Document and Entity Information
Document and Entity Information | 6 Months Ended |
Jun. 30, 2019shares | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Transition Report | false |
Document Period End Date | Jun. 30, 2019 |
Entity File Number | 1-9328 |
Entity Registrant Name | ECOLAB INC. |
Entity Incorporation, State or Country Code | DE |
Entity Tax Identification Number | 41-0231510 |
Entity Address, Address Line One | 1 Ecolab Place |
Entity Address, City or Town | St. Paul |
Entity Address, State or Province | MN |
Entity Address, Postal Zip Code | 55102 |
City Area Code | 800 |
Local Phone Number | 232-6522 |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 287,751,846 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q2 |
Entity Central Index Key | 0000031462 |
Amendment Flag | false |
Common Stock | |
Title of 12(b) Security | Common Stock, $1.00 par value |
Trading Symbol | ECL |
Security Exchange Name | NYSE |
2.625% Euro Notes due 2025 | |
Title of 12(b) Security | 2.625% Euro Notes due 2025 |
Trading Symbol | ECL 25 |
Security Exchange Name | NYSE |
1.000% Euro Notes due 2024 | |
Title of 12(b) Security | 1.000% Euro Notes due 2024 |
Trading Symbol | ECL 24 |
Security Exchange Name | NYSE |
CONSOLIDATED STATEMENT OF INCOM
CONSOLIDATED STATEMENT OF INCOME - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Net sales | $ 3,759.4 | $ 3,689.6 | $ 7,264.8 | $ 7,160.5 |
Cost of sales (including special charges of (a)) | 2,208.2 | 2,146.1 | 4,297.8 | 4,218.4 |
Selling, general and administrative expenses | 1,002.7 | 1,036.8 | 2,011 | 2,055.1 |
Special (gains) and charges | 49.9 | 12.1 | 90.2 | 38.1 |
Operating income | 498.6 | 494.6 | 865.8 | 848.9 |
Other (income) expense | (20.9) | (19.6) | (42.1) | (39) |
Interest expense, net | 49.5 | 56.3 | 98.9 | 112.7 |
Income before income taxes | 470 | 457.9 | 809 | 775.2 |
Provision for income taxes | 97.8 | 104.3 | 136.4 | 173.4 |
Net income including noncontrolling interest | 372.2 | 353.6 | 672.6 | 601.8 |
Net income attributable to noncontrolling interest | 3.6 | 2.3 | 7.5 | 3.2 |
Net income attributable to Ecolab | $ 368.6 | $ 351.3 | $ 665.1 | $ 598.6 |
Earnings attributable to Ecolab per common share | ||||
Basic (in dollars per share) | $ 1.28 | $ 1.22 | $ 2.31 | $ 2.07 |
Diluted (in dollars per share) | $ 1.26 | $ 1.20 | $ 2.28 | $ 2.04 |
Weighted-average common shares outstanding | ||||
Basic (in shares) | 287.6 | 288.8 | 287.9 | 288.7 |
Diluted (in shares) | 292.1 | 293.3 | 292.2 | 293 |
Product and sold equipment | ||||
Net sales | $ 3,092.1 | $ 3,060.5 | $ 5,978.4 | $ 5,920.1 |
Cost of sales (including special charges of (a)) | 1,805.8 | 1,751.6 | 3,515.8 | 3,447.8 |
Service and lease equipment | ||||
Net sales | 667.3 | 629.1 | 1,286.4 | 1,240.4 |
Cost of sales (including special charges of (a)) | $ 402.4 | $ 394.5 | $ 782 | $ 770.6 |
CONSOLIDATED STATEMENT OF INC_2
CONSOLIDATED STATEMENT OF INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Special charges | $ 49.9 | $ 12.1 | $ 90.2 | $ 38.1 |
Cost of sales | ||||
Special charges | 7.9 | (0.1) | 11.5 | (0.1) |
Interest expense | ||||
Special charges | 0.2 | |||
Product and sold equipment | Cost of sales | ||||
Special charges | $ 7.9 | $ (0.1) | $ 11.5 | $ (0.1) |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | ||||
Net income including noncontrolling interest | $ 372.2 | $ 353.6 | $ 672.6 | $ 601.8 |
Foreign currency translation adjustments | ||||
Foreign currency translation | (134.3) | (132.7) | (29.2) | (17.1) |
Gain (loss) on net investment hedges | 22.7 | 49 | 16.1 | 22.8 |
Total foreign currency translation adjustments | (111.6) | (83.7) | (13.1) | 5.7 |
Derivatives and hedging instruments | 3.6 | 17.4 | (2) | 15.3 |
Pension and postretirement benefits | ||||
Amortization of net actuarial loss and prior service cost included in net periodic pension and postretirement costs | 7.4 | 16 | 3.4 | 16.3 |
Postretirement benefits changes | 14.4 | 14.4 | ||
Total pension and postretirement benefits | 7.4 | 30.4 | 3.4 | 30.7 |
Subtotal | (100.6) | (35.9) | (11.7) | 51.7 |
Total comprehensive income, including noncontrolling interest | 271.6 | 317.7 | 660.9 | 653.5 |
Comprehensive income attributable to noncontrolling interest | 4.5 | 0.8 | 9.3 | 4.2 |
Comprehensive income attributable to Ecolab | $ 267.1 | $ 316.9 | $ 651.6 | $ 649.3 |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 85.7 | $ 114.7 |
Accounts receivable, net | 2,747.1 | 2,662.5 |
Inventories | 1,625.3 | 1,546.4 |
Other current assets | 395.4 | 354.1 |
Total current assets | 4,853.5 | 4,677.7 |
Property, plant and equipment, net | 3,866.9 | 3,836 |
Goodwill | 7,234.1 | 7,078 |
Other intangible assets, net | 3,776.2 | 3,797.7 |
Operating lease assets | 549.8 | |
Other assets | 547.1 | 685.1 |
Total assets | 20,827.6 | 20,074.5 |
Current liabilities | ||
Short-term debt | 1,069.4 | 743.6 |
Accounts payable | 1,297.9 | 1,255.6 |
Compensation and benefits | 460.5 | 579.7 |
Income taxes | 81.5 | 100.6 |
Other current liabilities | 1,218.4 | 1,006.1 |
Total current liabilities | 4,127.7 | 3,685.6 |
Long-term debt | 5,987.1 | 6,301.6 |
Postretirement health care and pension benefits | 928.2 | 944.3 |
Deferred income taxes | 791.2 | 764.6 |
Operating lease liabilities | 398.6 | |
Other liabilities | 325.4 | 324.8 |
Total liabilities | 12,558.2 | 12,020.9 |
Commitments and contingencies (Note 17) | ||
Equity | ||
Common stock | 358.9 | 357 |
Additional paid-in capital | 5,815.7 | 5,633.2 |
Retained earnings | 9,368 | 8,909.5 |
Accumulated other comprehensive loss | (1,836.4) | (1,761.7) |
Treasury stock | (5,480.8) | (5,134.8) |
Total Ecolab shareholders' equity | 8,225.4 | 8,003.2 |
Noncontrolling interest | 44 | 50.4 |
Total equity | 8,269.4 | 8,053.6 |
Total liabilities and equity | $ 20,827.6 | $ 20,074.5 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares shares in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
CONSOLIDATED BALANCE SHEET | ||
Common stock, shares authorized | 800 | 800 |
Common stock, par value per share (in dollars per share) | $ 1 | $ 1 |
Common stock, shares outstanding | 287.8 | 287.7 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
OPERATING ACTIVITIES | ||
Net income including noncontrolling interest | $ 672.6 | $ 601.8 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation | 323.3 | 305.5 |
Amortization | 160.5 | 160.3 |
Deferred income taxes | (3.1) | 32.6 |
Share-based compensation expense | 59.5 | 61.8 |
Pension and postretirement plan contributions | (31) | (34) |
Pension and postretirement plan expense | 10.2 | 17 |
Restructuring charges, net of cash paid | 23.1 | (6.3) |
Other, net | 13.3 | 12.3 |
Changes in operating assets and liabilities, net of effect of acquisitions: | ||
Accounts receivable | (75.2) | (88.5) |
Inventories | (82.9) | (118.9) |
Other assets | (66.4) | (47.1) |
Accounts payable | 36.2 | 79.8 |
Other liabilities | (122.6) | (190.6) |
Cash provided by operating activities | 917.5 | 785.7 |
INVESTING ACTIVITIES | ||
Capital expenditures | (370.5) | (412.5) |
Property and other assets sold | 3.5 | 24.5 |
Acquisitions and investments in affiliates, net of cash acquired | (288.8) | (78.1) |
Divestiture of businesses | 5.8 | 8.4 |
Settlement of net investment hedges | 14.1 | |
Other, net | (7.5) | (0.8) |
Cash used for investing activities | (657.5) | (444.4) |
FINANCING ACTIVITIES | ||
Net issuances of commercial paper and notes payable | 434.3 | 222.7 |
Long-term debt repayments | (401) | (300.6) |
Reacquired shares | (347.5) | (215.8) |
Dividends paid | (280.7) | (252.3) |
Exercise of employee stock options | 119.7 | 50.4 |
Acquisition related liabilities and contingent consideration | (0.5) | (10.3) |
Other, net | (0.6) | |
Cash used for financing activities | (475.7) | (506.5) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 7.4 | 8 |
Increase (decrease) in cash, cash equivalents and restricted cash | (208.3) | (157.2) |
Cash, cash equivalents and restricted cash, beginning of period | 294 | 211.4 |
Cash, cash equivalents and restricted cash, end of period | $ 85.7 | $ 54.2 |
CONSOLIDATED STATEMENT OF CAS_2
CONSOLIDATED STATEMENT OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 | Jun. 30, 2018 |
Other Assets | |||
Restricted Cash | $ 0 | $ 179.3 | $ 0 |
CONSOLIDATED STATEMENT OF EQUIT
CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Millions | Ecolab Shareholders Equity | Common Stock | Additional Paid-in Capital | Retained Earnings | OCI (Loss) | Treasury Stock | Non-Controlling Interest | Total |
Balance at Dec. 31, 2017 | $ 7,583.6 | $ 354.7 | $ 5,435.7 | $ 8,011.6 | $ (1,643.4) | $ (4,575) | $ 70.2 | $ 7,653.8 |
Increase (Decrease) in Stockholders' Equity | ||||||||
New accounting guidance adoption | (43.6) | (43.6) | (43.6) | |||||
Net income | 598.6 | 598.6 | 3.2 | 601.8 | ||||
Comprehensive income (loss) activity | 50.7 | 50.7 | 1 | 51.7 | ||||
Cash dividends declared | (236.7) | (236.7) | (15.4) | (252.1) | ||||
Stock options and awards | 112.7 | 1.2 | 109.9 | 1.6 | 112.7 | |||
Reacquired shares | (215.8) | (215.8) | (215.8) | |||||
Balance at Jun. 30, 2018 | 7,849.5 | 355.9 | 5,545.6 | 8,329.9 | (1,592.7) | (4,789.2) | 59 | 7,908.5 |
Balance at Mar. 31, 2018 | 7,601 | 355.5 | 5,496.5 | 8,097 | (1,558.3) | (4,789.7) | 68.9 | 7,669.9 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 351.3 | 351.3 | 2.3 | 353.6 | ||||
Comprehensive income (loss) activity | (34.4) | (34.4) | (1.5) | (35.9) | ||||
Cash dividends declared | (118.4) | (118.4) | (10.7) | (129.1) | ||||
Stock options and awards | 50.7 | 0.4 | 49.1 | 1.2 | 50.7 | |||
Reacquired shares | (0.7) | (0.7) | (0.7) | |||||
Balance at Jun. 30, 2018 | 7,849.5 | 355.9 | 5,545.6 | 8,329.9 | (1,592.7) | (4,789.2) | 59 | 7,908.5 |
Balance at Dec. 31, 2018 | 8,003.2 | 357 | 5,633.2 | 8,909.5 | (1,761.7) | (5,134.8) | 50.4 | 8,053.6 |
Increase (Decrease) in Stockholders' Equity | ||||||||
New accounting guidance adoption | (2.8) | 58.4 | (61.2) | (2.8) | ||||
Net income | 665.1 | 665.1 | 7.5 | 672.6 | ||||
Comprehensive income (loss) activity | (13.5) | (13.5) | 1.8 | (11.7) | ||||
Cash dividends declared | (265) | (265) | (15.7) | (280.7) | ||||
Stock options and awards | 185.9 | 1.9 | 182.5 | 1.5 | 185.9 | |||
Reacquired shares | (347.5) | (347.5) | (347.5) | |||||
Balance at Jun. 30, 2019 | 8,225.4 | 358.9 | 5,815.7 | 9,368 | (1,836.4) | (5,480.8) | 44 | 8,269.4 |
Balance at Mar. 31, 2019 | 8,220.7 | 358.2 | 5,731 | 9,131.8 | (1,734.9) | (5,265.4) | 46.2 | 8,266.9 |
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 368.6 | 368.6 | 3.6 | 372.2 | ||||
Comprehensive income (loss) activity | (101.5) | (101.5) | 0.9 | (100.6) | ||||
Cash dividends declared | (132.4) | (132.4) | (6.7) | (139.1) | ||||
Stock options and awards | 86 | 0.7 | 84.7 | 0.6 | 86 | |||
Reacquired shares | (216) | (216) | (216) | |||||
Balance at Jun. 30, 2019 | $ 8,225.4 | $ 358.9 | $ 5,815.7 | $ 9,368 | $ (1,836.4) | $ (5,480.8) | $ 44 | $ 8,269.4 |
CONSOLIDATED STATEMENT OF EQU_2
CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
CONSOLIDATED STATEMENT OF EQUITY | ||||
Dividends declared per common share (in dollars per share) | $ 0.460 | $ 0.410 | $ 0.920 | $ 0.820 |
CONSOLIDATED FINANCIAL INFORMAT
CONSOLIDATED FINANCIAL INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
CONSOLIDATED FINANCIAL INFORMATION | |
CONSOLIDATED FINANCIAL INFORMATION | 1. CONSOLIDATED FINANCIAL INFORMATION The unaudited consolidated financial information for the second quarter and six months ended June 30, 2019 and 2018 reflect, 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. 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, 2018 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, 2018. Sales, cost of sales and selling, general and administrative expenses in the selected consolidated income statement information includes immaterial revisions to amounts previously reported in the Company’s quarterly reports on Form 10-Q for each of the first three quarters of 2018. The revisions had no impact on previously reported total net sales or operating income. Except for the changes due to the adoption of the new accounting standards, the Company has consistently applied the accounting policies to all periods presented in these consolidated financial statements. Upstream Energy Spin-off Ecolab intends to pursue, subject to the receipt of approval by Ecolab’s Board of Directors and any regulatory approvals, a plan to separate and spin-off the Upstream business of Ecolab’s Global Energy segment (the Upstream Business) through a series of tax-efficient transactions (collectively, the Spin-off). Under the plan, if effectuated, Ecolab’s shareholders would own 100% of the common stock of a new corporation that owns the Upstream Business. The Spin-off is expected to be completed in 2020 and is intended to qualify as a tax-free distribution to Ecolab shareholders for U.S. federal income tax purposes. With respect to the unaudited financial information of the Company for the second quarter and six months ended June 30, 2019 and 2018 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 August 1, 2019 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. |
SPECIAL (GAINS) AND CHARGES
SPECIAL (GAINS) AND CHARGES | 6 Months Ended |
Jun. 30, 2019 | |
SPECIAL (GAINS) AND CHARGES | |
SPECIAL (GAINS) AND CHARGES | 2. SPECIAL (GAINS) AND CHARGES Special (gains) and charges reported on the Consolidated Statement of Income include the following: Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Cost of sales Restructuring activities $6.6 $0.4 $10.0 $0.4 Acquisition and integration activities 1.3 (0.5) 1.5 (0.5) Subtotal 7.9 (0.1) 11.5 (0.1) Special (gains) and charges Restructuring activities 30.9 8.9 68.0 9.2 Upstream energy spin-off 14.5 - 18.8 - Acquisition and integration activities 0.4 1.8 2.9 2.3 Other 4.1 1.4 0.5 26.6 Subtotal 49.9 12.1 90.2 38.1 Operating income subtotal 57.8 12.0 101.7 38.0 Interest expense, net - - 0.2 - Total special (gains) and charges $57.8 $12.0 $101.9 $38.0 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 Restructuring activities are primarily related to Accelerate 2020 (described below). These activities have been included as a component of both cost of sales and special (gains) and charges on the Consolidated Statement of Income. Restructuring liabilities have been classified as a component of other current and other noncurrent liabilities on the Consolidated Balance Sheet. Accelerate 2020 During the third quarter of 2018, the Company formally commenced a restructuring plan Accelerate 2020 (“the Plan”), to leverage technology and system investments and organizational changes. During the first quarter of 2019, the Company raised its goals for the Plan 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. T he Company now expects that the restructuring activities will be completed by the end of 2020, with total anticipated costs of $260 million ($190 million after tax) over this period of time. The 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 of $37.5 million ($29.1 million after tax) and $78.0 million ($59.5 million after tax) in the second quarter and first six months of 2019. The liability related to this Plan was $90.6 million as of the end of the second quarter. The Company has recorded $182.6 million ($139.1 million after tax) of cumulative restructuring charges under the Plan. Restructuring activity related to the Plan since inception of the underlying actions includes the following: Employee Termination Asset (millions) Costs Disposals Other Total 2018 Activity Recorded expense $ 94.1 $ 5.0 $ 5.5 $ 104.6 Net cash payments (32.8) - (2.4) (35.2) Non-cash charges - (5.0) - (5.0) Effect of foreign currency translation (0.5) - - (0.5) Restructuring liability, December 31, 2018 60.8 - 3.1 63.9 2019 Activity Recorded expense 63.6 0.6 13.8 78.0 Net cash payments (39.8) 0.2 (10.7) (50.3) Non-cash charges - (0.8) - (0.8) Effect of foreign currency translation (0.2) - - (0.2) Restructuring liability, June 30, 2019 $ 84.4 $ - $ 6.2 $ 90.6 Other Restructuring Activities Prior to 2018, the Company engaged in a number of restructuring plans. During the second quarter and first six months of 2019, net restructuring charges related to the prior year plans were minimal. During the second quarter and first six months of 2018, net restructuring gains related to the prior year plans were $0.8 million ($0.6 million after tax) and $0.5 million ($0.3 million after tax), respectively. The restructuring liability balance for all plans commencing prior to 2018 was $10.5 million and $14.9 million as of June 30, 2019 and December 31, 2018, respectively. The reduction in liability was driven primarily by severance payments. The majority of pretax charges represent net cash expenditures which are 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 2019 related to restructuring plans commencing prior to 2018 were $4.3 million. Upstream energy spin-off During the first quarter of 2019, the Company announced its intention to pursue a plan to separate and spin-off the Upstream business of Ecolab’s Global Energy segment (the Upstream Business). The charges reported in special (gains) and charges on the Consolidated Statement of Income include $14.5 million ($12.4 million after tax) and $18.8 million ($15.7 million after tax) in the second quarter and first six months of 2019, respectively, which are primarily related to professional fees. Acquisition and integration related costs Acquisition and integration costs reported in special (gains) and charges on the Consolidated Statement of Income include $0.4 million ($0.3 million after tax) and $2.9 million ($2.1 million after tax) in the second quarter and first six months of 2019, respectively. Charges are related to Bioquell, PLC (“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 $1.5 million ($1.1 million after tax) on the Consolidated Statement of Income in the first six months of 2019 relate to the recognition of fair value step-up in the Bioquell inventory. The Company also incurred $0.2 million ($0.1 million after tax) of interest expense in the first six months of 2019. Acquisition and integration costs reported in special (gains) and charges on the Consolidated Statement of Income include $1.8 million ($1.3 million after tax) and $2.3 million ($1.7 million after tax) in the second quarter and first six months of 2018, respectively. Charges are related to Anios integration costs, advisory and legal fees. Acquisition and integration gain reported in product and equipment cost of sales of $0.5 million ($0.4 million after tax) on the Consolidated Statement of Income in the second quarter of 2018 relate to changes in estimates related to an early lease exit. Further information related to the Company’s acquisitions is included in Note 3. Other During the second quarter and first six months of 2019, the Company recorded other special charges of $4.1 million ($3.1 million after tax) and $0.5 million ($1.2 million gain after tax), respectively, which primarily related to legal charges partially offset by a litigation settlement. During the second quarter and first six months of 2018, the Company recorded other special charges of $1.4 million and $26.6 million, respectively, which primarily consisted of $25.0 million ($18.9 million after tax) commitment to the Ecolab Foundation in response to the new U.S. tax law. Other charges were minimal in both the second quarter and first six months of 2018. |
ACQUISITIONS AND DISPOSITIONS
ACQUISITIONS AND DISPOSITIONS | 6 Months Ended |
Jun. 30, 2019 | |
ACQUISITIONS AND DISPOSITIONS | |
ACQUISITIONS AND DISPOSITIONS | 3. ACQUISITIONS AND DISPOSITIONS Acquisitions The Company makes business acquisitions that align with its strategic business objectives. The assets and liabilities of the acquired businesses have been recorded as of the acquisition date, at their respective fair values, and are included in the Consolidated Balance Sheet. The purchase price allocation is based on estimates of the fair value of assets acquired and liabilities assumed. The aggregate purchase price of acquisitions has been reduced for any cash or cash equivalents acquired with the acquisition. Acquisitions during the first six months of 2019 and 2018 were not significant to the Company’s consolidated financial statements; therefore, pro forma financial information is not presented. 2019 Activity During the first six months of 2019, the Company acquired Bioquell, a life sciences business which is a seller of bio-decontamination products and services to the Life Sciences and Healthcare industries. This business became part of the Global Industrial reportable segment. During 2018, the Company deposited $179.3 million ( £ 140.5 million) in an escrow account that was released to the Company upon closing of the transaction in February 2019 . As shown within Note 4, this was recorded as restricted cash within other assets on the Consolidated Balance Sheet as of December 31, 2018. The Company also acquired Lobster Ink, a leading provider of end-to-end online customer training solutions. This acquired business became part of the Global Institutional reportable segment. The purchase price included an earn-out based on certain revenue thresholds in any of the full three years following the acquisition, which has been recorded as contingent consideration in other liabilities in the Consolidated Balance Sheet as of June 30, 2019. These acquisitions have been accounted for using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed to be recognized at fair value as of the acquisition date. Certain estimated values, primarily working capital adjustments, are not yet finalized and are subject to change. Annualized sales for the businesses acquired in 2019 are $63 million. There were insignificant purchase price adjustments related to prior year acquisitions. 2018 Activity During the first six months of 2018, the Company acquired a water business which provides a range of services to Nalco Water institutional customers. This acquired business became part of the Company’s Global Industrial reportable segment. In addition, the Company acquired an institutional business which provides a range of cleaning and disinfection products for the hospitality, leisure, residential care, housekeeping and janitorial sectors. These acquisitions have been accounted for using the acquisition method of accounting. There were insignificant purchase price adjustments related to prior year acquisitions. The components of the cash paid for acquisitions for transactions during the second quarter and first six months of 2019 and 2018 are shown in the following table. Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Net tangible assets (liabilities) acquired and equity method investments $5.5 $5.1 $(9.4) $2.4 Identifiable intangible assets Customer relationships 1.5 - 71.9 40.8 Trademarks - - 20.4 1.1 Other technology - - 45.9 4.0 Total intangible assets 1.5 - 138.2 45.9 Goodwill 0.3 (2.2) 180.5 30.4 Total aggregate purchase price 7.3 2.9 309.3 78.7 Acquisition related liabilities and contingent consideration - - (20.5) (0.6) Net cash paid for acquisitions, including acquisition related liabilities and contingent consideration $7.3 $2.9 $288.8 $78.1 The 2019 and 2018 acquisition related liabilities are related to holdback liabilities and contingent consideration. The weighted average useful life of these identifiable intangible assets acquired was 12 and 11 years as of June 30, 2019 and 2018, respectively. Dispositions There were no significant business dispositions during the first six months of 2019 and 2018. |
BALANCE SHEET INFORMATION
BALANCE SHEET INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
BALANCE SHEET INFORMATION | |
BALANCE SHEET INFORMATION | 4. BALANCE SHEET INFORMATION June 30 December 31 (millions) 2019 2018 Accounts receivable, net Accounts receivable $2,809.7 $2,723.1 Allowance for doubtful accounts (62.6) (60.6) Total $2,747.1 $2,662.5 Inventories Finished goods $1,060.0 $1,016.9 Raw materials and parts 568.0 525.6 Inventories at FIFO cost 1,628.0 1,542.5 FIFO cost to LIFO cost difference (2.7) 3.9 Total $1,625.3 $1,546.4 Other current assets Prepaid assets $153.9 $132.1 Taxes receivable 157.8 144.2 Derivative assets 57.2 42.8 Other 26.5 35.0 Total $395.4 $354.1 Property, plant and equipment, net Land $212.8 $214.5 Buildings and leasehold improvements 1,315.7 1,279.4 Machinery and equipment 2,396.1 2,313.7 Merchandising and customer equipment 2,668.8 2,565.5 Capitalized software 714.4 666.2 Construction in progress 390.7 400.2 7,698.5 7,439.5 Accumulated depreciation (3,831.6) (3,603.5) Total $3,866.9 $3,836.0 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 3,709.7 3,649.3 Trademarks 405.6 384.9 Patents 473.5 470.2 Other technology 288.2 242.8 4,877.0 4,747.2 Accumulated amortization Customer relationships (1,719.9) (1,604.0) Trademarks (190.0) (175.2) Patents (219.0) (207.3) Other technology (201.9) (193.0) (2,330.8) (2,179.5) Net intangible assets subject to amortization 2,546.2 2,567.7 Total $3,776.2 $3,797.7 Other assets Deferred income taxes $106.5 $105.1 Pension 43.6 39.0 Derivative asset 33.3 11.8 Restricted cash - 179.3 Other 363.7 349.9 Total $547.1 $685.1 June 30 December 31 (millions) 2019 2018 Other current liabilities Discounts and rebates $326.3 $291.3 Dividends payable 132.3 132.4 Interest payable 46.5 44.5 Taxes payable, other than income 112.1 116.9 Derivative liabilities 23.1 20.1 Restructuring 96.3 73.7 Contract liability 83.2 75.8 Operating lease liabilities 151.3 - Other 247.3 251.4 Total $1,218.4 $1,006.1 Accumulated other comprehensive loss Unrealized gain (loss) on derivative financial instruments, net of tax $(2.7) $2.0 Unrecognized pension and postretirement benefit expense, net of tax (574.0) (518.9) Cumulative translation, net of tax (1,259.7) (1,244.8) Total $(1,836.4) $(1,761.7) |
DEBT AND INTEREST
DEBT AND INTEREST | 6 Months Ended |
Jun. 30, 2019 | |
DEBT AND INTEREST | |
DEBT AND INTEREST | 5. DEBT AND INTEREST Short-term Debt The following table provides the components of the Company’s short-term debt obligations as of June 30, 2019 and December 31, 2018. June 30 December 31 (millions) 2019 2018 Short-term debt Commercial paper $746.3 $165.4 Notes payable 22.5 176.8 Long-term debt, current maturities 300.6 401.4 Total $1,069.4 $743.6 Line of Credit As of June 30, 2019, the Company had in place a $2.0 billion multi-year credit facility which expires in November 2022. 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 no borrowings under the Company’s credit facility as of either June 30, 2019 or December 31, 2018. Commercial Paper The Company’s commercial paper program is used as a 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. As of June 30, 2019, the Company had $480.3 million (€430.0 million) of commercial paper outstanding under its Euro program and $266.0 million outstanding under its U.S. program. As of December 31, 2018, the Company had $141.4 million (€125.0 million) of commercial paper outstanding under its Euro program and $24.0 million outstanding under its U.S. program. 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 June 30, 2019 and December 31, 2018, the Company had $22.5 million and $176.8 million, respectively, outstanding under these credit lines. Long-term Debt The following table provides the components of the Company’s long-term debt obligations, including current maturities, as of June 30, 2019 and December 31, 2018. Maturity June 30 December 31 (millions) by Year 2019 2018 Long-term debt Public notes (2019 principal amount) Three year 2016 senior notes ($400 million) 2019 $- $399.7 Five year 2015 senior notes ($300 million) 2020 299.8 299.5 Ten year 2011 senior notes ($1.02 billion) 2021 1,017.9 1,017.6 Five year 2017 senior notes ($500 million) 2022 497.3 496.9 Seven year 2016 senior notes ($400 million) 2023 398.3 398.0 Seven year 2016 senior notes (€575 million) 2024 636.7 644.1 Ten year 2015 senior notes (€575 million) 2025 638.6 646.3 Ten year 2016 senior notes ($750 million) 2026 744.1 743.8 Ten year 2017 senior notes ($500 million) 2027 495.1 494.8 Thirty year 2011 senior notes ($458 million) 2041 451.7 451.6 Thirty year 2016 senior notes ($250 million) 2046 246.2 246.1 Thirty year 2017 senior notes ($700 million) 2047 609.7 609.0 Private notes (2019 principal amount) Series B private placement senior notes ($250 million) 2023 249.5 249.4 Finance lease obligations and other 2.8 6.2 Total debt 6,287.7 6,703.0 Long-term debt, current maturities (300.6) (401.4) Total long-term debt $5,987.1 $6,301.6 Public Notes 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 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 June 30, 2019. Net Interest Expense Interest expense and interest income recognized during the second quarter and first six months of 2019 and 2018 were as follows: Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Interest expense $54.9 $60.2 $111.0 $121.2 Interest income (5.4) (3.9) (12.1) (8.5) Interest expense, net $49.5 $56.3 $98.9 $112.7 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | 6. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets acquired in a business combination. The Company’s reporting units are its operating segments. During the second quarter of 2019, the Company completed its annual assessment for goodwill impairment across its eleven reporting units through a quantitative analysis, utilizing a discounted cash flow approach, which incorporates 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 for 2019 indicated the estimated fair value of each of its reporting units exceeded its carrying amount 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 no impairment of goodwill in any of the years presented. The changes in the carrying amount of goodwill for each of the Company's reportable segments during the six months ended June 30, 2019 were as follows: Global Global Global (millions) Industrial Institutional Energy Other Total December 31, 2018 $2,730.8 $1,015.3 $3,126.6 $205.3 $7,078.0 Current year business combinations (a) 93.2 86.8 - 0.7 180.7 Prior year business combinations (b) (0.2) - - - (0.2) Effect of foreign currency translation (9.5) (3.7) (10.5) (0.7) (24.4) June 30, 2019 $2,814.3 $1,098.4 $3,116.1 $205.3 $7,234.1 (a) Represents goodwill associated with current year acquisitions. The Company expects $0.7 million of the goodwill related to businesses acquired to be tax deductible. (b) Represents the purchase price allocation adjustments for acquisitions deemed preliminary as of the end of the prior year. Other Intangible Assets The Nalco trade name is the Company’s principal indefinite life intangible asset. During the second quarter of 2019, the Company completed its annual test for indefinite life intangible asset impairment using a relief from royalty method of assessment, which incorporates assumptions regarding future sales projections, royalty rate and discount rates. Based on this testing, the estimated fair value of the asset exceeded its carrying value by a significant margin; therefore, no adjustment to the $1.2 billion carrying value of this asset was necessary. There has been no impairment of the Nalco trade name intangible since it was acquired. The Company’s intangible assets subject to amortization primarily include customer relationships, trademarks, patents and other technology. The fair value of identifiable intangible assets is estimated based upon discounted future cash flow projections and other acceptable valuation methods. Other intangible assets are amortized on a straight-line basis over their estimated economic lives. Total amortization expense related to other intangible assets during the second quarter of 2019 and 2018 was $80.7 million and $80.1 million, respectively. Total amortization expense related to other intangible assets during the first six months of 2019 and 2018 was $160.5 million and $160.3 million, respectively. Estimated amortization for the remaining six month period of 2019 related to other amortizable intangible assets is expected to be approximately $161 million. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2019 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 7. 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: June 30, 2019 (millions) Carrying Fair Value Measurements Amount Level 1 Level 2 Level 3 Assets Foreign currency forward contracts $101.1 $- $101.1 $- Liabilities Foreign currency forward contracts 37.6 - 37.6 - December 31, 2018 (millions) Carrying Fair Value Measurements Amount Level 1 Level 2 Level 3 Assets Foreign currency forward contracts $72.3 $- $72.3 $- Liabilities Foreign currency forward contracts 41.1 - 41.1 - Interest rate swap agreements 0.2 - 0.2 - 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 discussion of gross versus net presentation of the Company's derivatives within Note 8. Contingent consideration obligations are recognized and measured at fair value at the acquisition date and thereafter until settlement. Contingent consideration is classified within level 3 as the underlying fair value is measured based on the probability-weighted present value of the consideration expected to be transferred. 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 as Level 2). The carrying amount and the estimated fair value of long-term debt, including current maturities, held by the Company were: June 30, 2019 December 31, 2018 Carrying Fair Carrying Fair Amount Value Amount Value Long-term debt, including current maturities $6,287.7 $6,851.2 $6,703.0 $6,844.7 |
DERIVATIVES AND HEDGING TRANSAC
DERIVATIVES AND HEDGING TRANSACTIONS | 6 Months Ended |
Jun. 30, 2019 | |
DERIVATIVES AND HEDGING TRANSACTIONS | |
DERIVATIVES AND HEDGING TRANSACTIONS | 8. DERIVATIVES AND HEDGING TRANSACTIONS The Company uses 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 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 on the balance sheet 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. 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, no cash collateral had been received or pledged related to the underlying derivatives. The respective net amounts are included in other current assets, other assets, other current liabilities and other liabilities on the Consolidated Balance Sheet. The following table summarizes the gross fair value and the net value of the Company’s outstanding derivatives. (millions) Derivatives Assets Derivatives Liabilities June 30 December 31 June 30 December 31 (millions) 2019 2018 2019 2018 Derivatives designated as hedging instruments Foreign currency forward contracts $61.8 $40.4 $2.4 $10.2 Interest rate swap agreements - - - 0.2 Derivatives not designated as hedging instruments Foreign currency forward contracts 39.3 31.9 35.2 30.9 Gross value of derivatives 101.1 72.3 37.6 41.3 Gross amounts offset in the Consolidated Balance Sheet (10.6) (17.7) (10.6) (17.7) Net value of derivatives $90.5 $54.6 $27.0 $23.6 The following table summarizes the notional values of the Company’s outstanding derivatives. Notional Values June 30 December 31 (millions) 2019 2018 Foreign currency forward contracts $ 5,707 $ 6,226 Interest rate agreements - 400 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 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 in the Consolidated Statement of Income as the underlying exposure being hedged. Cash flow hedged transactions impacting AOCI are forecasted to occur within the next three years . For forward contracts designated as hedges of foreign currency exchange rate risk associated with forecasted foreign currency transactions, the Company excludes the changes in fair value attributable to time value from the assessment of hedge effectiveness. The initial value of the excluded component (i.e., the forward points) is amortized on a straight-line basis over the life of the hedging instrument and recognized in the same line item in the Consolidated Statement of Income as the underlying exposure being hedged for intercompany loans. For all other cash flow hedge types, the forward points are mark-to-market monthly and recognized in the same line item in the Consolidated Statement of Income as the underlying exposure being hedged. The difference between fair value changes of the excluded component and the amount amortized in the Consolidated Statement of Income is recorded in AOCI. The Company occasionally enters into treasury lock and forward starting interest rate swap agreements to manage interest rate exposure. During 2015 and 2016, the Company entered into and subsequently closed a series of treasury lock and forward starting interest rate swap agreements, in conjunction with its public debt issuances. The agreements were designated and effective as cash flow hedges of the expected interest payments related to the anticipated future debt issuances. Amounts recorded in AOCI are recognized as part of interest expense over the remaining life of the notes as the forecasted interest transactions occur. 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 the underlying debt instrument, which also is recorded in interest expense. These fair value hedges are highly effective. In January 2016, the Company entered into an interest rate swap agreement that converted its $400 million 2.00% debt from a fixed interest rate to a floating interest rate. In January 2015, the Company entered into 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. The interest rate swap agreements tied to the Company’s $300 million 1.55% debt, $250 million 3.69% and $400 million 2.00% debt expired in January 2018, November 2018 and January 2019, respectively, upon repayment of the underlying debt. The interest rate swaps referenced above were designated as fair value hedges. The following amounts were recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges: Line item in which the hedged item is included 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 Second Quarter Ended June 30 June 30 (millions) 2019 2018 2019 2018 Long-term debt $- $645.5 $- $3.7 Net Investment Hedges The Company designates its outstanding $1,275 million (€1,150 million at the end of the second quarter of 2019) senior notes (“euronotes”) and related accrued interest as hedges of existing foreign currency exposures related to investments the Company has in certain euro denominated functional currency subsidiaries. $335 million (€300 million at the end of the second quarter of 2019) of Euro commercial paper were also designated as a hedge of existing foreign currency exposures. The revaluation gains and losses on the euronotes and Euro commercial paper, 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: Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Revaluation gains (losses), net of tax $22.7 $49.0 $16.1 $22.8 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 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 2019 2018 (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 $4.7 $26.6 $- $(4.8) $74.5 $- Amount excluded from the assessment of effectiveness recognized in earnings based on changes in fair value - - 7.3 - - 8.5 Interest rate swap agreements Amount of gain (loss) reclassified from AOCI to income - - (0.3) - - (1.6) Gain (loss) on derivatives in fair value hedging relationship: Interest rate swaps Hedged items - - - - - (1.4) Derivatives designated as hedging instruments - - - - - 1.4 Gain (loss) on derivatives not designated as hedging instruments: Foreign currency forward contracts Amount of gain (loss) recognized in income - 7.9 - - 16.3 2.1 Total gain (loss) $4.7 $34.5 $7.0 $(4.8) $90.8 $9.0 Six Months Ended June 30 2019 2018 (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 $9.1 $19.5 $- $(6.7) $26.9 $- Amount excluded from the assessment of effectiveness recognized in earnings based on changes in fair value - - 14.3 - - 16.8 Interest rate swap agreements Amount of gain (loss) reclassified from AOCI to income - - (0.5) - - (3.4) Gain (loss) on derivatives in fair value hedging relationship: Interest rate swaps Hedged items - - 0.2 - - (0.3) Derivatives designated as hedging instruments - - (0.2) - - 0.3 Gain (loss) on derivatives not designated as hedging instruments: Foreign currency forward contracts Amount of gain (loss) recognized in income - 14.0 - - (2.1) 3.7 Total gain (loss) $9.1 $33.5 $13.8 $(6.7) $24.8 $17.1 |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION | 6 Months Ended |
Jun. 30, 2019 | |
OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION | |
OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION | 9. 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 Note 8 for additional information related to the Company’s derivatives and hedging transactions. See Note 14 for additional information related to the Company’s pension and postretirement benefits activity. Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Derivative and Hedging Instruments Unrealized gains (losses) on derivative & hedging instruments Amount recognized in AOCI $43.0 $97.6 $40.1 $52.7 (Gains) losses reclassified from AOCI into income COS (4.7) 4.8 (9.1) 6.7 SG&A (26.6) (74.5) (19.5) (26.9) Interest (income) expense, net (7.0) (6.9) (13.8) (13.4) (38.3) (76.6) (42.4) (33.6) Other activity (0.1) 0.2 (0.1) (0.1) Tax impact (1.0) (3.8) 0.4 (3.7) Net of tax $3.6 $17.4 $(2.0) $15.3 Pension and Postretirement Benefits Amount reclassified from AOCI into income Amortization of net actuarial loss and prior service costs and benefits 0.2 7.7 0.2 15.4 Pension and postretirement benefits changes - 18.9 - 18.9 0.2 26.6 0.2 34.3 Other activity 7.3 10.1 3.3 4.6 Tax impact (0.1) (6.3) (0.1) (8.2) Net of tax $7.4 $30.4 $3.4 $30.7 The following table summarizes the derivative and pension and postretirement benefit amounts reclassified from AOCI into income. Second Quarter Ended Six Months Ended June 30 June 30 2019 2018 2019 2018 (millions) Derivative (gains) losses reclassified from AOCI into income, net of tax $(29.0) $(59.8) $(32.0) $(26.3) Pension and postretirement benefits net actuarial losses and prior services costs reclassified from AOCI into income, net of tax 7.4 5.8 3.4 11.5 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2019 | |
SHAREHOLDERS' EQUITY | |
SHAREHOLDERS' EQUITY | 10. 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 June 30, 2019, 6,820,810 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. Share Repurchases During the first six months of 2019, the Company reacquired 1,953,485 shares of its common stock, of which 1,830,584 related to share repurchases through open market or private purchases, and 122,901 related to shares withheld for taxes on the exercise of stock options and the vesting of stock awards and units. During all of 2018, the Company reacquired 3,908,041 shares of its common stock, of which 3,706,716 related to share repurchases through open market or private purchases, and 201,325 related to shares withheld for taxes on the exercise of stock options and the vesting of stock awards and units. |
EARNINGS ATTRIBUTABLE TO ECOLAB
EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE ("EPS") | 6 Months Ended |
Jun. 30, 2019 | |
EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE ("EPS") | |
EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE ("EPS") | 11. 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: Second Quarter Ended Six Months Ended June 30 June 30 (millions, except per share) 2019 2018 2019 2018 Net income attributable to Ecolab $368.6 $351.3 $665.1 $598.6 Weighted-average common shares outstanding Basic 287.6 288.8 287.9 288.7 Effect of dilutive stock options and units 4.4 4.5 4.3 4.3 Diluted 292.1 293.3 292.2 293.0 Basic EPS $ 1.28 $ 1.22 $ 2.31 $ 2.07 Diluted EPS $ 1.26 $ 1.20 $ 2.28 $ 2.04 Anti-dilutive securities excluded from the computation of diluted EPS 0.3 1.6 1.5 1.6 Amounts do not necessarily sum due to rounding. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2019 | |
INCOME TAXES | |
INCOME TAXES | 12. INCOME TAXES The Company’s tax rate was 20.8% and 22.8% for the second quarter of 2019 and 2018, respectively, and 16.9% and 22.4% for the first six months of 2019 and 2018, respectively. The change in the Company’s tax rate for the second quarter and first six months of 2019 compared to the second quarter and first six months of 2018 was driven primarily by the impact of discrete tax items, special (gains) and charges, tax planning and the geographic mix of income. The Company recognized net tax expense related to discrete tax items of $1.0 million and net benefits of $26.7 million in the second quarter and first six months of 2019, respectively. Share-based compensation excess tax benefit contributed $13.1 million and $31.8 million in the second quarter and first six months of 2019, respectively. The Company also recognized expense of $6.2 million and $1.1 million in the second quarter and first six months of 2019, respectively, due to issuance of technical guidance during the respective quarters related to the one-time transition tax imposed by the Tax Cuts and Jobs Act (the “Act”). Additionally, the Company recognized expense of $10.2 million in the second quarter and first six months of 2019 due to issuance of technical guidance during the quarter related to the calculation of foreign tax credits. The remaining discrete benefit was primarily related to changes in tax rates and changes in estimates in non-U.S. jurisdictions. The Company recorded a net discrete tax benefit of $12.1 million and $12.0 million in the second quarter and first six months of 2018, respectively. The Company recorded discrete tax expense of $18.2 million and $29.5 million in the second quarter and first six months of 2018, respectively, for the one-time transition tax due to issuance of technical guidance during the respective quarters. Discrete tax items include excess tax benefits related to share-based compensation of $6.0 million and $12.8 million during the second quarter and first six months of 2018, respectively. The remaining discrete tax benefits related to changes in the Company’s state tax profile and changes in reserves in non-U.S. jurisdictions were recorded in the second quarter and first six months of 2018. |
RENTALS AND LEASES
RENTALS AND LEASES | 6 Months Ended |
Jun. 30, 2019 | |
RENTALS AND LEASES | |
RENTAL AND LEASES | 13. RENTAL AND LEASES Lessee The Company leases sales and administrative office facilities, distribution centers, research and manufacturing facilities, as well as vehicles and other equipment under operating leases. The Company also enters into insignificant finance leases. The Company determines whether a lease exists at the inception of the arrangement. In assessing whether a contract is or contains a lease, the Company considers a lease a contract that conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company accounts for lease components separately from the nonlease components (e.g., common-area maintenance costs). Operating leases are recorded in operating lease assets, other current liabilities and operating lease liabilities in the Consolidated Balance Sheet. Operating lease assets and operating lease liabilities are measured and recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The Company uses the rate implicit in the lease when available or determinable and when the rate implicit in the lease is not determinable, the Company’s incremental borrowing rate based on the information available at commencement date is used in determining the present value of future payments. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are not included in the lease liability and are recognized as incurred. The Company identified real estate, vehicles and other equipment as the primary classes of leases. Certain leases with a similar class of underlying assets are accounted for as a portfolio of leases. The Company elected to not apply the recognition requirements of the new standard to leases with terms of twelve months or less. Those lease payments will continue to be recognized in the Consolidated Statement of Income on a straight-line basis over the lease term and are not recorded on the Consolidated Balance Sheet. Most leases include one or more options to renew, which is at the Company’s sole discretion, with renewal terms that can extend the lease term from one month to multiple years. The lease start date is when the asset is available for use and in possession of the Company. The lease end date, which includes any options to renew that are reasonably certain to be exercised, is based on the terms of the contract. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any material restrictive covenants. The Company’s operating lease cost was as follows: Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2019 Operating lease cost* $55.8 $110.2 *Includes immaterial short-term and variable lease costs Future maturity of operating lease liabilities as of June 30, 2019 is as follows: (millions) Remainder of 2019 $ 86 2020 160 2021 124 2022 85 2023 46 2024 28 Thereafter 100 Total lease payments 629 Less: imputed interest 79 Present value of lease liabilities $ 550 As of December 31, 2018, identifiable future minimum payments with non-cancelable terms in excess of one year were: (millions) 2019 $ 172 2020 141 2021 108 2022 72 2023 37 Thereafter 104 Total $ 634 The Company’s operating leases term and discount rate were as follows: June 30 2019 Weighted-average remaining lease terms (years) 5.6 Weighted-average discount rate 4.01% The Company’s other lease information was as follows: Six Months Ended June 30 (millions) 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $99.5 Leased assets obtained in exchange for new operating lease liabilities 65.2 Lessor The Company leases warewashing and water treatment equipment to customers under operating leases. The Company’s accounting policy for these leases is to account for lease and nonlease components separately. The nonlease components, such as product and service revenue, are accounted for under Topic 606 Revenue from Contracts with Customers, see Note 15. Revenue from leasing equipment is recognized on a straight-line basis over the life of the lease. Cost of sales includes the depreciation expense for assets under operating leases. The assets are depreciated over their estimated useful lives. Initial lease terms range from one year to five years and most leases include annual renewal options. Lease contracts convey the right for the customer to control the equipment for a period of time as defined by the contract. There are no options for the customer to purchase the equipment and therefore the equipment remains the property of the Company at the end of the lease term. The gross assets under operating leases recorded in Property, plant and equipment, net is $1,064.0 million and related accumulated depreciation is $602.3 million as of June 30, 2019. The Company’s operating lease revenue was as follows: Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2019 Operating lease revenue* $104.6 $207.5 *Includes immaterial variable lease revenue Revenue from operating leases for existing contracts as of June 30, 2019 is as follows: (millions) Remainder of 2019 $ 177 2020 314 2021 239 2022 169 2023 92 2024 32 Thereafter 11 Total lease revenue $ 1,034 The Company mitigates the risk of residual value subsequent to the lease term by redeploying assets. As such, the Company expects to receive revenue from the operating lease assets through the remaining useful life and therefore subsequent to the initial contract termination date. |
PENSION AND POSTRETIREMENT PLAN
PENSION AND POSTRETIREMENT PLANS | 6 Months Ended |
Jun. 30, 2019 | |
PENSION AND POSTRETIREMENT PLANS | |
PENSION AND POSTRETIREMENT PLANS | 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. The components of net periodic pension and postretirement health care benefit costs for the second quarter ended June 30 are as follows: U.S. International U.S. Postretirement Pension Pension Health Care (millions) 2019 2018 2019 2018 2019 2018 Service cost $18.2 $18.6 $7.5 $8.5 $0.3 $0.9 Interest cost on benefit obligation 22.3 20.8 7.9 7.4 1.4 1.5 Expected return on plan assets (37.4) (40.5) (15.2) (16.4) (0.1) (0.1) Recognition of net actuarial (gain) loss 5.9 9.8 4.2 4.4 (1.0) (0.5) Amortization of prior service cost (benefit) (2.9) (1.7) (0.2) (0.2) (5.8) (4.1) Total expense (benefit) $6.1 $7.0 $4.2 $3.7 $(5.2) $(2.3) The components of net periodic pension and postretirement health care benefit costs for the six months ended June 30 are as follows: U.S. International U.S. Postretirement Pension Pension Health Care (millions) 2019 2018 2019 2018 2019 2018 Service cost $36.4 $37.2 $15.2 $17.0 $0.7 $1.8 Interest cost on benefit obligation 44.5 41.6 15.8 14.9 2.8 3.0 Expected return on plan assets (74.8) (81.0) (30.4) (32.7) (0.2) (0.2) Recognition of net actuarial (gain) loss 11.8 19.6 8.2 8.8 (2.0) (1.0) Amortization of prior service cost (benefit) (5.7) (3.4) (0.5) (0.4) (11.6) (8.2) Total expense (benefit) $12.2 $14.0 $8.3 $7.6 $(10.3) $(4.6) Service cost is included with employee compensation cost in cost of sales and selling, general and administrative expenses in the Consolidated Statement of Income while all other components are included in other (income) expense in the Consolidated Statement of Income. As of June 30, 2019, the Company is in compliance with all funding requirements of its U.S. pension and postretirement health care plans. During the first six months of 2019, the Company made contributions of $2 million to its U.S. non-contributory non-qualified defined benefit plans and estimates it will contribute approximately an additional $4 million to such plans during the remainder of 2019. In addition, the Company expects to make an $120 million voluntary contribution in 2019 to its non-contributory qualified U.S. pension plan. During the first six months of 2019, the Company made contributions of $23 million to its international pension benefit plans and estimates it will contribute approximately an additional $19 million to such plans during the remainder of 2019. During the first six months of 2019, the Company made contributions of $6 million to its U.S. postretirement health care benefit plans and estimates it will contribute approximately an additional $5 million to such plans during the remainder of 2019. |
REVENUES
REVENUES | 6 Months Ended |
Jun. 30, 2019 | |
REVENUES | |
REVENUES | 15. REVENUES Revenue Recognition Product and Sold Equipment Product revenue is generated from cleaning, sanitizing, water, energy and colloidal silica products provided to customers in the Global Industrial, Global Institutional, Global Energy segments and Other. In addition, the Company sells equipment which may be used in combination with its specialized products. Revenue recognized from product and sold equipment 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. Services provided in Other primary includes services designed to detect, eliminate and prevent pests. Global Energy services include process and water treatment offerings to the global petroleum and petrochemical industries, while services in the Global Industrial segment are associated with water treatment and paper process applications. Global Institutional services include water treatment programs and process applications, and wash process solutions. Revenue recognized from leased equipment primarily relates to warewashing and water treatment equipment. 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 for leased equipment is accounted for under Topic 842 Leases and recognized on a straight-line basis over the length of the lease contract. Refer to Note 13 for additional information related to lease equipment. The following table shows principal activities, separated by reportable segments, from which the Company generates its revenue. For more information about the Company’s reportable segments, refer to Note 16. Net sales at public exchange rates by reportable segment for the second quarter and six months ended June 30 are as follows: Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Global Industrial Product and sold equipment $1,211.1 $1,162.7 $2,336.7 $2,232.5 Service and lease equipment 169.7 164.6 325.4 320.7 Global Institutional Product and sold equipment 1,125.4 1,128.4 2,156.0 2,167.0 Service and lease equipment 186.4 168.2 364.3 335.9 Global Energy Product and sold equipment 733.9 748.6 1,443.3 1,481.2 Service and lease equipment 103.5 96.6 203.5 206.9 Other Product and sold equipment 21.7 20.8 42.4 39.4 Service and lease equipment 207.7 199.7 393.2 376.9 Total Total product and sold equipment $3,092.1 $3,060.5 $5,978.4 $5,920.1 Total service and lease equipment 667.3 629.1 1,286.4 1,240.4 Net sales at public exchange rates by geographic region for the second quarter ended June 30 are as follows: Global Global Global Industrial Institutional Energy Other (millions) 2019 2018 2019 2018 2019 2018 2019 2018 North America $631.0 $596.0 $907.6 $877.3 $479.9 $487.6 $157.6 $149.4 Europe 345.6 336.3 256.0 270.1 106.7 104.0 34.0 33.5 Asia Pacific 176.8 171.4 62.8 64.2 60.9 67.0 9.5 10.0 Latin America 124.0 119.9 41.3 42.4 51.8 53.6 11.5 12.0 Greater China 66.2 69.8 28.2 27.3 21.4 18.1 14.0 12.8 Middle East and Africa 37.2 33.9 15.9 15.3 116.7 114.9 2.8 2.8 Total $1,380.8 $1,327.3 $1,311.8 $1,296.6 $837.4 $845.2 $229.4 $220.5 Net sales at public exchange rates by geographic region for the first six months ended June 30 are as follows: Global Global Global Industrial Institutional Energy Other (millions) 2019 2018 2019 2018 2019 2018 2019 2018 North America $1,228.7 $1,152.7 $1,740.4 $1,694.3 $949.6 $972.7 $295.9 $279.4 Europe 654.6 633.5 487.9 514.7 207.0 205.8 64.4 63.8 Asia Pacific 341.2 332.3 122.5 124.5 118.5 134.4 19.3 18.9 Latin America 241.0 229.2 81.9 83.6 101.4 108.2 23.3 23.7 Greater China 129.1 140.9 59.7 56.6 41.9 36.4 27.2 24.8 Middle East and Africa 67.5 64.6 27.9 29.2 228.4 230.6 5.5 5.7 Total $2,662.1 $2,553.2 $2,520.3 $2,502.9 $1,646.8 $1,688.1 $435.6 $416.3 Net sales by geographic region were determined based on origin of sale. Revenues in the United States made up 54% and 53% of total revenues as of June 30, 2019 and 2018, respectively. 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 performance (primarily service obligations) under the contract. Contract liabilities are recognized as revenue when the performance obligation has been performed, which primarily occurs during the subsequent quarter. June 30 June 30 (millions) 2019 2018 Contract liability as of beginning of period $75.8 $79.0 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period (75.8) (79.0) Increases due to billings excluding amounts recognized as revenue during the period 80.2 87.1 Business combination 3.0 0.2 Contract liability as of end of period $83.2 $87.3 |
OPERATING SEGMENTS
OPERATING SEGMENTS | 6 Months Ended |
Jun. 30, 2019 | |
OPERATING SEGMENTS | |
OPERATING SEGMENTS | 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 reportable segments: Global Industrial, Global Institutional and Global Energy. The Company’s operating segments that do not meet the quantitative criteria to be separately reported have been combined into Other. The Company provides similar information for Other 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 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 2019. The “Other” column shown in the table reflects immaterial changes between segments, primarily cost allocations. The impact of the preceding changes on previously reported full year 2018 reportable segment net sales and operating income is summarized as follows: December 31, 2018 2018 Reported Fixed 2018 Revised Valued at 2018 Currency Valued at 2019 (millions) Management Rates Other Rate Change Management Rates Net Sales Global Industrial $5,462.4 $- $(242.2) $5,220.2 Global Institutional 5,204.5 - (138.5) 5,066.0 Global Energy 3,501.8 - (113.0) 3,388.8 Other 877.6 - (21.9) 855.7 Subtotal at fixed currency rates 15,046.3 - (515.6) 14,530.7 Effect of foreign currency translation (378.1) - 515.6 137.5 Consolidated reported GAAP net sales $14,668.2 $- $- $14,668.2 Operating Income Global Industrial $768.1 $(1.4) $(42.3) $724.4 Global Institutional 1,026.9 - (19.6) 1,007.3 Global Energy 358.5 (0.4) (19.6) 338.5 Other 161.3 1.8 (3.1) 160.0 Corporate (307.1) - 3.5 (303.6) Subtotal at fixed currency rates 2,007.7 - (81.1) 1,926.6 Effect of foreign currency translation (60.7) - 81.1 20.4 Consolidated reported GAAP operating income $1,947.0 $- $- $1,947.0 Reportable Segment Information Financial information for each of the Company’s reportable segments, is as follows: Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Net Sales Global Industrial $1,393.9 $1,290.2 $2,683.1 $2,480.4 Global Institutional 1,323.5 1,277.5 2,538.8 2,464.5 Global Energy 840.4 831.0 1,652.1 1,657.5 Other 230.5 216.8 437.3 409.2 Subtotal at fixed currency rates 3,788.3 3,615.5 7,311.3 7,011.6 Effect of foreign currency translation (28.9) 74.1 (46.5) 148.9 Consolidated reported GAAP net sales $3,759.4 $3,689.6 $7,264.8 $7,160.5 Operating Income Global Industrial $208.7 $162.8 $356.2 $284.8 Global Institutional 258.9 247.0 454.8 442.7 Global Energy 88.9 86.4 167.3 155.0 Other 44.1 39.0 74.3 66.0 Corporate (97.6) (54.0) (181.3) (122.2) Subtotal at fixed currency rates 503.0 481.2 871.3 826.3 Effect of foreign currency translation (4.4) 13.4 (5.5) 22.6 Consolidated reported GAAP operating income $498.6 $494.6 $865.8 $848.9 The profitability of the Company’s operating segments is evaluated by management based on operating income. Consistent with the Company’s internal management reporting, Corporate amounts in the table above include 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. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 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, income taxes, environmental matters and lawsuits. The Company is also subject to various claims and contingencies related to income taxes, which are discussed in Note 12. The Company also has contractual obligations including to lease commitments, which are discussed in Note 13. The Company records liabilities where 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, commercial, patent infringement, 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 40 locations, the majority of which are in the U.S., 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 deep water 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 the Company’s 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 (“B1” claims). In April 2017, Nalco was named in two additional complaints 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 consolidated in the MDL. 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. On July 10, 2018, the Court entered an order dismissing the “B1” claims against Nalco. In light of the Court’s orders dismissing various “B3” and “B1” claims in their entirety, for most plaintiffs the Court’s November 28, 2012 grant of summary judgment for Nalco is now final and the deadline to appeal has passed. On October 23, 2018, a plaintiff filed a new “B3” complaint against Nalco and other unaffiliated defendants generally alleging, among other things, negligence and gross negligence related to the use of Corexit dispersant in connection with the Deepwater Horizon oil spill. The complaint was consolidated in the MDL. There currently remain three cases pending against Nalco, all of which are expected to ultimately be dismissed pursuant to the Court’s November 28, 2012 order granting Nalco’s motion for summary judgment. 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. |
NEW ACCOUNTING PRONOUNCEMENTS
NEW ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Jun. 30, 2019 | |
NEW ACCOUNTING PRONOUNCEMENTS | |
NEW ACCOUNTING PRONOUNCEMENTS | 18. NEW ACCOUNTING PRONOUNCEMENTS Standards that are not yet adopted: Required Date of Date of Effect on the Standard Issuance Description Adoption Financial Statements ASU 2018-15 - Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) August 2018 Aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The amendments require an entity (customer) in a hosting arrangement that is a service contract to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. January 1, 2020 The ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently evaluating the impact of adoption. ASU 2018-14 - Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans August 2018 Modifies disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This includes, but is not limited to, the removal of the requirement to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, and the addition of a requirement to disclose the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates. January 1, 2020 Entities are required to apply the disclosure amendments on a retrospective basis to all periods presented. The Company is currently evaluating the impact of adoption. ASU 2017-04 - Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment January 2017 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. January 1, 2020 The ASU must be applied on a prospective basis upon adoption. Adoption of the ASU is not expected to have a material impact on the Company's financial statements. Credit Losses ASUs: Various 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 may change how the allowance for trade and other receivables is calculated. The Company has reviewed current accounting policies and is in the process of developing future policies and evaluating the impact of adoption. Standards that were adopted: Date of Date of Effect on the Standard Issuance Description Adoption Financial Statements ASU 2018-02 - Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income February 2018 Allows entities to reclassify stranded tax effects resulting from the Tax Cut and Jobs Act (“the Act”) from accumulated other comprehensive income to retained earnings. Tax effects stranded in other comprehensive income for reasons other than the impact of the Act cannot be reclassified. January 1, 2019 In order to improve the usefulness and transparency, the Company made the election to reclassify $61.2 million of income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings related to pension and derivatives. ASU 2018-16 - Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes Various Amends the hedge accounting recognition and presentation requirements. Simplifies 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. Expands the benchmark interest rates that can be used for hedge accounting. January 1, 2019 Adoption of this guidance did not have a material impact on the results of operations, financial position or cash flows. Required disclosures under the new guidance is included in Note 8. Lease ASUs: Various 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 financial statements at the bottom of this table in note (a). No other new accounting pronouncement issued or effective has had or is expected to have a material impact on the Company’s consolidated financial statements. (a) Leases On January 1, 2019, the Company adopted Accounting Standards Codification Topic 842 Leases (“the new lease standard”) prospectively and recorded a cumulative effect adjustment to the opening balance of retained earnings of $2.8 million. The Company elected the package of practical expedients permitted under the transition guidance within the new lease standard, which allows the Company to carryforward the historical lease classification, to not reassess whether existing contracts are or contain a lease and not to reassess initial direct costs. The Company also elected the land easement practical expedient. In addition, the Company elected the hindsight practical expedient to determine the lease term for existing leases. When applying the hindsight expedient, the Company determined that most renewal options would not be reasonably certain in determining the expected lease term. The Company made an accounting policy election to not apply the recognition requirements of the new standard to leases with terms of twelve months or less and which do not include an option to purchase the underlying assets which is reasonably certain of exercise. Adoption of the new standard resulted in the recording of additional net operating lease assets and operating lease liabilities of approximately $572.2 million and $575.0 million, respectively, as of January 1, 2019. The difference between the operating lease assets and operating lease liabilities was recorded as an adjustment to retained earnings. There was no impact to consolidated net earnings or cash flows. Further information related to the Company’s adoption of the new lease standard is included in Note 13. |
SPECIAL (GAINS) AND CHARGES (Ta
SPECIAL (GAINS) AND CHARGES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
SPECIAL (GAINS) AND CHARGES | |
Special (gains) and charges | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Cost of sales Restructuring activities $6.6 $0.4 $10.0 $0.4 Acquisition and integration activities 1.3 (0.5) 1.5 (0.5) Subtotal 7.9 (0.1) 11.5 (0.1) Special (gains) and charges Restructuring activities 30.9 8.9 68.0 9.2 Upstream energy spin-off 14.5 - 18.8 - Acquisition and integration activities 0.4 1.8 2.9 2.3 Other 4.1 1.4 0.5 26.6 Subtotal 49.9 12.1 90.2 38.1 Operating income subtotal 57.8 12.0 101.7 38.0 Interest expense, net - - 0.2 - Total special (gains) and charges $57.8 $12.0 $101.9 $38.0 |
Restructuring activity | Employee Termination Asset (millions) Costs Disposals Other Total 2018 Activity Recorded expense $ 94.1 $ 5.0 $ 5.5 $ 104.6 Net cash payments (32.8) - (2.4) (35.2) Non-cash charges - (5.0) - (5.0) Effect of foreign currency translation (0.5) - - (0.5) Restructuring liability, December 31, 2018 60.8 - 3.1 63.9 2019 Activity Recorded expense 63.6 0.6 13.8 78.0 Net cash payments (39.8) 0.2 (10.7) (50.3) Non-cash charges - (0.8) - (0.8) Effect of foreign currency translation (0.2) - - (0.2) Restructuring liability, June 30, 2019 $ 84.4 $ - $ 6.2 $ 90.6 |
ACQUISITIONS AND DISPOSITIONS (
ACQUISITIONS AND DISPOSITIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
ACQUISITIONS AND DISPOSITIONS | |
Schedule of assets acquired and liabilities assumed | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Net tangible assets (liabilities) acquired and equity method investments $5.5 $5.1 $(9.4) $2.4 Identifiable intangible assets Customer relationships 1.5 - 71.9 40.8 Trademarks - - 20.4 1.1 Other technology - - 45.9 4.0 Total intangible assets 1.5 - 138.2 45.9 Goodwill 0.3 (2.2) 180.5 30.4 Total aggregate purchase price 7.3 2.9 309.3 78.7 Acquisition related liabilities and contingent consideration - - (20.5) (0.6) Net cash paid for acquisitions, including acquisition related liabilities and contingent consideration $7.3 $2.9 $288.8 $78.1 |
BALANCE SHEET INFORMATION (Tabl
BALANCE SHEET INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
BALANCE SHEET INFORMATION | |
Balance Sheet Information | June 30 December 31 (millions) 2019 2018 Accounts receivable, net Accounts receivable $2,809.7 $2,723.1 Allowance for doubtful accounts (62.6) (60.6) Total $2,747.1 $2,662.5 Inventories Finished goods $1,060.0 $1,016.9 Raw materials and parts 568.0 525.6 Inventories at FIFO cost 1,628.0 1,542.5 FIFO cost to LIFO cost difference (2.7) 3.9 Total $1,625.3 $1,546.4 Other current assets Prepaid assets $153.9 $132.1 Taxes receivable 157.8 144.2 Derivative assets 57.2 42.8 Other 26.5 35.0 Total $395.4 $354.1 Property, plant and equipment, net Land $212.8 $214.5 Buildings and leasehold improvements 1,315.7 1,279.4 Machinery and equipment 2,396.1 2,313.7 Merchandising and customer equipment 2,668.8 2,565.5 Capitalized software 714.4 666.2 Construction in progress 390.7 400.2 7,698.5 7,439.5 Accumulated depreciation (3,831.6) (3,603.5) Total $3,866.9 $3,836.0 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 3,709.7 3,649.3 Trademarks 405.6 384.9 Patents 473.5 470.2 Other technology 288.2 242.8 4,877.0 4,747.2 Accumulated amortization Customer relationships (1,719.9) (1,604.0) Trademarks (190.0) (175.2) Patents (219.0) (207.3) Other technology (201.9) (193.0) (2,330.8) (2,179.5) Net intangible assets subject to amortization 2,546.2 2,567.7 Total $3,776.2 $3,797.7 Other assets Deferred income taxes $106.5 $105.1 Pension 43.6 39.0 Derivative asset 33.3 11.8 Restricted cash - 179.3 Other 363.7 349.9 Total $547.1 $685.1 June 30 December 31 (millions) 2019 2018 Other current liabilities Discounts and rebates $326.3 $291.3 Dividends payable 132.3 132.4 Interest payable 46.5 44.5 Taxes payable, other than income 112.1 116.9 Derivative liabilities 23.1 20.1 Restructuring 96.3 73.7 Contract liability 83.2 75.8 Operating lease liabilities 151.3 - Other 247.3 251.4 Total $1,218.4 $1,006.1 Accumulated other comprehensive loss Unrealized gain (loss) on derivative financial instruments, net of tax $(2.7) $2.0 Unrecognized pension and postretirement benefit expense, net of tax (574.0) (518.9) Cumulative translation, net of tax (1,259.7) (1,244.8) Total $(1,836.4) $(1,761.7) |
DEBT AND INTEREST (Tables)
DEBT AND INTEREST (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
DEBT AND INTEREST | |
Schedule of short-term debt obligations | June 30 December 31 (millions) 2019 2018 Short-term debt Commercial paper $746.3 $165.4 Notes payable 22.5 176.8 Long-term debt, current maturities 300.6 401.4 Total $1,069.4 $743.6 |
Schedule of long-term debt obligations including current maturities | Maturity June 30 December 31 (millions) by Year 2019 2018 Long-term debt Public notes (2019 principal amount) Three year 2016 senior notes ($400 million) 2019 $- $399.7 Five year 2015 senior notes ($300 million) 2020 299.8 299.5 Ten year 2011 senior notes ($1.02 billion) 2021 1,017.9 1,017.6 Five year 2017 senior notes ($500 million) 2022 497.3 496.9 Seven year 2016 senior notes ($400 million) 2023 398.3 398.0 Seven year 2016 senior notes (€575 million) 2024 636.7 644.1 Ten year 2015 senior notes (€575 million) 2025 638.6 646.3 Ten year 2016 senior notes ($750 million) 2026 744.1 743.8 Ten year 2017 senior notes ($500 million) 2027 495.1 494.8 Thirty year 2011 senior notes ($458 million) 2041 451.7 451.6 Thirty year 2016 senior notes ($250 million) 2046 246.2 246.1 Thirty year 2017 senior notes ($700 million) 2047 609.7 609.0 Private notes (2019 principal amount) Series B private placement senior notes ($250 million) 2023 249.5 249.4 Finance lease obligations and other 2.8 6.2 Total debt 6,287.7 6,703.0 Long-term debt, current maturities (300.6) (401.4) Total long-term debt $5,987.1 $6,301.6 |
Schedule of interest expense and interest income | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Interest expense $54.9 $60.2 $111.0 $121.2 Interest income (5.4) (3.9) (12.1) (8.5) Interest expense, net $49.5 $56.3 $98.9 $112.7 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Changes in the carrying amount of goodwill | Global Global Global (millions) Industrial Institutional Energy Other Total December 31, 2018 $2,730.8 $1,015.3 $3,126.6 $205.3 $7,078.0 Current year business combinations (a) 93.2 86.8 - 0.7 180.7 Prior year business combinations (b) (0.2) - - - (0.2) Effect of foreign currency translation (9.5) (3.7) (10.5) (0.7) (24.4) June 30, 2019 $2,814.3 $1,098.4 $3,116.1 $205.3 $7,234.1 (a) Represents goodwill associated with current year acquisitions. The Company expects $0.7 million of the goodwill related to businesses acquired to be tax deductible. (b) Represents the purchase price allocation adjustments for acquisitions deemed preliminary as of the end of the prior year. |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
FAIR VALUE MEASUREMENTS | |
Schedule of the carrying amount and estimated fair value of assets and liabilities measured on recurring basis | June 30, 2019 (millions) Carrying Fair Value Measurements Amount Level 1 Level 2 Level 3 Assets Foreign currency forward contracts $101.1 $- $101.1 $- Liabilities Foreign currency forward contracts 37.6 - 37.6 - December 31, 2018 (millions) Carrying Fair Value Measurements Amount Level 1 Level 2 Level 3 Assets Foreign currency forward contracts $72.3 $- $72.3 $- Liabilities Foreign currency forward contracts 41.1 - 41.1 - Interest rate swap agreements 0.2 - 0.2 - |
Schedule of carrying amount and estimated fair value of long-term debt | June 30, 2019 December 31, 2018 Carrying Fair Carrying Fair Amount Value Amount Value Long-term debt, including current maturities $6,287.7 $6,851.2 $6,703.0 $6,844.7 |
DERIVATIVES AND HEDGING TRANS_2
DERIVATIVES AND HEDGING TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
DERIVATIVES AND HEDGING TRANSACTIONS | |
Gross fair value of the company's outstanding derivative assets and liabilities | (millions) Derivatives Assets Derivatives Liabilities June 30 December 31 June 30 December 31 (millions) 2019 2018 2019 2018 Derivatives designated as hedging instruments Foreign currency forward contracts $61.8 $40.4 $2.4 $10.2 Interest rate swap agreements - - - 0.2 Derivatives not designated as hedging instruments Foreign currency forward contracts 39.3 31.9 35.2 30.9 Gross value of derivatives 101.1 72.3 37.6 41.3 Gross amounts offset in the Consolidated Balance Sheet (10.6) (17.7) (10.6) (17.7) Net value of derivatives $90.5 $54.6 $27.0 $23.6 |
Summary of notional values of outstanding derivatives | Notional Values June 30 December 31 (millions) 2019 2018 Foreign currency forward contracts $ 5,707 $ 6,226 Interest rate agreements - 400 |
Schedule of amounts on the Balance Sheet related to cumulative basis adjustments for fair value hedges | Line item in which the hedged item is included 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 Second Quarter Ended June 30 June 30 (millions) 2019 2018 2019 2018 Long-term debt $- $645.5 $- $3.7 |
Revaluation gains and losses on euronotes and forward contracts | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Revaluation gains (losses), net of tax $22.7 $49.0 $16.1 $22.8 |
Impact on AOCI and earnings from derivative contracts qualified as cash flow hedges | Second Quarter Ended June 30 2019 2018 (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 $4.7 $26.6 $- $(4.8) $74.5 $- Amount excluded from the assessment of effectiveness recognized in earnings based on changes in fair value - - 7.3 - - 8.5 Interest rate swap agreements Amount of gain (loss) reclassified from AOCI to income - - (0.3) - - (1.6) Gain (loss) on derivatives in fair value hedging relationship: Interest rate swaps Hedged items - - - - - (1.4) Derivatives designated as hedging instruments - - - - - 1.4 Gain (loss) on derivatives not designated as hedging instruments: Foreign currency forward contracts Amount of gain (loss) recognized in income - 7.9 - - 16.3 2.1 Total gain (loss) $4.7 $34.5 $7.0 $(4.8) $90.8 $9.0 Six Months Ended June 30 2019 2018 (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 $9.1 $19.5 $- $(6.7) $26.9 $- Amount excluded from the assessment of effectiveness recognized in earnings based on changes in fair value - - 14.3 - - 16.8 Interest rate swap agreements Amount of gain (loss) reclassified from AOCI to income - - (0.5) - - (3.4) Gain (loss) on derivatives in fair value hedging relationship: Interest rate swaps Hedged items - - 0.2 - - (0.3) Derivatives designated as hedging instruments - - (0.2) - - 0.3 Gain (loss) on derivatives not designated as hedging instruments: Foreign currency forward contracts Amount of gain (loss) recognized in income - 14.0 - - (2.1) 3.7 Total gain (loss) $9.1 $33.5 $13.8 $(6.7) $24.8 $17.1 |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION | |
Schedule of other comprehensive income information related to the Company's derivatives and hedging instruments and pension and postretirement benefits | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Derivative and Hedging Instruments Unrealized gains (losses) on derivative & hedging instruments Amount recognized in AOCI $43.0 $97.6 $40.1 $52.7 (Gains) losses reclassified from AOCI into income COS (4.7) 4.8 (9.1) 6.7 SG&A (26.6) (74.5) (19.5) (26.9) Interest (income) expense, net (7.0) (6.9) (13.8) (13.4) (38.3) (76.6) (42.4) (33.6) Other activity (0.1) 0.2 (0.1) (0.1) Tax impact (1.0) (3.8) 0.4 (3.7) Net of tax $3.6 $17.4 $(2.0) $15.3 Pension and Postretirement Benefits Amount reclassified from AOCI into income Amortization of net actuarial loss and prior service costs and benefits 0.2 7.7 0.2 15.4 Pension and postretirement benefits changes - 18.9 - 18.9 0.2 26.6 0.2 34.3 Other activity 7.3 10.1 3.3 4.6 Tax impact (0.1) (6.3) (0.1) (8.2) Net of tax $7.4 $30.4 $3.4 $30.7 |
Summary of the net of tax derivative and pension and postretirement benefit amounts reclassified from AOCI into income | Second Quarter Ended Six Months Ended June 30 June 30 2019 2018 2019 2018 (millions) Derivative (gains) losses reclassified from AOCI into income, net of tax $(29.0) $(59.8) $(32.0) $(26.3) Pension and postretirement benefits net actuarial losses and prior services costs reclassified from AOCI into income, net of tax 7.4 5.8 3.4 11.5 |
EARNINGS ATTRIBUTABLE TO ECOL_2
EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE ("EPS") (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE ("EPS") | |
Computations of the basic and diluted EPS | Second Quarter Ended Six Months Ended June 30 June 30 (millions, except per share) 2019 2018 2019 2018 Net income attributable to Ecolab $368.6 $351.3 $665.1 $598.6 Weighted-average common shares outstanding Basic 287.6 288.8 287.9 288.7 Effect of dilutive stock options and units 4.4 4.5 4.3 4.3 Diluted 292.1 293.3 292.2 293.0 Basic EPS $ 1.28 $ 1.22 $ 2.31 $ 2.07 Diluted EPS $ 1.26 $ 1.20 $ 2.28 $ 2.04 Anti-dilutive securities excluded from the computation of diluted EPS 0.3 1.6 1.5 1.6 Amounts do not necessarily sum due to rounding. |
RENTALS AND LEASES (Tables)
RENTALS AND LEASES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
RENTALS AND LEASES | |
Schedule of operating lease cost | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2019 Operating lease cost* $55.8 $110.2 *Includes immaterial short-term and variable lease costs |
Schedule of future maturity of operating lease liabilities | Future maturity of operating lease liabilities as of June 30, 2019 is as follows: (millions) Remainder of 2019 $ 86 2020 160 2021 124 2022 85 2023 46 2024 28 Thereafter 100 Total lease payments 629 Less: imputed interest 79 Present value of lease liabilities $ 550 As of December 31, 2018, identifiable future minimum payments with non-cancelable terms in excess of one year were: (millions) 2019 $ 172 2020 141 2021 108 2022 72 2023 37 Thereafter 104 Total $ 634 |
Schedule of operating leases term and discount rate | June 30 2019 Weighted-average remaining lease terms (years) 5.6 Weighted-average discount rate 4.01% |
Schedule of other lease information | Six Months Ended June 30 (millions) 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $99.5 Leased assets obtained in exchange for new operating lease liabilities 65.2 |
Schedule of operating lease revenue | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2019 Operating lease revenue* $104.6 $207.5 *Includes immaterial variable lease revenue |
Schedule of revenue from operating leases for existing contracts | Revenue from operating leases for existing contracts as of June 30, 2019 is as follows: (millions) Remainder of 2019 $ 177 2020 314 2021 239 2022 169 2023 92 2024 32 Thereafter 11 Total lease revenue $ 1,034 |
PENSION AND POSTRETIREMENT PL_2
PENSION AND POSTRETIREMENT PLANS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
PENSION AND POSTRETIREMENT PLANS | |
Net periodic pension and postretirement health care benefit costs | The components of net periodic pension and postretirement health care benefit costs for the second quarter ended June 30 are as follows: U.S. International U.S. Postretirement Pension Pension Health Care (millions) 2019 2018 2019 2018 2019 2018 Service cost $18.2 $18.6 $7.5 $8.5 $0.3 $0.9 Interest cost on benefit obligation 22.3 20.8 7.9 7.4 1.4 1.5 Expected return on plan assets (37.4) (40.5) (15.2) (16.4) (0.1) (0.1) Recognition of net actuarial (gain) loss 5.9 9.8 4.2 4.4 (1.0) (0.5) Amortization of prior service cost (benefit) (2.9) (1.7) (0.2) (0.2) (5.8) (4.1) Total expense (benefit) $6.1 $7.0 $4.2 $3.7 $(5.2) $(2.3) The components of net periodic pension and postretirement health care benefit costs for the six months ended June 30 are as follows: U.S. International U.S. Postretirement Pension Pension Health Care (millions) 2019 2018 2019 2018 2019 2018 Service cost $36.4 $37.2 $15.2 $17.0 $0.7 $1.8 Interest cost on benefit obligation 44.5 41.6 15.8 14.9 2.8 3.0 Expected return on plan assets (74.8) (81.0) (30.4) (32.7) (0.2) (0.2) Recognition of net actuarial (gain) loss 11.8 19.6 8.2 8.8 (2.0) (1.0) Amortization of prior service cost (benefit) (5.7) (3.4) (0.5) (0.4) (11.6) (8.2) Total expense (benefit) $12.2 $14.0 $8.3 $7.6 $(10.3) $(4.6) |
REVENUES (Tables)
REVENUES (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
REVENUES | |
Schedule of principal activities, separated by reportable segments and geographic region | Net sales at public exchange rates by reportable segment for the second quarter and six months ended June 30 are as follows: Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Global Industrial Product and sold equipment $1,211.1 $1,162.7 $2,336.7 $2,232.5 Service and lease equipment 169.7 164.6 325.4 320.7 Global Institutional Product and sold equipment 1,125.4 1,128.4 2,156.0 2,167.0 Service and lease equipment 186.4 168.2 364.3 335.9 Global Energy Product and sold equipment 733.9 748.6 1,443.3 1,481.2 Service and lease equipment 103.5 96.6 203.5 206.9 Other Product and sold equipment 21.7 20.8 42.4 39.4 Service and lease equipment 207.7 199.7 393.2 376.9 Total Total product and sold equipment $3,092.1 $3,060.5 $5,978.4 $5,920.1 Total service and lease equipment 667.3 629.1 1,286.4 1,240.4 Net sales at public exchange rates by geographic region for the second quarter ended June 30 are as follows: Global Global Global Industrial Institutional Energy Other (millions) 2019 2018 2019 2018 2019 2018 2019 2018 North America $631.0 $596.0 $907.6 $877.3 $479.9 $487.6 $157.6 $149.4 Europe 345.6 336.3 256.0 270.1 106.7 104.0 34.0 33.5 Asia Pacific 176.8 171.4 62.8 64.2 60.9 67.0 9.5 10.0 Latin America 124.0 119.9 41.3 42.4 51.8 53.6 11.5 12.0 Greater China 66.2 69.8 28.2 27.3 21.4 18.1 14.0 12.8 Middle East and Africa 37.2 33.9 15.9 15.3 116.7 114.9 2.8 2.8 Total $1,380.8 $1,327.3 $1,311.8 $1,296.6 $837.4 $845.2 $229.4 $220.5 Net sales at public exchange rates by geographic region for the first six months ended June 30 are as follows: Global Global Global Industrial Institutional Energy Other (millions) 2019 2018 2019 2018 2019 2018 2019 2018 North America $1,228.7 $1,152.7 $1,740.4 $1,694.3 $949.6 $972.7 $295.9 $279.4 Europe 654.6 633.5 487.9 514.7 207.0 205.8 64.4 63.8 Asia Pacific 341.2 332.3 122.5 124.5 118.5 134.4 19.3 18.9 Latin America 241.0 229.2 81.9 83.6 101.4 108.2 23.3 23.7 Greater China 129.1 140.9 59.7 56.6 41.9 36.4 27.2 24.8 Middle East and Africa 67.5 64.6 27.9 29.2 228.4 230.6 5.5 5.7 Total $2,662.1 $2,553.2 $2,520.3 $2,502.9 $1,646.8 $1,688.1 $435.6 $416.3 Net sales by geographic region were determined based on origin of sale. Revenues in the United States made up 54% and 53% of total revenues as of June 30, 2019 and 2018, respectively. |
Schedule of contract liability | June 30 June 30 (millions) 2019 2018 Contract liability as of beginning of period $75.8 $79.0 Revenue recognized in the period from: Amounts included in the contract liability at the beginning of the period (75.8) (79.0) Increases due to billings excluding amounts recognized as revenue during the period 80.2 87.1 Business combination 3.0 0.2 Contract liability as of end of period $83.2 $87.3 |
OPERATING SEGMENTS AND GEOGRAPH
OPERATING SEGMENTS AND GEOGRAPHIC INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
OPERATING SEGMENTS | |
Schedule of financial information for each of the entity's reportable segments, including the impact of the preceding changes on previously reported full year 2018 net sales and oeprating income | December 31, 2018 2018 Reported Fixed 2018 Revised Valued at 2018 Currency Valued at 2019 (millions) Management Rates Other Rate Change Management Rates Net Sales Global Industrial $5,462.4 $- $(242.2) $5,220.2 Global Institutional 5,204.5 - (138.5) 5,066.0 Global Energy 3,501.8 - (113.0) 3,388.8 Other 877.6 - (21.9) 855.7 Subtotal at fixed currency rates 15,046.3 - (515.6) 14,530.7 Effect of foreign currency translation (378.1) - 515.6 137.5 Consolidated reported GAAP net sales $14,668.2 $- $- $14,668.2 Operating Income Global Industrial $768.1 $(1.4) $(42.3) $724.4 Global Institutional 1,026.9 - (19.6) 1,007.3 Global Energy 358.5 (0.4) (19.6) 338.5 Other 161.3 1.8 (3.1) 160.0 Corporate (307.1) - 3.5 (303.6) Subtotal at fixed currency rates 2,007.7 - (81.1) 1,926.6 Effect of foreign currency translation (60.7) - 81.1 20.4 Consolidated reported GAAP operating income $1,947.0 $- $- $1,947.0 |
Schedule of financial information for each of the entity's reportable segments | Second Quarter Ended Six Months Ended June 30 June 30 (millions) 2019 2018 2019 2018 Net Sales Global Industrial $1,393.9 $1,290.2 $2,683.1 $2,480.4 Global Institutional 1,323.5 1,277.5 2,538.8 2,464.5 Global Energy 840.4 831.0 1,652.1 1,657.5 Other 230.5 216.8 437.3 409.2 Subtotal at fixed currency rates 3,788.3 3,615.5 7,311.3 7,011.6 Effect of foreign currency translation (28.9) 74.1 (46.5) 148.9 Consolidated reported GAAP net sales $3,759.4 $3,689.6 $7,264.8 $7,160.5 Operating Income Global Industrial $208.7 $162.8 $356.2 $284.8 Global Institutional 258.9 247.0 454.8 442.7 Global Energy 88.9 86.4 167.3 155.0 Other 44.1 39.0 74.3 66.0 Corporate (97.6) (54.0) (181.3) (122.2) Subtotal at fixed currency rates 503.0 481.2 871.3 826.3 Effect of foreign currency translation (4.4) 13.4 (5.5) 22.6 Consolidated reported GAAP operating income $498.6 $494.6 $865.8 $848.9 |
NEW ACCOUNTING PRONOUNCEMENTS (
NEW ACCOUNTING PRONOUNCEMENTS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
NEW ACCOUNTING PRONOUNCEMENTS | |
Schedule of new accounting pronouncements | Standards that are not yet adopted: Required Date of Date of Effect on the Standard Issuance Description Adoption Financial Statements ASU 2018-15 - Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) August 2018 Aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The amendments require an entity (customer) in a hosting arrangement that is a service contract to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. January 1, 2020 The ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently evaluating the impact of adoption. ASU 2018-14 - Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans August 2018 Modifies disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. This includes, but is not limited to, the removal of the requirement to disclose the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year, and the addition of a requirement to disclose the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates. January 1, 2020 Entities are required to apply the disclosure amendments on a retrospective basis to all periods presented. The Company is currently evaluating the impact of adoption. ASU 2017-04 - Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment January 2017 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. January 1, 2020 The ASU must be applied on a prospective basis upon adoption. Adoption of the ASU is not expected to have a material impact on the Company's financial statements. Credit Losses ASUs: Various 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 may change how the allowance for trade and other receivables is calculated. The Company has reviewed current accounting policies and is in the process of developing future policies and evaluating the impact of adoption. Standards that were adopted: Date of Date of Effect on the Standard Issuance Description Adoption Financial Statements ASU 2018-02 - Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income February 2018 Allows entities to reclassify stranded tax effects resulting from the Tax Cut and Jobs Act (“the Act”) from accumulated other comprehensive income to retained earnings. Tax effects stranded in other comprehensive income for reasons other than the impact of the Act cannot be reclassified. January 1, 2019 In order to improve the usefulness and transparency, the Company made the election to reclassify $61.2 million of income tax effects of the Tax Cuts and Jobs Act from accumulated other comprehensive income to retained earnings related to pension and derivatives. ASU 2018-16 - Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes Various Amends the hedge accounting recognition and presentation requirements. Simplifies the application of hedge accounting and the requirements for hedge documentation and effectiveness testing. Requires presentation of all items that affect earnings in the same income statement line as the hedged item. Expands the benchmark interest rates that can be used for hedge accounting. January 1, 2019 Adoption of this guidance did not have a material impact on the results of operations, financial position or cash flows. Required disclosures under the new guidance is included in Note 8. Lease ASUs: Various Introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. January 1, 2019 See additional information regarding the impact of this guidance on the Company's financial statements at the bottom of this table in note (a). |
CONSOLIDATED FINANCIAL INFORM_2
CONSOLIDATED FINANCIAL INFORMATION (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Upstream Business | Forecast | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Shareholder ownership percentage of stock upon completion of spin-off plan | 100.00% |
SPECIAL (GAINS) AND CHARGES - C
SPECIAL (GAINS) AND CHARGES - Charges Reported on Statement of Income (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Special (gains) and charges | ||||
Subtotal | $ 49.9 | $ 12.1 | $ 90.2 | $ 38.1 |
Total special (gains) and charges | 57.8 | 12 | 101.9 | 38 |
Cost of sales | ||||
Special (gains) and charges | ||||
Restructuring activities | 6.6 | 0.4 | 10 | 0.4 |
Acquisition and integration activities | 1.3 | (0.5) | 1.5 | (0.5) |
Subtotal | 7.9 | (0.1) | 11.5 | (0.1) |
Special (gains) and charges | ||||
Special (gains) and charges | ||||
Restructuring activities | 30.9 | 8.9 | 68 | 9.2 |
Acquisition and integration activities | 0.4 | 1.8 | 2.9 | 2.3 |
Upstream energy spin-off | 14.5 | 18.8 | ||
Other special gains and charges | 4.1 | 1.4 | 0.5 | 26.6 |
Subtotal | 49.9 | 12.1 | 90.2 | 38.1 |
Operating income subtotal | ||||
Special (gains) and charges | ||||
Subtotal | $ 57.8 | $ 12 | 101.7 | $ 38 |
Interest expense | ||||
Special (gains) and charges | ||||
Acquisition and integration activities | 0.2 | |||
Subtotal | $ 0.2 |
SPECIAL (GAINS) AND CHARGES - R
SPECIAL (GAINS) AND CHARGES - Restructuring and Non-Restructuring Activity (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Restructuring | |||||
Recorded expense | $ 78 | $ 104.6 | |||
Net cash payments | (50.3) | (35.2) | |||
Non-cash charges | (0.8) | (5) | |||
Effect of foreign currency translation | (0.2) | (0.5) | |||
Restructuring liability | $ 90.6 | 90.6 | 63.9 | ||
Other restructuring information | |||||
Special (gains) and charges | 49.9 | $ 12.1 | 90.2 | $ 38.1 | |
Non-restructuring Special (Gains) and Charges | |||||
Property, Plant and Equipment, Net | 3,866.9 | 3,866.9 | 3,836 | ||
Special (gains) and charges | |||||
Other restructuring information | |||||
Restructuring charges incurred, pre-tax | 30.9 | 8.9 | 68 | 9.2 | |
Upstream energy spin-off | 14.5 | 18.8 | |||
Upstream energy spin-off, net of tax | 12.4 | 15.7 | |||
Special (gains) and charges | 49.9 | 12.1 | 90.2 | 38.1 | |
Business combination advisory and legal fees, pre tax | 0.4 | 1.8 | 2.9 | 2.3 | |
Business combination advisory and legal fees, after tax | 0.3 | 1.3 | 2.1 | 1.7 | |
Other special gains and charges | 4.1 | 1.4 | 0.5 | 26.6 | |
Other special gains and charges, after-tax | 3.1 | (1.2) | |||
Other, Ecolab Foundation, pre-tax | 25 | ||||
Other, Ecolab Foundation, after tax | 18.9 | ||||
Cost of sales | |||||
Other restructuring information | |||||
Restructuring charges incurred, pre-tax | 6.6 | 0.4 | 10 | 0.4 | |
Special (gains) and charges | 7.9 | (0.1) | 11.5 | (0.1) | |
Business combination advisory and legal fees, pre tax | 1.3 | (0.5) | 1.5 | (0.5) | |
Interest expense | |||||
Other restructuring information | |||||
Special (gains) and charges | 0.2 | ||||
Business combination advisory and legal fees, pre tax | 0.2 | ||||
Business combination advisory and legal fees, after tax | 0.1 | ||||
Employee termination costs | |||||
Restructuring | |||||
Recorded expense | 63.6 | 94.1 | |||
Net cash payments | (39.8) | (32.8) | |||
Effect of foreign currency translation | (0.2) | (0.5) | |||
Restructuring liability | 84.4 | 84.4 | 60.8 | ||
Asset disposals | |||||
Restructuring | |||||
Recorded expense | 0.6 | 5 | |||
Net cash payments | 0.2 | ||||
Non-cash charges | (0.8) | (5) | |||
Other | |||||
Restructuring | |||||
Recorded expense | 13.8 | 5.5 | |||
Net cash payments | (10.7) | (2.4) | |||
Restructuring liability | 6.2 | 6.2 | 3.1 | ||
Product and sold equipment | |||||
Other restructuring information | |||||
Business combination advisory and legal fees, pre tax | 0.5 | ||||
Business combination advisory and legal fees, after tax | 0.4 | ||||
Product and sold equipment | Cost of sales | |||||
Other restructuring information | |||||
Special (gains) and charges | 7.9 | (0.1) | 11.5 | (0.1) | |
Business combination advisory and legal fees, pre tax | 1.5 | ||||
Business combination advisory and legal fees, after tax | 1.1 | ||||
2018 Restructuring Plan | |||||
Other restructuring information | |||||
Restructuring charge expected to be incurred, pre-tax | 260 | 260 | |||
Restructuring charge expected to be incurred, after tax | 190 | 190 | |||
2018 Restructuring Plan | Special (gains) and charges | |||||
Restructuring | |||||
Restructuring liability | 90.6 | 90.6 | |||
Other restructuring information | |||||
Restructuring charges incurred to date, pre-tax | 182.6 | 182.6 | |||
Restructuring charges incurred to date, after-tax | 139.1 | 139.1 | |||
Restructuring charges incurred, pre-tax | 37.5 | 78 | |||
Restructuring charges incurred, after tax | 29.1 | 59.5 | |||
Prior Year Plans | |||||
Restructuring | |||||
Cash payments | (4.3) | ||||
Restructuring liability | $ 10.5 | 10.5 | $ 14.9 | ||
Other restructuring information | |||||
Restructuring charges incurred, pre-tax | 0.8 | 0.5 | |||
Restructuring charges incurred, after tax | $ 0.6 | $ 0.3 | |||
Cash payments | $ 4.3 |
ACQUISITIONS AND DISPOSITIONS -
ACQUISITIONS AND DISPOSITIONS - Acquisition Summary (Details) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Feb. 28, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2018USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Acquisitions and Dispositions | ||||||||
Total consideration transferred | $ 7.3 | $ 2.9 | $ 288.8 | $ 78.1 | ||||
Components of the aggregate purchase prices of the completed acquisitions | ||||||||
Net tangible assets (liabilities) acquired and equity method investments | 5.5 | 5.1 | (9.4) | 2.4 | ||||
Identifiable intangible assets | ||||||||
Customer relationships | 1.5 | 71.9 | 40.8 | |||||
Trademarks | 20.4 | 1.1 | ||||||
Other technology | 45.9 | 4 | ||||||
Total intangible assets | 1.5 | 138.2 | 45.9 | |||||
Goodwill | 0.3 | (2.2) | 180.5 | 30.4 | ||||
Total aggregate purchase price | 7.3 | 2.9 | 309.3 | 78.7 | ||||
Acquisition related liabilities and contingent consideration | (20.5) | (0.6) | ||||||
Total consideration transferred | 7.3 | 2.9 | $ 288.8 | $ 78.1 | ||||
Weighted average useful lives of identifiable intangible assets acquired | 12 years | 11 years | ||||||
Goodwill expected to be tax deductible | 0.7 | $ 0.7 | ||||||
Cost of sales | ||||||||
Acquisitions and Dispositions | ||||||||
Acquisition and integration activities | $ 1.3 | $ (0.5) | $ 1.5 | $ (0.5) | ||||
2019 Acquisitions | ||||||||
Acquisitions and Dispositions | ||||||||
Pre-acquisition annual sales | $ 63 | |||||||
Bioquell | ||||||||
Acquisitions and Dispositions | ||||||||
Portion of purchase price transferred to an escrow fund | € 140.5 | $ 179.3 | ||||||
Escrow released | $ 179.3 | |||||||
Lobster Ink | ||||||||
Acquisitions and Dispositions | ||||||||
Earn-out term | 3 years |
BALANCE SHEET INFORMATION (Deta
BALANCE SHEET INFORMATION (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts receivable, net | ||
Accounts receivable | $ 2,809.7 | $ 2,723.1 |
Allowance for doubtful accounts | (62.6) | (60.6) |
Total | 2,747.1 | 2,662.5 |
Inventories | ||
Finished goods | 1,060 | 1,016.9 |
Raw materials and parts | 568 | 525.6 |
Inventories at FIFO cost | 1,628 | 1,542.5 |
FIFO cost to LIFO cost difference | (2.7) | 3.9 |
Total | 1,625.3 | 1,546.4 |
Other current assets | ||
Prepaid assets | 153.9 | 132.1 |
Taxes receivable | 157.8 | 144.2 |
Derivative assets | 57.2 | 42.8 |
Other current assets | 26.5 | 35 |
Total | 395.4 | 354.1 |
Property, plant and equipment, net | ||
Land | 212.8 | 214.5 |
Buildings and leasehold improvements | 1,315.7 | 1,279.4 |
Machinery and equipment | 2,396.1 | 2,313.7 |
Merchandising and customer equipment | 2,668.8 | 2,565.5 |
Capitalized software | 714.4 | 666.2 |
Construction in progress | 390.7 | 400.2 |
Property, plant and equipment, gross | 7,698.5 | 7,439.5 |
Accumulated depreciation | (3,831.6) | (3,603.5) |
Total | 3,866.9 | 3,836 |
Intangible assets subject to amortization: | ||
Other intangible assets, gross | 4,877 | 4,747.2 |
Accumulated amortization | (2,330.8) | (2,179.5) |
Net intangible assets subject to amortization | 2,546.2 | 2,567.7 |
Total | 3,776.2 | 3,797.7 |
Other assets | ||
Deferred income taxes | 106.5 | 105.1 |
Pension | 43.6 | 39 |
Derivative asset | 33.3 | 11.8 |
Restricted cash | 179.3 | |
Other | 363.7 | 349.9 |
Total | 547.1 | 685.1 |
Other current liabilities | ||
Discounts and rebates | 326.3 | 291.3 |
Dividends payable | 132.3 | 132.4 |
Interest payable | 46.5 | 44.5 |
Taxes payable, other than income | 112.1 | 116.9 |
Derivative liabilities | 23.1 | 20.1 |
Restructuring | 96.3 | 73.7 |
Contract liability | 83.2 | 75.8 |
Operating lease liabilities | 151.3 | |
Other | 247.3 | 251.4 |
Total | 1,218.4 | 1,006.1 |
Accumulated other comprehensive loss | ||
Unrealized gain (loss) on derivative financial instruments, net of tax | (2.7) | 2 |
Unrecognized pension and postretirement benefit expense, net of tax | (574) | (518.9) |
Cumulative translation, net of tax | (1,259.7) | (1,244.8) |
Total | (1,836.4) | (1,761.7) |
Customer relationships | ||
Intangible assets subject to amortization: | ||
Other intangible assets, gross | 3,709.7 | 3,649.3 |
Accumulated amortization | (1,719.9) | (1,604) |
Trademarks | ||
Intangible assets subject to amortization: | ||
Other intangible assets, gross | 405.6 | 384.9 |
Accumulated amortization | (190) | (175.2) |
Patents | ||
Intangible assets subject to amortization: | ||
Other intangible assets, gross | 473.5 | 470.2 |
Accumulated amortization | (219) | (207.3) |
Other technology | ||
Intangible assets subject to amortization: | ||
Other intangible assets, gross | 288.2 | 242.8 |
Accumulated amortization | (201.9) | (193) |
Trade names | ||
Intangible assets not subject to amortization: | ||
Other intangible assets, gross | $ 1,230 | $ 1,230 |
DEBT AND INTEREST (Details)
DEBT AND INTEREST (Details) € in Millions, $ in Millions | Jun. 30, 2019EUR (€) | Jun. 30, 2019USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2018USD ($) |
Components of the company's debt obligations | ||||
Long-term debt, current maturities | $ 300.6 | $ 401.4 | ||
Short-term debt including current maturities of long-term debt | 1,069.4 | 743.6 | ||
Commercial paper. | ||||
Components of the company's debt obligations | ||||
Short-term debt | 746.3 | 165.4 | ||
Maximum borrowing capacity, commercial paper | 2,000 | |||
U.S. commercial paper program | ||||
Components of the company's debt obligations | ||||
Maximum borrowing capacity, commercial paper | 2,000 | |||
Outstanding commercial paper | 266 | 24 | ||
European commercial paper | ||||
Components of the company's debt obligations | ||||
Maximum borrowing capacity, commercial paper | 2,000 | |||
Outstanding commercial paper | € 430 | 480.3 | € 125 | 141.4 |
Notes payable | ||||
Components of the company's debt obligations | ||||
Short-term debt | 22.5 | 176.8 | ||
Credit facility | ||||
Components of the company's debt obligations | ||||
Maximum borrowing capacity under the credit agreement | 2,000 | |||
Amount outstanding under the credit agreement | $ 0 | $ 0 |
DEBT AND INTEREST - Other Debt
DEBT AND INTEREST - Other Debt Information (Details) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019EUR (€) | Jun. 30, 2019USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2018USD ($) | Jan. 31, 2016USD ($) | Jan. 31, 2015USD ($) | |
Debt instrument | ||||||||||
CARRYING VALUE | $ 6,287.7 | $ 6,703 | ||||||||
Long-term debt, current maturities | (300.6) | (401.4) | ||||||||
Long-term debt | 5,987.1 | 6,301.6 | ||||||||
Interest | ||||||||||
Interest expense | $ 54.9 | $ 60.2 | $ 111 | $ 121.2 | ||||||
Interest income | (5.4) | (3.9) | (12.1) | (8.5) | ||||||
Interest expense, net | $ 49.5 | $ 56.3 | $ 98.9 | $ 112.7 | ||||||
Public Notes | ||||||||||
Debt instrument | ||||||||||
Principal outstanding payable at time of prepayment of notes (as a percent) | 101.00% | |||||||||
Private Notes | ||||||||||
Debt instrument | ||||||||||
Principal outstanding payable at time of prepayment of notes (as a percent) | 100.00% | |||||||||
Ten year 2011 senior notes | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 1,017.9 | 1,017.6 | ||||||||
Aggregate principal amount | 1,020 | 1,020 | ||||||||
Debt instrument, term | 10 years | |||||||||
Thirty year 2011 senior notes | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 451.7 | 451.6 | ||||||||
Aggregate principal amount | 458 | 458 | ||||||||
Debt instrument, term | 30 years | |||||||||
Five year 2017 senior notes | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 497.3 | 496.9 | ||||||||
Aggregate principal amount | 500 | 500 | ||||||||
Debt instrument, term | 5 years | |||||||||
Ten year 2017 senior notes | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 495.1 | 494.8 | ||||||||
Aggregate principal amount | 500 | |||||||||
Debt instrument, term | 10 years | |||||||||
Thirty year 2017 senior notes | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 609.7 | 609 | ||||||||
Aggregate principal amount | 700 | |||||||||
Debt instrument, term | 30 years | |||||||||
Three year 2016 senior notes | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 399.7 | |||||||||
Aggregate principal amount | 400 | 400 | $ 400 | |||||||
Debt instrument, term | 3 years | |||||||||
Interest rate (as a percent) | 2.00% | |||||||||
Seven year 2016 senior Notes | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 398.3 | 398 | ||||||||
Aggregate principal amount | 400 | 400 | ||||||||
Debt instrument, term | 7 years | |||||||||
Seven year 2016 senior euro notes | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 636.7 | 644.1 | ||||||||
Aggregate principal amount | € | € 575 | € 575 | ||||||||
Debt instrument, term | 7 years | |||||||||
Ten year 2016 senior notes | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 744.1 | 743.8 | ||||||||
Aggregate principal amount | 750 | 750 | ||||||||
Debt instrument, term | 10 years | |||||||||
Thirty year 2016 senior notes | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 246.2 | 246.1 | ||||||||
Aggregate principal amount | 250 | 250 | ||||||||
Debt instrument, term | 30 years | |||||||||
Three year 2015 senior notes | ||||||||||
Debt instrument | ||||||||||
Aggregate principal amount | $ 300 | |||||||||
Interest rate (as a percent) | 1.55% | |||||||||
Five year 2015 senior notes | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 299.8 | 299.5 | ||||||||
Aggregate principal amount | 300 | 300 | ||||||||
Debt instrument, term | 5 years | |||||||||
Ten Year 2015 senior euro notes | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 638.6 | 646.3 | ||||||||
Aggregate principal amount | € | € 575 | € 575 | ||||||||
Debt instrument, term | 10 years | |||||||||
Series A private placement senior notes due 2018 | ||||||||||
Debt instrument | ||||||||||
Aggregate principal amount | $ 250 | |||||||||
Interest rate (as a percent) | 3.69% | |||||||||
Series B private placement senior notes due 2023 | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | 249.5 | 249.4 | ||||||||
Aggregate principal amount | 250 | 250 | ||||||||
Other | ||||||||||
Debt instrument | ||||||||||
CARRYING VALUE | $ 2.8 | $ 6.2 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)item | Jun. 30, 2018USD ($) | |
Changes in the carrying amount of goodwill | ||||
Beginning goodwill | $ 7,078 | |||
Current year business combinations | 180.7 | |||
Prior year business combinations | (0.2) | |||
Effect of foreign currency translation | (24.4) | |||
Ending goodwill | $ 7,234.1 | 7,234.1 | ||
Goodwill expected to be tax deductible | 0.7 | $ 0.7 | ||
Number of reporting units | item | 11 | |||
Impairment of goodwill | $ 0 | $ 0 | ||
Future estimated amortization expense related to amortizable other identifiable intangible assets | ||||
Estimated expense remaining for the year | 161 | 161 | ||
Total amortization expense related to other intangible assets | 80.7 | $ 80.1 | 160.5 | $ 160.3 |
Nalco | Trademarks | ||||
Changes in the carrying amount of goodwill | ||||
Carrying value of asset subject to impairment testing | 1,200 | 1,200 | ||
Impairment of indefinite life intangible asset | 0 | |||
Global Industrial | ||||
Changes in the carrying amount of goodwill | ||||
Beginning goodwill | 2,730.8 | |||
Current year business combinations | 93.2 | |||
Prior year business combinations | (0.2) | |||
Effect of foreign currency translation | (9.5) | |||
Ending goodwill | 2,814.3 | 2,814.3 | ||
Global Institutional | ||||
Changes in the carrying amount of goodwill | ||||
Beginning goodwill | 1,015.3 | |||
Current year business combinations | 86.8 | |||
Effect of foreign currency translation | (3.7) | |||
Ending goodwill | 1,098.4 | 1,098.4 | ||
Global Energy | ||||
Changes in the carrying amount of goodwill | ||||
Beginning goodwill | 3,126.6 | |||
Effect of foreign currency translation | (10.5) | |||
Ending goodwill | 3,116.1 | 3,116.1 | ||
Other | ||||
Changes in the carrying amount of goodwill | ||||
Beginning goodwill | 205.3 | |||
Current year business combinations | 0.7 | |||
Effect of foreign currency translation | (0.7) | |||
Ending goodwill | $ 205.3 | $ 205.3 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Recurring - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Carrying Amount | ||
Assets: | ||
Foreign currency forward contracts | $ 101.1 | $ 72.3 |
Liabilities: | ||
Foreign currency forward contracts | 37.6 | 41.1 |
Interest rate swap contracts | 0.2 | |
Level 2 | ||
Assets: | ||
Foreign currency forward contracts | 101.1 | 72.3 |
Liabilities: | ||
Foreign currency forward contracts | $ 37.6 | 41.1 |
Interest rate swap contracts | $ 0.2 |
FAIR VALUE MEASUREMENTS - Long-
FAIR VALUE MEASUREMENTS - Long-term Debt (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Carrying Amount | ||
Carrying amount and fair value of financial instruments | ||
Long-term debt (including current maturities) | $ 6,287.7 | $ 6,703 |
Fair Value | Level 2 | ||
Carrying amount and fair value of financial instruments | ||
Long-term debt (including current maturities) | $ 6,851.2 | $ 6,844.7 |
DERIVATIVES AND HEDGING TRANS_3
DERIVATIVES AND HEDGING TRANSACTIONS - Derivative Positions Summary (Details) - USD ($) $ in Millions | Jun. 30, 2019 | Dec. 31, 2018 |
Asset Derivatives | ||
Gross value of derivatives | $ 101.1 | $ 72.3 |
Gross amounts offset in the Consolidated Balance Sheet | (10.6) | (17.7) |
Net value of derivatives presented in the Consolidated Balance Sheet | 90.5 | 54.6 |
Liability Derivatives | ||
Gross value of derivatives | 37.6 | 41.3 |
Gross amounts offset in the Consolidated Balance Sheet | (10.6) | (17.7) |
Net value of derivatives presented in the Consolidated Balance Sheet | 27 | 23.6 |
Cash collateral received | 0 | |
Cash collateral pledged | 0 | |
Foreign currency forward contracts. | ||
Liability Derivatives | ||
Notional values | 5,707 | 6,226 |
Interest rate swaps | ||
Liability Derivatives | ||
Notional values | 400 | |
Derivatives designated as hedging instruments | Foreign currency forward contracts. | ||
Asset Derivatives | ||
Gross value of derivatives | 61.8 | 40.4 |
Liability Derivatives | ||
Gross value of derivatives | 2.4 | 10.2 |
Derivatives designated as hedging instruments | Interest rate swaps | ||
Liability Derivatives | ||
Gross value of derivatives | 0.2 | |
Derivatives not designated as hedging instruments | Foreign currency forward contracts. | ||
Asset Derivatives | ||
Gross value of derivatives | 39.3 | 31.9 |
Liability Derivatives | ||
Gross value of derivatives | $ 35.2 | $ 30.9 |
DERIVATIVES AND HEDGING TRANS_4
DERIVATIVES AND HEDGING TRANSACTIONS - Information by Type of Derivative and Hedging Activities (Details) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2019EUR (€) | Jun. 30, 2019USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2018USD ($) | Jan. 31, 2016USD ($) | Jan. 31, 2015USD ($) | |
Fair Value Hedges | ||||||||||
Long-term debt | $ 5,987.1 | $ 6,301.6 | ||||||||
Net Investment Hedges | ||||||||||
Revaluation gain (loss), net of tax | $ 22.7 | $ 49 | $ 16.1 | $ 22.8 | ||||||
Derivative Summary | ||||||||||
Maximum period for hedged transactions | 3 years | |||||||||
Cash collateral received | 0 | |||||||||
Senior notes | ||||||||||
Fair Value Hedges | ||||||||||
Long-term debt | 645.5 | 645.5 | ||||||||
Cumulative amount of fair value hedging adjustment | 3.7 | 3.7 | ||||||||
Three year 2016 senior notes | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Aggregate principal amount | 400 | 400 | $ 400 | |||||||
Interest rate (as a percent) | 2.00% | |||||||||
Three year 2015 senior notes | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Aggregate principal amount | $ 300 | |||||||||
Interest rate (as a percent) | 1.55% | |||||||||
Series A private placement senior notes due 2018 | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Aggregate principal amount | $ 250 | |||||||||
Interest rate (as a percent) | 3.69% | |||||||||
Ten year 2011 senior notes | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Aggregate principal amount | 1,020 | 1,020 | ||||||||
European commercial paper | ||||||||||
Net Investment Hedges | ||||||||||
Notional values | € 300 | 335 | ||||||||
Ten Year 2015 senior euro notes | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Aggregate principal amount | € | 575 | € 575 | ||||||||
Cost of sales | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Gain (loss) on derivative recognized in income | 4.7 | (4.8) | $ 9.1 | (6.7) | ||||||
Selling, general and administrative expenses | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Gain (loss) on derivative recognized in income | 34.5 | 90.8 | 33.5 | 24.8 | ||||||
Interest expense, net | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Gain (loss) on derivative recognized in income | 7 | 9 | 13.8 | 17.1 | ||||||
Foreign currency forward contracts. | ||||||||||
Net Investment Hedges | ||||||||||
Notional values | 5,707 | 6,226 | ||||||||
Foreign currency forward contracts. | Derivatives not designated as hedging instruments | Selling, general and administrative expenses | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Gain (loss) on derivative recognized in income | 7.9 | 16.3 | 14 | (2.1) | ||||||
Foreign currency forward contracts. | Derivatives not designated as hedging instruments | Interest expense, net | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Gain (loss) on derivative recognized in income | 2.1 | 3.7 | ||||||||
Interest rate swaps | ||||||||||
Net Investment Hedges | ||||||||||
Notional values | $ 400 | |||||||||
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives designated as hedging instruments | Cost of sales | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Gain (loss) reclassified from AOCI into income (effective portion) | 4.7 | (4.8) | 9.1 | (6.7) | ||||||
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives designated as hedging instruments | Selling, general and administrative expenses | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Gain (loss) reclassified from AOCI into income (effective portion) | 26.6 | 74.5 | 19.5 | 26.9 | ||||||
Cash Flow Hedges | Foreign currency forward contracts. | Derivatives designated as hedging instruments | Interest expense, net | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Amount excluded from the assessment of effectiveness recognized in earnings based on changes in fair value | 7.3 | 8.5 | 14.3 | 16.8 | ||||||
Derivative Summary | ||||||||||
Gain (loss) recognized in income (ineffective portion) | 7.3 | 8.5 | 14.3 | 16.8 | ||||||
Cash Flow Hedges | Interest rate swaps | Derivatives designated as hedging instruments | Interest expense, net | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Gain (loss) reclassified from AOCI into income (effective portion) | (0.3) | (1.6) | (0.5) | (3.4) | ||||||
Fair Value Hedges | Interest rate swaps | Three year 2016 senior notes | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Aggregate principal amount | $ 400 | |||||||||
Interest rate (as a percent) | 2.00% | |||||||||
Fair Value Hedges | Interest rate swaps | Three year 2015 senior notes | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Aggregate principal amount | $ 300 | |||||||||
Interest rate (as a percent) | 1.55% | |||||||||
Fair Value Hedges | Interest rate swaps | Series A private placement senior notes due 2018 | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Aggregate principal amount | $ 250 | |||||||||
Interest rate (as a percent) | 3.69% | |||||||||
Fair Value Hedges | Interest rate swaps | Interest expense, net | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Gain (loss) on hedged item recognized in income | (1.4) | 0.2 | (0.3) | |||||||
Fair Value Hedges | Interest rate swaps | Derivatives designated as hedging instruments | Interest expense, net | ||||||||||
Impact on AOCI and earnings from derivative contracts | ||||||||||
Gain (loss) on derivative recognized in income | 1.4 | (0.2) | 0.3 | |||||||
Net Investment Hedges | ||||||||||
Net Investment Hedges | ||||||||||
Revaluation gain (loss), net of tax | $ 22.7 | $ 49 | $ 16.1 | $ 22.8 | ||||||
Net Investment Hedges | Senior euro notes | ||||||||||
Net Investment Hedges | ||||||||||
Notional values | € 1,150 | $ 1,275 |
OTHER COMPREHENSIVE INCOME (L_3
OTHER COMPREHENSIVE INCOME (LOSS) INFORMATION (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Reclassification adjustments | ||||
Cost of sales | $ (2,208.2) | $ (2,146.1) | $ (4,297.8) | $ (4,218.4) |
SG&A | (1,002.7) | (1,036.8) | (2,011) | (2,055.1) |
Interest expense, net | (49.5) | (56.3) | (98.9) | (112.7) |
Subtotal | (100.6) | (35.9) | (11.7) | 51.7 |
Derivative gains reclassified from AOCI into income, net of tax | (29) | (59.8) | (32) | (26.3) |
Pension and postretirement net actuarial losses and prior service cost reclassified from AOCI into income, net of tax | 7.4 | 5.8 | 3.4 | 11.5 |
Derivative & Hedging Instruments. | ||||
Reclassification adjustments | ||||
Amount recognized in AOCI | 43 | 97.6 | 40.1 | 52.7 |
Other activity | (0.1) | 0.2 | (0.1) | (0.1) |
Tax impact | (1) | (3.8) | 0.4 | (3.7) |
Subtotal | 3.6 | 17.4 | (2) | 15.3 |
Derivative & Hedging Instruments. | Amount reclassified from AOCI | ||||
Reclassification adjustments | ||||
Cost of sales | (4.7) | 4.8 | (9.1) | 6.7 |
SG&A | (26.6) | (74.5) | (19.5) | (26.9) |
Interest expense, net | (7) | (6.9) | (13.8) | (13.4) |
(Gains) losses reclassified from AOCI into income | (38.3) | (76.6) | (42.4) | (33.6) |
Pension & Postretirement Benefits. | ||||
Reclassification adjustments | ||||
(Gains) losses reclassified from AOCI into income | 0.2 | 26.6 | 0.2 | 34.3 |
Other activity | 7.3 | 10.1 | 3.3 | 4.6 |
Tax impact | (0.1) | (6.3) | (0.1) | (8.2) |
Subtotal | 7.4 | 30.4 | 3.4 | 30.7 |
Pension & Postretirement Benefits. | Amount reclassified from AOCI | ||||
Reclassification adjustments | ||||
(Gains) losses reclassified from AOCI into income | $ 0.2 | 7.7 | $ 0.2 | 15.4 |
Postretirement benefits changes | ||||
Reclassification adjustments | ||||
Amount recognized in AOCI | $ 18.9 | $ 18.9 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - Common Stock - shares | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | Feb. 28, 2015 | |
Shareholder's Equity | |||
Common stock, shares authorized to be repurchased | 20,000,000 | ||
Remaining shares authorized to be repurchased | 6,820,810 | ||
Reacquired shares | 1,953,485 | 3,908,041 | |
Number of shares reacquired through the open market or private purchases | 1,830,584 | 3,706,716 | |
Number of shares that have been repurchased through the exercise of stock options and vesting of stock awards | 122,901 | 201,325 |
EARNINGS ATTRIBUTABLE TO ECOL_3
EARNINGS ATTRIBUTABLE TO ECOLAB PER COMMON SHARE ("EPS") (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Computations of the basic and diluted earnings attributable to Ecolab per share amounts | ||||
Net income attributable to Ecolab | $ 368.6 | $ 351.3 | $ 665.1 | $ 598.6 |
Weighted-average common shares outstanding | ||||
Basic (in shares) | 287.6 | 288.8 | 287.9 | 288.7 |
Effect of dilutive stock options and units (in shares) | 4.4 | 4.5 | 4.3 | 4.3 |
Diluted (in shares) | 292.1 | 293.3 | 292.2 | 293 |
Earnings attributable to Ecolab per common share | ||||
Basic (in dollars per share) | $ 1.28 | $ 1.22 | $ 2.31 | $ 2.07 |
Diluted (in dollars per share) | $ 1.26 | $ 1.20 | $ 2.28 | $ 2.04 |
Anti-dilutive securities excluded from the computation of EPS | 0.3 | 1.6 | 1.5 | 1.6 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
INCOME TAXES | ||||
Effective income tax rate (as a percent) | 20.80% | 22.80% | 16.90% | 22.40% |
One-time transition tax due to issuance of technical guidance | $ 6.2 | $ 18.2 | $ 1.1 | $ 29.5 |
Tax expense, issuance of technical guidance on calculation of foreign tax credits | 10.2 | 10.2 | ||
Excess tax benefits, share-based compensation | 13.1 | 6 | 31.8 | 12.8 |
Recognized discrete tax expense (benefit) | $ (1) | $ (12.1) | $ 26.7 | $ (12) |
RENTALS AND LEASES - Lessee (De
RENTALS AND LEASES - Lessee (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Option to extend - Operating | true | |
Option to terminate - Operating | true | |
Operating lease cost | $ 55.8 | $ 110.2 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term - Operating | 1 month | 1 month |
RENTALS AND LEASES - Future Mat
RENTALS AND LEASES - Future Maturity and Minimum Payments (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Operating leases maturities: | ||
Remainder of 2019 | $ 86 | |
2020 | 160 | |
2021 | 124 | |
2022 | 85 | |
2023 | 46 | |
2024 | 28 | |
Thereafter | 100 | |
Total lease payments | 629 | |
Less: imputed interest | 79 | |
Present value of lease liabilities | $ 550 | |
Future minimum payments under operating leases with noncancelable terms in excess of one year were: | ||
2019 | $ 172 | |
2020 | 141 | |
2021 | 108 | |
2022 | 72 | |
2023 | 37 | |
Thereafter | 104 | |
Total | $ 634 | |
Weighted-average remaining lease term - operating leases | 5 years 7 months 6 days | |
Weighted-average discount rate - operating leases | 4.01% | |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 99.5 | |
Leased assets obtained in exchange for new operating lease liabilities | $ 65.2 |
RENTALS AND LEASES - Lessor (De
RENTALS AND LEASES - Lessor (Details) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019USD ($) | Jun. 30, 2019USD ($) | |
Operating Leases, Income Statement, Lease Revenue | ||
Operating lease revenue | $ 104.6 | $ 207.5 |
Operating Leases, Future Minimum Payments Receivable | ||
Remainder of 2019 | 177 | 177 |
2020 | 314 | 314 |
2021 | 239 | 239 |
2022 | 169 | 169 |
2023 | 92 | 92 |
2024 | 32 | 32 |
Thereafter | 11 | 11 |
Total lease revenue | 1,034 | 1,034 |
Property, Plant and Equipment | Property Subject to Operating Lease | ||
Property Subject to or Available for Operating Lease | ||
Property, plant and equipment, net | 1,064 | 1,064 |
Property, plant and equipment, Accumulated Depreciation | $ 602.3 | $ 602.3 |
Property, Plant and Equipment | Property Subject to Operating Lease | Minimum | ||
Property Subject to or Available for Operating Lease | ||
Estimated useful life | 1 year | |
Property, Plant and Equipment | Property Subject to Operating Lease | Maximum | ||
Property Subject to or Available for Operating Lease | ||
Estimated useful life | 5 years |
PENSION AND POSTRETIREMENT PL_3
PENSION AND POSTRETIREMENT PLANS (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Pension | U.S. | ||||
Net periodic benefit costs | ||||
Service cost | $ 18.2 | $ 18.6 | $ 36.4 | $ 37.2 |
Interest cost on benefit obligation | 22.3 | 20.8 | 44.5 | 41.6 |
Expected return on plan assets | (37.4) | (40.5) | (74.8) | (81) |
Recognition of net actuarial (gain) loss | 5.9 | 9.8 | 11.8 | 19.6 |
Amortization of prior service cost (benefit) | (2.9) | (1.7) | (5.7) | (3.4) |
Total expense (benefit) | 6.1 | 7 | 12.2 | 14 |
Pension | International | ||||
Net periodic benefit costs | ||||
Service cost | 7.5 | 8.5 | 15.2 | 17 |
Interest cost on benefit obligation | 7.9 | 7.4 | 15.8 | 14.9 |
Expected return on plan assets | (15.2) | (16.4) | (30.4) | (32.7) |
Recognition of net actuarial (gain) loss | 4.2 | 4.4 | 8.2 | 8.8 |
Amortization of prior service cost (benefit) | (0.2) | (0.2) | (0.5) | (0.4) |
Total expense (benefit) | 4.2 | 3.7 | 8.3 | 7.6 |
Other Pension Plan Information | ||||
Contributions to plan | 23 | |||
Contributions anticipated to be made during the remainder of 2019 | 19 | 19 | ||
Pension | Qualified plan | U.S. | ||||
Other Pension Plan Information | ||||
Contributions anticipated to be made during the remainder of 2019 | 120 | 120 | ||
Pension | Non-qualified plan | U.S. | ||||
Other Pension Plan Information | ||||
Contributions to plan | 2 | |||
Contributions anticipated to be made during the remainder of 2019 | 4 | 4 | ||
Postretirement Health Care | U.S. | ||||
Net periodic benefit costs | ||||
Service cost | 0.3 | 0.9 | 0.7 | 1.8 |
Interest cost on benefit obligation | 1.4 | 1.5 | 2.8 | 3 |
Expected return on plan assets | (0.1) | (0.1) | (0.2) | (0.2) |
Recognition of net actuarial (gain) loss | (1) | (0.5) | (2) | (1) |
Amortization of prior service cost (benefit) | (5.8) | (4.1) | (11.6) | (8.2) |
Total expense (benefit) | (5.2) | $ (2.3) | (10.3) | $ (4.6) |
Other Pension Plan Information | ||||
Contributions to plan | 6 | |||
Contributions anticipated to be made during the remainder of 2019 | $ 5 | $ 5 |
REVENUES (Details)
REVENUES (Details) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019EUR (€) | Jun. 30, 2019USD ($) | Jun. 30, 2018EUR (€) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Disaggregation of revenue | |||||||
Net sales | $ 3,759.4 | $ 3,689.6 | $ 7,264.8 | $ 7,160.5 | $ 14,668.2 | ||
Global Industrial | |||||||
Disaggregation of revenue | |||||||
Net sales | € 1,380.8 | € 1,327.3 | 2,662.1 | 2,553.2 | |||
Global Institutional | |||||||
Disaggregation of revenue | |||||||
Net sales | 1,311.8 | 1,296.6 | 2,520.3 | 2,502.9 | |||
Global Energy | |||||||
Disaggregation of revenue | |||||||
Net sales | 837.4 | 845.2 | 1,646.8 | 1,688.1 | |||
Other | |||||||
Disaggregation of revenue | |||||||
Net sales | 229.4 | 220.5 | 435.6 | 416.3 | |||
Product and sold equipment | |||||||
Disaggregation of revenue | |||||||
Net sales | 3,092.1 | 3,060.5 | 5,978.4 | 5,920.1 | |||
Product and sold equipment | Global Industrial | |||||||
Disaggregation of revenue | |||||||
Net sales | 1,211.1 | 1,162.7 | 2,336.7 | 2,232.5 | |||
Product and sold equipment | Global Institutional | |||||||
Disaggregation of revenue | |||||||
Net sales | 1,125.4 | 1,128.4 | 2,156 | 2,167 | |||
Product and sold equipment | Global Energy | |||||||
Disaggregation of revenue | |||||||
Net sales | 733.9 | 748.6 | 1,443.3 | 1,481.2 | |||
Product and sold equipment | Other | |||||||
Disaggregation of revenue | |||||||
Net sales | 21.7 | 20.8 | 42.4 | 39.4 | |||
Service and lease equipment | |||||||
Disaggregation of revenue | |||||||
Net sales | 667.3 | 629.1 | 1,286.4 | 1,240.4 | |||
Service and lease equipment | Global Industrial | |||||||
Disaggregation of revenue | |||||||
Net sales | 169.7 | 164.6 | 325.4 | 320.7 | |||
Service and lease equipment | Global Institutional | |||||||
Disaggregation of revenue | |||||||
Net sales | 186.4 | 168.2 | 364.3 | 335.9 | |||
Service and lease equipment | Global Energy | |||||||
Disaggregation of revenue | |||||||
Net sales | 103.5 | 96.6 | 203.5 | 206.9 | |||
Service and lease equipment | Other | |||||||
Disaggregation of revenue | |||||||
Net sales | $ 207.7 | $ 199.7 | 393.2 | 376.9 | |||
North America | Global Industrial | |||||||
Disaggregation of revenue | |||||||
Net sales | 631 | 596 | 1,228.7 | 1,152.7 | |||
North America | Global Institutional | |||||||
Disaggregation of revenue | |||||||
Net sales | 907.6 | 877.3 | 1,740.4 | 1,694.3 | |||
North America | Global Energy | |||||||
Disaggregation of revenue | |||||||
Net sales | 479.9 | 487.6 | 949.6 | 972.7 | |||
North America | Other | |||||||
Disaggregation of revenue | |||||||
Net sales | 157.6 | 149.4 | $ 295.9 | $ 279.4 | |||
U.S. | |||||||
Disaggregation of revenue | |||||||
Percentage of consolidated sales | 54.00% | 53.00% | |||||
Europe | Global Industrial | |||||||
Disaggregation of revenue | |||||||
Net sales | 345.6 | 336.3 | $ 654.6 | $ 633.5 | |||
Europe | Global Institutional | |||||||
Disaggregation of revenue | |||||||
Net sales | 256 | 270.1 | 487.9 | 514.7 | |||
Europe | Global Energy | |||||||
Disaggregation of revenue | |||||||
Net sales | 106.7 | 104 | 207 | 205.8 | |||
Europe | Other | |||||||
Disaggregation of revenue | |||||||
Net sales | 34 | 33.5 | 64.4 | 63.8 | |||
Asia Pacific | Global Industrial | |||||||
Disaggregation of revenue | |||||||
Net sales | 176.8 | 171.4 | 341.2 | 332.3 | |||
Asia Pacific | Global Institutional | |||||||
Disaggregation of revenue | |||||||
Net sales | 62.8 | 64.2 | 122.5 | 124.5 | |||
Asia Pacific | Global Energy | |||||||
Disaggregation of revenue | |||||||
Net sales | 60.9 | 67 | 118.5 | 134.4 | |||
Asia Pacific | Other | |||||||
Disaggregation of revenue | |||||||
Net sales | 9.5 | 10 | 19.3 | 18.9 | |||
Latin America | Global Industrial | |||||||
Disaggregation of revenue | |||||||
Net sales | 124 | 119.9 | 241 | 229.2 | |||
Latin America | Global Institutional | |||||||
Disaggregation of revenue | |||||||
Net sales | 41.3 | 42.4 | 81.9 | 83.6 | |||
Latin America | Global Energy | |||||||
Disaggregation of revenue | |||||||
Net sales | 51.8 | 53.6 | 101.4 | 108.2 | |||
Latin America | Other | |||||||
Disaggregation of revenue | |||||||
Net sales | 11.5 | 12 | 23.3 | 23.7 | |||
Greater China | Global Industrial | |||||||
Disaggregation of revenue | |||||||
Net sales | 66.2 | 69.8 | 129.1 | 140.9 | |||
Greater China | Global Institutional | |||||||
Disaggregation of revenue | |||||||
Net sales | 28.2 | 27.3 | 59.7 | 56.6 | |||
Greater China | Global Energy | |||||||
Disaggregation of revenue | |||||||
Net sales | 21.4 | 18.1 | 41.9 | 36.4 | |||
Greater China | Other | |||||||
Disaggregation of revenue | |||||||
Net sales | 14 | 12.8 | 27.2 | 24.8 | |||
Middle East and Africa ("MEA") | Global Industrial | |||||||
Disaggregation of revenue | |||||||
Net sales | 37.2 | 33.9 | 67.5 | 64.6 | |||
Middle East and Africa ("MEA") | Global Institutional | |||||||
Disaggregation of revenue | |||||||
Net sales | 15.9 | 15.3 | 27.9 | 29.2 | |||
Middle East and Africa ("MEA") | Global Energy | |||||||
Disaggregation of revenue | |||||||
Net sales | 116.7 | 114.9 | 228.4 | 230.6 | |||
Middle East and Africa ("MEA") | Other | |||||||
Disaggregation of revenue | |||||||
Net sales | € 2.8 | € 2.8 | $ 5.5 | $ 5.7 |
REVENUES - Contract Liability (
REVENUES - Contract Liability (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Change in contract liability | ||
Contract liability as of beginning of period | $ 75.8 | $ 79 |
Revenue recognized: Amounts included in the contract liability at the beginning of the period | (75.8) | (79) |
Increases due to invoices issued, excluding amounts recognized as revenues during the period | 80.2 | 87.1 |
Business combination | 3 | 0.2 |
Contract liability as of end of period | $ 83.2 | $ 87.3 |
OPERATING SEGMENTS (Details)
OPERATING SEGMENTS (Details) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2019EUR (€) | Jun. 30, 2019USD ($) | Jun. 30, 2018EUR (€) | Jun. 30, 2018USD ($) | Jun. 30, 2019USD ($)item | Jun. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Financial information of reportable segments | |||||||
Number of reportable segments | item | 3 | ||||||
Net sales | $ 3,759.4 | $ 3,689.6 | $ 7,264.8 | $ 7,160.5 | $ 14,668.2 | ||
Operating Income (Loss) | 498.6 | 494.6 | 865.8 | 848.9 | 1,947 | ||
Previously Reported | |||||||
Financial information of reportable segments | |||||||
Net sales | 14,668.2 | ||||||
Operating Income (Loss) | 1,947 | ||||||
Global Industrial | |||||||
Financial information of reportable segments | |||||||
Net sales | € 1,380.8 | € 1,327.3 | 2,662.1 | 2,553.2 | |||
Global Institutional | |||||||
Financial information of reportable segments | |||||||
Net sales | 1,311.8 | 1,296.6 | 2,520.3 | 2,502.9 | |||
Global Energy | |||||||
Financial information of reportable segments | |||||||
Net sales | 837.4 | 845.2 | 1,646.8 | 1,688.1 | |||
Other | |||||||
Financial information of reportable segments | |||||||
Net sales | € 229.4 | € 220.5 | 435.6 | 416.3 | |||
Operating segment | |||||||
Financial information of reportable segments | |||||||
Net sales | 3,788.3 | 3,615.5 | 7,311.3 | 7,011.6 | 14,530.7 | ||
Operating Income (Loss) | 503 | 481.2 | 871.3 | 826.3 | 1,926.6 | ||
Operating segment | Previously Reported | |||||||
Financial information of reportable segments | |||||||
Net sales | 15,046.3 | ||||||
Operating Income (Loss) | 2,007.7 | ||||||
Operating segment | Adjustment | Fixed Currency Rate Change | |||||||
Financial information of reportable segments | |||||||
Net sales | (515.6) | ||||||
Operating Income (Loss) | (81.1) | ||||||
Operating segment | Global Industrial | |||||||
Financial information of reportable segments | |||||||
Net sales | 1,393.9 | 1,290.2 | 2,683.1 | 2,480.4 | 5,220.2 | ||
Operating Income (Loss) | 208.7 | 162.8 | 356.2 | 284.8 | 724.4 | ||
Operating segment | Global Industrial | Previously Reported | |||||||
Financial information of reportable segments | |||||||
Net sales | 5,462.4 | ||||||
Operating Income (Loss) | 768.1 | ||||||
Operating segment | Global Industrial | Adjustment | Segment Change | |||||||
Financial information of reportable segments | |||||||
Operating Income (Loss) | (1.4) | ||||||
Operating segment | Global Industrial | Adjustment | Fixed Currency Rate Change | |||||||
Financial information of reportable segments | |||||||
Net sales | (242.2) | ||||||
Operating Income (Loss) | (42.3) | ||||||
Operating segment | Global Institutional | |||||||
Financial information of reportable segments | |||||||
Net sales | 1,323.5 | 1,277.5 | 2,538.8 | 2,464.5 | 5,066 | ||
Operating Income (Loss) | 258.9 | 247 | 454.8 | 442.7 | 1,007.3 | ||
Operating segment | Global Institutional | Previously Reported | |||||||
Financial information of reportable segments | |||||||
Net sales | 5,204.5 | ||||||
Operating Income (Loss) | 1,026.9 | ||||||
Operating segment | Global Institutional | Adjustment | Fixed Currency Rate Change | |||||||
Financial information of reportable segments | |||||||
Net sales | (138.5) | ||||||
Operating Income (Loss) | (19.6) | ||||||
Operating segment | Global Energy | |||||||
Financial information of reportable segments | |||||||
Net sales | 840.4 | 831 | 1,652.1 | 1,657.5 | 3,388.8 | ||
Operating Income (Loss) | 88.9 | 86.4 | 167.3 | 155 | 338.5 | ||
Operating segment | Global Energy | Previously Reported | |||||||
Financial information of reportable segments | |||||||
Net sales | 3,501.8 | ||||||
Operating Income (Loss) | 358.5 | ||||||
Operating segment | Global Energy | Adjustment | Segment Change | |||||||
Financial information of reportable segments | |||||||
Operating Income (Loss) | (0.4) | ||||||
Operating segment | Global Energy | Adjustment | Fixed Currency Rate Change | |||||||
Financial information of reportable segments | |||||||
Net sales | (113) | ||||||
Operating Income (Loss) | (19.6) | ||||||
Operating segment | Other | |||||||
Financial information of reportable segments | |||||||
Net sales | 230.5 | 216.8 | 437.3 | 409.2 | 855.7 | ||
Operating Income (Loss) | 44.1 | 39 | 74.3 | 66 | 160 | ||
Operating segment | Other | Previously Reported | |||||||
Financial information of reportable segments | |||||||
Net sales | 877.6 | ||||||
Operating Income (Loss) | 161.3 | ||||||
Operating segment | Other | Adjustment | Segment Change | |||||||
Financial information of reportable segments | |||||||
Operating Income (Loss) | 1.8 | ||||||
Operating segment | Other | Adjustment | Fixed Currency Rate Change | |||||||
Financial information of reportable segments | |||||||
Net sales | (21.9) | ||||||
Operating Income (Loss) | (3.1) | ||||||
Currency Impact | |||||||
Financial information of reportable segments | |||||||
Net sales | (28.9) | 74.1 | (46.5) | 148.9 | 137.5 | ||
Operating Income (Loss) | (4.4) | 13.4 | (5.5) | 22.6 | 20.4 | ||
Currency Impact | Previously Reported | |||||||
Financial information of reportable segments | |||||||
Net sales | (378.1) | ||||||
Operating Income (Loss) | (60.7) | ||||||
Currency Impact | Adjustment | Fixed Currency Rate Change | |||||||
Financial information of reportable segments | |||||||
Net sales | 515.6 | ||||||
Operating Income (Loss) | 81.1 | ||||||
Corporate | |||||||
Financial information of reportable segments | |||||||
Operating Income (Loss) | $ (97.6) | $ (54) | $ (181.3) | $ (122.2) | (303.6) | ||
Corporate | Previously Reported | |||||||
Financial information of reportable segments | |||||||
Operating Income (Loss) | (307.1) | ||||||
Corporate | Adjustment | Fixed Currency Rate Change | |||||||
Financial information of reportable segments | |||||||
Operating Income (Loss) | $ 3.5 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 1 Months Ended | 6 Months Ended | |
Apr. 30, 2017complaint | May 31, 2016complaint | Jun. 30, 2019complaintitemlocation | |
Loss contingencies | |||
Period to appeal court's decision after entry of final judgment under Federal Rule of Appellate Procedure | 30 days | ||
Environmental matters | |||
Number of locations for environmental assessments and remediation | location | 40 | ||
Deepwater Horizon Incident | |||
Loss contingencies | |||
Number of putative class action complaints filed | 6 | ||
Number of complaints filed by individuals | 21 | ||
Deepwater Horizon Incident | Nalco | |||
Loss contingencies | |||
Number of complaints filed by individuals | 9 | ||
Number of complaints filed by individuals claiming economic loss | 2 | ||
Number of master complaints naming Nalco and others who responded to the oil spill (known as the "B3 Bundle") | 1 | ||
Number of proposed class action settlements | item | 2 | ||
Number of cases pending that are expected to be dismissed | item | 3 |
NEW ACCOUNTING PRONOUNCEMENTS_2
NEW ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 |
New accounting guidance, cumulative effect | $ (2.8) | $ (43.6) | |
Operating lease assets | $ 549.8 | ||
Accounting Standards Update 2018-02 | |||
New accounting guidance, cumulative effect | $ 61.2 | ||
Accounting Standards Update Codification Topic 842 Leases | |||
New accounting guidance, cumulative effect | (2.8) | ||
Operating lease assets | 572.2 | ||
Operating lease liabilities | $ 575 |