2017 adjusted diluted EPS forecast includes estimated $0.07 (2%) currency headwind
Ecolab Inc. (NYSE:ECL):
FOURTH QUARTER HIGHLIGHTS
:
-
Reported diluted EPS $1.24
-
Adjusted diluted EPS $1.25, +2%, and included a $0.02 (2%) currency
headwind
-
Solid Global Institutional, Global Industrial and Other segment
growth +4%, along with margin expansion, offset an anticipated Global
Energy sales decline
2017 FORECAST
:
-
2017 adjusted diluted EPS forecast of $4.70 to $4.90, +8% to 12%,
as continued solid growth in Global Institutional, Global Industrial
and Other segments, along with improving Global Energy segment
results, drive performance
|
|
|
|
|
|
|
Fourth Quarter Ended December 31
|
|
(unaudited)
|
|
Reported
Public Currency Rates
|
|
%
|
|
Adjusted *
Public Currency Rates
|
|
%
|
|
(millions, except per share)
|
|
2016
|
|
2015
|
|
Change
|
|
|
2016
|
|
|
2015
|
|
Change
|
|
Net sales
|
|
$
|
3,352.1
|
|
|
$
|
3,412.0
|
|
|
(2
|
)
|
%
|
|
$
|
3,352.1
|
|
|
$
|
3,412.0
|
|
|
(2
|
)
|
%
|
|
Operating income
|
|
|
556.9
|
|
|
|
322.8
|
|
|
73
|
|
%
|
|
|
564.8
|
|
|
|
566.7
|
|
|
0
|
|
%
|
|
Net income attributable to Ecolab
|
|
|
366.3
|
|
|
|
208.9
|
|
|
75
|
|
%
|
|
|
368.2
|
|
|
|
366.7
|
|
|
0
|
|
%
|
|
Diluted earnings per share
|
|
$
|
1.24
|
|
|
$
|
0.69
|
|
|
80
|
|
%
|
|
$
|
1.25
|
|
|
$
|
1.22
|
|
|
2
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Currency Rates *
|
|
%
|
|
Adjusted *
Fixed Currency Rates
|
|
%
|
|
|
|
2016
|
|
2015
|
|
Change
|
|
|
2016
|
|
|
2015
|
|
Change
|
|
Net sales
|
|
$
|
3,307.4
|
|
|
$
|
3,342.1
|
|
|
(1
|
)
|
%
|
|
$
|
3,307.4
|
|
|
$
|
3,342.1
|
|
|
(1
|
)
|
%
|
|
Operating income
|
|
|
548.6
|
|
|
|
311.6
|
|
|
76
|
|
%
|
|
|
556.5
|
|
|
|
555.5
|
|
|
0
|
|
%
|
* See “Non-GAAP Financial Information” section of this release for
further discussion
Continued solid Global Institutional, Global Industrial and Other
segment sales growth along with margin expansion more than offset
expected lower Global Energy segment results to deliver 2% fourth
quarter adjusted diluted earnings per share growth, which included an
unfavorable $0.02 per share (2 percentage point) impact from currency
translation.
CEO comment
“Continued solid fixed currency growth by our Institutional, Industrial
and Other segments led results and outpaced lackluster global end
markets. New business wins, new products and a focus on sales execution,
along with pricing and cost efficiencies, drove the segment gains. The
Energy segment continued to stabilize, delivering fourth quarter sales
and operating income that were sequentially the same as the third
quarter.
“We have performed well over the past two years through a very
challenging business environment, defined by slow overall global growth,
a strengthening dollar and substantial declines in the energy market.
While our results were dramatically impacted by both currency and energy
markets, our businesses have continued to execute well. We have
outperformed our markets and key global competitors as we built share
through our sales and innovation efforts, improved our margins and grew
earnings while at the same time making the critical investments that
will drive our future growth.
“We expect to deliver more Ecolab-like results in 2017. While we believe
global economic growth will remain sluggish, we expect the energy market
to stabilize around current levels and currency translation challenges
to moderate. Against this backdrop, we will once again drive
outperformance through new product and service solutions to better serve
our customers and, along with pricing and close attention to our costs,
improve our margins. Our value proposition is robust and the need for
our products and services continues to increase. We have a strong team,
excellent market positions and a commitment to win. Our opportunities
remain large and attractive and our capacity to capture them is stronger
than ever. Importantly, while we are committed to delivering improved
growth and shareholder returns in 2017, we will continue to make the
needed investments to deliver even better growth in the years ahead.”
Fourth Quarter 2016 Consolidated Results
Ecolab's fourth quarter reported and fixed currency sales decreased 2%
and 1%, respectively. Acquisition adjusted fixed currency sales declined
1% when compared to the prior year.
Fourth quarter 2016 reported operating income increased 73%, while fixed
currency reported operating income increased 76%. Both reported fourth
quarter 2016 and 2015 results include special gains and charges.
Excluding special gains and charges, fourth quarter 2016 adjusted
operating income was flat against fourth quarter 2015. Excluding special
gains and charges and at fixed currency rates, adjusted fixed currency
operating income rose slightly. Our reported operating income margin
increased 710 basis points, and our adjusted fixed currency operating
income margin increased 20 basis points. The increase in adjusted fixed
currency operating income and improvement in adjusted fixed currency
operating income margin was driven by pricing, volume growth and cost
savings initiatives in our Global Institutional, Global Industrial and
Other segments, which was partially offset by a decline in Global Energy
results.
Fourth quarter 2016 reported net income attributable to Ecolab increased
75% and reported diluted earnings per share increased 80%. Excluding
special gains and charges and discrete tax items, adjusted net income
attributable to Ecolab was flat and adjusted diluted earnings per share
increased 2% against fourth quarter 2015. Our fourth quarter 2016
adjusted diluted earnings per share include a $0.02 per share (2
percentage point) currency headwind (including the impact of the
Venezuela deconsolidation of $0.01 per share) against fourth quarter
2015.
The reported income tax rate for the fourth quarter of 2016 was 23.9%,
compared with the reported rate of 14.4% in the fourth quarter of 2015.
Excluding the tax rate impact of the special gains and charges and
discrete tax items, the adjusted tax rate was 24.7% in the fourth
quarter of 2016 compared with 24.2% for the same period last year. The
increase in our adjusted tax rate was primarily driven by the
annualization of the research and development tax credit in 2016
compared with the prior year’s full recognition in the fourth quarter.
Fourth Quarter 2016 Segment Review
We evaluate the performance of our international operations based on
fixed currency rates of foreign exchange, which eliminate the
translation impact of exchange rate fluctuations on our international
results. We also provide our segment results based on public currency
rates for informational purposes.
Acquisition adjusted growth rates generally exclude the results of any
acquired business from the first twelve months post acquisition and
exclude the results of divested businesses from the previous twelve
months prior to divestiture. Acquisition adjusted growth rates also
exclude the Venezuelan results of operations from both the current
period and comparable period of the prior year.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Industrial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
Fourth Quarter Ended
December 31
|
|
|
|
|
Acq. Adj.
|
|
(millions)
|
|
2016
|
|
2015
|
|
% Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
1,200.6
|
|
|
$
|
1,176.6
|
|
|
2
|
%
|
|
2
|
%
|
|
Operating income
|
|
|
203.2
|
|
|
|
196.2
|
|
|
4
|
%
|
|
5
|
%
|
|
Operating income margin
|
|
|
16.9
|
%
|
|
|
16.7
|
%
|
|
|
|
|
|
|
|
Acq. adj. operating income margin
|
|
|
16.9
|
%
|
|
|
16.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Public currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
1,222.9
|
|
|
$
|
1,203.4
|
|
|
2
|
%
|
|
|
|
|
Operating income
|
|
|
208.2
|
|
|
|
198.1
|
|
|
5
|
%
|
|
|
|
Global Industrial fixed currency sales rose 2%, led by strong gains in
Paper, with modest increases in Food & Beverage and Water. Latin America
led the Global Industrial regional growth, with modest gains in North
America. Acquisition adjusted fixed currency operating income rose 5% as
improved volume and mix, pricing and cost savings initiatives more than
offset modestly higher delivered product costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Institutional
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
Fourth Quarter Ended
December 31
|
|
|
|
|
Acq. Adj.
|
|
(millions)
|
|
2016
|
|
2015
|
|
% Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
1,141.2
|
|
|
$
|
1,089.2
|
|
|
5
|
%
|
|
5
|
%
|
|
Operating income
|
|
|
258.8
|
|
|
|
224.9
|
|
|
15
|
%
|
|
16
|
%
|
|
Operating income margin
|
|
|
22.7
|
%
|
|
|
20.6
|
%
|
|
|
|
|
|
|
|
Acq. adj. operating income margin
|
|
|
23.0
|
%
|
|
|
20.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Public currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
1,150.2
|
|
|
$
|
1,102.0
|
|
|
4
|
%
|
|
|
|
|
Operating income
|
|
|
259.3
|
|
|
|
227.2
|
|
|
14
|
%
|
|
|
|
Global Institutional fixed currency sales grew 5%, with results led by
our Specialty and Healthcare businesses. Sales for the segment showed
good growth in Latin America and North America. Acquisition adjusted
fixed currency operating income increased 16% as pricing, sales volume
gains and a significant increase in the Healthcare margin versus last
year (which included the impact of a voluntary recall) more than offset
investments in the business and modestly higher delivered product costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
Fourth Quarter Ended
December 31
|
|
|
|
|
Acq. Adj.
|
|
(millions)
|
|
2016
|
|
2015
|
|
% Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
760.6
|
|
|
$
|
885.1
|
|
|
(14
|
)
|
%
|
|
(14
|
)
|
%
|
|
Operating income
|
|
|
98.3
|
|
|
|
140.3
|
|
|
(30
|
)
|
%
|
|
(29
|
)
|
%
|
|
Operating income margin
|
|
|
12.9
|
%
|
|
|
15.9
|
%
|
|
|
|
|
|
|
|
Acq. adj. operating income margin
|
|
|
12.8
|
%
|
|
|
15.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Public currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
774.3
|
|
|
$
|
913.0
|
|
|
(15
|
)
|
%
|
|
|
|
|
Operating income
|
|
|
101.9
|
|
|
|
147.2
|
|
|
(31
|
)
|
%
|
|
|
|
Global Energy fixed currency sales declined 14% reflecting decreases in
both the upstream and downstream businesses. The fourth quarter 2016
comparison included the previously discussed impact of favorable
one-time sales in 2015 and unfavorable customer business disruptions in
2016. Acquisition adjusted fixed currency operating income decreased 29%
due to lower sales volume and reduced pricing, which more than offset
cost reduction actions, delivered product cost savings and synergies.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited)
|
|
Fourth Quarter Ended
December 31
|
|
|
|
|
Acq. Adj.
|
|
(millions)
|
|
2016
|
|
2015
|
|
% Change
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
205.0
|
|
|
$
|
191.2
|
|
|
7
|
%
|
|
7
|
%
|
|
Operating income
|
|
|
37.9
|
|
|
|
35.6
|
|
|
6
|
%
|
|
6
|
%
|
|
Operating income margin
|
|
|
18.5
|
%
|
|
|
18.6
|
%
|
|
|
|
|
|
|
|
Acq. adj. operating income margin
|
|
|
18.5
|
%
|
|
|
18.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Public currency
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
204.7
|
|
|
$
|
193.6
|
|
|
6
|
%
|
|
|
|
|
Operating income
|
|
|
37.5
|
|
|
|
36.4
|
|
|
3
|
%
|
|
|
|
The Other segment fixed currency sales increased 7% driven by strong
growth in Pest Elimination. Sales for the segment showed good growth in
Asia Pacific, North America and Latin America. Fixed currency operating
income rose 6% as pricing and sales volume gains were partially offset
by investments in the business and higher fleet-related costs in the
quarter.
Corporate
Corporate segment expense includes amortization expense of $42 million
in both the fourth quarter of 2016 and 2015 related to the Nalco merger
intangible assets. Corporate expense also includes special gains and
charges. Total special gains and charges for the fourth quarter of 2016
were insignificant on a net basis. Special gains and charges for the
fourth quarter of 2015 were a net charge of $242 million ($165 million
after-tax) and primarily consisted of a $123 million charge related to
the deconsolidation of our Venezuelan business and $63 million related
to restructuring costs. The remainder of the special gains and charges
consisted primarily of an asset impairment and wage-hour
litigation-related charges.
Business Outlook
2017
Ecolab expects full year 2017 adjusted diluted earnings per share in the
$4.70 to $4.90 range, rising 8% to 12%. We expect the second half of the
year to show better earnings growth comparisons than the first half.
Adjusted diluted earnings per share do not reflect the net impact of
future special gains and charges or discrete tax items. We expect a full
year special charge, including deal, integration and inventory step-up
costs associated with Swisher and recently announced Anios acquisition,
to be approximately $0.06 per share. Discrete tax items are expected to
be favorable, resulting from adoption of accounting changes with regards
to tax benefits on share-based compensation. We are not forecasting the
net impact of special gains and charges or other discrete tax items, as
such amounts, other than those associated with Swisher and Anios, are
not currently quantifiable.
When compared with our 2016 performance, we expect improved acquisition
adjusted fixed currency sales growth in our Global Institutional, Global
Industrial and Other segments with stabilizing Global Energy segment
sales. We anticipate improved adjusted gross margin driven by pricing
and cost efficiency actions that offset higher delivered product costs,
with a similar selling, general and administrative (“SG&A”) ratio to
sales, lower interest expense and a similar adjusted tax rate versus
2016.
At current rates of exchange, we expect foreign currency translation to
have an unfavorable impact of approximately 1 percentage point on full
year sales and an estimated 2 percentage point (approximately $0.07 per
share) unfavorable impact on diluted earnings per share.
Our detailed outlook for the full year of 2017 is as follows:
|
Adjusted Gross Margin, excluding special gains and charges
|
|
48% to 49%
|
|
SG&A % of Sales
|
|
approx. 33%
|
|
Interest expense, net
|
|
approx. $250 million
|
|
Adjusted tax rate
|
|
approx. 25%
|
|
Noncontrolling interest
|
|
approx. $0.05
|
|
Adjusted EPS, excluding special gains and charges
|
|
$4.70 - $4.90
|
|
Diluted shares
|
|
approx. 293 million
|
Reported 2016 diluted earnings per share of $4.14 included special gains
and charges and discrete tax items. Excluding these items, 2016 adjusted
diluted earnings per share were $4.37.
2017 — First Quarter
Ecolab expects first quarter 2017 adjusted diluted earnings per share in
the $0.77 to $0.83 range, compared with adjusted diluted earnings per
share of $0.77 a year ago.
We expect a first quarter 2017 special charge associated with Swisher
and the recently announced Anios acquisition to be approximately $0.03
per share. Discrete tax items are expected to largely result from the
adoption of updated accounting standards with regards to tax benefits on
share-based compensation. We are not forecasting the net impact of
discrete tax items or special gains and charges as the amounts, other
than those associated with Swisher and Anios, are not currently
quantifiable.
At current rates of exchange, we expect foreign currency to have an
unfavorable 1 percentage point (approximately $0.01) impact on diluted
earnings per share.
Our detailed outlook for the first quarter of 2017 is as follows:
|
Adjusted Gross Margin, excluding special gains and charges
|
|
approx. 47%
|
|
SG&A % of Sales
|
|
approx. 35%
|
|
Interest expense, net
|
|
$60 million to $65 million
|
|
Adjusted tax rate
|
|
approx. 25%
|
|
Noncontrolling interest
|
|
approx. $0.01
|
|
Adjusted EPS, excluding special gains and charges
|
|
$0.77 - $0.83
|
|
Diluted shares
|
|
approx. 295 million
|
Reported first quarter 2016 diluted earnings per share of $0.77 included
special gains and charges and discrete tax items. Excluding these items,
first quarter 2016 adjusted diluted earnings per share were also $0.77.
About Ecolab
A trusted partner at more than one million customer locations, Ecolab
(ECL) is the global leader in water, hygiene and energy technologies and
services that protect people and vital resources. With 2016 sales of $13
billion and 48,000 associates, Ecolab delivers comprehensive solutions
and on-site service to promote safe food, maintain clean environments,
optimize water and energy use and improve operational efficiencies for
customers in the food, healthcare, energy, hospitality and industrial
markets in more than 170 countries around the world. For more Ecolab
news and information, visit www.ecolab.com.
Ecolab will host a live webcast to review the fourth quarter earnings
announcement and earnings guidance today at 1:00 p.m. Eastern Time. The
webcast, along with related materials, will be available to the public
on Ecolab's website at www.ecolab.com/investor.
A replay of the webcast and related materials will be available at that
site. Listening to the webcast requires Internet access, the Windows
Media Player or other compatible streaming media player.
Cautionary Statements Regarding Forward-Looking
Information
This communication contains certain statements relating to future events
and our intentions, beliefs, expectations and predictions for the future
which are forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. Words or phrases such
as “will likely result,” “are expected to,” “will continue,” “is
anticipated,” “we believe,” “we expect,” “estimate,” “project,” “may,”
“will,” “intend,” “plan,” “believe,” “target,” “forecast” (including the
negative or variations thereof) or similar terminology used in
connection with any discussion of future plans, actions or events
generally identify forward-looking statements. These forward-looking
statements include, but are not limited to, statements regarding our
financial and business performance and prospects, including forecasted
2017 first quarter and full-year financial and business results,
including sales growth, adjusted gross margin, SG&A ratios to sales,
interest expense, adjusted tax rate, noncontrolling interest, adjusted
diluted earnings per share and diluted shares outstanding, pricing,
margin improvement, energy market conditions, foreign currency, and
special gains and charges and quantifiable discrete tax items. These
statements are based on the current expectations of management of the
company. There are a number of risks and uncertainties that could cause
actual results to differ materially from the forward-looking statements
included in this communication. In particular, the ultimate results of
any restructuring, integration and business improvement actions,
including cost synergies, depend on a number of factors, including the
development of final plans, the impact of local regulatory requirements
regarding employee terminations, the time necessary to develop and
implement the restructuring and other business improvement initiatives
and the level of success achieved through such actions in improving
competitiveness, efficiency and effectiveness.
Additional risks and uncertainties that may affect operating results and
business performance are set forth under Item 1A of our most recent Form
10-K, and our other public filings with the Securities and Exchange
Commission (the "SEC") and include the vitality of the markets we serve,
including the impact of oil price fluctuations on the markets served by
our Global Energy segment; the impact of economic factors such as the
worldwide economy, capital flows, interest rates and foreign currency
risk, including reduced sales and earnings in other countries resulting
from the weakening of local currencies versus the U.S. dollar; our
ability to attract and retain high caliber management talent to lead our
business; our ability to execute key business initiatives; potential
information technology infrastructure failures and cybersecurity
attacks; exposure to global economic, political and legal risks related
to our international operations including with respect to our operations
in Russia; the costs and effects of complying with laws and regulations,
including those relating to the environment and to the manufacture,
storage, distribution, sale and use of our products; the occurrence of
litigation or claims, including related to the Deepwater Horizon oil
spill; our ability to develop competitive advantages through innovation;
difficulty in procuring raw materials or fluctuations in raw material
costs; our substantial indebtedness; our ability to acquire
complementary businesses and to effectively integrate such businesses;
restraints on pricing flexibility due to contractual obligations;
pressure on operations from consolidation of customers, vendors or
competitors; public health epidemics; potential losses arising from the
impairment of goodwill or other assets; potential loss of deferred tax
assets; changes in tax law and unanticipated tax liabilities; potential
chemical spill or release; potential class action lawsuits; the loss or
insolvency of a major customer or distributor; acts of war or terrorism;
natural or man-made disasters; water shortages; severe weather
conditions; and other uncertainties or risks reported from time to time
in our reports to the SEC. In light of these risks, uncertainties,
assumptions and factors, the forward-looking events discussed in this
communication may not occur. We caution that undue reliance should not
be placed on forward-looking statements, which speak only as of the date
made. Ecolab does not undertake, and expressly disclaims, any duty to
update any forward-looking statement whether as a result of new
information, future events or changes in expectations, except as
required by law.
Non-GAAP Financial Information
This news release and certain of the accompanying tables include
financial measures that have not been calculated in accordance with
accounting principles generally accepted in the U.S. (“GAAP”). These
non-GAAP financial measures include:
-
fixed currency sales
-
acquisition adjusted fixed currency sales
-
adjusted cost of sales
-
adjusted gross margin
-
fixed currency operating income
-
fixed currency operating income margin
-
adjusted operating income
-
adjusted fixed currency operating income
-
adjusted fixed currency operating income margin
-
acquisition adjusted fixed currency operating income
-
acquisition adjusted fixed currency operating income margin
-
adjusted tax rate
-
adjusted net income attributable to Ecolab
-
adjusted diluted earnings per share
We provide these measures as additional information regarding our
operating results. We use these non-GAAP measures internally to evaluate
our performance and in making financial and operational decisions,
including with respect to incentive compensation. We believe that our
presentation of these measures provides investors with greater
transparency with respect to our results of operations and that these
measures are useful for period-to-period comparison of results.
Our non-GAAP financial measures for cost of sales, gross margin and
operating income exclude the impact of special (gains) and charges, and
our non-GAAP measures for tax rate, net income attributable to Ecolab
and diluted earnings per share further exclude the impact of discrete
tax items. We include items within special (gains) and charges and
discrete tax items that we believe can significantly affect the
period-over-period assessment of operating results and not necessarily
reflect costs associated with historical trends and future results.
After tax special (gains) and charges are derived by applying the
applicable local jurisdictional tax rate to the corresponding pre-tax
special (gains) and charges.
We evaluate the performance of our international operations based on
fixed currency rates of foreign exchange. Fixed currency amounts
included in this release are based on translation into U.S. dollars at
the fixed foreign currency exchange rates established by management at
the beginning of 2016. Fixed currency amounts also reflect all
Venezuelan bolivar operations, prior to the deconsolidation of our
Venezuelan operations, at a Marginal Currency System (“SIMADI”) rate of
approximately 200 bolivares to 1 U.S. dollar, which was the approximate
conversion rate for SIMADI at year end 2015.
Acquisition adjusted growth rates exclude the results of any acquired
business from the first twelve months post acquisition and exclude the
results of divested businesses from the previous twelve months prior to
divestiture. Acquisition adjusted growth rates also exclude the
Venezuelan results of operations from both the current period and
comparable period of the prior year.
These non-GAAP financial measures are not in accordance with, or an
alternative to, GAAP and may be different from non-GAAP measures used by
other companies. Investors should not rely on any single financial
measure when evaluating our business. We recommend that investors view
these measures in conjunction with the GAAP measures included in this
news release. Reconciliations of our non-GAAP measures are included in
the following "Supplemental Non-GAAP Reconciliations" and “Supplemental
Diluted Earnings per Share Information” tables included in this news
release.
(ECL-E)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECOLAB INC.
CONSOLIDATED STATEMENT OF INCOME
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter Ended
December 31
|
|
%
|
|
Twelve Months Ended
December 31
|
|
%
|
|
(millions, except per share)
|
|
2016
|
|
2015
|
|
Change
|
|
2016
|
|
2015
|
|
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
3,352.1
|
|
|
$
|
3,412.0
|
|
|
(2
|
)
|
%
|
|
$
|
13,152.8
|
|
|
$
|
13,545.1
|
|
|
(3
|
)
|
%
|
|
Cost of sales (1)
|
|
|
1,745.1
|
|
|
|
1,831.7
|
|
|
(5
|
)
|
%
|
|
|
6,898.9
|
|
|
|
7,223.5
|
|
|
(4
|
)
|
%
|
|
Selling, general and administrative expenses
|
|
|
1,046.3
|
|
|
|
1,058.8
|
|
|
(1
|
)
|
%
|
|
|
4,299.4
|
|
|
|
4,345.5
|
|
|
(1
|
)
|
%
|
|
Special (gains) and charges (1)
|
|
|
3.8
|
|
|
|
198.7
|
|
|
|
|
|
|
39.5
|
|
|
|
414.8
|
|
|
|
|
|
Operating income
|
|
|
556.9
|
|
|
|
322.8
|
|
|
73
|
|
%
|
|
|
1,915.0
|
|
|
|
1,561.3
|
|
|
23
|
|
%
|
|
Interest expense, net
|
|
|
68.3
|
|
|
|
62.3
|
|
|
10
|
|
%
|
|
|
264.6
|
|
|
|
243.6
|
|
|
9
|
|
%
|
|
Income before income taxes
|
|
|
488.6
|
|
|
|
260.5
|
|
|
88
|
|
%
|
|
|
1,650.4
|
|
|
|
1,317.7
|
|
|
25
|
|
%
|
|
Provision for income taxes
|
|
|
116.6
|
|
|
|
37.6
|
|
|
210
|
|
%
|
|
|
403.3
|
|
|
|
300.5
|
|
|
34
|
|
%
|
|
Net income including noncontrolling interest
|
|
|
372.0
|
|
|
|
222.9
|
|
|
67
|
|
%
|
|
|
1,247.1
|
|
|
|
1,017.2
|
|
|
23
|
|
%
|
|
Net income attributable to noncontrolling interest (1)
|
|
|
5.7
|
|
|
|
14.0
|
|
|
|
|
|
|
17.5
|
|
|
|
15.1
|
|
|
|
|
|
Net income attributable to Ecolab
|
|
$
|
366.3
|
|
|
$
|
208.9
|
|
|
75
|
|
%
|
|
$
|
1,229.6
|
|
|
$
|
1,002.1
|
|
|
23
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings attributable to Ecolab per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.26
|
|
|
$
|
0.71
|
|
|
77
|
|
%
|
|
$
|
4.20
|
|
|
$
|
3.38
|
|
|
24
|
|
%
|
|
Diluted
|
|
$
|
1.24
|
|
|
$
|
0.69
|
|
|
80
|
|
%
|
|
$
|
4.14
|
|
|
$
|
3.32
|
|
|
25
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
291.7
|
|
|
|
295.8
|
|
|
(1
|
)
|
%
|
|
|
292.5
|
|
|
|
296.4
|
|
|
(1
|
)
|
%
|
|
Diluted
|
|
|
295.5
|
|
|
|
300.6
|
|
|
(2
|
)
|
%
|
|
|
296.7
|
|
|
|
301.4
|
|
|
(2
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Special (gains) and charges in the Consolidated Statement of
Income above include the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions)
|
|
2016
|
|
2015
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring related activities
|
|
$
|
(1.3
|
)
|
|
$
|
14.4
|
|
|
|
|
|
$
|
(0.4
|
)
|
|
$
|
16.5
|
|
|
|
|
|
Inventory costs
|
|
|
(6.2
|
)
|
|
|
(14.5
|
)
|
|
|
|
|
|
(6.2
|
)
|
|
|
(14.5
|
)
|
|
|
|
|
Inventory reserve
|
|
|
-
|
|
|
|
20.6
|
|
|
|
|
|
|
-
|
|
|
|
20.6
|
|
|
|
|
|
Energy related charges
|
|
|
11.6
|
|
|
|
-
|
|
|
|
|
|
|
62.6
|
|
|
|
-
|
|
|
|
|
|
Fixed asset impairment and other inventory charges
|
|
|
-
|
|
|
|
24.7
|
|
|
|
|
|
|
10.0
|
|
|
|
24.7
|
|
|
|
|
|
Venezuela related activities
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
33.3
|
|
|
|
|
|
Subtotal
|
|
|
4.1
|
|
|
|
45.2
|
|
|
|
|
|
|
66.0
|
|
|
|
80.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special (gains) and charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring related activities
|
|
|
(1.9
|
)
|
|
|
50.6
|
|
|
|
|
|
|
(8.7
|
)
|
|
|
83.8
|
|
|
|
|
|
Champion and Nalco integration costs
|
|
|
-
|
|
|
|
3.8
|
|
|
|
|
|
|
-
|
|
|
|
18.7
|
|
|
|
|
|
Energy related charges
|
|
|
1.6
|
|
|
|
-
|
|
|
|
|
|
|
14.2
|
|
|
|
-
|
|
|
|
|
|
Venezuela related activities
|
|
|
-
|
|
|
|
123.4
|
|
|
|
|
|
|
(7.8
|
)
|
|
|
256.0
|
|
|
|
|
|
Other
|
|
|
4.1
|
|
|
|
20.9
|
|
|
|
|
|
|
41.8
|
|
|
|
56.3
|
|
|
|
|
|
Subtotal
|
|
|
3.8
|
|
|
|
198.7
|
|
|
|
|
|
|
39.5
|
|
|
|
414.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income subtotal
|
|
|
7.9
|
|
|
|
243.9
|
|
|
|
|
|
|
105.5
|
|
|
|
495.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring related activities
|
|
|
-
|
|
|
|
(1.7
|
)
|
|
|
|
|
|
-
|
|
|
|
(1.7
|
)
|
|
|
|
|
Venezuela related activities
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
(11.1
|
)
|
|
|
|
|
Subtotal
|
|
|
-
|
|
|
|
(1.7
|
)
|
|
|
|
|
|
-
|
|
|
|
(12.8
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total special (gains) and charges
|
|
$
|
7.9
|
|
|
$
|
242.2
|
|
|
|
|
|
$
|
105.5
|
|
|
$
|
482.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECOLAB INC.
REPORTABLE SEGMENT INFORMATION
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter Ended December 31
|
|
|
|
Fixed Currency Rates
|
|
Public Currency Rates
|
|
(millions)
|
|
2016
|
|
2015
|
|
%
Change
|
|
2016
|
|
2015
|
|
%
Change
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Industrial
|
|
$
|
1,200.6
|
|
|
$
|
1,176.6
|
|
|
2
|
|
%
|
|
$
|
1,222.9
|
|
|
$
|
1,203.4
|
|
|
2
|
|
%
|
|
Global Institutional
|
|
|
1,141.2
|
|
|
|
1,089.2
|
|
|
5
|
|
%
|
|
|
1,150.2
|
|
|
|
1,102.0
|
|
|
4
|
|
%
|
|
Global Energy
|
|
|
760.6
|
|
|
|
885.1
|
|
|
(14
|
)
|
%
|
|
|
774.3
|
|
|
|
913.0
|
|
|
(15
|
)
|
%
|
|
Other
|
|
|
205.0
|
|
|
|
191.2
|
|
|
7
|
|
%
|
|
|
204.7
|
|
|
|
193.6
|
|
|
6
|
|
%
|
|
Subtotal at fixed currency rates
|
|
|
3,307.4
|
|
|
|
3,342.1
|
|
|
(1
|
)
|
%
|
|
|
3,352.1
|
|
|
|
3,412.0
|
|
|
(2
|
)
|
%
|
|
Currency impact
|
|
|
44.7
|
|
|
|
69.9
|
|
|
*
|
|
|
|
|
-
|
|
|
|
-
|
|
|
*
|
|
|
|
Consolidated
|
|
$
|
3,352.1
|
|
|
$
|
3,412.0
|
|
|
(2
|
)
|
%
|
|
$
|
3,352.1
|
|
|
$
|
3,412.0
|
|
|
(2
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Industrial
|
|
$
|
203.2
|
|
|
$
|
196.2
|
|
|
4
|
|
%
|
|
$
|
208.2
|
|
|
$
|
198.1
|
|
|
5
|
|
%
|
|
Global Institutional
|
|
|
258.8
|
|
|
|
224.9
|
|
|
15
|
|
%
|
|
|
259.3
|
|
|
|
227.2
|
|
|
14
|
|
%
|
|
Global Energy
|
|
|
98.3
|
|
|
|
140.3
|
|
|
(30
|
)
|
%
|
|
|
101.9
|
|
|
|
147.2
|
|
|
(31
|
)
|
%
|
|
Other
|
|
|
37.9
|
|
|
|
35.6
|
|
|
6
|
|
%
|
|
|
37.5
|
|
|
|
36.4
|
|
|
3
|
|
%
|
|
Corporate
|
|
|
(49.6
|
)
|
|
|
(285.4
|
)
|
|
*
|
|
|
|
|
(50.0
|
)
|
|
|
(286.1
|
)
|
|
*
|
|
|
|
Subtotal at fixed currency rates
|
|
|
548.6
|
|
|
|
311.6
|
|
|
76
|
|
%
|
|
|
556.9
|
|
|
|
322.8
|
|
|
73
|
|
%
|
|
Currency impact
|
|
|
8.3
|
|
|
|
11.2
|
|
|
*
|
|
|
|
|
-
|
|
|
|
-
|
|
|
*
|
|
|
|
Consolidated
|
|
$
|
556.9
|
|
|
$
|
322.8
|
|
|
73
|
|
%
|
|
$
|
556.9
|
|
|
$
|
322.8
|
|
|
73
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31
|
|
|
|
Fixed Currency Rates
|
|
Public Currency Rates
|
|
(millions)
|
|
2016
|
|
2015
|
|
%
Change
|
|
2016
|
|
2015
|
|
%
Change
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Industrial
|
|
$
|
4,617.1
|
|
|
$
|
4,485.5
|
|
|
3
|
|
%
|
|
$
|
4,709.8
|
|
|
$
|
4,726.9
|
|
|
0
|
|
%
|
|
Global Institutional
|
|
|
4,495.6
|
|
|
|
4,210.9
|
|
|
7
|
|
%
|
|
|
4,540.3
|
|
|
|
4,307.6
|
|
|
5
|
|
%
|
|
Global Energy
|
|
|
3,035.8
|
|
|
|
3,470.8
|
|
|
(13
|
)
|
%
|
|
|
3,092.9
|
|
|
|
3,747.2
|
|
|
(17
|
)
|
%
|
|
Other
|
|
|
806.5
|
|
|
|
747.1
|
|
|
8
|
|
%
|
|
|
809.8
|
|
|
|
763.4
|
|
|
6
|
|
%
|
|
Subtotal at fixed currency rates
|
|
|
12,955.0
|
|
|
|
12,914.3
|
|
|
0
|
|
%
|
|
|
13,152.8
|
|
|
|
13,545.1
|
|
|
(3
|
)
|
%
|
|
Currency impact
|
|
|
197.8
|
|
|
|
630.8
|
|
|
*
|
|
|
|
|
-
|
|
|
|
-
|
|
|
*
|
|
|
|
Consolidated
|
|
$
|
13,152.8
|
|
|
$
|
13,545.1
|
|
|
(3
|
)
|
%
|
|
$
|
13,152.8
|
|
|
$
|
13,545.1
|
|
|
(3
|
)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Global Industrial
|
|
$
|
703.0
|
|
|
$
|
626.4
|
|
|
12
|
|
%
|
|
$
|
719.9
|
|
|
$
|
673.0
|
|
|
7
|
|
%
|
|
Global Institutional
|
|
|
966.7
|
|
|
|
876.6
|
|
|
10
|
|
%
|
|
|
972.7
|
|
|
|
889.2
|
|
|
9
|
|
%
|
|
Global Energy
|
|
|
337.1
|
|
|
|
465.5
|
|
|
(28
|
)
|
%
|
|
|
348.4
|
|
|
|
538.0
|
|
|
(35
|
)
|
%
|
|
Other
|
|
|
148.1
|
|
|
|
127.5
|
|
|
16
|
|
%
|
|
|
148.0
|
|
|
|
129.3
|
|
|
14
|
|
%
|
|
Corporate
|
|
|
(272.1
|
)
|
|
|
(663.8
|
)
|
|
*
|
|
|
|
|
(274.0
|
)
|
|
|
(668.2
|
)
|
|
*
|
|
|
|
Subtotal at fixed currency rates
|
|
|
1,882.8
|
|
|
|
1,432.2
|
|
|
31
|
|
%
|
|
|
1,915.0
|
|
|
|
1,561.3
|
|
|
23
|
|
%
|
|
Currency impact
|
|
|
32.2
|
|
|
|
129.1
|
|
|
*
|
|
|
|
|
-
|
|
|
|
-
|
|
|
*
|
|
|
|
Consolidated
|
|
$
|
1,915.0
|
|
|
$
|
1,561.3
|
|
|
23
|
|
%
|
|
$
|
1,915.0
|
|
|
$
|
1,561.3
|
|
|
23
|
|
%
|
* Not meaningful.
As shown in the “Fixed Currency Rates” tables above, we evaluate the
performance of our international operations based on fixed currency
exchange rates, which eliminate the impact of exchange rate fluctuations
on our international operations. Amounts shown in the “Public Currency
Rates” tables above reflect amounts translated at actual public average
rates of exchange prevailing during the corresponding period, and are
provided for informational purposes. The difference between the fixed
currency exchange rates and the public currency exchange rates is
reported as “Currency impact” in the “Fixed Currency Rates” tables above.
The Corporate segment includes amortization from the Nalco merger
intangible assets. The Corporate segment also includes special (gains)
and charges reported on the Consolidated Statement of Income.
|
|
|
|
|
|
|
|
ECOLAB INC.
CONSOLIDATED BALANCE SHEET
(unaudited)
|
|
|
|
|
|
|
|
|
(millions)
|
|
December 31
2016
|
|
December 31
2015
|
|
Assets
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
327.4
|
|
|
|
$
|
92.8
|
|
|
Accounts receivable, net
|
|
|
2,341.2
|
|
|
|
|
2,390.2
|
|
|
Inventories
|
|
|
1,319.4
|
|
|
|
|
1,388.2
|
|
|
Deferred income taxes
|
|
|
-
|
|
|
|
|
250.0
|
|
|
Other current assets
|
|
|
291.4
|
|
|
|
|
326.3
|
|
|
Total current assets
|
|
|
4,279.4
|
|
|
|
|
4,447.5
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
3,365.0
|
|
|
|
|
3,228.3
|
|
|
Goodwill
|
|
|
6,383.0
|
|
|
|
|
6,490.8
|
|
|
Other intangible assets, net
|
|
|
3,817.8
|
|
|
|
|
4,109.2
|
|
|
Other assets
|
|
|
485.0
|
|
|
|
|
365.9
|
|
|
Total assets
|
|
$
|
18,330.2
|
|
|
|
$
|
18,641.7
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Short-term debt
|
|
$
|
541.3
|
|
|
|
$
|
2,205.3
|
|
|
Accounts payable
|
|
|
983.2
|
|
|
|
|
1,049.6
|
|
|
Compensation and benefits
|
|
|
516.3
|
|
|
|
|
509.0
|
|
|
Income taxes
|
|
|
87.4
|
|
|
|
|
52.2
|
|
|
Other current liabilities
|
|
|
891.2
|
|
|
|
|
948.3
|
|
|
Total current liabilities
|
|
|
3,019.4
|
|
|
|
|
4,764.4
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
6,145.7
|
|
|
|
|
4,260.2
|
|
|
Postretirement health care and pension benefits
|
|
|
1,019.2
|
|
|
|
|
1,117.1
|
|
|
Deferred income taxes
|
|
|
970.2
|
|
|
|
|
1,281.2
|
|
|
Other liabilities
|
|
|
204.8
|
|
|
|
|
238.4
|
|
|
Total liabilities
|
|
|
11,359.3
|
|
|
|
|
11,661.3
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Common stock
|
|
|
352.6
|
|
|
|
|
350.3
|
|
|
Additional paid-in capital
|
|
|
5,270.8
|
|
|
|
|
5,086.1
|
|
|
Retained earnings
|
|
|
6,975.0
|
|
|
|
|
6,160.3
|
|
|
Accumulated other comprehensive loss
|
|
|
(1,712.9
|
)
|
|
|
|
(1,423.3
|
)
|
|
Treasury stock
|
|
|
(3,984.4
|
)
|
|
|
|
(3,263.5
|
)
|
|
Total Ecolab shareholders’ equity
|
|
|
6,901.1
|
|
|
|
|
6,909.9
|
|
|
Noncontrolling interest
|
|
|
69.8
|
|
|
|
|
70.5
|
|
|
Total equity
|
|
|
6,970.9
|
|
|
|
|
6,980.4
|
|
|
Total liabilities and equity
|
|
$
|
18,330.2
|
|
|
|
$
|
18,641.7
|
|
During the first quarter of 2016, we early-adopted the accounting
guidance issued in November 2015 that requires all deferred tax assets
and liabilities to be classified as noncurrent on the Consolidated
Balance Sheet, using the prospective application method. Prior periods
have not been retrospectively adjusted for adoption of this guidance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECOLAB INC.
SUPPLEMENTAL NON-GAAP RECONCILIATIONS
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter Ended
December 31
|
|
Twelve Months Ended
December 31
|
|
(millions, except percent and per share)
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP net sales
|
|
$
|
3,352.1
|
|
|
|
$
|
3,412.0
|
|
|
|
$
|
13,152.8
|
|
|
|
$
|
13,545.1
|
|
|
|
Effect of foreign currency translation
|
|
|
(44.7
|
)
|
|
|
|
(69.9
|
)
|
|
|
|
(197.8
|
)
|
|
|
|
(630.8
|
)
|
|
|
Non-GAAP fixed currency sales
|
|
$
|
3,307.4
|
|
|
|
$
|
3,342.1
|
|
|
|
$
|
12,955.0
|
|
|
|
$
|
12,914.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP cost of sales
|
|
$
|
1,745.1
|
|
|
|
$
|
1,831.7
|
|
|
|
$
|
6,898.9
|
|
|
|
$
|
7,223.5
|
|
|
|
Special (gains) and charges
|
|
|
4.1
|
|
|
|
|
45.2
|
|
|
|
|
66.0
|
|
|
|
|
80.6
|
|
|
|
Non-GAAP cost of sales
|
|
$
|
1,741.0
|
|
|
|
$
|
1,786.5
|
|
|
|
$
|
6,832.9
|
|
|
|
$
|
7,142.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP gross margin
|
|
|
47.9
|
|
%
|
|
|
46.3
|
|
%
|
|
|
47.5
|
|
%
|
|
|
46.7
|
|
%
|
|
Non-GAAP adjusted gross margin
|
|
|
48.1
|
|
%
|
|
|
47.6
|
|
%
|
|
|
48.0
|
|
%
|
|
|
47.3
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP operating income
|
|
$
|
556.9
|
|
|
|
$
|
322.8
|
|
|
|
$
|
1,915.0
|
|
|
|
$
|
1,561.3
|
|
|
|
Effect of foreign currency translation
|
|
|
(8.3
|
)
|
|
|
|
(11.2
|
)
|
|
|
|
(32.2
|
)
|
|
|
|
(129.1
|
)
|
|
|
Non-GAAP fixed currency operating income
|
|
$
|
548.6
|
|
|
|
$
|
311.6
|
|
|
|
$
|
1,882.8
|
|
|
|
$
|
1,432.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP operating income
|
|
$
|
556.9
|
|
|
|
$
|
322.8
|
|
|
|
$
|
1,915.0
|
|
|
|
$
|
1,561.3
|
|
|
|
Special (gains) and charges
|
|
|
7.9
|
|
|
|
|
243.9
|
|
|
|
|
105.5
|
|
|
|
|
495.4
|
|
|
|
Non-GAAP adjusted operating income
|
|
|
564.8
|
|
|
|
|
566.7
|
|
|
|
|
2,020.5
|
|
|
|
|
2,056.7
|
|
|
|
Effect of foreign currency translation
|
|
|
(8.3
|
)
|
|
|
|
(11.2
|
)
|
|
|
|
(32.2
|
)
|
|
|
|
(129.1
|
)
|
|
|
Non-GAAP adjusted fixed currency operating income
|
|
$
|
556.5
|
|
|
|
$
|
555.5
|
|
|
|
$
|
1,988.3
|
|
|
|
$
|
1,927.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP operating income margin
|
|
|
16.6
|
|
%
|
|
|
9.5
|
|
%
|
|
|
14.6
|
|
%
|
|
|
11.5
|
|
%
|
|
Non-GAAP adjusted fixed currency operating income margin
|
|
|
16.8
|
|
%
|
|
|
16.6
|
|
%
|
|
|
15.3
|
|
%
|
|
|
14.9
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Ecolab
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP net income attributable to Ecolab
|
|
$
|
366.3
|
|
|
|
$
|
208.9
|
|
|
|
$
|
1,229.6
|
|
|
|
$
|
1,002.1
|
|
|
|
Special (gains) and charges, after tax
|
|
|
1.6
|
|
|
|
|
165.1
|
|
|
|
|
62.4
|
|
|
|
|
376.9
|
|
|
|
Discrete tax net expense (benefit)
|
|
|
0.3
|
|
|
|
|
(7.3
|
)
|
|
|
|
3.9
|
|
|
|
|
(63.3
|
)
|
|
|
Non-GAAP adjusted net income attributable to Ecolab
|
|
$
|
368.2
|
|
|
|
$
|
366.7
|
|
|
|
$
|
1,295.9
|
|
|
|
$
|
1,315.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings per Share Attributable to Ecolab ("EPS")
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP diluted EPS
|
|
$
|
1.24
|
|
|
|
$
|
0.69
|
|
|
|
$
|
4.14
|
|
|
|
$
|
3.32
|
|
|
|
Special (gains) and charges, after tax
|
|
|
0.01
|
|
|
|
|
0.55
|
|
|
|
|
0.21
|
|
|
|
|
1.25
|
|
|
|
Discrete tax net expense (benefit)
|
|
|
0.00
|
|
|
|
|
(0.02
|
)
|
|
|
|
0.01
|
|
|
|
|
(0.21
|
)
|
|
|
Non-GAAP adjusted diluted EPS
|
|
$
|
1.25
|
|
|
|
$
|
1.22
|
|
|
|
$
|
4.37
|
|
|
|
$
|
4.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported GAAP tax rate
|
|
|
23.9
|
|
%
|
|
|
14.4
|
|
%
|
|
|
24.4
|
|
%
|
|
|
22.8
|
|
%
|
|
Special gains and charges
|
|
|
0.9
|
|
|
|
|
8.3
|
|
|
|
|
1.0
|
|
|
|
|
(0.4
|
)
|
|
|
Discrete tax items
|
|
|
(0.1
|
)
|
|
|
|
1.5
|
|
|
|
|
(0.2
|
)
|
|
|
|
3.5
|
|
|
|
Non-GAAP adjusted tax rate
|
|
|
24.7
|
|
%
|
|
|
24.2
|
|
%
|
|
|
25.2
|
|
%
|
|
|
25.9
|
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ECOLAB INC.
SUPPLEMENTAL DILUTED EARNINGS PER SHARE
INFORMATION
(unaudited)
The table below provides a reconciliation of diluted earnings per share,
as reported, to the non-GAAP measure of adjusted diluted earnings per
share.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
Ended
Mar. 31
2015
|
|
Second
Quarter
Ended
June 30
2015
|
|
Six
Months
Ended
June 30
2015
|
|
Third
Quarter
Ended
Sept. 30
2015
|
|
Nine
Months
Ended
Sept. 30
2015
|
|
Fourth
Quarter
Ended
Dec. 31
2015
|
|
Year
Ended
Dec. 31
2015
|
|
Diluted earnings per share, as reported (U.S. GAAP)
|
|
$
|
0.77
|
|
$
|
1.00
|
|
|
$
|
1.77
|
|
|
$
|
0.86
|
|
|
$
|
2.63
|
|
|
$
|
0.69
|
|
|
$
|
3.32
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special (gains) and charges (1)
|
|
|
0.02
|
|
|
0.20
|
|
|
|
0.22
|
|
|
|
0.48
|
|
|
|
0.70
|
|
|
|
0.55
|
|
|
|
1.25
|
|
|
Discrete tax expense (benefits) (2)
|
|
|
0.01
|
|
|
(0.13
|
)
|
|
|
(0.12
|
)
|
|
|
(0.06
|
)
|
|
|
(0.19
|
)
|
|
|
(0.02
|
)
|
|
|
(0.21
|
)
|
|
Adjusted diluted earnings per share (Non-GAAP)
|
|
$
|
0.80
|
|
$
|
1.08
|
|
|
$
|
1.87
|
|
|
$
|
1.28
|
|
|
$
|
3.15
|
|
|
$
|
1.22
|
|
|
$
|
4.37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Quarter
Ended
Mar. 31
2016
|
|
Second
Quarter
Ended
June 30
2016
|
|
Six
Months
Ended
June 30
2016
|
|
Third
Quarter
Ended
Sept. 30
2016
|
|
Nine
Months
Ended
Sept. 30
2016
|
|
Fourth
Quarter
Ended
Dec. 31
2016
|
|
Year
Ended
Dec. 31
2016
|
|
Diluted earnings per share, as reported (U.S. GAAP)
|
|
$
|
0.77
|
|
|
$
|
0.87
|
|
$
|
1.64
|
|
|
$
|
1.27
|
|
$
|
2.91
|
|
$
|
1.24
|
|
$
|
4.14
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special (gains) and charges (3)
|
|
|
0.01
|
|
|
|
0.19
|
|
|
0.21
|
|
|
|
0.00
|
|
|
0.20
|
|
|
0.01
|
|
|
0.21
|
|
Discrete tax expense (benefits) (4)
|
|
|
(0.02
|
)
|
|
|
0.01
|
|
|
(0.00
|
)
|
|
|
0.02
|
|
|
0.01
|
|
|
0.00
|
|
|
0.01
|
|
Adjusted diluted earnings per share (Non-GAAP)
|
|
$
|
0.77
|
|
|
$
|
1.08
|
|
$
|
1.85
|
|
|
$
|
1.28
|
|
$
|
3.12
|
|
$
|
1.25
|
|
$
|
4.37
|
Per share amounts do not necessarily sum due to changes in shares
outstanding and rounding.
(1) Special (gains) and charges for 2015 included restructuring charges
of $1.6 million, $14.6 million, $10.0 million and $49.3 million, net of
tax, in the first, second, third and fourth quarters, respectively.
Special (gains) and charges for 2015 also included $3.2 million, $2.8
million, $2.4 million and $2.3 million of costs, net of tax, in the
first, second, third and fourth quarters, respectively, related to
Champion integration costs. Special (gains) and charges for 2015 also
included $0.5 million, $0.1 million, $0.6 million and $0.1 million of
costs, net of tax, in the first, second, third and fourth quarters,
respectively, related to Nalco integration costs. Special (gains) and
charges for 2015 also include charges of $30.2 million, $124.6 million,
$80.9 million, net of tax, in the second, third and fourth quarters,
respectively, related to Venezuelan charges. Special (gains) and charges
for 2015 also included a charge of $15.4 million, net of tax, in the
fourth quarter related to a fixed asset impairment. Special (gains) and
charges for 2015 also included charges of $13.4 million, $7.8 million
and $17.1 million, net of tax, in the second, third and fourth quarters,
respectively, primarily related to litigation related charges, a loss on
the sale of a portion of our Ecovation business and the net impact of
inventory reserve and inventory cost policy harmonization efforts.
(2) The first quarter 2015 discrete tax items net expenses of $2.6
million were driven primarily by a change to a deferred tax liability
resulting from the Naperville facility transaction. The second quarter
2015 discrete tax items net benefits of $39.4 million were driven
primarily from our ability to recognize a worthless stock deduction for
the tax basis in a wholly owned domestic subsidiary. The third quarter
2015 discrete tax items net benefits of $19.2 million were driven
primarily by the release of valuation allowances on certain deferred tax
assets and a refund claim for taxes paid in a prior period resulting
from updated IRS regulations, offset partially by recognizing
adjustments from filing our 2014 U.S. federal income tax return. The
fourth quarter discrete tax items net benefits of $7.3 million were
driven primarily by the finalization of prior year IRS audits, valuation
allowance releases and other statute of limitation tax reserve releases.
(3) Special (gains) and charges for 2016 included restructuring charges
of $1.8 million, net of tax in the first quarter, and gains related to
restructuring of $1.9 million, $7.2 million, $3.5 million net of tax, in
the second, third and fourth quarters, respectively. Special (gains) and
charges for 2016 also included a charge of $42.9 million and $7.1
million net of tax, during the second and fourth quarters, respectively,
associated with the downturn in the global energy market. Special
(gains) and charges for 2016 also included a charge of $6.3 million, net
of tax, during the second quarter related to other fixed asset
impairments and inventory charges. Special (gains) and charges for 2016
also included a gain of $4.6 million, net of tax, during the fourth
quarter of 2016, related to inventory cost policy harmonization efforts,
initiated in 2015. Special (gains) and charges for 2016 also included a
gain of $4.9 million, net of tax, during the second quarter related to
the recovery of previously written off Venezuelan intercompany
receivables. Special (gains) and charges for 2016 also included $2.6
million, $14.6 million, $6.6 million and $2.6 million, net of tax, in
the first, second, third and fourth quarters, respectively, related to
other charges, including litigation related charges.
(4) The first quarter 2016 discrete tax items net benefits of $4.8
million were driven primarily by the release of reserves for uncertain
tax positions due to expiration of statute of limitations in non-U.S.
jurisdictions. The second quarter 2016 discrete tax items net expenses
of $3.9 million were driven by individually insignificant items,
including adjustments to deferred tax asset and liability positions. The
third quarter 2016 discrete tax items net expenses of $4.5 million were
driven primarily by recognizing adjustments from filing our 2015 U.S.
federal income tax return, partially offset by settlement of
international tax matters and remeasurement of certain deferred tax
assets and liabilities resulting from the application of an updated tax
rate in an international jurisdiction. The fourth quarter discrete tax
items net expenses of $0.3 million were driven by individually
insignificant items, including tax charges related to optimizing our
business structure and settlement of international tax matters,
partially offset by valuation allowance releases and other adjustments.
Ecolab Inc.
Michael J. Monahan, 651-250-2809
Andrew C. Hedberg, 651-250-2185