Core Viewpoint - Several countries in Latin America, including Brazil, Argentina, Colombia, and Mexico, have banned the sale of Colgate's toothpaste due to potential adverse reactions such as gum swelling [2] Group 1: Product and Regulatory Issues - Colgate's product "Colgate Total Advanced Protection Clean Mint" is not sold in mainland China, and the company is withdrawing it from retail stores in Latin America but will not initiate a consumer recall [2] - The Brazilian National Health Surveillance Agency indicated that consumer discomfort may be related to stannous fluoride in the toothpaste, which has antibacterial and anti-cavity properties [2][3] - Stannous fluoride is a type of fluoride that can be used in toothpaste, but regulations require it to be added in limited quantities, with a maximum concentration of 0.15% [3] Group 2: Financial Performance - Colgate-Palmolive's net sales for the first half of the year decreased by 1.02% to $10.021 billion, while net profit increased by 1.34% to $1.433 billion [3] - Latin America is the largest revenue market for Colgate, accounting for 23% of revenue and 33% of operating profit in the first half of 2025 [3]

Core Viewpoint - Colgate's toothpaste has been banned in Mexico and several Latin American countries due to reports of adverse reactions such as gum swelling and oral pain [1][2][3][4][5]. Group 1: Product Recall and Consumer Safety - The Mexican Federal Health Risk Protection Committee announced a recall of "Colgate Total Prevención Activa Clean Mint" toothpaste, advising consumers to stop using it due to potential adverse effects [2]. - Reports indicate that the toothpaste may cause symptoms including oral irritation, gum swelling, and allergic reactions [2][3]. - Colgate-Palmolive has issued an apology and stated that all its products comply with local health regulations, emphasizing the safety and quality of its products [1][5]. Group 2: Regional Impact and Regulatory Actions - The toothpaste has been banned in Brazil, Argentina, and Colombia, with Brazil's health authority citing a higher incidence of adverse reactions linked to the product's formulation [3][4]. - In Argentina, 19 adverse event reports were received, while Brazil reported 11,441 cases since the product's launch in July 2024 [4]. - Colombia's health authority identified harmful fragrances in the toothpaste, leading to its ban [5]. Group 3: Financial Performance and Market Position - Colgate-Palmolive reported a 1.02% decline in net sales to $10.021 billion in the first half of 2025, with Latin America being the largest revenue market, accounting for 23% of total revenue [7]. - The company's gross margin slightly increased to 60.4%, while operating profit from Latin America represented 33% of the total [7]. - The Asia-Pacific region saw a 2.13% decline in revenue, indicating challenges in maintaining market share [7].

Core Viewpoint - Ahold NV (ADRNY) is currently viewed as a more attractive investment compared to Colgate-Palmolive (CL) based on various valuation metrics and analyst outlooks [1][3]. Valuation Metrics - ADRNY has a forward P/E ratio of 13.52, significantly lower than CL's forward P/E of 23.05, indicating that ADRNY may be undervalued [5]. - The PEG ratio for ADRNY is 1.67, while CL's PEG ratio is much higher at 4.41, suggesting that ADRNY offers better value relative to its expected earnings growth [5]. - ADRNY's P/B ratio stands at 2.29, compared to CL's P/B ratio of 65.08, further highlighting ADRNY's relative undervaluation [6]. Analyst Ratings - ADRNY holds a Zacks Rank of 1 (Strong Buy), indicating a positive earnings estimate revision trend, while CL has a Zacks Rank of 3 (Hold) [3][6]. - The Value grade for ADRNY is A, whereas CL has a Value grade of C, reinforcing the notion that ADRNY is the better option for value investors [6].

Core Insights - Colgate-Palmolive Company reported better-than-expected second-quarter earnings, with adjusted earnings per share of 92 cents, surpassing the analyst consensus estimate of 89 cents [1] - Quarterly sales reached $5.11 billion, reflecting a 1% year-over-year increase, exceeding the expected $5.03 billion [1] Sales and Growth Projections - The company anticipates net sales to increase in the low single digits, accounting for a flat to low-single-digit negative impact from foreign exchange [2] - Organic sales growth is projected to be at the low end of the 2% to 4% range, influenced by the planned exit from private label pet sales by 2025 [2] Profitability and Margins - On a non-GAAP (Base Business) basis, gross profit margin and advertising are expected to remain roughly flat as a percentage of net sales, with earnings per share anticipated to grow in the low single digits [3] Management Commentary - Noel Wallace, Chairman and CEO, expressed satisfaction with the company's performance, highlighting growth in net sales, organic sales, and earnings per share despite challenging market conditions [4] Stock Performance and Analyst Ratings - Following the earnings announcement, Colgate-Palmolive shares fell 0.3% to $83.27 [4] - Analysts adjusted their price targets, with Wells Fargo lowering it from $88 to $83, Morgan Stanley from $104 to $96, and JP Morgan from $99 to $95, while maintaining their respective ratings [10]

Core Insights - Colgate-Palmolive Company (CL) reported strong second-quarter 2025 results, with both revenue and earnings exceeding expectations and showing year-over-year improvement [1][2][8] - The company is focusing on enhancing its capabilities in digital, data, and analytics to strengthen competitive advantages and profitability [1] Financial Performance - On a non-GAAP basis, earnings per share (EPS) were $0.92, a 1% increase from the previous year, surpassing the Zacks Consensus Estimate of $0.89 [2][8] - Net sales reached $5.11 billion, a 1% increase from the prior year, exceeding the Zacks Consensus Estimate of $5.05 billion [2][8] - Organic sales grew by 1.8%, despite a 0.6% negative impact from reduced private-label pet volume and a 1% adverse effect from foreign exchange [2][8] Segment Analysis - North America's net sales, accounting for 20% of total sales, decreased by 1% year over year, attributed to a 0.5% drop in pricing and a 0.4% decline in volume [10] - Latin America's net sales, representing 24% of total sales, fell by 4.8% year over year, with an 8.2% negative currency impact overshadowing a 3% pricing gain [10] - Europe's net sales increased by 7.8% year over year, driven by a 2.2% rise in pricing and a 5.7% positive currency effect [11] - The Asia Pacific segment's net sales rose by 0.8% year over year, with a 1.6% drop in volume offset by a 1.6% increase in pricing [11] - Africa/Eurasia's net sales improved by 8% year over year, supported by a 4.3% growth in volume and a 3.4% increase in pricing [12] - Hill's Pet Nutrition's net sales increased by 3.8% year over year, benefiting from a 2.9% rise in pricing [12] Profitability Metrics - The base business gross profit was $3.07 billion, a slight decrease of 0.2% from the previous year, with a gross profit margin of 60.1%, down 70 basis points [6][9] - Adjusted operating profit was $1.09 billion, a decline of 3% year over year, with an adjusted operating profit margin of 21.3%, down 80 basis points [9] Cash Flow and Shareholder Returns - Colgate ended the second quarter with cash and cash equivalents of $1.22 billion and total debt of $8.8 billion [13] - The company generated $1.5 billion in net cash from operating activities for the first half of 2025 and returned $880 million to shareholders through dividends [13] Future Outlook - Colgate anticipates continued uncertainty and volatility in global markets, projecting organic sales growth at the lower end of the previous 2-4% guidance range [14][16] - The company expects net sales to grow in low single digits, with a flat to low-single-digit adverse impact from foreign exchange [15]

Employment Situation Report - Nonfarm payrolls increased by +73K in July, significantly below the expected +100K [1] - The unemployment rate rose by 10 basis points to 4.2%, still considered historically low [1] - Major downward revisions were made to previous months, with June revised from +147K to +14K and May from +144K to +19K, indicating a weaker labor market [2] Wage and Labor Participation - Hourly wages increased by +0.3% month-over-month, with a year-over-year increase of +3.9% [3] - Labor force participation fell to 62.2%, indicating a less robust labor market [3] - The U-6 unemployment rate, which includes underemployment, decreased slightly to 7.9% [3] Sector Performance - The healthcare sector added +55K jobs, making it the strongest industry for job growth [5] - Manufacturing experienced a decline for the third consecutive month, losing -37K jobs [5] - The federal government reduced its workforce by -12K jobs, totaling -84K job losses since the current administration took office [5] Market Reactions and Federal Reserve Implications - Following the jobs report, the probability of a Federal Reserve interest rate cut increased from +34% to +87% [7] - Bond yields fell significantly, with the 10-year bond yield dropping to +4.27% [8] - Major stock indexes declined in pre-market trading, with the Dow down -330 points, S&P 500 down -53, and Nasdaq down -220 [8] Earnings Reports - ExxonMobil reported earnings of $1.64 per share, exceeding expectations by +10%, but revenues fell -1.59% short [9] - Colgate-Palmolive beat earnings expectations by 3 cents, reporting 92 cents per share, and also exceeded revenue estimates by +1.17% [10] - Regeneron had a notable earnings beat of +60.5%, reporting $12.89 per share [10]

Financial Data and Key Metrics Changes - In Q2 2025, the company achieved growth in net sales, organic sales, and earnings per share despite facing significant raw material pressure and negative foreign exchange impacts [6][10] - Organic sales growth accelerated by 60 basis points to 2.4% in Q2, driven by improvements in North America and Africa-Eurasia [7][10] - Gross margin was down year-over-year due to higher raw material inflation and tariffs, with guidance for gross margin remaining roughly flat for 2025 [44][46] Business Line Data and Key Metrics Changes - The North America business showed improvement in volume, with good plans in place for the second half of the year [21][22] - The Hill's pet food segment delivered mid-single-digit organic growth, with a strong performance in therapeutic products [50][52] - The total relaunch of core products was strong in Latin America, with good incremental share and growth [27][30] Market Data and Key Metrics Changes - The company noted a cautious consumer environment in North America, with expectations for categories to normalize over time [20][21] - In Latin America, there was a slight deceleration in categories in Brazil, while Mexico showed some improvement [29][30] - The Asia market experienced softness, particularly in urban markets in India and challenges in the Holly and Hazel business in China [85][88] Company Strategy and Development Direction - The company remains committed to its long-term growth strategy, focusing on household penetration and brand health as key drivers of organic sales growth [11][12] - A productivity initiative was announced, aiming for $200 to $300 million in charges over three years to optimize supply chain and enhance capabilities [18][95] - The company is prioritizing innovation and digital transformation as part of its 2030 strategic plan [12][16] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second half of 2025, expecting modest improvements in category growth and consumer behavior [93][94] - The company is focused on balancing top-line growth with margin restoration, particularly in North America [106][108] - Management acknowledged the challenges posed by inflation and raw material costs but remains confident in the strategies in place to drive growth [60][61] Other Important Information - The company closed the acquisition of Prime one hundred, a leading fresh pet food brand in Australia [7] - The company is leveraging AI and data analytics to optimize its portfolio and promotional spending [10][12] Q&A Session Summary Question: Details on the restructuring program and its timing - Management indicated that the restructuring program is designed to accelerate growth initiatives and is a natural evolution towards the 2030 strategy [15][16] Question: Insights on U.S. category growth and consumer behavior - Management noted a cautious consumer in North America, with expectations for categories to normalize over time despite recent setbacks [20][21] Question: Update on Latin America performance and potential pivots - Management reported strong initial results from the total relaunch in Latin America but acknowledged some cautiousness in Brazil [29][30] Question: Gross margin outlook and raw material cost drivers - Management highlighted that gross margin was impacted by raw material inflation, particularly in palm oil and fats, but expects some easing in the back half of the year [46][47] Question: Performance of Hill's pet food segment - Management reported strong growth in the Hill's segment, particularly in therapeutic products, despite challenges from private label competition [50][52] Question: Confidence in EPS guidance amidst market uncertainties - Management expressed confidence in low single-digit EPS growth expectations, citing effective strategies and investments planned for the second half of the year [58][60] Question: Evolution of the Asia market and specific challenges - Management noted softness in urban markets in India and challenges in the Holly and Hazel business in China, but remains optimistic about future improvements [85][88]

Financial Data and Key Metrics Changes - In Q2 2025, the company achieved growth in net sales, organic sales, and earnings per share despite facing significant raw material pressure and negative foreign exchange [5][6] - Organic sales growth accelerated by 60 basis points to 2.4% in Q2, driven by improvements in North America and AfricaEurasia [5][6] - Gross margin was down year over year due to greater than anticipated raw material inflation and tariffs, with guidance for gross margin remaining roughly flat for 2025 [41][42] Business Line Data and Key Metrics Changes - The company launched significant innovations across categories and closed the acquisition of Prime one hundred, a leading fresh pet food brand in Australia [5][6] - Hill's brand saw mid-single-digit organic growth across almost every hub, with a balanced contribution from volume and price [48][49] - The total relaunch of core brands was strong in Latin America, with good incremental share and growth [26][29] Market Data and Key Metrics Changes - North America showed improvement in volume, although the overall consumer sentiment remains cautious [20][21] - Latin America experienced a slight deceleration in categories, particularly in Brazil, while Mexico showed some improvement [28][29] - The Asia market faced softness, particularly in urban markets in India and challenges in the Holly and Hazel business in China [81][84] Company Strategy and Development Direction - The company remains committed to its long-term growth strategy, focusing on household penetration and brand health as key drivers of organic sales growth [9][10] - A productivity initiative was announced, aiming for $200 to $300 million in charges over three years, focusing on optimizing the supply chain and enhancing innovation capabilities [18][92] - The company is prioritizing innovation, particularly in premium products, and leveraging AI for revenue growth management [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second half of 2025, expecting modest improvements in category growth and maintaining a strong innovation pipeline [90][91] - The company acknowledged the challenges posed by high raw material costs and tariffs but remains focused on driving value through innovation and pricing strategies [41][62] - Management highlighted the importance of balancing top-line growth with margin restoration, particularly in North America [106] Other Important Information - The company is actively leveraging price pack architecture to appeal to consumers seeking value, with a focus on both premium and entry-level products [7][100] - The company has stopped producing private label products as of July, which will impact the P&L in the second half of the year [52][78] Q&A Session Summary Question: Details on the restructuring program and U.S. category growth - Management discussed the productivity initiatives aimed at accelerating growth and optimizing resources, while acknowledging a cautious consumer environment in North America [14][20] Question: Assessment of the total relaunch and Latin America performance - The total relaunch has been strong in Latin America, with good growth and share gains, although some caution remains in Brazil [26][28] Question: Gross margin outlook and raw material cost drivers - Gross margin was impacted by raw material inflation, particularly in palm oil and fats, with guidance remaining flat for 2025 [41][42] Question: Performance of Hill's brand and private label impact - Hill's brand showed strong growth, particularly in therapeutic products, while the exit from private label production will affect future comparisons [49][78] Question: Sales run rate expectations and restructuring details - Management expects a modest improvement in sales run rate in the second half, driven by advertising and innovation, with restructuring focusing on optimizing resources [90][92] Question: Innovation strategy within the 2030 plan - The company plans to enhance innovation capabilities, focusing on breakthrough products and improving agility in bringing new products to market [65][68] Question: Category trends and market outlook - Management anticipates a modest improvement in category growth across markets, with some categories expected to recover more slowly than others [110]

Core Insights - Colgate-Palmolive reported quarterly earnings of $0.92 per share, exceeding the Zacks Consensus Estimate of $0.89 per share, and showing a slight increase from $0.91 per share a year ago, resulting in an earnings surprise of +3.37% [1] - The company achieved revenues of $5.11 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.17% and showing a year-over-year increase from $5.06 billion [2] - Colgate-Palmolive has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.91, with projected revenues of $5.18 billion, while the estimate for the current fiscal year is $3.67 on revenues of $20.32 billion [7] - The company's earnings outlook is crucial for investors, as it reflects current consensus expectations and any recent changes in those expectations [4] Stock Performance - Colgate-Palmolive shares have underperformed the market, losing about 7.8% since the beginning of the year, while the S&P 500 has gained 7.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Industry Context - The Consumer Products - Staples industry, to which Colgate-Palmolive belongs, is currently ranked in the top 40% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements for Colgate-Palmolive Company, including income, balance sheet, and cash flow statements [Condensed Consolidated Statements of Income](index=2&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Details net sales and income for Q2 and H1 2025, showing slight sales growth in Q2 and income growth across both periods Condensed Consolidated Statements of Income (Unaudited) | (In Millions Except Per Share) | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :---: | :---: | :---: | :---: | | | **2025** | **2024** | **2025** | **2024** | | **Net sales** | **$5,110** | **$5,058** | **$10,021** | **$10,124** | | Cost of sales | 2,041 | 1,992 | 3,965 | 4,019 | | **Gross profit** | **3,069** | **3,066** | **6,056** | **6,105** | | Selling, general and administrative expenses | 1,963 | 1,939 | 3,861 | 3,855 | | Operating profit | 1,080 | 1,092 | 2,156 | 2,139 | | Income before income taxes | 1,007 | 1,010 | 1,959 | 1,977 | | **Net income attributable to Colgate-Palmolive Company** | **$743** | **$731** | **$1,433** | **$1,414** | | **Earnings per common share, basic** | **$0.92** | **$0.89** | **$1.77** | **$1.72** | | **Earnings per common share, diluted** | **$0.91** | **$0.89** | **$1.76** | **$1.71** | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's financial position as of June 30, 2025, showing increases in total assets, liabilities, and equity Condensed Consolidated Balance Sheets (Unaudited) | (In Millions) | June 30, 2025 | December 31, 2024 | | :--- | :---: | :---: | | **Total current assets** | $5,996 | $5,317 | | Property, plant and equipment, net | 4,529 | 4,422 | | Goodwill | 3,696 | 3,272 | | **Total assets** | **$17,470** | **$16,046** | | **Total current liabilities** | $6,775 | $5,759 | | Long-term debt | 7,144 | 7,289 | | **Total liabilities** | **$16,418** | **$15,502** | | **Total equity** | **$1,052** | **$544** | | **Total liabilities and equity** | **$17,470** | **$16,046** | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flows for H1 2025, noting decreased operating cash, increased investing cash use, and reduced financing cash use Condensed Consolidated Statements of Cash Flows (Unaudited) | (In Millions) | Six Months Ended June 30, | | :--- | :---: | :---: | | | **2025** | **2024** | | **Net cash provided by (used in) operations** | **$1,484** | **$1,671** | | **Net cash provided by (used in) investing activities** | **($560)** | **($304)** | | **Net cash provided by (used in) financing activities** | **($867)** | **($1,206)** | | Effect of exchange rate changes on Cash and cash equivalents | $62 | ($17) | | **Net increase (decrease) in Cash and cash equivalents** | **$119** | **$144** | | Cash and cash equivalents at beginning of the period | $1,096 | $966 | | **Cash and cash equivalents at end of the period** | **$1,215** | **$1,110** | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed information on accounting policies, acquisitions, restructuring, legal contingencies, and tax matters, including the Prime100 acquisition - On April 30, 2025, the Company acquired Care TopCo Pty Ltd, owner of the Prime100 pet food business, for approximately **$301 million in cash**. This acquisition provides an entry into the fresh pet food category in Australia for the Hill's Pet Nutrition segment[40](index=40&type=chunk) - On July 31, 2025, the Board approved a new three-year Productivity Program expected to incur pre-tax charges of **$200 to $300 million**. The program aims to align organizational structure, optimize the supply chain, and reduce overhead costs[44](index=44&type=chunk) - The company is involved in several legal contingencies, including Brazilian tax matters (approx. **$108 million** and **$26 million** at issue), Talcum powder litigation (**384 cases** pending), and an ERISA matter which has been settled in principle[62](index=62&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk)[74](index=74&type=chunk) - The effective income tax rate for Q2 2025 was **23.2%**, down from **24.1%** in Q2 2024. The company is evaluating the impact of the new "One Big Beautiful Bill Act" (OBBBA) tax legislation[101](index=101&type=chunk)[102](index=102&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 2025 performance, covering sales, profitability, and cash flow across product segments and geographies [Executive Overview and Outlook](index=31&type=section&id=Executive%20Overview%20and%20Outlook) Outlines the company's two product segments, anticipates continued macroeconomic challenges, and details strategies including a new Productivity Program - The company operates in two product segments: Oral, Personal and Home Care; and Pet Nutrition. Approximately **45% of Net Sales** come from emerging markets[109](index=109&type=chunk)[110](index=110&type=chunk) - A new three-year "Productivity Program" was approved on July 31, 2025, with projected pre-tax charges of **$200 to $300 million** to drive future growth and support the 2030 strategy[120](index=120&type=chunk) - The company expects continued challenges from inflation, high interest rates, and foreign currency volatility. Tariffs are estimated to add approximately **$75 million** in incremental gross costs in 2025[124](index=124&type=chunk)[125](index=125&type=chunk) [Results of Operations - Three Months Ended June 30, 2025](index=37&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20June%2030%2C%202025) Analyzes Q2 2025 performance, highlighting 1.0% net sales growth, a 70 basis point decrease in non-GAAP gross profit margin, and a 1% increase in non-GAAP diluted EPS Q2 2025 Net Sales Growth vs. Q2 2024 | Segment | Net Sales Growth (GAAP) | Organic Sales Growth (Non-GAAP) | | :--- | :---: | :---: | | Total Oral, Personal and Home Care | 0.2% | 1.7% | | Pet Nutrition | 3.8% | 2.0% | | **Total Company** | **1.0%** | **1.8%** | Q2 2025 vs. Q2 2024 Profitability (Non-GAAP) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :---: | :---: | :---: | | Gross Profit Margin | 60.1% | 60.8% | (70) bps | | Operating Profit | $1,089M | $1,118M | (3)% | | Operating Profit Margin | 21.3% | 22.1% | (80) bps | | Diluted EPS | $0.92 | $0.91 | +1% | - The decrease in non-GAAP Gross Profit Margin was primarily driven by significantly higher raw and packaging material costs (**420 bps**), partially offset by cost savings (**250 bps**) and higher pricing (**80 bps**)[141](index=141&type=chunk) [Results of Operations - Six Months Ended June 30, 2025](index=47&type=section&id=Results%20of%20Operations%20-%20Six%20Months%20Ended%20June%2030%2C%202025) Reviews H1 2025 performance, noting a 1.0% decrease in net sales, flat non-GAAP gross profit margin, and a 3% increase in non-GAAP diluted EPS YTD 2025 Net Sales Growth vs. YTD 2024 | Segment | Net Sales Growth (GAAP) | Organic Sales Growth (Non-GAAP) | | :--- | :---: | :---: | | Total Oral, Personal and Home Care | (2.0)% | 1.3% | | Pet Nutrition | 2.6% | 2.5% | | **Total Company** | **(1.0)%** | **1.6%** | YTD 2025 vs. YTD 2024 Profitability (Non-GAAP) | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :---: | :---: | :---: | | Gross Profit Margin | 60.4% | 60.4% | 0 bps | | Operating Profit | $2,181M | $2,202M | (1)% | | Operating Profit Margin | 21.8% | 21.8% | 0 bps | | Diluted EPS | $1.83 | $1.78 | +3% | - Non-GAAP Gross Profit Margin was flat year-over-year, as significantly higher raw and packaging material costs (**340 bps**) were offset by cost savings (**230 bps**), higher pricing (**70 bps**), and favorable mix (**30 bps**)[186](index=186&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) Examines liquidity and capital, noting an 11% decrease in operating cash flow, increased total debt, and a higher quarterly dividend - Net cash provided by operations decreased **11%** to **$1,484 million** in the first six months of 2025, compared to **$1,671 million** in the same period of 2024[225](index=225&type=chunk) - In April 2025, the Company issued **$500 million** of five-year Senior Notes at a fixed coupon rate of **4.20%**[230](index=230&type=chunk) - The quarterly common stock dividend was increased to **$0.52 per share** from **$0.50 per share**, effective in the second quarter of 2025[233](index=233&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Reports no material changes in market risk disclosures concerning foreign currency, interest rate, commodity price, and credit exposures - There have been no material changes in market risk disclosures since the last Annual Report on Form 10-K[241](index=241&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with IT system upgrades not materially impacting internal controls - The CEO and CFO concluded that the Company's disclosure controls and procedures are effective as of June 30, 2025[243](index=243&type=chunk) - The company is upgrading its enterprise IT system and transitioning to the cloud, but this is not expected to materially affect internal control over financial reporting[244](index=244&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=64&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 10 of the Condensed Consolidated Financial Statements for detailed information on legal matters - For information on legal proceedings, the report refers to Note 10, Contingencies to the Condensed Consolidated Financial Statements[248](index=248&type=chunk) [Item 1A. Risk Factors](index=64&type=section&id=Item%201A.%20Risk%20Factors) States no material changes to risk factors previously disclosed in the 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K[249](index=249&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=65&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details the new $5 billion share repurchase program authorized in March 2025 and Q2 2025 repurchase activity - A new **$5 billion** share repurchase program (the "2025 Program") was authorized on March 20, 2025[251](index=251&type=chunk) Share Repurchase Activity for Q2 2025 | Month | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining (in millions) | | :--- | :---: | :---: | :---: | | April 2025 | 621,081 | $92.49 | $4,917 | | May 2025 | 722,695 | $90.45 | $4,852 | | June 2025 | 1,216,973 | $89.83 | $4,744 | | **Total Q2** | **2,560,749** | **$90.65** | **$4,744** | [Item 5. Other Information](index=66&type=section&id=Item%205.%20Other%20Information) Reports the Chief Legal Officer's Rule 10b5-1 trading plan for up to 6,000 shares, with no other similar arrangements by directors or officers - The Chief Legal Officer and Secretary, Jennifer M. Daniels, entered into a Rule 10b5-1 trading plan on May 1, 2025, for the sale of up to **6,000 shares**[256](index=256&type=chunk)