UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File No. 1-9328

~~(Mark One)~~

☒~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For the quarterly period ended September 30, 2017~~

☐~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For the transition period from to~~

~~Commission File No. 1-9328~~

ECOLAB INC.

(Exact name of registrant as specified in its charter)


Delaware		41-0231510
~~Delaware~~		~~41-0231510~~
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

1 Ecolab Place, St. Paul, Minnesota55102

(Address of principal executive offices)(Zip Code)

~~1-800-232-6522~~1-800-232-6522

(Registrant’s telephone number, including area code)

(Not applicable)

(Former name, former address and former fiscal year,

if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, $1.00 par value

2.625% Euro Notes due 2025

1.000% Euro Notes due 2024

ECL

ECL 25

ECL 24

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒⌧ No ☐◻

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of ~~Regulations~~Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒⌧ No ☐◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ⌧		Accelerated filer ◻
~~Large accelerated~~Non-accelerated filer ☒◻		~~Accelerated filer~~ Smaller reporting company ☐

~~Non-accelerated filer~~ ☐~~(Do not check if a smaller reporting company)~~		~~Smaller reporting company~~ ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒⌧

~~Indicate the~~The number of shares ~~outstanding~~ of each of the ~~issuer’s~~registrant’s classes of ~~common stock,~~Common Stock outstanding as of ~~September~~June 30, ~~2017.~~

~~288,914,305~~2021: 286,087,223 shares ~~of common stock,~~ , par value $1.00 per ~~share~~.share.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF INCOME

(unaudited)

Third Quarter Ended

Nine Months Ended

September 30

September 30

(millions, except per share amounts)

2017

2016

2017

2016

Net sales

$3,563.3

$3,386.1

$10,187.6

$9,800.7

Operating expenses

Cost of sales (including special charges (a))

1,891.3

1,737.2

5,454.4

5,153.8

Selling, general and administrative expenses

1,087.3

1,071.6

3,293.2

3,253.1

Special (gains) and charges

4.9

3.2

47.9

35.7

Operating income

579.8

574.1

1,392.1

1,358.1

Interest expense, net

55.1

64.9

177.2

196.3

Income before income taxes

524.7

509.2

1,214.9

1,161.8

Provision for income taxes

128.9

129.7

264.2

286.7

Net income including noncontrolling interest

395.8

379.5

950.7

875.1

Net income attributable to noncontrolling interest

3.4

5.4

8.2

11.8

Net income attributable to Ecolab

$392.4

$374.1

$942.5

$863.3

Earnings attributable to Ecolab per common share

Basic

$ 1.36

$ 1.28

$ 3.25

$ 2.95

Diluted

$ 1.34

$ 1.27

$ 3.20

$ 2.91

Dividends declared per common share

$0.370

$0.350

$1.110

$1.050

Weighted-average common shares outstanding

Basic

289.0

291.6

289.8

292.8

Diluted

293.4

295.7

294.2

297.1

Second Quarter Ended

Six Months Ended

June 30

(millions, except per share amounts)

2021

2020

2021

2020

Product and equipment sales

$2,514.4

$2,167.1

$4,807.8

$4,591.1

Service and lease sales

648.3

518.6

1,239.9

1,115.2

Net sales

3,162.7

2,685.7

6,047.7

5,706.3

Product and equipment cost of sales

1,464.9

1,301.5

2,827.8

2,666.2

Service and lease cost of sales

379.1

334.2

728.2

689.7

Cost of sales (including special charges (a))

1,844.0

1,635.7

3,556.0

3,355.9

Selling, general and administrative expenses

853.3

788.6

1,716.2

1,696.9

Special (gains) and charges

17.6

69.4

30.4

85.3

Operating income

447.8

192.0

745.1

568.2

Other expense (income) (b)

2.5

(15.1)

(14.5)

(30.5)

Interest expense, net (c)

45.6

58.7

97.3

107.0

Income before income taxes

399.7

148.4

662.3

491.7

Provision for income taxes

86.1

14.1

152.2

61.1

Net income from continuing operations, including noncontrolling interest

313.6

134.3

510.1

430.6

Net income from continuing operations attributable to noncontrolling interest

2.8

5.4

5.7

9.7

Net income from continuing operations attributable to Ecolab

310.8

128.9

504.4

420.9

Net loss from discontinued operations, net of tax (Note 4) (d)

(2,163.9)

(2,172.5)

Net income (loss) attributable to Ecolab

$310.8

($2,035.0)

$504.4

($1,751.6)

Earnings (loss) attributable to Ecolab per common share

Basic

Continuing operations

$ 1.09

$ 0.45

$ 1.76

$ 1.46

Discontinued operations

$ -

($ 7.51)

$ -

($ 7.53)

Earnings attributable to Ecolab

$ 1.09

($ 7.06)

$ 1.76

($ 6.07)

Diluted

Continuing operations

$ 1.08

$ 0.44

$ 1.75

$ 1.44

Discontinued operations

$ -

($ 7.42)

$ -

($ 7.44)

Earnings attributable to Ecolab

$ 1.08

($ 6.98)

$ 1.75

($ 6.00)

Weighted-average common shares outstanding

Basic

286.0

288.2

286.0

288.5

Diluted

288.8

291.5

288.9

292.0

(a)

~~(a)~~

Cost of sales includes special (gains) and charges, net of ~~$0.3 million~~$3.7 and $27.0 in the ~~third~~second quarter of ~~2017,~~2021 and ~~$26.2 million~~2020, respectively, and ~~$61.9 million~~$23.3 and $36.1 in the first ~~nine~~six months of ~~2017~~2021 and ~~2016, respectively.~~

2020, respectively, which is recorded in product and equipment cost of sales.

(b)	Other expense (income) includes special charges of $19.6 in the second quarter and first six months of 2021.

(c)	Interest expense, net includes special charges of $0.7 in the second quarter and first six months of 2020.

(d)	Net income (loss) from discontinued operations, net of tax includes noncontrolling interest of ($0.3) in the second quarter of 2020 and $2.2 in the first six months of 2020.

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF COMPREHENSIVE INCOME ~~(LOSS)~~

(unaudited)

Third Quarter Ended

Nine Months Ended

September 30

September 30

(millions)

2017

2016

2017

2016

Net income including noncontrolling interest

$395.8

$379.5

$950.7

$875.1

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments

Foreign currency translation

150.6

17.2

275.8

(1.3)

Loss on net investment hedges

(50.9)

(1.2)

(103.7)

(29.1)

99.7

16.0

172.1

(30.4)

Derivatives and hedging instruments

(20.8)

(9.5)

(29.1)

(40.2)

Pension and postretirement benefits

Amortization of net actuarial loss and prior service costs included in

net periodic pension and postretirement costs

1.3

5.6

8.2

16.7

Postretirement benefits changes

-

30.9

30.9

1.3

36.5

8.2

47.6

Subtotal

80.2

43.0

151.2

(23.0)

Total comprehensive income, including noncontrolling interest

476.0

422.5

1,101.9

852.1

Comprehensive income attributable to noncontrolling interest

4.0

8.0

10.8

17.8

Comprehensive income attributable to Ecolab

$472.0

$414.5

$1,091.1

$834.3


	Second Quarter Ended				Six Months Ended
	June 30				June 30
(millions)	2021		2020		2021		2020

Net income (loss) attributable to Ecolab		$310.8		($2,035.0)		$504.4		($1,751.6)
Net income from continuing operations attributable to noncontrolling interest		2.8		5.4		5.7		9.7
Net income (loss) from discontinued operations attributable to noncontrolling interest		-		(0.3)		-		2.2
Net income (loss) attributable to Ecolab, including noncontrolling interest		313.6		(2,029.9)		510.1		(1,739.7)

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments
Foreign currency translation		83.2		(122.9)		168.1		(161.2)
Separation of ChampionX		-		229.9		-		229.9
Loss on net investment hedges		(14.2)		(2.9)		(26.4)		(4.0)
Total foreign currency translation adjustments		69.0		104.1		141.7		64.7

Derivatives and hedging instruments		0.8		2.1		1.4		5.0

Pension and postretirement benefits
Current period net actuarial gain		109.9		-		109.9		-
Settlement charge		14.9		-		14.9		-
Amortization of net actuarial loss and prior period service credits, net		8.6		17.6		14.5		30.5
Total pension and postretirement benefits		133.4		17.6		139.3		30.5

Subtotal		203.2		123.8		282.4		100.2

Total comprehensive income (loss), including noncontrolling interest		516.8		(1,906.1)		792.5		(1,639.5)
Comprehensive income (loss) attributable to noncontrolling interest		2.1		(19.4)		4.3		(12.1)
Comprehensive income (loss) attributable to Ecolab		$514.7		($1,886.7)		$788.2		($1,627.4)

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED BALANCE ~~SHEET~~SHEETS

(unaudited)

September 30

December 31
(millions, except shares and per share amounts)

2017

2016

ASSETS

Current assets

Cash and cash equivalents

$209.1

$327.4
Accounts receivable, net

2,533.2

2,341.2
Inventories

1,509.0

1,319.4
Other current assets

363.2

291.4
Total current assets

4,614.5

4,279.4
Property, plant and equipment, net

3,617.2

3,365.0
Goodwill

7,154.4

6,383.0
Other intangible assets, net

4,039.6

3,817.8
Other assets

431.0

485.0
Total assets

$19,856.7

$18,330.2

LIABILITIES AND EQUITY

Current liabilities

Short-term debt

$1,073.0

$541.3
Accounts payable

1,115.9

983.2
Compensation and benefits

509.8

516.3
Income taxes

51.7

87.4
Other current liabilities

1,006.2

891.2
Total current liabilities

3,756.6

3,019.4
Long-term debt

6,484.5

6,145.7
Postretirement health care and pension benefits

983.7

1,019.2
Deferred income taxes

1,030.2

970.2
Other liabilities

302.5

204.8
Total liabilities

12,557.5

11,359.3

Equity (a)

Common stock

354.2

352.6
Additional paid-in capital

5,397.5

5,270.8
Retained earnings

7,598.0

6,975.0
Accumulated other comprehensive loss

(1,564.3)

(1,712.9)
Treasury stock

(4,563.1)

(3,984.4)
Total Ecolab shareholders’ equity

7,222.3

6,901.1
Noncontrolling interest

76.9

69.8
Total equity

7,299.2

6,970.9
Total liabilities and equity

$19,856.7

$18,330.2



	June 30		December 31
(millions, except per share amounts)	2021		2020

ASSETS
Current assets
Cash and cash equivalents		$1,402.4		$1,260.2
Accounts receivable, net		2,331.0		2,273.8
Inventories		1,418.5		1,285.2
Other current assets		335.5		298.2
Total current assets		5,487.4		5,117.4
Property, plant and equipment, net		3,077.9		3,124.9
Goodwill		6,172.4		6,006.9
Other intangible assets, net		2,925.4		2,977.0
Operating lease assets		391.5		423.8
Other assets		479.1		476.0
Total assets		$18,533.7		$18,126.0

LIABILITIES AND EQUITY
Current liabilities
Short-term debt		$17.3		$17.3
Accounts payable		1,213.3		1,160.6
Compensation and benefits		430.3		469.3
Income taxes		48.9		96.1
Other current liabilities		1,170.5		1,188.9
Total current liabilities		2,880.3		2,932.2
Long-term debt		6,708.9		6,669.3
Postretirement health care and pension benefits		1,046.6		1,226.2
Deferred income taxes		567.3		483.9
Operating lease liabilities		273.8		300.5
Other liabilities		320.5		312.4
Total liabilities		11,797.4		11,924.5
Commitments and contingencies (Note 17)

Equity (a)
Common stock		363.2		362.6
Additional paid-in capital		6,333.3		6,235.0
Retained earnings		8,472.8		8,243.0
Accumulated other comprehensive loss		(1,710.6)		(1,994.4)
Treasury stock		(6,749.6)		(6,679.7)
Total Ecolab shareholders’ equity		6,709.1		6,166.5
Noncontrolling interest		27.2		35.0
Total equity		6,736.3		6,201.5
Total liabilities and equity		$18,533.7		$18,126.0

(a)

~~(a)~~

Common stock, 800.0 ~~million~~ shares authorized, $1.00 par value per share, ~~288.9 million~~286.1 shares outstanding at ~~September~~June 30, ~~2017~~2021 and ~~291.8 million~~285.7 shares outstanding at December 31, ~~2016.~~2020. Shares outstanding are net of treasury stock.

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CASH FLOWS

(unaudited)


	Six Months Ended
	June 30
(millions)	2021		2020

OPERATING ACTIVITIES
Net income (loss) including noncontrolling interest		$510.1		($1,739.7)
Less: Net loss from discontinued operations including noncontrolling interest		-		(2,170.3)
Net income from continuing operations including noncontrolling interest		510.1		430.6
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		303.9		293.0
Amortization		116.7		103.2
Deferred income taxes		39.5		(25.0)
Share-based compensation expense		58.9		53.7
Pension and postretirement plan contributions		(36.5)		(34.1)
Pension and postretirement plan expense, net		23.6		17.1
Restructuring charges, net of cash paid		(15.9)		(23.3)
Other, net		12.0		53.8
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		(19.1)		96.1
Inventories		(103.5)		(151.9)
Other assets		(53.8)		(49.3)
Accounts payable		33.5		20.1
Other liabilities		(71.1)		(143.8)
Cash provided by operating activities - continuing operations		798.3		640.2
Cash provided by operating activities - discontinued operations		-		118.4
Cash provided by operating activities		798.3		758.6

INVESTING ACTIVITIES
Capital expenditures		(245.6)		(250.6)
Property and other assets sold		0.3		1.7
Acquisitions and investments in affiliates, net of cash acquired		(89.8)		(486.8)
Divestiture of businesses		-		55.4
Other, net		(12.7)		(9.4)
Cash used for investing activities - continuing operations		(347.8)		(689.7)
Cash provided by investing activities - discontinued operations		-		443.2
Cash used for investing activities		(347.8)		(246.5)

FINANCING ACTIVITIES
Net issuances of commercial paper and notes payable		(1.0)		454.4
Long-term debt borrowings		-		768.9
Long-term debt repayments		-		(300.0)
Reacquired shares		(70.6)		(104.7)
Dividends paid		(286.6)		(283.2)
Exercise of employee stock options		40.4		188.7
Other, net		(0.5)		(3.5)
Cash (used for) provided by financing activities - continuing operations		(318.3)		720.6
Cash used for financing activities - discontinued operations		-		(1.6)
Cash (used for) provided by financing activities		(318.3)		719.0

Effect of exchange rate changes on cash and cash equivalents		10.0		(48.5)

Increase in cash and cash equivalents		142.2		1,182.6
Cash and cash equivalents, beginning of period - continuing operations		1,260.2		118.8
Cash and cash equivalents, beginning of period - discontinued operations		-		67.6
Cash and cash equivalents, beginning of period		1,260.2		186.4
Cash and cash equivalents, end of period - continuing operations		1,402.4		1,369.0
Cash and cash equivalents, end of period - discontinued operations		-		-
Cash and cash equivalents, end of period		$1,402.4		$1,369.0

Nine Months Ended

September 30

(millions)

2017

2016

OPERATING ACTIVITIES

Net income including noncontrolling interest

$950.7

$875.1

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation

437.0

420.9

Amortization

228.5

217.2

Deferred income taxes

10.4

(55.3)

Share-based compensation expense

71.8

67.7

Excess tax benefits from share-based payment arrangements

-

(39.5)

Pension and postretirement plan contributions

(131.0)

(207.0)

Pension and postretirement plan expense

26.5

43.1

Restructuring charges, net of cash paid

13.3

(48.1)

Asset charges and write-downs

-

50.9

Other, net

19.9

11.9

Changes in operating assets and liabilities, net of effect of acquisitions:

Accounts receivable

(23.5)

37.8

Inventories

(116.9)

34.6

Other assets

8.4

(14.0)

Accounts payable

57.0

(37.6)

Other liabilities

(107.2)

134.0

Cash provided by operating activities

1,444.9

1,491.7

INVESTING ACTIVITIES

Capital expenditures

(538.2)

(478.6)

Capitalized software expenditures

(55.8)

(32.2)

Property and other assets sold

4.1

29.6

Acquisitions and investments in affiliates, net of cash acquired

(831.2)

(44.7)

Deposit into acquisition related escrow

(0.8)

-

Restricted cash activity

53.8

(55.9)

Cash used for investing activities

(1,368.1)

(581.8)

FINANCING ACTIVITIES

Net issuances (repayments) of commercial paper and notes payable

187.8

(522.4)

Long-term debt borrowings

495.0

793.8

Long-term debt repayments

(20.1)

(130.5)

Reacquired shares

(587.7)

(737.8)

Dividends paid

(330.3)

(324.5)

Exercise of employee stock options

63.0

62.3

Excess tax benefits from share-based payment arrangements

-

39.5

Acquisition related liabilities and contingent consideration

(8.2)

(3.8)

Cash provided by (used for) financing activities

(200.5)

(823.4)

Effect of exchange rate changes on cash and cash equivalents

5.4

1.3

Increase (decrease) in cash and cash equivalents

(118.3)

87.8

Cash and cash equivalents, beginning of period

327.4

92.8

Cash and cash equivalents, end of period

$209.1

$180.6

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)


	Second Quarter Ended June 30, 2021 and 2020
(millions, except per share amounts)	Common Stock		Additional Paid-in Capital		Retained Earnings		OCI (Loss)		Treasury Stock		Ecolab Shareholders' Equity		Non-Controlling Interest		Total Equity
Balance, March 31, 2020		$360.8		$6,018.1		$10,136.9		($2,113.7)		($5,580.0)		$8,822.1		$38.5		$8,860.6

Net (loss) income						(2,035.0)						(2,035.0)		5.1		(2,029.9)
Other comprehensive income (loss) activity								124.0				124.0		(0.2)		123.8
Cash dividends declared (a)						(134.1)						(134.1)		(1.8)		(135.9)
Separation of ChampionX				(8.5)						(1,051.4)		(1,059.9)		3.4		(1,056.5)
Changes in noncontrolling interests				17.6								17.6		(10.0)		7.6
Stock options and awards		1.2		127.8						1.2		130.2				130.2
Reacquired shares										(9.7)		(9.7)				(9.7)
Balance, June 30, 2020		$362.0		$6,155.0		$7,967.8		($1,989.7)		($6,639.9)		$5,855.2		$35.0		$5,890.2

Balance, March 31, 2021		$363.0		$6,285.7		$8,299.3		($1,914.5)		($6,741.2)		$6,292.3		$27.8		$6,320.1

Net income						310.8						310.8		2.8		313.6
Other comprehensive income (loss) activity								203.9				203.9		(0.7)		203.2
Cash dividends declared (a)						(137.3)						(137.3)		(2.7)		(140.0)
Stock options and awards		0.2		47.6						0.4		48.2				48.2
Reacquired shares										(8.8)		(8.8)				(8.8)
Balance, June 30, 2021		$363.2		$6,333.3		$8,472.8		($1,710.6)		($6,749.6)		$6,709.1		$27.2		$6,736.3

	Six Months Ended June 30, 2021 and 2020
(millions, except per share amounts)	Common Stock		Additional Paid-in Capital		Retained Earnings		OCI (Loss)		Treasury Stock		Ecolab Shareholders' Equity		Non-Controlling Interest		Total Equity
Balance, December 31, 2019		$359.6		$5,907.1		$9,993.7		($2,089.7)		($5,485.4)		$8,685.3		$40.5		$8,725.8

New accounting guidance adoption (b)						(4.3)						(4.3)				(4.3)
Net (loss) income						(1,751.6)						(1,751.6)		11.9		(1,739.7)
Other comprehensive income (loss) activity								100.0				100.0		0.2		100.2
Cash dividends declared (a)						(270.0)						(270.0)		(11.7)		(281.7)
Separation of ChampionX				(8.5)						(1,051.4)		(1,059.9)		3.4		(1,056.5)
Changes in noncontrolling interests				17.6								17.6		(9.3)		8.3
Stock options and awards		2.4		238.8						1.6		242.8				242.8
Reacquired shares										(104.7)		(104.7)				(104.7)
Balance, June 30, 2020		$362.0		$6,155.0		$7,967.8		($1,989.7)		($6,639.9)		$5,855.2		$35.0		$5,890.2

Balance, December 31, 2020		$362.6		$6,235.0		$8,243.0		($1,994.4)		($6,679.7)		$6,166.5		$35.0		$6,201.5

Net income						504.4						504.4		5.7		510.1
Other comprehensive income (loss) activity								283.8				283.8		(1.4)		282.4
Cash dividends declared (a)						(274.6)						(274.6)		(12.1)		(286.7)
Stock options and awards		0.6		98.3						0.7		99.6				99.6
Reacquired shares										(70.6)		(70.6)				(70.6)
Balance, June 30, 2021		$363.2		$6,333.3		$8,472.8		($1,710.6)		($6,749.6)		$6,709.1		$27.2		$6,736.3

(a)

Dividends declared per common share were $0.48 and $0.47 in the second quarter of 2021 and 2020, respectively, and $0.96 and $0.94 in the first six months of 2021 and 2020, respectively.

(b)

Upon adoption of ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, the Company reclassified the cumulative effect of applying the standard to retained earnings at the beginning of the period adopted.

The accompanying notes are an integral part of the consolidated financial statements.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. CONSOLIDATED FINANCIAL INFORMATION

The unaudited consolidated financial information for the ~~third~~second quarter ended June 30, 2021 and ~~nine months ended September 30, 2017 and 2016 reflect,~~2020 reflects, in the opinion of ~~company~~ management, all adjustments necessary for a fair statement of the financial position, results of operations, comprehensive income (loss), equity and cash flows of Ecolab Inc. ("Ecolab" or "the Company") for the interim periods presented. Any adjustments consist of normal recurring items.

In March 2020, coronavirus 2019 (“COVID-19”) was declared a pandemic by the World Health Organization. As the impact of the pandemic continues to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require judgment. These estimates and assumptions may change in future periods and will be recognized in the consolidated financial information as new events occur and additional information becomes known. To the extent actual results differ materially from those estimates and assumptions, the Company’s future financial statements could be affected.

On June 3, 2020, the Company completed the separation of its Upstream Energy business (the “ChampionX business”) in a Reverse Morris Trust transaction (the “Transaction”) through the split-off of ChampionX Holding Inc. (“ChampionX”), formed by Ecolab as a wholly owned subsidiary to hold the ChampionX Business, followed immediately by the merger (the “Merger”) of ChampionX with a wholly owned subsidiary of ChampionX Corporation (f/k/a Apergy Corporation, “Apergy”).

As discussed in Note 4 Discontinued Operations, during 2020, the ChampionX business met the criteria to be reported as discontinued operations because the separation of the ChampionX business was a strategic shift in business that had a major effect on the Company's operations and financial results. Therefore, the Company reported the historical results of ChampionX, including the results of operations, cash flows, and related assets and liabilities, as discontinued operations. Unless otherwise noted, the accompanying Notes to the Consolidated Financial Statements have all been revised to reflect the effect of the separation of ChampionX and all prior year balances have been revised accordingly to reflect continuing operations only.

Subsequent to the separation of ChampionX, effective the second quarter of 2020, the Company no longer reports the Upstream Energy segment, which previously held the ChampionX business. The Company is aligned into 3 reportable segments and Other.

Except for the changes due to adoption of the new accounting standards, the Company has consistently applied the accounting policies to all periods presented in these consolidated financial statements.

The financial results for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet data as of December 31, ~~2016~~2020 was derived from the audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited consolidated financial information should be read in conjunction with the consolidated financial statements and notes thereto incorporated in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020 filed with the Securities and Exchange Commission (“SEC”) on February 26, 2021.

During the first quarter of 2017, the Company adopted the accounting guidance issued in March 2016 that amends certain aspects of share-based compensation for employees, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classifications on the Consolidated Statement of Cash Flows. Under the new guidance, all excess tax benefits or deficiencies are to be recognized prospectively as discrete income tax items on the Consolidated Statement of Income, while previous guidance required realized excess tax benefits or deficiencies to be recognized in additional paid-in capital. The Company recorded $2.4 million and $29.2 million of excess tax benefits during the third quarter and first nine months of 2017, respectively. The extent of excess tax benefits is subject to variation in stock price and stock option exercises. Adoption of the accounting standard also eliminated the requirement that excess tax benefits be realized before they can be recognized, and as a result, the Company recorded a $1.9 million cumulative-effect adjustment for previously unrecognized excess tax benefits.

The Company’s adoption also resulted in associated excess tax benefits being classified as an operating activity in the statement of cash flows prospectively beginning January 1, 2017 with no changes to the prior year. Based on the adoption methodology applied, employee taxes paid remain classified as a financing activity on the statement of cash flows, and the statement of cash flows classification of prior periods has not changed. With regards to forfeitures, the new guidance allows companies either to continue to estimate the number of awards that will be forfeited or to account for forfeitures as they occur. The Company has elected to continue to estimate the number of awards that will be forfeited based on an estimate of the number of outstanding awards expected to vest.

With respect to the unaudited financial information of the Company for the ~~third~~second quarter ended June 30, 2021 and ~~nine months ended September 30, 2017 and 2016~~2020 included in this Form 10-Q, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. Their separate report dated ~~November 2, 2017~~August 5, 2021 appearing herein states that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933, as amended (the "Act"), for their report on the unaudited financial information because that report is not a "report" or a "part" of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act.

2. SPECIAL (GAINS) AND CHARGES

Special (gains) and charges reported on the Consolidated ~~Statement~~Statements of Income include the following:



	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									Second Quarter Ended				Six Months Ended
									June 30				June 30
(millions)	2017		2016		2017		2016		2021		2020		2021		2020
Cost of sales
Restructuring activities		$-		$-		$2.2		$0.9		$3.7		$2.6		$21.9		$5.6
Acquisition and integration costs		0.3		-		12.9		-
Energy related charges		-		-		-		51.0
Acquisition and integration activities										-		2.2		-		2.6
COVID-19 activities, net										-		6.9		1.1		6.9
Other		-		-		11.1		10.0		-		15.3		0.3		21.0
Subtotal		0.3		-		26.2		61.9

Cost of sales subtotal										3.7		27.0		23.3		36.1

Special (gains) and charges
Restructuring activities		4.1		(7.7)		34.6		(6.8)		2.5		0.3		6.1		4.5
Acquisition and integration costs		1.8		1.7		12.7		5.0
Energy related charges		-		-		-		12.6
Venezuela related gain		(3.2)		-		(8.5)		(7.8)
Acquisition and integration activities										1.3		(2.6)		2.5		2.8
Disposal and impairment activities										-		44.7		-		45.9
COVID-19 activities, net										8.3		10.2		14.7		10.2
Other		2.2		9.2		9.1		32.7		5.5		16.8		7.1		21.9
Subtotal		4.9		3.2		47.9		35.7

Special (gains) and charges subtotal										17.6		69.4		30.4		85.3

Operating income subtotal										21.3		96.4		53.7		121.4

Interest expense, net										-		0.7		-		0.7
Other expense (income)										19.6		-		19.6		-

Total special (gains) and charges		$5.2		$3.2		$74.1		$97.6		$40.9		$97.1		$73.3		$122.1

For segment reporting purposes, special (gains) and charges are not allocated to reportable segments, which is consistent with the Company’s internal management reporting.

Restructuring activities

~~The Company’s restructuring~~Restructuring activities are ~~associated with plans~~primarily related to ~~enhance its efficiency~~the Institutional Advancement Program and ~~effectiveness and sharpen its competitiveness.~~Accelerate 2020, both of which are described below. Restructuring plans include net costs associated with significant actions involving employee-related severance charges, contract termination costs and asset write-downs and disposals. Employee termination costs are largely based on policies and severance plans, and include personnel reductionsactivities and related costs for severance, benefits and outplacement services. These charges are reflected in the quarter when the actions are probable and the amounts are estimable, which typically is when management approves the actions. Contract termination costs include charges to terminate leases prior to the end of their respective terms and other contract terminations. Asset write-downs and disposals include leasehold improvement write-downs, other asset write-downs associated with combining operations and disposal of assets. Restructuring activities have been included as a component of both cost of sales and special (gains) and charges on the Consolidated ~~Statement~~Statements of Income. Restructuring liabilities have been classified as a component of ~~both~~ other current and other noncurrent liabilities on the Consolidated Balance ~~Sheet.~~Sheets.

Institutional Advancement Program

The Company approved a restructuring plan in 2020 focused on the Institutional business (“the Institutional Plan”) which is intended to enhance our Institutional sales and service structure and allow the sales team to capture share and penetration while maximizing service effectiveness by leveraging our ongoing investments in digital technology. In February 2021, the Company expanded the Institutional Plan. The Company expects that these restructuring charges will be completed by 2023, with total anticipated costs of $80 million ($60 million after tax). The costs are expected to be primarily cash expenditures for severance and facility closures. The Company also anticipates non-cash costs related to equipment disposals. Actual costs may vary from these estimates depending on actions taken.

During the second quarter and first six months of ~~2017,~~2021, the Company commenced restructuring and other cost-saving actions in order to streamline its operations. These actions include a reduction of the Company’s global workforce by approximately 570 positions, as well as asset disposals and lease terminations. As a result of these actions, the Company expects to incur $40 to $45 million ($30 to $35 million after tax) of restructuring charges, the majority of which is expected to be incurred during 2017. The Company recorded restructuring charges of ~~$3.6~~$2.2 million ($~~1.3~~1.6 million after tax) and ~~$36.6~~$8.1 million ($~~26.2~~6.1 million after tax) ~~during the third quarter and first nine months of 2017,~~, respectively, ~~related~~ primarily ~~to employee termination costs. As of September 30, 2017, the restructuring liability balance~~ related to ~~these actions was $28.2 million.~~costs to support the transition to the new sales and service structure, and the disposal of equipment. The Company ~~anticipates~~has recorded $43.3 million ($32.5 million after tax) of cumulative restructuring charges under the ~~majority~~Institutional Plan. The liability related to the Institutional Plan was $11.5 million as of ~~the pretax charges will represent net cash expenditures which are~~June 30, 2021 and is expected to be paid over a period of a few months to several quarters and will continue to be funded from operating activities. ~~Cash payments during~~

Restructuring activity related to the ~~third~~Institutional Plan since inception of the underlying actions includes the following:

Employee

Termination

Asset

(millions)

Costs

Disposals

Other

Total

2020 Activity

Recorded expense and accrual

$25.6

$9.6

$35.2

Net cash payments

(0.9)

(9.6)

(10.5)

Restructuring liability, December 31, 2020

24.7

2021 Activity

Recorded expense (income) and accrual

1.3

4.5

2.3

8.1

Net cash payments

(14.7)

(2.3)

(17.0)

Non-cash net charges

(4.5)

0.2

(4.3)

Restructuring liability, June 30, 2021

$11.3

$0.2

$11.5

Accelerate 2020

During 2018, the Company formally commenced a restructuring plan Accelerate 2020 (“the Plan”), to leverage technology and system investments and organizational changes. The goals of the Plan are to simplify and automate processes and tasks, reduce complexity and management layers, consolidate facilities and focus on key long-term growth areas by further leveraging technology and structural improvements. During 2020, the Company expanded the Plan for additional costs and savings to further leverage the technology and structural improvements. The Company now expects that the restructuring activities will be completed by the end of 2022, with total anticipated costs of $255 million ($195 million after tax) when revised for continuing operations. The remaining costs are expected to be primarily cash expenditures for severance costs and some facility closure costs relating to team reorganizations. Actual costs may vary from these estimates depending on actions taken.

The Company recorded restructuring charges (gains) of ($0.3) million ($0.2 million after tax) and $1.4 million ($1.6 million after tax) in the second quarter and first ~~nine~~six months of ~~2017 were~~2021, respectively, primarily related to severance. The liability related to the Plan was $47.3 million as of the end of the second quarter of 2021. The Company has recorded $240.6 million ($185.4 million after tax) of cumulative restructuring charges under the Plan. The remaining liability is expected to be paid over a period of several quarters and will continue to be funded from operating activities.

Restructuring activity related to the Accelerate 2020 Plan since inception of the underlying actions includes the following:


	Employee
	Termination		Asset
(millions)	Costs		Disposals		Other		Total
2018-2020 Activity
Recorded expense		$212.0		$8.0		$19.2		$239.2
Net cash payments		(144.3)		1.2		(12.2)		(155.3)
Non-cash charges		-		(9.2)		(2.0)		(11.2)
Effect of foreign currency translation		(0.9)		-		-		(0.9)
Restructuring liability, December 31, 2020		66.8		-		5.0		71.8

2021 Activity
Recorded expense		1.0		-		0.4		1.4
Net cash payments		(25.3)		-		(0.6)		(25.9)
Non-cash charges		-		-		(0.1)		(0.1)
Effect of foreign currency translation		0.1		-		-		0.1
Restructuring liability, June 30, 2021		$42.6		$-		$4.7		$47.3

Other Restructuring Activities

During the second quarter and six months of 2021, the Company incurred restructuring charges of $4.3 million ($5.6 million after tax) and ~~$4.9~~$18.5 million ~~respectively.~~

~~Net~~($16.4 million after tax), respectively, related to other immaterial restructuring activity. The charges are primarily related to severance and asset write-offs. During the second quarters and first six months of 2021 and 2020, net restructuring charges related to ~~the Company’s Energy and Combined restructuring~~prior year plans ~~during 2017~~ were minimal during the third quarter and first nine months of 2017. During the third quarter and first nine months of 2016, net restructuring activities included net restructuring gains of $7.7 million ($7.2 million after tax) and $5.9 million ($7.3 million after tax), respectively.minimal. The restructuring liability balance ~~was $23.1~~for all plans other than the Accelerate 2020 and Institutional Plan were $16.8 million and ~~$39.6~~$5.9 million as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively. The ~~reduction~~increase in liability was driven primarily by severance ~~and other cash payments.~~accruals. The remaining ~~accrual~~liability is expected to be paid over a period of a few months to several quarters and ~~continues~~will continue to be funded from operating activities.

Cash payments during 2021 related to all other restructuring plans excluding the Accelerate 2020 and Institutional Plan were $1.1 million.

Acquisition and integration related costs

Acquisition and integration costs reported in cost of sales on the Consolidated Statement of Income include $0.3 million ($0.2 million after tax) in the third quarter of 2017 related to disposal of excess inventory and $12.9 million ($8.2 million after tax) during the first nine months of 2017 related primarily to recognition of accelerated rent expense upon the closure of Swisher Hygiene Inc. (“Swisher”) plants and disposal of excess inventory. The first nine months of 2017 also include amounts related to recognition of fair value step-up in the Laboratoires Anios (“Anios”) inventory.

Acquisition and integration costs reported in special (gains) and charges on the Consolidated ~~Statement~~Statements of Income include $1.8 million ($1.2 million after tax) and $12.7 million ($8.5 million after tax) of acquisition costs, advisory and legal fees, and integration charges for the Anios and Swisher acquisitions during the third quarter and first nine months of 2017, respectively.

~~During the third quarter and first nine months of 2016, the Company incurred acquisition and integration charges of $1.7~~$1.3 million ($1.0 million after tax) and ~~$5.0~~$2.5 million ($~~3.1~~2.1 million after tax) in the second quarter and first six months of 2021, respectively. Charges are related to Copal Invest NV, including its primary operating entity CID Lines (collectively, “CID Lines”), and Bioquell PLC (“Bioquell”) acquisitions and consist of integration costs, advisory and legal fees.

Acquisition and integration costs reported in special (gains) and charges on the Consolidated Statements of Income include ($2.6) million ($1.7 million after tax) and $2.8 million ($2.1 million after tax) in the second quarter and first six months of 2020, respectively. Charges are related to CID Lines, Bioquell and the Laboratoires Anios (“Anios”) acquisitions and consist of integration costs, advisory and legal fees. Acquisition and integration costs reported in product and equipment cost of sales of $2.2 million ($1.7 million after tax) and $2.6 million ($1.9 million after tax) on the Consolidated Statements of Income in the second quarter and first six months of 2020, respectively, related to the recognition of fair value step-up in the CID Lines inventory, severance and the closure of a facility. The Company also incurred $0.7 million ($0.5 million after tax) of interest expense in the second quarter of 2020.

Further information related to the Company’s acquisitions is included in Note 3.

~~Energy related~~Disposal and impairment charges

~~Oil industry activity remained depressed during 2016 when compared with 2014 levels, resulting from excess oil supply pressures, which have negatively impacted exploration~~Disposal and ~~production investments~~impairment charges reported in special (gains) and charges on the Consolidated Statements of Income include $44.7 million ($44.1 million after tax) and $45.9 million ($45.0 million after tax) in the ~~energy industry, particularly in North America. As a result~~second quarter and first six months of ~~these conditions and their corresponding impact on~~2020, respectively. During the ~~Company’s business outlook,~~second quarter of 2020, the Company recorded ~~total charges of $63.6~~a $28.6 million ($~~42.9~~28.6 million after tax) impairment for a minority equity method investment due to the impact of the economic environment and the liquidity of the minority equity method investment. In addition, the Company recorded charges of $16.1 million ($15.5 million after tax) related to transaction fees associated with the sale of Holchem Group Limited (“Holchem”).

Further information related to the Company’s disposal is included in Note 3.

COVID-19 activities

The Company recorded charges of $4.1 million and $26.5 million during the second quarter of 2021 and 2020, respectively, and $10.0 million and $26.5 million during the first ~~nine~~six months of ~~2016, comprised~~2021 and 2020, respectively, to protect the wages for certain employees directly impacted by the COVID-19 pandemic. The Company also recorded charges during the second quarter and first six months of ~~inventory write downs~~2021 of $4.9 million and $8.4 million, respectively, related to COVID-19 testing and related ~~disposal costs, fixed asset charges, headcount reductions~~expenses. In addition, the Company received subsidies and ~~other charges. No such charges~~government assistance, which were ~~incurred in 2017.~~

~~The inventory write-downs~~recorded as a special (gain) of ($0.7) million and ~~related disposal costs of $31.1~~($9.4) million ~~include adjustments due to~~during the significant decline in activity and related prices of certain specific-use and other products, coupled with declines in replacement costs, as well as estimated costs to dispose the respective excess inventory. The fixed asset charges of $18.2 million resulted from the write-down of certain assets related to the reduction in certain aspects of the Company’s North American Global Energy segment, as well as abandonment of certain projects under construction. The carrying value of the corresponding fixed assets was reduced to zero. The employee termination costs of $12.8 million include a reduction in the Global Energy segment’s global workforce to better align its workforce with anticipated activity levels in the near term. As of the end of the thirdsecond quarter of ~~2017,~~2021 and 2020, respectively, and ($2.6) million and ($9.4) million during the ~~Company had $3.2 million~~first six months of ~~corresponding severance remaining to be paid, which is expected to be paid~~2021 and 2020, respectively. COVID-19 pandemic charges are recorded in ~~the next several months~~product and ~~be funded from operating activities.~~

~~The charges discussed above have been included as a component~~equipment cost of ~~both~~sales, service and lease cost of sales, and special (gains) and charges on the Consolidated ~~Statement~~Statements of Income.

~~Venezuela~~ After tax net charges related ~~gain~~

~~Effective as of~~to the ~~end of~~COVID-19 pandemic were $6.4 million and $13.2 million during the ~~fourth~~second quarter of ~~2015,~~2021 and 2020, respectively, and $11.3 million and $13.2 million during the ~~Company deconsolidated its Venezuelan subsidiaries. The Company~~first six months of 2021 and 2020, respectively.

Other

Other special charges recorded ~~gains due to U.S. dollar cash recoveries~~in the first six months of ~~intercompany receivables written off at the time~~2021 in product and equipment cost of ~~deconsolidation of $3.2~~sales were $0.3 million ($~~2.0~~0.2 million after tax) ~~during~~. During the ~~third~~second quarter and first six months of ~~2017 and $8.5~~2020, the Company recorded special charges of $15.3 million ($~~5.3~~10.5 million after tax) ~~during~~and $21.0 million (14.3 million after tax), respectively, in product and equipment cost of sales on the ~~first nine months~~Consolidated Statements of ~~2017. In 2016, the Company recorded no such gains during the third quarter and $7.8~~Income related to a Healthcare product recall in Europe.

Other special charges of $5.5 million ($~~4.9~~4.4 million after tax) ~~during the first nine months.~~

~~Other~~

~~During the third quarter of 2017, the Company recorded charges of $2.2~~and $7.1 million ($~~1.4~~5.6 million after tax) ~~related to litigation. During~~recorded in the second quarter and first ~~nine~~six months of ~~2017,~~2021, respectively, relate primarily to legal reserve and certain legal charges and tax consulting fees associated with the ~~Company recorded~~ChampionX separation.

Other special charges of ~~$20.2~~$16.8 million ($~~15.9~~12.6 million after tax) ~~related~~and $21.9 million ($16.5 million after tax), respectively, recorded in the second quarter and first six months of 2020 relate primarily to ~~litigation~~legal reserve and ~~a Global Energy vendor contract termination. These~~certain legal charges ~~have been included as a component of both cost of sales and~~which are recorded in special (gains) and charges on the Consolidated ~~Statement~~Statements of Income.

Other expense (income)

During the second quarter and first ~~nine~~six months of ~~2016,~~2021, the Company incurred settlement expense recorded ~~a charge~~in other expense (income) on the Consolidated Statements of ~~$10.0~~Income of $19.6 million ($~~6.3~~14.9 million after tax) related to ~~a fixed asset impairment and related inventory charges. The fixed asset impairment corresponds~~U.S. pension plan lump-sum payments to additional charges of certain U.S. production equipment and buildings, resulting from further lower production, initially impaired during the fourth quarter of 2015. This charge has been included as a component of cost of sales on the Consolidated Statement of Income. There were no such charges in the third quarter of 2016.

Additionally, during the third quarter and first nine months of 2016, the Company recorded charges of $9.2 million ($5.6 million after tax) and $32.7 million ($20.7 million after tax), respectively, primarily consisting of litigation related charges. These charges have been included as a component of special (gains) and charges on the Consolidated Statement of Income.

retirees.

810

3. ACQUISITIONS AND DISPOSITIONS

Acquisitions

The Company makes business acquisitions that align with its strategic business objectives. The assets and liabilities of ~~the~~ acquired ~~entities have been~~businesses are recorded ~~as of the acquisition date, at their respective fair values, and are included~~ in the Consolidated Balance ~~Sheet and results~~Sheets at fair value as of ~~the Company from the date of acquisition.~~their acquisition dates. The purchase price allocation is based on estimates of the fair value of assets acquired, liabilities assumed and ~~liabilities assumed. The aggregate purchase price~~consideration transferred. Purchase consideration transferred is reduced by the amount of ~~acquisitions has been reduced for any~~ cash or cash equivalents ~~acquired with~~acquired.

There were 0 acquisitions during the ~~acquisition.~~second quarter of 2021. Acquisitions during the first ~~nine~~six months of ~~2017~~2021 and ~~2016~~2020 were not ~~material~~significant to the Company’s consolidated financial statements; therefore, pro forma financial information is not presented.

~~Anios Acquisition~~

~~On February 1, 2017,~~During the first quarter of 2021, the Company acquired ~~Anios for total consideration of $798.3 million, including satisfaction of outstanding debt. Anios is a leading European manufacturer~~VanBaerle Hygiene AG (“VanBaerle”), an institutional business which sells cleaning products and ~~marketer of hygiene~~related services to restaurants, long-term care facilities, hotels and disinfection products for the healthcare, food service, and food and beverage processing industries. Anios provides an innovative product line that expands the solutions the Company is able to offer while also providing a complementary geographic footprint within the healthcare market. With pre-acquisition annual sales of approximately $245 million, the acquired businesslaundries. VanBaerle became part of the ~~Company’s~~ Global Institutional ~~reportable segment~~reporting segment. The purchase price included immaterial amounts of holdback and contingent consideration, which are recorded within other liabilities on the Consolidated Balance Sheets as of June 30, 2021.

Also, during the first quarter of ~~2017. During 2016,~~2021, the Company ~~deposited €50 million in an escrow account that was released back~~acquired TechTex Holdings Limited (“TechTex”), a healthcare business which sells wet and dry wipes and other nonwovens products to the ~~Company upon closing~~Life Sciences and Healthcare industries. TechTex became part of the ~~transaction in February 2017. As shown within Note 4, this was~~Global Healthcare and Life Sciences reporting segment. The purchase price included an immaterial holdback that is recorded ~~as restricted cash~~ within other ~~assets~~liabilities on the Consolidated Balance ~~Sheet~~Sheets as of ~~December 31, 2016.~~June 30, 2021.

The purchase accounting for these acquisitions are preliminary and subject to change as the Company finalizes the valuation of intangible assets, income tax balances and working capital adjustments. The Company does not expect any of the goodwill related to its acquisitions of VanBaerle or TechTex to be tax deductible.

The following table summarizes the acquisition date fair value of net assets acquired from the Company’s acquisitions other than CID Lines during the first six months of 2021 and 2020.


	Second Quarter Ended				Six Months Ended
	June 30				June 30
(millions)	2021		2020		2021		2020
Net tangible assets (liabilities) acquired and equity method investments		$-		$-		($2.4)		$-

Identifiable intangible assets
Customer relationships		-		-		31.1		-
Trademarks		-		-		3.6		-
Other technology		-		-		1.5		-
Total intangible assets		-		-		36.2		-

Goodwill		-		-		59.0		-
Total aggregate purchase price		-		-		92.8		-

Acquisition-related liabilities and contingent consideration (a)		-		-		(4.4)		-
Net cash paid for acquisitions, including acquisition-related
liabilities and contingent consideration		$-		$-		$88.4		$-

(a)

Subsequent to the acquisitions, $1.4 in contingent consideration was remitted to the seller during the first six months of 2021 and is included in investing activities on the Consolidated Statements of Cash Flows.

During the first six months of 2020, the Company made $2.5 million of acquisition-related payments associated with prior transactions closed during 2019. The payments primarily consist of the release of holdback liabilities and payment of contingent consideration.

The weighted average useful life of identifiable intangible assets acquired during the first six months of 2021 was 13 years.

CID Lines Acquisition

On May 11, 2020, the Company acquired CID Lines for total consideration of $506.9 million in cash. CID Lines had annualized pre-acquisition sales of approximately $110 million and is a leading global provider of livestock biosecurity and hygiene solutions based in Belgium.

The Company incurred certain acquisition and integration costs associated with the transaction that were expensed and are reflected inon the Consolidated ~~Statement~~Statements of Income. ~~See Note 2 for additional~~Further information related to the Company’s special ~~gains~~(gains) and charges ~~related to such activities.~~is included in Note 2.

The Anios acquisition has been accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized at fair value as of the acquisition date. Certain estimated values are not yet finalized and are subject to change. Amounts for certain deferred tax assets and liabilities, environmental reserves, certain tangible and intangible assets, income tax uncertainties, and goodwill remain subject to change, as information necessary to complete the analysis is obtained. The Company expects to finalize these by the filing of the 2017 Form 10-K.

The following table summarizes the ~~preliminary~~acquisition date fair value of ~~Anios~~net assets acquired ~~and liabilities assumed as~~from the Company’s acquisition of ~~the acquisition date.~~CID Lines.

(millions)

May 11, 2020

Tangible assets

$54.1

~~(millions)~~Identifiable intangible assets

~~Tangible assets~~Customer relationships

~~$142.7~~147.5

~~Identifiable intangible assets:~~Trademarks

58.6

~~Customer relationships~~Acquired technologies and product registrations

~~252.0~~47.7

~~Trademarks~~Total assets acquired

~~65.7~~307.9

~~Other technology~~

~~16.1~~

~~Total assets acquired~~Goodwill

~~476.5~~274.8

Total liabilities ~~assumed~~

~~184.7~~97.2

~~Goodwill~~

~~506.5~~

~~Total consideration transferred~~

~~798.3~~

~~Long-term debt repaid upon close~~

~~192.8~~

Net consideration transferred to sellers

$~~605.5~~485.5

~~Net tangible~~Tangible assets are primarily comprised of accounts receivable of ~~$66.2~~$30.1 million, property, plant and equipment of ~~$25.6~~$7.7 million and inventory of ~~$29.7~~$16.3 million. Liabilities primarily consist of deferred tax liabilities of $64.8 million and current liabilities of $32.4 million.

Customer relationships, trademarks, and other technology and product registrations are being amortized over weighted average lives of ~~20, 17,~~14, 14, and 1116 years, respectively.

Goodwill of ~~$506.5~~$274.8 million arising from the acquisition consists largely of the synergies and economies of scale expected through adding complementary geographies and innovative products to the ~~Company’s healthcare portfolio. The goodwill was initially assigned to the Healthcare operating segment within~~Food and Beverage industries. This acquired business became part of the Global ~~Institutional~~Industrial reportable ~~segment and will be allocated to other operating segments within the purchase accounting window.~~segment. None of the goodwill recognized is expected to be deductible for income tax purposes.

Other ~~Acquisitions~~

~~Excluding~~than CID Lines, the ~~Anios acquisition,~~Company did not close on any other business acquisitions during the first ~~nine~~six months of 2017, the Company paid $32.6 million for acquisitions, of which $18.4 million was attributed to certain identifiable intangible assets. The weighted average useful life of these identifiable intangible assets acquired was 12 years. Additionally, there were immaterial purchase price adjustments related to prior year acquisitions.2020.

During the first ~~nine~~six months of ~~2016,~~2021, the Company ~~paid $48.5 million for acquisitions,~~recorded purchase accounting adjustments that decreased goodwill recognized from the acquisition of ~~which $2.5 million~~CID Lines by $0.9 million. Purchase accounting was attributed to certain identifiable intangible assets. The weighted average useful life of these identifiable intangible assets acquired was 5 years. Additionally, there were immaterial purchase price adjustments related to prior year acquisitions.

~~Subsequent Event Activity~~

~~The Company entered into various purchase agreements which are expected to close~~finalized in the ~~fourth~~second quarter of ~~2017. None of~~2021 and no further purchase accounting adjustments will be recorded for the ~~agreements are material to the consolidated financial statements, individually or in the aggregate.~~CID Lines acquisition.

Dispositions

There were no0 business dispositions during the first ~~nine~~six months of ~~2017 or 2016.~~2021.

In the second quarter of 2020, the Company completed the sale of Holchem, a U.K. based supplier of hygiene and cleaning products and services for the food and beverage, foodservice and hospitality industries for total consideration of $106.6 million. Consideration consisted of $55.4 million of cash and $51.2 million in notes receivable recorded at fair value. After the recognition of transaction costs, the Company recognized an after-tax loss of $16.3 million, which is classified within special (gains) and charges on the Consolidated Statements of Income. Annual sales of Holchem were approximately $55 million and were included in the Global Industrial reportable segment prior to disposition. Further information related to the Company’s special (gains) and charges is included in Note 2.

As discussed in Note 4, the ChampionX separation met the criteria to be reported as discontinued operations. No other dispositions were significant to the Company’s consolidated financial statements for the first six months of 2020.

Subsequent Event ~~Activity~~

Subsequent to quarter end, the Company acquired a U.S. Healthcare business for approximately $120 million. The acquisition is not material to the Company’s consolidated financial statements.

4. DISCONTINUED OPERATIONS

On June 3, 2020, the Company effected the split-off of ChampionX through an offer to exchange (the “Exchange Offer”) all shares of ChampionX common stock owned by Ecolab for outstanding shares of Ecolab common stock. In ~~October 2017,~~the Exchange Offer, which was oversubscribed, the Company accepted approximately 5.0 million shares of Ecolab common stock in exchange for approximately 122.2 million shares of ChampionX common stock. In the Merger, each outstanding share of ChampionX common stock was converted into the right to receive 1 share of Apergy common stock, and ChampionX survived the Merger as a wholly owned subsidiary of ChampionX Corporation (f/k/a Apergy). In connection with and in accordance with the terms of the Transaction, prior to the consummation of the Exchange Offer and the Merger, ChampionX distributed $527.4 million in cash to Ecolab.

The following is a summary of the assets and liabilities transferred to ChampionX as part of the separation:



(millions)
Assets:
Cash and cash equivalent			$60.6
Current assets			810.5
Non-current assets			3,222.3
			4,093.4
Liabilities:
Current liabilities			313.0
Non-current liabilities			293.7
			606.7

Net assets distributed to ChampionX			($3,486.7)
Fair value of shares exchanged			1,051.4
Cash received from ChampionX			527.4
Consideration received less net assets			(1,907.9)

ChampionX cumulative translation adjustment ("CTA") write-off			(229.9)
Loss on separation			($2,137.8)

The Company accounted for this transaction as a sale and recognized a loss based on ChampionX net assets exceeding the effective proceeds.

The ChampionX business, as discussed in Note 1, met the criteria to be reported as discontinued operations because the separation of the ChampionX business was a strategic shift in business that had a major effect on the Company’s operations and financial results. Therefore, the results of discontinued operations for the second quarter ended June 30, 2020 include the historical results of ChampionX prior to separation.

Summarized results of the Company’s discontinued operations are as follows:


	Second Quarter Ended				Six Months Ended
	June 30				June 30
(millions)	2021		2020		2021		2020

Product and equipment sales		$-		$352.9		$-		$858.9
Service and lease sales		-		44.8		-		99.6
Net sales		-		397.7		-		958.5
Product and equipment cost of sales		-		270.5		-		621.7
Service and lease cost of sales		-		34.9		-		80.4
Cost of sales (including special charges)		-		305.4		-		702.1
Selling, general and administrative expenses		-		74.0		-		180.5
Special (gains) and charges		-		2,185.2		-		2,221.7
Operating income		-		(2,166.9)		-		(2,145.8)
Other expense (income)		-		0.1		-		0.3
Interest expense (income), net		-		0.3		-		0.2
Income before income taxes		-		(2,167.3)		-		(2,146.3)
Provision for income taxes		-		(3.1)		-		24.0
Net loss including noncontrolling interest		-		(2,164.2)		-		(2,170.3)
Net income attributable to noncontrolling interest		-		(0.3)		-		2.2
Net loss from discontinued operations, net of tax		$-		($2,163.9)		$-		($2,172.5)

Special (gains) and charges of $2,186.1 million and $2,222.7 million in the second quarter and first six months of 2020, respectively, relate to professional fees incurred to support the Transaction and restructuring charges specifically related to the ChampionX business. These charges have been included as a component of both cost of sales and special (gains) and charges in discontinued operations.

The Company also recognized discrete tax expense primarily related to friction costs associated with ChampionX separation activity of $3.2 million and $22.7 million in the second quarter and first six months of 2020, respectively, that is allocated within discontinued operations tax expense.

In connection with the Transaction, the Company entered into agreements with ChampionX and Apergy to effect the separation and to provide a framework for the relationship following the separation, which included a Separation and Distribution Agreement, an ~~agreement~~Intellectual Property Matters Agreement, an Employee Matters Agreement, a Transition Services Agreement, and a Tax Matters Agreement. Transition services primarily involve the Company providing certain services to ~~sell its Equipment Care business which subsequently closed on November 1, 2017.~~ChampionX related to general and administrative services for terms of up to 18 months following the separation. The ~~disposition is~~amounts billed for transition services provided under the above agreements were not ~~expected to be~~ material to the ~~consolidated financial statements.~~ Company’s results of operations.

The Company also entered into a Master Cross Supply and Product Transfer agreement with ChampionX to provide, receive or transfer certain products for a period up to 36 months. Sales of product to ChampionX under this agreement are recorded in product and equipment sales in the Corporate segment along with the related cost of sales, while purchases from ChampionX are recorded in inventory. Sales of product to ChampionX post-separation for the second quarter and first six months of 2021 were $34.7 million and $67.7 million, respectively, and for both the second quarter and first six months of 2020 were $12.3 million. As of June 30, 2021, we had an outstanding accounts receivable balance for sales of product to ChampionX of $25.6 million.

1014

~~4. BALANCE SHEET INFORMATION~~

September 30

December 31
(millions)

2017

2016
Accounts receivable, net

Accounts receivable

$2,606.4

$2,408.8

Allowance for doubtful accounts

(73.2)

(67.6)

Total

$2,533.2

$2,341.2

Inventories

Finished goods

$1,004.8

$860.0

Raw materials and parts

461.0

408.4

Inventories at FIFO cost

1,465.8

1,268.4

FIFO cost to LIFO cost difference

43.2

51.0

Total

$1,509.0

$1,319.4

Other current assets

Prepaid assets

$128.2

$98.3

Taxes receivable

155.9

105.0

Derivative assets

29.0

46.3

Other

50.1

41.8

Total

$363.2

$291.4

Property, plant and equipment, net

Land

$227.4

$211.0

Buildings and leasehold improvements

1,174.5

1,121.2

Machinery and equipment

2,219.3

2,035.8

Merchandising and customer equipment

2,396.6

2,199.4

Capitalized software

583.0

531.1

Construction in progress

422.0

344.1

7,022.8

6,442.6

Accumulated depreciation

(3,405.6)

(3,077.6)

Total

$3,617.2

$3,365.0

Other intangible assets, net

Intangible assets not subject to amortization

Trade names

$1,230.0

$1,230.0

Intangible assets subject to amortization

Customer relationships

$3,588.2

$3,206.1

Trademarks

378.8

303.3

Patents

459.7

446.5

Other technology

229.1

210.5

4,655.8

4,166.4

Accumulated amortization

Customer relationships

(1,356.1)

(1,148.2)

Trademarks

(144.6)

(125.2)

Patents

(179.0)

(157.3)

Other technology

(166.5)

(147.9)

(1,846.2)

(1,578.6)

Net intangible assets subject to amortization

2,809.6

2,587.8

Total

$4,039.6

$3,817.8

Other assets

Deferred income taxes

$105.3

$92.3

Pension

35.6

27.2

Derivative assets

-

21.5

Restricted cash

-

53.0

Other

290.1

291.0

Total

$431.0

$485.0

September 30

December 31
(millions)

2017

2016
Other current liabilities

Discounts and rebates

$318.3

$275.2

Dividends payable

106.9

108.0

Interest payable

70.4

37.3

Taxes payable, other than income

117.0

103.7

Derivative liabilities

86.6

24.6

Restructuring

45.7

30.5

Other

261.3

311.9

Total

$1,006.2

$891.2

Accumulated other comprehensive loss

Unrealized loss on derivative financial instruments, net of tax

$(37.6)

$(8.5)

Unrecognized pension and postretirement benefit expense, net of tax

(527.2)

(511.4)

Cumulative translation, net of tax

(999.5)

(1,193.0)

Total

$(1,564.3)

$(1,712.9)

5. BALANCE SHEETS INFORMATION



	June 30		December 31
(millions)	2021		2020
Accounts receivable, net
Accounts receivable		$2,411.1		$2,358.1
Allowance for doubtful accounts		(80.1)		(84.3)
Total		$2,331.0		$2,273.8

Inventories
Finished goods		$879.9		$789.6
Raw materials and parts		578.6		511.2
Inventories at FIFO cost		1,458.5		1,300.8
FIFO cost to LIFO cost difference		(40.0)		(15.6)
Total		$1,418.5		$1,285.2

Other current assets
Prepaid assets		$135.1		$99.1
Taxes receivable		165.1		168.6
Derivative assets		9.0		3.2
Other		26.3		27.3
Total		$335.5		$298.2

Property, plant and equipment, net
Land		$159.5		$159.7
Buildings and leasehold improvements		1,090.7		1,060.0
Machinery and equipment		1,883.3		1,830.1
Merchandising and customer equipment		2,711.0		2,691.0
Capitalized software		851.4		820.8
Construction in progress		237.0		219.8
		6,932.9		6,781.4
Accumulated depreciation		(3,855.0)		(3,656.5)
Total		$3,077.9		$3,124.9

Other intangible assets, net
Intangible assets not subject to amortization
Trade names		$1,230.0		$1,230.0
Intangible assets subject to amortization
Customer relationships		2,594.8		2,530.9
Trademarks		354.1		348.0
Patents		498.5		492.5
Other technology		241.2		240.1
		3,688.6		3,611.5
Accumulated amortization
Customer relationships		(1,414.0)		(1,319.1)
Trademarks		(168.9)		(155.0)
Patents		(259.3)		(244.6)
Other technology		(151.0)		(145.8)
		(1,993.2)		(1,864.5)
Net intangible assets subject to amortization		1,695.4		1,747.0
Total		$2,925.4		$2,977.0

Other assets
Deferred income taxes		$159.3		$163.2
Pension		44.3		33.0
Derivative asset		0.5		-
Other		275.0		279.8
Total		$479.1		$476.0



	June 30		December 31
(millions)	2021		2020
Other current liabilities
Discounts and rebates		$325.0		$304.1
Dividends payable		137.3		137.2
Interest payable		57.6		51.7
Taxes payable, other than income		142.2		151.8
Derivative liabilities		25.0		25.8
Restructuring		71.4		98.1
Contract liability		87.9		80.4
Operating lease liabilities		119.4		125.6
Other		204.7		214.2
Total		$1,170.5		$1,188.9

Accumulated other comprehensive loss
Unrealized gain (loss) on derivative financial instruments, net of tax		($19.7)		($21.1)
Unrecognized pension and postretirement benefit expense, net of tax		(795.9)		(935.2)
Cumulative translation, net of tax		(895.0)		(1,038.1)
Total		($1,710.6)		($1,994.4)

6. DEBT AND INTEREST

Short-term Debt

The following table provides the components of the Company’s short-term debt obligations as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016.~~

September 30

December 31
(millions)

2017

2016
Short-term debt

Commercial paper

$238.0

$-

Notes payable

24.2

29.9

Long-term debt, current maturities

810.8

511.4

Total

$1,073.0

$541.3

2020.

~~Line~~




	June 30		December 31
(millions)	2021		2020
Short-term debt
Notes payable		$14.7		$15.5
Long-term debt, current maturities		2.6		1.8
Total		$17.3		$17.3

Lines of Credit

As of ~~September~~June 30, ~~2017,~~2021, the Company ~~had in place~~has a $2.0 billion multi-year credit facility which expires in ~~December 2019.~~April 2026. In April 2021, the Company entered into an amended and restated revolving credit facility which extended the maturity from November 2022 to April 2026. The credit facility has been established with a diverse syndicate of banks and supports the Company’s U.S. and Euro commercial paper programs. There were no0 borrowings under the Company’s credit facility as of either ~~September~~June 30, ~~2017~~2021 or December 31, ~~2016.~~2020.

Commercial Paper

The Company’s commercial paper program is used as a ~~potential~~ source of liquidity and consists of a $2.0 billion U.S. commercial paper program and a $2.0 billion Euro commercial paper program. The maximum aggregate amount of commercial paper that may be issued by the Company under its commercial paper programs may not exceed $2.0 billion.

The Company had 0 outstanding commercial paper under its U.S. or Euro programs as of either June 30, 2021 or December 31, 2020.

Notes Payable

The Company’s notes payable consists of uncommitted credit lines with major international banks and financial institutions, primarily to support global cash pooling structures. As of ~~September~~June 30, ~~2017,~~2021 and December 31, 2020, the Company had ~~$238.0~~$14.7 million ~~(€200 million) of commercial paper~~and $15.5 million, respectively, outstanding under ~~its Euro program and no commercial paper outstanding under its U.S. program. As of December 31, 2016, the Company had no commercial paper outstanding under either program.~~these credit lines.

1216

Long-term Debt

The following table provides the components of the Company’s long-term debt obligations, including current maturities, as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016.~~

Maturity

September 30

December 31
(millions)

by Year

2017

2016
Long-term debt

Public notes (2017 principal amount)

Five year 2012 senior notes ($500 million)

2017

$499.6

$498.9

Three year 2015 senior notes ($300 million)

2018

299.5

298.9

Three year 2016 senior notes ($400 million)

2019

396.6

395.9

Five year 2015 senior notes ($300 million)

2020

298.9

298.6

Ten year 2011 senior notes ($1.25 billion)

2021

1,245.6

1,244.8

Five year 2017 senior notes ($500 million)

2022

496.0

-

Seven year 2016 senior notes ($400 million)

2023

397.4

397.0

Seven year 2016 senior notes (€575 million)

2024

676.5

608.4

Ten year 2015 senior notes (€575 million)

2025

679.5

604.3

Ten year 2016 senior notes ($750 million)

2026

742.7

742.1

Thirty year 2011 senior notes ($750 million)

2041

739.1

738.7

Thirty year 2016 senior notes ($250 million)

2046

245.9

245.9

Private notes (2017 principal amount)

Series A private placement senior notes ($250 million)

2018

248.8

248.9

Series B private placement senior notes ($250 million)

2023

249.3

249.2

Capital lease obligations

4.9

5.2

Other

75.0

80.3

Total debt

7,295.3

6,657.1

Long-term debt, current maturities

(810.8)

(511.4)

Total long-term debt

$6,484.5

$6,145.7

2020.




	Maturity	June 30		December 31
(millions)	by Year	2021		2020

Long-term debt
Public notes (2021 principal amount)
Five year 2017 senior notes ($500 million)	2022		$499.1		$498.6
Seven year 2016 senior notes ($400 million)	2023		399.2		399.0
Seven year 2016 senior notes (€575 million)	2024		699.8		682.0
Ten year 2015 senior notes (€575 million)	2025		700.5		682.9
Ten year 2016 senior notes ($750 million)	2026		745.7		745.3
Ten year 2017 senior notes ($500 million)	2027		497.4		496.0
Ten year 2020 senior notes ($750 million)	2030		764.4		765.2
Ten year 2020 senior notes ($600 million)	2031		594.7		594.4
Thirty year 2011 senior notes ($458 million)	2041		452.3		452.2
Thirty year 2016 senior notes ($250 million)	2046		246.5		246.4
Thirty year 2017 senior notes ($700 million)	2047		612.7		611.9
Thirty year 2020 senior notes ($500 million)	2050		490.2		490.1
Finance lease obligations and other			9.0		7.1
Total debt			6,711.5		6,671.1
Long-term debt, current maturities			(2.6)		(1.8)
Total long-term debt			$6,708.9		$6,669.3

Public Notes

In August 2017, the Company issued a $500 million aggregate principal five year fixed rate note with a coupon rate of 2.375%. The proceeds were used to repay a portion of the Company’s outstanding commercial paper and for general corporate purposes.

The Company’s public notes may be redeemed by the Company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium. Upon the occurrence of a change of control accompanied by a downgrade of the public notes below investment grade rating, within a specified time period, the Company would be required to offer to repurchase the public notes at a price equal to 101% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase. The public notes are senior unsecured and unsubordinated obligations of the Company and rank equally with all other senior and unsubordinated indebtedness of the Company.

~~Private Notes~~Covenants

The Company’s private notes may be redeemed by the Company at its option at redemption prices that include accrued and unpaid interest and a make-whole premium. Upon the occurrence of specified changes of control involving the Company, the Company would be required to offer to repurchase the private notes at a price equal to 100% of the aggregate principal amount thereof, plus any accrued and unpaid interest to the date of repurchase. Additionally, the Company would be required to make a similar offer to repurchase the private notes upon the occurrence of specified merger events or asset sales involving the Company, when accompanied by a downgrade of the private notes below investment grade rating, within a specified time period. The private notes are unsecured senior obligations of the Company and rank equal in right of payment with all other senior indebtedness of the Company. The private notes shall be unconditionally guaranteed by subsidiaries of the Company in certain circumstances, as described in the note purchase agreement as amended.

~~Covenants~~

The Company is in compliance with its debt covenants as of ~~September~~June 30, ~~2017.~~2021.

Net Interest Expense

Interest expense and interest income recognized during the ~~third~~second quarter and ~~the~~ first ~~nine~~six months of ~~2017~~2021 and ~~2016~~2020 were as follows:


	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									Second Quarter Ended				Six Months Ended
									June 30				June 30
(millions)	2017		2016		2017		2016		2021		2020		2021		2020
Interest expense		$60.7		$69.0		$191.0		$209.4		$51.7		$61.8		$105.5		$114.4
Interest income		(5.6)		(4.1)		(13.8)		(13.1)		(6.1)		(3.1)		(8.2)		(7.4)
Interest expense, net		$55.1		$64.9		$177.2		$196.3		$45.6		$58.7		$97.3		$107.0

Interest expense generally includes the expense associated with the interest on the Company’s outstanding borrowings. Interest expense also includes the amortization of debt issuance costs and debt discounts, which are both recognized over the term of the related debt.

6.7. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

Goodwill arises from the Company’s acquisitions and represents the excess ~~of the~~ purchase ~~price~~consideration transferred over the fair value of ~~identifiable~~acquired net ~~assets acquired in a business combination.~~assets. The Company’s reporting units are its operating segments. The Company assesses goodwill for impairment on an annual basis during the second quarter. If circumstances change or events occur that demonstrate it is more likely than not that the carrying amount of a reporting unit exceeds its fair value, the Company completes an interim goodwill assessment of that reporting unit prior to the next annual assessment. If the results of a goodwill assessment demonstrate the carrying amount of a reporting unit is greater than its fair value, the Company will recognize an impairment loss for the amount by which the reporting unit’s carrying amount exceeds its fair value, but not to exceed the carrying amount of goodwill assigned to that reporting unit.

During the second quarter of ~~2017,~~2021, the Company completed its annual goodwill impairment assessment for ~~goodwill impairment across~~each of its ~~eleven~~11 reporting units ~~through a quantitative analysis, utilizing a~~using discounted cash flow ~~approach, which incorporates~~analyses that incorporated assumptions regarding future growth rates, terminal values and discount rates. The two-step quantitative process involved comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. If the fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit is considered not to be impaired, and the second step of the impairment test is unnecessary. If the carrying amount of the reporting unit exceeds its fair value, the second step of the goodwill impairment test would be performed to measure the amount of impairment loss to be recorded, if any. The Company’s goodwill impairment ~~assessment~~assessments for ~~2017~~2021 indicated the estimated fair ~~value~~values of each of its reporting units exceeded ~~its~~the carrying ~~amount~~amounts of the respective reporting unit by a significant margin.

~~If circumstances change significantly, the Company would also test a reporting unit’s goodwill for impairment during interim periods between its annual tests.~~ There has been no0 impairment of goodwill in any of the ~~years~~periods presented.

The changes in the carrying amount of goodwill for each of the Company's reportable segments during the ~~nine months~~six-month period ended ~~September~~June 30, ~~2017~~2021 were as follows:

Global

Global

Global

(millions)

Industrial

Institutional

Energy

Other

Total

December 31, 2016

$2,522.3

$653.4

$3,093.6

$113.7

$6,383.0

Reclassifications (a)

62.7

(62.7)

-

-

-

December 31, 2016 revised

$2,585.0

$590.7

$3,093.6

$113.7

$6,383.0

Current year business combinations (b)

4.1

506.5

-

-

510.6

Prior year business combinations (c)

-

-

0.3

-

0.3

Effect of foreign currency translation

97.9

41.6

116.8

4.2

260.5

September 30, 2017

$2,687.0

$1,138.8

$3,210.7

$117.9

$7,154.4

Global

Institutional

Healthcare &

(millions)

Industrial

& Specialty

Life Sciences

Other

Total

December 31, 2020

$4,287.9

$564.1

$909.8

$245.1

$6,006.9

Current year business combinations (a)

11.1

47.9

59.0

Prior year business combinations (b)

(0.9)

Effect of foreign currency translation

68.9

7.2

27.5

3.8

107.4

June 30, 2021

$4,355.9

$582.4

$985.2

$248.9

$6,172.4

(a)

~~(a)~~

Relates to establishment of the Life Sciences reporting unit, and goodwill being allocated to Life Sciences based on fair value allocation of goodwill. The Life Sciences reporting unit is included in the Industrial reportable segment and is comprised of operations previously recorded in the Food & Beverage and Healthcare reporting units, which are aggregated and reported in the Global Industrial and Global Institutional reportable segments, respectively. See Note 14 for further information.

~~(b)~~

Represents goodwill associated with current year acquisitions. ~~Of the goodwill acquired, the Company expects $4.1 million of the goodwill related to businesses acquired to be tax deductible.~~

(b)

~~(c)~~

Represents purchase ~~price allocation~~accounting adjustments ~~for 2016 acquisitions deemed preliminary as of December 31, 2016.~~

associated with the CID Lines acquisition.

Other Intangible Assets

The Nalco trade name is the Company’s ~~principal~~only indefinite life intangible ~~asset.~~asset, which is tested for impairment on an annual basis during the second quarter. During the second quarter of ~~2017,~~2021, the Company completed its annual ~~test for indefinite life intangible asset~~ impairment assessment of the Nalco trade name using athe relief from royalty discounted cash flow method, ~~of assessment,~~ which incorporates assumptions regarding future sales projections, royalty rates and discount rates. ~~Based on this testing,~~The Company’s Nalco tradename impairment assessment for 2021 indicated the estimated fair value of the ~~asset~~Nalco trade name exceeded its $1.2 billion carrying ~~value~~amount by a significant ~~margin; therefore, no adjustment to the $1.2 billion carrying value of this asset was necessary.~~margin. There has been no0 impairment of the Nalco trade name intangible ~~asset~~ since it was acquired.

The Company’s intangible assets subject to amortization ~~primarily~~ include customer relationships, trademarks, patents and other ~~technology.~~technology primarily acquired through business acquisitions. The fair value of ~~identifiable~~ intangible assets isacquired in business acquisitions are estimated ~~based upon~~primarily using discounted ~~future~~ cash flow ~~projections and other acceptable~~ valuation ~~methods. Other intangible~~methods at the time of acquisition. Intangible assets are amortized on a straight-line basis over their estimated ~~economic~~ lives. Total amortization expense related to ~~other~~ intangible assets during the ~~third~~second quarter of ~~2017~~2021 and ~~2016~~2020 was ~~$77.6~~$52.2 million and ~~$71.9~~$50.8 million, respectively. Total amortization expense related to ~~other~~ intangible assets during the first ~~nine~~six months of ~~2017~~2021 and ~~2016~~2020 was ~~$228.5 million~~$116.7 and ~~$217.2~~$103.2 million, respectively. ~~Estimated amortization~~Amortization expense related to intangible assets for the remaining ~~three month~~six-month period of ~~2017 related to other amortizable intangible assets~~2021 is expected to be approximately ~~$84~~$111 million.

1418

7.8. FAIR VALUE MEASUREMENTS

The Company’s financial instruments include cash and cash equivalents, restricted cash, accounts receivable, accounts payable, contingent consideration obligations, commercial paper, notes payable, foreign currency forward contracts, interest rate swap agreements and long-term debt.

Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. The hierarchy is broken down into three levels:

Level 1 - Inputs are quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2 - Inputs include observable inputs other than quoted prices in active markets.

Level 3 - Inputs are unobservable inputs for which there is little or no market data available.

The carrying amount and the estimated fair value for assets and liabilities measured on a recurring basis were:


	September 30, 2017

									June 30, 2021
(millions)	Carrying		Fair Value Measurements						Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3
									Amount		Level 1		Level 2		Level 3
Assets
Foreign currency forward contracts		$52.1		$-		$52.1		$-		$29.2		$-		$29.2		$-
Interest rate swap										1.1		-		$1.1		-

Liabilities
Foreign currency forward contracts		209.2		-		209.2		-		92.3		-		92.3		-
Interest rate swap agreements		3.6		-		3.6		-


	December 31, 2020
(millions)	Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3
Assets
Foreign currency forward contracts		$15.5		$-		$15.5		$-

Liabilities
Foreign currency forward contracts		69.9		-		69.9		-

December 31, 2016

(millions)

Carrying

Fair Value Measurements


Amount

Level 1

Level 2

Level 3

Assets

Foreign currency forward contracts

$ 93.4

$ -

$ 93.4

$ -

Liabilities

Foreign currency forward contracts

46.7

-

46.7

-

Interest rate swap agreements

3.5

-

3.5

-

The carrying value of foreign currency forward contracts is at fair value, which is determined based on foreign currency exchange rates as of the balance sheet date and is classified within Level 2. The carrying value of interest rate swap contracts is at fair value, which is determined based on current ~~interest rates and~~ forward interest rates as of the balance sheet date and is classified within Level 2. For purposes of fair value disclosure above, derivative values are presented gross. ~~See further~~Further discussion of gross versus net presentation of the Company's derivatives within Note 8.9.

Contingent consideration obligations are recognized and measured at fair value at the acquisition date and thereafter until settlement or expiration. Contingent consideration is classified within Level 3 as the underlying fair value is determined using income-based valuation approaches appropriate for the terms and conditions of each respective contingent consideration. The consideration expected to be transferred is based on the Company’s expectations of various financial measures. The ultimate payment of contingent consideration could deviate from current estimates based on the actual results of these financial measures. Contingent consideration was not material to the Company’s consolidated financial statements.

The carrying values of accounts receivable, accounts payable, cash and cash equivalents, restricted cash, commercial paper and notes payable approximate fair value because of their short maturities and as such are classified within Level 1.

The fair value of long-term debt is based on quoted market prices for the same or similar debt instruments ~~classified~~(classified as Level 2.2). The carrying amount and the estimated fair value of long-term debt, including current maturities, held by the Company were:

September 30

December 31
(millions)

2017

2016

Carrying

Fair

Carrying

Fair


Amount

Value

Amount

Value
Long-term debt, including current maturities

$7,295.3

$7,707.6

$6,657.1

$6,963.9

June 30, 2021

December 31, 2020

Carrying

Fair

Carrying

Fair

Amount

Value

Amount

Value

Long-term debt, including current maturities

$6,711.5

$7,468.3

$6,671.1

$7,704.4

1519

8.9. DERIVATIVES AND HEDGING TRANSACTIONS

The Company uses foreign currency forward contracts, cross currency swap agreements, interest rate swap agreements and foreign currency debt to manage risks associated with foreign currency exchange rates, interest rates and net investments in foreign operations. The Company does not hold derivative financial instruments of a speculative nature or for trading purposes. The Company records derivatives as assets and liabilities onin the ~~balance sheet~~Consolidated Balance Sheets at fair value. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Cash flows from derivatives are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The Company evaluates hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. ~~Hedge ineffectiveness, if any, is recorded in earnings.~~

The Company is exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swap agreements. The Company monitors its exposure to credit risk by using credit approvals and credit limits and by selecting major global banks and financial institutions as counterparties. The Company does not anticipate nonperformance by any of these counterparties, and therefore, recording a valuation allowance against the Company’s derivative balance is not considered necessary.

Derivative Positions Summary

Certain of the Company’s derivative transactions are subject to master netting arrangements that allow the Company to net settle contracts with the same counterparties. These arrangements generally do not call for collateral and as of the applicable dates presented in the following table, no0 cash collateral had been received or pledged related to the underlying derivatives.

The respective net amounts are included in other current assets, other ~~non-current~~ assets, other current liabilities and other liabilities on the Consolidated Balance ~~Sheet.~~Sheets.

The following table summarizes the gross fair value and the net value of the Company’s outstanding derivatives.

Asset Derivatives

Liability Derivatives

September 30

December 31

September 30

December 31

(millions)

2017

2016

2017

2016

Derivatives designated as hedging instruments

Foreign currency forward contracts

$30.2

$73.4

$156.7

$19.8

Interest rate swap agreements

-

-

3.6

3.5

Derivatives not designated as hedging instruments

Foreign currency forward contracts

21.9

20.0

52.5

26.9

Gross value of derivatives

52.1

93.4

212.8

50.2

Gross amounts offset in the Consolidated Balance Sheet

(23.1)

(25.7)

(23.1)

(25.7)

Net value of derivatives

$29.0

$67.7

$189.7

$24.5

Derivative Assets

Derivative Liabilities

June 30

December 31

June 30

December 31

(millions)

2021

2020

2021

2020

Derivatives designated as hedging instruments

Foreign currency forward contracts

$3.2

$8.1

$68.8

$54.3

Interest rate swap agreement

1.1

Derivatives not designated as hedging instruments

Foreign currency forward contracts

26.0

7.4

23.5

15.6

Gross value of derivatives

30.3

15.5

92.3

69.9

Gross amounts offset in the Consolidated Balance Sheets

(20.8)

(12.3)

(20.8)

(12.3)

Net value of derivatives

$9.5

$3.2

$71.5

$57.6

The following table summarizes the notional values of the Company’s outstanding derivatives.


	Notional Values
	September 30		December 31

					Notional Values
						June 30	December 31
(millions)	2017		2016			2021	2020


Foreign currency forward contracts ~~(a)~~		$ 5,617		$ 4,317		$ 4,331		$ 3,702
Interest rate agreements		$ 1,450		$ 1,450
Interest rate swap agreement						250		-

~~(a)~~

~~Includes net investment hedge forward contracts of €40 million and €0 million as of September 30, 2017 and December 31, 2016, respectively.~~

1620

Cash Flow Hedges

The Company utilizes foreign currency forward contracts to hedge the effect of foreign currency exchange rate fluctuations on forecasted foreign currency transactions, including inventory purchases and intercompany royalty, management fee and other payments. These forward contracts are designated as cash flow hedges. The ~~effective portions of the~~ changes in fair value of these contracts are recorded in accumulated other comprehensive income (“AOCI”) until the hedged items affect earnings, at which time the gain or loss is reclassified into the same line item inon the Consolidated ~~Statement~~Statements of Income as the underlying exposure being hedged. Cash flow hedged transactions impacting AOCI are forecasted to occur within the next ~~five~~three years.

~~The Company occasionally enters into treasury lock and~~ For forward ~~starting interest~~contracts designated as hedges of foreign currency exchange rate ~~swap agreements to manage interest rate exposure. During 2016, 2015, and 2014~~risk associated with forecasted foreign currency transactions, the Company ~~entered into and subsequently closed a series~~excludes the changes in fair value attributable to time value from the assessment of ~~treasury lock and forward starting interest rate swap agreements, in conjunction with its public debt issuances.~~hedge effectiveness. The ~~agreements were designated and effective as cash flow hedges~~initial value of the ~~expected interest payments related to~~excluded component (i.e., the ~~anticipated future debt issuances. Amounts recorded in AOCI are recognized as part of interest expense~~forward points) is amortized on a straight-line basis over the ~~remaining~~ life of the ~~notes~~hedging instrument and recognized in the same line item on the Consolidated Statements of Income as the ~~forecasted interest transactions occur.~~

~~The effective portion of gains and losses recognized into AOCI and earnings from derivative contracts that qualified as~~underlying exposure being hedged for intercompany loans. For all other cash flow ~~hedges was as follows:~~

Third Quarter Ended

Nine Months Ended

September 30

September 30

(millions)

2017

2016

2017

2016

Unrealized gain (loss) recognized into AOCI

Foreign currency forward contracts

AOCI (equity)

$(118.8)

$(12.9)

$(192.4)

$(40.4)

Interest rate swap agreements

AOCI (equity)

-

1.4

-

(11.5)

Total

(118.8)

(11.5)

(192.4)

(51.9)

Gain (loss) recognized in income

Foreign currency forward contracts

Cost of sales

(0.9)

5.0

(11.7)

26.6

SG&A

(99.5)

(0.7)

(157.3)

(20.3)

Interest expense, net

7.4

-

16.1

2.9

Subtotal

(93.0)

4.3

(152.9)

9.2

Interest rate swap agreements

Interest expense, net

(1.8)

(1.6)

(5.4)

(4.8)

Total

$(94.8)

$2.7

$(158.3)

$4.4

~~Gains~~hedge types, the forward points are marked-to-market monthly and ~~losses~~ recognized in ~~income related to~~ the ~~ineffective portion~~same line item on the Consolidated Statements of Income as the underlying exposure being hedged. The difference between fair value changes of the ~~Company’s cash flow hedges were insignificant during~~excluded component and the ~~first nine months~~amount amortized on the Consolidated Statements of ~~2017 and 2016.~~Income is recorded in AOCI.

Fair Value Hedges

The Company manages interest expense using a mix of fixed and floating rate debt. To help manage exposure to interest rate movements and to reduce borrowing costs, the Company may enter into interest rate swaps under which the Company agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed upon notional principal amount. The mark-to-market of these fair value hedges is ~~recorded as gains or losses in interest expense and is~~ offset ~~by the gain or loss of~~against the underlying debt ~~instrument, which also is recorded in interest expense.~~instrument. These fair value hedges are highly ~~effective and thus, there is no impact on earnings due to hedge ineffectiveness.~~effective.

In ~~January 2016,~~March 2021, the Company entered into an interest rate swap agreement that converted $250 million of its ~~$400 million 2.00%~~3.25% debt from a fixed interest rate to a floating interest rate. ~~In January 2015, the Company entered into~~The interest rate swap agreements that converted its $300 million 1.55% debt and its $250 million 3.69% debt from fixed interest rates to floating interest rates. In May 2014, the Company entered into an interest rate swap agreement that converted its $500 million 1.45% debt from a fixed rate to a floating interest rate.

~~The interest rate swaps referenced above were~~is designated as a fair value ~~hedges.~~hedge.

The ~~impact on earnings from derivative contracts that qualified as~~following amounts were recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value ~~hedges was as follows:~~hedges:

Third Quarter Ended

Nine Months Ended

September 30

September 30

(millions)



2017

2016

2017

2016

Gain (loss) on derivative recognized income

Interest rate swap

Interest expense, net

$0.3

$(7.6)

$(0.1)

$6.1

Gain (loss) on hedged item recognized income

Interest rate swap

Interest expense, net

$(0.3)

$7.6

$0.1

$(6.1)

Carrying amount of the hedged liabilities

Cumulative amount of the fair value hedging adjustment included in the carrying amount of the hedged liabilities

Second Quarter Ended

Line item in which the hedged item is included

June 30

(millions)

2021

2020

2021

2020

Long-term debt

$249.2

$1.1

Net Investment Hedges

The Company designates its outstanding €1,150 million ($~~1,356~~1,400 million at the end of the ~~third~~second quarter of ~~2017)~~2021) senior notes (“~~euronotes”~~Euronotes”) ~~and €200 million ($238 million at the end of the third quarter of 2017) Euro commercial paper~~ and related accrued interest as hedges of ~~existing foreign currency~~its Euro denominated exposures ~~related to~~from the Company’s investments ~~the Company has~~ in certain ~~euro~~of its Euro denominated functional currency subsidiaries.

The revaluation gains and losses on the ~~euronotes and Euro commercial paper,~~Euronotes, which are designated and effective as hedges of the Company’s net investments, have been included as a component of the cumulative translation adjustment account, and were as follows:


	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									Second Quarter Ended				Six Months Ended
									June 30				June 30
(millions)	2017		2016		2017		2016		2021		2020		2021		2020
Revaluation gains (losses), net of tax		$(50.9)		$(1.2)		$(103.7)		$(29.1)
Revaluation losses, net of tax										($14.2)		($2.9)		($26.4)		($4.0)

Derivatives Not Designated as Hedging Instruments

The Company also uses foreign currency forward contracts to offset its exposure to the change in value of certain foreign currency denominated assets and liabilities held at foreign subsidiaries, primarily receivables and payables, which are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Therefore, changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities.

Effect of all Derivative Instruments on Income

The ~~impact on earnings~~gain (loss) of all derivative instruments recognized in product and equipment cost of sales (“COS”), selling, general and administrative expenses (“SG&A”) and interest expense, net (“interest”) is summarized below:


	Second Quarter Ended
	June 30
	2021				2020
(millions)		COS	SG&A	Interest		COS	SG&A	Interest
Gain (loss) on derivatives in cash flow hedging relationship:
Foreign currency forward contracts
Amount of gain (loss) reclassified from AOCI to income		($3.6)	($20.2)	$-		$3.8	($6.2)	$-
Amount excluded from the assessment of effectiveness recognized in earnings based on changes in fair value		-	-	5.7		-	-	8.1
Interest rate swap agreements
Amount of gain (loss) reclassified from AOCI to income		-	-	(0.6)		-	-	(0.3)

Gain (loss) on derivatives not designated as hedging instruments:
Foreign currency forward contracts
Amount of gain (loss) recognized in income (a)		-	4.5	-		-	0.7	(1.2)
Total gain (loss) of all derivative instruments		($3.6)	($15.7)	$5.1		$3.8	($5.5)	$6.6

	Six Months Ended
	June 30
	2021				2020
(millions)		COS	SG&A	Interest		COS	SG&A	Interest
Gain (loss) on derivatives in cash flow hedging relationship:
Foreign currency forward contracts
Amount of gain (loss) reclassified from AOCI to income		($4.6)	($37.4)	$-		$6.0	($7.3)	$-
Amount excluded from the assessment of effectiveness recognized in earnings based on changes in fair value		-	-	11.3		-	-	13.5
Interest rate swap agreements
Amount of gain (loss) reclassified from AOCI to income		-	-	(1.2)		-	-	(0.5)

Gain (loss) on derivatives not designated as hedging instruments:
Foreign currency forward contracts
Amount of gain (loss) recognized in income (a)		-	5.8	-		-	17.9	-
Total gain (loss) of all derivative instruments		($4.6)	($31.6)	$10.1		$6.0	$10.6	$13.0

(a)

Gain (loss) on derivatives not designated as hedging instruments recognized in income recorded in SG&A includes discontinued operations of ($2.2) and ($2.5) in the second quarter and first six months of 2020, respectively.

Subsequent Events

In July 2021, the Company entered into an interest rate swap agreement that converted the remaining $250 million of its 3.25% debt from ~~derivative contracts that are not~~a fixed interest rate to a floating interest rate. The interest rate swap is designated as ~~hedging instruments was as follows:~~a fair value hedge.

Third Quarter Ended

Nine Months Ended

September 30

September 30
(millions)



2017

2016

2017

2016

Gain (loss) recognized in income

Foreign currency forward contracts

SG&A

$(29.4)

$(12.0)

$(38.1)

$(27.3)

Interest expense, net

(0.2)

1.0

(3.5)

(2.1)

Total

$(29.6)

$(11.0)

$(41.6)

$(29.4)

Also in July 2021, the Company entered into a cross currency swap agreement with a notional amount of €300 million maturing in 2030. The ~~amounts recognized in SG&A above offset the earnings impact of the related foreign~~cross currency denominated assets and liabilities. The amounts recognized in interest expense above represent the component of the hedging gains (losses) attributable to the difference between the spot and forward rates of the hedgesswap is designated as a ~~result~~net investment hedge of ~~interest rate differentials. The losses recognized~~its Euro denominated exposures from the Company’s investments in ~~2017 primarily relate to movements in the~~certain of its Euro ~~rates.~~denominated functional currency subsidiaries.

1822

9.10. OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION

Other comprehensive income (loss) includes net income, foreign currency translation adjustments, ~~unrecognized gains and losses on securities,~~ defined benefit pension and postretirement plan adjustments, gains and losses on derivative instruments designated and effective as cash flow hedges and non-derivative instruments designated and effective as foreign currency net investment hedges that are charged or credited to the accumulated other comprehensive loss account in shareholders’ equity.

The following tables provide other comprehensive income information related to the Company’s derivatives and hedging instruments and pension and postretirement benefits. ~~See~~Refer to Note 89 for additional information related to the Company’s derivatives and hedging transactions. ~~See~~Refer to Note 1314 for additional information related to the Company’s pension and postretirement benefits activity.


	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									Second Quarter Ended				Six Months Ended
									June 30				June 30
(millions)	2017		2016		2017		2016		2021		2020		2021		2020
Derivative and Hedging Instruments
Unrealized gains (losses) on derivative & hedging instruments
Unrealized (losses) gains on derivative & hedging instruments
Amount recognized in AOCI		$(118.8)		$(11.5)		$(192.4)		$(51.9)		($18.7)		$8.1		($30.9)		$17.9
(Gains) losses reclassified from AOCI into income
Cost of sales		0.9		(5.0)		11.7		(26.6)
Losses (gains) reclassified from AOCI into income
COS										3.6		(3.8)		4.6		(6.0)
SG&A		99.5		0.7		157.3		20.3		20.2		6.2		37.4		7.3
Interest (income) expense, net		(5.6)		1.6		(10.7)		1.9		(5.1)		(7.8)		(10.1)		(13.0)
		94.8		(2.7)		158.3		(4.4)
										18.7		(5.4)		31.9		(11.7)
Other activity		(0.6)		0.1		(0.1)		0.1		(0.4)		-		(0.7)		-
Tax impact		3.8		4.6		5.1		16.0		1.2		(0.6)		1.1		(1.2)
Net of tax		$(20.8)		$(9.5)		$(29.1)		$(40.2)		$0.8		$2.1		$1.4		$5.0


Pension and Postretirement Benefits
Amount recognized in AOCI
Current period net actuarial gain										$145.0		$-		$145.0		$-
Amount reclassified from AOCI into income
Actuarial losses		11.3		10.8		33.3		32.6
Prior service costs		(6.1)		(2.0)		(18.1)		(6.0)
Postretirement benefits changes		-		50.0		-		50.0
		5.2		58.8		15.2		76.6
Settlement charge										19.6		-		19.6		-
Amortization of net actuarial loss and prior period service credits, net										21.7		14.6		43.5		29.4
										186.3		14.6		208.1		29.4
Other activity										(7.8)		6.6		(18.4)		8.3
Tax impact		(3.9)		(22.3)		(7.0)		(29.0)		(45.1)		(3.6)		(50.4)		(7.2)
Net of tax		$1.3		$36.5		$8.2		$47.6		$133.4		$17.6		$139.3		$30.5

The following table summarizes the derivative and pension and postretirement benefit amounts reclassified from AOCI into income.


	Third Quarter Ended				Nine Months Ended
	September 30				September 30
	2017		2016		2017		2016

									Second Quarter Ended				Six Months Ended
									June 30				June 30
									2021		2020		2021		2020
(millions)
Derivative losses (gains) reclassified from AOCI into income, net of tax		$72.7		$(2.0)		$120.3	$	(3.5)		$14.2		($4.0)		$24.2		($8.8)

Pension and postretirement benefits net actuarial losses
and prior services costs reclassified from AOCI into income, net of tax		$1.3		$5.6		$8.2	$	16.7

Pension and postretirement benefits amortization of net actuarial losses
and prior service credits and settlement charges reclassified from AOCI into income, net of tax										23.5		17.6		29.4		30.5

1923

~~10.~~11. SHAREHOLDERS’ EQUITY

Share Repurchase Authorization

In February 2015, the Company’s Board of Directors authorized the repurchase of up to 20 million shares of its common stock, including shares to be repurchased under Rule 10b5–1. As of ~~September~~June 30, ~~2017, 12,358,110~~2021, 6,008,299 shares remained to be repurchased under the Company’s repurchase authorization. The Company intends to repurchase all shares under its authorization, for which no expiration date has been established, in open market or privately negotiated transactions, subject to market conditions.

~~Accelerated Stock Repurchase (“ASR”) Agreements~~

In February 2017, the Company entered into an ASR agreement to repurchase $300 million of its common stock and received 2,077,224 shares of its common stock, which was approximately 85% of the total number of shares the Company expected to be repurchased under the ASR, based on the price of the Company’s common stock at that time. In connection with the final settlement of the ASR agreement in June 2017, the Company received an additional 286,620 shares of common stock.

In February 2016, the Company entered into an ASR agreement to repurchase $300 million of its common stock and received 2,459,490 shares of its common stock, which was approximately 85% of the total number of shares the Company expected to be repurchased under the ASR, based on the price of the Company’s common stock at that time. Upon final settlement of the ASR agreement in May 2016, the Company received an additional 232,012 shares of common stock.

The final per share purchase price and the total number of shares to be repurchased under both 2017 and 2016 ASR agreements generally were based on the volume-weighted average price of the Company’s common stock during the term of the agreements.

~~All shares acquired under the ASR agreements were recorded as treasury stock.~~

During their respective open periods in 2017 and 2016, neither of the ASRs was dilutive to the Company’s earnings per share calculations, nor did they trigger the two-class earnings per share methodology. Additionally, the unsettled portion of ASRs during their respective open periods met the criteria to be accounted for as a forward contract indexed to the Company’s stock and qualified as equity transactions.

~~The initial delivery of shares, as well as the additional receipt of shares at settlement resulted in a reduction to the Company’s common stock outstanding used to calculate earnings per share.~~

Share Repurchases

During the ~~first nine~~six months of ~~2017,~~2021, the Company reacquired ~~4,614,646~~333,690 shares of its common stock, of which ~~4,414,416~~231,647 related to share repurchases through open market ~~or private purchases, including the February 2017 ASR discussed above,~~ and ~~200,230~~102,043 related to shares withheld for taxes on the exercise of stock options and the vesting of stock awards and units.

During ~~2016,~~all of 2020, the Company reacquired ~~6,483,198~~761,245 shares of its common stock, of which ~~6,126,033~~565,064 related to share repurchases through open market or private purchases ~~including the February 2016 ASR discussed above,~~ and ~~357,165~~196,181 related to shares withheld for taxes on the exercise of stock options and the vesting of stock awards and units.

Separation of ChampionX

~~11.~~On June 3, 2020, the Company effected the split-off of ChampionX through the Exchange Offer and all shares of ChampionX common stock owned by Ecolab were exchanged for outstanding shares of Ecolab common stock. In the Exchange Offer, which was oversubscribed, the Company accepted 4,955,552 shares of Ecolab common stock in exchange for approximately 122.2 million shares of ChampionX common stock.

12. EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE (“EPS”)

The difference in the weighted average common shares outstanding for calculating basic and diluted EPS is a result of the dilution associated with the Company’s equity compensation plans. As noted in the table below, certain stock options and units outstanding under these equity compensation plans were not included in the computation of diluted EPS because they would not have had a dilutive effect.

The computations of the basic and diluted EPS amounts were as follows:



	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									Second Quarter Ended				Six Months Ended
									June 30				June 30
(millions, except per share)	2017		2016		2017		2016		2021		2020		2021		2020

Net income attributable to Ecolab		$392.4		$374.1		$942.5		$863.3


Net income from continuing operations attributable to Ecolab										$310.8		$128.9		$504.4		$420.9
Net loss from discontinued operations										-		(2,163.9)		-		(2,172.5)
Net income (loss) attributable to Ecolab										$310.8		($2,035.0)		$504.4		($1,751.6)

Weighted-average common shares outstanding
Basic		289.0		291.6		289.8		292.8		286.0		288.2		286.0		288.5
Effect of dilutive stock options and units		4.4		4.1		4.4		4.3		2.8		3.3		2.9		3.5
Diluted		293.4		295.7		294.2		297.1		288.8		291.5		288.9		292.0


Earnings (loss) attributable to Ecolab per common share
Basic EPS		$ 1.36		$ 1.28		$ 3.25		$ 2.95
Continuing operations										$ 1.09		$ 0.45		$ 1.76		$ 1.46
Discontinued operations										$ -		($ 7.51)		-		(7.53)
Earnings (loss) attributable to Ecolab										$ 1.09		($ 7.06)		$ 1.76		($ 6.07)
Diluted EPS		$ 1.34		$ 1.27		$ 3.20		$ 2.91

Anti-dilutive securities excluded from the computation of EPS		0.1		1.7		1.7		1.7
Continuing operations										$ 1.08		$ 0.44		$ 1.75		$ 1.44
Discontinued operations										$ -		($ 7.42)		-		(7.44)
Earnings (loss) attributable to Ecolab										$ 1.08		($ 6.98)		$ 1.75		($ 6.00)

Anti-dilutive securities excluded from the computation of diluted EPS										1.1		1.0		1.1		1.0

Amounts do not necessarily sum due to rounding.

The Company’s diluted EPS for 2017 was impacted by the adoption of the new accounting guidance that amends the calculation of diluted EPS for share-based payments to exclude excess tax benefits or deficiencies from assumed proceeds during application of the treasury stock method.

~~12.~~13. INCOME TAXES

The Company’s tax rate was ~~24.6%~~21.5% and ~~25.5%~~9.5% for the ~~third~~second quarter of ~~2017~~2021 and ~~2016,~~2020, respectively, and ~~21.7%~~23.0% and ~~24.7%~~12.4% for the first ~~nine~~six months of ~~2017~~2021 and ~~2016,~~2020, respectively. The change in the Company’s tax rate for the ~~third~~second quarter and first six months of ~~2017~~2021 compared to the ~~third~~second quarter ~~of 2016 was primarily driven by global tax planning strategies~~ and ~~geographic mix. The change in the Company’s tax rate for the~~ first ~~nine~~six months of ~~2017 compared to first nine months of 2016~~2020 was driven primarily ~~driven~~ by the ~~tax rate~~ impact of discrete tax ~~items with lesser impacts from global tax planning strategies~~items. Further information related to special (gains) and ~~geographic mix.~~charges is included in Note 2.

The Company recognized net ~~expenses~~tax expense related to discrete tax items of ~~$8.3~~$7.7 million and $23.8 million in the second quarter and first six months of 2021, respectively. This included tax expense of $9.5 million related to prior year returns in the second quarter and first six months of 2021, and a deferred tax benefit of $0.9 million and deferred tax expense of $24.2 million associated with transferring certain intangible property between affiliates in the second quarter and first six months of 2021, respectively. Share-based compensation excess tax benefit was $4.2 million and $10.8 million in the second quarter and first six months of 2021. The amount of this tax benefit is subject to variation in stock price and award exercises. The remaining discrete tax expense of $3.3 million and $0.9 million during the quarter and first six months of 2021, respectively, was primarily due to other changes in estimates.

The Company recognized net tax benefits related to discrete tax items of ~~$24.2~~$22.5 million ~~during~~and $44.4 million in the ~~third~~second quarter and first ~~nine~~six months of ~~2017,~~2020, respectively. Share-based compensation excess tax benefit contributed $23.3 million and $45.6 million in the second quarter and first six months of 2020. Additionally, the Company recognized expense of $0.6 million and $4.5 million primarily related to the filing of prior year foreign tax returns and other income tax adjustments in the second quarter and first six months of 2020, respectively. The ~~third quarter net~~remaining discrete expense ~~was driven primarily by recognizing adjustments from filing the Company’s 2016 U.S. federal income tax return~~of $0.2 million and ~~international adjustments~~benefit of $3.3 million was due to ~~changes in estimates, partially offset by~~ the ~~release~~accrual of ~~reserves for~~interest on uncertain tax positions ~~due to the expiration of statute of limitations in state tax matters. Net benefits for the first nine months of 2017 was also impacted~~offset by the recognition of $29.2 million of share-based compensation excess tax benefits related to employee share-based payments (resulting from the adoption of a new accounting standard as discussed in Note 1).

~~The Company recognized net expenses related to discrete tax items of $4.5 million and $3.6 million~~reserves released during the ~~third~~ quarter and first ~~nine~~six months of ~~2016,~~2020, respectively. Third quarter net expense was driven primarily by recognizing adjustments from filing the Company’s 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. Net expense related to discrete tax items for the first nine months of 2016 was also impacted by adjustments to deferred tax asset and liability positions and the release of reserves for uncertain tax positions due to the expiration of statute of limitations in non-U.S. jurisdictions.

~~13.~~14. PENSION AND POSTRETIREMENT PLANS

The Company has a non-contributory, qualified defined benefit pension plan covering the majority of its U.S. employees. The Company also has U.S. non-contributory non-qualified defined benefit plans, which provide ~~for~~ benefits ~~to employees~~ in excess of limits permitted under its U.S. pension plans. Various international subsidiaries also have defined benefit pension plans. The Company provides postretirement health care benefits to certain U.S. employees and retirees. Effective January 1, 2021, the Company modified its U.S. qualified defined benefit pension plan to harmonize benefits across all plan participants, resulting in a reduction of service cost expense in 2021.

The components of net periodic pension and postretirement health care benefit costs for the ~~third~~second quarter ended ~~September~~June 30 are as follows:


	U.S.				International				U.S. Postretirement
	Pension				Pension				Health Care

													U.S.				International				U.S. Postretirement
													Pension				Pension				Health Care
(millions)	2017		2016		2017		2016		2017		2016		2021		2020		2021		2020		2021		2020
Service cost(a)		$17.5		$16.8		$7.7		$7.0		$0.7		$0.8		$10.8		$17.1		$8.2		$7.7		$0.2		$0.3
Interest cost on benefit obligation		20.9		20.4		7.0		8.0		1.5		2.0		12.5		17.5		4.4		5.3		0.7		1.1
Expected return on plan assets		(37.4)		(35.9)		(13.9)		(13.3)		(0.1)		(0.2)		(38.6)		(38.2)		(17.7)		(15.4)		(0.1)		(0.1)
Recognition of net actuarial (gain) loss		7.2		7.7		4.5		3.6		(0.6)		(0.4)
Amortization of prior service
cost (benefit)		(1.7)		(1.7)		(0.2)		(0.2)		(4.2)		(0.1)
Recognition of net actuarial loss (gain)														16.2		13.0		7.3		6.3		0.2		-
Amortization of prior service benefit														(1.7)		(1.8)		(0.3)		-		-		(2.8)
Curtailments and settlements (b)														19.6		-		-		-		-		-
Total expense (benefit)		$6.5		$7.3		$5.1		$5.1		$(2.7)		$2.1		$18.8		$7.6		$1.9		$3.9		$1.0		($1.5)

The components of net periodic pension and postretirement health care benefit costs for the ~~nine~~six months ended ~~September~~June 30 are as follows:


	U.S.				International				U.S. Postretirement
	Pension				Pension				Health Care

													U.S.				International				U.S. Postretirement
													Pension				Pension				Health Care
(millions)	2017		2016		2017		2016		2017		2016		2021		2020		2021		2020		2021		2020
Service cost(a)		$52.6		$50.3		$23.0		$20.9		$2.0		$2.3		$21.6		$34.2		$16.1		$15.3		$0.4		$0.6
Interest cost on benefit obligation		62.6		61.2		21.1		24.0		4.4		6.1		25.0		35.0		8.7		10.6		1.4		2.1
Expected return on plan assets		(112.3)		(107.7)		(41.7)		(40.0)		(0.4)		(0.6)		(77.2)		(76.4)		(35.3)		(31.0)		(0.2)		(0.2)
Recognition of net actuarial (gain) loss		21.5		23.1		13.6		10.7		(1.8)		(1.2)		32.4		26.0		14.5		-		0.4		0.1
Amortization of prior service
cost (benefit)		(5.1)		(5.2)		(0.5)		(0.6)		(12.5)		(0.2)
Amortization of prior service benefit														(3.4)		(3.8)		(0.4)		12.6		-		(5.5)
Curtailments and settlements (b)														19.6		-		-		-		-		-
Total expense (benefit)		$19.3		$21.7		$15.5		$15.0		$(8.3)		$6.4		$18.0		$15.0		$3.6		$7.5		$2.0		($2.9)

(a)

Service cost includes discontinued operations of $1.0 and $2.5 in the second quarter and first six months of 2020, respectively.

(b)

Settlement expense was recognized as special charges in the second quarter and first six months of 2021.

Service cost is included as employee compensation cost within either cost of sales or selling, general and administrative expenses on the Consolidated Statements of Income based on employee roles, while non-service components are included in other expense (income) on the Consolidated Statements of Income.

As of ~~September~~June 30, ~~2017,~~2021, the Company is in compliance with all funding requirements of each of its ~~U.S. pension and postretirement health care~~defined benefit plans. ~~In September 2017,~~

During the first six months of 2021, the Company made ~~an $80 million voluntary contribution to its non-contributory qualified U.S. pension plan. During the first nine months of 2017, the Company made payments~~contributions of $6 million to its U.S. non-contributory non-qualified defined benefit plans and estimates it will ~~make~~contribute an additional ~~payments of approximately $1~~$8 million to such plans during the remainder of ~~2017.~~2021.

~~The~~During the first six months of 2021, the Company ~~contributed $33~~made contributions of $24 million to its international pension benefit plans ~~during the first nine months of 2017. The Company~~and estimates it will contribute ~~approximately~~ an additional $9$21 million to such plans during the remainder of ~~2017.~~2021.

During the first ~~nine~~six months of ~~2017,~~2021, the Company made ~~payments~~contributions of ~~$12~~$6 million to its U.S. postretirement health care benefit plans and estimates it will ~~make~~contribute an additional ~~payments of approximately $4~~$6 million to such plans during the remainder of ~~2017.~~2021.

15. REVENUES

Revenue Recognition

Product and Sold Equipment

Product revenue is generated from sales of cleaning, sanitizing, water and colloidal silica products. In addition, the Company sells equipment which may be used in combination with its specialized products. Revenue recognized from product and equipment sales is recognized at the point in time when the obligations in the contract with the customer are satisfied, which generally occurs with the transfer of the product or delivery of the equipment.

Service and Lease Equipment

Service and lease equipment revenue is generated from providing services or leasing equipment to customers. Service offerings include installing or repairing certain types of equipment, activities that supplement or replace headcount at the customer location, or fulfilling deliverables included in the contract. Global Industrial segment services are associated with water treatment and paper process applications. Global Institutional & Specialty segment services include cleaning and sanitizing programs and wash process solutions. Global Healthcare & Life Sciences segment services include pharmaceutical, personal care, infection and containment control solutions. Revenues included in Other primarily relate to services designed to detect, eliminate and prevent pests. Service revenue is recognized over time utilizing an input method and aligns with when the services are provided. Typically, revenue is recognized over time using costs incurred to date because the effort provided by the field selling and service organization represents services provided, which corresponds with the transfer of control. Revenue recognized from leased equipment primarily relates to warewashing and water treatment equipment recognized on a straight-line basis over the length of the lease contract pursuant to Topic 842 Leases. In the second quarter ended June 30, 2020, the Company provided a one-time lease billing suspension of approximately $38 million to certain restaurant customers within the Institutional Segment, in recognition of the impact of the COVID-19 pandemic. There was no substantial change to the consideration expected to be received under the lease arrangement.

The Company’s ~~U.S. postretirement health care costs decreased in 2017 relative~~operating lease revenue was as follows:

Second Quarter Ended

Six Months Ended

June 30

(millions)

2021

2020

2021

2020

Operating lease revenue*

$105.6

$65.4

$203.0

$173.3

*Includes immaterial variable lease revenue

The following table shows principal activities, separated by reportable segments, from which the Company generates its revenue. The reportable segments have been revised to align with the ~~costs incurred~~Company’s reportable segments in the ~~comparable period~~current year. Corporate segment includes sales to ChampionX under the Master Cross Supply and Product Transfer agreements entered into as part of the ~~prior year~~ChampionX Separation. For more information about the Company’s reportable segments, refer to Note 16.

Net sales at public exchange rates by reportable segment are as follows:

Second Quarter Ended

Six Months Ended

June 30

(millions)

2021

2020

2021

2020

Global Industrial

Product and sold equipment

$1,327.5

$1,230.4

$2,555.0

$2,461.5

Service and lease equipment

217.0

193.9

420.5

395.9

Global Institutional & Specialty

Product and sold equipment

805.1

598.3

1,507.8

1,490.0

Service and lease equipment

170.9

111.8

325.6

290.2

Global Healthcare & Life Sciences

Product and sold equipment

272.9

272.8

536.0

495.8

Service and lease equipment

28.9

26.6

58.5

48.3

Other

Product and sold equipment

74.2

53.3

141.3

131.5

Service and lease equipment

231.3

186.3

434.9

380.8

Corporate

Product and sold equipment

34.7

12.3

67.7

12.3

Service and lease equipment

0.2

0.4

Total

Total product and sold equipment

$2,514.4

$2,167.1

$4,807.8

$4,591.1

Total service and lease equipment

$648.3

$518.6

$1,239.9

$1,115.2

Net sales at public exchange rates by geographic region for the second quarter ended June 30 are as follows:


	Global				Global Institutional				Global Healthcare
	Industrial				& Specialty				& Life Sciences				Other				Corporate
	2021		2020		2021		2020		2021		2020		2021		2020		2021		2020

North America		$692.8		$658.0		$734.5		$492.7		$108.7		$104.4		$187.7		$152.5		$25.0		$12.3
Europe		342.1		308.6		120.9		106.1		171.1		171.6		62.9		45.2		1.2		-
Asia Pacific		197.6		184.7		50.3		46.8		14.8		13.4		19.7		14.4		1.3		-
Latin America		134.3		115.9		31.1		30.5		0.6		1.8		12.7		10.6		6.2		-
Greater China		95.5		79.0		29.9		22.4		1.5		1.8		19.3		14.8		0.6		-
India, Middle East and Africa		82.2		78.1		9.3		11.6		5.1		6.4		3.2		2.1		0.6		-
Total		$1,544.5		$1,424.3		$976.0		$710.1		$301.8		$299.4		$305.5		$239.6		$34.9		$12.3

Net sales at public exchange rates by geographic region for the six months ended June 30 are as follows:


	Global				Global Institutional				Global Healthcare
	Industrial				& Specialty				& Life Sciences				Other				Corporate
(millions)	2021		2020		2021		2020		2021		2020		2021		2020		2021		2020

North America		$1,329.2		$1,349.6		$1,357.2		$1,272.3		$207.4		$212.4		$348.5		$320.9		$47.7		$12.3
Europe		655.2		589.8		228.2		248.6		346.7		291.5		120.7		104.9		1.8		-
Asia Pacific		387.0		368.4		101.6		108.5		25.5		23.9		37.8		30.7		2.7		-
Latin America		259.5		245.0		62.4		70.6		1.1		2.8		24.7		22.3		12.7		-
Greater China		189.8		152.4		66.1		56.1		2.7		3.3		38.2		28.3		1.2		-
India, Middle East and Africa		154.8		152.2		17.9		24.1		11.1		10.2		6.3		5.2		2.0		-
Total		$2,975.5		$2,857.4		$1,833.4		$1,780.2		$594.5		$544.1		$576.2		$512.3		$68.1		$12.3

Net sales by geographic region were determined based on origin of sale. Revenues in the United States made up 52% and 53% of total during the six months ended June 30, 2021 and 2020, respectively.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are carried at the invoiced amounts, less an allowance for doubtful accounts, and generally do not bear interest. The Company estimates the allowance for doubtful accounts for expected credit losses by analyzing accounts receivable balances by age and applying historical write-off and collection trend rates. The Company’s estimates separately consider specific circumstances and credit conditions of customer receivables, and whether it is probable balances will be collected. Account balances are written off against the allowance when it is determined the receivable will not be recovered.

The Company’s allowance for doubtful accounts balance also includes an allowance for the expected return of products shipped and credits related to pricing or quantities shipped of $19.3 million and $14.2 million as of June 30, 2021 and 2020, respectively. Returns and credit activity is recorded directly as a reduction to revenue.

The following table summarizes the activity in the allowance for doubtful accounts:


	Six Months Ended
	June 30
(millions)	2021		2020

Beginning balance		$84.3		$55.5
Adoption of new standard		-		4.3
Bad debt expense		7.1		47.1
Write-offs		(8.5)		(15.6)
Other (a)		(2.8)		(5.0)
Ending balance (b)		$80.1		$86.3

(a)	Other amounts are primarily the effects of changes in currency translations and the impact of allowance for returns and credits.

(b)	The allowance for doubtful accounts balances in 2021 and 2020 reflect increased reserves, primarily due to the Institutional customer base as a result of the COVID-19 pandemic.

Contract Liability

Payments received from customers are based on invoices or billing schedules as established in contracts with customers. Accounts receivable are recorded when the right to consideration becomes unconditional. The contract liability relates to billings in advance of ~~moving~~performance (primarily service obligations) under the ~~U.S. postretirement healthcare plans to a Retiree Exchange approach for post-65 retiree medical coverage beginning in 2018 and~~contract. Contract liabilities are recognized as revenue when the ~~merger of Nalco U.S. postretirement health care plan with~~performance obligation has been performed, which primarily occurs during the ~~Ecolab U.S. postretirement plan.~~subsequent quarter.


	June 30		June 30
(millions)	2021		2020

Contract liability as of beginning of the year		$80.4		$76.7

Revenue recognized in the period from:
Amounts included in the contract liability at the beginning of the year		(80.4)		(76.7)

Increases due to billings excluding amounts recognized as revenue during the period ended		87.9		73.5
Business combinations		-		0.5

Contract liability as of end of period		$87.9		$74.0

~~14.~~16. OPERATING SEGMENTS

The Company’s organizational structure consists of global business unit and global regional leadership teams. The Company’s operating segments follow its commercial and product-based activities and are based on engagement in business activities, availability of discrete financial information and review of operating results by the Chief Operating Decision Maker at the identified operating segment level.

The Company’s operating segments that share similar economic characteristics and future prospects, nature of the products and production processes, end-use markets, channels of distribution and regulatory environment have been aggregated into ~~three~~3 reportable segments: Global Industrial, Global Institutional & Specialty and Global ~~Energy.~~Healthcare & Life Sciences. The Company’s operating segments that do not meet the quantitative criteria to be separately reported have been combined into ~~the Other segment.~~Other. The Company provides similar information for ~~the~~ Other ~~segment~~ as the Company considers the information regarding its underlying operating segments as useful in understanding its consolidated results.

Comparability of Reportable Segments

The Company evaluates the performance of its non-U.S. dollar functional currency international operations based on fixed currency exchange rates, which ~~eliminate~~eliminates the impact of exchange rate fluctuations on its international operations. Fixed currency amounts are updated annually at the beginning of each year based on translation into U.S. dollars at foreign currency exchange rates established by management, with all periods presented using such rates. ~~Fixed currency rates are generally based on existing market rates at the time they are established.~~ The “Fixed Currency Rate Change” column shown in the following table reflects the impact on previously reported values related to fixed currency exchange rates established by management at the beginning of ~~2017.~~

~~Effective~~2021 and have been updated from the 2020 rates reflected in the ~~first quarter~~Company’s Form 10-K. The difference between the fixed currency exchange rates and the actual currency exchange rates is reported within the “Effect of ~~2017, the Company established the Life Sciences operating segment, to align with the strategy for growth~~foreign currency translation” row in the ~~pharmaceutical and personal care manufacturing operations. Life Sciences is comprised of operations previously recorded~~table below. The “Other” column shown in the ~~Food & Beverage and Healthcare operating segments and has been aggregated into the Global Industrial reportable segment. The Company also made~~table reflects immaterial changes ~~to its reportable~~between segments, ~~including the movement of certain customers and~~primarily cost ~~allocations between reportable segments. These changes are presented in "Segment Change" column of the table below.~~allocations.

The impact of the preceding changes on previously reported full year ~~2016~~2020 reportable segment net sales and operating income is summarized as follows:


	December 31, 2016
			Fixed
	Values at		Currency		Segment	Values at

							December 31, 2020

							2020 Reported					Fixed	2020 Reported
							Valued at 2020				Currency		Valued at 2021
(millions)	2016 Rates		Rate Change		Change	2017 Rates	Management Rates		Other		Rate Change		Management Rates
Net Sales
Global Industrial		$ 4,617.1		$ 6.9	$ 63.2	$ 4,687.2		$5,959.9		($3.7)		$92.0		$6,048.2
Global Institutional		4,495.6		7.7	(63.2)	4,440.1
Global Energy		3,035.8		40.0	-	3,075.8
Global Institutional & Specialty								3,577.2		9.3		42.5		3,629.0
Global Healthcare & Life Sciences								1,189.1		3.7		48.3		1,241.1
Other		806.5		(4.8)	-	801.7		1,093.3		(9.3)		19.4		1,103.4
Corporate								102.4		-		(1.8)		100.6
Subtotal at fixed currency rates		12,955.0		49.8	-	13,004.8		11,921.9		-		200.4		12,122.3
Effect of foreign currency translation		197.8		(49.8)	-	148.0		(131.7)		-		(200.4)		(332.1)
Consolidated reported GAAP net sales		$ 13,152.8		$ -	$ -	$ 13,152.8		$11,790.2		$-		$-		$11,790.2


Operating Income
Global Industrial		$ 703.0		$ (0.9)	$ 17.9	$ 720.0		$1,106.0		($0.2)		$17.3		$1,123.1
Global Institutional		966.7		3.0	(19.2)	950.5
Global Energy		337.1		7.9	1.7	346.7
Global Institutional & Specialty								321.9		(0.3)		2.4		324.0
Global Healthcare & Life Sciences								207.6		0.7		10.0		218.3
Other		148.1		(2.5)	(0.4)	145.2		131.5		(0.2)		1.5		132.8
Corporate		(272.1)		(0.5)	-	(272.6)		(347.5)		-		(2.2)		(349.7)
Subtotal at fixed currency rates		1,882.8		7.0	-	1,889.8		1,419.5		-		29.0		1,448.5
Effect of foreign currency translation		32.2		(7.0)	-	25.2		(23.8)		-		(29.0)		(52.8)
Consolidated reported GAAP operating income		$ 1,915.0		$ -	$ -	$ 1,915.0		$1,395.7		$-		$-		$1,395.7

Reportable Segment Information

Financial information for ~~each of~~ the Company’s reportable segments, ~~including the impact of all preceding segment structure changes,~~ is as follows:


	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									Second Quarter Ended				Six Months Ended
									June 30				June 30
(millions)	2017		2016		2017		2016		2021		2020		2021		2020
Net Sales
Global Industrial		$1,248.1		$1,202.1		$3,586.5		$3,468.4		$1,555.4		$1,498.5		$2,989.3		$2,963.5
Global Institutional		1,225.1		1,149.2		3,524.3		3,315.0
Global Energy		796.7		771.2		2,346.1		2,305.6
Global Institutional & Specialty										978.9		733.0		1,837.4		1,820.2
Global Healthcare & Life Sciences										303.5		321.4		597.2		578.2
Other		221.7		209.2		633.8		598.1		306.6		249.1		577.9		528.7
Corporate										35.0		12.3		68.2		12.3
Subtotal at fixed currency rates		3,491.6		3,331.7		10,090.7		9,687.1		3,179.4		2,814.3		6,070.0		5,902.9
Effect of foreign currency translation		71.7		54.4		96.9		113.6		(16.7)		(128.6)		(22.3)		(196.6)
Consolidated reported GAAP net sales		$3,563.3		$3,386.1		$10,187.6		$9,800.7		$3,162.7		$2,685.7		$6,047.7		$5,706.3


Operating Income
Global Industrial		$207.4		$204.1		$501.9		$510.1		$263.3		$287.8		$482.5		$497.4
Global Institutional		274.2		262.1		726.1		697.8
Global Energy		89.7		102.6		236.1		244.9
Global Institutional & Specialty										138.6		(38.0)		201.7		145.7
Global Healthcare & Life Sciences										48.3		69.0		93.9		93.0
Other		44.0		40.4		110.9		108.2		51.3		20.8		84.2		42.6
Corporate		(46.9)		(45.0)		(198.9)		(222.9)		(51.4)		(128.1)		(114.4)		(183.2)
Subtotal at fixed currency rates		568.4		564.2		1,376.1		1,338.1		450.1		211.5		747.9		595.5
Effect of foreign currency translation		11.4		9.9		16.0		20.0		(2.3)		(19.5)		(2.8)		(27.3)
Consolidated reported GAAP operating income		$579.8		$574.1		$1,392.1		$1,358.1		$447.8		$192.0		$745.1		$568.2

The profitability of the Company’s operating segments is evaluated by management based on operating income. ~~The Company has no intersegment revenues.~~

Consistent with the Company’s internal management reporting, Corporate amounts in the table above include sales to ChampionX in accordance with the long-term supply agreement entered into with the Transaction, as discussed in Note 4. Corporate also includes intangible asset amortization specifically from the Nalco merger and special (gains) and charges, as discussed in Note 2, that are not allocated to the Company’s reportable segments.

~~15.~~

17. COMMITMENTS AND CONTINGENCIES

The Company is subject to various claims and contingencies related to, among other things, workers’ compensation, general liability (including product liability), automobile claims, health care claims, environmental matters and lawsuits. The Company is also subject to various claims and contingencies related to income taxes. The Company also has contractual obligations ~~related to~~including lease commitments.

~~Insurance~~The Company records liabilities when a contingent loss is probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred.

Insurance

Globally, the Company has insurance policies with varying deductible levels for property and casualty losses. The Company is insured for losses in excess of these deductibles, subject to policy terms and conditions and has recorded both a liability and an offsetting receivable for amounts in excess of these deductibles. The Company is self-insured for health care claims for eligible participating employees, subject to certain deductibles and limitations. The Company determines its liabilities for claims on an actuarial basis.

Litigation and Environmental Matters

The Company and certain subsidiaries are party to various lawsuits, claims and environmental actions that have arisen in the ordinary course of business. These include from time to time antitrust, employment, commercial, patent infringement, tort, product liability and wage hour lawsuits, as well as possible obligations to investigate and mitigate the effects on the environment of the disposal or release of certain chemical substances at various sites, such as Superfund sites and other operating or closed facilities. The Company has established accruals for certain lawsuits, claims and environmental matters. The Company currently believes that there is not a reasonably possible risk of material loss in excess of the amounts accrued related to these legal matters. Because litigation is inherently uncertain, and unfavorable rulings or developments could occur, there can be no certainty that the Company may not ultimately incur charges in excess of recorded liabilities. A future adverse ruling, settlement or unfavorable development could result in future charges that could have a material adverse effect on the Company’s results of operations or cash flows in the period in which they are recorded. The Company currently believes that such future charges related to suits and legal claims, if any, would not have a material adverse effect on the Company’s consolidated financial position.

Environmental Matters

The Company is currently participating in environmental assessments and remediation at approximately 4530 locations, ~~excluding recently acquired Anios locations which are currently under review. The~~the majority of ~~these locations~~which are in the U.S. ~~Environmental~~, and environmental liabilities have been accrued reflecting management’s best estimate of future costs. Potential insurance reimbursements are not anticipated in the Company’s accruals for environmental liabilities.

~~Matters Related to Deepwater Horizon Incident Response~~

On April 22, 2010, the deepwater drilling platform, the Deepwater Horizon, operated by a subsidiary of BP plc, sank in the Gulf of Mexico after a catastrophic explosion and fire that began on April 20, 2010. A massive oil spill resulted. Approximately one week following the incident, subsidiaries of BP plc, under the authorization of the responding federal agencies, formally requested Nalco Company, now an indirect subsidiary of Ecolab, to supply large quantities of COREXIT® 9500, a Nalco oil dispersant product listed on the U.S. EPA National Contingency Plan Product Schedule. Nalco Company responded immediately by providing available COREXIT and increasing production to supply the product to BP’s subsidiaries for use, as authorized and directed by agencies of the federal government throughout the incident. Prior to the incident, Nalco and its subsidiaries had not provided products or services or otherwise had any involvement with the Deepwater Horizon platform. On July 15, 2010, BP announced that it had capped the leaking well, and the application of dispersants by the responding parties ceased shortly thereafter.

On May 1, 2010, the President appointed retired U.S. Coast Guard Commandant Admiral Thad Allen to serve as the National Incident Commander in charge of the coordination of the response to the incident at the national level. The EPA directed numerous tests of all the dispersants on the National Contingency Plan Product Schedule, including those provided by Nalco Company, “to ensure decisions about ongoing dispersant use in the Gulf of Mexico are grounded in the best available science.” Nalco Company cooperated with this testing process and continued to supply COREXIT, as requested by BP and government authorities. The use of dispersants by the responding parties was one tool used by the government and BP to avoid and reduce damage to the Gulf area from the spill.

~~In connection with its provision of COREXIT, Nalco Company has been named in several lawsuits as described below.~~

Cases arising out of the Deepwater Horizon accident were administratively transferred for pre-trial purposes to a judge in the United States District Court for the Eastern District of Louisiana with other related cases under In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, Case No. 10-md-02179 (E.D. La.) (“MDL 2179”). Nalco Company was named, along with other unaffiliated defendants, in six putative class action complaints related to the Deepwater Horizon oil spill and 21 complaints filed by individuals. Those complaints were consolidated in MDL 2179. The complaints generally allege, among other things, strict liability and negligence relating to the use of our Corexit dispersant in connection with the Deepwater Horizon oil spill.

Pursuant to orders issued by the Court in MDL 2179, the claims were consolidated in several master complaints, including one naming Nalco Company and others who responded to the Gulf Oil Spill (known as the “B3 Master Complaint”). On May 18, 2012, Nalco filed a motion for summary judgment against the claims in the B3 Master Complaint, on the grounds that: (i) Plaintiffs’ claims are preempted by the comprehensive oil spill response scheme set forth in the Clean Water Act and National Contingency Plan; and (ii) Nalco is entitled to derivative immunity from suit. On November 28, 2012, the Court granted Nalco’s motion and dismissed with prejudice the claims in the “B3” Master Complaint asserted against Nalco. The Court held that such claims were preempted by the Clean Water Act and National Contingency Plan. Because claims in the “B3” Master Complaint remained pending against other defendants, the Court’s decision was not a “final judgment” for purposes of appeal. Under Federal Rule of Appellate Procedure 4(a), plaintiffs will have 30 days after entry of final judgment to appeal the Court’s decision.

In December 2012 and January 2013, the MDL 2179 court issued final orders approving two settlements between BP and Plaintiffs’ Class Counsel: (1) a proposed Medical Benefits Class Action Settlement; and (2) a proposed Economic and Property Damages Class Action Settlement. Pursuant to the proposed settlements, class members agree to release claims against BP and other released parties, including Nalco Company and its related entities.

Nalco Company, the incident defendants and the other responder defendants have been named as first party defendants by Transocean Deepwater Drilling, Inc. and its affiliates (the “Transocean Entities”) (In re the Complaint and Petition of Triton Asset Leasing GmbH, et al, MDL No. 2179, Civil Action 10-2771). In April and May 2011, the Transocean Entities, Cameron International Corporation, Halliburton Energy Services, Inc., M-I L.L.C., Weatherford U.S., L.P. and Weatherford International, Inc. (collectively, the “Cross Claimants”) filed cross claims in MDL 2179 against Nalco Company and other unaffiliated cross defendants. The Cross Claimants generally allege, among other things, that if they are found liable for damages resulting from the Deepwater Horizon explosion, oil spill and/or spill response, they are entitled to indemnity or contribution from the cross defendants.

In April and June 2011, in support of its defense of the claims against it, Nalco Company filed counterclaims against the Cross Claimants. In its counterclaims, Nalco Company generally alleges that if it is found liable for damages resulting from the Deepwater Horizon explosion, oil spill and/or spill response, it is entitled to contribution or indemnity from the Cross Claimants.

~~In May 2016, Nalco was named in nine additional complaints filed by individuals alleging, among other things, business and economic loss resulting from the Deepwater Horizon oil spill.~~ ~~In April 2017, Nalco was named in two additional complaints filed by individuals seeking, among other things, business and economic loss resulting from the Deepwater Horizon oil spill.~~ The plaintiffs in these lawsuits are generally seeking awards of unspecified compensatory and punitive damages, and attorneys’ fees and costs. These actions have been consolidated in the MDL and the Company expects they will be dismissed pursuant to the Court’s November 28, 2012 order granting Nalco’s motion for summary judgment.

2530

On February 22, 2017, the Court dismissed the “B3” Master Complaint and ordered that Plaintiffs who had previously filed a claim that fell within the scope of the “B3” Master Complaint and who had “opted out” of and not released their claims under the Medical Benefits Class Action Settlement either: (1) complete a sworn statement indicating, among other things, that they opted out of the Medical Benefits Class Action Settlement (to be completed by Plaintiffs who previously filed an individual complaint); or (2) file an individual lawsuit attaching the sworn statement as an exhibit, by a deadline date set by the Court. The Court will then determine which “B3” Plaintiffs are entitled to pursue their claims and the procedures for addressing those claims.

The Company believes the claims asserted against Nalco Company are without merit and intends to defend these lawsuits vigorously. The Company also believes that it has rights to contribution and/or indemnification (including legal expenses) from third parties. However, the Company cannot predict the outcome of these lawsuits, the involvement it might have in these matters in the future, or the potential for future litigation.

~~16.~~18. NEW ACCOUNTING PRONOUNCEMENTS

~~Required~~

~~Date of~~

~~Effect on the~~

~~Standard~~

~~Issuance~~

~~Description~~

~~Adoption~~

~~Financial Statements~~

Standards that are not yet adopted:

Required

~~ASU 2017-12 - Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities~~

~~August 2017~~Date of

~~Amends the hedge accounting recognition and presentation requirements in ASC 815. Simplifies the guidance~~

Date of

Effect on the application of hedge accounting and the requirements for hedge documentation and effectiveness testing. Requires presentation of all items that affect earnings in the same income statement line as the hedged item.

~~January 1, 2019~~

~~The Company is currently evaluating the impact of adoption, and certain transition elections provided for by the ASU.~~

Standard

Issuance

Description

Adoption

Financial Statements

~~ASU 2017-09 - Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting~~

~~August 2017~~

Clarifies the definition of what's considered a substantive modification related to a change in terms or conditions of a share-based payment award and when it's appropriate to apply modification accounting. The current definition of "modification" is too broad, resulting in diverse interpretations of what's considered a substantive modification.

~~January 1, 2018~~

~~This ASU must be applied prospectively to an award modified on or after the adoption date. The Company is currently evaluating the impact of adoption.~~

~~ASU 2017-07 - Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and the Net Periodic Postretirement Benefit Cost~~

~~March 2017~~

Amends the requirements related to income statement presentation of the components of net periodic benefit costs. New requirements include (1) disaggregate the current-service-cost component from the other components of net benefit cost (the “other components") and present it with other current compensation costs for related employees in the income statement and (2) present the other components elsewhere in the income statement and outside of income from operations if such a subtotal is presented.

~~January 1, 2018~~

Upon adoption of the standard, the Company will record only the service cost component with compensation cost in Cost of Sales and Selling, General, and Administrative costs. The other components of net period benefit cost will be presented below operating income. The Company is currently evaluating the impact of adoption.

ASU 2020-04 - Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting
ASU 2021-01 - Reference Rate Reform (Topic 848): Scope

March 2020

LIBOR, a widely used reference rate for pricing financial products is scheduled to be discontinued on December 31, 2021. This standard provides optional expedients and exceptions if certain criteria are met when accounting for contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

Application of guidance is optional until the options and expedients expire on December 31, 2022.

The Company has not elected any expedients to date and adoption of this standard is not expected to have a material impact on the Company's financial statements.

ASU 2017-05 - Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets

~~February 2017~~

Clarifies the scope of guidance on nonfinancial asset derecognition (ASC 610-20) including the accounting for partial sales of nonfinancial assets. The ASU defines "in-substance nonfinancial asset". Also clarifies the derecognition of all businesses should be accounted for in accordance with derecognition and deconsolidation guidance in 810-10.

~~January 1, 2018~~

~~The Company is required to apply this ASU on a retrospective basis. The Company is currently evaluating the impact of adoption.~~


Standards that were adopted:
	Date of		Date of		Effect on the
~~ASU 2017-04 - Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment~~Standard	~~January 2017~~Issuance	Simplifies subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill.Description	~~January 1, 2020~~Adoption	~~The ASU must be applied on a prospective basis upon adoption. The Company is currently evaluating the impact of adoption.~~	Financial Statements

ASU ~~2017-01--Business Combinations (Topic 805): Clarifying the Definition of a Business~~	~~January 2017~~	~~Clarifies the definition of a business and provides guidance on whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.~~	~~January 1, 2018~~	~~The ASU must be applied prospectively on or after the effective date, and no disclosures are required at transition. The Company is currently evaluating the impact of adoption.~~

~~ASU 2016-18 - Statement of Cash Flows (Topic 230): Restricted Cash~~	~~November 2016~~	~~Clarifies guidance on the classification and presentation of restricted cash in the statement of cash flows.~~	~~January 1, 2018~~	~~Presentation impact only related to restricted cash. The Company does not expect the updated guidance to have a significant impact on future financial statements.~~

~~ASU 2016-16~~2019-12 - Income Taxes (Topic 740): ~~Intra-Entity Transfers of Assets Other Than Inventory~~Simplifying the Accounting for Income Taxes	~~October 2016~~December 2019	Simplifies ~~the guidance on~~ the accounting for ~~the~~ income ~~tax consequences of intra-entity transfers of assets other than inventory (e.g. intellectual property).~~	~~January 1, 2018~~	This ASU must be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. The Company is currently evaluating the impact of adoption.

~~ASU 2016-15 - Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments~~	~~August 2016~~	~~The guidance's objective is to reduce diversity in practice of how~~taxes by removing certain ~~cash receipts and cash payments are presented and classified in the statement of cash flow.~~	~~January 1, 2018~~	~~Presentation impact only related to eight specific cash flow items. The Company is currently evaluating the impact of adoption.~~

~~ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~	~~June 2016~~	Addresses the recognition, measurement, presentation and disclosure of credit losses on trade and reinsurance receivables, loans, debt securities, net investments in leases, off-balance-sheet credit exposures and certain other instruments. Amends guidance on reporting credit losses from an incurred model to an expected model for assets held at amortized cost, such as accounts receivable, loans and held-to-maturity debt securities. Additional disclosures will also be required.	~~January 1, 2020~~	~~Adoption of the standard will change how the allowance for trade and other receivables is calculated. The Company is currently evaluating the impact of adoption.~~

~~ASU 2016-02 - Leases (Topic 842)~~	~~February 2016~~	~~Introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance.~~	~~January 1, 2019~~	~~See additional information regarding the impact of this guidance on the Company's financials at the bottom of this table in note (a).~~

Revenue Recognition ASUs: 2014-09 - Revenue from Contracts with Customers 2015-14 - Deferral of the Effective Date 2016-08 - Principal Versus Agent Considerations 2016-10 - Identifying Performance Obligations and Licensing 2016-11 - Revenue Recognition and Derivatives and Hedging 2016-12 - Narrow-Scope Improvements & Practical Expedients 2016-20 - Technical Corrections and Improvements	~~Various~~	Recognition standard contains principles for entities to apply to determine the measurement of revenue and timing of when the revenue is recognized. The underlying principle of the updated guidance will have entities recognize revenue to depict the transfer of goods or services to customers at an amount that is expected to be received in exchange for those goods or services.	~~January 1, 2018~~	~~See additional information regarding the impact of this guidance on the Company's financials at the bottom of this table in note (b).~~

~~(a)~~

As part of implementing the new standard, the Company is in process of reviewing current accounting policies, developing future policies, and assessing the practical expedients allowed under the new accounting guidance. In addition, the project team is defining future processes to identify, accumulate, and report on the Company’s various leases. The Company expects most of its operating lease commitments will be subjectexceptions to the new standard and recognized as operating lease liabilities and right-of-use assets upon adoption and is currently evaluating other impacts on the consolidated financial statements. The standard requires a modified retrospective transition to be applied at the beginning of the earliest comparative period presented in the year of adoption.

~~(b)~~

~~The Company has reached conclusions on certain key accounting assessments~~general principles related to the ~~standard~~approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and ~~is finalizing the related accounting policies.~~recognition of deferred tax liabilities for outside basis differences. The Company’s focus on the identification and evaluation of performance obligations within certain contracts has identified additional performance obligations within contracts which relate to providing services to customers. These additional performance obligations, when aggregated with the service revenue that is currently reported, represent more than 10% of consolidated net sales. Upon adoption of the new standard ~~service revenues are expected to be reported separately from product revenues. Additionally,~~also simplifies the ~~Company anticipates certain costs currently classified~~accounting for franchise taxes and enacted changes in ~~Selling, General,~~tax laws or rates and ~~Administrative expenses will be reclassified as Cost~~clarifies the accounting for transactions that result in a step-up in the basis of Sales as they are tied to satisfaction of a service performance obligation. In addition to expanded disclosures associated with the new standard, the Company is continuing to assess the impact on the consolidated financial statements. The Company currently intends to adopt the new standard using the full retrospective method on goodwill.

January 1, ~~2018, which is dependent upon the completion of the analysis of information necessary to restate prior period financial statements.~~

2021
	~~Date~~Adoption of		~~Date of~~	~~Effect on the~~
~~Standard~~	~~Issuance~~	~~Description~~	~~Adoption~~	~~Financial Statements~~

~~Standards that were adopted:~~

~~ASU 2015-11 - Inventory (Topic 330): Simplifying the Measurement of Inventory~~	~~July 2015~~	~~The amendment requires entities to measure inventory under the FIFO or average cost methods at the lower of cost or net realizable value.~~	~~January 1, 2017~~	~~The adoption of the guidance~~ this standard did not have a material impact on the Company's financial statements.

~~ASU 2016-01 - Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities~~	~~January 2016~~	The amendment revises accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments.	~~January 1, 2017~~	~~The adoption of the guidance did not have a material impact on the Company's financial statements.~~

~~ASU 2016-05 - Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships~~	~~March 2016~~	The amendment clarifies language related to hedge accounting criteria that a change in the counterparty is not in and of itself considered a termination of the derivative or critical term of the hedging relationship.	~~January 1, 2017~~	~~The adoption of the guidance did not have a material impact on the Company's financial statements.~~

~~ASU 2016-07 - Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting~~	~~March 2016~~	Simplifies the transition to equity method accounting for entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence.	~~January 1, 2017~~	~~The adoption of the guidance did not have a material impact on the Company's financial statements.~~

~~ASU 2016-09 - Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting~~	~~March 2016~~	~~The amendment includes provisions intended to simplify various aspects related to how share-based payments are accounted for and presented in the financial statements.~~	~~January 1, 2017~~	~~The Company included appropriate disclosures within this 10-Q to adhere to this new ASU.~~

~~ASU 2017-03 - Accounting Changes and Error Corrections (Topic 250) and Investments-Equity Method and Joint Ventures (Topic 323)~~	~~January 2017~~	Amends the disclosure requirements associated with certain recently issued Accounting Standards and how they will have an impact on the Financial Statements of a registrant when such standards are adopted in a future period. It applies to ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606); ASU No. 2016-02, Leases (Topic 842); and ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and any subsequent amendments to these ASU's.	~~Effective Immediately~~	~~The Company included appropriate disclosure requirements within this 10-Q to adhere to this new ASU.~~

No other new accounting pronouncements issued or effective have had or are expected to have a material impact on the Company’s consolidated financial statements.

2831

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the ~~Shareholders and~~ Board of Directors and Shareholders of Ecolab Inc.:

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidatedbalance sheet ofEcolab Inc.and its subsidiaries(the “Company”) as of ~~September~~June 30, ~~2017,~~2021, and the relatedconsolidated statements of income, ~~and~~ comprehensive income, and equityfor the three-month and ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020, and the consolidated ~~statement~~statements of cash flows for the ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2017~~2021 and ~~2016. These~~2020,including the related notes (collectively referred to as the “interim financialstatements”).Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financialstatements ~~are~~forthem to be in conformity with accounting principles generally accepted in the ~~responsibility~~United States of ~~the Company’s management.~~America.

We ~~conducted our review~~have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)., the consolidated balance sheet of the Company as of December 31, 2020, and the related consolidated statements of income, comprehensive income, equity and cash flowsfor the year then ended (not presented herein), and in our report dated February 26, 2021, which included a paragraph describing a change in the manner of accounting for leases in the 2019 financial statements, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2020, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

These interim financial statements are the responsibility of the Company’s management. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the ~~Public Company Accounting Oversight Board (United States),~~PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying consolidated interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet as of December 31, 2016, and the related consolidated statements of income, comprehensive income, equity, and of cash flows for the year then ended (not presented herein), and in our report dated February 24, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2016, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.





/s/ PricewaterhouseCoopers LLP
Minneapolis, Minnesota
August 5, 2021
~~PricewaterhouseCoopers LLP~~
~~Minneapolis, Minnesota~~
~~November 2, 2017~~

2932

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management discussion and analysis (“MD&A”) provides information we believe is useful in understanding our operating results, cash flows and financial condition. We provide quantitative information about the material sales drivers including the impact of changes in volume and pricing and the effect of acquisitions and changes in foreign currency at the corporate and reportable segment level. We also provide quantitative information regarding special (gains) and charges, discrete tax items and other significant factors we believe are useful for understanding our results. Such quantitative drivers are supported by comments meant to be qualitative in nature. Qualitative factors are generally ordered based on estimated significance.

The MD&A should be read in conjunction with both the unaudited consolidated financial information and related notes included in this Form 10-Q, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020. This discussion contains various ~~“Non-GAAP~~Non-GAAP Financial ~~Measures”~~Measures and also contains various ~~“Forward-Looking Statements”~~Forward-Looking Statements within the meaning of the Private Securities Litigation Reform Act of 1995. We refer readers to the statements entitled “Non-GAAP Financial Measures” and “Forward-Looking Statements” located at the end of Part I of this report.

Comparability of Results

ChampionX Transaction

On June 3, 2020, we completed the separation of our Upstream Energy business (the “ChampionX business”) in a Reverse Morris Trust transaction (the “Transaction”) through the split-off of ChampionX Holding Inc. (“ChampionX”), formed by Ecolab as a wholly owned subsidiary to hold the ChampionX Business, followed immediately by the merger of ChampionX (the “Merger”) with a wholly owned subsidiary of ChampionX Corporation (f/k/a Apergy Corporation, “Apergy”).

The ChampionX business met the criteria to be reported as discontinued operations because the separation of ChampionX business was a strategic shift in business that had a major effect on our operations and financial results. Therefore, we reported the historical results of ChampionX, including the results of operations, cash flows, and related assets and liabilities, as discontinued operations. Unless otherwise noted, the accompanying MD&A has been revised to reflect the ChampionX business as discontinued operations and all prior year balances have been revised accordingly to reflect continuing operations only.

Fixed Currency Foreign Exchange Rates

Management evaluates the sales and operating income performance of our non-U.S. dollar functional currency international operations based on fixed currency exchange rates, which eliminate the impact of exchange rate fluctuations on our international operations. Fixed currency amounts are updated annually at the beginning of each year based on translation into U.S. dollars at foreign currency exchange rates established by management, with all periods presented using such rates. ~~Fixed~~Public currency ~~exchange rates are generally based on existing market rates at~~rate data provided within the ~~time they are established.~~

~~Comparability~~“Segment Performance” section of ~~Reportable Segments~~

Effective in the first quarter of 2017, in order to align with the strategy for growth specifically in the pharmaceutical and personal care manufacturing operations, we established the Life Sciences operating segment. Life Sciences is comprised of customers and accounts that were previously included in our Food & Beverage and Healthcare operating segments, which were related to manufacturing in the following industries: pharmaceutical, animal health and medicine, biologic products, cosmetics and medical device. The Life Sciences operating segment is included in our Global Industrial reportable segment. All comparisons and discussion throughout thethis MD&A ~~are based on~~reflect amounts translated at actual public average rates of exchange prevailing during the ~~new operating segment structure effective in the first quarter of 2017.~~corresponding period and is provided for informational purposes only.

Impact of Acquisitions and Divestitures

Acquisition adjusted growth rates exclude the results of our acquired businesses from the first twelve months post acquisition and exclude the results of our divested businesses from the twelve months prior to ~~divestiture, and exclude sales to our deconsolidated Venezuelan subsidiaries from both the current period and comparable period~~divestiture. In addition, as part of the ~~prior year.~~separation, we also entered into a Master Cross Supply and Product Transfer agreement with ChampionX to provide, receive or transfer certain products for a period up to 36 months. Sales of product to ChampionX under this agreement are recorded in product and equipment sales in the Corporate segment along with the related cost of sales. These sales are removed from the consolidated results as part of the calculation of the impact of acquisitions and divestitures.

OVERVIEW OF THE ~~THIRD~~SECOND QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2017~~2021

Sales Performance

When comparing ~~third~~second quarter ~~2017~~2021 against ~~third~~second quarter ~~2016,~~2020, sales performance was as follows:

●

Reported net sales increased 5%18% to ~~$3,563~~$3,163 million, fixed currency sales increased 13% and acquisition adjusted fixed currency sales increased ~~5% and 3%, respectively. Hurricanes Harvey, Irma, and Maria are estimated to have had a negative 1% impact on fixed currency sales growth.~~

12%.

●

Fixed currency sales for our Global Industrial segment increased 4% to ~~$1,248 million,~~$1,555 million. Acquisition adjusted fixed currency sales increased 3%, as strong growth in Water and Paper, led by ~~Water~~recovering market conditions and new business wins, as well as improving trends in Food ~~and Beverage.~~

& Beverage, more than offset lower Downstream sales that reflected low-margin refinery business exits.

●

Fixed currency sales for our Global Institutional & Specialty segment increased 7%34% to ~~$1,225~~$979 million and acquisition adjusted fixed currency sales increased ~~2%, led by~~33%. Strong growth in ~~Specialty.~~

the Institutional operating segment reflected recovering markets, new business wins and pricing. Specialty sales declined versus last year’s strong gain that benefited from COVID-19 related orders.

●

Fixed currency sales for our Global ~~Energy~~Healthcare & Life Sciences segment decreased 6% to $304 million. Acquisition adjusted fixed currency sales decreased 8% compared to a 20% increase last year when sales benefited from strong COVID-19 related demand. Underlying Healthcare and Life Sciences growth remained strong, driven by new business wins and increased ~~3% to $797 million,~~hygiene awareness.

●	Fixed currency sales and acquisition adjusted fixed currency sales for Other increased ~~4%, as~~23% to $307 million led by strong growth in ~~the well stimulation business and modest gains in the downstream business were offset by a decline in our production business.~~

~~Fixed currency sales for our Other segment sales increased 6% to $222 million,~~Pest Elimination that was driven by ~~sales growth in Pest Elimination.~~

recovering markets and new business wins.

Financial Performance

When comparing ~~third~~second quarter ~~2017~~2021 against ~~third~~second quarter ~~2016,~~2020, our financial performance was as follows:

●

Reported operating income increased 1%133% to ~~$580~~$448 million. Excluding the impact of special (gains) and charges from both ~~2017~~2021 and ~~2016~~2020 reported results, adjusted operating income ~~also~~ increased 1%63% and our adjusted fixed currency operating income ~~also~~ increased 1%53%. ~~Hurricanes are estimated to have negatively impacted adjusted fixed currency operating income growth by 3%.~~

●

Net income from continuing operations attributable to Ecolab increased 5%141% to ~~$392~~$311 million. Excluding the impact of special (gains) and charges and discrete tax items from both ~~2017~~2021 and ~~2016~~2020 reported results, our adjusted net income from continuing operations attributable to Ecolab increased 7%86%.

●

~~Diluted~~Reported diluted EPS from continuing operations of ~~$1.34~~$1.08 increased 6%145%. Excluding the impact of special (gains) and charges and discrete tax items from both ~~2017~~2021 and ~~2016~~2020 reported results, adjusted diluted EPS from continuing operations increased 7%88% to ~~$1.37~~$1.22 in the ~~third~~second quarter of ~~2017.~~

2021.

●

Our reported tax rate was ~~24.6%~~21.5% during the ~~third~~second quarter of ~~2017,~~2021, compared to ~~25.5%~~9.5% during the ~~third~~second quarter of ~~2016.~~2020. Excluding the tax rate impact of special (gains) and charges and discrete tax items from both ~~2017~~2021 and ~~2016~~2020 results, our adjusted tax rate was ~~23.3% and 25.2%~~19.3% during the ~~third~~second quarter of ~~2017 and 2016, respectively.~~

2021, compared to 20.5% during the second quarter of 2020.

RESULTS OF OPERATIONS

Net Sales


	Third Quarter Ended						Nine Months Ended
	September 30						September 30

													Second Quarter Ended						Six Months Ended
													June 30						June 30
(millions)	2017		2016		Change		2017		2016		Change		2021		2020		Change		2021		2020		Change
Product and equipment sales														$2,514.4		$2,167.1				$4,807.8		$4,591.1
Service and lease sales														648.3		518.6				1,239.9		1,115.2
Reported GAAP net sales		$3,563.3		$3,386.1	5	%		$10,187.6		$9,800.7	4	%		$3,162.7		$2,685.7	18	%		$6,047.7		$5,706.3	6	%
Effect of foreign currency translation		(71.7)		(54.4)				(96.9)		(113.6)				16.7		128.6				22.3		196.6
Non-GAAP fixed currency sales		$3,491.6		$3,331.7	5	%		$10,090.7		$9,687.1	4	%		$3,179.4		$2,814.3	13	%		$6,070.0		$5,902.9	3	%

Product and sold equipment revenue is generated from providing cleaning, sanitizing and water treatment products or selling equipment used in combination with specialized products. Service and lease equipment revenue is generated from providing services or leasing equipment to customers. All of our sales are subject to the same economic conditions.

The percentage components of the period-over-period ~~2017~~2021 sales change are shown below:



	Third Quarter Ended	Nine Months Ended
	September 30	September 30

			Second Quarter Ended			Six Months Ended
			June 30			June 30
(percent)	2017	2017	2021			2021
Volume	2%	2%		10	%		0	%
Price changes	1	1		2			2
Acquisition adjusted fixed currency sales change	3	3		12			1
Acquisitions and divestitures	2	1		1			2
Fixed currency sales change	5	4		13			3
Foreign currency translation	0	0		4			3
Reported GAAP net sales change	5%	4%		18	%		6	%

Amounts do not necessarily sum due to rounding.

Cost of Sales (“COS”) and Gross Profit Margin


	Third Quarter Ended								Nine Months Ended
	September 30								September 30
	2017				2016				2017				2016
			Gross				Gross				Gross				Gross

																	Second Quarter Ended								Six Months Ended
																	June 30								June 30
																	2021				2020				2021				2020
																			Gross				Gross				Gross				Gross
(millions/percent)	COS		Margin		COS		Margin		COS		Margin		COS		Margin		COS		Margin		COS		Margin		COS		Margin		COS		Margin
Product and equipment cost of sales																		$1,464.9				$1,301.5				$2,827.8				$2,666.2
Service and lease cost of sales																		379.1				334.2				728.2				689.7
Reported GAAP COS and gross margin		$1,891.3	46.9	%		$1,737.2	48.7	%		$5,454.4	46.5	%		$5,153.8	47.4	%		$1,844.0	41.7	%		$1,635.7	39.1	%		$3,556.0	41.2	%		$3,355.9	41.2	%
Special (gains) and charges		0.3	0.0			-	-			26.2	0.2			61.9	0.6			3.7				27.0				23.3				36.1
Non-GAAP adjusted COS and gross margin		$1,891.0	46.9	%		$1,737.2	48.7	%		$5,428.2	46.7	%		$5,091.9	48.0	%		$1,840.3	41.8	%		$1,608.7	40.1	%		$3,532.7	41.6	%		$3,319.8	41.8	%

Our COS and corresponding gross profit margin (“gross margin”) are shown in the table above. ~~Our gross~~Gross margin is defined as net sales less cost of sales divided by net sales.

Our reported gross margin was ~~46.9%~~41.7% and ~~48.7%~~39.1% for the ~~third~~second quarter of ~~2017~~2021 and ~~2016,~~2020, respectively. Our reported gross margin was 41.2% for the first ~~nine~~six months of ~~2017~~both 2021 and ~~2016 was 46.5%~~2020. Special (gains) and ~~47.4%, respectively.~~charges included in items impacting COS are shown within the “Special (Gains) and Charges” table on page 36.

Excluding the impact of special (gains) and charges within COS, ~~our third~~second quarter ~~2017~~2021 adjusted gross margin was ~~46.9%~~41.8% and our adjusted gross margin for the first ~~nine~~six months of ~~2017~~2021 was ~~46.7%~~41.6%. These percentages compared against a ~~third~~second quarter ~~2016~~2020 adjusted gross margin of ~~48.7%~~40.1% and an adjusted gross margin of ~~48.0%~~41.8% for the first ~~nine~~six months of ~~2016.~~2020.

Our adjusted gross margin ~~decrease~~increased when comparing the ~~third~~second quarter of ~~2017~~2021 against the ~~third~~second quarter of ~~2016~~2020, primarily reflecting the impact of increased sales volume and ~~the comparable periods for the first nine months of 2017 and 2016 was driven primarily by higher delivered product costs and an increase in Global Energy,~~accelerated pricing, which more than offset ~~pricing and cost savings.~~increased delivered product costs, including Texas freeze impacts. Our adjusted gross margin decreased when comparing the first six months of 2021 against the first six months of 2020.

3135

Selling, General and Administrative Expense

Selling, general and administrative (“SG&A”) expenses as a percentage of sales were ~~30.5%~~27.0% and 28.4% for the ~~third~~second quarter and first six months of ~~2017~~2021, respectively, compared to ~~31.6% in 2016. For~~29.4% and 29.7% for the ~~nine month period, SG&A expenses were 32.3%~~second quarter and first six months of ~~sales in 2017 compared to 33.2% in 2016.The~~2020, respectively. The decreased SG&A ratio to sales ~~across~~in the ~~periods~~second quarter and first six months of 2021 was driven primarily by sales volume leverage, lower bad debt expense and cost savings, which more than offset higher variable compensation and investments in the business.

Special (Gains) and Charges

Special (gains) and charges reported on the Consolidated ~~Statement~~Statements of Income include the following items:


	Second Quarter Ended				Six Months Ended
	June 30				June 30
(millions)	2021		2020		2021		2020
Cost of sales
Restructuring activities		$3.7		$2.6		$21.9		$5.6
Acquisition and integration activities		-		2.2		-		2.6
COVID-19 activities, net		-		6.9		1.1		6.9
Other		-		15.3		0.3		21.0
Cost of sales subtotal		3.7		27.0		23.3		36.1

Special (gains) and charges
Restructuring activities		2.5		0.3		6.1		4.5
Acquisition and integration activities		1.3		(2.6)		2.5		2.8
Disposal and impairment activities		-		44.7		-		45.9
COVID-19 activities, net		8.3		10.2		14.7		10.2
Other		5.5		16.8		7.1		21.9
Special (gains) and charges subtotal		17.6		69.4		30.4		85.3

Operating income subtotal		21.3		96.4		53.7		121.4

Interest expense, net		-		0.7		-		0.7
Other expense (income)		19.6		-		19.6		-

Total special (gains) and charges		$40.9		$97.1		$73.3		$122.1

Third Quarter Ended

Nine Months Ended

September 30

September 30
(millions)

2017

2016

2017

2016
Cost of sales

Restructuring activities

$-

$-

$2.2

$0.9
Acquisition and integration costs

0.3

-

12.9

-
Energy related charges

-

-

-

51.0
Other

-

-

11.1

10.0
Subtotal

0.3

-

26.2

61.9

Special (gains) and charges

Restructuring activities

4.1

(7.7)

34.6

(6.8)
Acquisition and integration costs

1.8

1.7

12.7

5.0
Energy related charges

-

-

-

12.6
Venezuela related gain

(3.2)

-

(8.5)

(7.8)
Other

2.2

9.2

9.1

32.7
Subtotal

4.9

3.2

47.9

35.7

Total special (gains) and charges

$5.2

$3.2

$74.1

$97.6

For segment reporting purposes, special (gains) and charges are not allocated to reportable segments, which is consistent with our internal management reporting.

Restructuring activities

Restructuring activities are primarily related to the Institutional Advancement Program and Accelerate 2020, both of which are described below. Restructuring activities and related costs have been included as a component of both cost of sales and special (gains) and charges on the Consolidated ~~Statement~~Statements of Income. Restructuring liabilities have been classified as a component of ~~both~~ other current and other noncurrent liabilities on the Consolidated Balance ~~Sheet.~~Sheets.

~~During~~Further details related to our restructuring charges are included in Note 2.

Institutional Advancement Program

We approved a restructuring plan in 2020 focused on the Institutional business (“the Institutional Plan”) which is intended to enhance our Institutional sales and service structure and allow the sales team to capture share and penetration while maximizing service effectiveness by leveraging our ongoing investments in digital technology. In February 2021, we expanded the Institutional Plan. We expect that these restructuring charges will be completed by 2023, with total anticipated costs of $80 million ($60 million after tax) or $0.21 per diluted share. The costs are expected to be primarily cash expenditures for severance and facility closures. We also anticipate non-cash charges related to equipment disposals. We expect total program savings of approximately $50 million by the end of 2024. Actual costs may vary from these estimates depending on actions taken.

In the second quarter and first six months of ~~2017,~~2021, we ~~commenced~~have recorded total restructuring ~~and other cost-saving actions in order to streamline our operations. These actions include a reduction~~charges of ~~our global workforce by approximately 570 positions, as well as asset disposals and lease terminations. As a result of these actions, we expect to incur approximately $40 to $45~~$2.2 million ($~~30 to $35~~1.6 million after tax) or $0.01 per diluted share and $8.1 million ($6.1 million after tax) or $0.02 per diluted share, respectively, primarily related to costs to support the transition to the new sales and services structure and the disposal of equipment. We have recorded $43.3 million ($32.5 million after tax), or $0.11 per diluted share of cumulative restructuring charges under the Institutional Plan. The liability related to the Institutional Plan was $11.5 million as of June 30, 2021. The majority of the pretax charges represent net cash expenditures which isare expected to be ~~incurred during 2017.~~ paid over a period of a few months to several quarters which continue to be funded from operating activities.

The Institutional Plan has delivered $18 million of cumulative cost savings with estimated annual cost savings of $50 million in continuing operations by 2024.

Accelerate 2020

During 2018, we formally commenced a restructuring plan Accelerate 2020 (“the Plan”), to leverage technology and system investments and organizational changes. The goals of the Plan are to further simplify and automate processes and tasks, reduce complexity and management layers, consolidated facilitates and focus on key long-term growth areas by further leveraging technology and structural improvements. During 2020, we expanded the Plan for additional costs and savings to further leverage the technology and structural improvements. We now expect that the restructuring activities will be completed by the end of 2022, with total anticipated costs of $255 million ($195 million after tax), or $0.67 per diluted share, when revised for continuing operations. The remaining costs are expected to be primarily cash expenditures for severance costs and some facility closure costs relating to team reorganizations. Actual costs may vary from these estimates depending on actions taken.

We recorded restructuring charges (gains) of ~~$3.6~~($0.3) million ($~~1.3~~0.2 million after tax), or less than $0.01 per diluted share and ~~$36.6~~$1.4 million ($~~26.2~~1.6 million after tax), or ~~$0.09~~$0.01 per diluted share ~~during~~in the ~~third~~second quarter and first ~~nine~~six months of ~~2017, respectively, related primarily to employee termination costs. As of September 30, 2017, the restructuring~~2021, respectively. The liability ~~balance~~ related to ~~these activities~~the Plan was ~~$28.2 million.~~$47.3 million as of the end of the second quarter of 2021. We ~~anticipate~~have recorded $240.6 million ($185.4 million after tax), or $0.64 per diluted share, of cumulative restructuring charges under the Plan. The majority of the pretax charges ~~will~~ represent net cash expenditures which are expected to be paid over a period of a few months to several quarters and ~~will~~continues to be funded from operating activities. ~~Cash payments during~~The remaining liability is expected to be paid over a period of several quarters and will continue to be funded from operating activities.

The Plan has delivered $254 million of cumulative cost savings with estimated annual cost savings of $315 million in continuing operations by 2022.

Other Restructuring Activities

During the ~~third~~second quarter and first ~~nine~~six months of ~~2017 were~~2021, we incurred restructuring charges of $4.3 million ~~and $4.9 million, respectively.~~

Net restructuring charges related to our Energy and Combined restructuring plans during 2017 were minimal during the third quarter and first nine months of 2017. During the third quarter and first nine months of 2016, net restructuring activities included net restructuring gains of $7.7 million ($~~7.2~~5.6 million after tax), or $0.02 per diluted share and ~~$5.9~~$18.5 million ($~~7.3~~16.4 million ~~gain~~ after tax), or ~~$0.03~~$0.06 per diluted share, ~~respectively.~~ respectively, related to other immaterial restructuring activity. The charges primarily related to severance and asset write-offs.During the second quarter and first six months of 2021 and 2020, net restructuring charges related to all other prior year plans were minimal.

The restructuring liability balance ~~was $23.1~~for all other restructuring plans excluding the Accelerate 2020 and Institutional Plan were $16.8 million and ~~$39.6~~$5.9 million as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, respectively. The ~~reduction~~increase in liability was driven ~~primarily~~ by ~~severance and other cash payments.~~current period restructuring charges. The remaining ~~accrual~~liability is expected to be paid over a period of a few months to several quarters and ~~continues~~will continue to be funded from operating activities.

Cash payments during the 2021 related to all other restructuring plans excluding the Accelerate 2020 and Institutional Plan were $1.1 million.

Acquisition and integration related costs

Acquisition and integration costs reported in cost of sales on the Consolidated Statement of Income include $0.3 million ($0.2 million after tax) or less than $0.01 per diluted share in the third quarter of 2017 related to disposal of excess inventory and $12.9 million ($8.2 million) or $0.03 per diluted share during the first nine months of 2017 related primarily to recognition of accelerated rent expense upon the closure of Swisher plants and disposal of excess inventory. The first nine months of 2017 also include amounts related to recognition of fair value step-up in the Anios inventory.

Acquisition and integration costs reported in special (gains) and charges on the Consolidated ~~Statement~~Statements of Income include $1.8 million ($1.2 million after tax) or less than $0.01 per diluted share and $12.7 million ($8.5 million after tax) or $0.03 per diluted share of acquisition costs, advisory and legal fees, and integration charges for the Anios and Swisher acquisitions during the third quarter and first nine months of 2017, respectively.

~~During the third quarter and first nine months of 2016, we incurred acquisition and integration charges of $1.7~~$1.3 million ($1.0 million after tax) or less than $0.01 per diluted share and ~~$5.0~~$2.5 million ($~~3.1~~2.1 million after tax) or $0.01 per diluted share in the second quarter and first six months of 2021, respectively. ~~Further information~~Charges are related to ~~our~~Copal Invest NV, including its primary operating entity CID Lines (collectively, “CID Lines”), and Bioquell PLC (“Bioquell”) acquisitions ~~is included~~and consist of integration costs, advisory and legal fees.

Acquisition and integration costs reported in ~~Note 3.~~

~~Energy related charges~~

Oil industry activity remained depressed during 2016 when compared with 2014 levels, resulting from excess oil supply pressures, which have negatively impacted exploration and production investments in the energy industry, particularly in North America. As a result of these conditions and their corresponding impact on our business outlook, we recorded total charges of $63.6 million ($42.9 million after tax) or $0.14 per diluted share during the first nine months of 2016, comprised of inventory write downs and related disposal costs, fixed asset charges, headcount reductions and other charges. No such charges were incurred in 2017.

The inventory write-downs and related disposal costs of $31.1 million include adjustments due to the significant decline in activity and related prices of certain specific-use and other products, coupled with declines in replacement costs, as well as estimated costs to dispose the respective excess inventory. The fixed asset charges of $18.2 million resulted from the write-down of certain assets related to the reduction in certain aspects of our North American Global Energy segment, as well as abandonment of certain projects under construction. The carrying value of the corresponding fixed assets was reduced to zero. The employee termination costs of $12.8 million include a reduction in the Global Energy segment’s global workforce to better align its workforce with anticipated activity levels in the near term. As of the end of the third quarter of 2017, we had $3.2 million of corresponding severance remaining to be paid, which is expected to paid in the next several months and be funded from operating activities.

~~The charges discussed above have been included as a component of both cost of sales and~~ special (gains) and charges on the Consolidated ~~Statement~~Statements of ~~Income.~~

~~Venezuela related gain~~

Effective as of the end of the fourth quarter of 2015, we deconsolidated our Venezuelan subsidiaries. We recorded gains due to U.S. dollar cash recoveries of intercompany receivables written off at the time of deconsolidation of $3.2Income include ($2.6) million ($~~2.0~~1.7 million after tax) or $0.01 per diluted share, ~~during the third quarter of 2017~~ and ~~$8.5~~$2.8 million ($~~5.3~~2.1 million after tax) or ~~$0.02~~$0.01 per diluted share, ~~during~~in the second quarter and first ~~nine~~six months of ~~2017. In 2016,~~2020, respectively. Charges are related to CID Lines, Bioquell and the ~~Company recorded no such gains during the third quarter~~Laboratoires Anios (“Anios”) acquisitions and ~~$7.8~~consist of integration costs, advisory and legal fees, and hedge activity. Acquisition and integration costs reported in product and equipment cost of sales of $2.6 million ($~~4.9~~1.9 million after tax) or ~~$0.02~~$0.01 per diluted share ~~during~~in the first ~~nine months.~~

~~Other~~

~~During~~six months of 2020, on the ~~third quarter~~Consolidated Statements of ~~2017, we recorded charges~~Income relate to the recognition of ~~$2.2~~fair value step-up in the CID Lines inventory, severance and the closure of a facility. We also incurred $0.7 million ($~~1.4~~0.5 million after tax) or less than $0.01 per diluted share, ~~related to litigation.~~of interest expense in the first six months of 2020.

Disposal and impairment charges

Disposal and impairment charges reported in special (gains) and charges on the Consolidated Statements of Income include $44.7 million ($44.1 million after tax) or $0.15 per diluted share, and $45.9 million ($45.0 million after tax) or $0.15 per diluted share in the second quarter and first six months of 2020, respectively. During the ~~first nine months~~second quarter of ~~2017,~~2020, we recorded a $28.6 million ($28.6 million after tax) or $0.10 per diluted share impairment for a minority equity method investment due to the COVID-19 impact on the economic environment and the liquidity of the minority equity method investment. In addition, we recorded charges of ~~$20.2~~$16.1 million ($~~15.9~~15.5 million after tax) or ~~$0.05~~$0.06 per diluted share related to ~~litigation~~the disposal of Holchem Group Limited (“Holchem”) for the loss on sale and ~~a Global Energy vendor contract termination. These~~related transaction fees. Further information related to our disposal is included in Note 3.

COVID-19 activities

During the second quarter and first six months of 2021, we recorded charges ~~have been included~~of $4.1 million and $10.0 million, respectively, to protect the wages of certain employees directly impacted by the COVID-19 pandemic. We also recorded charges of $4.9 million and $8.4 million, respectively, during the second quarter and first six months of 2021 related to COVID-19 testing and related expenses. In addition, we received subsidies and government assistance, which were recorded as a ~~component~~special (gain) of ~~both cost~~($0.7) million and ($2.6) million during the second quarter and first six months of 2021, respectively. COVID-19 pandemic charges are recorded in product and equipment sales, service and lease sales, and special (gains) and charges on the Consolidated ~~Statement~~Statements of Income. Total after tax net charges related to COVID-19 pandemic were $6.4 million or $0.02 per diluted share and $11.3 million or $0.04 per diluted share during the second quarter and first six months of 2021, respectively.

During the second quarter and first ~~nine~~six months of ~~2016,~~2020, we recorded charges of $26.5 million to protect wages of certain employees directly impacted by the COVID-19 pandemic. In addition, we received subsidies and government assistance, which was recorded as a ~~charge~~special (gain) of ~~$10.0~~$(9.4) million. The specific COVID-19 pandemic charges of $1.1 million are recorded in product and equipment sales on the Consolidated Statements of Income, $5.8 million in service and lease sales on the Consolidated Statements of Income and $10.2 million in special (gains) and charges on the Consolidated Statements of Income. After tax-charges related to COVID-19 pandemic were $13.2 million or $0.05 per diluted share during the second quarter and first six months of 2020.

Other

Other special charges recorded in the first six months of 2021 in product and equipment cost of sales were $0.3 million ($~~6.3~~0.2 million after tax) or less than $0.01 per diluted share. During the second quarter and first six months of 2020, we recorded special charges of $15.3 million ($10.5 million after tax) or $0.04 per diluted share and $21.0 million ($14.3 million after tax) or $0.05 per diluted share, respectively, recorded in product and equipment cost of sales on the Consolidated Statements of Income primarily related to a Healthcare product recall in Europe.

Other special charges of $5.5 million ($4.4 million after tax) or $0.02 per diluted share ~~related to a fixed asset impairment~~ and related inventory charges. The fixed asset impairment corresponds to additional charges of certain U.S. production equipment and buildings, resulting from further lower production, initially impaired during the fourth quarter of 2015. This charge has been included as a component of cost of sales on the Consolidated Statement of Income. There were no such charges in the third quarter of 2016.

~~Additionally, during the third quarter and first nine months of 2016, we recorded charges of $9.2~~$7.1 million ($5.6 million after tax) or $0.02 per diluted share recorded in the second quarter and ~~$32.7~~first six months of 2021, respectively, relate primarily to legal reserve and certain legal charges and tax consulting fees associated with the ChampionX separation.

Other special charges of $16.8 million ($~~20.7~~12.6 million after tax) or ~~$0.07~~$0.04 per diluted share and $21.9 million ($16.5 million after tax) or $0.06 per diluted share recorded in the second quarter and first six months of 2020, respectively, relate primarily ~~consisting of litigation related charges. These~~to legal reserve and certain legal charges ~~have been included as a component of~~which are recorded in special (gains) and charges on the Consolidated ~~Statement~~Statements of Income.

Other expense (income)

During the second quarter and first six months of 2021, we incurred settlement expense recorded in other expense (income) on the Consolidated Statements of Income of $19.6 million ($14.9 million after tax), or $0.05 per diluted share, related to U.S. pension plan lump-sum payments to retirees.

Operating Income and Operating Income Margin

Third Quarter Ended

Nine Months Ended

September 30

September 30
(millions)

2017

2016

Change

2017

2016

Change
Reported GAAP operating income

$579.8

$574.1

1
%

$1,392.1

$1,358.1

3
%
Special (gains) and charges

5.2

3.2

74.1

97.6

Non-GAAP adjusted operating income

585.0

577.3

1

1,466.2

1,455.7

1

Effect of foreign currency translation

(11.4)

(9.9)

(16.0)

(20.0)

Non-GAAP adjusted fixed currency operating income

$573.6

$567.4

1
%

$1,450.2

$1,435.7

1
%

Third Quarter Ended

Nine Months Ended

September 30

September 30

(percent)

2017

2016

2017

2016

Reported GAAP operating income margin

16.3
%

17.0
%

13.7
%

13.9
%

Non-GAAP adjusted operating income margin

16.4
%

17.0
%

14.4
%

14.9
%

Non-GAAP adjusted fixed currency operating income margin

16.4
%

17.0
%

14.4
%

14.8
%


	Second Quarter Ended								Six Months Ended
	June 30								June 30
(millions)	2021			2020			Change		2021			2020			Change
Reported GAAP operating income		$447.8			$192.0		133	%		$745.1			$568.2		31	%
Special (gains) and charges		21.3			96.4					53.7			121.4
Non-GAAP adjusted operating income		469.1			288.4		63	%		798.8			689.6		16	%
Effect of foreign currency translation		2.3			19.5					2.8			27.3
Non-GAAP adjusted fixed currency operating income		$471.4			$307.9		53	%		$801.6			$716.9		12	%

	Second Quarter Ended								Six Months Ended
	June 30								June 30
(percent)	2021			2020					2021			2020
Reported GAAP operating income margin		14.2	%		7.1	%				12.3	%		10.0	%
Non-GAAP adjusted operating income margin		14.8	%		10.7	%				13.2	%		12.1	%
Non-GAAP adjusted fixed currency operating income margin		14.8	%		10.9	%				13.2	%		12.1	%

Our operating income and corresponding operating income margin are shown in the previous tables. Operating income margin is defined as operating income divided by net sales.

~~Reported~~Our reported operating income increased 1%133% and 3%31% in the ~~third~~second quarter and first ~~nine~~six months of ~~2017,~~2021, respectively, versus the comparable periods of ~~2016. Excluding~~2020. Our reported operating income for 2021 and 2020 was impacted by special (gains) and charges; excluding the impact of special (gains) and charges from ~~2017~~2021 and ~~2016~~2020 reported results, our adjusted operating income increased 1%63% and 16% in ~~both~~ the ~~third quarter and the first nine months of 2017.~~

~~Adjusted fixed currency operating income increased 1% in both the third quarter and the first nine months of 2017, when compared against the third~~second quarter and first ~~nine~~six months of ~~2016. The net~~2021, respectively.

As shown in the previous table, foreign currency had a 10 percentage points and 4 percentage points impact on adjusted operating income growth for the second quarter and first six months of ~~acquisitions and divestitures added approximately 1 and~~2021, respectively. Foreign currency had a 3 percentage points ~~respectively, to our third~~and 2 percentage points impact on adjusted operating income growth for the second quarter and first ~~nine~~six months of ~~2017 adjusted fixed currency operating income growth rates.~~2020, respectively.

��

Our third quarter and first nine months of 2017 adjusted fixed currency operating income increase was driven by pricing, volume growth and cost savings in our Global Institutional, Global Industrial and Other ~~segments, which more than offset higher delivered product costs, hurricane impacts, investments in the business, and the impact of Global Energy.~~Expense (Income)


	Second Quarter Ended						Six Months Ended
	June 30						June 30

(millions)	2021		2020		Change		2021		2020		Change
Reported GAAP other expense (income)		$2.5		($15.1)	(117)	%		($14.5)		($30.5)	(52)	%
Special (gains) and charges		19.6		-				19.6		-
Non-GAAP adjusted other expense (income)		($17.1)		($15.1)	13	%		($34.1)		($30.5)	12	%

~~Interest Expense, Net~~

~~Net interest~~Other expense was ~~$55.1 million and $64.9~~$2.5 million in the ~~third~~second quarter of ~~2017~~2021 and ~~2016, respectively. Net interest expense~~Other income was $15.1 million in the second quarter of 2020. Other income was $14.5 million and $30.5 million in the first ~~nine~~six months of ~~2017~~2021 and ~~2016 was $177.2 million and $196.3 million,~~2020, respectively. The decrease in Other income was driven by a $19.6 million settlement expense related to U.S. pension plan lump-sum payments to retirees.

Interest Expense, Net


	Second Quarter Ended						Six Months Ended
	June 30						June 30

(millions)	2021		2020		Change		2021		2020		Change
Reported GAAP interest expense, net		$45.6		$58.7	(22)	%		$97.3		$107.0	(9)	%
Special (gains) and charges		-		0.7				-		0.7
Non-GAAP adjusted interest expense, net		$45.6		$58.0	(21)	%		$97.3		$106.3	(8)	%

Reported net interest expense was $45.6 million and $58.7 million in the second quarter of 2021 and 2020, respectively. Reported net interest expense was $97.3 million and $107.0 million in the first six months of 2021 and 2020, respectively. The decrease in interest expense when comparing ~~2017~~2021 against ~~2016~~2020 was driven primarily by ~~an increased mix of lower cost Euro~~a reduction in the average interest rate and ~~lower interest rates on refinanced debt.~~average debt levels.

Provision for Income Taxes

The following table provides a summary of our tax rate:


	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									Second Quarter Ended				Six Months Ended
									June 30				June 30
(percent)	2017		2016		2017		2016		2021		2020		2021		2020
Reported GAAP tax rate	24.6	%	25.5	%	21.7	%	24.7	%	21.5	%	9.5	%	23.0	%	12.4	%
Tax rate impact of:
Special gains and charges	0.3		0.6		0.4		1.0
Special (gains) and charges									(0.4)		1.9		(0.3)		0.9
Discrete tax items	(1.6)		(0.9)		1.9		(0.3)		(1.8)		9.1		(3.2)		7.2
Non-GAAP adjusted tax rate	23.3	%	25.2	%	24.0	%	25.4	%	19.3	%	20.5	%	19.5	%	20.5	%

Our reported tax rate was 21.5% and 9.5% for ~~2017~~the second quarter of 2021 and ~~2016~~2020, respectively, and 23.0% and 12.4% for the first six months of 2021 and 2020, respectively. The change in our tax rate for the second quarter and first six months of 2021 versus the comparable period of 2020 was driven primarily by discrete tax items. The change in our tax rate includes the tax ~~rate~~ impact of special ~~gains~~(gains) and charges and discrete tax items, which have impacted the comparability of our historical reported tax rates, as amounts included in our special ~~gains~~(gains) and charges are derived from tax jurisdictions with rates that vary from our ~~overall non-GAAP adjusted~~ tax rate, and discrete tax items are not necessarily consistent across periods. The tax impact of special ~~gains~~(gains) and charges and discrete tax items will likely continue to impact comparability of our reported tax rate in the future.

~~Our third quarter 2017 reported~~We recognized net tax expense related to discrete tax items of $7.7 million and $23.8. million in the second quarter and first six months of 2021, respectively. This included ~~$2.8 million of net~~ tax ~~benefits on special gains and charges and net~~ expense of ~~$8.3~~$9.5 million ~~associated with discrete tax items. For~~related to prior year returns in the second quarter and first ~~nine~~six months of ~~2017, our reported~~2021, and a deferred tax ~~expense included $20.9~~benefit of $0.9 million ~~of net~~and deferred tax ~~benefits on special gains and charges and net benefits of~~expense $24.2 million associated with ~~discrete tax items.~~

~~Our third~~transferring certain intangible property between affiliates in the second quarter and first ~~nine~~six months of ~~2017 reported~~2021, respectively. Share-based compensation excess tax ~~expense~~benefit was ~~lower than the comparable periods of 2016 primarily due to $2.4~~$4.2 million and ~~$29.2~~$10.8 million ~~of excess tax benefits recorded~~ in the ~~third~~second quarter and first ~~nine~~six months of ~~2017, respectively, resulting from the adoption~~2021. The amount of ~~accounting changes regarding the treatment of~~this tax ~~benefits on share-based compensation. The extent of excess tax benefits~~benefit is subject to variation in stock price and ~~stock option~~award exercises. ~~We expect excess tax benefits to impact the rate by approximately 2% to 3% for the full year of 2017.~~

The remaining discrete tax expense of $3.3 million and $0.9 million during the quarter and first six months of 2021, respectively, was primarily due to other changes in estimates.

We recognized net discrete tax benefits of $22.5 million and $44.4 million in the ~~third~~second quarter and first six months of ~~2017 were driven~~2020, respectively. This includes share-based compensation excess tax benefit of $23.3 million and $45.6 million in the second quarter and first six months of 2020, respectively. Additionally, we recognized expense of $0.6 million and $4.5 million primarily ~~by recognizing adjustments from~~related to the filing ~~our 2016 U.S. federal~~of prior year foreign tax returns and other income tax ~~return~~adjustments in the second quarter and ~~international adjustments~~first six months of 2020, respectively. The remaining discrete expense of $0.2 million and benefit of $3.3 million was due to ~~changes in estimates, partially offset by~~ the ~~release~~accrual of ~~reserves for~~interest on uncertain tax positions ~~due to~~offset by reserve released during the ~~expiration~~quarter and the first six months of ~~statute of limitations in state tax matters.~~ 2020, respectively.

The ~~corresponding impact of these items on the reported tax rate is shown~~decrease in the ~~previous table.~~

~~Our third~~second quarter ~~2016 reported tax expense included $3.8 million of net tax benefits on special gains~~ and ~~charges and net expense of $4.5 million associated with discrete tax items. For the~~ first ~~nine~~six months of 2016, our reported tax expense included $36.8 million of net tax benefits on special gains and charges and net expense of $3.6 million associated with discrete tax items. The corresponding impact of these items on the reported tax rate is shown in the previous table.

Third quarter 2016 discrete tax items net expense was driven primarily by recognizing adjustments from filing our 2015 U.S. federal income tax return, partially offset by the 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. Net expense related to discrete tax items for the first nine months of 2016 was also impacted by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in non-U.S. jurisdictions.

~~The change in the 2017~~2021 adjusted tax rate compared to ~~2016~~2020 was primarily ~~driven by global~~due to the geographic mix of income and tax ~~planning strategies and geographic mix.~~planning.

Net Income from Continuing Operations Attributable to Ecolab


	Third Quarter Ended						Nine Months Ended
	September 30						September 30

													Second Quarter Ended						Six Months Ended
													June 30						June 30
(millions)	2017		2016		Change		2017		2016		Change		2021		2020		Change		2021		2020		Change
Reported GAAP net income attributable to Ecolab		$392.4		$374.1	5	%		$942.5		$863.3	9	%
Reported GAAP net income from continuing operations attributable to Ecolab														$310.8		$128.9	141	%		$504.4		$420.9	20	%
Adjustments:
Special (gains) and charges, after tax		2.4		(0.6)				53.2		60.8				34.1		83.3				58.3		101.8
Discrete tax net expense (benefit)		8.3		4.5				(24.2)		3.6				7.7		(22.5)				23.8		(44.4)
Non-GAAP adjusted net income attributable to Ecolab		$403.1		$378.0	7	%		$971.5		$927.7	5	%
Non-GAAP adjusted net income from continuing operations attributable to Ecolab														$352.6		$189.7	86	%		$586.5		$478.3	23	%

Diluted EPS from Continuing Operations


	Second Quarter Ended						Six Months Ended
	June 30						June 30
(dollars)	2021		2020		Change		2021		2020		Change
Reported GAAP diluted EPS from continuing operations		$1.08		$ 0.44	145	%		$1.75		$ 1.44	22	%
Adjustments:
Special (gains) and charges, after tax		0.12		0.29				0.20		0.35
Discrete tax net expense (benefit)		0.02		(0.08)				0.08		(0.15)
Non-GAAP adjusted diluted EPS from continuing operations		$1.22		$ 0.65	88	%		$2.03		$ 1.64	24	%

Third Quarter Ended

Nine Months Ended

September 30

September 30
(dollars)

2017

2016

Change

2017

2016

Change
Reported GAAP diluted EPS

$1.34

$ 1.27

6
%

$ 3.20

$ 2.91

10
%
Adjustments:

Special (gains) and charges

0.01

-

0.18

0.20

Discrete tax net expense (benefit)

0.03

0.02

(0.08)

0.01

Non-GAAP adjusted diluted EPS

$1.37

$ 1.28

7
%

$ 3.30

$ 3.12

6
%

Per share amounts in the above tables do not necessary sum due to rounding.

Currency translation had ~~minimal~~a favorable impact of approximately $0.06 and $0.08 per share on diluted EPS for ~~both~~ the ~~third~~second quarter and first ~~nine~~six months of ~~2017,~~2021, respectively, when compared to the ~~third~~comparable periods of 2020.

DISCONTINUED OPERATIONS

The ChampionX business met the criteria to be reported as discontinued operations and the historical results of ChampionX, including the results of operations, are reported as discontinued operations for all periods presented. The net loss from discontinued operations, net of tax was $2,163.9 million and $2,172.5 million in the second quarter and first ~~nine~~six months of ~~2016.~~2020, respectively.

During the second quarter of 2020, in connection with the ChampionX Separation, Ecolab received cash of $527 million and $1,051 million of non-cash consideration of approximately 5 million shares of Ecolab common stock for the ChampionX net assets, including cumulative translation adjustment, of $3,717 million, resulting in a loss.

Special (gains) and charges of $2,186.1 million and $2,222.7 million in the second quarter and first six months of 2020, respectively primarily relate to the loss on separation, transaction fees, and other professional fees incurred to support the Transaction.

3540

SEGMENT PERFORMANCE

The non-U.S. dollar functional international amounts included within our reportable segments are based on translation into U.S. dollars at the fixed currency exchange rates used by management for 2021. The difference between the fixed currency exchange rates and the actual currency exchange rates is reported as “effect of foreign currency translation” in the following tables. All other accounting policies of the reportable segments are consistent with U.S. GAAP and the accounting policies described in Note 2 of our Annual Report on Form 10-K for the year ended December 31, 2020. Additional information about our reportable segments is included in Note 16.

Fixed currency net sales and operating income for the ~~third~~second quarter and first ~~nine~~six months of ~~2017~~2021 and ~~2016~~2020 for ~~each of~~ our reportable segments ~~were as follows:~~are shown in the following tables.



Net Sales	Third Quarter Ended						Nine Months Ended						Second Quarter Ended							Six Months Ended
	September 30						September 30
													June 30							June 30
(millions)	2017		2016		Change		2017		2016		Change		2021			2020		Change		2021		2020		Change
Global Industrial		$1,248.1		$1,202.1	4	%		$3,586.5		$3,468.4	3	%		$1,555.4			$1,498.5	4	%		$2,989.3		$2,963.5	1	%
Global Institutional		1,225.1		1,149.2	7			3,524.3		3,315.0	6
Global Energy		796.7		771.2	3			2,346.1		2,305.6	2
Global Institutional & Specialty														978.9			733.0	34			1,837.4		1,820.2	1
Global Healthcare & Life Sciences														303.5			321.4	(6)			597.2		578.2	3
Other		221.7		209.2	6			633.8		598.1	6			306.6			249.1	23			577.9		528.7	9
Corporate														35.0	��		12.3	185			68.2		12.3	454
Subtotal at fixed currency		3,491.6		3,331.7	5			10,090.7		9,687.1	4			3,179.4			2,814.3	13			6,070.0		5,902.9	3
Effect of foreign currency translation		71.7		54.4				96.9		113.6				(16.7)			(128.6)				(22.3)		(196.6)
Consolidated reported GAAP net sales		$3,563.3		$3,386.1	5	%		$10,187.6		$9,800.7	4	%		$3,162.7			$2,685.7	18	%		$6,047.7		$5,706.3	6	%


Operating Income	Third Quarter Ended						Nine Months Ended						Second Quarter Ended							Six Months Ended
	September 30						September 30
													June 30							June 30
(millions)	2017		2016		Change		2017		2016		Change		2021			2020		Change		2021		2020		Change
Global Industrial		$207.4		$204.1	2	%		$501.9		$510.1	(2)	%		$263.3			$287.8	(9)	%		$482.5		$497.4	(3)	%
Global Institutional		274.2		262.1	5			726.1		697.8	4
Global Energy		89.7		102.6	(13)			236.1		244.9	(4)
Global Institutional & Specialty														138.6			(38.0)	*			201.7		145.7	38
Global Healthcare & Life Sciences														48.3			69.0	(30)			93.9		93.0	1
Other		44.0		40.4	9			110.9		108.2	2			51.3			20.8	147			84.2		42.6	98
Corporate		(46.9)		(45.0)				(198.9)		(222.9)				(51.4)			(128.1)	(60)			(114.4)		(183.2)	(38)
Subtotal at fixed currency		568.4		564.2	1			1,376.1		1,338.1	3			450.1			211.5	113			747.9		595.5	26
Effect of foreign currency translation		11.4		9.9				16.0		20.0				(2.3)			(19.5)				(2.8)		(27.3)
Consolidated reported GAAP operating income		$579.8		$574.1	1	%		$1,392.1		$1,358.1	3	%		$447.8			$192.0	133	%		$745.1		$568.2	31	%

* Not meaningful.

3641

The following tables reconcile the impact of acquisitions and divestitures within our reportable segments.

Second Quarter Ended

June 30

Net Sales

2021

2020

(millions)

Fixed
Currency

Impact of Acquisitions and Divestitures

Acquisition Adjusted

Fixed
Currency

Impact of Acquisitions and Divestitures

Acquisition Adjusted

Global Industrial

$1,555.4

($26.2)

$1,529.2

$1,498.5

($19.5)

$1,479.0

Global Institutional & Specialty

978.9

(3.2)

975.7

733.0

Global Healthcare & Life Sciences

303.5

(6.6)

296.9

321.4

(0.2)

321.2

Other

306.6

249.1

Corporate

35.0

(35.0)

12.3

(12.3)

Subtotal at fixed currency

3,179.4

(71.0)

3,108.4

2,814.3

(32.0)

2,782.3

Effect of foreign currency translation

(16.7)

(128.6)

Total reported net sales

$3,162.7

$2,685.7

Operating Income

2021

2020

(millions)

Fixed
Currency

Impact of Acquisitions and Divestitures

Acquisition Adjusted

Fixed
Currency

Impact of Acquisitions and Divestitures

Acquisition Adjusted

Global Industrial

$263.3

($1.2)

$262.1

$287.8

($2.3)

$285.5

Global Institutional & Specialty

138.6

0.6

139.2

(38.0)

Global Healthcare & Life Sciences

48.3

0.2

48.5

69.0

(0.1)

68.9

Other

51.3

20.8

Corporate

(30.1)

(31.7)

Non-GAAP adjusted fixed currency operating income

471.4

(0.4)

471.0

307.9

(2.4)

305.5

Special (gains) and charges

21.3

96.4

Subtotal at fixed currency

450.1

211.5

Effect of foreign currency translation

(2.3)

(19.5)

Total reported operating income

$447.8

$192.0

Six Months Ended

June 30

Net Sales

2021

2020

(millions)

Fixed
Currency

Impact of Acquisitions and Divestitures

Acquisition Adjusted

Fixed
Currency

Impact of Acquisitions and Divestitures

Acquisition Adjusted

Global Industrial

$2,989.3

(59.3)

$2,930.0

$2,963.5

(36.7)

$2,926.8

Global Institutional & Specialty

1,837.4

(6.0)

1,831.4

1,820.2

Global Healthcare & Life Sciences

597.2

(9.1)

588.1

578.2

(0.6)

577.6

Other

577.9

528.7

Corporate

68.2

(68.2)

12.3

(12.3)

Subtotal at fixed currency

6,070.0

(142.6)

5,927.4

5,902.9

(49.6)

5,853.3

Effect of foreign currency translation

(22.3)

(196.6)

Total reported net sales

$6,047.7

$5,706.3

Operating Income

2021

2020

(millions)

Fixed
Currency

Impact of Acquisitions and Divestitures

Acquisition Adjusted

Fixed
Currency

Impact of Acquisitions and Divestitures

Acquisition Adjusted

Global Industrial

$482.5

(2.4)

$480.1

$497.4

(2.4)

$495.0

Global Institutional & Specialty

201.7

1.6

203.3

145.7

Global Healthcare & Life Sciences

93.9

0.2

94.1

93.0

(0.1)

92.9

Other

84.2

42.6

Corporate

(60.7)

(61.8)

Non-GAAP adjusted fixed currency operating income

801.6

(0.6)

801.0

716.9

(2.5)

714.4

Special (gains) and charges

53.7

121.4

Subtotal at fixed currency

747.9

595.5

Effect of foreign currency translation

(2.8)

(27.3)

Total reported operating income

$745.1

$568.2

Unless otherwise noted, the following segment performance commentary compares the ~~third~~second quarter and first ~~nine~~six months of ~~2017~~2021 against the ~~third~~second quarter and first ~~nine~~six months of ~~2016.~~2020.

Global Industrial


	Third Quarter Ended						Nine Months Ended
	September 30						September 30
	2017			2016			2017			2016

													Second Quarter Ended						Six Months Ended
													June 30						June 30
													2021			2020			2021			2020
Sales at fixed currency (millions)		$1,248.1			$1,202.1			$3,586.5			$3,468.4			$1,555.4			$1,498.5			$2,989.3			$2,963.5
Sales at public currency (millions)		1,284.3			1,230.2			3,636.8			3,527.6			1,544.5			1,424.3			2,975.5			2,857.4


Volume		2	%					2	%					2	%					(1)	%
Price changes		1	%					1	%					1	%					1	%
Acquisition adjusted fixed currency sales change		3	%					3	%					3	%					0	%
Acquisitions and divestitures		1	%					0	%					-	%					1	%
Fixed currency sales change		4	%					3	%					4	%					1	%
Foreign currency translation		1	%					(0)	%					4	%					3	%
Public currency sales change		4	%					3	%					8	%					4	%


Operating income at fixed currency (millions)		$207.4			$204.1			$501.9			$510.1			$263.3			$287.8			$482.5			$497.4
Operating income at public currency (millions)		214.1			209.7			511.6			521.6			260.8			272.5			479.6			477.3


Fixed currency operating income change		2	%					(2)	%					(9)	%					(3)	%
Fixed currency operating income margin		16.6	%		17.0	%		14.0	%		14.7	%		16.9	%		19.2	%		16.1	%		16.8	%
Acquisition adjusted fixed currency operating income change		2	%					(2)	%					(8)	%					(3)	%
Acquisition adjusted fixed currency operating income margin		16.7	%		17.0	%		14.1	%		14.7	%		17.1	%		19.3	%		16.4	%		16.9	%
Public currency operating income change		2	%					(2)	%					(4)	%					0	%

Percentages in the above table do not ~~necessary~~necessarily sum due to rounding.

Net Sales

Fixed currency sales for Global Industrial increased in the ~~third~~second quarter and first ~~nine~~six months of ~~2017, benefitting from volume gains and pricing. At a regional level, both the third quarter and first nine months sales showed good~~2021, as strong growth in ~~Greater China, North America~~Water and ~~Latin America.~~Paper, led by recovering market conditions and new business wins, as well as improving trends in Food & Beverage, more than offset lower Downstream sales that reflected low-margin refinery business exits.

At an operating segment level, Water fixed currency sales increased 7% and 4% ~~(3%~~in the second quarter and first six months of 2021, respectively,as strong new business wins leveraged recovering markets. Light industry water treatment sales showed very strong growth, led by good gains in food & beverage, light manufacturing and data centers. Heavy industry sales saw good growth driven by strong performance in primary metals. Mining declined modestly as good results from our strategic shift toward precious metals and fertilizers were more than offset by soft legacy coal and alumina markets. Food & Beverage fixed currency sales increased 2% (1% acquisition adjusted) and 2% (0% acquisition adjusted) in the ~~third~~second quarter ~~of 2017~~ and ~~4% (2% acquisition adjusted) in the~~ first ~~nine~~six months of 2017. Light industry sales growth was led by innovative technology and service offerings. Heavy industry sales declined modestly in the quarter impacted by hurricanes and exit of low margin business. Mining sales were strong as2021, respectively,reflecting new business wins ~~led~~and recovering markets. Globally we realized strong recovery in beverage and brewing, stable dairy plant and protein sales, and declines in food and animal health as good underlying sales compared against COVID-19 related buying surges last year. Downstream fixed currency sales decreased 6% and 12% in the ~~growth.~~ ~~Food & Beverage~~second quarter and first six months of 2021, respectively, as petrochemical sales growth, rising refinery operating rates and increased business wins were more than offset by low-margin refinery business exits. Paper fixed currency sales increased 5%10% and 6% in the ~~third~~second quarter ~~of 2017~~ and ~~4% in the~~ first ~~nine~~six months of ~~2017, benefiting from~~2021, respectively, driven by improved end markets and strong new business ~~wins~~wins. Board & packaging showed very strong growth and ~~pricing, which~~graphics recovered from last year’s sharp decline as market trends stabilized; these more than offset ~~generally flat industry trends. Growth was led by the food, beverage and brew markets.~~ ~~Paper~~ ~~fixed currency~~lower tissue sales ~~were flat in the third quarter of 2017 reflecting the impact of hurricanes and increased 2% in the first nine months of 2017, benefiting from~~which compared to very strong ~~sales efforts and business wins, which more than offset challenging market conditions in China and Europe.~~ ~~Textile Care~~ ~~fixed currency sales increased 1% in the third quarter of 2017 and 2% in the first nine months of 2017, benefiting from new customer accounts in Europe.~~ ~~Life Sciences~~ fixed currency sales increased 9% in the third quarter of 2017 and 7% in the first nine months of 2017. Good growth from business wins and pricing execution, led by strong sales of cleaning and disinfection programs in the pharmaceutical market and better program penetration in the personal care market.COVID-19 surge demand last year.

Operating Income

Fixed currency operating income ~~for Global Industrial increased in the third quarter of 2017,~~ and ~~decreased in the first nine months of 2017. Fixed~~fixed currency operating income margins decreased for Global Industrial in ~~both~~ the ~~third~~second quarter and first ~~nine~~six months of ~~2017. Acquisitions had minimal impact on both the fixed currency operating income growth and fixed currency operating income margins.~~2021.

Acquisition adjusted fixed currency operating income margins decreased ~~0.3 and 0.6~~2.2 percentage points during the ~~third~~second quarter ~~and first nine months~~ of ~~2017, respectively, negatively impacted by approximately 2.3 and 2.0 percentage points for the respective periods, related to higher~~2021, as accelerating pricing generally offset increased delivered product ~~costs and investments~~cost in the ~~business. Favorable~~quarter while the 0.7 percentage point positive impact from volume growth was more than offset by the 2.2 percentage point negative impact of ~~sales volume gains~~higher variable compensation and pricing, and cost savings initiatives, added approximately 1.7 and 1.4 percentage points during the third quarter and first nine months of 2017. Hurricanes had an estimated negative 0.3 percentage point impact on the third quarter results and minimal impact on the first nine months of 2017.

~~Global Institutional~~

Third Quarter Ended

Nine Months Ended

September 30

September 30


2017

2016

2017

2016

Sales at fixed currency (millions)

$1,225.1

$1,149.2

$3,524.3

$3,315.0

Sales at public currency (millions)

1,248.0

1,164.1

3,551.4

3,349.4

Volume

1
%

1
%

Price changes

2
%

1
%

Acquisition adjusted fixed currency sales change

2
%

3
%

Acquisitions and divestitures

5
%

3
%

Fixed currency sales change

7
%

6
%

Foreign currency translation

1
%

(0)
%

Public currency sales change

7
%

6
%

Operating income at fixed currency (millions)

$274.2

$262.1

$726.1

$697.8

Operating income at public currency (millions)

277.4

264.6

729.6

703.2

Fixed currency operating income change

5
%

4
%

Fixed currency operating income margin

22.4
%

22.8
%

20.6
%

21.0
%

Acquisition adjusted fixed currency operating income change

2
%

1
%

Acquisition adjusted fixed currency operating income margin

22.9
%

23.0
%

20.9
%

21.2
%

Public currency operating income change

5
%

4
%

~~Percentages in the above table do not necessary sum due to rounding.~~

~~Net Sales~~

Fixed currency sales for Global Institutional increased in the third quarter and first nine months of 2017, driven by volume growth, acquisitions and pricing gains. At a regional level, both the third quarter and first nine months sales increase was led by good growth in Latin America and North America.

~~At an operating segment level,~~ ~~Institutional~~ fixed currency sales were flat in the third quarter of 2017 and increased 1% in the first nine months of 2017. Acquisition adjusted fixed currency sales increased 1% in the third quarter and 2% in the first nine months of 2017, when adjusting for the divestiture of the restroom cleaning business initially acquired through the Swisher transaction. Global lodging demand continued to show moderate growth while global full service restaurant industry foot traffic remained weak, particularly in North America. Sales also include an estimated impact from the hurricanes. ~~Specialty~~ fixed currency sales increased 6% in the third quarter of 2017 and 7% in the first nine months of 2017, led primarily by new account wins and growth in global quick service accounts, leveraging generally modest industry trends. New business gains remain strong, driven by increased service coverage, new product innovations, additional customer solutions and a continued focus among our customers on food safety. ~~Healthcare~~ fixed currency sales increased 45% in the third quarter of 2017 and 40% in the first nine months of 2017. Fixed currency sales increased 1% in the third quarter and 4% in the first nine months of 2017, when adjusted for the Anios acquisition, with modest growth for Healthcare in North America and Europe in the quarter.

~~Operating Income~~

Fixed currency operating income for our Global Institutional segment increased in both the third quarter and first nine months of 2017. Fixed currency operating income margins decreased in both the third quarter and first nine months of 2017. Acquisitions had a positive impact on fixed currency operating income growth and minimal impact on fixed currency operating income margins.

Texas freeze impact. Acquisition adjusted fixed currency operating income margins decreased ~~by 0.1 percentage points and 0.3~~0.5 percentage points during the ~~third quarter and~~ first ~~nine~~six months of ~~2017, respectively, negatively impacted~~2021, as the 2.1 percentage point positive impacts from cost savings and favorable pricing were more than offset by ~~approximately 1.7~~the 2.5 percentage ~~points in both respective periods, related to innovation and customer investments and~~point negative impact of higher delivered product ~~costs. Sales volume~~costs including the Texas Freeze and pricing gains favorably impacted acquisition adjusted fixed currency operating income margins by adding approximately 1.6 and 1.5 percentage points in the third quarter and first nine months of 2017, respectively. Hurricanes had an estimated negative 0.3 percentage point impact on the third quarter results and minimal impact on the first nine months of 2017.increased variable compensation.

3843

Global Institutional & Specialty

~~Global Energy~~


	Second Quarter Ended						Six Months Ended
	June 30						June 30
	2021			2020			2021			2020
Sales at fixed currency (millions)		$978.9			$733.0			$1,837.4			$1,820.2
Sales at public currency (millions)		976.0			710.1			1,833.4			1,780.2

Volume		31	%					4	%
Price changes		2	%					2	%
Acquisition adjusted fixed currency sales change		33	%					1	%
Acquisitions and divestitures		-	%					-	%
Fixed currency sales change		34	%					1	%
Foreign currency translation		3	%					2	%
Public currency sales change		37	%					3	%

Operating income at fixed currency (millions)		$138.6			($38.0)			$201.7			$145.7
Operating income at public currency (millions)		138.8			(38.0)			202.0			144.0

Fixed currency operating income change		*						38	%
Fixed currency operating income margin		14.2	%		(5.2)	%		11.0	%		8.0	%
Acquisition adjusted fixed currency operating income change		*						40	%
Acquisition adjusted fixed currency operating income margin		14.3	%		(5.2)	%		11.1	%		8.0	%
Public currency operating income change		*						40	%

Third Quarter Ended

Nine Months Ended

September 30

September 30


2017

2016

2017

2016

Sales at fixed currency (millions)

$796.7

$771.2

$2,346.1

$2,305.6

Sales at public currency (millions)

806.5

780.2

2,361.8

2,318.6

Volume

5
%

3
%

Price changes

-
%

(1)
%

Acquisition adjusted fixed currency sales change

4
%

3
%

Acquisitions and divestitures

(1)
%

(1)
%

Fixed currency sales change

3
%

2
%

Foreign currency translation

0
%

0
%

Public currency sales change

3
%

2
%

Operating income at fixed currency (millions)

$89.7

$102.6

$236.1

$244.9

Operating income at public currency (millions)

91.3

104.3

238.9

247.4

Fixed currency operating income change

(13)
%

(4)
%

Fixed currency operating income margin

11.3
%

13.3
%

10.1
%

10.6
%

Acquisition adjusted fixed currency operating income change

(11)
%

0
%

Acquisition adjusted fixed currency operating income margin

11.2
%

13.1
%

10.0
%

10.3
%

Public currency operating income change

(12)
%

(3)
%

Percentages in the above table do not ~~necessary~~necessarily sum due to rounding.

* Not meaningful

Net Sales

Fixed currency sales for Global ~~Energy had a strong~~Institutional & Specialty increased in the second quarter and first six months of 2021. Strong growth in the ~~well stimulation~~Institutional operating segment reflected recovering markets, new business ~~while~~wins and pricing. Specialty sales declined versus last year’s strong gain that benefited from COVID-19 related orders.

At an operating segment level, Institutional fixed currency sales increased 61% and 6% (5% acquisition adjusted) in the ~~production~~second quarter and first six months of 2021, respectively, as the U.S. market showed an ongoing recovery in restaurant traffic. This recovery, along with recent business ~~showed~~wins and sales initiatives, drove the strong results. While social distancing mandates eased in the U.S. through the second quarter and drove increased consumer traffic and in-unit dining, such mandates continued in many other regions as they lagged in their vaccinations and infection rate reductions, continuing to impact consumer activity. Specialty fixed currency sales decreased 6% and 8% in the second quarter and first six months of 2021, respectively, reflecting comparison to the very strong second quarter 2020 for food retail, where strong COVID-19 driven buying significantly boosted sales. Quickservice sales increased modestly as recovering global traffic more than offset sanitizer use declines from last year’s peak levels. Food retail sales declined versus the very strong demand in 2020.

Operating Income

Fixed currency operating income and fixed currency operating income margins increased for our Global Institutional & Specialty segment in the second quarter and first six months of 2021.

Acquisition adjusted fixed currency operating income margins increased 19.5 percentage points during the second quarter of 2021, as the 21.6 percentage point positive impacts from significant volume improvement, lower bad debt expense and favorable pricing more than offset the 2.4 percentage point negative impact of increased variable compensation. Acquisition adjusted fixed currency operating income margins increased 3.1 percentage points during the first six months of 2021 as the 4.7 percentage point positive impacts from favorable pricing, lower bad debt expense and cost savings more than offset the 1.4 percentage point negative impact of increased variable compensation.

Global Healthcare & Life Sciences


	Second Quarter Ended						Six Months Ended
	June 30						June 30
	2021			2020			2021			2020
Sales at fixed currency (millions)		$303.5			$321.4			$597.2			$578.2
Sales at public currency (millions)		301.8			299.4			594.5			544.1

Volume		(10)	%					1	%
Price changes		3	%					2	%
Acquisition adjusted fixed currency sales change		(8)	%					2	%
Acquisitions and divestitures		2	%					1	%
Fixed currency sales change		(6)	%					3	%
Foreign currency translation		7	%					6	%
Public currency sales change		1	%					9	%

Operating income at fixed currency (millions)		$48.3			$69.0			$93.9			$93.0
Operating income at public currency (millions)		48.2			63.0			93.6			85.5

Fixed currency operating income change		(30)	%					1	%
Fixed currency operating income margin		15.9	%		21.5	%		15.7	%		16.1	%
Acquisition adjusted fixed currency operating income change		(30)	%					1	%
Acquisition adjusted fixed currency operating income margin		16.3	%		21.5	%		16.0	%		16.1	%
Public currency operating income change		(23)	%					9	%

Percentages in the above table do not necessarily sum due to rounding.

Net Sales

Fixed currency sales for the Global Healthcare & Life Sciences decreased in the second quarter of 2021 compared to a ~~modest decline, as~~22% increase last year when sales benefited from strong COVID-19 related demand and increased in the first six months of 2021; however, underlying Healthcare and Life Sciences sales growth remained strong, driven by new business wins and increased hygiene awareness.

At an operating segment level, Healthcare fixed currency sales decreased 3% (6% acquisition adjusted) in ~~North America was offset~~the second quarter of 2021 and increased 4% (2% acquisition adjusted) in the first six months of 2021, reflecting the comparison against large 2020 COVID-19 sales that drove a sales increase of 15% and 11% in the second quarter and first six months of 2020, respectively. Life Sciences fixed currency sales decreased 17% and 3% in the second quarter and first six months of 2021, respectively, reflecting comparison versus the very strong second quarter and six months of 2020, when sales increased 52% and 39% respectively, driven by ~~international markets. Sales in our downstream business rose moderately, impacted by the hurricanes.~~2020’s extraordinary COVID-19 demand.

Operating Income

Fixed currency operating income and fixed currency operating income margins for our Global ~~Energy~~Healthcare & Life Sciences segment decreased ~~during~~in the ~~third~~second quarter ~~and~~of 2021. In the first ~~nine~~six months of ~~2017. Acquisitions had a negative impact on the~~2021, fixed currency operating income ~~and minimal impact on the~~increased, whereas fixed currency operating income margins ~~during the third quarter and first nine months of 2017.~~decreased.

Acquisition adjusted fixed currency operating income margins ~~for our Global Energy segment~~ decreased 5.2 percentage points during the second quarter of 2021,primarily reflecting the comparison to the very strong sales volume last year when operating income grew 110%. Acquisition adjusted fixed currency operating income margins were flat during the first six months of 2021 as the 1.9 percentage ~~points~~point positive impact from favorable pricing was offset by the 1.8 percentage point negative impact of unfavorable business mix and ~~0.3 percentage points in the third quarter and first nine months of 2017, respectively. Higher~~higher delivered product costs, a rebuild of compensation reductions made in 2016 and reduced sales, pricing, and volume, negatively impacted margins by approximately 2.6 percentage points in both the third quarter and first nine months of 2017. Cost reduction actions and a favorable legal cost recovery impacted the margins by approximately 2.2 and 1.4 percentage points for the respective periods. Hurricanes had an estimated negative 0.6 percentage point impact on the third quarter results and minimal impact on the first nine months of 2017.costs.

3945

Other

~~Other~~


	Second Quarter Ended						Six Months Ended
	June 30						June 30
	2021			2020			2021			2020
Sales at fixed currency (millions)		$306.6			$249.1			$577.9			$528.7
Sales at public currency (millions)		305.5			239.6			576.2			512.3

Volume		21	%					8	%
Price changes		2	%					2	%
Acquisition adjusted fixed currency sales change		23	%					9	%
Acquisitions and divestitures		-	%					-	%
Fixed currency sales change		23	%					9	%
Foreign currency translation		4	%					3	%
Public currency sales change		28	%					12	%

Operating income at fixed currency (millions)		$51.3			$20.8			$84.2			$42.6
Operating income at public currency (millions)		51.2			20.9			84.0			42.2

Fixed currency operating income change		147	%					98	%
Fixed currency operating income margin		16.7	%		8.4	%		14.6	%		8.1	%
Acquisition adjusted fixed currency operating income change		147	%					98	%
Acquisition adjusted fixed currency operating income margin		16.7	%		8.4	%		14.6	%		8.1	%
Public currency operating income change		145	%					99	%

Third Quarter Ended

Nine Months Ended

September 30

September 30


2017

2016

2017

2016

Sales at fixed currency (millions)

$221.7

$209.2

$633.8

$598.1

Sales at public currency (millions)

224.5

211.6

637.6

605.1

Volume

4
%

4
%

Price changes

2
%

2
%

Acquisition adjusted fixed currency sales change

6
%

6
%

Acquisitions and divestitures

(0)
%

(0)
%

Fixed currency sales change

6
%

6
%

Foreign currency translation

0
%

(1)
%

Public currency sales change

6
%

5
%

Operating income at fixed currency (millions)

$44.0

$40.4

$110.9

$108.2

Operating income at public currency (millions)

44.5

40.9

111.6

109.9

Fixed currency operating income change

9
%

2
%

Fixed currency operating income margin

19.8
%

19.3
%

17.5
%

18.1
%

Acquisition adjusted fixed currency operating income change

9
%

2
%

Acquisition adjusted fixed currency operating income margin

19.8
%

19.3
%

17.5
%

18.1
%

Public currency operating income change

9
%

2
%

Percentages in the above table do not ~~necessary~~necessarily sum due to rounding.

Net Sales

Fixed currency sales for Other increased in ~~both~~ the ~~third~~second quarter and first ~~nine~~six months of ~~2017,~~2021, led by strong growth in Pest Elimination that was driven by ~~both volume~~recovering markets and ~~pricing gains. At a regional level, both the third quarter and first nine months sales results showed good growth in North America.~~new business wins.

At an operating segment level, Pest Elimination fixed currency sales increased 8%21% and 7%13% in the ~~third~~second quarter and first ~~nine~~six months of ~~2017, respectively. Sales to~~2021, respectively, compared against COVID impacted sales a year-ago, as strong growth in food and beverage plants, grocery stores and quick-service restaurants leveraged a strong recovery in hospitality and ~~good growth~~full-service restaurant markets as restrictions ease. Textile Care fixed currency sales increased 34% in ~~restaurants led~~ the ~~growth.~~ ~~Equipment Care~~ ~~sales~~second quarter of 2021 and decreased ~~2% and increased~~ 1% in the ~~third~~first six months of 2021. Colloidal Technologies Group fixed currency sales increased 25% and 8% in the second quarter and first ~~nine~~six months of ~~2017,~~2021, respectively.

Operating Income

Fixed currency operating income and fixed currency operating income margins for Other ~~segment~~ increased ~~0.5~~in the second quarter and ~~decreased 0.6~~first six months of 2021.

Acquisition adjusted fixed currency operating income margins increased 8.3 percentage points during the ~~third~~second quarter ~~and~~of 2021 driven by strong volume growth. Acquisition adjusted fixed currency operating income margins increased 6.5 percentage points during the first ~~nine~~six months of ~~2017. The~~2021 driven by increased volume, cost savings and favorable impact of sales volume and pricing increases added 1.2 percentage points in the third quarter and 1.3 percentage points for the first nine months of 2017. Field investments negatively impacted comparable margins by approximately 0.4 percentage points in the third quarter and 1.8 percentage points for the first nine months of 2017. Hurricanes had an estimated negative 0.3 percentage point impact on the third quarter results and minimal impact on the first nine months of 2017.pricing.

~~Corporate~~

Corporate

Consistent with our internal management reporting, Corporate amounts in the table on page 3640 include sales to ChampionX in accordance with the long-term supply agreement entered into with the Transaction post-separation, as discussed in Note 4, intangible asset amortization specifically from the Nalco merger and special (gains) and charges that are not allocated to our reportable segments. Items included within special (gains) and charges are shown in the table on page ~~32.~~36.

4046

FINANCIAL POSITION, CASH FLOWS AND LIQUIDITY

Financial Position

Total assets were ~~$19.9 billion and $18.3~~$18.5 billion as of ~~September~~June 30, ~~2017 and December 31, 2016, respectively. The increase in~~2021 compared to total assets ~~was driven primarily by the impact~~ of the Anios acquisition and the positive impact of foreign currency exchange rates on the value of our foreign assets translated into U.S. dollars. Total liabilities were $12.6 billion as of September 30, 2017 and $11.4$18.1 billion as of December 31, ~~2016.~~2020.

Total liabilities were $11.8 billion as of June 30, 2021 compared to total liabilities of $11.9 billion as of December 31, 2020. Total debt was ~~$7.6~~$6.7 billion as of ~~September~~June 30, ~~2017~~2021 and $6.7 billion as of December 31, ~~2016.~~2020. See further discussion of our debt activity within the “Liquidity and Capital Resources” section of this MD&A.

Our net debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ~~and net debt to adjusted EBITDA are~~is shown in the following table. EBITDA ~~and adjusted EBITDA are~~is a non-GAAP measures ~~which are~~ discussed further in the “Non-GAAP Financial Measures” section of this MD&A.

The inputs to EBITDA reflect the trailing twelve months of activity for the period presented.


	2017		2016


					2021		2020
(ratio)
Net debt to EBITDA		2.6		2.6		2.2		2.4
Net debt to adjusted EBITDA		2.5		2.3


(millions)
Total debt		$7,557.5		$6,662.6		$6,726.2		$6,686.6
Cash		209.1		180.6		1,402.4		1,260.2
Net debt		$7,348.4		$6,482.0		$5,323.8		$5,426.4

Net income including non-controlling interest		$1,322.7		$1,098.0

Net income including noncontrolling interest						$1,064.3		$984.8
Provision for income taxes		380.8		324.3		267.7		176.6
Interest expense, net		245.5		258.6		280.5		290.2
Depreciation		585.2		557.7		605.2		594.3
Amortization		297.3		292.8		231.9		218.4
EBITDA		2,831.5		2,531.4		$2,449.6		$2,264.3

Special (gains) and charges impacting EBITDA		82.0		341.5
Adjusted EBITDA		$2,913.5		$2,872.9

Cash Flows

Operating Activities

Nine Months Ended

September 30

Six Months Ended

June 30

(millions)

2017

2016

Change

2021

2020

Change

Cash provided by operating activities

$1,444.9

$1,491.7

$(46.8)

$798.3

$640.2

$158.1

Year-over-year comparability was negatively impacted by an increase in comparable income tax payments and changes in working capital (accounts receivable, inventory and accounts payable) metrics, partially offset by a decrease in comparable pension contributions. We continue to generate ~~strong~~ cash flow from operations ~~which has allowed~~amidst the COVID-19 pandemic, allowing us to fund our ongoing operations, ~~debt repayments,~~acquisitions, investments in the business ~~acquisitions~~ and pension obligations ~~and return~~along with returning cash to our shareholders through dividend payments and share ~~repurchases and dividend payments.~~

~~Investing Activities~~

Nine Months Ended

September 30

(millions)

2017

2016

Change

Cash used for investing activities

$(1,368.1)

$(581.8)

$(786.3)

~~Year-over-year comparability in our investing~~repurchases. Cash provided by operating activities ~~was impacted primarily by the Anios acquisition~~increased $158 million in the first ~~quarter~~six months of ~~2017. See~~2021 compared to the first six months of 2020, driven primarily by a $37 million increase in net income from continuing operations including noncontrolling interest excluding disposal and impairment charges, $106 million decreased annual bonus payouts, $65 million net favorable fluctuations in deferred taxes, partially offset by $53 million net unfavorable fluctuations in accounts receivable, inventories and accounts payable (“working capital”). The cash flow impact from working capital accounts was primarily driven by increased sales volume, partially offset by improved days sales outstanding and improved inventory days on hand.

Investing Activities

Six Months Ended

June 30

(millions)

2021

2020

Change

Cash used for investing activities

($347.8)

($689.7)

$341.9

Cash used for investing activities is primarily impacted by the timing of business acquisitions and dispositions as well as capital investments in the business.

Total cash paid for acquisitions, net of cash acquired along with net cash received from dispositions, during the first six months of 2021 and 2020, was $90 million and $431 million, respectively. Our acquisitions and divestitures are discussed further in Note ~~3 for further information.~~3. We ~~also~~continue to target strategic business acquisitions which complement our growth strategy and expect to continue to make capital investments and acquisitions in the future to support our long-term growth.

We continue to make capital investments in ~~our~~the business, including merchandising equipment, manufacturing equipment and facilities. Total capital ~~expenditures.~~

~~Financing Activities~~

Nine Months Ended

September 30

(millions)

2017

2016

Change

Cash provided by (used for) financing activities

$(200.5)

$(823.4)

$622.9

~~During~~expenditures were $246 million and $251 million in the first ~~nine~~six months of ~~2017,~~2021 and 2020, respectively.

Financing Activities

Six Months Ended

June 30

(millions)

2021

2020

Change

Cash (used for) provided by financing activities

($318.3)

$720.6

($1,038.9)

Our cash flows from financing activities primarily reflect the issuances and repayment of debt, common stock repurchases, proceeds from common stock issuances related to our equity incentive programs and dividend payments.

We issued $750 million par value and received $769 million in proceeds of long-term debt and repaid $300 million of long-term debt in the first six months of 2020. The proceeds received from the debt issuances were used for repayment of outstanding debt, repayment of commercial paper and general corporate purposes. In addition, we paid down $1 million and issued ~~$500~~$454 million ~~2.375% senior notes. We also had net issuances~~ of commercial paper and notes payable in the first six months of ~~$188 million.~~2021 and 2020, respectively.

Shares are repurchased for the purpose of partially offsetting the dilutive effect of our equity compensation plans and stock issued in acquisitions, to manage our capital structure and to efficiently return capital to shareholders. We ~~repurchased $588~~reacquired a total of $71 million and $105 million of shares ~~including $300 million shares through an ASR program initiated~~ in ~~February 2017. Refer to Note 10 for further discussion on our ASRs. We distributed $330 million of dividends.~~

~~During~~ the first ~~nine~~six months of ~~2016, we issued $400~~2021 and 2020, respectively. Cash proceeds and tax benefits from stock option exercises provide a portion of the funding for repurchase activity.

We paid dividends of $287 million ~~2.00%~~ and ~~$400~~$283 million ~~3.25% senior notes~~in in the first six months of 2021 and ~~repaid the remaining $125 million of our term loan borrowings. We had net repayments~~2020 respectively.

The impact on financing cash flows of commercial paper and notes payable ~~of $522 million. We repurchased $738 million of shares, including $300 million shares through an ASR program initiated~~issuances and long-term debt borrowings and repayments are shown in ~~February 2016, and distributed $325 million of dividends.~~the following table:

Six Months Ended

June 30

(millions)

2021

2020

Change

Net issuances of commercial paper and notes payable

($1.0)

$454.4

($455.4)

Long-term debt borrowings

768.9

(768.9)

Long-term debt repayments

(300.0)

300.0

Liquidity and Capital Resources

We currently expect to fund ~~all of~~ the cash requirements which are reasonably foreseeable for the next twelve months, including scheduled debt repayments, new investments in the business, share repurchases, dividend payments, possible business acquisitions and pension and postretirement contributions with cash from operating activities, and as needed, additional short-term and/or long-term borrowings. We continue to expect our operating cash flow to remain strong.

As of ~~September~~June 30, ~~2017,~~2021, we had ~~$209.1~~$1,402 million of cash and cash equivalents on hand, of which ~~$171.7~~$44 million was held outside of the U.S. We continue to carry increased levels of cash on hand to meet current and any future potential operational cash needs as a result of the COVID-19 pandemic. We will continue to evaluate our cash position in light of future developments.

As of ~~September~~June 30, ~~2017,~~2021, we ~~had in place~~have a $2.0 billion multi-year credit facility which expires in ~~December 2019.~~April 2026. In April 2021, we entered into an amended and restated revolving credit facility which extended the maturity from November 2022 to April 2026. The credit facility has been established with a diverse syndicate of banks and supports our ~~$2.0 billion~~ U.S. ~~commercial paper program~~ and ~~our $2.0 billion~~ Euro commercial paper ~~program.~~programs. The maximum aggregate amount of commercial paper that may be issued under our U.S. commercial paper program and our Euro commercial paper program may not exceed $2.0 billion. At the end of the ~~third~~second quarter of ~~2017,~~2021, we had ~~$238 million (€200 million) in~~no outstanding ~~Euro~~ commercial paper ~~with an average annual interest rate~~under our U.S.

or Euro programs. There were no borrowings under our credit facility as of ~~less than 1% and no commercial paper outstanding under the U.S. program.~~June 30, 2021 or 2020. As of ~~September~~June 30, ~~2017,~~2021, both programs were rated A-2 by Standard & Poor’s, ~~and~~ P-2 by ~~Moody’s.~~Moody’s and F-1 by Fitch.

Our long-term debt issuance and repayment activity through the first ~~nine~~six months of ~~2017~~2021 and ~~2016~~2020 is discussed in the Cash Flows – Financing Activities section of this MD&A.

We are in compliance with our debt covenants and believe we have sufficient borrowing capacity to meet our foreseeable operating ~~needs.~~activities, as needed.

~~As of September 30, 2017, Standard & Poor’s and Moody’s rated our long-term credit at A- (stable outlook) and Baa1 (stable outlook), respectively.~~

The schedule of contractual obligations included in the Financial Position and Liquidity section of our Form 10-K for the year ended December 31, ~~2016~~2020 disclosed total notes payable and long-term debt due within one year of ~~$0.5 billion.~~$17 million. As of ~~September~~June 30, ~~2017,~~2021, the total notes payable and long-term debt due within one year ~~increased to $1.1 billion. The increase primarily reflected~~was $17 million. There was no commercial paper ~~borrowings during the first nine months~~outstanding as of ~~2017 and reclassification of obligations due within one year to current.~~June 30, 2021 or December 31, 2020.

Our gross liability for uncertain tax positions was ~~$71~~$19 million as of ~~September~~June 30, ~~2017~~2021 and ~~$76~~$21 million as of December 31, ~~2016.~~2020. We are not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, we do not expect significant payments related to these obligations within the next year.

GLOBAL ECONOMIC ENVIRONMENT

~~Energy Markets~~Coronavirus disease 2019 (COVID-19)

~~Approximately 23% of our sales~~In March 2020, the coronavirus disease 2019 (COVID-19) was declared a pandemic by the World Health Organization. The COVID-19 pandemic is continuing to affect major economic and financial markets and industries are ~~generated~~facing the challenges with the economic conditions resulting from ~~our Global Energy segment,~~efforts to address the ~~results of which, as noted further below, are subject to volatility~~pandemic, including supply shortages and inflation. While many government restrictions in the ~~oil~~U.S. have eased through the second quarter, restrictions on activities continue in many other regions, particularly those where vaccination rates lag, continuing to impact consumer activity in those regions. Concerns remain that our markets could see a resurgence of cases triggering additional government mandated lockdowns or similar restrictions on activity, for example due to the emergence of a variant against which existing vaccines are not as effective or which may be more easily transmitted, particularly to those unvaccinated. These conditions have had and ~~gas commodity markets.~~will continue to have a negative impact on market conditions and customer demand throughout the world.

~~Oil industry activity has been gradually recovering from 2016’s lows during~~We expect the ~~first nine months~~U.S. recovery to continue, Europe to reopen as forecasted, and the rest of ~~2017, with~~the world to follow soon after, and we have implemented pricing actions that will build through the second half to manage inflation and rising delivered product costs. With this outlook, we expect continued strong ~~gains in drilling activity over the past year and recovering capital expenditure trends in 2017.~~

~~Global demand for oil and overall energy consumption has shown modest growth over this period. Oil prices have risen from their lows in early 2016.~~

~~Our global footprint and broad business portfolio within the Global Energy segment, as well as our strong execution capabilities are expected to provide the required resilience to outperform~~year-on-year performance in the ~~current market. As such, we continue to~~second half of 2021. We remain confident in ~~the~~our long-term ~~growth prospects of the segment.~~outlook and believe we are well-positioned for continued future growth.

~~As petroleum derived materials are key inputs to many of our chemical products, lower oil prices will continue to provide benefits across our segments in the form of lower raw material costs.~~

Global Economies

Approximately half of our sales are outside of the U.S. Our international operations subject us to changes in economic conditions and foreign currency exchange rates as well as political uncertainty in some countries which could impact future operating results.

~~Brexit~~

~~On March 29, 2017,~~Argentina has continued to experience negative economic trends, evidenced by multiple periods of increasing inflation rates, devaluation of the ~~United Kingdom (“U.K.”) government gave formal notice to~~peso, and increasing borrowing rates. Argentina is classified as a highly inflationary economy in accordance with U.S. GAAP, and the ~~European Union (“EU”) to begin~~U.S. dollar is the ~~process~~functional currency for our subsidiaries in Argentina. During the first six months of negotiating the U.K.’s exit (“Brexit”) from the EU. The effects of Brexit will depend on any agreements the U.K. makes to retain access to the EU markets either during a transitional period or more permanently. The negotiations might also impact various tax reliefs and exemptions that apply to transactions between the U.K. and EU. In the longer term, any impact from Brexit on our U.K. operations will depend,2021, sales in ~~part, on the outcome of tariff, trade, regulatory, and other negotiations. We will continue to monitor the status of tax law changes and tax treaty negotiations at the U.K. and EU.~~

~~For the nine months ended September 30, 2017, net sales of our U.K. operations were approximately 2%~~Argentina represented less than 1% of our consolidated ~~net~~ sales. Assets held in Argentina at the end of the second quarter of 2021 represented less than 1% of our consolidated assets.

NEW ACCOUNTING PRONOUNCEMENTS

For information on new accounting pronouncements, ~~see~~refer to Note 1618 to the Consolidated Financial Statements.

SUBSEQUENT EVENTS

Subsequent to quarter end, we acquired a US Healthcare business for approximately $120 million. The acquisition is not material to our consolidated financial statements.

In ~~October 2017,~~July 2021, we entered into an interest rate swap agreement that converted the remaining $250 million of our 3.25% debt from a fixed interest rate to ~~sell the Equipment Care business which subsequently closed on November 1, 2017.~~a floating interest rate. The ~~disposition~~interest rate swap is ~~not expected to be material to the consolidated financial statements.~~designated as a fair value hedge.

~~We have~~Also in July 2021, we entered into ~~various purchase agreements which are expected to close~~a cross currency swap agreement with a notional amount of €300 million maturing in ~~the fourth quarter~~2030. The cross currency swap is designated as a net investment hedge of ~~2017. None~~our Euro denominated exposures from our investments in certain of ~~the agreements are material to the consolidated financial statements, individually or in the aggregate.~~our Euro denominated functional currency subsidiaries.

NON-GAAP FINANCIAL MEASURES

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operation” in Item 2, contains financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S. (GAAP). These non-GAAP 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 operating income margin

●

Adjusted fixed currency operating income

●

Adjusted fixed currency operating income margin

●

Acquisition adjusted fixed currency operating income

●

Acquisition adjusted fixed currency operating income margin

●

~~EBITDA~~

Adjusted interest expense, net

●

~~Adjusted~~ EBITDA

●

Adjusted tax rate

●

Adjusted net income attributable to Ecolab

●

Adjusted diluted EPS

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 EPS 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 and/or income 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.

EBITDA is defined as the sum of net income including ~~non-controlling~~noncontrolling interest, provision for income taxes, net interest expense, depreciation and amortization. ~~Adjusted~~ EBITDA is ~~defined as the sum of EBITDA and special (gains) and charges impacting EBITDA. EBITDA and adjusted EBITDA are~~ used ~~as inputs to~~in our net debt to EBITDA ~~and net debt to adjusted EBITDA ratios. We~~ratio, which we view ~~these ratios~~ as important indicators of the operational and financial health of our organization.

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.~~exchange. Fixed currency amounts included in this Form 10-Q are based on translation into U.S. dollars at the fixed foreign currency exchange rates established by management at the beginning of ~~2017.~~2021.

Acquisition adjusted growth rates exclude the results of our acquired businesses from the first twelve months post acquisition, exclude the results of our divested businesses from the twelve months prior to ~~divestiture, and exclude sales to our deconsolidated Venezuelan subsidiaries from both the current period and comparable period of the prior year.~~divestiture.

These non-GAAP measures are not in accordance with, or an alternative to U.S. 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 U.S. GAAP measures included in this MD&A and we have provided reconciliations of reported U.S. GAAP amounts to the non-GAAP amounts.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include the COVID-19 pandemic outlook; business performance and prospects; expectations concerning ~~our~~timing, amount and type of restructuring costs and savings from restructuring activities; tax deductibility of goodwill; capital investments and acquisitions; amortization expense; non-performance of financial counterparties; payments and contributions to pension and postretirement health care benefit plans; ~~tax deductibility of goodwill; amortization expense; share repurchases; actions and impact associated with adoption of new accounting standards;~~ the impact of lawsuits, claims and environmental matters; impact of new accounting pronouncements; cash flows, borrowing capacity and funding of cash requirements; payments related to uncertain tax positions; ~~timing of hedged transactions; timing~~ and funding of restructuring cash expenditures; tax rate impact of special gains and charges and discrete tax items; excess tax benefits; timing and funding of restructuring cash expenditures; tax rate impact of special gains and charges and discrete tax items; excess tax benefits; borrowing capacity; impact of oil price fluctuations regarding sales, performance compared to market and future prospects; global foreign currency markets; global credit or market risk; future cash flow; cash requirements and sources of funding; nonperformance of financial counterparties; closing of Equipment Care divestiture; implementation of ERP ~~system; and doing business in Iran.~~system upgrade.

Without limiting the foregoing, words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “we believe,” “we expect,” “estimate,” “project” (including the negative or variations thereof) or similar terminology, generally identify forward-looking statements. Forward-looking statements may also represent challenging goals for us. These statements, which represent our expectations or beliefs concerning various future events, are based on current expectations that involve a number of risks and uncertainties that could cause actual results to differ materially from those of such forward-looking statements. In particular, the effects of the COVID-19 pandemic depend on numerous factors,including the severity of the disease, the duration of the outbreak, the distribution and efficacy of vaccines, the likelihood of a resurgence of the outbreak, actions that may be taken by governmental authorities intended to minimize the spread of the pandemic or to stimulate the economy and other unintended consequences. Further, the ultimate results of any restructuring or efficiency initiative, 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 or efficiency initiative and other business improvement initiatives and the level of success achieved through such actions in improving competitiveness, efficiency and effectiveness. We caution that undue reliance should not be placed on such forward-looking statements, which speak only as of the date made.

Some of the factors which could cause results to differ materially from those expressed in any forward-looking statements are set forth under Item 1A ~~entitled Risk Factors,~~ of our most recent Form 10-K, ~~for~~as updated by Item 1A of this Form 10-Q, and our other public filings with the ~~year ended December 31, 2016,~~Securities and Exchange Commission (the "SEC"), and include the effects of the COVID-19 pandemic; the vitality of the markets we ~~serve including the impact of oil price fluctuations on the markets served by our Global Energy segment;~~serve; the impact of economic factors such as the worldwide economy, capital flows, interest rates, foreign currency risk and reduced sales and earnings in our international operations 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;~~initiatives, including restructurings and our Enterprise Resource Planning system upgrades; potential information technology infrastructure failures or breaches in data security; potential to incur significant tax liabilities or indemnification liabilities relating to the separation and split-off of our ChampionX business; our ability to attract, retain and develop high caliber management talent to lead our business and successfully execute organizational change; our ability to successfully compete with respect to value, innovation and customer support; exposure to global economic, political and legal risks related to our international operations; difficulty in procuring raw materials or fluctuations in raw material costs; pressure on operations ~~including with respect to our operations in Russia;~~from consolidation of customers or vendors; 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~~products, as well as to the ~~Deepwater Horizon oil spill;~~conduct of our ~~ability~~business generally, including labor and employment and anti-corruption; restraints on pricing flexibility due to ~~develop competitive advantages through innovation; difficulty in procuring raw materials or fluctuations in raw material costs; our substantial indebtedness;~~contractual obligations; our ability to acquire complementary businesses and to effectively integrate such businesses; ~~restraints on pricing flexibility due~~changes in tax laws and unanticipated tax liabilities; potential loss of deferred tax assets; our indebtedness, and any failure to ~~contractual obligations; pressure on operations from consolidation of customers, vendors or competitors;~~comply with covenants that apply to our indebtedness; public health ~~epidemics;~~outbreaks, epidemics or pandemics, such as the current outbreak of COVID-19; 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~~the occurrence of litigation or claims, including class action lawsuits; the loss or insolvency of a major customer or distributor; repeated or prolonged government and/or business shutdowns or similar events; 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. There can be no assurances that our earnings levels will meet investors’ expectations. Except as may be required under applicable law, we do not undertake, and expressly disclaim, any duty to update our Forward-Looking Statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

We use foreign currency forward contracts, interest rate swap agreements and foreign currency debt to manage risks associated with foreign currency exchange rates, interest rates and net investments in our foreign operations. We do not hold derivative financial instruments of a speculative nature or for trading purposes. For a more detailed discussion of derivative instruments, refer to Note 8,9, entitled “Derivatives and Hedging Transactions”, of the consolidated financial statements located under Part I, Item 1 of this quarterly report on Form 10-Q.

Item 4. Controls and Procedures

As of ~~September~~June 30, ~~2017,~~2021, we carried out an evaluation, under the supervision and with the participation of our management, including ~~the Chairman of the Board~~our President and Chief Executive Officer and ~~the~~our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our ~~Chairman of the Board~~President and Chief Executive Officer and ~~the~~our Chief Financial Officer concluded that our disclosure controls and procedures are effective.

During the period ~~July~~April 1, 2021 through ~~September~~June 30, ~~2017,~~2021, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are ~~implementing an~~continuing our implementation of our enterprise resource planning (“ERP”) system ~~upgrade,~~upgrades, which isare expected to occur in phases over the next several ~~years beginning in 2018. This upgrade,~~years. These upgrades, which ~~includes~~include supply chain and certain finance functions, isare expected to improve the efficiency of certain financial and related transactional processes. ~~The upgrade~~These upgrades of the ERP ~~system~~systems will affect the processes that constitute our internal control over financial reporting and will require testing for effectiveness.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Note ~~15,~~17, entitled “Commitments and Contingencies” located under Part I, Item 1 of this Form 10-Q is incorporated herein by reference.

Item 1A. Risk Factors

In our report on Form 10-K for the year ended December 31, ~~2016,~~2020, filed with the Securities and Exchange Commission on February ~~24, 2017,~~26, 2021, we identify under Item 1A important factors which could affect our financial performance and could cause our actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Form 10-Q. See the section entitled Forward-Looking Statements located on page 4451 of this Form 10-Q. We may also refer to such disclosure to identify factors that may cause results to differ from those expressed in other forward-looking statements made in oral presentations, including telephone conferences and/or webcasts open to the public.

The discussion below provides updates and additions to the risk factors and should be read together with the full list of risk factors set forth in the ~~aforementioned~~ Form 10-K.

The ~~first two risk factors appearing~~COVID-19 pandemic and measures taken in ~~this discussion include new updates~~response thereto have materially and ~~additions~~adversely impacted, and we expect may continue to ~~such risk factors since the Form 10-K, while the other two risk~~

~~factors are unchanged from as they were previously updated in our Form 10-Q for the quarterly period ended March 31, 2017,~~materially and ~~repeated in our Form 10-Q for the quarterly period ended June 30, 2017.There have been no other changes to our risk factors.~~

~~If we are unsuccessful in executing on key business initiatives, including our ERP system upgrade,~~adversely impact, our business ~~could be adversely affected~~.

~~We continue to execute key business initiatives, including investments to develop business systems~~ and restructurings such as those discussed under Note 2 entitled “Special Gains and Charges” of this Form 10-Q, as part of our ongoing efforts to improve our efficiency and returns. In particular, we are implementing an ERP system upgrade, which is expected to occur in phases over the next several years. This upgrade, which includes supply chain and certain finance functions, is expected to improve the efficiency of certain financial and related transactional processes. The upgrade involves complex business processdesign and a breakdown in certain of these processes could result in business disruption. If the projects in which we are investing or the initiatives which we are pursuing are not successfully executed, our consolidated results of operations, ~~financial position or cash flows could~~and the full impact of the pandemic will depend on future developments, which are highly uncertain and cannot be ~~adversely affected.~~predicted.

~~We may be subject~~Beginning in March 2020, theCOVID-19 pandemic had a rapid and significant negative impact on the global economy, including a significant downturn in the foodservice, hospitality and travel industries. Measures taken to ~~information technology system failures, network disruptions~~alleviate the pandemic (such as stay-at-home orders and ~~breaches in data security.~~

~~We rely to a large extent upon information technology systems~~other responsive measures) significantly impacted our restaurant and ~~infrastructure to operate our business. The size~~hospitality customers and complexity of our information technology systems make them potentially vulnerable to breakdown, malicious intrusion and random attack. Recent acquisitions, including the Nalco and Champion transactions, have resulted in further de-centralization of systems and additional complexity in our systems infrastructure. Likewise, data privacy breaches by employees and others with permitted access to our systems may pose a risk that sensitive data may be exposed to unauthorized persons or to the public. While we have invested in protection of data and information technology, there can be no assurance that our efforts will prevent breakdowns, cybersecurity attacks or breaches in our systems that could cause reputational damage, business disruption and legal and regulatory costs; could result in third-party claims; could result in compromise or misappropriation of our intellectual property, trade secrets and sensitive information; or could otherwise adversely affect our business. There may be other challenges and risks as we continue to invest in our ERP system.

~~Our business depends on our ability to comply with laws and governmental regulations, and we may be adversely~~negatively affected ~~by changes in laws and regulations~~.

Our business is subject to numerous laws and regulations relating to the environment, including evolving climate change standards, and to the manufacture, storage, distribution, sale and use of our products as well as to the conduct of our business generally, including employment and labor laws. Compliance with these laws and regulations exposes us to potential financial liability and increases our operating costs. Regulation ofdemand for our products and operations continues to increase with more stringent standards, causing increased costs of operations and potential for liability if a violation occurs. The potential cost to us relating to environmental and product registration laws and regulations is uncertain due to factors such as the unknown magnitude and type of possible contamination and clean-up costs, the complexity and evolving nature of laws and regulations, and the timing and expense of compliance. Changes to current laws (including tax laws), regulations and policies could impose new restrictions, costs or prohibitions on our current practices which would adversely affect our consolidated results of operations, financial position or cash flows.

Our subsidiaries are defendants in pending lawsuits alleging negligence and injury resulting from the use of our COREXIT dispersant in response to the Deepwater Horizon oil spill, which could expose us to monetary damages or settlement costs.

Our subsidiaries were named as defendants in pending lawsuits alleging negligence and injury resulting from the use of our COREXIT dispersant in response to the Deepwater Horizon oil spill, which could expose us to monetary damages or settlement costs. On April 22, 2010, the deepwater drilling platform, the Deepwater Horizon, operated by a subsidiary of BP plc, sank in the Gulf of Mexico after a catastrophic explosion and fire that began on April 20, 2010. A massive oil spill resulted. Approximately one week following the incident, subsidiaries of BP plc, under the authorization of the responding federal agencies, formally requested our indirect subsidiary, Nalco Company, to supply large quantities of COREXIT 9500, a Nalco oil dispersant product listed on the U.S. EPA National Contingency Plan Product Schedule. Nalco Company responded immediately by providing available COREXIT and increasing production to supply the product to BP’s subsidiaries for use, as authorized and directed by agencies of the federal government.

~~Nalco Company and certain affiliates (collectively “Nalco”) were named as a defendant in a series of class action and individual plaintiff lawsuits arising from this event. The plaintiffs~~services in these ~~matters claimed damages under products liability, tort and other theories. Nalco was also named as a third party defendant~~segments, resulting in ~~certain matters. Nalco was indemnified in these matters by another of the defendants.~~

These cases were administratively transferred to a judge in the United States District Court for the Eastern District of Louisiana with other related cases under In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, Case No. 10-md-02179 (E.D. La.) (the “MDL”).

Nalco Company, the incident defendants and the other responder defendants have been named as third party defendants by Transocean Deepwater Drilling, Inc. and its affiliates (the “Transocean Entities”) (In re the Complaint and Petition of Triton Asset Leasing GmbH, et al, MDL No. 2179, Civil Action 10-2771). In April and May 2011, the Transocean Entities, Cameron International Corporation, Halliburton Energy Services, Inc., M-I L.L.C., Weatherford U.S., L.P. and Weatherford International, Inc. (collectively, the “Cross Claimants”) filed cross claims in MDL 2179 against Nalco Company and other unaffiliated cross defendants. The Cross Claimants generally allege, among other things, that if they are found liable for damages resulting from the Deepwater Horizon explosion, oil spill and/or spill response, they are entitled to indemnity or contribution from the cross defendants.

On November 28, 2012, the Federal Court in the MDL entered an order dismissing all claims against Nalco. Because claims remained pending against other defendants, the Court’s decision was not a “final judgment” for purposes of appeal. Plaintiffs will have 30 days after entry of final judgment to appeal the Court’s decision. We cannot predict whether there will be an appeal of the dismissal, the involvement we might have in these matters in the future or the potential for future litigation. However, if an appeal by plaintiffs in these lawsuits is brought and won, these suits could have a material adverse effect on our ~~consolidated~~business and results of operations. While many of these measures have significantly eased in the U.S. through the second quarter driving increased consumer traffic and in-unit dining, restrictions on activities continue in many other regions, particularly those where vaccination rates lag, continuing to impact consumer activity in those regions. Concerns remain that our markets could see a prolonged resurgence of cases triggering additional government mandated lockdowns or similar restrictions, for example due to the emergence of a variant against which existing vaccines are not as effective or which may be more easily transmitted, particularly to those unvaccinated. In addition, the COVID-19 pandemic continues to have a material effect on the macroeconomic environment, and there is continued uncertainty around its duration and ultimate impact.

We expect the full impact of the COVID-19 pandemic, including the extent of its effect on our business, results of operations and financial ~~position~~condition, to be dictated by future developments which remain uncertain and cannot be predicted, such as the severity of the disease, the duration of the outbreak, the distribution, acceptance and efficacy of vaccines, the likelihood of a resurgence of the outbreak, including as a result of emerging variants, actions that may be taken by governmental authorities intended to minimize the spread of the pandemic or ~~cash flows.~~

to stimulate the economy and other unintended consequences. In December 2012 and January 2013, the MDL court issued final orders approving two settlements between BP and Plaintiffs’ Class Counsel: (1) a proposed Medical Benefits Class Action Settlement; and (2) a proposed Economic and Property Damages Class Action Settlement. Pursuantaddition to the ~~proposed settlements, class members agree to release claims against BP and other released parties, including Nalco Company and its related entities.~~

Nalco was named in nine additional complaints in May 2016, and two additional complaints in April 2017, filed by individuals alleging, among other things, business and economic loss resulting from the Deepwater Horizon oil spill. The plaintiffs in these lawsuits are generally seeking awards of unspecified compensatory and punitive damages, and attorneys’ fees and costs. These actions have been consolidatedreduction in the ~~MDL~~demand for our products and services, the COVID-19 pandemic has had, and we expect ~~they~~ will ~~be dismissed pursuant~~continue to have, certain negative impacts on our business, including, but not limited to, the ~~Court’s November 28, 2012 order granting Nalco’s motion for summary judgment.~~following:

●

We rely on a global workforce and take measures to protect the health and safety of our employees, customers and others with whom we do business while continuing to effectively manage our employees and maintain business operations. We have taken additional measures and incurred additional expenses to protect the health and safety of our employees to comply with applicable government requirements and safety guidance. Additionally, our business operations may be disrupted if a significant portion of our workforce is unable to work safely and effectively due to illness, quarantines, government actions or other restrictions or measures responsive to the pandemic, or if members of senior management or our Board of Directors are

unable to perform their duties for an extended period of time. A significant outbreak in one of our manufacturing facilities could adversely impact our ability to make and ship products in a timely manner. Measures taken across our business operations to address health and safety may not be sufficient to prevent the spread of COVID-19 among our employee base, customers and others. Therefore, we could face operational disruptions and incur additional expenses, including devoting additional resources to assisting employees diagnosed with COVID-19 and further changing health and safety protocols and processes, that could adversely affect our business and results of operations.

●

A significant number of our employees, as well as customers and others with whom we do business, continue to work remotely in response to the COVID-19 pandemic. Our business operations may be disrupted, and we may experience increased risk of adverse effects to our business, if our business operations are negatively impacted as a result of remote work arrangements, including due to cybersecurity risks or other disruption to our technology infrastructure. Further, if our key operating facilities experience closures or worker shortages as a result of COVID-19, whether temporary or sustained, our business operations could be significantly disrupted.

●

Cost management and various cost-containment actions implemented across our business in response to the COVID-19 pandemic could hinder execution of our business strategy, including the deferral of planned capital expenditures, and could adversely affect our business and results of operations.

●

We believe that we appropriately reserve for expected credit losses, however we cannot be certain that loss or delay in the collection of accounts receivable will not have a material adverse effect on our results of operations and financial condition.

On February 22, 2017, the Federal Court in the MDL ordered that plaintiffs who had previously filed a claim and who had “opted out” of and not released their claims under the Medical Benefits Class Action Settlement either: (1) complete a sworn statement indicating, among other things, that they opted out of the Medical Benefits Class Action Settlement (to be completed by plaintiffs who previously filed an individual complaint); or (2) file an individual lawsuit attaching the sworn statement as an exhibit, by a deadline date set by the Court. The Court will then determine which plaintiffs are entitled to pursue their claims and the procedures for addressing those claims.

Nalco continues to sell the COREXIT oil dispersant product and could be exposed to future lawsuits from the use of such product. We cannot predict the potential for future litigation with respect to such sales. However, if one or more of such lawsuits are brought and won, these suits could have a material adverse impact on our financial results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds


						Number of shares		Maximum number of
	Total					purchased as part		shares that may
	number of		Average price			of publicly		yet be purchased
	shares		paid per			announced plans		under the plans
Period	purchased	⁽¹⁾	share		⁽²⁾	or programs	⁽³⁾	or programs	⁽³⁾
April 1-30, 2021	41,024		$	214.7972		41,024		6,008,299
May 1-31, 2021	80			224.2200		-		6,008,299
June 1-30, 2021	-			-		-		6,008,299
Total	41,104		$	214.8155		41,024		6,008,299

(1)

~~(c)~~

~~Issuer Purchases of Equity Securities~~

(c)

(d)

(a)

Number of shares

Maximum number of

Total

(b)

purchased as part

shares that may

number of

Average price

of publicly

yet be purchased

shares

paid per

announced plans

under the plans

Period

purchased(1)

share(2)

or programs(3)

or programs(3)

July 1-31, 2017

302,196

132.5193

301,703

12,698,468

August 1-31, 2017

343,534

131.2854

340,358

12,358,110

September 1-30, 2017

11,084

131.3123

-

12,358,110

Total

656,814

131.8536

642,061

12,358,110

~~(1)~~

Includes ~~14,753~~80 shares reacquired from employees and/or directors as swaps for the cost of stock options, or shares surrendered to satisfy minimum statutory tax obligations under our stock incentive plans.

(2)

~~(2)~~

The average price paid per share includes brokerage commissions associated with publicly announced plan purchases plus the value of such other reacquired shares.

(3)

~~(3)~~

As announced on February 24, 2015, our Board of Directors authorized the repurchase of up to 20,000,000 shares. Subject to market conditions, we expect to repurchase all shares under the open authorizations, for which no expiration date has been established, in open market or privately negotiated transactions, including pursuant to Rule ~~10b5-1 and accelerated share repurchase programs.~~

10b5-1.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~Iran Threat Reduction and Syria Human Rights Act of 2012~~Not applicable.

Under the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the Securities Exchange Act of 1934, the Company is required to disclose in its periodic reports if it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with entities or individuals designated pursuant to certain Executive Orders. Disclosure is required even where the activities are conducted outside the U.S. by non-U.S. affiliates in compliance with applicable law, and even if the activities are not covered or prohibited by U.S. law. In connection with the easing of certain sanctions by the United States against Iran in January 2016 and in compliance with the economic sanctions regulations administered by U.S. Treasury’s Office of Foreign Assets Control (OFAC) and U.S. export control laws, a wholly-owned non-U.S. subsidiary of the Company completed the following sales related to businesses in our Energy operating segment pursuant to and in compliance with the terms and conditions of OFAC’s General License H: sales of products used for process and water treatment applications in (i) upstream oil and gas production and (ii) petrochemical plants totaling $1,019,000 during the subsidiary’s third quarter ended August 31, 2017, and additional sales of such products totaling $552,000 during September 2017, were made to a distributor in Dubai and two distributors in Iran. The net profit before taxes associated with these sales is estimated to be $256,000 and $130,000, respectively. Our non-U.S. subsidiary intends to continue doing business in Iran under General License H in compliance with U.S. economic sanctions and export control laws, which sales may require additional disclosure pursuant to the abovementioned statute.

4853

Item 6. Exhibits


Exhibit No.		Document		Method of Filing
~~Exhibit No.~~		~~Document~~			~~Method of Filing:~~
(a)		The following documents are filed as exhibits to this report:
~~(4.1)~~(10.1)		~~Form~~Third Amended and Restated $2.0 billion 5-Year Revolving Credit Facility, dated as of ~~Common Stock Certificate effective October 2, 2017.~~April 16, 2021, among Ecolab Inc., the lenders party thereto, the issuing lenders party thereto, Bank of America, N.A., as administrative agent and swing line bank, and Citibank, N.A., JPMorgan Chase Bank, N.A. and MUFG Bank, Ltd., as co-syndication agents.		~~Filed herewith electronically.~~
~~(4.2)~~	~~Sixth Supplemental Indenture, dated August 10, 2017, between the Company and Wells Fargo Bank, National Association~~.		Incorporated by reference to Exhibit ~~4.2~~(10.1) of our Form 8-K dated ~~August 7, 2017.~~April 20, 2021 (File No. ~~01-9328)~~ 001-9328)
~~(4.3)~~(10.2)		~~Form~~Amendment No. 2 to Ecolab Mirror Pension Plan (as Amended and Restated Effective January 1, 2014), effective as of ~~2.375% Notes due 2022.~~May 5, 2021.		~~Included in Exhibit 4.2 above.~~Filed herewith electronically.
~~(10.1)~~		~~Documents related to U.S. $2,000,000,000 Commercial Paper Program:~~(10.3)(i)
~~(10.1a)~~	~~Commercial Paper~~ Issuing and Paying Agency Agreement, dated ~~as of~~ September 18, 2017, between Ecolab Inc. and ~~MUFG Union~~U.S. Bank ~~N.A.~~National Association, as Issuing and Paying ~~Agent.~~Agent (as successor, effective as of June 7, 2021, to MUFG Union Bank, N.A.).		~~Filed herewith electronically.~~Incorporated by reference to Exhibit (10.1)(a) of our Form 10-Q for the quarter ended September 30, 2017. (File No. 001-9328)
~~(10.1b)~~(10.3)(ii)		Corporate Commercial Paper —– Master Note, dated ~~September 18, 2017,~~June 7, 2021, together with ~~Annex~~annex thereto.		Filed herewith electronically.
(15.1)		Letter regarding unaudited interim financial information.		Filed herewith electronically.
(31.1)		Rule 13a - 14(a) CEO Certification.		Filed herewith electronically.
(31.2)		Rule 13a - 14(a) CFO Certification.		Filed herewith electronically.
(32.1)		Section 1350 CEO and CFO Certifications.		Filed herewith electronically.
~~(101.1)~~(101.INS)		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.		Filed herewith electronically.
(101.SCH)		Inline XBRL Taxonomy Extension Schema.		Filed herewith electronically.
(101.CAL)		Inline XBRL Taxonomy Extension Calculation Linkbase.		Filed herewith electronically.
(101.DEF)		Inline XBRL Taxonomy Extension Definition Linkbase.		Filed herewith electronically.
(101.LAB)		Inline XBRL Taxonomy Extension Label Linkbase.		Filed herewith electronically.
(101.PRE)		Inline XBRL Taxonomy Extension Presentation Linkbase.		Filed herewith electronically.
(104)		Cover Page Interactive Data File.		~~Filed herewith electronically.~~Formatted as Inline XBRL and contained in Exhibit 101.

4954

SIGNATURE

~~SIGNATURE~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.


			ECOLAB INC.
	~~ECOLAB INC.~~

Date: August 5, 2021	By:	/s/ Scott D. Kirkland

		Scott D. Kirkland
~~Date: November 2, 2017~~	~~By:~~	~~/s/ Bruno Lavandier~~
		~~Bruno Lavandier~~
		Senior Vice President and Corporate Controller
		(duly authorized officer and
		Chief Accounting Officer)

5055



	September 30		December 31
(millions, except shares and per share amounts)	2017		2016

ASSETS
Current assets
Cash and cash equivalents		$209.1		$327.4
Accounts receivable, net		2,533.2		2,341.2
Inventories		1,509.0		1,319.4
Other current assets		363.2		291.4
Total current assets		4,614.5		4,279.4
Property, plant and equipment, net		3,617.2		3,365.0
Goodwill		7,154.4		6,383.0
Other intangible assets, net		4,039.6		3,817.8
Other assets		431.0		485.0
Total assets		$19,856.7		$18,330.2

LIABILITIES AND EQUITY
Current liabilities
Short-term debt		$1,073.0		$541.3
Accounts payable		1,115.9		983.2
Compensation and benefits		509.8		516.3
Income taxes		51.7		87.4
Other current liabilities		1,006.2		891.2
Total current liabilities		3,756.6		3,019.4
Long-term debt		6,484.5		6,145.7
Postretirement health care and pension benefits		983.7		1,019.2
Deferred income taxes		1,030.2		970.2
Other liabilities		302.5		204.8
Total liabilities		12,557.5		11,359.3

Equity (a)
Common stock		354.2		352.6
Additional paid-in capital		5,397.5		5,270.8
Retained earnings		7,598.0		6,975.0
Accumulated other comprehensive loss		(1,564.3)		(1,712.9)
Treasury stock		(4,563.1)		(3,984.4)
Total Ecolab shareholders’ equity		7,222.3		6,901.1
Noncontrolling interest		76.9		69.8
Total equity		7,299.2		6,970.9
Total liabilities and equity		$19,856.7		$18,330.2



	Asset Derivatives				Liability Derivatives
	September 30		December 31		September 30		December 31
(millions)	2017		2016		2017		2016
Derivatives designated as hedging instruments
Foreign currency forward contracts		$30.2		$73.4		$156.7		$19.8
Interest rate swap agreements		-		-		3.6		3.5

Derivatives not designated as hedging instruments
Foreign currency forward contracts		21.9		20.0		52.5		26.9
Gross value of derivatives		52.1		93.4		212.8		50.2

Gross amounts offset in the Consolidated Balance Sheet		(23.1)		(25.7)		(23.1)		(25.7)
Net value of derivatives		$29.0		$67.7		$189.7		$24.5


			(c)	(d)
	(a)		Number of shares	Maximum number of
	Total	(b)	purchased as part	shares that may
	number of	Average price	of publicly	yet be purchased
	shares	paid per	announced plans	under the plans
Period	purchased(1)	share(2)	or programs(3)	or programs(3)
July 1-31, 2017	302,196	132.5193	301,703	12,698,468
August 1-31, 2017	343,534	131.2854	340,358	12,358,110
September 1-30, 2017	11,084	131.3123	-	12,358,110
Total	656,814	131.8536	642,061	12,358,110