1% change in the discount rate for the U.S. pension plans would impact future
Net income attributable to Colgate-Palmolive Company by approximately $7. A third assumption is the long-term
The preparation of financial statements requires management to use judgment and make estimates. The level of rate of compensation increase, a change in which would partially offset the impact of a change in either the
uncertainty in estimates and assumptions increases with the length of time until the underlying transactions are discount rate or the long-term rate of return. This rate was 4.0% as of December 31, 2010, 2009 and 2008. Refer
completed. Actual results could ultimately differ from those estimates. The accounting policies that are most critical in the to Note 10 to the Consolidated Financial Statements for further discussion of the Company’s pension and other
preparation of the Company’s Consolidated Financial Statements are those that are both important to the presentation of postretirement plans.
the Company’s financial condition and results of operations and require significant or complex judgments and estimates
on the part of management. The Company’s critical accounting policies are reviewed periodically with the Audit  The assumption requiring the most judgment in accounting for other postretirement benefits is the medical cost
Committee of the Board of Directors. trend rate. The Company reviews external data and its own historical trends for health care costs to determine
the medical cost trend rate. The assumed rate of increase is 8.33% for 2011, declining to 5.00% by 2016 and
In certain instances, accounting principles generally accepted in the United States of America allow for the selection of remaining at 5.00% for the years thereafter. The effect of a 1% increase in the assumed long-term medical cost
alternative accounting methods. The Company’s significant policies that involve the selection of alternative methods are trend rate would reduce Net income attributable to Colgate-Palmolive Company by $5.
accounting for shipping and handling costs and inventories.
 The Company recognizes the cost of employee services received in exchange for awards of equity instruments,
such as stock options and restricted stock, based on the fair value of those awards at the date of grant. The
Company uses the Black-Scholes-Merton (Black-Scholes) option pricing model to determine the fair value of
stock-option awards. The weighted-average estimated fair value of each stock option granted for the year ended
December 31, 2010 was $11.00. The Black-Scholes model uses various assumptions to determine the fair value of
options. These assumptions include the expected term of options, expected volatility, risk-free interest rate and
expected dividend yield. While these assumptions do not require significant judgment, as the significant inputs
are determined from historical experience or independent third-party sources, changes in these inputs could
result in significant changes in fair value. A one-year change in term would result in a change in fair value of
approximately 7%. A one percent change in volatility would change fair value by approximately 5%.
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52 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 53

 (Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

 The asset impairment analysis performed for goodwill and intangible assets requires several estimates, including ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
future cash flows, growth rates and the selection of a discount rate. Since the estimated fair value of the
Company’s intangible assets substantially exceeds the recorded book value, it is not reasonably likely that See “Managing Foreign Currency, Interest Rate and Commodity Price Exposure” in Item 7.
significant changes in these estimates would occur that would result in an impairment charge related to these
assets. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 The recognition and measurement of uncertain tax positions involves consideration of the amounts and See “Index to Financial Statements.”
probabilities of various outcomes that could be realized upon ultimate settlement.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
 Tax valuation allowances are established to reduce tax assets such as tax loss carryforwards, to net realizable FINANCIAL DISCLOSURE
value. Factors considered in estimating net realizable value include historical results by tax jurisdiction,
carryforward periods, income tax strategies and forecasted taxable income. None.

 Legal and other contingency reserves are based on management’s assessment of the risk of potential loss, which
includes consultation with outside legal counsel and advisors. Such assessments are reviewed each period and
revised, based on current facts and circumstances, if necessary. While it is possible that the Company’s cash flows
and results of operations in a particular quarter or year could be materially affected by the impact of such
contingencies, it is the opinion of management that these matters will not have a material impact on the
Company’s financial position, ongoing results of operations or cash flows. Refer to Note 13 to the Consolidated
Financial Statements for further discussion of the Company’s contingencies.

The Company generates revenue through the sale of well-known consumer products to trade customers under
established trading terms. While the recognition of revenue and receivables requires the use of estimates, there is a short
time frame (typically less than 60 days) between the shipment of product and cash receipt, thereby reducing the level of
uncertainty in these estimates. Refer to Note 2 to the Consolidated Financial Statements for further description of the
Company’s significant accounting policies.

Cautionary Statement on Forward-Looking Statements

This Annual Report on Form 10-K may contain “forward-looking statements” as that term is defined in the Private
Securities Litigation Reform Act of 1995 or by the SEC in its rules, regulations and releases. Such statements may relate, for
example, to sales or unit volume growth, organic sales growth, profit or profit margin growth, earnings growth, financial
goals, the impact of currency devaluations and exchange controls, in particular, in Venezuela, cost-reduction plans, tax
rates, new product introductions or commercial investment levels, among other matters. These statements are made on
the basis of the Company’s views and assumptions as of this time and the Company undertakes no obligation to update
these statements. Moreover, the Company does not, nor does any other person, assume responsibility for the accuracy
and completeness of those statements. The Company cautions investors that any such forward-looking statements are
not guarantees of future performance and that actual events or results may differ materially from those statements. Actual
events or results may differ materially because of factors that affect international businesses and global economic
conditions, as well as matters specific to us and the markets we serve, including the uncertain economic environment in
different countries and its effect on consumer spending habits, increased competition and evolving competitive practices,
currency rate fluctuations, exchange controls, changes in foreign or domestic laws or regulations or their interpretation,
political and fiscal developments, the availability and cost of raw and packaging materials, our ability to maintain or
increase selling prices as needed, changes in the policies of retail trade customers and our ability to continue lowering
costs. For information about these and other factors that could impact our business and cause actual results to differ
materially from forward-looking statements, refer to “Risk Factors” in Item 1A.

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54 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 55

 ITEM 9A. CONTROLS AND PROCEDURES PART III

Evaluation of Disclosure Controls and Procedures ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The Company’s management, under the supervision and with the participation of the Company’s Chairman of the See “Executive Officers of the Registrant” in Part I of this report.
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, 2010 (the Evaluation). Additional information required by this Item relating to directors, executive officers and corporate governance of the
Based upon the Evaluation, the Company’s Chairman of the Board, President and Chief Executive Officer and Chief registrant and information regarding compliance with Section 16(a) of the Exchange Act is incorporated herein by
Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the reference to the Company’s Proxy Statement for its 2011 Annual Meeting of Stockholders (the 2011 Proxy Statement).
Exchange Act) are effective.
Code of Ethics
Management’s Annual Report on Internal Control over Financial Reporting
The Company’s Code of Conduct promotes the highest ethical standards in all of the Company’s business dealings.
The Company’s management is responsible for establishing and maintaining adequate internal control over financial The Code of Conduct satisfies the SEC’s requirements for a Code of Ethics for senior financial officers and applies to all
reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Management, under the supervision and Company employees, including the Chairman, President and Chief Executive Officer, the Chief Financial Officer and the
with the participation of the Company’s Chairman of the Board, President and Chief Executive Officer and Chief Financial Chief Accounting Officer, and the Company’s directors. The Code of Conduct is available on the Company’s web site at
Officer, conducted an evaluation of the Company’s internal control over financial reporting based upon the framework in www.colgate.com. Any amendment to the Code of Conduct will promptly be posted on the Company’s web site. It is the
Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Company’s policy not to grant waivers of the Code of Conduct. In the extremely unlikely event that the Company grants
Commission and concluded that it is effective as of December 31, 2010. an executive officer a waiver from a provision of the Code of Conduct, the Company will promptly disclose such
information by posting it on its web site or by using other appropriate means in accordance with SEC rules.
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, 2010, and has expressed an ITEM 11. EXECUTIVE COMPENSATION
unqualified opinion in their report, which appears in this report.
The information regarding executive compensation set forth in the 2011 Proxy Statement is incorporated herein by
Changes in Internal Control over Financial Reporting reference.

There were no changes in the Company’s internal control over financial reporting that occurred during the ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the RELATED STOCKHOLDER MATTERS
Company’s internal control over financial reporting.
(a) The information regarding security ownership of certain beneficial owners and management set forth in the 2011
ITEM 9B. OTHER INFORMATION Proxy Statement is incorporated herein by reference.

Mr. David W. Johnson, 78, one of the independent directors of the Board of Directors of the Company, has advised (b) The registrant does not know of any arrangements that may at a subsequent date result in a change in control
the Company that he will not stand for re-election to the Board of Directors at the Annual Meeting of Stockholders to be of the registrant.
held on May 6, 2011, in light of his desire to retire as a director at the end of his current term. Mr. Johnson has served as a
director since 1991. (c) Equity compensation plan information as of December 31, 2010:

(a) (b) (c)

Number of securities
remaining available for
future issuance under
Number of securities to Weighted-average equity compensation
be issued upon exercise exercise price of plans (excluding
of outstanding options, outstanding securities reflected in
warrants and rights options, column (a))
Plan Category (in thousands) warrants and rights (in thousands)
Equity compensation plans approved by security
holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,294(1) $ 62(2) 23,941(3)
Equity compensation plans not approved by security
holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable Not applicable Not applicable
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27,294 $ 62 23,941
(1)
Consists of 24,517 options outstanding and 2,777 restricted shares awarded but not yet vested under the
Company’s Stock Option and Incentive Stock Plans, respectively, which are more fully described in Note 8 to the
Consolidated Financial Statements.
(2)
Includes the weighted-average exercise price of stock options outstanding of $69 and restricted shares of $0.
(3)
Amount includes 13,723 options available for issuance under the Company’s Stock Option Plans and 10,218 of
restricted shares available for issuance under the Company’s Incentive Stock Plan.

30 31

56 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 57

 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE PART IV

The information regarding certain relationships and related transactions and director independence set forth in the ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
2011 Proxy Statement is incorporated herein by reference.
(a) Financial Statements and Financial Statement Schedules
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
See “Index to Financial Statements.”
The information regarding auditor fees and services set forth in the 2011 Proxy Statement is incorporated herein by
reference. (b) Exhibits

See “Exhibits to Form 10-K.”

32 33

58 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 59

 COLGATE-PALMOLIVE COMPANY Index to Financial Statements
SIGNATURES
Page
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly Consolidated Financial Statements
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
COLGATE-PALMOLIVE COMPANY
(Registrant) Consolidated Statements of Income for the years ended December 31, 2010, 2009 and 2008 . . . . . . . . . . . . . . . . . . . . 37

Date: February 24, 2011 By /s/ IAN COOK Consolidated Balance Sheets as of December 31, 2010 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Ian Cook
Chairman of the Board, President and Consolidated Statements of Changes in Shareholders’ Equity for the years ended
Chief Executive Officer
December 31, 2010, 2009 and 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February
24, 2011, by the following persons on behalf of the registrant and in the capacities indicated. Consolidated Statements of Comprehensive Income for the years ended December 31, 2010, 2009 and 2008 . . . . . 40

Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008. . . . . . . . . . . . . . . . . 41
(a) Principal Executive Officer (d) Directors:

/s/ IAN COOK John T. Cahill, Ian Cook, Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Ian Cook Helene D. Gayle, Ellen M. Hancock
Financial Statement Schedule
Chairman of the Board, President and Joseph Jimenez, David W. Johnson
Chief Executive Officer Richard J. Kogan, Delano E. Lewis
Schedule II - Valuation and Qualifying Accounts for the years ended December 31, 2010, 2009 and 2008 . . . . . . . . . 75
J. Pedro Reinhard, Stephen I. Sadove
Selected Financial Data
(b) Principal Financial Officer
Market and Dividend Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
/s/ DENNIS J. HICKEY /s/ ANDREW D. HENDRY
Dennis J. Hickey Andrew D. Hendry
Chief Financial Officer As Attorney-in-Fact
Historical Financial Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

All other financial statements and schedules not listed have been omitted since the required information is included in
(c) Principal Accounting Officer
the financial statements or the notes thereto or is not applicable or required.
/s/ VICTORIA L. DOLAN
Victoria L. Dolan
Vice President and
Corporate Controller

34 35

60 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 61

 Report of Independent Registered Public Accounting Firm COLGATE-PALMOLIVE COMPANY

To the Board of Directors and Shareholders of Consolidated Statements of Income

Colgate-Palmolive Company
For the years ended December 31,
In our opinion, the consolidated financial statements listed in the accompanying index present fairly, in all material
respects, the financial position of Colgate-Palmolive Company and its subsidiaries (the Company) at December 31, 2010 (Dollars in Millions Except Per Share Amounts)
and 2009, and the results of their operations and their cash flows for each of the three years in the period ended
December 31, 2010 in conformity with accounting principles generally accepted in the United States of America. In 2010 2009 2008
addition, in our opinion, the financial statement schedule listed in the accompanying index presents fairly, in all material Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,564 $ 15,327 $ 15,330
respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,360 6,319 6,704
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,204 9,008 8,626
of December 31, 2010, based on criteria established in Internal Control - Integrated Framework issued by the Committee Selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,414 5,282 5,422
of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these Other (income) expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 111 103
financial statements and financial statement schedule, for maintaining effective internal control over financial reporting Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,489 3,615 3,101
and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Interest expense, net 59 77 96
Report on Internal Control over Financial Reporting, appearing under Item 9A. Our responsibility is to express opinions on Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,430 3,538 3,005
these financial statements, on the financial statement schedule, and on the Company’s internal control over financial Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,117 1,141 968
reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Net income including noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,313 2,397 2,037
Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to Less: Net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . 110 106 80
obtain reasonable assurance about whether the financial statements are free of material misstatement and whether Net income attributable to Colgate-Palmolive Company . . . . . . . . . . . . . . . . . . . . . $ 2,203 $ 2,291 $ 1,957
effective internal control over financial reporting was maintained in all material respects. Our audits of the financial Earnings per common share, basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4.45 $ 4.53 $ 3.81
statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial Earnings per common share, diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4.31 $ 4.37 $ 3.66
statements, assessing the accounting principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also
included performing such other procedures as we considered necessary in the circumstances. We believe that our audits
provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and
procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the
financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

/s/ PRICEWATERHOUSECOOPERS LLP

New York, New York
February 24, 2011

See Notes to Consolidated Financial Statements.

36 37

62 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 63

 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Consolidated Balance Sheets Consolidated Statements of Changes in Shareholders’ Equity

As of December 31, (Dollars in Millions)

(Dollars in Millions Except Per Share Amounts) Colgate-Palmolive Company Shareholders’ Equity
Accumulated
Additional Other
2010 2009 Preference Common Paid-In Unearned Treasury Retained Comprehensive Noncontrolling
Stock Stock Capital Compensation Stock Earnings Income (Loss) Interests
Assets
Balance, January 1, 2008 . . . . . . $ 198 $ 733 $ 1,518 $ (219) $ (8,904) $ 10,628 $ (1,667) $ 110
Current Assets Net income . . . . . . . . . . . . . . . . . . . 1,957 80
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 490 $ 600 Other comprehensive income,
Receivables (net of allowances of $53 and $52, respectively) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,610 1,626 net of tax . . . . . . . . . . . . . . . . . . . (810) (5)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,222 1,209 Dividends declared:
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408 375 Series B Convertible
Preference stock, net of
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,730 3,810
taxes . . . . . . . . . . . . . . . . . . . . . (28)
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,693 3,516 Common stock . . . . . . . . . . . . . (797)
Goodwill, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,362 2,302 Noncontrolling interests in
Other intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 831 821 Company’s subsidiaries . . . (64)
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 556 685 Stock-based compensation
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,172 $ 11,134 expense . . . . . . . . . . . . . . . . . . . . 100
Shares issued for stock options 61 157
Liabilities and Shareholders’ Equity Treasury stock acquired . . . . . . . (1,073)
Current Liabilities Preference stock conversion . . . (17) (66) 83
Notes and loans payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 48 $ 35 Other . . . . . . . . . . . . . . . . . . . . . . . . . (3) 32 40
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 561 326 Balance, December 31, 2008 . . $ 181 $ 733 $ 1,610 $ (187) $ (9,697) $ 11,760 $ (2,477) $ 121
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,165 1,172 Net income . . . . . . . . . . . . . . . . . . . 2,291 106
Other comprehensive income,
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272 387
net of tax . . . . . . . . . . . . . . . . . . . 381 1
Other accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,682 1,679 Dividends declared:
Total current liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,728 3,599 Series B Convertible
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,815 2,821 Preference stock, net of
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 82 taxes . . . . . . . . . . . . . . . . . . . . . (30)
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,704 1,375 Common stock .................... (864)
Noncontrolling interests in
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,355 7,877 Company’s subsidiaries . . . (87)
Commitments and contingent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — Stock-based compensation
Shareholders’ Equity expense . . . . . . . . . . . . . . . . . . . . 117
Preference stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 169 Shares issued for stock options 92 175
Common stock, $1 par value (2,000,000,000 shares authorized, 732,853,180 Treasury stock acquired . . . . . . . (1,063)
Preference stock conversion . . . (12) (48) 60
shares issued) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 733 733 Other . . . . . . . . . . . . . . . . . . . . . . . . . (7) 54 47
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,132 1,764 Balance, December 31, 2009 . . $ 169 $ 733 $ 1,764 $ (133) $ (10,478) $ 13,157 $ (2,096) $ 141
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,329 13,157 Net income . . . . . . . . . . . . . . . . . . . 2,203 110
Accumulated other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,115) (2,096) Other comprehensive income,
14,079 13,727 net of tax . . . . . . . . . . . . . . . . . . . (19) 2
Unearned compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (99) (133) Dividends declared:
Series B Convertible
Treasury stock, at cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11,305) (10,478) Preference stock, net of
Total Colgate-Palmolive Company shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,675 3,116 taxes . . . . . . . . . . . . . . . . . . . . . (34)
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 141 Common stock . . . . . . . . . . . . . (997)
Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,817 3,257 Noncontrolling interests in
Total liabilities and shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,172 $ 11,134 Company’s subsidiaries . . . (111)
Stock-based compensation
expense . . . . . . . . . . . . . . . . . . . . 121
Shares issued for stock options 56 153
Treasury stock acquired . . . . . . . (2,020)
Preference stock conversion . . . (169) (813) 982
Other . . . . . . . . . . . . . . . . . . . . . . . . . 4 34 58
Balance, December 31,
2010 . . . . . . . . . . . . . . . . . . . . . . $ — $ 733 $ 1,132 $ (99) $ (11,305) $ 14,329 $ (2,115) $ 142

See Notes to Consolidated Financial Statements.

See Notes to Consolidated Financial Statements.
38 39

64 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 65

 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Consolidated Statements of Comprehensive Income Consolidated Statements of Cash Flows

(Dollars in Millions) For the years ended December 31,

Colgate- (Dollars in Millions Except Per Share Amounts)

Palmolive Noncontrolling
Company Interests Total
2010 2009 2008
For the year ended December 31, 2008: Operating Activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,957 $ 80 $ 2,037 Net income including noncontrolling interests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,313 $ 2,397 $ 2,037
Other comprehensive income, net of tax: Adjustments to reconcile net income to net cash provided by operations:
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (450) (5) (455) Venezuela hyperinflationary transition charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 271 — —
Retirement Plan and other retiree benefit adjustments . . . . . . . . . . . . . . . . . . (352) — (352) Restructuring, net of cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (18) (50)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) — (8) Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 376 351 348
Total Other comprehensive income, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . (810) (5) (815) Termination benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 — —
Gain before tax on sales of non-core product lines . . . . . . . . . . . . . . . . . . . . . . . . . (50) (5) —
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,147 $ 75 $ 1,222 Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 117 100
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 (23) (6)
For the year ended December 31, 2009: Cash effects of changes in:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,291 $ 106 $ 2,397 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 57 (70)
Other comprehensive income, net of tax: Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10) 44 (135)
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 346 1 347 Accounts payable and other accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (65) 294 125
Retirement Plan and other retiree benefit adjustments . . . . . . . . . . . . . . . . . . 8 — 8 Other non-current assets and liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 63 (47)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 — 27 Net cash provided by operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,211 3,277 2,302
Total Other comprehensive income, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 1 382 Investing Activities
Capital expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (550) (575) (684)
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,672 $ 107 $ 2,779 Sale of property and non-core product lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 17 58
Purchases of marketable securities and investments . . . . . . . . . . . . . . . . . . . . . . . . . . (308) (289) —
For the year ended December 31, 2010: Proceeds from sales of marketable securities and investments . . . . . . . . . . . . . . . . . 167 — 10
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,203 $ 110 $ 2,313 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9) 6 3
Other comprehensive income, net of tax: Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (658) (841) (613)
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 2 164 Financing Activities
Retirement Plan and other retiree benefit adjustments . . . . . . . . . . . . . . . . . . (143) — (143) Principal payments on debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,719) (3,950) (2,320)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (38) — (38) Proceeds from issuance of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,015 3,424 2,515
Total Other comprehensive income, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . (19) 2 (17) Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,142) (981) (889)
Purchases of treasury shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,020) (1,063) (1,073)
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,184 $ 112 $ 2,296 Proceeds from exercise of stock options and excess tax benefits . . . . . . . . . . . . . . . 242 300 237
Net cash used in financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,624) (2,270) (1,530)
Effect of exchange rate changes on Cash and cash equivalents . . . . . . . . . . . . . . . . . (39) (121) (33)
Net (decrease) increase in Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . (110) 45 126
Cash and cash equivalents at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600 555 429
Cash and cash equivalents at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 490 $ 600 $ 555
Supplemental Cash Flow Information
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,123 $ 1,098 $ 862
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 98 119
Principal payments on ESOP debt, guaranteed by the Company . . . . . . . . . . . . . . . . — 74 64

See Notes to Consolidated Financial Statements. See Notes to Consolidated Financial Statements.
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66 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 67

 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

1. Nature of Operations Revenue Recognition

The Company manufactures and markets a wide variety of products in the U.S. and around the world in two distinct Sales are recorded at the time products are shipped to trade customers and when risk of ownership transfers. Net
business segments: Oral, Personal and Home Care; and Pet Nutrition. Oral, Personal and Home Care products include sales reflect units shipped at selling list prices reduced by sales returns and the cost of current and continuing promotional
toothpaste, toothbrushes and mouth rinses, bar and liquid hand soaps, shower gels, shampoos, conditioners, programs. Current promotional programs, such as product listing allowances and co-operative advertising arrangements,
deodorants and antiperspirants, laundry and dishwashing detergents, fabric conditioners, household cleaners, bleaches are recorded in the period incurred. Continuing promotional programs are predominantly consumer coupons and volume-
and other similar items. These products are sold primarily to wholesale and retail distributors worldwide. Pet Nutrition based sales incentive arrangements with trade customers. The redemption cost of consumer coupons is based on
products include specialty pet nutrition products manufactured and marketed by Hill’s Pet Nutrition. The principal historical redemption experience and is recorded when coupons are distributed. Volume-based incentives offered to trade
customers for Pet Nutrition products are veterinarians and specialty pet retailers. Principal global and regional trademarks customers are based on the estimated cost of the program and are recorded as products are sold.
include Colgate, Palmolive, Mennen, Speed Stick, Lady Speed Stick, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, Elmex,
Tom’s of Maine, Ajax, Axion, Fabuloso, Soupline, Suavitel, Hill’s Science Diet and Hill’s Prescription Diet. Shipping and Handling Costs

The Company’s principal classes of products accounted for the following percentages of worldwide sales for the past Shipping and handling costs are classified as Selling, general and administrative expenses and were $1,142, $1,116
three years: and $1,193 for the years ended December 31, 2010, 2009 and 2008, respectively.

2010 2009 2008 Marketing Costs

Oral Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43% 41% 41%
Home Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22% 23% 23% The Company markets its products through advertising and other promotional activities. Advertising costs are included
Personal Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22% 22% 22% in Selling, general and administrative expenses and are expensed as incurred. Certain consumer and trade promotional
Pet Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13% 14% 14% programs, such as consumer coupons, are recorded as a reduction of sales.
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100% 100%
Cash and Cash Equivalents
2. Summary of Significant Accounting Policies
The Company considers all highly liquid investments with original maturities of three months or less to be cash
Principles of Consolidation equivalents.

The Consolidated Financial Statements include the accounts of Colgate-Palmolive Company and its majority-owned Inventories
subsidiaries. Intercompany transactions and balances have been eliminated. The Company’s investments in consumer
products companies with interests ranging between 20% and 50%, where the Company has significant influence over the Inventories are stated at the lower of cost or market. The cost of approximately 79% of inventories is determined
investee, are accounted for using the equity method. Net income (loss) from such investments is recorded in Other using the first-in, first-out (FIFO) method. The cost of all other inventories, predominantly in the U.S. and Mexico, is
(income) expense, net in the Consolidated Statements of Income. As of December 31, 2010 and 2009, equity method determined using the last-in, first-out (LIFO) method.
investments included in Other assets were $17 and $15, respectively. Unrelated third parties hold the remaining
ownership interests in these investments. Investments with less than a 20% interest are accounted for using the cost Property, Plant and Equipment
method.
Land, buildings and machinery and equipment are stated at cost. Depreciation is provided, primarily using the
Use of Estimates straight-line method, over estimated useful lives ranging from 3 to 15 years for machinery and equipment and up to 40
years for buildings.
The preparation of financial statements in accordance with accounting principles generally accepted in the United
States of America requires management to use judgment and make estimates that affect the reported amounts of assets Goodwill and Other Intangibles
and liabilities and disclosure of contingent gains and losses at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. The level of uncertainty in estimates and assumptions Goodwill and indefinite life intangible assets, such as the Company’s global brands, are subject to impairment tests at
increases with the length of time until the underlying transactions are completed. As such, the most significant least annually. These tests were performed and did not result in an impairment charge. Other intangible assets with finite
uncertainty in the Company’s assumptions and estimates involved in preparing the financial statements includes pension lives, such as trademarks, local brands and non-compete agreements, are amortized over their useful lives, ranging from 5
and other retiree benefit cost assumptions, stock-based compensation, asset impairment, uncertain tax positions, tax to 40 years.
valuation allowances and legal and other contingency reserves. Additionally, the Company uses available market
information and other valuation methodologies in assessing the fair value of financial instruments and retirement plan
assets. 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. Actual results could ultimately differ
from those estimates.

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68 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 69

 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

Income Taxes For subsidiaries operating in highly inflationary environments, non-monetary assets, such as inventories, prepaids,
goodwill and property, plant and equipment are remeasured at their historical exchange rates, while monetary assets and
The provision for income taxes is determined using the asset and liability method. Under this method, deferred tax liabilities are remeasured at year-end exchange rates. Remeasurement adjustments for these operations are included in
assets and liabilities are recognized based upon the differences between the financial statement and tax bases of assets Net income attributable to Colgate-Palmolive Company.
and liabilities using enacted tax rates that will be in effect at the time such differences are expected to reverse. Deferred
tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some Recent Accounting Pronouncements
portion or all of the deferred tax assets will not be realized. Provision is made currently for taxes payable on remittances of
overseas earnings; no provision is made for taxes on overseas retained earnings that are deemed to be permanently No new accounting pronouncement issued or which became effective during the fiscal year has had or is expected to
reinvested. have a material impact on the Consolidated Financial Statements.

The Company uses a comprehensive model to recognize, measure, present and disclose in its financial statements Reclassifications
uncertain tax positions that the Company has taken or expects to take on an income tax return. The Company recognizes
interest expense and penalties related to unrecognized tax benefits within income tax expense. Certain prior year amounts have been reclassified to conform to the current year presentation.

Financial Instruments 3. Acquisitions and Divestitures

Derivative instruments are recorded as assets and liabilities at estimated fair value based on available market Consistent with the Company’s strategy to prioritize its higher-margin businesses, the Company sold certain non-core
information. The Company’s derivative instruments that qualify for hedge accounting are designated as either fair value brands in Latin America during the fourth quarter of 2010, resulting in a pretax gain of $50 ($30 aftertax) included in Other
hedges, cash flow hedges or net investment hedges. For fair value hedges, changes in fair value of the derivative, as well (income) expense, net. These operations were not material to the Company’s annual Net sales, Net income or Earnings
as the offsetting changes in fair value of the hedged item, are recognized in earnings each period. For cash flow hedges, per share.
changes in fair value of the derivative are recorded in Other comprehensive income (loss) and are recognized in earnings
when the offsetting effect of the hedged item is also recognized in earnings. For hedges of the net investment in foreign 4. Restructuring and Related Implementation Charges
subsidiaries, changes in fair value of the derivative are recorded in Other comprehensive income (loss) to offset the change
in the value of the net investment being hedged. Cash flows related to hedges are classified in the same category as the The Company’s 2004 Restructuring Program to enhance the Company’s global leadership position in its core
cash flows from the hedged item in the Consolidated Statements of Cash Flows. businesses was finalized as of December 31, 2008 and there were no charges incurred during the years ended December
31, 2010 and 2009. Charges incurred in 2008 amounted to $164. The restructuring accrual decreased from $15 at
The Company may also enter into certain foreign currency and interest rate instruments that economically hedge December 31, 2009 to $8 at December 31, 2010, primarily due to cash payments for termination benefits, exit activities
certain of its risks but do not qualify for hedge accounting. Changes in fair value of these derivative instruments, based on and the implementation of strategies.
quoted market prices, are recognized in earnings each period. The Company’s derivative instruments and other financial
instruments are more fully described in Note 7, along with the related fair value measurement considerations. 5. Goodwill and Other Intangible Assets

Stock-Based Compensation The net carrying value of Goodwill as of December 31, 2010 and 2009, by segment is as follows:

The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such 2010 2009
as stock options and restricted stock, based on the fair value of those awards at the date of grant over the requisite Oral, Personal and Home Care
service period. The Company uses the Black-Scholes-Merton (Black-Scholes) option pricing model to determine the fair North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 375 $ 367
value of stock-option awards. Stock-based compensation plans, related expenses and assumptions used in the Black- Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655 637
Scholes option pricing model are more fully described in Note 8. Europe/South Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,123 1,089
Greater Asia/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 194
Translation of Overseas Currencies Total Oral, Personal and Home Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,347 2,287
Pet Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 15
The assets and liabilities of foreign subsidiaries, other than those operating in highly inflationary environments, are Total Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,362 $ 2,302
translated into U.S. dollars at year-end exchange rates with resulting translation gains and losses accumulated in a
separate component of shareholders’ equity. Income and expense items are translated into U.S. dollars at average rates of The change in the amount of Goodwill in each year was primarily due to the impact of foreign currency translation.
exchange prevailing during the year.

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70 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 71

 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

Other intangible assets as of December 31, 2010 and 2009 are comprised of the following: The Company has entered into interest rate swap agreements and foreign exchange contracts related to certain of
these debt instruments (see Note 7).
2010 2009
Gross Gross During the fourth quarter of 2010, the Company issued $250 of U.S. dollar-denominated ten-year notes at a fixed
Carrying Accumulated Carrying Accumulated
Amount Amortization Net Amount Amortization Net
rate of 2.95% and $188 of U.S. dollar-denominated five-year notes at a fixed rate of 1.375% under the Company’s shelf
registration statement. Proceeds from the debt issuances were used to reduce commercial paper borrowings. At
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . $ 545 $ (221) $ 324 $ 528 $ (205) $ 323
December 31, 2010 the Company had access to unused domestic and foreign lines of credit of $2,317 and could also
Other finite life intangible assets . . . . 35 (16) 19 36 (13) 23
issue medium-term notes pursuant to an effective shelf registration statement.
Indefinite life intangible assets. . . . . . . 488 — 488 475 — 475
Total Other intangible assets . . . . . . . . $ 1,068 $ (237) $ 831 $ 1,039 $ (218) $ 821
During the third quarter of 2009, the Company issued $300 of U.S. dollar-denominated six-year notes at a fixed rate
of 3.15% under the Company’s shelf registration statement. Proceeds from the debt issuance were used to reduce
The changes in the net carrying amounts of Other intangible assets during 2010, 2009 and 2008 were partially due to commercial paper and other borrowings.
amortization expense of $22, $22 and $19, respectively, as well as the impact of foreign currency translation. In addition,
in 2009 $81 was reclassified from Indefinite life intangible assets to Trademarks. Annual estimated amortization expense The Company has a domestic revolving credit facility of $1,600. The facility has an expiration date of November 2012.
for each of the next five years is expected to be approximately $21.
Certain of the facilities with respect to the Company’s bank borrowings contain financial and other covenants as well
6. Long-Term Debt and Credit Facilities as cross-default provisions. Non-compliance with these requirements could ultimately result in the acceleration of
amounts owed. The Company is in full compliance with all such requirements and believes the likelihood of non-
Long-term debt consists of the following at December 31: compliance is remote.
Weighted
Average 7. Financial Instruments and Fair Value Measurements
Interest Rate Maturities 2010 2009
Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2% 2011-2078 $ 2,603 $ 2,536 The Company is exposed to market risk from foreign currency exchange rates, interest rates and commodity price
Payable to banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2% 2011-2013 559 611 fluctuations. Volatility relating to these exposures is managed on a global basis by utilizing a number of techniques,
Commercial paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.2% 2011 214 — including working capital management, selling price increases, selective borrowings in local currencies and entering into
3,376 3,147 selective derivative instrument transactions, issued with standard features, in accordance with the Company’s treasury
Less: Current portion of long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . 561 326 and risk management policies, which prohibit the use of derivatives for speculative purposes and leveraged derivatives for
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,815 $ 2,821 any purpose. It is the Company’s policy to enter into derivative instrument contracts with terms that match the underlying
exposure being hedged. Hedge ineffectiveness, if any, is not material for any period presented. Provided below are details
The weighted-average interest rate on short-term borrowings included in Notes and loans payable in the regarding the Company’s exposures by type of risk and derivative instruments by type of hedge designation.
Consolidated Balance Sheets as of December 31, 2010 and 2009 was 3.1% and 0.7%, respectively.
Valuation Considerations
Commercial paper is classified as long-term debt as the Company has the intent and ability to refinance such
obligations on a long-term basis. Excluding commercial paper reclassified as long-term debt, scheduled maturities of long- Assets and liabilities carried at fair value are classified as follows:
term debt and capitalized leases outstanding as of December 31, 2010, are as follows:
Level 1: Based upon quoted market prices in active markets for identical assets or liabilities.
Years Ended December 31, Level 2: Based upon observable market-based inputs or unobservable inputs that are corroborated by market data.
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 561 Level 3: Based upon unobservable inputs reflecting the reporting entity’s own assumptions.
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 359
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268 Foreign Exchange Risk
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 481 As the Company markets its products in over 200 countries and territories, it is exposed to currency fluctuations
Thereafter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,161 related to manufacturing and selling its products in currencies other than the U.S. dollar. Our foreign currency exposures
primarily reflect the Company’s operations in Latin America (27% of Net sales), Europe/South Pacific (21% of Net sales)
and Greater Asia/Africa (19% of Net sales). The Company manages its foreign currency exposures through a combination
of cost-containment measures, selling price increases and the hedging of certain costs in an effort to minimize the impact
on earnings of foreign currency rate movements.

46 47

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 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

The Company primarily utilizes foreign currency contracts, including forward, option and swap contracts, local The following summarizes the fair value of the Company’s derivative instruments and other financial instruments at
currency deposits and local currency borrowings to hedge portions of its exposures relating to foreign currency purchases, December 31, 2010 and 2009:
assets and liabilities created in the normal course of business and the net investment in certain foreign subsidiaries. The
duration of foreign currency contracts generally does not exceed 12 months and the contracts are valued using Assets Liabilities
observable market rates (Level 2 valuation). Account Fair Value Account Fair Value
Designated derivative
Interest Rate Risk instruments 12/31/10 12/31/09 12/31/10 12/31/09
Interest rate swap contracts . . Other assets $ 22 $ 17 Other liabilities $ 7 $ —
The Company manages its targeted mix of fixed and floating rate debt with debt issuances and by entering into Foreign currency contracts . . . . Other current assets 10 11 Other accruals 10 8
interest rate swaps in order to mitigate fluctuations in earnings and cash flows that may result from interest rate volatility. Commodity contracts . . . . . . . . Other current assets 4 1 Other accruals — 1
The notional amount, interest payment and maturity date of the swaps match the principal, interest payment and Total designated . . . . . . . . . . $ 36 $ 29 $ 17 $ 9
maturity date of the related debt in all cases, and the swaps are valued using observable benchmark rates (Level 2
valuation). Derivatives not
designated
Commodity Price Risk Foreign currency contracts . . . . Other current assets $ — $ 3 Other accruals $ 2 $ —
Total not designated . . . . . . $ — $ 3 $ 2 $ —
The Company is exposed to price volatility related to raw materials used in production, such as resins, tallow, essential
oils, tropical oils, corn and soybeans. The Company manages its raw material exposures through a combination of cost Total derivative
containment measures, ongoing productivity initiatives and the limited use of commodity hedging contracts. Futures instruments . . . . . . . . . . . . . $ 36 $ 32 $ 19 $ 9
contracts are used on a limited basis, primarily in the Pet Nutrition segment, to manage volatility related to raw material
inventory purchases of certain traded commodities, and these contracts are measured using quoted commodity exchange Other financial
prices (Level 1 valuation). The duration of the commodity contracts generally does not exceed 12 months. instruments
Marketable securities . . . . . . . . . Other current assets $ 74 $ 41
Credit Risk Available-for-sale securities . . . . Other assets 228 282
Total other financial
The Company is exposed to the risk of credit loss in the event of nonperformance by counterparties to financial instruments . . . . . . . . . . . . . . . . $ 302 $ 323
instrument contracts; however, nonperformance is considered unlikely as it is the Company’s policy to contract with
diverse, highly rated counterparties. Fair value hedges

The Company has designated all interest rate swap contracts and certain foreign currency forward contracts as fair
value hedges, for which the gain or loss on the derivative and the offsetting loss or gain on the hedged item are
recognized in current earnings. The impact of foreign currency contracts is recognized in Selling, general and
administrative expenses and the impact of interest rate swap contracts is recognized in Interest expense, net. The
estimated fair value of the Company’s long-term debt, including the current portion, as of December 31, 2010 and
December 31, 2009, was $3,613 and $3,362, respectively, and the related carrying value was $3,376 and $3,147,
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). Activity related to fair value hedges recorded during each period
presented was as follows:

2010 2009
Foreign Foreign
Currency Interest Rate Currency Interest Rate
Contracts Swaps Total Contracts Swaps Total
Notional Value at December 31, . . . . . $ 769 $ 788 $ 1,557 $ 889 $ 600 $ 1,489
Gain (loss) on derivative . . . . . . . . . . . . . . . — (2) (2) 19 (7) 12
Gain (loss) on hedged items . . . . . . . . . . — 2 2 (19) 7 (12)

48 49

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Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

Cash flow hedges The cross-currency swap outstanding at December 31, 2010 replaced a swap with similar terms that settled in June
2010, resulting in a realized gain of $9.
All of the Company’s commodity contracts and certain foreign currency forward contracts have been designated as
cash flow hedges, for which the effective portion of the gain or loss is reported as a component of Other comprehensive Other Financial Instruments
income (OCI) and reclassified into earnings in the same period or periods during which the hedged transaction affects
earnings. Activity related to cash flow hedges recorded during each period presented was as follows: Marketable securities consist of bank deposits with original maturities greater than 90 days (Level 1 valuation).

2010 2009 Available-for-sale securities consist of the fixed income investments discussed below.
Foreign Foreign
Currency Commodity Currency Commodity
Contracts Contracts Total Contracts Contracts Total
During the third quarter of 2010, the Company invested $136 in a portfolio of euro-denominated investment grade
fixed income securities, including corporate bonds, with maturities generally ranging from one to three years. The portfolio
Notional Value at December 31, . . . . $ 371 $ 18 $ 389 $ 207 $ 15 $ 222
is considered a Level 1 investment as all of the securities have quoted prices on an active exchange with daily liquidity. At
Gain (loss) recognized in Other
December 31, 2010, the portfolio’s fair value was $132 and was reported in Other assets in the Consolidated Balance
comprehensive income . . . . . . . . . . . . (3) 5 2 (19) 1 (18)
Sheet. For the year ended December 31, 2010, $1 of interest income was realized on the portfolio.
Gain (loss) reclassified into Cost of
sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1 4 (30) (8) (38)
During the second half of 2009, the Company invested $210 in U.S. dollar-denominated bonds issued by a
Venezuelan state-owned corporation with stated maturities ranging from two to seven years and $50 in U.S. dollar-linked,
The net gain (loss) recognized in OCI for both foreign currency contracts and commodity contracts is expected to be
devaluation-protected bonds issued by the Venezuelan government with stated maturities ranging from six to eight years.
recognized in Cost of sales within the next twelve months.
Prior to January 1, 2010, the U.S. dollar-denominated bonds had been remeasured at the parallel market rate and then
translated for financial reporting purposes at the official rate of 2.15. As a result of transitioning to hyperinflationary
Net investment hedges
accounting in Venezuela as of January 1, 2010, a charge of $152 was recorded to write down the value of the U.S. dollar-
denominated bonds. This charge was included in the $271 one-time charge discussed in Note 14. During the second half
The Company has designated certain foreign currency forward and option contracts and certain foreign currency-
of 2010, the Company sold all of the U.S. dollar-denominated bonds, realizing a gain of $13. During the second half of
denominated debt as net investment hedges, for which the gain or loss on the instrument is reported as a component of
2010, the Company also invested an additional $67 in U.S. dollar-linked, devaluation-protected bonds issued by the
Currency translation adjustments within OCI, along with the offsetting gain or loss on the hedged items. Activity related
Venezuelan government with stated maturities ranging from three to seven years. The U.S. dollar-linked, devaluation-
to net investment hedges recorded during each period presented was as follows:
protected bonds are considered Level 3 as there was no trading activity in the market at the end of 2010 and their value
2010 2009 was determined using unobservable inputs reflecting the Company’s own assumptions. The following table presents a
Foreign Foreign Foreign Foreign reconciliation of the U.S. dollar-linked, devaluation-protected bonds measured at fair value for the year ended
Currency Currency Currency Currency December 31:
Contracts Debt Total Contracts Debt Total
Notional Value at December 31, . . . . . . $ 131 $ 312 $ 443 $ 89 $ 396 $ 485 2010 2009
Gain (loss) on instruments . . . . . . . . . . . . . (8) 2 (6) (6) (17) (23) Beginning balance as of January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 46 $ —
Gain (loss) on hedged items . . . . . . . . . . . 8 (2) 6 6 17 23 Unrealized gain (loss) on investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17) (4)
Purchases during the year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 50
Derivatives Not Designated as Hedging Instruments Ending balance as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 96 $ 46

Derivatives not designated as hedging instruments for each period consist of a cross-currency swap which serves as As a result of the elimination of the 2.6 preferential exchange rate effective January 1, 2011, these bonds have
an economic hedge of a foreign currency deposit, for which the gain or loss on the instrument and the offsetting gain or revalued and, based on recent market activity, the Company recorded an aftertax unrealized gain in Other comprehensive
loss on the hedged item are recognized in Other (income) expense, net for each period. Activity related to these contracts income of approximately $40 during the first quarter of 2011.
during each period presented was as follows:

2010 2009
Cross- Cross-
currency currency
Swap Swap
Notional Value at December 31, . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 90 $ 99
Gain (loss) on instrument . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 (8)
Gain (loss) on hedged item . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) 8

50 51

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Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

8. Capital Stock and Stock-Based Compensation Plans A summary of common stock and treasury stock activity for the three years ended December 31, 2010 is as follows:

Preference Stock Common

Stock Treasury
Outstanding Stock
The Company has the authority to issue 50,000,000 shares of Preference stock. In 1989, the Company approved the
Balance, January 1, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509,034,801 223,818,379
issuance of 6,315,149 shares of Series B Convertible Preference stock (the Preference stock) without par value. Each share
of Preference stock, which was convertible into eight shares of common stock, had a redemption price of $65 per share
Common stock acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,731,316) 14,731,316
and paid cumulative dividends equal to the higher of $2.44 or the current dividend paid on eight common shares for the
Shares issued for stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,280,505 (4,280,505)
comparable six-month period. As a result of recent rules issued by the Internal Revenue Service related to employer stock
Shares issued for restricted stock and other . . . . . . . . . . . . . . . . . . . . 799,926 (799,926)
held in defined contribution plans, the Company issued a notice of redemption with respect to the 2,405,192 shares of
Preference stock conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,028,664 (2,028,664)
Preference stock outstanding on December 29, 2010. At the direction of the Company’s Employee Stock Ownership Plan
trustee, the preference shares were converted into 19,241,536 shares of common stock. The common stock for the Balance, December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501,412,580 231,440,600
conversion was issued from treasury shares. As of December 31, 2010, there were 19,225,073 shares of common stock
outstanding and issued to the Company’s Employee Stock Ownership Plan. As of December 31, 2009, there were Common stock acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (14,916,340) 14,916,340
2,607,541 shares of Preference stock outstanding and issued to the Company’s Employee Stock Ownership Plan. See Shares issued for stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,455,317 (5,455,317)
Note 9 for further information about the Company’s Employee Stock Ownership Plan. Shares issued for restricted stock and other . . . . . . . . . . . . . . . . . . . . 800,388 (800,388)
Preference stock conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,413,072 (1,413,072)
Stock Repurchases Balance, December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494,165,017 238,688,163

The Company repurchased its common stock at a cost of $2,020 during 2010 under share repurchase programs that Common stock acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25,401,785) 25,401,785
were approved by the Board of Directors and publicly announced in February 2010 and January 2008 (the 2010 Program Shares issued for stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,233,775 (4,233,775)
and the 2008 Program, respectively). Under the 2008 Program, the Company was authorized to purchase up to 30 million Shares issued for restricted stock and other . . . . . . . . . . . . . . . . . . . . 993,132 (993,132)
shares of the Company’s common stock. The 2010 Program, which replaced the 2008 Program, authorizes the Company Preference stock conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,860,328 (20,860,328)
to repurchase up to 40 million shares of its common stock. The Board’s authorization also provides for share repurchases Balance, December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494,850,467 238,002,713
on an ongoing basis to fulfill certain requirements of the Company’s compensation and benefit programs. The shares may
be repurchased in open market or privately negotiated transactions at the Company’s discretion, subject to market Stock-Based Compensation
conditions, customary blackout periods and other factors.
The Company recognizes the cost of employee services received in exchange for awards of equity instruments, such
The Company may use either authorized and unissued shares or treasury shares to meet share requirements resulting as stock options and restricted stock, based on the fair value of those awards at the date of grant. The value of restricted
from the exercise of stock options and the vesting of restricted stock awards. stock awards, based on market prices, is amortized on a straight-line basis over the requisite service period. The estimated
fair value of stock options on the date of grant is amortized on a straight-line basis over the requisite service period for
each separately vesting portion of the award. Awards to employees eligible for retirement prior to the award becoming
fully vested are recognized as compensation cost over the period through the date that the employee first becomes
eligible to retire and is no longer required to provide service to earn the award.

The Company has two types of stock-based compensation plans, which are described below. The total stock-based
compensation expense charged against pretax income for these plans was $121, $117 and $100 for the years ended
December 31, 2010, 2009 and 2008, respectively. The total income tax benefit recognized on stock-based compensation
was approximately $40, $40 and $32 for the years ended December 31, 2010, 2009 and 2008, respectively.

Stock-based compensation expense is recorded within Selling, general and administrative expenses in the Corporate
segment as these amounts are not included in internal measures of segment operating performance.

The Company uses the Black-Scholes option pricing model to determine the fair value of stock-option awards. The
weighted-average estimated fair value of stock options granted in the years ended December 31, 2010, 2009 and 2008
was $11.00, $12.06 and $13.35, respectively. Fair value is estimated using the Black-Scholes option pricing model with the
assumptions summarized in the following table:

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 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

2010 2009 2008 A summary of stock option plan activity during 2010 is presented below:
Expected Term of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5 years 4.5 years 4.5 years
Expected Volatility Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.5% 22.1% 19.5% Weighted Average Value of
Risk-Free Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3% 2.3% 3.0% Remaining Unexercised
Shares Weighted Average Contractual Life In-the-Money
Expected Dividend Yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8% 2.4% 2.0% (in thousands) Exercise Price (in years) Options
Options outstanding, January 1, 2010. . . . . . . . 25,091 $ 65
The weighted-average expected term of options granted each year was determined with reference to historical Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,892 77
exercise and post-vesting cancellation experience, the vesting period of the awards and contractual term of the awards, Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,279) 56
among other factors. Expected volatility incorporates implied share-price volatility derived from exchange traded options Forfeited or expired. . . . . . . . . . . . . . . . . . . . . . . . . . (187) 75
on the Company’s common stock. The risk-free rate for the expected term of the option is based on the U.S. Treasury
Options outstanding, December 31, 2010 . . . . 24,517 69 3 $ 268
implied yield at the time of grant.
Options exercisable, December 31, 2010 . . . . . 15,314 $ 66 2 $ 227
Incentive Stock Plan
As of December 31, 2010, there was $40 of total unrecognized compensation expense related to options, which will
The Company has a plan that provides for grants of restricted stock awards for officers and other employees. A be recognized over a weighted-average period of 1.4 years. The total intrinsic value of options exercised during the years
committee of independent members of the Board of Directors administers the plan. Awards are made in common stock ended December 31, 2010, 2009 and 2008 was $133, $120 and $113, respectively.
and vest at the end of the restriction period, which is generally three years. As of December 31, 2010, 10,218,000 shares
of common stock were available for future restricted stock awards. The benefits of tax deductions in excess of grant date fair value resulting from the exercise of stock options and
vesting of restricted stock awards for the years ended December 31, 2010, 2009 and 2008 was $31, $16 and $26,
A summary of restricted stock award activity during 2010 is presented below: respectively, and was reported as a financing cash flow. Cash proceeds received from options exercised for the years
ended December 31, 2010, 2009 and 2008 were $211, $284 and $211, respectively.
Weighted Average
Shares Grant Date Fair 9. Employee Stock Ownership Plan
(in thousands) Value Per Award
Restricted stock awards as of January 1, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,801 $ 66 In 1989, the Company expanded its Employee Stock Ownership Plan (ESOP) through the introduction of a leveraged
Activity: ESOP that funds certain benefits for employees who have met eligibility requirements. The ESOP issued $410 of long-term
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 80 notes due through July 2009 bearing an average interest rate of 8.7%. The notes, which were guaranteed by the
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (956) 62 Company, were repaid in July 2009. The ESOP used the proceeds of the notes to purchase 6.3 million shares of
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (68) 72 Preference stock from the Company. The Preference stock, each share of which was convertible into eight shares of
Restricted stock awards as of December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,777 73 common stock, had a redemption price of $65 per share and paid semiannual dividends equal to the higher of $2.44 or
the current dividend paid on eight common shares for the comparable six-month period. As a result of recent rules issued
As of December 31, 2010, there was $61 of total unrecognized compensation expense related to nonvested by the Internal Revenue Service related to employer stock held in defined contribution plans, the Company issued a notice
restricted stock awards, which will be recognized over a weighted-average period of 1.6 years. The total fair value of of redemption with respect to the 2,405,192 shares of Preference stock outstanding on December 29, 2010. At the
shares vested during the years ended December 31, 2010, 2009 and 2008 was $69, $48 and $56, respectively. direction of the Company’s ESOP trustee, the preference shares were converted into 19,241,536 shares of common stock.
The common stock for the conversion was issued from treasury shares, as illustrated in Note 8.
Stock Option Plans
During 2000, the ESOP entered into a loan agreement with the Company under which the benefits of the ESOP may
The Company’s stock option plans provide for the issuance to directors, officers and other employees of non-qualified be extended through 2035. Advances from the Company of $99 remain outstanding at December 31, 2010.
stock options that generally have a contractual term of six years and vest over three years. As of December 31, 2010,
13,723,000 shares of common stock were available for future stock option grants. Dividends on the Preference stock, as well as on the common stock also held by the ESOP, are paid to the ESOP trust
and, together with cash contributions and advances from the Company, are used by the ESOP to repay principal and
interest. Prior to the conversion on December 29, 2010, noted above, Preference stock was released for allocation to
participants based upon the ratio of the current year’s debt service to the sum of total principal and interest payments
over the life of the debt. As of December 31, 2010, 10,527,721 common shares were released and allocated to participant
accounts and 8,697,352 common shares were available for future allocation to participant accounts.

Dividends on the Preference stock and common stock are deductible for income tax purposes and, accordingly, are
reflected net of their tax benefit in the Consolidated Statements of Changes in Shareholders’ Equity.

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Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

Annual expense related to the leveraged ESOP, determined as interest incurred on the original notes, plus the higher At December 31, 2010 the allocation of the Company’s plan assets and the level of valuation input for each major
of either principal payments or the historical cost of Preference stock allocated, less dividends received on the shares held asset category was as follows:
by the ESOP and advances from the Company, was $6 in 2010, $22 in 2009 and $7 in 2008. Unearned compensation,
which is shown as a reduction in Shareholders’ equity, is the amount of ESOP debt due to the Company. Level of Pension Plans
Valuation Other Retiree
Input United States International Benefits
Interest incurred on the ESOP notes was $0 in 2010, $2 in 2009 and $8 in 2008. The Company paid dividends on the
shares held by the ESOP of $41 in 2010, $37 in 2009 and $36 in 2008. Company contributions to the ESOP were $6 in
2010, $22 in 2009 and $7 in 2008. Investments:
Cash & cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Level 1 $ 84 $ 14 $ 2
10. Retirement Plans and Other Retiree Benefits U.S. common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Level 1 223 — 6
International common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . Level 1 55 — 1
Retirement Plans Fixed income securities (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Level 2 142 — —
Common/collective trust funds (b): Level 2
The Company and certain of its U.S. and overseas subsidiaries maintain defined benefit retirement plans. Benefits Equity index funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 314 166 8
under these plans are based primarily on years of service and employees’ career earnings. Emerging market equity index funds . . . . . . . . . . . . . . . . . . 61 18 2
Other common stock funds. . . . . . . . . . . . . . . . . . . . . . . . . . . 95 13 3
Effective September 1, 2010, the Company adopted certain amendments to its retirement benefit programs in the Fixed income funds: U.S. or foreign government and
U.S. The plan amendments provide for higher contributions to the Company’s defined contribution plan while reducing agency securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222 88 6
future pay credits to the Company’s defined benefit plan for participants, simplification of the formula for calculating Fixed income funds: investment
monthly pay-based credits to the defined benefit plan, and certain pension enhancements depending on years of service. grade corporate bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 71 2
The incremental impact to the Company’s net income due to the plan amendments for 2010 was not significant. The Fixed income funds: high yield corporate bonds and
incremental impact of $58 to the Company’s benefit obligations is reflected in the table below. other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 1 2
Guaranteed investment contracts (c) . . . . . . . . . . . . . . . . . . . . Level 2 — 47 —
In the Company’s principal U.S. plans and certain funded overseas plans, funds are contributed to trusts in Real estate (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Level 3 55 16 —
accordance with regulatory limits to provide for current service and for any unfunded projected benefit obligation over a Total Investments at fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,377 $ 434 $ 32
reasonable period. The target asset allocation for the Company’s defined benefit plans are as follows:
At December 31, 2009 the allocation of the Company’s plan assets and the level of valuation input for each major
United States International asset category was as follows:
Asset Category
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52% 44% Level of Pension Plans
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 47 Valuation Other Retiree
Input United States International Benefits
Real estate and alternative investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 9
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 100%
Investments:
Cash & cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Level 1 $ 84 $ 21 $ 2
U.S. common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Level 1 220 — 6
International common stocks . . . . . . . . . . . . . . . . . . . . . . . . . . . Level 1 48 — 2
Fixed income securities (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Level 2 144 — —
Common/collective trust funds (b): Level 2
Equity index funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351 135 9
Emerging market equity index funds . . . . . . . . . . . . . . . . . 52 14 1
Other common stock funds. . . . . . . . . . . . . . . . . . . . . . . . . . . 88 21 2
Fixed income funds: U.S. or foreign government and
agency securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 24 4
Fixed income funds: investment grade corporate bonds 52 120 1
Fixed income funds: high yield corporate bonds and
other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 10 1
Guaranteed investment contracts (c) . . . . . . . . . . . . . . . . . . . Level 2 — 45 —
Real estate (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Level 3 48 11 —
Total Investments at fair value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,300 $ 401 $ 28

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 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

(a) The fixed income securities are traded over the counter and a small portion of the securities lack daily pricing or The Company uses a December 31 measurement date for its defined benefit and other retiree benefit plans.
liquidity and as such are classified as level 2. As of December 31, 2010 and 2009, approximately 75% of the fixed Summarized information for the Company’s defined benefit and other retiree benefit plans are as follows:
income portfolio was invested in U.S. treasury or agency securities, with the remainder invested in corporate bonds.
(b) Interests in common/collective trust funds are valued using the net asset value (NAV) per unit in each fund. The Pension Benefits Other Retiree Benefits
NAV is based on the value of the underlying investments owned by each trust, minus its liabilities, divided by the 2010 2009 2010 2009 2010 2009
number of shares outstanding. United States International
(c) The guaranteed investment contracts (GICs) represent contracts with insurance companies measured at the cash Change in Benefit Obligations
surrender value of each contract. The level 2 valuation reflects that the cash surrender value is based principally on a Benefit obligations at beginning of year. . . . . . . . $ 1,703 $ 1,570 $ 706 $ 604 $ 603 $ 542
referenced pool of investment funds with active redemption. Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 42 17 15 7 3
(d) Real estate is valued using the NAV per unit of funds that are invested in real property, and the real property is Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 95 35 37 38 36
valued using independent market appraisals. Since the appraisals include unobservable inputs, the investments in Participants’ contributions . . . . . . . . . . . . . . . . . . . . 1 1 3 3 — —
each fund are classified as level 3. Acquisitions/plan amendments . . . . . . . . . . . . . . . 58 — 2 1 31 —
Actuarial loss (gain) . . . . . . . . . . . . . . . . . . . . . . . . . . 150 104 24 46 97 37
The following table presents a reconciliation of level 3 plan assets measured at fair value for the year ended Foreign exchange impact . . . . . . . . . . . . . . . . . . . . . — — (10) 39 3 5
December 31: Termination benefits . . . . . . . . . . . . . . . . . . . . . . . . . 23 — — — 8 —
Curtailments and settlements . . . . . . . . . . . . . . . . . — — (5) (3) — —
2010 2009 Benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . (119) (109) (36) (36) (25) (20)
United States International United States International Benefit obligations at end of year . . . . . . . . . . . . . $ 1,952 $ 1,703 $ 736 $ 706 $ 762 $ 603
Real Estate Real Estate Real Estate Real Estate Change in Plan Assets
Fund Fund Fund Fund
Fair value of plan assets at beginning of year . . . $ 1,300 $ 1,134 $ 401 $ 320 $ 28 $ 24
Beginning balance as of January 1 . . . . . . . . . . . . . . $ 48 $ 11 $ 72 $ 9 Actual return on plan assets . . . . . . . . . . . . . . . . . . 145 189 30 43 4 4
Earned income, net of management expenses . . . 4 — 2 1 Company contributions. . . . . . . . . . . . . . . . . . . . . . . 50 85 36 45 25 20
Unrealized gain (loss) on investment . . . . . . . . . . . . . 3 1 (26) 1 Participants’ contributions . . . . . . . . . . . . . . . . . . . . 1 1 3 3 — —
Purchases, sales, issuances and settlements, net . — 4 — — Foreign exchange impact . . . . . . . . . . . . . . . . . . . . . — — 4 29 — —
Ending balance as of December 31 . . . . . . . . . . . . . . $ 55 $ 16 $ 48 $ 11 Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (4) (3) — —
Benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . (119) (109) (36) (36) (25) (20)
Equity securities in the U.S. plans include investments in the Company’s common stock representing 9% and 10% of Fair value of plan assets at end of year . . . . . . . . . $ 1,377 $ 1,300 $ 434 $ 401 $ 32 $ 28
U.S. plan assets at December 31, 2010 and 2009, respectively. No shares of the Company’s common stock were Funded Status
purchased or sold by the plans in 2010 or 2009. The plans received dividends on the Company’s common stock of $3 and Benefit obligations at end of year . . . . . . . . . . . . . $ 1,952 $ 1,703 $ 736 $ 706 $ 762 $ 603
$3 in 2010 and 2009, respectively. Fair value of plan assets at end of year . . . . . . . . . 1,377 1,300 434 401 32 28
Net amount recognized . . . . . . . . . . . . . . . . . . . . . . $ (575) $ (403) $ (302) $ (305) $ (730) $ (575)
Other Retiree Benefits
Amounts Recognized in Balance Sheet
Noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 4 $ 4 $ — $ —
The Company and certain of its subsidiaries provide health care and life insurance benefits for retired employees to the
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13) (12) (13) (14) (41) (35)
extent not provided by government-sponsored plans. The Company utilizes a portion of its leveraged ESOP to reduce its
Noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . (562) (391) (293) (295) (689) (540)
obligation to provide these other retiree benefits and to offset its current service cost.
Net amount recognized . . . . . . . . . . . . . . . . . . . . . . $ (575) $ (403) $ (302) $ (305) $ (730) $ (575)
Effective September 1, 2010, the Company adopted certain amendments to its retirement benefit programs in the Amounts recognized in Accumulated
U.S. Effective with the plan amendments, future retirees of the Company who do not meet certain age and service other comprehensive income consist of
requirements will begin to share in the cost of retiree medical coverage through monthly payments rather than paying a Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 693 $ 641 $ 142 $ 132 $ 343 $ 267
lump sum contribution at retirement. In addition, the Company will generally no longer use its leveraged ESOP to make Transition/prior service cost . . . . . . . . . . . . . . . . . . . 81 29 8 8 32 2
retiree medical coverage allocations. The incremental impact to the Company’s net income due to the plan amendments $ 774 $ 670 $ 150 $ 140 $ 375 $ 269
for 2010 was not significant. The incremental impact of $31 to the Company’s benefit obligations is reflected in the table
below. Accumulated benefit obligation . . . . . . . . . . . . . . . $ 1,808 $ 1,645 $ 654 $ 635 $ — $ —

58 59

84 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 85

 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

Pension Benefits Other Retiree Benefits Summarized information regarding the net periodic benefit costs for the Company’s defined benefit and other retiree
2010 2009 2010 2009 2010 2009 benefit plans is as follows:
United States International
Weighted-Average Assumptions Used to Pension Benefits Other Retiree Benefits
Determine Benefit Obligations 2010 2009 2008 2010 2009 2008 2010 2009 2008
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.30% 5.75% 5.04% 5.41% 5.30% 5.75% United States International
Long-term rate of return on plan assets . . . . . . . 8.00% 8.00% 6.23% 6.58% 8.00% 8.00% Components of Net
Long-term rate of compensation increase. . . . . . 4.00% 4.00% 3.05% 3.35% — — Periodic Benefit Cost
ESOP growth rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — 10.00% 10.00% Service cost . . . . . . . . . . . . . . . . $ 42 $ 42 $ 40 $ 17 $ 15 $ 15 $ 13 $ 10 $ 10
Interest cost . . . . . . . . . . . . . . . 94 95 95 35 37 37 38 36 34
The overall investment objective of the plans is to balance risk and return so that obligations to employees are met. Annual ESOP allocation . . . . . — — — — — — (6) (7) (9)
The Company evaluates its long-term rate of return on plan assets on an annual basis. In determining the long-term rate Expected return on plan
of return, the Company considers the nature of the plans’ investments, an expectation for the plans’ investment assets . . . . . . . . . . . . . . . . . . . (99) (89) (114) (26) (23) (27) (2) (2) (3)
strategies and the historical rates of return. The assumed rate of return for 2010 for the U.S. plans was 8%. Average Amortization of transition &
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 prior service costs (credits)
12%, 5%, 5%, 7%, and 8%, respectively. Similar assessments were performed in determining rates of return on ......................... 5 4 4 3 3 1 1 — —
international pension plan assets to arrive at the Company’s 2010 weighted-average rate of return of 6.23%. Amortization of actuarial
loss ................................... 52 50 6 9 5 3 19 13 9
Plans with projected benefit obligations in excess of plan assets and plans with accumulated benefit obligations in Net periodic benefit cost . . . . $ 94 $ 102 $ 31 $ 38 $ 37 $ 29 $ 63 $ 50 $ 41
excess of plan assets as of December 31 consist of the following: Other postretirement
charges. . . . . . . . . . . . . . . . . . 23 — 1 1 — 4 8 — —
Years Ended December 31,
Total pension cost. . . . . . . . . . $ 117 $ 102 $ 32 $ 39 $ 37 $ 33 $ 71 $ 50 $ 41
2010 2009
Weighted- Average
Benefit Obligation Exceeds Fair Value of Plan Assets
Assumptions Used to
Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,664 $ 2,338 Determine Net
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,749 1,629 Periodic Benefit Cost
Discount rate . . . . . . . . . . . . . . 5.75%(1) 6.30% 6.50% 5.41% 5.88% 5.52% 5.75%(1) 5.80% 6.50%
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,268 2,170
Long-term rate of return on
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,571 1,579 plan assets . . . . . . . . . . . . . . 8.00% 8.00% 8.00% 6.58% 6.70% 7.00% 8.00% 8.00% 8.00%
Long-term rate of
The medical cost trend rate of increase assumed in measuring the expected cost of benefits is projected to decrease
compensation increase . . . 4.00% 4.00% 4.00% 3.35% 3.33% 3.65% — — —
from 8.33% in 2011 to 5.00% by 2016, remaining at 5.00% for the years thereafter. Changes in the assumed rate can
ESOP growth rate . . . . . . . . . . — — — — — — 10.00% 10.00% 10.00%
have a significant effect on amounts reported. A 1% change in the assumed medical cost trend rate would have the
following approximate effect: (1)
Effective with the plan amendments on September 1, 2010, the Company was required to remeasure the benefit
One percentage point
obligations and plan assets of the affected plans, and a new discount rate of 4.75% was used to determine net
Increase Decrease
periodic benefit cost through the end of 2010.
Accumulated postretirement benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 84 $ (70)
Annual expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 (6) Other postretirement charges in 2010 primarily relate to one-time termination benefits incurred pursuant to a
voluntary early retirement program for selected individuals in the U.S.

The Company made voluntary contributions of $35, $73 and $95 in 2010, 2009 and 2008, respectively, to its U.S.
postretirement plans.

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86 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 87

 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

Amounts recognized in Other Comprehensive Income during the year ended December 31, 2010 were as follows: 11. Income Taxes

Before-Tax Net-of-Tax The components of income before income taxes are as follows for the three years ended December 31:
Amount Amount
Net actuarial loss & prior service costs arising during the period . . . . . . . . . . . . . . . $ 309 $ 196 2010 2009 2008
Amortization of net actuarial loss, transition & prior service costs. . . . . . . . . . . . . . (89) (53) United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,252 $ 1,173 $ 1,027
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 220 $ 143 International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,178 2,365 1,978
Total Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,430 $ 3,538 $ 3,005
The estimated actuarial loss and the estimated transition/prior service cost for defined benefit and other retiree benefit
plans that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next The provision for income taxes consists of the following for the three years ended December 31:
fiscal year is as follows:
2010 2009 2008
Pension Other Retiree United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 427 $ 399 $ 314
Benefits Benefits
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 690 742 654
Net actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55 $ 21 Total Provision for income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,117 $ 1,141 $ 968
Net transition & prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 2

Expected Contributions & Benefit Payments Temporary differences between accounting for financial statement purposes and accounting for tax purposes result in
the current provision for taxes being higher (lower) than the total provision for income taxes as follows:
Management’s best estimate of cash requirements to be paid directly from the Company’s assets to its 2010 2009 2008
postretirement plans for the year ending December 31, 2011, is approximately $208, including approximately $100 of
Goodwill and intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (11) $ 15 $ (10)
voluntary contributions to U.S. pension plans. Actual funding may differ from current estimates depending on the
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29) (24) (29)
variability of the market value of the assets as compared to the obligation and other market or regulatory conditions.
Pension and other retiree benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 27 (46)
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 18 18
Total benefit payments expected to be paid to participants, including payments directly from the Company’s assets to
Tax loss and tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28) (27) (30)
participants in unfunded plans, as discussed above, as well as payments paid from the plans, are as follows:
Valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 3 6
Pension Benefits Other Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 7 (5)
Retiree Total deferred tax provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 71 $ 19 $ (96)
Years Ended December 31, United States International Benefits
2011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 124 $ 42 $ 42 In 2010, Other, net includes a non-recurring tax benefit related to the reorganization of an overseas subsidiary.
2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 54 43
2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 41 44 The difference between the statutory U.S. federal income tax rate and the Company’s global effective tax rate as
2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 46 45 reflected in the Consolidated Statements of Income is as follows:
2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 45 46
2016-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 660 225 234 Percentage of Income before income taxes 2010 2009 2008
Tax at United States statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.0% 35.0% 35.0%
State income taxes, net of federal benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 0.5 0.8
Earnings taxed at other than United States statutory rate . . . . . . . . . . . . . (4.6) (2.5) (1.9)
Venezuela hyperinflationary transition charge . . . . . . . . . . . . . . . . . . . . . . . . 2.8 — —
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.7) (0.8) (1.7)
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.6% 32.2% 32.2%

62 63

88 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 89

 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

The components of deferred tax assets (liabilities) are as follows at December 31: Unrecognized tax benefits activity for the years ended December 31, 2010, 2009 and 2008 is summarized below:

2010 2009 2010 2009 2008

Deferred tax liabilities: Unrecognized tax benefits:
Goodwill and intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (463) $ (440) Balance, January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 187 $ 171 $ 199
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (344) (320) Increases as a result of tax positions taken during the current year . . 38 30 6
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (116) (157) Decreases of tax positions taken during prior years . . . . . . . . . . . . . . . . . (63) (9) (10)
(923) (917) Increases of tax positions taken during prior years . . . . . . . . . . . . . . . . . . 16 18 31
Deferred tax assets: Decreases as a result of settlements with taxing authorities and the
Pension and other retiree benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 471 389 expiration of statutes of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) (24) (51)
Tax loss and tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130 153 Effect of foreign currency rate movements . . . . . . . . . . . . . . . . . . . . . . . . . (4) 1 (4)
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145 134 Balance, December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 171 $ 187 $ 171
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 103
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 163 If all of the unrecognized tax benefits above were recognized, approximately $119 would impact the effective tax
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) (2) rate. Although it is possible that the amount of unrecognized benefits with respect to our uncertain tax positions will
1,016 940 increase or decrease in the next 12 months, the Company does not expect material changes.
Net deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 93 $ 23
The Company recognized approximately ($4), ($1) and $7 of interest (income) expense related to the above
Deferred taxes included within: unrecognized tax benefits within income tax expense in 2010, 2009 and 2008, respectively. The Company had accrued
Assets: interest of approximately $19 and $24 as of December 31, 2010 and 2009, respectively.
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 117 $ 105
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 — The Company and its subsidiaries file U.S. federal income tax returns as well as income tax returns in many state and
Liabilities: foreign jurisdictions. All U.S. federal income tax returns for the periods ended through December 31, 2005 have been
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (108) (82) audited by and settled with the IRS. With a few exceptions, the Company is no longer subject to U.S. state and local
Net deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 93 $ 23 income tax examination for the years prior to 2006. In addition, the Company has subsidiaries in various foreign
jurisdictions that have statutes of limitations for tax audits generally ranging from three to six years.
Applicable U.S. income and foreign withholding taxes have not been provided on approximately $2,900 of
undistributed earnings of foreign subsidiaries at December 31, 2010. These earnings have been and are currently 12. Earnings Per Share
considered to be indefinitely reinvested and are currently not subject to such taxes. Determining the tax liability that
For the Year Ended 2010 For the Year Ended 2009 For the Year Ended 2008
would arise if these earnings were remitted is not practicable.
Shares Shares Shares Per
Income (millions) Per Share Income (millions) Per Share Income (millions) Share
In addition, net tax benefits of $124 in 2010, $18 in 2009 and $291 in 2008 recorded directly through equity Net income
predominantly include current and future tax benefits related to employee equity compensation and benefit plans. attributable to
Colgate-
The Company uses a comprehensive model to recognize, measure, present and disclose in its financial statements Palmolive
uncertain tax positions that the Company has taken or expects to take on an income tax return. Company . . . . . $ 2,203 $ 2,291 $ 1,957
Preferred
dividends . . . (34) (30) (28)
Basic EPS . . . . . . . 2,169 487.8 $ 4.45 2,261 499.5 $ 4.53 1,929 506.3 $ 3.81
Stock options
and restricted
stock . . . . . . . . . 3.3 3.8 5.8
Convertible
Preference
stock . . . . . . . . . 34 19.8 30 21.3 28 22.9
Diluted EPS . . . . . $ 2,203 510.9 $ 4.31 $ 2,291 524.6 $ 4.37 $ 1,957 535.0 $ 3.66

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 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

Basic earnings per common share is computed by dividing net income available for common stockholders by the  In June 2005, the First Board of Taxpayers ruled in the Company’s favor and allowed all of the previously claimed
weighted-average number of common shares outstanding for the period. deductions for 1996 through 1998. In March 2007, the First Board of Taxpayers ruled in the Company’s favor and
allowed all of the previously claimed deductions for 1999 through 2001. The tax authorities appealed these
Diluted earnings per common share is computed using the treasury stock method on the basis of the weighted- decisions to the next administrative level.
average number of shares of common stock plus the dilutive effect of potential common shares outstanding during the  In August 2009, the First Taxpayers’ Council (the next and final administrative level of appeal) overruled the
period. Dilutive potential common shares include outstanding stock options and restricted stock awards. decisions of the First Board of Taxpayers, upholding the majority of the assessments, disallowing a portion of the
assessments and remanding a portion of the assessments for further consideration by the First Board of
As of December 31, 2010, 2009 and 2008, the average number of stock options that were anti-dilutive and not Taxpayers.
included in diluted earnings per share calculations were 67,565, 5,794,326 and 1,367,200, respectively.
The Company has filed a motion for reconsideration with the First Taxpayers’ Council and further appeals are available
13. Commitments and Contingencies within the Brazilian federal courts. The Company intends to challenge these assessments vigorously. Although there can
be no assurances, management believes, based on the opinion of its Brazilian legal counsel and other advisors, that the
Minimum rental commitments under noncancellable operating leases, primarily for office and warehouse facilities, are disallowances are without merit and that the Company should ultimately prevail on appeal, if necessary, in the Brazilian
$187 in 2011, $163 in 2012, $137 in 2013, $119 in 2014, $111 in 2015 and $508 thereafter. Rental expense amounted to federal courts.
$220 in 2010, $212 in 2009 and $183 in 2008. Capital leases included in fixed assets, contingent rentals and sublease
income are not significant. The Company has various contractual commitments to purchase raw, packaging and other In 2002, the Brazilian Federal Public Attorney filed a civil action against the federal government of Brazil, Laboratorios
materials totaling approximately $523 at December 31, 2010. Wyeth-Whitehall Ltda. (the Brazilian subsidiary of the Seller) and the Company, as represented by its Brazilian subsidiary,
seeking to annul an April 2000 decision by the Brazilian Board of Tax Appeals that found in favor of the Seller’s Brazilian
As a global company serving consumers in more than 200 countries and territories, the Company is routinely subject subsidiary on the issue of whether it had incurred taxable capital gains as a result of the divestiture of Kolynos. The action
to a wide range of legal proceedings. These include disputes relating to intellectual property, contracts, product liability, seeks to make the Company’s Brazilian subsidiary jointly and severally liable for any tax due from the Seller’s Brazilian
advertising, foreign exchange controls, antitrust and trade regulation, as well as labor and employment, environmental subsidiary. Although there can be no assurances, management believes, based on the opinion of its Brazilian legal
and tax matters. counsel, that the Company should ultimately prevail in this action. The Company intends to challenge this action
vigorously.
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 In December 2005, the Brazilian internal revenue authority issued to the Company’s Brazilian subsidiary a tax
the cleanup, restoration and post-closure monitoring of several sites. assessment with interest and penalties of approximately $73, 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
As a matter of course, the Company is regularly audited by the IRS and other tax authorities around the world in subject to a tax on foreign exchange transactions. The Company is disputing the assessment within the internal revenue
countries where it conducts business. In this regard, the IRS has completed its examination of the Company’s federal authority’s administrative appeals process. In October 2007, the Second Board of Taxpayers, which has jurisdiction over
income tax returns through 2005. The amount of additional tax involved as a result of assessments arising from IRS these matters, ruled in favor of the internal revenue authority. In January 2008, the Company appealed this decision to
examination did not have a material impact on the financial position, results of operations or cash flows of the Company. the next administrative level. Although there can be no assurances, management believes, based on the advice of its
Estimated incremental tax payments related to potential disallowances for subsequent periods are not expected to be Brazilian legal counsel, that the tax assessment is without merit and that the Company should prevail on appeal either at
material. the administrative level or, if necessary, in the Brazilian federal courts. The Company intends to challenge this assessment
vigorously.
Brazilian Matters
European Competition Matters
In 2001, the Central Bank of Brazil sought to impose a substantial fine on the Company’s Brazilian subsidiary
(approximately $157 at the current exchange rate) based on alleged foreign exchange violations in connection with the Since February 2006, the Company has learned that investigations relating to potential competition law violations
financing of the Company’s 1995 acquisition of the Kolynos oral care business from Wyeth (formerly American Home involving the Company’s subsidiaries had been commenced by governmental authorities in the European Union (EU),
Products) (the Seller), as described in the Company’s Form 8-K dated January 10, 1995. The Company appealed the Belgium, France, Germany, Greece, Italy, The Netherlands, Romania, Spain, Switzerland and the United Kingdom (UK).
imposition of the fine to the Brazilian Monetary System Appeals Council (the Council), and on January 30, 2007, the The Company understands that many of these investigations also involve other consumer goods companies and/or retail
Council decided the appeal in the Company’s favor, dismissing the fine entirely. However, certain tax and civil proceedings customers. While several of the investigations are ongoing, there have been the following results to date:
that began as a result of this Central Bank matter are still outstanding as described below.
 In February 2008, the federal competition authority in Germany imposed fines on four of the Company’s
The Brazilian internal revenue authority has disallowed interest deductions and foreign exchange losses taken by the competitors, but the Company was not fined due to its cooperation with the German authorities.
Company’s Brazilian subsidiary for certain years in connection with the financing of the Kolynos acquisition. The tax  In November 2009, the UK Office of Fair Trading informed the Company that it was no longer pursuing its
assessments with interest, at the current exchange rate, approximate $123. The Company has been disputing the investigation of the Company.
disallowances by appealing the assessments within the internal revenue authority’s appellate process with the following
results to date:

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Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

 In December 2009, the Swiss competition law authority imposed a fine of $5 on the Company’s GABA subsidiary ERISA Matters
for alleged violations of restrictions on parallel imports into Switzerland. The Company is appealing the fine in the
Swiss courts. In October 2007, a putative class action claiming that certain aspects of the cash balance portion of the Colgate-
 In January 2010, the Spanish competition law authority found that four suppliers of shower gel had entered into Palmolive Company Employees’ Retirement Income Plan (the Plan) do not comply with the Employee Retirement Income
an agreement regarding product down-sizing, for which Colgate’s Spanish subsidiary was fined $3. The Security Act was filed against the Plan and the Company in the United States District Court for the Southern District of
Company is appealing the fine in the Spanish courts. New York. Specifically, Proesel, et al. v. Colgate-Palmolive Company Employees’ Retirement Income Plan, et al. alleges
 In December 2010, the Italian competition law authority found that 16 consumer goods companies, including improper calculation of lump sum distributions, age discrimination and failure to satisfy minimum accrual requirements,
the Company’s Italian subsidiary, exchanged competitively sensitive information in the cosmetics sector, for which thereby resulting in the underpayment of benefits to Plan participants. Two other putative class actions filed earlier in
the Company’s Italian subsidiary was fined $3. The Company is appealing the fine in the Italian courts. 2007, Abelman, et al. v. Colgate-Palmolive Company Employees’ Retirement Income Plan, et al., in the United States
 While the investigations of the Company’s Romanian subsidiary by the Romanian competition authority have District Court for the Southern District of Ohio, and Caufield v. Colgate-Palmolive Company Employees’ Retirement
been closed since May 2009, a complainant has petitioned the court to reopen one of the investigations. Income Plan, in the United States District Court for the Southern District of Indiana, both alleging improper calculation of
lump sum distributions and, in the case of Abelman, claims for failure to satisfy minimum accrual requirements, were
Currently, formal claims of violations, or statements of objections, are pending against the Company as follows: transferred to the Southern District of New York and consolidated with Proesel into one action, In re Colgate-Palmolive
ERISA Litigation. The complaint in the consolidated action alleges improper calculation of lump sum distributions and
 The French competition authority alleges agreements on pricing and promotion of heavy duty detergents among failure to satisfy minimum accrual requirements, but does not include a claim for age discrimination. The relief sought
four consumer goods companies, including the Company’s French subsidiary. includes recalculation of benefits in unspecified amounts, pre- and post-judgment interest, injunctive relief and attorneys’
 The French competition authority alleges violations of competition law by three pet food producers, including the fees. This action has not been certified as a class action as yet. The parties are in discussions via non-binding mediation to
Company’s Hill’s France subsidiary, focusing on exclusivity arrangements. determine whether the action can be settled. The Company and the Plan intend to contest this action vigorously should
 The Dutch competition authority alleges that six companies, including the Company’s Dutch subsidiary, engaged the parties be unable to reach a settlement.
in concerted practices and exchanged sensitive information in the cosmetics sector.
 The German competition authority alleges in an investigation related to the one resolved in February 2008 that While it is possible that the Company’s cash flows and results of operations in a particular quarter or year could be
17 branded goods companies, including the Company’s German subsidiary, exchanged sensitive information materially affected by the impact of the above-noted contingencies, it is the opinion of management that these matters
related to the German market. will not have a material impact on the Company’s financial position, ongoing results of operations or cash flows.

The Company has responded, or will have an opportunity to respond, to each of these formal claims of violations. 14. Venezuela
Investigations are ongoing in the EU, Belgium, France and Greece, but no formal claims of violations have been filed in
these jurisdictions except in France as noted above. Effective January 1, 2010, Venezuela was designated as hyperinflationary and therefore the functional currency for
the Company’s Venezuelan subsidiary (CP Venezuela) became the U.S. dollar. As a result, the impact of Venezuelan
The Company’s policy is to comply with antitrust and competition laws and, if a violation of any such laws is found, currency fluctuations is reported in income. The change in the reporting currency from the Venezuelan bolivar fuerte to
to take appropriate remedial action and to cooperate fully with any related governmental inquiry. The Company has the U.S. dollar resulted in a one-time charge of $271 recorded within Other (income) expense, net in the first quarter of
undertaken a comprehensive review of its selling practices and related competition law compliance in Europe and 2010. This charge primarily represents the premium paid to acquire U.S. dollar-denominated cash ($150) and bonds ($152)
elsewhere and, where the Company has identified a lack of compliance, it has undertaken remedial action. Competition at the parallel market rate, offset by $31 for U.S. dollar-denominated payables. Previously these items had been
and antitrust law investigations often continue for several years and can result in substantial fines for violations that are remeasured at the parallel market rate and then translated for financial reporting purposes at the official rate of 2.15.
found. Such fines, depending on the gravity and duration of the infringement as well as the value of the sales involved,
have amounted, in some cases, to hundreds of millions of dollars. While the Company cannot predict the final financial On January 8, 2010, the Venezuelan government announced its decision to devalue its currency and implement a
impact of these competition law issues as these matters may change, the Company has taken and will, as necessary, take two-tier exchange rate structure. As a result, the official exchange rate changed from 2.15 to 2.60 for essential goods and
additional reserves as and when appropriate. 4.30 for non-essential goods. The devaluation resulted in a one-time pretax gain of $46 recorded in Other (income)
expense and an aftertax gain of $59 in the first quarter of 2010 related to the remeasurement of the local balance sheet
and lower taxes on accrued but unpaid remittances from Venezuela. In December 2010, the Venezuelan government
announced that effective January 1, 2011 the 2.60 exchange rate for essential goods would be abolished. As a result, CP
Venezuela incurred an aftertax loss of $36 in the fourth quarter of 2010 related to the remeasurement of certain local
balance sheet items for which the 2.60 exchange rate will no longer be received. This loss was offset by lower taxes on
accrued but unpaid remittances.

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Notes to Consolidated Financial Statements (continued) Notes to Consolidated Financial Statements (continued)

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)

We remeasure the financial statements of our Venezuelan subsidiary at the rate at which we expect to remit future Operating profit 2010 2009 2008
dividends, which currently is 4.30. As the local currency operations in Venezuela translated into fewer U.S. dollars, this Oral, Personal and Home Care
had, and will continue to have, an adverse effect on our reported results. North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 884 $ 843 $ 689
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,295 1,360 1,181
For the year ended December 31, 2010, CP Venezuela represented 4% of the Company’s consolidated Net sales. At Europe/South Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 742 748 746
December 31, 2010, CP Venezuela’s bolivar fuerte-denominated monetary net asset position was approximately $200, Greater Asia/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 767 631 527
which does not include $96 of devaluation-protected bonds issued by the Venezuelan government, as these bonds Total Oral, Personal and Home Care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,688 3,582 3,143
provide protection against devaluations by adjusting the amount of bolivares fuertes received at maturity for any Pet Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 559 555 542
devaluation subsequent to issuance. These bonds are considered Level 3 as there was no trading activity in the market at Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (758) (522) (584)
the end of 2010 and their value was determined using unobservable inputs reflecting the Company’s own assumptions. Total Operating profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,489 $ 3,615 $ 3,101
As a result of the elimination of the 2.6 preferential exchange rate effective January 1, 2011, these bonds have revalued
and, based on recent market activity, the Company recorded an aftertax unrealized gain in Other comprehensive income Capital expenditures 2010 2009 2008
of approximately $40 during the first quarter of 2011. Oral, Personal and Home Care
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 57 $ 62 $ 42
15. Segment Information Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 105 112
Europe/South Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 86 64
The Company operates in two product segments: Oral, Personal and Home Care; and Pet Nutrition. The operations Greater Asia/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 91 157
of the Oral, Personal and Home Care segment are managed geographically in four reportable operating segments: North Total Oral, Personal and Home Care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 344 375
America, Latin America, Europe/South Pacific and Greater Asia/Africa. Management evaluates segment performance Pet Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 156 224
based on several factors, including Operating profit. The Company uses Operating profit as a measure of the operating Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 75 85
segment performance because it excludes the impact of corporate-driven decisions related to interest expense and Total Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 550 $ 575 $ 684
income taxes.
Depreciation and amortization 2010 2009 2008
The accounting policies of the operating segments are generally the same as those described in Note 2 to the Oral, Personal and Home Care
Consolidated Financial Statements. Intercompany sales have been eliminated. Corporate operations include stock-based North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 57 $ 59 $ 55
compensation related to stock options and restricted stock awards, research and development costs, Corporate overhead Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 77 87
costs, restructuring and related implementation costs, and gains and losses on sales of non-core product lines and assets. Europe/South Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 67 70
The Company reports these items within Corporate operations as they relate to Corporate-based responsibilities and Greater Asia/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 63 61
decisions and are not included in the internal measures of segment operating performance used by the Company to
Total Oral, Personal and Home Care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 266 273
measure the underlying performance of the business segments. In 2010, Corporate Operating profit also includes the
Pet Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 36 32
one-time $271 charge of transitioning to hyperinflationary accounting in Venezuela as of January 1, 2010, a fourth
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 49 43
quarter $86 pretax charge for termination benefits and a fourth quarter $50 pretax gain on sale of non-core product lines.
Total Depreciation and amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 376 $ 351 $ 348
For further information regarding Venezuela, refer to Note 14.

Net sales 2010 2009 2008

Oral, Personal and Home Care
North America(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,005 $ 2,950 $ 2,852
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,261 4,319 4,088
Europe/South Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,220 3,271 3,582
Greater Asia/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,998 2,655 2,660
Total Oral, Personal and Home Care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,484 13,195 13,182
Pet Nutrition(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,080 2,132 2,148
Total Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,564 $ 15,327 $ 15,330

(1)
Net sales in the U.S. for Oral, Personal and Home Care were $2,591, $2,577 and $2,490 in 2010, 2009 and 2008,
respectively.
(2)
Net sales in the U.S. for Pet Nutrition were $1,025, $1,071 and $1,082 in 2010, 2009 and 2008, respectively.

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 COLGATE-PALMOLIVE COMPANY
COLGATE-PALMOLIVE COMPANY
Notes to Consolidated Financial Statements (continued)
Notes to Consolidated Financial Statements (continued)
(Dollars in Millions Except Per Share Amounts)
(Dollars in Millions Except Per Share Amounts)
Identifiable assets 2010 2009 2008
Oral, Personal and Home Care 17. Supplemental Balance Sheet Information
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,231 $ 2,271 $ 1,997
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,092 3,278 2,550 Inventories 2010 2009
Europe/South Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,775 2,647 2,620 Raw materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 295 $ 310
Greater Asia/Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,943 1,760 1,704 Work-in-process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 50
Total Oral, Personal and Home Care. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,041 9,956 8,871 Finished goods. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 877 849
Pet Nutrition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,081 1,127 1,025 Total Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,222 $ 1,209
Corporate(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 51 83
Total Identifiable assets(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,172 $ 11,134 $ 9,979 Inventories valued under LIFO amounted to $263 and $255 at December 31, 2010 and 2009, respectively. The excess
of current cost over LIFO cost at the end of each year was $52 and $55, respectively. The liquidations of LIFO inventory
(3)
In 2010, Corporate identifiable assets primarily consist of derivative instruments (44%) and investments in equity quantities had no material effect on income in 2010, 2009 and 2008.
securities (48%). In 2009, Corporate identifiable assets primarily consist of derivative instruments (44%) and
investments in equity securities (46%). In 2008, Corporate identifiable assets primarily consist of derivative Property, plant and equipment, net 2010 2009
instruments (66%) and investments in equity securities (27%). Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 187 $ 156
(4)
Long-lived assets in the U.S., primarily property, plant and equipment and goodwill and other intangibles Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,319 1,077
represented approximately one-third of total long-lived assets of $7,116, $6,795 and $6,182 in 2010, 2009 and Manufacturing machinery and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,599 4,481
2008, respectively. Other equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,055 986
7,160 6,700
16. Supplemental Income Statement Information Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,467) (3,184)
Total Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,693 $ 3,516
Other (income) expense, net 2010 2009 2008
Amortization of intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22 $ 22 $ 19 Other accruals 2010 2009
Venezuela hyperinflationary transition charge . . . . . . . . . . . . . . . . . . . . . . . 271 — — Accrued advertising and coupon redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 551 $ 538
Gain from remeasurement of Venezuelan balance sheet . . . . . . . . . . . . . (10) — — Accrued payroll and employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 370
Remeasurement of certain liabilities in Venezuela . . . . . . . . . . . . . . . . . . . . — 27 — Accrued taxes other than income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 101
Termination benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 — — Pension and other retiree benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 61
Gain on sales of non-core product lines. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (50) (5) — Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 24
Investment losses (income) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 25 Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 9
Legal and environmental matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) 27 23 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543 576
Asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 16 — Total Other accruals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,682 $ 1,679
Equity (income) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) (5) (4)
2004 Restructuring Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 24 Other liabilities 2010 2009
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15) 29 16 Pension and other retiree benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,544 $ 1,226
Total Other (income) expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 301 $ 111 $ 103 Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 149
Total Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,704 $ 1,375
Interest expense, net 2010 2009 2008
Interest incurred. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 69 $ 102 $ 115 Accumulated Other Comprehensive Income
Interest capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) (14) (9)
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) (11) (10) Accumulated other comprehensive income is comprised of cumulative foreign currency translation gains and losses,
Total Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 59 $ 77 $ 96 unrecognized pension and other retiree benefit costs, unrealized gains and losses from derivative instruments designated
as cash flow hedges and unrealized gains and losses on available for sale securities. At December 31, 2010 and 2009,
2010 2009 2008 Accumulated other comprehensive income consisted primarily of aftertax unrecognized pension and other retiree benefit
Research and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 256 $ 256 $ 240 costs of $800 and $657, respectively, and cumulative foreign currency translation adjustments of $1,291 and $1,453,
Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,656 $ 1,534 $ 1,650 respectively. Foreign currency translation adjustments in 2010 and 2009 primarily reflect gains due to the strengthening of
the Brazilian real and Swiss franc.

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98 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 99

 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Notes to Consolidated Financial Statements (continued) SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions)

18. Quarterly Financial Data (Unaudited) Column A Column B Column C Column D Column E
Additions
First Second Third Fourth Balance at Charged to
Total Quarter Quarter Quarter Quarter Beginning of Costs and Balance at
Period Expenses Other Deductions End of Period
2010
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,564 $ 3,829 $ 3,814 $ 3,943 $ 3,978 Year Ended December 31, 2010
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,204 2,268 2,242 2,344 2,350 Allowance for doubtful accounts and estimated
Net income including noncontrolling interests. . . . . . . . . . . . . . . . . . . 2,313(1) 387(2) 630 645 651(3) returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 52 $ 1 $ — $ — $ 53
Net income attributable to Colgate-Palmolive Company . . . . . . . . . 2,203(1)
357(2)
603 619 624(3) Valuation allowance for deferred tax assets . . . . . . . . . $ 2 $ — $ — $ 1(1)
$ 1
Earnings per common share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.45(1) 0.71(2) 1.21 1.26 1.28(3) Year Ended December 31, 2009
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.31(1)
0.69(2)
1.17 1.21 1.24(3) Allowance for doubtful accounts and estimated
returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 47 $ 9 $ — $ 4 $ 52
2009 Valuation allowance for deferred tax assets . . . . . . . . . $ 5 $ — $ — $ 3(1) $ 2
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,327 $ 3,503 $ 3,745 $ 3,998 $ 4,081
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,008 2,013 2,201 2,367 2,427 Year Ended December 31, 2008
Net income including noncontrolling interests. . . . . . . . . . . . . . . . . . . 2,397 536 588 617 656 Allowance for doubtful accounts and estimated
Net income attributable to Colgate-Palmolive Company . . . . . . . . . 2,291 508 562 590 631 returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 51 $ 6 $ — $ 10 $ 47
Earnings per common share: Valuation allowance for deferred tax assets . . . . . . . . . $ 11 $ 3 $ — $ 9(1) $ 5
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.53 1.00 1.11 1.17 1.25
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.37 0.97 1.07 1.12 1.21 (1)
Decrease in allowance due to utilization of tax loss and tax credit carryforwards.
Note: Basic and diluted earnings per share are computed independently for each quarter presented. Accordingly, the sum
of the quarterly earnings per share may not agree with the calculated full year earnings per share.
(1)
Net income including noncontrolling interests, Net income attributable to Colgate-Palmolive Company and
earnings per share for the full year of 2010 include a $271 one-time charge related to the transition to
hyperinflationary accounting in Venezuela, $61 of aftertax charges for termination benefits, a $30 aftertax gain on
sales of non-core product lines and a $31 benefit related to the reorganization of an overseas subsidiary.
(2)
Net income including noncontrolling interests, Net income attributable to Colgate-Palmolive Company and
earnings per share for the first quarter of 2010 include a $271 one-time charge related to the transition to
hyperinflationary accounting in Venezuela.
(3)
Net income including noncontrolling interests, Net income attributable to Colgate-Palmolive Company and
earnings per share for the fourth quarter of 2010 include $61 of aftertax charges for termination benefits, a
$30 aftertax gain on sales of non-core product lines and a $31 benefit related to the reorganization of an overseas
subsidiary.

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100 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 101
 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Market and Dividend Information Market and Dividend Information

The Company’s common stock is listed on the New York Stock Exchange and its trading symbol is CL. Dividends on
the common stock have been paid every year since 1895, and the Company’s regular common stock dividend payments
have increased for 48 consecutive years.

Market Price of Common Stock

2010 2009
Quarter Ended High Low High Low
March 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 85.46 $ 79.07 $ 69.32 $ 55.05
June 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85.81 76.93 71.76 57.29
September 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84.59 73.84 76.55 71.02
December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81.18 73.75 86.32 75.82
Year-end Closing Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 80.37 $ 82.15

Dividends Paid Per Common Share

Quarter Ended 2010 2009

March 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.44 $ 0.40
June 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.53 0.44
September 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.53 0.44
December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.53 0.44 These performance graphs do not constitute soliciting material, are not deemed filed with the Securities and
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.03 $ 1.72 Exchange Commission and are not incorporated by reference in any of the Company’s filings under the Securities Act of
1933 or the Exchange Act, whether made before or after the date of this Annual Report on Form 10-K and irrespective of
Stock Price Performance Graphs any general incorporation language in any such filing, except to the extent the Company specifically incorporates these
performance graphs by reference therein.
The following graphs compare cumulative total stockholder returns on Colgate-Palmolive Company common stock
against the S&P Composite-500 Stock Index and a peer company index for the twenty-year, ten-year and five-year periods
each ending December 31, 2010. The peer company index is comprised of consumer products companies that have both
domestic and international businesses. These companies are: Avon Products, Inc., The Clorox Company, Kimberly-Clark
Corporation, The Procter & Gamble Company and Unilever (N.V. and plc).

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102 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 103
 COLGATE-PALMOLIVE COMPANY COLGATE-PALMOLIVE COMPANY

Historical Financial Summary Historical Financial Summary

For the years ended December 31, For the years ended December 31,

(Dollars in Millions Except Per Share Amounts) (Dollars in Millions Except Per Share Amounts)
(Unaudited) (Unaudited)

2010 2009 2008 2007 2006 2005 2004 2003 2002 2001
Continuing Operations (1)
Net income attributable to Colgate-Palmolive Company and earnings per share in 2010 include a $271 one-time
Net sales . . . . . . . . . . . . . . $ 15,564 $ 15,327 $ 15,330 $ 13,790 $ 12,238 $ 11,397 $ 10,584 $ 9,903 $ 9,294 $ 9,084
Results of operations: charge related to the transition to hyperinflationary accounting in Venezuela, $61 of aftertax charges for
Net income attributable termination benefits, a $30 aftertax gain on sales of non-core product lines and a $31 benefit related to
to Colgate-Palmolive the reorganization of an overseas subsidiary.
Company . . . . . . . . . . 2,203(1) 2,291 1,957(2) 1,737(3) 1,353(4) 1,351(5) 1,327(6) 1,421 1,288 1,147 (2)
Net income attributable to Colgate-Palmolive Company and earnings per share in 2008 include $113 of aftertax
Per share, basic . . . . . . . 4.45(1) 4.53 3.81(2) 3.35(3) 2.57(4) 2.54(5) 2.45(6) 2.60 2.33 2.02
Per share, diluted . . . . . . 4.31(1) 4.37 3.66(2) 3.20(3) 2.46(4) 2.43(5) 2.33(6) 2.46 2.19 1.89 charges associated with the 2004 Restructuring Program.
(3)
Depreciation and Net income attributable to Colgate-Palmolive Company and earnings per share in 2007 include a gain for the sale
amortization expense. . . 376 351 348 334 329 329 328 316 297 336 of the Company’s household bleach business in Latin America of $29 aftertax and an income tax benefit of $74
related to the reduction of a tax loss carryforward valuation allowance in Brazil, partially offset by tax provisions for
Financial Position
Current ratio . . . . . . . . . . . 1.0 1.1 1.3 1.1 1.0 1.0 1.0 1.0 1.0 1.0 the recapitalization of certain overseas subsidiaries. These gains were more than offset by $184 of aftertax charges
Property, plant and associated with the 2004 Restructuring Program, $10 of pension settlement charges and $8 of charges related to
equipment, net . . . . . . . 3,693 3,516 3,119 3,015 2,696 2,544 2,648 2,542 2,491 2,514 the limited voluntary recall of certain Hill’s Pet Nutrition feline products.
Capital expenditures . . . . . 550 575 684 583 476 389 348 302 344 340 (4)
Net income attributable to Colgate-Palmolive Company and earnings per share in 2006 include a gain for the sale
Total assets . . . . . . . . . . . . 11,172 11,134 9,979 10,112 9,138 8,507 8,673 7,479 7,087 6,985
Long-term debt . . . . . . . . . 2,815 2,821 3,585 3,222 2,720 2,918 3,089 2,685 3,211 2,812 of the Company’s household bleach business in Canada of $38 aftertax. This gain was more than offset by $287 of
Colgate-Palmolive aftertax charges associated with the 2004 Restructuring Program and $48 of aftertax charges related to the
Company shareholders’ adoption of the update to the Stock Compensation Topic of the FASB Codification.
equity . . . . . . . . . . . . . . 2,675 3,116 1,923 2,286 1,411 1,350 1,245 887 350 846 (5)
Net income attributable to Colgate-Palmolive Company and earnings per share in 2005 include a gain for the sale
Share and Other of heavy-duty laundry detergent brands in North America and Southeast Asia of $93 aftertax. This gain was more
Book value per common than offset by $145 of aftertax charges associated with the 2004 Restructuring Program, $41 of income taxes for
share . . . . . . . . . . . . . . . 5.89 6.52 4.09 4.75 3.03 2.87 2.84 2.11 1.08 1.91 incremental repatriation of foreign earnings related to the American Jobs Creation Act and $23 aftertax of non-cash
Cash dividends declared
pension and other retiree benefit charges.
and paid per common (6)
share . . . . . . . . . . . . . . . 2.03 1.72 1.56 1.40 1.25 1.11 0.96 0.90 0.72 0.675 Net income attributable to Colgate-Palmolive Company and earnings per share in 2004 include $48 of aftertax
Closing price . . . . . . . . . . . 80.37 82.15 68.54 77.96 65.24 54.85 51.16 50.05 52.43 57.75 charges associated with the 2004 Restructuring Program.
Number of common shares
outstanding (in millions) 494.9 494.2 501.4 509.0 512.7 516.2 526.6 533.7 536.0 550.7
Number of common
shareholders of record . . 29,900 30,600 31,400 32,200 33,400 35,000 36,500 37,700 38,800 40,900
Number of employees . . . . 39,200 38,100 36,600 36,000 34,700 35,800 36,000 36,600 37,700 38,500

78 79

104 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 105
 COLGATE-PALMOLIVE COMPANY Exhibit No. Description

EXHIBITS TO FORM 10-K 10-C a) Colgate-Palmolive Company Executive Severance Plan, as amended and restated as of July 8, 2010.
(Registrant hereby incorporates by reference Exhibit 10-A to its Current Report on Form 8-K filed on July 9,
YEAR ENDED DECEMBER 31, 2010 2010, File No. 1-644.)

Commission File No. 1-644 b) Colgate-Palmolive Company Executive Severance Plan Trust. (Registrant hereby incorporates by reference
Exhibit 10-E (b) to its Annual Report on Form 10-K for the year ended December 31, 1987, File No. 1-644.)
Exhibit No. Description
c) Amendment, dated as of October 29, 2007, to the Colgate-Palmolive Company Executive Severance Plan
3-A Restated Certificate of Incorporation, as amended. (Registrant hereby incorporates by reference Exhibit 3-A to Trust. (Registrant hereby incorporates by reference Exhibit 10-C to its Quarterly Report on Form 10-Q for the
its Quarterly Report on Form 10-Q for the quarter ended June 30, 2008, File No. 1-644.) quarter ended September 30, 2007, File No. 1-644.)

3-B By-laws, as amended. (Registrant hereby incorporates by reference Exhibit 3-A to its Current Report on Form 10-D Colgate-Palmolive Company Pension Plan for Outside Directors, as amended and restated. (Registrant hereby
8-K filed on June 7, 2007, File No. 1-644.) incorporates by reference Exhibit 10-D to its Annual Report on Form 10-K for the year ended December 31,
1999, File No. 1-644.)
4 a) Indenture, dated as of November 15, 1992, between the Company and The Bank of New York Mellon
(formerly known as The Bank of New York) as Trustee. (Registrant hereby incorporates by reference Exhibit 4.1 10-E Colgate-Palmolive Company 2007 Stock Plan for Non-Employee Directors, amended and restated as of
to its Registration Statement on Form S-3 and Post-Effective Amendment No. 1 filed on June 26, 1992, September 12, 2007. (Registrant hereby incorporates by reference Exhibit 10-D to its Quarterly Report on
Registration No. 33-48840.)* Form 10-Q for the quarter ended September 30, 2007, File No. 1-644.)

b) Colgate-Palmolive Company Employee Stock Ownership Trust Agreement dated as of June 1, 1989, as 10-F Colgate-Palmolive Company Stock Plan for Non-Employee Directors, amended and restated as of September
amended. (Registrant hereby incorporates by reference Exhibit 4-B (b) to its Quarterly Report on Form 10-Q 12, 2007. (Registrant hereby incorporates by reference Exhibit 10-E to its Quarterly Report on Form 10-Q for
for the quarter ended June 30, 2000, File No. 1-644.) the quarter ended September 30, 2007, File No. 1-644.)

c) Form of 4.75% Notes Due 2014 of Colgate-Palmolive Company. (Registrant hereby incorporates by reference 10-G a) Colgate-Palmolive Company Restated and Amended Deferred Compensation Plan for Non-Employee
Exhibit 99(B) to its Registration Statement on Form 8-A filed on June 8, 2007, File No. 1-644.) Directors, as amended. (Registrant hereby incorporates by reference Exhibit 10-H to its Annual Report on
Form 10-K for the year ended December 31, 1997, File No. 1-644.)
10-A a) Colgate-Palmolive Company 2009 Executive Incentive Compensation Plan. (Registrant hereby incorporates by
reference Appendix A to its 2009 Notice of Meeting and Proxy Statement.) b) Amendment, dated as of September 12, 2007, to the Colgate-Palmolive Company Restated and Amended
Deferred Compensation Plan for Non-Employee Directors. (Registrant hereby incorporates by reference Exhibit
b) Colgate-Palmolive Company Executive Incentive Compensation Plan Trust, as amended. (Registrant hereby 10-F to its Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, File No. 1-644.)
incorporates by reference Exhibit 10-B (b) to its Annual Report on Form 10-K for the year ended December 31,
1987, File No. 1-644.) 10-H Colgate-Palmolive Company Deferred Compensation Plan, amended and restated as of September 12, 2007.
(Registrant hereby incorporates by reference Exhibit 10-G to its Quarterly Report on Form 10-Q for the quarter
c) Amendment, dated as of October 29, 2007, to the Colgate-Palmolive Company Executive Incentive ended September 30, 2007, File No. 1-644.)
Compensation Plan Trust. (Registrant hereby incorporates by reference Exhibit 10-A (b) to its Quarterly Report
on Form 10-Q for the quarter ended September 30, 2007, File No. 1-644.) 10-I Colgate-Palmolive Company Above and Beyond Plan – Officer Level. (Registrant hereby incorporates by
reference Exhibit 10-A to its Quarterly Report on Form 10-Q for the quarter ended September 30, 2004, File
10-B a) Colgate-Palmolive Company Supplemental Salaried Employees’ Retirement Plan, amended and restated as of No. 1-644.)
September 1, 2010. (Registrant hereby incorporates by reference Exhibit 10-A to its Quarterly Report on Form
10-Q for the quarter ended September 30, 2010, File No. 1-644.) 10-J a) Colgate-Palmolive Company Non-Employee Director Stock Option Plan, as amended. (Registrant hereby
incorporates by reference Exhibit 10-L to its Annual Report on Form 10-K for the year ended December 31,
b) Amended and Restated Colgate-Palmolive Company Supplemental Salaried Employees’ Retirement Plan Trust, 1997, File No. 1-644.)
dated August 2, 1990. (Registrant hereby incorporates by reference Exhibit 10-B (b) to its Quarterly Report on
Form 10-Q for the quarter ended September 30, 2007, File No. 1-644.) b) Amendment, dated as of December 29, 2005, to the Colgate-Palmolive Company Non-Employee Director
Stock Option Plan, as amended. (Registrant hereby incorporates by reference Exhibit 10-J (b) to its Annual
c) Amendment, dated as of October 29, 2007, to the Amended and Restated Colgate-Palmolive Company Report on Form 10-K for the year ended December 31, 2005, File No. 1-644.)
Supplemental Salaried Employee Trust. (Registrant hereby incorporates by reference Exhibit 10-B (c) to its
Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, File No. 1-644.) c) Amendment, dated as of December 7, 2006, to the Colgate-Palmolive Company Non-Employee Director
Stock Option Plan, as amended. (Registrant hereby incorporates by reference Exhibit 10-J (c) to its Annual
Report on Form 10-K for the year ended December 31, 2006, File No. 1-644.)

80 81

106 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 107
 Exhibit No. Description Exhibit No. Description

d) Amendment, dated as of October 29, 2007, to the Colgate-Palmolive Company Non-Employee Director Stock 10-P Form of Restricted Stock Award Agreement used in connection with grants to employees under the 2009
Option Plan. (Registrant hereby incorporates by reference Exhibit 10-K to its Quarterly Report on Form 10-Q Colgate-Palmolive Company Executive Incentive Compensation Plan. (Registrant hereby incorporates by
for the quarter ended September 30, 2007, File No. 1-644.) reference Exhibit 10-P to its Annual Report on Form 10-K for the year ended December 31, 2009, File No. 1-
644.)
10-K a) U.S. $1,500,000,000 Five Year Credit Agreement dated as of November 3, 2005, among Colgate-Palmolive
Company as Borrower, the Banks named therein as Banks, Bank of America, N.A., BNP Paribas, HSBC Bank 10-Q a) Colgate-Palmolive Company 2005 Non-Employee Director Stock Option Plan. (Registrant hereby incorporates
USA, N.A. and JPMorgan Chase Bank, N.A. as Co-Syndication Agents, Citibank, N.A. as Administrative Agent by reference appendix C to its 2005 Notice of Meeting and Proxy Statement.)
and Citigroup Global Markets Inc. as Arranger. (Registrant hereby incorporates by reference Exhibit 10-A to its
Quarterly Report on Form 10-Q for the quarter ended September 30, 2005, File No. 1-644.) b) Form of Award Agreement used in connection with grants to non-employee directors under the Colgate-
Palmolive Company 2005 Non-Employee Director Stock Option Plan. (Registrant hereby incorporates by
b) Assumption Agreement dated August 13, 2008, among Colgate-Palmolive Company as Borrower, Citibank, reference Exhibit 10-B to its Current Report on Form 8-K dated May 4, 2005, File No. 1-644.)
N.A. as Administrative Agent and Banco Bilao Vizcaya Argentaria, S.A. (Registrant hereby incorporates by
reference Exhibit 10-M (b) to its Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, c) Amendment, dated as of September 7, 2006, to the Colgate-Palmolive Company 2005 Non-Employee
File No. 1-644.) Director Stock Option Plan. (Registrant hereby incorporates by reference Exhibit 10-B to its Quarterly Report
on Form 10-Q for the quarter ended September 30, 2006, File No. 1-644.)
c) Assumption Agreement dated August 13, 2008, among Colgate-Palmolive Company as Borrower, Citibank,
N.A. as Administrative Agent and The Northern Trust Company. (Registrant hereby incorporates by reference d) Amendment, dated as of December 7, 2006, to the Colgate-Palmolive Company 2005 Non-Employee
Exhibit 10-M (c) to its Quarterly Report on Form 10-Q for the quarter ended September 30, 2008, File No. 1- Director Stock Option Plan. (Registrant hereby incorporates by reference Exhibit 10-S (d) to its Annual Report
644.) on Form 10-K for the year ended December 31, 2006, File No. 1-644.)

10-L a) Colgate-Palmolive Company 1997 Stock Option Plan. (Registrant hereby incorporates by reference appendix A e) Amendment, dated as of October 29, 2007, to the Colgate-Palmolive Company 2005 Non-Employee Director
to its 1997 Notice of Meeting and Proxy Statement.) Stock Option Plan. (Registrant hereby incorporates by reference Exhibit 10-J to its Quarterly Report on Form
10-Q for the quarter ended September 30, 2007, File No. 1-644.)
b) Amendment, dated as of December 29, 2005, to the Colgate-Palmolive Company 1997 Stock Option Plan.
(Registrant hereby incorporates by reference Exhibit 10-M (b) to its Annual Report on Form 10-K for the year 10-R a) Colgate-Palmolive Company 2005 Employee Stock Option Plan. (Registrant hereby incorporates by reference
ended December 31, 2005, File No. 1-644.) appendix B to its 2005 Notice of Meeting and Proxy Statement.)

c) Amendment, dated as of December 7, 2006, to the Colgate-Palmolive Company 1997 Stock Option Plan. b) Form of Award Agreement used in connection with grants to employees under the Colgate-Palmolive
(Registrant hereby incorporates by reference Exhibit 10-M (c) to its Annual Report on Form 10-K for the year Company 2005 Employee Stock Option Plan. (Registrant hereby incorporates by reference Exhibit 10-A to its
ended December 31, 2006, File No. 1-644.) Current Report on Form 8-K dated May 4, 2005, File No. 1-644.)

d) Action, dated as of October 29, 2007, taken pursuant to the Colgate-Palmolive Company 2005 Employee c) Amendment, dated as of September 7, 2006, to the Colgate-Palmolive Company 2005 Employee Stock
Stock Option Plan and Colgate-Palmolive Company 1997 Stock Option Plan. (Registrant hereby incorporates Option Plan. (Registrant hereby incorporates by reference Exhibit 10-A to its Quarterly Report on Form 10-Q
by reference Exhibit 10-I to its Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, File for the quarter ended September 30, 2006, File No. 1-644.)
No. 1-644.)
d) Amendment, dated as of December 7, 2006, to the Colgate-Palmolive Company 2005 Employee Stock
10-M Colgate-Palmolive Company Supplemental Savings and Investment Plan, amended and restated as of Option Plan. (Registrant hereby incorporates by reference Exhibit 10-T (d) to its Annual Report on Form 10-K
September 1, 2010. (Registrant hereby incorporates by reference Exhibit 10-B to its Quarterly Report on Form for the year ended December 31, 2006, File No. 1-644.)
10-Q for the quarter ended September 30, 2010, File No. 1-644.)
e) Action, dated as of October 29, 2007, taken pursuant to the Colgate-Palmolive Company 2005 Employee
10-N Form of Indemnification Agreement between Colgate-Palmolive Company and its directors, executive officers Stock Option Plan and Colgate-Palmolive Company 1997 Stock Option Plan. (Registrant hereby incorporates
and certain key employees. (Registrant hereby incorporates by reference Exhibit 10-B to its Quarterly Report by reference Exhibit 10-I to its Quarterly Report on Form 10-Q for the quarter ended September 30, 2007, File
on Form 10-Q for the quarter ended June 30, 2004, File No. 1-644.) No. 1-644.)

10-O Form of Stock Incentive Agreement used in connection with grants to employees under the Colgate-Palmolive f) Amendment, dated as of February 26, 2009, to the Colgate-Palmolive Company 2005 Employee Stock Option
Company 1997 Stock Option Plan. (Registrant hereby incorporates by reference Exhibit 10-O to its Current Plan. (Registrant hereby incorporates by reference Exhibit 10-S (f) to its Annual Report on Form 10-K for the
Report on Form 8-K dated September 8, 2004, File No. 1-644.) year ended December 31, 2008, File No. 1-644.)

12 Computation of Ratio of Earnings to Fixed Charges.**

82 83

108 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 109
 Exhibit No. Description EXHIBIT 12
COLGATE-PALMOLIVE COMPANY
21 Subsidiaries of the Registrant.** COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

23 Consent of Independent Registered Public Accounting Firm.** (Dollars in Millions Except Per Share Amounts)

24 Powers of Attorney.** Years Ended December 31,

2010 2009 2008 2007 2006

31-A Certificate of the Chairman of the Board, President and Chief Executive Officer of Colgate-Palmolive Company Earnings:
pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.** Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,430 $ 3,538 $ 3,005 $ 2,563 $ 2,059

31-B Certificate of the Chief Financial Officer of Colgate-Palmolive Company pursuant to Rule 13a-14(a) under the Add:
Securities Exchange Act of 1934.** Interest on indebtedness and amortization of debt
expense discount or premium . . . . . . . . . . . . . . . . . . . . . . . . . . 64 88 106 167 167
32 Certificate of the Chairman of the Board, President and Chief Executive Officer and the Chief Financial Officer Portion of rents representative of interest factor . . . . . . . . . . . 73 71 61 52 47
of Colgate-Palmolive Company pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 18 Loss on equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —
U.S.C. § 1350.** Less:
Gain on equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) (5) (4) (3) (3)
101 The following materials from Colgate-Palmolive Company’s Annual Report on Form 10-K for the year ended Income as adjusted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,562 $ 3,692 $ 3,168 $ 2,779 $ 2,270
December 31, 2010, formatted in eXtensible Business Reporting Language (XBRL): (i) the Consolidated Fixed Charges:
Statements of Income, (ii) the Consolidated Balance Sheets, (iii) the Consolidated Statements of Changes in Interest on indebtedness and amortization of debt
Shareholders’ Equity, (iv) the Consolidated Statements of Comprehensive Income, (v) the Consolidated expense discount or premium . . . . . . . . . . . . . . . . . . . . . . . . . . $ 64 $ 88 $ 106 $ 167 $ 167
Statements of Cash Flows, (vi) Notes to Consolidated Financial Statements, and (vii) Financial Statement Portion of rents representative of interest factor . . . . . . . . . . . 73 71 61 52 47
Schedule. Capitalized interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 14 9 6 4
Total fixed charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 141 $ 173 $ 176 $ 225 $ 218
* Registrant hereby undertakes upon request to furnish the Commission with a copy of any instrument with respect Ratio of earnings to fixed charges . . . . . . . . . . . . . . . . . . . . . . . . 25.3 21.3 18.0 12.4 10.4
to long-term debt where the total amount of securities authorized thereunder does not exceed 10% of the total
assets of the registrant and its subsidiaries on a consolidated basis.
** Filed herewith.

The exhibits indicated above that are not included with the Form 10-K are available upon request and payment of a
reasonable fee approximating the registrant’s cost of providing and mailing the exhibits. Inquiries should be directed to:

Colgate-Palmolive Company
Office of the Secretary (10-K Exhibits)
300 Park Avenue
New York, New York 10022-7499

84 85

110 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 111
 Shareholder Information

Corporate Offices dend reinvestment options, offers optional Colgate also offers earnings information,
Colgate-Palmolive Company cash investments by check or automatic dividend news and other corporate an-
300 Park Avenue monthly payments, as well as many other nouncements toll-free at 1-800-850-2654.
New York, NY 10022-7499 features. If you would like to learn more The information can be read to the caller
(212) 310-2000 about the Plan or to enroll, please visit and can also be received by mail or fax.
the web site indicated above or contact
Stock Exchange our transfer agent, at 1-800-756-8700 to Investor Relations/Reports
The common stock of request a Plan brochure and the forms Copies of annual reports, press releases,
Colgate-Palmolive Company needed to start the process. company brochures, Forms 10-K and other
is listed and traded on The filings and publications are available without
New York Stock Exchange Annual Meeting charge from the Investor Relations Depart-
under the symbol CL. Colgate shareholders are invited to attend ment:
our annual meeting. It will be held on u by mail, directed to the corporate
SEC and NYSE Certifications Friday, May 6, 2011 at 10:00 a.m. in the address
The certifications of Colgate’s Chief Broadway Ballroom of the Marriott Marquis u by e-mail, [email protected]
Executive Officer and Chief Financial Of- Hotel, Sixth Floor, Broadway at 45th Street, u by calling 1-800-850-2654 or by calling
ficer, required under Section 302 of the New York, NY. Even if you plan to attend Investor Relations at (212) 310-2575
Sarbanes-Oxley Act of 2002, have been the meeting, please vote by proxy. You may
filed as exhibits to Colgate’s 2010 Annual do so by using the telephone, the Internet Individual investors with other requests:
Report on Form 10-K. In addition, in 2010, or your proxy card. u please write Investor Relations at the
Colgate’s Chief Executive Officer submitted corporate address or
[THIS PAGE INTENTIONALLY LEFT BLANK]
the annual certification to the NYSE regard- Independent Registered u call (212) 310-2575
ing Colgate’s compliance with the NYSE Public Accounting Firm
corporate governance listing standards. PricewaterhouseCoopers LLP Institutional Investors:
u call Bina Thompson at (212) 310-3072
Transfer Agent and Registrar Communications to the
Our transfer agent can assist you with a Board of Directors Other Reports
variety of shareholder services, including Stockholders and other interested parties You can obtain a copy of Colgate’s World
change of address, transfer of stock to are encouraged to communicate directly Fact Sheet, Product Safety Research Policy,
another person, questions about dividend with the Company’s independent directors Colgate’s Global Supply Chain, Environmen-
checks, direct deposit of dividends and by sending an e-mail to directors@colpal. tal Policy and Our History by calling Col-
Colgate’s Direct Stock Purchase Plan: com or by writing to Directors, c/o Office gate-Palmolive Consumer Affairs at 1-800-
of the General Counsel, Colgate-Palmolive 468-6502. Colgate’s Advertising Placement
BNY Mellon Shareowner Services Company, 300 Park Avenue, 11th Floor, Policy, HIV/AIDS Policy, Occupational Health
Shareowner Services New York, NY 10022-7499. Stockholders & Safety Policy, Colgate’s Global Diversity,
PO Box 358015 and other interested parties may also Colgate: Respecting The World Around Us
Pittsburgh, PA 15252-8015 communicate with individual independent – Living Our Values For Sustainability and
1-800-756-8700 or (201) 680-6685 directors and committee chairs by writing to Colgate’s Code of Conduct are available on
them at the above mailing address, in care Colgate’s web site at www.colgate.com.
E-mail: of the Office of the General Counsel. Such
[email protected] communications are handled in accordance Consumer Affairs
Web site: with the procedures described on the For Oral, Personal and Home Care
www.bnymellon.com/shareowner/isd Company’s web site at www.colgate.com. 1-800-468-6502
Hearing impaired: TDD: 1-800-231-5469 For Hill’s Pet Nutrition
Financial Information 1-800-445-5777
Direct Stock Purchase Plan Financial results, dividend news and SEC
A Direct Stock Purchase Plan is available filings are available on Colgate’s web site at Corporate Communications
through BNY Mellon Shareowner Services, www.colgate.com. (212) 310-2199
our transfer agent. The Plan includes divi-

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112 2010 Annual Report Colgate-Palmolive Company 2010 Annual Report 113
 300 Park Avenue New York, NY 10022-7499

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114 2010 Annual Report