Exhibit 99.1 USFilter Announces Record Fiscal Second Quarter Earnings November 3, 1998 6:00 AM EST PALM DESERT, Calif., Nov. 3 -- United States Filter Corporation (NYSE: USF) today reported record revenues for its fiscal second quarter ended September 30, 1998 of $1,225,882,000, an increase of 30.6% over the year ago quarterly revenues of $938,358,000. Net income for the quarter, also a record, was up 79.4% to $60,211,000 from $33,563,000 last year. Diluted earnings per share was $0.36 for the quarter, a 44.0% increase over $0.25 for last year's second quarter. Diluted weighted average number of shares outstanding was 178,042,000. Total backlog was $987,273,000, up 10.4% from $894,485,000 for the same period last year. The Company also said that consolidated gross margin for the quarter was 29.7% vs. 25.6% last year and operating margins improved to 9.8% from 6.8% for the same period last year. All prior year financial information has been restated to reflect the acquisitions of The Kinetics Group, Inc. and Culligan Water Technologies, Inc., which were accounted for as poolings of interests. Revenues for the first half of the fiscal year were $2,345,213,000 vs. $1,731,294,000 last year with diluted loss per share of $0.59 (including one time merger, restructuring, acquisition and other related charges associated with the Culligan merger) vs. income per share of $0.56 for the prior year. The Company released the following summary of results of the operations of its five operating groups: * Water and Wastewater Group revenues were $497,423,000 for the three months ended September 30, 1998 as compared to $381,893,000 in the prior year. Gross profit margins and operating margins were 31.6% and 10.8%, respectively, compared to 29.0% and 7.3% in the prior year. Water and Wastewater Group backlog was $735,513,000 at September 30, 1998. Internal growth for the period was approximately 8%. * Waterworks Distribution Group revenues were $278,794,000 for the three months ended September 30, 1998 as compared to $255,731,000 in the prior year. Gross profit margins and operating margins were 19.7% and 6.4%, respectively, compared to 19.9% and 6.2% in the prior year. Internal growth for the period totaled approximately 5%. The Waterworks Distribution group does not report backlog as its revenues are not derived from long-term contracts. * Consumer and Commercial Group revenues were $148,352,000 for the three months ended September 30, 1998 as compared to $86,738,000 in the prior year. Gross profit margins and operating margins were 46.7% and 16.3%, respectively, compared to 42.9% and 12.4% in the prior year. The Consumer and Commercial Group does not report backlog as its revenues are not derived from long-term contracts. Internal growth for the period totaled approximately 6%. * Filtration and Separations Group revenues were $81,853,000 for the three months ended September 30, 1998. Gross profit margins and operating margins were 36.1% and 9.7%, respectively. Filtration and Separations Group backlog was $61,039,000 at September 30, 1998. Prior year comparisons for the Filtration and Separations Group are not meaningful as the Company's acquisition of Memtec Limited (which represents a significant portion of the Filtration and Separations Group) occurred subsequent to the second quarter of the prior fiscal year and was accounted for as a purchase. * Industrial Products Group revenues were $219,460,000 for the three months ended September 30, 1998 as compared to $182,391,000 in the prior fiscal year. Gross profit margins and operating margins were 24.3% and 7.5%, respectively, compared to 17.5% and 2.9% in the prior fiscal year. Industrial Products Group backlog was $190,721,000 at September 30, 1998. Internal growth for the division was approximately 1%. "We continue to believe that the combination of our technologies, service capability and sales and marketing strength will drive our growth," said Richard J. Heckmann, Chairman, President and CEO of USFilter. "The expansion in our gross margins and operating margins also demonstrates the strength of our strategy over the past several years," he said. USFilter is the leading global provider of commercial, industrial, municipal and residential water and wastewater treatment systems, products and services. USFilter has the industry's largest network of sales, service and manufacturing facilities through over 2,000 locations in 94 countries. USFilter is also a leading provider of outsourced water services including the operation of water and wastewater treatment systems at customer sites. It is also actively involved in the development of privatization initiatives for municipal water treatment facilities in the U.S. and around the world. USFilter, which is based in Palm Desert, California, invites you to visit its web site at http://www.usfilter.com. Forward looking statements in this release, including, without limitation, statements relating to the Company's plans, strategies, objectives, expectations, intentions and adequacy of resources, are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. These factors include, among others, the following: general economic and business conditions; competition; success of operating initiatives, advertising and promotional efforts; existence of adverse publicity or litigation; changes in business strategy or plans; quality of management; availability, terms and development of capital; business abilities and judgment of personnel; changes in, or the failure to comply with governmental regulations; and other factors described in filings of the Company with the SEC. The Company undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise. UNITED STATES FILTER CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS September 30, 1998 (Unaudited) Three Months Six Months Ended Ended September 30, September 30, 1998 1997 1998 1997 (in thousands, except per share data) Revenues $ 1,225,882 938,358 2,345,213 1,731,294 Cost of sales 861,445 698,491 1,649,614 1,296,064 Gross profit 364,437 239,867 695,599 435,230 Selling, general and administrative expenses 244,415 176,416 467,579 330,666 Purchased in-process research and development -- -- 3,558 -- Merger, restructuring, acquisition and other related charges -- -- 257,920 -- 244,415 176,416 729,057 330,666 Operating income (loss) 120,022 63,451 (33,458) 104,564 Other income expense): Interest expense (29,533) (12,883) (55,181) (23,878) Gain on disposition of investment in affiliate -- -- -- 31,098 Interest income and other, net 3,603 1,287 7,730 2,782 (25,930) (11,596) (47,451) 10,002 Income (loss) before income tax expense 94,092 51,855 (80,909) 114,566 Income tax expense 33,881 18,292 14,277 41,708 Net income (loss) $ 60,211 33,563 (95,186) 72,858 Net income (loss) per common share: Basic $ 0.37 0.26 (0.59) 0.57 Diluted $ 0.36 0.25 (0.59) 0.56 Basic weighted average number of shares outstanding 164,601 130,461 161,271 128,274 Diluted weighted average number of shares outstanding 178,042 133,148 161,271 130,769 UNITED STATES FILTER CORPORATION AND SUBSIDIARIES SELECTED SEGMENT DATA The following unaudited summary selected segment data is provided for informational purposes only. The Company will implement the provisions of Statement of Financial Accounting Standards No. 131 "Disclosures about Segments of an Enterprise and Related Information" in connection with the filing of its Annual Report on Form 10-K for the fiscal year ending March 31, 1999. Three Months Six Months Ended September 30, Ended September 30, 1998 1997 1998 1997 (in thousands) Revenues: Water and Wastewater Group $ 497,423 381,893 948,790 723,661 Waterworks Distribution Group 278,794 255,731 517,799 464,099 Consumer and Commercial Group 148,352 86,738 277,507 158,330 Filtration and Separations Group 81,853 31,605(b) 165,204 63,223(b) Industrial Products Group 219,460 182,391 435,913 321,981 Consolidated 1,225,882 938,358 2,345,213 1,731,294 Gross profit: Water and Wastewater Group 157,414 110,622 298,687 213,127 Waterworks Distribution Group 54,831 50,872 101,327 88,335 Consumer and Commercial Group 69,351 37,227 130,882 69,279 Filtration and Separations Group 29,518 9,182(b) 59,501 18,444(b) Industrial Products Group 53,323 31,964 105,202 46,045 Consolidated 364,437 239,867 695,599 435,230 Operating income: (a) Water and Wastewater Group 53,708 27,897 100,460 54,930 Waterworks Distribution Group 17,762 15,960 32,473 25,777 Consumer and Commercial Group 24,249 10,791 43,751 20,957 Filtration and Separations Group 7,937 3,513(b) 14,000 5,726(b) Industrial Products Group 16,366 5,290 37,336 (2,826) Consolidated $ 120,022 63,451 228,020 104,564 (a) Does not include one-time charges consisting of purchased in-process research and development and merger, restructuring, acquisition and other related charges resulting primarily from the acquisition of Culligan totaling $261,478 recorded in the three months ended June 30, 1998. (b) Does not include the results of operations of Memtec Limited, which was acquired in December 1997 and accounted for as a purchase.