Name: Colgate-Palmolive Co. (NYSE:CL) | Cash Flow Statement
Creator: Stock Analysis on Net

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Colgate-Palmolive Co., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net income including noncontrolling interests	1,967)	2,338)	2,860)	2,527)	2,558)
Depreciation and amortization	545)	556)	539)	519)	511)
Restructuring and termination benefits, net of cash	49)	(21)	(71)	18)	(7)
Stock-based compensation expense	125)	135)	107)	100)	109)
Gain on the sale of land	(47)	—)	—)	—)	—)
Goodwill and intangible assets impairment charges	721)	571)	—)	—)	—)
Loss on early extinguishment of debt	—)	75)	23)	—)	—)
Charge for U.S. tax reform	—)	—)	—)	—)	80)
Deferred income taxes	(78)	(132)	(120)	17)	27)
Voluntary benefit plan contributions	—)	—)	—)	(113)	(67)
Receivables	(227)	(84)	138)	19)	(79)
Inventories	(333)	(72)	(251)	(77)	(58)
Accounts payable and other accruals	(115)	14)	520)	36)	18)
Other non-current assets and liabilities	(51)	(55)	(26)	87)	(36)
Cash effects of changes in assets and liabilities	(726)	(197)	381)	65)	(155)
Adjustments to reconcile net income including noncontrolling interests to net cash provided by operations	589)	987)	859)	606)	498)
Net cash provided by operations	2,556)	3,325)	3,719)	3,133)	3,056)
Capital expenditures	(696)	(567)	(410)	(335)	(436)
Purchases of marketable securities and investments	(470)	(141)	(143)	(184)	(169)
Proceeds from sale of marketable securities and investments	322)	141)	124)	131)	156)
Payment for acquisitions, net of cash acquired	(809)	—)	(353)	(1,711)	(728)
Proceeds from the sale of land	47)	—)	—)	—)	—)
Other investing activities	5)	(25)	3)	—)	7)
Net cash used in investing activities	(1,601)	(592)	(779)	(2,099)	(1,170)
Short-term borrowing (repayment) less than 90 days, net	540)	(171)	488)	296)	546)
Principal payments on debt	(406)	(703)	(1,085)	(1,441)	(725)
Proceeds from issuance of debt	1,513)	699)	—)	2,578)	—)
Dividends paid	(1,691)	(1,679)	(1,654)	(1,614)	(1,591)
Purchases of treasury shares	(1,308)	(1,320)	(1,476)	(1,202)	(1,238)
Proceeds from exercise of stock options	418)	424)	874)	498)	329)
Purchases of non-controlling interests in subsidiaries	—)	—)	(99)	—)	—)
Other financing activities	(18)	(24)	33)	15)	—)
Net cash used in financing activities	(952)	(2,774)	(2,919)	(870)	(2,679)
Effect of exchange rate changes on Cash and cash equivalents	(60)	(15)	(16)	(7)	(16)
Net increase (decrease) in Cash and cash equivalents	(57)	(56)	5)	157)	(809)
Cash and cash equivalents at beginning of year	832)	888)	883)	726)	1,535)
Cash and cash equivalents at end of year	775)	832)	888)	883)	726)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

The financial trajectory from 2018 to 2022 is characterized by strong operational cash generation that peaked in 2020, followed by a notable contraction in both net income and operating cash flow by the end of the period. While the company maintained a consistent ability to generate cash from its core operations, the 2022 fiscal year experienced a significant downturn in net cash provided by operations, falling to 2,556 million US dollars from a high of 3,719 million US dollars in 2020.

Operational Cash Flow and Earnings Quality: Net cash provided by operations consistently exceeded net income for most of the period, indicating a high quality of earnings. However, a downward trend in net income is evident from 2020 onwards, dropping from 2,860 million US dollars to 1,967 million US dollars in 2022. This decline was accompanied by substantial non-cash charges in the latter years, specifically goodwill and intangible assets impairment charges, which reached 721 million US dollars in 2022.
Investment Trends and Capital Expenditure: A steady increase in capital expenditures is observed starting in 2019, with annual spending rising from 335 million US dollars to 696 million US dollars by 2022. This suggests an intensifying investment in long-term productive assets. Investing activities were also marked by periodic strategic acquisitions, most notably in 2019 with a cash outflow of 1,711 million US dollars, and again in 2022 with 809 million US dollars.
Shareholder Returns and Financing Strategy: The company demonstrates a rigid commitment to shareholder distributions. Dividends paid grew incrementally every year, rising from 1,591 million US dollars in 2018 to 1,691 million US dollars in 2022. Simultaneously, the repurchase of treasury shares remained a primary use of cash, consistently averaging over 1.2 billion US dollars annually. To support these outflows and investment needs, the company utilized periodic debt issuance, such as the 2,578 million US dollars raised in 2019.
Working Capital and Liquidity Management: Significant volatility in working capital is observed toward the end of the analyzed period. In 2022, cash effects of changes in assets and liabilities resulted in a net outflow of 726 million US dollars, driven primarily by a 333 million US dollar increase in inventories and a 227 million US dollar increase in receivables. Despite these fluctuations and heavy financing outflows, the cash and cash equivalents balance remained relatively stable, ending 2022 at 775 million US dollars.

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