Financial Model - Colgate Palmolive (solved)

Prepared by Dheeraj Vaidya, CFA, FRM

dheeraj@wallstreetmojo.com
Table of Contents
Income Statements
Balance Sheet
Cash Flows
Depreciation Schedule
Amortization Schedule
Working Capital Schedule
Other Long Term Schedule
Shareholder's Equity Schedule
Shares Outstanding Schedule
Debt Schedule

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olive (solved)

Colgate-Palmolive Company
Income Statement (Consolidated)
($ in Million Except Per Share Amounts)
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Other (income) expense, net
EBIT
Interest expense, net
EBT
Provision for income taxes
Net income including noncontrolling interests
Less: Net income attributable to noncontrolling interests
Net income attributable to Colgate-Palmolive Company
Earnings per common share, basic
Earnings per common share, diluted
Basic Weighted Average Shares
Diluted Weighted Average Shares
EBITDA

Vertical Analysis
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Other (income) expense, net
Operating profit
Interest expense, net
Income before income taxes
Provision for income taxes
Net income including noncontrolling interests
Less: Net income attributable to noncontrolling interests (% of Net Income)
Net income attributable to Colgate-Palmolive Company
Effective Tax Rates

Horizontal Analysis
Net sales
Cost of sales
Gross profit
Selling, general and administrative expenses
Other (income) expense, net
Operating profit
Interest expense, net
Income before income taxes
Provision for income taxes
Net income including noncontrolling interests
Less: Net income attributable to noncontrolling interests
Net income attributable to Colgate-Palmolive Company

Segmental Information

Oral, Personal and Home Care

North America
% growth (yoy)
Latin America
% growth (yoy)
Europe/South Pacific
% growth (yoy)
Asia
% growth (yoy)
Africa/Eurasia
% growth (yoy)
Total Oral, Personal and Home Care

Pet Nutrition
% growth (yoy)
Total Net sales

Modeling Revenues and Costs

Dec-10
15,564
6,360
9,204

Dec-11
16,734
7,144
9,590

Dec-12
17,085
7,153
9,932

Dec-13
17,420 $
7,219
10,201

Dec-14
17,780 $
7,379
10,401

Dec-15
18,146
7,531
10,616

5,414
301
3,489
59

5,758
(9)
3,841
52

5,930
113
3,889
15

6,223
422
3,556
(9)

6,223
444
3,734
(83)

6,351
454
3,811
(83)

3,430
1,117
2,313
110
2,203
2.23
2.16

3,789
1,235
2,554
123
2,431
2.49
2.47

3,874
1,243
2,631
159
2,472
2.60
2.57

3,565
1,155
2,410
169
2,241
2.41
2.38

3,816
1,240
2,576
180
2,396
2.62
2.61

3,894
1,265
2,628
184
2,444
2.76
2.71

976.7
984.1

952.1
960.2

930.8
939.9

913.8
918.9

884.7
901.3

4,179

4,290

Dec-10
100.0%
40.9%
59.1%

Dec-11
100.0%
42.7%
57.3%

Dec-12
100.0%
41.9%
58.1%

Dec-13
100.0%
41.4%
58.6%

Dec-14
100.0%
41.5%
58.5%

Dec-15
100.0%
41.5%
58.5%

34.8%
1.9%
22.4%
0.4%

34.4%
-0.1%
23.0%
0.3%

34.7%
0.7%
22.8%
0.1%

35.7%
2.4%
20.4%
-0.1%

35%
2.5%
21.0%

35%
2.5%
21.0%

22.0%
7.2%
14.9%
4.8%
14.2%

22.6%
7.4%
15.3%
4.8%
14.5%

22.7%
7.3%
15.4%
6.0%
14.5%

20.5%
6.6%
13.8%
7.0%
12.9%

21.5%
7.0%
14.5%
7.0%
13.5%

21.5%
7.0%
14.5%
7.0%
13.5%

32.6%

32.6%

32.1%

32.4%

32.5%

32.5%

Dec-10
1.5%
0.6%
2.2%

Dec-11
7.5%
12.3%
4.2%

Dec-12
2.1%
0.1%
3.6%

Dec-13
2.0%
0.9%
2.7%

Dec-14
2.1%
2.2%
2.0%

Dec-15
2.1%
2.1%
2.1%

2.5%
171.2%
-3.5%
-23.4%

6.4%
-103.0%
10.1%
-11.9%

3.0%
-1355.6%
1.2%
-71.2%

4.9%
273.5%
-8.6%
-160.0%

0.0%
5.3%
5.0%
818.0%

2.1%
2.1%
2.1%
0.4%

-3.1%
-2.1%
-3.5%
3.8%
-3.8%

10.5%
10.6%
10.4%
11.8%
10.3%

2.2%
0.6%
3.0%
29.3%
1.7%

-8.0%
-7.1%
-8.4%
6.3%
-9.3%

7.0%
7.4%
6.9%
6.7%
6.9%

2.0%
2.0%
2.0%
2.0%
2.0%

Dec-10

Dec-11

Dec-12

Dec-13

Dec-14

Dec-15

3,072
3.4%
5,012
-0.4%
3,396
-0.6%
2,472
9.2%
1,257
1.3%
15,209
1.9%

3,195
4.0%
5,062
1.0%
3,430
1.0%
2,719
10.0%
1,276
1.5%
15,513
2.0%

3,323
4.0%
5,113
1.0%
3,464
1.0%
2,991
10.0%
1,295
1.5%
15,824
2.0%

2,160
-0.6%

2,211
2.4%

2,266
2.5%

2,323
2.5%

17,085 $

17,420 $

17,780 $

2,878 $
4,895
3,508
2,074
1,207
14,562

2,172

16,734 $

2,971 $
3.2%
5,032
2.8%
3,417
-2.6%
2,264
9.2%
1,241
2.8%
14,925
2.5%

18,146

Dec-16
18,521 $
7,686
10,835

Dec-17
18,903 $
7,845
11,058

Dec-18
19,294
8,007
11,287

6,482
463
3,889
(80)

6,616
473
3,970
(89)

6,753
482
4,052
(87)

3,970
1,290
2,679
188
2,492
2.91
2.85

4,059
1,319
2,740
192
2,548
3.07
3.01

4,138
1,345
2,793
196
2,598
3.22
3.17

857.0
872.9

830.8
845.9

805.9
820.4

4,404

4,520

4,639

Dec-16
100.0%
41.5%
58.5%

Dec-17
100.0%
41.5%
58.5%

Dec-18
100.0%
41.5%
58.5%

35%
2.5%
21.0%

35%
2.5%
21.0%

35%
2.5%
21.0%

21.4%
7.0%
14.5%
7.0%
13.5%

21.5%
7.0%
14.5%
7.0%
13.5%

21.4%
7.0%
14.5%
7.0%
13.5%

32.5%

32.5%

32.5%

Dec-16
2.1%
2.1%
2.1%

Dec-17
2.1%
2.1%
2.1%

Dec-18
2.1%
2.1%
2.1%

2.1%
2.1%
2.1%
-3.4%

2.1%
2.1%
2.1%
11.1%

2.1%
2.1%
2.1%
-2.8%

1.9%
1.9%
1.9%
1.9%
1.9%

2.2%
2.2%
2.2%
2.2%
2.2%

2.0%
2.0%
2.0%
2.0%
2.0%

Dec-16

Dec-17

Dec-18

3,456
4.0%
5,164
1.0%
3,499
1.0%
3,290
10.0%
1,314
1.5%
16,140
2.0%

3,594
4.0%
5,216
1.0%
3,534
1.0%
3,619
10.0%
1,334
1.5%
16,463
2.0%

3,738
4.0%
5,268
1.0%
3,569
1.0%
3,981
10.0%
1,354
1.5%
16,792
2.0%

2,381
2.5%

2,441
2.5%

2,502
2.5%

18,521 $

18,903 $

19,294

Colgate-Palmolive Company
Consolidated Balance Sheets
Assets
Current Assets
Cash and cash equivalents
Receivables
Inventories
Other current assets
Total current assets
Property, plant and equipment, net
Total assets
Liabilities and Shareholders' Equity
Current Liabilities
Total current liabilities

Dec-10

Dec-11

490
1,610
1,222
408
3,730

878
1,675
1,327
522
4,402

3,693
11,172

3,668
12,724

3,728

3,716

2,815
108
1,704
8,355
-

4,430
252
1,785
10,183
-

2,675
142
2,817

2,375
166
2,541

11,172

12,724

Revolver
Long-term debt
Deferred income taxes
Other liabilities
Total liabilities
Commitments and contingent liabilities
Shareholders' Equity
Total Colgate-Palmolive Company
shareholders' equity
Noncontrolling interests
Total shareholders' equity
Total liabilities and shareholders'
equity

Check

Dec-12

Dec-13

Dec-14

Dec-15

Dec-16

884
1,668
1,365
639
4,556

962
1,636
1,425
799
4,822

514
1,705
1,415
800
4,434

500
1,740
1,444
817
4,501

500
1,776
1,474
833
4,584

3,842
13,394

4,083
13,876

4,378
13,754

4,654
14,067

4,909
14,376

3,736

4,470

4,067

3,911

4,395

940

1,619

4,926
293
2,049
11,004

4,749
444
1,677
11,340

4,258
444
1,677
10,446

4,003
444
1,677
10,975

3,339
444
1,677
11,475

2,189
201
2,390

2,305
231
2,536

2,897
411
3,309

2,497
595
3,093

2,119
783
2,902

13,394

13,876

13,754

14,067

14,376

Dec-17

Dec-18

500
1,813
1,505
851
4,668

500
1,850
1,536
868
4,754

5,143
14,666

5,357
14,937

4,503

4,587

2,658

3,681

2,644
444
1,677
11,926

1,944
444
1,677
12,333

1,765
975
2,740

1,434
1,170
2,604

14,666

14,937

Colgate-Palmolive Company
Consolidated Cash Flows
###
Operating Activities
Net income including noncontrolling interests
Adjustments to reconcile net income
Depreciation and amortization
Receivables
Inventories
Accounts payable and other accruals
Other non-current assets and liabilities
Net cash provided by operations

Dec-08

Dec-09

Dec-10
$

Investing Activities
Capital expenditures
Net cash used in investing activities
Cash Flow for Financing Activities
Financing Activities
Principal payments on debt
Proceeds from issuance of debt
Revolver
Dividends paid
Purchases of treasury shares
Proceeds from exercise of stock options and excess tax benefits
Net cash used in financing activities

2,313

Dec-11
$

Dec-16

Dec-17

Dec-18

2,628 $

2,679 $

2,740 $

2,793

376
40
(10)
(65)
135
3,211

421
(130)
(130)
199
54
2,896

425
19
(21)
(5)
30
3,196

439
(37)
(97)
24
13
3,204

445
(69)
10
(19)
18
2,962

479
(35)
(29)
75
(11)
3,107

515
(36)
(30)
70
(11)
3,187

550
(37)
(30)
71
(12)
3,283

587
(37)
(31)
73
(12)
3,373

(550)
(658)

(537)
(1,213)

(565)
(865)

(670)
(890)

(711)
(711)

(726)
(726)

(741)
(741)

(756)
(756)

(772)
(772)

2,553

1,683

2,331

2,314

2,251

2,382

2,446

2,526

2,601

(4,719)
5,015

(4,429)
5,843

(5,011)
5,452

(7,554)
7,976

(895)

(491)

(255)

(664)

(695)

0
(1,318)
(1,500)
1,014.3
(2,698)

940
(1,344)
(1,500)
(2,396)

680
(1,371)
(1,500)
(2,446)

1,039
(1,401)
(1,500)
(2,526)

1,023
(1,429)
(1,500)
(2,601)

(1,203)
(1,806)
353
(1,242)

(1,277)
(1,943)
478
(2,301)

(1,382)
(1,521)
339
(2,142)
(94)

(39)

(53)

(24)

388

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

600
490 $

490
878 $

878
884 $

1,123 $
70

1,007 $
58

1,280 $
77

78
884
962 $

Supplemental Cash Flow Information

$

Dec-15

2,576 $

(110)

Income taxes paid

Interest paid

Dec-14

2,410 $

Net increase (decrease) in Cash and cash equivalents

Dec-13

2,631 $

(1,142)
(2,020)
242
(2,624)

Effect of exchange rate changes on Cash and cash equivalents

Dec-12

2,554 $

1,087
118

(448)
962
514 $

(14)
514
500 $

500
500 $

500
500 $

0
500
500

Colgate-Palmolive Company
Consolidated Depreciation and Capex
Net Sales
Capital Expenditures
Capital Expenditures as % of Net Sales
Beginning Net PP&E
Capital Expenditures
(Depreciation Expense)
Ending Net PP&E

Total Depreciation Expense

Dec-07
13,790

Dec-08
15,330

Dec-09
15,327

3,015

3,119

3,516

Dec-10
15,564
550
3.5%

3,693

Dec-11
16,734
537
3.2%

3,668

Dec-12
17,085
565
3.3%

3,842

Dec-13
17,420
670
3.8%

Dec-14
17,780
711
4.0%

Dec-15
18,146
726
4.0%

Dec-16
18,521
741
4.0%

4,083

4,083.0
711.2
(416.0)
4,378.1

4,378.1
725.9
(450.5)
4,653.5

4,653.5
740.8
(485.6)
4,908.8

416.0

450.5

485.6

Dec-17
18,903
756
4.0%

Dec-18
19,294
772
4.0%

4,908.8
756.1
(521.4)
5,143.5

5,143.5
771.7
(558.0)
5,357.2

521.4

558.0

Colgate-Palmolive Company
Consolidated Amortization & Intangible
Net Sales
Additions to Intangibles
Additions to Intangibles as % of Net Sales
Beginning Net Intangibles
Additions to Intangibles
(Amortization Expense)
(Intangible Sales and write offs)
Ending Net Intangibles

Dec-07
13,790

Dec-08
15,330

Dec-09
15,327

Dec-10
15,564

Dec-11
16,734

Dec-12
17,085

Dec-13
17,420

1,496.0

Dec-14
17,780

Dec-15
18,146

Dec-16
18,521

Dec-17
18,903

1,496.0
(29.0)

1,467.0
###

1,438.0
(29.0)

1,409.0
(29.0)

1,467.0

1,438.0

1,409.0

1,380.0

Dec-18
19,294

1,380.0
(29.0)
1,351.0

Colgate-Palmolive Company
Consolidated Working Capital
Dec-09
15,327
6,319

Dec-10
15,564
6,360

Working Capital Balances

Receivables
Inventories
Other current assets
Total Non Cash Current Assets

1,626
1,209
375
3,210

1,610
1,222
408
3,240

Accounts payable
Accrued income taxes
Other accruals
Total Non-Debt Current Liabilities

1,172
387
1,679
3,238

1,165
272
1,682
3,119

Net Working Capital/ (Deficit)

(28)

121

(Increase)/ Decrease in Working Capital

429

(149)

6,331

6,373

39
70
2.4%

38
70
2.6%

68
6.1%
26.6%

67
4.3%
26.4%

(34)
(12)
(9)
111
115
258
429

16
(13)
(33)
(7)
(115)
3
(149)

Net Sales
Cost of Sales

Purchases
Ratios & Assumptions
Accounts Receivable, net (Collection period in days)
Inventory (Days outstanding)
Other Current Assets (% of Net Sales)
Accounts Payable (Days Payable)
Accrued Income Taxes (% of COGS)
Other accruals (% of COGS)
Cash Flow from Individual line items
Receivables (net of allowances of $49, $53, $52, $47 and $51 respe
Inventories
Other current assets
Accounts payable
Accrued income taxes
Other accruals
(Incease)/ Decrease in Working Capital
Check

Dec-11
16,734
7,144

Dec-12
17,085
7,153

Dec-13
17,420
7,219

Dec-14
17,780
7,379

Dec-15
18,146
7,531

Dec-16
18,521
7,686

Dec-17
18,903
7,845

1,675
1,327
522
3,524

1,668
1,365
639
3,672

1,636
1,425
799
3,860

1,705
1,415
800
3,920

1,740
1,444
817
4,001

1,776
1,474
833
4,084

1,813
1,505
851
4,168

1,244
392
1,700
3,336

1,290
254
1,888
3,432

1,343
239
1,980
3,562

1,312
258
1,992
3,563

1,346
264
2,033
3,643

1,374
269
2,075
3,718

1,402
275
2,118
3,795

188

240

298

357

358

365

373

(67)

(52)

(58)

(59)

(0)

(7)

(8)

7,249

7,191

7,279

7,369

7,560

7,716

7,875

37
68
3.1%

36
70
3.7%

34
72
4.6%

35
70
4.5%

35
70
4.5%

35
70
4.5%

35
70
4.5%

63
5.5%
23.8%

65
3.6%
26.4%

67
3.3%
27.4%

65
3.5%
27.0%

65
3.5%
27.0%

65
3.5%
27.0%

65
3.5%
27.0%

(65)
(105)
(114)
79
120
18
(67)

7
(38)
(117)
46
(138)
188
(52)

32
(60)
(160)
53
(15)
92
(58)

(69)
10
(1)
(31)
19
12
(59)

(35)
(29)
(17)
34
5
41
(0)

(36)
(30)
(17)
28
5
42
(7)

(37)
(30)
(17)
28
6
43
(8)

Dec-18
19,294
8,007

1,850
1,536
868
4,254
1,431
280
2,162
3,874
380
(8)
8,038

35
70
4.5%
65
3.5%
27.0%

(37)
(31)
(18)
29
6
44
(8)

Number of

365

Colgate-Palmolive Company
Other Long Term Asset Liability Schedule
Dec-10

Dec-11

Assets
Deferred income taxes
Other assets

84.0
472.0

115.0
541.0

Liability
Deferred income taxes
Other liabilities

108.0
1,704.0

252.0
1,785.0

Dec-12

Dec-13

Dec-14

Dec-15

Dec-16

Dec-17

Dec-18

92.0
905.0

77.0
924.0

77.0
924.0

77.0
924.0

77.0
924.0

77.0
924.0

77.0
924.0

293.0
2,049.0

444.0
1,677.0

444.0
1,677.0

444.0
1,677.0

444.0
1,677.0

444.0
1,677.0

444.0
1,677.0

Colgate-Palmolive Company
Consolidated Shareholder's Equity
Beginning Equity Balance
Net Income
Issuance/ (Repurchase) of Equity
Dividends Paid
Option Proceeds
Ending Equity Balance
Share Repurchase Assumptions
Current Year EPS
Assumed Current Year EPS Multiple
Implied Share Price
Shares Repurchased - millions
Amount Repurchased ( $ outgo)
New Shares from Exercised Options
New Shares from Exercised Options - millions
Average Strike Price
Option Proceeds
Restricted Stock Units (RSUs)
Dividend Assumptions
Total Dividends Paid
Net Income
Dividend Payout Ratio

Dec-10

Dec-11

2,675

2,375

2.16

2,020

2.47
17.1x
42
42.642
1,806

242

11.5
30.6
353
1.46

1,203.0
2,431
49.5%

Shares and ESOPs

Balance, January 1, 2011

Common stock acquired
Shares issued for stock options
Shares issued for restricted stock units and other
Balance, December 31, 2011
Common stock acquired
Shares issued for stock options
Shares issued for restricted stock units and other
Balance, December 31, 2012
Common stock acquired
Shares issued for stock options
Shares issued for restricted stock units and other
Balance, December 31, 2013

Dec-12

Dec-13

2,305

Dec-14
2,305
2,396
(1,500)
(1,318)
1,014
2,897

Dec-15
2,897
2,444
(1,500)
(1,344)
2,497

Dec-16
2,497
2,492
(1,500)
(1,371)
2,119

Dec-17
2,119
2,548
(1,500)
(1,401)
1,765

Dec-18
1,765
2,598
(1,500)
(1,429)
1,434

2,189

2.57
19.5x
50
38.731
1,943

2.38
25.0x
59
25.573
1,521

2.61
19.0x
50
30.283
1,500

2.71
19.0x
52
29.111
###

2.85
19.0x
54
27.654
1,500

3.01
19.0x
57
26.212
1,500

3.17
19.0x
60
24.932
1,500

12.2
39.1
478

7.9
43.0
339

24.2
42.0
1,014.3

2.21

1.91

2.06

2.06

2.00

2.00

2.00

1,277.0
2,472
51.7%

1,382.0
2,241
61.7%

1,318
2,396
55.0%

1,344
2,444
55.0%

1,371
2,492
55.0%

1,401
2,548
55.0%

1,429
2,598
55.0%

Colgate-Palmolive Company
Consolidated Shares Outstanding
Dec-10
Beginning Balance - Basic (actual)
Shares Issued (actual realization of options)
Shares Repurchased
Ending Balance - Basic (actual)
Basic Weighted Average Shares
Effects of Options & Restricted Stock Units
Diluted Weighted Average Shares

989.7

Dec-11
989.7
13.0
(42.6)
960.0
976.7
7.4
984.1

Dec-12
960.0
14.4
(38.7)
935.7

Dec-13
935.7
9.8
(25.6)
919.9

Dec-14
919.9
24.2
(30.3)
913.8

Dec-15
913.8

Dec-16
884.7

Dec-17
857.0

Dec-18
830.8

(29.1)
884.7

(27.7)
857.0

(26.2)
830.8

(24.9)
805.9

952.1
8.1
960.2

930.8
9.1
939.9

916.9
2.1
918.9

899.3
2.1
901.3

870.9
2.0
872.9

843.9
2.0
845.9

818.4
2.0
820.4

Colgate-Palmolive Company
Debt Schedule
Dec-10
Cash Flow Available for Financing Activities
Proceeds from/ (Repurchase of) Equity
Dividends
Option Proceeds
+ Beginning Cash Balance
- Minimum Cash Balance
Cash Available for Debt Repayment
Long Term Debt Issuance
Long Term Debt (Repayments)
Cash Available for Revolving Credit Facility
Revolving Credit Facility
Beginning Balance
Discretionary (Paydown)/ Borrowings
Ending Balance
Long Term Debt
Beginning Balance
Issuance
(Repayment/ Amortization)
Ending Balance
Long Term Debt
Current Portion of Long Term Debt

Revolving Credit Facility

Average Balance
Interest Rate
Interest Expense

Long Term Debt

Average Balance
Interest Rate
Interest Expense

Total Interest Expense

Dec-11

Dec-12

Cash Balances

Average Balance
Interest Rate
Interest Income

Dec-13

5,644.0

Dec-14
2,250.5
(1,500.0)
(1,317.6)
1,014.3
962.0
(500.0)
909.2
(895.0)
14.2

Dec-15
2,381.5
(1,500.0)
(1,344.4)
514.2
(500.0)
(448.6)
(491.0)
(939.6)

Dec-16
2,445.9
(1,500.0)
(1,370.6)
500.0
(500.0)
(424.7)
(255.0)
(679.7)

Dec-17
2,526.5
(1,500.0)
(1,401.3)
500.0
(500.0)
(374.9)
(664.0)
(1,038.9)

Dec-18
2,600.9
(1,500.0)
(1,428.8)
500.0
(500.0)
(327.9)
(695.0)
(1,022.9)

939.6
939.6

939.6
679.7
1,619.3

1,619.3
1,038.9
2,658.2

2,658.2
1,022.9
3,681.1

5,644.0

4,749.0

4,258.0

4,003.0

3,339.0

(895.0)
4,749.0

(491.0)
4,258.0

(255.0)
4,003.0

(664.0)
3,339.0

(695.0)
2,644.0

4,258.0
491.0

4,003.0
255.0

3,339.0
664.0

2,644.0
695.0

1,944.0
700.0

1.5%
-

469.8
1.5%
7.0

1,279.5
1.5%
19.2

2,138.8
1.5%
32.1

3,169.7
1.5%
47.5

5,196.5
1.7%
90.0

4,503.5
1.8%
81.0

4,130.5
1.6%
66.0

3,671.0
1.7%
62.0

2,991.5
1.5%
44.0

90.00

88.05

85.19

94.08

91.54

(700.0)

738.1
1.00%
7.38

507.1
1.00%
5.07

500.0
1.00%
5.00

500.0
1.00%
5.00

500.0
1.00%
5.00