UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q



(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File No. 1-9328

~~(Mark One)~~

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

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

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

~~For the transition period from to~~

~~Commission File No. 1-9328~~

ECOLAB INC.

(Exact name of registrant as specified in its charter)


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

1 Ecolab Place, St. Paul, Minnesota55102

(Address of principal executive offices)(Zip Code)

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

(Registrant’s telephone number, including area code)

(Not applicable)

(Former name, former address and former fiscal year,

if changed since last report)

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

Title of each class

Trading symbol(s)

Name of each exchange on which registered

Common Stock, $1.00 par value

2.625% Euro Notes due 2025

ECL

ECL 25

New York Stock Exchange

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

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

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


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

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

Emerging growth company ☐

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

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

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

~~288,914,305~~March 31, 2024: 285,569,775 shares ~~of common stock,~~ , par value $1.00 per ~~share~~.share.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF INCOME

(unaudited)

Third Quarter Ended

Nine Months Ended

September 30

September 30

(millions, except per share amounts)

2017

2016

2017

2016

Net sales

$3,563.3

$3,386.1

$10,187.6

$9,800.7

Operating expenses

Cost of sales (including special charges (a))

1,891.3

1,737.2

5,454.4

5,153.8

Selling, general and administrative expenses

1,087.3

1,071.6

3,293.2

3,253.1

Special (gains) and charges

4.9

3.2

47.9

35.7

Operating income

579.8

574.1

1,392.1

1,358.1

Interest expense, net

55.1

64.9

177.2

196.3

Income before income taxes

524.7

509.2

1,214.9

1,161.8

Provision for income taxes

128.9

129.7

264.2

286.7

Net income including noncontrolling interest

395.8

379.5

950.7

875.1

Net income attributable to noncontrolling interest

3.4

5.4

8.2

11.8

Net income attributable to Ecolab

$392.4

$374.1

$942.5

$863.3

Earnings attributable to Ecolab per common share

Basic

$ 1.36

$ 1.28

$ 3.25

$ 2.95

Diluted

$ 1.34

$ 1.27

$ 3.20

$ 2.91

Dividends declared per common share

$0.370

$0.350

$1.110

$1.050

Weighted-average common shares outstanding

Basic

289.0

291.6

289.8

292.8

Diluted

293.4

295.7

294.2

297.1



	First Quarter Ended
	March 31
(millions, except per share amounts)	2024		2023

Product and equipment sales		$2,986.5		$2,876.3
Service and lease sales		765.4		695.3
Net sales		3,751.9		3,571.6
Product and equipment cost of sales		1,679.2		1,798.3
Service and lease cost of sales		448.9		406.9
Cost of sales (including special charges (a))		2,128.1		2,205.2
Selling, general and administrative expenses		1,077.7		990.3
Special (gains) and charges		28.2		24.5
Operating income		517.9		351.6
Other (income) expense		(12.6)		(13.1)
Interest expense, net		71.6		74.2
Income before income taxes		458.9		290.5
Provision for income taxes		42.3		52.4
Net income including noncontrolling interest		416.6		238.1
Net income attributable to noncontrolling interest		4.5		4.7
Net income attributable to Ecolab		$412.1		$233.4

Earnings attributable to Ecolab per common share
Basic		$1.44		$0.82
Diluted		$1.43		$0.82

Weighted-average common shares outstanding
Basic		285.7		284.6
Diluted		287.8		285.9

(a)

~~(a)~~

Cost of sales includes special (gains) and charges of ~~$0.3 million in the third quarter of 2017,~~$1.6 and ~~$26.2 million and $61.9 million~~$3.2 in the first ~~nine months~~quarter of ~~2017~~2024 and ~~2016, respectively.~~

2023, respectively, which is recorded in product and equipment cost of sales and service and lease cost of sales.

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

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

(unaudited)

Third Quarter Ended

Nine Months Ended

September 30

September 30

(millions)

2017

2016

2017

2016

Net income including noncontrolling interest

$395.8

$379.5

$950.7

$875.1

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments

Foreign currency translation

150.6

17.2

275.8

(1.3)

Loss on net investment hedges

(50.9)

(1.2)

(103.7)

(29.1)

99.7

16.0

172.1

(30.4)

Derivatives and hedging instruments

(20.8)

(9.5)

(29.1)

(40.2)

Pension and postretirement benefits

Amortization of net actuarial loss and prior service costs included in

net periodic pension and postretirement costs

1.3

5.6

8.2

16.7

Postretirement benefits changes

-

30.9

30.9

1.3

36.5

8.2

47.6

Subtotal

80.2

43.0

151.2

(23.0)

Total comprehensive income, including noncontrolling interest

476.0

422.5

1,101.9

852.1

Comprehensive income attributable to noncontrolling interest

4.0

8.0

10.8

17.8

Comprehensive income attributable to Ecolab

$472.0

$414.5

$1,091.1

$834.3


	First Quarter Ended
	March 31
(millions)	2024		2023

Net income including noncontrolling interest		$416.6		$238.1

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments
Foreign currency translation		(46.6)		11.1
Gain (loss) on net investment hedges		8.9		(16.7)
Total foreign currency translation adjustments		(37.7)		(5.6)

Derivatives and hedging instruments		5.1		(4.7)

Pension and postretirement benefits		2.3		0.2

Subtotal		(30.3)		(10.1)

Total comprehensive income, including noncontrolling interest		386.3		228.0
Comprehensive income attributable to noncontrolling interest		5.0		5.2
Comprehensive income attributable to Ecolab		$381.3		$222.8

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

CONSOLIDATED BALANCE ~~SHEET~~SHEETS

(unaudited)

September 30

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

2017

2016

ASSETS

Current assets

Cash and cash equivalents

$209.1

$327.4
Accounts receivable, net

2,533.2

2,341.2
Inventories

1,509.0

1,319.4
Other current assets

363.2

291.4
Total current assets

4,614.5

4,279.4
Property, plant and equipment, net

3,617.2

3,365.0
Goodwill

7,154.4

6,383.0
Other intangible assets, net

4,039.6

3,817.8
Other assets

431.0

485.0
Total assets

$19,856.7

$18,330.2

LIABILITIES AND EQUITY

Current liabilities

Short-term debt

$1,073.0

$541.3
Accounts payable

1,115.9

983.2
Compensation and benefits

509.8

516.3
Income taxes

51.7

87.4
Other current liabilities

1,006.2

891.2
Total current liabilities

3,756.6

3,019.4
Long-term debt

6,484.5

6,145.7
Postretirement health care and pension benefits

983.7

1,019.2
Deferred income taxes

1,030.2

970.2
Other liabilities

302.5

204.8
Total liabilities

12,557.5

11,359.3

Equity (a)

Common stock

354.2

352.6
Additional paid-in capital

5,397.5

5,270.8
Retained earnings

7,598.0

6,975.0
Accumulated other comprehensive loss

(1,564.3)

(1,712.9)
Treasury stock

(4,563.1)

(3,984.4)
Total Ecolab shareholders’ equity

7,222.3

6,901.1
Noncontrolling interest

76.9

69.8
Total equity

7,299.2

6,970.9
Total liabilities and equity

$19,856.7

$18,330.2



	March 31		December 31
(millions, except per share amounts)	2024		2023

ASSETS
Current assets
Cash and cash equivalents		$479.9		$919.5
Accounts receivable, net		2,786.6		2,834.2
Inventories		1,565.9		1,497.2
Other current assets		379.3		393.2
Total current assets		5,211.7		5,644.1
Property, plant and equipment, net		3,451.1		3,474.6
Goodwill		8,111.4		8,148.2
Other intangible assets, net		3,413.6		3,493.5
Operating lease assets		566.3		553.5
Other assets		544.4		532.7
Total assets		$21,298.5		$21,846.6

LIABILITIES AND EQUITY
Current liabilities
Short-term debt		$11.3		$630.4
Accounts payable		1,607.1		1,566.3
Compensation and benefits		527.0		655.5
Income taxes		201.6		158.7
Other current liabilities		1,354.1		1,334.9
Total current liabilities		3,701.1		4,345.8
Long-term debt		7,528.6		7,551.4
Pension and postretirement benefits		640.4		651.7
Deferred income taxes		352.0		418.2
Operating lease liabilities		434.0		425.5
Other liabilities		416.8		381.8
Total liabilities		13,072.9		13,774.4
Commitments and contingencies (Note 16)

Equity (a)
Common stock		366.8		365.7
Additional paid-in capital		6,917.6		6,766.7
Retained earnings		10,324.5		10,075.4
Accumulated other comprehensive loss		(1,881.2)		(1,850.4)
Treasury stock		(7,522.1)		(7,312.7)
Total Ecolab shareholders’ equity		8,205.6		8,044.7
Noncontrolling interest		20.0		27.5
Total equity		8,225.6		8,072.2
Total liabilities and equity		$21,298.5		$21,846.6

(a)

~~(a)~~

Common stock, 800.0 ~~million~~ shares authorized, $1.00 par value per share, ~~288.9 million~~285.6 shares outstanding ~~at September 30, 2017~~as of March 31, 2024 and ~~291.8 million~~285.4 shares outstanding atas of December 31, ~~2016.~~2023. Shares outstanding are net of treasury stock.

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

CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CASH FLOWS

(unaudited)


	First Quarter Ended
	March 31
(millions)	2024		2023

OPERATING ACTIVITIES
Net income including noncontrolling interest		$416.6		$238.1
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation		157.0		158.7
Amortization		77.8		75.6
Deferred income taxes		(74.4)		(18.0)
Share-based compensation expense		47.0		31.4
Pension and postretirement plan contributions		(15.3)		(14.6)
Pension and postretirement plan (income) expense, net		4.0		2.6
Restructuring charges, net of cash paid		0.2		(27.3)
Other, net		1.5		2.3
Changes in operating assets and liabilities, net of effect of acquisitions:
Accounts receivable		49.0		41.0
Inventories		(65.5)		70.6
Other assets		21.3		3.5
Accounts payable		82.7		(268.5)
Other liabilities		(52.5)		(97.2)
Cash provided by operating activities		649.4		198.2

INVESTING ACTIVITIES
Capital expenditures		(201.5)		(173.7)
Property and other assets sold		0.7		4.8
Other, net		(0.2)		(20.5)
Cash used for investing activities		(201.0)		(189.4)

FINANCING ACTIVITIES
Net issuances of commercial paper and notes payable		7.2		5.5
Long-term debt repayments		(629.6)		-
Reacquired shares		(196.4)		(10.6)
Dividends paid		(175.2)		(157.7)
Exercise of employee stock options		105.5		15.5
Hedge settlements		-		(18.4)
Other, net		(0.8)		(0.7)
Cash used for financing activities		(889.3)		(166.4)

Effect of exchange rate changes on cash and cash equivalents		1.3		(21.6)

Decrease in cash and cash equivalents		(439.6)		(179.2)
Cash and cash equivalents, beginning of period		919.5		598.6
Cash and cash equivalents, end of period		$479.9		$419.4

Nine Months Ended

September 30

(millions)

2017

2016

OPERATING ACTIVITIES

Net income including noncontrolling interest

$950.7

$875.1

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

Depreciation

437.0

420.9

Amortization

228.5

217.2

Deferred income taxes

10.4

(55.3)

Share-based compensation expense

71.8

67.7

Excess tax benefits from share-based payment arrangements

-

(39.5)

Pension and postretirement plan contributions

(131.0)

(207.0)

Pension and postretirement plan expense

26.5

43.1

Restructuring charges, net of cash paid

13.3

(48.1)

Asset charges and write-downs

-

50.9

Other, net

19.9

11.9

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

Accounts receivable

(23.5)

37.8

Inventories

(116.9)

34.6

Other assets

8.4

(14.0)

Accounts payable

57.0

(37.6)

Other liabilities

(107.2)

134.0

Cash provided by operating activities

1,444.9

1,491.7

INVESTING ACTIVITIES

Capital expenditures

(538.2)

(478.6)

Capitalized software expenditures

(55.8)

(32.2)

Property and other assets sold

4.1

29.6

Acquisitions and investments in affiliates, net of cash acquired

(831.2)

(44.7)

Deposit into acquisition related escrow

(0.8)

-

Restricted cash activity

53.8

(55.9)

Cash used for investing activities

(1,368.1)

(581.8)

FINANCING ACTIVITIES

Net issuances (repayments) of commercial paper and notes payable

187.8

(522.4)

Long-term debt borrowings

495.0

793.8

Long-term debt repayments

(20.1)

(130.5)

Reacquired shares

(587.7)

(737.8)

Dividends paid

(330.3)

(324.5)

Exercise of employee stock options

63.0

62.3

Excess tax benefits from share-based payment arrangements

-

39.5

Acquisition related liabilities and contingent consideration

(8.2)

(3.8)

Cash provided by (used for) financing activities

(200.5)

(823.4)

Effect of exchange rate changes on cash and cash equivalents

5.4

1.3

Increase (decrease) in cash and cash equivalents

(118.3)

87.8

Cash and cash equivalents, beginning of period

327.4

92.8

Cash and cash equivalents, end of period

$209.1

$180.6

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

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)


	First Quarter Ended March 31, 2024 and 2023
(millions, except per share amounts)	Common Stock		Additional Paid-in Capital		Retained Earnings		AOCI (Loss)		Treasury Stock		Ecolab Shareholders' Equity		Non-Controlling Interest		Total Equity
Balance, December 31, 2022		$364.7		$6,580.2		$9,318.8		($1,726.6)		($7,301.0)		$7,236.1		$22.5		$7,258.6

Net income						233.4						233.4		4.7		238.1
Other comprehensive income (loss)								(10.6)				(10.6)		0.5		(10.1)
Cash dividends declared (a)						(150.9)						(150.9)		(6.9)		(157.8)
Stock options and awards		0.3		46.3						0.2		46.8				46.8
Reacquired shares										(10.6)		(10.6)				(10.6)
Balance, March 31, 2023		$365.0		$6,626.5		$9,401.3		($1,737.2)		($7,311.4)		$7,344.2		$20.8		$7,365.0

Balance, December 31, 2023		$365.7		$6,766.7		$10,075.4		($1,850.4)		($7,312.7)		$8,044.7		$27.5		$8,072.2

Net income						412.1						412.1		4.5		416.6
Other comprehensive income (loss)								(30.8)				(30.8)		0.5		(30.3)
Cash dividends declared (a)						(163.0)						(163.0)		(12.5)		(175.5)
Stock options and awards		1.1		150.9						0.6		152.6				152.6
Reacquired shares										(210.0)		(210.0)				(210.0)
Balance, March 31, 2024		$366.8		$6,917.6		$10,324.5		($1,881.2)		($7,522.1)		$8,205.6		$20.0		$8,225.6

(a)	Dividends declared per common share were $0.57 and $0.53 in the first quarter of 2024 and 2023, respectively.

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

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. CONSOLIDATED FINANCIAL INFORMATION

The unaudited consolidated financial information for the ~~third~~first quarter ended March 31, 2024 and ~~nine months ended September 30, 2017 and 2016 reflect,~~2023 reflects, in the opinion of ~~company~~ management, all adjustments necessary for a fair statement of the financial position, results of operations, comprehensive income, ~~(loss)~~equity and cash flows of Ecolab Inc. ("Ecolab" or "the Company") for the interim periods presented. Any adjustments consist of normal recurring items.

The financial results for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet data as of December 31, ~~2016~~2023 was derived from the audited consolidated financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America. The unaudited consolidated financial information should be read in conjunction with the consolidated financial statements and notes thereto incorporated in the Company's Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2023 filed with the Securities and Exchange Commission (“SEC”) on February 23, 2024.

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

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

With respect to the unaudited financial information of the Company for the ~~third~~first quarter ended March 31, 2024 and ~~nine months ended September 30, 2017 and 2016~~2023 included in this Form 10-Q, PricewaterhouseCoopers LLP reported that they have applied limited procedures in accordance with professional standards for a review of such information. Their separate report dated ~~November~~May 2, ~~2017~~2024 appearing herein states that they did not audit and they do not express an opinion on that unaudited financial information. Accordingly, the degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. PricewaterhouseCoopers LLP is not subject to the liability provisions of Section 11 of the Securities Act of 1933, as amended (the "Act"), for their report on the unaudited financial information because that report is not a "report" or a "part" of a registration statement prepared or certified by PricewaterhouseCoopers LLP within the meaning of Sections 7 and 11 of the Act.

2. SPECIAL (GAINS) AND CHARGES

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



	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									First Quarter Ended
									March 31
(millions)	2017		2016		2017		2016		2024		2023
Cost of sales
Restructuring activities		$-		$-		$2.2		$0.9		$1.6		$3.2
Acquisition and integration costs		0.3		-		12.9		-
Energy related charges		-		-		-		51.0
Other		-		-		11.1		10.0
Subtotal		0.3		-		26.2		61.9

Cost of sales subtotal										1.6		3.2

Special (gains) and charges
Restructuring activities		4.1		(7.7)		34.6		(6.8)		18.1		12.6
Acquisition and integration costs		1.8		1.7		12.7		5.0
Energy related charges		-		-		-		12.6
Venezuela related gain		(3.2)		-		(8.5)		(7.8)
Acquisition and integration activities										2.5		5.0
Other		2.2		9.2		9.1		32.7		7.6		6.9
Subtotal		4.9		3.2		47.9		35.7

Special (gains) and charges subtotal										28.2		24.5

Total special (gains) and charges		$5.2		$3.2		$74.1		$97.6		$29.8		$27.7

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

Restructuring activities

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

~~During the second quarter of 2017,~~Combined Program

In November 2022 the Company ~~commenced restructuring~~approved a Europe cost savings program. In connection with these actions, the Company expected to incur pre-tax charges of $130 million ($110 million after tax). In February 2023, the Company expanded its previously announced Europe cost savings program to focus on its Institutional and Healthcare businesses in other ~~cost-saving actions in order to streamline its operations. These actions include a reduction of~~regions. In connection with the ~~Company’s global workforce by approximately 570 positions, as well as asset disposals and lease terminations. As a result of these actions,~~expanded program (“Combined Program”), the Company expects to incur ~~$40 to $45~~total pre-tax charges of $195 million ($~~30 to $35~~150 million after tax) of. The Company expects that these restructuring charges will be substantially completed by the ~~majority~~end of ~~which is~~2024. Program actions include headcount reductions from terminations, not filling certain open positions, and facility closures. The Combined Program charges are expected to be ~~incurred during 2017. The~~primarily cash expenditures related to severance and asset disposals.

In anticipation of this Combined Program, a limited number of actions were taken in the fourth quarter of 2022. As a result, the Company reclassified $19.3 million ($14.5 million after tax) from other restructuring to the Combined Program in the first quarter of 2023.

During the first quarter of 2024 and 2023, the Company recorded restructuring charges of ~~$3.6~~$19.7 million ($~~1.3~~15.8 million after tax) and ~~$36.6~~$13.4 million ($~~26.2~~10.2 million after tax) ~~during the third quarter and first nine months of 2017,~~, respectively, ~~related~~ primarily ~~to employee termination costs. As of September 30, 2017, the restructuring liability balance~~ related to ~~these actions was $28.2 million.~~severance and professional services. The Company ~~anticipates~~has recorded $183.9 million ($152.7 million after tax) of cumulative charges under the ~~majority~~Combined Plan. The net liability related to the Combined Program was $44.1 million and $43.1 million as of ~~the pretax charges will represent net cash expenditures which are~~March 31, 2024 and December 31, 2023, respectively. The remaining liability is expected to be paid over a period of a few months to several quarters and will ~~be funded from operating activities. Cash payments during the third quarter and first nine months of 2017 were $4.3 million and $4.9 million, respectively.~~

Net restructuring charges related to the Company’s Energy and Combined restructuring plans during 2017 were minimal during the third quarter and first nine months of 2017. During the third quarter and first nine months of 2016, net restructuring activities included net restructuring gains of $7.7 million ($7.2 million after tax) and $5.9 million ($7.3 million after tax), respectively. The restructuring liability balance was $23.1 million and $39.6 million as of September 30, 2017 and December 31, 2016, respectively. The reduction in liability was driven primarily by severance and other cash payments. The remaining accrual is expected to be paid over a period of a few months to several quarters and continuescontinue to be funded from operating activities.

Restructuring activity related to the Combined Program since inception of the underlying actions includes the following items:



	Employee		Asset
(millions)	Costs		Disposals		Other		Total
2022-2023 Activity
Recorded expense and accrual		$114.2		$14.0		$16.7		$144.9
Net cash payments		(90.4)		-		(16.7)		(107.1)
Non-cash charges		-		(14.0)		-		(14.0)
Reclassification		19.3		-		-		19.3
Net restructuring liability, December 31, 2023		43.1		-		-		43.1

2024 Activity
Recorded expense and accrual		2.3		0.4		17.0		19.7
Net cash payments		(15.9)		-		(2.4)		(18.3)
Non-cash charges		-		(0.4)		-		(0.4)
Net restructuring liability, March 31, 2024		$29.5		$-		$14.6		$44.1

Acquisition and integration related costs

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

~~Acquisition and integration~~ costs reported in special (gains) and charges on the Consolidated ~~Statement~~Statements of Income include ~~$1.8~~$2.5 million ($1.2 million after tax) and $12.7 million ($8.5 million after tax) of acquisition costs, advisory and legal fees, and integration charges for the Anios and Swisher acquisitions during the third quarter and first nine months of 2017, respectively.

~~During the third quarter and first nine months of 2016, the Company incurred acquisition and integration charges of $1.7 million ($1.0~~1.9 million after tax) and $5.0 million ($~~3.1~~3.7 million after tax), during the first quarter of 2024 and 2023, respectively.

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

~~Energy related charges~~Other operating activities

Oil industry activity remained depressed during 2016 when compared with 2014 levels, resulting from excess oil supply pressures, which have negatively impacted exploration and production investments in the energy industry, particularly in North America. As a result of these conditions and their corresponding impact on the Company’s business outlook, the Company recorded totalOther special charges of ~~$63.6~~$7.6 million ($~~42.9~~5.4 million after tax) ~~during~~and $6.9 million ($5.4 million after tax) recorded in the first ~~nine months of 2016, comprised of inventory write downs and related disposal costs, fixed asset charges, headcount reductions and other charges. No such charges were incurred in 2017.~~

The inventory write-downs and related disposal costs of $31.1 million include adjustments due to the significant decline in activity and related prices of certain specific-use and other products, coupled with declines in replacement costs, as well as estimated costs to dispose the respective excess inventory. The fixed asset charges of $18.2 million resulted from the write-down of certain assets related to the reduction in certain aspects of the Company’s North American Global Energy segment, as well as abandonment of certain projects under construction. The carrying value of the corresponding fixed assets was reduced to zero. The employee termination costs of $12.8 million include a reduction in the Global Energy segment’s global workforce to better align its workforce with anticipated activity levels in the near term. As of the end of the third quarter of ~~2017, the Company had $3.2 million of corresponding severance remaining to be paid,~~2024 and 2023, respectively, which ~~is expected to be paid~~are recorded in ~~the next several months and be funded from operating activities.~~

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

~~Venezuela related gain~~

Effective as of the end of the fourth quarter of 2015, the Company deconsolidated its Venezuelan subsidiaries. The Company recorded gains due to U.S. dollar cash recoveries of intercompany receivables written off at the time of deconsolidation of $3.2 million ($2.0 million after tax) during the third quarter of 2017 and $8.5 million ($5.3 million after tax) during the first nine months of 2017. In 2016, the Company recorded no such gains during the third quarter and $7.8 million ($4.9 million after tax) during the first nine months.

~~Other~~

During the third quarter of 2017, the Company recorded charges of $2.2 million ($1.4 million after tax) related to litigation. During the first nine months of 2017, the Company recorded charges of $20.2 million ($15.9 million after tax) related to litigation and a Global Energy vendor contract termination. These charges have been included as a component of both cost of sales and special (gains) and charges on the Consolidated Statement of Income.

During the first nine months of 2016, the Company recorded a charge of $10.0 million ($6.3 million after tax) related to a fixed asset impairment and related inventory charges. The fixed asset impairment corresponds to additional charges of certain U.S. production equipment and buildings, resulting from further lower production, initially impaired during the fourth quarter of 2015. This charge has been included as a component of cost of sales on the Consolidated Statement of Income. There were no such charges in the third quarter of 2016.

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

3. ACQUISITIONS ~~AND DISPOSITIONS~~

Acquisitions

The Company makes business acquisitions that align with its strategic business objectives. The assets and liabilities of ~~the~~ acquired ~~entities have been~~businesses are recorded ~~as of the acquisition date, at their respective fair values, and are included~~ in the Consolidated Balance ~~Sheet and results of the Company from the date of acquisition. The purchase price allocation is~~Sheets based on estimates of the fair value of assets acquired, liabilities assumed and ~~liabilities assumed. The aggregate~~noncontrolling interests acquired as of the acquisition date. Goodwill is recognized in the amount that the purchase ~~price~~consideration paid exceeds the fair value of ~~acquisitions has been~~the net assets acquired. Purchase consideration includes both cash paid and the fair value of noncash consideration exchanged, including stock and/or contingent consideration, and is reduced ~~for any~~by the amount of cash or cash equivalents acquired with the acquisition. Acquisitions during the first nine months of 2017 and 2016 were not material to the Company’s consolidated financial statements; therefore, pro forma financial information is not presented.

~~Anios Acquisition~~

On February 1, 2017, the Company acquired Anios for total consideration of $798.3 million, including satisfaction of outstanding debt. Anios is a leading European manufacturer and marketer of hygiene and disinfection products for the healthcare, food service, and food and beverage processing industries. Anios provides an innovative product line that expands the solutions the Company is able to offer while also providing a complementary geographic footprint within the healthcare market. With pre-acquisition annual sales of approximately $245 million, the acquired business became part of the Company’s Global Institutional reportable segmentacquired. No acquisitions occurred during the first quarter of 2017. During 2016, the Company deposited €50 million in an escrow account that was released back to the Company upon closing of the transaction in February 2017. As shown within Note 4, this was recorded as restricted cash within other assets on the Consolidated Balance Sheet as of December 31, 2016.2024 or 2023.

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

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

~~The following table summarizes the preliminary value of Anios assets acquired and liabilities assumed as of the acquisition date.~~



~~(millions)~~
~~Tangible assets~~			~~$142.7~~
~~Identifiable intangible assets:~~
~~Customer relationships~~			~~252.0~~
~~Trademarks~~			~~65.7~~
~~Other technology~~			~~16.1~~
~~Total assets acquired~~			~~476.5~~

~~Total liabilities assumed~~			~~184.7~~

~~Goodwill~~			~~506.5~~
~~Total consideration transferred~~			~~798.3~~

~~Long-term debt repaid upon close~~			~~192.8~~
~~Net consideration transferred to sellers~~			~~$605.5~~

~~Net tangible assets are primarily comprised of accounts receivable of $66.2 million, property, plant and equipment of $25.6 million and inventory of $29.7 million.~~

~~Customer relationships, trademarks, and other technology are being amortized over weighted average lives of 20, 17, and 11 years, respectively.~~

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

~~Other Acquisitions~~

Excluding the Anios acquisition, during the first nine months of 2017, the Company paid $32.6 million for acquisitions, of which $18.4 million was attributed to certain identifiable intangible assets. The weighted average useful life of these identifiable intangible assets acquired was 12 years. Additionally, there were immaterial purchase price adjustments related to prior year acquisitions.

During the first nine months of 2016, the Company paid $48.5 million for acquisitions, of which $2.5 million was attributed to certain identifiable intangible assets. The weighted average useful life of these identifiable intangible assets acquired was 5 years. Additionally, there were immaterial purchase price adjustments related to prior year acquisitions.

~~Subsequent Event Activity~~

The Company entered into various purchase agreements which are expected to close in the fourth quarter of 2017. None of the agreements are material to the consolidated financial statements, individually or in the aggregate.

~~Dispositions~~

~~There were no business dispositions during the first nine months of 2017 or 2016.~~

~~Subsequent Event Activity~~

In October 2017, the Company entered into an agreement to sell its Equipment Care business which subsequently closed on November 1, 2017. The disposition is not expected to be material to the consolidated financial statements.

~~4. BALANCE SHEET INFORMATION~~

September 30

December 31
(millions)

2017

2016
Accounts receivable, net

Accounts receivable

$2,606.4

$2,408.8

Allowance for doubtful accounts

(73.2)

(67.6)

Total

$2,533.2

$2,341.2

Inventories

Finished goods

$1,004.8

$860.0

Raw materials and parts

461.0

408.4

Inventories at FIFO cost

1,465.8

1,268.4

FIFO cost to LIFO cost difference

43.2

51.0

Total

$1,509.0

$1,319.4

Other current assets

Prepaid assets

$128.2

$98.3

Taxes receivable

155.9

105.0

Derivative assets

29.0

46.3

Other

50.1

41.8

Total

$363.2

$291.4

Property, plant and equipment, net

Land

$227.4

$211.0

Buildings and leasehold improvements

1,174.5

1,121.2

Machinery and equipment

2,219.3

2,035.8

Merchandising and customer equipment

2,396.6

2,199.4

Capitalized software

583.0

531.1

Construction in progress

422.0

344.1

7,022.8

6,442.6

Accumulated depreciation

(3,405.6)

(3,077.6)

Total

$3,617.2

$3,365.0

Other intangible assets, net

Intangible assets not subject to amortization

Trade names

$1,230.0

$1,230.0

Intangible assets subject to amortization

Customer relationships

$3,588.2

$3,206.1

Trademarks

378.8

303.3

Patents

459.7

446.5

Other technology

229.1

210.5

4,655.8

4,166.4

Accumulated amortization

Customer relationships

(1,356.1)

(1,148.2)

Trademarks

(144.6)

(125.2)

Patents

(179.0)

(157.3)

Other technology

(166.5)

(147.9)

(1,846.2)

(1,578.6)

Net intangible assets subject to amortization

2,809.6

2,587.8

Total

$4,039.6

$3,817.8

Other assets

Deferred income taxes

$105.3

$92.3

Pension

35.6

27.2

Derivative assets

-

21.5

Restricted cash

-

53.0

Other

290.1

291.0

Total

$431.0

$485.0

September 30

December 31
(millions)

2017

2016
Other current liabilities

Discounts and rebates

$318.3

$275.2

Dividends payable

106.9

108.0

Interest payable

70.4

37.3

Taxes payable, other than income

117.0

103.7

Derivative liabilities

86.6

24.6

Restructuring

45.7

30.5

Other

261.3

311.9

Total

$1,006.2

$891.2

Accumulated other comprehensive loss

Unrealized loss on derivative financial instruments, net of tax

$(37.6)

$(8.5)

Unrecognized pension and postretirement benefit expense, net of tax

(527.2)

(511.4)

Cumulative translation, net of tax

(999.5)

(1,193.0)

Total

$(1,564.3)

$(1,712.9)

4. BALANCE SHEETS INFORMATION



	March 31		December 31
(millions)	2024		2023
Accounts receivable, net
Accounts receivable		$2,939.1		$2,983.2
Allowance for expected credit losses and other accruals		(152.5)		(149.0)
Total		$2,786.6		$2,834.2

Inventories
Finished goods		$970.2		$911.4
Raw materials and parts		702.4		704.7
Inventories at FIFO cost		1,672.6		1,616.1
FIFO cost to LIFO cost difference		(106.7)		(118.9)
Total		$1,565.9		$1,497.2

Other current assets
Prepaid assets		$153.5		$143.9
Taxes receivable		169.3		186.9
Derivative assets		7.2		3.3
Other		49.3		59.1
Total		$379.3		$393.2

Property, plant and equipment, net
Land		$154.9		$155.6
Buildings and leasehold improvements		1,178.8		1,171.0
Machinery and equipment		2,146.7		2,113.8
Merchandising and customer equipment		2,817.7		2,758.4
Capitalized software		1,006.4		985.9
Construction in progress		454.1		470.1
		7,758.6		7,654.8
Accumulated depreciation		(4,307.5)		(4,180.2)
Total		$3,451.1		$3,474.6

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		3,374.8		3,385.1
Patents		505.2		503.6
Trademarks		404.4		406.5
Other technologies		551.0		551.2
		4,835.4		4,846.4
Accumulated amortization
Customer relationships		(1,850.9)		(1,805.0)
Patents		(326.3)		(319.4)
Trademarks		(244.6)		(238.0)
Other technologies		(230.0)		(220.5)
		(2,651.8)		(2,582.9)
Net intangible assets subject to amortization		2,183.6		2,263.5
Total		$3,413.6		$3,493.5

Other assets
Deferred income taxes		$122.0		$119.3
Pension		120.8		118.4
Derivative asset		26.5		23.6
Other		275.1		271.4
Total		$544.4		$532.7



	March 31		December 31
(millions)	2024		2023
Other current liabilities
Discounts and rebates		$442.1		$438.8
Dividends payable		163.0		162.7
Interest payable		64.6		68.5
Taxes payable, other than income		143.8		153.2
Derivative liability		1.2		3.7
Restructuring		48.8		48.9
Contract liability		118.0		110.9
Operating lease liabilities		130.1		126.1
Other		242.5		222.1
Total		$1,354.1		$1,334.9

Accumulated other comprehensive income (loss)
Unrealized gain (loss) on derivative financial instruments, net of tax		$1.0		($4.1)
Unrecognized pension and postretirement benefit expense, net of tax		(532.4)		(534.7)
Cumulative translation, net of tax		(1,349.8)		(1,311.6)
Total		($1,881.2)		($1,850.4)

5. DEBT AND INTEREST

Short-term Debt

The following table provides the components of the Company’s short-term debt obligations as of ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016.~~

September 30

December 31
(millions)

2017

2016
Short-term debt

Commercial paper

$238.0

$-

Notes payable

24.2

29.9

Long-term debt, current maturities

810.8

511.4

Total

$1,073.0

$541.3

2023.

~~Line~~




	March 31		December 31
(millions)	2024		2023
Short-term debt
Notes payable		$8.9		$1.8
Long-term debt, current maturities		2.4		628.6
Total		$11.3		$630.4

Lines of Credit

As of ~~September 30, 2017,~~March 31, 2024, the Company ~~had in place~~has a $2.0 billion multi-year revolving credit facility which expires in ~~December 2019.~~April 2026. The credit facility has been established with a diverse syndicate of banks and supports the Company’s U.S. and Euro commercial paper programs. There were no borrowings under the Company’s credit facility as of either ~~September 30, 2017~~March 31, 2024 or December 31, ~~2016.~~2023.

Commercial Paper

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

The Company had no outstanding commercial paper under its U.S. and Euro commercial paper programs as of March 31, 2024 or December 31, 2023.

Notes Payable

The Company’s notes payable consists of uncommitted credit lines with major international banks and financial institutions, primarily to support global cash pooling structures. As of ~~September 30, 2017,~~March 31, 2024 and December 31, 2023, the Company had ~~$238.0~~$8.9 million ~~(€200 million) of commercial paper~~and $1.8 million, respectively, outstanding under ~~its Euro program and no commercial paper outstanding under its U.S. program. As of December 31, 2016, the Company had no commercial paper outstanding under either program.~~these credit lines.

1210

Long-term Debt

The following table provides the components of the Company’s long-term debt obligations, including current maturities, as of ~~September 30, 2017~~March 31, 2024 and December 31, ~~2016.~~

Maturity

September 30

December 31
(millions)

by Year

2017

2016
Long-term debt

Public notes (2017 principal amount)

Five year 2012 senior notes ($500 million)

2017

$499.6

$498.9

Three year 2015 senior notes ($300 million)

2018

299.5

298.9

Three year 2016 senior notes ($400 million)

2019

396.6

395.9

Five year 2015 senior notes ($300 million)

2020

298.9

298.6

Ten year 2011 senior notes ($1.25 billion)

2021

1,245.6

1,244.8

Five year 2017 senior notes ($500 million)

2022

496.0

-

Seven year 2016 senior notes ($400 million)

2023

397.4

397.0

Seven year 2016 senior notes (€575 million)

2024

676.5

608.4

Ten year 2015 senior notes (€575 million)

2025

679.5

604.3

Ten year 2016 senior notes ($750 million)

2026

742.7

742.1

Thirty year 2011 senior notes ($750 million)

2041

739.1

738.7

Thirty year 2016 senior notes ($250 million)

2046

245.9

245.9

Private notes (2017 principal amount)

Series A private placement senior notes ($250 million)

2018

248.8

248.9

Series B private placement senior notes ($250 million)

2023

249.3

249.2

Capital lease obligations

4.9

5.2

Other

75.0

80.3

Total debt

7,295.3

6,657.1

Long-term debt, current maturities

(810.8)

(511.4)

Total long-term debt

$6,484.5

$6,145.7

2023.




	Maturity	March 31		December 31
(millions)	by Year	2024		2023

Long-term debt
Public notes (2024 principal amount)
Seven year 2016 senior notes (€575 million)	2024		$-		$625.9
Ten year 2015 senior notes (€575 million)	2025		620.4		625.1
Ten year 2016 senior notes ($750 million)	2026		728.8		728.2
Ten year 2017 senior notes ($500 million)	2027		447.7		448.3
Six Year 2021 senior notes ($500 million)	2027		497.6		497.4
Five Year 2022 senior notes ($500 million)	2028		494.5		494.2
Ten year 2020 senior notes ($698 million)	2030		647.7		662.7
Ten year 2020 senior notes ($600 million)	2031		556.1		561.0
Eleven year 2021 senior notes ($650 million)	2032		645.3		645.2
Thirty year 2011 senior notes ($389 million)	2041		384.8		384.7
Thirty year 2016 senior notes ($200 million)	2046		197.4		197.4
Thirty year 2017 senior notes ($484 million)	2047		427.2		426.8
Thirty year 2020 senior notes ($500 million)	2050		491.2		491.1
Thirty year 2021 senior notes ($850 million)	2051		839.4		839.3
Thirty-four year 2021 senior notes ($685 million)	2055		539.7		539.2
Finance lease obligations and other			13.2		13.5
Total debt			7,531.0		8,180.0
Long-term debt, current maturities			(2.4)		(628.6)
Total long-term debt			$7,528.6		$7,551.4

Public Notes

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

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

~~Private Notes~~Covenants

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

~~Covenants~~

The Company is in compliance with ~~its debt~~all covenants under the Company’s outstanding indebtedness as of ~~September 30, 2017.~~March 31, 2024.

Net Interest Expense

Interest expense and interest income recognized during the ~~third~~first quarter of 2024 and ~~the first nine months of 2017 and 2016~~2023 were as follows:


	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									First Quarter Ended
									March 31
(millions)	2017		2016		2017		2016		2024		2023
Interest expense		$60.7		$69.0		$191.0		$209.4		$94.5		$80.1
Interest income		(5.6)		(4.1)		(13.8)		(13.1)		(22.9)		(5.9)
Interest expense, net		$55.1		$64.9		$177.2		$196.3		$71.6		$74.2

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

6. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

Goodwill arises from the Company’s acquisitions and represents the excess of the fair value of the purchase ~~price~~consideration exchanged over the fair value of ~~identifiable~~ net assets ~~acquired in a business combination.~~acquired. The Company’s reporting units are its eight operating segments.

~~During~~ The Company assesses goodwill for impairment on an annual basis during the second quarter of 2017, 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.quarter. If ~~the fair value of a reporting unit exceeds its carrying value, goodwill of the reporting unit~~circumstances change or events occur that demonstrate it is ~~considered~~more likely than not ~~to be impaired, and the second step of the impairment test is unnecessary. If~~that the carrying amount of ~~the~~a reporting unit exceeds its fair value, the ~~second step~~Company completes an interim goodwill assessment of that reporting unit prior to the next annual assessment. If the results of an annual or interim goodwill assessment demonstrate the carrying amount of a reporting unit is greater than its fair value, the Company will recognize an impairment ~~test would be performed to measure~~loss for the amount ~~of impairment loss to be recorded, if any. The Company’s goodwill impairment assessment for 2017 indicated~~by which the ~~estimated~~reporting unit’s carrying amount exceeds its fair value, ~~of each of its reporting units exceeded its~~but not to exceed the carrying amount ~~by a significant margin.~~

~~If circumstances change significantly, the Company would also test a~~of goodwill assigned to that reporting ~~unit’s goodwill for impairment during interim periods between its annual tests.~~unit. There has been no impairment of goodwill in any of the ~~years~~periods presented.

The changes in the carrying amount of goodwill for each of the Company's reportable segments during the ~~nine months~~first quarter ended ~~September 30, 2017~~March 31, 2024 were as follows:

Global

Global

Global

(millions)

Industrial

Institutional

Energy

Other

Total

December 31, 2016

$2,522.3

$653.4

$3,093.6

$113.7

$6,383.0

Reclassifications (a)

62.7

(62.7)

-

-

-

December 31, 2016 revised

$2,585.0

$590.7

$3,093.6

$113.7

$6,383.0

Current year business combinations (b)

4.1

506.5

-

-

510.6

Prior year business combinations (c)

-

-

0.3

-

0.3

Effect of foreign currency translation

97.9

41.6

116.8

4.2

260.5

September 30, 2017

$2,687.0

$1,138.8

$3,210.7

$117.9

$7,154.4


			Global		Global		Global
	Global		Institutional		Healthcare &		Pest
(millions)	Industrial		& Specialty		Life Sciences		Elimination		Other		Total
December 31, 2023		$4,140.6		$610.0		$3,158.4		$-		$239.2		$8,148.2
Segment changes (a)		102.9		-		-		136.3		(239.2)		-
December 31, 2023 recast		4,243.5		610.0		3,158.4		136.3		-		8,148.2
Effect of foreign currency translation		(26.0)		(0.8)		(9.8)		(0.2)		-		(36.8)
March 31, 2024		$4,217.5		$609.2		$3,148.6		$136.1		$-		$8,111.4

(a)

~~(a)~~

Relates to ~~establishment~~reclassifications made to reportable segments in the current year. Effective January 1, 2024, the Company’s former Textile Care and Colloidal Technologies Group (“CTG”) operating segments are now part of the ~~Life Sciences reporting unit, and goodwill being allocated~~Water operating segment which continues to Life Sciences based on fair value allocation of goodwill. The Life Sciences reporting unit is included in the Industrial reportable segment and is comprised of operations previously recorded in the Food & Beverage and Healthcare reporting units, which are aggregated and reportedremain in the Global Industrial reportable segment. Additionally, the Pest Elimination operating segment, formerly aggregated with the Textile Care and CTG operating segments within Other, is now reported as the stand-alone Global ~~Institutional~~Pest Elimination reportable segment. After these changes, the Company has eight operating segments ~~respectively. See~~aligned with eight reporting units. Refer to Note 1415 for further information.

~~(b)~~

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

~~(c)~~

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

Other Intangible Assets

The Nalco trade name is the Company’s ~~principal~~only indefinite life intangible ~~asset. During~~asset, which is tested for impairment on an annual basis during the second ~~quarter~~quarter.Based on the ongoing performance of ~~2017,~~ the ~~Company completed its annual test for~~Company’s reporting units associated with the Nalco trade name, an interim indefinite life intangible asset impairment ~~using a relief from royalty method~~assessment was not performed during the first quarter of assessment, which incorporates assumptions regarding future sales projections 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.2024. There has been no impairment of the Nalco trade name intangible ~~asset~~ since it was acquired.

The Company’s intangible assets subject to amortization ~~primarily~~ include customer relationships, trademarks, patents and other ~~technology.~~technologies primarily acquired through business acquisitions. The fair value of ~~identifiable~~ intangible assets isacquired in business acquisitions are estimated ~~based upon~~primarily using discounted ~~future~~ cash flow ~~projections and other acceptable~~ valuation ~~methods. Other intangible~~methods at the time of acquisition. Intangible assets are amortized on a straight-line basis over their estimated ~~economic~~ lives. Total amortization expense related to ~~other intangible assets during the third quarter of 2017 and 2016 was $77.6 million and $71.9 million, respectively. Total amortization expense related to other~~ intangible assets during the first ~~nine months~~quarter of ~~2017~~2024 and ~~2016~~2023 was ~~$228.5~~$77.8 million and ~~$217.2~~$75.6 million, respectively. ~~Estimated amortization~~Amortization expense related to intangible assets for the remaining ~~three month~~nine-month period of ~~2017 related to other amortizable intangible assets~~2024 is expected to be approximately ~~$84~~$224 million.

1412

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, cross-currency swap derivative contracts and long-term debt.

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

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

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

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

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


	September 30, 2017

									March 31, 2024
(millions)	Carrying		Fair Value Measurements						Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3
									Amount		Level 1		Level 2		Level 3
Assets
Foreign currency forward contracts		$52.1		$-		$52.1		$-		$21.6		$-		$21.6		$-
Cross-currency swap derivative contracts										33.1		-		33.1		-

Liabilities
Foreign currency forward contracts		209.2		-		209.2		-		15.6		-		15.6		-
Interest rate swap agreements		3.6		-		3.6		-		167.6		-		167.6		-
Cross-currency swap derivative contracts										22.1		-		22.1		-


	December 31, 2023
(millions)	Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3
Assets
Foreign currency forward contracts		$26.6		$-		$26.6		$-
Cross-currency swap derivative contracts		29.1		-		29.1		-

Liabilities
Foreign currency forward contracts		27.0		-		27.0		-
Interest rate swap agreements		146.5		-		146.5		-
Cross-currency swap derivative contracts		24.9		-		24.9		-

December 31, 2016

(millions)

Carrying

Fair Value Measurements


Amount

Level 1

Level 2

Level 3

Assets

Foreign currency forward contracts

$ 93.4

$ -

$ 93.4

$ -

Liabilities

Foreign currency forward contracts

46.7

-

46.7

-

Interest rate swap agreements

3.5

-

3.5

-

The carrying value of foreign currency forward contracts is at fair value, which is determined based on foreign currency exchange rates as of the balance sheet date and is classified within Level 2. The carrying value of interest rate swap agreements is at fair value, which is determined based on current forward interest rates as of the balance sheet date and are classified within Level 2. The cross-currency swap derivative contracts are used to partially hedge the Company’s net investments in foreign operations against adverse movements in exchange rates between the U.S. dollar and the Euro and the U.S. dollar and CNH (CNH is the Chinese Yuan traded in the offshore market). The carrying value of the cross-currency swap derivative contracts is at fair value, which is determined based on ~~current~~the income approach with the relevant interest rates and foreign currency current exchange rates and forward ~~interest rates~~curves as inputs as of the balance sheet date and isare classified within Level 2. For purposes of fair value disclosure above, derivative values are presented gross. ~~See further~~Further discussion of gross versus net presentation of the Company's derivatives is within Note 8.

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

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

The fair value of long-term debt is based on quoted market prices for the same or similar debt instruments ~~classified~~(classified as Level 2.2). The carrying amount, which includes adjustments related to the impact of interest rate swap agreements, premiums and discounts, and deferred debt issuance costs, and the estimated fair value of long-term debt, including current maturities, held by the Company were:

September 30

December 31
(millions)

2017

2016

Carrying

Fair

Carrying

Fair


Amount

Value

Amount

Value
Long-term debt, including current maturities

$7,295.3

$7,707.6

$6,657.1

$6,963.9

March 31, 2024

December 31, 2023

Carrying

Fair

Carrying

Fair

Amount

Value

Amount

Value

Long-term debt, including current maturities

$7,531.0

$6,765.9

$8,180.0

$7,552.5

1513

8. DERIVATIVES AND HEDGING TRANSACTIONS

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

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

Derivative Positions Summary

Certain of the Company’s derivative transactions are subject to master netting arrangements that allow the Company to net settle contracts with the same counterparties. These arrangements generally do not call for collateral and as of the applicable dates presented in the following table, no cash collateral had been received or pledged related to the underlying derivatives.

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

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

Asset Derivatives

Liability Derivatives

September 30

December 31

September 30

December 31

(millions)

2017

2016

2017

2016

Derivatives designated as hedging instruments

Foreign currency forward contracts

$30.2

$73.4

$156.7

$19.8

Interest rate swap agreements

-

-

3.6

3.5

Derivatives not designated as hedging instruments

Foreign currency forward contracts

21.9

20.0

52.5

26.9

Gross value of derivatives

52.1

93.4

212.8

50.2

Gross amounts offset in the Consolidated Balance Sheet

(23.1)

(25.7)

(23.1)

(25.7)

Net value of derivatives

$29.0

$67.7

$189.7

$24.5

derivatives:

Derivative Assets

Derivative Liabilities

March 31

December 31

March 31

December 31

(millions)

2024

2023

2024

2023

Derivatives designated as hedging instruments

Foreign currency forward contracts

$8.6

$6.7

$2.2

$5.2

Interest rate swap agreements

167.6

146.5

Cross-currency swap derivative contracts

33.1

29.1

22.1

24.9

Derivatives not designated as hedging instruments

Foreign currency forward contracts

13.0

19.9

13.4

21.8

Gross value of derivatives

54.7

55.7

205.3

198.4

Gross amounts offset in the Consolidated Balance Sheets

(21.0)

(28.8)

(21.0)

(28.8)

Net value of derivatives

$33.7

$26.9

$184.3

$169.6

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


	Notional Values
	September 30		December 31

					Notional Values
						March 31	December 31
(millions)	2017		2016			2024	2023


Foreign currency forward contracts ~~(a)~~		$ 5,617		$ 4,317		$2,978		$3,745
Interest rate agreements		$ 1,450		$ 1,450
Interest rate swap agreements						1,500		1,500
Cross-currency swap derivative contracts						976		998

~~(a)~~

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

1614

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, intercompany loans, management fee and other payments. These forward contracts are designated as cash flow hedges. The ~~effective portions of the~~ changes in fair value of these contracts are recorded in accumulated other comprehensive income (loss) (“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~~Statements of Income as the underlying exposure being hedged. Cash flow hedged transactions impacting AOCI are forecasted to occur within the next ~~five years.~~

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

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

Third Quarter Ended

Nine Months Ended

September 30

September 30

(millions)

2017

2016

2017

2016

Unrealized gain (loss) recognized into AOCI

Foreign currency forward contracts

AOCI (equity)

$(118.8)

$(12.9)

$(192.4)

$(40.4)

Interest rate swap agreements

AOCI (equity)

-

1.4

-

(11.5)

Total

(118.8)

(11.5)

(192.4)

(51.9)

Gain (loss) recognized in income

Foreign currency forward contracts

Cost of sales

(0.9)

5.0

(11.7)

26.6

SG&A

(99.5)

(0.7)

(157.3)

(20.3)

Interest expense, net

7.4

-

16.1

2.9

Subtotal

(93.0)

4.3

(152.9)

9.2

Interest rate swap agreements

Interest expense, net

(1.8)

(1.6)

(5.4)

(4.8)

Total

$(94.8)

$2.7

$(158.3)

$4.4

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

Fair Value Hedges

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

In ~~January 2016,~~aggregate, the Company has entered into ana series of interest rate swap ~~agreement that converted~~agreements to convert $1.5 billion of its ~~$400 million 2.00%~~ debt from a fixed interest rate to a floating interest rate. ~~In January 2015, the Company entered into~~The fixed interest rates range from 1.3% to 4.8% and mature between 2026 and 2031. These interest rate swap agreements that converted its $300 million 1.55% debt and its $250 million 3.69% debt from fixed interest rates to floating interest rates. In May 2014, the Company entered into an interest rate swap agreement that converted its $500 million 1.45% debt from a fixed rate to a floating interest rate.

~~The interest rate swaps referenced above were~~are designated as fair value hedges.

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

Third Quarter Ended

Nine Months Ended

September 30

September 30

(millions)



2017

2016

2017

2016

Gain (loss) on derivative recognized income

Interest rate swap

Interest expense, net

$0.3

$(7.6)

$(0.1)

$6.1

Gain (loss) on hedged item recognized income

Interest rate swap

Interest expense, net

$(0.3)

$7.6

$0.1

$(6.1)

Carrying amount of the hedged liabilities

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

First Quarter Ended

Line item in which the hedged item is included

March 31

(millions)

2024

2023

2024

2023

Long-term debt

$1,333.6

$1,348.9

($168.7)

($153.4)

Net Investment Hedges

The Company designates its outstanding ~~€1,150~~€575 million ($~~1,356~~621 million at the end of the ~~third~~first quarter of ~~2017)~~2024) senior notes (“~~euronotes”~~Euronotes”) ~~and €200 million ($238 million at the end of the third quarter of 2017) Euro commercial paper~~ and related accrued interest as ~~hedges~~a hedge of ~~existing foreign currency~~its Euro denominated exposures ~~related to~~from the Company’s investments ~~the Company has~~ in certain ~~euro~~of its Euro denominated functional currency subsidiaries.

The Company entered into a series of Euro cross-currency swap derivative contracts maturing in 2026 and 2030. These cross-currency swap derivative contracts are designated as net investment hedge of the Company’s Euro denominated exposures from the Company’s investments in certain of its Euro denominated functional currency subsidiaries. The cross-currency swap derivative contracts exchange fixed-rate payments in one currency for fixed-rate payments in another currency. As of March 31, 2024, the Company had €625 million ($674 million) cross-currency swap derivative contracts outstanding as a hedge of the Company’s net investment in foreign operations. The changes in the spot rate of these instruments are recorded in AOCI in stockholders’ equity, partially offsetting the foreign currency translation adjustment of the Company’s related net investment that is also recorded in AOCI. Any ineffective portions of net investment hedges are reclassified from AOCI into earnings during the period of change. The interest income or expense from these swaps are recorded in interest expense on the accompanying Consolidated Statements of Income consistent with the classification of interest expense attributable to the underlying debt.

During 2023, the Company entered into CNH cross-currency swap derivative contracts with a notional amount of CNH 1,094 million and CNH 1,098 million, respectively, both maturing in 2032. The cross-currency swap derivative contracts are designated as net investment hedges of its Chinese Yuan (“CNY”) denominated exposures from the Company’s investments in certain CNY denominated functional currency subsidiaries. The cross-currency swap derivative contracts exchange fixed-rate payments in USD for fixed-rate payments in CNH. As of March 31, 2024, the Company had in aggregate, CNH 2,192 million ($302 million) cross-currency swap derivative contracts outstanding as a hedge of the Company’s net investment in foreign operations. The changes in the spot rate of these instruments are recorded in AOCI in stockholders’ equity, partially offsetting the foreign currency translation adjustment of the Company’s related net investment that is also recorded in AOCI. The interest income or expense from these swaps is recorded in interest expense on the accompanying Consolidated Statements of Income consistent with the classification of interest expense attributable to the underlying debt.

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


	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									First Quarter Ended
									March 31
(millions)	2017		2016		2017		2016		2024		2023
Revaluation gains (losses), net of tax		$(50.9)		$(1.2)		$(103.7)		$(29.1)
Revaluation gain (loss), net of tax:
Euronotes										$2.5		($15.1)
Cross-currency swap derivative contracts										6.4		(1.6)
Total revaluation gain (loss), net of tax										$8.9		($16.7)

Derivatives Not Designated as Hedging Instruments

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

Effect of all Derivative Instruments on Income

The ~~impact on earnings from~~gain (loss) of all derivative ~~contracts that are not designated as hedging~~ instruments ~~was as follows:~~

Third Quarter Ended

Nine Months Ended

September 30

September 30
(millions)



2017

2016

2017

2016

Gain (loss) recognized in income

Foreign currency forward contracts

SG&A

$(29.4)

$(12.0)

$(38.1)

$(27.3)

Interest expense, net

(0.2)

1.0

(3.5)

(2.1)

Total

$(29.6)

$(11.0)

$(41.6)

$(29.4)

~~The amounts~~ recognized in ~~SG&A above offset the earnings impact~~product and equipment cost of ~~the related foreign currency denominated assets~~sales (“COS”), selling, general and ~~liabilities. The amounts recognized in~~administrative expenses (“SG&A”) and interest expense, above represent the component of the hedging gains (losses) attributable to the difference between the spot and forward rates of the hedges as a result of interest rate differentials. The losses recognized in 2017 primarily relate to movements in the Euro rates.net (“interest”) is summarized below:


	First Quarter Ended
	March 31
	2024				2023
(millions)		COS	SG&A	Interest		COS	SG&A	Interest
Gain (loss) on derivatives designated as hedging instruments:
Foreign currency forward contracts
Amount of gain (loss) reclassified from AOCI to income		$-	$0.7	$-		$5.3	($6.0)	$-
Amount excluded from the assessment of effectiveness recognized in earnings based on changes in fair value		-	-	-		-	-	2.0
Interest rate swap agreements
Amount of (loss) gain reclassified from AOCI to income		-	-	(0.5)		-	-	(0.5)

Gain (loss) on derivatives not designated as hedging instruments:
Foreign currency forward contracts
Amount of gain (loss) recognized in income		-	0.4	-		-	(24.6)	-
Total gain (loss) of all derivative instruments		$-	$1.1	($0.5)		$5.3	($30.6)	$1.5

1816

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. Refer to Note 8 for additional information related to the Company’s derivatives and hedging transactions. Refer to Note 13 for additional information related to the Company’s pension and postretirement benefits activity.

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 13 for additional information related to the Company’s pension and postretirement benefits activity.benefits:


	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									First Quarter Ended
									March 31
(millions)	2017		2016		2017		2016		2024		2023
Derivative and Hedging Instruments
Unrealized gains (losses) on derivative & hedging instruments
Unrealized gain (loss) on derivative and hedging instruments
Amount recognized in AOCI		$(118.8)		$(11.5)		$(192.4)		$(51.9)		$6.6		($5.1)
(Gains) losses reclassified from AOCI into income
Cost of sales		0.9		(5.0)		11.7		(26.6)
(Gain) loss reclassified from AOCI into income
COS										-		(5.3)
SG&A		99.5		0.7		157.3		20.3		(0.7)		6.0
Interest (income) expense, net		(5.6)		1.6		(10.7)		1.9		0.5		(1.5)
		94.8		(2.7)		158.3		(4.4)
										(0.2)		(0.8)
Other activity		(0.6)		0.1		(0.1)		0.1		-		0.1
Tax impact		3.8		4.6		5.1		16.0		(1.3)		1.1
Net of tax		$(20.8)		$(9.5)		$(29.1)		$(40.2)		$5.1		($4.7)


Pension and Postretirement Benefits
Amount reclassified from AOCI into income
Actuarial losses		11.3		10.8		33.3		32.6
Prior service costs		(6.1)		(2.0)		(18.1)		(6.0)
Postretirement benefits changes		-		50.0		-		50.0
		5.2		58.8		15.2		76.6
Settlement charge										$0.4		$0.6
Amortization of losses and prior period service credits, net										1.7		1.6
										2.1		2.2
Other activity										0.9		(1.6)
Tax impact		(3.9)		(22.3)		(7.0)		(29.0)		(0.7)		(0.4)
Net of tax		$1.3		$36.5		$8.2		$47.6		$2.3		$0.2

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

Third Quarter Ended

Nine Months Ended

September 30

September 30

2017

2016

2017

2016
(millions)

Derivative losses (gains) reclassified from AOCI into income, net of tax

$72.7

$(2.0)

$120.3

$
(3.5)

Pension and postretirement benefits net actuarial losses

and prior services costs reclassified from AOCI into income, net of tax

$1.3

$5.6

$8.2

$
16.7


	First Quarter Ended
	March 31
	2024		2023
(millions)
Derivative (gain) loss reclassified from AOCI into income, net of tax		($0.1)		($0.6)

Pension and postretirement benefits amortization of losses and prior period service
credits, net and settlement charge, reclassified from AOCI into income, net of tax		2.3		0.2

1917

10. SHAREHOLDERS’ EQUITY

Share Repurchase Authorization

In February 2015 and November 2022, the Company’s Board of Directors authorized the repurchase of up to ~~20 million~~20,000,000 and 10,000,000, respectively, additional shares of its common stock, including shares to be repurchased under Rule 10b5–1. As of ~~September 30, 2017, 12,358,110~~March 31, 2024, 12,083,711 shares remained to be repurchased under the Company’s repurchase authorization. The Company intends to repurchase all shares under its authorization, for which no expiration date has been established, in open market or privately negotiated transactions, subject to market conditions.

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

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

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

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

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

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

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

Share Repurchases

During the first ~~nine months~~quarter of ~~2017,~~2024, the Company reacquired ~~4,614,646~~921,618 shares of its common stock, of which ~~4,414,416~~833,386 related to share repurchases through open market ~~or private purchases, including the February 2017 ASR discussed above,~~ and ~~200,230~~88,232 related to shares withheld for taxes on the exercise of stock options and the vesting of stock awards and units.

During ~~2016,~~the first quarter of 2023, the Company reacquired ~~6,483,198~~66,862 shares of its common stock ~~of which 6,126,033 related to share repurchases through open market or private purchases, including the February 2016 ASR discussed above, and 357,165~~ related to shares withheld for taxes on the exercise of stock options and the vesting of stock awards and units.

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:



	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									First Quarter Ended
									March 31
(millions, except per share)	2017		2016		2017		2016		2024		2023


Net income attributable to Ecolab		$392.4		$374.1		$942.5		$863.3		$412.1		$233.4


Weighted-average common shares outstanding
Basic		289.0		291.6		289.8		292.8		285.7		284.6
Effect of dilutive stock options and units		4.4		4.1		4.4		4.3		2.1		1.3
Diluted		293.4		295.7		294.2		297.1		287.8		285.9


Earnings attributable to Ecolab per common share
Basic EPS		$ 1.36		$ 1.28		$ 3.25		$ 2.95		$1.44		$0.82
Diluted EPS		$ 1.34		$ 1.27		$ 3.20		$ 2.91		$1.43		$0.82

Anti-dilutive securities excluded from the computation of EPS		0.1		1.7		1.7		1.7

Anti-dilutive securities excluded from the computation of diluted EPS										2.4		4.6

Amounts do not necessarily sum due to rounding.

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

12. INCOME TAXES

The Company’s tax rate was ~~24.6%~~9.2% and ~~25.5% for the third quarter of 2017 and 2016, respectively, and 21.7% and 24.7%~~18.0% for the first ~~nine months~~quarter of ~~2017~~2024 and ~~2016,~~2023, respectively. The change in the Company’s tax rate for the ~~third~~first quarter of ~~2017~~2024 compared to the ~~third~~first quarter of ~~2016~~2023 was ~~primarily~~ driven ~~by global tax planning strategies and geographic mix. The change in the Company’s tax rate for the first nine months of 2017 compared to first nine months of 2016 was~~ primarily ~~driven~~ by the ~~tax rate~~ impact of discrete tax items ~~with lesser impacts from global tax planning strategies~~ and ~~geographic mix.~~special (gains) and charges. Further information related to special (gains) and charges is included in Note 2.

The Company recognized ~~net expenses related to discrete tax items of $8.3 million and~~ net tax benefits related to discrete tax items of ~~$24.2~~$48.2 million during the third quarter and first nine months of 2017, respectively. The third quarter net expense was driven primarily by recognizing adjustments from filing the Company’s 2016 U.S. federal income tax return and international adjustments due to changes in ~~estimates, partially offset by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in state tax matters. Net benefits for~~ the first ~~nine months~~quarter of ~~2017 was also impacted by the recognition~~2024. This included a tax benefit of ~~$29.2~~$41.9 million ofassociated with transferring certain intangible property between affiliates and $8.6 million associated with share-based compensation excess tax ~~benefits related to employee share-based payments (resulting~~benefits. The remaining net expense of $2.3 million is from other income tax adjustments including the ~~adoption~~impact of ~~a new accounting standard as discussed~~changes in ~~Note 1).~~tax laws, audit settlements, and other changes in estimates.

The Company recognized net ~~expenses~~tax benefits related to discrete tax items of ~~$4.5~~$4.0 million and $3.6 million during the third quarter and first nine months of 2016, respectively. Third quarter net expense was driven primarily by recognizing adjustments from filing the Company’s 2015 U.S. federal income tax return, partially offset by settlement of international tax matters and remeasurement of certain deferred tax assets and liabilities resulting from the application of an updated tax rate in ~~an international jurisdiction. Net expense related to discrete tax items for~~ the first ~~nine months~~quarter of ~~2016 was also impacted by adjustments~~2023 primarily due to ~~deferred tax asset and liability positions and the release of reserves for~~changes in uncertain tax positions, ~~due~~prior year return adjustments, repricing of deferred tax balances, and other changes in estimates.

The Organization for Economic Co-operation’s (“OECD”) global minimum tax regime (“Pillar Two”) became effective in certain countries where the Company operates starting in 2024. As such, an estimate of Pillar Two tax has been considered within the provision for income taxes. The Company continues to monitor these legislative developments, but based on information available does not anticipate material impacts to the ~~expiration of statute of limitations in non-U.S. jurisdictions.~~2024 financial statements.

13. 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 pension 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 also provides postretirement health care and life insurance benefits to certain U.S. employees and retirees.

The components of net periodic pension and postretirement health care benefit ~~costs~~expense for the ~~third~~first quarter ended ~~September 30~~March 31 are as follows:


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

													U.S.				International				U.S. Postretirement
													Pensions				Pensions				Benefits
(millions)	2017		2016		2017		2016		2017		2016		2024		2023		2024		2023		2024		2023
Service cost		$17.5		$16.8		$7.7		$7.0		$0.7		$0.8		$11.6		$10.2		$4.9		$5.4		$0.1		$0.1
Interest cost on benefit obligation		20.9		20.4		7.0		8.0		1.5		2.0		21.8		22.0		12.4		11.4		1.3		1.4
Expected return on plan assets		(37.4)		(35.9)		(13.9)		(13.3)		(0.1)		(0.2)		(37.7)		(36.3)		(12.5)		(13.8)		-		-
Recognition of net actuarial (gain) loss		7.2		7.7		4.5		3.6		(0.6)		(0.4)
Amortization of prior service
cost (benefit)		(1.7)		(1.7)		(0.2)		(0.2)		(4.2)		(0.1)
Recognition of net actuarial loss (gain)														1.5		-		2.2		3.5		(0.8)		(0.8)
Amortization of prior service benefit														(1.1)		(1.0)		(0.1)		(0.1)		-		-
Curtailments and settlements														0.4		0.7		-		-		-		(0.1)
Total expense (benefit)		$6.5		$7.3		$5.1		$5.1		$(2.7)		$2.1		($3.5)		($4.4)		$6.9		$6.4		$0.6		$0.6

~~The~~Service cost is included as employee compensation cost in either cost of sales or selling, general and administrative expenses on the Consolidated Statements of Income based on employee roles, while non-service components are included in other (income) expense in the Consolidated Statements of ~~net periodic pension and postretirement health care benefit costs for the nine months ended September 30 are as follows:~~Income.

U.S.

International

U.S. Postretirement

Pension

Pension

Health Care
(millions)

2017

2016

2017

2016

2017

2016
Service cost

$52.6

$50.3

$23.0

$20.9

$2.0

$2.3
Interest cost on benefit obligation

62.6

61.2

21.1

24.0

4.4

6.1
Expected return on plan assets

(112.3)

(107.7)

(41.7)

(40.0)

(0.4)

(0.6)
Recognition of net actuarial (gain) loss

21.5

23.1

13.6

10.7

(1.8)

(1.2)
Amortization of prior service

cost (benefit)

(5.1)

(5.2)

(0.5)

(0.6)

(12.5)

(0.2)
Total expense (benefit)

$19.3

$21.7

$15.5

$15.0

$(8.3)

$6.4

As of ~~September 30, 2017,~~March 31, 2024, the Company is in compliance with all funding requirements of each of its ~~U.S. pension and postretirement health care~~defined benefit plans. ~~In September 2017,~~

During the first quarter of 2024, the Company made ~~an $80 million voluntary contribution to its non-contributory qualified U.S. pension plan. During the first nine months~~contributions of ~~2017, the Company made payments of $6~~$2 million to its U.S. non-contributory non-qualified defined benefit plans and estimates it will ~~make~~contribute an additional ~~payments of approximately $1~~$7 million to such plans during the remainder of ~~2017.~~2024.

~~The~~During the first quarter of 2024, the Company ~~contributed $33~~made contributions of $10 million to its international pension ~~benefit~~ plans ~~during the first nine months of 2017. The Company~~and estimates it will contribute ~~approximately~~an additional $35 million to such plans during the remainder of 2024.

During the first quarter of 2024, the Company made contributions of $3 million to its U.S. postretirement health care plans and estimates it will contribute an additional $9 million to such plans during the remainder of ~~2017.~~2024.

~~During~~

14. REVENUES

Revenue Recognition

Product and Sold Equipment

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

On June 3, 2020, the Company completed the separation of its Upstream Energy business (“ChampionX”). The Company entered into an agreement with ChampionX to provide, receive or transfer certain products for a transitionary period. Transitionary period sales of product to ChampionX under the agreement are recorded in product and equipment sales in the Corporate segment along with the related cost of sales, while purchases from ChampionX are recorded in inventory. The remaining sales to ChampionX are recorded in product and equipment sales in the Global Industrial segment along with the related cost of sales.

Service and Lease Equipment

Service and lease equipment revenue is generated from providing services or leasing equipment to customers. Service offerings include installing or repairing certain types of equipment, activities that supplement or replace headcount at the customer location, or fulfilling deliverables included in the contract. Global Industrial segment services are associated with water treatment and paper process applications. Global Institutional & Specialty segment services include cleaning and sanitizing programs and wash process solutions. Global Healthcare & Life Sciences segment services include pharmaceutical, personal care, infection and containment control solutions. Revenues included in Global Pest Elimination primarily relate to services designed to detect, eliminate and prevent pests. Service revenue is recognized over time utilizing an input method and aligns with when the services are provided. Typically, revenue is recognized over time using costs incurred to date because the effort provided by the field selling and service organization represents services provided, which corresponds with the transfer of control. Revenue recognized from leased equipment primarily relates to warewashing and water treatment equipment recognized on a straight-line basis over the length of the lease contract pursuant to Topic 842 Leases.

The Company’s operating lease revenue was as follows:


	First Quarter Ended
	March 31
(millions)	2024		2023
Operating lease revenue*		$133.2		$126.4

*Includes immaterial variable lease revenue

The following table shows principal activities, separated by reportable segments, from which the Company generates its revenue. The Corporate segment includes sales to ChampionX under the transitional supply agreement entered into as part of the ChampionX Separation. For more information about the Company’s reportable segments, refer to Note 15.

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


	First Quarter Ended
	March 31
(millions)	2024		2023
Global Industrial
Product and sold equipment		$1,612.5		$1,592.3
Service and lease equipment		226.7		216.8
Global Institutional & Specialty
Product and sold equipment		1,021.4		920.8
Service and lease equipment		245.3		208.0
Global Healthcare & Life Sciences
Product and sold equipment		352.6		352.6
Service and lease equipment		27.3		27.1
Global Pest Elimination
Product and sold equipment		-		-
Service and lease equipment		266.1		243.4
Corporate
Product and sold equipment		-		10.6
Service and lease equipment		-		-
Total
Total product and sold equipment		$2,986.5		$2,876.3
Total service and lease equipment		$765.4		$695.3

Net sales at public exchange rates by geographic region for the first ~~nine months~~quarter ended March 31 are as follows:


	Global				Global Institutional				Global Healthcare				Global Pest
	Industrial				& Specialty				& Life Sciences				Elimination				Corporate
	2024		2023		2024		2023		2024		2023		2024		2023		2024		2023

United States		$793.8		$793.0		$883.2		$786.0		$149.8		$162.5		$181.7		$165.9		$-		$9.6
Europe		374.6		377.4		160.5		146.5		184.5		174.4		43.2		38.7		-		0.7
Asia Pacific		230.7		228.4		59.3		56.8		23.4		19.6		7.6		6.9		-		-
Latin America		189.6		158.2		49.9		41.3		5.5		5.7		14.5		13.6		-		0.3
Greater China		97.7		96.9		44.7		35.6		9.4		10.8		14.7		14.0		-		-
India, Middle East and Africa		99.2		104.4		15.5		14.7		5.4		5.3		1.7		1.9		-		-
Canada		53.6		50.8		53.6		47.9		1.9		1.4		2.7		2.4		-		-
Total		$1,839.2		$1,809.1		$1,266.7		$1,128.8		$379.9		$379.7		$266.1		$243.4		$-		$10.6

Net sales by geographic region were determined based on origin of ~~2017,~~sale. The United States made up 54% of total revenues during both the ~~Company made payments~~first quarter ended March 31, 2024 and 2023.

Accounts Receivable and Allowance for Expected Credit Losses

Accounts receivable are carried at the invoiced amounts, less an allowance for expected credit losses, and generally do not bear interest. The Company’s allowance for expected credit losses estimates the amount of ~~$12~~expected future credit losses by analyzing accounts receivable balances by age and applying historical write-off and collection experience. The Company’s estimates separately consider macroeconomic trends, specific circumstances and credit conditions of customer receivables. Account balances are written off against the allowance when it is determined the receivable will not be recovered.

The Company’s allowance for expected return of products shipped and credits related to pricing or quantities shipped was $73.5 million and $71.7 million as of March 31, 2024 and December 31, 2023, respectively. Returns and credit activity is recorded directly as a reduction to ~~its U.S. postretirement health care benefit plans and estimates it will make additional payments~~revenue.

The following table summarizes the activity in the allowance for expected credit losses:


	First Quarter Ended
	March 31
(millions)	2024		2023

Beginning balance		$77.3		$71.9
Bad debt expense		13.2		14.7
Write-offs		(10.6)		(7.9)
Other (a)		(0.9)		(1.3)
Ending balance		$79.0		$77.4

(a)	Other amounts are primarily the effects of changes in currency translations.

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 ~~approximately $4 million to such plans~~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 ~~remainder of 2017.~~subsequent quarter.

The ~~Company’s U.S. postretirement health care costs decreased in 2017 relative to~~following table summarizes the costs incurred in the comparable period of the prior year as a result of moving the U.S. postretirement healthcare plans to a Retiree Exchange approach for post-65 retiree medical coverage beginning in 2018 and the merger of Nalco U.S. postretirement health care plan with the Ecolab U.S. postretirement plan.contract liability activity:


	First Quarter Ended
	March 31
(millions)	2024		2023

Contract liability as of beginning of the year		$110.9		$116.5

Revenue recognized in the period from:
Amounts included in the contract liability at the beginning of the year		(110.9)		(116.5)

Increases due to billings excluding amounts recognized as revenue during the period ended		118.0		107.5

Contract liability as of end of period		$118.0		$107.5

2221

~~14.~~15. OPERATING SEGMENTS

The Company’s organizational structure consists of global business unit and global regional leadership teams. The Company’s eight 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~~four reportable segments: Global Industrial, Global Institutional & Specialty, Global Healthcare & Life Sciences and Global ~~Energy. The~~Pest Elimination.

Comparability of Reportable Segments

Effective January 1, 2024, the Company’s former Textile Care and Colloidal Technologies Group (“CTG”) operating segments ~~that do not meet~~are now part of the ~~quantitative criteria~~Water operating segment which continues to ~~be separately~~remain in the Global Industrial reportable segment. Additionally, the Pest Elimination operating segment, formerly aggregated with the Textile Care and CTG operating segments within Other, is now reported ~~have been combined into~~as the ~~Other~~stand-alone Global Pest Elimination reportable segment. The Company ~~provides similar information for~~made other immaterial changes, including the ~~Other segment as~~movement of certain customers and cost allocations between reportable segments. These changes are presented in "Other" columns of the ~~Company considers the information regarding its underlying operating segments as useful in understanding its consolidated results.~~table below. Prior period amounts have been recast to conform with current period presentation.

~~Comparability of Reportable Segments~~

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

~~Effective~~2024, rather than the 2023 established rates. The difference between the fixed currency exchange rates and the actual currency exchange rates is reported within the “Effect of foreign currency translation” row in the first quarter of 2017, the Company established the Life Sciences operating segment, to align with the strategy for growth in the pharmaceutical and personal care manufacturing operations. Life Sciences is comprised of operations previously recorded in the Food & Beverage and Healthcare operating segments and has been aggregated into the Global Industrial reportable segment. The Company also made immaterial changes to its reportable segments, including the movement of certain customers and cost allocations between reportable segments. These changes are presented in "Segment Change" column of the table below.following table.

The impact of the preceding changes on previously reported full year ~~2016~~2023 reportable segment net sales and operating income is summarized as follows:


	December 31, 2016
			Fixed
	Values at		Currency		Segment	Values at

							December 31, 2023

							2023 Reported					Fixed	2023 Reported
							Valued at 2023				Currency		Valued at 2024
(millions)	2016 Rates		Rate Change		Change	2017 Rates	Management Rates		Other		Rate Change		Management Rates
Net Sales
Global Industrial		$ 4,617.1		$ 6.9	$ 63.2	$ 4,687.2		$7,193.1		$407.3		$40.1		$7,640.5
Global Institutional		4,495.6		7.7	(63.2)	4,440.1
Global Energy		3,035.8		40.0	-	3,075.8
Global Institutional & Specialty								4,994.0		-		20.6		5,014.6
Global Healthcare & Life Sciences								1,576.9		-		30.6		1,607.5
Global Pest Elimination								-		1,061.5		8.7		1,070.2
Other		806.5		(4.8)	-	801.7		1,442.3		(1,442.3)		-		-
Corporate								69.1		(26.5)		0.1		42.7
Subtotal at fixed currency rates		12,955.0		49.8	-	13,004.8		15,275.4		-		100.1		15,375.5
Effect of foreign currency translation		197.8		(49.8)	-	148.0		44.8				(100.1)		(55.3)
Consolidated reported GAAP net sales		$ 13,152.8		$ -	$ -	$ 13,152.8		$15,320.2		$-		$-		$15,320.2


Operating Income
Global Industrial		$ 703.0		$ (0.9)	$ 17.9	$ 720.0		$1,080.7		$39.0		$2.3		$1,122.0
Global Institutional		966.7		3.0	(19.2)	950.5
Global Energy		337.1		7.9	1.7	346.7
Global Institutional & Specialty								823.0		14.9		3.9		841.8
Global Healthcare & Life Sciences								160.0		(6.7)		7.5		160.8
Global Pest Elimination								-		209.0		1.4		210.4
Other		148.1		(2.5)	(0.4)	145.2		255.0		(255.0)		-		-
Corporate		(272.1)		(0.5)	-	(272.6)		(331.7)		(1.2)		0.1		(332.8)
Subtotal at fixed currency rates		1,882.8		7.0	-	1,889.8		1,987.0		-		15.2		2,002.2
Effect of foreign currency translation		32.2		(7.0)	-	25.2		5.3		-		(15.2)		(9.9)
Consolidated reported GAAP operating income		$ 1,915.0		$ -	$ -	$ 1,915.0		$1,992.3		$-		$-		$1,992.3

2322

Reportable Segment Information

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


	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									First Quarter Ended
									March 31
(millions)	2017		2016		2017		2016		2024		2023
Net Sales
Global Industrial		$1,248.1		$1,202.1		$3,586.5		$3,468.4		$1,841.7		$1,808.2
Global Institutional		1,225.1		1,149.2		3,524.3		3,315.0
Global Energy		796.7		771.2		2,346.1		2,305.6
Other		221.7		209.2		633.8		598.1
Global Institutional & Specialty										1,270.3		1,131.2
Global Healthcare & Life Sciences										382.9		386.1
Global Pest Elimination										266.8		244.6
Corporate										-		10.7
Subtotal at fixed currency rates		3,491.6		3,331.7		10,090.7		9,687.1		3,761.7		3,580.8
Effect of foreign currency translation		71.7		54.4		96.9		113.6		(9.8)		(9.2)
Consolidated reported GAAP net sales		$3,563.3		$3,386.1		$10,187.6		$9,800.7		$3,751.9		$3,571.6


Operating Income
Global Industrial		$207.4		$204.1		$501.9		$510.1		$265.0		$219.8
Global Institutional		274.2		262.1		726.1		697.8
Global Energy		89.7		102.6		236.1		244.9
Other		44.0		40.4		110.9		108.2
Global Institutional & Specialty										248.0		130.1
Global Healthcare & Life Sciences										37.0		35.4
Global Pest Elimination										48.8		44.5
Corporate		(46.9)		(45.0)		(198.9)		(222.9)		(79.8)		(77.4)
Subtotal at fixed currency rates		568.4		564.2		1,376.1		1,338.1		519.0		352.4
Effect of foreign currency translation		11.4		9.9		16.0		20.0		(1.1)		(0.8)
Consolidated reported GAAP operating income		$579.8		$574.1		$1,392.1		$1,358.1		$517.9		$351.6

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

Consistent with the Company’s internal management reporting, Corporate amounts in the table above include sales to ChampionX in accordance with the transitional supply agreement entered into with the Transaction, as discussed in Note 14. Corporate also includes intangible asset amortization specifically from the Nalco ~~merger~~and Purolite acquisitions and special (gains) and charges, as discussed in Note 2, that are not allocated to the Company’s reportable segments.

~~15.~~16. COMMITMENTS AND CONTINGENCIES

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

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

Insurance

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

Litigation and Environmental Matters

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

The Company currently believes that such future charges related to suits and legal claims, if any, would not have a material adverse effect on the Company’s consolidated financial position.

2423

TPC Group Litigation

On November 27, 2019, a Butadiene production plant owned and operated by TPC Group, Inc. in Port Neches, Texas, experienced an explosion and fire that resulted in personal injuries, the release of chemical fumes and extensive property damage to the plant and surrounding areas in and near Port Neches, Texas.

Nalco Company LLC, a subsidiary of Ecolab, supplied process chemicals to TPC used in TPC’s production processes. Nalco did not operate, manage, maintain or control any aspect of TPC’s plant operations.

In connection with its provision of process chemicals to TPC, Nalco was named in numerous lawsuits stemming from the plant explosion. Nalco has been named a defendant, along with TPC and other defendants, in multi-district litigation (“MDL”) proceedings pending in Orange County, Texas, alleging among other things claims for personal injury, property damage and business losses (In re TPC Group Litigation – A2020-0236-MDL, Orange County, Texas). Numerous other lawsuits were filed against Nalco, including TPC Group v. Nalco, E0208239, Jefferson County, Texas, a subrogation claim by TPC’s insurers seeking reimbursement for property damage losses. Over 5,000 plaintiffs (including the subrogation matter) asserted claims against Nalco. All claims have been consolidated for pretrial purposes into the MDL.

All of these cases make similar allegations and seek damages for personal injury, property damage, business losses and other damages, including exemplary damages. Due to the large number of plaintiffs, the early stage of the litigation and the fact that many of the claims do not specify an amount of damages, any estimate of any loss or range of losses cannot be made at this time.

On June 1, 2022, TPC and seven of its affiliated companies filed for bankruptcy under Chapter 11 (Case No. 22-10493-CTG, United States Bankruptcy Court for the District of Delaware). In connection with the bankruptcy cases, TPC disclosed an estimated range of its liability related to the Port Neches incident to individuals and homeowners (including subrogation claims) of approximately $152 million to $520 million. As part of their bankruptcy plan, TPC and its affiliates announced a settlement which allows the MDL plaintiffs a $500 million claim solely for purposes of claim allowance in the chapter 11 case and distribution of value pursuant to TPC’s bankruptcy plan. Other key terms of the settlement between TPC and the MDL plaintiffs include the establishment of a settlement trust for the benefit of certain general unsecured creditors, which is funded with $30 million and the assignment of TPC’s claims and causes of action, if any, against certain third parties, including Nalco, related to the TPC plant explosion. As part of the bankruptcy process, TPC and its debtor affiliates received a discharge of all MDL related claims, as did certain non-debtor affiliates to the extent third parties did not opt out of the non-debtor releases. As a result, TPC is no longer a defendant in the MDL. Nalco opted out of these releases, preserving any direct causes of action it may have against non-debtors. Furthermore, the allowance of the $500 million claim should have no effect on any claims or defenses asserted against or by Nalco in the MDL litigation. On December 1, 2022, the bankruptcy court confirmed the TPC bankruptcy plan, including the approval of the settlement and establishment of the aforementioned settlement trust. On December 16, 2022, the TPC bankruptcy plan went effective. As a result of the bankruptcy, the MDL was stayed. The stay was lifted in the fourth quarter of 2023 and various activities advancing discovery have resumed.

The Company believes the claims asserted against Nalco in the lawsuits stemming from the TPC plant explosion are without merit and intends to defend the claims vigorously. The Company also believes any potential loss should be covered by insurance subject to deductibles. However, the Company cannot predict the outcome of these lawsuits, the involvement the Company might have in these matters in the future or the potential for future litigation.

Environmental Matters

The Company is currently participating in environmental assessments and remediation at approximately 4525 locations, ~~excluding recently acquired Anios locations which are currently under review. The~~the majority of ~~these locations~~which are in the U.S. ~~Environmental~~, and environmental liabilities have been accrued reflecting management’s best estimate of future costs. Potential insurance reimbursements are not anticipated in the Company’s accruals for environmental liabilities.

~~Matters Related to Deepwater Horizon Incident Response~~

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

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

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

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

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

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

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

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

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

2524

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

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

~~16.~~17. NEW ACCOUNTING PRONOUNCEMENTS

Standards That Are Not Yet Adopted:

Date of

~~Required~~Date of

Effect on the

Standard

~~Date of~~Issuance

Description

~~Date of~~Adoption

~~Effect on the~~

Financial Statements

~~Standard~~

~~Issuance~~

~~Description~~

~~Adoption~~

~~Financial Statements~~

ASU 2023-09 Income taxes (Topic 740): Improvements to Income Tax Disclosures

December 2023

The amendments in this Update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold.

January 1, 2025

~~Standards that are not yet adopted:~~

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

~~August 2017~~

Amends the hedge accounting recognition and presentation requirements in ASC 815. Simplifies the guidance on the application of hedge accounting and the requirements for hedge documentation and effectiveness testing. Requires presentation of all items that affect earnings in the same income statement line as the hedged item.

~~January 1, 2019~~

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

additional disclosure requirements.

ASU ~~2017-09~~2023-07 - ~~Compensation - Stock Compensation~~Segment Reporting (Topic ~~718)~~280): ~~Scope of Modification Accounting~~Improvements to Reportable Segment Disclosures

~~August 2017~~November 2023

~~Clarifies~~The amendments in this ASU are to improve the disclosures about reportable segments and add more detailed information about a reportable segment’s expenses. The amendments in the ASU require public entities to disclose on an annual and interim basis significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, other segment items by reportable segment, the title and position of the CODM, and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU does not change the definition of ~~what's considered~~ a ~~substantive modification related~~segment, the method for determining segments, the criteria for aggregating operating segments into reportable segments, or the current specifically enumerated segment expenses that are required to ~~a change in terms or conditions of a share-based payment award and when it's appropriate~~be disclosed.

Effective for annual periods beginning after December 15, 2023

Entities are required to apply ~~modification accounting. The current definition of "modification" is too broad, resulting in diverse interpretations of what's considered~~the disclosure amendments on a ~~substantive modification.~~

~~January 1, 2018~~

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

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

~~March 2017~~

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

~~January 1, 2018~~

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

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

~~February 2017~~

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

~~January 1, 2018~~

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

~~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. The Company is currently evaluating the impact of adoption.~~

~~ASU 2017-01--Business Combinations (Topic 805): Clarifying the Definition of a Business~~

~~January 2017~~

~~Clarifies the definition of a business and provides guidance on whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.~~

~~January 1, 2018~~

~~The ASU must be applied prospectively on or after the effective date, and no disclosures are required at transition. The Company is currently evaluating the impact of adoption.~~

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

18. Subsequent Events

On April 27, 2024, the Company reached a definitive agreement to sell its global surgical solutions business for total consideration of $950 million in cash, subject to certain working capital and other purchase price adjustments. The sale is expected to close in the second half of 2024, subject to regulatory clearances and other customary closing conditions. The Company expects to record an associated pre-tax gain within special (gains) and charges in the Consolidated Statements of Income.

2625

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

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

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

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

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

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

~~(a)~~

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

~~(b)~~

The Company has reached conclusions on certain key accounting assessments related to the standard and is finalizing the related accounting policies. The Company’s focus on the identification and evaluation of performance obligations within certain contracts has identified additional performance obligations within contracts which relate to providing services to customers. These additional performance obligations, when aggregated with the service revenue that is currently reported, represent more than 10% of consolidated net sales. Upon adoption of the new standard, service revenues are expected to be reported separately from product revenues. Additionally, the Company anticipates certain costs currently classified in Selling, General, and Administrative expenses will be reclassified as Cost of Sales as they are tied to satisfaction of a service performance obligation. In addition to expanded disclosures associated with the new standard, the Company is continuing to assess the impact on the consolidated financial statements. The Company currently intends to adopt the new standard using the full retrospective method on January 1, 2018, which is dependent upon the completion of the analysis of information necessary to restate prior period financial statements.


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

~~Standards that were adopted:~~

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

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

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

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

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

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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

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

Results of Review of Interim Financial Statements

We have reviewed the accompanying consolidatedbalance sheet ofEcolab Inc.and its subsidiaries(the “Company”) as of ~~September 30, 2017,~~March, 31, 2024, and the relatedconsolidated statements of income, ~~and~~ comprehensive income, ~~for the three-month~~equity and ~~nine-month periods ended September 30, 2017 and 2016 and the consolidated statement of~~ cash flows for the ~~nine-month~~three-month periods ended ~~September 30, 2017~~March 31, 2024 and ~~2016. These~~2023, including the related notes (collectively referred to as the “interim financialstatements”).Based on our reviews, we are not aware of any material modifications that should be made to the accompanying interim financialstatements ~~are~~forthem to be in conformity with accounting principles generally accepted in the ~~responsibility~~United States of ~~the Company’s management.~~America.

We ~~conducted our review~~have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)., the consolidated balance sheet of the Company as of December 31, 2023, and the related consolidated statements of income, comprehensive income, equity and cash flowsfor the year then ended (not presented herein), and in our report dated February 23, 2024, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet information as of December 31, 2023, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

Basis for Review Results

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

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

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





/s/ PricewaterhouseCoopers LLP
Minneapolis, Minnesota
May 2, 2024
~~PricewaterhouseCoopers LLP~~
~~Minneapolis, Minnesota~~
~~November 2, 2017~~

2926

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

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

The MD&A should be read in conjunction with both the unaudited consolidated financial information and related notes included in this Form 10-Q, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2023. This discussion contains various ~~“Non-GAAP~~Non-GAAP Financial ~~Measures”~~Measures and also contains various ~~“Forward-Looking Statements”~~Forward-Looking Statements within the meaning of the Private Securities Litigation Reform Act of 1995. We refer readers to the statements entitled “Non-GAAP Financial Measures” and “Forward-Looking Statements” located at the end of Part I of this report.

Comparability of Results

Impact of Acquisitions and Divestitures

Our non-GAAP financial measures for organic sales, organic operating income and organic operating income margin are at fixed currency and exclude the impact of special (gains) and charges, the results of our acquired businesses from the first twelve months post acquisition and the results of divested businesses from the twelve months prior to divestiture. As part of the separation of ChampionX in 2020, we entered into an agreement with ChampionX to provide, receive or transfer certain products for a transitionary period. Transitionary period sales of product to ChampionX under this agreement are recorded in product and equipment sales in the Corporate segment along with the related cost of sales. The remaining sales to ChampionX are recorded in product and equipment sales in the Global Industrial segment along with the related cost of sales. These transactions are removed from the consolidated results as part of the calculation of the impact of acquisitions and divestitures.

Comparability of Reportable Segments

Effective January 1, 2024, the former Textile Care and Colloidal Technologies Group (“CTG”) operating segments are now part of the Water operating segment which continues to remain in the Global Industrial reportable segment. Additionally, the Pest Elimination operating segment, formerly aggregated with the Textile Care and CTG operating segments within Other, is now reported as the stand-alone Global Pest Elimination reportable segment. We made other immaterial changes, including the movement of certain customers and cost allocations between reportable segments. After these changes, we have eight operating segments.

Fixed Currency Foreign Exchange Rates

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

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

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

~~Impact of Acquisitions and Divestitures~~

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

OVERVIEW OF THE ~~THIRD~~FIRST QUARTER ENDED ~~SEPTEMBER 30, 2017~~MARCH 31, 2024

Sales Performance

When comparing ~~third~~first quarter ~~2017~~2024 against ~~third~~first quarter ~~2016,~~2023, sales performance was as follows:

●

Reported net sales increased 5% to ~~$3,563~~$3,751.9 million ~~fixed currency sales~~ and ~~acquisition adjusted fixed currency~~organic sales increased 5% ~~and 3%, respectively. Hurricanes Harvey, Irma, and Maria are estimated to have had a negative 1% impact on fixed currency sales growth.~~

●

~~Fixed currency~~Organic sales for our Global Industrial segment increased 4%1% to ~~$1,248~~$1,815.6 million, ~~led by~~as growth in Food & Beverage and Water ~~and Food and Beverage.~~

more than offset the expected short-term decline in Paper sales.

●

~~Fixed currency~~Organic sales for our Global Institutional & Specialty segment increased 7%11% to ~~$1,225~~$1,252.3 million ~~acquisition adjusted fixed currency sales increased 2%, led by~~with double-digit growth in ~~Specialty.~~

both the Institutional and Specialty operating segments.

●

~~Fixed currency~~Organic sales for our Global ~~Energy~~Healthcare & Life Sciences segment ~~increased 3%~~decreased 1% to ~~$797~~$382.9 million ~~acquisition adjusted fixed currency~~as lower Healthcare sales ~~increased 4%, as strong growth in the well stimulation business and modest gains in the downstream business~~ were offset by ~~a decline~~growth in ~~our production business.~~

Life Sciences.

●

~~Fixed currency~~Organic sales for ~~our Other segment sales~~Global Pest Elimination increased 6%9% to ~~$222 million, driven by sales growth in Pest Elimination.~~

$266.8 million.

3027

Financial Performance

When comparing ~~third~~first quarter ~~2017~~2024 against ~~third~~first quarter ~~2016,~~2023, our financial performance was as follows:

●

Reported operating income increased 1%47% to ~~$580~~$517.9 million. ~~Excluding the impact of special (gains) and charges from both 2017 and 2016 reported results, adjusted~~Organic operating income ~~also~~ increased ~~1% and our adjusted fixed currency operating income also increased 1%~~44%. ~~Hurricanes are estimated to have negatively impacted adjusted fixed currency operating income growth by 3%.~~

●

Net income attributable to Ecolab increased 5%77% to ~~$392~~$412.1 million. Excluding the impact of special (gains) and charges and discrete tax items from both ~~2017~~2024 and ~~2016~~2023 reported results, our adjusted net income attributable to Ecolab increased 7%54%.

●

~~Diluted~~Reported diluted EPS ~~of $1.34~~ increased ~~6%.~~74% to $1.43. Excluding the impact of special (gains) and charges and discrete tax items from both ~~2017~~2024 and ~~2016~~2023 reported results, adjusted diluted EPS increased 7%52% to ~~$1.37~~$1.34 in the ~~third~~first quarter of ~~2017.~~

2024.

●

Our reported tax rate was ~~24.6%~~9.2% during the ~~third~~first quarter of ~~2017,~~2024, compared to ~~25.5%~~18.0% during the ~~third~~first quarter of ~~2016.~~2023. Excluding the tax rate impact of special (gains) and charges and discrete tax items from both ~~2017~~2024 and ~~2016~~2023 results, our adjusted tax rate was ~~23.3% and 25.2%~~19.9% during the ~~third~~first quarter of ~~2017 and 2016, respectively.~~

2024, compared to 19.8% during the first quarter of 2023.

RESULTS OF OPERATIONS

Net Sales


	Third Quarter Ended						Nine Months Ended
	September 30						September 30

													First Quarter Ended
													March 31
(millions)	2017		2016		Change		2017		2016		Change		2024		2023		Change
Product and equipment sales														$2,986.5		$2,876.3
Service and lease sales														765.4		695.3
Reported GAAP net sales		$3,563.3		$3,386.1	5	%		$10,187.6		$9,800.7	4	%		$3,751.9		$3,571.6	5	%
Effect of foreign currency translation		(71.7)		(54.4)				(96.9)		(113.6)				9.8		9.2
Non-GAAP fixed currency sales		$3,491.6		$3,331.7	5	%		$10,090.7		$9,687.1	4	%		$3,761.7		$3,580.8	5	%

Effect of acquisitions and divestitures														(44.1)		(24.0)
Non-GAAP organic sales														$3,717.6		$3,556.8	5	%

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

The percentage components of the period-over-period ~~2017~~2024 sales change are shown below:

Third Quarter Ended

Nine Months Ended

September 30

September 30
(percent)

2017

2017
Volume

2%

2%
Price changes

1

1
Acquisition adjusted fixed currency sales change

3

3
Acquisitions and divestitures

2

1
Fixed currency sales change

5

4
Foreign currency translation

0

0
Reported GAAP net sales change

5%

4%


	First Quarter Ended
	March 31
(percent)	2024
Volume		2	%
Pricing		3
Organic sales change		5
Acquisitions and divestitures		1
Fixed currency sales change		5
Foreign currency translation		-
Reported GAAP net sales change		5	%

Amounts do not necessarily sum due to rounding.

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


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

																	First Quarter Ended
																	March 31
																	2024				2023
																			Gross				Gross
(millions/percent)	COS		Margin		COS		Margin		COS		Margin		COS		Margin		COS		Margin		COS		Margin
Product and equipment cost of sales																		$1,679.2				$1,798.3
Service and lease cost of sales																		448.9				406.9
Reported GAAP COS and gross margin		$1,891.3	46.9	%		$1,737.2	48.7	%		$5,454.4	46.5	%		$5,153.8	47.4	%		$2,128.1	43.3	%		$2,205.2	38.3	%
Special (gains) and charges		0.3	0.0			-	-			26.2	0.2			61.9	0.6			1.6				3.2
Non-GAAP adjusted COS and gross margin		$1,891.0	46.9	%		$1,737.2	48.7	%		$5,428.2	46.7	%		$5,091.9	48.0	%		$2,126.5	43.3	%		$2,202.0	38.3	%

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

Our reported gross margin was ~~46.9%~~43.3% and ~~48.7% for the third quarter of 2017 and 2016, respectively. Our reported gross margin~~38.3% for the first ~~nine months~~quarter of ~~2017~~2024 and ~~2016 was 46.5%~~2023, respectively. Special (gains) and ~~47.4%, respectively.~~charges included in items impacting cost of sales are shown within the “Special (Gains) and Charges” table below.

Excluding the impact of special (gains) and charges within COS, ~~our third~~first quarter ~~2017~~2024 and 2023 adjusted gross margin was ~~46.9%~~43.3% and our adjusted gross margin for the first nine months of 2017 was 46.7%. These percentages compared against a third quarter 2016 adjusted gross margin of 48.7% and an adjusted gross margin of 48.0% for the first nine months of 2016.38.3%, respectively.

Our adjusted gross margin ~~decrease~~increased when comparing the ~~third~~first quarter of ~~2017~~2024 against the ~~third~~first quarter of ~~2016 and the comparable periods for the first nine months of 2017 and 2016 was driven primarily by higher~~2023 reflecting lower delivered product costs and ~~an increase in Global Energy, which more than offset pricing and cost savings.~~strong pricing.

Selling, General and Administrative Expense

Selling, general and administrative (“SG&A”) expenses as a percentage of sales were ~~30.5%~~28.7% for the ~~third~~first quarter of ~~2017~~2024 compared to ~~31.6% in 2016. For~~27.7% for the ~~nine month period, SG&A expenses were 32.3%~~first quarter of ~~sales in 2017 compared to 33.2% in 2016.The decreased~~2023. The SG&A ratio to sales ~~across~~in the ~~periods~~first quarter of 2024 increased as sales productivity was ~~driven primarily~~offset by ~~sales volume leverage and cost savings, which more than offset~~growth-oriented investments in the business.

Special (Gains) and Charges

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


	First Quarter Ended
	March 31
(millions)	2024		2023
Cost of sales
Restructuring activities		$1.6		$3.2
Cost of sales subtotal		1.6		3.2

Special (gains) and charges
Restructuring activities		18.1		12.6
Acquisition and integration activities		2.5		5.0
Other		7.6		6.9
Special (gains) and charges subtotal		28.2		24.5

Total special (gains) and charges		$29.8		$27.7

Third Quarter Ended

Nine Months Ended

September 30

September 30
(millions)

2017

2016

2017

2016
Cost of sales

Restructuring activities

$-

$-

$2.2

$0.9
Acquisition and integration costs

0.3

-

12.9

-
Energy related charges

-

-

-

51.0
Other

-

-

11.1

10.0
Subtotal

0.3

-

26.2

61.9

Special (gains) and charges

Restructuring activities

4.1

(7.7)

34.6

(6.8)
Acquisition and integration costs

1.8

1.7

12.7

5.0
Energy related charges

-

-

-

12.6
Venezuela related gain

(3.2)

-

(8.5)

(7.8)
Other

2.2

9.2

9.1

32.7
Subtotal

4.9

3.2

47.9

35.7

Total special (gains) and charges

$5.2

$3.2

$74.1

$97.6

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

Restructuring activities

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

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

Combined Program

In November 2022, we approved a Europe cost savings program. In February 2023, we expanded our previously announced Europe cost savings program to focus on its Institutional and Healthcare businesses in other regions. In connection with the second quarter of 2017, we commenced restructuring and other cost-saving actions in order to streamline our operations. These actions include a reduction of our global workforce by approximately 570 positions, as well as asset disposals and lease terminations. As a result of these actions,expanded program (“Combined Program”), we expect to incur ~~approximately $40 to $45~~total pre-tax charges of $195 million ($~~30 to $35 million after tax) of restructuring charges, the majority of which is expected to be incurred during 2017. We recorded restructuring charges of $3.6 million ($1.3~~150 million after tax) or ~~less than $0.01~~$0.52 per diluted share. We expect that these restructuring charges will be substantially completed by the end of 2024. Program actions include headcount reductions from terminations, not filling certain open positions, and facility closures. The Combined Program charges are expected to be primarily cash expenditures related to severance and asset disposals.

In anticipation of this Combined Program, a limited number of actions were taken in the fourth quarter of 2022. As a result, we reclassified $19.3 million ($14.5 million after tax) or $0.05 per diluted share from other restructuring to the Combined Program in the first quarter of 2023.

During the first quarter of 2024 and 2023, we recorded total Combined Program restructuring charges of $19.7 million ($15.8 million after tax) or $0.05 per diluted share, and ~~$36.6~~$13.4 million ($~~26.2~~10.2 million after tax) or ~~$0.09~~$0.04 per diluted share, ~~during the third quarter and first nine months of 2017,~~ respectively, ~~related~~ primarily ~~to employee termination costs. As of September 30, 2017, the restructuring liability balance~~ related to ~~these activities~~severance. The net liability related to the Combined Program was ~~$28.2 million. We anticipate the majority~~$44.1 million and $43.1 million as of ~~the pretax charges will represent net cash expenditures which are~~March 31, 2024 and December 31, 2023, respectively. The remaining liability is expected to be paid over a period of a few months to several quarters and will ~~be funded from operating activities. Cash payments during the third quarter and first nine months of 2017 were $4.3 million and $4.9 million, respectively.~~

Net restructuring charges related to our Energy and Combined restructuring plans during 2017 were minimal during the third quarter and first nine months of 2017. During the third quarter and first nine months of 2016, net restructuring activities included net restructuring gains of $7.7 million ($7.2 million after tax) or $0.02 per diluted share and $5.9 million ($7.3 million gain after tax) or $0.03 per diluted share, respectively. The restructuring liability balance was $23.1 million and $39.6 million as of September 30, 2017 and December 31, 2016, respectively. The reduction in liability was driven primarily by severance and other cash payments. The remaining accrual is expected to be paid over a period of a few months to several quarters and continuescontinue to be funded from operating activities.

The Combined Program has delivered $137 million of cumulative cost savings with estimated annualized cost savings of $175 million in continuing operations by 2024.

3229

Acquisition and integration related costs

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

~~Acquisition and integration~~ costs reported in special (gains) and charges on the Consolidated ~~Statement~~Statements of Income include ~~$1.8~~$2.5 million ($~~1.2~~1.9 million after tax) or less than $0.01 per diluted share and $12.7 million ($8.5 million after tax) or $0.03 per diluted share of acquisition costs, advisory and legal fees, and integration charges for the Anios and Swisher acquisitions during the third quarter and first nine months of 2017, respectively.

~~During the third quarter and first nine months of 2016, we incurred acquisition and integration charges of $1.7 million ($1.0 million after tax) or less than~~ $0.01 per diluted share and $5.0 million ($~~3.1~~3.7 million after tax) or $0.01 per diluted share ~~respectively. Further information related to our acquisitions is included in Note 3.~~

~~Energy related charges~~

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

The inventory write-downs and related disposal costs of $31.1 million include adjustments due to the significant decline in activity and related prices of certain specific-use and other products, coupled with declines in replacement costs, as well as estimated costs to dispose the respective excess inventory. The fixed asset charges of $18.2 million resulted from the write-down of certain assets related to the reduction in certain aspects of our North American Global Energy segment, as well as abandonment of certain projects under construction. The carrying value of the corresponding fixed assets was reduced to zero. The employee termination costs of $12.8 million include a reduction in the Global Energy segment’s global workforce to better align its workforce with anticipated activity levels in the near term. As of the end of the third quarter of ~~2017, we had $3.2 million of corresponding severance remaining to be paid, which is expected to paid~~2024 and 2023, respectively.

Other operating activities

Other special charges recorded in ~~the next several months and be funded from operating activities.~~

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

~~Venezuela related gain~~

~~Effective as of~~Income in the ~~end of the fourth~~first quarter of ~~2015, we deconsolidated our Venezuelan subsidiaries. We recorded gains due to U.S. dollar cash recoveries of intercompany receivables written off at the time of deconsolidation of $3.2~~2024 and 2023 were $7.6 million ($2.0 million after tax) or $0.01 per diluted share during the third quarter of 2017 and $8.5 million ($5.3 million after tax) or $0.02 per diluted share during the first nine months of 2017. In 2016, the Company recorded no such gains during the third quarter and $7.8 million ($4.9 million after tax) or $0.02 per diluted share during the first nine months.

~~Other~~

During the third quarter of 2017, we recorded charges of $2.2 million ($1.4 million after tax) or less than $0.01 per diluted share related to litigation. During the first nine months of 2017, we recorded charges of $20.2 million ($15.9 million after tax) or $0.05 per diluted share, related to litigation and a Global Energy vendor contract termination. These charges have been included as a component of both cost of sales and special (gains) and charges on the Consolidated Statement of Income.

During the first nine months of 2016, we recorded a charge of $10.0 million ($6.3 million after tax) or $0.02 per diluted share related to a fixed asset impairment and related inventory charges. The fixed asset impairment corresponds to additional charges of certain U.S. production equipment and buildings, resulting from further lower production, initially impaired during the fourth quarter of 2015. This charge has been included as a component of cost of sales on the Consolidated Statement of Income. There were no such charges in the third quarter of 2016.

~~Additionally, during the third quarter and first nine months of 2016, we recorded charges of $9.2 million ($5.6~~5.4 million after tax) or $0.02 per diluted share and ~~$32.7~~$6.9 million ($~~20.7~~5.4 million after tax) or ~~$0.07~~$0.02 per diluted share, ~~respectively, primarily consisting of litigation related charges. These charges have been included as a component of special (gains) and charges on the Consolidated Statement of Income.~~respectively.

Operating Income and Operating Income Margin

Third Quarter Ended

Nine Months Ended

September 30

September 30
(millions)

2017

2016

Change

2017

2016

Change
Reported GAAP operating income

$579.8

$574.1

1
%

$1,392.1

$1,358.1

3
%
Special (gains) and charges

5.2

3.2

74.1

97.6

Non-GAAP adjusted operating income

585.0

577.3

1

1,466.2

1,455.7

1

Effect of foreign currency translation

(11.4)

(9.9)

(16.0)

(20.0)

Non-GAAP adjusted fixed currency operating income

$573.6

$567.4

1
%

$1,450.2

$1,435.7

1
%

Third Quarter Ended

Nine Months Ended

September 30

September 30

(percent)

2017

2016

2017

2016

Reported GAAP operating income margin

16.3
%

17.0
%

13.7
%

13.9
%

Non-GAAP adjusted operating income margin

16.4
%

17.0
%

14.4
%

14.9
%

Non-GAAP adjusted fixed currency operating income margin

16.4
%

17.0
%

14.4
%

14.8
%


	First Quarter Ended
	March 31
(millions)	2024			2023			Change
Reported GAAP operating income		$517.9			$351.6		47	%
Special (gains) and charges		29.8			27.7
Non-GAAP adjusted operating income		547.7			379.3		44	%
Effect of foreign currency translation		1.2			0.8
Non-GAAP adjusted fixed currency operating income		548.9			380.1		44	%
Effect of acquisitions and divestitures		(0.9)			(0.5)
Non-GAAP organic operating income		$548.0			$379.6		44	%

	First Quarter Ended
	March 31
(percent)	2024			2023
Reported GAAP operating income margin		13.8	%		9.8	%
Non-GAAP adjusted operating income margin		14.6	%		10.6	%
Non-GAAP adjusted fixed currency operating income margin		14.6	%		10.6	%
Non-GAAP organic operating income margin		14.7	%		10.7	%

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

~~Reported~~Our reported operating income increased ~~1% and 3%~~47% in the ~~third~~first quarter ~~and first nine months~~ of ~~2017, respectively,~~2024 versus the comparable ~~periods~~period of ~~2016. Excluding~~2023. Our reported operating income for 2024 and 2023 was impacted by special (gains) and charges; excluding the impact of special (gains) and charges from ~~2017~~2024 and ~~2016~~2023 reported results, our adjusted operating income increased 1%44% in ~~both the third quarter and~~ the first ~~nine months~~quarter of ~~2017.~~2024.

~~Adjusted fixed~~As shown in the previous table, foreign currency ~~operating income increased 1% in both the third quarter and the first nine months of 2017, when compared against the third quarter and first nine months of 2016. The net~~had a zero percentage point impact ~~of acquisitions and divestitures added approximately 1 and 3 percentage points, respectively, to our third quarter and first nine months of 2017~~on adjusted ~~fixed currency~~ operating income growth ~~rates.~~

~~Our third~~for the first quarter ~~and first nine months~~ of ~~2017~~2024. Foreign currency had a 5 percentage point impact on adjusted ~~fixed currency~~ operating income ~~increase was~~growth for the first quarter of 2023.

Other (Income) Expense


	First Quarter Ended
	March 31
(millions)	2024		2023		Change
Reported GAAP other (income) expense		($12.6)		($13.1)	(4)	%

Reported other (income) expense decreased to ($12.6) million from ($13.1) million in the first quarter of 2024 compared to the first quarter of 2023, respectively, driven by ~~pricing, volume growth and cost savings in our Global Institutional, Global Industrial and Other segments, which more than offset~~ higher ~~delivered product costs, hurricane impacts, investments in the business, and the impact of Global Energy.~~pension costs.

Interest Expense, Net


	First Quarter Ended
	March 31
(millions)	2024		2023		Change
Reported GAAP interest expense, net		$71.6		$74.2	(4)	%

~~Net~~Reported net interest expense was ~~$55.1~~$71.6 million and ~~$64.9~~$74.2 million in the ~~third~~first quarter of ~~2017~~2024 and ~~2016, respectively. Net interest expense in the first nine months of 2017 and 2016 was $177.2 million and $196.3 million,~~2023, respectively. The decrease in ~~net~~ interest expense ~~when comparing 2017 against 2016 was driven primarily~~reflected the favorable impact from lower outstanding debt and higher interest income earned on cash balances partially offset by ~~an increased mix of lower cost Euro interest and lower~~higher interest rates on ~~refinanced~~floating rate debt.

Provision for Income Taxes

The following table provides a summary of our tax rate:


	Third Quarter Ended				Nine Months Ended
	September 30				September 30

									First Quarter Ended
									March 31
(percent)	2017		2016		2017		2016		2024		2023
Reported GAAP tax rate	24.6	%	25.5	%	21.7	%	24.7	%	9.2	%	18.0	%
Tax rate impact of:
Special gains and charges	0.3		0.6		0.4		1.0
Special (gains) and charges									0.8		0.5
Discrete tax items	(1.6)		(0.9)		1.9		(0.3)		9.9		1.3
Non-GAAP adjusted tax rate	23.3	%	25.2	%	24.0	%	25.4	%	19.9	%	19.8	%

Our reported tax rate was 9.2% and 18.0% for ~~2017~~the first quarter of 2024 and ~~2016~~2023, respectively. The change in our tax rate for the first quarter of 2024 versus the comparable period of 2023 was driven primarily by discrete tax items and special (gains) and charges. The change in our tax rate includes the tax ~~rate~~ impact of special ~~gains~~(gains) and charges and discrete tax items, which have impacted the comparability of our historical reported tax rates, as amounts included in our special ~~gains~~(gains) and charges are derived from tax jurisdictions with rates that vary from our ~~overall non-GAAP adjusted~~ tax rate, and discrete tax items are not necessarily consistent across periods. The tax impact of special ~~gains~~(gains) and charges and discrete tax items will likely continue to impact comparability of our reported tax rate in the future.

~~Our third quarter 2017 reported tax expense included $2.8 million of~~We recognized net tax benefits on special gains and charges and net expense of $8.3 million associated with discrete tax items. For the first nine months of 2017, our reported tax expense included $20.9 million of net tax benefits on special gains and charges and net benefits of $24.2 million associated with discrete tax items.

Our third quarter and first nine months of 2017 reported tax expense was lower than the comparable periods of 2016 primarily due to $2.4 million and $29.2 million of excess tax benefits recorded in the third quarter and first nine months of 2017, respectively, resulting from the adoption of accounting changes regarding the treatment of tax benefits on share-based compensation. The extent of excess tax benefits is subject to variation in stock price and stock option exercises. We expect excess tax benefits to impact the rate by approximately 2% to 3% for the full year of 2017.

The remaining discrete tax benefits in the third quarter of 2017 were driven primarily by recognizing adjustments from filing our 2016 U.S. federal income tax return and international adjustments due to changes in estimates, partially offset by the release of reserves for uncertain tax positions due to the expiration of statute of limitations in state tax matters. The corresponding impact of these items on the reported tax rate is shown in the previous table.

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

Third quarter 2016 discrete tax items net expense was driven primarily by recognizing adjustments from filing our 2015 U.S. federal income tax return, partially offset by the settlement of international tax matters and remeasurement of certain deferred tax assets and liabilities resulting from the application of an updated tax rate in an international jurisdiction. Net expense related to discrete tax items ~~for~~of $48.2 million in the first ~~nine months~~quarter of ~~2016 was also impacted by~~2024. This included a tax benefit of $41.9 million associated with transferring certain intangible property between affiliates and $8.6 million associated with share-based compensation excess tax benefits. The remaining net expense of $2.3 million is from other income tax adjustments including the ~~release~~impact of ~~reserves for~~changes in tax laws, audit settlements, and other changes in estimates.

We recognized net tax benefits related to discrete tax items of $4.0 million in the first quarter of 2023 primarily due to changes in uncertain tax positions, ~~due~~prior year return adjustments, repricing of deferred tax balances, and other changes in estimates.

The Organization for Economic Co-operation’s (“OECD”) global minimum tax regime (“Pillar Two”) became effective in certain countries where we operate starting in 2024. As such, an estimate of Pillar Two tax has been considered within the provision for income taxes. We continue to monitor these legislative developments, but based on information available we do not anticipate material impacts to the ~~expiration of statute of limitations in non-U.S. jurisdictions.~~2024 financial statements.

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

Net Income Attributable to Ecolab


	First Quarter Ended
	March 31
(millions)	2024		2023		Change
Reported GAAP net income attributable to Ecolab		$412.1		$233.4	77	%
Adjustments:
Special (gains) and charges, after tax		23.1		21.1
Discrete tax net expense		(48.2)		(4.0)
Non-GAAP adjusted net income attributable to Ecolab		$387.0		$250.5	54	%

Third Quarter Ended

Nine Months Ended

September 30

September 30
(millions)

2017

2016

Change

2017

2016

Change
Reported GAAP net income attributable to Ecolab

$392.4

$374.1

5
%

$942.5

$863.3

9
%
Adjustments:

Special (gains) and charges, after tax

2.4

(0.6)

53.2

60.8

Discrete tax net expense (benefit)

8.3

4.5

(24.2)

3.6

Non-GAAP adjusted net income attributable to Ecolab

$403.1

$378.0

7
%

$971.5

$927.7

5
%

Diluted EPS


	First Quarter Ended
	March 31
(dollars)	2024		2023		Change
Reported GAAP diluted EPS		$1.43		$0.82	74	%
Adjustments:
Special (gains) and charges, after tax		0.08		0.07
Discrete tax net expense		(0.17)		(0.01)
Non-GAAP adjusted diluted EPS		$1.34		$0.88	52	%

Third Quarter Ended

Nine Months Ended

September 30

September 30
(dollars)

2017

2016

Change

2017

2016

Change
Reported GAAP diluted EPS

$1.34

$ 1.27

6
%

$ 3.20

$ 2.91

10
%
Adjustments:

Special (gains) and charges

0.01

-

0.18

0.20

Discrete tax net expense (benefit)

0.03

0.02

(0.08)

0.01

Non-GAAP adjusted diluted EPS

$1.37

$ 1.28

7
%

$ 3.30

$ 3.12

6
%

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

Currency translation had ~~minimal~~an unfavorable impact of approximately ($0.01) per share on diluted EPS for ~~both~~ the ~~third~~first quarter ~~and first nine months~~ of ~~2017,~~2024 when compared to the ~~third quarter and first nine months~~comparable period of ~~2016.~~2023.

3531

SEGMENT PERFORMANCE

The non-U.S. dollar functional international amounts included within our reportable segments are based on translation into U.S. dollars at the fixed currency exchange rates used by management for 2024. The difference between the fixed currency exchange rates and the actual currency exchange rates is reported as “effect of foreign currency translation” in the following tables. All other accounting policies of the reportable segments are consistent with U.S. GAAP and the accounting policies described in Note 2 of our Annual Report on Form 10-K for the year ended December 31, 2023. Additional information about our reportable segments is included in Note 15.

Fixed currency net sales and operating income for the ~~third~~first quarter ~~and first nine months~~ of ~~2017 and 2016~~2024 for ~~each of~~ our reportable segments ~~were as follows:~~are shown in the following tables:



Net Sales	Third Quarter Ended						Nine Months Ended						First Quarter Ended
	September 30						September 30
													March 31
(millions)	2017		2016		Change		2017		2016		Change		2024		2023		Change
Global Industrial		$1,248.1		$1,202.1	4	%		$3,586.5		$3,468.4	3	%		$1,841.7		$1,808.2	2	%
Global Institutional		1,225.1		1,149.2	7			3,524.3		3,315.0	6
Global Energy		796.7		771.2	3			2,346.1		2,305.6	2
Other		221.7		209.2	6			633.8		598.1	6
Global Institutional & Specialty														1,270.3		1,131.2	12
Global Healthcare & Life Sciences														382.9		386.1	(1)
Global Pest Elimination														266.8		244.6	9
Corporate														-		10.7	(100)
Subtotal at fixed currency		3,491.6		3,331.7	5			10,090.7		9,687.1	4			3,761.7		3,580.8	5
Effect of foreign currency translation		71.7		54.4				96.9		113.6				(9.8)		(9.2)
Consolidated reported GAAP net sales		$3,563.3		$3,386.1	5	%		$10,187.6		$9,800.7	4	%		$3,751.9		$3,571.6	5	%


Operating Income	Third Quarter Ended						Nine Months Ended						First Quarter Ended
	September 30						September 30
													March 31
(millions)	2017		2016		Change		2017		2016		Change		2024		2023		Change
Global Industrial		$207.4		$204.1	2	%		$501.9		$510.1	(2)	%		$265.0		$219.8	21	%
Global Institutional		274.2		262.1	5			726.1		697.8	4
Global Energy		89.7		102.6	(13)			236.1		244.9	(4)
Other		44.0		40.4	9			110.9		108.2	2
Global Institutional & Specialty														248.0		130.1	91
Global Healthcare & Life Sciences														37.0		35.4	5
Global Pest Elimination														48.8		44.5	10
Corporate		(46.9)		(45.0)				(198.9)		(222.9)				(79.8)		(77.4)	3
Subtotal at fixed currency		568.4		564.2	1			1,376.1		1,338.1	3			519.0		352.4	47
Effect of foreign currency translation		11.4		9.9				16.0		20.0				(1.1)		(0.8)
Consolidated reported GAAP operating income		$579.8		$574.1	1	%		$1,392.1		$1,358.1	3	%		$517.9		$351.6	47	%

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


	First Quarter Ended
	March 31
Net Sales	2024			2023
(millions)	Fixed Currency	Impact of Acquisitions and Divestitures	Acquisition Adjusted	Fixed Currency	Impact of Acquisitions and Divestitures	Acquisition Adjusted
Global Industrial	$1,841.7	($26.1)	$1,815.6	$1,808.2	($13.3)	$1,794.9
Global Institutional & Specialty	1,270.3	(18.0)	1,252.3	1,131.2	-	1,131.2
Global Healthcare & Life Sciences	382.9	-	382.9	386.1	-	386.1
Global Pest Elimination	266.8	-	266.8	244.6	-	244.6
Corporate	-	-	-	10.7	(10.7)	-
Subtotal at fixed currency	3,761.7	(44.1)	3,717.6	3,580.8	(24.0)	3,556.8
Effect of foreign currency translation	(9.8)			(9.2)
Consolidated reported GAAP net sales	$3,751.9			$3,571.6

Operating Income	2024			2023
(millions)	Fixed Currency	Impact of Acquisitions and Divestitures	Acquisition Adjusted	Fixed Currency	Impact of Acquisitions and Divestitures	Acquisition Adjusted
Global Industrial	$265.0	$-	$265.0	$219.8	($0.2)	$219.6
Global Institutional & Specialty	248.0	(0.9)	247.1	130.1	-	130.1
Global Healthcare & Life Sciences	37.0	-	37.0	35.4	-	35.4
Global Pest Elimination	48.8	-	48.8	44.5	-	44.5
Corporate	(49.9)	-	(49.9)	(49.7)	(0.3)	(50.0)
Non-GAAP adjusted fixed currency operating income	548.9	(0.9)	548.0	380.1	(0.5)	379.6
Special (gains) and charges at fixed currency rates	29.9			27.7
Subtotal at fixed currency	519.0			352.4
Effect of foreign currency translation	(1.1)			(0.8)
Consolidated reported GAAP operating income	$517.9			$351.6

Unless otherwise noted, the following segment performance commentary compares the ~~third~~first quarter ~~and first nine months~~ of ~~2017~~2024 against the ~~third~~first quarter ~~and first nine months~~ of ~~2016.~~2023.

Global Industrial


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

													First Quarter Ended
													March 31
													2024			2023
Sales at fixed currency (millions)		$1,248.1			$1,202.1			$3,586.5			$3,468.4			$1,841.7			$1,808.2
Sales at public currency (millions)		1,284.3			1,230.2			3,636.8			3,527.6			1,839.2			1,809.1

Volume		2	%					2	%
Price changes		1	%					1	%
Acquisition adjusted fixed currency sales change		3	%					3	%

Organic sales change														1	%
Acquisitions and divestitures		1	%					0	%					1	%
Fixed currency sales change		4	%					3	%					2	%
Foreign currency translation		1	%					(0)	%					-	%
Public currency sales change		4	%					3	%					2	%


Operating income at fixed currency (millions)		$207.4			$204.1			$501.9			$510.1			$265.0			$219.8
Operating income at public currency (millions)		214.1			209.7			511.6			521.6			265.4			221.3


Fixed currency operating income change		2	%					(2)	%					21	%
Fixed currency operating income margin		16.6	%		17.0	%		14.0	%		14.7	%		14.4	%		12.2	%
Acquisition adjusted fixed currency operating income change		2	%					(2)	%
Acquisition adjusted fixed currency operating income margin		16.7	%		17.0	%		14.1	%		14.7	%
Organic operating income change														21	%
Organic operating income margin														14.6	%		12.2	%
Public currency operating income change		2	%					(2)	%					20	%

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

Net Sales

~~Fixed currency~~Organic sales for Global Industrial increased in the ~~third~~first quarter ~~and first nine months~~ of ~~2017, benefitting from volume gains and pricing. At a regional level, both the third quarter and first nine months sales showed good~~2024 as growth in ~~Greater China, North America and Latin America.~~

~~At an operating segment level,~~ ~~Water~~ fixed currency sales increased 4% (3% acquisition adjusted) in the third quarter of 2017 and 4% (2% acquisition adjusted) in the first nine months of 2017. Light industry sales growth was led by innovative technology and service offerings. Heavy industry sales declined modestly in the quarter impacted by hurricanes and exit of low margin business. Mining sales were strong as new business wins led the growth.Food & Beverage ~~fixed currency sales increased 5% in the third quarter of 2017~~ and ~~4% in the first nine months of 2017, benefiting from new business wins and pricing, which~~Water more than offset ~~generally flat industry trends. Growth was led by~~ the ~~food, beverage and brew markets.~~expected short-term decline in Paper ~~fixed currency~~ sales.

Water organic sales ~~were flat in the third quarter of 2017 reflecting the impact of hurricanes and~~ increased 2% in the first ~~nine months~~quarter of ~~2017, benefiting from~~2024 driven by sales growth in Downstream, Light and Heavy that overcame lower Mining sales. Light industry reported sales growth driven by continued strong performance in high-tech and growth in food & beverage and institutional segments. Heavy industry recorded sales ~~efforts~~growth in chemicals, primary metals, and power. Downstream industry reported sales growth driven by water treatment.Food & Beverage organic sales increased 3% in the first quarter 2024, driven sales growth in dairy, food, and beverage & brewery. Paper organic sales decreased 5% in the first quarter of 2024, reflecting new business wins ~~which~~that were more than offset ~~challenging market conditions in China~~by lower customer production rates.

Operating Income

Organic operating income and ~~Europe.~~ ~~Textile Care~~ ~~fixed currency sales~~organic operating income margins increased ~~1% in the third quarter of 2017 and 2%~~for Global Industrial in the first ~~nine months of 2017, benefiting from new customer accounts in Europe.~~ ~~Life Sciences~~ ~~fixed currency sales increased 9% in the third~~ quarter of 2017 and 7% in the first nine months of 2017. Good growth from business wins and pricing execution, led by strong sales of cleaning and disinfection programs in the pharmaceutical market and better program penetration in the personal care market.2024.

~~Operating Income~~

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

~~Acquisition adjusted fixed currency operating income margins decreased 0.3 and 0.6~~increased 2.4 percentage points during the ~~third~~first quarter ~~and first nine months~~ of ~~2017, respectively, negatively impacted by approximately 2.3 and 2.0~~2024 as the 4.0 percentage ~~points for the respective periods, related to higher~~point positive impact of lower delivered product costs ~~and~~was partially offset by the 1.9 percentage point impact of investments in the business. Favorable impact of sales volume gains and pricing, and cost savings initiatives, added approximately 1.7 and 1.4 percentage points during the third quarter and first nine months of 2017. Hurricanes had an estimated negative 0.3 percentage point impact on the third quarter results and minimal impact on the first nine months of 2017.

3733

Global Institutional & Specialty


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

													First Quarter Ended
													March 31
													2024			2023
Sales at fixed currency (millions)		$1,225.1			$1,149.2			$3,524.3			$3,315.0			$1,270.3			$1,131.2
Sales at public currency (millions)		1,248.0			1,164.1			3,551.4			3,349.4			1,266.7			1,128.8

Volume		1	%					1	%
Price changes		2	%					1	%
Acquisition adjusted fixed currency sales change		2	%					3	%

Organic sales change														11	%
Acquisitions and divestitures		5	%					3	%					2	%
Fixed currency sales change		7	%					6	%					12	%
Foreign currency translation		1	%					(0)	%					-	%
Public currency sales change		7	%					6	%					12	%


Operating income at fixed currency (millions)		$274.2			$262.1			$726.1			$697.8			$248.0			$130.1
Operating income at public currency (millions)		277.4			264.6			729.6			703.2			247.0			129.8


Fixed currency operating income change		5	%					4	%					91	%
Fixed currency operating income margin		22.4	%		22.8	%		20.6	%		21.0	%		19.5	%		11.5	%
Acquisition adjusted fixed currency operating income change		2	%					1	%
Acquisition adjusted fixed currency operating income margin		22.9	%		23.0	%		20.9	%		21.2	%
Organic operating income change														90	%
Organic operating income margin														19.7	%		11.5	%
Public currency operating income change		5	%					4	%					90	%

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

Net Sales

~~Fixed currency~~Organic sales for Global Institutional & Specialty increased in the ~~third~~first quarter ~~and first nine months~~ of ~~2017, driven by volume~~2024 with double-digit growth ~~acquisitions and pricing gains. At a regional level,~~in both the ~~third quarter~~Institutional and ~~first nine months sales increase was led by good growth in Latin America and North America.~~Specialty divisions.

At an operating segment level, Institutional ~~fixed currency~~ organic sales ~~were flat in the third quarter of 2017 and~~ increased 1%11% in the first ~~nine months~~quarter of ~~2017. Acquisition adjusted fixed currency~~2024, reflecting sales growth across foodservice, lodging and long term care. Specialty organic sales increased ~~1% in the third quarter and 2%~~10% in the first nine months of 2017, when adjusting for the divestiture of the restroom cleaning business initially acquired through the Swisher transaction. Global lodging demand continued to show moderate growth while global full service restaurant industry foot traffic remained weak, particularly in North America. Sales also include an estimated impact from the hurricanes. ~~Specialty~~ ~~fixed currency sales increased 6% in the third~~ quarter of ~~2017~~2024, reflecting sales growth driven by quick service and 7%food retail.

Operating Income

Organic operating income and organic operating income margin increased in the first nine months of 2017, led primarily by new account wins and growth in global quick service accounts, leveraging generally modest industry trends. New business gains remain strong, driven by increased service coverage, new product innovations, additional customer solutions and a continued focus among our customers on food safety. ~~Healthcare~~ ~~fixed currency sales increased 45% in the third~~ quarter of 2017 and 40% in the first nine months of 2017. Fixed currency sales increased 1% in the third quarter and 4% in the first nine months of 2017, when adjusted for the Anios acquisition, with modest growth for Healthcare in North America and Europe in the quarter.

~~Operating Income~~

~~Fixed currency operating income~~2024 for our Global Institutional ~~segment increased in both the third quarter and first nine months of 2017. Fixed currency~~& Specialty segment.

Organic operating income margins decreased in both the third quarter and first nine months of 2017. Acquisitions had a positive impact on fixed currency operating income growth and minimal impact on fixed currency operating income margins.

~~Acquisition adjusted fixed currency operating income margins decreased by 0.1 percentage points and 0.3~~increased 8.2 percentage points during the ~~third~~first quarter of 2024, as the 8.8 percentage point positive impact from strong pricing, higher volumes, and ~~first nine months of 2017, respectively, negatively impacted by approximately 1.7 percentage points in both respective periods, related to innovation and customer investments and higher~~lower delivered product ~~costs. Sales volume and pricing gains favorably impacted acquisition adjusted fixed currency operating income margins~~costs were partially offset by ~~adding approximately 1.6 and 1.5 percentage points in~~ the ~~third quarter and first nine months of 2017, respectively. Hurricanes had an estimated negative 0.3~~1.1 percentage point impact onfrom investments in the ~~third quarter results and minimal impact on the first nine months of 2017.~~business.

3834

Global Healthcare & Life Sciences

~~Global Energy~~


	First Quarter Ended
	March 31
	2024			2023
Sales at fixed currency (millions)		$382.9			$386.1
Sales at public currency (millions)		379.9			379.7

Organic sales change		(1)	%
Acquisitions and divestitures		-	%
Fixed currency sales change		(1)	%
Foreign currency translation		1	%
Public currency sales change		-	%

Operating income at fixed currency (millions)		$37.0			$35.4
Operating income at public currency (millions)		36.3			33.7

Fixed currency operating income change		5	%
Fixed currency operating income margin		9.7	%		9.2	%
Organic operating income change		5	%
Organic operating income margin		9.7	%		9.2	%
Public currency operating income change		8	%

Third Quarter Ended

Nine Months Ended

September 30

September 30


2017

2016

2017

2016

Sales at fixed currency (millions)

$796.7

$771.2

$2,346.1

$2,305.6

Sales at public currency (millions)

806.5

780.2

2,361.8

2,318.6

Volume

5
%

3
%

Price changes

-
%

(1)
%

Acquisition adjusted fixed currency sales change

4
%

3
%

Acquisitions and divestitures

(1)
%

(1)
%

Fixed currency sales change

3
%

2
%

Foreign currency translation

0
%

0
%

Public currency sales change

3
%

2
%

Operating income at fixed currency (millions)

$89.7

$102.6

$236.1

$244.9

Operating income at public currency (millions)

91.3

104.3

238.9

247.4

Fixed currency operating income change

(13)
%

(4)
%

Fixed currency operating income margin

11.3
%

13.3
%

10.1
%

10.6
%

Acquisition adjusted fixed currency operating income change

(11)
%

0
%

Acquisition adjusted fixed currency operating income margin

11.2
%

13.1
%

10.0
%

10.3
%

Public currency operating income change

(12)
%

(3)
%

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

Net Sales

~~Fixed currency~~Organic sales for Global ~~Energy had a strong growth~~Healthcare & Life Sciences decreased in the ~~well stimulation business, while the production business showed a modest decline,~~first quarter of 2024 as ~~growth in North America~~lower Healthcare sales was offset by ~~international markets. Sales~~growth in ~~our downstream~~Life Sciences.

At an operating segment level, Healthcare organic sales decreased 2% in the first quarter of 2024, reflecting strategic low margin business ~~rose moderately, impacted by~~exits. Life Sciences organic sales increased 1% in the ~~hurricanes.~~first quarter of 2024 reflected improved underlying business momentum that offset soft near-term industry demand.

Operating Income

~~Fixed currency~~Organic operating income and ~~fixed currency~~organic operating income margins both increased in the first quarter of 2024 for our Global ~~Energy decreased during the third quarter and first nine months of 2017. Acquisitions had a negative impact on the fixed currency operating income and minimal impact on the fixed currency~~Healthcare & Life Sciences segment.

Organic operating income margins increased 0.5 percentage points during the ~~third~~first quarter of 2024,as the 6.7 percentage point positive impact from strong pricing and ~~first nine months of 2017.~~

~~Acquisition adjusted fixed currency operating income margins for our Global Energy segment decreased 1.9~~lower supply chain costs were partially offset by the 5.6 percentage ~~points and 0.3 percentage points~~point impacts from continued targeted investments in the ~~third quarter~~business and first nine months of 2017, respectively. Higher delivered product costs, a rebuild of compensation reductions made in 2016 and reduced sales, pricing, and volume, negatively impacted margins by approximately 2.6 percentage points in both the third quarter and first nine months of 2017. Cost reduction actions and a favorable legal cost recovery impacted the margins by approximately 2.2 and 1.4 percentage points for the respective periods. Hurricanes had an estimated negative 0.6 percentage point impact on the third quarter results and minimal impact on the first nine months of 2017.lower volume.

3935

Global Pest Elimination

~~Other~~


	First Quarter Ended
	March 31
	2024			2023
Sales at fixed currency (millions)		$266.8			$244.6
Sales at public currency (millions)		266.1			243.4

Organic sales change		9	%
Acquisitions and divestitures		-	%
Fixed currency sales change		9	%
Foreign currency translation		-	%
Public currency sales change		9	%

Operating income at fixed currency (millions)		$48.8			$44.5
Operating income at public currency (millions)		48.7			44.3

Fixed currency operating income change		10	%
Fixed currency operating income margin		18.3	%		18.2	%
Organic operating income change		10	%
Organic operating income margin		18.3	%		18.2	%
Public currency operating income change		10	%

Third Quarter Ended

Nine Months Ended

September 30

September 30


2017

2016

2017

2016

Sales at fixed currency (millions)

$221.7

$209.2

$633.8

$598.1

Sales at public currency (millions)

224.5

211.6

637.6

605.1

Volume

4
%

4
%

Price changes

2
%

2
%

Acquisition adjusted fixed currency sales change

6
%

6
%

Acquisitions and divestitures

(0)
%

(0)
%

Fixed currency sales change

6
%

6
%

Foreign currency translation

0
%

(1)
%

Public currency sales change

6
%

5
%

Operating income at fixed currency (millions)

$44.0

$40.4

$110.9

$108.2

Operating income at public currency (millions)

44.5

40.9

111.6

109.9

Fixed currency operating income change

9
%

2
%

Fixed currency operating income margin

19.8
%

19.3
%

17.5
%

18.1
%

Acquisition adjusted fixed currency operating income change

9
%

2
%

Acquisition adjusted fixed currency operating income margin

19.8
%

19.3
%

17.5
%

18.1
%

Public currency operating income change

9
%

2
%

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

Net Sales

~~Fixed currency~~Organic sales for ~~Other~~Global Pest Elimination increased 9% in ~~both~~ the ~~third~~first quarter ~~and first nine months~~ of ~~2017,~~2024 driven by ~~both volume and pricing gains. At a regional level, both the third quarter and first nine months sales results showed good~~ growth in ~~North America.~~food & beverage, restaurants, and food retail.

~~At an operating segment level,~~ ~~Pest Elimination~~ ~~fixed currency sales increased 8% and 7% in the third quarter and first nine months of 2017, respectively. Sales to food beverage and hospitality, and good growth in restaurants led the growth.~~ ~~Equipment Care~~ ~~sales decreased 2% and increased 1% in the third quarter and first nine months of 2017, respectively.~~

Operating Income

~~Fixed currency~~Organic operating income and organic operating income margins increased for ~~Other segment~~Global Pest Elimination in the first quarter of 2024.

Organic operating income margins increased ~~0.5 and decreased 0.6~~0.1 percentage points during the ~~third~~first quarter of 2024, as the 4.3 percentage point positive impact from strong pricing and ~~first nine months of 2017. The favorable impact of sales volume and pricing increases added 1.2 percentage points in~~higher volumes were partially offset by the third quarter and 1.3 percentage points for the first nine months of 2017. Field investments negatively impacted comparable margins by approximately 0.4 percentage points in the third quarter and 1.8 percentage points for the first nine months of 2017. Hurricanes had an estimated negative 0.34.2 percentage point impact onof investments in the ~~third quarter results and minimal impact on the first nine months of 2017.~~business.

~~Corporate~~

Corporate

Consistent with our internal management reporting, Corporate amounts in the table on page 3631 include sales to ChampionX in accordance with the transitional supply agreement entered into with the transaction post-separation, as discussed in Note 14, intangible asset amortization specifically from the Nalco ~~merger~~and Purolite transactions and special (gains) and charges that are not allocated to our reportable segments. Items included within special (gains) and charges are shown in the table on page ~~32.~~29.

4036

FINANCIAL POSITION, CASH FLOWS AND LIQUIDITY

Financial Position

Total assets were ~~$19.9 billion and $18.3~~$21.3 billion as of ~~September 30, 2017 and December~~March 31, ~~2016, respectively. The increase in~~2024, compared to total assets ~~was driven primarily by the impact~~ of the Anios acquisition and the positive impact of foreign currency exchange rates on the value of our foreign assets translated into U.S. dollars. Total liabilities were $12.6 billion as of September 30, 2017 and $11.4$21.8 billion as of December 31, ~~2016.~~ 2023.

Total ~~debt was $7.6~~liabilities were $13.1 billion as of ~~September 30, 2017 and $6.7~~March 31, 2024, compared to total liabilities of $13.8 billion as of December 31, ~~2016.~~2023. Total debt was $7.5 billion as of March 31, 2024 and $8.2 billion as of December 31, 2023. See further discussion of our debt activity within the “Liquidity and Capital Resources” section of this MD&A.

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

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


	2017		2016

					March 31, 2024		December 31, 2023
(ratio)
Net debt to EBITDA		2.6		2.6		2.2		2.4
Net debt to adjusted EBITDA		2.5		2.3


(millions)
Total debt		$7,557.5		$6,662.6		$7,539.9		$8,181.8
Cash		209.1		180.6		479.9		919.5
Net debt		$7,348.4		$6,482.0		$7,060.0		$7,262.3

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

Net income including noncontrolling interest						$1,571.5		$1,393.0
Provision for income taxes		380.8		324.3		352.4		362.5
Interest expense, net		245.5		258.6		294.1		296.7
Depreciation		585.2		557.7		615.0		616.7
Amortization		297.3		292.8		309.1		306.9
EBITDA		2,831.5		2,531.4		$3,142.1		$2,975.8

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

Cash Flows

Operating Activities

Nine Months Ended

September 30

First Quarter Ended

March 31

(millions)

2017

2016

Change

2024

2023

Change

Cash provided by operating activities

$1,444.9

$1,491.7

$(46.8)

$649.4

$198.2

$451.2

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

~~Investing Activities~~

Nine Months Ended

September 30

(millions)

2017

2016

Change

Cash used for investing activities

$(1,368.1)

$(581.8)

$(786.3)

~~Year-over-year comparability in our investing~~repurchases. Cash provided by operating activities ~~was impacted primarily by the Anios acquisition~~increased $451 million in the first quarter of ~~2017. See Note 3~~2024 compared to the first quarter of 2023, driven primarily by a $223 million net favorable change in working capital and $179 million increase in net income. The cash flow impact from working capital was primarily driven by improvement in accounts payable, partially offset by an increase in inventory.

Investing Activities

First Quarter Ended

March 31

(millions)

2024

2023

Change

Cash used for investing activities

($201.0)

($189.4)

($11.6)

Cash used for ~~further information.~~ investing activities is primarily impacted by capital investments in the business.

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

expenditures were $202 million and $174 million in the first quarter of 2024 and 2023, respectively.

4137

Financing Activities

Nine Months Ended

September 30

First Quarter Ended

March 31

(millions)

2017

2016

Change

2024

2023

Change

Cash provided by (used for) financing activities

$(200.5)

$(823.4)

$622.9

Cash used for financing activities

($889.3)

($166.4)

($722.9)

~~During~~Our cash flows from financing activities primarily reflect the ~~first nine months~~issuances and repayment of ~~2017, we issued $500 million 2.375% senior notes.~~ debt, common stock repurchases, proceeds from common stock issuances related to our equity incentive programs and dividend payments.

We ~~also~~ had net issuances of commercial paper and notes payable of ~~$188 million.~~$7 million and $6 million in the first quarter of 2024 and 2023, respectively.

Shares are repurchased for the purpose of partially offsetting the dilutive effect of our equity compensation plans, to manage our capital structure and to efficiently return capital to shareholders. We ~~repurchased $588~~reacquired a total of $196 million and $11 million of shares ~~including $300 million shares~~in the first quarter of 2024 and 2023, respectively. Cash proceeds and tax benefits from stock option exercises provide a portion of the funding for repurchase activity.

There was no long-term debt issuance activity through ~~an ASR program initiated in February 2017. Refer to Note 10 for further discussion on our ASRs.~~the first quarter of 2024 or 2023. We ~~distributed $330~~repaid $630 million of ~~dividends.~~

~~During~~long-term debt in the first ~~nine~~quarter of 2024.

We paid dividends of $175 million and $158 million in the first three months of ~~2016, we issued $400 million 2.00%~~2024 and $400 million 3.25% senior notes and repaid the remaining $125 million of our term loan borrowings. We had net repayments of commercial paper and notes payable of $522 million. We repurchased $738 million of shares, including $300 million shares through an ASR program initiated in February 2016, and distributed $325 million of dividends.2023, respectively.

Liquidity and Capital Resources

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

As of ~~September 30, 2017,~~March 31, 2024, we had ~~$209.1~~$480 million of cash and cash equivalents on hand, of which ~~$171.7~~$195 million was held outside of the U.S. We will continue to evaluate our cash position in light of future developments.

As of ~~September 30, 2017,~~March 31, 2024, we ~~had in place~~have a $2.0 billion multi-year credit facility which expires in ~~December 2019.~~April 2026. The credit facility has been established with a diverse syndicate of banks and supports our ~~$2.0 billion~~ U.S. ~~commercial paper program~~ and ~~our $2.0 billion~~ Euro commercial paper ~~program.~~programs. The maximum aggregate amount of commercial paper that may be issued under our U.S. commercial paper program and our Euro commercial paper program may not exceed $2.0 billion. At the end of the ~~third~~first quarter of ~~2017,~~both 2024 and 2023, we had ~~$238 million (€200 million) in~~no outstanding ~~Euro~~ commercial paper ~~with an average annual interest rate~~under our U.S. program nor our Euro program. There were no borrowings under our credit facility as of ~~less than 1% and no commercial paper outstanding under the U.S. program.~~March 31, 2024 or 2023. As of ~~September 30, 2017,~~March 31, 2024, both programs were rated A-2 by Standard & Poor’s, ~~and~~ P-2 by ~~Moody’s.~~Moody’s and F-1 by Fitch.

~~Our~~There was no long-term debt issuance ~~and repayment~~ activity through the first ~~nine months~~quarter of ~~2017 and 2016 is discussed~~2024. We repaid $630 million of long-term debt in the ~~Cash Flows – Financing Activities section~~first quarter of ~~this MD&A.~~2024.

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

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

The schedule of contractual obligations included in the Financial Position and Liquidity section of our Form 10-K for the year ended December 31, ~~2016~~2023 disclosed total notes payable and long-term debt due within one year of ~~$0.5 billion.~~$630 million. As of ~~September 30, 2017,~~March 31, 2024, the total notes payable and long-term debt due within one year ~~increased to $1.1 billion. The increase primarily reflected~~was $11 million. We had no outstanding commercial paper ~~borrowings during the first nine months~~under our U.S. program as of ~~2017~~March 31, 2024 and ~~reclassification~~as of ~~obligations due within one year to current.~~December 31, 2023.

Our gross liability for uncertain tax positions was ~~$71~~$24 million as of ~~September 30, 2017~~March 31, 2024 and ~~$76 million as of~~ December 31, ~~2016.~~2023. We are not able to reasonably estimate the amount by which the liability will increase or decrease over time; however, at this time, we do not expect significant payments related to these obligations within the next year.

GLOBAL ECONOMIC ENVIRONMENT

~~Energy Markets~~

~~Approximately 23% of our sales are generated from our Global Energy segment, the results of which, as noted further below, are subject to volatility in the oil and gas commodity markets.~~

Oil industry activity has been gradually recovering from 2016’s lows during the first nine months of 2017, with strong gains in drilling activity over the past year and recovering capital expenditure trends in 2017.

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

Our global footprint and broad business portfolio within the Global Energy segment, as well as our strong execution capabilities are expected to provide the required resilience to outperform in the current market. As such, we continue to remain confident in the long-term growth prospects of the segment.

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

Global Economies

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

~~Brexit~~

~~On March 29, 2017,~~Argentina and Turkey are classified as highly inflationary economies in accordance with U.S. GAAP, and the ~~United Kingdom (“U.K.”) government gave formal notice to~~U.S. dollar is the ~~European Union (“EU”) to begin~~functional currency for our subsidiaries in Argentina and Turkey. During the ~~process~~first quarter of negotiating the U.K.’s exit (“Brexit”) from the EU. The effects of Brexit will depend on any agreements the U.K. makes to retain access to the EU markets either during a transitional period or more permanently. The negotiations might also impact various tax reliefs2024, sales in Argentina and exemptions that apply to transactions between the U.K. and EU. In the longer term, any impact from Brexit on our U.K. operations will depend, in part, on the outcome of tariff, trade, regulatory, and other negotiations. We will continue to monitor the status of tax law changes and tax treaty negotiations at the U.K. and EU.

~~For the nine months ended September 30, 2017, net sales of our U.K. operations were approximately 2%~~Turkey represented less than 1% of our consolidated sales. Assets held in Argentina and Turkey at the end of the first quarter of 2024 represented less than 1% of our consolidated assets.

In light of Russia’s invasion of Ukraine and the sanctions against Russia by the United States and other countries, we have made the determination that we will limit our Russian business to operations that are essential to life, providing minimal support for our healthcare, life sciences, food and beverage and certain water businesses. We may further narrow our presence in Russia depending on future developments. During the first quarter of 2024, our Russian and Ukraine operations represented approximately 1% of our 2024 consolidated net sales.

NEW ACCOUNTING PRONOUNCEMENTS

For information on new accounting pronouncements, ~~see~~refer to Note 1617 to the Consolidated Financial Statements.

SUBSEQUENT EVENTS

~~In October 2017,~~On April 27, 2024, we ~~entered into an~~reached a definitive agreement to sell ~~the Equipment Care~~our global surgical solutions business ~~which subsequently closed on November 1, 2017.~~for total consideration of $950 million in cash, subject to certain working capital and other purchase price adjustments. The ~~disposition~~sale is ~~not expected to be material to the consolidated financial statements.~~

~~We have entered into various purchase agreements which are~~ expected to close in the ~~fourth quarter~~second half of ~~2017. None of the agreements are material~~2024, subject to ~~the consolidated financial statements, individually or~~regulatory clearances and other customary closing conditions. We expect to record an associated pre-tax gain within special (gains) and charges in the ~~aggregate.~~Consolidated Statements of Income.

NON-GAAP FINANCIAL MEASURES

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

●

Fixed currency sales

●

~~Acquisition adjusted fixed currency~~Organic sales

●

Adjusted cost of sales

●

Adjusted gross margin

●

Fixed currency operating income

●

Fixed currency operating income margin

●

Adjusted operating income

●

Adjusted operating income margin

●

Adjusted fixed currency operating income

●

Adjusted fixed currency operating income margin

●

~~Acquisition adjusted fixed currency~~Organic operating income

●

~~Acquisition adjusted fixed currency~~Organic operating income margin

●

EBITDA

●

~~Adjusted EBITDA~~

Adjusted tax rate

●

Adjusted net income attributable to Ecolab

●

Adjusted diluted EPS

We provide these measures as additional information regarding our operating results. We use these non-GAAP measures internally to evaluate our performance and in making financial and operational decisions, including with respect to incentive compensation. We believe that our presentation of these measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparison of results.

Our non-GAAP adjusted financial measures for cost of sales, gross margin and operating income exclude the impact of special (gains) and charges and our non-GAAP adjusted financial measures for tax rate, net income attributable to Ecolab and diluted ~~EPS~~earnings per share further exclude the impact of discrete tax items. We include items within special (gains) and charges and discrete tax items that we believe can significantly affect the period-over-period assessment of operating results and not necessarily reflect costs and/or income associated with historical trends and future results. After tax special (gains) and charges are derived by applying the applicable local jurisdictional tax rate to the corresponding pre-tax special (gains) and charges.

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

We evaluate the performance of our international operations based on fixed currency rates of foreign ~~exchange, which eliminate the translation impact of exchange rate fluctuations on our international results.~~exchange. Fixed currency amounts included in this Form 10-Q are based on translation into U.S. dollars at the fixed foreign currency exchange rates established by management at the beginning of ~~2017.~~2024. We also provide our segment results based on public currency rates for informational purposes.

~~Acquisition adjusted growth rates~~Our reportable segments do not include the impact of intangible asset amortization from the Nalco and Purolite transactions or the impact of special (gains) and charges as these are not allocated to our reportable segments.

Our non-GAAP financial measures for organic sales, organic operating income and organic operating income margin are at fixed currency and exclude the impact of special (gains) and charges, the results of our acquired businesses from the first twelve months post acquisition ~~exclude~~and the results of ~~our~~ divested businesses from the twelve months prior to ~~divestiture,~~divestiture. As part of the separation of ChampionX in 2020, we entered into an agreement with ChampionX to provide, receive or transfer certain products for a transitionary period. Transitionary period sales of product to ChampionX under this agreement are recorded in product and ~~exclude~~equipment sales in the Corporate segment along with the related cost of sales. The remaining sales to ~~our deconsolidated Venezuelan subsidiaries~~ChampionX are recorded in product and equipment sales in Global Industrial segment along with the related cost of sales. These transactions are removed from ~~both~~ the ~~current period and comparable period~~consolidated results as part of the ~~prior year.~~calculation of the impact of acquisitions and divestitures.

These non-GAAP measures are not in accordance with, or an alternative to U.S. GAAP, and may be different from non-GAAP measures used by other companies. Investors should not rely on any single financial measure when evaluating our business. We recommend that investors view these measures in conjunction with the U.S. GAAP measures included in this MD&A and we have provided reconciliations of reported U.S. GAAP amounts to the non-GAAP amounts.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include our business performance and prospects; expectations concerning ~~our~~timing, amount and type of restructuring costs and savings from restructuring activities; Russian operations; working capital; capital investments, acquisitions and share repurchases; amortization expense; non-performance of financial counterparties; payments and contributions to pension and postretirement health care benefit plans; ~~tax deductibility of goodwill; amortization expense; share repurchases; actions and impact associated with adoption of new accounting standards;~~ the impact of lawsuits, claims and environmental matters; impact of new accounting pronouncements and tax laws; cash flows, borrowing capacity and funding of cash requirements, including repayment of debt; payments related to uncertain tax positions; timing of hedged transactions; timing and funding of restructuring cash expenditures; tax rate impact of special gains and charges and discrete tax items; excess tax benefits; timing and funding of restructuring cash expenditures; tax rate impact of special gains and charges and discrete tax items; excess tax benefits; borrowing capacity; impact of oil price fluctuations regarding sales, performance compared to market and future prospects; global foreign currency markets; global credit or market risk; future cash flow; cash requirements and sources of funding; nonperformance of financial counterparties; closing of Equipment Care divestiture; implementation of ERP ~~system;~~system upgrade; and ~~doing~~statements regarding the expected timing and likelihood of completion of the sale of our global surgical solutions business, ~~in Iran.~~including the timing, receipt and terms and conditions of any required governmental and regulatory clearance of the proposed transaction, the occurrence of any event, change or other circumstances that could give rise to the termination of the definitive agreement, the inability to consummate the proposed transaction due to the failure to satisfy other closing conditions, risks that the proposed transaction disrupts current operations, and the amount of the costs, fees, expenses and charges related to the proposed transaction.

Without limiting the foregoing, words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “we believe,” “we expect,” “estimate,” “project” (including the negative or variations thereof) or similar terminology, generally identify forward-looking statements. Forward-looking statements may also represent challenging goals for us. These statements, which represent our expectations or beliefs concerning various future events, are based on current expectations that involve a number of risks and uncertainties that could cause actual results to differ materially from those of such forward-looking statements. In particular, the ultimate results of any restructuring or efficiency initiative, integration and business improvement actions, including cost synergies, depend on a number of factors, including the development of final plans, the impact of local regulatory requirements regarding employee terminations, the time necessary to develop and implement the restructuring or efficiency initiative and other business improvement initiatives and the level of success achieved through such actions in improving competitiveness, efficiency and effectiveness. We caution that undue reliance should not be placed on such forward-looking statements, which speak only as of the date made.

4440

Some of the factors which could cause results to differ materially from those expressed in any forward-looking statements are set forth under Item 1A ~~entitled Risk Factors,~~ of our most recent Form 10-K ~~for~~and our other public filings with the ~~year ended December 31, 2016,~~Securities and Exchange Commission (the "SEC"), and include ~~the vitality of the markets we serve including the impact of oil price fluctuations on the markets served by our Global Energy segment;~~ the impact of economic factors such as the worldwide economy, ~~capital flows,~~ interest rates, foreign currency risk, ~~and~~ reduced sales and earnings in our international operations resulting from the weakening of local currencies versus the U.S. ~~dollar; our ability to attract~~dollar, demand uncertainty, supply chain challenges and ~~retain high caliber management talent to lead our business; our ability to execute key business initiatives; potential information technology infrastructure failures or breaches in data security;~~inflation; the vitality of the markets we serve; exposure to global economic, political and legal risks related to our international operations, including geopolitical instability and the escalation of armed conflicts; our ability to successfully execute organizational change and management transitions; information technology infrastructure failures or breaches in data security; difficulty in procuring raw materials or fluctuations in raw material costs; the occurrence of severe public health outbreaks not limited to COVID-19; our ability to acquire complementary businesses and to effectively integrate such businesses; our ability to execute key business initiatives; our ability to successfully compete with respect to value, innovation and customer support; pressure on operations from consolidation of customers or vendors; restraints on pricing flexibility due to contractual obligations and our ~~operations in Russia;~~ability to meet our contractual commitments; the costs and effects of complying with laws and regulations, including those relating to the environment, climate change standards, and to the manufacture, storage, distribution, sale and use of our ~~products;~~products, as well as to the conduct of our business generally, including labor and employment and anti-corruption; potential chemical spill or release; our commitments, goals, targets, objectives and initiatives related to sustainability; potential to incur significant tax liabilities or indemnification liabilities relating to the separation and split-off of our ChampionX business; the occurrence of litigation or claims, including related to the Deepwater Horizon oil spill; our ability to develop competitive advantages through innovation; difficulty in procuring raw materials or fluctuations in raw material costs; our substantial indebtedness; our ability to acquire complementary businesses and to effectively integrate such businesses; restraints on pricing flexibility due to contractual obligations; pressure on operations from consolidation of customers, vendors or competitors; public health epidemics; potential losses arising from the impairment of goodwill or other assets; potential loss of deferred tax assets; changes in tax law and unanticipated tax liabilities; potential chemical spill or release; potential class action lawsuits; the loss or insolvency of a major customer or distributor; repeated or prolonged government and/or business shutdowns or similar events; acts of war or terrorism; natural or man-made disasters; water shortages; severe weather conditions; changes in tax laws and unanticipated tax liabilities; potential loss of deferred tax assets; our indebtedness, and any failure to comply with covenants that apply to our indebtedness; potential losses arising from the impairment of goodwill or other assets; and other uncertainties or risks reported from time to time in our reports to the SEC. There can be no assurances that our earnings levels will meet investors’ expectations. Except as may be required under applicable law, we do not undertake, and expressly disclaim, any duty to update our Forward-Looking Statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

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

Item 4. Controls and Procedures

As of ~~September 30, 2017,~~March 31, 2024, we carried out an evaluation, under the supervision and with the participation of our management, including ~~the~~our Chairman ~~of the Board~~ and Chief Executive Officer and ~~the~~our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our Chairman ~~of the Board~~ and Chief Executive Officer and ~~the~~our Chief Financial Officer concluded that our disclosure controls and procedures are effective.

During the period ~~July~~January 1, 2024 through ~~September 30, 2017,~~March 31, 2024 there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Note ~~15,~~16, entitled “Commitments and Contingencies” located under Part I, Item 1 of this Form 10-Q is incorporated herein by reference.

Item 1A. Risk Factors

In our report on Form 10-K for the year ended December 31, ~~2016,~~2023, filed with the Securities and Exchange Commission on February ~~24, 2017,~~23, 2024, we identify under Item 1A important factors which could affect our financial performance and could cause our actual results for future periods to differ materially from our anticipated results or other expectations, including those expressed in any forward-looking statements made in this Form 10-Q. See the section entitled Forward-Looking Statements located on page 4440 of this Form 10-Q. We may also refer to such disclosure to identify factors that may cause results to differ from those expressed in other forward-looking statements made in oral presentations, including telephone conferences and/or webcasts open to the public.

The discussion below should be read together with the full list of risk factors set forth in the aforementioned Form 10-K. The first two risk factors appearing in this discussion include new updates and additions to such risk factors since the Form 10-K, while the other two risk

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

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

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

~~We may be subject to information technology system failures, network disruptions and breaches in data security.~~

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

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

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

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

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

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

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

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

On November 28, 2012, the Federal Court in the MDL entered an order dismissing all claims against Nalco. Because claims remained pending against other defendants, the Court’s decision was not a “final judgment” for purposes of appeal. Plaintiffs will have 30 days after entry of final judgment to appeal the Court’s decision. We cannot predict whether there will be an appeal of the dismissal, the involvement we might have in these matters in the future or the potential for future litigation. However, if an appeal by plaintiffs in these lawsuits is brought and won, these suits could have a material adverse effect on our consolidated results of operations, financial position or cash flows.

In December 2012 and January 2013, the MDL court issued final orders approving two settlements between BP and Plaintiffs’ Class Counsel: (1) a proposed Medical Benefits Class Action Settlement; and (2) a proposed Economic and Property Damages Class Action Settlement. 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 was named in nine additional complaints in May 2016, and two additional complaints in April 2017, filed by individuals alleging, among other things, business and economic loss resulting from the Deepwater Horizon oil spill. The plaintiffs in these lawsuits are generally seeking awards of unspecified compensatory and punitive damages, and attorneys’ fees and costs. These actions have been consolidated in the MDL and we expect they will be dismissed pursuant to the Court’s November 28, 2012 order granting Nalco’s motion for summary judgment.

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

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

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


						Number of shares		Maximum number of
	Total					purchased as part		shares that may
	number of		Average price			of publicly		yet be purchased
	shares		paid per			announced plans		under the plans
Period	purchased	⁽¹⁾	share		⁽²⁾	or programs	⁽³⁾	or programs	⁽³⁾
January 1-31, 2024	-		$	-		-		12,917,097
February 1-29, 2024	195,803			220.6220		107,571		12,809,526
March 1-31, 2024	725,815			226.9213		725,815		12,083,711
Total	921,618		$	225.5830		833,386		12,083,711

(1)

~~(c)~~

~~Issuer Purchases of Equity Securities~~

(c)

(d)

(a)

Number of shares

Maximum number of

Total

(b)

purchased as part

shares that may

number of

Average price

of publicly

yet be purchased

shares

paid per

announced plans

under the plans

Period

purchased(1)

share(2)

or programs(3)

or programs(3)

July 1-31, 2017

302,196

132.5193

301,703

12,698,468

August 1-31, 2017

343,534

131.2854

340,358

12,358,110

September 1-30, 2017

11,084

131.3123

-

12,358,110

Total

656,814

131.8536

642,061

12,358,110

~~(1)~~

Includes ~~14,753~~88,232 shares reacquired from employees and/or directors as swaps for the cost of stock options, or shares surrendered to satisfy minimum statutory tax obligations under our stock incentive plans.

(2)

~~(2)~~

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

(3)

~~(3)~~

As announced on February 24, 2015, our Board of Directors authorized the repurchase of up to 20,000,000 common shares. As announced on November 3, 2022, our Board of Directors authorized the repurchase of up to an additional 10,000,000 shares. Subject to market conditions, we expect to repurchase all shares under ~~the open~~these authorizations, for which no expiration date has been established, in open market or privately negotiated transactions, including pursuant to Rule 10b5-1 and accelerated share repurchase ~~programs.~~

program.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~Iran Threat Reduction~~Rule 10b5-1 Plan Adoptions and ~~Syria Human Rights Act of 2012~~Modifications

Under the Iran Threat Reduction and Syria Human Rights Act of 2012, which added Section 13(r) of the Securities Exchange Act of 1934, the Company is required to disclose in its periodic reports if it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with entities or individuals designated pursuant to certain Executive Orders. Disclosure is required even where the activities are conducted outside the U.S. by non-U.S. affiliates in compliance with applicable law, and even if the activities are not covered or prohibited by U.S. law. In connection with the easing of certain sanctions by the United States against Iran in January 2016 and in compliance with the economic sanctions regulations administered by U.S. Treasury’s Office of Foreign Assets Control (OFAC) and U.S. export control laws, a wholly-owned non-U.S. subsidiary of the Company completed the following sales related to businesses in our Energy operating segment pursuant to and in compliance with the terms and conditions of OFAC’s General License H: sales of products used for process and water treatment applications in (i) upstream oil and gas production and (ii) petrochemical plants totaling $1,019,000 during the subsidiary’s third quarter ended August 31, 2017, and additional sales of such products totaling $552,000 during September 2017, were made to a distributor in Dubai and two distributors in Iran. The net profit before taxes associated with these sales is estimated to be $256,000 and $130,000, respectively. Our non-U.S. subsidiary intends to continue doing business in Iran under General License H in compliance with U.S. economic sanctions and export control laws, which sales may require additional disclosure pursuant to the abovementioned statute.None.

4842

Item 6. Exhibits


Exhibit No.		Document		Method of Filing
~~Exhibit No.~~		~~Document~~			~~Method of Filing:~~
(a)		The following documents are filed as exhibits to this report:
~~(4.1)~~		~~Form of Common Stock Certificate effective October 2, 2017.~~			~~Filed herewith electronically.~~
~~(4.2)~~ (15.1)		~~Sixth Supplemental Indenture, dated August 10, 2017, between the Company and Wells Fargo Bank, National Association~~.		~~Incorporated by reference to Exhibit 4.2 of our Form 8-K dated August 7, 2017. (File No. 01-9328)~~
~~(4.3)~~	~~Form of 2.375% Notes due 2022.~~		~~Included in Exhibit 4.2 above.~~
~~(10.1)~~	~~Documents related to U.S. $2,000,000,000 Commercial Paper Program:~~
~~(10.1a)~~	~~Commercial Paper Issuing and Paying Agency Agreement dated as of September 18, 2017 between Ecolab Inc. and MUFG Union Bank, N.A. as Issuing and Paying Agent.~~		~~Filed herewith electronically.~~
~~(10.1b)~~	~~Corporate Commercial Paper — Master Note dated September 18, 2017, together with Annex thereto.~~		~~Filed herewith electronically.~~
~~(15.1)~~	Letter regarding unaudited interim financial information.		Filed herewith electronically.

(31.1)		Rule 13a - 14(a) CEO Certification.		Filed herewith electronically.

(31.2)		Rule 13a - 14(a) CFO Certification.		Filed herewith electronically.

(32.1)		Section 1350 CEO and CFO Certifications.		Filed herewith electronically.
~~(101.1)~~
(101.INS)		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.		Filed herewith electronically.

(101.SCH)		Inline XBRL Taxonomy Extension Schema.		Filed herewith electronically.

(101.CAL)		Inline XBRL Taxonomy Extension Calculation Linkbase.		Filed herewith electronically.

(101.DEF)		Inline XBRL Taxonomy Extension Definition Linkbase.		Filed herewith electronically.

(101.LAB)		Inline XBRL Taxonomy Extension Label Linkbase.		Filed herewith electronically.

(101.PRE)		Inline XBRL Taxonomy Extension Presentation Linkbase.		Filed herewith electronically.

(104)		Cover Page Interactive Data File.		~~Filed herewith electronically.~~Formatted as Inline XBRL and contained in Exhibit 101.

4943

SIGNATURE

~~SIGNATURE~~

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


			ECOLAB INC.
	~~ECOLAB INC.~~

Date: May 2, 2024	By:	/s/ Jennifer J. Bradway

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

5044



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

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

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

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



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

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

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


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